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SALE AGREEMENT
among
FIRST UNION STUDENT LOAN TRUST 1997-1
as Issuer,
FIRST UNION NATIONAL BANK
as Seller,
AND
THE FIRST NATIONAL BANK OF CHICAGO
not in its individual capacity but solely
as Eligible Lender Trustee
Dated as of June 1, 1997
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SALE AGREEMENT, dated as of June 1, 1997, among FIRST UNION STUDENT LOAN
TRUST 1997-1, a Delaware business trust (the "Issuer"), FIRST UNION NATIONAL
BANK ("First Union"), a national banking association with its principal place of
business in Avondale, Pennsylvania (the "Seller"), and THE FIRST NATIONAL BANK
OF CHICAGO, a national banking association, solely as eligible lender trustee
and not in its individual capacity (the "Eligible Lender Trustee").
WHEREAS the Issuer desires to purchase, and the Seller is willing to sell
to the Issuer all of its right, title and interest in and to the Financed
Student Loans upon the terms and conditions hereinafter set forth;
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;
WHEREAS, it is contemplated that following such sale, transfer and
assignment to the Issuer hereby, that the Issuer will pledge all of its right,
title and interest in and to the Financed Student Loans to the Indenture
Trustee, as security for the payment of notes to be issued pursuant to the
Indenture dated as of June 1, 1997, between the Issuer and the Indenture
Trustee;
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 Indenture, 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 Financed Student Loans. In consideration of the
Issuer's delivery to or upon the order of the Seller on the Closing Date of (i)
the net proceeds from the sale of the Notes and the Certificates (net of the
Reserve Account Initial Deposit) and (ii) the other amounts to be distributed
from time to time to the Seller in accordance with the terms of this Agreement
and the other Basic Documents (as evidenced by the Excess Distribution
Certificate), the Seller does hereby, as evidenced by a duly executed written
assignment in the form of Exhibit A, sell, transfer, assign, set over and
otherwise convey to the Eligible Lender Trustee on behalf of the Issuer, without
recourse (subject to the obligations herein):
(i) all right, title and interest in and to the Financed Student
Loans and all obligations of the Obligors thereunder, including all
moneys paid thereunder, and all written communications received by the
Seller with respect thereto (including borrower correspondence,
notices of death, disability or bankruptcy and requests for deferrals
or forbearance), on or after the Cutoff Date; and
(ii) the proceeds of any and all of the foregoing.
SECTION 2.02. Endorsement. The Seller hereby appoints each of the Eligible
Lender Trustee and the Indenture Trustee as the Seller's true and lawful
attorney-in-fact with full power of substitution to endorse the Seller's name on
any promissory note evidencing the Financed Student Loans transferred to the
Eligible Lender Trustee on behalf of the Trust pursuant to Section 2.01. The
Seller acknowledges and agrees that this power of attorney shall be construed as
a power coupled with an interest, shall be irrevocable as long as the Trust
Agreement remains in effect and shall continue in effect until the Trust
Agreement terminates.
ARTICLE III
THE FINANCED STUDENT LOANS
SECTION 3.01. Representations and Warranties of Seller With Respect to the
Financed Student Loans. The Seller makes the following representations and
warranties as to the Financed Student Loans on which the Issuer is deemed to
have relied in acquiring (through the Eligible Lender Trustee) the Financed
Student Loans. Such representations and warranties speak as of the execution and
delivery of this Agreement and as of the Closing Date, but shall survive the
sale, transfer and assignment of the Financed Student Loans to the Eligible
Lender Trustee on behalf of the Issuer and the pledge thereof to the Indenture
Trustee pursuant to the Indenture.
(i) 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 the Seller 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 and (B) provides or, when
the payment schedule with respect thereto is determined, will provide
for payments on a periodic basis that fully amortize the principal
amount of such Financed Student Loan by its maturity and yield
interest at the rate applicable thereto, 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 any Guarantee
Agreement. Each Financed Student Loan qualifies the holder thereof to
receive Interest Subsidy Payments (other than SLS Loans, unsubsidized
Xxxxxxxx Loans and certain Consolidation Loans) and Special Allowance
Payments from the Department and Guarantee Payments from the
applicable Guarantor and qualifies the applicable Guarantor to receive
reinsurance payments thereon from the Department.
(ii) Schedule of Financed Student Loans. The information set
forth in Schedules A and B to this Agreement is true and correct in
all material respects as of the opening of business on the Cutoff Date
(with respect to Schedules A and B to this Agreement), and no
selection procedures believed to be adverse to the Noteholders or the
Certificateholders were utilized in selecting the Financed Student
Loans. The computer tape regarding the Financed Student Loans made
available to the Issuer and its assigns is true and correct in all
respects as of the Cutoff Date.
(iii) Compliance with Law. Each Financed Student Loan complied at
the time it was originated or made and at the execution of this
Agreement, complies, and the Seller and its agents, with respect to
each such Financed Student Loan, have at all times complied, in all
material respects with all requirements of applicable Federal, state
and local laws and regulations thereunder, including the Higher
Education Act, usury law, the Federal Truth-in-Lending Act, the Equal
Credit Opportunity Act, the Federal Reserve Board's Regulation B and
other consumer credit laws and equal credit opportunity and disclosure
laws and all applicable requirements of the Guarantee Agreements.
(iv) Binding Obligation. Each Financed Student Loan represents
the genuine, legal, valid and binding payment obligation in writing of
the borrower thereof, enforceable by or on behalf of the holder
thereof in accordance with its terms, and no Financed Student Loan has
been satisfied, subordinated or rescinded, subject to clause (xiii)
below.
(v) No Defenses. No right of rescission, setoff, counterclaim or
defense has been asserted or threatened or exists with respect to any
Financed Student Loan.
(vi) No Default. No Financed Student Loan has a payment that is
more than 120 days overdue as of the Cutoff Date 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 120 days, no continuing condition that with notice or
the lapse of time or both would constitute a default, breach,
violation or event permitting acceleration under the terms of any
Financed Student Loan has arisen; and the Seller has not waived and
shall not waive any of the foregoing other than as permitted by the
Basic Documents.
(vii) 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 debtor's estate in the event
of the appointment of a receiver with respect to the Seller. No
Financed Student Loan has been sold, transferred, assigned or pledged
by the Seller to any Person other than the Eligible Lender Trustee on
behalf of the Issuer. Immediately prior to the transfer and assignment
herein contemplated, the Seller had good title to each Financed
Student Loan, free and clear of all Liens and, immediately upon the
transfer thereof, the Eligible Lender Trustee on behalf of the Issuer
shall have good title to each such Financed Student Loan, free and
clear of all Liens, or the transfer shall have been perfected under
the UCC.
(viii) Lawful Assignment. No Financed Student Loan has been
originated in, or is subject to the laws of, any jurisdiction under
which the sale, transfer and assignment of such Financed Student Loan
or any Financed Student Loan under this Agreement or the Indenture is
unlawful, void or voidable.
(ix) 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, shall have been made on or prior
to the Closing Date.
(x) One Original. There is only one original executed copy of the
promissory note evidencing each Financed Student Loan.
(xi) Principal Balance. The aggregate principal balance of the
Financed Student Loans, plus accrued interest to be capitalized with
respect thereto, as of the Cutoff Date, is $--------------.
(xii) No Claims. As of the Cutoff Date, no claim for payment with
respect to a Financed Student Loan has been made to a Guarantor.
(xiii) No Bankruptcies or Deaths. No borrower of any Financed
Student Loan as of the date the Trust was created was noted in the
related Financed Student Loan File as being currently involved in a
bankruptcy proceeding or as having died.
(xiv) General Intangibles. Each Financed Student Loan constitutes
"general intangibles" as defined in the UCC.
(xv) U.S. Obligors. Less than [--]% of the Financed Student Loans
are due from Persons not having a mailing address in the United States
of America.
(xvi) 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), except as
otherwise expressly permitted by the Basic Documents.
SECTION 3.02. Repurchase Upon Breach; Reimbursement. The Seller or the
Eligible Lender Trustee, as the case may be, shall inform the other parties to
this Agreement and the Indenture Trustee promptly, in writing, upon the
discovery of any breach of the Seller's representations and warranties made
pursuant to Section 3.01 or Section 4.01. Unless any such breach shall have been
cured within 120 days following the discovery thereof by the Eligible Lender
Trustee or receipt by the Eligible Lender Trustee of written notice from the
Seller of such breach, the Seller shall be obligated to repurchase any Financed
Student Loan in which the interests of the Noteholders or the Certificateholders
are materially and adversely affected by any such breach as of the first day
succeeding the end of such 120-day period that is the last day of a Collection
Period; provided that it is understood that any such breach that does not affect
any Guarantor's obligation to guarantee payment of such Financed Student Loan to
the Eligible Lender Trustee will not be considered to have a material adverse
effect for this purpose. In consideration of and simultaneously with the
repurchase of the Financed Student Loan, the Seller shall remit the Purchase
Amount, in the manner specified in Section 4.04 of the Master Servicing
Agreement, 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 Financed Student Loan File will thereafter
belong to the Seller. In addition, if any such breach by the Seller does not
trigger such a repurchase obligation but does result in the refusal by a
Guarantor to guarantee all or a portion of the accrued interest, or the loss
(including any obligation of the Issuer to repay to the Department) of certain
Interest Subsidy Payments and Special Allowance Payments, with respect to a
Financed Student Loan, then, unless such breach, if curable, is cured within 120
days, the Seller shall reimburse the Issuer by remitting an amount equal to the
sum of all such non-guaranteed interest amounts and such forfeited Interest
Subsidy Payments and Special Allowance Payments in the manner specified in
Section 4.04 of the Master Servicing Agreement. Subject to the provisions of
Section 4.03, the sole remedy of the Issuer, the Eligible Lender Trustee, the
Indenture Trustee, the Noteholders or the Certificateholders with respect to a
breach of representations and warranties set forth in Section 3.01 or 4.01 and
the agreement contained in this Section shall be to require the Seller to
repurchase Financed Student Loans or to reimburse the Issuer as provided above
pursuant to this Section, subject to the conditions contained herein.
ARTICLE IV
THE SELLER AND THE ADMINISTRATOR
SECTION 4.01. Representations of Seller. The Seller makes the following
representations on which the Issuer is deemed to have relied in acquiring the
Financed Student Loans. The representations speak as of the execution and
delivery of this Agreement and as of the Closing Date, but shall survive the
sale of the Financed Student Loans to the Eligible Lender Trustee on behalf of
the Issuer and the pledge thereof to the Indenture Trustee pursuant to the
Indenture.
(a) Organization and Good Standing. The Seller is duly organized and
validly existing as a national banking association in good standing under the
laws of the United States of America, with the power and 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, the power, authority and legal right to acquire and own the Financed
Student Loans.
(b) Power and Authority of the Seller. The Seller has the power and
authority to execute and deliver this Agreement and to carry out its terms; the
Seller has full power and authority to sell and assign the property to be sold
and assigned to and deposited with the Issuer (or with the Eligible Lender
Trustee on behalf of the Issuer) and the Seller has duly authorized such sale
and assignment to the Issuer (or to the Eligible Lender Trustee on behalf of the
Issuer) by all necessary corporate action; and the execution, delivery and
performance of this Agreement have been duly authorized by the Seller by all
necessary action.
(c) Binding Obligation. This Agreement constitutes a legal, valid and
binding obligation of the Seller, enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization and similar laws
relating to creditors' rights generally or the rights of creditors of banks the
deposit accounts of which are insured by the FDIC and subject to general
principles of equity.
(d) 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 breach of any of the terms and provisions of, nor constitute
(with or without notice or lapse of time or both) a default under, the articles
of association 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.
(e) No Proceedings. There are no proceedings or investigations pending
against the Seller or, to its knowledge, threatened against the Seller before
any court, regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Seller or its properties: (i)
asserting the invalidity of this Agreement or any of the other Basic Documents,
(ii) seeking to prevent the consummation of any of the transactions contemplated
by this Agreement or any of the other Basic Documents, (iii) seeking any
determination or ruling that could reasonably be expected to have a material and
adverse effect on the performance by the Seller of its obligations under, or the
validity or enforceability of, this Agreement, any of the other Basic Documents,
the Notes or the Certificates or (iv) seeking to affect adversely the Federal or
state income tax attributes of the Issuer, the Notes or the Certificates.
SECTION 4.02. Existence. 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 laws of the jurisdiction of its organization.
SECTION 4.03. Liability of Seller; Indemnities. The Seller shall be liable
in accordance herewith only to the extent of the obligations specifically
undertaken by the Seller under this Agreement.
(a) The Seller shall indemnify, defend and hold harmless the Issuer, the
Eligible Lender Trustee and the Indenture Trustee and their officers, directors,
employees and agents from and against any taxes that may at any time be asserted
against any such Person with respect to the transactions contemplated herein and
in the other Basic Documents (except any such income taxes arising out of fees
paid to the Eligible Lender Trustee or the Indenture Trustee), including any
sales, gross receipts, general corporation, tangible personal property,
privilege or license taxes (but, in the case of the Issuer, not including any
taxes asserted with respect to, and as of the date of, the sale of the Financed
Student Loans to the Eligible Lender Trustee on behalf of the Issuer or the
issuance and original sale of the Certificates and the Notes, or asserted with
respect to ownership of the Financed Student Loans or Federal or other income
taxes arising out of distributions on the Certificates and the Notes) and costs
and expenses in defending against the same.
(b) The Seller shall indemnify, defend and hold harmless the Issuer, the
Eligible Lender Trustee, the Indenture Trustee, the Certificateholders and the
Noteholders and the officers, directors, employees and agents of the Issuer, the
Eligible Lender Trustee and the Indenture Trustee from and against any and all
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 negligence in the performance of its duties under this Agreement, or by
reason of reckless disregard of its obligations and duties under this Agreement
and (ii) the Seller's or the Issuer's violation of Federal or state securities
laws in connection with the offering and sale of the Notes and the Certificates.
(c) The Seller shall be liable as primary obligor for, and shall indemnify,
defend and hold harmless the Eligible Lender Trustee and its officers,
directors, employees and agents from and against, all 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 to
which it is a party, 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 to which it is a party; or (iii) shall arise
from the breach by the Eligible Lender Trustee of any of its representations or
warranties set forth in Section 7.03 of the Trust Agreement. In the event of any
claim, action or proceeding for which indemnity will be sought pursuant to this
paragraph, the Eligible Lender Trustee's choice of legal counsel shall be
subject to the approval of the Seller, which approval shall not be unreasonably
withheld.
(d) The Seller shall pay any and all taxes levied or assessed upon all or
any part of the Trust Estate (other than those taxes expressly excluded from the
Seller's responsibilities pursuant to the parentheticals in paragraph (a)
above).
Indemnification under this Section shall survive the resignation or removal
of the Eligible Lender Trustee or the Indenture Trustee and the termination of
this Agreement or the Indenture or the Trust Agreement, as applicable, and shall
include the 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 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, if other than First Union or the Master
Servicer, 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 surviving Seller, if other than First Union or the
Master Servicer, shall have delivered to the Eligible Lender Trustee and the
Indenture Trustee an Officer's 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, (iv) such transaction will not result in a material
adverse Federal or state tax consequence to the Issuer, the Noteholders or the
Certificateholders and (v) unless First Union is the surviving entity, 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 Liability of Seller and Others. The Seller and
any director or officer or employee or agent of the Seller may rely in good
faith on the advice of counsel or on any document of any kind, prima facie
properly executed and submitted by any Person respecting any matters arising
hereunder (provided that such reliance shall not limit in any way the Seller's
obligations under Section 3.02). The Seller shall not be under any obligation to
appear in, prosecute or defend any legal action that shall not be incidental to
its obligations under this Agreement, and that in its opinion may involve it in
any expense or liability.
SECTION 4.06. Seller May Own Certificates or Notes. The Seller and any
Affiliate thereof may in its individual or any other capacity become the owner
or pledgee of Certificates or Notes with the same rights as it would have if it
were not the Seller or an Affiliate thereof, except as expressly provided herein
or in any other Basic Document.
ARTICLE V
MISCELLANEOUS
SECTION 5.01. Amendment. This Agreement may be amended by the Seller and
the Eligible Lender Trustee, with the consent of the Indenture Trustee (such
consent not to be unreasonably withheld), but without the consent of any of the
Noteholders or the Certificateholders, to cure any ambiguity, to correct or
supplement any provisions in this Agreement 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 or
the Certificateholders; 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 or Certificateholder.
This Agreement may also be amended from time to time by the Seller and the
Eligible Lender Trustee, upon the satisfaction of the Rating Agency Condition,
with the consent of the Indenture Trustee (which consent shall not be
unreasonably withheld), the consent of the Noteholders of Notes evidencing not
less than a majority of the Outstanding Amount of the Notes and the consent of
the Certificateholders of Certificates evidencing not less than a majority of
the Certificate Balance, 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 or the Certificateholders;
provided, however, that no such amendment shall (a) increase or reduce in any
manner the amount of, or accelerate or delay the timing of, collections of
payments with respect to Financed Student Loans or distributions that shall be
required to be made for the benefit of the Noteholders or the Certificateholders
or (b) reduce the aforesaid percentage of the Outstanding Amount of the Notes
and the Certificate Balance, the Noteholders or the Certificateholders of which
are required to consent to any such amendment, without the consent of all
outstanding Noteholders and Certificateholders.
Promptly after the execution of any such amendment or consent (or, in the
case of the Rating Agencies, five Business Days prior thereto), the Eligible
Lender Trustee shall furnish written notification of the substance of such
amendment or consent to each Certificateholder, the Indenture Trustee and each
of the Rating Agencies.
It shall not be necessary for the consent of Certificateholders or
Noteholders pursuant to this Section to approve the particular form of any
proposed amendment or consent, but it shall be sufficient if such consent shall
approve the substance thereof.
Prior to the execution of any amendment to this Agreement, the Eligible
Lender Trustee and the Indenture Trustee shall be entitled to receive and rely
upon an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement. The Eligible Lender Trustee and the
Indenture Trustee may, but shall not be obligated to, enter into any such
amendment which affects the Eligible Lender Trustee's or the Indenture
Trustee's, as applicable, own rights, duties or immunities under this Agreement
or otherwise.
SECTION 5.02. Protection of Interests in Trust. (a) The Seller shall
execute and file such financing statements and cause to be executed and filed
such continuation statements, all in such manner and in such places as may be
required by law fully to preserve, maintain, and protect the interest of the
Issuer, the Eligible Lender Trustee and the Indenture Trustee in the Financed
Student Loans and in the proceeds thereof. The Seller shall deliver (or cause to
be delivered) to the Eligible Lender Trustee and the Indenture Trustee
file-stamped copies of, or filing receipts for, any document filed as provided
above, as soon as available following such filing.
(b) The Seller shall not change its name, identity or corporate structure
in any manner that would, could or might make any financing statement or
continuation statement filed in accordance with paragraph (a) above seriously
misleading within the meaning of Section 9-402(7) of the UCC, unless it shall
have given the Eligible Lender Trustee and the Indenture Trustee at least five
days' prior written notice thereof and shall have promptly filed appropriate
amendments to all previously filed financing statements or continuation
statements.
(c) The Seller shall have an obligation to give the Eligible Lender Trustee
and the Indenture Trustee at least 60 days' prior written notice of any
relocation of its principal executive office if, as a result of such relocation,
the applicable provisions of the UCC would require the filing of any amendment
of any previously filed financing or continuation statement or of any new
financing statement and shall promptly file any such amendment.
(d) The Seller shall deliver to the Eligible Lender Trustee and the
Indenture Trustee:
(1) promptly after the execution and delivery of this Agreement, an
Opinion of Counsel either (A) stating that, in the opinion of such counsel, all
financing statements and continuation statements have been executed and filed
that are necessary fully to preserve and protect the interest of the Eligible
Lender Trustee and the Indenture Trustee in the Financed Student Loans, and
reciting the details of such filings or referring to prior Opinions of Counsel
in which such details are given, or (B) stating that, in the opinion of such
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.
(e) The Seller shall, to the extent required by applicable law, cause the
Certificates and the Notes to be registered with the Commission pursuant to
Section 12(b) or Section 12(g) of the Exchange Act within the time periods
specified in such sections.
SECTION 5.03. Notices. All demands, notices and communications upon or to
the Seller, the Eligible Lender Trustee, the Indenture Trustee or the Rating
Agencies under this Agreement shall be in writing, personally delivered or
mailed by certified mail, return receipt requested, (or in the form of telex or
facsimile notice, followed by written notice delivered as aforesaid) and shall
be deemed to have been duly given upon receipt (a) in the case of the Seller, to
First Union National Bank, 000 Xxxxxxxxxxxx Xxxxxx, Xxxxxxxx, XX 00000,
Attention: [Senior Vice President], (telephone: (---) ----------); facsimile:
(---) ----------), (b) in the case of the Issuer or the Eligible Lender Trustee,
at the Corporate Trust Office of the Eligible Lender Trustee, (c) in the case of
the Indenture Trustee, at its Corporate Trust Office, (d) in the case of Fitch,
to Fitch Investors Service, L.P., Xxx Xxxxx Xxxxxx Xxxxx, Xxx Xxxx, XX 00000,
Attention: Asset Backed Surveillance (telephone: 212---------; facsimile:
212---------), and (e) in the case of Moody's, to Xxxxx'x Investors Service,
Inc. 00 Xxxxxx Xxxxxx, Xxx Xxxx, XX 00000, Attention: ABS Monitoring Department,
(telephone: 000-000-0000; facsimile: 212-553-4600); or, as to each of the
foregoing, at such other address as shall be designated by written notice to the
other parties.
SECTION 5.04. Assignment. Notwithstanding anything to the contrary
contained herein, except as provided in Section 4.04, this Agreement may not be
assigned by the Seller. This Agreement may only be assigned by the Eligible
Lender Trustee to its permitted successor pursuant to the Trust Agreement.
SECTION 5.05. Limitations on Rights of Others. The provisions of this
Agreement are solely for the benefit of the Seller, the Issuer and the Eligible
Lender Trustee and for the benefit of the Certificateholders, the Indenture
Trustee and the Noteholders, as third party beneficiaries, and nothing in this
Agreement, whether express or implied, shall be construed to give to any other
Person any legal or equitable right, remedy or claim in the Trust Estate or
under or in respect of this Agreement or any covenants, conditions or provisions
contained herein.
SECTION 5.06. 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 5.07. 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 5.08. Headings. The headings of the various Articles and Sections
herein are for convenience of reference only and shall not define or limit any
of the terms or provisions hereof.
SECTION 5.09. 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 5.10. Assignment to Indenture Trustee. The Seller hereby
acknowledges and consents to any mortgage, pledge, assignment and grant by the
Issuer to the Indenture Trustee pursuant to the Indenture for the benefit of the
Noteholders of a security interest in all right, title and interest of the
Issuer in, to and under the Financed Student Loans and/or the assignment of any
or all of the Issuer's rights and obligations hereunder to the Indenture
Trustee.
SECTION 5.11. Nonpetition Covenants. Notwithstanding any prior termination
of this Agreement, the Seller and the Eligible Lender Trustee shall not, prior
to the date which is one year and one day after the termination of this
Agreement with respect to the Issuer, acquiesce, petition or otherwise invoke or
cause the Issuer to invoke the process of any court or government authority for
the purpose of commencing or sustaining a case against the Issuer under any
Federal or state bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar official
of the Issuer or any substantial part of its property, or ordering the winding
up or liquidation of the affairs of the Issuer.
SECTION 5.12. Limitation of Liability of Eligible Lender Trustee and
Indenture Trustee. (a) Notwithstanding anything contained herein to the
contrary, this Agreement has been signed by The First National Bank of Chicago
not in its individual capacity but solely in its capacity as Eligible Lender
Trustee of the Issuer and in no event shall The First National Bank of Chicago
in its individual capacity or, except as expressly provided in the Trust
Agreement, as beneficial owner of the Issuer have any liability for the
representations, warranties, covenants, agreements or other obligations of the
Issuer hereunder or in any of the certificates, notices or agreements delivered
pursuant hereto as to all of which recourse shall be had solely to the assets of
the Issuer.
(b) Notwithstanding anything contained herein to the contrary, this
Agreement has been accepted by Bankers Trust Company not in its individual
capacity but solely as Indenture Trustee and in no event shall Bankers Trust
Company 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.
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.
FIRST UNION STUDENT LOAN TRUST 1997-1,
By: THE FIRST NATIONAL BANK OF CHICAGO,
not in its individual capacity but
solely as Eligible Lender Trustee on
behalf of the Trust
By:----------------------------
Name: -------------------------
Title: ------------------------
FIRST UNION NATIONAL BANK,
as Seller
By:----------------------------
Name: -------------------------
Title: ------------------------
THE FIRST NATIONAL BANK OF CHICAGO, 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:
BANKERS TRUST COMPANY, not in
its individual capacity but solely as Indenture Trustee,
By:----------------------------
Name: -------------------------
Title: ------------------------
SCHEDULE A
Schedule of Financed Student Loans
SCHEDULE B
Location of Financed Student Loan Files
EXHIBIT A
ASSIGNMENT
For value received, in accordance with the Sale Agreement, dated as of June
1, 1997 (the "Sale Agreement"), among the undersigned, as seller (the "Seller")
and as administrator (the "Administrator"), First Union Student Loan Trust
1997-1 (the "Trust") and The First National Bank of Chicago, not in its
individual capacity but solely as Eligible Lender Trustee (the "Eligible Lender
Trustee"), the undersigned does hereby sell, assign, transfer and otherwise
convey unto the Eligible Lender Trustee on behalf of the Trust, without recourse
(subject to the obligations set forth in the Sale Agreement), all right, title
and interest of the undersigned in and to (i) the Financed Student Loans and all
obligations of the Obligors thereunder, including all monies paid thereunder on
or after the Cutoff Date, and (ii) the proceeds of any and all of the foregoing
(including proceeds derived from the voluntary or involuntary conversion of any
of the 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
Financed Student Loans or any other person in connection with the Financed
Student Loans or any agreement or instrument relating to any of them.
In addition, the undersigned, by execution of this instrument, hereby
endorses the promissory notes evidencing each Financed Student Loan described in
Schedule A to the Sale Agreement in favor of the Eligible Lender Trustee on
behalf of the Trust, without recourse (subject to the obligations set forth in
the 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 Sale
Agreement and is to be governed by the Sale Agreement.
Capitalized terms used but not defined herein shall have the meaning
assigned to them in Appendix A to the Indenture, which also contains rules as to
usage that shall be applicable herein.
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be duly
executed as of June ----, 1997.
FIRST UNION NATIONAL BANK,
as Seller
By:----------------------------
Name: -------------------------
Title: ------------------------
