EXH 99.1
B&W Draft
12/10/96
LOAN SALE AGREEMENT
among
SIGNET STUDENT LOAN TRUST 1996-A,
as Issuer,
SIGNET BANK,
as Seller,
and
THE FIRST NATIONAL BANK OF CHICAGO,
not in its individual capacity but solely
as Eligible Lender Trustee
Dated as of [ ], 1996
LOAN SALE AGREEMENT dated as of [ ], 1996, among
SIGNET STUDENT LOAN TRUST 1996-A, a Delaware trust (the Issuer"),
SIGNET BANK, a Virginia banking corporation, as Seller, and THE
FIRST NATIONAL BANK OF CHICAGO, a national banking association,
solely as eligible lender trustee and not in its individual
capacity (the "Eligible Lender Trustee").
WHEREAS the Issuer desires to purchase from the Seller a portfolio of
federally reinsured student loans originated or acquired in the ordinary course
of business by the Seller;
WHEREAS the Seller is willing to sell such student loans to the
Eligible Lender Trustee on behalf of the Issuer;
WHEREAS the Eligible Lender Trustee is willing to hold legal title to,
and serve as eligible lender trustee with respect to, such student loans on
behalf of the Issuer.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
ARTICLE I
Definitions and Usage
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Capitalized terms used but not defined herein are defined in Appendix
A to the Administration Agreement, dated as of [ ], 1996, among the
Issuer, the Seller, as Administrator, and The Bank of New York, as Indenture
Trustee, which also contains rules as to usage and construction that shall be
applicable herein.
ARTICLE II
Conveyance of Financed Student Loans
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SECTION 2.01. Conveyance of Initial Financed Student Loans. (a) In
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consideration of the Issuer's delivery to or upon the order of the Seller on the
Closing Date of the net proceeds from the sale of the Notes and the Certificates
and the other amounts to be distributed from time to time to the Seller in
accordance with the terms of this Agreement, the Seller does hereby, as
evidenced by a duly executed Xxxx of Sale in the form of Exhibit A hereto, sell,
assign, and otherwise convey to the Issuer (or, in the case of the Initial
Financed Student Loans (as
defined below), to the Eligible Lender Trustee on behalf of the Issuer) without
recourse (subject to the obligations herein): (i) all right, title and interest
in and to the Initial Financed Student Loans, and all obligations of the
Obligors thereunder, together with all documents relating thereto, including the
related Student Loan Files and all rights and privileges relating thereto, (ii)
all payments on or collections received thereunder on and after the Cutoff Date;
(iii) all of its right, title and interest in all funds on deposit from time to
time in the Trust Accounts, including the Reserve Account Initial Deposit and
all investments and proceeds thereof (including all income thereon); and (iv)
all proceeds of any and all of the foregoing.
(b) In connection with the sale and assignment of Financed Student
Loans to the Eligible Lender Trustee on behalf of the Trust, on the Closing
Date, the Seller shall deposit the Reserve Account Initial Deposit into the
Reserve Account.
(c) On the Closing Date, the Eligible Lender Trustee, on behalf of the
Trust, will deposit into the Pre-Funding Account $[ ] and will deposit
into the Reserve Account $[ ] from the net proceeds of the Sale of the
Notes and the Certificates.
(d) On the Closing Date, the Seller will deposit, or cause to be
deposited, into the Collection Account all amounts or collections received under
the Initial Financed Student Loans after the Cutoff Date through and including
the second Business Day preceding the Closing Date.
SECTION 2.02. Conveyance of Additional Student Loans to the Eligible
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Lender Trustee on Behalf of the Trust. (a) Subject to the conditions set forth
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in paragraph (d) below, in consideration of the Issuer's delivery on the related
Transfer Date to or upon the order of the Seller of the Purchase Amount for each
such Additional Student Loan to be delivered to the Seller, the Seller does
hereby sell, transfer, assign, set over and otherwise convey to the Issuer (or,
in the case of the right, title and interest to the Additional Student Loans, to
the Eligible Lender Trustee on behalf of the Issuer), (i) all right, title and
interest of the Seller in and to each Additional Student Loan and all
obligations of the Obligors thereunder, together with all documents, the related
Student Loan Files and all rights and privileges relating thereto, (ii) all
payments on or collections received thereunder on and after the related
Subsequent Cutoff Date and (iii) all proceeds of any and all of the foregoing.
(b) During the Funding Period, upon the tender of any Additional
Student Loans by the Seller on the related Transfer Date and the satisfaction of
the conditions set forth in subsection (d) of this Section 2.02, the Eligible
Lender Trustee
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will so inform the Administrator and the Indenture Trustee, and the Purchase
Amounts for such Additional Student Loans will be withdrawn from the Pre-Funding
Account, subject to the provisions of Section 2(f) of the Administration
Agreement, and will be remitted to or upon the order of the Seller.
(c) After the Funding Period, upon the tender of Additional Student
Loans by the Seller on the related Transfer Date and the satisfaction of the
conditions set forth in subsection (d) of this Section 2.02, the Eligible Lender
Trustee will so inform the Administrator and the Indenture Trustee, and the
Purchase Amounts for such Serial Loans will be withdrawn from amounts on deposit
in the Collection Account, as provided in Section 2(d) of the Administration
Agreement, and will be remitted, as provided therein to or upon the order of the
Seller.
(d) The Seller shall transfer to the Issuer the Additional Student
Loans for a given Transfer Date and the other property and rights related
thereto described in paragraph (a) above only upon the satisfaction of each of
the following conditions on or prior to such Transfer Date:
(i) the Seller shall have delivered to the Eligible Lender Trustee
and the Indenture Trustee a duly executed written assignment (including an
acceptance by the Eligible Lender Trustee and the Indenture Trustee) in
substantially the form of Exhibit B hereto (each, a "Transfer Agreement"),
which shall include supplements to Schedule A hereto, listing such
Additional Student Loans;
(ii) the Seller shall have delivered, at least two days prior to
such Transfer Date, notice of such transfer to the Eligible Lender Trustee,
the Indenture Trustee and the Rating Agencies, including a listing of the
type of loan and the aggregate principal balance of such Additional Student
Loans;
(iii) the Seller shall have deposited in the Collection Account
all amounts on or collections received in respect of the Additional Student
Loans on and after each applicable Subsequent Cutoff Date;
(iv) as of the Transfer Date, the Seller was not insolvent nor will
it have been made insolvent by such transfer nor is it aware of any pending
insolvency;
(v) such addition will not result in a material adverse Federal or
State tax consequence to the Issuer, the Noteholders or the
Certificateholders;
(vi) the Seller shall have delivered to the Indenture Trustee and
the Eligible Lender Trustee an Officers'
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Certificate confirming the satisfaction of each condition precedent
specified in this paragraph (d);
(vii) the Seller shall have delivered (A) to the Rating Agencies
an Opinion of Counsel with respect to the transfer of the Additional
Student Loans transferred to the Issuer on such Transfer Date,
substantially in the form of the Opinion of Counsel delivered to the Rating
Agencies on the Closing Date, and (B) to the Eligible Lender Trustee and
the Indenture Trustee the Opinion of Counsel as required by Section
6.02(f)(1) hereof; provided that no opinion shall be required under either
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subclause (A) or (B) unless the Seller, the Eligible Lender Trustee or the
Indenture Trustee determines that, with regard to the most recent opinion
on the matters described in either such subclause that was delivered with
respect to the Financed Student Loans (whether on the Closing Date or
thereafter under this subsection or under another provision of the Basic
Documents), the conclusion of, or the reasoning underlying, such opinion is
no longer correct in all material respects due to a change in law or
regulations or the ruling of a court, an administrative tribunal or a
regulatory or other governmental authority; upon making any such
determination, whichever of the Seller, the Eligible Lender Trustee and the
Indenture Trustee makes such determination shall notify the others and the
Rating Agencies in writing as to the nature of such changes;
(viii) the Seller shall have taken any action required to maintain
the first perfected ownership interest of the Issuer in the Trust Estate
and the first perfected security interest of the Indenture Trustee in the
Collateral;
(ix) no selection procedures believed by the Seller to be adverse
to the interests of the Certificateholders or the Noteholders shall have
been utilized in selecting the Additional Student Loans;
(x) no Event of Default shall have occurred under the Indenture, no
Servicer Default shall have occurred under the Master Servicing Agreement
and no Administrator Default shall have occurred under the Administration
Agreement; and
(xi) for each Transfer Date occurring after the Funding Period,
after giving effect to the conveyance of any Additional Student Loans on
such Transfer Date, the amount of funds remitted for the purchase of
Additional Student Loans on such Transfer Date, and on each Transfer Date
since the preceding Distribution Date, shall not exceed the Net Principal
Cash Flow Amount (calculated for the Collection Period ending in the
preceding calendar month or, if no Collection Period ended in the preceding
calendar month,
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calculated for each preceding calendar month during the current Collection
Period);
provided, however, that the Seller shall not incur any liability as a result of
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transferring Additional Student Loans on any Transfer Date at a time when the
condition set forth in clause (v) was not satisfied, if at the time of such
transfer the Authorized Officers of the Seller, after reasonable inquiry of
counsel to the Seller, were not aware of any fact that would reasonably suggest
that such condition would not be satisfied as of such date.
SECTION 2.03. Treatment as a Security Agreement. The parties intend
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that the conveyance of the Seller's right, title and interest in and to the
Initial Financed Student Loans pursuant to this Agreement and any Additional
Student Loans pursuant to a related Transfer Agreement shall constitute a
purchase and sale and not a loan. If such conveyance is deemed to be a loan and
not a sale, then the parties also intend and agree that the Seller shall be
deemed to have granted, and in such event do hereby grant to the Issuer, a first
priority security interest in all of the Seller's right, title and interest in,
to and under the Initial Financed Student Loans and any Additional Student Loans
and the other items specified in Sections 2.01 and 2.02, and that this Agreement
(with respect to the Initial Financed Student Loans) and any applicable Transfer
Agreement (with respect to the Additional Student Loans conveyed thereby) shall
each constitute a security agreement under applicable law with respect to such
loans. If such conveyance is deemed to be a loan and not a sale, the Issuer
may, to secure the Issuer's own borrowings under the Indenture, repledge all or
any portion of such loans and the other items specified in Sections 2.01 and
2.02 hereof pledged to the Issuer and not released from the security interest of
this Agreement at the time of such pledge. Such a repledge may be made by the
Issuer with or without a repledge by the Issuer of its rights under this
Agreement, and without further notice to or acknowledgement from the Seller.
The Seller waives, to the extent permitted by applicable law, all claims, causes
of action and remedies whether legal or equitable (including any rights of set-
off) against the Issuer or any assignee of the Issuer relating to such action by
the Issuer in connection with the transactions contemplated by this Agreement,
each Transfer Agreement, the Trust Agreement and the Indenture.
SECTION 2.04. Endorsement. The Seller hereby appoints each of the
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Eligible Lender Trustee and the Indenture Trustee as the Seller's true and
lawful attorney-in-fact with full power of substitution to endorse the Seller's
name on any promissory note evidencing the Initial Financed Student Loans and
any Additional Student Loans transferred to the Eligible Lender Trustee on
behalf of the Trust pursuant to Sections 2.01 and
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2.02. The Seller acknowledges and agrees that this power of attorney shall be
construed as a power coupled with an interest, shall be irrevocable as long as
the Trust Agreement remains in effect and shall continue in effect until the
Trust Agreement terminates.
ARTICLE III
The Financed Student Loans
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SECTION 3.01. Representations and Warranties of Seller with Respect
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to the Financed Student Loans. The Seller represents and warrants with
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respect to the Financed Student Loans as set forth in Exhibit C hereto. Such
representations and warranties speak as of the execution and delivery of this
Agreement and as of the Closing Date, in the case of the Initial Financed
Student Loans, and as of the applicable Transfer Date, in the case of the
Additional Student Loans, but shall survive the sale, transfer and assignment of
the Financed Student Loans to the Eligible Lender Trustee on behalf of the
Issuer and the pledge thereof to the Indenture Trustee pursuant to the
Indenture.
SECTION 3.02. Repurchase upon Breach; Reimbursement. Upon discovery
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by the Seller, the Master Servicer, any Servicer, any Subservicer, the Eligible
Lender Trustee or the Indenture Trustee of any breach of the Seller's
representations and warranties made by the Seller pursuant to Section 3.01 or
Section 4.01, the party discovering the breach shall give prompt written notice
to the others. Unless any such breach shall have been cured within 120 days
after the Seller becomes aware or receives written notice (whichever is earlier)
of such breach, the Seller shall be obligated to repurchase any Financed Student
Loan in which the interests of the Noteholders or the Certificateholders are
materially and adversely affected by any such breach as of the first day
succeeding the end of such 120-day period that is the last day of a Monthly
Collection Period; provided, that, it is understood that any such breach that
does not affect any Guarantor's obligation to guarantee payment of such Financed
Student Loan to the Eligible Lender Trustee will not be considered to have a
material adverse effect for this purpose and it is further understood that any
dispute as to whether a Guarantor's obligation has been so affected will be
resolved by the decision of the Indenture Trustee for so long as Notes are
Outstanding and thereafter by the Eligible Lender Trustee. In consideration of
and simultaneously with the repurchase of a Financed Student Loan, the Seller
shall remit the Purchase Amount therefor, in the manner specified in Section
3.03, and the Issuer shall execute such assignments and other documents
reasonably requested by the Seller in order to effect such transfer. Upon any
such transfer of a Financed Student Loan, legal title to, and
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beneficial ownership and control of, the related Student Loan File will
thereafter belong to the Seller. In addition, if any such breach by the Seller
does not trigger such a repurchase obligation but does result in the refusal by
a Guarantor to guarantee all or a portion of the accrued interest, or the loss
(including any obligation of the Issuer to repay the Department) of certain
Interest Subsidy Payments and Special Allowance Payments, then, unless such
breach, if curable, is cured within 120 days, the Seller shall reimburse the
Issuer by remitting an amount equal to all such non-guaranteed interest amounts
and such forfeited Interest Payments and Special Allowance Payments in the
manner specified in Section 3.03. Subject to the provisions of Section 4.03,
the sole remedy of the Issuer, the Eligible Lender Trustee, the Indenture
Trustee, the Noteholders or the Certificateholders with respect to a breach of
representations and warranties pursuant to Section 3.01, and the agreement
contained in this Section, shall be to require the Seller to repurchase Financed
Student Loans or to reimburse the Issuer as provided above pursuant to this
Section, subject to the conditions contained herein.
SECTION 3.03. Repurchase Deposits. The Seller shall deposit or cause
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to be deposited in the Collection Account the aggregate Purchase Amount with
respect to Purchased Student Loans and all other amounts to be paid by the
Seller under Section 3.02 and Section 5.01 when such amounts are due.
ARTICLE IV
The Seller
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SECTION 4.01. Representations of Seller. The Seller represents as
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set forth in Exhibit D hereto. Such representations speak as of the execution
and delivery of this Agreement and as of the Closing Date in the case of the
Initial Financed Student Loans, and as of the applicable Transfer Date in the
case of the Additional Student Loans, but shall survive the sale, transfer and
assignment of the Financed Student Loans to the Eligible Lender Trustee on
behalf of the Issuer and the pledge thereof to the Indenture Trustee pursuant to
the Indenture.
SECTION 4.02. Existence. Subject to Section 4.04 hereof, during the
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term of this Agreement, the Seller will keep in full force and effect its
existence, rights and franchises as a banking corporation under the laws of the
jurisdiction of its organization and will obtain and preserve its qualification
to do business in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this Agreement, the
other Basic Documents and each other instrument or agreement necessary or
appropriate to the proper
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administration of this Agreement and the transactions contemplated hereby.
SECTION 4.03. Liability of Seller; Indemnities. The Seller shall be
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liable in accordance herewith only to the extent of the obligations specifically
undertaken by the Seller under this Agreement.
(a) The Seller shall indemnify, defend and hold harmless the
Issuer, the Eligible Lender Trustee and the Indenture Trustee and their
officers, directors, employees and agents from and against any taxes that
may at any time be asserted against any such Person with respect to the
transactions contemplated herein and in the other Basic Documents (except
any such income taxes arising out of fees paid to the Eligible Lender
Trustee or the Indenture Trustee), including any sales, gross receipts,
general corporation, tangible personal property, privilege or license taxes
(but, in the case of the Issuer, not including the issuance and original
sale of the Certificates and the Notes, or asserted with respect to
ownership of the Financed Student Loans or Federal or other income taxes
arising out of distributions on the Certificates and the Notes) and costs
and expenses in defending against the same.
(b) The Seller shall indemnify, defend and hold harmless the
Issuer, the Eligible Lender Trustee, the Indenture Trustee, the
Certificateholders and the Noteholders and the officers, directors,
employees and agents of the Issuer, the Eligible Lender Trustee and the
Indenture Trustee from and against any and all reasonable costs and
expenses and any and all losses, claims, damages and liabilities in each
case arising out of, or imposed upon such Person through, (i) the Seller's
willful misfeasance, bad faith or negligence in the performance of its
duties under this Agreement, or by reason of reckless disregard of its
obligations and duties under this Agreement and (ii) the Seller's or the
Issuer's violation of Federal or state securities laws in connection with
the offering and sale of the Notes and the Certificates.
(c) The Seller shall be liable as primary obligor for, and shall
indemnify, defend and hold harmless the Eligible Lender Trustee and its
officers, directors, employees and agents from and against, all reasonable
costs and expenses and all losses, claims, damages, obligations and
liabilities arising out of, incurred in connection with or relating to the
Trust Agreement, the other Basic Documents, the Trust Estate, the
acceptance or performance of the trusts and duties set forth herein and in
the Trust Agreement or the action or the inaction of the Eligible Lender
Trustee hereunder and under the Trust Agreement, except to the
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extent that such cost, expense, loss, claim, damage, obligation or
liability: (i) shall be due to the willful misfeasance, bad faith or
negligence (except for errors in judgment) of the Eligible Lender Trustee,
(ii) shall arise from any breach by the Eligible Lender Trustee of its
covenants under any of the Basic Documents; or (iii) shall arise from the
breach by the Eligible Lender Trustee of any of its representations or
warranties set forth in Section 7.03 of the Trust Agreement. In the event
of any claim, action or proceeding for which indemnity will be sought
pursuant to this paragraph, the Eligible Lender Trustee's choice of legal
counsel shall be subject to the approval of the Seller, which approval
shall not be unreasonably withheld.
(d) The Seller shall pay any and all taxes levied or assessed upon
all or any part of the Trust Estate (other than those taxes expressly
excluded from the Seller's responsibilities pursuant to the parentheticals
in paragraph (a) above).
Indemnification under this Section shall survive the resignation or
removal of the Eligible Lender Trustee or the Indenture Trustee and the
termination of this Agreement or the Indenture or the Trust Agreement, as
applicable, and shall include reasonable fees and expenses of counsel and
expenses of litigation. If the Seller shall have made any indemnity payments
pursuant to this Section and the Person to or on behalf of whom such payments
are made thereafter shall collect any of such amounts from others, such Person
shall promptly repay such amounts to the Seller, without interest.
SECTION 4.04. Merger or Consolidation of, or Assumption of the
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Obligations of Seller. Any Person (a) into which the Seller may be merged or
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consolidated, (b) which may result from any merger or consolidation to which the
Seller shall be a party, (c) which may succeed to the properties and assets of
the Seller substantially as a whole or (d) to which the student lending business
of the Seller shall otherwise be transferred substantially as a whole, shall be
the successor to the Seller without the execution or filing of any document or
any further act by any of the parties to this Agreement; provided, however, that
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the Seller hereby covenants that it will not consummate any of the foregoing
transactions except upon satisfaction of the following: (i) the surviving
entity, if other than the Seller, executes an agreement of assumption to perform
every obligation of the Seller under this Agreement, (ii) immediately after
giving effect to such transaction, no representation or warranty made pursuant
to Section 3.01 or 4.01 shall have been breached and no Servicer Default, Event
of Default or Administrator Default and no event that, after notice or lapse of
time, or both, would become a Servicer Default, Event of Default or
Administrative
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Default shall have occurred and be continuing, (iii) the Seller shall have
delivered to the Eligible Lender Trustee and the Indenture Trustee an Officers'
Certificate and an Opinion of Counsel each stating that such consolidation,
merger, succession or transfer and such agreement of assumption comply with this
Section and that all conditions precedent, if any, provided for in this
Agreement relating to such transaction have been complied with, and that the
Rating Agency Condition shall have been satisfied with respect to such
transaction or, in the case of a transfer pursuant to clause (d) to a Person
that is a Non-Code Entity, notice of such transfer and assumption shall have
been delivered to each Rating Agency, (iv) such transaction will not result in a
material adverse Federal or state tax consequence to the Issuer, the Noteholders
or the Certificateholders and (v) unless the Seller is the surviving entity,
the surviving entity shall have delivered to the Eligible Lender Trustee and the
Indenture Trustee an Opinion of Counsel either (A) stating that, in the opinion
of such counsel, all financing statements and continuation statements and
amendments thereto have been executed and filed that are necessary fully to
preserve and protect the interest of the Eligible Lender Trustee and Indenture
Trustee, respectively, in the Financed Student Loans and reciting the details of
such filings, or (B) stating that, in the opinion of such counsel, no such
action shall be necessary to preserve and protect such interests.
SECTION 4.05. Limitation on Liabilities of Seller and Others. The
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Seller and any director or officer or employee or agent of the Seller may rely
in good faith on the advice of counsel or on any document of any kind, prima
facie properly executed and submitted by any Person respecting any matters
arising hereunder (provided that such reliance shall not limit in any way the
Seller's obligations under Section 3.02). The Seller shall not be under any
obligation to appear in, prosecute or defend any legal action that is not
incidental to its respective obligations under this Agreement, and that in its
opinion may involve it in any expense or liability.
SECTION 4.06. Seller May Own Certificates or Notes. The Seller and
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any Affiliate of the Seller may in its individual or any other capacity become
the owner or pledgee of Certificates or Notes with the same rights as it would
have if it were not the Seller or an Affiliate of the Seller, except as
expressly provided herein or in any other Basic Document.
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ARTICLE V
Termination
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SECTION 5.01. Termination. (a) Optional Purchase of All Financed
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Student Loans. As of the last day of any Collection Period immediately
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preceding a Distribution Date as of which the then outstanding Pool Balance is
10% or less of the sum of the Initial Pool Balance and the Pre-Funded Amount as
of the Closing Date, the Seller or its designee shall have the option to
purchase the Trust Estate, other than the Trust Accounts. To exercise such
option, the Seller shall deposit in the Collection Account an amount equal to
the aggregate Purchase Amount for the Financed Student Loans and the related
rights with respect thereto, plus the appraised value of any such other property
held by the Trust other than the Trust Accounts, such value to be determined by
an appraiser mutually agreed upon by the Master Servicer, the Eligible Lender
Trustee and the Indenture Trustee, and shall succeed to all interests in and to
the Trust; provided, however, that the Seller may not effect such purchase if
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the aggregate Purchase Amount to be so deposited in the Collection Account does
not equal or exceed the sum of (i) an amount equal to the unpaid principal
Balance of the Notes, plus accrued and unpaid interest thereon at the Note
Interest Rate to the date of exercise[, and the amount of unpaid Noteholders'
Interest LIBOR Carryover] and (ii) an amount equal to the unpaid Certificate
Balance, plus accrued and unpaid interest thereon at the Certificate Rate to the
date of exercise [and the amount of unpaid Certificateholders' Interest LIBOR
Carryover with respect thereto].
(b) Insolvency of Company. Upon any sale of the assets of the Trust
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pursuant to Section 9.02 of the Trust Agreement, the Seller shall cooperate with
and assist the Administrator consistent with the provisions of the
Administration Agreement with respect to Company insolvency.
ARTICLE VI
Miscellaneous
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SECTION 6.01. Amendment. This Agreement may be amended by the Seller
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and the Eligible Lender Trustee, with the consent of the Indenture Trustee, but
without the consent of any of the Noteholders or the Certificateholders, to cure
any ambiguity, to correct or supplement any provisions in this Agreement, for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions in this Agreement or of modifying in any manner the rights
of the Noteholders or the Certificateholders or in connection with a transaction
described in Section 4.04 hereof; provided, however,
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that such action shall not, as evidenced by an Opinion of Counsel delivered to
the Eligible Lender Trustee and the Indenture Trustee, adversely affect the
interests of any Noteholder or any Certificateholder.
This Agreement may also be amended from time to time by the Seller and
the Eligible Lender Trustee, with the consent of the Indenture Trustee, the
Noteholders of Notes evidencing not less than a majority of the Outstanding
Amount of the Notes and the Certificateholders of Certificates evidencing not
less than a majority of the Certificate Balance, for the purpose of adding 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)
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increase or reduce in any manner the amount of, or accelerate or delay the
timing of, collections of payments with respect to Financed Student Loans or
distributions that shall be required to be made for the benefit of the
Noteholders or the Certificateholders or (b) reduce the aforesaid percentage of
the Outstanding Amount of the Notes and the Certificate Balance, the Noteholders
or the Certificateholders of which are required to consent to any such
amendment, without the consent of all outstanding Noteholders and
Certificateholders.
Promptly after the execution of any such amendment or consent (or, in
the case of the Rating Agencies, five Business Days prior thereto), the Eligible
Lender Trustee shall furnish written notification of the substance of such
amendment or consent to the Seller, the Administrator, the Indenture Trustee,
the Master Servicer and each of the Rating Agencies.
It shall not be necessary for the consent of Certificateholders or
Noteholders pursuant to this Section to approve the particular form of any
proposed amendment or consent, but it shall be sufficient if such consent shall
approve the substance thereof.
Prior to the execution of any amendment to this Agreement, the
Eligible Lender Trustee and the Indenture Trustee shall receive upon request and
rely upon an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement and the Opinion of Counsel referred to
in Section 6.02(f). The Eligible Lender Trustee and the Indenture Trustee may,
but shall not be obligated to, enter into any such amendment which affects the
Eligible Lender Trustee's or the Indenture Trustee's, as applicable, own rights,
duties or immunities under this Agreement or otherwise.
SECTION 6.02. Protection of Interests in Trust. (a) The Seller shall
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execute and file such financing statements and cause to be executed and filed
such continuation statements, all
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in such manner and in such places as may be required by law fully to preserve,
maintain, and protect the interest of the Issuer, the Eligible Lender Trustee
and the Indenture Trustee in the Financed Student Loans and in the proceeds
thereof. The Seller shall deliver (or cause to be delivered) to the Eligible
Lender Trustee and the Indenture Trustee file-stamped copies of, or filing
receipts for, any document filed as provided above, on or prior to the date of
transfer of any Financed Student Loans to the Trust.
(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 (S)9-402(7) of the UCC, unless it shall have
given the Eligible Lender Trustee and the Indenture Trustee at least five (5)
days' prior written notice thereof and shall have promptly filed appropriate
amendments to all previously filed financing statements or continuation
statements.
(c) The Seller shall have an obligation to give the Eligible Lender
Trustee, the Indenture Trustee and the Rating Agencies at least five (5) days
prior written notice of any relocation of its principal executive office if, as
a result of such relocation, the applicable provisions of the UCC would require
the filing of any amendment of any previously filed financing or continuation
statement or of any new financing statement and shall promptly file any such
amendment.
(d) If at any time the Seller shall propose to sell, grant a security
interest in, or otherwise transfer any interest in student loans to any
prospective purchaser, lender or other transferee, the Seller shall give to such
prospective purchaser, lender or other transferee computer tapes, records or
printouts (including any restored from backup archives) that, if they shall
refer in any manner whatsoever to any Financed Student Loan, shall indicate
clearly that such Financed Student Loan has been sold and is owned by the Issuer
and has been pledged to the Indenture Trustee.
(e) The Seller shall, to the extent required by applicable law, cause
the Certificates and the Notes to be registered with the Commission pursuant to
Section 12(b) or Section 12(g) of the Exchange Act within the time periods
specified in such sections.
(f) The Seller shall deliver to the Eligible Lender Trustee and the
Indenture Trustee:
(1) promptly after the execution and delivery of this Agreement and
of each amendment thereto and on each Transfer Date, an Opinion of Counsel
either (A) stating that, in the
13
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 that a single
--------
Opinion of Counsel may be delivered in satisfaction of the foregoing
requirement and that of Section 3.06(b) of the Indenture.
Each Opinion of Counsel referred to in clause (1) or (2) above shall
specify (as of the date of such opinion and given all applicable laws as in
effect on such date) any action necessary to be taken in the following year to
preserve and protect such interest.
SECTION 6.03. Notices. All demands, notices and communications upon
-------
or to the Seller, the Master Servicer, the Issuer, the Eligible Lender Trustee,
the Indenture Trustee, the Administrator or the Rating Agencies under this
Agreement shall be in writing, personally delivered or mailed by certified mail,
return receipt requested (or in the form of telex or facsimile notice, followed
by written notice delivered as aforesaid), and shall be deemed to have been duly
given upon receipt;
(a) in the case of the Seller, to
Signet Bank
0 Xxxxx 0xx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Treasurer
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
14
(b) in the case of the Master Servicer and
Administrator, to
Signet Bank
0 Xxxxx 0xx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Treasurer
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
(c) in the case of the Issuer, to
Signet Student Loan Trust 0000-X,
x/x Xxxxx Xxxxxxx Xxxxxxxx Inc., Trustee
000 Xxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
with a copy to the Eligible Lender Trustee
at the Corporate Trust Office of the
Eligible Lender Trustee
(d) in the case of the Issuer or the Eligible Lender Trustee, at
the Corporate Trust Office of the Eligible Lender Trustee;
(e) in the case of the Indenture Trustee, at its Corporate Trust
Office;
(f) [the Rating Group], to
_______________________
_______________________
_______________________
_______________________
_______________________
Attention: ______________________
Telephone: ______________________
Telecopy : ______________________
or, as to each of the foregoing, at such other address as shall be designated by
written notice to the other parties.
SECTION 6.04. Assignment. Notwithstanding anything to the contrary
----------
contained herein, except as provided in Section 4.04, this Agreement may not be
assigned by the Seller. This Agreement may only be assigned by the Eligible
Lender Trustee to its permitted successor pursuant to the Trust Agreement.
SECTION 6.05. Limitations on Rights of Others. The provisions of
-------------------------------
this Agreement are solely for the benefit of the Seller, the Issuer, and the
Eligible Lender Trustee and for the
15
benefit of the Certificateholders, the Indenture Trustee and the Noteholders, as
third party beneficiaries, and nothing in this Agreement, whether express or
implied, shall be construed to give to any other Person any legal or equitable
right, remedy or claim in the Trust Estate or under or in respect of this
Agreement or any covenants, conditions or provisions contained herein.
SECTION 6.06. Severability. Any provision of this Agreement that is
------------
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 6.07. Separate Counterparts. This Agreement may be executed
---------------------
by the parties hereto in separate counterparts, each of which when so executed
and delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 6.08. Headings. The headings of the various Articles and
--------
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
SECTION 6.09. Governing Law. This Agreement shall be construed in
-------------
accordance with the laws of the Commonwealth of Virginia, without reference to
its conflict of law provisions, and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws.
SECTION 6.10. Assignment to Indenture Trustee. The Seller hereby
-------------------------------
acknowledges and consents to any mortgage, pledge, assignment and grant by the
Issuer to the Indenture Trustee pursuant to the Indenture for the benefit of the
Noteholders of a security interest in all right, title and interest of the
Issuer in, to and under the Financed Student Loans or the assignment of any or
all of the Issuer's rights and obligations hereunder to the Indenture Trustee.
SECTION 6.11. Non-Petition Covenants. Notwithstanding any prior
----------------------
termination of this Agreement, the Seller shall not, prior to the date which is
one year and one day after the termination of this Agreement with respect to the
Issuer, acquiesce, petition or otherwise invoke or cause the Issuer to invoke
the process of any court or government authority for the purpose of commencing
or sustaining a case against the Issuer under any Federal or state bankruptcy,
insolvency or similar law or appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of the Issuer
16
or any substantial part of its property, or ordering the winding up or
liquidation of the affairs of the Issuer.
SECTION 6.12. Limitation of Liability of Eligible Lender Trustee and
------------------------------------------------------
Indenture Trustee. (a) Notwithstanding anything contained herein to the
-----------------
contrary, this Agreement has been signed by The First National Bank of Chicago
not in its individual capacity but solely in its capacity as Eligible Lender
Trustee of the Issuer and in no event shall The First National Bank of Chicago
in its individual capacity or, except as expressly provided in the Trust
Agreement, as beneficial owner of the Issuer have any liability for the
representations, warranties, covenants, agreements or other obligations of the
Issuer hereunder or in any of the certificates, notices or agreements delivered
pursuant hereto as to all of which recourse shall be had solely to the assets of
the Issuer.
(b) Notwithstanding anything contained herein to the contrary, this
Agreement has been accepted by The Bank of New York not in its individual
capacity but solely as Indenture Trustee and in no event shall The Bank of New
York have any liability for the representations, warranties, covenants,
agreements or other obligations of the Issuer hereunder or in any of the
certificates, notices or agreements delivered pursuant hereto, as to all of
which recourse shall be had solely to the assets of the Issuer.
SECTION 6.13. Agreement of Seller. The Seller agrees to execute and
-------------------
deliver such instruments and to take such actions as the Eligible Lender
Trustee, the Issuer, or the Indenture Trustee may reasonably request in order to
effectuate the terms and carry out the purposes of this Agreement.
SECTION 6.14. Confidentiality. (a) The Eligible Lender Trustee and
---------------
its agents, representatives or employees shall at all times maintain the
confidentiality of all Confidential Information and shall not, without the prior
written consent of the Seller, disclose to third parties (including Noteholders
or Certificateholders) or use such information, in any manner whatsoever, in
whole or in part, except as expressly permitted under this Agreement or as
required to fulfill an obligation of the Eligible Lender Trustee under this
Agreement, in which case such Confidential Information shall be revealed only to
the extent required for the purpose of fulfilling an obligation of the Eligible
Lender Trustee under this Agreement. Notwithstanding the above, Confidential
Information may be disclosed to the extent required by law or legal process,
provided that the Eligible Lender Trustee gives prompt written notice to the
Seller of the nature and scope of such disclosure.
(b) Notwithstanding anything in this Agreement to the contrary, the
Seller shall not be obligated to disclose to any
17
Person (i) any information regarding Obligors, the disclosure of which is
prohibited by applicable law, or (ii) any information relating to the strategic
plans or opportunities of its student lending business.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective officers as of the day and year first above
written.
SIGNET STUDENT LOAN TRUST 1996-A,
by
THE FIRST NATIONAL BANK OF CHICAGO, not
in its individual capacity but solely
as Eligible Lender Trustee on behalf of
the Trust,
by
_____________________________________
Name:
Title:
SIGNET BANK
by
________________________________________
Name:
Title:
THE FIRST NATIONAL BANK OF
CHICAGO, not in its individual capacity but
solely as Eligible Lender Trustee,
by
________________________________________
Name:
Title:
18
Acknowledged and accepted
as of the day and year first
above written:
THE BANK OF NEW YORK, not in
its individual capacity but
solely as Indenture Trustee,
by
________________________
Name:
Title:
19
SCHEDULE A
TO THE
LOAN SALE AGREEMENT
Schedule of Student Loans
-------------------------
[To be supplied by Signet at Closing.]
20
EXHIBIT A
TO THE LOAN SALE AGREEMENT
XXXX OF SALE
For value received, in accordance with the Loan Sale Agreement (the
"Loan Sale Agreement") dated as of [ ], 1996, among Signet Bank, as
seller (the "Seller"), Signet Student Loan Trust 1996-A (the "Trust"), and The
First National Bank of Chicago, not in its individual capacity but solely as
Eligible Lender Trustee (the "Eligible Lender Trustee"), the Seller does hereby
sell, assign, transfer and otherwise convey unto the Eligible Lender Trustee on
behalf of the Trust, without recourse (subject to the obligations set forth in
the Loan Sale Agreement), all right, title and interest in and to (i) the
Initial Financed Student Loans and all obligations of the Obligors thereunder,
together with all documents, the related Student Loan Files and all rights and
privileges related thereto, (ii) all payments and/or collections received
thereunder on and after the Cutoff Date, (iii) all funds on deposit from time to
time in the Trust Accounts, including the Reserve Account Initial Deposit and
the Pre-Funded Amount, and in all investments and proceeds thereof (including
all income thereon) and (iv) all proceeds of any and all of the foregoing
(including but not limited to proceeds derived from the voluntary or involuntary
conversion of any of the Initial Financed Student Loans into cash or other
liquidated property, such as proceeds from the applicable Guarantee Agreement).
The foregoing sale does not constitute and is not intended to result in any
assumption by the Eligible Lender Trustee or the Trust of any obligation of the
Seller to the borrowers of Initial Financed Student Loans or any other Person in
connection with the Initial Financed Student Loans or any agreement or
instrument relating to any of them.
In addition, the undersigned, by execution of this instrument, hereby
endorses the promissory notes evidencing each Initial Financed Student Loan
described in Schedule A to the Loan Sale Agreement in favor of the Eligible
Lender Trustee on behalf of the Trust, without recourse (subject to the
obligations set forth in the Loan Sale Agreement) against the undersigned. This
endorsement may be effected by attaching a facsimile hereof to each or any of
such promissory notes.
This Xxxx of Sale is made pursuant to and upon the representations,
warranties and agreements on the part of the undersigned contained in the Loan
Sale Agreement and is to be governed by the Loan Sale Agreement.
Capitalized terms used but not defined herein shall have the meaning
assigned to them in Appendix A to the
A-1
Administration Agreement, dated as of [ ], 1996, among Signet Student
Loan Trust 1996-A, as Issuer, Signet Bank, as Administrator, and The Bank of New
York, as Indenture Trustee, which also contains rules as to usage that shall be
applicable herein.
IN WITNESS WHEREOF, the undersigned has caused this Xxxx of Sale to be
duly executed as of [ ], 1996.
SIGNET BANK, as Seller
by
________________________
Name:
Title:
A-2
EXHIBIT B
TO THE
LOAN SALE AGREEMENT
TRANSFER AGREEMENT
TRANSFER No. _____ Of ADDITIONAL STUDENT LOANS dated as of
______________, _____, among SIGNET STUDENT LOAN TRUST 1996-A, a Delaware trust
(the "Issuer"), SIGNET BANK, as seller (the "Seller") and THE FIRST NATIONAL
BANK OF CHICAGO, a national banking association, as seller, not in its
individual capacity but solely as Eligible Lender Trustee of the Issuer (the
"Eligible Lender Trustee").
W I T N E S S E T H:
WHEREAS the Issuer, the Seller and the Eligible Lender Trustee are
parties to the Loan Sale Agreement dated as of [ ], 1996 (as
amended or supplemented, the "Loan Sale Agreement");
WHEREAS the Seller, as depositor, Signet Student Loan Corporation, as
Company, and the Eligible Lender Trustee are parties to the Trust Agreement
dated as of [ ], 1996 (as amended or supplemented, the "Trust
Agreement");
WHEREAS pursuant to the Loan Sale Agreement, the Seller wishes to
convey the Additional Student Loans referred to in Section 2 (the "Additional
Student Loans") to the Eligible Lender Trustee on behalf of the Issuer; and
WHEREAS, the Eligible Lender Trustee and the Issuer are willing to
accept such conveyance subject to the terms and conditions hereof.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Definitions and Usage. Unless otherwise defined herein,
---------------------
capitalized terms used herein shall have the meanings ascribed to them in
Appendix A to the Loan Sale Agreement, which also contains rules of construction
and usage that shall be applicable herein.
In addition, the following terms have the following meanings:
"Subsequent Cutoff Date" means, with respect to each Additional
----------------------
Student Loan, the date specified as such on Schedule A hereto.
"Transfer Date" means, with respect to the Additional Student Loans,
-------------
________________, _______.
B-1
2. Schedule of Financed Student Loans. Attached hereto as Schedule
----------------------------------
A is a supplement to Schedule A to the Loan Sale Agreement listing the
Additional Student Loans to be conveyed on the Transfer Date to the Eligible
Lender Trustee on behalf of the Issuer pursuant to this Agreement.
3. Conveyance of Additional Student Loans. In consideration of the
--------------------------------------
Issuer's delivery to or upon the order of the Seller of $___________ (such
amount being the Purchase Amounts of the Additional Student Loans and such
amount to be paid, during the Funding Period, from amounts on deposit in the
Pre-Funding Account subject to the provisions of Section 2.02(b) of the Loan
Sale Agreement and Section 2(f) of the Administration Agreement and after the
Funding Period from amounts on deposit in the Collection Account), the Seller
does hereby sell, assign and otherwise convey, without recourse (except as
expressly provided in the Loan Sale Agreement), to the Eligible Lender Trustee
on behalf of the Issuer:
(a) All right, title and interest in and to the Additional Student
Loans and all obligations of the Obligors thereunder, together with all
documents, the related Student Loan Files and all rights and privileges
relating thereto;
(b) all payments on or collections received thereunder, on and
after the related Subsequent Cutoff Date; and
(c) all proceeds of any and all of the foregoing.
4. Conditions Precedent. The obligation of the Issuer to acquire
--------------------
the Additional Student Loans hereunder is subject to the satisfaction, on or
prior to the Transfer Date, of the following conditions precedent:
(a) Representations and Warranties. Each of the representations
------------------------------
and warranties made by the Seller in Sections 3.01 and 4.01 of the Loan
Sale Agreement shall be true and correct as of the Transfer Date.
(b) Loan Sale Agreement Conditions. Each of the conditions set
------------------------------
forth in Section 2.02(d) of the Loan Sale Agreement shall have been
satisfied.
(c) Delivery of Xxxx of Sale. The Seller shall have delivered a
------------------------
Xxxx of Sale substantially in the form of Annex A hereto.
(d) Additional Information. The Seller shall have delivered to the
----------------------
Issuer such information as was reasonably requested by the Issuer to
satisfy itself as to (i) the accuracy of the representations and warranties
set forth in
B-2
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. Counterparts. This Agreement may be executed in separate
------------
counterparts, each of which when so executed and delivered shall be an original,
but all of which together shall constitute but one and the same instrument.
7. Governing Law. This Agreement shall be construed in accordance
-------------
with the laws of the Commonwealth of Virginia, without reference to its conflict
of law provisions, and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws.
8. Headings. The section headings hereof have been inserted for
--------
convenience of reference only and shall not be construed to affect the meaning,
construction or effect of this Agreement.
B-3
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their respective duly authorized officers as
of the day and the year first above written.
SIGNET STUDENT LOAN TRUST 1996-A,
by
THE FIRST NATIONAL BANK OF CHICAGO, not in
its individual capacity but solely as
Eligible Lender Trustee,
by
_____________________________________
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO, not in its
individual capacity but solely as Eligible Lender
Trustee,
by
___________________________________
Name:
Title:
SIGNET BANK, Seller
by
__________________________________
Name:
Title:
Acknowledged and accepted as
of the date first above written:
THE BANK OF NEW YORK,
not in its individual
capacity but solely as
Indenture Trustee,
by
_______________________
Name:
Title:
B-4
SCHEDULE A
TO THE
TRANSFER AGREEMENT NO. ___
[List of Additional Student Loans
and their related Subsequent Cutoff Dates]
B-5
ANNEX A
TO THE TRANSFER AGREEMENT
XXXX OF SALE
For value received, in accordance with the Loan Sale Agreement (the
"Loan Sale Agreement") dated as of [ ], 1996, among Signet Bank, as
seller (the "Seller"), Signet Student Loan Trust 1996-A (the "Trust") and The
First National Bank of Chicago, not in its individual capacity but solely as
Eligible Lender Trustee (the "Eligible Lender Trustee") ratified by the Transfer
Agreement No. ____ dated as of ______, ______ (the "Transfer Agreement") among
the Seller, the Trust and the Eligible Lender Trustee, the Seller does hereby
sell, assign, transfer and otherwise convey unto the Eligible Lender Trustee on
behalf of the Trust, without recourse (subject to the obligations set forth in
the Loan Sale Agreement), all right, title and interest in and to (i) the
Additional Student Loans and all obligations of the Obligors thereunder,
together with all documents, the related Student Loan Files and all rights and
privileges related thereto, (ii) all payments and collections received
thereunder, on and after the Subsequent Cutoff Date and (iii) all proceeds of
any and all of the foregoing (including but not limited to proceeds derived from
the voluntary or involuntary conversion of any of the Additional Student Loans
into cash or other liquidated property, such as proceeds from the applicable
Guarantee Agreement). The foregoing sale does not constitute and is not
intended to result in any assumption by the Eligible Lender Trustee or the Trust
of any obligation of the Seller to the borrowers of the Additional Student Loans
or any other person in connection with the Additional Student Loans or any
agreement or instrument relating to any of them.
In addition, the undersigned, by execution of this instrument, hereby
endorses the promissory notes evidencing each Additional Student Loan described
in Schedule A to the Transfer Agreement in favor of the Eligible Lender Trustee
on behalf of the Trust, without recourse (subject to the obligations set forth
in the Loan Sale Agreement) against the undersigned. This endorsement may be
effected by attaching a facsimile hereof to each or any of such promissory
notes.
This Assignment is made pursuant to and upon the representations,
warranties and agreements on the part of the undersigned contained in the Loan
Sale Agreement and the Transfer Agreement and is to be governed by the Loan Sale
Agreement and the Transfer Agreement.
B-6
Capitalized terms used but not defined herein shall have the meaning
assigned to them in the Transfer Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Xxxx of Sale to be
duly executed as of ________________, ______.
SIGNET BANK, as Seller
by
___________________________
Name:
Title:
B-7
EXHIBIT C
TO THE LOAN SALE AGREEMENT
1. Characteristics of Financed Student Loans. Each Financed Student
-----------------------------------------
Loan (A) was originated in the United States of America, its territories,
its possessions or other areas subject to its jurisdiction by an "eligible
lender" under the Higher Education Act in the ordinary course of its
business to an eligible borrower under applicable law and agreements and
was fully and properly executed by the parties thereto, (B) was originated
or acquired by the Seller in the ordinary course of its business, and (C)
provides or, when the payment schedule with respect thereto is determined,
will provide for payments on a periodic basis that fully amortizes the
principal amount of such Financed Student Loan by its maturity, as such
maturity may be modified in accordance with any applicable deferral or
forbearance periods granted in accordance with applicable laws and
restrictions, including those of the Higher Education Act or the applicable
Guarantee Agreement, and yield interest at the rate applicable thereto.
Each Financed Student Loan is guaranteed by an eligible guarantor under the
Higher Education Act and qualifies the holder thereof to receive Interest
Subsidy Payments (other than unsubsidized SLS Loans, unsubsidized Xxxxxxxx
Loans, 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 applicable Guarantor and
qualifies the applicable Guarantor to receive reinsurance payments thereon
from the Department. No Financed Student Loan that is a Consolidation Loan
was originated less than 180 days prior to the Cutoff Date or the
applicable Subsequent 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 any
Additional Student Loan conveyed to the Issuer after the Closing Date,
information for each category set forth in Schedule A has been provided
with respect to such loan and such information is true and correct in all
material respects, as of the date of the opening of business on the
applicable Subsequent Cutoff Date. No selection procedures believed to be
adverse to the Noteholders or the Certificateholders were utilized in
selecting any Financed Student Loan. The computer tape regarding the
Initial Financed Student Loans made available to the Issuer and its assigns
is true and correct in all material respects as of the Cutoff Date and,
after the Closing Date, any computer tape regarding any Additional Student
Loan made available to the Issuer and its assigns is true and correct in
all
C-1
material respects as of the applicable Subsequent Cutoff Date.
3. Compliance with Law. Each Financed Student Loan complied at the
-------------------
time of origination and at the time of the execution of this Agreement or
the applicable Transfer Agreement or Assignment, as the case may be, in all
material respects with all applicable requirements of local, state, and
federal laws, rules and regulations which govern the making of such
Financed Student Loan including the requirements of the applicable
Guarantee Agreement.
4. Binding Obligation. The terms and conditions of each Financed
------------------
Student Loan are consistent with the application of the Borrower, all
signatures for the Financed Student Loans are genuine and the Borrower Note
evidencing each Financed Student Loan has been duly executed and delivered
and constitutes the legal, valid, and binding obligation of the Borrower
enforceable in accordance with its terms.
5. No Defenses. No right of rescission, setoff, counterclaim, or
-----------
defense has been asserted or threatened or exists with respect to any
Financed Student Loan.
6. No Default. No Financed Student Loan has a payment that is more
----------
than 180 days overdue as of the Cutoff Date or more than 120 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 180 days or 120 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; and the Seller has not waived and shall
not waive any of the foregoing other than as permitted by the Basic
Documents.
7. Title. It is the intention of the Seller that the transfer and
-----
assignment herein contemplated constitute a sale of the Financed Student
Loans from the Seller to the Eligible Lender Trustee on behalf of the
Issuer and that the beneficial interest in and title to such Financed
Student Loans not be part of the estate of the Seller in the event of the
appointment of a receiver with respect to the Seller. Immediately prior to
the transfer and sale of each Financed Student Loan to the Trust, each
Borrower Note is owned by the Seller and the Seller has good title to each
Financed Student Loan, free and clear of any lien, charge, encumbrance, or
other interest therein and immediately upon the transfer and sale of such
Financed Student Loan to the Trust, the Eligible Lender Trustee on behalf
of the Issuer
C-2
will have good title to such Financed Student Loan free and clear of any
lien, charge, encumbrance, or other interest therein except as contemplated
by the Basic Documents. The Seller's computer files relating to the
Financed Student Loans have been marked to indicate that such Financed
Student Loans have been sold to the Trust.
8. All Filings Made. All filings (including UCC filings) necessary
----------------
in any jurisdiction to give the Eligible Lender Trustee on behalf of the
Issuer a first perfected ownership interest in the Financed Student Loans,
and to give the Indenture Trustee a first perfected security interest
therein, have been made.
9. No Bankruptcies. No Borrower of any Financed Student Loan as of
---------------
the Cutoff Date or the applicable Subsequent Cutoff Date (in the case of
Additional Student Loans) was noted in the related Student Loan File as
being currently involved in a bankruptcy proceeding.
10. Lawful Assignment. No Financed Student Loan has been originated
-----------------
in, or is subject to the laws of, any jurisdiction under which the
origination, sale, transfer and assignment of such Financed Student Loan or
any Financed Student Loan under this Agreement, each Transfer Agreement or
the Indenture is unlawful, void or voidable.
11. One Original. There is only one original executed copy of the
------------
promissory note evidencing each Financed Student Loan.
12. Accounts. Each Financed Student Loan may be pledged or
--------
transferred as an "account" as defined in the UCC.
C-3
EXHIBIT D
TO THE LOAN SALE AGREEMENT
1. Organization and Good Standing. The Seller has been organized
------------------------------
and is existing as a banking corporation in good standing under the laws of
the Commonwealth of Virginia and is authorized to do business in every
state in which it is doing business as well as the state in which it is
organized and incorporated.
2. Power and Authority of the Seller. The Seller has the corporate
---------------------------------
power and authority to execute and deliver this Agreement and to carry out
its terms; the Seller has full corporate power and authority to sell and
assign the property to be sold and assigned to and deposited with the
Issuer (or with the Eligible Lender Trustee on behalf of the Issuer) and
the Seller has duly authorized such sale and assignment to the Issuer (or
to the Eligible Lender Trustee on behalf of the Issuer) by all necessary
corporate action; and the execution, delivery and performance of this
Agreement have been duly authorized by the Seller by all necessary
corporate action.
3. Binding Obligation. This Agreement has been executed and
------------------
delivered by the Seller and, assuming authorization, execution, and
delivery by the other parties thereto, this Agreement constitutes a valid
obligation of the Seller enforceable against it in accordance with the
express terms of this Agreement, except as enforcement thereof may be
limited by the bankruptcy, insolvency, reorganization, moratorium,
liquidation, readjustment of debt, or other federal or state laws or
equitable principles relating to or affecting the enforcement of creditor's
rights or the rights of creditors of banks the deposit accounts of which
are subject to the FDIC.
4. No Violation. The consummation of the transactions contemplated
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by this Agreement or the Administration Agreement and the fulfillment of
the terms hereof or thereof do not conflict with, result in any breach of
any of the terms and provisions of, nor constitute (with or without notice
or lapse of time or both) a default under, the articles of incorporation or
by-laws of the Seller, or any material indenture, agreement or other
instrument to which the Seller is a party or by which it shall be bound;
nor result in the creation or imposition of any Lien upon any of its
properties pursuant to the terms of any such indenture, agreement or other
instrument (other than pursuant to the Basic Documents); nor violate any
law or, to the knowledge of the Seller, any order, rule or regulation
applicable to the Seller of any court or of any Federal or state regulatory
body, administrative agency or other governmental instrumentality having
jurisdiction over the
D-1
Seller or its properties. The consummation of the transactions
contemplated by this Agreement or by the Administration Agreement and the
fulfillment of the terms hereof and thereof will not result in the loss of
any Guarantee Payments by the Trust or any reinsurance payments with
respect to any Financed Student Loans by the applicable Guarantor.
5. No Proceedings. There is no action, suit, claim, investigation,
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or proceeding, in any such case whether pending or to the knowledge of the
Seller, threatened against the Seller before any court, governmental
agency, or arbitrator (i) asserting the invalidity of this Agreement, the
Indenture or any of the other Basic Documents, the Notes or the
Certificates, (ii) seeking to prevent the issuance of the Notes or the
Certificates or the consummation of any transactions contemplated by this
Agreement, the Indenture or any of the other Basic Documents, (iii) seeking
any determination or ruling that could reasonably be expected to have a
material and adverse effect on the performance by the Seller of its
obligations under, or the validity or enforceability of, this Agreement,
the Indenture, any of the other Basic Documents, the Notes or the
Certificates or (iv) seeking to affect adversely the Federal or state
income tax attributes of the Issuer, the Notes or the Certificates.
6. All Consents. No action, including, without limitation, the
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granting or issuing of any consent, permit, license, approval, or
authorization which is required to be made on or prior to the date of this
Agreement in connection with the sale of Financed Student Loans under this
Agreement (with the possible exception of routine filings which, if not
made, will not render the Seller liable to any material penalties or will
not result in the transactions contemplated by this Agreement being subject
to challenge) is required.
D-2
