EXHIBIT 99.1
[FORM OF]
TRANSFER AGREEMENT
among
EFG STUDENT LOAN TRUST 1999-[ ]
as Issuer,
EFG FUNDING CORPORATION
as Transferor,
and
[ELIGIBLE LENDER TRUSTEE],
as trustee for the Transferor and the Issuer
not in its individual capacity but solely
as Eligible Lender Trustee
Dated as of _________ __, 1999
TRANSFER AGREEMENT dated as of ______ __, 1999, is by and
between EFG STUDENT LOAN TRUST 1999-[ ], a Delaware trust (the "Issuer") and EFG
FUNDING CORPORATION, as transferor (the "Transferor" or "EFG Funding") and is
acknowledged and accepted by [ELIGIBLE LENDER TRUSTEE], [a national banking
association,] solely as eligible lender trustee for EFG Funding and the Issuer
and not in its individual capacity (the "Eligible Lender Trustee") and
[Indenture Trustee] not in its individual capacity but solely as Indenture
Trustee.
WHEREAS the Issuer desires to purchase from the Transferor a
portfolio of guaranteed and federally reinsured student loans originated under
the Higher Education Act of 1965, as amended and privately originated and
guaranteed student loans purchased in the ordinary course of business by the
Transferor from Educational Finance Group, Inc., a Delaware corporation ("EFG")
pursuant to a Loan Sale Agreement dated as of [________] by and among
EFG, as seller (the "Seller"), [EFG TRUSTEE], as the eligible lender trustee on
behalf of EFG, EFG Funding as purchaser (the "Purchaser") and the Eligible
Lender Trustee on behalf of EFG Funding and the Issuer;
WHEREAS the Transferor is willing to sell all beneficial
interest in such FFELP Loans to the Issuer and all legal and beneficial
interest in such Private Loans to the Issuer;
WHEREAS the Eligible Lender Trustee is willing to hold legal
title to, and serve as eligible lender trustee with respect to, such FFELP
Loans on behalf of the Issuer.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants herein contained, the parties hereto agree as follows:
ARTICLE I.
Definitions and Usage
Capitalized terms used but not defined herein are defined in
Appendix A to the Administration Agreement, dated as of [_____ _, 1999], among
the Issuer, EFG, as Administrator, and [ ], as Indenture Trustee, which also
contains rules as to usage and construction that shall be applicable herein.
ARTICLE II.
Conveyance of Student Loans
SECTION 2.1. Conveyance of Initial Student Loans. (a) In
consideration of the Issuer's delivery to or upon the order of the Transferor
on the Closing Date of the net proceeds from the sale of the Notes and the
other amounts to be distributed from time to time to the Transferor in
accordance with the terms of this Agreement, the Transferor 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 (i) all right, title and
interest in and to all beneficial interest in
the Initial Student Loans that are FFELP Student Loans and all right, title and
interest in and to the Initial Student Loans that are Private Student Loans,
and all obligations of the Obligors thereunder, together with all documents,
the related Student Loan Files and all rights and privileges relating thereto,
(ii) all rights and remedies of EFG Funding as purchaser under the Loan Sale
Agreement against the Seller and the EFG Trustee with respect to the Initial
Student Loans, (iii) all payments on or collections received thereunder on and
after the Cutoff Date; (iv) 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 in all investments and proceeds thereof (including
all income thereon); and (v) all proceeds of any and all of the foregoing.
(b) In connection with the sale and assignment
of Student Loans to the Issuer on the Closing Date, the Transferor shall
deposit the Reserve Account Initial Deposit into the Reserve Account.
(c) On the Closing Date, the Transferor will
deposit, or cause to be deposited, into the Collection Account all amounts or
collections received under the Initial Student Loans on and after the Cutoff
Date.
{SECTION 2.2. Conveyance of New Loans and Serial Loans to the
Eligible Lender Trustee on Behalf of the Trust. (a) Subject to the conditions
set forth in paragraph (d) below, in consideration of the Issuer's delivery on
the related Transfer Date to or upon the order of the Transferor of the Loan
Purchase Amount for each such New Loan or Serial Loan to be delivered to the
Transferor, the Transferor does hereby sell, transfer, assign, set over and
otherwise convey to the Issuer (i) all right, title and interest of all of the
beneficial interest of the Transferor in and to each New Loan and Serial Loan
and all obligations of the Obligors thereunder, together with all documents,
the related Student Loan Files and all rights and privileges relating thereto,
(ii) all rights and remedies of EFG Funding as purchaser under the Loan Sale
Agreement against the Seller and the EFG Trustee with respect to each such New
Loan and Serial Loan, (iii) all payments on or collections received thereunder
on and after the related Subsequent Cutoff Date and (iv) all proceeds of any
and all of the foregoing.
(b) During the Revolving Period, upon the
tender of New Loans or Serial Loans by the Transferor on the related Transfer
Date and the satisfaction of the conditions set forth in subsection (c) of this
Section 2.2, the Transferor will so inform the Administrator and the Indenture
Trustee, and the Loan Purchase Amounts for such New Loans or Serial Loans will
be withdrawn from the Collateral Reinvestment Account, subject to the
provisions of Section 2(f) of the Administration Agreement, and will be
remitted to or upon the order of the Transferor. The Transferor covenants to
transfer, or cause to be transferred, during the Revolving Period to the
Eligible Lender Trustee on behalf of the Issuer pursuant to paragraph (a) above
New Loans or Serial Loans with an aggregate principal balance substantially
equal to the amount on deposit in the Collateral Reinvestment Account;
provided, however, that the Transferor shall have no liability for a breach of
the foregoing covenant as a result of the Transferor not having originated or
acquired, or having caused to be originated or acquired, during the Revolving
Period New Loans or Serial Loans equal to the amount specified above. Such
transfers shall be made at such times during the Revolving Period as the
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Transferor may determine in its discretion, subject to the requirement that the
Transferor shall make such transfers to the extent New Loans and Serial Loans
are available to the Transferor under the Loan Sale Agreement at least as
frequently as is necessary to avoid the occurrence of an Early Amortization
Event.
(c) After the Revolving Period, upon the tender
of Serial Loans by the Transferor on the related Transfer Date and the
satisfaction of the conditions set forth in subsection (c) of this Section 2.2,
the Trustee will so inform the Administrator and the Indenture Trustee, and
that component of the Loan Purchase Amount for such Serial Loans represented by
the Purchase Collateral Balance thereof 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 Transferor or, alternatively, at the sole discretion of the
Transferor, the Transferor may determine that the Purchase Collateral Balance
due on the related Transfer Date for any Serial Loans then to be transferred
shall be paid by the Issuer's exchanging with the Transferor one or more
Exchanged Student Loans held by the Issuer for such Serial Loans (with, in any
event, the component of the Loan Purchase Amount represented by the Purchase
Premium Amounts being payable on a deferred basis pursuant to the final
sentence of this paragraph). In the event Exchanged Student Loans are to be so
used (i) the decision by the Issuer as to which of those Student Loans then
held by the Issuer that meet the criteria for Exchanged Student Loans are to be
selected for such exchange shall be subject to the sole discretion of the
Trustee, provided that the Trustee shall not select for such purpose any
Student Loan that has the same Borrower as any other Student Loan unless all of
the Student Loans of such Borrower are to be exchanged, (ii) with respect to
any Serial Loan to be delivered on a Transfer Date, only a Student Loan that is
an Exchanged Student Loan with respect to such Serial Loan shall be counted
toward the Purchase Collateral Balance for such Serial Loan and (iii) in the
event that, with respect to any Purchase Collateral Balance due on the related
Transfer Date, the aggregate principal amount (plus accrued borrower interest
thereon if and to the extent that such interest is not then payable and will,
pursuant to the term of such loan, be capitalized and added to the principal
balance of such loan), as of the related Subsequent Cutoff Date, of the
Exchanged Student Loan or Loans being remitted on such Transfer Date in
satisfaction of such Purchase Collateral Balance is less than such amount due,
the Issuer shall remit funds to cover such difference from amounts on deposit
in the Collection Account as provided in Section 2(d) of the Administration
Agreement. Any Purchase Premium Amounts for Serial Loans conveyed to the Issuer
after the Revolving Period will be payable on Quarterly Payment Dates out of
Reserve Account Excess pursuant to Section 2(e) of the Administration Agreement
and such Purchase Premium Amounts will accrue no interest or yield but will be
paid on each Quarterly Payment Date to the extent such excess is available in
the aggregate amount of such premiums incurred but unpaid up to the end of the
related Collection Period.
(d) The Transferor shall transfer, or cause to
be transferred, to the Issuer the New Loans and Serial Loans for a given
Transfer Date and the other property and rights related thereto described in
paragraph (a) above only upon the satisfaction of each of the following
conditions on or prior to such Transfer Date:
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(i) the Transferor shall have delivered to the
Trustee and the Indenture Trustee a duly executed written assignment
(including an acceptance by the Trustee, the Eligible Lender Trustee
(in the case of FFELP Student Loans) and the Indenture Trustee) in
substantially the form of Exhibit B hereto (each, a "Subsequent
Transfer Agreement"), which shall include supplements to Schedule A
hereto, listing such New Loans and Serial Loans;
(ii) the Transferor shall have delivered, at least
two days prior to such Transfer Date, notice of such transfer to the
Trustee, the Eligible Lender Trustee, the Indenture Trustee and the
Rating Agencies, including a listing of the designation and the
aggregate principal balance of such New Loans and Serial Loans;
(iii) the Transferor shall have deposited in the
Collection Account all amounts on or collections received in respect
of the New Loans and Serial Loans on and after each applicable
Subsequent Cutoff Date;
(iv) as of the Transfer Date, the Transferor 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 or the
Noteholders;
(vi) the Transferor shall have delivered to the
Trustee, the Indenture Trustee and the Eligible Lender Trustee an
Officers' Certificate confirming the satisfaction of each condition
precedent specified in this paragraph (d);
(vii) the Transferor shall have delivered to the
Issuer and the Indenture Trustee the Opinion of Counsel as required by
Section 6.2(e)(1) hereof; provided that, notwithstanding the
foregoing, no opinion shall be required if the Revolving Period has
terminated,
(viii) with respect to any New Loan which is
guaranteed by an Additional Guarantor that is a Federal Guarantor,
such Additional Guarantor shall have entered into a Guarantee
Agreement with the Eligible Lender Trustee which guarantees such New
Loan in substantially the form of the Guarantee Agreements between the
Initial Guarantors that are Federal Guarantors and the Eligible Lender
Trustee;
(ix) the Transferor 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;
(x) no selection procedures believed by the
Transferor to be adverse to the interests of the Noteholders shall
have been utilized in selecting the New Loans or the Serial Loans;
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(xi) no Event of Default shall have occurred under
the Indenture, no Servicer Default shall have occurred under the
Servicing Agreement and no Administrator Default shall have occurred
under the Administration Agreement; and
(xii) for each Transfer Date occurring after the
Revolving Period, after giving effect to the conveyance of Serial
Loans on such Transfer Date, the amount of funds remitted for the
purchase of Serial Loans on such Transfer Date, and on each Transfer
Date since the preceding Quarterly Payment Date, shall not exceed the
Net Principal Cash Flow Amount for such Transfer Date minus the sum of
(i) all amounts paid to prepay any Add-on Consolidation Loan not held
by the Issuer since the last Quarterly Payment Date pursuant to
Section 2(d)(iii)(A) of the Administration Agreement and (ii) all
amounts which the Administrator reasonably estimates will be required
to prepay Add-on Consolidation Loans pursuant to Section 2(d)(iii)(A)
of the Administration Agreement during the remainder of the Collection
Period.
provided, however, that the Transferor shall not incur any
liability as a result of transferring Serial 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 Transferor, after
reasonable inquiry of counsel to the Transferor, were not aware of any fact
that would reasonably suggest that such condition would not be satisfied as of
such date.}
SECTION 2.3. Treatment as a Security Agreement. The parties
intend that the conveyance of the Transferor's (right, title and interest in
and to the beneficial interest in the Initial Student Loans that are FFELP
Student Loans and the legal and beneficial interest in the Initial Student
Loans that are Private Student Loans pursuant to this Agreement {and any New
Loans and Serial Loans pursuant to a related Subsequent Transfer Agreement}
shall constitute a valid purchase and sale and not a loan. If such conveyance
is deemed to be a loan and not a sale, then the parties also intend and agree
that the Transferor 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
Transferor's right, title and interest in, to and under the Initial Student
Loans {and any New Loans or Serial Loans} and the other items specified in
Sections 2.1 {and 2.2,} and that this Agreement (with respect to the Initial
Student Loans) {and any applicable Subsequent Transfer Agreement (with respect
to the New Loans or Serial 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 2.1 {and 2.2 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 acknowledgment from the Transferor. The
Transferor 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.
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SECTION 2.4. Endorsement. The Transferor hereby appoints each
of the Issuer and the Indenture Trustee as the Transferor's true and lawful
attorney-in-fact with full power of substitution to endorse the Transferor's
name on any promissory note evidencing the Initial Student Loans {and any New
Loans or Serial Loans} transferred to the Issuer pursuant to Sections 2.1 {and
2.2.} The Transferor 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 Student Loans
SECTION 3.1. Representations and Warranties of Transferor
with Respect to the Student Loans. The Transferor makes no representations and
warranties with respect to the Student Loans. The Transferor hereby transfers
and assigns each of the representations and warranties made by the Seller
pursuant to Section 3.1 of the Loan Sale Agreement with respect to the Student
Loans and each of the remedies provided to the Purchaser under section 3.2 of
the Loan Sale Agreement.
SECTION 3.2. Substitution. The Transferor shall have the
right but not the obligation to substitute a Qualified Student Loan for any
Student Loan. With respect to each Qualified Substitute Student Loan, the
Transferor shall deliver to the Eligible Lender Trustee (in the case of FFELP
Student Loans) and the Trustee (in the case of Private Student Loans) for the
benefit of the Noteholders such documents and agreements together with a duly
executed Assignment in the form of Exhibit F hereto. No substitution is
permitted to be made during the period beginning on the day after each
Determination Date and ending on the last day of the calendar month of such
Determination Date. Payments due with respect to Qualified Substitute Student
Loans shall be part of the Trust Estate on and after the date of such
Assignment. Upon such substitution, the Qualified Substitute Student Loan or
Loans shall be subject to the terms of this Agreement in all respects, and the
Transferor shall be deemed to have made with respect to such Qualified
Substitute Student Loan or Loans, as of the date of substitution, the
representations and warranties made pursuant to Section 3.1 with respect to any
such Student Loan. In addition, any such substitution shall occur only upon
satisfaction of each of the following conditions on or prior to the date of the
related Assignment:
(i) the Transferor shall have deposited in the
Collection Account all collections in respect of the Qualified
Substitute Student Loans on and after each applicable date of
Assignment;
(ii) as of the date of the related Assignment, the
Transferor shall not have been insolvent nor will it have been made
insolvent by such transfer nor is it aware of any pending insolvency;
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(iii) such addition will not result in a material
adverse Federal or State tax consequence to the Issuer or the
Noteholders;
(iv) the Transferor shall have delivered to the
Trustee, the Eligible Lender Trustee and the Indenture Trustee, the
Opinion of Counsel required by Section 6.2(e)(1) hereof; provided that
no opinion shall be required under this subsection (iv) unless the
Transferor, the Issuer 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 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 Transferor, Issuer and the Indenture Trustee makes such
determination shall notify the others and the Rating Agencies; and
provided, further, that none of the Issuer or the Indenture Trustee
shall have any obligation to monitor changes in laws or regulations or
the rulings of courts or other governmental agencies for the purpose
of making any determination described in this clause (iv);
(v) the Transferor shall have taken any action
required to maintain the first perfected ownership interest of the
Issuer in the Trust Estate and the first perfected security interest
of the Indenture Trustee in the Collateral;
(vi) no selection procedures believed by the
Transferor to be adverse to the interests of the Noteholders shall
have been utilized in selecting the Qualified Substitute Student
Loans; and
(vii) no Event of Default shall have occurred under
the Indenture, no Servicer Default shall have occurred under the
Servicing Agreement and no Administrator Default shall have occurred
under the Administration Agreement.
Upon any such substitution and the deposit to the Collection
Account of the amount required to be deposited therein in connection with such
substitution as described in the following paragraph, the Issuer shall release
any documentation held with respect to the Financed Student Loan being
substituted for (the "Deleted Student Loan") to the Transferor and shall
execute and deliver at the Transferor's direction such instruments of transfer
or assignment prepared by the Transferor, in each case without recourse, as
shall be necessary to vest in the Transferor's interest in any Deleted Student
Loan substituted for pursuant to this Section 3.2.
For any month in which the Transferor substitutes one or more
Qualified Substitute Student Loans for one or more Deleted Student Loans, the
Servicer will determine the amount (if any) by which as of the date of the
relevant Assignment the aggregate principal balance of all such Qualified
Substitute Student Loans is less than the aggregate principal balance of all
such Deleted Student Loans. The amount of such shortage (the "Substitution
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Adjustment Amount") shall be deposited in the Collection Account by the
Transferor on or before the date of the relevant Assignment.
SECTION 3.3. Repurchase Deposits. The Transferor shall
deposit or cause to be deposited in the Collection Account the aggregate
Purchase Amount with respect to Purchased Student Loans and all other amounts
to be paid by the Transferor under Section 3.3 and Section 5.1 when such
amounts are due.
SECTION 3.4. Optional Purchase by Transferor. [From time to
time the Transferor, or an assignee of the Transferor, may at its option
purchase from the Trust, as of the end of any Monthly Collection Period
immediately preceding a Monthly Payment Date, one or more Student Loans that
are to be refinanced by Federal Consolidation Loans. Such Student Loans shall
be purchased at a price equal to the aggregate Purchase Amounts thereof as of
the end of such Monthly Collection Period. The purchase price of the Student
Loans may be paid in cash or by delivery of a promissory note of the Transferor
secured by and payable solely from the Student Loans, including the amounts
received upon prepayment of the Student Loans with proceeds of the Federal
Consolidation Loans. If such amounts, together with other funds of the
Transferor, are not sufficient to retire the Transferor's note within three (3)
Business Days of release of the Student Loans, the Student Loans shall be
redeposited in the Trust and the note cancelled. Any such promissory note shall
bear interest at a rate that is equal to the yield on the Student Loans
purchased by the Transferor.]
ARTICLE IV.
The Transferor
SECTION 4.1. Representations of Transferor. The Transferor
makes each of the representations and warranties as set forth in Exhibit D
hereto. Such representations speak as of the execution and delivery of this
Agreement and as of the Closing Date in the case of the Initial Student Loans,
{as of the applicable Transfer Date in the case of the New Loans and the Serial
Loans,} as of the date of the relevant Assignment in the case of any Qualified
Substitute Student Loan, and, in the case of the Transferor, {as of the date of
origination in the case of any Consolidation Loan added to the Issuer during
the Revolving Period and as of the applicable Add-on Consolidation Loan Funding
Date, in the case of a Consolidation Loan the principal balance of which is
increased by the principal balance of any related Add-on Consolidation Loan,}
but shall survive the sale, transfer and assignment of the Student Loans to the
Eligible Lender Trustee and/or the Trustee on behalf of the Issuer {(and both
the origination of such Consolidation Loans and the addition of the principal
balance of any Add-on Consolidation Loan)} and the pledge thereof to the
Indenture Trustee pursuant to the Indenture.
SECTION 4.2. Existence. During the term of this Agreement,
the Transferor will keep in full force and effect its existence, rights and
franchises as a 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
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necessary to protect the validity and enforceability of this Agreement, the
other Basic Documents and each other instrument or agreement necessary or
appropriate to the proper administration of this Agreement and the transactions
contemplated hereby. In addition, all transactions between the Transferor and
its Affiliates will be conducted on an arm's-length basis. For so long, during
the term of this Agreement, as the Transferor shall not be an eligible lender
under the Higher Education Act with respect to federal Student Loans, the
Transferor agrees to keep in full force and effect an agreement with the
Eligible Lender Trustee or another eligible lender under the Higher Education
Act providing for such eligible lender meeting the requirements set forth in
the following sentence to hold title to the Transferor's Student Loans in trust
for and on behalf of the Transferor. The Transferor shall not convey any New
Loan, Serial Loan or Qualified Substitute Student Loan if the eligible lender
holding legal title to such loan is other than the Eligible Lender Trustee
unless, prior to such conveyance, such other eligible lender shall agree in
writing to be bound, in the conveyance of each such loan for which it acts as
eligible lender, by the provisions of this Agreement that are applicable to the
Eligible Lender Trustee, to the same extent as if it were named separately as
the Eligible Lender Trustee in each of such provisions.
SECTION 4.3. Liability of Transferor; Indemnities. The
Transferor shall be liable in accordance herewith only to the extent of the
obligations specifically undertaken by the Transferor under this Agreement.
(a) The Transferor shall indemnify, defend and hold
harmless the Issuer, the Trustee, 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 Trustee, 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 Notes, or asserted with respect to ownership of
the Student Loans or Federal or other income taxes arising out of
payments on the Notes) and costs and expenses in defending against the
same.
(b) The Transferor shall indemnify, defend and hold
harmless the Issuer, the Trustee, the Eligible Lender Trustee, the
Indenture Trustee and the Noteholders and the officers, directors,
employees and agents of the Issuer, the Trustee, 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 Transferor'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 Transferor's
or the Issuer's violation of Federal or state securities laws in
connection with the offering and sale of the Notes.
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(c) The Transferor shall be liable as primary
obligor for, and shall indemnify, defend and hold harmless the Trustee
and the Eligible Lender Trustee and either party's officers,
directors, employees and agents from and against, all costs, expenses,
losses, claims, damages, obligations and liabilities arising out of,
incurred in connection with or relating to the Trust Agreement, the
other Basic Documents, the Trust Estate, the acceptance or performance
of the trusts and duties set forth herein and in the Trust Agreement
or the action or the inaction of the Trustee or the Eligible Lender
Trustee hereunder and under the Trust Agreement or the Eligible Lender
Trust Agreement, as the case may be, 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 Trustee or the Eligible Lender Trustee,
(ii) shall arise from any breach by the Trustee or the Eligible Lender
Trustee of its covenants under any of the Basic Documents; or (iii)
shall arise from the breach by the Trustee or the Eligible Lender
Trustee of any of its representations or warranties set forth in
Section 7.3 of the Trust Agreement. In the event of any claim, action
or proceeding for which indemnity will be sought pursuant to this
paragraph, the Trustee's or the Eligible Lender Trustee's choice of
legal counsel shall be subject to the approval of the Transferor,
which approval shall not be unreasonably withheld.
(d) The Transferor 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 Transferor's
responsibilities pursuant to the parentheticals in paragraph (a)
above).
Indemnification under this Section shall survive the
resignation or removal of the Trustee or the Eligible Lender Trustee or the
Indenture Trustee and the termination of this Agreement, the Eligible Lender
Trust Agreement, the Indenture or the Trust Agreement, as applicable, and shall
include reasonable fees and expenses of counsel and expenses of litigation. If
the Transferor 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 Transferor, without interest.
SECTION 4.4. Merger or Consolidation of, or Assumption of the
Obligations of the Transferor. Any person (a) into which the Transferor may be
merged or consolidated, (b) which may result from any merger or consolidation
to which the Transferor shall be a party or (c) which may succeed to the
properties and assets of the Transferor substantially as a whole, shall be the
successor to the Transferor without the execution or filing of any document or
any further act by any of the parties to this Agreement; provided, however,
that the Transferor hereby covenants that it will not consummate any of the
foregoing transactions except upon satisfaction of the following: (i) the
surviving Transferor, executes an agreement of assumption to perform every
obligation of the Transferor under this Agreement, (ii) immediately after
giving effect to such transaction, no representation or warranty made pursuant
to Section 3.1 or 4.1 shall have been breached and no Servicer Default, Event
of Default or Administrator Default and no event that, after notice or lapse of
time, or both, would become a Servicer Default, Event of Default or
Administrative Default
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shall have occurred and be continuing, (iii) the Transferor shall have
delivered to the Trustee, the Eligible Lender Trustee and the Indenture Trustee
an Officers' Certificate and an Opinion of Counsel each stating that such
consolidation, merger or succession and such agreement of assumption comply
with this Section and that all conditions precedent, if any, provided for in
this Agreement relating to such transaction have been complied with, and that
the Rating Agency Condition shall have been satisfied with respect to such
transaction, (iv) such transaction will not result in a material adverse
Federal or state tax consequence to the Issuer or the Noteholders and (v)
unless EFG Funding is the surviving entity, the Transferor shall have delivered
to the Trustee, 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 Issuer and Indenture Trustee, respectively, in the 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 4.5. Limitation on Liabilities of Transferor,
Trustee, Eligible Lender Trustee and Others. The Transferor, the Trustee, the
Eligible Lender Trustee and any director or officer or employee or agent of the
Transferor, the Trustee or the Eligible Lender Trustee 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.
None of the Transferor, the Trustee or the Eligible Lender Trustee shall be
under any obligation to appear in, prosecute or defend any legal action that
shall not be incidental to its respective obligations under this Agreement, and
that in its opinion may involve it in any expense or liability.
SECTION 4.6. Transferor, Trustee and Eligible Lender Trustee
may Own Notes. The Transferor, the Trustee, the Eligible Lender Trustee and any
Affiliate of any of them may in its individual or any other capacity become the
owner or pledgee of Notes with the same rights as it would have if it were not
the Transferor, the Trustee or the Eligible Lender Trustee as the case may be
or an Affiliate of any of them, except as expressly provided herein or in any
other Basic Document.
ARTICLE V.
Termination
SECTION 5.1. Termination. (a) Optional Purchase of All
Financed Student Loans. As of the last day of any Collection Period immediately
preceding a Quarterly Payment Date as of which the then outstanding Pool
Balance is [5%] or less of the initial aggregate principal balance of the
Notes, the Transferor or its designee shall have the option to purchase the
Trust Estate, other than the Trust Accounts. To exercise such option, the
Transferor or its designee shall deposit in the Collection Account an amount
equal to the aggregate Purchase Amount for the Student Loans and the related
rights with respect thereto, plus the appraised value of any such other
property held by the Issuer other than the Trust
11
Accounts, such value to be determined by an appraiser mutually agreed upon by
the Servicer, the Trustee and the Indenture Trustee, and shall succeed to all
interests in and to the Trust; provided, however, that the Transferor or its
designee may not effect such purchase if the aggregate Purchase Amount to be so
deposited in the Collection Account does not equal or exceed an amount equal to
the unpaid principal balance of the Notes, plus accrued and unpaid interest
thereon at the applicable Note Rate to the date of exercise, and the amount of
unpaid Senior Noteholders' Interest T-Xxxx Carryover and Subordinate
Noteholders' Interest T-Xxxx Carryover.
ARTICLE VI.
Miscellaneous
SECTION 6.1. Amendment. This Agreement may be amended by the
Transferor, the Issuer and the Eligible Lender Trustee, with the consent of the
Indenture Trustee, but without the consent of any of the Noteholders, to cure
any ambiguity, to correct or supplement any provisions in this Agreement or for
the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions in this Agreement or of modifying in any
manner the rights of the Noteholders; provided, however, that such action shall
not, as evidenced by an Opinion of Counsel delivered to the Trustee, the
Eligible Lender Trustee and the Indenture Trustee, adversely affect in any
material respect the interests of any Noteholder.
This Agreement may also be amended from time to time by the
Transferor, the Trustee and the Eligible Lender Trustee, with the consent of
the Indenture Trustee and the Noteholders of Notes evidencing not less than a
majority of the Outstanding Amount of the Notes, for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Agreement or of modifying in any manner the rights of the Noteholders;
provided, however, that no such amendment shall (a) increase or reduce in any
manner the amount of, or accelerate or delay the timing of, collections of
payments with respect to Financed Student Loans or distributions that shall be
required to be made for the benefit of the Noteholders or (b) reduce the
aforesaid percentage of the Outstanding Amount of the Notes, the Noteholders of
which are required to consent to any such amendment, without the consent of all
outstanding Noteholders.
Promptly after the execution of any such amendment or consent
(or, in the case of the Rating Agencies, five Business Days prior thereto), the
Trustee shall furnish written notification of the substance of such amendment
or consent to the Transferor, the Administrator, each Noteholder, the Indenture
Trustee, the Servicer and each of the Rating Agencies.
It shall not be necessary for the consent of Noteholders
pursuant to this Section to approve the particular form of any proposed
amendment or consent, but it shall be sufficient if such consent shall approve
the substance thereof.
12
Prior to the execution of any amendment to this Agreement,
the Trustee, 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 6.2(e). The Trustee, the Eligible
Lender Trustee and the Indenture Trustee may, but shall not be obligated to,
enter into any such amendment which affects the Trustee's, the Eligible Lender
Trustee's or the Indenture Trustee's, as applicable, own rights, duties or
immunities under this Agreement or otherwise.
SECTION 6.2. Protection of Interests in Trust. (a) Each of
the Transferor and the Issuer 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 Indenture Trustee in the
Financed Student Loans and in the proceeds thereof. Each of the Transferor and
the Issuer shall deliver (or cause to be delivered) to 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) None of the Transferor, the Trustee or
Eligible Lender Trustee shall change its name, identity or corporate structure
in any manner that would, could, or might make any financing statement or
continuation statement filed in accordance with paragraph (a) above seriously
misleading within the meaning of ss.9-402(7) of the UCC, unless it shall have
given the Issuer and the Indenture Trustee at least five (5) days' prior
written notice thereof and shall have promptly filed appropriate amendments to
all previously filed financing statements or continuation statements.
(c) Each of the Transferor and Issuer shall
have an obligation to give the Eligible Lender Trustee, the Indenture Trustee
and the Rating Agencies at least sixty (60) days prior written notice of any
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 Transferor 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
Transferor 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 Student
Loan, shall indicate clearly that such Student Loan has been sold and is owned
by the Issuer and has been pledged to the Indenture Trustee.
(e) The Transferor shall, to the extent
required by applicable law, cause the Notes to be registered with the
Commission pursuant to Section 12(b) or Section 12(g) of the Exchange Act
within the time periods specified in such sections.
13
(f) The Transferor shall deliver to the Trustee and
the Indenture Trustee:
(1) promptly after the execution and delivery of
this Agreement and of each amendment thereto, on each
Transfer Date as set forth in Section 2.2 and on the date of
each Assignment as set forth in Section 3.2, 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 Trustee and the
Indenture Trustee in the 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 Trustee and the
Indenture Trustee in the 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
3.6(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 6.3. Notices. Unless otherwise agreed by the
recipient, all demands, notices and communications upon or to the Transferor,
the Servicer, the Issuer, the Trustee, the Eligible Lender Trustee, the
Indenture Trustee, the Administrator or the Rating Agencies under this
Agreement shall be in writing, personally delivered or mailed by certified
mail, return receipt requested (or in the form of telex or facsimile notice,
followed by written notice delivered as aforesaid or postage prepaid, first
class mail), and shall be deemed to have been duly given upon receipt;
(a) in the case of the Transferor, to
EFG FUNDING CORPORATION
Attention: President and
Chief Executive Officer
Telephone:
Telecopy:
14
with a copy to
Office of the General Counsel
Attention:
Telephone:
Telecopy:
(b) in the case of the Eligible Lender
Trustee, to
[ ], Bank, as trustee for EFG Funding
Corporation
Attention:
Telephone:
Telecopy:
with a copy to
[ ]
Attention:
Telephone:
Telecopy:
(c) in the case of the Servicer, to
EFG Technologies, Inc.
Attention: President
Telephone:
Telecopy:
with a copy to
Office of the General Counsel
Attention:
Telephone:
Telecopy:
(d) in the case of the Issuer, to
EFG Student Loan Trust ______-____
c/o [ ]
Attention:
Telephone:
15
Telecopy:
with a copy to
the Trustee
at the Corporate Trust Office
of the Trustee
Attention:
Telephone:
Telecopy:
(e) in the case of the Trustee, at the
Corporate Trust Office of the Trustee;
(f) in the case of the Indenture Trustee,
at its Corporate Trust Office;
(g) in the case of the Administrator, to
Educational Finance Group, LLP;
with a copy to
Office of the General Counsel
Attention:
Telephone:
Telecopy:
(h) in the case of S&P
Standard & Poor's Corporation
00 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx
Attention:
Telephone: (212)
Telecopy: (212)
(i) in the case of Fitch, to
Fitch Investors Service, L.P.
Xxx Xxxxx Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Asset Backed Monitoring Unit
Telephone: (000) 000-0000
Telecopy: (000) 000-0000; and
16
(j) in the case of Moody's, to
Xxxxx'x Investors Service, L.P.
00 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: ABS Monitoring Department
Telephone: (000) 000-0000
or, as to each of the foregoing, at such other address as shall be designated
by written notice to the other parties.
SECTION 6.4. Assignment. This Agreement may be
assigned by the Transferor to any affiliate if the conditions in Section 4.4.
that would apply to a successor to the Transferor apply to the assignment to
the affiliate. This Agreement may be assigned by the Trustee only to its
permitted successor pursuant to the Trust Agreement.
SECTION 6.5. Limitations on Rights of Others. The provisions
of this Agreement are solely for the benefit of the Transferor, the Issuer, the
Trustee and the Eligible Lender Trustee and for the benefit of the Indenture
Trustee, the Noteholders and (with respect to Section 5.1 the designee of the
Transferor), 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 6.6. 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 6.7. 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 6.8. 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 6.9. 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.
17
SECTION 6.10. Assignment to Indenture Trustee. The Transferor
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 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, none of the Transferor, the Trustee or the
Eligible Lender Trustee shall, 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 6.12. Limitation of Liability of the Trustee, the
Eligible Lender Trustee and Indenture Trustee. (a) Notwithstanding anything
contained herein to the contrary, this Agreement has been signed by the
Eligible Lender Trustee not in its individual capacity but solely in its
capacity as trustee for the Transferor and the Issuer and in no event shall the
Eligible Lender Trustee in its individual capacity or, except as expressly
provided herein or in the trust agreement between Transferor and the Eligible
Lender Trustee dated [ ], as legal owner of the FFELP Student Loans, have any
liability for representations, warranties, covenants, agreements or other
obligations of the Transferor hereunder or in any of the certificates, notices
or agreements delivered by the Transferor pursuant hereto as to all of which
recourse shall be had solely against the Transferor.
(a)(b) Notwithstanding anything contained herein
to the contrary, this Agreement has been accepted by [ ] not in its individual
capacity but solely as Indenture Trustee and in no event shall [ ] have any
liability for the representations, warranties, covenants, agreements or other
obligations of the Issuer hereunder or in any of the certificates, notices or
agreements delivered pursuant hereto, as to all of which recourse shall be had
solely to the assets of the Issuer.
(c) Notwithstanding anything contained herein
to the contrary, this Agreement has been accepted by [ ] not in its individual
capacity but solely as Indenture Trustee and in no event shall [ ] 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 Transferor, the Trustee and the
Eligible Lender Trustee. Each of the Transferor and the Eligible Lender Trustee
agrees to execute and deliver such instruments and to take such actions as the
Issuer or the Indenture Trustee may
18
reasonably request in order to effectuate the terms and carry out the purposes
of the Agreement.
19
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.
EFG FUNDING CORPORATION
by:
---------------------------------------
Name:
Title: President and Chief
Executive Officer
EFG STUDENT LOAN TRUST ____-_,
by: [ ], not in its
individual capacity but solely as Trustee
by:
----------------------------------------
Name:
Title:
20
Acknowledged and accepted
as of the day and year first
above written:
[INDENTURE TRUSTEE] not in
its individual capacity but
solely as Indenture Trustee,
by:
-------------------------------------
Name:
Title:
[Eligible Lender Trustee] not
in its individual capacity but
solely as Eligible Lender Trustee
by:
-------------------------------------
Name:
Title:
21
EXHIBIT A
TO THE TRANSFER AGREEMENT
XXXX OF SALE
For value received, in accordance with the Transfer Agreement
(the "Transfer Agreement") dated as of ______ __, 1999, between EFG FUNDING
CORPORATION, Inc., as transferor (the "Transferor") and EFG Student Loan Trust
1999-[ ] (the "Issuer") the Transferor does hereby sell, assign, transfer and
otherwise convey unto [______________] as Trustee on behalf of the Issuer,
without recourse all right, title and interest in and to (i) all of its
beneficial interest in the Initial Student Loans that are FFELP Loans and all
of its legal and beneficial interest in the Initial Student Loans that are
Private 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 rights and remedies of the Transferor as purchaser under the
Loan Sale Agreement against the Seller and the EFG Trustee with respect to the
Initial Student Loans, (iii) all payments and/or collections received
thereunder on and after the Cutoff Date, (iv) all funds on deposit from time to
time in the Trust Accounts, including the Reserve Account Initial Deposit, and
in all investments and proceeds thereof (including all income thereon) and (v)
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 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 Trustee or
the Issuer of any obligation of the Seller or the Transferor to the borrowers
of Initial Student Loans or any other Person in connection with the Initial
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
Student Loan that is a Private Loan described in Schedule A to the Transfer
Agreement in favor of the Trustee on behalf of the Trust, without recourse
(subject to the obligations set forth in the Transfer 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 Transfer Agreement and is to be governed by the Transfer
Agreement.
Capitalized terms used but not defined herein shall have the
meaning assigned to them in Appendix A to the Administration Agreement, dated
as of [_____ __, 1999], among EFG Student Loan Trust 1999-[ ], as Issuer,
Educational Finance Group, Inc., as Administrator, and [INDENTURE TRUSTEE], as
Indenture Trustee, which also contains rules as to usage that shall be
applicable herein.
A-1
IN WITNESS WHEREOF, the undersigned has
caused this Xxxx of Sale to be duly executed as of _________ __, 1999.
EFG FUNDING CORPORATION
by:
---------------------------------
Name:
Title:
A-2
EXHIBIT B
TO THE
TRANSFER AGREEMENT
{SUBSEQUENT TRANSFER AGREEMENT}
TRANSFER No. _____ Of [NEW] [SERIAL] LOANS dated as of
______________, _____, among EFG STUDENT LOAN TRUST ____-_, a Delaware trust
(the "Issuer") and EFG FUNDING CORPORATION, as transferor (the "Transferor").
W I T E S S E T H:
WHEREAS the Issuer and the Transferor are parties to the
Transfer Agreement dated as of [______ __, 1999] (as amended or supplemented,
the "Transfer Agreement");
WHEREAS the Transferor, as depositor, and [______________] as
Trustee are parties to the Trust Agreement dated as of [______ __, 1999] (as
amended or supplemented, the "Trust Agreement");
WHEREAS pursuant to the Transfer Agreement, the Transferor
wishes to convey all of its beneficial interest in the [New] [Serial] Loans
referred to in Section 2 (the "Additional Student Loans") to the Issuer;
WHEREAS in order to comply with the requirements of the
Higher Education Act, legal title to the Transferor's student loan portfolio is
vested in [____________] as Eligible Lender Trustee, as trustee on behalf of
the Transferor and the Issuer as beneficiaries; and
WHEREAS, the Issuer is willing to accept such conveyance
subject to the terms and conditions hereof.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Definitions and Usage. Unless otherwise defined herein,
capitalized terms used herein shall have the meanings ascribed to them in
Appendix A to the Administration Agreement, dated as of _______ __, 1999, among
the Issuer, the Educational Finance Group, Inc., as Administrator, and [ ], as
Indenture Trustee, which also contains rules of construction and usage that
shall be applicable herein.
In addition, the following terms have the following meanings:
"Subsequent Cutoff Date" means, with respect to each
Additional Student Loan, the date specified as such on Schedule A hereto.
"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 Transfer Agreement listing the
Additional Student Loans beneficial ownership (in the case of FFELP Loans) and
legal and beneficial ownership (in the case of Private Loans) of which is to be
conveyed on the Transfer Date to the Trustee on behalf of the Issuer pursuant
to this Agreement.
3. Conveyance of Additional Student Loans. In consideration
of Issuer's delivery to or upon the order of the Transferor of $___________
(during the Revolving Period, such amount being the Loan Purchase Amounts of
the Additional Student Loans and such amount to be paid from amounts on deposit
in the Collateral Reinvestment Account subject to the provisions of Section
2.2(b) of the Transfer Agreement and Section 2(f) of the Administration
Agreement and after the Revolving Period such amount being the sum of (i) the
Purchase Collateral Balance ($[ ]) to be paid from any combination of amounts
on deposit in the Collection Account and of Exchange Student Loans as shall be
designated by the Transferor subject to Section 2.2(c) of the Transfer
Agreement and Section 2(d) of the Administration Agreement) and (ii) the
Purchase Premium Amount ($[ ]) to be paid on the immediately subsequent
Quarterly Payment Date from amounts on deposit in the Reserve Fund in excess of
the Specified Reserve Account Balance subject to Section 2.2(c) of the Transfer
Agreement and Section 2(e) of the Administration Agreement, the Transferor does
hereby sell, assign and otherwise convey, without recourse to the Trustee on
behalf of the Issuer:
(a) All right, title and interest in and to
beneficial ownership of the Additional Student Loans that are FFELP
Loans and legal and beneficial ownership of the Additional Student
Loans that are Private 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 rights and remedies of EFG Funding as
purchaser under the Loan Sale Agreement against the Seller and the
EFG Trustee with respect to the Additional Student Loans
(c) all payments on or collections received
thereunder, on and after the related Subsequent Cutoff Date;
(d) 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 Transferor in Section 4.1
of the Transfer Agreement shall be true and correct as of the
Transfer Date.
(b) Transfer Agreement Conditions. Each of the
conditions set forth in Section 2.2(c) of the Transfer Agreement
shall have been satisfied.
B-2
(c) Delivery of Xxxx of Sale. The Transferor shall
have delivered a Xxxx of Sale substantially in the form of Annex A
hereto.
(d) Additional Information. The Transferor 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 Section 4.1 of the
Transfer Agreement and (ii) the satisfaction of the conditions set
forth in this Section 4.
(e) Delivery of Assignment with respect to Exchange
Student Loans. With respect to any Exchange Student Loans that are to
be applied to the Purchase Amount of the Additional Student Loans,
the Transfer shall have delivered a xxxx of sale.
5. Ratification of Agreement. As supplemented by this
Agreement, the Transfer Agreement is in all respects ratified and confirmed and
the Transfer 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 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.
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.
EFG FUNDING CORPORATION
by:
-------------------------------------------
Name:
Title: President and Chief
Executive Officer
EFG STUDENT LOAN TRUST ____-_,
by: [ELIGIBLE LENDER TRUSTEE], not in its
individual capacity but solely as Eligible
Lender Trustee on behalf of the Trust,
by:
-------------------------------------------
Name:
Title:
B-4
Acknowledged and accepted
as of the day and year first
above written:
[INDENTURE TRUSTEE], not in
its individual capacity but
solely as Indenture Trustee,
by:
--------------------------------------
Name:
Title:
[Eligible Lender Trustee], not
in its individual capacity but
solely as Indenture Trustee
by:
--------------------------------------
Name:
Title:
B-5
SCHEDULE A
TO THE
TRANSFER AGREEMENT NO. ___
[List of Additional Student Loans
and their related Subsequent Cutoff Dates]
ANNEX A
TO THE SUBSEQUENT TRANSFER AGREEMENT
{XXXX OF SALE}
For value received, in accordance with the Subsequent
Transfer Agreement (the "Transfer Agreement") dated as of ________ _, 1999,
between EFG FUNDING CORPORATION, as transferor (the "Transferor") and EFG
Student Loan Trust ____-_ (the "Issuer") (the "Subsequent Transfer Agreement")
among the Transferor, the Issuer and the Eligible Lender Trustee, the
Transferor does hereby sell, assign, transfer and otherwise convey unto the
Trustee on behalf of the Issuer, without recourse, all right, title and
interest in and to (i) its beneficial interest in the Additional Student Loans
that are FFELP Loans and all of its legal and beneficial interest in the
Additional Student Loans that are Private 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 rights and
remedies of EFG Funding as purchaser under the Loan Sale Agreement against the
Seller and the EFG Trustee with respect to the Additional Student Loans, (iii)
all payments and collections received thereunder, on and after the Subsequent
Cutoff Date and (iv) all proceeds of any and all of the foregoing (including
but not limited to proceeds derived from the voluntary or involuntary
conversion of any of the Additional Student Loans into cash or other liquidated
property, such as proceeds from the applicable Guarantee Agreement). The
foregoing sale does not constitute and is not intended to result in any
assumption by the Trustee or the Issuer of any obligation of the Seller or the
Transferor 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 that is a Private Loan described in Schedule A to the Transfer
Agreement in favor of the Trustee on behalf of the Trust, without recourse
(subject to the obligations set forth in the Transfer 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 Transfer Agreement and the Transfer Agreement and is to be
governed by the Transfer Agreement and the Transfer Agreement.
Capitalized terms used but not defined herein shall have the
meanings assigned to them in the Transfer Agreement.
C-1
IN WITNESS WHEREOF, the undersigned has
caused this Xxxx of Sale to be duly executed as of ______ __, 1999.
EFG FUNDING CORPORATION
by:
--------------------------------
Name:
Title:
C-2
EXHIBIT D
TO THE TRANSFER AGREEMENT
1. Organization and Good Standing. The
Transferor has been organized and is existing under the corporate of the State
of Delaware and is authorized to do business in every state in which it is
doing business (except where any failure to be so authorized shall not have a
material adverse effect on either the Transferor or its obligations hereunder)
as well as the state in which it is organized.
2. Power and Authority of the Transferor. The
Transferor has the organizational power and authority to execute and deliver
this Agreement and to carry out its terms; the Transferor has full
organizational power and authority to sell and assign the property to be sold
and assigned to and deposited with the Issuer and the Transferor has duly
authorized such sale and assignment to the Issuer by all necessary corporate
action; and the execution, delivery and performance of this Agreement have been
duly authorized by the Transferor by all necessary corporate action.
3. Binding Obligation. This Agreement has
been executed and delivered by the Transferor and, assuming authorization,
execution, and delivery by the other parties thereto, this Agreement
constitutes a valid obligation of the Transferor enforceable against it in
accordance with the express terms of this Agreement, except as enforcement
thereof may be limited by the bankruptcy, insolvency, reorganization,
moratorium, liquidation, readjustment of debt, or other federal or state laws
or equitable principles relating to or affecting the enforcement of creditor's
rights.
4. No Violation. The consummation of the
transactions contemplated by this Agreement 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, articles of
incorporation of the Transferor, or any indenture, agreement or other
instrument to which the Transferor 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 Transferor, any order, rule or regulation applicable to the
Transferor of any court or of any Federal or state regulatory body,
administrative agency or other governmental instrumentality having jurisdiction
over the Transferor 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 Issuer or any reinsurance payments with respect to
any Financed Student Loans by the Guarantor.
5. No Proceedings. There is no action, suit,
claim, investigation, or proceeding, in any such case whether pending or to the
knowledge of the Transferor, threatened against the Transferor before any
court, governmental agency, or arbitrator (i)
D-1
asserting the invalidity of this Agreement, the Indenture or any of the other
Basic Documents or the Notes, (ii) seeking to prevent the issuance of the Notes
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 Transferor of its obligations under, or the
validity or enforceability of, this Agreement, the Indenture, any of the other
Basic Documents or the Notes or (iv) seeking to affect adversely the Federal or
state income tax attributes of the Issuer or the Notes.
6. All Consents. No action, including,
without limitation, the granting or issuing of any consent, permit, license,
approval, or authorization which is required to be made on or prior to the date
of this Agreement in connection with the sale of Student Loans under this
Agreement (with the possible exception of routine filings which, if not made,
will not render the Transferor liable to any material penalties or will not
result in the transactions contemplated by this Agreement being subject to
challenge) is required.
D-2
EXHIBIT E
TO THE TRANSFER AGREEMENT
1. Organization and Good Standing. [ ]
is a national banking association duly organized, validly existing and in good
standing under the laws of the United States and is an "eligible lender" for
purposes of the Higher Education Act.
2. Power and Authority of the [ ].
[ ] has authorized the execution and delivery of this Agreement and has full
legal power and authority to consummate all transactions contemplated by this
Agreement and any and all other agreements relating hereto.
3. Binding Obligation. This Agreement has
been executed and delivered by [ ] and, assuming authorization, execution, and
delivery by the other parties thereto, this Agreement constitutes a valid
obligation of [ ] enforceable against it in accordance with the express terms
of this Agreement, except as enforcement thereof may be limited by the
bankruptcy, insolvency, reorganization, moratorium, liquidation, readjustment
of debt, or other federal or state laws or equitable principles relating to or
affecting the enforcement of creditor's rights.
4. No Violation. Compliance by [ ]
with this Agreement does not in any material respect violate any law or
regulation by which [ ] or its assets are bound, or any writ, order, judgment,
or decree of any court or government instrumentality or arbitrator in which [ ]
is named, or the charter or by-laws of [ ] or any indenture, contract, or
agreement to which [ ] is a party or by which it is or its properties are bound
or affected.
5. No Proceedings. There is no action, suit,
claim, investigation, or proceeding, in any case pending or, to the knowledge
of [ ], threatened against [ ] before any court, governmental agency, or
arbitrator which, if decided adversely to [ ], is likely to have a material
adverse effect upon the validity or enforceability of this Agreement.
6. All Consents. No action, including,
without limitation, the granting or issuing of any consent, permit, license,
approval, or authorization which is required to be made on or prior to the date
of this Agreement in connection with the sale of Financed Student Loans under
this Agreement (with the possible exception of routine filings which, if not
made, will not render [ ] liable to any material penalties or will not result
in the transactions contemplated by this Agreement being subject to challenge)
is required.
E-1
EXHIBIT F
TO THE TRANSFER AGREEMENT
{ASSIGNMENT}
For value received, in accordance with the Transfer Agreement
(the "Transfer Agreement") dated as of _______ _, 1999, between EFG FUNDING
CORPORATION, as transferor (the "Transferor") and EFG Student Loan Trust ____-_
(the "Issuer"), the Transferor does hereby sell, assign, transfer and otherwise
convey unto the Trustee on behalf of the Issuer, without recourse all right,
title and interest in and to (i) all of its beneficial interest the Qualified
Substitute Student Loan(s) indicated in Schedule A hereto that are FFELP Loans
and all of its legal and beneficial interest in such loans that are Private
Loans (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 rights and remedies of EFG
Funding as purchaser under the Loan Sale Agreement against the Seller and the
EFG Trustee with respect to the Additional Student Loans, (iii) all payments
and/or collections received thereunder on and after the date hereof and (iv)
all proceeds of any and all of the foregoing (including but not limited to
proceeds derived from the voluntary or involuntary conversion of any of the
Additional Student Loans into cash or other liquidated property, such as
proceeds from the applicable Guarantee Agreement). The foregoing sale does not
constitute and is not intended to result in any assumption by the Trustee or
the Issuer of any obligation of the Transferor or the Seller to the borrowers
of Additional Student Loans or any other Person in connection with the
Additional Student Loans or any agreement or instrument relating to any of
them.
In addition, the undersigned, by execution of this
instrument, hereby endorses the promissory notes evidencing each Additional
Student Loan that is a Private Loan in favor of the Trustee on behalf of the
Trust, without recourse (subject to the obligations set forth in the Transfer
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 Transfer Agreement and is to be governed by the Transfer
Agreement.
Capitalized terms used but not defined herein shall have the
meaning assigned to them in Appendix A to the Administration Agreement, dated
as of _____ __, 1999, among the Trust, as Issuer, the Educational Finance
Group, Inc., as Administrator, and [INDENTURE TRUSTEE] as Indenture Trustee,
which also contains rules as to usage that shall be applicable herein.
F-1
IN WITNESS WHEREOF, the undersigned has
caused this Assignment to be duly executed as of ___________.
EFG FUNDING CORPORATION
by:
-------------------------------
Name:
Title:
F-2
