Exhibit 99.1
LOAN SALE AGREEMENT
among
SMS STUDENT LOAN TRUST 2000-B,
as Issuer,
USA GROUP SECONDARY MARKET SERVICES, INC.,
as Seller,
BANK ONE, NATIONAL ASSOCIATION, AS TRUSTEE FOR
USA GROUP SECONDARY MARKET SERVICES, INC.,
and
BANK ONE, NATIONAL ASSOCIATION,
not in its individual capacity but solely
as Eligible Lender Trustee
Dated as of April 1, 2000
LOAN SALE AGREEMENT dated as of April 1, 2000, among SMS
STUDENT LOAN TRUST 2000-B, a Delaware trust (the "Issuer"), USA GROUP SECONDARY
MARKET SERVICES, INC, as seller (the "Seller"), BANK ONE, NATIONAL ASSOCIATION,
AS TRUSTEE FOR USA GROUP SECONDARY MARKET SERVICES, INC. ("Bank One"), and BANK
ONE, NATIONAL ASSOCIATION, 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 purchased in the ordinary course of
business by the Seller; and
WHEREAS in order to comply with the requirements of the Higher
Education Act, legal title to the Seller's student loan portfolio is vested in
Bank One, as trustee on behalf of the Seller as the sole beneficiary; and
WHEREAS the Seller is willing to sell such student loans to the
Eligible Lender Trustee on behalf of the Issuer; and
WHEREAS the Eligible Lender Trustee is willing to hold legal title
to, and serve as eligible lender trustee with respect to, such student loans on
behalf of the Issuer.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
ARTICLE I
Definitions and Usage
Capitalized terms used but not defined herein are defined in
Appendix A to the Administration Agreement, dated as of April 1, 2000, among the
Issuer, the Seller, as Administrator, and Bankers Trust Company, as Indenture
Trustee, which also contains rules as to usage and construction that shall be
applicable herein.
ARTICLE II
Conveyance of Financed Student Loans
SECTION 2.01. Conveyance of Initial Financed Student Loans. (a) In
consideration of the 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 other
amounts to be distributed from time to time to the Seller in accordance with the
terms of this Agreement, the Seller (and, with respect to legal title to the
Financed Student Loans, Bank One as trustee on behalf of the Seller) does
hereby, as evidenced by a duly executed Xxxx of Sale in the form of Exhibit A
hereto, sell, assign, and
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otherwise convey to the Issuer and, with respect to legal title to the Initial
Financed Student Loans, to the Eligible Lender Trustee on behalf of the Issuer)
without recourse except as may be provided herein, (i) all right, title and
interest in and to the Initial Financed Student Loans, and all obligations of
the Obligors thereunder, together with all documents, the related Student Loan
Files and all rights and privileges relating thereto, (ii) all payments on or
collections received thereunder on and after the Cutoff Date net of interest
accrued thereunder prior to the Cutoff Date that is not to be capitalized,
including without limitation, Liquidation Proceeds and Recoveries; (iii) all of
its right, title and interest in all funds on deposit from time to time in the
Trust Accounts, including the Reserve Account Initial Deposit and the Prefunding
Account Closing Date Deposit, and in all investments and proceeds thereof
(including all income thereon); and (iv) all proceeds of any and all of the
foregoing.
(b) 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, the Prefunding Account Closing Date Deposit into the
Prefunding Account and the Collection Account Closing Date Deposit into the
Collection Account.
(c) 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 on and after the Cutoff Date net of
interest accrued thereunder prior to the Cutoff Date that is not to be
capitalized.
SECTION 2.02. Conveyance of Prefunded Loans, 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 Seller of the
Loan Purchase Amount for each such Prefunded Loan, New Loan or Serial Loan to be
delivered to the Seller, the Seller does hereby sell, transfer, assign, set over
and otherwise convey to the Issuer and with respect to legal title the Prefunded
Loans, New Loans and Serial Loans, to the Eligible Lender Trustee on behalf of
the Issuer, without recourse except as may be provided herein, (i) all right,
title and interest of the Seller in and to each Prefunded Loan, 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 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) (i) Reserved.
(ii) During the Revolving Period, upon the tender of
Prefunded Loans, New Loans or Serial Loans by the Seller on the related Transfer
Date and the satisfaction of the conditions set forth in subsection (d) of this
Section 2.02, the Eligible Lender Trustee will so inform the Administrator and
the Indenture Trustee, and the Loan Purchase Amounts for such Prefunded Loans,
New Loans or Serial Loans will be withdrawn from the Prefunding Account, or the
Collateral Reinvestment Account, subject to the provisions of Section 2(f) and
Section 2(k) of the Administration Agreement, and will be remitted to or upon
the order of the Seller. The
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Seller covenants to transfer during the Revolving Period to the Eligible Lender
Trustee on behalf of the Issuer pursuant to paragraph (a) above Prefunded Loans,
New Loans or Serial Loans with an aggregate principal balance which when added
to the principal balance of Consolidation Loans the Seller expects the Issuer to
originate to be substantially equal to the sum of the Prefunding Account Closing
Date Deposit and the amount the Seller expects to be deposited in the Collateral
Reinvestment Account; provided, however, that the Seller shall have no liability
for a breach of the foregoing covenant as a result of the Seller 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 Seller may determine in its discretion, subject to the requirement that the
Seller shall make such transfers 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 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 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
Seller or, alternatively, at the sole discretion of the Seller, the Seller 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 Seller one or more Exchanged Student Loans held by the
Issuer for such Serial Loans; provided, however, that the component of the Loan
Purchase Amount represented by the Purchase Premium Amounts shall not be payable
with respect to Exchanged Serial Loans and, with respect to purchased Serial
Loans, shall be payable on a deferred basis pursuant to the final sentence of
this paragraph; provided that the principal balance of Exchanged Serial loans
shall not exceed 10% of the Pool Balance on the Closing Date. In the event
Exchanged Student Loans are to be so used (i) the decision by the Issuer as to
which of those Financed 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 Eligible Lender Trustee; provided,
however, that the Eligible Lender Trustee shall not select for such purpose any
Financed Student Loan that has the same Borrower as any other Financed Student
Loan unless all of the Financed 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 Financed 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 balance (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 Trust after the Revolving
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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; provided, however, that no Purchase Premium Amounts shall be
payable on Exchanged Serial Loans.
(d) The Seller (and with respect to legal title to the
Prefunded Loans, New Loans and Serial Loans, Bank One as trustee on behalf of
the Seller) shall transfer to the Issuer the Prefunded Loans, 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:
(i) the Seller (and with respect to legal title to the
Prefunded Loans, New Loans and Serial Loans, Bank One as trustee on behalf
of the Seller) shall have delivered to the Eligible Lender Trustee and the
Indenture Trustee a duly executed transfer agreement (including executed
signature pages by the other parties thereto) in substantially the form of
Exhibit B hereto (each, a "Transfer Agreement"), which shall include
supplements to Schedule A hereto, listing such Prefunded Loans, New Loans
and Serial Loans;
(ii) the Seller shall have delivered, at least two days
prior to such Transfer Date, notice of such transfer to the Eligible
Lender Trustee, the Indenture Trustee and the Rating Agencies, including a
listing of the designation and the aggregate principal balance of such
Prefunded Loans, New Loans and Serial Loans;
(iii) the Seller shall have deposited in the Collection
Account all amounts on or collections received in respect of the Prefunded
Loans, New Loans and Serial 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 or the Noteholders;
(vi) the Seller shall have delivered to 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 Seller shall have delivered on each May 1 and
November 1, commencing November 1, 2000 (A) to the Rating Agencies an
Opinion of Counsel with respect to the transfer of the Prefunded Loans,
New Loans and Serial Loans transferred to the Issuer since the later of
the Closing Date or the prior May 1 or
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November 1, substantially in the form of the Opinion of Counsel delivered
to the Rating Agencies on the Closing Date, and (B) to the Eligible Lender
Trustee and the Indenture Trustee the Opinion of Counsel as required by
Section 6.02(f)(1) hereof; provided, however, that, notwithstanding the
foregoing, no opinion shall be required under subclause (B) and, if the
Revolving Period has terminated, no opinion shall be required under
subclause (A), unless the Seller, the Eligible Lender Trustee or the
Indenture Trustee determines that, with regard to the most recent opinion
on the matters described in either such subclause that was delivered with
respect to the Financed Student Loans (whether on the Closing Date or
thereafter under this subsection or under another provision of the Basic
Documents), the conclusion of, or the reasoning underlying, such opinion
is no longer correct in all material respects due to a change in law or
regulations or the ruling of a court, an administrative tribunal or a
regulatory or other governmental authority; upon making any such
determination, whichever of the Seller, the Eligible Lender Trustee and
the Indenture Trustee makes such determination shall notify the others and
the Rating Agencies; and provided, further, that neither the Eligible
Lender Trustee nor the Indenture Trustee shall have any obligation to
monitor changes in laws or regulations or the rulings of courts or other
governmental agencies for the purpose of making any determination
described in the preceding proviso;
(viii) with respect to any New Loan which is guaranteed
by an Additional 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 and the Eligible Lender Trustee;
(ix) 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;
(x) no selection procedures believed by the Seller to be
adverse to the interests of the Noteholders shall have been utilized in
selecting the New Loans or the Serial Loans or in selecting Exchanged
Student Loans or the Exchanged Serial Loans;
(xi) no Default or Event of Default shall have occurred
under the Indenture, no Servicer Default shall have occurred under the
Servicing Agreement and no Administrator Default shall have occurred under
the Administration Agreement; and
(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
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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 Seller 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 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
that the conveyance of the Seller's (and, with respect to legal title to the
loans, Bank One's) right, title and interest in and to the Initial Financed
Student Loans pursuant to this Agreement and any Prefunded Loans, New Loans and
Serial Loans pursuant to a related Transfer Agreement shall constitute a valid
purchase and sale and not a loan. If such conveyance is deemed to be a loan and
not a sale, then the parties also intend and agree that the Seller (and, with
respect to legal title to loans, Bank One) 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 and Bank One's right, title and interest in, to and under
the Initial Financed Student Loans and any Prefunded Loans, New Loans or Serial
Loans and the other items specified in Sections 2.01 and 2.02, and that this
Agreement (with respect to the Initial Financed Student Loans) and any
applicable Transfer Agreement (with respect to the Prefunded Loans, 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 2.01 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 or Bank One. Each of the Seller and Bank One
waives, to the extent permitted by applicable law, all claims, causes of action
and remedies whether legal or equitable (including any rights of set-off)
against the Issuer or any assignee of the Issuer relating to such action by the
Issuer in connection with the transactions contemplated by this Agreement, each
Transfer Agreement and the other Basic Documents.
SECTION 2.04. Endorsement. The Seller (and, with respect to legal
title to the Financed Student Loans, Bank One as trustee on behalf of the
Seller) hereby appoint each of the Eligible Lender Trustee and the Indenture
Trustee as the Seller's (and Bank One's) true and lawful attorney-in-fact with
full power of substitution to endorse the Seller's (and Bank One's) name on any
promissory note evidencing the Initial Financed Student Loans and any Prefunded
Loans, New Loans or Serial Loans transferred to the Eligible Lender Trustee on
behalf of the Trust pursuant to Sections 2.01 and 2.02. The Seller (and, with
respect to legal title to the Financed Student Loans, Bank One as trustee on
behalf of the Seller) acknowledge and agree 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.
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ARTICLE III
The Financed Student Loans
SECTION 3.01. Representations and Warranties of Seller with Respect
to the Financed Student Loans. The Seller represents and warrants with respect
to the Financed Student Loans as set forth in Exhibit C hereto. Such
representations and warranties speak as of the execution and delivery of this
Agreement and as of the Closing Date, in the case of the Initial Financed
Student Loans, as of the applicable Transfer Date, in the case of the Prefunded
Loans, New Loans and Serial Loans, as of the date of the relevant Assignment in
the case of any Qualified Substitute Student Loan, as of the date of origination
in the case of any Consolidation Loan added to the Trust during the Revolving
Period and as of the applicable Add-on Consolidation Loan Funding Date, in the
case of any Consolidation Loan the principal balance of which is increased by
the principal balance of any related Add-on Consolidation Loan, but shall
survive the sale, transfer and assignment of the Financed Student Loans to the
Eligible Lender Trustee on behalf of the Issuer (and both the origination of
such Consolidation Loans and the addition of the principal balance of any Add-on
Consolidation Loan) and the pledge thereof to the Indenture Trustee pursuant to
the Indenture.
SECTION 3.02. Purchase; Repurchase; Reimbursement. (a) Upon
discovery by the Seller, Bank One, the Servicer, the Eligible Lender Trustee or
the Indenture Trustee of any breach of the Seller's representations and
warranties or other restrictions made by the Seller pursuant to Section 3.01 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 sixty (60)
days after the Seller becomes aware or receives written notice (whichever is
earlier) of such breach, the Seller shall be obligated to either (i) repurchase
any Financed Student Loan in which the interests of the Noteholders are
materially and adversely affected by any such breach any day during the first
Monthly Collection Period succeeding the end of such 60-day period or (ii)
substitute a Qualified Substitute Student Loan in the manner specified in this
Section; provided, however, that it is understood that any such breach that does
not affect the Guarantor's obligation to guarantee payment of such Financed
Student Loan to the Eligible Lender Trustee will not be considered to have a
material adverse effect for this purpose and it is further understood that any
dispute as to whether the Guarantor's obligation has been so affected will be
resolved by the decision of the Indenture Trustee for so long as Notes are
Outstanding and thereafter by the Eligible Lender Trustee. In addition, if any
such breach by the Seller does not trigger such a repurchase obligation but does
result in the refusal by the Guarantor to guarantee all or a portion of the
accrued interest, or the loss (including any obligation of the Issuer to repay
the Department) of certain Interest Subsidy Payments and Special Allowance
Payments, then, unless such breach, if curable, is cured within sixty (60) days,
the Seller shall reimburse the Issuer by remitting an amount equal to all such
non-guaranteed interest amounts and such forfeited Interest Payments and Special
Allowance Payments in the manner specified in Section 3.03. Subject to the
provisions of Section 4.03, the sole remedy of the Issuer, the Eligible Lender
Trustee, the Indenture Trustee or the Noteholders with respect to a breach of
representations and warranties pursuant to Section 3.01, and the agreement
contained in this Section, shall be to require the
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Seller to repurchase or substitute for Financed Student Loans or to reimburse
the Issuer as provided above pursuant to this Section, subject to the conditions
contained herein.
(b) The Seller may, at its option, cause a Financed Student Loan to be
purchased or repurchased by a Person not affiliated with the Seller as of the
last day of a Monthly Collection Period if there is a dispute with the related
Borrower during such Monthly Collection Period which in the Servicer's
reasonable judgment would call into question whether such Financed Student Loan
will be repaid by the Borrower; provided, however, that the aggregate principal
balance of the Financed Student Loans purchased pursuant to this subsection (b)
shall not exceed, in aggregate, 1% of the Initial Pool Balance.
(c) In consideration of and simultaneously with the purchase or repurchase
of a Financed Student Loan, the Seller shall remit the Purchase Amount therefor,
in the manner specified in Section 3.03, and the Issuer shall execute such
assignments and other documents reasonably requested by the Seller in order to
effect such transfer. Upon any such transfer of a Financed Student Loan, legal
title to, and beneficial ownership and control of, the related Student Loan File
will thereafter belong to the Seller or in the case of legal title thereto an
eligible lender under the Higher Education Act designated by the Seller.
With respect to any Qualified Substitute Student Loan or Loans, the
Seller shall deliver to the Eligible Lender Trustee for the benefit of the
Indenture Trustee such documents and agreements together with a duly executed
Assignment in the form of Exhibit F hereto. Payments due with respect to
Qualified Substitute Student Loans shall be part of the Trust Estate on and
after the date of such Assignment. Upon such substitution, the Qualified
Substitute Student Loan or Loans shall be subject to the terms of this Agreement
in all respects, and the Seller shall be deemed to have made with respect to
such Qualified Substitute Student Loan or Loans, as of the date of substitution,
the representations and warranties made pursuant to Section 3.01 with respect to
any such Student Loan. In addition, any such substitution shall occur only upon
satisfaction of each of the following conditions on or prior to the date of the
related Assignment:
(i) the Seller shall have deposited in the Collection Account
all collections in respect of the Qualified Substitute Student Loans on
and after each applicable date of Assignment;
(ii) as of the date of the related Assignment, the Seller
shall not have been insolvent nor will it have been made insolvent by such
transfer nor is it aware of any pending insolvency;
(iii) such addition will not result in a material adverse
Federal or State tax consequence to the Issuer or the Noteholders;
(iv) the Seller shall have delivered (A) to the Rating
Agencies, an Opinion of Counsel with respect to each transfer of Qualified
Substitute Student Loans, substantially in the form of the Opinion of
Counsel delivered to the Rating Agencies on
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the Closing Date, and (B) to the Eligible Lender Trustee and the Indenture
Trustee, the Opinion of Counsel required by Section 6.02(f)(1) hereof;
provided, however, that no opinion shall be required under either
subclause (A) or (B) unless the Seller, the Eligible Lender Trustee or the
Indenture Trustee determines that, with regard to the most recent opinion
on the matters described in either such subclause that was delivered with
respect to the Financed Student Loans (whether on the Closing Date or
thereafter under this subsection or under another provision of the Basic
Documents), the conclusion of, or the reasoning underlying, such opinion
is no longer correct in all material respects due to a change in law or
regulations or the ruling of a court, an administrative tribunal or a
regulatory or other governmental authority; upon making any such
determination, whichever of the Seller, the Eligible Lender Trustee and
the Indenture Trustee makes such determination shall notify the others and
the Rating Agencies; and provided, further, that neither the Eligible
Lender Trustee nor the Indenture Trustee shall have any obligation to
monitor changes in laws or regulations or the rulings of courts or other
governmental agencies for the purpose of making any determination
described in this clause (iv);
(v) the Seller shall have taken any action required to
maintain the first perfected ownership interest of the Issuer in the Trust
Estate and the first perfected security interest of the Indenture Trustee
in the Collateral;
(vi) no selection procedures believed by the Seller to be
adverse to the interests of the Noteholders shall have been utilized in
selecting the Qualified Substitute Student Loans; and
(vii) no Default or Event of Default shall have occurred under
the Indenture, no Servicer Default shall have occurred under the Servicing
Agreement and no Administrator Default shall have occurred under the
Administration Agreement.
Upon any such substitution and the deposit to the Collection Account
of the amount required to be deposited therein in connection with such
substitution as described in the following paragraph, the Eligible Lender
Trustee shall release any documentation held with respect to the Financed
Student Loan being substituted for (the "Deleted Student Loan") to the Seller
and shall execute and deliver at the Seller's direction such instruments of
transfer or assignment prepared by the Seller, in each case without recourse, as
shall be necessary to vest in the Seller, or (in the case of legal title thereto
an eligible lender under the Higher Education Act designated by the Seller), the
Eligible Lender Trustee's interest in any Deleted Student Loan substituted for
pursuant to this Section 3.02.
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For any month in which the Seller substitutes one or more Qualified
Substitute Student Loans for one or more Deleted Student Loans, the Servicer
will determine the amount (if any) by which as of the date of the relevant
Assignment the aggregate principal balance of all such Qualified Substitute
Student Loans is less than the aggregate principal balance of all such Deleted
Student Loans. The amount of such shortage (the "Substitution Adjustment
Amount") shall be deposited in the Collection Account by the Seller on or before
the date of the relevant Assignment.
SECTION 3.03. Repurchase Deposits. The Seller shall deposit or cause
to be deposited in the Collection Account the aggregate Purchase Amount with
respect to Purchased Student Loans and all other amounts to be paid by the
Seller under Section 3.02 and Section 5.01 when such amounts are due.
ARTICLE IV
The Seller
SECTION 4.01. Representations of Seller and Bank One. The Seller
represents as set forth in Exhibit D hereto and Bank One represents as set forth
in Exhibit E hereto. Such representations speak as of the execution and delivery
of this Agreement and as of the Closing Date in the case of the Initial Financed
Student Loans, as of the applicable Transfer Date in the case of the Prefunded
Loans, 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
Seller, as of the date of origination in the case of any Consolidation Loan
added to the Trust 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 Financed Student Loans to the Eligible Lender Trustee on behalf of the
Issuer (and both the origination of such Consolidation Loans and the addition of
the principal balance of any Add-on Consolidation Loan) and the pledge thereof
to the Indenture Trustee pursuant to the Indenture.
SECTION 4.02. Existence. During the term of this Agreement, the
Seller will keep in full force and effect its existence, rights and franchises
as a corporation under the laws of the jurisdiction of its incorporation 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 administration of
this Agreement and the transactions contemplated hereby. In addition, all
transactions between the Seller and its Affiliates will be conducted on an
arm's-length basis. For so long, during the term of this Agreement, as the
Seller shall not be an eligible lender under the Higher Education Act with
respect to federal Student Loans, the Seller agrees to keep in full force and
effect an agreement with Bank One 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 Seller's Student Loans in
trust for and on behalf of the Seller. The Seller shall not convey any
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Prefunded Loans, New Loan, Serial Loan or Qualified Substitute Student Loan if
the eligible lender holding legal title to such loan is other than Bank One
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 Bank
One, to the same extent as if it were named separately from Bank One in each of
such provisions.
SECTION 4.03. Liability of Seller; Indemnities. The Seller shall be
liable in accordance herewith only to the extent of the obligations specifically
undertaken by the Seller under this Agreement.
(a) The Seller shall indemnify, defend and hold harmless the
Issuer, the Eligible Lender Trustee and the Indenture Trustee and their
officers, directors, employees and agents from and against any taxes that
may at any time be asserted against any such Person with respect to the
transactions contemplated herein and in the other Basic Documents (except
any such income taxes arising out of fees paid to the Eligible Lender
Trustee or the Indenture Trustee), including any sales, gross receipts,
general corporation, tangible personal property, privilege or license
taxes (but, in the case of the Issuer, not including taxes in connection
with the issuance and original sale of the Notes or asserted with respect
to ownership of the Financed Student Loans or federal or other income
taxes arising out of payments on the Notes) and costs and expenses in
defending against the same.
(b) The Seller shall indemnify, defend and hold harmless the
Issuer, the Eligible Lender Trustee, the Indenture Trustee and the
Noteholders and the officers, directors, employees and agents of the
Issuer, the Eligible Lender Trustee and the Indenture Trustee from and
against any and all costs, expenses, losses, claims, damages and
liabilities arising out of, or imposed upon such Person through, (i) the
Seller's willful misfeasance, bad faith or 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.
(c) The Seller shall be liable as primary obligor for, and
shall indemnify, defend and hold harmless the Eligible Lender Trustee and
its officers, directors, employees and agents from and against, all costs,
expenses, losses, claims, damages, obligations and liabilities arising out
of, incurred in connection with or relating to the Trust Agreement, the
other Basic Documents, the Trust Estate, the acceptance or performance of
the trusts and duties set forth herein and in the Trust Agreement or the
action or the inaction of the Eligible Lender Trustee hereunder and under
the Trust Agreement, except to the extent that such cost, expense, loss,
claim damage, obligation or liability: (i) shall be due to the willful
misfeasance, bad faith or negligence (except for errors in judgment) of
the Eligible Lender Trustee , (ii) shall arise from any breach by the
Eligible Lender Trustee of its covenants under any of the Basic Documents;
or (iii) shall arise from the breach by the Eligible Lender Trustee of any
of its representations or
12
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
Obligations of, Seller or Bank One. Any person (a) into which the Seller or Bank
One may be merged or consolidated, (b) which may result from any merger or
consolidation to which the Seller or Bank One shall be a party or (c) which may
succeed to the properties and assets of the Seller or Bank One substantially as
a whole, shall be the successor to the Seller or Bank One, respectively, without
the execution or filing of any document or any further act by any of the parties
to this Agreement; provided, however, that the Seller hereby covenants that it
will not consummate any of the foregoing transactions except upon satisfaction
of the following: (i) the surviving Seller, if other than SMS, 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 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 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) the surviving Seller shall have a consolidated
net worth at least equal to that of the predecessor Seller, (v) such transaction
will not result in a material adverse federal or state tax consequence to the
Issuer or the Noteholders and (vi) unless SMS is the surviving entity, the
Seller shall have delivered to the Eligible Lender Trustee and the Indenture
Trustee an Opinion of Counsel either (A) stating that, in the opinion of such
counsel, all financing statements and continuation statements and amendments
thereto have been executed and filed that are necessary fully to preserve and
protect the interest of the Eligible Lender Trustee and Indenture Trustee,
respectively, in the Financed Student Loans and reciting the details of such
filings, or (B) stating that, in the opinion of such counsel, no such action
shall be necessary to preserve and protect such interests; and provided,
further, that Bank One hereby
13
covenants that, unless Bank One is the surviving entity, it will not consummate
any of the foregoing transactions unless Bank One 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, Bank One and
Others. The Seller, Bank One and any director or officer or employee or agent of
the Seller or Bank One may rely in good faith on the advice of counsel or on any
document of any kind, prima facie properly executed and submitted by any Person
respecting any matters arising hereunder (provided, however, that such reliance
shall not limit in any way the Seller's obligations under Section 3.02). Neither
the Seller nor Bank One 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 4.06. Seller and Bank One May Own Notes. The Seller, Bank
One and any Affiliate of either may in its individual or any other capacity
become the owner or pledgee of Notes with the same rights as it would have if it
were not the Seller or Bank One, as the case may be or an Affiliate of either,
except as expressly provided herein or in any other Basic Document.
ARTICLE V
Termination
SECTION 5.01. 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 15% or
less of the initial aggregate principal balance of the Notes, the Company or its
designee shall have the option to purchase the Trust Estate, other than the
Trust Accounts. To exercise such option, the Company or its designee shall
deposit in the Collection Account an amount equal to the Minimum Purchase Price;
provided, however, that the Company 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 Minimum Purchase Price.
14
ARTICLE VI
Miscellaneous
SECTION 6.01. Amendment. This Agreement may be amended by the
Seller, Bank One and the Eligible Lender Trustee, with the consent of the
Indenture Trustee, but without the consent of any of the Noteholders, to cure
any ambiguity, to correct or supplement any provisions in this Agreement or for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions in this Agreement or of modifying in any manner the rights
of the Noteholders; provided, however, that such action shall not, as evidenced
by an Opinion of Counsel delivered to the Eligible Lender Trustee and the
Indenture Trustee, adversely affect in any material respect the interests of any
Noteholder.
This Agreement may also be amended from time to time by the Seller
and the Eligible Lender Trustee, with the consent of Bank One, the Indenture
Trustee and the Noteholders of Notes evidencing not less than a majority of the
Outstanding Amount of the Notes, for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement or
of modifying in any manner the rights of the Noteholders; provided, however,
that no such amendment shall (a) increase or reduce in any manner the amount of,
or accelerate or delay the timing of, collections of payments with respect to
Financed Student Loans or distributions that shall be required to be made for
the benefit of the Noteholders or any Swap Counterparties or (b) reduce the
aforesaid percentage of the Outstanding Amount of the Notes, the Noteholders of
which are required to consent to any such amendment, without the consent of all
outstanding Noteholders and any Swap Counterparties.
Promptly after the execution of any such amendment or consent (or,
in the case of the Rating Agencies, five Business Days prior thereto), the
Eligible Lender Trustee shall furnish written notification of the substance of
such amendment or consent to Bank One, the Seller, the Administrator, each
Noteholder, the Indenture Trustee, the Servicer and each of the Rating Agencies.
It shall not be necessary for the consent of Noteholders pursuant to
this Section to approve the particular form of any proposed amendment or
consent, but it shall be sufficient if such consent shall approve the substance
thereof.
Prior to the execution of any amendment to this Agreement, the
Eligible Lender Trustee and the Indenture Trustee shall receive upon request and
rely upon an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement and the Opinion of Counsel referred to
in Section 6.02(f). The Eligible Lender Trustee and the Indenture Trustee may,
but shall not be obligated to, enter into any such amendment which affects the
Eligible Lender Trustee's or the Indenture Trustee's, as applicable, own rights,
duties or immunities under this Agreement or otherwise.
SECTION 6.02. Protection of Interests in Trust. (a) Each of the
Seller and Bank One shall execute and file such financing statements and cause
to be executed and filed such
15
continuation statements, all in such manner and in such places as may be
required by law fully to preserve, maintain, and protect the interest of the
Issuer, the Eligible Lender Trustee and the Indenture Trustee in the Financed
Student Loans and in the proceeds thereof. Each of the Seller and Bank One shall
deliver (or cause to be delivered) to the Eligible Lender Trustee and the
Indenture Trustee file-stamped copies of, or filing receipts for, any document
filed as provided above, as soon as available following such filing.
(b) Neither the Seller nor Bank One 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 Eligible Lender Trustee and the
Indenture Trustee at least five (5) days' prior written notice thereof and shall
have promptly filed appropriate amendments to all previously filed financing
statements or continuation statements.
(c) Each of the Seller and Bank One 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 Seller or Bank One shall propose to
sell, grant a security interest in, or otherwise transfer any interest in
student loans to any prospective purchaser, lender or other transferee, the
Seller or Bank One, as the case may be, 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 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, on each Transfer Date as set
forth in Section 2.02 and on the date of each Assignment as set forth in
Section 3.02, an Opinion of Counsel either (A) stating that, in the
opinion of such counsel, all financing statements and continuation
statements have been executed and filed that are necessary fully to
preserve and protect the interest of the Eligible Lender Trustee and the
Indenture Trustee in the Financed Student Loans, and reciting the details
of such filings or referring to prior Opinions of
16
Counsel in which such details are given, or (B) stating that, in the
opinion of such counsel, no such action shall be necessary to preserve and
protect such interest; and
(2) within 120 days after the beginning of each calendar year
beginning with the first calendar year beginning more than three months
after the Cutoff Date, an Opinion of Counsel, dated as of a date during
such 120-day period, either (A) stating that, in the opinion of such
counsel, all financing statements and continuation statements have been
executed and filed that are necessary fully to preserve and protect the
interest of the Eligible Lender Trustee and the Indenture Trustee in the
Financed Student Loans, and reciting the details of such filings or
referring to prior Opinions of Counsel in which such details are given, or
(B) stating that, in the opinion of such counsel, no such action shall be
necessary to preserve and protect such interest; provided, however, that a
single Opinion of Counsel may be delivered in satisfaction of the
foregoing requirement and that of Section 3.06(b) of the Indenture.
Each Opinion of Counsel referred to in clause (1) or (2) above shall
specify (as of the date of such opinion and given all applicable laws as in
effect on such date) any action necessary to be taken in the following year to
preserve and protect such interest.
SECTION 6.03. Notices. Unless otherwise agreed by the recipient, all
demands, notices and communications upon or to the Seller, Bank One, the
Servicer, the Issuer, the Eligible Lender Trustee, the Indenture Trustee, the
Administrator or the Rating Agencies under this Agreement shall be in writing,
personally delivered or mailed by certified mail, return receipt requested (or
in the form of telex or facsimile notice, followed by written notice delivered
as aforesaid or postage prepaid, first class mail), and shall be deemed to have
been duly given upon receipt;
(a) in the case of the Seller, to
USA Group Secondary Market Services, Inc.
00 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000-0000
Attention: President and Chief Executive Officer
Telephone: (000) 000-0000
Telecopy: (000) 000-0000;
with a copy to
Office of the General Counsel
USA Group, Inc.
00 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000;
17
(b) in the case of Bank One, to
Bank One, National Association, as
trustee for USA Group Secondary
Market Services, Inc.
1 Bank Xxx Xxxxx
Xxxxx XX0-0000
Xxxxxxx, Xxxxxxxx
00000-0000
Attention: Global Corporate Trust, Services Division,
Xxxxx Xxxxxxxx
Telephone: 000-000-0000
Telecopy: 000-000-0000;
(c) in the case of the Servicer, to
USA Group Loan Services, Inc.
00 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000-0000
Attention: President
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy to
Office of the Deputy General Counsel
USA Group, Inc.
00 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000-0000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000;
(d) in the case of the Issuer, to
Student Loan Trust 2000-B
c/o Bank One Delaware, Inc.
3 Xxxxxxxxx Centre
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
with a copy to the Eligible Lender Trustee
at the Corporate Trust Office of the
Eligible Lender Trustee;
(e) in the case of the Issuer or the Eligible Lender
Trustee, at the Corporate Trust Office of the Eligible
Lender Trustee;
(f) in the case of the Indenture Trustee, at its Corporate
Trust Office;
18
(g) in the case of the Administrator, to
USA Group Secondary Market Services, Inc.
00 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000-0000
Attention: President and Chief Executive Officer
Telephone: (000) 000-0000
Telecopy: (000) 000-0000;
with a copy to
Office of the General Counsel
USA Group, Inc.
00 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000;
(g) in the case of Fitch, to
Fitch IBCA, Inc.
Xxx Xxxxx Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Asset Backed Monitoring Unit
Telephone: (000) 000-0000
Facsimile: (000) 000-0000;
(h) in the case of Xxxxx'x Investors Service, Inc.
00 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: ABS Monitoring Department
Telephone: (000) 000-0000
Facsimile: (000) 000-0000; and
(i) in the case of Standard & Poor's,
a division of The XxXxxx-Xxxx Companies, Inc. to
Standard & Poor's
00 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Asset Backed Surveillance Department
Telephone: 000-000-0000
Facsimile: 000-000-0000.
or, as to each of the foregoing, at such other address as shall be designated by
written notice to the other parties.
19
SECTION 6.04. Assignment. Notwithstanding anything to the contrary
contained herein, except as provided in Section 4.04, this Agreement may not be
assigned by the Seller or Bank One. This Agreement may be assigned by the
Eligible Lender Trustee only to its permitted successor pursuant to the Trust
Agreement or otherwise in accordance with Section 6.10.
SECTION 6.05. Limitations on Rights of Others. The provisions of
this Agreement are solely for the benefit of the Seller, Bank One, the Issuer,
and the Eligible Lender Trustee and for the benefit of the Indenture Trustee,
the Noteholders, any Swap Counterparties (with respect to Section 5.01) and the
Company or its designee, 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 State of Indiana, 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, neither the Seller nor Bank One shall, prior to
the date which is one year and one day after the termination of this Agreement
with respect to the Issuer or the Company, 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,
20
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 or the Company.
SECTION 6.12. Limitation of Liability of Bank One, Eligible Lender
Trustee and Indenture Trustee. (a) Notwithstanding anything contained herein to
the contrary (other than as provided in subsection (d)), this Agreement has been
signed by Bank One not in its individual capacity but solely in its capacity as
trustee for the Seller and in no event shall Bank One in its individual capacity
or, except as expressly provided herein or in the Instrument of Resignation,
Appointment and Acceptance dated September 24, 1999 in connection with the trust
agreement between Seller and Bank One, Indiana, N.A. f/k/a NBD Bank, N.A. dated
February 24, 1993, as legal owner of the Financed Student Loans, have any
liability for representations, warranties, covenants, agreements or other
obligations of the Seller hereunder or in any of the certificates, notices or
agreements delivered by the Seller pursuant hereto as to all of which recourse
shall be had solely against the Seller.
(b) Notwithstanding anything contained herein to the contrary
(other than as provided in subsection (d)), this Agreement has been signed by
Bank One, National Association not in its individual capacity but solely in its
capacity as Eligible Lender Trustee of the Issuer and in no event shall Bank
One, National Association 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.
(c) Notwithstanding anything contained herein to the contrary
(other than as provided in subsection (d)), this Agreement has been accepted by
Bankers Trust Company not in its individual capacity but solely as Indenture
Trustee and in no event shall Bankers Trust Company have any liability for the
representations, warranties, covenants, agreements or other obligations of the
Issuer hereunder or in any of the certificates, notices or agreements delivered
pursuant hereto, as to all of which recourse shall be had solely to the assets
of the Issuer.
(d) Notwithstanding any other provision in this Agreement or
the other Basic Documents, nothing in this Agreement or the other Basic
Documents shall be construed to limit the legal responsibility of the Eligible
Lender Trustee or the Indenture Trustee, to the U.S. Secretary of Education or a
Guarantor for any violations of statutory or regulatory requirements that may
occur with respect to loans held by the Eligible Lender Trustee or the Indenture
Trustee pursuant to, or to otherwise comply with their obligations under, the
Higher Education Act or implementing regulations.
SECTION 6.13. Agreement of Seller and Bank One. Each of the Seller
and Bank One agrees to execute and deliver such instruments and to take such
actions as the Eligible Lender Trustee, the Issuer or the Indenture Trustee may
reasonably request in order to effectuate the terms and carry out the purposes
of the Agreement. Each of the Seller and Bank One agrees
21
to execute and deliver such instruments and to take such actions as the Eligible
Lender Trustee, the Issuer or the Indenture Trustee may reasonably request in
order to effectuate the terms and carry out the purposes of the Agreement.
[Signatures Follow on Next Page]
22
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.
SMS STUDENT LOAN TRUST 2000-B
By: Bank One, National Association, not in its
individual capacity but solely as Eligible
Lender Trustee on behalf of the Trust
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Assistant Vice President
USA GROUP SECONDARY MARKET SERVICES, INC.
By: /s/ Xxxxxx X. Xxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President and
Chief Financial Officer
BANK ONE, NATIONAL ASSOCIATION, AS TRUSTEE FOR
USA GROUP SECONDARY MARKET SERVICES, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Assistant Vice President
BANK ONE, NATIONAL ASSOCIATION, not in its
individual capacity but solely as Eligible
Lender Trustee
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Assistant Vice President
23
Acknowledged and accepted as of the day and year first above written:
BANKERS TRUST COMPANY, not in
its individual capacity but
solely as Indenture Trustee
By: /s/ Xxxxx Xxxxxxx
------------------------
Name: Xxxxx Xxxxxxx
Title: Vice President
24
SCHEDULE A
[List of Initial Financed Student Loans]
[Provided at Closing and on file with Indenture Trustee and
Stroock & Stroock & Xxxxx LLP]
1
EXHIBIT A
TO THE LOAN SALE AGREEMENT
XXXX OF SALE
For $_______ received, in accordance with the Loan Sale Agreement (the
"Loan Sale Agreement") dated as of April 1, 2000, among USA Group Secondary
Market Services, Inc., as seller (the "Seller"), SMS Student Loan Trust 2000-B
(the "Trust"), Bank One, National Association, as trustee for the Seller ("Bank
One") and Bank One, National Association, not in its individual capacity but
solely as Eligible Lender Trustee (the "Eligible Lender Trustee") the Seller
(and, with respect to legal title to the Initial Financed Student Loans, Bank
One as trustee on behalf of the Seller) does hereby sell, assign, transfer and
otherwise convey unto the Issuer and, with respect to legal title, 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 net of interest
accrued prior to the Cutoff Date that is not to be capitalized, (iii) all funds
on deposit from time to time in the Trust Accounts, including the Reserve
Account Initial Deposit and the Collection Account Closing Date Deposit and the
Prefunding Account Closing Date Deposit, and in all investments and proceeds
thereof (including all income thereon) and (iv) all proceeds of any and all of
the foregoing (including but not limited to proceeds derived from the voluntary
or involuntary conversion of any of the Initial Financed Student Loans into cash
or other liquidated property, such as proceeds from the applicable Guarantee
Agreement). The foregoing sale does not constitute and is not intended to result
in any assumption by the Eligible Lender Trustee or the Trust of any obligation
of the Seller or Bank One 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 Administration Agreement, dated as of
April 1, 2000, among SMS Student Loan Trust 2000-B, as Issuer, USA Group
Secondary Market Services, Inc., as
1
Administrator, and Bankers Trust Company, 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 April 1, 2000.
USA GROUP SECONDARY MARKET SERVICES, INC.,
as Seller
By:_________________________________
Name:
Title:
BANK ONE, NATIONAL ASSOCIATION, as trustee
for USA Group Secondary Market Services,
Inc.
By:_________________________________
Name:
Title:
2
EXHIBIT B
TO THE
LOAN SALE AGREEMENT
TRANSFER AGREEMENT
TRANSFER No. _____ Of [PREFUNDED] NEW] [SERIAL] LOANS dated as of
______________, _____, among SMS STUDENT LOAN TRUST 2000-B, a Delaware trust
(the "Issuer"), USA GROUP SECONDARY MARKET SERVICES, INC., as seller (the
"Seller"), BANK ONE, NATIONAL ASSOCIATION ("Bank One"), as trustee for USA Group
Secondary Market Services, Inc., and BANK ONE, NATIONAL ASSOCIATION, 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, Bank One and the Eligible Lender
Trustee are parties to the Loan Sale Agreement dated as of April 1, 2000 (as
amended or supplemented, the "Loan Sale Agreement"); and
WHEREAS the Seller, as depositor, and the Eligible Lender Trustee
are parties to the Trust Agreement dated as of April 1, 2000 (as amended or
supplemented, the "Trust Agreement"); and
WHEREAS pursuant to the Loan Sale Agreement, the Seller wishes to
convey the [Prefunded Loans] [New] [Serial] Loans referred to in Section 2 (the
"Additional Student Loans") to the Eligible Lender Trustee on behalf of the
Issuer; and
WHEREAS in order to comply with the requirements of the Higher
Education Act, legal title to the Seller's student loan portfolio is vested in
Bank One, as trustee on behalf of the Seller as the sole beneficiary; 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 Administration Agreement, dated as of April 1, 2000, among the
Issuer, the Seller, as Administrator, and Bankers Trust Company, as Indenture
Trustee, which also contains rules of construction and usage that shall be
applicable herein.
1
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,
________________, _______.
2. Schedule of Financed Student Loans. Attached hereto as Schedule A
is a supplement to Schedule A to the Loan Sale Agreement listing the Additional
Student Loans to be conveyed on the Transfer Date to the Eligible Lender Trustee
on behalf of the Issuer pursuant to this Agreement.
3. Conveyance of Additional Student Loans. In consideration of
Issuer's delivery to or upon the order of the Seller of $__________, for
Additional Student Loans during the Revolving Period, such amount being the Loan
Purchase Amounts of the Additional Student Loans and such amount to be paid from
amounts on deposit in the Prefunding Account or the Collateral Reinvestment
Account subject to the provisions of Section 2.02(b) of the Loan Sale Agreement
and Section 2(f) and Section 2(k) of the Administration Agreement and after the
Revolving Period such amount being the sum of (i) the Purchase Collateral
Balance ($[ ]) 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
Seller subject to Section 2.02(c) of the Loan Sale Agreement and Section 2(d) of
the Administration Agreement) and (ii) except with respect to the exchange of
Student Loans, 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 2.02(c) of
the Loan Sale Agreement and Section 2(e) of the Administration Agreement), the
Seller (and, with respect to legal title to the Additional Student Loans, Bank
One as trustee on behalf of 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;
(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:
2
(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 and by Bank One in Section 4.01 of the
Loan Sale Agreement shall be true and correct as of the Transfer Date.
(b) Loan Sale Agreement Conditions. Each of the conditions set
forth in Section 2.02(d) (and, if Exchange Student Loans are to be applied
to the Purchase Collateral Balance of the Additional Student Loans,
Section 2.02(c) and, if the trustee for the Seller with respect to the
Additional Student Loans is other than Bank One, in Section 4.02) of the
Loan Sale Agreement shall have been satisfied.
(c) Delivery of Xxxx of Sale. The Seller and Bank One shall
have delivered a Xxxx of Sale substantially in the form of Annex A hereto.
(d) Additional Information. The Seller and Bank One shall have
delivered to the Issuer such information as was reasonably requested by
the Issuer (such reasonableness to be determined solely by the Seller) to
satisfy itself as to (i) the accuracy of the representations and
warranties set forth in Sections 3.01 and 4.01 of the Loan Sale Agreement
and (ii) the satisfaction of the conditions set forth in this Section 4.
(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 Eligible
Lender Trustee shall have delivered an Assignment substantially in the
form of Annex B hereto.
5. Ratification of Agreement. As supplemented by this Agreement, the
Loan Sale Agreement is in all respects ratified and confirmed and the Loan Sale
Agreement as so supplemented by this Agreement shall be read, taken and
construed as one and the same instrument.
6. Third-Party Beneficiaries. The Indenture Trustee is an express
third-party beneficiary and may enforce the provisions of this Agreement as if
it were a party hereto.
7. Counterparts. This Agreement may be executed in separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which together shall constitute but one and the same instrument.
8. Governing Law. This Agreement shall be construed in accordance
with the laws of the State of Indiana, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
shall be determined in accordance with such laws.
9. Headings. The section headings hereof have been inserted for
convenience of reference only and shall not be construed to affect the meaning,
construction or effect of this Agreement.
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.
SMS STUDENT LOAN TRUST 2000-B
By: BANK ONE, NATIONAL ASSOCIATION, not in its
individual capacity but solely as Eligible
Lender Trustee on behalf of the Trust
By: ____________________________________
Name:
Title:
BANK ONE, NATIONAL ASSOCIATION, not in its
individual capacity but solely as Eligible
Lender Trustee
By: ____________________________________
Name:
Title:
USA GROUP SECONDARY MARKET SERVICES, INC.,
Seller
By: ____________________________________
Name:
Title:
BANK ONE, NATIONAL ASSOCIATION, as trustee for
USA Group Secondary Market Services, Inc.
By: ____________________________________
Name:
Title:
4
Acknowledged and accepted as of the date first above written:
BANKERS TRUST COMPANY,
not in its individual
capacity but solely as
Indenture Trustee
By:_________________________________
Name:
Title:
5
SCHEDULE A
TO THE
TRANSFER AGREEMENT NO. ___
[List of Additional Student Loans
and their related Subsequent Cutoff Dates]
1
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 April 1, 2000, among USA Group Secondary
Market Services, Inc., as seller (the "Seller"), Bank One, National Association,
as trustee for the Seller ("Bank One"), SMS Student Loan Trust 2000-B (the
"Trust") and Bank One, National Association, not in its individual capacity but
solely as Eligible Lender Trustee (the "Eligible Lender Trustee") [and as
ratified by [name of eligible lender if other than Bank One with respect to the
Additional Student Loans] pursuant to Section 4.02 of the Loan Sale Agreement]
and the Transfer Agreement No. ____ dated as of ______, ______ (the "Transfer
Agreement") among the Seller, Bank One, the Trust and the Eligible Lender
Trustee, the Seller (and, with respect to legal title to the Additional Student
Loans, Bank One as trustee on behalf of the Seller) does hereby sell, assign,
transfer and otherwise convey unto the Issuer and, with respect to legal title,
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 or Bank One 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.
Capitalized terms used but not defined herein shall have the
meanings assigned to them in the Transfer Agreement.
1
IN WITNESS WHEREOF, the undersigned has caused this Xxxx of Sale to
be duly executed as of ________________, ______.
USA GROUP SECONDARY MARKET SERVICES, INC.,
as Seller
By: ____________________________________
Name:
Title:
BANK ONE, NATIONAL ASSOCIATION, as trustee for
USA Group Secondary Market Services, Inc.
By: ____________________________________
Name:
Title:
2
EXHIBIT C
TO THE LOAN SALE AGREEMENT
1. Characteristics of Financed Student Loans. Each Financed Student Loan
(A) was originated in the United States of America, its territories, its
possessions or other areas subject to its jurisdiction by an "eligible lender"
under the Higher Education Act in the ordinary course of its business to an
eligible borrower under applicable law and agreements and was fully and properly
executed by the parties thereto, (B) was acquired or originated by the Seller in
the ordinary course of its business, (C) provides or, when the payment schedule
with respect thereto is determined, will provide for payments on a periodic
basis that fully amortizes the principal amount of such Financed Student Loan by
its maturity, as such maturity may be modified in accordance with any applicable
deferral or forbearance periods granted in accordance with applicable laws and
restrictions, including those of the Higher Education Act or the applicable
Guarantee Agreement, and yield interest at the rate applicable thereto, and (D)
provides that the rights with respect thereto are assignable by the lender
thereunder and its assignees without the consent of or notice to any person
other than as may be required by the Higher Education Act and such notice has
been or will be given. Each Financed Student Loan is guaranteed by an eligible
guarantor under the Higher Education Act and qualifies the holder thereof to
receive Interest Subsidy Payments (other than SLS Loans, unsubsidized Xxxxxxxx
Loans, and those Consolidation Loans for which the related loan application was
submitted prior to January 1, 1993) and Special Allowance Payments from the
Department and Guarantee Payments from the Guarantor and qualifies the Guarantor
to receive reinsurance payments thereon from the Department. If such Financed
Student Loan is a Prefunded Loan, New Loan or a Qualified Substitute Loan and
is, in either case, guaranteed by an Additional Guarantor, the aggregate
principal balance of all Financed Student Loans guaranteed by such Additional
Guarantor (measured as of the Subsequent Cutoff Date for such Financed Student
Loan) following the addition of such Financed Student Loan to the Trust, did not
exceed 5% of the principal balance of all Financed Student Loans as of such
date, and the aggregate principal balance of all Financed Student Loans
guaranteed by all Additional Guarantors measured as of such date, following such
addition, did not exceed 20% of the principal balance of all Financed Student
Loans as of such date. The principal balance of each Financed Student Loan is
not subject to change by reason of adjustments to the related Borrower's account
after the Cutoff Date relating to matters or events occurring prior to the
Cutoff Date.
2. Schedule of Financed Student Loans. The information set forth in
Schedule A to this Agreement is true and correct in all material respects as of
the opening of business on the Cutoff Date with respect to the Initial Financial
Student Loans and the Subsequent Cutoff Date, with respect to the Prefunded
Loans. With respect to any Consolidation Loan originated by the Issuer or any
Prefunded Loan, New Loan, Serial Loan or Qualified Substitute Student Loan
conveyed to the Issuer after the Closing Date, information for each category set
forth in Schedule A has been provided with respect to such loan and such
information is true and correct in all material respects, as of the date
1
of origination, in the case of such Consolidation Loan, and as of the opening of
business on the applicable Subsequent Cutoff Date in the case of a Prefunded
Loan, New Loan, Serial Loan or Qualified Substitute Student Loan. With respect
to any Consolidation Loan, the principal balance of which has been increased by
the principal balance of any related Add-on Consolidation Loan, information for
each category set forth in Schedule A has been provided with respect to such
Add-on Consolidation Loan and such information is true and correct in all
material respects as of the related Add-on Consolidation Loan Funding Date. No
selection procedures believed to be adverse to the Noteholders were utilized in
selecting any Financed Student Loan. The computer tape regarding the Initial
Financed Student Loans made available to the Issuer and its assigns is true and
correct in all respects as of the Cutoff Date, and, after the Closing Date, any
computer tape regarding any Consolidation Loan, Prefunded Loan, New Loan, Serial
Loan or Qualified Substitute Student Loan made available to the Issuer and its
assigns is true and correct in all respects as of the date of origination, in
the case of a Consolidation Loan originated by the Trust, as of the applicable
Add-on Consolidation Loan Funding Date, in the case of a Consolidation Loan the
principal balance of which is increased by the principal balance of any related
Add-on Consolidation Loan, and as of the applicable Subsequent Cutoff Date, in
the case of a Prefunded Loan, New Loan, Serial Loan or a Qualified Substitute
Student Loan.
3. Compliance with Law. Each Financed Student Loan complied at the time of
origination and at the time of the execution of this Agreement or the applicable
Transfer Agreement or Assignment, as the case may be, at the time of origination
in the case of a Consolidation Loan originated by the Issuer and as of the
applicable Add-on Consolidation Loan Funding Date in the case of a Consolidation
Loan the principal balance of which is increased by the principal balance of any
Add-on Consolidation Loan, in all material respects with all applicable
requirements of local, state, and federal laws, rules and regulations which
govern the making of such Financed Student Loan including the requirements of
the applicable Guarantee Agreement.
4. Binding Obligation. The terms and conditions of each Financed Student
Loan are consistent with the application of the Borrower, all signatures for the
Financed Student Loans are genuine and the Borrower Note evidencing each
Financed Student Loan has been duly executed and delivered and constitutes the
legal, valid, and binding obligation of the Borrower enforceable in accordance
with its terms.
5. No Defenses. No right of rescission, setoff, counterclaim, or defense
has been asserted or threatened or exists with respect to any Financed Student
Loan.
6. No Default. No Financed Student Loan has a payment that is more than
270 days overdue as of the Cutoff Date or more than 180 days overdue as of the
applicable Subsequent Cutoff Date, as the case may be, and, except as permitted
in this paragraph, no default, breach, violation or event permitting
acceleration under the terms of any Financed Student Loan has occurred; and,
except for payment defaults continuing for a period of not more than 270 days or
180 days, as applicable, no continuing condition
2
that with notice or the lapse of time or both would constitute a default,
breach, violation or event permitting acceleration under the terms of any
Financed Student Loan has arisen; the Seller has not waived and shall not waive
any of the foregoing other than as permitted by the Basic Documents; and not
more than 20% of the Financed Student Loans shall be more than 30 days overdue.
7. Title. It is the intention of the Seller that the transfer and
assignment herein contemplated constitute a sale of the Financed Student Loans
from the Seller to the Eligible Lender Trustee on behalf of the Issuer and that
the beneficial interest in and title to such Financed Student Loans not be part
of the estate of the Seller in the event of the appointment of a receiver with
respect to the Seller. Except in the case of Consolidation Loans originated by
the Issuer, immediately prior to the transfer and sale of each Financed Student
Loan to the 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 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.
8. All Filings Made. All filings (including UCC filings) necessary in any
jurisdiction to give the Eligible Lender Trustee on behalf of the Issuer a first
perfected ownership interest in the Financed Student Loans, and to give the
Indenture Trustee a first perfected security interest therein, have been made.
9. No Bankruptcies. No Borrower of any Financed Student Loan as of the
Cutoff Date or the applicable Subsequent Cutoff Date (in the case of Qualified
Substitute Student Loans, Prefunded Loans, New Loans or Serial Loans), as of the
date of origination (in the case of a Consolidation Loan originated by the
Issuer) or as of the applicable Add-on Consolidation Loan Funding Date (in the
case of a Consolidation Loan the principal balance of which is increased by the
principal balance of any related Add-on Consolidation Loan) was noted in the
related Student Loan File as being currently involved in a bankruptcy
proceeding.
10. Lawful Assignment. No Financed Student Loan has been originated in, or
is subject to the laws of, any jurisdiction under which the origination, sale,
transfer and assignment of such Financed Student Loan or any Financed Student
Loan under this Agreement, each Transfer Agreement or the Indenture is unlawful,
void or voidable.
11. One Original. There is only one original executed promissory note
evidencing each Financed Student Loan.
12. U.S. Obligors. Less than 5% of the Financed Student Loans are due from
Persons not having a mailing address in the United States of America.
3
13. Accounts. Each Financed Student Loan may be pledged or transferred as
an "account" as defined in the UCC.
14. Interest Accruing. Each Financed Student Loan is accruing interest
(whether or not such interest is being paid currently, by the Borrower or by the
Department, or is being capitalized) at the maximum interest rate permitted by
the Higher Education Act and qualifies for Special Allowance Payments, except as
expressly permitted by the Basic Documents.
15. Seller's Representations. The representations and warranties of the
Seller contained in Section 4.01 are true and correct.
4
EXHIBIT D
TO THE LOAN SALE AGREEMENT
1. Organization and Good Standing. The Seller has been organized and is
existing under the General Corporation Law 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 Seller or its obligations hereunder) 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 (with Bank One
conveying legal title as trustee on behalf of the Seller) 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.
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, the certificate of incorporation or by-laws of the
Seller, or any indenture, agreement or other instrument to which the Seller is a
party or by which it shall be bound; nor result in the creation or imposition of
any Lien upon any of its properties pursuant to the terms of any such indenture,
agreement or other instrument (other than pursuant to the Basic Documents); nor
violate any law or, to the knowledge of the Seller, any order, rule or
regulation applicable to the Seller of any court or of any Federal or state
regulatory body, administrative agency or other governmental instrumentality
having jurisdiction over the Seller or its properties. 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 Guarantor.
1
5. No Proceedings. There is no action, suit, claim, investigation, or
proceeding, in any such case whether pending or to the knowledge of the Seller,
threatened against the Seller before any court, governmental agency, or
arbitrator (i) asserting the invalidity of this Agreement, 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 Seller 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 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.
2
EXHIBIT E
TO THE LOAN SALE AGREEMENT
1. Organization and Good Standing. Bank One 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 Bank One. Bank One 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
Bank One and, assuming authorization, execution, and delivery by the other
parties thereto, this Agreement constitutes a valid obligation of Bank One
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 Bank One with this Agreement does not in
any material respect violate any law or regulation by which Bank One or its
assets are bound, or any writ, order, judgment, or decree of any court or
government instrumentality or arbitrator in which Bank One is named, or the
charter or by-laws of Bank One or any indenture, contract, or agreement to which
Bank One 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 Bank One, threatened
against Bank One before any court, governmental agency, or arbitrator which, if
decided adversely to Bank One, 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 Bank One liable
to any material penalties or will not result in the transactions contemplated by
this Agreement being subject to challenge) is required.
3
EXHIBIT F
TO THE LOAN SALE AGREEMENT
ASSIGNMENT
For value received, in accordance with the Loan Sale Agreement (the
"Loan Sale Agreement") dated as of April 1, 2000, among USA Group Secondary
Market Services, Inc., as seller (the "Seller"), SMS Student Loan Trust 2000-B
(the "Trust"), Bank One, National Association, as trustee for the Seller ("Bank
One"), and Bank One, National Association, not in its individual capacity but
solely as Eligible Lender Trustee (the "Eligible Lender Trustee"), the Seller
(and, with respect to legal title to the Initial Financed Student Loans, Bank
One as trustee on behalf of 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 Qualified Substitute
Student Loan(s) indicated in Schedule A hereto (the "Additional Student Loans")
and all obligations of the Obligors thereunder, together with all documents, the
related Student Loan Files and all rights and privileges related thereto, (ii)
all payments and/or collections received thereunder on and after the date hereof
and (iii) all proceeds of any and all of the foregoing (including but not
limited to proceeds derived from the voluntary or involuntary conversion of any
of the Additional Student Loans into cash or other liquidated property, such as
proceeds from the applicable Guarantee Agreement). The foregoing sale does not
constitute and is not intended to result in any assumption by the Eligible
Lender Trustee or the Trust of any obligation of the Seller or Bank One 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 endorse the promissory notes evidencing each Additional Student Loan 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 is to be governed by the Loan Sale Agreement.
Capitalized terms used but not defined herein shall have the meaning
assigned to them in Appendix A to the Administration Agreement, dated as of
April 1, 2000, among the Trust, as Issuer, the Seller, as Administrator, and
Bankers Trust Company, as Indenture Trustee, which also contains rules as to
usage that shall be applicable herein.
4
IN WITNESS WHEREOF, the undersigned has caused this Agreement to be
duly executed as of ___________.
USA GROUP SECONDARY MARKET SERVICES, INC.,
as Seller
By: ____________________________________
Name:
Title:
BANK ONE, NATIONAL ASSOCIATION, as trustee for
USA Group Secondary Market Services, Inc.
By: ____________________________________
Name:
Title:
5
