Exhibit 99.1
LOAN PURCHASE AGREEMENT
This Loan Purchase Agreement (the "Loan Purchase Agreement") made and
entered into as of this 1st day of May, 2002, by and between Nelnet Student Loan
Trust 2002-1, a Delaware business trust (the "Purchaser") acting by and through
Zions First National Bank, not individually but as indenture trustee (the
"Trustee") under the Financing Agreement and the Eligible Lender Trust Agreement
(as defined herein) and Nelnet Student Loan Funding, LLC, a limited liability
company organized and existing under the laws of the State of Delaware and
having its principal offices at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, in the city of
Lincoln, County of Lancaster, State of Nebraska (the "Seller").
W I T N E S S E T H :
WHEREAS, the Purchaser, by and through the Trustee, desires to purchase
from the Seller certain FFELP Loans (as defined below) to assist students in
obtaining a post-secondary education, title to which will be held by the Trustee
pursuant to the Financing Agreement and the Eligible Lender Trust Agreement, and
the Seller desires to sell certain FFELP Loans to the Purchaser, title to which
will be held by and through the Trustee, in accordance with the terms and
conditions of this Loan Purchase Agreement.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties agree as follows:
Section 1. DEFINITIONS.
"BORROWER" means the student or parent obligor under an Eligible Loan.
"CERTIFICATE OF INSURANCE" means a certificate of federal loan insurance
issued with respect to an Eligible Loan by the Secretary of Education pursuant
to the provisions of the Higher Education Act.
"CONTRACT OF INSURANCE" means an agreement between the Secretary of
Education and either the Trustee or the Seller providing for the insurance by
the Secretary of Education of the principal of and accrued interest on a FFELP
Loan to the maximum extent permitted under the Higher Education Act.
"ELIGIBLE LENDER TRUST AGREEMENT" means the Eligible Lender Trust
Agreement dated as of May 1, 2002, between the Trustee and the Purchaser, as the
same may be amended, modified, supplemented, restated or otherwise altered.
"ELIGIBLE LOAN" means a FFELP Loan authorized to be acquired by the
Purchaser by and through the Trustee which (i) is either Insured or Guaranteed;
(ii) if such FFELP Loan is a subsidized ▇▇▇▇▇▇▇▇ loan, qualifies the holder
thereof to receive Interest Subsidy Payments and Special Allowance Payments; if
such FFELP Loan is a consolidation loan authorized under Section 428C of the
Higher Education Act, qualifies the holder thereof to receive Interest Subsidy
Payments and Special Allowance Payments to the extent applicable; and if such
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FFELP Loan is a PLUS loan authorized under Section 428B of the Higher Education
Act, a SLS loan authorized under Section 428A of the Higher Education Act, or an
unsubsidized ▇▇▇▇▇▇▇▇ loan authorized under Section 428H of the Higher Education
Act, such FFELP Loan qualifies the holder thereof to receive Special Allowance
Payments; (iii) complies with each representation and warranty with respect
thereto contained herein; and (iv) meets the other criteria set forth in the
Loan Purchase Regulations and is eligible for purchase under the terms of the
Financing Agreement.
"FEDERAL CONTRACTS" means all agreements between a Guarantee Agency and
the Secretary of Education providing for the payment by the Secretary of
Education of amounts authorized to be paid pursuant to the Higher Education Act,
including, but not limited to, reimbursement of amounts paid or payable upon
defaulted Eligible Loans and other student loans insured or guaranteed by any
Guarantee Agency and federal interest subsidy payments and Special Allowance
Payments, if applicable, to holders of qualifying student loans guaranteed by
any Guarantee Agency.
"FFELP LOANS" means those specific loans acquired by the Trustee, on
behalf of the Purchaser, from the Seller pursuant to this Loan Purchase
Agreement, inclusive of the promissory notes evidencing such loans and the
related documentation in connection with each thereof, which were originated
pursuant to the Federal Family Education Loan Program and the Higher Education
Act.
"FINANCING AGREEMENT" means the Indenture of Trust, dated as of May 1,
2002, by and between the Trustee and Nelnet Student Loan Trust 2002-1, as the
same may be amended, modified, supplemented, restated or otherwise altered,
which is utilized to finance the Purchaser's purchase of the FFELP Loans under
this Loan Purchase Agreement.
"GUARANTEE" or "GUARANTEED" means, with respect to a FFELP Loan, the
guarantee by the Guarantee Agency, in accordance with the terms and conditions
of the Guarantee Agreement, of the principal of and accrued interest on the
FFELP Loan to the maximum extent permitted under the Higher Education Act on
FFELP Loans which have been originated, held and serviced in full compliance
with the Higher Education Act, and the coverage of the FFELP Loan by the Federal
Contracts providing, among other things, for reimbursement to the Guarantee
Agency for losses incurred by it on defaulted Eligible Loans guaranteed by it to
the extent of the maximum reimbursement allowed by the Federal Contracts.
"GUARANTEE AGENCY" means a state agency or a private nonprofit
institution or organization which administers a Guarantee Program within a State
or any successors and assignees thereof administering the Guarantee Program
which has entered into a Guarantee Agreement with the Trustee on behalf of the
Purchaser.
"GUARANTEE AGREEMENT" means the Federal Contracts, an agreement between
a Guarantee Agency and either the Trustee or the Seller providing for the
Guarantee by such Guarantee Agency of the principal of and accrued interest on
Eligible Loans to Borrowers, made or acquired by the Trustee or the Seller from
time to time, and any other similar guarantee or agreement issued by a Guarantee
Agency to the Purchaser or the Trustee pertaining to Financed Eligible Loans.
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"GUARANTEED LOANS" means FFELP Loans that are Guaranteed.
"GUARANTEE PROGRAM" means a Guarantee Agency's student loan guaranty
program pursuant to which such Guarantee Agency guarantees or insures student
loans.
"HIGHER EDUCATION ACT" shall mean Title IV, Parts B, F and G, of the
Higher Education Act of 1965, as amended or supplemented and in effect from time
to time, or any successor enactment thereto, and all regulations promulgated
thereunder and any directives issued by the Secretary of Education.
"INSURANCE" or "INSURED" or "INSURING" means, with respect to a FFELP
Loan, the insuring by the Secretary of Education (as evidenced by a Certificate
of Insurance or other document or certification issued under the provisions of
the Higher Education Act) under the Higher Education Act of the principal of and
accrued interest on such FFELP Loan to the maximum extent permitted under the
Higher Education Act for FFELP Loans originated, held and serviced in full
compliance with the Higher Education Act.
"INSURED LOANS" means FFELP Loans which are Insured.
"INTEREST SUBSIDY PAYMENTS" means interest subsidy payments received
from the Secretary of Education pursuant to Section 428 of the Higher Education
Act or similar payments authorized by federal law or regulation.
"LOAN PURCHASE AGREEMENT" means this Loan Purchase Agreement including
all exhibits and schedules attached hereto, and any addenda, supplements or
amendments hereto.
"LOAN PURCHASE DATE" means the date as described in Section 2(b) hereof.
"LOAN PURCHASE REGULATIONS" means the rules and regulations of the
Purchaser, as may be adopted by the Purchaser from time to time (with the
consent of any persons required under the terms of the Financing Agreement),
which pertain to the Program, which shall incorporate all requirements specified
in any indentures or other financing arrangements to which the Purchaser is
subject.
"LOAN TRANSFER SCHEDULE" means a written schedule on a form provided by
the Purchaser or its servicing agent identifying the Borrower on the FFELP Loans
to be purchased hereunder.
"MASTER NOTE" means a Master Promissory Note in the form mandated by
Section 432(m)(1)(D) of the Higher Education Act, as added by Pub. L.
105-244,ss. 427,112 Stat. 1702 (1998) as amended by Public Law No: 106-554
(enacted December 21, 2000) and as codified at 20 ▇.▇.▇.▇▇. 1082(m)(1).
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"MPN LOAN" means a FFELP Loan evidenced by a Master Note.
"PROGRAM" means the Purchaser's Eligible Loan acquisition program under
which the Trustee will acquire Eligible Loans to assist students in obtaining a
post-secondary education.
"PURCHASER" means Nelnet Student Loan Trust 2002-1, a Delaware business
trust.
"SECRETARY OF EDUCATION" means the Commissioner of Education and the
Secretary of the United States Department of Education (who succeeded to the
functions of the Commissioner of Education pursuant to the Department of
Education Organization Act), or any officer, board, body, commission or agency
succeeding to the functions thereof under the Higher Education Act.
"SELLER" means Nelnet Student Loan Funding, LLC, a Delaware limited
liability company, which is performing this Loan Purchase Agreement by and
through its eligible lender trustee which is an "eligible lender" under the
criteria established by the Higher Education Act that has received an eligible
lender designation by the Secretary of Education with respect to Insured Loans
or from a Guarantee Agency with respect to Guaranteed Loans, identified in the
introduction to this Loan Purchase Agreement, which is selling FFELP Loans to
the Purchaser hereunder.
"SPECIAL ALLOWANCE PAYMENTS" means special allowance payments authorized
to be made by the Secretary of Education pursuant to Section 438 of the Higher
Education Act or similar allowances authorized from time to time by federal law
or regulation.
"TRUSTEE" means Zions First National Bank acting in its capacity as
indenture trustee under the Financing Agreement and the Eligible Lender Trust
Agreement, and not in its individual capacity.
Section 2. PURCHASE OF FFELP LOANS.
(a) Subject to the terms and conditions and in reliance upon the
representations, warranties and agreements set forth herein, the Seller
agrees to sell to the Trustee, acting on behalf of the Purchaser, and
the Purchaser, acting by and through the Trustee under the Financing
Agreement and the Eligible Lender Trust Agreement on behalf of the
Purchaser, agrees to buy from the Seller, a portfolio of FFELP Loans
which are Eligible Loans in the aggregate unpaid principal amount as set
forth in the Loan Transfer Addendum in the form set forth in Exhibit A
hereto. Additional portfolios of FFELP Loans may be purchased from the
Seller hereunder by the Purchaser by and through the Trustee from time
to time in the future, if the parties hereto execute and deliver a
subsequent Loan Transfer Addendum for each such purchase of a portfolio
in the form set forth in Exhibit A hereto, reflecting the aggregate
unpaid principal balance of Eligible Loans contained in such portfolio
and the Loan Purchase Date, and if the Seller executes and delivers to
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the Purchaser all documents required under Section 4 hereof as of the
applicable Loan Purchase Date. Any subsequent purchase of an additional
portfolio of FFELP Loans shall be governed in all respects by this Loan
Purchase Agreement together with the Loan Transfer Addendum pertaining
to such portfolio. The Seller shall deliver a Loan Transfer Schedule to
the Purchaser, not less than thirty (30) days prior to the applicable
Loan Purchase Date. Consummation of the sale of each FFELP Loan shall
require execution and delivery to the Purchaser of the Seller's Closing
Certificate in the form of Exhibit B hereto (and delivery of the
documents described in Exhibit B hereto), the blanket endorsement and
▇▇▇▇ of sale as well as execution and delivery by the Seller in the
forms set forth in Exhibits C and D hereto, respectively. It is the
intention of the Seller that the transfer from the Seller to the Trustee
on behalf of the Purchaser constitutes a true sale of the FFELP Loans
hereunder and that neither the interest in nor title to the FFELP Loans
shall become or be deemed property of the Seller for any purpose under
applicable state or federal law.
(b) Delivery and payment for the FFELP Loans shall take place at
a location and on a date (the "Loan Purchase Date") to be specified by
the Purchaser. The applicable Loan Purchase Date shall not be later than
the date set forth in the Loan Transfer Addendum pertaining to such
FFELP Loans.
(c) Subject to the terms and conditions of this Loan Purchase
Agreement, the Purchaser agrees to purchase the FFELP Loans by and
through the Trustee at a price equal to 100% of the outstanding unpaid
principal amount thereof on the Loan Purchase Date with proceeds from
the obligations issued pursuant to the Financing Agreement, or such
other amount agreed upon and specified in the Loan Transfer Addendum as
set forth in Exhibit A. The Seller shall be responsible for reporting to
the Secretary of Education and, if required by the provisions of the
Higher Education Act, offsetting against Interest Subsidy Payments and
Special Allowance Payments made to the Seller by the Secretary of
Education the entire amount of any origination fee which is authorized
to be charged by the Higher Education Act with respect to the FFELP
Loans sold hereunder. Additionally, the Seller shall, as a condition to
the purchase by the Purchaser of any FFELP Loan, be required to pay to
the Purchaser on the Loan Purchase Date the amount of any such
origination fee which has not at that time been used to offset such
Special Allowance Payments or Interest Subsidy Payments, to the extent
that the Special Allowance Payments or Interest Subsidy Payments
received by the Trustee in connection with such FFELP Loans shall be
affected. Seller shall continue due diligence servicing in compliance
with the Higher Education Act, at Seller's cost, up to the applicable
Loan Purchase Date; thereafter, servicing shall be paid for by, and
shall be the responsibility of, the Purchaser.
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(d) During the Pre-Funding Period (as defined in the Financing
Agreement), and subject to the terms and conditions of this Loan
Purchase Agreement, Seller shall sell to the Purchaser, by and through
the Trustee, all Eligible Loans made to the same Borrower(s) which are
held by or on behalf of Seller (serial loans).
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(e) If Seller originates or purchases a FFELP Loan which is a
consolidation loan under Section 428C of the Higher Education Act, and
the proceeds of such consolidation loan are used to repay the principal
and interest due on a FFELP Loan sold by Seller to the Purchaser
hereunder, then Seller shall rebate the premiums paid by the Purchaser
to Seller in connection with the purchase of said FFELP Loan by paying
to the Purchaser an amount equal to the same percentage of the principal
balance of said FFELP Loan then outstanding as was originally paid by
the Purchaser therefor.
Section 3. REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS OF THE
SELLER.
(a) With respect to FFELP Loans sold on a Loan Purchase Date, the
Seller hereby makes the representations and warranties set forth in
Exhibit E hereto as of such Loan Purchase Date. Each representation,
warranty, certification, covenant and agreement contained in this Loan
Purchase Agreement shall survive the applicable Loan Purchase Date.
(b) The Seller shall not organize under the law of any
jurisdiction other than the State under which it is organized as of the
Closing Date (whether changing its jurisdiction of organization or
organizing under an additional jurisdiction) without giving 30 days
prior written notice of such action to the Purchaser. Before effecting
such change, the Seller shall prepare and file in the appropriate filing
office any financing statements or other statements necessary to
continue the perfection of the Purchaser's interests in the FFELP Loans.
Section 4. CONDITIONS OF PURCHASE. The Purchaser's obligation to
purchase and pay for the FFELP Loans hereunder by and through the Trustee as of
any applicable Loan Purchase Date shall be subject to each of the following
conditions precedent:
(a) All representations, warranties and statements by or on
behalf of the Seller contained in this Loan Purchase Agreement shall be
true on the applicable Loan Purchase Date.
(b) Any notification to or approval by the Secretary of Education
or a Guarantee Agency required by the Higher Education Act or a
Guarantee Agreement as a condition to the assignment of the FFELP Loans
shall have been made or received and evidence thereof delivered to the
Purchaser.
(c) The entire interest of the Seller in each FFELP Loan shall
have been duly assigned by endorsement in the form set forth in Exhibit
C hereto, such endorsement to be without recourse except as provided in
Section 6 hereof.
(d) Physical custody and possession of the FFELP Loans (including
all information and documentation which is described in the Seller's
Closing Certificate as specified in Exhibit B hereto) shall be
transferred in the manner directed by the Purchaser.
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(e) The Purchaser shall receive an opinion of the Seller's
counsel, dated as of the first Loan Purchase Date covering such first
sale and any other sale of FFELP Loans, in form and substance
satisfactory to the Purchaser and the Trustee to the effect that (i)
this Loan Purchase Agreement has been duly authorized, executed and
delivered by the Seller and constitutes the legal, valid, binding and
enforceable obligation of the Seller, (ii) the blanket endorsement and
▇▇▇▇ of sale required by this Loan Purchase Agreement have been duly
authorized, executed and delivered by the Seller, (iii) with respect to
all Insured Loans being acquired, the applicable Contract of Insurance
has been duly authorized, executed and delivered by the Seller, (iv)
with respect to all Guaranteed Loans being acquired, the applicable
Guarantee Agreement has been duly authorized, executed and delivered by
the Seller, and (v) assuming the due execution and delivery thereof,
each FFELP Loan constitutes the legal, valid and binding obligation of
the Borrower (and of each endorser, if any) thereof, enforceable in
accordance with its terms, (vi) to the knowledge of the Seller's
counsel, the execution and delivery of this Loan Purchase Agreement, the
consummation of the transactions therein contemplated and compliance
with the terms, conditions and provisions of this Loan Purchase
Agreement do not and will not conflict with or result in a breach of any
of the terms, conditions or provisions of the charter, articles or
bylaws of the Seller or any agreement or instrument to which the Seller
is a party or by which it is bound or constitute a default thereunder,
(vii) to the knowledge of the Seller's counsel, the Seller is not a
party to or bound by any agreement or instrument or subject to any
charter or other corporation restriction or judgment, order, writ,
injunction, decree, law, rule or regulation which may materially and
adversely affect the ability of the Seller to perform its obligations
under this Loan Purchase Agreement, (viii) no consent, approval or
authorization of any government or governmental body, including, without
limitation, the Federal Deposit Insurance Corporation ("FDIC"), the
Comptroller of the Currency, the Board of Governors of the Federal
Reserve System or any state bank regulatory agency, is required in
connection with the consummation of the transactions contemplated in
this Loan Purchase Agreement, (ix) this Loan Purchase Agreement shall
constitute a security agreement under Nebraska law and shall be
effective to create, in favor of the Purchaser, a perfected valid
security interest in the FFELP Loans subject to no prior liens, (x) if
the Purchaser and the Seller are affiliates, that if the Seller became a
debtor under the United States Bankruptcy Code, 11 U.S.C. ▇▇.▇▇. 101 et
seq., as amended (the "Bankruptcy Code"), (1) Section 541(a)(1) of the
Bankruptcy Code would not apply to deem the FFELP sold by the Seller to
the Purchaser and the proceeds therefrom as property of the bankruptcy
estate of the Seller and therefore (2) Section 362(a) of the bankruptcy
Code would not apply to stay payment to the Purchaser or its assignees,
(xi) if the Seller is the parent of the Purchaser, if the Seller became
a debtor under the Bankruptcy Code, a court would not disregard the
separate identity of the Purchaser so that the assets of the Seller
would be consolidated with and become a part of the Seller's bankruptcy
estate, and (xii) if the Seller is a bank or savings association the
deposits of which are insured by the FDIC (a "Bank") and the FDIC were
appointed as receiver or conservator of such Bank, a court would not
recharacterize the transfer and assignment of the FFELP Loans to the
Borrower as a pledge to secure a borrowing rather than a sale of the
FFELP Loans.
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(f) Delivery by the Seller to the Purchaser on or before the
applicable Loan Purchase Date of the following documentation: Seller's
Closing Certificate in the form of Exhibit B hereto; blanket endorsement
in the form of Exhibit C hereto; ▇▇▇▇ of sale in the form of Exhibit D
hereto; UCC-1 Financing Statements evidencing the transfer from the
Seller to the Trustee on behalf of the Purchaser, and UCC lien searches
sufficiently in advance of the Loan Purchase Date so as to permit review
thereof by the Purchaser to its satisfaction, if either or both are
requested by the Purchaser or a party to the Financing Agreement; and
UCC termination statements or releases, if any, to the extent necessary
to release any security interest granted by the Seller in any FFELP
Loan.
(g) Delivery by the Seller to the Purchaser, prior to the Loan
Purchase Date, of a fully executed and completed Loan Transfer Addendum
substantially in the form of Exhibit A hereto with respect to FFELP
Loans referred to in the ▇▇▇▇ of sale, and delivery of a Loan Transfer
Schedule as required in Section 2(a) hereof.
(h) Adequate funds are available to the Purchaser to finance the
purchase of FFELP Loans under this Loan Purchase Agreement.
(i) Delivery by the Seller of a closing certificate dated as of
the date of the first sale of FFELP Loans hereunder in form and
substance satisfactory to the Purchaser and Trustee and a certificate
dated as of the date of the first sale of FFELP Loans hereunder of the
certificates attached to the true sale/non-consolidation opinion and the
perfection opinion of ▇▇▇▇▇ ▇▇▇▇ LLP, each dated May 20, 2002.
Section 5. REJECTION OF FFELP LOANS.
(a) If (i) the Seller is unable to make or furnish the
representations and warranties required to be made or furnished by it
pursuant to this Loan Purchase Agreement as to a FFELP Loan or (ii) the
Purchaser determines that the Seller is unable to fulfill one or more
covenants or conditions of this Loan Purchase Agreement as to a FFELP
Loan, or (iii) the Purchaser, in its reasonable judgment, deems that a
FFELP Loan does not comply with the terms and conditions of this Loan
Purchase Agreement or is not being delivered in compliance with such
terms and conditions, or (iv) the Purchaser, in its reasonable judgment
deems that a FFELP Loan is for any reason unacceptable to it, then the
Purchaser, within thirty days of the Loan Purchase Date, may refuse to
accept and pay for such FFELP Loan (or any substitute FFELP Loan offered
by the Seller in lieu thereof).
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(b) If the Purchaser rejects a FFELP Loan, any such FFELP Loan shall be
returned to the Seller by registered mail (for repurchase pursuant to
Section 6 hereof if the student loan has previously been purchased by
the Purchaser), together with a letter identifying each returned FFELP
Loan and stating the basis for its return. The Purchaser shall cause any
FFELP Loan returned to the Seller which has been endorsed to the Trustee
to be endorsed by the Trustee to the Seller in the form set forth in
Exhibit F hereto.
The liability of the Purchaser in connection with the loss of or damage
to any FFELP Loan to be returned to the Seller is limited to such loss or damage
occurring as a result of its gross negligence or willful misconduct in handling
or safekeeping FFELP Loans.
Section 6. REPURCHASE OBLIGATION. If:
(i) any representation or warranty made or furnished by
the Seller in or pursuant to this Loan Purchase Agreement shall
prove to have been materially incorrect;
(ii) the Secretary of Education or a Guarantee Agency, as
the case may be, refuses to honor all or part of a claim filed
with respect to a FFELP Loan (including any claim for Interest
Subsidy Payments, Special Allowance Payments, Insurance,
reinsurance or Guarantee payments) on account of any circumstance
or event that occurred prior to the sale of such FFELP Loan to
the Purchaser by and through the Trustee;
(iii) on account of any circumstance or event that
occurred prior to the sale of a FFELP Loan to the Purchaser, by
and through the Trustee, a defense is asserted by a Borrower (or
endorser, if any) of the FFELP Loan with respect to Borrower's
obligation to pay all or any part of the FFELP Loan, and the
Purchaser, in good faith, believes that the facts reported, if
true, raise a reasonable doubt as to the legal enforceability of
such FFELP Loan;
(iv) a FFELP Loan is required to be repurchased pursuant
to subsection 5(b) hereof; or
(v) the instrument which Seller purports to be a FFELP
Loan is not, in fact, a FFELP Loan;
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then the Seller shall repurchase such FFELP Loan or purported FFELP Loan upon
the request of the Purchaser by paying to the Purchaser the then outstanding
principal balance of such FFELP Loan or purported FFELP Loan multiplied by the
percentage used to calculate the purchase price in the applicable Loan Transfer
Addendum (or such greater amount as may be necessary to make the Purchaser and
the Trustee whole in light of the purchase price originally paid by the
Purchaser for such loan), plus interest and applicable Special Allowance
Payments with respect to such FFELP Loan or purported FFELP Loan from the Loan
Purchase Date to and including the date of repurchase, plus any amounts owed to
the Secretary of Education with respect to the repurchased FFELP Loan or
purported FFELP Loan, plus any attorneys' fees, legal expenses, court costs,
servicing fees or other expenses incurred by the Purchaser and the Trustee in
connection with such FFELP Loan or purported FFELP Loan.
Section 7. NOTIFICATION TO BORROWERS. The servicing agent on behalf of
the Seller shall notify Borrowers under the FFELP Loans as required by the
Higher Education Act of the assignment and transfer to the Trustee of the
Seller's interest in such FFELP Loans and the Seller shall direct each Borrower
to make all payments thereon directly to the Purchaser or as it may otherwise
designate.
Section 8. OBLIGATIONS TO FORWARD PAYMENTS AND COMMUNICATIONS.
(a) The Seller shall promptly remit, or cause to be remitted, to
the Purchaser all funds received by the Seller after the applicable Loan
Purchase Date which constitute payments of principal or interest
(including Interest Subsidy Payments) or Special Allowance Payments
accrued after the applicable Loan Purchase Date with respect to any
FFELP Loan.
(b) The Seller shall immediately transmit to the Purchaser any
communication received by the Seller after the applicable Loan Purchase
Date with respect to a FFELP Loan or the Borrower under such a FFELP
Loan. Such communication shall include, but not be limited to, letters,
notices of death or disability, adjudication of bankruptcy and similar
documents and forms requesting deferment of repayment or loan
cancellations.
Section 9. PAYMENT OF EXPENSES AND TAXES. Each party to this Loan
Purchase Agreement shall pay its own expenses incurred in connection with the
preparation, execution and delivery of this Loan Purchase Agreement and the
transactions herein contemplated, including, but not limited to, the fees and
disbursements of counsel; provided, however, that Seller shall pay any transfer
or other taxes and recording or filing fees payable in connection with the sale
and purchase of the FFELP Loans.
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Section 10. INDEMNIFICATION. The Seller specifically acknowledges that
the Purchaser, in obtaining financing, will be making representations and
warranties regarding the FFELP Loans based in part on the accuracy of the
Seller's representations and warranties in this Loan Purchase Agreement. The
Seller agrees to indemnify and save the Trustee, the Purchaser and the parties
to the Financing Agreement (together with each of their respective successors,
assignees, officers, directors, agents and employees) harmless of, from and
against any and all loss, liability, cost, damage or expense, including
reasonable attorneys' fees and costs of litigation, incurred by reason of any
breach of the Seller's warranties, representations or covenants hereunder or any
false or misleading representations of the Seller or any failure to disclose any
matter which makes the warranties and representations herein misleading or any
inaccuracy in any information furnished by the Seller in connection herewith.
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Section 11. SPECIAL PROVISIONS RELATING TO MPN LOANS.
(a) The Seller hereby represents and warrants that the Seller is
transferring all of its right title and interest in the MPN Loans to the
Purchaser, that it has not assigned any interest in such MPN Loans
(other than security interests that have been released or ownership
interests that the Seller has reacquired) to any person other than the
Purchaser, and that no prior holder of the MPN Loans has assigned any
interest in such MPN Loans (other than security interests that have been
released or ownership interests that such prior holder has reacquired)
to any person other than a predecessor in title to the Seller. The
Seller hereby covenants that the Seller shall not attempt to transfer to
any other person any interest in any MPN Loan assigned hereunder.
(b) The Seller hereby authorizes the Purchaser to file a UCC-1
financing statement identifying the Seller as debtor and the Purchaser
as secured party and describing the MPN Loans sold pursuant to this Loan
Purchase Agreement. The preparation or filing of such UCC-1 financing
statement is solely for additional protection of the Purchaser's
interest in the MPN Loans and shall not be deemed to contradict the
express intent of the Seller and the Purchaser that the transfer of MPN
Loans under this Loan Purchase Agreement is an absolute assignment of
such MPN Loans and is not a transfer of such MPN Loans as security for a
debt.
Section 12. OTHER PROVISIONS.
(a) The Seller shall, at its expense, furnish to the Purchaser
such additional information concerning the Seller's student loan
portfolio as the Purchaser may reasonably request.
(b) The Seller shall, at its expense, execute all other documents
and take all other steps as may be requested by the Purchaser or the
Trustee from time to time to effect the sale hereunder of the FFELP
Loans.
(c) The provisions of this Loan Purchase Agreement cannot be
waived or modified unless such waiver or modification be in writing and
signed by the parties hereto. Inaction or failure to demand strict
performance shall not be deemed a waiver.
(d) This Loan Purchase Agreement shall be governed by the
laws of the State of Nebraska.
(e) All covenants and agreements herein contained shall extend to
and be obligatory upon all successors of the respective parties hereto.
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(f) This Loan Purchase Agreement may be simultaneously executed
in several counterparts, each of which shall be an original and all of
which shall constitute but one and the same instrument.
(g) If any provision of this Loan Purchase Agreement shall be
held, deemed to be or shall, in fact, be inoperative or unenforceable as
applied in any particular situation, such circumstances shall not have
the effect of rendering the provision in question inoperative or
unenforceable in any other situation or of rendering any other provision
or provisions herein contained invalid, inoperative or unenforceable to
any extent whatsoever. The invalidity of any one or more phrases,
sentences, clauses or paragraphs herein contained shall not affect the
remaining portions of this Loan Purchase Agreement or any part hereof.
(h) All notices, requests, demands or other instruments which may
or are required to be given by either party to the other shall be in
writing, and each shall be deemed to have been properly given when
served personally on an officer of the party to whom such notice is
given or upon expiration of a period of 48 hours from and after the
postmark thereof when mailed, postage prepaid, by registered or
certified mail, requesting return receipt, by overnight courier, or by
telecopy, addressed as follows:
If to the Purchaser:
Nelnet Student Loan Trust 2002-1
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to the Trustee at:
Zions First National Bank
Corporate Trust Division
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇ ▇▇▇▇ - VP & Trust Officer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Seller, addressed in the manner as set forth in the first
paragraph of this Loan Purchase Agreement.
Either party may change the address and name of the addressee to which
subsequent notices are to be sent to it by notice to the others given as
aforesaid, but any such notice of change, if sent by mail, shall not be
effective until the fifth day after it is mailed.
14
(i) This Loan Purchase Agreement may not be terminated by either
party hereto except in the manner and with the effect herein
specifically provided for.
(j) Time is of the essence in this Loan Purchase Agreement.
(k) This Loan Purchase Agreement shall not be assignable
by the Seller, in whole or in part.
(l) No remedy by the terms of this Loan Purchase Agreement
conferred upon or reserved to the Purchaser is intended to be exclusive
of any other remedy, but each and every such remedy shall be cumulative
and in addition to every other remedy given under this Loan Purchase
Agreement or existing at law or in equity (including, without
limitation, the right to such equitable relief by way of injunction) or
by statute on or after the date of this Loan Purchase Agreement.
(m) Acts to be taken by the Purchaser with respect to acquiring
and holding title to FFELP Loans hereunder shall be taken by the Trustee
as directed by the Purchaser, which qualifies as an "eligible lender"
trustee under the Higher Education Act, and all references herein to the
Purchaser shall incorporate by this reference the fact that the Trustee
will be acquiring and holding title to FFELP Loans on behalf of the
Purchaser, all as required under the Higher Education Act.
(n) The parties hereto acknowledge that the Trustee and other
parties to the Financing Agreement, shall be third party beneficiaries
of this Loan Purchase Agreement with the power and right to enforce the
provisions thereof, and the Trustee and any such credit providers may
become an assignee of the Purchaser. The foregoing creates a permissive
right on the part of such third party beneficiaries, and such third
party beneficiaries shall be under no duties or obligations hereunder.
(o) This Loan Purchase Agreement has been made and entered into
not only for the benefit of the Purchaser and Seller but also for the
benefit of the Trustee in connection with the financing of Eligible
Loans as defined in the Financing Agreement, and upon assignment by the
Purchaser to the Trustee, its provisions may be enforced not only by the
parties to this Loan Purchase Agreement but by the Trustee. The
foregoing creates a permissive right on behalf of the Trustee and the
Trustee shall not be under any duties or obligations hereunder.
15
This Loan Purchase Agreement shall inure to the benefit of the Trustee
and its successors and assigns. Without limiting the generality of the
foregoing, all representations, covenants and agreements in this Loan
Purchase Agreement which expressly confer rights upon the Trustee shall
be for the benefit of and run directly to, the Trustee, and the Trustee
shall be entitled to rely on and enforce such representations, covenants
and agreements to the same extent as if it were a party hereto. The
foregoing creates a permissive right on behalf of the Trustee, the
Trustee shall not be under any duties or obligations hereunder.
If there is an Event of Default (as defined in the Financing Agreement)
under the Financing Agreement and the Trustee forecloses on its security
interest on the Eligible Loans, then the Trustee shall assume all duties
and obligations of the Purchaser hereunder.
Section 13. SECURITY INTEREST. The parties to this Agreement intend that
the conveyance of the Seller's right, title and interest in and to the FFELP
Loans sold pursuant to this Agreement (the "Student Loans") shall constitute an
absolute sale, conveying good title free and clear of any liens, claims,
encumbrances or rights of others from the Seller to the Purchaser. The parties
to this Agreement intend that the arrangements with respect to the Student Loans
shall constitute a purchase and sale of such Student Loans and not a loan. In
the event, however, that it were determined by a court of competent jurisdiction
that the transactions evidenced by this Agreement shall constitute a loan and
not a purchase and sale, the party receiving notice of such determination shall
give notice of such determination to the other party and to the Trustee. This
Agreement constitutes a "security interest" under Article 9 of the applicable
Uniform Commercial Code (the "UCC") and the Seller hereby grants to the
Purchaser a first priority "security agreement" under Article 9 of the
applicable UCC in all of the Seller's right, title and interest, whether now
owned or hereafter acquired, in, to and under all accounts, general intangibles,
chattel paper, instruments, documents, goods, investment property, money,
deposit accounts, certificates of deposit, letters of credit, advices of credit
and other property consisting of, arising from or related to the following
collateral property ("Granted Property"):
(a) all Student Loans;
(b) all revenues and recoveries of principal from Student Loans,
including all borrower payments and reimbursements of principal and
accrued interest on default claims received from any Guarantor;
(c) any other revenues and recoveries of principal and interest
and other payments and reimbursements of principal and accrued interest
received with respect to any Student Loan and any other collection of
cash with respect to such Student Loan (including, but not limited to,
Interest Subsidy Payments, Special Allowance Payments, finance charges
and payments representing the repurchase of any Student Loan or rebate
of premium thereon pursuant to this Agreement) received or deemed to
have been received and all other cash collections, tax refunds and other
cash proceeds of the Pledged Collateral held in various funds and
accounts created under this Agreement;
16
(d) all other security interests or liens and property subject
thereto from time to time, if any, purporting to secure payment of such
Student Loans, whether pursuant to the contract related to such Student
Loans or otherwise;
(e) all documents, books, records and other information
(including, without limitation, computer programs, tapes, disks, punch
cards, data processing software and related property and rights)
maintained with respect to Student Loans otherwise in respect of the
Granted Property; and
(f) all proceeds of the foregoing (including, but not by way of
limitation, all cash proceeds, accounts, accounts receivable, notes,
drafts, acceptances, chattel paper, checks, deposit accounts, insurance
proceeds, condemnation awards, rights to payment of any and every kind,
and other forms of obligations and receivables or other liquidated
property which at any time constitute all or part or are included in the
proceeds of any of the foregoing property).
The Seller agrees that from time to time, at its expense, it will
properly execute and deliver all further instruments and documents (including,
without limitation, UCC-1 financing statements and custodian agreements with the
Servicer), and take all further action that the Purchaser may reasonably request
in order to perfect, protect or more fully evidence the Purchaser's interest in
the Granted Property or to enable the Purchaser to exercise or enforce any of
its rights hereunder.
Section 14. INFORMATION AND REPORTING. Upon the Purchaser's request,
Seller shall furnish to the Purchaser: (a) Seller's most recent audited
financial statement prepared in accordance with generally accepted accounting
principles and duly certified by nationally recognized independent certified
public accountants selected by Seller, as well as Seller's most recent unaudited
financial statement and balance sheet; (b) an updated audited financial
statement prepared in accordance with generally accepted accounting principles
and duly certified by nationally recognized independent certified public
accountants selected by Seller; and (c) such other financial information as the
Purchaser may reasonably request from time to time. Seller shall verify and
reconcile Eligible Loan disbursements and cancellations of Eligible Loans sold
hereunder, in such manner as the Purchaser may reasonably request from time to
time. Seller shall furnish to the Purchaser a certificate of good standing.
Section 15. LIMITATION OF LIABILITY OF DELAWARE TRUSTEE. Notwithstanding
anything contained herein to the contrary, this instrument has been executed by
Wilmington Trust Company, not in its individual capacity, but solely in its
capacity as Delaware Trustee, and in no event shall Wilmington Trust Company in
its individual capacity or any beneficial owner of the Purchaser have any
liability for the representations, warranties, covenants, agreements or other
obligations of the Purchaser hereunder, as to all of which recourse shall be had
solely to the assets of the Purchaser.
17
IN WITNESS WHEREOF, the parties have hereunto set their hands as of the
day and year first above written.
NELNET STUDENT LOAN TRUST 2002-1 NELNET STUDENT LOAN FUNDING, LLC
By: Wilmington Trust Company, not in its By: NELnet Student Loan Funding
individual capacity, but solely as Management Corporation, as
Delaware Trustee Manager and Special Member
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
----------------------- ----------------------------
Title: Assistant Vice President ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
--------------------------
President
18
EXHIBIT A TO LOAN PURCHASE AGREEMENT
LOAN TRANSFER ADDENDUM
This Loan Transfer Addendum (the "Addendum") is made and entered into as
of the ___ day of ___________, _____, by and between Nelnet Student Loan Trust
▇▇▇▇-▇ (▇▇▇ "▇▇▇▇▇▇▇▇▇") and _______________ (the "Seller").
WHEREAS, the parties hereto entered into that Loan Purchase Agreement
dated as of ________________, ______, (the "Loan Purchase Agreement"), and the
Seller wishes to sell a portfolio of Eligible Loans (as defined in the Loan
Purchase Agreement) to the Purchaser, pursuant to and in accordance with the
terms and conditions of the Loan Purchase Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants herein contained, the parties hereto agree as follows:
1. Definitions. All capitalized terms in this Addendum shall have
the same meanings given to them in the Loan Purchase Agreement,
unless otherwise specifically stated herein.
2. Purchase of Eligible Loans. Subject to the terms and conditions
of the Loan Purchase Agreement and in reliance upon the
representations, warranties and covenants as set forth in the
Loan Purchase Agreement, the Seller agrees to sell to the
Trustee, as trustee under the Financing Agreement and the
Eligible Lender Trust Agreement on behalf of the Purchaser, a
portfolio of Eligible Loans identified in the Loan Transfer
Schedule attached hereto, having an aggregate outstanding
principal balance of approximately $______ (the "Current
Purchase Portfolio").
3. Purchase Price. Subject to the terms and conditions of the Loan
Purchase Agreement, the Purchaser agrees to purchase the Eligible
Loans in the Current Purchase Portfolio at a purchase price equal
to ___% of the aggregate unpaid principal balance thereon plus
100% of the accrued and unpaid interest thereon, each as of the
Loan Purchase Date set forth in Section 4 hereof.
4. Loan Purchase Date. The Loan Purchase Date shall be no later
than -------------, -----.
5. Representations and Warranties. The Seller hereby reconfirms all
the representations and warranties set forth in the Loan
Purchase Agreement as of the Loan Purchase Date set forth in
Section 4 hereof.
19
6. Effect on Loan Purchase Agreement. This Addendum sets forth the
terms of purchase and sale solely with respect to the Current
Purchase Portfolio. This Addendum shall have no effect upon any
other sale or purchase of any Eligible Loans consummated or
contemplated prior to or after the Loan Purchase Date, and all
other terms, conditions and agreements contained in the Loan
Purchase Agreement shall remain in full force and effect. Prior
or subsequent purchases and sales of Eligible Loans shall each
be governed by a separate Loan Transfer Addendum.
7. Special Terms. [Reserved]
NAME OF SELLER: Nelnet Student Loan Trust 2002-1
-------
By: ______________________________ By: _______________________________
Title: ___________________________ Title: ____________________________
20
EXHIBIT B TO LOAN PURCHASE AGREEMENT
SELLER'S CLOSING CERTIFICATE
(DO NOT COMPLETE) (the "Seller") does hereby certify that all
representations, warranties and statements by or on behalf of the Seller
contained in a certain Loan Purchase Agreement dated ____________________,
________ (the "Agreement"), by and between the Seller and Nelnet Student Loan
Trust 2002-1 (the "Purchaser"), are true and correct on and as of the Loan
Purchase Date, without exception or qualification whatsoever;
FURTHERMORE, the Seller does hereby certify that the following
documents, where applicable to each FFELP Loan (as defined in the Agreement)
acquired under the Agreement, have heretofore been furnished to the Purchaser or
are simultaneously herewith delivered in accordance with the instructions of the
Purchaser, pursuant to subsection 4(d) of the Agreement:
Department of Education application or Guarantee Agency
application, as supplemented
Interim note(s) for each Loan that is not an MPN Loan Payout note(s) for each
Loan that is not an MPN Loan
Disclosure and Loan information statement
Certificate of Insurance and Contract of Insurance with
respect to each Insured Loan (or certified copy thereof)
Guarantee Agreement, Agreement for Participation in the
Guaranteed Loan Program and Notification of Loan Approval by the Guarantee
Agency with respect to each Guaranteed Loan (or certified copy thereof)
Any other documentation held by the Seller relating to
the history of such Eligible Loan
Secretary of Education and Guarantee Agency Loan
Transfer Statements
Uniform Commercial Code financing statement, if any, securing any interest in an
Eligible Loan to be Financed, and an executed termination statement related
thereto
Evidence of Loan disbursement
Any other document required to be submitted with a claim to the Guarantee
Agency.
IN WITNESS WHEREOF, the undersigned has caused this Certificate to be
executed and delivered by an officer hereunto duly authorized as of the Loan
Purchase Date, _____.
(DO NOT COMPLETE)
NAME OF SELLER
BY (DO NOT SIGN)
--- --- -----
TITLE (DO NOT SIGN)
--- --- -----
21
EXHIBIT C TO LOAN PURCHASE AGREEMENT
BLANKET ENDORSEMENT OF
STUDENT LOAN PROMISSORY NOTES
Pursuant to the Loan Purchase Agreement dated _____________________, the
undersigned (" Seller"), by execution of this instrument, hereby endorses all
promissory notes purchased by Zions First National Bank as trustee (the
"Trustee") on behalf of Nelnet Student Loan Trust ▇▇▇▇-▇ (▇▇▇ "▇▇▇▇▇▇▇▇▇"). This
endorsement is in blank, unrestricted form. This endorsement is without
recourse, except as provided under the terms of the Loan Purchase Agreement. All
right, title, and interest of Seller in and to the promissory notes and related
documentation identified in the attached loan ledger are transferred and
assigned to Trustee on behalf of the Purchaser.
This endorsement may be further manifested by attaching this instrument
or a facsimile hereof to each or any of the Promissory Notes and related
documentation acquired by the Trustee on behalf of the Purchaser from Seller, or
by attaching this instrument to the loan ledger schedule, as the Purchaser may
require or deem necessary.
Dated this ___ day of ______________, _____.
SELLER (DO NOT COMPLETE)
(DO NOT SIGN)
SIGNATURE OF AUTHORIZED OFFICER OF SELLER
22
EXHIBIT D TO LOAN PURCHASE AGREEMENT
▇▇▇▇ OF SALE
FOR VALUE RECEIVED, ________________________ (the "Seller"),
pursuant to the terms and conditions of that certain Loan Purchase Agreement
dated as of ___________, _____ (the "Agreement") between the Seller and Nelnet
Student Loan Trust 2002-1 (the "Purchaser") does hereby grant, sell, assign,
transfer and convey to Zions First National Bank, solely in its capacity as
trustee (the "Trustee") on behalf of the Purchaser and its successors and
assigns, all right, title and interest of the Seller in and to the following:
(1) The loans described in Annex I attached hereto (the "Loans"),
including the guarantee of the Loans issued by a guarantee agency
pursuant to the Federal Family Education Loan Program (20 U.S.C. ss.
1071 et seq.);
(2) All promissory notes and related documentation evidencing
the indebtedness represented by such Loans; and
(3) All proceeds of the foregoing including, without limitation,
all payments made by the obligor thereunder or with respect thereto, all
guarantee payments made by any guarantee agency with respect thereto,
and all interest benefit payments and special allowance payments with
respect thereto made under Title IV, Part B, of the Higher Education Act
of 1965, as amended, and all rights to receive such payments, but
excluding any proceeds of the sale made hereby.
TO HAVE AND TO HOLD the same unto the Trustee on behalf of the
Purchaser, its successors and assigns, forever. This ▇▇▇▇ of Sale is made
pursuant to and is subject to the terms and provisions of the Agreement, and is
without recourse, except as provided in the Agreement.
IN WITNESS WHEREOF, the Seller has caused this instrument to be
executed by one of its officers duly authorized to be effective as of the ____
day of ______, _____.
[NAME OF SELLER]
By: ______________________________________
Title: ______________________________________
23
EXHIBIT E TO LOAN PURCHASE AGREEMENT
REPRESENTATIONS, WARRANTIES,
COVENANTS AND AGREEMENTS OF SELLER
A. Any information furnished by the Seller to the Purchaser, or the
Purchaser's agents with respect to a FFELP Loan, including the Loan Transfer
Schedule attached to the Loan Transfer Addendum, is true, complete and correct.
B. The amount of the unpaid principal balance of each FFELP Loan is due
and owing, and no counterclaim, offset, defense or right to rescission exists
with respect to any FFELP Loan which can be asserted and maintained or which,
with notice, lapse of time or the occurrence or failure to occur of any act or
event could be asserted and maintained by the Borrower against the Trustee or
the Purchaser as assignee thereof. The Seller shall have taken all reasonable
actions to assure that no maker of a FFELP Loan has or may acquire a defense to
the payment thereof. No payment of principal or interest with respect to any
FFELP Loan is, as of the date hereof, more than 60 days delinquent and no
applicable payment of principal or interest with respect to any FFELP Loan will,
at the applicable Loan Purchase Date, be more than 60 days delinquent. No FFELP
Loan carries a rate of interest less than, or in excess of, the applicable rate
of interest required by the Higher Education Act. If the Higher Education Act
permits Sellers to charge an interest rate less than the applicable rate of
interest, no FFELP Loan purchased hereunder bears interest at a rate lower than
the applicable rate of interest; provided, however, that the Purchaser may
approve, in its sole discretion, in writing, interest reductions which are part
of a borrower repayment incentive program of Seller, the terms of which have
been fully described in detail and in writing to the Purchaser.
C. Each FFELP Loan has been duly executed and delivered and constitutes
the legal, valid and binding obligations of the maker (and the endorser, if any)
thereof, enforceable in accordance with its terms.
D. Each FFELP Loan complies in all respects with the requirements of the
Higher Education Act and the Loan Purchase Regulations and is an Eligible Loan,
as that term is defined in the Loan Purchase Agreement.
E. The Seller or Seller's eligible lender trustee has applied for and
received the Secretary of Education's or a Guarantee Agency's designation, as
the case may be, as an "Eligible Lender" under the Higher Education Act, and the
Seller has entered into all agreements required to be entered into for
participation in the Federal Family Education Loan Program under the Higher
Education Act.
F. The Seller and the Seller's eligible lender trustee on behalf of
Seller is the sole owner and holder of each FFELP Loan and has full right and
authority to sell and assign the same free and clear of all liens, pledges or
encumbrances; no FFELP Loan has been pledged or assigned for any purpose; and
each FFELP Loan is free of any and all liens, charges, encumbrances and security
interests of any description. The Purchaser has a valid and perfected first
priority security interest in the Pledged Collateral.
24
G. Each FFELP Loan is either Insured or Guaranteed; such Insurance or
Guarantee, as the case may be, is in full force and effect, is freely
transferable as an incident to the sale of each FFELP Loan; all amounts due and
payable to the Secretary of Education or a Guarantee Agency, as the case may be,
have been or will be paid in full by the Seller, and none of the FFELP Loans has
at any time been tendered to either the Secretary of Education or any Guarantee
Agency for payment.
H. There are no circumstances or conditions with respect to any FFELP
Loan, the Borrower thereunder or the creditworthiness of said Borrower that
would reasonably cause prudent private investors to regard any of the FFELP
Loans as an unacceptable investment, or adversely affect the value or
marketability thereof, the insurance thereof and any applicable Guarantee.
I. Each FFELP Loan was made in compliance with all applicable local,
State and federal laws, rules and regulations, including, without limitation,
all applicable nondiscrimination, truth-in-lending, consumer credit and usury
laws.
J. The Seller has carefully reviewed the Loan Purchase Regulations
supplied by the Purchaser and has complied with the Loan Purchase Regulations.
K. The FFELP Loans pursuant to the Agreement include all Eligible Loans
of any one Borrower held by the Seller.
L. The Seller has, and its officers acting on its behalf have, full
legal authority to engage in the transactions contemplated by the Loan Purchase
Agreement; the execution and delivery of the Loan Purchase Agreement, the
consummation of the transactions herein contemplated and compliance with the
terms, conditions and provisions of the Loan Purchase Agreement do not and will
not conflict with or result in a breach of any of the terms, conditions or
provisions of the charter, articles or bylaws of the Seller or any agreement or
instrument to which the Seller is a party or by which it is bound or constitute
a default thereunder; the Seller is not a party to or bound by any agreement or
instrument or subject to any charter or other corporation restriction or
judgment, order, writ, injunction, decree, law, rule or regulation which may
materially and adversely affect the ability of the Seller to perform its
obligations under the Loan Purchase Agreement and the Loan Purchase Agreement
constitutes a valid and binding obligation of the Seller enforceable against it
in accordance with its terms, and no consent, approval or authorization of any
government or governmental body, including, without limitation, the Federal
Savings and Loan Insurance Corporation, the Federal Deposit Insurance
Corporation, the Comptroller of the Currency, the Board of Governors of the
Federal Reserve System or any state bank regulatory agency, is required in
connection with the consummation of the transactions herein contemplated.
25
M. The Seller is duly organized, validly existing and in good standing
under the laws of its applicable jurisdiction and has the power and authority to
own its assets and carry on its business as now being conducted.
N. The Seller and any independent servicer have each exercised due
diligence and reasonable care in making, administering, servicing and collecting
the FFELP Loans, and the Seller has conducted a reasonable investigation of
sufficient scope and content to enable it duly to make the representations and
warranties contained in this Exhibit E. The Seller shall be solely responsible
for the payment of the costs and expenses incident to origination of FFELP
Loans, without any right of reimbursement therefor from the Purchaser.
O. With respect to all Insured Eligible Loans being acquired, Insurance
is in effect with respect thereto; the applicable Contract and Certificates of
Insurance are valid and binding upon the parties thereto in all respects
material to the security for any bonds and/or notes issued by the Purchaser or
its assignee; and the Seller is not in default in the performance of any of its
covenants and agreements made in respect thereof.
P. With respect to all Guaranteed Eligible Loans being acquired, a
Guarantee Agreement is in effect with respect thereto and is valid and binding
upon the parties thereto in all respects material to the security of the bonds
and/or notes issued by the Purchaser or its assignee to finance the FFELP Loans;
and the Seller is not in default in the performance of any of its covenants and
agreements made in such Guarantee Agreement.
Q. The Seller does not (i) discriminate by pattern or practice against
any particular class or category of students by requiring, as a condition to the
receipt of a student loan, that a student or his family maintain a business
relationship with the Seller, except as may be permitted under applicable laws
or (ii) discriminate on the basis of race, gender, color, creed or national
origin.
R. The FFELP Loans are a representative sample of all student loans held
by the Seller with respect to the educational institution attended by, or the
age, sex, race, national origin or place of residence of, the Borrower to whom
such loans were made, or with respect to any other identifying characteristic of
such Borrowers.
S. Each instrument transferred to the Purchaser under the Loan Purchase
Agreement is a FFELP Loan which constitutes an Eligible Loan.
T. No promissory note evidencing an Eligible Loan bears any apparent
evidence of forgery or alteration or is otherwise so irregular or incomplete as
to call into question its authenticity.
U. Except as may have been disclosed by the UCC lien search required by
Section 4(f) hereof for the Seller, no other financing statements or assignment
filings naming the Seller as debtor or assignor under its legal name or trade
names has been filed.
V. The fair salable value of the assets on a going concern basis of the
Seller and its subsidiaries, on a consolidated basis, as of the time of each
sale of FFELP Loans hereunder is in excess of the total amount of their
liabilities.
26
EXHIBIT F TO LOAN PURCHASE AGREEMENT
ACKNOWLEDGMENT
The assignment of the within promissory note and related documents to (DO NOT
COMPLETE) under a Loan Purchase Agreement between ____________________ and
____________________, dated as of ____________________, _____, did not become
effective thereunder, and no rights in the same have been conveyed thereby.
Dated: (DO NOT COMPLETE)
27