Exhibit 10.12
AMENDED AND
RESTATED
LOAN PURCHASE AGREEMENT
This Amended and Restated Loan
Purchase Agreement is made and entered into as of the 1st day of
March, 2005 by and among CONSOLIDATION LOAN FUNDING II, LLC,
as seller (“Seller”), HIGHER EDUCATION FUNDING I
, a Delaware statutory trust, as purchaser
(“Purchaser”), THE BANK OF NEW YORK TRUST COMPANY,
N.A. , not in its individual capacity but as eligible lender
trustee for Seller (in such capacity, “Seller ELT”),
and THE BANK OF NEW YORK , not in its individual capacity
but as eligible lender trustee for Purchaser (in such capacity,
“Purchaser ELT”).
WITNESSETH:
WHEREAS , Seller, through its
eligible lender trustee, is engaged in a program of originating,
funding, purchasing, holding and selling Eligible Loans;
WHEREAS , Purchaser, through
its eligible lender trustee, is engaged in a program of purchasing,
holding and selling Eligible Loans;
WHEREAS, Seller, through its
eligible lender trustee, desires to sell to Purchaser, through its
eligible lender trustee, certain Eligible Loans in accordance with
the terms and conditions of this Agreement;
WHEREAS , Seller ELT holds
legal title to, and serves as eligible lender trustee with respect
to, Eligible Loans on behalf of Seller;
WHEREAS , Purchaser ELT holds
legal title to, and serves as eligible lender trustee with respect
to, Eligible Loans on behalf of Purchaser;
WHEREAS , Seller and
Purchaser are parties to the Loan Purchase Agreement dated as of
January 1, 2004 (the “Original Agreement”); and
WHEREAS , the parties hereto
desire to amend and restate the Original Agreement.
NOW, THEREFORE , in
consideration of the foregoing premises and mutual covenants herein
contained, the parties agree to amend and restate the Original
Agreement as follows:
ARTICLE I
DEFINITIONS
Unless the context otherwise
requires, capitalized terms defined in the Indenture of Trust and
used but not defined in this Agreement shall have the meanings set
forth in the Indenture of Trust. The following words and terms used
in this Agreement shall have the following meanings unless
otherwise provided herein or unless the context or use clearly
indicates another or different meaning or intent:
“Act” shall mean Title
IV, Part B of the Higher Education Act of 1965 (20 USC §
1071 et. seq. ) , and includes insofar as the context
requires Title VII of the Public Health Service Act
(42 USC. §292 et
seq. ) , as either is amended and in effect from time to
time, or any successor enactment thereto, the effective
administrative regulations promulgated thereunder, and any binding
directives issued by the Secretary pursuant thereto.
“Agreement” shall mean
this Amended and Restated Loan Purchase Agreement, including all
exhibits attached hereto, and any supplements or amendments
hereto.
“Certificate of
Insurance” shall mean a certificate of federal loan insurance
issued with respect to an Eligible Loan by the Secretary pursuant
to the Act.
“Commitment” shall mean
Seller’s commitment to sell Eligible Loans to Purchaser
pursuant to Section 2.1 hereof.
“Contract of Insurance”
shall mean a contract of insurance under the Act between the
Secretary and the Eligible Lender Trustee for the benefit of the
Seller or the Secretary and the Eligible Lender Trustee for the
benefit of the Purchaser, providing for the Insurance of Student
Loans.
“Eligible Lender Trust
Agreement” means (i) the Eligible Lender Trust
Agreement, dated as of January 1, 2004, between the Purchaser
and the Eligible Lender Trustee, as trustee, and any similar
agreement entered into by the Purchaser and an “eligible
lender” under the Higher Education Act pursuant to which such
“eligible lender” holds Student Loans as legal owner in
trust for the Purchaser as beneficial owner, in each case as
supplemented or amended from time to time; or (ii) the Eligible
Lender Trust Agreement, dated as of January 1, 2004 between
the Seller and the Eligible Lender Trustee, as trustee, and any
similar agreement entered into by the Seller and an “eligible
lender” under the Higher Education Act pursuant to which such
“eligible lender” holds Student Loans as legal owner in
trust for the Seller as beneficial owner, in each case as
supplemented or amended from time to time; as is applicable.
“Eligible Lender Trustee”
means, for Seller, Seller ELT, as trustee under the applicable
Eligible Lender Trust Agreement, and its successors and assigns in
such capacity and, for Purchaser, Purchaser ELT as trustee under
the applicable Eligible Lender Trust Agreement, and its successors
and assigns in such capacity.
“Indenture of Trust”
means the Amended and Restated Indenture of Trust, dated as of
March 1, 2005, among Purchaser, The Bank of New York, as
Eligible Lender Trustee, and The Bank of New York, as Trustee, as
the same may be amended or supplemented from time to time.
“Insurance” or
“Insured” or “Insure” shall mean, with
respect to a Student Loan, the insurance by the Secretary under the
Act (as evidenced by a Contract of Insurance issued or entered into
under the provisions of the Act) of the maximum percentage of the
principal of and accrued interest on such Student Loan allowed
under the Act with respect to such Student Loan.
“Insured Loan” shall mean
a Student Loan which is Insured.
“Loan Transfer Addendum”
shall mean a loan transfer addendum substantially in the form set
forth as Exhibit A attached hereto and incorporated herein by
this reference.
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“Original Agreement” is
defined in the recitals.
“Portfolio” shall mean a
group of Eligible Loans sold pursuant to Section 2.1 hereof on
a Scheduled Sale Date.
“Principal Balance” shall
mean the original principal amount of a Student Loan, plus
capitalized interest (if any) and items which may not be guaranteed
or insured (such as late charges), less payments by or on
behalf of the Student Borrower.
“Purchase Price” shall
mean the price as set forth in the Loan Transfer Addendum.
“Purchaser” is defined in
the preamble.
“Purchaser ELT” is
defined in the preamble.
“Scheduled Sale Date”
shall mean any date designated as such in a communication delivered
pursuant to Section 4.3(a) of this Agreement and in an
applicable Loan Transfer Addendum for purchase of a Portfolio of
Eligible Loans pursuant to this Agreement, unless such date is
changed by mutual agreement of the parties, in which case Scheduled
Sale Date shall be any new date so agreed to by the parties.
“Secretary” shall mean
the Secretary of the United States Department of Education or any
successor to the pertinent functions of that official or department
under the Act, or, when the context so requires, the former
Commissioner of Education of the former United States Department of
Health, Education and Welfare and includes the Secretary of the
United States Department of Health and Human Services.
“Seller” is defined in
the preamble.
“Seller ELT” is defined
in the preamble.
“Student Borrower” shall
mean the obligor on a Student Loan.
ARTICLE II
LOAN SALE COMMITMENT
2.1 Loan Sale Commitment .
Subject to the terms and conditions of this Agreement, and in
express reliance upon the representations, warranties and covenants
set forth herein, Seller (and, with respect to legal title thereto,
Seller ELT on behalf of Seller ) agrees to sell, and Purchaser
(and, with respect to legal title thereto, Purchaser ELT on behalf
of Purchaser) agrees to purchase, on the applicable Scheduled Sale
Date all Student Loans identified in the loan transfer schedule
attached to the applicable Loan Transfer Addendum to the extent
such Student Loans meet all eligibility requirements and to the
extent the Purchaser has the funds available to purchase such
Student Loans.
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ARTICLE III
SERVICING
3.1 Servicing of Other Eligible
Loans . All of the Eligible Loans that are sold pursuant to
Section 2.1 hereof are currently serviced (or will be serviced
on the Scheduled Sale Date) by the Servicer(s) identified in the
Loan Transfer Addendum. Such Servicer shall either be Great Lakes
Educational Loan Services, Inc., ACS Education Services Inc. or
another servicer with whom Purchaser has a servicing agreement that
is satisfactory to (i) The Bank of New York or its successor
as Trustee under the Indenture of Trust and (ii) The Bank of
New York or its successor as Purchaser ELT. On the effective date
for the sale of those Eligible Loans, Purchaser shall cause the
current servicer(s) or such other servicer(s) as Purchaser may
select to commence servicing such Portfolio at Purchaser’s
expense and under the identification number of Purchaser or its
designee.
ARTICLE IV
SALE/PURCHASE OF PORTFOLIOS
4.1 Tender of Eligible Loans to
Purchaser . With respect to a Portfolio of Eligible Loans to be
sold pursuant to Section 2.1 hereof, prior to or on the
applicable Scheduled Sale Date (or at such other time as the
parties may agree), Seller shall furnish Purchaser or its designee
with a list of the Eligible Loans to be included in such Portfolio,
and shall authorize and direct the Servicer of the Eligible Loans
to release such information and documentation to Purchaser or its
designee, in its reasonable judgment, deems necessary and
appropriate to undertake a review of such loans to determine
whether (i) such loans constitute Eligible Loans, and
(ii) the Portfolio, aggregated with the other Eligible Loans
that have been sold to Purchaser by Seller if appropriate, comply
with the requirements set forth in Section 3.1 hereof.
4.2 Conditions of Purchase .
Purchaser’s obligation to purchase and pay for a Student Loan
in a Portfolio hereunder shall be subject to the following
conditions precedent:
(a) the Eligible Loans in the
Portfolio, aggregated with the other Eligible Loans that have been
sold to Purchaser by Seller if appropriate, shall meet the
requirements described in Section 3.1 hereof;
(b) all representations, warranties
and statements by or on behalf of Seller contained in this
Agreement with respect to such Student Loan are true on the
Scheduled Sale Date relating to such Student Loan;
(c) any notification to or approval
by the Secretary or Guarantee Agency required by the Act or the
Guarantee Agreement as a condition to the assignment of such
Student Loan shall have been made or received and evidence thereof
delivered to both Purchaser and Purchaser ELT;
(d) without a prior Rating Agency
Confirmation, all Student Loans purchased pursuant to this
Agreement shall have been originated by Great Lakes Educational
Loan Services, Inc. or ACS Education Services, Inc.; and
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(e) the entire interest of Seller in
such Student Loan shall have been duly assigned by endorsement,
such endorsement to be without recourse except as provided in
Article V hereof.
4.3 Consummation of Sale and
Purchase of Portfolio . To consummate the sale and purchase of
a Portfolio of Eligible Loans, on or before the applicable
Scheduled Sale Date, Seller shall deliver via facsimile to
Purchaser ELT a Loan Transfer Addendum, the Seller’s Closing
Certificate, a form of which is attached as Exhibit B, and
such instruments of transfer, including a bill of sale, a form of
which is attached as Exhibit D, and blanket endorsement, a
form of which is attached as Exhibit C, as Purchaser shall
reasonably deem necessary for conveyance of title of the Eligible
Loans contained in the Portfolio free and clear of all liens,
encumbrances and security interests. Seller shall retain all
ownership rights with respect to Eligible Loans in a Portfolio at
all times prior to the effective sale of such Portfolio. Purchaser
shall pay for any reasonable transfer fees as may be required to be
paid to the Secretary or to the Servicer.
(a) On each Scheduled Sale Date,
Seller shall arrange for the Servicer of the Eligible Loans to
notify the Eligible Lender Trustees via facsimile, by no later than
12:00 noon EST or EDT, as is applicable, that (i) such day is
a Scheduled Sale Date and (ii) the dollar amount of the
Eligible Loans which are going to be disbursed by the Servicer on
such Scheduled Sale Date. Seller shall also arrange for the
Servicer of the Eligible Loans to email to the Seller, the Issuer
Administrator and Purchaser ELT a detailed roster of the Eligible
Loans that were so disbursed.
(b) By 12:00 noon EST or EDT, as is
applicable, on such Scheduled Sale Date, Seller shall deliver to
Purchaser ELT a Loan Transfer Addendum.
(c) On such Scheduled Sale Date,
after receipt of the aforesaid Loan Transfer Addendum and the
documentation required to be provided by this Section, Purchaser
shall arrange for a transfer into an Account or Accounts maintained
at The Bank of New York, designated by Seller and satisfactory to
Purchaser, or wire transfer as directed by the Purchaser, the
amount necessary for the purchase of the Eligible Loans. The
purchase and sale of the Portfolio shall be effective
simultaneously with the payment of the Purchase Price.
4.4 Other Information and
Documents . Seller shall furnish or make available to Purchaser
such additional information concerning Seller’s Student Loan
portfolio as Purchaser may reasonably request. Seller and Seller
ELT shall execute all other documents and take all other steps as
may be reasonably requested by Purchaser or Purchaser ELT from time
to time to effect the sale hereunder of a Portfolio of Eligible
Loans.
ARTICLE V
REPURCHASE OBLIGATION OF SELLER
5.1 Conditions Precedent to
Repurchase Obligation . At the request of Purchaser or its
Eligible Lender Trustee, Seller shall repurchase any Student Loan
purchased by Purchaser pursuant to this Agreement if:
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(a) any representation or warranty
made or furnished by Seller in or pursuant to this Agreement with
respect to such Student Loan shall prove to have been materially
incorrect as to such Student Loan, unless resulting from an act or
omission of Purchaser;
(b) the Secretary or a Guarantee
Agency, as the case may be, refuses to honor all or part of a claim
filed with respect to such Student Loan (including any claim for
interest subsidy, Special Allowance Payments, Insurance,
reinsurance or Guarantee payments) on account of any circumstance
or event that occurred prior to the sale of such Student Loan to
Purchaser, unless resulting from an act or omission of Purchaser;
or
(c) On account of any wrongful or
negligent act or omission of Seller or its servicing agent that
occurred prior to the sale of such Student Loan to Purchaser, a
defense is asserted by a maker (or endorser, if any) of such
Student Loan with respect to his or her obligation to pay all or
any part of such Student Loan, and Purchaser or Purchaser ELT in
good faith believes that the facts reported, if true, raise a
reasonable doubt as to the enforceability of such Student Loan.
5.2 Repurchase by Seller .
Upon the occurrence of any of the conditions set forth in
Section 5.1 hereof with respect to a Student Loan and upon the
request of Purchaser or Purchaser ELT, Seller shall pay to
Purchaser ELT, for the account of Purchaser, an amount equal to the
then-outstanding principal balance of such Student Loan, plus any
premium in excess of par paid as part of the Purchase Price with
respect to such Student Loan, plus interest and Special Allowance
Payments accrued and unpaid with respect to such Student Loan from
the applicable Scheduled Sale Date to and including the date of
repurchase, plus any attorneys’ fees, legal expenses, court
costs, servicing fees or other expenses incurred by Purchaser,
Purchaser ELT or the appropriate successors or assigns in
connection with such Student Loans. Upon payment of such amount,
Purchaser and Purchaser ELT shall take all necessary action to
release and re-convey to Seller (and Seller ELT) all of their
respective interests in such Student Loan free and clear of any
lien or security interest created by Purchaser or Purchaser
ELT.
ARTICLE VI
ONGOING OBLIGATIONS OF SELLER
6.1 Obligation of Seller to
Forward Payments . Seller shall promptly remit, or cause to be
remitted, to Purchaser ELT as it may direct, all funds received by
Seller after the Scheduled Sale Date for a Student Loan sold
pursuant to this Agreement which constitute payments of principal,
or interest or Special Allowance Payments accrued after such
Scheduled Sale Date with respect to such Student Loan.
6.2 Obligation of Seller to
Forward Communications . Seller shall immediately transmit to
Purchaser any communication received by Seller after the Scheduled
Sale Date with respect to a Student Loan or the borrower under such
a Student 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.
6.3 Notification to Student
Borrowers . Seller and Purchaser shall cause the Servicers to
provide each borrower under the Eligible Loans purchased under this
Agreement with notice
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of the assignment and
transfer to Purchaser ELT for the account and on behalf of
Purchaser of Seller’s interest in such Eligible Loans as
required by the Act.
6.4 No Modification of Lender
Agreements . Seller will consent to no amendments to, or
modifications of, the Contract of Insurance or Guarantee Agreement
that may affect Eligible Loans which are sold or listed on a Loan
Transfer Addendum for sale pursuant to this Agreement without
(i) the prior written consent of Purchaser, which consent
shall not be unreasonably withheld, and (ii) Rating Agency
Confirmation. Amendments or modifications required by the Act are
excluded from the requirement of this Section 6.4.
ARTICLE VII
REPRESENTATIONS, WARRANTIES AND COVENANTS
7.1 Representations. Warranties
and Covenants of Seller . Seller hereby represents, covenants,
and warrants to Purchaser that:
(a) Organization and Authority of
Seller . Seller is duly organized, validly existing and in good
standing under the laws of the State of Delaware, and has all
necessary statutory power and authority to own its assets and carry
on its business as now being conducted; Seller has, and its
officers and Seller ELT acting on its behalf have, all necessary
statutory power and authority to make and perform this Agreement,
and has the power and authority to sell, assign and transfer
Student Loans to Purchaser and Purchaser ELT, and to repurchase
Student Loans as required under the terms hereof.
(b) Eligible Lender Status .
Seller ELT, if applicable, is an “eligible lender”
under the Act.
(c) Legal and Binding
Obligation . The execution, delivery and performance of this
Agreement by Seller have been duly authorized by all necessary
corporate action, and do not require any stockholder approval or
approval or consent of, or notice to, any trustee or holders of
indebtedness or obligations of Seller; upon due execution and
delivery by the parties hereto, this Agreement will constitute the
legal, valid and binding obligation of Seller, enforceable in
accordance with its terms.
(d) No Conflicts . Neither the
execution, delivery or performance by Seller of this Agreement, nor
the consummation or performance by Seller of the transactions
contemplated hereby, will conflict with, result in a violation of,
or constitute a default (or an event which could constitute a
default with the passage of time or notice or both) under,
(i) any of the terms of Seller’s charter or bylaws, or
(ii) any indenture, mortgage, contract or other agreement to
which Seller is a party or by which it or its properties are bound,
or any law or regulation by which it or its properties are bound,
where, in the case of this clause (ii), such conflict, violation or
default could have a material adverse effect on Seller’s
ability for perform its obligations hereunder. Seller is not a
party to or bound by any agreement or instrument or subject to any
charter or other corporate restrictions or judgment, order, writ,
injunction, decree, law, rule or regulation which may materially
and adversely affect the ability of Seller to perform its
obligations under this Agreement.
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(e) No Defaults or Violations
. Seller is not in default under any mortgage, deed of trust,
indenture or other instrument or agreement to which Seller is a
party or by which it or its properties are bound, or in violation
of any law or regulation, which default or violation could have a
material adverse effect on Seller’s ability for perform its
obligations hereunder.
(f) No Consents . No consent,
approval or authorization of any government or governmental body,
including (without limitation) the Office of Thrift Supervision,
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 execution, delivery and performance of this Agreement, or the
consummation of the transactions contemplated hereby.
(g) No Litigation . There are
no pending or threatened actions or proceedings by or before any
court, administrative agency or arbitrator, that could if adversely
determined, materially and adversely affect the ability of Seller
to perform its obligations hereunder, and there are no presently
existing orders of any court, administrative agency or arbitrator
that could have a material and adverse effect on the ability of
Seller to perform its obligations hereunder.
(h) Continuing Obligations of
Seller . Seller agrees that during the term of this Agreement,
it will (i) remain in good standing and qualified to do
business under the laws of the State of Delaware and the
jurisdictions in which it operates, (ii) conduct its business
in accordance with all applicable state and federal laws, and
(iii) continue to be qualified to carry out this
Agreement.
7.2 Representations, Warranties
and Covenants of Seller with Respect to Student Loans . Seller
hereby represents, covenants, and warrants to Purchaser with
respect to each Student Loan to be sold hereunder that, except for
any condition resulting from an act or omission of Purchaser, as of
the Scheduled Sale Date for such Student Loan:
(a) Accuracy of Information .
Any information furnished by Seller to Purchaser or its agents with
respect to such Student Loan is true, complete and correct.
(b) Validity of Loans . Such
Student Loan has been duly executed and delivered and constitutes
the legal, valid and binding obligation of the maker (and the
endorser, if any) thereof, enforceable in accordance with its
terms.
(c) No Defenses Against Repayment
of Loans . The amount of the unpaid principal balance of such
Student Loan is true and owing, and no counterclaim, offset,
defense or right to rescission exists with respect to such Student
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
Eligible Lender Trustee as assignee thereof. Seller shall take all
reasonable actions to assure that no maker of such Student Loan has
or may acquire a defense to the payment thereof. The rate of
interest carried by such Student Loan is the maximum which was
allowable by law at the time the loan was made, and such Student
Loan does not carry a
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rate of
interest in excess of that permitted by the provisions of the Act
or such other rate as was applicable under a borrower’s
benefit program.
(d) Ownership and Location of
Loans: Existence of Liens . Seller is the sole owner and holder
of title to such Student Loan and has full right and authority to
sell and assign the same free and clear of all liens, pledges or
encumbrances, and upon the endorsement and delivery of promissory
notes evidencing such Student Loan to Eligible Lender Trustee on
behalf of Purchaser pursuant to this Agreement, Eligible Lender
Trustee on behalf of Purchaser will acquire full right, title and
interest in such Student Loan free and clear of all liens, pledges
or encumbrances whatsoever. All documentation relating to such
Student Loan, including the original promissory note for such
Student Loan, is now in the possession of the servicer thereof.
(e) Guarantee and Insurance on
Loans . Such Stude
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