Exhibit 10.11
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, 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 First
Amended and Restated Eligible Lender Trust Agreement, dated as of
February 1, 2003 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 Studen
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