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
