EXHIBIT 10.2
CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.
DRAFT #6
8/01/01
NOTE PURCHASE AGREEMENT
BANK OF AMERICA GATE(R) LOAN PROGRAM
This Note Purchase Agreement, by and between BANK OF AMERICA, N.A. ("Program
Lender"), a national banking association organized under the laws of the United
States and having a principal office located at 000 Xxxxx Xxxxxxxx Xxxxxx, Xxxx,
Xxxxxxxxxx, and THE FIRST MARBLEHEAD CORPORATION, a Delaware corporation having
a principal place of business at 00 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxxx
("FMC"), dated as of April 30, 2001;
W I T N E S S E T H:
WHEREAS, Program Lender is in the business of making education loans
under education lending programs, including, without limitation, the Bank of
America GATE Education Loan Program (as hereinafter defined); and
WHEREAS, FMC exists to arrange funding for education loans for the
benefit of students at Participating Institutions; and
WHEREAS, in order to facilitate funding of Bank of America GATE
Conforming Loans, Program Lender has agreed to sell, from time to time, pools
containing Bank of America GATE Conforming Loans originated by Program Lender to
FMC or a Purchaser Trust (all as hereinafter defined).
WHEREAS, the Bank of America GATE Education Loans are made by Program
Lender and purchased by FMC on the condition that they qualify for and in fact
are covered by a guaranty issued by The Education Resources Institute, Inc.
("XXXX").
NOW, THEREFORE, in consideration of these presents and the covenants
contained herein, the parties hereto hereby agree as follows:
1
I. DEFINITIONS.
Capitalized terms used herein without definition have the meanings set
forth in the Program Guidelines.
"Affiliate" shall mean, as to any person, any other person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such person. A person shall be deemed to control another person if
the controlling person possesses, directly or indirectly, the power to direct or
to cause the direction of the management and policies of the other person,
whether through the ownership of voting securities, by contract or otherwise.
"Bank of America GATE Conforming Loans" shall mean loans (a) conforming
to the requirements of the Product Specifications at the time the loans were
made, (b) serviced by the Servicer in accordance with the Product
Specifications, and (c) covered by and subject to all the benefits of the
Guaranty Agreement.
"Bank of America GATE Education Loan Pool" or "Pool" shall mean and
refer to a group of Bank of America GATE Notes purchased and pledged or intended
to be purchased and pledged as collateral in a particular Securitization
Transaction.
"Bank of America GATE Notes" shall mean notes or other forms of consumer
debt instruments, evidencing Bank of America GATE Conforming Loans.
"Business Day" shall mean any day other than: (a) a Saturday or Sunday,
or (b) a day on which banking institutions in the State of California are
required or authorized by law or executive order to be closed.
"Co-Lender Indemnification Agreement" means the form of Agreement
attached hereto as Exhibit C.
"Collateral" has the meaning set forth in the Deposit and Security
Agreement.
2
"Deposit and Security Agreement" means the agreement of that name among Program
Lender, XXXX, FMC, and State Street Bank & Trust Company, dated as of April 30,
2001.
"First Marblehead" or "FMC" shall mean The First Marblehead Corporation,
a Delaware corporation.
"GATE Program" shall mean the Bank of America GATE Education Loan
Program described in the Product Specifications.
"Guaranty Agreement" means the agreement of that name between Program
Lender and XXXX, dated as of April 30, 2001.
"Minimum Purchase Price" has the meaning set forth in Section 2.04.
"Option Period" means, with respect to any particular Bank of America
GATE Conforming Loan, the period beginning on the first May 1 when such loan
first becomes a Seasoned Loan and ending [**] days thereafter.
"Origination Records" means and refers to the original Bank of America
GATE Education Loan Application and Note, a form of cosigner notice when
required under 16 C.F.R. Section 444, and any other standardized documentation
specified from time to time in the Product Specifications as required to be
received by the Servicer from the Program Lender in order to service Bank of
America GATE Conforming Loans adequately and accurately.
"Origination Services Agreement" refers to (a) the Origination Services
Agreement entered into between Servicer and Program Lender with respect to
origination of prepGATE Conforming Loans, as amended from time to time, and (b)
any subsequent agreement relating to origination services provided to Program
Lender with respect to Bank of America GATE Education Loan Notes purchased under
this Agreement.
3
"Participating Institution" means an educational institution approved by
XXXX for receipt of Bank of America GATE Program funds.
"Product Specifications" has the meaning set forth in the Umbrella
Agreement.
"Purchase Date" shall mean the date of consummation of a Securitization
Transaction with respect to a particular Pool including Bank of America GATE
Conforming Loans originated by Program Lender, which date: (a) shall be set by
written notice from FMC to Program Lender, given to Program Lender not less than
five (5) Business Days in advance of the specified date, and (b) shall occur
[**] for each loan in the Pool in question.
"Purchaser Trust" shall mean and refer to a trust or other SPE formed
for the purpose of purchasing Bank of America GATE Conforming Loans by FMC or by
any Affiliate of FMC. Any action required or permitted to be taken by FMC
hereunder may be taken by a Purchaser Trust with respect to a particular Pool.
"Rating Agencies" shall mean and refer to Standard and Poor's
Corporation and/or Xxxxx'x Investors Service, Inc., and/or Duff & Xxxxxx, and/or
Fitch Investors Services.
"Seasoned Loan" means a Bank of America GATE Conforming Loan made by
Program Lender that becomes "seasoned" in accordance with the following
criteria:
(a) The following Bank of America GATE Conforming Loans will be
deemed to be "Seasoned Loans" immediately upon final disbursement:
(i) prepGATE loans (as defined in the Product Specifications);
(b) The following Bank of America GATE Conforming Loans will be
deemed to be "Seasoned Loans" twenty-four (24) months following final
disbursement:
(i) Bank of America GATE Undergraduate Education Loans (as defined
in the Product Specifications) made to Borrowers in their
first (1st), second (2nd) or third (3d) academic year;
(c) The following Bank of America GATE Conforming Loans will be deemed to be
"Seasoned Loans"
4
upon the scheduled graduation date (i.e., at the beginning of the grace period
before scheduled repayment begins):
(i) Bank of America GATE Undergraduate Education Loans (as defined
in the Product Specifications) made to Borrowers in their
fourth (4th) or later academic year; and
(ii) Bank of America GATE Graduate Professional Education Loans (as
defined in the Product Specifications).
(d) Notwithstanding subparagraphs (a) through (c), above, Bank of America GATE
Conforming Loans will be deemed to be "Seasoned Loan" immediately upon the
occurrence of any of the following events:
(i) the Bank of America GATE Conforming Loan enters repayment
because the Borrower ceases to be enrolled at the
Participating Institution or in an approved residency period
in the case of a loan to a Borrower in a medical or dental
degree program, as and to the extent required by the Product
Specifications; or
(ii) a "Guaranty Event" (as defined in the Guaranty Agreement)
occurs with respect to such Bank of America GATE Conforming
Loan.
"Securitization Costs" means the actual costs and expenses incurred by
FMC, the Purchaser Trust, and all others entitled to payment for expenses by the
Purchaser Trust or FMC, in connection with a Securitization Transaction,
including, without limitation, the following:
(Structuring and Origination Fees;
Copy/Binding Costs)
(Underwriting Expenses)
(Rating Fee)
(Transaction and First Year Fees; Expenses)
Owner Trustee and Indenture Trustee (Transaction and First Year Fees; Expenses)
(Counsel for Indenture Trustee)
(Counsel for FMC)
(Servicer Audit)
(Bond Insurer)
"Securitization Transaction" shall mean and refer to the purchase of a
Pool of Bank of America GATE Conforming Loans by a Purchaser Trust funded
through the issuance and sale of commercial
5
paper, certificates, bonds or other securities or evidences of indebtedness, the
repayment of which is supported by payments on the Bank of America GATE
Conforming Loans included in such Pool. A Securitization Transaction may
include, without limitation, a continuing series of transactions occurring on a
periodic basis in which Program Lender makes a sale of then-outstanding Seasoned
Loans to a Purchaser Trust, which Purchaser Trust in turn either utilizes the
Pool directly as collateral for its own debt or resells the Pool (in whole or in
part) in further sales to a securitization conduit providing financing to the
Purchaser Trust.
"Servicer" shall mean and refer to The Pennsylvania Higher Education
Assistance Agency ("PHEAA"), or such other servicer as may be retained by the
holder of Bank of America GATE Conforming Loans in accordance with the terms
hereof and of the Umbrella Agreement.
"Servicing Agreement" refers to: (a) the Servicing Agreement entered
into between Servicer and Program Lender with respect to servicing of Bank of
America GATE Conforming Loans, as amended from time to time, and (b) any
subsequent servicing agreement between Program Lender and the Servicer governing
servicing of Bank of America GATE Conforming Loans purchased under this
Agreement.
"Servicing Assignment and Servicer Consent Letter" means the form of
assignment and consent attached hereto as Exhibit B.
"SPE" means a special purpose entity formed and operated for the sole
purpose of acting as purchaser and owner of Bank of America GATE Conforming
Loans.
"Term" shall mean the period commencing on the effective date hereof and
ending upon termination hereof, all as set forth in Article X.
"Trust Agreement" means, with respect to any particular Securitization
Transaction, the agreement pursuant to which a Purchaser Trust is formed.
6
"Trust Indenture" means, with respect to any particular Securitization
Transaction, the agreement pursuant to which FMC or a Purchaser Trust issues
evidences of indebtedness secured by the payments on the related Bank of America
GATE Conforming Loans.
"Umbrella Agreement" shall mean and refer to that certain Umbrella
Agreement by and between Program Lender and First Marblehead, dated as of April
15, 2001.
II. AGREEMENT FOR PURCHASE AND SALE OF NOTES.
2.01. PURCHASE AND SALE.
On each Purchase Date during the Term of this Agreement and subject to
the conditions set forth herein, Program Lender shall sell to FMC or a designee
Purchaser Trust, and FMC or such Purchaser Trust shall purchase, every Seasoned
Loan owned by Program Lender on the Purchase Date.
2.02. PRE-CLOSING INFORMATION; FMC [**].
(a) REPORTING.
Program Lender will cause Servicer to inform FMC periodically of
information reasonably requested by FMC in anticipation of a Securitization
Transaction, including, without limitation, the number of Seasoned Loans ready
for purchase, principal and accrued interest with respect to each such Loan,
payment status (including defaulted loans presented for guaranty payment), and
the identity of Participating Institutions affected by the Securitization.
Program Lender shall also provide summary data, monthly, of applications in
process and approved loans not yet originated (numbers, dollar amounts by
program, borrower expected repayment date and other agreed data). Program Lender
will provide summary data, monthly, of rejected applications (numbers and dollar
amounts by program). Program Lender shall also cause Servicer to provide its
MR50 Reports to FMC. FMC covenants and agrees that it will use data in the MR50
Report solely for the purpose of producing portfolio-level reports specific to
forecasting and structuring Securitization Transactions. After production of
such
7
reports, FMC will return all data storage devices containing MR50 data to PHEAA
and will delete all MR50 data (other than the portfolio-level reports) from its
system.
FMC will [**] specify a Purchase Date and consummate a Securitization
Transaction in which a Purchaser Trust will purchase all of the Seasoned Loans,
not less than once each calendar year. FMC shall have the sole and exclusive
right to purchase all Bank of America GATE Conforming Loans [**] for each such
loan, which right may be assigned to one or more Purchaser Trusts. Program
Lender agrees, in consideration of FMC's undertaking pursuant to this section,
not to sell to any third person any interest in any Bank of America GATE
Conforming Loans originated by Program Lender [**]. Program Lender shall be free
to use Bank of America GATE Conforming Loans as collateral for loans to Program
Lender and/or to sell participations in its portfolio of Bank of America GATE
Conforming Loans; provided, however, that Program Lender must sell and deliver
Seasoned Loans free and clear of any such interests on any Purchase Date.
Program Lender shall be entitled at any time and from time to time, in its sole
discretion, to sell a Seasoned Loan to a third party or to retain a Bank of
America GATE Conforming Loan, in whole or in part, for its own account, in the
event that FMC or its designee is unable to or fails to acquire such Seasoned
Loan [**]. In such event, the Program Lender may sell or retain such Seasoned
Loan to any purchaser, free and clear of any claim under this Agreement.
2.03. POOL SUPPLEMENT.
Each purchase and sale of the Seasoned Loans originated by Program
Lender included in a Pool on a Purchase Date shall be made pursuant to a Pool
Supplement substantially in the form of Exhibit A which shall: (1) set forth the
Minimum Purchase Price for the Seasoned Loans originated by Program Lender
included in the Pool, (2) incorporate by reference the terms and conditions of
this Agreement applicable to sales of Seasoned Loans, and (3) include a Schedule
of Seasoned Loans
8
setting forth the details and characteristics of such Pool. Each Pool Supplement
shall be executed by an authorized agent of each Purchaser Trust and the Program
Lender and shall be delivered on the related Purchase Date. The Purchaser Trust
shall provide a preliminary settlement sheet in the form of Schedule 1 to the
Pool Supplement not less than two (2) Business Days prior to the Purchase Date.
2.04. MINIMUM PURCHASE PRICE.
On the Purchase Date, Program Lender shall assign and convey all
Seasoned Loans originated by Program Lender included in the Pool to FMC, or a
Purchaser Trust, in consideration of receipt of the Minimum Purchase Price
therefor. For purposes of this Agreement the term "Minimum Purchase Price" shall
mean the sum of:
(a) The unpaid principal amount of the Seasoned Loans in question [**]; plus
(b) all accrued and unpaid interest on such Seasoned Loans, [**]; plus
(c) [**], the amount of any guaranty fee paid by Program Lender to XXXX. If
the terms of the Guaranty Agreement call for any Guaranty Fees to be paid to
XXXX [**]; plus
(d) a partial reimbursement for [**] costs incurred and paid by
Program Lender with respect to [**] such reimbursement to equal [**] .
2.05. FAILURE OF FMC TO SECURITIZE.
In the event that: (a) FMC fails to specify a Purchase Date and to
consummate a Securitization Transaction with respect to a Pool of Seasoned Loans
[**], and (b) Program Lender subsequently sells such a Pool in a transaction
that, if it had been conducted by a Purchaser Trust, would constitute a
Securitization Transaction, THEN FMC will reimburse Program Lender for [**]. For
purposes only of this Section 2.06, the following terms have the following
meanings:
[**]
III. PROCEDURES AND CONDITIONS FOR TRANSFER.
3.01. CONVEYANCES OF BANK OF AMERICA GATE CONFORMING LOANS; CONDITIONS
TO PURCHASE.
9
(a) On each Purchase Date, upon execution and delivery of the related
Pool Supplement, Program Lender shall sell, transfer, assign, set over and
otherwise convey to FMC or the Purchaser Trust, without recourse, all right,
title and interest of Program Lender in and to:
(1) The Seasoned Loans included in the related Pool originated by Program
Lender and all payments due or to become due thereon;
(2) Any proceeds with respect to the Seasoned Loans originated by Program
Lender included in such Pool from recourse to XXXX under the Origination
Services Agreement regarding origination of prepGATE Conforming Loans;
(3) Any claims Program Lender may have under the Servicing Agreement with
respect to acts or omissions of the Servicer affecting the Seasoned Loans being
purchased;
(4) The proceeds of any and all of the foregoing received after the Purchase
Date or received prior thereto and not credited against the Minimum Purchase
Price as computed on the Purchase Date (and, pursuant to Section 3.07, the
Purchaser Trust shall assume certain liabilities of Program Lender thereunder);
(5) All rights of Program Lender under the Guaranty Agreement with respect
to the loans in the Pool.
(b) The obligation of the Purchaser Trust to purchase the Seasoned
Loans originated by Program Lender on the related Purchase Date shall be subject
to satisfaction of the following conditions (each and all of which may be waived
by such Purchaser Trust, in whole or in part in its sole discretion):
(1) Program Lender shall have delivered to the Purchaser Trust a duly
authorized and executed Pool Supplement;
10
(2) Each of the representations and warranties made by Program Lender
pursuant to Section 5.02 with respect to the Seasoned Loans originated by
Program Lender included in such Pool shall be true and correct as of the related
Purchase Date;
(3) The Origination Services Agreement and the Servicing Agreement shall be
in full force and effect as of the related Purchase Date and Program Lender and
Servicer shall have executed and delivered a Servicing Assignment and Servicer
Consent Letter;
(4) Program Lender and XXXX shall have performed and observed the terms and
conditions of this Agreement and the Origination Services Agreement and there
shall not have occurred a default under either the Origination Services
Agreement or the Servicing Agreement;
(5) Program Lender shall have complied with the provisions of the Umbrella
Agreement applicable to the Seasoned Loans included in the Pool;
(6) The loans to be purchased shall have been originated and serviced in
conformity with the Product Specifications and shall be covered by the Guaranty
Agreement;
(7) The Agent pursuant to the Deposit and Security Agreement, shall have
transferred to the indenture trustee in the Securitization Transaction the
portion of the Pledged Account and the Collateral specified in Section 4 of the
Deposit and Security Agreement;
(8) If required by any other Lender whose loans are included in the
Securitization Transaction, the Program Lender shall have executed and delivered
a Co-Lender Indemnification Agreement substantially in the form of Exhibit C;
(9) Program Lender shall, at its own expense, on or prior to the Purchase
Date, indicate in computer files relating to Seasoned Loans that the Seasoned
Loans identified in the related Pool Supplement have been sold to the Purchaser
Trust pursuant to this Agreement and such Pool Supplement;
11
(10) Program Lender shall have executed and delivered for filing a UCC-1
financing statement with respect to the Seasoned Loans originated by Program
Lender included in such Pool in the appropriate office of the jurisdiction in
which the chief executive office of the Program Lender is located (or, in the
event of a change of law, Program Lender shall have taken, but at no additional
cost or expense to the Program Lender, such action as may be reasonably advised
by the Purchaser Trust);
(11) As of such Purchase Date: (i) Program Lender was not insolvent and will
not become insolvent as a result of the transfer of Seasoned Loans on such
Purchase Date, (ii) Program Lender did not intend to incur or believe that it
would incur debts that would be beyond Program Lender's ability to pay as such
debts matured, (iii) such transfer was not made with actual intent to hinder,
delay or defraud any Person, and (iv) Program Lender was "Well Capitalized," as
such term is defined by the Office of the Comptroller of the Currency on the
Purchase Date; and
(12) Program Lender shall have executed and delivered an Indemnification
Agreement substantially in the form of Exhibit D attached hereto, PROVIDED,
HOWEVER, that an Indemnification Agreement shall not be required if FMC executes
and delivers to Program Lender a certificate which states that no Offering
Materials (as defined in Exhibit D attached hereto) were distributed or provided
to any securities purchaser or prospective purchaser in connection with the
Securitization Transaction in question.
(c) The obligation of Program Lender to sell the Seasoned Loans
originated by Program Lender included in the Pool on a related Purchase Date are
subject to satisfaction of the following conditions (each and all of which may
be waived by Program Lender in whole or in part, in its sole discretion):
(1) Purchaser Trust shall have delivered to Program Lender a duly authorized
and executed Pool Supplement;
12
(2) Purchaser Trust shall have paid the Minimum Purchase Price to Program
Lender by wire transfer of immediately available funds within twenty-four (24)
hours after the Purchase Date (such Minimum Purchase Price shall be based on the
best information available from the Servicer as of the Purchase Date; no later
than thirty (30) days following the Purchase Date, the Purchaser Trust shall
recalculate the Minimum Purchase Price to reflect adjustments for transactions
(including, without limitation, additional accrued interest and payments
received), and whichever party is deemed to owe the other such adjustment shall
deliver such adjustment to such other party, by wire transfer of immediately
available funds);
(3) FMC shall have complied with the terms of the Umbrella Agreement
applicable to the Seasoned Loans included in the Pool and no default of FMC
under the Umbrella Agreement relating to any Seasoned Loans shall have
materially impaired the rights of the Program Lender in connection with the
purchase and sale of the Pool to be sold on the Purchase Date;
(4) FMC and Purchaser Trust shall have executed and delivered an
Indemnification Agreement substantially in the form of Exhibit D attached
hereto, PROVIDED, HOWEVER, that an Indemnification Agreement shall not be
required if FMC executes and delivers to Program Lender a certificate which
states that no Offering Materials (as defined in Exhibit D attached hereto) were
distributed or provided to any securities purchaser or prospective purchaser in
connection with the Securitization Transaction in question.
(5) In the event the subject Pool contains loans originated by persons and
entities other than Program Lender (to the extent permitted under the Umbrella
Agreement), each such person and entity shall have delivered to Program Lender a
Co-Lender Indemnification Agreement;
13
(6) If the trustee or other fiduciary under the related Trust Indenture is
not State Street Bank and Trust, Program Lender shall have approved such trustee
or fiduciary, with such approval not to have been unreasonably withheld; and
(7) Program Lender shall have received an opinion of Thacher, Xxxxxxxx &
Xxxx, or other securities counsel to the Purchaser Trust and FMC, addressed to
Program Lender and satisfactory to Program Lender in form and substance. Such
opinion shall, with respect to any securities issued by the Purchaser Trust,
state that nothing has come to the attention of such counsel that would lead it
to believe that the Offering Materials (as defined in the Indemnification
Agreement attached hereto as Exhibit D) in connection with the matters described
therein contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading; PROVIDED, HOWEVER, that Thacher, Xxxxxxxx & Xxxx may
except the B of A Information (as defined in Exhibit D attached hereto) from the
scope of its opinion, and FURTHER PROVIDED, HOWEVER, that such opinion shall not
be required if FMC executes and delivers to Program Lender a certificate which
states that no Offering Materials (as defined in Exhibit D attached hereto) were
distributed or provided to any securities purchaser or prospective purchaser in
connection with the Securitization Transaction in question.
3.02. DELIVERY OF DOCUMENTS.
On the Purchase Date, Program Lender shall deliver to the Servicer, as
agent for the Purchaser Trust and/or to the trustee of the Trust Indenture, each
Bank of America GATE Note originated by Program Lender included in the Pool and
the related Origination Records. If a Co-Lender Indemnification Agreement is
required as a condition of Program Lender's obligations under Section 3.01(c)(4)
hereof, Program Lender shall execute and deliver a Co-Lender Indemnification
Agreement to each lender selling Bank of America GATE Conforming Loans in the
Securitization Transaction.
3.03. CONFIRMATION OF REPRESENTATIONS AND WARRANTIES.
14
In each Pool Supplement, Program Lender shall confirm its
representations and warranties contained in Section 5.02 hereof.
3.04. RIGHTS TRANSFERRED.
The transfer of funds pursuant to Section 2.04 hereof shall constitute,
and the delivery to FMC, or its designated Purchaser Trust of each Pool
Supplement shall evidence, a sale and assignment to FMC or the Purchaser Trust
of the related Seasoned Loans and of all of Program Lender's interest in such
Seasoned Loans. As assignee of such Seasoned Loans, FMC or the Purchaser Trust
shall receive: (i) interest on such Seasoned Loans from and after the Purchase
Date, and (ii) any and all other payments and recoveries received by the
Servicer or Program Lender from the borrowers and cosigners of such Seasoned
Loans, or others pursuant to, or in respect of, such Seasoned Loans from and
after the Purchase Date, and all proceeds thereof.
3.05. SUBSEQUENT RECEIPTS.
In the event that Program Lender shall receive, subsequent to any such
assignment, any amounts whatsoever in respect to the Bank of America GATE
Conforming Loans so assigned in the nature of those described in Section 3.04
above, such amounts shall be held by Program Lender in trust for FMC or the
Purchaser Trust to which it has sold the Notes, and the Program Lender shall
promptly deliver such amounts to the trustee under the Trust Indenture.
3.06. ASSIGNMENT OF ORIGINATION RIGHTS.
Program Lender shall insure that Program Lender's rights under the
Servicing Agreement and the Origination Services Agreement with respect to the
Seasoned Loans in each Pool shall be transferred to FMC or the Purchaser Trust
by execution and delivery of a Servicing Assignment and Servicer Consent Letter.
Program Lender shall require XXXX to complete any loan origination services
being performed for Program Lender under the Origination Services Agreement on
the Purchase Date so
15
that complete Origination Records are ready for transfer to the Purchaser Trust
(or to Servicer on its behalf).
3.07. NO ASSUMPTION OF LIABILITY TO FUND BANK OF AMERICA GATE EDUCATION
LOAN NOTES.
By their purchase of Bank of America GATE Education Loan Notes, FMC, and
all Purchaser Trusts, shall assume no liability, responsibility or obligation
with respect to any payments which are due and owing, or which are, or may be
alleged to be due and owing, by Program Lender to any Participating Institution
or to any GATE Loan borrower by reason of the Seasoned Loans originated by
Program Lender included in the Pool evidenced by the Bank of America GATE
Education Loan Notes. Program Lender shall be solely responsible to fulfill its
obligations under any agreements it may have with Participating Institution
regarding origination and funding of such Seasoned Loans. Notwithstanding the
foregoing, the Purchaser Trust shall assume from Program Lender any liability to
repurchase from XXXX a defaulted Loan upon cure of the default, with respect to
any Loan that would be a Seasoned Loan but for such default and purchase by
XXXX.
3.08. SERVICING AND ORIGINATION COSTS.
Except as expressly set forth in the definition of "Minimum Purchase
Price," Program Lender shall be solely responsible for and shall pay all costs
due to any third party from Program Lender (including, without limitation,
amounts due to Servicer) with respect to origination of Bank of America GATE
Conforming Loans and with respect to loan servicing of Bank of America GATE
Conforming Loans incurred prior to purchase of a Bank of America GATE Conforming
Loan hereunder. FMC shall be solely responsible for and shall pay any
obligations it has incurred in connection with the Bank of America GATE
Conforming Loans.
IV. LIMITATION OF OBLIGATIONS OF FMC AND PURCHASER TRUST.
16
4.01. Except as provided in Section 2.05 of this Agreement, FMC's
obligation in connection with the purchase of Seasoned Loans is [**] to cause a
Securitization Transaction to occur and to use the proceeds thereof to fund the
purchase of Seasoned Loans by a Purchaser Trust. Upon the designation of a
Purchase Date and a Purchaser Trust by FMC, FMC shall be obligated to cause the
consummation of a Securitization Transaction and the payment of the Minimum
Purchase Price to Program Lender; PROVIDED, HOWEVER, that the obligation of FMC
and any Purchaser Trust to consummate the Securitization Transaction shall be
conditioned upon and subject to the receipt by the Purchaser Trust of
Securitization Transaction proceeds net of Securitization Costs equal to or
greater than the Minimum Purchase Price.
V. REPRESENTATIONS AND WARRANTIES.
5.01. REPRESENTATIONS AND WARRANTIES OF FMC.
FMC makes the following representations and warranties as of the date
hereof, as of the date of each purchase of Bank of America GATE Conforming Loans
and as of any other date specified below. FMC shall cause each Purchaser Trust
to make substantially the same representations and warranties in a Pool
Supplement as of the date of each purchase of Bank of America GATE Conforming
Loans:
(a) FMC represents and warrants that it is and shall remain a
Delaware corporation duly organized, validly existing and in good standing under
the laws of the State of Delaware, and has the authority to conduct all
activities contemplated by this Agreement.
(b) FMC has full power and authority to perform its obligations under
this Agreement, and has duly authorized the execution, delivery and performance
of, and has duly delivered this Agreement, and this Agreement constitutes the
legal, valid and binding obligation of FMC
17
enforceable against FMC in accordance with its terms, except that such
enforceability may be limited by bankruptcy, insolvency, reorganization or other
similar laws.
(c) Neither the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby, nor the fulfillment of or
compliance with the terms and conditions hereof, will conflict with, or result
in a breach of, or constitute a default under, any of the terms, conditions or
provisions of any legal restriction or any agreement or instrument to which FMC
is now a party or by which it is bound.
5.02. REPRESENTATIONS AND WARRANTIES OF PROGRAM LENDER.
Program Lender makes the following representations and warranties as of
the date hereof, as of the date of each sale of Seasoned Loans originated by
Program Lender to FMC or a Purchaser Trust, and as of any other date specified
below:
(a) Program Lender represents and warrants that it is, and shall
continue to be, a national banking association duly organized, validly existing
and in good standing under the laws of the United States, and has the authority
to conduct all activities contemplated by this Agreement.
(b) Program Lender has full power and authority to perform its
obligations under this Agreement, and has duly authorized the execution,
delivery and performance of, and has duly delivered this Agreement, and this
Agreement constitutes the legal, valid and binding obligation of Program Lender
enforceable against Program Lender in accordance with its terms, except as such
enforceability may be limited by (i) receivership, conservatorship and
supervisory powers of bank regulatory agencies generally, (ii) applicable
bankruptcy, receivership, conservatorship, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights generally from time
to time in effect, or (iii) general principles of equity.
18
(c) Neither the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby, nor the fulfillment of or
compliance with the terms and conditions hereof, will conflict with, or result
in a breach of, or constitute a default under, any of the terms, conditions or
provisions of any legal restriction or any agreement or instrument to which
Program Lender is now a party or by which it is bound.
(d) Each of the Seasoned Loans originated by Program Lender sold to
FMC or a Purchaser Trust pursuant to any Securitization Transaction is the
valid, binding and enforceable obligation of the borrower executing the same,
and of any cosigner thereto, enforceable against each borrower, any student
maker named therein, and any cosigner thereunder in accordance with its terms
except as enforceability may be affected by bankruptcy, insolvency, moratorium
or other similar laws affecting the rights of creditors generally and by
equitable principles.
(e) Each Seasoned Loan originated by Program Lender sold hereunder
and any accompanying notices and disclosures conforms to all applicable state
and federal laws, rules and regulations. The origination of each Seasoned Loan
by Program Lender was conducted in accordance with all applicable state and
federal laws concerning the actions of the Participating Institution and Program
Lender including, without limitation, the Equal Credit Opportunity Act. No
application to Program Lender for a Bank of America GATE Conforming Loan shall
be, or has been, rejected, approved or discouraged by Program Lender on the
basis of race, sex, color, religion, national origin, age (other than laws
limiting the capacity to enter a binding contract) or marital status, the fact
that all or a part of the borrower's or co-signer's, income derives from any
public assistance program, or the fact that the applicant, borrower or any
co-signer has, in good faith, exercised any right under the Consumer Credit
Protection Act.
19
(f) Each Seasoned Loan originated by Program Lender sold to FMC or
Purchaser Trust is in compliance in all material respects with any applicable
usury laws at the time made and of the time of assignment to FMC or a Purchaser
Trust.
(g) Program Lender has no actual knowledge of any defense to payment
with respect to any Seasoned Loan sold under this Agreement. There is no action
before any state or federal court, administrative or regulatory body, pending or
threatened against Program Lender in which an adverse result would have a
material adverse effect upon the validity or enforceability of Seasoned Loans
originated by Program Lender and included in the Pool.
(h) Each and every Seasoned Loan sold pursuant to this Agreement is
free and clear of any liens, claims or demands of any person claiming by or
through Program Lender, and Program Lender has the absolute right to transfer
the same to FMC or a Purchaser Trust.
(i) With respect to each GATE Note originated by Program Lender and
included in the Pool, the terms thereof have not been impaired, waived, altered
or modified in any respect, except pursuant to written forbearance agreements in
accordance with the requirements of and in the terms set forth in the Product
Specifications.
5.03. EXCLUSIVE REPRESENTATIONS AND WARRANTIES.
The representations and warranties set forth in Section 5.02 above are
the sole and exclusive representations and warranties made by the Program
Lender, its representatives, agents, officers, directors and other employees,
with respect to this Agreement, any Pool Supplement, any Bank of America GATE
Conforming Loan, any obligor, and the sale of any Bank of America GATE
Conforming Loan to the Purchaser Trust hereunder or otherwise.
5.04. REMEDY FOR BREACH OF REPRESENTATIONS AND WARRANTIES.
20
In the event any representation or warranty made by Program Lender
pursuant to Section 5.02 above shall prove to be inaccurate or incomplete [**]
as of the date when made, Program Lender shall have the right (but not the
obligation) to elect by written notice to FMC to be given by Program Lender no
later than sixty (60) days after receipt of written notice from FMC of such
alleged breach to repurchase the affected Seasoned Loan or Loans no later than
such 60th day for a cash purchase price equal to the outstanding principal
balance thereof plus all accrued and unpaid interest. Upon receipt of said
repurchase price, FMC shall, or, if applicable, shall cause the Purchaser Trust
or the Servicer to, deliver the GATE Note and the Origination Records relating
thereto to Program Lender, duly endorsed or assigned to Program Lender or to
such person as Program Lender may direct, in any such case, without recourse to
FMC or the Purchaser Trust. [**] If Program Lender shall not so elect to
repurchase the affected Seasoned Loans within said sixty (60) day period, then
Program Lender shall indemnify FMC, the Purchaser Trust and any fiduciary under
the Trust Agreement from any and all loss, cost, damage and expense, including
reasonable attorneys' fees and legal expenses and sums paid, liabilities
incurred or expenses paid or incurred in connection with settling claims,
counterclaims, defenses, suits or judgments or obtaining or attempting to obtain
release from liability, in any such case by reason of any alleged breach
specified in such written notice given by FMC to the Program Lender.
VI. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND INDEMNITIES.
As to any Seasoned Loans purchased hereunder, the representations and
warranties contained herein and the indemnifications contained in Article VIII
hereof with respect to such Seasoned Loans shall survive until each such
Seasoned Loan is paid in full.
VII. MISCELLANEOUS.
7.01. NO ASSIGNMENT.
21
No party may assign its rights or obligations under this Agreement
without the prior written consent of the parties hereto, PROVIDED, HOWEVER,
that: (a) Program Lender may assign its rights hereunder to an Affiliate that is
a national banking association having the legal power and right under applicable
law (including, without limitation, usury law in the State where it is located)
to make Bank of America GATE Conforming Loans, and (b) FMC shall have the right
to create a Purchaser Trust to exercise FMC's rights to purchase each Pool. No
assignment shall relieve the assignor of liability hereunder. Any assignment in
violation hereof shall be automatically null and void.
7.02. AMENDMENT.
This Agreement may not be amended nor terms or provisions hereof waived
unless such amendment or waiver is in writing and signed by all parties hereto.
7.03. NO WAIVER.
No delay or failure by any party to exercise any right, power or remedy
hereunder shall constitute a waiver thereof by such party, and no single or
partial exercise by any party of any right, power or remedy shall preclude other
or further exercise thereof or any exercise of any other rights, powers or
remedies.
7.04. ENTIRE AGREEMENT.
This Agreement and the documents and agreements referred to herein
embody the entire agreement and understanding among the parties hereto and
supersede all prior agreements and understandings relating to the subject matter
hereof and thereof.
7.05. NOTICES.
All notices given by any party to the others under this Agreement shall
be in writing delivered: (a) personally, (b) by facsimile transmission, (c) by
overnight courier, prepaid, or (d) by depositing the same in the United States
mail, certified, return receipt requested, with postage prepaid, addressed to
22
the party at the address set forth below. Any party may change the address to
which notices are to be sent by notice of such change to each other party given
as provided herein. Such notices shall be effective on the date received.
Notices shall be given as follows:
If to Program Lender:
Xxxxx Xxxxxx
Bank of America
National Student Lending Group
000 Xxxxx Xxxxxxxx Xxxxxx, 0xx xxxxx
Xxxx, XX 00000
With a copy to:
Xxxx Xxxxx
Bank of America
000 Xxxxxxxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
If to FMC:
Xxxxxx Xxxxxxx Xxxxxx
The First Marblehead Corporation
00 Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
With a copy to:
Xxxxxxx X. Xxxxxxx, Esq.
Xxxxxx Xxxxxx
Xxx Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
7.06. ATTORNEYS' FEES.
In the event of a lawsuit or arbitration proceeding arising out of or
relating to this Agreement, the prevailing party shall be entitled to recover
costs and reasonable attorneys' fees incurred in connection with the lawsuit or
arbitration proceeding, as determined by the court or arbitrator.
7.07. GOVERNING LAW.
23
This Agreement shall be governed by and construed in accordance with the laws of
the State of California (without reference to choice-of-law rules).
7.08. COUNTERPARTS.
This Agreement may be executed in any number of counterparts, all of
which together shall constitute one agreement.
7.09. NO THIRD PARTIES BENEFITED.
This Agreement is made and entered into for the protection and legal
benefit of the parties, and their permitted successors and assigns (including,
without limitation, any Purchaser Trust), and each and every Indemnified Person
(all of which shall be entitled to enforce the Indemnity contained in Sections
8.01 and 8.02 hereof), and no other person shall be a direct or indirect legal
beneficiary of, or have any direct or indirect cause of action or claim in
connection with, this Agreement.
7.10. OPINIONS.
Concurrent with the execution hereof, each party shall deliver to the
other the opinion of its corporate counsel (which may be internal counsel) to
the effect that this Agreement has been duly authorized by all necessary
corporate or other organizational action, this Agreement is within the corporate
or other organizational power of such party and that this Agreement has been
duly executed and delivered by an authorized officer of the party.
VIII. INDEMNIFICATION.
8.01. BY PROGRAM LENDER - SECURITIES MATTERS.
Subject to the limitations on remedies for breach of representations and
warranties set forth in Section 5.04 above, Program Lender shall indemnify and
hold harmless FMC, each Purchaser Trust and any fiduciary under any Trust
Indenture, and any officer, director, employee or agent of any of the foregoing
(herein, collectively, referred to as the "Indemnified Persons") against any and
all liabilities,
24
losses, costs, damages and expenses, including, without limitation, attorneys'
fees and legal expenses and sums paid, liabilities incurred or expenses paid or
incurred in connection with settling claims, suits or judgments or obtaining or
attempting to obtain release from liability under the Trust Indenture or this
Agreement which such Indemnified Person may sustain or incur by reason of any
untrue statement of a material fact in any Offering Materials (as defined in the
form of Co-Lender Indemnification Agreement) or by any failure to state in such
Offering Materials a material fact necessary to make the statements therein not
misleading (but only to the extent the same relate to information relating to
Program Lender and the Bank of America GATE Conforming Loans originated by
Program Lender furnished in writing by Program Lender expressly for use in the
applicable Offering Materials). This section shall survive any termination of
this Agreement.
8.02. BY PROGRAM LENDER - SPECIAL.
Notwithstanding any repurchase of Seasoned Loans under Section 5.04
hereof, IN THE EVENT THAT: (a) a claim, counterclaim or defense to payment of a
Bank of America GATE Conforming Loan (hereinafter a "claim") is asserted against
FMC, a Purchaser Trust or any other Indemnified Person, the substance of which
claim, if true, would constitute a material breach or misrepresentation of the
representations and warranties contained in any of subsections 5.02(d), (e), or
(f) AND (b) such claim is not dismissed or abandoned as against such Indemnified
Person following a repurchase under Section 5.04, THEN (c) Program Lender shall
indemnify and hold harmless such Indemnified Person from all costs of defense of
such claim and all costs of settlement and/or payment of a judgment on such
claim.
IX. DISPUTE RESOLUTION
9.01. INFORMAL DISPUTE RESOLUTION.
Any controversy or claim between the parties arising from or in
connection with this Agreement or the relationship of the parties under this
Agreement whether based on contract, tort, common law,
25
equity, statute, regulation, order or otherwise, and whether arising before or
after the termination of this Agreement ("Dispute") shall be resolved as
follows:
(a) Upon written request of either party, the parties will each
appoint a designated representative whose task it will be to meet for the
purpose of endeavoring to resolve such Dispute.
(b) The designated representatives shall meet as often as the parties
reasonably deem necessary to discuss the problem in an effort to resolve the
Dispute without the necessity of any formal proceeding.
(c) Arbitration proceedings for the resolution of a Dispute under
Section 9.02 may not be commenced until the earlier of:
(i) the designated representatives conclude in good faith that amicable
resolution through continued negotiation of the matter does not appear likely;
or
(ii) the expiration of the thirty (30) day period immediately following the
initial request to negotiate the Dispute.
9.02. ARBITRATION.
If the provisions of Section 9.01 have been satisfied, but the Dispute
has not been resolved, then the Dispute shall be settled pursuant to the
following:
(a) Any controversy or claim between or among the parties arising out
of or relating to this Agreement or any agreements or instruments relating
hereto or delivered in connection herewith and any claim based on or arising
from an alleged tort, shall at the request of any party be determined by
arbitration. The arbitration shall be conducted in accordance with the United
States Arbitration Act (Title 9, U.S. Code), notwithstanding any choice of law
provision in this Agreement, and under the Commercial Rules of the American
Arbitration Association ("AAA"). The arbitrator(s) shall give effect to statutes
of limitation in determining any claim. Any controversy concerning whether an
issue is arbitrable shall be determined by the arbitrator(s). Judgment upon the
arbitration award may be
26
entered in any court having jurisdiction. The institution and maintenance of an
action for judicial relief or pursuit of a provisional or ancillary remedy shall
not constitute a waiver of the right of any party, including the plaintiff, to
submit the controversy or claim to arbitration if any other party contests such
action for judicial relief.
(b) No provision of this Section shall limit the right of any party
to this Agreement to exercise self-help remedies such as setoff, foreclosure
against or sale of any real or personal property collateral or security, or
obtaining provisional or ancillary remedies from a court of competent
jurisdiction before, after, or during the pendency of any arbitration or other
proceeding. The exercise of a remedy does not waive the right of either party to
resort to arbitration or reference. At the option of any party holding a deed of
trust, foreclosure under such deed of trust or mortgage may be accomplished
either by exercise of power of sale under the deed of trust or mortgage or by
judicial foreclosure.
9.03. PERMISSIBLE LEGAL PROCEEDINGS.
Notwithstanding anything contained in Sections 9.01 and 9.02, (a) a
party may institute legal proceedings to seek a temporary restraining order or
other temporary or preliminary injunctive relief to prevent immediate and
irreparable harm to such party, and for which monetary damages would be
inadequate, pending final resolution of the dispute, controversy or claim
pursuant to arbitration, and (b) a party may institute legal proceedings if
necessary to preserve a superior position with respect to other creditors. Such
conduct shall not constitute a waiver of the right of either party to resort to
arbitration to obtain relief other than that specified in this Section 9.03.
X. TERM AND TERMINATION.
10.01. TERM.
27
This Agreement shall remain in full force and effect until the later of
(a) expiration or termination of the Umbrella Agreement, or (b) the expiration
of the Option Period of all Bank of America GATE Conforming Loans made pursuant
to the Umbrella Agreement. After termination of this Agreement, certain
obligations hereunder shall survive as provided in Article VI hereof.
28
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
WITNESS: BANK OF AMERICA NA
/s/ Sherrif X. Xxxx By: /s/ X X Xxxxxx
--------------------------------- ------------------------------
Print Name: Sherrif X. Xxxx Print Name: X X Xxxxxx
---------------------- ----------------------
Title: SVP
--------------------------
THE FIRST MARBLEHEAD CORPORATION
/s/ Xxxx Xxxxx By: /s/ Xxxxx Xxxxx
--------------------------------- ------------------------------
Print Name: Xxxx Xxxxx Print Name: Xxxxx Xxxxx
---------------------- ----------------------
Title: COO
---------------------------
29
NOTE PURCHASE AGREEMENT
INDEX TO EXHIBITS
Exhibit A Pool Supplement
Exhibit B Servicing Assignment and Servicer Consent Letter
Exhibit C Co-Lender Indemnification Agreement
Exhibit D Indemnification Agreement
30
EXHIBIT A TO NOTE PURCHASE AGREEMENT
[Form of Pool Supplement]
This Pool Supplement ("Supplement") is entered into pursuant to and
forms a part of that certain Note Purchase Agreement (the "Agreement") dated as
of April 30, 2001, by and between The First Marblehead Corporation ("FMC") and
Bank of America NA. This Supplement is dated ___________________, ______.
Capitalized terms used in this Supplement without definitions have the meaning
set forth in the Agreement.
ARTICLE 1: PURCHASE AND SALE.
In consideration of the Minimum Purchase Price set forth in Schedule 1
attached hereto, Program Lender hereby transfers, sells, sets over and assigns
to [name of purchasing entity] ("Purchaser Trust"), upon the terms and
conditions set forth in the Agreement (which are incorporated herein by
reference with the same force and effect as if set forth in full herein), each
Seasoned Loan described in the attached Schedule 2. Program Lender hereby
transfers and delivers to Purchaser Trust each Bank of America GATE Note
evidencing such Seasoned Loan and all Origination Records relating thereto, in
accordance with the terms of the Agreement. Purchaser Trust hereby purchases
said Seasoned Loans and Bank of America GATE Notes on said terms and conditions.
ARTICLE 2: PRICE.
The amounts paid pursuant to this Supplement are:
"Minimum Purchase Price" shall mean the sum of:
(a) The unpaid principal amount of the Seasoned Loans in question [**]; plus
(b) all accrued and unpaid interest on such Seasoned Loans, [**]; plus
(c) [**], the amount of any guaranty fee paid by Program Lender to XXXX. If
the terms of the Guaranty Agreement call for any Guaranty Fees to be paid to
XXXX [**]; plus
(d) a partial reimbursement for [**] costs incurred and paid by Program
Lender with respect to [**] such reimbursement to equal [**].
Purchase Price is: $__________________
ARTICLE 3: REPRESENTATIONS AND WARRANTIES.
3.01. BY PROGRAM LENDER.
Program Lender repeats the representations and warranties contained in
Section 5.02 of the Agreement and confirms the same are true and correct as of
the date hereof.
31
3.02. BY PURCHASER TRUST.
The Purchaser Trust hereby represents and warrants to the Program Lender
that at the date of execution and delivery of this Supplement by the Purchaser
Trust:
(a) The Purchaser Trust is duly organized and validly existing as a
business trust under the laws of the State of Delaware with the due power and
authority to own its properties and to conduct its business as such properties
are currently owned and such business is presently conducted, and had at all
relevant times, and has, the power, authority and legal right to acquire and own
the Bank of America GATE Conforming Loans.
(b) The Purchaser Trust is duly qualified to do business and has
obtained all necessary licenses and approvals, in all jurisdictions in which the
ownership or lease of property or the conduct of its business shall require such
qualifications.
(c) The Purchaser Trust has the Power and authority to execute and
deliver this Pool Supplement and to carry out its respective terms; the
Purchaser Trust has the power and authority to purchase the Seasoned Loans and
rights relating thereto as provided herein from the Program Lender and the
Purchaser Trust has duly authorized such purchase from the Program Lender by all
necessary action; and the execution, delivery and performance of this Pool
Supplement has been duly authorized by the Purchaser Trust by all necessary
action on the part of the Purchaser Trust.
(d) This Pool Supplement, together with the Agreement of which this
Supplement forms a part, constitutes a legal, valid and binding obligation of
the Purchaser Trust, enforceable in accordance with its terms.
(e) The consummation of the transactions contemplated by the
Agreement and this Supplement and the fulfillment of the terms hereof do not
conflict with, result in any breach of any of the terms and provisions of, or
constitute (with or without notice or lapse of time) a default under, the
governing instruments of the Purchaser Trust or any indenture, agreement or
other instrument to which the Purchaser Trust is a party or by which it is
bound; or result in the creation or imposition of any lien upon any of its
properties pursuant to the terms of any such indenture, agreement or other
instrument; or violate any law or any order, rule or regulation applicable to
the Purchaser Trust of any court or of any federal or state regulatory body,
administrative agency or other governmental instrumentality having jurisdiction
over the Purchaser Trust or its properties.
(f) There are no proceedings or investigations pending, or
threatened, before any court, regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Purchaser Trust or its
properties: (1) asserting the invalidity of the Agreement or this Pool
Supplement, (2) seeking to prevent the consummation of any of the transactions
contemplated by the Agreement or this Pool Supplement, or (3) seeking any
determination or ruling that is likely to materially or adversely affect the
performance by the Purchaser Trust of its obligations under, or the validity or
enforceability of the Agreement or this Pool Supplement.
ARTICLE 4: CROSS RECEIPT.
32
Program Lender hereby acknowledges receipt of the Minimum Purchase
Price. Purchaser Trust hereby acknowledges receipt of the Seasoned Loans and the
Bank of America GATE Notes included in the Pool.
ARTICLE 5: ASSIGNMENT OF ORIGINATION AND SERVICING RIGHTS.
Program Lender has assigned and set over to Purchaser Trust so much of
its rights under the Origination Services Agreement and the Servicing Agreement
as relate to the Seasoned Loans described in Schedule 2, including, without
limitation, the right to continued loan servicing under the Servicing Agreement
pursuant to a Servicing Assignment and Servicer consent Letter delivered
herewith.
IN WITNESS WHEREOF, the parties have caused this Supplement to be
executed as of the date set forth above.
PURCHASER NAME:
---------------------------------
By:
By:
-------------------------------
Print Name:
-----------------------
Title:
----------------------------
BANK OF AMERICA NA
By:
-----------------------------
Print Name:
-----------------------
Title:
----------------------------
33
Schedule 1 to Pool Supplement
(SAMPLE)
SETTLEMENT SCHEDULE
FMC 200__-S-__
XYZ UNIVERSITY
Disbursement Date # of Loans Face Value Amount Disbursed
-------------------------------------------------------------------------------
[TO BE REVISED]
34
EXHIBIT B TO
NOTE PURCHASE AGREEMENT
[PROGRAM LENDER NAME]
SERVICING ASSIGNMENT AND
SERVICER CONSENT LETTER
[Applies ONLY if Program Lender holds
Servicing Agreement and FMC does
not hold direct agreement with Servicer]
[DATE]
[Servicer Name and Address]
Attention: President
Ladies and Gentlemen:
Reference is hereby made to that certain Servicing Agreement (the
"Servicing Agreement"), dated __________, by and between [Servicer Name] (the
"Servicer") and [Program Lender Name] ("Program Lender"), a copy of which is
attached hereto as Exhibit A. Capitalized terms not otherwise defined herein
shall have the meanings set forth in the Servicing Agreement. Pursuant to
Section ____ of the Servicing Agreement, the parties hereto agree as follows:
1. Program Lender hereby assigns its interest in the Servicing Agreement
with respect to the student loans identified on the attached Schedule I(the
"Student Loans") to [Name of Securitization SPE] ("SPE"), and the Servicer
hereby consents thereto.
2. The Servicer hereby consents to the assignment and grant by [SPE] of
a security interest in the Servicing Agreement to [Name of Securitization
Indenture Trustee] (the "Trustee"), as provided in the Indenture, dated as of
[DATE] between [SPE] and the Trustee (the "Indenture"), for the benefit of the
Bondholders (as defined below) and MBIA Insurance Corporation (the "Bond
Insurer").
[3. Program Lender hereby assigns its interest in the Origination
Agreement, dated _________, by and between the Servicer and Program Lender (the
"Origination Agreement"), a copy of which is attached hereto as Exhibit B, to
[SPE], with respect to the Student Loans. The Servicer hereby consents to the
foregoing assignment by Program Lender and of the assignment and grant by [SPE]
to the Trustee of a security interest in the Origination Agreement, as provided
in the Indenture, for the benefit of the Bondholders and the Bond Insurer.]
4. The Servicer hereby confirms that it will not terminate the Servicing
Agreement until the appointment of a successor servicer by [SPE], with the
consent of the Bond Insurer for so long as Bonds are outstanding, unless the
Servicing Agreement otherwise expires in accordance with its terms.
5. [SPE] hereby confirms that (i) it will not terminate the Servicer for
cause pursuant to Section ____ of the Servicing Agreement (a) without the
consent of the Bond Insurer for so long as Bonds are outstanding, and (b) until
a successor servicer acceptable to the Bond Insurer is appointed, and (ii) it
will terminate the Servicer for cause pursuant to Section ____ of the Servicing
Agreement, if directed by the Bond Insurer to do so.
35
6. The representations and warranties of the Servicer in the Servicing
Agreement are true and correct in all material respects at and on the date
hereof (the "Closing Date"), with the same effect as if made on the Closing
Date.
7. The Servicer hereby confirms that it has complied with all the
agreements and satisfied all the conditions on its part to be performed or
satisfied under the Servicing Agreement.
8. The Servicer agrees not to cause the filing of a petition in
bankruptcy against [SPE] for the nonpayment to the Servicer of any amounts owed
to it under the Servicing Agreement until at least 366 days after the payment in
full of the Bonds.
9. The Servicer hereby agrees to provide the Bond Insurer with copies of
all notices, reports and other information at the same time and in the same
manner in which such information is required to be given to Program Lender and
[SPE] pursuant to the Servicing Agreement or other information as is requested
by the Bond Insurer. In addition, for so long as any Bonds are outstanding, any
action that requires the consent of [SPE] under the Servicing Agreement,
including, without limitation, any amendment to the Servicing Agreement with
respect to the Student Loans, shall also require the prior consent of the Bond
Insurer.
10. The Servicer hereby agrees to provide the Bond Insurer with its
quarterly and annual audited financial statements.
11. The Servicer hereby grants the Bond Insurer the right for so long as
any of the Bonds remain outstanding, to perform ongoing due diligence review of
the Servicer's servicing activities with respect to the Student Loans provided
that such due diligence be conducted in a reasonable manner, convenient to both
the Servicer and the Bond Insurer.
12. It is expressly understood and agreed by the parties hereto that (a)
this Agreement is executed and delivered by [SPE Owner Trustee], not
individually or personally solely as Owner Trustee of [SPE] under the Trust
Agreement dated as of [DATE], with [SPE Sponsor], in the exercise of the powers
and authority conferred and vested in it, (b) each of the representations,
undertakings and agreements herein made on the part of the Trust is made and
intended not as personal representations, undertaking and agreements by the
Owner Trustee but is made and intended for the purpose for binding only the
Trust, (c) nothing herein contained shall be construed as creating any liability
on the Owner Trustee, individually or personally, to perform any covenant either
expressed or implied contained herein, all such liability, if any, being
expressly waived by the parties hereby and by any Person claiming by, through or
under the parties hereto, and (d) under no circumstances shall the Owner Trustee
be personally liable for the payment of any indebtedness or expenses of the
Trust or be liable for the breach or failure of any obligation, representation,
warranty or covenant made or undertaken by the Trust under this Agreement or the
other Trust Related Documents.
13. The parties hereto acknowledge and agree that for so long as any
Bonds are outstanding, the Bond Insurer is a third-party beneficiary hereof and
of the Servicing Agreement, and the Bond Insurer shall have the right to
exercise all rights of [SPE] under the Servicing Agreement.
36
Please acknowledge your acceptance and agreement to the foregoing by
signing and returning the enclosed duplicate letter.
Very truly yours,
PROGRAM LENDER
By:
--------------------------
Print Name:
Title:
Accepted and Agreed:
[SERVICER
_____________________]
By:
------------------------------
Print Name:
Title:
[SPE NAME]
By: [OWNER TRUSTEE]
By:
------------------------------
Print Name:
Title:
37
EXHIBIT C TO
NOTE PURCHASE AGREEMENT
CO-LENDER INDEMNIFICATION AGREEMENT
THIS CO-LENDER INDEMNIFICATION AGREEMENT (the "Agreement") is made as of
[DATE], by and between [Names and Addresses of Co-Lenders] ("Co-Lender"), and
BANK OF AMERICA NA ("BOA"), a national banking association organized under the
laws of the United States, with its headquarters and principal place of business
located at _____________ (Co-Lender and BOA are sometimes collectively referred
to as the "Program Lenders" and are each sometimes severally referred to as a
"Program Lender").
RECITALS
A. The Program Lenders are participants in the GATE: Guaranteed Access
to Education(R) Program and/or the Bank of America GATE(R) Loan Program and/or
the prepGATE(SM) Loan Program (collectively, the "GATE Program") pursuant to
which each of the Program Lenders originate educational loans (the "GATE Loans")
to pay the costs of attending institutions of education which are themselves
participants in the GATE Program (the "Participating Institutions").
B. Each of the Program Lenders, individually, have entered into an
agreement (each, a "Purchase Agreement") with The
First Marblehead Corporation
or The National Collegiate Trust, pursuant to which Purchase Agreements such
Program Lenders have agreed to sell certain GATE Loans to [Name of Purchasing
Entity] (the "Purchaser Trust"), each such purchase to be funded through the
issuance and sale of certificates, bonds or other evidences of indebtedness, the
repayment of which are supported by such GATE Loans (the "Subject Securitization
Transaction").
C. As a condition precedent to the obligation of each Program Lender to
consummate the sale of GATE Loans originated by them to the Purchaser Trust, all
Program Lenders whose GATE Loans will be included in the Subject Securitization
Transaction are required to execute and deliver to the other Program Lenders a
copy of this Agreement.
NOW, THEREFORE, in consideration of the foregoing Recitals and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
REPRESENTATIONS AND WARRANTIES
1.01 Each Program Lender represents and warrants to each other Program
Lender, as to itself, that as of the date hereof:
(a) It is and shall continue to be a national banking association, duly
organized, validly existing and in good standing under the laws of the United
States and has the power and authority to originate and/or hold GATE Loans, to
consummate the transaction contemplated by the Purchase Agreement to which it is
a party, and to execute and deliver and perform its obligations under this
Agreement;
38
(b) This Agreement has been duly authorized, executed and delivered and
constitutes its legal, valid and binding obligation, enforceable against it in
accordance with its terms except as enforceability may be limited by (a) the
receivership, conservatorship and similar supervisory powers of bank regulatory
agencies generally, as well as bankruptcy, insolvency, liquidation,
receivership, moratorium, reorganization or other similar laws affecting the
enforcement of the rights of creditors; (b) general principles of equity
(including availability of equitable remedies), whether enforcement is sought in
a proceeding in equity or at law; and (c) applicable securities laws and public
policy considerations underlying the securities laws to the extent that such
public policy considerations limit the enforceability of the provisions of this
Agreement which purport to provide indemnification with respect to securities
law liabilities;
(c) Each GATE Loan included in the Subject Securitization Transaction
originated by it is the valid, binding and enforceable obligation of the
borrower executing the same, and of any cosigner thereto, enforceable against
the borrower and cosigner thereunder in accordance with its terms except as
enforceability may be affected by bankruptcy, insolvency, moratorium or other
similar laws affecting the rights of creditors generally and by equitable
principles;
(d) Each GATE Loan included in the Subject Securitization Transaction
originated by it and any accompanying notices and disclosures conforms to all
applicable state and federal laws, rules and regulations and the origination
thereof was conducted in accordance with all applicable state and federal laws
concerning the actions of the Participating Institution and the Program Lender,
including, without limitation, the Equal Credit Opportunity Act;
(e) Each GATE Loan included in the Subject Securitization Transaction
originated by it is in compliance in all material respects with any applicable
usury laws at the time made and as of the time of sale to the Purchaser Trust
pursuant to the Purchase Agreement to which the Program Lender is a party; and
(f) The Program Lender has no actual knowledge of any defense to payment
with respect to any GATE Loan included in the Subject Securitization Transaction
originated by it nor is there any action before any state or federal court,
administrative or regulatory body, pending or threatened against the Program
Lender in which an adverse result would have a material adverse effect upon the
validity or enforceability of any such GATE Loan.
ARTICLE 2
INDEMNIFICATION
2.01 Cross-Indemnification. Each Program Lender (an "Indemnifying Program
Lender") hereby agrees to indemnify, hold harmless and defend each other Program
Lender and such other Program Lender's respective officers, directors,
employees, attorneys, agents (not including any Participating Institution or the
servicer of any GATE Loan) and each person who controls such other Program
Lender within the meaning of either Section 15 of the Securities Act of 1933, as
amended, or Section 20 of the Securities Exchange Act of 1934, as amended
(collectively and severally, the "Indemnified Parties"), from and against any
and all claims, obligations, penalties, actions, suits, judgments, costs,
disbursements, losses, liabilities and/or damages (including, without
limitation, reasonable external attorneys' fees and the allocated costs of
internal salaried attorneys) of any kind whatsoever which may at any time be
imposed on, assessed against or incurred by any such Indemnified Party in any
way relating to or arising out of the inaccuracy or incompleteness of any
39
representation or warranty made by the Indemnifying Program Lender hereunder or
the inaccuracy or incompleteness of any representation or warranty made by the
Indemnifying Program Lender to any Participating Institution in connection with
the GATE Program or the Subject Securitization Transaction. The indemnity
provided by each Indemnifying Program Lender hereunder is in addition to any
liability which such Program Lender may otherwise have to the Indemnified
Parties, at law, in equity or otherwise, in connection with the Subject
Securitization Transaction.
2.02 Procedure for Indemnification. In case any proceeding (including any
governmental investigation) shall be instituted against any Indemnified Party in
respect of which indemnity is sought pursuant to Section 2.01, such Indemnified
Party shall promptly notify the applicable Indemnifying Program Lender in
writing. The Indemnifying Program Lender, upon request of the Indemnified Party,
shall acknowledge its obligation, subject to the terms hereof, to indemnify the
Indemnified Party in writing and shall retain counsel reasonably satisfactory to
the Indemnified Party to represent the Indemnified Party and any others the
Indemnifying Program Lender may designate in such proceeding and the
Indemnifying Program Lender shall pay the fees and disbursements of such counsel
related to such proceeding, within a reasonable period of time after such fees
and disbursements are billed by such counsel. If the Indemnifying Program Lender
fails to acknowledge its obligation, subject to the terms hereof, to indemnify
in writing or fails to retain such counsel within a reasonable period of time
after such notice was given, then the Indemnified Party shall have the right to
retain its own counsel, and the fees and expenses of such counsel shall be at
the expense of the Indemnifying Program Lender. In any such proceeding, any
Indemnified Party shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Party
unless (a) the preceding sentence is applicable, (b) the Indemnifying Program
Lender and the Indemnified Party shall have mutually agreed to the retention of
such counsel or (c) the named parties to any such proceeding (including any
impleaded parties) include both the Indemnifying Program Lender and the
Indemnified Party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them. It
is understood that the Indemnifying Program Lender shall not, in connection with
any proceeding or related proceedings in the same jurisdiction, be liable for
the reasonable fees and expenses of more than one separate firm (in addition to
any local counsel) for all such Indemnified Parties, and that all such fees and
expenses shall be reimbursed as they are incurred.
2.03 Settlements of Proceedings. The Indemnifying Program Lender shall not
be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the Indemnifying Program Lender agrees to indemnify the
Indemnified Party from and against any loss or liability by reason of such
settlement or judgment. No Indemnifying Program Lender, without the prior
written consent of the Indemnified Party, shall effect any settlement of any
pending or threatened proceeding in respect of which any Indemnified Party is or
could have been a party and indemnity could have been sought hereunder by such
Indemnified Party, unless such settlement includes an unconditional release of
such Indemnified Party from all liability on claims that are the subject of such
proceeding.
ARTICLE 3
MISCELLANEOUS
3.01 Notices. All demands, notices and communications upon or to any
Program Lender under this Agreement shall be in writing, personally delivered or
mailed by certified mail, return receipt requested, to such Program Lender at
its address set forth below or to such other address as may
40
hereafter be furnished by such Program Lender to the other Program Lenders
hereunder in writing, and shall be deemed to have been duly given upon receipt.
If to Co-Lender:
_________________________
_________________________
_________________________
with a copy to:
_________________________
_________________________
_________________________
If to BOA:
Xxxxx Xxxxxx
Bank of America
National Student Lending Group
000 Xxxxx Xxxxxxxx Xxxxxx, 0xx xxxxx
Xxxx, XX 00000
with a copy to:
Xxxx Xxxxx
Bank of America
000 Xxxxxxxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
3.02 Successors and Assigns. This Agreement is binding on the Program
Lenders and their respective successors and assigns. No Program Lender shall
assign its rights or obligations under this Agreement without the prior written
consent of all other Program Lenders hereunder, and any assignment in violation
of this prohibition shall be automatically deemed null and void.
3.03 Arbitration.
(a) Any controversy or claim between or among the Program Lenders hereunder
arising out of or relating to this Agreement or any agreements or instruments
relating hereto or delivered in connection herewith and any claim based on or
arising from an alleged tort relating hereto, shall, at the request of any
party, be determined by arbitration. The arbitration shall be conducted in
accordance with the United States Arbitration Act (Title 9, U.S. Code),
notwithstanding any choice of law provision of this Agreement, and under the
Commercial Rules of the American Arbitration Association ("AAA"). The
arbitrator(s) shall give effect to statutes of limitation in determining any
claim. Any controversy concerning whether an issue is arbitrable shall be
determined by the arbitrator(s). Judgment upon the arbitration award may be
entered in any court having jurisdiction. The institution and maintenance of
41
an action for judicial relief or pursuit of a provisional or ancillary remedy
shall not constitute a waiver of the right of any party, including the
plaintiff, to submit the controversy or claim to arbitration if any other party
contests such action for judicial relief.
(b) No provision of this Section 3.03 shall limit the right of any party to
this Agreement to exercise self-help remedies such as setoff, foreclosure
against or sale of any real or personal property collateral or security, or
obtaining provisional or ancillary remedies from a court of competent
jurisdiction before, after, or during the pendency of any arbitration or other
proceeding. The exercise of a remedy does not waive the right of either party to
resort to arbitration or reference.
3.04 Costs and Attorneys' Fees. In the event of a lawsuit or arbitration
proceeding arising out of or relating to this Agreement, the prevailing
party(ies) is (are) entitled to recover costs and reasonable attorneys' fees
(including the allocated cost of internal salaried attorneys) incurred in
connection with the lawsuit or arbitration proceeding, as determined by the
court or arbitrator.
3.05 Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
3.06 Counterparts. This Agreement may be executed by the parties hereto in
separate counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute but one and the
same instrument.
3.07 Headings. The headings of the various Articles and Sections herein are for
convenience of reference only and shall not define or limit any of the terms or
provisions hereof.
3.08 Amendment. This Agreement may not be amended nor terms or provisions hereof
waived unless such amendment or waiver is in writing and signed by all parties
hereto.
3.09 No Waiver. No delay or failure by any party to exercise any right, power or
remedy hereunder shall constitute a waiver thereof by such party, and no single
or partial exercise by any party of any right, power or remedy shall preclude
other or further exercise thereof or any exercise of any other rights, powers or
remedies.
3.10 Entire Agreement. This Agreement embodies the entire agreement and
understanding between the parties with respect to the subject matter hereof and
supersedes all prior agreements and understandings relating to the subject
matter hereof and thereof.
3.11 Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Delaware without regard to its
conflict of laws doctrine.
3.12 No Third Party Beneficiaries. This Agreement is made and entered into for
the protection and legal benefit of the parties hereto, their permitted
successors and assigns, and each and every Indemnified Party, and no other
person shall be a direct or indirect beneficiary of, or have any direct or
indirect cause of action or claim in connection with, this Agreement.
42
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the day and year first above written.
CO-LENDER(S)
By:
--------------------------------
Print Name:
Title:
BANK OF AMERICA NA
By:
--------------------------------
Print Name:
Title:
43
EXHIBIT D TO
NOTE PURCHASE AGREEMENT
INDEMNIFICATION AGREEMENT
This INDEMNIFICATION AGREEMENT (the "Agreement") is made _________________,
2000, by and among [NAME OF PURCHASER TRUST (the "Trust"), The
First Marblehead
Corporation ("First Marblehead"), and BANK OF AMERICA NA ("B of A").
WITNESSETH:
WHEREAS, pursuant to that certain
Note Purchase Agreement dated April 30,
2001 (the "
Note Purchase Agreement") between First Marblehead, as purchaser, and
B of A, B of A will sell to the Trust and the Trust will purchase from B of A
certain Bank of America GATE Conforming Loans ("Contracts");
WHEREAS, contemporaneously with the transactions contemplated by the Note
Purchase Agreement, the Trust will sell securities backed by a pool consisting
of the Contracts (the "Securitization");
WHEREAS, First Marblehead assists the Trust in the Securitization process;
and
WHEREAS, the parties wish to set forth their agreements with respect to
certain aspects of the Securitization, on the terms and subject to the
conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
set forth herein, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01. DEFINITIONS. Capitalized terms used herein without
definition have the meanings assigned thereto in the Note Purchase Agreement.
Whenever used in this Agreement, the following words and phrases shall have the
following meanings:
"Agreement" means this Indemnification Agreement, as it may be amended from
time to time.
"Commission" means the Securities and Exchange Commission.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time.
"B of A Information" means solely the information set forth [to be
determined]
"Indemnified Party" has the meaning set forth in Section 4.03.
"Indemnifying Party" has the meaning set forth in Section 4.03.
"Offering Materials" means: (a) any private placement memoranda and any
other offering material given in connection with a sale or offer to sell,
whether or not such sale or offer to sell was required to be registered under
the Securities Act, and (b) any Registration Statement filed with the
44
Commission pursuant to which any Contract or interest therein is sold or offered
for sale, including the Prospectus relating thereto and any preliminary
prospectuses and amendments and supplements to such Registration Statement,
Prospectus and preliminary prospectus, including post-effective amendments and
all exhibits and all material incorporated by reference therein.
"Prospectus" has the meaning given to such term in the Securities Act.
"Registration Statement" has the meaning given to such term in the
Securities Act.
"Securities" means securities backed by the pool of Contracts that are to
be issued by the Trust.
"Securities Act" means the Securities Act of 1933, as amended from time to
time.
"Transaction Documents" means the Note Purchase Agreement and the Pool
Supplement issued pursuant thereto.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
Each of the Trust and First Marblehead jointly and severally represents and
warrants to B of A, and B of A hereby represents and warrants to the Trust and
First Marblehead, as of the date hereof and the Purchase Date, as follows:
(1) It is a corporation, business trust, or, in the case of B of A, a
national banking association, duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, and it has the
corporate power to own its assets and to transact the respective business in
which it is currently engaged. It is duly qualified to do business as a foreign
corporation or other entity and is in good standing in each jurisdiction in
which its type of organization and the character of the business transacted by
it or properties owned or leased by it requires such qualification and in which
the failure to so qualify would have a material adverse effect on its business,
properties, assets, or condition (financial or other);
(2) It has obtained all necessary licenses and approvals, in all
jurisdictions in which the ownership or lease of property or the conduct of its
business and its type of organization requires such licenses or approvals unless
the failure to obtain any such licenses or approvals would have no material
adverse effect on the ability of such party to fulfill its obligations
hereunder;
(3) It has the power and authority to execute and deliver this Agreement
and to carry out the terms hereof; and the execution, delivery and performance
of this Agreement by it has been duly authorized by all necessary action;
(4) This Agreement constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms except as enforcement of
such terms may be limited by bankruptcy, insolvency or similar laws affecting
the enforcement of creditors' rights generally and by the availability of
equitable remedies, and except as enforcement of any terms relating to
indemnification may be limited by applicable securities law;
45
(5) For B of A and the Trust only, the consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof do not
conflict with, result in any breach of any of the terms and provisions of, or
constitute (with or without notice or lapse of time) a default under, its
governing documents, or any material indenture, agreement or other instrument to
which it is a party or by which it is bound; or result in the creation or
imposition of any lien upon any of its properties pursuant to the terms of any
such indenture, agreement or other instrument; or violate any law or any order,
rule or regulation applicable to it of any court or of any federal or state
regulatory body, administrative agency or other governmental instrumentality
having jurisdiction over it or its properties; and
(6) There are no proceedings or investigations pending, or threatened,
before any court, regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over it or its properties: (1) asserting the
invalidity of this Agreement (2) seeking to prevent the consummation of any of
the transactions contemplated by this Agreement, or (3) seeking any
determination or ruling that is likely to materially and adversely affect the
performance by it of its obligations hereunder or the validity and
enforceability of this Agreement.
ARTICLE 3
CONDITIONS TO CLOSING
[Intentionally Omitted]
ARTICLE 4
INDEMNIFICATION
SECTION 4.01. INDEMNIFICATION BY FIRST MARBLEHEAD AND THE TRUST. The
Trust and First Marblehead jointly and severally agree to indemnify, hold
harmless and defend B of A, its officers, directors, employees, attorneys,
agents and each Person who controls B of A within the meaning of either Section
15 of the Securities Act or Section 20 of the Exchange Act, as follows:
(a) against any and all loss, liability, claim, damage and expense
whatsoever arising out of any untrue statement or alleged untrue statement of a
material fact contained in any Offering Materials under the heading, [to be
determined] ["Method of Distribution"] or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements therein,
in light of the circumstances under which they were made, not misleading;
(b) against any and all loss, liability, claim, damage and expense
whatsoever to the extent of the aggregate amount paid in settlement of any
litigation, or investigation or proceeding by any governmental agency or body,
commenced or threatened, or of any claim whatsoever, based upon any such untrue
statement or omission, or any such inaccuracy, if such settlement is effected
with the written consent of the Trust and First Marblehead; and
(c) against any and all expense whatsoever (including the fees and
disbursements of counsel chosen by the B of A) reasonably incurred in
investigating, preparing or defending against any litigation, or investigation
or proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever, based upon any such untrue statement or omission, or any
such inaccuracy, to the extent that any such expense is not paid under (a) or
(b) above.
46
This indemnity agreement will be in addition to any liability which the
Trust and First Marblehead may otherwise have.
SECTION 4.02. INDEMNIFICATION BY B OF A. B of A agrees to indemnify and
hold harmless the Trust and First Marblehead and each person, if any, who
controls NCT or First Marblehead within the meaning of Section 15 of the
Securities Act of 1933, as amended (the "1993 Act"), as follows:
(a) against any and all loss, liability, claim, damage and expense
whatsoever arising out of any untrue statement or alleged untrue statement of a
material fact contained in the B of A Information (or any amendment or
supplement thereto approved in writing by B of A) or the omission or alleged
omission therefrom of a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading;
(b) against any and all loss, liability, claim, damage and expense
whatsoever to the extent of the aggregate amount paid in settlement of any
litigation, or investigation or proceeding by any governmental agency or body,
commenced or threatened, or of any claim whatsoever, based upon any such untrue
statement or omission, or any such inaccuracy, if such settlement is effected
with the written consent of B of A; and
(c) against any and all expense whatsoever (including the fees and
disbursements of counsel chosen by the Trust and First Marblehead) reasonably
incurred in investigating, preparing or defending against any litigation, or
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever, based upon any such untrue statement or
omission, or any such inaccuracy, to the extent that any such expense is not
paid under (a) or (b) above.
This indemnity agreement will be in addition to any liability which B of A
may otherwise have.
SECTION 4.03. PROCEDURE FOR INDEMNIFICATION. In case any proceeding
(including any governmental investigation) shall be instituted involving any
Person in respect of which indemnity may be sought pursuant to Section 4.01 or
4.02, such Person (hereinafter called the "Indemnified Party") shall promptly
notify the person against whom such indemnity may be sought (hereinafter called
the "Indemnifying Party") in writing. The Indemnifying Party, upon request of
the Indemnified Party, shall acknowledge its obligation, subject to the terms
hereof, to indemnify the Indemnified Party in writing and shall retain counsel
reasonably satisfactory to the Indemnified Party to represent the Indemnified
Party and any others the Indemnifying Party may designate in such proceeding and
the Indemnifying Party shall pay the fees and disbursements of such counsel
related to such proceeding, as and when such fees and disbursements are billed
by such counsel. If the Indemnifying Party fails to acknowledge its obligation,
subject to the terms hereof, to indemnify in writing or fails to retain such
counsel within a reasonable period of time after such notice was given, then the
Indemnified Party shall have the right to retain its own counsel, and the fees
and expenses of such counsel shall be at the expense of the Indemnifying Party.
In any such proceeding, any Indemnified Party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such Indemnified Party unless (a) the preceding sentence is applicable, (b)
the Indemnifying Party and the Indemnified Party shall have mutually agreed to
the retention of such counsel or (c) the named parties to any such proceeding
(including any impleaded parties) include both the Indemnifying Party and the
Indemnified Party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them. It
is
47
understood that the Indemnifying Party shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for the
reasonable fees and expenses of more than one separate firm (in addition to any
local counsel) for all such Indemnified Parties, and that all such fees and
expenses shall be reimbursed as they are incurred.
SECTION 4.04. SETTLEMENTS OF PROCEEDINGS. The Indemnifying Party shall
not be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the Indemnifying Party agrees to indemnify the Indemnified Party
from and against any loss or liability by reason of such settlement or judgment.
No Indemnifying Party, without the prior written consent of the Indemnified
Party, shall effect any settlement of any pending or threatened proceeding in
respect of which any Indemnified Party is or could have been a party and
indemnity could have been sought hereunder by such Indemnified Party, unless
such settlement includes an unconditional release of such Indemnified Party from
all liability on claims that are the subject matter of such proceeding.
SECTION 4.05. CONTRIBUTION. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in
Sections 4.01 and 4.02 hereof is for any reason held to be unenforceable by the
Indemnified Parties although applicable in accordance with its terms, B of A, on
the one hand, and the Trust and First Marblehead, on the other, shall contribute
to the aggregate losses, liabilities, claims, damages and expenses of the nature
contemplated in Sections 4.01 and 4.02 that are incurred by B of A, the Trust
and First Marblehead in such proportions that (i) the Trust and First Marblehead
shall be responsible for that portion represented by the percentage that the
gross fee earnings of First Marblehead in the Securitization bear to the sum of
such fees and the purchase price paid by the Trust for the Contracts, and (ii) B
of A shall be responsible for the balance; PROVIDED, HOWEVER, that no person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the 0000 Xxx) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
The Trust, First Marblehead and B of A agree that it would not be just and
equitable if contribution pursuant to this Section 4.05 were determined by PRO
RATA allocation or by any other method of allocation that does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an Indemnified Party pursuant to
Section 4.01 or 4.02 shall be deemed to include, subject to the limitations set
forth above, any legal or other expense reasonably incurred by such Indemnified
Party in connection with investigating or defending any such action or claim. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
ARTICLE 5
MISCELLANEOUS
SECTION 5.01. NOTICES. All demands, notices and communications upon or
to B of A, the Trust and First Marblehead under this Agreement shall be in
writing, personally delivered or mailed by certified mail, return receipt
requested, and shall be deemed to have been duly given upon receipt (a) The
First Marblehead Corporation, 00 Xxxxxx Xxxxxx, Xxxxxxxxxx, XX 00000; (b)
[ADDRESS FOR PURCHASER TRUST], (c) B of A
______________________________________________________, or such other address as
may hereafter be furnished to the other parties in writing.
48
SECTION 5.02. SUCCESSORS AND ASSIGNS. This Agreement is binding on B of
A's, the Trust's and First Marblehead's successors and assignees. Each party
hereto agrees that it will not assign this Agreement without the other parties'
prior written consent.
SECTION 5.03. ARBITRATION.
(a) Any controversy or claim between or among the parties arising out of
or relating to this Agreement or any agreements or instruments relating hereto
or delivered in connection herewith and any claim based on or arising from an
alleged tort, shall at the request of any party, be determined by arbitration.
The arbitration shall be conducted in accordance with the United States
Arbitration Act (Title 9, U.S. Code), notwithstanding any choice of law
provision in this Agreement, and under the Commercial Rules of the American
Arbitration Association ("AAA"). The arbitrator(s) shall give effect to statutes
of limitation in determining any claim. Any controversy concerning whether an
issue is arbitrable shall be determined by the arbitrator(s). Judgment upon the
arbitration award may be entered in any court having jurisdiction. The
institution and maintenance of an action for judicial relief or pursuit of a
provisional or ancillary remedy shall not constitute a waiver of the right of
any party, including the plaintiff, to submit the controversy or claim to
arbitration if any other party contests such action for judicial relief.
(b) No provision of this Section 5.03 shall limit the right of any party
to this Agreement to exercise self-help remedies such a setoff, foreclosure
against or sale of any real or personal property collateral or security, or
obtaining provisional or ancillary remedies from a court of competent
jurisdiction before, after, or during the pendency of any arbitration or other
proceeding. The exercise of a remedy does not waive the right of either party to
resort to arbitration or reference.
SECTION 5.04. COSTS AND ATTORNEYS' FEES. In the event of a lawsuit or
arbitration proceeding arising out of or relating to this Agreement, the
prevailing party is entitled to recover costs and reasonable attorneys' fees
incurred in connection with the lawsuit or arbitration proceeding, as determined
by the court or arbitrator.
SECTION 5.05. SEVERABILITY. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 5.06. COUNTERPARTS. This Agreement may be executed by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 5.07. HEADINGS. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
SECTION 5.08. LIMITATION OF RECOURSE TO THE TRUST. Notwithstanding any
provision of this Agreement to the contrary, all obligations of the Trust under
this Agreement shall be payable only from the rights of the Trust in the
Contracts. No recourse shall be had against the general funds of the Trust, nor
against any income or proceeds of the Contracts not available, in accordance
with the Trust Instrument, for distribution. To the extent that the interests of
the Trustee and the bond holders under
49
the Trust Instrument are fully satisfied, or if proceeds of the Contracts are
otherwise distributed to the owners of the Trust free and clear of claims of
said Trustee (as defined in the Trust Instrument), claims against the Trust may
be satisfied from the Contracts or the distributable proceeds thereof.
BANK OF AMERICA NA
By:
---------------------------
Print Name:
Title:
[NAME OF PURCHASER TRUST]
By: [NAME OF TRUSTEE], not in its individual capacity but SOLELY in its capacity
as Trustee
By:
---------------------------
Print Name:
Title:
THE
FIRST MARBLEHEAD CORPORATION
By:
---------------------------
Print Name:
Title:
50
