<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
------------------
Date of Report: August 29, 1996
NELLIE MAE EDUCATION FUNDING,LLC
(Exact name of registrant as specified in its charter)
(Depositor of the Nellie Mae Education Loan Trust)
333-4418
------------
(Commission
File Number)
Delaware 04-3318763
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(State or other (IRS Employer
jurisdiction of Identification No.)
incorporation)
50 Braintree Hill Park - Suite 300
Braintree, Massachusetts 02184
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (617) 849-1325
N/A
--------------------------------------------------------------
(Former name or former address, if changed since last report.)
Page 1 of 8
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ITEM 5. OTHER EVENTS.
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On August 15, 1996, the Nellie Mae Education Loan Trust (the "Trust)
made its first regular, monthly distribution of funds to holders of the Trust's
1996 Libor Rate Asset-Backed Class A-1 and Class A-2 Notes (the "1996 Notes")
and its 1996 Libor Rate Asset-Backed Certificates (the "1996 Certificates").
The Monthly Statement which was distributed to State Street Bank and Trust as
indenture trustee for distribution to Noteholders and to Fleet National Bank as
owner trustee for distribution to Certificateholders is filed herewith as an
Exhibit to this Form 8-K.
In reliance upon certain no-action letters, including but not limited
to letters to (i) the SMS Student Loan Trust 1994-A available to the public on
March 1, 1995; (ii) Banc One Student Loan Trust available to the public on March
1, 1995; (iii) Chase Manhattan Bank Guaranteed Export Trust 1994-A available to
the public on June, 1 1994, the Registrant is hereby filing the Monthly
Statement reflecting the Trust's activities for the period ending August 15,
1996, including a statistical summary of the delinquency and default
characteristics of the Trust's student loan portfolio. On August 9, 1996, the
Registrant requested that the Chief Counsel, Division of Corporation Finance of
the Securities and Exchange Commission issue a no-action letter relating to the
Nellie Mae Education Loan Trust.
In addition, in connection with the issuance by Nellie Mae Education
Loan Trust of the 1996 Notes and the 1996 Certificates, the following documents
were executed and delivered by the respective parties thereto on July 12, 1996:
1. Master Trust Indenture dated as of June 1, 1996.
2. First Terms Supplement dated as of June 1, 1996.
3. Trust Agreement dated as of June 1, 1996.
4. First Trust Supplement dated as of June 1, 1996.
5. Master Terms Purchase Agreement dated as of June 1, 1996.
6. First Supplemental Purchase Agreement dated as of July 12, 1996.
7. Master Terms Sales Agreement dated as of June 1, 1996.
8. First Supplemental Sales Agreement dated as of July 12, 1996.
9. Administration Agreement dated as of June 1, 1996.
Page 2 of 8
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On two occasions since the initial purchase of student loans by the
Nellie Mae Education Loan Trust, the Nellie Mae Education Loan Trust has
purchased additional student loans from amounts on deposit in the 1996-A
Pre-Funding Subaccount. On July 12, 1996 Nellie Mae Education Loan Trust
purchased additional student loans for a purchase price of $2,634,355.77 and on
July 15, 1996 Nellie Mae Education Loan Trust purchased additional student loans
for a purchase price of $14,226,475.05. In connection with these two subsequent
purchases of student loans, the following documents were executed and delivered
by the respective parties thereto:
1. Second Supplemental Purchase Agreement dated as of July 12, 1996.
2. Second Supplemental Sales Agreement dated as of July 12, 1996.
3. Third Supplemental Purchase Agreement dated as of July 15, 1996,
1996.
4. Third Supplemental Sales Agreement dated as of July 15, 1996,
1996.
<TABLE>
The interest rates for the Interest Period commencing August 15, 1996
are as follows:
<CAPTION>
1996 Securities Interest Rate
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<S> <C>
Class A-1 Notes 5.59188%
Class A-2 Notes 5.68188%
Certificates 6.04688%
</TABLE>
In addition, as of August 15, 1996, the amount remaining in the 1996-A
Subaccount of the Pre-Funding Account was $40,443,750.25.
The balance in the Debt Service Reserve Fund on August 15, 1996 was
$1,188,387.70, after giving effect to changes therein on such date.
During the Interest Period ending August 15, 1996, there were no
realized losses and no interest was deferred with respect to the 1996 Notes or
the 1996 Certificates.
Page 3 of 8
<PAGE> 4
ITEM 7. EXHIBITS.
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4.1 Master Trust Indenture dated as of June 1, 1996 between Nellie Mae
Education Loan Trust and State Street Bank and Trust Company, as
Indenture Trustee.
4.2 First Terms Supplement to the Master Trust Indenture.
4.3 Trust Agreement dated as of June 1, 1996 between Nellie Mae Education
Funding, LLC and Fleet National Bank as Owner Trustee.
4.4 First Trust Supplement to the Trust Agreement.
99.1 Master Terms Purchase Agreement dated as of June 1, 1996 between Nellie
Mae, Inc. and Nellie Mae Funding, LLC.
99.2 First Supplemental Purchase Agreement dated as of July 12, 1996.
99.3 Master Terms Sales Agreement dated as of June 1, 1996 between Nellie
Mae Education Funding, LLC and Nellie Mae Education Loan Trust.
99.4 First Supplemental Sales Agreement dated as of July 12, 1996.
99.5 Administration Agreement dated as of June 1, 1996 among Nellie Mae,
Inc., State Street Bank and Trust Company, Fleet National Bank and
Nellie Mae Education Loan Trust.
99.6 Second Supplemental Purchase Agreement dated as of July 12, 1996.
99.7 Second Supplemental Sales Agreement dated as of July 12, 1996.
Page 4 of 8
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99.8 Third Supplemental Purchase Agreement dated as of July 15, 1996.
99.9 Third Supplemental Sales Agreement dated as of July 15, 1996.
99.10 Monthly Statement to Noteholders and Certificateholders
Page 5 of 8
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: August 29, 1996
NELLIE MAE EDUCATION FUNDING, LLC
/s/ John F. Remondi
---------------------------------
John F. Remondi
Chief Financial Officer
Page 6 of 8
<PAGE> 7
EXHIBIT INDEX
Exhibit Page
- ------- ----
(4.1) Master Trust Indenture dated as of June 1, 1996
between Nellie Mae Education Loan Trust and
State Street Bank and Trust Company, as
Indenture Trustee.
(4.2) First Terms Supplement to the Master
Trust Indenture.
(4.3) Trust Agreement dated as of June 1, 1996
between Nellie Mae Education Funding, LLC
and Fleet National Bank as Owner Trustee.
(4.4) First Trust Supplement to the Trust Agreement.
(99.1) Master Terms Purchase Agreement dated as of
June 1, 1996 between Nellie Mae, Inc. and
Nellie Mae Funding, LLC.
(99.2) First Supplemental Purchase Agreement dated
as of July 12, 1996.
(99.3) Master Terms Sales Agreement dated as of
June 1, 1996 between Nellie Mae Education
Funding, LLC and Nellie Mae Education Loan
Trust.
(99.4) First Supplemental Sales Agreement dated
as of July 12, 1996.
(99.5) Administration Agreement dated as of
June 1, 1996 among Nellie Mae, Inc.,
State Street Bank and Trust Company,
Fleet National Bank and Nellie Mae Education
Loan Trust.
(99.6) Second Supplemental Purchase Agreement dated
as of July 12, 1996.
Page 7 of 8
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(99.7) Second Supplemental Sales Agreement dated
as of July 12, 1996.
(99.8) Third Supplemental Purchase Agreement dated
as of July 15, 1996.
(99.9) Third Supplemental Sales Agreement dated
as of July 15, 1996.
(99.10) Monthly Statement to Noteholders and Certificateholders
Page 8 of 8
<PAGE> 1
EXHIBIT 4.1
MASTER TRUST INDENTURE
between
NELLIE MAE EDUCATION LOAN TRUST,
as Issuer
and
STATE STREET BANK AND TRUST COMPANY,
as Indenture Trustee
Dated as of June 1, 1996
<PAGE> 2
CROSS-REFERENCE TABLE
<TABLE>
<CAPTION>
TIA Indenture
Section Section
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<S> <C>
310 (a)(1).............................................................6.11
(a)(2).............................................................6.11
(a)(3) ..........................................................6.10
(a)(4)...................................................Not Applicable
(a)(5).............................................................6.11
(b)...........................................................6.8; 6.11
(c)......................................................Not Applicable
311 (a)................................................................6.12
(b)................................................................6.12
(c)......................................................Not Applicable
312 (a).........................................................8.1; 8.2(a)
(b)..............................................................8.2(b)
(c)..............................................................8.2(c)
313 (a).................................................................6.6
(b).................................................................6.6
(c)................................................................11.5
(d).................................................................6.6
314 (a)...........................................................5.12; 8.3
(b)................................................................5.10
(c).........................................................2.13; 10.1;
11.10
(d).........................................................2.13; 11.10
(e)...............................................................11.10
(f)......................................................Not Applicable
315 (a)............................................................6.1; 6.2
(b).................................................................6.5
(c).................................................................6.1
(d).................................................................6.1
(e).................................................................7.9
316 (a)(1)(A)...........................................................7.8
(a)(1)(B)...........................................................7.6
(a)(2)...................................................Not Applicable
(b)................................................................7.10
(c).................................................................1.1
317 (a).................................................................7.3
(b).................................................................5.9
318 (a)...............................................................11.12
(c)...............................................................11.12
</TABLE>
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This table shall not be deemed to be a part of this Indenture.
<PAGE> 3
ARTICLE 1
DEFINITIONS
<TABLE>
<S> <C>
SECTION 1.1. Definitions and Usage.............................................................. 1
SECTION 1.2. Incorporation by Reference of Trust Indenture Act.................................. 1
ARTICLE 2
THE NOTES
SECTION 2.1. Authorization....................................................................... 2
SECTION 2.2. Form................................................................................ 2
SECTION 2.3. Execution and Authentication of Notes............................................... 2
SECTION 2.4. Notes Issuable in Series and Classes; General Provisions with
Respect to Principal and Interest Payments.......................................... 3
SECTION 2.5. Denominations....................................................................... 3
SECTION 2.6. Books of Registry................................................................... 3
SECTION 2.7. Transfer of Notes; Exchange of Notes................................................ 3
SECTION 2.8. Mutilated, Lost, Stolen or Destroyed Notes.......................................... 4
SECTION 2.9. Disposition and Destruction of Notes................................................ 5
SECTION 2.10. Temporary Notes..................................................................... 5
SECTION 2.11. Execution and Delivery of Notes..................................................... 6
SECTION 2.12. Book-Entry System for Notes......................................................... 8
SECTION 2.13. Payment of Principal and Interest.................................................. 10
SECTION 2.14. Release of Collateral.............................................................. 11
SECTION 2.15. No Listing on Securities Market.................................................... 11
ARTICLE 3
PAYMENT OF THE NOTES PRIOR TO MATURITY
SECTION 3.1. Payment of the Notes Prior to Maturity............................................. 11
ARTICLE 4
DISPOSITION OF PROCEEDS; ESTABLISHMENT OF FUNDS AND ACCOUNTS;
APPLICATION OF REVENUES
SECTION 4.1. Disposition of Proceeds............................................................ 12
SECTION 4.2. Debt Service Reserve Fund.......................................................... 13
SECTION 4.3. Student Loan Acquisition Fund...................................................... 13
SECTION 4.4. Student Loan Portfolio Fund........................................................ 14
SECTION 4.5. Revenue Fund....................................................................... 15
SECTION 4.6. Note Fund.......................................................................... 16
SECTION 4.7. Services Fund...................................................................... 17
SECTION 4.8. Pledge............................................................................. 18
SECTION 4.9. Investments........................................................................ 18
SECTION 4.10. Termination.........................................................................19
</TABLE>
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<TABLE>
<S> <C>
Page
ARTICLE 5
COVENANTS TO SECURE NOTE
SECTION 5.1. Performance of Covenants; the Issuer............................................... 19
SECTION 5.2. Instruments of Further Assurance................................................... 19
SECTION 5.3. Recording and Filing............................................................... 20
SECTION 5.4. Compliance with and Enforcement of Financed Loans, Servicing
Agreement, Custody Agreement, Sales Agreement and Administration
Agreement.......................................................................... 20
SECTION 5.5. Repurchase of Financed Loans....................................................... 20
SECTION 5.6. Issuer Status...................................................................... 20
SECTION 5.7. Statements by Issuer Regarding Financed Loans and Other Matters.................... 20
SECTION 5.8. Maintenance of Office or Agency.................................................... 20
SECTION 5.9. Money for Payments To Be Held in Trust............................................. 21
SECTION 5.10. Opinions as to Indenture Trust Estate.............................................. 21
SECTION 5.11. Restricted Payments................................................................ 22
SECTION 5.12. Annual Statement as to Compliance.................................................. 22
SECTION 5.13. No Other Business.................................................................. 22
SECTION 5.14. No Borrowing....................................................................... 22
SECTION 5.15. Capital Expenditures............................................................... 22
SECTION 5.16. Guarantees, Loans, Advances and Other Liabilities.................................. 22
SECTION 5.17. Servicing of Financed Loans........................................................ 23
ARTICLE 6
CONCERNING THE INDENTURE TRUSTEE
SECTION 6.1. Duties of Indenture Trustee........................................................ 23
SECTION 6.2. Rights of Indenture Trustee........................................................ 24
SECTION 6.3. Individual Rights of Indenture Trustee............................................. 24
SECTION 6.4. Indenture Trustee's Disclaimer..................................................... 24
SECTION 6.5. Notice of Defaults................................................................. 24
SECTION 6.6. Reports by Indenture Trustee to Noteholders........................................ 25
SECTION 6.7. Compensation and Indemnity......................................................... 25
SECTION 6.8. Replacement of Indenture Trustee................................................... 26
SECTION 6.9. Successor Indenture Trustee by Merger.............................................. 26
SECTION 6.10. Appointment of Co-Trustee or Separate Owner Trustee................................ 27
SECTION 6.11. Eligibility; Disqualification...................................................... 28
SECTION 6.12. Preferential Collection of Claims Against Issuer................................... 28
SECTION 6.13. Statements by Indenture Trustee of Funds and Accounts and
Other Matters...................................................................... 28
</TABLE>
ii
<PAGE> 5
<TABLE>
<S> <C>
Page
ARTICLE 7
DEFAULTS AND REMEDIES
SECTION 7.1. Events of Default.................................................................. 28
SECTION 7.2. Application of Moneys.............................................................. 29
SECTION 7.3. Suits at Law or in Equity; Direction of Action by Holders.......................... 31
SECTION 7.4. Suits by Individual Holders........................................................ 32
SECTION 7.5. Remedies Not Exclusive............................................................. 32
SECTION 7.6. Waivers of Default................................................................. 32
SECTION 7.7. Notice of Events of Default........................................................ 33
SECTION 7.8. Control by Noteholders............................................................. 33
SECTION 7.9. Undertaking for Costs.............................................................. 33
SECTION 7.10. Unconditional Rights of Noteholders To Receive Principal and
Interest........................................................................... 33
ARTICLE 8
NOTEHOLDERS' LISTS AND REPORTS
SECTION 8.1. Issuer to Furnish Indenture Trustee Names and Addresses
of Noteholders..................................................................... 34
SECTION 8.2. Preservation of Information; Communications to Noteholders......................... 34
SECTION 8.3. Reports by Issuer.................................................................. 34
ARTICLE 9
AMENDING AND SUPPLEMENTING OF INDENTURE
SECTION 9.1. Amending and Supplementing of Indenture Without Consent
of Noteholders..................................................................... 35
SECTION 9.2. Amendment of Indenture with Consent of Holders..................................... 37
SECTION 9.3. Execution of Supplemental Indentures............................................... 38
SECTION 9.4. Effect of Supplemental Indenture................................................... 38
SECTION 9.5. Conformity with Trust Indenture Act................................................ 38
SECTION 9.6. Reference in Notes to Supplemental Indentures.......................................38
ARTICLE 10
SATISFACTION AND DISCHARGE OF INDENTURE;
SUBSTITUTION AND RELEASE OF INDENTURE ESTATE
SECTION 10.1. Satisfaction and Discharge of Indenture............................................ 39
SECTION 10.2. Application of Trust Money......................................................... 39
SECTION 10.3. Repayment of Moneys Held by Paying Agent........................................... 40
SECTION 10.4. Substitution and Release of Indenture Trust Estate................................. 40
</TABLE>
iii
<PAGE> 6
<TABLE>
<S> <C>
Page
SECTION 10.5. Opinion of Counsel................................................................. 40
SECTION 10.6. Notes Not Presented for Payment When Due; Moneys Held for
the Notes after Due Date Thereof................................................... 41
ARTICLE 11
MISCELLANEOUS
SECTION 11.1. Benefits of Indenture.............................................................. 41
SECTION 11.2. Indenture Binding Upon Successors or Assigns of the Issuer......................... 41
SECTION 11.3. Effect of Legal Holidays........................................................... 41
SECTION 11.4. Partial Invalidity................................................................. 41
SECTION 11.5. Notices; Notice to Shareholders; Waiver............................................ 42
SECTION 11.6. Governing Law...................................................................... 42
SECTION 11.7. Effect of Article and Section Headings and Table of Contents....................... 42
SECTION 11.8. Suspension of Mail................................................................. 43
SECTION 11.9. Execution Counterparts............................................................. 43
SECTION 11.10. Compliance Certificates and Opinions, etc.......................................... 43
SECTION 11.11. Form of Documents Delivered to Indenture Trustee................................... 44
SECTION 11.12. Conflict with Trust Indenture Act.................................................. 45
SECTION 11.13. Recording of Indenture............................................................. 45
SECTION 11.14. Trust Obligations.................................................................. 45
SECTION 11.15. No Petition........................................................................ 45
SECTION 11.16. Usury.............................................................................. 45
</TABLE>
EXHIBITS
A - Definitions
B - Form of Note
C - Certificate of Financed Loans
D - Form of Monthly Statements
iv
<PAGE> 7
MASTER TRUST INDENTURE
THIS MASTER TRUST INDENTURE has been made and entered into as of June
1, 1996 by and between the NELLIE MAE EDUCATION LOAN TRUST, a Massachusetts
business trust (the "Issuer" or the "Trust"), and STATE STREET BANK AND TRUST
COMPANY, a Massachusetts trust company, as trustee and not in its individual
capacity (the "Indenture Trustee").
The Issuer has duly authorized the execution and delivery of this
Indenture to provide for one or more series (each, a "Series") of its Notes (the
"Notes"), issuable as provided in this Indenture. Each Series of such Notes will
be issued only under a separate supplement (a "Terms Supplement") to this
Indenture duly executed and delivered by the Issuer and the Indenture Trustee
and limited to the amount therein described. All covenants and agreements made
by the Issuer herein are for the benefit and security of the Holders of the
Notes. The Issuer is entering into this Indenture and the Indenture Trustee is
accepting the trusts created hereby for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged.
All conditions precedent to make this Indenture a valid agreement of
the Issuer in accordance with its terms have been done.
ARTICLE 1
DEFINITIONS AND USAGE
SECTION 1.1. DEFINITIONS AND USAGE. Unless the context shall clearly
indicate some other meaning or may otherwise require, capitalized terms used but
not defined herein are defined in Exhibit A hereto (as supplemented to the
extent indicated therein, by the provisions of the Terms Supplement for a
particular Series), which also contains rules as to construction and usage that
are applicable herein.
SECTION 1.2. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means, if requested in writing by
the Administrator, this Indenture.
"indenture trustee" or "institutional trustee" means the
Indenture Trustee.
"obligor" on the indenture securities means the Issuer and any
other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by
Commission rule have the meaning assigned to them by such definitions.
<PAGE> 8
ARTICLE 2
THE NOTES
SECTION 2.1. AUTHORIZATION. There is hereby authorized the borrowing of
funds, and to evidence such borrowings there is hereby authorized to be issued
from time to time, without limitation, one or more Series, each of which Series
may consist of one or more Classes, of Notes which shall be designated generally
as the "Asset-Backed Notes" of the Issuer, with such further particular
designations added or incorporated in such title for the Notes of any particular
Series or Class as the Issuer may determine.
SECTION 2.2. FORM. The Notes and the Indenture Trustee's certificate of
authentication shall be issued in fully registered form in substantially the
form set forth in Exhibit B, with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture or any Terms Supplement and may have such letters, numbers or other
marks of identification and such legends or endorsements placed thereon as may,
consistently herewith, be determined by the officers executing such Notes, as
evidenced by their execution of the Notes. Any portion of the text of any Note
may be set forth on the reverse thereof, with an appropriate reference thereto
on the face of the Note.
The definitive Notes shall be typewritten, printed, lithographed or
engraved or produced by any combination of these methods (with or without steel
engraved borders), all as determined by the officers executing such Notes, as
evidenced by their execution.
Each Note shall be dated the date of its authentication. The terms of
the Notes set forth in Exhibit B are part of the terms of this Indenture.
SECTION 2.3. EXECUTION AND AUTHENTICATION OF NOTES. After their
authorization by a Terms Supplement, the Notes shall be executed on behalf of
the Issuer by any of its Authorized Officers. The signature of any such
Authorized Officer on the Notes may be by manual or facsimile. The Notes shall
be authenticated by the manual signature of an authorized officer of the
Authenticating Agent.
Only such of the Notes as shall bear thereon a certificate of
authentication and registration substantially in the form set forth in Exhibit B
hereto, manually executed by an authorized officer of the Authenticating Agent,
shall be valid or obligatory for any purpose or entitled to the benefits of this
Indenture, and such certificate of authentication shall be conclusive evidence
that the Notes so authenticated have been duly executed, authenticated,
delivered and issued hereunder and are entitled to the benefits of this
Indenture.
At any time and from time to time after the execution and delivery of
this Indenture and after authorization by a Term Supplement, the Issuer may
deliver Notes executed by the Issuer to the Indenture Trustee for
authentication, and the Indenture Trustee shall authenticate and deliver such
Notes as provided in this Indenture and not otherwise.
In case any person who shall have executed, authenticated or registered
any of the Notes, whether manually or by facsimile, shall die or cease to be the
person authorized to execute, authenticate or register the Notes before the
Notes so executed, authenticated or registered by such person shall have been
actually issued and delivered, such Notes shall be valid nevertheless, and may
be issued with the same effect as though the person who had so executed,
authenticated or registered such Notes had not died or ceased to be such
authorized person.
2
<PAGE> 9
SECTION 2.4. NOTES ISSUABLE IN SERIES AND CLASSES; GENERAL PROVISIONS
WITH RESPECT TO PRINCIPAL AND INTEREST PAYMENTS. The Notes may be issued in one
or more Series, each of which Series may consist of only one Class of Notes or
may be divided into two or more Classes, and shall be designated generally as
the "Asset-Backed Notes" of the Issuer, with such further particular
designations added or incorporated in such title for the Notes of any particular
Series or Class as the Issuer may determine.
If a Series of Notes includes more than one Class, the Classes of Notes
of such Series shall mature sequentially unless otherwise provided in the
related Terms Supplement. The principal of each Note within a Class shall be due
on such Maturity Date applicable to such Class as shall be specified in the
related Terms Supplement. The principal of each Note shall be payable on the
related Maturity Date unless the unpaid principal of such Note becomes due and
payable at an earlier date by declaration of acceleration or otherwise.
Unless otherwise provided in the related Terms Supplement, no payments
of principal of any Class of Notes of a Series shall be made until payment of
the entire principal amount of all Outstanding Notes of such Series, if any,
with an earlier Maturity Date has been made. Payments of principal of a Class of
Notes of a Series shall be made pro rata among all Outstanding Notes of such
Class, without preference or priority of any kind.
Unless otherwise provided in the Terms Supplement, all payments made
with respect to any Note shall be applied first to the interest then due and
payable on such Note and then to the principal thereof. Unless otherwise
provided in the related Terms Supplement, all computations of interest accrued
on any Note shall be made on the basis of the actual number of days elapsed in
each applicable Interest Period divided by 360.
Payments of principal of and interest on each Note shall be made by the
Indenture Trustee from its Principal Corporate Trust Operations Office in lawful
money of the United States, and payment of interest of each Note shall, if the
Holder thereof holds $1,000,000 or more in aggregate principal amount of Notes,
be made by the deposit or wire transfer of immediately available funds to the
credit of an account located within the United States specified by such Holder
in duly executed instructions, with signature guaranteed in a manner
satisfactory to the Indenture Trustee, delivered to the Indenture Trustee no
less than ten (10) Business Days prior to the first Distribution Date for which
such deposit or wire transfer of payment of interest is to be effective. If such
instructions are not delivered to the Indenture Trustee by the Holder of
$1,000,000 or more in aggregate principal amount of Notes in accordance with
this paragraph, and for all other Holders, payment of interest shall be made by
check mailed on the applicable Distribution Date to the Holder's address as it
appears on the books of registry maintained by the Indenture Trustee pursuant to
Section 2.6 hereof. Notwithstanding the foregoing and except for the Notes held
in book-entry only form pursuant to Section 2.12 hereof, no payment of principal
shall be made on any Note unless and until such Note is delivered to the
Indenture Trustee for cancellation; and no payment of interest due on any
Distribution Date shall be made on any Note except to the person whose name
appears on the books of registry maintained by the Indenture Trustee as the
Holder thereof as of the close of business on the Record Date. Wire transfers to
a Holder made pursuant to this Section 2.4 shall be made without expense to such
Holder.
SECTION 2.5. DENOMINATIONS. The Notes shall be issuable only as
registered Notes in the Authorized Denominations prescribed by the terms of the
Terms Supplement creating the particular Series.
SECTION 2.6. BOOKS OF REGISTRY. At all times while any Note remains
Outstanding, the Issuer shall cause to be kept books of registry (the "Note
Register") for the registration and transfer of
3
<PAGE> 10
Notes. The Indenture Trustee shall be "Note Registrar" for the purpose of the
registration of Notes and the registration of transfers of Notes. Upon
presentation of any Notes to the Indenture Trustee or at the Office of the
Authenticating Agent, the Indenture Trustee shall transfer, or the
Authenticating Agent shall cause the Indenture Trustee to transfer, as the case
may be, under such reasonable regulations as the Indenture Trustee may
prescribe, such Notes on such Note Register. Such Note Register shall at all
reasonable times be open for inspection by the Issuer or its duly authorized
agents or representatives. Upon the resignation of any Note Registrar, the
Issuer shall promptly appoint a successor or, if it elects not to make such an
appointment, assume the duties of maintaining the Note Register.
The Issuer, the Indenture Trustee and the Authenticating Agent may
treat the registered owner of any Note as the absolute owner of such Note for
the purpose of receiving payment of the principal of and interest on such Note
and for all other purposes whatsoever and the Issuer, the Indenture Trustee and
the Authenticating Agent shall not be affected by any notice to the contrary.
SECTION 2.7. TRANSFER OF NOTES; EXCHANGE OF NOTES. Any Note may be
transferred upon the Note Register maintained pursuant to Section 2.6 hereof, by
the person in whose name it is registered, in person or by its duly authorized
attorney, upon surrender of such Note to the Indenture Trustee for cancellation,
accompanied by a written instrument of transfer in the form set forth in Exhibit
B hereto duly executed by the registered owner in person or by its duly
authorized attorney, with signatures guaranteed, in a manner satisfactory to the
Indenture Trustee.
Whenever any Note shall be surrendered for transfer, the Issuer shall
execute and the Authenticating Agent shall authenticate and deliver, at the
Principal Corporate Trust Operations Office of the Indenture Trustee or at the
Office of the Authenticating Agent (or send by first class mail to the new
Noteholder or Noteholders at the new Noteholder's request, risk and expense),
registered in the name or names of the transferee or transferees, a new duly
executed Note or (to the extent of Authorized Denominations) two or more new
duly executed Notes of the same date, Series, Class and aggregate principal
amount, and bearing interest at the same rate, as the Note being surrendered.
To the extent of Authorized Denominations, any Note or Notes may be
surrendered and exchanged at the Principal Corporate Trust Operations Office of
the Indenture Trustee or at the Office of the Authenticating Agent for a Note or
Notes of the same date, Class and Series, bearing interest at the same rate and
of like aggregate principal amount. The Issuer shall execute and the
Authenticating Agent shall authenticate and deliver the Notes issued upon such
exchange and shall deliver the same at the Principal Corporate Trust Operations
Office of the Indenture Trustee or at the Office of the Authenticating Agent (or
send the same by first class mail to the Noteholder at the new Noteholder's
request, risk and expense).
All exchanges and transfers of Notes pursuant to this Section 2.7 shall
be made without expense to the Noteholder, except that the Indenture Trustee or
the Authenticating Agent shall require the payment by the Noteholder requesting
such transfer or exchange of any tax, fee or other governmental charge required
to be paid with respect to such transfer or exchange.
All Notes surrendered pursuant to this Section 2.7 shall be cancelled.
SECTION 2.8. MUTILATED, LOST, STOLEN OR DESTROYED NOTES. In case any
Note shall at any time become mutilated in whole or in part, or is destroyed,
lost or stolen, the Issuer shall cause to be executed and delivered at the
Principal Corporate Trust Operations Office of the Indenture Trustee or at the
Office of the Authenticating Agent (or send by first class mail to the
Noteholder thereof at the Noteholder's request, risk and expense), a new Note of
the same date, Class, Series and bearing interest at the same rate and of like
principal amount as the Note so mutilated, destroyed, lost or stolen, in
exchange and substitution
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for and upon the surrender for cancellation of such mutilated Note, or in lieu
of or in substitution for such destroyed, lost or stolen Note. In any such event
the applicant for the issuance of a substitute Note shall file with the
Indenture Trustee or the Authenticating Agent evidence or proof satisfactory to
the Indenture Trustee or the Authenticating Agent, as the case may be, of the
mutilation, destruction, loss or theft of the original Note, and proof of
ownership thereof, shall furnish the Issuer, the Indenture Trustee and the
Authenticating Agent with security and indemnity satisfactory to the Issuer, the
Indenture Trustee and the Authenticating Agent, and shall comply with such other
reasonable rules as the Issuer, the Indenture Trustee or the Authenticating
Agent may prescribe. Any duplicate Note issued under the provisions of this
Section 2.8 in exchange and substitution for any mutilated Note or in
substitution for any allegedly destroyed, lost or stolen Note, shall be entitled
to the identical benefits under this Indenture as was the original Note in lieu
of which such duplicate Note is issued. Neither the Issuer nor the Indenture
Trustee shall be required to treat both the original Note and any duplicate Note
as being Outstanding for the purpose of determining the principal amount of
Notes Outstanding hereunder, but both the original and duplicate Note shall be
treated as one and the same.
Notwithstanding the foregoing provisions of this Section 2.8 as to the
issuance of duplicate or replacement Notes, if any such mutilated, destroyed,
lost or stolen Note has matured, at the option of the Issuer or the Indenture
Trustee, payment of the amount due thereon may be made without the issuance of
any duplicate or replacement Note upon receipt of like evidence, indemnity,
security and expenses and the surrender for cancellation of any such mutilated,
destroyed, lost or stolen Note and upon such other conditions as the Issuer or
the Indenture Trustee may prescribe.
All mutilated Notes surrendered to the Indenture Trustee or the
Authenticating Agent for substitution for new Notes pursuant to this Section 2.8
shall be cancelled by the Indenture Trustee or the Authenticating Agent. The
Authenticating Agent shall deliver any such cancelled Notes to the Indenture
Trustee.
All expenses incurred by the Issuer, the Indenture Trustee or the
Authenticating Agent for providing any duplicate or replacement Note shall be
paid by the Noteholder.
SECTION 2.9. DISPOSITION AND DESTRUCTION OF NOTES. All Notes
surrendered to the Indenture Trustee for payment, or surrendered to the
Indenture Trustee for transfer or exchange in accordance with Section 2.7
hereof, or surrendered to the Indenture Trustee or the Authenticating Agent for
substitution in accordance with Section 2.8 hereof, shall be cancelled by the
Indenture Trustee or the Authenticating Agent upon such payment, transfer,
exchange or substitution, as the case may be.
Whenever in this Indenture provision is made for the cancellation of
any Notes, the cancelled Notes shall be delivered by the Indenture Trustee to
the Issuer or as the Issuer may direct. Upon the written request of the Issuer,
the Indenture Trustee may, however, in lieu of such cancellation and delivery,
destroy such Notes to the extent permitted by law. If the Indenture Trustee
shall destroy any Notes, it shall deliver a certificate of such destruction to
the Issuer at least annually.
SECTION 2.10. TEMPORARY NOTES. Until definitive Notes are prepared, the
Issuer may execute and deliver, in lieu of definitive Notes, but subject to the
same provisions, limitations and conditions as the definitive Notes, except as
to the exchangeability, one or more temporary Notes, substantially of the tenor
of the definitive Notes in lieu of which such temporary Notes are issued, in
Authorized Denominations, and with such omissions, insertions and variations as
may be appropriate to temporary Notes. Until so exchanged, the temporary Notes
shall in all respects be entitled to the same benefits and security as
definitive Notes issued pursuant to this Indenture. All temporary Notes
surrendered in exchange for definitive Notes shall be forthwith cancelled by the
Indenture Trustee.
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SECTION 2.11. EXECUTION AND DELIVERY OF NOTES. Upon execution and
delivery of the related Terms Supplement, the Issuer shall execute and deliver
to the Indenture Trustee for authentication, and thereupon the same shall be
authenticated and delivered by the Indenture Trustee upon receipt by the
Indenture Trustee of the following:
(a) an Issuer Order authorizing the execution, authentication
and delivery of such Notes by the Issuer and specifying the Series, the
Classes within such Series, the Maturity Date of each Class, the
principal amount and the Interest Rate applicable to each Class and the
method of determining such Interest Rate of each Class of such Notes to
be authenticated and delivered;
(b) in case the Notes to be authenticated and delivered are of
any Series not theretofore created, an appropriate Terms Supplement,
accompanied by an Issuer Order authorizing such Terms Supplement (and,
in the case of the first Series to be authenticated and delivered
hereunder, authorizing this Indenture), designating the new Series to
be created and prescribing, consistent with the applicable provisions
of this Indenture, the terms and provisions relating to the Notes of
such Series;
(c) Opinions of Counsel addressed to the Indenture Trustee
complying with the requirements of Section 11.10 and to the effect
that:
(i) all instruments furnished to the Indenture
Trustee in connection with such Notes conform to the
requirements of this Indenture and constitute all the
documents required to be delivered hereunder for the Indenture
Trustee to authenticate and deliver such Notes;
(ii) all conditions precedent provided for in this
Indenture relating to the authentication and delivery of such
Notes have been complied with;
(iii) the Trust Agreement authorizes the Issuer to
execute and deliver the Terms Supplement relating to such
Notes (and, in the case of the first Series to be
authenticated and delivered hereunder, this Indenture), and to
issue such Notes, and the Issuer has duly taken all necessary
action under the Trust Agreement for those purposes;
(iv) the Issuer is a Massachusetts business trust and
the issuance of such Notes is in conformity with the terms of
and duly authorized by the Trust Agreement;
(v) assuming due execution and delivery thereof by
the Indenture Trustee, this Indenture and the related Terms
Supplement, as executed and delivered by the Issuer, are the
valid, legal and binding obligations of the Issuer,
enforceable in accordance with their terms, subject to the
effect of bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance and other similar laws relating to or
affecting creditors' rights generally and court decisions with
respect thereto, and such counsel need express no opinion with
respect to the availability of equitable remedies, and the
execution of such Terms Supplement is authorized or permitted
by Section 9.1 of this Indenture;
(vi) such Notes, when issued, delivered,
authenticated and paid for, will be the valid, legal and
binding obligations of the Issuer, entitled to the benefits of
this Indenture and the related Terms Supplement, equally and
ratably with all other Notes of such Series, if any,
theretofore issued, authenticated, delivered and paid for and
then Outstanding hereunder, and enforceable in accordance with
their terms, subject to the effect
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of bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance and other similar laws relating to or
affecting creditors' rights generally and court decisions with
respect thereto, and such counsel need express no opinion with
respect to the availability of equitable remedies;
(vii) the Issuer has granted to the Indenture Trustee
a lien and first perfected security interest in all of its
right, title and interest in each such Financed Loan;
(viii) the Trust Agreement authorizes the Issuer to
grant the Indenture Trust Estate to the Indenture Trustee as
security for the Notes of such Series and all previously
issued and Outstanding Series and the Issuer has taken all
necessary action under the Trust Agreement to grant the
Indenture Trust Estate to the Indenture Trustee;
(ix) the Terms Supplement delivered to the Indenture
Trustee with such Opinion of Counsel subjects the Financed
Loans securing such Series and all previously issued and
Outstanding Series and all proceeds therefrom and the Trust
Accounts or Funds for such Series and all previously issued
and Outstanding Series to the lien and security interest of
this Indenture;
(x) such action has been taken with respect to
delivery of possession of the Indenture Trust Estate and with
respect to the recording and filing of this Indenture, the
Terms Supplement for such Series, any other indentures
supplemental hereto and any other requisite documents and with
respect to the execution and filing of any financing
statements as is necessary to perfect a security interest in
the Indenture Trust Estate for such Series and all previously
issued and Outstanding Series, with either the details of such
action being recited therein, or the absence of any such
action being necessary to make such lien and security interest
effective being stated therein; and, with any recording,
filing, rerecording and re-filing of this Indenture, the Terms
Supplement for such Series, any other indentures supplemental
hereto and any other requisite documents and any execution and
filing of any financing statements and continuation statements
that will, in the opinion of such counsel, be required to
maintain the lien and security interest created by this
Indenture and the related Terms Supplements in the Indenture
Trust Estate for such Series and all previously issued and
Outstanding Series until March 15 of the year in which the
first Opinion of Counsel with respect to such Series is
required to be delivered under Section 5.10 being described
therein;
(xi) this Indenture and the Terms Supplement for such
Series have been duly qualified under the TIA, or that no
qualification of such Terms Supplement under the TIA is
necessary; the execution of the Terms Supplement for such
Series requires the requalification of this Indenture under
the TIA, or that no requalification of the Indenture under the
TIA is necessary by virtue of the execution of such Terms
Supplement; and
(xii) no authorization, approval or consent of any
governmental body having jurisdiction over the Issuer which
has not been obtained by the Issuer is required for the valid
issuance and delivery of the Notes.
(d) an Officer's Certificate of the Issuer complying with the
requirements of Section 11.10 and stating that:
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(i) the Issuer is not in default under this Indenture
and the issuance of such Notes will not result in any breach
of any of the terms, conditions or provisions of, or
constitute a default under, the Trust Agreement, any
indenture, mortgage, deed of trust or other agreement or
instrument to which the Issuer is a party or by which it is
bound, or any order of any court or administrative agency
entered in any proceeding to which the Issuer is a party or by
which it may be bound or to which it may be subject, and that
all conditions precedent provided in this Indenture relating
to the authentication and delivery of such Notes have been
complied with;
(ii) the Issuer is the owner of each Financed Loan
securing such Series and any previously issued Series, has not
assigned any interest or participation in any such Financed
Loan (or, if any such interest or participation has been
assigned, it has been released) and has the right to pledge
each such Financed Loan to the Indenture Trustee;
(iii) the Issuer has granted to the Indenture Trustee
a lien and first perfected security interest in all of its
right, title, and interest in each such Financed Loan; and
(iv) attached thereto are true and correct copies of
letters signed by each Rating Agency confirming that the Notes
of such new Series have been rated in the highest rating
categories by such Rating Agency and that the issuance of such
new Series shall not adversely affect the ratings on any
Outstanding Notes or Certificates.
(e) Except to the extent otherwise provided in the related
Terms Supplement, an Officer's Certificate of the Issuer stating that
all of the Financed Loans and any other assets securing such Series and
all previously issued and Outstanding Series:
(i) satisfy each of the requirements established for
such Financed Loans in the related Terms Supplement; and
(ii) have been endorsed as provided in the Sales
Agreement;
(f) Cash in the amount, if any, required by the terms of the
related Terms Supplement to be deposited in the applicable Revenue
Account and held by the Indenture Trustee and applied in accordance
with the terms hereof or as otherwise provided in the related Terms
Supplement;
(g) Cash, or any other assets specified in or permitted by the
related Terms Supplement in the respective amounts, if any, required by
the terms of the related Terms Supplement to be maintained in the
applicable Debt Service Reserve Account and held by the Indenture
Trustee;
(h) An executed counterpart of the Terms Supplement; and
(i) Such other documents, certificates, instruments or
opinions as may be required by the terms of the Terms Supplement
creating such Series of Notes.
SECTION 2.12. BOOK-ENTRY SYSTEM FOR NOTES. Unless otherwise provided in
the related Terms Supplement, the Notes shall be registered under a book-entry
system with a Securities Depository in accordance with the provisions of this
Section 2.12. The Depository Trust Company, New York, New York ("DTC"), shall
serve as the initial Securities Depository. The Notes shall be registered in the
form of one registered Note for the aggregate principal amount of each Series
and Class in the name of Cede & Co., as
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nominee of DTC, provided that if DTC shall request that the Notes be registered
in the name of a different nominee, the Indenture Trustee shall exchange all or
any portion of the Notes for an equal aggregate principal amount of Notes
registered in the name of such nominee or nominees of DTC. During any such
period, no person other than DTC or its nominee shall be entitled to receive
from the Issuer or the Indenture Trustee either a Note or any other evidence of
ownership of the Notes, or any right to receive any payment in respect thereof
unless DTC or its nominee shall transfer record ownership of all or any portion
of the Notes on the registration books maintained by the Indenture Trustee in
connection with discontinuing the book-entry system as provided in this Section
2.12 or otherwise.
So long as the Notes or any portion thereof are registered in the name
of DTC or any nominee thereof, all payments of the principal of and interest on
such Notes shall be made to DTC or its nominee in New York Clearing House or
equivalent same-day funds no later than the dates provided for such payments to
be made to Noteholders. Each such payment to DTC or its nominee shall be valid
and effective to fully discharge all liability of the Issuer and the Indenture
Trustee with respect to the principal of and interest on the Notes to the extent
of the sum or sums so paid. In the event of the payment or prepayment of less
than all of the Notes Outstanding, the Indenture Trustee shall not require
surrender by DTC or its nominee of the Notes so paid or prepaid, but DTC (or its
nominee) may retain such Notes and make an appropriate notation on the Note
certificates as to the amount of such partial payment or prepayment, provided
that DTC shall deliver to the Indenture Trustee, upon request, a written
confirmation of such partial payment or prepayment and thereafter the records
maintained by the Indenture Trustee shall be conclusive as to the amount of the
Notes of such maturity which have been paid or prepaid.
So long as the Notes or any portion thereof are registered in the name
of DTC or any nominee thereof, the Issuer and the Indenture Trustee may treat
DTC (or its nominee) as the sole and exclusive owner of the Notes registered in
its name for the purposes of payment of the principal of or interest on the
Notes, selecting the Notes or portions thereof to be paid or prepaid, giving any
notice permitted or required to be given to Noteholders under this Indenture,
registering the transfer of Notes, obtaining any consent or other action to be
taken by Noteholders and for all other purposes whatsoever, and neither the
Issuer nor the Indenture Trustee shall be affected by any notice to the
contrary. Neither the Issuer nor the Indenture Trustee shall have any
responsibility or obligation to any participant in DTC, any person claiming a
beneficial ownership in the Notes under or through DTC or any such participant,
or any other person not shown on the registration books of the Indenture Trustee
as being a Noteholder, with respect to the Notes, the accuracy of any records
maintained by DTC or any such participant, the payment by DTC or any such
participant of any amount in respect of the principal of or interest on the
Notes, any notice which is permitted or required to be given to Noteholders
under this Indenture, the selection by DTC or any such participant of any person
to receive payment in the event of a partial payment or prepayment of the Notes
or any consent given or other action taken by DTC as Noteholder.
So long as the Notes or any portion thereof are registered in the name
of DTC or any nominee thereof, all notices required or permitted to be given to
the Noteholders under this Indenture shall be given to DTC as provided in a
Representation Letter (the "DTC Representation Letter"). Any successor Indenture
Trustee shall in its written acceptance of its duties under this Indenture agree
to take any actions necessary from time to time to comply with the requirements
of the DTC Representation Letter.
In connection with any notice or other communication to be provided to
Noteholders pursuant to this Indenture by the Issuer or the Indenture Trustee
with respect to any consent or other action to be taken by Noteholders, DTC
shall consider the date of receipt of notice requesting such consent or other
action as the record date for such consent or other action, provided that the
Issuer or the Indenture Trustee may establish a special record date for such
consent or other action, consistent with the terms of this Indenture. The Issuer
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or the Indenture Trustee shall give DTC notice of such special record date not
less than fifteen (15) calendar days in advance of such special record date to
the extent possible.
The book-entry system for registration of the ownership of the Notes
may be discontinued at any time if DTC determines to resign as securities
depository for the Notes or the Indenture Trustee determines that continuation
of the system of book-entry transfers through DTC (or through a successor
securities depository) is not in the best interests of the Noteholders (provided
that the Indenture Trustee shall have no obligation or duty to make such
determination prior to a continuing Event of Default, and any such duty during a
continuing Event of Default shall be subject to Article 7 hereof). In either of
such events (unless in the case of a determination by the Indenture Trustee, the
Indenture Trustee, at the direction of the Issuer, appoints a successor
securities depository), the Notes shall be delivered in registered certificate
form to such persons, and in such principal amounts (and in authorized
denominations), as may be designated by DTC, but without any liability on the
part of the Issuer or the Indenture Trustee for the accuracy of such
designation. Whenever DTC requests the Issuer and the Indenture Trustee to do
so, the Issuer and the Indenture Trustee shall cooperate with DTC in taking
appropriate action after reasonable notice to arrange for another securities
depository to maintain custody of certificates evidencing the Notes.
SECTION 2.13. Payment of Principal and Interest. (a) Any installment of
interest or principal payable on any Notes of any Series which is punctually
paid or duly provided for by the Issuer on the applicable Distribution Date
shall be paid to the person in whose name such Note is registered at the close
of business on the Record Date for such Distribution Date (i) by check mailed to
such person's address as it appears in the Note Register on such Record Date, or
(ii) except that, unless definitive Notes have been issued pursuant to Section
2.12, with respect to Notes registered on the Note Record Date in the name of
Cede & Co., payment will be made by wire transfer in immediately available funds
to the account designated by such nominee; provided, however, the final
installment of principal payable with respect to such Note shall be payable as
provided in subsection (c) of this Section 2.13.
(b) All reductions in the principal amount of a Note effected by
payments of installments of principal made on any Distribution Date shall be
binding upon all Holders of such Note and of any Note issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof.
Following any prepayment or principal distribution in part, the principal
balance of each affected Note shall be deemed to be an amount equal to the
original principal amount of such Note multiplied by the Principal Factor (as
defined in Section 3.1(a) hereof).
(c) The principal of each Class of Notes shall be payable in
installments on each Distribution Date as provided in the applicable Terms
Supplement. Notwithstanding the foregoing, the entire unpaid principal amount of
each Class of Notes shall be due and payable, if not previously paid, on the
date on which an Event of Default shall have occurred and be continuing, if
either the Indenture Trustee or the Noteholders of the Notes representing not
less than a majority of the Outstanding Amount of the Notes have declared the
Notes to be immediately due and payable in the manner provided in Section 7.1.
All principal payments on each Class of Notes shall be made pro rata to the
Noteholders of such Class entitled thereto as provided in the applicable Terms
Supplement. The Indenture Trustee shall notify the person in whose name a Note
is registered at the close of business on the Record Date preceding the
Distribution Date on which the Issuer expects that the final installment of
principal of and interest on such Note will be paid. Such notice shall be mailed
or transmitted by facsimile prior to such final Distribution Date and shall
specify that such final installment will be payable only upon presentation and
surrender of such Note and shall specify the place where such Note may be
presented and surrendered for payment of such installment.
(d) If the Issuer defaults in a payment of interest on any Class of
Notes, the Issuer shall pay defaulted interest (plus interest on such defaulted
interest to the extent lawful) at the applicable Class
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Note Rate in any lawful manner. The Issuer may pay such defaulted interest to
the persons who are Noteholders of such Class on a subsequent special record
date, which date shall be at least five Business Days prior to the payment date.
The Issuer shall fix or cause to be fixed any such special record date and
payment date, and, at least 15 days before any such special record date, the
Issuer shall mail to each Noteholder of such Class a notice that states the
special record date and the amount of defaulted interest to be paid.
(e) Subject to the foregoing provisions of this Section, each Note
delivered under this Indenture, upon registration of transfer of or in exchange
for or in lieu of any other Note, shall carry the rights to unpaid principal and
interest that were carried by such other Note. Any checks mailed pursuant to
this Section 2.13 and returned undelivered shall be held in accordance with
Section 5.9.
SECTION 2.14. RELEASE OF COLLATERAL. Subject to Section 11.10 and
except as otherwise provided herein, including in Sections 4.4, 5.2, 5.4, 5.5
and 10.4, the Indenture Trustee shall release property from the lien of this
Indenture only upon receipt of a written request by the Issuer accompanied by a
certificate of an Authorized Officer of the Issuer, an Opinion of Counsel and
Independent Certificates in accordance with TIA Sections 314(c) and 314(d)(1) or
an Opinion of Counsel in lieu of such Independent Certificates to the effect
that the TIA does not require any such Independent Certificates. In the case of
a release of collateral in an amount in excess of five percent (5%) of the
Outstanding balance of the Notes and Certificates; the Issuer shall deliver a
copy of its written request to the Rating Agencies.
SECTION 2.15. NO LISTING ON SECURITIES MARKET. The Notes shall not be
listed on any established securities market. For this purpose, an established
securities market includes any national securities exchange registered under the
Securities Exchange Act or exempted from registration because of the limited
volume of transactions, any local exchange, and any over the counter market
characterized by an interdealer quotation system which regularly disseminates
quotations of obligations by identified brokers or dealer, by electronic means
or otherwise.
ARTICLE 3
PAYMENT OF THE NOTES PRIOR TO MATURITY
SECTION 3.1. PAYMENT OF THE NOTES PRIOR TO MATURITY.
(a) General. The Notes shall be subject to optional purchase prepayment
or mandatory principal distribution prior to the applicable Maturity Date upon
the terms and conditions and on such dates as may be set forth in the related
Terms Supplement.
In the event of the optional purchase prepayment or mandatory
distribution of principal at any time of only part of any Class of Notes, moneys
available for such prepayment or distribution shall be applied to the payment of
a portion of the principal of each Note of such Class in accordance with the
ratio which the outstanding principal amount of such Note bears to the aggregate
principal amount of all the Outstanding Notes of such Class. Such ratio will be
expressed as a seven-digit decimal, which will initially be 1.0000000 and will
thereafter decline to reflect the reduction in the Outstanding principal balance
of a Note after such prepayment or distribution (the "Principal Factor").
Following any prepayment or principal distribution in part, the principal
balance of each affected Note shall be deemed to be an amount equal to the
original principal amount of such Note multiplied by the Principal Factor.
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(b) Optional Purchase Prepayment. As provided in the related Terms
Supplement, on any Distribution Date on or after which the Balance in the
applicable Account of the Student Loan Portfolio Fund is equal to or less than a
certain percentage (as specified in the related Terms Supplement) of the Initial
Pool Balance with respect to the Financed Loans in such Account, the Seller may
repurchase all remaining such Financed Loans at a purchase price equal to the
outstanding principal balance of such Financed Loans, plus accrued and unpaid
interest. The proceeds of the sale of such Financed Loans shall be credited to
the applicable subaccount in the Note Payment Account within the Note Fund and
used on that Distribution Date for mandatory distributions of principal.
(c) Mandatory Principal Distributions. All Notes shall be subject to
mandatory principal distributions on each Distribution Date as a whole or in
part on the terms hereinafter set forth prior to their respective Maturity
Dates, from moneys on deposit in the applicable subaccount in the Note Payment
Account with respect to the payment of principal and in the applicable
subaccount in the Note Interest Account with respect to the payment of interest.
Accrued interest on the amount of principal so distributed shall be payable on
such principal distribution date, provided that Deferred Interest shall be
payable only to the extent that funds are available therefor. Mandatory
distributions of principal shall occur as aforesaid at such times, but only at
such times, as there shall be in excess of $5,000 in the Note Payment Account of
the Note Fund on the third Business Day immediately preceding a Distribution
Date.
(d) Notice of Optional Purchase Prepayment. Except as otherwise
provided in the related Terms Supplement, notice of optional purchase prepayment
of principal of Notes shall be given at the Issuer's request by the Indenture
Trustee in the name and for and on behalf of the Issuer not less than thirty
(30) days prior to the date of prepayment. Notice of optional purchase
prepayment of any Note shall be given within the time period specified in the
related Terms Supplement by first class mail, postage prepaid, to the Holder of
such Note at the address of such Holder as it appears in the Note Register or by
transmitting such notice by telex or telecopier to any Holder of any affected
Note who shall have submitted a written request to the Trustee for notice of
optional purchase prepayment by such means, to the telex or telecopier number
set forth in such request. A copy of any notice so transmitted shall also be
mailed to such Holder at the address of such Holder set forth in the Note
Register, provided, however, that neither failure by the Trustee to so mail a
copy of such notice nor any defect in such copy shall affect the validity of
such notice so transmitted in accordance herewith and provided, further, that
neither failure by the Trustee to so transmit a copy of such notice by telex or
telecopier or any defect therein shall affect the validity of such notice so
mailed in accordance herewith.
Each notice of optional purchase prepayment shall state (i) the amount
of principal of the Class and Series of the Notes to be prepaid or principal
distributed, the prepayment date and the applicable Principal Factor (after
giving effect to such prepayment); (ii) that the interest on the Notes, or on
the principal amount thereof to be prepaid or distributed shall cease to accrue
from and after such optional purchase prepayment date; and (iii) that on the
optional purchase prepayment date there will become due and payable on each said
Note the principal amount thereof to be prepaid or distributed and the interest
accrued on such principal amount to such date.
If notice of optional purchase prepayment of a Note shall have been
duly given as hereinbefore provided and if moneys for the payment of such Note
(or of the principal amount thereof subject to such prepayment), and the
interest to accrue to the optional purchase prepayment date with respect to such
Note (or portion thereof) shall be held for the purpose of such payment by the
Trustee, then such Note or portion thereof shall, on the optional purchase
prepayment date designated in such notice, become due and payable, and interest
on said Note or portion thereof shall cease to accrue.
All Notes surrendered pursuant to the provisions of this Section 3.1
shall be cancelled.
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ARTICLE 4
DISPOSITION OF PROCEEDS; ESTABLISHMENT OF FUNDS AND ACCOUNTS;
APPLICATION OF REVENUES; PLEDGE
SECTION 4.1. DISPOSITION OF PROCEEDS. All proceeds of issuance and sale
of a Series of Notes hereunder shall be deposited with the Indenture Trustee on
the Closing Date, and the Indenture Trustee shall deposit such proceeds to the
credit of one or more Funds or Accounts hereunder as specified in the related
Terms Supplement.
SECTION 4.2. DEBT SERVICE RESERVE FUND. There is hereby established a
Fund, to be held by the Indenture Trustee and designated the "Nellie Mae
Education Loan Trust Debt Service Reserve Fund" (referred to herein as the "Debt
Service Reserve Fund"). The Indenture Trustee shall maintain, within the Debt
Service Reserve Fund, a separate Debt Service Reserve Account for each Series.
The moneys in the Debt Service Reserve Fund shall be invested in Investment
Securities as provided in Section 4.9 hereof.
On each Closing Date, the Indenture Trustee shall deposit to the credit
of the applicable Debt Service Reserve Account the amount specified in the
related Terms Supplement. Moneys shall be deposited in each Debt Service Reserve
Account from the applicable Revenue Account in the Revenue Fund as provided in
Section 4.5(b) hereof. Except as may be otherwise provided in the related Terms
Supplement, if on any Distribution Date the Balance on deposit in a Debt Service
Reserve Account is in excess of the applicable Debt Service Reserve Requirement,
the amount of such excess shall be transferred to the applicable subaccount in
the Note Payment Account within the Note Fund.
Other than the transfer of excess Balances pursuant to the preceding
paragraph and except as may be otherwise provided in a Terms Supplement, the
Debt Service Reserve Fund shall be used solely for the following purposes in the
following order of priority: first, to make up any deficiency in a subaccount in
the Administration Account in the Services Fund immediately following the
transfer of moneys into such subaccount pursuant to Sections 4.5(b) and 4.7
hereof, with moneys drawn from the applicable Debt Service Reserve Account to
the extent of available moneys therein and, to the extent necessary, by moneys
drawn pro rata from each Debt Service Reserve Account; second, to increase the
amount in the Note Interest Account in the Note Fund to the amount of interest
then accrued and unpaid on the Notes (after giving effect to any transfer to be
made thereto pursuant to Sections 4.5(b), 4.6(b) and 4.7 hereof) on any
Distribution Date or on any other date on which interest is due upon any Notes,
by transfer and deposit by the Indenture Trustee to the credit of the Note
Interest Account on any such date, with transfers to particular subaccounts
within the Note Interest Account funded by moneys drawn from the applicable Debt
Service Reserve Accounts to the extent of available moneys therein and, to the
extent necessary, by moneys drawn pro rata from all Debt Service Reserve
Accounts; third, on a Maturity Date, to provide for payment of the principal of
the Notes, by transfer and deposit by the Indenture Trustee to the credit of the
Note Payment Account in the Note Fund on the Maturity Date of any Notes, with
transfers to particular subaccounts within the Note Payment Account funded by
moneys drawn from the applicable Debt Service Reserve Accounts to the extent of
available moneys therein and, to the extent necessary, by moneys drawn pro rata
from all Debt Service Reserve Accounts; fourth, by transfer from the Indenture
Trustee to the Owner Trustee, the amount, as certified in writing by the Owner
Trustee, for deposit in the Certificate Interest Account in the Certificate Fund
to increase the amount in the Certificate Interest Account in the Certificate
Fund to the amount of interest then accrued and unpaid on the Certificates
(after giving effect to any transfer to be made thereto pursuant to Section
4.5(b) and Section 4.6(b) hereof) on any Distribution Date or on any other date
on which interest is due upon prepayment or payment of any Certificates, with
transfers to particular subaccounts
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within the Certificate Interest Account funded by moneys drawn from the
applicable Debt Service Reserve Accounts to the extent of available moneys
therein and, to the extent necessary, by moneys drawn pro rata from all Debt
Service Reserve Accounts; and fifth, at such time as there are no longer any
Notes Outstanding hereunder, or if there are no longer any Notes of a particular
Series Outstanding identified with a particular Class of Certificates, by
transfer by the Indenture Trustee to the Owner Trustee, to provide for payment
of the principal of all Certificates or such particular Class of Certificates,
as the case may be, at the Maturity Date thereof.
SECTION 4.3. STUDENT LOAN ACQUISITION FUND. There is hereby established
a Fund, to be held by the Indenture Trustee and designated the "Nellie Mae
Education Loan Trust Student Loan Acquisition Fund" (referred to herein as the
"Student Loan Acquisition Fund"). The Student Loan Acquisition Fund shall
consist of two Accounts, which are hereby established, to be held by the
Indenture Trustee and designated as the "Acquisition Account" and the
"Pre-Funding Account." The Indenture Trustee shall maintain, within the
Acquisition Account and the Pre-Funding Account, a separate subaccount for each
Series. On each Closing Date, the Indenture Trustee shall deposit to the credit
of the applicable subaccount in each the Acquisition Account and the Pre-Funding
Account, or to the applicable subaccount in either such Account, the amount
specified by the related Terms Supplement. Amounts credited to the Acquisition
Account shall be paid to or upon the order of the Issuer on the Closing Date to
finance Loans, upon receipt by the Indenture Trustee of a certificate from the
Issuer in the form set forth in Exhibit C hereto. Any amount remaining in the
Acquisition Account at the close of business on any Closing Date shall be
deposited in the Pre-Funding Account. Amounts credited to the Pre-Funding
Account shall be paid to or upon the order of the Issuer to finance Loans, upon
receipt by the Indenture Trustee of a certificate from the Issuer in the form
set forth in Exhibit C hereto. Any amount remaining in the Pre-Funding Account
at the close of business on the date identified in the Terms Supplement relating
to a particular Series shall be deposited in the appropriate subaccount within
the Note Payment Account in the Note Fund.
SECTION 4.4. STUDENT LOAN PORTFOLIO FUND. There is hereby established a
Fund to be held by the Indenture Trustee and designated the "Nellie Mae
Education Loan Trust Student Loan Portfolio Fund" (referred to herein as the
"Student Loan Portfolio Fund"). The Indenture Trustee shall maintain within the
Student Loan Portfolio Fund a separate account for each Series. All Financed
Loans, including Additional Financed Loans, shall be included in the Balances of
the Student Loan Portfolio Fund. All principal of, interest on and other
Revenues in respect of Financed Loans shall be deposited upon receipt to the
credit of the appropriate Revenue Account as provided in Section 4.5 hereof.
Financed Loans included in the Balances of the Student Loan Portfolio Fund may
be removed therefrom by the Indenture Trustee only in accordance with the terms
of this Indenture. Nothing in this Indenture shall be deemed to preclude the
Servicer, the Administrator or any other custodian from maintaining possession
of the notes evidencing, and other documentation relating to, Financed Loans on
behalf of the Indenture Trustee in accordance with the Servicing Agreement or
the Administration Agreement, provided the same is consistent with the creation
and maintenance of the first lien and security interest created by Section 4.8
hereof and does not impair the perfection of such security interest.
When necessary for the Issuer to enforce its rights under a Guaranty
Agreement or the Servicing Agreement after reasonable negotiations with the
borrower, upon the direction of the Issuer, the Indenture Trustee shall remove
such Financed Loans from the Student Loan Portfolio Fund and cause such Financed
Loans to be tendered to the applicable Guarantor or Servicer, as the case may
be, together with an assignment thereof and all other documentation, records and
certificates relating thereto which are in the possession of the Indenture
Trustee, against payment to the Indenture Trustee of moneys at least equal to
the principal amount thereof and accrued interest thereon. When necessary in
accordance with the provisions of Section 5.5 hereof, the Indenture Trustee
shall remove Financed Loans from the Student Loan Portfolio Fund and cause such
loans to be tendered to the Issuer, together with an assignment thereof and all
other
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documentation, records and certificates relating thereto which are in the
possession of the Indenture Trustee. The Issuer and the Indenture Trustee shall
execute such assignments or other certificates or instruments as may be required
to effectuate the transfer of Financed Loans in accordance with the provisions
of this paragraph. Financed Loans which are transferred from the Student Loan
Portfolio Fund in accordance with the provisions of this paragraph shall no
longer constitute a part of the Indenture Trust Estate and shall be free and
clear of the lien of this Indenture.
The Indenture Trustee shall deposit the proceeds of any disposition of
Financed Loans pursuant to this Section 4.4 which are allocable to principal to
the credit of the applicable subaccount within the Note Payment Account and the
remainder of such proceeds to the credit of the applicable Revenue Account.
SECTION 4.5. REVENUE FUND. There is hereby established a Fund, to be
held by the Indenture Trustee and designated as the "Nellie Mae Education Loan
Trust Revenue Fund" (referred to herein as the "Revenue Fund") to which shall be
deposited (i) all amounts received in respect of all Financed Loans, whether as
principal, interest, late charges or in payment or repurchase of Financed Loans,
amounts received on cancellation of Financed Loans and amounts received as
recoveries from a Guarantor; and (ii) amounts received as earnings on or income
from Investment Securities included in the Balances of the Funds and Accounts to
the extent provided in Section 4.9 hereof. The Indenture Trustee shall maintain
within the Revenue Fund a separate Revenue Account for each Series.
(a) The Issuer shall, and shall cause the Servicer to, transfer all
Revenues received by it, or by the Servicer on its behalf to the Indenture
Trustee, promptly or otherwise in accordance with the Servicing Agreement, and
the Indenture Trustee shall upon receipt of any Revenues immediately deposit and
credit such Revenues to the applicable Revenue Account, provided, however, that
the Issuer shall remit directly to a Guarantor or a Collector any amount
received in respect of a Financed Loan which is owed to such Guarantor or
Collector as a collection fee. On any Business Day, as directed by the Issuer,
and, in any case, on the Business Day prior to each Distribution Date, the
Indenture Trustee shall transfer to the appropriate subaccount within the Note
Payment Account, to be applied to the prepayment or mandatory distribution of
principal of Notes or transfer to the Owner Trustee pursuant to Section 4.6(b)
hereof, all amounts then on deposit in each Revenue Account which can then be
identified, based upon information furnished to the Indenture Trustee by the
Issuer, as allocable to payments of principal of Financed Loans and amounts
transferred on account of principal pursuant to Section 4.3, less the amount of
any increase in Capitalized Interest during the prior Interest Period.
(b) By 12:00 noon on the last Business Day prior to any Distribution
Date, the Indenture Trustee shall, except as otherwise provided by the related
Terms Supplement, transfer or apply all amounts then on deposit in each Revenue
Account, after the transfer described in Section 4.5(a) hereof, in the following
order of priority, the requirement of each clause at the time of transfer to be
satisfied before any transfer is made to any purpose subsequent in priority:
First, to the applicable subaccount in the Administration
Account in the Services Fund to the extent required to increase the
Balance on deposit in such subaccount to the Administration
Requirement, calculated as of the date of such transfer.
Second, to the applicable subaccount in the Note Interest
Account to the extent required to increase the amount in such
subaccount to the amount of interest (excluding Deferred Interest)
which will have accrued and be unpaid on the applicable Notes to but
not including such Distribution Date.
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Third, to the Owner Trustee, the amount, as certified in
writing by the Owner Trustee, of any interest then accrued and unpaid
on the Class of Certificates identified with the applicable Series of
Notes (excluding Deferred Interest) to but not including such
Distribution Date.
Fourth, any remainder to the applicable Debt Service Reserve
Account in order to increase the amount therein to the applicable Debt
Service Reserve Requirement.
Fifth, any remainder to the applicable subaccount within the
Note Interest Account to the extent required to pay any amounts due to
Holders of Notes in respect of Deferred Interest on Notes calculated in
accordance with the related Terms Supplement.
Sixth, any remainder to the Owner Trustee to the extent
required, as certified by the Owner Trustee, to pay any amounts due to
the Holders of Certificates in respect of Deferred Interest applicable
to the Class of Certificates identified with the applicable Series of
Notes calculated in accordance with the related Trust Supplement.
Seventh, any remainder, ratably with available moneys in all
other Revenue Accounts, to the Debt Service Reserve Fund to increase
the amount in any other Debt Service Reserve Account to its applicable
Debt Service Reserve Requirement.
Eighth, any remainder to the Owner Trustee for distribution to
the Depositor and NMI Education Loan Corporation to the extent
specified in the related Terms Supplement.
Ninth, any remainder to the applicable subaccount of the Note
Payment Account for the payment or prepayment of the Notes pursuant to
Section 4.6(b) hereof.
Tenth, any remainder to the Owner Trustee for the payment of
principal of Certificates or prepayment of Certificates identified with
the applicable Series of Notes.
Eleventh, any remainder to the Owner Trustee.
(c) Investment of Revenue Fund. Pending transfers of moneys from the
Revenue Fund as provided in this Section 4.5, such moneys shall be invested in
Investment Securities as provided in Section 4.9 hereof.
SECTION 4.6. NOTE FUND. There is hereby established a Fund to be held
by the Indenture Trustee and designated the "Nellie Mae Education Loan Trust
Note Fund" (referred to herein as the "Note Fund"). The Note Fund shall be used
only for the payment of the principal of and interest on the Notes. The Note
Fund shall consist of two Accounts, which are hereby established, to be held by
the Indenture Trustee and designated the "Note Interest Account" and the "Note
Payment Account." The Indenture Trustee shall maintain, within the Note Interest
Account and the Note Payment Account, a separate subaccount for each Series.
Moneys on deposit in the Note Fund shall be invested in Investment Securities as
provided in Section 4.9 hereof.
(a) Note Interest Account. Moneys shall be deposited in the applicable
subaccount within the Note Interest Account from the applicable Revenue Account
as provided in Section 4.5(b) hereof, from the applicable subaccount within the
Cost of Issuance Account as provided in Section 4.7 hereof, from the Debt
Service Reserve Fund as provided in Section 4.2 hereof and from the applicable
subaccount within the Note Payment Account as provided in Section 4.6(b) hereof.
Moneys on deposit in the Note Interest Account shall be applied by the Indenture
Trustee to the payment of the interest on the Notes when due (whether on
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a Distribution Date or upon the prepayment or payment of any of the Notes in
accordance with the terms of this Indenture and the related Terms Supplement)
without further authorization or direction.
(b) Note Payment Account. Moneys shall be deposited in the applicable
subaccount within the Note Payment Account from the Debt Service Reserve Fund as
provided in Section 4.2 hereof, from the applicable Revenue Account as provided
in Sections 4.5(a) and 4.5(b) hereof and from any other source received by the
Indenture Trustee for deposit therein. Moneys on deposit in the Note Payment
Account shall be applied by the Indenture Trustee to payment of principal of the
Notes at the applicable Maturity Dates or upon acceleration and to the payment
or prepayment of Notes pursuant to Section 3.1 hereof and the related Terms
Supplement without further authorization or direction. Prior to application
thereof in accordance with the preceding sentence, money on deposit in the
applicable subaccount within the Note Payment Account shall be used to increase
the amount in the applicable subaccount within the Note Interest Account (after
giving effect to any transfer to be made thereto pursuant to Section 4.5(b)
hereof) to the amount of interest then accrued and unpaid on the Notes on any
Business Day prior to any Distribution Date or on any other date on which
interest is due upon distribution of principal or prepayment or payment of any
Notes; provided, however, after a notice of distribution of principal or
prepayment of any Notes has been given by the Indenture Trustee in accordance
with Section 3.1 hereof, no amount shall be transferred from the Note Payment
Account pursuant to this sentence other than that in excess of the amount
required for such prepayment or distribution of principal on the date specified
in such notice. Interest on any Notes paid or prepaid shall be payable from the
Note Interest Account. After all the Notes of a particular Series have been paid
in full, any amounts remaining in the applicable subaccount in the Note Payment
Account shall be transferred to the Owner Trustee.
SECTION 4.7. SERVICES FUND. There is hereby established a Fund, to be
held by the Indenture Trustee and designated the "Nellie Mae Education Loan
Trust Services Fund" (referred to herein as the "Services Fund"), which shall
consist of two Accounts, which are hereby established and designated as the
"Cost of Issuance Account" and the "Administration Account." The Services Fund
shall be used for and applied only to the payment of Administrative Expenses and
Costs of Issuance, except as otherwise provided in this Section 4.7.
Administrative Expenses and Costs of Issuance shall be paid by the Indenture
Trustee from moneys in the appropriate Account of the Services Fund upon receipt
of written orders signed by an Authorized Officer of the Issuer, which shall
direct the payment to designated payees in designated amounts for stated
services and certify that such payment is a proper charge against the applicable
Account therein and is then due and owing for services rendered or expenses
incurred.
The Indenture Trustee shall maintain within the Cost of Issuance
Account a separate subaccount for each Series. The Indenture Trustee shall
deposit to the credit of the applicable subaccount within the Cost of Issuance
Account the amount, if any, specified by the related Terms Supplement. Amounts
in the Cost of Issuance Account shall be withdrawn and used by the Indenture
Trustee in accordance with the first paragraph of this Section 4.7 for the
purpose of paying Costs of Issuance. Any amounts remaining in a subaccount
within the Cost of Issuance Account upon payment of all related Costs of
Issuance shall be transferred to the applicable Revenue Account upon receipt by
the Indenture Trustee of a certificate of an Authorized Officer of the Issuer
stating that such moneys are no longer needed for the payment of Costs of
Issuance.
The Indenture Trustee shall maintain within the Administration Account
a separate subaccount for each Series. The Indenture Trustee shall deposit to
the credit of the applicable subaccount within the Administration Account
amounts from the Revenue Fund pursuant to Section 4.5(b) hereof. Amounts in the
applicable subaccount within the Administration Account shall be withdrawn and
used by the Indenture Trustee in accordance with the first paragraph of this
Section 4.7 for the purpose of paying Administrative Expenses.
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The moneys in the Services Fund shall be invested in Investment
Securities as provided in Section 4.9 hereof.
SECTION 4.8. PLEDGE. In order to secure the full and final payment of
the principal of and interest on all of the Notes issued pursuant to this
Indenture, and in order to secure the performance and observation of all the
covenants and conditions contained herein, in the related Terms Supplement and
in the Notes, and for and in consideration of the purchase and acceptance of the
Notes by the Noteholders and the acceptance by the Indenture Trustee of the
trusts hereby created, the Issuer does hereby pledge and grant a first lien on
and a security interest in, the Indenture Trust Estate to the Indenture Trustee,
and its successors in trust as security for the performance of all of the
obligations of the Issuer hereunder and for the benefit and security of the
Noteholders.
The covenants and agreements herein set forth to be performed by or on
behalf of the Issuer shall be for the equal and proportionate benefit, security
and protection of all Noteholders, without preference, priority or distinction
as to payment or security except as specifically provided herein, in the related
Terms Supplement or in the Notes. All Notes shall rank pari passu and shall be
secured equally and ratably without discrimination or preference, except as
specifically provided herein, in the related Terms Supplement or in the Notes.
The pledge of, lien on and security interest in and assignment of the
Indenture Trust Estate to the Indenture Trustee made hereby includes any and all
contracts and other evidence of indebtedness or other rights of the Issuer to
receive any of the same, whether now existing or hereafter coming into
existence, and whether now or hereafter acquired, and the proceeds thereof, with
respect to any of the Indenture Trust Estate.
No Holder of a Note shall be required to ensure that the moneys derived
from such Note are applied to the purpose or purposes for which the Note was
issued. The validity of any Note shall neither be dependent upon nor affected by
the validity or regularity of any proceedings or contracts relating to the
Program nor the use and application of the proceeds of the Note.
Nothing contained in this Section 4.8 or in this Indenture shall
prevent or be construed to prevent any Terms Supplement or other Supplemental
Indenture from pledging or otherwise providing, or the Issuer from providing, in
addition to the security given or intended to be given by this Indenture
additional security for the benefit of the Notes.
SECTION 4.9. INVESTMENTS. Moneys held by the Indenture Trustee for the
credit of any Fund or Account shall be invested by the Indenture Trustee to the
fullest extent practicable and reasonable, in accordance with the provisions
hereof, in Investment Securities, as directed in writing by the Issuer. All
Investment Securities shall be acquired subject to the limitations on maturities
hereinafter set forth in this Section 4.9 and to any additional limitations or
requirements, consistent with the foregoing provisions of this paragraph, as may
be established by written request of the Issuer. Moneys shall be invested in
Investment Securities with respect to which payments of principal and interest
are scheduled or otherwise payable not later than the date on which it is
estimated that such moneys will be required by the Indenture Trustee for the
purposes intended, and in any event, with respect to the Revenue Fund, the Debt
Service Reserve Fund and the Note Fund, not later than the next succeeding
Distribution Date. Investment Securities purchased under a repurchase agreement
may be deemed to mature on the date or dates on which the Indenture Trustee may
deliver such Investment Securities for repurchase under such agreement.
Investment Securities which may be tendered at the option of the holder thereof
for payment of the full principal amount thereof plus accrued interest thereon
prior to the maturity thereof may be deemed to mature on the date or dates on
which they may be so tendered. Investment Securities acquired as an investment
of moneys in any Fund or
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Account shall be credited to such Fund or Account. Unless otherwise provided
herein, any earnings on or income from such Investment Securities shall be
credited to the Student Loan Interest Account in the Revenue Fund, as provided
in Section 4.5 hereof, except that an amount of interest received with respect
to any Investment Security on the first payment of interest after purchase equal
to the amount of accrued interest, if any, paid as part of the purchase price of
such Investment Security shall be credited to the Fund or Account from which
such accrued interest was paid.
All Funds and Accounts shall be held by the Indenture Trustee in one or
more segregated trust accounts. Investments in any and all Funds and Accounts
may be commingled in a separate fund or funds established by the Indenture
Trustee for purposes of making, holding and disposing of investments,
notwithstanding provisions herein for transfer to or holding in or to the credit
of particular Funds and Accounts amounts received or held by the Indenture
Trustee hereunder, provided that the Indenture Trustee shall at all times
account for such investments strictly in accordance with the Funds and Accounts
to which they are credited and otherwise as provided in this Indenture. The
Indenture Trustee may act as principal or agent in the acquisition or disposing
of any Investment Security. The Indenture Trustee may sell or present for
redemption, any Investment Security so purchased whenever it shall be necessary
to provide moneys to meet any required payment, transfer, withdrawal or
disbursement from the Fund or Account to which such Investment Security is
credited. The Indenture Trustee shall not be liable or responsible for any loss
resulting from the acquisition or disposition of any Investment Security in
accordance with this Indenture.
SECTION 4.10. TERMINATION. When no Notes remain Outstanding and all
amounts due or to become due hereunder have been paid in full or provided for to
the satisfaction of the Indenture Trustee, the Indenture Trustee shall transfer
the Balances on deposit in all Funds and Accounts established hereby to the
Owner Trustee for the benefit of the Certificateholders.
ARTICLE 5
COVENANTS TO SECURE NOTE
The Issuer hereby covenants and agrees with the purchasers and Holders
of the Notes as follows:
SECTION 5.1. PERFORMANCE OF COVENANTS; THE ISSUER. The Issuer covenants
that it will faithfully perform at all times any and all covenants,
undertakings, stipulations and provisions contained in this Indenture, in any
and every Note executed, authenticated and delivered hereunder and in all of its
proceedings pertaining hereto. The Issuer covenants that it is duly authorized
under the laws of Massachusetts to issue the Notes authorized hereby and to
execute and deliver this Indenture and to pledge and create a security interest
in the Indenture Trust Estate in the manner and to the extent herein set forth,
and that all action on its part for the issuance of the Notes and the execution
and delivery of this Indenture has been duly taken, and that the Notes in the
hands of the Holders thereof are and will be valid and enforceable obligations
of the Issuer according to the terms thereof and hereof.
SECTION 5.2. INSTRUMENTS OF FURTHER ASSURANCE. The Issuer agrees that
the Indenture Trustee may defend its rights to the Indenture Trust Estate for
the benefit of the Holders of the Notes against the claims and demands of all
persons whomsoever. The Issuer covenants that, if requested in writing by the
Indenture Trustee, it will do, execute, acknowledge and deliver, or cause to be
done, executed, acknowledged and delivered, such indentures supplemental hereto
and such further acts, instruments and transfers as the Indenture Trustee may
reasonably require for the better assuring, transferring, pledging, assigning
and confirming unto the Indenture Trustee all and singular the rights assigned
hereby and the
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amounts and other property pledged hereby to the payment of the Notes. The
Issuer covenants and agrees that, except as provided herein, it will not sell,
convey, assign, pledge, encumber or otherwise dispose of any part of the
Indenture Trust Estate.
SECTION 5.3. RECORDING AND FILING. The Issuer shall keep and renew the
filing or cause to be kept and renewed all financing statements related to this
Indenture and all supplements hereto and such other documents as may be
necessary to be kept and filed, renewed in such manner and in such places as may
be required by law, in order to preserve and protect fully the security of the
Holders of the Notes and the rights of the Indenture Trustee hereunder. In
carrying out its duties under this Section 5.3, the Issuer shall be entitled to
rely on an opinion of its counsel specifying what actions are required to comply
with this Section 5.3.
SECTION 5.4. COMPLIANCE WITH AND ENFORCEMENT OF FINANCED LOANS,
SERVICING AGREEMENT, CUSTODY AGREEMENT, SALES AGREEMENT AND ADMINISTRATION
AGREEMENT. The Issuer (i) shall cause to be diligently taken all reasonable
steps, actions and proceedings necessary for the compliance with and the
enforcement of all terms, covenants and conditions of all Financed Loans, the
Servicing Agreement, Custody Agreement, Sales Agreement and Administration
Agreement, (ii) shall at all times, to the extent permitted by law, defend,
enforce, preserve and protect the rights and privileges of the Issuer, the
Indenture Trustee and the Holders under or with respect to each Financed Loan,
the Servicing Agreement, Custody Agreement, Sales Agreement and Administration
Agreement, and (iii) without prior notice to the Rating Agencies, shall not
consent, or agree to or permit any amendment or modification of any Financed
Loan, the Servicing Agreement, Custody Agreement, Sales Agreement and
Administration Agreement, which will in any manner materially adversely affect
the rights or security of the Holders under this Indenture. Nothing in this
Indenture shall be construed to prevent the Issuer or the Indenture Trustee from
permitting a borrower to settle a default or cure a delinquency on any Financed
Loan on such terms as the Issuer or the Indenture Trustee, as applicable, shall
deem reasonable or as shall be required by law.
SECTION 5.5. REPURCHASE OF FINANCED LOANS. The Issuer agrees to require
the Seller to repurchase, at a price equal to the amount of outstanding
principal and accrued but unpaid interest, any Financed Loan rejected by the
Issuer based upon the Issuer's reasonable determination that such Financed Loan
does not comply with the loan origination requirements of the Sales Agreement.
SECTION 5.6. ISSUER STATUS. The Issuer will keep in full effect its
existence and rights as a trust under the laws of the Commonwealth (unless it
becomes, or any successor Issuer hereunder is or becomes, organized under the
laws of any other State or of the United States of America, in which case the
Issuer will keep in full effect its existence and rights under the laws of such
other jurisdiction) and will obtain and preserve its qualification to do
business in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this Indenture, the
Notes and each other instrument or agreement included in the Indenture Trust
Estate.
SECTION 5.7. STATEMENTS BY ISSUER REGARDING FINANCED LOANS AND OTHER
MATTERS. Within twenty-five (25) days following the end of each calendar month,
the Issuer shall furnish to the Indenture Trustee and each Rating Agency a
statement setting forth, as of the end of such calendar month, the information
set forth in Exhibit D hereto.
SECTION 5.8. MAINTENANCE OF OFFICE OR AGENCY. The Issuer will maintain
in the City of Boston, Massachusetts, an office or agency where Notes may be
surrendered for registration of transfer or exchange, and where notices and
demands to or upon the Issuer in respect of the Notes and this Indenture may be
served. The Issuer hereby initially appoints the Indenture Trustee to serve as
its agent for the foregoing purposes. The Issuer will give prompt written notice
to the Indenture Trustee of the location, and
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of any change in the location, of any such office or agency. If at any time the
Issuer shall fail to maintain any such office or agency or shall fail to furnish
the Indenture Trustee with the address thereof, such surrenders, notices and
demands may be made or served at the Corporate Trust Office, and the Issuer
hereby appoints the Indenture Trustee as its agent to receive all such
surrenders, notices and demands.
SECTION 5.9. MONEY FOR PAYMENTS TO BE HELD IN TRUST. All payments of
amounts due and payable with respect to any Notes that are to be made from
amounts distributed from any Fund or Account shall be made on behalf of the
Issuer by the Indenture Trustee or by another Paying Agent, and no amounts so
distributed from such Funds and Accounts for payments of Notes shall be paid
over to the Issuer except as provided herein.
The Issuer will cause each Paying Agent other than the Indenture
Trustee to execute and deliver to the Indenture Trustee an instrument in which
such Paying Agent shall agree with the Indenture Trustee (and if the Indenture
Trustee acts as Paying Agent, it hereby so agrees), subject to the provisions of
this Section, that such Paying Agent will:
(i) hold all sums held by it for the payment of amounts due
with respect to the Notes in trust for the benefit of the persons
entitled thereto until such sums shall be paid to such persons or
otherwise disposed of as herein provided and pay such sums to such
persons as herein provided;
(ii) give the Indenture Trustee notice of any default by the
Issuer of which it has actual knowledge (or any other obligor upon the
Notes) in the making of any payment required to be made with respect to
the Notes;
(iii) at any time during the continuance of any such default,
upon the written request of the Indenture Trustee, forthwith pay to the
Indenture Trustee all sums so held in trust by such Paying Agent;
(iv) immediately resign as a Paying Agent and forthwith pay to
the Indenture Trustee all sums held by it in trust for the payment of
Notes if at any time its ceases to meet the standards required to be
met by a Paying Agent at the time of its appointment; and
(v) comply with all requirements of the Code with respect to
the withholding from any payments made by it on any Notes of any
applicable withholding taxes imposed thereon and with respect to any
applicable reporting requirements in connection therewith.
The Issuer may at any time for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by Issuer
Order direct any Paying Agent to pay to the Indenture Trustee all sums held in
trust by such Paying Agent, such sums to be held by the Indenture Trustee upon
the same trusts as those upon which the sums were held by such Paying Agent; and
upon such payment by any Paying Agent to the Indenture Trustee, such Paying
Agent shall be released from all further liability with respect to such money.
SECTION 5.10. OPINIONS AS TO INDENTURE TRUST ESTATE. On or before June
30 in each calendar year, beginning with the 1997 calendar year, the Issuer
shall furnish to the Indenture Trustee an Opinion of Counsel either stating
that, in the opinion of such counsel, such action has been taken with respect to
the recording, filing, re-recording and refiling of this Indenture, any
indentures supplemental
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hereto and any other requisite documents and with respect to the execution and
filing of any financing statements and continuation statements as is necessary
to maintain the lien and security interest created by this Indenture and
reciting the details of such action or stating that in the opinion of such
counsel no such action is necessary to maintain such lien and security interest.
Such Opinion of Counsel shall also describe the recording, filing, re-recording
and refiling of this Indenture, any indentures supplemental hereto and any other
requisite documents and the execution and filing of any financing statements and
continuation statements that will, in the opinion of such counsel, be required
to maintain the lien and security interest of this Indenture until June 30 in
the following calendar year.
SECTION 5.11. RESTRICTED PAYMENTS. The Issuer shall not, directly or
indirectly, (i) pay any dividend or make any distribution (by reduction of
capital or otherwise), whether in cash, property, securities or a combination
thereof, to the Indenture Trustee or any owner of a beneficial interest in the
Issuer or otherwise with respect to any ownership or equity interest or security
in or of the Issuer or to the Servicer or the Administrator, (ii) redeem,
purchase, retire or otherwise acquire for value any such ownership or equity
interest or security or (iii) set aside or otherwise segregate any amounts for
any such purpose; other than that the Issuer may make, or cause to be made,
distributions to the Servicer, the Indenture Trustee, the Owner Trustee, the
Certificateholders, the Noteholders, the Administrator and the Seller as
contemplated by, and to the extent funds are available for such purpose under,
any of the Basic Documents.
SECTION 5.12. ANNUAL STATEMENT AS TO COMPLIANCE. The Issuer will
deliver to the Indenture Trustee and the Rating Agencies, within 120 days after
the first fiscal year of the Issuer that ends more than three months after the
Closing Date for a Series, and each fiscal year thereafter, an Officer's
Certificate of the Issuer stating that:
(i) a review of the activities of the Issuer during such year
and of performance under this Indenture has been made under such
Authorized Officer's supervision; and
(ii) to the best of such Authorized Officers' knowledge, based
on such review, the Issuer has complied with all conditions and
covenants under this Indenture throughout such year, or if there has
been a default in compliance with any such condition or covenant,
specifying each default known to such Authorized Officers and the
nature and status thereof.
SECTION 5.13. NO OTHER BUSINESS. The Issuer shall not engage in any
business other than financing, purchasing, owning, selling, servicing and
managing Financed Loans and activities incidental thereto.
SECTION 5.14. NO BORROWING. The Issuer shall not issue, incur, assume,
guarantee or otherwise become liable, directly or indirectly, for any
indebtedness, except for the Notes and such other obligations as are authorized
under the Basic Documents.
SECTION 5.15. CAPITAL EXPENDITURES. The Issuer shall not make any
expenditure (by long- term or operating lease or otherwise) for capital assets
(either realty or personalty).
SECTION 5.16. GUARANTIES, LOANS, ADVANCES AND OTHER LIABILITIES. Except
as contemplated by this Indenture and other Basic Documents, the Issuer shall
not make any loan or advance or credit to, or guarantee (directly or indirectly
or by an instrument having the effect of assuring another's payment or
performance on any obligation or capability of so doing or otherwise), endorse
or otherwise
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become contingently liable, directly or indirectly, in connection with the
obligations, stocks or dividends of, or own, purchase, repurchase or acquire (or
agree contingently to do so) any stock, obligations, assets or securities of, or
any other interest in or make any capital contributions to, any other person.
SECTION 5.17. SERVICING OF FINANCED LOANS. The Issuer shall service all
Financed Loans and enforce the payment and collection of payments of principal
of and interest on such Financed Loans or cause such servicing to be done by one
or more servicers, each evidencing, in the judgment of the Issuer, the
capability and experience necessary to adequately service such Financed Loans.
The Issuer shall not replace the Servicer without prior notice to the Rating
Agencies.
ARTICLE 6
CONCERNING THE INDENTURE TRUSTEE
SECTION 6.1. DUTIES OF INDENTURE TRUSTEE. (a) If an Event of Default
has occurred and is continuing, the Indenture Trustee shall exercise the rights
and powers vested in it by this Indenture and use the same degree of care and
skill in its exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Indenture Trustee undertakes to perform such duties
and only such duties as are specifically set forth in this Indenture
and any Terms Supplement and no implied covenants or obligations shall
be read into this Indenture or any Terms Supplement against the
Indenture Trustee; and
(ii) in the absence of bad faith on its part, the Indenture
Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Indenture Trustee and conforming to the
requirements of this Indenture; provided, however, that the Indenture
Trustee shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture.
(c) The Indenture Trustee may not be relieved from liability for its
own negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b)
of this Section;
(ii) the Indenture Trustee shall not be liable for any error
of judgment made in good faith by a responsible officer unless it is
proved that the Indenture Trustee was negligent in ascertaining the
pertinent facts; and
(iii) the Indenture Trustee shall not be liable with respect
to any action it takes or omits to take in good faith in accordance
with a direction received by it.
(d) The Indenture Trustee shall not be liable for interest on any money
received by it except as the Indenture Trustee may agree in writing with the
Issuer.
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(e) Money held in trust by the Indenture Trustee need not be segregated
from other funds except to the extent required by law or the terms of this
Indenture or the other Basic Documents.
(f) No provision of this Indenture shall require the Indenture Trustee
to expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights of powers, if it shall have reasonable grounds to believe that repayments
of such funds or adequate indemnity satisfactory to it against any loss,
liability or expense is not reasonably assured to it.
(g) Except as expressly provided, the Indenture Trustee shall have no
obligation to administer, service or collect the Financed Loans or to maintain,
monitor or otherwise supervise the administration, servicing or collection of
the Financed Loans.
(h) In the event that the Indenture Trustee is the Paying Agent or Note
Registrar, the rights and protections afforded to the Indenture Trustee pursuant
to this Indenture shall also be afforded to the Indenture Trustee in its
capacity as Paying Agent or Note Registrar.
(i) Every provision of this indenture relating to the conduct or
affecting the liability of or affording protection to the Indenture Trustee
shall be subject to the provision of this Section and to the provisions of the
TIA.
SECTION 6.2. RIGHTS OF INDENTURE TRUSTEE. (a) The Indenture Trustee may
rely on any document believed by it to be genuine and to have been signed or
presented by the proper person. The Indenture Trustee need not investigate any
fact or matter stated in such document.
(b) Before the Indenture Trustee acts or refrains from acting, it may
require an Officer's Certificate of the Issuer or an Opinion of Counsel. The
Indenture Trustee shall not be liable for any action it takes or omits to take
in good faith in reliance on such Officer's Certificate or Opinion of Counsel.
(c) The Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys or a custodian or nominee, and the Indenture Trustee shall
not be responsible for any misconduct or negligence on the part of, or for the
supervision of, any such agent, attorney, custodian or nominee appointed with
due care by it hereunder.
SECTION 6.3. INDIVIDUAL RIGHTS OF INDENTURE TRUSTEE. The Indenture
Trustee in its individual or any other capacity may become the owner or pledgee
of Notes and may otherwise deal with the Issuer or its Affiliates with the same
rights it would have if it were not Indenture Trustee. Any Paying Agent, Note
Registrar, co-registrar or co-paying agent may do the same with like rights.
However, the Indenture Trustee must comply with Sections 6.11 and 6.12.
SECTION 6.4. INDENTURE TRUSTEE'S DISCLAIMER. The Indenture Trustee
shall not be responsible for and makes no representation as to the validity or
adequacy of this Indenture or the Notes, shall not be accountable for the
Issuer's use of the proceeds from the sale of the Notes, and shall not be
responsible for any statement of the Issuer in the Indenture or in any document
issued in connection with the sale of the Notes or in the Notes other than the
Indenture Trustee's certificate of authentication.
SECTION 6.5. NOTICE OF DEFAULTS. (a) If a Default occurs and is
continuing and if it is either actually known or written notice of the existence
thereof has been delivered to a Responsible Officer of the Indenture Trustee,
the Indenture Trustee shall mail notice of the Default to each Noteholder within
90 days after it occurs. Except in the case of a Default in payment of principal
of or interest on any Note,
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the Indenture Trustee may withhold the notice to the Noteholders if and so long
as a committee of its Responsible Officers in good faith determines that
withholding the notice is in the interests of Noteholders of such Series.
(b) If the Indenture Trustee receives notice from the Owner Trustee of
the occurrence of an Insolvency Event with respect to the Depositor pursuant to
Section 9.2 of the Trust Agreement, the Indenture Trustee shall give prompt
written notice to the Noteholders of the occurrence of such event and of the
effect of such event under such Section 9.2. Upon termination of the Trust
pursuant to such Section 9.2, the Indenture Trustee shall, if so directed by the
Owner Trustee, sell the Indenture Trust Estate (other than the Trust Funds and
Accounts) in a commercially reasonable manner and on commercially reasonable
terms. The proceeds of any such sale shall be treated as Revenues under this
Indenture.
SECTION 6.6. REPORTS BY INDENTURE TRUSTEE TO NOTEHOLDERS. The Indenture
Trustee shall deliver to each Noteholder (and to each person who was a
Noteholder at any time during the applicable calendar year) Form 1099's as may
be required to enable such Holder to prepare its Federal and state income tax
returns. Within 60 days after each May 15 beginning with the May 15 following
the first issuance of a Series of Notes, the Indenture Trustee shall mail to
each Noteholder a brief report as of such May 15 that complies with TIA Section
313(a) if required by said section. The Indenture Trustee shall also comply with
TIA Section 313(b). If the issuance of any Series of Notes has been registered
under the Securities Act of 1933, as amended, a copy of each such report
required pursuant to TIA SectionSection 313(a) or (b) shall, at the time of such
transmission to Noteholders, be filed by the Indenture Trustee with the
Commission and with each securities exchange, if any, upon which the Notes of
such Series are listed, provided that the Issuer has previously notified the
Indenture Trustee of such listing.
SECTION 6.7. COMPENSATION AND INDEMNITY. The Issuer shall pay to the
Indenture Trustee for its services, a fee equal to the amount agreed to in
writing between the Indenture Trustee and the Administrator (the "Indenture
Trustee Fee") at the times set forth in the Administration Agreement and shall
or shall cause the Administrator from its own funds to reimburse the Indenture
Trustee for all reasonable out-of-pocket expenses incurred or made by it in
accordance with any provision of this Indenture, including attorney's fees. The
Indenture Trustee's compensation shall not be limited by any law on compensation
of a trustee of an express trust. The Issuer shall or shall cause the
Administrator from its own funds to indemnify the Indenture Trustee against any
and all loss, liability or expense (including attorneys' fees) incurred by it in
connection with the administration of this trust and the performance of its
duties hereunder and the other Basic Documents. The Indenture Trustee shall
notify the Issuer and the Administrator promptly of any claim for which it may
seek indemnity. Failure by the Indenture Trustee to so notify the Issuer and the
Administrator shall not relieve the Issuer or the Administrator of its
obligations hereunder and under the other Basic Documents. The Issuer shall or
shall cause the Administrator to defend the claim and the Administrator shall
not be liable for the legal fees and expenses of the Indenture Trustee after it
has assumed such defense; provided, however, that, in the event that there may
be a conflict between the positions of the Indenture Trustee and the
Administrator or the Issuer in conducting the defense of such claim, the
Indenture Trustee shall be entitled to separate counsel the fees and expenses of
which shall be paid by the Administrator from its own funds on behalf of the
Issuer. Neither the Issuer nor the Administrator need reimburse any expense or
indemnify against any loss, liability or expense incurred by the Indenture
Trustee through the Indenture Trustee's own willful misconduct, negligence or
bad faith.
The Issuer's payment obligations to the Indenture Trustee pursuant to
this Section shall survive the discharge of this Indenture. When the Indenture
Trustee incurs expenses after the occurrence of a Default with respect to the
Issuer, the expenses are intended to constitute expenses of administration under
Title 11 of the United States Code or any other applicable Federal or state
bankruptcy, insolvency or similar law.
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SECTION 6.8. REPLACEMENT OF INDENTURE TRUSTEE. No resignation or
removal of the Indenture Trustee and no appointment of a successor Indenture
Trustee shall become effective until the acceptance of appointment by the
successor Indenture Trustee pursuant to this Section 6.8. The Indenture Trustee
may resign at any time by so notifying the Issuer. The Noteholders of a majority
in Outstanding Amount of the Notes may remove the Indenture Trustee by so
notifying the Indenture Trustee and may appoint a successor Indenture Trustee.
The Issuer shall remove the Indenture Trustee if:
(i) the Indenture Trustee fails to comply with Section
6.11;
(ii) an Insolvency Event occurs with respect to the
Indenture Trustee;
(iii) a receiver or other public officer takes charge of
the Indenture Trustee or its property; or
(iv) the Indenture Trustee otherwise becomes incapable of
acting.
If the Indenture Trustee resigns or is removed or if a vacancy exists
in the office of Indenture Trustee for any reason (the Indenture Trustee in such
event being referred to herein as the retiring Indenture Trustee), the Issuer
shall promptly appoint a successor Indenture Trustee.
A successor Indenture Trustee shall deliver a written acceptance of its
appointment to the retiring Indenture Trustee and to the Issuer. Thereupon the
resignation or removal of the retiring Indenture Trustee shall become effective,
and the successor Indenture Trustee shall have all the rights, powers and duties
of the Indenture Trustee under this Indenture. The successor Indenture Trustee
shall mail a notice of its succession to Noteholders. The retiring Indenture
Trustee shall promptly transfer all property held by it as Indenture Trustee to
the successor Indenture Trustee.
If a successor Indenture Trustee does not take office within 60 days
after the retiring Indenture Trustee resigns or is removed, the retiring
Indenture Trustee, the Issuer or the Noteholders of a majority in Outstanding
Amount of the Notes may petition any court of competent jurisdiction for the
appointment of a successor Indenture Trustee.
If the Indenture Trustee fails to comply with Section 6.11, any
Noteholder may petition any court of competent jurisdiction for the removal of
the Indenture Trustee and the appointment of a successor Indenture Trustee.
Notwithstanding the replacement of the Indenture Trustee pursuant to
this Section, the Issuer's and the Administrator's obligations under Section 6.7
shall continue for the benefit of the retiring Indenture Trustee.
SECTION 6.9. SUCCESSOR INDENTURE TRUSTEE BY MERGER. If the Indenture
Trustee consolidates with, merges or converts into, or transfers all or
substantially all its corporate trust business or assets to, another corporation
or banking association, the resulting, surviving or transferee corporation
without any further act shall be the successor Indenture Trustee; provided that
such corporation or banking association shall be otherwise qualified and
eligible under Section 6.11. The Indenture Trustee shall use its best efforts to
provide the Rating Agencies prior written notice of any such transaction.
In case at the time such successor or successors by merger, conversion
or consolidation to the Indenture Trustee shall succeed to the trusts created by
this Indenture any of the Notes shall have been authenticated but not delivered,
any such successor to the Indenture Trustee may adopt the certificate of
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authentication of any predecessor trustee, and deliver such Notes so
authenticated; and in case at that time any of the Notes shall not have been
authenticated, any successor to the Indenture Trustee may authenticate such
Notes either in the name of any predecessor hereunder or in the name of the
successor to the Indenture Trustee; and in all such cases such certificates
shall have the full force which it is anywhere in the Notes or in this Indenture
provided that the certificate of the Indenture Trustee shall have.
SECTION 6.10. APPOINTMENT OF CO-TRUSTEE OR SEPARATE OWNER TRUSTEE. (a)
Notwithstanding any other provisions of this Indenture, at any time, for the
purpose of meeting any legal requirement of any jurisdiction in which any part
of the Indenture Trust Estate may at the time be located, the Indenture Trustee
shall have the power and may execute and deliver all instruments to appoint one
or more persons to act as co-trustee or co-trustees, or separate trustee or
separate trustees, of all or any part of the Indenture Trust Estate, and to vest
in such person or persons, in such capacity and for the benefit of the
Noteholders, such title to the Indenture Trust Estate, or any part hereof, and,
subject to the other provisions of this Section, such powers, duties,
obligations, rights and trusts as the Indenture Trustee may consider necessary
or desirable. No co-trustee or separate trustee hereunder shall be required to
meet the terms of eligibility as a successor trustee under Section 6.11 and no
notice to Noteholders of the appointment of any co-trustee or separate trustee
shall be required under Section 6.8 hereof.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Indenture Trustee shall be conferred or imposed upon
and exercised or performed by the Indenture Trustee and such separate
trustee or co-trustee jointly (it being understood than such separate
trustee or co-trustee is not authorized to act separately without the
Indenture Trustee joining in such act), except to the extent that under
any law of any jurisdiction in which any particular act or acts are to
be performed the Indenture Trustee shall be incompetent or unqualified
to perform such act or acts, in which event such rights, powers, duties
and obligations (including the holding of title to the Indenture Trust
Estate or any portion thereof in any such jurisdiction) shall be
exercised and performed singly by such separate trustee or co-trustee,
but solely at the direction of the Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by reason
of any act or omission of any other trustee hereunder; and
(iii) the Indenture Trustee may at any time accept the
resignation of or, remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Indenture Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Indenture and
the conditions of this Article VI. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Indenture Trustee or separately, as may be provided therein, subject to all the
provisions of this Indenture, specifically including every provision of this
Indenture relating to the conduct of, affecting the liability of, or affording
protection to, the Indenture Trustee. Every such instrument shall be filed with
the Indenture Trustee.
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(d) Any separate trustee or co-trustee may at any time constitute the
Indenture Trustee, its agent or attorney-in-fact with full power and authority,
to the extent not prohibited by law, to do any lawful act under or in respect of
this Indenture on it's behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all its
estates, properties, rights, remedies and trusts shall vest in and be exercised
by the Indenture Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
SECTION 6.11. ELIGIBILITY; DISQUALIFICATION. The Indenture Trustee
shall at all times satisfy the requirements of TIA Section 310(a). The Indenture
Trustee shall comply with TIA Section 310(b), including the optional provision
permitted by the second sentence of TIA Section 310(b) (9); provided, however,
that there shall be excluded from the operation of TIA Section 310(b) (1) any
indenture or indentures under which other securities of the Issuer are
outstanding if the requirements for such exclusion set forth in TIA Section
310(b) (1) are met.
In addition to the conflicting interests specified in TIA Section
310(b), the Indenture Trustee shall be deemed to have a conflicting interest
prohibited by said Section310(b) and therefore prohibited by this Section 6.11,
if by reason of supplements or amendments to this Indenture as originally
executed, there shall be created covenants, restrictions, conditions or
additional events of default which are applicable to less than all Series of
Notes and the existence of which is sufficiently likely to involve a material
conflict of interest between Series of Notes that is advisable in the public
interest or for the protection of the Noteholders of any Series that the
Indenture Trustee disqualify itself from acting as such with respect to one or
more applicable Series of Notes.
SECTION 6.12. PREFERENTIAL COLLECTION OF CLAIMS AGAINST ISSUER. The
Indenture Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). An Indenture Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated.
SECTION 6.13. STATEMENTS BY INDENTURE TRUSTEE OF FUNDS AND ACCOUNTS AND
OTHER MATTERS. Within ten (10) days following the end of each calendar month,
the Indenture Trustee shall furnish to the Issuer a statement setting forth (to
the extent applicable) with respect to such calendar month, (a) the balances
held by the Indenture Trustee at the end of such month to the credit of each
Fund and Account, (b) the principal amount of Notes Outstanding at the end of
such calendar month and the principal amount thereof prepaid or paid by the
Indenture Trustee during such calendar month and (c) any other information which
the Issuer may request.
ARTICLE 7
DEFAULTS AND REMEDIES
SECTION 7.1. EVENTS OF DEFAULT. The following shall constitute "Events
of Default" with respect to all Outstanding Notes issued hereunder:
(a) Failure in the due and punctual payment of the principal
of or interest on any Note of any Series when the same shall become due
and payable, either at maturity or otherwise;
(b) A material failure by the Issuer in the observance and
performance of any other of the covenants, conditions and agreements of
the Issuer contained in this Indenture and the continuation of such
failure for a period of thirty (30) days after written notice thereof
from the Indenture Trustee or from the Holders of not less than
two-thirds (2/3) in aggregate principal amount of the Notes then
Outstanding; or
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(c) The occurrence of an Insolvency Event with respect to the
Issuer.
Upon the occurrence of an Event of Default, so long as such Event of Default
shall not have been remedied, unless the principal of all of the Notes
Outstanding shall have already become due and payable, the Indenture Trustee
may, and upon written request of the Holders of not less than two-thirds (2/3)
in aggregate principal amount of the Notes then Outstanding, the Indenture
Trustee shall, by written notice to the Issuer, declare the principal of all the
Notes then Outstanding and the interest accrued thereon (excluding Deferred
Interest), to be due and payable immediately; and upon any such declaration the
same shall become and be due and payable on such date, anything contained in
this Indenture or in any of the Notes to the contrary notwithstanding. The right
of the Indenture Trustee to make any such declaration as aforesaid, however, is
subject to the condition that if, at any time after such declaration, but before
any judgment or decree for the payment of moneys due shall have been obtained or
entered unless the same has been discharged, all overdue installments of
interest upon the Notes, together with the reasonable and proper charges,
expenses and liabilities of the Indenture Trustee and the Holders and their
respective agents and attorneys and all other sums then payable by the Issuer
under this Indenture (except the principal of and interest accrued since the
next preceding Distribution Date on the Notes due and payable solely by virtue
of such declaration) shall either be paid by or for the account of the Issuer or
provision satisfactory to the Indenture Trustee shall be made for such payment,
and all defaults under the Notes or under this Indenture (other than the payment
of principal and interest due and payable solely by reason of such declaration)
shall be cured to the satisfaction of the Indenture Trustee or provision deemed
by the Indenture Trustee to be adequate shall be made therefor, or, to the
extent any of such defaults cannot be cured, such defaults shall have been
waived by the Holders of not less than two-thirds (2/3) in aggregate principal
amount of the Notes then Outstanding, by written notice to the Issuer and to the
Indenture Trustee, may rescind such declaration with respect to the Notes and
annul such Event of Default with respect to the Notes, or, if the Indenture
Trustee shall have acted with respect to the Notes without a written request
from the Holders of Notes as provided for herein, and if there shall not have
been theretofore delivered to the Indenture Trustee written notice to the
contrary by the Holders of Notes as provided herein, then the Indenture Trustee
may, by written notice to the Issuer, annul such declaration and any such
default with respect to the Notes and its consequences shall be annulled,
provided that no such rescission and annulment shall extend to or affect any
subsequent Event of Default or impair or exhaust any right or power consequent
thereon.
Upon any declaration of acceleration of the Notes hereunder, the
Indenture Trustee shall give notice of such declaration and its consequences to
Noteholders in the manner set forth in Section 3.1 hereof with respect to notice
of optional purchase prepayment of Notes, to the extent the provisions of such
Section may reasonably be made applicable. Notice of such acceleration having
been given as aforesaid, anything contained in this Indenture or in the Notes to
the contrary notwithstanding, interest shall cease to accrue on the Notes from
and after the date set forth in such notice (which shall be not more than five
(5) days from the date of such declaration).
SECTION 7.2. APPLICATION OF MONEYS. In the event that an Event of
Default shall have occurred and be continuing in respect of the Outstanding
Notes and at any time the moneys held by the Indenture Trustee shall be
insufficient for the payment of the principal of and interest then due on the
Notes, such moneys and all Revenues received or collected from the Indenture
Trust Estate or otherwise for the benefit or account of Holders by the Indenture
Trustee shall be applied first to the payment of the reasonable and proper fees
and expenses of the Indenture Trustee and of such other expenses as are
necessary in the judgment of the Indenture Trustee to prevent loss of Revenues
and to protect the interests of the Holders, including without limitation
servicing expenses, and thereafter as follows:
1. Unless the principal of all of the Notes shall have become or have
been declared due and payable,
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First, to the payment to the persons entitled thereto of all
installments of interest then due on each Series of Notes (including
any interest on overdue principal at the rate borne by the respective
obligations but excluding Deferred Interest) in the order that such
installments of interest shall have become due, and, if the amounts
available shall not be sufficient to pay in full all installments of
interest coming due on the same date, then to the payment thereof
ratably, according to the amount due thereon, to the persons entitled
thereto, without any discrimination or preference,
Second, to the payment to the persons entitled thereto of the
unpaid principal due and unpaid on each Series of Notes at the time of
such payment according to the amounts due for principal, to the persons
entitled thereto without any discrimination or preference and
Third, to the payment to the persons entitled thereto of all
Deferred Interest on Notes.
2. If the principal of all of the Notes shall have become or have been
declared due and payable, to the payment of the principal and interest then due
and unpaid on the Notes without preference or priority of principal over
interest or of interest over principal or of any installment of interest over
any other installment of interest, or of any Note over any other Note, ratably,
according to the amounts due respectively for principal and interest, to the
persons entitled thereto without any discrimination or preference, and then to
the Owner Trustee.
Whenever moneys are to be applied pursuant to the foregoing paragraphs,
such moneys shall be applied at such times, and from time to time, as the
Indenture Trustee in its sole discretion shall determine, having due regard to
the amount of such moneys available for application and the likelihood of
additional moneys becoming available for such application in the future.
Whenever the Indenture Trustee shall exercise such discretion, it shall fix the
date upon which application is to be made, and upon such date interest on the
amounts of principal to be paid on such date shall cease to accrue on the
affected Notes. The Indenture Trustee shall give such notice as it may deem
appropriate of the fixing of any such date and shall not be required to make
payment to the Holder of any unpaid affected Note unless such Note is presented
for appropriate endorsement.
Except as provided in Section 6.5(b) or 10.4(d) hereof, the Indenture
Trustee may not cause any or all of the Indenture Trust Estate to be sold or
otherwise liquidated unless (A) the Noteholders of 100% of the Outstanding
Amount of the Notes consent thereto, (B) the proceeds of such sale or
liquidation distributable to the Noteholders are sufficient to discharge in full
all amounts then due and unpaid upon the Outstanding Notes for principal and
interest or (C) the Indenture Trustee determines that the Indenture Trust Estate
will not continue to provide sufficient funds for the payment of principal of
and interest on the Notes as they would have become due if the Outstanding Notes
had not been declared due and payable, and the Indenture Trustee obtains the
consent of Noteholders of two-thirds (2/3) of the Outstanding Amount of all the
Outstanding Notes. In determining such sufficiency or insufficiency with respect
to clause (B) and (C), the Indenture Trustee may, but need not, obtain and rely
upon an opinion of an Independent investment banking or accounting firm of
national reputation as to the feasibility of such proposed action and as to the
sufficiency of the Indenture Trust Estate for such purpose.
The Indenture Trustee may so sell the Indenture Trust Estate and all
right, title, interest, claim and demand thereto and the right of redemption
thereof, in one or more parts, at any such place or places, and at such time or
times and upon such notice and terms as the Indenture Trustee may deem
appropriate and as may be required by law and apply the proceeds thereof in
accordance with the provisions of this Section 7.2. Upon such sale the Indenture
Trustee may make and deliver to the purchaser or purchasers a good and
sufficient assignment or conveyance for the same, which sale shall be a
perpetual bar both at law and in equity against the Issuer and all persons
claiming such properties. No purchaser at any sale shall be bound
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to see to the application of the purchase money or to inquire as to the
authorization, necessity, expediency or regularity of any such sale.
Nevertheless, the Issuer, if so requested by the Indenture Trustee, shall ratify
and confirm any sale or sales by executing and delivering to the Indenture
Trustee or to such purchaser or purchasers all such instruments as may be
necessary or in the judgment of the Indenture Trustee proper for the purpose
which may be designated in such request.
So long as Notes are Outstanding under this Indenture, if and whenever
all overdue installments of interest on each Series of Notes, together with the
reasonable and proper charges, expenses and liabilities of the Indenture Trustee
and the Holders thereof, their respective agents and attorneys, and all other
sums payable by the Issuer under this Indenture including the principal of and
accrued and unpaid interest on each Series of Notes which shall then be payable
by declaration or otherwise, shall either be paid in full by or for the account
of the Issuer or provision satisfactory to the Indenture Trustee shall be made
for such payment, and all Events of Default under this Indenture or the Notes
shall be made good or secured to the satisfaction of the Indenture Trustee or
provision deemed by the Indenture Trustee to be adequate shall be made therefor,
thereupon the Issuer and the Indenture Trustee shall be restored, respectively,
to their former positions and rights under this Indenture, and all Revenues
shall thereafter be applied as provided in Article 4 hereof and the related
Terms Supplement.
SECTION 7.3. SUITS AT LAW OR IN EQUITY; DIRECTION OF ACTION BY HOLDERS.
If an Event of Default shall occur and shall not have been remedied, then and in
every such case, the Indenture Trustee, either in its own name or as trustee of
an express trust, or as attorney-in-fact for the Holders or in any one or more
of such capacities by its agents and attorneys, shall be entitled and empowered
to proceed forthwith to institute such suits, actions and proceedings at law or
in equity for the collection of all sums due in connection with the Notes and to
protect and enforce its rights and the rights of the Holders under this
Indenture for the specific performance of any covenant herein contained, or in
aid of the execution of any power herein granted, or for an accounting as
trustee of an express trust, or in the enforcement of any legal or equitable
right as the Indenture Trustee, being advised by counsel, shall deem most
effectual to enforce any of its rights, or to perform any of its duties under
this Indenture. The Indenture Trustee shall be entitled and empowered either in
its own name or as a trustee of an express trust, or as attorney-in-fact for the
Holders or in any one or more of such capacities, to file such proof of debt,
claim, petition or other document as may be necessary or advisable in order to
have the claims of the Indenture Trustee and of the Holders allowed in any
equity, receivership, insolvency, bankruptcy, liquidation, readjustment,
reorganization or other similar proceedings. For this purpose the Indenture
Trustee is hereby irrevocably appointed the true and lawful attorney-in-fact of
the respective Holders (and the successive Holders by taking and holding the
same shall be conclusively deemed to have so appointed the Indenture Trustee)
with authority to make and file in the respective names of the Holders any such
proof of debt, amendment of proof of debt, claim, petition or other document in
any such proceedings, and to receive payment of any sums becoming distributable
on account thereof, and to execute any such other papers and documents and to do
and perform any and all acts and things for and on behalf of the Holders as may
be necessary or advisable in the opinion of the Indenture Trustee in order to
have the respective claims of the Indenture Trustee and of the Holders allowed
in any such proceedings and to receive payment of and on account of such claims.
All rights of action under this Indenture may be enforced by the
Indenture Trustee without the possession of any of the Notes or the production
thereof in any suit, action or other proceeding.
The Indenture Trustee, at the request of the Holders of not less than
two-thirds (2/3) in aggregate principal amount of the Notes then Outstanding,
and upon being furnished with reasonable security and indemnity, shall take such
steps and institute such suits, actions or proceedings for the protection and
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enforcement of the rights of the Holders of Notes to collect any amount due and
owing from the Issuer or by injunction or other appropriate proceeding in law or
in equity to obtain other appropriate relief.
SECTION 7.4. SUITS BY INDIVIDUAL HOLDERS. Except as otherwise
specifically provided in this Section 7.4, no Holder shall have any right to
institute any suit, action or proceeding in equity or at law for the enforcement
of any provision of, or the execution of any trust or for any remedy under, this
Indenture unless (i) such Holder is a Holder of one or more Notes then
Outstanding, and such Holder previously shall have given to the Indenture
Trustee notice of the Event of Default on account of which such suit, action or
proceeding is to be instituted, (ii) the Holders of not less than two-thirds
(2/3) in aggregate principal amount of the Notes then Outstanding shall have
filed a written request with the Indenture Trustee after the right to exercise
such powers or right of action, as the case may be, shall have accrued that such
suit, action or proceeding be instituted, (iii) there shall have been offered to
the Indenture Trustee reasonable security and indemnity against the costs,
expenses and liability to be incurred therein or thereby, (iv) the Indenture
Trustee for a period of thirty (30) days after the receipt by it of such notice,
request and offer of indemnity shall have failed to proceed to exercise such
powers or to institute any such action, suit or proceeding, or the Indenture
Trustee shall at any time after such receipt have stated in writing that it
shall not so proceed, and (v) no direction inconsistent with such written
request shall have been given to the Indenture Trustee pursuant to Section 7.3
hereof; it being understood and intended that, except as otherwise above
provided, no one or more Holders shall have any right in any manner whatsoever
by its or their action to affect, disturb or prejudice the pledge created by
this Indenture, or to enforce any right under this Indenture except in the
manner herein provided and that all proceedings at law or in equity shall be
instituted, had and maintained in the manner herein provided for the benefit of
Holders.
Notwithstanding any other provision of this Indenture, the right of any
Holder of any Note to receive payment of the principal of and interest on such
Note, on or after the respective due dates expressed in such Note, or to
institute suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the consent of such
Holder.
SECTION 7.5. REMEDIES NOT EXCLUSIVE. No remedy by the terms of this
Indenture conferred upon or reserved to the Indenture Trustee or the Holders is
intended to be exclusive of any other remedy, but each and every such remedy
shall be cumulative and shall be in addition to every other remedy given under
this Indenture or existing at law or in equity or by statute on or after the
date of adoption of this Indenture.
SECTION 7.6. WAIVERS OF DEFAULT. No delay or omission of the Indenture
Trustee or of any Holder to exercise any right or power arising upon the
happening of an Event of Default shall impair any right or power or shall be
construed to be a waiver of any such Event of Default or to be an acquiescence
therein and every power and remedy given by this Article 7 to the Indenture
Trustee or to the Holders may be exercised from time to time and as often as may
be deemed necessary by the Indenture Trustee or by such Holders.
Prior to a declaration accelerating the maturity of the Notes as
provided in Section 7.1 hereof, the Holders of not less than two-thirds (2/3) in
principal amount of the Notes then Outstanding or their attorneys-in-fact duly
authorized, may waive any past Default hereunder and its consequences except a
Default (a) in payment when due of principal of or interest on any Outstanding
Notes or (b) in respect of a covenant or provision hereof which cannot be
modified or amended without the consent of each Noteholder. In the case of any
such waiver, the Issuer, the Indenture Trustee and the Noteholders shall be
restored to their former positions and rights hereunder respectively, but no
such waiver shall extend to any subsequent failure under this Indenture and its
consequences with respect to the Notes. Upon any such waiver, such Default shall
cease to exist and be deemed to have been cured and not to have occurred for
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every purpose of this Indenture. No such waiver shall extend to any subsequent
or other failure or impair any right consequent thereon.
SECTION 7.7. NOTICE OF EVENTS OF DEFAULT. The Indenture Trustee shall,
within thirty (30) days after the time the Indenture Trustee becomes aware of
the occurrence of an Event of Default, give notice to all Noteholders by
registered mail or by overnight courier service of all Events of Default known
to the Indenture Trustee, unless such Event of Default shall have been cured
before the giving of such notice.
SECTION 7.8. CONTROL BY NOTEHOLDERS. The Noteholders of a majority of
the Outstanding Notes shall have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the Indenture Trustee
with respect to the Notes or exercising any trust or power conferred on the
Indenture Trustee; provided that
(i) such direction shall not be in conflict with any rule of
law or with this Indenture;
(ii) subject to the terms hereof, any direction to the
Indenture Trustee to sell or liquidate the Indenture Trust Estate shall
be by the Noteholders of not less than 100% of the Outstanding Notes;
(iii) if the conditions set forth herein have been satisfied
and the Indenture Trustee elects to retain the Indenture Trust Estate
pursuant to such Section, then any direction to the Indenture Trustee
by Noteholders of less than 100% of the Outstanding Amount of the Notes
to sell or liquidate the Indenture Trust Estate shall be of no force
and effect; and
(iv) the Indenture Trustee may take any other action deemed
proper by the Indenture Trustee that is not inconsistent with such
direction;
provided, however, that, the Indenture Trustee need not take any action that it
determines might involve it in liability or might materially adversely affect
the rights of any Noteholders not consenting to such action.
Upon any such waiver, such Default shall cease but to exist and be
deemed to have been cured and not to have occurred for every purpose of this
indenture; but no such waiver shall extend to any subsequent or other Default or
impair any right consequent thereto.
SECTION 7.9. UNDERTAKING FOR COSTS. All parties to this Indenture
agree, and each Noteholder by such Noteholder's acceptance of any Note shall be
deemed to have agreed, that any court may in its discretion require, in any suit
for the enforcement of any right or remedy under this Indenture, or in any suit
against the Indenture Trustee for any action taken, suffered or omitted by it as
Indenture Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to (a) any suit instituted by the
Indenture Trustee, (b) any suit instituted by any Noteholder, or group of
Noteholders, in each case holding in the aggregate more than 10% of the
Outstanding Amount of the Outstanding Notes or (c) any suit instituted by any
Noteholder for the enforcement of the payment of principal of or interest on any
Note on or after the respective due dates expressed in such Note.
SECTION 7.10. UNCONDITIONAL RIGHTS OF NOTEHOLDERS TO RECEIVE PRINCIPAL
AND INTEREST. Notwithstanding any other provisions in this Indenture, any
Noteholder shall have the right, which is
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absolute and unconditional, to receive payment of the principal and interest, if
any, on such Note on or after the respective due dates thereof expressed in such
Note or in this Indentures and to institute suit for the enforcement of any such
payment, and such rights shall not be impaired without the consent of such
Noteholder.
ARTICLE 8
NOTEHOLDERS' LISTS AND REPORTS
SECTION 8.1. ISSUER TO FURNISH INDENTURE TRUSTEE NAMES AND ADDRESSES OF
NOTEHOLDERS. The Issuer will furnish or cause to be furnished to the Indenture
Trustee (a) not more than five days after the earlier of (i) each Record Date
for a Series and (ii) three months after the last Record Date for such Series, a
list, in such form as the Indenture Trustee may reasonably require, of the names
and addresses of the Noteholders of such Series as of such Record Date and (b)
at such other times as the Indenture Trustee may request in writing, within 30
days after receipt by the Issuer of any such request, a list of similar form and
content as of a date not more than 10 days prior to the time such list is
furnished; provided, however, that so long as the Indenture Trustee is the Note
Registrar, no such list shall be required to be furnished.
SECTION 8.2. PRESERVATION OF INFORMATION; COMMUNICATIONS TO
NOTEHOLDERS. (a) The Indenture Trustee shall preserve, in as current a form as
is reasonably practicable, the names and addresses of the Noteholders contained
in the most recent list furnished to the Indenture Trustee as provided in
Section 8.1 and the name and addresses of Noteholders received by the Indenture
Trustee in its capacity as Note Registrar. The Indenture Trustee may destroy any
list furnished to it as provided in such Section 8.1 upon receipt of a new list
so furnished.
(b) Noteholders may communicate pursuant to TIA Section 312(b) with
other Noteholders with respect to their rights under this Indenture or under the
Notes. Upon receipt by the Indenture Trustee of any request by three or more
Noteholders or by one or more Noteholders owning not less than 25% of the
Outstanding Amount of the Notes to receive a copy of the current list of
Noteholders (whether or not made pursuant to TIA Section 312(b)), the Indenture
Trustee shall promptly notify the Issuer and the Administrator thereof by
providing to the Issuer and the Administrator a copy of such request and a copy
of the list of Noteholders produced in response thereto.
(c) The Issuer, the Indenture Trustee and the Note Registrar shall have
the protection of TIA Section 312(c).
(d) On each Distribution Date, the Indenture Trustee shall provide to
each Noteholder of record as of the related Record Date the information provided
by the Administrator or the Owner Trustee to the Indenture Trustee on the
related Determination Date pursuant to the Administration Agreement.
(e) The Indenture Trustee shall furnish to the Noteholders promptly
upon receipt of a written request therefor, duplicates or copies of all reports,
notices, requests, demands, certificates, financial statements and any other
instruments furnished to the Indenture Trustee under the Basic Documents.
SECTION 8.3. REPORTS BY ISSUER. (a) If the issuance of any Series of
Notes has been registered under the Securities Act of 1933, as amended, the
Issuer shall:
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(i) file with the Indenture Trustee, within 15 days after the
Issuer is required to file the same with the Commission, copies of the
annual reports and of the information, documents and other reports (or
copies of such portions of any of the foregoing as the Commission may
from time to time by rules and regulations prescribe) which the Issuer
may be required to file with the Commission pursuant to Section 13 or
15(d) of the Exchange Act;
(ii) file with the Indenture Trustee and the Commission in
accordance with rules and regulations prescribed from time to time by
the Commission such additional information, documents and reports with
respect to compliance by the Issuer with the conditions and covenants
of this Indenture as may be required from time to time by such rules
and regulations; and
(iii) supply to the Indenture Trustee (and the Indenture
Trustee shall transmit by mail to all Noteholders of the related Series
described in TIA Section 313(c)) such summaries of any information,
documents and reports required to be filed by the Issuer pursuant to
clauses (i) and (ii) of this Section 8.3(a) as may be required by rules
and regulations prescribed from time to time by the Commission.
(b) Unless the Issuer otherwise determines, the fiscal year of the
Issuer shall end on December 31 of each year.
ARTICLE 9
AMENDING AND SUPPLEMENTING OF INDENTURE
SECTION 9.1. AMENDING AND SUPPLEMENTING OF INDENTURE WITHOUT CONSENT OF
NOTEHOLDERS. (a) Without the consent of any Noteholders but with prior notice to
the Rating Agencies, the Issuer and the Indenture Trustee, when authorized by an
Issuer Order, at any time and from time to time, may enter into one or more
indentures supplemental hereto (which shall conform to the provisions of the
Trust Indenture Act as in force at the date of the execution thereof), in form
satisfactory to the Indenture Trustee, for any of the following purposes:
(i) to correct or amplify the description of any property at
any time subject to the lien of each Terms Supplement, or better to
assure, convey and confirm unto the Indenture Trustee any property
subject or required to be subjected to the lien of each Terms
Supplement, or to subject to the lien of each Terms Supplement
additional property;
(ii) to evidence the succession, in compliance with the
applicable provisions hereof, of another person to the Issuer, and the
assumption by any such successor of the covenants of the Issuer herein
and in the Notes contained;
(iii) to add to the covenants of the Issuer, for the benefit
of the Noteholders of all Notes or of the Notes of any Series, or to
surrender any right or power herein conferred upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any
property to or with the Indenture Trustee;
(v) to cure any ambiguity, to correct or supplement any
provision herein or in any supplemental indenture which may be
inconsistent with any other provision herein or in any
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supplemental indenture or to make any other provisions with respect to
matters or questions arising under this Indenture or in any
supplemental indenture; provided that such action shall not materially
adversely affect the interests of the Noteholders of any Series;
(vi) to evidence and provide for the acceptance of the
appointment hereunder by a successor indenture trustee with respect to
the Notes and to add to or change any of the provisions of this
Indenture as shall be necessary to facilitate the administration of the
trusts hereunder by more than one trustee, pursuant to the requirements
of Article VI;
(vii) to add to the conditions, limitations and restrictions
on the authorized amount, terms and purposes of the issuance,
authentication and delivery of any Series of Notes, as herein set
forth, additional conditions, limitations and restrictions thereafter
to be observed;
(viii) to set forth the terms of, and security for, any Series
that has not theretofore been authorized by a Terms Supplement;
(ix) to modify or eliminate any of the terms of this
Indenture; provided, however, that
(A) such supplemental indenture shall expressly
provide that any such modifications or eliminations shall not
be effective with respect to any Outstanding Note of any
Series created prior to the execution of such supplemental
indenture; and
(B) the Indenture Trustee may, in its discretion,
decline to enter into any such supplemental indenture which,
in its opinion, would adversely affect its own rights, duties
or immunities;
(x) to provide for the issuance of Notes of any Series
(including Notes of a Series theretofore authorized and then
Outstanding) or any Class within such Series in bearer form with
coupons ("Bearer Notes") and for the exchangeability of Bearer Notes
and Notes of the same Series and Class issued in registered form
("Registered Notes"); any such supplemental indenture may provide for
payments on Bearer Notes only outside the United States and for
appointment of a foreign Paying Agent that is acceptable to the Rating
Agencies that rated the initial Series of the Notes and may also
contain any provisions as may in the Issuer's judgment be necessary,
appropriate or convenient (a) to permit the Notes to be issued and sold
to or held in bearer form by non-United States persons, (b) to
establish entitlement to an exemption from United States withholding
tax or reporting requirements with respect to payments on the Notes,
(c) to comply, or facilitate compliance, with other applicable laws or
regulations, (d) to provide for usual and customary provisions for
communication (by notice, publication, maintenance of lists of holders
of Bearer Notes who have provided names and addresses for such purpose,
or otherwise) with holders of Bearer Notes, or (e) to otherwise
effectuate provisions of the issuance of Bearer Notes and their
exchangeability with Registered Notes; or
(xi) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the
qualification of this Indenture under the TIA or under any similar
Federal statute hereafter enacted and to add to this Indenture such
other provisions as may be expressly required by the TIA.
The Indenture Trustee is hereby authorized to join in the execution of
any such supplemental indenture and to make any further appropriate agreements
and stipulations that may be therein contained.
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(b) The Issuer and the Indenture Trustee, when authorized by an Issuer
Order, may also, without the consent of any of the Noteholders but with prior
notice to the Rating Agencies, enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to, or changing in
any manner or eliminating any of the provisions of, this Indenture or of
modifying in any manner the rights of the Noteholders under this Indenture;
provided, however, that such action shall not adversely affect the ratings then
assigned to any Notes or Certificates, as evidenced by an Officer's Certificate
to such effect delivered to the Indenture Trustee (upon which the Indenture
Trustee may conclusively rely), accompanied by letters from each Rating Agency
(or other evidence satisfactory to the Indenture Trustee) confirming that the
adoption of such indenture or indentures will not adversely affect the ratings
then assigned by such Rating Agency to any Notes or Certificates Outstanding.
SECTION 9.2. AMENDMENT OF INDENTURE WITH CONSENT OF HOLDERS. The Issuer
and the Indenture Trustee, when authorized by an Issuer Order, also may, with
prior notice to the Rating Agencies, and with prior notice to and the consent of
the Noteholders of not less than a majority of the Outstanding Amount of all the
Notes in case Outstanding Notes of all Series are to be affected or with the
consent of the Noteholders of not less than a majority of the Outstanding Amount
of the Notes to be affected in case one or more, but less than all, of the
Series of Outstanding Notes are to be affected, by act of such Noteholders
delivered to the Issuer and the Indenture Trustee, enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to, or
changing in any manner or eliminating any of the provisions of, this Indenture
relating to such Series or of modifying in any manner the rights of the
Noteholders of such Series under this Indenture; provided, however, that no such
supplemental indenture shall, without the consent of the Noteholders of each
Outstanding Note affected thereby:
(i) change the date of payment of any installment of principal
of or interest on any Note, or reduce the principal amount thereof or
the interest rate thereon, change the provisions of this Indenture
relating to the application of collections on, or the proceeds of the
sale of, the Indenture Trust Estate to payment of principal of or
interest on the Notes, or change any place of payment where, or the
coin or currency in which any Note or the interest thereon is payable,
or impair the right to institute suit for the enforcement of the
provisions of this Indenture requiring the application of funds
available therefor, as provided in Article IV, to the payment of any
such amount due on the Notes on or after the respective due dates
thereof;
(ii) reduce the percentage of the Outstanding Amount of the
Notes of any Series, the consent of the Noteholders of which is
required for any such supplemental indenture, or the consent of the
Noteholders of which is required for any waiver of compliance with
certain provisions of this Indenture or certain defaults hereunder and
their consequences provided for in this indenture;
(iii) modify or alter the provisions of the proviso to the
definition of the term "Outstanding";
(iv) reduce the percentage of the Outstanding Amount of the
Notes of any Series required to direct the Indenture Trustee to direct
the Issuer to sell or liquidate the Indenture Trust Estate pursuant to
Section 7.1;
(v) modify any provision of this Section except to increase
any percentage specified herein or to provide that certain additional
provisions of this Indenture or the other Basic Documents cannot be
modified or waived without the consent of the Noteholder of each
Outstanding Note affected thereby;
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(vi) modify any of the provisions of this Indenture in such
manner as to affect the calculation of the amount of any payment of
interest or principal due on any Note on any Distribution Date; or
(vii) permit the creation of any lien ranking prior to or on a
parity with the lien of this Indenture with respect to any part of the
Indenture Trust Estate or, except as otherwise permitted or
contemplated herein, terminate the lien of this Indenture on any
property at any time subject hereto or deprive any Noteholder of any
Note of the security provided by the lien of this Indenture.
It shall not be necessary for any act of Noteholders under this Section
to approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such act shall approve the substance thereof.
Promptly after the execution by the Issuer and the Indenture Trustee of
any supplemental indenture pursuant to this Section, the Indenture Trustee shall
mail to the Noteholders of the Notes of each Series to which such amendment or
supplemental indenture relates a notice setting forth in general terms the
substance of such supplemental indenture. Any failure of the Indenture Trustee
to mail such notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such supplemental indenture.
SECTION 9.3. EXECUTION OF SUPPLEMENTAL INDENTURES. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modifications thereby of the trusts created
by this Indenture, the Indenture Trustee shall be entitled to receive, and
subject to Sections 6.1 and 6.2, shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution or such supplemental indenture is
authorized or permitted by this indenture. The Indenture Trustee may, but shall
not be obligated to, enter into any such supplemental indenture that affects the
Indenture Trustee's own rights, duties, liabilities or immunities under this
indenture or otherwise.
SECTION 9.4. EFFECT OF SUPPLEMENTAL INDENTURE. Upon the execution of
any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and be deemed to be modified and amended in accordance therewith with
respect to the Notes of each Series affected thereby, and the respective rights,
limitations of rights, obligations, duties, liabilities and immunities under
this indenture of the Indenture Trustee, the Issuer and the Noteholders shall
thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.
SECTION 9.5. CONFORMITY WITH TRUST INDENTURE ACT. Every amendment of
this Indenture and every supplemental indenture executed pursuant to this
Article IX shall conform to the requirements of the Trust Indenture Act as then
in effect so long as this Indenture shall then be qualified under the Trust
Indenture Act.
SECTION 9.6. REFERENCE IN NOTES TO SUPPLEMENTAL INDENTURES. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX which relates to the Series of which such Notes are
a part may, and if required by the Indenture Trustee shall, bear a notation in
form approved by the Indenture Trustee as to any matter provided for in such
supplemental indenture. If the Issuer or the Indenture Trustee shall so
determine, new Notes so modified as to conform, in the opinion of the Indenture
Trustee and the Issuer, to any such supplemental indenture which relates to the
Series of which such Notes are a part may be prepared and executed by the issuer
and authenticated and delivered by the Indenture Trustee in exchange for
Outstanding Notes of such Series.
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ARTICLE 10
SATISFACTION AND DISCHARGE OF INDENTURE;
SUBSTITUTION AND RELEASE OF INDENTURE ESTATE
SECTION 10.1. SATISFACTION AND DISCHARGE OF INDENTURE. This Indenture
shall cease to be of further effect with respect to a Series of Notes except as
to (i) rights of registration of transfer and exchange, (ii) substitution of
mutilated, destroyed, lost or stolen Notes of such Series, (iii) rights of
Noteholders to receive payments of principal thereof and interest thereon, (iv)
the rights, obligations and immunities of the Indenture Trustee hereunder and
(v) the rights of Noteholders as beneficiaries hereof with respect to the
property so deposited with the Indenture Trustee payable to all or any of them,
and the Indenture Trustee, on demand of and at the expense of the Issuer, shall
execute proper instruments acknowledging satisfaction and discharge of this
Indenture with respect to the Notes, when:
(A) either
(1) all Notes of such Series theretofore
authenticated and delivered (other than (i) Notes that have
been destroyed, lost or stolen and that have been replaced as
provided in Section 2.8 and (ii) Notes for whose payment money
has been deposited in trust as provided in Section 5.9) have
been delivered to the Indenture Trustee for cancellation; or
(2) all Notes of such Series not theretofore
delivered to the Indenture Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable within one
year,
and the Issuer, in the case of (i) or (ii) above, has
irrevocably deposited or caused to be irrevocably deposited
with the Indenture Trustee cash or direct obligations of or
obligations guaranteed by the United States of America (which
will mature prior to the date such amounts are payable), in
trust for such purpose, in an amount sufficient to pay and
discharge the entire indebtedness on such Series of Notes not
theretofore delivered to the Indenture Trustee for
cancellation when due to the applicable Maturity Date;
(B) the Issuer has paid or caused to be paid all other sums
payable hereunder by the Issuer with respect to such Series; and
(C) the Issuer has delivered to the Indenture Trustee an
Officer's Certificate of the Issuer an Opinion of Counsel and an
Independent Certificate from a firm of certified public accountants,
each meeting the applicable requirements of Section 11.10(a) and,
subject to Section 11.11 each stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of this
Indenture with respect to such Series have been complied with.
SECTION 10.2. APPLICATION OF TRUST MONEY. All moneys deposited with the
Indenture Trustee pursuant to Section 10.1(A) hereof shall be held in trust and
applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent, as the
Trustee may determine, to the Noteholders of the particular Notes for the
payment of which such moneys
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have been deposited with the Trustee, of all sums due and to become due thereon
for principle and interest; but such moneys need not be segregated from other
funds except to the extent required herein or required by law.
SECTION 10.3. REPAYMENT OF MONEYS HELD BY PAYING AGENT. In connection
with the satisfaction and discharge of this Indenture with respect to a Series
of Notes, all moneys then held by any Paying Agent other than the Indenture
Trustee under the provisions of this Indenture with respect to such Series of
Notes shall, upon demand of the Issuer, be paid to the Indenture Trustee to be
held and applied according to Section 5.9 and thereupon such Paying Agent shall
be released from all further liability with respect to such moneys.
SECTION 10.4. RELEASE OF INDENTURE TRUST ESTATE. (a) In connection with
any release of Financed Loans to which the Issuer is entitled pursuant to this
Section 10.4 and the related Terms Supplement, the Indenture Trustee shall
execute appropriate instruments to release such Financed Loans from the lien of
any Terms Supplement, or convey the Indenture Trustee's interest in the same. No
party relying upon an instrument so executed by the Indenture Trustee shall be
bound to ascertain the Indenture Trustee's authority, inquire into the
satisfaction of any conditions precedent or see to the application of any
moneys.
(b) The Indenture Trustee shall, at such time as there are no Notes
Outstanding and all sums due the Indenture Trustee pursuant to Section 6.7 have
been paid, release any remaining portion of the Indenture Trust Estate that
secured the Notes from the lien of any Terms Supplement and release to the Owner
Trustee for the benefit of the Certificateholders any funds then on deposit in
the Funds and Accounts.
(c) The Indenture Trustee shall release property from the lien of each
Terms Supplement pursuant to this Section 10.4 only upon receipt of an Issuer
Request accompanied by an Officer's Certificate of the Issuer and an Opinion of
Counsel (and if required by the TIA, Independent Certificates) in accordance
with TIA SectionSection 314(c) and 314(d) (1) meeting the applicable
requirements of Section 11.10.
(d) On any Distribution Date on or after which the Balance in the
applicable Account of the Student Loan Portfolio Fund is equal to or less than a
certain percentage (as specified in the related Terms Supplement) of the Initial
Pool Balance with respect to the Financed Loans in such Account, the Seller may
repurchase such Financed Loans at a purchase price equal to the outstanding
principal balance of such Financed Loans, plus accrued and unpaid interest. The
proceeds of the sale of such Financed Loans shall be credited to the applicable
subaccount in the Note Payment Account within the Note Fund and used on that
Distribution Date for mandatory distributions of principal.
(e) Each Noteholder, by acceptance of a Note, acknowledges that from
time to time the Indenture Trustee shall release the lien of this Indenture as
set forth in this Section 10.4 and Sections 2.14, 4.4, 5.2, 5.4 and 5.5 hereof,
and each Noteholder, by acceptance of a Note, consents to any such release.
SECTION 10.5. OPINION OF COUNSEL. The Indenture Trustee shall receive
at least five days' notice when requested by the Issuer to take any action
pursuant to Section 10.4, accompanied by copies of any instruments involved, and
the Indenture Trustee shall also require, as a condition to such action, an
Opinion of Counsel, in form and substance satisfactory to the Indenture Trustee,
stating the legal effect of any such action, outlining the steps required to
complete the same, and concluding that all conditions precedent to the taking of
such action have been complied with and such action will not materially and
adversely impair the security for the Notes or the rights of the Noteholders in
contravention of the provisions of this Indenture; provided, however, that such
Opinion of Counsel shall not be required to express an opinion as to the fair
value of the Indenture Trust Estate. Counsel rendering any such opinion may
rely,
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without independent investigation, on the accuracy and validity of any
certificate or other instrument delivered to the Indenture Trustee in connection
with any such action.
SECTION 10.6. NOTES NOT PRESENTED FOR PAYMENT WHEN DUE; MONEYS HELD FOR
THE NOTES AFTER DUE DATE THEREOF. Subject to the provisions of the next sentence
of this Section 10.6, if any Note shall not be presented for payment when the
principal thereof shall become due, whether at maturity or at the date fixed for
the redemption thereof, or otherwise, and if moneys and/or Investment Securities
shall at such due date be held by the Indenture Trustee, in trust for that
purpose sufficient and available to pay the principal of such Note, together
with all interest due on such principal to the due date thereof, or to the date
fixed for redemption thereof, as the case may be, all liability of the Issuer
for such payment shall forthwith cease, terminate and be completely discharged,
and thereupon it shall be the duty of the Indenture Trustee, to hold said moneys
and/or Investment Securities without liability to the Holder of such Note for
interest thereon, in trust for the benefit of the Holder of such Note, who
thereafter shall be restricted exclusively to said moneys and/or Investment
Securities for any claim of whatever nature on its part on or with respect to
said Note, including for any claim for the payment thereof; provided, however,
that any such moneys and/or Investment Securities held by the Indenture Trustee
remaining unclaimed by the Holders of such Notes for three (3) years after the
principal of the respective Notes with respect to which such moneys and/or
Investment Securities have been so set aside has become due and payable (whether
at maturity or upon redemption or otherwise) shall be paid to the Issuer free
from the trusts created by this Indenture, and all liabilities of the Indenture
Trustee with respect to such moneys and/or Investment Securities shall cease.
ARTICLE 11
MISCELLANEOUS
SECTION 11.1. BENEFITS OF INDENTURE. With the exception of rights or
benefits herein expressly conferred, nothing expressed or mentioned in or to be
implied from this Indenture or the Notes is intended or shall be construed to
confer upon or give to any person other than the Issuer, the Indenture Trustee,
the Owner Trustee, the Noteholders and the Certificateholders, any legal or
equitable right, remedy or claim under or by reason of or in respect to this
Indenture or any covenant, condition, stipulation, promise, agreement or
provision herein contained in this Indenture, and all of the covenants,
stipulations, promises, agreements and provisions hereof are intended to be and
shall be for and inure to the sole and exclusive benefit of the Issuer, the
Indenture Trustee, the Owner Trustee, the Noteholders and the Certificateholders
from time to time as herein and therein provided.
SECTION 11.2. INDENTURE BINDING UPON SUCCESSORS OR ASSIGNS OF THE
ISSUER. All the terms, provisions, conditions covenants, warranties and
agreements contained in this Indenture shall be binding upon the Issuer and the
successors and assigns of the Issuer, and shall inure to the benefit of the
Indenture Trustee, its successors or substitutes in trust and assigns, and the
Noteholders.
SECTION 11.3. EFFECT OF LEGAL HOLIDAYS. Whenever this Indenture
requires any action to be taken on a day which is not a Business Day, such
action shall be taken on the next succeeding Business Day (except as otherwise
expressly provided herein) with the same force and effect as if taken on such
day.
SECTION 11.4. PARTIAL INVALIDITY. If any one or more of the covenants
or agreements or portions thereof provided in this Indenture on the part of the
Issuer or the Indenture Trustee to be performed should be determined by a court
of competent jurisdiction to be contrary to law, then such covenant or
covenants, or such agreement or agreements, or such portions thereof, shall be
deemed severable from the remaining covenants and agreements provided in this
Indenture and the invalidity thereof shall in no way
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affect the validity of the other provisions of this Indenture or of the Notes,
and the Noteholders shall retain all the rights and benefits accorded to them
hereunder and under any applicable provisions of law.
SECTION 11.5. NOTICES; NOTICE TO NOTEHOLDERS; WAIVER. Except as
otherwise expressly provided herein, any notice to or demand upon the Indenture
Trustee may be served or presented, and such demand may be made, at the
principal corporate trust office of the Indenture Trustee, which at the date of
adoption of this Indenture is located at Two International Place, Boston,
Massachusetts 02211, Attention: Corporate Trust Department, or at such other
address as may have been designated by the Indenture Trustee in accordance with
this Indenture. Except as otherwise expressly provided herein, any notice to or
demand upon the Issuer may be served or presented, and such demand may be made,
to Nellie Mae Education Loan Trust in care of Fleet National Bank, Corporate
Trust Department at One Federal Street, Boston, Massachusetts 02110 with a copy
to the Administrator, Nellie Mae, Inc., 50 Braintree Hill Park, Suite 300,
Braintree, Massachusetts 02184, Attention: John F. Remondi, Treasurer, or to the
Issuer at such other address or numbers as may have been filed in writing by the
Issuer with the Indenture Trustee. Any notice required to be in writing shall be
deemed to be in writing if given by telex, telecopier or other method which
produces a legible written record.
Notices required to be given to the Rating Agencies shall be in
writing, personally delivered or mailed by certified mail, return receipt
requested, to (i) in the case of Moody's, at the following address: Moody's
Investors Service, Inc., ABS Monitoring Department, 99 Church Street, New York,
New York 10007 and (ii) in the case of Fitch, at the following address: Fitch
Investors Service, Inc., Municipal Structured Finance Group, One State Street
Plaza, New York, New York 10004; or as to each of the foregoing, at such other
address as shall be designated by written notice to the other parties.
Where this Indenture provides for notice to Noteholders of any event,
such notice shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and mailed, first-class, postage prepaid to each
Noteholder affected by such event, at his address as it appears on the Note
Register, not later than the latest date, and not earlier than the earliest
date, prescribed for the giving of such notice. In any case where notice to
Noteholders is given by mail, neither the failure to mail such notice nor any
defect in any notice so mailed to any particular Noteholder shall affect the
sufficiency of such notice with respect to other Noteholders, and any notice
that is mailed in the manner herein provided shall conclusively be presumed to
have been duly given.
Where this Indenture provides for notice in any manner, such notice may
be waived in writing by any person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Noteholders shall be filed with the Indenture
Trustee but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such a waiver.
Where this Indenture provides for notice to the Rating Agencies,
failure to give such notice shall not affect any other rights or obligations
created hereunder, and shall not under any circumstance constitute an Event of
Default.
SECTION 11.6. GOVERNING LAW. This Indenture shall be construed and
interpreted in accordance with the laws of the Commonwealth without regard to
the conflicts of law principles of such state.
SECTION 11.7. EFFECT OF ARTICLE AND SECTION HEADINGS AND TABLE OF
CONTENTS. The heading or titles of the several Articles and Sections hereof, and
any table of contents appended hereto, shall
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be solely for convenience of reference and shall not affect the meaning or
construction, interpretation or effect of this Indenture.
SECTION 11.8. SUSPENSION OF MAIL. If because of the suspension of
delivery of first class mail or, for any other reason, the Indenture Trustee
shall be unable to mail by the required class of mail any notice, request,
complaint, demand or other instrument or document required to be mailed hereby,
the Indenture Trustee shall give it in any other manner which shall approximate
most effectively the mailing thereof in accordance herewith in the judgment of
the Indenture Trustee. The giving of that notice, request, complaint, demand or
other instrument or document in that manner shall be deemed for all purposes of
this Indenture to be in compliance with the requirement for the mailing thereof.
Except as provided otherwise herein, the mailing of any notice, request,
complaint, demand or other instrument or document shall be deemed to be complete
upon deposit thereof in the mail, and the giving thereof by any other means of
delivery shall be deemed to be complete upon receipt thereof by the delivery
service.
SECTION 11.9. EXECUTION COUNTERPARTS. This Indenture may be executed in
several counterparts, each of which shall be regarded as an original and all of
which shall constitute one and the same document. It shall not be necessary in
proving this Indenture to produce or account for more than one of those
counterparts.
SECTION 11.10. COMPLIANCE CERTIFICATES AND OPINIONS, ETC. (a) Upon any
application or request by the Issuer to the Indenture Trustee to take any action
under any provision of this Indenture, the Issuer shall furnish to the Indenture
Trustee (i) an Officer's Certificate of the Issuer stating that all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with and (ii) an Opinion of Counsel stating that in
the opinion of such counsel all such conditions precedent, if any, have been
complied with (and an Independent Certificate from a firm of certified public
accountants) meeting the applicable requirements of this Section, except that,
in the case of any such application or request as to which the furnishing of
such documents is specifically required by any provision of this Indenture, no
additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(i) a statement that such signatory of such certificate or
opinion has read or has caused to be read such covenant or condition
and the definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(iii) a statement that, in the opinion of each such signatory,
such signatory has made such examination or investigation as is
necessary to enable such signatory to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each such
signatory, such condition or covenant has been complied with.
(b) (i) Other than any property released as contemplated by
clause (iii) below, whenever any property or securities are to be
released from the lien of this Indenture and the related Terms
Supplements, the Issuer shall also furnish to the Indenture Trustee an
Officer's Certificate of the Issuer certifying or stating the opinion
of each person signing such certificate as to the fair value
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(within 90 days of such release) of the property or securities proposed
to be released and stating that in the opinion of such person the
proposed release will not impair the security under this Indenture in
contravention of the provisions hereof.
(ii) Whenever the Issuer is required to furnish to the
Indenture Trustee an Officer's Certificate of the Issuer certifying or
stating the opinion of any signer thereof as to the matters described
in clause (b)(i) above, the Issuer shall also furnish to the Indenture
Trustee an Independent Certificate as to the same matters if the fair
value of the property or securities and of all other property, other
than property as contemplated by clause (iii) below, or securities
released from the lien of this Indenture and the related Terms
Supplements since the commencement of the then-current calendar year,
as set forth in the certificates required by clause (i) above and this
clause (ii) equals 10% or more of the Outstanding Amount of the Notes,
but such certificate need not be furnished in the case of any release
of property or securities if the fair value thereof as set forth in the
related Officer's Certificate is less than $25,000 or less than one
percent of the then Outstanding Amount of the Notes Outstanding.
(iii) Notwithstanding Section 2.14 or any other provisions of
this Section, the Issuer may, without compliance with the requirements
of the other provisions of this Section, (A) collect, liquidate, sell,
service, convey, administer, manage or otherwise dispose of Financed
Loans as and to the extent permitted or required by the Basic
Documents, (B) make cash payments out of the Trust Funds and Accounts
as and to the extent permitted or required by the Basic Documents, so
long as the Issuer shall deliver to the Indenture Trustee every six
months, commencing six months after the first issuance of a Series of
Notes, an Officer's Certificate of the Issuer stating that all the
dispositions of any portion of the Indenture Trust Estate described in
clauses (A) or (B) above that occurred during the immediately preceding
six calendar months were applied in accordance with the Basic
Documents.
SECTION 11.11. FORM OF DOCUMENTS DELIVERED TO INDENTURE TRUSTEE. In any
case where several matters are required to be certified by, or covered by an
opinion of, any specified person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such person, or that they
be so certified or covered by only one document, but one such person may certify
or give an opinion with respect to some matters and one or more other such
persons as to other matters, and any such person may certify or give an opinion
as to such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of the Issuer may
be based, insofar as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate of an Authorized Officer or
Opinion of Counsel may be based, insofar as it relates to factual matters, upon
a certificate or opinion of, or representations by, an officer or officers of
the Servicer, the Seller, the Issuer or the Administrator, stating that the
information with respect to such factual matters is in the possession of the
Servicer, the Seller, the Issuer or the Administrator, unless such counsel
knows, or in the exercise of reasonable care should know, that the certificate
or opinion or representations with respect to such matters are erroneous.
Where any person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
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Whenever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the Issuer
shall deliver any document as a condition of the granting of such application,
or as evidence of the Issuer's compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application or
at the effective date of such certificate or report (as the case may be), of the
facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Issuer to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however, be
construed to affect the Indenture Trustee's right to rely upon the truth and
accuracy of any statement or opinion contained in any such document as provided
in Article VI.
SECTION 11.12. CONFLICT WITH TRUST INDENTURE ACT. If any provision
hereof limits, qualifies or conflicts with another provision hereof that is
required to be included in this Indenture by any of the provisions of the TIA,
such required provision shall control.
The provisions of TIA SectionSection 310 through 317 that impose duties
on any person (including the provisions automatically deemed included herein
unless expressly excluded by this Indenture) are a part of and govern this
Indenture, whether or not physically contained herein.
SECTION 11.13. RECORDING OF INDENTURE. If this Indenture is subject to
recording in any appropriate public recording offices, such recording is to be
effected by the Issuer and at its expenses accompanied by an Opinion of Counsel
(which may be counsel to the Issuer or any other counsel reasonably acceptable
to the Indenture Trustee) to the effect that such recording is necessary either
for the protection of the Noteholders or any other person secured hereunder or
for the enforcement of any right or remedy granted to the Indenture Trustee
under this Indenture.
SECTION 11.14. TRUST OBLIGATIONS. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Owner Trustee or
the Indenture Trustee on the Notes or under this Indenture or any certificate or
other writing delivered in connection herewith or therewith, against (i) the
Indenture Trustee or the Owner Trustee in its individual capacity or (ii) any
partner, owner, beneficiary, custodian, officer, director, employee or agent of
the Indenture Trustee or the Owner Trustee in its individual capacity, any
holder or owner of a beneficial interest in the Issuer, the Owner Trustee or the
Indenture Trustee or of any successor or assign of the Indenture Trustee or the
Owner Trustee in its individual capacity, except as any such person may have
expressly agreed (it being understood that the Indenture Trustee and the Owner
Trustee have no such obligations in their individual capacity) and except that
any such partner, owner or beneficiary shall be fully liable, to the extent
provided by applicable law, for any unpaid consideration for stock, unpaid
capital contribution or failure to pay any installment or call owing to such
entity.
SECTION 11.15. NO PETITION. The Indenture Trustee, by entering into
this Indenture, and each Noteholder, by accepting a Note, hereby covenant and
agree that they will not at any time institute against the Seller or the Issuer,
or join in any institution against the Seller or the Issuer of, any bankruptcy,
reorganization, arrangement, insolvency, receivership or liquidation
proceedings, or other proceedings under any United States Federal or state
bankruptcy or similar law in connection with any obligations relating to the
Notes, this Indenture or any of the other Basic Documents.
SECTION 11.16. USURY. The amount of interest payable or paid on any
Note under the terms of this Indenture shall be limited to an amount which shall
not exceed the maximum non usurious rate of interest allowed by the applicable
laws of the United States or the Commonwealth (whichever shall permit the higher
rate), which could lawfully be contracted for charged or received (the "Highest
Lawful Rate"). If any payment of interest on any Note exceeds the Highest Lawful
Rate, the Issuer stipulates that such
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excess amount will be deemed to have been paid as a result of an error on the
part of both the Indenture Trustee, acting on behalf of the Noteholder of such
Note, and the Issuer, and the Noteholder receiving such excess payment shall
promptly, upon discovery of such error or upon notice thereof from the Issuer or
the Indenture Trustee, refund the amount of such excess and, at the option of
the Indenture Trustee, apply the excess to the payment of principal of such
Note, if any, remaining unpaid.
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IN WITNESS WHEREOF, the Issuer has caused this Indenture to be signed
in its name and on its behalf, and State Street Bank and Trust Company, to
evidence its acceptance of the trusts hereby created, has caused this Indenture
to be signed in its name and on its behalf by one of its officers thereunto duly
authorized, all as of the date first above written.
NELLIE MAE EDUCATION LOAN TRUST
by Fleet National Bank, not in its individual
capacity but solely as Owner Trustee
By: /s/ Chi C. Ma
-----------------------------------------------
Name: Chi Ma
Title: Assistant Vice President
STATE STREET BANK AND TRUST COMPANY,
as Indenture Trustee
By: /s/ Patrick E. Thebado
-----------------------------------------------
Name: Patrick E. Thebado
Title: Assistant Vice President
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EXHIBIT A
DEFINITIONS AND USAGE
Definitions
"Account" shall mean any of the accounts established by the Indenture.
"Acquisition Account" shall mean the Account so designated and
established in the Student Loan Acquisition Fund by Section 4.3 of the
Indenture.
"Additional Financed Loans" shall mean the Financed Loans to be
transferred to the Owner Trustee during a Funding Period pursuant to the related
Sales Agreement, each of which will be listed on Schedule A to the related
Transfer Agreement.
"Administration Account" shall mean the Account so designated and
established in the Services Fund by Section 4.7 of the Indenture.
"Administration Agreement" shall mean the Administration Agreement
dated as of June 1, 1996, among the Issuer, the Owner Trustee, the Indenture
Trustee and the Administrator, as amended from time to time.
"Administrator Default" shall have the meaning specified in the
Administration Agreement.
"Administration Fee" shall mean, as of any date of calculation, the sum
owed to the Administrator pursuant to the terms of the Administration Agreement.
"Administration Requirement" shall mean, as of any date of calculation
and with respect to a particular Series, the Administrative Expenses due as of
such date with respect to such Series.
"Administrative Expenses" shall mean the fees and expenses of the
Indenture Trustee, the Owner Trustee, the Authenticating Agent, the
Administrator and the Servicer, provided, however, that the fees and expenses
described shall not exceed any amount specified in the related Terms Supplement.
"Administrator" shall mean Nellie Mae, Inc., a Massachusetts non-profit
corporation, or any successors or assigns.
"Affiliate" shall mean, with respect to any specified person, any other
person controlling or controlled by or under common control with such specified
person. For the purposes of this definition, "control," when used with respect
to any specified person, shall mean the power to direct the management and
policies of such person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise, and the terms "controlling" and
"controlled" shall have meanings correlative to the foregoing.
"Authenticating Agent" shall mean the Indenture Trustee and any bank,
trust company or other financial institution designated by the Indenture Trustee
as authenticating agent for the Indenture Trustee hereunder, or any successor or
successors thereto appointed pursuant to Section 6.8 of the Indenture.
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"Authorized Denominations" shall mean, with respect to the initial
offering of the Securities, $20,000 or any integral multiple thereof, and in all
other respects shall mean $1,000 or any integral multiple thereof.
"Authorized Officer," when used with reference to the Issuer, shall
mean any officer of the Owner Trustee or the Administrator, as applicable, in
matters relating to the Issuer and who is identified on the list of Authorized
Officers delivered by the Owner Trustee to the Indenture Trustee on the Closing
Date relating to the initial issuance of a Series of Notes.
"Balances" when used with reference to any Account or Fund shall mean
the sum of the following assets in or deposited to the credit of such Account or
Fund: (i) Investment Securities computed at the Value of Investment Securities;
(ii) Financed Loans computed at the Outstanding balance of their principal
amounts plus accrued but unpaid interest; and (iii) lawful money of the United
States.
"Basic Documents" shall mean the Trust Agreement, the Indenture, each
Terms Supplement, each Trust Supplement, the Sales Agreement, the Purchase
Agreement, the Administration Agreement, the Servicing Agreement, the Custody
Agreement, the Guaranty Agreement and other documents and certificates to be
delivered in connection therewith and all amendments and supplements thereto.
"Benefit Plan" shall mean any (i) employee benefit plan (as defined in
Section 3(3) of ERISA) which is subject to the provisions of Title I of ERISA,
(ii) plans described in Section 4975 (e)(1) of the Code, including individual
retirement accounts described in Section 408(a) of the Code or Keogh plans or
(iii) or any entity (including an insurance company general account) whose
underlying assets include plan assets by reason of a plan's investment in such
entity.
"Book-Entry Certificate" shall mean a beneficial interest in the
Certificates, ownership and transfer of which shall be made through book entries
by a Securities Depository as described in Section 3.11 of the Trust Agreement.
"Business Day" shall mean any day other than a Saturday, Sunday or
other day on which banks in the City of Boston, Massachusetts, or New York, New
York are required or authorized by law or executive order to close.
"Capitalized Interest" shall mean all interest which has been accrued
but not paid on Financed Loans for which the borrower is entitled to elect, and
has elected, to defer payments of principal of and interest on such Loan.
"Certificate" shall mean a certificate evidencing the beneficial
interest of a Certificateholder in the Trust, substantially in the form of
Exhibit B to the Trust Agreement.
"Certificate Balance" shall equal, initially, the Initial Certificate
Balance and, thereafter, shall equal the Initial Certificate Balance increased
by the principal balance of each subsequent Class of Certificates issued
pursuant to a Trust Supplement and reduced by all amounts allocable to principal
previously distributed to Certificateholders. Notwithstanding the foregoing,
where any provision of the Trust Agreement or a Trust Supplement permits or
authorizes Certificateholders holding a specified percentage or amount of the
Certificate Balance to take any action or grant any approval, the holders of the
Certificates shall be deemed to have a Certificate Balance equal to 99%.
"Certificate Fund" shall mean the fund so designated and established by
Section 5.1 of the Trust Agreement.
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"Certificate Interest Account" shall mean the Account so designated and
established in the Certificate Fund by Section 5.1 of the Trust Agreement.
"Certificate Owner" shall mean, with respect to a Book-Entry
Certificate, the person who is the beneficial owner of such Book-Entry
Certificate, as reflected on the books of the Securities Depository, or on the
books of a person maintaining an account with such Securities Depository
(directly as a Securities Depository Participant or as an indirect participant,
in each case in accordance with the rules of such Securities Depository).
"Certificate Paying Agent" shall mean any paying agent or co-paying
agent appointed pursuant to Section 3.9 of the Trust Agreement, which shall
initially be the Owner Trustee.
"Certificate Payment Account" shall mean the Account so designated and
established in the Certificate Fund by Section 5.1 of the Trust Agreement.
"Certificate Interest Rate" shall mean, with respect to any Class of
Certificates, the per annum rate determined as set forth in the related Trust
Supplement.
"Certificate Register" and "Certificate Registrar" shall mean the
register and the registrar appointed pursuant to the Trust Agreement.
"Certificateholder" shall mean a person in whose name a Certificate is
registered in the Certificate Register.
"Certification," "Instruction," "Order," "Request" or "Requisition" of
the Issuer, as the case may be, shall mean, respectively, a certification,
direction, instruction, order, request or requisition which shall, unless
otherwise specifically provided herein, be in writing and signed in the name of
the Issuer by an Authorized Officer.
"Class" shall mean, (i) with respect to any Series of Notes, all Notes
of such Series whose final installment of principal has the same Maturity Date
and (ii) with respect to the Certificates, all Certificates whose final
installment of principal has the same Maturity Date.
"Closing Date" shall mean, with respect to Certificates, the date
identified as such in the related Trust Supplement and, with respect to Notes,
the date identified as such in the related Terms Supplement.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and Treasury Regulations promulgated thereunder.
"Collector" shall mean the Administrator or collection agency retained
by the Administrator to collect amounts outstanding on Financed Loans upon
acceleration after default.
"Commonwealth" shall mean The Commonwealth of Massachusetts.
"Cost of Issuance Account" shall mean the Account so designated and
established in the Services Fund by Section 4.7 of the Indenture.
"Costs of Issuance" for each Series of Notes or Certificates shall mean
all items of expense allocable to the authorization, issuance, sale and delivery
of such Series of Notes or Certificates, including without limitation costs of
planning and feasibility studies, costs of financial advisory, legal, accounting
and
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management services and services of other consultants and professionals and
related charges, fees and disbursements, costs of preparation and reproduction
of documents, costs of preparation and printing of any offering document
relating to the Notes or Certificates, advertising and printing costs, filing
and recording fees, any initial fees and charges of the Indenture Trustee,
Authenticating Agent or Owner Trustee, rating agency fees, costs of preparation,
execution, transportation and safekeeping of Notes or Certificates, and any
other costs, charges or fees incurred in connection with the issuance of the
Notes or Certificates.
"Cumulative Default Rate," with respect to any Series, shall have the
meaning set forth in the related Terms Supplement.
"Custodian," shall mean USA Loan Services, Inc., a Delaware
corporation, its corporate successor or assigns and any other organization with
which the Indenture Trustee and the Issuer have entered into or will enter into
in a custody agreement.
"Custody Agreement" shall mean the agreement to be entered into among
the Indenture Trustee, the Custodian and the Issuer regarding the custody of the
promissory notes signed by the obligors of the Financed Loans.
"Debt Service Reserve Fund" shall mean the fund so designated and
established by Section 4.2 of the Indenture.
"Defaulted Loan" shall mean a Financed Loan which is more than 180 days
delinquent in payment of principal or interest.
"Deferred Interest" with respect to each Series and Class of Notes
shall have the meaning set forth in the related Terms Supplement and with
respect to each Class of Certificates shall have the meaning set forth in the
related Trust Supplement.
"Definitive Certificates" shall have the meaning specified in Section
3.13 of the Trust Agreement.
"Depositor" shall mean the Seller in its capacity as depositor under
the Trust Agreement.
"Distribution Date" shall mean as to each Series and Class of Notes and
to each Class of Certificates, the fifteenth (15th) day of each month.
"Dollar" and "$" shall mean the lawful currency of the United States of
America.
"DTC Representation Letter" shall have the meaning set forth in Section
2.12 of the Indenture.
"Event of Default" shall have the meaning specified in Section 7.1 of
the Indenture.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Financed Loan" shall mean any Loan which, from time to time, is
assigned by the Issuer to the Indenture Trustee to serve as security for the
payment of all amounts due to Noteholders under the Notes and included in the
Student Loan Portfolio Fund. The initial Financed Loans subject to the lien of
the Indenture shall be listed on the Schedule of Financed Loans set forth in
Schedule A to the Sales Agreement. The Financed Loans to be pledged by the
Issuer to the Indenture Trustee in connection with the issuance of
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each additional Series of Notes shall be listed on the Schedule of Financed
Loans appearing on Schedule A to the related Supplemental Sales Agreement. A
master Schedule of Financed Loans listing all Financed Loans shall be maintained
by the Issuer. Each Schedule of Financed Loans shall be amended from time to
time by the Issuer to reflect accurately the Financed Loans then subject to the
lien of the Indenture.
"Fitch" shall mean Fitch Investors Service, Inc. (whose address is One
State Street Plaza, New York, New York 10004) and its corporate successors.
"Fund" shall mean any of the Funds established by the Indenture or the
Trust Agreement.
"Funding Period," with respect to each Series, shall have the meaning
set forth in the related Terms Supplement.
"Guarantor" shall mean TERI or Penn, as applicable or any other
guarantor as specified in the related Terms Supplement; provided that the Trust
shall notify the Rating Agencies prior to entering into any other guaranty
agreement.
"Guaranty Agreement" shall mean the TERI Guaranty Agreement or the Penn
Guaranty Agreement, as applicable, including, in either case, any supplement or
amendment thereto entered into in accordance with the provisions thereof, or any
other guaranty agreement as specified in the related Terms Supplement.
"Holder" or "Holders" shall mean a registered owner of the Notes or the
Certificates, as the context requires.
"Indenture" shall mean the Master Indenture and any Terms Supplement,
each as from time to time amended or supplemented with respect to which the
Notes issued thereunder are still Outstanding.
"Indenture Trust Estate" shall mean (i) all Revenues; (ii) the Balances
on deposit in all subaccounts, Accounts and Funds (whether derived from proceeds
of sale of the Notes, from Revenues or from any other source, excluding the
Certificate Fund); (iii) all rights, title, interest and privileges of the
Issuer as owner of the Financed Loans in and to (a) the Financed Loans,
including all promissory notes evidencing the indebtedness for Financed Loans
and all related documentation, and all rights of the Issuer to receive any and
all payments of any nature and from any source with respect to the Financed
Loans, (b) each Guaranty Agreement insofar as it relates to Financed Loans, (c)
the Administration Agreement, (d) the Servicing Agreement and (e) any Sales
Agreements with the Seller with respect to the Financed Loans; (iv) all products
and proceeds of any of the foregoing; and (v) all other property of every kind
and nature which is now or from time to time hereafter pledged, assigned or
transferred as and for security hereunder to the Indenture Trustee by the Issuer
or by anyone on its behalf.
"Indenture Trustee" shall mean State Street Bank and Trust Company, a
Massachusetts trust company, not in its individual capacity but solely as
Indenture Trustee under the Indenture.
"Independent" shall mean, when used with respect to any specified
person, that the person (a) is in fact independent of the Issuer, any other
obligor upon the Notes, the Seller and any Affiliate of any of the foregoing
persons, (b) does not have any direct financial interest or any material
indirect financial interest in the Issuer, any such other obligor, the Seller or
any Affiliate of any of the foregoing persons and (c) is not connected with the
Issuer, any such other obligor, the Seller or any Affiliate of any of the
foregoing persons as an officer, employee, promoter, underwriter, trustee,
partner, director or person performing similar functions.
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"Independent Certificate" shall mean a certificate or opinion to be
delivered to the Indenture Trustee under the circumstances described in, and
otherwise complying with, the applicable requirements of Section 11.10 of the
Indenture, made by an Independent appraiser or other expert appointed by an
Issuer Order and approved by the Indenture Trustee in the exercise of reasonable
care, and such opinion or certificate shall state that the signer has read the
definition of "Independent" and that the signer is Independent within the
meaning thereof.
"Initial Certificate Balance" shall mean, with respect to any Class of
Certificates, the amount identified as such in the related Trust Supplement.
"Initial Certificate Interest Rate" shall mean, with respect to each
Class of Certificates, the rate identified as such in the related Trust
Supplement.
"Initial Note Interest Rate" shall mean, with respect to each Class of
Notes, the rate identified as such in the related Terms Supplement.
"Initial Period" shall mean, as to any Class of Notes and Class of
Certificates, the period commencing on the Closing Date and continuing with
respect to each Class of Notes, through the day immediately preceding the
Initial Rate Adjustment Date for such Class of Notes, and with respect to each
Class of Certificates, through the day immediately preceding the Initial Rate
Adjustment Date for such Class of Certificates.
"Initial Pool Balance" shall mean, with respect to any Series, the sum
of the related Pool Balance as of the Closing Date, plus the principal balance
of each Additional Financed Loan purchased by the Issuer on each Transfer Date
during the related Funding Period.
"Initial Rate Adjustment Date" shall mean, as to any Class of Notes,
the date specified in the related Terms Supplement, and with respect to any
Class of Certificates, the date specified in the related Trust Supplement.
"Insolvency Event" means, with respect to a specified person, (a) the
filing or entry of a decree or order for relief by a court having jurisdiction
in the premises in respect of such person or any substantial part of its
property in an involuntary case under any applicable Federal or state
bankruptcy, insolvency or other similar law now or hereafter in effect, or
appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator or
similar official for such person or any substantial part of its property, or
ordering the winding-up or liquidation of such person's affairs, and such decree
or order shall remain unstayed and in effect for a period of 60 consecutive
days; or (b) the commencement by such person of a voluntary case under any
applicable Federal or state bankruptcy, insolvency or other similar law now or
hereafter in effect, or the consent by such person to the entry of an order for
relief in an involuntary case under such law, or the consent by such person to
the appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official for such person or any
substantial part of its property, or the making by such person any general
assignment for the benefit of creditors, or the failure by such person generally
to pay its debts as such debts become due, or the taking of action by such
person in furtherance of any of the foregoing.
"Interest Period" shall mean, as to each Series and Class of Notes and
each Class of Certificates, the Initial Period and thereafter each period
commencing on a Rate Adjustment Date and ending on the day before the next Rate
Adjustment Date.
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"Interest Rate" shall mean, with respect to each Class of Notes, the
rate of interest per annum borne by such Class of Notes as set forth in the
related Terms Supplement, and with respect to each Class of Certificates, the
rate of interest per annum borne by such Class of Certificates as set forth in
the related Trust Supplement.
"Investment Securities" shall mean any of the following:
(a) direct obligations of, or obligations on which the timely
payment of the principal of and interest on which are unconditionally
and fully guaranteed by, the United States of America;
(b) interest-bearing time or demand deposits, certificates of
deposit or other similar banking arrangements with any bank, trust
company, national banking association or other depository institution
(including the Indenture Trustee or any of its affiliates), provided
that, at the time of deposit or purchase, (i) if such deposit,
certificate or other arrangement shall be payable in more than one
year, the depository institution shall have senior long-term debt rated
by each Rating Agency in its highest rating category and (ii) if such
deposit, certificate or other arrangement shall be payable in one year
or less, the depository institution shall have short-term debt which is
rated P1 by Moody's (if Moody's is rating such short-term debt) and
F-1+ by Fitch (if Fitch is rating such short-term debt);
(c) bonds, debentures, notes or other evidences of
indebtedness issued or guaranteed by any of the following agencies:
Federal Farm Credit Banks; Federal Home Loan Mortgage Corporation; the
Export-Import Bank of the United States; the Federal National Mortgage
Association; the Tennessee Valley Authority; the Government National
Mortgage Association; the Federal Financing Bank; the Farmers Home
Administration;
(d) with the prior review of the Rating Agencies as to form,
repurchase agreements and reverse repurchase agreements with banks
(which may include the Indenture Trustee or any of its affiliates)
which are members of the Federal Deposit Insurance Corporation, the
outstanding, unsecured long-term debt securities of which are rated Aaa
by Moody's and AAA by Fitch (if Fitch is rating such securities);
(e) overnight repurchase agreements and reverse repurchase
agreements (i) with counterparties the outstanding, unsecured debt
securities of which are rated P1 by Moody's and F1+ by Fitch and (ii)
which are at least 102% collateralized by securities described in
subparagraph (a) of this definition which are held by a third-party
collateral agent in a segregated trust account;
(f) investment agreements or guaranteed investment contracts,
secured by collateral securities or unsecured as the Issuer may
determine, which may be entered into by and among the Issuer, the
Indenture Trustee and any bank, bank holding company, corporation or
any other financial institution whose outstanding, unsecured long term
debt securities are rated AAA by Fitch (if Fitch is rating such
securities) and Aaa by Moody's, or by an insurance company whose
claims-paying ability is so rated, provided further that any such
agreement must:
(i) clearly state the exact entity guarantor, the
value of invested funds guaranteed, the rate of guaranteed
interest, and the termination date;
(ii) contain an unconditional, irrevocable pledge by
the guarantor and be written in favor of the Indenture
Trustee;
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(iii) not be cancelable for failure to pay any fees
or premiums and its enforceability must be warranted;
(iv) provide that demands for funds be honored on
terms and conditions determined by the Issuer and the issuer
of such agreement and be credited to the Indenture Trustee in
immediately available funds;
(v) clearly establish the basis for compounding or
computation of interest, and provide that all guaranteed
interest accrue to the payment date;
(vi) provide that failure to meet collateral or other
provisions shall result in acceleration of the agreement at
the option of the Issuer or of the Indenture Trustee acting on
behalf of the Issuer and provide that merger or acquisition of
the issuer of the agreement, or assumption of the obligations
of the agreement, with or by another entity if combined with a
credit or claims paying ability rating downgrade below the
standards set forth in this subsection (f) shall result in
acceleration of the agreement at the option of the Issuer or
of the Indenture Trustee acting on behalf of the Issuer (after
confirmation by Moody's and Fitch that such acceleration will
not affect the ratings assigned to the Notes); and may provide
that other designated events relating to the issuer of the
agreement or its parent or any related entity, if combined
with a credit or claims paying ability rating downgrade below
the standards set forth in this subsection (f) shall result in
acceleration of the agreement at the option of the Issuer (or
Indenture Trustee acting on behalf of the Issuer); and
(vii) be accompanied by an Opinion of Counsel, on
which the Indenture Trustee may conclusively rely, stating
that such agreement satisfies the requirements of clauses (i)
through (vi) above;
(g) any debt instrument rated Aaa by Moody's and AAA by Fitch
(if Fitch is rating such debt instrument);
(h) commercial paper rated P1 by Moody's and F1+ by Fitch (if
Fitch is rating such commercial paper);
(i) shares of a money market or mutual fund, provided that the
fund is rated AAAm or AAAm-G by Moody's and Fitch, (if Fitch is rating
such securities); and
(j) any other investment agreement or guaranteed investment
contract approved in writing by each Rating Agency.
Notwithstanding the foregoing, investments described in subparagraphs
(g) and (h) shall not include any "margin security" as such term is defined in
Regulation T of the Board of Governors of the Federal Reserve System or any
"margin stock" as such term is defined in Regulation G, U or X of the Board of
Governors of the Federal Reserve System.
"Issuer" shall mean the Nellie Mae Education Loan Trust established
under the Trust Agreement until a successor replaces it and, thereafter, shall
mean the successor and, for purposes of any provision contained in the Indenture
and required by the TIA, each other obligor of the Notes.
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"Issuer Order" and "Issuer Request" shall mean a written order or
request signed in the name of the Issuer by any one of its Authorized Officers
and delivered to the Indenture Trustee.
"LIBOR Rate" shall mean, with respect to any Class of Notes or Class of
Certificates, the rate per annum equal to (a) the annual rate of interest
published or reported by the Telerate Service (by reference to the screen page
currently designated as "Page 3750" on that service or such other service as may
be nominated by the British Bankers' Association as the information vendor for
the purpose of displaying British Bankers' Association Interest Settlement Rates
for U.S. dollar deposits) as of 11:00 a.m., London time, on the Rate
Determination Date for a one month period, or (b) if such a rate does not appear
on Telerate Page 3750, the "LIBOR Rate" for the given day shall be the
arithmetic mean of the offered rates for dollar deposits for a one month period
commencing on the Rate Determination Date, which rate appears on Reuters LIBO
Page as of 11:00 a.m., London time, on the Rate Determination Date. If the rate
described above does not appear on Telerate Page 3750 and fewer than two rates
appear on Reuters LIBO Page, the "LIBOR Rate" for the applicable Rate
Determination Date shall be determined in good faith by the Indenture Trustee
and the Owner Trustee from such source as it shall determine to be comparable to
Telerate Page 3750 and Reuters LIBO Page.
"LIBOR Rate Certificates" shall mean a Class of Certificates for which
the related Interest Rate is based upon LIBOR.
"LIBOR Rate Notes" shall mean a Class of Notes for which the related
Interest Rate is based upon LIBOR.
"Lien" shall mean a security interest, lien, charge, pledge, equity or
encumbrance of any kind, other than tax liens and other liens, if any, which
attach to the respective Financed Loan by operation of law as a result of any
act or omission.
"Loan" or "Loans" shall mean any loan acquired by the Issuer from the
Seller.
"Master Indenture" shall mean the Master Trust Indenture dated as of
June 1, 1996 between the Issuer and the Indenture Trustee, as amended or
supplemented from time to time.
"Maturity Date" shall mean, as to each Series and Class of Notes, the
stated maturity date identified as such in the related Terms Supplement and, as
to each Class of Certificates, the stated maturity date identified as such in
the related Trust Supplement.
"Minimum Authorized Denomination" shall mean, with respect to the
initial offering of the Securities, $20,000, and in all other respects shall
mean $1,000.
"Moody's" shall mean Moody's Investors Service, Inc. (whose address is
99 Church Street, New York, New York 10007-2796, Attention: ABS Monitoring
Department, and its corporate successors.
"Net Loan Rate" shall mean, with respect to any Series, the rate
identified as such in the related Terms Supplement.
"Noteholder" shall mean any person who shall be the registered owner of
any Note or the duly authorized attorney-in-fact or representative of such
person.
"Note Rate" shall mean, with respect to each Class of Notes, the per
annum rate determined as set forth in the related Terms Supplement.
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"Note Register" and "Note Registrar" have the respective meanings
specified in Section 2.6 of the Indenture.
"Notes" shall mean the Asset-Backed Notes issued pursuant to the Master
Indenture and a related Terms Supplement.
"Note Fund" shall mean the Fund so designated and established by
Section 4.6 of the Indenture.
"Note Interest Account" shall mean the Account so designated and
established in the Note Fund by Section 4.6 of the Indenture.
"Note Payment Account" shall mean the Account so designated and
established in the Note Fund by Section 4.6 of the Indenture.
"Office of the Authenticating Agent" shall mean the Principal Corporate
Trust Operations Office of the Indenture Trustee or any designated
Authenticating Agent.
"Officer's Certificate" shall mean a document signed by an Authorized
Officer of the Issuer either attesting to or acknowledging the circumstances,
representations or other matters therein stated or set forth or directing that
an action be taken by the person to whom such document is addressed.
"Opinion of Counsel" shall mean an opinion in writing of a legal
counsel acceptable to the Issuer, the Indenture Trustee, the Owner Trustee, the
Seller, the Servicer or the Administrator, as applicable.
"Outstanding," (A) when used with respect to Notes, shall refer to any
Notes executed, authenticated, issued and delivered under this Indenture other
than Notes (i) for the transfer or exchange of or in lieu of which other Notes
shall have been authenticated and delivered by the Indenture Trustee pursuant to
the Indenture or (ii) which have been canceled, (B) when used with respect to
Certificates, shall refer to any Certificates executed, authenticated, issued
and delivered under the Trust Agreement other than Certificates (i) for the
transfer or exchange of or in lieu of which other Certificates shall have been
authenticated and delivered by the Owner Trustee pursuant to the Trust Agreement
or (ii) which have been canceled, and (C) when used with respect to Financed
Loans, shall mean the principal balance unpaid as of the applicable date.
"Outstanding Amount" shall mean the aggregate principal amount of all
Notes, or Series or Class of Notes, or all Certificates, or Class of
Certificates, as applicable, Outstanding as of the date of determination.
"Owner Trustee" shall mean Fleet National Bank, a national banking
association, not in its individual capacity but solely as Owner Trustee under
the Trust Agreement.
"Penn" shall mean The Trustees of the University of Pennsylvania.
"Penn Guaranty Agreement" shall mean the Penn Graduate Loan Program
Agreement dated as of September 1, 1992, as amended, between Nellie Mae, Inc.
and Penn, insofar as it pertains to Financed Loans.
"Pool Balance" shall mean, at any time, the aggregate principal balance
of the Financed Loans at the end of the preceding Interest Period (including
accrued interest thereon for such Interest Period to the extent such interest
will be capitalized), after giving effect to the following, without duplication:
(i) all
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payments in respect of principal received by the Trust during such Interest
Period from or on behalf of borrowers and Guarantors, (ii) the principal portion
of the purchase price of all Financed Loans purchased from the Trust for such
Interest Period from the Seller, the Administration or the Servicer, and (iii)
the principal portion of all Additional Financed Loans made from the Pre-Funding
Account with respect to such Interest Period.
"Pre-Funding Account" means the account designated as such, established
and maintained pursuant to Section 4.3 of the Indenture.
"Principal Corporate Trust Operations Office" shall mean the principal
corporate trust operations office of the Indenture Trustee in Boston,
Massachusetts, or such other office as may be designated by written notice of
the Indenture Trustee to the Issuer and each Noteholder at the address of such
Noteholder as it appears on the books of registry maintained in accordance with
Section 2.6 of the Indenture.
"Principal Factor" shall have the meaning set forth in Section 3.1(a)
of the Indenture.
"Purchase Agreement" shall mean the Master Terms Purchase Agreement
dated June 1, 1996 between Nellie Mae, Inc. and Nellie Mae Funding, LLC, as
amended from time to time.
"Rate Adjustment Date" shall mean, with respect to each Class of Notes
and each Class of Certificates, the date on which the applicable Interest Rate
for such Class of Notes or Certificates, as appropriate, is effective and shall
mean, with respect to each such Class of Notes and Certificates, the date of
commencement of each related Interest Period.
"Rate Determination Date" shall mean the second Business Day
immediately preceding the Rate Adjustment Date for such Interest Period.
"Rating Agency" shall mean (i) Moody's and (ii) Fitch, if the Notes are
then rated by Fitch, or, if either of them no longer exists and has no
successors, then any other rating agency, if any, of nationally recognized
status then rating the Notes.
"Record Date" shall mean the last day of the month.
"Responsible Officer" shall mean, with respect to the Indenture
Trustee, any officer within the Corporate Trust Office of the Indenture Trustee
with direct responsibility for the administration of the Indenture and the other
Basic Documents on behalf of the Indenture Trustee, including any Vice
President, Assistant Vice President, Assistant Treasurer, Assistant Secretary,
or any other officer of the Indenture Trustee customarily performing functions
similar to those performed by any of the above designated officers.
"Reuters LIBO Page" shall mean the display designated as page "LIBO" on
the Reuter Monitor Money Rates Service (or such other page as may replace the
Reuters LIBO Page on that service for the purpose of displaying London interbank
offered rates of major banks for Dollar deposits).
"Revenue Fund" shall mean the Fund established by Section 4.5 of the
Indenture.
"Revenues" shall mean all revenues, receipts and moneys payable into or
to the credit of the Revenue Fund pursuant to Section 4.5 of the Indenture and
any interest earnings on Investment Securities credited to any other Fund or
Account as provided in Section 4.9 of the Indenture.
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"Sales Agreement" shall mean the Master Terms Sales Agreement dated
June 1, 1996, among the Issuer, the Seller and the Owner Trustee, as amended
from time to time.
"Securities" shall mean the Notes and the Certificates together.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Securities Depository" shall mean an organization registered as a
"clearing agency" pursuant to Section 17A of the Exchange Act and shall
initially be The Depository Trust Company.
"Securities Depository Participant" shall mean a broker, dealer, bank,
other financial institution or other person for whom from time to time a
Securities Depository effects book-entry transfers and pledges of securities
deposited with the Securities Depository.
"Seller" shall mean the Nellie Mae Education Funding, LLC, a Delaware
limited liability company.
"Series" shall mean a separate Series of Notes issued pursuant to the
Master Indenture, which Series may, as provided in the related Terms Supplement,
be divided into two or more Classes.
"Servicer Default" shall mean an "Event of Default" as defined in the
Servicing Agreement.
"Servicer" shall mean USA Group Loan Services, Inc., a Delaware
corporation, its corporate successors and assigns, and any other organization
with which, after notice to the Rating Agencies, the Issuer has entered into or
shall in the future enter into a Servicing Agreement providing for the
administration, servicing and collection of, among others, the Financed Loans.
"Services Fund" shall mean the Fund established by Section 4.7 of the
Indenture.
"Servicing Agreement" shall mean the Servicing Agreement between the
Issuer and USA Group Loan Services, Inc. dated as of June 1, 1996, and any other
similar servicing agreement entered into between the Issuer and a Servicer
providing for the administration, servicing and collection of Financed Loans, in
each case as originally executed and as amended or supplemented from time to
time in accordance with the terms thereof and with the Indenture.
"Servicing Fees" shall mean, as of any date of calculation, the sum
owed to the Servicer pursuant to the terms of the Servicing Agreement.
"Student Loan Acquisition Fund" shall mean the Fund established by
Section 4.3 of the Indenture.
"Student Loan Portfolio Fund" shall mean the Fund established by
Section 4.4 of the Indenture.
"Subaccount" shall mean any of the subaccounts established by the
Indenture and the related Terms Supplement.
"Supplemental Indenture" shall mean any supplement to or amendment of
the Indenture entered into by the Issuer and the Indenture Trustee pursuant to
and in accordance with the provisions of Article 9 of the Indenture.
"Supplemental Purchase Agreement" shall mean any Supplemental Purchase
Agreement between Nellie Mae and the Seller entered into after July 12, 1996.
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"Supplemental Sales Agreement" shall mean any Supplemental Sales
Agreement among the Seller, the Trust and the Owner Trustee entered into after
July 12, 1996.
"TERI" shall mean The Education Resources Institute, Inc., a
Massachusetts corporation.
"TERI Guaranty Agreement" shall mean the Guaranty Agreement dated as of
June 1, 1996 between the Issuer and TERI.
"Terms Supplement" shall mean each Supplemental Indenture which
authorizes a particular Series of Notes.
"Transfer Agreement" shall mean a duly written assignment and bill of
sale delivered by the Seller to the Owner Trustee and the Indenture Trustee
evidencing the sale of Additional Financed Loans to the Issuer.
"Transfer Date" shall mean each date on which the Issuer purchases
Additional Financed Loans pursuant to a Supplemental Sales Agreement during a
related Funding Period.
"Treasury Regulations" shall mean regulations, including proposed or
temporary regulations, promulgated under the Code. References in any document or
instrument to specific provisions of proposed or temporary regulations shall
include analogous provisions of final Treasury Regulations or other successor
Treasury Regulations.
"Trust Agreement" shall mean the Trust Agreement dated as of June 1,
1996 between the Depositor and the Owner Trustee, as amended and supplemented
from time to time.
"Trust Estate" shall mean all property of the Issuer from time to time,
including all funds held by the Owner Trustee under the Trust Agreement and all
rights of the Owner Trustee and the Trust pursuant to the Servicing Agreement,
the Administration Agreement, the Sales Agreement and any Supplemental Sales
Agreement.
"Trust Indenture Act" or "TIA" shall mean the Trust Indenture Act of
1939 as in force on the date hereof, unless otherwise specifically provided.
"Trust Supplement" shall mean each supplement to the Trust Agreement
that authorizes an issuance of a Class of Certificates.
"Value of Investment Securities" shall mean, as to each Investment
Security, the market value thereof, if available, and, if not, par if purchased
at par, or the lower of cost or amortized value if purchased at other than par,
or, with respect to Investment Securities described in subparagraph (e) of the
definition thereof, the remaining scheduled principal amount of such obligation.
The amortized value of any such obligation purchased at a premium or discount
shall be computed in accordance with generally accepted accounting principles so
as to recognize daily amortization of such premium or discount, provided that
the value of any such obligation which is callable prior to maturity at the
option of the issuer of such obligation shall be no greater than the price at
which such obligation could be called. Valuation made on any particular date
shall include the amount of interest earned or accrued to such date on any such
moneys or investments.
A-13
<PAGE> 67
Usage
Unless the context clearly indicates otherwise, or may otherwise
require, (i) the term "person" includes a firm, partnership, joint venture,
joint stock company, trust (including any beneficiary thereof), association,
corporation (public or private), unincorporated organization, public body,
public agency and a natural person, and shall also include an executor,
administrator, trustee, receiver or other representative; (ii) the terms
"herein," "hereunder," "hereby," "hereto," "hereof" and any similar terms, refer
to the document as a whole and not to any particular section or subdivision
thereof; and (iii) references to specific provisions of any public law or
statute are to such provisions as they may be amended from time to time. The
definitions set forth in this Exhibit A shall include both the singular and the
plural, and the use of any pronoun shall include both the singular and the
plural and shall include all genders.
A-14
<PAGE> 68
EXHIBIT B
[FORM OF NOTE]
NELLIE MAE EDUCATION LOAN TRUST
ASSET-BACKED NOTES
SERIES 199
-
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER (AS DEFINED BELOW)
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS NOTE IS NOT GUARANTEED OR INSURED BY ANY GOVERNMENTAL AGENCY.
No. [ ] $
- -------
MATURITY DATED
CLASS DATE DATE CUSIP
----- -------- ----- -----
REGISTERED NOTEHOLDER: CEDE & CO.
-------------------------------
PRINCIPAL AMOUNT: $
-------------------------------
NELLIE MAE EDUCATION LOAN TRUST, a Massachusetts business trust (the
"Issuer"), hereby acknowledges itself indebted and, for value received, hereby
promises to pay (but only out of the Indenture Trust Estate) to CEDE & CO. or
registered assigns, upon presentation and surrender hereof on [Maturity Date]
(subject to prior prepayment as described herein), the principal sum of ________
DOLLARS ($______) in lawful money of the United States of America, and to pay
interest thereon at the rates, on the dates and subject to the limitations as
provided herein (but only out of said Indenture Trust Estate) in like lawful
money. Unless otherwise defined in this Series 199_ Note, capitalized terms
used in this Series 199_ Note shall have the respective meaning given to such
terms in the Master Trust Indenture dated as of June 1, 1996 (the "Master
Indenture"), as supplemented by the First Terms Supplement dated as of June 1,
1996 (the "Terms Supplement" and together, the "Indenture") between the Issuer
and State Street Bank and Trust Company, as Indenture Trustee.
This Series 199_ Note is one of a duly authorized issue of notes of the
Issuer designated as "Nellie Mae Education Loan Trust Asset-Backed Notes, Series
199_", in the aggregate principal amount of $__________ issued under the
authority of the Trust Agreement dated as of June 1, 1996 between the Depositor
and the Owner Trustee and pursuant to the Indenture. The Series 199_ Notes are
issued to finance the acquisition of Financed Loans, and to make certain
deposits to the Trust Funds and Accounts.
B-1
<PAGE> 69
The Master Indenture provides for the issuance, from time to time,
under the conditions, limitations and restrictions set forth therein, of
additional Notes on a parity with all Series of obligations issued or to be
issued under the Indenture, for the purpose of providing additional funds for
the acquisition of Financed Loans (said additional Notes, together with Series
199_ Notes, being collectively referred to herein as the "Notes").
The Series 199_ Notes are being issued by means of a book-entry system
with one Series 199_ Note certificate for each class and maturity of Series 199_
Notes immobilized at The Depository Trust Company, New York, New York ("DTC"),
not available for distribution to the public, and evidencing ownership of the
Series 199_ Notes in principal amounts of $1,000 of integral multiples thereof,
with transfers of ownership effected on the records of DTC and its participants
pursuant to rules and procedures established by DTC and its participants.
Interest on the Series 199_ Note and principal of the Series 199_ Note, at
maturity or upon earlier prepayment, will be paid in New York Clearing House or
equivalent same- day funds to Cede & Co., as nominee of DTC, as registered owner
of the Note. Transfer of principal and interest payments to participants of DTC
is the responsibility of DTC; transfer of principal and interest payments to
beneficial owners by participants of DTC will be the responsibility of such
participants and other nominees of beneficial owners. The Series 199_ Notes
shall be registered in the form of one registered Series 199_ Note for the
aggregate principal amount of each maturity in the name of Cede & Co., as
nominee of DTC, provided that if DTC shall request that the Series 199_ Notes be
registered in the name of a different nominee, the Indenture Trustee shall
exchange all or any portion of the Series 199_ Notes for an equal aggregate
principal amount of Series 199_ Notes registered in the name of such nominee or
nominees of DTC. During any such period, no person other than DTC or its nominee
shall be entitled to receive from the Issuer or the Indenture Trustee either a
Series 199_ Note or any other evidence of ownership of the Series 199_ Notes, or
any right to receive any payment in respect thereof unless DTC or its nominee
shall transfer record ownership of all or any portion of the Series 199_ Notes
on the registration books maintained by the Indenture Trustee in connection with
discontinuing the book-entry system.
So long as the Series 199_ Notes or any portion thereof are registered
in the name of DTC or any nominee thereof, the Issuer and the Indenture Trustee
may treat DTC (or its nominee) as the sole and exclusive owner of the Series
199_ Notes registered in its name for the purposes of payment of the principal
of or interest on the Series 199_ Notes, selecting the Series 199_ Notes or
portions thereof to be prepaid, giving any notice permitted or required to be
given to Holders under this Indenture, registering the transfer of Series 199_
Notes, obtaining any consent or other action to be taken by Holders and for all
other purposes whatsoever, and neither the Issuer nor the Indenture Trustee
shall be affected by any notice to the contrary. Neither the Issuer nor the
Indenture Trustee shall have any responsibility or obligation to any participant
in DTC, any person claiming a beneficial ownership in the Series 199_ Notes
under or through DTC or any such participant, or any other person not shown on
the registration books of the Indenture Trustee as being a Holder, with respect
to the Series 199_ Notes, the accuracy of any records maintained by DTC or any
such participant, the payment by DTC or any such participant of any amount in
respect of the principal of or interest on the Series 199_ Notes, any notice
which is permitted or required to be given to Holders under this Indenture, the
selection by DTC or any such participant of any person to receive payment in the
event of a partial redemption of the Series 199_ Notes or any consent given or
other action taken by DTC as Holder.
The book-entry system for registration of the ownership of the Series
199_ Notes may be discontinued at any time if DTC determines to resign as
securities depository for the Series 199_ Notes or the Indenture Trustee
determines that continuation of the system of book-entry transfers through DTC
(or through a successor securities depository) is not in the best interests of
the Holders. In either of such events (unless in the case of a determination by
the Indenture Trustee, the Indenture Trustee, at the direction of the Issuer,
appoints a successor securities depository), the Series 199_ Notes shall be
delivered in registered
B-2
<PAGE> 70
certificate form to such persons, and in such principal amounts (and in
Authorized Denominations), as may be designated by DTC, but without any
liability on the part of the Issuer or the Indenture Trustee for the accuracy of
such designation. Whenever DTC requests the Issuer and the Indenture Trustee to
do so, the Issuer and the Indenture Trustee shall cooperate with DTC in taking
appropriate action after reasonable notice to arrange for another securities
depository to maintain custody of certificates evidencing the Series 199_ Notes.
In the event of the discontinuance of the book-entry system as provided
herein, a replacement certificate for this Series 199_ Note may be issued in
accordance with the Indenture and such procedures as the Issuer and the
Indenture Trustee shall deem appropriate.
Reference is hereby made to the Indenture, a copy of which is on file
with the Indenture Trustee, and to all of the provisions thereof, to all of
which provisions the registered owner of this Series 199_ Note, by acceptance
hereof, hereby assents and agrees, for definitions of terms, the descriptions of
and the nature and extent of the security for the Series 199_ Notes, the
education loan purchase program being financed by the issuance of the Series
199_ Notes, the revenues and other assets pledged to the payment of the
principal of and interest on the Series 199_ Notes, the nature and extent and
manner of enforcement of the pledge, the conditions upon which the Indenture may
be amended or supplemented with or without the consent of the registered owners
of the Series 199_ Notes, the rights and remedies of the registered owners of
the Series 199_ Notes, including the limitations therein contained upon the
right of a registered owner to institute any suit, action or proceeding in
equity or at law with respect hereto and thereto, the rights, duties and
obligations of the Issuer and the Indenture Trustee thereunder, the terms and
provisions upon which the liens, pledges, charges, trusts, security interests,
assignments and covenants made therein may be discharged at or prior to the
maturity of this Series 199_ Note, this Series 199_ Note thereafter no longer
being secured by the Indenture or being deemed to be outstanding thereunder, and
for the other terms and provisions thereof.
The unpaid principal amount hereof from time to time outstanding shall
bear interest at a variable interest rate determined by the Indenture Trustee
and announced to the Issuer, as described in the Indenture. If the Indenture
Trustee shall fail or refuse to determine the Interest Rate for any Class of
Notes on any Rate Determination Date pursuant to the preceding sentence, the
Interest Rate most recently determined for any Class of Notes shall remain in
effect.
In no event shall the Interest Rate on this Series 199_ Note exceed 18%
per annum.
The Series 199_ Notes shall be subject to optional purchase prepayment
and mandatory principal distributions prior to the Maturity Date, upon the terms
and conditions, at such times and according to such terms as are set forth in
the Indenture.
If an Event of Default as defined in the Indenture shall occur, the
principal of and interest on all Notes issued under the Indenture may be
declared due and payable upon the conditions and in the manner and with the
effect provided in the Indenture. The Indenture and the rights and obligations
of the Issuer, the Indenture Trustee and the registered owner hereof may be
modified or amended in the manner and subject to the conditions set forth in the
Indenture.
B-3
<PAGE> 71
In any case where the date fixed for the payment of principal of or
interest on this Series 199_ Note shall not be a Business Day, then payment of
such principal or interest need not be made on such date but may be made on the
next succeeding Business Day with the same force and effect as if made on the
date fixed for the payment thereof.
The Noteholder of this Series 199_ Note shall have no right to enforce
the provisions of the Indenture or to institute action to enforce the covenants
therein, or to take any action with respect to any Event of Default under the
Indenture, or to institute, appear in or defend any suit or other proceeding
with respect thereto, except as provided in the Indenture.
The transfer of this Series 199_ Note may be registered only upon
surrender hereof to the Indenture Trustee together with an assignment duly
executed by the registered owner or its attorney or legal representatives in
such form as shall be satisfactory to the Indenture Trustee. Upon any such
registration of transfer of this Series 199_ Note and subject to the payment of
any fees and charges as provided by the Indenture, the Issuer shall execute and
the Indenture Trustee shall authenticate the deliver in exchange for this Series
199_ Note a new Series 199_ Note or Notes registered in the name of the
transferee, in any denomination or denominations authorized by the Indenture, of
the same maturity and in an aggregate principal amount equal to the unpaid
principal amount of this Series 199_ Note and bearing the same interest as this
Series 199_ Note.
This Series 199_ Note does not represent an obligation of, or an
interest in, the Depositor, the Administrator, the Owner Trustee, the Indenture
Trustee, USA Group Loan Services, Inc., as Servicer (the "Servicer") or any
affiliates of any of them, and no recourse may be had against such parties or
their assets, except as may be expressly set forth herein or in the Basic
Documents. In addition, this 199_ Series Note is not guaranteed by any
governmental agency or instrumentality and is limited in right of payment to
certain collections respecting the Financed Loans, all as more specifically set
forth in the Indenture.
It is hereby certified, recited and declared that all acts, conditions
and things required to have happened, to exist and to have been performed
precedent to and in the issuance of this Series 199_A Note and the issue of
which it is one, have happened, exist and have been performed in regular and due
time, form and manner as required by law.
This Series 199_ Note shall not be entitled to any benefit under the
Indenture, or become valid or obligatory for any purpose, until the certificate
of authentication and registration hereon endorsed shall have been signed by the
Authenticating Agent.
This Series 199_A Note shall be governed by, and construed and
interpreted in accordance with, the laws of the Commonwealth.
Fleet National Bank acts solely as Owner Trustee and not in its
individual capacity and no trustee, shareholder, officer, employee or agent of
Fleet National Bank shall be held personally liable in connection with the
affairs of the Trust.
B-4
<PAGE> 72
IN WITNESS WHEREOF, NELLIE MAE EDUCATION LOAN TRUST has caused this
Series 199_ Note to be executed in its name and on its behalf by the manual or
facsimile signature of an Authorized Officer and its seal, or facsimile thereof,
to be affixed, imprinted, engraved or otherwise reproduced hereon as of the date
shown above.
NELLIE MAE EDUCATION LOAN TRUST
By: Fleet National Bank, not in its individual capacity but
solely as Owner Trustee
Attest:
By: By:
--------------------------- --------------------------
Name: Name:
Title: Title:
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This Note is one of the Series 1996-_ Notes designated in and issued under the
provisions of the within mentioned Indenture.
State Street Bank and Trust Company,
as Indenture Trustee
By:
-----------------------------------------------
Responsible Officer
Date of Authentication:
---------------
B-5
<PAGE> 73
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OR ASSIGNEE
- --------------------------------------------------------------------------------
(Please print or type name and address, including postal zip code, of assignee)
- --------------------------------------------------------------------------------
the within Series 1996- Note, and all rights thereunder, hereby irrevocably
constituting and appointing
- --------------------------------------------------------------------------------
Attorney to transfer said Series 1996- Note
- -----------------------------------
on the books of the Note Registrar, with full power of substitution in the
premises.
Dated:
*
------------------------------
Signature Guaranteed:
*
------------------------------
* NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Series 1996- Note in every particular,
without alteration, enlargement or any change whatever.
[END OF FORM OF SERIES 1996- NOTE]
B-6
<PAGE> 74
EXHIBIT C
CERTIFICATE AS TO FINANCED LOANS
State Street Bank and Trust Company, as Indenture Trustee under the
Trust Indenture identified below
Corporate Trust Division
Re: Nellie Mae Education Loan Trust Asset-Backed Notes, Series
1996-A
This Certificate as to the Financed Loans is submitted pursuant to the
provisions of Section 4.3 of the Master Trust Indenture dated as of June 1, 1996
(the "Indenture") between Nellie Mae Education Loan Trust (the "Trust") and
State Street Bank and Trust Company, as Indenture Trustee and Section 4.2 of the
First Terms Supplement between the Trust and the Indenture Trustee dated as of
June 1, 1996. All capitalized terms used in this certificate and not otherwise
defined are used herein as defined in the Indenture.
In your capacity as Indenture Trustee, you are hereby authorized and
requested to disburse to the Trust the sum of $66,397,718 in connection with the
financing or refinancing of Financed Loans. With respect to such financing or
refinancing, the Trust hereby certifies as follows:
1. Each Financed Loan is a Loan authorized by the Indenture to be
so financed or refinanced.
2. You have been provided with evidence that Uniform Commercial
Code financing statements with respect to the Financed Loans have been
or will be promptly filed in such place or places required to perfect
the security interest of the Indenture Trustee in the Financed Loans.
3. The Custodian, as agent for the Indenture Trustee pursuant to
the Custody Agreement, has possession of the promissory notes
evidencing the Financed Loans.
4. The Guaranty Agreements are in effect with respect to certain
Financed Loans, and the Trust is not in default in the performance of
any of its covenants and agreements made in the Guaranty Agreements,
and, to the best of its knowledge, neither Guarantor is in default
under any of its covenants and agreements made in the applicable
Guaranty Agreement.
5. The undersigned, as an Authorized Officer of the Trust, is
authorized to sign and submit this Certificate on behalf of the Trust.
WITNESS my hand this 12th day of July, 1996.
NELLIE MAE EDUCATION LOAN TRUST
By: Fleet National Bank,
not in its individual capacity but solely as Owner
Trustee
By:
-----------------------------------------------
Name: Chi Ma
Title: Assistant Vice President
C-1
<PAGE> 75
EXHIBIT D
INFORMATION FOR MONTHLY STATEMENTS
REQUIRED PURSUANT TO SECTION 5.7
(regarding the Financed Loans)
<TABLE>
<CAPTION>
Dollar % of Average
Number Amount Total Balance
------ ------ -------------
<S> <C> <C>
Total Loans Outstanding $ %$
Total Loans in Principal Repayment
Total Loans in Principal Deferment
</TABLE>
<TABLE>
<CAPTION>
Dollar % of Average
Delinquency Information Number Amount Total Balance
------ ------ -------------
<S> <C> <C>
30- 59 days delinquent $ %$
60- 89 days delinquent
90-119 days delinquent
Total Default Claims Unprocessed
</TABLE>
Loan Type Information
SHARE
EXCEL
Grad SHARE
Grad EXCEL
IBM PS/2 Loan for Learning
Penn Loans
NYU Loans
Cumulative Default Rate = %
------
Parity Trigger = %
------
Weighted Average Interest Rate on Loan Portfolio = %
-------
D-1
<PAGE> 1
EXHIBIT 4.2
FIRST TERMS SUPPLEMENT
to the
MASTER TRUST INDENTURE
dated as of June 1, 1996
between
NELLIE MAE EDUCATION LOAN TRUST,
as Issuer
and
STATE STREET BANK AND TRUST COMPANY,
as Indenture Trustee
Dated as of June 1, 1996
Issuing
$115,800,000
ASSET-BACKED NOTES
SERIES 1996-A
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE 1 DEFINITIONS.......................................................................... 2
SECTION 1.1. Definitions and Usage........................................................... 2
ARTICLE 2 AUTHORIZATION, TERMS AND ISSUANCE.................................................... 3
SECTION 2.1. Authorization of Series 1996-A Notes............................................ 3
SECTION 2.2. Purposes........................................................................ 3
SECTION 2.3. Terms of Series 1996-A Notes Generally.......................................... 4
SECTION 2.4. Determination of Interest Rate on the Series 1996-A Notes....................... 4
ARTICLE 3 PAYMENT OF THE SERIES 1996-A NOTES PRIOR TO MATURITY................................. 5
SECTION 3.1. Payment of the Series 1996-A Notes Prior to Maturity............................ 5
ARTICLE 4 DISPOSITION OF PROCEEDS.............................................................. 6
SECTION 4.1. Establishment of Subaccounts.................................................... 6
SECTION 4.2. Disposition of Proceeds......................................................... 6
ARTICLE 5 MISCELLANEOUS........................................................................ 7
SECTION 5.1. First Terms Supplement.......................................................... 7
SECTION 5.2. Counterparts.................................................................... 7
SECTION 5.3. Security Agreement.............................................................. 7
SECTION 5.4. Governing Law................................................................... 7
SECTION 5.5. Ratification of Master Indenture................................................ 7
EXHIBIT A FORM OF SERIES 1996-A NOTE...........................................................A-1
EXHIBIT B CERTIFICATE AS TO FINANCED LOANS.....................................................B-1
</TABLE>
<PAGE> 3
FIRST TERMS SUPPLEMENT
THIS FIRST TERMS SUPPLEMENT, dated as of June 1, 1996, between NELLIE
MAE EDUCATION LOAN TRUST, a Massachusetts business trust, (the "Issuer" or the
"Trust") acting through FLEET NATIONAL BANK, a national banking association, not
in its individual capacity but solely as owner trustee (the "Owner Trustee"),
and STATE STREET BANK AND TRUST COMPANY, a Massachusetts trust company as
indenture trustee (the "Indenture Trustee"), under a Master Trust Indenture
dated as of June 1, 1996 (the "Master Indenture").
PRELIMINARY STATEMENT
Section 2.4 of the Master Indenture provides, among other things, that
the Issuer, as provided in the Trust Agreement, and the Indenture Trustee may
enter into an indenture supplemental to the Master Indenture for the purpose of
authorizing a Series of Notes and to specify certain terms of such Series of
Notes. The Issuer has duly authorized the creation of a Series of Notes in an
aggregate principal amount not to exceed $115,800,000 to be known as the
Issuer's Asset-Backed Notes, Series 1996-A (the "Series 1996-A Notes"), and the
Issuer and the Indenture Trustee are executing and delivering this First Terms
Supplement in order to provide for the Series 1996-A Notes. Except as otherwise
specified herein, or as the context may require, capitalized terms used but not
defined herein are defined in the Master Indenture.
GRANTING CLAUSES
The Issuer hereby grants to the Indenture Trustee, for the exclusive
benefit of the Holders of the Series 1996-A Notes, and any Series of Notes that
may be issued hereafter, all of the Issuer's right, title and interest in and to
(a) the 1996 Financed Loans listed in Schedule A to the Sales Agreement (as such
Schedule may be amended from time to time including, but not limited to, by the
purchase by the Trust during the Funding Period of any Additional Financed
Loans) and all obligations of the obligors thereunder, and all written
communications and payments received by the Seller with respect thereto
(including borrower correspondence, notices of death, disability or bankruptcy
and requests for deferrals or forbearance), on and after April 30, 1996 (the
"Initial Cut-Off Date") (or, with respect to the Additional Financed Loans, on
and after the applicable date (each a "Subsequent Cut-off Date")), (b) all funds
on deposit from time to time in the Trust Funds and Accounts (other than the
Certificate Fund) and in all investments and proceeds thereof (including all
income thereon) and (c) all proceeds of the foregoing, including without
limitation, proceeds of the conversion, voluntary or involuntary, of any of the
foregoing into cash or other liquid property. Such grants are made, however, in
trust, to secure the Series 1996-A Notes and any Series of Notes issued
hereafter, equally and ratably without prejudice, priority or distinction,
between any Note and any other Note by reason of difference in time of issuance
or otherwise except to the extent otherwise described herein or in the Master
Indenture, and to secure (i) the payment of all amounts due on the Series 1996-A
Notes and any Series of Notes issued hereafter, as such amounts become due in
accordance with their terms, (ii) the payment of all other sums payable under
the Master Indenture or this First Terms Supplement with respect to the Series
1996-A Notes and any Series of Notes issued hereafter, and (iii) compliance with
the provisions of the Master Indenture and this First Terms Supplement with
respect to the Series 1996-A Notes and any Series of Notes issued hereafter, all
as provided in the Master Indenture and this First Terms Supplement.
The Indenture Trustee acknowledges such grants, accepts the trusts
hereunder in accordance with the provisions hereof and of the Master Indenture
and agrees to perform the duties herein or therein required
1
<PAGE> 4
to the best of its ability to the end that the interests of the Holders of the
Series 1996-A Notes and any Series of Notes issued by the Issuer hereafter may
be adequately and effectively protected.
ARTICLE 1
DEFINITIONS
SECTION 1.1. DEFINITIONS AND USAGE. Unless the context shall clearly
indicate some other meaning or may otherwise require, capitalized terms not
defined herein are defined in Exhibit A to the Master Indenture which also
contains rules as to construction that are applicable herein.
"A-1 Notes" shall mean the Series 1996-A Notes that mature on December
15, 2004.
"A-2 Notes" shall mean the Series 1996-A Notes that mature on December
15, 2018.
"A-1 Notes Spread" shall mean 0.17 percent (0.17%), or such other
amount as may be determined from time to time in accordance with Section 2.4
hereof.
"A-2 Notes Spread" shall mean 0.26 percent (0.26%), or such other
amounts as may be determined from time to time in accordance with Section 2.4
hereof.
"Closing Date" shall mean with respect to the Series 1996-A Notes, July
12, 1996, the date of initial issuance and delivery of the Series 1996-A Notes
hereunder.
"Debt Service Reserve Requirement" shall mean an amount equal to the
greater of (i) two percent (2%) of the aggregate principal amount Outstanding of
the Series 1996-A Notes and the Class 1996-A Certificates or (ii) $500,000.
"Deferred Interest" shall have the meaning set forth in Section 2.4
hereof.
"1996 Financed Loans" shall mean the Financed Loans purchased with the
proceeds of the Series 1996-A Notes and the Class 1996-A Certificates.
"Funding Period" shall mean the period beginning on the Closing Date
and ending on the first to occur of (a) the Distribution Date on which the
amount on deposit in the 1996-A Subaccount in the Pre- Funding Account (after
giving effect to any transfers therefrom on or prior to such Distribution Date)
is less than $100,000, (b) the date on which an Event of Default occurs under
the Indenture, (c) the date on which an Event of Termination occurs under the
Sales Agreement, (d) the date on which an Insolvency Event occurs with respect
to the Seller or (e) the close of business on January 10, 1997.
"Initial Cut-off Date" shall mean, with respect to the Series 1996-A
Notes, April 30, 1996.
"Initial Period" shall mean, as to a Class of the Series 1996-A Notes,
the period commencing on the Closing Date and continuing through August 15, 1996
with respect to the A-1 Notes, and August 15, 1996 with respect to the A-2
Notes.
"Initial Rate" shall mean a rate equal to 5.6739% for the A-1 Notes,
and a rate equal to 5.7639% for the A-2 Notes.
2
<PAGE> 5
"Initial Rate Adjustment Date" shall mean (i) with respect to the A-1
Notes, August 15, 1996 and (ii) with respect to the A-2 Notes, August 15, 1996.
"Interest Period" shall mean, with respect to a Class of Series 1996-A
Notes, the applicable Initial Period and thereafter each period commencing on a
Rate Adjustment Date for such Class of Series 1996-A Notes and ending on the day
before (i) the next Rate Adjustment Date for such Class or (ii) the Maturity
Date of such Class, as applicable.
"Maturity Date" shall mean December 15, 2004 with respect to the A-1
Notes; and December 15, 2018 with respect to the A-2 Notes.
"Net Loan Rate" shall mean the weighted average interest rate on the
1996 Financed Loans less one and eight-tenths percent (1.8%).
"Note Interest Rate" shall mean each variable rate of interest per
annum borne by a Class of the Series 1996-A Notes for each Interest Period as
determined in accordance with the provisions of Section 2.4 hereof.
"Primary Parity Trigger" shall mean, as of any date of determination,
an amount (expressed as a percentage) equal to the sum of (i) the Balances then
on deposit in all Funds and Accounts hereunder (excluding Balances attributable
to principal of or accrued interest on Defaulted Loans) and (ii) amounts on
deposit in the lockbox account held by the Servicer and allocable to the 1996
Financed Loans, divided by an amount equal to the principal amount of all Notes
then Outstanding plus all accrued and unpaid interest thereon plus any unpaid
portion of the Administration Requirement. The Primary Parity Trigger shall be
calculated by the Administrator as of the date of the information contained in
the then most recent report of the Servicer provided by the Issuer to the
Indenture Trustee.
"Rate Adjustment Date" shall mean the date on which a Note Interest
Rate is effective and the date of commencement of each related Interest Period.
"Rate Determination Date" shall mean the second Business Day
immediately preceding the Rate Adjustment Date for such Interest Period.
"Secondary Parity Trigger" shall mean, as of any date of determination,
an amount (expressed as a percentage) equal to the sum of (i) the Balances then
on deposit in all Funds and Accounts hereunder (excluding Balances attributable
to principal of or accrued interest on Defaulted Loans) and (ii) amounts on
deposit in the lockbox account held by the Servicer and allocable to the 1996
Financed Loans, divided by an amount equal to the principal amount of all Notes
and Certificates then Outstanding plus all accrued and unpaid interest thereon
plus any unpaid portion of the Administration Requirement. The Secondary Parity
Trigger shall be calculated by the Administrator as of the date of the
information contained in the then most recent report of the Servicer provided by
the Issuer to the Indenture Trustee.
"Terms Supplement" means this First Terms Supplement, as from time to
time amended or supplemented.
3
<PAGE> 6
ARTICLE 2
AUTHORIZATION, TERMS AND ISSUANCE
SECTION 2.1. AUTHORIZATION OF SERIES 1996-A NOTES. There is hereby
authorized the borrowing of funds, and to evidence such borrowing there are
hereby authorized two Classes of Series 1996-A Notes (collectively, the "Series
1996-A Notes"), designated (i) the "Nellie Mae Education Loan Trust Asset-Backed
Notes Series 1996-A, Class A-1" (the "A-1 Notes") in the aggregate principal
amount of $67,000,000, and (ii) the "Nellie Mae Education Loan Trust
Asset-Backed Notes, Series 1996-A, Class A-2" (the "A-2 Notes") in the aggregate
principal amount of $48,800,000, which Classes shall mature on the dates set
forth in Section 2.3 below.
SECTION 2.2. PURPOSES. The Series 1996-A Notes are authorized to
finance the acquisition by the Issuer of 1996 Financed Loans, and to make
deposits to the Trust Funds and Accounts required hereby.
SECTION 2.3. TERMS OF SERIES 1996-A NOTES GENERALLY. The Series 1996-A
Notes shall be issued in fully registered form, in substantially the form set
forth in Exhibit A hereto with such variations, omissions and insertions as may
be required by the circumstances, as may be required or permitted by the Master
Indenture and this First Terms Supplement, or to be consistent with the Master
Indenture and this First Terms Supplement and necessary or appropriate to
conform to the rules and requirements of any governmental authority or any usage
or requirement of law with respect thereto.
The Series 1996-A Notes may be issued only in Authorized Denominations.
The Series 1996-A Notes shall be dated as of the Closing Date. Each Class of
Notes shall mature on the following Maturity Dates:
<TABLE>
<CAPTION>
Stated
Class Amount Maturity
<S> <C> <C>
A-1 $67,000,000 December 15, 2004
A-2 $48,800,000 December 15, 2018
</TABLE>
The A-1 Notes shall be numbered in consecutive numerical order from A-1-1
upwards. The A-2 Notes shall be numbered in consecutive numerical order from
A-2-1 upwards. Each Class of Series 1996-A Notes shall be subject to prepayment
and mandatory distributions of principal prior to maturity as provided in
Article 3 hereof.
Principal of each Series 1996-A Note shall be payable on its Maturity
Date, unless earlier paid as provided herein. Each Series 1996-A Note shall bear
interest at a rate determined in accordance with the provisions and subject to
the limitations set forth in Section 2.4 hereof. Interest shall accrue on the
principal amount from time to time Outstanding until the principal of such
Series 1996-A Note has been paid in full or payment has been duly provided for,
as the case may be, and shall accrue from the later of the Closing Date or the
most recent Distribution Date to which interest has been paid or duly provided
for in full and shall be computed on the basis set forth in Section 2.4 hereof.
Interest on the Series 1996-A Notes shall be paid on each Distribution Date
(except to the extent that moneys are not available to pay Deferred Interest)
and on each date of payment or prepayment of principal thereof to the extent of
interest accrued on the principal then being paid or prepaid.
Payments of principal of and interest on each Series 1996-A Note shall
be made by the Indenture Trustee from its Principal Corporate Trust Operations
Office, in lawful money of the United States, and
4
<PAGE> 7
payment of interest of each Series 1996-A Note shall, if the Holder thereof
holds $1,000,000 or more in aggregate principal amount of Series 1996-A Notes,
be made by the deposit or wire transfer of immediately available funds to the
credit of an account located within the United States specified by such Holder
in duly executed instructions, with signature guaranteed in a manner
satisfactory to the Indenture Trustee, delivered to the Indenture Trustee no
less than ten (10) Business Days prior to the first Distribution Date for which
such deposit or wire transfer of payment of interest is to be effective. If such
instructions are not delivered to the Indenture Trustee by the Holder of
$1,000,000 or more in aggregate principal amount of Series 1996- A Notes in
accordance with this paragraph, and for all other Holders, payment of interest
shall be made by check mailed on the applicable Distribution Date to the
Holder's address as it appears on the books of registry maintained by the
Indenture Trustee pursuant to Section 2.6 of the Master Indenture. Wire
transfers to a Holder made pursuant to this Section 2.3 shall be made without
expense to such Holder.
SECTION 2.4. DETERMINATION OF INTEREST RATE ON THE SERIES 1996-A NOTES.
The Series 1996-A Notes shall bear interest determined as provided in this
Section 2.4. During the Initial Period and each Interest Period thereafter,
interest shall accrue daily and shall be computed for the actual number of days
elapsed on the basis of a year consisting of three hundred sixty (360) days.
The Note Interest Rate to be borne by the Series 1996-A Notes during
the Initial Period shall be the Initial Rate. The Note Interest Rate to be borne
by the Series 1996-A Notes during each Interest Period thereafter shall be
determined on each Rate Determination Date for each such Interest Period and
shall be equal to the sum of the LIBOR Rate and, as to the A-1 Notes, the A-1
Notes Spread and, as to the A-2 Notes, the A-2 Notes Spread, provided, however,
that the Note Interest Rate borne by the Series 1996-A Notes at any time shall
not be greater than eighteen percent (18%) per annum. Such Note Interest Rate
shall be determined by the Indenture Trustee and announced to the Issuer by
written notice given in accordance with the Master Indenture on each Rate
Determination Date. Such Note nterest Rate shall take effect on the Rate
Adjustment Date immediately succeeding such Rate Determination Date.
The determination of the Note Interest Rate by the Indenture Trustee
shall be conclusive and binding on the Holders of the Series 1996-A Notes, the
Issuer and the Indenture Trustee absent manifest error. If the Indenture Trustee
shall fail to determine the Note Interest Rate for either Class of Series 1996-A
Notes on any Rate Determination Date pursuant to the preceding sentence, the
Note Interest Rate most recently determined for such Class of Series 1996-A
Notes shall remain in effect.
Notwithstanding anything contained herein to the contrary, in the event
that the Note Interest Rate on the Series 1996-A Notes for any Interest Period
exceeds the applicable Net Loan Rate, the Noteholders will receive interest
payments on the Series 1996-A Notes for such Interest Period in an amount equal
to the applicable Net Loan Rate; the difference between the Note Interest Rate
and, prior to the applicable Maturity Date, the applicable Net Loan Rate for
such an Interest Period shall be deferred ("Deferred Interest") and paid to the
Noteholders on the next succeeding Distribution Date on which funds are
available therefor. On the last Business Day of each Interest Period, the Issuer
shall notify the Indenture Trustee of the Net Loan Rate for such Interest
Period.
Notwithstanding the foregoing, the rate of interest on any Series
1996-A Note for the Initial Period or any Interest Period thereafter shall not
be in excess of the maximum rate of interest which may be charged or collected
by the Holder thereof pursuant to provisions of federal or state law applicable
to such Holder.
5
<PAGE> 8
ARTICLE 3
PAYMENT OF THE SERIES 1996-A NOTES PRIOR TO MATURITY
SECTION 3.1. PAYMENT OF THE SERIES 1996-A NOTES PRIOR TO MATURITY.
(a) Mandatory Principal Distributions. In accordance with Section 3.1
of the Master Indenture, the Series 1996-A Notes are subject to mandatory
principal distributions on each Distribution Date, but only at such times as
there shall be amounts in excess of $5,000 in the 1996-A Subaccount within the
Note Payment Account in the Note Fund. Principal of the A-2 Notes shall not be
prepaid unless no A-1 Notes remain Outstanding.
(b) Optional Purchase Prepayment. On any Distribution Date on or after
which the Balance in the 1996-A Account in the Student Loan Portfolio Fund is
equal to or less than ten percent (10%) of the Initial Pool Balance with respect
to the 1996 Financed Loans, the Seller may repurchase all remaining 1996
Financed Loans at a price equal to the outstanding principal balance of the 1996
Financed Loans, plus accrued and unpaid interest. The proceeds of the sale of
the remaining 1996 Financed Loans shall be credited to the 1996-A Subaccount in
the Note Payment Account within the Note Fund and used on such Distribution Date
to make mandatory principal distributions on the A-2 Notes, if any A-2 Notes
remain Outstanding.
ARTICLE 4
DISPOSITION OF PROCEEDS
SECTION 4.1. ESTABLISHMENT OF SUBACCOUNTS. The following subaccounts
and accounts are hereby established: (i) within the Cost of Issuance Account,
the 1996-A Subaccount; (ii) within the Debt Service Reserve Fund, the 1996-A
Debt Service Reserve Account; (iii) within the Acquisition Account, the 1996-A
Subaccount; (iv) within the Pre-Funding Account, the 1996-A Subaccount; (v)
within the Student Loan Portfolio Fund, the 1996-A Account; (vi) within the
Revenue Fund, the 1996-A Account; (vii) within the Note Payment Account, the
1996-A Subaccount; (viii) within the Note Interest Account, the 1996-A
Subaccount; and (ix) within the Administration Account, the 1996-A Subaccount.
SECTION 4.2. DISPOSITION OF PROCEEDS. All proceeds of the issuance and
sale of the Series 1996- A Notes, together with the proceeds of the issuance and
sale of the 1996-A Certificates transferred to the Indenture Trustee pursuant to
the First Trust Supplement, shall be deposited with the Indenture Trustee on the
Closing Date and the Indenture Trustee shall apply such proceeds to the
applicable Trust Funds, Accounts and Subaccounts designated for the Series
1996-A Notes as follows:
(i) to the 1996-A Subaccount in the Cost of Issuance Account, the
amount of $100,000;
(ii) to the 1996-A Subaccount in the Note Interest Account, the amount
of $750,000;
(iii) to the 1996-A Debt Service Reserve Account, the amount of
$926,250;
(iv) to the 1996-A Subaccount in the Acquisition Account, the amount
of $66,397,718; and
(v) to the 1996-A Subaccount in the Pre-Funding Account, the amount
of $54,523,282, constituting the remainder of the proceeds.
6
<PAGE> 9
The Indenture Trustee shall deposit to the credit of the 1996-A
Subaccount of the Acquisition Account the amount required by this Section 4.2.
Such amount shall be paid to or upon order of the Issuer on the Closing Date to
finance Loans, upon receipt by the Indenture Trustee of a certificate from the
Issuer in the form set forth in Exhibit B hereto. Any amount remaining in the
1996-A Subaccount of the Acquisition Account at the close of business on the
Closing Date shall be credited to the 1996-A Subaccount in the Pre-Funding
Account.
The Indenture Trustee shall deposit to the credit of the 1996-A
Subaccount in the Pre-Funding Account the amount required by this Section 4.2.
Such amount shall be paid to or upon the order of the Issuer to finance Loans,
upon receipt by the Indenture Trustee of a certificate from the Issuer in the
form set forth in Exhibit B hereto.
On November 15, 1996, any amounts credited to the 1996-A Subaccount in
the Pre-Funding Account which have not been expended or committed for the
purchase of Additional Loans as set forth in an Officer's Certificate of the
Issuer shall be credited to the 1996-A Subaccount within the Note Payment
Account in the Note Fund. Transfer of amounts in the 1996-A Subaccount in the
Pre-Funding Account to the 1996-A Subaccount within the Note Payment Account may
occur at any time during the Funding Period, if and to the extent that, the
Issuer certifies to the Indenture Trustee, based upon a certification received
by the Issuer from the Seller, that the amount of Loans originated or committed
will be insufficient to utilize the entire amount deposited in the 1996-A
Subaccount of the Pre-Funding Account.
At the end of the Funding Period, any amounts remaining in the 1996-A
Subaccount in the Pre- Funding Account shall be deposited in the 1996-A
Subaccount within the Note Payment Account in the Note Fund.
Pursuant to clause Eighth of Section 4.5(b) of the Master Indenture,
from the funds remaining in the 1996-A Revenue Account, after the transfers
required by clauses First through Seventh have been satisfied, an amount equal
to one-twelfth of eighty hundredths percent (0.80%) of the principal of the
Financed Loans Outstanding as of the end of the prior month shall be transferred
to the Owner Trustee for distribution to the Depositor and NMI Education Loan
Corporation, provided, however, that no such transfer shall occur if, after the
transfers required by clauses First through Seventh have been satisfied, the
Primary Parity Trigger is less than one hundred fourteen and seventy-eight
hundredths percent (114.78%) or the Secondary Parity Trigger is less than one
hundred five and seventy-four hundredths percent (105.74%) and provided,
further, that if, after the transfers required by clauses First through Seventh
have been satisfied, the Primary Parity Trigger is equal to or greater than one
hundred twenty-five percent (125%), then any funds remaining in the 1996-A
Revenue Account, after the transfers required by clauses First through Seventh
have been satisfied, shall be transferred to the Owner Trustee for distribution
to the Depositor and NMI Education Loan Corporation.
Notwithstanding the provisions of Section 4.5(b) of the Master
Indenture, if the Primary Parity Trigger is less than one hundred four percent
(104%) after the transfer described in clause Second has been completed, then
all remaining amounts shall be transferred to the 1996-A Subaccount within the
Note Payment Account in lieu of the transfers described in clauses Third through
Eleventh of such Section 4.5(b).
Notwithstanding the provisions of Section 4.5(b) of the Master
Indenture, if the Primary Parity Trigger is less than one hundred twelve and
seventy-eight hundredths percent (112.78%) after the transfer described in
clause Fourth has been completed, then all remaining amounts shall be
transferred to the 1996-A Subaccount within the Note Payment Account in lieu of
the transfers described in clauses Fifth through Eleventh of such Section
4.5(b).
7
<PAGE> 10
ARTICLE 5
MISCELLANEOUS
SECTION 5.1. FIRST TERMS SUPPLEMENT. This First Terms Supplement is
adopted pursuant to the provisions of the Master Indenture.
SECTION 5.2. COUNTERPARTS. This First Terms Supplement may be
simultaneously executed in several counterparts, each of which shall be an
original and all of which shall constitute but one and the same instrument.
SECTION 5.3. SECURITY AGREEMENT. This First Terms Supplement
constitutes a security agreement for the purposes of the Uniform Commercial
Code.
SECTION 5.4. GOVERNING LAW. This First Terms Supplement shall be
governed by and construed in accordance with the laws of the Commonwealth.
SECTION 5.5. RATIFICATION OF MASTER INDENTURE. As supplemented by this
First Terms Supplement, the Master Indenture as so supplemented by this First
Terms Supplement shall be read, taken and construed as one and the same
instrument. Each addition to and amendment of the Master Indenture contained
herein is solely for purposes of the Series 1996-A Notes, and shall have no
effect on any other Series of Notes issued pursuant to the Master Indenture. If
any term of this First Terms Supplement conflicts with any term of the Master
Indenture, this First Terms Supplement shall control for purposes of the Series
1996-A Notes.
8
<PAGE> 11
IN WITNESS WHEREOF, the parties hereto have caused this First Terms
Supplement to be duly executed as of the day and year first above written.
NELLIE MAE EDUCATION LOAN TRUST
By: Fleet National Bank,
not in its individual capacity
but solely as Owner Trustee
By: /s/ Chi C. Ma
------------------------------------------
Name: Chi Ma
Title: Assistant Vice President
STATE STREET BANK AND TRUST COMPANY, not in
its individual capacity but solely as Indenture
Trustee
By: /s/ Patrick E. Thebado
------------------------------------------
Name: Patrick E. Thebado
Title: Assistant Vice President
9
<PAGE> 12
EXHIBIT A
No. [A-1 December 15, 2004]
[A-2 December 15, 2018]
CUSIP No.
NELLIE MAE EDUCATION LOAN TRUST
ASSET-BACKED NOTES
SERIES 1996-A
Dated: July 12, 1996
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER (AS DEFINED BELOW)
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS NOTE IS NOT GUARANTEED OR INSURED BY ANY GOVERNMENTAL AGENCY.
NELLIE MAE EDUCATION LOAN TRUST, a Massachusetts business trust (the
"Issuer"), hereby acknowledges itself indebted and, for value received, hereby
promises to pay (but only out of the Indenture Trust Estate) to CEDE & CO. or
registered assigns, upon presentation and surrender hereof on the Maturity Date
(subject to prior prepayment and redemption as described herein), the principal
sum of DOLLARS ($________________) in lawful money of the United States of
America, and to pay interest thereon at the rates, on the dates and subject to
the limitations as provided herein (but only out of said Indenture Trust Estate)
in like lawful money. Unless otherwise defined in this Series 1996-A Note,
capitalized terms used in this Series 1996-A Note shall have the respective
meaning given to such terms in the Master Trust Indenture dated as of June 1,
1996 (the "Master Indenture"), as supplemented by the First Terms Supplement
dated as of June 1, 1996 (the "First Terms Supplement" and together, the
"Indenture") between the Issuer and State Street Bank and Trust Company, as
Indenture Trustee.
This 1996-A Note is one of a duly authorized issue of notes of the
Issuer designated as "Nellie Mae Education Loan Trust Asset-Backed Notes, Series
1996-A", in the aggregate principal amount of $115,800,000 issued under the
authority of the Trust Agreement dated as of June 1, 1996 between the Depositor
and the Owner Trustee and pursuant to the Indenture. The Series 1996-A Notes are
issued to finance the acquisition of 1996 Financed Loans, and to make certain
deposits to the Trust Funds and Accounts.
The Master Indenture provides for the issuance, from time to time,
under the conditions, limitations and restrictions set forth therein, of
additional Notes on a parity with all Series of obligations issued or to be
issued under the Indenture, for the purpose of providing additional funds for
the acquisition of additional Loans (said additional Notes, together with Series
1996-A Notes, being collectively referred to herein as the "Notes").
A-1
<PAGE> 13
The Series 1996-A Notes are being issued by means of a book-entry only
system with one Series 1996-A Note certificate for each class and maturity of
Series 1996-A Notes immobilized at The Depository Trust Company, New York, New
York ("DTC"), not available for distribution to the public, and evidencing
ownership of the Series 1996-A Notes in principal amounts of $1,000 of integral
multiples thereof, with transfers of ownership effected on the records of DTC
and its participants pursuant to rules and procedures established by DTC and its
participants. Interest on this Series 1996-A Note and principal of this Series
1996-A Note, at maturity or upon earlier redemption, will be paid in New York
Clearing House or equivalent next-day funds to Cede & Co., as nominee of DTC, as
registered owner of this Series 1996-A Note. Transfer of principal and interest
payments to participants of DTC is the responsibility of DTC; transfer of
principal and interest payments to beneficial owners by participants of DTC will
be the responsibility of such participants and other nominees of beneficial
owners. The Series 1996-A Notes shall be registered in the form of one
registered Series 1996-A Note for the aggregate principal amount of each
maturity in the name of Cede & Co., as nominee of DTC, provided that if DTC
shall request that the Series 1996-A Notes be registered in the name of a
different nominee, the Indenture Trustee shall exchange all or any portion of
the Series 1996-A Notes for an equal aggregate principal amount of Series 1996-A
Notes registered in the name of such nominee or nominees of DTC. During any such
period, no person other than DTC or its nominee shall be entitled to receive
from the Issuer or the Indenture Trustee either a Series 1996- A Note or any
other evidence of ownership of the Series 1996-A Notes, or any right to receive
any payment in respect thereof unless DTC or its nominee shall transfer record
ownership of all or any portion of the Series 1996-A Notes on the registration
books maintained by the Indenture Trustee in connection with discontinuing the
book-entry only system.
So long as the Series 1996-A Notes or any portion thereof are
registered in the name of DTC or any nominee thereof, the Issuer and the
Indenture Trustee may treat DTC (or its nominee) as the sole and exclusive owner
of the Series 1996-A Notes registered in its name for the purposes of payment of
the principal of or interest on the Series 1996-A Notes, selecting the Series
1996-A Notes or portions thereof to be redeemed, giving any notice permitted or
required to be given to Holders under the Indenture, registering the transfer of
Series 1996-A Notes, obtaining any consent or other action to be taken by
Holders and for all other purposes whatsoever, and neither the Issuer nor the
Indenture Trustee shall be affected by any notice to the contrary. Neither the
Issuer nor the Indenture Trustee shall have any responsibility or obligation to
any participant in DTC, any person claiming a beneficial ownership in the Series
1996-A Notes under or through DTC or any such participant, or any other person
not shown on the registration books of the Indenture Trustee as being a Holder,
with respect to the Series 1996-A Notes, the accuracy of any records maintained
by DTC or any such participant, the payment by DTC or any such participant of
any amount in respect of the principal of or interest on the Series 1996-A
Notes, any notice which is permitted or required to be given to Holders under
the Indenture, the selection by DTC or any such participant of any person to
receive payment in the event of a partial redemption of the Series 1996-A Notes
or any consent given or other action taken by DTC as Holder.
The book-entry only system for registration of the ownership of the
Series 1996-A Notes may be discontinued at any time if DTC determines to resign
as securities depository for the Series 1996-A Notes or the Indenture Trustee
determines that continuation of the system of book-entry only transfers through
DTC (or through a successor securities depository) is not in the best interests
of the Holders. In either of such events (unless in the case of a determination
by the Indenture Trustee, the Indenture Trustee, at the direction of the Issuer,
appoints a successor securities depository), the Series 1996-A Notes shall be
delivered in registered certificate form to such persons, and in such principal
amounts (and in Authorized Denominations), as may be designated by DTC, but
without any liability on the part of the Issuer or the Indenture Trustee for the
accuracy of such designation. Whenever DTC requests the Issuer and the Indenture
Trustee to do so, the Issuer and the Indenture Trustee shall cooperate with DTC
in taking
A-2
<PAGE> 14
appropriate action after reasonable notice to arrange for another securities
depository to maintain custody of certificates evidencing the Series 1996-A
Notes.
In the event of the discontinuance of the book-entry only system as
provided herein, a replacement certificate for this Series 1996-A Note may be
issued in accordance with the Indenture and such procedures as the Issuer and
the Indenture Trustee shall deem appropriate.
Reference is hereby made to the Indenture, a copy of which is on file
with the Indenture Trustee, and to all of the provisions thereof, to all of
which provisions the registered owner of this Series 1996-A Note, by acceptance
hereof, hereby assents and agrees, for definitions of terms, the descriptions of
and the nature and extent of the security for the Series 1996-A Notes, the
education loan purchase program being financed by the issuance of the Series
1996-A Notes, the revenues and other assets pledged to the payment of the
principal of and interest on the Series 1996-A Notes, the nature and extent and
manner of enforcement of the pledge, the conditions upon which the Indenture may
be amended or supplemented with or without the consent of the registered owners
of the Series 1996-A Notes, the rights and remedies of the registered owners of
the Series 1996-A Notes, including the limitations therein contained upon the
right of a registered owner to institute any suit, action or proceeding in
equity or at law with respect hereto and thereto, the rights, duties and
obligations of the Issuer and the Indenture Trustee thereunder, the terms and
provisions upon which the liens, pledges, charges, trusts, security interests,
assignments and covenants made therein may be discharged at or prior to the
maturity of this Series 1996-A Note, this Series 1996-A Note thereafter no
longer being secured by the Indenture or being deemed to be outstanding
thereunder, and for the other terms and provisions thereof.
The unpaid principal amount hereof from time to time outstanding shall
bear interest at a variable interest rate determined by the Indenture Trustee
and announced to the Issuer, as described in the Indenture. If the Indenture
Trustee shall fail or refuse to determine the Note Interest Rate for any Class
of Notes on any Rate Determination Date pursuant to the preceding sentence, the
Note Interest Rate most recently determined for any Class of Notes shall remain
in effect.
In no event shall the Note Interest Rate on this Series 1996-A Note
exceed 18% per annum.
The Series 1996-A Notes shall be subject to optional prepayment and
mandatory principal distributions prior to the Maturity Date, upon the terms and
conditions, at such times and according to such terms as are set forth in the
Indenture.
If an Event of Default as defined in the Indenture shall occur, the
principal of and interest on all Notes issued under the Indenture may be
declared due and payable upon the conditions and in the manner and with the
effect provided in the Indenture. The Indenture and the rights and obligations
of the Issuer, the Indenture Trustee and the registered owner hereof may be
modified or amended in the manner and subject to the conditions set forth in the
Indenture.
In any case where the date fixed for the payment of principal of or
interest on this Series 1996-A Note shall not be a Business Day, then payment of
such principal or interest need not be made on such date but may be made on the
next succeeding Business Day.
The Noteholder of this Series 1996-A Note shall have no right to
enforce the provisions of the Indenture or to institute action to enforce the
covenants therein, or to take any action with respect to any Event of Default
under the Indenture, or to institute, appear in or defend any suit or other
proceeding with respect thereto, except as provided in the Indenture.
A-3
<PAGE> 15
This Series 1996-A Note does not represent an obligation of, or an
interest in, the Depositor, the Administrator, the Owner Trustee, the Indenture
Trustee, USA Group Loan Services, Inc., as Servicer or any affiliates of any of
them, and no recourse may be had against such parties or their assets, except as
may be expressly set forth herein or in the Basic Documents. In addition, this
Series 1996-A Note is not guaranteed by any governmental agency or
instrumentality and is limited in right of payment to certain collections
respecting the Financed Loans, all as more specifically set forth in the
Indenture.
The transfer of this Series 1996-A Note may be registered only upon
surrender hereof to the Indenture Trustee together with an assignment duly
executed by the registered owner or its attorney or legal representatives in
such form as shall be satisfactory to the Indenture Trustee. Upon any such
registration of transfer of this Series 1996-A Note and subject to the payment
of any fees and charges as provided by the Indenture, the Issuer shall execute
and the Indenture Trustee shall authenticate the deliver in exchange for this
Series 1996-A Note a new Series 1996-A Note or Notes registered in the name of
the transferee, in any denomination or denominations authorized by the
Indenture, of the same maturity and in an aggregate principal amount equal to
the unpaid principal amount of this Series 1996-A Note and bearing the same
interest as this Series 1996-A Note.
It is hereby certified, recited and declared that all acts, conditions
and things required to have happened, to exist and to have been performed
precedent to and in the issuance of this Series 1996-A Note and the issue of
which it is one, have happened, exist and have been performed in regular and due
time, form and manner as required by law.
This Series 1996-A Note shall not be entitled to any benefit under the
Indenture, or become valid or obligatory for any purpose, until the certificate
of authentication and registration hereon endorsed shall have been signed by the
Authenticating Agent.
This Series 1996-A Note shall be governed by, and construed and
interpreted in accordance with, the laws of The Commonwealth of Massachusetts.
Fleet National Bank acts solely as Owner Trustee and not in its
individual capacity and no trustee, shareholder, officer, employee or agent of
Fleet National Bank shall be held personally liable in connection with the
affairs of the Trust.
A-4
<PAGE> 16
IN WITNESS WHEREOF, NELLIE MAE EDUCATION LOAN TRUST has caused this
Series 1996-A Note to be executed in its name and on its behalf by the manual or
facsimile signature of an Authorized Officer as of the date shown above.
NELLIE MAE EDUCATION LOAN TRUST
By: Fleet National Bank, not in its
individual capacity but solely as
Owner Trustee
Attest:
By: By:
--------------------- ---------------------------------
Name: Name:
Title: Title:
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This Note is one of the Series 1996-A Notes designated in and issued under the
provisions of the within mentioned Indenture.
STATE STREET BANK AND TRUST COMPANY, as
Indenture Trustee
By:
------------------------
Responsible Officer
Date of Authentication: July , 1996
A-5
<PAGE> 17
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OR ASSIGNEE
- -------------------------------------------------------------------------------
(Please print or type name and address, including postal zip code, of assignee)
the within Series 1996-A Note, and all rights thereunder, hereby irrevocably
constituting and appointing
- -----------------------------------------------Attorney to transfer said Series
1996-A Note on the books of the Note Registrar, with full power of substitution
in the premises.
Dated:
-------------------------------*
Signature Guaranteed:
-------------------------------*
* NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Series 1996-A Note in every particular,
without alteration, enlargement or any change whatever.
[END OF FORM OF SERIES 1996-A NOTE]
A-6
<PAGE> 18
CERTIFICATE AS TO FINANCED LOANS
State Street Bank and Trust Company, as Indenture Trustee under the
Trust Indenture identified below
Corporate Trust Division
Re: Nellie Mae Education Loan Trust Asset-Backed Notes, Series
1996-A
This Certificate as to the Financed Loans is submitted pursuant to the
provisions of Section 4.3 of the Master Trust Indenture dated as of June 1, 1996
(the "Indenture") between Nellie Mae Education Loan Trust (the "Trust") and
State Street Bank and Trust Company, as Indenture Trustee and Section 4.2 of the
First Terms Supplement between the Trust and the Indenture Trustee dated as of
June 1, 1996. All capitalized terms used in this certificate and not otherwise
defined are used herein as defined in the Indenture.
In your capacity as Indenture Trustee, you are hereby authorized and
requested to disburse to the Trust the sum of $66,397,718 in connection with the
financing or refinancing of Financed Loans. With respect to such financing or
refinancing, the Trust hereby certifies as follows:
1. Each Financed Loan is a Loan authorized by the Indenture to be so
financed or refinanced.
2. You have been provided with evidence that Uniform Commercial Code
financing statements with respect to the Financed Loans have been or will be
promptly filed in such place or places required to perfect the security interest
of the Indenture Trustee in the Financed Loans.
3. The Custodian, as agent for the Indenture Trustee pursuant to the
Custody Agreement, has possession of the promissory notes evidencing the
Financed Loans.
4. The Guaranty Agreements are in effect with respect to certain
Financed Loans, and the Trust is not in default in the performance of any of its
covenants and agreements made in the Guaranty Agreements, and, to the best of
its knowledge, neither Guarantor is in default under any of its covenants and
agreements made in the applicable Guaranty Agreement.
5. The undersigned, as an Authorized Officer of the Trust, is
authorized to sign and submit this Certificate on behalf of the Trust.
WITNESS my hand this 12th day of July 12, 1996.
NELLIE MAE EDUCATION LOAN TRUST
By: Fleet National Bank,
not in its individual capacity but solely
as Owner Trustee
By:
---------------------------------
Name:
B-1
<PAGE> 1
EXHIBIT 4.3
TRUST AGREEMENT
between
NELLIE MAE EDUCATION FUNDING, LLC
as Depositor,
and
FLEET NATIONAL BANK,
not in its individual capacity but solely
as Owner Trustee
Dated as of June 1, 1996
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I Definitions and Usage................................................................ 1
SECTION 1.1. Definitions and Usage.............................................................. 1
ARTICLE II Organization.................................................................................. 1
SECTION 2.1. Creation of Trust; Name............................................................ 1
SECTION 2.2. Office and Situs of the Trust...................................................... 1
SECTION 2.3. Purpose and Powers................................................................. 1
SECTION 2.4. Appointment of Owner Trustee....................................................... 2
SECTION 2.5. Initial Capital Contribution of Trust Estate....................................... 2
SECTION 2.6. Declaration of Trust............................................................... 2
SECTION 2.7. Liability of the Certificateholders................................................ 2
SECTION 2.8. Title to Trust Property............................................................ 3
SECTION 2.9. Representations and Warranties of the Depositor.................................... 3
SECTION 2.10. Federal Income Tax Allocations..................................................... 4
SECTION 2.11. Required Net Worth................................................................. 4
ARTICLE III Certificates and Transfer of Interests........................................................ 4
SECTION 3.1. Initial Beneficial Ownership....................................................... 4
SECTION 3.2. Certificates....................................................................... 4
SECTION 3.3. Authentication of Certificates..................................................... 4
SECTION 3.4. Registration of Transfer and Exchange of Certificates.............................. 5
SECTION 3.5. Mutilated, Destroyed, Lost or Stolen Certificates.................................. 5
SECTION 3.6. Persons Deemed Owners.............................................................. 6
SECTION 3.7. Access to List of Certificateholders' Names and Addresses.......................... 6
SECTION 3.8. Maintenance of Office or Agency.................................................... 6
SECTION 3.9. Appointment of Certificate Paying Agent............................................ 6
SECTION 3.10. Disposition by Depositor and NMELC. .............................................. 7
SECTION 3.11. Book-Entry Certificates............................................................ 7
SECTION 3.12. Notices to Securities Depository................................................... 8
SECTION 3.13. Definitive Certificates............................................................ 8
SECTION 3.14. Determination of Interest Rate..................................................... 9
SECTION 3.15. No Listing on Securities Market.................................................... 9
ARTICLE IV Actions by Owner Trustee...................................................................... 9
SECTION 4.1. Prior Notice to Rating Agencies and Certificateholders with Respect to
Certain Matters.................................................................... 9
SECTION 4.2. Action by Certificateholders with Respect to Certain Matters....................... 9
SECTION 4.3. Action by Certificateholders with Respect to Bankruptcy............................ 9
SECTION 4.4. Restrictions on Certificateholders' Power.......................................... 10
SECTION 4.5. Majority Control................................................................... 10
ARTICLE V Application of Trust Funds; Certain Duties.................................................... 10
SECTION 5.1. Application of Trust Funds......................................................... 10
SECTION 5.2. Method of Payment.................................................................. 13
SECTION 5.3. Segregation of Moneys: No Interest................................................. 13
</TABLE>
-i-
<PAGE> 3
<TABLE>
<S> <C>
SECTION 5.4. Accounting and Reports to the Noteholders, Certificateholders, the
Internal Revenue Service and Others................................................ 13
SECTION 5.5. Signature on Returns; Tax Matters Partner.......................................... 14
SECTION 5.6. Capital Accounts................................................................... 14
ARTICLE VI Authority and Duties of Owner Trustee......................................................... 15
SECTION 6.1. General Authority.................................................................. 15
SECTION 6.2. General Duties..................................................................... 15
SECTION 6.3. Action upon Instruction............................................................ 15
SECTION 6.4. No Duties Except as Specified in this Agreement or in Instructions................. 16
SECTION 6.5. No Action Except Under Specified Documents or Instructions......................... 16
SECTION 6.6. Restrictions....................................................................... 17
ARTICLE VII Concerning the Owner Trustee.................................................................. 17
SECTION 7.1. Acceptance of Trusts and Duties.................................................... 17
SECTION 7.2. Furnishing of Documents............................................................ 18
SECTION 7.3. Representations and Warranties..................................................... 18
SECTION 7.4. Reliance; Advice of Counsel........................................................ 19
SECTION 7.5. Not Acting in Individual Capacity.................................................. 19
SECTION 7.6. Owner Trustee Not Liable for Certificates or Financed Loans........................ 19
SECTION 7.7. Owner Trustee May Own Certificates and Notes....................................... 20
ARTICLE VIII Compensation of Owner Trustee................................................................. 20
SECTION 8.1. Owner Trustee's Fees and Expenses.................................................. 20
SECTION 8.2. Payments to the Owner Trustee...................................................... 20
ARTICLE IX Termination of Trust Agreement................................................................ 20
SECTION 9.1. Termination of Trust Agreement..................................................... 20
SECTION 9.2. Dissolution upon Insolvency of the Depositor....................................... 21
ARTICLE X Successor Owner Trustees and Additional Owner Trustees........................................ 21
SECTION 10.1. Eligibility Requirements for Owner Trustee......................................... 21
SECTION 10.2. Resignation or Removal of Owner Trustee............................................ 22
SECTION 10.3. Successor Owner Trustee............................................................ 22
SECTION 10.4. Merger or Consolidation of Owner Trustee........................................... 23
SECTION 10.5. Appointment of Co-Owner Trustee or Separate Owner Trustee.......................... 23
ARTICLE XI Miscellaneous................................................................................. 24
SECTION 11.1. Supplements and Amendments......................................................... 24
SECTION 11.2. No Legal Title to Trust Estate in Certificateholders............................... 25
SECTION 11.3. Limitations on Rights of Others.................................................... 25
SECTION 11.4. Notices............................................................................ 26
SECTION 11.5. Severability....................................................................... 26
SECTION 11.6. Separate Counterparts.............................................................. 26
SECTION 11.7. Successors and Assigns............................................................. 26
SECTION 11.8. No Petition........................................................................ 26
SECTION 11.9. No Recourse........................................................................ 26
SECTION 11.10. Headings........................................................................... 27
SECTION 11.11. Governing Law...................................................................... 27
SECTION 11.12. Creation of Trust and Delivery of Trust Agreement.................................. 27
</TABLE>
-ii-
<PAGE> 4
TRUST AGREEMENT dated as of June 1, 1996, between Nellie Mae Education
Funding, LLC, a Delaware limited liability company, as Depositor (the
"Depositor") and Fleet National Bank, a national banking association, not in its
individual capacity but solely as Owner Trustee (the "Owner Trustee").
The Depositor and the Owner Trustee hereby agree as follows:
ARTICLE I
Definitions and Usage
SECTION 1.1. Definitions and Usage. Unless the context shall clearly
indicate some other meaning or may otherwise require, capitalized terms used but
not defined herein are defined in Exhibit A hereto, which also contains rules as
to construction and usage that are applicable herein.
ARTICLE II
Organization
SECTION 2.1. Creation of Trust; Name. There is hereby created a Trust
which shall be known as "Nellie Mae Education Loan Trust," in which name the
Owner Trustee may conduct the business of the Trust, make and execute contracts
and other instruments on behalf of the Trust and sue and be sued. The Trust
shall constitute a Massachusetts trust within the meaning of Chapter 182 of the
Massachusetts General Laws for which the Depositor has filed a copy of this
Agreement as the declaration of trust with the Secretary of the Commonwealth and
with the Clerk of the City of Boston, Massachusetts.
SECTION 2.2. Office and Situs of the Trust. The registered office in
Massachusetts and situs of the Trust shall be in care of the Owner Trustee at
One Federal Street Boston, Massachusetts, 02211 or at such other office as the
Owner Trustee may designate.
SECTION 2.3. Purpose and Powers. The purpose of the Trust is to engage
in the following activities:
(i) to issue one or more Classes of Certificates pursuant to
this Agreement and the applicable Trust Supplement, and to sell the Certificates
in one or more transactions;
(ii) to issue one or more Series of Notes pursuant to the
Indenture and the applicable Terms Supplement and to sell the Notes in one or
more transactions;
(iii) with the proceeds of the sale of the Notes and the
Certificates, to purchase Loans, from time to time, pursuant to the
Sales Agreement or a Supplemental Sales Agreement, to fund one or more
subaccounts within the Pre-Funding Account, to fund one or more
subaccounts within the Acquisition Account and to fund one or more
accounts within the Debt Service Reserve Fund, all in accordance with
the Indenture;
(iv) to assign, grant, transfer, pledge, mortgage and convey
the Indenture Trust Estate to the Indenture Trustee pursuant to the
Indenture and the applicable Terms Supplement and to hold, manage and
distribute to the Certificateholders any portion of the Indenture Trust
Estate released from the lien of, and remitted to the Trust pursuant
to, the Indenture and the applicable Terms Supplement;
<PAGE> 5
(v) to enter into and perform its obligations under the Basic
Documents to which it is to be a party;
(vi) to engage in those activities, including entering into
agreements, that are necessary, suitable or convenient to accomplish
the foregoing or are incidental thereto or connected therewith; and
(vii) to engage in such other activities as may be required in
connection with conservation of the Trust Estate and the making of
distributions to the Certificateholders, the Noteholders and others,
including the Administrator and the Servicer, as contemplated by the
Basic Documents.
The Trust shall not engage in any activity other than in connection with the
foregoing or other than as required or authorized by the terms of this Agreement
or the other Basic Documents.
SECTION 2.4. Appointment of Owner Trustee. The Depositor hereby (i)
appoints the Owner Trustee as trustee of the Trust effective as of the date
hereof to have all the rights, powers and duties set forth herein and (ii)
ratifies all actions of the Owner Trustee taken on behalf of the Trust prior to
the execution hereof.
SECTION 2.5. Initial Capital Contribution of Trust Estate. The
Depositor hereby sells, assigns, transfers, conveys and sets over to the Owner
Trustee, as of the date hereof, the sum of $1.00. The Owner Trustee hereby
acknowledges receipt in trust from the Depositor of the foregoing contribution,
which shall constitute the initial Trust Estate and shall be deposited in the
Revenue Fund. The Depositor shall pay the organizational expenses of the Trust
as they may arise or shall, upon the request of the Owner Trustee, promptly
reimburse the Owner Trustee for any such expenses, including reasonable fees and
expenses of counsel, paid by the Owner Trustee.
SECTION 2.6. Declaration of Trust. The Owner Trustee hereby declares
that it will hold the Trust Estate in trust upon and subject to the conditions
set forth herein for the use and benefit of the Certificateholders, subject to
the obligations of the Trust under the Indenture and the other Basic Documents.
It is the intention of the parties hereto that the Trust constitute a trust
under Massachusetts law and that this Agreement constitute the governing
instrument of such trust. If for any reason it is determined that the Trust does
not qualify as a trust under Chapter 182 of the Massachusetts General Laws, it
shall be a trust, nonetheless, under the common law of Massachusetts. It is the
intention of the parties hereto that, solely for Federal income tax purposes,
the Trust shall be treated as a partnership, with the assets of the partnership
being the Financed Loans and other assets held by the Trust, the partners of the
partnership being the Certificateholders (including the Depositor and NMI
Education Loan Corporation ("NMELC")) in their capacity as Certificateholders
and as recipients of distributions from the Trust) and the Notes being debt of
the partnership. The parties agree that, unless otherwise required by
appropriate Federal tax authorities, they shall treat the Trust as a partnership
for Federal tax purposes, and the Trust will file or cause to be filed annual or
other necessary returns, reports and other forms consistent with the
characterization of the Trust as a partnership for Federal tax purposes.
Effective as of the date hereof, the Owner Trustee shall have all rights, powers
and duties set forth herein with respect to accomplishing the purposes of the
Trust.
SECTION 2.7. Liability of the Certificateholders.
(a) The Depositor shall be liable directly to and will
indemnify the injured party for all losses, claims, damages,
liabilities and expenses of the Trust (including expenses, to the
extent that the portion of the Trust Estate that would remain if all
the Notes were paid in full would not
2
<PAGE> 6
be sufficient to pay any such liabilities, or if such liabilities in
fact were not paid out of the Trust Estate) to the extent that the
Depositor would be liable if the Trust were a partnership under the
Massachusetts Uniform Limited Partnership Act in which the Depositor
were a general partner; provided, however, that the Depositor shall not
be liable for any losses incurred by a beneficial owner of a Note in
its capacity as a Noteholder or to any Certificateholder. In addition,
any third party creditors of the Trust (other than in connection with
the obligations to Noteholders excepted above) shall be deemed third
party beneficiaries of this paragraph. The obligations of the Depositor
under this paragraph shall be evidenced by the Certificates described
in Section 3.10, which shall be deemed to be a separate Class of
Certificates from all other Certificates issued by the Trust; provided
that the rights and obligations evidenced by all Certificates,
regardless of Class, except as provided in this Section 2.7 and in
Sections 2.10 and 3.10 hereof shall be identical.
(b) No Certificateholder, other than to the extent set forth
in paragraph (a), shall have any personal liability for any liability
or obligation of the Trust.
SECTION 2.8. Title to Trust Property. Legal title to all of the Trust
Estate, including without limitation, the Financed Loans, shall be vested at all
times in the Owner Trustee (or a co-trustee and/or a separate trustee if the
Owner Trustee deems it necessary or desirable pursuant to Section 10.5) except
where applicable law in any jurisdiction requires title to any part of the Trust
Estate to be vested in the Trust, in which case title shall be deemed to be
vested in the Trust. Notwithstanding the foregoing, to the extent the Depositor
is deemed to retain any right, title or interest in the Trust Estate, the
Depositor grants to the Owner Trustee for the benefit of the Trust a security
interest therein.
SECTION 2.9. Representations and Warranties of the Depositor. The
Depositor hereby represents and warrants to the Owner Trustee that:
(a) The Depositor is duly organized, validly existing and in
good standing under the laws of the Commonwealth, with power and
authority to own its properties and to conduct its business as such
properties are currently owned and such business is presently
conducted.
(b) The Depositor has the power and authority to execute and
deliver this Agreement and to carry out its terms; the Depositor has
full power and authority to sell and assign the property to be sold and
assigned to and deposited with the Trust (or with the Owner Trustee on
behalf of the Trust) and the Depositor has duly authorized such sale
and assignment and deposit to the Trust (or to the Owner Trustee on
behalf of the Trust) by all necessary action; and the execution,
delivery and performance of this Agreement have been duly authorized by
the Depositor by all necessary action.
(c) This Agreement constitutes a legal, valid and binding
obligation of the Depositor enforceable in accordance with its terms.
(d) 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 or both) a default
under, the certificate of organization or operating agreement of the
Depositor or any material indenture, agreement or other material
instrument to which the Depositor is a party or by which it is bound;
nor 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 (other than pursuant to the Basic Documents); nor
violate any law or, to the Depositor's knowledge, any order, rule or
regulation applicable to the Depositor of any court or of any Federal
or state regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Depositor or its
properties.
3
<PAGE> 7
(e) No consent, authorization or approval of, or filing with.
any Federal or state governmental or administrative authority is
required to be obtained by the Depositor prior to its entering into
this Agreement or in connection with its consummation of the
transactions contemplated by the Basic Documents.
SECTION 2.10. Federal Income Tax Allocations. For federal income tax
purposes, as of the close of each month items of gross income of the Trust
(consisting of a proportionate part of each item of gross income) shall be
allocated among the Certificateholders in proportion to, but not in excess of,
the following amount:
for each Certificate, to the holder of such Certificate, the
total interest paid on such Certificate from the commencement
of the Trust through the end of such month, plus the amount of
interest, if any, accrued through the end of such month and
reasonably expected to be paid on such Certificate during the
next month, minus the aggregate income allocated for such
Certificate under this sentence for all prior periods.
All other items of gross income and all items of deduction and loss
shall be allocated to the Depositor and NMELC in proportion to the amount of the
Certificates issued to the Depositor and NMELC pursuant to Section 3.10.
SECTION 2.11. Required Net Worth. For so long as any Notes or
Certificates shall remain outstanding, the Depositor shall take all actions
necessary to maintain its net worth (exclusive of its interest in the Trust)
equal to $762,300 or such other amount as satisfies the then existing Internal
Revenue Service guidelines concerning the net worth requirements for general
partners of partnerships, as set forth in Revenue Procedure 92-88 or successor
pronouncements.
ARTICLE III
Certificates and Transfer of Interests
SECTION 3.1. Initial Beneficial Ownership. Upon the formation of the
Trust by the contribution by the Depositor pursuant to Section 2.5 and until the
issuance of Certificates, the Depositor and NMELC shall each be 50% beneficial
owners of the Trust.
SECTION 3.2. Certificates. Each Class of Certificates shall be issued
in Authorized Denominations; provided, however, that the Certificates issued to
the Depositor and NMELC pursuant to Section 3.10 may be issued in such
denomination as to include any residual amount of the Certificate Balance (but
in no case less than $1,000 in principal amount). The Certificates shall be
executed on behalf of the Trust by manual or facsimile signature of an
authorized officer of the Owner Trustee. Certificates bearing the manual or
facsimile signatures of individuals who were, at the time when such signatures
shall have been affixed, authorized to sign on behalf of the Trust, shall be
valid and binding obligations of the Trust, notwithstanding that such
individuals or any of them shall have ceased to be so authorized prior to the
authentication and delivery of such Certificates or did not hold such offices at
the date of authentication and delivery of such Certificates.
SECTION 3.3. Authentication of Certificates. Upon the initial sale of
Financed Loans to the Trust pursuant to the Sales Agreement, and from time to
time in connection with any subsequent sale of Financed Loans to the Trust
pursuant to a Supplemental Sales Agreement, Certificates shall be issued, in
Authorized Denominations, in an aggregate principal amount and with such terms
and designation, including the
4
<PAGE> 8
designation that each particular Class of Certificates is identified with a
particular Series of Notes, all as shall be provided in a related Trust
Supplement. No Certificate shall entitle its holder to any benefit under this
Agreement, or shall be valid for any purpose, unless there shall appear on such
Certificate a certificate of authentication substantially in the form set forth
in Exhibit B, executed by the Owner Trustee by manual signature; such
authentication shall constitute conclusive evidence that such Certificate shall
have been duly authenticated and delivered hereunder. All Certificates shall be
dated the date of their authentication. The Maturity Date for each Class of
Certificates shall occur later than the Maturity Date for all related Classes of
Notes.
SECTION 3.4. Registration of Transfer and Exchange of Certificates. The
Certificate Registrar shall keep or cause to be kept, at the office or agency
maintained pursuant to Section 3.8, a Certificate Register in which, subject to
such reasonable regulations as it may prescribe, the Owner Trustee shall provide
for the registration of and transfers and exchanges of Certificates. The Owner
Trustee shall be the initial Certificate Registrar.
Upon surrender for registration of transfer of any Certificate at the
office or agency maintained pursuant to Section 3.8, the Owner Trustee shall
execute, authenticate and deliver in the name of the designated transferee or
transferees, one or more new Certificates, in authorized denominations of a like
aggregate amount dated the date of authentication by the Owner Trustee or any
authenticating agent. At the option of a Certificateholder, Certificates may be
exchanged for other Certificates of Authorized Denominations of a like aggregate
amount upon surrender of the Certificates to be exchanged at the office or
agency maintained pursuant to Section 3.8.
Every Certificate presented or surrendered for registration of transfer
or exchange shall be accompanied by a written instrument of transfer
substantially in the form set forth in Exhibit B hereto duly executed by the
Certificateholder or his attorney duly authorized in writing, with such
signature guaranteed by an entity acceptable to the Owner Trustee. Each
Certificate surrendered for registration of transfer or exchange shall be
cancelled and subsequently disposed of by the Owner Trustee in accordance with
its customary practice.
No service charge shall be made for any registration of transfer or
exchange of Certificates, but the Owner Trustee or the Certificate Registrar may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
The preceding provisions of this Section 3.4 notwithstanding, the Owner
Trustee shall not be required to make and the Certificate Registrar need not
register transfers or exchanges of Certificates, for a period of fifteen (15)
days preceding any Distribution Date with respect to the Certificates.
The Certificates and any beneficial interest in such Certificates may
not be acquired by a Benefit Plan. By accepting and holding a Certificate or an
interest therein, the Certificateholder thereof or Certificate Owner thereof
shall be deemed to have represented and warranted that it is not a Benefit Plan,
and is not using assets of a Benefit Plan to purchase any Certificates.
SECTION 3.5. Mutilated, Destroyed, Lost or Stolen Certificates. If (a)
any mutilated Certificate shall be surrendered to the Certificate Registrar, or
if the Certificate Registrar shall receive evidence to its satisfaction of the
destruction, loss or theft of any Certificate, and (b) there shall be delivered
to the Certificate Registrar and the Owner Trustee such security or indemnity as
may be required by them to save each of them harmless, then in the absence of
notice that such Certificate shall have been acquired by a bona fide purchaser,
the Owner Trustee, on behalf of the Trust, shall execute and the Owner Trustee
shall authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen
5
<PAGE> 9
Certificate, a new Certificate of like tenor and denomination. In connection
with the issuance of any new Certificate under this Section 3.5, the Owner
Trustee and the Certificate Registrar may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection therewith. Any duplicate Certificate issued pursuant to this Section
3.5 shall constitute conclusive evidence of ownership in the Trust, as if
originally issued, whether or not the lost, stolen or destroyed Certificate,
shall be found at any time.
SECTION 3.6. Persons Deemed Owners. Prior to due presentation of a
Certificate for registration of transfer, the Owner Trustee, the Certificate
Registrar and any agent may treat the person in whose name any Certificate shall
be registered in the Certificate Register as the owner of such Certificate for
the purpose of receiving distributions pursuant to Section 5.1 and for all other
purposes whatsoever, and neither the Owner Trustee, the Certificate Registrar
nor any agent of any thereof shall be bound by any notice to the contrary.
SECTION 3.7. Access to List of Certificateholders' Names and Addresses.
The Owner Trustee shall furnish or cause to be furnished to the Depositor within
fifteen (15) days after receipt by the Owner Trustee of a request therefor from
the Depositor in writing, a list, in such form as the Depositor may reasonably
require, of the names and addresses of the Certificateholders as of the most
recent Record Date. If three or more Certificateholders or one or more
Certificateholders evidencing not less than twenty-five percent (25%) of the
Certificate Balance apply in writing to the Owner Trustee, and such application
states that the applicants desire to communicate with other Certificateholders
with respect to their rights under this Agreement or under the Certificates and
such application is accompanied by a copy of the communication that such
applicants propose to transmit, then the Owner Trustee shall, within five
Business Days after the receipt of such application, afford such applicants
access during normal business hours to the current list of Certificateholders.
Upon receipt of any such application, the Owner Trustee will promptly notify the
Depositor by providing a copy of such application and a copy of the list of
Certificateholders produced in response thereto. Each Certificateholder, by
receiving and holding a Certificate, shall be deemed to have agreed not to hold
any of the Depositor, the Certificate Registrar or the Owner Trustee accountable
by reason of the disclosure of its name and address, regardless of the source
from which such information was derived.
SECTION 3.8. Maintenance of Office or Agency. The Owner Trustee shall
maintain in the City of Boston, Massachusetts, an office or offices or agency or
agencies where Certificates may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Owner Trustee in respect
of the Certificates and the other Basic Documents may be served. The Owner
Trustee initially designates its corporate trust department, One Federal Street,
Boston, Massachusetts, 02211 as such office. The Owner Trustee shall give prompt
written notice to the Depositor and to the Certificateholders of any change in
the location of the Certificate Register or any such office or agency.
SECTION 3.9. Appointment of Certificate Paying Agent. The Certificate
Paying Agent shall make distributions to Certificateholders from the amounts
received from the Indenture Trustee out of the Trust Funds and Accounts pursuant
to Section 5.1 and shall report the amounts of such distributions to the Owner
Trustee. Any Certificate Paying Agent shall have the revocable power to receive
such funds from the Indenture Trustee for the purpose of making the
distributions referred to above. The Owner Trustee may revoke such power and
remove the Certificate Paying Agent for any reason. The Certificate Paying Agent
shall initially be the Owner Trustee, and any co-paying agent chosen by the
Owner Trustee. The Owner Trustee shall furnish the Indenture Trustee notice
identifying each co-paying agent within two days of any such appointment. The
Owner Trustee shall be permitted to resign as Certificate Paying Agent upon 30
days' written notice to the Owner Trustee. In the event that the Owner Trustee
shall no longer be the Certificate Paying Agent, the Owner Trustee shall appoint
a successor to act as Certificate Paying Agent
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(which shall be a bank or trust company); provided that if the Owner Trustee is
unsuccessful in appointing a successor Certificate Paying Agent, the Owner
Trustee may petition a court of competent jurisdiction to appoint a successor
Certificate Paying Agent. The Owner Trustee shall give notice to the Rating
Agencies of the appointment of a successor Certificate Paying Agent. The Owner
Trustee shall cause such successor Certificate Paying Agent or any additional
Certificate Paying Agent appointed by the Owner Trustee to execute and deliver
to the Owner Trustee an instrument in which such successor Certificate Paying
Agent or additional Certificate Paying Agent shall agree with the Owner Trustee
that, as Certificate Paying Agent, such successor Certificate Paying Agent or
additional Certificate Paying Agent will hold all sums, if any, held by it for
payment to the Certificateholders in trust for the benefit of the
Certificateholders entitled thereto until such sums shall be paid to such
Certificateholders. The Certificate Paying Agent shall return all unclaimed
funds to the Owner Trustee and upon removal of a Certificate Paying Agent such
Certificate Paying Agent shall also return all funds in its possession to the
Owner Trustee. The provisions of Sections 7.1, 7.3, 7.4, 7.5 and 8.1 shall apply
to the Owner Trustee also in its role as Certificate Paying Agent and
Certificate Registrar, for so long as the Owner Trustee shall act as Certificate
Paying Agent or Certificate Registrar and, to the extent applicable, to any
other paying agent appointed hereunder. Any reference in this Agreement to the
Certificate Paying Agent shall include any co-paying agent unless the context
requires otherwise.
SECTION 3.10. Disposition by Depositor and NMELC. On and after each
Closing Date, the Depositor shall retain beneficial and record ownership of
Certificates in an amount such that the aggregate amount of Certificates then
owned by the Depositor represents at least one percent (1%) of the Certificate
Balance. On and after each Closing Date, NMELC shall retain beneficial and
record ownership of Certificates in an amount such that the aggregate amount of
Certificates then owned by NMELC represents at least one ninety-ninth (1/99th)
of the aggregate amount of the Certificates then owned by the Depositor.
Any attempted transfer of any Certificate that would reduce such
interest of the Depositor and NMELC below the respective levels described herein
shall be void. The Owner Trustee shall cause any Certificate issued to the
Depositor or to NMELC on the Closing Date (and any Certificate issued in
exchange therefor) to contain a legend stating "THIS CERTIFICATE IS
NONTRANSFERABLE." The right of the Depositor and NMELC to receive the amounts
payable to it in accordance with Section 5.1(a) of this Trust Agreement shall
not be transferable or assignable.
SECTION 3.11. Book-Entry Certificates. The Certificates, upon original
issuance, will be issued in the form of a typewritten Certificate or
Certificates representing Book-Entry Certificates, to be delivered to the
Depository Trust Company, the initial Securities Depository, by, or on behalf
of, the Trust; provided, however, that one Definitive Certificate (as defined
below) of each Class may be issued to the Depositor and NMELC pursuant to
Section 3.10. Such Book-Entry Certificate or Book-Entry Certificates shall
initially be registered on the Certificate Register in the name of Cede & Co.,
the nominee of the initial Securities Depository, and no Certificate Owner
(other than the Depositor and NMELC) will receive a Definitive Certificate
representing such Certificate Owner's interest in such Certificate, except as
provided in Section 3.13. Unless and until definitive, fully registered
Certificates (the "Definitive Certificates") have been issued to Certificate
Owners pursuant to Section 3.13 and except for the Certificates issued to the
Depositor and NMELC pursuant to Section 3.10:
(i) the provisions of this Section shall be in full force and
effect;
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(ii) the Certificate Registrar, the Certificate Paying Agent
and the Owner Trustee shall be entitled to deal with the Securities
Depository for all purposes of this Agreement (including the payment of
principal of and interest on the Certificates and the giving of
instructions or directions hereunder) as the sole Certificateholder and
shall have no obligation to the Certificate Owners;
(iii) to the extent that the provisions of this Section
conflict with any other provisions of this Agreement, the provisions of
this Section shall control;
(iv) the rights of Certificate Owners shall be exercised only
through the Securities Depository and shall be limited to those
established by law and agreements between such Certificate Owners and
the Securities Depository and/or the Securities Depository
Participants. Unless and until Definitive Certificates are issued
pursuant to Section 3.13, the initial Securities Depository will make
book-entry transfers among the Securities Depository Participants and
receive and transmit payments of principal of and interest on the
Certificates to such Securities Depository Participants; and
(v) whenever this Agreement requires or permits actions to be
taken based upon instructions or directions of Certificateholders of
Certificates evidencing a specified percentage of the Certificate
Balance, the Securities Depository shall be deemed to represent such
percentage only to the extent that it has received instructions to such
effect from Certificate Owners and/or Securities Depository
Participants owning or representing, respectively, such required
percentage of the beneficial interest in the Certificates and has
delivered such instructions to the Owner Trustee.
SECTION 3.12. Notices to Securities Depository. Whenever a notice or
other communication to the Certificateholders is required under this Agreement,
unless and until Definitive Certificates shall have been issued to Certificate
Owners pursuant to Section 3.13 and except for the Certificates issued to the
Depositor and to NMELC pursuant to Section 3.10, the Owner Trustee shall give
all such notices and communications specified herein to be given to
Certificateholders to the Securities Depository, and shall have no obligations
to the Certificate Owners.
SECTION 3.13. Definitive Certificates. If (i) the Securities Depository
advises the Owner Trustee that it is no longer willing or able to discharge
properly its responsibilities with respect to the Certificates, and the Owner
Trustee is unable to locate a qualified successor, (ii) the Owner Trustee elects
to terminate the book-entry system through the Securities Depository or (iii)
after the occurrence of an Event of Default, a Servicer Default or an
Administrator Default, Certificate Owners representing beneficial interests
aggregating more than half of the Certificate Balance advise the Securities
Depository (which shall then notify the Owner Trustee) in writing that the
continuation of a book-entry system through the Securities Depository is no
longer in the best interest of the Certificate Owners, then the Owner Trustee
shall cause the Securities Depository to notify all Certificate Owners of the
occurrence of any such event and of the availability of the Definitive
Certificates to Certificate Owners requesting the same. Upon surrender to the
Owner Trustee of the typewritten Certificate or Certificates representing the
Book-Entry Certificates by the Securities Depository, accompanied by
registration instructions, the Owner Trustee shall execute and authenticate the
Definitive Certificates in accordance with the instructions of the Securities
Depository. Neither the Certificate Registrar nor the Owner Trustee shall be
liable for any delay in delivery of such instructions and may conclusively rely
on, and shall be protected in relying on, such instructions. Upon the issuance
of Definitive Certificates, the Owner Trustee shall recognize the registered
holders of the Definitive Certificates as Certificateholders. The Definitive
Certificates shall, at the expense of the Depositor, be printed, lithographed or
engraved or may be produced in any other manner as is reasonably acceptable to
the Owner Trustee, as evidenced by its execution thereof.
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SECTION 3.14. Determination of Interest Rate. Each Class of
Certificates shall accrue interest during each Interest Period at the Interest
Rate set forth in the related Trust Supplement.
SECTION 3.15. No Listing on Securities Market. The Certificates shall
not be listed on any established securities market. For this purpose, an
established securities market includes any national securities exchange
registered under the Securities Exchange Act or exempted from registration
because of the limited volume of transactions, any local exchange, and any over
the counter market characterized by an interdealer quotation system which
regularly disseminates quotations of obligations by identified brokers or
dealer, by electronic means or otherwise.
ARTICLE IV
Actions by Owner Trustee
SECTION 4.1. Prior Notice to Rating Agencies and Certificateholders
with Respect to Certain Matters. With respect to the following matters, the
Owner Trustee shall not take action unless at least thirty days before the
taking of such action, the Owner Trustee shall have notified the Rating Agencies
and the Certificateholders in writing of the proposed action and the
Certificateholders shall not have notified the Owner Trustee in writing prior to
the thirtieth day after such notice is given that such Certificateholders have
withheld consent:
(a) the initiation of any material claim or lawsuit by the
Trust (except claims or lawsuits brought in connection with the
collection of the Financed Loans) and the compromise of any material
action, claim or lawsuit brought by or against the Trust (except with
respect to the aforementioned claims or lawsuits for collection of
Financed Loans);
(b) the amendment of the Indenture or a Terms Supplement by a
supplemental indenture in circumstances where the consent of any
Noteholder is required;
(c) the amendment, change or modification of the
Administration Agreement, except to cure any ambiguity or to amend or
supplement any provision in a manner or add any provision that would
not materially adversely affect the interests of the
Certificateholders; or
(d) the appointment pursuant to the Indenture or a Terms
Supplement of a successor Note Registrar or Indenture Trustee or
pursuant to this Agreement of a successor Certificate Registrar or
Certificate Paying Agent, or the consent to the assignment by the Note
Registrar, Certificate Paying Agent, Indenture Trustee or Certificate
Registrar of its obligations under the Indenture or this Agreement, as
applicable.
SECTION 4.2. Action by Certificateholders with Respect to Certain
Matters. The Owner Trustee shall not have the power, except upon the direction
of the Certificateholders, to (a) remove the Administrator, (b) remove the
Servicer or (c) except as expressly provided in the Basic Documents, sell the
Financed Loans after the termination of the Indenture.
SECTION 4.3. Action by Certificateholders with Respect to Bankruptcy.
The Owner Trustee shall not have the power to commence a voluntary proceeding in
bankruptcy relating to the Trust without the unanimous prior approval of all
Certificateholders (other than the Depositor and NMELC) and the delivery to the
Owner Trustee by each such Certificateholder of a certificate certifying that
such Certificateholder believes that the Trust is insolvent.
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SECTION 4.4. Restrictions on Certificateholders' Power. The
Certificateholders shall not direct the Owner Trustee to take or refrain from
taking any action if such action or inaction would be contrary to any obligation
of the Trust or the Owner Trustee under this Agreement or any of the other Basic
Documents or would be contrary to Section 2.3 hereof nor shall the Owner Trustee
be permitted to follow any such direction, if given.
SECTION 4.5. Majority Control. Except as expressly provided herein, any
action that may be taken by the Certificateholders under this Agreement may be
taken by the Certificateholders of Certificates evidencing more than half of the
Certificate Balance. Except as expressly provided herein, any written notice of
the Certificateholders delivered pursuant to this Agreement shall be effective
if signed by Certificateholders of Certificates evidencing more than half of the
Certificate Balance at the time of the delivery of such notice.
ARTICLE V
Application of Trust Funds; Certain Duties
SECTION 5.1. Application of Trust Funds.
(a) There is hereby established a Fund, to be held by the Owner Trustee
on behalf of the Certificateholders and designated the "Nellie Mae Education
Loan Trust Certificate Fund" (referred to hereafter as the "Certificate Fund").
The Certificate Fund shall be used only for the payment of principal of and
interest on the Certificates, except to the extent otherwise provided in this
Trust Agreement or a related Trust Supplement. The Certificate Fund shall
consist of two Accounts, which are hereby established, to be held by the Owner
Trustee on behalf of the Certificateholders and designated the "Certificate
Interest Account" and the "Certificate Payment Account." Each particular Class
of Certificates shall be identified to a particular Series of Notes pursuant to
Section 3.3 hereof and the related Trust Supplement. The Owner Trustee shall
maintain separate subaccounts within the Certificate Interest Account and the
Certificate Payment Account for each such Class and, after the creation of any
such subaccounts, references in this Trust Agreement to the Certificate Interest
Account or the Certificate Payment Account shall be deemed to refer to the
applicable subaccount.
Moneys received from the Indenture Trustee pursuant to clause fourth of
Section 4.2 of the Indenture or clauses Third and Sixth of Section 4.5(b) of the
Indenture shall be deposited in the Certificate Interest Account. Moneys shall
also be deposited in the Certificate Interest Account from the Certificate
Payment Account as provided below. Moneys on deposit in the Certificate Interest
Account shall be applied by the Owner Trustee to the payment of interest on
Certificates when due (whether on a Distribution Date or upon the prepayment or
payment of the Certificates in accordance with the terms of this Trust Agreement
and the related Trust Supplement) without further authorization or direction.
Moneys received from the Indenture Trustee pursuant to clause fifth of
Section 4.2 of the Indenture, Section 4.5(a) of the Indenture, clause Tenth of
Section 4.5(b) of the Indenture or Section 4.6(b) of the Indenture shall be
deposited in the Certificate Payment Account. Moneys on deposit in the
Certificate Payment Account shall be applied by the Owner Trustee to the payment
of principal of Certificates when due (whether on a Distribution Date or upon
the prepayment or payment of the Certificates in accordance with the terms of
this Trust Agreement and the related Trust Supplement) without further
authorization or direction. Prior to application thereof in accordance with the
preceding sentence, moneys on deposit in the Certificate Payment Account shall
be transferred by the Owner Trustee and used to make up any deficiency in the
Certificate Interest Account.
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Notwithstanding the preceding two paragraphs of this Section 5.1(a), if
a particular Class of Certificates identified with a particular Series of Notes
pursuant to Section 3.3 hereof and the related Terms Supplement has been paid in
full (other than Certificates of such particular Class that are owned by the
Depositor and NMELC), then moneys received by the Owner Trustee from the
Indenture Trustee pursuant to clauses fourth and fifth of Section 4.2 of the
Indenture, clauses Third, Sixth and Tenth of Section 4.5(b) of Indenture and
Section 4.6(b) of the Indenture shall be distributed promptly to the Depositor
and NMELC in proportion to the amount of the Certificates issued to the
Depositor and NMELC pursuant to Section 3.10.
No later than the close of business on the Distribution Date, the
Certificate Paying Agent will distribute to Certificateholders on a pro rata
basis with respect to the payment of interest and pursuant to the procedures set
forth in subsection (e) below with respect to the payment of principal;
provided, however, that if the Owner Trustee receives funds for distribution to
Certificateholders after 12:00 noon on any day it shall use all reasonable
efforts to distribute such funds to Certificateholders on such day but shall not
be liable for any damages if such funds are distributed on the following
Business Day. Notwithstanding the foregoing, all amounts received by the Owner
Trustee from the Indenture Trustee pursuant to clauses Eighth and Eleventh of
Section 4.5(b) of the Indenture shall be distributed promptly to the Depositor
and NMELC in proportion to the amount of the Certificates issued to the
Depositor and NMELC pursuant to Section 3.10. Such distributions shall not
reduce the principal amount of the respective Certificates held by the Depositor
and NMELC and no other Certificateholder shall be entitled to or have a claim
for such amounts.
(b) No later than two Business Days preceding any Distribution Date,
the Owner Trustee shall certify in writing to the Indenture Trustee the amount
of interest, including Deferred Interest, payable on such Distribution Date.
(c) No later than the Business Day following its receipt thereof, the
Owner Trustee shall send to each Certificateholder the statement provided to the
Owner Trustee by the Administrator pursuant to Section 2.3 of the Administration
Agreement relating to such Distribution Date.
(d) In the event that any withholding tax is imposed on the Trust's
payment (or allocations of income) to a Certificateholder, such tax shall reduce
the amount otherwise distributable to the Certificateholder in accordance with
this Section. The Owner Trustee is hereby authorized to and shall, upon receipt
of written instructions of the Administrator identifying the appropriate amount,
retain from amounts otherwise distributable to the Certificateholders sufficient
funds for the payment of any tax that is legally owed by the Trust (but such
authorization shall not prevent the Owner Trustee from contesting any such tax
in appropriate proceedings, and withholding payment of such tax, if permitted by
law, pending the outcome of such proceedings). The amount of any withholding tax
imposed with respect to a Certificateholder shall be treated as cash distributed
to such Certificateholder at the time it is withheld by the Trust to be remitted
to the appropriate taxing authority. If there is a possibility that withholding
tax is payable with respect to a distribution (such as a distribution to a
non-U.S. Certificateholder), the Owner Trustee in its sole discretion may (but
unless otherwise required by law shall not be obligated to) withhold such
amounts in accordance with this paragraph (d). In the event that a
Certificateholder wishes to apply for a refund of any such withholding tax, the
Owner Trustee shall reasonably cooperate with such Certificateholder in making
such claim so long as such Certificateholder agrees to reimburse the Owner
Trustee for any out-of-pocket expenses incurred.
(e) The Certificates shall be subject to optional purchase prepayment
or mandatory principal distribution prior to the applicable Maturity Date upon
the terms and conditions and on such dates as may be set forth in the related
Trust Supplement.
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In the event of the optional purchase prepayment or mandatory
distribution of principal at any time of only part of any Class of Certificates,
moneys available for such prepayment or distribution shall be applied to the
payment of a portion of the principal of each Certificate of such Class in
accordance with the ratio which the outstanding principal amount of such
Certificate bears to the Certificate Balance of such Class. Such ratio will be
expressed as a seven-digit decimal, which will initially be 1.0000000 and will
thereafter decline to reflect the reduction in the Certificate Balance of a
Certificate after such prepayment or distribution (the "Principal Factor").
Following any prepayment or principal distribution in part, the Certificate
Balance of each affected Certificate shall be deemed to be an amount equal to
the original principal amount of such Certificate multiplied by the Principal
Factor.
As provided in the Master Indenture, on any Distribution Date on or
after which the Balance in the applicable Account of the Student Loan Portfolio
Fund is equal to or less than a certain percentage (as specified in the related
Terms Supplement) of the Initial Pool Balance with respect to the applicable
Financed Loans, the Seller may repurchase all such remaining Financed Loans at a
purchase price equal to the outstanding principal balance of such Financed
Loans, plus accrued and unpaid interest. The proceeds of the sale of any such
Financed Loans shall be credited to the applicable subaccount in the Note
Payment Account within the Note Fund and used on such Distribution Date for
mandatory distributions of principal. Pursuant to Section 4.6(b) of the Master
Indenture, after all of the Notes of the applicable Series have been paid in
full, any amounts remaining in the applicable subaccount in the Note Payment
Account shall be transferred to the Owner Trustee. Pursuant to Section 5.1(a)
herein, amounts received by the Owner Trustee pursuant to Section 4.6(b) of the
Master Indenture shall be deposited in the applicable subaccount in the
Certificate Payment Account.
All Certificates shall be subject to mandatory principal distributions
on each Distribution Date as a whole or in part on the terms hereinafter set
forth prior to their respective Maturity Dates, from moneys on deposit in the
applicable subaccount in the Certificate Payment Account with respect to the
payment of principal and in the applicable subaccount in the Certificate
Interest Account with respect to the payment of interest. Accrued interest on
the amount of principal so distributed shall be payable on such Distribution
Date, provided that Deferred Interest shall be payable only to the extent that
funds are available therefor. Mandatory distributions of principal shall occur
as aforesaid at such times, but only at such times, as there shall be in excess
of $5,000 in the Certificate Payment Account of the Certificate Fund on the
third Business Day immediately preceding a Distribution Date.
Except as otherwise provided in the related Trust Supplement, notice of
optional purchase prepayment of Certificates shall be given at the Issuer's
request by the Owner Trustee in the name and for and on behalf of the Issuer not
less than thirty (30) days prior to the date of prepayment. Notice of optional
purchase prepayment of any Certificate shall be given within the time period
specified in the related Trust Supplement by first class mail, postage prepaid,
to the Holders of such Class of Certificates at the address of such Holder as it
appears in the Certificate Register or by transmitting such notice by telex or
telecopier to such Holder who shall have submitted a written request to the
Trustee for notice of optional purchase prepayment by such means, to the telex
or telecopier number set forth in such request. A copy of any notice so
transmitted shall also be mailed to such Holder at the address of such Holder
set forth in the Certificate Register, provided, however, that neither failure
by the Trustee to so mail a copy of such notice nor any defect in such copy
shall affect the validity of such notice so transmitted in accordance herewith
and provided, further, that neither failure by the Trustee to so transmit a copy
of such notice by telex or telecopier or any defect therein shall affect the
validity of such notice so mailed in accordance herewith.
Each notice of optional purchase prepayment shall state (i) the amount
of principal of the Class of the Certificates to be prepaid, the prepayment date
and the applicable Principal Factor (after giving effect to such prepayment or
distribution); (ii) that the interest on the Certificates, or on the principal
amount
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thereof to be prepaid shall cease to accrue from and after such prepayment date;
and (iii) that on the prepayment date there will become due and payable on each
said Certificate the principal amount thereof to be prepaid and the interest
accrued on such principal amount to such date.
If notice of optional purchase prepayment of a Certificate shall have
been duly given as hereinbefore provided and if moneys for the payment of such
Certificate (or of the principal amount thereof subject to such prepayment), and
the interest to accrue to the prepayment date with respect to such Certificate
(or portion thereof) shall be held for the purpose of such payment by the Owner
Trustee, then such Certificate or portion thereof shall, on the prepayment date
designated in such notice, become due and payable, and interest on said
Certificate or portion thereof shall cease to accrue.
All Certificates surrendered pursuant to the provisions of this Section
5.1 shall be cancelled.
SECTION 5.2. Method of Payment. Subject to Section 9.1(c),
distributions required to be made to Certificateholders on any Distribution Date
shall be made to each Certificateholder of record on the applicable Record Date
either by wire transfer, in immediately available funds, to the account of such
Certificateholder at a bank or other entity having appropriate facilities
therefore, if such Certificateholder shall have provided to the Certificate
Registrar appropriate written instructions (which may be standing instructions)
at least five Business Days prior to such Distribution Date and such
Certificateholder's Certificates in the aggregate evidence a denomination of not
less than $1,000,000, or, if not, by check mailed to such Certificateholder at
the address of such Certificateholder appearing in the Certificate Register;
provided, however, that, unless Definitive Certificates have been issued
pursuant to Section 3.13, with respect to Certificates registered on the Record
Date in the name of the nominee of the Securities Depository (initially, such
nominee to be Cede & Co.), distributions will be made by wire transfer in
immediately available funds to the account designated by such nominee.
Notwithstanding the foregoing, the final distribution in respect of any
Certificate (whether on the Maturity Date or otherwise) will be payable only
upon presentation and surrender of such Certificate at the corporate trust
office of the Owner Trustee maintained pursuant to Section 3.8 hereof or such
other location specified in writing to the Certificateholder thereof.
SECTION 5.3. Segregation of Moneys: No Interest. Subject to Section
5.1, moneys received by the Owner Trustee hereunder shall be deposited in the
Certificate Fund and invested in Investment Securities in accordance with
instructions received from the Administrator. The Owner Trustee shall not be
liable for any interest thereon or losses suffered in connection therewith.
SECTION 5.4. Accounting and Reports to the Noteholders,
Certificateholders, the Internal Revenue Service and Others. The Owner Trustee
shall (a) maintain (or cause to be maintained) the books of the Trust on a
calendar year basis on the accrual method of accounting, (b) deliver (or cause
to be delivered) to each Certificateholder (and to each person who was a
Certificateholder at any time during the applicable calendar year), as may be
required by the Code and applicable Treasury Regulations, such information as
may be required (including Schedule K-1) to enable each such Certificateholder
to prepare its Federal and state income tax returns, (c) file (or cause to be
filed) such tax returns relating to the Trust (including a partnership
information return, Internal Revenue Service Form 1065), and make such elections
as may from time to time be required or appropriate under any applicable state
or Federal statute or rule or regulation thereunder so as to maintain the
Trust's characterization as a partnership for Federal income tax purposes, (d)
cause such tax returns to be signed in the manner required by law and (e)
collect (or cause to be collected) any withholding tax as described in and in
accordance with Section 5.1(d) with respect to income or distributions to
Certificateholders. The Owner Trustee shall elect under Section 1278 of the Code
to include in income currently any market discount that accrues with respect to
the Financed Loans. Neither
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the Owner Trustee, nor the Administrator on behalf of the Owner Trustee, shall
make the election provided under Section 754 of the Code. The Owner Trustee
shall be entitled to hire an independent accounting firm to perform the
functions described in this Section 5.4.
SECTION 5.5. Signature on Returns; Tax Matters Partner.
(a) The Owner Trustee shall sign on behalf of the Trust the
tax returns of the Trust unless otherwise required by applicable law.
(b) The Depositor shall be designated the "tax matters
partner" of the Trust pursuant to Section 6231(a)(7)(A) of the Code and
applicable Treasury Regulations.
SECTION 5.6. Capital Accounts. The Trust shall maintain accounts
("Capital Accounts") with respect to each Certificateholder (including the
Depositor and NMELC) in accordance with the following provisions:
(a) Each Certificateholder's Capital Account shall be
increased by the Capital Contributions (as defined below) of such
Certificateholder, such Certificateholder's distributive share of gain
(and any liquidated gain) and any items in the nature of income or gain
which are specially allocated to such Certificateholder pursuant to
Section 2.10 of this Agreement.
(b) Each Certificateholder's Capital Account shall be reduced
by any amount distributed to such Certificateholder (including, in the
case of the Depositor and NMELC, any amount released or otherwise
distributed to the Depositor and NMELC pursuant to clauses Eighth and
Eleventh of Section 4.5(b) of the Indenture) and such
Certificateholder's distributive share of losses and deductions (and
any liquidating loss), including any special allocation pursuant to
Section 2.10.
(c) In the event all or a portion of a Certificate is
transferred in accordance with the terms of this Agreement, the
transferee shall succeed to the Capital Account of the transferor to
the extent it related to such Certificate or a portion thereof.
(d) Notwithstanding the above, the Capital Accounts shall be
adjusted in accordance with the provisions governing the economic
rights of the Certificateholders, as set forth herein and in the Basic
Documents.
"Capital Contribution" means the amount of any cash and the
fair market value of any property contributed to the Trust by a
Certificateholder (including any amounts deemed to be contributed in
connection with the original issuance of the Certificates), including,
in the case of the Depositor, the fair market value of any Financed
Loans deemed to be contributed by the Depositor to the Trust, taking
into account the provisions of Section 707(a)(2)(B) of the Code and the
Regulations thereunder. The foregoing provisions and the other
provisions of this Agreement relating to the maintenance of Capital
Accounts are intended to comply with Section 1.704-1(b) of the Treasury
Regulations and shall be interpreted in a manner consistent therewith.
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ARTICLE VI
Authority and Duties of Owner Trustee
SECTION 6.1. General Authority. The Owner Trustee is authorized and
directed to execute and deliver the Basic Documents to which the Trust is to be
a party and each certificate or other document attached as an exhibit to or
contemplated by the Basic Documents to which the Trust is to be a party, in each
case, in such form as the Depositor shall approve as evidenced conclusively by
the Owner Trustee's execution thereof, and, on behalf of the Trust, to direct
the Indenture Trustee to authenticate and deliver such Notes as may from time to
time be authorized by the Indenture and any related Terms Supplement. The Owner
Trustee is also authorized and directed on behalf of the Trust to acquire and
hold legal title to the Financed Loans from the Depositor or upon the direction
of the Depositor.
In addition to the foregoing, the Owner Trustee is authorized to take
all actions required of the Trust pursuant to the Basic Documents. The Owner
Trustee is further authorized from time to time to take such action as the
Administrator directs or instructs with respect to the Basic Documents
(including, without limitation, the execution thereof) or with respect to the
administration of the Trust.
SECTION 6.2. General Duties. It shall be the duty of the Owner Trustee
to discharge (or cause to be discharged) all its responsibilities pursuant to
the terms of this Agreement and the other Basic Documents to which the Trust is
a party and to administer the Trust in the best interests of the
Certificateholders, subject to and in accordance with the provisions of this
Agreement and the other Basic Documents. Without limiting the foregoing, the
Owner Trustee shall on behalf of the Trust file any claim or claims that may
exist on behalf of the Trust against the Depositor in connection with any claims
paying procedure as part of an insolvency or receivership proceeding involving
the Depositor. Notwithstanding the foregoing, the Owner Trustee shall be deemed
to have discharged its duties and responsibilities hereunder and under the other
Basic Documents to the extent the Administrator has agreed in the Administration
Agreement to perform any act or to discharge any duty of the Owner Trustee
hereunder or under any other Basic Document, and the Owner Trustee shall not be
held liable for the default or failure of the Administrator to carry out its
obligations under the Administration Agreement. Except as expressly provided in
Article V of the Administration Agreement, the Owner Trustee shall have no
obligation to administer, service or collect the Financed Loans or to maintain,
monitor or otherwise supervise the administration, servicing or collection of
the Financed Loans.
SECTION 6.3. Action upon Instruction.
(a) Subject to Article IV, Section 7.1 and in accordance with
the terms of the Basic Documents, the Certificateholders may by written
instruction direct the Owner Trustee in the management of the Trust.
Such direction may be exercised at any time by written instruction of
the Certificateholders pursuant to Article IV.
(b) The Owner Trustee shall not be required to take any action
hereunder or under any other Basic Document if the Owner Trustee shall
have reasonably determined, or shall have been advised by counsel, that
such action is likely to result in liability on the part of the Owner
Trustee or is contrary to the terms hereof or of any other Basic
Document or is otherwise contrary to law.
(c) Except as expressly otherwise provided, whenever the Owner
Trustee is unable to determine the appropriate course of action between
alternative courses of action permitted or required by the terms of
this Agreement or under any other Basic Document, the Owner Trustee
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shall promptly give notice (in such form as shall be appropriate under
the circumstances) to the Certificateholders requesting instruction as
to the course of action to be adopted, and to the extent the Owner
Trustee acts in good faith in accordance with any written instruction
received from the Certificateholders of Certificates evidencing more
than half of the Certificate Balance at the time of delivery of such
instructions, the Owner Trustee shall not be liable on account of such
action to any person. If the Owner Trustee shall not have received
appropriate instruction within 30 days of such notice (or within such
shorter period of time as reasonably may be specified in such notice or
may be necessary under the circumstances) the Owner Trustee may, but
shall be under no duty to, take or refrain from taking such action, not
inconsistent with this Agreement or the other Basic Documents, as it
shall deem to be in the best interests of the Certificateholders, and
shall have no liability to any person for such action or inaction.
(d) If the Owner Trustee is unsure as to the application of
any provision of this Agreement or any other Basic Document or any
agreement entered into by the Owner Trustee on behalf of the Trust or
any such provision is ambiguous as to its application, or is, or
appears to be, in conflict with any other applicable provision, or if
this Agreement permits any determination by the Owner Trustee or is
silent or is incomplete as to the course of action that the Owner
Trustee is required to take with respect to a particular set of facts,
the Owner Trustee may give notice (in such form as shall be appropriate
under the circumstances) to the Certificateholders requesting
instruction and, to the extent that the Owner Trustee acts or refrains
from acting in good faith in accordance with any such instruction
received from Certificateholders of Certificates evidencing more than
half of the Certificate Balance at the time of delivery of such
instructions, the Owner Trustee shall not be liable, on account of such
action or inaction, to any person. If the Owner Trustee shall not have
received appropriate instruction within 30 days of such notice (or
within such shorter period of time as reasonably may be specified in
such notice or may be necessary under the circumstances) the Owner
Trustee may, but shall be under no duty to, take or refrain from taking
such action, not inconsistent with this Agreement or the other Basic
Documents or such other agreements, as it shall deem to be in the best
interests of the Certificateholders, and shall have no liability to any
person for such action or inaction.
SECTION 6.4. No Duties Except as Specified in this Agreement or in
Instructions. The Owner Trustee shall not have any duty or obligation to manage,
make any payment with respect to, register, record, sell, service, dispose of or
otherwise deal with the Trust Estate, or to otherwise take or refrain from
taking any action under, or in connection with, any document contemplated hereby
to which the Owner Trustee is a party, except as expressly provided by the terms
of this Agreement or in any document or written instruction received by the
Owner Trustee pursuant to Section 6.3 hereof. No implied duties or obligations
shall be read into this Agreement or any other Basic Document against the Owner
Trustee. The Owner Trustee shall have no responsibility for filing any financing
or continuation statement in any public office at any time or to otherwise
perfect or maintain the perfection of any security interest or lien granted to
it hereunder or to prepare or file any Commission filing for the Trust or to
record this Agreement or any other Basic Document. The Owner Trustee
nevertheless agrees that it will, at its own cost and expense, promptly take all
action as may be necessary to discharge any liens on any part of the Trust
Estate that result from actions by, or claims against, Fleet National Bank in
its individual capacity or as the Owner Trustee that are not related to the
ownership or the administration of the Trust Estate.
SECTION 6.5. No Action Except Under Specified Documents or
Instructions. The Owner Trustee shall not manage, control, use, sell, service,
dispose of or otherwise deal with any part of the Trust Estate except (i) in
accordance with the powers granted to and the authority conferred upon the Owner
Trustee pursuant to this Agreement, (ii) in accordance with the other Basic
Documents to which it is a party and (iii)
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in accordance with any document or instruction delivered to the Owner Trustee
pursuant to Section 6.3 hereof.
SECTION 6.6. Restrictions. The Owner Trustee shall not take any action
(i) that is inconsistent with the purposes of the Trust set forth in Section 2.3
or (ii) that, to the actual knowledge of the Owner Trustee, would result in the
Trust's becoming taxable as a corporation for Federal income tax purposes. The
Certificateholders shall not direct the Owner Trustee to take any action that
would violate the provisions of this Section.
ARTICLE VII
Concerning the Owner Trustee
SECTION 7.1. Acceptance of Trusts and Duties. The Owner Trustee accepts
the trusts hereby created and agrees to perform its duties hereunder with
respect to such trusts but only upon the terms of this Agreement for the benefit
of the Certificateholders. The Owner Trustee also agrees to disburse all moneys
actually received by it constituting part of the Trust Estate under the terms of
this Agreement and the other Basic Documents. The Owner Trustee shall not be
answerable or accountable hereunder or under any other Basic Document under any
circumstances, except (i) for its own willful misconduct or gross negligence or
(ii) in the case of the inaccuracy of any representation or warranty contained
in Section 7.3 expressly made by the Owner Trustee. In particular, but not by
way of limitation (and subject to the exceptions set forth in the preceding
sentence):
(a) the Owner Trustee shall not be liable for any error of
judgment made by a Responsible Officer of the Owner Trustee;
(b) the Owner Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in accordance with the
direction or instructions of the Administrator, the Depositor or
Holders of Certificates evidencing the requisite percentage of the
Certificate Balance;
(c) no provision of this Agreement or any other Basic Document
shall require the Owner Trustee to expend or risk funds or otherwise
incur any financial liability in the performance of any of its rights
or powers hereunder or under any other Basic Document, if the Owner
Trustee shall have reasonable grounds for believing that repayment of
such funds or adequate indemnity against such risk or liability is not
reasonably assured or provided to it;
(d) under no circumstances shall the Owner Trustee be liable
for indebtedness evidenced by or arising under any of the Basic
Documents, including the principal of and interest on the Notes or for
any amounts owing under the Certificates;
(e) the Owner Trustee shall not be responsible for or in
respect of the validity or sufficiency of this Agreement or for the due
execution hereof by the Depositor or for the form, character,
genuineness, sufficiency, value or validity of any of the Trust Estate
or for or in respect of the validity or sufficiency of the Basic
Documents, other than the certificate of authentication on the
Certificates, and the Owner Trustee shall in no event assume or incur
any liability, duty or obligation to any Noteholder or to any
Certificateholder, other than as expressly provided for herein and in
the other Basic Documents;
(f) the Owner Trustee shall not be liable for the action or
inaction, default or misconduct of the Depositor, Administrator,
Servicer or the Indenture Trustee under this Agreement
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or any of the other Basic Documents or otherwise and the Owner Trustee
shall have no obligation or liability to perform the obligations of the
Trust under this Agreement or the other Basic Documents that are
required to be performed by the Administrator under the Administration
Agreement, the Indenture Trustee under the Indenture or the Servicer
under the Servicing Agreement; and
(g) the Owner Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Agreement, or to
institute, conduct or defend any litigation under this Agreement or
otherwise or in relation to this Agreement or any other Basic Document,
at the request, order or direction of any of the Certificateholders,
unless such Certificateholders have offered to the Owner Trustee
security or indemnity satisfactory to it against the costs, expenses
and liabilities that may be incurred by the Owner Trustee therein or
thereby. The right of the Owner Trustee to perform any discretionary
act enumerated in this Agreement or in any other Basic Document shall
not be construed as a duty, and the Owner Trustee shall not be
answerable for other than its negligence or willful misconduct in the
performance of any such act.
SECTION 7.2. Furnishing of Documents. The Owner Trustee shall furnish
to the Certificateholders promptly upon receipt of a written request therefor,
duplicates or copies of all reports, notices, requests, demands, certificates,
financial statements and any other instruments furnished to the Owner Trustee
under the Basic Documents. On each Distribution Date, the Owner Trustee shall
provide to each Certificateholder of record as of the related Record Date the
information provided by the Administrator to the Owner Trustee on the related
Distribution Date pursuant to Section 2.3 of the Administration Agreement.
SECTION 7.3. Representations and Warranties. The Owner Trustee hereby
represents and warrants to the Depositor, for the benefit of the
Certificateholders, that:
(a) It is a national banking association duly organized and
validly existing in good standing under the laws of the United States.
It has all requisite corporate power and authority to execute, deliver
and perform its obligations under this Agreement.
(b) It has taken all corporate action necessary to authorize
the execution and delivery by it of this Agreement, and this Agreement
will be executed and delivered by one of its officers who is duly
authorized to execute and deliver this Agreement on its behalf, and
when so executed, shall be an enforceable obligation of the Owner
Trustee in accordance with its terms, subject to the effect of
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws relating to or affecting
creditors' rights generally and court decisions with respect thereto
and subject to the application of equitable principles in any
proceeding, whether at law or in equity.
(c) Neither the execution nor the delivery by it of this
Agreement, nor the consummation by it of the transactions contemplated
hereby nor compliance by it with any of the terms or provisions hereof
will, to its knowledge, contravene any Federal or Massachusetts state
law, governmental rule or regulation governing the banking or trust
powers of the Owner Trustee or any judgment or order binding on it, or
constitute any default under its charter documents or by-laws or any
indenture, mortgage, contract, agreement or instrument to which it is a
party or by which any of its properties may be bound.
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SECTION 7.4. Reliance; Advice of Counsel.
(a) The Owner Trustee shall incur no liability to anyone in
acting upon any signature, instrument, direction, notice, resolution,
request, consent, order, certificate, report, opinion, bond, or other
document or paper believed by it to be genuine and believed by it to be
signed by the proper party or parties. The Owner Trustee may accept a
certified copy of a resolution of the board of directors or other
governing body of any corporate party as conclusive evidence that such
resolution has been duly adopted by such body and that the same is in
full force and effect. As to any fact or matter the method of the
determination of which is not specifically prescribed herein, the Owner
Trustee may for all purposes hereof rely on a certificate, signed by
the president or any vice president or by the treasurer or other
authorized officers of the relevant party, as to such fact or matter
and such certificate shall constitute full protection to the Owner
Trustee for any action taken or omitted to be taken by it in good faith
in reliance thereon.
(b) In the exercise or administration of the trusts hereunder
and in the performance of its duties and obligations under this
Agreement or the other Basic Documents, the Owner Trustee (i) may act
directly or through its agents, including the Administrator, or
attorneys pursuant to agreements entered into with any of them, and the
Owner Trustee shall not be liable for the conduct or misconduct of such
agents or attorneys if such agents or attorneys shall have been
selected by the Owner Trustee with reasonable care or by the
Administrator or Depositor, and (ii) may consult with counsel,
accountants and other skilled persons to be selected with reasonable
care and employed by it or selected and employed by the Administrator
or Depositor. The Owner Trustee shall not be liable for anything done,
suffered or omitted in good faith by it in accordance with the opinion
or advice of any such counsel, accountants or other such persons and
not contrary to this Agreement or any other Basic Document.
SECTION 7.5. Not Acting in Individual Capacity. Except for the
representations and warranties set forth in Section 7.3, in accepting the trusts
hereby created, Fleet National Bank acts solely as Owner Trustee hereunder and
not in its individual capacity and all persons having any claim against the
Owner Trustee by reason of the transactions contemplated by this Agreement or
any other Basic Document shall look only to the Trust Estate for payment or
satisfaction thereof.
SECTION 7.6. Owner Trustee Not Liable for Certificates or Financed
Loans. The recitals contained herein and in the Certificates (other than the
signature of the Owner Trustee on the Certificates) shall be taken as the
statements of the Depositor and the Owner Trustee assumes no responsibility for
the correctness thereof. The Owner Trustee makes no representations as to the
validity or sufficiency of this Agreement, the Certificates or any other Basic
Document (other than the signature of and authentication by the Owner Trustee on
the Certificates) or the Notes, or of any Financed Loan or related documents.
The Owner Trustee shall at no time have any responsibility or liability for or
with respect to the sufficiency of the Trust Estate or its ability to generate
the payments to be distributed to Certificateholders under this Agreement or the
Noteholders under the Indenture, including without limitation, the existence and
contents of any computer or other record of any Financed Loan; the validity of
the assignment of any Financed Loan to the Trust; the completeness of any
Financed Loan; the performance or enforcement (except as expressly set forth in
any Basic Document) of any Financed Loan; the compliance by the Administrator or
Depositor or the Indenture Trustee with any warranty or representation or
covenant made under any Basic Document or in any related document or the
accuracy of any such warranty or representation or any action or inaction of the
Depositor, Administrator or the Indenture Trustee taken in the name of the Owner
Trustee; and the failure of the Financed Loans to be serviced in conformity with
the Servicing Agreement.
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SECTION 7.7. Owner Trustee May Own Certificates and Notes. The Owner
Trustee in its individual or any other capacity may become the owner or pledgee
of the Certificates or Notes and may deal with the Depositor, the Administrator
and the Indenture Trustee and the Servicer in banking or trust transactions with
the same rights as it would have if it were not Owner Trustee, including serving
as a trustee of other trusts dealing in any student loans, including trusts
which purchase student loans from the Trust.
ARTICLE VIII
Compensation of Owner Trustee
SECTION 8.1. Owner Trustee's Fees and Expenses. The Owner Trustee shall
receive as compensation for its services, a fee equal to the amount agreed upon
in writing between the Administrator and the Owner Trustee at the times set
forth in the Administration Agreement and the Owner Trustee shall be entitled to
be reimbursed by the Depositor or the Administrator for all reasonable
out-of-pocket expenses incurred by it hereunder.
SECTION 8.2. Payments to the Owner Trustee. Any amount paid to the
Owner Trustee for services rendered pursuant to Section 8.1 hereof or pursuant
to the Administration Agreement shall be deemed not to be a part of the Trust
Estate immediately after such payment.
ARTICLE IX
Termination of Trust Agreement
SECTION 9.1. Termination of Trust Agreement.
(a) This Trust Agreement and the Trust shall terminate upon
the earlier of (i) the final distribution by the Owner Trustee of all
moneys or other property or proceeds of the Trust Estate in accordance
with the terms of the Indenture, any related Terms Supplement, the
Administration Agreement, Article V herein and any Trust Supplement,
whether at the Certificate Maturity Date or otherwise, (ii) the
expiration of 21 years from the death of the last survivor of the
descendants of Joseph P. Kennedy, the late Ambassador of the United
States to the Court of St. James, living on the date hereof, and (iii)
the time provided in Section 9.2. The bankruptcy, liquidation,
dissolution, death or incapacity of any Certificateholder, other than
the Depositor as described in Section 9.2, shall not (x) operate to
terminate this Agreement or the Trust, nor (y) entitle such
Certificateholder's legal representatives or heirs to claim an
accounting or to take any action or proceeding in any court for a
partition or winding up of all or any part of the Trust or Trust Estate
nor (z) otherwise affect the rights, obligations and liabilities of the
parties hereto.
(b) Except as provided in Section 9.1(a), neither the
Depositor, NMELC nor any Certificateholder shall be entitled to revoke
or terminate the Trust.
(c) Notice of any termination of the Trust, specifying the
Distribution Date upon which the Certificateholders shall surrender
their Certificates to the Certificate Paying Agent for payment of the
final distribution and cancellation, shall be given promptly by the
Owner Trustee by letter to Certificateholders mailed within five
Business Days of receipt of notice of such termination from the
Administrator given pursuant to the Administration Agreement, stating
(i) the Distribution Date upon which final payment of the Certificates
shall be made upon presentation and surrender
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of the Certificates at the office of the Certificate Paying Agent
therein designated, (ii) the amount of any such final payment and (iii)
that the Record Date otherwise applicable to such Distribution Date is
not applicable, payments being made only upon presentation and
surrender of the Certificates at the office of the Certificate Paying
Agent therein specified. The Owner Trustee shall give such notice to
the Certificate Registrar (if other than the Owner Trustee) and the
Certificate Paying Agent at the time such notice is given to
Certificateholders. Upon presentation and surrender of the
Certificates, the Certificate Paying Agent shall cause to be
distributed to Certificateholders amounts distributable on such
Distribution Date pursuant to Section 5.1 and any related Trust
Supplement. Certificates shall cease to accrue any interest as of the
termination date of the Trust.
In the event that all the Certificateholders shall not
surrender their Certificates for cancellation within six months after
the date specified in the above-mentioned written notice, the Owner
Trustee shall give a second written notice to the remaining
Certificateholders to surrender their Certificates for cancellation and
receive the final distribution with respect thereto. If within one year
after the second notice all the Certificates shall not have been
surrendered for cancellation, the Owner Trustee may take appropriate
steps, or may appoint an agent to take appropriate steps, to contact
the remaining Certificateholders concerning surrender of their
Certificates, and the cost thereof shall be paid out of the funds and
other assets that shall remain subject to this Agreement. Any funds
remaining in the Trust after exhaustion of such remedies and no later
than five years after the first such notice shall be distributed by the
Owner Trustee promptly to the Depositor and NMELC in proportion to the
amount of the Certificates issued to the Depositor and NMELC pursuant
to Section 3.10.
SECTION 9.2. Dissolution upon Insolvency of the Depositor.
Notwithstanding the provisions of Chapter 182 of the Massachusetts General Laws,
if an Insolvency Event shall occur with respect to the Depositor, (i) the Trust
created hereunder shall dissolve and (ii) this Agreement shall be terminated in
accordance with Section 9.1 90 days after the date of such Insolvency Event,
unless, before the end of such 90-day period, the Owner Trustee shall have
received written instructions from the Certificateholders (other than the
Depositor and NMELC) representing more than half of the Certificate Balance (not
including the Certificate Balance of Certificates held by the Depositor and
NMELC), to the effect that each such party disapproves of the liquidation of the
Financed Loans and termination of the Trust, in which event the Trust shall
continue in accordance with the Basic Documents. Promptly after the occurrence
of any Insolvency Event which respect to the Depositor, (i) the Depositor shall
give the Indenture Trustee, the Owner Trustee and each Rating Agency written
notice of such Insolvency Event and (ii) the Owner Trustee shall, upon the
receipt of such written notice from the Depositor, give prompt written notice to
the Certificateholders and the Indenture Trustee, of the occurrence of such
event; provided, however, that any failure to give a notice required by this
sentence shall not prevent or delay, in any manner, a termination of the Trust
pursuant to the first sentence of this Section 9.2. Upon a termination of the
Trust pursuant to this Section 9.2, the Owner Trustee shall direct the Indenture
Trustee promptly to sell the assets of the Trust (other than the Trust Funds and
Accounts) in a commercially reasonable manner and on commercially reasonable
terms. The proceeds of such a sale of the assets of the Trust shall be deposited
in the Revenue Fund.
ARTICLE X
Successor Owner Trustees and Additional Owner Trustees
SECTION 10.1. Eligibility Requirements for Owner Trustee. The Owner
Trustee shall at all times be a corporation or association being authorized to
exercise corporate trust powers and hold legal title to the Financed Loans. If
the Owner Trustee shall publish reports of condition at least annually, pursuant
to law
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or to the requirements of the aforesaid supervising or examining authority, then
for the purpose of this Section 10.1, the combined capital and surplus of the
Owner Trustee shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. In case at any time
the Owner Trustee shall cease to be eligible in accordance with the provisions
of this Section 10.1, the Owner Trustee shall resign immediately in the manner
and with the effect specified in Section 10.2.
SECTION 10.2. Resignation or Removal of Owner Trustee. The Owner
Trustee may at any time resign and be discharged from the trusts hereby created
by giving written notice thereof to the Administrator and the Depositor. The
Depositor may dismiss the Owner Trustee or any co-paying agent at any time for
its failure to act in accordance with the terms of this Agreement; provided,
however, that prior to any such dismissal, the Depositor shall have given the
Owner Trustee or the co-paying agent, as the case may be, notice identifying
such failure, and shall have given the Owner Trustee or the co-paying agent, as
the case may be, two Business Days to cure such failure, if such failure relates
to the distribution of funds to Certificateholders, and 30 days to cure all
other failures. Upon receiving such notice of resignation or dismissal, the
Depositor shall promptly appoint a successor Owner Trustee meeting the
eligibility requirements of Section 10.1 by written instrument, in duplicate,
one copy of which instrument shall be delivered to the resigning Owner Trustee
and one copy to the successor Owner Trustee. If no successor Owner Trustee shall
have been so appointed and have accepted appointment within 30 days after the
giving of such notice of resignation or dismissal, the resigning or dismissed
Owner Trustee, as the case may be, may petition any court of competent
jurisdiction for the appointment of a successor Owner Trustee; provided,
however, that such right to appoint or to petition for the appointment of any
such successor shall in no event relieve the resigning or dismissed Owner
Trustee, as the case may be, from any obligations otherwise imposed on it under
the Basic Documents until such successor has in fact assumed such appointment.
If at any time the Owner Trustee shall cease to be eligible in
accordance with the provisions of Section 10.1 and shall fail to resign after
written request therefor by the Depositor, or if at any time an Insolvency Event
with respect to the Owner Trustee shall have occurred and be continuing, then
the Depositor may remove the Owner Trustee. If the Depositor shall remove the
Owner Trustee under the authority of the immediately preceding sentence, the
Depositor shall promptly appoint a successor Owner Trustee by written
instrument, in duplicate, one copy of which instrument shall be delivered to the
outgoing Owner Trustee so removed and one copy to the successor Owner Trustee
and payment of all fees owed to the outgoing Owner Trustee.
Any resignation or removal of the Owner Trustee and appointment of a
successor Owner Trustee pursuant to any of the provisions of this Section shall
not become effective until acceptance of appointment by the successor Owner
Trustee pursuant to Section 10.3 and payment of all fees and expenses owed to
the outgoing Owner Trustee. The Administrator shall provide notice of such
resignation or removal of the Owner Trustee to each of the Rating Agencies.
SECTION 10.3. Successor Owner Trustee. Any successor Owner Trustee
appointed pursuant to Section 10.2 shall execute, acknowledge and deliver to the
Depositor, the Administrator and to its predecessor Owner Trustee an instrument
accepting such appointment under this Agreement, and thereupon the resignation
or removal of the predecessor Owner Trustee shall become effective and such
successor Owner Trustee, without any further act, deed or conveyance, shall
become fully vested with all the rights, powers, duties, and obligations of its
predecessor under this Agreement, with like effect as if originally named as
Owner Trustee. The predecessor Owner Trustee shall upon payment of its fees and
expenses deliver to the successor Owner Trustee all documents, statements,
moneys and properties held by it under this Agreement and the Administrator and
the predecessor Owner Trustee shall execute and deliver such
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instruments and do such other things as may reasonably be required for fully and
certainly vesting and confirming in the successor Owner Trustee all such rights,
powers, duties and obligations.
No successor Owner Trustee shall accept appointment as provided in this
Section 10.3 unless at the time of such acceptance such successor Owner Trustee
shall be eligible pursuant to Section 10.1 and shall have made the
representations and warranties set forth in Section 7.3 to the Depositor, for
the benefit of the Certificateholders.
Upon acceptance of appointment by a successor Owner Trustee pursuant to
this Section, the Administrator shall mail notice of the successor of such Owner
Trustee to all Certificateholders, the Indenture Trustee, the Noteholders, and
the Rating Agencies. If the Administrator shall fail to mail such notice within
10 days after acceptance of appointment by the successor Owner Trustee, the
successor Owner Trustee shall cause such notice to be mailed at the expense of
the Administrator.
SECTION 10.4. Merger or Consolidation of Owner Trustee Any corporation
into which the Owner Trustee may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Owner Trustee shall be a party, or any corporation
succeeding to all or substantially all the corporate trust business of the Owner
Trustee, shall, without the execution or filing of any instrument or any further
act on the part of any of the parties hereto, anything herein to the contrary
notwithstanding, be the successor of the Owner Trustee hereunder; provided that
such corporation shall be eligible pursuant to Section 10.1; provided further
that the Owner Trustee shall mail notice of such merger or consolidation to the
Rating Agencies.
SECTION 10.5. Appointment of Co-Owner Trustee or Separate Owner
Trustee. Notwithstanding any other provisions of this Agreement, at any time,
for the purpose of meeting any legal requirements of any jurisdiction in which
any part of the Trust may at the time be located, the Depositor and the Owner
Trustee acting jointly shall have the power and shall execute and deliver all
instruments to appoint one or more persons approved by the Owner Trustee meeting
the eligibility requirements of clauses (i) and (ii) of Section 10.1, to act as
co-trustee, jointly with the Owner Trustee, or separate trustee or separate
trustees, of all or any part of the Trust Estate, and to vest in such person, in
such capacity, such title to the Trust Estate, or any part thereof, and, subject
to the other provisions of this Section, such powers, duties, obligations,
rights and trusts as the Depositor and the Owner Trustee may consider necessary
or desirable. If the Depositor shall not have joined in such appointment within
15 days after the receipt by it of a request so to do, the Owner Trustee alone
shall have the power to make such appointment. No co-trustee or separate trustee
under this Agreement shall be required to meet the terms of eligibility as a
successor trustee pursuant to clauses (iii), (iv) and (v) of Section 10.1 and no
notice of the appointment of any co-trustee or separate trustee shall be
required pursuant to Section 10.3. The expenses incurred in connection with the
retention of any co-trustee shall be deemed an expense of the Trust to be borne
by the Depositor.
Each separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Owner Trustee shall be conferred upon and exercised or
performed by the Owner Trustee and such separate trustee or co-trustee
jointly (it being understood that such separate trustee or co-trustee
is not authorized to act separately without the Owner Trustee joining
in such act) except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed,
the Owner Trustee shall be incompetent or unqualified to perform such
act or acts, in which event such rights, powers, duties, and
obligations (including the holding of title to the Trust or any portion
thereof in
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any such jurisdiction) shall be exercised and performed singly by such
separate trustee or co-trustee, solely at the direction of the Owner
Trustee;
(ii) no trustee under this Agreement shall be personally
liable by reason of any act or omission of any other trustee under this
Agreement; and
(iii) the Depositor and the Owner Trustee acting jointly may
at any time accept the resignation of or remove any separate trustee or
co-trustee.
Any notice, request or other writing given to the Owner Trustee shall
be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article X. Each separate trustee and co-trustee, upon its
acceptance of the trusts conferred, shall be vested with the estates or property
specified in its instrument of appointment, either jointly with the Owner
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Owner Trustee. Each such instrument shall be filed with the Owner
Trustee and a copy thereof given to the Administrator and to the Depositor.
Any separate trustee or co-trustee may at any time appoint the Owner
Trustee as its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustees
shall die, become incapable of acting, resign or be removed, all its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Owner Trustee, to the extent-permitted by law, without the appointment of a new
or successor trustee.
ARTICLE XI
Miscellaneous
SECTION 11.1. Supplements and Amendments.
(a) This Agreement, including the Exhibits hereto, may be
amended by the Depositor and the Owner Trustee, with prior written
notice to the Rating Agencies, without the consent of any of the
Noteholders or the Certificateholders, (i) to cure any ambiguity, (ii)
to change the registered office of the Trust in Massachusetts set forth
in Section 2.2 hereof, (iii) to correct or supplement any provisions in
this Agreement or for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions in this
Agreement or of modifying in any manner the rights of the Noteholders
or the Certificateholders; provided, however, that such action shall
not, as evidenced by an Opinion of Counsel, adversely affect in any
material respect the interests of any Noteholder or Certificateholder.
(b) This Agreement may also be amended from time to time by
the Depositor and the Owner Trustee, with prior written notice to the
Rating Agencies, (i) with the consent of the Noteholders of Notes
evidencing not less than a majority of the Outstanding Amount of the
Notes and (ii) with the consent of the Certificateholders of
Certificates evidencing not less than a majority of the Certificate
Balance for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Agreement or of
modifying in any manner the rights of the Noteholders or the
Certificateholders; provided, however, that no such amendment shall (a)
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increase or reduce in any manner the amount of, or accelerate or delay
the timing of, collections of payments on Financed Loans or
distributions that shall be required to be made for the benefit of the
Noteholders or the Certificateholders, (b) reduce the aforesaid
percentage of the Outstanding Amount of the Notes and the Certificate
Balance required to consent to any such amendment, without the consent
of all the outstanding Noteholders and Certificateholders or (c) modify
Sections 2.7 or 3.10 or the last sentence of Section 3.2, or any other
Sections without an Opinion of Counsel that such amendment will not
cause the Trust to be taxed as a corporation.
Promptly after the execution of any such amendment or consent,
the Owner Trustee shall furnish written notification of the substance
of such amendment or consent to each Certificateholder, the Indenture
Trustee and each of the Rating Agencies.
It shall not be necessary for the consent of the
Certificateholders, the Noteholders or the Indenture Trustee pursuant
to this Section to approve the particular form of any proposed
amendment or consent, but it shall be sufficient if such consent shall
approve the substance thereof. The manner of obtaining such consents
(and any other consents of Certificateholders provided for in this
Agreement or in any other Basic Document) and of evidencing the
authorization of the execution thereof by Certificateholders shall be
subject to such reasonable requirements as the Owner Trustee may
prescribe.
(c) Prior to the execution of any amendment to this Agreement,
the Owner Trustee shall be entitled to receive and rely upon an Opinion
of Counsel stating that the execution of such amendment is authorized
or permitted by this Agreement. The Owner Trustee may, but shall not be
obligated, to enter into any such amendment which affects the Owner
Trustee's own rights, duties or immunities under this Agreement or
otherwise.
(d) Notwithstanding anything to the contrary contained in this
Section 11.1, or elsewhere in this Agreement, without the consent of
any Certificateholders but with prior notice by the Depositor to the
Rating Agencies, the Depositor and the Owner Trustee (upon written
direction from the Depositor), at any time and from time to time, may
enter into one or more Trust Supplements to authorize and set forth the
terms of any Class of Certificates that have not theretofore been
authorized by a Trust Supplement.
SECTION 11.2. No Legal Title to Trust Estate in Certificateholders. The
Certificateholders shall not have legal title to any part of the Trust Estate.
The Certificateholders shall be entitled to receive distributions with respect
to their undivided beneficial ownership interest therein only in accordance with
Articles V and IX. No transfer, by operation of law or otherwise, of any right,
title, or interest of the Certificateholders to and in their beneficial
ownership interest in the Trust Estate shall operate to terminate this Agreement
or the trusts hereunder or entitle any transferee to an accounting or to the
transfer to it of legal title to any part of the Trust Estate.
SECTION 11.3. Limitations on Rights of Others. Except for Section 2.7,
the provisions of this Agreement are solely for the benefit of the Owner
Trustee, the Depositor, NMELC, the Certificateholders, the Administrator and, to
the extent expressly provided herein, the Indenture Trustee and the Noteholders,
and nothing in this Agreement (other than Section 2.7), whether express or
implied, shall be construed to give to any other person any legal or equitable
right, remedy or claim in the Trust Estate or under or in respect of this
Agreement or any covenants, conditions or provisions contained herein.
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SECTION 11.4. Notices.
(a) Unless otherwise expressly specified or permitted by the terms
hereof, all notices shall be in writing and shall be deemed given upon receipt
by the intended recipient or three Business Days after mailing if mailed by
certified mail, postage prepaid (except that notice to the Owner Trustee shall
be deemed given only upon actual receipt by the Owner Trustee), if to the Owner
Trustee, addressed to its Corporate Trust Office at One Federal Street, Boston,
Massachusetts, 02211, telefax: 617/346-5501; if to the Depositor, addressed to
50 Braintree Hill Park, Suite 300, Braintree, Massachusetts, 02184, telefax:
617/380-3915; or, as to each party, at such other address or facsimile number as
shall be designated by such party in a written notice to each other party.
(b) Any notice required or permitted to be given to a Certificateholder
shall be given (i) by first-class mail, postage prepaid, at the address of such
Certificateholder as shown in the Certificate Register, or (ii) by facsimile if
the Certificate Register contains a facsimile number for such Certificateholder.
Any notice so mailed or sent by facsimile within the time prescribed in this
Agreement shall be conclusively presumed to have been duly given, whether or not
the Certificateholder receives such notice.
SECTION 11.5. 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 11.6. Separate 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 11.7. Successors and Assigns. All covenants and agreements
contained herein shall be binding upon, and inure to the benefit of, the
Depositor, and its successors, NMELC, and its successors, and the Owner Trustee
and its successors, each Certificateholder and its successors and permitted
assigns, all as herein provided. Any request, notice, direction, consent, waiver
or other instrument or action by a Certificateholder shall bind the successors
and assigns of such Certificateholder.
SECTION 11.8. No Petition.
(a) The Depositor and NMELC will not at any time institute against the
Trust any bankruptcy proceedings under any Federal or state bankruptcy or
similar law in connection with any obligations relating to the Certificates, the
Notes, this Agreement or any of the other Basic Documents.
(b) The Owner Trustee (not in its individual capacity but solely as
Owner Trustee), by entering into this Agreement, and each Certificateholder, by
accepting a Certificate, hereby covenant and agree that they will not at any
time institute against the Depositor or the Trust, or join in any institution
against the Depositor or the Trust of any bankruptcy, reorganization,
arrangement, insolvency, receivership or liquidation proceedings, or other
proceedings under any Federal or state bankruptcy or similar law in connection
with any obligations relating to the Certificates or the Notes, this Agreement
or any of the other Basic Documents.
SECTION 11.9. No Recourse. Each Certificateholder by accepting a
Certificate acknowledges that such Certificateholder's Certificates represent
beneficial interests in the Trust only and do not represent interests in or
obligations of the Depositor, NMELC, the Administrator, the Owner Trustee, the
Indenture
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<PAGE> 30
Trustee or any affiliate thereof or any officer, director or employee of any
thereof and no recourse may be had against such parties or their assets, except
as may be expressly set forth in this Agreement, the Certificates or the other
Basic Documents.
SECTION 11.10. 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 11.11. Governing Law. This Agreement shall be construed in
accordance with the laws of the Commonwealth, without reference to its conflict
of law provisions, and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws.
SECTION 11.12. Creation of Trust and Delivery of Trust Agreement. This
Trust Agreement shall be deemed for all purposes executed and delivered at the
Owner Trustee's corporate trust office in the City of Boston, Massachusetts and
the Trust shall be created and effective upon delivery of this Trust Agreement
executed by the Depositor to such office and acceptance thereof by the Owner
Trustee at such office, which acceptance shall be evidenced conclusively by the
Owner Trustee's execution hereof.
Fleet National Bank acts solely as Owner Trustee and not in its
individual capacity and no trustee, employee, shareholder, officer or agent of
Fleet National Bank shall be held personally liable in connection with the
affairs of the Trust.
IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement
to be duly executed by their respective officers hereunto duly authorized, as of
the day and year first above written.
FLEET NATIONAL BANK, not in
its individual capacity
but solely as Owner Trustee
By: /s/ Chi C. Ma
Name: Chi Ma
Title: Assistant Vice President
NELLIE MAE EDUCATION FUNDING , LLC,
as Depositor
By Nellie Mae, Inc. as Class A Manager
By: /s/ John F. Remondi
Name: John F. Remondi
Title: Treasurer
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<PAGE> 31
EXHIBIT A
DEFINITIONS AND USAGE
Definitions
"Account" shall mean any of the accounts established by the Indenture.
"Acquisition Account" shall mean the Account so designated and
established in the Student Loan Acquisition Fund by Section 4.3 of the
Indenture.
"Additional Financed Loans" shall mean the Financed Loans to be
transferred to the Owner Trustee during a Funding Period pursuant to the related
Sales Agreement, each of which will be listed on Schedule A to the related
Transfer Agreement.
"Administration Account" shall mean the Account so designated and
established in the Services Fund by Section 4.7 of the Indenture.
"Administration Agreement" shall mean the Administration Agreement
dated as of June 1, 1996, among the Issuer, the Owner Trustee, the Indenture
Trustee and the Administrator, as amended from time to time.
"Administrator Default" shall have the meaning specified in the
Administration Agreement.
"Administration Fee" shall mean, as of any date of calculation, the sum
owed to the Administrator pursuant to the terms of the Administration Agreement.
"Administration Requirement" shall mean, as of any date of calculation
and with respect to a particular Series, the Administrative Expenses due as of
such date with respect to such Series.
"Administrative Expenses" shall mean the fees and expenses of the
Indenture Trustee, the Owner Trustee, the Authenticating Agent, the
Administrator and the Servicer, provided, however, that the fees and expenses
described shall not exceed any amount specified in the related Terms Supplement.
"Administrator" shall mean Nellie Mae, Inc., a Massachusetts non-profit
corporation, or any successors or assigns.
"Affiliate" shall mean, with respect to any specified person, any other
person controlling or controlled by or under common control with such specified
person. For the purposes of this definition, "control," when used with respect
to any specified person, shall mean the power to direct the management and
policies of such person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise, and the terms "controlling" and
"controlled" shall have meanings correlative to the foregoing.
"Authenticating Agent" shall mean the Indenture Trustee and any bank,
trust company or other financial institution designated by the Indenture Trustee
as authenticating agent for the Indenture Trustee hereunder, or any successor or
successors thereto appointed pursuant to Section 6.8 of the Indenture.
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"Authorized Denominations" shall mean, with respect to the initial
offering of the Securities, $20,000 or any integral multiple thereof, and in all
other respects shall mean $1,000 or any integral multiple thereof.
"Authorized Officer," when used with reference to the Issuer, shall
mean any officer of the Owner Trustee or the Administrator, as applicable, in
matters relating to the Issuer and who is identified on the list of Authorized
Officers delivered by the Owner Trustee to the Indenture Trustee on the Closing
Date relating to the initial issuance of a Series of Notes.
"Balances" when used with reference to any Account or Fund shall mean
the sum of the following assets in or deposited to the credit of such Account or
Fund: (i) Investment Securities computed at the Value of Investment Securities;
(ii) Financed Loans computed at the Outstanding balance of their principal
amounts plus accrued but unpaid interest; and (iii) lawful money of the United
States.
"Basic Documents" shall mean the Trust Agreement, the Indenture, each
Terms Supplement, each Trust Supplement, the Sales Agreement, the Purchase
Agreement, the Administration Agreement, the Servicing Agreement the Custody
Agreement, the Guaranty Agreement and other documents and certificates to be
delivered in connection therewith and all amendments and supplements thereto.
"Benefit Plan" shall mean any (i) employee benefit plan (as defined in
Section 3(3) of ERISA) which is subject to the provisions of Title I of ERISA,
(ii) plans described in Section 4975 (e)(1) of the Code, including individual
retirement accounts described in Section 408(a) of the Code or Keogh plans or
(iii) or any entity (including an insurance company general account) whose
underlying assets include plan assets by reason of a plan's investment in such
entity.
"Book-Entry Certificate" shall mean a beneficial interest in the
Certificates, ownership and transfer of which shall be made through book entries
by a Securities Depository as described in Section 3.11 of the Trust Agreement.
"Business Day" shall mean any day other than a Saturday, Sunday or
other day on which banks in the City of Boston, Massachusetts, or New York, New
York are required or authorized by law or executive order to close.
"Capitalized Interest" shall mean all interest which has been accrued
but not paid on Financed Loans for which the borrower is entitled to elect, and
has elected, to defer payments of principal of and interest on such Loan.
"Certificate" shall mean a certificate evidencing the beneficial
interest of a Certificateholder in the Trust, substantially in the form of
Exhibit B to the Trust Agreement.
"Certificate Balance" shall equal, initially, the Initial Certificate
Balance and, thereafter, shall equal the Initial Certificate Balance increased
by the principal balance of each subsequent Class of Certificates issued
pursuant to a Trust Supplement and reduced by all amounts allocable to principal
previously distributed to Certificateholders. Notwithstanding the foregoing,
where any provision of the Trust Agreement or a Trust Supplement permits or
authorizes Certificateholders holding a specified percentage or amount of the
Certificate Balance to take any action or grant any approval, the holders of the
Certificates shall be deemed to have a Certificate Balance equal to 99%.
"Certificate Fund" shall mean the fund so designated and established by
Section 5.1 of the Trust Agreement.
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"Certificate Interest Account" shall mean the Account so designated and
established in the Certificate Fund by Section 5.1 of the Trust Agreement.
"Certificate Owner" shall mean, with respect to a Book-Entry
Certificate, the person who is the beneficial owner of such Book-Entry
Certificate, as reflected on the books of the Securities Depository, or on the
books of a person maintaining an account with such Securities Depository
(directly as a Securities Depository Participant or as an indirect participant,
in each case in accordance with the rules of such Securities Depository).
"Certificate Paying Agent" shall mean any paying agent or co-paying
agent appointed pursuant to Section 3.9 of the Trust Agreement, which shall
initially be the Owner Trustee.
"Certificate Payment Account" shall mean the Account so designated and
established in the Certificate Fund by Section 5.1 of the Trust Agreement.
"Certificate Interest Rate" shall mean, with respect to any Class of
Certificates, the per annum rate determined as set forth in the related Trust
Supplement.
"Certificate Register" and "Certificate Registrar" shall mean the
register and the registrar appointed pursuant to the Trust Agreement.
"Certificateholder" shall mean a person in whose name a Certificate is
registered in the Certificate Register.
"Certification," "Instruction," "Order," "Request" or "Requisition" of
the Issuer, as the case may be, shall mean, respectively, a certification,
direction, instruction, order, request or requisition which shall, unless
otherwise specifically provided herein, be in writing and signed in the name of
the Issuer by an Authorized Officer.
"Class" shall mean, (i) with respect to any Series of Notes, all Notes
of such Series whose final installment of principal has the same Maturity Date
and (ii) with respect to the Certificates, all Certificates whose final
installment of principal has the same Maturity Date.
"Closing Date" shall mean, with respect to Certificates, the date
identified as such in the related Trust Supplement and, with respect to Notes,
the date identified as such in the related Terms Supplement.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and Treasury Regulations promulgated thereunder.
"Collector" shall mean the Administrator or collection agency retained
by the Administrator to collect amounts outstanding on Financed Loans upon
acceleration after default.
"Commonwealth" shall mean The Commonwealth of Massachusetts.
"Cost of Issuance Account" shall mean the Account so designated and
established in the Services Fund by Section 4.7 of the Indenture.
"Costs of Issuance" for each Series of Notes or Certificates shall mean
all items of expense allocable to the authorization, issuance, sale and delivery
of such Series of Notes or Certificates, including without limitation costs of
planning and feasibility studies, costs of financial advisory, legal, accounting
and
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management services and services of other consultants and professionals and
related charges, fees and disbursements, costs of preparation and reproduction
of documents, costs of preparation and printing of any offering document
relating to the Notes or Certificates, advertising and printing costs, filing
and recording fees, any initial fees and charges of the Indenture Trustee,
Authenticating Agent or Owner Trustee, rating agency fees, costs of preparation,
execution, transportation and safekeeping of Notes or Certificates, and any
other costs, charges or fees incurred in connection with the issuance of the
Notes or Certificates.
"Cumulative Default Rate," with respect to any Series, shall have the
meaning set forth in the related Terms Supplement.
"Custodian," shall mean USA Loan Services, Inc., a Delaware
corporation, its corporate successor or assigns and any other organization with
which the Indenture Trustee and the Issuer have entered into or will enter into
in a custody agreement.
"Custody Agreement" shall mean the agreement to be entered into among
the Indenture Trustee, the Custodian and the Issuer regarding the custody of the
promissory notes signed by the obligors of the Financed Loans.
"Debt Service Reserve Fund" shall mean the fund so designated and
established by Section 4.2 of the Indenture.
"Defaulted Loan" shall mean a Financed Loan which is more than 180 days
delinquent in payment of principal or interest.
"Deferred Interest" with respect to each Series and Class of Notes
shall have the meaning set forth in the related Terms Supplement and with
respect to each Class of Certificates shall have the meaning set forth in the
related Trust Supplement.
"Definitive Certificates" shall have the meaning specified in Section
3.13 of the Trust Agreement.
"Depositor" shall mean the Seller in its capacity as depositor under
the Trust Agreement.
"Distribution Date" shall mean as to each Series and Class of Notes and
to each Class of Certificates, the fifteenth (15th) day of each month.
"Dollar" and "$" shall mean the lawful currency of the United States of
America.
"DTC Representation Letter" shall have the meaning set forth in Section
2.12 of the Indenture.
"Event of Default" shall have the meaning specified in Section 7.1 of
the Indenture.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Financed Loan" shall mean any Loan which, from time to time, is
assigned by the Issuer to the Indenture Trustee to serve as security for the
payment of all amounts due to Noteholders under the Notes and included in the
Student Loan Portfolio Fund. The initial Financed Loans subject to the lien of
the Indenture shall be listed on the Schedule of Financed Loans set forth in
Schedule A to the Sales Agreement. The Financed Loans to be pledged by the
Issuer to the Indenture Trustee in connection with the issuance of
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each additional Series of Notes shall be listed on the Schedule of Financed
Loans appearing on Schedule A to the related Supplemental Sales Agreement. A
master Schedule of Financed Loans listing all Financed Loans shall be maintained
by the Issuer. Each Schedule of Financed Loans shall be amended from time to
time by the Issuer to reflect accurately the Financed Loans then subject to the
lien of the Indenture.
"Fitch" shall mean Fitch Investors Service, Inc. (whose address is One
State Street Plaza, New York, New York 10004) and its corporate successors.
"Fund" shall mean any of the Funds established by the Indenture or the
Trust Agreement.
"Funding Period," with respect to each Series, shall have the meaning
set forth in the related Terms Supplement.
"Guarantor" shall mean TERI or Penn, as applicable or any other
guarantor as specified in the related Terms Supplement; provided that the Trust
shall notify the Rating Agencies prior to entering into any other guaranty
agreement.
"Guaranty Agreement" shall mean the TERI Guaranty Agreement or the Penn
Guaranty Agreement, as applicable, including, in either case, any supplement or
amendment thereto entered into in accordance with the provisions thereof, or any
other guaranty agreement as specified in the related Terms Supplement.
"Holder" or "Holders" shall mean a registered owner of the Notes or the
Certificates, as the context requires.
"Indenture" shall mean the Master Indenture and any Terms Supplement,
each as from time to time amended or supplemented with respect to which the
Notes issued thereunder are still Outstanding.
"Indenture Trust Estate" shall mean (i) all Revenues; (ii) the Balances
on deposit in all subaccounts, Accounts and Funds (whether derived from proceeds
of sale of the Notes, from Revenues or from any other source, excluding the
Certificate Fund); (iii) all rights, title, interest and privileges of the
Issuer as owner of the Financed Loans in and to (a) the Financed Loans,
including all promissory notes evidencing the indebtedness for Financed Loans
and all related documentation, and all rights of the Issuer to receive any and
all payments of any nature and from any source with respect to the Financed
Loans, (b) each Guaranty Agreement insofar as it relates to Financed Loans, (c)
the Administration Agreement, (d) the Servicing Agreement and (e) any Sales
Agreements with the Seller with respect to the Financed Loans; (iv) all products
and proceeds of any of the foregoing; and (v) all other property of every kind
and nature which is now or from time to time hereafter pledged, assigned or
transferred as and for security hereunder to the Indenture Trustee by the Issuer
or by anyone on its behalf.
"Indenture Trustee" shall mean State Street Bank and Trust Company, a
Massachusetts trust company, not in its individual capacity but solely as
Indenture Trustee under the Indenture.
"Independent" shall mean, when used with respect to any specified
person, that the person (a) is in fact independent of the Issuer, any other
obligor upon the Notes, the Seller and any Affiliate of any of the foregoing
persons, (b) does not have any direct financial interest or any material
indirect financial interest in the Issuer, any such other obligor, the Seller or
any Affiliate of any of the foregoing persons and (c) is not connected with the
Issuer, any such other obligor, the Seller or any Affiliate of any of the
foregoing persons as an officer, employee, promoter, underwriter, trustee,
partner, director or person performing similar functions.
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"Independent Certificate" shall mean a certificate or opinion to be
delivered to the Indenture Trustee under the circumstances described in, and
otherwise complying with, the applicable requirements of Section 11.10 of the
Indenture, made by an Independent appraiser or other expert appointed by an
Issuer Order and approved by the Indenture Trustee in the exercise of reasonable
care, and such opinion or certificate shall state that the signer has read the
definition of "Independent" and that the signer is Independent within the
meaning thereof.
"Initial Certificate Balance" shall mean, with respect to any Class of
Certificates, the amount identified as such in the related Trust Supplement.
"Initial Certificate Interest Rate" shall mean, with respect to each
Class of Certificates, the rate identified as such in the related Trust
Supplement.
"Initial Note Interest Rate" shall mean, with respect to each Class of
Notes, the rate identified as such in the related Terms Supplement.
"Initial Period" shall mean, as to any Class of Notes and Class of
Certificates, the period commencing on the Closing Date and continuing with
respect to each Class of Notes, through the day immediately preceding the
Initial Rate Adjustment Date for such Class of Notes, and with respect to each
Class of Certificates, through the day immediately preceding the Initial Rate
Adjustment Date for such Class of Certificates.
"Initial Pool Balance" shall mean, with respect to any Series, the sum
of the related Pool Balance as of the Closing Date, plus the principal balance
of each Additional Financed Loan purchased by the Issuer on each Transfer Date
during the related Funding Period.
"Initial Rate Adjustment Date" shall mean, as to any Class of Notes,
the date specified in the related Terms Supplement, and with respect to any
Class of Certificates, the date specified in the related Trust Supplement.
"Insolvency Event" means, with respect to a specified person, (a) the
filing or entry of a decree or order for relief by a court having jurisdiction
in the premises in respect of such person or any substantial part of its
property in an involuntary case under any applicable Federal or state
bankruptcy, insolvency or other similar law now or hereafter in effect, or
appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator or
similar official for such person or any substantial part of its property, or
ordering the winding-up or liquidation of such person's affairs, and such decree
or order shall remain unstayed and in effect for a period of 60 consecutive
days; or (b) the commencement by such person of a voluntary case under any
applicable Federal or state bankruptcy, insolvency or other similar law now or
hereafter in effect, or the consent by such person to the entry of an order for
relief in an involuntary case under such law, or the consent by such person to
the appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official for such person or any
substantial part of its property, or the making by such person any general
assignment for the benefit of creditors, or the failure by such person generally
to pay its debts as such debts become due, or the taking of action by such
person in furtherance of any of the foregoing.
"Interest Period" shall mean, as to each Series and Class of Notes and
each Class of Certificates, the Initial Period and thereafter each period
commencing on a Rate Adjustment Date and ending on the day before the next Rate
Adjustment Date.
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"Interest Rate" shall mean, with respect to each Class of Notes, the
rate of interest per annum borne by such Class of Notes as set forth in the
related Terms Supplement, and with respect to each Class of Certificates, the
rate of interest per annum borne by such Class of Certificates as set forth in
the related Trust Supplement.
"Investment Securities" shall mean any of the following:
(a) direct obligations of, or obligations on which the timely
payment of the principal of and interest on which are unconditionally
and fully guaranteed by, the United States of America;
(b) interest-bearing time or demand deposits, certificates of
deposit or other similar banking arrangements with any bank, trust
company, national banking association or other depository institution
(including the Indenture Trustee or any of its affiliates), provided
that, at the time of deposit or purchase, (i) if such deposit,
certificate or other arrangement shall be payable in more than one
year, the depository institution shall have senior long-term debt rated
by each Rating Agency in its highest rating category and (ii) if such
deposit, certificate or other arrangement shall be payable in one year
or less, the depository institution shall have short-term debt which is
rated P1 by Moody's (if Moody's is rating such short-term debt) and
F-1+ by Fitch (if Fitch is rating such short-term debt);
(c) bonds, debentures, notes or other evidences of
indebtedness issued or guaranteed by any of the following agencies:
Federal Farm Credit Banks; Federal Home Loan Mortgage Corporation; the
Export-Import Bank of the United States; the Federal National Mortgage
Association; the Tennessee Valley Authority; the Government National
Mortgage Association; the Federal Financing Bank; the Farmers Home
Administration;
(d) with the prior review of the Rating Agencies as to form,
repurchase agreements and reverse repurchase agreements with banks
(which may include the Indenture Trustee or any of its affiliates)
which are members of the Federal Deposit Insurance Corporation, the
outstanding, unsecured long-term debt securities of which are rated Aaa
by Moody's and AAA by Fitch (if Fitch is rating such securities);
(e) overnight repurchase agreements and reverse repurchase
agreements (i) with counterparties the outstanding, unsecured debt
securities of which are rated P1 by Moody's and F1+ by Fitch and (ii)
which are at least 102% collateralized by securities described in
subparagraph (a) of this definition which are held by a third-party
collateral agent in a segregated trust account;
(f) investment agreements or guaranteed investment contracts,
secured by collateral securities or unsecured as the Issuer may
determine, which may be entered into by and among the Issuer, the
Indenture Trustee and any bank, bank holding company, corporation or
any other financial institution whose outstanding, unsecured long term
debt securities are rated AAA by Fitch (if Fitch is rating such
securities) and Aaa by Moody's, or by an insurance company whose
claims-paying ability is so rated, provided further that any such
agreement must:
(i) clearly state the exact entity guarantor,
the value of invested funds guaranteed, the rate of guaranteed
interest, and the termination date;
(ii) contain an unconditional, irrevocable
pledge by the guarantor and be written in favor of the
Indenture Trustee;
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(iii) not be cancelable for failure to pay any
fees or premiums and its enforceability must be warranted;
(iv) provide that demands for funds be honored
on terms and conditions determined by the Issuer and the
issuer of such agreement and be credited to the Indenture
Trustee in immediately available funds;
(v) clearly establish the basis for
compounding or computation of interest, and provide that all
guaranteed interest accrue to the payment date;
(vi) provide that failure to meet collateral
or other provisions shall result in acceleration of the
agreement at the option of the Issuer or of the Indenture
Trustee acting on behalf of the Issuer and provide that merger
or acquisition of the issuer of the agreement, or assumption
of the obligations of the agreement, with or by another entity
if combined with a credit or claims paying ability rating
downgrade below the standards set forth in this subsection (f)
shall result in acceleration of the agreement at the option of
the Issuer or of the Indenture Trustee acting on behalf of the
Issuer (after confirmation by Moody's and Fitch that such
acceleration will not affect the ratings assigned to the
Notes); and may provide that other designated events relating
to the issuer of the agreement or its parent or any related
entity, if combined with a credit or claims paying ability
rating downgrade below the standards set forth in this
subsection (f) shall result in acceleration of the agreement
at the option of the Issuer (or Indenture Trustee acting on
behalf of the Issuer); and
(vii) be accompanied by an Opinion of Counsel,
on which the Indenture Trustee may conclusively rely, stating
that such agreement satisfies the requirements of clauses (i)
through (vi) above;
(g) any debt instrument rated Aaa by Moody's and AAA by Fitch
(if Fitch is rating such debt instrument);
(h) commercial paper rated P1 by Moody's and F1+ by Fitch (if
Fitch is rating such commercial paper);
(i) shares of a money market or mutual fund, provided that the
fund is rated AAAm or AAAm-G by Moody's and Fitch, (if Fitch is rating
such securities); and
(j) any other investment agreement or guaranteed investment
contract approved in writing by each Rating Agency.
Notwithstanding the foregoing, investments described in
subparagraphs (g) and (h) shall not include any "margin security" as such term
is defined in Regulation T of the Board of Governors of the Federal Reserve
System or any "margin stock" as such term is defined in Regulation G, U or X of
the Board of Governors of the Federal Reserve System.
"Issuer" shall mean the Nellie Mae Education Loan Trust established
under the Trust Agreement until a successor replaces it and, thereafter, shall
mean the successor and, for purposes of any provision contained in the Indenture
and required by the TIA, each other obligor of the Notes.
A-8
<PAGE> 39
"Issuer Order" and "Issuer Request" shall mean a written order or
request signed in the name of the Issuer by any one of its Authorized Officers
and delivered to the Indenture Trustee.
"LIBOR Rate" shall mean, with respect to any Class of Notes or Class of
Certificates, the rate per annum equal to (a) the annual rate of interest
published or reported by the Telerate Service (by reference to the screen page
currently designated as "Page 3750" on that service or such other service as may
be nominated by the British Bankers' Association as the information vendor for
the purpose of displaying British Bankers' Association Interest Settlement Rates
for U.S. dollar deposits) as of 11:00 a.m., London time, on the Rate
Determination Date for a one month period, or (b) if such a rate does not appear
on Telerate Page 3750, the "LIBOR Rate" for the given day shall be the
arithmetic mean of the offered rates for dollar deposits for a one month period
commencing on the Rate Determination Date, which rate appears on Reuters LIBO
Page as of 11:00 a.m., London time, on the Rate Determination Date. If the rate
described above does not appear on Telerate Page 3750 and fewer than two rates
appear on Reuters LIBO Page, the "LIBOR Rate" for the applicable Rate
Determination Date shall be determined in good faith by the Indenture Trustee
and the Owner Trustee from such source as it shall determine to be comparable to
Telerate Page 3750 and Reuters LIBO Page.
"LIBOR Rate Certificates" shall mean a Class of Certificates for which
the related Interest Rate is based upon LIBOR.
"LIBOR Rate Notes" shall mean a Class of Notes for which the related
Interest Rate is based upon LIBOR.
"Lien" shall mean a security interest, lien, charge, pledge, equity or
encumbrance of any kind, other than tax liens and other liens, if any, which
attach to the respective Financed Loan by operation of law as a result of any
act or omission.
"Loan" or "Loans" shall mean any loan acquired by the Issuer from the
Seller.
"Master Indenture" shall mean the Master Trust Indenture dated as of
June 1, 1996 between the Issuer and the Indenture Trustee, as amended or
supplemented from time to time.
"Maturity Date" shall mean, as to each Series and Class of Notes, the
stated maturity date identified as such in the related Terms Supplement and, as
to each Class of Certificates, the stated maturity date identified as such in
the related Trust Supplement.
"Minimum Authorized Denomination" shall mean, with respect to the
initial offering of the Securities, $20,000, and in all other respects shall
mean $1,000.
"Moody's" shall mean Moody's Investors Service, Inc. (whose address is
99 Church Street, New York, New York 10007-2796, Attention: ABS Monitoring
Department, and its corporate successors.
"Net Loan Rate" shall mean, with respect to any Series, the rate
identified as such in the related Terms Supplement.
"Noteholder" shall mean any person who shall be the registered owner of
any Note or the duly authorized attorney-in-fact or representative of such
person.
"Note Rate" shall mean, with respect to each Class of Notes, the per
annum rate determined as set forth in the related Terms Supplement.
A-9
<PAGE> 40
"Note Register" and "Note Registrar" have the respective meanings
specified in Section 2.6 of the Indenture.
"Notes" shall mean the Asset-Backed Notes issued pursuant to the Master
Indenture and a related Terms Supplement.
"Note Fund" shall mean the Fund so designated and established by
Section 4.6 of the Indenture.
"Note Interest Account" shall mean the Account so designated and
established in the Note Fund by Section 4.6 of the Indenture.
"Note Payment Account" shall mean the Account so designated and
established in the Note Fund by Section 4.6 of the Indenture.
"Office of the Authenticating Agent" shall mean the Principal Corporate
Trust Operations Office of the Indenture Trustee or any designated
Authenticating Agent.
"Officer's Certificate" shall mean a document signed by an Authorized
Officer of the Issuer either attesting to or acknowledging the circumstances,
representations or other matters therein stated or set forth or directing that
an action be taken by the person to whom such document is addressed.
"Opinion of Counsel" shall mean an opinion in writing of a legal
counsel acceptable to the Issuer, the Indenture Trustee, the Owner Trustee, the
Seller, the Servicer or the Administrator, as applicable.
"Outstanding," (A) when used with respect to Notes, shall refer to any
Notes executed, authenticated, issued and delivered under this Indenture other
than Notes (i) for the transfer or exchange of or in lieu of which other Notes
shall have been authenticated and delivered by the Indenture Trustee pursuant to
the Indenture, (ii) which have been canceled or (iii) which at the time are
deemed not to be Outstanding under the Indenture by reason of the limitation of
Section 6.3 of the Indenture, (B) when used with respect to Certificates, shall
refer to any Certificates executed, authenticated, issued and delivered under
the Trust Agreement other than Certificates (i) for the transfer or exchange of
or in lieu of which other Certificates shall have been authenticated and
delivered by the Owner Trustee pursuant to the Trust Agreement or (ii) which
have been canceled, and (C) when used with respect to Financed Loans, shall mean
the principal balance unpaid as of the applicable date.
"Outstanding Amount" shall mean the aggregate principal amount of all
Notes, or Series or Class of Notes, or all Certificates, or Class of
Certificates, as applicable, Outstanding as of the date of determination.
"Owner Trustee" shall mean Fleet National Bank, a national banking
association, not in its individual capacity but solely as Owner Trustee under
the Trust Agreement.
"Penn" shall mean The Trustees of the University of Pennsylvania.
"Penn Guaranty Agreement" shall mean the Penn Graduate Loan Program
Agreement dated as of September 1, 1992, as amended, between Nellie Mae, Inc.
and Penn, insofar as it pertains to Financed Loans.
"Pool Balance" shall mean, at any time, the aggregate principal balance
of the Financed Loans at the end of the preceding Interest Period (including
accrued interest thereon for such Interest Period to the
A-10
<PAGE> 41
extent such interest will be capitalized), after giving effect to the following,
without duplication: (i) all payments in respect of principal received by the
Trust during such Interest Period from or on behalf of borrowers and Guarantors,
(ii) the principal portion of the purchase price of all Financed Loans purchased
from the Trust for such Interest Period from the Seller, the Administration or
the Servicer, and (iii) the principal portion of all Additional Financed Loans
made from the Pre-Funding Account with respect to such Interest Period.
"Pre-Funding Account" means the account designated as such, established
and maintained pursuant to Section 4.3 of the Indenture.
"Principal Corporate Trust Operations Office" shall mean the principal
corporate trust operations office of the Indenture Trustee in Boston,
Massachusetts, or such other office as may be designated by written notice of
the Indenture Trustee to the Issuer and each Noteholder at the address of such
Noteholder as it appears on the books of registry maintained in accordance with
Section 2.6 of the Indenture.
"Principal Factor" shall have the meaning set forth in Section 3.1(a)
of the Indenture.
"Purchase Agreement" shall mean the Master Terms Purchase Agreement
dated June 1, 1996 between Nellie Mae, Inc. and Nellie Mae Funding, LLC, as
amended from time to time.
"Rate Adjustment Date" shall mean, with respect to each Class of Notes
and each Class of Certificates, the date on which the applicable Interest Rate
for such Class of Notes or Certificates, as appropriate, is effective and shall
mean, with respect to each such Class of Notes and Certificates, the date of
commencement of each related Interest Period.
"Rate Determination Date" shall mean the second Business Day
immediately preceding the Rate Adjustment Date for such Interest Period.
"Rating Agency" shall mean (i) Moody's and (ii) Fitch, if the Notes are
then rated by Fitch, or, if either of them no longer exists and has no
successors, then any other rating agency, if any, of nationally recognized
status then rating the Notes.
"Record Date" shall mean the last day of the month.
"Responsible Officer" shall mean, with respect to the Indenture
Trustee, any officer within the Corporate Trust Office of the Indenture Trustee
with direct responsibility for the administration of the Indenture and the other
Basic Documents on behalf of the Indenture Trustee, including any Vice
President, Assistant Vice President, Assistant Treasurer, Assistant Secretary,
or any other officer of the Indenture Trustee customarily performing functions
similar to those performed by any of the above designated officers.
"Reuters LIBO Page" shall mean the display designated as page "LIBO" on
the Reuter Monitor Money Rates Service (or such other page as may replace the
Reuters LIBO Page on that service for the purpose of displaying London interbank
offered rates of major banks for Dollar deposits).
"Revenue Fund" shall mean the Fund established by Section 4.5 of the
Indenture.
"Revenues" shall mean all revenues, receipts and moneys payable into or
to the credit of the Revenue Fund pursuant to Section 4.5 of the Indenture and
any interest earnings on Investment Securities credited to any other Fund or
Account as provided in Section 4.9 of the Indenture.
A-11
<PAGE> 42
"Sales Agreement" shall mean the Master Terms Sales Agreement dated
June 1, 1996, among the Issuer, the Seller and the Owner Trustee, as amended
from time to time.
"Securities" shall mean the Notes and the Certificates together.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Securities Depository" shall mean an organization registered as a
"clearing agency" pursuant to Section 17A of the Exchange Act and shall
initially be The Depository Trust Company.
"Securities Depository Participant" shall mean a broker, dealer, bank,
other financial institution or other person for whom from time to time a
Securities Depository effects book-entry transfers and pledges of securities
deposited with the Securities Depository.
"Seller" shall mean the Nellie Mae Education Funding, LLC, a Delaware
limited liability company.
"Series" shall mean a separate Series of Notes issued pursuant to the
Master Indenture, which Series may, as provided in the related Terms Supplement,
be divided into two or more Classes.
"Servicer Default" shall mean an "Event of Default" as defined in the
Servicing Agreement.
"Servicer" shall mean USA Group Loan Services, Inc., a Delaware
corporation, its corporate successors and assigns, and any other organization
with which, after notice to the Rating Agencies, the Issuer has entered into or
shall in the future enter into a Servicing Agreement providing for the
administration, servicing and collection of, among others, the Financed Loans.
"Services Fund" shall mean the Fund established by Section 4.7 of the
Indenture.
"Servicing Agreement" shall mean the Servicing Agreement between the
Issuer and USA Group Loan Services, Inc. dated as of June 1, 1996, and any other
similar servicing agreement entered into between the Issuer and a Servicer
providing for the administration, servicing and collection of Financed Loans, in
each case as originally executed and as amended or supplemented from time to
time in accordance with the terms thereof and with the Indenture.
"Servicing Fees" shall mean, as of any date of calculation, the sum
owed to the Servicer pursuant to the terms of the Servicing Agreement.
"Student Loan Acquisition Fund" shall mean the Fund established by
Section 4.3 of the Indenture.
"Student Loan Portfolio Fund" shall mean the Fund established by
Section 4.4 of the Indenture.
"Subaccount" shall mean any of the subaccounts established by the
Indenture and the related Terms Supplement.
"Supplemental Indenture" shall mean any supplement to or amendment of
the Indenture entered into by the Issuer and the Indenture Trustee pursuant to
and in accordance with the provisions of Article 9 of the Indenture.
"Supplemental Purchase Agreement" shall mean any Supplemental Purchase
Agreement between Nellie Mae and the Seller.
A-12
<PAGE> 43
"Supplemental Sales Agreement" shall mean any Supplemental Sales
Agreement among the Seller, the Trust and the Owner Trustee.
"TERI" shall mean The Education Resources Institute, Inc., a
Massachusetts corporation.
"TERI Guaranty Agreement" shall mean the Guaranty Agreement dated as of
__________________, 1996 between the Issuer and TERI.
"Terms Supplement" shall mean each Supplemental Indenture which
authorizes a particular Series of Notes.
"Transfer Agreement" shall mean a duly written assignment and bill of
sale delivered by the Seller to the Owner Trustee and the Indenture Trustee
evidencing the sale of Additional Financed Loans to the Issuer.
"Transfer Date" shall mean each date on which the Issuer purchases
Additional Financed Loans pursuant to a Supplemental Sales Agreement during a
related Funding Period.
"Treasury Regulations" shall mean regulations, including proposed or
temporary regulations, promulgated under the Code. References in any document or
instrument to specific provisions of proposed or temporary regulations shall
include analogous provisions of final Treasury Regulations or other successor
Treasury Regulations.
"Trust Agreement" shall mean the Trust Agreement dated as of June 1,
1996 between the Depositor and the Owner Trustee, as amended and supplemented
from time to time.
"Trust Estate" shall mean all property of the Issuer from time to time,
including all funds held by the Owner Trustee under the Trust Agreement and all
rights of the Owner Trustee and the Trust pursuant to the Servicing Agreement,
the Administration Agreement, the Sales Agreement and any Supplemental Sales
Agreement.
"Trust Indenture Act" or "TIA" shall mean the Trust Indenture Act of
1939 as in force on the date hereof, unless otherwise specifically provided.
"Trust Supplement" shall mean each supplement to the Trust Agreement
that authorizes an issuance of a Class of Certificates.
"Value of Investment Securities" shall mean, as to each Investment
Security, the market value thereof, if available, and, if not, par if purchased
at par, or the lower of cost or amortized value if purchased at other than par,
or, with respect to Investment Securities described in subparagraph (e) of the
definition thereof, the remaining scheduled principal amount of such obligation.
The amortized value of any such obligation purchased at a premium or discount
shall be computed in accordance with generally accepted accounting principles so
as to recognize daily amortization of such premium or discount, provided that
the value of any such obligation which is callable prior to maturity at the
option of the issuer of such obligation shall be no greater than the price at
which such obligation could be called. Valuation made on any particular date
shall include the amount of interest earned or accrued to such date on any such
moneys or investments.
A-13
<PAGE> 44
Usage
Unless the context clearly indicates otherwise, or may otherwise
require, (i) the term "person" includes a firm, partnership, joint venture,
joint stock company, trust (including any beneficiary thereof), association,
corporation (public or private), unincorporated organization, public body,
public agency and a natural person, and shall also include an executor,
administrator, trustee, receiver or other representative; (ii) the terms
"herein," "hereunder," "hereby," "hereto," "hereof" and any similar terms, refer
to the document as a whole and not to any particular section or subdivision
thereof; and (iii) references to specific provisions of any public law or
statute are to such provisions as they may be amended from time to time. The
definitions set forth in this Exhibit A shall include both the singular and the
plural, and the use of any pronoun shall include both the singular and the
plural and shall include all genders.
A-14
<PAGE> 45
EXHIBIT B
[FORM OF CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER (AS
DEFINED BELOW) OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE MAY NOT BE ACQUIRED BY OR FOR THE ACCOUNT OF A BENEFIT
PLAN (AS DEFINED BELOW).
THIS CERTIFICATE IS NOT GUARANTEED OR INSURED BY ANY GOVERNMENTAL
AGENCY.
[THIS CERTIFICATE IS NONTRANSFERABLE.]1
NUMBER $______________________
CUSIP NO.
NELLIE MAE EDUCATION LOAN TRUST
ASSET BACKED CERTIFICATES
evidencing an undivided interest in the Trust, as defined below, the
property of which includes a pool of student loans sold to the Trust by
Nellie Mae Education Funding, LLC.
(This Certificate does not represent an interest in or obligation of
the Depositor or NMI Education Loan Corporation ("NMELC"), the Servicer
(as defined below), the Owner Trustee (as defined below) or any of
their respective affiliates, except to the extent described below.)
THIS CERTIFIES THAT Cede & Co. is the registered owner of [$________]
dollars non-assessable, fully-paid, undivided interest in the Nellie Mae
Education Loan Trust (the "Trust"), a trust formed under the laws of The
Commonwealth of Massachusetts by Nellie Mae Education Funding, LLC (the
"Depositor"). The Trust was created pursuant to a Trust Agreement dated as of
June 1, 1996 (the "Trust Agreement") between the Depositor and Fleet National
Bank, a national banking association, not in its individual capacity but solely
as owner trustee on behalf of the Trust (the "Owner Trustee"), a summary of
certain of the pertinent provisions of which is set forth below. To the extent
not otherwise defined herein, the capitalized terms used herein have the
meanings assigned to them in Exhibit A to the Trust Agreement.
- --------
1 To be included only on the Certificates issued to Nellie Mae Funding,
LLC and NMI Education Loan Corporation on the Closing Date and any
Certificates issued in exchange therefor.
B-1
<PAGE> 46
This Certificate is one of the duly authorized Certificates designated
as "Asset Backed Certificates" (herein called the "Certificates"). This
Certificate is issued under and is subject to the terms, provision and
conditions of the Trust Agreement, to which Trust Agreement the holder of this
Certificate by virtue of the acceptance hereof assents and by which such holder
is bound. The property of the Trust includes a pool of student loans (the
"Financed Loans"), all moneys paid thereunder on or after _______, 1996 (or, in
the case of Financed Loans that constitute Additional Financed Loans, on or
after the date such Additional Financed Loans are acquired, certain bank
accounts and the proceeds thereof and certain other rights under the Trust
Agreement, the Sales Agreement, the Servicing Agreement and the Administration
Agreement and all proceeds of the foregoing. The rights of the holders of the
Certificates to the assets of the Trust are subordinated to the rights of the
holders of the Notes issued under the Indenture dated June 1, 1996 between the
Trust and State Street Bank and Trust Company, as Indenture Trustee, and
designated as "Asset Backed Notes", as set forth in the Trust Agreement,
Indenture and the Administration Agreement.
Under the Trust Agreement, to the extent of funds available therefor,
distributions will be made on the Certificates on each Distribution Date at the
Interest, commencing on [______], 1996, to the person in whose name this
Certificate is registered as of the close of business on the last day of the
month immediately preceding the Distribution Date (such day the "Record Date")
in the manner set forth in the Trust Agreement, the Indenture and the
Administration Agreement. The Maturity Date is [__________].
Each holder of this Certificate acknowledges and agrees that its rights
to receive distributions in respect of this Certificate from available funds are
subordinated to the rights of the Noteholders as described in the Trust
Agreement and Indenture.
It is the intent of the Depositor, NMELC, the Administrator and the
Certificateholders that, solely for Federal income tax purposes, the Trust will
be treated as a partnership and the Certificateholders (including Nellie Mae
Education Funding, LLC and NMELC in their capacity as recipients of
distributions from the excess amounts in the Revenue Fund) will be treated as
partners in that partnership. Nellie Mae Education Funding, LLC, NMELC and the
other Certificateholders by acceptance of a Certificate (and the Certificate
Owners by acceptance of a beneficial interest in a Certificate), agree to treat,
and to take no action inconsistent with the treatment of, the Certificates for
such Federal income tax purposes as partnership interests in the Trust.
Each Certificateholder or Certificate Owner, by its acceptance of a
Certificate or, in the case of a Certificate Owner, a beneficial interest in a
Certificate agrees that such Certificateholder or Certificate Owner, as the case
may be, will not at any time institute against the Depositor or the Trust, or
join in any institution against the Depositor or the Trust, any bankruptcy,
reorganization, arrangement, insolvency, receivership or liquidation
proceedings, or other proceedings under any United States Federal or state
bankruptcy or similar law in connection with any obligations relating to the
Certificates, the Notes, the Trust Agreement or any of the other Basic
Documents.
Distributions on this Certificate will be made as provided in the Trust
Agreement by the Owner Trustee by wire transfer or by check mailed to the
Certificateholder of record in the Certificate Register without the presentation
or surrender of this Certificate or the making of any notation hereon, except
that with respect to Certificates registered on the Record Date in the name of
the nominee of the Securities Depository (initially, such nominee to be Cede &
Co.), payments will be made by wire transfer in immediately available funds to
the account designated by such nominee. Except as otherwise provided in the
Trust Agreement and notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Owner Trustee of the pendency
of such distribution and only upon presentation and surrender of this
Certificate at the office or agency maintained for the purpose of the Owner
Trustee in the City of Boston.
B-2
<PAGE> 47
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon shall have been
executed by an authorized representative of the Owner Trustee or its
authenticating agent, by manual signature, this Certificate shall not entitle
the holder hereof to any benefit under the Trust Agreement or the Administration
Agreement or be valid for any purpose.
The Certificates do not represent an obligation of, or an interest in,
the Depositor, the Administrator, the Owner Trustee, USA Group Loan Services,
Inc., as Servicer (the "Servicer") or any affiliates of any of them, and no
recourse may be had against such parties or their assets, except as may be
expressly set forth herein, in the Trust Agreement or in the other Basic
Documents. In addition, this Certificate is not guaranteed by any governmental
agency or instrumentality and is limited in right of payment to certain
collections respecting the Financed Loans, all as more specifically set forth in
the Trust Agreement. A copy of each of the Trust Agreement, the Sales Agreement,
the Purchase Agreement, the Servicing Agreement, the Indenture and the
Administration Agreement may be examined during normal business hours at the
principal office of the Administrator, and at such other places, if any,
designated by the Administrator, by any Certificateholder upon request.
The Trust Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of the
Depositor and the rights of the Certificateholders under the Trust Agreement at
any time by the Depositor and the Owner Trustee with the consent of the holders
of the Notes and the Certificates each voting as a class evidencing not less
than a majority of the outstanding principal balance of the Notes and the
Certificate Balance. Any such consent by the holder of this Certificate shall be
conclusive and binding on such holder and on all future holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Trust Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders of
any of the Certificates.
As provided in the Trust Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registerable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies maintained by Fleet National Bank in its
capacity as Certificate Registrar, or by any successor Certificate Registrar,
accompanied by a written instrument of transfer in form satisfactory to the
Owner Trustee and the Certificate Registrar duly executed by the holder hereof
or such holder's attorney duly authorized in writing, and thereupon one or more
new Certificates of authorized denominations evidencing the same aggregate
interest in the Trust will be issued to the designated transferee.
The Certificates are issuable only as registered Certificates without
coupons in Authorized Denominations of $20,000 or in integral multiples in
excess thereof; provided, however, that the Certificates issued to Nellie Mae
Education Funding, LLC and NMELC may be issued in such denominations as to
include any residual amount of the Certificate Balance. As provided in the Trust
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of authorized denominations evidencing the
same aggregate denomination, as requested by the holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Owner Trustee or the Certificate Registrar may require payment
of a sum sufficient to cover any tax or governmental charge payable in
connection therewith.
The Owner Trustee and the Certificate Registrar and any agent of the
Owner Trustee and the Certificate Registrar treat the person in whose name this
Certificate is registered as the owner hereof for all
B-3
<PAGE> 48
purposes, and neither the Owner Trustee nor the Certificate Registrar or any
such agent shall be affected by any notice to the contrary.
This Certificate (including any beneficial interests therein) may not
be transferred directly or indirectly to a Benefit Plan. By accepting and
holding this Certificate, the holder hereof shall be deemed to have represented
and warranted that it is not a Benefit Plan.
This Certificate may not be transferred to any person who is not a U.S.
Person, as such term is defined in Section 7701(a)(30) of the Internal Revenue
Code, as amended.
The obligations and responsibilities created by the Trust Agreement and
the Trust created thereby shall terminate upon the payment to Certificateholders
of all amounts required to be paid to them pursuant to the Trust Agreement, the
Indenture and the Administration Agreement and the disposition of all property
held as part of the Trust.
This Certificate shall be construed in accordance with the laws of The
Commonwealth of Massachusetts without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
shall be determined in accordance with such laws.
Fleet National Bank acts solely as Owner Trustee and not in its
individual capacity and no trustee, employee, shareholder, officer or agent of
Fleet National Bank shall be held personally liable in connection with the
affairs of the Trust.
IN WITNESS WHEREOF, the Owner Trustee on behalf of the Trust and not in
its individual capacity has caused this Certificate to be duly executed as of
the date set forth below.
NELLIE MAE EDUCATION LOAN TRUST
By: Fleet National Bank,
not in its individual
capacity but solely as
Owner Trustee,
ATTEST:
By:
Authorized Signatory
Date:
B-4
<PAGE> 49
OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the
within-mentioned Trust Agreement.
FLEET NATIONAL BANK, not in its individual
capacity but solely as Owner Trustee,
By:
--------------------------------
Authorized Representative
Date: [________], 1996 or
By:
--------------------------------
Authorized Representative
B-5
<PAGE> 50
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OR ASSIGNEE
- -------------------------------------------------------------------------------
(Please print or type name and address, including postal zip code, of assignee)
- -------------------------------------------------------------------------------
the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
- --------------------------------------------------Attorney to transfer said
Certificate on the books of the Certificate Registrar, with full power of
substitution in the premises.
Dated:
-------------------------*
Signature Guaranteed:
-------------------------*
* NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Certificate in every particular, without
alteration, enlargement or any change whatever. Such signature must be
guaranteed by a member firm of the New York Stock Exchange or a commercial bank
or trust company.
[END OF FORM OF CERTIFICATE]
B-6
<PAGE> 1
EXHIBIT 4.4
FIRST TRUST SUPPLEMENT
to the
TRUST AGREEMENT
dated as of June 1, 1996
between
NELLIE MAE EDUCATION FUNDING, LLC,
as Depositor
and
FLEET NATIONAL BANK,
as Owner Trustee
Dated as of June 1, 1996
Issuing
$7,700,000
ASSET-BACKED CERTIFICATES
1996-A
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE 1
DEFINITIONS............................................................... 1
SECTION 1.1. Definitions and Usage..................................................... 1
ARTICLE 2
AUTHORIZATION, TERMS AND ISSUANCE......................................... 2
SECTION 2.1. Authorization of Series 1996-A Certificates............................... 2
SECTION 2.2. Purposes.................................................................. 2
SECTION 2.3. Terms of Series 1996-A Certificates Generally............................. 2
SECTION 2.4. Determination of Interest Rate on the Series 1996-A Certificates.......... 3
ARTICLE 3
PAYMENT OF THE SERIES 1996-A CERTIFICATES PRIOR TO MATURITY............... 4
SECTION 3.1. Payment of the Series 1996-A Certificates Prior to Maturity............... 4
ARTICLE 4
ESTABLISHMENT OF 1996-A SUBACCOUNTS AND DISPOSITION OF PROCEEDS........... 4
SECTION 4.1. Establishment of Subaccounts.............................................. 4
SECTION 4.2. Disposition of Proceeds................................................... 5
ARTICLE 5
MISCELLANEOUS............................................................. 5
SECTION 5.1. First Trust Supplement.................................................... 5
SECTION 5.2. Counterparts.............................................................. 5
SECTION 5.3. Governing Law............................................................. 5
SECTION 5.4. Ratification of Trust Agreement........................................... 5
EXHIBIT A FORM OF SERIES 1996-A CERTIFICATE......................................... A-1
</TABLE>
<PAGE> 3
FIRST TRUST SUPPLEMENT
THIS FIRST TRUST SUPPLEMENT, dated as of June 1, 1996, between NELLIE
MAE EDUCATION FUNDING, LLC, a Delaware limited liability company, (the
"Depositor") and FLEET NATIONAL BANK, a national banking association, not in its
individual capacity but solely as owner trustee (the "Owner Trustee") under a
Trust Agreement dated as of June 1, 1996 (the "Trust Agreement") relating to the
Nellie Mae Education Loan Trust, a Massachusetts business trust (the "Trust").
PRELIMINARY STATEMENT
Section 11.1(d) of the Trust Agreement provides, among other things,
that without the consent of any Certificateholders but with prior notice by
Depositor to the Rating Agencies by the Depositor, the Depositor and the Owner
Trustee may enter into a Trust Supplement to authorize and set forth the terms
of a Class of Trust Certificates. The Trust has duly authorized the creation of
a Class of Certificates to be designated the Nellie Mae Education Loan Trust
Asset-Backed Certificates, 1996-A (the "1996-A Certificates"), the Depositor has
delivered the required notice by Depositor to the Rating Agencies and the
Depositor and the Owner Trustee are executing and delivering this First Trust
Supplement in order to provide for the 1996-A Certificates. The 1996-A
Certificates represent undivided interests in the Trust.
ARTICLE 1
DEFINITIONS
SECTION 1.1. DEFINITIONS AND USAGE. Unless the context shall clearly
indicate some other meaning or may otherwise require, capitalized terms not
defined herein are defined in Exhibit A to the Trust Agreement which also
contains rules as to construction that are applicable herein.
"Certificate Interest Rate" shall mean each variable rate of return
annum borne by the 1996-A Certificates for each Interest Period as determined in
accordance with the provisions of Section 2.4 hereof.
"Certificate Spread" shall mean 0.625 percent (0.625%), or such other
amount as may be determined from time to time in accordance with Section 2.4
hereof.
"Closing Date" shall mean with respect to the 1996-A Certificates, July
12, 1996, the date of initial issuance and delivery of the 1996-A Certificates
hereunder.
"Deferred Interest" shall have the meaning set forth in Section 2.4
hereof.
"Initial Period" shall mean the period commencing on the Closing Date
and continuing through August 15, 1996.
"Initial Certificate Interest Rate" shall mean a rate equal to 6.1289%.
"Initial Rate Adjustment Date" shall mean August 15, 1996.
1
<PAGE> 4
"Interest Period" shall mean the Initial Period and thereafter each
period commencing on a Rate Adjustment Date for the 1996-A Certificates and
ending on the day before (i) the next Rate Adjustment Date or (ii) the Maturity
Date of such Class, as applicable.
"Maturity Date" shall mean December 15, 2018.
"Net Loan Rate" shall mean the weighted average interest rate on the
Financed Loans less one and eight-tenths percent (1.8%).
"Rate Adjustment Date" shall mean the date on which the Certificate
Interest Rate is effective and the date of commencement of each related Interest
Period.
"Rate Determination Date" shall mean the second Business Day
immediately preceding the Rate Adjustment Date for such Interest Period.
"Trust Supplement" means this First Trust Supplement, as from time to
time amended or supplemented.
"1996 Financed Loans" shall mean the Financed Loans purchased with the
proceeds of the Series 1996-A Notes and the 1996-A Certificates.
ARTICLE 2
AUTHORIZATION, TERMS AND ISSUANCE
SECTION 2.1. AUTHORIZATION OF SERIES 1996-A CERTIFICATES. There is
hereby authorized by the Trust a single class of 1996-A Certificates designated
the "Nellie Mae Education Loan Trust Asset- Backed Certificates Series 1996-A"
(the "1996-A Certificates") in the aggregate principal amount of $7,700,000. The
1996-A Certificates shall be identified with the Nellie Mae Education Loan Trust
Asset- Backed Notes Series 1996-A.
SECTION 2.2. PURPOSES. The Financed Student Loans will be pledged by
the Trust to the Indenture Trustee pursuant to the terms of the Master
Indenture. The 1996-A Certificates are authorized to finance the acquisition by
the Trust of the Financed Loans and to make deposits into the Funds and
Accounts.
SECTION 2.3. TERMS OF SERIES 1996-A CERTIFICATES GENERALLY. The 1996-A
Certificates shall be issued in fully registered form, in substantially the form
set forth in Exhibit A hereto, with such variations, omissions and insertions as
may be required by the circumstances, as may be required or permitted by the
Trust Agreement and this First Trust Supplement, or be consistent with the Trust
Agreement and this First Trust Supplement and necessary or appropriate to
conform to the rules and requirements of any governmental authority or any usage
or requirement of law with respect thereto.
The 1996-A Certificates may be issued only in Authorized Denominations.
The 1996-A Certificates shall be dated as of the Closing Date. The 1996-A
Certificates shall mature on December 15, 2018, the Maturity Date.
2
<PAGE> 5
The 1996-A Certificates shall be numbered in consecutive numerical
order from A-1 upwards. The 1996-A Certificates shall be subject to prepayment
and mandatory distributions of principal prior to maturity as provided in
Section 5.1 of the Trust Agreement.
Principal of the 1996-A Certificates shall be payable on the Maturity
Date, unless earlier paid as provided herein. Each 1996-A Certificate shall bear
interest at a rate determined in accordance with the provisions and subject to
the limitations set forth in Section 2.4 hereof. Interest shall accrue on the
Certificate Balance from time to time Outstanding until the principal of such
1996-A Certificate has been paid in full or payment has been duly provided for,
as the case may be, and shall accrue from the later of the Closing Date or the
most recent Distribution Date to which interest has been paid or duly provided
for in full and shall be computed on the basis set forth in Section 2.4 hereof.
Interest on the 1996-A Certificates shall be paid on each Distribution Date
(except to the extent that moneys are not available to pay Deferred Interest)
and on each date of payment or prepayment of principal thereof to the extent of
interest accrued on the principal then being paid or prepaid.
Payments of principal of and interest on each 1996-A Certificate shall
be made by the Owner Trustee from its Principal Corporate Trust Operations
Office, in lawful money of the United States, and payment of interest of each
1996-A Certificate shall, if the Holder thereof holds $1,000,000 or more in
aggregate principal amount of 1996-A Certificates, be made by the deposit or
wire transfer of immediately available funds to the credit of an account located
within the United States specified by such Holder in duly executed instructions,
with signature guaranteed in a manner satisfactory to the Owner Trustee,
delivered to the Owner Trustee no less than ten (10) Business Days prior to the
first Distribution Date for which such deposit or wire transfer of payment of
interest is to be effective. If such instructions are not delivered to the Owner
Trustee by the Holder of $1,000,000 or more in aggregate principal amount of
1996-A Certificates in accordance with this paragraph, and for all other
Holders, payment of interest shall be made by check mailed on the applicable
Distribution Date to the Holder's address as it appears on the books of registry
maintained by the Owner Trustee pursuant to Section 3.4 of the Trust Agreement.
Wire transfers to a Holder made pursuant to this Section 2.3 shall be made
without expense to such Holder.
SECTION 2.4. DETERMINATION OF INTEREST RATE ON THE SERIES 1996-A
CERTIFICATES. The 1996- A Certificates shall bear interest determined as
provided in this Section 2.4. During the Initial Period and each Interest Period
thereafter, interest shall accrue daily and shall be computed for the actual
number of days elapsed on the basis of a year consisting of three hundred sixty
(360) days.
The Certificate Interest Rate to be borne by the 1996-A Certificates
during the Initial Period shall be the Initial Rate. The Certificate Interest
Rate to be borne by the 1996-A Certificates during each Interest Period
thereafter shall be determined on each Rate Determination Date for each such
Interest Period and shall be equal to the sum of the LIBOR Rate and the
Certificate Spread, provided, however, that the Certificate Interest Rate borne
by the 1996-A Certificates at any time shall not be greater than eighteen
percent (18%) per annum. Such Certificate Interest Rate shall be determined by
the Owner Trustee and announced to the Issuer by written notice given on each
Rate Determination Date. Such Certificate Interest Rate shall take effect on the
Rate Adjustment Date immediately succeeding such Rate Determination Date.
The determination of the Certificate Interest Rate by the Owner Trustee
shall be conclusive and binding on the Holders of the 1996-A Certificates, the
Issuer and the Owner Trustee absent manifest error. If the Owner Trustee shall
fail to determine the Certificate Interest Rate for the 1996-A Certificates on
any Rate Determination Date pursuant to the preceding sentence, the Certificate
Interest Rate most recently determined for such 1996-A Certificates shall remain
in effect.
3
<PAGE> 6
Notwithstanding anything contained herein to the contrary, in the event
that the Certificate Interest Rate on the 1996-A Certificates for any Interest
Period exceeds the applicable Net Loan Rate, the Certificateholders will receive
interest payments on the 1996-A Certificates for such Interest Period in an
amount equal to the applicable Net Loan Rate; the difference between the
Certificate Interest Rate and, prior to the Maturity Date, the Net Loan Rate for
such an Interest Period shall be deferred ("Deferred Interest") and paid to the
Certificateholders on the next succeeding Distribution Date on which funds are
available therefor. On the last Business Day of each Interest Period, the Issuer
shall notify the Owner Trustee of the Net Loan Rate for such Interest Period.
Notwithstanding the foregoing, the rate of interest on any 1996-A
Certificate for the Initial Period or any Interest Period thereafter shall not
be in excess of the maximum rate of interest which may be charged or collected
by the Holder thereof pursuant to provisions of federal or state law applicable
to such Holder.
ARTICLE 3
PAYMENT OF THE SERIES 1996-A CERTIFICATES PRIOR TO MATURITY
SECTION 3.1 PAYMENT OF THE SERIES 1996-A CERTIFICATES PRIOR TO MATURITY.
(a) Mandatory Principal Distributions. In accordance with Section 5.1
of the Trust Agreement, the 1996-A Certificates are subject to mandatory
principal distributions on each Distribution Date, but only at such times as
there shall be amounts in excess of $5,000 in the 1996-A Subaccount within the
Certificate Payment Account in the Certificate Fund. Principal of the
Certificates shall not be prepaid unless no Series 1996-A Notes remain
Outstanding.
(b) Optional Purchase Payment. On any Distribution Date on or after
which the Balance in the 1996-A Account in the Student Loan Portfolio Fund is
equal to or less than ten percent (10%) of the Initial Pool Balance with respect
to the 1996 Financed Loans, the Seller may repurchase all remaining 1996
Financed Loans at a price equal to the outstanding principal balance of the 1996
Financed Loans, plus accrued and unpaid interest. The proceeds of the sale of
the remaining 1996 Financed Loans shall be credited to the 1996-A Subaccount in
the Note Payment Account within the Note Fund and used on such Distribution Date
to make mandatory principal distributions on the A-2 Notes, if any A-2 Notes
remain Outstanding.
Pursuant to Section 4.6(b) of the Master Indenture, after all of the
Series 1996-A Notes have been paid in full, any amounts remaining in the 1996-A
Subaccount in the Note Payment Account in the Note Fund shall be transferred to
the Owner Trustee. Pursuant to Section 5.1(a) of the Trust Agreement, amounts
received by the Owner Trustee pursuant to Section 4.6(b) of the Master Indenture
shall be deposited in the 1996-A Subaccount in the Certificate Payment Account
in the Certificate Fund to make mandatory principal distributions.
ARTICLE 4
ESTABLISHMENT OF 1996-A SUBACCOUNTS AND DISPOSITION OF PROCEEDS
SECTION 4.1. ESTABLISHMENT OF SUBACCOUNTS. The 1996-A Subaccount within
the Certificate Interest Account and the 1996-A Subaccount within the
Certificate Payment Account are hereby established.
4
<PAGE> 7
SECTION 4.2. DISPOSITION OF PROCEEDS. The proceeds of the 1996-A
Certificates shall be transferred to the Indenture Trustee and shall be applied,
together with the proceeds of the 1996-A Notes, as set forth in the First Terms
Supplement.
ARTICLE 5
MISCELLANEOUS
SECTION 5.1. FIRST TRUST SUPPLEMENT. This First Trust Supplement is
adopted pursuant to the provisions of the Trust Agreement.
SECTION 5.2. COUNTERPARTS. This First Trust Supplement may be
simultaneously executed in several counterparts, each of which shall be an
original and all of which shall constitute but one and the same instrument.
SECTION 5.3. GOVERNING LAW. This First Trust Supplement shall be
governed by and construed in accordance with the laws of the Commonwealth.
SECTION 5.4. RATIFICATION OF TRUST AGREEMENT. As supplemented by this
First Trust Supplement, the Trust Agreement as so supplemented by this First
Trust Supplement shall be read, taken and construed as one and the same
instrument. Each addition to and amendment of the Trust Agreement contained
herein is solely for purposes of the 1996-A Certificates, and shall have no
effect on any other Class of Certificates of Notes issued pursuant to the Trust
Agreement. If any term of this First Trust Supplement conflicts with any term of
the Trust Agreement, this First Trust Supplement shall control for purposes of
the 1996-A Certificates.
Fleet National Bank acts solely as Owner Trustee and not in its
individual capacity and no trustee, shareholder, officer, employee or agent of
Fleet National Bank shall be held personally liable in connection with the
affairs of the Trust.
5
<PAGE> 8
IN WITNESS WHEREOF, the parties hereto have caused this First Trust
Supplement to be duly executed as of the day and year first above written.
NELLIE MAE EDUCATION FUNDING, LLC
By Nellie Mae, Inc. as Class A Manager
By: /s/ John F. Remondi
--------------------------------------
Name: John F. Remondi
Title: Treasurer
FLEET NATIONAL BANK, not in its individual capacity
but solely as Owner Trustee,
By: /s/ Chi C. Ma
--------------------------------------
Name: Chi Ma
Title: Assistant Vice President
6
<PAGE> 9
EXHIBIT A
FORM OF SERIES 1996-A CERTIFICATE
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER (AS
DEFINED BELOW) OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE MAY NOT BE ACQUIRED BY OR FOR THE ACCOUNT OF A BENEFIT
PLAN (AS DEFINED BELOW).
THIS CERTIFICATE IS NOT GUARANTEED OR INSURED BY ANY GOVERNMENTAL
AGENCY.
[THIS CERTIFICATE IS NONTRANSFERABLE.]1
NUMBER $7,700,000
CUSIP NO.
NELLIE MAE EDUCATION LOAN TRUST
ASSET BACKED CERTIFICATES
evidencing an undivided interest in the Trust, as defined below, the
property of which includes a pool of student loans sold to the Trust by
Nellie Mae Education Funding, LLC.
(This Certificate does not represent an interest in or obligation of
the Depositor or NMI Education Loan Corporation ("NMELC") (as defined
below), the Servicer (as defined below), the Owner Trustee (as defined
below) or any of their respective affiliates, except to the extent
described below.)
THIS CERTIFIES THAT Cede & Co. is the registered owner of $7,700,000
dollars non-assessable, fully-paid, undivided interest in the Nellie Mae
Education Loan Trust (the "Trust"), a trust formed under the laws of The
Commonwealth of Massachusetts by Nellie Mae Education Funding, LLC (the
"Depositor"). The Trust was created pursuant to a Trust Agreement dated as of
June 1, 1996 (the "Trust Agreement") between the Depositor and Fleet National
Bank, a national banking association, not in its individual capacity but solely
as owner trustee on behalf of the Trust (the "Owner Trustee"), a summary of
certain of the pertinent provisions of which is set forth below. To the extent
not otherwise defined herein, the capitalized terms used herein have the
meanings assigned to them in Exhibit A to the Trust Agreement.
- --------
1 To be included only on the Certificates issued to Nellie Mae Funding, LLC
and NMI Education Loan Corporation on the Closing Date and any Certificates
issued in exchange therefor.
A-1
<PAGE> 10
This Certificate is one of the duly authorized Certificates designated
as "Asset Backed Certificates" (herein called the "Certificates"). This
Certificate is issued under and is subject to the terms, provision and
conditions of the Trust Agreement, to which Trust Agreement the holder of this
Certificate by virtue of the acceptance hereof assents and by which such holder
is bound. The property of the Trust includes a pool of student loans (the "1996
Financed Loans"), all moneys paid thereunder on or after July 12, 1996 (or, in
the case of Financed Loans that constitute Additional Financed Loans, on or
after the date such Additional Financed Loans are acquired, certain bank
accounts and the proceeds thereof and certain other rights under the Trust
Agreement, the Sales Agreement, the Servicing Agreement and the Administration
Agreement and all proceeds of the foregoing. The rights of the holders of the
Certificates to the assets of the Trust are subordinated to the rights of the
holders of the Notes issued under the Indenture dated June 1, 1996 between the
Trust and State Street Bank and Trust Company, as Indenture Trustee, and
designated as "Asset Backed Notes", as set forth in the Trust Agreement,
Indenture and the Administration Agreement.
Under the Trust Agreement, to the extent of funds available therefor,
distributions will be made on the Certificates on each Distribution Date at the
Certificate Interest Rate (as defined below), commencing on August 15, 1996, to
the person in whose name this Certificate is registered as of the close of
business on the last day of the month immediately preceding the Distribution
Date (such day the "Record Date") in the manner set forth in the Trust Agreement
and the Indenture. The Maturity Date is December 15, 2018.
Each holder of this Certificate acknowledges and agrees that its rights
to receive distributions in respect of this Certificate from available funds are
subordinated to the rights of the Noteholders as described in the Trust
Agreement and the Indenture.
It is the intent of the Depositor, NMELC, the Administrator and the
Certificateholders that, solely for Federal income tax purposes, the Trust will
be treated as a partnership and the Certificateholders (including Nellie Mae
Education Funding, LLC and NMELC in their capacity as recipients of
distributions from the excess amounts in the Revenue Fund) will be treated as
partners in that partnership. Nellie Mae Education Funding, LLC, NMELC and the
other Certificateholders by acceptance of a Certificate (and the Certificate
Owners by acceptance of a beneficial interest in a Certificate), agree to treat,
and to take no action inconsistent with the treatment of, the Certificates for
such Federal income tax purposes as partnership interests in the Trust.
Each Certificateholder or Certificate Owner, by its acceptance of a
Certificate or, in the case of a Certificate Owner, a beneficial interest in a
Certificate agrees that such Certificateholder or Certificate Owner, as the case
may be, will not at any time institute against the Depositor or the Trust, or
join in any institution against the Depositor or the Trust, any bankruptcy,
reorganization, arrangement, insolvency, receivership or liquidation
proceedings, or other proceedings under any United States Federal or state
bankruptcy or similar law in connection with any obligations relating to the
Certificates, the Notes, the Trust Agreement or any of the other Basic
Documents.
Distributions on this Certificate will be made as provided in the Trust
Agreement by the Owner Trustee by wire transfer or by check mailed to the
Certificateholder of record in the Certificate Register without the presentation
or surrender of this Certificate or the making of any notation hereon, except
that with respect to Certificates registered on the Record Date in the name of
the nominee of the Securities Depository (initially, such nominee to be Cede &
Co.), payments will be made by wire transfer in immediately available funds to
the account designated by such nominee. Except as otherwise provided in the
Trust Agreement and notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Owner Trustee of the pendency
of such distribution and only upon presentation and surrender of this
Certificate at the office or agency maintained for the purpose of the Owner
Trustee in the City of Boston, Massachusetts.
A-2
<PAGE> 11
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon shall have been
executed by an authorized representative of the Owner Trustee or its
authenticating agent, by manual signature, this Certificate shall not entitle
the holder hereof to any benefit under the Trust Agreement or the Administration
Agreement or be valid for any purpose.
The Certificates do not represent an obligation of, or an interest in,
the Depositor, the Administrator, the Owner Trustee, USA Group Loan Services,
Inc., as Servicer or any affiliates of any of them, and no recourse may be had
against such parties or their assets, except as may be expressly set forth
herein, in the Trust Agreement or in the other Basic Documents. In addition,
this Certificate is not guaranteed by any governmental agency or instrumentality
and is limited in right of payment to certain collections respecting the
Financed Loans, all as more specifically set forth in the Trust Agreement. A
copy of each of the Trust Agreement, the Sales Agreement, the Purchase
Agreement, the Servicing Agreement, the Indenture and the Administration
Agreement may be examined during normal business hours at the principal office
of the Administrator, and at such other places, if any, designated by the
Administrator, by any Certificateholder upon request.
The Trust Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of the
Depositor and the rights of the Certificateholders under the Trust Agreement at
any time by the Depositor and the Owner Trustee with the consent of the holders
of the Notes and the Certificates each voting as a class evidencing not less
than a majority of the outstanding principal balance of the Notes and the
Certificate Balance. Any such consent by the holder of this Certificate shall be
conclusive and binding on such holder and on all future holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Trust Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the holders of
any of the Certificates.
As provided in the Trust Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registerable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies maintained by Fleet National Bank in its
capacity as Certificate Registrar, or by any successor Certificate Registrar,
accompanied by a written instrument of transfer in form satisfactory to the
Owner Trustee and the Certificate Registrar duly executed by the holder hereof
or such holder's attorney duly authorized in writing, and thereupon one or more
new Certificates of authorized denominations evidencing the same aggregate
interest in the Trust will be issued to the designated transferee.
The Certificates are issuable only as registered Certificates without
coupons in Authorized Denominations of $20,000 or in integral multiples in
excess thereof; provided, however, that the Certificates issued to the Nellie
Mae Education Funding, LLC and NMELC may be issued in such denominations as to
include any residual amount of the Certificate Balance. As provided in the Trust
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of authorized denominations evidencing the
same aggregate denomination, as requested by the holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Owner Trustee or the Certificate Registrar may require payment
of a sum sufficient to cover any tax or governmental charge payable in
connection therewith.
The Owner Trustee and the Certificate Registrar and any agent of the
Owner Trustee and the Certificate Registrar treat the person in whose name this
Certificate is registered as the owner hereof for all
A-3
<PAGE> 12
purposes, and neither the Owner Trustee nor the Certificate Registrar or any
such agent shall be affected by any notice to the contrary.
This Certificate (including any beneficial interests therein) may not
be transferred directly or indirectly to a Benefit Plan. By accepting and
holding this Certificate, the holder hereof shall be deemed to have represented
and warranted that it is not a Benefit Plan.
This Certificate may not be transferred to any person who is not a U.S.
Person, as such term is defined in Section 7701(a)(30) of the Internal Revenue
Code, as amended.
The obligations and responsibilities created by the Trust Agreement and
the Trust created thereby shall terminate upon the payment to Certificateholders
of all amounts required to be paid to them pursuant to the Trust Agreement, the
Indenture and the Administration Agreement and the disposition of all property
held as part of the Trust.
This Certificate shall be construed in accordance with the laws of the
Commonwealth, without reference to its conflict of law provisions, and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with such laws.
Fleet National Bank acts solely as Owner Trustee and not in its
individual capacity and no trustee, shareholder, officer, employee or agent of
Fleet National Bank shall be held personally liable in connection with the
affairs of the Trust.
A-4
<PAGE> 13
IN WITNESS WHEREOF, the Owner Trustee on behalf of the Trust and not in
its individual capacity has caused this Certificate to be duly executed as of
the date set forth below.
NELLIE MAE EDUCATION LOAN TRUST
By: Fleet National Bank,
not in its individual
ATTEST: capacity but solely as
Owner Trustee,
By: By:
------------------------- --------------------------------
Name: Authorized Signatory
Title:
OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This Certificate is one of the Certificates referred to in the within-mentioned
Trust Agreement.
FLEET NATIONAL BANK, not in its individual
capacity but solely as Owner Trustee,
By:
---------------------------------------
Name: Chi Ma
Title: Assistant Vice President
Date: July , 1996
By:
---------------------------------------
Authorized Representative
A-5
<PAGE> 14
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OR ASSIGNEE
- --------------------------------------------------------
(Please print or type name and address, including postal zip code, of assignee)
the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
----------------------------------------------------
Attorney to transfer said Certificate on the books of the Certificate Registrar,
with full power of substitution in the premises.
Dated:
------------------*
Signature Guaranteed:
------------------*
* NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Certificate in every particular, without
alteration, enlargement
or any change whatever. Such signature must be guaranteed by a member firm of
the New York Stock Exchange or a commercial bank or trust company.
[END OF FORM OF 1996-A CERTIFICATE]
A-6
<PAGE> 1
EXHIBIT 99.1
MASTER TERMS PURCHASE AGREEMENT
This Master Terms Purchase Agreement ("Master Purchase Agreement")
dated as of June 1, 1996 between Nellie Mae, Inc. ("Nellie Mae") and Nellie Mae
Education Funding, LLC ("Funding"), shall be effective upon execution by the
parties hereto.
WHEREAS, Nellie Mae is the owner of certain student loans;
WHEREAS, Nellie Mae may desire to sell, transfer, convey and assign its
interest in such loans from time to time and Funding may desire to purchase such
loans from Nellie Mae;
NOW, THEREFORE, in connection with the mutual promises contained
herein, the parties hereto agree as follows:
SECTION 1. TERMS
This Master Purchase Agreement establishes the terms under which Nellie
Mae may sell, transfer, convey and assign and Funding may purchase the Student
Loans (and all obligations of the Borrowers thereunder) specified on each
Purchase Agreement ("Purchase Agreement") as the parties may execute from time
to time pursuant to this Master Purchase Agreement. Each such Purchase Agreement
shall be substantially in the form of Attachment A hereto, incorporating by
reference the terms of this Master Purchase Agreement, and shall be a separate
agreement among Nellie Mae and Funding with respect to the Student Loans covered
by the terms of such Purchase Agreement. If the terms of a Purchase Agreement
conflict with the terms of this Master Purchase Agreement, the terms of such
Purchase Agreement shall supersede and govern with respect to the Student Loans
covered by the terms of such Purchase Agreement. Notwithstanding the foregoing,
to the extent Nellie Mae is deemed to retain any right, title or interest in the
Student Loans, Nellie Mae grants to Funding a security interest therein.
SECTION 2. DEFINITIONS
Capitalized terms used but not otherwise defined herein shall have the
definitions set forth in Exhibit A to the Master Indenture.
For purposes hereof:
(A) "Bill of Sale" means that document executed by an authorized
officer of Nellie Mae which shall set forth the Student Loans offered by Nellie
Mae and accepted for purchase by Funding and which shall sell, transfer, assign
and convey to Funding and its assignees all rights, title and interest of Nellie
Mae in the Student Loans listed on the Bill of Sale and will certify that the
representations and warranties made by Nellie Mae pursuant to Section 5 of this
Master Purchase Agreement are true and correct.
(B) "Borrower" means the obligor on a Student Loan.
(C) "Cutoff Date" means a date agreed to by Nellie Mae and Funding to
use in determining the Principal Balance and accrued interest for purposes of
completing the Student Loan Transmittal Summary Form.
(D) "Delinquent" means the period any payment of principal or interest
due on a Student Loan is overdue.
<PAGE> 2
(E) "Note" means the promissory note of the Borrower and any amendment
thereto evidencing the Borrower's obligation with regard to the Student Loan.
(F) "Principal Balance" means the outstanding principal amount of the
Student Loan, plus accrued interest.
(G) "Purchase Price" means the price paid for the Student Loans as set
forth in the Bill of Sale.
(H) "Qualified Loan" means a Student Loan offered for sale by Nellie
Mae under the Purchase Agreement which as of the Cutoff Date is current or no
more Delinquent than permitted under the Purchase Agreement in payment of
principal or interest, which is owned by Nellie Mae and which, as of the
effective date of the Bill of Sale, is supported by the following documentation:
(a) for each Student Loan:
1. loan application, and any supplement thereto,
2. original promissory note and any addendum thereto or a
certified copy thereof,
(b) for each Student Loan only if applicable:
1. payment history (or similar document) including (i) an
indication of the Principal Balance and the date
through which interest has been paid, each as of the
Cutoff Date and (ii) an accounting of the allocation
of all payments by Borrower or on Borrower's behalf to
principal and interest on the Student Loan,
2. documentation which supports periods of current or
past deferment or past forbearance,
3. a collection history, if the Student Loan was ever in
a delinquent status, including detailed summaries of
contacts and including the addresses or telephone
numbers used in contacting or attempting to contact
Borrower and any endorser,
4. evidence of all requests for skip-tracing assistance
and current address of Borrower, if located,
5. evidence of requests for pre-claims assistance, and
6. a record of any event resulting in a change to or
confirmation of any data regarding the Student Loan.
(I) "Student Loan" means the Note or Notes offered for sale pursuant to
the Purchase Agreement and related documentation together with any guaranties
and other rights relating thereto; provided that "Student "Loan" shall not
include any guaranties relating to such loan unless any such guaranty is
pursuant to a Guaranty Agreement which permits the assignment of the Guarantor's
obligations thereunder.
(J) "Student Loan Transmittal Summary Forms" means the forms provided
to Nellie Mae by Funding and completed by Nellie Mae which list, by Borrower,
the Student Loans subject to the Bill of Sale and the outstanding Principal
Balance and accrued interest thereof as of the Cutoff Date.
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<PAGE> 3
(K) "Trust Student Loans" means Student Loans which have been purchased
for the benefit of the Trust pursuant to a Sales Agreement.
SECTION 3. SALE/PURCHASE
(A) Consummation of Sale and Purchase. The sale and purchase of
Qualified Loans pursuant to a Purchase Agreement shall be consummated upon
Funding's receipt from Nellie Mae of the Bill of Sale and the payment by Funding
to Nellie Mae of the Purchase Price, and when consummated such sale and purchase
shall be effective as of the date of the Bill of Sale. Nellie Mae and Funding
shall use their best efforts to perform promptly their respective obligations
pursuant to such Purchase Agreement.
(B) Settlement of the Purchase Price. On the date of the Bill of Sale,
Funding shall pay Nellie Mae the Purchase Price by wire transfer of immediately
available funds to the account specified by Nellie Mae.
SECTION 4. CONDITIONS TO PURCHASE
(A) Activities Prior to the Purchase Date. Nellie Mae shall provide any
assistance requested by Funding in determining that all required documentation
on the Student Loans is present and correct.
(B) Continued Servicing. Following the execution of each Purchase
Agreement, Nellie Mae shall cause to be serviced all Student Loans subject to
such Purchase Agreement until the date of the Bill of Sale.
(C) Bill of Sale/Student Loan Transmittal Summary Form.
(i) Nellie Mae shall deliver to Funding a Bill of Sale
executed by an authorized officer of Nellie Mae,
covering Student Loans offered by Nellie Mae and
accepted by Funding as set forth thereon, selling,
assigning, transferring and conveying to Funding and
its assignees all right, title and interest of Nellie
Mae in each of the Student Loans, and stating that the
representations and warranties made by Nellie Mae in
Section 5 of this Master Purchase Agreement are true
and correct on and as of the date of the Bill of Sale;
and
(ii) Nellie Mae shall deliver to Funding, within fifteen
days following the execution of each Purchase
Agreement, the Student Loan Transmittal Summary Form
identifying each of the Qualified Loans which is the
subject of the Bill of Sale and setting forth the
unpaid Principal Balance of each such Student Loan.
(D) Endorsement. Nellie Mae shall provide a blanket endorsement in the
form of endorsement provided for in the Purchase Agreement.
At the direction of and in such form as Funding may designate, Nellie
Mae also agrees to individually endorse any Qualified Loan as Funding may
request from time to time.
(E) Officer's Certificate. Nellie Mae shall furnish to Funding an
Officer's Certificate in substantially the form attached hereto, in connection
with the execution of this Master Purchase Agreement and at such other times as
the Officers listed on such certificate shall change.
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<PAGE> 4
(F) Student Loan Transfer Statement. Upon Funding's request, Nellie Mae
shall deliver to Funding one (1) or more Student Loan Transfer Statements
provided by Funding, executed by Nellie Mae and dated the date of the Bill of
Sale. Nellie Mae agrees that Funding may use the Bill of Sale, including the
Student Loan Transmittal Summary Form attached to the Bill of Sale, as official
notification to any Guarantor of the sale by Nellie Mae to Funding of the
Student Loans listed on the Bill of Sale.
(G) Power of Attorney. Nellie Mae hereby grants to Funding an
irrevocable power of attorney, which power of attorney is coupled with an
interest, to individually endorse or cause to be individually endorsed in the
name of Nellie Mae any Qualified Student Loan to evidence the transfer of such
Qualified Student Loan to Funding and to cause to be transferred physical
possession of any Note from Nellie Mae or the Servicer to Funding or any
custodian on their behalf.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF NELLIE MAE AND FUNDING
(A) Nellie Mae represents and warrants to Funding that with respect to
a portfolio of Student Loans as of the date of each Purchase Agreement and Bill
of Sale:
(i) Nellie Mae is duly organized and existing under the
laws of the applicable jurisdiction;
(ii) Nellie Mae has all requisite power and authority to
enter into and to perform the terms of the Purchase
Agreement; and
(iii) Nellie Mae has not, with respect to any Student Loan
purchased under Purchase Agreements executed pursuant
to this Master Purchase Agreement, agree to release
any Guarantor, if any, from any of its contractual
obligations as an insurer of such Student Loan.
(B) Nellie Mae represents and warrants to Funding as to the Student
Loans purchased by Funding under each Purchase Agreement and each Bill of Sale
executed pursuant to this Master Purchase Agreement that:
(i) Nellie Mae has good title to, and is the sole owner
of, the Student Loans, free and clear of all security
interests, liens, charges, claims or encumbrances of
any nature and no right of rescission, offsets,
defenses or counterclaims have been asserted or
threatened with respect to the Student Loans;
(ii) The Student Loans are Qualified Loans and the
description of the Student Loans set forth in the
Purchase Agreement and the Student Loan Transmittal
Summary Form is true and correct;
(iii) Nellie Mae is authorized to sell, assign, convey,
transfer and repurchase the Student Loans; and the
sale, assignment and transfer of such Student Loans is
or, in the case of a Student Loan repurchase by Nellie
Mae, will be made pursuant to and consistent with the
laws and regulations under which Nellie Mae operates,
and will not violate any decree, judgment or order of
any court or agency, or conflict with or result in a
breach of any of the terms, conditions or provisions
of any agreement or instrument to which Nellie Mae is
a party or by which Nellie Mae or its property is
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<PAGE> 5
bound, or constitute a default (or an event which
could constitute a default with the passage of time or
notice or both) thereunder;
(iv) The Student Loans are each in full force and effect in
accordance with their terms and are legal, valid and
binding obligations of the respective Borrowers
thereunder subject to no defenses (except the defenses
of infancy);
(v) Any payments on the Student Loans received by Nellie
Mae which have been allocated to reduction of
principal and interest on such Student Loans have been
allocated on a simple interest basis; the information
with respect to the Student Loans as of the Cutoff
Date as stated on the Student Loan Transmittal Summary
Form is true and correct;
(vi) Due diligence and reasonable care have been exercised
in the making, administering, servicing and collecting
the Student Loans and, with respect to any Student
Loan for which repayment terms have been established,
all disclosures of information required to be made
have been made;
(vii) Each Student Loan has been duly made and serviced in
accordance with the provisions of all applicable
federal and state laws;
(viii) No Student Loan is more than sixty (60) days
delinquent as of the Cutoff Date and no default,
breach, violation or event permitting acceleration
under the terms of any Student Loan exists; and
neither Nellie Mae nor any predecessor holder of any
Student Loan has waived any of the foregoing other
than as permitted by the Basic Documents;
(ix) It is the intention of Nellie Mae and Funding, and
Nellie Mae hereby warrants, that the transfer and
assignment herein contemplated constitute a valid sale
of the Student Loans from Nellie Mae to Funding and
that the beneficial interest in and title to such
Student Loans not be part of Nellie Mae's estate in
the event of the bankruptcy of Nellie Mae or the
appointment of a receiver with respect to Nellie Mae;
(x) There is only one original executed copy of the
promissory note evidencing each Student Loan; and
(xi) No Borrower of any Student Loan as of the Cutoff Date
is known by Nellie Mae as being currently involved in
a bankruptcy proceeding.
(C) Funding represents and warrants that as of the date of each
Purchase Agreement and each Bill of Sale:
(i) Funding is a Massachusetts limited liability company
duly organized and validly existing in good standing
under the laws of the Commonwealth and having an
office located within the Commonwealth. It has all
requisite power and authority to execute, deliver and
perform its obligations under this Purchase Agreement;
(ii) Funding has taken all action necessary to authorize
the execution and delivery by it of the Purchase
Agreement, and the Purchase Agreement will be executed
and
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<PAGE> 6
delivered by one of its officers who is duly
authorized to execute and deliver the Purchase
Agreement on its behalf; and
(iii) Neither the execution nor the delivery by it of this
Master Purchase Agreement and each Purchase Agreement,
nor the consummation by it of the transactions
contemplated hereby nor compliance by it with any of
the terms or provisions hereof will contravene any
Federal or state law, governmental rule or regulation
governing the Funding or any judgment or order binding
on it, or constitute any default under its certificate
of incorporation or operating agreement or any
indenture, mortgage, contract, agreement or instrument
to which it is a party or by which any of its
properties may be bound.
SECTION 6. REPURCHASE OF TRUST STUDENT LOANS; REIMBURSEMENT
Each party to this Agreement shall give notice to the other party
promptly, in writing, upon the discovery of any breach of Nellie Mae's
representations and warranties made pursuant to Section 5 hereof which has a
materially adverse effect on the interest of Funding in any Trust Student Loan.
In the event of such a material breach which is not curable, Nellie Mae shall
repurchase any affected Trust Student Loan not later than 120 days following the
date of discovery of such material breach. In the event of such a material
breach which is curable, unless the material breach shall have been cured within
360 days following the date of discovery of such material breach, Nellie Mae
shall repurchase such Trust Student Loan not later than the sixtieth day
following the end of such 360-day period.
The sole remedy of Funding, the Owner Trustee, the Certificateholders
and the Noteholders with respect to a breach by Nellie Mae pursuant to Section 5
hereof shall be to require Nellie Mae to repurchase Trust Student Loans or to
reimburse Funding as provided above. The Owner Trustee shall have no duty to
conduct any affirmative investigation as to the occurrence of any condition
requiring the repurchase of any Trust Student Loan.
SECTION 7. OBLIGATION TO REMIT SUBSEQUENT PAYMENTS AND FORWARD
COMMUNICATIONS
(A) Any payment received by Nellie Mae with respect to amounts accrued
after the date of the Bill of Sale for any Student Loan sold to Funding, which
payment is not reflected in the Student Loan Transmittal Summary Form, shall be
received by Nellie Mae in trust for the account of Funding and Nellie Mae hereby
disclaims any title to or interest in any such amounts. Within two (2) business
days following the date or receipt, Nellie Mae shall remit to Funding an amount
equal to any such payments on a list provided by Funding identifying the Student
Loans with respect to which such payments were made, the amount of each such
payment and the date each such payment was received.
(B) Any written communication received at any time by Nellie Mae with
respect to any Student Loan subject to a Purchase Agreement shall be transmitted
by Nellie Mae to Servicer within two (2) business days of receipt. Such
communications shall include, but not be limited to, letters, notices of death
or disability, notices of bankruptcy, forms requesting deferment of repayment or
loan cancellation, and like documents.
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<PAGE> 7
SECTION 8. CONTINUING OBLIGATION OF NELLIE MAE
Nellie Mae shall provide all reasonable assistance necessary for
Funding to resolve account problems raised by any Borrower or any Guarantor
provided such account problems are attributable to or are alleged to be
attributable to (a) an event occurring during the period Nellie Mae owned the
Student Loan, or (b) a payment made or alleged to have been made to Nellie Mae.
Further, Nellie Mae agrees to execute any financing statements at the request of
Funding in order to reflect Funding's interest in the Student Loans.
SECTION 9. LIABILITY OF NELLIE MAE: INDEMNITIES
Nellie Mae shall be liable in accordance herewith only to the extent of
the obligations specifically undertaken by Nellie Mae under this Purchase
Agreement.
(A) Nellie Mae shall indemnify, defend and hold harmless Funding and
its officers, directors, employees and agents from and against any taxes that
may at any time be asserted against any such Person with respect to the
transactions contemplated herein and in the other Basic Documents, including any
sales, gross receipts, general corporation, tangible personal property,
privilege or license taxes (but, in the case of Funding, not including any taxes
asserted with respect to, and as of the date of, the sale of the Student Loans
to Funding, or asserted with respect to ownership of the Trust Student Loans)
and costs and expenses in defending against the same.
(B) Nellie Mae shall indemnify, defend and hold harmless Funding in its
individual capacity, and the officers, directors, employees and agents of
Funding from and against any and all costs, expenses, losses, claims, damages
and liabilities arising out of, or imposed upon such Person through, Nellie
Mae's willful misfeasance, bad faith or negligence in the performance of its
duties under the Purchase Agreement, or by reason of reckless disregard of its
obligations and duties under the Purchase Agreement.
Indemnification under this Section shall survive the termination of
this Master Purchase Agreement, and shall include reasonable fees and expenses
of counsel and expenses of litigation. If Nellie Mae shall have made any
indemnity payments pursuant to this Section and the Person to or on behalf of
whom such payments are made thereafter shall collect any of such amounts from
others, such Person shall promptly repay such amounts to Nellie Mae, without
interest.
SECTION 10. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE OBLIGATIONS
OF NELLIE MAE
Any Person (a) into which Nellie Mae may be merged or consolidated, (b)
which may result from any merger or consolidation to which Nellie Mae shall be a
party or (c) which may succeed to the properties and assets of Nellie Mae
substantially as a whole, shall be the successor to Nellie Mae without the
execution or filing of any document or any further act by any of the parties to
this Purchase Agreement; provided, however, that Nellie Mae hereby covenants
that it will not consummate any of the foregoing transactions except upon
satisfaction of the following: (i) the surviving Person, if other than Nellie
Mae, executes an agreement of assumption to perform every obligation of Nellie
Mae under the Purchase Agreement, (ii) immediately after giving effect to such
transaction, no representation or warranty made pursuant to Section 5 shall have
been breached, (iii) the surviving Person, if other than Nellie Mae, shall have
delivered to Funding an Officers' Certificate and an Opinion of Counsel each
stating that such consolidation, merger or succession and such agreement of
assumption comply with this Section and that all conditions precedent, if any,
provided for in this Purchase Agreement relating to such transaction have been
complied with, and that any conditions set by the Rating Agencies shall have
been satisfied with respect to such transaction
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<PAGE> 8
(iv) if Nellie Mae is not the surviving entity, Nellie Mae shall have delivered
to Funding an Opinion of Counsel either (A) stating that, in the opinion of such
counsel, all financing statements and continuation statements and amendments
thereto have been executed and filed that are necessary fully to preserve and
protect the interest of Funding in the Student Loans and reciting the details of
such filings, or (B) stating that, in the opinion of such counsel, no such
action shall be necessary to preserve and protect such interests.
SECTION 11. LIMITATION ON LIABILITY OF NELLIE MAE AND OTHERS
Nellie Mae and any director or officer or employee or agent thereof may
rely in good faith on the advice of counsel or on any document of any kind,
prima facie properly executed and submitted by any Person respecting any matters
arising hereunder (provided that such reliance shall not limit in any way Nellie
Mae's obligations under Section 6). Nellie Mae shall not be under any obligation
to appear in, prosecute or defend any legal action that shall not be incidental
to its obligations under this Master Purchase Agreement or any Purchase
Agreement, and that in its opinion may involve it in any expense or liability.
Except as provided herein, the repurchase and reimbursement obligations of
Nellie Mae will constitute the sole remedy available to Funding for uncured
breaches; provided, however, that the information with respect to the Student
Loans listed on the Bill of Sale may be adjusted in the ordinary course of
business subsequent to the date of the Bill of Sale and (i) to the extent that
the aggregate Principal Balance of the Student Loans listed on the Bill of Sale
is less than the aggregate Principal Balance stated on the Student Loan
Transmittal Summary Form, Nellie Mae shall remit such amount to Funding and (ii)
to the extent that the aggregate Principal Balance of the Student Loans listed
on the Bill of Sales is greater than the aggregate Principal Balance stated on
the Student Loan Transmittal Summary Form, Funding shall furnish such amount to
Nellie Mae. Such reconciliation payment shall be made from time to time but no
less frequently than semi-annually.
SECTION 12. EXPENSES
Except as otherwise provided herein, each party to this Master Purchase
Agreement or any Purchase Agreement shall pay its own expense incurred in
connection with the preparation, execution and delivery of this Master Purchase
Agreement and any Purchase Agreement and the transactions contemplated herein or
therein.
SECTION 13. SURVIVAL OF COVENANTS/SUPERSESSION
All covenants, agreements, representations and warranties made herein
and in or pursuant to any Purchase Agreements executed pursuant to this Master
Purchase Agreement shall survive the consummation of the purchase of the Student
Loans provided for in each Purchase Agreement. All covenants, agreements,
representations and warranties made or furnished pursuant hereto by or on behalf
of Nellie Mae shall bind and inure to the benefit of any successors or assigns
of Funding and shall survive with respect to each Student Loan. Each Purchase
Agreement supersedes all previous agreements and understandings between Funding
and Nellie Mae with respect to the subject matter thereof. This Master Purchase
Agreement and any Purchase Agreement may be changed, modified or discharged, and
any rights or obligations hereunder may be waived, only by a written instrument
signed by a duly authorized officer of the party against whom enforcement of any
such waiver, change, modification or discharge is sought. The waiver by Funding
of any covenant, agreement, representation or warranty required to be made or
furnished by Nellie Mae or the waiver by Funding of any provision herein
contained or contained in any Purchase Agreement shall not be deemed to be a
waiver of any breach of any other covenant, agreement, representation, warranty
or provision herein contained, nor shall any waiver or any custom or practice
which may evolve between the
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<PAGE> 9
parties in the administration of the terms hereof or of any Purchase Agreement,
be construed to lessen the right of Funding to insist upon the performance by
Nellie Mae in strict accordance with said terms.
SECTION 14. COMMUNICATION AND NOTICE REQUIREMENTS
All communications, notices and approvals provided for hereunder shall
be in writing and mailed or delivered to Nellie Mae or Funding, as the case may
be, addressed as set forth in the Purchase Agreement or at such other address as
either party may hereafter designate by notice to the other party. Notice given
in any such communication, mailed to Nellie Mae or Funding by appropriately
addressed registered mail, shall be deemed to have been given on the day
following the date of such mailing.
SECTION 15. FORM OF INSTRUMENTS
All instruments and documents delivered in connection with this Master
Purchase Agreement and any Purchase Agreement, and all proceedings to be taken
in connection with this Master Purchase Agreement and any Purchase Agreement and
the transactions contemplated herein and therein, shall be in a form as set
forth in the attachments hereto, and Funding shall have received copies of such
documents as it or its counsel shall reasonably request in connection therewith.
Any instrument or document which is substantially in the same form as an
Attachment hereto or a recital herein will be deemed to be satisfactory as to
form.
SECTION 16. AMENDMENT
This Master Purchase Agreement and any Purchase Agreement may be
amended by the parties thereto without the consent of the related Noteholders or
Certificateholders for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of such Master Terms and
Purchase Agreements or of modifying in any manner the rights of such Noteholders
or Certificateholders; provided that such action will not, in the opinion of
counsel satisfactory to the related Indenture Trustee, materially and adversely
affect the interest of any such Noteholder or Certificateholder.
In addition, this Master Purchase Agreement and any Purchase Agreement
may also be amended from time to time by Nellie Mae and Funding, with the
consent of the Noteholders of Notes evidencing a majority of the Outstanding
Amount of the Notes and the consent of the Certificateholders of Certificates
evidencing a majority of the Certificate Balance, for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Master Purchase Agreement or any Purchase Agreements or of modifying in any
manner the rights of the Noteholders or the Certificateholders; provided,
however, that no such amendment shall (a) increase or reduce in any manner the
amount of, or accelerate or delay the time of, collections of payments with
respect to Student Loans or distributions that shall be required to be made for
the benefit of the Noteholders or the Certificateholders or (b) reduce the
aforesaid percentage of the Outstanding Amount of the Notes and the Certificate
Balance of Certificates, the Noteholders or the Certificateholders of which are
required to consent to any such amendment, without the consent of all
outstanding Noteholders and Certificateholders.
Promptly after the execution of any such amendment or consent (or, in
the case of the Rating Agencies, five Business Days prior thereto), Funding
shall furnish written notification of the substance of such amendment or consent
to the Indenture Trustee, each Certificateholder, and each of the Rating
Agencies.
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<PAGE> 10
It shall not be necessary for the consent of Certificateholders or
Noteholders pursuant to this Section to approve the particular form of any
proposed amendment or consent, but it shall be sufficient in such consent shall
approve the substance thereof.
Prior to the execution of any amendment to this Master Purchase
Agreement, Funding shall be entitled to receive and rely upon an Opinion of
Counsel stating that execution of such amendment is authorized or permitted by
this Agreement. Funding may, but shall not be obligated to, enter into any such
amendment which affects Funding's own rights, duties or immunities under this
Master Purchase Agreement or otherwise.
SECTION 17. NON-PETITION COVENANTS
Notwithstanding any prior termination of this Master Purchase Agreement
Nellie Mae and Funding shall not acquiesce, petition or otherwise invoke or
cause Funding to invoke the process of any court or government authority for the
purpose of commencing or sustaining a case against Funding under any Federal or
state bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar official
of Funding or any substantial part of its property, or ordering the winding up
or liquidation of the affairs of the Funding.
SECTION 18. GOVERNING LAW
This Master Purchase Agreement and any Purchase Agreement shall be
government by and construed in accordance with the laws of the Commonwealth.
NELLIE MAE, INC.
(Seller)
By: /s/ John F. Remondi
---------------------------------------------
Name: John F. Remondi
Title: Treasurer
NELLIE MAE EDUCATION FUNDING, LLC
(Purchaser)
By: /s/ Lawrence W. O'Toole
---------------------------------------------
Name: Lawrence W. O'Toole
Title: President
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<PAGE> 11
ATTACHMENT A
PURCHASE AGREEMENT
Dated as of ___________, 1996
PURCHASE AGREEMENT NUMBER _____
Nellie Mae, Inc. ("Nellie Mae") hereby offers for sale to Nellie Mae
Education Funding, LLC ("Funding") the entire right, title and interest of
Nellie Mae in the Student Loans described in the Bill of Sale and Student Loan
Transmittal Summary Form incorporated herein and, to the extent indicated below,
Funding accepts Nellie Mae's offer. In order to qualify as Qualified Loans, no
payment of principal or interest shall be more than sixty (60) days Delinquent
as of the Cutoff Date which date shall be __________, 1996. Notwithstanding the
foregoing, to the extent Nellie Mae is deemed to retain any right, title or
interest in the Student Loans, Nellie Mae grants to Funding a security interest
therein.
TERMS, CONDITIONS AND COVENANTS
In consideration of the Purchase Price, Nellie Mae hereby sells,
transfer, convey and assign to Funding the entire right, title and interest of
Nellie Mae in the Student Loans accepted for purchase, subject to all the terms
and conditions of the Master Terms Purchase Agreement ("Master Terms Agreement")
and any amendments thereto, incorporated herein by reference, among Nellie Mae
and Funding. The Purchase Price of the Student Loans shall equal $________.
This document shall constitute a Purchase Agreement as referred in the
Master Terms Agreement and, except as modified herein, each term used herein
shall have the same meaning as in the Master Terms Agreement. All references in
the Master Terms Agreement to Student Loans or Qualified Loans shall be deemed
to refer to the Student Loans governed by this Purchase Agreement. Nellie Mae
hereby makes, as of the date hereof, all the representations and warranties
contained in the Master Terms Agreement and makes such representations and
warranties with respect to the Student Loans governed by this Purchase
Agreement.
Nellie Mae authorizes Funding to use a copy of the Bill of Sale,
including the Student Loan Transmittal Summary Form attached to the Bill of
Sale, as official notification to any Guarantor of assignment on the date of
purchase.
The parties hereto intend that the transfer of Student Loans described
in the Bill of Sale and Student Loan Transmittal Summary Form be, and be
construed as, a valid sale of such Student Loans from Nellie Mae to Funding.
However, in the event that notwithstanding the intention of the parties, such
transfer is deemed to be a transfer for security, then Nellie Mae hereby grants
Funding a first priority security interest in and to all Student Loans described
in the Bill of Sale and Student Loan Transmittal Summary Form to secure a loan
in an amount equal to the Purchase Price of such loans.
NELLIE MAE, INC. NELLIE MAE EDUCATION FUNDING LLC
(SELLER) (PURCHASER)
By: By:
---------------------- --------------------------------
Name: Name:
-------------------- ------------------------------
Title: Title:
------------------- -----------------------------
A-1
<PAGE> 12
PURCHASE AGREEMENT NUMBER __
BLANKET ENDORSEMENT DATED __________, 1996
Nellie Mae, Inc. ("Nellie Mae"), by execution of this instrument,
hereby endorses the attached promissory note which is one (1) of the promissory
notes ("the Notes") described in the Bill of Sale executed by Nellie Mae in
favor of Nellie Mae Education Funding, LLC ("Funding"). This endorsement is in
blank, unrestricted form and without recourse except as provided in Section 6 of
the Master Terms Agreement referred to in the Purchase Agreement among Nellie
Mae and Funding which covers this promissory note.
This endorsement may be effected by attaching this instrument to each
or any of the Notes.
Notwithstanding the foregoing, Nellie Mae agrees to individually
endorse each Note in the form provided by Funding as Funding may from time to
time require or if such individual endorsement is required by any Guarantor of
the Note.
THE SALE AND PURCHASE OF THE STUDENT LOANS SHALL BE SUBJECT TO THE TERMS,
CONDITIONS AND COVENANTS, INCLUDING THE BLANKET ENDORSEMENT, AS SET FORTH IN THE
PURCHASE AGREEMENT. BY EXECUTION HEREOF, NELLIE MAE ACKNOWLEDGES THAT NELLIE MAE
HAS READ, UNDERSTANDS AND AGREES TO BE BOUND BY ALL TERMS, CONDITIONS AND
COVENANTS OF THE PURCHASE AGREEMENT. THE SALE AND PURCHASE SHALL BE CONSUMMATED
UPON FUNDING'S PAYMENT TO NELLIE MAE OF THE PURCHASE PRICE AND, UNLESS OTHERWISE
AGREED BY NELLIE MAE AND FUNDING, SHALL BE EFFECTIVE AS OF THE DATE OF THE BILL
OF SALE.
---------------------------------------
SELLER PURCHASER
- ----------------------------------- ---------------------------------------
Nellie Mae, Inc. Nellie Mae Education Funding, LLC
50 Braintree Hill Park
Suite 300
Braintree, Massachusetts 02184 By:
---------------------------------
(Signature of Authorized
Officer for Purchaser)
By:
-----------------------------
(Signature of Authorized Name:
Officer of Seller) -------------------------------
Title:
------------------------------
Name:
---------------------------
Date of Purchase: , 1996
------------
Title:
-------------------------- ---------------------------------------
- --------------------------------------------------------------------------------
NOTE: Boxed areas on this form are to be completed by Purchaser.
- --------------------------------------------------------------------------------
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<PAGE> 13
BILL OF SALE DATED ____________, 1996
The undersigned ("Nellie Mae"), for value received and pursuant to the
terms and conditions of Purchase Agreement Number 1 ("Purchase Agreement")
between Nellie Mae Education Funding, LLC ("Funding") and Nellie Mae, does
hereby sell, assign, transfer and convey to Funding and its assignees all right,
title and interest of Nellie Mae in the Student Loans identified herein which
Funding has accepted for purchase. The portfolio accepted for purchase by
Funding and the individual Borrower accounts are listed on Schedule A attached
hereto.
Nellie Mae hereby makes the representations and warranties set forth in
Section 5 of the Master Terms Purchase Agreement incorporated by reference in
this Purchase Agreement. Nellie Mae authorizes Funding to use a copy of this
document as official notification to any Guarantor of assignment to Funding of
the Student Loans on the date of purchase.
SELLER PURCHASER
- ----------------------------------- ---------------------------------------
Nellie Mae Education Funding, LLC
Nellie Mae, Inc.
50 Braintree Hill Park
Suite 300 By:
Braintree, Massachusetts 02184 ---------------------------------
(Signature of Authorized
Officer for Purchaser)
Name:
By: -------------------------------
-----------------------------
(Signature of Authorized Title:
Officer of Seller) ------------------------------
Date of Purchase: , 1996
Name: -------------
---------------------------
Title:
-------------------------- ---------------------------------------
- --------------------------------------------------------------------------------
NOTE: Boxed areas on this form are to be completed by Purchaser.
- --------------------------------------------------------------------------------
- 2 -
<PAGE> 14
OFFICER'S CERTIFICATE
I, Lawrence W. O'Toole, of Nellie Mae, Inc. (the "Nellie Mae"), hereby
certify to Nellie Mae Education Funding, LLC that:
1. The person(s) named below are at the date hereof the duly elected,
qualified and acting officers of Nellie Mae holding the offices indicated and
the signature following each name is the genuine signature of the person named:
TITLE NAME SIGNATURE
----- ---- ---------
Treasurer John F. Remondi
------------------
2. Any of the above-named person(s) is duly authorized to sign
agreements provided for the sale of student loans to Nellie Mae Education
Funding, LLC.
WITNESS my hand this 12th day of July, 1996.
By:
----------------------------
Name: Lawrence W. O'Toole
Title: President
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<PAGE> 1
EXHIBIT 99.2
FIRST SUPPLEMENTAL PURCHASE AGREEMENT
Dated as of July 12, 1996
Nellie Mae, Inc. ("Nellie Mae") hereby offers for sale to Nellie Mae
Education Funding, LLC ("Funding") the entire right, title and interest of
Nellie Mae in the Student Loans described in the Bill of Sale and Student Loan
Transmittal Summary Form incorporated herein and, to the extent indicated below,
Funding accepts Nellie Mae's offer. In order to qualify as Qualified Loans, no
payment of principal or interest shall be more than sixty (60) days Delinquent
as of the Cutoff Date which date shall be July 12, 1996. Notwithstanding the
foregoing, to the extent Nellie Mae is deemed to retain any right, title or
interest in the Student Loans, Nellie Mae grants to Funding a security interest
therein.
TERMS, CONDITIONS AND COVENANTS
In consideration of the Purchase Price, Nellie Mae hereby sells,
transfer, convey and assign to Funding the entire right, title and interest of
Nellie Mae in the Student Loans accepted for purchase, subject to all the terms
and conditions of the Master Terms Purchase Agreement ("Master Terms Agreement")
and any amendments thereto, incorporated herein by reference, among Nellie Mae
and Funding. The Purchase Price of the Student Loans shall equal $63,616,418.93.
This document shall constitute a Purchase Agreement as referred in the
Master Terms Agreement and, except as modified herein, each term used herein
shall have the same meaning as in the Master Terms Agreement. All references in
the Master Terms Agreement to Student Loans or Qualified Loans shall be deemed
to refer to the Student Loans governed by this Purchase Agreement. Nellie Mae
hereby makes, as of the date hereof, all the representations and warranties
contained in the Master Terms Agreement and makes such representations and
warranties with respect to the Student Loans governed by this Purchase
Agreement.
Nellie Mae authorizes Funding to use a copy of the Bill of Sale,
including the Student Loan Transmittal Summary Form attached to the Bill of
Sale, as official notification to any Guarantor of assignment on the date of
purchase.
The parties hereto intend that the transfer of Student Loans described
in the Bill of Sale and Student Loan Transmittal Summary Form be, and be
construed as, a valid sale of such Student Loans from Nellie Mae to Funding.
However, in the event that notwithstanding the intention of the parties, such
transfer is deemed to be a transfer for security, then Nellie Mae hereby grants
Funding a first priority security interest in and to all Student Loans described
in the Bill of Sale and Student Loan Transmittal Summary Form to secure a loan
in an amount equal to the Purchase Price of such loans.
NELLIE MAE, INC. NELLIE MAE EDUCATION FUNDING LLC
(SELLER) (PURCHASER)
By: /s/ John F. Remondi By: /s/ Lawrence W. O'Toole
------------------------------- ------------------------------------
Name: John F. Remondi Name: Lawrence W. O'Toole
Title: Treasurer Title: President
<PAGE> 2
FIRST SUPPLEMENTAL PURCHASE AGREEMENT
BLANKET ENDORSEMENT DATED JULY 12, 1996
Nellie Mae, Inc. ("Nellie Mae"), by execution of this instrument,
hereby endorses the attached promissory note which is one (1) of the promissory
notes ("the Notes") described in the Bill of Sale executed by Nellie Mae in
favor of Nellie Mae Education Funding, LLC ("Funding"). This endorsement is in
blank, unrestricted form and without recourse except as provided in Section 6 of
the Master Terms Purchase Agreement referred to in the First Supplemental
Purchase Agreement among Nellie Mae and Funding which covers this promissory
note.
This endorsement may be effected by attaching this instrument to each
or any of the Notes.
Notwithstanding the foregoing, Nellie Mae agrees to individually
endorse each Note in the form provided by Funding as Funding may from time to
time require or if such individual endorsement is required by any Guarantor of
the Note.
THE SALE AND PURCHASE OF THE STUDENT LOANS SHALL BE SUBJECT TO THE TERMS,
CONDITIONS AND COVENANTS, INCLUDING THE BLANKET ENDORSEMENT, AS SET FORTH IN THE
PURCHASE AGREEMENT. BY EXECUTION HEREOF, NELLIE MAE ACKNOWLEDGES THAT NELLIE MAE
HAS READ, UNDERSTANDS AND AGREES TO BE BOUND BY ALL TERMS, CONDITIONS AND
COVENANTS OF THE PURCHASE AGREEMENT. THE SALE AND PURCHASE SHALL BE CONSUMMATED
UPON FUNDING'S PAYMENT TO NELLIE MAE OF THE PURCHASE PRICE AND, UNLESS OTHERWISE
AGREED BY NELLIE MAE AND FUNDING, SHALL BE EFFECTIVE AS OF THE DATE OF THE BILL
OF SALE.
SELLER PURCHASER
- ----------------------------- ---------------------------------------
Nellie Mae, Inc. Nellie Mae Education Funding, LLC
50 Braintree Hill Park
Suite 300
Braintree, Massachusetts 02184
By: /s/ John F. Remondi By: /s/ Lawrence W. O'Toole
-------------------------- --------------------------------
Name: John F. Remondi Name: Lawrence W. O'Toole
Title: Treasurer Title: President
Date of Purchase: July 12, 1996
- 1 -
<PAGE> 3
BILL OF SALE DATED JULY 12, 1996
The undersigned ("Nellie Mae"), for value received and pursuant to the terms
and conditions of the First Supplemental Purchase Agreement ("Purchase
Agreement") between Nellie Mae Education Funding, LLC ("Funding") and Nellie
Mae, does hereby sell, assign, transfer and convey to Funding and its assignees
all right, title and interest of Nellie Mae in the Student Loans identified
herein which Funding has accepted for purchase. The portfolio accepted for
purchase by Funding and the individual Borrower accounts are listed on Schedule
A attached hereto.
Nellie Mae hereby makes the representations and warranties set forth in
Section 5 of the Master Terms Purchase Agreement incorporated by reference in
the Purchase Agreement. Nellie Mae authorizes Funding to use a copy of this
document as official notification to any Guarantor of assignment to Funding of
the Student Loans on the date of purchase.
SELLER PURCHASER
- ----------------------------- ---------------------------------------
Nellie Mae, Inc. Nellie Mae Education Funding, LLC
50 Braintree Hill Park
Suite 300
Braintree, Massachusetts 02184
By: /s/ John F. Remondi By: /s/ Lawrence W. O'Toole
-------------------------- ---------------------------------
Name: John F. Remondi Name: Lawrence W. O'Toole
Title: Treasurer Title: President
Date of Purchase: July 12, 1996
- 2 -
<PAGE> 4
FIRST SUPPLEMENTAL PURCHASE AGREEMENT
Schedule A
<TABLE>
<CAPTION>
Number of Number of Principal Interest
Sale # Loans Accounts Balance Balance Purchase Price
--------- --------- ------------------------ --------------
<S> <C> <C> <C> <C> <C>
1 5,941 5,787 $64,934,150.00 $1,279,633.01 $63,616,418.93
</TABLE>
- 3 -
<PAGE> 1
EXHIBIT 99.3
MASTER TERMS SALES AGREEMENT
This Master Terms Sales Agreement (the "Master Sales Agreement") dated
as of June 1, 1996 among Nellie Mae Education Funding, LLC (the "Seller"),
Nellie Mae Education Loan Trust (the "Purchaser") and Fleet National Bank, not
in its individual capacity but solely as owner trustee (the "Owner Trustee") for
the benefit of the Purchaser under the Trust Agreement dated as of June 1, 1996
between the Seller and the Owner Trustee, shall be effective upon execution by
the parties hereto.
WHEREAS, Seller is the owner of certain student loans;
WHEREAS, Seller may desire to sell, transfer, assign and convey its
interest in such loans from time to time and the Purchaser may desire to
purchase such loans from Seller;
NOW, THEREFORE, in connection with the mutual promises contained
herein, the parties hereto agree as follows:
SECTION 1. TERMS
This Master Sales Agreement establishes the terms under which Seller
may sell, assign, transfer and convey and the Purchaser may purchase the Student
Loans (and all obligations of the Borrowers thereunder) specified on each Sales
Agreement ("Sales Agreement") as the parties may execute from time to time
pursuant to this Master Sales Agreement. Each such Sales Agreement shall be
substantially in the form of Attachment A hereto, incorporating by reference the
terms of this Master Sales Agreement, and shall be a separate agreement among
the Seller, Purchaser, and the Owner Trustee on behalf of Purchaser with respect
to the Student Loans covered by the terms of such Sales Agreement. If the terms
of a Sales Agreement conflict with the terms of this Master Sales Agreement, the
terms of such Sales Agreement shall supersede and govern with respect to the
Student Loans covered by the terms of such Sales Agreement. Notwithstanding the
foregoing, to the extent the Seller is deemed to retain any right, title or
interest in the Student Loans, the Seller grants to the Owner Trustee for the
benefit of the Trust a security interest therein.
SECTION 2. DEFINITIONS
Capitalized terms used but not otherwise defined herein shall have the
definitions set forth in Exhibit A to the Master Indenture.
For purposes hereof:
(A) "Bill of Sale" means that document executed by an authorized
officer of Seller which shall set forth the Student Loans offered by
Seller and accepted for purchase by the Owner Trustee for the benefit
of Purchaser and which shall sell, assign, transfer and convey to the
Owner Trustee for the benefit of Purchaser and its assignees all
rights, title and interest of Seller in the Student Loans listed on the
Bill of Sale and will certify that the representations and warranties
made by Seller pursuant to Section 5 of this Master Sales Agreement are
true and correct.
(B) "Borrower" means the obligor on a Student Loan.
(C) "Cutoff Date" means a date agreed to by Seller and Purchaser to use
in determining the Principal Balance and accrued interest for purposes
of completing the Student Loan Transmittal Summary Form.
<PAGE> 2
(D) "Delinquent" means the period any payment of principal or interest
due on the Student Loan is overdue.
(E) "Note" means the promissory note of the Borrower and any amendment
thereto evidencing the Borrower's obligation with regard to a student
loan.
(F) "Principal Balance" means the outstanding principal amount of the
Student Loan, plus accrued interest.
(G) "Purchase Price" means the price paid for the Student Loans as set
forth in the Bill of Sale.
(H) "Qualified Loan" means a Student Loan offered for sale by the
Seller under the Sales Agreement which as of the Cutoff Date is current
or no more Delinquent than permitted under the Sales Agreement in
payment of principal or interest, is owned by Seller and which is
supported by the following documentation as of the effective date of
the Bill of Sale:
(a) for each Student Loan:
1. loan application, and any supplement thereto,
2. original promissory note and any addendum thereto or a
certified copy thereof,
(b) for each Student Loan only if applicable:
1. payment history (or similar document) including (i) an
indication of the Principal Balance and the date through
which interest has been paid, each as of the Cutoff Date
and (ii) an accounting of the allocation of all payments
by Borrower or on Borrower's behalf to principal and
interest on the Student Loan,
2. documentation which supports periods of current or past
deferment or past forbearance,
3. a collection history, if the Student Loan was ever in a
delinquent status, including detailed summaries of
contacts and including the addresses or telephone
numbers used in contacting or attempting to contact
Borrower and any endorser,
4. evidence of all requests for skip-tracing assistance and
current address of Borrower, if located,
5. evidence of requests for pre-claims assistance, and
6. a record of any event resulting in a change to or
confirmation of any data regarding the Student Loan.
(I) "Student Loan" means the Note or Notes offered for sale pursuant to
the Sales Agreement and related documentation together with any
guaranties and other rights relating thereto; provided that "Student
Loan" shall not include any guaranties related to such loan unless any
such guaranty is pursuant to a Guaranty Agreement which permits the
assignment of the Guarantor's obligations thereunder.
- 2 -
<PAGE> 3
(J) "Student Loan Transmittal Summary Forms" means the forms provided
to Seller by Purchaser and completed by Seller which list, by Borrower,
the Student Loans subject to the Bill of Sale and the outstanding
Principal Balance and accrued interest thereof as of the Cutoff Date.
(K) "Trust Student Loans" means Student Loans which have been purchased
for the benefit of the Trust pursuant to a Sales Agreement.
SECTION 3. SALE/PURCHASE
(A) Consummation of Sale and Purchase. The sale and purchase of
Qualified Loans pursuant to a Sales Agreement shall be consummated upon
Purchaser's receipt from Seller of the Bill of Sale and the payment by Purchaser
to Seller of the Purchase Price, and when consummated such sale and purchase
shall be effective as of the date of the Bill of Sale. Seller and Purchaser
shall use their best efforts to perform promptly their respective obligations
pursuant to such Sales Agreement.
(B) Settlement of the Purchase Price. Purchaser on the date of the Bill
of Sale shall pay Seller the Purchase Price by wire transfer of immediately
available funds to the account specified by Seller.
SECTION 4. CONDITIONS TO PURCHASE
(A) Activities Prior to the Sale. Following the execution of each Sales
Agreement, Seller shall provide any assistance requested by Purchaser in
determining that all required documentation on the Student Loans is present and
correct.
(B) Continued Servicing. Following the execution of each Sales
Agreement, Seller shall service, or cause to be serviced, all Student Loans
until the date of the Bill of Sale.
(C) Bill of Sale/Student Loan Transmittal Summary Form.
(i) Seller shall deliver to Purchaser a Bill of Sale
executed by an authorized officer of Seller covering
Student Loans offered by Seller and accepted by
Purchaser as set forth thereon, selling, assigning,
transferring and conveying to the Owner Trustee on
behalf of Purchaser and its assignees all right, title
and interest of Seller in each of the Student Loans,
and stating that the representations and warranties
made by Seller in Section 5 of this Master Sales
Agreement are true and correct on and as of the date
of the Bill of Sale; and
(ii) Seller shall deliver to Purchaser, within fifteen days
following the execution of each Sales Agreement, the
Student Loan Transmittal Summary Form, attached to the
Bill of Sale, identifying each of the Qualified Loans
which is the subject of the Bill of Sale and setting
forth the unpaid Principal Balance of each such
Student Loan.
(D) Endorsement. Seller shall provide a blanket endorsement in the form
of endorsement provided for in the Sales Agreement.
At the direction of and in such form as Purchaser may designate, Seller
also agrees to individually endorse any Qualified Loan as Purchaser may request
from time to time.
- 3 -
<PAGE> 4
(E) Officer's Certificate. Seller shall furnish to Purchaser an
Officer's Certificate in substantially the form of attached hereto in connection
with the execution of this Master Sales Agreement and at such other times as the
officers listed on such certificate shall change.
(F) Student Loan Transfer Statement. Upon Purchaser's request, Seller
shall deliver to Purchaser one (1) or more Student Loan Transfer Statements
provided by Purchaser, executed by Seller and dated the date of the Bill of
Sale. Seller agrees that Purchaser and the Owner Trustee may use the Bill of
Sale, including the Student Loan Transmittal Summary Form attached to the Bill
of Sale, as official notification to any Guarantor of the assignment by Seller
to the Owner Trustee on behalf of Purchaser of the Student Loans listed on the
Bill of Sale.
(G) Power of Attorney. Seller hereby grants to the Owner Trustee for
the benefit of Purchaser an irrevocable power of attorney, which power of
attorney is coupled with an interest, to individually endorse or cause to be
individually endorsed in the name of Seller any Qualified Loan to evidence the
transfer of such Qualified Loan to the Owner Trustee for the benefit of
Purchaser and to cause to be transferred physical possession of any Note from
the Seller or the Servicer to the Owner Trustee or the Indenture Trustee or any
custodian on their behalf.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF SELLER AND OWNER TRUSTEE
(A) Seller represents and warrants to Purchaser that with respect to a
portfolio of Student Loans as of the date of each Sales Agreement and Bill of
Sale:
(i) Seller is duly organized and existing under the laws
of the applicable jurisdiction;
(ii) Seller has all requisite power and authority to enter
into and to perform the terms of the Sales Agreement;
and
(iii) Seller has not, with respect to any Student Loan
purchased under Sales Agreements executed pursuant to
this Master Sales Agreement, agree to release any
Guarantor, if any, from any of its contractual
obligations as an insurer of such Student Loan.
(B) Seller represents and warrants to Purchaser as to the Student Loans
purchased by Purchaser under each Sales Agreement and each Bill of Sale executed
pursuant to this Master Sales Agreement that:
(i) Seller has good title to, and is the sole owner of,
the Student Loans, free and clear of all security
interests, liens, charges, claims or encumbrances of
any nature and no right of rescission, offsets,
defenses or counterclaims have been asserted or
threatened with respect to the Student Loans;
(ii) The Student Loans are Qualified Loans and the
description of the Student Loans set forth in the
Sales Agreement and the Student Loan Transmittal
Summary Form is true and correct;
(iii) Seller is authorized to sell, assign, convey, transfer
and repurchase the Student Loans; and the sale,
assignment and transfer of such Student Loans is or,
in the case of a Student Loan repurchase by Seller,
will be made pursuant to and consistent with the laws
and regulations under which Seller operates, and will
not violate any decree, judgment or order of any court
or agency, or conflict with or result in a breach of
any of the terms, conditions or provisions of any
agreement or instrument
- 4 -
<PAGE> 5
to which Seller is a party or by which Seller or its
property is bound, or constitute a default (or an
event which could constitute a default with the
passage of time or notice or both) thereunder;
(iv) The Student Loans are each in full force and effect in
accordance with their terms and are legal, valid and
binding obligations of the respective Borrowers
thereunder subject to no defenses (except the defenses
of infancy);
(v) Any payments on the Student Loans received by Seller
which have been allocated to reduction of principal
and interest on such Student Loans have been allocated
on a simple interest basis; the information with
respect to the Student Loans as of the Cutoff Date as
stated on the Student Loan Transmittal Summary Form is
true and correct;
(vi) Due diligence and reasonable care have been exercised
in the making, administering, servicing and collecting
the Student Loans and, with respect to any Student
Loan for which repayment terms have been established,
all disclosures of information required to be made
have been made;
(vii) Each Student Loan has been duly made and serviced in
accordance with the provisions of all applicable
federal and state laws;
(viii) No Student Loan is more than sixty (60) days
delinquent as of the Cutoff Date and no default,
breach, violation or event permitting acceleration
under the terms of any Student Loan exits; and
neither Seller nor any predecessor holder of any
Student Loan has waived any of the foregoing other
than as permitted by the Basic Documents;
(ix) It is the intention of Seller, the Owner Trustee and
Purchaser, and Seller hereby warrants, that the
transfer and assignment herein contemplated constitute
a valid sale of the Student Loans from Seller to the
Owner Trustee on behalf of Purchaser and that the
beneficial interest in and title to such Student Loans
not be part of Seller's estate in the event of the
bankruptcy of Seller or the appointment of a receiver
with respect to Seller;
(x) There is only one original executed copy of the
promissory note evidencing each Student Loan; and
(xi) No Borrower of any Student Loan as of the Cutoff Date
is known by Seller as being currently involved in a
bankruptcy proceeding.
(C) The Owner Trustee represents and warrants that as of the date of
each Sales Agreement and each Bill of Sale:
(i) The Owner Trustee is a national banking association
duly organized and validly existing in good standing
under the laws of the United States and having an
office located within the City of Boston,
Massachusetts. It has all requisite corporate power
and authority to execute, deliver and perform its
obligations under this Sales Agreement;
- 5 -
<PAGE> 6
(ii) The Owner Trustee has taken all corporate action
necessary to authorize the execution and delivery by
it of the Sales Agreement, and the Sales Agreement
will be executed and delivered by one of its officers
who is duly authorized to execute and deliver the
Sales Agreement on its behalf; and
(iii) Neither the execution nor the delivery by it of this
Master Sales Agreement and each Sales Agreement, nor
the consummation by it of the transactions
contemplated hereby nor compliance by it with any of
the terms or provisions hereof will contravene any
Federal or state law, governmental rule or regulation
governing the banking or trust powers of the Owner
Trustee or any judgment or order binding on it, or
constitute any default under its charter documents or
by-laws or any indenture, mortgage, contract,
agreement or instrument to which it is a party or by
which any of its properties may be bound.
SECTION 6. REPURCHASE OF TRUST STUDENT LOANS; REIMBURSEMENT
Each party to this Agreement shall give notice to the other such
parties promptly, in writing, upon the discovery of any breach of Seller's
representations and warranties made pursuant to Section 5 hereof which has a
materially adverse effect on the interest of Purchaser in any Trust Student
Loan. In the event of such a material breach which is not curable, Seller shall
repurchase any affected Trust Student Loan not later than 120 days following the
date of discovery of such material breach. In the event of such a material
breach which is curable, unless the material breach shall have been cured within
360 days following the date of discovery of such material breach, Seller shall
repurchase such Trust Student Loan not later than the sixtieth day following the
end of such 360-day period.
The sole remedy of Purchaser, the Owner Trustee, the Certificateholders
and the Noteholders with respect to a breach by Seller pursuant to Section 5
hereof shall be to require Seller to repurchase Trust Student Loans or to
reimburse Purchaser as provided above. The Owner Trustee shall have no duty to
conduct any affirmative investigation as to the occurrence of any condition
requiring the repurchase of any Trust Student Loan.
SECTION 7. OBLIGATION TO REMIT SUBSEQUENT PAYMENTS AND FORWARD
COMMUNICATIONS
(A) Any payment received by Seller with respect to amounts accrued
after the date of the Bill of Sale for any Student Loan sold to Purchaser, which
payment is not reflected in the Student Loan Transmittal Summary Form, shall be
received by Seller in trust for the account of Purchaser and Seller hereby
disclaims any title to or interest in any such amounts. Within two (2) business
days following the date or receipt, Seller shall remit to Purchaser an amount
equal to any such payments on a list provided by Purchaser identifying the
Student Loans with respect to which such payments were made, the amount of each
such payment and the date each such payment was received.
(B) Any written communication received at any time by Seller with
respect to any Student Loan subject to a Sales Agreement shall be transmitted by
Seller to Servicer within two (2) business days of receipt. Such communications
shall include, but not be limited to, letters, notices of death or disability,
notices of bankruptcy, forms requesting deferment of repayment or loan
cancellation, and like documents.
- 6 -
<PAGE> 7
SECTION 8. CONTINUING OBLIGATION OF SELLER
Seller shall provide all reasonable assistance necessary for Purchaser
to resolve account problems raised by any Borrower or any Guarantor provided
such account problems are attributable to or are alleged to be attributable to
(a) an event occurring during the period Seller owned the Student Loan, or (b) a
payment made or alleged to have been made to Seller. Further, Seller agrees to
execute any financing statements at the request of Purchaser in order to reflect
Purchaser's interest in the Student Loans.
SECTION 9. LIABILITY OF SELLER: INDEMNITIES
Seller shall be liable in accordance herewith only to the extent of the
obligations specifically undertaken by Seller under this Sales Agreement.
(A) Seller shall indemnify, defend and hold harmless Purchaser and the
Owner Trustee in its individual capacity and their officers, directors,
employees and agents from and against any taxes that may at any time be asserted
against any such Person with respect to the transactions contemplated herein and
in the other Basic Documents (except any such income taxes arising out of fees
paid to the Owner Trustee), including any sales, gross receipts, general
corporation, tangible personal property, privilege or license taxes (but, in the
case of Purchaser, not including any taxes asserted with respect to, and as of
the date of, the sale of the Student Loans to the Owner Trustee on behalf of
Purchaser, or asserted with respect to ownership of the Trust Student Loans) and
costs and expenses in defending against the same.
(B) Seller shall indemnify, defend and hold harmless Purchaser and the
Owner Trustee in its individual capacity, and the officers, directors, employees
and agents of Purchaser, and the Owner Trustee from and against any and all
costs, expenses, losses, claims, damages and liabilities arising out of, or
imposed upon such Person through, Seller's willful misfeasance, bad faith or
negligence in the performance of its duties under the Sales Agreement, or by
reason of reckless disregard of its obligations and duties under the Sales
Agreement.
(C) Seller shall be liable as primary obligor for, and shall indemnify,
defend and hold harmless the Owner Trustee in its individual capacity and its
officers, directors, employees and agents from and against, all costs, expenses,
losses, claims, damages, obligations and liabilities arising out of, incurred in
connection with or relating to the Sales Agreement, the other Basic Documents,
the acceptance or performance of the trusts and duties set forth herein and in
the Sales Agreement or the action or the inaction of the Owner Trustee
hereunder, except to the extent that such cost, expense, loss, claim, damage,
obligation or liability: (a) shall be due to the willful misfeasance, bad faith
or negligence (except for errors in judgment) of the Owner Trustee or (b) shall
arise from the breach by the Owner Trustee of any of its representations or
warranties made in its individual capacity set forth in this Master Sales
Agreement or any Sales Agreement. In the event of any claim, action or
proceeding for which indemnity will be sought pursuant to this paragraph, the
Owner Trustee's choice of legal counsel shall be subject to the approval of
Seller, which approval shall not be unreasonably withheld.
Indemnification under this Section shall survive the resignation or
removal of the Owner Trustee and the termination of this Master Sales Agreement,
and shall include reasonable fees and expenses of counsel and expenses of
litigation. If Seller shall have made any indemnity payments pursuant to this
Section and the Person to or for the benefit of whom such payments are made
thereafter shall collect any of such amounts from others, such Person shall
promptly repay such amounts to Seller, without interest.
- 7 -
<PAGE> 8
SECTION 10. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF SELLER
Any Person (a) into which Seller may be merged or consolidated, (b)
which may result from any merger or consolidation to which Seller shall be a
party or (c) which may succeed to the properties and assets of Seller
substantially as a whole, shall be the successor to Seller without the execution
or filing of any document or any further act by any of the parties to this
Master Sales Agreement, provided, however, that Seller hereby covenants that it
will not consummate any of the foregoing transactions except upon satisfaction
of the following: (i) the surviving Person, if other than Seller, executes an
agreement of assumption to perform every obligation of Seller under the Master
Sales Agreement, (ii) immediately after giving effect to such transaction, no
representation or warranty made pursuant to Section 5 shall have been breached,
(iii) the surviving Person, if other than Seller, shall have delivered to the
Owner Trustee an Officers' Certificate and an Opinion of Counsel each stating
that such consolidation, merger or succession and such agreement of assumption
comply with this Section and that all conditions precedent, if any, provided for
in this Sales Agreement relating to such transaction have been complied with,
and that any conditions set by the Rating Agencies shall have been satisfied
with respect to such transaction (iv) if Seller is not the surviving entity,
Seller shall have delivered to the Owner Trustee an Opinion of Counsel either
(A) stating that, in the opinion of such counsel, all financing statements and
continuation statements and amendments thereto have been executed and filed that
are necessary fully to preserve and protect the interest of Purchaser and the
Owner Trustee in the Student Loans and reciting the details of such filings, or
(B) stating that, in the opinion of such counsel, no such action shall be
necessary to preserve and protect such interests.
SECTION 11. LIMITATION ON LIABILITY OF SELLER AND OTHERS
Seller and any director or officer or employee or agent thereof may
rely in good faith on the advice of counsel or on any document of any kind,
prima facie properly executed and submitted by any Person respecting any matters
arising hereunder (provided that such reliance shall not limit in any way
Seller's obligations under Section 6). Seller shall not be under any obligation
to appear in, prosecute or defend any legal action that shall not be incidental
to its obligations under this Master Sales Agreement or any Sales Agreement, and
that in its opinion may involve it in any expense or liability. Except as
provided herein, the repurchase and reimbursement obligations of Seller will
constitute the sole remedy available to Purchaser for uncured breaches;
provided, however, that the information with respect to the Loans listed on the
Bill of Sale may be adjusted in the ordinary course of business subsequent to
the date of the Bill of Sale and (i) to the extent that the aggregate Principal
Balance of the Student Loans listed on Student Loan Transmittal Summary Form is
less than the aggregate Principal Balance stated on the Bill of Sale, Seller
shall remit such amount to the Owner Trustee on behalf of Purchaser and (ii) to
the extent that the aggregate Principal Balance of the Student Loans listed on
the Student Loan Transmittal Summary Form is greater than the aggregate
Principal Balance stated on the Bill of Sale, the Owner Trustee, on behalf of
the Purchaser, shall furnish such amount to the Seller. Such reconciliation
payment shall be made from time to time but no less frequently than
semi-annually.
SECTION 12. LIMITATION OF LIABILITY OF OWNER TRUSTEE
Notwithstanding anything contained herein to the contrary, this Master
Sales Agreement and any Sales Agreement have been signed by Fleet National Bank
not in its individual capacity but solely in its capacity as Owner Trustee for
Purchaser and in no event shall Fleet National Bank in its individual capacity
have any liability for the representations, warranties, covenants, agreements or
other obligations of Purchaser, under this Master Sales Agreement or any Sales
Agreement or in any of the certificates, notices
- 8 -
<PAGE> 9
or agreements delivered pursuant hereto, as to all of which recourse shall be
had solely to the assets of Purchaser or the Seller, as the case may be.
SECTION 13. EXPENSES
Except as otherwise provided herein, each party to this Master Sales
Agreement or any Sales Agreement shall pay its own expense incurred in
connection with the preparation, execution and delivery of this Master Sales
Agreement and any Sales Agreement and the transactions contemplated herein or
therein.
SECTION 14. SURVIVAL OF COVENANTS/SUPERSESSION
All covenants, agreements, representations and warranties made herein
and in or pursuant to any Sales Agreements executed pursuant to this Master
Sales Agreement shall survive the consummation of the purchase of the Student
Loans provided for in each Sales Agreement. All covenants, agreements,
representations and warranties made or furnished pursuant hereto by or on behalf
of Seller shall bind and inure to the benefit of any successors or assigns of
Purchaser and shall survive with respect to each Student Loan. Each Sales
Agreement supersedes all previous agreements and understandings between
Purchaser and Seller with respect to the subject matter thereof. This Master
Sales Agreement and any Sales Agreement may be changed, modified or discharged,
and any rights or obligations hereunder may be waived, only by a written
instrument signed by a duly authorized officer of the party against whom
enforcement of any such waiver, change, modification or discharge is sought. The
waiver by Purchaser of any covenant, agreement, representation or warranty
required to be made or furnished by Seller or the waiver by Purchaser of any
provision herein contained or contained in any Sales Agreement shall not be
deemed to be a waiver of any breach of any other covenant, agreement,
representation, warranty or provision herein contained, nor shall any waiver or
any custom or practice which may evolve between the parties in the
administration of the terms hereof or of any Sales Agreement, be construed to
lessen the right of Purchaser to insist upon the performance by Seller in strict
accordance with said terms.
SECTION 15. COMMUNICATION AND NOTICE REQUIREMENTS
All communications, notices and approvals provided for hereunder shall
be in writing and mailed or delivered to Seller or Purchaser, as the case may
be, addressed as set forth in the Sales Agreement or at such other address as
either party may hereafter designate by notice to the other party. Notice given
in any such communication, mailed to Seller or Purchaser by appropriately
addressed registered mail, shall be deemed to have been given on the day
following the date of such mailing.
SECTION 16. FORM OF INSTRUMENTS
All instruments and documents delivered in connection with this Master
Sales Agreement and any Sales Agreement, and all proceedings to be taken in
connection with this Master Sales Agreement and any Sales Agreement and the
transactions contemplated herein and therein, shall be in a form as set forth in
the attachments hereto, and Purchaser shall have received copies of such
documents as it or its counsel shall reasonably request in connection therewith.
Any instrument or document which is substantially in the same form as an
Attachment hereto or a recital herein will be deemed to be satisfactory as to
form.
SECTION 17. AMENDMENT
This Master Sales Agreement and any Sales Agreement may be amended by
the parties thereto without the consent of the related Noteholders or
Certificateholders for the purpose of adding any provisions
- 9 -
<PAGE> 10
to or changing in any manner or eliminating any of the provisions of such Master
Sales Agreement and Sales Agreements or of modifying in any manner the rights of
such Noteholders or Certificateholders; provided that such action will not, in
the opinion of counsel satisfactory to the related Indenture Trustee, materially
and adversely affect the interest of any such Noteholder or Certificateholder.
In addition, this Master Sales Agreement and any Sales Agreement may
also be amended from time to time by Seller, the Owner Trustee and Purchaser,
with the consent of the Noteholders of Notes evidencing a majority of the
Outstanding Amount of the Notes and the consent of the Certificateholders of
Certificates evidencing a majority of the Certificate Balance, for the purpose
of adding any provisions to or changing in any manner or eliminating any of the
provisions of this Master Sales Agreement or any Sales Agreements or of
modifying in any manner the rights of the Noteholders or the Certificateholders;
provided, however, that no such amendment shall (a) increase or reduce in any
manner the amount of, or accelerate or delay the time of, collections of
payments with respect to Student Loans or distributions that shall be required
to be made for the benefit of the Noteholders or the Certificateholders or (b)
reduce the aforesaid percentage of the Outstanding Amount of the Notes and the
Certificate Balance of Certificates, the Noteholders or the Certificateholders
of which are required to consent to any such amendment, without the consent of
all outstanding Noteholders and Certificateholders.
Promptly after the execution of any such amendment or consent (or, in
the case of the Rating Agencies, five Business Days prior thereto), the Owner
Trustee shall furnish written notification of the substance of such amendment or
consent to the Indenture Trustee, each Certificateholder, and each of the Rating
Agencies.
It shall not be necessary for the consent of Certificateholders or
Noteholders pursuant to this Section to approve the particular form of any
proposed amendment or consent, but it shall be sufficient in such consent shall
approve the substance thereof.
Prior to the execution of any amendment to this Master Sales Agreement,
the Owner Trustee shall be entitled to receive and rely upon an Opinion of
Counsel stating that execution of such amendment is authorized or permitted by
this Agreement. The Owner Trustee may, but shall not be obligated to, enter into
any such amendment which affects the Owner Trustee's own rights, duties or
immunities under this Master Sales Agreement or otherwise.
SECTION 18. NON-PETITION COVENANTS
Notwithstanding any prior termination of this Master Sales Agreement,
Seller and the Owner Trustee shall not acquiesce, petition or otherwise invoke
or cause Purchaser to invoke the process of any court or government authority
for the purpose of commencing or sustaining a case against Purchaser under any
Federal or state bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignees, trustee, custodian, sequestrator or other similar
official of Purchaser or any substantial part of its property, or ordering the
winding up or liquidation of the affairs of the Purchaser.
- 10 -
<PAGE> 11
SECTION 19. GOVERNING LAW
This Master Sales Agreement and any Sales Agreement shall be government
by and construed in accordance with the laws of the Commonwealth.
NELLIE MAE EDUCATION FUNDING, LLC
(Seller)
By: /s/ Lawrence W. O'Toole
-----------------------------------------------------
Name: Lawrence W. O'Toole
Title: President
NELLIE MAE EDUCATION LOAN TRUST
(Purchaser)
By: Fleet National Bank, not in its individual capacity
but solely as Owner Trustee
By: /s/ Chi C. Ma
------------------------------------------------------
Name: Chi Ma
Title: Assistant Vice President
FLEET NATIONAL BANK, not in its individual
capacity but solely as Owner Trustee
By: /s/ Chi C. Ma
------------------------------------------------------
Name: Chi Ma
Title: Assistant Vice President
- 11 -
<PAGE> 12
ATTACHMENT A
SALES AGREEMENT
Dated as of ________ ___, 1996
Nellie Mae Education Funding, LLC ("Seller") hereby offers for sale to
the Fleet National Bank, as Owner Trustee for the benefit of Nellie Mae
Education Loan Trust (the "Trust" or the "Purchaser") under the Trust Agreement
dated as of June 1, 1996 between Seller and the Owner Trustee, the entire right,
title and interest of Seller in the Student Loans described in the Bill of Sale
and Student Loan Transmittal Summary Form incorporated herein and, to the extent
indicated below, the Owner Trustee for the benefit of the Trust accepts Seller's
offer. In order to qualify as Qualified Loans, no payment of principal or
interest shall be more than sixty (60) days Delinquent as of the Cutoff Date
which date shall be ________ __, 1996. Notwithstanding the foregoing, to the
extent the Seller is deemed to retain any right, title or interest in the
Student Loans, the Seller grants to the Owner Trustee for the benefit of the
Trust a security interest therein.
TERMS, CONDITIONS AND COVENANTS
In consideration of the Purchase Price, Seller hereby sells to the
Owner Trustee for the benefit of the Trust the entire right, title and interest
of Seller in the Student Loans accepted for purchase, subject to all the terms
and conditions of the Master Terms Sales Agreement ("Master Sales Agreement")
and any amendments thereto, incorporated herein by reference, among Seller, the
Trust and the Owner Trustee. The Purchase Price of the Students Loans shall
equal $________ .
This document shall constitute a Sales Agreement as referred to in the
Master Sales Agreement and, except as modified herein, each term used herein
shall have the same meaning as in the Master Sales Agreement. All references in
the Master Sales Agreement to Student Loans or Qualified Loans shall be deemed
to refer to the Students Loans governed by this Sales Agreement. Seller hereby
makes, as of the date hereof, all the representations and warranties contained
in the Master Sales Agreement and makes such representations and warranties with
respect to the Student Loans governed by this Sales Agreement.
Seller authorizes the Owner Trustee for the benefit of the Trust to use
a copy of the Bill of Sale, including the Student Loan Transmittal Summary Form
attached to the Bill of Sale, as official notification to any Guarantor of
assignment to the Owner Trustee on behalf of the Trust of the Student Loans on
the date of purchase.
The parties hereto intend that the transfer of Student Loans described
in the Bill of Sale and Student Loan Transmittal Summary Form be, and be
construed as, a valid sale of such Student Loans from Seller to the Owner
Trustee for the benefit of the Trust. However, in the event that notwithstanding
the intention of the parties, such transfer is deemed to be a transfer for
security, then Seller hereby grants to the Owner Trustee for the benefit of the
Trust a first priority security interest in and to all Student Loans described
in the Bill of Sale and Student Loan Transmittal Summary Form to secure a loan
in an amount equal to the Purchase Price of such loans.
A-1
<PAGE> 13
NELLIE MAE EDUCATION FUNDING, LLC NELLIE MAE EDUCATION LOAN TRUST
(SELLER) (PURCHASER)
By: Fleet National Bank, as Owner
Trustee
By: By:
-------------------------- -------------------------------------
Name: Name:
------------------------ -----------------------------------
Title: Title:
----------------------- ----------------------------------
FLEET NATIONAL BANK,
not in its individual capacity but
solely as Owner Trustee
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
A-2
<PAGE> 14
SALES AGREEMENT
BLANKET ENDORSEMENT DATED , 1996
------------
Nellie Mae Education Funding, LLC ("Seller"), by execution of this
instrument, hereby endorses the attached promissory note which is one (1) of the
promissory notes ("the Notes") described in the Bill of Sale executed by Seller
in favor of the Fleet National Bank as the Owner Trustee for the benefit of
Nellie Mae Education Loan Trust ("Purchaser"). This endorsement is in blank,
unrestricted form and without recourse except as provided in Section 6 of the
Master Terms Sales Agreement referred to in the Sales Agreement among Seller,
Purchaser, and the Owner Trustee which covers this promissory note.
This endorsement may be effected by attaching this instrument to each
or any of the Notes.
Notwithstanding the foregoing, Seller agrees to individually endorse
each Note in the form provided by Purchaser as Purchaser may from time to time
require or if such individual endorsement is required by any Guarantor of the
Note.
THE SALE AND PURCHASE OF THE LOANS SHALL BE SUBJECT TO THE TERMS, CONDITIONS A
ND COVENANTS, INCLUDING THE BLANKET ENDORSEMENT, AS SET FORTH IN THE SALES
AGREEMENT. BY EXECUTION HEREOF, SELLER ACKNOWLEDGES THAT SELLER HAS READ,
UNDERSTANDS AND AGREES TO BE BOUND BY ALL TERMS, CONDITIONS AND COVENANTS OF THE
SALE AGREEMENT. THE SALE AND PURCHASE SHALL BE CONSUMMATED UPON PURCHASER'S
PAYMENT TO SELLER OF THE PURCHASE PRICE AND, UNLESS OTHERWISE AGREED BY SELLER
AND PURCHASER, SHALL BE EFFECTIVE AS OF THE DATE OF THE BILL OF SALE.
--------------------------------------------
SELLER PURCHASER
- --------------------------------- --------------------------------------------
Fleet National Bank, not in this individual
Nellie Mae Education Funding, LLC capacity but solely as Owner Trustee for the
50 Braintree Hill Park benefit of the Nellie Mae Education Loan
Suite 300 Trust under the Trust Agreement dated
Braintree, Massachusetts 02184 , 1996
---------
By: By:
------------------------------ -------------------------------------
(Signature of Authorized (Signature of Authorized
Officer of Seller) Officer for Purchaser)
Name: Name:
---------------------------- -----------------------------------
Title: Title:
--------------------------- ----------------------------------
Date of Purchase: , 1996
---------
--------------------------------------------
- --------------------------------------------------------------------------------
NOTE: Boxed areas on this form are to be completed by Purchaser
- --------------------------------------------------------------------------------
- 1 -
<PAGE> 15
BILL OF SALE DATED , 1996
---------
The undersigned ("Seller"), for value received and pursuant to the
terms and conditions of Sale Agreement Number 1 ("Sales Agreement") among Nellie
Mae Education Loan Trust ("Purchaser"), and Fleet National Bank, as Owner
Trustee for the benefit of Purchaser under the Trust Agreement dated as of June
1, 1996 between Purchaser and the Owner Trustee, does hereby sell, assign,
transfer and convey to the Owner Trustee for the benefit of Purchaser and its
assignees all right, title and interest of Seller, in the Student Loans
identified herein which the Owner Trustee for the benefit of Purchaser has
accepted for purchase. The portfolio accepted for purchase by the Owner Trustee
for the benefit of Purchaser and the individual Borrower accounts are listed on
the Schedule A attached hereto.
Seller hereby makes the representations and warranties set forth in
Section 5 of the Master Terms Sales Agreement incorporated by reference in the
Sales Agreement. Seller authorizes the Owner Trustee on behalf of Purchaser to
use a copy of this document as official notification to any Guarantor of
assignment to the Owner Trustee for the benefit of Purchaser of the Loans on the
date of purchase.
--------------------------------------------
SELLER PURCHASER
- -------------------------------- --------------------------------------------
Fleet National Bank, not in this individual
capacity but solely as Owner Trustee for the
Nellie Mae Education Funding, LLC benefit of the Nellie Mae Education Loan
50 Braintree Hill Park Trust under the Trust Agreement dated
Suite 300 , 1996
Braintree, Massachusetts 02184 ---------
By: By:
----------------------------- -------------------------------------
(Signature of Authorized (Signature of Authorized
Officer of Seller) Officer for Purchaser)
Name: Name:
--------------------------- -----------------------------------
Title: Title:
-------------------------- ----------------------------------
Date of Purchase: , 1996
------------
--------------------------------------------
- --------------------------------------------------------------------------------
NOTE: Boxed areas on this form are to be completed by Purchaser.
- --------------------------------------------------------------------------------
- 2 -
<PAGE> 16
OFFICER'S CERTIFICATE
I, Lawrence W. O'Toole, President of the Nellie Mae Education Funding,
LLC (the "Seller"), hereby certify to Nellie Mae Education Loan Trust that:
1. The person(s) named below are at the date hereof the duly elected,
qualified and acting officers of Seller holding the offices indicated and the
signature following each name is the genuine signature of the person named:
TITLE NAME SIGNATURE
----- ---- ---------
Treasurer John F. Remondi
-------------------
2. Any of the above-named person(s) is duly authorized to sign
agreements provided for the sale of student loans to Nellie Mae Education Loan
Trust.
WITNESS my hand this 12th day of July ,1996.
By:
--------------------------------
Name: Lawrence W. O'Toole
Title: President
- 3 -
<PAGE> 1
EXHIBIT 99.4
FIRST SUPPLEMENTAL SALES AGREEMENT
Dated as of July 12, 1996
Nellie Mae Education Funding, LLC ("Seller") hereby offers for sale to
the Fleet National Bank, as Owner Trustee for the benefit of Nellie Mae
Education Loan Trust (the "Trust" or the "Purchaser") under the Trust Agreement
dated as of June 1, 1996 between Seller and the Owner Trustee, the entire right,
title and interest of Seller in the Student Loans described in the Bill of Sale
and Student Loan Transmittal Summary Form incorporated herein and, to the extent
indicated below, the Owner Trustee for the benefit of the Trust accepts Seller's
offer. In order to qualify as Qualified Loans, no payment of principal or
interest shall be more than sixty (60) days Delinquent as of the Cutoff Date
which date shall be July 12, 1996. Notwithstanding the foregoing, to the extent
the Seller is deemed to retain any right, title or interest in the Student
Loans, the Seller grants to the Owner Trustee for the benefit of the Trust a
security interest therein.
TERMS, CONDITIONS AND COVENANTS
In consideration of the Purchase Price, Seller hereby sells to the
Owner Trustee for the benefit of the Trust the entire right, title and interest
of Seller in the Student Loans accepted for purchase, subject to all the terms
and conditions of the Master Terms Sales Agreement ("Master Sales Agreement")
and any amendments thereto, incorporated herein by reference, among Seller, the
Trust and the Owner Trustee. The Purchase Price of the Students Loans shall
equal $63,616,418.93.
This document shall constitute a Sales Agreement as referred to in the
Master Sales Agreement and, except as modified herein, each term used herein
shall have the same meaning as in the Master Sales Agreement. All references in
the Master Sales Agreement to Student Loans or Qualified Loans shall be deemed
to refer to the Students Loans governed by this Sales Agreement. Seller hereby
makes, as of the date hereof, all the representations and warranties contained
in the Master Sales Agreement and makes such representations and warranties with
respect to the Student Loans governed by this Sales Agreement.
Seller authorizes the Owner Trustee for the benefit of the Trust to use
a copy of the Bill of Sale, including the Student Loan Transmittal Summary Form
attached to the Bill of Sale, as official notification to any Guarantor of
assignment to the Owner Trustee on behalf of the Trust of the Student Loans on
the date of purchase.
The parties hereto intend that the transfer of Student Loans described
in the Bill of Sale and Student Loan Transmittal Summary Form be, and be
construed as, a valid sale of such Student Loans from Seller to the Owner
Trustee for the benefit of the Trust. However, in the event that notwithstanding
the intention of the parties, such transfer is deemed to be a transfer for
security, then Seller hereby grants to the Owner Trustee for the benefit of the
Trust a first priority security interest in and to all Student Loans described
in the Bill of Sale and Student Loan Transmittal Summary Form to secure a loan
in an amount equal to the Purchase Price of such loans.
<PAGE> 2
IN WITNESS WHEREOF, the parties set their respective signatures below
as of this 12th day of July, 1996.
NELLIE MAE EDUCATION FUNDING, LLC NELLIE MAE EDUCATION LOAN TRUST
(SELLER) (PURCHASER)
By: Fleet National Bank, not in its
individual capacity but solely as
Owner Trustee
By: /s/ Lawrence W. O'Toole By: /s/ Chi C. Ma
---------------------------- ----------------------------------
Name: Lawrence W. O'Toole Name: Chi Ma
Title: President Title: Assistant Vice President
FLEET NATIONAL BANK,
not in its individual capacity
but solely as Owner Trustee
By: /s/ Chi C. Ma
----------------------------------
Name: Chi Ma
Title: Assistant Vice President
<PAGE> 3
FIRST SUPPLEMENTAL SALES AGREEMENT
BLANKET ENDORSEMENT DATED JULY 12, 1996
Nellie Mae Education Funding, LLC ("Seller"), by execution of this
instrument, hereby endorses the attached promissory note which is one (1) of the
promissory notes ("the Notes") described in the Bill of Sale executed by Seller
in favor of the Fleet National Bank as the Owner Trustee for the benefit of
Nellie Mae Education Loan Trust ("Purchaser"). This endorsement is in blank,
unrestricted form and without recourse except as provided in Section 6 of the
Master Terms Sales Agreement referred to in the First Supplemental Sales
Agreement among Seller, Purchaser and the Owner Trustee which covers this
promissory note.
This endorsement may be effected by attaching this instrument to each
or any of the Notes.
Notwithstanding the foregoing, Seller agrees to individually endorse
each Note in the form provided by Purchaser as Purchaser may from time to time
require or if such individual endorsement is required by any Guarantor of the
Note.
THE SALE AND PURCHASE OF THE LOANS SHALL BE SUBJECT TO THE TERMS, CONDITIONS AND
COVENANTS, INCLUDING THE BLANKET ENDORSEMENT, AS SET FORTH IN THE SALES
AGREEMENT. BY EXECUTION HEREOF, SELLER ACKNOWLEDGES THAT SELLER HAS READ,
UNDERSTANDS AND AGREES TO BE BOUND BY ALL TERMS, CONDITIONS AND COVENANTS OF THE
SALE AGREEMENT. THE SALE AND PURCHASE SHALL BE CONSUMMATED UPON PURCHASER'S
PAYMENT TO SELLER OF THE PURCHASE PRICE AND, UNLESS OTHERWISE AGREED BY SELLER
AND PURCHASER, SHALL BE EFFECTIVE AS OF THE DATE OF THE BILL OF SALE.
SELLER PURCHASER
- ---------------------------------- ------------------------------------------
Nellie Mae Education Funding, LLC Fleet National Bank, not in its individual
50 Braintree Hill Park capacity but solely as Owner Trustee
Suite 300
Braintree, Massachusetts 02184
By: /s/ Lawrence W. O'Toole By: /s/ Chi C. Ma
----------------------------- -----------------------------------
Name: Lawrence W. O'Toole Name: Chi Ma
Title: President Title: Assistant Vice President
Date of Purchase: July 12, 1996
- 1 -
<PAGE> 4
BILL OF SALE DATED JULY 12, 1996
The undersigned ("Seller"), for
value received and pursuant to the terms and conditions of the First
Supplemental Sales Agreement ("Sales Agreement") among Nellie Mae Education Loan
Trust ("Purchaser") and Fleet National Bank, as Owner Trustee for the benefit of
Purchaser under the Trust Agreement dated as of June 1, 1996 between Purchaser
and the Owner Trustee, does hereby sell, assign, transfer and convey to the
Owner Trustee for the benefit of Purchaser and its assignees all right, title
and interest of Seller, in the Student Loans identified herein which the Owner
Trustee for the benefit of Purchaser has accepted for purchase. The portfolio
accepted for purchase by the Owner Trustee for the benefit of Purchaser and the
individual Borrower accounts are listed on Schedule A attached hereto.
Seller hereby makes the
representations and warranties set forth in Section 5 of the Master Terms Sales
Agreement incorporated by reference in the Sales Agreement. Seller authorizes
the Owner Trustee on behalf of Purchaser to use a copy of this document as
official notification to any Guarantor of assignment to the Owner Trustee for
the benefit of Purchaser of the Loans on the date of purchase.
SELLER PURCHASER
- ---------------------------------- ------------------------------------------
Nellie Mae Education Funding, LLC Fleet National Bank, not in its individual
50 Braintree Hill Park capacity but solely as Owner Trustee
Suite 300
Braintree, Massachusetts 02184
By: /s/ Lawrence W. O'Toole By: /s/ Chi C. Ma
---------------------------- -------------------------------
Name: Lawrence W. O'Toole Name: Chi Ma
Title: President Title: Assistant Vice President
Date of Purchase: July 12, 1996
- 2 -
<PAGE> 5
FIRST SUPPLEMENTAL SALES AGREEMENT
Schedule A
<TABLE>
Number of Number of Principal Interest
Sale # Loans Accounts Balance Balance Purchase Price
--------- --------- ------------------------- --------------
<S> <C> <C> <C> <C> <C>
1 5,941 5,787 $64,934,150.00 $1,279,633.01 $63,616,418.93
</TABLE>
- 3 -
<PAGE> 1
EXHIBIT 99.5
ADMINISTRATION AGREEMENT
among
NELLIE MAE, INC.,
as Administrator
NELLIE MAE EDUCATION LOAN TRUST,
as Issuer
FLEET NATIONAL BANK
not in its individual capacity
but solely as Owner Trustee
and
STATE STREET BANK AND TRUST COMPANY,
not in its individual capacity
but solely as Indenture Trustee
Dated as of June 1, 1996
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I
SECTION 1.1 Definitions and Usage....................................................... 1
ARTICLE II
SECTION 2.1 Duties with Respect to the Basic Documents.................................. 2
SECTION 2.2 Duties with Respect to the Issuer........................................... 3
SECTION 2.3 Statements to Certificateholders and Noteholders............................ 4
SECTION 2.4 Non-Ministerial Matters..................................................... 5
SECTION 2.5 Extent of Obligations....................................................... 5
SECTION 2.6 Compensation................................................................ 5
SECTION 2.7 Administrator Expenses...................................................... 5
ARTICLE III
SECTION 3.1 Administrator's Certificate................................................. 6
SECTION 3.2 Annual Statement as to Compliance; Notice of Default........................ 6
ARTICLE IV
SECTION 4.1 Representation of Administrator............................................. 6
SECTION 4.2 Liability of Administrator; Indemnities..................................... 7
SECTION 4.3 Merger or Consolidation of, or Assumption of the Obligations of
Administrator............................................................... 8
SECTION 4.4 Limitation on Liability of the Administrator and Others..................... 9
SECTION 4.5 Administrator May Own Certificates or Notes................................. 9
SECTION 4.6 Resignation of Nellie Mae, Inc. as Administrator............................ 9
ARTICLE V
SECTION 5.1 Administrator Default...................................................... 10
SECTION 5.2 Appointment of Successor................................................... 11
SECTION 5.3 Notification to Noteholders and Certificateholders......................... 11
SECTION 5.4 Waiver of Past Defaults.................................................... 11
ARTICLE VI
SECTION 6.1 Termination................................................................ 12
ARTICLE VII
SECTION 7.1 Protection of Interests in Trust........................................... 12
</TABLE>
ii
<PAGE> 3
<TABLE>
<S> <C> <C>
ARTICLE VIII
SECTION 8.1 Independence of the Administrator.......................................... 12
SECTION 8.2 No Joint Venture........................................................... 12
SECTION 8.3 Other Activities of Administrator.......................................... 13
SECTION 8.4 Powers of Attorney......................................................... 13
SECTION 8.5 Amendment.................................................................. 13
SECTION 8.6 Assignment................................................................. 14
SECTION 8.7 Limitations on Rights of Others............................................ 14
SECTION 8.8 Assignment to Indenture Trustee............................................ 14
SECTION 8.9 Non-petition Covenants..................................................... 14
SECTION 8.10 Limitation of Liability of Owner Trustee and Indenture Trustee............. 14
SECTION 8.11 Governing Law.............................................................. 15
SECTION 8.12 Headings................................................................... 15
SECTION 8.13 Counterparts............................................................... 15
SECTION 8.14 Severability............................................................... 15
</TABLE>
iii
<PAGE> 4
ADMINISTRATION AGREEMENT
Nellie Mae, Inc. (the "Administrator"), Nellie Mae Education Loan Trust
(the "Issuer" or the "Trust"), Fleet National Bank, not in its individual
capacity but solely as Owner Trustee (the "Owner Trustee"), and State Street
Bank and Trust Company, not in its individual capacity but solely as Indenture
Trustee (the "Indenture Trustee") agree as follows:
WHEREAS, the Issuer was created pursuant to a Trust Agreement dated as
of June 1, 1996 (the "Trust Agreement") between Nellie Mae Funding Corporation,
LLC as Depositor, and Fleet National Bank, as Owner Trustee;
WHEREAS, the Issuer may issue from time to time, in one or more Series
and one or more Classes, Asset-Backed Notes (the "Notes") pursuant to the Master
Indenture dated as of June 1, 1996 (the "Indenture"), between the Issuer and the
Indenture Trustee and a related Terms Supplement;
WHEREAS, the Issuer may issue from time to time, in one or more
Classes, Asset-Backed Certificates (the "Certificates") pursuant to the Trust
Agreement and a related Trust Supplement;
WHEREAS, the Issuer has entered into or will enter into certain
agreements in connection with the issuance of the Notes and the Certificates,
including without limitation, the Sales Agreement, the Purchase Agreement, the
Servicing Agreement, the Guaranty Agreements, the Indenture and related Terms
Supplements, the Trust Agreement and related Trust Supplements and this
Administration Agreement (all such agreements being collectively referred to
herein as the "Basic Documents");
WHEREAS, pursuant to the Basic Documents, the Issuer, the Owner Trustee
and the Indenture Trustee are required to perform certain duties in connection
with (a) the Notes and the Trust Estate therefor pledged to the Indenture
Trustee pursuant to the Indenture and related Terms Supplements and (b) the
Certificates pursuant to the Trust Agreement and related Trust Supplements;
WHEREAS, pursuant to the Trust Agreement, the Owner Trustee is directed
to enter into this Agreement, and the Issuer and the Indenture Trustee desire to
enter into this Agreement, in order for the Administrator to perform certain of
the duties of the Issuer, the Indenture Trustee and the Owner Trustee referred
to in the preceding clause, and to provide such additional services consistent
with the terms of the Basic Documents as the Issuer and the Owner Trustee may
from time to time request;
WHEREAS, the Administrator has the capacity to provide the services
required hereby and is willing to perform such services for the Issuer, the
Owner Trustee and the Indenture Trustee on the terms set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and other good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties agree as follows:
ARTICLE I
SECTION 1.1 Definitions and Usage. Except as otherwise specified herein
or as the context may otherwise require, capitalized terms used but not
otherwise defined herein are defined in Exhibit A hereto, which also contains
rules as to usage that shall be applicable herein.
<PAGE> 5
ARTICLE II
SECTION 2.1 Duties with Respect to the Basic Documents. The
Administrator shall exercise the duties of the Issuer and the Owner Trustee
under the Indenture, each related Terms Supplement, the Trust Agreement and each
related Trust Supplement, as set forth below. The Administrator shall monitor
the performance of the Issuer and shall advise the Owner Trustee when action by
the Issuer or the Owner Trustee is necessary to comply with the Issuer's or the
Owner Trustee's duties under the Indenture, each related Terms Supplement, the
Trust Agreement and any of the other Basic Documents. The Administrator shall
prepare for execution, if required, by the Issuer or shall cause the preparation
by other appropriate persons of all such documents, reports, filings,
instruments, certificates and opinions as it shall be the duty of the Issuer to
prepare, file or deliver pursuant to the Indenture, each related Terms
Supplement, the Trust Agreement or any of the other Basic Documents. In
furtherance of the foregoing, the Administrator shall take all appropriate
action, including but not limited to, such actions as outlined herein,
(references, unless otherwise noted, are to sections of the Indenture):
a. preparing or obtaining the documents and instruments required
for authentication of the Notes and delivering the same to the
Indenture Trustee (Section 2.3);
b. preparing, obtaining or filing the instruments, opinions and
certificates and other documents required for the release of
collateral (Section 2.14);
c. obtaining and preserving the Issuer's qualification to do
business in each jurisdiction in which such qualification is
or shall be necessary to protect the validity and
enforceability of the Indenture, the Notes and each instrument
and agreement included in the Indenture Trust Estate (Section
5.10);
d. preparing all supplements, amendments, financing statements,
continuation statements, instruments of further assurance and
other instruments, in accordance with Section 5.3 of the
Indenture, necessary to protect the Indenture Trust Estate
(Section 5.3 and 5.2);
e. the delivery by the Issuer of the Opinion of Counsel on the
Closing Date and the annual delivery of Opinions of Counsel,
in accordance with Section 5.10 of the Indenture, as to the
Indenture Trust Estate, and the annual delivery of the
Officers' Certificate of the Issuer and certain other
statements, in accordance with Section 5.12 of the Indenture,
as to compliance with the Indenture (Sections 5.10 and 5.12);
f. in the event of a Servicer Default, the taking of all
reasonable steps available to enforce the Issuer's rights
under the Basic Documents in respect of such Servicer Default
(Section 5.4);
g. monitoring the Issuer's obligations as to the satisfaction and
discharge of the Indenture and preparation of an Officers'
Certificate of the Issuer and obtaining of the Opinion of
Counsel and the Independent Certificate relating thereto
(Section 10.1);
h. sale of the Indenture Trust Estate in a commercially
reasonable manner if an Event of Default has occurred and is
continuing (Section 7.1) or an Insolvency Event with respect
to the Seller has occurred and is continuing (Section 6.5(b));
i. preparing and, after execution by the Issuer, filing with the
Commission, any applicable State agencies and the Indenture
Trustee, documents required to be filed on a periodic basis
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with, and summaries thereof as may be required by rules and
regulations prescribed by, the Commission and any applicable
State agencies (Section 8.3);
j. the preparation of an Issuer Request and Officer's Certificate
of the Issuer and the obtaining of an Opinion of Counsel and
Independent Certificates, if necessary, for the release of the
Indenture Trust Estate (Sections 10.3 and 10.4);
k. the preparation of Issuer Orders and the obtaining of Opinions
of Counsel with respect to the execution of supplemental
indentures (Sections 9.1, 9.2 and 9.3);
l. the preparation of or obtaining of the documents and
instruments required for the execution and authentication of
new Notes conforming to any supplemental indenture and the
delivery of the same to the Owner Trustee and the Indenture
Trustee, respectively (Section 9.6);
m. the preparation of all Officers' Certificates of the Issuer,
and the coordination of obtaining Opinions of Counsel and
Independent Certificates with respect to any requests by the
Issuer of the Indenture Trustee to take any action under the
Indenture (Section 11.10 (a));
n. the preparation and delivery of Officers' Certificates of the
Issuer and the obtaining of Independent Certificates, if
necessary, for the release of property from the lien of the
Indenture (Section 11.10 (b));
o. the preparation and delivery to Noteholders and the Indenture
Trustee of any agreements with respect to notice provisions
(Section 11.5);
p. the recording of the Indenture, if applicable (Section 11.13);
q. the preparation and delivery of investment instructions to the
Indenture Trustee (Section 4.9);
r. maintain the books and records of the Trust (Section 5.4(a) of
Trust Agreement);
s. file the tax returns of the Trust and make applicable
elections as may be required under applicable under any
applicable stated or federal statute or rules so as to
maintain the Trust's characterization as a partnership for
federal income tax purposes (Section 5.4(c) of Trust
Agreement); and
t. cause tax returns to be signed as required by law (Section
5.4(d) of Trust Agreement).
SECTION 2.2 Duties with Respect to the Issuer.
A. In addition to the duties of the Administrator set forth above and
in the other Basic Documents, the Administrator shall perform such calculations
and shall prepare for execution by the Issuer or the Owner Trustee or shall
cause the preparation by other appropriate persons of all such documents,
reports, filings, instruments, certificates and opinions as it shall be the duty
of the Issuer or the Owner Trustee to prepare, file or deliver pursuant to the
Basic Documents, and upon notice to the Owner Trustee shall take all appropriate
action that it is the duty of the Issuer to take pursuant to the Basic
Documents. Subject to Section 8.1, and in accordance with the directions of the
Owner Trustee, the Administrator shall administer, perform or supervise the
performance of such other activities in connection with the Trust Estate
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(including the Basic Documents) as are not covered by any of the foregoing
provisions and as are expressly requested by the Owner Trustee and are
reasonably within the capability of the Administrator. Duties of the
Administrator with respect to the Financed Loans shall include management of the
Financed Loan portfolio, including servicing oversight, audit and review,
pre-claims activity and post-default collection activity, which activities shall
be performed either by the Administrator or by a third-party contractor selected
by the Administrator.
B. The Administrator shall perform the duties of the Administrator
specified in Section 10.2 of the Trust Agreement required to be performed in
connection with the resignation or removal of the Owner Trustee, and any other
duties expressly required to be performed by the Administrator under the Trust
Agreement and the other Basic Documents.
C. In carrying out the foregoing duties or any of its other obligations
under this Agreement, the Administrator may enter into transactions with or
otherwise deal with any of its Affiliates; provided, however, that the terms of
any such transactions or dealings shall be, in the Administrator's opinion, no
less favorable to the Issuer than would be available from unaffiliated parties.
SECTION 2.3 Statements to Certificateholders and Noteholders. On each
Distribution Date the Administrator will provide instructions as to the payments
which will take place on that day including:
a. The amount of principal to be prepaid on the Notes;
b. The amount of principal to be prepaid on the Certificates;
c. The amount of interest to be paid on the Notes;
d. The amount of interest to be paid on the Certificates;
e. The amount of the Administration Fee if any, to be paid; and
f. The amount of Servicing fee billed by the Servicer for the
preceding month to be transferred to the applicable subaccount
within the Administration Account.
Additionally on the 20th of each month, or the next Business Day if
such day is not a Business Day, the Administrator will provide to the Owner
Trustee, the Indenture Trustee and the Rating Agencies the following information
all as of the preceding month end:
g. The aggregate Outstanding principal balance of Notes;
h. The aggregate Outstanding Certificate Balance;
i. The balance of each Account in the Debt Service Reserve Fund;
j. The total Financed Loans outstanding;
k. Summary of delinquent Financed Loans;
l. The Primary Parity Trigger and the Secondary Parity Trigger;
m. The weighted average interest rate on the Financed Loans; and
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n. The aggregate amount of Financed Loans repurchased by the
Seller or purchased by the Servicer during the preceding
month.
The Administrator shall also provide instructions for the periodic
payment of fees to the Rating Agencies and for the annual payment of fees to and
the periodic payment for reimbursement of out-of-pocket expenses incurred by the
Indenture Trustee and the Owner Trustee.
A copy of the statements referred to above may be obtained by any
Certificate Owner or Noteholder by a written request to the Owner Trustee or the
Indenture Trustee, respectively, addressed to the respective Corporate Trust
Office.
SECTION 2.4 Non-Ministerial Matters. With respect to matters that in
the reasonable judgment of the Administrator are non-ministerial, the
Administrator shall not take any action unless within a reasonable time before
the taking of such action, the Administrator shall have notified the Rating
Agencies and the Owner Trustee of the proposed action and the Owner Trustee
shall not have withheld consent or provided an alternative direction. For the
purpose of the preceding sentence, "non-ministerial matters" shall include:
a. the amendment of or any supplement to the Indenture;
b. the initiation of any claim or lawsuit by the Issuer and the
compromise of any action, claim or lawsuit brought by or
against the Issuer (other than in connection with the
collection of the Financed Loans);
c. the amendment, change or modification of the Basic Documents;
d. the appointment of successor Note Registrars, successor Paying
Agents and successor Indenture Trustees pursuant to the
Indenture or the appointment of successor administrators or
successor servicers, or the consent to the assignment by the
Note Registrar, Paying Agent or Indenture Trustee of its
obligations under the Indenture; and
e. the removal of the Indenture Trustee.
SECTION 2.5 Extent of Obligations. Except as expressly provided herein
or in the other Basic Documents, the Administrator shall not be obligated to,
and shall not (1) make any payments to the Noteholders under the Basic
Documents, (2) take any other action that the Issuer directs the Administrator
not to take on its behalf, (3) in connection with its duties hereunder assume
any indemnification obligation of any other person or (4) service the Financed
Loans.
SECTION 2.6 Compensation. As compensation for the performance of the
Administrator's obligations under this Agreement and as reimbursement for its
expenses related thereto, the Administrator shall be entitled on each
Distribution Date to an amount, prior to the date that is one year after the
Closing Date, equal to one-twelfth (1/12) of forty hundredths of one percent
(0.40%) of the principal of the Financed Loans Outstanding as of the end of the
prior month and, thereafter, equal to one-twelfth (1/12) of twenty hundredths of
one percent (0.20%) of the principal of the Financed Loans Outstanding as of the
end of the prior month, plus in either case all reasonable out-of-pocket
expenses (payable in arrears), which shall be solely an obligation of the
Issuer.
SECTION 2.7 Administrator Expenses. The Administrator shall pay all
expenses incurred by it in connection with activities hereunder, including fees
and disbursements of independent accountants, taxes
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imposed on the Administrator and expenses incurred in connection with
distributions and reports to the Certificateholders and the Noteholders.
ARTICLE III
SECTION 3.1 Administrator's Certificate.
On the Business Day that a payment is made to the Servicer, the
Administrator shall deliver to the Indenture Trustee an Officer's Certificate of
the Administrator containing all information necessary for the Indenture Trustee
to pay the Servicer on such date.
SECTION 3.2 Annual Statement as to Compliance; Notice of Default.
A. The Administrator shall deliver to the Owner Trustee and the
Indenture Trustee on or before 120 days after the end of the fiscal year of the
Administrator, an Officer's Certificate of the Administrator dated as of
December 31 of the preceding year, stating that (i) a review of the activities
of the Administrator during the preceding 12-month period (or, in the case of
the first such certificate, during the period from the Closing Date to December
31, 1996) and of its performance under this Agreement has been made under such
officers' supervision and (ii) to the best of such officers' knowledge, based on
such review, the Administrator has fulfilled its obligations in all material
respects under this Agreement and throughout such year or, if there has been a
material default in the fulfillment of any such obligation, specifying each such
material default known to such officers and the nature and status thereof. The
Indenture Trustee shall send a copy of each such Officers' Certificate to the
Rating Agencies. A copy of each such Officers' Certificate may be obtained by
any Certificateholder or Noteholder by a request in writing to the Owner Trustee
addressed to its Corporate Trust Office, together with evidence satisfactory to
the Owner Trustee that such person is one of the foregoing parties. Upon the
telephone request of the Owner Trustee, the Indenture Trustee will promptly
furnish to the Owner Trustee a list of Noteholders as of the date specified by
the Owner Trustee.
B. The Administrator shall deliver to the Owner Trustee, the Indenture
Trustee and the Rating Agencies, promptly after having obtained knowledge
thereof, but in no event later than five Business Days thereafter, written
notice in an Officers' Certificate of the Administrator of any event which with
the giving of notice or lapse of time, or both, would become an Administrator
Default.
ARTICLE IV
SECTION 4.1 Representations of Administrator. Nellie Mae, Inc., as
Administrator, makes the following representations on which the Issuer is deemed
to have relied in acquiring the Financed Loans. The representations speak as of
the execution and delivery of this Agreement and as of the Closing Date and
shall survive the sale of the Financed Loans to the Owner Trustee on behalf of
the Issuer and the pledge thereof to the Indenture Trustee pursuant to the
Indenture.
A. Organization and Good Standing. The Administrator is duly organized
and validly existing with the power and authority to own its properties and to
conduct its business as such properties are currently owned and such business is
presently conducted.
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B. Power and Authority. The Administrator has the corporate power and
authority to execute and deliver this Agreement and to carry out its terms, and
the execution, delivery and performance of this Agreement have been duly
authorized by the Administrator by all necessary corporate action.
C. Binding Obligation. This Agreement constitutes a legal, valid and
binding obligation of the Administrator enforceable in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization and similar
laws relating to creditors' rights generally and subject to general principles
of equity.
D. No Violation. The consummation of the transactions contemplated by
this Agreement and the fulfillment of the terms hereof or thereof do not
conflict with, result in any breach of any of the terms and provisions of, nor
constitute (with or without notice or lapse of time or both) a default under,
the charter or by-laws of the Administrator, or any indenture, agreement or
other instrument to which the Administrator is a party or by which it shall be
bound; nor 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 (other than pursuant to the Basic Documents); nor violate any law or,
to the knowledge of the Administrator, any order, rule or regulation applicable
to the Administrator of any court or of any Federal or state regulatory body,
administrative agency or other governmental instrumentality having jurisdiction
over the Administrator or its properties.
E. No Proceedings. There are no proceedings or investigations pending
against the Administrator or, to its best knowledge, threatened against the
Administrator, before any court, regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Administrator or its
properties: (i) asserting the invalidity of this Agreement or of the other Basic
Documents, the Notes or the Certificates, (ii) seeking to prevent the issuance
of the Notes or the Certificates or the consummation of any of the transactions
contemplated by this Agreement or any of the other Basic Documents, (iii)
seeking any determination or ruling that could reasonably be expected to have a
material and adverse effect on the performance by the Administrator of its
obligations under, or the validity or enforceability of, this Agreement, any of
the other Basic Documents, the Notes or the Certificates or (iv) seeking to
affect adversely the Federal or state income tax attributes of the Issuer, the
Notes or the Certificates.
F. All Consents. All authorizations, consents, orders or approvals of
or registrations or declarations with any court, regulatory body, administrative
agency or other government instrumentality required to be obtained, effected or
given by the Administrator in connection with the execution and delivery by the
Administrator of this Agreement and the performance by the Administrator of the
transactions contemplated by this Agreement have been duly obtained, affected or
given and are in full force and effect.
SECTION 4.2 Liability of Administrator; Indemnities. The Administrator
shall be liable in accordance herewith only to the extent of the obligations
specifically undertaken by the Administrator under this Agreement.
The Administrator shall indemnify, defend and hold harmless the Issuer,
the Certificateholders and the Noteholders and any of the officers, directors,
employees and agents of the Issuer from and against any and all costs, expenses,
losses, claims, damages and liabilities to the extent that such cost, expense,
loss, claim, damage or liability arose out of, or was imposed upon any such
person through, the negligence, willful misfeasance or bad faith of the
Administrator in the performance of its duties under this Agreement or by reason
of reckless disregard of its obligations and duties hereunder or thereunder.
The Administrator shall indemnify the Indenture Trustee in its
individual capacity and any of its officers, directors, employees and agents
against any and all loss, liability or expense (including attorneys'
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fees) incurred by it in connection with the performance of its duties under the
Indenture and the other Basic Documents. The Indenture Trustee shall notify the
Issuer and the Administrator promptly of any claim for which it may seek
indemnity. Failure by the Indenture Trustee to so notify the Issuer and the
Administrator shall not relieve the Issuer or the Administrator of its
obligations hereunder and under the other Basic Documents. The Administrator
shall defend the claim and the Administrator shall not be liable for the legal
fees and expenses of the Indenture Trustee after it has assumed such defense;
provided, however, that in the event that there may be a conflict between the
positions of the Indenture Trustee and the Administrator in conducting the
defense of such claim, the Indenture Trustee shall be entitled to separate
counsel, the fees and expenses of which shall be paid by the Administrator on
behalf of the Issuer. Neither the Issuer nor the Administrator need reimburse
any expense or indemnify against any loss, liability or expense incurred by the
Indenture Trustee through the Indenture Trustee's own willful misconduct,
negligence or bad faith.
The Administrator shall indemnify the Owner Trustee in its individual
capacity and any of its officers, directors, employees and agents against any
and all loss, liability, claims, damages, costs, penalties, taxes (excluding
taxes payable by it on any compensation received by it for its services as
trustee) or expense (including attorneys' fees) incurred by the Owner Trustee in
connection with the performance of its duties under the Trust Agreement and the
other Basic Documents provided, however, that neither the Issuer nor the
Administrator need reimburse any expense or indemnify against any loss,
liability or expense incurred by the Owner Trustee through the Owner Trustee's
own willful misconduct, negligence or bad faith.
The Owner Trustee shall notify the Administrator promptly of any claim
for which it may seek indemnity. Failure by the Owner Trustee to so notify the
Administrator shall not relieve the Administrator of its obligations hereunder
and under the other Basic Documents. The Administrator shall defend the claim
and the Administrator shall not be liable for the legal fees and expenses of the
Owner Trustee after it has assumed such defense; provided, however, that, in the
event that there may be a conflict between the positions of the Owner Trustee
and the Administrator in conducting the defense of such claim, the Owner Trustee
shall be entitled to separate counsel, the fees and expenses of which shall be
paid by the Administrator on behalf of the Issuer.
For purposes of this Section, in the event of the termination of the
rights and obligations of the Administrator (or any successor thereto pursuant
to Section 4.3) as Administrator pursuant to Section 5.1, or a resignation by
such Administrator pursuant to this Agreement, such Administrator shall be
deemed to be the Administrator pending appointment of a successor Administrator
pursuant to Section 5.2.
Indemnification under this Section shall survive the resignation or
removal of the Owner Trustee or the Indenture Trustee or the termination of this
Agreement and shall include reasonable fees and expenses of counsel and expenses
of litigation. If the Administrator shall have made any indemnity payments
pursuant to this Section and the person to or on behalf of whom such payments
are made thereafter collects any of such amounts from others, such person shall
promptly repay such amounts to the Administrator, without interest.
SECTION 4.3 Merger or Consolidation of, or Assumption of the
Obligations of Administrator. Any person (a) into which the Administrator may be
merged or consolidated, (b) which may result from any merger or consolidation to
which the Administrator shall be a party or (c) which may succeed to the
properties and assets of the Administrator substantially as a whole, shall be
the successor to the Administrator without the execution or filing of any
document or any further act by any of the parties to this Agreement; provided,
however, that the Administrator hereby covenants that it will not consummate any
of the foregoing transactions except upon satisfaction of the following: (i) the
surviving Administrator, if other than Nellie Mae, Inc. or an Affiliate,
executes an agreement of assumption to perform every obligation of the
Administrator under this Agreement, (ii) immediately after giving effect to such
transaction, no
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representation or warranty made pursuant to Section 4.1 shall have been breached
and no Administrator Default, and no event that, after notice or lapse of time,
or both, would become an Administrator Default shall have occurred and be
continuing, (iii) the surviving Administrator, if other than Nellie Mae, Inc. or
an Affiliate, shall have delivered to the Owner Trustee and the Indenture
Trustee an Officers' Certificate and an Opinion of Counsel each stating that
such consolidation, merger or succession and such agreement of assumption comply
with this section and that all conditions precedent, if any, provided for in
this Agreement relating to such transaction have been complied with, and that
the Rating Agencies shall have been satisfied with respect to such transaction,
(iv) unless Nellie Mae, Inc. or an Affiliate is the surviving entity, such
transaction will not result in a material adverse Federal or state tax
consequence to the Issuer, the Noteholders or the Certificateholders and (v)
unless Nellie Mae, Inc. or an Affiliate is the surviving entity, the
Administrator shall have delivered to the Owner Trustee and the Indenture
Trustee an Opinion of Counsel either (A) stating that, in the opinion of such
counsel, all financing statements and continuation statements and amendments
thereto have been executed and filed that are necessary fully to preserve and
protect the interest of the Owner Trustee and Indenture Trustee, respectively,
in the Trust Estate and reciting the details of such filings, or (B) stating
that, in the opinion of such counsel, no such action shall be necessary to
preserve and protect such interests. Anything in this Section 4.3 to the
contrary notwithstanding, the Administrator may at any time assign its rights,
obligations and duties under this Agreement to an Affiliate provided that the
Rating Agencies confirm that such assignment will not result in a downgrading or
a withdrawal of the ratings then applicable to the Notes and the Certificates.
SECTION 4.4 Limitation on Liability of the Administrator and Others.
Neither the Administrator nor any of its directors, officers, employees or
agents shall be under any liability to the Issuer, the Noteholders or the
Certificateholders, or to the Indenture Trustee or the Owner Trustee except as
provided under this Agreement for any action taken or for refraining from the
taking of any action pursuant to this Agreement or for errors in judgment;
provided, however, that these provisions shall not protect the Administrator or
any such person against any liability that would otherwise be imposed by reason
of willful misfeasance, bad faith or negligence in the performance of duties or
by reason of reckless disregard of obligations and duties under this Agreement.
The Administrator and any of its directors, officers, employees or agents may
rely in good faith on the advice of counsel or on any document of any kind,
prima facie properly executed and submitted by any person respecting any matters
arising hereunder.
Except as provided in this Agreement, the Administrator shall not be
under any obligation to appear in, prosecute or defend any legal action that
shall not be incidental to its duties to administer the Financed Loans and the
Trust in accordance with this Agreement and that in its opinion may involve it
in any expense or liability; provided, however, that the Administrator may
undertake any reasonable action that it may deem necessary or desirable in
respect of this Agreement and the other Basic Documents and the rights and
duties of the parties to this Agreement and the other Basic Documents and the
interests of the Certificateholders under the Trust Agreement and the
Noteholders under the Indenture.
SECTION 4.5 Administrator May Own Certificates or Notes. The
Administrator and any Affiliate thereof may in its individual or any other
capacity become the owner or pledgee of Certificates or Notes with the same
rights as it would have if it were not the Administrator or an Affiliate
thereof, except as expressly provided herein or in any other Basic Document.
SECTION 4.6 Resignation of Nellie Mae, Inc. as Administrator. Nellie
Mae, Inc. may resign from the obligations and duties imposed on it as
Administrator under this Agreement only in accordance with this Section 4.6.
Nellie Mae shall provide written notice of its intention to resign to the Owner
Trustee and the Indenture Trustee at the least 120 days prior to effective time
of the resignation and such written notice shall be confirmed in writing at the
earliest practicable time; provided, however, no such resignation shall become
effective until the Indenture Trustee or a successor Administrator shall have
assumed the responsibilities and
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obligations of Nellie Mae, Inc. in accordance with Section 5.2 hereof. Anything
in this Section 4.6 to the contrary notwithstanding, the Administrator may
resign at any time subsequent to the assignment of its duties and obligations
hereunder pursuant to Section 4.3.
ARTICLE V
SECTION 5.1 Administrator Default. If any one of the following events
(an "Administrator Default") shall occur and be continuing:
A. any failure by the Administrator to direct the Indenture
Trustee to make any required distributions from any of the
Trust Funds and Accounts which failure continues unremedied
for five Business Days after written notice of such failure is
received by the Administrator from the Indenture Trustee or
the Owner Trustee or after discovery of such failure by an
officer of the Administrator; or
B. any failure by the Administrator duly to observe or to perform
in any material respect any other covenant or agreement of the
Administrator set forth in this Agreement or any other Basic
Document, which failure shall (i) materially and adversely
affect the rights of Noteholders or Certificateholders and
(ii) continue unremedied for a period of 60 days after the
date on which written notice of such failure, requiring the
sale to be remedied, shall have been given (A) to the
Administrator by the Indenture Trustee or the Owner Trustee or
(B) to the Administrator, the Indenture Trustee and the Owner
Trustee by the Noteholders or Certificateholders, as
applicable, representing not less than 25% of the Outstanding
amount of the Notes or 25% of the Outstanding Certificate
Balance (including any Certificates owned by the Seller); or
C. an Insolvency Event occurs with respect to the Administrator;
then, and in each and every case, so long as the Administrator Default shall not
have been remedied, either the Indenture Trustee, Owner Trustee or the
Noteholders evidencing not less than 25% of the Outstanding Amount of the Notes
shall give written notice to the Administrator of such Administrator Default and
the Indenture Trustee and the Owner Trustee, may then terminate all the rights
and obligations (other than the obligations set forth in Section 4.2) of the
Administrator under this Agreement. On or after the receipt by the Administrator
of such written notice, all authority and power of the Administrator under this
Agreement, whether with respect to the Notes, the Certificates, the Financed
Loans or otherwise, shall, without further action, pay to and be vested in the
Indenture Trustee or such successor Administrator as may be appointed under
Section 5.2; and, without limitation, the Indenture Trustee and the Owner
Trustee are hereby authorized and empowered to execute and deliver, for the
benefit of the predecessor Administrator, as attorney-in-fact or otherwise, any
and all documents and other instruments, and to do or accomplish all other acts
or things necessary or appropriate to effect the purposes of such notice of
termination. The predecessor Administrator shall cooperate with the successor
Administrator, the Indenture Trustee and the Owner Trustee in effecting the
termination of the responsibilities and rights of the predecessor Administrator
under this Agreement. All reasonable costs and expenses (including attorneys'
fees) incurred in connection with amending this Agreement to reflect such
succession as Administrator pursuant to this Section shall be paid by the
predecessor Administrator upon presentation of reasonable documentation of such
costs and expenses. Upon receipt of notice of the occurrence of an Administrator
Default, the Owner Trustee shall give notice thereof to the Rating Agencies.
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SECTION 5.2 Appointment of Successor.
A. Upon receipt by the Administrator of notice of termination pursuant
to Section 5.1, or the resignation by the Administrator in accordance with the
terms of this Agreement, the predecessor Administrator shall continue to perform
its functions as Administrator under this Agreement in the case of termination,
only until the date specified in such termination notice or, if no such date is
specified in a notice of termination, until receipt of such notice and, in the
case of resignation, until the date 120 days from the delivery to the Owner
Trustee and the Indenture Trustee of written notice of such resignation (or
written confirmation of such notice) in accordance with the terms of this
Agreement. In the event of the termination or resignation hereunder of the
Administrator, the Issuer shall appoint a successor Administrator acceptable to
the Owner Trustee and the Indenture Trustee, and the successor Administrator
shall accept its appointment by a written assumption in form acceptable to the
Indenture Trustee. In the event that a successor Administrator has not been
appointed at the time when the predecessor Administrator has ceased to act as
Administrator in accordance with this section, the Indenture Trustee without
further action shall automatically be appointed the successor Administrator and
the Indenture Trustee shall be entitled to the Administration Fee.
Notwithstanding the above, the Indenture Trustee shall, if it shall be unwilling
or legally unable so to act, appoint or petition a court of competent
jurisdiction to appoint any established institution whose regular business shall
include the servicing of student loans, as the successor to the Administrator
under this Agreement.
B. Upon appointment, the successor Administrator (including the
Indenture Trustee acting as successor Administrator), shall be the successor in
all respects to the predecessor Administrator and shall be subject to all the
responsibilities, duties and liabilities placed on the predecessor Administrator
that arise thereafter or are related thereto and shall be entitled to an amount
agreed to by such successor Administrator (which shall not exceed the
Administration Fee unless such compensation arrangements will not result in a
downgrading or withdrawal of any rating on the Notes or the Certificates by
either Rating Agency) and all the rights granted to the predecessor
Administrator by the terms and provisions of this Agreement.
C. The Indenture Trustee, to the extent it is acting as successor
Administrator pursuant hereto and thereto, shall be entitled to resign to the
extent a qualified successor Administrator has been appointed and has assumed
all the obligations of the Administrator in accordance with the terms of this
Agreement and the other Basic Documents.
SECTION 5.3 Notification to Noteholders and Certificateholders. Upon
any termination or resignation of, or appointment of a successor to, the
Administrator pursuant to this Article V, the Owner Trustee shall give prompt
written notice thereof to Certificateholders and the Indenture Trustee shall
give prompt written notice thereof to Noteholders and the Rating Agencies
(which, in the case of any such appointment of a successor, shall consist of
prior written notice thereof to the Rating Agencies).
SECTION 5.4 Waiver of Past Defaults. The Noteholders evidencing a
majority of the Outstanding Amount of the Notes (or the Certificateholders
evidencing a majority of the Outstanding Certificate Balance, in the case of any
default which does not adversely affect the Indenture Trustee or the
Noteholders) may, on behalf of all Noteholders and Certificateholders, waive in
writing any default by the Administrator in the performance of its obligations
hereunder and any consequences thereof, except a default in making any required
deposits to or payments from any of the Trust Funds and Accounts (or giving
instructions regarding the same) in accordance with this Agreement. Upon any
such waiver of a past default, such default shall cease to exist, and any
Administrator Default arising therefrom shall be deemed to have been remedied
for every purpose of this Agreement. No such waiver shall extend to any
subsequent or other default or impair any right consequent thereto.
11
<PAGE> 15
ARTICLE VI
SECTION 6.1 Termination.
A. Sale of Trust Assets. Upon any sale of the assets of the Trust,
including pursuant to Section 9.2 of the Trust Agreement, the Administrator
shall instruct the Indenture Trustee in writing to deposit the net proceeds from
such sale after all payments and reserves therefrom (including the expenses of
such sale) have been made in the Revenue Fund. On the first Distribution Date
following the date on which such funds are deposited in the Revenue Fund, the
Administrator shall instruct the Indenture Trustee and the Owner Trustee to make
the distributions set forth in the Indenture and the Trust Supplement.
ARTICLE VII
SECTION 7.1 Protection of Interests in Trust.
A. The Administrator shall execute and file such financing statements
and cause to be executed and filed such continuation statements, all in such
manner and in such places as may be required by law fully to preserve, maintain,
and protect the interest of the Issuer, the Owner Trustee and the Indenture
Trustee in the Financed Loans and in the proceeds thereof. The Administrator
shall deliver to the Owner Trustee and the Indenture Trustee file-stamped copies
of, or filing receipts for, any document filed as provided above, as soon as
available following such filing.
B. The Administrator shall monitor the Seller and the Servicer
regarding any change in name, identity or corporate structure in any manner that
would, could or night make any financing statement or continuation statement
filed in accordance with paragraph A above seriously misleading within the
meaning of Section 9-402(7) of the UCC. The Administrator shall give the Owner
Trustee and the Indenture Trustee written notice and shall promptly file
appropriate amendments to all previously filed financing statements or
continuation statements.
C. The Administrator shall monitor the Seller and the Servicer
regarding any relocation of their principal executive office if, as a result of
such relocation, the applicable provisions of the UCC would require the filing
of any amendment of any previously filed financing or continuation statement or
of any new financing statement and shall promptly file any such amendment.
D. The Administrator shall, to the extent required by applicable law,
cause the Certificates and the Notes to be registered with the Commission
pursuant to Section 12(b) or Section 12(g) of the Exchange Act within the time
periods specified in such sections.
ARTICLE VIII
SECTION 8.1 Independence of the Administrator. For all purposes of this
Agreement, the Administrator shall be an independent contractor. Unless
expressly authorized by the Issuer, the Administrator shall have no authority to
act for or represent the Issuer or the Owner Trustee in any way and shall not
otherwise be deemed an agent of the Issuer or the Owner Trustee.
SECTION 8.2 No Joint Venture. Nothing contained in this Agreement (i)
shall constitute the Administrator and either of the Issuer or the Owner Trustee
as members of any partnership, joint venture, association, syndicate,
unincorporated business or other separate entity, (ii) shall be construed to
impose any
12
<PAGE> 16
liability as such on any of them or (iii) shall be deemed to confer on any of
them any express, implied or apparent authority to incur any obligation or
liability on behalf of the others.
SECTION 8.3 Other Activities of Administrator. Nothing herein shall
prevent the Administrator or its Affiliates from engaging in other businesses
or, in its sole discretion, from acting in a similar capacity as an
administrator for any other person or entity even though such person or entity
may engage in business activities similar to those of the Issuer, the Owner
Trustee or the Indenture Trustee.
SECTION 8.4 Powers of Attorney. The Owner Trustee and the Indenture
Trustee shall upon the written request of the Administrator furnish the
Administrator with any powers of attorney and other documents reasonably
necessary or appropriate to enable the Administrator to carry out its
administrative duties hereunder.
SECTION 8.5 Amendment. This Agreement (other than Sections 2.1 and 2.2)
may be amended by the Administrator, the Owner Trustee and the Indenture
Trustee, without the consent of any of the Noteholders or the
Certificateholders, to cure any ambiguity, to correct or supplement any
provisions in this Agreement or for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions in this Agreement or
of modifying in any rights of the Noteholders or the Certificateholders;
provided, however, that such action shall not, as evidenced by an Opinion of
Counsel delivered to the Owner Trustee and the Indenture Trustee, adversely
affect in any material respect the interests of any Noteholder or
Certificateholder.
Sections 2.1 and 2.2 may be amended from time to time by a written
amendment duly executed and delivered by the Owner Trustee, the Indenture
Trustee and the Administrator, without the consent of the Noteholders and the
Certificateholders, for the purpose of adding any provision to or changing in
any manner or eliminating any of the provisions of such Article; provided that
such amendment will not, in an Opinion of Counsel obtained on behalf of the
Issuer and satisfactory to the Indenture Trustee and the Owner Trustee,
materially and adversely affect the interest of any Noteholder or
Certificateholder.
This Agreement (other than Sections 2.1 and 2.2) may also be amended
from time to time by the Administrator, the Indenture Trustee and the Owner
Trustee, and Sections 2.1 and 2.2 may also be amended by the Owner Trustee, the
Administrator and the Indenture Trustee, with the consent of the Noteholders of
Notes evidencing a majority of the Outstanding amount of the Notes and the
consent of the Certificateholders of Certificates evidencing a majority of the
Certificate Balance, for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Agreement or of
modifying in any manner the rights of the Noteholders or the Certificateholders;
provided, however, that no such amendment shall (a) increase or reduce in any
manner the amount of, or accelerate or delay the timing of, collections of
payments with respect to Financed Loans or distributions that shall be required
to be made for the benefit of the Noteholders or the Certificateholders or (b)
reduce the aforesaid percentage of the Outstanding Amount of the Notes and the
Certificate Balance, the Noteholders or the Certificateholders of which are
required to consent to any such amendment, without the consent of all
Noteholders and Certificateholders.
Promptly after the execution of any such amendment (or, in the case of
the Rating Agencies, fifteen days prior thereto), the Owner Trustee shall
furnish written notification of the substance off such amendment to each
Certificateholder, the Indenture Trustee and each of the Rating Agencies.
It shall not be necessary for the consent of Certificateholders or
Noteholders pursuant to this section to approve the particular form of any
proposed amendment or consent, but it shall be sufficient if such consent shall
approve the substance thereof.
13
<PAGE> 17
Prior to the execution of any amendment to this Agreement, the Owner
Trustee and the Indenture Trustee shall be entitled to receive and rely upon an
Opinion of Counsel stating that the execution of such amendment is authorized or
permitted by this Agreement. The Owner Trustee and the Indenture Trustee may,
but shall not be obligated to, enter into any such amendment which affects the
Owner Trustee's or the Indenture Trustee's, as applicable, own rights, duties or
immunities under this Agreement or otherwise.
SECTION 8.6 Assignment. Notwithstanding anything to the contrary
contained herein, except as provided in Sections 4.3 and 4.6 of this Agreement,
this Agreement may not be assigned by the Administrator. This Agreement may be
assigned by the Owner Trustee only to its permitted successor pursuant to the
Trust Agreement.
SECTION 8.7 Limitations on Rights of Others. The provisions of this
Agreement are solely for the benefit of the Issuer, the Indenture Trustee and
the Owner Trustee and for the benefit of the Certificateholders and the
Noteholders, as third party beneficiaries, and nothing in this Agreement,
whether express or implied, shall be construed to give to any other person any
legal or equitable right, remedy or claim in the Trust Estate or under or in
respect of this Agreement or any covenants, conditions or provisions contained
herein.
SECTION 8.8 Assignment to Indenture Trustee. The Administrator hereby
acknowledges and consents to any grant by the Issuer to the Indenture Trustee
pursuant to the Indenture for the benefit of the Noteholders of a security
interest in all right, title and interest of the Issuer in, to and under the
Financed Loans and the assignment of any or all of the Issuer's rights and
obligations under this Agreement and the Sales Agreement to the Indenture
Trustee. The Administrator shall inform the Servicer of the assignment by the
Issuer to the Indenture Trustee pursuant to the Indenture for the benefit of the
Noteholder of any and all of the Issuer's rights and obligations under this
Agreement and under the Servicing Agreement.
SECTION 8.9 Non-petition Covenants.
A. Notwithstanding any prior termination of this Agreement, the
Administrator shall not, prior to the date which is one year and one day after
the termination of this Agreement, acquiesce, petition or otherwise invoke or
cause the Issuer to invoke the process of any court or government authority for
the purpose of commencing or sustaining a case against the Issuer under any
Federal or state bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar official
of the Issuer or any substantial part of its property, or ordering the winding
up or liquidation of the affairs of the Issuer.
B. Notwithstanding any prior termination of this Agreement, the
Administrator, the Issuer and the Owner Trustee shall not, prior to the date
which is one year and one day after the termination of this Agreement,
acquiesce, petition or otherwise invoke the process of any court or government
authority for the purpose of commencing or sustaining a case against the Seller
under any Federal or state bankruptcy, insolvency or similar law or appointing a
receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official of the Seller or any substantial part of its property, or
ordering the winding up or liquidation of the affairs of the Seller.
SECTION 8.10 Limitation of Liability of Owner Trustee and Indenture
Trustee.
A. Notwithstanding anything contained herein to the contrary, this
Agreement has been signed by Fleet National Bank not in its individual capacity
but solely in its capacity as Owner Trustee of the Issuer and in no event shall
Fleet National Bank in its individual capacity have any liability for the
representations, warranties, covenants, agreements or other obligations of the
Issuer or the Owner Trustee hereunder or in
14
<PAGE> 18
any of the certificates, notices or agreements delivered pursuant hereto, as to
all of which recourse shall be had solely to the assets of the Issuer.
B. Notwithstanding anything contained herein to the contrary, this
Agreement has been accepted by State Street Bank and Trust Company not in its
individual capacity but solely as Indenture Trustee and in no event shall State
Street Bank and Trust Company have any liability for the representations,
warranties, covenants, agreements or other obligations of the Issuer hereunder
or in any of the certificates, notices or agreements delivered pursuant hereto,
as to all of which recourse shall be had solely to the assets of the Issuer.
SECTION 8.11 Governing Law. This Agreement shall be construed in
accordance with the laws of the Commonwealth, without reference to its conflict
of law provisions, and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws.
SECTION 8.12 Headings. The section headings hereof have been inserted
for convenience of reference only and shall not be construed to affect the
meaning, construction or effect of this Agreement.
SECTION 8.13 Counterparts. This Agreement may be executed in
counterparts, each of which when so executed shall together constitute but one
and the some agreement.
SECTION 8.14 Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall 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.
Fleet National Bank acts solely as Owner Trustee and not in its
individual capacity and no trustee, shareholder, officer, employee or agent of
Fleet National Bank shall be held personally liable in connection with the
affairs of the Trust.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.
NELLIE MAE EDUCATION LOAN TRUST
by Fleet National Bank, not in its Individual capacity but
solely as Owner Trustee
By: /s/ Chi C. Ma
-------------------------------------------
Name: Chi Ma
Title: Assistant Vice President
15
<PAGE> 19
NELLIE MAE, INC., as Administrator
By: /s/ John F. Remondi
-----------------------------------------
Name: John F. Remondi
Title: Treasurer
FLEET NATIONAL BANK, not in its individual capacity
but solely as Owner Trustee
By: /s/ Chi C. Ma
-----------------------------------------
Name: Chi Ma
STATE STREET BANK AND TRUST COMPANY, not
in its individual capacity but solely as Indenture
Trustee
By: /s/ Patrick E. Thebado
------------------------------------------
Name: Patrick E. Thebado
Title: Assistant Vice President
16
<PAGE> 1
EXHIBIT 99.6
SECOND SUPPLEMENTAL PURCHASE AGREEMENT
Dated as of July 12, 1996
Nellie Mae, Inc. ("Nellie Mae") hereby offers for sale to Nellie Mae
Education Funding, LLC ("Funding") the entire right, title and interest of
Nellie Mae in the Student Loans described in the Bill of Sale and Student Loan
Transmittal Summary Form incorporated herein and, to the extent indicated below,
Funding accepts Nellie Mae's offer. In order to qualify as Qualified Loans, no
payment of principal or interest shall be more than sixty (60) days Delinquent
as of the Cutoff Date which date shall be July 12, 1996. Notwithstanding the
foregoing, to the extent Nellie Mae is deemed to retain any right, title or
interest in the Student Loans, Nellie Mae grants to Funding a security interest
therein.
TERMS, CONDITIONS AND COVENANTS
In consideration of the Purchase Price, Nellie Mae hereby sells,
transfer, convey and assign to Funding the entire right, title and interest of
Nellie Mae in the Student Loans accepted for purchase, subject to all the terms
and conditions of the Master Terms Purchase Agreement ("Master Terms Agreement")
and any amendments thereto, incorporated herein by reference, among Nellie Mae
and Funding. The Purchase Price of the Student Loans shall equal $2,634,355.77.
This document shall constitute a Purchase Agreement as referred in the
Master Terms Agreement and, except as modified herein, each term used herein
shall have the same meaning as in the Master Terms Agreement. All references in
the Master Terms Agreement to Student Loans or Qualified Loans shall be deemed
to refer to the Student Loans governed by this Purchase Agreement. Nellie Mae
hereby makes, as of the date hereof, all the representations and warranties
contained in the Master Terms Agreement and makes such representations and
warranties with respect to the Student Loans governed by this Purchase
Agreement.
Nellie Mae authorizes Funding to use a copy of the Bill of Sale,
including the Student Loan Transmittal Summary Form attached to the Bill of
Sale, as official notification to any Guarantor of assignment on the date of
purchase.
The parties hereto intend that the transfer of Student Loans described
in the Bill of Sale and Student Loan Transmittal Summary Form be, and be
construed as, a valid sale of such Student Loans from Nellie Mae to Funding.
However, in the event that notwithstanding the intention of the parties, such
transfer is deemed to be a transfer for security, then Nellie Mae hereby grants
Funding a first priority security interest in and to all Student Loans described
in the Bill of Sale and Student Loan Transmittal Summary Form to secure a loan
in an amount equal to the Purchase Price of such loans.
NELLIE MAE, INC. NELLIE MAE EDUCATION FUNDING, LLC
(SELLER) (PURCHASER)
By: /s/ John F. Remondi By: /s/ Lawrence W. O'Toole
--------------------------- -------------------------------
Name: John F. Remondi Name: Lawrence W. O'Toole
Title: Treasurer Title: President
<PAGE> 2
SECOND SUPPLEMENTAL PURCHASE AGREEMENT
BLANKET ENDORSEMENT DATED JULY 12, 1996
Nellie Mae, Inc. ("Nellie Mae"), by execution of this instrument,
hereby endorses the attached promissory note which is one (1) of the promissory
notes ("the Notes") described in the Bill of Sale executed by Nellie Mae in
favor of Nellie Mae Education Funding, LLC ("Funding"). This endorsement is in
blank, unrestricted form and without recourse except as provided in Section 6 of
the Master Terms Purchase Agreement referred to in the Purchase Agreement among
Nellie Mae and Funding which covers this promissory note.
This endorsement may be effected by attaching this instrument to each
or any of the Notes.
Notwithstanding the foregoing, Nellie Mae agrees to individually
endorse each Note in the form provided by Funding as Funding may from time to
time require or if such individual endorsement is required by any Guarantor of
the Note.
THE SALE AND PURCHASE OF THE STUDENT LOANS SHALL BE SUBJECT TO THE TERMS,
CONDITIONS AND COVENANTS, INCLUDING THE BLANKET ENDORSEMENT, AS SET FORTH IN THE
PURCHASE AGREEMENT. BY EXECUTION HEREOF, NELLIE MAE ACKNOWLEDGES THAT NELLIE MAE
HAS READ, UNDERSTANDS AND AGREES TO BE BOUND BY ALL TERMS, CONDITIONS AND
COVENANTS OF THE PURCHASE AGREEMENT. THE SALE AND PURCHASE SHALL BE CONSUMMATED
UPON FUNDING'S PAYMENT TO NELLIE MAE OF THE PURCHASE PRICE AND, UNLESS OTHERWISE
AGREED BY NELLIE MAE AND FUNDING, SHALL BE EFFECTIVE AS OF THE DATE OF THE BILL
OF SALE.
SELLER PURCHASER
- -------------------------------- ---------------------------------------
Nellie Mae, Inc. Nellie Mae Education Funding, LLC
50 Braintree Hill Park
Suite 300
Braintree, Massachusetts 02184
By: /s/ John F. Remondi By: /s/ Lawrence W. O'Toole
---------------------------- ----------------------------------
Name: John F. Remondi Name: Lawrence W. O'Toole
Title: Treasurer Title: President
Date of Purchase: July 12, 1996
- 1 -
<PAGE> 3
BILL OF SALE DATED JULY 12, 1996
The undersigned ("Nellie Mae"), for value received and pursuant to the
terms and conditions of the Second Supplemental Purchase Agreement ("Purchase
Agreement") between Nellie Mae Education Funding, LLC ("Funding") and Nellie
Mae, does hereby sell, assign, transfer and convey to Funding and its assignees
all right, title and interest of Nellie Mae in the Student Loans identified
herein which Funding has accepted for purchase. The portfolio accepted for
purchase by Funding and the individual Borrower accounts are listed on Schedule
A attached hereto.
Nellie Mae hereby makes the representations and warranties set forth in
Section 5 of the Master Terms Purchase Agreement incorporated by reference in
the Purchase Agreement. Nellie Mae authorizes Funding to use a copy of this
document as official notification to any Guarantor of assignment to Funding of
the Student Loans on the date of purchase.
SELLER PURCHASER
- --------------------------------- ---------------------------------------
Nellie Mae, Inc. Nellie Mae Education Funding, LLC
50 Braintree Hill Park
Suite 300
Braintree, Massachusetts 02184
By: /s/ John F. Remondi By: /s/ Lawrence W. O'Toole
------------------------------ ---------------------------------
Name: John F. Remondi Name: Lawrence W. O'Toole
Title: Treasurer Title: President
Date of Purchase: July 12, 1996
- 2 -
<PAGE> 4
SECOND SUPPLEMENTAL PURCHASE AGREEMENT
Schedule A
<TABLE>
<CAPTION>
Number of Number of Principal Interest
Sale # Loans Accounts Balance Balance Purchase Price
--------- --------- --------- -------- --------------
<S> <C> <C> <C> <C> <C>
2 438 315 $2,699,952.71 $42,401.17 $2,634,355.77
</TABLE>
- 3 -
<PAGE> 1
EXHIBIT 99.7
SECOND SUPPLEMENTAL SALES AGREEMENT
Dated as of July 12, 1996
Nellie Mae Education Funding, LLC ("Seller") hereby offers for sale to
the Fleet National Bank, as Owner Trustee for the benefit of Nellie Mae
Education Loan Trust (the "Trust" or the "Purchaser") under the Trust Agreement
dated as of June 1, 1996 between Seller and the Owner Trustee, the entire right,
title and interest of Seller in the Student Loans described in the Bill of Sale
and Student Loan Transmittal Summary Form incorporated herein and, to the extent
indicated below, the Owner Trustee for the benefit of the Trust accepts Seller's
offer. In order to qualify as Qualified Loans, no payment of principal or
interest shall be more than sixty (60) days Delinquent as of the Cutoff Date
which date shall be July 12, 1996. Notwithstanding the foregoing, to the extent
the Seller is deemed to retain any right, title or interest in the Student
Loans, the Seller grants to the Owner Trustee for the benefit of the Trust a
security interest therein.
TERMS, CONDITIONS AND COVENANTS
In consideration of the Purchase Price, Seller hereby sells to the
Owner Trustee for the benefit of the Trust the entire right, title and interest
of Seller in the Student Loans accepted for purchase, subject to all the terms
and conditions of the Master Terms Sales Agreement ("Master Sales Agreement")
and any amendments thereto, incorporated herein by reference, among Seller, the
Trust and the Owner Trustee. The Purchase Price of the Students Loans shall
equal $2,634,355.77.
This document shall constitute a Sales Agreement as referred to in the
Master Sales Agreement and, except as modified herein, each term used herein
shall have the same meaning as in the Master Sales Agreement. All references in
the Master Sales Agreement to Student Loans or Qualified Loans shall be deemed
to refer to the Students Loans governed by this Sales Agreement. Seller hereby
makes, as of the date hereof, all the representations and warranties contained
in the Master Sales Agreement and makes such representations and warranties with
respect to the Student Loans governed by this Sales Agreement.
Seller authorizes the Owner Trustee for the benefit of the Trust to use
a copy of the Bill of Sale, including the Student Loan Transmittal Summary Form
attached to the Bill of Sale, as official notification to any Guarantor of
assignment to the Owner Trustee on behalf of the Trust of the Student Loans on
the date of purchase.
The parties hereto intend that the transfer of Student Loans described
in the Bill of Sale and Student Loan Transmittal Summary Form be, and be
construed as, a valid sale of such Student Loans from Seller to the Owner
Trustee for the benefit of the Trust. However, in the event that notwithstanding
the intention of the parties, such transfer is deemed to be a transfer for
security, then Seller hereby grants to the Owner Trustee for the benefit of the
Trust a first priority security interest in and to all Student Loans described
in the Bill of Sale and Student Loan Transmittal Summary Form to secure a loan
in an amount equal to the Purchase Price of such loans.
<PAGE> 2
IN WITNESS WHEREOF, the parties set their respective signatures below
as of this 12th day of July, 1996.
NELLIE MAE EDUCATION FUNDING, LLC NELLIE MAE EDUCATION LOAN TRUST
(SELLER) (PURCHASER)
By: Fleet National Bank, not in its
individual capacity but solely as
Owner Trustee
By: /s/ Lawrence W. O'Toole By: /s/ Chi C. Ma
---------------------------- -------------------------------
Name: Lawrence W. O'Toole Name: Chi Ma
Title: President Title: Assistant Vice President
FLEET NATIONAL BANK,
not in its individual capacity
but solely as Owner Trustee
By: /s/ Chi C. Ma
-------------------------------
Name: Chi Ma
Title: Assistant Vice President
<PAGE> 3
SECOND SUPPLEMENTAL SALES AGREEMENT
BLANKET ENDORSEMENT DATED JULY 12, 1996
Nellie Mae Education Funding, LLC ("Seller"), by execution of this
instrument, hereby endorses the attached promissory note which is one (1) of the
promissory notes ("the Notes") described in the Bill of Sale executed by Seller
in favor of the Fleet National Bank as the Owner Trustee for the benefit of
Nellie Mae Education Loan Trust ("Purchaser"). This endorsement is in blank,
unrestricted form and without recourse except as provided in Section 6 of the
Master Terms Sales Agreement referred to in the Sales Agreement among Seller,
Purchaser, and the Owner Trustee which covers this promissory note.
This endorsement may be effected by attaching this instrument to each
or any of the Notes.
Notwithstanding the foregoing, Seller agrees to individually endorse
each Note in the form provided by Purchaser as Purchaser may from time to time
require or if such individual endorsement is required by any Guarantor of the
Note.
THE SALE AND PURCHASE OF THE LOANS SHALL BE SUBJECT TO THE TERMS, CONDITIONS AND
COVENANTS, INCLUDING THE BLANKET ENDORSEMENT, AS SET FORTH IN THE SALES
AGREEMENT. BY EXECUTION HEREOF, SELLER ACKNOWLEDGES THAT SELLER HAS READ,
UNDERSTANDS AND AGREES TO BE BOUND BY ALL TERMS, CONDITIONS AND COVENANTS OF THE
SALE AGREEMENT. THE SALE AND PURCHASE SHALL BE CONSUMMATED UPON PURCHASER'S
PAYMENT TO SELLER OF THE PURCHASE PRICE AND, UNLESS OTHERWISE AGREED BY SELLER
AND PURCHASER, SHALL BE EFFECTIVE AS OF THE DATE OF THE BILL OF SALE.
SELLER PURCHASER
- ---------------------------------- ------------------------------------------
Nellie Mae Education Funding, LLC Fleet National Bank, not in its individual
50 Braintree Hill Park capacity but solely as Owner Trustee
Suite 300
Braintree, Massachusetts 02184
By: /s/ Lawrence W. O'Toole By: /s/ Chi C. Ma
----------------------------- -------------------------------
Name: Lawrence W. O'Toole Name: Chi Ma
Title: President Title: Assistant Vice President
Date of Purchase: July 12, 1996
- 1 -
<PAGE> 4
BILL OF SALE DATED JULY 12, 1996
The undersigned ("Seller"), for value received and pursuant to the
terms and conditions of Second Supplemental Sales Agreement ("Sales Agreement")
among Nellie Mae Education Loan Trust ("Purchaser"), and Fleet National Bank, as
Owner Trustee for the benefit of Purchaser under the Trust Agreement dated as of
June 1, 1996 between Purchaser and the Owner Trustee, does hereby sell, assign,
transfer and convey to the Owner Trustee for the benefit of Purchaser and its
assignees all right, title and interest of Seller, in the Student Loans
identified herein which the Owner Trustee for the benefit of Purchaser has
accepted for purchase. The portfolio accepted for purchase by the Owner Trustee
for the benefit of Purchaser and the individual Borrower accounts are listed on
Schedule A attached hereto.
Seller hereby makes the representations and warranties set forth in
Section 5 of the Master Terms Sales Agreement incorporated by reference in the
Sales Agreement. Seller authorizes the Owner Trustee on behalf of Purchaser to
use a copy of this document as official notification to any Guarantor of
assignment to the Owner Trustee for the benefit of Purchaser of the Loans on the
date of purchase.
SELLER PURCHASER
- ---------------------------------- ------------------------------------------
Nellie Mae Education Funding, LLC Fleet National Bank, not in its individual
50 Braintree Hill Park capacity but solely as Owner Trustee
Suite 300
Braintree, Massachusetts 02184
By: /s/ Lawrence W. O'Toole By: /s/ Chi C. Ma
------------------------------ ----------------------------------
Name: Lawrence W. O'Toole Name: Chi Ma
Title: President Title: Assistant Vice President
Date of Purchase: July 12, 1996
- 2 -
<PAGE> 5
SECOND SUPPLEMENTAL SALES AGREEMENT
Schedule A
<TABLE>
<CAPTION>
Number of Number of Principal Interest
Sale # Loans Accounts Balance Balance Purchase Price
--------- --------- ------------------------ --------------
<S> <C> <C> <C> <C> <C>
2 438 315 $2,699,952.71 $42,401.17 $2,634,355.77
</TABLE>
- 3 -
<PAGE> 1
EXHIBIT 99.8
THIRD SUPPLEMENTAL PURCHASE AGREEMENT
Dated as of July 15, 1996
Nellie Mae, Inc. ("Nellie Mae") hereby offers for sale to Nellie Mae
Education Funding, LLC ("Funding") the entire right, title and interest of
Nellie Mae in the Student Loans described in the Bill of Sale and Student Loan
Transmittal Summary Form incorporated herein and, to the extent indicated below,
Funding accepts Nellie Mae's offer. In order to qualify as Qualified Loans, no
payment of principal or interest shall be more than sixty (60) days Delinquent
as of the Cutoff Date which date shall be July 15 1996. Notwithstanding the
foregoing, to the extent Nellie Mae is deemed to retain any right, title or
interest in the Student Loans, Nellie Mae grants to Funding a security interest
therein.
TERMS, CONDITIONS AND COVENANTS
-------------------------------
In consideration of the Purchase Price, Nellie Mae hereby sells,
transfer, convey and assign to Funding the entire right, title and interest of
Nellie Mae in the Student Loans accepted for purchase, subject to all the terms
and conditions of the Master Terms Purchase Agreement ("Master Terms Agreement")
and any amendments thereto, incorporated herein by reference, among Nellie Mae
and Funding. The Purchase Price of the Student Loans shall equal $14,226,465.05.
This document shall constitute a Purchase Agreement as referred in the
Master Terms Agreement and, except as modified herein, each term used herein
shall have the same meaning as in the Master Terms Agreement. All references in
the Master Terms Agreement to Student Loans or Qualified Loans shall be deemed
to refer to the Student Loans governed by this Purchase Agreement. Nellie Mae
hereby makes, as of the date hereof, all the representations and warranties
contained in the Master Terms Agreement and makes such representations and
warranties with respect to the Student Loans governed by this Purchase
Agreement.
Nellie Mae authorizes Funding to use a copy of the Bill of Sale,
including the Student Loan Transmittal Summary Form attached to the Bill of
Sale, as official notification to any Guarantor of assignment on the date of
purchase.
The parties hereto intend that the transfer of Student Loans described
in the Bill of Sale and Student Loan Transmittal Summary Form be, and be
construed as, a valid sale of such Student Loans from Nellie Mae to Funding.
However, in the event that notwithstanding the intention of the parties, such
transfer is deemed to be a transfer for security, then Nellie Mae hereby grants
Funding a first priority security interest in and to all Student Loans described
in the Bill of Sale and Student Loan Transmittal Summary Form to secure a loan
in an amount equal to the Purchase Price of such loans.
NELLIE MAE, INC. NELLIE MAE EDUCATION FUNDING, LLC
(SELLER) (PURCHASER)
By: /s/ John F. Remondi By: /s/ Lawrence W. O'Toole
------------------------------- -------------------------------------
Name: John F. Remondi Name: Lawrence W. O'Toole
Title: Treasurer Title: President
<PAGE> 2
THIRD SUPPLEMENTAL PURCHASE AGREEMENT
BLANKET ENDORSEMENT DATED JULY 15, 1996
Nellie Mae, Inc. ("Nellie Mae"), by execution of this instrument,
hereby endorses the attached promissory note which is one (1) of the promissory
notes ("the Notes") described in the Bill of Sale executed by Nellie Mae in
favor of Nellie Mae Education Funding, LLC ("Funding"). This endorsement is in
blank, unrestricted form and without recourse except as provided in Section 6 of
the Master Terms Purchase Agreement referred to in the Purchase Agreement among
Nellie Mae and Funding which covers this promissory note.
This endorsement may be effected by attaching this instrument to each
or any of the Notes.
Notwithstanding the foregoing, Nellie Mae agrees to individually
endorse each Note in the form provided by Funding as Funding may from time to
time require or if such individual endorsement is required by any Guarantor of
the Note.
THE SALE AND PURCHASE OF THE STUDENT LOANS SHALL BE SUBJECT TO THE TERMS,
CONDITIONS AND COVENANTS, INCLUDING THE BLANKET ENDORSEMENT, AS SET FORTH IN THE
PURCHASE AGREEMENT. BY EXECUTION HEREOF, NELLIE MAE ACKNOWLEDGES THAT NELLIE MAE
HAS READ, UNDERSTANDS AND AGREES TO BE BOUND BY ALL TERMS, CONDITIONS AND
COVENANTS OF THE PURCHASE AGREEMENT. THE SALE AND PURCHASE SHALL BE CONSUMMATED
UPON FUNDING'S PAYMENT TO NELLIE MAE OF THE PURCHASE PRICE AND, UNLESS OTHERWISE
AGREED BY NELLIE MAE AND FUNDING, SHALL BE EFFECTIVE AS OF THE DATE OF THE BILL
OF SALE.
SELLER PURCHASER
- ---------------------------------- ----------------------------------------
Nellie Mae, Inc. Nellie Mae Education Funding, LLC
50 Braintree Hill Park
Suite 300
Braintree, Massachusetts 02184
By: /s/ John F. Remondi By: /s/ Lawrence W. O'Toole
------------------------------- ---------------------------------
Name: John F. Remondi Name: Lawrence W. O'Toole
Title: Treasurer Title: President
Date of Purchase: July 15, 1996
- 1 -
<PAGE> 3
BILL OF SALE DATED JULY 15, 1996
The undersigned ("Nellie Mae"), for value received and pursuant to the
terms and conditions of the Third Supplemental Purchase Agreement ("Purchase
Agreement") between Nellie Mae Education Funding, LLC ("Funding") and Nellie
Mae, does hereby sell, assign, transfer and convey to Funding and its assignees
all right, title and interest of Nellie Mae in the Student Loans identified
herein which Funding has accepted for purchase. The portfolio accepted for
purchase by Funding and the individual Borrower accounts are listed on SCHEDULE
A attached hereto.
Nellie Mae hereby makes the representations and warranties set forth in
Section 5 of the Master Terms Purchase Agreement incorporated by reference in
the Purchase Agreement. Nellie Mae authorizes Funding to use a copy of this
document as official notification to any Guarantor of assignment to Funding of
the Student Loans on the date of purchase.
SELLER PURCHASER
- ---------------------------------- ----------------------------------------
Nellie Mae, Inc. Nellie Mae Education Funding, LLC
50 Braintree Hill Park
Suite 300
Braintree, Massachusetts 02184
By: /s/ John F. Remondi By: /s/ Lawrence W. O'Toole
------------------------------- ---------------------------------
Name: John F. Remondi Name: Lawrence W. O'Toole
Title: Treasurer Title: President
Date of Purchase: July 15, 1996
- 2 -
<PAGE> 4
THIRD SUPPLEMENTAL PURCHASE AGREEMENT
<TABLE>
Schedule A
----------
<CAPTION>
Number of Principal Interest
Sale # Loans Balance Balance Purchase Price
--------- --------- -------- --------------
<S> <C> <C> <C> <C>
3 4732 $16,394,226.88 $346,248.54 $14,226,475.05
</TABLE>
- 3 -
<PAGE> 1
EXHIBIT 99.9
THIRD SUPPLEMENTAL SALES AGREEMENT
Dated as of July 15, 1996
Nellie Mae Education Funding, LLC ("Seller") hereby offers for sale to
the Fleet National Bank, as Owner Trustee for the benefit of Nellie Mae
Education Loan Trust (the "Trust" or the "Purchaser") under the Trust Agreement
dated as of June 1, 1996 between Seller and the Owner Trustee, the entire right,
title and interest of Seller in the Student Loans described in the Bill of Sale
and Student Loan Transmittal Summary Form incorporated herein and, to the extent
indicated below, the Owner Trustee for the benefit of the Trust accepts Seller's
offer. In order to qualify as Qualified Loans, no payment of principal or
interest shall be more than sixty (60) days Delinquent as of the Cutoff Date
which date shall be July 15, 1996. Notwithstanding the foregoing, to the extent
the Seller is deemed to retain any right, title or interest in the Student
Loans, the Seller grants to the Owner Trustee for the benefit of the Trust a
security interest therein.
TERMS, CONDITIONS AND COVENANTS
-------------------------------
In consideration of the Purchase Price, Seller hereby sells to the
Owner Trustee for the benefit of the Trust the entire right, title and interest
of Seller in the Student Loans accepted for purchase, subject to all the terms
and conditions of the Master Terms Sales Agreement ("Master Sales Agreement")
and any amendments thereto, incorporated herein by reference, among Seller, the
Trust and the Owner Trustee. The Purchase Price of the Students Loans shall
equal $14,226,475.05.
This document shall constitute a Sales Agreement as referred to in the
Master Sales Agreement and, except as modified herein, each term used herein
shall have the same meaning as in the Master Sales Agreement. All references in
the Master Sales Agreement to Student Loans or Qualified Loans shall be deemed
to refer to the Students Loans governed by this Sales Agreement. Seller hereby
makes, as of the date hereof, all the representations and warranties contained
in the Master Sales Agreement and makes such representations and warranties with
respect to the Student Loans governed by this Sales Agreement.
Seller authorizes the Owner Trustee for the benefit of the Trust to use
a copy of the Bill of Sale, including the Student Loan Transmittal Summary Form
attached to the Bill of Sale, as official notification to any Guarantor of
assignment to the Owner Trustee on behalf of the Trust of the Student Loans on
the date of purchase.
The parties hereto intend that the transfer of Student Loans described
in the Bill of Sale and Student Loan Transmittal Summary Form be, and be
construed as, a valid sale of such Student Loans from Seller to the Owner
Trustee for the benefit of the Trust. However, in the event that notwithstanding
the intention of the parties, such transfer is deemed to be a transfer for
security, then Seller hereby grants to the Owner Trustee for the benefit of the
Trust a first priority security interest in and to all Student Loans described
in the Bill of Sale and Student Loan Transmittal Summary Form to secure a loan
in an amount equal to the Purchase Price of such loans.
<PAGE> 2
IN WITNESS WHEREOF, the parties set their respective signatures below
as of this 15th day of July, 1996.
NELLIE MAE EDUCATION FUNDING, LLC NELLIE MAE EDUCATION LOAN TRUST
(SELLER) (PURCHASER)
By: Fleet National Bank, not in its
individual capacity but solely as
Owner Trustee
By: /s/ Lawrence W. O'Toole By: /s/ Chi Ma
------------------------------- -------------------------------------
Name: Lawrence W. O'Toole Name: Chi Ma
Title: President Title: Assistant Vice President
FLEET NATIONAL BANK,
not in its individual capacity
but solely as Owner Trustee
By: /s/ Chi Ma
-------------------------------------
Name: Chi Ma
Title: Assistant Vice President
<PAGE> 3
THIRD SUPPLEMENTAL SALES AGREEMENT
BLANKET ENDORSEMENT DATED JULY 15, 1996
Nellie Mae Education Funding, LLC ("Seller"), by execution of this
instrument, hereby endorses the attached promissory note which is one (1) of the
promissory notes ("the Notes") described in the Bill of Sale executed by Seller
in favor of the Fleet National Bank as the Owner Trustee for the benefit of
Nellie Mae Education Loan Trust ("Purchaser"). This endorsement is in blank,
unrestricted form and without recourse except as provided in Section 6 of the
Master Terms Sales Agreement referred to in the Sales Agreement among Seller,
Purchaser, and the Owner Trustee which covers this promissory note.
This endorsement may be effected by attaching this instrument to each
or any of the Notes.
Notwithstanding the foregoing, Seller agrees to individually endorse
each Note in the form provided by Purchaser as Purchaser may from time to time
require or if such individual endorsement is required by any Guarantor of the
Note.
THE SALE AND PURCHASE OF THE LOANS SHALL BE SUBJECT TO THE TERMS, CONDITIONS AND
COVENANTS, INCLUDING THE BLANKET ENDORSEMENT, AS SET FORTH IN THE SALES
AGREEMENT. BY EXECUTION HEREOF, SELLER ACKNOWLEDGES THAT SELLER HAS READ,
UNDERSTANDS AND AGREES TO BE BOUND BY ALL TERMS, CONDITIONS AND COVENANTS OF THE
SALE AGREEMENT. THE SALE AND PURCHASE SHALL BE CONSUMMATED UPON PURCHASER'S
PAYMENT TO SELLER OF THE PURCHASE PRICE AND, UNLESS OTHERWISE AGREED BY SELLER
AND PURCHASER, SHALL BE EFFECTIVE AS OF THE DATE OF THE BILL OF SALE.
SELLER PURCHASER
- ---------------------------------- ----------------------------------------
Nellie Mae Education Funding, LLC Fleet National Bank, not in its
50 Braintree Hill Park individual capacity but solely as
Suite 300 Owner Trustee
Braintree, Massachusetts 02184
By: /s/ Lawrence W. O'Toole By: /s/ Chi Ma
------------------------------- -------------------------------------
Name: Lawrence W. O'Toole Name: Chi Ma
Title: President Title: Assistant Vice President
Date of Purchase: July 15, 1996
- 1 -
<PAGE> 4
BILL OF SALE DATED JULY 15, 1996
The undersigned ("Seller"), for value received and pursuant to the
terms and conditions of Third Supplemental Sales Agreement ("Sales Agreement")
among Nellie Mae Education Loan Trust ("Purchaser"), and Fleet National Bank, as
Owner Trustee for the benefit of Purchaser under the Trust Agreement dated as of
June 1, 1996 between Purchaser and the Owner Trustee, does hereby sell, assign,
transfer and convey to the Owner Trustee for the benefit of Purchaser and its
assignees all right, title and interest of Seller, in the Student Loans
identified herein which the Owner Trustee for the benefit of Purchaser has
accepted for purchase. A summary of the portfolio accepted for purchase by the
Owner Trustee for the benefit of Purchaser and the individual Borrower accounts
are listed on SCHEDULE A attached hereto.
Seller hereby makes the representations and warranties set forth in
Section 5 of the Master Terms Sales Agreement incorporated by reference in the
Sales Agreement. Seller authorizes the Owner Trustee on behalf of Purchaser to
use a copy of this document as official notification to any Guarantor of
assignment to the Owner Trustee for the benefit of Purchaser of the Loans on the
date of purchase.
SELLER PURCHASER
- ---------------------------------- ----------------------------------------
Nellie Mae Education Funding, LLC Fleet National Bank, not in its
50 Braintree Hill Park individual capacity but solely as
Suite 300 Owner Trustee
Braintree, Massachusetts 02184
By: /s/ Lawrence W. O'Toole By: /s/ Chi Ma
------------------------------- -------------------------------------
Name: Lawrence W. O'Toole Name: Chi Ma
Title: President Title: Assistant Vice President
Date of Purchase: July 15, 1996
- 2 -
<PAGE> 5
THIRD SUPPLEMENTAL SALES AGREEMENT
<TABLE>
Schedule A
----------
<CAPTION>
Number of Principal Interest
Sale # Loans Balance Balance Purchase Price
--------- --------- -------- --------------
<S> <C> <C> <C> <C>
3 4732 $16,394,226.88 $346,248.54 $14,226,475.05
</TABLE>
- 3 -
<PAGE> 1
EXHIBIT 99.10
NELLIE MAE EDUCATION LOAN TRUST 1996 -1
MONTHLY SERVICING REPORT
REPORT DATE: 8/22/96
MONTH ENDING: 7/31/96
<TABLE>
I. TRANSACTION SUMMARY REPORT
<CAPTION>
--------------------------------------------------------------------------------------------------------
A STUDENT LOAN PORTFOLIO CHARACTERISTICS 7/31/96 ACTIVITY 7/31/96
--------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
i Portfolio Balance $ 84,155,268 $ - 84,155,268
ii Accrued Interest $ 1,790,868 $ 1,790,868
------------ ------------
iii Total Pool $ 85,946,136 $ 85,946,136
============ ============
B i Weighted Average Coupon 10.41% 10.41%
ii Number of Loans 11,878 11,878
--------------------------------------------------------------------------------------------------------
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------
C OUTSTANDING BALANCE OUTSTANDING BALANCE
NOTES AND CERTIFICATES LIBOR SPREAD 7/31/96 % OF POOL 7/31/96 % OF POOL
-----------------------------------------------------------------------------------------------------------------------
i Class A-1 Notes 5.5039% 0.170% $ 67,000,000 54.25% $ 67,000,000 54.25%
ii Class A-2 Notes 5.5039% 0.260% $ 48,800,000 39.51% $ 48,800,000 39.51%
iii Certificates 5.5039% 0.625% $ 7,700,000 6.23% $ 7,700,000 6.23%
-----------------------------------------------------------------------------------------------------------------------
iv Total $123,500,000 100.00% $123,500,000 100.00%
=======================================================================================================================
<CAPTION>
---------------------------------------------------------------------------------------------------------
D Reserve Account 7/31/96 ACTIVITY 7/31/96
---------------------------------------------------------------------------------------------------------
i Reserve Requirement $ 2,470,000 $ 2,470,000
ii Initial Reserve Account Deposit $ 926,250 $ 926,250
iii Current Reserve Account Balance $ 926,250 $ - 926,250
---------------------------------------------------------------------------------------------------------
<CAPTION>
---------------------------------------------------------------------------------------------------------
E Parity Ratios 7/31/96 7/31/96
---------------------------------------------------------------------------------------------------------
i Primary Parity Trigger 110.71% 110.71%
ii Secondary Parity Trigger 103.81% 103.81%
---------------------------------------------------------------------------------------------------------
</TABLE>
Page 1
<PAGE> 2
<TABLE>
II. PORTFOLIO CHARACTERISTICS
<CAPTION>
---------------------------------------------------------------------------------------------------------------
A OUTSTANDING BALANCE OUTSTANDING BALANCE
DELINQUENCY INFORMATION 7/31/96 % 7/31/96 %
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
i Current $82,761,352 98.34% $82,761,352 98.34%
ii 30-59 days $ 1,305,028 1.55% $ 1,305,028 1.55%
iii 60-89 days $ 88,887 0.11% $ 88,887 0.11%
iv 90-119 days $ - 0.00% $ - 0.00%
v Default Claims In Process $ - 0.00% $ - 0.00%
---------------------------------------------------------------------------------------------------------------
vi Total $84,155,268 100.00% $84,155,268 100.00%
===============================================================================================================
<CAPTION>
-----------------------------------------------------------------------------------------------------
B AMOUNT PURCHASED AMOUNT PURCHASED
FINANCED LOANS REPURCHASED 7/31/96 7/31/96
-----------------------------------------------------------------------------------------------------
i By Servicer $ - $ -
ii By Seller $ - $ -
-----------------------------------------------------------------------------------------------------
iii Total $ - $ -
=====================================================================================================
</TABLE>
Page 2
<PAGE> 3
<TABLE>
III. DISTRIBUTIONS
<CAPTION>
-----------------------------------------------------------------------------------
A DISTRIBUTION AMOUNTS CLASS A-1 CLASS A-2 CERTIFICATES
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
i Interest Due $359,032 $265,652 $44,571
ii Interest Paid $359,032 $265,652 $44,571
iii Deferred Interest $ - $ - $ -
iv Principal Paid $ - $ -
-----------------------------------------------------------------------------------
v Total Distribution Amount $359,032 $265,652 44,571
===================================================================================
-------------------------------------------------------------------
B NOTE AND CERTIFICATE BALANCES 7/31/96 7/31/96
-------------------------------------------------------------------
<CAPTION>
i A-1 Note Balance $67,000,000 $67,000,000
A-1 Principal Factor 1.0000000 1.0000000
ii A-2 Note Balance $48,800,000 $48,800,000
A-2 Principal Factor 1.0000000 1.0000000
iii Certicicate Balance $ 7,700,000 $ 7,700,000
Certificate Principal Factor 1.0000000 1.0000000
-------------------------------------------------------------------
</TABLE>
Page 3
