<PAGE>
UNITED STATES
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 (Date of earliest event reported): February 15, 2000
SLM FUNDING CORPORATION
-----------------------
formerly known as SALLIE MAE FUNDING CORPORATION
(Exact name of registrant as specified in its charter)
(Originator of the Sallie Mae Student Loan Trust 1995-1,
the Sallie Mae Student Loan Trust 1996-1,
the SLM Student Loan Trust 1996-2,
the SLM Student Loan Trust 1996-3,
the SLM Student Loan Trust 1996-4,
the SLM Student Loan Trust 1997-1
the SLM Student Loan Trust 1997-2,
the SLM Student Loan Trust 1997-3,
the SLM Student Loan Trust 1997-4,
the SLM Student Loan Trust 1998-1,
the SLM Student Loan Trust 1998-2
the SLM Student Loan Trust 1999-1
the SLM Student Loan Trust 1999-2
the SLM Student Loan Trust 1999-3
and the SLM Student Loan Trust 2000-1)
DELAWARE 33-95474/333-2502/333-24949/333-44465 23-2815650
- -------- ------------------------------------- ----------
(State or other (Commission File (I.R.S. employer
Jurisdiction of Numbers) Identification No.)
Incorporation)
7773 Twin Creek Drive
KILLEEN, TEXAS 76543
--------------------
(Address of principal executive offices)
Registrant's telephone number: (817) 554-4500
Page 1 of 5
Exhibit Index appears on Page 5
<PAGE>
Item 5. OTHER EVENTS
------------
On February 2, 2000, the following agreements were executed
and delivered by the respective parties thereto: (a) the Pricing Agreement
relating to the Student Loan-Backed Notes, dated February 2, 2000, by and among
SLM Funding Corporation ("SLM Funding"), the Student Loan Marketing Association
("Sallie Mae") and Goldman Sachs & Co. (the "Underwriter) and (b) the Pricing
Agreement relating to the Student Loan-Backed Certificates, dated February 2,
2000, by and among SLM Funding, Sallie Mae and the Underwriter.
On February 1 or February 15, 2000, the following agreements
were executed and delivered by the respective parties thereto: (a) the Purchase
Agreement, dated as of February 15, 2000, by and among SLM Funding, Chase
Manhattan Bank Delaware, not in its individual capacity but solely as interim
eligible lender trustee (the "Interim Eligible Lender Trustee"), and Sallie Mae;
(b) the Interim Trust Agreement, dated as of February 1, 2000, by and between
SLM Funding and Chase Manhattan Bank Delaware, not in its individual capacity
but solely as Interim Eligible Lender Trustee; (c) the Trust Agreement, dated as
of February 1, 2000, by and between SLM Funding and Chase Manhattan Bank
Delaware, not in its individual capacity but solely as eligible lender trustee
(the "Eligible Lender Trustee"); (d) the Amended and Restated Trust Agreement,
dated as of February 1, 2000, by and between SLM Funding and Chase Manhattan
Bank Delaware, not in its individual capacity but solely as eligible lender
trustee (the "Eligible Lender Trustee"); (e) the Indenture, dated as of February
1, 2000 (the "Indenture"), by and among the SLM Student Loan Trust 2000-1 (the
"Trust"), the Eligible Lender Trustee, and Bankers Trust Company, not in its
individual capacity but solely as the trustee under the Indenture (the
"Indenture Trustee"); (f) the Sale Agreement, dated as of February 15, 2000, by
and among the Trust, Sallie Mae, the Eligible Lender Trustee, Sallie Mae
Servicing Corporation (the "Servicer"), SLM Funding and the Indenture Trustee;
(g) the Administration Agreement Supplement, dated as of February 15, 2000, by
and among the Trust, Sallie Mae, the Eligible Lender Trustee, the Servicer, SLM
Funding and the Indenture Trustee; (h) the Servicing Agreement, dated as of
February 15, 2000, by and among the Servicer, Sallie Mae, the Trust, the
Eligible Lender Trustee and the Indenture Trustee; and (i) the Paying Agent
Agreement, dated February 15, 2000, by and among the Eligible Lender Trustee,
Bankers Trust Company (the "Agent"), and Student Loan Marketing Association (the
"Administrator").
Page 2 of 5
Exhibit Index appears on Page 5
<PAGE>
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL STATEMENTS AND EXHIBITS
-----------------------------------------------------------------
(c) Exhibits
1.1 Pricing Agreement relating to the Student Loan-Backed
Notes, dated February 2, 2000, by and among SLM Funding,
Sallie Mae and the Underwriter.
1.2 Pricing Agreement relating to the Student Loan-Backed
Certificates, dated February 2, 2000, by and among SLM
Funding, Sallie Mae and the Underwriter.
4.1 Interim Trust Agreement, dated as of February 1, 2000, by
and between SLM Funding and the Interim Eligible Lender
Trustee.
4.2.1 Trust Agreement, dated as of February 1, 2000, by and
between SLM Funding and the Eligible Lender Trustee.
4.2.2 Amended and Restated Trust Agreement, dated as of
February 1, 2000, by and between SLM Funding and the
Eligible Lender Trustee.
4.3 Indenture, dated as of February 1, 2000, by and among the
Trust, the Eligible Lender Trustee and the Indenture
Trustee.
99.1 Purchase Agreement, dated as of February 15, 2000, by and
among SLM Funding, the Interim Eligible Lender Trustee
and Sallie Mae.
99.2 Sale Agreement, dated as of February 15, 2000, by and
among SLM Funding, the Interim Eligible Lender Trustee,
the Eligible Lender Trustee and the Trust.
99.3 Administration Agreement Supplement, dated as of February
15, 2000, by and among the Trust, Sallie Mae, SLM
Funding, the Eligible Lender Trustee, the Servicer and
the Indenture Trustee.
99.4 Servicing Agreement, dated as of February 15, 2000, by
and among the Servicer, Sallie Mae, the Trust, the
Eligible Lender Trustee and the Indenture Trustee.
99.5 Paying Agent Agreement, dated February 15, 2000, by and
among the Eligible Lender Trustee, the Agent, and the
Administrator.
Page 3 of 5
Exhibit Index appears on Page 5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, as amended, the registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
Dated: February 28, 2000
SLM FUNDING CORPORATION
By: /S/ WILLIAM M.E. RACHAL, JR.
----------------------------
Name: William M.E. Rachal, Jr.
Title: Treasurer and Controller
Page 4 of 5
Exhibit Index appears on Page 5
<PAGE>
INDEX TO EXHIBIT
<TABLE>
<CAPTION>
Sequentially
Exhibit Numbered
Number Exhibit Page
- ------ ------- ----
<S> <C> <C>
1.1 Pricing Agreement relating to Student-Loan Backed Notes, dated
February 2, 2000, by and among SLM Funding, Sallie Mae and the
Underwriter.
1.2 Pricing Agreement relating to Student-Loan Backed Certificates,
dated February 2, 2000, by and among SLM Funding, Sallie Mae and
the Underwriter.
4.1 Interim Trust Agreement, dated as of February 1, 2000, by and
between SLM Funding and the Eligible Lender Trustee.
4.2.1 Trust Agreement, dated as of February 1, 2000, by and between SLM
Funding and the Eligible Lender Trustee.
4.2.2 Amended and Restated Trust Agreement, dated as of February 1,
2000, by and between SLM Funding and the Eligible Lender Trustee.
4.3 Indenture, dated as of February 1, 2000, by and among the Trust,
the Eligible Lender Trustee and the Indenture Trustee.
99.1 Purchase Agreement, dated as of February 15, 2000, by and among
SLM Funding, the Interim Eligible Lender Trustee and Sallie Mae.
99.2 Sale Agreement, dated as of February 15, 2000, by and among SLM
Funding, the Interim Eligible Lender Trustee and Sallie Mae.
99.3 Administration Agreement Supplement, dated as of February 15,
2000, by and among the Trust, Sallie Mae, the Eligible Lender
Trustee, the Servicer, SLM Funding and the Indenture Trustee.
99.4 Servicing Agreement, dated as of February 15, 2000, by and among
the Servicer, Sallie Mae, the Trust, the Eligible Lender Trustee
and the Indenture Trustee.
99.5 Paying Agent Agreement, dated February 15, 2000, by and among the
Eligible Lender Trustee, the Agent, and the Administrator.
</TABLE>
Page 5 of 5
Exhibit Index appears on Page 5
<PAGE>
Exhibit 1.1
PRICING AGREEMENT
-----------------
GOLDMAN, SACHS & CO.
AS REPRESENTATIVES OF THE SEVERAL
UNDERWRITERS NAMED ON SCHEDULE I HERETO,
C/O GOLDMAN, SACHS & CO.
85 BROAD STREET
NEW YORK, NEW YORK 10004
February 2, 2000
Ladies and Gentlemen:
SLM Funding Corporation, a Delaware corporation (the
"Company"), and the Student Loan Marketing Association, a corporation formed
under the laws of the United States ("Sallie Mae"), propose, subject to the
terms and conditions stated herein and in the Underwriting Agreement, dated June
23, 1999 (the "Underwriting Agreement"), between the Company and Sallie Mae, on
the one hand, and Goldman, Sachs & Co., on the other hand, that the Company will
cause the trust (the "Trust") formed pursuant to the Trust Agreement dated as of
February 1, 2000 between the Company and Chase Manhattan Bank Delaware, as
trustee (the "Eligible Lender Trustee"), to issue and sell to the Underwriters
named in Schedule I hereto (the "Underwriters") the Student Loan-Backed
Certificates (the "Certificates") specified in Schedule II hereto (the
"Designated Securities"). The Certificates will be issued pursuant to the Trust
Agreement.
Except as modified pursuant to Schedule II hereto, each of the
provisions of the Underwriting Agreement is incorporated herein by reference in
its entirety, and shall be deemed to be a part of this Agreement to the same
extent as if such provisions had been set forth in full herein; and each of the
representations and warranties set forth therein shall be deemed to have been
made at and as of the date of this Pricing Agreement, except that each
representation and warranty which refers to the Prospectus in Section 2 of the
Underwriting Agreement shall be deemed to be a representation or warranty as of
the date of the Underwriting Agreement in relation to the Prospectus (as therein
defined), and also a representation and warranty as of the date of this Pricing
Agreement in relation to the Prospectus as amended or supplemented relating to
the Designated Securities which are the subject of this Pricing Agreement. Each
reference to the Representatives herein and in the provisions of the
Underwriting Agreement so incorporated by reference shall be deemed to refer to
you. Unless otherwise defined herein, terms defined in the Underwriting
Agreement are used herein as therein defined.
<PAGE>
The Representatives designated to act on behalf of the
Representatives and on behalf of each of the Underwriters of the Designated
Securities pursuant to Section 12 of the Underwriting Agreement and the address
of the Representatives referred to in such Section 12 are set forth at the end
of Schedule II hereto.
An amendment to the Registration Statement, or a supplement to
the Prospectus, as the case may be, relating to the Designated Securities, in
the form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in
the Underwriting Agreement incorporated herein by reference, the Company agrees
to cause the Trust to issue and sell to each of the Underwriters, and each of
the Underwriters agrees, severally and not jointly, to purchase from the Trust,
at the time and place and at the purchase price to the Underwriters set forth in
Schedule II hereto, the amount of Designated Securities set forth opposite the
name of such Underwriter in Schedule I hereto, less the amount of Designated
Securities covered by Delayed Delivery Contracts, if any, as may be specified in
Schedule II.
During the period beginning from the date of this Pricing
Agreement for the Designated Securities and continuing to and including February
15, 2000, the Company agrees, and Sallie Mae agrees that it will cause the
Company, not to, and not to permit any affiliated entity to, offer, sell,
contract to sell or otherwise dispose of, any securities (other than the
Designated Securities) evidencing an ownership in, or any securities (other than
the related Notes) collateralized by, Student Loans, without the prior written
consent of the Representatives.
Each Underwriter represents and agrees that (a) it has not
offered or sold and will not offer or sell any Notes or Certificates to persons
in the United Kingdom prior to the expiration of the period of six months from
the issue date of the Notes and the Certificates except to persons whose
ordinary activities involve them in acquiring, holding, managing or disposing of
investments (as principal or agent) for the purposes of their businesses or
otherwise in circumstances which have not resulted and will not result in an
offer to the public in the United Kingdom within the meaning of the Public
Offers of Securities Regulations 1995; (b) it has complied and will comply with
all applicable provisions of the Financial Services Act 1986 with respect to
anything done by it in relation to the Notes and the Certificates in, from or
otherwise involving the United Kingdom; and (c) it has only issued or passed on
and will only issue or pass on in the United Kingdom any document received by it
in connection with the issuance of the Notes and the Certificates to a person
who is of a kind described in article 11(3) of the Financial Services Act 1986
(Investment Advertisements) (Exemptions) Order 1996 or is a person to whom such
document may otherwise lawfully be issued or passed on.
The Prospectus Supplement and the Prospectus have not been
registered as a prospectus with the Registrar of Companies and Businesses in
Singapore and the Notes and the Certificates will be offered in Singapore
pursuant to an exemption invoked under Section 106C
2
<PAGE>
of the Companies Act, Chapter 50, of Singapore (the "Singapore Companies Act").
Accordingly, each Underwriter represents and agrees that it has not offered or
sold and will not offer or sell the Notes and the Certificates nor will they
circulate or distribute the Prospectus Supplement, the Prospectus or any other
offering document or material relating to the Notes and the Certificates, either
directly or indirectly, to the public or any member of the public in Singapore
other than to an institutional investor or other person specified in Section
106C of the Singapore Companies Act; to a sophisticated investor, and in
accordance with the conditions specified in Section 106D of the Singapore
Companies Act; or otherwise pursuant to, and in accordance with the conditions
of, any other applicable provision of the Singapore Companies Act.
If the foregoing is in accordance with your understanding,
please sign and return to us 7 counterparts hereof, and upon acceptance hereof
by you, on behalf of each of the Underwriters, this letter and such acceptance
hereof, including the provisions of the Underwriting Agreement incorporated
herein by reference, shall constitute a binding agreement between each of the
Underwriters and the Company and Sallie Mae. It is understood that your
acceptance of this letter on behalf of each of the Underwriters is or will be
pursuant to the authority set forth in a form of Agreement among Underwriters,
the form of which shall be submitted to the Company and Sallie Mae for
examination upon request, but without warranty on the part of the
Representatives as to the authority of the signers thereof.
Very truly yours,
SLM FUNDING CORPORATION
By:/S/ J. LANCE FRANKE
-------------------
Name: J. Lance Franke
Title: Chief Financial Officer
STUDENT LOAN MARKETING ASSOCIATION
By:/S/ MICHAEL E. SHEEHAN
----------------------
Name: Michael E. Sheehan
Title: Assistant Vice President
3
<PAGE>
Accepted as of the date hereof:
GOLDMAN, SACHS & CO.
By: /S/ GOLDMAN SACHS & CO.
-----------------------
Name: Scott Kaylie
Title: Associate
4
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE I
AMOUNT OF DESIGNATED SECURITIES TO BE PURCHASED*
UNDERWRITER CLASS A-1T CLASS A-1L CLASS A-2T CLASS A-2L
<S> <C> <C> <C> <C>
Goldman, Sachs & Co. $8,670,000 $171,345,000 $0 $99,820,000
Banc of America Securities LLC $8,666,000 $171,341,000 $0 $99,816,000
Chase Securities Inc. $8,666,000 $171,341,000 $0 $99,816,000
Credit Suisse First Boston $8,666,000 $171,341,000 $0 $99,816,000
Corporation
J.P. Morgan Securities Inc. $8,666,000 $171,341,000 $0 $99,816,000
Merrill Lynch, Pierce, Fenner &
Smith Incorporated
$8,666,000 $171,341,000 $0 $99,816,000
TOTAL $52,000,000 $1,028,050,000 $0 $598,900,000
------------ -------------- =========== ============
</TABLE>
- ------------
* $98,000,000 of Class A-1T, $0 of Class A-1L, $0 of Class A-2T and $200,000,000
of Class A-2L (the "Sallie Mae Securities") will be purchased by Sallie Mae from
the Seller.
<PAGE>
SCHEDULE II
TITLE OF EACH CLASS OF DESIGNATED SECURITIES:
Floating Rate Class A-1T Student Loan-Backed Notes
(for purposes of this Schedule II, "Class A-1T")
Floating Rate Class A-1L Student Loan-Backed Notes
(for purposes of this Schedule II, "Class A-1L")
Floating Rate Class A-2T Student Loan-Backed Notes
(for purposes of this Schedule II, "Class A-2T")
Floating Rate Class A-2L Student Loan-Backed Notes
(for purposes of this Schedule II, "Class A-2L")
AGGREGATE PRINCIPAL AMOUNT OF EACH CLASS:
Class A-1T: $ 150,000,000
Class A-1L: $ 1,028,050,000
Class A-2T: $ 0
Class A-2L: $ 798,900,000
PRICE TO PUBLIC OF EACH CLASS:*
Class A-1T: 100.00%
Class A-1L: 100.00%
Class A-2T: 0%
Class A-2L: 100.00%
-----------
* Excludes Sallie Mae Securities.
PURCHASE PRICE BY UNDERWRITERS OF EACH CLASS:*
Class A-1T: 99.7650%
Class A-1L: 99.7650%
Class A-2T: 0%
Class A-2L: 99.6775%
-----------
* Excludes Sallie Mae Securities.
PRICE TO SALLIE MAE OF THE SALLIE MAE SECURITIES:**
Class A-1T: 99.9625%
Class A-1L: N/A
Class A-2T: N/A
Class A-2L: 99.9625%
5
<PAGE>
-----------
* * Paid directly to the Seller. Sallie Mae will pay a 0.0375% fee
to the Underwriters.
SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE: Same Day Funds
INDENTURE: Indenture, dated as of February 1, 2000, among Bankers Trust Company,
as Indenture Trustee, the SLM Student Loan Trust 2000-1, and Chase Manhattan
Bank Delaware, as Eligible Lender Trustee.
MATURITY:
Class A-1T: October 2008 Distribution Date
Class A-1L: October 2008 Distribution Date
Class A-2T: January 2013 Distribution Date
Class A-2L: N/A
INTEREST RATE:
Class A-1T: T-Bill Rate plus 0.85%
Class A-1L: Five-month LIBOR* plus 0.09%
Class A-2T: N/A
Class A-2L: Five-month LIBOR* plus 0.18%
- ----------------
* As to initial Accrual Period; thereafter, Three-month LIBOR.
FORM OF DESIGNATED SECURITIES: Book-Entry (DTC)
TIME OF DELIVERY:.February 15, 2000
CLOSING LOCATION FOR DELIVERY OF DESIGNATED SECURITIES:
Student Loan Marketing Association
11600 Sallie Mae Drive
Reston, VA 20193
2
<PAGE>
NAMES AND ADDRESSES OF REPRESENTATIVES:
Designated Representatives: Goldman, Sachs & Co.
Address for Notices, etc.: Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Attn: Thomas Lasersohn
MODIFICATIONS TO UNDERWRITING AGREEMENT (SOLELY FOR PURPOSES OF THIS
PRICING AGREEMENT):
1 The following sentence is hereby added to the end of the
second paragraph of the Underwriting Agreement:
In addition, the Trust will enter into swap agreements (the
"Swap Agreements") with Goldman Sachs Mitsui Marine Derivative Products, L.P.
and Goldman Sachs Capital Markets, Inc. (the "Swap Counterparties").
2 The following paragraph is hereby added to Section 7 of the
Underwriting Agreement:
(n) The Swap Agreements shall have been entered into by the
Trust and the respective Swap Counterparties, and the Underwriters shall have
received a copy, addressed to them or on which they are otherwise entitled to
rely, of each opinion of counsel required to be delivered thereunder at or
before the Time of Delivery, and a copy of each certificate required to be
delivered thereunder at or before the Time of Delivery.
3
<PAGE>
Exhibit 1.2
PRICING AGREEMENT
-----------------
GOLDMAN, SACHS & CO.
AS REPRESENTATIVES OF THE SEVERAL
UNDERWRITERS NAMED ON SCHEDULE I HERETO,
C/O GOLDMAN, SACHS & CO.
85 BROAD STREET
NEW YORK, NEW YORK 10004
February 2, 2000
Ladies and Gentlemen:
SLM Funding Corporation, a Delaware corporation (the
"Company"), and the Student Loan Marketing Association, a corporation formed
under the laws of the United States ("Sallie Mae"), propose, subject to the
terms and conditions stated herein and in the Underwriting Agreement, dated June
23, 1999 (the "Underwriting Agreement"), between the Company and Sallie Mae, on
the one hand, and Goldman, Sachs & Co., on the other hand, that the Company will
cause the trust (the "Trust") formed pursuant to the Trust Agreement dated as of
February 1, 2000 between the Company and Chase Manhattan Bank Delaware, as
trustee (the "Eligible Lender Trustee"), to issue and sell to the Underwriters
named in Schedule I hereto (the "Underwriters") the Student Loan-Backed
Certificates (the "Certificates") specified in Schedule II hereto (the
"Designated Securities"). The Certificates will be issued pursuant to the Trust
Agreement.
Except as modified pursuant to Schedule II hereto, each of the
provisions of the Underwriting Agreement is incorporated herein by reference in
its entirety, and shall be deemed to be a part of this Agreement to the same
extent as if such provisions had been set forth in full herein; and each of the
representations and warranties set forth therein shall be deemed to have been
made at and as of the date of this Pricing Agreement, except that each
representation and warranty which refers to the Prospectus in Section 2 of the
Underwriting Agreement shall be deemed to be a representation or warranty as of
the date of the Underwriting Agreement in relation to the Prospectus (as therein
defined), and also a representation and warranty as of the date of this Pricing
Agreement in relation to the Prospectus as amended or supplemented relating to
the Designated Securities which are the subject of this Pricing Agreement. Each
reference to the Representatives herein and in the provisions of the
Underwriting Agreement so incorporated by reference shall be deemed to
<PAGE>
refer to you. Unless otherwise defined herein, terms defined in the
Underwriting Agreement are used herein as therein defined.
The Representatives designated to act on behalf of the
Representatives and on behalf of each of the Underwriters of the Designated
Securities pursuant to Section 12 of the Underwriting Agreement and the address
of the Representatives referred to in such Section 12 are set forth at the end
of Schedule II hereto.
An amendment to the Registration Statement, or a supplement to
the Prospectus, as the case may be, relating to the Designated Securities, in
the form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in
the Underwriting Agreement incorporated herein by reference, the Company agrees
to cause the Trust to issue and sell to each of the Underwriters, and each of
the Underwriters agrees, severally and not jointly, to purchase from the Trust,
at the time and place and at the purchase price to the Underwriters set forth in
Schedule II hereto, the amount of Designated Securities set forth opposite the
name of such Underwriter in Schedule I hereto, less the amount of Designated
Securities covered by Delayed Delivery Contracts, if any, as may be specified in
Schedule II.
During the period beginning from the date of this Pricing
Agreement for the Designated Securities and continuing to and including February
15, 2000, the Company agrees, and Sallie Mae agrees that it will cause the
Company, not to, and not to permit any affiliated entity to, offer, sell,
contract to sell or otherwise dispose of, any securities (other than the
Designated Securities) evidencing an ownership in, or any securities (other than
the related Notes) collateralized by, Student Loans, without the prior written
consent of the Representatives.
Each Underwriter represents and agrees that (a) it has not
offered or sold and will not offer or sell any Notes or Certificates to persons
in the United Kingdom prior to the expiration of the period of six months from
the issue date of the Notes and the Certificates except to persons whose
ordinary activities involve them in acquiring, holding, managing or disposing of
investments (as principal or agent) for the purposes of their businesses or
otherwise in circumstances which have not resulted and will not result in an
offer to the public in the United Kingdom within the meaning of the Public
Offers of Securities Regulations 1995; (b) it has complied and will comply with
all applicable provisions of the Financial Services Act 1986 with respect to
anything done by it in relation to the Notes and the Certificates in, from or
otherwise involving the United Kingdom; and (c) it has only issued or passed on
and will only issue or pass on in the United Kingdom any document received by it
in connection with the issuance of the Notes and the Certificates to a person
who is of a kind described in article 11(3) of the Financial Services Act 1986
(Investment Advertisements) (Exemptions) Order 1996 or is a person to whom such
document may otherwise lawfully be issued or passed on.
2
<PAGE>
The Prospectus Supplement and the Prospectus have not been
registered as a prospectus with the Registrar of Companies and Businesses in
Singapore and the Notes and the Certificates will be offered in Singapore
pursuant to an exemption invoked under Section 106C of the Companies Act,
Chapter 50, of Singapore (the "Singapore Companies Act"). Accordingly, each
Underwriter represents and agrees that it has not offered or sold and will not
offer or sell the Notes and the Certificates nor will they circulate or
distribute the Prospectus Supplement, the Prospectus or any other offering
document or material relating to the Notes and the Certificates, either directly
or indirectly, to the public or any member of the public in Singapore other than
to an institutional investor or other person specified in Section 106C of the
Singapore Companies Act; to a sophisticated investor, and in accordance with the
conditions specified in Section 106D of the Singapore Companies Act; or
otherwise pursuant to, and in accordance with the conditions of, any other
applicable provision of the Singapore Companies Act.
If the foregoing is in accordance with your understanding,
please sign and return to us 7 counterparts hereof, and upon acceptance hereof
by you, on behalf of each of the Underwriters, this letter and such acceptance
hereof, including the provisions of the Underwriting Agreement incorporated
herein by reference, shall constitute a binding agreement between each of the
Underwriters and the Company and Sallie Mae. It is understood that your
acceptance of this letter on behalf of each of the Underwriters is or will be
pursuant to the authority set forth in a form of Agreement among Underwriters,
the form of which shall be submitted to the Company and Sallie Mae for
examination upon request, but without warranty on the part of the
Representatives as to the authority of the signers thereof.
Very truly yours,
SLM FUNDING CORPORATION
By: /s/ J. Lance Franke
-------------------
Name: J. Lance Franke
Title: Chief Financial Officer
STUDENT LOAN MARKETING ASSOCIATION
By: /s/ Michael E. Sheehan
----------------------
Name: Michael E. Sheehan
Title: Assistant Vice President
3
<PAGE>
Accepted as of the date hereof:
GOLDMAN, SACHS & CO.
By: /s/ Goldman Sachs & Co.
-----------------------
Name: Scott Kaylie
Title: Associate
4
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE I
AMOUNT OF DESIGNATED SECURITIES TO BE PURCHASED
UNDERWRITER CERTIFICATES
<S> <C>
Goldman, Sachs & Co. $11,955,000
Banc of America Securities LLC $11,951,000
Chase Securities Inc. $11,951,000
Credit Suisse First Boston Corporation $11,951,000
J.P. Morgan Securities Inc. $11,951,000
Merrill Lynch, Pierce, Fenner & Smith Incorporated $11,951,000
TOTAL $71,710,000
-----------
</TABLE>
5
<PAGE>
SCHEDULE II
TITLE OF EACH CLASS OF DESIGNATED SECURITIES:
Floating Rate Student Loan-Backed Certificates
AGGREGATE AMOUNT OF DESIGNATED SECURITIES: $71,710,000
PRICE TO PUBLIC PER CERTIFICATE: 100.00%
PURCHASE PRICE BY UNDERWRITERS PER CERTIFICATE:
$71,710,000 of Floating Rate Student Loan-Backed Certificates: 99.6775%
SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE: Same Day Funds
TRUST AGREEMENT: Trust Agreement, dated February 1, 2000, among SLM Funding
Corporation, as Seller, and Chase Manhattan Bank Delaware, as Eligible Lender
Trustee
MATURITY: April 2016 Distribution Date
RETURN RATE: Five-month LIBOR* plus 0.45%
- ----------------
* As to initial Accrual Period; thereafter, Three-month LIBOR.
FORM OF DESIGNATED SECURITIES: Book-Entry (DTC)
TIME OF DELIVERY:.February 15, 2000
6
<PAGE>
CLOSING LOCATION FOR DELIVERY OF DESIGNATED SECURITIES:
Student Loan Marketing Association
11600 Sallie Mae Drive
Reston, VA 20193
NAMES AND ADDRESSES OF REPRESENTATIVES:
Designated Representatives: Goldman, Sachs & Co.
Address for Notices, etc.: Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Attn: Thomas Lasersohn
MODIFICATIONS TO UNDERWRITING AGREEMENT (SOLELY FOR PURPOSES OF THIS
PRICING AGREEMENT):
1. The following sentence is hereby added to the end of the second
paragraph of the Underwriting Agreement:
In addition, the Trust will enter into swap agreements (the "Swap
Agreements") with Goldman Sachs Mitsui Marine Derivative Products, L.P. and
Goldman Sachs Capital Markets, Inc. (the "Swap Counterparties").
2. The following paragraph is hereby added to Section 7 of the
Underwriting Agreement:
(n) The Swap Agreements shall have been entered into by the Trust
and the respective Swap Counterparties, and the Underwriters shall have
received a copy, addressed to them or on which they are otherwise entitled to
rely, of each opinion of counsel required to be delivered thereunder at or
before the Time of Delivery, and a copy of each certificate required to be
delivered thereunder at or before the Time of Delivery.
<PAGE>
Exhibit 4.1
INTERIM TRUST AGREEMENT
between
SLM FUNDING CORPORATION,
as Seller
and
CHASE MANHATTAN BANK DELAWARE,
not in its individual capacity but solely
as Interim Eligible Lender Trustee
Dated as of February 1, 2000
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
ARTICLE I
<S> <C>
DEFINITIONS AND USAGE.................................................1
ARTICLE II
APPOINTMENT OF INTERIM ELIGIBLE LENDER TRUSTEE.................................1
LENDER TRUSTEE................................................ ........1
SECTION 2.2 DECLARATION OF TRUST...................................................2
SECTION 2.3 TITLE TO INTERIM TRUST LOANS...........................................2
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLER..................................2
ARTICLE IV
AUTHORITY AND DUTIES OF INTERIM ELIGIBLE LENDER TRUSTEE
SECTION 4.1 GENERAL AUTHORITY.....................................................3
SECTION 4.2 GENERAL DUTIES........................................................3
SECTION 4.3 NO DUTIES EXCEPT AS SPECIFIED IN THIS AGREEMENT.......................4
SECTION 4.4 NO ACTION EXCEPT UNDER SPECIFIED DOCUMENTS............................4
SECTION 4.5 RESTRICTIONS..........................................................4
ARTICLE V
CONCERNING THE INTERIM ELIGIBLE LENDER TRUSTEE
SECTION 5.1 ACCEPTANCE OF TRUST AND DUTIES.........................................4
SECTION 5.2 REPRESENTATIONS AND WARRANTIES.........................................5
SECTION 5.3 NOT ACTING IN INDIVIDUAL CAPACITY......................................6
SECTION 5.4 INTERIM ELIGIBLE LENDER TRUSTEE NOT LIABLE FOR THE INTERIM
TRUST LOANS ...........................................................6
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
PAGE
ARTICLE VI
<S> <C>
COMPENSATION OF INTERIM ELIGIBLE LENDER TRUSTEE................................6
ARTICLE VII
TERMINATION OF INTERIM TRUST AGREEMENT.......................................7
</TABLE>
<TABLE>
<CAPTION>
ARTICLE VIII
<S> <C>
SUCCESSOR INTERIM ELIGIBLE LENDER TRUSTEES....................................7
SECTION 8.1 ELIGIBILITY REQUIREMENTS FOR INTERIM ELIGIBLE LENDER TRUSTEE ..........7
SECTION 8.2 RESIGNATION OR REMOVAL OF INTERIM ELIGIBLE LENDER TRUSTEE .............7
SECTION 8.3 SUCCESSOR INTERIM ELIGIBLE LENDER TRUSTEE .............................8
SECTION 8.4 MERGER OR CONSOLIDATION OF INTERIM ELIGIBLE LENDER TRUSTEE ............9
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 SUPPLEMENTS AND AMENDMENTS .............................................9
SECTION 9.2 NOTICES ...............................................................10
SECTION 9.3 SEVERABILITY ..........................................................10
SECTION 9.4 SEPARATE COUNTERPARTS .................................................11
SECTION 9.5 SUCCESSORS AND ASSIGNS ................................................11
SECTION 9.6 HEADINGS ..............................................................11
SECTION 9.7 GOVERNING LAW .........................................................11
</TABLE>
ii
<PAGE>
INTERIM TRUST AGREEMENT dated as of February 1, 2000, between SLM
FUNDING CORPORATION, a Delaware corporation (the "Seller") and CHASE MANHATTAN
BANK DELAWARE, a Delaware banking corporation, not in its individual capacity
but solely as Interim Eligible Lender Trustee (the "Interim Eligible Lender
Trustee").
WHEREAS, the Seller is a special purpose corporation established for
the purpose of purchasing Loans from the Student Loan Marketing Association for
immediate resale to special purpose trusts established for the purpose of
financing the purchase of such Loans; and
WHEREAS, the Seller has entered into the Purchase Agreement with the
Student Loan Marketing Association and the Sale Agreement with SLM Student Loan
Trust 2000-1 for the purpose of effecting such a purchase and resale; and
WHEREAS, the Seller is not an "eligible lender" within the meaning of
Section 435(d) of the Higher Education Act for the purpose of holding legal
title to the Loans to be purchased under the Purchase Agreement and any Trust
Student Loans required to be repurchased from the Trust pursuant to the Sale
Agreement;
WHEREAS, the Interim Eligible Lender Trustee is an "eligible lender"
within the meaning of Section 435(d) of the Higher Education Act and is willing
to hold legal title to such Loans and any such Trust Student Loans
(collectively, the "Interim Trust Loans") on behalf and for the benefit of the
Seller;
NOW, THEREFORE, the Seller and the Interim Eligible Lender Trustee
hereby agree as follows:
ARTICLE I
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
Appendix A hereto, which also contains rules as to usage that shall be
applicable herein.
ARTICLE II
APPOINTMENT OF INTERIM ELIGIBLE LENDER TRUSTEE
SECTION 2.1 APPOINTMENT OF INTERIM ELIGIBLE LENDER TRUSTEE. The Seller
hereby appoints the Interim Eligible Lender Trustee, effective as of the date
hereof, as trustee, to have all the rights, powers and duties set forth herein,
including, without
<PAGE>
limitation:
a. to hold legal title to the Interim Trust Loans on behalf and for the
benefit of the Seller;
b. to enter into and perform its obligations as the Interim Eligible
Lender Trustee under the Purchase Agreement, the Sale Agreement and
this Agreement; and
c. 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.
SECTION 2.2 DECLARATION OF TRUST. The Interim Eligible Lender Trustee
hereby declares that it will hold the Interim Trust Loans in trust upon and
subject to the conditions set forth herein for the use and benefit of the
Seller, subject to the obligations of the Interim Eligible Lender Trustee under
the Purchase Agreement and the Sale Agreement. Effective as of the date hereof,
the Interim Eligible Lender Trustee shall have all rights, powers and duties set
forth herein with respect to accomplishing the purposes of this Agreement.
SECTION 2.3 TITLE TO INTERIM TRUST LOANS. Legal title to all of the Interim
Trust Loans shall be vested at all times in the Interim Eligible Lender Trustee
on behalf of and for the benefit of the Seller.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller hereby represents and warrants to the Interim Eligible
Lender Trustee that:
1. The Seller is duly organized and validly existing as a
Delaware corporation in good standing under the laws of the
State of Delaware, 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.
2. The Seller 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 has been
duly authorized by the Seller by all necessary corporate
action.
2
<PAGE>
3. This Agreement constitutes a legal, valid and binding
obligation of the Seller 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.
4. 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
incorporation or by-laws of the Seller, or any indenture,
agreement or other instrument to which the Seller 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 other than as contemplated by the Basic
Documents); nor violate any law or any order, rule or
regulation applicable to the Seller of any court or of any
Federal or state regulatory body, administrative agency or
other governmental instrumentality having jurisdiction over
the Seller or its properties.
ARTICLE IV
AUTHORITY AND DUTIES OF INTERIM ELIGIBLE LENDER TRUSTEE
SECTION 4.1 GENERAL AUTHORITY. The Interim Eligible Lender Trustee is
authorized and directed to execute and deliver the Purchase Agreement, the Sale
Agreement and this Agreement and each certificate or other document attached as
an exhibit to or contemplated by such agreements, in each case, in such form as
the Seller shall approve as evidenced conclusively by the Interim Eligible
Lender Trustee's execution thereof. The Interim Eligible Lender Trustee is also
authorized and directed on behalf and for the benefit of the Seller to acquire
and hold legal title to the Interim Trust Loans and to take all actions required
of the Interim Eligible Lender Trustee pursuant to the Purchase Agreement, the
Sale Agreement and this Agreement.
SECTION 4.2 GENERAL DUTIES. It shall be the duty of the Interim
Eligible Lender Trustee to discharge (or cause to be discharged) all its
responsibilities as the Interim Eligible Lender Trustee pursuant to the terms of
the Purchase Agreement, the Sale Agreement and this Agreement.
3
<PAGE>
SECTION 4.3 NO DUTIES EXCEPT AS SPECIFIED IN THIS AGREEMENT. The
Interim Eligible Lender 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 Interim Trust Loans, or to otherwise take or refrain
from taking any action under, or in connection with, any document contemplated
hereby to which the Interim Eligible Lender Trustee is a party, except as
expressly provided by the terms of the Purchase Agreement, the Sale Agreement or
this Agreement; and no implied duties or obligations shall be read into this
Agreement, the Purchase Agreement or the Sale Agreement against the Interim
Eligible Lender Trustee.
SECTION 4.4 NO ACTION EXCEPT UNDER SPECIFIED DOCUMENTS. The Interim
Eligible Lender Trustee shall not otherwise deal with the Interim Trust Loans
except in accordance with the powers granted to and the authority conferred upon
the Interim Eligible Lender Trustee pursuant to this Agreement, the Purchase
Agreement and the Sale Agreement.
SECTION 4.5 RESTRICTIONS. The Interim Eligible Lender Trustee shall not
take any action that is inconsistent with the purposes of the Trust set forth in
the Basic Documents.
ARTICLE V
CONCERNING THE INTERIM ELIGIBLE LENDER TRUSTEE
SECTION 5.1 ACCEPTANCE OF TRUST AND DUTIES. The Interim Eligible Lender
Trustee accepts the trust hereby created and agrees to perform its duties
hereunder with respect to such trust but only upon the terms of this Agreement.
The Interim Eligible Lender Trustee shall not be answerable or accountable
hereunder or under the Purchase Agreement or the Sale Agreement under any
circumstances, except (i) for its own willful misconduct or negligence or (ii)
in the case of the inaccuracy of any representation or warranty contained in
Section 5.2 expressly made by the Interim Eligible Lender Trustee. In
particular, but not by way of limitation (and subject to the exceptions set
forth in the preceding sentence):
1. the Interim Eligible Lender Trustee shall not be liable for
any error of judgment made by a responsible officer of the
Interim Eligible Lender Trustee;
2. no provision of this Agreement, the Purchase Agreement or the
Sale Agreement shall require the Interim Eligible Lender
Trustee to expend or risk funds or otherwise incur any
financial liability in the
4
<PAGE>
performance of any of its rights or powers hereunder or under
the Purchase Agreement or the Sale Agreement, if the Interim
Eligible Lender 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; and
3. the Interim Eligible Lender 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 Seller or for
the form, character, genuineness, sufficiency, value or
validity of any of the Interim Trust Loans or for or in
respect of the validity or sufficiency of the Purchase
Agreement or the Sale Agreement.
SECTION 5.2 REPRESENTATIONS AND WARRANTIES. The Interim Eligible Lender
Trustee hereby represents and warrants to the Seller that:
1. It is duly organized and validly existing in good standing
under the laws of its governing jurisdiction and has an office
located within the State of Delaware. It has all requisite
corporate power and authority to execute, deliver and perform
its obligations under the Purchase Agreement, the Sale
Agreement and this Agreement.
2. It has taken all corporate action necessary to authorize the
execution and delivery by it of the Purchase Agreement, the
Sale Agreement and this Agreement, and the Purchase Agreement,
the Sale Agreement and this Agreement have been executed and
delivered by one of its officers who is duly authorized to
execute and deliver the same on its behalf.
3. Neither the execution nor the delivery by it of the Purchase
Agreement, the Sale Agreement or this Agreement, nor the
consummation by it of the transactions contemplated thereby or
hereby nor compliance by it with any of the terms or
provisions thereof or hereof will contravene any Federal or
Delaware state law, governmental rule or regulation governing
the banking or trust powers of the Interim Eligible Lender
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
5
<PAGE>
bound.
4. It is and will maintain its status as an "eligible lender" (as
such term is defined in Section 435(d) of the Higher Education
Act) for purposes of holding legal title to the Interim Trust
Loans as contemplated by this Agreement, the Purchase
Agreement and the Sale Agreement.
SECTION 5.3 NOT ACTING IN INDIVIDUAL CAPACITY. Except as provided in
this Article V, in accepting the trust hereby created, Chase Manhattan Bank
Delaware acts solely as Interim Eligible Lender Trustee hereunder and not in its
individual capacity.
SECTION 5.4 INTERIM ELIGIBLE LENDER TRUSTEE NOT LIABLE FOR THE INTERIM
TRUST LOANS. The Interim Eligible Lender Trustee makes no representations as to
the validity or sufficiency of this Agreement, the Purchase Agreement or the
Sale Agreement, or of any Interim Trust Loan or related documents. The Interim
Eligible Lender Trustee shall at no time have any responsibility for or with
respect to the sufficiency of the Interim Trust Loans; the validity or
completeness of the assignment to the Interim Eligible Lender Trustee of legal
title to any Interim Trust Loan on behalf and for the benefit of the Seller; the
performance or enforcement (except as expressly set forth in the Purchase
Agreement or the Sale Agreement) of any Interim Trust Loan; the compliance by
the Seller or the Servicer with any warranty or representation 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 Administrator, the Indenture
Trustee or the Servicer or any subservicer taken in the name of the Interim
Eligible Lender Trustee.
ARTICLE VI
COMPENSATION OF INTERIM ELIGIBLE LENDER TRUSTEE
The Interim Eligible Lender Trustee shall receive as compensation for
its services hereunder such fees as have been separately agreed upon before the
date hereof between the Seller and the Interim Eligible Lender Trustee, and the
Interim Eligible Lender Trustee shall be entitled to be reimbursed by the
Seller, to the extent provided in such separate agreement, for its other
reasonable expenses hereunder.
6
<PAGE>
ARTICLE VII
TERMINATION OF INTERIM TRUST AGREEMENT
This Agreement (other than Article VI) and the trust created hereby
shall terminate and be of no further force or effect upon the earlier of (i) the
termination of the Trust pursuant to Section 9.1 of the Trust Agreement and (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.
ARTICLE VIII
SUCCESSOR INTERIM ELIGIBLE LENDER TRUSTEES
SECTION 8.1 ELIGIBILITY REQUIREMENTS FOR INTERIM ELIGIBLE LENDER
TRUSTEE. The Interim Eligible Lender Trustee shall at all times be a corporation
or association (i) qualifying as an "eligible lender" as such term is defined in
Section 435(d) of the Higher Education Act for purposes of holding legal title
to the Interim Trust Loans on behalf and for the benefit of the Seller, with a
valid lender identification number with respect to the Interim Trust Loans from
the Department; and (ii) being authorized to exercise corporate trust powers and
hold legal title to the Interim Trust Loans. In case at any time the Interim
Eligible Lender Trustee shall cease to be eligible in accordance with the
provisions of this Section, the Interim Eligible Lender Trustee shall resign
immediately in the manner and with the effect specified in Section 8.2.
SECTION 8.2 RESIGNATION OR REMOVAL OF INTERIM ELIGIBLE LENDER TRUSTEE.
The Interim Eligible Lender Trustee may at any time resign and be discharged
from the trust hereby created by giving written notice thereof to the Seller.
Upon receiving such notice of resignation, the Seller shall promptly appoint a
successor Interim Eligible Lender Trustee meeting the eligibility requirements
of Section 8.1 by written instrument, in duplicate, one copy of which instrument
shall be delivered to the resigning Interim Eligible Lender Trustee and one copy
to the successor Interim Eligible Lender Trustee. If no successor Interim
Eligible Lender Trustee shall have been so appointed and have accepted
appointment within 30 days after the giving of such notice of resignation, the
resigning Interim Eligible Lender Trustee may petition any court of competent
jurisdiction for the appointment of a successor Interim Eligible Lender 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 Interim Eligible
Lender Trustee from any
7
<PAGE>
obligations otherwise imposed on it under this Agreement, the Purchase Agreement
or the Sale Agreement until such successor has in fact assumed such appointment.
If at any time the Interim Eligible Lender Trustee shall cease to be or
shall be likely to cease to be eligible in accordance with the provisions of
Section 8.1 and shall fail to resign after written request therefor by the
Seller, then the Seller may remove the Interim Eligible Lender Trustee. If the
Seller shall remove the Interim Eligible Lender Trustee under the authority of
the immediately preceding sentence, the Seller shall promptly appoint a
successor Interim Eligible Lender Trustee by written instrument, in duplicate,
one copy of which instrument shall be delivered to the outgoing Interim Eligible
Lender Trustee so removed and one copy to the successor Interim Eligible Lender
Trustee together with payment of all fees owed to the outgoing Interim Eligible
Lender Trustee.
Any resignation or removal of the Interim Eligible Lender Trustee and
appointment of a successor Interim Eligible Lender Trustee pursuant to any of
the provisions of this Section shall not become effective until acceptance of
appointment by the successor Interim Eligible Lender Trustee pursuant to Section
8.3 and payment of all fees and expenses owed to the outgoing Interim Eligible
Lender Trustee.
SECTION 8.3 SUCCESSOR INTERIM ELIGIBLE LENDER TRUSTEE. Any successor
Interim Eligible Lender Trustee appointed pursuant to Section 8.2 shall execute,
acknowledge and deliver to the Seller and to its predecessor Interim Eligible
Lender Trustee an instrument accepting such appointment under this Agreement,
and thereupon the resignation or removal of the predecessor Interim Eligible
Lender Trustee shall become effective and such successor Interim Eligible Lender
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 Interim Eligible
Lender Trustee. The predecessor Interim Eligible Lender Trustee shall upon
payment of its fees and expenses deliver to the successor Interim Eligible
Lender Trustee all documents, statements, moneys and properties held by it under
this Agreement and shall assign, if permissible, to the successor Interim
Eligible Lender Trustee any lender identification number obtained from the
Department with respect to the Interim Trust Loans; and the Seller and the
predecessor Interim Eligible Lender Trustee shall execute and deliver such
instruments and do such other things as may reasonably be required for fully and
certainly vesting and confirming in the successor Interim Eligible Lender
Trustee all such rights, powers, duties and obligations.
8
<PAGE>
No successor Interim Eligible Lender Trustee shall accept such
appointment as provided in this Section unless at the time of such acceptance
such successor Eligible Lender Trustee shall be eligible pursuant to Section
8.1.
SECTION 8.4 MERGER OR CONSOLIDATION OF INTERIM ELIGIBLE LENDER TRUSTEE.
Any corporation into which the Interim Eligible Lender 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 Interim Eligible
Lender Trustee shall be a party, or any corporation succeeding to all or
substantially all the corporate trust business of the Interim Eligible Lender
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 Interim Eligible Lender Trustee
hereunder; PROVIDED that such corporation shall be eligible pursuant to Section
8.1.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 SUPPLEMENTS AND AMENDMENTS. This Agreement may be amended
by the Seller and the Interim Eligible Lender Trustee, with prior written notice
to the Rating Agencies, 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 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.
This Agreement may also be amended from time to time by the Seller and
the Interim Eligible Lender Trustee, with prior written notice to the Rating
Agencies, with the consent of (i) the Noteholders of Notes evidencing not less
than a majority of the Outstanding Amount of the Notes and (ii) 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) increase or reduce in any
manner the amount of, or accelerate or delay the timing of, collections of
payments on Trust Student Loans or
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<PAGE>
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 required to
consent to any such amendment, without the consent of all the outstanding
Noteholders and Certificateholders.
Promptly after the execution of any such amendment or consent, the
Interim Eligible Lender 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 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 Interim Eligible Lender Trustee may prescribe.
Prior to the execution of any amendment to this Agreement, the Interim
Eligible Lender 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 Interim Eligible Lender Trustee may, but shall not be
obligated to, enter into any such amendment which affects the Interim Eligible
Lender Trustee's own rights, duties or immunities under this Agreement or
otherwise.
SECTION 9.2 NOTICES. 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 Interim
Eligible Lender Trustee shall be deemed given only upon actual receipt by the
Interim Eligible Lender Trustee), if to the Interim Eligible Lender Trustee,
addressed to its Corporate Trust Office; if to the Seller, addressed to SLM
Funding Corporation, 777 Twin Creek Drive, Killeen, Texas 76543, or, as to each
party, at such other address as shall be designated by such party in a written
notice to each other party.
SECTION 9.3 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
10
<PAGE>
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 9.4 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 9.5 SUCCESSORS AND ASSIGNS. All covenants and agreements
contained herein shall be binding upon and to the benefit of, the Seller and its
successors and the Interim Eligible Lender Trustee and its successors, all as
herein provided.
SECTION 9.6 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 9.7 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, 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.
11
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Interim Trust Agreement to be duly executed by their respective officers
hereunto duly authorized, as of the day and year first above written.
CHASE MANHATTAN BANK DELAWARE,
not in its individual capacity
but solely as Interim Eligible
Lender Trustee,
By /s/ John J. Cashin
-------------------------------------
Name: John J. Cashin
Title: Vice President
SLM FUNDING CORPORATION,
Seller,
By /s/ J. Lance Franke
-------------------------------------
Name: J. Lance Franke
Title: Chief Financial Officer
12
<PAGE>
TRUST AGREEMENT
TRUST AGREEMENT, dated as of February 1, 2000, between SLM Funding
Corporation, a Delaware corporation (the "Depositor"), and Chase Manhattan Bank
Delaware, a Delaware banking corporation, not in its individual capacity but
solely as Interim Eligible Lender Trustee (the "Trustee"). The Depositor and the
Trustee hereby agree as follows:
1. The trust created hereby shall be known as SLM Student Loan Trust 2000-1
(the "Trust") in which name the Trustee may conduct the business of the Trust,
make and execute contracts, and sue and be sued.
2. The Depositor hereby assigns, transfers, conveys and sets over to the
Trustee the sum of $1. The Trustee hereby acknowledges receipt of such amount
in trust from the Depositor, which amount shall constitute the initial trust
estate. The Trustee hereby declares that it will hold the trust estate in
trust for the Depositor. It is the intention of the parties hereto that the
Trust created hereby constitute a business trust under Chapter 38 of Title 12
of the Delaware Code, 12 DEL. C. Section 3801 ET SEQ. and that this document
constitute the governing instrument of the Trust. The Trustee is hereby
authorized and directed to execute and file a certificate of trust with the
Delaware Secretary of State in the form attached hereto.
3. The Depositor and the Trustee will enter into an amended and restated
Interim Trust Agreement, satisfactory to each such party, to provide for the
contemplated operation of the Trust created hereby. Prior to the execution and
delivery of such amended and restated Interim Trust Agreement, the Trustee shall
not have any duty or obligation hereunder or with respect to the trust estate,
except (i) the Trustee is hereby authorized and directed to execute and deliver,
on behalf of the Trust, five (5) separate Reports (the "Reports"), each dated
February __, 2000, to the Registrar of Companies in Singapore, relating to the
sale of the Trust's (a) Floating Rate Class A-1T Student Loan-Backed Notes, (b)
Floating Rate Class A-1L Student Loan-Backed Notes, (c) Floating Rate Class A-2T
Student Loan-Backed Notes, (d) Floating Rate Class A-2L Student Loan-Backed
Notes, and (e) Floating Rate Student Loan-Backed Certificates, all under Section
1061(1) pursuant to an exemption under Division 5A (Form 30B), and (ii) as
otherwise required by applicable law or as may be necessary to obtain prior to
such execution and delivery any licenses, consents or approvals required by
applicable law or otherwise.
4. (a) Except as otherwise expressly required in Sections 2 and 3 of this
Trust Agreement, the Trustee shall not have any duty or liability with respect
to the administration of the Trust or the filing of the Reports, the investment
of the Trust's property or the payment of dividends or other distributions of
income or principal to the Trust's beneficiaries, and no implied obligations
shall be inferred from this Trust Agreement on the part of the Trustee. The
Trustee shall not be liable for the acts or omissions of the Depositor or any
other person who acts on behalf of the Trust nor shall the Trustee be liable for
any act or omission by it in good faith in accordance with the directions of the
Depositor.
<PAGE>
(b) The Trustee accepts the trusts hereby created and agrees to perform its
duties hereunder with respect to the same but only upon the terms of this Trust
Agreement. The Trustee shall not be personally liable under any circumstances,
except for its own willful misconduct or gross negligence. In particular, but
not by way of limitation:
(i) The Trustee shall not be personally liable for any error of
judgment made in good faith by an officer or employee of the Trustee;
(ii) No provision of this Trust Agreement shall require the Trustee
to expend or risk its personal funds or otherwise incur any financial
liability in the performance of its rights or duties hereunder, if the
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;
(iii) Under no circumstance shall the Trustee be personally liable
for any representation, warranty, covenant or indebtedness of the Trust or
the filing of the Reports;
(iv) The Trustee shall not be personally responsible for or in
respect of the genuineness, form or value of the Trust property, the validity
or sufficiency of this Trust Agreement or for the due execution hereof by the
Depositor;
(v) In the event that the Trustee is unsure as to the course of
action to be takenb by it hereunder, the Trustee may request instructions
from the Depositor and to the extent the Trustee follows such instructions in
good faith it shall not be liable to any person. In the event that no
instructions are provided within the time requested by the Trustee, it shall
have no duty or liability for its failure to take any action or for any
action it takes in good faith;
(vi) All funds deposited with the Trustee hereunder may be held in
a non-interest bearing trust account and the Trustee shall not be liable for
any interest thereon or for any loss as a result of the investment thereof at
the direction of the Depositor;
(vii) To the extent that, at law or in equity, the Trustee has
duties and liabilities relating thereto to the Depositor or the Trust, the
Depositor agrees that such duties and liabilities are replaced by the terms
of this Trust Agreement.
(c) The Trustee shall incur no liability to anyone in acting upon any
document believed by it to be genuine and believed by it to be signed by the
proper party or parties. The 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 manner of ascertainment is not specifically prescribed herein, the
Trustee may for all purposes hereof rely on a certificate, signed by the
Depositor, as to such fact or matter, and such certificate shall constitute
full protection to the Trustee for any action taken or omitted to be taken by
it in good faith in reliance thereon.
-2-
<PAGE>
(d) In the exercise or administration of the trusts hereunder, the Trustee
(i) may act directly or, at the expense of the Depositor, through agents or
attorneys, and the Trustee shall not be liable for the default or misconduct of
such attorneys or agents if such agents and attorneys shall have been selected
by the Trustee in good faith, and (ii) may, at the expense of the Depositor,
consult with counsel, accountants and other experts, and it shall not be liable
for anything done, suffered or omitted in good faith by it in accordance with
the advice or opinion of any such counsel, accountants or other experts.
(e) Notwithstanding anything contained herein to the contrary, neither
Chase Manhattan Bank Delaware nor the Trustee shall be required to take any
action in any jurisdiction other than the State of Delaware if the taking of
such action will (i) require the consent or approval or authorization or order
of or the giving of notice to, or the registration with or the taking of any
other action in respect of, any state or other governmental authority or agency
of any jurisdiction other than the State of Delaware, (ii) result in any fee,
tax or other governmental charge under the laws of any jurisdiction or any
political subdivision thereof in existence becoming payable by Chase Manhattan
Bank Delaware, or (iii) subject Chase Manhattan Bank Delaware to personal
jurisdiction in any jurisdiction other than the State of Delaware for causes of
action arising from acts unrelated to the consummation of the transactions by
Chase Manhattan Bank Delaware or the Trustee, as the case may be, contemplated
hereby.
(f) Except as expressly provided in this Section 4, in accepting and
performing the trusts hereby created, the Trustee acts solely as trustee
hereunder and not in its individual capacity, and all persons having any claim
against the Trustee by reason of the transactions contemplated by this Trust
Agreement shall look only to the Trust's property for payment or satisfaction
thereof.
5. The Depositor hereby agrees to (i) compensate the Trustee for its
services hereunder in an amount separately agreed to by the Depositor and the
Trustee, (ii) reimburse the Trustee for all reasonable expenses (including
reasonable fees and expenses of counsel and other experts) and (iii) indemnify,
defend and hold harmless the Trustee and any of the officers, directors,
employees and agents of the Trustee (the "Indemnified Persons") from and against
any and all losses, damages, liabilities, claims, actions, suits, costs,
expenses, disbursements (including reasonable fees and expenses of its counsel),
taxes and penalties of any kind and nature whatsoever (collectively,
"Expenses"), to the extent that such Expenses arise out of or are imposed upon
or asserted at any time against such Indemnified Person with respect to the
performance of this Trust Agreement, the creation, operation or termination of
the Trust or the transactions contemplated hereby; PROVIDED, HOWEVER, that the
Depositor shall not be required to indemnify any Indemnified Person for any
Expenses which are a result of the willful misconduct, bad faith or gross
negligence of such Indemnified Person. The obligations of the Depositor under
this Section 5 shall survive the termination of this Trust Agreement.
-3-
<PAGE>
6. The Trustee may resign upon thirty days prior notice to the Depositor.
If no successor has been appointed within such thirty day period, the Trustee
may, at the expense of the Trust, petition a court of competent jurisdiction to
appoint a successor trustee.
7. This Trust Agreement constitutes the entire agreement between the
parties hereto with respect to the subject matter hereof, and supersedes all
prior agreement and understandings between the parties.
8. This Trust Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware, without reference to is conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
shall be determined in accordance with such laws.
9. This Trust Agreement may be executed in one or more counterparts, each
of which when so executed shall be an original and all of which when taken
together shall constitute but one and the same instrument.
[SIGNATURE PAGE FOLLOWS]
-4-
<PAGE>
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.
SLM FUNDING CORPORATION, as Depositor
By: /S/ J. LANCE FRANKE
------------------------------------------
Name: J. Lance Franke
Title: Chief Financial Officer
CHASE MANHATTAN BANK DELAWARE, not
in its individual capacity but
solely as Interim Eligible Lender Trustee
By: /S/ JOHN J. CASHIN
------------------------------------------
Name: John J. Cashin
Title: Vice President
-5-
<PAGE>
Exhibit 4.2.2
- -------------------------------------------------------------------------------
AMENDED AND RESTATED
TRUST AGREEMENT
between
SLM FUNDING CORPORATION,
as Depositor
and
CHASE MANHATTAN BANK DELAWARE,
not in its individual capacity but solely
as Eligible Lender Trustee
Dated as of February 1, 2000
- -------------------------------------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
-----------------
PAGE
<S> <C> <C>
ARTICLE I
Section 1.1 Definitions and Usage....................................................1
ARTICLE II
SECTION 2.1 Creation of Trust; Name..................................................1
SECTION 2.2 Office...................................................................1
SECTION 2.3 Purposes and Powers......................................................1
SECTION 2.4 Appointment of Eligible Lender 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......................................3
SECTION 2.8 Title to Trust Property..................................................3
SECTION 2.9 Representations and Warranties of the Depositor..........................4
SECTION 2.10 Application of Trust Funds...............................................5
ARTICLE III
SECTION 3.1 Initial Beneficial Ownership.............................................7
SECTION 3.2 The Trust Certificates...................................................7
SECTION 3.3 Authentication of Trust Certificates.....................................7
SECTION 3.4 Registration of Transfer and Exchange
of Trust Certificates....................................................8
SECTION 3.5 Mutilated, Destroyed, Lost or Stolen Trust Certificates..................9
SECTION 3.6 Persons Deemed Owners...................................................10
SECTION 3.7 Access to List of Certificateholders' Names and Addresses...............10
SECTION 3.8 Maintenance of Office or Agency.........................................10
SECTION 3.9 Appointment of Certificate Paying Agent.................................11
SECTION 3.10 Book-Entry Certificates.................................................12
SECTION 3.11 Notices to Clearing Agency..............................................13
SECTION 3.12 Definitive Certificates.................................................13
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
PAGE
ARTICLE IV
<S> <C> <C>
SECTION 4.1 Prior Notice to Certificateholders
With Respect to Certain Matters.........................................14
SECTION 4.2 Action by Certificateholders with
Respect to Certain Matters..............................................15
SECTION 4.3 Action by Certificateholders with
Respect to Bankruptcy...................................................15
SECTION 4.4 Restrictions on Certificateholders'
Power...................................................................15
SECTION 4.5 Majority Control........................................................15
ARTICLE V
SECTION 5.1 Application of Trust Funds..............................................15
SECTION 5.2 Method of Payment.......................................................17
SECTION 5.3 No Segregation of Moneys; No Interest...................................17
SECTION 5.4 Accounting and Reports to the Note-
holders, Certificateholders, the
Internal Revenue Service and Others.....................................17
SECTION 5.5 Signature on Returns; Tax Matters
Partner.................................................................18
SECTION 5.6 Capital Accounts........................................................18
ARTICLE VI
SECTION 6.1 General Authority.......................................................19
SECTION 6.2 General Duties..........................................................20
SECTION 6.3 Action upon Instruction.................................................20
SECTION 6.4 No Duties Except as Specified in
this Agreement or in Instructions.......................................22
SECTION 6.5 No Action Except Under Specified
Documents or Instructions...............................................22
SECTION 6.6 Restrictions............................................................22
ARTICLE VII
SECTION 7.1 Acceptance of Trusts and Duties.........................................23
SECTION 7.2 Furnishing of Documents.................................................24
SECTION 7.3 Representations and Warranties..........................................25
SECTION 7.4 Reliance; Advice of Counsel.............................................25
SECTION 7.5 Not Acting in Individual Capacity.......................................26
SECTION 7.6 Eligible Lender Trustee Not Liable
for Trust Certificates or Trust Student Loans...........................26
SECTION 7.7 Eligible Lender Trustee May Own
Trust Certificates and Notes............................................27
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
ARTICLE VIII
SECTION 8.1 Eligible Lender Trustee's Fees and Expenses.............................27
SECTION 8.2 Payments to the Eligible Lender
Trustee.................................................................28
SECTION 8.3 Indemnity...............................................................28
ARTICLE IX
SECTION 9.1 Termination of Trust Agreement..........................................28
SECTION 9.2 Dissolution upon Insolvency of
the Depositor...........................................................29
ARTICLE X
SECTION 10.1 Eligibility Requirements for Eligible Lender Trustee....................30
SECTION 10.2 Resignation or Removal of Eligible
Lender Trustee..........................................................31
SECTION 10.3 Successor Eligible Lender Trustee.......................................32
SECTION 10.4 Merger or Consolidation of Eligible
Lender Trustee..........................................................33
SECTION 10.5 Appointment of Co-Eligible Lender
Trustee or Separate Eligible Lender
Trustee.................................................................33
ARTICLE XI
SECTION 11.1 Supplements and Amendments..............................................35
SECTION 11.2 No Legal Title to Trust Estate in
Certificateholders......................................................36
SECTION 11.3 Limitations on Rights of Others.........................................36
SECTION 11.4 Notices.................................................................36
SECTION 11.5 Severability............................................................37
SECTION 11.6 Separate Counterparts...................................................37
SECTION 11.7 Successors and Assigns..................................................37
SECTION 11.8 No Petition.............................................................37
SECTION 11.9 No Recourse.............................................................38
SECTION 11.10 Headings................................................................38
SECTION 11.11 Governing Law...........................................................38
</TABLE>
Exhibit A Form of Trust Certificate
Exhibit B Form of Certificate Depository Agreement
Annex 1 to Trust Agreement
iii
<PAGE>
AMENDED AND RESTATED TRUST AGREEMENT dated as of February 1, 2000,
between SLM FUNDING CORPORATION, a Delaware corporation, as Depositor, and CHASE
MANHATTAN BANK DELAWARE, a Delaware banking corporation, not in its individual
capacity but solely as Eligible Lender Trustee.
WITNESSETH:
WHEREAS, the Depositor and the Eligible Lender Trustee are parties to
that certain Trust Agreement dated as of February 1, 2000 (the "Short-Form Trust
Agreement") pursuant to which the SLM Student Loan Trust 2000-1 was created; and
WHEREAS, the Depositor and the Eligible Lender Trustee desire to amend
and restate the Short-Form Trust Agreement as set forth below.
NOW THEREFORE, the Depositor and the Eligible Lender Trustee hereby
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 Appendix A hereto, which also contains
rules as to usage that shall be applicable herein.
ARTICLE II
ORGANIZATION
SECTION 2.1 CREATION OF TRUST; NAME. There is hereby created a Trust
which shall be known as "SLM Student Loan Trust 2000-1", in which name the
Eligible Lender 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 business trust within the meaning of Section 3801(a) of
the Delaware Business Trust Act for which the Trustee has filed a certificate of
trust with the Secretary of State of the State of Delaware pursuant to Section
3810(a) of the Delaware Business Trust Act.
SECTION 2.2 OFFICE. The office of the Trust shall be in care of the
Eligible Lender Trustee at its Corporate Trust Office or at such other address
as the Eligible Lender Trustee may designate by written notice to the
Certificateholders and the Depositor.
<PAGE>
SECTION 2.3 PURPOSES AND POWERS. The purpose of the Trust is to engage
in the following activities:
(i) to issue the Notes pursuant to the Indenture and the Trust
Certificates pursuant to this Agreement and to sell the Notes and the
Trust Certificates in one or more transactions;
(ii) with the proceeds of the sale of the Notes and the Trust
Certificates, to fund the Reserve Account pursuant to Section 2.8 of
the Administration Agreement and to purchase the Trust Student Loans
pursuant to the Sale Agreement;
(iii) to Grant the Trust Estate to the Indenture Trustee
pursuant to the Indenture, and to hold, manage and distribute to the
Certificateholders pursuant to the terms of this Agreement any portion
of the Trust Estate released from the Lien of, and remitted to the
Trust pursuant to, the Indenture;
(iv) to enter into and perform its obligations under the Basic
Documents to which it is to be a party;
(v) 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
including but not limited to entering into and performing its
obligations under any Swap Agreements to which it is to be a party; and
(vi) subject to compliance with the Basic Documents, 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 the others specified in Section
2.7 of the Administration Agreement.
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 ELIGIBLE LENDER TRUSTEE. The Depositor
hereby appoints the Eligible Lender Trustee as trustee of the Trust effective as
of the date hereof, to have all the rights, powers and duties set forth herein.
SECTION 2.5 INITIAL CAPITAL CONTRIBUTION OF TRUST ESTATE. The Depositor
hereby sells, assigns, transfers, conveys and sets over to the Eligible Lender
Trustee, as of the date hereof, the sum of $1.00. The Eligible Lender Trustee
hereby acknowledges receipt in trust from the Depositor, as of the date hereof,
of the foregoing contribution, which shall constitute the Initial
2
<PAGE>
Trust Estate and shall be deposited in the Collection Account. The Depositor
shall pay the organizational expenses of the Trust as they may arise or shall,
upon the request of the Eligible Lender Trustee, promptly reimburse the Eligible
Lender Trustee for any such expenses paid by the Eligible Lender Trustee.
SECTION 2.6 DECLARATION OF TRUST. The Eligible Lender 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 other Basic Documents. It is
the intention of the parties hereto that the Trust constitute a business trust
under Delaware law and that this Agreement constitute the governing instrument
of such trust. It is the intention of the parties hereto that, solely for income
tax purposes, the Trust shall be treated as a partnership, with the assets of
the partnership being the Trust Student Loans and other assets held by the
Trust, the partners of the partnership being the Certificateholders (including
the Depositor as recipient of distributions from the Reserve Account), and the
Notes being debt of the partnership. The parties agree that, unless otherwise
required by appropriate tax authorities, 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 such tax purposes.
Effective as of the date hereof, the Eligible Lender 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) Notwithstanding the provisions of Section 3803 of the Delaware
Business Trust Act, the Depositor shall be liable directly to
and shall indemnify the injured party for all losses, claims,
damages, liabilities and expenses of the Trust (including
Expenses, to the extent that the assets of the Trust that
would remain if all of the Notes were paid in full would not
be sufficient to pay any such liabilities, or if such
liabilities in fact are not paid out of the Trust Estate) to
the extent that the Depositor would be liable if the Trust
were a partnership under the Delaware Revised 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 holder of limited recourse debt 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 third party
beneficiaries of this paragraph.
3
<PAGE>
(b) No Certificateholder 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 shall be vested at all times in the Trust as a separate legal entity
except where applicable law in any jurisdiction requires title to any part of
the Trust Estate to be vested in a trustee or trustees, in which case title
shall be deemed to be vested in the Eligible Lender Trustee, a co-trustee and/or
a separate trustee, as the case may be; provided that legal title to the Trust
Student Loans shall be vested at all times in the Eligible Lender Trustee on
behalf of the Trust.
SECTION 2.9 REPRESENTATIONS, WARRANTIES, AND COVENANTS OF THE
DEPOSITOR. The Depositor hereby represents, warrants and covenants to the
Eligible Lender Trustee as follows:
(a) The Depositor is duly organized and validly existing as a
Delaware corporation in good standing under the laws of the
State of Delaware, 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 corporate power and authority to execute
and deliver this Agreement and to carry out its terms; the
Depositor has full corporate power and authority to sell and
assign the property to be sold and assigned to and deposited
with the Trust (or with the Eligible Lender Trustee on behalf
of the Trust) and the Depositor has duly authorized such sale
and assignment and deposit to the Trust (or to the Eligible
Lender Trustee on behalf of the Trust) by all necessary
corporate action; and the execution, delivery and performance
of this Agreement has been duly authorized by the Depositor by
all necessary corporate action.
(c) This Agreement constitutes a legal, valid and binding
obligation of the Depositor 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) 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
incorporation or by-laws of the Depositor, or any indenture,
agreement or other instrument to which the Depositor is a
party or by which it is bound; nor result in the creation or
4
<PAGE>
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.
(e) The Depositor agrees for the benefit of the Noteholders and of
the Certificateholders that it will comply with each of the
requirements set forth in Article IX, X, and XII of its
Certificate of Incorporation and with each of the undertakings
set forth in Annex I hereto.
SECTION 2.10 APPLICATION OF TRUST FUNDS.
(a) INCOME AND LOSS ALLOCATIONS. After giving effect to the
special allocations set forth in subparagraph (b) of this
Section 2.10 and for purposes of maintaining Capital Accounts
under Section 5.6, gross income items of the Trust for any
Accrual Period as determined for Federal income tax purposes
shall be allocated as follows:
(1) first, among the Certificateholders as of the
close of business on the last day of such Accrual
Period, in proportion to the Certificate Balance of
the Certificates owned by them on such date, an
amount of gross income up to the sum of (i) the
portion of the Certificateholders' Return
Distribution Amount and the Certificate Return
Carryover, if any, for the related Distribution Date
allocable to such Accrual Period, (ii) return on the
excess, if any, of the Certificateholders' Return
Distribution Amount for the preceding Distribution
Date over the amount in respect of return on the
Certificates that is actually distributed to
Certificateholders on such preceding Distribution
Date, to the extent permitted by law, at the
Certificate Rate for such Accrual Period and (iii)
the portion of the market discount on the Trust
Student Loans accrued during such Accrual Period that
is allocable to the excess, if any, of the initial
aggregate principal amount of the Certificates over
their initial aggregate issue price; and
(2) the balance of Profits, if any, to the Depositor.
5
<PAGE>
If the items of gross income of the Trust for any month are
insufficient for the allocations described in clause (1)
above, subsequent items of gross income shall first be
allocated to make up such shortfall before Profits are
allocated as provided in clause (b). Loss of the Trust for any
Accrual Period shall be allocated to the Depositor to the
extent the Depositor is reasonably expected to bear the
economic burden of such Loss, and any remaining Loss shall be
allocated among the Certificateholders as of the close of
business on the last day of such Accrual Period in proportion
to the Certificate Balance of Trust Certificates owned by them
on such date. If any items of loss or deduction are allocated
to Certificateholders and the Depositor subsequently
determines that the economic loss to Certificateholders will
be less than was expected at the time such allocations were
made, additional items of gross income will be allocated to
Certificateholders in subsequent periods to offset the excess
allocations of losses and deductions to Certificateholders
before any Profits are allocated to the Depositor as provided
in clause (2) above.
(b) SPECIAL ALLOCATIONS.
(1) In the event any Certificateholder unexpectedly
receives any adjustments, allocations or
distributions described in Treasury Regulation
Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6), items of
Trust income and gain shall be specially allocated to
such Certificateholder in an amount and manner
sufficient to eliminate, to the extent required by
the Treasury Regulations, the deficit, if any, in the
balance of the Capital Account of such
Certificateholder as quickly as possible. This
Section 2.10(b) is intended to comply with the
qualified income offset provision in Section
1.704-1(b)(2)(ii)(d) of the Treasury Regulations.
(2) In the event the initial issue price of
Certificates differs from their initial Certificate
Balance, there shall be specially allocated to the
Certificateholders the portion, if any, of the offset
for premium (in the case the issue price of the
Certificates exceeds the Certificate Balance) on the
Trust Student Loans accruing for a calendar month
that is attributable to such difference.
(c) LIQUIDATING PROFIT OR LOSS. Liquidating Profit or Loss shall
be allocated, after all other adjustments are made to the
Capital Accounts (including adjustments to reflect the
Liquidating Distribution), as follows:
6
<PAGE>
(1) First, among the Certificateholders in proportion
to their ownership of the principal amount of
Certificates, in an amount that would cause their
Capital Account balances to equal zero (in the case
of the Depositor, taking into account the Capital
Account balance of the Depositor only to the extent
it relates to Certificates owned by the Depositor);
and
(2) Any balance, to the Depositor.
(d) TAX ALLOCATIONS. For Federal income tax purposes, each item of
income, gain, loss and deduction of the Trust shall be
allocated among the Certificateholders and the Depositor in
a manner consistent with the allocations set forth in this
Section 2.10, subject to the provisions of Section 704(c)
of the Code. Notwithstanding anything to the contrary set
forth in this Agreement, the Depositor is authorized to
modify the allocations of this Section 2.10(d) and Sections
2.10(a), (b) and (c) if necessary or appropriate, in the
Depositor's sole discretion, for the allocations to fairly
reflect the economic gain, income or loss to the Depositor
or the Certificateholders, or as otherwise required by the
Code or the Treasury Regulations.
ARTICLE III
TRUST 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 the Trust Certificates, the Depositor shall be the sole beneficial
owner of the Trust.
SECTION 3.2 THE TRUST CERTIFICATES. The Trust Certificates shall be
issued in denominations of $100,000 or in integral multiples of $1,000 in excess
thereof. The Trust Certificates shall be executed on behalf of the Trust by
manual or facsimile signature of an authorized officer of the Eligible Lender
Trustee. Trust Certificates bearing the manual or facsimile signatures of
individuals who were, at the time when such signatures were 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 Trust
Certificates or did not hold such offices at the date of authentication and
delivery of such Trust Certificates.
7
<PAGE>
SECTION 3.3 AUTHENTICATION OF TRUST CERTIFICATES. Concurrently with the
sale of the Trust Student Loans to the Trust pursuant to the Purchase Agreement,
the Eligible Lender Trustee shall cause the Trust Certificates in an aggregate
principal amount equal to the Initial Certificate Balance to be executed on
behalf of the Trust, authenticated and delivered to or upon the written order of
the Depositor, signed by its chairman of the board, its president or any vice
president, without further action by the Depositor, in authorized denominations.
No Trust Certificate shall entitle its holder to any benefit under this
Agreement, or shall be valid for any purpose, unless there shall appear on such
Trust Certificate a certificate of authentication substantially in the form set
forth in Exhibit A, executed by the Eligible Lender Trustee or The Chase
Manhattan Bank, as the Eligible Lender Trustee's authenticating agent, by manual
signature; such authentication shall constitute conclusive evidence that such
Trust Certificate shall have been duly authenticated and delivered hereunder.
All Trust Certificates shall be dated the date of their authentication. No
further Trust Certificates shall be issued except pursuant to Section 3.4, 3.5
or 3.12 hereunder.
SECTION 3.4 REGISTRATION OF TRANSFER AND EXCHANGE OF TRUST
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 Eligible
Lender Trustee shall provide for the registration of Trust Certificates and of
transfers and exchanges of Trust Certificates as herein provided. The Chase
Manhattan Bank shall be the initial Certificate Registrar.
Upon surrender for registration of transfer of any Trust Certificate at
the office or agency maintained pursuant to Section 3.8, the Eligible Lender
Trustee shall execute, authenticate and deliver (or shall cause The Chase
Manhattan Bank as its authenticating agent to authenticate and deliver), in the
name of the designated transferee or transferees, one or more new Trust
Certificates in authorized denominations of a like aggregate amount dated the
date of authentication by the Eligible Lender Trustee or any authenticating
agent. At the option of a Certificateholder, Trust Certificates may be exchanged
for other Trust Certificates of authorized denominations of a like aggregate
amount upon surrender of the Trust Certificates to be exchanged at the office or
agency maintained pursuant to Section 3.8.
Every Trust Certificate presented or surrendered for registration of
transfer or exchange shall be accompanied by a written instrument of transfer in
form satisfactory to the Eligible Lender Trustee and the Certificate Registrar
duly executed by the Certificateholder or his attorney duly authorized in
writing, with such signature guaranteed by a member firm of
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the New York Stock Exchange or a commercial bank or trust company. Each Trust
Certificate surrendered for registration of transfer or exchange shall be
cancelled and subsequently disposed of by the Eligible Lender Trustee in
accordance with its customary practice.
No service charge shall be made for any registration of transfer or
exchange of Trust Certificates, but the Eligible Lender 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 Trust Certificates.
The preceding provisions of this Section notwithstanding, the Eligible
Lender Trustee shall not be required to make and the Certificate Registrar need
not register transfers or exchanges of Trust Certificates for a period of 15
days preceding any Distribution Date with respect to the Trust Certificates.
The Trust Certificates and any beneficial interest in such Trust
Certificates may not be acquired by (a) employee benefit plans (as defined in
section 3(3) of ERISA) that are subject to the provisions of Title I of ERISA,
(b) 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
(c) entities whose underlying assets include plan assets by reason of a plan's
investment in such entities (each, a "Benefit Plan"). By accepting and holding a
Trust 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, is not purchasing Trust Certificates on behalf of a
Benefit Plan and is not using assets of a Plan to purchase any Certificates and
to have agreed that if the Trust Certificate is deemed to be a plan asset, the
Certificateholder will promptly dispose of the Trust Certificate.
SECTION 3.5 MUTILATED, DESTROYED, LOST OR STOLEN TRUST CERTIFICATES. If
(a) any mutilated Trust 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 Trust Certificate, and (b)
there shall be delivered to the Certificate Registrar and the Eligible Lender
Trustee such security or indemnity as may be required by them to save each of
them and the Trust harmless, then in the absence of notice that such Trust
Certificate shall have been acquired by a bona fide purchaser, the Eligible
Lender Trustee on behalf of the Trust shall execute and the Eligible Lender
Trustee shall authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Trust Certificate, a new Trust Certificate
of like tenor and denomination. In connection with the issuance of any new Trust
Certificate under this Section, the Eligible Lender Trustee and the Certificate
Registrar may require the payment of a sum
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sufficient to cover any tax or other governmental charge that may be imposed in
connection therewith. Any duplicate Trust Certificate issued pursuant to this
Section shall constitute conclusive evidence of ownership in the Trust, as if
originally issued, whether or not the lost, stolen or destroyed Trust
Certificate shall be found at any time.
SECTION 3.6 PERSONS DEEMED OWNERS. Prior to due presentation of a Trust
Certificate for registration of transfer, the Eligible Lender Trustee and the
Certificate Registrar and any agent of either of them may treat the Person in
whose name any Trust Certificate shall be registered in the Certificate Register
as the owner of such Trust Certificate for the purpose of receiving
distributions pursuant to Section 5.1 and for all other purposes whatsoever, and
neither the Eligible Lender Trustee, the Certificate Registrar nor any agent
thereof shall be bound by any notice to the contrary.
SECTION 3.7 ACCESS TO LIST OF CERTIFICATEHOLDERS' NAMES AND ADDRESSES.
The Eligible Lender Trustee shall furnish or cause to be furnished to the
Depositor, within 15 days after receipt by the Eligible Lender 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
25% of the Certificate Balance apply in writing to the Eligible Lender 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 Trust Certificates and such application is accompanied by a copy of the
communication that such applicants propose to transmit, then the Eligible Lender
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 Eligible Lender
Trustee shall 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 Trust Certificate,
shall be deemed to have agreed not to hold any of the Depositor, the Certificate
Registrar or the Eligible Lender 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 Eligible Lender
Trustee shall maintain in the Borough of Brooklyn, The City of New York, an
office or offices or agency or agencies where Trust Certificates may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Eligible Lender Trustee in respect of the Trust
Certificates and the other Basic Documents may be served. The Eligible Lender
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Trustee initially designates 1201 Market Street, Wilmington, Delaware, as its
principal Corporate Trust Office. The Eligible Lender Trustee's New York office
and its authenticating agent's office are located at 450 West 33rd Street, 15th
Floor, New York, New York 10001, Attention: Structured Finance Services. The
Eligible Lender 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 Accounts pursuant to
Section 5.1 and shall report the amounts of such distributions to the Eligible
Lender 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 Eligible Lender Trustee may revoke such
power and remove the Certificate Paying Agent if the Eligible Lender Trustee
determines in its sole discretion that the Certificate Paying Agent shall have
failed to perform its obligations under this Agreement in any material respect.
The Certificate Paying Agent shall initially be the Eligible Lender Trustee, and
any co-paying agent chosen by the Eligible Lender Trustee and consented to by
the Administrator (which consent shall not be unreasonably withheld). The
co-paying agent shall initially be the Indenture Trustee. The Eligible Lender
Trustee shall be permitted to resign as Certificate Paying Agent upon 30 days'
written notice to the Eligible Lender Trustee. In the event that the Eligible
Lender Trustee shall no longer be the Certificate Paying Agent, the Eligible
Lender Trustee shall appoint a successor to act as Certificate Paying Agent
(which shall be a bank or trust company). The Eligible Lender Trustee shall give
notice to the Rating Agencies of the appointment of a successor Certificate
Paying Agent. The Eligible Lender Trustee shall cause such successor Certificate
Paying Agent or any additional Certificate Paying Agent appointed by the
Eligible Lender Trustee to execute and deliver to the Eligible Lender Trustee an
instrument in which such successor Certificate Paying Agent or additional
Certificate Paying Agent shall agree with the Eligible Lender 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 Certificateholder
entitled thereto until such sums shall be paid to such Certificateholder. The
Certificate Paying Agent shall return all unclaimed funds to the Eligible Lender
Trustee and upon removal of a Certificate Paying Agent such Certificate Paying
Agent shall also return all funds in its possession to the Eligible Lender
Trustee. The provisions of Sections 7.1, 7.3, 7.4, 7.5 and 8.1 shall apply to
the Eligible Lender Trustee also in its role as Certificate Paying Agent, for so
long as the Eligible Lender Trustee shall act as
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Certificate Paying Agent 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.
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SECTION 3.10 BOOK-ENTRY CERTIFICATES. The Trust Certificates, upon
original issuance, will be issued in the form of a typewritten Trust Certificate
or Trust Certificates representing Book-Entry Certificates, to be delivered to
The Depository Trust Company, the initial Clearing Agency, by, or on behalf of,
the Trust. 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 Clearing Agency, and no Certificate Owner will
receive a Definitive Certificate representing such Certificate Owner's interest
in such Trust Certificate, except as provided in Section 3.12. Unless and until
definitive, fully registered Trust Certificates (the "Definitive Certificates")
have been issued to Certificate Owners pursuant to Section 3.12:
(i) the provisions of this Section shall be in full force and
effect;
(ii) the Certificate Registrar and the Eligible Lender Trustee
shall be entitled to deal with the Clearing Agency for all purposes of
this Agreement (including the payment of principal of and interest on
the Trust 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 Clearing Agency and shall be limited to those established
by law and agreements between such Certificate Owners and the Clearing
Agency and/or the Clearing Agency Participants. Pursuant to the
Certificate Depository Agreement, unless and until Definitive
Certificates are issued pursuant to Section 3.12, the initial Clearing
Agency will make book-entry transfers among the Clearing Agency
Participants and receive and transmit distribution in respect of the
Certificate Balance and return on the Trust Certificates to such
Clearing Agency Participants; and
(v) whenever this Agreement requires or permits actions to be
taken based upon instructions or directions of Certificateholders of
Trust Certificates evidencing a specified percentage of the Certificate
Balance, the Clearing Agency shall be deemed to represent such
percentage only to the extent that it has received instructions to such
effect from Certificate Owners and/or Clearing Agency Participants
owning or representing, respectively, such required percentage of the
beneficial interest in the Trust
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Certificates and has delivered such instructions to the
Eligible Lender Trustee.
SECTION 3.11 NOTICES TO CLEARING AGENCY. 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 3.12, the Eligible Lender Trustee shall give all such
notices and communications specified herein to be given to Certificateholders to
the Clearing Agency, and shall have no obligations to the Certificate Owners.
SECTION 3.12 DEFINITIVE CERTIFICATES. If (i) the Administrator advises
the Eligible Lender Trustee in writing that the Clearing Agency is no longer
willing or able to discharge properly its responsibilities with respect to the
Trust Certificates, and the Administrator is unable to locate a qualified
successor, (ii) the Administrator at its option advises the Eligible Lender
Trustee in writing that it elects to terminate the book-entry system through the
Clearing Agency or (iii) after the occurrence of an Event of Default, a Servicer
Default or an Administrator Default, Certificate Owners representing beneficial
interests aggregating at least a majority of the Certificate Balance advise the
Clearing Agency (which shall then notify the Eligible Lender Trustee) in writing
that the continuation of a book-entry system through the Clearing Agency is no
longer in the best interest of the Certificate Owners, then the Eligible Lender
Trustee shall cause the Clearing Agency 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
Eligible Lender Trustee of the typewritten Trust Certificate or Trust
Certificates representing the Book-Entry Certificates by the Clearing Agency,
accompanied by registration instructions, the Eligible Lender Trustee shall
execute and authenticate the Definitive Certificates in accordance with the
instructions of the Clearing Agency. Neither the Certificate Registrar nor the
Eligible Lender 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 Eligible
Lender 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 Eligible Lender
Trustee, as evidenced by its execution thereof.
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ARTICLE IV
ACTIONS BY ELIGIBLE LENDER TRUSTEE
SECTION 4.1 PRIOR NOTICE TO CERTIFICATEHOLDERS WITH RESPECT TO CERTAIN
MATTERS. With respect to the following matters, the Eligible Lender Trustee
shall not take action unless at least 30 days before the taking of such action,
the Eligible Lender Trustee shall have notified the Certificateholders and each
of the Rating Agencies in writing of the proposed action and the
Certificateholders shall not have notified the Eligible Lender Trustee in
writing prior to the 30th day after such notice is given that such
Certificateholders have withheld consent or provided alternative direction:
(a) the initiation of any material claim or lawsuit by the Trust
(except claims or lawsuits brought in connection with the
collection of the Trust Student 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 Trust Student Loans);
(b) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder is required;
(c) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder is not
required and such amendment materially adversely affects the
interest of the Certificateholders;
(d) 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;
(e) the amendment of any Swap Agreement in circumstances where the
consent of any Noteholder is required or in circumstances
where the consent of any Noteholder is not required but where
such amendment materially adversely affects the interest of
the Certificateholders; or
(f) the appointment pursuant to the Administration Agreement of a
successor Administrator, the appointment pursuant to the
Indenture of a successor Note Registrar, Paying Agent or
Indenture Trustee, or the
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appointment pursuant to this Agreement of a successor
Certificate Registrar or successor Certificate Paying Agent,
or the consent to the assignment by the Administrator, the
Note Registrar, the Paying Agent, the Indenture Trustee, the
Certificate Registrar or the Certificate Paying Agent of its
obligations under the Administration Agreement, the Indenture
or this Agreement, as applicable.
SECTION 4.2 ACTION BY CERTIFICATEHOLDERS WITH RESPECT TO CERTAIN
MATTERS. The Eligible Lender Trustee shall not have the power, except upon the
written direction of the Certificateholders and except as expressly provided in
the Basic Documents, to sell the Trust Student Loans after the termination of
the Indenture.
SECTION 4.3 ACTION BY CERTIFICATEHOLDERS WITH RESPECT TO BANKRUPTCY.
The Eligible Lender 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 the delivery
to the Eligible Lender Trustee by each such Certificateholder of a certificate
certifying that such Certificateholder reasonably believes that the Trust is
insolvent.
SECTION 4.4 RESTRICTIONS ON CERTIFICATEHOLDERS' POWER. The
Certificateholders shall not direct the Eligible Lender 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 Eligible Lender Trustee under this Agreement
or any of the other Basic Documents or would be contrary to Section 2.3 nor
shall the Eligible Lender 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 Trust Certificates evidencing a majority 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 Trust Certificates evidencing not
less than a majority 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.
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(a) On each Distribution Date, the Eligible Lender Trustee shall
distribute to Certificateholders (i) the Certificateholders'
Return Distribution Amount for such Distribution Date on a pro
rata basis according to amounts payable in respect of
Certificateholders' Return Distribution Amount, (ii) the
Certificate Balance Distribution Amount for such Distribution
Date, if any, on a pro rata basis according to amounts payable
in respect of the Certificate Balance, and (iii) the
Certificate Return Carryover for such Distribution Date, if
any, on a pro rata basis according to amounts payable in
respect of Certificate Return Carryover, as received from the
Indenture Trustee pursuant to Sections 2.7 and 2.8 of the
Administration Agreement on such Distribution Date.
(b) On each Distribution Date, the Eligible Lender Trustee shall
send to each Certificateholder the statement provided to the
Eligible Lender Trustee by the Administrator pursuant to
Section 2.9 of the Administration Agreement on such
Distribution Date.
(c) 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 Eligible Lender Trustee is hereby authorized and
directed to 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 Eligible Lender 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. The Eligible Lender Trustee shall withhold
or cause to be withheld at the maximum applicable rate
provided in section 1441, 1442 or 1446 of the Code with
respect to all distributions made to persons that are not
known to be U.S. Persons, within the meaning of the Code,
unless it is otherwise determined in the opinion of counsel.
In the event that a Certificateholder wishes to apply for a
refund of any such withholding tax, the Eligible Lender
Trustee shall reasonably cooperate with such Certificateholder
in making such claim so long as such
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Certificateholder agrees to reimburse the Eligible Lender
Trustee for any out-of-pocket expenses incurred.
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 preceding 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
therefor, if such Certificateholder shall have provided to the Certificate
Registrar appropriate written instructions signed by two authorized officers, if
any, at least five Business Days prior to such Distribution Date and such
Certificateholder's Trust 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 3.12, with respect to Trust Certificates
registered on the Record Date in the name of the nominee of the Clearing Agency
(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
Trust Certificate (whether on the Certificate Final Maturity Date or otherwise)
shall be payable only upon presentation and surrender of such Trust Certificate
at the Corporate Trust Office of the Eligible Lender Trustee or such other
location specified in writing to the Certificateholder thereof.
SECTION 5.3 NO SEGREGATION OF MONEYS; NO INTEREST. Subject to Section
5.1, moneys received by the Eligible Lender Trustee hereunder need not be
segregated in any manner except to the extent required by law or the
Administration Agreement and may be deposited under such general conditions as
may be prescribed by law, and the Eligible Lender Trustee shall not be liable
for any interest thereon.
SECTION 5.4 ACCOUNTING AND REPORTS TO THE NOTEHOLDERS,
CERTIFICATEHOLDERS, THE INTERNAL REVENUE SERVICE AND OTHERS. The Eligible Lender
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
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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(c) with respect to income or distributions to
Certificateholders. The Eligible Lender Trustee shall elect under Section 1278
of the Code to include in income currently any market discount that accrues with
respect to the Trust Student Loans. The Eligible Lender Trustee shall not make
the election provided under Section 754 of the Code. The Eligible Lender Trustee
shall be entitled to hire an independent accounting firm to perform the
functions described in this Section 5.4 the reasonable fees and expenses of
which shall be paid by the Depositor.
SECTION 5.5 SIGNATURE ON RETURNS; TAX MATTERS PARTNER.
(a) The Eligible Lender Trustee shall sign on behalf of the Trust
the tax returns of the Trust, unless applicable law requires a
Certificateholder to sign such documents, in which case such
documents shall be signed by the Depositor.
(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) 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 gross income (and any Liquidating Profits) and any items in
the nature of income or gain which are specially allocated to
such Certificateholder pursuant to Section 2.10(b) 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, any amount released or otherwise
distributed
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to the Depositor from the Reserve Account under Sections
2.8C(G) and 2.8D of the Administration Agreement) and such
Certificateholder's distributive share of Losses and
deductions (and any Liquidating Loss), including any special
allocation pursuant to Section 2.10(b).
(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 the Trust Student 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.
ARTICLE VI
AUTHORITY AND DUTIES OF ELIGIBLE LENDER TRUSTEE
SECTION 6.1 GENERAL AUTHORITY. The Eligible Lender 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 Eligible Lender Trustee's execution thereof, and, on behalf
of the Trust, to direct the Indenture Trustee to authenticate and deliver Notes
in the aggregate principal amount of $1,976,950,000. The Eligible Lender Trustee
is also authorized and directed on behalf of the Trust (i) to acquire and hold
legal title to the Trust Student Loans from the Depositor and (ii) to take all
actions required pursuant to Section 3.2C of the Administration Agreement and
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otherwise follow the direction of and cooperate with the Servicer in submitting,
pursuing and collecting any claims to and with the Department with respect to
any Interest Subsidy Payments and Special Allowance Payments relating to the
Trust Student Loans.
In addition to the foregoing, the Eligible Lender Trustee is authorized
to take all actions required of the Trust pursuant to the Basic Documents. The
Eligible Lender Trustee is further authorized from time to time to take such
action as the Administrator directs or instructs with respect to the Basic
Documents and is directed to take such action to the extent that the
Administrator is expressly required pursuant to the Basic Documents to cause the
Eligible Lender Trustee to act.
SECTION 6.2 GENERAL DUTIES. It shall be the duty of the Eligible Lender
Trustee to discharge (or cause to be discharged) all its responsibilities
pursuant to the terms of this Agreement, the other Basic Documents to which the
Trust is a party and to administer the Trust in the interest of the
Certificateholders, subject to and in accordance with the provisions of this
Agreement, the other Basic Documents. Without limiting the foregoing, the
Eligible Lender Trustee shall on behalf of the Trust file and prove 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 a receivership
proceeding involving the Depositor. Notwithstanding the foregoing, the Eligible
Lender 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 and act or
to discharge any duty of the Eligible Lender Trustee hereunder or under any
other Basic Document, and the Eligible Lender 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 the Basic
Documents, the Eligible Lender Trustee shall have no obligation to administer,
service or collect the Trust Student Loans or to maintain, monitor or otherwise
supervise the administration, servicing or collection of the Trust Student
Loans.
SECTION 6.3 ACTION UPON INSTRUCTION.
(a) [Reserved]
(b) The Eligible Lender Trustee shall not be required to take any
action hereunder or under any other Basic Document if the
Eligible Lender Trustee shall have reasonably determined, or
shall have been advised by counsel, that such action is likely
to result in
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liability on the part of the Eligible Lender Trustee or is
contrary to the terms hereof, any other Basic Document or is
otherwise contrary to law.
(c) Whenever the Eligible Lender Trustee is unable to determine
the appropriate course of action between alternative courses
and actions permitted or required by the terms of this
Agreement or under any other Basic Document, the Eligible
Lender Trustee shall promptly give notice (in such form as
shall be appropriate under the circumstances) to the
Certificateholders requiring instruction as to the course of
action to be adopted, and to the extent the Eligible Lender
Trustee acts in good faith in accordance with any written
instruction of the Certificateholders received, the Eligible
Lender Trustee shall not be liable on account of such action
to any Person. If the Eligible Lender Trustee shall not have
received appropriate instruction within 10 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) it may, but shall be under no duty to, take or
refrain from taking such action, not inconsistent with this
Agreement, 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) In the event that the Eligible Lender Trustee is unsure as to
the application of any provision of this Agreement, any other
Basic Document or any such provision is ambiguous as to its
application, or is, or appears to be, in conflict with any
other applicable provision, or in the event that this
Agreement permits any determination by the Eligible Lender
Trustee or is silent or is incomplete as to the course of
action that the Eligible Lender Trustee is required to take
with respect to a particular set of facts, the Eligible Lender
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 Eligible Lender
Trustee acts or refrains from acting in good faith in
accordance with any such instruction received, the Eligible
Lender Trustee shall not be liable, on account of such action
or inaction, to any Person. If the Eligible Lender Trustee
shall not have received appropriate instruction within 10 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) it may, but shall be under no duty
to, take or refrain
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from taking such action, not inconsistent with this Agreement
or the other Basic Documents, as it shall deem to be in the
best interest 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 Eligible Lender 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 Eligible Lender Trustee is a party, except as
expressly provided by the terms of this Agreement or in any document or written
instruction received by the Eligible Lender Trustee pursuant to Section 6.3; and
no implied duties or obligations shall be read into this Agreement or any other
Basic Document against the Eligible Lender Trustee. The Eligible Lender 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 Eligible Lender 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, Chase Manhattan Bank Delaware in its
individual capacity or as the Eligible Lender 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 Eligible Lender Trustee shall not otherwise deal with any part of the Trust
Estate except (i) in accordance with the powers granted to and the authority
conferred upon the Eligible Lender Trustee pursuant to this Agreement, (ii) in
accordance with the other Basic Documents to which it is a party and (iii) in
accordance with any document or instruction delivered to the Eligible Lender
Trustee pursuant to Section 6.3.
SECTION 6.6 RESTRICTIONS. The Eligible Lender Trustee shall not take
any action (a) that is inconsistent with the purposes of the Trust set forth in
Section 2.3 or (b) that, to the actual knowledge of the Eligible Lender Trustee,
would result in the Trust's becoming taxable as a corporation for Federal income
tax purposes. The Certificateholders shall not direct the Eligible Lender
Trustee to take action that would violate the provisions of this Section.
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ARTICLE VII
CONCERNING THE ELIGIBLE LENDER TRUSTEE
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SECTION 7.1 ACCEPTANCE OF TRUSTS AND DUTIES. The Eligible Lender
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.
The Eligible Lender Trustee also agrees to disburse all moneys actually received
by it constituting part of the Trust Estate upon the terms of this Agreement and
the other Basic Documents. The Eligible Lender 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 negligence or (ii)
in the case of the inaccuracy of any representation or warranty contained in
Section 7.3 expressly made by the Eligible Lender Trustee. In particular, but
not by way of limitation (and subject to the exceptions set forth in the
preceding sentence):
(a) the Eligible Lender Trustee shall not be liable for any error
of judgment made by a responsible officer of the Eligible
Lender Trustee;
(b) the Eligible Lender 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 or any
Certificateholder;
(c) no provision of this Agreement or any other Basic Document
shall require the Eligible Lender 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 Eligible Lender 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 Eligible Lender Trustee be
liable for indebtedness evidenced by or arising under any of
the Basic Documents, including the principal of and interest
on the Notes;
(e) the Eligible Lender 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
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Estate or for or in respect of the validity or sufficiency of
the Basic Documents, other than the certificate of
authentication on the Trust Certificates, and the Eligible
Lender 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 Eligible Lender Trustee shall not be liable for the action
or inaction, default or misconduct of the Administrator, the
Depositor, the Indenture Trustee, the Servicer or Swap
Counterparty under any of the other Basic Documents or
otherwise and the Eligible Lender 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, the Servicer under the Servicing Agreement or the
Swap Counterparty under the Swap Agreements; and
(g) the Eligible Lender 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, any other Basic Document, at the request, order or
direction of any of the Certificateholders, unless such
Certificateholders have offered to the Eligible Lender Trustee
security or indemnity satisfactory to it against the costs,
expenses and liabilities that may be incurred by the Eligible
Lender Trustee therein or thereby. The right of the Eligible
Lender Trustee to perform any discretionary act enumerated in
this Agreement, in any other Basic Document shall not be
construed as a duty, and the Eligible Lender 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 Eligible Lender 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
Eligible Lender Trustee under the Basic Documents. On each Distribution Date,
the Eligible Lender Trustee shall provide to each Certificateholder of record as
of the related Record Date the
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information provided by the Administrator to the Eligible Lender Trustee on the
related Determination Date pursuant to Section 2.9 of the Administration
Agreement.
SECTION 7.3 REPRESENTATIONS AND WARRANTIES. The Eligible Lender Trustee
hereby represents and warrants to the Depositor, for the benefit of the
Certificateholders, that:
(a) It is duly organized and validly existing in good standing
under the laws of its governing jurisdiction and has an office
located within the State of Delaware. 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.
(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 contravene any Federal or Delaware
state law, governmental rule or regulation governing the
banking or trust powers of the Eligible Lender 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.
(d) It is and will maintain its status as an "eligible lender" (as
such term is defined in Section 435(d) of the Higher Education
Act) for purposes of holding legal title to the Trust Student
Loans as contemplated by this Agreement and the other Basic
Documents, it has a lender identification number with respect
to the Trust Student Loans from the Department and has and
will maintain in effect a Guarantee Agreement with each of the
Guarantors with respect to the Trust Student Loans.
SECTION 7.4 RELIANCE; ADVICE OF COUNSEL.
(a) The Eligible Lender 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
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paper believed by it to be genuine and believed by it to be
signed by the proper party or parties. The Eligible Lender
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 Eligible Lender 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 Eligible
Lender 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 Eligible Lender
Trustee (i) may act directly or through its agents or
attorneys pursuant to agreements entered into with any of them
and the Eligible Lender 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 Eligible
Lender Trustee with reasonable care, and (ii) may consult with
counsel and accountants to be selected with reasonable care
and employed by it. The Eligible Lender Trustee shall not be
liable for anything done, suffered or omitted in good faith by
it in accordance with the written opinion or advice of any
such counsel or accountants and not contrary to this
Agreement, any other Basic Document.
SECTION 7.5 NOT ACTING IN INDIVIDUAL CAPACITY. Except as provided in
this Article VII, in accepting the trusts hereby created Chase Manhattan Bank
Delaware acts solely as Eligible Lender Trustee hereunder and not in its
individual capacity and all Persons having any claim against the Eligible Lender
Trustee by reason of the transactions contemplated by this Agreement, any other
Basic Document shall look only to the Trust Estate for payment or satisfaction
thereof.
SECTION 7.6 ELIGIBLE LENDER TRUSTEE NOT LIABLE FOR TRUST CERTIFICATES
OR TRUST STUDENT LOANS. The recitals contained herein and in the Trust
Certificates (other than the signature of and authentication by the Eligible
Lender Trustee on the Trust Certificates) shall be taken as the statements of
the Depositor
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and the Eligible Lender Trustee assumes no responsibility for the correctness
thereof. The Eligible Lender Trustee makes no representations as to the validity
or sufficiency of this Agreement, the Trust Certificates or any other Basic
Document (other than the signature of and authentication by the Eligible Lender
Trustee on the Trust Certificates), or the Notes, or of any Trust Student Loan
or related documents. The Eligible Lender Trustee shall at no time have any
responsibility (or liability except for willfully or negligently terminating or
allowing to be terminated any of the Guarantee Agreements, in a case where the
Eligible Lender Trustee knows of any facts or circumstances which will or could
reasonably be expected to result in any such termination) for or with respect to
the legality, validity, enforceability and eligibility for Guarantee Payments,
federal reinsurance, Interest Subsidy Payments or Special Allowance Payments, as
applicable, in respect of any Trust Student Loan, or 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 the existence and contents of any computer or other
record of any Trust Student Loan; the validity of the assignment of any Trust
Student Loan to the Eligible Lender Trustee on behalf of the Trust; the
completeness of any Trust Student Loan; the performance or enforcement (except
as expressly set forth in any Basic Document) of any Trust Student Loan; the
compliance by the Depositor or the Servicer with any warranty or representation
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 Administrator,
the Indenture Trustee or the Servicer or any subservicer taken in the name of
the Eligible Lender Trustee.
SECTION 7.7 ELIGIBLE LENDER TRUSTEE MAY OWN TRUST CERTIFICATES AND
NOTES. The Eligible Lender Trustee in its individual or any other capacity may
become the owner or pledgee of Trust Certificates or Notes and may deal with the
Depositor, the Administrator, the Indenture Trustee, the Servicer or the Swap
Counterparties in banking transactions with the same rights as it would have if
it were not Eligible Lender Trustee.
ARTICLE VIII
COMPENSATION AND INDEMNITY OF ELIGIBLE LENDER TRUSTEE
SECTION 8.1 ELIGIBLE LENDER TRUSTEE'S FEES AND EXPENSES. The Eligible
Lender Trustee shall receive as compensation for its services hereunder such
fees as have been separately agreed upon before the date hereof between the
Depositor and the Eligible Lender Trustee, and the Eligible Lender Trustee shall
be entitled
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to be reimbursed by the Depositor, to the extent provided in such separate
agreement, for its other reasonable expenses (including the reasonable fees and
expenses of counsel and independent accountants) hereunder.
SECTION 8.2 PAYMENTS TO THE ELIGIBLE LENDER TRUSTEE. Any amounts paid
to the Eligible Lender Trustee pursuant to Section 8.1 hereof or pursuant to
Section 9 of the Sale Agreement, Section 4.2 of the Administration Agreement or
Section 4.2 of the Servicing Agreement shall be deemed not to be a part of the
Trust Estate immediately after such payment.
SECTION 8.3 INDEMNITY. The Depositor shall cause the Administrator to
indemnify the Eligible Lender Trustee in its individual capacity and any of its
officer, directors, employees and agents as and to the extent provided for in
Section 4.2 of the Administration Agreement.
ARTICLE IX
TERMINATION OF TRUST AGREEMENT
SECTION 9.1 TERMINATION OF TRUST AGREEMENT.
(a) This Agreement (other than Article VIII) and the Trust shall
terminate and be of no further force or effect upon the
earlier of (i) the final distribution by the Eligible Lender
Trustee of all moneys or other property or proceeds of the
Trust Estate in accordance with the terms of the Indenture,
the Administration Agreement and Article V, and (ii) 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
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 Trust Certificates to the
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Certificate Paying Agent for payment of the final distribution
and cancellation, shall be given promptly by the Eligible
Lender Trustee by letter to Certificateholders mailed within
five Business Days of receipt of notice of such termination
from the Administrator given pursuant to Section 6.1C of the
Administration Agreement, stating (i) the Distribution Date
upon which final payment of the Trust Certificates shall be
made upon presentation and surrender of the Trust 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 Trust Certificates at
the office of the Certificate Paying Agent therein specified.
The Eligible Lender Trustee shall give such notice to the
Certificate Registrar (if other than the Eligible Lender
Trustee) and the Certificate Paying Agent at the time such
notice is given to Certificateholders. Upon presentation and
surrender of the Trust Certificates, the Certificate Paying
Agent shall cause to be distributed to Certificateholders
amounts distributable on such Distribution Date pursuant to
Section 5.1.
In the event that all the Certificateholders shall not surrender their
Trust Certificates for cancellation within six months after the date specified
in the above mentioned written notice, the Eligible Lender Trustee shall give a
second written notice to the remaining Certificateholders to surrender their
Trust Certificates for cancellation and receive the final distribution with
respect thereto. If within one year after the second notice all the Trust
Certificates shall not have been surrendered for cancellation, the Eligible
Lender Trustee may take appropriate steps, or may appoint an agent to take
appropriate steps, to contact the remaining Certificateholders concerning
surrender of their Trust 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 Eligible
Lender Trustee to the Depositor.
Upon final distribution of any funds remaining in the Trust, the
Eligible Lender Trustee shall file a certificate of cancellation of the Trust's
certificate of trust pursuant to Section 3810(c) of the Delaware Business Trust
Act.
SECTION 9.2 DISSOLUTION UPON INSOLVENCY OF THE DEPOSITOR.
Notwithstanding the provisions of Section 3808 of the Delaware
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Business Trust Act, in the event that an Insolvency Event shall occur with
respect to the Depositor, (x) the Trust created hereunder shall dissolve and (y)
this Agreement shall be terminated in accordance with Section 9.1 90 days after
the date of such Insolvency Event. Promptly after the occurrence of any
Insolvency Event with respect to the Depositor, (i) the Depositor shall give the
Indenture Trustee, the Eligible Lender Trustee, any Swap Counterparty, and each
Rating Agency written notice of such Insolvency Event, and (ii) the Eligible
Lender 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 and of the effect of such
event under this Section 9.2; 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, the Eligible Lender
Trustee shall direct the Indenture Trustee promptly to sell the assets of the
Trust (other than the Trust 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 treated as collections under the Administration Agreement.
ARTICLE X
SUCCESSOR ELIGIBLE LENDER TRUSTEES AND
ADDITIONAL ELIGIBLE LENDER TRUSTEES
SECTION 10.1 ELIGIBILITY REQUIREMENTS FOR ELIGIBLE LENDER TRUSTEE. The
Eligible Lender Trustee shall at all times be a corporation or association (i)
qualifying as an "eligible lender" as such term is defined in Section 435(d) of
the Higher Education Act for purposes of holding legal title to the Trust
Student Loans on behalf of the Trust, with a valid lender identification number
with respect to the Trust Student Loans from the Department; (ii) being
authorized to exercise corporate trust powers and hold legal title to the Trust
Student Loans; (iii) having in effect Guarantee Agreements with each of the
Guarantors; (iv) having a combined capital and surplus of at least $50,000,000
and being subject to supervision or examination by Federal or state authorities;
(v) having its principal place of business in the State of Delaware and
otherwise complying with Section 3807 of the Delaware Business Trust Act; and
(vi) having (or having a parent which has) a rating in respect of its long-term
senior unsecured debt of at least BBB- (or the equivalent) by each of the Rating
Agencies (or which, if the long-term senior unsecured debt of such corporation
or association is not rated by any Rating Agency, shall have provided to the
Indenture Trustee
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written confirmation from such Rating Agency that the appointment of such
corporation or association to serve as Eligible Lender Trustee will not result
in and of itself in a reduction or withdrawal of the then current rating of any
of the Notes or the Certificates). If the Eligible Lender Trustee shall publish
reports of condition at least annually, pursuant to law or to the requirements
of the aforesaid supervising or examining authority, then for the purpose of
this Section, the combined capital and surplus of the Eligible Lender 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 Eligible Lender
Trustee shall cease to be eligible in accordance with the provisions of this
Section, the Eligible Lender Trustee shall resign immediately in the manner and
with the effect specified in Section 10.2.
SECTION 10.2 RESIGNATION OR REMOVAL OF ELIGIBLE LENDER TRUSTEE. The
Eligible Lender Trustee may at any time resign and be discharged from the trusts
hereby created by giving written notice thereof to the Administrator. Upon
receiving such notice of resignation, the Administrator shall promptly appoint a
successor Eligible Lender 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 Eligible Lender Trustee and one copy to the
successor Eligible Lender Trustee. If no successor Eligible Lender Trustee shall
have been so appointed and have accepted appointment within 30 days after the
giving of such notice of resignation, the resigning Eligible Lender Trustee may
petition any court of competent jurisdiction for the appointment of a successor
Eligible Lender 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 Eligible Lender Trustee 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 Eligible Lender Trustee shall cease to be or shall
be likely to cease to be eligible in accordance with the provisions of Section
10.1 and shall fail to resign after written request therefor by the
Administrator, or if at any time an Insolvency Event with respect to the
Eligible Lender Trustee shall have occurred and be continuing, then the
Administrator may remove the Eligible Lender Trustee. If the Administrator shall
remove the Eligible Lender Trustee under the authority of the immediately
preceding sentence, the Administrator shall promptly appoint a successor
Eligible Lender Trustee by written instrument, in duplicate, one copy of
which instrument shall be delivered to the outgoing Eligible Lender Trustee
so removed and
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one copy to the successor Eligible Lender Trustee and payment of all fees
owed to the outgoing Eligible Lender Trustee.
Any resignation or removal of the Eligible Lender Trustee and
appointment of a successor Eligible Lender Trustee pursuant to any of the
provisions of this Section shall not become effective until acceptance of
appointment by the successor Eligible Lender Trustee pursuant to Section 10.3,
payment of all fees and expenses owed to the outgoing Eligible Lender Trustee
and the filing of a certificate of amendment to the Trust's certificate of trust
pursuant to Section 3810(b) of the Delaware Business Trust Act. The
Administrator shall provide notice of such resignation or removal of the
Eligible Lender Trustee and to each of the Rating Agencies.
SECTION 10.3 SUCCESSOR ELIGIBLE LENDER TRUSTEE. Any successor Eligible
Lender Trustee appointed pursuant to Section 10.2 shall execute, acknowledge and
deliver to the Administrator and to its predecessor Eligible Lender Trustee an
instrument accepting such appointment under this Agreement, and thereupon the
resignation or removal of the predecessor Eligible Lender Trustee shall become
effective and such successor Eligible Lender 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 Eligible Lender Trustee. The predecessor Eligible
Lender Trustee shall upon payment of its fees and expenses deliver to the
successor Eligible Lender Trustee all documents, statements, moneys and
properties held by it under this Agreement and shall assign, if permissible, to
the successor Eligible Lender Trustee the lender identification number obtained
from the Department on behalf of the Trust; and the Administrator and the
predecessor Eligible Lender Trustee shall execute and deliver such instruments
and do such other things as may reasonably be required for fully and certainly
vesting and confirming in the successor Eligible Lender Trustee all such rights,
powers, duties and obligations.
No successor Eligible Lender Trustee shall accept such appointment as
provided in this Section unless at the time of such acceptance such successor
Eligible Lender Trustee shall be eligible pursuant to Section 10.1.
Upon acceptance of appointment by a successor Eligible Lender Trustee
pursuant to this Section, the Administrator shall mail notice of the successor
of such Eligible Lender Trustee to all Certificateholders, the Indenture
Trustee, the Noteholders, the Rating Agencies and the Swap Counterparties. If
the Administrator shall fail to mail such notice within 10 days after acceptance
of appointment by the successor Eligible Lender
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Trustee, the successor Eligible Lender Trustee shall cause such notice to be
mailed at the expense of the Administrator.
SECTION 10.4 MERGER OR CONSOLIDATION OF ELIGIBLE LENDER TRUSTEE. Any
corporation into which the Eligible Lender 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 Eligible Lender Trustee shall be a
party, or any corporation succeeding to all or substantially all the corporate
trust business of the Eligible Lender 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
Eligible Lender Trustee hereunder; PROVIDED that such corporation shall be
eligible pursuant to Section 10.1; and PROVIDED FURTHER that the Eligible Lender
Trustee shall mail notice of such merger or consolidation to the Rating Agencies
not less than 15 days prior to the effective date thereof.
SECTION 10.5 APPOINTMENT OF CO-ELIGIBLE LENDER TRUSTEE OR SEPARATE
ELIGIBLE LENDER 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
Administrator and the Eligible Lender Trustee acting jointly shall have the
power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Eligible Lender Trustee, meeting the eligibility
requirements of clauses (i) through (iii) of Section 10.1, to act as co-trustee,
jointly with the Eligible Lender 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 Administrator and the Eligible Lender Trustee may
consider necessary or desirable. If the Administrator shall not have joined in
such appointment within 15 days after the receipt by it of a request so to do,
the Eligible Lender 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 (iv), (v)
and (vi) 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.
Each separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
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(i) all rights, powers, duties, and obligations conferred or
imposed upon the Eligible Lender Trustee shall be conferred upon and
exercised or performed by the Eligible Lender 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
Eligible Lender 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 Eligible Lender 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 any such jurisdiction) shall be
exercised and performed singly by such separate trustee or co-trustee,
solely at the direction of the Eligible Lender 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 Administrator and the Eligible Lender 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 Eligible Lender
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. 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 Eligible
Lender 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 Eligible Lender Trustee. Each such instrument shall be filed
with the Eligible Lender Trustee and a copy thereof given to the Administrator.
Any separate trustee or co-trustee may at any time appoint the Eligible
Lender 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-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 Eligible Lender Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
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ARTICLE XI
MISCELLANEOUS
-------------
SECTION 11.1 SUPPLEMENTS AND AMENDMENTS. This Agreement may be amended
by the Depositor and the Eligible Lender Trustee, with prior written notice to
the Rating Agencies, without the consent of any of the Noteholders, the
Certificateholders or the Swap Counterparties, 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 modifying in any manner the rights of the Noteholders, the
Certificateholders or the Swap Counterparties; 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, Certificateholder or any Swap
Counterparty.
This Agreement may also be amended from time to time by the Depositor
and the Eligible Lender Trustee, with prior written notice to the Rating
Agencies, with the consent of (i) the Noteholders of Notes evidencing not less
than a majority of the Outstanding Amount of the Notes and (ii) 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 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 on
Trust 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
required to consent to any such amendment, without the consent of all the
outstanding Noteholders and Certificateholders.
This Agreement may also be amended from time to time by the Depositor
and the Eligible Lender Trustee, with prior written notice to the Rating
Agencies, with the consent of the affected Swap Counterparty for the purpose of
adding any provisions to, changing in any manner, or eliminating any of the
provisions of this Agreement or modifying in any manner the rights of a Swap
Counterparty if in the Opinion of Counsel such amendment materially adversely
affects the interests of such Swap Counterparty.
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Promptly after the execution of any such amendment or consent, the
Eligible Lender Trustee shall furnish written notification of the substance of
such amendment or consent to each Certificateholder, the Indenture Trustee, the
Swap Counterparties and each of the Rating Agencies.
It shall not be necessary for the consent of Certificateholders, the
Noteholders, the Indenture Trustee or any Swap Counterparty 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 Eligible Lender Trustee may
prescribe.
Prior to the execution of any amendment to this Agreement, the Eligible
Lender 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 Eligible Lender Trustee may, but shall not be obligated to, enter
into any such amendment which affects the Eligible Lender Trustee's own rights,
duties or immunities under this Agreement or otherwise.
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 Eligible
Lender Trustee, the Depositor, the Certificateholders, the Administrator and, to
the extent expressly provided herein, the Indenture Trustee, the Noteholders and
the Swap Counterparties, 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
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Agreement or any covenants, conditions or provisions contained
herein.
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 Eligible Lender Trustee
shall be deemed given only upon actual receipt by the Eligible
Lender Trustee), if to the Eligible Lender Trustee, addressed
to its Corporate Trust Office; if to the Depositor, addressed
to SLM Funding Corporation, 777 Twin Creek Drive, Killeen,
Texas 76543, or, as to each party, at such other address 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 by first-class mail, postage
prepaid, at the address of such Certificateholder as shown in
the Certificate Register. Any notice so mailed 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 to the benefit of, the Depositor and its
successors, the Eligible Lender 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.
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SECTION 11.8 NO PETITION.
(a) The Depositor will not at any time institute against the Trust
any bankruptcy proceedings under any United States Federal or
state bankruptcy or similar law in connection with any
obligations relating to the Trust Certificates, the Notes,
this Agreement or any of the other Basic Documents.
(b) The Eligible Lender Trustee (not in its individual capacity
but solely as Eligible Lender Trustee), by entering into this
Agreement, each Certificateholder, by accepting a Trust
Certificate, and the Indenture Trustee and each Noteholder by
accepting the benefits of this Agreement, 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 United States
Federal or state bankruptcy or similar law in connection with
any obligations relating to the Trust Certificates, the Notes,
this Agreement or any of the other Basic Documents.
SECTION 11.9 NO RECOURSE. Each Certificateholder by accepting a Trust
Certificate acknowledges that such Certificateholder's Trust Certificates
represent beneficial interests in the Trust only and do not represent interests
in or obligations of the Depositor, the Servicer, the Administrator, the
Eligible Lender Trustee, the Indenture Trustee, any Swap Counterparty 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 or contemplated in this Agreement, the Trust 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 governed by and
construed in accordance with the laws of the State of Delaware, 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.
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IN WITNESS WHEREOF, the parties hereto have caused this Amended and
Restated Trust Agreement to be duly executed by their respective officers
hereunto duly authorized, as of the day and year first above written.
CHASE MANHATTAN BANK DELAWARE,
not in its individual capacity
but solely as Eligible Lender
Trustee,
By /S/ JOHN J. CASHIN
---------------------
Name: John J. Cashin
Title: Vice President
SLM FUNDING CORPORATION,
Depositor,
By /S/ J. LANCE FRANKE
----------------------
Name: J. Lance Franke
Title: Chief Financial Officer
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EXHIBIT A
TO THE TRUST AGREEMENT
[FORM OF TRUST CERTIFICATE]
[SEE REVERSE FOR CERTAIN DEFINITIONS]
Unless this Trust 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 TRUST 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.
NUMBER $71,710,000
R-1 CUSIP NO. 78442 GBW 5
SLM STUDENT LOAN TRUST 2000-1
FLOATING RATE STUDENT LOAN-BACKED CERTIFICATE
evidencing a fractional undivided interest in the Trust, as defined
below, the property of which includes a pool of student loans sold to
the Trust by SLM Funding Corporation.
(This Trust Certificate does not represent an interest in or obligation
of SLM Funding Corporation, the Servicer (as defined below), the
Eligible Lender Trustee (as defined below) or any of their respective
affiliates, except to the extent described below.)
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THIS CERTIFIES THAT Cede & Co. is the registered owner of $71,710,000
dollars non-assessable, fully-paid, fractional undivided interest in the SLM
Student Loan Trust 2000-1 (the "Trust"), a trust formed under the laws of the
State of Delaware by SLM Funding Corporation, a Delaware corporation (the
"Depositor"). The Trust was created pursuant to an Amended and Restated Trust
Agreement dated as of February 1, 2000 (the "Trust Agreement"), between the
Depositor and Chase Manhattan Bank Delaware, a Delaware banking corporation, not
in its individual capacity but solely as eligible lender trustee on behalf of
the Trust (the "Eligible Lender 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
Appendix A to the Trust Agreement.
This Certificate is one of the duly authorized Certificates designated
as "Floating Rate Student LoanBacked Certificates" (herein called the "Trust
Certificates"). This Trust Certificate is issued under and is subject to the
terms, provisions and conditions of the Trust Agreement, to which Trust
Agreement the holder of this Trust 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 "Trust Student Loans"), all moneys paid
thereunder on or after January 17, 2000, certain bank accounts and the proceeds
thereof and certain other rights under the Trust Agreement, the Sale Agreement,
the Purchase Agreement, the Administration Agreement and the Servicing Agreement
and all proceeds of the foregoing. The rights of the holders of the Trust
Certificates to the assets of the Trust are subordinated to the rights of the
holders of the Notes issued under the Indenture dated as of February 1, 2000,
between the Trust and Bankers Trust Company, as Indenture Trustee, and
designated as "Floating Rate Student Loan-Backed Notes" (the "Notes"), as set
forth in the Trust Agreement, the Indenture and the Administration Agreement.
Under the Trust Agreement, to the extent of funds available therefor,
return on the Certificate Balance of this Trust Certificate at the Certificate
Rate (as defined below) will be distributed on the 25th day of
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each January, April, July and October (or, if such 25th day is not a Business
Day, the next succeeding Business Day) (each a "Distribution Date"), commencing
on July 25, 2000, to the person in whose name this Trust Certificate is
registered as of the close of business on the day immediately preceding the
Distribution Date (such day the "Record Date"), in each case to the extent of
such Certificateholder's pro rata interest in the amount or amounts to be
distributed to Certificateholders on such Distribution Date pursuant to the
Administration Agreement.
The Certificate Rate for each Accrual Period shall be equal to
Three-Month LIBOR, except for the first Accrual Period, which shall be
Five-Month LIBOR, on the second business day before the beginning of that
Accrual Period plus 0.45% per annum.
Each holder of this Trust Certificate acknowledges and agrees that its
rights to receive distributions in respect of this Trust Certificate from
Available Funds and amounts on deposit in the Reserve Account are subordinated
to the rights of the Noteholders as described in the Trust Agreement, the
Indenture and the Administration Agreement.
It is the intent of the Depositor, the Certificateholders and the
Certificate Owners that, for purposes of Federal, state and local income and
franchise and any other income taxes, the Trust will be treated as a partnership
and the Certificateholders (including the Depositor in its capacity as
Certificateholder and as recipient of distributions from the Reserve Account)
will be treated as partners in that partnership. The Depositor and the other
Certificateholders by acceptance of a Trust Certificate (and the Certificate
Owners by acceptance of a beneficial interest in a Trust Certificate), agree to
treat, and to take no action inconsistent with the treatment of, the Trust
Certificates for such tax purposes as partnership interests in the Trust.
Each Certificateholder or Certificate Owner, by its acceptance of a
Trust Certificate or, in the case of a Certificate Owner, a beneficial interest
in a Trust Certificate, covenants and agrees that such
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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 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 Trust Certificates, the Notes, the Trust
Agreement or any of the other Basic Documents.
Distributions on this Trust Certificate will be made as provided in the
Trust Agreement by the Eligible Lender Trustee by wire transfer or by check
mailed to the Certificateholder of record in the Certificate Register without
the presentation or surrender of this Trust Certificate or the making of any
notation hereon, except that with respect to Trust Certificates registered on
the Record Date in the name of the nominee of the Clearing Agency, unless
Definitive Certificates have been issued (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
Trust Certificate will be made after due notice by the Eligible Lender Trustee
of the pendency of such distribution and only upon presentation and surrender of
this Trust Certificate at the office or agency maintained for the purpose by the
Eligible Lender Trustee in the Borough of Manhattan, The City of New York.
Reference is hereby made to the further provisions of this Trust
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 officer of the Eligible Lender Trustee or its
authenticating agent, by manual signature, this Trust Certificate shall not
entitle the holder hereof to any benefit under the Trust Agreement or the
Administration Agreement or be valid for any purpose.
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IN WITNESS WHEREOF, the Eligible Lender Trustee on behalf of
the Trust and not in its individual capacity has caused this Trust Certificate
to be duly executed as of the date set forth below.
SLM STUDENT LOAN TRUST 2000-1
by CHASE MANHATTAN BANK DELAWARE,
not in its individual capacity but
solely as Eligible Lender Trustee.
By:
------------------------------
Authorized Signatory
Date: February 15, 2000
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TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Trust Certificates referred to in the within-mentioned Trust
Agreement.
CHASE MANHATTAN BANK DELAWARE, not
in its individual capacity but
solely as Eligible Lender Trustee,
By:
----------------------------
Authorized Signatory
OR
THE CHASE MANHATTAN BANK, solely in
its capacity as Authenticating Agent
for the Eligible Lender Trustee,
By:
----------------------------
Authenticating Agent
Date: February 15, 2000
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<PAGE>
[REVERSE OF TRUST CERTIFICATE]
The Trust Certificates do not represent an obligation of, or an
interest in, the Depositor, Sallie Mae Servicing Corporation, as servicer (the
"Servicer"), Student Loan Marketing Association, as administrator (the
"Administrator"), the Eligible Lender Trustee 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 or contemplated herein, in the Trust Agreement or in the
other Basic Documents. In addition, this Trust Certificate is not guaranteed by
any governmental agency or instrumentality and is limited in right of payment to
certain collections with respect to the Trust Student Loans, all as more
specifically set forth in the Trust Agreement. A copy of each of the Trust
Agreement, the Sale Agreement, the Purchase Agreement, the Administration
Agreement, Servicing Agreement and the Indenture 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 options therein provided, the
amendment thereof and the certification 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 Eligible Lender Trustee with the consent of
the holders of the Notes and the Trust 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 Trust
Certificate shall be conclusive and binding on such holder and on all future
holders of this Certificate and of any Trust 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 Trust Certificate. The Trust Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the holders of any of the Trust Certificates.
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<PAGE>
As provided in the Trust Agreement and subject to certain limitations
therein set forth, the transfer of the Trust Certificates is registerable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies maintained by Chase Manhattan Bank Delaware
in its capacity as Certificate Registrar, or by any successor Certificate
Registrar, in the Borough of Manhattan, The City of New York, accompanied by a
written instrument of transfer in form satisfactory to the Eligible Lender
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
Trust Certificates of authorized denominations evidencing the same aggregate
interest in the Trust will be issued to the designated transferee.
The Trust Certificates are issuable only as registered Trust
Certificates without coupons in denominations of $100,000 or in integral
multiples of $1,000 in excess thereof. As provided in the Trust Agreement and
subject to certain limitations therein set forth, Trust Certificates are
exchangeable for new Trust 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 Eligible Lender Trustee or the Certificate Registrar may
require payment of a sum sufficient to cover any tax or governmental charge
payable in connection therewith.
The Eligible Lender Trustee, the Certificate Registrar and any agent of
the Eligible Lender Trustee or the Certificate Registrar may treat the person in
whose name this Trust Certificate is registered as the owner hereof for all
purposes, and none of the Eligible Lender Trustee or the Certificate Registrar
or any such agent shall be affected by any notice to the contrary.
The Trust Certificates (including any beneficial interests therein) may
not be acquired by or for the account of (i) an employee benefit plan (as
defined in Section 3(3) of ERISA) that is subject to the provisions of Title I
of ERISA, (ii) a plan described in section 4975(e)(1) of the Internal Revenue
Code of 1986, as amended (the "Code"), including an individual retirement
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<PAGE>
account described in Section 408(a) of the Code or a Keogh plan or (iii) any
entity whose underlying assets include plan assets by reason of a plan's
investment in the entity (each, a "Benefit Plan"). By accepting and holding this
Trust Certificate, the Holder hereof shall be deemed to have represented and
warranted that it is not a Benefit Plan, it is not purchasing this Trust
Certificate on behalf of a Benefit Plan, is not using assets of a Benefit Plan
to purchase this Trust Certificate and to have agreed that if this Trust
Certificate is deemed to be a plan asset, the Holder will promptly dispose of
this Trust Certificate.
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
Administration Agreement and the Indenture and the disposition of all property
held as part of the Trust. The Depositor may at its option purchase the corpus
of the Trust at a price specified in the Administration Agreement, and such
purchase of the Trust Student Loans and other property of the Trust will effect
early retirement of the Trust Certificates; however, such right of purchase is
exercisable only on any Distribution Date on or after the date on which the Pool
Balance is less than or equal to 10% of the Initial Pool Balance. Any Trust
Student Loans remaining in the Trust as of the end of the Collection Period
immediately preceding the Trust Auction Date will be offered for sale by the
Indenture Trustee by auction in accordance with the procedure described in the
Indenture.
This Trust Certificate shall be construed in accordance with the laws
of the State of Delaware, 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.
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ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
- -------------------------------------------------------------------------------
(Please print or type name and address, including postal zip code, of assignee)
- -------------------------------------------------------------------------------
the within Trust Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
- -----------------------------------------------------------------------Attorney
to transfer said Trust 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 Trust 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.
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EXHIBIT B
TO THE TRUST AGREEMENT
FORM OF CERTIFICATE DEPOSITORY AGREEMENT
----------------------------------------
<PAGE>
ANNEX 1
TO THE AMENDED AND RESTATED TRUST AGREEMENT
DATED AS OF February 1, 2000
BETWEEN SLM FUNDING CORPORATION,
AS DEPOSITOR, AND
CHASE MANHATTAN BANK DELAWARE,
AS ELIGIBLE LENDER TRUSTEE
All defined terms are used herein as defined in the Trust Agreement
referred to above.
EXISTENCE. The Depositor will maintain its corporate existence and its
good standing under the laws of the State of Delaware.
PROCEDURES OBSERVED. The Depositor will observe all corporate
procedures required by its Certificate of Incorporation, its by-laws and the
corporation law of the State of Delaware.
MANAGEMENT. The business and affairs of the Depositor will be managed
by or under the direction of the Depositor's Board of Directors. The Depositor
will at all times ensure that its Board of Directors duly authorizes all
corporate actions requiring Board authorization. When necessary, the Depositor
will obtain proper authorization from its stockholder for corporate action. Its
stockholder will not be actively involved in the day-to-day management of the
Depositor except as contemplated by an arm's length management services
contract.
RECORDS. The Depositor will maintain separate corporate records and
books of account from those of its stockholder or any other affiliate of its
stockholder. The Depositor will keep correct and complete books and records of
account and minutes of the meetings and other proceedings of its stockholder and
Board of Directors. The resolutions, agreements and other instruments underlying
the transactions contemplated by the Trust Agreement will be continuously
maintained as official records by the Depositor.
OFFICES. The Depositor will have an address and telephone number
distinguishable from those of its stockholder. To the extent the Depositor's
office is located in the office of its stockholder or any affiliate of its
stockholder, the Depositor will pay fair market rent for any such office space
and a fair share of any material overhead costs.
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IDENTIFIABLE ASSETS. Except in connection with the customary operation
of such cash management system as its stockholder may from time to time in the
ordinary course of business implement for itself and its consolidated
subsidiaries (which cash management system will be operated such that all
transfers of funds are properly documented and the respective assets and
liabilities of the Depositor and its stockholder are ascertainable at all
times), the Depositor's funds and other assets will be identifiable and will not
be commingled with those of its stockholder or any other entity. The Depositor
will maintain separate banking records and books of account from those of its
stockholder or any other affiliate of its stockholder.
CAPITALIZATION. The Depositor will not engage in any business for which
its capitalization would not be adequate.
EXPENSES. The Depositor will pay from its own funds and assets all
obligations and indebtedness incurred by it and will provide for its own
material operating expenses and liabilities from its own funds. General overhead
and administrative expenses of its stockholder will not be charged or otherwise
allocated to the Depositor (unless directly attributable to services provided to
or for the account of the Depositor) and such expenses of the Depositor which
are material will not be charged or otherwise allocated to its stockholder. Any
organizational expenses of the Depositor and expenses relating to the
preparation, negotiation, execution and delivery of the Transaction Documents
paid by its stockholder will be charged back to the Depositor. Such expenses
will be paid by the Depositor from amounts available to it as a result of the
capital contributions made by its stockholder, from the yield earned by it on
its Certificates, or from the retained portion of Deferred Payments made to it
under the Sale Agreement.
CONDUCT. The Depositor will conduct its business solely in its own name
so as not to mislead others as to the identity of the Depositor. Without
limiting the generality of the foregoing, all oral and written communications
related to the Depositor, including without limitation letters, invoices,
purchase orders, contracts, statements and applications, will be made solely in
the name of the Depositor except for items pursuant to the Facilities and
Services Agreement between the Depositor and its stockholder. The Depositor will
utilize its own separate stationery.
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<PAGE>
INTER-COMPANY CLAIMS. The Depositor will not enter into any guarantees
made by its stockholder with respect to obligations of the Depositor and the
Depositor will make no guarantees with respect to obligations of its
stockholder. There will be no inter-company debt or claims between the Depositor
and its stockholder other than (i) the obligation of the Depositor to pay to its
stockholder the Deferred Payment under the Purchase Agreement, (ii) the demand
note of its stockholder contributed to the Depositor as part of the Depositor's
capitalization, (iii) such inter-company claims as may arise in connection with
the management services contract referred to above, including a cash management
system for its stockholder and its consolidated subsidiaries as described above,
and (iv) such amounts as may temporarily be carried in inter-company accounts
relating to expenses incurred by its stockholder or its affiliates, to the
extent the Depositor is properly obligated to reimburse its stockholder or any
such affiliate for amounts allocable to the Depositor. The demand note referred
to above will be properly documented on the books and records of the Depositor.
RELIANCE BY OTHERS. The Depositor will act solely in its name and
through its duly authorized officers or agents in the conduct of its businesses.
The Depositor will not: (a) hold itself out as having agreed to pay or become
liable for the debts of its stockholder; (b) fail to correct any known
misrepresentation with respect to the foregoing; (c) operate or purport to
operate as an integrated, single economic unit with respect to its stockholder
or in its dealings with any other affiliated or unaffiliated entity; (d) seek or
obtain credit or incur any obligation to any third party based upon the assets
of its stockholder or any other affiliated or unaffiliated entity; or (e) induce
any such third party to reasonably rely on the creditworthiness of its
stockholder or any other affiliated or unaffiliated entity for the payment or
performance of the Depositor.
ARM'S LENGTH. The Depositor will maintain an arm's length relationship
between the Depositor and its stockholder and between the Depositor and any
affiliates of its stockholder.
DISCLOSURE OF THE TRANSACTIONS. The annual financial statements of the
Depositor will disclose the effects of the Transactions in accordance with
generally accepted accounting principles. The transfer of the Loans by its
stockholder to the Depositor pursuant to the
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Purchase Agreement will be treated as a purchase by the Depositor under
generally accepted accounting principles. In particular, the financial
statements of the Depositor will clearly indicate its existence separate from
its stockholder and will reflect its separate assets and liabilities. None of
such financial statements, nor any consolidated financial statements for its
stockholder, will suggest in any way that the assets of the Depositor are
available to pay the claims of creditors of its stockholder or any other entity.
Any consolidated financial statements of its stockholder and its subsidiaries
prepared for the benefit of third parties will disclose, through appropriate
footnotes or otherwise, the separate corporate existence of the Depositor.
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Exhibit 4.3
================================================================================
INDENTURE
among
SLM STUDENT LOAN TRUST 2000-1,
as Issuer,
CHASE MANHATTAN BANK DELAWARE,
not in its individual capacity but
solely as Eligible Lender Trustee
and
BANKERS TRUST COMPANY,
not in its individual capacity but
solely as Indenture Trustee
Dated as of February 1, 2000
================================================================================
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
ARTICLE I
Definitions and Usage
<S> <C> <C>
SECTION 1.1 Definitions and Usage....................................3
SECTION 1.2 Incorporation by Reference of Trust Indenture Act........3
ARTICLE II
The Notes
SECTION 2.1 Form.....................................................4
SECTION 2.2 Execution, Authentication and Delivery...................4
SECTION 2.3 Temporary Notes..........................................5
SECTION 2.4 Registration; Registration of Transfer and Exchange......5
SECTION 2.5 Mutilated, Destroyed, Lost or Stolen Notes ..............7
SECTION 2.6 Persons Deemed Owner.....................................8
SECTION 2.7 Payment of Principal and Interest; Note Interest
Shortfall................................................8
SECTION 2.8 Cancellation.............................................9
SECTION 2.9 Release of Collateral...................................10
SECTION 2.10 Book-Entry Notes........................................10
SECTION 2.11 Notices to Clearing Agency..............................11
SECTION 2.12 Definitive Notes........................................11
ARTICLE III
Covenants
SECTION 3.1 Payment to Noteholders..................................12
SECTION 3.2 Maintenance of Office or Agency.........................12
SECTION 3.3 Money for Payments To Be Held in Trust..................13
SECTION 3.4 Existence...............................................15
</TABLE>
i
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<TABLE>
<S> <C> <C>
SECTION 3.5 Protection of Indenture Trust Estate ...................15
SECTION 3.6 Opinions as to Indenture Trust Estate...................15
SECTION 3.7 Performance of Obligations; Servicing of Trust Student
Loans...................................................16
SECTION 3.8 Negative Covenants......................................19
SECTION 3.9 Annual Statement as to Compliance.......................20
SECTION 3.10 Issuer May Consolidate, etc., Only on Certain Terms.....21
SECTION 3.11 Successor or Transferee.................................23
SECTION 3.12 No Other Business.......................................23
SECTION 3.13 No Borrowing............................................23
SECTION 3.14 Obligations of Servicer and Administrator...............23
SECTION 3.15 Guarantees, Loans, Advances and Other Liabilities.......24
SECTION 3.16 Capital Expenditures....................................24
SECTION 3.17 Restricted Payments.....................................24
SECTION 3.18 Notice of Events of Default.............................24
SECTION 3.19 Further Instruments and Acts............................25
ARTICLE IV
Satisfaction and Discharge
SECTION 4.1 Satisfaction and Discharge of Indenture.................25
SECTION 4.2 Application of Trust Money..............................26
SECTION 4.3 Repayment of Moneys Held by Paying Agent................27
SECTION 4.4 Auction of Trust Student Loans..........................27
ARTICLE IV
Remedies
SECTION 5.1 Events of Default.......................................28
SECTION 5.2 Acceleration of Maturity; Rescission and Annulment......29
SECTION 5.3 Collection of Indebtedness and Suits for Enforcement
by Indenture Trustee ..................................30
SECTION 5.4 Remedies; Priorities....................................33
SECTION 5.5 Optional Preservation of the Trust Student Loans........35
</TABLE>
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<PAGE>
<TABLE>
<S> <C> <C>
SECTION 5.6 Limitation of Suits ....................................35
SECTION 5.7 Unconditional Rights of Noteholders To Receive
Principal and Interest..................................36
SECTION 5.8 Restoration of Rights and Remedies......................37
SECTION 5.9 Rights and Remedies Cumulative..........................37
SECTION 5.10 Delay or Omission Not a Waiver..........................37
SECTION 5.11 Control by Noteholders..................................37
SECTION 5.12 Waiver of Past Defaults.................................38
SECTION 5.13 Undertaking for Costs...................................39
SECTION 5.14 Waiver of Stay or Extension Laws........................39
SECTION 5.15 Action on Notes.........................................39
SECTION 5.16 Performance and Enforcement of Certain Obligations......40
ARTICLE VI
The Indenture Trustee
SECTION 6.1 Duties of Indenture Trustee.............................41
SECTION 6.2 Rights of Indenture Trustee.............................42
SECTION 6.3 Individual Rights of Indenture Trustee..................43
SECTION 6.4 Indenture Trustee's Disclaimer..........................43
SECTION 6.5 Notice of Defaults; Seller Insolvency...................44
SECTION 6.6 Reports by Indenture Trustee to Noteholders.............44
SECTION 6.7 Compensation and Indemnity..............................45
SECTION 6.8 Replacement of Indenture Trustee........................45
SECTION 6.9 Successor Indenture Trustee by Merger...................47
SECTION 6.10 Appointment of Co-Trustee or Separate Trustee...........47
SECTION 6.11 Eligibility; Disqualification...........................49
SECTION 6.12 Preferential Collection of Claims Against Issuer........49
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
ARTICLE VII
Noteholders' Lists and Reports
<S> <C> <C>
SECTION 7.1 Issuer To Furnish Indenture Trustee Names and
Addresses of Noteholders ...............................49
SECTION 7.2 Preservation of Information; Communications to
Noteholders.............................................50
SECTION 7.3 Reports by Issuer.......................................50
ARTICLE VIII
Accounts, Disbursements and Releases
SECTION 8.1 Collection of Money.....................................52
SECTION 8.2 Trust Accounts..........................................52
SECTION 8.3 General Provisions Regarding Accounts...................53
SECTION 8.4 Release of Indenture Trust Estate.......................54
SECTION 8.5 Opinion of Counsel......................................55
ARTICLE IX
Supplemental Indentures
SECTION 9.1 Supplemental Indentures Without Consent of
Noteholders.............................................55
SECTION 9.2 Supplemental Indentures with Consent of
Noteholders.............................................57
SECTION 9.3 Execution of Supplemental Indentures....................59
SECTION 9.4 Effect of Supplemental Indenture........................59
SECTION 9.5 Conformity with Trust Indenture Act.....................59
SECTION 9.6 Reference in Notes to Supplemental Indentures...........59
ARTICLE X
Redemption of Notes
SECTION 10.1 Redemption..............................................60
SECTION 10.2 Form of Redemption Notice...............................60
SECTION 10.3 Notes Payable on Redemption Date........................61
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
ARTICLE XI
Miscellaneous
<S> <C> <C>
SECTION 11.1 Compliance Certificates and Opinions, etc...............61
SECTION 11.2 Form of Documents Delivered to Indenture Trustee........63
SECTION 11.3 Acts of Noteholders...................................64
SECTION 11.4 Notices, etc., to Indenture Trustee, Issuer and Rating
Agencies................................................65
SECTION 11.5 Notices to Noteholders; Waiver..........................66
SECTION 11.6 Alternate Payment and Notice Provisions.................67
SECTION 11.7 Conflict with Trust Indenture Act.......................67
SECTION 11.8 Effect of Headings and Table of Contents................67
SECTION 11.9 Successors and Assigns..................................67
SECTION 11.10 Separability............................................68
SECTION 11.11 Benefits of Indenture...................................68
SECTION 11.12 Legal Holidays..........................................68
SECTION 11.13 Governing Law...........................................68
SECTION 11.14 Counterparts............................................68
SECTION 11.15 Recording of Indenture..................................68
SECTION 11.16 Trust Obligations.......................................69
SECTION 11.17 No Petition.............................................69
SECTION 11.18 Inspection..............................................69
</TABLE>
v
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APPENDICES, SCHEDULES AND EXHIBITS
APPENDIX A Definitions and Usage
SCHEDULE A Schedule of Trust Student Loans
SCHEDULE B Location of Trust Student Loan Files
EXHIBIT A Form of Note
EXHIBIT B Form of Note Depository Agreement
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INDENTURE dated as of February 1, 2000, among SLM STUDENT LOAN
TRUST 2000-1, a Delaware business trust (the "Issuer"), CHASE MANHATTAN BANK
DELAWARE, a Delaware banking corporation, not in its individual capacity but
solely as trustee on behalf of the Issuer (the "Eligible Lender Trustee"), and
BANKERS TRUST COMPANY, a New York banking corporation, as trustee and not in its
individual capacity (the "Indenture Trustee")
Each party agrees as follows for the benefit of the other party
and for the equal and ratable benefit of the holders of the Issuer's Floating
Rate Student Loan-Backed Notes (the "Notes"):
GRANTING CLAUSE
The Issuer and, with respect to the Trust Student Loans, the
Eligible Lender Trustee hereby Grant to the Indenture Trustee, as trustee for
the benefit of the Noteholders, effective as of the Closing Date all of their
right, title and interest in and to the following:
(a) the Trust Student Loans, and all obligations of the Obligors
thereunder including all moneys accrued and paid thereunder on or after the
Cutoff Date and all guaranties and other rights relating to the Trust Student
Loans;
(b) the Servicing Agreement, including the right of the Issuer to cause
the Servicer to purchase Trust Student Loans from the Issuer under circumstances
described therein;
(c) the Sale Agreement, including the right of the Issuer to cause the
Seller to repurchase Trust Student Loans from the Issuer under circumstances
described therein and including the rights of the Seller under the Purchase
Agreement;
(d) the Purchase Agreement, to the extent that the rights of the Seller
thereunder have been assigned to the Issuer pursuant to the Sale Agreement,
including the right of the Seller to cause the Student Loan Marketing
Association to repurchase Trust Student Loans from the Seller under
circumstances described therein;
(e) the Administration Agreement;
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(f) the Swap Agreements;
(g) each Guarantee Agreement, including the right of the Issuer to
cause the related Guarantor to make Guarantee Payments in respect of the Trust
Student Loans;
(h) the Trust Accounts and all funds on deposit from time to time in
the Trust Accounts, including the Reserve Account Initial Deposit, and all
investments and proceeds thereof (including all income thereon); and
(i) all present and future claims, demands, causes and choses in action
in respect of any or all of the foregoing and all payments on or under and all
proceeds of every kind and nature whatsoever in respect of any or all of the
foregoing, including all proceeds of the conversion, voluntary or involuntary,
into cash or other liquid property, all cash proceeds, accounts, accounts
receivable, notes, drafts, acceptances, chattel paper, checks, deposit accounts,
insurance proceeds, condemnation awards, rights to payment of any and every kind
and other forms of obligations and receivables, instruments and other property
which at any time constitute all or part of or are included in the proceeds of
any of the foregoing (collectively, the "Collateral").
The foregoing Grant is made in trust to secure the payment of
principal of and interest on, and any other amounts owing in respect of, the
Notes, equally and ratably without prejudice, priority or distinction, and to
secure compliance with the provisions of this Indenture, all as provided in this
Indenture.
The Indenture Trustee, as Indenture Trustee on behalf of the
Noteholders, acknowledges such Grant, accepts the trusts under this Indenture in
accordance with the provisions of this Indenture and agrees to perform its
duties required in this Indenture to the best of its ability to the end that the
interests of the Noteholders may be adequately and effectively protected.
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ARTICLE I
DEFINITIONS AND USAGE
---------------------
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 Appendix A hereto, which also contains
rules as to usage that shall be 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 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.
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Article II
THE NOTES
---------
SECTION 2.1 FORM. The Notes, together with the Indenture Trustee's
certificate of authentication, shall be in substantially the form set forth in
Exhibit A, with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture 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 the 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 of such Notes.
Each Note shall be dated the date of its authentication. The terms
of the Notes set forth in Exhibit A are part of the terms of this Indenture.
SECTION 2.2 EXECUTION, AUTHENTICATION AND DELIVERY. 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 manual or
facsimile.
Notes bearing the manual or facsimile signature of individuals who
were at any time Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.
The Indenture Trustee shall upon Issuer Order authenticate and
deliver Notes for original issue in an aggregate principal amount of
$1,976,950,000. The aggregate principal amount of Notes outstanding at any time
may not exceed such amount except as provided in Section 2.5.
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Each Note shall be dated the date of its authentication. The Notes
shall be issuable as registered Notes in the minimum denomination of $1,000 and
in integral multiples of $1,000 in excess thereof.
No Note shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose, unless there appears on such Note a
certificate of authentication substantially in the form provided for herein
executed by the Indenture Trustee by the manual signature of one of its
authorized signatories, and such certificate upon any Note shall be conclusive
evidence, and the only evidence, that such Note has been duly authenticated and
delivered hereunder.
SECTION 2.3 TEMPORARY NOTES. Pending the preparation of Definitive
Notes, the Issuer may execute, and upon receipt of an Issuer Order the Indenture
Trustee shall authenticate and deliver, temporary Notes which are printed,
lithographed, typewritten, mimeographed or otherwise produced, of the tenor of
the Definitive Notes in lieu of which they are issued and with such variations
not inconsistent with the terms of this Indenture determined to be appropriate
by the Responsible Officer of the Issuer executing the temporary Notes, as
evidenced by his or her execution of such temporary Notes.
If temporary Notes are issued, the Issuer will cause Definitive
Notes to be prepared without unreasonable delay. After the preparation of
Definitive Notes, the temporary Notes shall be exchangeable for Definitive Notes
upon surrender of the temporary Notes at the office or agency of the Issuer to
be maintained as provided in Section 3.2, without charge to the Noteholder. Upon
surrender for cancellation of any one or more temporary Notes, the Issuer shall
execute and the Indenture Trustee shall authenticate and deliver in exchange
therefor a like principal amount of Definitive Notes of authorized
denominations. Until so exchanged, the temporary Notes shall in all respects be
entitled to the same benefits under this Indenture as Definitive Notes.
SECTION 2.4 REGISTRATION; REGISTRATION OF TRANSFER AND EXCHANGE.
The Issuer shall cause to be kept a register (the "Note Register") in which,
subject to such reasonable regulations as it may prescribe, the Issuer shall
provide for the registration of Notes and the registration of transfers of
Notes. The Indenture Trustee shall be "Note Registrar" for the purpose of
registering Notes and transfers of Notes as herein provided. Upon any
resignation of any Note Registrar, the Issuer shall promptly
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<PAGE>
appoint a successor or, if it elects not to make such an appointment, assume the
duties of Note Registrar.
If a Person other than the Indenture Trustee is appointed by the
Issuer as Note Registrar, the Issuer shall give the Indenture Trustee prompt
written notice of the appointment of such Note Registrar and of the location,
and any change in the location, of the Note Register, and the Indenture Trustee
shall have the right to inspect the Note Register at all reasonable times and to
obtain copies thereof, and the Indenture Trustee shall have the right to rely
upon a certificate executed on behalf of the Note Registrar by an Executive
Officer thereof as to the names and addresses of the Noteholders and the
principal amounts and number of such Notes.
Upon surrender for registration of transfer of any Note at the
office or agency of the Issuer to be maintained as provided in Section 3.2, if
the requirements of Section 8-401(1) of the UCC are met, the Issuer shall
execute, and the Indenture Trustee shall authenticate and the Noteholder shall
obtain from the Indenture Trustee, in the name of the designated transferee or
transferees, one or more new Notes in any authorized denominations and a like
aggregate principal amount.
At the option of the Noteholder, Notes may be exchanged for other
Notes in any authorized denominations and a like aggregate principal amount,
upon surrender of the Notes to be exchanged at such office or agency. Whenever
any Notes are so surrendered for exchange, the Issuer shall execute, and the
Indenture Trustee shall authenticate and the Noteholder shall obtain from the
Indenture Trustee, the Notes which the Noteholder making the exchange is
entitled to receive.
All Notes issued upon any registration of transfer or exchange of
Notes shall be the valid obligations of the Issuer, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer
or exchange shall be duly endorsed by, or be accompanied by a written instrument
of transfer in form satisfactory to the Indenture Trustee duly executed by the
Noteholder thereof or such Noteholder's attorney duly authorized in writing,
with such signature guaranteed by an "eligible guarantor institution" meeting
the requirements of the Note Registrar, which requirements include membership or
participation in Securities
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Transfer Agent's Medallion Program ("STAMP") or such other "signature guarantee
program" as may be determined by the Note Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Exchange Act.
No service charge shall be made to a Noteholder for any
registration of transfer or exchange of Notes, but the Indenture Trustee may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration of transfer or
exchange of Notes, other than exchanges pursuant to Section 2.3 or 9.6 not
involving any transfer.
The preceding provisions of this Section notwithstanding, the
Issuer shall not be required to make and the Note Registrar need not register
transfers or exchanges of Notes selected for redemption or of any Note for a
period of 15 days preceding the due date for any payment with respect to the
Note.
SECTION 2.5 MUTILATED, DESTROYED, LOST OR STOLEN NOTES. If (i) any
mutilated Note is surrendered to the Indenture Trustee, or the Indenture Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Note, and (ii) there is delivered to the Issuer and the Indenture Trustee such
security or indemnity as may be required by each of them to hold the Issuer and
the Indenture Trustee harmless, then, in the absence of notice to the Issuer,
the Note Registrar or the Indenture Trustee that such Note has been acquired by
a bona fide purchaser, and provided that the requirements of Section 8-405 of
the UCC are met, the Issuer shall execute and upon its request the Indenture
Trustee shall authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Note, a replacement Note; PROVIDED,
HOWEVER, that if any such destroyed, lost or stolen Note, but not a mutilated
Note, shall have become or within 15 days shall be due and payable, or shall
have been called for redemption, instead of issuing a replacement Note, the
Issuer may pay such destroyed, lost or stolen Note when so due or payable or
upon the Redemption Date without surrender thereof. If, after the delivery of
such replacement Note or payment of a destroyed, lost or stolen Note pursuant to
the proviso to the preceding sentence, a bona fide purchaser of the original
Note in lieu of which such replacement Note was issued presents for payment such
original Note, the Issuer and the Indenture Trustee shall be entitled to recover
such replacement Note (or such payment) from the Person to whom it was delivered
or any Person taking such replacement Note from such Person to whom such
replacement Note was delivered or any assignee of such Person, except a bona
fide purchaser, and shall be entitled to recover upon the
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security or indemnity provided therefor to the extent of any loss, damage, cost
or expense incurred by the Issuer or the Indenture Trustee in connection
therewith.
Upon the issuance of any replacement Note under this Section, the
Issuer may require the payment by the Noteholder thereof of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other reasonable expenses (including the fees and expenses of
the Indenture Trustee) connected therewith.
Every replacement Note issued pursuant to this Section in
replacement of any mutilated, destroyed, lost or stolen Note shall constitute an
original additional contractual obligation of the Issuer, whether or not the
mutilated, destroyed, lost or stolen Note shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.
The provisions of this Section are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Notes.
SECTION 2.6 PERSONS DEEMED OWNER. Prior to due presentment for
registration of transfer of any Note, the Issuer, the Indenture Trustee and any
agent of the Issuer or the Indenture Trustee may treat the Person in whose name
any Note is registered (as of the day of determination) as the owner of such
Note for the purpose of receiving payments of principal of, interest, if any, on
such Note and for all other purposes whatsoever, whether or not such Note be
overdue, and neither the Issuer, the Indenture Trustee nor any agent of the
Issuer or the Indenture Trustee shall be affected by notice to the contrary.
SECTION 2.7 PAYMENT OF PRINCIPAL AND INTEREST; NOTE INTEREST
SHORTFALL. (a) The Notes shall accrue interest as provided in the forms of
Notesset forth in Exhibit A, and such interest shall be payable on each
Distribution Date as specified therein, subject to Section 3.1. Any installment
of interest or principal, if any, payable on any Note 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 (or one or more Predecessor Notes) is
registered on the Record Date by check mailed first-class, postage prepaid to
such Person's address as it appears on
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the Note Register on such Record Date, except that, unless Definitive Notes have
been issued pursuant to Section 2.12, with respect to Notes registered on the
Record Date in the name of the nominee of the Clearing Agency (initially, such
nominee to be Cede & Co.), payment shall be made by wire transfer in immediately
available funds to the account designated by such nominee and except for the
final installment of principal payable with respect to such Note on a
Distribution Date or on the Note Final Maturity Date for such Note which shall
be payable as provided below. The funds represented by any such checks returned
undelivered shall be held in accordance with Section 3.3.
(b) The principal of each Note shall be payable in installments on
each Distribution Date as provided in the forms of Note set forth in Exhibit A.
Notwithstanding the foregoing, the entire unpaid principal amount of each class
of the Notes shall be due and payable, if not previously paid, on the Note Final
Maturity Date for such class of Notes and on the date on which an Event of
Default shall have occurred and be continuing if 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 5.2. All principal payments on the
Notes shall be made pro rata to the Noteholders entitled thereto. 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. Notices in connection with redemptions of Notes shall be
mailed to Noteholders as provided in Section 10.2.
(c) If the Issuer defaults in a payment of interest on the Notes, the
Issuer shall pay the resulting Note Interest Shortfall on the following
Distribution Date as provided in the Administration Agreement.
SECTION 2.8 CANCELLATION. All Notes surrendered for payment,
registration of transfer, exchange or redemption shall, if surrendered to any
Person other than the Indenture Trustee, be delivered to the Indenture Trustee
and shall be promptly
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cancelled by the Indenture Trustee. The Issuer may at any time deliver to the
Indenture Trustee for cancellation any Notes previously authenticated and
delivered hereunder which the Issuer may have acquired in any manner whatsoever
and all Notes so delivered shall be promptly cancelled by the Indenture Trustee.
No Notes shall be authenticated in lieu of or in exchange for any Notes
cancelled as provided in this Section, except as expressly permitted by this
Indenture. All canceled Notes may be held or disposed of by the Indenture
Trustee in accordance with its standard retention or disposal policy as in
effect at the time, unless the Issuer shall direct by an Issuer Order that they
be returned to it and so long as such Issuer Order is timely and the Notes have
not been previously disposed of by the Indenture Trustee.
SECTION 2.9 RELEASE OF COLLATERAL. Subject to Section 11.1 and the
terms of the Basic Documents, the Indenture Trustee shall release property from
the lien of this Indenture only upon receipt of an Issuer Request accompanied by
an Officers' Certificate 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.
SECTION 2.10 BOOK-ENTRY NOTES. The Notes, upon original issuance,
will be issued in the form of typewritten Notes representing the Book-Entry
Notes, to be delivered to The Depository Trust Company, the initial Clearing
Agency, by, or on behalf of, the Issuer. Such Notes shall initially be
registered on the Note Register in the name of Cede & Co., the nominee of the
initial Clearing Agency, and no Note Owner shall receive a Definitive Note (as
defined below) representing such Note Owner's interest in such Note, except as
provided in Section 2.12. Unless and until definitive, fully registered Notes
(the "Definitive Notes") have been issued to Note Owners pursuant to Section
2.12:
(i) the provisions of this Section shall be in full force and
effect;
(ii) the Note Registrar and the Indenture Trustee, and their
respective directors, officers, employees and agents, may deal with the Clearing
Agency for all purposes (including the payment of principal of and interest and
other amounts on the Notes) as the authorized representative of the Note Owners;
10
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(iii) to the extent that the provisions of this Section conflict
with any other provisions of this Indenture, the provisions of this Section
shall control;
(iv) the rights of Note Owners shall be exercised only through the
Clearing Agency and shall be limited to those established by law and agreements
between such Note Owners and the Clearing Agency and/or the Clearing Agency
Participants pursuant to the Note Depository Agreement; and unless and until
Definitive Notes are issued pursuant to Section 2.12, the initial Clearing
Agency will make book-entry transfers among the Clearing Agency Participants and
receive and transmit payments of principal of and interest and other amounts on
the Notes to such Clearing Agency Participants; and
(v) whenever this Indenture requires or permits actions to be
taken based upon instructions or directions of Noteholders of Notes evidencing a
specified percentage of the Outstanding Amount of the Notes, the Clearing Agency
shall be deemed to represent such percentage only to the extent that it has
received instructions to such effect from Note Owners and/or Clearing Agency
Participants owning or representing, respectively, such required percentage of
the beneficial interest in the Notes and has delivered such instructions to the
Indenture Trustee.
SECTION 2.11 NOTICES TO CLEARING AGENCY. Whenever a notice or
other communication to the Noteholders is required under this Indenture, unless
and until Definitive Notes shall have been issued to Note Owners pursuant to
Section 2.12, the Indenture Trustee shall give all such notices and
communication specified herein to be given to Noteholders to the Clearing
Agency.
SECTION 2.12 DEFINITIVE NOTES. If (i) the Administrator advises
the Indenture Trustee in writing that the Clearing Agency is no longer willing
or able to discharge its responsibilities with respect to the Notes, and the
Administrator is unable to locate a successor, (ii) the Administrator at its
option advises the Indenture Trustee in writing that it elects to terminate the
book-entry system through the Clearing Agency or (iii) after the occurrence of
an Event of Default, a Servicer Default or an Administrator Default, Note Owners
representing beneficial interests aggregating at least a majority of the
Outstanding Amount of the Notes advise the Clearing Agency (which shall then
notify the Indenture Trustee) in writing that the continuation of a book-entry
system through the Clearing Agency is no longer in the best interests of the
Note Owners, then the Indenture Trustee shall cause the Clearing Agency to
notify all
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Note Owners, through the Clearing Agency, of the occurrence of any such event
and of the availability of Definitive Notes to Note Owners requesting the same.
Upon surrender to the Indenture Trustee of the typewritten Notes representing
the Book-Entry Notes by the Clearing Agency, accompanied by registration
instructions, the Issuer shall execute and the Indenture Trustee shall
authenticate the Definitive Notes in accordance with the instructions of the
Clearing Agency. None of the Issuer, the Note Registrar or the Indenture 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 Notes, the Indenture Trustee shall recognize the
holders of the Definitive Notes as Noteholders.
ARTICLE III
COVENANTS
SECTION 3.1 PAYMENT TO NOTEHOLDERS. The Issuer shall duly and
punctually pay the principal and interest, if any, with respect to the Notes in
accordance with the terms of the Notes and this Indenture. Without limiting the
foregoing, subject to Section 8.2(c), the Issuer shall cause to be distributed
to Noteholders in accordance with the Administration Agreement that portion of
the amounts on deposit in the Trust Accounts on a Distribution Date (other than
any Eligible Investments deposited therein that will mature on the Business Day
preceding a subsequent Distribution Date) which the Noteholders are entitled to
receive pursuant to the Administration Agreement. Amounts properly withheld
under the Code by any Person from a payment to any Noteholder of interest and/or
principal shall be considered as having been paid by the Issuer to such
Noteholder for all purposes of this Indenture.
SECTION 3.2 MAINTENANCE OF OFFICE OR AGENCY. The Issuer shall
maintain in the Borough of Brooklyn, The City of New York, 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 shall give
prompt written notice to the Indenture Trustee of the location, and 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
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appoints the Indenture Trustee as its agent to receive all such surrenders,
notices and demands.
SECTION 3.3 MONEY FOR PAYMENTS TO BE HELD IN TRUST. As provided in
Section 8.2(a) and (b), all payments of amounts due and payable with respect to
any Notes that are to be made from amounts distributed from the Collection
Account or any other Trust Account pursuant to Section 8.2(c) shall be made on
behalf of the Issuer by the Indenture Trustee or by another Paying Agent, and no
amounts so distributed from the Collection Account for payments of Notes shall
be paid over to the Issuer except as provided in this Section.
On or before the Business Day next preceding each Distribution
Date and Redemption Date, the Issuer shall distribute or cause to be distributed
to the Indenture Trustee (or any other Paying Agent) an aggregate sum sufficient
to pay the amounts then becoming due under the Notes, such sum to be held in
trust for the benefit of the Persons entitled thereto and (unless the Paying
Agent is the Indenture Trustee) shall promptly notify the Indenture Trustee of
its action or failure so to act.
The Issuer shall 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;
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(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 it 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.
Subject to applicable laws with respect to escheat of funds, any
money held by the Indenture Trustee or any Paying Agent in trust for the payment
of any amount due with respect to any Note and remaining unclaimed for two years
after such amount has become due and payable shall be discharged from such trust
and be paid to the Issuer on Issuer Request or if the Issuer has been terminated
to Seller; and the Noteholder thereof shall thereafter, as an unsecured general
creditor, look only to the Issuer for payment thereof (but only to the extent of
the amounts so paid to the Issuer), and all liability of the Indenture Trustee
or such Paying Agent with respect to such trust money shall thereupon cease;
PROVIDED, HOWEVER, that the Indenture Trustee or such Paying Agent, before being
required to make any such repayment, shall at the expense and direction of the
Issuer cause to be published once, in a newspaper published in the English
language, customarily published on each Business Day and of general circulation
in The City of New York, notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Issuer. The Indenture Trustee shall also adopt and employ,
at the expense of the Issuer, any other reasonable means of notification of such
repayment (including mailing notice of such repayment to Noteholders whose Notes
have been called but have not been surrendered for redemption or whose right to
or interest in
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due and payable but not claimed is determinable from the records of the
Indenture Trustee or of any Paying Agent, at the last address of record for each
such Noteholder).
SECTION 3.4 EXISTENCE. The Issuer shall keep in full effect its
existence, rights and franchises as a business trust under the laws of the State
of Delaware (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 shall keep in full effect its existence, rights and
franchises under the laws of such other jurisdiction) and shall 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, the Collateral and each other
instrument or agreement included in the Indenture Trust Estate.
SECTION 3.5 PROTECTION OF INDENTURE TRUST ESTATE. The Issuer will
from time to time execute and deliver all such supplements and amendments hereto
and all such financing statements, continuation statements, will take such other
action necessary or advisable to:
(i) maintain or preserve the lien and security interest (and the
priority thereof) of this Indenture or carry out more effectively the purposes
hereof;
(ii) perfect, publish notice of or protect the validity of any
grant made or to be made by this Indenture;
(iii) enforce any of the Collateral; or
(iv) preserve and defend title to the Indenture Trust Estate and
the rights of the Indenture Trustee and the Noteholders in such Indenture Trust
Estate against the claims of all persons and parties.
The Issuer hereby designates the Indenture Trustee its agent and
attorney-in-fact to execute any financing statement, continuation statement or
other instrument required to be executed pursuant to this Section.
SECTION 3.6 OPINIONS AS TO INDENTURE TRUST ESTATE. (a) On the
Closing Date, 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
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respect to the recording and filing of this Indenture as is necessary to perfect
and make effective the lien and security interest of this Indenture and reciting
the details of such action, or stating that, in the opinion of such counsel, no
such action is necessary to make such lien and security interest effective.
(b) On or before December 31 in each calendar year, beginning in 2000 ,
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
and any indentures supplemental hereto as is necessary to maintain the lien and
security interest created by this Indenture and relating 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, recording and refiling of this
Indenture and any indentures supplemental hereto that will, in the opinion of
such counsel, be required to maintain the lien and security interest of this
Indenture until December 31 in the following calendar year.
SECTION 3.7 PERFORMANCE OF OBLIGATIONS; SERVICING OF TRUST STUDENT
LOANS.(a) The Issuer will not take any action and will use its best efforts not
to permit any action to be taken by others that would release any Person from
any of such Person's material covenants or obligations under any instrument or
agreement included in the Indenture Trust Estate or that would result in the
amendment, hypothecation, subordination, termination or discharge of, or impair
the validity or effectiveness of, any such instrument or agreement, except as
expressly provided in this Indenture, any other Basic Document or such other
instrument or agreement.
(b) The Issuer may contract with other Persons to assist it in performing
its duties under this Indenture, and any performance of such duties by a Person
identified to the Indenture Trustee in an Officers' Certificate of the Issuer
shall be deemed to be action taken by the Issuer; provided, however, the Issuer
shall not be liable for any acts of Persons with whom the Issuer has contracted
with reasonable care. Initially, the Issuer has contracted with the Servicer and
the Administrator to assist the Issuer in performing its duties under this
Indenture. The Issuer shall give written notice to the Indenture Trustee and
each Rating Agency of any such contract with any other Person.
(c) The Issuer shall punctually perform and observe all of its obligations
and agreements contained in this Indenture, the other Basic Documents and the
in
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struments and agreements included in the Indenture Trust Estate, including
filing or causing to be filed all UCC financing statements and continuation
statements prepared by the Issuer and required to be filed by the terms of this
Indenture and the Administration Agreement in accordance with and within the
time periods provided for herein and therein. Except as otherwise expressly
provided therein, the Issuer shall not waive, amend, modify, supplement or
terminate any Basic Document or any provision thereof without the consent of the
Indenture Trustee or the Noteholders of at least a majority of the Outstanding
Amount of the Notes. The Issuer shall give written notice to each Rating Agency
of any such waiver, amendment, modification, supplement or termination.
(d) If a Responsible Officer of the Issuer shall have knowledge of the
occurrence of a Servicer Default or an Administrator Default under the Servicing
Agreement or the Administration Agreement, respectively, the Issuer shall
promptly notify the Indenture Trustee and the Rating Agencies thereof, and shall
specify in such notice the action, if any, the Issuer is taking with respect to
such default. If a Servicer Default shall arise from the failure of the Servicer
to perform any of its duties or obligations under the Servicing Agreement, or an
Administrator Default shall arise from the failure of the Administrator to
perform any of its duties or obligations under the Administration Agreement, as
the case may be, with respect to the Trust Student Loans, the Issuer shall take
all reasonable steps available to it to enforce its rights under the Basic
Documents in respect of such failure.
(e) As promptly as possible after the giving of notice of termination to
the Servicer of the Servicer's rights and powers, pursuant to Section 5.1 of the
Servicing Agreement, or to the Administrator of the Administrator's rights and
powers, pursuant to Section 5.1 of the Administration Agreement, the Issuer
shall appoint a successor servicer (the "Successor Servicer") or a successor
administrator (the "Successor Administrator"), respectively, and such Successor
Servicer or Successor Administrator, as the case may be, shall accept its
appointment by a written assumption in a form acceptable to the Indenture
Trustee. In the event that a Successor Servicer or Successor Administrator has
not been appointed and accepted its appointment at the time when the Servicer or
Administrator, as the case may be, ceases to act as Servicer or Administrator,
respectively, the Indenture Trustee without further action shall automatically
be appointed the Successor Servicer or Successor Administrator, as the case may
be. The Indenture Trustee may resign as the Servicer or the Administrator by
giving written notice of resignation to the Issuer and in such event will be
released from such
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duties and obligations, such release not to be effective until the date a new
servicer or a new administrator enters into an agreement with the Issuer as
provided below; PROVIDED, HOWEVER, that nothing herein shall require or permit
the Indenture Trustee to act as Servicer, or otherwise service the Trust Student
Loans, in violation of the Higher Education Act. Upon delivery of any such
notice to the Issuer, the Issuer shall obtain a new servicer as the Successor
Servicer under the Servicing Agreement or a new administrator as the Successor
Administrator under the Administration Agreement, as the case may be. Any
Successor Servicer or Successor Administrator, other than the Indenture Trustee,
shall (i) be an established institution (A) that satisfies any requirements of
the Higher Education Act applicable to servicers and (B) whose regular business
includes the servicing or administration of student loans and (ii) enter into a
servicing agreement or an administration agreement, respectively, with the
Issuer having substantially the same provisions as the provisions of the
Servicing Agreement and the Administration Agreement, as applicable. If within
30 days after the delivery of the notice referred to above, the Issuer shall not
have obtained such a new servicer or new administrator, as the case may be, the
Indenture Trustee may appoint, or may petition a court of competent jurisdiction
to appoint, a Successor Servicer or Successor Administrator; PROVIDED, HOWEVER,
that such right to appoint or to petition for the appointment of any such
successor shall in no event relieve the Indenture Trustee from any obligations
otherwise imposed on it under the Basic Documents until such successor has in
fact assumed such appointment. In connection with any such appointment, the
Indenture Trustee may make such arrangements for the compensation of such
successor as it and such successor shall agree, subject to the limitations set
forth below and in the Servicing Agreement or Administration Agreement, as
applicable, and in accordance with Section 5.2 of the Servicing Agreement and
Section 5.2 of the Administration Agreement, the Issuer shall enter into an
agreement with such successor for the servicing or administration of the Trust
Student Loans (such agreement to be in form and substance satisfactory to the
Indenture Trustee). If the Indenture Trustee shall succeed as provided herein to
the Servicer's duties as Servicer with respect to the Trust Student Loans, or
the Administrator's duties with respect to the Issuer and the Trust Student
Loans, as the case may be, it shall do so in its individual capacity and not in
its capacity as Indenture Trustee and, accordingly, the provisions of Article VI
hereof shall be inapplicable to the Indenture Trustee in its duties as the
successor to the Servicer or the Administrator, as the case may be, and the
servicing or administration of the Trust Student Loans. In case the Indenture
Trustee shall become successor to the Servicer or the Administrator, the
Indenture Trustee shall be entitled to appoint as Servicer or as Administrator,
as the case may be, any one of its Affiliates, provided that such appointment
shall not affect or
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alter in any way the liability of the Indenture Trustee as Successor Servicer or
Successor Administrator, respectively, in accordance with the terms hereof.
(f) Upon any termination of the Servicer's rights and powers pursuant
to the Servicing Agreement, or any termination of the Administrator's rights and
powers pursuant to the Administration Agreement, as the case may be, the Issuer
shall promptly notify the Indenture Trustee and each Rating Agency. As soon as a
Successor Servicer or a Successor Administrator is appointed, the Issuer shall
notify the Indenture Trustee and each Rating Agency of such appointment,
specifying in such notice the name and address of such Successor Servicer or
such Successor Administrator.
(g) Without derogating from the absolute nature of the assignment
granted to the Indenture Trustee under this Indenture or the rights of the
Indenture Trustee hereunder, the Issuer agrees that it will not, without the
prior written consent of the Indenture Trustee or the Noteholders of at least a
majority in Outstanding Amount of the Notes, amend, modify, waive, supplement,
terminate or surrender, or agree to any amendment, modification, supplement,
termination, waiver or surrender of, the terms of any Collateral or the Basic
Documents, except to the extent otherwise provided in the Basic Documents, or
waive timely performance or observance by the Servicer, the Administrator, the
Seller, the Student Loan Marketing Association, the Issuer or the Eligible
Lender Trustee under the Basic Documents; PROVIDED, HOWEVER, that no such
amendment shall (i) increase or reduce in any manner the amount of, or
accelerate or delay the timing of, distributions that are required to be made
for the benefit of the Noteholders, or (ii) reduce the aforesaid percentage of
the Notes which are required to consent to any such amendment, without the
consent of the Noteholders of all the Outstanding Notes. If any such amendment,
modification, supplement or waiver shall be so consented to by the Indenture
Trustee or such Noteholders, the Issuer shall give written notice thereof to
each Rating Agency and agrees, promptly following a request by the Indenture
Trustee to do so, to execute and deliver, in its own name and at its own
expense, such agreements, instruments, consents and other documents as the
Indenture Trustee may deem necessary or appropriate in the circumstances.
SECTION 3.8 NEGATIVE COVENANTS. So long as any Notes are
Outstanding, the Issuer shall not:
(i) except as expressly permitted by this Indenture or any other
Basic Document, sell, transfer, exchange or otherwise dispose of any of the
properties
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or assets of the Issuer, including those included in the Indenture
Trust Estate, unless directed to do so by the Indenture Trustee;
(ii) claim any credit on, or make any deduction from the principal
or interest payable in respect of, the Notes (other than amounts properly
withheld from such payments under the Code or applicable state law) or assert
any claim against any present or former Noteholder by reason of the payment of
the taxes levied or assessed upon any part of the Indenture Trust Estate;
(iii) (A) permit the validity or effectiveness of this Indenture
to be impaired, or permit the lien of this Indenture to be amended,
hypothecated, subordinated, terminated or discharged, or permit any Person to be
released from any covenants or obligations with respect to the Notes under this
Indenture except as may be expressly permitted hereby, (B) permit any lien,
charge, excise, claim, security interest, mortgage or other encumbrance (other
than the lien of this Indenture) to be created on or extend to or otherwise
arise upon or burden the Indenture Trust Estate or any part thereof or any
interest therein or the proceeds thereof (other than tax liens and other liens
that arise by operation of law, and other than as expressly permitted by the
Basic Documents) or (C) permit the lien of this Indenture not to constitute a
valid first priority (other than with respect to any such tax or other lien)
security interest in the Indenture Trust Estate; or
(iv) enter into any amendment to a Swap Agreement requested by a
Swap Counterparty to cure any ambiguity in, or to correct or supplement any
provision of a Swap Agreement, except where the Issuer has received the consent
of the Indenture Trustee so long as the Issuer has determined, and the Indenture
Trustee has agreed in writing at the written direction of the Issuer, that the
amendment will not materially adversely affect the interests of the Noteholders
and provided that the Indenture Trustee has provided reasonable notice to the
Rating Agencies of such amendment.
SECTION 3.9 ANNUAL STATEMENT AS TO COMPLIANCE. The Issuer will
deliver to the Indenture Trustee and each Rating Agency, within 120 days after
the end of each fiscal year of the Issuer (commencing with the fiscal year
2001), an Officers' Certificate of the Issuer stating that:
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(i) a review of the activities of the Issuer during such year and
of performance under this Indenture has been made under such Authorized
Officers' 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 the
compliance of any such condition or covenant, specifying each such default known
to such Authorized Officers and the nature and status thereof.
SECTION 3.10 ISSUER MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.
(a) The Issuer shall not consolidate or merge with or into any other Person,
unless:
(i) the Person (if other than the Issuer) formed by or surviving
such consolidation or merger shall be a Person organized and existing under the
laws of the United States of America or any State and shall expressly assume, by
an indenture supplemental hereto, executed and delivered to the Indenture
Trustee, in form satisfactory to the Indenture Trustee, the due and punctual
payment of the principal of, and interest, if any, on all Notes and the
performance or observance of every agreement and covenant of this Indenture on
the part of the Issuer to be performed or observed, all as provided herein;
(ii) immediately after giving effect to such transaction, no
Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied with
respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel (and
shall have delivered copies thereof to the Indenture Trustee) to the effect that
such transaction will not have any material adverse Federal or Delaware state
tax consequence to the Issuer, any Noteholder or any Certificateholder;
(v) any action as is necessary to maintain the lien and security
interest created by this Indenture shall have been taken; and
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(vi) the Issuer shall have delivered to the Indenture Trustee an
Officers' Certificate of the Issuer and an Opinion of Counsel each stating that
such consolidation or merger and such supplemental indenture comply with this
Article III and that all conditions precedent herein provided for relating to
such transaction have been complied with (including any filing required by the
Exchange Act).
(b) The Issuer shall not convey or transfer all or substantially all
its properties or assets, including those included in the Indenture Trust
Estate, to any Person, unless:
(i) the Person that acquires by conveyance or transfer the
properties and assets of the Issuer the conveyance or transfer of which is
hereby restricted shall (A) be a United States citizen or a Person organized and
existing under the laws of the United States of America or any State, (B)
expressly assume, by an indenture supplemental hereto, executed and delivered to
the Indenture Trustee, in form satisfactory to the Indenture Trustee, the due
and punctual payment of the principal of, and interest, if any, on all Notes and
the performance or observance of every agreement and covenant of this Indenture
on the part of the Issuer to be performed or observed, all as provided herein,
(C) expressly agree by means of such supplemental indenture that all right,
title and interest so conveyed or transferred shall be subject and subordinate
to the rights of Noteholders, (D) unless otherwise provided in such supplemental
indenture, expressly agree to indemnify, defend and hold harmless the Issuer
against and from any loss, liability or expense arising under or related to this
Indenture and the Notes and (E) expressly agree by means of such supplemental
indenture that such Person (or if a group of Persons, then one specified Person)
shall make all filings with the Commission (and any other appropriate Person)
required by the Exchange Act in connection with the Notes;
(ii) immediately after giving effect to such transaction, no
Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied with
respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel (and
shall have delivered copies thereof to the Indenture Trustee) to the effect that
such
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transaction will not have any material adverse Federal or Delaware state tax
consequence to the Issuer, any Noteholder or any Certificateholder;
(v) any action as is necessary to maintain the lien and security
interest created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture Trustee an
Officers' Certificate of the Issuer and an Opinion of Counsel each stating that
such conveyance or transfer and such supplemental indenture comply with this
Article III and that all conditions precedent herein provided for relating to
such transaction have been complied with (including any filing required by the
Exchange Act).
SECTION 3.11 SUCCESSOR OR TRANSFEREE. (a) Upon any consolidation
or merger of the Issuer in accordance with Section 3.10(a), the Person formed by
or surviving such consolidation or merger (if other than the Issuer) shall
succeed to, and be substituted for, and may exercise every right and power of,
the Issuer under this Indenture with the same effect as if such Person had been
named as the Issuer herein.
(b) Upon a conveyance or transfer of all the assets and properties
of the Issuer pursuant to Section 3.10(b), SLM Student Loan Trust 2000-1 will be
released from every covenant and agreement of this Indenture to be observed or
performed on the part of the Issuer with respect to the Notes immediately upon
the delivery by the Issuer of written notice to the Indenture Trustee stating
that SLM Student Loan Trust 2000-1 is to be so released.
SECTION 3.12 NO OTHER BUSINESS. The Issuer shall not engage in any
business other than financing, purchasing, owning, selling and managing the
Trust Student Loans in the manner contemplated by this Indenture and the other
Basic Documents and activities incidental thereto.
SECTION 3.13 NO BORROWING. The Issuer shall not issue, incur,
assume, guarantee or otherwise become liable, directly or indirectly, for any
indebtedness except for the Notes.
SECTION 3.14 OBLIGATIONS OF SERVICER AND ADMINISTRATOR. The Issuer
shall cause the Servicer to comply with Sections 3.1, 3.2 and 3.3 of the
Administration
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Agreement and Section 3.7 of the Servicing Agreement and the Administrator to
comply with Sections 2.9, 3.1, 3.2 and 3.3 of the Administration Agreement.
SECTION 3.15 GUARANTEES, LOANS, ADVANCES AND OTHER LIABILITIES.
Except as contemplated by this Indenture and the 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 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 contribution to, any other Person.
SECTION 3.16 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 3.17 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 Eligible Lender 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; PROVIDED, HOWEVER, that the Issuer may make, or
cause to be made, distributions to the Servicer, the Eligible Lender Trustee,
the Indenture Trustee, the Certificateholders, the Noteholders, the
Administrator and the Seller as contemplated by, and to the extent funds are
available for such purpose under, this Indenture and the other Basic Documents.
The Issuer will not, directly or indirectly, make payments to or distributions
from the Collection Account except in accordance with this Indenture and the
other Basic Documents.
SECTION 3.18 NOTICE OF EVENTS OF DEFAULT. The Issuer shall give
the Indenture Trustee and the Rating Agencies prompt written notice of each
Event of Default hereunder and each default on the part of the Seller of its
obligations under the Sale Agreement, the Student Loan Marketing Association of
its obligations under the Purchase Agreement, the Servicer of its obligations
under the Servicing Agreement,
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or the Administrator of its obligations under the Administration Agreement. In
addition, the Issuer shall deliver to the Indenture Trustee and each Rating
Agency, within five days after the occurrence thereof, written notice in the
form of an Officers' Certificate of the Issuer of any event which with the
giving of notice and the lapse of time would become an Event of Default under
Section 5.1(iii), its status and what action the Issuer is taking or proposes to
take with respect thereto.
SECTION 3.19 FURTHER INSTRUMENTS AND ACTS. Upon request of the
Indenture Trustee, the Issuer will execute and deliver such further instruments
and do such further acts as may be reasonably necessary or proper to carry out
more effectively the purpose of this Indenture.
ARTICLE IV
SATISFACTION AND DISCHARGE
--------------------------
SECTION 4.1 SATISFACTION AND DISCHARGE OF INDENTURE. This
Indenture shall cease to be of further effect with respect to the Notes except
as to (i) rights of registration of transfer and exchange, (ii) substitution of
mutilated, destroyed, lost or stolen Notes, (iii) rights of Noteholders to
receive payments of principal thereof and interest thereon, (iv) Sections 3.3,
3.4, 3.5, 3.8, 3.10, 3.12 and 3.13, (v) the rights, obligations and immunities
of the Indenture Trustee hereunder (including, without limitation, the rights of
the Indenture Trustee under Section 6.7 and the obligations of the Indenture
Trustee under Section 4.2) and (vi) 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 theretofore authenticated and delivered (other
than (i) Notes that have been destroyed, lost or stolen and that have
been replaced or paid as provided in Section 2.5 and (ii) Notes for
whose payment money has theretofore been deposited in trust or
segregated and held in trust by the Issuer and thereafter repaid to
the Issuer or discharged from such trust, as provided in Section 3.3)
have been delivered to the Indenture Trustee for cancellation; or
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(2) all Notes not theretofore delivered to the Indenture
Trustee for cancellation
(i) have become due and payable,
(ii) will become due and payable at their respective Note
Final Maturity Date, within one year, or
(iii) are to be called for redemption within one year
under arrangements satisfactory to the Indenture Trustee for the giving of
notice of redemption by the Indenture Trustee in the name, and at the
expense, of the Issuer, and the Issuer, in the case of (i), (ii) or
(iii) 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 Notes not theretofore delivered to the Indenture
Trustee for cancellation when due to the Note Final Maturity Date;
(b) the Issuer has paid or caused to be paid all other sums payable
hereunder by the Issuer; and
(c) the Issuer has delivered to the Indenture Trustee an Officers'
Certificate of the Issuer, an Opinion of Counsel and (if required by the TIA or
the Indenture Trustee) an Independent Certificate from a firm of certified
public accountants, each meeting the applicable requirements of Section 11.1(a)
and, subject to Section 11.2, each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture have
been complied with.
SECTION 4.2 APPLICATION OF TRUST MONEY. All moneys deposited with the
Indenture Trustee pursuant to Section 4.1 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
Indenture Trustee may determine, to the Noteholders of the particular Notes for
the payment or redemption of which such moneys have been deposited with the
Indenture Trustee, of all sums due and to become due thereon for principal and
interest; but such moneys need not be segregated from
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other funds except to the
extent required herein or in the Administration Agreement or required by law.
SECTION 4.3 REPAYMENT OF MONEYS HELD BY PAYING AGENT. In connection
with the satisfaction and discharge of this Indenture with respect to the Notes,
all moneys then held by any Paying Agent other than the Indenture Trustee under
the provisions of this Indenture with respect to such Notes shall, upon demand
of the Issuer, be paid to the Indenture Trustee to be held and applied according
to Section 3.3 and thereupon such Paying Agent shall be released from all
further liability with respect to such moneys.
SECTION 4.4 AUCTION OF TRUST STUDENT LOANS. Any Trust Student Loans
remaining in the Trust as of the end of the Collection Period immediately
preceding the earliest Distribution Date on which the Pool Balance is equal to
10% or less of the initial Pool Balance three business days prior to such
Distribution Date (the "Trust Auction Date") shall be offered for sale by the
Indenture Trustee unless the Seller has exercised its option to purchase the
Trust Estate as described in Section 6.1A of the Administration Agreement with
respect to such Distribution Date. The Seller will be deemed to have waived such
option if it fails to notify the Eligible Lender Trustee and the Indenture
Trustee of its exercise thereof in writing prior to the Indenture Trustee's
acceptance of a bid to purchase such Trust Student Loans; provided, however,
that there shall be no such offer for sale if the Indenture Trustee fails to
provide notice to the Seller in accordance with this Section 4.4. The Indenture
Trustee shall provide written notice to the Seller of any such offer for sale at
least 5 business days in advance of the Trust Auction Date. The Indenture
Trustee shall permit the Seller or any of its Affiliates to offer bids only if
the Pool Balance as of the applicable Trust Auction Date is equal to 10% or less
of the Initial Pool Balance. If at least two bids are received, the Indenture
Trustee shall solicit and resolicit new bids from all participating bidders
until only one bid remains or the remaining bidders decline to resubmit bids.
The Indenture Trustee shall accept the highest of such remaining bids if it is
equal to or in excess of both the Minimum Purchase Amount and the fair market
value of such Trust Student Loans as of the end of the Collection Period
immediately preceding the Trust Auction Date. If at least two bids are not
received or the highest bid after the resolicitation process is completed is not
equal to or in excess of the higher of the Minimum Purchase Amount and the fair
market value of the Trust Student Loans, the Indenture Trustee shall not
consummate such sale. The Indenture Trustee may consult, and, at the direction
of the Seller, shall consult, with a financial advisor, including an
underwriter
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of the Notes or the Administrator, to determine if the fair market value of the
Trust Student Loans has been offered. The proceeds of any such sale will be
applied in the order of priority set forth in Section 5.4 (b). If the sale is
not consummated in accordance with the foregoing, the Indenture Trustee may, but
shall not be under any obligation to, solicit bids for sale of the Trust Student
Loans with respect to future Distribution Dates upon terms similar to those
described above, including the Seller's waiver of its option to purchase the
Trust Estate in accordance with Section 6.1A of the Administration Agreement
with respect to each such future Distribution Date.
ARTICLE V
REMEDIES
SECTION 5.1 EVENTS OF DEFAULT. "Event of Default," wherever used
herein, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(i) default in the payment of any interest on any Note when the same
becomes due and payable, and such default shall continue for a period of
five days; or
(ii) default in the payment of the principal of any Note when the same
becomes due and payable on the related Note Final Maturity Date; or
(iii) default in the observance or performance of any covenant or
agreement of the Issuer made in this Indenture (other than a covenant or
agreement, a default in the observance or performance of which is elsewhere
in this Section specifically dealt with),or any representation or warranty
of the Issuer made in this Indenture or in any certificate or other writing
having been incorrect in any material respect as of the time when made,
such default or breach having a material adverse effect on the holders of
the Notes, and such default or breach shall continue or not be cured, or
the circumstance or condition in respect of which such misrepresentation or
warranty was incorrect shall not have been eliminated or otherwise cured,
for a period of 30 days after there shall have been given, by registered or
certified mail, to the Issuer by the Indenture Trustee or to the Issuer and
the Indenture Trustee by the Noteholders of at least 25% of the Outstanding
Amount of the Notes, a written notice specifying such
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default or incorrect representation or warranty and requiring it to be remedied
and stating that such notice is a notice of Default hereunder; or
(iv) the filing of a decree or order for relief by a court having
jurisdiction in the premises in respect of the Issuer or any substantial
part of the Indenture Trust Estate 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 of the Issuer or for
any substantial part of the Indenture Trust Estate, or ordering the
winding-up or liquidation of the Issuer's affairs, and such decree or order
shall remain unstayed and in effect for a period of 60 consecutive days; or
(v) the commencement by the Issuer 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 the Issuer to the entry of an
order for relief in an involuntary case under any such law, or the consent
by the Issuer to the appointment or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official
of the Issuer or for any substantial part of the Indenture Trust Estate, or
the making by the Issuer of any general assignment for the benefit of
creditors, or the failure by the Issuer generally to pay its debts as such
debts become due, or the taking of action by the Issuer in furtherance of
any of the foregoing.
SECTION 5.2 ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT. If an
Event of Default should occur and be continuing, then and in every such
case the Indenture Trustee or the Noteholders of Notes representing not
less than a majority of the Outstanding Amount of the Notes may declare all
the Notes to be immediately due and payable, by a notice in writing to the
Issuer (and to the Indenture Trustee if given by Noteholders), and upon any
such declaration the unpaid principal amount of such Notes, together with
accrued and unpaid interest thereon through the date of acceleration, shall
become immediately due and payable.
At any time after such declaration of acceleration of maturity has
been made and before a judgment or decree for payment of the money due has
been obtained by the Indenture Trustee as hereinafter in this Article V
provided, the Noteholders of Notes representing a majority of the
Outstanding Amount of the Notes, by written notice to the Issuer and the
Indenture Trustee, may rescind and annul such declaration and its
consequences if:
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(i) the Issuer has paid or deposited with the Indenture Trustee a sum
sufficient to pay:
(a) all payments of principal of and interest on all Notes and all other
amounts that would then be due hereunder or upon such Notes if the Event of
Default giving rise to such acceleration had not occurred; and
(b) all sums paid or advanced by the Indenture Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the Indenture
Trustee and its agents and counsel; and
(ii) all Events of Default, other than the nonpayment of the principal
of the Notes that has become due solely by such acceleration, have been
cured or waived as provided in Section 5.12.
No such rescission shall affect any subsequent default or impair any
right consequent thereto.
SECTION 5.3 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
INDENTURE TRUSTEE. The Issuer covenants that if (i) default is made in the
payment of any interest on any Note when the same becomes due and payable,
and such default continues for a period of five days, or (ii) default is
made in the payment of the principal of any Note when the same becomes due
and payable at the related Note Final Maturity Date, the Issuer shall, upon
demand of the Indenture Trustee, pay to it, for the benefit of the
Noteholders, the whole amount then due and payable on such Notes for
principal and interest, with interest upon the overdue principal, and, to
the extent payment at such rate of interest shall be legally enforceable,
upon overdue installments of interest, at the rate specified in Section 2.7
and in addition thereto such further amount as shall be sufficient to cover
the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Indenture Trustee
and its agents and counsel.
(a) In case the Issuer shall fail forthwith to pay such amounts upon such
demand, the Indenture Trustee, in its own name and as trustee of an express
trust, may institute a Proceeding for the collection of the sums so due and
unpaid, and may prosecute such Proceeding to judgment or final decree, and may
enforce the same
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against the Issuer or other obligor upon such Notes and collect in the manner
provided by law out of the property of the Issuer or other obligor upon such
Notes, wherever situated, the moneys adjudged or decreed to be payable.
(b) If an Event of Default occurs and is continuing, the Indenture Trustee
may, as more particularly provided in Section 5.4, in its discretion, proceed to
protect and enforce its rights and the rights of the Noteholders, by such
appropriate Proceedings as the Indenture Trustee shall deem most effective to
protect and enforce any such rights, whether for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the exercise of any power
granted herein, or to enforce any other proper remedy or legal or equitable
right vested in the Indenture Trustee by this Indenture or by law.
(c) In case there shall be pending, relative to the Issuer or any other
obligor upon the Notes or any Person having or claiming an ownership interest in
the Indenture Trust Estate, Proceedings under Title 11 of the United States Code
or any other applicable Federal or state bankruptcy, insolvency or other similar
law, or in case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or
taken possession of the Issuer or its property or such other obligor or Person,
or in case of any other, comparable judicial Proceedings relative to the Issuer
or other obligor upon the Notes, or to the creditors or property of the Issuer
or such other obligor, the Indenture Trustee, irrespective of whether the
principal of any Notes shall then be due and payable, as therein expressed or by
declaration or otherwise and irrespective of whether the Indenture Trustee shall
have made any demand pursuant to the provisions of this Section, shall be
entitled and empowered, by intervention in such proceedings or otherwise:
(i) to file and prove a claim or claims for the whole amount of
principal and interest owing and unpaid in respect of the Notes and to file
such other papers or documents as may be necessary or advisable in order to
have the claims of the Indenture Trustee (including any claim for
reasonable compensation to the Indenture Trustee and each predecessor
Indenture Trustee, and their respective agents, attorneys and counsel, and
for reimbursement of all expenses and liabilities incurred, and all
advances made, by the Indenture Trustee and each predecessor Indenture
Trustee, except as a result of negligence or bad faith) and of the
Noteholders allowed in such Proceedings;
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(ii) unless prohibited by applicable law and regulations, to vote on
behalf of the Noteholders in any election of a trustee, a standby trustee
or Person performing similar functions in any such Proceedings;
(iii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute all amounts received with
respect to the claims of the Noteholders and of the Indenture Trustee on
their behalf; and
(iv) to file such proofs of claim and other papers or documents as may
be necessary or advisable in order to have the claims of the Indenture
Trustee or the Noteholders allowed in any judicial proceedings relative to
the Issuer, its creditors and its property;
and any trustee, receiver, liquidator, custodian or other similar
official in any such Proceeding is hereby authorized by each of such
Noteholders to make payments to the Indenture Trustee, and, in the event
that the Indenture Trustee shall consent to the making of payments directly
to such Noteholders, to pay to the Indenture Trustee such amounts as shall
be sufficient to cover reasonable compensation to the Indenture Trustee,
each predecessor Indenture Trustee and their respective agents, attorneys
and counsel, and all other expenses and liabilities incurred, and all
advances made, by the Indenture Trustee and each predecessor Indenture
Trustee except as a result of negligence or bad faith.
(d) Nothing herein contained shall be deemed to authorize the Indenture
Trustee to authorize or consent to or vote for or accept or adopt on behalf of
any Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Noteholder thereof or to
authorize the Indenture Trustee to vote in respect of the claim of any
Noteholder in any such proceeding except, as aforesaid, to vote for the election
of a trustee in bankruptcy or similar Person.
(e) All rights of action and of asserting claims under this Indenture, or
under any of the Notes, may be enforced by the Indenture Trustee without the
possession of any of the Notes or the production thereof in any trial or other
Proceedings relative thereto, and any such action or Proceedings instituted by
the Indenture Trustee shall be brought in its own name as trustee of an express
trust, and any recovery of judgment, subject to the payment of the expenses,
disbursements and compensation of the
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Indenture Trustee, each predecessor Indenture Trustee and their respective
agents and attorneys, shall be for the ratable benefit of the Noteholders.
(f) In any Proceedings brought by the Indenture Trustee (and also any
Proceedings involving the interpretation of any provision of this Indenture to
which the Indenture Trustee shall be a party), the Indenture Trustee shall be
held to represent all the Noteholders, and it shall not be necessary to make any
Noteholder a party to any such Proceedings.
SECTION 5.4 REMEDIES; PRIORITIES. If an Event of Default shall have
occurred and be continuing, the Indenture Trustee may do one or more of the
following (subject to Section 5.5):
(a) (i) institute Proceedings in its own name and as trustee of an express
trust for the collection of all amounts then payable on the Notes or under this
Indenture with respect thereto, whether by declaration or otherwise, enforce any
judgment obtained, and collect from the Issuer and any other obligor upon such
Notes moneys adjudged due;
(ii) institute Proceedings from time to time for the complete or
partial foreclosure of this Indenture, with respect to the Indenture Trust
Estate;
(iii) exercise any remedies of a secured party under the UCC with
respect to the Trust Estate and take any other appropriate action to
protect and enforce the rights and remedies of the Indenture Trustee and
the Noteholders;
(iv) sell the Indenture Trust Estate or any portion thereof or rights
or interest therein, at one or more public or private sales called and
conducted in any manner permitted by law; and/or
(v) elect to have the Eligible Lender Trustee maintain ownership of
the Trust Student Loans and continue to apply collections with respect to
the Trust Student Loans as if there had been no declaration of
acceleration.
PROVIDED, HOWEVER, that the Indenture Trustee may not sell or otherwise
liquidate the Indenture Trust Estate following an Event of Default, other than
an Event of Default described in Section 5.1(i) or (ii), unless (A) the
Noteholders of 100% of the
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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 such 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 Notes had not been
declared due and payable, and the Indenture Trustee obtains the consent of
Noteholders of 66-2/3% of the Outstanding Amount of the Notes; PROVIDED,
FURTHER, that the Indenture Trustee may not sell or otherwise liquidate the
Indenture Trust Estate following an Event of Default, other than an Event of
Default described in Section 5.1(i) or (ii), unless (D) the proceeds of such
sale or liquidation distributable to the Certificateholders PLUS the proceeds of
the sale or liquidation of the Trust Estate distributable to the
Certificateholders are sufficient to pay to the Certificateholders the
outstanding Certificate Balance plus accrued and unpaid return thereon or (E)
after receipt of notice from the Eligible Lender Trustee that the proceeds of
such sale or liquidation distributable to the Certificateholders PLUS the
proceeds of the sale or liquidation of the Trust Estate distributable to the
Certificateholders would not be sufficient to pay to the Certificateholders the
outstanding Certificate Balance plus accrued and unpaid return thereon, the
Certificateholders of at least a majority of the Certificate Balance consent
thereto. In determining such sufficiency or insufficiency with respect to
clauses (B), (C), (D) and (E), 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 and/or Trust Estate, as
applicable, for such purpose.
(b) If the Indenture Trustee collects any money or property pursuant to
this Article V, it shall pay out the money or property in the following order:
FIRST: to the Indenture Trustee for amounts due under Section 6.7;
SECOND: to the Servicer for due and unpaid Primary Servicing Fees;
THIRD: to the Rate Cap Swap Counterparty for any due and unpaid Swap
Fee;
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FOURTH: to Noteholders for amounts due and unpaid on the Notes for
interest, ratably, without preference or priority of any kind, according to
the amounts due and payable on the Notes for such interest;
FIFTH: to Noteholders for amounts due and unpaid on the Notes for
principal, ratably, without preference or priority of any kind, according
to the amounts due and payable on the Notes for principal;
SIXTH: to the Issuer for distribution to the Certificateholders in
respect of any unpaid Certificate Balance and unpaid return on the
Certificates;
SEVENTH: to the Reimbursement Swap Counterparty for any unpaid Swap
Payments;
EIGHTH: to the Servicer, for any unpaid Carryover Servicing Fees; and
NINTH: to the Issuer, for distribution in accordance with the terms of
the Administration Agreement and the Trust Agreement.
The Indenture Trustee may fix a record date and payment date for any
payment to Noteholders pursuant to this Section. At least 15 days before
such record date, the Indenture Trustee shall mail to each Noteholder and
the Issuer a notice that states the record date, the payment date and the
amount to be paid.
SECTION 5.5 OPTIONAL PRESERVATION OF THE TRUST STUDENT LOANS. If the
Notes have been declared to be due and payable under Section 5.2 following
an Event of Default and such declaration and its consequences have not been
rescinded and annulled, the Indenture Trustee may, but need not, elect to
maintain possession of the Indenture Trust Estate. It is the desire of the
parties hereto and the Noteholders that there be at all times sufficient
funds for the payment of principal of and interest on the Notes, and the
Indenture Trustee shall take such desire into account when determining
whether or not to maintain possession of the Indenture Trust Estate. In
determining whether to maintain possession of the Indenture Trust Estate,
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.
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SECTION 5.6 LIMITATION OF SUITS. No Noteholder shall have any right to
institute any Proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless:
(i) such Noteholder has previously given written notice to the
Indenture Trustee of a continuing Event of Default;
(ii) the Noteholders of not less than 25% of the Outstanding Amount of
the Notes have made written request to the Indenture Trustee to institute
such Proceeding in respect of such Event of Default in its own name as
Indenture Trustee hereunder;
(iii) such Noteholder or Noteholders have offered to the Indenture
Trustee reasonable indemnity against the costs, expenses and liabilities to
be incurred in complying with such request;
(iv) the Indenture Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute such
Proceeding; and
(v) no direction inconsistent with such written request has been given
to the Indenture Trustee during such 60-day period by the Noteholders of a
majority of the Outstanding Amount of the Notes;
it being understood and intended that no one or more Noteholders shall
have any right in any manner whatever by virtue of, or by availing of, any
provision of this indenture to affect, disturb or prejudice the rights of
any other Noteholders or to obtain or to seek to obtain priority or
preference over any other Noteholders or to enforce any right under this
Indenture, except in the manner herein provided.
In the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Noteholders,
each representing less than a majority of the Outstanding Amount of the
Notes, the Indenture Trustee in its sole discretion may determine what
action, if any, shall be taken, notwithstanding any other provisions of
this Indenture.
SECTION 5.7 UNCONDITIONAL RIGHTS OF NOTEHOLDERS TO RECEIVE PRINCIPAL
AND INTEREST. Notwithstanding any other provisions in this Indenture, any
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Noteholder shall have the right, which is absolute and unconditional, to
receive payment of the principal of and interest on such Note on or after
the respective due dates thereof expressed in such Note or in this
Indenture (or, in the case of redemption, on or after the Redemption Date)
and to institute suit for the enforcement of any such payment, and such
right shall not be impaired without the consent of such Noteholder.
SECTION 5.8 RESTORATION OF RIGHTS AND REMEDIES. If the Indenture
Trustee or any Noteholder has instituted any Proceeding to enforce any
right or remedy under this Indenture and such Proceeding has been
discontinued or abandoned for any reason or has been determined adversely
to the Indenture Trustee or to such Noteholder, then and in every such case
the Issuer, the Indenture Trustee and the Noteholders shall, subject to any
determination in such Proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of
the Indenture Trustee and the Noteholders shall continue as though no such
Proceeding had been instituted.
SECTION 5.9 RIGHTS AND REMEDIES CUMULATIVE. No right or remedy herein
conferred upon or reserved to the Indenture Trustee or to the Noteholders
is intended to be exclusive of any other right or remedy, and every right
and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or
hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not
prevent the concurrent assertion or employment of any other appropriate
right or remedy.
SECTION 5.10 DELAY OR OMISSION NOT A WAIVER. No delay or omission of
the Indenture Trustee or any Noteholder to exercise any right or remedy
accruing upon any Default shall impair any such right or remedy or
constitute a waiver of any such Default or an acquiescence therein. Every
right and remedy given by this Article V or by law to the Indenture Trustee
or to the Noteholders may be exercised from time to time, and as often as
may be deemed expedient, by the Indenture Trustee or by the Noteholders, as
the case may be.
SECTION 5.11 CONTROL BY NOTEHOLDERS. The Noteholders of a majority of
the Outstanding Amount of the Notes shall have the right to direct the
time, method and place of conducting any Proceeding for any remedy
available to the Indenture
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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 express terms of Section 5.4, 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 Amount of the
Notes;
(iii) if the conditions set forth in Section 5.5 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, subject to Section 6.1, 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.
SECTION 5.12 WAIVER OF PAST DEFAULTS. Prior to the time a judgment or
decree for payment of money due has been obtained as described in Section
5.2, the Noteholders of not less than a majority of the Outstanding Amount
of the Notes may waive any past Default and its consequences except a
Default (a) in payment when due of principal of or interest on any of the
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 or other
Default or impair any right consequent thereto.
Upon any such waiver, such Default shall cease to exist and be deemed
to have been cured and not to have occurred for every purpose of this
Indenture; but no
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such waiver shall extend to any subsequent or other Default or impair any right
consequent thereto.
SECTION 5.13 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 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 and in this Indenture (or, in
the case of redemption, on or after the Redemption Date).
SECTION 5.14 WAIVER OF STAY OR EXTENSION LAWS. The Issuer covenants
(to the extent that it may lawfully do so) that it will not at any time
insist upon, or plead or in any manner whatsoever, claim or take the
benefit or advantage of, any stay or extension law wherever enacted, now or
at any time hereafter in force, that may affect the covenants or the
performance of this Indenture; and the Issuer (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any
such law, and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Indenture Trustee, but will
suffer and permit the execution of every such power as though no such law
had been enacted.
SECTION 5.15 ACTION ON NOTES. The Indenture Trustee's right to seek
and recover judgment on the Notes or under this Indenture shall not be
affected by the seeking, obtaining or application of any other relief under
or with respect to this Indenture. Neither the lien of this Indenture nor
any rights or remedies of the Indenture Trustee or the Noteholders shall be
impaired by the recovery of any judgment by the Indenture Trustee against
the Issuer or by the levy of any execution under such judgment upon any
portion of the Indenture Trust Estate or upon any of the assets of the
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Issuer. Any money or property collected by the Indenture Trustee shall be
applied in accordance with Section 5.4(b).
SECTION 5.16 PERFORMANCE AND ENFORCEMENT OF CERTAIN OBLIGATIONS.
(a) Promptly following a request from the Indenture Trustee to do so and at
the Administrator's expense, the Issuer shall take all such lawful action as the
Indenture Trustee may request to compel or secure the performance and observance
by the Seller, the Student Loan Marketing Association, the Administrator and the
Servicer, as applicable, of each of their obligations to the Issuer, whether
directly or by assignment, under or in connection with the Sale Agreement, the
Purchase Agreement, the Administration Agreement and the Servicing Agreement,
respectively, in accordance with the terms thereof, and to exercise any and all
rights, remedies, powers and privileges lawfully available to the Issuer under
or in connection with the Sale Agreement, the Purchase Agreement, the
Administration Agreement and the Servicing Agreement, as the case may be, to the
extent and in the manner directed by the Indenture Trustee, including the
transmission of notices of default on the part of the Seller, the Student Loan
Marketing Association, the Administrator or the Servicer thereunder and the
institution of legal or administrative actions or proceedings to compel or
secure performance by the Seller, the Student Loan Marketing Association, the
Administrator or the Servicer of each of their obligations under the Sale
Agreement, the Purchase Agreement, the Administration Agreement and the
Servicing Agreement, respectively.
(b) If an Event of Default has occurred and is continuing, the Indenture
Trustee may, and at the written direction of the Noteholders of 66-2/3% of the
Outstanding Amount of the Notes shall, exercise all rights, remedies, powers,
privileges and claims of the Issuer against the Seller, the Student Loan
Marketing Association, the Administrator or the Servicer under or in connection
with the Sale Agreement, the Purchase Agreement, the Administration Agreement
and the Servicing Agreement, respectively, including the right or power to take
any action to compel or secure performance or observance by the Seller, the
Student Loan Marketing Association, the Administrator or the Servicer of each of
their obligations to the Issuer thereunder, whether directly or by assignment,
and to give any consent, request, notice, direction, approval, extension or
waiver under the Sale Agreement, the Purchase Agreement, the Administration
Agreement and the Servicing Agreement, respectively, and any right of the Issuer
to take such action shall be suspended.
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ARTICLE VI
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 their exercise as a prudent person would exercise or use
under the circumstances in the conduct 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 no implied
covenants or obligations shall be read into this Indenture 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
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(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 pursuant to Section 5.11.
(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.
(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 or 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 in the Basic Documents, the Indenture
Trustee shall have no obligation to administer, service or collect the Trust
Student Loans or to maintain, monitor or otherwise supervise the administration,
servicing or collection of the Trust Student Loans.
(h) In the event that the Indenture Trustee is the Paying Agent or the 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 provisions of this Section and to the provisions of
the TIA.
SECTION 6.2 RIGHTS OF INDENTURE TRUSTEE. 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.
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(b) Before the Indenture Trustee acts or refrains from acting, it may
require and shall be entitled to receive an Officers' Certificate of the Issuer
and/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 Officers'
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.
(d) The Indenture Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers; PROVIDED, HOWEVER, that the Indenture Trustee's conduct does
not constitute willful misconduct, negligence or bad faith.
(e) The Indenture Trustee may consult with counsel, and the advice or
opinion of counsel with respect to legal matters relating to this Indenture and
the Notes shall be full and complete authorization and protection from liability
in respect to any action taken, omitted or suffered by it hereunder in good
faith and in accordance with the advice or opinion of such counsel.
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, it shall not be accountable for
the Issuer's use of the proceeds from the Notes, and it 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.
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SECTION 6.5 NOTICE OF DEFAULTS; SELLER INSOLVENCY. (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 and to each Rating Agency as soon
as practicable within 30 days after it occurs. Except in the case of a
Default in payment of principal of or interest on any Note (including
payments pursuant to the mandatory redemption provisions of such Note), the
Indenture Trustee may withhold the notice 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. Except as provided in the first
sentence of this Section 6.5(a), in no event shall the Indenture Trustee be
deemed to have knowledge of a Default or an Event of Default.
(b) If the Indenture Trustee receives notice from the Eligible Lender
Trustee of the occurrence of an Insolvency Event with respect to the Seller
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
Eligible Lender Trustee, sell the Trust Estate (other than the Trust Accounts)
in a commercially reasonable manner and on commercially reasonable terms. The
proceeds of any such sale shall be treated as collections under the
Administration Agreement.
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) such
information as may be required to enable such holder to prepare its Federal
and state income tax returns. Within 60 days after each December 31
beginning with the December 31 following the date of this Indenture, the
Indenture Trustee shall mail to each Noteholder a brief report as of such
December 31 that complies with TIA Section 313(a) if required by said
section. The Indenture Trustee shall also comply with TIA Section 313(b). A
copy of each such report required pursuant to TIA Section 313(a) or (b)
shall, at the time of such transaction to Noteholders, be filed by the
Indenture Trustee with the Commission and with each securities exchange, if
any, upon which the Notes are listed, provided that the Issuer has
previously notified the Indenture Trustee of such listing.
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SECTION 6.7 COMPENSATION AND INDEMNITY. The Issuer shall cause the
Seller to pay to the Indenture Trustee reasonable compensation for its
services in accordance with a separate agreement between the Seller and the
Indenture Trustee and shall cause the Seller to reimburse the Indenture
Trustee for all reasonable out-of-pocket expenses incurred or made by it as
provided in such separate agreement. The Indenture Trustee's compensation
shall not be limited by any law on compensation of a trustee of an express
trust. The Issuer shall cause the Administrator to indemnify the Indenture
Trustee and its directors, officers, employees and agents 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 under 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 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 in conducting the defense of
such claim, the Indenture Trustee shall be entitled to separate counsel
acceptable to it in its sole discretion the reasonable 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 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
specified in Section 5.1(iv) or (v) 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.
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
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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. The successor Indenture Trustee
shall give notice of its appointment as successor Indenture Trustee to the
Rating Agencies.
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.
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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 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
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 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 a 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 such appointment shall relieve the Indenture Trustee of its
obligations hereunder. 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
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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 that 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.
(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
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extent not prohibited by law, to do any lawful act under or in respect of this
Indenture on its 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) and the
requirements of an "eligible lender" under 20 USC Section1085(d). The Indenture
Trustee shall have a combined capital and surplus of at least $50,000,000 as set
forth in its most recent published annual report of condition and it shall have
a long-term senior unsecured debt rating of not less than investment grade by
each of the Rating Agencies. 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.
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.
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
SECTION 7.1 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
and (ii) three months after the last Record Date, a list, in such form as the
Indenture Trustee may reasonably require, of the names and addresses of the
Noteholders as of such Record Date, (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.
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SECTION 7.2 PRESERVATION OF INFORMATION; COMMUNICATIONS TO
NOTEHOLDERS. 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
7.1 and the names 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 7.1 upon receipt of a new list so
furnished.
(a) 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 holders of Notes evidencing 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 Administrator thereof by providing to the
Administrator a copy of such request and a copy of the list of Noteholders
produced in response thereto.
(b) The Issuer, the Indenture Trustee and the Note Registrar shall have the
protection of TIA Section 312(c).
(c) 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 to the Indenture Trustee on the related Determination Date
pursuant to Section 2.9 of the Administration Agreement.
(d) 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. The
Indenture Trustee shall furnish to the Noteholders promptly upon receipt thereof
from the Eligible Lender Trustee notice of any amendment of the Administration
Agreement pursuant to Section 8.5 of the Administration Agreement.
SECTION 7.3 REPORTS BY ISSUER. (a) 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 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 7.3(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.
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ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
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SECTION 8.1 COLLECTION OF MONEY. Except as otherwise expressly
provided herein, the Indenture Trustee may demand payment or delivery of, and
shall receive and collect, directly and without intervention or assistance of
any fiscal agent or other intermediary, all money and other property payable to
or receivable by the Indenture Trustee pursuant to this Indenture. The Indenture
Trustee shall apply all such money received by it on behalf of Noteholders
pursuant to the Administration Agreement as provided in this Indenture. Except
as otherwise expressly provided in this Indenture, if any default occurs in the
making of any payment or performance under any agreement or instrument that is
part of the Indenture Trust Estate, the Indenture Trustee may take such action
as may be appropriate to enforce such payment or performance, including the
institution and prosecution of appropriate Proceedings. Any such action shall be
without prejudice to any right to claim a Default under this Indenture and any
right to proceed thereafter as provided in Article V.
SECTION 8.2 TRUST ACCOUNTS. (a) On or prior to the Closing Date, the
Issuer shall cause the Administrator to establish and maintain, in the name of
the Indenture Trustee, for the benefit of the Noteholders and the
Certificateholders, the Trust Accounts as provided in Section 2.3 of the
Administration Agreement.
(b) On or before the Business Day preceding each Distribution Date, all
Available Funds with respect to the preceding Collection Period will be
deposited in the Collection Account as provided in Section 2.4 of the
Administration Agreement. On or before each Distribution Date, the Noteholders'
Distribution Amount with respect to the preceding Collection Period will be
distributed from the Collection Account and any other Trust Account to the
Indenture Trustee (or any other Paying Agent) on behalf of the Noteholders as
provided in Sections 2.7 and 2.8 of the Administration Agreement.
(c) On each Distribution Date and Redemption Date, the Indenture Trustee
(or any other Paying Agent) shall distribute all amounts received by it on
behalf of Noteholders pursuant to paragraph (b) above to Noteholders in respect
of the Notes to the extent of amounts payable on the Notes for principal and
interest in the following amounts and in the following order of priority (except
as otherwise provided in Section 5.4(b)):
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(i) the Noteholders' Interest Distribution Amount, to the Noteholders
in an amount equal to the accrued and unpaid interest on the Notes at the
respective Note Rates; PROVIDED that if there are not sufficient funds received
to pay the entire amount of accrued and unpaid interest then due on the Notes at
the respective Note Rates, the amounts so received shall be applied to the
payment of such interest on the Notes on a pro rata basis;
(ii) the Noteholders' Principal Distribution Amount, to the
Noteholders of the Class A-1 Notes until the Outstanding Amount of the Class A-1
Notes is reduced to zero; provided, that if there are not sufficient funds
received to pay the Outstanding Amount of the Class A-1 Notes, the amounts so
received shall be applied to the payment of principal on the Class A-1 Notes on
a pro rata basis; and
(iii) the Noteholders' Principal Distribution Amount, to the
Noteholders of the Class A-2 Notes until the Outstanding Amount of the Class A-2
Notes is reduced to zero; provided, that if there are not sufficient funds
received to pay the Outstanding Amount of the Class A-2 Notes, the amounts so
received shall be applied to the payment of principal on the Class A-2 Notes on
a pro rata basis.
SECTION 8.3 GENERAL PROVISIONS REGARDING ACCOUNTS. (a) So long as no
Default shall have occurred and be continuing, all or a portion of the funds in
the Trust Accounts shall be invested in Eligible Investments and reinvested by
the Indenture Trustee upon Issuer Order, subject to the provisions of Section
2.3B of the Administration Agreement. All income or other gain from investments
of moneys deposited in the Trust Accounts shall be deposited by the Indenture
Trustee in the Collection Account, and any loss resulting from such investments
shall be charged to such Trust Account. The Issuer will not direct the Indenture
Trustee to make any investment of any funds or to sell any investment held in
any of the Trust Accounts unless the security interest granted and perfected in
such account will continue to be perfected in such investment or the proceeds of
such sale, in either case without any further action by any Person, and, in
connection with any direction to the Indenture Trustee to make any such
investment or sale, if requested by the Indenture Trustee, the Issuer shall
deliver to the Indenture Trustee an Opinion of Counsel, acceptable to the
Indenture Trustee, to such effect.
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(b) Subject to Section 6.1(c), the Indenture Trustee shall not in any way
be held liable for the selection of Eligible Investments or by reason of any
insufficiency in any of the Trust Accounts resulting from any loss on any
Eligible Investment included therein except for losses attributable to the
Indenture Trustee's failure to make payments on such Eligible Investments issued
by the Indenture Trustee, in its commercial capacity as principal obligor and
not as trustee, in accordance with their terms.
(c) If (i) the Issuer shall have failed to give investment directions for
any funds on deposit in the Trust Accounts to the Indenture Trustee by 10:00
a.m. Eastern Time (or such other time as may be agreed by the Issuer and
Indenture Trustee) on any Business Day; or (ii) a Default shall have occurred
and be continuing with respect to the Notes but the Notes shall not have been
declared due and payable pursuant to Section 5.2, or, if such Notes shall have
been declared due and payable following an Event of Default, amounts collected
or receivable from the Indenture Trust Estate are being applied in accordance
with Section 5.5 as if there had not been such a declaration; then the Indenture
Trustee shall invest and reinvest funds in the Trust Accounts in the Eligible
Investments described in clause (d) of the definition thereof.
SECTION 8.4 RELEASE OF INDENTURE TRUST ESTATE. (a) Subject to the
payment of its fees and expenses pursuant to Section 6.7, the Indenture Trustee
may, and when required by the provisions of this Indenture shall, execute
instruments to release property from the lien of this Indenture, or convey the
Indenture Trustee's interest in the same, in a manner and under circumstances
that are not inconsistent with the provisions of this Indenture. No party
relying upon an instrument executed by the Indenture Trustee as provided in this
Article VIII 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 this Indenture and release to the Issuer or
any other Person entitled thereto any funds then on deposit in the Trust
Accounts. The Indenture Trustee shall release property from the lien of this
Indenture pursuant to this Section 8.4(b) only upon receipt of an Issuer Request
accompanied by an Officers' Certificate of the Issuer, an Opinion of Counsel and
(if required by the TIA) Independent Certificates in
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accordance with TIA Sections 314(c) and 314(d)(1) meeting the applicable
requirements of Section 11.1.
(c) Each Noteholder, by the acceptance of a Note, acknowledges that from
time to time the Indenture Trustee shall release the lien of this Indenture on
any Trust Student Loan to be sold to (i) the Seller in accordance with Section 6
of the Sale Agreement, (ii) to the Servicer in accordance with Section 3.5 of
the Servicing Agreement and (iii) to another eligible lender holding one or more
Serial Loans with respect to such Trust Student Loan, in accordance with Section
3.11E of the Servicing Agreement, and each Noteholder, by the acceptance of a
Note, consents to any such release.
SECTION 8.5 OPINION OF COUNSEL. The Indenture Trustee shall receive at
least seven days' notice when requested by the Issuer to take any action
pursuant to Section 8.4(a), accompanied by copies of any instruments involved,
and the Indenture Trustee shall also require, except in connection with any
action contemplated by Section 8.4(c), 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, 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.
ARTICLE IX
SUPPLEMENTAL INDENTURES
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SECTION 9.1 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF NOTEHOLDERS.
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:
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(i) to correct or amplify the description of any property at any time
subject to the lien of this Indenture, or better to assure, convey and confirm
unto the Indenture Trustee any property subject or required to be subjected to
the lien of this Indenture, or to subject to the lien of this Indenture
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, or to surrender any right or power herein conferred upon the
Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any property to
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 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;
(vi) to evidence and provide for the acceptance of the appointment
hereunder by a successor 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; or
(vii) 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, as evidenced by an Opinion of
Counsel, adversely affect in any material respect the interests of any
Noteholder.
SECTION 9.2 SUPPLEMENTAL INDENTURES WITH CONSENT OF NOTEHOLDERS. The
Issuer and the Indenture Trustee, when authorized by an Issuer Order, also may,
with prior notice to the Rating Agencies and with the consent of the Noteholders
of not less than a majority of the Outstanding Amount of the Notes, 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 or of modifying in any manner the rights of the Noteholders
under this Indenture; PROVIDED, HOWEVER, that no such supplemental indenture
shall, without the consent of the Noteholder 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, the interest rate
thereon or the Redemption Price with respect thereto, 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 V, to the
payment of any such amount due on the Notes on or after the respective due dates
thereof (or, in the case of redemption, on or after the Redemption Date);
(ii) reduce the percentage of the Outstanding Amount of the Notes, 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;
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(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
required to direct the Indenture Trustee to direct the Issuer to sell or
liquidate the Indenture Trust Estate pursuant to Section 5.4;
(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;
(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 (including the calculation of any of
the individual components of such calculation) or to affect the rights of the
Noteholders to the benefit of any provisions for the mandatory redemption of the
Notes contained herein; 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 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.
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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 of 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 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 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 may
be prepared and executed by the Issuer and authenticated and delivered by the
Indenture Trustee in exchange for Outstanding Notes.
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ARTICLE X
REDEMPTION OF NOTES
-------------------
SECTION 10.1 REDEMPTION. The Indenture Trustee shall, upon receipt of
written notice from the Eligible Lender Trustee or the Depositor pursuant to
Section 9.2 of the Trust Agreement of an Insolvency Event with respect to the
Depositor, give prompt written notice to the Noteholders of the occurrence of
such event. In the event that the assets of the Trust are sold pursuant to
Section 9.2 of the Trust Agreement, that portion of the amounts on deposit in
the Trust Accounts to be distributed to the Noteholders shall be paid to the
Noteholders up to the Outstanding Amount of the Notes and all accrued and unpaid
interest thereon (but only to the extent provided by Sections 2.7(d) and
8.2(c)). If amounts are to be paid to Noteholders pursuant to this Section 10.1,
the notice of such event from the Indenture Trustee to the Noteholders shall
include notice of the redemption of Notes by application of such amounts on the
next Distribution Date which is not sooner than 15 days after the date of such
notice (the "Redemption Date"), whereupon all such amounts shall be payable on
the Redemption Date.
SECTION 10.2 FORM OF REDEMPTION NOTICE. Notice of redemption under
Section 10.1 shall be given by the Indenture Trustee by first-class mail,
postage prepaid, or by facsimile, mailed or transmitted on or prior to the
applicable Redemption Date to each Noteholder, as of the close of business on
the Record Date preceding the applicable Redemption Date, at such Noteholder's
address or facsimile number appearing in the Note Register.
All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price; and
(iii) the place were such Notes are to be surrendered for payment of
the Redemption Price (which shall be the office or agency of the Issuer to be
maintained as provided in Section 3.2).
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Notice of redemption of the Notes shall be given by the Indenture
Trustee in the name and at the expense of the Issuer. Failure to give notice of
redemption, or any defect therein, to any Noteholder of any Note shall not
impair or affect the validity of the redemption of any other Note.
SECTION 10.3 NOTES PAYABLE ON REDEMPTION DATE. The Notes or portions
thereof to be redeemed shall on the Redemption Date become due and payable at
the Redemption Price and (unless the Issuer shall default in the payment of the
Redemption Price) no interest shall accrue on the Redemption Price for any
period after the date to which accrued interest is calculated for purposes of
calculating the Redemption Price.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1 COMPLIANCE CERTIFICATES AND OPINIONS, ETC. 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 and the Rating Agencies (i) an Officers' 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, (ii) an Opinion of
Counsel stating that in the opinion of such counsel all such conditions
precedent, if any, have been complied with and (iii) (if required by the TIA) 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 each signatory of such certificate or opinion has
read or has caused to be read such covenant or condition and the definitions
herein relating thereto;
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(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) Prior to the deposit of any Collateral or other property or
securities with the Indenture Trustee that is to be made the basis for the
release of any property or securities subject to the lien of this Indenture, the
Issuer shall, in addition to any obligation imposed in Section 11.1(a) or
elsewhere in this Indenture, furnish to the Indenture Trustee and the Rating
Agencies an Officers' Certificate of the Issuer certifying or stating the
opinion of each person signing such certificate as to the fair value (within 90
days of such deposit) to the Issuer of the Collateral or other property or
securities to be so deposited.
(ii) Whenever the Issuer is required to furnish to the Indenture
Trustee and the Rating Agencies an Officers' Certificate of the Issuer
certifying or stating the opinion of any signer thereof as to the matters
described in clause (i) above, the Issuer shall also deliver to the Indenture
Trustee an Independent Certificate as to the same matters, if the fair value to
the Issuer of the securities to be so deposited and of all other such securities
made the basis of any such withdrawal or release since the commencement of the
then-current fiscal year of the Issuer, as set forth in the certificates
delivered pursuant to clause (i) above and this clause (ii), is 10% or more of
the Outstanding Amount of the Notes, but such a certificate need not be
furnished with respect to any securities so deposited, if the fair value thereof
to the Issuer as set forth in the related Officers' Certificate is less than
$25,000 or less than one percent of the Outstanding Amount of the Notes.
(iii) Other than any property released as contemplated by clause (v)
below, whenever any property or securities are to be released from the lien of
this Indenture, the Issuer shall also furnish to the Indenture Trustee an
Officers' Certificate
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of the Issuer certifying or stating the opinion of each person signing such
certificate as to the fair value (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.
(iv) Whenever the Issuer is required to furnish to the Indenture
Trustee an Officers' Certificate of the Issuer certifying or stating the opinion
of any signer thereof as to the matters described in clause (iii) 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 (v) below, or
securities released from the lien of this Indenture since the commencement of
the then-current calendar year, as set forth in the certificates required by
clause (iii) above and this clause (iv), 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 Officers' Certificate is less than $25,000 or less than one percent
of the then Outstanding Amount of the Notes.
(v) Notwithstanding Section 2.9 or any other provision of this
Section, the Issuer may, without compliance with the requirements of the other
provisions of this Section, (A) collect, liquidate, sell or otherwise dispose of
Trust Student Loans as and to the extent permitted or required by the Basic
Documents, (B) make cash payments out of the Trust Accounts as and to the extent
permitted or required by the Basic Documents and (C) convey to the Seller, the
Servicer or another eligible lender those specified Trust Student Loans as and
to the extent permitted or required by and in accordance with Section 8.4(c)
hereof and Section 6 of the Sale Agreement, Section 3.5 of the Servicing
Agreement or Section 3.11E of the Servicing Agreement, respectively, so long as
the Issuer shall deliver to the Indenture Trustee every six months, commencing
October 25, 2000, an Officers' Certificate of the Issuer stating that all the
dispositions of Collateral described in clauses (A), (B) or (C) above that
occurred during the immediately preceding six calendar months were in the
ordinary course of the Issuer's business and that the proceeds thereof were
applied in accordance with the Basic Documents.
SECTION 11.2 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
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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.
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 11.3 ACTS OF NOTEHOLDERS. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Noteholders may be embodied in and
evidenced by one or
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more instruments of substantially similar tenor signed by such Noteholders in
person or by agents duly appointed in writing; and except as herein otherwise
expressly provided such action shall become effective when such instrument or
instruments are delivered to the Indenture Trustee, and, where it is hereby
expressly required, to the Issuer. Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein sometimes referred to
as the "Act" of the Noteholders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent shall
be sufficient for any purpose of this Indenture and (subject to Section 6.1)
conclusive in favor of the Indenture Trustee and the Issuer, if made in the
manner provided in this Section.
(b) The fact and date of the execution by any person of any such instrument
or writing may be proved in any manner that the Indenture Trustee deems
sufficient.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other action by the Noteholder of any Notes shall bind the Noteholder of
every Note issued upon registration of transfer thereof or in exchange therefor
or in lieu thereof, in respect of anything done, omitted or suffered to be done
by the Indenture Trustee or the Issuer in reliance thereon, whether or not
notation of such action is made upon such Note.
SECTION 11.4 NOTICES, ETC., TO INDENTURE TRUSTEE, ISSUER AND RATING
AGENCIES. Any request, demand, authorization, direction, notice, consent, waiver
or Act of Noteholders or other documents provided or permitted by this Indenture
shall be in writing and if such request, demand, authorization, direction,
notice, consent, waiver or Act of Noteholders is to be made upon, given or
furnished to or filed with:
(a) The Indenture Trustee by any Noteholder, the Servicer, the
Administrator or by the Issuer shall be sufficient for every purpose hereunder
if made, given, furnished or filed in writing to or with the Indenture Trustee
at its Corporate Trust Office, or
(b) The Issuer by the Indenture Trustee or by any Noteholder shall be
sufficient for every purpose hereunder if in writing and mailed, first-class,
postage prepaid, to the Issuer addressed to: SLM Student Loan Trust 2000-1, in
care of Chase Manhattan
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Bank Delaware, 1201 Market Street, Wilmington, Delaware 19801-1167, Attention:
Corporate Trust Department; with copies to The Chase Manhattan Bank, 450 West
33rd Street 15th Fl., New York, New York 10001, Attention: Structured Finance
Services; 11600 Sallie Mae Drive, Reston, VA 20193, Attention: Director,
Corporate Finance Operations, or any other address previously furnished in
writing to the Indenture Trustee by the Issuer or the Administrator. The Issuer
shall promptly transmit any notice received by it from the Noteholders to the
Indenture Trustee.
Notices required to be given to the Rating Agencies by the Issuer, the
Indenture Trustee or the Eligible Lender Trustee 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, ABS Monitoring Department,
99 Church Street, New York, New York 10007, (ii) in the case of Standard &
Poor's, at the following address: Standard & Poor's, 55 Water Street, New York,
New York 10041-0003, Attention of Asset Backed Surveillance Department, and
(iii) in the case of Fitch, at the following address: One State Street Plaza,
New York, New York 10004, Attention Municipal Structured Finance Group; or as to
each of the foregoing, at such other address as shall be designated by written
notice to the other parties.
SECTION 11.5 NOTICES TO NOTEHOLDERS; WAIVER. 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.
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In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity, it shall be impractical
to mail notice of any event to Noteholders when such notice is required to be
given pursuant to any provision of this Indenture, then any manner of giving
such notice as shall be satisfactory to the Indenture Trustee shall be deemed to
be a sufficient giving of such notice.
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 a Default.
SECTION 11.6 ALTERNATE PAYMENT AND NOTICE PROVISIONS. Notwithstanding
any provision of this Indenture or any of the Notes to the contrary, the Issuer
may enter into any agreement with any Noteholder providing for a method of
payment, or notice by the Indenture Trustee or any Paying Agent to such
Noteholder, that is different from the methods provided for in this Indenture
for such payments or notices. The Issuer will furnish to the Indenture Trustee a
copy of each such agreement and the Indenture Trustee will cause payments to be
made and notices to be given in accordance with such agreements.
SECTION 11.7 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 Trust
Indenture Act, such required provision shall control.
The provisions of TIA Sections 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 11.8 EFFECT OF HEADINGS AND TABLE OF CONTENTS. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
SECTION 11.9 SUCCESSORS AND ASSIGNS. All covenants and agreements in
this Indenture and the Notes by the Issuer shall bind its successor and assigns,
whether so expressed or not. All agreements of the Indenture Trustee in this
Indenture
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shall bind the successors, co-trustees and agents (excluding any legal
representatives or accountants) of the Indenture Trustee.
SECTION 11.10 SEPARABILITY. In case any provision in this Indenture or
in the Notes shall be invalid, illegal or unenforceable, the validity, legality,
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
SECTION 11.11 BENEFITS OF INDENTURE. Nothing in this Indenture or in
the Notes, express or implied, shall give to any Person, other than the parties
hereto and their successors hereunder, and the Noteholders, and any other party
secured hereunder, and any other Person with an ownership interest in any part
of the Indenture Trust Estate, any benefit or any legal or equitable right,
remedy or claim under this Indenture.
SECTION 11.12 LEGAL HOLIDAYS. In any case where the date on which any
payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Notes or this Indenture) payment 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 on which nominally due, and no interest shall
accrue for the period from and after any such nominal date.
SECTION 11.13 GOVERNING LAW. This Indenture shall be construed in
accordance with the laws of the State of New York, without reference to its
conflict of law provisions (other than Section 5-1401 of the New York General
Obligations Law), and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws.
SECTION 11.14 COUNTERPARTS. This Indenture may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
SECTION 11.15 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 expense accompanied by an Opinion of Counsel
(which may be counsel to the Indenture Trustee or any other counsel reasonably
acceptable to the Indenture Trustee) to the effect that such recording is
necessary either for the protection
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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 11.16 TRUST OBLIGATIONS. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Seller, the
Administrator, the Servicer, the Eligible Lender 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 Eligible Lender Trustee in its individual capacity, (ii) any owner of a
beneficial interest in the Issuer or (iii) any partner, owner, beneficiary,
agent, officer, director or employee of the Indenture Trustee or the Eligible
Lender Trustee in its individual capacity, any holder or owner of a beneficial
interest in the Issuer, the Eligible Lender Trustee or the Indenture Trustee or
of any successor or assign thereof in its individual capacity, except as any
such Person may have expressly agreed (it being understood that the Indenture
Trustee and the Eligible Lender 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. For all purposes of this Indenture, in
the performance of any duties or obligations of the Issuer hereunder, the
Eligible Lender Trustee shall be subject to, and entitled to the benefits of,
the terms and provisions of Article VI, VII and VIII of the Trust Agreement.
SECTION 11.17 NO PETITION. The Indenture Trustee, by entering into
this Indenture, and each Noteholder, by accepting a Note, hereby covenant and
agree that they shall 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. The foregoing shall
not limit the rights of the Indenture Trustee to file any claim in, or otherwise
take any action with respect to, any insolvency proceeding that was instituted
against the Issuer by any Person other than the Indenture Trustee.
SECTION 11.18 INSPECTION. The Issuer agrees that, on reasonable prior
notice, it shall permit any representative of the Indenture Trustee, during the
Issuer's normal business hours, to examine all the books of account, records,
reports, and other papers of the Issuer, to make copies and extracts therefrom,
to cause such books to be audited
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by Independent certified public accountants, and to discuss the Issuer's
affairs, finances and accounts with the Issuer's officers, employees, and
Independent certified public accountants, all at such reasonable times and as
often as may be reasonably requested. The Indenture Trustee shall and shall
cause its representatives to hold in confidence all such information obtained
from such examination or inspection except to the extent disclosure may be
required by law (and all reasonable applications for confidential treatment are
unavailing) and except to the extent that the Indenture Trustee may reasonably
determine that such disclosure is consistent with its obligations hereunder.
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IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused
this Indenture to be duly executed by their respective officers, thereunto duly
authorized and duly attested, all as of the day and year first above written.
SLM STUDENT LOAN TRUST 2000-1,
By CHASE MANHATTAN BANK DELAWARE, not in its
individual capacity but solely as Eligible Lender Trustee,
By: /S/ JOHN J. CASHIN
------------------
Name: John J. Cashin
Title: Vice President
CHASE MANHATTAN BANK DELAWARE, not in its individual
capacity but solely as Eligible Lender Trustee,
By: /S/ JOHN J. CASHIN
------------------
Name: John J. Cashin
Title: Vice President
BANKERS TRUST COMPANY, not in its individual
capacity but solely as Indenture Trustee,
By: /S/ PATRICIA M. F. RUSSO
------------------------
Name: Patricia M. F. Russo
Title: Vice President
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APPENDIX A
TO THE INDENTURE
DEFINITIONS AND USAGE
---------------------
72
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SCHEDULE A
TO THE INDENTURE
SCHEDULE OF TRUST STUDENT LOANS
-------------------------------
[See Schedule A to the Bill of Sale
(Attachment B to the Sale Agreement)]
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SCHEDULE B
TO THE INDENTURE
LOCATION OF TRUST STUDENT LOAN FILES
------------------------------------
[See Attachment B to the Servicing Agreement]
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EXHIBIT A-1
TO THE INDENTURE
[FORM OF CLASS A-1 NOTE]
SEE REVERSE FOR CERTAIN DEFINITIONS
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.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET
FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY
TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF. THIS NOTE IS NOT
GUARANTEED OR INSURED BY ANY GOVERNMENTAL AGENCY.
NUMBER [Note Face Amount]
R-1 CUSIP NO. [CUSIP #]
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<PAGE>
SLM STUDENT LOAN TRUST [Trust Name}
FLOATING RATE CLASS A-1 STUDENT LOAN-BACKED NOTES
SLM Student Loan Trust [Trust Name], a business trust
organized and existing under the laws of the State of Delaware (herein referred
to as the "Issuer"), for value received, hereby promises to pay to CEDE & CO.,
or registered assigns, the principal sum of [Note Face Amount] DOLLARS payable
on each Distribution Date in an amount equal to the result obtained by
multiplying (i) a fraction the numerator of which is [Note Face Amount] and the
denominator of which is [Total Class A-1 Note Amount] by (ii) the aggregate
amount, if any, payable to Class A-1 Noteholders on such Distribution Date in
respect of principal of the Notes pursuant to Section 3.1 of the Indenture dated
as of [Indenture Date], among the Issuer, Chase Manhattan Bank Delaware, a
Delaware banking corporation, as Eligible Lender Trustee on behalf of the
Issuer, and Bankers Trust Company, a New York banking corporation, as Indenture
Trustee (the "Indenture Trustee") (capitalized terms used but not defined herein
being defined in Appendix A to the Indenture, which also contains rules as to
usage that shall be applicable herein); PROVIDED, HOWEVER, that the entire
unpaid principal amount of this Note shall be due and payable on the [Final
Class A-1 Distribution Date] (the "Class A-1 Maturity Date").
The Issuer shall pay interest on this Note at the rate per
annum equal to the Class A-1 Rate (as defined on the reverse hereof), on each
Distribution Date until the principal of this Note is paid or made available for
payment, on the principal amount of this Note outstanding on the preceding
Distribution Date (after giving effect to all payments of principal made on the
preceding Distribution Date), subject to certain limitations contained in
Section 3.1 of the Indenture. Interest on this Note shall accrue from and
including the preceding Distribution Date (or, in the case of the first Accrual
Period, the Closing Date) to but excluding the following Distribution Date (each
an "Accrual Period"). Interest shall be calculated on the basis of the actual
number of days elapsed in each Accrual Period divided by 360. Such principal of
and interest on this Note shall be paid in the manner specified on the reverse
hereof.
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<PAGE>
The principal of and interest on this Note are payable in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of this
Note.
Reference is made to the further provisions of this Note set
forth on the reverse hereof, which shall have the same effect as though fully
set forth on the face of this Note.
Unless the certificate of authentication hereon has been
executed by the Indenture Trustee whose name appears below by manual signature,
this Note shall not be entitled to any benefit under the Indenture referred to
on the reverse hereof, or be valid or obligatory for any purpose.
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<PAGE>
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its Floating Rate Class A-1 Student Loan-Backed Notes (the
"Class A-1 Notes"), which, together with the Issuer's Floating Rate Class A-2
Student Loan-Backed Notes (the "Class A-2 Notes" and, together with the Class
A-1 Notes, the "Notes") are issued under and secured by the Indenture, to which
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights and obligations thereunder of the Issuer, the
Indenture Trustee and the Noteholders. The Notes are subject to all terms of the
Indenture.
The Class A-1 Notes are and will be equally and ratably
secured by the Collateral pledged as security therefor as provided in the
Indenture. The Class A-1 Notes are senior in right of payment to the Class A-2
Notes as and to the extent provided in the Indenture.
Principal of the Class A-1 Notes shall be payable on each
Distribution Date in an amount described on the face hereof. "Distribution Date"
means the 25th day of each January, April, July and October or, if any such date
is not a Business Day, the next succeeding Business Day, commencing [initial
Distribution Date].
As described on the face hereof, the entire unpaid principal
amount of this Note shall be due and payable on the Class A-1 Maturity Date.
Notwithstanding the foregoing, the entire unpaid principal amount of the Notes
shall be due and payable on the date on which (i) an Event of Default shall have
occurred and be continuing and (ii) the Indenture Trustee or the Noteholders
representing not less than a majority of the Outstanding Amount of the Notes
shall have declared the Notes to be immediately due and payable in the manner
provided in Section 5.2 of the Indenture. All principal payments on the Class
A-1 Notes shall be made pro rata to the Noteholders entitled thereto.
Interest on the Class A-1 Notes shall be payable on each
Distribution Date on the principal amount outstanding of the Class A-1 Notes
until the principal amount thereof is paid in full, at a rate per annum equal to
the Class A-1 Rate. The "Class A-1 Rate" for each Accrual Period shall be equal
to, in the case of T-Bill Rate denominated Notes, the daily weighted average of
the T-Bill Rates within that Accrual Period plus [specified percentage points],
and, in the case of LIBOR denominated
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Notes, Three-Month [or such other designated maturity, as necessary, for the
initial Accrual Period] LIBOR as determined on the second business day before
the beginning of that Accrual Period plus [specified percentage points]%.
Payments of interest on this Note on each Distribution Date,
together with the installment of principal, if any, to the extent not in full
payment of this Note, shall be made by check mailed to the Person whose name
appears as the Registered Holder of this Note (or one or more Predecessor Notes)
on the Note Register on the Record Date, except that with respect to Notes
registered on the Record Date in the name of the nominee of the Clearing Agency,
unless Definitive Notes have been issued (initially, such nominee to be Cede &
Co.), payments shall be made by wire transfer in immediately available funds to
the account designated by such nominee. Such checks shall be mailed to the
Person entitled thereto at the address of such Person as it appears on the Note
Register as of the applicable Record Date without requiring that this Note be
submitted for notation of payment, and the mailing of such check shall
constitute payment of the amount thereof regardless of whether such check is
returned undelivered. Any reduction in the principal amount of this Note (or any
one or more Predecessor Notes) effected by any payments made on any Distribution
Date shall be binding upon all future Noteholders of this Note and of any Note
issued upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not noted hereon. If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Distribution Date, then the Indenture
Trustee, in the name of and on behalf of the Issuer, shall notify the Person who
was the Noteholder hereof as of the preceding Record Date by notice mailed no
later than five days prior to such Distribution Date and the amount then due and
payable shall be payable only upon presentation and surrender of this Note at
the Indenture Trustee's Corporate Trust Office or at the office of the Indenture
Trustee's agent appointed for such purposes located in the Borough of Manhattan,
The City of New York.
The Issuer shall pay interest on overdue installments of
interest on this Note at the Class A-1 Rate to the extent lawful.
As provided in the Indenture and subject to certain
limitations set forth therein, the transfer of this Note may be registered on
the Note Register upon surrender of this Note for registration of transfer at
the office or agency designated by the Issuer
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pursuant to the Indenture, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Indenture Trustee duly
executed by, the Noteholder hereof or his attorney duly authorized in writing,
with such signature guaranteed by an "eligible guarantor institution" meeting
the requirements of the Note Registrar, which requirements include membership or
participation in Securities Transfer Agent's Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Note Registrar
in addition to, or in substitution for, STAMP (all in accordance with the
Exchange Act), and such other documents as the Indenture Trustee may require,
and thereupon one or more new Notes of authorized denominations and in the same
aggregate principal amount shall be issued to the designated transferee or
transferees. No service charge will be charged for any registration of transfer
or exchange of this Note, but the transferor may be required to pay a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any such registration of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in
the case of a Note Owner, a beneficial interest in the Note, covenants and
agrees that no recourse may be taken, directly or indirectly, with respect to
the obligations of the Issuer or the Indenture Trustee on the Notes or under the
Indenture or any certificate or other writing delivered in connection therewith,
against (i) the Indenture Trustee or the Eligible Lender Trustee in its
individual capacity, (ii) any owner of a beneficial interest in the Issuer or
(iii) any partner, owner, beneficiary, agent, officer, director or employee of
the Indenture Trustee or the Eligible Lender Trustee in its individual capacity,
any holder or owner of a beneficial interest in the Issuer, the Eligible Lender
Trustee or the Indenture Trustee or of any successor or assign thereof in its
individual capacity, except as any such Person may have expressly agreed (it
being understood that the Indenture Trustee and the Eligible Lender 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.
Each Noteholder or Note Owner, by acceptance of a Note or, in
the case of a Note Owner, a beneficial interest in a Note, covenants and agrees
that by accepting the benefits of the Indenture such Noteholder or Note Owner
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
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bankruptcy or similar law in connection with any obligations relating to the
Notes, the Indenture or the other Basic Documents.
Prior to the due presentment for registration of transfer of
this Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes whether or not this Note be
overdue, and neither the Issuer, the Indenture Trustee nor any such agent shall
be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the rights of the Noteholders under the Indenture
at any time by the Issuer with the consent of the Noteholders representing a
majority of the Outstanding Amount of all Notes at the time outstanding. The
Indenture also contains provisions permitting the Noteholders representing
specified percentages of the Outstanding Amount of the Notes, on behalf of all
the Noteholders, to waive compliance by the Issuer with certain provisions of
the Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the holder of this Note (or any one
of more Predecessor Notes) shall be conclusive and binding upon such holder and
upon all future holders of this Note and of any Note issued upon registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Note. The Indenture also permits the
Indenture Trustee to amend or waive certain terms and conditions set forth in
the Indenture without the consent of holders of the Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor
to the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Indenture
Trustee and the Noteholders under the Indenture.
The Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.
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<PAGE>
This Note shall be construed in accordance with the laws of
the State of New York, without reference to its conflict of law provisions, and
the obligations, rights and remedies of the parties hereunder and thereunder
shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair the obligation of the Issuer,
which is absolute and unconditional, to pay the principal of and interest on
this Note at the times, place, and rate, and in the coin or currency, herein
prescribed.
Anything herein to the contrary notwithstanding, except as
expressly provided in the Basic Documents, neither Bankers Trust Company in its
individual capacity, Chase Manhattan Bank Delaware in its individual capacity,
any owner of a beneficial interest in the Issuer, nor any of their respective
partners, beneficiaries, agents, officers, directors, employees or successors or
assigns shall be personally liable for, nor shall recourse be had to any of them
for, the payment of principal of or interest on, or performance of, or omission
to perform, any of the covenants, obligations or indemnifications contained in
this Note or the Indenture; it being expressly understood that said covenants,
obligations and indemnifications have been made by the Eligible Lender Trustee
for the sole purposes of binding the interests of the Eligible Lender Trustee in
the assets of the Issuer. The Noteholder of this Note by the acceptance hereof
agrees that, except as expressly provided in the Basic Documents, in the case of
an Event of Default under the Indenture, the Noteholder shall have no claim
against any of the foregoing for any deficiency, loss or claim therefrom;
PROVIDED, HOWEVER, that nothing contained herein shall be taken to prevent
recourse to, and enforcement against, the assets of the Issuer for any and all
liabilities, obligations and undertakings contained in the Indenture or in this
Note.
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ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
- ------------------------------------------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
- -------------------------------------------------------------------------------
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints
--------------------------------------------------------------------
attorney, to transfer said Note on the books kept for registration thereof, with
full power of substitution in the premises.
Dated:
------------------------------------
*/
-----------------------
Signature Guaranteed:
*/
-----------------------
- -----------------
*/ NOTICE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in STAMP or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.
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<PAGE>
EXHIBIT A-2
TO THE INDENTURE
[FORM OF CLASS A-2 NOTE]
SEE REVERSE FOR CERTAIN DEFINITIONS
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.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET
FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY
TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF. THIS NOTE IS NOT
GUARANTEED OR INSURED BY ANY GOVERNMENTAL AGENCY.
NUMBER [Note Face Amount]
R-1 CUSIP NO. [CUSIP #]
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<PAGE>
SLM STUDENT LOAN TRUST [Trust Name]
FLOATING RATE CLASS A-2 STUDENT LOAN-BACKED NOTES
SLM Student Loan Trust [Trust Name], a business trust
organized and existing under the laws of the State of Delaware (herein referred
to as the "Issuer"), for value received, hereby promises to pay to CEDE & CO.,
or registered assigns, the principal sum of [Note Face Amount] DOLLARS payable
on each Distribution Date in an amount equal to the result obtained by
multiplying (i) a fraction the numerator of which is [Note Face Amount] and the
denominator of which is $[Total Class A-2 Note Amount] by (ii) the aggregate
amount, if any, payable to Class A-2 Noteholders on such Distribution Date in
respect of principal of the Notes pursuant to Section 3.1 of the Indenture dated
as of [Indenture Date], among the Issuer, Chase Manhattan Bank Delaware, a
Delaware banking corporation, as Eligible Lender Trustee on behalf of the
Issuer, and Bankers Trust Company, a New York banking corporation, as Indenture
Trustee (the "Indenture Trustee") (capitalized terms used but not defined herein
being defined in Appendix A to the Indenture, which also contains rules as to
usage that shall be applicable herein); PROVIDED, HOWEVER, that the entire
unpaid principal amount of this Note shall be due and payable on the [Final
Class A-2 Distribution Date] (the "Class A-2 Maturity Date").
The Issuer shall pay interest on this Note at the rate per
annum equal to the Class A-2 Rate (as defined on the reverse hereof), on each
Distribution Date until the principal of this Note is paid or made available for
payment, on the principal amount of this Note outstanding on the preceding
Distribution Date (after giving effect to all payments of principal made on the
preceding Distribution Date), subject to certain limitations contained in
Section 3.1 of the Indenture. Interest on this Note shall accrue from and
including the preceding Distribution Date (or, in the case of the first Accrual
Period, the Closing Date) to but excluding the following Distribution Date (each
an "Accrual Period"). Interest shall be calculated on the basis of the actual
number of days elapsed in each Accrual Period divided by 360. Such principal of
and interest on this Note shall be paid in the manner specified on the reverse
hereof.
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The principal of and interest on this Note are payable in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of this
Note.
Reference is made to the further provisions of this Note set
forth on the reverse hereof, which shall have the same effect as though fully
set forth on the face of this Note.
Unless the certificate of authentication hereon has been
executed by the Indenture Trustee whose name appears below by manual signature,
this Note shall not be entitled to any benefit under the Indenture referred to
on the reverse hereof, or be valid or obligatory for any purpose.
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IN WITNESS WHEREOF, the Issuer has caused this instrument to
be duly executed, manually or in facsimile, as of the date set forth below.
SLM STUDENT LOAN TRUST [Trust Name]
By CHASE MANHATTAN BANK DELAWARE, not
in its individual capacity but
solely as Eligible Lender Trustee
under the Trust Agreement,
By:
----------------------------------
Authorized Signatory
Date: [Closing Date]
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in
the within-mentioned Indenture.
BANKERS TRUST COMPANY, not in its indi-
vidual capacity but solely as
Indenture Trustee,
By:
---------------------------------
Authorized Signatory
Date: [Closing Date]
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[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its Floating Rate Class A-2 Student Loan-Backed Notes (the
"Class A-2 Notes"), which, together with the Issuer's Floating Rate Class A-1
Student Loan-Backed Notes (the "Class A-1 Notes" and, together with the Class
A-2 Notes, the "Notes") are issued under and secured by the Indenture, to which
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights and obligations thereunder of the Issuer, the
Indenture Trustee and the Noteholders. The Notes are subject to all terms of the
Indenture.
The Class A-2 Notes are and will be equally and ratably
secured by the Collateral pledged as security therefor as provided in the
Indenture. The Class A-1 Notes are senior in right of payment to the Class A-2
Notes as and to the extent provided in the Indenture.
Principal of the Class A-2 Notes shall be payable on each
Distribution Date in an amount described on the face hereof. "Distribution Date"
means the 25th day of each January, April, July and October or, if any such date
is not a Business Day, the next succeeding Business Day, commencing [initial
Distribution Date].
As described on the face hereof, the entire unpaid principal
amount of this Note shall be due and payable on the Class A-2 Maturity Date.
Notwithstanding the foregoing, the entire unpaid principal amount of the Notes
shall be due and payable on the date on which (i) an Event of Default shall have
occurred and be continuing and (ii) the Indenture Trustee or the Noteholders
representing not less than a majority of the Outstanding Amount of the Notes
shall have declared the Notes to be immediately due and payable in the manner
provided in Section 5.2 of the Indenture. All principal payments on the Class
A-2 Notes shall be made pro rata to the Noteholders entitled thereto.
Interest on the Class A-2 Notes shall be payable on each
Distribution Date on the principal amount outstanding of the Class A-2 Notes
until the principal amount thereof is paid in full, at a rate per annum equal to
the Class A-2 Rate. The "Class A-2 Rate" for each Accrual Period shall be equal
to, in the case of T-Bill Rate denominated Notes, the daily weighted average of
the T-Bill Rates within that
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Accrual Period plus [specified percentage points], and, in the case of LIBOR
denominated Notes, Three-Month [or such other designated maturity, as necessary,
for the initial Accrual Period] LIBOR as determined on the second business day
before the beginning of that Accrual Period plus [specified percentage points]%.
Payments of interest on this Note on each Distribution Date,
together with the installment of principal, if any, to the extent not in full
payment of this Note, shall be made by check mailed to the Person whose name
appears as the Registered Holder of this Note (or one or more Predecessor Notes)
on the Note Register on the Record Date, except that with respect to Notes
registered on the Record Date in the name of the nominee of the Clearing Agency,
unless Definitive Notes have been issued (initially, such nominee to be Cede &
Co.), payments shall be made by wire transfer in immediately available funds to
the account designated by such nominee. Such checks shall be mailed to the
Person entitled thereto at the address of such Person as it appears on the Note
Register as of the applicable Record Date without requiring that this Note be
submitted for notation of payment, and the mailing of such check shall
constitute payment of the amount thereof regardless of whether such check is
returned undelivered. Any reduction in the principal amount of this Note (or any
one or more Predecessor Notes) effected by any payments made on any Distribution
Date shall be binding upon all future Noteholders of this Note and of any Note
issued upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not noted hereon. If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Distribution Date, then the Indenture
Trustee, in the name of and on behalf of the Issuer, shall notify the Person who
was the Noteholder hereof as of the preceding Record Date by notice mailed no
later than five days prior to such Distribution Date and the amount then due and
payable shall be payable only upon presentation and surrender of this Note at
the Indenture Trustee's Corporate Trust Office or at the office of the Indenture
Trustee's agent appointed for such purposes located in the Borough of Manhattan,
The City of New York.
The Issuer shall pay interest on overdue installments of
interest on this Note at the Class A-2 Rate to the extent lawful.
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<PAGE>
As provided in the Indenture and subject to certain
limitations set forth therein, the transfer of this Note may be registered on
the Note Register upon surrender of this Note for registration of transfer at
the office or agency designated by the Issuer pursuant to the Indenture, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Indenture Trustee duly executed by, the Noteholder hereof or
his attorney duly authorized in writing, with such signature guaranteed by an
"eligible guarantor institution" meeting the requirements of the Note Registrar,
which requirements include membership or participation in Securities Transfer
Agent's Medallion Program ("STAMP") or such other "signature guarantee program"
as may be determined by the Note Registrar in addition to, or in substitution
for, STAMP (all in accordance with the Exchange Act), and such other documents
as the Indenture Trustee may require, and thereupon one or more new Notes of
authorized denominations and in the same aggregate principal amount shall be
issued to the designated transferee or transferees. No service charge will be
charged for any registration of transfer or exchange of this Note, but the
transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such registration
of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in
the case of a Note Owner, a beneficial interest in the Note, covenants and
agrees that no recourse may be taken, directly or indirectly, with respect to
the obligations of the Issuer or the Indenture Trustee on the Notes or under the
Indenture or any certificate or other writing delivered in connection therewith,
against (i) the Indenture Trustee or the Eligible Lender Trustee in its
individual capacity, (ii) any owner of a beneficial interest in the Issuer or
(iii) any partner, owner, beneficiary, agent, officer, director or employee of
the Indenture Trustee or the Eligible Lender Trustee in its individual capacity,
any holder or owner of a beneficial interest in the Issuer, the Eligible Lender
Trustee or the Indenture Trustee or of any successor or assign thereof in its
individual capacity, except as any such Person may have expressly agreed (it
being understood that the Indenture Trustee and the Eligible Lender 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.
90
<PAGE>
Each Noteholder or Note Owner, by acceptance of a Note or, in
the case of a Note Owner, a beneficial interest in a Note, covenants and agrees
that by accepting the benefits of the Indenture such Noteholder or Note Owner
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, the Indenture or the
other Basic Documents.
Prior to the due presentment for registration of transfer of
this Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes whether or not this Note be
overdue, and neither the Issuer, the Indenture Trustee nor any such agent shall
be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the rights of the Noteholders under the Indenture
at any time by the Issuer with the consent of the Noteholders representing a
majority of the Outstanding Amount of all Notes at the time outstanding. The
Indenture also contains provisions permitting the Noteholders representing
specified percentages of the Outstanding Amount of the Notes, on behalf of all
the Noteholders, to waive compliance by the Issuer with certain provisions of
the Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the holder of this Note (or any one
of more Predecessor Notes) shall be conclusive and binding upon such holder and
upon all future holders of this Note and of any Note issued upon registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Note. The Indenture also permits the
Indenture Trustee to amend or waive certain terms and conditions set forth in
the Indenture without the consent of holders of the Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor
to the Issuer under the Indenture.
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<PAGE>
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Indenture
Trustee and the Noteholders under the Indenture.
The Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.
This Note shall be construed in accordance with the laws of
the State of New York, without reference to its conflict of law provisions, and
the obligations, rights and remedies of the parties hereunder and thereunder
shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair the obligation of the Issuer,
which is absolute and unconditional, to pay the principal of and interest on
this Note at the times, place, and rate, and in the coin or currency, herein
prescribed.
Anything herein to the contrary notwithstanding, except as
expressly provided in the Basic Documents, neither Bankers Trust Company in its
individual capacity, Chase Manhattan Bank Delaware in its individual capacity,
any owner of a beneficial interest in the Issuer, nor any of their respective
partners, beneficiaries, agents, officers, directors, employees or successors or
assigns shall be personally liable for, nor shall recourse be had to any of them
for, the payment of principal of or interest on, or performance of, or omission
to perform, any of the covenants, obligations or indemnifications contained in
this Note or the Indenture; it being expressly understood that said covenants,
obligations and indemnifications have been made by the Eligible Lender Trustee
for the sole purposes of binding the interests of the Eligible Lender Trustee in
the assets of the Issuer. The Noteholder of this Note by the acceptance hereof
agrees that, except as expressly provided in the Basic Documents, in the case of
an Event of Default under the Indenture, the Noteholder shall have no claim
against any of the foregoing for any deficiency, loss or claim therefrom;
PROVIDED, HOWEVER, that nothing contained herein shall be taken to prevent
recourse to, and enforcement against, the assets of the Issuer for any and all
liabilities, obligations and undertakings contained in the Indenture or in this
Note.
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ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
- --------------------------------------------------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
- --------------------------------------------------------------------------------
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints
--------------------------------------------------------------------
attorney, to transfer said Note on the books kept for registration thereof, with
full power of substitution in the premises.
Dated:
-------------------------------------
*/
-----------------------------
Signature Guaranteed:
*/
-----------------------------
- ----------------------
*/ NOTICE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in STAMP or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.
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EXHIBIT B
TO THE INDENTURE
NOTE DEPOSITORY AGREEMENT
-------------------------
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Exhibit 99.1
PURCHASE AGREEMENT MASTER SECURITIZATION TERMS NUMBER 1000
These Purchase Agreement Master Securitization Terms Number 1000
("Master Terms") dated as of February 15, 2000 among SLM Funding Corporation
("Funding"), Chase Manhattan Bank Delaware, not in its individual capacity but
solely as Interim Eligible Lender Trustee (the "Interim Eligible Lender
Trustee") for the benefit of Funding under the Interim Trust Agreement dated as
of February 1, 2000 between Funding and the Interim Eligible Lender Trustee, and
Student Loan Marketing Association ("Sallie Mae"), shall be effective upon
execution by the parties hereto. References to Funding herein mean the Interim
Eligible Lender Trustee for all purposes involving the holding or transferring
of legal title to the Eligible Loans.
WHEREAS, Sallie Mae is the owner of certain student loans guaranteed
under the Higher Education Act;
WHEREAS, Sallie Mae may desire to sell its interest in such loans from
time to time and Funding may desire to purchase such loans from Sallie Mae;
WHEREAS, the Interim Eligible Lender Trustee is willing to hold legal
title to, and serve as eligible lender trustee with respect to, such loans on
behalf of Funding;
NOW, THEREFORE, in connection with the mutual promises contained
herein, the parties hereto agree as follows:
SECTION 1. TERMS
These Master Terms establish the terms under which Sallie Mae may sell
and Funding (and with respect to legal title, the Interim Eligible Lender
Trustee on behalf of Funding) may purchase the Loans (and all obligations of the
Borrowers thereunder) specified on each Purchase Agreement as the parties may
execute from time to time pursuant to these Master Terms. Each such Purchase
Agreement shall be substantially in the form of Attachment A hereto,
incorporating by reference the terms of these Master Terms, and shall be a
separate agreement among Sallie Mae, Funding, and the Interim Eligible Lender
Trustee on behalf of Funding with respect to the Loans covered by the terms of
such Purchase Agreement. If the terms of a Purchase Agreement conflict with the
terms of these Master Terms, the terms of such Purchase Agreement shall
supersede and govern.
SECTION 2. DEFINITIONS
Capitalized terms used but not otherwise defined herein shall have the
definitions set forth in Appendix A hereto.
For purposes hereof:
<PAGE>
(A) "Account" means all of the Eligible Loans hereunder of one (1)
Borrower that are of the same Loan type made under the identical
subsection of the Higher Education Act and in the same status.
(B) "Bill of Sale" means that document executed by an authorized
officer of Sallie Mae which shall set forth the Loans offered by Sallie
Mae and accepted for purchase by the Interim Eligible Lender Trustee
for the benefit of Funding and which shall sell, assign and convey to
the Interim Eligible Lender Trustee for the benefit of Funding and its
assignees all rights, title and interest of Sallie Mae in the Loans
listed on the Bill of Sale and will certify that the representations
and warranties made by Sallie Mae pursuant to Section 5(A) of these
Master Terms are true and correct.
(C) "Borrower" means the obligor on a Loan.
(D) "Consolidation Loan" means a Loan made pursuant to and in full
compliance with Section 428C of the Higher Education Act.
(E) "Cutoff Date" means January 17, 2000 and, with respect to
subsequent sales hereunder, a date agreed to by Sallie Mae and Funding
to use in determining the Principal Balance and accrued interest to be
capitalized for purposes of completing the Loan Transmittal Summary
Form.
(F) "Deferred Payment" means an amount equal to all amounts distributed
to Funding pursuant to Section 2.8 C.1(F) of the Administration
Agreement (exclusive of the amount of any such distribution
attributable to the reduction from time to time of the Specified
Reserve Account Balance).
(G) "Delinquent" means the period any payment of principal or interest
due on the Loan is overdue.
(H) "Eligible Loan" means a Loan offered for sale by Sallie 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 and which meets the following criteria as of
the effective date of the Bill of Sale:
(i) is a Stafford Loan, a Consolidation Loan, a PLUS Loan or
SLS Loan;
(ii) is owned by Sallie Mae and is fully disbursed;
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(iii) is guaranteed as to principal and interest by the
applicable Guarantor to the maximum extent permitted by the
Higher Education Act for such Loan;
(iv) bears interest at a stated rate of not less than the
maximum rate permitted under the Higher Education Act for such
Loan;
(v) is eligible for the payment of the quarterly special
allowance at the full and undiminished rate established under
the formula set forth in the Higher Education Act for such
Loan;
(vi) if not yet in repayment status, is eligible for the
payment of interest benefits by the Secretary or, if not so
eligible, is a Loan for which interest either is billed
quarterly to Borrower or deferred until commencement of the
repayment period, in which case such accrued interest is
subject to capitalization to the full extent permitted by the
applicable Guarantor;
(vii) is supported by the following documentation:
(a) for each Loan:
1. loan application, and any supplement thereto,
2. original promissory note and any addendum
thereto or a certified copy thereof if more
than one loan is represented by a single
promissory note and all loans so represented
are not being sold at the same time,
3. evidence of guarantee,
4. any other document and/or record which Funding
may be required to retain pursuant to
Regulations; and
(b) for each 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 Loan,
2. documentation which supports periods of current or
past deferment or past forbearance,
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3. a collection history, if the 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
and, if required by the Guarantor, copies of
all letters and other correspondence relating
to due diligence processing,
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 evidence that the Borrower's school(s) have
been notified,
6. a record of any event resulting in a change to or
confirmation of any data in the Loan file.
(I) "Initial Payment" means the dollar amount specified in the
applicable Purchase Agreement.
(J) "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 including, without
limitation, Interest Subsidy Payments and Special Allowance Payments.
(K) "Loan Transmittal Summary Forms" means the forms provided to Sallie
Mae by Funding and completed by Sallie Mae which list, by Borrower, the
Loans subject to the Bill of Sale and the outstanding Principal Balance
and accrued interest thereof as of the Cutoff Date.
(L) "Note" means the promissory note of the Borrower and any amendment
thereto evidencing the Borrower's obligation with regard to a student
loan guaranteed under the Higher Education Act.
(M) "PLUS Loan" means a Loan which was made pursuant to the PLUS
Program established under Section 428B of the Higher Education Act (or
predecessor provisions).
(N) "Principal Balance" means the outstanding principal amount of the
Loan, plus interest expected to be capitalized (if any), less amounts
which may not be insured (such as late charges).
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<PAGE>
(O) "Purchase Agreement" means a Purchase Agreement (including any
attachments thereto), substantially in the form of Attachment A hereto,
of which these Master Terms form a part by reference.
(P) "Purchase Price" means the sum of the Initial Payment and Deferred
Payment.
(Q) "Sale Agreement" means the Sale Agreement Master Securitization
Terms Number 1000 among SLM Funding Corporation as Seller, Chase
Manhattan Bank Delaware as Interim Eligible Lender Trustee and Eligible
Lender Trustee.
(R) "Secretary" means the United States Secretary of Education or any
successor.
(S) "SLS Loan" means a Loan which was made pursuant to the Supplemental
Loans for Students Program established under Section 428A of the Higher
Education Act (or predecessor provisions), including Loans referred to
as ALAS Loans or Student PLUS Loans.
(T) "Stafford Loans" mean Subsidized Stafford Loans and Unsubsidized
Stafford Loans.
(U) "Subsidized Stafford Loan" means a Loan for which the interest rate
is governed by Section 427A(a) or 427A(d) of the Higher Education Act.
(V) "Unsubsidized Stafford Loan" means a Loan made pursuant to Section
428H of the Higher Education Act.
SECTION 3. SALE/PURCHASE
(A) Consummation of Sale and Purchase
The sale and purchase of Eligible Loans pursuant to a Purchase
Agreement shall be consummated upon Funding's receipt from Sallie Mae
of the Bill of Sale and the payment by Funding to Sallie Mae of the
Initial Payment, and when consummated such sale and purchase shall be
effective as of the date of the Bill of Sale. Sallie Mae and Funding
shall use their best efforts to perform promptly their respective
obligations pursuant to such Purchase Agreement.
(B) Settlement of the Initial Payment
Funding on the date of the Bill of Sale shall pay Sallie Mae
the Initial Payment by wire transfer of immediately available funds to
the account specified by Sallie Mae.
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(C) Interest Subsidy and Special Allowance Payments and Rebate Fees
On the date of the Bill of Sale, Sallie Mae shall be entitled
to all Interest Subsidy Payments and Special Allowance Payments on the
Loans and shall be responsible for the payment of any rebate fees
applicable to the Consolidation Loans subject to each Bill of Sale
accruing up to but not including the date of the Bill of Sale. The
Interim Eligible Lender Trustee on behalf of Funding shall be entitled
to all Special Allowance Payments and Interest Subsidy Payments and
shall be responsible for the payment of any rebate fees accruing from
the date of the Bill of Sale.
(D) Special Programs
In consideration of the sale of the Eligible Loans under these
Master Terms and each Purchase Agreement, Funding agrees to cause the
Servicer to offer borrowers of Trust Student Loans all special
programs, whether or not in existence as of the date of any Purchase
Agreement, generally offered to the obligors of comparable loans owned
by Sallie Mae subject to terms and conditions of Section 3.12 of the
Servicing Agreement.
(E) Deferred Payment
Funding shall pay the Deferred Payment to Sallie Mae when and
as the same is received by Funding. If the Trust Student Loans are
purchased by Funding pursuant to Section 6.1 of the Administration
Agreement, Funding shall pay to Sallie Mae as part of the Deferred
Payment the present value of the excess of the projected future yield
on the Trust Student Loans after the date of such purchase over the
projected cost to Funding of carrying the Trust Student Loans as
reasonably estimated by Funding assuming (1) that interest rates
applicable to the Trust Student Loans in effect on the date of such
purchase remain in effect, (2) that the cost to Funding of carrying the
Trust Student Loans is equal to the blended rate on the Notes and
Certificates on the date of such purchase, (3) that the servicing costs
and loss experience applicable to the Trust Student Loans during the
one year period preceding such purchase continue during the remaining
life of the Trust Student Loans and (4) a discount rate equal to the
blended rate on the Notes and Certificates on the date of such
purchase. If the Trust Student Loans are sold pursuant to the auction
provision in Section 4.4 of the Indenture, Funding shall pay to Sallie
Mae as part of the Deferred Payment the amount, if any, by which the
sale price exceeds the Minimum Purchase Amount and any costs of
terminating the Trust. Funding shall also be obligated to pay Sallie
Mae as part of the Deferred Payment, in the event that the
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provisions of Section 2.8C(E) of the Administration Agreement are
operative, upon payment in full of the Notes and Certificates to the
extent of amounts then distributable by the Trust to Funding, the
aggregate amount that would have been distributed to Funding pursuant
to Section 2.8C(F) of the Administration Agreement (exclusive of the
amount of any such distribution attributable to the reduction from time
to time of the Specified Reserve Account Balance) but for the operation
of Section 2.8C(E) of the Administration Agreement.
SECTION 4. CONDITIONS PRECEDENT TO PURCHASE
(A) Activities Prior to the Purchase Date
Sallie Mae shall provide any assistance requested by Funding
in determining that all required documentation on the Loans is present and
correct.
(B) Continued Servicing
Following the execution of each Purchase Agreement, Sallie Mae
shall service, or cause to be serviced, all Loans subject to such
Purchase Agreement as required under the Higher Education Act until the
date of the Bill of Sale.
(C) Bill of Sale/Loan Transmittal Summary Form
Sallie Mae shall deliver to Funding:
(i) a Bill of Sale executed by an authorized officer of Sallie
Mae, covering Loans offered by Sallie Mae and accepted by
Funding as set forth thereon, selling, assigning and conveying
to the Interim Eligible Lender Trustee on behalf of Funding
and its assignees all right, title and interest of Sallie Mae,
including the insurance interest of Sallie Mae, in each of the
Loans, and stating that the representations and warranties
made by Sallie Mae in Section 5 of these Master Terms are true
and correct on and as of the date of the Bill of Sale; and
(ii) the Loan Transmittal Summary Form, attached to the Bill
of Sale, identifying each of the Eligible Loans which is the
subject of the Bill of Sale and setting forth the unpaid
Principal Balance of each such Loan.
(D) Endorsement
Sallie Mae shall provide a blanket endorsement transferring
the entire interest of Sallie Mae in the Loans to the Interim Eligible
Lender Trustee on behalf of Funding
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with the form of endorsement provided for in the Purchase Agreement.
At the direction of and in such form as Funding may designate,
Sallie Mae also agrees to individually endorse any Eligible Loan as
Funding may request from time to time.
(E) Officer's Certificate
Sallie Mae shall furnish to Funding, with each Bill of Sale
provided in connection with each purchase of Loans pursuant to these
Master Terms, an Officer's Certificate, dated as of the date of such
Bill of Sale.
(F) Loan Transfer Statement
Upon Funding's request, Sallie Mae shall deliver to Funding
one (1) or more Loan Transfer Statements (Department of Education Form
OE 1074 or its equivalent) provided by Funding, executed by Sallie Mae
and dated the date of the Bill of Sale. Sallie Mae agrees that Funding
and the Interim Eligible Lender Trustee may use the Bill of Sale,
including the Loan Transmittal Summary Form attached to the Bill of
Sale, in lieu of OE Form 1074, as official notification to the
Guarantor of the assignment by Sallie Mae to the Interim Eligible
Lender Trustee on behalf of Funding of the Loans listed on the Bill of
Sale.
(G) Power of Attorney
Sallie Mae hereby grants to Funding and the Interim Eligible
Lender Trustee for the benefit of 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 Sallie Mae any Eligible Loan to evidence the transfer of such
Eligible Loan to Funding and the Interim Eligible Lender Trustee for
the benefit of Funding and to cause to be transferred physical
possession of any Note from Sallie Mae or the Servicer to Funding or
the Interim Eligible Lender Trustee or any custodian on their behalf.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF SALLIE MAE AND INTERIM ELIGIBLE
LENDER TRUSTEE
(A) General
Sallie Mae represents and warrants to Funding that with respect to a
portfolio of Loans, as of the date of each Purchase Agreement and Bill of Sale:
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(i) Sallie Mae is an eligible lender or other qualified holder
of loans originated pursuant to the Federal Family Education
Loan Program established under the Higher Education Act;
(ii) Sallie Mae is duly organized and existing under the laws
of the applicable jurisdiction;
(iii) Sallie Mae has all requisite power and authority to
enter into and to perform the terms of the Purchase Agreement;
and
(iv) Sallie Mae will not, with respect to any Loan purchased
under Purchase Agreements executed pursuant to these Master
Terms, agree to release any Guarantor from any of its
contractual obligations as an insurer of such Loan or agree
otherwise to alter, amend or renegotiate any material term or
condition under which such Loan is insured, except as required
by law or rules and regulations issued pursuant to law,
without the express prior written consent of Funding.
(B) Particular
Sallie Mae represents and warrants to Funding as to the Loans
purchased by Funding under each Purchase Agreement and each Bill of
Sale executed pursuant these Master Terms that:
(i) Sallie Mae has good title to, and is the sole owner of,
the Loans, free and clear of all security interests, liens,
charges, claims, offsets, defenses, counterclaims or
encumbrances of any nature and no right of rescission,
offsets, defenses or counterclaims have been asserted or
threatened with respect to the Loans;
(ii) The Loans are Eligible Loans and the description of the
Loans set forth in the Purchase Agreement is true and correct;
(iii) Sallie Mae is authorized to sell, assign, transfer and
repurchase the Loans; and the sale, assignment and transfer of
such Loans is or, in the case of a Loan repurchase by Sallie
Mae, will be made pursuant to and consistent with the laws and
regulations under which Sallie 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 Sallie Mae is a party or by which Sallie Mae or its
property is bound, or constitute a default (or an event which
could
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constitute a default with the passage of time or notice or
both) thereunder;
(iv) The 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 defense of infancy);
(v) Each Loan has been duly made and serviced in accordance
with the provisions of the Federal Family Education Loan
Program established under the Higher Education Act, and has
been duly insured by a Guarantor; such guarantee is in full
force and effect and is freely transferable to the Interim
Eligible Lender Trustee on behalf of Funding as an incident to
the purchase of each Loan; and all premiums due and payable to
such Guarantor shall have been paid in full as of the date of
the Bill of Sale;
(vi) Any payments on the Loans received by Sallie Mae which
have been allocated to reduction of principal and interest on
such Loans have been allocated on a simple interest basis; the
information with respect to the Loans as of the Cutoff Date as
stated on the Loan Transmittal Summary Form is true and
correct;
(vii) Due diligence and reasonable care have been exercised in
the making, administering, servicing and collecting the Loans
and, with respect to any Loan for which repayment terms have
been established, all disclosures of information required to
be made pursuant to the Higher Education Act have been made;
(viii) All origination fees authorized to be collected
pursuant to Section 438 of the Higher Education Act have been
paid to the Secretary;
(ix) Each Loan has been duly made and serviced in accordance
with the provisions of all applicable federal and state laws;
(x) No Loan is more than one hundred and twenty (120) days
delinquent as of the Cutoff Date and no default, breach,
violation or event permitting acceleration under the terms of
any Loan has arisen; and neither Sallie Mae nor any
predecessor holder of any Loan has waived any of the foregoing
other than as permitted by the Basic Documents;
(xi) It is the intention of Sallie Mae, the Interim Eligible
Lender Trustee and Funding, and Sallie Mae hereby warrants
that, the transfer and assignment
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herein contemplated constitute a valid sale of the Loans from
Sallie Mae to the Interim Eligible Lender Trustee on behalf of
Funding and that the beneficial interest in and title to such
Loans not be part of Sallie Mae's estate in the event of the
bankruptcy of Sallie Mae or the appointment of a receiver with
respect to Sallie Mae;
(xii) There is only one original executed copy of the
promissory note evidencing each Loan; and
(xiii) No Borrower of any Loan as of the Cutoff Date is noted
in the related Loan File as being currently involved in a
bankruptcy proceeding.
(C) The Interim Eligible Lender Trustee represents and warrants that as
of the date of each Purchase Agreement and each Bill of Sale:
(i) The Interim Eligible Lender Trustee is duly organized and
validly existing in good standing under the laws of its governing
jurisdiction and has an office located within the State of Delaware. It
has all requisite corporate power and authority to execute, deliver and
perform its obligations under this Purchase Agreement;
(ii) The Interim Eligible Lender Trustee has taken all
corporate action necessary to authorize the execution and delivery by
it of the Purchase Agreement, and the Purchase Agreement will be
executed and delivered by one of its officers who is duly authorized to
execute and deliver the Purchase Agreement on its behalf;
(iii) Neither the execution nor the delivery by it of the
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 Delaware state law,
governmental rule or regulation governing the banking or trust powers
of the Interim Eligible Lender 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; and
(iv) The Interim Eligible Lender Trustee is an "eligible
lender" as such term is defined in Section 435(d) of the Higher
Education Act, for purposes of holding legal title to the Trust Student
Loans as contemplated by the Purchase Agreement and the other Basic
Documents, it has a lender identification number with respect to the
Trust Student Loans from the Department and has in effect a
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Guarantee Agreement with each of the Guarantors with respect to the
Trust Student Loans.
SECTION 6. PURCHASE OF TRUST STUDENT LOANS; REIMBURSEMENT
Each party to this Agreement shall give notice to the other parties
promptly, in writing, upon the discovery of any breach of Sallie 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 by reinstatement of
the Guarantor's guarantee of such Trust Student Loan, Sallie Mae shall
repurchase any affected Trust Student Loan not later than 120 days following the
earlier of the date of discovery of such material breach and the date of receipt
of the Guarantor reject transmittal form with respect to such Trust Student
Loan. In the event of such a material breach which is curable by reinstatement
of the Guarantor's guarantee of such Trust Student Loan, unless the material
breach shall have been cured within 360 days following the earlier of the date
of discovery of such material breach and the date of receipt of the Guarantor
reject transmittal form with respect to such Trust Student Loan, Sallie Mae
shall purchase such Trust Student Loan not later than the sixtieth day following
the end of such 360-day period. Sallie Mae shall also remit as provided in
Section 2.6 of the Administration Agreement on the date of purchase of any Trust
Student Loan pursuant to this Section 6 an amount equal to all nonguaranteed
interest amounts and forfeited Interest Subsidy Payments and Special Allowance
Payments with respect to such Trust Student Loan. In consideration of the
purchase of any such Trust Student Loan pursuant to this Section 6, Sallie Mae
shall remit the Purchase Amount in the manner specified in Section 2.6 of the
Administration Agreement.
In addition, if any breach of Section 5 hereof by Sallie Mae does not
trigger such purchase obligation but does result in the refusal by a Guarantor
to guarantee all or a portion of the accrued interest (or any obligation of
Funding to repay such interest to a Guarantor), or the loss (including any
obligation of Funding to repay the Department) of Interest Subsidy Payments and
Special Allowance Payments, with respect to any Trust Student Loan affected by
such breach, then Sallie Mae shall reimburse Funding by remitting an amount
equal to the sum of all such nonguaranteed interest amounts and such forfeited
Interest Subsidy Payments or Special Allowance Payments in the manner specified
in Section 2.6 of the Administration Agreement not later than (i) the last day
of the next Collection Period ending not less than 60 days from the date of the
Guarantor's refusal to guarantee all or a portion of accrued interest or loss of
Interest Subsidy Payments or Special Allowance Payments, or (ii) in the case
where Sallie Mae reasonably believes such losses are likely to be collected, not
later than the last day of the next Collection Period ending not less than 360
days from the
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date of the Guarantor's refusal to guarantee all or a portion of accrued
interest or loss of Interest Subsidy Payments or Special Allowance Payments. At
the time such payment is made, Sallie Mae shall not be required to reimburse
Funding for interest that is then capitalized, however, such amounts shall be
reimbursed if the borrower subsequently defaults and such capitalized interest
is not paid by the Guarantor.
Anything in this Section 6 to the contrary notwithstanding, if as of
the last Business Day of any month the aggregate outstanding principal amount of
Trust Student Loans with respect to which claims have been filed with and
rejected by a Guarantor or with respect to which the Servicer determines that
claims cannot be filed pursuant to the Higher Education Act as a result of a
breach by Sallie Mae or the Servicer, exceeds 1% of the Pool Balance, Sallie Mae
(and the Servicer as provided in the Servicing Agreement) shall purchase, within
30 days of a written request of the Eligible Lender Trustee or the Indenture
Trustee, such affected Trust Student Loans in an aggregate principal amount such
that after such purchase the aggregate principal amount of such affected Trust
student Loans is less than 1% of the Pool Balance. The Trust Student Loans to be
purchased by Sallie Mae and the Servicer pursuant to the preceding sentence
shall be based on the date of claim rejection (or the date of notice referred to
in the first sentence of this Section 6) with Trust Student Loans with the
earliest such date to be purchased first.
In lieu of repurchasing Trust Student Loans pursuant to this Section 6,
Sallie Mae may, at its option, substitute Eligible Loans or arrange for the
substitution of Eligible Loans which are substantially similar on an aggregate
basis as of the date of substitution to the Trust Student Loans for which they
are being substituted with respect to the following characteristics:
(1) status (i.e., in-school, grace, deferment, forbearance or
repayment),
(2) program type (i.e., Unsubsidized Stafford, Subsidized
Stafford, Consolidation (pre-1993 vs. post-1993), PLUS or
SLS),
(3) school type,
(4) total return,
(5) principal balance, and
(6) remaining term to maturity.
In addition, each substituted Eligible Loan will comply, as of the date
of substitution, with all of the representations and warranties made hereunder.
In choosing Eligible Loans to be
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substituted pursuant to this Section 6, Sallie Mae shall make a reasonable
determination that the Eligible Loans to be substituted will not have a material
adverse effect on the Noteholders and the Certificateholders.
In the event that Sallie Mae elects to substitute Eligible Loans
pursuant to this Section 6, Sallie Mae will remit to the Administrator the
amount of any shortfall between the Purchase Amount of the substituted Eligible
Loans and the Purchase Amount of the Trust Student Loans for which they are
being substituted. Sallie Mae shall also remit to the Administrator an amount
equal to all nonguaranteed interest amounts and forfeited Interest Subsidy
Payments and Special Allowance Payments with respect to the Trust Student Loans
in the manner provided in Section 2.6 of the Administration Agreement. The sole
remedy of Funding, the Eligible Lender Trustee, the Certificateholders and the
Noteholders with respect to a breach by Sallie Mae pursuant to Section 5 hereof
shall be to require Sallie Mae to purchase Trust Student Loans, to reimburse
Funding as provided above or to substitute Student Loans pursuant to this
Section. The Eligible Lender Trustee shall have no duty to conduct any
affirmative investigation as to the occurrence of any condition requiring the
purchase of any Trust Student Loan or the reimbursement for any interest penalty
pursuant to this Section 6.
SECTION 7. OBLIGATION TO REMIT SUBSEQUENT PAYMENTS AND FORWARD COMMUNICATIONS
(A) Any payment received by Sallie Mae with respect to amounts accrued
after the Date of the Bill of Sale for any Loan sold to Funding, which
payment is not reflected in the Loan Transmittal Summary Form, shall be
received by Sallie Mae in trust for the account of Funding and Sallie
Mae hereby disclaims any title to or interest in any such amounts.
Within two (2) business days following the date of receipt, Sallie Mae
shall remit to Funding an amount equal to any such payments on a list
provided by Funding identifying the 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 Sallie Mae with
respect to any Loan subject to this Purchase Agreement shall be
transmitted by Sallie 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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SECTION 8. CONTINUING OBLIGATION OF SALLIE MAE
Sallie Mae shall provide all reasonable assistance necessary for
Funding to resolve account problems raised by any Borrower, the Guarantor or the
Secretary provided such account problems are attributable to or are alleged to
be attributable to (a) an event occurring during the period Sallie Mae owned the
Loan, or (b) a payment made or alleged to have been made to Sallie Mae. Further,
Sallie Mae agrees to execute any financing statements at the request of Funding
in order to reflect Funding's interest in the Loans.
SECTION 9. LIABILITY OF SALLIE MAE; INDEMNITIES
Sallie Mae shall be liable in accordance herewith only to the extent of
the obligations specifically undertaken by Sallie Mae under this Purchase
Agreement.
(i) Sallie Mae shall indemnify, defend and hold harmless Funding and
the Interim Eligible Lender 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
Interim Eligible Lender Trustee), 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 Loans to the
Interim Eligible Lender Trustee on behalf of Funding, or asserted with
respect to ownership of the Trust Student Loans) and costs and expenses
in defending against the same.
(ii) Sallie Mae shall indemnify, defend and hold harmless Funding and
the Interim Eligible Lender Trustee in its individual capacity, and the
officers, directors, employees and agents of Funding, and the Interim
Eligible Lender Trustee from and against any and all costs, expenses,
losses, claims, damages and liabilities arising out of, or imposed upon
such Person through, Sallie Mae's willful misfeasance, bad faith or
gross 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.
(iii) Sallie Mae shall be liable as primary obligor for, and shall
indemnify, defend and hold harmless the Interim Eligible Lender 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 Purchase Agreement, the other Basic
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Documents, the acceptance or performance of the trusts and duties set
forth herein and in the Sale Agreement or the action or the inaction of
the Interim Eligible Lender 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 Interim Eligible Lender Trustee,
(b) shall arise from any breach by the Interim Eligible Lender Trustee
of its covenants made under any of the Basic Documents; or (c) shall
arise from the breach by the Interim Eligible Lender Trustee of any of
its representations or warranties made in its individual capacity set
forth in these Master Terms or any Purchase Agreement. In the event of
any claim, action or proceeding for which indemnity will be sought
pursuant to this paragraph, the Interim Eligible Lender Trustee's
choice of legal counsel shall be subject to the approval of Sallie Mae,
which approval shall not be unreasonably withheld.
Indemnification under this Section shall survive the resignation or
removal of the Interim Eligible Lender Trustee and the termination of these
Master Terms, and shall include reasonable fees and expenses of counsel and
expenses of litigation. If Sallie 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 Sallie Mae, without interest.
SECTION 10. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE OBLIGATIONS OF
SALLIE MAE
Any Person (a) into which Sallie Mae may be merged or consolidated, (b)
which may result from any merger or consolidation to which Sallie Mae shall be a
party or (c) which may succeed to the properties and assets of Sallie Mae
substantially as a whole, shall be the successor to Sallie 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 Sallie 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 Sallie
Mae, executes an agreement of assumption to perform every obligation of Sallie
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 Sallie Mae, shall have
delivered to the Interim Eligible Lender 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 Purchase Agreement relating
to such transaction have been complied with, and that
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the Rating Agency Condition shall have been satisfied with respect to such
transaction (iv) if Sallie Mae is not the surviving entity, Sallie Mae shall
have delivered to the Interim Eligible Lender 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
Funding and the Interim Eligible Lender Trustee in the 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 SALLIE MAE AND OTHERS
Sallie 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 Sallie
Mae's obligations under Section 6.) Sallie 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 these Master Terms or any Purchase Agreement, and that
in its opinion may involve it in any expense or liability. Except as provided
herein, the repurchase (or substitution) and reimbursement obligations of Sallie
Mae will constitute the sole remedy available to Funding 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 to the extent that the aggregate Principal
Balance of the Loans listed on the Bill of Sale is less than the aggregate
Principal Balance stated on the Bill of Sale, Sallie Mae shall remit such amount
to the Interim Eligible Lender Trustee on behalf of Funding. Such reconciliation
payment shall be made from time to time but no less frequently than
semi-annually.
SECTION 12. LIMITATION OF LIABILITY OF INTERIM ELIGIBLE LENDER TRUSTEE
Notwithstanding anything contained herein to the contrary, these
Master Terms and any Purchase Agreement have been signed by Chase Manhattan Bank
Delaware not in its individual capacity but solely in its capacity as Interim
Eligible Lender Trustee for Funding and in no event shall Chase Manhattan Bank
Delaware in its individual capacity have any liability for the representations,
warranties, covenants, agreements or other obligations of Funding, under these
Master Terms or any Purchase Agreement 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 Funding.
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SECTION 13. EXPENSES
Except as otherwise provided herein, each party to these Master Terms
or any Purchase Agreement shall pay its own expense incurred in connection with
the preparation, execution and delivery of these Master Terms and any Purchase
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 Purchase Agreements executed pursuant to these Master
Terms shall survive the consummation of the purchase of the Loans provided for
in each Purchase Agreement. All covenants, agreements, representations and
warranties made or furnished pursuant hereto by or on behalf of Sallie Mae shall
bind and inure to the benefit of any successors or assigns of Funding and shall
survive with respect to each Loan. Each Purchase Agreement supersedes all
previous agreements and understandings between Funding and Sallie Mae with
respect to the subject matter thereof. These Master Terms 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 Sallie 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 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 Sallie Mae 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 Sallie 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 Sallie 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 16. FORM OF INSTRUMENTS
All instruments and documents delivered in connection with these Master
Terms and any Purchase Agreement, and all
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proceedings to be taken in connection with these Master Terms 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 17. AMENDMENT
These Master Terms 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 and Eligible Lender
Trustees, materially and adversely affect the interest of any such Noteholder or
Certificateholder.
In addition, these Master Terms and any Purchase Agreement may also be
amended from time to time by Sallie Mae, the Interim Eligible Lender Trustee 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 these Master Terms 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 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 Interim
Eligible Lender 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,
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but it shall be sufficient if such consent shall approve the substance thereof.
Prior to the execution of any amendment to these Master Terms, the
Interim Eligible Lender 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 and the Opinion of Counsel referred to in Section
7.1 I((i) of the Administration Agreement. The Interim Eligible Lender Trustee
may, but shall not be obligated to, enter into any such amendment which affects
the Interim Eligible Lender Trustee's own rights, duties or immunities under
this Agreement or otherwise.
SECTION 18. NONPETITION COVENANTS
Notwithstanding any prior termination of these Master Terms Sallie Mae
and the Interim Eligible Lender Trustee 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, assignees, 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 19. GOVERNING LAW
These Master Terms and any Purchase Agreement shall be government by
and construed in accordance with the laws of the State of New York 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.
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STUDENT LOAN MARKETING SLM FUNDING CORPORATION
ASSOCIATION (Seller) (Purchaser)
By: /s/ MICHAEL E. SHEEHAN By: /s/ J. LANCE FRANKE
------------------------------- ------------------------------------
Name: MICHAEL E. SHEEHAN Name: J. LANCE FRANKE
----------------------------- ----------------------------------
Title: ASSISTANT VICE PRESIDENT Title: CHIEF FINANCIAL OFFICER
---------------------------- ----------------------------------
CHASE MANHATTAN BANK DELAWARE,
Not in its individual capacity but
solely as Interim Eligible Lender Trustee
By: /s/ JOHN J. CASHIN
----------------------------------
Name: JOHN J. CASHIN
--------------------------------
Title: VICE PRESIDENT
-------------------------------
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ATTACHMENT A
PURCHASE AGREEMENT
Dated as of February 15, 2000
PURCHASE AGREEMENT NUMBER 1
Sallie Mae hereby offers for sale to Chase Manhattan Bank Delaware as
Interim Eligible Lender Trustee for the benefit of SLM Funding Corporation
("Funding") under the Interim Trust Agreement dated as of February 1, 2000
between Funding and the Interim Eligible Lender Trustee, the entire right,
title and interest of Sallie Mae in the Loans described in the Bill of Sale
and Loan Transmittal Summary Form incorporated herein and, to the extent
indicated below, the Interim Eligible Lender Trustee for the benefit of
Funding accepts Sallie Mae's offer. In order to qualify as Eligible Loans,
no payment of principal or interest shall be more than one hundred and
twenty (120) days Delinquent as of the Cutoff Date which date shall be
January 17, 2000.
TERMS, CONDITIONS AND COVENANTS
In consideration of the Purchase Price, Sallie Mae hereby sells to the
Interim Eligible Lender Trustee for the benefit of Funding the entire right,
title and interest of Sallie Mae in the Loans accepted for purchase, subject
to all the terms and conditions of the Purchase Agreement Master
Securitization Terms Number 1000 ("Master Terms") and any amendments
thereto, incorporated herein by reference, among Sallie Mae, Funding, and
the Interim Eligible Lender Trustee. The Initial Payment of the Loans shall
equal $2,039,185,273 (equal to $2,044,191,783 (representing the sale price
of the Securities less underwriters' commissions and fees) less $5,006,510
(representing the Reserve Account Initial Deposit).
This document shall constitute a Purchase Agreement as referred to in
the Master Terms and, except as modified herein, each term used herein shall
have the same meaning as in the Master Terms. All references in the Master
Terms to Loans or Eligible Loans shall be deemed to refer to the Loans
governed by this Purchase Agreement. Sallie Mae hereby makes, as of the date
hereof, all the representations and warranties contained in the Master Terms
and makes such representations and warranties with respect to the Loans
governed by this Purchase Agreement.
Sallie Mae authorizes the Interim Eligible Lender Trustee for the
benefit of Funding to use a copy of the Bill of Sale, including the Loan
Transmittal Summary Form attached to the Bill of Sale (in lieu of OE Form
1074), as official notification to the Guarantor of assignment to the
Interim Eligible Lender Trustee on behalf of Funding of the Loans on the
date of purchase.
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The parties hereto intend that the transfer of Loans described in the
Bill of Sale and Loan Transmittal Summary Form be, and be construed as, a
valid sale of such Loans from Sallie Mae to the Interim Eligible Lender
Trustee for the benefit of Funding. However, in the event that
notwithstanding the intention of the parties, such transfer is deemed to be
a transfer for security, then Sallie Mae hereby grants to the Interim
Eligible Lender Trustee for the benefit of Funding a first priority security
interest in and to all Loans described in the Bill of Sale and Loan
Transmittal Summary Form to secure a loan in an amount equal to the Purchase
Price of such loans.
STUDENT LOAN MARKETING SLM FUNDING CORPORATION
ASSOCIATION (Seller) (Purchaser)
By: By:
--------------------------- -----------------------------
Name: Name:
------------------------- ---------------------------
Title: Title:
------------------------ --------------------------
CHASE MANHATTAN BANK DELAWARE,
Not in its individual capacity but
solely as Interim Eligible Lender Trustee
By:
---------------------------
Name:
-------------------------
Title:
------------------------
2
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PURCHASE AGREEMENT NUMBER 1
BLANKET ENDORSEMENT DATED FEBRUARY 15, 2000
Student Loan Marketing Association ("Sallie 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 Sallie
Mae in favor of Chase Manhattan Bank Delaware as the Interim Eligible Lender
Trustee for the benefit of SLM Funding Corporation ("Funding"). This endorsement
is in blank, unrestricted form and without recourse except as provided in
Section 6 of the Master Terms referred to in the Purchase Agreement among Sallie
Mae, Funding, and the Interim Eligible Lender Trustee which covers this
promissory note.
This endorsement may be effected by attaching either this instrument or
a facsimile hereof to each or any of the Notes.
Notwithstanding the foregoing, Sallie 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 the 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 PURCHASE
AGREEMENT. BY EXECUTION HEREOF, SALLIE MAE ACKNOWLEDGES THAT SALLIE 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 SALLIE MAE OF THE INITIAL PAYMENT (AS DEFINED IN THE MASTER
TERMS) AND, UNLESS OTHERWISE AGREED BY SALLIE MAE AND FUNDING, SHALL BE
EFFECTIVE AS OF THE DATE OF THE BILL OF SALE.
SELLER PURCHASER
--------------------------------- -----------------------------------
Student Loan Marketing Association Chase Manhattan Bank Delaware,
11600 Sallie Mae Drive not in its individual capacity
Reston, Virginia 20190 but solely as Interim Eligible
Lender Trustee for the benefit
Lender Code: of SLM Funding Corporation
-------------- under the Interim Trust
By: ----------------------------- Agreement dated Feb. 1, 2000
By:
--------------------------------
(Signature of Authorized
Signatory for Purchaser)
Name: Name:
--------------------------- ------------------------------
Title: Title:
-------------------------- -----------------------------
+
Date of Purchase: Feb. 15, 2000
--------------------------------- -----------------------------------
3
<PAGE>
BILL OF SALE DATED FEBRUARY 15, 2000
The undersigned ("Sallie Mae"), for value received and pursuant to the
terms and conditions of Purchase Agreement Number 1 ("Purchase Agreement") among
SLM Funding Corporation ("Funding"), and Chase Manhattan Bank Delaware as
Interim Eligible Lender Trustee for the benefit of Funding under the Interim
Trust Agreement dated as of February 1, 2000 between Funding and the Interim
Eligible Lender Trustee, does hereby sell, assign and convey to the Interim
Eligible Lender Trustee for the benefit of Funding and its assignees all right,
title and interest of Sallie Mae, including the insurance interest of Sallie Mae
under the Federal Family Education Loan Program (20 U.S.C. 1071 ET SEQ.), in the
Loans identified herein which the Interim Eligible Lender Trustee for the
benefit of Funding has accepted for purchase. The portfolio accepted for
purchase by the Interim Eligible Lender Trustee for the benefit of Funding and
the effective date of sale and purchase are described below and the individual
Accounts are listed on the Schedule A attached hereto.
Sallie Mae hereby makes the representations and warranties set forth in
Section 5 of the Purchase Agreement Master Securitization Terms Number 1000
incorporated by reference in the Purchase Agreement. Sallie Mae authorizes the
Interim Eligible Lender Trustee on behalf of Funding to use a copy of this
document (in lieu of OE Form 1074) as official notification to the Guarantor(s)
of assignment to the Interim Eligible Lender Trustee for the benefit of Funding
of the Loans on the date of purchase.
LISTING OF LOANS ON FOLLOWING PAGE
4
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[PLACE TABLE HERE]
5
<PAGE>
ADDITIONAL LOAN CRITERIA
Not in claims status, not previously rejected
Not in litigation
Last disbursement is greater than 120 days from cutoff date
Loan is not swap-pending
*Based upon Sallie Mae's estimated calculations, which may be adjusted upward or
downward based upon Funding's reconciliation.
** Includes interest to be capitalized.
6
<PAGE>
Guarantor(s):
American Student Assistance Guarantor
California Student Aid Commission
Colorado Student Loan Program
Connecticut Student Loan Foundation
Education Assistance Corporation
Educational Credit Management Corporation
Finance Authority of Maine
Florida Department of Education Office of Student Financial Assistance
Georgia Higher Education Assistance Corp.
Great Lakes Higher Education Corporation
Illinois Student Assistance Commission
Iowa College Student Aid Commission
Kentucky Higher Education Assistance Authority
Louisiana Student Financial Assistance Commission
Michigan Higher Education Assistance Authority
Missouri Coordinating Board for Higher Education
Montana Guaranteed Student Loan Program
Nebraska Student Loan Program
New Jersey Higher Education Assistance Authority
New York State Higher Education Services Corporation
Northwest Education Loan Association
Oklahoma State Regents for Higher Education
Oregon State Scholarship Commission
Pennsylvania Higher Education Assistance Agency
Rhode Island Higher Education Assistance Authority
Student Loan Guarantee Foundation of Arkansas, Inc.
Tennessee Student Assistance Corporation
Texas Guaranteed Student Loan Corporation
United Student Aid Funds, Inc.
Utah Higher Education Assistance Authority
SELLER PURCHASER
--------------------------------- -----------------------------------
Student Loan Marketing Association Chase Manhattan Bank Delaware,
1050 Thomas Jefferson Street, N.W. not in its individual capacity
Washington, D.C. 20007 but solely as Interim Eligible
Lender Trustee for the benefit
Lender Code: of SLM Funding Corporation
--------------
By: By:
--------------------------------- --------------------------------
(Signature of Authorized
Signatory for Purchaser)
Name: Name:
--------------------------- ------------------------------
Title: Title:
-------------------------- -----------------------------
Date of Purchase: Feb. 15, 2000
--------------------------------- -----------------------------------
7
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--------------------------------------------------
NOTE: Boxed areas are for completion by Purchaser
--------------------------------------------------
8
<PAGE>
Exhibit 99.2
SALE AGREEMENT MASTER SECURITIZATION TERMS NUMBER 1000
These Sale Agreement Master Securitization Terms Number 1000 ("Master
Sale Terms") dated as of February 15, 2000 among SLM Funding Corporation
("Seller"), Chase Manhattan Bank Delaware, not in its individual capacity but
solely as Interim Eligible Lender Trustee (the "Interim Eligible Lender
Trustee") for the benefit of the Seller under the Interim Trust Agreement dated
as of February 1, 2000 between Seller and the Interim Eligible Lender Trustee,
Chase Manhattan Bank Delaware, not in its individual capacity but solely as
Eligible Lender Trustee on behalf of SLM Student Loan Trust 2000-1 (the
"Eligible Lender Trustee"), and SLM Student Loan Trust 2000-1 (the "Purchaser"),
shall be effective upon execution by the parties hereto. References to the
Seller herein mean the Interim Eligible Lender Trustee, and references to the
Purchaser mean the Eligible Lender Trustee, for all purposes involving the
holding or transferring of legal title to the Trust Student Loans.
WHEREAS, the Seller is the owner of certain student loans guaranteed
under the Higher Education Act;
WHEREAS, legal title to such loans is vested in the Interim Eligible
Lender Trustee, as trustee for the benefit of the Seller as the sole
beneficiary;
WHEREAS, Seller may desire to sell its interest in such loans from time
to time and Purchaser may desire to purchase such loans from Seller;
WHEREAS, the Eligible Lender Trustee is willing to hold legal title to,
and serve as eligible lender trustee with respect to, such loans for the benefit
of the Purchaser;
NOW, THEREFORE, in connection with the mutual promises contained
herein, the parties hereto agree as follows:
SECTION 1. TERMS
These Master Sale Terms establish the terms under which Seller (and
with respect to legal title, the Interim Eligible Lender Trustee for the benefit
of Seller) may sell and Purchaser (and with respect to legal title, the Eligible
Lender Trustee on behalf of the Purchaser) may purchase the Loans (and all
obligations of the Borrowers thereunder) specified on each Sale Agreement ("
Sale Agreement") as the parties may execute from time to time pursuant to these
Master Sale Terms. Each such Sale Agreement shall be substantially in the form
of Attachment A hereto, incorporating by reference the terms of these Master
Sale Terms, and shall be a separate agreement among Seller, Purchaser, Eligible
Lender Trustee on behalf of Purchaser, and the Interim Eligible Lender Trustee
for the benefit of Seller with respect to the Loans covered by the terms of such
Sale Agreement for all purposes. If the terms of a
<PAGE>
Sale Agreement conflict with the terms of these Master Sale Terms, the terms of
such Sale Agreement shall supersede and govern.
SECTION 2. DEFINITIONS
Capitalized terms used but not otherwise defined herein shall have the
definitions set forth in Appendix A hereto.
For purposes hereof:
(A) "Account" means all of the Eligible Loans hereunder of one (1)
Borrower that are of the same Loan type made under the identical
subsection of the Higher Education Act and in the same status.
(B) "Bill of Sale" means that document executed by an authorized
officer of the Seller and the Interim Eligible Lender Trustee for the
benefit of Seller which shall set forth the Loans offered by the Seller
and the Interim Eligible Lender Trustee for the benefit of the Seller
and accepted for purchase by the Eligible Lender Trustee on behalf of
the Purchaser and which shall sell, assign and convey to the Eligible
Lender Trustee on behalf of the Purchaser and its assignees all right,
title and interest of the Seller and of the Interim Eligible Lender
Trustee for the benefit of the Seller in the Loans listed on the Bill
of Sale and will certify that the representations and warranties made
by the Seller pursuant to Section 5(A) of these Master Sale Terms are
true and correct.
(C) "Borrower" means the obligor on a Loan.
(D) "Consolidation Loan" means a Loan made pursuant to and in full
compliance with Section 428C of the Higher Education Act.
(E) "Cutoff Date" means January 17, 2000 and, with respect to
subsequent sales hereunder, a date agreed to by Seller and Purchaser to
use in determining the Principal Balance and accrued interest to be
capitalized for purposes of completing the Loan Transmittal Summary
Form.
(F) "Deferred Payment" means an amount equal to all amounts distributed
to the Seller pursuant to Section 2.8C.1(F) of the Administration
Agreement (exclusive of the amount of any such distribution
attributable to the reduction from time to time of the Specified
Reserve Account Balance).
(G) "Delinquent" means the period any payment of principal or
interest due on the Loan is overdue.
(H) "Eligible Loan" means a Loan offered for sale by Seller under the
Sale Agreement which as of the Cutoff Date is current or no more
Delinquent than permitted under the Sale Agreement in payment of
principal or interest and which meets
2
<PAGE>
the following criteria as of the effective date of the Bill of Sale:
(i) is a Stafford Loan, a Consolidation Loan, a PLUS Loan or
SLS Loan;
(ii) is owned by Seller and is fully disbursed;
(iii) is guaranteed as to principal and interest by the
applicable Guarantor to the maximum extent permitted by the
Higher Education Act for such Loan;
(iv) bears interest at a stated rate of not less than the
maximum rate permitted under the Higher Education Act for
such Loan;
(v) is eligible for the payment of the quarterly special
allowance at the full and undiminished rate established
under the formula set forth in the Higher Education Act for
such Loan;
(vi) if not yet in repayment status, is eligible for the
payment of interest benefits by the Secretary or, if not so
eligible, is a Loan for which interest either is billed
quarterly to Borrower or deferred until commencement of the
repayment period, in which case such accrued interest is
subject to capitalization to the full extent permitted by
the applicable Guarantor;
(vii) is supported by the following documentation:
(a) for each Loan:
1. loan application, and any supplement
thereto,
2. original promissory note and any
addendum thereto or a certified copy
thereof if more than one loan is
represented by a single promissory
note and all loans so represented
are not being sold at the same time,
3. evidence of guarantee,
4. any other document and/or record
which Purchaser may be required to
retain pursuant to the Higher
Education Act; and
(b) for each Loan only if applicable:
1. payment history (or similar
document) including (i) an
indication of the Principal Balance
and the date through
3
<PAGE>
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 Loan,
2. documentation which supports periods
of current or past deferment or past
forbearance,
3. a collection history, if the 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 and, if
required by the Guarantor, copies of
all letters and other correspondence
relating to due diligence
processing,
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 evidence that the
Borrower's school(s) have been
notified,
6. a record of any event resulting in a
change to or confirmation of any
data in the Loan file.
(I) "Initial Payment" means the dollar amount specified in the
applicable Sale Agreement.
(J) "Loan" means the Note or Notes offered for sale pursuant to the
Sale Agreement and related documentation together with any guaranties
and other rights relating thereto including, without limitation,
Interest Subsidy Payments and Special Allowance Payments.
(K) "Loan Transmittal Summary Forms" means the forms provided to Seller
by Purchaser and completed by Seller which list, by Borrower, the Loans
subject to the Bill of Sale and the outstanding Principal Balance and
accrued interest thereof as of the Cutoff Date.
(L) "Note" means the promissory note of the Borrower and any amendment
thereto evidencing the Borrower's obligation with regard to a student
loan guaranteed under the Higher Education Act.
4
<PAGE>
(M) "PLUS Loan" means a Loan which was made pursuant to the PLUS
Program established under Section 428B of the Higher Education Act(or
predecessor provisions).
(N) "Principal Balance" means the outstanding principal amount of the
Loan, plus interest expected to be capitalized (if any), less amounts
which may not be insured (such as late charges).
(O) "Purchase Price" means the sum of the Initial Payment and Deferred
Payment.
(P) "Secretary" means the United States Secretary of Education or any
successor.
(Q) "SLS Loan" means a Loan which was made pursuant to the Supplemental
Loans for Students Program established under Section 428A of the Higher
Education Act(or predecessor provisions), including Loans referred to
as ALAS Loans or Student PLUS Loans.
(R) "Stafford Loans" means Subsidized Stafford Loans and Unsubsidized
Stafford Loans.
(S) "Subsidized Stafford Loan" means a Loan for which the interest rate
is governed by Section 427A(a) or 427A(d) of the Higher Education Act.
(T) "Unsubsidized Stafford Loan" means a Loan made pursuant to Section
428H of the Higher Education Act.
SECTION 3. SALE/PURCHASE
(A) Consummation of Sale and Purchase
The sale and purchase of Eligible Loans pursuant to a Sale
Agreement shall be consummated upon Purchaser's receipt from the Seller
and the Interim Eligible Lender Trustee for the benefit of the Seller
of the Bill of Sale and the payment by Purchaser to Seller of the
Initial Payment, 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 Sale Agreement.
(B) Settlement of the Initial Payment
Purchaser on the date of the Bill of Sale shall pay Seller the
Initial Payment by wire transfer in immediately available funds to the
account specified by Seller.
(C) Interest Subsidy And Special Allowance Payments And Rebate Fees
5
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On the date of the Bill of Sale, Seller shall be entitled to
all Interest Subsidy Payments and Special Allowance Payments on the
Loans and shall be responsible for the payment of any rebate fees
applicable to the Consolidation Loans subject to each Bill of Sale
accruing up to but not including the date of the Bill of Sale. The
Purchaser and the Eligible Lender Trustee for the benefit of Purchaser
shall be entitled to all Special Allowance Payments and Interest
Subsidy Payments and shall be responsible for the payment of any rebate
fees accruing from the date of the Bill of Sale.
(D) Special Programs
In consideration of the sale of the Eligible Loans under these
Master Sale Terms and each Sale Agreement, Purchaser agrees to cause
the Servicer to offer borrowers of Trust Student Loans all special
programs whether or not in existence as of the date of any Sale
Agreement generally offered to the obligors of comparable loans owned
by Sallie Mae subject to the terms and conditions of Section 3.12 of
the Servicing Agreement.
(E) Deferred Payment
Receipt by the Seller of amounts distributed to the Seller
pursuant to Section 2.8C.1(F) of the Administration Agreement
(exclusive of the amount of any such distribution attributable to the
reduction from time to time of the Specified Reserve Account Balance)
shall constitute payment to the Seller of the Deferred Payment portion
of the Purchase Price.
SECTION 4. CONDITIONS PRECEDENT TO SALE AND PURCHASE
(A) Activities Prior to the Sale
Following the execution of a Sale Agreement, Seller shall
provide any assistance requested by Purchaser in determining that all
required documentation on the Loans is present and correct.
(B) Continued Servicing
Seller shall service, or cause to be serviced, all Loans as
required under the Higher Education Act until the date of the Bill of
Sale.
(C) Bill of Sale/Loan Transmittal Summary Form
Seller shall deliver to Purchaser:
(i) a Bill of Sale executed by an authorized officer of the
Seller and the Interim Eligible Lender Trustee for the benefit
of the Seller, covering Loans offered by the
6
<PAGE>
Seller and accepted by Purchaser as set forth thereon,
selling, assigning and conveying to the Eligible Lender
Trustee for the benefit of the Purchaser and its assignees all
right, title and interest of the Seller and the Interim
Eligible Lender Trustee for the benefit of the Seller,
including the insurance interest of the Interim Eligible
Lender Trustee for the benefit of the Seller, in each of the
Loans, and stating that the representations and warranties
made by Seller in Section 5 of these Master Sale Terms are
true and correct on and as of the date of the Bill of Sale;
and
(ii) the Loan Transmittal Summary Form, attached to the Bill
of Sale, identifying each of the Eligible Loans which is the
subject of the Bill of Sale and setting forth the unpaid
Principal Balance of each such Loan.
(D) Endorsement
The Seller shall provide a blanket endorsement transferring
the entire interest of the Seller and the Interim Eligible Lender
Trustee for the benefit of Seller in the Loans to the Eligible Lender
Trustee for the benefit of the Purchaser with the form of endorsement
provided for in the Sale Agreement.
At the direction of and in such form as Purchaser may
designate, the Seller also agrees to individually endorse any Eligible
Loan as Purchaser may request from time to time.
(E) Officer's Certificate
Seller shall furnish to Purchaser, with each Bill of Sale
provided in connection with each sale of Loans pursuant to these Master
Sale Terms, an Officer's Certificate, dated as of the date of such Bill
of Sale.
(F) Loan Transfer Statement
Upon Purchaser's request, Seller shall deliver to Purchaser
one (1) or more Loan Transfer Statements (Department Form OE 1074 or
its equivalent) provided by Purchaser, executed by the Interim Eligible
Lender Trustee for the benefit of the Seller and dated the date of the
Bill of Sale. Seller agrees that Purchaser and the Eligible Lender
Trustee may use the Bill of Sale, including the Loan Transmittal
Summary Form attached to the Bill of Sale, in lieu of OE Form 1074, as
official notification to the Guarantor of the assignment by the Interim
Eligible Lender Trustee for the benefit of the Seller to the Eligible
Lender Trustee for the benefit of the Purchaser of the Loans listed on
the Bill of Sale.
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(G) Power of Attorney
Seller and the Interim Eligible Lender Trustee hereby grant to
the Eligible Lender Trustee on behalf of the 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 the Seller and the Interim Eligible Lender Trustee for the
benefit of the Seller any Eligible Loan to evidence the transfer of
such Eligible Loan to the Eligible Lender Trustee on behalf of the
Purchaser and to transfer or to cause to be transferred physical
possession of any Note from Sallie Mae or the Servicer to the Eligible
Lender Trustee or the Indenture Trustee or any other custodian on
behalf of either of them.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF SELLER AND
ELIGIBLE LENDER TRUSTEE
(A) General
Seller represents and warrants to Purchaser that with respect to a
portfolio of Loans as of the date of each Sale Agreement and Bill of Sale;
(i) The Interim Eligible Lender Trustee is an eligible lender
or other qualified holder of loans originated pursuant to the
Federal Family Education Loan Program established under the
Higher Education Act;
(ii) The Interim Eligible Lender Trustee and the Seller are
duly organized and existing under the laws of the applicable
jurisdiction;
(iii) The Interim Eligible Lender Trustee and the Seller have
all requisite power and authority to enter into and to perform
the terms of these Master Sale Terms and each Sale Agreement;
and
(iv) The Interim Eligible Lender Trustee and the Seller will
not, with respect to any Loan purchased under Sale Agreements
executed pursuant to these Master Sale Terms, agree to release
any Guarantor from any of its contractual obligations as an
insurer of such Loan or agree otherwise to alter, amend or
renegotiate any material term or condition under which such
Loan is insured, except as required by law or rules and
regulations issued pursuant to law, without the express prior
written consent of Purchaser.
(B) Particular
Seller represents and warrants to Purchaser as to the Loans
purchased by Purchaser under each Sale Agreement and
8
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each Bill of Sale executed pursuant to these Master Sale Terms:
(i) The Interim Eligible Lender Trustee for the benefit of the
Seller has good title to, and is the sole owner of, the Loans,
free and clear of all security interests, liens, charges,
claims, offsets, defenses, counterclaims or encumbrances of
any nature and no right of rescission, offsets, defenses, or
counterclaims have been asserted or threatened with respect to
the Loans;
(ii) The Loans are Eligible Loans and the description of the
Loans set forth in the Sale Agreement and the Loan Transmittal
Summary Form is true and correct;
(iii) The Interim Eligible Lender Trustee and the Seller are
authorized to sell, assign, transfer and repurchase the Loans;
and the sale, assignment and transfer of such Loans is or, in
the case of a Loan repurchased by the Seller and or the
Interim Eligible Lender Trustee, will be made pursuant to and
consistent with the laws and regulations under which the
Seller and the Interim Eligible Lender Trustee operate, 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 the Interim Eligible Lender Trustee or the Seller is
a party or by which the Interim Eligible Lender Trustee or
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 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 defense of infancy);
(v) Each Loan has been duly made and serviced in accordance
with the provisions of the Federal Family Education Loan
Program established under the Higher Education Act, and has
been duly insured by a Guarantor; such guarantee is in full
force and effect and is freely transferable to the Eligible
Lender Trustee for the benefit of the Purchaser as an incident
to the purchase of each Loan; and all premiums due and payable
to such Guarantor shall have been paid in full as of the date
of the Bill of Sale;
(vi) Any payments on the Loans received by the Interim
Eligible Lender Trustee for the benefit of the Seller which
have been allocated to reduction of principal and interest on
such Loans have been allocated on a simple interest basis; the
information with respect to the Loans
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<PAGE>
as of the Cutoff Date as stated on the Loan Transmittal
Summary Form is true and correct;
(vii) Due diligence and reasonable care have been exercised in
the making, administering, servicing and collecting the Loans
and, with respect to any Loan for which repayment terms have
been established, all disclosures of information required to
be made pursuant to the Higher Education Act have been made;
(viii) All origination fees authorized to be collected
pursuant to Section 438 of the Higher Education Act have been
paid to the Secretary;
(ix) Each Loan has been duly made and serviced in accordance
with the provisions of all applicable federal and state laws;
(x) No Loan is more than one hundred and twenty (120) days
Delinquent as of the Cutoff Date and no default, breach,
violation or event permitting acceleration under the terms of
any Loan has arisen; and neither the Seller nor any
predecessor holder of any Loan has waived any of the foregoing
other than as permitted by the Basic Documents;
(xi) It is the intention of Seller, the Interim Eligible
Lender Trustee, the Eligible Lender Trustee, and the
Purchaser, and the Seller hereby warrants, that the transfer
and assignment herein contemplated constitute a valid sale of
the Loans from Seller and the Interim Eligible Lender Trustee
to the Eligible Lender Trustee for the benefit of Purchaser
and that the beneficial interest in and title to such Loans
not be part of the Seller's estate in the event of the
bankruptcy of the Seller or the appointment of a receiver with
respect to Seller;
(xii) There is only one original executed copy of the
promissory note evidencing each Loan; and
(xiii) No Borrower of any Loan as of the Cutoff Date is noted
in the related Loan File as being currently involved in a
bankruptcy proceeding.
(C) The Eligible Lender Trustee and the Purchaser represent and warrant that as
of the date of each Sale Agreement and each Bill of Sale:
(i) The Eligible Lender Trustee is duly organized and validly
existing in good standing under the laws of its governing jurisdiction
and has an office located within the State of Delaware. It has all
requisite corporate power and
10
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authority to execute, deliver and perform its obligations under this
Sale Agreement;
(ii) The Eligible Lender Trustee has taken all corporate
action necessary to authorize the execution and delivery by it of these
Master Sale Terms and each Sale Agreement, and these Master Sale Terms
and each Sale Agreement have been and will be executed and delivered by
one of its officers who is duly authorized to execute and deliver the
Sale Agreement on its behalf;
(iii) Neither the execution nor the delivery by it of these
Master Sale Terms and each Sale Agreement, nor the consummation by it
of the transactions contemplated hereby or thereby nor compliance by it
with any of the terms or provisions hereof or thereof will contravene
any Federal or Delaware state law, governmental rule or regulation
governing the banking or trust powers of the Eligible Lender 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; and
(iv) The Eligible Lender Trustee is an "eligible lender" as
such term is defined in Section 435(d) of the Higher Education Act, for
purposes of holding legal title to the Trust Student Loans as
contemplated by these Master Sale Terms and each Sale Agreement and the
other Basic Documents, it has a lender identification number with
respect to the Trust Student Loans from the Department and has in
effect a Guarantee Agreement with each of the Guarantors with respect
to the Trust Student Loans.
SECTION 6. PURCHASE OF TRUST STUDENT LOANS; REIMBURSEMENT
Each party to this Agreement shall give notice to the other such
parties and to the Servicer, the Administrator and Sallie Mae 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 the Purchaser in any Trust Student Loan. In the event
of such a material breach which is not curable by reinstatement of the
applicable Guarantor's guarantee of such Trust Student Loan, Seller shall
repurchase any affected Trust Student Loan not later than 120 days following the
earlier of the date of discovery of such material breach and the date of receipt
of the Guarantor reject transmittal form with respect to such Trust Student
Loan. In the event of such a material breach which is curable by reinstatement
of the applicable Guarantor's guarantee of such Trust Student Loan, unless the
material breach shall have been cured within 360 days following the earlier of
the date of discovery of such material breach and the date of receipt of the
Guarantor reject transmittal form with respect to such Trust Student Loan, the
Seller shall purchase such Trust Student Loan not later than the sixtieth day
11
<PAGE>
following the end of such 360-day period. The Seller shall also remit as
provided in Section 2.6 of the Administration Agreement on the date of purchase
of any Trust Student Loan pursuant to this Section 6 an amount equal to all
nonguaranteed interest amounts and forfeited Interest Subsidy Payments and
Special Allowance Payments with respect to such Trust Student Loan. In
consideration of the purchase of any such Trust Student Loan pursuant to this
Section 6, the Seller shall remit the Purchase Amount in the manner specified in
Section 2.6 of the Administration Agreement.
In addition, if any breach of Section 5 hereof by the Seller does not
trigger such purchase obligation but does result in the refusal by a Guarantor
to guarantee all or a portion of the accrued interest (or any obligation of the
Purchaser to repay such interest to a Guarantor), or the loss (including any
obligation of the Purchaser to repay the Department) of Interest Subsidy
Payments and Special Allowance Payments, with respect to any Trust Student Loan
affected by such breach, then the Seller shall reimburse the Purchaser by
remitting an amount equal to the sum of all such nonguaranteed interest amounts
and such forfeited Interest Subsidy Payments or Special Allowance Payments in
the manner specified in Section 2.6 of the Administration Agreement not later
than (i) the last day of the next Collection Period ending not less than 60 days
from the date of the Guarantor's refusal to guarantee all or a portion of
accrued interest or loss of Interest Subsidy Payments or Special Allowance
Payments, or (ii) in the case where the Seller reasonably believes such losses
are likely to be collected, not later than the last day of the next Collection
Period ending not less than 360 days from the date of the Guarantor's refusal to
guarantee all or a portion of accrued interest or loss of Interest Subsidy
Payments or Special Allowance Payments. At the time such payment is made, the
Seller shall not be required to reimburse the Purchaser for interest that is
then capitalized, however, such amounts shall be reimbursed if the borrower
subsequently defaults and such capitalized interest is not paid by the
Guarantor.
Anything in this Section 6 to the contrary notwithstanding, if as of
the last Business Day of any month the aggregate outstanding principal amount of
Trust Student Loans with respect to which claims have been filed with and
rejected by a Guarantor or with respect to which the Servicer determines that
claims cannot be filed pursuant to the Higher Education Act as a result of a
breach by the Seller or the Servicer, exceeds 1% of the Pool Balance, the Seller
or the Servicer shall purchase, within 30 days of a written request of the
Eligible Lender Trustee or the Indenture Trustee, such affected Trust Student
Loans in an aggregate principal amount such that after such purchase the
aggregate principal amount of such affected Trust Student Loans is less than 1%
of the Pool Balance. The Trust Student Loans to be purchased by the Seller or
the Servicer pursuant to the preceding sentence shall be based on the date of
claim rejection (or the date of notice referred to in the first sentence of this
Section 6), with Trust Student Loans with the earliest such date to be purchased
first.
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In lieu of repurchasing Trust Student Loans pursuant to this Section 6,
the Seller may, at its option, substitute Eligible Loans or arrange for the
substitution of Eligible Loans which are substantially similar on an aggregate
basis as of the date of substitution to the Trust Student Loans for which they
are being substituted with respect to the following characteristics:
(1) status (i.e., in-school, grace, deferment, forbearance
or repayment),
(2) program type (i.e., Unsubsidized Stafford, Subsidized
Stafford, Consolidation (pre-1993 vs. post-1993), PLUS
or SLS),
(3) school type,
(4) total return,
(5) principal balance, and
(6) remaining term to maturity.
In addition, each substituted Eligible Loan will comply, as of the date
of substitution, with all of the representations and warranties made hereunder.
In choosing Eligible Loans to be substituted pursuant to this Section 6, the
Seller shall make a reasonable determination that the Eligible Loans to be
substituted will not have a material adverse effect on the Noteholders and the
Certificateholders.
In the event that Seller elects to substitute Eligible Loans pursuant
to this Section 6, the Seller will remit to the Administrator the amount of any
shortfall between the Purchase Amount of the substituted Eligible Loans and the
Purchase Amount of the Trust Student Loans for which they are being substituted.
The Seller shall also remit to the Administrator an amount equal to all
nonguaranteed interest amounts and forfeited Interest Subsidy Payments and
Special Allowance Payments with respect to the Trust Student Loans in the manner
provided in Section 2.6 of the Administration Agreement. The sole remedy of the
Purchaser, the Eligible Lender Trustee, the Certificateholders and the
Noteholders with respect to a breach by the Seller pursuant to Section 5 hereof
shall be to require the Seller to purchase Trust Student Loans, to reimburse the
Purchaser as provided above or to substitute Student Loans pursuant to this
Section. The Eligible Lender Trustee shall have no duty to conduct any
affirmative investigation as to the occurrence of any condition requiring the
purchase of any Trust Student Loan or the reimbursement for any interest penalty
pursuant to this Section 6.
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 Loan sold
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<PAGE>
to Purchaser, which payment is not reflected in the Loan Transmittal
Summary Form, shall be received by Seller in trust for the account of
Purchaser and the Seller hereby disclaims any title to or interest in
any such amounts. Within two (2) business days following the date of
receipt, Seller shall remit to Purchaser an amount equal to any such
payments along with a listing on a form provided by Purchaser
identifying the 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 Loan subject to any Sale 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.
SECTION 8. CONTINUING OBLIGATION OF SELLER
Seller shall provide all reasonable assistance necessary for Purchaser
to resolve account problems raised by any Borrower, the Guarantor or the
Secretary provided such account problems are attributable to or are alleged to
be attributable to (a) an event occurring during the period Seller owned the
Loan, or (b) a payment made or alleged to have been made to Seller. Further, the
Seller agrees to execute any financing statements at the request of the
Purchaser in order to reflect the Purchaser's interest in the Loans.
SECTION 9. LIABILITY OF SELLER; INDEMNITIES
The Seller shall be liable in accordance herewith only to the extent of
the obligations specifically undertaken by the Seller under this Sale Agreement.
(i) The Seller shall indemnify, defend and hold harmless the Purchaser
and the Eligible Lender 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
Eligible Lender Trustee), including any sales, gross receipts, general
corporation, tangible and
intangible personal property, privilege or license taxes and costs and
expenses in defending against the same.
(ii) The Seller shall indemnify, defend and hold harmless the Purchaser
and the Eligible Lender Trustee in its individual capacity and their
officers, directors, employees and agents of the Purchaser and the
Eligible Lender Trustee from and
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<PAGE>
against any and all costs, expenses, losses, claims, damages and
liabilities arising out of, or imposed upon such Person through, the
Seller's willful misfeasance, bad faith or gross negligence in the
performance of its duties under the Sale Agreement, or by reason of
reckless disregard of its obligations and duties under the Sale
Agreement.
(iii) The Seller shall be liable as primary obligor for, and shall
indemnify, defend and hold harmless the Eligible Lender 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 Sale Agreement, the other Basic Documents, the
acceptance or performance of the trusts and duties set forth herein and
in the Sale Agreement or the action or the inaction of the Eligible
Lender 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 Eligible Lender Trustee, (b) shall arise from any
breach by the Eligible Lender Trustee of its covenants in its
individual capacity under any of the Basic Documents; or (c) shall
arise from the breach by the Eligible Lender Trustee of any of its
representations or warranties in its individual capacity set forth in
these Master Sale Terms or any Sale Agreement. In the event of any
claim, action or proceeding for which indemnity will be sought pursuant
to this paragraph, the Eligible Lender Trustee's choice of legal
counsel shall be subject to the approval of the Seller, which approval
shall not be unreasonably withheld.
Indemnification under this Section shall survive the resignation or
removal of the Eligible Lender Trustee and the termination of these Master Sale
Terms and shall include reasonable fees and expenses of counsel and expenses of
litigation. If the 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 the Seller, without interest.
SECTION 10. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF SELLER
Any Person (a) into which the Seller may be merged or consolidated, (b)
which may result from any merger or consolidation to which the Seller shall be a
party or (c) which may succeed to the properties and assets of the Seller
substantially as a whole, shall be the successor to the Seller without the
execution or filing of any document or any further act by any of the parties to
these Master Sale Terms; PROVIDED, HOWEVER, that the Seller hereby covenants
that it will not consummate any of the foregoing transactions except upon
satisfaction of the following: (i) the surviving
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Person, if other than the Seller, executes an agreement of assumption to perform
every obligation of the Seller under these Master Sale Terms, (ii) immediately
after giving effect to such transaction, no representation or warranty made
pursuant to Section 5 herein shall have been breached, (iii) the surviving
Person, if other than the Seller, shall have delivered to the Eligible Lender
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
these Master Sale Terms relating to such transaction have been complied with,
and that the Rating Agency Condition shall have been satisfied with respect to
such transaction, (iv) if the Seller is not the surviving entity, such
transaction will not result in a material adverse Federal or state tax
consequence to the Purchaser, the Noteholders or the Certificateholders and (v)
if the Seller is not the surviving entity, the Seller shall have delivered to
the Eligible Lender 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 Purchaser and the
Eligible Lender Trustee, respectively, in the 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
The 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 the
Seller's obligations under Section 5 herein). The 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 these Master Sale Terms or any Sale
Agreement, and that in its opinion may involve it in any expense or liability.
Except as provided herein, the repurchase (or substitution) 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 to the extent that the
aggregate Principal Balance listed on the Bill of Sale is less than the
aggregate Principal Balance stated on the Bill of Sale, Seller shall remit such
amount to the Eligible Lender Trustee for the benefit of the Purchaser. Such
reconciliation payment shall be made from time to time but no less frequently
than semi-annually.
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SECTION 12. LIMITATION OF LIABILITY OF ELIGIBLE LENDER
TRUSTEE
Notwithstanding anything contained herein to the contrary, these
Master Sale Terms and any Sale Agreement have been signed by Chase Manhattan
Bank Delaware not in its individual capacity but solely in its capacity as
Eligible Lender Trustee for the Purchaser and the Interim Eligible Lender
Trustee for the Seller, as the case may be, and in no event shall Chase
Manhattan Bank Delaware in its individual capacity, have any liability for the
representations, warranties, covenants, agreements or other obligations of the
Eligible Lender Trustee, the Interim Eligible Lender Trustee, the Purchaser or
of the Seller, respectively, under these Master Sale Terms or any Sale Agreement
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 Purchaser
or the Seller, as the case may be.
SECTION 13. EXPENSES
Except as otherwise provided herein, each party to these Master Sale
Terms or any Sale Agreement shall pay its own expense incurred in connection
with the preparation, execution and delivery of these Master Sale Terms or any
Sale 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 Sale Agreements executed pursuant to these Master Sale
Terms shall survive the consummation of the purchase of the Loans provided for
in each Sale Agreement. All covenants, agreements, representations and
warranties made or furnished pursuant hereto by or for the benefit of Seller
shall bind and inure to the benefit of any successors or assigns of Purchaser
and shall survive with respect to each Loan. Each Sale Agreement supersedes all
previous agreements and understandings between Purchaser and Seller with respect
to the subject matter thereof. A Sale 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 Sale Agreement shall not be
deemed to be a waiver of any breach of any other covenant, agreement,
representation, warranty or provision herein contained or contained in any Sale
Agreement, 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 Sale
Agreement, be construed to lessen the right of Purchaser to insist upon the
performance by Seller in strict accordance with said terms.
17
<PAGE>
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 Sale 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 these Master
Sale Terms and any Sale Agreement, and all proceedings to be taken in connection
with these Master Sale Terms and any Sale 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
These Master Sale Terms and any Sale 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 Sale Terms and
Sale 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 Eligible Lender Trustees, materially and
adversely affect the interest of any such Noteholder or Certificateholder.
In addition, these Master Sale Terms and any Sale Agreement may also be
amended from time to time by the Seller, the Interim Eligible Lender Trustee,
the Eligible Lender Trustee and the 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 these Master
Sale Terms or any Sale 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 time of, collections of payments with respect to 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
18
<PAGE>
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 Eligible
Lender 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 if such consent shall
approve the substance thereof.
Prior to the execution of any amendment to these Master Sale Terms, the
Eligible Lender 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 Sale Agreement and the Opinion of Counsel referred to in Section 7.1 I((i)
of the Administration Agreement. The Eligible Lender Trustee may, but shall not
be obligated to, enter into any such amendment which affects the Eligible Lender
Trustee's own rights, duties or immunities under this Agreement or otherwise.
SECTION 18. NONPETITION COVENANTS
Notwithstanding any prior termination of these Master Sale Terms,
Seller and the Interim Eligible Lender 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, assignee, 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.
Notwithstanding any prior termination of these Master Sale Terms, the
Eligible Lender Trustee and the Purchaser shall not acquiesce, petition or
otherwise invoke or cause Seller to invoke the process 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 Seller or any
substantial part of its property, or ordering the winding up or liquidation of
the affairs of the Purchaser.
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<PAGE>
SECTION 19. ASSIGNMENT
Seller and the Interim Eligible Lender Trustee each hereby assigns its
entire right, title and interest as purchaser and as the Interim Eligible Lender
Trustee under the Purchase Agreement Master Securitization Terms Number 1000 and
any Purchase Agreement thereunder to Purchaser as of the date hereof and
acknowledges that the Purchaser and the Eligible Lender Trustee on behalf of the
Purchaser will assign the same, together with the right, title and interest of
the Purchaser and the Eligible Lender Trustee hereunder, to the Indenture
Trustee under the Indenture.
SECTION 20. GOVERNING LAW
These Master Sale Terms and any Sale Agreements shall be governed by
and construed in accordance with the laws of the State of New York 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.
20
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SLM STUDENT LOAN TRUST 1999-3 SLM FUNDING CORPORATION
(Purchaser) (Seller)
by Chase Manhattan Bank Delaware,
not in its individual capacity
but solely as Eligible Lender By: /s/ J. LANCE FRANKE
Trustee --------------------------------
Name: J. LANCE FRANKE
-------------------------------
By: /s/ JOHN J. CASHIN Title: CHIEF FINANCIAL OFFICER
-------------------------------- -----------------------------
Name: JOHN J. CASHIN
-------------------------------
Title: VICE PRESIDENT
-------------------------------
CHASE MANHATTAN BANK DELAWARE CHASE MANHATTAN BANK DELAWARE,
(Not in its individual (Not in its individual capacity
capacity but solely as but solely as Interim Eligible
Eligible Lender Trustee) Lender Trustee)
By: /s/ JOHN J. CASHIN By: /s/ JOHN J. CASHIN
-------------------------------- -----------------------------
Name: JOHN J. CASHIN Name: JOHN J. CASHIN
------------------------------ --------------------------------
Title: VICE PRESIDENT Title: VICE PRESIDENT
---------------------------- --------------------------------
21
<PAGE>
ATTACHMENT A
SALE AGREEMENT
DATED AS OF FEBRUARY 15, 2000
SALE AGREEMENT NUMBER 1
Each of the Chase Manhattan Bank Delaware as Interim Eligible Lender
Trustee (the "Interim Eligible Lender Trustee") for the benefit of SLM
Funding Corporation (the "Seller") and the Seller hereby offer for sale to
the Eligible Lender Trustee on behalf of SLM Student Loan Trust 2000-1
("Purchaser") the entire right, title and interest of the Seller and the
Interim Eligible Lender Trustee in the Loans described in the Bill of Sale
and Loan Transmittal Summary Form incorporated herein and, to the extent
indicated below, the Eligible Lender Trustee on behalf of the Purchaser
accepts the Seller's and the Interim Eligible Lender Trustee's offer. In
order to qualify as Eligible Loans, no payment of principal or interest
shall be more than one hundred and twenty (120) days Delinquent as of the
Cutoff Date which date shall be January 17, 2000.
TERMS, CONDITIONS AND COVENANTS
In consideration of the Purchase Price, each of the Seller and the
Interim Eligible Lender Trustee for the benefit of the Seller hereby sells
to the Eligible Lender Trustee for the benefit of the Purchaser the entire
right, title and interest of the Seller and the Interim Eligible Lender
Trustee in the Loans accepted for purchase, subject to all the terms and
conditions of the Sale Agreement Master Securitization Terms Number 1000
("Master Sale Terms") and amendments, each incorporated herein by reference,
among Seller, Interim Eligible Lender Trustee, Purchaser, and the Eligible
Lender Trustee. The Initial Payment of the Loans shall equal $2,039,185,273
(equal to $2,044,191,783 (representing the sale price of the Securities less
underwriters' commissions and fees) less $5,006,510 (representing the
Reserve Account Initial Deposit)).
This document shall constitute a Sale Agreement as referred to in the
Master Sale Terms and, except as modified herein, each term used herein
shall have the same meaning as in the Master Sale Terms. All references in
the Master Sale Terms to Loans or Eligible Loans shall be deemed to refer to
the Loans governed by this Sale Agreement. Seller hereby makes, as of the
date hereof, all the representations and warranties contained in the Master
Sale Terms and makes such representations and warranties with respect to the
Loans governed by this Sale Agreement.
Each of the Seller and the Interim Eligible Lender Trustee for the
benefit of the Seller authorizes the Eligible Lender Trustee for the benefit
of the Purchaser to use a copy of the Bill of Sale, including the Loan
Transmittal Summary Form attached to the Bill of Sale (in lieu of OE Form
1074) as official notification to the applicable Guarantors of assignment to
the Eligible Lender
<PAGE>
Trustee for the benefit of the Purchaser of the Loans on the date of
purchase.
The parties hereto intend that the transfer of Loans described in the
Bill of Sale and Loan Transmittal Summary Form be, and be construed as, a
valid sale of such Loans. However, in the event that notwithstanding the
intentions of the parties, such transfer is deemed to be a transfer for
security, then each of the Interim Eligible lender Trustee and the Seller
hereby grants to the Eligible Lender Trustee on behalf of the Purchaser a
first priority security interest in and to all Loans described in the Bill
of Sale and Loan Transmittal Summary Form to secure a loan in an amount
equal to the Purchase Price of such Loans.
2
<PAGE>
SLM FUNDING CORPORATION SLM STUDENT LOAN TRUST 2000-1
(Seller) (Purchaser)
by Chase Manhattan Bank Delaware,
not in its individual capacity but
By:___________________________ solely as Eligible Lender Trustee
Name:_________________________
Title:________________________ By: ____________________________
Name:___________________________
Title:__________________________
CHASE MANHATTAN BANK DELAWARE CHASE MANHATTAN BANK DELAWARE
(not in its individual (not in its individual
capacity but solely as Interim capacity but solely as Eligible
Eligible Lender Trustee) Lender Trustee)
By:___________________________ By:___________________________
Name:_________________________ Name:_________________________
Title:________________________ Title:________________________
3
<PAGE>
SALE AGREEMENT NUMBER 1
BLANKET ENDORSEMENT DATED FEBRUARY 15, 2000
SLM Funding Corporation ("Seller") and Chase Manhattan Bank Delaware as
Interim Eligible Lender Trustee for the benefit of the 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
the Seller and the Interim Eligible Lender Trustee for the benefit of the Seller
in favor of Chase Manhattan Bank Delaware as Eligible Lender Trustee on behalf
of SLM Student Loan Trust 2000-1 (the "Purchaser"). This endorsement is in
blank, unrestricted form and without recourse except as provided in Section 6 of
the Master Sale Terms referred to in the Sale Agreement among Seller, Purchaser,
Interim Eligible Lender Trustee, and the Eligible Lender Trustee which covers
this promissory note.
This endorsement may be effected by attaching either this instrument or
a facsimile hereof to each or any of the Notes.
Notwithstanding the foregoing, the Interim Eligible Lender Trustee for
the benefit of the 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 the 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 SALE AGREEMENT
MASTER LOAN SECURITIZATION TERMS 1000. BY EXECUTION HEREOF, THE SELLER
ACKNOWLEDGES THAT THE SELLER HAS READ, UNDERSTANDS AND AGREES TO BE BOUND BY ALL
TERMS, CONDITIONS AND COVENANTS OF THE SALE AGREEMENT (" SALE AGREEMENT"). THE
SALE AND PURCHASE SHALL BE CONSUMMATED UPON PURCHASER'S PAYMENT TO SELLER OF THE
INITIAL PAYMENT AS DEFINED IN THE MASTER SALE TERMS AND, UNLESS OTHERWISE AGREED
BY SELLER AND PURCHASER, SHALL BE EFFECTIVE AS OF THE DATE OF THE BILL OF SALE.
SELLER
---------------------------------
Chase Manhattan Bank Delaware not in its individual capacity but solely in its
individual capacity but solely as Interim Eligible Lender Trustee for the
Benefit of SLM Funding Corporation
Lender Code: 833 253
By: _____________________________
(Signature of Authorized
Officer)
Name: ___________________________
Title: __________________________
PURCHASER
-------------------------------
Chase Manhattan Bank Delaware not in its individual capacity but solely as
Eligible Lender Trustee on behalf of SLM Student Loan Trust 2000-1
By: ___________________________
(Signature of Authorized
Signatory for Purchaser)
Name: _________________________
Title: ________________________
Date of Purchase: Feb. 15, 2000
---------------------------------------------------------------------
NOTE: Boxed areas on this form are to be completed by Purchaser.
---------------------------------------------------------------------
1
<PAGE>
BILL OF SALE DATED FEBRUARY 15, 2000
The undersigned SLM Funding Corporation ("Seller") and Chase Manhattan
Bank Delaware as Interim Eligible Lender Trustee for the benefit of the Seller
under the Interim Trust Agreement dated as of February 1, 2000 ("Interim
Eligible Lender Trustee"), for value received and pursuant to the terms and
conditions of Sale Agreement Number 1 ("Sale Agreement") among Seller, the
Interim Eligible Lender Trustee, SLM Student Loan Trust 2000-1 ("Purchaser") and
Chase Manhattan Bank Delaware as the Eligible Lender Trustee, do hereby sell,
assign and convey to the Eligible Lender Trustee on behalf of Purchaser and its
assignees all right, title and interest of Seller and the Interim Eligible
Lender Trustee, including the insurance interest of Seller and the Interim
Eligible Lender Trustee under the Federal Family Education Loan Program (20
U.S.C. 1071 ET SEQ.), in the Loans identified herein which the Eligible Lender
Trustee on behalf of Purchaser has accepted for purchase. The portfolio accepted
for purchase by the Eligible Lender Trustee on behalf of Purchaser and the
effective date of sale and purchase are described below and the individual
Accounts are listed on the Schedule A attached hereto.
Seller hereby makes the representations and warranties set forth in
Section 5 of the Sale Agreement Master Securitization Terms Number 1000
incorporated by reference in the Sale Agreement. Seller and the Interim Eligible
Lender Trustee authorize the Eligible Lender Trustee on behalf of Purchaser to
use a copy of this document (in lieu of OE Form 1074) as official notification
to the Guarantor(s) of assignment to the Eligible Lender Trustee on behalf of
Purchaser of the Loans on the date of purchase.
LISTING OF LOANS ON FOLLOWING PAGE
2
<PAGE>
[INSERT TABLE]
3
<PAGE>
ADDITIONAL LOAN CRITERIA
Not in claims status, not previously rejected
Not in litigation
Last disbursement is greater than 120 days from cutoff date
Loan is not swap-pending
*Based upon Seller's estimated calculations, which may be adjusted upward or
downward based upon Purchaser's reconciliation.
**Includes interest to be capitalized.
4
<PAGE>
Guarantor(s):
American Student Assistance Guarantor
California Student Aid Commission
Colorado Student Loan Program
Connecticut Student Loan Foundation
Education Assistance Corporation
Educational Credit Management Corporation
Finance Authority of Maine
Florida Department of Education Office of Student Financial Assistance
Georgia Higher Education Assistance Corp.
Great Lakes Higher Education Corporation
Illinois Student Assistance Commission
Iowa College Student Aid Commission
Kentucky Higher Education Assistance Authority
Louisiana Student Financial Assistance Commission
Michigan Higher Education Assistance Authority
Missouri Coordinating Board for Higher Education
Montana Guaranteed Student Loan Program
Nebraska Student Loan Program
New Jersey Higher Education Assistance Authority
New York State Higher Education Services Corporation
Northwest Education Loan Association
Oklahoma State Regents for Higher Education
Oregon State Scholarship Commission
Pennsylvania Higher Education Assistance Agency
Rhode Island Higher Education Assistance Authority
Student Loan Guarantee Foundation of Arkansas, Inc.
Tennessee Student Assistance Corporation
Texas Guaranteed Student Loan Corporation
United Student Aid Funds, Inc.
Utah Higher Education Assistance Authority
5
<PAGE>
SELLER
- ---------------------------------
Chase Manhattan Bank Delaware, not in its individual capacity but solely as
Interim Eligible Lender Trustee on behalf of SLM Funding Corporation
Lender Code: _____________
By:______________________________
(Signature of Authorized Officer) -----------------------------------------
Name:____________________________
Title:___________________________
SLM FUNDING CORPORATION
By:______________________________ -----------------------------------------
(Signature of Authorized Officer)
Name:____________________________
Title:___________________________
1
<PAGE>
PURCHASER
Chase Manhattan Bank Delaware, not in its individual capacity but solely as
Eligible Lender Trustee on behalf of SLM Student Loan Trust 2000-1
By: __________________________
(Signature of Authorized
Signatory for Purchaser)
Name: _________________________
Title: ________________________
Date of Purchase:February 15, 2000
-----------------------------------------------------
NOTE: Boxed areas are for completion by Purchaser
-----------------------------------------------------
2
<PAGE>
Exhibit 99.3
-----------------------------------------------------------------------
SLM STUDENT LOAN TRUST 2000-1
ADMINISTRATION AGREEMENT SUPPLEMENT
Dated as of February 15, 2000
to
MASTER ADMINISTRATION AGREEMENT
Dated as of May 1, 1997
Between
SLM FUNDING CORPORATION
and
STUDENT LOAN MARKETING ASSOCIATION
-----------------------------------------------------------------
<PAGE>
SLM Student Loan Trust 2000-1 Administration Agreement Supplement dated as
of February 15, 2000 (the "Supplement") to the Master Administration Agreement
dated as of May 1, 1997 (the "Agreement") between SLM Funding Corporation (the
"Seller") and Student Loan Marketing Association (the "Administrator").
This Supplement is being delivered to the Administrator pursuant to and in
satisfaction of the conditions set forth in Section 1.2(a) of the Agreement with
respect to SLM Student Loan Trust 2000-1 (the "Trust"). The provisions of this
Supplement shall be applicable only to SLM Student Loan Trust 2000-1.
1. The following entities are hereby designated in accordance with clause 1 of
Section 1.2(a) of the Agreement:
The Trust: SLM Student Loan Trust 2000-1
The Eligible Lender Trustee: Chase Manhattan Bank Delaware
The Interim Eligible Lender Trustee: Chase Manhattan Bank Delaware
The Indenture Trustee: Bankers Trust Company
The initial deposit into the Collection Account on the Closing Date in
accordance with Section 2.6.C of the Agreement shall be: $0.
2. Attached hereto are (i) Appendix A (SLM Student Loan Trust 2000-1) containing
those definitions which shall be applicable to this Supplement and to the
Agreement in connection with the Trust and this Supplement in place of the
definitions contained in Appendix A (Master) attached to the Agreement; and (ii)
a cross-reference table indicating modifications to the articles and sections of
the Basic Documents referred to in the Agreement.
3. Each of the Basic Documents (other than the Agreement) has been executed and
delivered by each of the parties thereto, are being delivered to the
Administrator together with this Supplement and are in substantially the
respective forms attached to the Agreement as Exhibits B through I;
4. Notwithstanding anything to the contrary set forth in Section 2.3.C.2 of the
Master Administration Agreement, the Indenture Trustee shall have no liability
or obligation in respect of any failed Delivery, as contemplated therein, other
than with respect to a Delivery which fails as a result of any action or
inaction on behalf of the Indenture Trustee.
5. The Agreement is hereby modified for purposes of SLM Student Loan Trust
2000-1 only as follows:
(a) Section 2.7C is deleted and replaced with the following:
2
<PAGE>
C. The Administrator shall instruct the Indenture Trustee in writing no
later than the second business day preceding each Distribution Date (based on
the information contained in the Administrator's Certificate and the related
Servicer's Report delivered pursuant to Section 3.1 (A) and (C)) to make the
following deposits and distributions to the Persons or to the account specified
below by 1:00 p.m. (New York time) on such Distribution Date, to the extent of
the amount of Available Funds in the Collection Account, in the following order
of priority, and the Indenture Trustee shall comply with such instructions:
1. to the Servicer, the Primary Servicing Fee due on such Distribution
Date;
2. to the Administrator, from the amount of Available Funds remaining
after the application of clause 1, the Administration Fee due on such
Distribution Date and all unpaid Administration Fees from prior
Collection Periods;
3. to the Rate Cap Swap Counterparty, from the amount of Available Funds
remaining after the application of clauses 1 and 2, the Swap Fee due
on such Distribution Date and all unpaid Swap Fees from prior
Distribution Dates;
4. to the Noteholders, from the amount of Available Funds remaining after
the application of clauses 1 through 3, the Noteholders' Interest
Distribution Amount, ratably, without preference or priority of any
kind, according to the amounts payable on the Notes in respect of
Noteholders' Interest Distribution Amount;
5. to the Eligible Lender Trustee on behalf of the Certificateholders,
from the amount of Available Funds remaining after the application of
clauses 1 through 4, the Certificateholders' Return Distribution
Amount, for distribution by the Eligible Lender Trustee pursuant to
the Trust Agreement, ratably, without preference or priority of any
kind, according to the amounts payable in respect of
Certificateholders' Return Distribution Amount;
6. to the Class A-1 Noteholders, from the amount of Available Funds
remaining after the application of clauses 1 through 5, the
Noteholders' Principal Distribution Amount, ratably, without
preference or priority of any kind, according to the amounts payable
on the Class A-1 Notes for principal;
3
<PAGE>
7. on each Distribution Date on and after which the Class A-1 Notes have
been paid in full, to the Class A-2 Noteholders, from the amount of
Available Funds remaining after the application of clauses 1 through
6, the Noteholders' Principal Distribution Amount, ratably, without
preference or priority of any kind, according to the amounts payable
on the Class A-2 Notes for principal;
8. on each Distribution Date on and after the date on which the Notes
have been paid in full, to the Eligible Lender Trustee on behalf of
the Certificateholders, from the amount of Available Funds remaining
after the application of clauses 1 through 7, the Certificate Balance
Distribution Amount for distribution by the Eligible Lender Trustee
pursuant to the Trust Agreement, ratably, without preference or
priority of any kind, according to the amounts payable in respect of
the Certificate Balance;
9. to the Reserve Account, from the amount of Available Funds remaining
after the application of clauses 1 through 8, the amount, if any,
necessary to reinstate the balance of the Reserve Account up to the
Specified Reserve Account Balance;
10. to the Reimbursement Swap Counterparty, from the amount of Available
Funds remaining after the application of clauses 1 through 9, the
aggregate unpaid amount of any Swap Payments, if any;
11. to the Servicer, from the amount of Available Funds remaining after
the application of clauses 1 through 10, the aggregate unpaid amount
of the Carryover Servicing Fee, if any; and
12. to the Reserve Account, the amount of Available Funds remaining after
the application of clauses 1 through 11.
Notwithstanding the foregoing, if (a) on any Distribution Date following
all distributions to be made on such Distribution Date the Outstanding Amount of
the Notes would be in excess of (i) the outstanding principal balance of the
Trust Student Loans plus (ii) any accrued but unpaid interest on the Trust
Student Loans as of the last day of the related Collection Period plus (iii) the
balance of the Reserve Account on such Distribution Date following such
distributions minus (iv) the Specified Reserve Account Balance for that
Distribution Date, or (b) an Insolvency Event with respect to the Seller or an
Event of Default has occurred and is continuing, then amounts on deposit in the
Collection Account and the Reserve Account shall be
4
<PAGE>
applied on such Distribution Date to the payment of the Noteholders'
Distribution Amount before any amounts are applied to the payment of the
Certificateholders' Distribution Amount.
(b) Section 2.8 is deleted and replaced with the following:
SECTION 2.8 RESERVE ACCOUNT.
A. On the Closing Date, the Issuer shall deposit the Reserve Account
Initial Deposit into the Reserve Account.
B.1. In the event that the Primary Servicing Fee for any Monthly Servicing
Payment Date or Distribution Date exceeds the amount distributed to
the Servicer pursuant to Sections 2.7B and 2.7C.1 on such Monthly
Servicing Payment Date or Distribution Date, the Administrator shall
instruct the Indenture Trustee in writing to withdraw from the Reserve
Account on such Monthly Servicing Payment Date or Distribution Date an
amount equal to such excess, to the extent of funds available therein,
and to distribute such amount to the Servicer; PROVIDED, HOWEVER,
that, except as provided in Sections 2.8C(C) and 2.8D, amounts on
deposit in the Reserve Account will not be available to cover any
unpaid Carryover Servicing Fees to the Servicer.
2. In the event that the Administration Fee for any Distribution Date
exceeds the amount distributed to the Administrator pursuant to
Section 2.7C.2 on such Distribution Date, the Administrator shall
instruct the Indenture Trustee in writing to withdraw from the Reserve
Account on each Distribution Date an amount equal to such excess, to
the extent of funds available therein after giving effect to paragraph
B.1 above, and to distribute such amount to the Administrator.
3. In the event that the Swap Fee for any Distribution Date exceeds the
amount distributed to the Rate Cap Swap Counterparty pursuant to
Section 2.7C.3 on such Distribution Date, the Administrator shall
instruct the Indenture Trustee in writing to withdraw from the Reserve
Account on each Distribution Date an amount equal to such excess, to
the extent of funds available therein after giving effect to
paragraphs B.1 and B.2 above, and to distribute such amount to the
Rate Cap Swap Counterparty.
4. In the event that the Noteholders' Interest Distribution Amount and
the Certificateholders' Return Distribution Amount for a Distribution
Date exceeds the amount distributed to Noteholders and to the
5
<PAGE>
Certificateholders pursuant to Section 2.7C.4 and C.5 on such
Distribution Date, the Administrator shall instruct the Indenture
Trustee in writing to withdraw from the Reserve Account on such
Distribution Date an amount equal to such excess, to the extent of
funds available therein after giving effect to paragraphs B.1 through
B.3 above, and to distribute such amount to the Noteholders and to the
Certificateholders entitled thereto, in the same order and priority as
is set forth in Sections 2.7C.4 and C.5 subject to the last paragraph
of Section 2.7C.
5. In the event that the Noteholders' Principal Distribution Amount on
the Final Distribution Date with respect to each Class of Notes
exceeds the amount distributed to such Noteholders pursuant to Section
2.7C.6 and 2.7C.7 on such Distribution Date, the Administrator shall
instruct the Indenture Trustee in writing to withdraw from the Reserve
Account on such final Distribution Date an amount equal to such
excess, to the extent of funds available therein after giving effect
to paragraphs B.1 through B.4 above, and to distribute such amount to
the Noteholders entitled thereto, in the same order and priority as is
set forth in Sections 2.7C.6 and 2.7C.7.
6. In the event that the Certificateholders' Balance Distribution Amount
on the final Distribution Date with respect to the Certificates
exceeds the amount distributed to the Certificateholders pursuant to
Section 2.7C.8 on such Distribution Date, the Administrator shall
instruct the Indenture Trustee in writing to withdraw from the Reserve
Account on such Distribution Date an amount equal to such excess, to
the extent of funds available therein after giving effect to
paragraphs B.1 through B.5 above, and to distribute such amount to the
Eligible Lender Trustee on behalf of the Certificateholders, for
distribution to the Certificateholders entitled thereto.
C.1. After giving effect to Section 2.8B, if the amount on deposit in the
Reserve Account on any Distribution Date (after giving effect to all deposits or
withdrawals therefrom on such Distribution Date other than pursuant to this
paragraph C) is greater than the Specified Reserve Account Balance for such
Distribution Date, the Administrator shall instruct the Indenture Trustee in
writing (A) to pay to the Noteholders out of such excess in the Reserve Account
an amount equal to the Note Principal Shortfall, if any; (B) to pay to the
Certificateholders out of such excess in the Reserve Account an amount equal to
the Certificate Balance Shortfall, if any; (C) to pay the Reimbursement Swap
Counterparty out of such excess in the Reserve
6
<PAGE>
Account an amount equal to the amount described in Section 2.7C.10 for such
Distribution Date (to the extent not otherwise paid to the Reimbursement Swap
Counterparty on such Distribution Date); (D) to pay to the Servicer out of such
excess in the Reserve Account an amount equal to the amount described in Section
2.7C.11 for such Distribution Date (to the extent not otherwise paid to the
Servicer on such Distribution Date); (E) in the event the Trust Student Loans
are not sold pursuant to Section 6.1A, to pay as an accelerated payment of
principal balance of the Notes or Certificate Balance, as the case may be, first
to the Noteholders in the same order and priority as is set forth in Sections
2.7C.6 and C.7 until the principal amount of the Notes is paid in full and then
to the Certificateholders until the Certificate Balance is reduced to zero,
PROVIDED that the amount of such distribution shall not exceed the outstanding
principal balance of the Notes or the Certificate Balance, as applicable, after
giving effect to all other payments in respect of principal of Notes and
Certificate Balance to be made on such date; and (F) to distribute the remaining
amount of such excess to the Seller. Amounts properly distributed to the Seller
pursuant to this paragraph C.1 shall be deemed released from the Trust Estate
and the security interest therein granted to the Indenture Trustee, and the
Seller shall in no event thereafter be required to refund any such distributed
amounts.
C.2. In the event of a termination of a Swap Agreement that requires the
Trust to make a termination payment to the applicable Swap Counterparty, such
termination payment shall be paid in the same order of priority as the Swap Fee
in Sections 2.7C.3 and 2.8B.3 and the Swap Payment in Sections 2.7C.10 and
2.8C.1(C), as the case may be; provided, however, that in the event that the
Trust is required to make a termination payment to a Swap Counterparty as a
result of (i) an Event of Default (as such term is defined in the Swap
Agreement) where the Swap Counterpaty is the Defaulting Party (as such term is
defined in the Swap Agreement) or (ii) a Termination Event (as such term is
defined in the Swap Agreement), such termination payment will be subordinate in
priority to the right of the Noteholders to receive the Noteholders'
Distribution Amount and to the Certificateholders to receive the Certificate
Distribution Amount and, if necessary, to the reinstatement of the balance of
the Reserve Account up to the Specified Reserve Account Balance. In the event of
a termination of a Swap Agreement that requires the Trust to make a termination
payment to the applicable Swap Counterparty except as described in the proviso
above, the Administrator promptly shall notify the Rating Agencies of such
requirement and, within thirty (30) days of such termination payment, shall
provide to the Rating Agencies cash flows and such other financial information
with respect to the Trust as the Rating Agencies may reasonably request.
7
<PAGE>
D. On the final Distribution Date upon termination of the Trust and
following the payment in full of the aggregate outstanding principal balance of
the Notes and the Certificate Balance and of all other amounts (other than Swap
Payments and Carryover Servicing Fees) owing or to be distributed hereunder or
under the Indenture or the Trust Agreement to Noteholders, Certificateholders,
the Servicer, the Administrator or the Rate Cap Swap Counterparty, to the extent
that Available Funds on such date are insufficient to make the following
payments, amounts remaining in the Reserve Account shall be used first to pay
any unpaid Swap Payments and second to pay any Carryover Servicing Fees. Any
amount remaining on deposit in the Reserve Account after such payments have been
made shall be distributed to the Seller. The Seller shall in no event be
required to refund any amounts properly distributed pursuant to this Section
2.8D.
E. Anything in this Section 2.8 to the contrary notwithstanding, if the
market value of securities and cash in the Reserve Account is on any
Distribution Date sufficient to pay the remaining principal amount of and
interest accrued on the Notes, to reduce the Certificate Balance to zero and to
pay any accrued return thereon and to pay any unpaid Swap Payments and Carryover
Servicing Fee, such amount will be so applied on such Distribution Date and the
Administrator shall instruct the Eligible Lender Trustee and the Indenture
Trustee to make such payments.
(C) Section 2.9.e is deleted, Sections 2.9.f-j are redesignated as Sections
2.9.e-i and the following is inserted as Section 2.9.j:
j. The amount of the Swap Fee and Swap Payments made to the Swap
Counterparties on such Distribution Date;
In addition, the first sentence of the first paragraph after Section 2.9.n is
deleted and replaced with the following:
Each amount set forth pursuant to clauses (a), (b), (c), (d), (h), (i) and
(l) above shall be expressed as a dollar amount per $1,000 of original principal
balance of a Note or Certificate, as applicable.
(d) The last sentence of Section 3.1D is deleted and replaced with the
following:
In connection therewith, the Administrator shall calculate the T-Bill Rate
and Three-Month LIBOR or Five-Month LIBOR, as applicable, in accordance with the
definitions thereof and shall also determine the Student Loan Rate with respect
to such Distribution Date. In addition, the Administrator hereby accepts the
delegation to it of the obligations of the "Calculation Agent" under the Swap
Agreements.
8
<PAGE>
(d) A new subparagraph, 4.2 (iv), is inserted as follows: and
(iv) any claim for failure to comply with the provisions of 34 CFR Sec.
682.203(b) (other than for the Eligible Lender Trustee's failure to qualify
as an eligible lender under the Act).
In addition, the "or" is deleted from subparagraph 4.2 (ii) and the "." is
deleted from subparagraph 4.2 (iii) and is replaced ";".
(e) Sections 6.1A and B are deleted and replaced with the following:
SECTION 6.1 TERMINATION.
A. OPTIONAL PURCHASE OF ALL TRUST STUDENT LOANS. The Administrator shall
notify the Seller and the Indenture Trustee in writing, within 15 days after the
last day of any Collection Period as of which the then outstanding Pool Balance
is 12% or less of the Initial Pool Balance, of the percentage that the then
outstanding Pool Balance bears to the Initial Pool Balance. As of the last day
of any Collection Period immediately preceding a Distribution Date as of which
the then outstanding Pool Balance is 10% or less of the Initial Pool Balance,
the Eligible Lender Trustee on behalf and at the direction of the Seller, or any
other "eligible lender" (within the meaning of the Higher Education Act)
designated by the Seller in writing to the Eligible Lender Trustee and the
Indenture Trustee, shall have the option to purchase the Trust Estate, other
than the Trust Accounts. To exercise such option, the Seller shall deposit
pursuant to Section 2.6 in the Collection Account an amount equal to the
aggregate Purchase Amount for the Trust Student Loans and the related rights
with respect thereto, plus the appraised value of any such other property held
by the Trust other than the Trust Accounts, such value to be determined by an
appraiser mutually agreed upon by the Seller, the Eligible Lender Trustee and
the Indenture Trustee, and shall succeed to all interests in and to the Trust;
PROVIDED, HOWEVER, that the Seller may not effect such purchase if such
aggregate Purchase Amounts do not equal or exceed the Minimum Purchase Amount
plus any amounts owing to the Swap Counterparties and any Carryover Servicing
Fees. In the event the Seller fails to notify the Eligible Lender Trustee and
the Indenture Trustee in writing prior to the acceptance by the Indenture
Trustee of a bid to purchase the Trust Estate pursuant to Section 4.4 of the
Indenture that the Seller intends to exercise its option to purchase the Trust
Estate, the Seller shall be deemed to have waived its option to purchase the
Trust Estate as long as the Seller has received 5 business days' notice from the
Indenture Trustee as provided in Section 4.4 of the Indenture.
9
<PAGE>
B. INSOLVENCY OF THE SELLER. Upon any sale of the assets of the Trust
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 (the "Insolvency Proceeds") in the Collection Account. On the
first Distribution Date following the date on which the Insolvency Proceeds are
deposited in the Collection Account, the Administrator shall instruct the
Indenture Trustee to make the following distributions (after the application on
such Distribution Date of the amount of Available Funds and amounts on deposit
in the Reserve Account pursuant to Sections 2.7 and 2.8) from the Insolvency
Proceeds and any funds remaining on deposit in the Reserve Account (including
the proceeds of any sale of investments therein as described in the following
sentence):
a. to the Noteholders, any unpaid Noteholders' Interest Distribution
Amount for such Distribution Date as set forth in Sections 2.7C.4;
b. to the Noteholders, the outstanding principal balance of the Notes in
the same order and priority as is set forth in Sections 2.7C.6 and
C.7;
c. to the Certificateholders, any unpaid Certificate Return Distribution
Amount for such Distribution Date;
d. to the Certificateholders, the Certificate Balance;
e. to the Reimbursement Swap Counterparty, any unpaid Swap Payments; and
f. to the Servicer, any unpaid Carryover Servicing Fees.
(f) Section 8.5 is amended by inserting at the end of the first paragraph
the following:
and that such action will not materially adversely affect (i) the Trust's
ability to enforce or protect its rights or remedies under the Swap
Agreements, (ii) the ability of the Trust to timely and fully perform its
obligations under the Swap Agreements or (iii) any of the Trust's
obligations under the Swap Agreements or any swap transaction under such
agreements. Any such amendment, modification or supplement without the
applicable Swap Counterparty's consent shall not be binding on that Swap
Counterparty.
6. Each of the parties named on the signature pages to this Supplement by
execution of this Supplement agrees, for the benefit of the Administrator and
the other signatories hereto, to be bound by the terms of the Agreement in
connection with the
10
<PAGE>
Trust, this Supplement and the other Basic Documents to the extent reference is
made in the Agreement to such party. The rights and obligations of such parties
under the Agreement resulting from the execution of this Supplement (other than
the Seller) shall be applicable only with respect to the Trust, this Supplement
and the other Basic Documents.
This Supplement shall be construed in accordance with the laws of the State
of New York, without reference to the conflict of law provisions thereof, and
the obligations, rights and remedies of the parties hereunder shall be
determined in accordance with such laws.
This Supplement may be executed in counterparts, each of which when so
executed shall together constitute but one and the same instrument.
11
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Supplement to be
duly executed and delivered as of the date first above written.
SLM FUNDING CORPORATION
By: /S/ J. Lance Franke
------------------------------------
Name: J. Lance Franke
------------------------------------
Title: Chief Financial Officer
------------------------------------
SALLIE MAE SERVICING CORPORATION
By: /S/ Thomas P. Brisson
------------------------------------
Name: Thomas P. Brisson
------------------------------------
Title: Vice President
------------------------------------
SLM STUDENT LOAN TRUST 2000-1
By Chase Manhattan Bank Delaware, not in
its individual capacity but solely as
Eligible Lender Trustee
By: /S/ John J. Cashin
------------------------------------
Name: John J. Cashin
------------------------------------
Title: Vice President
------------------------------------
12
<PAGE>
CHASE MANHATTAN BANK DELAWARE, not in
its individual capacity but solely as
Eligible Lender Trustee
By: /S/ John J. Cashin
-----------------------------------
Name: John J. Cashin
-----------------------------------
Title: Vice President
-----------------------------------
BANKERS TRUST COMPANY
not in its individual capacity but
solely as Indenture Trustee
By: /S/ Patricia M. F. Russo
------------------------------------
Name: Patricia M. F. Russo
------------------------------------
Title: Vice President
------------------------------------
The Administrator hereby acknowledges receipt of the foregoing Supplement and
hereby confirms to the Seller and the other signatories to the foregoing
Supplement that the representations of the Administrator contained in Article V
of the Agreement are true and correct as of the date of such Supplement.
STUDENT LOAN MARKETING ASSOCIATION
By: /S/ Michael E. Sheehan
- -----------------------------------
Name: Michael E. Sheehan
- -----------------------------------
Title: Assistant Vice President
- -----------------------------------
13
<PAGE>
--------------------------------------------------------------------
SERVICING AGREEMENT
among
SALLIE MAE SERVICING CORPORATION,
STUDENT LOAN MARKETING ASSOCIATION,
as Administrator
SLM STUDENT LOAN TRUST 2000-1,
CHASE MANHATTAN BANK DELAWARE
not in its individual capacity
but solely as Eligible Lender Trustee
and
BANKERS TRUST COMPANY
not in its individual capacity
but solely as Indenture Trustee
Dated as of February 15, 2000
--------------------------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
PAGE
<S> <C> <C>
ARTICLE I
Section 1.1 Definitions and Usage. . . . . . . . . . . . . 1
ARTICLE II
Section 2.1 Custody of Trust Student Loan Files. . . . . . 1
Section 2.2 Duties of Servicer as Custodian. . . . . . . . 2
Section 2.3 Maintenance of and Access to Records . . . . . 3
Section 2.4 Release of Documents . . . . . . . . . . . . . 3
Section 2.5 Instructions; Authority To Act . . . . . . . . 3
Section 2.6 [RESERVED] . . . . . . . . . . . . . . . . . . 3
Section 2.7 Effective Period and Termination . . . . . . . 3
ARTICLE III
Section 3.1 Duties of Servicer . . . . . . . . . . . . . . 4
Section 3.2 Collection of Trust Student Loan Payments. . . 6
Section 3.3 Realization upon Trust Student Loans . . . . . 7
Section 3.4 No Impairment. . . . . . . . . . . . . . . . . 7
Section 3.5 Purchase of Trust Student Loans; Reimbursement 7
Section 3.6 Primary Servicing Fee; Carryover Servicing Fee 10
Section 3.7 Access to Certain Documentation and
Information Regarding Trust Student Loans . 11
Section 3.8 Servicer Expenses. . . . . . . . . . . . . . . 11
Section 3.9 Appointment of Subservicer . . . . . . . . . . 11
Section 3.10 Reports. . . . . . . . . . . . . . . . . . . . 12
Section 3.11 Covenants and Agreements of the Issuer,
Administrator, Eligible Lender
and Service Trustee . . . . . . . . . . . . 12
Section 3.12 Special Programs . . . . . . . . . . . . . . . 13
Section 3.13 Financial Statements . . . . . . . . . . . . . 14
Section 3.14 Insurance. . . . . . . . . . . . . . . . . . . 14
Section 3.15 Administration Agreement . . . . . . . . . . . 14
Section 3.16 Lender Identification Number . . . . . . . . . 14
ARTICLE IV
Section 4.1 Representations of Servicer. . . . . . . . . . 15
Section 4.2 Indemnities of Servicer. . . . . . . . . . . . 16
Section 4.3 Merger or Consolidation of, or Assumption of
the Obligations of, Servicer. . . . . . . . 17
Section 4.4 Limitation on Liability of Servicer. . . . . . 18
Section 4.5 Sallie Mae Servicing Corporation Not to Resign
as Servicer . . . . . . . . . . . . . . . . 19
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
ARTICLE V
Section 5.1 Servicer Default . . . . . . . . . . . . . . . 19
Section 5.2 Appointment of Successor . . . . . . . . . . . 21
Section 5.3 Notification to Noteholders and
Certificateholders . . . . . . . . . . . . . 22
Section 5.4 Waiver of Past Defaults. . . . . . . . . . . . 22
ARTICLE VI
Section 6.1 Amendment. . . . . . . . . . . . . . . . . . . 22
Section 6.2 Notices. . . . . . . . . . . . . . . . . . . . 23
Section 6.3 Counterparts . . . . . . . . . . . . . . . . . 24
Section 6.4 Entire Agreement; Severability . . . . . . . . 24
Section 6.5 Governing Law. . . . . . . . . . . . . . . . . 25
Section 6.6 Relationship of Parties. . . . . . . . . . . . 25
Section 6.7 Captions . . . . . . . . . . . . . . . . . . . 25
Section 6.8 Nonliability of Directors, Officers and
Employees of Servicer, the Eligible Lender
Trustee, the Indenture Trustee and the
Administrator . . . . . . . . . . . . . . . . 25
Section 6.9 Assignment . . . . . . . . . . . . . . . . . . 25
Section 6.10 Limitation of Liability of Eligible Lender
Trustee and Indenture Trustee . . . . . . . . 25
Attachment A Schedule of Fees
Attachment B Servicer Locations
Attachment C Reports
</TABLE>
Appendix A
ii
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SERVICING AGREEMENT
Sallie Mae Servicing Corporation ("Servicer"), a corporation organized under
the laws of the State of Delaware, hereby agrees with SLM Student Loan Trust
2000-1 (the "Issuer"), Chase Manhattan Bank Delaware, not in its individual
capacity but in its capacity as trustee under a trust agreement dated February
1, 2000 between SLM Funding Corporation and Chase Manhattan Bank Delaware
("Eligible Lender Trustee"), the Student Loan Marketing Association, a federally
chartered corporation ("Administrator") and Bankers Trust Company, a New York
banking corporation, not in its individual capacity but in its capacity as
Indenture Trustee under an Indenture dated February 1, 2000 between SLM Student
Loan Trust 2000-1 and Bankers Trust Company (the "Indenture Trustee"), as
follows:
WHEREAS, Eligible Lender Trustee will acquire certain education loans to be
held in the Trust formed pursuant to a trust agreement (the "Trust Agreement"),
dated as of February 1, 2000, between SLM Funding Corporation and Eligible
Lender Trustee;
WHEREAS, the Issuer will issue notes (the "Notes") pursuant to an indenture
(the "Indenture"), dated as of February 1, 2000, between the Issuer and the
Indenture Trustee and trust certificates (the "Certificates") pursuant to the
Trust Agreement, which Notes and Certificates are payable from the assets of the
Issuer;
WHEREAS, the Issuer, the Administrator and the Eligible Lender Trustee desire
Servicer to service said education loans held by the Eligible Lender Trustee on
behalf of the Issuer, and Servicer is willing to service said education loans
for the Issuer, the Administrator, the Eligible Lender Trustee and the Indenture
Trustee;
NOW, THEREFORE, in consideration of the premises and mutual covenants herein
contained, the parties hereto 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 Appendix A hereto, which also contains rules as to
usage that shall be applicable herein.
ARTICLE II
SECTION 2.1 CUSTODY OF TRUST STUDENT LOAN FILES. To assure uniform quality in
servicing the Trust Student Loans and to reduce administrative costs, the Issuer
hereby revocably appoints
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the Servicer, and the Servicer hereby accepts such appointment, to act for the
benefit of the Issuer and the Indenture Trustee as custodian of the following
documents or instruments (collectively the "Trust Student Loan Files") which are
hereby constructively delivered to the Indenture Trustee, as pledgee of the
Issuer with respect to each Trust Student Loan:
(a) the original fully executed copy of the note evidencing the Trust
Student Loan; and
(b) any and all other documents and computerized records that the Servicer
shall keep on file, in accordance with its customary procedures,
relating to such Trust Student Loan or any obligor with respect
thereto.
SECTION 2.2 DUTIES OF SERVICER AS CUSTODIAN. The Servicer shall hold the Trust
Student Loan Files for the benefit of the Issuer and the Indenture Trustee and
maintain such accurate and complete accounts, records and computer systems
pertaining to each Trust Student Loan File as shall enable the Issuer to comply
with this Agreement. In performing its duties as custodian the Servicer shall
act with reasonable care, using that degree of skill and attention that the
Servicer exercises with respect to the student loan files relating to comparable
student loans that the Servicer services on behalf of the Student Loan Marketing
Association and shall ensure that it fully complies with all applicable Federal
and state laws, including the Higher Education Act, with respect thereto. The
Servicer shall take all actions necessary with respect to the Trust Student Loan
Files held by it under this Agreement and of the related accounts, records and
computer systems, in order to enable the Issuer or the Indenture Trustee to
verify the accuracy of the Servicer's record keeping with respect to the
Servicer's obligations as custodian hereunder. The Servicer shall promptly
report to the Issuer, the Administrator and the Indenture Trustee any material
failure on its part to hold the Trust Student Loan Files and maintain its
accounts, records and computer systems as herein provided and promptly take
appropriate action to remedy any such failure. Nothing herein shall be deemed to
require an initial review or any periodic review by the Issuer, the Eligible
Lender Trustee or the Indenture Trustee of the Trust Student Loan Files. If in
the reasonable judgment of the Eligible Lender Trustee it is necessary to
preserve the interests of the Noteholders, Certificateholders and the Trust in
the Trust Student Loans or at the request of the Administrator, the Servicer
shall transfer physical possession of the notes evidencing the Trust Student
Loans to the Eligible Lender Trustee, the Indenture Trustee or any other
custodian for either of them designated by the Eligible Lender Trustee.
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SECTION 2.3 MAINTENANCE OF AND ACCESS TO RECORDS. The Servicer shall maintain
each Trust Student Loan File at one of its offices specified in Attachment B to
this Agreement or at such other office as shall be consented to by the Issuer
and the Indenture Trustee upon written notice to the Issuer and the Indenture
Trustee. Upon reasonable prior notice, the Servicer shall make available to the
Issuer and the Indenture Trustee or their respective duly authorized
representatives, attorneys or auditors a list of locations of the Trust Student
Loan Files and the related accounts, records and computer systems maintained by
the Servicer at such times during normal business hours as the Issuer or the
Indenture Trustee shall instruct.
SECTION 2.4 RELEASE OF DOCUMENTS. Upon written instruction from the Indenture
Trustee, the Servicer shall release any Trust Student Loan File to the Indenture
Trustee, the Indenture Trustee's agent, or the Indenture Trustee's designee, as
the case may be, at such place or places as the Indenture Trustee may reasonably
designate, as soon as practicable. The Indenture Trustee shall cooperate with
the Servicer to provide the Servicer with access to the Trust Student Loan Files
in order for the Servicer to continue to service the Trust Student Loans after
the release of the Trust Student Loan Files. In the event the Servicer is not
provided access to the Trust Student Loan Files, the Servicer shall not be
deemed to have breached its obligations pursuant to Section 3.1, 3.2, 3.3 or 3.4
if it is unable to perform such obligations due to its inability to have access
to the Trust Student Loans Files. The Servicer shall not be liable for any
losses with respect to the servicing of such Trust Student Loans arising after
the release of the related Trust Student Loan Files to the extent the losses are
attributable to the Servicer's inability to have access to the related Trust
Student Loan Files.
SECTION 2.5 INSTRUCTIONS; AUTHORITY TO ACT. The Servicer shall be deemed to have
received proper instructions with respect to the Trust Student Loan Files upon
its receipt of written instructions signed by a Responsible Officer of the
Indenture Trustee.
SECTION 2.6 [RESERVED].
SECTION 2.7 EFFECTIVE PERIOD AND TERMINATION. Sallie Mae Servicing Corporation's
appointment as custodian shall become effective as of the Closing Date and shall
continue in full force and effect for so long as Sallie Mae Servicing
Corporation shall remain the Servicer hereunder. If Sallie Mae Servicing
Corporation or any successor Servicer shall resign as Servicer in
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accordance with the provisions of this Agreement or if all the rights and
obligations of Sallie Mae Servicing Corporation or any such successor Servicer
shall have been terminated under Section 5.1, the appointment of Sallie Mae
Servicing Corporation or such successor Servicer as custodian shall be
terminated simultaneously with the effectiveness of such resignation or
termination. On or prior to the effective date of any resignation or termination
of such appointment, the Servicer shall deliver the Trust Student Loan Files to
the successor Servicer, the Indenture Trustee or the Indenture Trustee's agent,
at the direction of the Indenture Trustee, at such place or places as the
Indenture Trustee may reasonably designate. In establishing an effective date
for the termination of the Servicer as custodian of the Trust Student Loan
Files, the parties shall provide for a reasonable period for the Servicer to
deliver the Trust Student Loan Files to its designated successor.
ARTICLE III
SECTION 3.1 DUTIES OF SERVICER. The Servicer, for the benefit of the Issuer (to
the extent provided herein), shall manage, service, administer and make
collections on the Trust Student Loans with reasonable care, using that degree
of skill and attention that the Servicer exercises with respect to comparable
student loans that it services on behalf of the Student Loan Marketing
Association from the Closing Date (or with respect to Trust Student Loans which
are sold to the Issuer following the Closing Date, such later date as the Trust
Student Loans are delivered to Servicer for servicing hereunder) until the Trust
Student Loans are paid in full. At any time that substantially all remaining
Trust Student Loans are repurchased by SLM Funding Corporation from the Issuer
pursuant to Section 6.1 of the Administration Agreement, the Servicer agrees to
execute, at the request of SLM Funding Corporation, a new servicing agreement
which agreement shall include terms and conditions substantially the same as the
terms and conditions of this Agreement; provided, however, the Servicer shall
not be required to so execute a new servicing agreement until it has received
all Servicing Fees then due and payable hereunder. Without limiting the
generality of the foregoing or of any other provision set forth in this
Agreement and notwithstanding any other provision to the contrary set forth
herein, the Servicer shall manage, service, administer and make collections with
respect to the Trust Student Loans (including collection of any Interest Subsidy
Payments and Special Allowance Payments on behalf of the Eligible Lender
Trustee) in accordance with, and otherwise comply with, all applicable Federal
and state laws, including all applicable rules, regulations and other
requirements of the Higher Education Act and the applicable Guarantee Agreement,
the failure to comply with which would adversely affect the eligibility of one
or more
4
<PAGE>
of the Trust Student Loans for Federal reinsurance or Interest Subsidy Payments
or Special Allowance Payments or one or more of the Trust Student Loans for
receipt of Guarantee Payments.
The Servicer's duties shall include, but shall not be limited to,
collection and posting of all payments, responding to inquiries of borrowers on
such Trust Student Loans, monitoring borrowers' status, making required
disclosures to borrowers, performing due diligence with respect to borrower
delinquencies, sending payment coupons to borrowers and otherwise establishing
repayment terms, reporting tax information to borrowers, if applicable,
accounting for collections and furnishing monthly statements with respect
thereto to the Administrator. The Servicer shall follow its customary standards,
policies and procedures in performing its duties as Servicer. Without limiting
the generality of the foregoing, the Servicer is authorized and empowered to
execute and deliver, on behalf of itself, the Issuer, the Eligible Lender
Trustee, the Indenture Trustee, the Certificateholders and the Noteholders or
any of them, instruments of satisfaction or cancellation, or partial or full
release or discharge, and all other comparable instruments, with respect to such
Trust Student Loans; PROVIDED, HOWEVER, that the Servicer agrees that it will
not (a) permit any rescission or cancellation of a Trust Student Loan except as
ordered by a court of competent jurisdiction or governmental authority or as
otherwise consented to in writing by the Eligible Lender Trustee and the
Indenture Trustee PROVIDED, HOWEVER, that the Servicer may write off any
delinquent Trust Student Loan if the remaining balance of the borrower's account
is less than $50 or (b) reschedule, revise, defer or otherwise compromise with
respect to payments due on any Trust Student Loan except pursuant to any
applicable interest only, deferral or forbearance periods or otherwise in
accordance with all applicable standards, guidelines and requirements with
respect to the servicing of Student Loans; PROVIDED FURTHER, HOWEVER, that the
Servicer shall not agree to any reduction of yield with respect to any Trust
Student Loan (either by reducing borrower payments or reducing principal
balance) except as permitted in accordance with Section 3.12 or otherwise if,
and to the extent, the Servicer or the Administrator reimburses the Issuer in an
amount sufficient to offset any such effective yield reduction made by the
Servicer consistent with such customary servicing procedures as it follows with
respect to comparable Student Loans which it services on behalf of the Student
Loan Marketing Association. The Eligible Lender Trustee on behalf of the Issuer
hereby grants a power of attorney and all necessary authorization to the
Servicer to maintain any and all collection procedures with respect to the Trust
Student Loans, including filing, pursuing and recovering claims with the
Guarantors for Guarantee Payments and with the Department for Interest Benefit
Payments and Special Allowance Payments and taking any steps to enforce such
Trust Student Loans
5
<PAGE>
such as commencing a legal proceeding to enforce a Trust Student Loan in the
names of the Issuer, the Eligible Lender Trustee, the Indenture Trustee, the
Certificateholders and the Noteholders. The Eligible Lender Trustee shall
upon the written request of the Servicer furnish the Servicer with any other
powers of attorney and other documents reasonably necessary or appropriate to
enable the Servicer to carry out its servicing and administrative duties
hereunder.
SECTION 3.2 COLLECTION OF TRUST STUDENT LOAN PAYMENTS.
A. The Servicer shall make reasonable efforts (including all efforts that
may be specified under the Higher Education Act or any Guarantee Agreement) to
collect all payments called for under the terms and provisions of the Trust
Student Loans as and when the same shall become due and shall follow such
collection procedures as it follows with respect to comparable student loans
that it services on behalf of the Student Loan Marketing Association. The
Servicer shall allocate collections with respect to the Trust Student Loans
between principal and interest in accordance with Section 2.5 of the
Administration Agreement. The Servicer may in its discretion waive any late
payment charge or any other fees that may be collected in the ordinary course of
servicing a Trust Student Loan. The Servicer may, at its option, retain any late
payment charges which it collects.
B. The Servicer shall make reasonable efforts to claim, pursue and collect
all Guarantee Payments from the Guarantors pursuant to the Guarantee Agreements
with respect to any of the Trust Student Loans as and when the same shall become
due and payable, shall comply with all applicable laws and agreements with
respect to claiming, pursuing and collecting such payments and shall follow such
practices and procedures as it follows with respect to comparable guarantee
agreements and student loans that it services on behalf of the Student Loan
Marketing Association. In connection therewith, the Servicer is hereby
authorized and empowered to convey to any Guarantor the note and the related
Trust Student Loan File representing any Trust Student Loan in connection with
submitting a claim to such Guarantor for a Guarantee Payment in accordance with
the terms of the applicable Guarantee Agreement. All amounts so collected by the
Servicer shall constitute Available Funds for the applicable Collection Period
and shall be deposited into the Collection Account or transferred to the
Administrator in accordance with Section 2.4 of the Administration Agreement.
The Eligible Lender Trustee shall, upon the written request of the Servicer,
furnish the Servicer with any power of attorney and other documents necessary or
appropriate to enable the Servicer to convey such documents to any Guarantor and
to make such claims.
6
<PAGE>
C. The Servicer on behalf of the Eligible Lender Trustee shall, on behalf
of the Issuer, make reasonable efforts to claim, pursue and collect all Interest
Subsidy Payments and Special Allowance Payments from the Department with respect
to any of the Trust Student Loans as and when the same shall become due and
payable, shall comply with all applicable laws and agreements with respect to
claiming, pursuing and collecting such payments and shall follow such practices
and procedures as the Servicer follows with respect to comparable student loans
that it services on behalf of the Student Loan Marketing Association. All
amounts so collected by the Servicer shall constitute Available Funds for the
applicable Collection Period and shall be deposited into the Collection Account
or transferred to the Administrator in accordance with Section 2.4 of the
Administration Agreement. In connection therewith, the Servicer shall prepare
and file with the Department on a timely basis all claims forms and other
documents and filings necessary or appropriate in connection with the claiming
of Interest Subsidy Payments and Special Allowance Payments on behalf of the
Eligible Lender Trustee and shall otherwise assist the Eligible Lender Trustee
in pursuing and collecting such Interest Subsidy Payments and Special Allowance
Payments from the Department. The Eligible Lender Trustee shall upon the written
request of the Servicer furnish the Servicer with any power of attorney and
other documents reasonably necessary or appropriate to enable the Servicer to
prepare and file such claims forms and other documents and filings.
SECTION 3.3 REALIZATION UPON TRUST STUDENT LOANS. For the benefit of the Issuer,
the Servicer shall use reasonable efforts consistent with its servicing
practices and procedures that it utilizes with respect to comparable student
loans that it services on behalf of the Student Loan Marketing Association and
including all efforts that may be specified under the Higher Education Act or
any Guarantee Agreement in its servicing of any delinquent Trust Student Loans.
SECTION 3.4 NO IMPAIRMENT. The Servicer shall not impair the rights of the
Issuer, the Eligible Lender Trustee, the Indenture Trustee, the
Certificateholders or Noteholders in such Trust Student Loans.
SECTION 3.5 PURCHASE OF TRUST STUDENT LOANS; REIMBURSEMENT.
A. The Servicer, the Administrator, the Eligible Lender Trustee and the
Indenture Trustee shall give notice to the other parties promptly, in writing,
upon the discovery of any breach of the provisions of Section 3.1, 3.2, 3.3 or
3.4 which has a materially adverse effect on the interest of the Issuer. In the
event of such a material breach which is not curable by reinstatement of the
Guarantor's guarantee of such Trust Student
7
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Loan, the Servicer shall purchase the affected Trust Student Loan not later than
120 days following the earlier of the date of discovery of such material breach
and the date of receipt of the Guarantor reject transmittal form with respect to
such Trust Student Loan. In the event of a material breach with respect to such
Trust Student Loan which is curable by reinstatement of the Guarantor's
guarantee of such Trust Student Loan, unless the material breach shall have been
cured within 360 days following the earlier of the date of discovery of such
material breach and the date of receipt of the Guarantor reject transmittal form
with respect to such Trust Student Loan, the Servicer shall purchase such Trust
Student Loan not later than the sixtieth day following the end of such 360-day
period. The purchase price hereunder will be the unpaid principal amount of such
Trust Student Loan plus accrued interest (calculated using the applicable
percentage that would have been insured pursuant to Section 428(b)(1)(G) of the
Higher Education Act) plus an amount equal to all forfeited Interest Subsidy
Payments and Special Allowance Payments with respect to such Trust Student Loan.
The Servicer shall remit the purchase price to the Administrator as provided in
Section 2.6 of the Administration Agreement on the date of purchase of any Trust
Student Loan pursuant to this Section 3.5. In consideration of the purchase of
any such Trust Student Loan pursuant to this Section 3.5, the Servicer shall
remit the Purchase Amount in the manner specified in Section 2.6 of the
Administration Agreement. Any breach that relates to compliance with the
requirements of the Higher Education Act or of the applicable Guarantor but that
does not affect such Guarantor's obligation to guarantee payments of a Trust
Student Loan will not be considered to have a material adverse effect for
purposes of this Section 3.5A.
B. In addition, if any breach of Section 3.1, 3.2, 3.3 or 3.4 by the
Servicer does not trigger such purchase obligation but does result in the
refusal by a Guarantor to guarantee all or a portion of the accrued interest (or
any obligation of the Issuer to repay such interest to a Guarantor), or the loss
(including any obligation of the Issuer to repay to the Department) of Interest
Subsidy Payments and Special Allowance Payments, with respect to any Trust
Student Loan affected by such breach, then the Servicer shall reimburse the
Issuer in an amount equal to the sum of all such nonguaranteed interest amounts
that would have been owed to the Issuer by the Guarantor but for such breach by
the Servicer and such forfeited Interest Subsidy Payments or Special Allowance
Payments by netting such sum against the Servicing Fee payable to the Servicer
for such period and remitting any additional amounts owed in the manner
specified in Section 2.6 of the Administration Agreement not later than (i) the
last day of the next Collection Period ending not less than 60 days from the
date of the Guarantor's refusal to guarantee all or a portion of accrued
interest or loss of Interest Subsidy Payments or Special Allowance Payments, or
8
<PAGE>
(ii) in the case where the Servicer reasonably believes such amounts are likely
to be collected, not later than the last day of the next Collection Period
ending not less than 360 days from the date of the Guarantor's refusal to
guarantee all or a portion of accrued interest or loss of Interest Subsidy
Payments or Special Allowance Payments. At the time such payment is made, the
Servicer shall not be required to reimburse the Issuer for interest that is then
capitalized, however, such amounts shall be reimbursed if the borrower
subsequently defaults and such capitalized interest is not paid by the
Guarantor.
C. Anything in this Section 3.5 to the contrary notwithstanding, if as of
the last Business Day of any month the aggregate outstanding principal amount of
Trust Student Loans with respect to which claims have been filed with and
rejected by a Guarantor or with respect to which the Servicer determines that
claims cannot be filed pursuant to the Higher Education Act as a result of a
breach by the Servicer or the Seller, exceeds 1% of the Pool Balance, the
Servicer or the Seller, as appropriate, shall purchase, within 30 days of a
written request of the Eligible Lender Trustee or Indenture Trustee, such
affected Trust Student Loans in an aggregate principal amount such that after
such purchase the aggregate principal amount of such affected Trust Student
Loans is less than 1% of the Pool Balance. The Trust Student Loans to be
purchased by the Servicer or the Seller pursuant to the preceding sentence shall
be based on the date of claim rejection (or date of notice referred to in the
first sentence of this Section 3.5) with the Trust Student Loans with the
earliest such date to be purchased first.
D. In lieu of repurchasing Trust Student Loans pursuant to this Section
3.5, the Servicer may, at its option, with the prior consent of the
Administrator, substitute Student Loans or arrange for the substitution of
Student Loans which are substantially similar as of the date of substitution on
an aggregate basis to the Trust Student Loans for which they are being
substituted with respect to the following characteristics:
(1) status (i.e., in-school, grace, deferment, forbearance or repayment),
(2) program type (i.e., unsubsidized Stafford, subsidized Stafford,
Consolidation (pre-1993 vs. post-1993) PLUS or SLS),
(3) school type,
(4) total return,
(5) principal balance, and
(6) remaining term to maturity.
In addition, each substituted Student Loan shall comply, as of the date of
substitution, with the representations and warranties made by the Seller in the
Sale Agreement. In choosing Student
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Loans to be substituted pursuant to this subsection D, the Servicer shall make a
reasonable determination that the Student Loans to be substituted will not have
a material adverse effect on the Noteholders and the Certificateholders.
In the event the Servicer elects to substitute Student Loans pursuant to
this Section 3.5 and the Administrator consents to such substitution, the
Servicer will remit to the Administrator the amount of any shortfall between the
Purchase Amount of the substituted Student Loans and the Purchase Amount of the
Trust Student Loans for which they are being substituted. The Servicer shall
also remit to the Administrator an amount equal to all nonguaranteed interest
amounts that would have been owed to the Issuer by the Guarantor but for the
breach of the Servicer and forfeited Interest Subsidy Payments and Special
Allowance Payments with respect to the Trust Student Loans in the manner
provided in Section 2.6 of the Administration Agreement.
E. The sole remedy of the Issuer, the Eligible Lender Trustee, the
Indenture Trustee, the Certificateholders and the Noteholders with respect to a
breach pursuant to Section 3.1, 3.2, 3.3 or 3.4 shall be to require the Servicer
to purchase Trust Student Loans, to reimburse the Issuer as provided above or to
substitute Student Loans pursuant to this Section.
F. The Eligible Lender Trustee shall have no duty to conduct any
affirmative investigation as to the occurrence of any condition requiring the
purchase of any Trust Student Loan or the reimbursement for any interest penalty
pursuant to this Section 3.5.
G. The Servicer shall not be deemed to have breached its obligations
pursuant to Section 3.1, 3.2, 3.3 or 3.4 if it is rendered unable to perform
such obligations, in whole or in part, by a force outside the control of the
parties hereto (including acts of God, acts of war, fires, earthquakes,
hurricanes, floods and other disasters). The Servicer shall diligently perform
its duties under this Agreement as soon as practicable following the termination
of such interruption of business.
SECTION 3.6 PRIMARY SERVICING FEE; CARRYOVER SERVICING FEE. The Primary
Servicing Fee for each calendar month and any Carryover Servicing Fees payable
on any Distribution Date in arrears by the Issuer shall be equal to the amounts
determined by reference to the schedule of fees attached hereto as Attachment A.
Notwithstanding anything to the contrary contained herein or in any other Basic
Document, the Servicer shall be entitled to receive any Carryover Servicing Fee
on any Distribution Date only
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if and to the extent that sufficient funds are available pursuant to Section
2.7.C of the Administration Agreement.
SECTION 3.7 ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION REGARDING TRUST
STUDENT LOANS. Upon reasonable prior notice, the Servicer shall provide to the
Administrator and its agents access to the Trust Student Loan Files and shall
permit the Administrator to examine and make copies of, and abstracts from, the
records and books of account of the Servicer relating to the Trust Student Loans
and shall permit the Administrator to undertake periodic site reviews of the
Servicer's operations relating to the servicing of the Trust Student Loans
(including on the premises of any agent of the Servicer). Reasonable access
shall be afforded to the Administrator without charge, but only upon reasonable
request and during the normal business hours at the respective offices of the
Servicer. Nothing in this Section shall affect the obligation of the Servicer to
observe any applicable law prohibiting disclosure of information regarding the
Obligors and the failure of the Servicer to provide access to information as a
result of such obligation shall not constitute a breach of this Section.
SECTION 3.8 SERVICER EXPENSES. The Servicer shall be required to pay all
expenses incurred by it in connection with its activities hereunder, including
fees and disbursements of independent accountants, taxes imposed on the Servicer
and expenses incurred in connection with distributions and reports to the
Administrator PROVIDED, HOWEVER, the Carryover Servicing Fee will be subject to
increase agreed to by the Administrator, the Eligible Lender Trustee and the
Servicer to the extent that a demonstrable and significant increase occurs in
the costs incurred by the Servicer in providing the services to be provided
hereunder, whether due to changes in applicable governmental regulations,
Guarantor program requirements or regulations or postal rates. Notwithstanding
anything to the contrary contained herein, the Servicer may, at its option,
collect fees from the Borrowers in connection with sending payment histories and
amortization schedules to Borrowers, faxing documents to Borrowers, providing
credit reference letters to Borrowers, providing a "speed pay" payment option to
Borrowers and for other similar optional services requested by a Borrower and
may retain such fees. The Servicer may also, at its option, collect fees from
Borrowers for returned check processing or other insufficient fund transactions
and may assess such fees from the Borrower's Trust Student Loan payment and
retain such fees.
SECTION 3.9 APPOINTMENT OF SUBSERVICER. The Servicer may at any time, upon the
written consent of the Administrator, appoint a subservicer to perform all or
any portion of its obligations as
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Servicer hereunder; PROVIDED, HOWEVER, that any applicable Rating Agency
Condition shall have been satisfied in connection therewith; PROVIDED FURTHER
that the Servicer shall remain obligated and be liable to the Issuer, the
Eligible Lender Trustee, the Indenture Trustee, the Certificateholders and the
Noteholders for the servicing and administering of the Trust Student Loans in
accordance with the provisions hereof without diminution of such obligation and
liability by virtue of the appointment of such subservicer and to the same
extent and under the same terms and conditions as if the Servicer alone were
servicing and administering the Trust Student Loans. The fees and expenses of
the subservicer shall be as agreed between the Servicer and its subservicer from
time to time and none of the Issuer, the Eligible Lender Trustee, the Indenture
Trustee, the Certificateholders or the Noteholders shall have any responsibility
therefor. With respect to satisfying the Rating Agency Condition referred to
above, the term "subservicer" shall be deemed not to include systems providers,
systems developers or systems maintenance contractors, collection agencies,
credit bureaus, lock box providers, mail service providers and other similar
types of service providers.
SECTION 3.10 REPORTS. With respect to Trust Student Loans, Servicer shall
prepare reports and data and furnish the following information to the Issuer,
the Administrator, the Eligible Lender Trustee and the Indenture Trustee, unless
otherwise noted, at the specified times:
(a) The reports and data listed in Attachment C, at the times indicated in
the attachment;
(b) Within 30 days following the end of each calendar quarter, to the
Department, owner's request for interest and Special Allowance
Payments (ED 799);
(c) To credit bureaus selected by Servicer, credit bureau reporting in
accordance with the Higher Education Act;
(d) At any time the Eligible Lender Trustee or the Indenture Trustee, as
the case may be, shall have reasonable grounds to believe that such
request would be necessary in connection with its performance of its
duties under related documents, and within five (5) business days of
receipt of a request therefor, the Servicer shall furnish to the
Eligible Lender Trustee or to the Indenture Trustee a list of all
Trust Student Loans (by borrower social security number, type and
outstanding principal balance) and any additional
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information requested relating to the Trust Student Loans; and
(e) From time to time as may be reasonably requested, reports and data
providing additional information on the Trust Student Loans.
SECTION 3.11 COVENANTS AND AGREEMENTS OF THE ISSUER, ADMINISTRATOR, ELIGIBLE
LENDER TRUSTEE AND SERVICER. The Issuer, the Administrator, the Servicer and the
Eligible Lender Trustee each agree that:
A. Any payment and any communications received at any time by the Issuer,
Administrator and the Eligible Lender Trustee with respect to a Trust Student
Loan shall be immediately transmitted to the Servicer. Such communications shall
include, but not be limited to, requests or notices of loan cancellation,
notices of borrower disqualification, letters, changes in address or status,
notices of death or disability, notices of bankruptcy and forms requesting
deferment of repayment or forbearance.
B. The Servicer may change any part or all of its equipment, data
processing programs and any procedures and forms in connection with the services
performed hereunder so long as Servicer continues to service the Trust Student
Loans in conformance with the requirements herein. The Servicer shall not make
any material change in its servicing system and operations with respect to the
Trust Student Loans without the prior written consent of the Administrator which
consent will not be unreasonably withheld. Each written request for consent by
the Servicer shall be acted upon promptly by the Administrator. Anything in this
paragraph B. to the contrary notwithstanding, the Servicer will not be required
to request the consent of the Administrator with respect to any changes in the
Servicer's servicing system and operations which the Servicer reasonably
determines are required due to changes in the Higher Education Act or Guarantor
program requirements.
C. The Eligible Lender Trustee will furnish Servicer with a copy of any and
all Guarantee Agreements relating to the Trust Student Loans serviced hereunder.
D. The Servicer may and, at the direction of the Administrator, shall
include marketing or informational material generally provided to borrowers of
loans owned by the Student Loan Marketing Association with communications sent
to a borrower.
E. The Servicer may, in its discretion, if requested by a borrower of a
Trust Student Loan, arrange for the sale of such
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Trust Student Loan to another lender which holds another student loan of such
borrower at a price not less than the Purchase Amount.
F. The Servicer shall arrange for the sale of a Trust Student Loan to the
Student Loan Marketing Association upon receipt of notice from the Student Loan
Marketing Association that it has received an executed consolidation loan
application from the borrower of such Trust Student Loan. The sale price for
such Trust Student Loan shall equal the Purchase Amount.
SECTION 3.12 SPECIAL PROGRAMS. The Servicer shall offer borrowers of the Trust
Student Loans all special programs (e.g., Great RewardsSM, Great ReturnsSM and
Direct Repay), whether or not in existence as of the date of this Agreement,
generally offered to the obligors of comparable loans owned by the Student Loan
Marketing Association and serviced by the Servicer; PROVIDED, HOWEVER, to the
extent any such program is not required by the Higher Education Act and
effectively reduces borrower interest rate or principal balances on the Trust
Student Loans, such special program shall be applied to the Trust Student Loans
only if and to the extent the Issuer receives payment from the Student Loan
Marketing Association (and the Servicer receives notice of such payment) in an
amount sufficient to offset such effective yield reductions. The Student Loan
Marketing Association shall be deemed to be a third party beneficiary of this
Section 3.12 and shall make appropriate arrangements to compensate the Servicer
for increased costs associated with material changes to existing special
programs or the implementation and support of any new special programs.
SECTION 3.13 FINANCIAL STATEMENTS. The Servicer shall provide to the
Administrator at any time that the Servicer is not an Affiliate of the
Administrator (a) as soon as possible and in no event more than 120 days after
the end of each fiscal year of the Servicer audited financials as at the end of
and for such year and (b) as soon as possible and in no event more than 30 days
after the end of each quarterly accounting period of the Servicer unaudited
financials as at the end of and for such period.
SECTION 3.14 INSURANCE. The Servicer shall maintain or cause to be maintained
insurance with respect to its property and business against such casualties and
contingencies and of such types and in such amounts as is customary in the case
of institutions of the same type and size.
SECTION 3.15 ADMINISTRATION AGREEMENT. The Servicer agrees to perform all duties
required of the Servicer under the Administration Agreement using that degree of
skill and attention
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that the Servicer exercises with respect to its comparable business activities.
SECTION 3.16 LENDER IDENTIFICATION NUMBER. The Eligible Lender Trustee may
permit trusts, other than the Issuer, established by the Seller to securitize
student loans, to use the Department lender identification number applicable to
the Issuer if the servicing agreements with respect to such other trusts include
provisions substantially similar to this paragraph. In such event, the Servicer
may claim and collect Interest Subsidy Payments and Special Allowance Payments
with respect to Trust Student Loans and student loans in such other trusts using
such common lender identification number. Notwithstanding anything herein or in
the Basic Documents to the contrary, any amounts assessed against payments
(including, but not limited to, Interest Subsidy Payments and Special Allowance
Payments) due from the Department to any such other trust using such common
lender identification number as a result of amounts owing to the Department from
the Issuer will be deemed for all purposes hereof and of the Basic Documents
(including for purposes of determining amounts paid by the Department with
respect to the student loans in the Trust and such other trust) to have been
assessed against the Issuer and shall be deducted by the Administrator or the
Servicer and paid to such other trust from any collections made by them which
would otherwise have been payable to the Collection Account for the Issuer. Any
amounts assessed against payments due from the Department to the Issuer as a
result of amounts owing to the Department from such other trust using such
common lender identification number will be deemed to have been assessed against
such other trust and will be deducted by the Administrator or the Servicer from
any collections made by them which would otherwise be payable to the collection
account for such other trust and paid to the Issuer.
ARTICLE IV
SECTION 4.1 REPRESENTATIONS OF SERVICER. The Servicer makes the following
representations on which the Issuer is deemed to have relied in acquiring
(through the Eligible Lender Trustee) the Trust Student Loans and appointing the
Servicer as servicer hereunder. The representations speak as of the execution
and delivery of this Agreement and as of the Closing Date, but shall survive the
sale, transfer and assignment of the Trust Student Loans to the Eligible Lender
Trustee on behalf of the Issuer and the pledge thereof to the Indenture Trustee
pursuant to the Indenture.
A. ORGANIZATION AND GOOD STANDING. The Servicer is duly organized and
validly existing as a corporation chartered under the laws of the State of
Delaware and in good standing under the
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laws of the State of Delaware, 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, and had at all relevant times, and
has, the power, authority and legal right to service the Trust Student Loans and
to hold the Trust Student Loan Files as custodian.
B. DUE QUALIFICATION. The Servicer is duly qualified to do business and has
obtained all necessary licenses and approvals in all jurisdictions in which the
ownership or lease of property or the conduct of its business (including the
servicing of the Trust Student Loans as required by this Agreement) shall
require such qualifications.
C. POWER AND AUTHORITY. The Servicer has the 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
Servicer by all necessary action. No registration with or approval of any
governmental agency is required for the due execution and delivery by, and
enforceability against, the Servicer of this Agreement.
D. BINDING OBLIGATION. This Agreement constitutes a legal, valid and
binding obligation of the Servicer enforceable in accordance with its terms
subject to bankruptcy, insolvency and other similar laws affecting creditors
rights generally and subject to equitable principles.
E. NO VIOLATION. The consummation of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof will 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 Servicer, or any indenture, agreement or other instrument to which the
Servicer 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 this Agreement and the
other Basic Documents); nor violate any law or, to the best of the Servicer's
knowledge, any order, rule or regulation applicable to the Servicer of any court
or of any Federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Servicer or its
properties.
F. NO PROCEEDINGS. There are no proceedings or investigations pending, or,
to the Servicer's best knowledge, threatened, before any court, regulatory body,
administrative agency or other governmental instrumentality having jurisdiction
over the Servicer or its properties: (i) asserting the
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invalidity of this Agreement or any of the other Basic Documents to which the
Servicer is a party, (ii) seeking to prevent the consummation of any of the
transactions contemplated by this Agreement or any of the other Basic Documents
to which the Servicer is a party, (iii) seeking any determination or ruling that
could reasonably be expected to have a material and adverse effect on the
performance by the Servicer of its obligations under, or the validity or
enforceability of, this Agreement or any of the other Basic Documents to which
the Servicer is a party, or (iv) relating to the Servicer and which might
adversely affect the Federal or state income tax attributes of the Notes or the
Certificates.
SECTION 4.2 INDEMNITIES OF SERVICER. The Servicer shall be liable in accordance
herewith only to the extent of the obligations specifically undertaken by the
Servicer under this Agreement.
The Servicer shall pay for any loss, liability or expense, including
reasonable attorneys' fees, that may be imposed on, incurred by or asserted
against the Issuer or the Eligible Lender Trustee by the Department pursuant to
the Higher Education Act, to the extent that such loss, liability or expense
arose out of, or was imposed upon the Issuer through, the negligence, willful
misfeasance or bad faith of the Servicer in the performance of its obligations
and duties under this Agreement or by reason of the reckless disregard of its
obligations and duties under this Agreement, where the final determination that
any such loss, liability or expense arose out of, or was imposed upon the Issuer
or the Eligible Lender Trustee through, any such negligence, willful
misfeasance, bad faith or recklessness on the part of the Servicer is
established by a court of law, by an arbitrator or by way of settlement agreed
to by the Servicer. Notwithstanding the foregoing, if the Servicer is rendered
unable, in whole or in part, by a force outside the control of the parties
hereto (including acts of God, acts of war, fires, earthquakes, hurricanes,
floods and other disasters) to satisfy its obligations under this Agreement, the
Servicer shall not be deemed to have breached any such obligation upon delivery
of written notice of such event to the other parties hereto, for so long as the
Servicer remains unable to perform such obligation as a result of such event.
For purposes of this Section, in the event of the termination of the rights
and obligations of Sallie Mae Servicing Corporation (or any successor thereto
pursuant to Section 4.3) as Servicer pursuant to Section 5.1, or a resignation
by such Servicer pursuant to this Agreement, such Servicer shall be deemed to be
the Servicer pending appointment of a successor Servicer pursuant to Section
5.2.
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Liability of the Servicer under this Section shall survive the resignation
or removal of the Eligible Lender Trustee or the Indenture Trustee or the
termination of this Agreement. If the Servicer shall have made any 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 Servicer, without interest.
SECTION 4.3 MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE OBLIGATIONS OF,
SERVICER. The Servicer hereby agrees that, upon (a) any merger or consolidation
of the Servicer into another Person, (b) any merger or consolidation to which
the Servicer shall be a party resulting in the creation of another Person or (c)
any Person succeeding to the properties and assets of the Servicer substantially
as a whole, the Servicer shall (i) cause such Person (if other than the
Servicer) to execute an agreement of assumption to perform every obligation of
the Servicer hereunder, (ii) deliver to the Eligible Lender Trustee and
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 provided
for in this Agreement relating to such transaction have been complied with,
(iii) cause the Rating Agency Condition to have been satisfied with respect to
such transaction and (iv) cure any existing Servicer Default or any continuing
event which, after notice or lapse of time or both, would become a Servicer
Default. Upon compliance with the foregoing requirements, such Person shall be
the successor to the Servicer under this Agreement without further act on the
part of any of the parties to this Agreement.
SECTION 4.4 LIMITATION ON LIABILITY OF SERVICER. The Servicer shall not be under
any liability to the Issuer, the Noteholders, the Certificateholders, the
Administrator, the Eligible Lender Trustee or the Indenture Trustee except as
provided under this Agreement, for any action taken or for refraining from the
taking of any action pursuant to this Agreement, for errors in judgment, for any
incorrect or incomplete information provided by schools, borrowers, Guarantors
and the Department, for the failure of any party to this Servicing Agreement or
any other Basic Document to comply with its respective obligations hereunder or
under any other Basic Document or for any losses attributable to the insolvency
of any Guarantor; PROVIDED, HOWEVER, that this provision shall not protect the
Servicer against its obligation to purchase Student Loans from the Trust
pursuant to Section 3.5 hereof or to pay to the Trust amounts required pursuant
to Section 3.5 hereof or against any liability that would otherwise be imposed
by reason of willful misfeasance, bad faith or
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negligence in the performance of duties or by reason of reckless disregard of
obligations and duties under this Agreement. The Servicer may rely in good faith
on any document of any kind prima facie properly executed and submitted by any
person respecting any matters arising under this Agreement.
Except as provided in this Agreement, the Servicer shall not be under any
obligation to appear in, prosecute or defend any legal action where it is not
named as a party; PROVIDED, HOWEVER, that the Servicer 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 and the Noteholders. To the extent that the Servicer is
required to appear in or is made a defendant in any legal action or other
proceeding relating to the servicing of the Trust Student Loans, the Issuer
shall indemnify and hold the Servicer harmless from all cost, liability or
expense of the Servicer not arising out of or relating to the failure of the
Servicer to comply with the terms of this Agreement.
SECTION 4.5 SALLIE MAE SERVICING CORPORATION NOT TO RESIGN AS SERVICER. Subject
to the provisions of Section 4.3, Sallie Mae Servicing Corporation shall not
resign from the obligations and duties hereby imposed on it as Servicer under
this Agreement except upon determination that the performance of its duties
under this Agreement are no longer permissible under applicable law. Notice of
any such determination permitting the resignation of Sallie Mae Servicing
Corporation shall be communicated to the Eligible Lender Trustee and the
Indenture Trustee at the earliest practicable time (and, if such communication
is not in writing, shall be confirmed in writing at the earliest practicable
time) and any such determination shall be evidenced by an Opinion of Counsel to
such effect delivered to the Eligible Lender Trustee and the Indenture Trustee
concurrently with or promptly after such notice. No such resignation shall
become effective until the Indenture Trustee or a successor Servicer shall have
assumed the responsibilities and obligations of Sallie Mae Servicing Corporation
in accordance with Section 5.2.
ARTICLE V
SECTION 5.1 SERVICER DEFAULT. If any one of the following events (a "Servicer
Default") shall occur and be continuing:
(1) any failure by the Servicer (i) to deliver to the Indenture Trustee
for deposit in the Trust Accounts any payment required by the Basic
Documents to which the Servicer is a signatory or (ii) in the event
that daily deposits into the Collection Account are not required,
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to deliver to the Administrator any payment required by the Basic
Documents, which failure in case of either clause (i) or (ii)
continues unremedied for five Business Days after written notice of
such failure is received by the Servicer from the Eligible Lender
Trustee, the Indenture Trustee or the Administrator or five Business
Days after discovery of such failure by an officer of the Servicer; or
(2) any failure by the Servicer duly to observe or to perform in any
material respect any other covenant or agreement of the Servicer set
forth in this Agreement or any other Basic Document to which the
Servicer is a signatory, which failure shall (i) materially and
adversely affect the rights of Noteholders or Certificateholders and
(ii) continues unremedied for a period of 60 days after the date on
which written notice of such failure, requiring the same to be
remedied, shall have been given (A) to the Servicer by the Indenture
Trustee, the Eligible Lender Trustee or the Administrator or (B) to
the Servicer, and to the Indenture Trustee and the Eligible Lender
Trustee by the Noteholders or Certificateholders, as applicable,
representing not less than 25% of the Outstanding Amount of the Notes
or not less than 25% of the outstanding Certificate Balance provided,
however any breach of Sections 3.1, 3.2, 3.3 or 3.4 shall not be
deemed a Servicer Default so long as the Servicer is in compliance
with its repurchase and reimbursement obligations under Section 3.5;
or
(3) an Insolvency Event occurs with respect to the Servicer; or
(4) any failure by the Servicer to comply with any requirements under the
Higher Education Act resulting in a loss of its eligibility as a
third-party servicer;
then, and in each and every case, so long as the Servicer Default shall not have
been remedied, either the Indenture Trustee, or the Noteholders of Notes
evidencing not less than 25% of the Outstanding Amount of the Notes, by notice
then given in writing to the Servicer (and to the Indenture Trustee and the
Eligible Lender Trustee if given by the Noteholders) may terminate all the
rights and obligations (other than the obligations set forth in Section 3.5 and
Section 4.2) of the Servicer under this Agreement. As of the effective date of
termination of the Servicer, all authority and power of the Servicer under this
Agreement, whether with respect to the Notes, the Certificates or the Trust
Student Loans or otherwise, shall, without further action, pass to and be vested
in the Indenture Trustee or such
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successor Servicer as may be appointed under Section 5.2. The predecessor
Servicer shall cooperate with the successor Servicer, the Indenture Trustee and
the Eligible Lender Trustee in effecting the termination of the responsibilities
and rights of the predecessor Servicer under this Agreement, including the
transfer to the successor Servicer for administration by it of all cash amounts
that shall at the time be held by the predecessor Servicer for deposit, or shall
thereafter be received by it with respect to a Trust Student Loan. All
reasonable costs and expenses (including attorneys' fees) incurred in connection
with transferring the Trust Student Loan Files to the successor Servicer and
amending this Agreement and any other Basic Documents to reflect such succession
as Servicer pursuant to this Section shall be paid by the predecessor Servicer
(other than the Indenture Trustee acting as the Servicer under this Section 5.1)
upon presentation of reasonable documentation of such costs and expenses. Upon
receipt of notice of the occurrence of a Servicer Default, the Eligible Lender
Trustee shall give notice thereof to the Rating Agencies.
SECTION 5.2 APPOINTMENT OF SUCCESSOR.
A. Upon receipt by the Servicer of notice of termination pursuant to
Section 5.1, or the resignation by the Servicer in accordance with the terms of
this Agreement, the predecessor Servicer shall continue to perform its functions
as Servicer 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 Indenture Trustee or a successor Servicer shall have
assumed the responsibilities and duties of Sallie Mae Servicing Corporation. In
the event of the termination hereunder of the Servicer, the Issuer shall appoint
a successor Servicer acceptable to the Indenture Trustee, and the successor
Servicer shall accept its appointment by a written assumption in form acceptable
to the Indenture Trustee. In the event that a successor Servicer has not been
appointed at the time when the predecessor Servicer has ceased to act as
Servicer in accordance with this Section, the Indenture Trustee without further
action shall automatically be appointed the successor Servicer and the Indenture
Trustee shall be entitled to the Servicing Fee and any Carryover Servicing Fees.
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 Servicer under
this Agreement; PROVIDED, HOWEVER, that such right to appoint or to petition for
the appointment of any such successor Servicer shall in no event relieve the
Indenture Trustee from any
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obligations otherwise imposed on it under the Basic Documents until such
successor has in fact assumed such appointment.
B. Upon appointment, the successor Servicer (including the Indenture
Trustee acting as successor Servicer) shall be the successor in all respects to
the predecessor Servicer and shall be subject to all the responsibilities,
duties and liabilities placed on the predecessor Servicer that arise thereafter
or are related thereto and shall be entitled to an amount agreed to by such
successor Servicer (which shall not exceed the Servicing Fee unless the Rating
Agency Condition is satisfied with respect to such compensation arrangements)
and all the rights granted to the predecessor Servicer by the terms and
provisions of this Agreement.
C. The Servicer may not resign unless it is prohibited from serving as such
by law as evidenced by an Opinion of Counsel to such effect delivered to the
Indenture Trustee and the Eligible Lender Trustee. Notwithstanding the foregoing
or anything to the contrary herein or in the other Basic Documents, the
Indenture Trustee, to the extent it is acting as successor Servicer pursuant
hereto and thereto, shall be entitled to resign to the extent a qualified
successor Servicer has been appointed and has assumed all the obligations of the
Servicer in accordance with the terms of this Agreement and the other Basic
Documents.
SECTION 5.3 NOTIFICATION TO NOTEHOLDERS AND CERTIFICATEHOLDERS. Upon any
termination of, or appointment of a successor to, the Servicer pursuant to this
Article V, the Eligible Lender 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 of Notes evidencing a
majority of the Outstanding Amount of the Notes (or the Certificateholders of
Certificates evidencing not less than 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 Servicer 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
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 Servicer Default arising therefrom shall be deemed to have been
remedied for every purpose of this Agreement and the Administration Agreement.
No such waiver shall
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extend to any subsequent or other default or impair any right consequent
thereto.
ARTICLE VI
SECTION 6.1 AMENDMENT.
A. This Agreement may be amended by the Servicer, the Issuer, the
Administrator, the Eligible Lender Trustee and the Indenture Trustee, without
the consent of any of the Noteholders or the Certificateholders, to comply with
any change in any applicable federal or state law, 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; PROVIDED, HOWEVER, that such action shall not, as
evidenced by an Opinion of Counsel delivered to the Eligible Lender Trustee and
the Indenture Trustee, 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 Servicer,
the Issuer, the Administrator, the Eligible Lender Trustee 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 (including any Certificates owned by the Seller) 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 Trust 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, the Noteholders or the
Certificateholders of which are required to consent to any such amendment,
without the consent of all outstanding Noteholders and Certificateholders.
It shall not be necessary for the consent of Certificateholders or
Noteholders pursuant to paragraph B. to approve the particular form of any
proposed amendment or consent, but it shall be sufficient if such consent shall
approve the substance thereof.
Promptly after the execution of any amendment to this Agreement (or, in the
case of the Rating Agencies, fifteen days prior thereto), the Eligible Lender
Trustee shall furnish written
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notification of the substance of such amendment to each Certificateholder, the
Indenture Trustee and each of the Rating Agencies.
Prior to the execution of any amendment to this Agreement, the Eligible
Lender 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 Indenture Trustee may, but shall
not be obligated to, execute and deliver such amendment which affects its
rights, powers, duties or immunities hereunder.
SECTION 6.2 NOTICES. All notices hereunder shall be given by United States
certified or registered mail, by telegram or by other telecommunication device
capable of creating written record of such notice and its receipt. Notices
hereunder shall be effective when received and shall be addressed to the
respective parties hereto at the addresses set forth below, or at such other
address as shall be designated by any party hereto in a written notice to each
other party pursuant to this section.
If to Servicer, to: Sallie Mae Servicing Corporation 11600 Sallie Mae
Drive, Reston, Virginia 20193 Director of ABS Administration
If to Issuer, to: SLM Student Loan Trust 2000-1
c/o Chase Manhattan Bank Delaware, 1201 Market Street, Wilmington, Delaware
19801, Attn: Corporate Trust Dept.
with a copy to: The Chase Manhattan Bank, 450 West 33rd Street, 15th Floor,
New York, New York 10001, Attn: Structured Finance Services
If to the Administrator, to: Student Loan Marketing
Association, 11600 Sallie Mae Drive, Reston, Virginia 20193, Attn:
Director, Corporate Finance Operations
If to the Eligible Lender Trustee, to: Chase Manhattan Bank Delaware, 1201
Market Street, Wilmington, Delaware 19801, Attn: Corporate Trust Dept.
with a copy to: The Chase Manhattan Bank, 450 West 33rd Street, 15th Floor,
New York, New York 10001, Attn: Structured Finance Services.
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If to the Indenture Trustee, to: Bankers Trust Company,
Four Albany Street, 10th Floor, New York, New York 10006, Attn: Corporate
Trust and Agency Group, Facsimile No.: (212) 250-6439
SECTION 6.3 COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be deemed to be an original, and such counterparts shall
constitute one (1) and the same instrument.
SECTION 6.4 ENTIRE AGREEMENT; SEVERABILITY. This Agreement constitutes the
entire agreement between the Issuer, the Administrator, the Eligible Lender
Trustee, the Indenture Trustee and Servicer. All prior representations,
statements, negotiations and undertakings with regard to the subject matter
hereof are superseded hereby.
If any term or provision of this Agreement or the application thereof to
any person or circumstance shall, to any extent, be invalid or unenforceable,
the remaining terms and provisions of this Agreement, or the application of such
terms or provisions to persons or circumstances other than those as to which it
is held invalid or unenforceable, shall not be affected thereby, and each term
and provision of this Agreement shall be valid and enforced to the fullest
extent permitted by law.
SECTION 6.5 GOVERNING LAW. The terms of this Agreement shall be subject to all
applicable provisions of the Higher Education Act and shall be construed in
accordance with and governed by the laws of the State of New York 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 6.6 RELATIONSHIP OF PARTIES. Servicer is an independent contractor and,
except for the services which it agrees to perform hereunder, the Servicer does
not hold itself out as an agent of any other party hereto. Nothing herein
contained shall create or imply an agency relationship among Servicer and any
other party hereto, nor shall this Agreement be deemed to constitute a joint
venture or partnership between the parties.
SECTION 6.7 CAPTIONS. The captions used herein are for the convenience of
reference only and not part of this Agreement, and shall in no way be deemed to
define, limit, describe or modify the meanings of any provision of this
Agreement.
SECTION 6.8 NONLIABILITY OF DIRECTORS, OFFICERS AND EMPLOYEES OF SERVICER, THE
ELIGIBLE LENDER TRUSTEE, THE INDENTURE TRUSTEE AND THE ADMINISTRATOR. No member
of the board of directors or any
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officer, employee or agent of Servicer, the Administrator, the Eligible Lender
Trustee or the Indenture Trustee (or any Affiliate of any such party) shall be
personally liable for any obligation incurred under this Agreement.
SECTION 6.9 ASSIGNMENT. This Agreement may not be assigned by the Servicer
except as permitted under Sections 4.3, 4.5 and 5.2 hereof. This Agreement may
not be assigned by the Administrator except as permitted under Sections 4.3 and
4.6 of the Administration Agreement.
SECTION 6.10 LIMITATION OF LIABILITY OF ELIGIBLE LENDER TRUSTEE AND INDENTURE
TRUSTEE.
A. Notwithstanding anything contained herein to the contrary, this
Agreement has been signed by Chase Manhattan Bank Delaware not in its individual
capacity but solely in its capacity as Eligible Lender Trustee of the Issuer and
in no event shall Chase Manhattan Bank Delaware in its individual capacity or,
except as expressly provided in the Trust Agreement, as Eligible Lender Trustee
have any liability for the representations, warranties, covenants, agreements or
other obligations of the Issuer or the Eligible Lender Trustee 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.
B. Notwithstanding anything contained herein to the contrary, this
Agreement has been signed by Bankers Trust Company not in its individual
capacity but solely as Indenture Trustee and in no event shall Bankers 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.
26
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed on their behalf by their duly authorized officers as of February
15, 2000.
SALLIE MAE SERVICING CORPORATION
By: /S/ THOMAS P. BRISSON
------------------------------
Name: THOMAS P. BRISSON
------------------------------
Title: VICE PRESIDENT
------------------------------
STUDENT LOAN MARKETING ASSOCIATION, as Administrator
By: /S/ MICHAEL E. SHEEHAN
------------------------------
Name: MICHAEL E. SHEEHAN
------------------------------
Title: ASSISTANT VICE PRESIDENT
------------------------------
SLM STUDENT LOAN TRUST 2000-1 by Chase Manhattan Bank Delaware, not in its
individual capacity but solely as Eligible Lender Trustee
By: /S/ JOHN J. CASHIN
------------------------------
Name: JOHN J. CASHIN
------------------------------
Title: VICE PRESIDENT
------------------------------
CHASE MANHATTAN BANK DELAWARE, not in its individual capacity but solely as
Trustee under a Trust Agreement dated February 1, 2000 between SLM Funding
Corporation and Chase Manhattan Bank Delaware
By: /S/ JOHN J. CASHIN
------------------------------
Name: JOHN J. CASHIN
------------------------------
Title: VICE PRESIDENT
------------------------------
27
<PAGE>
BANKERS TRUST COMPANY, not in its individual capacity but solely as Indenture
Trustee under an Indenture dated February 1, 2000 between SLM Student Loan Trust
2000-1 and Bankers Trust Company.
By: /S/ PATRICIA M. F. RUSSO
------------------------------
Name: PATRICIA M. F. RUSSO
------------------------------
Title: VICE PRESIDENT
------------------------------
28
<PAGE>
ATTACHMENT A
SCHEDULE OF FEES
The Servicer will receive a Primary Servicing Fee and a Carryover Servicing
Fee (together, the "Servicing Fee"). The "Primary Servicing Fee" for any month
is an amount equal to the sum of 1/12th of 0.90% of the outstanding principal
amount of the Trust Student Loans other than Consolidation Loans plus 1/12th of
0.50% of the outstanding principal amount of the Trust Student Loans that are
Consolidation Loans, in each case as of the last day of the preceding calendar
month, plus any such amounts from prior Monthly Servicing Payment Dates that
remain unpaid. The Primary Servicing Fee will be payable out of Available Funds
and amounts on deposit in the Reserve Account on the 25th day of each month (or,
if any such date is not a business day, on the next succeeding business day),
commencing March 27, 2000 (each, a "Monthly Servicing Payment Date"). The
"Carryover Servicing Fee" is the sum of (a) the amount of certain increases in
the costs incurred by the Servicer which are agreed to pursuant to Section 3.8
of the Servicing Agreement, (b) any Conversion Fees, Transfer Fees and Removal
Fees (as defined below) incurred since the last Distribution Date and (c) any
amounts described in (a) and (b) above that remain unpaid from prior
Distribution Dates plus interest on such amounts for the period from the
Distribution Date on which such amounts become due to the date such amounts are
paid in full at a rate per annum for each Interest Period (as defined below)
equal to the sum of (a) the average accepted auction price (expressed on a bond
equivalent basis) for 91-day Treasury Bills sold at the most recent 91-day
Treasury Bill auction prior to the Interest Period as reported by the U.S.
Treasury Department and (b) 2.00%.
Interest Period" shall mean the period from each Distribution Date through
the day before the next Distribution Date. The Carryover Servicing Fee will be
payable to the Servicer on each succeeding Distribution Date out of Available
Funds after payment on such Distribution Date of the Primary Servicing Fee, the
Administration Fee, the Swap Fee, the Noteholders' Distribution Amount, the
Certificateholders' Distribution Amount, the amount, if any, necessary to be
deposited in the Reserve Account to reinstate the balance thereof to the
Specified Reserve Account Balance and the Swap Payment. On the March 27, 2000
Monthly Servicing Payment Date, the Servicer shall receive a pro rata portion of
the Primary Servicing Fee for the period from the Closing Date to and including
February 29, 2000.
1
<PAGE>
Servicer will be paid a fee ("Conversion Fee") for any Student Loan added
to the Trust Estate which Student Loan is not serviced on the Servicer's system
unless such Student Loan is being substituted into the Trust Estate by the
Servicer pursuant to Section 3.5 of this Agreement. The Conversion Fee is equal
to the greater of $17.00 per account or the Servicer's verifiable costs plus
15%.
Servicer will be paid a fee ("Transfer Fee") for any Student Loan
transferred in or out of the Trust Estate which is at the time of transfer being
serviced on the Servicer's system (regardless of the owner) unless such Student
Loans are being removed or added to the Trust in order to comply with the
Servicer's purchase/substitution obligation under Section 3.5 of this Agreement.
The Transfer Fee is equal to $4.00 per account transaction.
Servicer will be paid a fee ("Removal Fee") for performing all activities
required to remove a Trust Student Loan from the Servicer's system to another
servicer unless such Trust Student Loan is being removed due to the termination
of the Servicer pursuant to Section 5.1 of this Agreement. The Removal Fee is
equal to $10.00 per account plus any verifiable direct expenses incurred for
shipping such Trust Student Loan to the new servicer.
2
<PAGE>
ATTACHMENT B
Loan Servicing Center/Florida
P.O. Box 2975
Panama City, Florida 32402-2975
(904) 271-9207
Loan Servicing Center/Kansas
P.O. Box 309
Lawrence, Kansas 66044
(913) 841-0234
Loan Servicing Center/Pennsylvania
220 Lasley Avenue
Hanover Industrial Estates
Wilkes-Barre, Pennsylvania 18706
(717) 821-3600
Loan Servicing Center/Texas
777 Twin Creek Drive
Killeen, Texas 76543
(817) 554-4500
1
<PAGE>
ATTACHMENT C
------------
REPORTS
1. CLASS Report 800 - Monthly activity summary report
2. CLASS Report 801 - Monthly average/ending balance report
3. CLASS Report 802 - Monthly activity detail
4. CLASS Report 803 - Monthly conversion/removal summary
5. CLASS Report 807 - Monthly delinquency aging report
6. CLASS Report 810 - Monthly characteristics summary
7. CLASS Report 866 - Monthly average/ending balance offset fee report
8. CLASS Report 882 - Great Rewards/Direct Repay Report
9. Monthly Cash Reconciliation Report
10. Quarterly ED799 billing (prepared from CLASS Reports 824, 825, 827, 828
and 829; supporting detail CLASS Reports 865, 868, 870 and 871; and the
OE799 SAS library)
11. Portfolio Characteristics, Financial Activity, Quarterly calculation of
Accrued Interest to be capitalized, Delinquency Detail and Claims
extracts.
2
<PAGE>
Exhibit 99.5
PAYING AGENT AGREEMENT
----------------------
This PAYING AGENT AGREEMENT, dated as of February 15, 2000 (this "Agreement")
is entered into by and among (i) CHASE MANHATTAN BANK DELAWARE, a Delaware
banking corporation acting not in its individual capacity but solely as Eligible
Lender Trustee under the trust agreement referred to below (the "Trustee"), (ii)
BANKERS TRUST COMPANY, a New York banking corporation (the "Agent") and (iii)
STUDENT LOAN MARKETING ASSOCIATION, a federally chartered corporation (the
"Administrator").
W I T N E S S E T H;
--------------------
WHEREAS, the Trustee and the Administrator desire to appoint the Agent as the
co-paying agent under the Amended and Restated Trust Agreement, dated as of
February 1, 2000 (the "Trust Agreement"), between the Trustee and SLM Funding
Corporation;
WHEREAS, the Agent desires to accept such appointment.
NOW THEREFORE, the Trustee, the Administrator and the Agent agree as follow:
1. Pursuant to Section 3.9 of the Trust Agreement, the Trustee hereby
appoints the Agent as the co-paying agent to perform the duties of the
Certificate Paying Agent as set forth in the Trust Agreement and the Agent
hereby accepts such appointment and the duties relating thereto as if the Agent
had been a party to the Trust Agreement. The Administrator hereby consents to
such appointment.
2. The Agent shall be subject to the same standard of care as, and shall be
entitled to the same rights, protections and immunities afforded to, the Trustee
under the Trust Agreement.
3. The Administrator covenants to indemnify the Agent for, and to hold it
harmless against, any loss, liability or expense incurred without willful
misconduct, negligence or bad faith on the part of the Agent arising our of or
in connection with the acceptance or administration of
<PAGE>
this Agreement and the duties hereunder, including the reasonable costs and
expenses of defending itself against any claim of liability in the premises.
4. This Agreement may be modified by agreement of the parties hereto and may
be terminated by any party upon sixty (60) days prior written notice to the
other parties.
5. Initially capitalized terms which are used herein and which are not
defined herein have the meanings set forth in the Trust Agreement.
6. This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original, but all of which shall constitute
one and the same instrument.
[SIGNATURE PAGE FOLLOWS]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.
STUDENT LOAN MARKETING
ASSOCIATION, as Administrator
By: /S/ Michael E. Sheehan
---------------------------------------
Name: Michael E. Sheehan
Title: Assistant Vice President
CHASE MANHATTAN BANK
DELAWARE, as Eligible Lender Trustee
By: /S/ John J. Cashin
---------------------------------------
Name: John J. Cashin
Title: Vice President
BANKERS TRUST COMPANY, as Agent
By: /S/ Patricia M. F. Russo
---------------------------------------
Name: Patricia M. F. Russo
Title: Vice President
