EXHIBIT 99.1
PURCHASE AGREEMENT MASTER SECURITIZATION TERMS NUMBER 1000
These Purchase Agreement Master Securitization Terms Number 1000 ("Master
Terms") dated as of July 28, 2004 among SLM Education Credit Finance Corporation
("SLM ECFC"), SLM Funding LLC ("Funding") and Chase Manhattan Bank USA, National
Association, 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 July 1, 2004 between
Funding and the Interim Eligible Lender Trustee, 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, SLM ECFC is the owner of certain student loans guaranteed under
the Higher Education Act;
WHEREAS, SLM ECFC may desire to sell its interest in such loans from time
to time and Funding may desire to purchase such loans from SLM ECFC; and
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 SLM ECFC 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 SLM
ECFC, 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, including in the
related Purchase Agreement and ▇▇▇▇ of Sale, shall have the definitions set
forth in Appendix A to the Indenture dated as of July 1, 2004, among the
Eligible Lender Trustee on behalf of the Trust, the Trust and the Indenture
Trustee, as may be amended or supplemented from time to time.
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) "▇▇▇▇ of Sale" means each document in the form of Attachment C hereto,
executed by an authorized officer of SLM ECFC and the Interim Eligible
Lender Trustee on behalf of Funding, which shall (i) set forth the
Purchased Loans offered by SLM ECFC and accepted for purchase by the
Interim Eligible Lender Trustee, for the benefit of Funding, (ii) sell,
assign and convey to the Interim Eligible Lender Trustee, for the benefit
of Funding and its assignees, all rights, title and interest of SLM ECFC
in the Loans listed on that ▇▇▇▇ of Sale and (iii) certify that the
representations and warranties made by SLM ECFC pursuant to Sections 5(A)
and (B) 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 the Payment Cutoff Date, and with respect to
substitutions hereunder, a date agreed to by SLM ECFC 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) "Eligible Loan" means a Loan offered for sale by SLM ECFC under the
Purchase Agreement dated as of the Closing Date, or substituted by SLM
ECFC under any other Purchase Agreement entered into after the Closing
Date, which as of the Statistical Cutoff Date, or in the case of a
Purchase Agreement entered into after the Closing Date, as of the related
Purchase Date, is current or not more past due than permitted under such
Purchase Agreement in payment of principal or interest and which meets the
following criteria as of the Statistical Cutoff Date or as of the
applicable Purchase Date, in the case of any Loan substituted pursuant to
these Master Terms after the Closing Date:
(i) is a ▇▇▇▇▇▇▇▇ Loan, a PLUS Loan or SLS Loan, and is not a
Consolidation Loan;
(ii) is owned by SLM ECFC 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;
2
(vii) is current or no payment of principal or interest shall be
more than 210 days past due;
(viii) the last disbursement was before the Statistical Cutoff Date,
or, in the case of any Loan substituted pursuant to these Master
Terms after the Closing Date, before the related Purchase Date;
(ix) is supported by the following documentation:
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) or the electronic
records evidencing the same,
3. evidence of guarantee,
4. any other document and/or record which Funding may be
required to retain pursuant to the Higher Education Act,
5. if applicable, 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 Statistical Cutoff Date, or, in the case of any
Loan substituted pursuant to these Master Terms after
the Closing Date, as of the related Purchase Date and
(ii) an accounting of the allocation of all payments by
the Borrower or on the Borrower's behalf to principal
and interest on the Loan,
6. if applicable, documentation which supports periods of
current or past deferment or past forbearance,
7. if applicable, 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,
8. if applicable, evidence of all requests for skip-tracing
assistance and current address of Borrower, if located,
9. if applicable, evidence of requests for pre-claims
assistance, and evidence that the Borrower's school(s)
have been notified, and
10. if applicable, a record of any event resulting in a
change to or confirmation of any data in the Loan file.
3
(G) "Excess Distribution Certificate" means the certificate, substantially
in the form of Exhibit A to the Trust Agreement, evidencing the right to
receive payments thereon as set forth in Sections 2.8(m) and 2.9(f) of the
Administration Agreement.
(H) "Initial Payment" means the dollar amount specified as the "Initial
Payment" in the applicable Purchase Agreement.
(I) "Loan" means the Eligible Loans evidenced by the Note sold on the
Closing Date, or the Eligible Loans evidenced by the Note substituted on
the related Purchase Date in the case of any Loans substituted pursuant to
these Master Terms after the Closing Date, pursuant to the related
Purchase Agreement and related documentation together with any guaranties
and other rights relating thereto including, without limitation, Interest
Subsidy Payments and Special Allowance Payments.
(J) "Loan Transmittal Summary Forms" means the forms related to each ▇▇▇▇
of Sale provided to SLM ECFC by Funding and completed by SLM ECFC that
list, by Borrower, (i) the Loans subject to the related ▇▇▇▇ of Sale and
(ii) the outstanding Principal Balance and accrued interest thereof as of
the Statistical Cutoff Date, or as of the related Purchase Date, in the
case of any Loan substituted pursuant to these Master Terms after the
Closing Date.
(K) "Note" means the promissory note or notes of the Borrower and any
amendment thereto evidencing the Borrower's obligation with regard to a
student loan guaranteed under the Higher Education Act or the electronic
records evidencing the same.
(L) "Payment Cutoff Date" means July 28, 2004 or, in the case of Loans
substituted pursuant to these Master Terms after the Closing Date, the
related Purchase Date as specified in the related Purchase Agreement.
(M) "PLUS Loan" means a Loan that 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 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 Date" means with respect to any purchase or substitution,
the date of the related ▇▇▇▇ of Sale.
(Q) "Purchase Price" means the Initial Payment.
(R) "Purchased Loans" means, with respect to each Purchase Agreement, the
Loans offered for sale and purchased or substituted pursuant to such
Purchase Agreement.
4
(S) "Sale Agreement" means the Sale Agreement Master Securitization Terms
Number 1000, dated as of July 28, 2004, among SLM Funding LLC, as Seller,
SLM Student Loan Trust 2004-7, as Purchaser, and Chase Manhattan Bank USA,
National Association, as Interim Eligible Lender Trustee and as Eligible
Lender Trustee.
(T) "Secretary" means the United States Secretary of Education or any
successor.
(U) "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.
(V) "▇▇▇▇▇▇▇▇ Loan" means a Subsidized ▇▇▇▇▇▇▇▇ Loan or an Unsubsidized
▇▇▇▇▇▇▇▇ Loan.
(W) "Statistical Cutoff Date" means July 8, 2004.
(X) "Subsidized ▇▇▇▇▇▇▇▇ Loan" means a Loan for which the interest rate is
governed by Section 427A(a) or 427A(d) of the Higher Education Act.
(Y) "Trust Student Loan" means any student loan that is listed on the
Schedule of Trust Student Loans on the Closing Date plus any student loan
that is permissibly substituted for a Trust Student Loan by the Depositor
pursuant to Section 6 of the Sale Agreement or by the Servicer pursuant to
Section 3.5 of the Servicing Agreement, but shall not include any
Purchased Student Loan following receipt by or on behalf of the Trust of
the Purchase Amount with respect thereto or any Liquidated Student Loan
following receipt by or on behalf of the Trust of Liquidation Proceeds
with respect thereto or following such Liquidated Student Loan having
otherwise been written off by the Servicer.
(Z) "Unsubsidized ▇▇▇▇▇▇▇▇ 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 the Purchase
Agreement to be dated as of the Closing Date shall be consummated upon (i)
Funding's receipt from SLM ECFC of the related ▇▇▇▇ of Sale, (ii) the
payment by Funding to SLM ECFC of the Initial Payment and (iii) the
assignment to SLM ECFC of the Excess Distribution Certificate. Upon
consummation, such sale and purchase shall be effective as of the date of
the ▇▇▇▇ of Sale. SLM ECFC and Funding shall use their best efforts to
perform promptly their respective obligations pursuant to such Purchase
Agreement with respect to each Loan.
(B) Settlement of the Initial Payment
5
On the Closing Date, Funding shall pay to SLM ECFC the Initial
Payment by wire transfer of immediately available funds to the account
specified by SLM ECFC.
(C) Interest Subsidy and Special Allowance Payments and Rebate Fees
SLM ECFC shall be entitled to all Interest Subsidy Payments and
Special Allowance Payments on the Loans up to but not including the
related Payment Cutoff Date, and shall be responsible for the payment of
rebate fees, if any, applicable to Purchased Loans accruing up to but not
including the related Payment Cutoff Date. The Interim Eligible Lender
Trustee on behalf of Funding shall be entitled to all Special Allowance
Payments and Interest Subsidy Payments on the Purchased Loans accruing
from, and including, the related Payment Cutoff Date, and shall be
responsible for the payment of any rebate fees applicable to Purchased
Loans accruing from, and including, the Payment Cutoff Date.
(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 each Borrower of a Trust Student Loan sold hereunder 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 SLM Corporation or any of its Affiliates, at all times subject to
the terms and conditions of Section 3.12 of the Servicing Agreement. SLM
ECFC is selling Loans to Funding without regard to the effect of any
special programs. If required, SLM ECFC shall remit to Funding any amounts
necessary to offset any effective yield reductions on related Trust
Student Loans as set forth in Section 3.12 of the Servicing Agreement.
(E) Intent of the Parties
With respect to each sale of Loans pursuant to these Master Terms
and the related Purchase Agreements, it is the intention of SLM ECFC, the
Interim Eligible Lender Trustee and Funding, and SLM ECFC hereby warrants
that, the transfer and assignment constitute a valid sale of such Loans
from SLM ECFC to the Interim Eligible Lender Trustee, for the benefit of
and on behalf of Funding, and that the beneficial interest in and title to
such Loans not be part of SLM ECFC's estate in the event of the bankruptcy
of SLM ECFC or the appointment of a receiver with respect to SLM ECFC.
SECTION 4. CONDITIONS PRECEDENT TO PURCHASE OR SUBSTITUTION
Any purchase or substitution of Loans pursuant to these Master Terms
is subject to the following conditions precedent being satisfied (and SLM
ECFC, by accepting payment, shall be deemed to have certified that all
such conditions are satisfied on the date of such purchase):
(A) Activities Prior to the Related Purchase Date
6
SLM ECFC shall provide any assistance requested by Funding in
determining that all required documentation on the related Loans is
present and correct.
(B) Continued Servicing
Following the execution of each Purchase Agreement, SLM ECFC 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
related ▇▇▇▇ of Sale.
(C) ▇▇▇▇ of Sale/Loan Transmittal Summary Form
SLM ECFC shall deliver to Funding:
(i) a ▇▇▇▇ of Sale that (a) has been duly authorized, executed and
delivered, by an authorized officer of SLM ECFC, covering the
applicable Loans offered by SLM ECFC, (b) has been 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 SLM ECFC, including the
insurance interest of SLM ECFC, in each of the related Loans, and
(c) states that the representations and warranties made by SLM ECFC
in Sections 5(A) and (B) of these Master Terms are true and correct
on and as of the date of the ▇▇▇▇ of Sale; and
(ii) the Loan Transmittal Summary Form, attached to the ▇▇▇▇ of
Sale, identifying each of the Eligible Loans which is the subject of
the ▇▇▇▇ of Sale and setting forth the unpaid Principal Balance of
each such Loan.
(D) Endorsement
SLM ECFC shall provide a blanket endorsement transferring the entire
interest of SLM ECFC in the Loans to the Interim Eligible Lender Trustee
on behalf of Funding with the form of endorsement provided for in the
related Purchase Agreement.
At the direction of and in such form as Funding may designate, SLM
ECFC also agrees to individually endorse any Eligible Loan as Funding may
request from time to time.
(E) Officer's Certificate
SLM ECFC shall furnish to Funding, with each ▇▇▇▇ of Sale provided
in connection with each purchase or substitution of Loans pursuant to
these Master Terms, an Officer's Certificate, dated as of the date of such
▇▇▇▇ of Sale.
(F) Loan Transfer Statement
Upon Funding's request, SLM ECFC 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 SLM ECFC and dated the date
of the related ▇▇▇▇ of
7
Sale. SLM ECFC agrees that Funding and the Interim Eligible Lender Trustee
may use the related ▇▇▇▇ of Sale, including the Loan Transmittal Summary
Form attached to that ▇▇▇▇ of Sale, in lieu of OE Form 1074, as official
notification to the Guarantor of the assignment by SLM ECFC to the Interim
Eligible Lender Trustee on behalf of Funding of the Loans listed on the
related ▇▇▇▇ of Sale.
(G) Power of Attorney
SLM ECFC hereby grants to Funding and the Interim Eligible Lender
Trustee, on behalf of and 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
SLM ECFC 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 SLM ECFC or the Servicer to Funding or the Interim Eligible Lender
Trustee or any custodian on their behalf.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF SLM ECFC AND THE INTERIM ELIGIBLE
LENDER TRUSTEE
(A) General
SLM ECFC represents and warrants to Funding that with respect to a
portfolio of Loans, as of the date of each Purchase Agreement and ▇▇▇▇ of
Sale:
(i) SLM ECFC 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) SLM ECFC is duly organized and existing under the laws of its
governing jurisdiction;
(iii) SLM ECFC has all requisite power and authority to enter into
and to perform the terms of these Master Terms and that Purchase
Agreement and ▇▇▇▇ of Sale; and
(iv) SLM ECFC 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
SLM ECFC represents and warrants to Funding as to the Purchased
Loans purchased by Funding or substituted by SLM ECFC under the related
Purchase
8
Agreement and each ▇▇▇▇ of Sale executed pursuant these Master Terms as of
the date of the related Purchase Agreement, or as of the date otherwise
noted:
(i) SLM ECFC has good and marketable title to, and is the sole owner
of, the Purchased 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 those Loans;
(ii) These Master Terms create a valid and continuing security
interest (as defined in the applicable UCC) in the Purchased Loans
in favor of the Interim Eligible Lender Trustee, which security
interest is prior to all other security interests, liens, charges,
claims, offsets, defenses, counterclaims or encumbrances, and is
enforceable as such as against creditors of and purchasers from SLM
ECFC;
(iii) The Purchased Loans constitute "Accounts" within the meaning
of the applicable UCC and are within the coverage of Sections
432(m)(1)(E) and 439(d)(3) of the Higher Education Act;
(iv) As of the Statistical Cutoff Date, or, in the case of any
purchase following the Closing Date, as of the date of the related
Purchase Agreement, the Purchased Loans are Eligible Loans and the
description of the Loans set forth in the related Purchase Agreement
and the related Loan Transmittal Summary Form is true and correct;
(v) SLM ECFC is authorized to sell, assign, transfer, substitute and
repurchase the Purchased Loans; and the sale, assignment and
transfer of such Loans is or, in the case of a Loan repurchase or
substitution by SLM ECFC, will be made pursuant to and consistent
with the laws and regulations under which SLM ECFC 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 SLM
ECFC is a party or by which SLM ECFC 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;
(vi) The Purchased 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);
(vii) No consents and approvals are required by the terms of the
Purchased Loans for the consummation of the sale of the Purchased
Loans hereunder to the Interim Eligible Lender Trustee;
(viii) As of the Statistical Cutoff Date, or, in the case of any
purchase following the Closing Date, as of the date of the related
Purchase Agreement, each Loan has been duly made and serviced in
accordance with the provisions of the Federal
9
Family Education Loan Program established under the Higher Education
Act, and has been duly insured by a Guarantor; as of the Statistical
Cutoff Date, or, in the case of any purchase following the Closing
Date, as of the date of the related Purchase Agreement, 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 related ▇▇▇▇ of Sale;
(ix) Any payments on the Purchased Loans received by SLM ECFC that
have been allocated to the reduction of principal and interest on
such Purchased Loans have been allocated on a simple interest basis;
the information with respect to the applicable Purchased Loans as of
the Statistical Cutoff Date or, in the case of any substituted
Loans, the related Payment Cutoff Date, as stated on the related
Loan Transmittal Summary Form is true and correct;
(x) Due diligence and reasonable care have been exercised in the
making, administering, servicing and collecting on the Purchased
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;
(xi) All origination fees authorized to be collected pursuant to
Section 438 of the Higher Education Act have been paid to the
Secretary;
(xii) Each Loan has been duly made and serviced in accordance with
the provisions of all applicable federal and state laws;
(xiii) No Loan is more than two hundred ten (210) days past due as
of the Statistical Cutoff Date, or, in the case of any substitution
following the Closing Date, as of the date of the related Purchase
Agreement, and no default, breach, violation or event permitting
acceleration under the terms of any Loan has arisen; and neither SLM
ECFC nor any predecessor holder of any Loan has waived any of the
foregoing other than as permitted by the Basic Documents;
(xiv) It is the intention of SLM ECFC, the Interim Eligible Lender
Trustee and Funding, and SLM ECFC hereby warrants that, the transfer
and assignment herein contemplated constitute a valid sale of the
Loans from SLM ECFC to the Interim Eligible Lender Trustee, for the
benefit of and on behalf of Funding, and that the beneficial
interest in and title to such Loans not be part of SLM ECFC's estate
in the event of the bankruptcy of SLM ECFC or the appointment of a
receiver with respect to SLM ECFC;
(xv) With respect to the first sale of Loans from SLM ECFC to the
Interim Eligible Lender Trustee for the benefit of Funding it has
caused or will have caused, within ten days of the Closing Date, the
filing of all appropriate financing statements in the proper filing
office in the appropriate jurisdictions under
10
applicable law in order to perfect the security interest in the
Loans granted to the Interim Eligible Lender Trustee hereunder;
(xvi) Except for Purchased Loans executed electronically, there is
only one original executed copy of the Note evidencing each
Purchased Loan. For Purchased Loans that were executed
electronically, the Servicer has possession of the electronic
records evidencing the Note. The Interim Eligible Lender Trustee has
in its possession a copy of the endorsement and Loan Transmittal
Summary Form identifying the Notes that constitute or evidence the
Purchased Loans. The Notes that constitute or evidence the Purchased
Loans do not have any marks or notations indicating that they have
been pledged, assigned or otherwise conveyed to any Person other
than the Interim Eligible Lender Trustee. All financing statements
filed or to be filed against SLM ECFC in favor of the Interim
Eligible Lender Trustee on behalf of the Purchaser in connection
herewith describing the Loans contain a statement to the following
effect: "A purchase of or security interest in any collateral
described in this financing statement will violate the rights of the
Interim Eligible Lender Trustee;"
(xvii) Other than the security interest granted to the Interim
Eligible Lender Trustee pursuant to this Agreement, SLM ECFC has not
pledged, assigned, sold, granted a security interest in, or
otherwise conveyed any of the Purchased Loans. SLM ECFC has not
authorized the filing of and is not aware of any financing
statements against SLM ECFC that include a description of collateral
covering the Purchased Loans other than any financing statement
relating to the security interest granted to the Interim Eligible
Lender Trustee hereunder or any other security interest that has
been terminated. SLM ECFC is not aware of any judgment or tax lien
filings against SLM ECFC; and
(xviii) No Borrower of a Purchased Loan as of the Statistical Cutoff
Date or, in the case of any substitution following the Closing Date,
as of the date of the related Purchase Agreement, 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 ▇▇▇▇ 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 these Master Terms, each
Purchase Agreement and each ▇▇▇▇ of Sale;
(ii) The Interim Eligible Lender Trustee has taken all corporate
action necessary to authorize the execution and delivery by it of
these Master Terms and each Purchase Agreement, and these Master
Terms and each Purchase Agreement will be executed and delivered by
one of its officers who is duly authorized to
11
execute and deliver these Master Terms and each Purchase Agreement
on its behalf;
(iii) Neither the execution nor the delivery by it of these Master
Terms and each Purchase 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 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 these Master Terms, each 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 Guarantee Agreement with each of the Guarantors with
respect to the Trust Student Loans.
SECTION 6. REPURCHASE OF TRUST STUDENT LOANS; REIMBURSEMENT
Each party to these Master Terms shall give notice to the other parties
promptly, in writing, upon the discovery of any breach of SLM ECFC's
representations and warranties made pursuant to Sections 5(A) and (B) 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 applicable Guarantor's guarantee of such Trust Student
Loan, SLM ECFC 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, SLM
ECFC shall purchase such Trust Student Loan not later than the sixtieth day
following the end of such 360-day period. SLM ECFC shall also remit as provided
in Section 2.6 of the Administration Agreement on the date of repurchase of any
Trust Student Loan pursuant to this Section 6 an amount equal to all
non-guaranteed 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
▇▇▇▇▇▇▇ ▇, ▇▇▇ ECFC shall remit the Purchase Amount in the manner specified in
Section 2.6 of the Administration Agreement.
In addition, if any breach of Sections 5(A) and (B) hereof by SLM ECFC
does not trigger such repurchase 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
12
Subsidy Payments and Special Allowance Payments, with respect to any Trust
Student Loan affected by such breach, then SLM ECFC shall reimburse Funding by
remitting an amount equal to the sum of all such non-guaranteed 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 SLM ECFC 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, SLM
ECFC 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 SLM ECFC or the Servicer, exceeds 1% of the Pool Balance, SLM ECFC
(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 SLM ECFC 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 repurchased first.
In lieu of repurchasing Trust Student Loans pursuant to this ▇▇▇▇▇▇▇ ▇,
▇▇▇ ECFC 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 ▇▇▇▇▇▇▇▇ Loan or
Subsidized ▇▇▇▇▇▇▇▇ Loan (pre-1993 vs. post-1993), PLUS
Loan or SLS Loan),
3. school type,
4. total return,
5. principal balance, and
6. remaining term to maturity.
13
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 ▇▇▇▇▇▇▇ ▇, ▇▇▇ ECFC
shall make a reasonable determination that the Eligible Loans to be substituted
will not have a material adverse effect on the Noteholders or the Interest Rate
Cap Counterparty. In connection with each substitution a Purchase Agreement and
related ▇▇▇▇ of Sale regarding such substituted Loans will be executed and
delivered by the applicable parties.
In the event that SLM ECFC elects to substitute Eligible Loans pursuant to
this ▇▇▇▇▇▇▇ ▇, ▇▇▇ ECFC 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.
SLM ECFC shall also remit to the Administrator an amount equal to all
non-guaranteed 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 and the
Noteholders with respect to a breach by SLM ECFC pursuant to Sections 5(A) and
(B) hereof shall be to require SLM ECFC to purchase such Trust Student Loans, to
reimburse Funding as provided above or to substitute Eligible Loans pursuant to
this Section 6. 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 SLM ECFC with respect to amounts accrued after
the date of the related ▇▇▇▇ of Sale for any Purchased Loan sold to
Funding, which payment is not reflected in the related Loan Transmittal
Summary Form, shall be received by SLM ECFC in trust for the account of
Funding and SLM ECFC hereby disclaims any title to or interest in any such
amounts. Within two (2) Business Days following the date of receipt, SLM
ECFC shall remit to Funding an amount equal to any such payments along
with a listing on a form provided by Funding identifying the Purchased
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 SLM ECFC with
respect to any Loan subject to these Master Terms or the related Purchase
Agreement shall be transmitted by SLM ECFC to the 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.
14
SECTION 8. CONTINUING OBLIGATION OF THE SELLER
SLM ECFC 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 SLM ECFC owned the
related Purchased Loan, or (b) a payment made or alleged to have been made to
SLM ECFC. Further, SLM ECFC 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 THE SELLER; INDEMNITIES
SLM ECFC shall be liable in accordance herewith only to the extent of the
obligations specifically undertaken by SLM ECFC under these Master Terms and
each related Purchase Agreement.
(i) SLM ECFC 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 and intangible
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 Purchased 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) SLM ECFC 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, SLM ECFC's willful misfeasance,
bad faith or gross negligence in the performance of its duties under
these Master Terms, or by reason of reckless disregard of its
obligations and duties under these Master Terms.
(iii) SLM ECFC 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 these Master Terms, 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 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
15
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 SLM ECFC, which approval
shall not be unreasonably withheld.
Indemnification under this Section 9 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 SLM ECFC 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 SLM ECFC, without interest.
SECTION 10. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE OBLIGATIONS OF THE
SELLER
Any Person (a) into which SLM ECFC may be merged or consolidated, (b)
which may result from any merger or consolidation to which SLM ECFC shall be a
party or (c) which may succeed to the properties and assets of SLM ECFC
substantially as a whole, shall be the successor to SLM ECFC without the
execution or filing of any document or any further act by any of the parties to
these Master Terms; provided, however, that SLM ECFC 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 SLM ECFC, executes an
agreement of assumption to perform every obligation of SLM ECFC under these
Master Terms, each Purchase Agreement and each ▇▇▇▇ of Sale; (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 SLM ECFC, 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 these
Master Terms relating to such transaction have been complied with, and that the
Rating Agency Condition shall have been satisfied with respect to such
transaction; and (iv) if SLM ECFC is not the surviving entity, SLM ECFC 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, respectively, in the Purchased
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 SLM ECFC AND OTHERS
SLM ECFC 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
16
shall not limit in any way SLM ECFC's obligations under Section 6). SLM ECFC
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 SLM ECFC will constitute the sole remedy available
to Funding for uncured breaches; provided, however, that the information with
respect to the Purchased Loans listed on the related ▇▇▇▇ of Sale may be
adjusted in the ordinary course of business subsequent to the date of the
related ▇▇▇▇ of Sale and to the extent that the aggregate Principal Balance of
the Purchased Loans listed on the related ▇▇▇▇ of Sale is less than the
aggregate Principal Balance stated on the related ▇▇▇▇ of Sale, SLM ECFC shall
remit such amount to the Interim Eligible Lender Trustee, for the benefit of and
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
Notwithstanding anything contained herein to the contrary, these Master
Terms and any Purchase Agreement have been signed by Chase Manhattan Bank USA,
National Association 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 USA, National Association in its individual capacity have any
liability for the representations, warranties, covenants, agreements or other
obligations of the Interim Eligible Lender Trustee or Funding, under these
Master Terms or any Purchase Agreements 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.
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 acquisition of the Purchased Loans
provided for in the related Purchase Agreement. All covenants, agreements,
representations and warranties made or furnished pursuant hereto by or on behalf
of SLM ECFC shall bind and inure to the benefit of any successors or assigns of
Funding and the Interim Eligible Lender Trustee on behalf of Funding and shall
survive with respect to each Purchased Loan. Each Purchase Agreement supersedes
all previous agreements and understandings between Funding and SLM ECFC 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 SLM ECFC
17
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 SLM
ECFC 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 SLM ECFC 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 SLM ECFC 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 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, any Purchase Agreement, any ▇▇▇▇ of Sale and any
document or instrument delivered in accordance herewith or therewith may be
amended by the parties thereto without the consent of the related Noteholders
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions in the related document or of modifying in any
manner the rights of such Noteholders; provided that such action will not, in
the opinion of counsel satisfactory to the related Indenture Trustee, materially
and adversely affect the interest of any such Noteholder.
These Master Terms, any Purchase Agreement and any document or instrument
delivered in accordance herewith or therewith may also be amended from time to
time by SLM ECFC, 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, for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions in the related document or of
modifying in any manner the rights of the Noteholders; 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
Purchased Loans or distributions that shall be required to be made for the
benefit of the Noteholders or (b) reduce the aforesaid percentage of the
Outstanding Amount of the Notes, the Noteholders of which are required to
consent to any such amendment, without the consent of all outstanding
Noteholders.
18
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 and each of the Rating
Agencies.
It shall not be necessary for the consent of Noteholders pursuant to this
Section 17 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 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
these Master Terms 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 these
Master Terms or otherwise.
SECTION 18. NONPETITION COVENANTS
Notwithstanding any prior termination of these Master Terms SLM ECFC 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 Funding.
SECTION 19. GOVERNING LAW
These Master Terms and any Purchase Agreement 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.
19
IN WITNESS WHEREOF, the parties hereto have caused these Master Terms to
be duly executed by their respective officers hereunto duly authorized, as of
the day and year first above written.
SLM EDUCATION CREDIT SLM FUNDING LLC
FINANCE CORPORATION (Purchaser)
(Seller)
By: /s/ ▇▇▇▇ ▇▇▇▇▇ By: /s/ J. ▇▇▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇ Name: J. ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Treasurer Title: Vice President
CHASE MANHATTAN BANK USA,
NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Interim Eligible Lender Trustee
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
20
ATTACHMENT A
PURCHASE AGREEMENT
Dated as of July 28, 2004
PURCHASE AGREEMENT NUMBER 1
Pursuant to the Master Terms (as defined below), SLM ECFC hereby
offers for sale to Chase Manhattan Bank USA, National Association as Interim
Eligible Lender Trustee for the benefit of SLM Funding LLC ("Funding") under the
Interim Trust Agreement dated as of July 1, 2004 between Funding and the Interim
Eligible Lender Trustee, the entire right, title and interest of SLM ECFC in the
Loans described in the related ▇▇▇▇ of Sale and related Loan Transmittal Summary
Form incorporated herein and, to the extent indicated below, the Interim
Eligible Lender Trustee for the benefit of Funding accepts SLM ECFC's offer. In
order to qualify as Eligible Loans, no payment of principal or interest shall be
more than two hundred and ten (210) days past due as of the Statistical Cutoff
Date, which shall be July 8, 2004.
TERMS, CONDITIONS AND COVENANTS
In consideration of the Purchase Price, SLM ECFC hereby sells to the
Interim Eligible Lender Trustee for the benefit of Funding the entire right,
title and interest of SLM ECFC in the Loans accepted for purchase, subject to
all the terms and conditions of the Purchase Agreement Master Securitization
Terms Number 1000 (the "Master Terms") and any amendments thereto, incorporated
herein by reference, among SLM ECFC, Funding, and the Interim Eligible Lender
Trustee. The Initial Payment for the Loans shall equal $1,466,283,072.57 (equal
to $1,506,696,335 (representing the sale price of the Notes less underwriters'
discounts and fees), less $3,750,150 (representing the Reserve Account Initial
Deposit), less $2,000,000 (representing the Capitalized Interest Account Initial
Deposit), less $20,000 (representing the Interest Rate Cap Agreement Upfront
Payment), and less $34,643,112.43 (representing the Collection 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, Eligible Loans or Purchased Loans, as applicable, shall be deemed to
refer to the Loans governed by this Purchase Agreement. SLM ECFC hereby makes
all the representations and warranties set forth in the Master Terms regarding
the Loans governed by this Purchase Agreement.
SLM ECFC authorizes the Interim Eligible Lender Trustee for the
benefit of Funding to use a copy of the related ▇▇▇▇ of Sale, including the Loan
Transmittal Summary Form attached to the ▇▇▇▇ of Sale (in lieu of OE Form 1074),
as official notification to the applicable Guarantor of assignment to the
Interim Eligible Lender Trustee on behalf of Funding of the Loans purchased
pursuant hereto on the Closing Date.
The parties hereto intend that the transfer of Purchased Loans
described in the related ▇▇▇▇ of Sale and related Loan Transmittal Summary Form
be, and be construed as, a valid sale of such Purchased Loans from SLM ECFC to
the Interim Eligible Lender Trustee for the benefit of
1
Funding. However, in the event that notwithstanding the intention of the
parties, such transfer is deemed to be a transfer for security, then SLM ECFC
hereby grants to the Interim Eligible Lender Trustee for the benefit of Funding
a first priority security interest in and to all Purchased Loans described in
the related ▇▇▇▇ of Sale and related Loan Transmittal Summary Form to secure a
loan in an amount equal to the Purchase Price of such Purchased Loans.
2
IN WITNESS WHEREOF, the parties hereto have caused this Purchase Agreement
Number 1 to be duly executed by their respective officers hereunto duly
authorized, as of the day and year first above written.
SLM EDUCATION CREDIT FINANCE CORPORATION
(Seller)
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Treasurer
SLM FUNDING LLC
(Purchaser)
By: /s/ J. ▇▇▇▇▇ ▇▇▇▇▇▇
Name: ▇. ▇▇▇▇▇. ▇▇▇▇▇▇
Title: Vice President
CHASE MANHATTAN BANK
USA, NATIONAL ASSOCIATION, not in its
individual capacity but solely as Interim
Eligible Lender Trustee
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
3
ATTACHMENT B
PURCHASE AGREEMENT NUMBER 1
BLANKET ENDORSEMENT DATED JULY ▇▇, ▇▇▇▇
▇▇▇ Education Credit Finance Corporation ("SLM ECFC"), by execution of
this instrument, hereby endorses the attached promissory note which is one (1)
of the promissory notes (the "Notes") described in the ▇▇▇▇ of Sale dated the
date hereof executed by SLM ECFC in favor of Chase Manhattan Bank USA, National
Association, as the Interim Eligible Lender Trustee for the benefit of SLM
Funding LLC ("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 SLM ECFC, Funding and the Interim Eligible
Lender Trustee which covers the 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, SLM ECFC 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 PURCHASED LOANS SHALL BE SUBJECT TO THE TERMS,
CONDITIONS AND COVENANTS, INCLUDING THIS BLANKET ENDORSEMENT, AS SET FORTH IN
THE PURCHASE AGREEMENT. BY EXECUTION HEREOF, SLM ECFC ACKNOWLEDGES THAT SLM ECFC
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 SLM ECFC OF THE INITIAL PAYMENT (AS DEFINED IN THE
MASTER TERMS) AND, UNLESS OTHERWISE AGREED BY SLM ECFC AND FUNDING, SHALL BE
EFFECTIVE AS OF THE DATE OF THE RELATED ▇▇▇▇ OF SALE.
1
IN WITNESS WHEREOF, the parties hereto have caused this Blanket
Endorsement to be duly executed by their respective officers hereunto duly
authorized, as of the day and year first above written.
SELLER PURCHASER
------ ---------
SLM Education Credit Finance Chase Manhattan Bank USA, National
Corporation Association, not in its individual
11600 ▇▇▇▇▇▇ ▇▇▇ Drive capacity but solely as Interim Eligible
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Lender Trustee for the benefit of SLM
Funding LLC
Lender Code:_________________
By: /s/ J. ▇▇▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
(Signature of Authorized Officer) (Signature of Authorized Signatory
for Purchaser)
Name: J. ▇▇▇▇▇ ▇▇▇▇▇▇ Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
Title: Vice President
Date of Purchase: July 28, 2004
2
ATTACHMENT C
▇▇▇▇ OF SALE DATED JULY 28, 2004
The undersigned ("SLM ECFC"), for value received and pursuant to the terms
and conditions of Purchase Agreement Number 1 (the "Purchase Agreement") among
SLM Funding LLC ("Funding"), and Chase Manhattan Bank USA, National Association,
as Interim Eligible Lender Trustee for the benefit of Funding under the Interim
Trust Agreement dated as of July 1, 2004 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 SLM ECFC, including the insurance interest of SLM ECFC
under the Federal Family Education Loan Program (20 U.S.C. 1071 et seq.), that
the Interim Eligible Lender Trustee for the benefit of Funding has accepted for
purchase. The portfolio of Loans 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.
SLM ECFC 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. SLM ECFC 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 related Loans on the Closing Date.
LISTING OF LOANS ON FOLLOWING PAGE
1
CERTAIN OTHER LOAN CRITERIA
- Not in claims status, not previously rejected
- Not in litigation
- Last disbursement was on or before the Statistical Cutoff Date
- Loan is not swap-pending
*Based upon SLM ECFC's estimated calculations, which may be adjusted upward or
downward based upon Funding's reconciliation.
** Includes interest to be capitalized.
2
GUARANTORS:
American Student Assistance
Arizona Educational Loan Program
California Student Aid Commission
Colorado Student Loan Program
Connecticut Student Loan Foundation
Educational Credit Management Corporation of Virginia
Finance Authority of Maine
Florida Bureau of Student Financial Assistance
Georgia Higher Education Assistance Corporation
Great Lakes Higher Education Corporation
Illinois Student Assistance Commission
Iowa College Student Aid Commission
Kansas United Student Aid Funds
Kentucky Higher Education Assistance Authority
Louisiana Office of Student Financial Assistance
Maryland Higher Education Loan Corporation
Michigan Guaranty Agency
Missouri Student Loan Program
Montana Guaranteed Student Loan Program
Nebraska Student Loan Program
New Jersey Office of Student Assistance
New York State Higher Education Services Corporation
Northwest Education Loan Association
Oklahoma Guaranteed Student Loan Program
Oregon State Scholarship Commission
Pennsylvania Higher Education Assistance Agency
Rhode Island Higher Education Assistance Authority
South Dakota Education Assistance Corporation
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
3
IN WITNESS WHEREOF, the parties hereto have caused this ▇▇▇▇ of Sale to be duly
executed by their respective officers hereunto duly authorized, as of the day
and year first above written.
SELLER PURCHASER
------ ---------
SLM Education Credit Finance Chase Manhattan Bank USA, National
Corporation Association, not in its individual
11600 ▇▇▇▇▇▇ ▇▇▇ Drive capacity but solely as Interim Eligible
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Lender Trustee for the benefit of SLM
Funding LLC
Lender Code:___________________
By: /s/ J. ▇▇▇▇▇ ▇▇▇▇▇▇ By: ▇▇▇▇ ▇. ▇▇▇▇▇▇
(Signature of Authorized Officer) (Signature of Authorized Signatory
for Purchaser)
Name: J. ▇▇▇▇▇ ▇▇▇▇▇▇ Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President Title: Vice President
Date of Purchase: July 28, 2004
4