INDENTURE
between
CRESTAR STUDENT LOAN TRUST 1997-1,
as Issuer
and
BANKERS TRUST COMPANY
not in its individual capacity, but
solely as Indenture Trustee
Dated as of December 1, 1997
CROSS-REFERENCE TABLE(1)
TIA Indenture
Section Section
310 (a)(1) ............................................................. 6.11
(a)(2) ............................................................. 6.12
(a)(3) ............................................................. 6.10
(a)(4) ............................................................. N.A.(2)
(a)(5) ............................................................. 6.11
(b) ............................................................. 6.8;
6.10; 6.11
(c) ............................................................. N.A.
311 (a) ............................................................. 6.13
(b) ............................................................. 6.13
(c) ............................................................. N.A.
312 (a) ............................................................. 7.1; 7.2(a)
(b) ............................................................. 7.2(b)
(c) ............................................................. 7.2(c)
313 (a) ............................................................. 6.6
(b) ............................................................. 6.6
(c) ............................................................. 11.5
(d) ............................................................. 6.6
314 (a) ............................................................. 3.9; 7.3
(b) ............................................................. 3.6
(c) ............................................................. 2.9; 4.1;
11.1
(d) ............................................................. 2.9; 11.1
(e) ............................................................. 11.1
(f) ............................................................. 3.9
315 (a) ............................................................. 6.1
(b) ............................................................. 6.5
(c) ............................................................. 6.1
(d) ............................................................. 6.1
(e) ............................................................. 5.13
316 (a)(1)(A) ............................................................. 5.11
(a)(1)(B) ............................................................. 5.12
(a)(2) ............................................................. N.A.
(b) ............................................................. 5.7
(c) ............................................................. 1.1
317 (a) ............................................................. 5.3
(b) ............................................................. 3.3
318 (a) ............................................................. 11.7
--------
1 Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
part of the Indenture.
2 N.A. means Not Applicable.
TABLE OF CONTENTS
ARTICLE I DEFINITIONS AND USAGE...................................................................................1
Section 1.1. Definitions and Usage......................................................................1
Section 1.2. Incorporation by Reference of Trust Indenture Act..........................................1
ARTICLE II THE NOTES..............................................................................................2
Section 2.1. Form.......................................................................................2
Section 2.2. Execution, Authentication and Delivery.....................................................2
Section 2.3. Notes Issuable in Classes; General Provisions with Respect to Principal and
Interest Payments..........................................................................3
Section 2.4. Denominations..............................................................................4
Section 2.5. Temporary Notes............................................................................4
Section 2.6. Registration; Registration of Transfer and Exchange........................................4
Section 2.7. Mutilated, Destroyed, Lost or Stolen Notes.................................................5
Section 2.8. Persons Deemed Owner.......................................................................6
Section 2.9. Payments of Principal and Interest.........................................................6
Section 2.10. Cancellation...............................................................................8
Section 2.11. Authentication and Delivery of Notes.......................................................8
Section 2.12. Release of Collateral.....................................................................11
Section 2.13. Restrictions on Transfer..................................................................11
Section 2.14. Book-Entry Notes..........................................................................11
Section 2.15. Notices to Clearing Agency................................................................12
Section 2.16. Definitive Notes..........................................................................12
ARTICLE III COVENANTS............................................................................................13
Section 3.1. Payment to Noteholders....................................................................13
Section 3.2. Maintenance of Office or Agency...........................................................13
Section 3.3. Money for Payments to be Held in Trust....................................................13
Section 3.4. Existence.................................................................................15
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 Financed Student Loans...........................16
Section 3.8. Negative Covenants........................................................................17
Section 3.9. Annual Statement as to Compliance.........................................................17
Section 3.10. Issuer May Consolidate, etc., Only on Certain Terms.......................................18
Section 3.11. Successor or Transferee...................................................................19
Section 3.12. No Other Business.........................................................................20
Section 3.13. No Borrowing..............................................................................20
Section 3.14. Obligations of Master Servicer and Administrator..........................................20
Section 3.15. Guarantees, Loans, Advances and Other Liabilities.........................................20
Section 3.16. Capital Expenditures......................................................................20
Section 3.17. Restricted Payments.......................................................................20
Section 3.18. Notice of Events of Default...............................................................21
Section 3.19. Further Instruments and Acts..............................................................21
ARTICLE IV SATISFACTION AND DISCHARGE............................................................................21
Section 4.1. Satisfaction and Discharge of Indenture...................................................21
Section 4.2. Application of Trust Money................................................................22
Section 4.3. Repayment of Moneys Held by Paying Agent..................................................22
ARTICLE V REMEDIES...............................................................................................23
Section 5.1. Events of Default.........................................................................23
Section 5.2. Acceleration of Maturity; Rescission and Annulment........................................24
Section 5.3. Collection of Indebtedness and Suits for Enforcement by Indenture Trustee.................24
Section 5.4. Remedies; Priorities......................................................................26
Section 5.5. Optional Preservation of the Financed Student Loans.......................................28
Section 5.6. Limitation of Suits.......................................................................29
Section 5.7. Unconditional Rights of Noteholders to Receive Principal and Interest.....................29
Section 5.8. Restoration of Rights and Remedies........................................................30
Section 5.9. Rights and Remedies Cumulative............................................................30
Section 5.10. Delay or Omission Not a Waiver............................................................30
Section 5.11. Control by Noteholders....................................................................30
Section 5.12. Waiver of Past Defaults...................................................................31
Section 5.13. Undertaking for Costs.....................................................................31
Section 5.14. Waiver of Stay or Extension Laws..........................................................31
Section 5.15. Action on Notes...........................................................................32
Section 5.16. Performance and Enforcement of Certain Obligations........................................32
ARTICLE VI THE INDENTURE TRUSTEE.................................................................................33
Section 6.1. Duties of Indenture Trustee...............................................................33
Section 6.2. Rights of Indenture Trustee...............................................................34
Section 6.3. Individual Rights of Indenture Trustee....................................................35
Section 6.4. Indenture Trustee's Disclaimer............................................................35
Section 6.5. Notice of Defaults........................................................................35
Section 6.6. Reports by Indenture Trustee to Noteholders...............................................35
Section 6.7. Compensation and Indemnity................................................................36
Section 6.8. Replacement of Indenture Trustee..........................................................36
Section 6.9. Successor Indenture Trustee by Merger.....................................................37
Section 6.10. Appointment of Co-Trustee or Separate Trustee.............................................38
Section 6.11. Appointment of Custodian..................................................................39
Section 6.12. Eligibility; Disqualification.............................................................39
Section 6.13. Preferential Collection of Claims Against Issuer..........................................39
ARTICLE VII NOTEHOLDERS' LISTS AND REPORTS.......................................................................40
Section 7.1. Issuer to Furnish Indenture Trustee Names and Addresses of Noteholders....................40
Section 7.2. Preservation of Information; Communications to Noteholders................................40
Section 7.3. Fiscal Year of Issuer.....................................................................40
ARTICLE VIII ACCOUNTS, DISBURSEMENTS AND RELEASES................................................................41
Section 8.1. Collection of Money.......................................................................41
Section 8.2. Trust Accounts............................................................................41
Section 8.3. General Provisions Regarding Accounts.....................................................41
ARTICLE IX SUPPLEMENTAL INDENTURES...............................................................................42
Section 9.1. Supplemental Indentures Without Consent of Noteholders....................................42
Section 9.2. Supplemental Indentures with Consent of Noteholders.......................................44
Section 9.3. Execution of Supplemental Indentures......................................................45
Section 9.4. Effect of Supplemental Indenture..........................................................45
Section 9.5. Conformity with Trust Indenture Act.......................................................46
Section 9.6. Reference in Notes to Supplemental Indentures.............................................46
ARTICLE X RESERVED...............................................................................................46
ARTICLE XI MISCELLANEOUS.........................................................................................46
Section 11.1. Compliance Certificates and Opinions, etc................................................46
Section 11.2. Form of Documents Delivered to Indenture Trustee.........................................48
Section 11.3. Acts of Noteholders......................................................................48
Section 11.4. Notices, etc., to Indenture Trustee, Issuer and Rating Agencies..........................49
Section 11.5. Notices to Noteholders; Waiver...........................................................50
Section 11.6. Alternate Payment and Notice Provisions..................................................50
Section 11.7. Conflict with Trust Indenture Act........................................................51
Section 11.8. Effect of Headings and Table of Contents.................................................51
Section 11.9. Successors and Assigns...................................................................51
Section 11.10. Separability.............................................................................51
Section 11.11. Benefits of Indenture....................................................................51
Section 11.12. Legal Holidays...........................................................................51
Section 11.13. Governing Law............................................................................52
Section 11.14. Counterparts.............................................................................52
Section 11.15. Recording of Indenture...................................................................52
Section 11.16. Trust Obligations........................................................................52
Section 11.17. No Petition..............................................................................53
Section 11.18. Inspection...............................................................................53
Section 11.19. Usury....................................................................................54
Appendix A Definitions
INDENTURE dated as of December 1, 1997, between CRESTAR STUDENT LOAN
TRUST 1997-1, a Delaware business trust (the "Issuer"), BANKERS TRUST COMPANY,
as trustee and not in its individual capacity (the "Indenture Trustee").
PRELIMINARY STATEMENT
The Issuer has duly authorized the execution and delivery of this
Indenture to provide for the issuance of a series of its notes (the "Notes") as
provided herein. The Notes will be issued only under a separate supplement to
this Indenture duly executed and delivered by the Issuer and the Indenture
Trustee and limited to the amount therein described. All covenants and
agreements made by the Issuer herein are for the benefit and security of the
holders of the Notes. The Issuer is entering into this Indenture and the
Indenture Trustee is accepting the trusts created hereby, for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged.
All things necessary to make this Indenture a valid agreement of the
Issuer in accordance with its terms have been done.
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 defined herein are defined in Appendix A
to the Transfer and Servicing Agreement, a copy of which is attached hereto (as
supplemented to the extent indicated therein, by the provisions of the Terms
Supplement). Appendix A 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 Trust Indenture
Act ("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 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.
ARTICLE II
THE NOTES
Section 2.1. Form.
The Notes and the Indenture Trustee's certificate of authentication
shall be in substantially the form set forth in an Exhibit to the Terms
Supplement, with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture or any Terms
Supplement and may have such letters, numbers or other marks of identification
and such legends or endorsements placed thereon as may, consistently herewith,
be determined by the officers executing such Notes, as evidenced by their
execution of the Notes. Any portion of the text of any Note may be set forth on
the reverse thereof, with an appropriate reference thereto on the face of the
Note.
The Definitive Notes shall be typewritten, printed, lithographed or
engraved or produced by any combination of these methods (with or without steel
engraved borders), all as determined by the officers executing such Notes, as
evidenced by their execution of such Notes.
Each Note shall be dated the date of its authentication. The terms of
the Notes 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.
At any time and from time to time after the execution and delivery of
this Indenture, the Issuer may deliver Notes executed by the Issuer to the
Indenture Trustee for authentication; and the Indenture Trustee shall
authenticate and deliver such Notes as provided in this Indenture and not
otherwise.
Each Note shall be dated as of the date specified in the related Terms
Supplement.
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. Notes Issuable in Classes; General Provisions with
Respect to Principal and Interest Payments.
The Notes may, as provided herein, be issued in one or more Classes of
Notes, and shall be designated generally as the "Crestar Student Loan Trust
1997-1 Student Loan Asset Backed Notes" of the Issuer, with such further
particular designations added or incorporated in such title for the Notes of any
particular Class as the Issuer may determine.
The principal of each Note shall be payable on the related Final
Maturity Date unless the unpaid principal of such Note becomes due and payable
at an earlier date by declaration of acceleration or otherwise.
Payments of principal of a Class of Notes shall be made pro rata among
all Outstanding Notes of such Class, without preference or priority of any kind.
Unless otherwise provided in the Terms Supplement, all payments made
with respect to any Note shall be applied first to the interest then due and
payable on such Note and then to the principal thereof. Computations of interest
accrued on any Note shall be made as provided in the Terms Supplement.
Interest on the unpaid principal amount of each Outstanding Note of a
Class shall be payable on each Distribution Date for such Class at the Class
Interest Rates applicable to such Note for the related Interest Periods.
Notwithstanding any of the foregoing provisions with respect to
payments of principal of and interest on the Notes, if the Notes have become or
been declared due and payable following an Event of Default and such
acceleration of maturity and its consequences have not been rescinded and
annulled and the provisions of Section 5.5 are not applicable to such Notes,
then payments of principal of and interest on such Notes shall be made in
accordance with Section 5.4.
Each Note shall bear upon the face thereof the designation so selected
for the Class to which it belongs. All Notes of the same Class shall be
identical in all respects except for the denominations and dates thereof. All
Notes of all Classes at any time Outstanding shall be identical except for
differences among the Notes of the different Classes as specified in the
applicable Terms Supplement.
The Notes shall be created by a Terms Supplement authorized by the
Trust Agreement and establishing the terms and provisions thereof, specifying
the Financed Student Loans and any other property to be included in the
Indenture Trust Estate therefor and Granting such Indenture Trust Estate as
security for the Notes created thereby.
Section 2.4. Denominations.
The Notes shall be issuable only as registered Notes in the
denominations prescribed by the terms of the Terms Supplement creating them.
Section 2.5. 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,
photocopied, 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 as the officers executing such Notes may
determine, as evidenced by their execution of such 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 the same Class and 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 of the same Class.
Section 2.6. 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 the "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 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 will 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 Registrar, 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 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, 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, of the same class and a like aggregate principal amount.
At the option of the Noteholder, Notes may be exchanged for other Notes
of any authorized denominations, of the same Class 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.
Restrictions on transfer, if any, of a Class of Notes shall be set
forth herein and in the related Terms Supplement.
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 includes membership
or participation in the 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.
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.
Section 2.7. 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 Indenture Trustee
such security or indemnity as may be required by it 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, 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 of the same tenor,
aggregate initial principal amount and Class bearing a number not
contemporaneously outstanding; 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, instead of issuing a replacement Note, the Issuer
may pay such destroyed, lost or stolen Note when so due or payable. 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
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 in
accordance with the provisions of this Indenture and the applicable Terms
Supplement.
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 2.8. 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 2.9. Payments of Principal and Interest.
(a) Any installment of interest or principal payable on any Notes
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 at the close of business on the Record
Date for such Distribution Date by either (i) check mailed to such Person's
address as it appears in the Note Register on such Record Date, or (ii) wire
transfer in immediately available funds to the account of such Noteholders at a
bank or other entity having appropriate facilities therefore, if such Noteholder
shall have provided the Note Registrar appropriate written instructions (which
may be standing instructions) at least five business days prior to such
Distribution Date; provided, however, the final installment of principal payable
with respect to such Note shall be payable as provided in subsection (b) of this
Section 2.9.
(b) All reductions in the principal amount of a Note (or one or more
Predecessor Notes) effected by payments of installments of principal made on any
Distribution Date shall be binding upon all Holders of such Note and of any Note
issued upon the registration of transfer thereof or in exchange therefor or in
lieu thereof, whether or not such payment is noted in such Note. The final
installment of principal of each Note shall be payable only upon presentation
and surrender thereof on or after the Distribution Date therefor to the
Indenture Trustee.
(c) The principal of each Class of Notes shall be payable in
installments on each Distribution Date as provided in the applicable Terms
Supplement. Notwithstanding the foregoing, the entire unpaid principal amount of
each Class of Notes shall be due and payable, if not previously paid, on the
date on which an Event of Default shall have occurred and be continuing, if
either the Indenture Trustee or the Noteholders of the Directing Notes
representing not less than a majority of the Outstanding Amount of Directing
Notes have declared the Notes to be immediately due and payable in the manner
provided in Section 5.2. All principal payments on each Class of Notes shall be
made to the Noteholders of such Class entitled thereto as provided in the
applicable Terms Supplement. The Indenture Trustee shall notify the Person in
whose name a Note is registered at the close of business on the Record Date
preceding the Distribution Date on which the Issuer expects that the final
installment of principal of and interest on such Note will be paid. Such notice
shall be mailed or transmitted by facsimile prior to such final Distribution
Date and shall specify that such final installment will be payable only upon
presentation and surrender of such Note and shall specify the place where such
Note may be presented and surrendered for payment of such installment.
(d) If the Issuer defaults in a payment of interest on any Class of
Notes, the Issuer shall pay defaulted interest (plus interest on such defaulted
interest to the extent lawful) at the applicable Class Interest Rate in any
lawful manner. The Issuer may pay such defaulted interest to the persons who are
Noteholders of such Class on a subsequent special record date, which date shall
be at least five Business Days prior to the payment date. The Issuer shall fix
or cause to be fixed any such special record date and payment date, and, at
least 15 days before any such special record date, the Issuer shall mail to each
Noteholder of such Class a notice that states the special record date and the
amount of defaulted interest to be paid.
(e) Subject to the foregoing provisions of this Section, each Note
delivered under this Indenture, upon registration of transfer of or in exchange
for or in lieu of any other Note, shall carry the rights to unpaid principal and
interest that were carried by such other Note. Any checks mailed pursuant to
this Section 2.9 and returned undelivered shall be held in accordance with
Section 3.3.
(f) Unless otherwise provided in the relevant Terms Supplement, not
later than each Distribution Determination Date relating to each Distribution
Date, the Administrator shall prepare and deliver to the Issuer, the Eligible
Lender Trustee and the Indenture Trustee a statement (a "Distribution Date
Statement") with respect to such Distribution Date setting forth:
(i) the amount of the distribution allocable to interest on
each Class of Notes, together with the interest rates applicable with respect
thereto;
(ii) the amount of the distribution allocable to principal of
each Class of Notes;
(iii) the Pool Balance as of the close of business on
the last day of the preceding Collection Period;
(iv) the aggregate outstanding principal balance of
each Class of Notes of such Distribution Date, after giving effect to
payments allocated to principal reported under clause (ii) above;
(v) the amount of the Servicing Fee allocated to the
Master Servicer, the amount of the Administration Fee allocated to the
Administrator, the amount of the Indenture Trustee Fee allocated to the
Indenture Trustee, the amount of the Eligible Lender Trustee Fee
allocated to the Eligible Lender Trustee, and the amount of the Delaware
Trustee Fee allocated to the Delaware Trustee respectively, if any; and
(vi) the amount of the aggregate Realized Losses, if
any, for such Collection Period.
Section 2.10 Cancellation.
All Notes surrendered for payment, registration of transfer or exchange
shall, if surrendered to any Person other than the Indenture Trustee, be
delivered to the Indenture Trustee and shall be promptly canceled 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 canceled by the Indenture Trustee. No Notes shall be
authenticated in lieu of or in exchange for any Notes canceled 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 2.11 Authentication and Delivery of Notes.
Notes may from time to time be executed by the Issuer and delivered to
the Indenture Trustee for authentication, and thereupon the same shall be
authenticated and delivered by the Indenture Trustee, upon Issuer Request and
upon receipt by the Indenture Trustee of the following:
(a) an Issuer Order authorizing the execution, authentication and
delivery of such Notes by the Issuer and specifying the Classes, the Final
Maturity Date of each Class, the principal amount and the Class Interest Rate
and the method of determining such Class Interest Rate, of each Class of such
Notes to be authenticated and delivered;
(b) [Reserved].
(c) Opinions of Counsel addressed to the Indenture Trustee
substantially to the effect that:
(i) the Eligible Lender Trustee is an "eligible
lender" under the terms of the Higher Education Act and HEAL Act, has corporate
power to execute and deliver the Trust Agreement, the Trust Agreement authorizes
the Issuer to execute and deliver the Indenture and Terms Supplement relating to
such Notes and to issue such Notes, and the Issuer has duly taken all necessary
action under the Trust Agreement for those purposes;
(ii) the Issuer is a Delaware business trust;
(iii) assuming due execution and delivery thereof by
the Indenture Trustee, this Indenture and the related Terms Supplement, as
executed and delivered by the Issuer, are the valid, legal and binding
obligations of the Issuer, enforceable in accordance with their terms, subject
to the effect of bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance and other similar laws relating to or affecting creditors' rights
generally and court decisions with respect thereto, and such counsel need
express no opinion with respect to the availability of equitable remedies, and
the execution of such Terms Supplement is authorized or permitted by Section 9.1
of this Indenture;
(iv) the Notes then applied for, when issued,
delivered, authenticated and paid for, will be the valid, legal and binding
obligations of the Issuer, entitled to the benefits of this Indenture and the
related Terms Supplement, subject to the effect of bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance and other similar laws
relating to or affecting creditors' rights generally and court decisions with
respect thereto, and such counsel need express no opinion with respect to the
availability of equitable remedies;
(v) the Issuer has Granted to the Indenture Trustee
a lien and first perfected security interest in all of its right, title and
interest in each such Financed Student Loan (with priority being based solely on
UCC searches conducted, as specified in the opinion and only as to priority over
other security interests perfected by UCC filings);
(vi) Reserved;
(vii) the Terms Supplement delivered to the Indenture
Trustee with such Opinion of Counsel subjects the Financed Student Loans
securing such Notes and all proceeds therefrom and the Pledged Accounts or Funds
for such Notes to the lien and security interest of this Indenture;
(viii) such action has been taken with respect
to delivery of possession of the Indenture Trust Estate and with respect
to the recording and filing of this Indenture, the Terms Supplement for
such Notes, any other indentures supplemental hereto and any other
requisite documents and with respect to the execution and filing of any
financing statements as is necessary to perfect a first priority
security interest in the Indenture Trust Estate for such Notes, with
either the details of such action being recited therein, or the absence
of any such action being necessary to make such lien and security
interest effective being stated therein; and, with any recording,
filing, re-recording and re-filing of this Indenture, the Terms
Supplement for such Notes, any other indentures supplemental hereto and
any other requisite documents and any execution and filing of any
financing statements and continuation statements that will, in the
opinion of such counsel, be required to maintain the lien and security
interest created by this Indenture and the related Terms Supplements in
the Indenture Trust Estate for such Notes until April 30 of the year in
which the first Opinion of Counsel with respect to such Notes is
required to be delivered under Section 3.6 being described therein;
(ix) this Indenture and the Terms Supplement
for such Notes have been duly qualified under the TIA, or that no
qualification of this Indenture or the related Terms Supplement under
the TIA is necessary; the execution of the Terms Supplement for such
Notes requires the requalification of this Indenture under the TIA, or
that no requalification of the Indenture under the TIA is necessary by
virtue of the execution of such Terms Supplement; and
(x) no authorization, approval or consent of any
governmental body having jurisdiction over the Issuer which has not been
obtained by the Issuer is required for the valid issuance and delivery
of the Notes, except such as may be required by the blue sky laws of any
jurisdiction in connection with the sale and distribution of the Notes
for which no opinion need be given.
(d) an Officer's Certificate of the Administrator on
behalf of the Issuer stating substantially to the effect that:
(i) all instruments furnished to the Indenture
Trustee in connection with such Notes conform to the requirements of
this Indenture and constitute all the documents required to be delivered
hereunder for the Indenture Trustee to authenticate and deliver the
Notes then applied for;
(ii) all conditions precedent provided for in this
Indenture relating to the authentication and delivery of the Notes
applied for have been complied with;
(iii) the Issuer is not in Default under this
Indenture and the issuance of the Notes applied for will not result in
any breach of any of the terms, conditions or provisions of, or
constitute a default under, the Trust Agreement, any indenture,
mortgage, deed of trust or other agreement or instrument to which the
Issuer is a party or by which it is bound, or any order of any court or
administrative agency entered in any proceeding to which the Issuer is a
party or by which it may be bound or to which it may be subject; and
(iv) the Issuer is the beneficial owner of each
Financed Student Loan securing such Notes, has not assigned any interest
or participation in any such Financed Student Loan (or, if any such
interest or participation has been assigned, it has been released) and
has the right to Grant each such Financed Student Loan to the Indenture
Trustee.
(e) Unless any of the requirements set forth herein shall be
deleted by the related Terms Supplement, an Officer's Certificate of the
Administrator on behalf of the Issuer stating that all of the Financed
Student Loans and any other assets securing such Notes:
(i) satisfy each of the requirements established
for such Financed Student Loans in the related Terms Supplement; and
(ii) have been endorsed as provided in the Transfer
and Servicing Agreement;
(f) Cash in the amount, if any, required by the terms of the
related Terms Supplement to be deposited in the Collection Account and
held by the Indenture Trustee and applied in accordance with the terms
hereof or as otherwise provided in the related Terms Supplement;
(g) Cash, Eligible Investments or (if permitted by the
related Terms Supplement) a Qualified Letter of Credit or any other
assets specified in or permitted by the related Terms Supplement in the
respective amounts, if any, required by the terms of the related Terms
Supplement to be maintained in the Reserve Account and held by the
Indenture Trustee;
(h) An executed counterpart of the Terms Supplement; and
(i) Such other documents, certificates, instruments or
opinions as may be reasonably required by the terms of the Terms
Supplement creating such Notes.
Section 2.12 Release of Collateral.
Except as otherwise permitted by Section 11.1 and the terms of
the Basic Documents, the Indenture Trustee shall release property from
the lien of this Indenture and the related Terms Supplement only upon
(i) prior confirmation by the Rating Agencies that such release will not
cause a reduction or withdrawal of the then current ratings of each
Class of Notes and (ii) receipt of an Issuer Request accompanied by an
Officer's Certificate of the Issuer, an Opinion of Counsel and
Independent Certificates in accordance with TIA ▇▇.▇▇. 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 2.13 Restrictions on Transfer.
[Reserved.]
Section 2.14 Book-Entry Notes.
Unless otherwise provided in the related Terms Supplement, 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 will receive
a Definitive Note (as defined below) representing such Note Owner's interest in
such Note, except as provided in Section 2.16. Unless and until definitive,
fully registered Notes (the "Definitive Notes") have been issued to Note Owners
pursuant to Section 2.16:
(i) the provisions of this Section shall be in full force
and effect;
(ii) the Indenture Trustee 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;
(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 Agreements. Unless and until
Definitive Notes are issued pursuant to Section 2.16, 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 2.15 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 2.16, the Indenture Trustee shall give all
such notices and communications specified herein to be given to Noteholders to
the Clearing Agency.
Section 2.16 Definitive Notes.
Unless the Terms Supplement provides otherwise, and if (i) the
Administrator advises the Indenture Trustee in writing that the Clearing Agency
is no longer willing or able to properly discharge its responsibilities with
respect to the Notes, and the Administrator is unable to locate a qualified
successor, or (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
Directing 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 will cause the Clearing Agency to notify all
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 will pay or cause to be duly and punctually paid, from the
property of the Issuer, the principal of and interest on the Notes in accordance
with the terms of such Notes, this Indenture and the related Terms Supplement
and Transfer and Servicing 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 will maintain in the Borough of Manhattan, the City of New
York, the State 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 will 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 appoints the Indenture Trustee as
its agent to receive all such surrenders, notices and demands.
The Issuer may also from time to time designate one or more other
offices or agencies (in or outside the City of New York) where the Notes may be
presented or surrendered for any or all such purposes and may from time to time
rescind such designations; provided, however, that (i) no such designation or
rescission shall in any manner relieve the Issuer of its obligation to maintain
an office or agency in the Borough of Manhattan, the City of New York, the State
of New York for the purposes set forth in the preceding paragraph, (ii)
presentations or surrenders of Notes for payment may be made only in the City of
New York, the State of New York and (iii) any designation of an office or agency
for payment of Notes shall be subject to Section 3.3. The Issuer will give
prompt written notice to the Indenture Trustee of any such designation or
rescission and of any change in the location of any such other office or agency.
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.
The Issuer will cause each Paying Agent other than the Indenture
Trustee to execute and deliver to the Indenture Trustee an instrument in which
such Paying Agent shall agree with the Indenture Trustee (and if the Indenture
Trustee acts as Paying Agent, it hereby so agrees), subject to the provisions of
this Section, that such Paying Agent will:
(i) hold all sums held by it for the payment of amounts due
with respect to the Notes in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise disposed of
as herein provided and pay such sums to such Persons as herein provided;
(ii) give the Indenture Trustee notice of any default by the
Issuer of which it has actual knowledge (or any other obligor upon the Notes) in
the making of any payment required to be made with respect to the Notes;
(iii) at any time during the continuance of any such default,
upon the written request of the Indenture Trustee, forthwith pay to the
Indenture Trustee all sums so held in trust by such Paying Agent;
(iv) immediately resign as a Paying Agent and forthwith pay
to the Indenture Trustee all sums held by it in trust for the payment of Notes
if at any time 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; 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 right to or interest in moneys 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 will keep in full effect its existence and rights as a 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 will keep in full
effect its existence and rights under the laws of such other jurisdiction) and
will obtain and preserve its qualification to do business in each jurisdiction
in which such qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes, the Financed Student Loans 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, instruments of further assurance and other instruments,
and will take such other action necessary or advisable to:
(i) maintain or preserve the lien and security interests
(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 or any Terms Supplement;
(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.
On or before April 30 in each calendar year, beginning with the first
calendar year commencing more than three months after the Closing Date, the
Administrator, on behalf of 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
re-filing of this Indenture, any indentures supplemental hereto and any other
requisite documents and with respect to the execution and filing of any
financing statements and continuation on statements as is necessary to maintain
the lien and security interest created by this Indenture and reciting the
details of such action or stating that in the opinion of such counsel no such
action is necessary to maintain such lien and security interest. Such Opinion of
Counsel shall also describe the recording, filing, re-recording and re-filing of
this Indenture, any indentures supplemental hereto and any other requisite
documents and the execution and filing of any financing statements and
continuation statements that will, in the opinion of such counsel, be required
to maintain the lien and security interest of this Indenture until April 30 in
the following calendar year.
Section 3.7. Performance of Obligations; Servicing of Financed
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, the related Terms
Supplement or Transfer and Servicing Agreement 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 Officer's Certificate of
the Issuer shall be deemed to be action taken by the Issuer. Initially, the
Issuer has contracted with the Master Servicer and the Administrator to assist
the Issuer in performing its duties under this Indenture.
(c) The Issuer will punctually perform and observe in all material
respects all its obligations and agreements contained in this Indenture, the
other Basic Documents and in the instruments and agreements included in the
Indenture Trust Estate, including filing or causing to be filed all UCC
financing statements and continuation statements required to be filed by the
terms of this Indenture and the related Terms Supplement and Transfer and
Servicing 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.
(d) Without derogating from the absolute nature of the assignment
Granted to the Indenture Trustee under any Terms Supplement or the rights of the
Indenture Trustee hereunder, the Issuer agrees that it will not, without the
prior written consent of the Noteholders of at least a majority in Outstanding
Amount of the Directing Notes, amend, modify, waive, supplement, terminate or
surrender, or agree to any amendment, modification, supplement, termination,
waiver or surrender of, the terms of (i) any portion of the Trust Estate, or, as
applicable, (ii) the Basic Documents, except to the extent otherwise provided in
the related Transfer and Servicing Agreement, or waive timely performance or
observance by the Master Servicer, the Administrator, the Issuer or the Eligible
Lender Trustee under the related Transfer and Servicing Agreement; 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 affected
thereby. If any such amendment, modification, supplement or waiver should be so
consented to by the Indenture Trustee or such Noteholders, the Issuer 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 Documents, sell, transfer, exchange or otherwise dispose of any of
the properties 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 of or interest on any 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) except as contemplated by the Basic Documents, dissolve
or liquidate in whole or in part; or
(iv) (A) permit the validity or effectiveness of this
Indenture or any Terms Supplement to be impaired, or permit the lien of this
Indenture and any Terms Supplement 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
and any Terms Supplement) 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, in each case arising solely as a result of an action or
omission of the related Obligor, and other than as expressly permitted by the
Basic Documents) or (C) permit the lien of this Indenture and any Terms
Supplement 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.
Section 3.9. Annual Statement as to Compliance.
The Administrator, on behalf of the Issuer, will deliver to the
Indenture Trustee, on or before April 30 following the first fiscal year of the
Issuer that ends more than three months after the Closing Date, and on or before
April 30 of each fiscal year thereafter, an Officer's Certificate of the Issuer
stating that:
(i) a review of the activities of the Issuer during such
year and of performance under this Indenture has been made under such Authorized
Officers' supervision; and
(ii) to the best of such Authorized Officers' knowledge,
based on such review, the Issuer has complied, in all material respects, with
all conditions and covenants under this Indenture throughout such year, or, if
there has been a default in the compliance in any material respect 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 reasonably satisfactory to the Indenture Trustee, the
due and punctual payment of the principal of and interest on all Notes and the
performance or observance of every agreement and covenant of this Indenture and
any Terms Supplement on the part of the Issuer to be performed or observed, all
as provided herein or therein;
(ii) immediately after giving effect to such transaction,
no Default shall have occurred and be continuing;
(iii) 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 Ohio or
Delaware State income tax consequence to the Issuer, any Noteholder or any
Certificateholder;
(iv) any action as is necessary to maintain the lien and
security interest created by this Indenture shall have been taken; and
(v) the Issuer shall have delivered to the Indenture Trustee
an Officer's 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) in all material respects.
(b) Except as otherwise permitted by the Basic Documents, the Issuer
shall not consolidate with or merge into any entity or 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 the entity formed by or serving such
consolidation or merger or 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 assumes, 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 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 agrees 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 agrees 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 agrees 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 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, Ohio or
Delaware State income tax consequence to the Issuer, any Noteholder or any
Certificateholder;
(iv) any action as is necessary to maintain the lien and
security interest created by this Indenture shall have been taken; and
(v) the Issuer shall have delivered to the Indenture Trustee
an Officer's 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 and any
Terms Supplement 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), Crestar Student Loan Trust 1997-1
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 Crestar Student Loan Trust 1997-1 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, servicing and managing Financed Student Loans 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
and such other obligations as are authorized under the Basic Documents.
Section 3.14 Obligations of Master Servicer and Administrator.
The Issuer shall cause the Master Servicer and the Administrator to
comply with the applicable provisions of the Transfer and Servicing Agreement.
Section 3.15 Guarantees, Loans, Advances and Other Liabilities.
Except as contemplated by the Transfer and Servicing Agreement, this
Indenture or any Terms Supplement, 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
Master Servicer, the Depositor, the Eligible Lender Trustee, the Indenture
Trustee, the Certificateholders, the Noteholders, and the Administrator as
contemplated by, and to the extent funds are available for such purpose under
the Transfer and Servicing Agreement and the other Basic Documents.
Section 3.18 Notice of Events of Default.
The Issuer shall give the Indenture Trustee written notice of each
Event of Default hereunder and each Default on the part of the Transferor of its
obligations under the Transfer and Servicing Agreement, the Master Servicer of
its obligations under the Transfer and Servicing Agreement or the Administrator
of its obligations under the Transfer and Servicing Agreement or the
Administration Agreement. In addition, the Issuer shall deliver to the Indenture
Trustee, within five days after the foregoing notice of Default, written notice
in the form of an Officer's 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
Indenture Trust Estate 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, 3.13 and 3.15 of this
Agreement, (v) the rights, obligations and immunities of the Indenture Trustee
hereunder (including 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
(i) all Notes theretofore authenticated and delivered (other
than (A) Notes that have been destroyed, lost or stolen and that have been
replaced or paid as provided in Section 2.7 and (B) 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
(ii) all Notes not theretofore delivered to the Indenture
Trustee for cancellation
(A) have become due and payable, or
(B) will become due and payable within one year,
and the Issuer, in the case of (A) or (B) 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 on the applicable Final Maturity Date;
(b) the Issuer has paid or caused to be paid all other sums payable
hereunder by the Issuer with respect to such Notes; and
(c) in the case of (a)(ii) above, the Issuer has delivered to the
Indenture Trustee an Officer's 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
requirement of Section 11.l(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 with respect to such Notes 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 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
other funds except to the extent required herein or in the Transfer and
Servicing 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 any 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.
ARTICLE V
REMEDIES
Section 5.1. Events of Default.
"Event of Default," wherever used herein, means, with respect to all
Outstanding Notes issued hereunder, 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 Noteholders' Interest
Distribution Amount when the same becomes due and payable, and such Default
shall continue for a period of five Business Days; or
(ii) Default in the payment of the principal of any Note when
the same becomes due and payable, and such Default shall continue for a period
of five Business Days; or
(iii) Default in the observance or performance of any covenant
or agreement in any material respect of the Issuer made in this Indenture, or
the Transfer and Servicing Agreement (other than a covenant or agreement, a
Default in the observance or performance of which is specifically dealt with
elsewhere in this Section), or any representation or warranty of the Issuer made
in this Indenture or in any certificate or other writing delivered pursuant
hereto or in connection herewith proving to have been incorrect in any material
respect as of the time when the same shall have been made, and such Default
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 Outstanding Directing Notes, a
written notice specifying such 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 with respect to
any Notes, then and in every such case the Indenture Trustee or Noteholders of
Directing Notes representing no less than a majority of the Outstanding Amount
of the Outstanding Directing Notes may declare all the Outstanding 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 all the Outstanding Notes, together with accrued and
unpaid interest thereon through the date of acceleration, shall become
immediately due and payable.
At any time after such a declaration of acceleration of maturity of the
Outstanding Notes has been made and before a judgment or decree for payment of
the money due has been obtained by the Indenture Trustee as hereinafter provided
in this Article V, the Noteholders of Directing Notes representing a majority of
the Outstanding Amount of the Outstanding Directing Notes by written notice to
the Issuer and the Indenture Trustee, may, rescind and annul such declaration
and its consequences if:
(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 Outstanding 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 Outstanding 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.
(a) The Issuer covenants that if (i) Default is made in the payment
of any Noteholders' Interest Distribution Amount on any Notes 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 or any installment of
the principal of any Notes when the same becomes due and payable, and such
Default continues for a period of five days, the Issuer will, upon demand of the
Indenture Trustee, pay to the Indenture Trustee, for the benefit of the
Noteholders, the whole amount then due and payable on the Outstanding 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 respective Class Interest Rate 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.
(b) 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 against the Issuer or other obligor upon any Notes and collect
in the manner provided by law out of the property of the Issuer or other obligor
upon any Notes, wherever situated, the moneys adjudged or decreed to be payable.
(c) 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.
(d) 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 such 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, willful misconduct or bad faith) and of the Noteholders allowed in
such Proceedings;
(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, willful
misconduct or bad faith.
(e) 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 Outstanding 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.
(f) All rights of action and of asserting claims under this
Indenture, or under any of the Outstanding Notes, may be enforced by the
Indenture Trustee without the possession of any of the Outstanding 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
Indenture Trustee, each predecessor Indenture Trustee and their respective
agents and attorneys, shall be for the ratable benefit of the Noteholders.
(g) 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.
(a) If an Event of Default shall have occurred and be continuing in
respect of the Outstanding Notes and the Outstanding Notes have been declared
due and payable and such declaration and its consequences have not been
rescinded and annulled, the Indenture Trustee may do one or more of the
following:
(i) institute Proceedings in its own name and as trustee of
an express trust for the collection of all amounts then payable on the
Outstanding Notes or under this Indenture with respect of Notes, whether by
declaration or otherwise, enforce any judgment obtained, and collect from the
Issuer and any other obligor upon such Outstanding 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 securing the Outstanding Notes;
(iii) exercise any remedies of a secured party under the UCC
and take any other appropriate action to protect and enforce the rights and
remedies of the Indenture Trustee and the Noteholders; and
(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;
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 Outstanding Amount of the Notes consent thereto, (B)
the proceeds of such sale or liquidation distributable to the Noteholders are
sufficient to discharge in full all amounts then due and unpaid upon the
Outstanding Notes or (C) the Indenture Trustee determines that the Indenture
Trust Estate will not continue to provide sufficient funds for the payment of
principal of and interest on the Notes as they would have become due if the
Outstanding Notes had not been declared due and payable, and the Indenture
Trustee obtains the consent of Noteholders of at least 66-2/3% of the
Outstanding Amount of 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
Subordinated Noteholders are sufficient to enable the Indenture Trustee to pay
amounts due on the Subordinated Notes (as provided in clauses FOURTH and FIFTH
of Section 5.4(b) below), or (E) following notice that the proceeds of such sale
or liquidation distributable to the Subordinated Noteholders would be
insufficient to pay amounts due on the Subordinated Notes (as provided in
clauses FOURTH and FIFTH of Section 5.4(b) below), Subordinated Noteholders of
at least a majority of the Outstanding Amount of Subordinated Notes consent
thereto. In determining such sufficiency or insufficiency with respect to
clauses (B) through (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 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 pay (i) an amount equal to Consolidation Loan Fees
with respect to the calendar month most recently ended and all overdue
Consolidation Loan Fees, and (ii) any amounts due the Indenture Trustee, the
Eligible Lender Trustee, and the Delaware Trustee for their respective fees and
expenses, and (iii) any amounts due the Servicer and the Administrator for their
respective fees and expenses;
SECOND: to Senior Noteholders for amounts due and
unpaid on the Senior Notes for the Noteholders' Interest Distribution
Amount;
THIRD: to Senior Noteholders for amounts due and unpaid on the
Senior Notes for principal;
FOURTH: to Subordinated Noteholders for amounts due and
unpaid on the Subordinated Notes for the Noteholders Interest Distribution
Amount;
FIFTH: to Subordinated Noteholders for amounts due and
unpaid on the Subordinated Notes for principal;
SIXTH: to Senior Noteholders for amounts due and unpaid on
the Senior Notes (and thereafter to the Subordinated Noteholders for amounts
due and unpaid on the Subordinated Notes), for Noteholders' Interest
Carryover; and
SEVENTH: to the Issuer, for distribution in accordance
with the terms of the Transfer and Servicing 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 Issuer shall mail to each Noteholder and the Indenture Trustee
a notice that states the record date, the payment date and the amount to be
paid.
Section 5.5. Optional Preservation of the Financed Student Loans.
If the Outstanding 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.
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) Noteholders of not less than 25% of the Outstanding
Directing 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 Directing 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 Outstanding
Directing Notes, the Indenture Trustee in its sole discretion may determine what
action, if any, shall be taken, notwithstanding any other provisions of this
Indenture based upon the larger percentage of Noteholders as of a date certain.
Section 5.7. Unconditional Rights of Noteholders to Receive
Principal and Interest.
Notwithstanding any other provisions in this Indenture, any Noteholder
shall have the right, which is absolute and unconditional, to receive payment of
the principal of and interest, if any, on such Note on or after the respective
due dates thereof expressed in such Note or in this Indenture 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
Directing Notes shall have the right to direct the time, method and place of
conducting any Proceeding for any remedy available to the Indenture Trustee with
respect to the Notes or exercising any trust or power conferred on the Indenture
Trustee; provided that
(i) such direction shall not be in conflict with any rule of
law or with this Indenture;
(ii) subject to the express terms of Section 5.4, any
direction to the Indenture Trustee to sell or liquidate the Trust Estate shall
be by the Noteholders of not less than 66-2/3% of the Outstanding Amount of
Directing 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 66-2/3% of the Outstanding Amount of Directing Notes to
sell or liquidate the Trust Estate shall be of no force and effect;
(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 Directing Notes may waive any past Default
hereunder and its consequences except a Default (a) in payment when due of
principal of or interest on any of the Outstanding Notes or (b) in respect of a
covenant or provision hereof which cannot be modified or amended without the
consent of each Noteholder. In the case of any such waiver, the Issuer, the
Indenture Trustee and the Noteholders shall be restored to their former
positions and rights hereunder, respectively; but no such waiver shall extend to
any subsequent or other Default or impair any right consequent thereto.
Upon any such waiver, such Default shall cease but to exist and be
deemed to have been cured and not to have occurred for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other Default or
impair any right consequent thereto.
Section 5.13 Undertaking for Costs.
All parties to this Indenture agree, not in their individual capacity
but solely in their capacity as Indenture Trustee or Eligible Lender Trustee, as
applicable, and each Noteholder by such Noteholder's acceptance of any Note
shall be deemed to have agreed, that any court may in its discretion require, in
any suit for the enforcement of any right or remedy under this Indenture, or in
any suit against the Indenture Trustee for any action taken, suffered or omitted
by it as Indenture Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to (a) any suit instituted by the
Indenture Trustee, (b) any suit instituted by any Noteholder, or group of
Noteholders, in each case holding in the aggregate more than 10% of the
Outstanding Amount of the Outstanding Notes or (c) any suit instituted by any
Noteholder for the enforcement of the payment of principal of or interest on any
Note on or after the respective due dates expressed in such Note.
Section 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 and each Terms Supplement 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 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 Depositor, the Administrator and the Master Servicer, as
applicable, of each of their obligations to the Issuer under or in connection
with the Transfer and Servicing Agreement (and with respect to the Administrator
only, the Administration Agreement) 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 Transfer and Servicing Agreement
(and the Administration Agreement) to the extent and in the manner directed by
the Indenture Trustee, including the transmission of notices of default on the
part of the Depositor, the Administrator or the Servicer thereunder and the
institution of legal or administrative actions or proceedings to compel or
secure performance by the Depositor, the Administrator or the Servicer of each
of their obligations under the Transfer and Servicing Agreement (and the
Administration Agreement).
(b) If an Event of Default has occurred and is continuing, the
Indenture Trustee may, and at the direction (which direction shall be in
writing) of the Noteholders of 66-2/3% of the Outstanding Amount of the
Outstanding Directing Notes shall exercise all rights, remedies, powers,
privileges and claims of the Issuer against the Depositor, the Administrator or
the Master Servicer under or in connection with the Transfer and Servicing
Agreement (and the Administration Agreement), including the right or power to
take any action to compel or secure performance or observance by the Depositor,
the Administrator or the Servicer of each of their obligations to the Issuer
thereunder and to give any consent, request, notice, direction, approval,
extension or waiver under the Transfer and Servicing Agreement (and the
Administration Agreement) and any right of the Issuer to take such action shall
be suspended.
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 of
such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Indenture Trustee undertakes to perform such duties
and only such duties as are specifically set forth in this Indenture and any
Terms Supplement and no implied covenants or obligations shall be read into this
Indenture or any Terms Supplement against the Indenture Trustee; and
(ii) in the absence of bad faith on its part, the Indenture
Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or opinions
furnished to the Indenture Trustee and conforming to the requirements of this
Indenture; provided, however, that the Indenture Trustee shall examine the
certificates and opinions to determine whether or not they conform to the
requirements of this Indenture.
(c) The Indenture Trustee may not be relieved from liability for its
own negligent action, its own bad faith, 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; and
(iii) the Indenture Trustee shall not be liable with respect
to any action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 5.11.
(d) Every provision of this Indenture that in any way relates to the
Indenture Trustee is subject to paragraphs (a), (b), (c) and (g) of this
Section.
(e) 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.
(f) 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 Transfer and Servicing Agreement.
(g) 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; provided, however, that the Indenture
Trustee shall not refuse or fail to perform any of its duties hereunder
solely as a result of nonpayment of its normal fees and expenses and
further provided that nothing in this Section 6.1(g) shall be construed
to limit the exercise by the Indenture Trustee of any right or remedy
permitted under this Indenture or otherwise in the event of the Issuer's
failure to pay the Indenture Trustee's fees and expenses pursuant to
Section 6.7.
(h) Except as expressly provided in the Basic Documents,
the Indenture Trustee shall have no obligation to administer, service or
collect the Financed Student Loans or to maintain, monitor or otherwise
supervise the administration, servicing or collection of the Financed
Student Loans.
(i) 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.
(j) Every provision of this Indenture relating to the
conduct or affecting the liability of or affording protection to the
Indenture Trustee shall be subject to the provision of this Section and
to the provisions of the TIA.
Section 6.2. Rights of Indenture Trustee.
(a) The Indenture Trustee may conclusively rely on any document
believed by it to be genuine and to have been signed or presented by the proper
Person. The Indenture Trustee need not investigate any fact or matter stated in
such document.
(b) Before the Indenture Trustee acts or refrains from acting, it
may require an Officer's Certificate of the Issuer or an Opinion of Counsel. The
Indenture Trustee shall not be liable for any action it takes or omits to take
in good faith in reliance on such Officer's Certificate or Opinion of Counsel.
(c) The Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys or a custodian or nominee, and the Indenture Trustee shall
not be responsible for any willful 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 6.12 and 6.13.
Section 6.4. Indenture Trustee's Disclaimer.
Neither the Indenture Trustee nor the Eligible Lender Trustee shall be
responsible for and neither makes any representation as to the validity or
adequacy of this Indenture or the Notes, neither shall be accountable for the
Issuer's use of the proceeds from the sale of the Notes, and neither shall be
responsible for any statement of the Issuer in the Indenture or in any document
issued in connection with the sale of the Notes or in the Notes other than the
Indenture Trustee's certificate of authentication.
Section 6.5. Notice of Defaults.
If a Default occurs and is continuing and written notice of the
existence thereof has been delivered to a Responsible Officer of the Indenture
Trustee, the Indenture Trustee shall mail notice of the Default to each
Noteholder within 90 days after it occurs. Except in the case of a Default in
payment of principal of or interest on any Note, 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.
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 requested of it 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 issuance of any Notes, the Indenture Trustee shall mail to each
Noteholder a brief report as of such December 31 that complies with TIA ss.
313(a) if required by said section. The Indenture Trustee shall also comply with
TIA ss. 313(b). If the issuance of any Notes has been registered under the
Securities Act of 1933, as amended, a copy of each such report required pursuant
to TIA ▇▇.▇▇. 313(a) or (b) shall, at the time of such transmission to
Noteholders, be filed by the Indenture Trustee with the Commission and with each
securities exchange, if any, upon which such Notes are listed, provided that the
Issuer has previously notified the Indenture Trustee of such listing.
Section 6.7. Compensation and Indemnity.
The Issuer shall pay, or cause to be paid, to the Indenture Trustee for
its services, a fee equal to the amount agreed to in writing between the
Indenture Trustee and the Administrator (the "Indenture Trustee Fee") at the
times set forth in Section 5.5 of the Transfer and Servicing Agreement and shall
or shall cause the Administrator from its own funds to reimburse the Indenture
Trustee for all reasonable out-of-pocket expenses (including the reasonable fees
and expenses of Trustee's counsel) incurred or made by it in accordance with any
provision of this Indenture or in the performance of its duties hereunder, or in
connection with review of the Terms Supplement, amendment or other
documentation. The Indenture Trustee's compensation shall not be limited by any
law on compensation of a trustee of an express trust. The Issuer shall or shall
cause the Administrator from its own funds to indemnify the Indenture Trustee,
its directors, officers, agents and employees against any and all loss,
liability or expense (including reasonable attorneys' fees and expenses)
incurred by it in connection with the administration of this Trust and the
performance of its duties hereunder and the other Basic Documents. The Indenture
Trustee shall notify the Issuer and the Administrator promptly of any claim for
which it may seek indemnity. Failure by the Indenture Trustee to so notify the
Issuer and the Administrator shall not relieve the Issuer or the Administrator
of its obligations hereunder and under the other Basic Documents. The Issuer
shall or shall cause the Administrator to defend the claim and the Administrator
shall not be liable for any separate legal fees and expenses of the Indenture
Trustee after it has assumed such defense; provided, however, that, in the event
that there may be a conflict between the positions of the Indenture Trustee and
the Administrator in conducting the defense of such claim, the Indenture Trustee
shall be entitled to separate counsel the reasonable fees and expenses of which
shall be paid by the Administrator from its own funds on behalf of the Issuer.
Neither the Issuer nor the Administrator need reimburse any expense or indemnify
against any loss, liability or expense incurred by the Indenture Trustee or its
directors, officers, agents and employees to the extent any such loss, liability
or expenditure arises out of or results from the Indenture Trustee's own willful
misconduct, negligence or bad faith or a breach of the representations,
warranties and covenants of the Indenture Trustee.
The Issuer's payment obligations to the Indenture Trustee pursuant to
this Section (including the obligation of the Issuer or Administrator to
indemnify the Indenture Trustee) shall survive the discharge of this Indenture
or the resignation or removal of the Indenture Trustee. 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 Issuer
shall remove the Indenture Trustee if:
(i) the Indenture Trustee fails to comply with Section 6.12;
(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 Directing Notes may petition any court of competent jurisdiction for
the appointment of a successor Indenture Trustee.
If the Indenture Trustee fails to comply with Section 6.12, any
Noteholder may petition any court of competent jurisdiction for the removal of
the Indenture Trustee and the appointment of a successor Indenture Trustee.
Notwithstanding the replacement of the Indenture Trustee pursuant to
this Section, the Issuer's and the Administrator's obligations under Section 6.7
shall continue for the benefit of the retiring Indenture Trustee.
Section 6.9. Successor Indenture Trustee by Merger.
If the Indenture Trustee consolidates with, merges or converts into, or
transfers all or substantially all its corporate trust business or assets to,
another corporation or banking association, the resulting, surviving or
transferee corporation without any further act shall be the successor Indenture
Trustee; provided that such corporation or banking association shall be
otherwise qualified and eligible under Section 6.12.
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 co-trustee or co-trustees,
or separate trustee or separate trustees, of all or any part of the Indenture
Trust Estate, and to vest in such Person or Persons, in such capacity and for
the benefit of the Noteholders, such title to the Indenture Trust Estate, or any
part hereof, and, subject to the other provisions of this Section, such powers,
duties, obligations, rights and trusts as the Indenture Trustee may consider
necessary or desirable. No co-trustee or separate trustee hereunder shall be
required to meet the terms of eligibility as a successor trustee under Section
6.12 and no notice to Noteholders of the appointment of any co-trustee or
separate trustee shall be required under Section 6.8 hereof.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Indenture Trustee shall be conferred or imposed upon and
exercised or performed by the Indenture Trustee and such separate trustee or
co-trustee jointly (it being understood 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 a 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 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 Appointment of Custodian.
The Issuer acknowledges and agrees that the Indenture Trustee has
appointed a custodian for the sole purpose of perfecting the Indenture Trustee's
security interest in the Financed HEAL Loans hereunder. The Indenture Trustee
hereby appoints Pennsylvania Higher Education Assistance Agency solely for the
purpose of maintaining possession in Pennsylvania of the instruments evidencing
the Financed HEAL Loans. The Indenture Trustee shall not be liable for any
negligence by such custodian. Any costs of such custodianship incurred by the
Indenture Trustee shall be reimbursed to it by the Issuer or Administrator
pursuant to Section 6.7 hereof.
Section 6.12 Eligibility; Disqualification.
The Indenture Trustee shall at all times satisfy the requirements of
TIA ss. 310(a). 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 debt rating of Baa3 or better by
Moody's or BBB or better by Standard & Poor's Corporation. The Indenture Trustee
shall at all times meet the eligibility criteria for an "eligible lender" under
the terms of the Higher Education Act and HEAL Act. The Indenture Trustee shall
comply with TIA ss. 310(b), including the optional provision permitted by the
second sentence of TIA ss. 310(b)(9); provided, however, that there shall be
excluded from the operation of TIA ss. 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 ss. 310(b)(1) are met.
Section 6.13 Preferential Collection of Claims Against Issuer.
The Indenture Trustee shall comply with TIA ss. 311(a), excluding any
creditor relationship listed in TIA ss. 311(b). An Indenture Trustee who has
resigned or been removed shall be subject to TIA ss. 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
for any Notes and (ii) three months after the last Record Date for such Notes, a
list, in such form as the Indenture Trustee may reasonably require, of the names
and addresses of such 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.
Section 7.2. Preservation of Information; Communications to
Noteholders.
(a) The Indenture Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of the Noteholders contained in
the most recent list furnished to the Indenture Trustee as provided in Section
7.1 and the name and addresses of Noteholders received by the Indenture Trustee
in its capacity as Note Registrar. The Indenture Trustee may destroy any list
furnished to it as provided in such Section 7.1 upon receipt of a new list so
furnished.
(b) Noteholders may communicate pursuant to TIA ss. 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 a Noteholder to
receive a copy of the current list of Noteholders (whether or not made pursuant
to TIA ss. 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.
(c) The Issuer, the Indenture Trustee and the Note Registrar shall
have the protection of TIA ss. 312(c).
(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.
Section 7.3. Fiscal Year of Issuer.
Unless the Issuer otherwise determines, the fiscal year of the
Issuer shall end on December 31 of each year.
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
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 the Noteholders pursuant to the Transfer and
Servicing 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 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 of the Notes, the Indenture
Trustee shall establish and maintain, in the name of and with the Indenture
Trustee, for the benefit of the Noteholders and the Certificateholders, the
Trust Accounts as provided in Section 5.1 of the Transfer and Servicing
Agreement, with the exception of the Certificate Distribution Account and the
Certificate Quarterly Advance Account.
(b) On or before the Business Day preceding each Distribution Date,
all Available Funds for the related Class of Notes with respect to the preceding
Collection Period will be deposited in the Collection Account as provided in
Section 5.2 of the Transfer and Servicing Agreement. On or before each
Distribution Date for each Class of Notes, the appropriate 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 5.5 and 5.6 of the Transfer and Servicing Agreement.
(c) On each Distribution Date, the Indenture Trustee (or any other
Paying Agent) shall distribute all amounts received by it on behalf of
Noteholders of a particular Class pursuant to paragraph (b) above to such
Noteholders in respect of the Notes to the extent of amounts due and unpaid on
the Notes of such Class as provided in the related Terms Supplement.
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 5.1(b) of the Transfer and Servicing Agreement. All
income or other gain from investments of moneys deposited in the Trust Accounts
with the exception of the Certificate Distribution Account and the Certificate
Quarterly Advance Account relating to the Notes 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.
(b) Subject to Section 6.1(c), the Indenture Trustee shall not in
any way be held liable 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. New York City 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, (iii) if
such Notes shall have been declared due and payable following an Event of
Default, and 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; the Indenture Trustee shall, to the fullest extent practicable,
invest and reinvest funds in the Trust Accounts (with the exception of the
Certificate Distribution Account and the Certificate Quarterly Advance Account)
in one or more Eligible Investments listed in paragraph (7) of the definition of
Eligible Investments, provided that for so long as Bankers Trust Company is the
Indenture Trustee, the Indenture Trustee shall invest and reinvest funds as
provided above, in the Bankers Trust Institutional Cash Management Fund.
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.1. Supplemental Indentures Without Consent of
Noteholders.
(a) Without the consent of any Noteholders, the Issuer and the
Indenture Trustee, when authorized by an Issuer Order, from time to time, may
enter into one or more indentures supplemental hereto (which shall conform to
the provisions of the Trust Indenture Act, to the extent this Indenture is
qualified under the Trust Indenture Act, as in force at the date of the
execution thereof), in form satisfactory to the Indenture Trustee, for any of
the following purposes:
(i) to correct or amplify the description of any
property at any time subject to the lien of each Terms Supplement, or better to
assure, convey and confirm unto the Indenture Trustee any property subject or
required to be subjected to the lien of the Indenture, or to subject to the lien
of the 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 of the Notes, or to surrender any right or power
herein conferred upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge
any property to or with the Indenture Trustee;
(v) to cure any ambiguity, to correct or supplement
any provision herein or in any supplemental indenture which may be inconsistent
with any other provision herein or in any 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;
(vii) to add to the conditions, limitations and
restrictions on the authorized amount, terms and purposes of the issuance,
authentication and delivery of any Notes, as herein set forth, additional
conditions, limitations and restrictions thereafter to be observed;
(viii) to modify or eliminate any of the terms of this
Indenture; provided, however, that
(A) such supplemental indenture shall expressly
provide that any such modifications or eliminations shall not be effective
with respect to any Outstanding Note created prior to the execution of such
supplemental indenture; and
(B) the Indenture Trustee may, in its
discretion, decline to enter into any such supplemental indenture which,
in its opinion, would adversely affect its own rights, duties or immunities.
(ix) 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.
(b) The Issuer and the Indenture Trustee, when authorized by an
Issuer Order, may 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.
(c) An amendment or supplemental indenture shall be deemed not to
materially and adversely affect any Noteholder if there is delivered to the
Indenture Trustee written notification from each Rating Agency that initially
rated the Notes and is then rating the Notes to the effect that such amendment
or supplement will not cause that Rating Agency to reduce the then-current
rating assigned to the Notes.
Section 9.2. Supplemental Indentures with Consent of Noteholders.
The Issuer and the Indenture Trustee, when authorized by an Issuer
Order, also may with the consent of the Noteholders of not less than a majority
of the Outstanding Amount of all the Notes in case Outstanding Notes of all
Classes are to be affected, or with the consent of the Noteholders of not less
than a majority of the Outstanding Amount of the Notes to be affected in case
one or more, but less than all, of the Classes of Outstanding Notes are to be
affected, by Act of such Noteholders delivered to the Issuer and the Indenture
Trustee, enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to, or changing in any manner or eliminating
any of the provisions of, this Indenture relating to such Notes or of modifying
in any manner the rights of such Noteholders under this Indenture; provided,
however, that no such supplemental indenture shall, without the consent of the
Noteholders of each Outstanding Note affected thereby:
(i) change the date of payment of any installment of
principal of or interest on any Note, or reduce the principal amount thereof or
the interest rate thereon, change the provisions of this Indenture relating to
the application of collections on, or the proceeds of the sale of, the Indenture
Trust Estate to payment of principal of or interest on the Notes, or change any
place of payment where, or the coin or currency in which, any Note or the
interest thereon is payable, or impair the right to institute suit for the
enforcement of the provisions of this Indenture requiring the application of
funds available therefor, as provided in Article V, to the payment of any such
amount due on the Notes on or after the respective due dates thereof;
(ii) reduce the percentage of the Outstanding Amount of the
Notes, the consent of the Noteholders of which is required for any such
supplemental indenture, or the consent of the Noteholders of which is required
for any waiver of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences provided for in this
Indenture;
(iii) modify or alter the provisions of the proviso to the
definition of the term "Outstanding";
(iv) reduce the percentage of the Outstanding Amount of the
Notes 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;
(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; or
(viii) impair the rights provided such Noteholder under
the TIA, except as permitted therein.
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.
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 to the extent this Indenture is qualified
under the Trust Indenture Act.
Section 9.6. Reference in Notes to Supplemental Indentures.
Notes authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article IX which relates to the affected
Notes may, and if required by the Indenture Trustee shall, bear a notation in
form approved by the Indenture Trustee as to any matter provided for in such
supplemental indenture. If the Issuer or the Indenture Trustee shall so
determine, new Notes so modified as to conform, in the opinion of the Indenture
Trustee and the Issuer, to any such supplemental indenture which relates to such
Notes may be prepared and executed by the Issuer and authenticated and delivered
by the Indenture Trustee in exchange for Outstanding Notes.
Notwithstanding anything to the contrary contained in this Article IX,
no supplemental indenture may be entered into unless the Rating Agency Condition
has been satisfied with respect to such supplemental indenture.
ARTICLE X
RESERVED
ARTICLE XI
MISCELLANEOUS
Section 11.1 Compliance Certificates and Opinions, etc.
(a) Upon any application or request by the Issuer to the Indenture
Trustee to take any action under any provision of this Indenture, the Issuer, or
the Administrator on behalf of the Issuer, shall furnish to the Indenture
Trustee (i) an Officer's Certificate of the Issuer stating that all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with, (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 such signatory of such certificate or
opinion has read or has caused to be read such covenant or condition and the
definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based;
(iii) a statement that, in the opinion of each such signatory,
such signatory has made such examination or investigation as is necessary to
enable such signatory to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each such
signatory, such condition or covenant has been complied with.
(b) (i) Other than any property released as contemplated by
clause (iii) below, whenever any property or securities are to be released from
the lien of this Indenture and the related Terms Supplements, the Issuer shall
also furnish to the Indenture Trustee an Officer's Certificate of the Issuer
certifying or stating the opinion of each person signing such certificate as to
the fair value (within 90 days of such release) of the property or securities
proposed to be released and stating that in the opinion of such person the
proposed release will not impair the security under this Indenture in
contravention of the provisions hereof.
(ii) Whenever the Issuer is required to furnish to the
Indenture Trustee an Officer's Certificate of the Issuer certifying or stating
the opinion of any signer thereof as to the matters described in clause (i)
above, the Issuer shall also furnish to the Indenture Trustee an Independent
Certificate as to the same matters if the fair value of the property or
securities and of all other property, other than property as contemplated by
clause (iii) below, or securities released from the lien of this Indenture and
the related Terms Supplements since the commencement of the then-current
calendar year, as set forth in the certificates required by clause (i) above and
this clause (ii), equals 10% or more of the Outstanding Amount of the Notes, but
such certificate need not be furnished in the case of any release of property or
securities if the fair value thereof as set forth in the related Officer's
Certificate is less than $25,000 or less than one percent of the then
Outstanding Amount of the Notes Outstanding.
(iii) Notwithstanding Section 2.12 or any other provisions of
this Section, the Issuer may, without compliance with the requirements of
Section 2.12 or the other provisions of this Section, (A) collect, liquidate,
sell, service, convey, administer, manage or otherwise dispose of Financed
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 Depositor those
specified Financed Student Loans as and to the extent permitted or required by
and in accordance with Section 2.3 of the Transfer and Servicing Agreement, so
long as the Issuer shall deliver to the Indenture Trustee every six months,
commencing six months after the first issuance of Notes, an Officer's
Certificate of the Issuer stating that all the dispositions of any portion of
the Indenture Trust Estate described in clauses (A), (B) or (C) above that
occurred during the immediately preceding six calendar months 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 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 Depositor, the Issuer or the Administrator, stating that the
information with respect to such factual matters is in the possession of the
Servicer, the Depositor, 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 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 the registration 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, filing,
waiver or Act of Noteholders or other documents provided or permitted by this
Indenture or any of the Basic Documents, shall be in writing and if such
request, demand, authorization, direction, notice, consent, filing waiver or Act
of Noteholders is to be made upon, given or furnished to or filed with:
(a) the Indenture Trustee by any Noteholder or by the Issuer shall
be sufficient for every purpose hereunder if made, given, furnished or filed in
writing and mailed, first class, postage prepaid or sent by overnight courier or
by facsimile transmission 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, or via overnight courier to the Issuer addressed to: Crestar
Student Loan Trust ▇▇▇▇-▇, ▇▇▇▇▇▇▇▇▇: Corporate Trust Department, Star Bank,
National Association, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇-▇▇▇-▇▇▇▇
(Tel); ▇▇▇-▇▇▇-▇▇▇▇ (Fax); with a copy to the Administrator addressed to:
Crestar Bank, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Vice
President Securitizations Manager, ▇▇▇-▇▇▇-▇▇▇▇ (Tel); ▇▇▇-▇▇▇-▇▇▇▇ (Fax); with
a copy to Crestar Bank, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇;
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇; Senior Vice President and General Counsel, or at 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.
(c) the Rating Agencies shall be sufficient for every purpose
hereunder if in writing and mailed, first-class, postage prepaid, or via
overnight courier to the Rating Agency addressed to: Fitch IBCA, Inc., ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇-▇▇▇-▇▇▇▇ (Tel); ▇▇▇-▇▇▇-▇▇▇▇ (Fax),
Attention: Asset-Backed Securities Group; ▇▇▇▇▇'▇ Investors Service, Inc., ▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇-▇▇▇-▇▇▇▇ (Tel); ▇▇▇-▇▇▇-▇▇▇▇ (Fax);
Attention: Assistant Vice President - Analyst Structured Finance; Standard &
Poor's Rating Services, ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇-▇▇▇-▇▇▇▇
(Tel); ▇▇▇-▇▇▇-▇▇▇▇ (Fax); Attention: Asset-Backed Surveillance Group; or at any
other address previously furnished to the Issuer, Administrator or Indenture
Trustee by such Rating Agency.
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.
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 and the Indenture Trustee 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 ▇▇.▇▇. 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 successors and assigns, whether so expressed or not. All
agreements of the Indenture Trustee in this Indenture 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, each Terms Supplement and the Notes 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.
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 Issuer
or any other counsel reasonably acceptable to the Indenture Trustee) to the
effect that such recording is necessary either for the protection of the
Noteholders or any other Person secured hereunder or for the enforcement of any
right or remedy granted to the Indenture Trustee under this Indenture.
Section 11.16 Trust Obligations.
No recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, 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 or (ii) any partner,
owner, beneficiary, custodian, officer, director, employee or agent 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 of the Indenture
Trustee or the Eligible Lender Trustee 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 benefit of, the
terms and provisions of Article VI, VII and VIII of the Trust Agreement. No
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, 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 the Delaware Trustee, in its
individual capacity or as Delaware Trustee, or any officer, director, employee,
agent, owner, or interestholder of the Delaware Trustee or of any successor or
assign of the Delaware Trustee.
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 prior to the
date which is one year and a day after to the termination of this Indenture,
they will not at any time institute against the Issuer, or join in any
institution against the Issuer of, any bankruptcy, reorganization, arrangement,
insolvency, receivership or liquidation proceedings, or other proceedings under
any United States federal or State bankruptcy or similar law in connection with
any obligations relating to the Notes, this Indenture or any of the other Basic
Documents.
Section 11.18 Inspection.
The Issuer agrees that, on reasonable prior notice, it will 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 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; provided, however, that the Indenture
Trustee may only cause the books of the Issuer to be audited on an annual basis,
unless there occurs an Event of Default hereunder. The Indenture Trustee shall
and shall cause its representatives to hold in confidence all such information
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 with advice of counsel and
after consultation with the Issuer and Administrator that such disclosure is
consistent with its obligations hereunder.
Notwithstanding anything herein to the contrary, the foregoing shall
not be construed to prohibit (i) disclosure of any and all information that is
or becomes publicly known through no fault of the Indenture Trustee, (ii)
disclosure of any and all information (which makes reference to the Issuer, the
Administrator or the Crestar Student Loan Trust 1997-1 transaction) obtained by
the Indenture Trustee from sources (other than the Issuer, Eligible Lender
Trustee, the Administrator or the Master Servicer) that have not notified the
Indenture Trustee that such information is subject to a confidentiality
obligation with the Issuer, the Eligible Lender Trustee, the Administrator or
the Master Servicer (iii) disclosure of any and all information (A) if required
to do so by any applicable statute, law, rule or regulation, (B) to any
government agency or regulatory body having or claiming authority to regulate or
oversee any aspects of the Indenture Trustee's business or that of its
affiliates, (C) pursuant to any subpoena, civil investigative demand or similar
demand or request of any court, regulatory authority, arbitrator or arbitration
to which the Indenture Trustee or an affiliate or an officer, director or
employee thereof is a party, (D) in any preliminary or final offering circular,
registration statement or contract or other document pertaining to the
transactions contemplated herein approved in advance by the Issuer or (E) to any
affiliate, independent or internal auditor, agent, employee or attorney of the
Indenture Trustee having a need to know the same, provided that the Indenture
Trustee advises such recipient of the confidential nature of the information
being disclosed or (iv) any other disclosure authorized by the Issuer.
Section 11.19 Usury.
The amount of interest payable or paid on any Note under the terms of
this Indenture shall be limited to an amount which shall not exceed the maximum
non usurious rate of interest allowed by the applicable laws of the United
States or the lesser of New York or Ohio, which could lawfully be contracted
for, charged or received (the "Highest Lawful Rate"). If any payment of interest
on any Note exceeds the Highest Lawful Rate, the Issuer stipulates that such
excess amount will be deemed to have been paid as a result of an error on the
part of the Issuer, and the Noteholder receiving such excess payment shall
promptly, upon discovery of such error or upon notice thereof from the Issuer or
the Indenture Trustee, refund the amount of such excess and, at the option of
the Indenture Trustee, apply the excess to the payment of principal of such
Note, if any, remaining unpaid.
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.
CRESTAR STUDENT LOAN TRUST 1997-1
By: STAR BANK, NATIONAL
ASSOCIATION
not in its individual capacity
but solely as Eligible Lender
Trustee
By:_______________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Trust Officer
BANKERS TRUST COMPANY,
not in its individual capacity but solely
as Indenture Trustee,
By:_______________________________
Name:
Title:
COMMONWEALTH OF VIRGINIA, )
) ss.:
CITY OF RICHMOND, )
BEFORE ME, the undersigned authority, a Notary Public in and for said
county and state, on this day personally appeared ______________________, known
to me to be the person and officer whose name is subscribed to the foregoing
instrument and acknowledged to me that the same was the act of the said
_____________ of STAR BANK, NATIONAL ASSOCIATION, not in its individual capacity
but solely as Eligible Lender Trustee of CRESTAR STUDENT LOAN TRUST 1997-1, a
Delaware trust, and that he executed the same as the act of said trust for the
purpose and consideration therein expressed, and in the capacities therein
stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the _____ day of
___________, 1997.
-----------------------------
Notary Public in and for
the Commonwealth of Virginia
[SEAL]
My commission expires:
----------------------
COMMONWEALTH OF VIRGINIA, )
) ss.:
CITY OF RICHMOND, )
BEFORE ME, the undersigned authority, a Notary Public in and for said
county and state, on this day personally appeared ______________________, known
to me to be the person and officer whose name is subscribed to the foregoing
instrument and acknowledged to me that the same was the act of the said BANKERS
TRUST COMPANY, a New York banking corporation, and that she executed the same as
the act of said trust for the purpose and consideration therein expressed, and
in the capacities therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the _____ day of
___________, 1997.
-----------------------------
Notary Public in and for
the Commonwealth of Virginia
[SEAL]
My commission expires:
----------------------
FIRST TERMS SUPPLEMENT
TO THE
INDENTURE
DATED AS OF DECEMBER 1, 1997
between
CRESTAR STUDENT LOAN TRUST 1997-1
and
BANKERS TRUST COMPANY,
Indenture Trustee
-----------------------------
Dated as of December 1, 1997
-----------------------------
Securing
$222,900,000
CRESTAR STUDENT LOAN TRUST 1997-1 STUDENT LOAN ASSET BACKED NOTES
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS..............................................................................................2
ARTICLE II AUTHORIZATION, TERMS AND ISSUANCE.......................................................................4
Section 2.1. Authorization of Notes.......................................................................4
Section 2.2. Purposes.....................................................................................5
Section 2.3. Terms of the Notes...........................................................................5
Section 2.4. The Notes....................................................................................6
Section 2.5. Class Interest Rates.........................................................................7
Section 2.6. Additional Provisions Regarding the Class Interest Rates on the Notes........................7
ARTICLE III DISTRIBUTIONS..........................................................................................8
Section 3.1. Distributions of Interest and Principal......................................................8
Section 3.2. Early Payment................................................................................8
ARTICLE IV MISCELLANEOUS...........................................................................................9
Section 4.1. Adoption of This First Terms Supplement......................................................9
Section 4.2. Counterparts.................................................................................9
Section 4.3. Indenture Constitutes a Security Agreement...................................................9
Section 4.4. Governing Law................................................................................9
Section 4.5. Modification of Indenture....................................................................9
Section 4.6. Ratification of Indenture....................................................................9
EXHIBIT A Form of Senior LIBOR Rate Note
EXHIBIT B Form of Subordinated LIBOR Rate Note
EXHIBIT C Schedule of Financed Student Loans
EXHIBIT D Form of Trust Receipt and Certification
FIRST TERMS SUPPLEMENT, dated as of December 1, 1997, between
CRESTAR STUDENT LOAN TRUST 1997-1, a Delaware business trust (the "Issuer")
acting through STAR BANK, NATIONAL ASSOCIATION, a national banking association,
not in its individual capacity but solely as eligible lender trustee (the
"Eligible Lender Trustee"), and BANKERS TRUST COMPANY, a New York banking
corporation duly established, existing and authorized to accept and execute
trusts of the character herein set out under and by virtue of the laws of the
State of New York, with its principal corporate trust office in New York, New
York (the "Indenture Trustee"), as Indenture Trustee under an Indenture dated as
of December 1, 1997, as may be further amended and supplemented from time to
time (the "Indenture").
PRELIMINARY STATEMENT
Section 2.3 of the Indenture provides, among other things,
that the Issuer, as provided in the Trust Agreement, and the Indenture Trustee
may enter into an indenture supplemental to the Indenture for the purpose of
authorizing the Notes and to specify certain terms of such Notes. The Issuer has
duly authorized the creation of Notes in an aggregate principal amount not to
exceed $222,900,000 to be known as the Issuer's Student Loan Asset Backed Notes
(the "Notes"), and the Issuer and the Indenture Trustee are executing and
delivering this First Terms Supplement in order to provide for the Notes. Except
as otherwise specified herein, or as the context may require, capitalized terms
used but not defined herein shall have the meanings set forth in Appendix A to
the Transfer and Servicing Agreement dated as of December 1, 1997 (the "Transfer
and Servicing Agreement") among the Issuer, Crestar Bank as Transferor,
Administrator and Master Servicer (in such capacities, the "Transferor", the
"Administrator" and the "Master Servicer," respectively) and the Eligible Lender
Trustee, which Appendix A also contains rules as to usage that shall be
applicable herein.
GRANTING CLAUSES
The Issuer hereby Grants to the Indenture Trustee, for the
exclusive benefit of the Noteholders, all of the Issuer's right, title and
interest in and to (a) the Financed Student Loans listed in the Schedule of
Financed Student Loans (as such Schedule may be amended or supplemented from
time to time including, but not limited to, for purposes of adding any
Subsequent Financed Student Loans acquired by the Trust during the Subsequent
Finance Period) and all obligations of the Obligors thereunder including all
moneys paid thereunder (other than Interest Subsidy Payments and Special
Allowance Payments payable to the Cut-off Date (or with respect to the
Subsequent Financed Student Loans, through the applicable Subsequent Cut-off
Date)), and all written communications received by the Transferor with respect
thereto and still retained by the Transferor in accordance with its retention
policies (including borrower correspondence, notices of death, disability or
bankruptcy and requests for deferrals or forbearance), on or after the Cutoff
Date (or with respect to the Subsequent Financed Student Loans, after the
applicable Subsequent Cut-off Date), (b) all funds on deposit from time to time
in the Trust Accounts (other than the Certificate Distribution Account and the
Certificate Quarterly Advance Account) and in all investments and proceeds
thereof (including all income thereon), (c) all proceeds of the foregoing,
including without limitation any proceeds of the conversion, voluntary or
involuntary, of any of the foregoing into cash or other liquid property. Such
Grants are made, however, in trust, to secure the Notes, equally and ratably
without prejudice, priority or distinction, between any Note and any other Note
by reason of difference in time of issuance or otherwise, provided, however,
that the Class B Notes are subordinated to all amounts owing on the Class A
Notes (other than Noteholders' Interest Carryover) as described herein, in the
Indenture or any other Basic Document; and to secure (i) the payment of all
amounts due on the Notes, as such amounts become due in accordance with their
terms, (ii) the payment of all other sums payable under the Indenture, this
First Terms Supplement, or any other Basic Document with respect to the Notes
and (iii) compliance with the provisions of the Indenture, this First Terms
Supplement or any other Basic Document with respect to the Notes, all as
provided in the Indenture and this First Terms Supplement.
The Indenture Trustee acknowledges such Grant, accepts the
trusts hereunder in accordance with the provisions hereof and of the Indenture
and agrees to perform the duties herein or therein required.
ARTICLE I
DEFINITIONS
Capitalized terms used herein and not otherwise defined shall
have the meanings set forth in Appendix A to the Transfer and Servicing
Agreement. Additionally, the following terms shall be as defined below.
"Authorized Denominations" means, with respect to each Class
of Notes, $50,000 and integral multiples of $1,000 in excess thereof.
"Book-Entry Form" or "Book-Entry System" means a form or
system under which (i) the beneficial right to principal and interest may be
transferred only through a book-entry, (ii) physical securities in registered
form are issued only to a Securities Depository or its nominee as registered
owner, with the securities "immobilized" to the custody of the Securities
Depository, and (iii) the book-entry is the record that identifies the owners of
beneficial interests in that principal and interest.
"Class A Notes" means the Class A-1 Notes and the Class A-2 Notes.
"Class A-1 Notes" has the meaning set forth in Section 2.1 herein.
"Class A-2 Notes" has the meaning set forth in Section 2.1 herein.
"Class B Notes" has the meaning set forth in Section 2.1 herein.
"Class Initial Rate" means (i) 6.14047% per annum with respect to
the Class A-1 Notes, (ii) 6.20047% per annum with respect to the Class A-2
Notes, and (iii) 6.43047% per annum with respect to the Class B Notes.
"Class Interest Rate" means with respect to (i) the Class A
Notes, each variable rate of interest per annum borne by the Class A-1 and Class
A-2 Notes during each Interest Period and determined in accordance with the
provisions of Section 2.4 and 2.5 hereof; and (ii) the Class B Notes, each
variable rate of interest per annum borne by the Class B Notes during each
Interest Period and determined in accordance with the provisions of Sections 2.4
and 2.5 hereof.
"Effective Interest Rate" means, with respect to any Financed
Student Loan, the interest rate per annum borne by such Financed Student Loan
after giving effect to all applicable Interest Subsidy Payments, Special
Allowance Payments, rebate fees on Consolidation Loans and reductions pursuant
to borrower incentives. For this purpose, the Special Allowance Payment rate
shall be computed based upon the average of the bond equivalent rates of 91-day
United States Treasury Bills auctioned during that portion of the then current
calendar quarter which ends on the date as of which the Effective Interest Rate
is determined.
"Final Maturity Date" means (i) January 25, 2007 with respect
to the Class A-1 Notes, (ii) January 25, 2017 with respect to the Class A-2
Notes, and (iii) January 25, 2027 with respect to the Class B Notes.
"First Terms Supplement" means this First Terms Supplement, as
from time to time amended or supplemented.
"Formula Interest Rate" means, as to each Class of Notes,
One-Month LIBOR plus the applicable Margin, as of the Rate Determination Date
for each Interest Period, but not more than 18% per annum.
"Interest Payment Period" means, with respect to each Class of
Notes, the period beginning on the most recent Distribution Date for such Class
of Notes (or the Closing Date with respect to the initial Interest Payment
Period) and ending on and including the day before the next Distribution Date
for such Class.
"Interest Period" means, with respect to each Class of Notes,
the period commencing on a Rate Adjustment Date for such Class (or the Closing
Date with respect to the initial Interest Period) and ending on and including
the day before the next Rate Adjustment Date for such Class.
"Margin" means, with respect to the Class A-1 Notes, 0.16% per
annum, with respect to the Class A-2 Notes, 0.22% per annum, and with respect to
the Class B Notes, 0.45% per annum.
"Net Loan Rate" means for any Interest Period, the rate of
interest per annum (rounded to the next highest .01%) equal to (i) the weighted
average Effective Interest Rate of the Financed Student Loans as of the last day
of the Collection Period immediately preceding the commencement of such Interest
Period, less (ii) the Program Operating Expense Percentage (or less 0.73% per
annum during the period from the Closing Date through March 31, 1998).
"91-Day T-▇▇▇▇ Rate<180>means the average of the bond
equivalent rates of weekly auctions of 91-day United States Treasury bills
auctioned since the last day of the preceding calendar quarter, but preceding
the date of determination (unless otherwise specified).
"Noteholders' Interest Carryover" means, with respect to any
Class of Notes for any Interest Payment Period or portion thereof for which the
Class Interest Rate is based on the Net Loan Rate, the amount equal to the
excess, if any, of a)" (a) the amount of interest such Class of Notes would have
accrued in respect of the related Interest Payment Period or portion thereof had
interest been calculated based on the applicable Formula Interest Rate over b)"
(b) the amount of interest such Class of Notes actually accrued in respect of
such Interest Payment Period or portion thereof based on the Net Loan Rate,
together with the unpaid portion of any such excess from prior Interest Payment
Periods (and interest accrued thereon, to the extent permitted by law,
calculated based on Formula Interest Rate applicable to such Class of Notes;
provided, however, that, any amount of Noteholders' Interest Carryover with
respect to a Class of Notes remaining after the earlier of the Distribution Date
on which the outstanding principal amount of such Class has been reduced to zero
and the distribution of all Available Funds on the Final Maturity of such Class
of Notes, will never become due and payable and will be discharged as to the
applicable Class of Notes on such date.
"Program Operating Expense Percentage" means a fraction
(expressed as a percentage and calculated as of the end of each calendar quarter
by the Administrator) the numerator of which is the annualized operating
expenses of the Trust for the calendar month then ended, including, without
limitation, Transaction Fees, and the denominator of which is the Pool Balance
as of the last day of such calendar quarter.
"Notes" has the meaning set forth in the Preliminary
Statement.
"Rate Adjustment Date" means, (i) with respect to the Class A
Notes, the Distribution Date occurring in each month, and (ii) with respect to
the Class B Notes, the Distribution Date in each month while the Class A Notes
are Outstanding, and thereafter, the 25th day of each month, except that the
Rate Adjustment Date occurring in January, April, July or October will be the
Distribution Dates occurring in such months.
ARTICLE II
AUTHORIZATION, TERMS AND ISSUANCE
Section 2.1. Authorization of Notes.
There is hereby authorized the borrowing of funds, and to
evidence such borrowing there are hereby authorized three Classes of Notes
(collectively, the "Notes"), designated as (i) the "Crestar Student Loan Trust
1997-1, Senior LIBOR Rate Class A-1 Student Loan Asset Backed Notes" (the "Class
A-1 Notes") in the aggregate principal amount of $130,000,000, (ii) the "Crestar
Student Loan Trust 1997-1, Senior LIBOR Rate Class A-2 Student Loan Asset Backed
Notes" (the "Class A-2 Notes") in the aggregate principal amount of $84,000,000,
and (iii) the "Crestar Student Loan Trust 1997-1, Subordinate LIBOR Rate Class B
Student Loan Asset Backed Notes" (the "Class B Notes") in the aggregate
principal amount of $8,900,000.
Section 2.2. Purposes.
The Notes are authorized to finance the acquisition by the
Issuer of Financed Student Loans, and to make deposits to the Trust Accounts
required hereby.
Section 2.3. Terms of the Notes.
The Notes shall be issued in fully registered form, in
substantially the forms set forth in Exhibit A hereof (with respect to the Class
A Notes) and Exhibit B (with respect to the Class B Notes), in each case with
such variations, omissions and insertions as may be required by the
circumstances, as may be required or permitted by the Indenture and this First
Terms Supplement, or be consistent with the Indenture and this First Terms
Supplement and necessary or appropriate to conform to the rules and requirements
of any governmental authority or any usage or requirement of law with respect
thereto.
The Notes may be issued only in Authorized Denominations. The
Notes shall be dated as of the Closing Date. Each Class of Notes shall mature on
its Final Maturity Date. The Notes shall be issued to a Securities Depository
for use in a Book-Entry System in accordance with the provisions of Section 2.14
of the Indenture.
Interest on each Note shall accrue on the Outstanding Amount
of such Note until such Note has been paid in full or payment has been duly
provided for, as the case may be, and shall accrue from the later of the Closing
Date or the most recent Distribution Date to which interest has been paid or
duly provided for. Each Note shall bear interest at an interest rate determined
in accordance with the provisions and subject to the limitations set forth
herein, and interest on Notes shall be paid for the related Interest Payment
Period on each Distribution Date (or on each Quarterly Distribution Date in the
case of the Class B Notes).
Principal will be paid on the Notes on each Distribution Date
(or on each Quarterly Distribution Date in the case of the Class B Notes) in an
amount up to the Noteholders' Principal Distribution Amount on such Distribution
Date or Quarterly Distribution Date, as the case may be, in the order and
priorities set forth in the Transfer and Servicing Agreement and the Indenture.
Except as otherwise set forth in the Indenture and the
Transfer and Servicing Agreement, the rights of the Class B Noteholders to
receive distributions with respect to interest shall be subordinated to the
prior rights of the Class A Noteholders to receive all payments of interest to
which they are entitled and, after each Class of Notes has received the full
amount of interest to which it is entitled, the rights of the Class B
Noteholders to receive distributions with respect to principal shall be
subordinated to the prior rights of the Class A Noteholders to receive all
payments of principal to which they are entitled.
Section 2.4. The Notes.
(a) Until the initial Rate Adjustment Date, each Class of
Notes shall bear interest at the Class Initial Rate for such Class. Thereafter,
each Class of Notes shall bear interest during each Interest Period at the
lesser of (i) the Formula Interest Rate or (ii) the Net Loan Rate determined on
the Rate Determination Date for such Interest Period; provided, however, that no
determination of the Net Loan Rate is required to be made on a Rate
Determination Date unless One-Month LIBOR exceeds the 91-Day T-▇▇▇▇ Rate by more
than 100 basis points as of the preceding Rate Determination Date (or, with
respect to the initial Rate Determination Date, the Closing Date).
(b) Interest shall accrue daily on each Class of Notes at the
related Class Interest Rate and shall be computed for the actual number of days
elapsed in such Interest Period on the basis of a year consisting of 360 days.
(c) If the Class Interest Rate applicable to a Class of Notes
for any Interest Period is the Net Loan Rate, the Master Servicer shall
determine the Noteholders' Interest Carryover, if any, with respect to such
Class of Notes for such Interest Period. Such Noteholders' Interest Carryover
shall bear interest calculated at the Formula Interest Rate for such Class from
the Distribution Date for the Interest Period with respect to which such
Noteholders' Interest Carryover was calculated, until paid. For purposes of this
First Terms Supplement, any reference to "principal" or "interest" herein shall
not include within the meaning of such words Noteholders' Interest Carryover or
any interest accrued on any such Noteholders' Interest Carryover. Such
Noteholders' Interest Carryover shall be separately calculated for each Note of
such Class by the Master Servicer during such Interest Period in sufficient time
for the Indenture Trustee to give notice to each Noteholder of such Noteholders'
Interest Carryover as required in the next succeeding sentence. On the
Distribution Date for an Interest Period with respect to which such Noteholders'
Interest Carryover for a Class of Notes has been calculated by the Master
Servicer, the Indenture Trustee shall give written notice to each Noteholder of
the applicable Class of the Noteholders' Interest Carryover applicable to each
Noteholder's Note of such Class, which written notice may be included in any
other written statement sent by the Indenture Trustee to such Noteholders, and
shall be mailed on such Distribution Date by first-class mail, postage prepaid,
to each such Noteholder at such Noteholder's address as it appears on the
registration books maintained by the Note Registrar.
(d) The Noteholders' Interest Carryover for a Class of Notes
shall be paid by the Indenture Trustee on Outstanding Notes of such Class on the
first occurring Quarterly Distribution Date for such Class if and to the extent
funds are available therefor, in accordance with all priorities set forth in the
Transfer and Servicing Agreement. To the extent that any portion of the
Noteholders' Interest Carryover for a Class of Notes remains unpaid after
payment of a portion thereof, and subject to the next sentence below, such
unpaid portion of the Noteholders' Interest Carryover shall be paid in whole or
in part as required hereunder until fully paid by the Indenture Trustee on the
next occurring Quarterly Distribution Date or Dates, as necessary, to the extent
funds are available therefor in accordance with all priorities set forth in the
Transfer and Security Agreement. Any Noteholders' Interest Carryover (and any
interest accrued thereon) on any Note which is due and payable on the earlier of
the Distribution Date on which the outstanding principal amount of such Class is
reduced to zero and the related Final Maturity Date for such Class shall be paid
to the Noteholder thereof on such Final Maturity Date to the extent that moneys
are available therefor in accordance with the provisions of this First Terms
Supplement and the Transfer and Servicing Agreement; provided, however, that any
amount of Noteholders' Interest Carryover with respect to a Class of Notes
remaining after the earlier of the Distribution Date on which the outstanding
principal amount of such Class has been reduced to zero and the distribution of
all Available Funds on the Final Maturity of such Class of Notes, will never
become due and payable and will be discharged as to the applicable Class of
Notes on such date. On any Quarterly Distribution Date on which the Indenture
Trustee pays only a portion of the Noteholders' Interest Carryover on a Note of
such Class, the Indenture Trustee shall give written notice in the manner set
forth in the immediately preceding paragraph to the Noteholders of such Note
receiving such partial payment of the Noteholders' Interest Carryover remaining
unpaid on such Note.
(e) The failure to pay the aggregate amount of Noteholders'
Interest Carryover as a result of insufficient Available Funds will not result
in the occurrence of an Event of Default.
(f) In the event that the Master Servicer no longer
determines, or fails to determine, when required, the Class Interest Rate with
respect to a Class of Notes, or, if for any reason such manner of determination
shall be held to be invalid or unenforceable by a court of competent
jurisdiction, the Class Interest Rate for the next succeeding Interest Period
for such Class of Notes shall be determined by the Indenture Trustee provided it
is notified in writing by the Master Servicer on or prior to the Rate
Determination Date, or, if the Indenture Trustee fails to make such
determinations, such Class Interest Rate shall be the Net Loan Rate for such
next succeeding Interest Period.
Section 2.5. Class Interest Rates.
On each Rate Determination Date, the Master Servicer
shall determine the Formula Interest Rate for each Class of Notes that
will be applicable to the Interest Period immediately following such
Rate Determination Date. In connection therewith, the Master Servicer
shall calculate One-Month LIBOR, and shall notify the Indenture Trustee
and the Eligible Lender Trustee in writing of One-Month LIBOR. The
determination by the Master Servicer of One-Month LIBOR shall (in the
absence of manifest error) be final and binding upon all parties. On
each Rate Determination Date, the Master Servicer also shall determine
the Net Loan Rate for the related Interest Period when required pursuant
to Section 2.4(a). Based upon such calculations, the Master Servicer
shall determine the Class Interest Rate applicable to each Class of
Notes for the applicable Interest Period.
Section 2.6. Additional Provisions Regarding the Class
Interest Rates on the Notes.
The determination of a Class Interest Rate by the Master
Servicer or the Indenture Trustee or any other Person pursuant to the provisions
of the applicable Section of this Article II shall be conclusive and binding on
the Noteholders of the Class of Notes to which such Class Interest Rate applies,
and the Issuer and the Indenture Trustee may rely thereon for all purposes.
In no event shall the cumulative amount of interest paid or
payable on a Class of Notes (including interest calculated as provided herein,
plus any other amounts that constitute interest on the Notes of such Class under
applicable law, which are contracted for, charged, reserved, taken or received
pursuant to the Notes of such Class or related documents) calculated from the
date of issuance of the Notes of such Class through any subsequent day during
the term of the Notes of such Class or otherwise prior to payment in full of the
Notes of such Class exceed the amount permitted by applicable law. If the
applicable law is ever judicially interpreted so as to render usurious any
amount called for under the Notes of such Class or related documents or
otherwise contracted for, charged, reserved, taken or received in connection
with the Notes of such Class, or if the acceleration of the maturity of the
Notes of such Class results in payment to or receipt by the Noteholder or any
former Noteholder of the Notes of such Class of any interest in excess of that
permitted by applicable law, then, notwithstanding any provision of the Notes of
such Class or related documents to the contrary, all excess amounts theretofore
paid or received with respect to the Notes of such Class shall be credited on
the principal balance of the Notes of such Class (or, if the Notes of such Class
have been paid or would thereby be paid in full, refunded by the recipient
thereof), and the provisions of the Notes of such Class and related documents
shall automatically and immediately be deemed reformed and the amounts
thereafter collectible hereunder and thereunder reduced, without the necessity
of the execution of any new document, so as to comply with the applicable law,
but so as to permit the recovery of the fullest amount otherwise called for
under the Notes of such Class and under the related documents.
ARTICLE III
DISTRIBUTIONS
Section 3.1. Distributions of Interest and Principal.
The Indenture Trustee shall make distributions from and to the
several Trust Accounts in the manner provided for in Section 5.5 of the Transfer
and Servicing Agreement, as such Section may be amended from time to time. All
principal payments of Notes of any Class shall be made pro rata to the
Noteholders of such Class. No later than each Distribution Determination Date,
the Master Servicer shall compute the Principal Factor of each Class of Notes
for the upcoming Distribution Date and shall notify the Indenture Trustee in
writing of such Principal Factors.
Section 3.2. Early Payment.
The Notes shall be subject to early repayment upon sale of the
Financed Student Loans as provided in Section 9.1 of the Transfer and Servicing
Agreement.
ARTICLE IV
MISCELLANEOUS
Section 4.1. Adoption of This First Terms Supplement.
This First Terms Supplement is adopted pursuant to the
provisions of the Indenture.
Section 4.2. Counterparts.
This First Terms Supplement may be simultaneously executed in
several counterparts, each of which shall be an original and all of which shall
constitute but one and the same instrument.
Section 4.3. Indenture Constitutes a Security Agreement.
This First Terms Supplement constitutes a security agreement
for the purposes of the Uniform Commercial Code.
Section 4.4. Governing Law.
This First Terms Supplement shall be governed by and construed
in accordance with the laws of the State of New York.
Section 4.5. Modification of Indenture.
The provisions of Section 2.11(e) of the Indenture shall not
be applicable to the issuance of the Notes.
Section 4.6. Ratification of Indenture.
As supplemented by this First Terms Supplement, the Indenture
is in all respects ratified and confirmed, and the Indenture so supplemented by
this First Terms Supplement shall be read, taken and construed as one and the
same instrument. Each addition to and amendment of the Indenture contained
herein is solely for purposes of the Notes. If any term of this First Terms
Supplement conflicts with any term of the Indenture, this First Terms Supplement
shall control for purposes of the Notes.
IN WITNESS WHEREOF, the parties hereto have caused this First
Terms Supplement to be duly executed as of the day and year first above written.
CRESTAR STUDENT LOAN TRUST 1997-1
By: STAR BANK, NATIONAL
ASSOCIATION, not in its
individual capacity but solely
as Eligible Lender Trustee
By:_____________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Trust Officer
BANKERS TRUST COMPANY, not in its
individual capacity but solely as
Indenture Trustee,
By:_____________________________________
Name:
Title:
COMMONWEALTH OF VIRGINIA, )
) ss:
CITY OF RICHMOND, )
BEFORE ME, the undersigned authority, a Notary Public in and for said
county and state, on this day personally appeared______________________________,
known to me to be the person and officer whose name is subscribed to the
foregoing instrument and acknowledged to me that the same was the act of the
said [Assistant] Vice President of STAR BANK, NATIONAL ASSOCIATION, not in its
individual capacity but solely as Eligible Lender Trustee of CRESTAR STUDENT
LOAN TRUST 1997-1, a Delaware trust, and that he executed the same as the act of
said trust for the purpose and consideration therein expressed, and in the
capacities therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the ____ day of December,
1997.
--------------------------------
Notary Public in and
for the Commonwealth of Virginia.
[SEAL]
My commission expires:
------------------------------
COMMONWEALTH OF VIRGINIA, )
) ss:
CITY OF RICHMOND, )
BEFORE ME, the undersigned authority, a Notary Public in and for said
county and state, on this day personally appeared ____________________________,
known to me to be the person and officer whose name is subscribed to the
foregoing instrument and acknowledged to me that the same was the act of the
said BANKERS TRUST COMPANY, a New York banking corporation, and that she
executed the same as the act of said corporation for the purpose and
consideration therein expressed, and in the capacities therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the ____ day of December,
1997.
-------------------------------
Notary Public in and for
the Commonwealth of Virginia
[SEAL]
My commission expires:
------------------------------
EXHIBIT A-1
[FORM OF SENIOR LIBOR RATE NOTE]
CRESTAR STUDENT LOAN TRUST 1997-1
SENIOR LIBOR RATE CLASS [A-l] [A-2] STUDENT LOAN ASSET BACKED NOTE
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER (AS DEFINED BELOW)
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS NOTE DOES NOT REPRESENT DEPOSITS OR OBLIGATIONS OF OR INTEREST IN
CRESTAR BANK, STAR BANK, NATIONAL ASSOCIATION, DELAWARE TRUST CAPITAL
MANAGEMENT, INC. OR BANKERS TRUST COMPANY.
THIS NOTE IS NOT GUARANTEED OR INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY GOVERNMENTAL AGENCY.
No. A-[1] [2] - _____ $_________
FINAL CLASS
MATURITY DATED INTEREST
Class DATE DATE RATE CUSIP
[A-1] [A-2] One-Month
LIBOR
[-] [+]
___% as
herein
provided
REGISTERED NOTEHOLDER: CEDE & CO.
CRESTAR BANK STUDENT LOAN TRUST 1997-1, a Delaware business
trust (the "Issuer"), for value received, promises to pay, from the sources
herein described, to the Registered Noteholder identified above, or registered
assigns, upon presentation and surrender hereof at the Corporate Trust Office of
Bankers Trust Company, as Paying Agent, or at the principal office of any
successor or additional Paying Agent, the Principal Amount identified above on
the Final Maturity Date identified above, and to pay to the registered owner
hereof, interest and principal hereon in lawful money of the United States of
America at the Class Interest Rate on the dates as provided herein. Unless
otherwise defined herein, capitalized terms used herein shall have the
respective meanings given to such terms in the Indenture dated as of December 1,
1997 (the "Master Indenture") and as supplemented by the First Terms Supplement
dated as of December 1, 1997, (the "First Terms Supplement" and, together with
the Master Indenture, the "Indenture") between the Issuer and Bankers Trust
Company, as Indenture Trustee, as further amended and supplemented from time to
time.
This is one of a duly authorized issue of notes of the Issuer
designated as "Crestar Student Loan Trust 1997-1, Senior LIBOR Rate Class [A-l]
[A-2] Student Loan Asset Backed Notes", in the aggregate principal amount of
$[130,000,000] [80,000,000] (herein referred to as the "Class [A-l] [A-2]
Notes," and together with the Crestar Student Loan Trust 1997-1, Senior LIBOR
Rate Class [A-1] [A-2] Student Loan Asset Backed Notes in the aggregate
principal amount of $[130,000,000] [80,000,000] (the "Class [A-l] [A-2] Notes")
and the Crestar Student Loan Trust 1997-1, Subordinate LIBOR Rate Class B
Student Loan Asset Backed Notes in the aggregate principal amount of $8,900,000
(the "Class B Notes"), the "Notes") issued under the Indenture. The Notes are
issued to finance the acquisition of Financed Student Loans by the Trust, and to
make certain deposits into the Pledged Accounts.
The Notes are secured under the Indenture which, together with
certain other documents, assigns to the Indenture Trustee for the benefit of the
Noteholders all the rights and remedies of the Issuer under certain Financed
Student Loans and rights under various contracts providing for the issuance,
guarantee and servicing of such Financed Student Loans. Reference is hereby made
to the Indenture for the provisions, among others, with respect to the custody
and application of the proceeds of the Notes, the nature and the extent of the
liens and security of the Indenture, the collection and disposition of revenues,
the funds charged with and pledged to the payment of the principal of and the
interest on the Notes, the rights, duties and immunities of the Indenture
Trustee, the rights of the registered owners of the Notes, and the rights and
obligations of the Issuer. By the acceptance of this Note, the registered owner
hereof assents to all of the provisions of the Indenture.
Distributions of principal and interest will made on each
Distribution Date to the holders of this Note in the manner described in the
Transfer and Servicing Agreement.
The rate of interest on the [A-1] [A-2] Notes shall be
determined in accordance with the First Terms Supplement.
If an Event of Default as defined in the Indenture occurs, the
principal of and interest on all Notes issued under the Indenture may be
declared due and payable upon the conditions and in the manner and with the
effect provided in the Indenture. The Indenture and the rights and obligations
of the Issuer, the Indenture Trustee and the Noteholder hereof may be modified
or amended in the manner and subject to the conditions set forth in the
Indenture.
The holder of this Note shall have no right to enforce the
provisions of the Indenture or to institute action to enforce the covenants
therein, or to take any action with respect to any Event of Default under the
Indenture, or to institute, appear in or defend any suit or other proceeding
with respect thereto, except as provided in the Indenture.
The transfer of this Note may be registered only upon
surrender hereof to the Indenture Trustee together with an assignment duly
executed by the registered owner or its attorney or legal representative in such
form as shall be satisfactory to the Indenture Trustee. Upon any such
registration of transfer of this Note and subject to the payment of any fees and
charges as provided by the Indenture, the Issuer shall execute and the Indenture
Trustee shall authenticate and deliver in exchange for this Note a new Note or
Notes registered in the name of the transferee, in any denomination or
denominations authorized by the Indenture, of the same maturity and in an
aggregate principal amount equal to the unredeemed principal amount of this Note
and bearing the same interest as this Note.
In any case where the date fixed for the payment of principal
of or interest on this Note shall not be a Business Day, then payment of such
principal or interest need not be made on such date but may be made on the next
succeeding Business Day with the same force and effect as if made on the date
fixed for the payment thereof.
This Note shall not be valid or become obligatory for any
purpose or be entitled to any security or benefit under the Indenture until the
certificate of authentication hereon shall have been manually signed by the
Indenture Trustee.
IN WITNESS WHEREOF, the Issuer has caused this Note to be
executed in its name by the manual or facsimile signature of an Authorized
Officer.
CRESTAR STUDENT LOAN TRUST 1997-1
By: STAR BANK, NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Eligible Lender Trustee
By: _______________________________________
Its Authorized Officer
CERTIFICATE OF AUTHENTICATION
This Note is one of the Class [A-1] [A-2] Notes designated in
and issued under the provisions of the within mentioned-Indenture.
BANKERS TRUST COMPANY
New York, New York, as
Indenture Trustee
By:___________________________
Authorized Representative
Date of Authentication:
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and
transfers unto ______________________, the within Note and irrevocably appoints
________________________, attorney-in-fact, to transfer the within Note on the
books kept for registration thereof, with full power of substitution in the
premises.
Dated: ____________ _____________________________
NOTICE: The signature to Signature Guaranteed:
this assignment must
correspond with the name as _____________________________
it appears upon the face of
the within Note in every
particular, without any
alteration whatsoever.
Name and Address: ___________________________
Tax Identification Number or
Social Security Number(s): __________________________
EXHIBIT B
[FORM OF SUBORDINATE LIBOR RATE NOTE]
CRESTAR STUDENT LOAN TRUST 1997-1
SUBORDINATE LIBOR RATE CLASS B STUDENT LOAN ASSET BACKED NOTE
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER (AS DEFINED BELOW)
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS NOTE DOES NOT REPRESENT DEPOSITS OR OBLIGATIONS OF OR INTEREST IN
CRESTAR BANK, STAR BANK, NATIONAL ASSOCIATION, DELAWARE TRUST CAPITAL
MANAGEMENT, INC. OR BANKERS TRUST COMPANY.
THIS NOTE IS NOT GUARANTEED OR INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY GOVERNMENTAL AGENCY.
No. B-_______ $_______
FINAL CLASS
MATURITY DATED INTEREST
Class DATE DATE RATE CUSIP
B One-Month
Libor +_____%
as herein
provided
REGISTERED NOTEHOLDER: CEDE & CO.
CRESTAR BANK STUDENT LOAN TRUST 1997-1, a Delaware business
trust (the "Issuer"), for value received, promises to pay, from the sources
herein described, to the Registered Noteholder identified above, or registered
assigns, upon presentation and surrender hereof at the Corporate Trust Office of
Bankers Trust Company, as Paying Agent, or at the principal office of any
successor or additional Paying Agent, the Principal Amount identified above on
the Final Maturity Date identified above, and to pay to the registered owner
hereof, interest and principal hereon in lawful money of the United States of
America at the Class Interest Rate on the dates as provided herein. Unless
otherwise defined herein, capitalized terms used herein shall have the
respective meanings given to such terms in the Indenture dated as of December 1,
1997 (the "Master Indenture"), as supplemented by the First Terms Supplement
dated as of December 1, 1997, (the "First Terms Supplement" and, together with
the Master Indenture, the "Indenture") between the Issuer and Bankers Trust
Company, as Indenture Trustee, as further amended and supplemented from time to
time.
This is one of a duly authorized issue of notes of the Issuer
designated as "Crestar Student Loan Trust 1997-1, Subordinate LIBOR Rate Class B
Student Loan Asset Backed Notes", in the aggregate principal amount of
$8,900,000 (herein referred to as the "Class B Notes," and together with the
Crestar Student Loan Trust 1997-1, Senior LIBOR Rate Class A-1 and Class A-2
Student Loan Asset Backed Notes in the aggregate principal amount of
$130,000,000 and $80,000,000, the "Notes") issued under the Indenture. The Notes
are issued to finance the acquisition of Financed Student Loans by the Trust,
and to make certain deposits into the Pledged Accounts.
The Notes are secured under the Indenture which, together with
certain other documents, assigns to the Indenture Trustee for the benefit of the
Noteholders all the rights and remedies of the Issuer under certain Financed
Student Loans and rights under various contracts providing for the issuance,
guarantee and servicing of such Financed Student Loans. Reference is hereby made
to the Indenture for the provisions, among others, with respect to the custody
and application of the proceeds of the Notes, the nature and the extent of the
liens and security of the Indenture, the collection and disposition of revenues,
the funds charged with and pledged to the payment of the principal of and the
interest on the Notes, the rights, duties and immunities of the Indenture
Trustee, the rights of the registered owners of the Notes, and the rights and
obligations of the Issuer. By the acceptance of this Note, the registered owner
hereof assents to all of the provisions of the Indenture.
DISTRIBUTIONS OF INTEREST AND PRINCIPAL ON THE CLASS B NOTES
ARE SUBORDINATED IN PRIORITY OF PAYMENT TO DISTRIBUTIONS OF INTEREST AND
PRINCIPAL ON THE CLASS A NOTES AS DESCRIBED IN THE FIRST TERMS SUPPLEMENT AND
THE TRANSFER AND SERVICING AGREEMENT.
Distributions of principal and interest on this Class B Note
will made on each Quarterly Distribution Date to the holders of this Class B
Note in the manner described in the Transfer and Servicing Agreement.
The rate of interest on the Class B Notes shall be determined
in accordance with the First Terms Supplement.
If an Event of Default as defined in the Indenture occurs, the
principal of and interest on all Notes issued under the Indenture may be
declared due and payable upon the conditions and in the manner and with the
effect provided in the Indenture. The Indenture and the rights and obligations
of the Issuer, the Indenture Trustee and the Noteholder hereof may be modified
or amended in the manner and subject to the conditions set forth in the
Indenture.
The holder of this Note shall have no right to enforce the
provisions of the Indenture or to institute action to enforce the covenants
therein, or to take any action with respect to any Event of Default under the
Indenture, or to institute, appear in or defend any suit or other proceeding
with respect thereto, except as provided in the Indenture.
The transfer of this Note may be registered only upon
surrender hereof to the Indenture Trustee together with an assignment duly
executed by the registered owner or its attorney or legal representative in such
form as shall be satisfactory to the Indenture Trustee. Upon any such
registration of transfer of this Note and subject to the payment of any fees and
charges as provided by the Indenture, the Issuer shall execute and the Indenture
Trustee shall authenticate and deliver in exchange for this Note a new Note or
Notes registered in the name of the transferee, in any denomination or
denominations authorized by the Indenture, of the same maturity and in an
aggregate principal amount equal to the unredeemed principal amount of this Note
and bearing the same interest as Note.
In any case where the date fixed for the payment of principal
of or interest on this Note shall not be a Business Day, then payment of such
principal or interest need not be made on such date but may be made on the next
succeeding Business Day with the same force and effect as if made on the date
fixed for the payment thereof.
It is hereby certified, recited and declared that all acts,
conditions and things required to have happened, to exist and to have been
performed precedent to and in the execution and delivery of the Indenture and
issuance of this Note have happened, do exist and have been performed in due
time, form and manner as required by law.
This Note shall not be valid or become obligatory for any
purpose or be entitled to any security or benefit under the Indenture until the
certificate of authentication hereon shall have been manually signed by the
Indenture Trustee.
IN WITNESS WHEREOF, the Issuer has caused this Note to be
executed in its name by the manual or facsimile signature of an Authorized
Officer.
CRESTAR STUDENT LOAN TRUST 1997-1
By: STAR BANK, NATIONAL ASSOCIATION, not in
its individual capacity but solely as Eligible Lender
Trustee
By: _____________________________________
Its Authorized Officer
CERTIFICATE OF AUTHENTICATION
This Note is one of the Class B Notes designated in and issued
under the provisions of the within mentioned Indenture.
BANKERS TRUST COMPANY
New York, New York, as
Indenture Trustee
By: ____________________________
Authorized Representative
Date of Authentication:
--------------------------------
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and
transfers unto ___________________, the within Note and irrevocably appoints
____________________, attorney-in-fact, to transfer the within Note on the books
kept for registration thereof, with full power of substitution in the premises.
Dated: ____________ _____________________________
NOTICE: The signature to Signature Guaranteed:
this assignment must
correspond with the name as _____________________________
it appears upon the face of
the within Note in every
particular, without any
alteration whatsoever.
Name and Address: ___________________________
Tax Identification Number or
Social Security Number(s): __________________________
EXHIBIT D
TRUST RECEIPT AND CERTIFICATION
December __, 1997
Bankers Trust Company
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: The Indenture between Crestar Student Loan Trust 1997-1 and
Bankers Trust Company, dated as of December 1, 1997
Ladies and Gentlemen:
In accordance with the provisions of Section 6.11 of the
above-referenced Indenture, the undersigned, as the Custodian, hereby certifies
as to each HEAL Loan in the Schedule of Financed Student Loans that it has
received the original HEAL Note relating thereto. The Custodian makes no
representations as to and shall not be responsible to verify (i) the validity,
legality, enforceability, sufficiency, due authorization or genuineness of any
of the documents contained in each custodial file or of any of the HEAL Loans,
or (ii) the collectibility, insurability, effectiveness or suitability of any
such HEAL Loan.
The Custodian hereby confirms that it is holding the HEAL Notes as
agent and bailee of, and custodian for the exclusive use and benefit, and
subject to the sole direction, of the Indenture Trustee pursuant to the terms
and conditions of the Indenture. The Custodian agrees to hold such HEAL Notes
continuously in the Commonwealth of Pennsylvania, without the prior approval of
Bankers Trust Company.
This Trust Receipt and Certification is not divisible or negotiable.
Capitalized terms used herein shall have the meaning ascribed to them
in the Indenture.
PENNSYLVANIA HIGHER EDUCATION
ASSISTANCE AGENCY,
Custodian
By:__________________________________________________
Name:________________________________________________
Title:_______________________________________________