1
EXHIBIT 4.1
--------------------------------------------------------------------------------
SECOND AMENDED AND RESTATED
INDENTURE OF TRUST,
Dated as of June 1, 1999
By and Among
STUDENT LOAN FUNDING 1998-A/B TRUST,
A DELAWARE COMMON LAW TRUST,
FIRSTAR BANK, NATIONAL ASSOCIATION,
NOT IN ITS INDIVIDUAL CAPACITY, BUT SOLELY AS
CO-OWNER ELIGIBLE LENDER TRUSTEE FOR THE BENEFIT OF
STUDENT LOAN FUNDING 1998-A/B TRUST,
and
FIRSTAR BANK, NATIONAL ASSOCIATION,
as Indenture Trustee
Relating to the
STUDENT LOAN ASSET-BACKED NOTES,
SERIES 1998A AND SERIES B-3
OF
STUDENT LOAN FUNDING 1998-A/B TRUST
--------------------------------------------------------------------------------
2
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939
(THE "TRUST INDENTURE ACT") AND THE
SECOND AMENDED AND RESTATED INDENTURE OF TRUST, DATED AS OF JUNE 1, 1999
TRUST INDENTURE
ACT SECTION INDENTURE SECTION
----------- -----------------
Section 310 (a)(1) 7.1(b)
(a)(2) 7.1(b)
(a)(3) 7.2
(a)(4) N/A
(a)(5) 7.1(b)
(b) 7.1(d)
(c) N/A
Section 311 (a) 7.17
(b) 7.17
(c) N/A
Section 312 (a) 6.15
(b) 7.18
(c) 7.18
Section 313 (a) 7.10
(b) 7.10
(c) 7.10
(d) 7.10
Section 314 (a) 6.7
(b) 12.8
(c) 1.3(a)
(c)(1) 1.3(a)
(c)(2) 1.3(a)
(c)(3) 1.3(a)
(d) 1.3(c)(e)
(e) 1.3(a)
(f) 1.3(k)
Section 315 (a) 7.1(a)(i)
(b) 8.8
(c) 7.1(a)(ii)
(d) 7.1(a)(iii)
(e) 6.16
Section 316 (a)(1)(A) 8.4
(a)(1)(B) 8.7
(a)(2) N/A
(a)(computations) 8.9
(b) 8.5
(c) N/A
Section 317 (a)(1) 8.4
(a)(2) 8.4
(b) N/A
Section 318 (a) 12.10
NOTE: This reconciliation and tie shall not, for any purpose, be
deemed to be a part of the Indenture. Attention should also be
directed to Section 318(c) of the Trust Indenture Act (the
provisions of which are intended to apply to this Indenture,
regardless of whether this Indenture is qualified thereunder),
which provides that the provisions of Section 310 to and
including Section 317 are a part of and govern every qualified
indenture whether or not physically contained therein.
2
3
TABLE OF CONTENTS
Page
----
PREAMBLE 1
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
-------------------------------------------------------
SECTION 1.1 Definitions 5
SECTION 1.2 Use of Certain Terms 21
SECTION 1.3 Compliance Certificates and Opinions 21
SECTION 1.4 Incorporation by Reference of Trust Indenture Act 24
ARTICLE II
AUTHORIZATION, TERMS AND PROVISIONS OF NOTES
--------------------------------------------
SECTION 2.1 Authorization of Notes; Terms of Notes in General; Notes to Constitute Limited
Obligations 25
SECTION 2.2 Execution of Notes; Validity of Signatures 26
SECTION 2.3 Transfer of Notes; Exchange of Notes 26
SECTION 2.4 Books of Registry 27
SECTION 2.5 Mutilated, Lost, Stolen or Destroyed Notes 28
SECTION 2.6 Disposition and Destruction of Notes 28
SECTION 2.7 Forms of Notes and Instructions for Payment 29
SECTION 2.8 Temporary Notes 29
ARTICLE III
[RESERVED]
ARTICLE IV
REDEMPTION OF THE NOTES
-----------------------
SECTION 4.1 Redemption of Notes in General 31
ARTICLE V
DISPOSITION OF PROCEEDS; ESTABLISHMENT OF FUNDS AND ACCOUNTS;
APPLICATION OF AVAILABLE FUNDS
SECTION 5.1 Disposition of Proceeds of the Notes 32
SECTION 5.2 Reserve Fund 32
SECTION 5.3 Acquisition Fund 33
SECTION 5.3.1 Financing of Student Loans 34
SECTION 5.3.3 Investment of Acquisition Fund; Transfer of Proceeds in Acquisition Fund 35
SECTION 5.4 Student Loan Portfolio Fund; Sale of Student Loans 35
4
SECTION 5.5 Collection Fund 37
SECTION 5.5.1 Collection Account 38
SECTION 5.5.2 Note Payment Account 38
SECTION 5.5.3. [Reserved] 39
SECTION 5.5.4 Expense Account 39
SECTION 5.5.5 Excess Surplus Account 39
SECTION 5.5.6 Investment of Collection Fund 40
SECTION 5.6 Pledge 40
SECTION 5.7 Investments 43
SECTION 5.8 Exchange Agreements; Counterparty Exchange Payments; Issuer Exchange Payments 45
SECTION 5.9 Termination 47
ARTICLE VI
COVENANTS TO SECURE NOTES
-------------------------
SECTION 6.1 Administration of the Program 48
SECTION 6.2 Contracts of Guarantee 48
SECTION 6.3 Acquisition, Collection and Assignment of Student Loans; Compliance
with Law 48
SECTION 6.4 Enforcement of Financed Student Loans 49
SECTION 6.5 Enforcement of Master Servicing Agreement and Servicing
Agreements; Removal of Servicer 49
SECTION 6.6 Enforcement of Purchase Agreements 50
SECTION 6.7 Books of Account; Annual Audit 50
SECTION 6.8 Punctual Payment of Notes 51
SECTION 6.9 Further Assurances 51
SECTION 6.10 Protection of Security 51
SECTION 6.11 No Encumbrances 52
SECTION 6.12 Compliance with Indenture 52
SECTION 6.13 Limitation on Program Operating Expenses 53
SECTION 6.14 Notice of Additional Guarantee Agencies or Servicers 53
SECTION 6.15 Issuer to Furnish Indenture Trustee Names and Addresses of Holders 53
SECTION 6.16 Undertaking for Costs 53
ARTICLE VII
CONCERNING THE INDENTURE TRUSTEE
--------------------------------
SECTION 7.1 Appointment of, Acceptance by, and Duties of Indenture Trustee;
Qualification; Resignation; Removal; Successor 55
SECTION 7.2 Appointment of Co-Indenture Trustee 58
SECTION 7.3 Certain Rights and Obligations of the Indenture Trustee 59
SECTION 7.4 Evidence of Compliance with Conditions Precedent; Examination of
Evidence; Evidence of Rights of Holders 61
SECTION 7.5 Proofs of Claims and Other Papers and Documents 63
4
5
SECTION 7.6 Dealing with the Issuer 63
SECTION 7.7 Fees and Reimbursement of Indenture Trustee 63
SECTION 7.8 Fees and Reimbursements of Each Eligible Lender Trustee 63
SECTION 7.9 Covenants of Indenture Trustee Pursuant to Higher Education Act 64
SECTION 7.10 Statements and Reports by Indenture Trustee of Funds and Accounts
and Other Matters 65
SECTION 7.11 Additional Authenticating Agent 67
SECTION 7.12 Notice to Rating Agencies 67
SECTION 7.13 Indenture Trustee Not Liable for Acts of the Issuer; No Representations
by Indenture Trustee 67
SECTION 7.14 Indenture Trustee Not Responsible for Calculation Agent 67
SECTION 7.15 Indemnification of the Indenture Trustee and each Eligible Lender
Trustee 67
SECTION 7.16 Intervention by the Indenture Trustee 68
SECTION 7.17 Preferential Collection of Claims Against Issuer 68
SECTION 7.18 Preservation of Information; Communication to Holders 68
SECTION 7.19 Survival of Certain Provisions of the Indenture 69
ARTICLE VIII
DEFAULTS AND REMEDIES
---------------------
SECTION 8.1 Events of Default 70
SECTION 8.2 Inspection of Books and Records 73
SECTION 8.3 Application of Moneys 73
SECTION 8.4 Suits at Law or in Equity; Direction of Action by Holders 76
SECTION 8.5 Suits by Individual Holders or an Exchange Counterparty 77
SECTION 8.6 Remedies Not Exclusive 78
SECTION 8.7 Waivers of Default 78
SECTION 8.8 Notice of Events of Default 79
SECTION 8.9 Computations 79
SECTION 8.10 Article Subject to Certain Provisions 79
ARTICLE IX
AMENDING AND SUPPLEMENTING OF INDENTURE
---------------------------------------
SECTION 9.1 Amending and Supplementing of Indenture Without Consent of Holders 80
SECTION 9.2 Amendment of Indenture with Consent of Holders and Exchange
Counterparties 81
SECTION 9.3 Effectiveness of Supplemental Indenture 82
SECTION 9.4 Supplemental Indenture Affecting Indenture Trustee 82
SECTION 9.5 Supplemental Indentures Affecting Certain Requirements of the Higher
Education Act 82
5
6
ARTICLE X
DEFEASANCE; MONEYS HELD FOR PAYMENT OF DEFEASED NOTES
-----------------------------------------------------
SECTION 10.1 Trust Irrevocable 83
SECTION 10.2 Discharge of Liens and Pledges; Notes No Longer Outstanding and Deemed to Be Paid 83
SECTION 10.3 Notes Not Presented for Payment When Due; Moneys Held for the Notes after Due Date
Thereof 85
ARTICLE XI
MEETINGS OF HOLDERS
-------------------
SECTION 11.1 Purposes of Meetings 87
SECTION 11.2 Call of Meetings; Place of Meetings 87
SECTION 11.3 Meetings; Regulations of the Indenture Trustee 88
SECTION 11.4 Voting; Speaking at Meeting; Record of Meeting 88
SECTION 11.5 Miscellaneous 89
ARTICLE XII
MISCELLANEOUS
-------------
SECTION 12.1 Benefits of Indenture Limited to Issuer, Eligible Lender Trustees,
Indenture Trustee, Exchange Counterparty and Holders 90
SECTION 12.2 Effect of Legal Holidays 90
SECTION 12.3 Partial Invalidity 90
SECTION 12.4 Notices 90
SECTION 12.5 Law and Place of Enforcement of Indenture 91
SECTION 12.6 No Recourse Against Members, Management Committee Members,
Officers or Employees of the Issuer 91
SECTION 12.7 Cross-Indemnification 91
SECTION 12.8 Suspension of Mail 92
SECTION 12.9 Opinion as to Trust Estate 92
SECTION 12.10 Conflict with Trust Indenture Act 92
SECTION 12.11 Effect of Article and Section Headings and Table of Contents 93
SECTION 12.12 Execution of Counterparts 93
SCHEDULE I Schedule of Approved Guarantee Agencies
SCHEDULE II Schedule of Approved Servicers and Servicing Agreements
EXHIBIT A Student Loan Acquisition Certificate
EXHIBIT B Updating Student Loan Acquisition Certificate
7
EXHIBIT 4.1
THIS SECOND AMENDED AND RESTATED INDENTURE OF TRUST, dated as
of June 1, 1999, as hereafter amended or supplemented by Supplemental Indentures
(the "Base Indenture" and collectively with the hereinafter defined Terms
Supplement, the "Indenture"), by and among STUDENT LOAN FUNDING 1998-A/B TRUST,
a common law (as opposed to statutory) trust created under the laws of the State
of Delaware (the "Delaware Trust" or the "Issuer") by Firstar Bank, National
Association, a national banking association duly organized and existing under
the laws of the United States, having its principal corporate trust office in
Cincinnati, Ohio, not in its individual capacity but solely as co-owner trustee
(the "Co-Owner Trustee") of the Student Loan Funding Trust 1998-A/B, FIRSTAR
BANK, NATIONAL ASSOCIATION, a national banking association duly organized and
existing under the laws of the United States, having its principal corporate
trust office in Cincinnati, Ohio, not in its individual capacity but solely as
initial co-owner eligible lender trustee for the benefit of the Delaware Trust
(the "Initial Co-Owner Eligible Lender Trustee") and FIRSTAR BANK, NATIONAL
ASSOCIATION, a national banking association duly organized and existing under
the laws of the United States, having its principal corporate trust office in
Cincinnati, Ohio and being qualified to accept and administer the trusts hereby
created (the "Indenture Trustee"), amends and restates that certain First
Amended and Restated Indenture of Trust, dated as of March 15, 1999 (the "First
Restated Base Indenture" and collectively with the First Restated Terms
Supplement thereto, the "First Restated Indenture") by and among the Issuer, the
Initial Co-Owner Eligible Lender Trustee an the Indenture Trustee, which amended
and restated that certain Indenture of Trust, dated as of December 1, 1998 (the
"Original Base Indenture"), by and among Student Loan Funding LLC, a limited
liability company formed under the laws of the State of Delaware (the "Original
Issuer"), Firstar Bank, National Association (successor by merger to Star Bank,
National Association), not in its individual capacity, but solely as initial
eligible lender trustee for the benefit of the Original Issuer ("Original
Initial ELT"), and the Indenture Trustee, with (i) references in this Base
Indenture to the "Student Loan Funding 1998-A/B Trust" or to the "Delaware
Trust" or the "Issuer" shall mean the Co-Owner Trustee, not in its individual
capacity, but solely as Co-Owner Trustee of the Delaware Trust and (ii) the
capitalized words and terms used in the recitals and granting clauses of this
Indenture as defined words and terms and not otherwise defined therein are being
used as defined in Section 1.1 hereof;
WITNESSETH:
WHEREAS, the Original Issuer was and is authorized by the
applicable provisions of the laws of the United States and the State of Delaware
and by its Certificate of Formation and Operating Agreement to acquire directly,
or indirectly through an Eligible Lender Trustee, as defined in the First
Restated Base Indenture, student loan notes incurred under the Higher Education
Act, and to finance and refinance the acquisition directly, or indirectly
through an Eligible Lender Trustee, of such student loan notes by the issuance
of notes and other evidences of indebtedness of the Issuer;
WHEREAS, the Original Issuer provided under the Original Base
Indenture and the Original Terms Supplement (collectively, the "Original
Indenture") for the issuance in Series of (i) its Student Loan Asset-Backed
Senior Notes, Series 1998A (the "Unregistered Series
8
1998A Notes" or the "Unregistered Senior Notes") and (ii) its Student Loan
Asset-Backed Subordinate Notes, Series 1998B (the "Unregistered Series B-3
Notes" or the "Unregistered Subordinate Notes" and collectively with the
Unregistered Series 1998A Notes, the "Unregistered Notes");
WHEREAS, the Original Issuer, the Original Initial ELT and the
Indenture Trustee executed and delivered the Original Indenture in order to
confirm and declare the terms and conditions upon which the Unregistered Notes
are secured and to secure payment of the principal thereof and interest and any
Carryover Interest thereon;
WHEREAS, pursuant to the Transfer and Sale Agreement, the
Original Issuer and the Original Initial ELT transferred all of the Trust Estate
to (i) the Issuer and (ii) the Initial Co-Owner Eligible Lender Trustee
hereunder in consideration of the assumption by (i) the Issuer of all of the
obligations of the Original Issuer hereunder and under the Unregistered Notes
and (ii) the Initial Co-Owner Eligible Lender Trustee of all of the obligations
of the Original Initial ELT hereunder; and
WHEREAS, in connection with execution and delivery of the
Transfer and Sale Agreement, the Issuer and the Initial Co-Owner Eligible Lender
Trustee executed and delivered the First Restated Indenture to continue to
secure the payment of the principal of and interest and any Carryover Interest
on the Unregistered Notes; and
WHEREAS, in connection with consummation of the Exchange Offer
(as defined in the Terms Supplement), the Issuer, the Initial Co-Owner Eligible
Lender Trustee and the Indenture Trustee now desire to amend and restate the
First Restated Indenture in this Base Indenture and the Terms Supplement hereto
to secure the payment of the principal of and interest and any Carryover
Interest on the Registered Notes and the Unregistered Notes, if any, which were
not exchanged for Registered Notes;
NOW THEREFORE, THIS INDENTURE OF TRUST WITNESSETH:
That (a)(i) in order to secure (A) the payment of the fees and
expenses of the Indenture Trustee hereunder in accordance with the provisions of
this Indenture and (B) the payment of the fees and expenses of each Eligible
Lender Trustee hereunder in accordance with the provisions of this Indenture;
and (ii) in order to secure (A) the payment of the principal of and interest and
any Carryover Interest on, the Senior Notes according to their respective tenor,
purport and effect and (B) the payment of any Senior Issuer Exchange Payment and
the performance and observance of all covenants and conditions contained in any
Senior Exchange Agreement; and (iii) in order to secure (A) the payment of the
principal of and interest and any Carryover Interest on the Subordinate Notes
according to their respective tenor, purport and effect and (B) the payment of
any Subordinate Issuer Exchange Payment and the performance and observance of
all covenants and conditions contained in any Subordinate Exchange Agreement;
and (iv) in order to secure the performance and observance of all the covenants
and conditions contained in this Indenture, in the Notes and in any Exchange
Agreement; (b) for and in consideration of (i) the mutual covenants contained in
this Indenture, (ii) the acceptance by the
8
9
Indenture Trustee of the trusts hereby created, and (iii) the execution and
delivery of any Exchange Agreement by the Issuer and an Exchange Counterparty,
and the acknowledgment thereof by the Indenture Trustee; (c) each of the Issuer
and the Initial Co-Owner Eligible Lender Trustee has executed and delivered this
Indenture and by these presents does hereby convey, transfer, assign, pledge,
and grant a valid and binding lien on and a security interest in, unto the
Indenture Trustee, its successor or successors and its or their assigns forever,
(i) for the benefit of the Indenture Trustee and each Eligible Lender Trustee
with respect to their respective fees and expenses, all rights, title and
interest of the Issuer and the Initial Co-Owner Eligible Lender Trustee in and
to (A) the Trust Estate, (B) the Transfer and Sale Agreement and (C) the
Ancillary Agreements, whether now owned or hereafter acquired, and all other
rights hereinafter granted for the further securing of the fees and expenses of
the Indenture Trustee, each Eligible Lender Trustee; (ii) for the equal and
ratable benefit (except as otherwise provided in Section 8.3 hereof) of the
Holders of the Senior Notes, all rights, title and interest of the Issuer and
the Initial Co-Owner Eligible Lender Trustee in and to (A) the Trust Estate, (B)
the Transfer and Sale Agreement, including, all other General Intangibles of the
Issuer and the Initial Co-Owner ELT related to the Transfer and Sale Agreement
and the transactions contemplated thereby, and (C) the Ancillary Agreements,
whether now owned or hereafter acquired, and all other rights hereinafter
granted for the further securing of the Senior Notes; and (iii) for the equal
and ratable benefit (except as otherwise provided in Section 8.3 hereof) of a
Senior Exchange Counterparty, if any, on a parity with Holders of the Senior
Notes, all rights, title and interest of the Issuer and the Initial Co-Owner
Eligible Lender Trustee in and to (A) the Trust Estate, (B) the Transfer and
Sale Agreement and (C) the Ancillary Agreements, whether now owned or hereafter
acquired, and all other rights hereinafter granted for the further securing of
any Senior Exchange Agreement; and (iv) for the equal and ratable benefit
(except as otherwise provided in Section 8.3 hereof) of the Holders of the
Subordinate Notes, subordinate, however, to (A) that of the Holders of the
Senior Notes and (B) that of a Senior Exchange Counterparty, all rights, title
and interest of the Issuer and the Initial Co-Owner Eligible Lender Trustee in
and to (C) the Trust Estate, (D) the Transfer and Sale Agreement and (E) the
Ancillary Agreements, whether now owned or hereafter acquired, and all other
rights hereinafter granted for the further securing of the Subordinate Notes;
and (v) for the equal and ratable benefit (except as otherwise provided in
Section 8.3 hereof) of any Exchange Counterparty in addition to each Senior
Exchange Counterparty, if any, whether on a parity with or subordinate to the
Holders of the Senior Notes and any Senior Exchange Counterparty, all rights,
title and interest of the Issuer and the Initial Co-Owner Eligible Lender
Trustee in and to (A) the Trust Estate, (B) the Transfer and Sale Agreement and
(C) the Ancillary Agreements, whether now owned or hereafter acquired, and all
other rights hereinafter granted for the further securing of the Exchange
Agreement of such Exchange Counterparty;
TO HAVE AND TO HOLD the same unto the Indenture Trustee and
its successor or successors and its or their assigns forever;
IN TRUST, NEVERTHELESS, upon the terms and trusts herein set
forth, to secure the payment of the principal of the Notes and the interest and
any Carryover Interest thereon, and to secure the payment of any Issuer Exchange
Payment, and to secure also the observance and performance of all the terms,
provisions, covenants and conditions of this
9
10
Indenture, and for the equal and ratable (except as otherwise provided in this
Indenture) benefit and security of all and singular the Holders and any Exchange
Counterparty, without preference, priority or distinction as to lien or
otherwise, of any one of such Notes over any other of such Notes or over any
Issuer Exchange Payment or as among principal and interest and Carryover
Interest, or of any one Exchange Agreement over any other Exchange Agreement or
over any Notes, except as otherwise provided in this Indenture; and it is hereby
mutually covenanted and agreed that the terms and conditions upon which any
Exchange Agreement is to be executed, delivered and accepted by the Issuer and
the Exchange Counterparty and acknowledged by the Indenture Trustee are as set
forth in such Exchange Agreement, and it is hereby further mutually covenanted
and agreed that the terms and conditions upon which such Notes are executed,
authenticated, issued, delivered, secured and accepted by all Persons who shall
from time to time be or become the Holders thereof and upon which any Exchange
Agreement is to be secured, and the trusts and conditions upon which the Trust
Estate is to be held and disbursed, are as set forth in this Indenture:
10
11
ARTICLE I
Definitions and Other Provisions of General Application
-------------------------------------------------------
SECTION 1.1 DEFINITIONS. Unless the context shall
clearly indicate some other meaning or may otherwise require, the terms defined
in this Section 1.1 shall, for all purposes of this Indenture and of any
indenture or other instrument amendatory hereof or supplemental hereto, have the
meanings herein specified:
"ACCOUNT" shall mean any of the accounts established by this
Indenture.
The terms "ACQUIRE," "ACQUIRING," or "ACQUISITION" when used
in connection with the acquisition or making, respectively, of Student Loans by
the Issuer or the Indenture Trustee shall mean and specifically include the
acquisition directly, or indirectly through an Eligible Lender Trustee, of such
Student Loans.
"ACQUISITION FUND" shall mean the Fund established by Section
5.3 hereof.
"ADMINISTRATION AGREEMENT" shall mean the administration
agreement, between the Issuer and the Administrator providing for, among other
things, the administration of this Indenture on behalf of the Issuer.
"ADMINISTRATOR" shall mean the administrator, and its
successors or assigns, appointed by the Issuer in the Administration Agreement
to provide for, among other things, the administration of this Indenture on
behalf of the Issuer, such administrator on the Date of Issuance being Student
Loan Funding Resources, Inc., an Ohio for-profit corporation.
"ADVANCES" shall mean deposits to the Trust Estate made by the
Issuer or the Original Issuer to the Note Payment Account hereunder with respect
to anticipated future collections on the Financed Student Loans.
"ADVERSELY AFFECT" shall mean, when used with respect to any
rating on a Series of Notes, to cause the reduction or withdrawal of such
rating.
"ANCILLARY AGREEMENTS" shall mean the Auction Agent Agreement,
the Broker-Dealer Agreement, the Calculation Agent Agreement, and the
Registration Rights Agreement.
"AUTHENTICATING AGENT" shall mean any bank, trust company or
other financial institution appointed by the Issuer as authenticating agent for
the Indenture Trustee hereunder and as depositary under the Authenticating Agent
Agreement, or any successor or successors thereto appointed pursuant to Section
7.11 hereof or pursuant to an Authenticating Agent Agreement, as the case may
be, with respect to such functions collectively or separately provided, however,
that if no Authenticating Agent has been appointed under this Indenture,
provisions relating to the Authenticating Agent shall be read as applying to the
Indenture Trustee.
11
12
"AUTHENTICATING AGENT AGREEMENT" shall mean an Authenticating
Agent Agreement among the Issuer, the Indenture Trustee and the Authenticating
Agent, as depositary, or any similar agreement hereafter entered into by the
Issuer with respect to a Series of Notes, in each case as originally executed
and as from time to time amended or supplemented in accordance with the terms
thereof and with this Indenture.
"AUTHORIZED DENOMINATIONS" shall have the meaning given such
term in the Terms Supplement.
"AUTHORIZED OFFICER" shall mean (i) when used with reference
to the Original Issuer, the president, the secretary, the treasurer, any
assistant treasurer, any vice president or other person designated by Management
Committee Resolution to act in such capacity under the terms of the Original
Indenture and (ii) when used with reference to the Issuer shall mean any vice
president, trust officer or other officer of the Co-Owner Trustee authorized to
sign the document or take the action in question on behalf of the Issuer.
"AVAILABLE FUNDS" shall mean, with respect to any Collection
Period, the excess of (a) the sum, without duplication, of the following amounts
with respect to such Collection Period: (i) all collections received by the
Indenture Trustee on the Financed Student Loans (including any Guarantee
Payments received with respect to the Financed Student Loans) during such
Collection Period; (ii) any payments, including, without limitation, Interest
Subsidy Payments and Special Allowance Payments, received by each Eligible
Lender Trustee during such Collection Period with respect to Financed Student
Loans; (iii) all proceeds from any sales of Financed Student Loans during such
Collection Period; (iv) any payments of or with respect to interest received by
the Indenture Trustee during such Collection Period with respect to a Financed
Student Loan for which a Realized Loss was previously allocated; (v) the
aggregate Purchase Amounts received for those Financed Student Loans purchased
by the Indenture Trustee during the related Collection Period; (vi) the
aggregate amounts, if any, received from the Issuer or the Indenture Trustee as
reimbursement of non-guaranteed or uninsured interest amounts (which shall not
include, with respect to Financed Student Loans, the portion of such interest
amounts for which the Guarantee Agency did not have an obligation to make a
Guarantee Payment), or lost Interest Subsidy Payments and Special Allowance
Payments, with respect to the Financed Student Loans; (vii) Counterparty
Exchange Payments, (viii) Advances received and (ix) Investment Earnings for
such Collection Period OVER (b) amounts received by the Issuer in connection
with balance reconciliations required by virtue of Student Loan consolidations
for such Collection Period; provided, however, that Available Funds shall
exclude (1) all payments and proceeds of any Financed Student Loans the Purchase
Amount of which has been included in Available Funds for a prior Collection
Period, which payments and proceeds shall be paid to the Issuer, (2) amounts
used to reimburse the Issuer for Advances or any other amounts advanced by the
Issuer on a voluntary basis with respect to Guarantee Payments or Interest
Subsidy Payments applied for but not received as of the end of the Collection
Period immediately preceding the date such Advance is made, and (3) amounts
which are paid to the Issuer pursuant to the Indenture.
"BASE INDENTURE" shall mean this Second Amended and Restated
Indenture of Trust, dated as of June 1, 1999, exclusive of the Terms Supplement,
but as from time to time
12
13
amended or supplemented by Supplemental Indentures.
"BOOK-ENTRY SYSTEM" shall have the meaning given such term in
the Terms Supplement.
"BUSINESS DAY" shall mean any day on which the Indenture
Trustee and the Authenticating Agent, if any, at their respective addresses set
forth in or for purposes of this Indenture, are open for commercial banking
business and on which the New York Stock Exchange is open.
"CALCULATION AGENT" shall have the meaning given such term in
the Terms Supplement.
"CALCULATION AGENT AGREEMENT" shall have the meaning given
such term in the Terms Supplement.
"CARRYOVER INTEREST" shall mean the difference between the
interest that would have accrued on a Series of Notes at the Formula Rate during
a Collection Period and the interest accrued at the Net Loan Rate during such
Collection Period, together with interest thereon at the Formula Rate from the
Distribution Date on which such Carryover Interest is due until paid, but in no
event greater than the maximum rate permitted by law.
"CASH FLOW STATEMENT" shall mean a report or reports prepared
by the Issuer with respect to the period covered by the Cash Flow Statement,
which period shall extend from the date of the Cash Flow Statement to the latest
maturity of the Notes then Outstanding, showing, (i) all Available Funds
expected to be received during such period, (ii) the application of all such
Available Funds in accordance with this Indenture, (iii) the resulting periodic
balances and Parity Percentages, and (iv) that under all assumptions and
scenarios used for the cash flows accompanying such Cash Flow Statement, (a)
anticipated Available Funds will be at least sufficient to pay the principal of
and interest on the Notes when due and all other amounts payable under this
Indenture when due and (b) a Parity Percentage of at least 101% will be
maintained at all times, including, without limitation, on each Distribution
Date.
"CERTIFICATE", "DIRECTION", "INSTRUCTION", "ORDER", "REQUEST"
or "REQUISITION" of the Original Issuer or the Issuer, as the case may be, shall
mean a certificate, direction, instruction, order, request or requisition which
shall, unless otherwise specifically provided herein, be in writing and which is
signed in the name of the Original Issuer or the Issuer, respectively, by an
Authorized Officer.
"CO-OWNER TRUSTEE" shall mean Firstar Bank, National
Association, not in its individual capacity, but solely in its capacity as
co-owner trustee under the Delaware Trust Agreement.
"COLLECTION ACCOUNT" shall mean the Account so designated and
established in the Collection Fund by Section 5.5 hereof.
13
14
"COLLECTION FUND" shall mean the Fund established by Section
5.5 hereof.
"COLLECTION PERIOD" shall have the meaning given such term in
the Terms Supplement.
"COMMISSION" shall mean the Securities and Exchange
Commission, as from time to time constituted, created under the Securities
Exchange Act of 1934, as amended, or, if at any time after the execution of this
Indenture such Commission is not existing and performing the duties now assigned
to it under the Trust Indenture Act, then the body performing such duties at
such time.
"CONSOLIDATION LOANS" shall mean Student Loans governed by
Section 428C of the Higher Education Act which are Financed by the Issuer, but
excluding any such loans which are made by a Seller and purchased by the Issuer.
"CONTRACT OF GUARANTEE" shall mean a contract between a
Guarantee Agency and a Lender providing for, or a certificate or other evidence
of, the Guarantee of Student Loans.
"COSTS OF ISSUANCE" shall mean all items of expense allocable
to establishment of the Program and the authorization, issuance, sale and
delivery of the related Notes, or any obligations of the Issuer the proceeds of
which are used in whole or in any part directly, or indirectly through an
Eligible Lender Trustee, to acquire Financed Student Loans under this Indenture,
including without limitation costs of planning and feasibility studies, costs of
obtaining governmental registrations, qualifications and regulatory rulings and
approvals, costs of financial advisory, legal, accounting and management
services and services of other consultants and professionals and related
charges, fees and disbursements, costs of preparation and reproduction of
documents, costs of preparation and printing of any offering document relating
to the Notes, advertising and printing costs, filing and recording fees, any
initial fees and charges of the Indenture Trustee, each Eligible Lender Trustee,
the Calculation Agent, the Auction Agent, any Broker-Dealer, any market agent
and any Authenticating Agent, Rating Agency fees, costs of preparation,
execution, transportation and safekeeping of the Notes, and any other costs,
charges or fees in connection with the issuance of the Notes.
"COUNTERPARTY EXCHANGE PAYMENT" shall mean a payment due to
the Issuer from an Exchange Counterparty pursuant to the applicable Exchange
Agreement.
"CUT-OFF DATE" shall mean December 31, 1998, the date on or
after which principal and interest payments on the Financed Student Loans are to
be included in the Trust Estate.
"DATE OF ISSUANCE" shall mean with respect to a Series of
Notes, the date of the initial issuance and delivery of such Series of Notes as
set forth in the definition thereof in the Terms Supplement related to such
Series of Notes.
The term "DAY" shall mean any calendar day, whether or not a
Business Day.
14
15
"DELAWARE TRUST" shall mean the common law (as opposed to
statutory) trust created under the laws of the State of Delaware by the Delaware
Trust Agreement and designated "Student Loan Funding 1998-A/B Trust", provided,
however, that references in the Indenture to the "Student Loan Funding 1998-A/B
Trust" or to the "Delaware Trust" shall mean the Co-Owner Trustee, not in its
individual capacity, but solely as Co-Owner Trustee of the Delaware Trust, and
its lawful successors and assigns on behalf of the Trust.
"DELAWARE TRUST AGREEMENT" shall mean the Trust Agreement,
dated as of March 1, 1999, among the Original Issuer, the Delaware Trustee (as
defined therein) and the Co-Owner Trustee, and acknowledged and agreed to by the
Initial Co-Owner Eligible Lender Trustee.
"DEPARTMENT OF EDUCATION" shall mean the U.S. Department of
Education.
"DEPOSITORY" shall have the meaning given such term in the
Terms Supplement.
"DIRECTING NOTES" shall mean, so long as any Series of Senior
Notes are Outstanding the Senior Notes, and thereafter, the Subordinate Notes.
The phrase "DIRECTLY OR INDIRECTLY" shall mean, with respect
to the making, acquisition or Financing of Student Loans, the making,
acquisition or Financing of Student Loans by the Issuer or by an Eligible Lender
Trustee for the benefit of the Issuer, respectively.
"DISTRIBUTION DATE" shall have the meaning given such term in
the Terms Supplement.
"ELIGIBLE INVESTMENTS" shall have the meaning set forth in
Section 5.7 hereof.
"ELIGIBLE LENDER TRUST AGREEMENT" shall mean, collectively,
(i) the Eligible Lender Trust Agreement dated as of March 15, 1999 by and
between the Issuer and the Initial Co-Owner Eligible Lender Trustee, as from
time to time amended or supplemented and (ii) any other eligible lender trust
agreement between the Issuer and an eligible lender trustee holding legal title
to any Financed Student Loans, in each case as originally executed and as from
time to time amended or supplemented.
"ELIGIBLE LENDER TRUSTEE" shall mean (i) the Initial Co-Owner
Eligible Lender Trustee and/or (ii) any other eligible lender trustee under its
respective Eligible Lender Trust Agreement.
"EVENT OF DEFAULT" shall have the meaning set forth in Section
8.1 hereof.
"EXCESS SURPLUS ACCOUNT" shall mean the Account so designated
and established in the Collection Fund by Section 5.5 hereof.
"EXCHANGE AGREEMENT" shall mean an interest rate exchange
agreement between
15
16
the Issuer and an Exchange Counterparty, as originally executed and as amended
or supplemented, or other interest rate hedge agreement between the Issuer and
an Exchange Counterparty, as originally executed and as amended or supplemented,
which agreement shall be designated as a Senior Exchange Agreement or a
Subordinate Exchange Agreement.
"EXCHANGE COUNTERPARTY" shall mean any Person with whom the
Issuer shall, from time to time, enter into an Exchange Agreement.
"EXCHANGE COUNTERPARTY GUARANTEE" shall mean a guarantee in
favor of the Issuer given in connection with the execution and delivery of an
Exchange Agreement hereunder, which guarantee shall be designated a Senior
Exchange Counterparty Guarantee or Subordinate Exchange Counterparty Guarantee
consistent with the Exchange Agreement to which it relates.
"EXPECTED INTEREST COLLECTIONS" shall mean, with respect to
any Collection Period, the sum of (i) the amount of interest accrued, net of
amounts required to be paid to the Department of Education or to be repaid to
Guarantee Agencies, with respect to the Financed Student Loans in the Trust
Estate for such Collection Period (whether or not such interest is actually
paid), (ii) all Interest Subsidy Payments and Special Allowance Payments
pursuant to claims submitted for such Collection Period (whether or not actually
received), net of amounts required to be paid to the Department of Education,
with respect to Financed Student Loans in the Trust Estate, to the extent not
included in (i) above, (iii) the net of any Counterparty Exchange Payments less
any Issuer Exchange Payments to be made on the related Distribution Date, and
(iv) Investment Earnings on the amounts on deposit allocable to the Trust Estate
with respect to such Collection Period prior to the related Distribution Date.
"EXPENSE ACCOUNT" shall mean the Account so designated and
established in the Collection Fund by Section 5.5 hereof.
"FFEL PROGRAM" shall mean the Federal Family Education Loan
Program established by the Higher Education Act pursuant to which loans are made
to borrowers pursuant to certain guidelines, and the repayment of such loans is
guaranteed by a Guarantee Agency, and any predecessor or successor program.
"FFELP LOANS" shall mean Student Loans made under the FFEL
Program.
"FINANCED" in the case of Student Loans shall refer to Student
Loans made or acquired directly, or indirectly through an Eligible Lender
Trustee, with the proceeds of the Notes or moneys in the Acquisition Fund or the
Collection Account, or upon the exchange of Student Loans pursuant to Section
5.4 hereof, and included in the Student Loan Portfolio Fund, including, without
limitation, all Student Loans identified on the books of the Issuer by a
designation of Lender Identification Number 829626 and any one or more of the
following: Client Code 606 and 706; Bond ID 98PP; Subportfolio Number 850626;
Branch Numbers 7 and 8; Branch Number 9; and Bond ID 01; and to "FINANCE" or
"FINANCING" in the case of Loans shall mean to make or acquire or the making or
acquisition of, respectively, directly, or indirectly through an Eligible Lender
Trustee, Student Loans with such moneys or upon any such exchange
16
17
or transfer.
"FINANCED STUDENT LOANS" shall mean Student Loans which are
Financed and are evidenced solely by promissory notes and applications related
thereto.
"FIRST RESTATED BASE INDENTURE" shall mean the First Amended
and Restated Indenture of Trust, dated as of March 15, 1999, among the Issuer,
the Initial Co-Owner Eligible Lender Trustee and the Indenture Trustee,
exclusive of the First Restated Terms Supplement.
"FIRST RESTATED INDENTURE" shall mean collectively, the First
Restated Base Indenture and the First Restated Terms Supplement.
"FIRST RESTATED TERMS SUPPLEMENT" shall mean the First Amended
and Restated Terms Supplement to the First Amended and Restated Indenture of
Trust, dated as of March 15, 1999, among the Issuer, the Initial Co-Owner
Eligible Lender Trustee and the Indenture Trustee.
"FISCAL YEAR" shall mean the fiscal year of the Issuer, which
is, as of the date of execution and delivery of this Indenture, each
twelve-month period commencing on July 1 and ending on the next succeeding June
30.
"FITCH" shall mean Fitch IBCA, Inc., and its successors and
assigns.
"FORMULA RATE" shall have the meaning given such term in the
Terms Supplement.
"FUND" shall mean any of the Funds established by this
Indenture.
"GENERAL INTANGIBLES" shall have the meaning given such term
by the Uniform Commercial Code as adopted by the State of Ohio.
"GUARANTEE" or "GUARANTEED" shall mean, with respect to a
Student Loan, the guarantee, by a Guarantee Agency which has entered into a
federal reimbursement agreement and a supplemental federal reimbursement
agreement with the Secretary of Education, of at least ninety-eight percent
(98%), or such lower percentage as may be approved by the Rating Agencies then
rating the Outstanding Notes, of the principal of and accrued interest on such
Student Loan thereafter, and the coverage of such Student Loan by a federal
reimbursement agreement and a supplemental federal reimbursement agreement
providing, among other things, for reimbursement to a Guarantee Agency for
losses incurred by it on defaulted Student Loans guaranteed by such Guarantee
Agency at up to the maximum amount of the principal thereof and accrued interest
thereon provided for in the Higher Education Act.
"GUARANTEE PAYMENT" shall mean any payment made by a Guarantee
Agency pursuant to a Contract of Guarantee in respect of a Financed Student
Loan.
"GUARANTEE AGENCIES" shall mean the agencies set forth on
Schedule I hereto and any other agency, and the successors and assigns of each,
whether a governmental body or private corporation or other entity, approved by
the Rating Agencies then rating the Outstanding
17
18
Notes and providing a Guarantee acceptable to the Issuer; provided, however,
that no agency set forth on Schedule I shall be qualified as a Guarantee Agency
of a Financed Student Loan unless an Eligible Lender Trustee or the Issuer, as
applicable, and such agency shall have entered into a guarantee agreement with
respect thereto.
"HIGHER EDUCATION ACT" shall mean Title IV, Part B of the
Higher Education Act of 1965, as amended, or any successor federal act, and all
regulations, directives and guidelines promulgated thereunder from time to time.
"HOLDERS" or "Noteholders" shall mean, collectively, the
registered owners of the Notes or the duly authorized attorneys-in-fact,
representatives or assignees of such persons.
"INDENTURE" shall mean this Base Indenture, as supplemented by
the Terms Supplement, and as from time to time amended or supplemented by
Supplemental Indentures.
"INDENTURE TRUSTEE" shall mean Firstar Bank, National
Association, not in its individual capacity, but solely as trustee under this
Indenture, and any successor or successors thereto which may at any time be
appointed or substituted in its place pursuant to this Indenture.
"INITIAL CO-OWNER ELIGIBLE LENDER TRUSTEE" shall mean Firstar
Bank, National Association, not in its individual capacity, but solely as
eligible lender trustee under the Eligible Lender Trust Agreement, dated as of
March 15, 1999, between the Issuer and itself.
"INITIAL DISTRIBUTION DATE" shall mean, as to each Series of
Notes, the date set forth in the definition thereof in the Terms Supplement for
such Series of Notes.
"INITIAL INTEREST DETERMINATION DATE" shall mean, as to each
Series of Notes, the date set forth in the definition thereof in the Terms
Supplement for such Series of Notes.
"INITIAL POOL BALANCE" shall mean the Pool Balance of the
Financed Student Loans as of the Cut-off Date.
"INITIAL PURCHASERS" shall mean ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., New
York, New York, NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities LLC, Charlotte, North
Carolina, and Fifth Third/The Ohio Company, Columbus, Ohio.
"INSIDER" shall mean an entity referred to or described in
Section 101(31) of the United States Bankruptcy Code (assuming for this purpose
that the Issuer or any Affiliate of the Issuer, as applicable, is a debtor) and
any limited partner or limited liability company member thereof.
"INTEREST DETERMINATION DATE" shall mean with respect to each
Series of Notes, (i) the Initial Interest Determination Date and thereafter (ii)
the day set forth in the Terms Supplement related to such Series of Notes;
provided, however, that if such day is not a Business Day, then the next
succeeding Business Day.
18
19
"INTEREST SUBSIDY PAYMENTS" shall mean the interest subsidy
payments in respect of eligible Student Loans paid by the Secretary of Education
pursuant to Section 428 of the Higher Education Act during the period prior to
the time that such Student Loan enters repayment or during grace or deferment
periods, or similar subsidies authorized from time to time by federal law or
regulation.
"INTERNAL REVENUE CODE" shall mean the Internal Revenue Code
of 1986, as amended, and the regulations promulgated thereunder.
"INVESTMENT EARNINGS" means, with respect to any Distribution
Date, the investment earnings (net of losses and investment expenses) on amounts
on deposit in the Funds and Accounts hereunder to be deposited into the
Collection Fund on or prior to such Distribution Date.
"ISSUER" shall mean the Delaware Trust, provided, however,
that references in this Base Indenture to the name "Student Loan Funding
1998-A/B Trust" or to the terms "Delaware Trust" or the "Issuer" shall mean the
Co-Owner Trustee, not in its individual capacity, but solely as Co-Owner Trustee
of the Delaware Trust, and its lawful successors and assigns on behalf of the
Trust.
"ISSUER EXCHANGE PAYMENT" shall mean a payment due to an
Exchange Counterparty from the Issuer pursuant to the applicable Exchange
Agreement (excluding, however, payments to an Exchange Counterparty in respect
of any early termination date, as defined in the applicable Exchange Agreement).
"LEGAL FINAL MATURITY" shall mean with respect to a Series of
Notes, the date set forth in the definition thereof in the Terms Supplement
related to such Series of Notes.
"LENDER" shall mean any "eligible lender" as defined in the
Higher Education Act and qualified to participate as a seller of Student Loans
to the Issuer.
"LOAN POOL" shall mean the Financed Student Loans purchased
with the proceeds of the Notes or with moneys in Collection Account.
The terms "MAKE" or "MAKING" when used in connection with the
making of Student Loans by the Issuer shall mean and specifically include the
making, directly or indirectly through an Eligible Lender Trustee, of such
Student Loans.
"MANAGEMENT COMMITTEE" shall mean the Management Committee of
the Original Issuer.
"MANAGEMENT COMMITTEE RESOLUTION" shall mean a copy of a
resolution certified by the secretary or assistant secretary of the Original
Issuer to have been duly adopted by the Management Committee and to be in full
force and effect on the date of such certification, and delivered to the
Indenture Trustee.
19
20
"MASTER SERVICER" shall mean initially Student Loan Funding
Resources, Inc., an Ohio corporation.
"MASTER SERVICING AGREEMENT" shall mean the Master Servicing
Agreement, dated as of March 15, 1999, by and between the Issuer and Master
Servicer, pursuant to which the Master Servicer covenants and agrees to provide
for the servicing of the Financed Student Loans by the Servicers.
The term "MATERIALLY," as used in Article VI hereof, shall
mean any effect which will result in a Holder not being fully and timely paid
principal of and interest on such Holder's Notes.
"MONTHLY DISTRIBUTION DATE" shall have the meaning given such
term in the Terms Supplement.
"MOODY'S" shall mean ▇▇▇▇▇'▇ Investors Service, Inc., a
Delaware corporation, and its successors and assigns.
"NET LOAN RATE" shall have the meaning given such term in the
Terms Supplement.
"NOTEHOLDER" or "HOLDER OF A NOTE" shall mean any person who
shall be the registered owner of any Note or the duly authorized
attorney-in-fact, representative or assignee of such person.
"NOTE PURCHASE AGREEMENT" shall mean the note purchase
agreement among the Issuer and the Initial Purchasers of the Unregistered Notes.
"NOTES" shall mean the Senior Notes and the Subordinate Notes.
"OFFICER'S CERTIFICATE" shall mean a document signed by an
Authorized Officer of the Original Issuer or the Issuer either attesting to or
acknowledging the circumstances, representations or other matters therein stated
or set forth or directing that an action be taken by the person to whom such
document is addressed.
"ORIGINAL BASE INDENTURE" shall mean the Indenture of Trust,
dated as of December 1, 1998, among the Original Issuer, the Original Initial
ELT and the Indenture Trustee, exclusive of the Original Terms Supplement.
"ORIGINAL INDENTURE" shall mean collectively, the Original
Base Indenture and the Original Terms Supplement.
"ORIGINAL INITIAL ELT" shall mean Firstar Bank, National
Association (successor by merger to Star Bank, National Association), not in its
individual capacity, but solely as eligible lender trustee for the benefit of
the Original Issuer.
"ORIGINAL ISSUER" shall mean Student Loan Funding LLC, a
Delaware limited
20
21
liability company.
"ORIGINAL TERMS SUPPLEMENT" shall mean the Terms Supplement to
the Indenture of Trust, dated as of December 1, 1998, among the Original Issuer,
the Original Initial ELT and the Indenture Trustee.
"OUTSTANDING" when used with respect to Notes shall refer to
any Notes executed, authenticated, issued and delivered under this Indenture
other than Notes for the transfer or exchange of or in lieu of which other Notes
shall have been authenticated and delivered by the Indenture Trustee pursuant to
this Indenture and other than Notes which at the time are deemed not to be
Outstanding under this Indenture by reason of the operation and effect of
Section 10.2 hereof or the limitation of Section 8.3 hereof.
"PARITY PERCENTAGE" shall mean, as of any Distribution Date or
other date, the fraction expressed as a percentage, the numerator of which is
the sum, without duplication, of (i) the Pool Balance plus accrued interest
thereon due from borrowers, accrued interest which is expected to be
capitalized, and accrued Interest Subsidy Payments and Special Allowance
Payments, if any, as of the end of the preceding Collection Period, and (ii) all
amounts allocable to the Notes on deposit (including any accrued interest
thereon) in the Acquisition Fund, the Collection Fund and the Reserve Fund, if
any, as of the end of such Collection Period (adjusted for payments made on such
Distribution Date) and the denominator of which is the sum of (a) the
Outstanding principal amount of the Notes (after payment thereon on such
Distribution Date) and accrued interest thereon and (b) accrued and unpaid
Program Operating Expenses.
"PARITY PERCENTAGE LIMITATION" shall have the meaning given
such term in the Terms Supplement.
"PARITY PERCENTAGE PAYMENT" shall have the meaning given such
term in the Terms Supplement.
"PERSON" or words importing persons shall mean firms,
associations, partnerships, limited liability companies, joint ventures,
societies, estates, trusts, corporations, public or governmental bodies, other
legal entities and natural persons.
"POOL BALANCE" shall mean as of the end of a Collection
Period, an amount equal to the aggregate principal balance of the Financed
Student Loans (including accrued interest thereon capitalized through such date)
as of the end of such Collection Period, after giving effect to the following,
without duplication: (i) all payments in respect of principal received by the
Indenture Trustee during such Collection Period from or on behalf of borrowers
and Guarantee Agencies and, with respect to certain payments on certain Financed
Student Loans, the Secretary of Education and (ii) the principal portion of all
Purchase Amounts received by the Indenture Trustee for such Collection Period.
"PRINCIPAL DISTRIBUTION AMOUNT" shall mean the principal
amount of a Series of Notes calculated to be distributed on a Distribution Date.
21
22
"PRINCIPAL FACTOR" shall have the meaning given such term in
the Terms Supplement.
"PROGRAM" shall mean the Issuer's program of making or
Financing Student Loans pursuant to this Indenture.
"PROGRAM EXPENSE REQUIREMENT" shall mean, as of any date of
calculation, such amount as may then be necessary to be accumulated in the
Expense Account for payment, in accordance with Section 5.5.4 hereof, of Program
Operating Expenses due or to become due during the month beginning on the first
day of the next succeeding calendar month as provided in Section 6.13 hereof.
"PROGRAM OPERATING EXPENSES" shall mean, with respect to the
Notes, all items of expense allocable to the operation of the Program, including
(i) fees and expenses of and any other amounts payable to the Indenture Trustee
and the Authenticating Agent, if any, and any fees charged by a Depository; (ii)
the fees and expenses of and any other amounts payable to the Calculation Agent,
the Auction Agent, Broker-Dealers, any market agent or other agent in connection
with the Notes under their respective agreements; (iii) fees and expenses of and
any other amounts payable to the Servicers, each Eligible Lender Trustee and any
bank providing lock-box or similar services in connection with Financed Student
Loans and Servicing Development Fees; (iv) the fees and expenses incurred by or
on behalf of the Issuer, including, but not limited to, the fees and expenses of
the Master Servicer under the Master Servicing Agreement and the Administrator
under the Administration Agreement, in the administration of the Program under
the Higher Education Act and any other agreement or legal requirement affecting
the administration of the Program, costs of legal, accounting, auditing,
management, consulting, banking and financial advisory services and expenses,
costs of salaries, supplies, utilities, mailing, labor, materials, office rent,
maintenance, furnishings, equipment, machinery, apparatus and insurance
premiums, Costs of Issuance not paid from proceeds of Notes; and (v) other
reasonable and proper expenses, including both operating expenses and capital
expenditures incurred or to be incurred in connection with the operation of the
Program and with respect to item (iv) above, any other similar program of the
Issuer.
The term "PURCHASE" when used in connection with the purchase
of Student Loans by the Issuer shall mean and specifically include the purchase
directly, or indirectly through an Eligible Lender Trustee, of such Student
Loans.
"PURCHASE AGREEMENTS" shall mean the Amended and Restated Loan
Sale Agreement, made and entered into as of the 18th day of December, 1998, by
and among InTuition Holdings, Inc., NHELP, Inc., Union Bank and Trust Company,
solely in its capacity as trustee of the InTuition Student Loan Trust II and
Student Loan Funding Resources, Inc., and any other Student Loan Purchase
Agreements with Sellers, for purposes of the Program (in whole or in part), in
each case as from time to time amended or supplemented in accordance with the
terms thereof and with this Indenture, and in each case only to the extent that
each such Purchase Agreement covers Financed Student Loans.
22
23
"PURCHASE AMOUNT" shall mean, as of the end of any Collection
Period, the principal amount of a Financed Student Loan (including any interest
required to be capitalized through such date), together with accrued but unpaid
interest thereon.
"RATING AGENCY" shall mean ▇▇▇▇▇'▇ and Fitch, as long as they
maintain a rating on the Outstanding Notes, and the successor of either or, if
both no longer exist and have no successors, then any other rating agency then
rating the Outstanding Notes.
"REALIZED LOSS" shall mean, for each Financed Student Loan
submitted to a Guarantee Agency for a Guarantee Payment, the excess, if any, of
(i) the unpaid principal balance of such Financed Student Loan on the date it
was first submitted to a Guarantee Agency for a Guarantee Payment over (ii) all
amounts received on or with respect to principal on such Financed Student Loan
up through the earlier to occur of (A) the date a related Guarantee Payment is
made or (B) the last day of the Collection Period occurring 12 months after the
date the claim for such Guarantee Payment is first denied.
"RECORD DATE" shall have the meaning given such term in the
Terms Supplement.
"REGISTRAR" shall mean the Indenture Trustee, unless and until
a separate Person performing the functions of a registrar is appointed hereunder
pursuant to a Supplemental Indenture.
"REGISTERED SENIOR NOTES" shall mean the Registered Senior
Notes, as defined in the Terms Supplement.
"REGISTERED SUBORDINATE NOTES" shall mean the Registered
Subordinate Notes, as defined in the Terms Supplement.
"RESERVE FUND" shall mean the Fund established by Section 5.2
hereof.
"SECRETARY OF EDUCATION" shall mean the Secretary of
Education, Department of Education of the United States, or any other officer,
board, body, commission or agency succeeding to the functions thereof under the
Higher Education Act.
"SECURITIES ACT" shall mean the United States Securities Act
of 1933, as amended.
"SELLER" shall mean a Lender or other party from which the
Original Issuer purchased or the Issuer is purchasing or has purchased or agreed
to purchase Student Loans pursuant to a Purchase Agreement with such Lender or
other party.
"SENIOR EXCHANGE AGREEMENT" shall mean an Exchange Agreement
on a parity with a Series of Senior Notes and designated a Senior Exchange
Agreement under this Indenture.
"SENIOR EXCHANGE COUNTERPARTY" shall mean the Exchange
Counterparty under a Senior Exchange Agreement.
"SENIOR EXCHANGE COUNTERPARTY GUARANTEE" shall mean an
Exchange Counterparty
23
24
Guarantee applicable to a Senior Exchange Agreement.
"SENIOR ISSUER EXCHANGE PAYMENT" shall mean an Issuer Exchange
Payment under a Senior Exchange Agreement.
"SENIOR NOTES" shall mean, collectively, all Registered Senior
Notes and Unregistered Senior Notes.
"SENIOR PARITY PERCENTAGE" shall mean, as of any Distribution
Date or other date, the fraction expressed as a percentage, the numerator of
which is the sum, without duplication, of (i) the Pool Balance plus accrued
interest thereon due from borrowers, accrued interest which is expected to be
capitalized, and accrued Interest Subsidy Payments and Special Allowance
Payments, if any, as of the end of the preceding Collection Period and (ii) all
amounts allocable to the Notes on deposit (including any accrued interest
thereon) in the Acquisition Fund, the Collection Fund and the Reserve Fund, if
any, as of the end of such Collection Period (adjusted for payments made on such
Distribution Date) and the denominator of which is the sum of (a) the
Outstanding principal amount of all Senior Notes (after payment thereon on such
Distribution Date), and accrued and unpaid interest thereon, and (b) all accrued
and unpaid Program Operating Expenses.
"SERIES" shall mean a series of Notes to which all the same
terms and conditions apply and which can be identified by its own alpha-numeric
designation (e.g. "A-1" or "A1-1") and which is so designated in the Terms
Supplement.
"SERIES INTEREST RATE" shall mean as of a given date with
respect to a Series of Notes the rate of interest per annum at which interest
accrues on such Series of Notes on such date.
"SERIES 1998A NOTES" shall mean, collectively, all Registered
Senior Notes and Unregistered Senior Notes, designated in the Terms Supplement
as "Series A".
"SERIES B-3 NOTES" shall mean, collectively, all Registered
Subordinate Notes and Unregistered Subordinate Notes, designated in the Terms
Supplement as "Series B-3".
"SERVICERS" shall mean the organizations set forth on Schedule
II hereto for purposes of the Program providing for the administration,
servicing and collection of Financed Student Loans, as such Schedule II may be
amended and supplemented from time to time with the written approval of each
Rating Agency then rating any Outstanding Notes.
"SERVICING AGREEMENTS" shall mean the Servicing Agreements set
forth on Schedule II hereto with respect to each Servicer therein, in each case
as originally executed and as amended or supplemented from time to time in
accordance with the terms thereof and with this Indenture, but only to the
extent that any such agreement relates to the servicing of Financed Student
Loans.
"SERVICING DEVELOPMENT FEES" shall mean costs, fees and
expenses relating to the
24
25
development of electronic data information or systems in connection with the
servicing of Financed Student Loans, the establishment of a servicing center for
the servicing of Financed Student Loans, or reserves for current or future
servicing fees for Financed Student Loans; provided, however, that Servicing
Development Fees are payable only with the consent of the Rating Agencies then
rating any Outstanding Notes, such consent to be evidenced by written
confirmation from each Rating Agency that the payment of such Fees will not
adversely affect the rating of such Rating Agency on the Outstanding Notes.
"SPECIAL ALLOWANCE PAYMENTS" shall mean special allowance
payments authorized to be made by the Secretary of Education pursuant to Section
438(b) of the Higher Education Act with respect to a Student Loan, or similar
allowances authorized from time to time by Federal law or regulation.
"SPECIFIED RESERVE FUND BALANCE" shall mean on any
Distribution Date a balance in the Reserve Fund equal to the greater of (i) 1.5%
of the principal balance of the Outstanding Notes on such Distribution Date
after giving effect to payments on such Distribution Date or (ii) $1,500,000,
but not in excess of the principal balance of the Outstanding Notes.
"STATE" shall mean the State of Ohio.
"STUDENT LOAN PORTFOLIO FUND" shall mean the Fund established
by Section 5.4 hereof.
"STUDENT LOANS" shall mean FFELP Loans (i) which were or will
be originated in the United States or its territories or possessions under and
in accordance with the FFEL Program to or on behalf of a student who has
graduated or is expected to graduate from an accredited institution of higher
education within the meaning of the Higher Education Act, (ii) Guaranteed, (iii)
bearing interest at the maximum interest rate permitted under the Higher
Education Act, or such lesser rate of interest per annum as is approved by the
Rating Agencies after delivery of a Cash Flow Statement including Student Loans
at such lower rate, with respect to the Student Loan in question at the time
such Student Loan was made, (iv) either (a) eligible for Interest Subsidy
Payments or for such other similar payments at the time provided for under said
Act, or (b) governed by Sections 428A or 428B or 428C or 428H of the Higher
Education Act, and (v) eligible for Special Allowance Payments or for such other
similar payments at the time provided for under said Act.
"SUBORDINATE EXCHANGE AGREEMENT" shall mean an Exchange
Agreement which is on a parity with a Series of Subordinate Notes and designated
a Subordinate Exchange Agreement under this Indenture.
"SUBORDINATE EXCHANGE COUNTERPARTY" shall mean the Exchange
Counterparty under a Subordinate Exchange Agreement.
"SUBORDINATE EXCHANGE COUNTERPARTY GUARANTEE" shall mean an
Exchange Counterparty Guarantee applicable to a Subordinate Exchange Agreement.
25
26
"SUBORDINATE ISSUER EXCHANGE PAYMENT" shall mean an Issuer
Exchange Payment under a Subordinate Exchange Agreement.
"SUBORDINATE NOTES" shall mean, collectively, all Registered
Subordinate Notes and Unregistered Subordinate Notes.
"SUPPLEMENTAL INDENTURE" shall mean any supplement to or
amendment of this Indenture (other than the Terms Supplement) entered into among
the Issuer, each Eligible Lender Trustee and the Indenture Trustee pursuant to
and in accordance with the provisions of Article IX hereof.
"TERMS SUPPLEMENT" shall mean the Second Amended and Restated
Terms Supplement, dated as of June 1, 1999, among the Issuer, the Initial
Co-Owner Eligible Lender Trustee and the Indenture Trustee, setting forth the
terms and conditions of each Series of Notes issued hereunder, as the same may
be amended or supplemented from time to time.
"TRANSFER AND SALE AGREEMENT" shall mean the Transfer and Sale
Agreement, dated as of March 15, 1999 and effective April 20, 1999, among the
Original Issuer, the Original Initial ELT, the Issuer, the Initial Co-Owner
Eligible Lender Trustee and the Indenture Trustee.
"TRUST ESTATE" shall mean: (i) all Available Funds, the
balances of all Accounts and Funds, whether derived from proceeds of the sale of
Notes, from Available Funds or from any other source and all rights of the
Issuer and each Eligible Lender Trustee therein and all investment property,
security entitlements and securities accounts (all as defined under the Uniform
Commercial Code as adopted in the State) comprised of the Accounts and Funds and
the balances thereof, including, without limitation, the following Accounts and
Funds maintained with Star Bank, National Association, Cincinnati, Ohio: Account
No. 12-7889C "SLF 1998-A/B Trust 98A-3/B-3 Note Payment Account", Account No.
12-7889G "SLF 1998-A/B Trust 98A-3/B-3 Reserve Fund", Account No. 12-7889H "SLF
1998-A/B Trust 98A-3/B-3 Expense Account", Account No. 12-7889K "SLF 1998-A/B
Trust 98A-3/B-3 Acquisition Fund", Account No. 12-7889M "SLF 1998-A/B Trust
98A-3/B-3 Collection Account" and Account No. 12-7889P "SLF 1998-A/B Trust
98A-3/B-3 Excess Surplus Account"; (ii) all rights of the Issuer and each
Eligible Lender Trustee in and to the Financed Student Loans, the Contracts of
Guarantee with respect thereto, the Eligible Investments, any Exchange Agreement
and any Exchange Counterparty Guarantee, the Purchase Agreements, the Master
Servicing Agreement and the Servicing Agreements with respect to Financed
Student Loans serviced thereunder, including all rights of the Issuer under the
warranties of each Seller, Master Servicer or Servicer, as the case may be,
thereunder, and (iii) any proceeds of the foregoing.
"TRUST INDENTURE ACT" shall mean the Trust Indenture Act of
1939, as amended, and any reference herein to the Trust Indenture Act or a
particular provision thereof shall mean such Act or provision, as the case may
be, as amended or replaced from time to time or as supplemented from time to
time by rules or regulations adopted by the Commission under or in furtherance
of the purposes of such Act or provision, as the case may be.
"UNREGISTERED SENIOR NOTES" shall mean the Unregistered Senior
Notes, as defined
26
27
in the Terms Supplement.
"UNREGISTERED SUBORDINATE NOTES" shall mean the Unregistered
Subordinate Notes, as defined in the Terms Supplement.
"VALUE OF ELIGIBLE INVESTMENTS" shall have the following
meaning:
the value of Eligible Investments shall be calculated at the
end of each month as follows:
(a) as to Eligible Investments the bid and asked prices of which are
published on a regular basis in THE WALL STREET JOURNAL (or, if not there, then
THE NEW YORK TIMES): the average of the bid and asked prices for such
investments so published on or most recently prior to such time of
determination, plus accrued interest, if any;
(b) as to Eligible Investments the bid and asked prices of which are
not published on a regular basis in THE WALL STREET JOURNAL or THE NEW YORK
TIMES: the average bid price at such time of determination for such investments
by any two nationally recognized government securities dealers (selected by the
Indenture Trustee in its absolute discretion) at the time making a market in
such investments or the bid price published by a nationally recognized pricing
service, plus accrued interest, if any;
(c) as to certificates of deposit and bankers acceptances: the face
amount thereof, plus accrued interest, if any; and
(d) as to any investment not specified above: the value thereof
established by prior agreement between the Issuer, the Indenture Trustee and the
Rating Agencies then rating any Outstanding Notes.
SECTION 1.2 USE OF CERTAIN TERMS. Unless the context clearly
indicates otherwise, or may otherwise require, in this Indenture (i) the term
"person" includes a firm, partnership, trust, association, limited liability
company, corporation (public or private), public body, public agency and a
natural person, and shall also include an executor, administrator Indenture
Trustee, receiver or other representative; (ii) the terms "herein", "hereunder",
"hereby", "hereto", "hereof" and any similar terms, refer to this Indenture as a
whole and not to any particular section or subdivision hereof; and (iii)
references to specific provisions of the Higher Education Act, the Internal
Revenue Code or any other public law or statute are to such provisions as they
may be amended from time to time. The definitions set forth in Section 1.1
hereof shall include both the singular and the plural, and any pronoun used
herein shall include both the singular and the plural and shall include all
genders.
SECTION 1.3 COMPLIANCE CERTIFICATES AND OPINIONS
(a) Except as otherwise specifically provided in this
Indenture, upon any application or request by the Issuer
to the Indenture Trustee to take any action under any
provision of this Indenture, including, without
limitation, any action
27
28
relating to authentication and delivery of any Notes,
the release or the release and substitution of
property subject to the lien and security interest of
this Indenture or the satisfaction and discharge of
this Indenture, the Issuer shall furnish (i) a
Certificate 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
Trust Indenture Act, a certificate from a firm of
independent certified public accountants meeting the
applicable requirements of this Section 1.3, except
that, in the case of any such application or request
as to which the furnishing of such documents is
specifically required by any provision of this
Indenture, no additional certificate or opinion need
be furnished. Every certificate or opinion with
respect to compliance with a condition or covenant
provided for in this Indenture shall include: (i) a
statement that each signatory of such certificate or
opinion has read or has caused to be read such
covenant or condition and the definitions herein
relating thereto; (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.
(a) Prior to the deposit of any property or securities
with the Indenture Trustee that is to be made the
basis for the release of any property subject to the
lien created by this Indenture, the Issuer shall, in
addition to any obligation imposed in Section 1.3(a)
or elsewhere in this Indenture, furnish to the
Indenture Trustee (1) a Certificate certifying or
stating the opinion of each person signing such
Certificate as to the fair value (within 90 days of
such deposit) to the Issuer of the property or
securities to be so deposited, (2) an opinion of
counsel either stating that, in the opinion of such
counsel, such action has been taken with respect to
the recording and filing of this Indenture and any
other requisite documents, and with respect to the
execution and filing of any financing statements and
continuation statements, as are necessary to perfect
and make effective the lien and security interest in
favor of the Indenture Trustee, for the benefit of
the Indenture Trustee, created by this Indenture in
the property or securities to be so deposited, and
reciting the details of such action, or stating that,
in the opinion of such counsel, no such action is
necessary to make such lien and security interest
effective, and (3) evidence that each of the Rating
Agencies then rating any Outstanding Notes have
confirmed that such action will not result in a
reduction, qualification or withdrawal of the
then-current rating of any of the Notes.
(b) Whenever the Issuer is required to furnish to the
Indenture Trustee a
28
29
Certificate certifying or stating the opinion of any
signer thereof as to the matters described in
paragraph (b) above, the Issuer shall also furnish to
the Indenture Trustee an Independent Certificate as
to the same matters, if the fair value to the Issuer
of the property to be so deposited and of all other
such property made the basis of any such withdrawal
or release since the commencement of the then-current
fiscal year of the Issuer, as set forth in the
certificates delivered pursuant to paragraph (b)
above and this paragraph (c), is ten percent (10%) or
more of the Outstanding principal amount of the
Notes, but such a certificate need not be furnished
with respect to any property so deposited, if the
fair value thereof set forth in the related
Certificate is less than $25,000 or less than one
percent (1%) of the Outstanding principal amount of
the Notes.
(b) Other than with respect to any release described in
clause (1) or (2) of paragraph (f) below, whenever
any property or securities are to be released from
the lien created by the Indenture, the Issuer shall
also furnish to the Indenture Trustee a Certificate
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 created by this
Indenture in contravention of the provisions hereof.
(c) Whenever the Issuer is required to furnish to the
Indenture Trustee a Certificate certifying or stating
the opinion of any signer thereof as to the matters
described in paragraph (d) above, the Issuer shall
also furnish to the Indenture Trustee an Independent
Certificate as to the same matters, if the fair value
to the Issuer of the property or securities or of all
other property or securities (other than property
described in clauses (1) and (2) of paragraph (f)
below) released from the lien created by this
Indenture since the commencement of the then-current
fiscal year of the Issuer, as set forth in the
certificates delivered pursuant to paragraph (d)
above and this paragraph (e), equals ten percent
(10%) or more of the Outstanding principal amount of
the Notes, but such a certificate need not be
furnished with respect to any release of property or
securities, if the fair value thereof set forth in
the related Certificate is less than $25,000 or less
than one percent (1%) of the Outstanding principal
amount of the Notes.
(d) Notwithstanding any other provision of this Section
1.3, the Issuer may, without compliance with the
other provisions of this Section 1.3, (1) collect,
liquidate, sell or otherwise dispose of Financed
Student Loans as and to the extent permitted or
required by this Indenture, including, without
limitation, Section 5.4 and Section 8.3 hereof, and
any Servicing Agreement, and (2) make cash payments
out of the Funds and Accounts as and to the extent
permitted or required by the Indenture.
(e) 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
29
30
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.
(e) Any certificate or opinion of an Authorized Officer
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
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
officer of any Servicer or the Issuer, stating that
the information with respect to such factual matters
is in the possession of such Servicer or the Issuer,
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.
(f) 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.
(g) 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 granting 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 VII hereof.
(h) Nothing in this Section 1.3 shall be construed either
as requiring the inclusion in this Indenture of
provisions that the Issuer shall furnish to the
Indenture Trustee any other evidence of compliance
with the conditions and covenants provided for in
this Indenture than the evidence specified in this
Section 1.3, or as preventing the inclusion of such
provisions in this Indenture, if the parties hereto
agree.
SECTION 1.4 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the Trust Indenture Act, the
provision is incorporated by reference in and made a part of this Indenture. The
following terms used in the Trust Indenture Act shall have the following
meanings insofar as such terms are incorporated into this Indenture pursuant to
this Section 1.4.
30
31
"COMMISSION" shall mean the Commission.
"INDENTURE SECURITIES" shall mean the Notes issued
and Outstanding under this Indenture.
"INDENTURE SECURITY HOLDER" shall mean a Holder.
"INDENTURE TO BE QUALIFIED" shall mean this
Indenture.
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" shall
mean the Indenture Trustee.
"OBLIGOR" on the indenture securities shall mean the
Issuer and any other obligor on the indenture securities.
All other terms from the Trust Indenture Act used in this
Indenture that are defined by the Trust Indenture Act, defined by reference in
the Trust Indenture Act to another statute or defined by Commission rule shall
have the meaning assigned to them by such definition in the Trust Indenture Act.
31
32
ARTICLE II
AUTHORIZATION, TERMS AND PROVISIONS OF NOTES
SECTION 2.1 AUTHORIZATION OF NOTES; TERMS OF NOTES IN GENERAL;
NOTES TO CONSTITUTE LIMITED OBLIGATIONS. Subject to the other terms and
conditions set forth in the Original Indenture, as amended and restated by the
First Restated Indenture, each Series of Notes issued hereunder was authorized
by, has the terms set forth in and shall be subject to the further conditions,
if any, of the Original Terms Supplement which was executed and delivered in
connection with the issuance of such Series of Notes.
The Notes were issued under and secured by the Original
Indenture, as amended and restated by the First Restated Indenture, subject to
the conditions thereinafter provided, for the purpose of (i) making or acquiring
Student Loans and (ii) making deposits to certain of the Funds and Accounts
hereunder.
Such Notes were executed and authenticated substantially in
the form and manner provided in the Original Base Indenture with such changes as
were necessary or appropriate to conform to the provisions of the Original Terms
Supplement and were deposited with the Indenture Trustee for authentication, but
before such Series of Notes were authenticated and delivered by the Indenture
Trustee, there was filed with the Indenture Trustee the following:
(a) a certified copy of the Management Committee Resolution
authorizing the issuance of such Series of Notes; and
(b) a fully executed counterpart of the Original Terms
Supplement.
When the documents described above in this Section had been
filed with the Indenture Trustee and when such Series of Notes had been executed
and authenticated as required by the Original Indenture, the Indenture Trustee
delivered such Series of Notes at one time to or upon the order of the Initial
Purchasers, upon payment to the Indenture Trustee of the purchase price of such
Series of Notes and the satisfaction of all other conditions of the Initial
Purchasers set forth in the Note Purchase Agreement.
The proceeds of all such Series of Notes issued under the
Original Indenture were paid to the Indenture Trustee for deposit to the credit
of the Funds and Accounts as set forth in the Original Terms Supplement.
Pursuant to the Transfer and Sale Agreement and subject to the
terms and provisions of the Original Indenture, the Original Issuer and the
Original Initial ELT have assigned to the Issuer and the Initial Co-Owner
Eligible Lender Trustee all of their respective right, title and interest in the
Trust Estate and the Ancillary Agreements and the Issuer and the Initial
Co-Owner Eligible Lender Trustee have assumed all of the respective obligations
of the Original Issuer and the Original Initial ELT under the Original Indenture
which was amended and restated by the First Restated Indenture to reflect the
effect of the execution and delivery of the Transfer and Sale Agreement.
32
33
In connection with the Exchange Offer and subject to the terms
and provisions of the First Restated Indenture, the Issuer and the Initial
Co-Owner Eligible Lender Trustee are executing and delivering this Second
Restated Indenture to provide for the payment and security of the Registered
Notes issued in connection with Exchange Offer, while continuing to provide for
the payment and the security of the Unregistered Notes, if any, remaining after
consummation of the Exchange Offer.
The Notes are and shall be limited obligations of the Issuer
payable solely from the Trust Estate and secured under the Original Indenture,
as amended and restated by First Restated Indenture and this Indenture, solely
by (i) the Trust Estate, (ii) the Transfer and Sale Agreement and (iii) the
Ancillary Agreements, all as provided in the Original Indenture as amended and
restated by the First Restated Indenture and this Indenture. Each Note contains
and shall contain a statement to that effect.
SECTION 2.2 EXECUTION OF NOTES; VALIDITY OF SIGNATURES. Each
Note and the Indenture Trustee's certificate of authentication shall be in
substantially the form set forth in Exhibits B, C, D, O, P or Q, as applicable,
to the Terms Supplement and may have such letters, numbers or other marks of
identification and such legends of endorsements placed thereon as may,
consistent herewith, be determined by the Authorized Officers executing such
Notes, as evidenced by their execution of such Notes. Each such Note shall be
executed on behalf of the Issuer by manual or facsimile signatures of any two
Authorized Officers of the Issuer. Each Note shall be authenticated by the
manual signature of an authorized signature of the Indenture Trustee or the
Authenticating Agent.
In case any person who shall have executed, authenticated or
registered any of the Notes, whether manually or by facsimile, shall die or
cease to be the person authorized to execute, authenticate or register the Notes
before the Notes so executed, authenticated or registered by such person shall
have been actually issued and delivered, such Notes shall be valid nevertheless,
and may be issued with the same effect as though the person who had so executed,
authenticated or registered such Notes had not died or ceased to be such
authorized person.
Only such of the Notes as shall bear thereon a certificate of
authentication as described above, manually executed by an authorized signature
of the Indenture Trustee or the Authenticating Agent, shall be valid or
obligatory for any purpose or entitled to the benefits of this Indenture, and
such certificate of authentication shall be conclusive evidence that the Notes
so authenticated have been duly executed, authenticated, delivered and issued
hereunder and are entitled to the benefits of this Indenture.
SECTION 2.3 TRANSFER OF NOTES; EXCHANGE OF NOTES. Except when
Notes are held in a Book-Entry System and subject to the provisions of this
Section 2.3 and Section 2.05 of the Terms Supplement, any Note may be
transferred upon the books of registry maintained pursuant to Section 2.4
hereof, by the person in whose name it is registered, in person or by its duly
authorized attorney, upon surrender of such Note to the Indenture Trustee or the
Authenticating Agent for cancellation, accompanied by a written instrument of
transfer in the form set forth in Exhibits B, C, D, O, P or Q, as applicable, to
the Terms Supplement, duly
33
34
executed by the registered owner in person or by its duly authorized attorney,
with signatures guaranteed, in a manner satisfactory to the Indenture Trustee or
the Authenticating Agent.
Whenever any Note shall be surrendered for transfer, the
Issuer shall execute and the Indenture Trustee or the Authenticating Agent shall
authenticate and deliver, at the principal corporate trust office of the
Indenture Trustee or at the office of the Authenticating Agent (or send by first
class mail to the new Holder or Holders), registered in the name or names of the
transferee or transferees, a new duly executed Note or (to the extent of
Authorized Denominations) two or more new duly executed Notes of the same date,
Series (if applicable) and aggregate principal amount as the Note being
surrendered.
Except when Notes are held in a Book-Entry System, to the
extent of Authorized Denominations, any Note or Notes may be surrendered and
exchanged at the principal corporate trust office of the Indenture Trustee or at
the office of the Authenticating Agent for a Note or Notes of the same date and
Series (if applicable) and of like aggregate principal amount. The Issuer shall
execute and the Indenture Trustee or the Authenticating Agent shall authenticate
and deliver the Notes issued upon such exchange and shall deliver the same at
the principal corporate trust office of the Indenture Trustee or at the office
of the Authenticating Agent (or send the same by first class mail to the Holder
thereof).
All exchanges and transfers of Notes pursuant to this Section
2.3 shall be made without expense to the Holder of such Notes, except that the
Indenture Trustee or the Authenticating Agent shall require the payment by the
Holder of any Note requesting such transfer or exchange of any tax, fee or other
governmental charge required to be paid with respect to such transfer or
exchange.
All Notes surrendered pursuant to this Section shall be
canceled.
No exchanges or transfers of any Note shall be required to be
made if such Note has been selected for redemption, nor during the seven (7)
days next preceding the date of selection of Notes for redemption.
SECTION 2.4 BOOKS OF REGISTRY. At all times while any Note
remains Outstanding, the Indenture Trustee shall keep or cause to be kept books
of registry for the registration and transfer of Notes at its principal
corporate trust office. Upon presentation of any Notes to the Indenture Trustee
at the principal corporate trust office of the Indenture Trustee or at the
office of the Authenticating Agent, the Indenture Trustee shall transfer, or the
Authenticating Agent shall cause the Indenture Trustee to transfer, as the case
may be, under such reasonable regulations as the Indenture Trustee may
prescribe, such Notes on such books of registry as hereinabove set forth. Such
books of registry shall at all reasonable times be open for inspection by the
Issuer or its duly authorized agents or representatives.
The Issuer, the Indenture Trustee and the Authenticating Agent
may treat the registered owner of any Note as the absolute owner of such Note
for the purpose of receiving payment of the principal of and interest on such
Note and for all other purposes whatsoever and the Issuer, the Indenture Trustee
and the Authenticating Agent shall not be affected by any notice
34
35
to the contrary.
SECTION 2.5 MUTILATED, LOST, STOLEN OR DESTROYED NOTES. In
case any Note shall at any time become mutilated in whole or in part, or is
destroyed, lost or stolen, the Issuer shall cause to be executed and delivered
at the principal corporate trust office of the Indenture Trustee or at the
office of the Authenticating Agent (or send by first class mail to the Holder
thereof at the Holder's request, risk and expense), a new Note of the same date,
Series (if applicable) and principal amount and of like tenor and effect as the
Note so mutilated, destroyed, lost or stolen, in exchange and substitution for
and upon the surrender for cancellation of such mutilated Note, or in lieu of or
in substitution for such destroyed, lost or stolen Note. In any such event the
applicant for the issuance of a substitute Note shall file with the Indenture
Trustee or the Authenticating Agent evidence or proof satisfactory to the
Indenture Trustee or the Authenticating Agent, as the case may be, of the
mutilation, destruction, loss or theft of the original Note, and proof of
ownership thereof, shall furnish the Issuer, the Indenture Trustee and the
Authenticating Agent with security and indemnity satisfactory to the Issuer and
the Indenture Trustee, and shall comply with such other reasonable rules as the
Issuer or the Indenture Trustee may prescribe. Any duplicate Note issued under
the provisions of this Section 2.5 in exchange and substitution for any
mutilated Note or in substitution for any allegedly destroyed, lost or stolen
Note, shall be entitled to the identical benefits under this Indenture as was
the original Note in lieu of which such duplicate Note is issued, and shall be
entitled to equal and proportionate benefits with all the other Notes of the
same Series issued hereunder. Neither the Issuer nor the Indenture Trustee shall
be required to treat both the original Note and any duplicate Note as being
Outstanding for the purpose of determining the principal amount of Notes
Outstanding hereunder, but both the original and duplicate Note shall be treated
as one and the same.
Notwithstanding the foregoing provisions of this Section 2.5
as to the issuance of duplicate or replacement Notes, if any such mutilated,
destroyed, lost or stolen Note has matured, at the option of the Issuer or the
Indenture Trustee, payment of the amount due thereon may be made without the
issuance of any duplicate or replacement Note upon receipt of like evidence,
indemnity, security and expenses and the surrender for cancellation of any such
mutilated Note and upon such other conditions as the Issuer or the Indenture
Trustee may prescribe.
All mutilated Notes surrendered to the Indenture Trustee or
the Authenticating Agent in substitution for new Notes pursuant to this Section
2.5 shall be canceled by the Indenture Trustee or the Authenticating Agent. The
Authenticating Agent shall deliver any such canceled Notes to the Indenture
Trustee.
All expenses incurred by the Issuer or the Indenture Trustee
or the Authenticating Agent for providing of any duplicate or replacement Note
shall be paid by the registered owner thereof.
SECTION 2.6 DISPOSITION AND DESTRUCTION OF NOTES. All Notes
surrendered to the Indenture Trustee or the Authenticating Agent for payment, or
surrendered to the Indenture Trustee for transfer or exchange in accordance with
Section 2.3 hereof or for substitution in
35
36
accordance with Section 2.5 hereof, shall be canceled by the Indenture Trustee
or the Authenticating Agent upon such payment, transfer, exchange or
substitution, as the case may be.
Whenever in this Indenture provision is made for the
cancellation of any Notes, the canceled Notes shall be delivered by the
Indenture Trustee to the Issuer or as it may direct. Upon the written request of
the Issuer, the Indenture Trustee may, however, in lieu of such cancellation and
delivery, destroy such Notes to the extent permitted by law. If any Notes are
destroyed by the Indenture Trustee, the Issuer may require that such destruction
be done in the presence of its representative. If the Indenture Trustee shall
destroy any Notes, it shall deliver a certificate of such destruction to the
Issuer.
SECTION 2.7 FORMS OF NOTES AND INSTRUCTIONS FOR PAYMENT. The
form of each Note and the certificate of authentication and form of assignment
for transfer to be endorsed thereon shall be in substantially the form set forth
in Exhibits B, C, D, O, P or Q to the Terms Supplement, with necessary or
appropriate variations, omissions or insertions, as permitted or required by
this Indenture. Any instructions to the Indenture Trustee for payment of
interest on the Notes shall be in substantially the form of Exhibit E to the
Terms Supplement, with necessary or appropriate variations, omissions or
insertions, as permitted or required by this Indenture.
SECTION 2.8 TEMPORARY NOTES. Until definitive Notes are
prepared, the Issuer may execute and deliver, in lieu of definitive Notes, but
subject to the same provisions, limitations and conditions as the definitive
Notes, except as to the denominations thereof and as to exchangeability, one or
more temporary Notes, substantially of the tenor of the definitive Notes in lieu
of which such temporary Notes are issued, in Authorized Denominations, and with
such omissions, insertions and variations as may be appropriate to temporary
Notes. Until so exchanged, the temporary Notes shall in all respects be entitled
to the same benefits and security as definitive Notes issued pursuant to this
Indenture. All temporary Notes surrendered in exchange for definitive Notes
shall be forthwith canceled by the Indenture Trustee.
36
37
ARTICLE III
[RESERVED]
37
38
ARTICLE IV
REDEMPTION OF THE NOTES
SECTION 4.1 REDEMPTION OF NOTES IN GENERAL. The Notes shall be
subject to redemption prior to their Legal Final Maturity only upon the terms
and conditions, including without limitation prior written notice of such
redemption to the Holders of the Notes, and at the redemption price or prices,
as are set forth in the Terms Supplement.
38
39
ARTICLE V
DISPOSITION OF PROCEEDS;
ESTABLISHMENT OF FUNDS AND ACCOUNTS;
APPLICATION OF AVAILABLE FUNDS
SECTION 5.1 DISPOSITION OF PROCEEDS OF THE NOTES. All proceeds
of the issuance and sale of the Notes hereunder were deposited with the
Indenture Trustee on the Date of Issuance, and the Indenture Trustee applied or
shall apply such proceeds in accordance with the terms and provisions of Article
IV of the Terms Supplement.
SECTION 5.2 RESERVE FUND. There is established hereunder a
Fund, held by the Indenture Trustee and designated the "Reserve Fund". The
moneys in the Reserve Fund shall be invested in Eligible Investments as provided
in Section 5.7 hereof. Any income or earnings on such moneys shall be credited
to the Collection Account in the Collection Fund.
To the extent necessary or appropriate, the Issuer and the
Indenture Trustee may establish Accounts within the Reserve Fund and subaccounts
within such Accounts established under this Section.
At any time the balance of the Reserve Fund is below its
Specified Reserve Fund Balance, the Indenture Trustee shall restore the Reserve
Fund to its Specified Reserve Fund Balance by transfers on the next Monthly
Distribution Date from the following Accounts in the following order of
priority:
FIRST, from the Collection Account after making all prior distributions
on such Monthly Distribution Date therefrom pursuant to Section
5.5.1 hereof and Article IV of the Terms Supplement; and
SECOND, from the Excess Surplus Account.
If the full amount required to restore the Reserve Fund to its
Specified Reserve Fund Balance is not available in the Collection Account or
Excess Surplus Account on the next succeeding Monthly Distribution Date, the
Indenture Trustee shall continue to transfer funds in such order of priority
from the Collection Account as they become available and in accordance with the
instructions for transfers from such Account pursuant to Section 5.5.1 hereof
and Article IV of the Terms Supplement and from the Excess Surplus Account until
the deficiency in the Reserve Fund has been eliminated. If the Indenture Trustee
transferred amounts from the Reserve Fund to cover a Realized Loss on a Financed
Student Loan, the Indenture Trustee shall deposit any subsequent payments of
principal received on or with respect to such Financed Student Loan into the
Reserve Fund.
On each Monthly Distribution Date, the Indenture Trustee shall
transfer any excess in the Reserve Fund over the Specified Reserve Fund Balance
to the Collection Account. After the transfer of any such excess balance, the
Reserve Fund shall be used solely for the
39
40
following purposes in the following order of priority:
FIRST, to make up any deficiency in the Expense Account immediately following
the transfer of moneys into such Account pursuant to Section 5.5.1
hereof;
SECOND, to increase the amount in the Note Payment Account, following the
transfer of moneys into such Account pursuant to Section 5.5.1 hereof
and Article IV of the Terms Supplement, to the amount required to pay
interest on the Notes and any related Issuer Exchange Payment pursuant
to Section 5.5.2 hereof (other than (i) Carryover Interest or (ii)
interest on the Series B-3 Notes or any Subordinate Issuer Exchange
Payment when the payment of such interest or Subordinate Issuer
Exchange Payment is deferred pursuant to Section 5.5.1 hereof and
Article IV of the Terms Supplement) on any Distribution Date or on any
other date on which interest is due upon redemption or payment of the
Notes or on any other date on which any related Issuer Exchange Payment
is due and payable (other than any Subordinate Issuer Exchange Payment
when the payment of such Subordinate Issuer Exchange Payment is
deferred pursuant to Section 5.5.1 hereof and Article IV of the Terms
Supplement), by transfer and deposit by the Indenture Trustee to the
credit of the Note Payment Account on any such date; and
THIRD, to provide for payment of the principal of any Series of Notes at their
Legal Final Maturity thereof or for the payment of the principal of
such Series of Notes being redeemed in whole pursuant to the Terms
Supplement by transfer and deposit by the Indenture Trustee to the
credit of the Note Payment Account on the Legal Final Maturity of such
Series of Notes or the date of any such redemption, as the case may be.
SECTION 5.3 ACQUISITION FUND. There is established hereunder a
Fund, held by the Indenture Trustee and designated the "Acquisition Fund".
To the extent necessary or appropriate, the Issuer and the
Indenture Trustee may establish Accounts within the Acquisition Fund and
subaccounts within such Accounts established under this Section.
The Indenture Trustee has deposited to the credit of the
Acquisition Fund the amount required by the Original Terms Supplement and shall
deposit to the credit of the Acquisition Fund any amount required by the Terms
Supplement.
The Acquisition Fund and the Accounts therein shall be applied
by the Indenture Trustee for the Financing directly, or indirectly through an
Eligible Lender Trustee, of Student Loans from Sellers. The Financing directly,
or indirectly through an Eligible Lender Trustee, of Student Loans from Sellers,
from the Issuer and/or from the indenture trustee under other financing
documents to which the Issuer is a party with moneys representing amounts
deposited in the Acquisition Fund (or any Accounts therein) shall be governed by
the provisions of Section 5.3.1 below.
40
41
SECTION 5.3.1 FINANCING OF STUDENT LOANS. The moneys
representing amounts deposited to the Acquisition Fund (or any Accounts therein)
pursuant to the Terms Supplement to be applied for the Financing directly, or
indirectly through an Eligible Lender Trustee, of Student Loans shall be (i) in
the case of Student Loans that have been fully disbursed, the full remaining
unpaid principal amount of such Student Loans or (ii) in the case of Student
Loans that have not been fully disbursed, the unpaid principal amount of such
Student Loans that has been disbursed to the borrower prior to its Financing
hereunder, plus, in each case, the amount of accrued and unpaid interest on such
Student Loans payable by the borrowers in respect thereof, less a discount or
plus a premium, and, when directed by the Issuer, less any accrued but unpaid
interest on such Student Loans, and plus reasonable transfer fees payable to or
on behalf of the Sellers with respect to such Student Loans pursuant to the
applicable Purchase Agreements, and plus any interest paid by the Indenture
Trustee to a Seller at the direction of the Issuer on the amount of principal
and accrued interest on such Student Loans being Financed, directly or
indirectly, from the date of transfer of such Student Loans until the date funds
are actually paid to such Seller at a rate of interest not to exceed the current
yield on funds in the Expense Account, in any case not exceeding the amount
permitted by law. Such moneys shall be paid to such Sellers upon receipt by the
Indenture Trustee of a Student Loan Acquisition Certificate of the Issuer, in
the form of Exhibit A hereto, together with all documents and certificates
required thereby, if any, with respect to such Student Loans. Within ten (10)
Business Days after the disbursement of moneys from the Acquisition Fund (or any
Account therein), the Issuer shall deliver to the Indenture Trustee an Updating
Student Loan Acquisition Certificate in the form of Exhibit B hereto. Any amount
refunded by the Seller in a loan purchase transaction shall be deposited by the
Indenture Trustee in the Collection Account.
Upon request by the Issuer, the Acquisition Fund may also be
applied by the Indenture Trustee for the acquisition directly, or indirectly
through an Eligible Lender Trustee, of Student Loans from the indenture trustee
under another indenture of trust between the Issuer or the Original Issuer and
such indenture trustee or from the Issuer or the Original Issuer for Student
Loans financed by the Issuer or the Original Issuer with funds not subject to an
indenture of trust, in either case at a price not in excess of the full
remaining unpaid principal amount of such Student Loans, plus the amount of
accrued and unpaid interest on such Student Loans payable by the obligors in
respect thereof, plus any unamortized premium and plus reasonable transfer fees
not exceeding the amount permitted by law, which price shall be payable upon
receipt of Student Loan Acquisition and Updating Student Loan Acquisition
Certificates of the Issuer as set forth above, and otherwise as provided in said
other indenture of trust.
In addition to the amount paid to a Seller, another indenture
trustee, the Issuer or the Original Issuer from the Acquisition Fund (or any
Account therein) with respect to the purchase of a Student Loan that has not
been fully disbursed, the Indenture Trustee shall pay from the Acquisition Fund
(or any Account therein) from which the purchase price of the partially
disbursed Student Loan was paid, to or for the benefit of the borrower of such
Student Loan that is acquired, directly or indirectly, by check mailed by
first-class mail, postage prepaid, or by electronic funds transfer to such
borrower or such borrower's eligible institution, disbursement agent or other
Person (including the Issuer or the Original Issuer) (as specified in a
41
42
written certificate of an Authorized Officer in the form acceptable to the
Indenture Trustee (a "Disbursement Certificate")) at the address and on the date
set forth in such Disbursement Certificate the amount certified to it in such
Disbursement Certificate. In each such Disbursement Certificate the Issuer shall
further certify that the amount to be disbursed pursuant to such Disbursement
Certificate represents an amount which, together with any other amounts
previously disbursed by the Seller, the Issuer, the Original Issuer, other
indenture trustee and/or the Indenture Trustee in connection with such Student
Loan, does not exceed the maximum amount available to or for the benefit of such
obligor from such Student Loan, including all fees payable to the Guarantee
Agency and the Secretary of Education.
The Student Loans Financed as aforesaid shall be included in
the balances of the Student Loan Portfolio Fund until they shall have been paid
in full or sold, exchanged or otherwise disposed of by the Indenture Trustee in
accordance with Section 5.4 hereof.
SECTION 5.3.3 INVESTMENT OF ACQUISITION FUND; TRANSFER OF
PROCEEDS IN ACQUISITION FUND. Pending application of moneys in the Acquisition
Fund (or any Account therein) to the foregoing purposes, such moneys shall be
invested in Eligible Investments as provided in Section 5.7 hereof.
Any portion of the moneys in the Acquisition Fund which is
not, or which the Issuer at any time determines cannot for any reason be, used
to Finance Student Loans prior to the date specified in the Terms Supplement
shall, at the written direction of the Issuer and subject to any requirements
set forth in the Terms Supplement, be transferred by the Indenture Trustee to
the Collection Account for the payment of the principal of and interest on the
Notes as provided in the Terms Supplement.
SECTION 5.4 STUDENT LOAN PORTFOLIO FUND; SALE OF STUDENT
LOANS. There is established hereunder a Fund, held by the Indenture Trustee and
designated the "Student Loan Portfolio Fund."
To the extent necessary or appropriate, the Issuer and the
Indenture Trustee may establish Accounts within the Student Loan Portfolio Fund
and subaccounts within such Accounts established under this Section.
All Financed Student Loans (including, without limitation, any
Student Loans transferred to the Indenture Trustee for deposit under this
Indenture by the indenture trustee under any other indenture of trust between
the Issuer or the Original Issuer and such indenture trustee) shall be included
in the balances of the Student Loan Portfolio Fund. All principal of, interest
on and Special Allowance Payments or other Available Funds in respect of, the
Financed Student Loans shall be deposited upon receipt to the credit of the
Collection Account in the Collection Fund as provided in Section 5.5 hereof.
Financed Student Loans included in the balances of the Student
Loan Portfolio Fund may be removed therefrom and sold or exchanged by the
Indenture Trustee only in accordance with this Section 5.4 or with Section 8.3
hereof. Nothing in this Indenture shall be
42
43
deemed to preclude the Servicers from maintaining possession of the notes
evidencing, and other documentation relating to, Financed Student Loans on
behalf of the Indenture Trustee in accordance with the Servicing Agreements,
provided the same is consistent with the creation and maintenance of the first
lien and security interest created by the granting clause hereof and Section 5.6
hereof and does not impair the perfection of such security interest.
The Indenture Trustee may (a) at any time and from time to
time deliver Student Loans to the Sellers thereof as and to the extent provided
for in the applicable Purchase Agreements (or pursuant to the Transfer and Sale
Agreement to the Original Issuer or other purchaser on behalf of the Original
Issuer under the applicable Purchase Agreements) with respect to rejections and
repurchases of such Student Loans against payment to the Indenture Trustee by
the Seller, the Original Issuer or such other purchaser of moneys at least equal
to the repurchase price thereof together with all other amounts payable by the
Sellers thereof under such Purchase Agreements in connection with such
rejections or repurchases or (b) deliver all or any part of the Financed Student
Loans against moneys at least sufficient to defease pursuant to Article X hereof
all (but not less than all) of the Outstanding Notes (provided that such moneys
are applied by the Indenture Trustee immediately after receipt thereof to such
defeasance in accordance with Section 10.2 hereof), or (c) following a default
on any Financed Student Loan, remove such Student Loan from the Student Loan
Portfolio Fund and tender it to the Guarantee Agency or the Secretary of
Education to the extent required to collect the benefits of any related Contract
of Guarantee in connection with such default.
The Indenture Trustee may, at any time and from time to time
in accordance with the provisions of the applicable Servicing Agreement, deliver
Financed Student Loans to the Servicer thereof for purchase by such Servicer as
and to the extent required under such Servicing Agreement against payment to the
Indenture Trustee of moneys equal to the purchase price thereof, together with
all other amounts payable by such Servicer thereof, under such Servicing
Agreement.
The Indenture Trustee shall permit the sale of Financed
Student Loans in the Student Loan Portfolio Fund selected by the Issuer only (a)
to avoid an Event of Default or, if an Event of Default has occurred, as may be
required or appropriate pursuant to the provisions of Section 8.3 hereof, (b) in
an exchange of Financed Student Loans pursuant to the provisions of this Section
5.4, (c) in connection with the mandatory auction of such Financed Student Loans
pursuant to Article IV of the Terms Supplement, or (d) in connection with an
optional purchase of the Financed Student Loans pursuant to Article IV of the
Terms Supplement. In addition, the Indenture Trustee shall permit the sale of
Financed Student Loans and the removal thereof from the Student Loan Portfolio
Fund in connection with the consolidation of such Student Loans by the student
borrower with another Lender.
Other than in connection with any sale of a Financed Student
Loan pursuant to Article III of the Terms Supplement or pursuant to item (b) of
the third preceding paragraph, any Financed Student Loan that is sold pursuant
to this Section 5.4 shall be sold at a price not less than the aggregate unpaid
principal amount thereof plus the amount of accrued and unpaid interest thereon
payable by the student obligors thereof plus late charges, if any, and
unamortized
43
44
premium thereon determined in accordance with the Issuer's established
accounting policies. The proceeds of the sale of a Financed Student Loan shall
be deposited to the credit of the Collection Account in the Collection Fund.
The Issuer may, at any time and from time to time, instruct
the Indenture Trustee to exchange Financed Student Loans for other Student Loans
having an aggregate principal amount no less than the aggregate principal amount
of the Financed Student Loans being exchanged, bearing the same rates of
interest and eligible, after exchange, for the same Special Allowance Payments,
having the same status, whether interim, grace or payout (provided, however,
that as a result of such exchange the average principal amount of all of the
Student Loans included in Trust Estate shall not be decreased, the average
maturity of all such Student Loans shall not be increased and no Student Loan
shall be Financed which is not at the time authorized under this Indenture)
pursuant to a Certificate, in which the Issuer shall certify that such exchange
will not materially adversely affect the sufficiency of Available Funds to meet
the obligations of the Issuer under this Indenture, including, without
limitation, the payment of principal of and interest on the Notes. The
conditions relating to the acquisition directly, or indirectly through an
Eligible Lender Trustee, of Student Loans and the form of certificate required
to be received by the Indenture Trustee as set forth in Section 5.3 hereof shall
apply to any such exchange to the extent the same may reasonably be made
applicable. All Student Loans acquired directly, or indirectly through an
Eligible Lender Trustee, by the Indenture Trustee as a result of any such
exchange shall be included in the balances of the Student Loan Portfolio Fund.
The aggregate principal balance of Financed Student Loans
bearing interest at a fixed rate must always equal or exceed the Outstanding
principal balance of the Subordinate Notes unless each Rating Agency then rating
the Outstanding Notes confirms that any failure to meet the foregoing will not
adversely affect the existing ratings of each such Rating Agency on the
Outstanding Notes. In order to comply with the requirements of this paragraph,
the Issuer may exchange Financed Student Loans not bearing interest at a fixed
rate for other Student Loans bearing interest at a fixed rate; provided,
however, that the Issuer certifies that such exchange will not materially
adversely affect the sufficiency of Available Funds to meet the obligations of
the Issuer under the Indenture.
Any sale, exchange or other disposition pursuant to this
Section 5.4 of Financed Student Loans made under the Higher Education Act shall
be only to or with one or more eligible lenders under the Higher Education Act
so long as the Higher Education Act requires the owner or holder of Student
Loans to be an eligible lender.
SECTION 5.5 COLLECTION FUND. There is established hereunder a
Fund, held by the Indenture Trustee and designated the "Collection Fund", and
established therein (a) the "Collection Account", (b) the "Note Payment
Account", (c) the "Expense Account" and (d) the "Excess Surplus Account".
To the extent necessary or appropriate, the Issuer and the
Indenture Trustee may establish additional Accounts hereunder, and subaccounts
within any such Accounts established
44
45
in the Collection Fund under this Section.
The Indenture Trustee has deposited to the credit of (a) the
Collection Account and (b) the Expense Account in the Collection Fund the
amounts required by the Original Terms Supplement.
SECTION 5.5.1 COLLECTION ACCOUNT There shall be deposited to
the Collection Account all amounts received, whether as principal, interest,
Interest Subsidy Payments, Special Allowance Payments, Guarantee payments,
tuition refunds, repurchase payments paid by Sellers pursuant to the Purchase
Agreements or otherwise, in respect of all Financed Student Loans, interest on
all such Financed Student Loans payable by the borrowers in respect thereof
accrued prior to the date of acquisition thereof by the Indenture Trustee and
included in the purchase price thereof paid by the Indenture Trustee to the
Sellers thereof; amounts received as earnings on or income from Eligible
Investments included in the balances of the Funds and Accounts to the extent
provided in Section 5.7 hereof; any Counterparty Exchange Payments; and proceeds
of any sale of Financed Student Loans pursuant to Section 5.4 hereof to the
extent required by such Section.
The Issuer shall, and shall cause each Seller and Servicer, in
accordance with the applicable Purchase Agreement or Servicing Agreement, as the
case may be, to transfer all Available Funds received by it to the Indenture
Trustee, and the Indenture Trustee shall, upon receipt of any such Available
Funds, immediately deposit and credit such Available Funds to the Collection
Account.
Payment of rebate fees in respect of Consolidation Loans and
any other amount owed by the Issuer with respect to Financed Student Loans to
the Secretary of Education, any Guarantee Agency, any Servicer or the Indenture
Trustee shall be made by the Indenture Trustee from funds available in the
Collection Account.
On each Distribution Date, the Indenture Trustee shall
transfer from the Collection Account the amounts and in the priority set forth
in Article IV of the Terms Supplement.
SECTION 5.5.2 NOTE PAYMENT ACCOUNT. On each applicable
Distribution Date, following the transfers to the Note Payment Account set forth
in the Terms Supplement, the Indenture Trustee shall distribute to the
Noteholders as of the Record Date and Exchange Counterparties, if any, the
amounts transferred to the Note Payment Account, together with (i) any amounts
therein transferred from the Reserve Fund and (ii) any Advances.
If the Issuer or an Eligible Lender Trustee on behalf of the
Issuer has applied for a Guarantee Payment from a Guarantee Agency or an
Interest Subsidy Payment or a Special Allowance Payment from the Department of
Education, and the Issuer or such Eligible Lender Trustee, as applicable, has
not received the related payment prior to the end of the Collection Period
immediately preceding the Distribution Date on which such amount would be
required to be distributed as a payment of interest, the Issuer or the Original
Issuer may, no later than the
45
46
third Business Day before such Distribution Date, deposit into the Note Payment
Account an amount up to the amount of such payments applied for but not received
(such deposits by the Issuer are referred to herein as "Advances"). The
Indenture Trustee shall reimburse the Issuer or the Original Issuer, as
applicable, for such Advances with moneys in the Trust Estate, (i) first, from
moneys in the Fund or Account which such Advance temporarily replaced and (ii)
second, from payments received generally on or with respect to the Financed
Student Loans immediately upon their availability and prior to the use of such
moneys for any of the other purposes permitted under this Indenture. Neither the
Issuer nor the Original Issuer shall have any obligation, legal or otherwise, to
make any Advance, and a determination by the Issuer or the Original Issuer to
make an Advance shall not create any obligation of the Issuer or the Original
Issuer, legal or otherwise, to make any future Advances.
SECTION 5.5.3. [RESERVED.].
SECTION 5.5.4 EXPENSE ACCOUNT. On the Date of Issuance, the
Indenture Trustee shall deposit to the credit of the Expense Account the amount,
if any, set forth in the Terms Supplement. Thereafter, the Indenture Trustee
shall transfer amounts to the Expense Account from the Collection Account funds
in accordance with the provisions of Section 5.5.1 hereof and Article IV of the
Terms Supplement and, if necessary, from the Reserve Fund in accordance with the
provisions of Section 5.2 hereof.
The Indenture Trustee shall apply the funds in the Expense
Account to pay Program Operating Expenses and Costs of Issuance. In addition,
the Indenture Trustee may pay expenses relating to the Notes from time to time
from Available Funds on deposit in the Collection Account by transferring the
amount necessary to pay such expenses from the Collection Account to the Expense
Account.
The Indenture Trustee shall pay Program Operating Expenses and
Costs of Issuance from moneys in the Expense Account upon receipt of written
orders or requisitions signed by an Authorized Officer, which shall direct the
payment to designated payees in designated amounts for stated services and
certify that such payment is a proper charge against the Expense Account and is
then due and owing for services rendered or expenses incurred, and in the case
of payments to the Administrator shall certify that such amounts constitute
related Program Operating Expenses described in clause (iv) and clause (v) of
the definition thereof in Section 1.1 hereof and do not exceed the amount of
such Program Operating Expenses permitted to be paid pursuant to Section 6.13
hereof.
SECTION 5.5.5 EXCESS SURPLUS ACCOUNT. On each Monthly
Distribution Date, as provided in the Terms Supplement, any Available Funds
remaining after all required distributions are made on such Distribution Date
shall be deposited to the credit of the Excess Surplus Account in accordance
with the provisions of Section 5.5.1 hereof and Article IV of the Terms
Supplement. Amounts on deposit in the Excess Surplus Account may be transferred
by the Indenture Trustee to the Issuer for deposit under and pursuant to the
provisions of the Delaware Trust at any time upon written request of the Issuer
to the Indenture Trustee; provided that after such withdrawal the Parity
Percentage shall be at least the Parity Percentage Limitation.
46
47
Such request shall be signed by an Authorized Officer. Any Available Funds
transferred to the Issuer from the Excess Surplus Account shall not thereafter
be available to the Indenture Trustee to make payments on the Notes. Until
transferred to the Issuer, amounts on deposit in the Excess Surplus Account
shall be available for transfer by the Indenture Trustee to the Reserve Fund if,
and to the extent that, a deficiency in the Reserve Fund remains after the
transfers from the Collection Account pursuant to Sections 5.2 and 5.5.1 hereof
and Article IV of the Terms Supplement. In the event of such a deficiency, the
Indenture Trustee shall make such a transfer in an amount up to the amount
necessary to eliminate such deficiency. The Issuer may, at any time, direct in
writing that the Indenture Trustee transfer amounts on deposit in the Excess
Surplus Account to the Collection Account or the Reserve Fund.
SECTION 5.5.6 INVESTMENT OF COLLECTION FUND. Moneys in the
Collection Fund, or any Account thereof, pending their application as authorized
herein, shall be invested by the Indenture Trustee in Eligible Investments as
provided in Section 5.7 hereof.
SECTION 5.6 PLEDGE. The Notes of each Series, including the
principal thereof and interest and any Carryover Interest thereon, and any
Issuer Exchange Payments shall be payable solely from the Trust Estate and
secured hereunder solely by (i) (A) the Trust Estate, (B) the Transfer and Sale
Agreement and (C) the Ancillary Agreements, all as provided in this Indenture,
and (ii) any other assets pledged to secure such Series of Notes under a
Supplemental Indenture; PROVIDED, HOWEVER, the Exchange Counterparty in the
Exchange Agreement and the Indenture Trustee, on behalf of the Exchange
Counterparty, herein or in any Supplemental Indenture executed in connection
with the Exchange Agreement, shall waive any and all rights which the Exchange
Counterparty may have to receive any amounts realized by the Indenture Trustee
from foreclosure upon the Trust Estate consisting of its Exchange Agreement and
its Exchange Counterparty Guarantee, if any.
The Notes of a Series, including the principal thereof and
interest and any Carryover Interest thereon shall be secured hereunder by the
pledge of the Trust Estate and all right, title and interest of the Issuer and
the Initial Co-Owner Eligible Lender Trustee in the Transfer and Sale Agreement
and the Ancillary Agreements granted hereby, by the lien thereon and security
interest therein, and by the assignment to the Indenture Trustee of all right,
title and interest of the Issuer and each Eligible Lender Trustee in the Trust
Estate, the Transfer and Sale Agreement and the Ancillary Agreements, without
priority by reason of number, date, purpose, or otherwise, except as otherwise
expressly provided in this Indenture and in the Notes. Senior Issuer Exchange
Payments shall be secured hereunder by the pledge of the Trust Estate and all
right, title and interest of the Issuer and the Initial Co-Owner Eligible Lender
Trustee in the Transfer and Sale Agreement and the Ancillary Agreements granted
hereby, by the lien thereon and security interest therein on an equal priority
with the payment of interest on Senior Notes, and by the assignment to the
Indenture Trustee for the benefit of the Senior Exchange Counterparty of all
rights, title and interest of the Issuer and each Eligible Lender Trustee in the
Trust Estate, the Transfer and Sale Agreement and the Ancillary Agreements.
Subordinate Issuer Exchange Payments shall be secured hereunder by the pledge of
the Trust Estate and all right, title and interest of the Issuer and the Initial
Co-Owner Eligible Lender Trustee in the Transfer and Sale Agreement and the
Ancillary Agreements granted hereby, by the lien thereon and
47
48
security interest therein on an equal priority with the payment of interest on
Subordinate Notes, and by the assignment to the Indenture Trustee for the
benefit of the Subordinate Exchange Counterparty of all rights, title and
interest of the Issuer and each Eligible Lender Trustee in the Trust Estate, the
Transfer and Sale Agreement and the Ancillary Agreements. Each pledge, lien,
security interest and assignment hereunder shall be valid and binding and shall,
except as otherwise expressly provided herein, constitute a lien of equal
priority and charge on the Trust Estate and on all right, title and interest of
the Issuer and the Initial Co-Owner Eligible Lender Trustee in the Transfer and
Sale Agreement and the Ancillary Agreements from time to time held hereunder for
the benefit of the Holders of the Notes of such Series and any Exchange
Counterparty (subject to the provisions of this Indenture permitting the
application of the Trust Estate for the purposes and on the terms and conditions
hereof, including, without limitation, (i) the prior rights of the Indenture
Trustee to any realization from the Indenture Trustee's lien on and security
interest in the Trust Estate, for the payment of the Indenture Trustee's and
each Eligible Lender Trustee's fees and expenses hereunder and (ii) solely with
respect to the Holders of any Subordinate Notes and any Subordinate Exchange
Counterparty, the prior rights of the Holders of the Senior Notes and of any
Senior Exchange Counterparty, to any realization from the Indenture Trustee's
lien on and security interest in the Trust Estate to the full extent provided by
law, prior to all other indebtedness payable from or secured by the Trust Estate
which may hereafter be created or incurred).
Pursuant to this Indenture each of the Issuer and each
Eligible Lender Trustee has granted to the Indenture Trustee a lien on and
security interest in the Trust Estate and all right, title and interest of the
Issuer and the Initial Co-Owner Eligible Lender Trustee in the Transfer and Sale
Agreement and the Ancillary Agreements. Regardless of the time or order of
attachment, or the time, order or manner of perfection, or the time or order of
filing of financing statements, each of the Holders of Notes of a Series by
their purchase thereof, an Exchange Counterparty by execution and delivery of
its Exchange Agreement, the Indenture Trustee, on behalf of itself and the
Holders of such Series and each Eligible Lender Trustee by their respective
execution of this Indenture and any Exchange Agreement, each agrees that each
shall have the following relative priority with respect to the lien on and
security interest in and rights related to the Trust Estate, the Transfer and
Sale Agreement and the Ancillary Agreements:
(i) The Indenture Trustee shall have a first and prior right
to any realization from the Indenture Trustee's lien on and security interest in
the Trust Estate and all right, title and interest of the Issuer and the Initial
Co-Owner Eligible Lender Trustee in the Transfer and Sale Agreement and the
Ancillary Agreements, as security for the payment of the fees and expenses of
the Indenture Trustee and each Eligible Lender Trustee, and any rights that the
Holders of the Notes of such Series or an Exchange Counterparty may have to any
realization from the Indenture Trustee's lien on or security interest in the
Trust Estate, the Transfer and Sale Agreement and the Ancillary Agreements with
respect to the Issuer's obligations under this Indenture with respect to (A) the
Notes of each Series and (B) any Exchange Agreement shall be subordinate to such
first and prior right; and
(ii) The Holders of Senior Notes and any Senior Exchange
Counterparty shall have a second right to any realization from the Indenture
Trustee's lien on and security interest in
48
49
the Trust Estate and all right, title and interest of the Issuer and the Initial
Co-Owner Eligible Lender Trustee in the Transfer and Sale Agreement and the
Ancillary Agreements, as security for the payment and performance of the
Issuer's obligations under this Indenture with respect to (A) such Senior Notes
and (B) any Senior Exchange Agreement in the manner provided in this Indenture.
(iii) The Holders of Subordinate Notes and any Subordinate
Exchange Counterparty shall have a third right to any realization from the
Indenture Trustee's lien on and security interest in the Trust Estate and all
right, title and interest of the Issuer and the Initial Co-Owner Eligible Lender
Trustee in the Transfer and Sale Agreement and the Ancillary Agreements, as
security for the payment and performance of the Issuer's obligations under this
Indenture with respect to (A) the Subordinate Notes and (B) any Subordinate
Exchange Counterparty in the manner provided in this Indenture.
Subject to the priorities established in this Section 5.6, a
Holder, an Exchange Counterparty, an Eligible Lender Trustee or the Indenture
Trustee shall not contest, or join in any contest of, the validity, perfection,
priority or enforceability of the lien or security interest in or right with
respect to the Trust Estate, the Transfer and Sale Agreement or the Ancillary
Agreements granted or provided for herein.
The covenants and agreements herein set forth to be performed
by or on behalf of the Issuer shall be for the equal and proportionate benefit,
security and protection of all Holders of the Notes of each Series and any
Exchange Counterparty, without preference, priority or distinction as to payment
or security or otherwise of any of the Notes of such Series over any of the
other Notes or over any related Issuer Exchange Payment or any Issuer Exchange
Payment over any of the Notes or over any other Issuer Exchange Payment for any
reason or cause whatsoever, except as expressly provided in this Indenture or
the Notes of such Series, and, except as otherwise herein or therein
specifically provided, all Notes of such Series and any Issuer Exchange Payment
shall be secured equally and ratably hereunder without discrimination or
preference whatsoever.
No Holder of a Note of a Series shall be required to see that
the moneys derived from such Series of Notes are applied to the purpose or
purposes for which the Series of Notes was issued. The validity of any Note of a
Series shall neither be dependent upon nor affected by the validity or
regularity of any proceedings or contracts relating to the Program nor the use
and application of the proceeds of the Notes of such Series.
Nothing in this Section 5.6 or in this Indenture shall prevent
or be construed to prevent any Supplemental Indenture from pledging or otherwise
providing, or the Issuer from providing, in addition to the security given or
intended to be given by this Indenture, additional security for the benefit of
any Series of Notes or any portion thereof or for the benefit of any Issuer
Exchange Payment.
The pledges of, liens on and security interests in, and
assignments to the Indenture Trustee of the Trust Estate and all right, title
and interest of the Issuer and the Initial Co-Owner
49
50
Eligible Lender Trustee in the Transfer and Sale Agreement and the Ancillary
Agreements made hereby include any contract or any evidence of indebtedness or
other rights of the Issuer to receive any of the same, whether now existing or
hereafter coming into existence, and whether now or hereafter acquired, and the
proceeds thereof, with respect to any of the Trust Estate, including, without
limitation, all rights of the Issuer or the Eligible Lender Trustees in and
under the Transfer and Sale Agreement and the Ancillary Agreements, all Financed
Student Loans, all Contracts of Guarantee guaranteeing Financed Student Loans,
any Exchange Agreement, any Exchange Counterparty Guarantee, all Purchase
Agreements (including all rights of the Issuer to the warranties of each Seller
thereunder), the Master Servicing Agreement and the Servicing Agreements
(including all rights of the Issuer to the warranties of each Servicer
thereunder).
SECTION 5.7 INVESTMENTS. The term "Eligible Investments" shall
mean any of the following:
(a) direct obligations of (including obligations issued or
held in book entry form on the books of) the Department of the Treasury of the
United States of America;
(b) obligations of any of the following federal agencies,
which obligations represent the full faith and credit of the United States of
America:
(1) Export-Import Bank,
(2) Farm Credit System Financial Assistance Issuer,
(3) Rural Economic Community Development
Administration (formerly the
Farmers Home Administration),
(4) General Services Administration,
(5) U.S. Maritime Administration,
(6) Small Business Administration,
(7) Government National Mortgage Association (GNMA),
(8) U.S. Department of Housing & Urban Development
(PHAs), and
(9) Federal Housing Administration;
(c) senior debt obligations rated "AAA" or "Aaa" by each
Rating Agency issued by the Federal National Mortgage Association or the Federal
Home Loan Mortgage Corporation, and senior debt obligations of other federal
government-sponsored agencies approved by each Rating Agency;
(d) U.S. dollar denominated deposit accounts, federal funds
and banker's acceptances with domestic commercial banks which have a rating on
their short-term certificates of deposit on the date of purchase of "A1+",
"F-1+" or "P-1" by each Rating Agency and maturing no more than 360 days after
the date of purchase (ratings on holding companies are not considered as the
rating on the bank);
(e) commercial paper which is rated at the time of purchase in
the single highest classification, "A-1+", "F-1+" or "P-1" by each Rating Agency
and which matures
50
51
not more than 270 days after the date of purchase;
(f) investments in a money market fund rated in the highest
applicable rating category by (i) a nationally recognized rating service
acceptable to each Rating Agency or (ii) each Rating Agency;
(g) Pre-refunded Municipal Obligations defined as follows: Any
bonds or other obligations of any state of the United States of America or of
any agency, instrumentality or local governmental unit of any such state which
are not callable at the option of the obligor prior to maturity or as to which
irrevocable instructions have been given by the obligor to call on the date
specified in the notice; and
(1) which are rated, based
on an irrevocable escrow account or fund (the
"escrow"), in the highest rating category of each
Rating Agency; or
(2) (A) which are fully
secured as to principal and interest and redemption
premium, if any, by an escrow consisting only of cash
or obligations described in item (a) above, which
escrow may be applied only to the payment of such
principal of and interest and redemption premium, if
any, on such bonds or other obligations on the
maturity date or dates thereof or the specified
redemption date or dates pursuant to such irrevocable
instructions, as appropriate, and (B) which escrow is
sufficient, as verified by a nationally recognized
independent certified public accountant, to pay
principal of and interest and redemption premium, if
any, on the bonds or other obligations described in
this paragraph on the maturity date or dates
specified in the irrevocable instructions referred to
above, as appropriate;
(h) investment agreements approved in writing by each Rating
Agency and supported by appropriate opinions of counsel for the investment
agreement provider; and
(i) other forms of investments (including repurchase
agreements) approved in writing by each Rating Agency.
Moneys held by the Indenture Trustee for the credit of any
Fund or Account shall be invested by the Indenture Trustee to the fullest extent
practicable and reasonable, in accordance with the provisions hereof, in
Eligible Investments, as directed in writing by the Issuer, and in the absence
of any such directions, in Eligible Investments selected by the Indenture
Trustee with due regard for the fiduciary responsibility of the Indenture
Trustee to maximize investment income and to protect the interests of the
Holders. All Eligible Investments shall be acquired subject to the limitations
on maturities hereinafter in this Section
51
52
5.7 set forth and to any additional limitations or requirements, consistent with
the foregoing provisions of this paragraph, as may be established by Request of
the Issuer. Moneys shall be invested in Eligible Investments with respect to
which payments of principal and interest are scheduled or otherwise payable not
later than the date on which it is estimated that such moneys will be required
by the Indenture Trustee for the purposes intended. Eligible Investments
purchased under a repurchase agreement may be deemed to mature on the date or
dates on which the Indenture Trustee may deliver such Eligible Investments for
repurchase under such agreement. Eligible Investments which may be tendered for
payment of the full principal amount thereof plus accrued interest thereon prior
to the maturity thereof may be deemed to mature on the date or dates on which
they may be so tendered. Eligible Investments acquired as an investment of
moneys in any Fund or Account shall be credited to such Fund or Account. Unless
otherwise provided herein, any earnings on or income from Eligible Investments
shall be credited to the Collection Account in the Collection Fund, as provided
in Section 5.5.6 hereof, except that an amount of interest received with respect
to any Eligible Investment on the first payment of interest after purchase equal
to the amount of accrued interest, if any, paid as part of the purchase price of
such Eligible Investment shall be credited to the Account or Fund from which
such accrued interest was paid.
Investments in any and all Funds and Accounts may be
commingled in a separate fund or funds established by the Indenture Trustee for
purposes of making, holding and disposing of investments, notwithstanding
provisions herein for transfer to or holding in or to the credit of particular
Funds and Accounts amounts received or held by the Indenture Trustee hereunder,
provided that the Indenture Trustee shall at all times account for such
investments strictly in accordance with the Funds and Accounts to which they are
credited and otherwise as provided in this Indenture. The Indenture Trustee may
act as principal or agent in the acquisition or disposing of any Eligible
Investment. The Indenture Trustee may sell at the best price obtainable, or
present for redemption, any Eligible Investment so purchased whenever it shall
be necessary to provide moneys to meet any required payment, transfer,
withdrawal or disbursement from the Fund or Account to which such Eligible
Investment is credited, and the Indenture Trustee shall not be liable or
responsible for any loss resulting from the acquisition or disposition of such
Eligible Investment in accordance herewith.
SECTION 5.8 EXCHANGE AGREEMENTS; COUNTERPARTY EXCHANGE
PAYMENTS; ISSUER EXCHANGE PAYMENTS. The Issuer hereby authorizes and directs the
Indenture Trustee to acknowledge and agree to any Exchange Agreement hereafter
entered into by the Issuer and an Exchange Counterparty under which (a) the
Issuer may be required to make, from time to time, Issuer Exchange Payments and
(b) the Indenture Trustee may receive, from time to time, Counterparty Exchange
Payments for the account of the Issuer. The Issuer shall not execute and deliver
any Exchange Agreement unless at the time of entering into such Exchange
Agreement (i) except in the case of any Exchange Agreement executed in
connection with the execution and delivery of this Indenture, the Issuer and the
Indenture Trustee enter into a Supplemental Indenture in connection with the
execution and delivery of the Exchange Agreement, and (ii) the Issuer obtains
written evidence from each Rating Agency then rating any Outstanding Notes that
the execution and delivery of the Exchange Agreement will not adversely affect
such Rating Agency's rating on such Notes; provided, however, that in any event
the long-term debt
52
53
securities of any Exchange Counterparty must be rated at least Aa1 (or its
equivalent) from a Rating Agency. In connection with the execution of any
Exchange Agreement simultaneously with the execution and delivery of this
Indenture, the Indenture Trustee, on behalf of the Exchange Counterparty, hereby
waives any and all rights which the Exchange Counterparty may have to receive
any amounts realized by the Indenture Trustee from foreclosure upon the Trust
Estate consisting of its Exchange Agreement and its Exchange Counterparty
Guarantee, if any. In connection with the execution of any Exchange Agreement,
the Indenture Trustee, on behalf of the Exchange Counterparty, shall waive in
the Supplemental Indenture executed in connection with the Exchange Agreement
any and all rights which the Exchange Counterparty may have to receive any
amounts realized by the Indenture Trustee from foreclosure upon the Trust Estate
consisting of its Exchange Agreement and its Exchange Counterparty Guarantee, if
any.
No later than the Business Day immediately preceding each date
on which a Counterparty Exchange Payment or Issuer Exchange Payment is due
pursuant to the applicable Exchange Agreement through and including the
termination date of an Exchange Agreement, the Issuer shall give written notice
to the Indenture Trustee stating either (a) the amount of any Counterparty
Exchange Payment due to be received by the Indenture Trustee for the account of
the Issuer no later than each such date or (b) the amount of any Issuer Exchange
Payment to be paid to the Exchange Counterparty on each such date. If the
Indenture Trustee fails to receive such written notification from the Issuer by
the end of such Business Day, it shall immediately notify the Issuer of such
fact in writing.
On any Business Day on which a Counterparty Exchange Payment
is due pursuant to the applicable Exchange Agreement in accordance with the
written notification received from the Issuer, the Indenture Trustee shall
deposit all moneys received representing such Counterparty Exchange Payment in
the Collection Account to be applied in accordance with the provisions of
Section 5.5.1 hereof and Article IV of the Terms Supplement. The Indenture
Trustee shall notify the Issuer on such Business Day, if (a) the amount received
from the Exchange Counterparty is not equal to the amount specified in the
written notification of the Issuer, (b) no amount is received from the Exchange
Counterparty or (c) the amount received is not received in freely transferable
funds.
On any date with respect to which an Issuer Exchange Payment
is due in accordance with the written notification received from the Issuer or,
with respect to a payment in respect of an early termination date, from the
Exchange Counterparty, the Indenture Trustee shall make payment to the Exchange
Counterparty of the amount of the Issuer Exchange Payment specified in such
written notification of the Issuer or the Exchange Counterparty, as the case may
be, due on such date from moneys in the Note Payment Account by the deposit or
wire transfer of freely transferable funds to the credit of the account of the
Exchange Counterparty specified in such written notification of the Issuer or
the Exchange Counterparty, as the case may be.
Nothing in this Indenture shall prohibit, or be construed as
prohibiting, an Issuer Exchange Payment or Counterparty Exchange Payment from
being made on a date other than a Distribution Date.
53
54
SECTION 5.9 TERMINATION. When no Notes remain Outstanding and
all amounts due or to become due hereunder have been paid in full or provided
for to the satisfaction of the Indenture Trustee, the Indenture Trustee shall
transfer to the Issuer or to any person designated by the Issuer, including,
without limitation, to an Eligible Lender Trustee or its duly appointed
successor, upon the written request of the Issuer, all balances of all Funds and
Accounts established hereby, except that Financed Student Loans included in the
balances of the Student Loan Portfolio Fund shall not be transferred to the
Issuer unless, at the time of such transfer, the Issuer is an eligible lender
under the Higher Education Act or the Higher Education Act permits transfer of
such Student Loans to a person other than an eligible lender and except that the
Indenture Trustee shall retain and hold in the Expense Account in the Collection
Fund an amount estimated by the Indenture Trustee to be necessary to reimburse
the Secretary of Education for any excess payments by the Secretary of Education
to the Indenture Trustee in respect of the Financed Student Loans.
54
55
ARTICLE VI
COVENANTS TO SECURE NOTES
The covenants and agreements of the Issuer, each Eligible
Lender Trustee and the Indenture Trustee contained in Article VI of the
Indenture shall be applicable to, and shall be made with respect to, any
Exchange Counterparty, and the Issuer, each Eligible Lender Trustee and the
Indenture Trustee hereby make such covenants and agreements with any such
Exchange Counterparty. The Issuer, each Eligible Lender Trustee and the
Indenture Trustee shall have the same responsibilities and obligations under
this Article VI with respect to any Exchange Counterparty as each has with
respect to the Holders, except for such responsibilities and obligations which,
of necessity, apply only to the Holders of Notes.
The Issuer, each Eligible Lender Trustee and the Indenture
Trustee, as the case may be, hereby covenant and agree with the purchasers and
Holders of the Notes as follows:
SECTION 6.1 ADMINISTRATION OF THE PROGRAM. The Issuer shall
administer, operate and perform all acts and things required to administer,
operate and maintain the Program in strict compliance with the law, including,
without limitation, the Higher Education Act, in such manner as to insure that
the Program and the Financed Student Loans will benefit, to the optimum extent,
from any Guarantee, and Interest Subsidy Payments and Special Allowance Payments
(to the extent, if any, allowed) in respect of Student Loans pursuant to the
Higher Education Act or other applicable federal statutes.
SECTION 6.2 CONTRACTS OF GUARANTEE. So long as any Notes are
Outstanding and unpaid, each Eligible Lender Trustee and the Indenture Trustee
(a) will, from and after the date on which each Eligible Lender Trustee and the
Indenture Trustee shall have succeeded to the rights and interests of any Seller
under a Contract of Guarantee covering a Financed Student Loan, maintain such
Contract of Guarantee and diligently enforce their rights thereunder; (b) will
enter into such other similar or supplemental agreements as the Issuer shall
determine are required to maintain benefits for all Financed Student Loans
covered thereby and shall notify in writing each Eligible Lender Trustee and/or
the Indenture Trustee; and (c) will not voluntarily consent to or permit any
rescission of or consent to any amendment to or otherwise take any action under
or in connection with any such Contract of Guarantee or any similar or
supplemental agreement which in any manner will materially adversely affect the
rights of the Holders.
SECTION 6.3 ACQUISITION, COLLECTION AND ASSIGNMENT OF STUDENT
LOANS; COMPLIANCE WITH LAW. The Issuer shall Finance directly, or indirectly
through an Eligible Lender Trustee, only Student Loans with moneys under this
Indenture and shall diligently cause to be collected all principal and interest
payments on each Financed Student Loan, and grants, subsidies, donations,
Guarantee Payments, Interest Subsidy Payments, Special Allowance Payments (to
the extent, if any, allowed) and all defaulted payments Guaranteed by a
Guarantee Agency or the Secretary of Education which relate to any Financed
Student Loan. The Issuer shall also make, or cause to be made by each Servicer,
every effort to perfect the claims of the Issuer and each Eligible Lender
Trustee for payment from the Guarantee Agency or the Secretary
55
56
of Education, as soon as possible, of all amounts related to each Financed
Student Loan. The Issuer and each Eligible Lender Trustee, at the Issuer's
written request, shall assign or cause to be assigned each Financed Student Loan
for payment of Guarantee benefits at the earliest date permitted under
applicable law and regulations. The Issuer and each Eligible Lender Trustee, at
the Issuer's written request, shall comply with all State and federal statutes,
rules and regulations which apply to the Program and to Financed Student Loans,
including, the Higher Education Act.
SECTION 6.4 ENFORCEMENT OF FINANCED STUDENT LOANS. The Issuer
and each Eligible Lender Trustee, at the Issuer's written request, shall cause
to be diligently taken all reasonable steps, actions and proceedings necessary
for the enforcement of all terms, covenants and conditions of all Financed
Student Loans and agreements in connection therewith, including the prompt
payment of all principal and interest payments and all other amounts due
thereunder. The Issuer and each Eligible Lender Trustee, at the Issuer's written
request, shall at all times, to the extent permitted by law, defend, enforce,
preserve and protect the rights and privileges of the Issuer, each such Eligible
Lender Trustee and of the Holders under or with respect to each Financed Student
Loan and agreement in connection therewith. The Issuer and each Eligible Lender
Trustee shall not consent, or agree to or permit any amendment or modification
of any Financed Student Loan or agreement in connection therewith which will in
any manner materially adversely affect the rights or security of the Holders or
of any Exchange Counterparty under this Indenture or the Guarantee of such
Financed Student Loans. Nothing in this Indenture shall be construed to prevent
the Issuer or an Eligible Lender Trustee from permitting a student borrower to
settle a default or cure a delinquency on any Financed Student Loan on such
terms as shall be required by law or consolidate any Financed Student Loan with
another Lender.
SECTION 6.5 ENFORCEMENT OF MASTER SERVICING AGREEMENT AND
SERVICING AGREEMENTS; REMOVAL OF SERVICER. The Issuer shall cause to be
diligently enforced and taken all reasonable steps, actions and proceedings
necessary for the enforcement of all terms, covenants and conditions of the
Master Servicing Agreement and the Servicing Agreements, including the prompt
payment of all principal and interest payments, all Interest Subsidy Payments,
all Special Allowance Payments (to the extent, if any, allowed), all defaulted
payments Guaranteed by a Guarantee Agency or the Secretary of Education which
relate to any Financed Student Loan and all other amounts due the Issuer
thereunder. The Issuer shall at all times, to the extent permitted by law, cause
to be defended, enforced, preserved and protected the rights and interests of
the Issuer and of the Holders under or with respect to the Master Servicing
Agreement and the Servicing Agreements. The Issuer shall not consent or agree to
or permit any amendment or modification of the Master Servicing Agreement or any
Servicing Agreement which will in any manner materially adversely affect the
rights or security of the Holders under this Indenture. Upon termination or
expiration of the Master Servicing Agreement or any Servicing Agreement, the
Issuer shall take all appropriate steps to maintain adequate provision for the
administration, servicing and collection of the Financed Student Loans. The
Issuer shall notify the Indenture Trustee and each Rating Agency if either a
successor Master Servicer or Servicer is appointed and shall send a copy of any
amendment or supplement to the Master Servicing Agreement or any Servicing
Agreement in connection therewith.
SECTION 6.6 ENFORCEMENT OF PURCHASE AGREEMENTS. The Issuer
shall cause to
56
57
be diligently enforced and taken all reasonable steps, actions and proceedings
necessary for the enforcement of all terms, covenants and conditions of its
rights under any Purchase Agreements, including warranties with respect to the
Student Loans and Guarantees thereof and including the prompt payment of all
amounts due the Servicers and the Issuer thereunder, to the extent of the
Issuer's rights under such Purchase Agreements. The Issuer shall at all times,
to the extent permitted by law, cause to be defended, enforced, preserved and
protected the rights and interests of the Issuer, of the Holders and of each
Exchange Counterparty under or with respect to the Purchase Agreements. The
Issuer shall not consent or agree to or permit any amendment or modification of
any of its rights under a Purchase Agreement which will in any manner materially
adversely affect the rights or security of the Holders or of any Exchange
Counterparty under this Indenture.
SECTION 6.7 BOOKS OF ACCOUNT; ANNUAL AUDIT. The Issuer shall
cause to be kept and maintained, or cause the Indenture Trustee to keep and
maintain, proper books of record and account relating to the Program in which
full, true and correct entries will be made of all dealings or transactions of
or in relation to the Program, the proceeds of the Notes, the Available Funds
and all Funds and Accounts. Such books of record and account shall be made
available for inspection by the Indenture Trustee (or the Issuer, as the case
may be) and by any Holder of more than ten percent (10%) of the aggregate
principal amount of Notes Outstanding, at reasonable hours and under reasonable
circumstances. Within one hundred twenty (120) days after the end of each Fiscal
Year, the Issuer shall cause such books of record and account to be audited by a
firm of independent certified public accountants of national reputation. A copy
of each audit report, annual balance sheet and income and expense statement
showing in reasonable detail the financial condition of the Program as of the
close of each Fiscal Year, summarizing in reasonable detail the income and
expenses for such year, and containing such other reviews or reports as may be
required by the Higher Education Act, including a report of the transactions
relating to the Funds and Accounts, shall be filed promptly with the Indenture
Trustee and shall be available for inspection by any Holder. Any financial
statements prepared in connection with the foregoing may be presented on a
consolidated or combined basis with other programs of the Issuer, provided that
such financial statements for the Program are separately identified and only to
the extent that such basis of reporting is not inconsistent with that required
by this Section 6.7.
The Issuer, pursuant to Section 314(a) of the Trust Indenture
Act, shall:
(a) file with the Indenture Trustee, within fifteen (15) days
after the Issuer is required to file the same with the
Commission, copies of the annual reports and of the
information, documents and other reports (or copies of
such portions of any of the foregoing as the Commission
may from time to time by rules and regulations prescribe)
which the Issuer may be required to file with the
Commission pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934; or, if the Issuer is not
required to file information, documents or reports
pursuant to either of such Sections, then it shall file
with the Indenture Trustee and the Commission, in
accordance with the rules and regulations prescribed from
time to time by the Commission, such of the supplementary
and periodic information, documents and reports which may
be
57
58
required pursuant to Section 13 of the Securities
Exchange Act of 1934 in respect of a security listed
and registered on a national securities exchange as
may be prescribed from time to time in such rules and
regulations;
(b) file with the Indenture Trustee and the Commission,
in accordance with the rules and regulations
prescribed from time to time by the Commission, such
additional information, documents and reports with
respect to compliance by the Issuer, as the case may
be, with the conditions and covenants of this
Indenture as may be required from time to time by
such rules and regulations; and
(c) transmit within thirty (30) days after the filing
thereof with the Indenture Trustee, in the manner and
to the extent provided in Section 313(c) of the Trust
Indenture Act, such summaries of any information,
documents and reports required to be filed by the
Issuer pursuant to clauses (a) and (b) of this
paragraph as may be required by the rules and
regulations prescribed from time to time by the
Commission.
SECTION 6.8 PUNCTUAL PAYMENT OF NOTES. The Issuer shall duly
and punctually pay, or cause to be paid, the principal of and interest on each
Note on the dates, at the places and in the manner provided in the Notes
according to the true intent and meaning thereof, but only from the Trust
Estate, and the Issuer shall faithfully do and perform and at all times fully
observe and keep any and all of its covenants, undertakings, stipulations and
provisions contained in the Notes and this Indenture.
SECTION 6.9 FURTHER ASSURANCES. The Issuer and each Eligible
Lender Trustee, at the written request of the Issuer, shall at any and all
times, make, do, execute, acknowledge, file, record and deliver all and every
such further resolutions, indentures, acts, deeds, conveyances, assignments,
transfers, assurances and other documents, including financing statements and
continuation statements, as may be necessary or desirable for the better
assuring, conveying, granting, assigning, perfecting and confirming of any and
all of the Trust Estate, the Transfer and Sale Agreement and the Ancillary
Agreements hereby pledged or charged with or assigned to the payment of the
Notes, or intended so to be, or which the Issuer or any Eligible Lender Trustee
may hereafter become bound to pledge or charge or assign.
SECTION 6.10 PROTECTION OF SECURITY. The Issuer is duly
authorized under its Articles of Association, its By-Laws, the Delaware Trust
Agreement and applicable law to own student loan notes, directly or indirectly
through an Eligible Lender Trustee, and the other assets pledged to the payment
of the Notes and to pledge, to grant, or cause to be granted, a lien on and a
security interest in, and to assign, or cause to be assigned, the Trust Estate,
and all right, title and interest of the Issuer and the Initial Co-Owner
Eligible Lender Trustee in the Transfer and Sale Agreement and the Ancillary
Agreements in the manner and to the extent provided in this Indenture. Each of
the Trust Estate, the Transfer and Sale Agreement and the Ancillary Agreements
is and will be free and clear of any pledge, lien, security interest, charge or
encumbrance thereon or with respect thereto prior to, or of equal rank with, the
pledge, lien, security interest and assignment created by this Indenture, except
as otherwise expressly provided or permitted herein, and all action on the part
of the Issuer to that end has been duly and
58
59
validly taken. The Issuer is duly authorized under its Articles of Association,
its By-Laws, the Delaware Trust Agreement and applicable law to enter into this
Indenture. The Notes are and will be legal, valid and binding limited
obligations of the Issuer enforceable in accordance with their respective terms
and the terms of this Indenture and each Supplemental Indenture. The Issuer and
each Eligible Lender Trustee shall at all times, to the extent permitted by law,
defend, preserve and protect the pledge of, lien on, security interest in and
assignment of the Trust Estate, the Transfer and Sale Agreement and the
Ancillary Agreements, the priority of such pledge, lien, security interest and
assignment and all the rights of the Holders and each Exchange Counterparty
thereto against all claims and demands of all persons whomsoever. The pledge of,
lien on, security interest in and assignment of the Trust Estate, the Transfer
and Sale Agreement and the Ancillary Agreements made hereby includes the pledge
of, any lien on, security interest in and assignment of any contract or any
evidence of indebtedness or other right of the Issuer and each Eligible Lender
Trustee to receive any of the same, whether now existing or hereafter coming
into existence or acquired and the proceeds thereof, including, without
limitation, all Contracts of Guarantee covering Financed Student Loans, all
Purchase Agreements, the Master Servicing Agreement and all Servicing
Agreements.
SECTION 6.11 NO ENCUMBRANCES. The Issuer and each Eligible
Lender Trustee shall not create, or permit the creation of, any pledge, lien,
charge or encumbrance upon the Trust Estate, the Transfer and Sale Agreement or
the Ancillary Agreements except only as provided in or permitted by this
Indenture. The Issuer shall not issue any obligations, notes, securities or
other evidences of indebtedness, other than the Notes as permitted by this
Indenture secured by a pledge of the Trust Estate, the Transfer and Sale
Agreement and the Ancillary Agreements creating a lien or charge on the Trust
Estate, the Transfer and Sale Agreement and the Ancillary Agreements equal or
superior to the lien of this Indenture; provided, that nothing in this Indenture
shall prevent the Issuer from issuing evidences of indebtedness secured by a
pledge of the Trust Estate, the Transfer and Sale Agreement or the Ancillary
Agreements subordinate in priority to that of the Notes, or secured by a pledge
of the Trust Estate, the Transfer and Sale Agreement or the Ancillary Agreements
arising on or after such date as the pledge of the Trust Estate, the Transfer
and Sale Agreement and the Ancillary Agreements hereunder shall be discharged
and satisfied as provided in this Indenture, or from issuing notes or other
evidences of indebtedness of the Issuer (whether or not under other indentures
in order to fund the Program or other programs of the Issuer) secured by assets
and revenues of the Issuer other than the Trust Estate.
SECTION 6.12 COMPLIANCE WITH INDENTURE. The Issuer shall not
issue, or permit to be issued, any Notes in any manner other than in accordance
with the provisions of this Indenture and shall not suffer or permit any Event
of Default to occur under this Indenture, but shall faithfully observe and
perform all the covenants, conditions and requirements hereof. The Issuer, for
itself, its successors and assigns, represents, covenants and agrees with the
Holders, as a material inducement to the purchase and holding of the Notes, that
so long as any of the Notes remain Outstanding and the principal thereof or
interest thereon is unpaid or unprovided for, it shall faithfully perform all of
the covenants and agreements contained in this Indenture and the Notes.
59
60
SECTION 6.13 LIMITATION ON PROGRAM OPERATING EXPENSES. The
Issuer shall not permit the Program Operating Expenses described in clauses (iv)
and (v) of the definition thereof to exceed in any Fiscal Year an amount equal
to 0.10% (ten basis points) of the average aggregate outstanding principal
balance of the Financed Student Loans during such Fiscal Year, unless (i) the
Issuer shall have delivered to the Indenture Trustee and each Rating Agency a
revised statement of such Program Operating Expenses and such supporting data as
each Rating Agency may reasonably request, (ii) each such Rating Agency shall
have confirmed that such revised statement will not adversely affect the rating
of such Rating Agency on the Notes and (iii) the Issuer shall have delivered a
Cash Flow Statement giving effect to such revised Program Operating Expenses
satisfactory to the Indenture Trustee. Thereafter, such Program Operating
Expenses shall not exceed those projected in such revised statement until a
further revised statement is delivered and approved as aforesaid.
SECTION 6.14 NOTICE OF ADDITIONAL GUARANTEE AGENCIES OR
SERVICERS. The Issuer shall give notice to each Rating Agency of the appointment
of (i) any Guarantee Agency in addition to the Guarantee Agencies set forth on
Schedule I hereto and (ii) any Servicer in addition to the Servicers set forth
on Schedule II hereto.
SECTION 6.15 ISSUER TO FURNISH INDENTURE TRUSTEE NAMES AND
ADDRESSES OF HOLDERS. In accordance with Section 312(a) of the Trust Indenture
Act, the Issuer shall furnish or cause to be furnished to the Indenture Trustee:
(a) semi-annually with respect to each Series of Notes on
January 15 and July 15 of each year or upon such other
dates as are set forth in or pursuant to a resolution of
the board of directors of the Co-Owner Trustee or a
Supplemental Indenture, a list, in each case in such form
as the Indenture Trustee may reasonably require, of the
names and addresses of Holders as of the applicable date,
and
(b) at such other times as the Indenture Trustee may request
in writing, within 30 days after the receipt by the Issuer
of any such request, a list of similar form and content as
of a date not more than 15 days prior to the time such
list is furnished,
provided, however, that so long as the Indenture Trustee is the Registrar no
such list shall be required to be furnished.
SECTION 6.16 UNDERTAKING FOR COSTS. The Issuer and the
Indenture Trustee agree, and each Holder by such Holder's acceptance of a 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 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 6.16 shall not apply to (i) any suit instituted by
the
60
61
Indenture Trustee, (ii) any suit instituted by any Holder, or group of
Holders, in each case holding in the aggregate more than ten percent (10%) of
the Outstanding principal amount of the Notes or (iii) any suit instituted by
any Holder for the enforcement of the payment of the principal of, premium, if
any, or interest on any Note in accordance with Section 8.5 hereof.
61
62
ARTICLE VII
CONCERNING THE INDENTURE TRUSTEE
SECTION 7.1 APPOINTMENT OF, ACCEPTANCE BY, AND DUTIES OF
INDENTURE TRUSTEE; QUALIFICATION; RESIGNATION; REMOVAL; SUCCESSOR
(a) APPOINTMENT, ACCEPTANCE AND DUTIES. The Original Issuer
has appointed Star Bank, National Association to act as the initial Indenture
Trustee under the Original Indenture. Star Bank, National Association (now
Firstar Bank, National Association) accepted such appointment and the trusts
created under the Original Indenture, and agreed to perform said trusts, and
hereby confirms such agreement, but only upon and subject to the following terms
and conditions, to all of which the Issuer and the Holders agree, such agreement
to be evidenced (i) with respect to the Holders by their acceptance of the Notes
and (ii) with respect to the Issuer by its execution and delivery of this
Indenture::
(i) Except during the continuance of an Event of Default,
(A) the Indenture Trustee undertakes
to perform such duties and only such duties as are specifically set forth in
this Indenture, and no implied covenants or obligations shall be read into this
Indenture against the Indenture Trustee; and
(B) 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; but in the case of any such certificates or
opinions which by any provisions hereof are specifically required to be
furnished to the Indenture Trustee, the Indenture Trustee shall be under a duty
to examine the same to determine whether or not they conform as to form with the
requirements of this Indenture and whether or not they conform to the
requirements of this Indenture.
(ii) In case an Event of Default has occurred and is
continuing, the Indenture Trustee shall exercise such of the rights and powers
vested in it by this Indenture, and shall use the same degree of care and skill
in their exercise, as a prudent man would exercise or use under the
circumstances in the conduct of his/her own affairs.
(iii) No provisions of this Indenture shall be construed to
relieve the Indenture Trustee from liability for its own negligent action, its
own negligent failure to act, or its own willful misconduct, except that
(A) this subsection shall not be
construed to affect the limitation of the Indenture Trustee's duties and
obligations provided in subparagraph (i)(A) of this Section or the Indenture
Trustee's right to rely on the truth of statements and the correctness of
opinions as provided in subparagraph (i)(B) of this Section;
(B) the Indenture Trustee shall not be
liable for any error of
62
63
judgment made in good faith by any one of its officers, unless it shall be
established that the Indenture Trustee was negligent in ascertaining the
pertinent facts;
(C) the Indenture Trustee shall not be
liable with respect to any action taken or omitted to be taken by it in good
faith in accordance with the direction of the Holders of not less than a
majority in principal amount of the Notes then Outstanding relating to the time,
method and place of conducting any proceeding for any remedy available to the
Indenture Trustee, or exercising any trust or power conferred upon the Indenture
Trustee, under this Indenture; and
(D) no provision of this Indenture shall
require the Indenture Trustee to expend or risk its own funds or otherwise incur
any 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
for believing that repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it (with the exception of any
action required to be taken under Section 8.8 hereof).
(iv) Before taking any action hereunder requested by any
Holder, the Indenture Trustee may require that it be furnished an indemnity bond
or other indemnity satisfactory to it in its sole discretion by the Holder for
the reimbursement of all expenses to which it may be put and to protect it
against all liability, except liability which results from the negligence or
misconduct of the Indenture Trustee, by reason of any action so taken by the
Indenture Trustee;
(v) Whether or not therein expressly so provided, every
provision of this Indenture relating to the conduct or affecting the liability
of or affording protection to the Indenture Trustee shall be subject to the
provisions of this Section 7.1 and to the provisions of the Trust Indenture Act.
(b) QUALIFICATION. The Indenture Trustee, including any
successor Indenture Trustee shall at all times be a trust company or bank having
the powers of a trust company within the state in which it is located, organized
and doing business under the laws of the United States of America, any state
thereof or the District of Columbia, eligible under Section 310(a) of the Trust
Indenture Act to act as Indenture Trustee under an indenture qualified under the
Trust Indenture Act and have a combined capital and surplus (computed in
accordance with Section 310(a)(2) of the Trust Indenture Act) of at least Ten
Million Dollars ($10,000,000.). The Indenture Trustee shall meet all the
requirements of law for the performance of the duties of the Indenture Trustee
specified herein, shall at all times maintain a rating from any one of the
Rating Agencies in one of their three highest categories (except that Star Bank,
National Association (now Firstar Bank, National Association) shall not be
required to maintain such rating).
(c) RESIGNATION. The Indenture Trustee and any successor to
the Indenture Trustee may resign and be discharged from the trusts created by
this Indenture by giving to the Issuer notice in writing which notice shall
specify the date on which such resignation is to take effect and which date
shall not be sooner than sixty (60) days after the date of giving such notice.
Such resignation shall take effect on the day specified in such notice, if a
successor Indenture Trustee shall have been appointed pursuant to Section 7.1(e)
hereof and is qualified to be the
63
64
Indenture Trustee under the requirements of this Indenture. If no successor
Indenture Trustee has been appointed by the date specified or within a period of
sixty (60) days from the receipt of the notice by the Issuer, whichever period
is the longer, the resigning Indenture Trustee may request a court of competent
jurisdiction to (i) require the Issuer to appoint a successor, as provided in
Section 7.1(e) hereof, within three (3) days of the receipt of citation or
notice by the court, or (ii) appoint an Indenture Trustee having the
qualifications provided in Section 7.1(e) hereof. In no event may the
resignation of the Indenture Trustee be effective until a qualified successor
Indenture Trustee shall have been selected and appointed.
(d) REMOVAL. If at any time,
(1) the Indenture Trustee has failed or shall fail to
comply with the obligations imposed on it under
Section 310(b) of the Trust Indenture Act with
respect to the Notes of any Series after written
request therefor by the Issuer or any Holder of such
Series who has been a bona fide Holder of a Note of
such Series for at least six (6) months, or
(2) the Indenture Trustee shall cease to be eligible
under Section 7.1(b) hereof and shall fail to resign
after written request therefor by the Issuer or any
such Holder, or
(3) the Indenture Trustee shall become incapable of
acting or shall be adjudged a bankrupt or insolvent
or a receiver of the Indenture Trustee or of its
property shall be appointed or any public officer
shall take charge or control of the Indenture Trustee
or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, (i) the Issuer, by or pursuant to a resolution of its board of directors,
may remove the Indenture Trustee with respect to all Notes or the Notes of such
Series, or (ii) subject to Section 315(e) of the Trust Indenture Act, any Holder
who has been a bona fide Holder of a Note of such Series for at least six (6)
months may, on behalf of himself and all others similarly situated, petition any
court of competent jurisdiction for the removal of the Indenture Trustee with
respect to all Notes of such Series and the appointment of a successor Indenture
Trustee or Indenture Trustees.
The Indenture Trustee may be removed at any time with or
without cause by the written direction or upon affirmative vote of the Holders
of a majority in aggregate principal amount of the Directing Notes then
Outstanding or their attorneys-in-fact duly authorized.
(e) SUCCESSOR. In the event of resignation, removal,
ineligibility, disability or refusal to act of the Indenture Trustee, a
successor may be appointed by the Holders of not less than a majority in
aggregate principal amount of the Directing Notes then Outstanding by an
instrument or concurrent instruments in writing signed by such Holders or their
attorneys-in-fact duly authorized provided, nevertheless, that in case at any
time there shall be a vacancy in the office of the Indenture Trustee hereunder,
the Issuer, by an instrument in writing shall appoint a successor to fill such
vacancy until a new Indenture Trustee shall be appointed by the Holders of the
Directing Notes as above authorized; and any such successor Indenture Trustee
appointed by
64
65
the Issuer shall be superseded, immediately and without further act, by the new
Indenture Trustee appointed by the Holders of the Directing Notes. No
resignation or removal of the Indenture Trustee shall be effective until a
successor Indenture Trustee has been appointed and has qualified under this
Section 7.1 and the predecessor Indenture Trustee has been paid all money then
due it under this Indenture.
Any successor Indenture Trustee shall meet the qualifications
of this Section 7.1. Such successor Indenture Trustee shall execute, acknowledge
and deliver to its predecessor and to the Issuer an instrument in writing
accepting such appointment hereunder, and thereupon such successor Indenture
Trustee, without any further act, deed or conveyance, shall become fully vested
with all the rights, powers, trusts, duties and obligations of its predecessor
in trust hereunder, with like effect as if originally named as Indenture
Trustee, but such predecessor shall, nevertheless, on the written request of the
Issuer or such successor execute and deliver an instrument transferring to such
successor Indenture Trustee all rights, powers, trusts, duties and obligations
of such predecessor in trust hereunder and shall deliver all balances (including
lawful money of the United States, Eligible Investments, Financed Student Loans
and all evidences of indebtedness, securities and certificates relating thereto)
held by it to such successor Indenture Trustee, together with an accounting of
balances held by the predecessor Indenture Trustee hereunder. The successor
Indenture Trustee shall have no responsibility for the acts of the predecessor
Indenture Trustee. Upon acceptance of appointment by the successor Indenture
Trustee as provided in this Section 7.1, the Issuer shall give written notice to
each Holder within ten (10) days thereafter.
Any corporation or association into which the Indenture
Trustee may be merged or with which it may be consolidated, or any corporation
or association resulting from any merger or consolidation to which the Indenture
Trustee shall be a party, or any corporation or association to which the
Indenture Trustee may sell or transfer all or substantially all of its corporate
trust business, shall be the successor Indenture Trustee under this Indenture
without the execution or filing of any paper or any further act on the part of
the parties hereto, anything herein to the contrary notwithstanding, provided
such Issuer or association meets the qualifications of this Section 7.1.
The Holders agree to the appointment of the Indenture Trustee
under this Indenture and the performance by the Indenture Trustee of the trusts
imposed upon the Indenture Trustee, but only upon the terms and conditions set
forth in this Indenture, such agreement of the Holders being evidenced with
respect to the Holders by their acceptance of the Notes.
SECTION 7.2 APPOINTMENT OF CO-INDENTURE TRUSTEE. It is the
purpose of this Indenture that there shall be no violation of any law of any
jurisdiction (including in particular the Trust Indenture Act, if and when
applicable, and the law of the State) denying or restricting the right of
banking corporations or associations to transact business as the Indenture
Trustee in such jurisdiction. It is recognized that in case of litigation under
this Indenture or any Financed Student Loan or related agreement, and in
particular in case of the enforcement thereof on default, or in case of a
conflict of interest, or in case the Indenture Trustee deems that by reason of
any present or future law of any jurisdiction it may not exercise any of the
powers, rights or
65
66
remedies herein granted to the Indenture Trustee or hold title to the
properties, in trust, as herein granted, or take any other action which may be
desirable or necessary in connection therewith, it may be necessary that the
Indenture Trustee appoint an additional individual or institution as a separate
or co-Indenture Trustee. The following provisions of this Section are intended
to accomplish these ends.
The Indenture Trustee may appoint a co-Indenture Trustee under
this Section 7.2 with the consent of the Issuer. In the event that the Indenture
Trustee so appoints an individual or institution as a separate or co-Indenture
Trustee, each and every remedy, power, right, duty, obligation, claim, demand,
cause of action, immunity, estate, title, interest, pledge and security interest
expressed or intended by this Indenture to be exercised by or vested in or
conveyed to the Indenture Trustee with respect thereto shall be conferred or
imposed upon and exercised or performed by the Indenture Trustee, or the
Indenture Trustee and such separate or co-Indenture Trustee jointly, 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 remedy, power,
right, duty, obligation, claim, demand, cause of action, immunity, estate,
title, interest, pledge and security interest shall be exercised and performed
by such separate or co-Indenture Trustee but shall be exercised only to the
extent necessary to enable such separate or co-Indenture Trustee to exercise
such powers, rights and remedies, and every covenant, duty and obligation
necessary to the exercise thereof by such separate or co-Indenture Trustee shall
run to and be enforceable by either of them.
Should any instrument in writing from the Issuer or each
Eligible Lender Trustee be required by the separate or co-Indenture Trustee so
appointed by the Indenture Trustee for more fully and certainly vesting in and
confirming to him or its such properties, rights, powers, trusts, duties and
obligations, any and all such instruments in writing shall, on request, be
executed, acknowledged and delivered by the Issuer or each Eligible Lender
Trustee. In case any separate or co-Indenture Trustee, or a successor to either,
shall die, become incapable of acting, resign or be removed, all the estates,
properties, rights, powers, trusts, duties and obligations of such separate or
co-Indenture Trustee, so far as permitted by law, shall vest in and be exercised
by the Indenture Trustee until the appointment of a new Indenture Trustee or a
successor to such separate or co-Indenture Trustee.
SECTION 7.3 CERTAIN RIGHTS AND OBLIGATIONS OF THE INDENTURE
TRUSTEE.
The following paragraphs (a) through (j), inclusive, of this
Section 7.3 are subject to Sections 315(a) through 315(d) of the Trust Indenture
Act.
(a) The Indenture Trustee (i) may execute any of the trusts or
powers hereof and perform any of its duties by or through attorneys, agents,
receivers or employees appointed by the Indenture Trustee in the exercise of
reasonable care, (ii) shall be entitled to the advice of counsel concerning all
matters of trusts hereof and duties hereunder, and (iii) may pay reasonable
compensation in all cases to all of those attorneys, agents, receivers and
employees reasonably employed by it in connection with the trusts hereof. The
Indenture Trustee may act upon the opinion or advice of an attorney (who may be
the attorney or attorneys for the Issuer) approved
66
67
by the Indenture Trustee in the exercise of reasonable care. The Indenture
Trustee shall not be responsible for any loss or damage resulting from any
action taken or omitted to be taken in good faith in reliance upon that opinion
or advice. In addition, the Indenture Trustee shall not be answerable for the
default or misconduct of any such attorney, agent or employee selected by it
with reasonable care.
(b) Except as provided herein, the Indenture Trustee shall
have no responsibility or duty with respect to the application of any moneys
paid to the Issuer or to the Servicers.
(c) Except for its certificate of authentication on the Notes
and pursuant to Section 7.1(a)(i)(A), the Indenture Trustee shall not be
responsible for or have any liability for:
(i) any act of the Issuer or any Eligible Lender
Trustee;
(ii) any recital in this Indenture or in the Notes;
(iii) the validity, priority, recording, rerecording,
filing or refiling of this Indenture or any Supplemental Indenture issued
hereunder or of any other document in connection herewith;
(iv) any instrument or document of further
assurance or collateral assignment;
(v) any financing statements, amendments
thereto, or continuation statements;
(vi) the validity of the execution by the
Issuer of this Indenture, any Supplemental Indenture or instruments or documents
of further assurance;
(vii) the sufficiency of the security for the Notes
issued hereunder or intended to be secured hereby; and
(viii) the maintenance of the security hereof.
(d) The Indenture Trustee shall be protected in acting upon
any notice, resolution, request, consent, order, certificate, report, appraisal,
opinion, or other paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties. Any action taken by the
Indenture Trustee pursuant to this Indenture upon the request of any Person who
is a Holder at the time of making the request or giving the authority or consent
shall be conclusive and binding upon all future Holders of the same Note and of
Notes issued in exchange therefor or in place thereof.
(e) Whenever in the administration hereof the Indenture
Trustee shall deem it desirable that a matter be proved or established prior to
taking, suffering, or omitting any action hereunder, the Indenture Trustee
(unless other evidence be herein specifically prescribed), in the absence of bad
faith on its part, may, but shall not be obligated to, rely upon a certificate
signed
67
68
by an Authorized Officer of the Issuer. Prior to the occurrence of a default or
Event of Default hereunder, the Indenture Trustee may accept a similar
certificate to the effect that any particular dealing, transaction or action is
necessary or expedient; provided, that the Indenture Trustee in its discretion
may require and obtain any further evidence which it deems to be necessary or
advisable; and, provided further, that the Indenture Trustee shall not be bound
to secure any further evidence.
(f) At any reasonable time, the Indenture Trustee and its duly
authorized agents, attorneys, experts, engineers, accountants and
representatives (i) may inspect and copy fully all books, papers and records of
the Issuer pertaining to the Notes, and (ii) may take any memoranda from and in
regard thereto as the Indenture Trustee may desire.
(g) The Indenture Trustee shall not be required to give any
bond or surety with respect to the execution of these trusts and powers or
otherwise.
(h) Notwithstanding anything contained elsewhere in this
Indenture, the Indenture Trustee may demand any showings, certificates, reports,
opinions, appraisals and other information, and any corporate action and
evidence thereof, in addition to that required by the terms hereof, as a
condition to the authentication of any Notes or the taking of any action
whatsoever within the purview of this Indenture, if the Indenture Trustee deems
it to be desirable for the purpose of establishing the right of the Issuer to
the authentication of any Notes or the right of any person to the taking of any
other action by the Indenture Trustee; provided, that the Indenture Trustee
shall not be required to make that demand and shall be protected by the
provisions hereof if such demand is not made.
(i) Unless otherwise provided herein, all moneys received by
the Indenture Trustee under this Indenture shall be held in trust for the
purpose for which those moneys were received, until those moneys are used,
applied or invested as provided herein; provided, however, that those moneys
need to be segregated from other moneys, except to the extent required by this
Indenture or by law. The Indenture Trustee shall not have any liability for
interest on any moneys received hereunder, except to the extent expressly
provided herein or agreed in writing with the Issuer.
(j) Any opinions, certificates and other instruments and
documents for which provision is made in this Indenture may be accepted by the
Indenture Trustee, in the absence of bad faith on its part, as conclusive
evidence of the facts and conclusions stated therein and shall be full warrant,
protection and authority to the Indenture Trustee for its actions taken
hereunder. In all cases the Indenture Trustee shall be entitled to rely
conclusively upon the notice of the rate of interest on the Notes announced by
the Calculation Agent pursuant to Section 2.03(a) of the Terms Supplement and
any applicable subsections thereunder.
SECTION 7.4 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT;
EXAMINATION OF EVIDENCE; EVIDENCE OF RIGHTS OF HOLDERS. The Issuer will furnish,
or will cause to be furnished, to the Indenture Trustee any evidence of
compliance with the conditions precedent, if any, provided in this Indenture
(including any covenants compliance with which constitutes a condition
precedent) which relate to any action to be taken by the Indenture Trustee at
the
68
69
request or upon the application of the Issuer. The Indenture Trustee shall
examine such evidence and any evidence furnished to it pursuant to any other
provisions of this Indenture to determine whether or not such evidence conforms
to the requirements of this Indenture.
Any request, consent or other instrument required by this
Indenture to be signed and executed by Holders may be in any number of
concurrent writings of substantially similar tenor and may be signed or executed
by such Holders in person or by agent or agents duly appointed in writing. Proof
of the execution of any such request, consent or other instrument or of a
writing appointing any such agent, or of the ownership of Notes, shall be
sufficient for any purpose of this Indenture and shall be conclusive in favor of
the Indenture Trustee, the Issuer if made in the following manner:
(a) The fact and date of the execution by
any person of any such request, consent or other instrument or writing may be
proved by the affidavit of a witness of such execution or by the certificate of
any notary public or other officer of any jurisdiction, authorized by the laws
thereof to take acknowledgments of deeds, certifying that the person signing
such request, consent or other instrument or writing acknowledged to him the
execution thereof.
(b) The ownership of Notes shall be proved by
the Note registry maintained by the Indenture Trustee pursuant to Section 2.4
hereof. The fact and the date of execution of any request, consent or other
instrument and the amount and distinguishing numbers of Notes held by the person
so executing such request, consent or other instrument may also be proved in any
other manner which the Indenture Trustee may deem sufficient. The Indenture
Trustee may nevertheless, in its discretion, require further proof in cases
where it may deem further proof desirable.
Any request, consent or vote of the Holder of any Note shall
bind every future Holder of the same Note and the Holder of any Note issued in
exchange therefor or in lieu thereof, in respect of anything done or suffered to
be done by the Indenture Trustee, the Issuer in pursuance of such request,
consent or vote.
In determining whether the Holders of the requisite aggregate
principal amount of Notes have concurred in any demand, request, direction,
consent or waiver under this Indenture, Notes which are owned by the Issuer or
by any other direct or indirect obligor on the Notes, or by any person directly
or indirectly controlling or controlled by, or under direct or indirect common
control with, the Issuer or any other direct or indirect obligor on the Notes,
shall be disregarded and deemed not to be Outstanding for the purpose of any
such determination, provided that, for the purpose of determining whether the
Indenture Trustee shall be protected in relying on any such demand, request,
direction, consent or waiver, only Notes which the Indenture Trustee knows to be
so owned shall be disregarded. Notes so owned which have been pledged in good
faith may be regarded as Outstanding for the purposes of this paragraph if the
pledgees shall establish to the satisfaction of the Indenture Trustee the
pledgee's right to vote such Notes and that the pledgee is not a person directly
or indirectly controlling or controlled by, or under direct or indirect common
control with, the Issuer or any other direct or indirect obligor on the Notes.
69
70
In case of a dispute as to such right, any decision by the Indenture Trustee
taken upon the advice of counsel shall provide full protection to the Indenture
Trustee.
SECTION 7.5 PROOFS OF CLAIMS AND OTHER PAPERS AND DOCUMENTS.
The Indenture Trustee may file such proofs of claims and other papers or
documents as may be necessary or advisable in order to have claims of the
Indenture Trustee and of the Holders of the Notes allowed in any judicial
proceedings relative to the Notes and the security therefor.
SECTION 7.6 DEALING WITH THE ISSUER. The Indenture Trustee,
each Eligible Lender Trustee and their respective directors, officers, employees
or agents, may in good faith buy, sell, own, hold and deal in any of the Notes,
and may join in any action which any Holder of a Note may be entitled to take,
with like effect as if the Indenture Trustee or such Eligible Lender Trustee
were not the Indenture Trustee or an Eligible Lender Trustee, respectively,
under this Indenture. The Indenture Trustee or any Eligible Lender Trustee may
in good faith hold any other form of indebtedness of the Issuer, own, accept or
negotiate any drafts, bills of exchange, acceptances or obligations of the
Issuer, and make disbursements for the Issuer and enter into any commercial or
business arrangement therewith, including, without limitation, acting as
Servicer and/or Seller of Financed Student Loans under the Program. The
Indenture Trustee may act as depository for, and permit any of its officers or
directors to act as a member of, or act in any other capacity in respect to, any
committee formed to protect the rights of the Holders or to effect or aid in any
reorganization growing out of the enforcement of the Notes or of this Indenture.
Notwithstanding the foregoing, the Indenture Trustee shall not be responsible
for servicing any Financed Student Loans unless the Indenture Trustee, acting at
its sole discretion, elects to enter into a Servicing Agreement with the Issuer
or the Administrator.
SECTION 7.7 FEES AND REIMBURSEMENT OF INDENTURE TRUSTEE. The
Issuer shall promptly pay to the Indenture Trustee from time to time, but solely
from the Trust Estate, customary compensation for all services rendered by it
hereunder, and also all its reasonable expenses, charges, and other
disbursements and those of its attorneys, agents, and employees incurred in and
about the administration and execution of the trusts hereby created. For
purposes hereof, fees for ordinary services provided for by its applicable
standard fee schedules with respect to such services, in the absence of a
written agreement between the Issuer and the Indenture Trustee with respect to
its compensation for ordinary services rendered hereunder, shall be deemed to be
customary. As security for such payment, each Eligible Lender Trustee and the
Issuer in the granting clauses hereof or a Supplemental Indenture, as the case
may be, has pledged, and granted unto the Indenture Trustee a security interest
in, the Trust Estate hereunder, the Transfer and Sale Agreement and the
Ancillary Agreements, prior to any rights of the Holders; provided, however, so
long as no Event of Default under Section 8.1(1) hereof exists, such pledge and
security interest shall secure payment of the fees and expenses of the Indenture
Trustee incurred hereunder in an amount not to exceed in any one calendar year
$100,000; provided further, however, that if an Event of Default under Section
8.1(1) exists, such pledge and security interest shall secure payment of the
fees and expenses of the Indenture Trustee incurred hereunder without limitation
as to amount so long as such Event of Default continues to exist.
70
71
SECTION 7.8 FEES AND REIMBURSEMENTS OF EACH ELIGIBLE LENDER
TRUSTEE. The Issuer shall promptly pay to each Eligible Lender Trustee from time
to time customary compensation for all services rendered by it under this
Indenture and each Supplemental Indenture hereto and under the applicable
Eligible Lender Trust Agreement, and also all of its respective reasonable
expenses, charges and other disbursements and those of its attorneys, agents and
employees incurred relating to the administration and execution of the trusts
created by this Indenture and further trusts created by any Supplemental
Indenture. For purposes hereof, fees for ordinary services provided for by its
standard fee schedules with respect to such services, in the absence of a
written agreement between the Issuer and an Eligible Lender Trustee or with
respect to its compensation for ordinary services rendered hereunder and under
the Eligible Lender Trust Agreement shall be deemed to be customary. As security
for such payment, each Eligible Lender Trustee and the Issuer in the granting
clauses hereof or in a Supplemental Indenture, as the case may be, has pledged
and granted unto the Indenture Trustee for the fees and expenses of each
Eligible Lender Trustee hereunder and under any Supplemental Indenture and under
the applicable Eligible Lender Trust Agreement a security interest in the Trust
Estate hereunder, the Transfer and Sale Agreement and the Ancillary Agreements,
prior to any rights of the Holders of Notes or; provided, however, so long as no
Event of Default hereunder exists, such pledge and security interest shall
secure payment of such fees and expenses of each Eligible Lender Trustee
incurred with respect to this Indenture and any Supplemental Indenture hereto in
an amount not to exceed in any one calendar year $100,000; provided further,
however, that if an Event of Default hereunder exists, such pledge and security
interest shall secure payment of such fees and expenses, without limitation as
to amount, of each Eligible Lender Trustee so long as such Event of Default
continues to exist.
SECTION 7.9 COVENANTS OF INDENTURE TRUSTEE PURSUANT TO HIGHER
EDUCATION ACT. The Indenture Trustee hereby represents, covenants and agrees as
follows:
1. The Indenture Trustee is an eligible lender under
the Higher Education Act and so long as any of the Notes
remain Outstanding and any Financed Student Loans are held by
the Indenture Trustee under the Indenture, the Indenture
Trustee will remain an eligible lender.
2. The Indenture Trustee will not exercise any of the
rights, duties or privileges under this Indenture
(particularly those enumerated in Article V, Article VII or
Article VIII hereof) in such manner as would cause any
Financed Student Loans to be sold, transferred, assigned or
pledged as security to any person or entity other than an
eligible lender so long as the Higher Education Act prohibits
such sale, transfer, assignment or pledge.
3. The Indenture Trustee will comply with the Higher
Education Act, and will execute such Supplemental Indentures
in accordance with Section 9.1(6) hereof as may from time to
time be required in order for this Indenture, as amended by
any such Supplemental Indenture, to be operative in a manner
consistent with amendments made to the Higher Education Act.
71
72
4. Prior to the Financing of any Student Loan, the
Indenture Trustee shall have received the certificates and
other documents required by Section 5.3 hereof.
The Indenture Trustee and the Issuer hereby acknowledge their
understanding that the Indenture Trustee has special contractual obligations to
the Secretary of Education which must be maintained and preserved in order for
the Indenture Trustee to remain an eligible lender under the Higher Education
Act, and the Indenture Trustee specifically recognizes its obligations
thereunder and in particular such obligations during the administration of the
trust created hereby.
SECTION 7.10 STATEMENTS AND REPORTS BY INDENTURE TRUSTEE OF
FUNDS AND ACCOUNTS AND OTHER MATTERS. Within twenty (20) days following the end
of each calendar month, the Indenture Trustee shall furnish to the Issuer a
statement setting forth (to the extent applicable) with respect to such calendar
month (a) the balances held by the Indenture Trustee at the end of such month to
the credit of each Fund and Account, (b) the principal amount of Notes
Outstanding at the end of such calendar month and the principal amount thereof
redeemed or paid by the Indenture Trustee during such calendar month and (c) any
other information which the Issuer may reasonably request and which is
customarily provided by indenture trustees under trusts similar hereto.
Within sixty (60) days after each April 15 of each year
commencing with the April 15 following the first issuance of Notes under this
Indenture, if required by Section 313(a) of the Trust Indenture Act, the
Indenture Trustee shall transmit, pursuant to Section 313(c) of the Trust
Indenture Act, a brief report dated as of such April 15 with respect to any of
the events specified in such Section 313(a) which may have occurred since the
later of the immediately preceding April 15 or the date of this Indenture. The
Indenture Trustee shall transmit the reports required by Section 313(a) of the
Trust Indenture Act at the time specified therein. Reports pursuant to this
Section 7.10 shall be transmitted in the manner and to the Persons required by
Sections 313(c) and 313(d) of the Trust Indenture Act.
On each Monthly Distribution Date, the Indenture Trustee shall
provide to each Rating Agency and to each Noteholder of the applicable Series of
Notes, a statement substantially in the form of Exhibit A to the Terms
Supplement, setting forth at least the following information with respect to
such Distribution Date or the preceding Collection Period or Collection Periods,
to the extent applicable:
(a) the Principal Factor for each Series of Notes,
as applicable;
(b) the amount of the payment allocable to principal
of each Series of Notes;
(c) the amount of the payment allocable to interest
on such Series of Notes, together with the Series Interest
Rates applicable with respect thereto (indicating, whether
such Series Interest Rates are based on the Formula Rate or on
the Net Loan Rate with respect to such Notes, and specifying
what each such
72
73
Series Interest Rate would have been if it had been calculated
using the alternate basis);
(d) the amount of the payment, if any, allocable to
any Carryover Interest, together with the outstanding amount,
if any, thereof after giving effect to any such distribution;
(e) the Pool Balance, the Parity Percentage and the
Senior Parity Percentage, in each case as of the close of
business on the last day of the preceding Collection Period;
(f) the aggregate outstanding principal amount of
each Series of Notes as of such Monthly Distribution Date,
after giving effect to distributions allocated to principal on
such Distribution Date;
(g) the estimated amount to be allocated to Program
Operating Expenses on the upcoming Monthly Distribution Date;
(h) the amount of the aggregate Realized Losses, if
any, for the preceding Collection Period and the aggregate
amount, if any, received (stated separately for interest and
principal) during such Collection Period relating to Financed
Student Loans for which a Realized Loss was previously
allocated;
(i) the amount of the distribution attributable to
amounts in the Reserve Fund, the Acquisition Fund or other
Account hereunder, the amount of any other withdrawals from
such Funds and other Accounts for such Monthly Distribution
Date, the balance of such Funds and other Accounts on such
Distribution Date, after giving effect to changes therein on
such Distribution Date, the then applicable Parity Percentage
and the amount of the distribution, if any, attributable to
Parity Percentage Payments;
(j) the aggregate amount, if any, paid for Financed
Student Loans purchased from the Student Loan Portfolio Fund
during the preceding Collection Period;
(k) the following information as reported to the
Indenture Trustee by the Issuer or Servicers: the number and
principal amount of Financed Student Loans, as of the end of
the preceding Collection Period, that are (i) 31 to 60 days
delinquent, (ii) 61 to 90 days delinquent, (iii) 91 to 120
days delinquent, (iv) more than 120 days delinquent and (v)
for which claims have been filed with the appropriate
Guarantee Agency or the Secretary of Education and which are
awaiting payment; and
(l) any other information specified in Terms
Supplement.
73
74
Within the prescribed period of time for federal tax reporting
purposes after the end of each calendar year during the term of the Indenture,
the Indenture Trustee shall mail to each Person who at any time during such
calendar year was a Noteholder and received any payment thereon, a statement
containing the information required for such Noteholder's preparation of its
federal income tax returns.
If a Co-Indenture Trustee is appointed pursuant to Section 7.2
hereof and pursuant to such appointment such Co-Indenture Trustee has the
obligation hereunder or under Section 313(a) and (b) of the Trust Indenture Act
to furnish to the Issuer or any other Person any statement, report or
information, such Co-Indenture Trustee shall furnish such statement, report or
information to the Indenture Trustee in sufficient time for the Indenture
Trustee to timely furnish such statement, report or information to the intended
recipient thereof.
SECTION 7.11 ADDITIONAL AUTHENTICATING AGENT. The Indenture
Trustee may at any time, subject to the approval of the Issuer, appoint an
authenticating agent which shall be authorized to act on the Indenture Trustee's
behalf and subject to its direction in the authentication and delivery of Notes
in connection with transfers and exchanges of Notes as fully to all intents and
purposes as though the agent had been expressly authorized to authenticate and
deliver Notes hereunder. Any authenticating agent appointed hereunder shall be a
commercial bank, trust company or other financial institution, in each case
whose debt securities are rated "Baa3/P-3" or higher or "BBB-/A-3" or higher by
a Rating Agency. For all purposes of this Indenture, the authentication and
delivery of Notes by the agent appointed pursuant to this Indenture shall be
deemed to be the authentication and delivery of such Notes by the Indenture
Trustee.
SECTION 7.12 NOTICE TO RATING AGENCIES. The Indenture Trustee
shall give written notice to any Rating Agency that then maintains a rating on
the Notes: (a) if a successor Indenture Trustee is appointed hereunder; (b) if
this Indenture is amended or supplemented; (c) if all Notes are no longer
Outstanding or are defeased; (d) if there is a change in or an addition to
Servicers or Guarantee Agencies or (e) if an Event of Default has occurred and
is continuing.
SECTION 7.13 INDENTURE TRUSTEE NOT LIABLE FOR ACTS OF THE
ISSUER; NO REPRESENTATIONS BY INDENTURE TRUSTEE. The Indenture Trustee shall not
be responsible or have any liability for any act of the Issuer. The Indenture
Trustee shall not be responsible in any manner whatsoever for the correctness of
the recitals, statements and representations of the Issuer in this Indenture and
any and all Supplemental Indentures or in the Notes, all of which are made by
the Issuer solely. Except with regard to the execution of the certificate of
authentication set forth on each Note and as to the authority and eligibility of
the Indenture Trustee hereunder and due execution by the Indenture Trustee
hereof, the Indenture Trustee makes no representation as to the validity of this
Indenture or of the Notes issued hereunder, and the Indenture Trustee shall
incur no liability or responsibility in respect of any such matters.
SECTION 7.14 INDENTURE TRUSTEE NOT RESPONSIBLE FOR CALCULATION
AGENT. The Indenture Trustee shall not be liable or responsible for the actions
of or the failure to act by
74
75
the Calculation Agent under this Indenture or under any Calculation Agent
Agreement. The Indenture Trustee may conclusively rely upon any information
required to be furnished by the Calculation Agent without undertaking any
independent review or investigation of the truth or accuracy of such
information.
SECTION 7.15 INDEMNIFICATION OF THE INDENTURE TRUSTEE AND EACH
ELIGIBLE LENDER TRUSTEE. The Indenture Trustee shall be under no obligation or
duty to perform any act at the request of any Holder or to institute or defend
any suit in respect thereof unless properly indemnified to its satisfaction as
provided in Section 7.1(a) hereof, except as otherwise provided in said Section
7.1(a). The Indenture Trustee shall not be required to take notice, or be deemed
to have knowledge, of any default or Event of Default of the Issuer hereunder
and may conclusively assume that there has been no such default or Event of
Default (other than an Event of Default described in Section 8.1(1) hereof)
unless it shall have actual notice thereof or unless and until it shall have
been specifically notified in writing of such default or Event of Default by a
Holder or the Issuer. The Issuer agrees to indemnify (a) the Indenture Trustee
for, and to hold it harmless against, any loss, liability, or expenses incurred
without negligence or bad faith on its part, arising out of or in connection
with the acceptance or administration of the trust or trusts hereunder,
including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its powers or
duties hereunder and (b) each Eligible Lender Trustee for, and to hold it
harmless against, any loss, liability or expenses incurred without negligence or
bad faith on its part, arising out of or in connection with (i) the acceptance
or administration of the trust or trusts under its respective Eligible Lender
Trust Agreement or (ii) the exercise of performance of any of its powers or
duties under this Indenture, including the costs and expenses of defending
itself against any claim or liability in connection with the exercise or
performance of any or its powers or duties under its respective Eligible Lender
Trust Agreement or hereunder; provided, however, that any such indemnification
shall be payable solely out of the Trust Estate.
All expenses and obligations incurred by the Issuer by reason
of the indemnification provided for in this Section 7.15 shall be payable solely
from, as appropriate, the Trust Estate, including, without limitation, the
Excess Surplus Account, in accordance with the provision of Sections 5.5.1,
5.5.4 and 5.5.5 hereof.
SECTION 7.16 INTERVENTION BY THE INDENTURE TRUSTEE. The
Indenture Trustee may intervene on behalf of the Holders, and shall intervene if
requested to do so in writing by the Holders of not less than a majority of the
aggregate principal amount of Notes then Outstanding, in any judicial proceeding
with respect to this Indenture to which the Issuer is a part and which in the
opinion of the Indenture Trustee and its counsel has a substantial bearing on
the interest of the Holders of the Notes. The rights and obligations of the
Indenture Trustee under this Section are subject to the approval of that
intervention by a court of competent jurisdiction. The Indenture Trustee may,
but is not required to, require that an indemnity bond satisfactory to it be
provided to it in accordance with Section 7.1(a) hereof before it takes action
under this Section.
SECTION 7.17 PREFERENTIAL COLLECTION OF CLAIMS AGAINST ISSUER.
The
75
76
Indenture Trustee shall comply with Section 311(a) of the Trust Indenture
Act, excluding any creditor relationship listed in Section 311(b) of the Trust
Indenture Act. An Indenture Trustee who has resigned or been removed shall be
subject to Section 311(a) of the Trust Indenture Act to the extent indicated.
SECTION 7.18 PRESERVATION OF INFORMATION; COMMUNICATION TO
HOLDERS. The Indenture Trustee shall comply with the obligations imposed upon it
pursuant to Section 312 of the Trust Indenture Act.
Every Holder, by receiving and holding the same, agrees with
the Issuer and the Indenture Trustee that no one of the Issuer, the Indenture
Trustee, any Paying Agent or Registrar shall be held accountable by reason of
the disclosure of any such information as to the names and addresses of the
Holders in accordance with Section 312(c) of the Trust Indenture Act, regardless
of the source from which such information was derived, and that the Indenture
Trustee shall not be held accountable by reason of mailing any material pursuant
to a request made under Section 312(b) of the Trust Indenture Act.
SECTION 7.19 SURVIVAL OF CERTAIN PROVISIONS OF THE INDENTURE.
The provisions of Sections 7.1(a), 7.3, 7.4, 7.7, 7.8, 7.9 and 7.15 of this
Article VII shall survive the release, discharge and satisfaction of this
Indenture.
76
77
ARTICLE VIII
DEFAULTS AND REMEDIES
SECTION 8.1 EVENTS OF DEFAULT. The following shall constitute
"Events of Default":
1. Failure in the due and punctual payment of:
(i) the principal of or interest on any Note when due,
either at Final Legal Maturity or upon redemption or
otherwise (excluding, however, (a) any shortfall on a
Distribution Date other than the Legal Final Maturity
of any Series of Notes if Available Funds are
insufficient to pay the related Principal
Distribution Amount on such date, (b) for so long as
any Senior Notes are Outstanding under this
Indenture, any shortfall on a Distribution Date other
than the Legal Final Maturity of any Series of
Subordinate Notes if Available Funds are insufficient
to pay the related Noteholders' Interest Distribution
Amount on such date, and (c) for so long as any
Senior Notes are Outstanding under this Indenture,
any deferral in the payment of interest or principal
on Subordinate Notes on a Distribution Date other
than the Legal Final Maturity of the Subordinate
Notes pursuant to Section 5.5.1 hereof and Article IV
of the Terms Supplement), or
(ii) any Issuer Exchange Payment when due, excluding,
however (a) payment in respect of an early
termination of the Exchange Agreement, (b) for so
long as Senior Notes are Outstanding under this
Indenture, any shortfall on a Distribution Date other
than the Legal Final Maturity of any series of
Subordinate Notes if Available Funds are insufficient
to pay any Subordinate Issuer Exchange Payments
relating to such Subordinate Notes, and (c) for so
long as any Senior Notes are Outstanding under this
Indenture, any deferral in the payment of Subordinate
Issuer Exchange Payments pursuant to Section 5.5.1
hereof and Article IV of the Terms Supplement;
2. Failure by the Issuer in the observance and performance of any
other of the covenants and agreements of the Issuer contained
in this Indenture and the continuation of such failure for a
period of 30 days after written notice thereof is given to the
Issuer from the Indenture Trustee or from the Holders of at
least a majority of the aggregate principal amount of the
Notes then Outstanding under this Indenture;
3. If an order or decree shall be entered, with the consent or
acquiescence of the Issuer, appointing a receiver or other
custodian for the Trust Estate, or approving a petition filed
against the Issuer seeking reorganization or liquidation of
the
77
78
Issuer under the federal bankruptcy laws or any other similar
state or federal law, or if any such order or decree, having
been entered without the consent or acquiescence of the
Issuer, shall not be vacated or discharged or stayed on appeal
within thirty (30) days after the entry thereof; or any
proceeding shall be instituted, with the consent or
acquiescence of the Issuer, for the purpose of effecting a
composition or other arrangement between the Issuer and its
creditors or for the purpose of adjusting the claims of such
creditors pursuant to any federal or state statute, if the
claims of such creditors are under any circumstances payable
from the Trust Estate; or if the Issuer makes an assignment
for the benefit of its creditors, or consents to the
appointment of a receiver, trustee or other custodian for
itself or for the whole or any part of the Trust Estate; or if
(i) the Issuer is adjudged insolvent by a court of competent
jurisdiction, or (ii) an order, judgment or decree be entered
by any court of competent jurisdiction appointing, without the
consent of the Issuer, a receiver, trustee or other custodian
of the Issuer or of the whole or any substantial part of its
property and any of the aforesaid adjudications, orders,
judgments or decrees shall not be vacated or set aside or
stayed within thirty (30) days from the date of entry thereof;
or if the Issuer shall file a petition or answer seeking
reorganization or any arrangement under the federal bankruptcy
laws or any other applicable state or federal law; or if,
under the provisions of any other law for the relief or aid of
debtors, any court of competent jurisdiction shall assume
custody or control of the Issuer or of the whole or any
substantial part of its property, and such custody or control
shall not be terminated within thirty (30) days from the date
of assumption of such custody or control;
4. The entry of a final judgment against the Issuer which
judgment constitutes or could result in (a) a lien or charge
upon the Available Funds or the Trust Estate equal or superior
to the lien granted under this Indenture for the benefit of
the Holders of Senior Notes, (b) if there are no Senior Notes
Outstanding, a lien or charge upon the Available Funds or the
Trust Estate equal or superior to the lien granted under this
Indenture for the benefit of the Holders of Subordinate Notes,
or (c) which materially and adversely affects the ownership,
control or operation of the Program, if such judgment will not
be discharged within 60 days from the entry thereof, or if an
appeal will not be taken therefrom, or from the order, decree
or process upon which or pursuant to which such judgment was
granted or entered, in such manner as to conclusively set
aside the execution or levy under such judgment, order, decree
or process, or the enforcement thereof.
Upon the occurrence of an Event of Default,
(a) in the case of an Event of Default described in clause (1) above,
so long as such Event of Default shall not have been remedied, unless the
principal of all of the Notes shall have already become due and payable, the
Indenture Trustee may, and upon written request of the Holders of at least a
majority of the aggregate principal amount of the Outstanding Directing Notes,
the Indenture Trustee shall, by written notice to the Issuer, declare the
principal of all the
78
79
Notes then Outstanding and the interest and Carryover Interest, if any, accrued
thereon to be due and payable immediately, and upon any such declaration the
same shall become and be immediately due and payable, anything contained in the
Indenture or in any of the Notes to the contrary notwithstanding; or
(b) in the case of an Event of Default described in clauses (2) and (4)
above, so long as such Event of Default shall not have been remedied, unless the
principal of all of the Notes shall have already become due and payable, the
Indenture Trustee may, and upon written request of all of the Holders of the
Directing Notes then Outstanding in the case of an Event of Default under clause
(2) above and at least a majority of the aggregate principal amount of the
Directing Notes then Outstanding in the case of an Event of Default under clause
(4) above, the Indenture Trustee shall, by written notice to the Issuer, declare
the principal of all the Notes then Outstanding and the interest and Carryover
Interest, if any, accrued thereon to be due and payable immediately, and upon
any such declaration the same shall become and be immediately due and payable,
anything contained in the Indenture or in any of the Notes to the contrary
notwithstanding; or
(c) in the case of any Event of Default described in clause (3) above,
so long as such Event of Default shall not have been remedied, the principal of
and all accrued interest and Carryover Interest, if any, on the Notes then
Outstanding shall become immediately due and payable without notice or any
action by the Indenture Trustee of any kind and a declaration of such
acceleration shall be deemed to have been made.
The right of the Indenture Trustee to make any such
declaration as aforesaid, however, is subject to the condition that if, at any
time after such declaration, but before any judgment or decree for the payment
of moneys due shall have been obtained or entered unless the same has been
discharged:
1. all defaults under the Notes or under the Indenture (other than
the payment of principal and interest due and payable solely by
reason of such declaration) shall have been cured to the
satisfaction of the Indenture Trustee or provision deemed by the
Indenture Trustee to be adequate shall have been made therefor,
and
2. the following amounts shall either have been paid by or for the
account of the Issuer or provision satisfactory to the Indenture
Trustee shall have been made for such payment:
(i) all overdue installments of interest upon (a) the Senior Notes
for so long as any Senior Notes are Outstanding, or (b) the
Subordinate Notes if no Senior Notes are Outstanding, and
(ii)the reasonable and proper charges, expenses and liabilities of
the Indenture Trustee, any Exchange Counterparty and the
Noteholders and their respective agents and attorneys, and all
other sums then payable by the Issuer under this Indenture
(except the principal of and interest accrued since the next
preceding
79
80
Distribution Date on the Notes due and payable solely by
virtue of such declaration),
then, the Holders of at least a majority of the aggregate principal amount of
the Directing Notes then Outstanding, by written notice to the Issuer and to the
Indenture Trustee, may rescind such declaration with respect to the Notes and
annul such Event of Default with respect to the Notes, or, if the Indenture
Trustee has acted with respect to the Notes without a direction from the Holders
of at least a majority of the aggregate principal amount of the Directing Notes
Outstanding at the time of such request, and if there has not been theretofore
delivered to the Indenture Trustee written direction to the contrary by the
Holders of at least a majority of the aggregate principal amount of the
Directing Notes then Outstanding, then the Indenture Trustee may annul, by
written notice to the Issuer, such declaration and any such default with respect
to the Notes and its consequences will be annulled; provided that no such
rescission and annulment will extend to or affect any subsequent Event of
Default or impair or exhaust any right or power consequent thereon.
Upon any declaration of acceleration of the Notes hereunder,
the Indenture Trustee shall give notice of such declaration and its consequences
to Holders and to any related Exchange Counterparty in the manner set forth in
Section 8.8 hereof. Notice of such acceleration having been given as aforesaid,
anything contained in this Indenture or in the Notes to the contrary
notwithstanding, interest and Carryover Interest, if any, shall cease to accrue
on the Notes from and after the date set forth in such notice (which shall be
not more than five (5) days from the date of such declaration).
SECTION 8.2 INSPECTION OF BOOKS AND RECORDS. The Issuer
covenants that if an Event of Default shall have happened and shall not have
been remedied, the books of record and account of the Issuer and the Servicers
relating to the Program shall at all times, at reasonable hours and under
reasonable circumstances, be subject to the inspection and use of the Indenture
Trustee and any Holder of at least ten percent (10%) of the aggregate principal
amount of Notes then Outstanding and of their respective agents and attorneys.
The Issuer covenants that if an Event of Default shall have
happened and shall not have been remedied, the Issuer will continue to account,
as a Indenture Trustee of an express trust, for all moneys, securities and
property pledged under this Indenture.
SECTION 8.3 APPLICATION OF MONEYS. In the event that an Event
of Default shall have occurred and be continuing and at any time the moneys held
by the Indenture Trustee will be insufficient for the payment of (i) the
principal of and interest then due on the Notes and/or (ii) any Issuer Exchange
Payment, such moneys (other than moneys held for the payment or redemption of
particular Notes, which proceeds and moneys shall be applied solely to the
payment of principal and interest to Holders other than the Issuer) and all
Available Funds received or collected from the Trust Estate or otherwise for the
benefit or for the account of Holders and/or an Exchange Counterparty by the
Indenture Trustee shall be applied first to the payment of the costs and
expenses of the proceedings resulting in the collection of such moneys, the
expenses, liabilities and advances incurred or made by the Indenture Trustee in
connection
80
81
with such proceedings and to the payment of the other reasonable and proper fees
and expenses of the Indenture Trustee under this Indenture and of such other
expenses as are necessary in the judgment of the Indenture Trustee to prevent
loss of Available Funds and to protect the interests of the Holders and/or each
Exchange Counterparty, and thereafter as follows:
1. If the principal of all of the Notes shall not have become
or has not been declared due and payable,
FIRST, to the payment to the Persons entitled thereto of all
installments of interest then due on the Senior Notes (including any interest on
overdue principal at the rate borne by the respective Senior Notes), and to each
Senior Exchange Counterparty of all Senior Issuer Exchange Payments then due, in
the order that such installments of interest and/or Senior Issuer Exchange
Payments shall have become due, and, if the amounts available shall not be
sufficient to pay in full all installments of interest and/or Senior Issuer
Exchange Payments coming due on the same date, then to the payment thereof
ratably, according to the amount due thereon, to such Persons entitled thereto,
without any discrimination or preference; and
SECOND, to the payment to the Persons entitled thereto, of the
unpaid Noteholders' Principal Distribution Amount and/or principal due and
unpaid on the Senior Notes at the time of such payment without preference or
priority of any Senior Notes over any other Senior Notes, ratably, according to
the Noteholders' Principal Distribution Amount and/or amounts due for principal,
to such Persons entitled thereto without any discrimination or preference; and
THIRD, to the payment to the Persons entitled thereto of all
installments of interest then due on the Subordinate Notes (including any
interest on overdue principal at the interest rates borne by the respective
Subordinate Notes), and to each Subordinate Exchange Counterparty of all
Subordinate Issuer Exchange Payments then due, in the order that such
installments of interest and/or Subordinate Issuer Exchange Payments shall have
become due, and, if the amounts available shall not be sufficient to pay in full
all installments of interest and/or Subordinate Issuer Exchange Payments coming
due on the same date, then to the payment thereof ratably, according to the
amount due thereon, to such Persons entitled thereto, without any discrimination
or preference; and
FOURTH, to the payment to the Persons entitled thereto of the
unpaid Noteholders' Principal Distribution Amount and/or principal due and
unpaid on the Subordinate Notes at the time of such payment without preference
or priority of any Subordinate Notes over any other Subordinate Notes, ratably,
according to the amounts due for principal, to such Persons entitled thereto
without any discrimination or preference.
2. If the principal of all of the Notes shall have become or
have been declared due and payable,
FIRST, to the payment of the principal and interest then due
and unpaid on the Senior Notes and all Senior Issuer Exchange Payments then due,
without preference or priority of principal over interest or over any Senior
Issuer Exchange Payment, or of interest over principal or over any Senior Issuer
Exchange Payment, of any installment of interest over any
81
82
other installment of interest, or of any Senior Note over any other Senior Note,
or of any Senior Issuer Exchange Payment over any other Senior Issuer Exchange
Payment, ratably, according to the amounts due respectively for principal and
interest, and all Senior Issuer Exchange Payments to the Persons entitled
thereto without any discrimination or preference; and
SECOND, to the payment of the principal and interest then due
and unpaid on the Subordinate Notes and all Subordinate Issuer Exchange Payments
due, without preference or priority of principal over interest or over any
Subordinate Issuer Exchange Payment, of interest over principal or over any
Subordinate Issuer Exchange Payment, of any installment of interest over any
other installment of interest, or of any Subordinate Note over any other
Subordinate Note, or of any Subordinate Issuer Exchange Payment over any other
Subordinate Issuer Exchange Payment, ratably, according to the amounts due
respectively for principal and interest, and any Subordinate Issuer Exchange
Payment to the Persons entitled thereto without any discrimination or
preference; and
THIRD, to the payment of all Carryover Interest due and unpaid
on the Senior Notes, without preference or priority of any Senior Notes over any
other Senior Notes, ratably, according to the amounts due for Carryover
Interest, to the Persons entitled thereto without any discrimination or
preference.
Whenever moneys are to be applied pursuant to the foregoing
paragraphs, such moneys shall be applied at such times, and from time to time,
as the Indenture Trustee in its sole discretion shall determine, having due
regard to the amount of such moneys available for application and the likelihood
of additional moneys becoming available for such application in the future.
Whenever the Indenture Trustee shall exercise such discretion, it shall fix the
date upon which application is to be made, and upon such date interest and
Carryover Interest, if any, on the amounts of principal to be paid on such date
shall cease to accrue on the Notes. The Indenture Trustee shall give such notice
as it may deem appropriate of the fixing of any such date and shall not be
required to make payment to the Holder of any unpaid Note unless such Note is
presented for appropriate endorsement.
Whenever moneys are to be applied pursuant to the foregoing
paragraphs, irrespective of and whether other remedies authorized shall have
been pursued in whole or in part, the Indenture Trustee may cause any or all of
the Trust Estate to be sold. The Indenture Trustee may, with or without entry,
so sell the Trust Estate and all right, title, interest, claim and demand
thereto and the right of redemption thereof, in one or more parts, at any such
place or places, and at such time or times and upon such notice and terms as the
Indenture Trustee may deem appropriate and as may be required by law and apply
the proceeds thereof in accordance with the provisions of this Section 8.3. Upon
such sale, the Indenture Trustee may make and deliver to the purchaser or
purchasers a good and sufficient assignment or conveyance for the same, which
sale shall be a perpetual bar both at law and in equity against the Issuer and
all Persons claiming such properties. No purchaser at any sale shall be bound to
see to the application of the purchase money or to inquire as to the
authorization, necessity, expediency or regularity of any such sale.
Nevertheless, the Issuer and/or each Eligible Lender Trustee, if so requested by
the Indenture Trustee, shall ratify and confirm any sale or sales by executing
and
82
83
delivering to the Indenture Trustee or to such purchaser or purchasers all
such instruments as may be necessary or in the judgment of the Indenture Trustee
and/or such Eligible Lender Trustee proper for the purpose which may be
designated in such request.
The Indenture Trustee shall not sell or permit the sale or
assignment of any Financed Student Loans or any interest therein (as a part of
the Trust Estate) to any Person who is not an eligible lender under the Higher
Education Act if such Act or the regulations thereunder, or either of them, in
force and effect at the time, prohibit the same.
If and whenever all overdue installments of interest on all
Notes, and all overdue Issuer Exchange Payments, together with the reasonable
and proper charges, expenses and liabilities of the Indenture Trustee, each
Exchange Counterparty, the Holders of Notes, their respective agents and
attorneys, and all other sums payable by the Issuer under this Indenture,
including the principal of and accrued and unpaid interest on all Notes and
amounts due under each Exchange Agreement which shall then be payable by
declaration or otherwise, shall either be paid in full by or for the account of
the Issuer or provision satisfactory to the Indenture Trustee shall be made for
such payment, and all Events of Default under this Indenture or the Notes shall
be made good or secured to the satisfaction of the Indenture Trustee or
provision deemed by the Indenture Trustee to be adequate shall be made therefor,
thereupon the Issuer and the Indenture Trustee shall be restored, respectively,
to their former positions and rights under this Indenture, and all Available
Funds shall thereafter be applied as provided in Article V hereof. No such
resumption of the application of Available Funds as provided in Article V hereof
shall extend to or affect any subsequent Event of Default under this Indenture
or impair any right consequent thereon.
SECTION 8.4 SUITS AT LAW OR IN EQUITY; DIRECTION OF ACTION BY
HOLDERS. If an Event of Default shall happen and shall not have been remedied
within the applicable time period, if any, provided herein, then and in every
such case, the Indenture Trustee either in its own name or as trustee of an
express trust, or as attorney-in-fact for the Holders and/or each such Exchange
Counterparty or in any one or more of such capacities by its agents and
attorneys, shall be entitled and empowered to proceed forthwith to institute
such suits, actions and proceedings at law or in equity against the Issuer for
the collection of all sums due in connection with the Notes and any Issuer
Exchange Payment and to protect and enforce its rights and the rights of the
Holders and each Exchange Counterparty under this Indenture for the specific
performance of any covenant herein contained, or in aid of the execution of any
power herein granted, or for an accounting as Indenture Trustee of any express
trust, or in the enforcement of any legal or equitable right as the Indenture
Trustee, being advised by counsel, shall deem most effectual to enforce any of
its rights, or to perform any of its duties under this Indenture. The Indenture
Trustee shall be entitled and empowered either in its own name or as a trustee
of an express trust, or as attorney-in-fact for the Holders and/or each such
Exchange Counterparty, or in any one or more of such capacities, to file such
proof of debt, claim, petition or other document as may be necessary or
advisable in order to have the claims of the Indenture Trustee, the Holders and
any Exchange Counterparty allowed in any equity, receivership, insolvency,
bankruptcy, liquidation, readjustment, reorganization or other similar
proceedings. For this purpose, subject to the provisions of Section 8.10 hereof,
the Indenture Trustee is hereby irrevocably appointed the true
83
84
and lawful attorney-in-fact of the respective Holders and any Exchange
Counterparty (and the successive Holders by taking and holding the same shall be
conclusively deemed to have so appointed the Indenture Trustee) with authority
to make and file in the respective names of the Holders and any Exchange
Counterparty any such proof of debt, amendment of proof of debt, claim, petition
or other document in any such proceedings, and to receive payment of any sums
becoming distributable on account thereof, and to execute any such other papers
and documents and to do and perform any and all acts and things for and on
behalf of the Holders and any Exchange Counterparty as may be necessary or
advisable in the opinion of the Indenture Trustee in order to have the
respective claims of the Indenture Trustee and the Holders and any Exchange
Counterparty allowed in any such proceedings and to receive payment of and on
account of such claims.
All rights of action under this Indenture may be enforced by
the Indenture Trustee without the possession of any of the Notes or any of the
Exchange Agreements or the production thereof in any suit, action or other
proceeding.
The Holders of at least a majority in aggregate principal
amount of the Outstanding Directing Notes shall have the right, at any time, by
an instrument or instruments in writing executed and delivered to the Indenture
Trustee, to direct the time, method and place of conducting all proceedings to
be taken in connection with the enforcement of the terms and conditions of this
Indenture; provided that (i) such direction shall not be otherwise than in
accordance with the provisions of law and this Indenture ; (ii) the Indenture
Trustee shall not determine that the action so directed would be unjustly
prejudicial to the Holders not taking part in such direction, other than by
effect of the subordination of any of their interests hereunder; and (iii) the
Indenture Trustee may take any other action deemed proper by the Indenture
Trustee which is not inconsistent with such direction.
In case the Indenture Trustee shall have proceeded to enforce
any right or remedy under this Indenture and such proceedings shall have been
discontinued or abandoned for any reason, or shall have been determined
adversely to the Indenture Trustee, then and in every such case the Issuer and
the Indenture Trustee shall be restored to their former positions and rights
hereunder with respect to the Trust Estate, the Transfer and Sale Agreement and
the Ancillary Agreements (subject, however, to such determination), and all
rights, remedies and powers of the Indenture Trustee shall continue as if no
such proceedings have been taken.
SECTION 8.5 SUITS BY INDIVIDUAL HOLDERS OR AN EXCHANGE
COUNTERPARTY. Except as otherwise specifically provided in this Section 8.5, no
Holder or Exchange Counterparty shall have any right to institute any suit,
action or proceeding in equity or at law for the enforcement of any provision
of, or the execution of any trust or for any remedy under, this Indenture unless
(i) such Holder or Exchange Counterparty, as the case may be, previously shall
have given to the Indenture Trustee notice of the Event of Default on account of
which such suit, action or proceeding is to be instituted, (ii) with respect to
any Exchange Counterparty, such Exchange Counterparty is not in default of its
obligations under its respective Exchange Agreement, all obligations of all the
parties under such Agreement have not been satisfied and such Exchange Agreement
has not been terminated, (iii) the Holders of not less than a majority in
aggregate
84
85
principal amount of the Directing Notes then Outstanding shall have filed a
written request with the Indenture Trustee after the right to exercise such
powers or right of action, as the case may be, shall have accrued that such
suit, action or proceeding be instituted, (iv) there shall have been offered to
the Indenture Trustee reasonable security and indemnity against the costs,
expenses and liability to be incurred therein or thereby, (v) the Indenture
Trustee for a period of thirty (30) days after the receipt by it of such notice,
request and offer of indemnity shall have failed to proceed to exercise such
powers or to institute any such action, suit or proceeding, or the Indenture
Trustee shall at any time after such receipt have stated in writing that it
shall not so proceed, and (vi) no direction inconsistent with such written
request shall have been given to the Indenture Trustee pursuant to Section 8.4
hereof by the Holders of at least a majority in aggregate principal amount of
the Directing Note then Outstanding; it being understood and intended that,
except as otherwise above provided, neither an Exchange Counterparty nor one or
more Holders shall have any right in any manner whatsoever by its or their
action to affect, disturb or prejudice the pledge created by this Indenture, or
to enforce any right under this Indenture except in the manner herein provided
and that all proceedings at law or in equity shall be instituted, had and
maintained in the manner herein provided for the benefit of Holders and each
Exchange Counterparty.
Notwithstanding any other provision in this Indenture, each
Holder and each Exchange Counterparty shall have the right, which is absolute
and unconditional as to the payment, respectively, of principal and interest and
which is limited and conditional as to the payment of Carryover Interest, to
receive payment of the principal of, and interest and Carryover Interest, if
any, on such Holder's Note in accordance with the terms thereof and hereof and
of each Issuer Exchange Payment, and, upon the occurrence of an Event of Default
with respect thereto, to institute suit for the enforcement of any such payment,
and nothing in this Indenture shall affect or impair the right of any Holder or
Exchange Counterparty to enforce the payment, respectively, of the principal of
and interest and Carryover Interest, if any, on any Note at and after the
maturity thereof and of each Issuer Exchange Payment at the time, place, from
the source and in the manner provided herein.
Notwithstanding any other provision of this Indenture, the
right of any Holder of any Note to receive payment of the principal of and
interest and Carryover Interest on such Note, on or after the respective due
dates expressed in such Note, or the right of any Exchange Counterparty to
receive payment of any Issuer Exchange Payment, or to institute suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.
SECTION 8.6 REMEDIES NOT EXCLUSIVE. No remedy by the terms of
this Indenture conferred upon or reserved to the Indenture Trustee, the Holders
or an Exchange Counterparty is intended to be exclusive of any other remedy, but
each and every such remedy shall be cumulative and shall be in addition to every
other remedy given under this Indenture or existing at law or in equity or by
statute on or after the date of adoption of this Indenture.
SECTION 8.7 WAIVERS OF DEFAULT. No delay or omission of the
Indenture Trustee, any Holder or any Exchange Counterparty to exercise any right
or power arising upon
85
86
the happening of an Event of Default shall impair any right or power or shall be
construed to be a waiver of any such Event of Default or to be an acquiescence
therein and every power and remedy given by this Article VIII to the Indenture
Trustee, the Holders or any Exchange Counterparty may be exercised from time to
time and as often as may be deemed necessary by the Indenture Trustee, such
Holders or any Exchange Counterparty. No waiver of any Event of Default
hereunder, whether by the Indenture Trustee, any Holder or any Exchange
Counterparty, shall extend to or shall affect any subsequent Event of Default or
shall impair any rights or remedies consequent thereon.
Prior to a declaration accelerating the maturity of the Notes
as provided in Section 8.1 hereof, the Holders of not less than two-thirds (2/3)
in principal amount of the Directing Notes at the time Outstanding and each
Exchange Counterparty (so long as such Exchange Counterparty is not in default
of its obligations under its respective Exchange Agreement and such Exchange
Agreement has not be terminated), or their attorneys-in-fact duly authorized,
may, on behalf of the Holders of all of the Notes and each such Exchange
Counterparty, respectively, waive any past failure under this Indenture and its
consequences with respect to the Notes, except a failure in payment of the
principal of or interest on any of the Notes. The Indenture Trustee shall, upon
the written request of an Exchange Counterparty, except as otherwise provided in
the next succeeding paragraph, waive any failure in the payment of an Issuer
Exchange Payment to such Exchange Counterparty. No such waiver shall extend to
any subsequent or other failure or impair any right consequent thereon.
SECTION 8.8 NOTICE OF EVENTS OF DEFAULT. The Indenture Trustee
shall give written notice to each Exchange Counterparty and all Holders by
registered mail of all Events of Default known to the Indenture Trustee, unless
such Event of Default shall have been cured before the giving of such notice,
within ninety (90) days of the occurrence of the Event of Default or what would
be an Event of Default but for a period of grace provided herein, provided,
however, that if the Indenture Trustee does not become aware of such an Event of
Default until after such 90-day period, then in such case the Indenture Trustee
shall give notice of such Event of Default at the earliest practicable date
within thirty (30) days after the Indenture Trustee becomes aware of the
occurrence of an Event of Default.
SECTION 8.9 COMPUTATIONS. For the purposes of this Article
VIII and Section 7.1(a)(iii)(C) hereof, in determining whether the Holders of a
required principal amount of Notes have concurred in any such direction or
consent, Notes owned by the Issuer, or by any person directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Issuer, shall be disregarded, except for purposes of determining whether the
Indenture Trustee shall be protected in relying on any such direction or
consent, only Notes which the Indenture Trustee knows are so owned shall be so
disregarded.
SECTION 8.10 ARTICLE SUBJECT TO CERTAIN PROVISIONS. The
provisions of this Article VIII are subject to the provisions of Section 7.8
hereof.
86
87
ARTICLE IX
AMENDING AND SUPPLEMENTING OF INDENTURE
SECTION 9.1 AMENDING AND SUPPLEMENTING OF INDENTURE WITHOUT
CONSENT OF HOLDERS. The Issuer, each Eligible Lender Trustee and the Indenture
Trustee, with the written confirmation from each Rating Agency then rating the
Notes that execution of the proposed Supplemental Indenture will not adversely
affect the rating of such Rating Agency on the Outstanding Notes (provided,
however, that such written confirmation shall not be required for a Supplemental
Indenture executed pursuant to item (14) of this Section 9.1), from time to time
and at any time and without the consent or concurrence of any Holder, may
execute a Supplemental Indenture for any one or more of the following purposes:
(1) To make any changes or corrections in this Indenture as
are required for the purpose of curing or correcting any ambiguity or
defective or inconsistent provision or omission or mistake or manifest
error contained in this Indenture or to insert in this Indenture such
provisions clarifying matters or questions arising under this Indenture
as are necessary or desirable;
(2) To add additional covenants and agreements of the Issuer
for the purpose of further securing the payment of the Notes;
(3) To surrender any right, power or privilege reserved to or
conferred upon the Issuer by the terms of this Indenture;
(4) To confirm as further assurance any lien, pledge, security
interest, assignment or charge, or the subjection to any lien, pledge,
security interest, assignment or charge, created or to be created by
the provisions of this Indenture;
(5) To grant to or confer upon the Holders any additional
rights, remedies, powers, authority or security that lawfully may be
granted to or conferred upon them, or to grant to or to confer upon the
Indenture Trustee for the benefit of the Holders or an Exchange
Counterparty any additional rights, duties, remedies, powers or
authority;
(6) To make such amendments to this Indenture as are required
to permit the Indenture Trustee fully to comply with the Higher
Education Act, or as required in order for this Indenture, as amended
by such Supplemental Indenture, not to be contrary to the terms of the
Higher Education Act;
(7) To make such amendments to this Indenture as may be
necessary or convenient to provide for issuance of the Notes in coupon
form or issuance and registration of the Notes in book-entry form and
to provide for other related provisions of the Notes;
(8) To modify, amend or supplement this Indenture or any
indenture supplemental hereto in such manner as to maintain the
qualification hereof or thereof
87
88
under the Trust Indenture Act or any similar federal statute hereafter
in effect, and, if the Issuer and the Indenture Trustee so determine,
to add to this Indenture or any indenture supplemental hereto such
other terms, conditions and provisions as may be permitted by the Trust
Indenture Act or similar federal statute, and which shall not
materially adversely affect the interests of the Holders of the Notes;
(9) To authorize the establishment of agreements providing for
the pledge of funds in excess of the amount required to pay principal
of and interest on the Notes hereunder to other indentures, and for the
pledge of such funds under other indentures to this Indenture;
(10) To permit any changes or modifications hereof required
(a) by a Rating Agency to maintain the outstanding rating on the Notes
or (b) by the issuer of (i) a policy of bond insurance or (ii) any
similar financial guaranty insuring the payment of the principal of and
interest on any Notes to obtain an internal rating of at least
investment grade or as a condition of the issuance of such insurance or
guaranty;
(11) To make the terms and provisions of this Indenture,
including the lien and security interest granted herein, applicable to
an Exchange Agreement;
(12) To make such amendments to this Indenture as may be
necessary to permit the Issuer to make loans under the Higher Education
Act;
(13) To provide for the issuance of credit enhancement,
including, but not limited to, a policy of bond insurance, with respect
to any Series of Notes;
(14) To add any additional Eligible Lender Trustee or replace
any existing Eligible Lender Trustee; or
(15) To make any other amendment which, in the judgment of the
Indenture Trustee, is not to the material prejudice of the Indenture
Trustee, the Holders or any Exchange Counterparty.
The Issuer, each Eligible Lender Trustee and the Indenture
Trustee, from time to time and at any time without the consent or concurrence of
any Holder, may execute a Supplemental Indenture, if the Issuer determines that
the provisions of such Supplemental Indenture are necessary or desirable to
maximize Available Funds.
SECTION 9.2 AMENDMENT OF INDENTURE WITH CONSENT OF HOLDERS AND
EXCHANGE COUNTERPARTIES. The Issuer, each Eligible Lender Trustee and the
Indenture Trustee from time to time and at any time may execute a Supplemental
Indenture, with the prior written consent of the Holders of not less than a
majority in aggregate principal amount of the Directing Notes then Outstanding
(or, with respect to any change affecting only certain Series of Notes, the
Holders of a majority in aggregate principal amount of the Outstanding Notes of
such Series) for the purpose of adding any provisions to, or changing in any
manner or eliminating any of the provisions of, this Indenture, or modifying or
amending the rights and obligations of the Issuer
88
89
hereunder, or modifying or amending in any manner the rights of an Exchange
Counterparty or the Holders of Notes then Outstanding; PROVIDED, HOWEVER, that,
without the specific consent of the Holder of each such Note which would be
affected thereby, no Supplemental Indenture amending or supplementing the
provisions hereof shall: (1) change the Legal Final Maturity for the payment of
the principal of any Note or any date for the payment of interest thereon, or
reduce the principal amount of any Note or, except on an Interest Determination
Date, the Series Interest Rate thereon; or (2) reduce the aforesaid proportion
of Notes the Holders of which are required to consent to any Supplemental
Indenture amending or supplementing the provisions of the Indenture; or (3)
except as shall be otherwise provided herein, give to any Note any preference
over any other Notes secured hereby; or (4) except as shall be otherwise
provided herein, authorize the creation of any pledge of the Trust Estate or all
right, title and interest of the Issuer and the Initial Co-Owner Eligible Lender
Trustee in the Transfer and Sale Agreement or the Ancillary Agreements prior,
superior or equal to, or deprive the Holders or any Exchange Counterparty of,
the pledge, lien, security interest and assignment created herein for the
payment of the Notes or any Issuer Exchange Payment.
It shall not be necessary that the consents of the Holders
approve the particular form of wording of the proposed amendment or supplement
or of the Supplemental Indenture effecting such amendment or supplement, but it
shall be sufficient if such consents approve the substance of the proposed
amendment or supplement.
SECTION 9.3 EFFECTIVENESS OF SUPPLEMENTAL INDENTURE. Upon the
execution pursuant to this Article IX by the Issuer, each Eligible Lender
Trustee and the Indenture Trustee of any Supplemental Indenture amending or
supplementing the provisions of this Indenture or at such later date as may be
specified in such Supplemental Indenture, this Indenture shall be amended or
supplemented in accordance with such Supplemental Indenture.
SECTION 9.4 SUPPLEMENTAL INDENTURE AFFECTING INDENTURE
TRUSTEE. The Indenture Trustee shall not be required to execute any Supplemental
Indenture changing, amending or modifying any of the rights, duties and
obligations of the Indenture Trustee.
SECTION 9.5 SUPPLEMENTAL INDENTURES AFFECTING CERTAIN
REQUIREMENTS OF THE HIGHER EDUCATION ACT. No Supplemental Indenture amending the
provisions of this Indenture which prohibit the transfer of, or the granting of
a security interest in, Financed Student Loans (or any security interest
therein) to persons other than eligible lenders under the Higher Education Act
shall be effective unless the Higher Education Act shall have been amended to
permit such a transfer or grant.
SECTION 9.6 COMPLIANCE OF SUPPLEMENTAL INDENTURES WITH TRUST
INDENTURE ACT. Each Supplemental Indenture executed pursuant to this Article IX
and amending the provisions of this Indenture shall be in full compliance with
all the provisions of the Trust Indenture Act on and after the date of its
execution and delivery.
89
90
ARTICLE X
DEFEASANCE; MONEYS HELD FOR PAYMENT OF DEFEASED NOTES
SECTION 10.1 TRUST IRREVOCABLE. The trust created by this
Indenture shall be irrevocable until the indebtedness secured hereby has been
fully paid or provision for the payment thereof has been made as provided in
this Article X.
SECTION 10.2 DISCHARGE OF LIENS AND PLEDGES; NOTES NO LONGER
OUTSTANDING AND DEEMED TO BE PAID. The Notes of the Issuer under this Indenture
and the liens, pledges, security interests, charges, trusts, assignments,
covenants and agreements of the Issuer and each Eligible Lender Trustee, herein
made or provided for, shall be fully discharged and satisfied as to: (a) any
Note, when either of items (i) or (ii) below shall have occurred; (b) any
Program Operating Expenses, when item (iii) below shall have occurred; (c) any
Exchange Agreement, when item (iv) below shall have occurred; and (d) Carryover
Interest, when item (v) below shall have occurred, and such Note, Program
Operating Expense. Exchange Agreement or Carryover Interest shall no longer be
deemed to be Outstanding hereunder (provided, however, that this Indenture shall
not be deemed defeased unless and until all of the following shall have
occurred):
(i) when such Note shall have been canceled;
(ii) as to any Note not canceled, when payment of the principal of
such Note, plus interest on such principal to the due date
thereof (whether such due date is by reason of maturity or
upon redemption, or otherwise), either:
(a) shall have been made or caused to be made in
accordance with the terms thereof, or
(b) shall have been provided for by an irrevocable
deposit with the Indenture Trustee or the
Authenticating Agent, which is irrevocably
appropriated and set aside exclusively for such
payment, and which is derived from a source which is
not a transfer of property voidable under Sections
544 or 547 of the United States Bankruptcy Code,
(accompanied by an opinion of counsel experienced in
bankruptcy matters to that effect), should the Issuer
be a debtor under such Code of:
(1) moneys sufficient to make such payment,
and/or
(2) Eligible Investments (which for the purpose
of this Article X shall include only those
obligations which are described in item (a)
of the definition thereof in Section 5.7
hereof and which are not subject to call for
redemption prior to maturity), maturing as
to principal and interest in such amounts
and at such times as will insure the
availability of sufficient moneys to make
such payment, the sufficiency of said moneys
or Eligible Investments to be verified
90
91
in writing by a firm of independent
certified public accountants;
(iii) when all Program Operating Expenses then owed by the Issuer,
including related necessary and proper fees, compensation and
expenses of the Indenture Trustee, each Eligible Lender
Trustee and the Authenticating Agent, if any, when they shall
have been paid or the payment thereof provided for to the
satisfaction of the Indenture Trustee;
(iv) in the case of payment of any Issuer Exchange Payment pursuant
to Section 5.8 hereof and the applicable Exchange Agreement,
when payment of all Issuer Exchange Payments due and payable
to each Exchange Counterparty under its respective Exchange
Agreement has been made or duly provided for to the
satisfaction of each Exchange Counterparty and each Exchange
Agreement has been terminated and
(v) in the case of payment of any amount of Carryover Interest,
when the first of the following occurs:
(a) payment of all such Carryover Interest that has accrued
and remains unpaid has been made or duly provided for to
the satisfaction of such Indenture Trustee; or
(b) all amounts held in the Funds and Accounts hereunder which
are available pursuant to the provisions of this Indenture
to pay Carryover Interest have been paid out, and no
further amounts, or assets the proceeds of which could be
used to pay Carryover Interest, are so available hereunder
to make payment of Carryover Interest.
At such time as an Note shall be deemed to be no longer
Outstanding, hereunder, as aforesaid, such Note shall cease to accrue interest
from the due date thereof (whether such due date is by reason of maturity, or
upon redemption, or otherwise), or, in the case of any Note paid after the due
date thereof, from the date of such payment or provision for payment as
aforesaid, and shall no longer be secured by or entitled to the benefits of this
Indenture and the Holder of such Note thereafter shall be entitled only to
payment out of such moneys or Eligible Investments.
Notwithstanding the foregoing, in the case of Notes which are
to be redeemed prior to their stated maturities, no deposit under clause (b) of
subparagraph (ii) above shall constitute such payment, discharge and
satisfaction as aforesaid until proper notice of such redemption shall have been
given in accordance with Article IV hereof or provision satisfactory to the
Indenture Trustee shall have been irrevocably made for the giving of such
notice.
Anything in Article IX hereof to the contrary notwithstanding,
if moneys and/or Eligible Investments have been deposited or set aside with the
Indenture Trustee pursuant to this Section for the payment of Notes and such
Notes shall be deemed to have been paid and to be no longer Outstanding
hereunder as provided in this Section, but such Notes shall not have in fact
been actually paid in full, no amendment to the provisions of this Section shall
be made without the consent of the Holder of each Note affected thereby.
91
92
The Issuer may at any time cause to be canceled any Note
previously executed and delivered which the Issuer may have acquired in any
manner whatsoever, and such Note upon such surrender for cancellation shall be
deemed to be paid and no longer Outstanding hereunder.
Notwithstanding any provision of any other Section of this
Indenture which may be contrary to the provisions of this Section, all moneys or
Eligible Investments set aside and held in trust pursuant to the provisions of
this Section for the payment of the Notes described in items (a) and (c) of the
first paragraph of this Section 10.2 (including, without limitation, any accrued
but unpaid interest on items (a) and (c)) shall be applied to and used solely
for the payment of the particular Notes with respect to which such moneys and
Eligible Investments have been so set aside in trust.
In no event shall the Indenture Trustee deliver over to the
Issuer any Financed Student Loans unless the Issuer is at the time an eligible
lender under the Higher Education Act, if the Higher Education Act as then in
effect then requires the owner or holder of Student Loans to be an eligible
lender. If to be the owner or holder of Student Loans, the Issuer is required to
be an eligible lender under the Higher Education Act, it shall evidence the fact
that it is an eligible lender under the Higher Education Act by a written
certificate to that effect delivered to the Indenture Trustee. If the Higher
Education Act does not permit the Issuer to be the owner or holder of Student
Loans, then such Financed Student Loans shall remain in the name of an Eligible
Lender Trustee, or its duly appointed and qualified successor, for the benefit
of the Issuer.
SECTION 10.3 NOTES NOT PRESENTED FOR PAYMENT WHEN DUE; MONEYS
HELD FOR THE NOTES AFTER DUE DATE THEREOF. Subject to the provisions of the next
sentence of this Section 10.3, if any Note shall not be presented for payment
when the principal thereof shall become due, whether at maturity or at the date
fixed for the redemption thereof, or otherwise, and if moneys and/or Eligible
Investments shall at such due date be held by the Indenture Trustee, in trust
for that purpose sufficient and available to pay the principal of such Note,
together with all interest and Carryover Interest, if any, due and payable
pursuant to the provisions of this Indenture on such principal, to the due date
thereof, or to the date fixed for redemption thereof, as the case may be, all
liability of the Issuer for such payment shall forthwith cease, determine and be
completely discharged, and thereupon it shall be the duty of the Indenture
Trustee, to hold said moneys and/or Eligible Investments without liability to
the Holder of such Note for interest thereon, in trust for the benefit of the
Holder of such Note, who thereafter shall be restricted exclusively to said
moneys and/or Eligible Investments for any claim of whatever nature on its part
on or with respect to said Note, including for any claim for the payment
thereof; provided, however, that any such moneys and/or Eligible Investments
held by the Indenture Trustee remaining unclaimed by the Holders of such Notes
for four (4) years after the principal of the respective Notes with respect to
which such moneys and/or Eligible Investments have been so set aside has become
due and payable (whether at maturity or upon redemption or otherwise) shall be
paid to the Issuer free from the trusts created by this Indenture, and all
liabilities of the Indenture Trustee with respect to such moneys and/or Eligible
Investments shall cease. In such event such Holders shall thereafter be deemed
to be general unsecured creditors of the Issuer for
92
93
the amounts so paid to the Issuer (without interest thereon), subject to any
applicable statute of limitation.
93
94
ARTICLE XI
MEETINGS OF HOLDERS
SECTION 11.1 PURPOSES OF MEETINGS. A meeting of Holders of the
Notes, or of the Holders of any Series of Notes, may be called at any time and
from time to time pursuant to the provisions of this Article XI, to the extent
relevant to the Holders of all of the Notes or of Notes of that Series, as the
case may be, to take any action authorized to be taken by or on behalf of the
Holders of any specified aggregate principal amount of the Notes, or of that
Series, under any provision of this Indenture or authorized or permitted by law.
SECTION 11.2 CALL OF MEETINGS; PLACE OF MEETINGS. The
Indenture Trustee may, but is not obligated to, call at any time a meeting of
Holders pursuant to this Article to be held at any reasonable time and place
which the Indenture Trustee shall determine. Notice of that meeting, setting
forth the time and the place of the meeting and, in general terms, the subject
thereof and the action proposed to be taken, shall be mailed not fewer than
fifteen (15) or nor more than ninety (90) days prior to the date determined for
the meeting. That notice shall be mailed to each Holder at the close of business
on the 15th day preceding the mailing of the notice at its address as it appears
on the books of registry maintained by the Indenture Trustee pursuant to Section
2.4 hereof on that 15th day preceding the mailing. The date of determination of
Holders for purposes of the mailing shall constitute the record date for the
meeting.
At any time, the Issuer or the Holders of not less than a
majority in aggregate principal amount of the Outstanding Notes, or if
applicable, the affected Series of Outstanding Notes, may request the Indenture
Trustee in writing to call a meeting of respective Holders. The request shall
describe in general terms the subject of the meeting and the action proposed to
be taken. If the Indenture Trustee shall not have mailed the notice of the
meeting within twenty (20) days after receipt of the request, the Issuer or the
Holders of Notes in the amount described above, as the case may be, may
determine a reasonable time and place of the meeting and may call the meeting to
take any action authorized in this Article, by mailing notice thereof as
provided above.
Any meetings of Holders, or the Holders of any Series of
Outstanding Notes affected by a particular matter, shall be valid without
notice, if
(a) the Holders of all Outstanding Notes, or if
applicable, the affected Series of Outstanding Notes, are present in person or
by proxy; or notice is waived before or after the meeting by the Holders of all
Outstanding Notes, or if applicable, the affected Series of Outstanding Notes,
who were not so present at the meeting; and
(b) the Issuer and the Indenture Trustee are
either present by duly authorized representatives or have waived notice, before
or after the meeting.
SECTION 11.3 MEETINGS; REGULATIONS OF THE INDENTURE TRUSTEE.
94
95
Notwithstanding any other provisions of this Indenture, the Indenture Trustee
may make any reasonable regulations which it may deem to be advisable for
meetings of Holders, with regard to
(a) proof of the holding of Outstanding Notes
and of the appointment of proxies;
(b) the appointment and duties of inspectors of
votes;
(c) recordation of the proceedings of those
meetings;
(d) the execution, submission and examination
of proxies and other evidence of the right to vote; and
(e) any other matters concerning the conduct,
adjournment or reconvening of meetings which it may consider to be necessary
or desirable.
The Indenture Trustee shall appoint a temporary chair of the
meeting by an instrument or document in writing, unless the meeting shall have
been called by the Issuer or Holders, in which case the Issuer or the Holders
calling the meeting, as the case may be, shall appoint a temporary chair in like
manner. A permanent chair and a permanent secretary of the meeting shall be
elected by vote of the Holders of a majority in principal amount of the
Outstanding Notes represented at the meeting and entitled to vote.
SECTION 11.4 VOTING; SPEAKING AT MEETING; RECORD OF MEETING.
To be entitled to vote at any meeting of Holders, a Person shall
(a) be a Holder of one or more Outstanding Notes, or if
applicable, of the affected Series of Outstanding Notes, as of the record date
for the meeting as determined above; or
(b) be a person appointed in writing by an instrument or
document as proxy by a Holder, as of the record date for the meeting, of one or
more Outstanding Notes or, if applicable, of the affected Series of Outstanding
Notes.
The only Persons who shall be entitled to be present or to
speak at any meeting of Holders shall be the Persons entitled to vote at the
meeting and their counsel, any representatives of the Issuer and its counsel.
Each Holder or proxy shall be entitled to one vote for each $5,000 principal
amount of Outstanding Notes held or represented by it; provided, however, that
no vote shall be cast or counted at any meeting in respect of any Notes
challenged as not Outstanding and ruled by the chair of the meeting to be not
Outstanding.
The chair of the meeting shall have no right to vote other
than by virtue of Notes held by him or her or of instruments or documents
described above duly designating him or her as the person entitled to vote on
behalf of other Holders. Any meeting duly called pursuant to the provisions of
this Article XI may be adjourned from time to time, and the meeting may be held
as so adjourned without further notice.
95
96
The vote upon any resolution submitted to any meeting of
Holders shall be by written ballots on which shall be subscribed the signatures
of the Holders of Outstanding Notes, or if their representatives by proxy and
the identifying number or numbers of the Outstanding Notes held or represented
by them.
The permanent chair of the meeting shall appoint two
inspectors of votes, who shall count all votes cast at the meeting for or
against any resolution and who shall make and file with the secretary of the
meeting their verified written reports in triplicate of all votes cast at the
meeting. A record in triplicate of the proceedings of each meeting of Holders
shall be prepared by the secretary of the meeting.
The original reports of the inspectors of votes on any vote by
ballot taken at the meeting and the affidavits by one or more individuals having
knowledge of the facts, setting forth a copy of the notice of the meeting and
showing that the notice was mailed as provided herein, shall be attached to each
copy of the record of the meeting prepared by the secretary. Each copy of the
record shall be signed and verified by the affidavits of the permanent chair and
the secretary of the meeting. One of the triplicate copies shall be delivered to
the Issuer and the other to the Indenture Trustee to be preserved by the
Indenture Trustee. The copy delivered to the Indenture Trustee shall have
attached thereto the ballots voted at the meeting.
Any record signed and verified as described above shall be
conclusive evidence of the matters therein stated.
SECTION 11.5 MISCELLANEOUS. Nothing contained in this Article
XI shall be deemed or construed to authorize or permit any hindrance or delay in
the exercise of any right, remedy or power conferred upon or reserved to the
Indenture Trustee or to the Holders under any of the provisions of this
Indenture or of any Series of Notes by reason of any call of a meeting of
Holders or any right, remedy or power conferred expressly or impliedly hereunder
to make a call of a meeting.
96
97
ARTICLE XII
MISCELLANEOUS
SECTION 12.1 BENEFITS OF INDENTURE LIMITED TO ISSUER, ELIGIBLE
LENDER TRUSTEES, INDENTURE TRUSTEE, EXCHANGE COUNTERPARTY AND HOLDERS. With the
exception of rights or benefits herein expressly conferred, nothing expressed or
mentioned in or to be implied from this Indenture or the Notes is intended or
shall be construed to confer upon or give to any Person other than the Issuer,
each Eligible Lender Trustee, the Indenture Trustee, any Exchange Counterparty
and the Holders, any legal or equitable right, remedy or claim under or by
reason of or in respect to this Indenture or any covenant, condition,
stipulation, promise, agreement or provision contained herein and all of the
covenants, conditions, stipulations, promises, agreements and provisions hereof
are intended to be and shall be for and inure to the sole and exclusive benefit
of the Issuer, each Eligible Lender Trustee, the Indenture Trustee, any Exchange
Counterparty and the Holders from time to time of the Notes as herein and
therein provided.
SECTION 12.2 EFFECT OF LEGAL HOLIDAYS. Whenever this Indenture
requires any action to be taken on a day which is not a Business Day, such
action shall be taken on the next succeeding Business Day with the same force
and effect as if taken on such day.
SECTION 12.3 PARTIAL INVALIDITY. If any one or more of the
covenants or agreements or portion thereof provided in this Indenture on the
part of the Issuer, each Eligible Lender Trustee or the Indenture Trustee to be
performed should be determined by a court of competent jurisdiction to be
contrary to law, then such covenant or covenants, or such agreement or
agreements, or such portions thereof, shall be deemed severable from the
remaining covenants and agreements provided in this Indenture and the invalidity
thereof shall in no way affect the validity of the other provisions of this
Indenture or of the Notes, and the Holders shall retain all the rights and
benefits accorded to them hereunder and under any applicable provisions of law.
SECTION 12.4 NOTICES. Except as otherwise expressly provided
herein, any notice to or demand upon the Indenture Trustee may be served or
presented, and such demand may be made, at the principal corporate trust office
of the Indenture Trustee in Cincinnati, Ohio, at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust Services, telecopier number: (513)
632-3286, or at such other address or number as may have been filed in writing
by the Indenture Trustee with the Issuer and each Eligible Lender Trustee.
Except as otherwise expressly provided herein, any notice to
or demand upon the Initial Co-Owner Eligible Lender Trustee may be served or
presented, and such demand may be made, at the principal corporate trust office
of the Initial Co-Owner Eligible Lender Trustee in Cincinnati, Ohio, at ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust Services,
telecopier number: (▇▇▇) ▇▇▇-▇▇▇▇, or at such other address or number as may
have been filed in writing by the Initial Co-Owner Eligible Lender Trustee with
the Issuer and the Indenture Trustee.
97
98
Except as otherwise expressly provided herein, any notice to
or demand upon the Issuer may be served or presented, and such demand may be
made at the principal corporate trust office of the Issuer, not in its
individual capacity, but solely as co-owner trustee under the Delaware Trust, in
Cincinnati, Ohio, at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, Attention:
Corporate Trust Services, telecopier number: (▇▇▇) ▇▇▇-▇▇▇▇, or to the Issuer at
such other address or number as may have been filed in writing by the Issuer
with the Indenture Trustee and each Eligible Lender Trustee.
Copies of any notices delivered to the Indenture Trustee, the
Holders (except for any notice of redemption) or the Issuer shall be delivered
by the Indenture Trustee or the Issuer to each Exchange Counterparty at the
address filed in writing by each such Exchange Counterparty with the Indenture
Trustee.
Any notice required to be in writing shall be deemed to be in
writing if given by telex, telecopier or other method which produces a written
record.
SECTION 12.5 LAW AND PLACE OF ENFORCEMENT OF INDENTURE. This
Indenture shall be construed and interpreted in accordance with the laws of the
State and all suits and actions arising out of this Indenture shall be
instituted in a court of competent jurisdiction in the State.
SECTION 12.6 NO RECOURSE AGAINST MEMBERS, MANAGEMENT COMMITTEE
MEMBERS, OFFICERS OR EMPLOYEES OF THE ISSUER. All representations, covenants and
obligations of any director, officer or employee of the Issuer shall be treated
as representations, covenants and obligations of the Issuer and not as made in
such person's individual capacity, and no recourse shall be had for the payment
of the principal of or interest or Carryover Interest on the Notes or for any
claim based on that payment or on this Indenture against any such person or any
person executing the Notes on behalf of the Issuer; but nothing herein contained
shall relieve any such director, officer or employee from the performance of any
official duty provided by law or by this Indenture.
SECTION 12.7 CROSS-INDEMNIFICATION The Issuer, the Indenture
Trustee and the Eligible Lender Trustee hereby covenant and agree to indemnify,
solely from the assets held in the Trust Estate, any trust estate held under any
other indenture between the Issuer and the Eligible Lender Trustee entered into
after the Date of Issuance, in which trust estate are held Student Loans
assigned the same Department of Education lender identification numbers as
Student Loans included in the Trust Estate, against any offset, shortfall or
other loss of payments with respect to Student Loans in such trust estate caused
solely by an offset or withholding of payments on Student Loans in this Trust
Estate that share the same Department of Education lender identification number.
SECTION 12.8 SUSPENSION OF MAIL. If because of the suspension
of delivery of first class mail or, for any other reason, the Indenture Trustee
shall be unable to mail by the required class of mail any notice, request,
complaint, demand or other instrument or document required to be mailed hereby,
the Indenture Trustee shall give it in any other manner which shall approximate
most effectively the mailing thereof in accordance herewith in the
98
99
judgment of the Indenture Trustee. The giving of that notice, request,
complaint, demand or other instrument or document in that manner shall be deemed
for all purposes of this Indenture to be in compliance with the requirement for
the mailing thereof. Except as provided otherwise herein, the mailing of any
notice, request, complaint, demand or other instrument or document shall be
deemed to be complete upon deposit thereof in the mail, and the giving thereof
by any other means of delivery shall be deemed to be complete upon receipt
thereof by the delivery service.
SECTION 12.9 OPINION AS TO TRUST ESTATE. On the Date of
Issuance of the Notes, the Original Issuer furnished to the Indenture Trustee an
opinion of counsel either (i) stating that, in the opinion of such counsel, such
action has been taken with respect to the recording and filing of any financing
statements and continuation statements, as are necessary to make effective the
lien and security interest created by the Original Indenture in favor of the
Indenture Trustee, for the benefit of the parties described in the granting
clauses and Section 5.6 of this Indenture, and reciting the details of such
action, or (ii) stating that in the opinion of such counsel, no such action is
necessary to make such lien and security interest effective. In connection with
the execution and delivery of this Indenture, the Issuer shall furnish to the
Indenture Trustee an opinion of like tenor and effect.
On or before June 30 in each calendar year, beginning in 2003,
the Issuer shall furnish to the Indenture Trustee an opinion of counsel with
respect to each jurisdiction in which the Financed Student Loans are located or
a Uniform Commercial Code financing statement has been filed by the Issuer
either stating that, in the opinion of such counsel, such action has been taken
with respect to the recording, filing, re-recording and refiling of this
Indenture, any Supplemental Indentures and any other requisite documents and
with respect to the execution and filing of any financing statements and
continuation statements as is necessary to maintain the lien and security
interest created by this Indenture and reciting the details of such action or
stating that in the opinion of such counsel no such action is necessary to
maintain such lien and security interest. Such opinion of counsel shall also
describe the recording, filing, re-recording and refiling of this Indenture, any
Supplemental Indentures and any other requisite documents and with respect to
the execution and filing of any financing statements and continuation statements
that will, in the opinion of such counsel, be required to maintain the lien and
security interest of this Indenture until June 30 in the following calendar
year.
SECTION 12.10 CONFLICT WITH TRUST INDENTURE ACT. If any
provision of this Indenture 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 the Trust Indenture Act, Sections 310 through 317, inclusive,
that impose duties on any Person (including the provisions automatically deemed
included herein unless expressly excluded by a provision in this Indenture) are
a part of and govern this Indenture, whether or not physically contained herein.
SECTION 12.11 EFFECT OF ARTICLE AND SECTION HEADINGS AND TABLE
OF CONTENTS. The heading or titles of the several Articles and Sections hereof,
and any table of contents appended hereto, shall be solely for convenience of
reference and shall not affect the
99
100
meaning or construction, interpretation or effect of this Indenture.
SECTION 12.12 EXECUTION OF COUNTERPARTS. This Indenture may be
executed in several counterparts, each of which shall be regarded as an original
and all of which shall constitute but one and the same document. It shall not be
necessary in proving this Indenture to produce or account for more than one of
those counterparts.
100
101
IN WITNESS WHEREOF, STUDENT LOAN FUNDING 1998-A/B TRUST, by
Firstar Bank, National Association, not in its individual capacity, but solely
as co-owner trustee of the Delaware Trust, has caused this Indenture to be
signed in its name and on its behalf by one of its Authorized Officers and
FIRSTAR BANK, NATIONAL ASSOCIATION, as Initial Co-Owner Eligible Lender Trustee,
not in its individual capacity, but solely as co-owner eligible lender trustee
for the benefit of the Delaware Trust, has caused this Indenture to be signed in
its name and on its behalf by one of its officers thereunto duly authorized; and
FIRSTAR BANK, NATIONAL ASSOCIATION, to evidence its acceptance of the trusts
hereby created, has caused this Indenture to be signed in its name and on its
behalf by one of its officers thereunto duly authorized, all as of the date
first above written.
STUDENT LOAN FUNDING 1998-A/B TRUST,
("Issuer")
by Firstar Bank, National Association,
not in its individual capacity,
but solely as Co-Owner Trustee
By
Title:
FIRSTAR BANK, NATIONAL ASSOCIATION,
Not in its individual capacity, but
solely as Initial Co-Owner Eligible
Lender Trustee for the benefit of
the Delaware Trust
By
Title:
FIRSTAR BANK, NATIONAL ASSOCIATION,
as Indenture Trustee
By
Title:
101
102
SCHEDULE I
SCHEDULE OF APPROVED GUARANTEE AGENCIES
----------------------------------------------------------- ---------------------------------------------------------
Educational Credit Management Corporation New Jersey Higher Assistance Authority
----------------------------------------------------------- ---------------------------------------------------------
FLORIDA DEPARTMENT OF EDUCATION, OFFICE OF STUDENT New York State Higher Education Services Corporation
FINANCIAL ASSISTANCE
----------------------------------------------------------- ---------------------------------------------------------
GEORGIA HIGHER EDUCATION ASSISTANCE COMMISSION Oklahoma Guaranteed Student Loan Program
----------------------------------------------------------- ---------------------------------------------------------
GREAT LAKES HIGHER EDUCATION GUARANTY CORPORATION Pennsylvania Higher Education Assistance Agency
----------------------------------------------------------- ---------------------------------------------------------
KENTUCKY HIGHER EDUCATION ASSISTANCE AUTHORITY Tennessee Student Assistance Commission
----------------------------------------------------------- ---------------------------------------------------------
Finance Authority of Maine Texas Guaranteed Student Loan Corporation
----------------------------------------------------------- ---------------------------------------------------------
Missouri Guaranteed Student Loan Program United Student Aid Funds, Inc.
----------------------------------------------------------- ---------------------------------------------------------
Nebraska Student Loan Program
----------------------------------------------------------- ---------------------------------------------------------
BOLD = NAMED IN S-4 REGISTRATION STATEMENT.
103
SCHEDULE II
SCHEDULE OF APPROVED SERVICERS AND SERVICING AGREEMENTS
----------------------------------------------------------- ---------------------------------------------------------
SERVICERS SERVICING AGREEMENTS
----------------------------------------------------------- ---------------------------------------------------------
Great Lakes Higher Education Servicing Center Servicing Agreement, dated as of November 1, 1998,
("GLHESC") between the Master Servicer and GLHESC, as supplemented
by (i) the Subservicing Addendum, dated as of
November 1, 1998, among the Master Servicer, GLHESC
and the Original Issuer and (ii) the Subservicing
Addendum, dated as of March 15 1999 among the Master
Servicer, GLHESC and the Issuer.
----------------------------------------------------------- ---------------------------------------------------------
Intuition, Inc. ("InTuition") Servicing Agreement, dated as of July 31, 1998, between
the Master Servicer and InTuition, as supplemented by
(i) the Subservicing Addendum, dated as of July 31,
1998, among the Master Servicer, InTuition and the
Original Issuer and (ii) and (ii) the Subservicing
Addendum, dated as of March 15 1999 among the Master
Servicer, InTuition and the Issuer.
----------------------------------------------------------- ---------------------------------------------------------
UNIPAC Service Corporation ("UNIPAC") Servicing Agreement, dated as of September 1, 1998,
between the Master Servicer and UNIPAC, as supplemented
by (i) the Subservicing Addendum, dated as of November
1, 1998, among the Master Servicer, UNIPAC and the
Original Issuer and (ii) the Subservicing Addendum,
dated as of March 15 1999 among the Master Servicer,
UNIPAC and the Issuer.
----------------------------------------------------------- ---------------------------------------------------------
USA Group Loan Services, Inc. ("USAGLS") Servicing Agreement, dated as of November 1, 1998,
between the Master Servicer and USAGLS, as supplemented
by (i) the Subservicing Addendum, dated as of November
1, 1998, among the Master Servicer, USAGLS and the
Original Issuer and (ii) the Subservicing Addendum,
dated as of March 15 1999 among the Master Servicer,
USAGLS`and the Issuer.
----------------------------------------------------------- ---------------------------------------------------------
104
EXHIBIT A
---------
to the
Second Amended and Restated Indenture of Trust,
dated as of June 1, 1999, by and among
Student Loan Funding 1998-A/B Trust,
Firstar Bank, National Association,
as Initial Co-Owner Eligible Lender Trustee,
and
Star Bank, National Association,
as Indenture Trustee
[Addressed to Indenture Trustee]
STUDENT LOAN ACQUISITION CERTIFICATE
------------------------------------
This Student Loan Acquisition Certificate is submitted
pursuant to the provisions of the Second Amended and Restated Indenture of
Trust, dated as of June 1, 1999 (as amended and supplemented, the "Indenture"),
among Student Loan Funding 1998-A/B Trust, by Firstar Bank, National
Association, not in its individual capacity, but solely as co-owner trustee of
the Delaware Trust (the "Issuer"), Firstar Bank, National Association, as
Initial Co-Owner Eligible Lender Trustee, and Firstar Bank, National
Association, as Indenture Trustee. All capitalized terms used in this
Certificate and not otherwise defined herein shall have the same meanings given
to such terms in the Indenture. In your capacity as Indenture Trustee, you are
hereby authorized and requested to disburse to _____________________________
(the "Lender") the sum of $_______________________ for the acquisition of
Student Loans. With respect to the Student Loans so to be acquired, the Issuer
hereby certifies as follows:
1. The Student Loans to be acquired (the "Acquired Student
Loans") will be further described by an updating certificate if required by the
Indenture.
2. The amount to be disbursed pursuant to this Certificate
does not exceed the aggregate of the remaining unpaid principal amount of the
Acquired Student Loans plus accrued borrower interest, if any, [plus a premium
of ____% of the unpaid principal amount of Acquired Student Loans] [plus
transfer fees of $_________] [plus interest on the amount of principal and
accrued borrower interest from the date of transfer of said Student Loans until
the date of payment in the amount of $______________, said rate of interest not
exceeding the current yield on funds in the Expense Account.
3. Each Acquired Student Loan is a Student Loan authorized so
to be acquired by the Indenture.
4. The Issuer is not, on the date hereof, in default under the
Indenture.
105
5. The undersigned, as the _________________________ of the
Issuer, is authorized to sign and submit this Certificate on behalf of the
Issuer.
WITNESS my hand this _____ day of ___________________, 199_.
STUDENT LOAN FUNDING
1998-A/B TRUST,
By Firstar Bank,
National Association,
not in its individual
capacity, but solely as
co-owner trustee of the
Delaware Trust ("Issuer")
By:_______________________________
Title:____________________________
A-105
106
EXHIBIT B
---------
to the
Second Amended and Restated Indenture of Trust,
dated as of June 1, 1999, by and among
Student Loan Funding 1998-A/B Trust,
Firstar Bank, National Association,
as Initial Co-Owner Eligible Lender Trustee,
and
Firstar Bank, National Association,
as Indenture Trustee
[Addressed to Indenture Trustee]
UPDATING STUDENT LOAN ACQUISITION CERTIFICATE
---------------------------------------------
_________This Updating Student Loan Acquisition Certificate is
submitted pursuant to the provisions of the Second Amended and Restated
Indenture of Trust, dated as of June 1, 1999, (as amended and supplemented, the
"Indenture"), among Student Loan Funding 1998-A/B Trust, by Firstar Bank,
National Association, not in its individual capacity, but solely as co-owner
trustee of the Delaware Trust, Firstar Bank, National Association, as Initial
Co-Owner Eligible Lender Trustee, and Firstar Bank, National Association, as
Indenture Trustee. All capitalized terms used in this Certificate and not
otherwise defined herein shall have the same meanings given to such terms in the
Indenture. In your capacity as Indenture Trustee, you have, pursuant to a
Student Loan Acquisition Certificate, dated __________________________, been
previously authorized and requested to disburse to _____________________________
the sum of $__________ for the acquisition of Student Loans. With respect to the
Student Loans so acquired, the Issuer hereby certifies as follows:
1. The Student Loans acquired with such moneys are those
specified in Schedule A attached hereto (the "Acquired Student Loans").
2. The remaining unpaid principal amount of each Acquired
Student Loan is as shown on Schedule A attached hereto.
3. The undersigned, as _____________________ of the Issuer, is
authorized to sign and submit this Certificate on behalf of the Issuer.
4. The additional sum of $___________ is due and owing to the
Lender for the purchase price of such Student Loans representing
_________________________________.
OR
We are herewith transmitting to you $_______________
representing an overpayment made to the Lender for such Student Loans.
107
WITNESS my hand this _____ day of ___________________, 199_.
STUDENT LOAN FUNDING
1998-A/B TRUST,
By Firstar Bank,
National Association,
not in its individual
capacity, but solely as
co-owner trustee of the
Delaware Trust ("Issuer")
By:
Title:
B-107