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EXHIBIT 4.1
INDENTURE OF TRUST,
Dated as of ________ 1, 1999,
By and Among
STUDENT LOAN FUNDING 1999-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 Student Loan Funding 1999-A/B Trust
and
FIRSTAR BANK, NATIONAL ASSOCIATION,
as Indenture Trustee
Relating to the
STUDENT LOAN ASSET-BACKED NOTES,
SERIES 1999A AND SERIES 1999B
OF
STUDENT LOAN FUNDING 1999-A/B TRUST
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RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939
(THE "TRUST INDENTURE ACT") AND THE
INDENTURE OF TRUST, DATED AS OF ________ 1, 1999
TRUST INDENTURE
ACT SECTION INDENTURE SECTION
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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)....................................................................12.9
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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.
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TABLE OF CONTENTS
Page
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PREAMBLE...............................................................................................1
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.1 Definitions................................................................................4
SECTION 1.2 Use of Certain Terms......................................................................18
SECTION 1.3 Compliance Certificates and Opinions......................................................18
SECTION 1.4 Incorporation by Reference of Trust Indenture Act.........................................21
ARTICLE II
AUTHORIZATION, TERMS AND PROVISIONS OF NOTES
SECTION 2.1 Authorization of Notes; Terms of Notes in General; Notes to Constitute
Limited Obligations...........22
SECTION 2.2 Execution of Notes; Validity of Signatures.................................................22
SECTION 2.3 Transfer of Notes; Exchange of Notes.......................................................23
SECTION 2.4 Books of Registry..........................................................................24
SECTION 2.5 Mutilated, Lost, Stolen or Destroyed Notes.................................................24
SECTION 2.6 Disposition and Destruction of Notes.......................................................25
SECTION 2.7 Forms of Notes and Instructions for Payment................................................25
SECTION 2.8 Temporary Notes............................................................................26
ARTICLE III
[RESERVED]
ARTICLE IV
REDEMPTION OF THE NOTES
SECTION 4.1 Redemption of Notes in General.............................................................28
ARTICLE V
DISPOSITION OF PROCEEDS
ESTABLISHMENT OF FUNDS AND ACCOUNTS
APPLICATION OF AVAILABLE FUNDS
SECTION 5.1 Disposition of Proceeds of the Notes.......................................................29
SECTION 5.2 Reserve Fund...............................................................................29
SECTION 5.3 Acquisition Fund...........................................................................30
SECTION 5.3.1 Financing of Student Loans.............................................................30
SECTION 5.3.2 Investment of Acquisition Fund; Transfer of Proceeds in Acquisition Fund...............32
SECTION 5.3.3 Capitalized Interest Account...........................................................32
SECTION 5.4 Student Loan Portfolio Fund; Sale of Student Loans.........................................32
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SECTION 5.5 Collection Fund............................................................................35
SECTION 5.5.1 Collection Account.....................................................................35
SECTION 5.5.2 Note Payment Account...................................................................35
SECTION 5.5.3 [Reserved.]............................................................................36
SECTION 5.5.4 Expense Account........................................................................36
SECTION 5.5.5 Excess Surplus Account.................................................................37
SECTION 5.5.6 Investment of Collection Fund. ........................................................37
SECTION 5.6 Pledge. ...................................................................................37
SECTION 5.7 Investments. ..............................................................................39
SECTION 5.8 Exchange Agreements; Counterparty Exchange Payments; Issuer
Exchange Payments..........................................................................42
SECTION 5.9 Termination................................................................................43
ARTICLE VI
COVENANTS TO SECURE NOTES
SECTION 6.1 Administration of the Program..............................................................44
SECTION 6.2 Contracts of Guarantee.....................................................................44
SECTION 6.3 Acquisition, Collection and Assignment of Student Loans; Compliance
with Law...................................................................................44
SECTION 6.4 Enforcement of Financed Student Loans......................................................45
SECTION 6.5 Enforcement of Master Servicing Agreement and Servicing Agreements;
Removal of Servicer........................................................................45
SECTION 6.6 Enforcement of Purchase Agreements.........................................................46
SECTION 6.7 Books of Account; Annual Audit.............................................................46
SECTION 6.8 Punctual Payment of Notes..................................................................47
SECTION 6.9 Further Assurances.........................................................................47
SECTION 6.10 Protection of Security....................................................................47
SECTION 6.11 No Encumbrances...........................................................................48
SECTION 6.12 Compliance with Indenture.................................................................48
SECTION 6.13 Limitation on Program Operating Expenses..................................................48
SECTION 6.14 Notice of Additional Guarantee Agencies or Servicers......................................49
SECTION 6.15 Issuer to Furnish Indenture Trustee Names and Addresses of Holders........................49
SECTION 6.16 Undertaking for Costs.....................................................................49
ARTICLE VII
CONCERNING THE INDENTURE TRUSTEE
SECTION 7.1 Appointment of, Acceptance by, and Duties of Indenture Trustee;
Qualification; Resignation; Removal; Successor.............................................50
SECTION 7.2 Appointment of Co-Indenture Trustee........................................................53
SECTION 7.3 Certain Rights and Obligations of the Indenture Trustee....................................54
SECTION 7.4 Evidence of Compliance with Conditions Precedent; Examination of
Evidence; Evidence of Rights of Holders....................................................56
SECTION 7.5 Proofs of Claims and Other Papers and Documents............................................57
SECTION 7.6 Dealing with the Issuer....................................................................57
SECTION 7.7 Fees and Reimbursement of Indenture Trustee................................................58
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SECTION 7.8 Fees and Reimbursements of Each Eligible Lender Trustee....................................58
SECTION 7.9 Covenants of Indenture Trustee Pursuant to Higher Education Act. ..........................59
SECTION 7.10 Statements and Reports by Indenture Trustee of Funds and Accounts and
Other Matters.............................................................................59
SECTION 7.11 Additional Authenticating Agent...........................................................61
SECTION 7.12 Notice to Rating Agencies.................................................................61
SECTION 7.13 Indenture Trustee Not Liable for Acts of the Issuer; No Representations
by Indenture Trustee......................................................................61
SECTION 7.14 Indenture Trustee Not Responsible for Calculation Agent...................................62
SECTION 7.15 Indemnification of the Indenture Trustee and each Eligible Lender
Trustee...................................................................................62
SECTION 7.16 Intervention by the Indenture Trustee.....................................................62
SECTION 7.17 Preferential Collection of Claims Against Issuer..........................................63
SECTION 7.18 Preservation of Information; Communication to Holders.....................................63
SECTION 7.19 Survival of Certain Provisions of the Indenture...........................................63
ARTICLE VIII
DEFAULTS AND REMEDIES
SECTION 8.1 Events of Default..........................................................................64
SECTION 8.2 Inspection of Books and Records............................................................67
SECTION 8.3 Application of Moneys......................................................................67
SECTION 8.4 Suits at Law or in Equity; Direction of Action by Holders..................................70
SECTION 8.5 Suits by Individual Holders or an Exchange Counterparty....................................71
SECTION 8.6 Remedies Not Exclusive.....................................................................72
SECTION 8.7 Waivers of Default.........................................................................72
SECTION 8.8 Notice of Events of Default................................................................73
SECTION 8.9 Computations...............................................................................73
SECTION 8.10 Article Subject to Certain Provisions.....................................................73
ARTICLE IX
AMENDING AND SUPPLEMENTING OF INDENTURE
SECTION 9.1 Amending and Supplementing of Indenture Without Consent of Holders.........................74
SECTION 9.2 Amendment of Indenture with Consent of Holders and Exchange
Counterparties.............................................................................75
SECTION 9.3 Effectiveness of Supplemental Indenture....................................................76
SECTION 9.4 Supplemental Indenture Affecting Indenture Trustee.........................................76
SECTION 9.5 Supplemental Indentures Affecting Certain Requirements of the Higher
Education Act..............................................................................76
ARTICLE X
DEFEASANCE; MONEYS HELD FOR PAYMENT OF DEFEASED NOTES
SECTION 10.1 Trust Irrevocable.........................................................................77
SECTION 10.2 Discharge of Liens and Pledges; Notes No Longer Outstanding and
Deemed to Be Paid.........................................................................77
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SECTION 10.3 Notes Not Presented for Payment When Due; Moneys Held for the Notes
after Due Date Thereof....................................................................79
ARTICLE XI
MEETINGS OF HOLDERS
SECTION 11.1 Purposes of Meetings......................................................................81
SECTION 11.2 Call of Meetings; Place of Meetings.......................................................81
SECTION 11.3 Meetings; Regulations of the Indenture Trustee............................................82
SECTION 11.4 Voting; Speaking at Meeting; Record of Meeting............................................82
SECTION 11.5 Miscellaneous.............................................................................83
ARTICLE XII
MISCELLANEOUS
SECTION 12.1 Benefits of Indenture Limited to Issuer, Eligible Lender Trustees,
Indenture Trustee, Exchange Counterparty and Holders......................................84
SECTION 12.2 Effect of Legal Holidays..................................................................84
SECTION 12.3 Partial Invalidity........................................................................84
SECTION 12.4 Notices...................................................................................84
SECTION 12.5 Law and Place of Enforcement of Indenture.................................................85
SECTION 12.6 No Recourse Against Directors, Officers or Employees of the Issuer........................85
SECTION 12.7 Cross-Indemnification.....................................................................85
SECTION 12.8 Suspension of Mail........................................................................86
SECTION 12.9 Opinion as to Trust Estate................................................................86
SECTION 12.10 Conflict with Trust Indenture Act........................................................86
SECTION 12.11 Effect of Article and Section Headings and Table of Contents.............................87
SECTION 12.12 Execution of Counterparts. ..............................................................87
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
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THIS INDENTURE OF TRUST, dated as of ________ 1, 1999, as
hereafter amended or supplemented by Supplemental Indentures (the "Base
Indenture"), by and among STUDENT LOAN FUNDING 1999-A/B TRUST, a common law (as
opposed to statutory) trust created under the laws of the State of Delaware (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 of the Issuer (the "Co-Owner Trustee"),
FIRSTAR BANK, NATIONAL ASSOCIATION, a national banking association duly
organized and existing under the laws of the United states, having its principal
corporate trust offices in Cincinnati, Ohio, not in its individual capacity, but
solely as the eligible lender trustee on behalf of the Issuer (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"), with 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
(References to the name "Student Loan Funding 1999-A/B Trust" or to the terms
"Issuer" or "Delaware Trust" in this Indenture, including the Schedules and
Exhibits attached hereto and made a part hereof, shall mean the Co-Owner
Trustee, not in its individual capacity, but solely as Co-Owner Trustee of the
Issuer on behalf of the Issuer);
WITNESSETH:
WHEREAS, the Issuer is authorized by the applicable provisions
of the laws of the United States and the State of Delaware and by the Trust
Agreement, dated as of _________ 1, 1999 (the "Trust Agreement"), among Student
Loan Funding Riverfront LLC (the "Depositor"), Firstar Bank, National
Association, not in its individual capacity, but solely as the eligible lender
trustee on behalf of the Depositor (the "Depositor Eligible Lender Trustee"),
the Delaware Trustee (as defined therein), the Co-Owner Trustee and the Initial
Co-Owner Eligible Lender Trustee, to acquire directly, or indirectly through an
Eligible Lender Trustee, 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 Issuer has determined to provide under this Base
Indenture and the Terms Supplement (collectively, the "Indenture") for the
issuance in Series of (i) its Student Loan Asset-Backed Senior Notes, Series
1999A (the "Series 1999A Notes" or the "Senior Notes") and (ii) its Student Loan
Asset-Backed Subordinate Notes, Series 1999B (the "Series 1999B Notes" or the
"Subordinate Notes" and collectively with the Series 1999A Notes, the "Notes");
WHEREAS, pursuant to the Transfer and Sale Agreement, the
Depositor and the Depositor Eligible Lender Trustee have sold, transferred and
assigned all of the Transferred Assets to the Issuer and the Initial Co-Owner
Eligible Lender Trustee;
WHEREAS, the Issuer, the Initial Eligible Lender Trustee and
the Indenture Trustee desire to execute and deliver this Indenture in order to
confirm and declare the terms and
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conditions upon which the Notes will be secured and to secure payment of the
principal thereof and interest and any Carryover Interest thereon; and
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 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 the Trust Estate, 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 the Trust Estate, 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 the Trust Estate, 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 the Trust
Estate, 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 the Trust Estate, whether now owned or hereafter
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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 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:
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ARTICLE I
Definitions and Other Provisions of General Application
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SECTION 1.1 Definitions.
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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
Depositor 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.
"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.
"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
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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" 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.
"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 Depositor for Advances or any other amounts advanced by
the Depositor 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 Indenture of Trust, dated as
of ________ 1, 1999, exclusive of the Terms Supplement but as from time to time
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
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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.
"CAPITALIZED INTEREST ACCOUNT" shall mean the Account so
designated and established in the Acquisition Fund by Section 5.3.3 hereof.
"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 or at the direction of 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 Issuer, as the case may be, shall mean, respectively, 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 Issuer by an Authorized Officer.
"COLLECTION ACCOUNT" shall mean the Account so designated and
established in the Collection Fund by Section 5.5 hereof.
"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.
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"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.
"CO-OWNER TRUSTEE" shall mean Firstar Bank, National
Association, not in its individual capacity, but solely as co-owner trustee of
the Delaware Trust.
"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, any 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 [or the
establishment of the Issuer].
"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 _________________, 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.
"DELAWARE TRUST" shall mean the common law (as opposed to
statutory) trust created under the laws of the State of Delaware by the Trust
Agreement, dated as of __________, 1999, among the Depositor, the Co-Owner
Trustee, the Initial Co-Owner Eligible Lender Trustee and the Delaware Trustee
(as defined therein), and designated "Student Loan Funding 1999-A/B Trust";
provided that references to the name "Student Loan Funding 1999-A/B Trust" or to
the term "Delaware Trust" in this Indenture, including the Schedules and
Exhibits attached hereto and made a part hereof, shall mean the Co-Owner
Trustee, not in its individual capacity, but solely as Co-Owner Trustee on
behalf of the Issuer.
"DEPARTMENT OF EDUCATION" shall mean the U.S. Department of
Education.
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"DEPOSITOR" shall mean Student Loan Funding Riverfront LLC, a
Delaware limited liability company.
"DEPOSITOR ELIGIBLE LENDER TRUSTEE" shall mean Firstar Bank,
National Association, not in its individual capacity, but solely as the eligible
lender trustee on behalf of the Depositor.
"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 on behalf 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 _________, 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 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,
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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) plus or minus 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 _______ and any one or more of the
following: Client Code ____ and ____; Bond ID _____; Subportfolio Number ______;
Branch Number _____; Branch Number __; and Bond ID ___; 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 or transfer.
"FINANCED STUDENT LOANS" shall mean Student Loans which are
Financed and are evidenced solely by promissory notes and applications related
thereto.
"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.
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"FUND" shall mean any of the Funds established by this
Indenture.
"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 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 Indenture of Trust, dated as of
________ 1, 1999, 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.
"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.
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"INITIAL POOL BALANCE" shall mean the Pool Balance of the
Financed Student Loans as of the Cut-off Date.
"INITIAL PURCHASERS" shall mean __________________________.
"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.
"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 that
references to the name "Student Loan Funding 1999-A/B Trust" or to the term
"Issuer" in this Indenture, including the Schedules and Exhibits attached hereto
and made a part hereof, shall mean the Co-Owner Trustee, not in its individual
capacity, but solely as Co-Owner Trustee on behalf of the Issuer.
"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.
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.
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"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 ________ 1, 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 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 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.
"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 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
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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.
"PRINCIPAL FACTOR" shall have the meaning given such term in
the Terms Supplement.
"PROGRAM" shall mean the Issuer's or the Depositor'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,
any 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; and (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
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Servicing Agreement and the Administrator under the Administration Agreement, in
the administration of the Program under the Higher Education Act.
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 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.
"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 Moody's 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.
"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
Depositor 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.
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"SENIOR EXCHANGE COUNTERPARTY" shall mean the Exchange
Counterparty under a Senior Exchange Agreement.
"SENIOR EXCHANGE COUNTERPARTY GUARANTEE" shall mean an
Exchange Counterparty 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 Series of the
Series 1999A 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") 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 1999A NOTES" shall mean, collectively, all Series of
Notes designated in the Terms Supplement as "Series 1999A".
"SERIES 1999B NOTES" shall mean, collectively, all Series of
Notes designated in the Terms Supplement as "Series 1999B".
"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.
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"SERVICING DEVELOPMENT FEES" shall mean costs, fees and
expenses relating to the 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.
"SUBORDINATE ISSUER EXCHANGE PAYMENT" shall mean an Issuer
Exchange Payment under a Subordinate Exchange Agreement.
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"SUBORDINATE NOTES" shall mean, collectively, all Series of
the Series 1999B 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 indenture supplemental to
this Base Indenture, dated as of even date with this Base Indenture, 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 to be issued
hereunder.
"TRANSFER AND SALE AGREEMENT" shall mean the Transfer and Sale
Agreement, dated as of __________, 1999, by and among the Depositor, the
Depositor Eligible Lender Trustee, the Issuer and the Initial Co-Owner Eligible
Lender Trustee.
"TRANSFERRED ASSETS" shall mean all rights of the Depositor
and the Depositor Eligible Lender Trustee in and to the Financed Student Loans,
the Contracts of Guarantee with respect thereto, the Purchase Agreements and the
Servicing Agreements with respect to the Financed Student Loans serviced
thereunder, including all rights of the Depositor under the warranties of each
Seller, Master Servicer or Servicer, as the case may be thereunder.
"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 Firstar Bank, National Association, Cincinnati, Ohio:
Account No. __________________ _______________________________________, (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.
"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:
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(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 Ohio Revised Code, 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 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
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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.
(b) 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.
(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 (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.
(d) 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.
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(e) 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.
(f) 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.
(g) In any case where several matters are required to be
certified by, or covered by an opinion of, any specified Person, it is not
necessary that all such matters be certified by, or covered by the opinion of,
only one such Person, or that they be so certified or covered by only one
document, but one such Person may certify or give an opinion with respect to
some matters and one or more other such Persons as to other matters, and any
such Person may certify or give an opinion as to such matters in one or several
documents.
(h) 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.
(i) 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.
(j) 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
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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.
(k) 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.
"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.
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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 this
Base Indenture or in the Terms Supplement, each Series of Notes issued hereunder
shall be authorized by, shall have the terms set forth in and shall be subject
to the further conditions, if any, of the Terms Supplement which shall be
executed and delivered in connection with the issuance of such Series of Notes.
A Series of Notes may be issued under and secured by this Base
Indenture and a Terms Supplement relating thereto, subject to the conditions
hereinafter provided, for the purpose of (i) making or acquiring Student Loans
and (ii) making deposits to certain of the Funds and Accounts hereunder.
Such Series of Notes shall be executed and authenticated
substantially in the form and manner provided in this Base Indenture with such
changes as may be necessary or appropriate to conform to the provisions of the
Terms Supplement and shall be deposited with the Indenture Trustee for
authentication, but before such Series of Notes shall be authenticated and
delivered by the Indenture Trustee, there shall be filed with the Indenture
Trustee the following:
(a) a certified copy of the resolution of the board of
directors of the Issuer authorizing the issuance of such Series of Notes; and
(b) a fully executed counterpart of the Terms Supplement.
When the documents described above in this Section shall
have been filed with the Indenture Trustee and when such Series of Notes shall
have been executed and authenticated as required by this Base Indenture, the
Indenture Trustee shall deliver such Series of Notes at one time to or upon the
order of the Initial Purchasers, but only 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
Indenture shall be paid to the Indenture Trustee for deposit to the credit of
the Funds and Accounts as set forth in the Terms Supplement.
Each Series of Notes shall be limited obligations of the
Issuer payable solely from and secured under this Indenture solely by the Trust
Estate as provided in this Indenture. Each Note 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 or
D, as applicable, to the Terms Supplement and may have such letters, numbers or
other marks of identification and such legends of
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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 or D, as
applicable, to the Terms Supplement, as applicable, duly executed by the
registered owner in person or by its duly authorized attorney, with signatures
guaranteed, in a manner satisfactory to the Indenture Trustee 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).
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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 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
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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 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 or D 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.
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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.
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ARTICLE III
[Reserved]
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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.
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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
shall be deposited with the Indenture Trustee on the Date of Issuance, and the
Indenture Trustee 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 following purposes in the following
order of priority:
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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 1999B 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 shall deposit to the credit of the
Acquisition Fund the amount required by the Terms Supplement.
The Acquisition Fund and the Accounts therein (other than the
Capitalized Interest Account 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.
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
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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 Depositor or its affiliates and
such indenture trustee or from the Issuer, the Depositor or its affiliates for
Student Loans financed by the Issuer, the Depositor or its affiliates 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 Depositor or the 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 Depositor or the Issuer) (as specified in a 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 Depositor, other indenture
trustee and/or the Indenture Trustee in connection with
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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 5.3.2 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 5.3.3 CAPITALIZED INTEREST ACCOUNT. There is
established hereunder an Account in the Acquisition Fund designated the
"Capitalized Interest Account." The Indenture Trustee shall deposit to the
credit of Capitalized Interest Account of the Acquisition Fund the amount
required by the Terms Supplement. To provide for the payment of interest on any
Distribution Date or other date on which interest on the Notes is due, the
Indenture Trustee shall transfer from the Capitalized Interest Account, after
any transfer pursuant to Sections 4.02(ii) and (iii) of the Terms Supplement but
prior to any transfer pursuant to Section 5.2 hereof, on the Business Day
immediately preceding each Distribution Date and any other date on which
interest is due on the Notes, to the extent of moneys available in the
Capitalized Interest Account, an amount up to but not exceeding the amount
needed to increase the amount in the Note Payment Account of the Collection Fund
to the amount of the related Noteholders' Interest Distribution Amount on such
Distribution Date or other date on which interest on the Notes is due. The
Indenture Trustee shall continue to make such transfers until the date on which
all moneys in the Capitalized Interest Account have been transferred from such
Account; provided, that, after ____________, 1999, the Trustee shall also
transfer from time to time any portion or all of the Balance of the Capitalized
Interest Account to the balance of the Acquisition Fund as directed by the
Issuer.
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.
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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 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 and with Section 8.3
hereof. Nothing in this Indenture shall be 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 Depositor or other purchaser on behalf of the Depositor 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 Depositor 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
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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 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 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 or higher rates
of interest, being eligible, after exchange, for the same Special Allowance
Payments, and 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.
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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 in the Collection Fund under this Section.
The Indenture Trustee shall deposit to the credit of (a) the
Collection Account and (b) the Expense Account in the Collection Fund the
amounts required by the 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 received from the Capitalized Interest Account in
the Student Loan Acquisition Fund as provided in Section 5.3.3 hereof, (ii) any
amounts therein transferred from the Reserve Fund and (iii) any Advances.
Notwithstanding
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anything herein or in the Terms Supplement to the contrary, if on any
Distribution Date there are insufficient funds transferred to the Note Payment
Account for payment of any Series 1999A Noteholders' Interest Distribution
Amount, the Indenture Trustee is directed to, and shall apply any funds already
then on deposit in the Note Payment Account for payment of any Series 1999B
Noteholders' Interest Distribution Amount to the payment of such Series 1999A
Noteholders' Interest Distribution Amount.
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 Depositor may, no later
than the 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 Depositor are referred to herein as "Advances").
Such Advances are recoverable by the Issuer, (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. The Depositor shall have
no obligation, legal or otherwise, to make any Advance, and a determination by
the Depositor to make an Advance shall not create any obligation of the
Depositor, 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
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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 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 withdrawn by the Issuer 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. Such request
shall be signed by an Authorized Officer. Any Available Funds withdrawn by the
Issuer from the Excess Surplus Account shall not thereafter be available to the
Indenture Trustee to make payments on the Notes. Until withdrawn by 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 and secured hereunder solely by (i) the Trust
Estate 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 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, 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
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secured hereunder by the pledge of the Trust Estate 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. Subordinate
Issuer Exchange Payments shall be secured hereunder by the pledge of the Trust
Estate granted hereby, by the lien thereon and 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. 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 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. 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:
(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, 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 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 the Trust Estate, 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.
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(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, 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 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 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 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:
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(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 "A-1", "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, (i.e., "A-1", "F-1" or "P-1") by each Rating
Agency and which matures 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
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(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) 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 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
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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
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.
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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.
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.
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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 require the Administrator to 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. The Indenture Trustee hereby
acknowledges the authority of the Administrator under the terms of the
Administration Agreement to take all action necessary to administer, operate and
perform all acts and things required to administer, operate and maintain the
Program in strict compliance with the law.
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,
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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
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
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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 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
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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 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 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 Article of
Association, its By-Laws 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 in the manner and to the extent provided in this Indenture. The
Trust Estate 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
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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 validly taken. The Issuer is duly authorized under its Articles of
Association, its By-Laws 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 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 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 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 creating a lien or charge on the Trust Estate 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 subordinate in priority to that of the
Notes, or secured by a pledge of the Trust Estate arising on or after such date
as the pledge of the Trust Estate hereunder shall be discharged and satisfied as
provided in this Indenture, or from issuing notes, 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.
SECTION 6.13 Limitation on Program Operating Expenses.
-----------------------------------------
The Issuer shall not permit the Program Operating Expenses
described in clause (iv) 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
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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 Issuer 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 an 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 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.
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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 Issuer hereby
appoints Firstar Bank, National Association to act as the initial Indenture
Trustee hereunder. Firstar Bank, National Association hereby accepts such
appointment and the trusts created under this Indenture, and agrees to perform
said trusts, but only upon and subject to the following terms and conditions, to
all of which the Holders agree, such agreement to be evidenced with respect to
the Holders by their acceptance of the Notes:
(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 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
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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 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 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
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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 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 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
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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 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
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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 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;
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(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 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
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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 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.
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(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.
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
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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, 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.
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, 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
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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.
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.
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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 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
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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.
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.
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.
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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.
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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 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
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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 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.
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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.
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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 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
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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, (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 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
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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
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
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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, the Depositor, the Administrator or their
affiliates) 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 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
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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.
No Carryover Interest shall be paid under this Part 1 until
all payments required to be made pursuant to FIRST through FOURTH of this Part 1
have been made in full, and then if paid, shall be paid in accordance with the
provisions of Section 4.02 of the Terms Supplement.
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 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
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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; and
FOURTH, to the payment of all Carryover Interest due and
unpaid on the Subordinate Notes, without preference or priority to any
Subordinate Notes over any other Subordinate 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 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,
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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 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.
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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 (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 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.
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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 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 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,
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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, within thirty (30) days after the
Indenture Trustee becomes aware of the occurrence of an Event of Default, 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.
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.
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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 Notes (provided, however, that
such written confirmation shall not be required for a Supplemental Indenture
executed pursuant to item (13) 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 under the Trust Indenture Act or any
similar federal statute hereafter in effect, and, if the
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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 provide for the issuance of credit enhancement,
including, but not limited to, a policy of bond insurance, with respect
to any Series of Notes;
(13) To add any additional Eligible Lender Trustee or replace
any existing Eligible Lender Trustee; or
(14) 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 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
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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 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.
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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
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sufficient moneys to make such
payment, the sufficiency of said
moneys or Eligible Investments to be
verified 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
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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.
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
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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 the amounts so paid to the Issuer (without
interest thereon), subject to any applicable statute of limitation.
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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.
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SECTION 11.3 Meetings; Regulations of the Indenture Trustee.
-----------------------------------------------
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
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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.
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.
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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: (▇▇▇) ▇▇▇-▇▇▇▇, 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
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been filed in writing by the Initial Co-Owner Eligible Lender Trustee with
the Issuer and the Indenture Trustee.
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 Co-Owner Trustee not in its
individual capacity, but solely as co-owner trustee of the Delaware Trust, 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 Directors, 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 hereof, 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.
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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 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 Issuer shall furnish
or cause to be 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 this 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.
On or before June 30 in each calendar year, beginning in 2003,
the Issuer shall furnish or cause to be furnished 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
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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 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.
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IN WITNESS WHEREOF, STUDENT LOAN FUNDING 1999-A/B TRUST, by
Firstar Bank, National Association, not in its individual capacity, but solely
as Co-Owner Trustee, 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, as Initial Co-Owner Eligible Lender Trustee, 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 1999-A/B TRUST,
By FIRSTAR BANK NATIONAL BANK,
not in its individual capacity, but solely as Co-
Owner Trustee of the Issuer on behalf of the Issuer
By_________________________________________________
Title:_____________________________________________
FIRSTAR BANK, NATIONAL ASSOCIATION,
as Initial Co-Owner Eligible Lender Trustee
By_________________________________________________
Title:_____________________________________________
FIRSTAR BANK, NATIONAL ASSOCIATION,
as Indenture Trustee
By_________________________________________________
Title:_____________________________________________
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SCHEDULE I
SCHEDULE OF APPROVED GUARANTEE AGENCIES
---------------------------------------
-----------------------------------------------------------------------------------------------------
California Student Aid Commission Nebraska Student Loan Program
-----------------------------------------------------------------------------------------------------
Educational Credit Management Corporation New Jersey Higher Assistance Authority
-----------------------------------------------------------------------------------------------------
Finance Authority of Maine New York State Higher Education Services
Corporation
-----------------------------------------------------------------------------------------------------
FLORIDA DEPARTMENT OF EDUCATION, OFFICE OF Oklahoma Guaranteed Student Loan Program
STUDENT FINANCIAL ASSISTANCE
-----------------------------------------------------------------------------------------------------
Georgia Higher Education Assistance Pennsylvania Higher Education Assistance
Corporation Agency
-----------------------------------------------------------------------------------------------------
GREAT LAKES HIGHER EDUCATION GUARANTY Tennessee Student Assistance Commission
AUTHORITY
-----------------------------------------------------------------------------------------------------
Kentucky Higher Education Assistance Texas Guaranteed Student Loan Corporation
Authority
-----------------------------------------------------------------------------------------------------
Missouri Guaranteed Student Loan Program UNITED STUDENT AID FUNDS, INC.
-----------------------------------------------------------------------------------------------------
BOLD = NAMED IN S-3 REGISTRATION STATEMENT
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SCHEDULE II
SCHEDULE OF APPROVED SERVICERS AND SERVICING AGREEMENTS
-------------------------------------------------------
Servicers Servicing Agreements
--------- --------------------
--------------------------------------------------------------------------------
AFSA DATA CORPORATION ("AFSA") Servicing Agreement, dated as of
November 1, 1998,
[among/between] the [Master
Servicer, the Depositor] and
AFSA and the Subservicing
Addendum, dated as of ________
1, 1999, among the Master
Servicer, AFSA and the
Depositor.
--------------------------------------------------------------------------------
GREAT LAKES HIGHER EDUCATION SERVICING CENTER Servicing Agreement, dated as of
("GLHESC") November 1, 1998, between the
Master Servicer and GLHESC and
the Subservicing Addendum, dated
as of ________ 1, 1999, among
the Master Servicer, GLHESC and
the Depositor.
--------------------------------------------------------------------------------
INTUITION, INC. ("INTUITION") Servicing Agreement, dated as of
July 31, 1998, between the
Master Servicer and InTuition
and the Subservicing Addendum,
dated as of __________, 1999,
among the Master Servicer,
InTuition and the Depositor.
--------------------------------------------------------------------------------
KENTUCKY HIGHER EDUCATION STUDENT LOAN Servicing Agreement, dated as of
CORPORATION ("KHESLC") November 1, 1998,
[among/between] the [Master
Servicer, the Depositor] and
KHESLC and the Subservicing
Addendum, dated as of ________
1, 1999, among the Master
Servicer, KHESLC and the
Depositor.
--------------------------------------------------------------------------------
PENNSYLVANIA HIGHER EDUCATION ASSISTANCE Servicing Agreement, dated as of
AGENCY ("PHEAA") November 1, 1998,
[among/between] the [Master
Servicer, the Depositor] and
PHEAA and the Subservicing
Addendum, dated as of ________
1, 1999, among the Master
Servicer, PHEAA and the
Depositor.
--------------------------------------------------------------------------------
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--------------------------------------------------------------------------------
UNIPAC SERVICE CORPORATION ("UNIPAC") Servicing Agreement, dated as of
September 1, 1998, between the
Master Servicer and UNIPAC and
the Subservicing Addendum, dated
as of November 1, 1998, among
the Master Servicer, UNIPAC and
the Depositor.
--------------------------------------------------------------------------------
USA GROUP LOAN SERVICES, INC. ("USAGLS") Servicing Agreement, dated as of
November 1, 1998, between the
Master Servicer and USAGLS and
the Subservicing Addendum, dated
as of November 1, 1998, among
the Master Servicer, USAGLS and
the Depositor.
--------------------------------------------------------------------------------
BOLD = NAMED IN S-3 REGISTRATION STATEMENT
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EXHIBIT A
---------
to the
Indenture of Trust,
dated as of ________ 1, 1999, by and among
Student Loan Funding 1999-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]
STUDENT LOAN ACQUISITION CERTIFICATE
------------------------------------
This Student Loan Acquisition Certificate is submitted
pursuant to the provisions of the Indenture of Trust, dated as of _________ 1,
1999 (the "Indenture"), among Student Loan Funding 1999-A/B Trust, (the
"Issuer") by Firstar Bank, National Association, not in its individual capacity,
but solely as co-owner trustee of the Issuer (the "Co-Owner Trustee"), 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.
5. The undersigned, as the _________________________ of the
Issuer, is authorized to sign and submit this Certificate on behalf of the
Issuer.
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99
WITNESS my hand this _____ day of ___________________, 199_.
STUDENT LOAN FUNDING 1999-A/B Trust,
By FIRSTAR BANK, NATIONAL
ASSOCIATION, not in its individual
capacity, but solely as co-owner
trustee of the Issuer
By:_________________________________
Title:______________________________
A-2
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EXHIBIT B
---------
to the
Indenture of Trust,
dated as of ________ 1, 1999,
by and among
Student Loan Funding 1999-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 Indenture of Trust, dated as of
____________ 1, 1999, (the "Indenture"), among Student Loan Funding 1999-A/B
Trust (the "Issuer"), by Firstar Bank, National Association, not in its
individual capacity, but solely as co-owner trustee of 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
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.
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WITNESS my hand this _____ day of ___________________, 199_.
STUDENT LOAN FUNDING 1999-A/B Trust,
By FIRSTAR BANK, NATIONAL
ASSOCIATION, not in its individual
capacity, but solely as co-owner
trustee of the Issuer
By:_________________________________
Title:______________________________
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