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Exhibit 4.1
[FORM OF]
INDENTURE
between
EFG STUDENT LOAN TRUST 1999-[ ],
as Issuer
and
[INDENTURE TRUSTEE],
not in its individual capacity but
solely as Indenture Trustee
Dated as of [ , 1999]
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TABLE OF CONTENTS
Page
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ARTICLE I. DEFINITIONS AND USAGE
SECTION 1.1. Definitions and Usage..........................................2
SECTION 1.2. Incorporation by Reference of Trust Indenture Act..............2
ARTICLE II. THE NOTES
SECTION 2.1. Form ..........................................................3
SECTION 2.2. Execution, Authentication and Delivery.........................3
SECTION 2.3. Temporary Notes................................................4
SECTION 2.4. Registration; Registration of Transfer and Exchange............4
SECTION 2.5. Mutilated, Destroyed, Lost or Stolen Notes.....................6
SECTION 2.6. Persons Deemed Owner...........................................7
SECTION 2.7. Payment of Principal and Interest; Defaulted Interest;
Noteholders' Interest T-▇▇▇▇ Carryover........................7
SECTION 2.8. Cancellation ..................................................9
SECTION 2.9. Release of Collateral..........................................9
SECTION 2.10. Book-Entry Notes..............................................9
SECTION 2.11. Notices to Clearing Agency...................................10
SECTION 2.12. Definitive Notes.............................................10
SECTION 2.13. Disposition of Depositor Note................................11
ARTICLE III. COVENANTS
SECTION 3.1. Payment to Noteholders........................................11
SECTION 3.2. Maintenance of Office or Agency...............................11
SECTION 3.3. Money for Payments To Be Held in Trust........................12
SECTION 3.4. Existence ....................................................13
SECTION 3.5. Protection of Indenture Trust Estate..........................13
SECTION 3.6. Opinions as to Indenture Trust Estate.........................14
SECTION 3.7. Performance of Obligations; Servicing of Student Loans........14
SECTION 3.8. Negative Covenants............................................17
SECTION 3.9. Annual Statement as to Compliance.............................17
SECTION 3.10. Issuer May Consolidate, etc., Only on Certain Terms..........17
SECTION 3.11. Successor or Transferee......................................19
SECTION 3.12. No Other Business............................................19
SECTION 3.13. No Borrowing.................................................19
SECTION 3.14. Obligations of Servicer and Administrator....................20
SECTION 3.15. Guarantees, Loans, Advances and Other Liabilities............20
SECTION 3.16. Capital Expenditures.........................................20
SECTION 3.17. Restricted Payments..........................................20
SECTION 3.18. Notice of Events of Default..................................20
(i)
SECTION 3.19. Further Instruments and Acts.................................21
SECTION 3.20. Removal of Administrator.....................................21
ARTICLE IV. SATISFACTION AND DISCHARGE
SECTION 4.1. Satisfaction and Discharge of Indenture.......................21
SECTION 4.2. Application of Trust Money....................................22
SECTION 4.3. Repayment of Moneys Held by Paying Agent......................22
SECTION 4.4. Auction of Financed Student Loans.............................22
ARTICLE V. REMEDIES
SECTION 5.1. Events of Default.............................................23
SECTION 5.2. Acceleration of Maturity; Rescission and Annulment............24
SECTION 5.3. Collection of Indebtedness and Suits for Enforcement
by Indenture Trustee.........................................25
SECTION 5.4. Remedies; Priorities..........................................27
SECTION 5.5. Optional Preservation of the Indenture Trust Estate...........29
SECTION 5.6. Limitation of Suits...........................................29
SECTION 5.7. Unconditional Rights of Noteholders To Receive
Principal and Interest.......................................30
SECTION 5.8. Restoration of Rights and Remedies............................30
SECTION 5.9. Rights and Remedies Cumulative................................30
SECTION 5.10. Delay or Omission Not a Waiver...............................30
SECTION 5.11. Control by Noteholders.......................................30
SECTION 5.12. Waiver of Past Defaults......................................31
SECTION 5.13. Undertaking for Costs........................................31
SECTION 5.14. Waiver of Stay or Extension Laws.............................32
SECTION 5.15. Action on Notes..............................................32
SECTION 5.16. Performance and Enforcement of Certain Obligations...........32
ARTICLE VI. THE INDENTURE TRUSTEE
SECTION 6.1. Duties of Indenture Trustee...................................33
SECTION 6.2. Rights of Indenture Trustee...................................34
SECTION 6.3. Individual Rights of Indenture Trustee........................35
SECTION 6.4. Indenture Trustee's Disclaimer................................35
SECTION 6.5. Notice of Defaults............................................35
SECTION 6.6. Reports by Indenture Trustee to Noteholders...................35
SECTION 6.7. Compensation and Indemnity....................................36
SECTION 6.8. Replacement of Indenture Trustee..............................36
SECTION 6.9. Successor Indenture Trustee by Merger.........................37
SECTION 6.10. Appointment of Co-Trustee or Separate Trustee................38
SECTION 6.11. Eligibility; Disqualification................................39
SECTION 6.12. Preferential Collection of Claims Against Issuer.............39
(ii)
ARTICLE VII. NOTEHOLDERS' LISTS AND REPORTS
SECTION 7.1. Issuer To Furnish Indenture Trustee Names and
Addresses of Noteholders.....................................39
SECTION 7.2. Preservation of Information; Communications to
Noteholders..................................................40
SECTION 7.3. Reports by Issuer.............................................40
ARTICLE VIII. ACCOUNTS, DISBURSEMENTS AND RELEASES
SECTION 8.1. Collection of Money...........................................41
SECTION 8.2. Trust Accounts................................................41
SECTION 8.3. General Provisions Regarding Accounts.........................43
SECTION 8.4. Release of Indenture Trust Estate.............................44
SECTION 8.5. Opinion of Counsel............................................44
ARTICLE IX. SUPPLEMENTAL INDENTURES
SECTION 9.1. Supplemental Indentures Without Consent of Noteholders........45
SECTION 9.2. Supplemental Indentures with Consent of Noteholders...........46
SECTION 9.3. Execution of Supplemental Indentures..........................47
SECTION 9.4. Effect of Supplemental Indenture..............................48
SECTION 9.5. Conformity with Trust Indenture Act...........................48
SECTION 9.6. Reference in Notes to Supplemental Indentures.................48
ARTICLE X. REDEMPTION OF NOTES
SECTION 10.1. Redemption...................................................48
SECTION 10.2. Form of Redemption Notice....................................49
SECTION 10.3. Notes Payable on Redemption Date.............................49
ARTICLE XI. MISCELLANEOUS
SECTION 11.1. Compliance Certificates and Opinions.........................50
SECTION 11.2. Form of Documents Delivered to Indenture Trustee.............52
SECTION 11.3. Acts of Noteholders..........................................52
SECTION 11.4. Notices to Indenture Trustee, Issuer and Rating Agencies.....53
SECTION 11.5. Notices to Noteholders; Waiver...............................54
SECTION 11.6. Alternate Payment and Notice Provisions......................54
SECTION 11.7. Conflict with Trust Indenture Act............................54
SECTION 11.8. Effect of Headings and Table of Contents.....................55
SECTION 11.9. Successors and Assigns.......................................55
SECTION 11.10. Separability................................................55
SECTION 11.11. Benefits of Indenture.......................................55
SECTION 11.12. [RESERVED] .................................................55
SECTION 11.13. Governing Law...............................................55
SECTION 11.14. Counterparts................................................55
(iii)
SECTION 11.15. Recording of Indenture......................................55
SECTION 11.16. Trust Obligations...........................................55
SECTION 11.17. No Petition.................................................56
SECTION 11.18. Inspection .................................................56
EXHIBIT A-1 - Form of Senior Note
EXHIBIT A-2 - Form of Subordinate Note
EXHIBIT B - Senior Note Depository Agreement
EXHIBIT C - Form of Transferor Certificate
EXHIBIT D - Form of Investment Letter
(iv)
INDENTURE dated as of [ , 1999], between EFG STUDENT LOAN
TRUST 1999-[ ], a Delaware trust (the "Issuer"), and [INDENTURE TRUSTEE], a
[ ], as trustee and not in its individual capacity (the "Indenture Trustee").
Each party agrees as follows for the benefit of the other party and
for the equal and ratable benefit of the holders of the Issuer's Floating Rate
Asset Backed Senior Notes (the "Senior Notes") and Floating Rate Asset Backed
Subordinate Notes (the "Subordinate Notes" and, together with the Senior
Notes, the "Notes"):
GRANTING CLAUSE
The Issuer (and, with respect to legal title to the FFELP Student
Loans, the Trustee) hereby Grants to the Indenture Trustee at the Closing
Date, as trustee for the benefit of the Noteholders, all the Issuer's right,
title and interest in and to the following:
(a) the Student Loans, and all obligations of the Obligors
thereunder including all moneys paid thereunder on or after the
Cutoff Date {(or, in the case of New Loans or Serial Loans, on and
after the related Subsequent Cutoff Date, in the case of
Consolidation Loans, on and after the related date of origination, in
the case of Consolidation Loans the principal balances of which have
been increased by the principal balances of any related Add-on
Consolidation Loans, on and after the related Add-on Consolidation
Loan Funding Date,} and in the case of Qualified Substitute Student
Loans, on and after the date of assignment thereof to the Issuer);
(b) rights and remedies under the Loan Sale Agreement,
including the right of the Issuer to cause the Seller to repurchase
or substitute for Student Loans from the Issuer under circumstances
described therein;
(c) the Servicing Agreement, including the right of the
Issuer to cause the Servicer to purchase Student Loans from the
Issuer under the circumstances described therein;
(d) each Guarantee Agreement, including the right of the
Issuer to cause the related Guarantor to make Guarantee Payments in
respect of the Student Loans;
(e) all funds on deposit from time to time in the Trust
Accounts, including the Reserve Account Initial Deposit, and in all
investments and proceeds thereof (including all income thereon); and
(f) all present and future claims, demands, causes and
choses in action in respect of any or all of the foregoing and all
payments on or under and all proceeds of every kind and nature
whatsoever in respect of any or all of the foregoing, including all
proceeds of the conversion, voluntary or involuntary, into cash or
other liquid property, all cash proceeds, accounts, accounts
receivable, notes, drafts, acceptances, chattel paper, checks,
deposit accounts, insurance proceeds, condemnation awards, rights to
payment of any and every kind and other forms of obligations and
receivables,
instruments and other property which at any time constitute all or
part of or are included in the proceeds of any of the foregoing
(collectively, the "Collateral").
The foregoing Grant is made in trust to secure the payment of
principal of and interest on, and any other amounts owing in respect of, the
Notes, equally and ratably without prejudice, priority or distinction, and to
secure compliance with the provisions of this Indenture, all as provided in
this Indenture.
The Indenture Trustee, as Indenture Trustee on behalf of the
Noteholders, acknowledges such Grant, accepts the trusts under this Indenture
in accordance with the provisions of this Indenture and agrees to perform its
duties required in this Indenture to the best of its ability to the end that
the interests of the Noteholders may be adequately and effectively protected.
ARTICLE I.
Definitions and Usage
SECTION 1.1. Definitions and Usage. Except as otherwise specified
herein or as the context may otherwise require, capitalized terms used but not
defined herein are defined in Appendix A to the Administration Agreement,
dated as of [ 1999], among the Issuer, Educational Finance Group, Inc.
as Administrator, and the Indenture Trustee, which also contains rules as to
usage that shall be applicable herein.
SECTION 1.2. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Indenture
Trustee.
"obligor" on the indenture securities means the Issuer and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by Commission rule
have the meaning assigned to them by such definitions.
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ARTICLE II.
The Notes
SECTION 2.1. Form. The Senior Notes and the Subordinate Notes,
together with the Indenture Trustee's certificate of authentication, shall be
in substantially the form set forth in Exhibits A-1 and A-2, respectively,
with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may, consistently herewith, be determined by
the officers executing such Notes, as evidenced by their execution of the
Notes. Any portion of the text of any Note may be set forth on the reverse
thereof, with an appropriate reference thereto on the face of the Note.
The Definitive Notes shall be typewritten, printed, lithographed or
engraved or produced by any combination of these methods (with or without
steel engraved borders), all as determined by the officers executing such
Notes, as evidenced by their execution of such Notes.
Each Note shall be dated the date of its authentication. The terms of
the Notes set forth in Exhibits A-1 and A-2 are part of the terms of this
Indenture.
SECTION 2.2. Execution, Authentication and Delivery. The Notes shall
be executed on behalf of the Issuer by any of its Authorized Officers. The
signature of any such Authorized Officer on the Notes may be manual or
facsimile.
Notes bearing the manual or facsimile signature of individuals who
were at any time Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.
The Indenture Trustee shall upon Issuer Order authenticate and
deliver Senior Notes for original issue in an aggregate principal amount of
$[ ] and Subordinate Notes for original issue in an aggregate principal
amount of $[ ]. The aggregate principal amount of Senior Notes and
Subordinate Notes outstanding at any time may not exceed such respective
amounts except as provided in Section 2.5.
Each Note shall be dated the date of its authentication. The Senior
Notes shall be issuable as registered Book-Entry Notes in the minimum
denomination of $1,000 and in integral multiples of $1,000 in excess thereof.
The Subordinate Notes shall be issuable as registered Definitive Notes in the
minimum denomination of $250,000 and in integral multiples of $1,000 in excess
thereof except for the Depositor Note.
No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Note a
certificate of authentication substantially in the form provided for herein
executed by the Indenture Trustee by the manual signature of one of its
authorized signatories, and such certificate upon any Note shall be
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conclusive evidence, and the only evidence, that such Note has been duly
authenticated and delivered hereunder.
SECTION 2.3. Temporary Notes. Pending the preparation of Definitive
Notes, the Issuer may execute, and upon receipt of an Issuer Order the
Indenture Trustee shall authenticate and deliver, temporary Notes which are
printed, lithographed, typewritten, mimeographed or otherwise produced, of the
tenor of the Definitive Notes in lieu of which they are issued and with such
variations not inconsistent with the terms of this Indenture as the officers
executing such Notes may determine, as evidenced by their execution of such
Notes.
If temporary Notes are issued, the Issuer will cause Definitive Notes
to be prepared without unreasonable delay. After the preparation of Definitive
Notes, the temporary Notes shall be exchangeable for Definitive Notes upon
surrender of the temporary Notes at the office or agency of the Issuer to be
maintained as provided in Section 3.2, without charge to the Noteholder. Upon
surrender for cancellation of any one or more temporary Notes, the Issuer
shall execute and the Indenture Trustee shall authenticate and deliver in
exchange therefor a like principal amount of Definitive Notes of authorized
denominations. Until so exchanged, the temporary Notes shall in all respects
be entitled to the same benefits under this Indenture as Definitive Notes.
SECTION 2.4. Registration; Registration of Transfer and Exchange. The
Issuer shall cause to be kept a register (the "Note Register") in which,
subject to such reasonable regulations as it may prescribe and the
restrictions on transfers of the Subordinate Notes set forth herein, the
Issuer shall provide for the registration of Notes and the registration of
transfers of Notes. The Indenture Trustee shall be "Note Registrar" for the
purpose of registering Notes and transfers of Notes as herein provided. Upon
any resignation of any Note Registrar, the Issuer shall promptly appoint a
successor or, if it elects not to make such an appointment, assume the duties
of Note Registrar.
If a Person other than the Indenture Trustee is appointed by the
Issuer as Note Registrar, the Issuer will give the Indenture Trustee prompt
written notice of the appointment of such Note Registrar and of the location,
and any change in the location, of the Note Register, and the Indenture
Trustee shall have the right to inspect the Note Register at all reasonable
times and to obtain copies thereof, and the Indenture Trustee shall have the
right to rely upon a certificate executed on behalf of the Note Registrar by
an Executive Officer thereof as to the names and addresses of the Noteholders
and the principal amounts and number of such Notes.
Subject to the restrictions and limitations set forth below, upon
surrender for registration of transfer of any Note at the office or agency of
the Issuer to be maintained as provided in Section 3.2, if the requirements of
Section 8-401(1) of the UCC are met, the Issuer shall execute, and the
Indenture Trustee shall authenticate and the Noteholder shall obtain from the
Indenture Trustee, in the name of the designated transferee or transferees,
one or more new Notes in any authorized denominations, of a like aggregate
principal amount.
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The Subordinate Notes have not been and will not be registered under
the Securities Act and will not be listed on any exchange or treated as traded
on an "established securities market" as defined in Treas. Reg. Section
1.7704-1(e) (including an interdealer quotation system that regularly
disseminates firm buy or sell quotations by identified brokers or dealers by
electronic means or otherwise). No transfer of a Subordinate Note shall be
made unless such transfer is made pursuant to an effective registration
statement under the Securities Act and any applicable state securities laws or
is exempt from the registration requirements under said Act and such state
securities laws. In the event that a transfer of a Subordinate Note is to be
made in reliance upon an exemption from the Securities Act and state
securities laws, in order to assure compliance with the Securities Act and
such laws, the Noteholder desiring to effect such transfer and such
Noteholder's prospective transferee shall each certify to the Indenture
Trustee and the Issuer in writing the facts surrounding the transfer in
substantially the forms set forth in Exhibit C (the "Transferor Certificate")
and Exhibit D (the "Investment Letter"). No transfer of a Subordinate Note
shall be made unless the proposed transferee has confirmed that it is a
"qualified institutional buyer" defined in Rule 144A under the Securities Act.
In the event of a transfer of a Subordinate Note to a "qualified institutional
buyer" that is not made in reliance on Rule 144A, there shall also be
delivered to the Indenture Trustee an Opinion of Counsel that such transfer
may be made pursuant to an exemption from the Securities Act and state
securities laws, which Opinion of Counsel shall not be an expense of the
Issuer, the Trustee or the Indenture Trustee (unless it is the transferee from
whom such opinion is to be obtained) or of the Depositor; provided that such
opinion of counsel in respect of the applicable state securities laws may be a
memorandum of law rather than an opinion if such counsel is not licensed in
the applicable jurisdiction. The Depositor shall cause the Administrator to
provide to any Noteholder and any prospective transferee of a Subordinate Note
designated by any such Noteholder information necessary to satisfy the
condition to eligibility set forth in Rule 144A(d)(4) for transfer of any such
Subordinate Note without registration thereof under the Securities Act
pursuant to the registration exemption provided by Rule 144A. Each Noteholder
desiring to effect such a transfer of a Subordinate Note shall, and does
hereby agree to, indemnify the Issuer, the Trustee, the Indenture Trustee and
the Depositor against any liability that may result if the transfer is not so
exempt or is not made in accordance with federal and state securities laws.
In addition, no transfer of a Subordinate Note shall be made to any
proposed transferee that is not a United States Person.
Notwithstanding anything to the contrary contained herein, no resale
or other transfer of a Subordinate Note or any interest therein shall be made
unless (i) immediately after giving effect to such resale or other transfer,
there would be less than 100 Subordinate Noteholders and (ii) if the
transferee (or any person or entity for whom such transferee is acting as
agent or custodian in connection with the acquisition of such Subordinate
Note) is a partnership, grantor trust or S corporation for federal income tax
purposes (a "Flow-Through Entity"), any Subordinate Notes owned by or on
behalf of such Flow-Through Entity will represent less than 50% of the value
of all assets owned by or on behalf of such Flow-Through Entity and no special
allocation of income, gain, loss, deduction or credit from such Subordinate
Notes will be made among the beneficial owners of such Flow-Through Entity.
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The Issuer shall cause each Subordinate Note to contain a legend
stating that transfer of the Subordinate Notes is subject to certain
restrictions and referring prospective purchasers of the Notes to this Section
2.4 with respect to such restrictions.
At the option of the Noteholder, Notes may be exchanged for other
Notes in any authorized denominations, of a like aggregate principal amount,
upon surrender of the Notes to be exchanged at such office or agency. Whenever
any Notes are so surrendered for exchange, if the requirements of Section
8-401(1) of the UCC are met, the Issuer shall execute, and the Indenture
Trustee shall authenticate and, the Noteholder shall obtain from the Indenture
Trustee, the Notes which the Noteholder making the exchange is entitled to
receive.
All Notes issued upon any registration of transfer or exchange of
Notes shall be the valid obligations of the Issuer, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Notes
surrendered upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or
exchange shall be duly endorsed by, or be accompanied by a written instrument
of transfer in form satisfactory to the Note Registrar duly executed by the
Noteholder thereof or such Noteholder's attorney duly authorized in writing,
with such signature guaranteed by an "eligible guarantor institution" meeting
the requirements of the Note Registrar, which requirements include membership
or participation in Securities Transfer Agent's Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Note
Registrar in addition to, or in substitution for, STAMP, all in accordance
with the Exchange Act.
No service charge shall be made to a Noteholder for any registration
of transfer or exchange of Notes, but the Indenture Trustee may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any registration of transfer or exchange of
Notes, other than exchanges pursuant to Section 2.3 or 9.6 not involving any
transfer.
The preceding provisions of this Section notwithstanding, the Issuer
shall not be required to make and the Note Registrar need not register
transfers or exchanges of Notes selected for redemption or of any Note for a
period of 15 days preceding the due date for any payment with respect to the
Note.
SECTION 2.5. Mutilated, Destroyed, Lost or Stolen Notes. If (i) any
mutilated Note is surrendered to the Indenture Trustee, or the Indenture
Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Note, and (ii) there is delivered to the Indenture Trustee such
security or indemnity as may be required by it to hold the Issuer and the
Indenture Trustee harmless, then, in the absence of notice to the Issuer, the
Note Registrar or the Indenture Trustee that such Note has been acquired by a
bona fide purchaser, and provided that the requirements of Section 8-405 of
the UCC are met, the Issuer shall execute and upon its request the Indenture
Trustee shall authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Note, a replacement Note of the same
category; provided, however, that if any such destroyed, lost or stolen Note,
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but not a mutilated Note, shall have become or within 15 days shall be due and
payable, or shall have been called for redemption, instead of issuing a
replacement Note, the Issuer may pay such destroyed, lost or stolen Note when
so due or payable or upon the Redemption Date without surrender thereof. If,
after the delivery of such replacement Note or payment of a destroyed, lost or
stolen Note pursuant to the proviso to the preceding sentence, a bona fide
purchaser of the original Note in lieu of which such replacement Note was
issued presents for payment such original Note, the Issuer and the Indenture
Trustee shall be entitled to recover such replacement Note (or such payment)
from the Person to whom it was delivered or any Person taking such replacement
Note from such Person to whom such replacement Note was delivered or any
assignee of such Person, except a bona fide purchaser, and shall be entitled
to recover upon the security or indemnity provided therefor to the extent of
any loss, damage, cost or expense incurred by the Issuer or the Indenture
Trustee in connection therewith.
Upon the issuance of any replacement Note under this Section, the
Issuer may require the payment by the Noteholder thereof of a sum sufficient
to cover any tax or other governmental charge that may be imposed in relation
thereto and any other reasonable expenses (including the fees and expenses of
the Indenture Trustee) connected therewith.
Every replacement Note issued pursuant to this Section in replacement
of any mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Issuer, whether or not the mutilated,
destroyed, lost or stolen Note shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Notes.
SECTION 2.6. Persons Deemed Owner. Prior to due presentment for
registration of transfer of any Note, the Issuer, the Indenture Trustee and
any agent of the Issuer or the Indenture Trustee may treat the Person in whose
name any Note is registered (as of the day of determination) as the owner of
such Note for the purpose of receiving payments of principal of, interest (and
any Noteholders' Interest T-▇▇▇▇ Carryover), if any, on such Note and for all
other purposes whatsoever, whether or not such Note be overdue, and neither
the Issuer, the Indenture Trustee nor any agent of the Issuer or the Indenture
Trustee shall be affected by notice to the contrary.
SECTION 2.7. Payment of Principal and Interest; Defaulted Interest;
Noteholders' Interest T-▇▇▇▇ Carryover. (a) The Notes shall accrue interest
as provided in the forms of Senior Note and Subordinate Note set forth in
Exhibits A-1 and A-2, respectively, and such interest shall be payable on each
Quarterly Payment Date as specified therein, subject, in each case, to Section
3.1. Any installment of interest (and any Noteholders' Interest T-▇▇▇▇
Carryover) or principal, if any, payable on any Note which is punctually paid
or duly provided for by the Issuer on the applicable Quarterly Payment Date
shall be paid to the Person in whose name such Note (or one or more
Predecessor Notes) is registered on the
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Record Date by wire transfer if such Person holds Notes with original
principal balances in the aggregate in excess of $1,000,000 and provides
appropriate written instructions to the Indenture Trustee no later than such
Record Date, and otherwise by check mailed first-class, postage prepaid to
such Person's address as it appears on the Note Register on such Record Date,
except that, unless Definitive Notes have been issued pursuant to Section
2.12, with respect to Senior Notes registered on the Record Date in the name
of the nominee of the Clearing Agency (initially, such nominee to be Cede &
Co.), payment will be made by wire transfer in immediately available funds to
the account designated by such nominee and except for the final installment of
principal payable with respect to such Note on a Quarterly Payment Date or on
the Senior Note Final Maturity Date or the Subordinate Note Final Maturity
Date, as the case may be, which shall be payable as provided below. The funds
represented by any such checks returned undelivered shall be held in
accordance with Section 3.3.
(b) The principal of each Note shall be payable in installments on
each Quarterly Payment Date as provided in the forms of the Senior Notes and
Subordinate Notes set forth in Exhibits A-1 and A-2, respectively.
Notwithstanding the foregoing, the entire unpaid principal amount of the Notes
shall be due and payable, if not previously paid, on the date on which an
Event of Default shall have occurred and be continuing, if the Indenture
Trustee or the Noteholders of the Notes representing not less than a majority
of the Outstanding Amount of the Notes have declared the Notes to be
immediately due and payable in the manner provided in Section 5.2. All
principal payments on each class of Notes shall be made pro rata to the
Noteholders of such class. The Indenture Trustee shall notify the Person in
whose name a Note is registered at the close of business on the Record Date
preceding the Quarterly Payment Date on which the Issuer expects that the
final installment of principal of and interest (and any Noteholders' Interest
T-▇▇▇▇ Carryover) on such Note will be paid. Such notice shall be mailed or
transmitted by facsimile prior to such final Quarterly Payment Date and shall
specify that such final installment will be payable only upon presentation and
surrender of such Note and shall specify the place where such Note may be
presented and surrendered for payment of such installment. Notices in
connection with redemptions of Notes shall be mailed to Noteholders as
provided in Section 10.2.
(c) If the Issuer defaults in a payment of interest on the Notes, the
Issuer shall pay defaulted interest (plus interest on such defaulted interest
to the extent lawful) at the applicable Note Rate in any lawful manner. The
Issuer may pay such defaulted interest to the persons who are Noteholders on a
subsequent special record date, which date shall be at least five Business
Days prior to the payment date. The Issuer shall fix or cause to be fixed any
such special record date and payment date, and, at least 15 days before any
such special record date, the Issuer shall mail to the Indenture Trustee a
notice which the Indenture Trustee will, as soon as practicable, distribute to
each Noteholder that states the special record date, the payment date and the
amount of defaulted interest to be paid.
(d) The Senior Noteholders' Interest T-▇▇▇▇ Carryover and the
Subordinate Noteholders' Interest T-▇▇▇▇ Carryover on each Quarterly Payment
Date including, in the case of the Senior Noteholders' Interest T-▇▇▇▇
Carryover, all such unpaid carryover for prior Quarterly Payment Dates and
interest accrued thereon at the Senior Note T-▇▇▇▇ Rate for each
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applicable Quarterly Interest Period and including, in the case of the
Subordinate Noteholders' Interest T-▇▇▇▇ Carryover, all such unpaid carryover
from prior Quarterly Payment Dates and interest accrued thereon at the
Subordinate Note T-▇▇▇▇ Rate for the applicable Quarterly Interest Period,
shall be payable on each Quarterly Payment Date solely to the extent of funds
required and available to be distributed to Noteholders by the Indenture
Trustee pursuant to Section 2(e)(ii)(b)(iii) of the Administration Agreement
(and shall be allocated among the classes of Notes as provided in Section
8.2(d)). Any Noteholders' Interest T-▇▇▇▇ Carryover for a class of Notes, if
any, payable with respect to such class of Notes on the applicable Quarterly
Payment Date shall be paid to the Person in whose name such Note (or one or
more Predecessor Notes) is registered on the applicable Record Date by wire
transfer if such Person holds Notes with original principal balances in the
aggregate in excess of $1,000,000 and provides appropriate written
instructions to the Indenture Trustee no later than such Record Date, and
otherwise by check mailed first-class postage prepaid to such Person's address
as it appears on the Note Register on such Record Date, except that, unless
Definitive Notes have been issued pursuant to Section 2.12, with respect to
the Senior Notes registered on the Record Date in the name of the nominee of
the Clearing Agency (initially, such nominee to be Cede & Co.), payment will
be made by wire transfer in immediately available funds to the account
designated by such nominee. The funds represented by any such checks returned
undelivered shall be held in accordance with Section 3.3.
SECTION 2.8. Cancellation. All Notes surrendered for payment,
registration of transfer, exchange or redemption shall, if surrendered to any
Person other than the Indenture Trustee, be delivered to the Indenture Trustee
and shall be promptly canceled by the Indenture Trustee. The Issuer may at any
time deliver to the Indenture Trustee for cancellation any Notes previously
authenticated and delivered hereunder which the Issuer may have acquired in
any manner whatsoever, and all Notes so delivered shall be promptly canceled
by the Indenture Trustee. No Notes shall be authenticated in lieu of or in
exchange for any Notes canceled as provided in this Section, except as
expressly permitted by this Indenture. All canceled Notes may be held or
disposed of by the Indenture Trustee in accordance with its standard retention
or disposal policy as in effect at the time, unless the Issuer shall direct by
an Issuer Order that they be returned to it and so long as such Issuer Order
is timely and the Notes have not been previously disposed of by the Indenture
Trustee.
SECTION 2.9. Release of Collateral. Subject to Section 11.1 and the
terms of the Basic Documents, the Indenture Trustee shall release property
from the lien of this Indenture only upon receipt of an Issuer Request
accompanied by an Officers' Certificate of the Issuer, an Opinion of Counsel
and Independent Certificates in accordance with TIA Sections 314(c) and
314(d)(1) or an Opinion of Counsel in lieu of such Independent Certificates to
the effect that the TIA does not require any such Independent Certificates.
SECTION 2.10. Book-Entry Notes. The Senior Notes, upon original
issuance, will be issued in the form of typewritten Notes representing the
Book-Entry Notes, to be delivered to The Depository Trust Company, the initial
Clearing Agency, by, or on behalf of, the Issuer. Such Notes shall initially
be registered on the Note Register in the name of Cede & Co., the nominee of
the initial Clearing Agency, and no Note Owner will receive a Definitive
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Note (as defined below) representing such Note Owner's interest in such
Book-Entry Note, except as provided in Section 2.12. Unless and until
definitive, fully registered Notes (the "Definitive Notes") have been issued
to Note Owners pursuant to Section 2.12:
(i) the provisions of this Section shall be in full force and
effect;
(ii) the Note Registrar and the Indenture Trustee may deal with
the Clearing Agency for all purposes (including the payment of
principal of and interest and other amounts on the Book-Entry Notes)
as the authorized representative of the Note Owners;
(iii) to the extent that the provisions of this Section
conflict with any other provisions of this Indenture, the provisions
of this Section shall control;
(iv) the rights of Note Owners shall be exercised only through
the Clearing Agency and shall be limited to those established by law
and agreements between such Note Owners and the Clearing Agency
and/or the Clearing Agency Participants pursuant to the Note
Depository Agreement. Unless and until Definitive Notes are issued
pursuant to Section 2.12, the initial Clearing Agency will make
book-entry transfers among the Clearing Agency Participants and
receive and transmit payments of principal of and interest and other
amounts on the Book-Entry Notes to such Clearing Agency
Participants; and
(v) whenever this Indenture requires or permits actions to be
taken based upon instructions or directions of Noteholders of Notes
evidencing a specified percentage of the Outstanding Amount of the
Notes, the Clearing Agency shall be deemed to represent such
percentage only to the extent that it has received instructions to
such effect from Note Owners and/or Clearing Agency Participants
owning or representing, respectively, such required percentage of
the beneficial interest in the Notes and has delivered such
instructions to the Indenture Trustee.
SECTION 2.11. Notices to Clearing Agency. Whenever a notice or other
communication to the Noteholders is required under this Indenture, unless and
until Definitive Notes shall have been issued to Note Owners pursuant to
Section 2.12, the Indenture Trustee shall give all such notices and
communications specified herein to be given to Noteholders of the Senior Notes
to the Clearing Agency.
SECTION 2.12. Definitive Notes. If (i) the Administrator advises the
Indenture Trustee in writing that the Clearing Agency is no longer willing or
able to properly discharge its responsibilities with respect to the Book-Entry
Notes, and the Administrator is unable to locate a qualified successor, (ii)
the Administrator at its option advises the Indenture Trustee in writing that
it elects to terminate the book-entry system through the Clearing Agency or
(iii) after the occurrence of an Event of Default, a Servicer Default or an
Administrator Default, Note Owners representing beneficial interests
aggregating at least a majority of the Outstanding Amount of the Book-Entry
Notes advise the Clearing Agency (which shall then notify the Indenture
Trustee) in writing that the continuation of a book-entry
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system through the Clearing Agency is no longer in the best interests of the
Note Owners, then the Indenture Trustee will cause the Clearing Agency to
notify all Note Owners, through the Clearing Agency, of the occurrence of any
such event and of the availability of Definitive Notes to Note Owners
requesting the same. Upon surrender to the Indenture Trustee of the
typewritten Notes representing the Book-Entry Notes by the Clearing Agency,
accompanied by registration instructions, the Issuer shall execute and the
Indenture Trustee shall authenticate the Definitive Notes in accordance with
the instructions of the Clearing Agency. None of the Issuer, the Note
Registrar or the Indenture Trustee shall be liable for any delay in delivery
of such instructions and may conclusively rely on, and shall be protected in
relying on, such instructions. Upon the issuance of Definitive Notes, the
Indenture Trustee shall recognize the holders of the Definitive Notes as
Noteholders.
SECTION 2.13. Disposition of Depositor Note. On and after the Closing
Date, the Depositor shall retain the Depositor Note. Any attempt by the
Depositor to transfer the Depositor Note shall be void. The Depositor Note
(and any Note issued in exchange therefore) shall contain a legend stating
"THIS NOTE IS NONTRANSFERABLE."
ARTICLE III.
Covenants
SECTION 3.1. Payment to Noteholders. The Issuer will duly and
punctually pay the principal of (subject to the parenthetical in the following
sentence), interest, if any, on and any Noteholders' Interest T-▇▇▇▇ Carryover
(but only to the extent provided in Sections 2.7(d) and 8.2(d)) with respect
to the Notes in accordance with the terms of the Notes and this Indenture.
Without limiting the foregoing, subject to Section 8.2(d), the Issuer will
cause to be distributed that portion of the amounts on deposit in the Trust
Accounts on a Quarterly Payment Date (other than any Eligible Investments
deposited therein that will mature on the Business Day preceding a subsequent
Quarterly Payment Date) which the Noteholders are entitled to receive pursuant
to the Administration Agreement to Senior Noteholders and Subordinate
Noteholders in accordance with the Administration Agreement and Section 8.2
hereof. Amounts properly withheld under the Code by any Person from a payment
to any Noteholder of interest (including any Noteholders' Interest T-▇▇▇▇
Carryover) and/or principal shall be considered as having been paid by the
Issuer to such Noteholder for all purposes of this Indenture.
SECTION 3.2. Maintenance of Office or Agency. The Issuer will
maintain in the Borough of Manhattan, The City of New York, an office or
agency where Notes may be surrendered for registration of transfer or
exchange, and where notices and demands to or upon the Issuer in respect of
the Notes and this Indenture may be served. The Issuer hereby initially
appoints the Indenture Trustee to serve as its agent for the foregoing
purposes. The Issuer will give prompt written notice to the Indenture Trustee
of the location, and of any change in the location, of any such office or
agency. If at any time the Issuer shall fail to maintain any such office or
agency or shall fail to furnish the Indenture Trustee with the
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address thereof, such surrenders, notices and demands may be made or served at
the Corporate Trust Office, and the Issuer hereby appoints the Indenture
Trustee as its agent to receive all such surrenders, notices and demands.
SECTION 3.3. Money for Payments To Be Held in Trust. As provided in
Section 8.2, all payments of amounts due and payable with respect to any Notes
that are to be made from amounts distributed from the Collection Account or
any other Trust Account shall be made on behalf of the Issuer by the Indenture
Trustee or by another Paying Agent, and no amounts so distributed for payments
of Notes shall be paid over to the Issuer except as provided in this Section.
On or before the Business Day next preceding each Quarterly Payment
Date and Redemption Date, the Issuer shall distribute or cause to be
distributed to the Indenture Trustee (or any other Paying Agent) an aggregate
sum sufficient to pay the amounts then becoming due under the Notes, such sum
to be held in trust for the benefit of the Persons entitled thereto and
(unless the Paying Agent is the Indenture Trustee) shall promptly notify the
Indenture Trustee of its action or failure so to act.
The Issuer will cause each Paying Agent other than the Indenture
Trustee to execute and deliver to the Indenture Trustee an instrument in which
such Paying Agent shall agree with the Indenture Trustee (and if the Indenture
Trustee acts as Paying Agent, it hereby so agrees), subject to the provisions
of this Section, that such Paying Agent will:
(i) hold all sums held by it for the payment of amounts due
with respect to the Notes in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided and pay such sums to such
Persons as herein provided;
(ii) give the Indenture Trustee notice of any default by the
Issuer of which it has actual knowledge (or any other obligor upon
the Notes) in the making of any payment required to be made with
respect to the Notes;
(iii) at any time during the continuance of any such default,
upon the written request of the Indenture Trustee, forthwith pay to
the Indenture Trustee all sums so held in trust by such Paying
Agent;
(iv) immediately resign as a Paying Agent and forthwith pay to
the Indenture Trustee all sums held by it in trust for the payment
of Notes if at any time it ceases to meet the standards required to
be met by a Paying Agent at the time of its appointment; and
(v) comply with all requirements of the Code with respect to
the withholding from any payments made by it on any Notes of any
applicable withholding taxes imposed thereon and with respect to any
applicable reporting requirements in connection therewith.
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The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by
Issuer Order direct any Paying Agent to pay to the Indenture Trustee all sums
held in trust by such Paying Agent, such sums to be held by the Indenture
Trustee upon the same trusts as those upon which the sums were held by such
Paying Agent; and upon such payment by any Paying Agent to the Indenture
Trustee, such Paying Agent shall be released from all further liability with
respect to such money.
Subject to applicable laws with respect to escheat of funds, any
money held by the Indenture Trustee or any Paying Agent in trust for the
payment of any amount due with respect to any Note and remaining unclaimed for
two years after such amount has become due and payable shall be discharged
from such trust and be paid to the Issuer on Issuer Request; and the
Noteholder thereof shall thereafter, as an unsecured general creditor, look
only to the Issuer for payment thereof (but only to the extent of the amounts
so paid to the Issuer), and all liability of the Indenture Trustee or such
Paying Agent with respect to such trust money shall thereupon cease; provided,
however, that the Indenture Trustee or such Paying Agent, before being
required to make any such repayment, shall at the expense and direction of the
Issuer cause to be published once, in a newspaper published in the English
language, customarily published on each Business Day and of general
circulation in The City of New York, notice that such money remains unclaimed
and that, after a date specified therein, which shall not be less than 30 days
from the date of such publication, any unclaimed balance of such money then
remaining will be repaid to the Issuer. The Indenture Trustee shall also adopt
and employ, at the expense of the Issuer, any other reasonable means of
notification of such repayment (including mailing notice of such repayment to
Noteholders whose Notes have been called but have not been surrendered for
redemption or whose right to or interest in moneys due and payable but not
claimed is determinable from the records of the Indenture Trustee or of any
Paying Agent, at the last address of record for each such Noteholder).
SECTION 3.4. Existence. The Issuer will keep in full effect its
existence, rights and franchises as a trust under the laws of the State of
Delaware (unless it becomes, or any successor Issuer hereunder is or becomes,
organized under the laws of any other State or of the United States of
America, in which case the Issuer will keep in full effect its existence,
rights and franchises under the laws of such other jurisdiction) and will
obtain and preserve its qualification to do business in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes, the Collateral and each other
instrument or agreement included in the Indenture Trust Estate.
SECTION 3.5. Protection of Indenture Trust Estate. The Issuer will
from time to time execute and deliver all such supplements and amendments
hereto and all such financing statements, continuation statements, instruments
of further assurance and other instruments, and will take such other action
necessary or advisable to:
(i) maintain or preserve the lien and security interest (and
the priority thereof) of this Indenture or carry out more
effectively the purposes hereof;
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(ii) perfect, publish notice of or protect the validity of any
Grant made or to be made by this Indenture;
(iii) enforce any of the Collateral; or
(iv) preserve and defend title to the Indenture Trust Estate
and the rights of the Indenture Trustee and the Noteholders in such
Indenture Trust Estate against the claims of all persons and
parties. It shall be the responsibility of the Issuer to prepare
such instruments.
The Issuer hereby designates the Indenture Trustee its agent and
attorney-in-fact to execute any financing statement, continuation statement or
other instrument required to be executed pursuant to this Section.
SECTION 3.6. Opinions as to Indenture Trust Estate. (a) On the
Closing Date, the Issuer shall furnish to the Indenture Trustee an Opinion of
Counsel either stating that, in the opinion of such counsel, such action has
been taken with respect to the recording and filing of this Indenture, any
indentures supplemental hereto, and any other requisite documents, and with
respect to the execution and filing of any financing statements and
continuation statements, as are necessary to perfect and make effective the
lien and security interest of this Indenture and reciting the details of such
action, or stating that, in the opinion of such counsel, no such action is
necessary to make such lien and security interest effective.
(b) On or before [ ] in each calendar year, beginning in [ ], the
Issuer shall furnish to the Indenture Trustee an Opinion of Counsel either
stating that, in the opinion of such counsel, such action has been taken with
respect to the recording, filing, re-recording and refiling of this Indenture,
any indentures supplemental hereto 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 indentures supplemental hereto and any other requisite documents and the
execution and filing of any financing statements and continuation statements
that will, in the opinion of such counsel, be required to maintain the lien
and security interest of this Indenture until [ ] in the following calendar
year.
SECTION 3.7. Performance of Obligations; Servicing of Student Loans.
(a) The Issuer will not take any action and will use its best efforts not to
permit any action to be taken by others that would release any Person from any
of such Person's material covenants or obligations under any instrument or
agreement included in the Indenture Trust Estate or that would result in the
amendment, hypothecation, subordination, termination or discharge of, or
impair the validity or effectiveness of, any such instrument or agreement,
except as expressly provided in this Indenture, the Loan Sale Agreement, the
Servicing Agreement or such other instrument or agreement.
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(b) The Issuer may contract with other Persons to assist it in
performing its duties under this Indenture, and any performance of such duties
by a Person identified to the Indenture Trustee in an Officers' Certificate of
the Issuer shall be deemed to be action taken by the Issuer. Initially, the
Issuer has contracted with the Servicer and the Administrator to assist the
Issuer in performing its duties under this Indenture.
(c) The Issuer will punctually perform and observe all its
obligations and agreements contained in this Indenture, the other Basic
Documents and in the instruments and agreements included in the Indenture
Trust Estate, including filing or causing to be filed all UCC financing
statements and continuation statements required to be filed by the terms of
this Indenture, the Loan Sale Agreement and the Servicing Agreement in
accordance with and within the time periods provided for herein and therein.
Except as otherwise expressly provided therein, the Issuer shall not waive,
amend, modify, supplement or terminate any Basic Document or any provision
thereof without the consent of the Indenture Trustee or the Noteholders of at
least a majority of the Outstanding Amount of the Notes.
(d) If the Issuer shall have knowledge of the occurrence of a
Servicer Default under the Servicing Agreement, or an Administrator Default
under the Administration Agreement, the Issuer shall promptly notify the
Indenture Trustee and the Rating Agencies thereof, and shall specify in such
notice the action, if any, the Issuer is taking with respect to such default.
If a Servicer Default shall arise from the failure of the Servicer to perform
any of its duties or obligations under the Servicing Agreement with respect to
the Student Loans, the Issuer shall take all reasonable steps available to it
to enforce its rights under the Basic Documents in respect of such failure.
(e) As promptly as possible after the giving of notice of termination
to the Servicer of the Servicer's rights and powers pursuant to Section 6.1 of
the Servicing Agreement, the Issuer shall appoint a successor servicer (the
"Successor Servicer"), and such Successor Servicer shall accept its
appointment by a written assumption in a form acceptable to the Indenture
Trustee. In the event that a Successor Servicer has not been appointed and
accepted its appointment at the time when the Servicer ceases to act as
Servicer, the Indenture Trustee without further action shall automatically be
appointed the Successor Servicer. The Indenture Trustee may resign as the
Servicer by giving written notice of such resignation to the Issuer and in
such event will be released from such duties and obligations, such release not
to be effective until the date a new servicer enters into an agreement with
the Issuer as provided below; provided, however, that nothing herein shall
require or permit the Indenture Trustee to act as Servicer, or otherwise
service the Student Loans, in violation of the Higher Education Act. Upon
delivery of any such notice to the Issuer, the Issuer shall obtain a new
servicer as the Successor Servicer under the Servicing Agreement. Any
Successor Servicer other than the Indenture Trustee shall (i) be an
established institution (A) that satisfies any requirements of the Higher
Education Act applicable to servicers, (B) the appointment of which satisfies
the Rating Agency Condition and (C) whose regular business includes the
servicing or administration of student loans and (ii) enter into a servicing
agreement with the Issuer having substantially the same provisions as the
provisions of the Servicing Agreement applicable to the Servicer. If within 30
days after the delivery of the notice referred to above, the Issuer
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shall not have obtained such a new servicer, the Indenture Trustee may appoint
or may petition a court of competent jurisdiction to appoint, a Successor
Servicer; provided, however, that such right to appoint or to petition for the
appointment of any such successor shall in no event relieve the Indenture
Trustee from any obligations otherwise imposed on it under the Basic Documents
until such successor has in fact assumed such appointment. In connection with
any such appointment, the Indenture Trustee may make such arrangements for the
compensation of such successor as it and such successor shall agree, subject
to the limitations set forth below and in the Servicing Agreement, and in
accordance with Section 6.2 of the Servicing Agreement, the Issuer shall enter
into an agreement with such successor for the servicing of the Student Loans
(such agreement to be in form and substance satisfactory to the Indenture
Trustee). If the Indenture Trustee shall succeed as provided herein to the
Servicer's duties as servicer with respect to the Student Loans, it shall do
so in its individual capacity and not in its capacity as Indenture Trustee
and, accordingly, the provisions of Article VI hereof shall be inapplicable to
the Indenture Trustee in its duties as the successor to the Servicer and the
servicing of the Student Loans. In case the Indenture Trustee shall become
successor to the Servicer under the Servicing Agreement, the Indenture Trustee
shall be entitled to appoint as Servicer any one of its affiliates, provided
that such appointment shall not affect or alter in any way the liability of
the Indenture Trustee as a successor for the performance of the duties and
obligations of the Servicer in accordance with the terms hereof.
(f) Upon any termination of the Servicer's rights and powers pursuant
to the Servicing Agreement, the Issuer shall promptly notify the Indenture
Trustee. As soon as a Successor Servicer is appointed, the Issuer shall notify
the Indenture Trustee of such appointment, specifying in such notice the name
and address of such Successor Servicer.
(g) Without derogating from the absolute nature of the assignment
granted to the Indenture Trustee under this Indenture or the rights of the
Indenture Trustee hereunder, the Issuer agrees that it will not, without the
prior written consent of the Indenture Trustee or the Noteholders of at least
a majority in Outstanding Amount of the Notes, amend, modify, waive,
supplement, terminate or surrender, or agree to any amendment, modification,
supplement, termination, waiver or surrender of, the terms of any Collateral
or the Basic Documents, except to the extent otherwise provided in the
Servicing Agreement, or waive timely performance or observance by the
Servicer, the Depositor, the Issuer, the Administrator or the Trustee under
the Loan Sale Agreement, the Servicing Agreement or the Administration
Agreement; provided, however, that no such amendment shall (i) increase or
reduce in any manner the amount of, or accelerate or delay the timing of,
distributions that are required to be made for the benefit of the Noteholders,
or (ii) reduce the aforesaid percentage of the Notes which are required to
consent to any such amendment, without the consent of the Noteholders of all
the Outstanding Notes. If any such amendment, modification, supplement or
waiver shall be so consented to by the Indenture Trustee or such Noteholders,
the Issuer agrees, promptly following a request by the Indenture Trustee to do
so, to execute and deliver, in its own name and at its own expense, such
agreements, instruments, consents and other documents as the Indenture Trustee
may deem necessary or appropriate in the circumstances.
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SECTION 3.8. Negative Covenants. So long as any Notes are
Outstanding, the Issuer shall not:
(i) except as expressly permitted by this Indenture or any
other Basic Document, sell, transfer, exchange or otherwise dispose
of any of the properties or assets of the Issuer, including those
included in the Indenture Trust Estate, unless directed to do so by
the Indenture Trustee (which direction the Indenture Trustee shall
not give without the consent of each of the Rating Agencies);
(ii) claim any credit on, or make any deduction from the
principal or interest (including any Noteholders' Interest T-▇▇▇▇
Carryover) payable in respect of, the Notes (other than amounts
properly withheld from such payments under the Code or applicable
state law) or assert any claim against any present or former
Noteholder by reason of the payment of the taxes levied or assessed
upon any part of the Indenture Trust Estate; or
(iii) (A) permit the validity or effectiveness of this
Indenture to be impaired, or permit the lien of this Indenture to be
amended, hypothecated, subordinated, terminated or discharged, or
permit any Person to be released from any covenants or obligations
with respect to the Notes under this Indenture except as may be
expressly permitted hereby, (B) permit any lien, charge, excise,
claim, security interest, mortgage or other encumbrance (other than
the lien of this Indenture) to be created on or extend to or
otherwise arise upon or burden the Indenture Trust Estate or any
part thereof or any interest therein or the proceeds thereof (other
than tax liens and other liens that arise by operation of law, in
each case arising solely as a result of an action or omission of the
related Obligor, and other than as expressly permitted by the Basic
Documents) or (C) permit the lien of this Indenture not to
constitute a valid first priority (other than with respect to any
such tax or other lien) security interest in the Indenture Trust
Estate.
SECTION 3.9. Annual Statement as to Compliance. The Issuer will
deliver to the Indenture Trustee, within 120 days after the end of each fiscal
year of the Issuer (commencing with the fiscal year 199[8]), an Officers'
Certificate of the Issuer stating that:
(i) a review of the activities of the Issuer during such year
and of performance under this Indenture has been made under such
Authorized Officers' supervision; and
(ii) to the best of such Authorized Officers' knowledge, based
on such review, the Issuer has complied with all conditions and
covenants under this Indenture throughout such year, or, if there
has been a default in the compliance of any such condition or
covenant, specifying each such default known to such Authorized
Officers and the nature and status thereof.
SECTION 3.10. Issuer May Consolidate, etc., Only on Certain Terms.
(a) The Issuer shall not consolidate or merge with or into any other Person,
unless:
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(i) The Person (if other than the Issuer) formed by or
surviving such consolidation or merger shall be a Person organized
and existing under the laws of the United States of America or any
State and shall expressly assume, by an indenture supplemental
hereto, executed and delivered to the Indenture Trustee, in form
satisfactory to the Indenture Trustee, the due and punctual payment
of the principal of, interest on and any Noteholders' Interest
T-▇▇▇▇ Carryover, if any, with respect to all Notes and the
performance or observance of every agreement and covenant of this
Indenture on the part of the Issuer to be performed or observed, all
as provided herein;
(ii) immediately after giving effect to such transaction, no
Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied
with respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel (and
shall have delivered copies thereof to the Indenture Trustee) to the
effect that such transaction will not have any material adverse tax
consequence to the Issuer or any Noteholder;
(v) any action as is necessary to maintain the lien and
security interest created by this Indenture shall have been taken;
and
(vi) the Issuer shall have delivered to the Indenture Trustee
an Officers' Certificate of the Issuer and an Opinion of Counsel
each stating that such consolidation or merger and such supplemental
indenture comply with this Article III and that all conditions
precedent herein provided for relating to such transaction have been
complied with (including any filing required by the Exchange Act).
(b) The Issuer shall not convey or transfer all or substantially all
its properties or assets, including those included in the Indenture Trust
Estate, to any Person, unless:
(i) the Person that acquires by conveyance or transfer the
properties and assets of the Issuer the conveyance or transfer of
which is hereby restricted shall (A) be a United States citizen or a
Person organized and existing under the laws of the United States of
America or any State, (B) expressly assumes, by an indenture
supplemental hereto, executed and delivered to the Indenture
Trustee, in form satisfactory to the Indenture Trustee, the due and
punctual payment of the principal of, interest on and Noteholders'
Interest T-▇▇▇▇ Carryover, if any, with respect to all Notes and the
performance or observance of every agreement and covenant of this
Indenture on the part of the Issuer to be performed or observed, all
as provided herein, (C) expressly agrees by means of such
supplemental indenture that all right, title and interest so
conveyed or transferred shall be subject and subordinate to the
rights of Noteholders, (D) unless otherwise provided in such
supplemental indenture, expressly agrees to indemnify, defend and
hold harmless the Issuer against and from any loss,
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liability or expense arising under or related to this Indenture and
the Notes and (E) expressly agrees by means of such supplemental
indenture that such Person (or if a group of Persons, then one
specified Person) shall make all filings with the Commission (and
any other appropriate Person) required by the Exchange Act in
connection with the Notes;
(ii) immediately after giving effect to such transaction, no
Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied
with respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel (and
shall have delivered copies thereof to the Indenture Trustee) to the
effect that such transaction will not have any material adverse tax
consequence to the Issuer or any Noteholder;
(v) any action as is necessary to maintain the lien and
security interest created by this Indenture shall have been taken;
and
(vi) the Issuer shall have delivered to the Indenture Trustee
an Officers' Certificate of the Issuer and an Opinion of Counsel
each stating that such conveyance or transfer and such supplemental
indenture comply with this Article III and that all conditions
precedent herein provided for relating to such transaction have been
complied with (including any filing required by the Exchange Act).
SECTION 3.11. Successor or Transferee. (a) Upon any consolidation or
merger of the Issuer in accordance with Section 3.10(a), the Person formed by
or surviving such consolidation or merger (if other than the Issuer) shall
succeed to, and be substituted for, and may exercise every right and power of,
the Issuer under this Indenture with the same effect as if such Person had
been named as the Issuer herein.
(b) Upon a conveyance or transfer of all the assets and properties of
the Issuer pursuant to Section 3.10(b), EFG Student Loan Trust 1999-[ ] will be
released from every covenant and agreement of this Indenture to be observed or
performed on the part of the Issuer with respect to the Notes immediately upon
the delivery by the Issuer of written notice to the Indenture Trustee stating
that EFG Student Loan Trust 1999-[ ] is to be so released.
SECTION 3.12. No Other Business. The Issuer shall not engage in any
business other than financing, purchasing, owning, selling and managing the
Student Loans, {and originating Consolidation Loans during the Revolving
Period,} in the manner contemplated by this Indenture and the other Basic
Documents and activities incidental thereto.
SECTION 3.13. No Borrowing. The Issuer shall not issue, incur,
assume, guarantee or otherwise become liable, directly or indirectly, for any
indebtedness except for the Notes.
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SECTION 3.14 Oblications of Servicer and Administrator. The Issuer
shall cause the Servicer to comply with Sections 3.7, 3.8, 3.9 and 3.10 of the
Servicing Agreement and shall cause the Administrator to comply with Section
2(g) of the Administration Agreement.
SECTION 3.15. Guarantees, Loans, Advances and Other Liabilities.
Except as contemplated by the Basic Documents or this Indenture, the Issuer
shall not make any loan or advance or credit to, or guarantee (directly or
indirectly or by an instrument having the effect of assuring another's payment
or performance on any obligation or capability of so doing or otherwise),
endorse or otherwise become contingently liable, directly or indirectly, in
connection with the obligations, stocks or dividends of, or own, purchase,
repurchase or acquire (or agree contingently to do so) any stock, obligations,
assets or securities of, or any other interest in, or make any capital
contribution to, any other Person.
SECTION 3.16. Capital Expenditures. The Issuer shall not make any
expenditure (by long-term or operating lease or otherwise) for capital assets
(either realty or personalty).
SECTION 3.17. Restricted Payments. The Issuer shall not, directly or
indirectly, (i) pay any dividend or make any distribution (by reduction of
capital or otherwise), whether in cash, property, securities or a combination
thereof, to the Trustee or any owner of a beneficial interest in the Issuer or
otherwise with respect to any ownership or equity interest or security in or
of the Issuer or to the Servicer or the Administrator, (ii) redeem, purchase,
retire or otherwise acquire for value any such ownership or equity interest or
security or (iii) set aside or otherwise segregate any amounts for any such
purpose; provided, however, that the Issuer may make, or cause to be made,
distributions to the Servicer, the Trustee, the Indenture Trustee, the
Noteholders, the Administrator, the Depositor and the Owner as contemplated
by, and to the extent funds are available for such purpose under, the Loan
Sale Agreement, the Servicing Agreement or the Administration Agreement. The
Issuer will not, directly or indirectly, make payments to or distributions
from the Collection Account or the Collateral Reinvestment Account except in
accordance with this Indenture and the other Basic Documents.
SECTION 3.18. Notice of Events of Default. The Issuer shall give the
Indenture Trustee and the Rating Agencies prompt written notice of each Event
of Default hereunder and each default on the part of the Seller, the
Depositor, the Servicer or the Administrator of its obligations under the Loan
Sale Agreement, the Transfer Agreement, the Servicing Agreement or the
Administration Agreement. In addition, the Issuer shall deliver to the
Indenture Trustee, within five days after the occurrence thereof, written
notice in the form of an Officers' Certificate of the Issuer of any event
which with the giving of notice and the lapse of time would become an Event of
Default under Section 5.1(iii), its status and what action the Issuer is
taking or proposes to take with respect thereto. The Indenture Trustee shall
provide notice to the Noteholders of each default or other event of which it
receives notice pursuant to this Section 3.18, promptly after receipt of such
Notice.
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SECTION 3.19. Further Instruments and Acts. Upon request of the
Indenture Trustee, the Issuer will execute and deliver such further
instruments and do such further acts as may be reasonably necessary or proper
to carry out more effectively the purpose of this Indenture.
SECTION 3.20. Removal of Administrator. So long as any Notes are
Outstanding, the Issuer shall not remove the Administrator without cause
unless the Rating Agency Condition shall have been satisfied in connection
with such removal.
ARTICLE IV.
Satisfaction and Discharge
--------------------------
SECTION 4.1. Satisfaction and Discharge of Indenture. This Indenture
shall cease to be of further effect with respect to the Notes except as to (i)
rights of registration of transfer and exchange, (ii) substitution of
mutilated, destroyed, lost or stolen Notes, (iii) rights of Noteholders to
receive payments of principal thereof and interest (including any Noteholders'
Interest T-▇▇▇▇ Carryover) thereon, (iv) Sections 3.3, 3.4, 3.5, 3.8, 3.10,
3.12 and 3.13, (v) the rights, obligations and immunities of the Indenture
Trustee hereunder (including the rights of the Indenture Trustee under Section
6.7 and the obligations of the Indenture Trustee under Section 4.2) and (vi)
the rights of Noteholders as beneficiaries hereof with respect to the property
so deposited with the Indenture Trustee payable to all or any of them, and the
Indenture Trustee, on demand of and at the expense of the Issuer, shall
execute proper instruments acknowledging satisfaction and discharge of this
Indenture with respect to the Notes, when:
(A) either
(1) all Notes theretofore authenticated and delivered (other
than (i) Notes that have been destroyed, lost or stolen and that have
been replaced or paid as provided in Section 2.5 and (ii) Notes for
whose payment money has theretofore been deposited in trust or
segregated and held in trust by the Issuer and thereafter repaid to
the Issuer or discharged from such trust, as provided in Section 3.3)
have been delivered to the Indenture Trustee for cancellation; or
(2) all Notes not theretofore delivered to the Indenture
Trustee for cancellation
(i) have become due and payable,
(ii) will become due and payable at the Senior Note
Final Maturity Date or the Subordinate Note Final Maturity
Date, as the case may be, within one year, or
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(iii) are to be called for redemption within one
year under arrangements satisfactory to the Indenture
Trustee for the giving of notice of redemption by the
Indenture Trustee in the name, and at the expense, of the
Issuer,
and the Issuer, in the case of (i), (ii) or (iii) above, has
irrevocably deposited or caused to be irrevocably deposited with the
Indenture Trustee cash or direct obligations of or obligations
guaranteed by the United States of America (which will mature prior
to the date such amounts are payable), in trust for such purpose, in
an amount sufficient to pay and discharge the entire indebtedness on
such Notes not theretofore delivered to the Indenture Trustee for
cancellation as of such day of discharge or when due on the Senior
Note Final Maturity Date or the Subordinate Note Final Maturity Date,
as the case may be;
(B) the Issuer has paid or caused to be paid all other sums
payable hereunder by the Issuer; and
(C) the Issuer has delivered to the Indenture Trustee an
Officers' Certificate of the Issuer, an Opinion of Counsel and (if
required by the TIA or the Indenture Trustee) an Independent
Certificate from a firm of certified public accountants, each meeting
the applicable requirements of Section 11.1(a) and, subject to
Section 11.2, each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this
Indenture have been complied with.
SECTION 4.2. Application of Trust Money. All moneys deposited with the
Indenture Trustee pursuant to Section 4.1 hereof shall be held in trust and
applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent, as the
Indenture Trustee may determine, to the Noteholders of the particular Notes
for the payment or redemption of which such moneys have been deposited with
the Indenture Trustee, of all sums due and to become due thereon for principal
and interest (including any Noteholders' Interest T-▇▇▇▇ Carryover); but such
moneys need not be segregated from other funds except to the extent required
herein, in the Servicing Agreement or the Administration Agreement or required
by law.
SECTION 4.3. Repayment of Money Held by Paying Agent. In connection
with the satisfaction and discharge of this Indenture with respect to the
Notes, all moneys then held by any Paying Agent other than the Indenture
Trustee under the provisions of this Indenture with respect to such Notes
shall, upon demand of the Issuer, be paid to the Indenture Trustee to be held
and applied according to Section 3.3 and thereupon such Paying Agent shall be
released from all further liability with respect to such moneys.
SECTION 4.4 Auction of Student Loans. The Indenture Trustee shall
offer the Student Loans for sale as of the last day of the Collection Period
that ends in [ ] and shall accept bids on behalf of the Issuer for such
purpose. If with respect to the last date of such Collection Period, the
Indenture Trustee receives no bid to purchase the Student Loans, or no bid
that it may, as specified below, accept, the Indenture Trustee may at its
discretion,
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but shall not be obligated to, offer the Student Loans for sale as of the last
day of each, or any, of the succeeding Collection Periods until a bid is
received that may, as specified below, be accepted by the Indenture Trustee.
With respect to any attempt to arrange for the purchase of the Student Loans,
the Indenture Trustee shall accept the highest bid submitted so long as (i) at
least two bids to purchase the Student Loans as of the last day of the
applicable Collection Period are received and (ii) the highest such bid is at
least equal to the Minimum Purchase Price as of the last day of the applicable
Collection Period. Any attempt to arrange for the purchase of the Student
Loans and the consummation of any such sale shall be conducted by the
Indenture Trustee in a commercially reasonable manner. The Indenture Trustee
shall provide notice of any such attempt at least 60 days prior to the last
day of the related Collection Period to the Depositor, the Owner, the
Servicer, the Trustee, the Rating Agencies, and each Noteholder, and any such
Person or their respective Affiliates or any other Person may submit a timely
bid for the purchase of the Student Loans.
ARTICLE V.
Remedies
--------
SECTION 5.1. Events of Default. "Event of Default", wherever used
herein, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of
any court or any order, rule or regulation of any administrative or
governmental body):
(i) default in the payment of any interest (including,
subject to the limitations of Sections 2.7(d) and 8.2, any
Noteholders' Interest T-▇▇▇▇ Carryover) on any Note when the same
becomes due and payable, and such default shall continue for a period
of five days; or
(ii) default in the payment of the principal of any Note
when the same becomes due and payable; or
(iii) default in the observance or performance of any
covenant or agreement of the Issuer made in this Indenture (other
than a covenant or agreement, a default in the observance or
performance of which is elsewhere in this Section specifically dealt
with), or any representation or warranty of the Issuer made in this
Indenture or in any certificate or other writing delivered pursuant
hereto or in connection herewith proving to have been incorrect in
any material respect as of the time when the same shall have been
made, and such default shall continue or not be cured, or the
circumstance or condition in respect of which such misrepresentation
or warranty was incorrect shall not have been eliminated or otherwise
cured, for a period of 30 (or, in the circumstances provided below,
90) days after there shall have been given, by registered or
certified mail, to the Issuer by the Indenture Trustee or to the
Issuer and the Indenture Trustee by the Noteholders of at least 25%
of the Outstanding Amount of the Notes, a written notice specifying
such default or incorrect
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representation or warranty and requiring it to be remedied and
stating that such notice is a notice of Default hereunder; provided,
that, if at the end of such thirty day period, the Indenture Trustee
determines that a good faith effort to cure or eliminate the Default
has commenced, the Indenture Trustee may extend such 30-day period to
90 days; or
(iv) the filing of a decree or order for relief by a court
having jurisdiction in the premises in respect of the Issuer or any
substantial part of the Indenture Trust Estate in an involuntary case
under any applicable Federal or state bankruptcy, insolvency or other
similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar
official of the Issuer or for any substantial part of the Indenture
Trust Estate, or ordering the winding-up or liquidation of the
Issuer's affairs, and such decree or order shall remain unstayed and
in effect for a period of 60 consecutive days; or
(v) the commencement by the Issuer of a voluntary case under
any applicable Federal or state bankruptcy, insolvency or other
similar law now or hereafter in effect, or the consent by the Issuer
to the entry of an order for relief in an involuntary case under any
such law, or the consent by the Issuer to the appointment or taking
possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Issuer or for any substantial
part of the Indenture Trust Estate, or the making by the Issuer of
any general assignment for the benefit of creditors, or the failure
by the Issuer generally to pay its debts as such debts become due, or
the taking of action by the Issuer in furtherance of any of the
foregoing.
SECTION 5.2. Acceleration of Maturity; Rescission and Annulment. If
an Event of Default should occur and be continuing, then and in every such
case the Indenture Trustee or the Noteholders of Notes representing not less
than a majority of the Outstanding Amount of the Notes may declare all the
Notes to be immediately due and payable, by a notice in writing to the Issuer
(and to the Indenture Trustee if given by Noteholders), and upon any such
declaration the unpaid principal amount of such Notes, together with accrued
and unpaid interest thereon through the date of acceleration, shall become
immediately due and payable.
At any time after such declaration of acceleration of maturity has
been made and before a judgment or decree for payment of the money due has
been obtained by the Indenture Trustee as hereinafter in this Article V
provided, the Noteholders of Notes representing a majority of the Outstanding
Amount of the Notes, by written notice to the Issuer and the Indenture
Trustee, may rescind and annul such declaration and its consequences if:
(i) the Issuer has paid or deposited with the Indenture
Trustee a sum sufficient to pay:
(A) all payments of principal of and interest on all Notes
and all other amounts that would then be due hereunder or upon such
Notes if the Event of Default giving rise to such acceleration had
not occurred; and
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(B) all sums paid or advanced by the Indenture Trustee
hereunder and the reasonable compensation, expenses, disbursements
and advances of the Indenture Trustee and its agents and counsel; and
(ii) all Events of Default, other than the nonpayment of the
principal of the Notes that has become due solely by such
acceleration, have been cured or waived as provided in Section 5.12.
No such rescission shall affect any subsequent default or impair any
right consequent thereto.
SECTION 5.3. Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee. (a) The Issuer covenants that if (i) default is made in the
payment of any interest (including, subject to the limitations of Sections
2.7(d) and 8.2, any Noteholders' Interest T-▇▇▇▇ Carryover) on any Note when
the same becomes due and payable, and such default continues for a period of
five days, or (ii) default is made in the payment of the principal of or any
installment of the principal of any Note when the same becomes due and
payable, the Issuer will, upon demand of the Indenture Trustee, pay to it, for
the benefit of the Noteholders, the whole amount then due and payable on such
Notes for principal and interest (and any Noteholders' Interest T-▇▇▇▇
Carryover), with interest upon the overdue principal, and, to the extent
payment at such rate of interest shall be legally enforceable, upon overdue
installments of interest (and any Noteholders' Interest T-▇▇▇▇ Carryover), at
the rate specified in Section 2.7 and in addition thereto such further amount
as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Indenture Trustee and its agents and counsel.
(b) In case the Issuer shall fail forthwith to pay such amounts upon
such demand, the Indenture Trustee, in its own name and as trustee of an
express trust, may institute a Proceeding for the collection of the sums so
due and unpaid, and may prosecute such Proceeding to judgment or final decree,
and may enforce the same against the Issuer or other obligor upon such Notes
and collect in the manner provided by law out of the property of the Issuer or
other obligor upon such Notes, wherever situated, the moneys adjudged or
decreed to be payable.
(c) If an Event of Default occurs and is continuing, the Indenture
Trustee may, as more particularly provided in Section 5.4, in its discretion,
proceed to protect and enforce its rights and the rights of the Noteholders,
by such appropriate Proceedings as the Indenture Trustee shall deem most
effective to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy or
legal or equitable right vested in the Indenture Trustee by this Indenture or
by law.
(d) In case there shall be pending, relative to the Issuer or any
other obligor upon the Notes or any Person having or claiming an ownership
interest in the Indenture Trust Estate, Proceedings under Title 11 of the
United States Code or any other applicable Federal or state bankruptcy,
insolvency or other similar law, or in case a receiver, assignee or trustee
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in bankruptcy or reorganization, liquidator, sequestrator or similar official
shall have been appointed for or taken possession of the Issuer or its
property or such other obligor or Person, or in case of any other comparable
judicial Proceedings relative to the Issuer or other obligor upon the Notes,
or to the creditors or property of the Issuer or such other obligor, the
Indenture Trustee, irrespective of whether the principal of any Notes shall
then be due and payable as therein expressed or by declaration or otherwise
and irrespective of whether the Indenture Trustee shall have made any demand
pursuant to the provisions of this Section, shall be entitled and empowered,
by intervention in such proceedings or otherwise:
(i) to file and prove a claim or claims for the whole amount
of principal and interest (including any Noteholders' Interest T-▇▇▇▇
Carryover) owing and unpaid in respect of the Notes and to file such
other papers or documents as may be necessary or advisable in order
to have the claims of the Indenture Trustee (including any claim for
reasonable compensation to the Indenture Trustee and each predecessor
Indenture Trustee, and their respective agents, attorneys and
counsel, and for reimbursement of all expenses and liabilities
incurred, and all advances made, by the Indenture Trustee and each
predecessor Indenture Trustee, except as a result of negligence or
bad faith) and of the Noteholders allowed in such Proceedings;
(ii) unless prohibited by applicable law and regulations, to
vote on behalf of the Noteholders in any election of a trustee, a
standby trustee or Person performing similar functions in any such
Proceedings;
(iii) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute all
amounts received with respect to the claims of the Noteholders and of
the Indenture Trustee on their behalf; and
(iv) to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the
claims of the Indenture Trustee or the Noteholders allowed in any
judicial proceedings relative to the Issuer, its creditors and its
property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by each of such Noteholders to make
payments to the Indenture Trustee, and, in the event that the Indenture
Trustee shall consent to the making of payments directly to such Noteholders,
to pay to the Indenture Trustee such amounts as shall be sufficient to cover
reasonable compensation to the Indenture Trustee, each predecessor Indenture
Trustee and their respective agents, attorneys and counsel, and all other
expenses and liabilities incurred, and all advances made, by the Indenture
Trustee and each predecessor Indenture Trustee except as a result of
negligence or bad faith.
(e) Nothing herein contained shall be deemed to authorize the
Indenture Trustee to authorize or consent to or vote for or accept or adopt on
behalf of any Noteholder any plan of reorganization, arrangement, adjustment
or composition affecting the Notes or the rights of any Noteholder thereof or
to authorize the Indenture Trustee to vote in respect of the
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claim of any Noteholder in any such proceeding except, as aforesaid, to vote
for the election of a trustee in bankruptcy or similar Person.
(f) All rights of action and of asserting claims under this
Indenture, or under any of the Notes, may be enforced by the Indenture Trustee
without the possession of any of the Notes or the production thereof in any
trial or other Proceedings relative thereto, and any such action or
Proceedings instituted by the Indenture Trustee shall be brought in its own
name as trustee of an express trust, and any recovery of judgment, subject to
the payment of the expenses, disbursements and compensation of the Indenture
Trustee, each predecessor Indenture Trustee and their respective agents and
attorneys, shall be for the ratable benefit of the Noteholders.
(g) In any Proceedings brought by the Indenture Trustee (and also any
Proceedings involving the interpretation of any provision of this Indenture to
which the Indenture Trustee shall be a party), the Indenture Trustee shall be
held to represent all the Noteholders, and it shall not be necessary to make
any Noteholder a party to any such Proceedings.
SECTION 5.4. Remedies; Priorities. (a) If an Event of Default shall
have occurred and be continuing, the Indenture Trustee may do one or more of
the following (subject to Section 5.5):
(i) institute Proceedings in its own name and as trustee of
an express trust for the collection of all amounts then payable on
the Notes or under this Indenture with respect thereto, whether by
declaration or otherwise, enforce any judgment obtained, and collect
from the Issuer and any other obligor upon such Notes moneys adjudged
due;
(ii) institute Proceedings from time to time for the
complete or partial foreclosure of this Indenture with respect to the
Indenture Trust Estate;
(iii) exercise any remedies of a secured party under the UCC
and take any other appropriate action to protect and enforce the
rights and remedies of the Indenture Trustee and the Noteholders; and
(iv) sell the Indenture Trust Estate or any portion thereof
or rights or interest therein, at one or more public or private sales
called and conducted in any manner permitted by law;
provided, however, that the Indenture Trustee may not sell or otherwise
liquidate the Indenture Trust Estate following an Event of Default, other than
an Event of Default described in Section 5.1(i) or (ii), unless (A) the
Noteholders of 100% of the Outstanding Amount of the Notes consent thereto,
(B) the proceeds of such sale or liquidation distributable to the Noteholders
are sufficient to discharge in full all amounts then due and unpaid upon such
Notes for principal and interest or (C) the Indenture Trustee determines that
the Indenture Trust Estate will not continue to provide sufficient funds for
the payment of principal of and interest on the
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Notes as they would have become due if the Notes had not been declared due and
payable, and the Indenture Trustee obtains the consent of Noteholders of
66-2/3% of the Outstanding Amount of the Notes. In determining such
sufficiency or insufficiency with respect to clauses (B) and (C), the
Indenture Trustee may, but need not, obtain and rely upon an opinion of an
Independent investment banking or accounting firm of national reputation as to
the feasibility of such proposed action and as to the sufficiency of the
Indenture Trust Estate for such purpose.
(b) If the Indenture Trustee collects any money or property pursuant
to this Article V, it shall pay out the money or property in the following
order:
FIRST: to the Indenture Trustee for amounts due under
Section 6.7;
SECOND: to the Servicer for due and unpaid Servicing Fees;
THIRD: to Senior Noteholders for amounts due and unpaid on
the Senior Notes for interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Senior Notes for interest;
FOURTH: to Subordinate Noteholders for amounts due and
unpaid on the Subordinate Notes for interest, ratably, without
preference or priority of any kind, according to the amounts due
and payable on the Subordinate Notes for interest;
FIFTH: to Senior Noteholders for amounts due and unpaid on
the Senior Notes for principal, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Senior Notes for principal;
SIXTH: to Subordinate Noteholders for amounts due and unpaid
on the Subordinate Notes for principal, ratably, without preference
or priority of any kind, according to the amounts due and payable on
the Subordinate Notes for principal;
SEVENTH: to Senior Noteholders for any unpaid Senior
Noteholders' Interest T-▇▇▇▇ Carryover, ratably, without preference
or priority of any kind, according to the amounts due and payable on
the Senior Notes for such Senior Noteholders' Interest T-▇▇▇▇
Carryover;
EIGHTH: to Subordinate Noteholders for any unpaid
Subordinate Noteholders' Interest T-▇▇▇▇ Carryover, ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Subordinate Notes for such Subordinate Noteholders'
Interest T-▇▇▇▇ Carryover; and
NINTH: to the Issuer, for distribution in accordance with
the terms of the Administration Agreement.
The Indenture Trustee may fix a record date and payment date for any
payment to Noteholders pursuant to this Section. At least 15 days before such
record date, the Issuer
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shall mail to each Noteholder and the Indenture Trustee a notice that states
the record date, the payment date and the amount to be paid.
SECTION 5.5. Optional Preservation of the Indenture Trust Estate. If
the Notes have been declared to be due and payable under Section 5.2 following
an Event of Default and such declaration and its consequences have not been
rescinded and annulled, the Indenture Trustee may, but need not, elect to
maintain possession of the Indenture Trust Estate. It is the desire of the
parties hereto and the Noteholders that there be at all times sufficient funds
for the payment of principal of and interest (including any Noteholders'
Interest T-▇▇▇▇ Carryover) on the Notes, and the Indenture Trustee shall take
such desire into account when determining whether to maintain possession of
the Indenture Trust Estate. In determining whether to maintain possession of
the Indenture Trust Estate, the Indenture Trustee may, but need not, obtain
and rely upon an opinion (which shall be obtained at the expense of the
Issuer) of an Independent investment banking or accounting firm of national
reputation as to the feasibility of such proposed action and as to the
sufficiency of the Indenture Trust Estate for such purpose.
SECTION 5.6. Limitation of Suits. No Noteholder shall have any right
to institute any Proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless:
(i) such Noteholder has previously given written notice to
the Indenture Trustee of a continuing Event of Default;
(ii) the Noteholders of not less than 25% of the Outstanding
Amount of the Notes have made written request to the Indenture
Trustee to institute such Proceeding in respect of such Event of
Default in its own name as Indenture Trustee hereunder;
(iii) such Noteholder or Noteholders have offered to the
Indenture Trustee reasonable indemnity against the costs, expenses
and liabilities to be incurred in complying with such request;
(iv) the Indenture Trustee for 60 days after its receipt of
such notice, request and offer of indemnity has failed to institute
such Proceeding; and
(v) no direction inconsistent with such written request has
been given to the Indenture Trustee during such 60-day period by the
Noteholders of a majority of the Outstanding Amount of the Notes;
it being understood and intended that no one or more Noteholders shall have
any right in any manner whatever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other Noteholders or to obtain or to seek to obtain priority or preference
over any other Noteholders or to enforce any right under this Indenture,
except in the manner herein provided.
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In the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Noteholders,
each representing less than a majority of the Outstanding Amount of the Notes,
the Indenture Trustee in its sole discretion may determine what action, if
any, shall be taken, notwithstanding any other provisions of this Indenture.
SECTION 5.7. Unconditional Rights of Noteholders To Receive Principal
and Interest. Notwithstanding any other provisions in this Indenture, any
Noteholder shall have the right, which is absolute and unconditional, to
receive payment of the principal of and interest, if any, on such Note on or
after the respective due dates thereof expressed in such Note or in this
Indenture (or, in the case of redemption, on or after the Redemption Date) and
to institute suit for the enforcement of any such payment, and such right
shall not be impaired without the consent of such Noteholder.
SECTION 5.8. Restoration of Rights and Remedies. If the Indenture
Trustee or any Noteholder has instituted any Proceeding to enforce any right
or remedy under this Indenture and such Proceeding has been discontinued or
abandoned for any reason or has been determined adversely to the Indenture
Trustee or to such Noteholder, then and in every such case the Issuer, the
Indenture Trustee and the Noteholders shall, subject to any determination in
such Proceeding, be restored severally and respectively to their former
positions hereunder, and thereafter all rights and remedies of the Indenture
Trustee and the Noteholders shall continue as though no such Proceeding had
been instituted.
SECTION 5.9. Rights and Remedies Cumulative. No right or remedy
herein conferred upon or reserved to the Indenture Trustee or to the
Noteholders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative
and in addition to every other right and remedy given hereunder or now or
hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent
the concurrent assertion or employment of any other appropriate right or
remedy.
SECTION 5.10. Delay or Omission Not a Waiver. No delay or omission of
the Indenture Trustee or any Noteholder to exercise any right or remedy
accruing upon any Default shall impair any such right or remedy or constitute
a waiver of any such Default or an acquiescence therein. Every right and
remedy given by this Article V or by law to the Indenture Trustee or to the
Noteholders may be exercised from time to time, and as often as may be deemed
expedient, by the Indenture Trustee or by the Noteholders, as the case may be.
SECTION 5.11. Control by Noteholders. The Noteholders of a majority
of the Outstanding Amount of the Notes shall have the right to direct the
time, method and place of conducting any Proceeding for any remedy available
to the Indenture Trustee with respect to the Notes or exercising any trust or
power conferred on the Indenture Trustee; provided that
(i) such direction shall not be in conflict with any rule of
law or with this Indenture;
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(ii) subject to the express terms of Section 5.4, any
direction to the Indenture Trustee to sell or liquidate the Indenture
Trust Estate shall be by the Noteholders of 100% of the Outstanding
Amount of the Notes;
(iii) if the conditions set forth in Section 5.5 have been
satisfied and the Indenture Trustee elects to retain the Indenture
Trust Estate pursuant to such Section, then any direction to the
Indenture Trustee by Noteholders of less than 100% of the Outstanding
Amount of the Notes to sell or liquidate the Indenture Trust Estate
shall be of no force and effect; and
(iv) the Indenture Trustee may take any other action deemed
proper by the Indenture Trustee that is not inconsistent with such
direction;
provided, however, that, subject to Section 6.1, the Indenture Trustee need
not take any action that it determines might involve it in liability or might
materially adversely affect the rights of any Noteholders not consenting to
such action.
SECTION 5.12. Waiver of Past Defaults. Prior to the time a judgment
or decree for payment of money due has been obtained as described in Section
5.2, the Noteholders of not less than a majority of the Outstanding Amount of
the Notes may waive any past Default and its consequences except a Default (a)
in payment when due of principal of or interest (including, subject to the
limitations of Sections 2.7(d) and 8.2, any Noteholders' Interest T-▇▇▇▇
Carryover) on any of the Notes or (b) in respect of a covenant or provision
hereof which cannot be modified or amended without the consent of each
Noteholder. In the case of any such waiver, the Issuer, the Indenture Trustee
and the Noteholders shall be restored to their former positions and rights
hereunder, respectively; but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereto.
Upon any such waiver, such Default shall cease to exist and be deemed
to have been cured and not to have occurred for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other Default
or impair any right consequent thereto.
SECTION 5.13. Undertaking for Costs. All parties to this Indenture
agree, and each Noteholder by such Noteholder's acceptance of any Note shall
be deemed to have agreed, that any court may in its discretion require, in any
suit for the enforcement of any right or remedy under this Indenture, or in
any suit against the Indenture Trustee for any action taken, suffered or
omitted by it as Indenture Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may
in its discretion assess reasonable costs, including reasonable attorneys'
fees, against any party litigant in such suit, having due regard to the merits
and good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to (a) any suit instituted by the
Indenture Trustee, (b) any suit instituted by any Noteholder, or group of
Noteholders, in each case holding in the aggregate more than 10% of the
Outstanding Amount of the Notes or (c) any suit instituted by any Noteholder
for the enforcement of the payment of principal of or interest (including any
Noteholders' Interest T-▇▇▇▇ Carryover) on any Note on
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or after the respective due dates expressed in such Note and in this Indenture
(or, in the case of redemption, on or after the Redemption Date).
SECTION 5.14. Waiver of Stay or Extension Laws. The Issuer covenants
(to the extent that it may lawfully do so) that it will not at any time insist
upon, or plead or in any manner whatsoever, claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, that may affect the covenants or the performance of this
Indenture; and the Issuer (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that
it will not hinder, delay or impede the execution of any power herein granted
to the Indenture Trustee, but will suffer and permit the execution of every
such power as though no such law had been enacted.
SECTION 5.15. Action on Notes. The Indenture Trustee's right to seek
and recover judgment on the Notes or under this Indenture shall not be
affected by the seeking, obtaining or application of any other relief under or
with respect to this Indenture. Neither the lien of this Indenture nor any
rights or remedies of the Indenture Trustee or the Noteholders shall be
impaired by the recovery of any judgment by the Indenture Trustee against the
Issuer or by the levy of any execution under such judgment upon any portion of
the Indenture Trust Estate or upon any of the assets of the Issuer. Any money
or property collected by the Indenture Trustee shall be applied in accordance
with Section 5.4(b).
SECTION 5.16. Performance and Enforcement of Certain Obligations. (a)
Promptly following a request from the Indenture Trustee to do so and at the
Administrator's expense, the Issuer shall take all such lawful action as the
Indenture Trustee may request to compel or secure the performance and
observance by the Seller, the Depositor the Servicer and the Administrator, as
applicable, of each of their obligations to the Issuer under or in connection
with the Loan Sale Agreement, the Transfer Agreement, the Servicing Agreement
and the Administration Agreement and to exercise any and all rights, remedies,
powers and privileges lawfully available to the Issuer under or in connection
with the Loan Sale Agreement, the Servicing Agreement and the Administration
Agreement to the extent and in the manner directed by the Indenture Trustee,
including the transmission of notices of default on the part of the Seller,
the Depositor, the Servicer or the Administrator thereunder and the
institution of legal or administrative actions or proceedings to compel or
secure performance by the Seller, the Depositor, the Servicer or the
Administrator of each of their obligations under the Loan Sale Agreement, the
Servicing Agreement or the Administration Agreement.
(b) If an Event of Default has occurred and is continuing, the
Indenture Trustee may, and at the direction (which direction shall be in
writing or by telephone (confirmed in writing promptly thereafter)) of the
Noteholders of 66-2/3% of the Outstanding Amount of the Notes shall, exercise
all rights, remedies, powers, privileges and claims of the Issuer against the
Seller, the Depositor, the Servicer or the Administrator under or in
connection with the Loan Sale Agreement, the Transfer Agreement, the Servicing
Agreement or the Administration Agreement, including the right or power to
take any action to compel or secure performance or observance by the Seller,
the Depositor, the Servicer or the
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Administrator of each of their obligations to the Issuer thereunder and to
give any consent, request, notice, direction, approval, extension or waiver
under the Loan Sale Agreement, the Transfer Agreement, the Servicing Agreement
or the Administration Agreement and any right of the Issuer to take such
action shall be suspended.
ARTICLE VI.
The Indenture Trustee
---------------------
SECTION 6.1. Duties of Indenture Trustee. (a) If an Event of Default
has occurred and is continuing, the Indenture Trustee shall exercise the
rights and powers vested in it by this Indenture and use the same degree of
care and skill in their exercise as a prudent person would exercise or use
under the circumstances in the conduct of such person's own affairs.
(b) Except during the continuance of an Event of
Default:
(i) the Indenture Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture and no
implied covenants or obligations shall be read into this Indenture
against the Indenture Trustee; and
(ii) in the absence of bad faith on its part, the Indenture
Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Indenture Trustee and conforming to the
requirements of this Indenture; provided, however, that the Indenture
Trustee shall examine such certificates and opinions to determine whether
they conform to the requirements of this Indenture.
(c) The Indenture Trustee may not be relieved from liability for its
own negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of
paragraph (b) of this Section;
(ii) the Indenture Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer unless it is proved
that the Indenture Trustee was negligent in ascertaining the pertinent
facts; and
(iii) the Indenture Trustee shall not be liable with respect to
any action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Sections 5.2, 5.11, 5.12 and 5.16.
(d) Every provision of this Indenture that in any way relates to the
Indenture Trustee is subject to paragraphs (a), (b), (c) and (g) of this
Section.
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(e) The Indenture Trustee shall not be liable for interest on any
money received by it except as the Indenture Trustee may agree in writing with
the Issuer.
(f) Money held in trust by the Indenture Trustee need not be
segregated from other funds except to the extent required by law or the terms
of this Indenture or the Servicing Agreement.
(g) No provision of this Indenture shall require the Indenture
Trustee to expend or risk its own funds or otherwise incur financial liability
in the performance of any of its duties hereunder or in the exercise of any of
its rights or powers, if it shall have reasonable grounds to believe that
repayments of such funds or adequate indemnity satisfactory to it against any
loss, liability or expense is not reasonably assured to it.
(h) Except as expressly provided in the Basic Documents, the
Indenture Trustee shall have no obligation to administer, service or collect
the Student Loans or to maintain, monitor or otherwise supervise the
administration, servicing or collection of the Student Loans.
(i) In the event that the Indenture Trustee is the Paying Agent or
the Note Registrar, the rights and protections afforded to the Indenture
Trustee pursuant to this Indenture shall also be afforded to the Indenture
Trustee in its capacity as Paying Agent or Note Registrar.
(j) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Indenture Trustee
shall be subject to the provisions of this Section and to the provisions of
the TIA.
SECTION 6.2. Rights of Indenture Trustee. (a) The
Indenture Trustee may rely on any document believed by it to be
genuine and to have been signed or presented by the proper
Person. The Indenture Trustee need not investigate any fact or
matter stated in such document.
(b) Before the Indenture Trustee acts or refrains from acting in
connection with any matter contemplated by this Indenture or other Basic
Documents, it may require an Officers' Certificate of the Issuer or an Opinion
of Counsel. The Indenture Trustee shall not be liable for any action it takes
or omits to take in good faith in reliance on such Officers' Certificate or
Opinion of Counsel.
(c) The Indenture Trustee may exercise any of the trusts and powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys or a custodian or nominee, and the Indenture Trustee shall
not be responsible for any misconduct or negligence on the part of, or for the
supervision of, any such agent, attorney, custodian or nominee appointed with
due care by it hereunder.
(d) The Indenture Trustee shall not be liable for any action it
takes or omits to take in good faith which it believes to be authorized or
within its rights or powers;
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provided, however, that the Indenture Trustee's conduct does not constitute
willful misconduct, negligence or bad faith.
(e) The Indenture Trustee may consult with counsel, and the advice
or opinion of counsel with respect to legal matters relating to this Indenture
and the other Basic Documents and the Notes shall be full and complete
authorization and protection from liability in respect to any action taken,
omitted or suffered by it hereunder in good faith and in accordance with the
advice or opinion of such counsel.
(f) Subject to clauses (a), (b), (c) and (g) of Section 6.1 hereof,
the Indenture Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any Noteholder pursuant to this Indenture, unless such Noteholder shall have
offered to the Indenture Trustee security or indemnity reasonably satisfactory
to the Indenture Trustee against the costs, expenses and liabilities which
might be incurred by it in compliance with such request or direction.
SECTION 6.3. Individual Rights of Indenture Trustee. The Indenture
Trustee in its individual or any other capacity may become the owner or
pledgee of Notes and may otherwise deal with the Issuer or its Affiliates with
the same rights it would have if it were not Indenture Trustee. Any Paying
Agent, Note Registrar, co-registrar or co-paying agent may do the same with
like rights. However, the Indenture Trustee must comply with Sections 6.11 and
6.12.
SECTION 6.4. Indenture Trustee's Disclaimer. The Indenture Trustee
shall not be responsible for and makes no representation as to the validity or
adequacy of this Indenture or the Notes, it shall not be accountable for the
Issuer's use of the proceeds from the Notes, and it shall not be responsible
for any statement of the Issuer in the Indenture or in any document issued in
connection with the sale of the Notes or in the Notes other than the Indenture
Trustee's certificate of authentication.
SECTION 6.5. Notice of Defaults. If a Default occurs and is
continuing and if it is either actually known or written notice of the
existence thereof has been delivered to a Responsible Officer of the Indenture
Trustee, the Indenture Trustee shall mail notice of the Default to each
Noteholder and to the Rating Agencies promptly after the Indenture Trustee
obtains such knowledge or receives such notice of the Default within 90 days
after it occurs. Except in the case of a Default in payment of principal of or
interest (including any Noteholders' Interest T-▇▇▇▇ Carryover) on any Note
(including payments pursuant to the mandatory redemption provisions of such
Note), the Indenture Trustee may withhold the notice if and so long as a
committee of its Responsible Officers in good faith determines that
withholding the notice is in the interests of Noteholders.
SECTION 6.6. Reports by Indenture Trustee to Noteholders. The Paying
Agent shall deliver to each Noteholder (and to each Person who was a
Noteholder at any time during the applicable calendar year) such information
as may be required to enable such holder to prepare its Federal and state
income tax returns. Within 60 days after each December 31 beginning with the
December 31 following the date of this Indenture, the Indenture Trustee
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shall mail to each Noteholder a brief report as of such December 31 that
complies with TIA 313(a) if required by said section. The Indenture Trustee
shall also comply with TIA 313(b). A copy of each such report required
pursuant to TIA 313(a) or (b) shall, at the time of such transmission to
Noteholders, be filed by the Indenture Trustee with the Commission and with
each securities exchange, if any, upon which the Notes are listed, provided
that the Issuer has previously notified the Indenture Trustee of such listing.
SECTION 6.7. Compensation and Indemnity. The Issuer shall cause the
Administrator to pay to the Indenture Trustee from time to time reasonable
compensation for its services and shall cause the Administrator to reimburse
the Indenture Trustee for all reasonable out-of-pocket expenses incurred or
made by it, including costs of collection, in addition to the compensation for
its services. Such expenses shall include the reasonable compensation and
expenses, disbursements and advances of the Indenture Trustee's agents,
counsel, accountants and experts. The Indenture Trustee's compensation shall
not be limited by any law on compensation of a trustee of an express trust.
The Issuer shall cause the Administrator to indemnify the Indenture Trustee,
its officers, directors, employees and agents against any and all loss,
liability or expense (including attorneys' fees and expenses) incurred by it
in connection with the administration of this trust and the performance of its
duties hereunder and under the other Basic Documents. The Indenture Trustee
shall notify the Issuer and the Administrator promptly of any claim for which
it may seek indemnity. Failure by the Indenture Trustee to so notify the
Issuer and the Administrator shall not relieve the Issuer or the Administrator
of its obligations hereunder and under the other Basic Documents. The Issuer
shall cause the Administrator to defend the claim and the Administrator shall
not be liable for any additional legal fees and expenses of the Indenture
Trustee after it has assumed such defense; provided, however, that, in the
event that there may be a conflict between the positions of the Indenture
Trustee and the Administrator in conducting the defense of such claim, the
Indenture Trustee shall be entitled to separate counsel the fees and expenses
of which shall be paid by the Administrator on behalf of the Issuer. Neither
the Issuer nor the Administrator need reimburse any expense or indemnify
against any loss, liability or expense incurred by the Indenture Trustee
through the Indenture Trustee's own willful misconduct, negligence or bad
faith.
The Issuer's and Administrator's payment obligations to the
Indenture Trustee pursuant to this Section shall survive the discharge of this
Indenture. When the Indenture Trustee incurs expenses after the occurrence of
a Default specified in Section 5.1(iv) or (v) with respect to the Issuer, the
expenses are intended to constitute expenses of administration under Title 11
of the United States Code or any other applicable Federal or state bankruptcy,
insolvency or similar law.
SECTION 6.8. Replacement of Indenture Trustee. No resignation or
removal of the Indenture Trustee and no appointment of a successor Indenture
Trustee shall become effective until the acceptance of appointment by the
successor Indenture Trustee pursuant to this Section 6.8. The Indenture
Trustee may resign at any time by so notifying the Issuer. The Noteholders of
a majority in Outstanding Amount of the Notes may remove the Indenture
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Trustee by so notifying the Indenture Trustee and may appoint a successor
Indenture Trustee. The Issuer shall remove the Indenture Trustee if:
(i) the Indenture Trustee fails to comply with
Section 6.11;
(ii) an Insolvency Event occurs with respect to the Indenture
Trustee;
(iii) a receiver or other public officer takes charge of the
Indenture Trustee or its property; or
(iv) the Indenture Trustee otherwise becomes incapable of
acting.
If the Indenture Trustee resigns or is removed or if a vacancy
exists in the office of Indenture Trustee for any reason (the Indenture
Trustee in such event being referred to herein as the retiring Indenture
Trustee), the Issuer shall promptly appoint a successor Indenture Trustee. A
former Indenture Trustee shall not be liable for any acts or omissions of any
successor Indenture Trustee.
A successor Indenture Trustee shall deliver a written acceptance of
its appointment to the retiring Indenture Trustee and to the Issuer and shall
notify the Rating Agencies in writing of such acceptance. Thereupon the
resignation or removal of the retiring Indenture Trustee shall become
effective, and the successor Indenture Trustee shall have all the rights,
powers and duties of the Indenture Trustee under this Indenture. The successor
Indenture Trustee shall mail a notice of its succession to Noteholders. The
retiring Indenture Trustee shall promptly transfer all property held by it as
Indenture Trustee to the successor Indenture Trustee.
If a successor Indenture Trustee does not take office within 60 days
after the retiring Indenture Trustee resigns or is removed, the retiring
Indenture Trustee, the Issuer or the Noteholders of a majority in Outstanding
Amount of the Notes may petition any court of competent jurisdiction for the
appointment of a successor Indenture Trustee.
If the Indenture Trustee fails to comply with Section 6.11, any
Noteholder may petition any court of competent jurisdiction for the removal of
the Indenture Trustee and the appointment of a successor Indenture Trustee.
Notwithstanding the replacement of the Indenture Trustee pursuant to
this Section, the Issuer's and the Administrator's obligations under Section
6.7 shall continue for the benefit of the retiring Indenture Trustee.
SECTION 6.9. Successor Indenture Trustee by Merger. If the Indenture
Trustee consolidates with, merges or converts into, or transfers all or
substantially all its corporate trust business or assets to, another
corporation or banking association, the resulting, surviving or transferee
corporation without any further act shall be the successor Indenture Trustee;
provided that such corporation or banking association shall be otherwise
qualified and
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eligible under Section 6.11. The Indenture Trustee shall provide Rating
Agencies prior written notice of any such transaction.
In case at the time such successor or successors by merger,
conversion or consolidation to the Indenture Trustee shall succeed to the
trusts created by this Indenture any of the Notes shall have been
authenticated but not delivered, any such successor to the Indenture Trustee
may adopt the certificate of authentication of any predecessor trustee, and
deliver such Notes so authenticated; and in case at that time any of the Notes
shall not have been authenticated, any successor to the Indenture Trustee may
authenticate such Notes either in the name of any predecessor hereunder or in
the name of the successor to the Indenture Trustee; and in all such cases such
certificates shall have the full force which it is anywhere in the Notes or in
this Indenture provided that the certificate of the Indenture Trustee shall
have.
SECTION 6.10. Appointment of Co-Trustee or Separate Trustee. (a)
Notwithstanding any other provisions of this Indenture, at any time, for the
purpose of meeting any legal requirement of any jurisdiction in which any part
of the Indenture Trust Estate may at the time be located, the Indenture
Trustee shall have the power and may execute and deliver all instruments to
appoint one or more Persons to act as a co-trustee or co-trustees, or separate
trustee or separate trustees, of all or any part of the Indenture Trust
Estate, and to vest in such Person or Persons, in such capacity and for the
benefit of the Noteholders, such title to the Indenture Trust Estate, or any
part hereof, and, subject to the other provisions of this Section, such
powers, duties, obligations, rights and trusts as the Indenture Trustee may
consider necessary or desirable. No co-trustee or separate trustee hereunder
shall be required to meet the terms of eligibility as a successor trustee
under Section 6.11 and no notice to Noteholders of the appointment of any
co-trustee or separate trustee shall be required under Section 6.8 hereof. The
Indenture Trustee shall notify the Rating Agencies of any appointment of a
co-trustee or separate trustee hereunder.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Indenture Trustee shall be conferred or imposed upon and
exercised or performed by the Indenture Trustee and such separate trustee
or co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Indenture
Trustee joining in such act), except to the extent that under any law of
any jurisdiction in which any particular act or acts are to be performed
the Indenture Trustee shall be incompetent or unqualified to perform such
act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Indenture Trust Estate or any
portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely at
the direction of the Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by reason
of any act or omission of any other trustee hereunder; and
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(iii) the Indenture Trustee may at any time accept the
resignation of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Indenture
Trustee shall be deemed to have been given to each of the then separate
trustees and co-trustees, as effectively as if given to each of them. Every
instrument appointing any separate trustee or co-trustee shall refer to this
Indenture and the conditions of this Article VI. Each separate trustee and
co-trustee, upon its acceptance of the trusts conferred, shall be vested with
the estates or property specified in its instrument of appointment, either
jointly with the Indenture Trustee or separately, as may be provided therein,
subject to all the provisions of this Indenture, specifically including every
provision of this Indenture relating to the conduct of, affecting the
liability of, or affording protection to, the Indenture Trustee. Every such
instrument shall be filed with the Indenture Trustee.
(d) Any separate trustee or co-trustee may at any time constitute
the Indenture Trustee, its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under or
in respect of this Indenture on its behalf and in its name. If any separate
trustee or co-trustee shall die, become incapable of acting, resign or be
removed, all its estates, properties, rights, remedies and trusts shall vest
in and be exercised by the Indenture Trustee, to the extent permitted by law,
without the appointment of a new or successor trustee.
SECTION 6.11. Eligibility; Disqualification. The Indenture Trustee
shall at all times satisfy the requirements of TIA 310(a). The Indenture
Trustee shall have a combined capital and surplus of at least $[50,000,000] as
set forth in its most recent published annual report of condition and it shall
have a long term debt rating of Baa3 or better by Moody's. The Indenture
Trustee shall comply with TIA 310(b), including the optional provision
permitted by the second sentence of TIA 310(b)(9); provided, however, that
there shall be excluded from the operation of TIA 310(b)(1) any indenture or
indentures under which other securities of the Issuer are outstanding if the
requirements for such exclusion set forth in TIA 310(b)(1) are met.
SECTION 6.12. Preferential Collection of Claims Against Issuer. The
Indenture Trustee shall comply with TIA 311(a), excluding any creditor
relationship listed in TIA 311(b). An Indenture Trustee who has resigned or
been removed shall be subject to TIA 311(a) to the extent indicated.
ARTICLE VII.
Noteholders' Lists and Reports
------------------------------
SECTION 7.1. Issuer To Furnish Indenture Trustee Names and Addresses
of Noteholders. The Issuer will furnish or cause to be furnished to the
Indenture Trustee (a) not more than five days after the earlier of (i) each
Record Date and (ii) three months after the last Record Date, a list, in such
form as the Indenture Trustee may reasonably require, of the
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names and addresses of the Noteholders as of such Record Date, (b) at such
other times as the Indenture Trustee may request in writing, within 30 days
after receipt by the Issuer of any such request, a list of similar form and
content as of a date not more than 10 days prior to the time such list is
furnished; provided, however, that so long as the Indenture Trustee is the
Note Registrar, no such list shall be required to be furnished.
SECTION 7.2. Preservation of Information; Communications to
Noteholders. (a) The Indenture Trustee shall preserve, in as current a form as
is reasonably practicable, the names and addresses of the Noteholders
contained in the most recent list furnished to the Indenture Trustee as
provided in Section 7.1 and the names and addresses of Noteholders received by
the Indenture Trustee in its capacity as Note Registrar. The Indenture Trustee
may destroy any list furnished to it as provided in such Section 7.1 upon
receipt of a new list so furnished.
(b) Noteholders may communicate pursuant to TIA 312(b) with other
Noteholders with respect to their rights under this Indenture or under the
Notes.
(c) The Issuer, the Indenture Trustee and the Note Registrar shall
have the protection of TIA 312(c).
(d) The Indenture Trustee shall furnish to the Noteholders promptly
upon receipt of a written request therefor, duplicates or copies of all
reports, notices, requests, demands, certificates, financial statements and
any other instruments furnished to the Indenture Trustee under the Basic
Documents.
(e) The Indenture Trustee shall provide notice to the Noteholders as
provided in Section 9.2 of the Trust Agreement, and shall provide notice to
Noteholders of any amendment or supplement to the Trust Agreement as provided
in Section 11.1 of the Trust Agreement.
SECTION 7.3. Reports by Issuer. (a) The Issuer shall:
(b) file with the Indenture Trustee, within 15 days after the Issuer
is required to file the same with the Commission, copies of the annual reports
and of the information, documents and other reports (or copies of such
portions of any of the foregoing as the Commission may from time to time by
rules and regulations prescribe) which the Issuer may be required to file with
the Commission pursuant to Section 13 or 15(d) of the Exchange Act;
(i) file with the Indenture Trustee and the Commission in
accordance with rules and regulations prescribed from time to time by the
Commission such additional information, documents and reports with
respect to compliance by the Issuer with the conditions and covenants of
this Indenture as may be required from time to time by such rules and
regulations; and
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(ii) supply to the Indenture Trustee (and the Indenture Trustee
shall transmit by mail to all Noteholders described in TIA 313(c)) such
summaries of any information, documents and reports required to be filed
by the Issuer pursuant to clauses (i) and (ii) of this Section 7.3(a) as
may be required by rules and regulations prescribed from time to time by
the Commission.
(c) Unless the Issuer otherwise determines, the fiscal year of the
Issuer shall end on December 31 of each year.
(d) Copies of all reports to be sent to the Indenture Trustee under
this Section 7.3 shall be mailed to the Rating Agencies by the Issuer at the
same time.
ARTICLE VIII.
Accounts, Disbursements and Releases
------------------------------------
SECTION 8.1. Collection of Money. Except as otherwise expressly
provided herein, the Indenture Trustee may demand payment or delivery of, and
shall receive and collect, directly and without intervention or assistance of
any fiscal agent or other intermediary, all money and other property payable
to or receivable by the Indenture Trustee pursuant to this Indenture. The
Indenture Trustee shall apply all such money received by it on behalf of
itself and the Noteholders pursuant to the Loan Sale Agreement, the Servicing
Agreement or the Administration Agreement as provided in this Indenture.
Except as otherwise expressly provided in this Indenture, if any default
occurs in the making of any payment or performance under any agreement or
instrument that is part of the Indenture Trust Estate, the Indenture Trustee
may take such action as may be appropriate to enforce such payment or
performance, including the institution and prosecution of appropriate
Proceedings. Any such action shall be without prejudice to any right to claim
a Default under this Indenture and any right to proceed thereafter as provided
in Article V.
SECTION 8.2. Trust Accounts. (a) On or prior to the
Closing Date, the Issuer shall cause the Administrator to
establish and maintain, in the name of the Indenture Trustee, for
the benefit of the Noteholders, the Trust Accounts as provided in
Section 2(c) of the Administration Agreement.
(b) On or before the Business Day preceding each Monthly Payment
Date and Quarterly Payment Date, all Monthly Available Funds with respect to
the preceding Monthly Collection Period (or in the case of a Quarterly Payment
Date, Available Funds with respect to the preceding Collection Period) will be
deposited in the Collection Account as provided in Section 4.1 of the
Servicing Agreement. On each Quarterly Payment Date, the Noteholders'
Distribution Amount with respect to such Quarterly Payment Date will be
distributed from the Collection Account and from the Reserve Account to the
Indenture Trustee (or other Paying Agent) on behalf of the Noteholders as
provided in Sections 2(d)(v)(C) and 2(e)(iv)(E) of the Administration
Agreement. On each Quarterly Payment Date, the Reserve Account Excess for such
Quarterly Payment Date will be distributed to the
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Indenture Trustee (or other Paying Agent) on behalf of the Noteholders as
provided in clauses (b)(ii) and (b)(iii) of Section 2(e)(ii) of the
Administration Agreement (and in the case of clause (b)(iii) whether allocated
thereto pursuant to the proviso to Section 2(e)(ii)(a) or pursuant to Section
2(e)(ii)(b)). On the Quarterly Payment Date referred to in Section 10.1(a)
with respect to a redemption pursuant to Section 10.1(a), the amount on
deposit in the Collateral Reinvestment Account on such Quarterly Payment Date
will be distributed therefrom to the Indenture Trustee (or other Paying Agent)
on behalf of the Noteholders as provided in Section 2(f)(ii) of the
Administration Agreement.
(c) On each Quarterly Payment Date, the Indenture Trustee (or any
other Paying Agent) shall distribute all amounts received by it on behalf of
Noteholders from the Collection Account and the Reserve Account pursuant to
the second sentence of paragraph (b) above to Noteholders in respect of the
Notes to the extent of amounts due and unpaid on the Notes for principal and
interest (but not for any Noteholders' Interest T-▇▇▇▇ Carryover) in the
following amounts and in the following order of priority:
(i) the Senior Noteholders' Interest Distribution Amount, to
the Senior Noteholders, in an amount equal to the accrued and unpaid
interest on the Senior Notes; provided that if there are not sufficient
funds received to pay the entire amount then due on the Senior Notes, the
amounts so received shall be applied to the payment of such interest on
the Senior Notes on a pro rata basis;
(ii) the Subordinate Noteholders' Interest Distribution Amount,
to the Subordinate Noteholders; provided that if there are not sufficient
funds received to pay the entire amount of accrued and unpaid interest
then due on the Subordinate Notes, the amounts received shall be applied
to the payment of such interest on the Subordinate Notes on a pro rata
basis;
(iii) {if the Revolving Period has terminated}, the Senior
Noteholders' Principal Distribution Amount, to the Senior Noteholders
until the Outstanding Amount of the Senior Notes is reduced to zero; and
(iv) after the Outstanding Principal Amount of the Senior Notes
is reduced to zero, the Subordinate Noteholders' Principal Distribution
Amount to the Subordinate Noteholders until the Outstanding Amount of the
Subordinate Notes is reduced to zero.
(d) On each Quarterly Payment Date, the Indenture Trustee (or any
Paying Agent) shall distribute all amounts received by it on behalf of
Noteholders in respect of Reserve Account Excess pursuant to the second to
last sentence of paragraph (b) above to the Noteholders in the following
amounts and order of priority:
(i) {if the Revolving Period has terminated,} all of such
amounts to Senior Noteholders until the Outstanding Amount of the Notes
is equal to the Pool Balance as of the close of business on the last day
of the related Collection Period;
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(ii) {if the Revolving Period has terminated,} any remaining
such amounts, after the Outstanding Amount of the Senior Notes is reduced
to zero, to the Subordinate Noteholders until the Outstanding Amount of
the Subordinate Notes is equal to the Pool Balance as of the close of
business on the last day of the related Collection Period;
(iii) the Senior Noteholders' Interest T-▇▇▇▇ Carryover, if any,
to the Senior Noteholders; provided that if insufficient funds are
received to pay the entire Senior Noteholders' Interest T-▇▇▇▇ Carryover,
the amounts so received shall be applied to the payment of such Senior
Noteholders' Interest T-▇▇▇▇ Carryover on a pro rata basis; and
(iv) the Subordinate Noteholders' Interest T-▇▇▇▇ Carryover, if
any, to the Subordinate Noteholders; provided that if insufficient funds
are received to pay the entire Subordinate Noteholders' Interest T-▇▇▇▇
Carryover, the amounts so received shall be applied to the payment of
such Subordinate Noteholders' Interest T-▇▇▇▇ Carryover on a pro rata
basis.
(e) On the Quarterly Payment Date referred to in Section 10.1(a)
with respect to redemption pursuant to Section 10.1(a), the Indenture Trustee
(or any other Paying Agent) shall distribute all amounts received by it on or
behalf of Noteholders from the Collateral Reinvestment Account pursuant to the
last sentence of Section (b) above to Noteholders in the following amounts and
order of priority:
(i) all of such amount to the Senior Noteholders until the
Outstanding Amount of the Senior Notes is reduced to zero; and
(ii) after the Outstanding Amount of the Senior Notes is reduced
to zero, to the Subordinate Noteholders until the Outstanding Amount of
the Subordinate Notes is reduced to zero.
SECTION 8.3. General Provisions Regarding Accounts. (a) So long as
no Default shall have occurred and be continuing, all or a portion of the
funds in the Trust Accounts shall be invested in Eligible Investments and
reinvested by the Indenture Trustee upon Issuer Order, subject to the
provisions of Section 2(c) of the Administration Agreement. All income or
other gain from investments of moneys deposited in the Trust Accounts shall be
deposited by the Indenture Trustee in the Collection Account, and any loss
resulting from such investments shall be charged to such Trust Account. The
Issuer will not direct the Indenture Trustee to make any investment of any
funds or to sell any investment held in any of the Trust Accounts unless the
security interest granted and perfected in such account will continue to be
perfected in such investment or the proceeds of such sale, in either case
without any further action by any Person, and, in connection with any
direction to the Indenture Trustee to make any such investment or sale, if
requested by the Indenture Trustee, the Issuer shall deliver to the Indenture
Trustee an Opinion of Counsel, acceptable to the Indenture Trustee, to such
effect.
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(b) Subject to Section 6.1(c), the Indenture Trustee shall not in
any way be held liable by reason of any insufficiency in any of the Trust
Accounts resulting from any loss on any Eligible Investment included therein
except for losses attributable to the Indenture Trustee's failure to make
payments on such Eligible Investments issued by the Indenture Trustee, in its
commercial capacity as principal obligor and not as trustee, in accordance
with their terms.
(c) If (i) the Issuer shall have failed to give investment
directions for any funds on deposit in the Trust Accounts to the Indenture
Trustee by 10:00 a.m. [New York] time (or such other time as may be agreed by
the Issuer and Indenture Trustee) on any Business Day; or (ii) a Default shall
have occurred and be continuing with respect to the Notes but the Notes shall
not have been declared due and payable pursuant to Section 5.2, or, if such
Notes shall have been declared due and payable following an Event of Default,
amounts collected or receivable from the Indenture Trust Estate are being
applied in accordance with Section 5.5 as if there had not been such a
declaration; then the Indenture Trustee shall, to the fullest extent
practicable, invest and reinvest funds in the Trust Accounts in one or more
Eligible Investments.
SECTION 8.4. Release of Indenture Trust Estate. (a) Subject to the
payment of its fees and expenses pursuant to Section 6.7, the Indenture
Trustee may, and when required by the provisions of this Indenture shall,
execute instruments to release property from the lien of this Indenture, or
convey the Indenture Trustee's interest in the same, in a manner and under
circumstances that are not inconsistent with the provisions of this Indenture.
No party relying upon an instrument executed by the Indenture Trustee as
provided in this Article VIII shall be bound to ascertain the Indenture
Trustee's authority, inquire into the satisfaction of any conditions precedent
or see to the application of any moneys.
(b) The Indenture Trustee shall, at such time as there are no Notes
Outstanding and all sums due the Indenture Trustee pursuant to Section 6.7
have been paid, release any remaining portion of the Indenture Trust Estate
that secured the Notes from the lien of this Indenture and release to the
Issuer or any other Person entitled thereto any funds then on deposit in the
Trust Accounts. The Indenture Trustee shall release property from the lien of
this Indenture pursuant to this Section 8.4(b) only upon receipt of an Issuer
Request accompanied by an Officers' Certificate of the Issuer, an Opinion of
Counsel and (if required by the TIA) Independent Certificates in accordance
with TIA 314(c) and 314(d)(1) meeting the applicable requirements of Section
11.1.
SECTION 8.5. Opinion of Counsel. The Indenture Trustee shall receive
at least seven days' notice when requested by the Issuer to take any action
pursuant to Section 8.4(a), accompanied by copies of any instruments involved,
and the Indenture Trustee shall also require, as a condition to such action,
an Opinion of Counsel, in form and substance satisfactory to the Indenture
Trustee, stating the legal effect of any such action, outlining the steps
required to complete the same, and concluding that all conditions precedent to
the taking of such action have been complied with and such action will not
materially and adversely impair the security for the Notes or the rights of
the Noteholders in contravention of the
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provisions of this Indenture; provided, however, that such Opinion of Counsel
shall not be required to express an opinion as to the fair value of the
Indenture Trust Estate. Counsel rendering any such opinion may rely, without
independent investigation, on the accuracy and validity of any certificate or
other instrument delivered to the Indenture Trustee in connection with any
such action.
ARTICLE IX.
Supplemental Indentures
-----------------------
SECTION 9.1. Supplemental Indentures Without Consent of Noteholders.
(a) Without the consent of any Noteholders but with prior notice to the Rating
Agencies, the Issuer and the Indenture Trustee, when authorized by an Issuer
Order, at any time and from time to time, may enter into one or more
indentures supplemental hereto (which shall conform to the provisions of the
Trust Indenture Act as in force at the date of the execution thereof), in form
satisfactory to the Indenture Trustee, for any of the following purposes:
(i) to correct or amplify the description of any property at
any time subject to the lien of this Indenture, or, better to assure,
convey and confirm unto the Indenture Trustee any property subject or
required to be subjected to the lien of this Indenture, or to subject to
the lien of this Indenture additional property;
(ii) to evidence the succession, in compliance with the
applicable provisions hereof, of another person to the Issuer, and the
assumption by any such successor of the covenants of the Issuer herein
and in the Notes contained;
(iii) to add to the covenants of the Issuer, for the benefit of
the Noteholders, or to surrender any right or power herein conferred upon
the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any
property to or with the Indenture Trustee;
(v) to cure any ambiguity, to correct or supplement any
provision herein or in any supplemental indenture which may be
inconsistent with any other provision herein or in any supplemental
indenture or to make any other provisions with respect to matters or
questions arising under this Indenture or in any supplemental indenture;
provided that such action shall not materially adversely affect the
interests of the Noteholders;
(vi) to evidence and provide for the acceptance of the
appointment hereunder by a successor trustee with respect to the Notes
and to add to or change any of the provisions of this Indenture as shall
be necessary to facilitate the administration of the trusts hereunder by
more than one trustee, pursuant to the requirements of Article VI; or
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(vii) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the
qualification of this Indenture under the TIA or under any similar
Federal statute hereafter enacted and to add to this Indenture such other
provisions as may be expressly required by the TIA.
The Indenture Trustee is hereby authorized to join in the execution
of any such supplemental indenture and to make any further appropriate
agreements and stipulations that may be therein contained.
(b) The Issuer and the Indenture Trustee, when authorized by an
Issuer Order, may, also without the consent of any of the Noteholders but with
prior notice to the Rating Agencies, enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to, or changing
in any manner or eliminating any of the provisions of, this Indenture or of
modifying in any manner the rights of the Noteholders under this Indenture;
provided, however, that such action shall not, as evidenced by an Opinion of
Counsel, adversely affect in any material respect the interests of any
Noteholder.
SECTION 9.2. Supplemental Indentures with Consent of Noteholders.
The Issuer and the Indenture Trustee, when authorized by an Issuer Order, also
may, with prior notice to the Rating Agencies and with the consent of the
Noteholders of not less than a majority of the Outstanding Amount of the
Notes, by Act of such Noteholders delivered to the Issuer and the Indenture
Trustee, enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to, or changing in any manner or eliminating
any of the provisions of, this Indenture or of modifying in any manner the
rights of the Noteholders under this Indenture; provided, however, that no
such supplemental indenture shall, without the consent of the Noteholder of
each Outstanding Note affected thereby:
(i) change the date of payment of any installment of principal
of or interest (including any Noteholders' Interest T-▇▇▇▇ Carryover) on
any Note, or reduce the principal amount thereof, the interest rate
thereon or the Redemption Price with respect thereto, change the
provisions of this Indenture relating to the application of collections
on, or the proceeds of the sale of, the Indenture Trust Estate to payment
of principal of or interest (including any Noteholders' Interest T-▇▇▇▇
Carryover) on the Notes, or change any place of payment where, or the
coin or currency in which, any Note or the interest thereon is payable,
or impair the right to institute suit for the enforcement of the
provisions of this Indenture requiring the application of funds available
therefor, as provided in Article V, to the payment of any such amount due
on the Notes on or after the respective due dates thereof (or, in the
case of redemption, on or after the Redemption Date);
(ii) reduce the percentage of the Outstanding Amount of the
Notes, the consent of the Noteholders of which is required for any such
supplemental indenture, or the consent of the Noteholders of which is
required for any waiver of compliance with certain provisions of this
Indenture or certain defaults hereunder and their consequences provided
for in this Indenture;
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(iii) modify or alter the provisions of the proviso to the
definition of the term "Outstanding";
(iv) reduce the percentage of the Outstanding Amount of the
Notes required to direct the Indenture Trustee to direct the Issuer to
sell or liquidate the Indenture Trust Estate pursuant to Section 5.4;
(v) modify any provision of this Section except to increase any
percentage specified herein or to provide that certain additional
provisions of this Indenture or the other Basic Documents cannot be
modified or waived without the consent of the Noteholder of each
Outstanding Note affected thereby;
(vi) modify any of the provisions of this Indenture in such
manner as to affect the calculation of the amount of any payment of
interest (including any Noteholders' Interest T-▇▇▇▇ Carryover) or
principal due on any Note on any Quarterly Payment Date (including the
calculation of any of the individual components of such calculation) or
to affect the rights of the Noteholders to the benefit of any provisions
for the mandatory redemption of the Notes contained herein; or
(vii) permit the creation of any lien ranking prior to or on a
parity with the lien of this Indenture with respect to any part of the
Indenture Trust Estate or, except as otherwise permitted or contemplated
herein, terminate the lien of this Indenture on any property at any time
subject hereto or deprive any Noteholder of any Note of the security
provided by the lien of this Indenture.
The Indenture Trustee may in its discretion determine whether or not
any Notes would be affected by any supplemental indenture and any such
determination shall be conclusive upon the Noteholders of all Notes, whether
theretofore or thereafter authenticated and delivered hereunder. The Indenture
Trustee shall not be liable for any such determination made in good faith.
It shall not be necessary for any Act of Noteholders under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.
Promptly after the execution by the Issuer and the Indenture Trustee
of any supplemental indenture pursuant to this Section, the Indenture Trustee
shall mail to the Noteholders of the Notes to which such amendment or
supplemental indenture relates and to the Rating Agencies a notice setting
forth in general terms the substance of such supplemental indenture. Any
failure of the Indenture Trustee to mail such notice, or any defect therein,
shall not, however, in any way impair or affect the validity of any such
supplemental indenture.
SECTION 9.3. Execution of Supplemental Indentures. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modifications thereby of the trusts
created by this Indenture, the Indenture
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Trustee shall receive, and subject to Sections 6.1 and 6.2, shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of
such supplemental indenture is authorized or permitted by this Indenture. The
Indenture Trustee may, but shall not be obligated to, enter into any such
supplemental indenture that affects the Indenture Trustee's own rights,
duties, liabilities or immunities under this Indenture or otherwise.
SECTION 9.4. Effect of Supplemental Indenture. Upon the execution of
any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and be deemed to be modified and amended in accordance therewith with
respect to the Notes affected thereby, and the respective rights, limitations
of rights, obligations, duties, liabilities and immunities under this
Indenture of the Indenture Trustee, the Issuer and the Noteholders shall
thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and all the terms and
conditions of any such supplemental indenture shall be and are deemed to be
part of the terms and conditions of this Indenture for any and all purposes.
SECTION 9.5. Conformity with Trust Indenture Act. Every amendment of
this Indenture and every supplemental indenture executed pursuant to this
Article IX shall conform to the requirements of the Trust Indenture Act as
then in effect so long as this Indenture shall then be qualified under the
Trust Indenture Act.
SECTION 9.6. Reference in Notes to Supplemental Indentures. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the Indenture Trustee
shall, bear a notation in form approved by the Indenture Trustee as to any
matter provided for in such supplemental indenture. If the Issuer or the
Indenture Trustee shall so determine, new Notes so modified as to conform, in
the opinion of the Indenture Trustee and the Issuer, to any such supplemental
indenture may be prepared and executed by the Issuer and authenticated and
delivered by the Indenture Trustee in exchange for Outstanding Notes.
ARTICLE X.
Redemption of Notes
-------------------
SECTION 10.1. Redemption. (a) {In the event that on the Quarterly
Payment Date on which the Revolving Period ends (or on the Quarterly Payment
Date on or immediately following the last day of the Revolving Period, if the
Revolving Period does not end on a Quarterly Payment Date) any amount remains
on deposit in the Collateral Reinvestment Account after giving effect to the
making of all Additional Fundings, including any such Additional Fundings on
such Quarterly Payment Date, one or more classes of the Notes will be redeemed
in part, in the order of priority specified in Section 8.2(e), in an aggregate
principal amount equal to the amount then on deposit in the Collateral
Reinvestment Account.}
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(b) In the event that the assets of the Trust are sold pursuant to
Section 9.2 of the Trust Agreement or the Student Loans are sold pursuant to
Section 4.4 hereof, that portion of the amounts on deposit in the Trust
Accounts to be distributed to the Noteholders shall be paid to the Noteholders
up to the Outstanding Amount of the Notes and all accrued and unpaid interest
thereon and any accrued Noteholders' Interest T-▇▇▇▇ Carryover with respect
thereto (but only to the extent provided by Sections 2.7(d) and 8.2 hereof).
If amounts are to be paid to Noteholders pursuant to this Section 10.1(b), the
Administrator or the Issuer shall, to the extent practicable, furnish notice
of such Event to the Indenture Trustee not later than 25 days prior to the
Redemption Date whereupon all such amounts shall be payable on the Redemption
Date.
(c) The Notes are subject to redemption in whole, but not in part,
on any Quarterly Payment Date on which the Depositor exercises its option to
purchase the Trust Estate pursuant to Section 5.1 of the Loan Sale Agreement.
If the Notes are to be redeemed pursuant to this Section 10.1(c), the
Depositor shall furnish notice of such election to the Indenture Trustee not
later than 20 days prior to the Redemption Date and the Issuer shall deposit
by 10:00 A.M. [New York] City time on the Redemption Date with the Indenture
Trustee in the Collection Account the Redemption Price for the Notes,
whereupon the Notes shall be due and payable on the Redemption Date upon
furnishing a notice complying with Section 10.2 to each Noteholder.
SECTION 10.2. Form of Redemption Notice. Notice of redemption under
Section 10.1 shall be given by the Indenture Trustee by first-class mail,
postage prepaid, or by facsimile, mailed or transmitted on or prior to the
applicable Redemption Date to each Noteholder, as of the close of business on
the Record Date preceding the applicable Redemption Date, at such Noteholder's
address or facsimile number appearing in the Note Register.
All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price; and
(iii) the place where such Notes are to be surrendered for
payment of the Redemption Price (which shall be the office or agency of
the Issuer to be maintained as provided in Section 3.2).
Notice of redemption of the Notes shall be given by the Indenture
Trustee in the name and at the expense of the Issuer. Failure to give notice
of redemption, or any defect therein, to any Noteholder of any Note shall not
impair or affect the validity of the redemption of any other Note.
SECTION 10.3. Notes Payable on Redemption Date. The Notes or
portions thereof to be redeemed shall on the Redemption Date become due and
payable at the Redemption Price and (unless the Issuer shall default in the
payment of the Redemption Price)
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no interest shall accrue on the Redemption Price for any period after the date
to which accrued interest is calculated for purposes of calculating the
Redemption Price.
ARTICLE XI.
Miscellaneous
-------------
SECTION 11.1. Compliance Certificates and Opinions. (a) Upon any
application or request by the Issuer to the Indenture Trustee to take any
action under any provision of this Indenture, the Issuer shall furnish to the
Indenture Trustee (i) an Officers' Certificate of the Issuer stating that all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with, (ii) an Opinion of Counsel stating
that in the opinion of such counsel all such conditions precedent, if any,
have been complied with and (iii) (if required by the TIA) an Independent
Certificate from a firm of certified public accountants meeting the applicable
requirements of this Section, except that, in the case of any such application
or request as to which the furnishing of such documents is specifically
required by any provision of this Indenture, no additional certificate or
opinion need be furnished.
(b) Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(i) a statement that each signatory of such certificate or
opinion has read or has caused to be read such covenant or condition and
the definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(iii) a statement that, in the opinion of each such signatory,
such signatory has made such examination or investigation as is necessary
to enable such signatory to express an informed opinion as to whether
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.
(c)(i) Prior to the deposit of any Collateral or other property or
securities with the Indenture Trustee that is to be made the basis for the
release of any property or securities subject to the lien of this Indenture,
the Issuer shall, in addition to any obligation imposed in Section 11.1(a) or
elsewhere in this Indenture, furnish to the Indenture Trustee an Officers'
Certificate of the Issuer certifying or stating the opinion of each person
signing such certificate as to the fair value (within 90 days of such deposit)
to the Issuer of the Collateral or other property or securities to be so
deposited.
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(ii) Whenever the Issuer is required to furnish to the Indenture
Trustee an Officers' Certificate of the Issuer certifying or stating the
opinion of any signer thereof as to the matters described in clause (i)
above, the Issuer shall also deliver to the Indenture Trustee an
Independent Certificate as to the same matters, if the fair value to the
Issuer of the securities to be so deposited and of all other such
securities made the basis of any such withdrawal or release since the
commencement of the then current fiscal year of the Issuer, as set forth
in the certificates delivered pursuant to clause (i) above and this
clause (ii), is 10% or more of the Outstanding Amount of the Notes, but
such a certificate need not be furnished with respect to any securities
so deposited, if the fair value thereof to the Issuer as set forth in the
related Officers' Certificate is less than [$25,000] or less than one
percent of the Outstanding Amount of the Notes.
(iii) Other than any property released as contemplated by clause
(v) below, whenever any property or securities are to be released from
the lien of this Indenture, the Issuer shall also furnish to the
Indenture Trustee an Officers' Certificate of the Issuer certifying or
stating the opinion of each person signing such certificate as to the
fair value (within 90 days of such release) of the property or securities
proposed to be released and stating that in the opinion of such person
the proposed release will not impair the security under this Indenture in
contravention of the provisions hereof.
(iv) Whenever the Issuer is required to furnish to the Indenture
Trustee an Officers' Certificate of the Issuer certifying or stating the
opinion of any signer thereof as to the matters described in clause (iii)
above, the Issuer shall also furnish to the Indenture Trustee an
Independent Certificate as to the same matters if the fair value of the
property or Securities and of all other property, other than property as
contemplated by clause (v) below, or securities released from the lien of
this Indenture since the commencement of the then-current calendar year,
as set forth in the certificates required by clause (iii) above and this
clause (iv), equals 10% or more of the Outstanding Amount of the Notes,
but such certificate need not be furnished in the case of any release of
property or securities if the fair value thereof as set forth in the
related Officers' Certificate is less than [$25,000] or less than one
percent of the then Outstanding Amount of the Notes.
(v) Notwithstanding Section 2.9 or any other provision of this
Section, the Issuer may, without compliance with the requirements of the
other provisions of this Section, (A) collect, liquidate, sell or
otherwise dispose of Student Loans as and to the extent permitted or
required by the Basic Documents and (B) make cash payments out of the
Trust Accounts as and to the extent permitted or required by the Basic
Documents, so long as the Issuer shall deliver to the Indenture Trustee
every three months, commencing [ ], an Officers' Certificate of the
Issuer stating that all the dispositions of Collateral described in
clauses (A) and (B) above that occurred during the immediately preceding
three calendar months (or the period from the Closing Date in the case of
the [ ] Officers' Certificate) were in the ordinary
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course of the Issuer's business and that the proceeds thereof were
applied in accordance with the Basic Documents.
SECTION 11.2. Form of Documents Delivered to Indenture Trustee. In
any case where several matters are required to be certified by, or covered by
an opinion of, any specified Person, it is not necessary that all such matters
be certified by, or covered by the opinion of, only one such Person, or that
they be so certified or covered by only one document, but one such Person may
certify or give an opinion with respect to some matters and one or more other
such Persons as to other matters, and any such Person may certify or give an
opinion as to such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of the Issuer
may be based, insofar as it relates to legal matters, upon a certificate or
opinion of, or representations by, counsel, unless such officer knows, or in
the exercise of reasonable care should know, that the certificate or opinion
or representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate of an Authorized Officer
or Opinion of Counsel may be based, insofar as it relates to factual matters,
upon a certificate or opinion of, or representations by, an officer or
officers of the Servicer, the Seller, the Depositor, the Issuer or the
Administrator, stating that the information with respect to such factual
matters is in the possession of the Servicer, the Seller, the Depositor, the
Issuer or the Administrator, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Whenever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the Issuer
shall deliver any document as a condition of the granting of such application,
or as evidence of the Issuer's compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application
or at the effective date of such certificate or report (as the case may be),
of the facts and opinions stated in such document shall in such case be
conditions precedent to the right of the Issuer to have such application
granted or to the sufficiency of such certificate or report. The foregoing
shall not, however, be construed to affect the Indenture Trustee's right to
rely upon the truth and accuracy of any statement or opinion contained in any
such document as provided in Article VI.
SECTION 11.3. Acts of Noteholders. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Noteholders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Noteholders in person or by agents duly appointed in writing; and except
as herein otherwise expressly provided such action shall become effective when
such instrument or instruments are delivered to the Indenture Trustee, and,
where it is hereby expressly required, to the Issuer. Such instrument or
instruments (and
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the action embodied therein and evidenced thereby) are herein sometimes
referred to as the "Act" of the Noteholders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 6.1) conclusive in favor of the Indenture
Trustee and the Issuer, if made in the manner provided in this Section.
(b) The fact and date of the execution by any person of any such
instrument or writing may be proved in any manner that the Indenture Trustee
deems sufficient.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Noteholder of any Notes shall bind the
Noteholder of every Note issued upon the registration thereof or in exchange
therefor or in lieu thereof, in respect of anything done, omitted or suffered
to be done by the Indenture Trustee or the Issuer in reliance thereon, whether
or not notation of such action is made upon such Note.
SECTION 11.4. Notices to Indenture Trustee, Issuer and Rating
Agencies. Any request, demand, authorization, direction, notice, consent,
waiver or act of Noteholders or other documents provided or permitted by this
Indenture shall be in writing and if such request, demand, authorization,
direction, notice, consent, waiver or act of Noteholders is to be made upon,
given or furnished to or filed with:
(a) the Indenture Trustee by any Noteholder or by the Issuer, it
shall be sufficient for every purpose hereunder if made, given, furnished
or filed in writing to or with the Indenture Trustee at its Corporate
Trust Office, or
(b) the Issuer by the Indenture Trustee or by any Noteholder, it
shall be sufficient for every purpose hereunder if in writing and mailed,
first-class, postage prepaid, to the Issuer addressed to: EFG Student
Loan Trust 1999-[ ], in care of First Chicago Delaware Inc., as Trustee,
FCC National Bank, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, with a
copy to the Trustee at the Corporate Trust Office of the Trustee, or at
any other address previously furnished in writing to the Indenture
Trustee by the Issuer. The Issuer shall promptly transmit any notice
received by it from the Noteholders to the Indenture Trustee.
Notices required to be given to the Rating Agencies by the Issuer,
the Indenture Trustee or the Trustee shall be in writing, personally delivered
or mailed by certified mail, return receipt requested, to the following
address: (i) in the case of ▇▇▇▇▇'▇ Investors Service, Inc., at the following
address: ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention of ABS
Monitoring Department and (ii) in the case of Fitch Investors Service, L.P.,
at the following address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention of Asset Backed Monitoring Unit; or as to each of the foregoing, at
such other address as shall be designated by written notice to the other
parties.
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SECTION 11.5. Notices to Noteholders; Waiver. Where this Indenture
provides for notice to Noteholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class, postage prepaid to each Noteholder affected by such
event, at his address as it appears on the Note Register, not later than the
latest date, and not earlier than the earliest date, prescribed for the giving
of such notice. In any case where notice to Noteholders is given by mail,
neither the failure to mail such notice nor any defect in any notice so mailed
to any particular Noteholder shall affect the sufficiency of such notice with
respect to other Noteholders, and any notice that is mailed in the manner
herein provided shall conclusively be presumed to have been duly given.
Where this Indenture provides for notice in any manner, such notice
may be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Noteholders shall be filed with the Indenture
Trustee but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such a waiver.
In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity, it shall be impractical
to mail notice of any event to Noteholders when such notice is required to be
given pursuant to any provision of this Indenture, then any manner of giving
such notice as shall be satisfactory to the Indenture Trustee shall be deemed
to be a sufficient giving of such notice.
Where this Indenture provides for notice to the Rating Agencies,
failure to give such notice shall not affect any other rights or obligations
created hereunder, and shall not under any circumstance constitute a Default.
SECTION 11.6. Alternate Payment and Notice Provisions.
Notwithstanding any provision of this Indenture or any of the Notes to the
contrary, the Issuer may enter into any agreement with any Noteholder
providing for a method of payment, or notice by the Indenture Trustee or any
Paying Agent to such Noteholder, that is different from the methods provided
for in this Indenture for such payments or notices, provided that such
agreement is reasonably acceptable to the Indenture Trustee. The Issuer will
furnish to the Indenture Trustee a copy of each such agreement and the
Indenture Trustee will cause payments to be made and notices to be given in
accordance with such agreements.
SECTION 11.7. Conflict with Trust Indenture Act. If any provision
hereof limits, qualifies or conflicts with another provision hereof that is
required to be included in this Indenture by any of the provisions of the
Trust Indenture Act, such required provision shall control.
The provisions of TIA SS. SS. 310 through 317 that impose duties on
any Person (including the provisions automatically deemed included herein unless
expressly excluded by this Indenture) are a part of and govern this Indenture,
whether or not physically contained herein.
-54-
SECTION 11.8. Effect of Headings and Table of Contents. The Article
and Section headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof.
SECTION 11.9. Successors and Assigns. All covenants and agreements
in this Indenture and the Notes by the Issuer shall bind its successors and
assigns, whether so expressed or not. All agreements of the Indenture Trustee
in this Indenture shall bind the successors, co-trustees and agents (excluding
any legal representatives or accountants) of the Indenture Trustee.
SECTION 11.10. Separability. In case any provision in this Indenture
or in the Notes shall be invalid, illegal or unenforceable, the validity,
legality, and enforceability of the remaining provisions shall not in any way
be affected or impaired thereby.
SECTION 11.11. Benefits of Indenture. Nothing in this Indenture or
in the Notes, express or implied, shall give to any Person, other than the
parties hereto and their successors hereunder, and the Noteholders, and any
other party secured hereunder, and any other Person with an ownership interest
in any part of the Indenture Trust Estate, any benefit or any legal or
equitable right, remedy or claim under this Indenture.
SECTION 11.12. [RESERVED]
SECTION 11.13. Governing Law. This Indenture shall be construed in
accordance with the laws of the State of New York, without reference to its
conflict of law provisions, and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws.
SECTION 11.14. Counterparts. This Indenture may be
executed in any number of counterparts, each of which so executed
shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
SECTION 11.15. Recording of Indenture. If this Indenture is subject
to recording in any appropriate public recording offices, such recording is to
be effected by the Issuer and at its expense accompanied by an Opinion of
Counsel (which may be counsel to the Indenture Trustee or any other counsel
reasonably acceptable to the Indenture Trustee) to the effect that such
recording is necessary either for the protection of the Noteholders or any
other Person secured hereunder or for the enforcement of any right or remedy
granted to the Indenture Trustee under this Indenture.
SECTION 11.16. Trust Obligations. No recourse may be taken, directly
or indirectly, with respect to the obligations of the Issuer, the Seller, the
Depositor, the Owner, the Administrator, the Servicer, the Trustee or the
Indenture Trustee on the Notes or under this Indenture or any certificate or
other writing delivered in connection herewith or therewith, against (i) the
Seller, the Depositor, the Owner, the Administrator, the
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Servicer, the Indenture Trustee or the Trustee in its individual capacity or
(ii) any partner, owner, beneficiary, agent, officer, director or employee of
the Seller, the Depositor, the Owner, the Administrator, the Servicer, the
Indenture Trustee or the Trustee in its individual capacity, any holder or
owner of a beneficial interest in the Issuer, the Trustee or the Indenture
Trustee or of any successor or assign of the Seller, the Depositor, the Owner,
Administrator, the Servicer, the Indenture Trustee or the Trustee in its
individual capacity, except as any such Person may have expressly agreed (it
being understood that the Indenture Trustee and the Trustee have no such
obligations in their individual capacity) and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by
applicable law, for any unpaid consideration for stock, unpaid capital
contribution or failure to pay any installment or call owing to such entity.
For all purposes of this Indenture, in the performance of any duties or
obligations of the Issuer hereunder, the Trustee shall be subject to, and
entitled to the benefits of, the terms and provisions of Articles VI, VII and
VIII of the Trust Agreement.
SECTION 11.17. No Petition. The Indenture Trustee, by entering into
this Indenture, and each Noteholder, by accepting a Note, hereby covenant and
agree that they will not at any time institute against the Depositor, or the
Issuer, or join in any institution against the Depositor or the Issuer of, any
bankruptcy, reorganization, arrangement, insolvency, receivership or
liquidation proceedings, or other proceedings under any United States Federal
or state bankruptcy or similar law in connection with any obligations relating
to the Notes, this Indenture or any of the other Basic Documents.
SECTION 11.18. Inspection. The Issuer agrees that, on reasonable
prior notice, it will permit any representative of the Indenture Trustee,
during the Issuer's normal business hours, to examine all the books of
account, records, reports, and other papers of the Issuer, to make copies and
extracts therefrom, to cause such books to be audited by Independent certified
public accountants, and to discuss the Issuer' affairs, finances and accounts
with the Issuer's officers, employees, and Independent certified public
accountants, all at such reasonable times and as often as may be reasonably
requested. The Indenture Trustee shall and shall cause its representatives to
hold in confidence all such information obtained from such examination or
inspection except to the extent disclosure may be required by law (and all
reasonable applications for confidential treatment are unavailing) and except
to the extent that the Indenture Trustee may reasonably determine that such
disclosure is consistent with its obligations hereunder.
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IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused
this Indenture to be duly executed by their respective officers, thereunto
duly authorized and duly attested, all as of the day and year first above
written.
EFG STUDENT LOAN TRUST
1999-[ ],
by [TRUSTEE],
not in its individual capacity
but solely as Trustee,
By:
--------------------------------------
Name:
Title:
[INDENTURE TRUSTEE], not
in its individual capacity but
solely as Indenture Trustee,
By:
--------------------------------------
Name:
Title:
Acknowledged and accepted as
to the Granting Clause as of
the day and year first above
written:
[ELIGIBLE LENDER TRUSTEE], not
in its Individual capacity but
solely as Eligible Lender Trustee,
By:
-----------------------------
Name:
Title:
-▇▇-
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ )
) ss.:
COUNTY OF NEW YORK )
BEFORE ME, the undersigned authority, a Notary Public in and for said
county and state, on this day personally appeared ______________________,
known to me to be the person and officer whose name is subscribed to the
foregoing instrument and acknowledged to me that the same was the act of the
said EFG STUDENT LOAN TRUST 1999-[ ], a Delaware trust, and that such person
executed the same as the act of said trust for the purpose and consideration
therein expressed, and in the capacities therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the __ day of [ 1999].
-----------------------------------------
Notary Public in and for
the State of New York
[Seal]
My commission expires:
----------------------------
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
BEFORE ME, the undersigned authority, a Notary Public in and for said
county and state, on this day personally appeared ______________________,
known to me to be the person and officer whose name is subscribed to the
foregoing instrument and acknowledged to me that the same was the act of the
said [INDENTURE TRUSTEE], a New York banking corporation, and that such person
executed the same as the act of said corporation for the purpose and
consideration therein expressed, and in the capacities therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the __ day of [ ].
-----------------------------------------
Notary Public in and for
the State of New York
[Seal]
My commission expires:
---------------------------
EXHIBIT A-1
TO THE INDENTURE
[FORM OF SENIOR NOTE]
SENIOR NOTE
SEE REVERSE FOR CERTAIN DEFINITIONS
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer (as
defined below) or its agent for registration of transfer, exchange or payment,
and any Note issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF. THIS NOTE IS NOT
GUARANTEED OR INSURED BY ANY GOVERNMENTAL AGENCY.
REGISTERED CUSIP NO.
$--------
No. R-
EFG STUDENT LOAN TRUST 1999-[ ]
FLOATING RATE ASSET BACKED SENIOR NOTES
EFG Student Loan Trust 1999-[ ], a trust organized and existing under the
laws of the State of Delaware (herein referred to as the "Issuer"), for value
received, hereby promises to pay to ______________________________, or
registered assigns, the principal sum of __________________________________
DOLLARS payable on each Quarterly Payment Date in an amount equal to the
result obtained by multiplying (i) a fraction the numerator of which is
$___________ and the denominator of which is $[ ] by (ii) the aggregate
amount, if any, payable to Noteholders on such Quarterly Payment Date in
respect of principal of the Senior Notes pursuant to Section 3.1 of the
Indenture dated as of[__________ 1999], between the Issuer and [INDENTURE
TRUSTEE], a New York banking corporation, as Indenture Trustee (the "Indenture
Trustee") (capitalized terms used but not defined herein shall have the
meanings ascribed thereto in the Indenture, which also references rules as to
usage that shall be
A-1-1
applicable herein); {provided, however, that no principal shall be payable on
this Note until after the end of the Revolving Period and,} provided, further,
that the entire unpaid principal amount of this Note shall be due and payable
on the [ ] Quarterly Payment Date (the "Senior Note Final Maturity Date")
and the Redemption Date, if any, pursuant to Section 10.1(b) or 10.1(c) of the
Indenture.
The Issuer will pay interest on this Note at the rate per annum equal to
the Senior Note Rate (as defined on the reverse hereof), on each Quarterly
Payment Date until the principal of this Note is paid or made available for
payment, on the principal amount of this Note outstanding on the preceding
Quarterly Payment Date, after giving effect to all payments of principal made
on the preceding Quarterly Payment Date (or, in the case of the first
Quarterly Payment Date, on the Closing Date), subject to certain limitations
contained in Section 3.1 of the Indenture. Interest on this Note will accrue
for each Quarterly Payment Date from the most recent Quarterly Payment Date on
which interest has been paid to but excluding such Quarterly Payment Date or,
if no interest has yet been paid, from [ ] (each, a "Quarterly Interest
Period"). Interest on this Note will be computed on the basis of the actual
number of days elapsed in each Quarterly Interest Period and a 365-day year
(or 366-day year in the case of a leap year). Such principal of and interest
on this Note shall be paid in the manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of
this Note.
Reference is made to the further provisions of this Note set forth on the
reverse hereof, which shall have the same effect as though fully set forth on
the face of this Note.
Unless the certificate of authentication hereon has been executed by the
Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
A-1-2
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed, manually or in facsimile, as of the date set forth below.
EFG STUDENT LOAN TRUST 1999-[ ]
by [TRUSTEE], not in its individual capacity
but solely as Trustee under the Trust
Agreement,
by
---------------------------------------------
Authorized Signatory
Date:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
[INDENTURE TRUSTEE], not in its individual
capacity but solely as Indenture Trustee,
by
---------------------------------------------
Authorized Signatory
Date:
A-1-3
REVERSE OF NOTE
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Floating Rate Asset Backed Senior Notes (herein called the
"Senior Notes") and the Floating Rate Asset Backed Subordinate Notes (the
"Subordinate Notes" and, together with the Senior Notes, the "Notes") are
issued under the Indenture, to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights and
obligations thereunder of the Issuer, the Indenture Trustee and the
Noteholders. The Senior Notes are subject to all terms of the Indenture.
The Senior Notes are and will be equally and ratably secured by the
collateral pledged as security therefor as provided in the Indenture.
Allocations of principal will be made among the Senior Notes and the
Subordinate Notes as provided in the Indenture. The Senior Notes are senior in
right of payment to the Subordinate Notes, all as and to the extent provided
in the Indenture.
Principal of the Senior Notes will be payable on each Quarterly Payment
Date {after the end of the Revolving Period} in an amount described in the
Indenture. "Quarterly Payment Date" means the twenty-seventh day of each
January, April, July and October, or, if any such date is not a Business Day,
the next succeeding Business Day, commencing [ ].
As provided in Section 10.1(a) of the Indenture, the Senior Notes may be
redeemed in part on the Quarterly Payment Date {on which the Revolving Period
ends (or on the Quarterly Payment Date on or immediately following the last
day of the Revolving Period, if the Revolving Period does not end on a
Quarterly Payment Date) in the event that any amount remains on deposit in the
Collateral Reinvestment Account after giving effect to all Additional
Fundings, including any Additional Fundings, on such Quarterly Payment Date.}
As described on the face hereof, the entire unpaid principal amount of
this Note shall be due and payable on the Senior Note Final Maturity Date and
the Redemption Date, if any, pursuant to Section 10.1(b) or 10.1(c) of the
Indenture. Notwithstanding the foregoing, the entire unpaid principal amount
of the Notes shall be due and payable on the date on which (i) an Event of
Default shall have occurred and be continuing and (ii) the Indenture Trustee
or the Noteholders representing not less than a majority of the Outstanding
Amount of the Notes shall have declared the Notes to be immediately due and
payable in the manner provided in Section 5.2 of the Indenture. All principal
payments of the Senior Notes shall be made pro rata to the Senior Noteholders
entitled thereto.
Interest on the Senior Notes will be payable on each Quarterly Payment
Date, commencing [ ], on the principal amount outstanding of such Notes
until the principal amount thereof is paid in full, at a rate per annum equal
to the Senior Note Rate. The "Senior Note Rate" for each Quarterly Payment
Date and the related Quarterly Interest Period shall be equal to the lesser of
(i) the weighted average of the T-▇▇▇▇ Rates for the related Quarterly
Interest Period plus [ ]% (the "Senior Note T-▇▇▇▇ Rate") and (ii) the
Student Loan Rate for such Quarterly Interest Period; provided, that,
notwithstanding the foregoing, the Senior Note
A-1-4
Rate for the first Quarterly Interest Period shall be equal to the Senior Note
T-▇▇▇▇ Rate for such Quarterly Interest Period. The "Student Loan Rate" for
any Quarterly Interest Period will equal the product of (a) the quotient
obtained by dividing (i) 365 (366 in the case of a leap year) by (ii) the
actual number of days elapsed in such Quarterly Interest Period and (b) the
percentage equivalent of a fraction, the numerator of which is equal to
Expected Interest Collections for such Quarterly Interest Period less the
Servicing Fee and the Administration Fee with respect to such Quarterly
Interest Period and the denominator of which is the aggregate principal
balance of the Notes as of the last day of such Quarterly Interest Period.
"T-▇▇▇▇ Rate" means, on any day, the weighted average per annum discount
rate (expressed on a bond equivalent basis and applied on a daily basis) for
91-day Treasury Bills sold at the most recent 91-day Treasury ▇▇▇▇ auction
prior to such date as reported by the U.S. Treasury Department. In the event
that the results of the auctions of 91-day Treasury Bills cease to be
published or reported as provided above, or that no such auction is held in a
particular week, then the "T-▇▇▇▇ Rate" in effect as a result of the last such
publication or report shall remain in effect until such time, if any, as the
results of auctions of 91- day Treasury Bills shall again be so published or
reported or such an auction is held, as the case may be. The T-▇▇▇▇ Rate shall
be subject to a Lock-In Period of six Business Days.
Any Senior Noteholders' Interest T-▇▇▇▇ Carryover that may exist on any
Quarterly Payment Date shall be payable to the Senior Noteholders on such
Quarterly Payment Date and any succeeding Quarterly Payment Dates solely out
of the funds available and required to be applied thereto pursuant to the
Administration Agreement.
Payments of interest on this Note due and payable on each Quarterly
Payment Date, and payments of interest together with the installment of
principal, if any, due and payable on each Quarterly Payment Date, to the
extent not in full payment of this Note, shall be made by wire transfer or
check mailed to the Person whose name appears as the Registered Holder of this
Note (or one or more Predecessor Notes) on the Note Register on the Record
Date, except that with respect to Notes registered on the Record Date in the
name of the nominee of the Clearing Agency, unless Definitive Notes have been
issued (initially, such nominee to be Cede & Co.), payments will be made by
wire transfer in immediately available funds to the account designated by such
nominee. Such checks shall be mailed to the Person entitled thereto at the
address of such Person as it appears on the Note Register as of the applicable
Record Date without requiring that this Note be submitted for notation of
payment, and the mailing of such check shall constitute payment of the amount
thereof regardless of whether such check is returned undelivered. Any
reduction in the principal amount of this Note (or any one or more Predecessor
Notes) effected by any payments made on any Quarterly Payment Date shall be
binding upon all future Noteholders of this Note and of any Note issued upon
the registration of transfer hereof or in exchange hereof or in lieu hereof,
whether or not noted hereon. If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Quarterly Payment Date, then the Indenture
Trustee, in the name of and on behalf of the Issuer, will notify the Person
who was the Noteholder hereof as of the Record Date preceding such Quarterly
Payment Date by notice mailed no later than five days prior to such Quarterly
Payment Date and the amount then due
A-1-5
and payable shall be payable only upon presentation and surrender of this Note
at the Indenture Trustee's Corporate Trust Office or at the office of the
Indenture Trustee's agent appointed for such purposes located in the Borough
of Manhattan, The City of [New York.]
The Issuer shall pay interest on overdue installments of interest at the
Senior Note Rate to the extent lawful.
As provided in the Indenture and subject to certain limitations set forth
therein, the transfer of this Note may be registered on the Note Register upon
surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Noteholder hereof or his attorney duly
authorized in writing, with such signature guaranteed by an "eligible
guarantor institution" meeting the requirements of the Note Registrar, which
requirements include membership or participation in Securities Transfer
Agent's Medallion Program ("STAMP") or such other "signature guarantee
program" as may be determined by the Note Registrar in addition to, or in
substitution for, STAMP (all in accordance with the Exchange Act), and such
other documents as the Indenture Trustee may require, and thereupon one or
more new Notes of authorized denominations and in the same aggregate principal
amount will be issued to the designated transferee or transferees. No service
charge will be charged for any registration of transfer or exchange of this
Note, but the transferor may be required to pay a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection with any
such registration of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case of
a Note Owner, a beneficial interest in the Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Seller, the Depositor, the Owner, the Administrator, the
Servicer, the Trustee or the Indenture Trustee on the Notes or under the
Indenture or any certificate or other writing delivered in connection
therewith, against (i) the Seller, the Depositor, the Owner, the
Administrator, the Servicer, the Indenture Trustee or the Trustee in its
individual capacity or (ii) any partner, owner, beneficiary, agent, officer,
director or employee of the Seller, Depositor, the Owner, the Administrator,
the Servicer, the Indenture Trustee or the Trustee in its individual capacity,
any holder or owner of a beneficial interest in the Issuer, the Trustee or the
Indenture Trustee or of any successor or assign of the Seller, the Depositor,
the Owner, the Administrator, the Servicer, the Indenture Trustee or the
Trustee in its individual capacity, except as any such Person may have
expressly agreed (it being understood that the Indenture Trustee and the
Trustee have no such obligations in their individual capacity) and except that
any such partner, owner or beneficiary shall be fully liable, to the extent
provided by applicable law, for any unpaid consideration for stock, unpaid
capital contribution or failure to pay any installment or call owing to such
entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case of
a Note Owner, a beneficial interest in a Note, covenants and agrees that by
accepting the benefits of the Indenture that such Noteholder or Note Owner
will not at any time institute against the Depositor, the Owner
A-1-6
or the Issuer, or join in any institution against the Depositor, the Owner or
the Issuer of, any bankruptcy, reorganization, arrangement, insolvency,
receivership or liquidation proceedings or other proceedings under any United
States Federal or state bankruptcy or similar law in connection with any
obligations relating to the Notes, the Indenture or the other Basic Documents.
The Issuer has entered into this Indenture and this Note is issued with
the intention that, for federal, state, foreign, and local income and
franchise tax and usury purposes, this Note will be treated as indebtedness of
the Owner secured by the Trust Assets. Each Noteholder, by acceptance of a
Note (and each Note Owner by acceptance of a beneficial interest in a Note)
agrees to treat this Note for federal, state, foreign and local income and
franchise tax and usury purposes as indebtedness of the Owner secured by the
Trust Estate.
Prior to the due presentment for registration of transfer of this Note,
the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture
Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture)
is registered as the owner hereof for all purposes whether or not this Note be
overdue, and neither the Issuer, the Indenture Trustee nor any such agent
shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Noteholders under the Indenture at any time by
the Issuer with the consent of the Noteholders representing a majority of the
Outstanding Amount of all Notes at the time outstanding. The Indenture also
contains provisions permitting the Noteholders representing specified
percentages of the Outstanding Amount of the Notes, on behalf of all the
Noteholders, to waive compliance by the Issuer with certain provisions of the
Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the holder of this Note (or any
one or more Predecessor Notes) shall be conclusive and binding upon such
holder and upon all future holders of this Note and of any Note issued upon
the registration of transfer hereof or in exchange hereof or in lieu hereof
whether or not notation of such consent or waiver is made upon this Note. The
Indenture also permits the Indenture Trustee to amend or waive certain terms
and conditions set forth in the Indenture without the consent of holders of
the Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances, to
merge or consolidate, subject to the rights of the Indenture Trustee and the
Noteholders under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
A-1-7
This Note shall be construed in accordance with the laws of the State of
New York, without reference to its conflict of law provisions, and the
obligations, rights and remedies of the parties hereunder and thereunder shall
be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note
at the times, place, and rate, and in the coin or currency, herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, neither [INDENTURE TRUSTEE] in its individual
capacity, [TRUSTEE] in its individual capacity, any owner of a beneficial
interest in the Issuer, nor any of their respective partners, beneficiaries,
agents, officers, directors, employees or successors or assigns shall be
personally liable for, nor shall recourse be had to any of them for, the
payment of principal of or interest on, or performance of, or omission to
perform, any of the covenants, obligations or indemnifications contained in
this Note or the Indenture; it being expressly understood that said covenants,
obligations and indemnifications have been made by the Trustee for the sole
purposes of binding the interests of the Trustee in the assets of the Issuer.
The Noteholder of this Note by the acceptance hereof agrees that, except as
expressly provided in the Basic Documents, in the case of an Event of Default
under the Indenture, the Noteholder shall have no claim against any of the
foregoing for any deficiency, loss or claim therefrom; provided, however, that
nothing contained herein shall be taken to prevent recourse to, and
enforcement against, the assets of the Issuer for any and all liabilities,
obligations and undertakings contained in the Indenture or in this Note.
A-1-8
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number
of assignee
---------------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns
and transfers unto
---------------------------------------------------------
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably
constitutes and appoints ______________________, attorney, to transfer
said Note on the books kept for registration thereof, with full power of
substitution in the premises.
Dated:
-------------
*/
---------------------------
Signature Guaranteed:
*/
---------------------------
*/ NOTICE: The signature to this assignment must correspond
with the name of the registered owner as it appears on the
face of the within Note in every particular, without
alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar,
which requirements include membership or participation in
STAMP or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in
substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
EXHIBIT A-2
TO THE INDENTURE
[FORM OF SUBORDINATE NOTE]
SUBORDINATE NOTE
SEE REVERSE FOR CERTAIN DEFINITIONS
THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER THE SECURITIES OR BLUE SKY
LAWS OF ANY STATE IN THE UNITED STATES OR ANY FOREIGN SECURITIES LAWS. [BY ITS
ACCEPTANCE OF THIS NOTE THE HOLDER HEREOF IS DEEMED TO REPRESENT TO THE SELLER
AND THE INDENTURE TRUSTEE THAT IT IS A "QUALIFIED INSTITUTIONAL BUYER" AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT ("QIB") AND IS ACQUIRING SUCH
NOTE FOR ITS OWN ACCOUNT (AND NOT FOR THE ACCOUNT OF OTHERS) OR AS A FIDUCIARY
OR AGENT FOR OTHERS (WHICH OTHERS ALSO ARE QIBS).
NO SALE, PLEDGE OR OTHER TRANSFER OF ANY SUBORDINATE NOTES MAY BE MADE BY ANY
PERSON UNLESS EITHER SUCH SALE, PLEDGE OR OTHER TRANSFER IS MADE (i) TO THE
SELLER OR (ii) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES AFTER DUE
INQUIRY IS A QIB ACTING FOR ITS OWN ACCOUNT (AND NOT FOR THE ACCOUNT OF
OTHERS) OR AS A FIDUCIARY OR AGENT FOR OTHERS (WHICH OTHERS ALSO ARE QIBS) IN
RELIANCE ON, AND TO WHOM NOTICE IS GIVEN THAT THE SALE, PLEDGE OR TRANSFER IS
BEING MADE IN RELIANCE ON, RULE 144A OR ON ANOTHER EXEMPTION WITH RESPECT TO
WHICH, IN THE CASE OF SUCH RELIANCE ON SUCH OTHER EXEMPTION, BOTH THE
PROSPECTIVE TRANSFEROR AND THE PROSPECTIVE TRANSFEREE CERTIFY TO THE INDENTURE
TRUSTEE AND THE SELLER IN WRITING THE FACTS SURROUNDING SUCH TRANSFER, WHICH
CERTIFICATION WILL BE IN FORM AND SUBSTANCE SATISFACTORY TO THE INDENTURE
TRUSTEE AND THE SELLER, AND PROVIDE A WRITTEN OPINION OF COUNSEL (WHICH WILL
NOT BE AT THE EXPENSE OF THE INDENTURE TRUSTEE OR THE SELLER) SATISFACTORY TO
EACH TO THE EFFECT THAT SUCH TRANSFER WILL NOT VIOLATE THE SECURITIES ACT. NO
SALE, PLEDGE OR OTHER TRANSFER MAY BE MADE TO ANY ONE PERSON FOR SUBORDINATE
NOTES WITH A FACE AMOUNT OF LESS THAN $250,000 AND, IN THE CASE OF ANY PERSON
ACTING ON BEHALF OF ONE OR MORE THIRD PARTIES (OTHER THAN A BANK (AS DEFINED
IN SECTION 3(A)(2) OF THE SECURITIES ACT) ACTING IN ITS FIDUCIARY CAPACITY),
FOR SUBORDINATE NOTES WITH A FACE AMOUNT OF LESS THAN $250,000 FOR EACH SUCH
THIRD PARTY.
---------------
* Insert in all Subordinate Notes other than the Company Note.
A-2-1
"NO RESALE OR OTHER TRANSFER OF THIS SUBORDINATE NOTE MAY BE MADE UNLESS THE
SELLER AND THE INDENTURE TRUSTEE SHALL HAVE RECEIVED A REPRESENTATION LETTER
OR OPINION OF COUNSEL FROM THE TRANSFEREE OF THIS SUBORDINATE NOTE, ACCEPTABLE
TO AND IN FORM AND SUBSTANCE SATISFACTORY TO THE SELLER AND THE INDENTURE
TRUSTEE, TO THE EFFECT THAT IF SUCH TRANSFEREE (OR ANY PERSON OR ENTITY FOR
WHOM SUCH TRANSFEREE IS ACTING AS AGENT OR CUSTODIAN IN CONNECTION WITH THE
ACQUISITION OF THIS SUBORDINATE NOTE) IS A PARTNERSHIP, GRANTOR TRUST OR S
CORPORATION FOR FEDERAL INCOME TAX PURPOSES (A "FLOW-THROUGH ENTITY"), ANY
SUBORDINATE NOTES OWNED BY OR ON BEHALF OF SUCH FLOW-THROUGH ENTITY WILL
REPRESENT LESS THAN 50% OF THE VALUE OF ALL THE ASSETS OWNED BY SUCH
FLOW-THROUGH ENTITY AND NO SPECIAL ALLOCATION OF INCOME, GAIN, LOSS, DEDUCTION
OR CREDIT FROM SUCH SUBORDINATE NOTES WILL BE MADE AMONG THE BENEFICIAL OWNERS
OF SUCH FLOW-THROUGH ENTITY."
NO SALE, PLEDGE OR OTHER TRANSFER OF THIS NOTE MAY BE MADE TO ANY PERSON OTHER
THAN A CITIZEN OR RESIDENT OF THE UNITED STATES, A CORPORATION, PARTNERSHIP OR
OTHER ENTITY CREATED OR ORGANIZED IN, OR UNDER THE LAWS OF, THE UNITED STATES
OR ANY POLITICAL SUBDIVISION THEREOF, OR AN ESTATE WHOSE INCOME IS SUBJECT TO
UNITED STATES FEDERAL INCOME TAX REGARDLESS OF ITS SOURCE, OR A TRUST IF A
COURT WITHIN THE UNITED STATES IS ABLE TO EXERCISE PRIMARY SUPERVISION OVER
THE ADMINISTRATION OF THE TRUST AND ONE OR MORE UNITED STATES FIDUCIARIES HAVE
THE AUTHORITY TO CONTROL ALL SUBSTANTIAL DECISIONS OF THE TRUST. BY ITS
ACCEPTANCE OF THIS NOTE THE HOLDER HEREOF IS DEEMED TO REPRESENT TO THE SELLER
AND THE INDENTURE TRUSTEE THAT IT IS A "UNITED STATES PERSON" AS DEFINED IN
7701(a)(30) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED.
SECTION 2.4 OF THE INDENTURE CONTAINS FURTHER RESTRICTIONS ON THE TRANSFER AND
RESALE OF THIS NOTE. EACH TRANSFEREE OF THIS NOTE, BY ACCEPTANCE HEREOF, IS
DEEMED TO HAVE ACCEPTED THIS NOTE SUBJECT TO THE FOREGOING RESTRICTIONS ON
TRANSFERABILITY.
EACH NOTEHOLDER OR NOTE OWNER, BY ACCEPTANCE OF A NOTE OR, IN THE CASE OF A
NOTE OWNER, A BENEFICIAL INTEREST IN A NOTE, COVENANTS AND AGREES THAT BY
ACCEPTING THE BENEFITS OF THE INDENTURE THAT SUCH NOTEHOLDER OR NOTE OWNER
WILL NOT AT ANY TIME INSTITUTE AGAINST THE SELLER, THE COMPANY OR THE ISSUER,
OR JOIN IN ANY INSTITUTION AGAINST THE SELLER, THE COMPANY OR THE ISSUER OF,
ANY BANKRUPTCY, REORGANIZATION, ARRANGEMENT, INSOLVENCY, RECEIVERSHIP OR
LIQUIDATION PROCEEDING OR OTHER PROCEEDINGS UNDER ANY UNITED STATES FEDERAL OR
STATE BANKRUPTCY OR SIMILAR LAW IN
A-2-2
CONNECTION WITH ANY OBLIGATIONS RELATING TO THE NOTES, THE INDENTURE OR THE
OTHER BASIC DOCUMENTS.]
****[THIS NOTE IS NOT TRANSFERABLE. To be inserted only in the
Depositor Note.
SECONDARY MARKET COMPANY, INC., BY ACCEPTANCE HEREOF, IS
DEEMED TO HAVE ACCEPTED THIS NOTE SUBJECT TO THE FOREGOING RESTRICTIONS ON
TRANSFERABILITY.]
-----------------------
**** To be inserted only in the Company Note.
A-2-3
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF. THIS NOTE IS NOT
GUARANTEED OR INSURED BY ANY GOVERNMENTAL AGENCY.
REGISTERED CUSIP NO.
$---------
No. R-
EFG STUDENT LOAN TRUST 1999-[ ]
FLOATING RATE ASSET BACKED SUBORDINATE NOTES
EFG Student Loan Trust 1999-[ ], a trust organized and existing under the
laws of the State of Delaware (herein referred to as the "Issuer"), for value
received, hereby promises to pay to ______________________, or registered
assigns, the principal sum of ___________________________________________
DOLLARS payable on each Quarterly Payment Date in an amount equal to the
result obtained by multiplying (i) a fraction the numerator of which is
$_________ and the denominator of which is $[ ] by (ii) the aggregate amount,
if any, payable to Noteholders on such Quarterly Payment Date in respect of
principal of the Subordinate Notes pursuant to Section 3.1 of the Indenture
dated as of[__________ 1999], between the Issuer and [INDENTURE TRUSTEE], a
New York banking corporation, as Indenture Trustee (the "Indenture Trustee")
(capitalized terms used but not defined herein shall have the meanings
ascribed thereto in the Indenture, which also references rules as to usage
that shall be applicable herein); provided, however, that no principal shall
be payable on this Note until the principal balance of the Senior Notes has
been paid in full and, provided, further, that the entire unpaid principal
amount of this Note shall be due and payable on the [ ] Quarterly Payment Date
(the "Subordinate Note Final Maturity Date") and the Redemption Date, if any,
pursuant to Section 10.1(b) or 10.1(c) of the Indenture.
The Issuer will pay interest on this Note at the rate per annum equal to
the Subordinate Note Rate (as defined on the reverse hereof), on each
Quarterly Payment Date until the principal of this Note is paid or made
available for payment, on the principal amount of this Note outstanding on the
preceding Quarterly Payment Date, after giving effect to all payments of
principal made on the preceding Quarterly Payment Date (or, in the case of the
first Quarterly Payment Date, on the Closing Date), subject to certain
limitations contained in Section 3.1 of the Indenture. Interest on this Note
will accrue for each Quarterly Payment Date from the most recent Quarterly
Payment Date on which interest has been paid to but excluding such Quarterly
Payment Date or, if no interest has yet been paid, from [ ] (each, a
"Quarterly Interest Period"). Interest on this Note will be computed on the
basis of the actual number of days elapsed in each Quarterly Interest Period
and a 365-day year (or 366-day year in the case of a leap year). Such
principal of and interest on this Note shall be paid in the manner specified
on the reverse hereof.
A-2-4
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of
this Note.
Reference is made to the further provisions of this Note set forth on the
reverse hereof, which shall have the same effect as though fully set forth on
the face of this Note.
Unless the certificate of authentication hereon has been executed by the
Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
A-2-5
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed, manually or in facsimile, as of the date set forth below.
EFG STUDENT LOAN TRUST 1999-[ ]
by [TRUSTEE], not in its individual capacity but
solely as Trustee under the Trust
Agreement,
by
----------------------------------------------
Authorized Signatory
Date:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
[INDENTURE TRUSTEE], not in
its individual capacity but
solely as Indenture Trustee,
by
------------------------------------------
Authorized Signatory
Date:
A-2-6
REVERSE OF NOTE
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Floating Rate Asset Backed Subordinate Notes (herein called
the "Subordinate Notes"), which, together with the Floating Rate Asset Backed
Senior Notes (the "Senior Notes" and, together with the Subordinate Notes,
collectively, the "Notes") are issued under the Indenture, to which Indenture
and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights and obligations thereunder of the Issuer,
the Indenture Trustee and the Noteholders. The Subordinate Notes are subject
to all terms of the Indenture.
The Subordinate Notes are and will be equally and ratably secured by the
collateral pledged as security therefor as provided in the Indenture.
Allocations of principal will be made among the Senior Notes and the
Subordinate Notes as provided in the Indenture. The Senior Notes are senior in
right of payment to the Subordinate Notes, all as and to the extent provided
in the Indenture.
Principal of the Subordinate Notes will be payable on each Quarterly
Payment Date on or after the date on which the principal balance of the Senior
Notes has been paid in its entirety, in an amount described on the face
hereof. "Quarterly Payment Date" means the twenty-seventh day of each January,
April, July and October, or, if any such date is not a Business Day, the next
succeeding Business Day, commencing [ ].
{As provided in Section 10.1(a) of the Indenture, the Subordinate Notes
may be redeemed in part on the Quarterly Payment Date on which the Revolving
Period ends (or on the Quarterly Payment Date on or immediately following the
last day of the Revolving Period, if the Revolving Period does not end on a
Quarterly Payment Date) in the event that any amount remains on deposit in the
Collateral Reinvestment Account after giving effect to all Additional
Fundings, including any Additional Fundings, on such Quarterly Payment Date.}
As described on the face hereof, the entire unpaid principal amount of
this Note shall be due and payable on the Subordinate Note Final Maturity Date
and the Redemption Date, if any, pursuant to Section 10.1(b) or 10.1(c) of the
Indenture. Notwithstanding the foregoing, the entire unpaid principal amount
of the Notes shall be due and payable on the date on which (i) an Event of
Default shall have occurred and be continuing and (ii) the Indenture Trustee
or the Noteholders representing not less than a majority of the Outstanding
Amount of the Notes shall have declared the Notes to be immediately due and
payable in the manner provided in Section 5.2 of the Indenture. All principal
payments of the Subordinate Notes shall be made pro rata to the Subordinate
Noteholders entitled thereto.
Interest on the Subordinate Notes will be payable on each Quarterly
Payment Date, commencing [__________ 1999], on the principal amount
outstanding of such Notes until the principal amount thereof is paid in full,
at a rate per annum equal to the Subordinate Note Rate. The "Subordinate Note
Rate" for each Quarterly Payment Date and the related Quarterly Interest
Period shall be equal to the lesser of (i) the weighted average of the T-▇▇▇▇
Rates for the related Quarterly Interest Period plus [ ]% (the "Subordinate
Note T-▇▇▇▇
A-2-7
Rate") and (ii) the Student Loan Rate for such Quarterly Interest Period;
provided, that, notwithstanding the foregoing, the Subordinate Note Rate for
the first Quarterly Interest Period shall be equal to the Subordinate Note
T-▇▇▇▇ Rate for such Quarterly Interest Period. The "Student Loan Rate" for
any Quarterly Interest Period will equal the product of (a) the quotient
obtained by dividing (i) 365 (366 in the case of a leap year) by (ii) the
actual number of days elapsed in such Quarterly Interest Period and (b) the
percentage equivalent of a fraction, the numerator of which is equal to
Expected Interest Collections for such Quarterly Interest Period less the
Servicing Fee and the Administration Fee with respect to such Quarterly
Interest Period and the denominator of which is the aggregate principal
balance of the Notes as of the last day of such Quarterly Interest Period.
"T-▇▇▇▇ Rate" means, on any day, the weighted average per annum discount
rate (expressed on a bond equivalent basis and applied on a daily basis) for
91-day Treasury Bills sold at the most recent 91-day Treasury ▇▇▇▇ auction
prior to such date as reported by the U.S. Treasury Department. In the event
that the results of the auctions of 91-day Treasury Bills cease to be
published or reported as provided above, or that no such auction is held in a
particular week, then the "T-▇▇▇▇ Rate" in effect as a result of the last such
publication or report shall remain in effect until such time, if any, as the
results of auctions of 91- day Treasury Bills shall again be so published or
reported or such an auction is held, as the case may be. The T-▇▇▇▇ Rate shall
be subject to a Lock-In Period of six Business Days.
Any Subordinate Noteholders' Interest T-▇▇▇▇ Carryover that may exist on
any Quarterly Payment Date shall be payable to the Subordinate Noteholders on
such Quarterly Payment Date and any succeeding Quarterly Payment Dates solely
out of the funds available and required to be applied thereto pursuant to the
Administration Agreement.
Payments of interest on this Note due and payable on each Quarterly
Payment Date, and payments of interest together with the installment of
principal, if any, due and payable on each Quarterly Payment Date, to the
extent not in full payment of this Note, shall be made by wire transfer or
check mailed to the Person whose name appears as the Registered Holder of this
Note (or one or more Predecessor Notes) on the Note Register on the Record
Date, except that with respect to Notes registered on the Record Date in the
name of the nominee of the Clearing Agency, unless Definitive Notes have been
issued (initially, such nominee to be Cede & Co.), payments will be made by
wire transfer in immediately available funds to the account designated by such
nominee. Such checks shall be mailed to the Person entitled thereto at the
address of such Person as it appears on the Note Register as of the applicable
Record Date without requiring that this Note be submitted for notation of
payment, and the mailing of such check shall constitute payment of the amount
thereof regardless of whether such check is returned undelivered. Any
reduction in the principal amount of this Note (or any one or more Predecessor
Notes) effected by any payments made on any Quarterly Payment Date shall be
binding upon all future Noteholders of this Note and of any Note issued upon
the registration of transfer hereof or in exchange hereof or in lieu hereof,
whether or not noted hereon. If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Quarterly Payment Date, then the Indenture
Trustee, in the name of and on behalf of the Issuer, will notify the Person
who was
A-2-8
the Noteholder hereof as of the Record Date preceding such Quarterly
Payment Date by notice mailed no later than five days prior to such Quarterly
Payment Date and the amount then due and payable shall be payable only upon
presentation and surrender of this Note at the Indenture Trustee's Corporate
Trust Office or at the office of the Indenture Trustee's agent appointed for
such purposes located in [ ].
The Issuer shall pay interest on overdue installments of interest at the
Subordinate Note Rate to the extent lawful.
As provided in the Indenture and subject to certain limitations set forth
therein, the transfer of this Note may be registered on the Note Register upon
surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Noteholder hereof or his attorney duly
authorized in writing, with such signature guaranteed by an "eligible
guarantor institution" meeting the requirements of the Note Registrar, which
requirements include membership or participation in Securities Transfer
Agent's Medallion Program ("STAMP") or such other "signature guarantee
program" as may be determined by the Note Registrar in addition to, or in
substitution for, STAMP (all in accordance with the Exchange Act), and such
other documents as the Indenture Trustee may require, and thereupon one or
more new Notes of authorized denominations and in the same aggregate principal
amount will be issued to the designated transferee or transferees. No service
charge will be charged for any registration of transfer or exchange of this
Note, but the transferor may be required to pay a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection with any
such registration of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case of
a Note Owner, a beneficial interest in the Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Seller, the Depositor, the Owner, the Administrator, the
Servicer, the Trustee or the Indenture Trustee on the Notes or under the
Indenture or any certificate or other writing delivered in connection
therewith, against (i) the Seller, the Depositor, the Owner, the
Administrator, the Servicer, the Indenture Trustee or the Trustee in its
individual capacity or (ii) any partner, owner, beneficiary, agent, officer,
director or employee of the Seller, the Depositor, the Owner, the
Administrator, the Servicer, the Indenture Trustee or the Trustee in its
individual capacity, any holder or owner of a beneficial interest in the
Issuer, the Trustee or the Indenture Trustee or of any successor or assign of
the Seller, the Depositor, the Owner, the Administrator, the Servicer, the
Indenture Trustee or the Trustee in its individual capacity, except as any
such Person may have expressly agreed (it being understood that the Indenture
Trustee and the Trustee have no such obligations in their individual capacity)
and except that any such partner, owner or beneficiary shall be fully liable,
to the extent provided by applicable law, for any unpaid consideration for
stock, unpaid capital contribution or failure to pay any installment or call
owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case of
a Note Owner, a beneficial interest in a Note, covenants and agrees that by
accepting the benefits of
A-2-9
the Indenture that such Noteholder or Note Owner will not at any time
institute against the Depositor, the Owner or the Issuer, or join in any
institution against the Depositor, the Owner or the Issuer of, any bankruptcy,
reorganization, arrangement, insolvency, receivership or liquidation
proceedings or other proceedings under any United States Federal or state
bankruptcy or similar law in connection with any obligations relating to the
Notes, the Indenture or the other Basic Documents.
The Issuer has entered into this Indenture and this Note is issued with
the intention that, for federal, state, foreign, and local income and
franchise tax and usury purposes, this Note will be treated as indebtedness of
the Owner secured by the Trust Assets. Each Noteholder, by acceptance of a
Note (and each Note Owner by acceptance of a beneficial interest in a Note)
agrees to treat this Note for federal, state, foreign and local income and
franchise tax and usury purposes as indebtedness of the Owner secured by the
Trust Estate.
Prior to the due presentment for registration of transfer of this Note,
the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture
Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture)
is registered as the owner hereof for all purposes whether or not this Note be
overdue, and neither the Issuer, the Indenture Trustee nor any such agent
shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Noteholders under the Indenture at any time by
the Issuer with the consent of the Noteholders representing a majority of the
Outstanding Amount of all Notes at the time outstanding. The Indenture also
contains provisions permitting the Noteholders representing specified
percentages of the Outstanding Amount of the Notes, on behalf of all the
Noteholders, to waive compliance by the Issuer with certain provisions of the
Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the holder of this Note (or any
one or more Predecessor Notes) shall be conclusive and binding upon such
holder and upon all future holders of this Note and of any Note issued upon
the registration of transfer hereof or in exchange hereof or in lieu hereof
whether or not notation of such consent or waiver is made upon this Note. The
Indenture also permits the Indenture Trustee to amend or waive certain terms
and conditions set forth in the Indenture without the consent of holders of
the Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances, to
merge or consolidate, subject to the rights of the Indenture Trustee and the
Noteholders under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
A-2-10
This Note shall be construed in accordance with the laws of the State of
New York, without reference to its conflict of law provisions, and the
obligations, rights and remedies of the parties hereunder and thereunder shall
be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note
at the times, place, and rate, and in the coin or currency, herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, neither [INDENTURE TRUSTEE] in its individual
capacity, [TRUSTEE] in its individual capacity, any owner of a beneficial
interest in the Issuer, nor any of their respective partners, beneficiaries,
agents, officers, directors, employees or successors or assigns shall be
personally liable for, nor shall recourse be had to any of them for, the
payment of principal of or interest on, or performance of, or omission to
perform, any of the covenants, obligations or indemnifications contained in
this Note or the Indenture; it being expressly understood that said covenants,
obligations and indemnifications have been made by the Trustee for the sole
purposes of binding the interests of the Trustee in the assets of the Issuer.
The Noteholder of this Note by the acceptance hereof agrees that, except as
expressly provided in the Basic Documents, in the case of an Event of Default
under the Indenture, the Noteholder shall have no claim against any of the
foregoing for any deficiency, loss or claim therefrom; provided, however, that
nothing contained herein shall be taken to prevent recourse to, and
enforcement against, the assets of the Issuer for any and all liabilities,
obligations and undertakings contained in the Indenture or in this Note.
A-2-11
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number
of assignee
____________________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns
and transfers unto
____________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably
constitutes and appoints ______________________, attorney, to transfer
said Note on the books kept for registration thereof, with full power of
substitution in the premises.
Dated:
*/
---------------------------
Signature Guaranteed:
*/
---------------------------
------------------------
*/ NOTICE: The signature to this assignment must correspond
with the name of the registered owner as it appears on the
face of the within Note in every particular, without
alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar,
which requirements include membership or participation in
STAMP or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in
substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
EXHIBIT B
TO THE INDENTURE
Senior Note Depository Agreement
---------------------------------
B-1
EXHIBIT C
TO THE INDENTURE
FORM OF TRANSFEROR CERTIFICATE
[DATE]
[ ]
[ ]
[INDENTURE TRUSTEE]
Re: EFG Student Loan Trust 1999-[ ]
Floating Rate Asset Backed Subordinate Notes
--------------------------------------------
Ladies and Gentlemen:
In connection with our disposition of the above-referenced Floating Rate
Asset Backed Subordinate Notes (the "Notes") we certify that (a) we understand
that the Notes have not been registered under the Securities Act of 1933, as
amended (the "Act"), and are being transferred by us in a transaction that is
exempt from the registration requirements of the Act and (b) we have not
offered or sold any Notes to, or solicited offers to buy any Notes from, any
person, or otherwise approached or negotiated with any person with respect
thereto, in a manner that would be deemed, or taken any other action which
would result in, a violation of Section 5 of the Act.
Very truly yours,
[NAME OF TRANSFEROR]
By:
--------------------------------------------
Name:
------------------------------------------
Title:
-----------------------------------------
C-1
EXHIBIT D
FORM OF INVESTMENT LETTER
[ ]
[ ]
[INDENTURE TRUSTEE]
Ladies and Gentlemen:
In connection with our proposed purchase of $_________ aggregate
principal amount of Floating Rate Asset Backed Subordinate Notes (the
"Securities") of EFG Student Loan Trust 1999-[ ] (the "Issuer"), we confirm
that:
1. We understand that the Securities have not been registered under
the Securities Act of 1933, as amended (the "Securities Act"), and may
not be sold except as permitted in the following sentence. We understand
and agree, on our own behalf and on behalf of any accounts for which we
are acting as hereinafter stated, (x) that such Securities are being
offered only in a transaction not involving any public offering within
the meaning of the Securities Act and (y) that such Securities may be
resold, pledged or transferred only (i) to [ ] (the "Depositor") or (ii)
to a person whom the transferor of the Securities reasonably believes
after due inquiry is a QIB acting for its own account (and not for the
account of others) or as a fiduciary or agent for others (which others
also are QIBs) and in reliance on, and to whom notice is given that the
sale, pledge or transfer is being made in reliance on, Rule 144A or on
another exemption from registration under the Securities Act; provided,
that, in the event that reliance is made on an exemption from
registration under the Securities Act other than Rule 144A, the
prospective transferee shall have provided a written opinion of counsel
(which will not be at the expense of the Indenture Trustee or the
Depositor) satisfactory to each to the effect that such transfer will not
violate the Securities Act. We will notify any purchaser of the Security
from us of the above resale restrictions, if then applicable. We further
understand that in connection with any transfer of the Security by us
that the Depositor and the Indenture Trustee may request, and if so
requested we will furnish such certificates and other information as they
may reasonably require to confirm that any such transfer complies with
the foregoing restrictions. We understand that no sale, pledge or other
transfer may be made to any one person of Securities with a face amount
of less than $250,000 and, in the case of any person acting on behalf of
one or more third parties (other than a bank (as defined in Section
3(a)((2) of the Securities Act) acting in its fiduciary capacity), of
Securities with a face amount of less than $250,000 for each such third
party.
D-1
2. We are a "qualified institutional buyer" as defined under Rule
144A under the Securities Act and are acquiring the Security for our own
account (and not for the account of others) or as a fiduciary or agent
for others (which others also are "qualified institutional buyers"). We
are familiar with Rule 144A under the Securities Act and are aware that
the seller of the Security and other parties intend to rely on the
statements made herein and the exemption from the registration
requirements of the Securities Act provided by Rule 144A or (if, as set
forth above, appropriate certifications are made and an opinion of
counsel given) another exemption from registration under the Securities
Act.
3. We are a citizen or resident of the United States, a corporation,
partnership or other entity created or organized in, or under the laws
of, the United States or any political subdivision thereof, or an estate
whose income is subject to United States federal income tax regardless of
its source, or a trust if a court within the United States is able to
exercise primary supervision over the administration of the trust and one
or more Untied States fiduciaries have the authority to control all
substantial decisions of the trust.
4. With respect to any purchaser that is a partnership, grantor trust
or S corporation ("Flow-Through Entity") for federal income tax purposes,
less than 50% of the value of the Flow-Through Entity is attributable to
the Securities and such Flow-Through Entity makes no special allocation
of any item of income, gain, loss, or credit attributable to the
Securities to one or more of beneficial owners of such Flow-Through
Entity.
5. We understand that the Depositor, the Issuer, [UNDERWRITER] and
others will rely upon the truth and accuracy of the foregoing
acknowledgments, representations and agreements, and we agree that if any
of the acknowledgments, representations and warranties deemed to have
been made by us by our purchase of the Securities, for our own account or
for one or more accounts as to each of which we exercise sole investment
discretion, are no longer accurate, we shall promptly notify the
Depositor and [UNDERWRITER].
D-2
6. You are entitled to rely upon this letter and you are irrevocably
authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceeding or official inquiry with
respect to the matters covered hereby.
Very truly yours,
[NAME OF PURCHASER]
By:
--------------------------------
Name:
-------------------------------
Title:
------------------------------
Date:
-------------------------------
D-3
CROSS-REFERENCE TABLE*
TIA Indenture
Section Section
------- -------
310(a)(1) .................................. 6.11
(a)(2) .................................. 6.11
(a)(3) .................................. 6.10
(a)(4) .................................. N.A.**
(a)(4) .................................. 6.11
(b) .................................. 6.8;
.................................. 6.10; 6.11
(c) .................................. N.A.
311(a) .................................. 6.11
(b) .................................. 6.11
(c) .................................. N.A.
312(a) .................................. 7.1;
.................................. 7.2(a)
(b) .................................. 7.2(b)
(c) .................................. 7.2(c)
313(a) .................................. 6.6
(b) .................................. 6.6
(c) .................................. 11.5
(d) .................................. 6.6
314(a) .................................. 3.9; 7.3
(b) .................................. 3.6
(c) .................................. 2.9; 4.1
.................................. 11.1
(d) .................................. 2.9;
.................................. 11.1
(e) .................................. 11.1
(f) .................................. 3.9
315(a) .................................. 6.1
(b) .................................. 6.5
(c) .................................. 6.1
(d) .................................. 6.1
(e) .................................. 5.13
316(a)(1)(A) 5.11
(a)(1)(B) 5.12
(a)(2) .................................. N.A.
-----------------------
* Note: This Cross Reference Table shall not, for any
purpose, be deemed to be part of the Indenture.
** N.A. means Not Applicable.
D-4
(b) .................................. 5.7
(c) .................................. 1.1
317(a) .................................. 5.3
(b) .................................. 3.3
318(a) .................................. 11.7
D-5