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INDENTURE
between
FIRST UNION STUDENT LOAN TRUST 1997-1,
as Issuer
and
BANKERS TRUST COMPANY,
not in its individual capacity but
solely as Indenture Trustee
Dated as of June 1, 1997
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TABLE OF CONTENTS
GRANTING CLAUSE
ARTICLE I --DEFINITIONS AND USAGE
SECTION 1.01. DEFINITIONS AND USAGE
SECTION 1.02. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT
ARTICLE II -- THE NOTES
SECTION 2.01. FORM
SECTION 2.02. EXECUTION, AUTHENTICATION AND DELIVERY
SECTION 2.03. TEMPORARY NOTES
SECTION 2.04. REGISTRATION; REGISTRATION OF TRANSFER AND EXCHANGE
SECTION 2.05. MUTILATED, DESTROYED, LOST OR STOLEN NOTES
SECTION 2.06. PERSONS DEEMED OWNER
SECTION 2.07. PAYMENT OF PRINCIPAL AND INTEREST; DEFAULTED INTEREST;
NOTEHOLDERS' INTEREST INDEX CARRYOVER
SECTION 2.08. CANCELLATION
SECTION 2.09. RELEASE OF COLLATERAL
SECTION 2.10. BOOK-ENTRY NOTES
SECTION 2.11. NOTICES TO CLEARING AGENCY
SECTION 2.12. DEFINITIVE NOTES
ARTICLE III --COVENANTS
SECTION 3.01. PAYMENT TO NOTEHOLDERS
SECTION 3.02. MAINTENANCE OF OFFICE OR AGENCY
SECTION 3.03. MONEY FOR PAYMENTS TO BE HELD IN TRUST
SECTION 3.04. EXISTENCE
SECTION 3.05. PROTECTION OF INDENTURE TRUST ESTATE
SECTION 3.06. OPINIONS AS TO INDENTURE TRUST ESTATE
SECTION 3.07. PERFORMANCE OF OBLIGATIONS; SERVICING OF FINANCED STUDENT
LOANS
SECTION 3.08. NEGATIVE COVENANTS
SECTION 3.09. ANNUAL STATEMENT AS TO COMPLIANCE
SECTION 3.10. ISSUER MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS
SECTION 3.11. SUCCESSOR OR TRANSFEREE
SECTION 3.12. NO OTHER BUSINESS
SECTION 3.13. NO BORROWING
SECTION 3.14. OBLIGATIONS OF MASTER SERVICER AND ADMINISTRATOR
SECTION 3.15. GUARANTEES, LOANS, ADVANCES AND OTHER LIABILITIES
SECTION 3.16. CAPITAL EXPENDITURES
SECTION 3.17. RESTRICTED PAYMENTS
SECTION 3.18. NOTICE OF EVENTS OF DEFAULT
SECTION 3.19. FURTHER INSTRUMENTS AND ACTS
ARTICLE IV -- SATISFACTION AND DISCHARGE
SECTION 4.01. SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 4.02. APPLICATION OF TRUST MONEY
SECTION 4.03. REPAYMENT OF MONEYS HELD BY PAYING AGENT
SECTION 4.04. AUCTION OF FINANCED STUDENT LOANS
ARTICLE V -- REMEDIES
SECTION 5.01. EVENTS OF DEFAULT
SECTION 5.02. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT
SECTION 5.03. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT
BY INDENTURE TRUSTEE
SECTION 5.04. REMEDIES; PRIORITIES
SECTION 5.05. OPTIONAL PRESERVATION OF THE FINANCED STUDENT LOANS
SECTION 5.06. LIMITATION OF SUITS
SECTION 5.07. UNCONDITIONAL RIGHTS OF NOTEHOLDERS TO RECEIVE PRINCIPAL
AND INTEREST
SECTION 5.08. RESTORATION OF RIGHTS AND REMEDIES
SECTION 5.09. RIGHTS AND REMEDIES CUMULATIVE
SECTION 5.10. DELAY OR OMISSION NOT A WAIVER
SECTION 5.11. CONTROL BY NOTEHOLDERS
SECTION 5.12. WAIVER OF PAST DEFAULTS
SECTION 5.13. UNDERTAKING FOR COSTS
SECTION 5.14. WAIVER OF STAY OR EXTENSION LAWS
SECTION 5.15. ACTION ON NOTES
SECTION 5.16. PERFORMANCE AND ENFORCEMENT OF CERTAIN OBLIGATIONS
ARTICLE VI --THE INDENTURE TRUSTEE
SECTION 6.01. DUTIES OF THE INDENTURE TRUSTEE
SECTION 6.02. RIGHTS OF INDENTURE TRUSTEE
SECTION 6.03. INDIVIDUAL RIGHTS OF INDENTURE TRUSTEE
SECTION 6.04. INDENTURE TRUSTEE'S DISCLAIMER
SECTION 6.05. NOTICE OF DEFAULTS
SECTION 6.06. REPORTS BY INDENTURE TRUSTEE TO NOTEHOLDERS
SECTION 6.07. COMPENSATION AND INDEMNITY
SECTION 6.08. REPLACEMENT OF INDENTURE TRUSTEE
SECTION 6.09. SUCCESSOR INDENTURE TRUSTEE BY MERGER
SECTION 6.10. APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE
SECTION 6.11. ELIGIBILITY; DISQUALIFICATION
ARTICLE VII --NOTEHOLDERS' LISTS AND REPORTS
SECTION 7.01. ISSUER TO FURNISH INDENTURE TRUSTEE NAMES AND ADDRESSES
OF NOTEHOLDERS
SECTION 7.02. PRESERVATION OF INFORMATION; COMMUNICATIONS TO NOTEHOLDERS
SECTION 7.03. REPORTS BY ISSUER
SECTION 7.04. PROVISIONS OF THIS ARTICLE SUPERSEDED BY TRUST INDENTURE ACT
ARTICLE VIII -- ACCOUNTS, DISBURSEMENTS AND RELEASES
SECTION 8.01. COLLECTION OF MONEY
SECTION 8.02. TRUST ACCOUNTS
SECTION 8.03. GENERAL PROVISIONS REGARDING ACCOUNTS
SECTION 8.04. RELEASE OF INDENTURE TRUST ESTATE
SECTION 8.05. OPINION OF COUNSEL
ARTICLE IX -- SUPPLEMENTAL INDENTURES
SECTION 9.01. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF NOTEHOLDERS
SECTION 9.02. SUPPLEMENTAL INDENTURES WITH CONSENT OF NOTEHOLDERS
SECTION 9.03. EXECUTION OF SUPPLEMENTAL INDENTURES
SECTION 9.04. EFFECT OF SUPPLEMENTAL INDENTURE
SECTION 9.05. CONFORMITY WITH TRUST INDENTURE ACT
SECTION 9.06. REFERENCE IN NOTES TO SUPPLEMENTAL INDENTURES
ARTICLE X -- MISCELLANEOUS
SECTION 10.01. COMPLIANCE CERTIFICATES AND OPINIONS, ETC.
SECTION 10.02. FORM OF DOCUMENTS DELIVERED TO INDENTURE TRUSTEE
SECTION 10.03. ACTS OF NOTEHOLDERS
SECTION 10.04. NOTICES, ETC., TO INDENTURE TRUSTEE, ISSUER AND
RATING AGENCIES
SECTION 10.05. NOTICES TO NOTEHOLDERS; WAIVER
SECTION 10.06. ALTERNATE PAYMENT AND NOTICE PROVISIONS
SECTION 10.07. CONFLICT WITH TRUST INDENTURE ACT
SECTION 10.08. EFFECT OF HEADINGS AND TABLE OF CONTENTS
SECTION 10.09. SUCCESSORS AND ASSIGNS
SECTION 10.10. SEPARABILITY
SECTION 10.11. BENEFITS OF INDENTURE
SECTION 10.12. LEGAL HOLIDAYS
SECTION 10.13. GOVERNING LAW
SECTION 10.14. COUNTERPARTS
SECTION 10.15. RECORDING OF INDENTURE
SECTION 10.16. TRUST OBLIGATIONS
SECTION 10.17. NO PETITION
SECTION 10.18. INSPECTION
Appendix A:.......Definitions and Usage
Schedule A:.......Schedule of Financed Student Loans
Schedule B:.......Schedule of Financed Student Loan Files
Exhibit A:........Form of Class A-1 Note
Exhibit B:........Form of Class A-2 Note
Exhibit C:........Form of Note Depository Agreement
INDENTURE, dated as of June 1, 1997, between FIRST UNION STUDENT LOAN TRUST
1997-1, a Delaware business trust (the "Issuer"), and BANKERS TRUST COMPANY, a
New York banking corporation, 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 Notes, Class A-1 (the "Class A-1 Notes") and Class A-2 (the "Class A-2
Notes and, together with the Class A-1 Notes, the "Notes"):
GRANTING CLAUSE
The Issuer (and, with respect to the Financed Student Loans, the Eligible
Lender 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 Financed Student Loans, and all obligations of the Obligors
thereunder including all moneys paid thereunder on or after the Cutoff Date;
(b) the Sale Agreement, including the right of the Issuer to cause the
Seller to repurchase Financed Student Loans from the Issuer under circumstances
described therein;
(c) the Master Servicing Agreement, including the right of the Master
Servicer to purchase Financed Student Loans from the Issuer under 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 Financed
Student Loans;
(e) all funds on deposit from time to time in the Trust Accounts, including
the amounts contained in the Reserve Account and the Collection Account, 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, as
described herein, equally and ratably without prejudice, priority or distinction
among the Notes of each class, 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 1.01. 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 hereto, which also contains rules as to usage
that shall be applicable herein.
SECTION 1.02. 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.
ARTICLE II
THE NOTES
SECTION 2.01. FORM. The Notes, together with the Indenture Trustee's
certificate of authentication, shall be initially issued in book-entry form and
represented by certificates to be held on behalf of the initial Clearing Agency
in substantially the forms set forth in Exhibit A and Exhibit B, 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 the 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, if issued, 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
Class A-1 Notes, set forth in Exhibit A, and the Class A-2 Notes, as set forth
in Exhibit B, are part of the terms of this Indenture.
SECTION 2.02. 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
Notes for original issue in an aggregate principal amount of $----------- in the
case of the Class A-1 Notes and $---------- in the case of the Class A-2 Notes.
The aggregate principal amount of Notes outstanding at any time may not exceed
such amounts except as provided in Section 2.05.
Each Note shall be dated the date of its authentication. The Notes shall be
issuable as registered Notes in the minimum denomination of $1,000 and in
integral multiples of $1,000 in excess thereof.
No Note shall be entitled to any benefit under this Indenture or be valid
or obligatory for any purpose, unless there appears on such Note a certificate
of authentication substantially in the form provided for herein executed by the
Indenture Trustee by the manual signature of one of its authorized signatories,
and such certificate upon any Note shall be conclusive evidence, and the only
evidence, that such Note has been duly authenticated and delivered hereunder.
SECTION 2.03. 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 3.02, 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 2.04. REGISTRATION; REGISTRATION OF TRANSFER AND EXCHANGE. The
Issuer shall cause to be kept a register (the "Note Register") in which, subject
to such reasonable regulations as it may prescribe, the Issuer shall provide for
the registration of Notes and the registration of transfers of Notes. The
Indenture Trustee shall be "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.
Upon surrender for registration of transfer of any Note at the office or
agency of the Issuer to be maintained as provided in Section 3.02, 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 of the same class in any
authorized denominations and a like aggregate principal amount.
At the option of the Noteholder, Notes may be exchanged for other Notes of
the same class in any authorized denominations and a like aggregate principal
amount, upon surrender of the Notes to be exchanged at such office or agency.
Whenever any Notes are so surrendered for exchange, the Issuer shall execute,
and the Indenture Trustee shall authenticate and the Noteholder shall obtain
from the Indenture Trustee, the Notes which the Noteholder making the exchange
is entitled to receive.
All Notes of either class 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
of such class 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 Indenture Trustee duly executed by the
Noteholder thereof or such Noteholder's attorney duly authorized in writing,
with such signature guaranteed by an "eligible guarantor institution" meeting
the requirements of the Note Registrar, which requirements 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.
Each transferee of a Note shall be required to represent, and each
transferee of a beneficial interest in a Book-Entry Note shall be deemed to
represent, either (a) that it is not a Benefit Plan Investor and is not using
the assets of a Benefit Plan Investor to acquire such Note or interest, or (b)
if such transferee is a Benefit Plan Investor or a Person investing the assets
of a Benefit Plan Investor, that the use of the assets of such Benefit Plan
Investor to acquire such Note or interest does not and will not constitute or
result in a non-exempt prohibited transaction in violation of Section 406 of
ERISA, Section 4975 of the Code or Similar Law. Each Note shall bear a legend
referring to the foregoing restrictions contained in this paragraph.
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 2.03 or 9.06 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 2.05. MUTILATED, DESTROYED, LOST OR STOLEN NOTES. If (i) any
mutilated Note is surrendered to the Indenture Trustee, or the Indenture Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Note and (ii) there is delivered to the Indenture Trustee such security or
indemnity as may be required by it to hold the Issuer and the Indenture Trustee
harmless, then, in the absence of notice to the Issuer, the Note Registrar or
the Indenture Trustee that such Note has been acquired by a bona fide purchaser,
the Issuer shall execute and upon its request the Indenture Trustee shall
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Note, a replacement Note of the same class; PROVIDED,
HOWEVER, that if any such destroyed, lost or stolen Note, but not a mutilated
Note, shall have become or within 15 days shall be due and payable, 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
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 of the same class 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 2.06. 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 and interest
(including any Noteholders' Interest Index Carryover) 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 2.07. PAYMENT OF PRINCIPAL AND INTEREST; DEFAULTED INTEREST. (a)
The Notes shall accrue interest at the applicable Note Interest Rate as provided
in the forms of Notes set forth in Exhibit A and Exhibit B, and such interest
shall be payable on each Distribution Date as specified therein, subject to
Section 3.01. Any installment of interest (including any Noteholders' Interest
Index Carryover) or principal payable on any Note which is punctually paid or
duly provided for by the Issuer on the applicable Distribution Date shall be
paid to the Person in whose name such Note (or one or more Predecessor Notes) is
registered on the Record Date 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 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 Distribution Date or on the applicable
Note Final Maturity Date which shall be payable as provided below. The funds
represented by any such checks returned undelivered shall be held in accordance
with Section 3.03.
(b) The principal of the Class A-1 Notes and the Class A-2 Notes shall be
payable on each applicable Distribution Date in the order of priority provided
under Section 4.05(c) of the Master Servicing Agreement. 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 5.02. All principal payments on the Notes of either class
shall be made pro rata to the Noteholders entitled thereto. The Indenture
Trustee shall notify the Person in whose name a Note is registered at the close
of business on the Record Date preceding the Distribution Date on which the
Issuer expects that the final installment of principal of and interest (and any
Noteholders' Interest Index Carryover) on such Note will be paid. Such notice
shall be mailed or transmitted by facsimile prior to such final Distribution
Date and shall specify that such final installment will be payable only upon
presentation and surrender of such Note and shall specify the place where such
Note may be presented and surrendered for payment of such installment.
(c) If the Issuer defaults on 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 Interest 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 each Noteholder a notice that
states the special record date, the payment date and the amount of defaulted
interest to be paid.
(d) The Noteholders' Interest Index Carryover for each Distribution Date
for either class of Notes (including all unpaid Noteholders' Interest Index
Carryover for prior Distribution Dates and interest accrued thereon at the
applicable Note Interest Rate for each applicable Interest Period) shall be
payable on each Distribution Date solely to the extent of funds available to be
distributed to Noteholders by the Indenture Trustee as Noteholder Interest Index
Carryover pursuant to Section 4.05(c)(x), 4.06(e)(B) or 4.06(f) of the Master
Servicing Agreement. Any Noteholders' Interest Index Carryover payable on any
Distribution 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 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 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 3.03.
SECTION 2.08. 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 cancelled 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 cancelled by the Indenture Trustee.
No Notes shall be authenticated in lieu of or in exchange for any Notes
cancelled as provided in this Section, except as expressly permitted by this
Indenture. All cancelled 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 2.09. RELEASE OF COLLATERAL . Subject to Section 10.01, the
Indenture Trustee shall release property from the lien of this Indenture only
upon receipt of an Issuer Request accompanied by an Officer's Certificate of the
Issuer, an Opinion of Counsel and Independent Certificates in accordance with
TIA 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 Notes, upon original issuance, will be
issued in the form of typewritten Notes representing the Book-Entry Notes, to be
delivered to The Depository Trust Company, the initial Clearing Agency, by, or
on behalf of, the Issuer. Such Notes shall initially be registered on the Note
Register in the name of Cede & Co., the nominee of the initial Clearing Agency,
and no Note Owner will receive a Definitive Note (as defined below) representing
such Note Owner's interest in such Note, except as provided in Section 2.12.
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 Notes) as the authorized representative
of the Note Owners;
(iii) to the extent that the provisions of this Section conflict with
any other provisions of this Indenture, the provisions of this Section
shall control;
(iv) the rights of Note Owners shall be exercised only through the
Clearing Agency and shall be limited to those established by law and
agreements between such Note Owners and the Clearing Agency and/or the
Clearing Agency Participants pursuant to the Note Depository Agreements.
Unless and until Definitive Notes are issued pursuant to Section 2.12, 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 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 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 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 Master Servicer Default or an
Administrator Default, Note Owners representing beneficial interests aggregating
at least a majority of the Outstanding Amount of the Notes advise the Clearing
Agency (which shall then notify the Indenture Trustee) in writing that the
continuation of a book-entry system through the Clearing Agency is no longer in
the best interests of the Note Owners, then the Indenture Trustee will cause the
Clearing Agency to notify all Note Owners, through the Clearing Agency, of the
occurrence of any such event and of the availability of Definitive Notes to Note
Owners requesting the same. Upon surrender to the Indenture Trustee of the
typewritten Notes representing the Book-Entry Notes by the Clearing Agency,
accompanied by registration instructions, the Issuer shall execute and the
Indenture Trustee shall authenticate the Definitive Notes in accordance with the
instructions of the Clearing Agency. None of the Issuer, the Note Registrar or
the Indenture Trustee shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying on,
such instructions. Upon the issuance of Definitive Notes, the Indenture Trustee
shall recognize the holders of the Definitive Notes as Noteholders.
ARTICLE III
COVENANTS
SECTION 3.01. PAYMENT TO NOTEHOLDERS. The Issuer will duly and punctually
pay the principal of (subject to the parenthetical in the following sentence),
interest on and any Noteholders' Interest Index Carryover (but only to the
extent provided in Sections 2.07(d) and 8.02(c)) with respect to the Notes in
accordance with the terms of the Notes and this Indenture and the priorities set
forth or referred to herein. Without limiting the foregoing, subject to Section
8.02(c), the Issuer will cause to be distributed that portion of the amounts on
deposit in the Trust Accounts on a Distribution Date (other than any Eligible
Investments deposited therein that will mature on the Business Day preceding a
subsequent Distribution Date), which the Noteholders are entitled to receive
pursuant to the Master Servicing Agreement to Noteholders in accordance with the
Master Servicing Agreement. Amounts properly withheld under the Code by any
Person from a payment to any Noteholder of interest (including any Noteholders'
Interest Index Carryover) or principal shall be considered as having been paid
by the Issuer to such Noteholder for all purposes of this Indenture.
SECTION 3.02. 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 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 3.03. MONEY FOR PAYMENTS TO BE HELD IN TRUST. As provided in
Section 8.02(a) and (b), all payments of amounts due and payable with respect to
any Notes that are to be made from amounts distributed from the Collection
Account or Reserve Account pursuant to Section 8.02(c) shall be made on behalf
of the Issuer by the Indenture Trustee or by another Paying Agent, and no
amounts so distributed from the Collection Account for payments of Notes shall
be paid over to the Issuer except as provided in this Section.
On or before the Business Day next preceding each Distribution 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 and/or Certificates, 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 the Indenture Trustee as
Paying Agent hereby so agrees), subject to the provisions of this Section, that
such Paying Agent will:
(i) hold all sums held by it for the payment of amounts due with
respect to the Notes in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise disposed
of as herein provided and pay such sums to such Persons as herein provided;
(ii) give the Indenture Trustee notice of any default by the Issuer of
which it has actual knowledge (or any other obligor upon the Notes) in the
making of any payment required to be made with respect to the Notes;
(iii) at any time during the continuance of any such default, upon the
written request of the Indenture Trustee, forthwith pay to the Indenture
Trustee all sums so held in trust by such Paying Agent;
(iv) immediately resign as a Paying Agent and forthwith pay to the
Indenture Trustee all sums held by it in trust for the payment of Notes if
at any time it ceases to meet the standards required to be met by a Paying
Agent at the time of its appointment; and
(v) comply with all requirements of the Code with respect to the
withholding from any payments made by it on any Notes of any applicable
withholding taxes imposed thereon and with respect to any applicable
reporting requirements in connection therewith.
The Issuer may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, by Issuer Order direct
any Paying Agent to pay to the Indenture Trustee all sums held in trust by such
Paying Agent, such sums to be held by the Indenture Trustee upon the same trusts
as those upon which the sums were held by such Paying Agent; and upon such
payment by any Paying Agent to the Indenture Trustee, such Paying Agent shall be
released from all further liability with respect to such money.
Subject to applicable laws with respect to escheat of funds, any money held
by the Indenture Trustee or any Paying Agent in trust for the payment of any
amount due with respect to any Note and remaining unclaimed for two years after
such amount has become due and payable shall be discharged from such trust and
be paid to the Issuer on Issuer Request; and the Noteholder thereof shall
thereafter, as an unsecured general creditor, look only to the Issuer for
payment thereof (but only to the extent of the amounts so paid to the Issuer),
and all liability of the Indenture Trustee or such Paying Agent with respect to
such trust money shall thereupon cease; PROVIDED, HOWEVER, that the Indenture
Trustee or such Paying Agent, before being required to make any such repayment,
shall at the expense and direction of the Issuer cause to be published once, in
a newspaper published in the English language, customarily published on each
Business Day and of general circulation in the City of New York, notice that
such money remains unclaimed and that, after a date specified therein, which
shall not be less than 30 days from the date of such publication, any unclaimed
balance of such money then remaining will be repaid to the Issuer. The Indenture
Trustee shall also adopt and employ, at the expense of the Issuer, any other
reasonable means of notification of such repayment (including mailing notice of
such repayment to Noteholders whose 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 3.04. 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 3.05. 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;
(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.
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 3.06. 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 April 30 in each calendar year, beginning in 1998, 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 April 30 in the following calendar year.
SECTION 3.07. PERFORMANCE OF OBLIGATIONS; SERVICING OF FINANCED STUDENT
LOANS. (a) The Issuer will not take any action and will use its best efforts not
to permit any action to be taken by others that would release any Person from
any of such Person's material covenants or obligations under any instrument or
agreement included in the Indenture Trust Estate or that would result in the
amendment, hypothecation, subordination, termination or discharge of, or impair
the validity or effectiveness of, any such instrument or agreement, except as
expressly provided in this Indenture, the Sale Agreement, Master Servicing
Agreement or such other instrument or agreement.
(b) The Issuer may contract with other Persons to assist it in performing
its duties under this Indenture, and any performance of such duties by a Person
identified to the Indenture Trustee in an Officer's Certificate of the Issuer
shall be deemed to be action taken by the Issuer. Initially, the Issuer has
contracted with the Master Servicer and the Administrator to assist the Issuer
in performing its duties under this Indenture.
(c) The Issuer will punctually perform and observe 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 Master
Servicing Agreement and Administration 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 acting at the direction of 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 Master
Servicer Default or an Administrator Default under the Master Servicing
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 Master Servicer Default
shall arise from the failure of the Master Servicer to perform any of its duties
or obligations under the Master Servicing Agreement or an Administrator Default
shall arise from the failure of the Administrator to perform any of its duties
or obligations under the Master Servicing Agreement or the Administration
Agreement, as the case may be, with respect to the Financed 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 Master Servicer of its rights and powers, or to the Administrator of its
rights and powers, pursuant to Section 7.01 of the Master Servicing Agreement,
the Issuer shall appoint a successor servicer (the "Successor Master Servicer"),
or a successor administrator (the "Successor Administrator"), and such Successor
Master Servicer or Administrator, as the case may be, shall accept its
appointment by a written assumption in a form acceptable to the Indenture
Trustee. In the event that a Successor Master Servicer or Administrator has not
been appointed and accepted its appointment at the time when the Master Servicer
or Administrator, as the case may be, ceases to act as Master Servicer or
Administrator, as the case may be, the Indenture Trustee without further action
shall automatically be appointed the Successor Master Servicer or Administrator,
as the case may be. The Indenture Trustee may resign as the Master Servicer or
the Administrator 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 or a new administrator 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 Master
Servicer, or otherwise service the Financed 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 or a new administrator as the Successor Master
Servicer or Administrator under the Master Servicing Agreement. Any Successor
Master Servicer or Administrator, as the case may be, other than the Indenture
Trustee shall (i) be an established institution (A) that satisfies any
requirements of the Higher Education Act applicable to servicers and (B) whose
regular business includes the servicing or administration of student loans and
(ii) enter into a master servicing agreement or an administration agreement with
the Issuer having substantially the same provisions as the provisions of the
Master Servicing Agreement applicable to the Master Servicer or the provisions
of the Master Servicing Agreement and the Administration Agreement applicable to
the Administrator. If within 30 days after the delivery of the notice referred
to above, the Issuer shall not have obtained such a new servicer or
administrator, as the case may be, or if the Indenture Trustee is legally unable
or unwilling so to act, the Indenture Trustee may appoint, or may petition a
court of competent jurisdiction to appoint, a Successor Master Servicer or
Administrator; 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 Master Servicing Agreement, and in
accordance with Section 7.02 of the Master Servicing Agreement, the Issuer shall
enter into an agreement with such successor for the servicing or administration
of the Financed 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 Master Servicer's duties as servicer with respect to
the Financed Student Loans, or the Administrator's duties with respect to the
Issuer and the Financed Student Loans, as the case may be, 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 Master Servicer or the
Administrator, as the case may be, and the servicing or administration of the
Financed Student Loans. In case the Indenture Trustee shall become successor to
the Master Servicer or the Administrator, as the case may be, under the Master
Servicing Agreement, the Indenture Trustee shall be entitled to appoint as
Master Servicer or as Administrator, as the case may be, 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 Master Servicer or the Administrator in accordance
with the terms hereof.
(f) Upon any termination of the Master Servicer's or Administrator's rights
and powers pursuant to the Master Servicing Agreement, as the case may be, the
Issuer shall promptly notify the Indenture Trustee. As soon as a Successor
Master Servicer or a Successor Administrator is appointed, the Issuer shall
notify the Indenture Trustee of such appointment, specifying in such notice the
name and address of such Successor Master Servicer or such Successor
Administrator.
(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 this Indenture or the Master
Servicing Agreement, or waive timely performance or observance by the Master
Servicer, the Administrator, the Seller, the Issuer or the Eligible Lender
Trustee under the Master Servicing Agreement; PROVIDED, HOWEVER, that no such
amendment shall (i) increase or reduce in any manner the amount of, or
accelerate or delay the timing of, distributions that are required to be made
for the benefit of the Noteholders, or (ii) reduce the aforesaid percentage of
the Notes which are required to consent to any such amendment, without the
consent of the Noteholders of all the Outstanding Notes. If any such amendment,
modification, supplement or waiver shall be so consented to by the Indenture
Trustee or such Noteholders, the Issuer agrees, to execute and deliver in
furtherance of such amendment, modification, supplement or waiver, in its own
name and at its own expense, such agreements, instruments, consents and other
documents as the Indenture Trustee may deem necessary or appropriate in the
circumstances.
SECTION 3.08. 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;
(ii) claim any credit on, or make any deduction from the principal or
interest (including any Noteholders' Interest Index 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 3.09. 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 1997), an Officer's Certificate of the
Issuer stating that:
(i) a review of the activities of the Issuer during such year and of
performance under this Indenture has been made under such Authorized
Officer's supervision; and
(ii) to the best of such Authorized Officer's 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:
(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 Index Carryover 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 Federal or
[--------------] state tax consequence to the Issuer, any Noteholder or any
Certificateholder;
(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
Officer's Certificate of the Issuer and an Opinion of Counsel each stating
that such consolidation or merger and such supplemental indenture comply
with this Article III and that all conditions precedent herein provided for
relating to such transaction have been complied with (including any filing
required by the Exchange Act).
(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 Index 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,
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 Federal or
[--------------] state tax consequence to the Issuer, any Noteholder or any
Certificateholder;
(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
Officer's Certificate of the Issuer and an Opinion of Counsel each stating
that such conveyance or transfer and such supplemental indenture comply
with this Article III and that all conditions precedent herein provided for
relating to such transaction have been complied with (including any filing
required by the Exchange Act).
SECTION 3.11. SUCCESSOR OR TRANSFEREE. (a) Upon any consolidation or merger
of the Issuer in accordance with Section 3.10(a), the Person formed by or
surviving such consolidation or merger (if other than the Issuer) shall succeed
to, and be substituted for, and may exercise every right and power of, the
Issuer under this Indenture with the same effect as if such Person had been
named as the Issuer herein.
(b) [Except as expressly provided in Section 6.07,] upon a conveyance or
transfer of all the assets and properties of the Issuer pursuant to Section
3.10(b), First Union Student Loan Trust 1997-1 will be released from every
covenant and agreement of this Indenture to be observed or performed on the part
of the Issuer with respect to the Notes immediately upon the delivery by the
Issuer of written notice to the Indenture Trustee stating that First Union
Student Loan Trust 1997-1 is to be so released.
SECTION 3.12. NO OTHER BUSINESS. The Issuer shall not engage in any
business other than (i) acquiring, holding and managing the Financed Student
Loans and the other assets of the Trust Estate and proceeds therefrom, (ii)
issuing the Certificates, the Excess Distribution Certificate and the Notes,
(iii) making payments thereon and (iv) engaging in other activities that are
necessary, suitable or convenient to accomplish the foregoing or are incidental
thereto or connected therewith or that are contemplated or required by the Basic
Documents.
SECTION 3.13. NO BORROWING. The Issuer shall not issue, incur, assume,
guarantee or otherwise become liable, directly or indirectly, for any
indebtedness for borrowed money except for the Notes.
SECTION 3.14. OBLIGATIONS OF MASTER SERVICER AND ADMINISTRATOR. The Issuer
shall cause the Master Servicer to comply with Sections 3.08(a), 3.09(a) and
(b), 3.10 and 3.11 of the Master Servicing Agreement and the Administrator to
comply with Sections 3.08(b) and (c), 3.09(a) and (c), 3.10 and 4.07 thereof.
SECTION 3.15. GUARANTEES, LOANS, ADVANCES AND OTHER LIABILITIES. Except as
contemplated by the Master Servicing Agreement 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 Eligible Lender Trustee or any owner of a beneficial interest in
the Issuer or otherwise with respect to any ownership or equity interest or
security in or of the Issuer or to the Master Servicer or the Administrator,
(ii) redeem, purchase, retire or otherwise acquire for value any such ownership
or equity interest or security or (iii) set aside or otherwise segregate any
amounts for any such purpose; PROVIDED, HOWEVER, that the Issuer may make, or
cause to be made, distributions to the Master Servicer, the Eligible Lender
Trustee, the Indenture Trustee, the Certificateholders, the Noteholders, the
Administrator and the Seller as contemplated by, and to the extent funds are
available for such purpose under, the Sale Agreement and the Master Servicing
Agreement. The Issuer will not, directly or indirectly, make payments to or
distributions from the Collection 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 of its obligations
under the Sale Agreement, the Master Servicer of its obligations under the
Master Servicing Agreement or the Administrator of its obligations under the
Master 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 Officer's Certificate of
the Issuer of any event which with the giving of notice and the lapse of time
would become an Event of Default under Section 5.01(iii), its status and what
action the Issuer is taking or proposes to take with respect thereto.
SECTION 3.19. FURTHER INSTRUMENTS AND ACTS. Upon request of the Indenture
Trustee, the Issuer will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.01. 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 Index
Carryover) thereon, (iv) Sections 3.03, 3.04, 3.05, 3.08, 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 6.07 and the
obligations of the Indenture Trustee under Section 4.02) 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) 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 2.05 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 3.03) have been
delivered to the Indenture Trustee for cancellation; or
(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
Officer's Certificate of the Issuer, an Opinion of Counsel and (if
required by the TIA or the Indenture Trustee) an Independent
Certificate from a firm of certified public accountants, each meeting
the applicable requirements of Section 10.01(a) and, subject to
Section 10.02, each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this
Indenture have been complied with.
SECTION 4.02. APPLICATION OF TRUST MONEY. All moneys deposited with the
Indenture Trustee pursuant to Section 4.01 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 Index Carryover); but such moneys
need not be segregated from other funds except to the extent required herein or
in the Master Servicing Agreement or required by law.
SECTION 4.03. REPAYMENT OF MONEYS 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 3.03 and thereupon such Paying Agent shall be released from all further
liability with respect to such moneys.
SECTION 4.04. AUCTION OF FINANCED STUDENT LOANS. Any Financed Student Loans
remaining in the Trust as of the end of the Collection Period immediately
following the Distribution Date on which the Pool Balance is less than or equal
to 10% of the Initial Pool Balance will be offered for sale by the Administrator
(pursuant to the Administration Agreement) on behalf of Indenture Trustee as of
the Auction Distribution Date. First Union, its affiliates, and unrelated third
parties may offer bids to purchase such Financed Student Loans as of such
Auction Distribution Date. If at least two bids are received, the Indenture
Trustee will solicit and resolicit new bids from all participating bidders until
only one bid remains or the remaining bidders decline to resubmit bids. The
Indenture Trustee will accept the highest of such remaining bids if it is equal
to or in excess of the higher of the Minimum Purchase Amount and the fair market
value of such Financed Student Loans as of the end of the Collection Period
immediately preceding the Auction Distribution Date. If at least two bids are
not received or the highest bid after the resolicitation process is completed is
not equal to or in excess of the higher of the Minimum Purchase Amount and the
fair market value of the Financed Student Loans, the Indenture Trustee will not
consummate such sale. The Indenture Trustee may consult, and, at the direction
of the Seller, shall consult, with a financial advisor to determine if the fair
market value of the Financed Student Loans has been offered. The net proceeds of
any such sale will be applied in the order of priority set forth in Section
5.04(b). If the sale is not consummated in accordance with the foregoing, the
Indenture Trustee may, but shall not be under any obligation to, solicit bids to
purchase the Financed Student Loans on future Distribution Dates upon terms
similar to those described above.
ARTICLE V
REMEDIES
SECTION 5.01. 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 2.07(d) and 8.02(c), any Noteholders'
Interest Index 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 or any
installment 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 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 representation or warranty and requiring it to be
remedied and stating that such notice is a notice of Default
hereunder; or
(iv) the filing of a decree or order for relief by a court having
jurisdiction in the premises in respect of the Issuer or any
substantial part of the Indenture Trust Estate in an involuntary case
under any applicable Federal or state bankruptcy, insolvency or other
similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar
official of the Issuer or for any substantial part of the Indenture
Trust Estate, or ordering the winding-up or liquidation of the
Issuer's affairs, and such decree or order shall remain unstayed and
in effect for a period of 60 consecutive days; or
(v) the commencement by the Issuer of a voluntary case under any
applicable Federal or state bankruptcy, insolvency or other similar
law now or hereafter in effect, or the consent by the Issuer to the
entry of an order for relief in an involuntary case under any such
law, or the consent by the Issuer to the appointment or taking
possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Issuer or for any substantial
part of the Indenture Trust Estate, or the making by the Issuer of any
general assignment for the benefit of creditors, or the failure by the
Issuer generally to pay its debts as such debts become due, or the
taking of action by the Issuer in furtherance of any of the foregoing.
SECTION 5.02. 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 acting at the direction of 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
(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 5.03. 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
2.07(d) and 8.02(c), any Noteholders' Interest Index 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 Index 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 Index Carryover), at the rate specified in
Section 2.07 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 5.04, in its discretion, and
shall, as directed by the Noteholders of the Notes representing not less than a
majority of the Outstanding Amount of the Notes, 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, or as so directed, to protect
and enforce any such rights, whether for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the exercise of any power
granted herein, or to enforce any other proper remedy or legal or equitable
right vested in the Indenture Trustee by this Indenture or by law.
(d) In case there shall be pending, relative to the Issuer or any other
obligor upon the Notes or any Person having or claiming an ownership interest in
the Indenture Trust Estate, Proceedings under Title 11 of the United States Code
or any other applicable Federal or state bankruptcy, insolvency or other similar
law, or in case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or
taken possession of the Issuer or its property or such other obligor or Person,
or in case of any other comparable judicial Proceedings relative to the Issuer
or other obligor upon the Notes, or to the creditors or property of the Issuer
or such other obligor, the Indenture Trustee, irrespective of whether the
principal of any Notes shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Indenture Trustee shall
have made any demand pursuant to the provisions of this Section, shall be
entitled and empowered, by intervention in such proceedings or otherwise:
(i) to file and prove a claim or claims for the whole amount of
principal and interest (including any Noteholders' Interest Index
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 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 5.04. 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 5.05):
(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 5.01(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 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 clause
(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
6.07;
SECOND: to the Master Servicer, the Servicing Fee due on such
Distribution Date and all prior unpaid Servicing Fees;
THIRD: to the Administrator for amounts due under Section 3 of
the Administration Agreement;
FOURTH: to the Eligible Lender Trustee for amounts due under
Section 8.01 of the Trust Agreement;
FIFTH: to the Noteholders, the Noteholders' Interest Distribution
Amount ratably, without preference or priority of any kind, according
to the amounts payable on the Notes in respect of Noteholders'
Interest Distribution Amount;
SIXTH: to the Class A-1 Noteholders, the Noteholders' Principal
Distribution Amount, ratably, without preference or priority of any
kind, according to the amounts payable on the Class A-1 Notes for
principal; and then after the Class A-1 Notes have been paid in full,
to the Class A-2 Noteholders, the Noteholders' Principal Distribution
Amount, ratably, without preference or priority of any kind, according
to the amounts payable on the Class A-2 Notes for principal;
SEVENTH: to the Eligible Lender Trustee on behalf of the
Certificateholders, the Certificateholders' Interest Distribution
Amount, for distribution by the Eligible Lender Trustee pursuant to
the Trust Agreement, ratably, without preference or priority of any
kind, according to the amounts payable in respect of
Certificateholders' Interest Distribution Amount;
EIGHTH:, to the Eligible Lender Trustee on behalf of the
Certificateholders, the Certificateholder's Principal Distribution
Amount, for distribution by the Eligible Lender Trustee pursuant to
the Trust Agreement, ratably, without preference or priority of any
kind, according to the amounts payable in respect of the Certificate
Balance;
NINTH: to the Reserve Account, the amount, if any, necessary to
reinstate the balance of the Reserve Account to the Specified Reserve
Account Balance;
[TENTH: to the Master Servicer, the aggregate unpaid amount, if
any, of the Excess Servicing Fee;]
ELEVENTH: to the Noteholders, the aggregate unpaid amount of the
Noteholders' Interest Index Carryover, if any, ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Notes in respect of Noteholders' Interest Index
Carryover;
TWELFTH: to the Eligible Lender Trustee on behalf of the
Certificateholders, the aggregate unpaid amount of the
Certificateholders' Interest Index Carryover, if any, for distribution
by the Eligible Lender trustee pursuant to the Trust Agreement
ratably, without preference or priority of any kind, according to the
amounts payable in respect of Certificateholders' Interest Index
Carryover; and
THIRTEENTH: to the Reserve Account, any remaining amounts after
application of clauses FIRST through TWELFTH above.
The Indenture Trustee may fix a record date and payment date for any
payment to Noteholders pursuant to this Section. At least 15 days before such
record date, the Issuer shall mail to each Noteholder and the Indenture Trustee
a notice that states the record date, the payment date and the amount to be
paid.
SECTION 5.05. OPTIONAL PRESERVATION OF THE FINANCED STUDENT LOANS. If the
Notes have been declared to be due and payable under Section 5.02 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 Index Carryover) on the Notes, and the Indenture Trustee shall take
such desire into account when determining whether or not to maintain possession
of the Indenture Trust Estate. In determining whether to maintain possession of
the Indenture Trust Estate, the Indenture Trustee may, but need not, obtain and
rely upon an opinion of an Independent investment banking or accounting firm of
national reputation as to the feasibility of such proposed action and as to the
sufficiency of the Indenture Trust Estate for such purpose.
SECTION 5.06. 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 indemnity reasonably satisfactory to it 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.
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 5.07. UNCONDITIONAL RIGHTS OF NOTEHOLDERS TO RECEIVE PRINCIPAL AND
INTEREST. Notwithstanding any other provisions in this Indenture, any Noteholder
shall have the right, which is absolute and unconditional, to receive payment of
the principal of and interest, if any, on such Note on or after the respective
due dates thereof expressed in such Note or in this Indenture and to institute
suit for the enforcement of any such payment, and such right shall not be
impaired without the consent of such Noteholder.
SECTION 5.08. 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 5.09. 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;
(ii) subject to the express terms of Section 5.04, any direction to
the Indenture Trustee to sell or liquidate the Indenture Trust Estate shall
be by the Noteholders of not less than 100% of the Outstanding Amount of
the Notes;
(iii) if the conditions set forth in Section 5.05 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 6.01, 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 5.02,
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 2.07(d) and 8.02(c), any Noteholders' Interest Index
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 Index Carryover) on any Note on or after the respective
due dates expressed in such Note and in this Indenture.
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 5.04(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 Administrator and the Master Servicer, as applicable, of each
of their obligations to the Issuer under or in connection with the Sale
Agreement in the case of the Seller, the Master Servicing Agreement in the case
of the Master Servicer and the Master Servicing Agreement and the Administration
Agreement in the case of the Administrator in accordance with the terms thereof,
and to exercise any and all rights, remedies, powers and privileges lawfully
available to the Issuer under or in connection with the Sale Agreement, the
Master 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 Administrator or the Master
Servicer thereunder and the institution of legal or administrative actions or
proceedings to compel or secure performance by the Seller, the Administrator or
the Master Servicer of each of their obligations under the Sale Agreement,
Master Servicing Agreement and the Administration Agreement.
(b) If an Event of Default has occurred and is continuing, the Indenture
Trustee may, and at the direction (which direction shall be in writing 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
Administrator or the Master Servicer under or in connection with the Sale
Agreement, Master Servicing Agreement and the Administration Agreement,
including the right or power to take any action to compel or secure performance
or observance by the Seller, the Administrator or the Master Servicer of each of
their obligations to the Issuer thereunder and to give any consent, request,
notice, direction, approval, extension or waiver under the Sale Agreement,
Master Servicing Agreement and the Administration Agreement and any right of the
Issuer to take such action shall be suspended.
ARTICLE VI
THE INDENTURE TRUSTEE
SECTION 6.01. 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 the certificates and opinions to determine whether or
not they conform to the requirements of this Indenture.
(c) The Indenture Trustee may not be relieved from liability for its own
negligent action, its own 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 Section 5.11.
(d) Every provision of this Indenture that in any way relates to the
Indenture Trustee is subject to paragraphs (a), (b), (c) and (g) of this
Section.
(e) The Indenture Trustee shall not be liable for interest on any money
received by it except as the Indenture Trustee may agree in writing with the
Issuer.
(f) Money held in trust by the Indenture Trustee need not be segregated
from other funds except to the extent required by law or the terms of this
Indenture or the Master 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) The Indenture Trustee, in such capacity, shall have no obligation to
administer, service or collect the Financed Student Loans or to maintain,
monitor or otherwise supervise the administration, servicing or collection of
the Financed Student Loans.
(i) In the event that the Indenture Trustee is the Paying Agent or the Note
Registrar, the rights and protections afforded to the Indenture Trustee pursuant
to this Indenture shall also be afforded to the Indenture Trustee in its
capacity as Paying Agent or Note Registrar.
(j) Every provision of this Indenture relating to the conduct or affecting
the liability of or affording protection to the Indenture Trustee shall be
subject to the provisions of this Section and to the provisions of the TIA.
SECTION 6.02. 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, it may
require an Officer's Certificate of the Issuer or an Opinion of Counsel. The
Indenture Trustee shall not be liable for any action it takes or omits to take
in good faith in reliance on such Officer's Certificate or Opinion of Counsel.
(c) The Indenture Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents or
attorneys or a custodian or nominee, and the Indenture Trustee shall not be
responsible for any misconduct or negligence on the part of, or for the
supervision of, any such agent, attorney, custodian or nominee appointed with
due care by it hereunder.
(d) The Indenture Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers; PROVIDED, HOWEVER, that the Indenture Trustee's conduct does
not constitute willful misconduct, negligence or bad faith.
(e) The Indenture Trustee may consult with counsel, and the advice or
opinion of counsel with respect to legal matters relating to this Indenture and
the Notes shall be full and complete authorization and protection from liability
in respect to any action taken, omitted or suffered by it hereunder in good
faith and in accordance with the advice or opinion of such counsel.
SECTION 6.03. 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 6.04. 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 6.05. NOTICE OF DEFAULTS. If a Default or an Event of 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 to each Noteholder 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 Index
Carryover) on any Note, the Indenture Trustee may withhold the notice if and so
long as a committee of its Responsible Officers in good faith determines that
withholding the notice is in the interests of Noteholders. Except as provided in
the first sentence of this Section, in no event shall the Indenture Trustee be
deemed to have knowledge of a Default or an Event of Default.
SECTION 6.06. REPORTS BY INDENTURE TRUSTEE TO NOTEHOLDERS. The Indenture
Trustee shall deliver to each Noteholder (and to each Person who was a
Noteholder at any time during the applicable calendar year) such information as
may be 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 shall mail to
each Noteholder a brief report as of such December 31 that complies with TIA
section 313(a), if required by said section. The Indenture Trustee shall also
comply with TIA section 313(b). A copy of each such report required pursuant to
TIA sections 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 6.07. COMPENSATION AND INDEMNITY. The Issuer shall cause the
Administrator to pay to the Indenture Trustee reasonable compensation for its
services (including the reasonable compensation of its counsel and agents) in
accordance with a separate agreement between the Administrator and the Indenture
Trustee and shall cause the Administrator to reimburse the Indenture Trustee for
all reasonable out-of-pocket expenses incurred or made by it as provided in such
separate agreement. 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 (which, for the purposes of
this Section 6.07, shall include its directors, officers, employees and agents)
against any and all loss, liability or expense of defending against any claim or
liability (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 be
liable for the 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 as may be attributable to its own willful
misconduct, negligence or bad faith. This indemnity shall survive the
termination of this Indenture or the Trust and the resignation or removal of the
Indenture Trustee.
When the Indenture Trustee incurs expenses after the occurrence of a
Default specified in Section 5.01(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 6.08. 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 6.08. 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 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 successor Indenture Trustee shall deliver a written acceptance of its
appointment to the retiring Indenture Trustee and to the Issuer. Thereupon the
resignation or removal of the retiring Indenture Trustee shall become effective,
and the successor Indenture Trustee shall have all the rights, powers and duties
of the Indenture Trustee under this Indenture. The successor Indenture Trustee
shall mail a notice of its succession to Noteholders. The retiring Indenture
Trustee shall promptly transfer all property held by it as Indenture Trustee to
the successor Indenture Trustee.
If a successor Indenture Trustee does not take office within 60 days after
the retiring Indenture Trustee resigns or is removed, the retiring Indenture
Trustee, the Issuer or the Noteholders of a majority in Outstanding Amount of
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 6.07
shall continue for the benefit of the retiring Indenture Trustee.
SECTION 6.09. SUCCESSOR INDENTURE TRUSTEE BY MERGER. If the Indenture
Trustee consolidates with, merges or converts into, or transfers all or
substantially all its corporate trust business or assets to, another corporation
or banking association, the resulting, surviving or transferee corporation
without any further act shall be the successor Indenture Trustee; provided that
such corporation or banking association shall be otherwise qualified and
eligible under Section 6.11. The Indenture Trustee shall provide the 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 6.08 hereof.
(b) Every separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred or imposed
upon the Indenture Trustee shall be conferred or imposed upon and exercised
or performed by the Indenture Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Indenture
Trustee joining in such act), except to the extent that under any law of
any jurisdiction in which any particular act or acts are to be performed
the Indenture Trustee shall be incompetent or unqualified to perform such
act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Indenture Trust Estate or any
portion thereof in any such jurisdiction) shall be exercised and performed
singly by such separate trustee or co-trustee, but solely at the direction
of the Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by reason of any
act or omission of any other trustee hereunder; and
(iii) the Indenture Trustee may at any time accept the resignation of
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 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 section 310(a), and shall be subject
to supervision or examination by Federal or State authority. 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 its equivalent) or better by the Rating
Agencies. If such entity publishes reports of condition at least annually,
pursuant to law or to the requirements of said supervising or examining
authority, then for the purposes of this Section 6.11, the combined capital and
surplus of such entity shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
the Indenture Trustee shall cease to be eligible in accordance with the
provisions of this Section 6.11, it shall resign immediately in the manner and
with the effect hereinafter specified in this Article VI.
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
SECTION 7.01. 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 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 7.02. 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 7.01 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 7.01 upon receipt of a new list so furnished.
(b) Noteholders may communicate pursuant to TIA section 312(b) with other
Noteholders with respect to their rights under this Indenture or under the
Notes. Upon receipt by the Indenture Trustee of any request by a Noteholder to
receive a copy of the current list of Noteholders (whether or not made pursuant
to TIA section 312(b)), the Indenture Trustee shall promptly notify the
Administrator thereof by providing to the Administrator a copy of such request
and a copy of the list of Noteholders produced in response thereto.
(c) The Issuer, the Indenture Trustee and the Note Registrar shall have the
protection of TIA section 312(c).
(d) The Indenture Trustee shall furnish to the Noteholders promptly upon
receipt of a written request therefor, duplicates or copies of all reports,
notices, requests, demands, certificates, financial statements and any other
instruments furnished to the Indenture Trustee under the Basic Documents.
SECTION 7.03. REPORTS BY ISSUER. (a) The Issuer shall:
(i) 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;
(ii) 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
(iii) supply to the Indenture Trustee (and the Indenture Trustee shall
transmit by mail to all Noteholders as described in TIA section 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
7.03(a) as may be required by rules and regulations prescribed from time to
time by the Commission.
(b) Unless the Issuer otherwise determines, the fiscal year of the Issuer
shall end on December 31 of each year.
SECTION 7.04. PROVISIONS OF THIS ARTICLE SUPERSEDED BY TRUST INDENTURE ACT.
The Provisions of this Article VII are all intended to facilitate compliance
with the requirements of the TIA as in effect on the date hereof, and shall be
deemed superseded by any modifications or changes to such requirements (to
expand such requirements to eliminate such requirements or otherwise) effected
by amendment to the TIA, by regulation, by rule or by judicial or administrative
decision. The provisions of this Article VII shall not at any time impose upon
any Person obligated under this Article VII any greater reporting obligation
with respect to the matters covered by this Article VII than the reporting
obligation with respect to such matters imposed upon such Person by the TIA as
in effect with respect to such time.
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
SECTION 8.01. 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 Noteholders
pursuant to the Master Servicing Agreement as provided in this Indenture. Except
as otherwise expressly provided in this Indenture, if any default occurs in the
making of any payment or performance under any agreement or instrument that is
part of the 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 8.02. 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 and the
Certificateholders, the Trust Accounts as provided in Section 4.01 of the Master
Servicing Agreement.
(b) On or before the Business Day preceding each Distribution Date, all
Available Funds with respect to the preceding Collection Period will be
deposited in the Collection Account as provided in Section 4.02 of the Master
Servicing Agreement. On or before each Distribution Date, the Noteholders'
Distribution Amount and any Noteholders' Interest Index Carryover with respect
to the preceding Collection Period will be distributed from the Trust Accounts
to the Indenture Trustee (or any other Paying Agent) on behalf of the
Noteholders as provided in Sections 4.05 and 4.06 of the Master Servicing
Agreement.
(c) On each Distribution Date, the Indenture Trustee (or any other Paying
Agent) shall distribute all amounts received by it on behalf of Noteholders
pursuant to paragraph (b) above to Noteholders in respect of the Notes to the
extent of amounts due and unpaid on the Notes for principal, interest and any
Noteholders' Interest Index Carryover in the following amounts and in the order
of priority provided under Section 4.05(c) of the Master Servicing Agreement
(except as otherwise provided in Section 5.04(b)).
SECTION 8.03. 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
4.01(b) of the Master Servicing 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.
(b) Subject to Section 6.01(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. Eastern Time (or such other time as may be agreed by the Issuer and
Indenture Trustee or such Person maintaining the Trust Accounts) 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 5.02, 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 5.05 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 8.04. RELEASE OF INDENTURE TRUST ESTATE. (a) Subject to the payment
of its fees and expenses pursuant to Section 6.07, 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 6.07 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 8.04(b) only upon receipt of an Issuer
Request accompanied by an Officer's Certificate of the Issuer, an Opinion of
Counsel and (if required by the TIA) Independent Certificates in accordance with
TIA sections 314(c) and 314(d)(1) meeting the applicable requirements of Section
10.01.
(c) Each Noteholder, by the acceptance of a Note, acknowledges that from
time to time the Indenture Trustee may release the lien of this Indenture on any
Financed Student Loans to be sold to the Seller or Master Servicer and as to
which the Seller or Master Servicer will simultaneously deposit the aggregate
Purchase Amounts thereof into the Collection Account in accordance with, and
subject to the terms and conditions of, Section 4.04 of the Master Servicing
Agreement, and each Noteholder consents to such release.
SECTION 8.05. 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 8.04(a), accompanied by copies of any instruments involved,
and the Indenture Trustee shall also require, except in connection with any
action contemplated by Section 8.04(c), 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 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 9.01. 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
(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 9.02. SUPPLEMENTAL INDENTURES WITH CONSENT OF NOTEHOLDERS. The
Issuer and the Indenture Trustee, when authorized by an Issuer Order, also may,
upon the satisfaction of the Rating Agency Condition 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 Index Carryover) on any Note,
or reduce the principal amount thereof or the interest rate thereon, change
the provisions of this Indenture relating to the application of collections
on, or the proceeds of the sale of, the Indenture Trust Estate to payment
of principal of or interest (including any Noteholders' Interest Index
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;
(ii) reduce the percentage of the Outstanding Amount of the Notes, the
consent of the Noteholders of which is required for any such supplemental
indenture, or the consent of the Noteholders of which is required for any
waiver of compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences provided for in this Indenture;
(iii) modify or alter the provisions of the proviso to the definition
of the term "Outstanding";
(iv) reduce the percentage of the Outstanding Amount of the Notes
required to direct the Indenture Trustee to direct the Issuer to sell or
liquidate the Indenture Trust Estate pursuant to Section 5.04;
(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 Index Carryover) or principal due on
any Note on any Distribution Date (including the calculation of any of the
individual components of such calculation); 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 expressly 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.
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 Issuer shall mail to the
Noteholders of the Notes to which such amendment or supplemental indenture
relates a notice setting forth in general terms the substance, or a copy, of
such supplemental indenture. Any failure of the Issuer 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 9.03. EXECUTION OF SUPPLEMENTAL INDENTURES. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modifications thereby of the trusts created
by this Indenture, the Indenture Trustee shall be entitled to receive, and
subject to Sections 6.01 and 6.02, 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 9.04. EFFECT OF SUPPLEMENTAL INDENTURE. Upon the execution of any
supplemental indenture pursuant to the provisions hereof, this Indenture shall
be and be deemed to be modified and amended in accordance therewith with respect
to the Notes affected thereby, and the respective rights, limitations of rights,
obligations, duties, liabilities and immunities under this Indenture of the
Indenture Trustee, the Issuer and the Noteholders shall thereafter be
determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.
SECTION 9.05. 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 9.06. 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 determines, 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
MISCELLANEOUS
SECTION 10.01. COMPLIANCE CERTIFICATES AND OPINIONS, ETC. (a) Upon any
application or request by the Issuer to the Indenture Trustee to take any action
under any provision of this Indenture, the Issuer shall furnish to the Indenture
Trustee (i) an Officer's Certificate of the Issuer stating that all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with, (ii) an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent, if any, have been
complied with and (iii) (if required by the TIA) an Independent Certificate from
a firm of certified public accountants meeting the applicable requirements of
this Section, except that, in the case of any such application or request as to
which the furnishing of such documents is specifically required by any provision
of this Indenture, no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
(i) a statement that each signatory of such certificate or opinion has
read or has caused to be read such covenant or condition and the
definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(iii) a statement that, in the opinion of each such signatory, such
signatory has made such examination or investigation as is necessary to
enable such signatory to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each such signatory,
such condition or covenant has been complied with.
(b) Subject to 10.01(c) below:
(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 10.01(a) or elsewhere in this Indenture, furnish to the Indenture
Trustee an Officer's Certificate of the Issuer certifying or stating the
opinion of each person signing such certificate as to the fair value
(within 90 days of such deposit) to the Issuer of the Collateral or other
property or securities to be so deposited.
(ii) Whenever the Issuer is required to furnish to the Indenture
Trustee an Officer's Certificate of the Issuer certifying or stating the
opinion of any signer thereof as to the matters described in clause (i)
above, the Issuer shall also 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 Officer's 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 Officer's Certificate of the Issuer certifying or stating the opinion of
each person signing such certificate as to the fair value (within 90 days
of such release) of the property or securities proposed to be released and
stating that in the opinion of such person the proposed release will not
impair the security under this Indenture in contravention of the provisions
hereof.
(iv) Whenever the Issuer is required to furnish to the Indenture
Trustee an Officer's Certificate of the Issuer certifying or stating the
opinion of any signer thereof as to the matters described in clause (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 Officer's Certificate is less than $25,000 or less than one percent
of the then Outstanding Amount of the Notes.
(c) The provisions of Section 10.01(b) are all intended to facilitate
compliance with the requirements of the TIA as in effect on the date hereof, and
shall be deemed superseded by any modifications or changes to such requirements
(to expand such requirements, to eliminate such requirements or otherwise)
effected by amendment to the TIA, by regulation, by rule or by judicial or
administrative decision. The provisions of Section 10.01(b) shall not at any
time impose upon any Person obligated under this Section any greater reporting
obligations with respect to the matters covered by Section 10.01(b) than the
reporting obligation with respect to such matters imposed upon such Person by
the TIA as in effect with respect to such time.
SECTION 10.02. 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 Master
Servicer, the Seller, the Issuer or the Administrator, stating that the
information with respect to such factual matters is in the possession of the
Master Servicer, the Seller, 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 10.03. ACTS OF NOTEHOLDERS. (a) Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Indenture to
be given or taken by Noteholders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Noteholders in person
or by agents duly appointed in writing; and except as herein otherwise expressly
provided such action shall become effective when such instrument or instruments
are delivered to the Indenture Trustee, and, where it is hereby expressly
required, to the Issuer. Such instrument or instruments (and the action embodied
therein and evidenced thereby) are herein sometimes referred to as the "Act" of
the Noteholders signing such instrument or instruments. Proof of execution of
any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and (subject to Section 6.01)
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 10.04. NOTICES, ETC., 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 (which may include facsimile) 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 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 shall be
sufficient for every purpose hereunder if in writing and mailed, first-class,
postage prepaid, to the Issuer addressed to: First Union Student Loan Trust
1997-1, in care of The First National Bank of Chicago, as Eligible Lender
Trustee, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Corporate Trust Administration; with a copy to the Administrator,
First Union National Bank, One First Union Center, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: [----------------] or at any other
address previously furnished in writing to the Indenture Trustee by the Issuer
or the Administrator. The Issuer shall promptly transmit any notice received by
it from the Noteholders to the Indenture Trustee.
Notices required to be given to the Rating Agencies by the Issuer, the
Indenture Trustee or the Eligible Lender Trustee shall be in writing, personally
delivered or mailed by certified mail, return receipt requested, to (i) in the
case of Moody's, at the following address: ▇▇▇▇▇'▇ Investors Service, Inc., ABS
Monitoring Department, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ and (ii) in
the case Fitch at the following address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇ or as to each of the foregoing, at such other address as shall be
designated by written notice to the other parties.
SECTION 10.05. 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 10.06. 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. 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 10.07. 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 sections 310 through 317 that impose duties on any
Person (including the provisions automatically deemed included herein unless
expressly excluded by this Indenture) are a part of and govern this Indenture,
whether or not physically contained herein.
SECTION 10.08. 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 10.09. 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 10.10. 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 10.11. 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 10.12. LEGAL HOLIDAYS. In any case where the date on which any
payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Notes or this Indenture) payment need not be made on such date,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the date on which nominally due, and no interest shall
accrue for the period from and after any such nominal date.
SECTION 10.13. 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 10.14. 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 10.15. 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
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 10.16. TRUST OBLIGATIONS. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Seller, the
Administrator, the Master Servicer, the Eligible Lender Trustee or the Indenture
Trustee on the Notes or under this Indenture or any certificate or other writing
delivered in connection herewith or therewith, against (i) the Seller, the
Administrator, the Master Servicer, the Indenture Trustee or the Eligible Lender
Trustee in its individual capacity or (ii) any partner, owner, beneficiary,
agent, officer, director, employee or agent of the Seller, the Administrator,
the Master Servicer, the Indenture Trustee or the Eligible Lender Trustee in its
individual capacity, any holder or owner of a beneficial interest in the Issuer,
the Eligible Lender Trustee or the Indenture Trustee or of any successor or
assign of the Seller, the Administrator, the Master Servicer, the Indenture
Trustee or the Eligible Lender Trustee in its individual capacity, except as any
such Person may have expressly agreed (it being understood that the Indenture
Trustee and the Eligible Lender Trustee have no such obligations in their
individual capacity) and except that any such partner, owner or beneficiary
shall be fully liable, to the extent provided by applicable law, for any unpaid
consideration for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity. For all purposes of this Indenture, in
the performance of any duties or obligations of the Issuer hereunder, the
Eligible Lender Trustee shall be subject to, and entitled to the benefits of,
the terms and provisions of Article VI, VII and VIII of the Trust Agreement.
SECTION 10.17. NO PETITION. The Indenture Trustee, by entering into this
Indenture, and each Noteholder, by accepting a Note, hereby covenant and agree
that they shall not, prior to the date which is one year and one day after the
termination of this Indenture, institute against the Seller or the Issuer, or
join in any institution against the Seller 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 10.18. INSPECTION. The Issuer agrees that, on reasonable prior
notice, it will permit any representative of the Indenture Trustee, during the
Issuer's normal business hours, to examine all the books of account, records,
reports, and other papers of the Issuer, to make copies and extracts therefrom,
to cause such books to be audited by Independent certified public accountants,
and to discuss the Issuer's affairs, finances and accounts with the Issuer's
officers, employees, and Independent certified public accountants, all at such
reasonable times and as often as may be reasonably requested. 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.
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.
FIRST UNION STUDENT LOAN TRUST 1997-1
By: THE FIRST NATIONAL BANK OF
CHICAGO, not in its individual capacity
but solely as Eligible Lender Trustee,
By:--------------------------------------
Name:
Title:
BANKERS TRUST COMPANY, 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:
THE FIRST NATIONAL BANK OF CHICAGO
not in its individual capacity but
solely as Eligible Lender Trustee,
By:---------------------------------
Name:
Title:
APPENDIX A
DEFINITIONS AND USAGE
SCHEDULE A
SCHEDULE OF FINANCED STUDENT LOANS
SCHEDULE B
SCHEDULE OF FINANCED STUDENT LOAN FILES
EXHIBIT A
[FORM OF CLASS A-1 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.
$---------- /1
-----------------
1 Denominations of $1,000 and integral multiples of $1,000 in excess thereof.
No. R-
FIRST UNION STUDENT LOAN TRUST 1997-1
FLOATING RATE CLASS A-1 ASSET BACKED NOTES
First Union Student Loan Trust 1997-1, 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 CEDE & CO., or registered assigns, the
principal sum of [----] DOLLARS payable on each Distribution Date in an amount
equal to the result obtained by multiplying (i) a fraction the numerator of
which is $[INSERT INITIAL PRINCIPAL AMOUNT OF THIS NOTE] and the denominator of
which is [$-------] by (ii) the aggregate amount, if any, payable to Noteholders
on such Distribution Date in respect of principal on the Notes pursuant to
Section 3.01 of the Indenture, dated as of June 1, 1997, between the Issuer and
Bankers Trust Company, a New York banking corporation, as indenture trustee (the
"Indenture Trustee") (capitalized terms used but not defined herein are defined
in Appendix A to the Indenture, which also contains rules as to usage that shall
be applicable herein); PROVIDED, HOWEVER, that the entire unpaid principal
amount of this Note shall be due and payable on the --------- 20-- Distribution
Date (the "Class A-1 Final Maturity Date").
The Issuer will pay interest on this Note at the rate per annum equal to
the Class A-1 Rate (as defined on the reverse hereof), on each Distribution 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 Distribution Date
(after giving effect to all payments of principal made on the preceding
Distribution Date), subject to certain limitations contained in Section 3.01 of
the Indenture. Interest on this Note will accrue for each Distribution Date from
the most recent Distribution Date on which interest has been paid to but
excluding such Distribution Date or, if no interest has yet been paid, from the
Closing Date. Interest will be computed on the basis of the actual number of
days elapsed in each Interest Period divided by 365 (or 366 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.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed, manually or in facsimile, as of the date set forth below.
FIRST UNION STUDENT LOAN TRUST 1997-1
By: THE FIRST NATIONAL BANK OF CHICAGO,
not in its individual capacity but solely
as Eligible Lender Trustee under the Trust
Agreement,
By:
-------------------------------------------
Authorized Signatory
Date: ------- --, 1997
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
BANKERS TRUST COMPANY,
not in its individual capacity but solely
as Indenture Trustee,
By:
-------------------------------------------
Authorized Signatory
Date: ------- --, 1997
[REVERSE OF CLASS A-1 NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Floating Rate Class A-1 Asset Backed Notes (herein called the
"Notes"), all issued under the Indenture, to which Indenture and all supplements
or amendments 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 Notes are subject to all terms of the Indenture.
The Notes are and will be equally and ratably secured by the collateral
pledged as security therefor as provided in the Indenture.
Principal of the Notes will be payable on each Distribution Date in an
amount described on the face hereof until the principal balance of the Notes are
reduced to zero. "Distribution Date" means [----------] day of each [of] March,
June, September and December (each, a "Distribution Date"); [or, if any such
date is not a Business Day, the next succeeding Business Day,] commencing
September [ ], 1997.
As described on the face hereof, the entire unpaid principal amount of this
Note shall be due and payable on the Class A-1 Final Maturity Date.
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 5.02 of the Indenture. All principal payments on the Notes
shall be made pro rata to the Class A-1 Noteholders entitled thereto.
Interest on the Notes will be payable on each Distribution Date on the
principal amount outstanding of the Notes until the principal amount thereof is
paid in full, at a rate per annum equal to the Class A-1 Rate. The "Class A-1
Rate" for each Interest Period will be equal to the lesser of (a) the T-▇▇▇▇
Rate for such Interest Period (determined as set forth under "-- Determination
of the T-▇▇▇▇ Rate") plus ---% and (b) the Student Loan Rate for such Interest
Period. The "Student Loan Rate" for any Interest Period will equal the product
of (a) the quotient obtained by dividing (i) 365 (or 366 in a leap year) by (ii)
the actual number of days elapsed in such Interest Period and (b) the percentage
equivalent of a fraction, (i) the numerator of which is equal to Expected
Interest Collections for the Collection Period relating to such Interest Period
less the Servicing Fees and the Administration Fee payable on the related
Distribution Date and any Servicing Fees paid on the two preceding monthly
Servicing Payment Dates during the related Collection Period and (ii) the
denominator of which is the Pool Balance.
Pursuant to Section 3.04 of the Master Servicing Agreement, the
Administrator shall determine the T-▇▇▇▇ Rate for purposes of calculating the
Class A-1 Rate for each given Interest Period. The "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. Department of the Treasury. In the event that the results of the
auctions of 91-day Treasury bills cease to be 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 will remain in effect
until such time, if any, as the results of auctions of 91-day Treasury bills
shall again be reported or such an auction is held, as the case may be. The
T-▇▇▇▇ Rate will be subject to a Lock-In Period of six business days.
Any Noteholders' Interest Index Carryover that may exist on any
Distribution Date attributable to the Notes shall be payable to the Noteholders
on that Distribution Date and any succeeding Distribution Dates solely out of
the funds available and required to be applied thereto pursuant to the Master
Servicing Agreement.
Payments of interest on this Note due and payable on each Distribution
Date, together with the installment of principal, if any, to the extent not in
full payment of this Note, shall be made by 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 Distribution
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 Distribution 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 Distribution Date
by notice mailed no later than five days prior to such Distribution 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 Borough of Manhattan, The City of New York.
The Issuer shall pay interest on overdue installments of interest at the
Class A-1 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 Indenture Trustee on the Notes or under the Indenture or any
certificate or other writing delivered in connection therewith, against (i) the
Indenture Trustee or the Eligible Lender Trustee in its individual capacity,
(ii) any owner of a beneficial interest in the Issuer or (iii) any partner,
owner, beneficiary, agent, officer, director or employee of the Indenture
Trustee or the Eligible Lender Trustee in its individual capacity, any holder of
a beneficial interest in the Issuer, the Eligible Lender Trustee or the
Indenture Trustee, except as any such Person may have expressly agreed 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 Seller or the Issuer, or join in any
institution against the Seller 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.
Each transferee of this Note shall be required to represent (or, the case
of a transferee of a beneficial interest in a Book-Entry Note, shall be deemed
to represent) (a) that it is not a Benefit Plan Investor and is not using the
assets of a Benefit Plan Investor to acquire this Note or (b) if such transfere
is a Benefit Plan Investor or a Person investing the assets of a Benefit Plan
Investor, that the use of the assets of such Benefit Plan Investor to acquire
this Note does not and will not constitute or result in a non-exempt prohibited
transaction in violation of Section 406 of ERISA, Section 4975 of the Code or
Similar Law. Any transfer of this Note or any beneficial interest herein in
violation of the foregoing restrictions shall be null and void and shall vest no
rights in the transferee.
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 of 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.
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 The First National Bank of Chicago, in
its individual capacity, Bankers Trust Company, 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 Eligible Lender Trustee
for the sole purposes of binding the interests of the Eligible Lender 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.
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
[FORM OF CLASS A-2 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.
$---------- /2
-----------------
2 Denominations of $1,000 and integral multiples of $1,000 in excess thereof.
No. R-
FIRST UNION STUDENT LOAN TRUST 1997-1
FLOATING RATE CLASS A-2 ASSET BACKED NOTES
First Union Student Loan Trust 1997-1, 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 CEDE & CO., or registered assigns, the
principal sum of [---] DOLLARS payable on each Distribution Date in an amount
equal to the result obtained by multiplying (i) a fraction the numerator of
which is $[INSERT INITIAL PRINCIPAL AMOUNT OF THIS NOTE] and the denominator of
which is [$----------] by (ii) the aggregate amount, if any, payable to
Noteholders on such Distribution Date in respect of principal on the Notes
pursuant to Section 3.01 of the Indenture, dated as of June 1, 1997, between the
Issuer and Bankers Trust Company, a New York banking corporation, as indenture
trustee (the "Indenture Trustee") (capitalized terms used but not defined herein
are defined in Appendix A to the Indenture, which also contains rules as to
usage that shall be applicable herein); PROVIDED, HOWEVER, that the entire
unpaid principal amount of this Note shall be due and payable on the ---------
20-- Distribution Date (the "Class A-2 Final Maturity Date").
The Issuer will pay interest on this Note at the rate per annum equal to
the Class A-2 Rate (as defined on the reverse hereof), on each Distribution 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 Distribution Date
(after giving effect to all payments of principal made on the preceding
Distribution Date), subject to certain limitations contained in Section 3.01 of
the Indenture. Interest on this Note will accrue for each Distribution Date from
the most recent Distribution Date on which interest has been paid to but
excluding such Distribution Date or, if no interest has yet been paid, from the
Closing Date. Interest will be computed on the basis of the actual number of
days elapsed in each Interest Period divided by 365 (or 366 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.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed, manually or in facsimile, as of the date set forth below.
FIRST UNION STUDENT LOAN TRUST 1997-1
By: THE FIRST NATIONAL BANK OF CHICAGO,
not in its individual capacity but solely
as Eligible Lender Trustee under the
Trust Agreement,
By:
-------------------------------------------
Authorized Signatory
Date: ------- --, 1997
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
BANKERS TRUST COMPANY,
not in its individual capacity but solely
as Indenture Trustee,
By:
-------------------------------------------
Authorized Signatory
Date: ------- --, 1997
[REVERSE OF CLASS A-2 NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Floating Rate Class A-2 Asset Backed Notes (herein called the
"Notes"), all issued under the Indenture, to which Indenture and all supplements
or amendments 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 Notes are subject to all terms of the Indenture.
The Notes are and will be equally and ratably secured by the collateral
pledged as security therefor as provided in the Indenture.
Principal of the Notes will be payable on each Distribution Date in an
amount described on the face hereof; PROVIDED, HOWEVER, that no distributions in
respect of principal of the Class A-2 Notes will be made until the Class A-1
Notes have been paid in full. "Distribution Date" means [----------] day of each
[of] March, June, September and December (each, a "Distribution Date"); [or, if
any such date is not a Business Day, the next succeeding Business Day,]
commencing September [ ], 1997.
As described on the face hereof, the entire unpaid principal amount of this
Note shall be due and payable on the Class A-2 Final Maturity Date.
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 5.02 of the Indenture. All principal payments on the Notes
shall be made pro rata to the Class A-2 Noteholders entitled thereto.
Interest on the Notes will be payable on each Distribution Date on the
principal amount outstanding of the Notes until the principal amount thereof is
paid in full, at a rate per annum equal to the Class A-2 Rate. The "Class A-2
Rate" for each Interest Period will be equal to the lesser of the T-▇▇▇▇ Rate
for such Interest Period (determined as set forth under "-- Determination of the
T-▇▇▇▇ Rate") plus ---% and (b) the Student Loan Rate for such Interest Period.
The "Student Loan Rate" for any Interest Period will equal the product of (a)
the quotient obtained by dividing (i) 365 (or 366 in a leap year) by (ii) the
actual number of days elapsed in such Interest Period and (b) the percentage
equivalent of a fraction, (i) the numerator of which is equal to Expected
Interest Collections for the Collection Period relating to such Interest Period
less the Servicing Fees and the Administration Fee payable on the related
Distribution Date and any Servicing Fees paid on the two preceding monthly
Servicing Payment Dates during the related Collection Period and (ii) the
denominator of which is the Pool Balance.
Pursuant to Section 3.04 of the Master Servicing Agreement, the
Administrator shall determine the T-▇▇▇▇ Rate for purposes of calculating the
Class A-2 Rate for each given Interest Period. The "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. Department of the Treasury. In the event that the results of the
auctions of 91-day Treasury bills cease to be 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 will remain in effect
until such time, if any, as the results of auctions of 91-day Treasury bills
shall again be reported or such an auction is held, as the case may be. The
T-▇▇▇▇ Rate will be subject to a Lock-In Period of six business days.
Any Noteholders' Interest Index Carryover that may exist on any
Distribution Date attributable to the Notes shall be payable to the Noteholders
on that Distribution Date and any succeeding Distribution Dates solely out of
the funds available and required to be applied thereto pursuant to the Master
Servicing Agreement.
Payments of interest on this Note due and payable on each Distribution
Date, together with the installment of principal, if any, to the extent not in
full payment of this Note, shall be made by 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 Distribution
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 Distribution 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 Distribution Date
by notice mailed no later than five days prior to such Distribution 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 Borough of Manhattan, The City of New York.
The Issuer shall pay interest on overdue installments of interest at the
Class A-2 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 Indenture Trustee on the Notes or under the Indenture or any
certificate or other writing delivered in connection therewith, against (i) the
Indenture Trustee or the Eligible Lender Trustee in its individual capacity,
(ii) any owner of a beneficial interest in the Issuer or (iii) any partner,
owner, beneficiary, agent, officer, director or employee of the Indenture
Trustee or the Eligible Lender Trustee in its individual capacity, any holder of
a beneficial interest in the Issuer, the Eligible Lender Trustee or the
Indenture Trustee, except as any such Person may have expressly agreed 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 Seller or the Issuer, or join in any
institution against the Seller 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.
Each transferee of this Note shall be required to represent (or, the case
of a transferee of a beneficial interest in a Book-Entry Note, shall be deemed
to represent) (a) that it is not a Benefit Plan Investor and is not using the
assets of a Benefit Plan Investor to acquire this Note or (b) if such transfere
is a Benefit Plan Investor or a Person investing the assets of a Benefit Plan
Investor, that the use of the assets of such Benefit Plan Investor to acquire
this Note does not and will not constitute or result in a non-exempt prohibited
transaction in violation of Section 406 of ERISA, Section 4975 of the Code or
Similar Law. Any transfer of this Note or any beneficial interest herein in
violation of the foregoing restrictions shall be null and void and shall vest no
rights in the transferee.
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 of 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.
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 The First National Bank of Chicago, in
its individual capacity, Bankers Trust Company, 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 Eligible Lender Trustee
for the sole purposes of binding the interests of the Eligible Lender 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.
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.
APPENDIX A
DEFINITIONS AND USAGE
Usage
The following rules of construction and usage shall be applicable to any
instrument that is governed by this Appendix:
(a) All terms defined in this Appendix shall have the defined meanings when
used in any instrument governed hereby and in any certificate or other document
made or delivered pursuant thereto unless otherwise defined therein.
(b) As used herein, in any instrument governed hereby and in any
certificate or other document made or delivered pursuant thereto, accounting
terms not defined in this Appendix or in any such instrument, certificate or
other document, and accounting terms partly defined in this Appendix or in any
such instrument, certificate or other document to the extent not defined, shall
have the respective meanings given to them under generally accepted accounting
principles as in effect on the date of such instrument. To the extent that the
definitions of accounting terms in this Appendix or in any such instrument,
certificate or other document are inconsistent with the meanings of such terms
under generally accepted accounting principles, the definitions contained in
this Appendix or in any such instrument, certificate or other document shall
control.
(c) The words "hereof", "herein", "hereunder" and words of similar import
when used in an instrument refer to such instrument as a whole and not to any
particular provision or subdivision thereof; references in an instrument to
"Article", "Section" or another subdivision or to an attachment are, unless the
context otherwise requires, to an article, section or subdivision of or an
attachment to such instrument; and the term "including" means "including without
limitation".
(d) The definitions contained in this Appendix are equally applicable to
both the singular and plural forms of such terms and to the masculine as well as
to the feminine and neuter genders of such terms.
(e) Any agreement, instrument or statute defined or referred to below or in
any agreement or instrument that is governed by this Appendix means such
agreement or instrument or statute as from time to time amended, modified or
supplemented, including (in the case of agreements or instruments) by waiver or
consent and (in the case of statutes) by succession of comparable successor
statutes and includes (in the case of agreements or instruments) references to
all attachments thereto and instruments incorporated therein. References to a
Person are also to its permitted successors and assigns.
Definitions
"91-DAY TREASURY BILLS" means direct obligations of the United States with
a maturity of thirteen weeks.
"ACT" has the meaning specified in Section 10.03(a) of the Indenture.
"ADJUSTED POOL BALANCE" means, for any Distribution Date, (a) if the Pool
Balance as of the last day of the related Collection Period is greater than 40%
of the Initial Pool Balance, the sum of such Pool Balance and the Specified
Reserve Account Balance for such Distribution Date, or (b) if the Pool Balance
as of the last day of the related Collection Period is less than or equal to 40%
of the Initial Pool Balance, such Pool Balance.
"ADMINISTRATION AGREEMENT" means the Administration Agreement dated as of
June 1, 1997, among the Issuer, the Indenture Trustee and the Administrator.
"ADMINISTRATION FEE" has the meaning specified in Section 3 of the
Administration Agreement.
"ADMINISTRATOR" means First Union National Bank, a national banking
association having its main office in Charlotte, North Carolina, in its capacity
as administrator of the Issuer and the Financed Student Loans.
"ADMINISTRATOR DEFAULT" has the meaning specified in Section 7.01(b) of the
Master Servicing Agreement.
"ADMINISTRATOR'S CERTIFICATE" means an Officer's Certificate of the
Administrator delivered pursuant to Section 3.08(b) and (c) of the Master
Servicing Agreement, substantially in the form of Exhibit C thereto.
"AFFILIATE" means, with respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"AUCTION DISTRIBUTION DATE" means the Distribution Date immediately
following the Distribution Date on which the Pool Balance is less than or equal
to 10% of the Initial Pool Balance.
"AUTHORIZED OFFICER" means (i) with respect to the Issuer, any officer of
the Eligible Lender Trustee who is authorized to act for the Eligible Lender
Trustee in matters relating to the Issuer pursuant to the Basic Documents and
who is identified on the list of Authorized Officers delivered by the Eligible
Lender Trustee to the Indenture Trustee on the Closing Date (as such list may be
modified or supplemented from time to time thereafter), (ii) with respect to the
Administrator, any officer of the Administrator or any of its Affiliates who is
authorized to act for the Administrator in matters relating to itself or to the
Issuer and to be acted upon by the Administrator pursuant to the Basic Documents
and who is identified on the list of Authorized Officers delivered by the
Administrator to the Indenture Trustee on the Closing Date (as such list may be
modified or supplemented from time to time thereafter), (iii) with respect to
the Seller, any officer of the Seller or any of its Affiliates who is authorized
to act for the Seller in matters relating to or to be acted upon by the Seller
pursuant to the Basic Documents and who is identified on the list of Authorized
Officers delivered by the Seller to the Indenture Trustee on the Closing Date
(as such list may be modified or supplemented from time to time thereafter) and
(iv) with respect to the Master Servicer, any officer of the Master Servicer who
is authorized to act for the Master Servicer in matters relating to or to be
acted upon by the Master Servicer pursuant to the Basic Documents and who is
identified on the list of Authorized Officers delivered by the Master Servicer
to the Indenture Trustee on the Closing Date (as such list may be modified or
supplemented from time to time thereafter).
"AVAILABLE FUNDS" means, with respect to a Distribution Date or any Monthly
Servicing Payment Date, the sum of the following amounts received with respect
to the related Collection Period (or, in the case of a Monthly Servicing Payment
Date, the applicable portion thereof:
(a) all collections received by the Master Servicer on the Financed
Student Loans (including any Guarantee Payments received with respect
to the Financed Student Loans) but net of (x) amounts required by the
Higher Education Act to be paid to the Department or to be repaid to
borrowers (whether or not in the form of a principal reduction of the
applicable Financed Student Loan), with respect to the Financed
Student Loans for such Collection Period, including any Origination
Fee payable to the Department on Consolidation Loans disbursed after
October 1, 1993, and (y) any collections in respect of principal on
the Financed Student Loans applied by the Trust to repurchase
guaranteed loans from the Guarantors in accordance with the Guarantee
Agreements;
(b) any Interest Subsidy Payments and Special Allowance Payments received
by the Eligible Lender Trustee during such Collection Period with
respect to the Financed Student Loans;
(c) all Liquidation Proceeds from any Financed Student Loan which became
Liquidated Student Loans during such Collection Period in accordance
with the Master Servicer's customary servicing procedures, and all
recoveries in respect of Liquidated Student Loans which were written
off in prior Collection Periods;
(d) the aggregate Purchase Amounts received for those Financed Student
Loans repurchased by the Seller or purchased by the Master Servicer
under an obligation which arose during such Collection Period;
(e) the aggregate amounts, if any, received from the Seller or the Master
Servicer, as the case may be, as reimbursement of non-guaranteed
interest amounts, or lost Interest Subsidy Payments and Special
Allowance Payments, with respect to the Financed Student Loans
pursuant to the Sale Agreement or the Master Servicing Agreement,
respectively;
(f) amounts deposited by the Seller into the Collection Account in
connection with the making of Consolidation Loans; and
(g) Investment Earnings for such Distribution Date and any interest
remitted by the Administrator to the Collection Account prior to such
Distribution Date or Monthly Servicing Payment Date as described in
the preceding paragraph;
PROVIDED, HOWEVER, that Available Funds will exclude all payments and proceeds
(including Liquidation Proceeds) of any Financed Student Loans the Purchase
Amount of which has been included in Available Funds for a prior Monthly Payment
Date or Distribution Date; PROVIDED, FURTHER, that if with respect to any
Distribution Date there would not be sufficient funds, after application of
Available Funds (as defined above) and amounts available from the Reserve
Account, to pay any of the Trust Fees, then Available Funds for such
Distribution Date will include, in addition to the Available Funds (as defined
above), amounts on deposit in the Collection Account (or amounts held by the
Administrator, or which the Administrator reasonably estimates to be held by the
Administrator, for deposit into the Collection Account) on the Determination
Date which would have constituted Available Funds for the Distribution Date
succeeding such Distribution Date, up to the amount necessary to pay such items,
and the Available Funds for such succeeding Distribution Date will be adjusted
accordingly.
"BASIC DOCUMENTS" means the Trust Agreement, the Indenture, the Sale
Agreement, the Master Servicing Agreement, the Administration Agreement, the
Certificate Depository Agreement, the Note Depository Agreement, the Guarantee
Agreements and other documents and certificates delivered in connection with any
thereof.
"BENEFIT PLAN" has the meaning specified in Section 3.04 of the Trust
Agreement.
"BOOK-ENTRY CERTIFICATE" means a beneficial interest in the Certificates,
ownership and transfers of which shall be made through book entries by a
Clearing Agency as described in Section 3.11 of the Trust Agreement.
"BOOK-ENTRY NOTE" means a beneficial interest in the Notes, ownership and
transfers of which shall be made through book entries by a Clearing Agency as
described in Section 2.10 of the Indenture.
"BUSINESS DAY" means any day other than a Saturday, a Sunday or a day on
which banking institutions or trust companies in the City of New York, Chicago,
Illinois or Charlotte, North Carolina are authorized or obligated by law,
regulation or executive order to remain closed.
"CERTIFICATE" means a certificate evidencing the beneficial interest of a
Certificateholder in the Trust, substantially in the form of Exhibit A to the
Trust Agreement.
"CERTIFICATE BALANCE" equals, initially, the Initial Certificate Balance
and, thereafter, equals the Initial Certificate Balance reduced by all amounts
allocable to principal previously distributed to Certificateholders.
"CERTIFICATE DEPOSITORY AGREEMENT" means the agreement dated as of the
Closing Date among the Trust, the Eligible Lender Trustee, the Administrator and
The Depository Trust Company, as the initial Clearing Agency, substantially in
the form of Exhibit B to the Trust Agreement.
"CERTIFICATE FINAL PAYMENT DATE" means the ______________ Distribution
Date.
"CERTIFICATE OWNER" means, with respect to a Book-Entry Certificate, the
Person who is the beneficial owner of such Book-Entry Certificate, as reflected
on the books of the Clearing Agency, or on the books of a Person maintaining an
account with such Clearing Agency (directly as a Clearing Agency Participant or
as an indirect participant, in each case in accordance with the rules of such
Clearing Agency).
"CERTIFICATE PAYING AGENT" means any paying agent or co-paying agent
appointed pursuant to Section 3.09 of the Trust Agreement, which shall initially
be the Eligible Lender Trustee.
"CERTIFICATE POOL FACTOR" as of the close of business on a Distribution
Date means a seven-digit decimal figure equal to the Certificate Balance divided
by the Initial Certificate Balance. The Certificate Pool Factor will be
1.0000000 as of the Closing Date; thereafter, the Certificate Pool Factor will
decline to reflect reductions in the Certificate Balance.
"CERTIFICATE RATE" means, with respect to any Interest Period, the interest
rate per annum (computed on the basis of the actual number of days elapsed in
such Interest Period over a year of 365 days (or 366 in the case of a leap
year)) equal to the lesser of (i) the daily weighted average of the T-▇▇▇▇ Rates
within such Interest Period plus __% and (ii) the Student Loan Rate for such
Interest Period.
"CERTIFICATE REGISTER" and "CERTIFICATE REGISTRAR" means the register
mentioned and the registrar appointed pursuant to Section 3.04 of the Trust
Agreement.
"CERTIFICATEHOLDER" means a Person in whose name a Certificate is
registered in the Certificate Register.
"CERTIFICATEHOLDERS' DISTRIBUTION AMOUNT" means, with respect to any
Distribution Date, the Certificateholders' Interest Distribution Amount for such
Distribution Date plus, for each Distribution Date on and after which the Notes
have been paid in full, the Certificateholders' Principal Distribution Amount
for such Distribution Date.
"CERTIFICATEHOLDERS' INTEREST DISTRIBUTION AMOUNT" means, with respect to
any Distribution Date, the sum of (i) the amount of interest accrued at the
Certificate Rate for the related Interest Period on the outstanding Certificate
Balance on the immediately preceding Distribution Date, after giving effect to
all distributions to Certificateholders in respect of the Certificate Balance on
such Distribution Date (or, in the case of the first Distribution Date, on the
Closing Date) and (ii) the Certificateholders' Interest Shortfall for such
Distribution Date; PROVIDED, HOWEVER, that the Certificateholders' Interest
Distribution Amount will not include any Certificateholders' Interest Index
Carryover.
"CERTIFICATEHOLDERS' INTEREST INDEX CARRYOVER" means for any Distribution
Date on which the Certificate Rate is based on the Student Loan Rate, the excess
of (a) the amount of return on the Certificates that would have accrued in
respect of such Interest Period at the Certificate Rate without regard to the
Student Loan Rate over (b) the amount of return on the Certificates actually
accrued in respect of such Interest Period based on the Student Loan Rate,
together with the unpaid portion of any such excess from prior Distribution
Dates and any return accrued thereon calculated at the Certificate Rate without
regard to the Student Loan Rate; PROVIDED, HOWEVER, that on any Distribution
Date after the principal balance of the Certificates has been paid in full, the
Certificateholders' Interest Index Carryover shall be equal to zero.
"CERTIFICATEHOLDERS' INTEREST SHORTFALL" means, with respect to any
Distribution Date, the excess of (i) the Certificateholders' Interest
Distribution Amount on the preceding Distribution Date over (ii) the amount of
interest actually distributed to the Certificateholders on such preceding
Distribution Date, plus interest on the amount of such excess interest, to the
extent permitted by law, at the Certificate Rate from such preceding
Distribution Date to the current Distribution Date.
"CERTIFICATEHOLDERS' PERCENTAGE" means a fraction, expressed as a
percentage, the numerator of which is the principal amount of the Certificates
issued on the Closing Date and the denominator of which is the sum of the
principal amount of the Notes issued on the Closing Date and the principal
balance of the Certificates issued on the Closing Date.
"CERTIFICATEHOLDERS' PRINCIPAL DISTRIBUTION AMOUNT" means, on each
Distribution Date, the excess of (i) the sum of (a) the Principal Distribution
Amount for such Distribution Date, (b) the Noteholders' Principal Shortfall as
of the close of the preceding Distribution Date and (c) the Certificateholders'
Principal Shortfall as of the close of the preceding Distribution Date over (ii)
the Noteholders' Principal Distribution Amount for such Distribution Date;
PROVIDED, HOWEVER, that the Certificateholders' Principal Distribution Amount
will in no event exceed the Certificate Balance. In addition, on the Certificate
Final Payment Date, the Certificate Balance to be distributed to the
Certificateholders will include the amount required to reduce the outstanding
Certificate Balance to zero.
"CERTIFICATEHOLDERS' PRINCIPAL SHORTFALL" means, as of the close of any
Distribution Date, the excess of (i) the Certificateholders' Principal
Distribution Amount on such Distribution Date over (ii) the amount of
distributions made with respect to the Certificate Balance on such Distribution
Date.
"CLASS A-1 FINAL MATURITY DATE" means the ______ 200_ Distribution Date, at
which time the outstanding principal amount of the Class A-1 Notes is payable in
full.
"CLASS A-1 NOTE" means Floating Rate Class A-1 Asset Backed Notes issued
pursuant to the Indenture, substantially in the form of Exhibit A hereto.
"CLASS A-1 RATE" means, with respect to each Interest Period, the interest
rate per annum (calculated on the basis of the actual number of days elapsed in
such Interest Period divided by 365 (or 366 in the case of a leap year)) equal
to the lesser of (a) the weighted average T-▇▇▇▇ Rate for such Interest Period
plus ___% and (b) the Student Loan Rate for such Interest Period.
"CLASS A-2 FINAL MATURITY DATE" means the ______ 200_ Distribution Date, at
which time the outstanding principal amount of the Class A-2 Notes is payable in
full.
"CLASS A-2 NOTE" means Floating Rate Class A-2 Asset Backed Notes issued
pursuant to the Indenture, substantially in the form of Exhibit B hereto.
"CLASS A-2 RATE" means, with respect to each Interest Period, the interest
rate per annum (calculated on the basis of the actual number of days elapsed in
such Interest Period divided by 365 (or 366 in the case of a leap year)) equal
to the lesser of (a) the weighted average T-▇▇▇▇ Rate for such Interest Period
plus ___% and (b) the Student Loan Rate for such Interest Period.
"CLEARING AGENCY" means an organization registered as a "clearing agency"
pursuant to Section 17A of the Exchange Act.
"CLEARING AGENCY PARTICIPANT" means a broker, dealer, bank, other financial
institution or other Person for whom from time to time a Clearing Agency effects
book-entry transfers and pledges of securities deposited with the Clearing
Agency.
"CLOSING DATE" means June ____, 1997.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time, and Treasury Regulations promulgated thereunder.
"COLLATERAL" has the meaning specified in the Granting Clause of the
Indenture.
"COLLECTION ACCOUNT" means the account designated as such, established and
maintained pursuant to Section 4.01 of the Master Servicing Agreement.
"COLLECTION PERIOD" means each period of three calendar months from and
including the date next following the end of the preceding Collection Period
(or, with respect to the first Collection Period, the period beginning on the
Cutoff Date and ending on August 31, 1997).
"COMMISSION" means the Securities and Exchange Commission.
"CONSOLIDATION LOAN" means a loan made to an eligible borrower that
represents the refinancing of federal student loans of such borrower and his or
her spouse in accordance with the applicable terms and conditions of the Higher
Education Act.
"CORPORATE TRUST OFFICE" means (i) with respect to the Indenture Trustee,
the principal office of the Indenture Trustee at which at any particular time
its corporate trust business shall be administered, which office at the Closing
Date is located at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇; Attention:
Corporate Trust and Agency Group; Telephone: (▇▇▇) ▇▇▇-▇▇▇▇; Telecopy: (212)
250-6439, or at such other address as the Indenture Trustee may designate from
time to time by notice to the Noteholders and the Seller, or the principal
corporate trust office of any successor Indenture Trustee (the address of which
the successor Indenture Trustee will notify the Noteholders and the Seller) and
(ii) with respect to the Eligible Lender Trustee, the principal corporate trust
office of the Eligible Lender Trustee located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇; Attention: Corporate Trust Administration;
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇, or at such other address as the Eligible Lender
Trustee may designate by notice to the Certificateholders and the Seller, or the
principal corporate trust office of any successor Eligible Lender Trustee (the
address of which the successor Eligible Lender Trustee will notify the
Certificateholders and the Seller).
"CSLF" means the Connecticut Student Loan Foundation, an agency of the
State of Connecticut.
"CUTOFF DATE" means June 1, 1997.
"DEFAULT" means any occurrence that is, or with notice or the lapse of time
or both would become, an Event of Default.
"DEFINITIVE CERTIFICATES" has the meaning specified in Section 3.11 of the
Trust Agreement.
"DEFINITIVE NOTES" has the meaning specified in Section 2.10 of the
Indenture.
"DELIVERY" when used with respect to Trust Account Property means: (a) with
respect to bankers' acceptances, commercial paper, negotiable certificates of
deposit and other obligations that constitute "instruments" within the meaning
of Section 9-105(1)(i) of the UCC and are susceptible of physical delivery,
transfer thereof to the Indenture Trustee or its nominee or custodian by
physical delivery to the Indenture Trustee or its nominee or custodian endorsed
to, or registered in the name of, the Indenture Trustee or its nominee or
custodian or endorsed in blank, and, with respect to a certificated security (as
defined in Section 8-102 of the UCC) transfer thereof (i) by delivery of such
certificated security endorsed to, or registered in the name of, the Indenture
Trustee or its nominee or custodian or endorsed in blank to a financial
intermediary (as defined in Section 8-313) of the UCC) and the making by such
financial intermediary of entries on its books and records identifying such
certificated securities as belonging to the Indenture Trustee or its nominee or
custodian and the sending by such financial intermediary of a confirmation of
the purchase of such certificated security by the Indenture Trustee or its
nominee or custodian, or (ii) by delivery thereof to a "clearing corporation"
(as defined in Section 8-102(3) of the UCC) and the making by such clearing
corporation of appropriate entries on its books reducing the appropriate
securities account of the transferor and increasing the appropriate securities
account of a financial intermediary by the amount of such certificated security,
the identification by the clearing corporation of the certificated securities
for the sole and exclusive account of the financial intermediary, the
maintenance of such certificated securities by such clearing corporation or a
"custodian bank" (as defined in Section 8-102(4) of the UCC) or the nominee of
either subject to the clearing corporation's exclusive control, the sending of a
confirmation by the financial intermediary of the purchase by the Indenture
Trustee or its nominee or custodian of such securities and the making by such
financial intermediary of entries on its books and records identifying such
certificated securities as belonging to the Indenture Trustee or its nominee or
custodian (all of the foregoing, "Physical Property"), and, in any event, any
such Physical Property in registered form shall be in the name of the Indenture
Trustee or its nominee or custodian; and such additional or alternative
procedures as may hereafter become appropriate to effect the complete transfer
of ownership of any such Trust Account Property to the Indenture Trustee or its
nominee or custodian, consistent with changes in applicable law or regulations
or the interpretation thereof; (b) with respect to any securities issued by the
U.S. Treasury, the Federal Home Loan Mortgage Corporation or by the Federal
National Mortgage Association that is a book-entry security held through the
Federal Reserve System pursuant to Federal book-entry regulations, the following
procedures, all in accordance with applicable law, including applicable Federal
regulations and Articles 8 and 9 of the UCC: book-entry registration of such
Trust Account Property to an appropriate book-entry account maintained with a
Federal Reserve Bank by a financial intermediary which is also a "depository"
pursuant to applicable Federal regulations and issuance by such financial
intermediary of a deposit advice or other written confirmation of such
book-entry registration to the Indenture Trustee or its nominee or custodian of
the purchase by the Indenture Trustee or its nominee or custodian of such
book-entry securities; the making by such financial intermediary of entries in
its books and records identifying such book-entry security held through the
Federal Reserve System pursuant to Federal book-entry regulations as belonging
to the Indenture Trustee or its nominee or custodian and indicating that such
custodian holds such Trust Account Property solely as agent for the Indenture
Trustee or its nominee or custodian; and such additional or alternative
procedures as may hereafter become appropriate to effect complete transfer of
ownership of any such Trust Account Property to the Indenture Trustee or its
nominee or custodian, consistent with changes in applicable law or regulations
or the interpretation thereof; and (c) with respect to any item of Trust Account
Property that is an uncertificated security under Article 8 of the UCC and that
is not governed by clause (b) above, registration on the books and records of
the issuer thereof in the name of the financial intermediary, the sending of a
confirmation by the financial intermediary of the purchase by the Indenture
Trustee or its nominee or custodian of such uncertificated security, the making
by such financial intermediary of entries on its books and records identifying
such uncertificated certificates as belonging to the Indenture Trustee or its
nominee or custodian.
"DEPARTMENT" means the United States Department of Education, an agency of
the Federal government.
"DEPOSITOR" means the Seller in its capacity as Depositor under the Trust
Agreement.
"DETERMINATION DATE" means, with respect to any Monthly Servicing Payment
Date or Distribution Date, as the case may be, the third Business Day preceding
such Monthly Servicing Payment Date or Distribution Date.
"DISTRIBUTION DATE" means, with respect to each Collection Period, the [__]
day of each of March, June, September and December, [or, if such day is not a
Business Day, the immediately following Business Day], commencing on September
[__], 1997.
"ELIGIBLE DEPOSIT ACCOUNT" means either (a) a segregated account with an
Eligible Institution or (b) a segregated trust account with the corporate trust
department of a depository institution organized under the laws of the United
States of America or any one of the States (or any domestic branch of a foreign
bank), having corporate trust powers and acting as trustee for funds deposited
in such account, so long as any of the securities of such depository institution
have a credit rating from each Rating Agency in one of its generic rating
categories which signifies investment grade.
"ELIGIBLE INSTITUTION" means a depository institution organized under the
laws of the United States of America or any one of the states thereof or the
District of Columbia (or any domestic branch of a foreign bank), (i) which has a
long-term unsecured debt rating of investment grade and/or a short-term
unsecured debt rating in the highest investment rating category, each as
determined by at least two nationally recognized rating agencies and (ii) whose
deposits are insured by the FDIC. If so qualified, the Eligible Lender Trustee
or the Indenture Trustee may be considered an Eligible Institution.
"ELIGIBLE INVESTMENTS" mean book-entry securities, negotiable instruments
or securities represented by instruments in bearer or registered form which
evidence:
(a) direct obligations of, and obligations fully guaranteed as to timely
payment by, the United States of America;
(b) demand deposits, time deposits or certificates of deposit of any
depository institution or trust company incorporated under the laws of
the United States of America or any State (or any domestic branch of a
foreign bank) and subject to supervision and examination by Federal or
state banking or depository institution authorities (including
depository receipts issued by any such institution or trust company as
custodian with respect to any obligation referred to in clause (a)
above or portion of such obligation for the benefit of the holders of
such depository receipts); PROVIDED, HOWEVER, that at the time of the
investment or contractual commitment to invest therein (which shall be
deemed to be made again each time funds are reinvested following each
Monthly Servicing Payment Date or Distribution Date, as the case may
be), the commercial paper or other short-term senior unsecured debt
obligations (other than such obligations the rating of which is based
on the credit of a Person other than such depository institution or
trust company) thereof shall have a credit rating from both of the
Rating Agencies in the highest investment category granted thereby;
(c) commercial paper having, at the time of the investment or contractual
commitment to invest therein, a rating from both of the Rating
Agencies in the highest investment category granted thereby;
(d) investments in money market funds or common trust funds having a
rating from both of the Rating Agencies in the highest investment
category granted thereby (including funds for which the Indenture
Trustee, the Administrator or the Eligible Lender Trustee or any of
their respective Affiliates is investment manager or advisor);
(e) bankers' acceptances issued by any depository institution or trust
company referred to in clause (b) above;
(f) repurchase obligations with respect to any security that is a direct
obligation of, or fully guaranteed by, the United States of America or
any agency or instrumentality thereof the obligations of which are
backed by the full faith and credit of the United States of America,
in either case entered into with (i) a depository institution or trust
company (acting as principal) described in clause (b) above; and
(g) any other investment permitted by each of the Rating Agencies as set
forth in writing delivered to the Indenture Trustee.
"ELIGIBLE LENDER TRUSTEE" means The First National Bank of Chicago, a
national banking association, not in its individual capacity but solely as
Eligible Lender Trustee under the Trust Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"EVENT OF DEFAULT" has the meaning specified in Section 5.01 of the
Indenture.
"EXCESS DISTRIBUTION CERTIFICATE" means the certificate issued by the Trust
representing excess amounts distributed to the Seller in accordance with the
Sale Agreement, substantially in the form of Exhibit ___ to the Trust Agreement.
"EXCESS SERVICING FEE" has the meaning specified in Schedule [C] to the
[Master Servicing Agreement].
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXECUTIVE OFFICER" means, with respect to any corporation, the Chief
Executive Officer, Chief Operating Officer, Chief Financial Officer, President,
any Executive Vice President, any Senior Vice President, any Vice President, the
Secretary or the Treasurer of such corporation; and with respect to any
partnership, any general partner thereof.
"EXPECTED INTEREST COLLECTIONS" means, with respect to any month in a
Collection Period, the sum of (i) the amount of interest accrued, net of amounts
required by the Higher Education Act to be paid to the Department or to be
repaid to borrowers, with respect to the Financed Student Loans for such month
(whether or not such interest is actually paid), (ii) all Interest Subsidy
Payments and Special Allowance Payments expected to be received by the Eligible
Lender Trustee for such month (whether or not actually received) with respect to
the Financed Student Loans and (iii) Investment Earnings for such month.
"EXPENSES" means any and all liabilities, obligations, losses, damages,
taxes, claims, actions and suits, and any and all reasonable costs, expenses and
disbursements (including reasonable legal fees and expenses) of any kind and
nature whatsoever which may at any time be imposed on, incurred by, or asserted
against the Eligible Lender Trustee or any of its officers, directors or agents
in any way relating to or arising out of the Trust Agreement, the other Basic
Documents, the Trust Estate, the administration of the Trust Estate or the
action or inaction of the Eligible Lender Trustee under the Trust Agreement or
the other Basic Documents.
"FDIC" means the Federal Deposit Insurance Corporation.
"FINANCED STUDENT LOAN" means any student loan that is guaranteed as to the
payment of principal and interest by a Guarantor and reinsured by the Department
and set forth on Schedule A to the Sale Agreement and the Indenture (which
Schedule may be in the form of microfiche).
"FINANCED STUDENT LOAN FILES" means the documents specified in Section 2.01
of the Master Servicing Agreement.
"FITCH" means Fitch Investors Services, L.P.
"GRANT" means mortgage, pledge, bargain, sell, warrant, alienate, remise,
release, convey, assign, transfer, create, and ▇▇▇▇▇ ▇ ▇▇▇▇ upon and a security
interest in and right of set-off against, deposit, set over and confirm pursuant
to the Indenture. A Grant of the Collateral or of any other agreement or
instrument shall include all rights, powers and options (but none of the
obligations) of the Granting party thereunder, including the immediate and
continuing right to claim for, collect, receive and give receipt for principal
and interest payments in respect of the Collateral and all other moneys payable
thereunder, to give and receive notices and other communications, to make
waivers or other agreements, to exercise all rights and options, to bring
Proceedings in the name of the Granting party or otherwise and generally to do
and receive anything that the Granting party is or may be entitled to do or
receive thereunder or with respect thereto.
"GUARANTEE AGREEMENTS" means (i) in the case of PHEAA, the Lender Agreement
and the Lender Participation Agreement for Consolidation Loans, in each case
dated as of June ____, 1997, between PHEAA and the Eligible Lender Trustee on
behalf of the Issuer, (ii) in the case of NJHEAA, the Guaranty Loan Agreement,
dated as of June ___, 1997, between NJHEAA and the Eligible Lender Trustee on
behalf of the Issuer, (iii) in the case of CSLF, the Lender Agreement, dated as
of June ____, 1997, between CSLF and the Eligible Lender Trustee on behalf of
the Issuer, (iv) in the case of NYSHESC, the Loan Guarantee Agreement, dated as
of June ___, 1997, between NYSHESC and the Eligible Lender Trustee on behalf of
the Issuer and (v) in the case of USAF, the Agreement to Guarantee Loans, dated
as of June ___, 1997, between USAF and the Eligible Lender Trustee on behalf of
the Issuer.
"GUARANTEE PAYMENT" means any payment made by a Guarantor pursuant to a
Guarantee Agreement in respect of a Financed Student Loan.
"GUARANTORS" means PHEAA, NJHEAA, CSLF, NYSHESC and USAF.
"HIGHER EDUCATION ACT" means the Higher Education Act of 1965, as amended,
together with any rules, regulations and interpretations thereunder.
"INDENTURE" means the Indenture dated as of June 1, 1997, between the
Issuer and the Indenture Trustee.
"INDENTURE TRUST ESTATE" means all money, instruments, rights and other
property that are subject or intended to be subject to the lien and security
interest of the Indenture for the benefit of the Noteholders (including all
property and interests Granted to the Indenture Trustee), including all proceeds
thereof.
"INDENTURE TRUSTEE" means Bankers Trust Corporation, a New York banking
corporation, not in its individual capacity but solely as Indenture Trustee
under the Indenture.
"INDEPENDENT" means, when used with respect to any specified Person, that
the Person (a) is in fact independent of the Issuer, any other obligor upon the
Notes, the Seller and any Affiliate of any of the foregoing Persons, (b) does
not have any direct financial interest or any material indirect financial
interest in the Issuer, any such other obligor, the Seller or any Affiliate of
any of the foregoing Persons and (c) is not connected with the Issuer, any such
other obligor, the Seller or any Affiliate of any of the foregoing Persons as an
officer, employee, promoter, underwriter, trustee, partner, director or person
performing similar functions.
"INDEPENDENT CERTIFICATE" means a certificate or opinion to be delivered to
the Indenture Trustee under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 11.01 of the Indenture,
made by an Independent appraiser or other expert appointed by an Issuer Order
and approved by the Indenture Trustee in the exercise of reasonable care, and
such opinion or certificate shall state that the signer has read the definition
of "Independent" in the Indenture and that the signer is Independent within the
meaning thereof.
"INITIAL CERTIFICATE BALANCE" means $__________.
"INITIAL POOL BALANCE" means the Pool Balance as of the Cutoff Date, which
is $______________.
"INSOLVENCY EVENT" means, with respect to a specified Person, (a) the
filing of a decree or order for relief by a court having jurisdiction in the
premises in respect of such Person or any substantial part of its property 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 for
such Person or for any substantial part of its property, or ordering the
winding-up or liquidation of such Person's affairs, and such decree or order
shall remain unstayed and in effect for a period of 60 consecutive days; or (b)
the commencement by such Person 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 such Person to the entry of an order for relief in an
involuntary case under any such law, or the consent by such Person to the
appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official for such Person or for any
substantial part of its property, or the making by such Person of any general
assignment for the benefit of creditors, or the failure by such Person generally
to pay its debts as such debts become due, or the taking of action by such
Person in furtherance of any of the foregoing.
"INTEREST COLLECTIONS" shall have the meaning specified in Section 4.03(a)
of the Master Servicing Agreement.
"INTEREST PERIOD" means, with respect to a Distribution Date, the period
from and including the Closing Date or the most recent Distribution Date on
which interest on the Notes or the Certificates, as the case may be, has been
distributed, to but excluding the current Distribution Date.
"INTEREST SUBSIDY PAYMENTS" means payments, designated as such, consisting
of interest subsidies by the Department in respect of the Financed Student Loans
to the Eligible Lender Trustee on behalf of the Trust in accordance with the
Higher Education Act.
"INVESTMENT EARNINGS" means, with respect to any Monthly Payment Date or
Distribution Date, the investment earnings (net of losses and investment
expenses) on amounts on deposit in the Trust Accounts.
"ISSUER" means First Union Student Loan Trust 1997-1 until a successor
replaces it and, thereafter, means the successor and, for purposes of any
provision contained in the Indenture and required by the TIA, each other obligor
on the Notes.
"ISSUER ORDER" and "ISSUER REQUEST" means a written order or request signed
in the name of the Issuer by any one of its Authorized Officers and delivered to
the Indenture Trustee.
"LIEN" means a security interest, lien, charge, pledge, equity or
encumbrance of any kind, other than tax liens and any other liens, if any, which
attach to the respective Financed Student Loan by operation of law as a result
of any act or omission by the related Obligor.
"LIQUIDATED STUDENT LOAN" means any defaulted Financed Student Loan
liquidated by the Master Servicer.
"LIQUIDATION PROCEEDS" means, with respect to any Liquidated Student Loan,
the moneys collected in respect thereof from whatever source, other than
Recoveries, net of expenses incurred by the Master Servicer in connection with
such liquidation and any amounts required by law to be remitted to the borrower
on such Liquidated Student Loan.
"LOCK-IN PERIOD" means the period of days preceding any Distribution Date
during which each Note Interest Rate or Certificate Rate, as applicable, in
effect on the first day of such period shall remain in effect until the end of
the Interest Period related to such Distribution Date.
"MASTER SERVICER" means First Union National Bank, a national banking
association having its main office in Charlotte, North Carolina, in its capacity
as Master Servicer on behalf of the Trust.
"MASTER SERVICER DEFAULT" means an event specified in Section 7.01(a) of
the Master Servicing Agreement.
"MASTER SERVICER'S REPORT" means any report of the Master Servicer
delivered pursuant to Section 3.08(a) of the Master Servicing Agreement,
substantially in the form acceptable to the Administrator.
"MASTER SERVICING AGREEMENT" means the Master Servicing Agreement dated as
of June 1, 1997, among the Issuer, the Master Servicer, the Administrator and
the Eligible Lender Trustee.
"MINIMUM PURCHASE AMOUNT" means an amount that would be sufficient to (i)
reduce the outstanding principal amount of each class of Notes then outstanding
on such Distribution Date to zero, (ii) pay to Noteholders the Noteholders'
Interest Distribution Amount payable on such Distribution Date, (iii) reduce the
Certificate Balance to zero, (iv) pay to the Certificateholders the
Certificateholders' Interest Distribution Amount payable on such Distribution
Date and (v) pay the aggregate fees and expenses of an auction of the assets of
the Trust.
"MONTHLY SERVICING PAYMENT DATE" means the [ ] day of each calendar month,
or, if such day is not a Business Day, the immediately following Business Day,
commencing on ____________, 1997.
"MOODY'S" means ▇▇▇▇▇'▇ Investors Service, Inc.
"NJHEAA" means the New Jersey Higher Education Assistance Authority, an
agency of the State of New Jersey.
"NOTE" means the Class A-1 Notes and the Class A-2 Notes.
"NOTE DEPOSITORY AGREEMENT" means the agreement dated as of the Closing
Date relating to the Notes, substantially in the form of Exhibit C to the
Indenture, among the Issuer, the Indenture Trustee, the Administrator and The
Depository Trust Company, as the initial Clearing Agency.
"NOTE FINAL MATURITY DATE" means the Class A-1 Final Maturity Date and the
Class A-2 Final Maturity Date, as applicable.
"NOTE INTEREST RATE" means the Class A-1 Rate and the Class A-2 Rate, as
applicable.
"NOTE OWNER" means, with respect to a Book-Entry Note, the Person who is
the owner of such Book-Entry Note, as reflected on the books of the Clearing
Agency, or on the books of a Person maintaining an account with such Clearing
Agency (directly as a Clearing Agency Participant or as an indirect participant,
in each case in accordance with the rules of such Clearing Agency).
"NOTE POOL FACTOR" as of the close of business on a Distribution Date means
a seven-digit decimal figure equal to the outstanding principal balance of the
Notes of either class divided by the original outstanding principal balance of
the Notes of each class. The Note Pool Factor of each class will be 1.0000000 as
of the Closing Date; thereafter, the Note Pool Factor will decline to reflect
any reductions in the outstanding principal balance of the Notes of each class.
"NOTE REGISTER" and "NOTE REGISTRAR" have the respective meanings specified
in Section 2.04 of the Indenture.
"NOTEHOLDER" means the Person in whose name a Note is registered in the
Note Register.
"NOTEHOLDERS' DISTRIBUTION AMOUNT" means, with respect to any Distribution
Date, the sum of the Noteholders' Interest Distribution Amount and the
Noteholders' Principal Distribution Amount for such Distribution Date.
"NOTEHOLDERS' INTEREST DISTRIBUTION AMOUNT" means, with respect to any
Distribution Date, the sum of (i) the amount of interest accrued at the
respective Note Interest Rate for the related Interest Period on the aggregate
outstanding principal balances of both classes of Notes on the immediately
preceding Distribution Date after giving effect to all principal distributions
to Noteholders on such date (or, in the case of the first Distribution Date, on
the Closing Date) and (ii) the Noteholders' Interest Shortfall for such
Distribution Date; provided, however, that the Noteholders' Interest
Distribution Amount will not include any Noteholders' Interest Index Carryover.
"NOTEHOLDERS' INTEREST INDEX CARRYOVER" means, for any Distribution Date on
which the Class A-1 Rate or the Class A-2 Rate is based on the Student Loan
Rate, the excess of (a) the amount of interest on the Class A-1 Notes or the
Class A-2 Notes, as the case may be, that would have accrued in respect of the
related Interest Period had interest been calculated without regard to the
Student Loan Rate over (b) the amount of interest on the Class A-1 Notes or the
Class A-2 Notes, as the case may be, actually accrued in respect of such
Interest Period based on the Student Loan Rate, together with the unpaid portion
of any such excess from prior Distribution Dates and Interest accrued thereon at
the applicable Note Rate without regard to the Student Loan Rate; PROVIDED,
HOWEVER, that on any Distribution Date after the principal balance of the Class
A-1 Notes or the Class A-2 Notes, as the case may be, has been paid in full, the
Noteholders' Interest Index Carryover for such class shall be equal to zero.
"NOTEHOLDERS' INTEREST SHORTFALL" means, with respect to any Distribution
Date, the excess of (i) the Noteholders' Interest Distribution Amount on the
preceding Distribution Date over (ii) the amount of interest actually
distributed to the Noteholders on such preceding Distribution Date, plus
interest on the amount of such excess interest due to the Noteholders, to the
extent permitted by law, at the weighted average of the Class A-1 Rate and the
Class A-2 Rate from such preceding Distribution Date to the current Distribution
Date.
"NOTEHOLDERS' PERCENTAGE" means a fraction, expressed as a percentage, the
numerator of which is the principal amount of the Notes issued on the Closing
Date and the denominator of which is the sum of the principal amount of the
Notes issued on the Closing Date and the principal balance of the Certificates
issued on the Closing Date.
"NOTEHOLDERS' PRINCIPAL DISTRIBUTION AMOUNT" means, with respect to any
Distribution Date, the Principal Distribution Amount for such Distribution Date
plus the Noteholders' Principal Shortfall as of the close of the preceding
Distribution Date; provided that the Noteholders' Principal Distribution Amount
will not exceed the outstanding principal balance of the Notes. In addition, (i)
on the Class A-1 Final Maturity Date, the principal required to be distributed
to the Class A-1 Noteholders will include the amount required to reduce the
outstanding principal balance of the Class A-1 Notes to zero, and (ii) on the
Class A-2 Final Maturity Date, the principal required to be distributed to the
Class A-2 Noteholders will include the amount required to reduce the outstanding
principal balance of the Class A-2 Notes to zero.
"NOTEHOLDERS' PRINCIPAL SHORTFALL" means, as of the close of any
Distribution Date, the excess of (i) the Noteholders' Principal Distribution
Amount on such Distribution Date over (ii) the amount of principal actually
distributed to the Noteholders on such Distribution Date.
"NYSHESC" means the N.Y. State Higher Education Services Corporation, an
agency of the State of New York.
"OBLIGOR" on a Financed Student Loan means the borrower or co-borrowers of
such Financed Student Loan and any other Person who owes payments in respect of
such Financed Student Loan, including the Guarantor thereof and, with respect to
any Interest Subsidy Payment or Special Allowance Payment thereon, the
Department.
"OFFICER'S CERTIFICATE" means (i) in the case of the Issuer, a certificate
signed by any Authorized Officer of the Issuer, under the circumstances
described in, and otherwise complying with, the applicable requirements of
Section 11.01 of the Indenture, and delivered to the Indenture Trustee, (ii) in
the case of the Seller, a certificate signed by any Authorized Officer of the
Seller and (iii) in the case of the Master Servicer or the Administrator, a
certificate signed by any Authorized Officer of the Master Servicer or the
Administrator, as appropriate.
"OPINION OF COUNSEL" means (i) with respect to the Issuer, one or more
written opinions of counsel who may, except as otherwise expressly provided in
the Indenture, be employees of or counsel to the Issuer and who shall be
satisfactory to the Indenture Trustee, and which opinion or opinions shall be
addressed to the Indenture Trustee as Indenture Trustee, shall comply with any
applicable requirements of Section 11.01 of the Indenture, and shall be in form
and substance satisfactory to the Indenture Trustee and (ii) with respect to the
Seller, the Administrator or the Master Servicer, one or more written opinions
of counsel who may be an employee of or counsel to the Seller, the Administrator
or the Master Servicer, which counsel shall be acceptable to the Indenture
Trustee, the Eligible Lender Trustee or the Rating Agencies, as applicable.
"ORIGINATION FEE" means the origination fee payable to the Department by
the lender with respect to any Financed Student Loan (including Consolidation
Loans) made on or after October 1, 1993, equal to 0.50% of the initial principal
balance of such loan.
"OUTSTANDING" means, as of the date of determination, all Notes theretofore
authenticated and delivered under the Indenture except:
(i) Notes theretofore cancelled by the Note Registrar or delivered to the
Note Registrar for cancellation;
(ii) Notes or portions thereof the payment for which money in the necessary
amount has been theretofore deposited with the Indenture Trustee or
any Paying Agent in trust for the Noteholders thereof (PROVIDED,
HOWEVER, that if such Notes are to be redeemed, notice of such
redemption has been duly given pursuant to the Indenture); and
(iii)Notes in exchange for or in lieu of other Notes which have been
authenticated and delivered pursuant to the Indenture unless proof
satisfactory to the Indenture Trustee is presented that any such Notes
are held by a bona fide purchaser; PROVIDED that in determining
whether the Noteholders of the requisite Outstanding Amount of the
Notes have given any request, demand, authorization, direction,
notice, consent or waiver hereunder or under any other Basic Document,
Notes owned by the Issuer, any other obligor upon the Notes, the
Seller or any Affiliate of any of the foregoing Persons shall be
disregarded and deemed not to be Outstanding, except that, in
determining whether the Indenture Trustee shall be protected in
relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Notes that a Responsible Officer of
the Indenture Trustee either actually knows to be so owned or has
received written notice thereof shall be so disregarded. Notes so
owned that have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the
Indenture Trustee the pledgee's right so to act with respect to such
Notes and that the pledgee is not the Issuer, any other obligor upon
the Notes, the Seller or any Affiliate of any of the foregoing
Persons.
"OUTSTANDING AMOUNT" means the aggregate principal amount of all Notes
Outstanding at the date of determination.
"PAYING AGENT" means the Indenture Trustee or any other Person that meets
the eligibility standards for the Indenture Trustee specified in Section 6.11 of
the Indenture and is authorized by the Issuer to make the payments to and
distributions from the Collection Account and payments of principal of and
interest and any other amounts owing on the Notes on behalf of the Issuer.
"PERSON" means any individual, corporation, estate, partnership, joint
venture, association, joint stock company, trust (including any beneficiary
thereof), unincorporated organization or government or any agency or political
subdivision thereof.
"PHEAA" means the Pennsylvania Higher Education Assistance Agency, an
agency of the Commonwealth of Pennsylvania.
"PHYSICAL PROPERTY" has the meaning assigned to such term in the definition
of "Delivery" above.
"POOL BALANCE" means, at any time, the aggregate principal balance of the
Financed Student Loans at the end of the preceding Collection Period including
accrued interest thereon for such Collection Period to the extent such interest
will be capitalized upon commencement of repayment, after giving effect to the
following without duplication: (i) all payments received by the Trust during
such Collection Period from or on behalf of Obligors, (ii) all Purchase Amounts
received by the Trust for such Collection Period from the Seller or the Master
Servicer and (iii) all losses realized on Financed Student Loans liquidated
during such Collection Period.
"PREDECESSOR NOTE" means, with respect to any particular Note, every
previous Note evidencing all or a portion of the same debt as that evidenced by
such particular Note; and, for the purpose of this definition, any Note
authenticated and delivered under Section 2.05 of the Indenture and in lieu of a
mutilated, lost, destroyed or stolen Note shall be deemed to evidence the same
debt as the mutilated, lost, destroyed or stolen Note.
"PRINCIPAL DISTRIBUTION AMOUNT" means (i) with respect to the initial
Distribution Date, the amount by which the sum of the outstanding principal
amount of the Notes and the Certificate Balance exceeds the Adjusted Pool
Balance for such Distribution Date and (ii) with respect to each subsequent
Distribution Date, the amount by which the Adjusted Pool Balance for the
preceding Distribution Date exceeds the Adjusted Pool Balance for such
Distribution Date.
"PROCEEDING" means any suit in equity, action at law or other judicial or
administrative proceeding.
"PURCHASE AMOUNT" means, as of the close of business on the last day of a
Collection Period, 100% (or 98%, in the case of any Financed Student Loan
disbursed on or after October 1, 1993, if the related borrower is in default
under such Financed Student Loan) of the amount required to prepay in full the
respective Financed Student Loan under the terms thereof including all accrued
interest thereon and any lost Interest Subsidy Payments and Special Allowance
Payments with respect thereto.
"PURCHASED STUDENT LOAN" means a Financed Student Loan purchased as of the
close of business on the last day of a Collection Period by the Master Servicer
pursuant to Section 3.06 of the Master Servicing Agreement or repurchased by the
Seller pursuant to Section 3.02 of the Sale Agreement.
"RATING AGENCY" means ▇▇▇▇▇'▇ and Fitch. If no such organization or
successor is any longer in existence, "Rating Agency" shall be a nationally
recognized statistical rating organization or other comparable Person designated
by the Seller, notice of which designation shall be given to the Indenture
Trustee, the Eligible Lender Trustee and the Master Servicer.
"RATING AGENCY CONDITION" means, with respect to any action, that each
Rating Agency shall have been given 10 days' prior notice thereof and that each
of the Rating Agencies shall have notified the Seller, the Master Servicer, the
Eligible Lender Trustee and the Indenture Trustee in writing that such action
will not result in and of itself in a reduction or withdrawal of the then
current rating of the Notes or the Certificates.
"REALIZED LOSS" means the excess of the principal balance (including any
interest that had been or had been expected to be capitalized) of any Liquidated
Student Loan over Liquidation Proceeds with respect to such Student Loan to the
extent allocable to principal (including any interest that had been or had been
expected to be capitalized).
"RECORD DATE" means, with respect to a Monthly Servicing Payment Date,
Distribution Date or Redemption Date, the close of business on the Business Day
preceding such Monthly Servicing Payment Date, Distribution Date or Redemption
Date.
"RECOVERIES" means, with respect to any Liquidated Student Loan, moneys
collected in respect thereof, from whatever source, during any Collection Period
following the Collection Period in which such Financed Student Loan became a
Liquidated Student Loan, net of the sum of any amounts expended by the Master
Servicer for the account of any Obligor and any amounts required by law to be
remitted to the Obligor.
"RESERVE ACCOUNT" means the account designated as such, established and
maintained pursuant to Section 4.01 of the Master Servicing Agreement.
"RESERVE ACCOUNT INITIAL DEPOSIT" means $__________.
"RESPONSIBLE OFFICER" means, with respect to the Indenture Trustee, any
officer within the Corporate Trust Office of the Indenture Trustee, including
any Managing Director, Vice President, Assistant Vice President, Assistant
Treasurer, Assistant Secretary, or any other officer of the Indenture Trustee
customarily performing functions similar to those performed by any of the above
designated officers, with direct responsibility for the administration of the
Indenture and the other Basic Documents on behalf of the Indenture Trustee and
also, with respect to a particular matter, any other officer to whom such matter
is referred because of such officer's knowledge of and familiarity with the
particular subject.
"SALE AGREEMENT" means the Sale Agreement dated as of June 1, 1997, among
the Issuer, the Seller and the Eligible Lender Trustee.
"SCHEDULE OF FINANCED STUDENT LOANS" means the listing of the Financed
Student Loans set forth in Schedule A to the Sale Agreement and to the Indenture
(which Schedule may be in the form of microfiche).
"SELLER" means First Union National Bank, a national banking association
having its main office in Avondale, Pennsylvania, in its capacity as Seller.
"SERVICING FEE" has the meaning specified in Schedule C to the Master
Servicing Agreement.
"SLS LOAN" means a Financed Student Loan designated as such that is made
under the Federal Supplemental Loans for Students Program pursuant to the Higher
Education Act.
"SPECIAL ALLOWANCE PAYMENTS" means payments, designated as such, consisting
of effective interest subsidies by the Department in respect of the Financed
Student Loans to the Eligible Lender Trustee on behalf of the Trust in
accordance with the Higher Education Act.
"SPECIFIED RESERVE ACCOUNT BALANCE" with respect to any Distribution Date
generally will be equal to the greater of (i) ___% of the Pool Balance in each
case as of the close of business on the last day of the related Collection
Period and (ii) $_________; PROVIDED, HOWEVER, that in no event will such
balance exceed the sum of the outstanding principal amount of the Notes and the
outstanding principal balance of the Certificates.
"▇▇▇▇▇▇▇▇ LOAN" means a Financed Student Loan designated as such that is
made under the Federal ▇▇▇▇▇▇▇▇ Loan Program in accordance with the Higher
Education Act.
"STATE" means any one of the ▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ or
the District of Columbia.
"STUDENT LOAN RATE" means, for any Interest Period, the product of (a) the
quotient obtained by dividing (i) 365 (or 366 in a leap year) by (ii) the actual
number of days elapsed in such Interest Period and (b) the percentage equivalent
of a fraction, (i) the numerator of which is equal to Expected Interest
Collections for the Collection Period relating to such Interest Period less the
Servicing Fees and the Administration Fee payable on the related Distribution
Date and any Servicing Fees paid on the two preceding monthly Servicing Payment
Dates during the related Collection Period and (ii) the denominator of which is
the Pool Balance.
"SUCCESSOR ADMINISTRATOR" has the meaning specified in Section 3.07(e) of
the Indenture.
"SUCCESSOR SERVICER" has the meaning specified in Section 3.07(e) of the
Indenture.
"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.
"TREASURY REGULATIONS" means regulations, including proposed or temporary
regulations, promulgated under the Code. References in any document or
instrument to specific provisions of proposed or temporary regulations shall
include analogous provisions of final Treasury Regulations or other successor
Treasury Regulations.
"TRUST" means the Issuer, established pursuant to the Trust Agreement.
"TRUST ACCOUNT PROPERTY" means the Trust Accounts, all amounts and
investments held from time to time in any Trust Account (whether in the form of
deposit accounts, Physical Property, book-entry securities, uncertificated
securities or otherwise), including the Reserve Account Initial Deposit, and all
proceeds of the foregoing.
"TRUST ACCOUNTS" has the meaning specified in Section 4.01 of the Master
Servicing Agreement.
"TRUST AGREEMENT" means the Trust Agreement dated as of June [__] 1997,
between the Depositor and the Eligible Lender Trustee.
"TRUST CERTIFICATE" means a Certificate.
"TRUST ESTATE" means all right, title and interest of the Trust (or the
Eligible Lender Trustee on behalf of the Trust) in and to the property and
rights assigned to the Trust pursuant to Article II of the Sale Agreement, all
funds on deposit from time to time in the Trust Accounts and all other property
of the Trust from time to time, including any rights of the Eligible Lender
Trustee and the Trust pursuant to the Sale Agreement and the Administration
Agreement.
"TRUST FEES" means the fees of the Indenture Trustee, the Servicing Fee,
the Administration Fee and the fees of the Eligible Lender Trustee.
"TRUST INDENTURE ACT" or "TIA" means the Trust Indenture Act of 1939 as in
force on the date hereof, unless otherwise specifically provided.
"UCC" means, unless the context otherwise requires, the Uniform Commercial
Code, as in effect in the relevant jurisdiction, as amended from time to time.
"USAF" means the United States Aid Funds, Inc., a non-profit corporation.