Exhibit 10.66
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GENERAL INDENTURE
between
CFLD-I, INC.
and
ZIONS FIRST NATIONAL BANK,
as Trustee
Relating To
Student Loan Asset Backed Notes
Dated as of April 1, 2001
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS, INTERPRETATION
Section 1.01. Definitions..................................................... 5
Section 1.02. Interpretation.................................................. 19
ARTICLE II
TERMS OF NOTES
Section 2.01. Authorization of Notes.......................................... 21
Section 2.02. Issuance and Delivery of Notes.................................. 21
Section 2.03. Conditions Precedent to Delivery of Notes....................... 21
Section 2.04. Limited Obligations of Corporation.............................. 23
ARTICLE III
GENERAL TERMS AND PROVISIONS OF NOTES
Section 3.01. Place, Medium of Payment Denomination, Maturities, Credit
or Liquidity Facilities, Form and Date.......................... 23
Section 3.02. Legends......................................................... 25
Section 3.03. Interchangeability of Notes..................................... 25
Section 3.04. Negotiability, Transfer and Registry............................ 25
Section 3.05. Persons Treated as Registered Owners............................ 25
Section 3.06. Regulations With Respect to Exchanges and Transfers............. 26
Section 3.07. Notes Mutilated, Destroyed, Stolen or Lost...................... 26
Section 3.08. Cancellation of Notes........................................... 26
Section 3.09. Security Depository Procedures.................................. 26
Section 3.10. Preparation of Definitive Notes; Temporary Notes................ 26
Section 3.11. Execution and Authentication.................................... 27
ARTICLE IV
APPLICATION OF NOTE PROCEEDS AND OTHER AMOUNTS
Section 4.01. Application of Note Proceeds, Accrued Interest and Premium...... 28
Section 4.02. Application of Proceeds of Refinancing.......................... 28
Section 4.03. Application of Amounts Pledged as Security for Notes Defeased... 28
ARTICLE V
PLEDGE OF INDENTURE; ESTABLISHMENT OF FUNDS AND ACCOUNTS
Section 5.01. Pledge Effected by Indenture; Priority.......................... 29
Section 5.02. Creation of Funds............................................... 29
Section 5.03. Acquisition Fund................................................ 30
Section 5.04. Revenue Fund.................................................... 31
Section 5.05. Note Fund....................................................... 37
Section 5.06. Credit Proceeds Fund............................................ 37
Section 5.07. Debt Service Reserve Fund....................................... 38
Section 5.08. Operating Fund.................................................. 38
Section 5.09. Purchase Fund................................................... 39
Section 5.10. Investment of Funds............................................. 39
Section 5.11. Withdrawal of Excess Coverage................................... 40
Section 5.12. Order of Use of Amounts in Funds For Payment of Program
Expenses, Maintenance and Operating Expenses, Notes and
Reimbursement Obligations....................................... 41
Section 5.13. Investment Requirements......................................... 41
ARTICLE VI
REDEMPTION OF NOTES
Section 6.01. Privilege of Redemption and Redemption Price.................... 43
Section 6.02. Optional Redemption............................................. 43
Section 6.03. Mandatory Redemption............................................ 44
Section 6.04. Selection of Notes to Be Redeemed............................... 44
Section 6.05. Notice of Redemption............................................ 45
Section 6.06. Payment of Redeemed Notes....................................... 46
ARTICLE VII
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE CORPORATION
Section 7.01. Payment of Notes................................................ 46
Section 7.02. Designation of Indenture Agents................................. 46
Section 7.03. Power to Issue Notes and Pledge Trust Estate.................... 46
Section 7.04. Further Assurances.............................................. 47
Section 7.05. Accounts and Reports............................................ 47
Section 7.06. Student Loan Program............................................ 47
Section 7.07. Servicing of Financed Student Loans............................. 49
Section 7.08. Issuance of Additional Notes.................................... 49
Section 7.09. Compliance With Conditions Precedent............................ 50
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Section 7.10. General Compliance with Conditions in this Indenture and
any Reimbursement Agreements................................... 50
Section 7.11. Additional Covenants........................................... 50
Section 7.12. Covenant Regarding Financed Student Loans...................... 51
Section 7.13. Continued Existence; Successor of Corporation.................. 52
Section 7.14. Servicer Computer Operations................................... 52
Section 7.15. Representations; Negative Covenants............................ 52
Section 7.16. Corporation Covenants.......................................... 55
ARTICLE VIII
SUPPLEMENTAL INDENTURES NOT REQUIRING CONSENT OF REGISTERED OWNERS
Section 8.01. Supplemental Indentures Not Requiring the Consent of
Registered Owners............................................... 57
Section 8.02. General Provisions.............................................. 59
ARTICLE IX
SUPPLEMENTAL INDENTURES REQUIRING CONSENT OF REGISTERED OWNERS
Section 9.01. Mailing of Notice of Amendment................................. 59
Section 9.02. Powers of Amendment............................................ 60
Section 9.03. Consent of Registered Owners................................... 61
Section 9.04. Modifications by Unanimous Consent............................. 62
Section 9.05. Exclusion of Notes............................................. 62
Section 9.06. Notation on Notes.............................................. 62
ARTICLE X
DEFAULTS AND REMEDIES
Section 10.01. Events of Default.............................................. 62
Section 10.02. Remedies....................................................... 64
Section 10.03. Priority of Payments After Default............................. 66
Section 10.04. Termination of Proceedings..................................... 70
Section 10.05. Registered Owners' Direction of Proceedings.................... 70
Section 10.06. Limitation on Rights of Registered Owners...................... 72
Section 10.07. Possession of Notes by Trustee Not Required.................... 72
Section 10.08. Remedies Not Exclusive......................................... 72
Section 10.09. No Waiver of Default........................................... 73
Section 10.10. Notice of Event of Default; Acceleration....................... 73
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ARTICLE XI
CONCERNING THE INDENTURE AGENTS
Section 11.01. Appointment and Acceptance of Duties of Trustee................ 73
Section 11.02. Appointment and Acceptance of Duties of Paying Agents Note
Registrar and Other Indenture Agents........................... 77
Section 11.03. Responsibility of Indenture Agents............................. 78
Section 11.04. Evidence on Which Indenture Agents May Act..................... 78
Section 11.05. Compensation and Indemnification............................... 79
Section 11.06. Permitted Acts and Functions................................... 79
Section 11.07. Trustee Covenants with Respect to Eligible Lender Status....... 79
Section 11.08. Trustee's Status as an Eligible Lender......................... 79
Section 11.09. Resignation of Trustee......................................... 80
Section 11.10. Removal of Trustee............................................. 80
Section 11.11. Appointment of Successor Trustee............................... 80
Section 11.12. Transfer of Rights and Properly to Successor Trustee........... 81
Section 11.13. Merger or Consolidation........................................ 81
Section 11.14. Adoption of Authentication..................................... 82
Section 11.15. Resignation or Removal of the Tender Agent, Paying Agents,
Registrar and Other Indenture Agents and Appointment of
Successors..................................................... 82
Section 11.16. Evidence of Signatures of Registered Owners and
Ownership of Notes............................................. 82
Section 11.17. Preservation and Inspection of Documents....................... 83
Section 11.18. Statement of Trustee of Funds and Accounts and Other Matters... 83
ARTICLE XII
TERMINATION
Section 12.01. Termination of the Trust....................................... 84
Section 12.02. Notice......................................................... 85
ARTICLE XIII
DEFEASANCE; MISCELLANEOUS PROVISIONS
Section 13.01. Defeasance..................................................... 85
Section 13.02. Delegation of Duties by the Corporation........................ 88
Section 13.03. Appointment of Agents, etc..................................... 88
Section 13.04. Notices........................................................ 88
Section 13.05. Governing Law.................................................. 89
Section 13.06. Notices to Rating Agencies..................................... 89
Section 13.07. Nonliability of Officers....................................... 89
Section 13.08. Parties Interested Herein...................................... 89
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Section 13.09. Counterparts................................................... 89
EXHIBIT A STUDENT LOAN ACQUISITION CERTIFICATE
EXHIBIT B MASTER PROMISSORY NOTE PROVISIONS
EXHIBIT C FINANCED STUDENT LOAN REPORT
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GENERAL INDENTURE
THIS GENERAL INDENTURE, dated as of April 1, 2001 (the "Indenture"), by
and between CFLD-I, INC., a corporation established under the laws of the State
of Delaware (the "Corporation"), and ZIONS FIRST NATIONAL BANK, a national
banking association authorized to accept trusts of the nature established herein
(herein called the "Trustee"):
W I T N E S S E T H:
WHEREAS, The MEGA Life and Health Insurance Company, an Oklahoma
corporation ("MEGA"), and Mid-West National Life Insurance Company of Tennessee,
a Tennessee corporation ("Mid-West"), offer whole life insurance policies with
student loan benefits (the "Life Insurance Policies"); and
WHEREAS, pursuant to the College First Alternative Loan Program (the
"Student Loan Program"), a policyholder under a Life Insurance Policy may obtain
a loan (a "College First Student Loan") to fund the policyholder's children's
educational expenses at an educational institution approved under the Student
Loan Program; and
WHEREAS, the College First Student Loans are presently originated by
Richland State Bank, a South Dakota banking institution ("Richland"), pursuant
to the terms and provision of a Loan Underwriting and Processing Agreement,
dated as of June 12, 2000 (the "Loan Underwriting Agreement"), among Richland,
MEGA and Mid-West; and
WHEREAS, UICI Funding Corp. 2, a Delaware corporation ("UICI Funding"),
has agreed to purchase all of the College First Student Loans originated by
Richland pursuant to the terms and provisions of a Loan Origination and Purchase
Agreement, dated as of June 12, 2000 (the "Loan Origination and Purchase
Agreement"), between Richland and UICI Funding; and
WHEREAS, the Corporation and UICI Funding have entered into a Student Loan
Purchase Agreement, dated April 27, 2001 (the "College First Student Loan
Purchase Agreement"), permitting the Corporation to purchase certain College
First Student Loans owned by UICI Funding; and
WHEREAS, MEGA, Mid-West, UICI Funding and the Corporation are wholly-owned
subsidiaries of UICI, a Delaware corporation ("UICI"); and
WHEREAS, certain College First Student Loans are secured, in part, by an
allocable portion of the cash surrender value of the policyholder's Life
Insurance Policy related to such College First Student Loan (the "Cash Surrender
Value"); and
WHEREAS, a College First Student Loan made to a policyholder who receives
a credit score higher than a certain predetermined level is eligible to be
insured by The Education Resources Institute, Inc., a private non-profit
corporation organized under Chapter 180 of the Massachusetts General Laws
("▇▇▇▇"), pursuant to the terms and provisions of the Amended and Restated
Guaranty Agreement, dated as of December 31, 1999, between UICI and ▇▇▇▇, or a
Guaranty Agreement, dated as of April 1, 2001, between the Corporation and ▇▇▇▇
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(collectively, the "▇▇▇▇ Guaranty Agreement"), or by United Student Aid Funds,
Inc. ("USA Funds"), a Delaware corporation, pursuant to the terms and provisions
of an Amended and Restated Guarantee Agreement, dated as of January 1, 1996 (the
"USA Funds Guarantee Agreement"), among UICI, the Corporation and USA Funds; and
WHEREAS, the Corporation, in the future may desire to purchase other
student loans permitted to be acquired pursuant to this Indenture, including
student loans made pursuant to the Federal Family Education Loan Program (the
"FFELP Loans") under the Higher Education Act of 1965, as amended (the "Higher
Education Act"); and
WHEREAS, pursuant to the Corporation's Articles of Incorporation and this
Indenture, the Corporation is authorized to issue its debt obligations (the
"Notes") to obtain funds to purchase College First Student Loans, FFELP Loans
and other student loans permitted to be acquired pursuant to this Indenture
(collectively, the "Student Loans"); and
WHEREAS, any series of the Notes (a "Series") may be secured by a form of
credit enhancement purchased by the Corporation, including, without limitation,
a letter of credit, bond insurance, a surety bond or a standby bond purchase
agreement (each a "Credit Facility") delivered by the provider of such Credit
Facility (the "Credit Facility Provider"); and
WHEREAS, MBIA Insurance Corporation, a New York stock insurance
corporation, as a Credit Facility Provider, will initially provide each Credit
Facility for the Series 2001 Notes; and
WHEREAS, any Series of the Notes may bear interest at fixed rates (the
"Fixed Rate Notes") or at adjustable rates (the "Adjustable Rate Notes"), and
any Series of Adjustable Rate Notes may be entitled to the benefit of a
liquidity facility purchased by the Corporation (each a "Liquidity Facility")
designed to provide for the payment of the purchase price (the "Purchase Price")
of such Adjustable Rate Notes upon a tender thereof pursuant to this Indenture;
and
WHEREAS, the repayment to a Credit Facility Provider or the provider of a
Liquidity Facility (each a "Liquidity Facility Provider") may be secured by a
reimbursement agreement (each a "Reimbursement Agreement") between the
Corporation and the corresponding Credit Facility Provider or the corresponding
Liquidity Facility Provider; and
WHEREAS, the Corporation may, with the written approval of each Credit
Facility Provider, if any, enter into contracts providing for an interest rate
cap, floor, swap or other similar instrument (each an "Interest Rate Exchange
Agreement") corresponding to one or more Series of the Notes pursuant to the
terms and provisions of this Indenture; and
WHEREAS, the Corporation may purchase a letter of credit, surety bond,
insurance policy, agreement guaranteeing payment or other undertaking by a
financial institution to ensure that cash in an amount required to meet the Debt
Service Reserve Requirement (as such term is hereinafter defined) is available
to the Trustee (a "Debt Service Reserve Policy") from the provider of such Debt
Service Reserve Policy (the "Surety Provider"); and
WHEREAS, the Notes issued hereunder may be issued as (i) senior
obligations (the "Senior Notes"), which are the highest priority Notes permitted
to be issued by this Indenture, (ii) as subordinate obligations (the
"Subordinate Notes"), the repayment of which is subordinated
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to the repayment of the Senior Notes, any Interest Rate Exchange Agreements
(other than any payment due upon termination of the Interest Rate Exchange
Agreement) which are secured on a parity with Senior Notes, any Reimbursement
Agreements which are secured on a parity with Senior Notes and any Debt Service
Reserve Policies, or (iii) as junior-subordinate obligations (the
"Junior-Subordinate Notes"), the repayment of which is subordinated to each of
the Senior Notes, the Subordinate Notes, any Interest Rate Exchange Agreements
(other than any payment due upon termination of the Interest Rate Exchange
Agreement) which are secured on a parity with Senior Notes or Subordinate Notes,
any Reimbursement Agreements which are secured on a parity with Senior Notes or
Subordinate Notes and any Debt Service Reserve Policy; and
WHEREAS, the Notes and, except as otherwise may be provided therein, the
payment obligations under all Reimbursement Agreements, all Interest Rate
Exchange Agreements and all Debt Service Reserve Policies, are secured as
hereinafter provided, but solely by the pledge of the Trust Estate described
herein; provided that (i) the rights of the registered owners (the "Registered
Owners") of the Senior Notes, any Credit Facility Provider and any Liquidity
Facility Providers for Senior Notes, the providers of Interest Rate Exchange
Agreements (other than any payment due upon termination of the Interest Rate
Exchange Agreement) secured on a parity with Senior Notes and any Surety
Provider to such security shall be superior to the rights of the Registered
Owners of Subordinate Notes, the Registered Owners of the Junior-Subordinate
Notes, any Credit Facility Provider and any Liquidity Facility Providers for
Subordinate Notes or Junior-Subordinate Notes and providers of Interest Rate
Exchange Agreements secured on a parity with Subordinate Notes or the
Junior-Subordinate Notes and (ii) the rights of Registered Owners of the
Subordinate Notes, any Credit Facility Provider and any Liquidity Facility
Providers for Subordinate Notes and providers of Interest Rate Exchange
Agreements (other than any payment due upon termination of the Interest Rate
Exchange Agreement) secured on a parity with Subordinate Notes to such security
shall, to the extent provided herein, be superior to the rights of the
Registered Owners of Junior-Subordinate Notes, any Credit Facility Provider and
any Liquidity Facility Providers for Junior-Subordinate Notes and providers of
Interest Rate Exchange Agreements secured on a parity with Junior-Subordinate
Notes; and
WHEREAS, upon execution and delivery of a Supplemental Indenture with
respect to a Series of Notes, all acts, proceedings and things necessary and
required by law to make said Notes, when executed by the Corporation and
authenticated by the Trustee, the valid and binding legal obligations of the
Corporation and to constitute and make this Indenture a valid and effective
Indenture, have been done, taken and performed and the issuance, execution and
delivery of said Notes and the execution, acknowledgment and delivery of this
Indenture have in all respects been duly authorized by the Corporation.
NOW, THEREFORE, THIS INDENTURE WITNESSETH THAT:
In consideration of the premises and of the mutual covenants herein
contained, and of the purchase and acceptance of the Notes by the Registered
Owners thereof, and for other valuable consideration, the receipt whereof is
hereby acknowledged, and for the purpose of fixing and declaring the terms and
conditions upon which the Notes are to be and may be issued, authenticated and
delivered, secured and accepted by all persons who shall from time to time be or
become the Registered Owners thereof, and in order to secure as hereinafter
provided, (a) the
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payment of the principal or Redemption Price (as such term is hereinafter
defined) of, and the interest and any Carry-over Amounts (as such term is
hereinafter defined) (and accrued interest thereon) on, the Notes at any time
issued and Outstanding (as such term is hereinafter defined) under this
Indenture according to their tenor and effect; (b) the performance and
observance of all of the covenants and conditions in the Notes and contained in
this Indenture; and (c) the payment of all amounts owing under any Reimbursement
Agreement, any Interest Rate Exchange Agreement, or to any Credit Facility
Provider, any Surety Provider or any Liquidity Facility Provider, the
Corporation has executed and delivered this Indenture and does hereby bargain,
assign, pledge and grant a security interest, subject to use and applications in
accordance with the provisions hereof, in the following (constituting the "Trust
Estate") to the Trustee:
GRANTING CLAUSES
CLAUSE I
All Financed Student Loans (as such term is hereinafter defined),
including any evidence of indebtedness, including agreements and notes made by
Financed Student Loan borrowers and cosigners and any and all other contracts,
instruments and documents executed and delivered by the Financed Student Loan
borrowers, cosigners or any other party evidencing, relating to, arising out of
or in any way connected with such Financed Student Loans, including the right to
receive the allocable portion of the Cash Surrender Value and death benefits of
any Life Insurance Policy related to such Financed Student Loan, and any
insurance or guarantees related to such Financed Student Loans, and extensions
or renewals thereof;
CLAUSE II
All proceeds of the Notes, all Revenues and Recoveries of Principal (as
each such term is hereinafter defined) and all other amounts deposited in the
Funds and Accounts (as such term is hereinafter defined) until their use or
release from the Funds and Accounts. Such Note proceeds, Revenues, Recoveries of
Principal and other deposits may take the form of moneys, securities, accounts,
chattel paper, instruments, and general intangibles;
CLAUSE III
The rights of the Corporation in and to all Servicing Agreements, all
Student Loan Purchase Agreements and all Guarantee Agreements (as each such term
is hereinafter defined) as the same relate to the Financed Student Loans; and
CLAUSE IV
Any and all other real or personal property of every name and nature, from
time to time hereafter by delivery or by writing of any kind conveyed,
mortgaged, pledged, assigned or transferred as and for additional security
hereunder by the Corporation or by anyone on its behalf or with its written
consent to the Trustee, which is hereby authorized to receive any and all such
property at any and all times and to hold and apply the same subject to the
terms hereof.
TO HAVE AND TO HOLD the same unto the Trustee and its successor or
successors and its or their assigns forever, in trust, nevertheless, for the
following beneficiaries, as their
4
interests may appear: Registered Owners of the Notes, any Credit Facility
Provider, any Surety Provider, any Liquidity Facility Provider, and any
counterparty to an Interest Rate Exchange Agreement.
IN TRUST NEVERTHELESS, UPON CONDITION that, if the Corporation shall well
and truly pay, or cause to be paid, the principal of (and premium, if any) and
interest on the Notes according to the true intent and meaning thereof, or there
shall be deposited with the Trustee such amounts in such form in order that none
of the Notes shall remain Outstanding as herein deemed and provided, and shall
pay or cause to be paid all amounts due hereby and all amounts owed to any
Indenture Agent (as such term is hereinafter defined), any Credit Facility
Provider, any Liquidity Facility Provider and any Surety Provider in accordance
with the terms and provisions hereof, of any Reimbursement Agreement and of any
agreement related to the issuance of a Debt Service Reserve Policy, then upon
the full and final payment of all such sums and amounts or upon deposit of the
same, this Indenture and the rights, titles, liens, security interests, and
assignments herein granted shall cease, determine, and be void and this
Indenture shall be released by the Trustee in due form at the expense of the
Corporation, except only as herein provided; otherwise this Indenture to be and
remain in full force and effect.
AND IT IS HEREBY COVENANTED AND DECLARED that the Trust Estate is to be
held and applied by the Trustee, subject to the further covenants, conditions,
and trust hereinafter set forth, and the Corporation does hereby covenant and
agree to and with the Trustee, as follows.
ARTICLE I
DEFINITIONS, INTERPRETATION
Section 1.01. Definitions. In this Indenture, the following words and
terms shall, unless the context otherwise requires, have the following meanings:
"Account" means any of the accounts created and established within any
Fund pursuant to this Indenture.
"Accountant" means Ernst & Young LLP and any other independent certified
public accountant as may be selected by the Corporation and approved in writing
by each Credit Facility Provider, if any.
"Acquisition Fund" means the Fund by that name created in Section 5.02
hereof and further described in Section 5.03 hereof.
"Adjustable Rate Notes" means those Notes whose terms provide for the
adjustment, by auction, by reference to an index or otherwise, of the interest
rate to be borne by such Notes periodically prior to their stated maturity and
may, under the terms of a Supplemental Indenture, provide for mandatory tender
or tender optionally upon demand of the Registered Owner thereof.
"Affiliate" means a Person which is directly or indirectly controlled by
the Corporation or by any other Affiliate and any Person which directly or
indirectly controls the Corporation or which directly or indirectly controls any
other Affiliate; provided, however, that the term
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"Affiliate" shall not include the Corporation. For purposes of this definition,
control means the power to direct the management and policies of a Person
through the ownership of not less than a majority of its voting securities or
the right to designate or elect not less than a majority of the members of its
board of directors or other governing board or body by contract or otherwise.
"Auction Agent" means any Person designated as such pursuant to a
Supplemental Indenture with the written approval of each Credit Facility
Provider, if any.
"Authenticating Agent" means the Trustee or any other Indenture Agent as
may be authorized pursuant to a Supplemental Indenture to perform the acts
required of such agent in conformance with the provisions of this Indenture and
such Supplemental Indenture.
"Authorized Representative" means the President, any Vice President or any
other person designated by the President or any Vice President to act as the
authorized representative of the Corporation hereunder.
"Beneficial Owner" means, when a Series of Notes are in the Book-Entry
Form, any person who acquires a beneficial ownership interest in a Note of that
Series held by the Securities Depository.
"Book-Entry Form" means a form or system under which (a) the beneficial
right to principal and interest may be transferred only through a book entry,
(b) physical securities in registered form are issued only to a Securities
Depository or its nominee as registered owner, with the securities "immobilized"
to the custody of the Securities Depository or its nominee, and (c) the book
entry is the record that identifies the owners of beneficial interests in that
principal and interest.
"Broker-Dealer" means any Person designated as such pursuant to a
Supplemental Indenture with the written approval of each Credit Facility
Provider, if any.
"Business Day" means any day other than a Saturday, Sunday, legal holiday
or any other day on which banking institutions in the City of New York, New
York, or the city in which the principal corporate trust office of the Trustee
is located, are generally authorized or obligated by law or executive order to
close or are closed or rendered inoperable due to natural disaster, or on which
the New York Stock Exchange or on which the office designated for presentation
by each Credit Facility Provider or by each Liquidity Facility Provider then
providing a Liquidity Facility for any of the Notes is closed. The term
"Business Day" shall also not include any date specified as not being a Business
Day in any Supplemental Indenture.
"Capital Appreciation Notes" means those Notes which, by their terms, do
not bear interest, but accrete interest upon the capital portion thereof until
stated maturity or earlier redemption.
"Capitalized Interest Account" means the account by that name that may be
created in the Note Fund pursuant to Section 5.02 hereof and further described
in Section 5.05 hereof.
"Capitalized Expense Account" means the account by that name that may be
created in the Revenue Fund pursuant to Section 5.02 hereof and further
described in Section 5.04 hereof.
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"Carry-over Amount" means, if and to the extent specifically provided for
as such in a Supplemental Indenture with respect to a Series of Adjustable Rate
Notes, the amount, if any, by which (a) the interest payable on such Series with
respect to a given interest period is exceeded by (b) the interest that
otherwise would have been payable with respect to such interest period but for a
stated limitation on the interest rate for such interest period. To the extent
required by a Supplemental Indenture providing for any Carry-over Amount,
interest will accrue on such Carry-over Amount until paid or extinguished. Any
reference to "principal" or "interest" in this Indenture, any Reimbursement
Agreement and in the related Notes shall not include (unless expressly provided
otherwise), within the meanings of such words, any Carry-over Amount or any
interest accrued on any Carry-over Amount.
"Cash Flow Statement" means a Corporation Certificate attaching a cash
flow projection approved in writing by each Credit Facility Provider, if any:
(a) setting forth, for the then current and each future Fiscal Year
during which Notes will be Outstanding, and taking into account (x) any
Notes expected to be issued or converted or redeemed or purchased for
cancellation in each such Fiscal Year upon or in connection with the
filing of such Corporation Certificate, (y) the interest rate, purchase
price, discount or premiums, Interest Subsidy Payments, Special Allowance
Payments and other terms of any Student Loans expected to be purchased or
sold upon or in connection with the filing of such Corporation
Certificate, and (z) the application, withdrawal or transfer of any moneys
expected to be applied, withdrawn or transferred upon or in connection
with the filing of such Corporation Certificate:
(i) the amount of Revenues expected to be received in each
such Fiscal Year together with the balances in the Funds and
Accounts available to make Debt Service Payments and to pay Program
Expenses and Maintenance and Operating Expenses; and
(ii) the aggregate Debt Service for each such Fiscal Year on
all Notes reasonably expected to be Outstanding, together with the
Program Expenses and Maintenance and Operating Expenses reasonably
estimated for each Fiscal Year; and
(b) showing that in each Fiscal Year the aggregate of the amounts
set forth in clause (a)(i) of this definition exceeds the aggregate of the
amounts set forth in clause (a)(ii) of this definition.
"Cash Surrender Value" means the cash surrender value of a Life Insurance
Policy (calculated pursuant to the terms thereof and excluding any annuity
accumulations) corresponding to a Financed Student Loan.
"Certificate" means (a) a signed document either attesting to or
acknowledging the circumstances, representations or other matters stated therein
or in attachments thereto or setting forth matters to be determined pursuant to
this Indenture and any applicable Reimbursement Agreement, or (b) the report of
an Accountant or Authorized Representative as to audits or other
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procedures called for by this Indenture and any applicable Reimbursement
Agreement, as the case may be.
"Code" means the Internal Revenue Code of 1986, as amended, and the
regulations, rulings and court decisions promulgated thereunder and pertaining
thereto.
"College First Student Loan" means a student loan made by MEGA or Mid-West
pursuant to the Student Loan Program.
"College First Student Loan Purchase Agreement" means the Student Loan
Purchase Agreement, dated April 27, 2001, between the Corporation and UICI
Funding and relating to College First Student Loans, as amended and supplemented
pursuant to the terms thereof.
"Corporation" means CFLD-I, Inc., a Delaware corporation, or any Person
which shall hereafter succeed to the powers, duties and functions thereof.
"Corporation Order" means a written order of the Corporation executed by
an Authorized Representative, requiring action on the part of any Indenture
Agent, and certifying such action is in accordance with this Indenture and any
applicable Reimbursement Agreement.
"Costs of Issuance" means all items of expense, directly or indirectly
payable or reimbursable by or to the Corporation and related to the
authorization, sale and issuance of Notes, including, but not limited to,
printing costs, costs of preparation and reproduction of documents, filing and
recording fees, any initial Credit Facility premiums, fees and expenses of any
Credit Facility Provider and its counsel, fees and expenses of any Liquidity
Facility Provider and its counsel, any initial Debt Service Reserve Policy
premiums, fees and expenses of any Surety Provider and its counsel, underwriting
or placement agent fees, fees of an initial purchaser, initial fees and charges
of any Indenture Agent, legal fees, including note counsel fees and expenses and
underwriter's, placement agent's or initial purchaser's counsel fees and charges
(if charged to the Corporation), fees and disbursements of consultants and
professionals, Corporation staff travel and expenses related to an issue of
Notes, cost of credit ratings, fees and charges for preparation, execution,
transportation and safekeeping of Notes and any other cost, charge or fee in
connection with the original issuance of Notes.
"Credit Confirmation" means a letter from each Credit Facility Provider,
if any, confirming that the action proposed by the Corporation is approved by
such Credit Facility Provider.
"Credit Facility" means any form of credit enhancement purchased by the
Corporation for a Series of Notes, including, without limitation, a letter of
credit, bond insurance, a surety bond or a standby bond purchase agreement,
which shall be identified in the Supplemental Indenture for such Series, and may
include as part of the same facility, a liquidity component which, if issued
separately, would constitute a Liquidity Facility.
"Credit Facility Provider" means (i) MBIA Insurance Corporation, a New
York stock insurance corporation, and any successor thereto and (ii) any other
Person approved in writing by MBIA Insurance Corporation (so long as MBIA
Insurance Corporation provides a Credit Facility securing any of the Notes)
which issues a Credit Facility for a Series of Notes; provided,
8
however, that whenever this Indenture shall require the consent, approval or
direction of a Credit Facility Provider, such provision shall mean solely the
consent, approval or direction of MBIA Insurance Corporation, unless MBIA
Insurance Corporation shall no longer provide a Credit Facility securing any
Series of the Notes.
"Credit Proceeds Fund" means the Fund by that name created by Section 5.02
hereof and further described in Section 5.06 hereof.
"Debt Service" means, with respect to any particular Fiscal Year and any
particular Series of Notes, an amount equal to the sum of (a) all interest
payable on such Notes during such Fiscal Year, plus (b) any Principal
Installments of such Notes during such Fiscal Year, plus (c) any additional
applicable premium payable on such Notes during such Fiscal Year, but shall not
include the Purchase Price of Notes or any Carry-over Amounts or interest
thereon.
"Debt Service Reserve Fund" means the Fund by that name created by Section
5.02 hereof and further described in Section 5.07 hereof.
"Debt Service Reserve Policy" means a letter of credit, surety bond,
insurance policy, agreement guaranteeing payment or other undertaking by a
financial institution to ensure that cash in an amount required to meet the Debt
Service Reserve Requirement is available to the Trustee.
"Debt Service Reserve Requirement" means, as of any date of calculation,
the greater of (i) an amount equal to the aggregate of the amounts specified in
each and every Supplemental Indenture authorizing the issuance of a Series of
Notes as the amount required to be deposited in the Debt Service Reserve Fund
with respect to such Series of Notes and approved in writing by each Credit
Facility Provider, if any, and (ii) $500,000.
"Default Claim" means a default claim filed by the Servicer with a
Guarantee Agency under the Servicing Agreement.
"Defaulted Student Loan" means, as of any date of determination either (a)
a FFELP Loan that has been delinquent for 270 days or more, or (b) a Private
Loan for which any installment of principal or interest was not paid when due
(as determined under the related Student Loan documents without regard to any
waiver or forbearance granted by the Corporation or the Servicer) and has
remained unpaid for a period of at least 150 days.
"Dissolution" means, with respect to Article XII hereof and the
Corporation, the occurrence of any of the events which would cause a dissolution
of a limited partnership organized under the laws of the State of Delaware, the
sole general partner of which is the Corporation.
"Eligible Funds" means (a) proceeds of the Notes and the proceeds from the
investment thereof; (b) moneys with respect to which the Trustee receives a
written opinion of nationally recognized counsel experienced in bankruptcy
matters to the effect that payment of such moneys to the Registered Owners of
the Notes would not constitute a voidable preference under Section 544 or 547 of
the Bankruptcy Code and would not be recoverable under Section 550 of
9
the Bankruptcy Code in the event the Corporation or an Affiliate was to become a
debtor under the Bankruptcy Code; or (c) moneys derived from a Credit Facility
or Liquidity Facility.
"Eligible Lender" means any "eligible lender" as defined in the Higher
Education Act which has received an eligible lender designation from the
Secretary with respect to FFELP Loans made under the Higher Education Act.
"Event of Default" means any of the events specified in Section 10.01
hereof.
"Excess Coverage" means, as of any date of calculation, the amount by
which the sum of the value of (a) the Financed Student Loans (valued at par plus
accrued and capitalized interest, including Special Allowance Payments and
Interest Subsidy Payments) credited to the Acquisition Fund, other than
Defaulted Student Loans which are not Guaranteed or Insured, and (b) all cash
and Investment Securities held in the Funds and Accounts (valued as set forth
herein or in a Supplemental Indenture, plus accrued interest, but excluding
amounts irrevocably set aside to pay particular Notes pursuant to Section 13.01
hereof) shall exceed 102.5% (or such lesser percentage with a Credit
Confirmation (or, for Notes not subject to a Credit Facility, a Rating
Confirmation)) of the sum of the principal and accrued interest on all
Outstanding Senior Notes as evidenced in a Certificate of an Authorized
Representative to the Trustee, upon which the Trustee may conclusively rely.
"FFELP Loan" means a loan which (a) is made to an eligible borrower in
compliance with the requirements of the Higher Education Act, (b) is guaranteed
by a Guarantee Agency or Insured by the Secretary, (c) bears interest at not
less than the maximum applicable rate of interest permitted by the Higher
Education Act at the time originated, or a lesser rate of interest shown in a
Cash Flow Statement with the written approval of each Credit Facility Provider,
if any, and (d) is eligible for Special Allowance Payments.
"Financed Student Loan" means any Student Loan that has been (a)
purchased, refinanced or originated with moneys in the Acquisition Fund and
credited to the Acquisition Fund, (b) received in exchange for other Financed
Student Loans upon the sale thereof or substitution therefor in accordance with
Section 7.06(e) hereof or the provisions of a Supplemental Indenture and
credited to the Acquisition Fund, or (c) otherwise credited to any Fund or
Account as part of the Trust Estate, but does not include Student Loans released
from the lien of this Indenture and sold or exchanged, as permitted in this
Indenture, to any purchaser, including the Corporation.
"Fiscal Year" means a 12-month period commencing on the first day of
January of any year, or such other 12-month period adopted by the Corporation as
its fiscal year for accounting purposes.
"Fixed Rate Notes" means those Notes which, by their terms, bear interest
at a specified rate or rates until their stated maturity, payable (except with
respect to Capital Appreciation Notes) periodically so long as such Notes are
Outstanding, all as may be particularly set forth in a Supplemental Indenture.
10
"Fund" means any of the Funds created and established, or further
authorized, pursuant to Section 5.02 hereof, including the Funds and Accounts
and the Credit Proceeds Fund, but excluding the Purchase Fund and the Operating
Fund.
"Funds and Accounts" means the Acquisition Fund, the Revenue Fund, the
Note Fund and the Debt Service Reserve Fund, and any Accounts contained therein,
created pursuant to Section 5.02 hereof.
"Governmental Obligations" means direct obligations of the United States
and other obligations, the principal and interest of which are guaranteed by the
United States as to full and timely payment.
"Guarantee" means with respect to a Student Loan, the insurance or
guarantee of a Guarantee Agency pursuant to such Guarantee Agency's Guarantee
Agreement.
"Guarantee Agency" means The Education Resources Institute, Inc., United
Student Aid Funds, Inc. and any other entity approved in writing by each Credit
Facility Provider, if any, which has entered into an agreement with the
Corporation, or with the Trustee on the Corporation's behalf, which guarantees
student loans under the Student Loan Program, the Higher Education Act or other
Federal law and, with respect to FFELP Loans, has entered into an agreement with
the Secretary for reinsurance of its guarantees of student loans.
"Guarantee Agreement" means the ▇▇▇▇ Guaranty Agreement, the USA Funds
Guarantee Agreement and any other guaranty, insurance or lender agreement
between the Corporation, or the Trustee on the Corporation's behalf, and any
other Guarantee Agency approved in writing by each Credit Facility Provider, if
any.
"Higher Education Act" means the Higher Education Act of 1965, as amended,
or any successor federal act, and the regulations promulgated thereunder.
"Indenture" means, collectively, this General Indenture and any
Supplemental Indentures and any amendments thereto made in accordance with their
respective terms.
"Indenture Agent" means the Trustee, the Registrar, the Authenticating
Agent, any Paying Agent and any Tender Agent, in each case approved in writing
by each Credit Facility Provider, if any, and any such additional agent as may
be authorized pursuant to a Supplemental Indenture and approved in writing by
each Credit Facility Provider, if any, or any or all of them as may be
appropriate.
"Insured" means, with respect to a FFELP Loan, the insuring by the
Secretary (as evidenced by a certificate of insurance or other document or
certification issued under the provisions of the Higher Education Act) of the
maximum allowable percentage of the principal of and accrued interest on such
FFELP Loan.
"Interest Account" means each account by that name created in the Note
Fund with respect to the Senior Notes, the Subordinate Notes and the
Junior-Subordinate Notes pursuant to Section 5.02 hereof and further described
in Section 5.05 hereof.
11
"Interest Payment Date" means any date or dates upon which interest on the
Notes is due and payable in accordance with their terms.
"Interest Rate Exchange Agreement" means a contract providing for an
interest rate cap, floor, swap or other similar instrument entered into pursuant
to Section 7.08 hereof and approved in writing by each Credit Facility Provider,
if any.
"Interest Subsidy Payments" means, with respect to FFELP Loans, interest
subsidy benefits payable by the Secretary under the Higher Education Act, or
similar payments authorized from time to time by federal law.
"Investment Securities" shall have the meaning, for any Series of Notes,
given to that term in any Supplemental Indenture.
"Issue Date" means the date a Series of Notes is delivered to the initial
purchasers in exchange for the purchase price of such Series of Notes.
"Junior-Subordinate Notes" means the Notes of the Corporation designated
as "Junior-Subordinate Notes" pursuant to a Supplemental Indenture authorizing
the issuance of such Junior-Subordinate Notes, the repayment of principal of and
interest on which are subordinated to the repayment of principal of and interest
on the Senior Notes and the Subordinate Notes and payments required to be made
pursuant to any Interest Rate Exchange Agreements, payments required to be made
pursuant to any Reimbursement Agreements secured on a parity with the Senior
Notes or the Subordinate Notes and payments required to be made pursuant to any
Debt Service Reserve Policy.
"Life Insurance Policy" means a whole life insurance policy issued by MEGA
or by Mid-West which contains a student loan benefit.
"Liquidity Facility" means any facility designed to provide for the
payment of the Purchase Price of any Adjustable Rate Notes upon tender thereof.
"Liquidity Facility Provider" means the issuer of a Liquidity Facility.
"Loan Origination and Purchase Agreement" means the Loan Origination and
Purchase Agreement, dated as of June 12, 2000, between Richland and UICI
Funding, as amended and supplemented pursuant to the terms thereof.
"Loan Underwriting Agreement" means the Loan Underwriting and Processing
Agreement, dated as of June 12, 2000, among Richland, MEGA and Mid-West, as
amended and supplemented pursuant to the terms thereof.
"MEGA" means The MEGA Life and Health Insurance Company, an Oklahoma
corporation, and any successor thereto.
"Maintenance and Operating Expenses" means the expenses of the Corporation
incurred in connection the operation of the Student Loan Program and its
acquisition of Student Loans under this Indenture, including consultant's fees,
attorneys' fees, auditing fees, marketing fees,
12
travel expenses of directors and officers, insurance and such other reasonable
and necessary expenses which may be incurred directly or indirectly in
connection with the operation of the Student Loan Program and its acquisition of
Student Loans under this Indenture, but such term shall not include letter of
credit or other credit enhancement or liquidity fees, Note placement fees,
servicing fees and expenses incurred under the Servicing Agreement, Indenture
Agent fees and expenses incurred under this Indenture, any Auction Agent fees
and expenses incurred under an auction agreement, any Broker-Dealer fees and
expenses incurred under a broker-dealer agreement, or any Remarketing Agent fees
and expenses under a remarketing agreement.
"Mid-West" means the Mid-West National Life Insurance Company of
Tennessee, a Tennessee corporation, and any successor thereto.
"Monthly Calculation Date" means the twenty-fifth day of each calendar
month, or in the event such twenty-fifth day is not a Business Day, the next
succeeding Business Day.
"Note" means one of the notes, bonds or other debt securities
authenticated and delivered pursuant to this Indenture, including any additional
or refinancing Notes issued pursuant to Article II hereof.
"Note Fund" means the Fund by that name created by Section 5.02 hereof,
including one or more Capitalized Interest Accounts and a Senior Principal
Account, a Subordinate Principal Account, a Junior-Subordinate Principal
Account, a Senior Interest Account, a Subordinate Interest Account and a
Junior-Subordinate Interest Account established therein, and further described
in Section 5.05 hereof.
"Note Payment Date" means the date or dates specified in any Supplemental
Indenture for payment of principal of or interest on the Notes.
"Operating Fund" means the Fund by that name created by Section 5.02
hereof and further described in Section 5.08 hereof.
"Opinion of Counsel" means a written opinion of an attorney at law or firm
of attorneys selected by the Person obliged to deliver an opinion on the subject
in question, reasonably acceptable to the Person who is to receive the same
hereunder, duly admitted to the practice of law before the highest court of any
state of the United States of America or the District of Columbia.
"Outstanding" when used with reference to the Notes, means, as of any
date, all Notes, including any Notes held in custody for the benefit of any
Credit Facility Provider, theretofore or thereupon being authenticated and
delivered under this Indenture except:
(a) any Note canceled by the Trustee or delivered to the Trustee for
cancellation at or prior to such date;
(b) on or after any purchase date for Notes subject to tender
pursuant to the provisions of any Supplemental Indenture, all Notes or
portions thereof (excluding any Notes held in custody for the benefit of
any Credit Facility Provider) which are tendered
13
or deemed to have been tendered for purchase, provided that moneys
sufficient for such purchase are on deposit with the Trustee or the Tender
Agent;
(c) any Note in lieu of or in substitution for which other Notes
shall have been authenticated and delivered pursuant to Sections 3.07,
6.06 or 9.06 hereof; and
(d) any Note paid or deemed to have been paid as provided in Section
13.01(b) hereof.
"Paying Agent" means the Trustee or any other commercial bank or trust
company designated as paying agent for the Notes, and its successor or
successors hereafter appointed in the manner herein provided and approved in
writing by each Credit Facility Provider, if any.
"Person" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, unincorporated organization or
government or any agency, instrumentality or political subdivision thereof.
"Principal Account" means each account by that name created in the Note
Fund with respect to the Senior Notes, the Subordinate Notes and the
Junior-Subordinate Notes pursuant to Section 5.02 hereof and further described
in Section 5.05 hereof.
"Principal Installment" means, as of any date of calculation, (a) the
aggregate principal amount of Outstanding Notes due on a certain future date,
reduced by the aggregate principal amount of such Notes which would have been
retired by such future date by reason of the payment when due and application in
accordance with this Indenture of Sinking Fund Payments payable before such
certain future date, plus (b) any Sinking Fund Payments due on such certain
future date, plus (c) the principal component of the Redemption Price of the
Notes then having been called for redemption on such certain future date.
"Principal Payment Date" means, with reference to any Series or portion of
a Series of Notes, the date upon which a Principal Installment on such Notes
becomes payable.
"Private Loan" means (a) a loan made to a borrower which (i) has been
originated in material compliance with the Program Manual and (ii) is made to a
borrower to pay the costs of attendance at a school approved for the Student
Loan Program or (b) any other loan approved in writing by each Credit Facility
Provider (or, for Notes not subject to a Credit Facility, a Rating
Confirmation).
"Program Expenses" means (a) the fees and expenses of each Indenture
Agent, (b) fees and expenses of the Auction Agent and Broker-Dealer, (c) the
fees and expenses of any Remarketing Agent then acting under a Supplemental
Indenture with respect to Adjustable Rate Notes, (d) the fees and expenses of a
Credit Facility Provider or a Liquidity Facility Provider following the issuance
of any Series of Notes for which a Credit Facility or Liquidity Facility is in
place, (e) the fees of the Servicer under any Servicing Agreement, (f) the fees
and expenses of the Corporation incurred in connection with the preparation of
Opinions of Counsel and other authorized reports or statements attributable to
the Notes and the Financed Student Loans acquired hereunder, (g) fees and
expenses associated with the delivery of a substitute Credit Facility or
Liquidity Facility under a Supplemental Indenture, (h) fees and expenses
associated
14
with (but not payments under) an Interest Rate Exchange Agreement, (i) the fees
and expenses associated with the purchase of any Debt Service Reserve Policy,
(j) the costs of remarketing any of the Adjustable Rate Notes, which costs shall
be limited to (i) fees and expenses of the financial advisers, underwriters,
placement agents and/or initial purchasers to the Corporation in connection with
a remarketing, (ii) the fees and expenses of attorneys representing the parties
in connection with a remarketing (excluding the attorneys for any Credit
Facility Provider), (iii) the cost of printing in connection with a remarketing,
(iv) the fees and expenses of Accountants in connection with a remarketing, (v)
the fees of any Rating Agency then rating the Notes, and (vi) miscellaneous
reasonable and customary expenses, in each case, as such costs were incurred and
(k) fees or other amounts the Corporation is required to pay to the Secretary in
connection with any FFELP Loan.
"Program Manual" means the College First Alternative Loan Program Manual
which describes the College First Alternative Loan Program for the origination,
acquisition, financing and servicing of Private Loans, as the same may be
amended, revised or supplemented from time to time with respect to the Private
Loans with the written approval of each Credit Facility Provider, if any, or if
there is no Credit Facility Provider, a Rating Confirmation.
"Purchase Date" means any date established for the mandatory or optional
tender of Adjustable Rate Notes, established in accordance with the terms of the
applicable Supplemental Indenture.
"Purchase Fund" means the Fund by that name created by Section 5.02 hereof
and further described in Section 5.09 hereof.
"Purchase Price" means the price due to a tendering Registered Owner of
any Adjustable Rate Note issued hereunder, being the principal amount thereof,
plus interest accrued at the applicable rate or rates to the Purchase Date.
"Rating Agency" means any nationally recognized securities rating agency
to the extent such agency has issued and continues to maintain a rating on a
Series of Notes at the time in question, at the request of the Corporation.
"Rating Confirmation" means a letter from each Rating Agency then
providing a rating for a particular Series of Notes, confirming that the action
proposed to be taken by the Corporation will not, in and of itself, have the
effect of reducing or withdrawing the rating then applicable to that Series of
Notes.
"Rating Notification" means written notice required to be given hereunder
or under any Supplemental Indenture of any action or proposed action provided by
the Corporation to each Rating Agency then providing a rating for a particular
Series of Notes.
"Recoveries of Principal" means all amounts received by the Trustee from
or on account of any Financed Student Loan as a recovery of the principal amount
thereof, including scheduled, delinquent and advance payments, payouts or
prepayments, payments representing the allocable portion of the Cash Surrender
Value of a Life Insurance Policy corresponding to a Financed Student Loan (other
than amounts use to pay interest on the corresponding Financed Student Loan),
proceeds from insurance or from the sale, assignment, transfer, reallocation or
15
other disposition of a Financed Student Loan and any payments representing such
principal from the guarantee or insuring of any Financed Student Loan.
"Redemption Date" means the date upon which Notes are to be called for
redemption pursuant to this Indenture.
"Redemption Price" means, with respect to any Note, the principal amount
thereof, plus the applicable premium, if any, and interest accrued or accreted
to the Redemption Date established for such Note.
"Registered Owner" means any person who shall be the registered owner of
any Outstanding Note as set forth on the registration books maintained by the
Registrar.
"Registrar" means the Trustee, the Authenticating Agent or any other agent
of the Corporation at the office of which Notes may be presented for
registration, transfer or exchange as provided in Section 3.04 hereof.
"Regulations" means the regulations adopted from time to time either by
the Secretary pursuant to the Higher Education Act or by any Guarantee Agency.
"Reimbursement Agreement" means any Credit Facility agreement or Liquidity
Facility agreement by and between the Corporation and any Credit Facility
Provider or any Liquidity Facility Provider.
"Remarketing Agent" means any Person designated as such pursuant to a
Supplemental Indenture.
"Revenue Fund" means the Fund by that name created by Section 5.02 hereof
and further described in Section 5.04 hereof.
"Revenues" means all payments, proceeds, charges and other income, other
than Recoveries of Principal, received by or on behalf of the Corporation from
or on account of any Financed Student Loan (including scheduled, delinquent and
advance payments of and any Default Claim proceeds with respect to, interest due
to or received by or on behalf of, the Corporation with respect to any Financed
Student Loan, including any Cash Surrender Value of a Life Insurance Policy to
be used to pay interest on the corresponding Financed Student Loan) and all
interest earned or gain realized from the investment of amounts in the Funds and
Accounts, and all payments received by or on behalf of the Corporation pursuant
to an Interest Rate Exchange Agreement, but excluding any amounts retained by
the Servicer or Subservicer as fees or expenses in connection with the servicing
of such Financed Student Loan pursuant to the terms and provisions of the
related Servicing Agreement.
"Richland" means Richland State Bank, a South Dakota banking institution,
and any successor thereto.
"Secretary" means the Secretary of the United States Department of
Education.
16
"Securities Depository" means The Depository Trust Company, a New York
corporation, its successors and assigns, or any other security depository
appointed by the Corporation with the written approval of each Credit Facility
Provider, if any.
"Seller" means UICI Funding or any other lender from which the Corporation
purchases Student Loans; provided, however, that any Seller from which the
Corporation purchases FFELP Loans must be an Eligible Lender.
"Senior Notes" means the Notes of the Corporation designated as "Senior
Notes" pursuant to a Supplemental Indenture authorizing the issuance of such
Senior Notes, the repayment of principal of and interest on which are senior to
the repayment of principal of and interest on the Subordinate Notes and the
Junior-Subordinate Notes and payments required to be made pursuant to any
Interest Rate Exchange Agreements and Reimbursement Agreements secured on a
parity with the Subordinate Notes or the Junior-Subordinate Notes.
"Series" means all of the Notes designated as a Series in a Supplemental
Indenture, and any Notes thereafter authenticated and delivered in lieu of or in
substitution for (but not to refinance) such Series of Notes as herein provided.
"Servicer" means, collectively, ▇▇▇▇▇▇ Mae Servicing L.P., EFG
Technologies, Inc., The MEGA Life and Health Insurance Company, UICI Funding, or
any other loan servicer approved in writing by each Credit Facility Provider, if
any, and if no Credit Facility Provider is in place, with a Rating Notification.
"Servicing Agreement" means, collectively, (i) the Master Servicing
Agreement, dated as of April 1, 2001, between the Corporation and UICI Funding
and (ii) any other servicing agreement between the Corporation and a Servicer
under which such Servicer agrees to service Financed Student Loans included in
the Trust Estate, which servicing agreement shall be approved in writing by each
Credit Facility Provider, if any.
"Sinking Fund Payment" means, as of any particular date of calculation,
the amount required to be paid by the Corporation on a certain future date for
the retirement of Outstanding Notes which mature after said future date, but
does not include any amount payable by the Corporation by reason of the maturity
of a Note or by call for redemption at the election of the Corporation.
"Special Allowance Payments" means, with respect to FFELP Loans, certain
incentive payments received by the Corporation pursuant to the Higher Education
Act.
"State" means the State of Delaware.
"Student Loan" means any loan made to finance post-secondary education
that is (a) a FFELP Loan, (b) a Private Loan or (c) otherwise permitted to be
acquired by the Corporation pursuant to this Indenture (provided a Credit
Confirmation (or, for Notes not subject to a Credit Facility, a Rating
Confirmation) is received with respect thereto).
17
"Student Loan Acquisition Certificate" means the Student Loan Acquisition
Certificate in substantially the form attached as Exhibit A hereto, as such
Exhibit A may be amended or supplemented from time to time.
"Student Loan Files" means
(a) the original fully executed copy of the note evidencing the
Financed Student Loan (including the original loan application fully
executed by the Borrower); and
(b) any and all other documents and computerized records that the
Servicer shall keep on file, in accordance with its customary procedures,
relating to such Financed Student Loan or any Obligor with respect
thereto.
"Student Loan Program" means the College First Alternative Loan Program
for the origination, acquisition, holding, servicing and financing of College
First Student Loans, which program is governed by the Program Manual, as may be
amended or supplemented from time to time.
"Student Loan Purchase Agreement" means, collectively, the College First
Student Loan Purchase Agreement and any other agreement approved in writing by
each Credit Facility Provider, if any (or, if there is no Credit Facility
Provider, with a Rating Confirmation), providing for the sale of Student Loans
to the Corporation, or the Trustee on behalf of the Corporation, for deposit
into the Trust Estate.
"Subordinate Notes" means the Notes of the Corporation designated as
"Subordinate Notes" pursuant to a Supplemental Indenture authorizing the
issuance of such Subordinate Notes, the repayment of principal of and interest
on which is subordinated to the repayment of principal of and interest on the
Senior Notes and payments required to be made pursuant to any Interest Rate
Exchange Agreements, payments required to be made pursuant to any Reimbursement
Agreements secured on a parity with the Senior Notes and payments required to be
made pursuant to any Debt Service Reserve Policy, but is senior to the repayment
of principal of and interest on the Junior-Subordinate Notes and payments
required to be made pursuant to any Interest Rate Exchange Agreements and
payments required to be made pursuant to any Reimbursement Agreements secured on
a parity with the Junior-Subordinate Notes.
"Subservicer" means , collectively, ▇▇▇▇▇▇ ▇▇▇ Servicing L.P., EFG
Technologies, Inc., The MEGA Life and Health Insurance Company and any other
subservicer of Financed Student Loans approved in writing by each Credit
Facility Provider, if any, and if no Credit Facility Provider is in place,
appointed by the Servicer with a Rating Notification.
"Supplemental Indenture" means any Indenture supplemental to or amendatory
of this Indenture, executed by the Corporation and the Trustee and effective in
accordance with Article VIII hereof.
"Surety Provider" means the provider of a Debt Service Reserve Policy.
18
"Tender Agent" means any commercial bank or trust company appointed by the
Corporation in accordance with Section 11.02 hereof to serve as the agent for
tender of Adjustable Rate Notes issued hereunder.
"Trust Estate" means the assets described as such in the granting clauses
of this Indenture.
"▇▇▇▇" means The Education Resources Institute, Inc., a private non-profit
corporation organized under Chapter 180 of the Massachusetts General Laws, and
any successor thereto.
"▇▇▇▇ Guaranty Agreement" means collectively, the Amended and Restated
Guaranty Agreement, dated as of December 31, 1999, between UICI and ▇▇▇▇, as
amended and supplemented pursuant to the terms thereof, and the Guaranty
Agreement, dated as of April 1, 2001, between the Corporation and ▇▇▇▇, as
amended and supplemented pursuant to the terms thereof.
"UCC" means the Uniform Commercial Code of the State of Delaware.
"UICI" means UICI, a Delaware corporation, and any successor thereto.
"UICI Funding" means UICI Funding Corp. 2, a Delaware corporation, and any
successor thereto.
"Undelivered Notes" means any Adjustable Rate Notes whose Registered Owner
has submitted a demand that such Notes be repurchased by the Corporation on a
designated Purchase Date or which are subject to mandatory tender for purchase
in accordance with the terms of a Supplemental Indenture, and which are not, in
fact, delivered for repurchase on the specified Purchase Date by the Registered
Owners thereof, but as to which the Purchase Price has been set aside in the
Purchase Fund.
"USA Funds" means United Student Aid Funds, Inc., a Delaware corporation,
and any successor thereto.
"USA Funds Guarantee Agreement" means the Amended and Restated Guarantee
Agreement, dated as of January 1, 1996, among the USA Funds, the Corporation and
UICI, as amended and supplemented pursuant to the terms thereof.
Section 1.02. Interpretation.
(a) In this Indenture, unless the context otherwise requires:
(i) the terms "hereby," "hereof," "herein," "hereunder" and
similar terms, as used in this Indenture, refer to this Indenture,
and the term "heretofore" means before, and the term "hereafter"
means after, the date of this Indenture;
(ii) words of the masculine gender mean and include
correlative words of the feminine and neuter genders and words
importing the singular number mean and include the plural number and
vice versa;
19
(iii) words importing persons shall include firms,
associations, partnerships (including limited partnerships), trusts,
corporations and other legal entities, including public bodies, as
well as natural persons;
(iv) any headings preceding the texts of the several Articles
and Sections of this Indenture and any table of contents or marginal
notes appended to copies hereof shall be solely for convenience of
reference and shall not constitute a part of this Indenture, nor
shall they affect its meaning, construction or effect;
(v) this Indenture shall be governed by and construed in
accordance with the applicable laws of the State;
(vi) the verbs "finance," "purchase" and "acquire," when used
with reference to a Financed Student Loan, shall be construed to
include (A) the making or purchase of such Financed Student Loan or
the obtaining of such Financed Student Loan by exchange or
otherwise, or (B) the participation by the Corporation, either alone
or with others, in the making or purchase thereof;
(vii) references to time shall mean the applicable local time
in Denver, Colorado, unless otherwise specified in a Supplemental
Indenture; and
(viii) references to Sections and Articles, unless otherwise
indicated, refer to Sections and Articles in this Indenture.
(b) Nothing in this Indenture, expressed or implied, is intended or
shall be construed to confer upon, or to give to, any person, other than
the Corporation, the Indenture Agents, any provider of an Interest Rate
Exchange Agreement, any Credit Facility Provider, any Liquidity Facility
Provider, any Surety Provider and the Registered Owners of the Notes, any
right, remedy or claim under or by reason of this Indenture or any
covenant, condition or stipulation thereof. All the covenants,
stipulations, promises and agreements herein contained by and on behalf of
the Corporation shall be for the sole and exclusive benefit of the
Corporation, the Indenture Agents, any provider of an Interest Rate
Exchange Agreement, any Credit Facility Provider, any Liquidity Facility
Provider, any Surety Provider and the Registered Owners of the Notes.
(c) If any one or more of the covenants or agreements provided
herein on the part of the Corporation or any Indenture Agent to be
performed should be contrary to law, then such covenant or covenants or
agreement or agreements, shall be deemed separable from the remaining
covenants and agreements hereof and shall in no way affect the validity of
the other provisions of this Indenture or of the Notes.
(d) In consideration of the purchase and acceptance of the Notes by
those who shall hold the same from time to time, the provisions of this
Indenture shall be a part of the contract of the Corporation with the
Registered Owners of the Notes and shall be deemed to be and shall
constitute a contract among the Corporation and the Registered Owners from
time to time of the Notes.
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ARTICLE II
TERMS OF NOTES
Section 2.01. Authorization of Notes. In order to (a) obtain funds to
purchase or finance Student Loans; (b) refinance obligations of the Corporation;
and (c) in connection with the foregoing, to set aside the amount the
Corporation determines is necessary for capitalized interest and reserves and to
pay Costs of Issuance, obligations of the Corporation in the form of Notes are
hereby authorized to be issued from time to time hereunder in one or more Series
of Senior Notes, Subordinate Notes or Junior-Subordinate Notes without
limitation as to amount except as may be provided by law. No Notes shall be
issued under this Indenture unless they are part of an issue described in a
Supplemental Indenture and until the conditions contained in Section 2.03 hereof
are satisfied.
Section 2.02. Issuance and Delivery of Notes. After their authorization by
the Corporation, Notes may be executed by or on behalf of the Corporation and
delivered to an Authenticating Agent for authentication and, upon compliance by
the Corporation with the requirements of Section 2.03 hereof, the Authenticating
Agent shall thereupon authenticate and deliver such Notes to or upon the order
of the Corporation.
Section 2.03. Conditions Precedent to Delivery of Notes. The Notes of each
Series shall be authenticated and delivered upon Corporation Order, but only
upon the receipt by the Trustee of the following:
(a) A copy of the Supplemental Indenture authorizing such Series,
duly executed by the Corporation and the Trustee, which shall specify:
(i) the authorized principal amount and designation of such
Notes;
(ii) the purposes for which such Notes are issued, which shall
be one or more of the purposes set forth in Section 2.01 hereof;
(iii) the dated dates and maturity dates of such Series of
Notes;
(iv) the interest rates or interest component (in the case of
Capital Appreciation Notes) of and principal amounts payable upon
such Notes (or the manner of determining such rates or amounts) and
the Interest Payment Dates, if any, and Principal Payment Dates
therefor;
(v) the denominations of, and the manner of dating, numbering
and lettering such Notes;
(vi) the Paying Agents for and the places of payment of such
Notes or the manner of appointing and designating the same;
(vii) the amounts required to be deposited in the Debt Service
Reserve Fund pursuant to the Debt Service Reserve Requirement,
including, if applicable, the deposit of a Debt Service Reserve
Policy therein;
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(viii) provisions concerning the forms of such Notes
(including, without limitation, whether such Notes shall be
delivered in book-entry-only form) and of the Authenticating Agent's
certificate of authentication;
(ix) to what funds moneys are to be deposited;
(x) the Redemption Price, if any, of and, subject to the
provisions of Article VI hereof, the redemption terms for such
Notes;
(xi) the amounts and due dates of the Sinking Fund Payments,
if any, for any of such Notes;
(xii) the nature and extent of any Credit Facility or
Liquidity Facility for any or all of such Notes, together with the
identity of the Credit Facility Provider or the Liquidity Facility
Provider, if any;
(xiii) whether such Notes constitute Senior Notes, Subordinate
Notes or Junior-Subordinate Notes; and
(xiv) any other provisions deemed advisable by the Corporation
as shall not conflict with the provisions hereof.
(b) In the event there are then other Notes Outstanding hereunder,
the written consent of each Credit Facility Provider and the written
consent of the Liquidity Facility Provider whose Liquidity Facility
secures Notes of the same or lower priority as the Notes proposed to be
issued if the corresponding Reimbursement Agreement requires such consent.
(c) An Opinion of Counsel to the Corporation to the effect that: (i)
this Indenture and such Supplemental Indenture have been duly authorized,
executed and delivered by the Corporation and, assuming due authorization,
execution and delivery by the other parties thereto, is valid and binding
upon the Corporation (subject to the operation of bankruptcy, insolvency,
preferential transfer, fraudulent transfer, fraudulent conveyance or other
laws relating to or affecting creditors rights generally, now existing or
hereafter enacted, and by the application of general principles of equity
including those relating to equitable subordination and judicial
discretion); (ii) pursuant to this Indenture the Corporation has assigned
and pledged, and all necessary action on the part of the Corporation has
been taken as required to assign and pledge under this Indenture, all of
the Trust Estate to the Trustee, subject to customary exceptions
acceptable to the initial purchasers of the Notes; (iii) upon the
execution, authentication and delivery thereof, such Notes will have been
duly and validly authorized and issued in accordance with the laws of the
State and the provisions of this Indenture; (iv) such Notes are valid and
binding obligations of the Corporation; (v) the Notes will be classified
as the Corporation's debt for federal income tax purposes; and (vi) the
Corporation shall have acquired a perfected security interest in all
Financed Student Loans purchased, originated, or financed in favor of the
Trustee in the manner provided for by the laws of the State and, with
respect to FFELP Loans, the Higher Education Act. The Opinion of Counsel
shall provide that each Credit Facility Provider, if any, may rely
thereon.
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(d) A written order as to the delivery of such Notes, signed by an
Authorized Representative.
(e) In the event that there are then other Notes Outstanding
hereunder, (i) a Rating Confirmation with respect to all other Notes
Outstanding, and (ii) on the date of issuance and delivery of any
additional Notes, a certification of an Authorized Representative to the
effect that the Corporation is not then in default in the performance of
any of the covenants, conditions, agreements or provisions contained in
this Indenture, unless the issuance of such additional Notes and the
application of the proceeds thereof is intended to, and will, cure such
default upon the issuance of such additional Notes.
(f) Such further documents, certificates, instruments and moneys as
are required by any Supplemental Indenture entered into pursuant to
Article VIII or IX hereof.
The Trustee shall notify the Corporation of its receipt of proceeds from a
Series of Notes and shall deposit them to the funds provided in the Supplemental
Indenture.
Section 2.04. Limited Obligations of Corporation. The Notes and, except as
otherwise may be provided therein, the payment obligations under all
Reimbursement Agreements, all Interest Rate Exchange Agreements and all Debt
Service Reserve Policies are special limited, not general, obligations of the
Corporation payable solely from the Trust Estate, subject to the application
thereof to the purposes and on the conditions permitted by this Indenture.
ARTICLE III
GENERAL TERMS AND PROVISIONS OF NOTES
Section 3.01. Place, Medium of Payment Denomination, Maturities, Credit or
Liquidity Facilities, Form and Date.
(a) Except as otherwise provided in a Supplemental Indenture
providing for the issuance thereof, (i) the principal of, and premium, if
any, on the Notes are payable upon presentation and surrender thereof at
the principal corporate trust office of the Paying Agent designated in the
applicable Supplemental Indenture and (ii) interest on the Notes will be
paid by check or draft drawn upon the Paying Agent and mailed to
Registered Owners at their addresses shown on the Note register of the
Registrar; provided that, at the written request of the Registered Owner
of at least $1,000,000 in aggregate principal amount of Notes (which
request shall be delivered at least 10 days prior to the applicable
Interest Payment Date and may provide that it will remain in effect with
respect to each subsequent Interest Payment Date unless and until changed
or revoked at any time (but at least 10 days) prior to an Interest Payment
Date by subsequent written notice to the Paying Agent) interest shall be
paid by wire transfer or other method of transfer of immediately available
funds acceptable to the Paying Agent and the Corporation. Payment as
aforesaid shall be made in moneys of the United States of America which at
the time of payment constitute legal tender for the payment of public
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and private debts. Each check or wire transfer of payments on the Notes
shall identify by CUSIP Number the Notes to which such payment relates.
(b) The date upon which any Principal Installment or Sinking Fund
Payment with respect to a Series of Notes is to be payable shall be as set
forth in the Supplemental Indenture authorizing such Notes. Interest, if
any, on each Note shall be payable as set forth in the Supplemental
Indenture authorizing such Notes. If any Note Payment Date shall fall on a
day which is not a Business Day, principal of, premium, if any, and
interest payable on the Notes or any portion thereof on such Note Payment
Date shall be paid on the immediately succeeding Business Day, and no
additional interest shall accrue on such Notes or the interest due thereon
as a result thereof (except as may otherwise be provided as to a
particular Series or priority of Notes in the related Supplemental
Indenture and/or Reimbursement Agreement).
(c) Notes shall be issued in fully registered form, without coupons.
(d) All Series of Notes shall be dated as provided in the
Supplemental Indenture authorizing such Notes. Notes of any Series
authenticated on or after the dated date but prior to the first Interest
Payment Date applicable to Notes of such Series shall bear interest from
the dated date, but Notes authenticated on or subsequent to the first
Interest Payment Date applicable to Notes of such Series shall bear
interest from the Interest Payment Date next preceding the date of
authentication thereof (unless such date of authentication shall be an
Interest Payment Date, in which case they shall bear interest from such
Interest Payment Date). If, however, as shown by the records of the
Trustee and Registrar, interest on such Series of Notes shall be in
default the Notes issued in lieu of such Notes surrendered for transfer or
exchange shall bear interest from the date to which interest has been paid
in full on the Notes surrendered.
(e) In addition to registered Notes requiring physical delivery,
Notes may be issued in Book-Entry Form if the Supplemental Indenture
authorizing the issuance of such Notes so specifies.
(f) The Notes of all or any portion of any Series may be Fixed Rate
Notes, Adjustable Rate Notes, Capital Appreciation Notes, or some
combination thereof, as shall be set forth in the Supplemental Indenture
authorizing such Notes.
(g) Payment of the principal, Purchase Price and Redemption Price of
and interest on the Notes of any Series may be payable from or secured by
a Credit Facility or Liquidity Facility (or any substitute or alternate
therefor), as shall be set forth in the Supplemental Indenture authorizing
such Series. The Credit Facility Provider or Liquidity Facility Provider
for that Series may be granted such rights to consent to or approve of
action required or permitted hereunder as shall be set forth in the
Supplemental Indenture authorizing the Series of Notes benefiting from
such Credit Facility or Liquidity Facility; provided, that the granting of
such rights will not adversely affect the rating or ratings, if any, on
any Outstanding Notes as evidenced by a Rating Confirmation.
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Section 3.02. Legends. The Notes of each Series may contain or have
endorsed thereon such provisions, restrictions as to transferability,
specifications and descriptive words not inconsistent with the provisions of
this Indenture as may be necessary or desirable to comply with the terms of the
offering, regulations, custom, or otherwise.
Section 3.03. Interchangeability of Notes. Notes, upon surrender thereof
at the principal corporate trust office of the Registrar with a written
instrument of transfer satisfactory to the Registrar, duly executed by the
Registered Owner or his duly authorized attorney, may at the option of the
Registered Owner thereof, and upon payment by such Registered Owner of any
charges which the Authenticating Agent may make as provided in Section 3.06
hereof, be exchanged for an equal aggregate principal amount of Notes of the
same Series and maturity bearing the same rate of interest and having the same
terms, of any authorized denominations; provided, however, that the exchange of
Notes may be restricted by the Supplemental Indenture pursuant to which such
Notes are issued.
Section 3.04. Negotiability, Transfer and Registry. Except as provided in
any Supplemental Indenture, all the Notes issued under this Indenture shall be
negotiable, subject to the provisions for registration, transfer and exchange
contained in this Indenture and in the Notes. So long as any of the Notes remain
Outstanding, the Corporation shall maintain and keep, at the principal corporate
trust office of the Registrar, books for the registration, transfer and exchange
of the Notes. Upon presentation thereof for such purpose at said office, the
Registrar shall register or cause to be registered in such books, and permit to
be transferred thereon, any Notes pursuant to such reasonable regulations as may
be set forth in a Supplemental Indenture. So long as any of the Notes remain
Outstanding, the Corporation shall make all necessary provisions to permit the
exchange of Notes at the principal corporate trust office of the Registrar.
Each Note shall be transferable only upon the books of the Corporation,
which shall be kept for such purpose at the principal corporate trust office of
the Registrar, by the Registered Owner thereof in person or by his attorney duly
authorized in writing, upon surrender thereof, together with a written
instrument of transfer satisfactory to the Registrar duly executed by the
Registered Owner or his duly authorized attorney. Upon the transfer of any such
Note, the Corporation shall issue in the name of the transferee a new Note or
Notes, of the same aggregate principal amount, Series, interest rate and
maturity as the surrendered Note.
Section 3.05. Persons Treated as Registered Owners. The Corporation and
any Indenture Agent may deem and treat the person in whose name any Note shall
be registered upon the books of the Corporation as the absolute owner of such
Note, whether such Note shall be overdue or not, for the purpose of receiving
payment of, or on account of, the principal of and interest on such Note and for
all other purposes, and all such payments so made to any such Registered Owner
or upon his order shall be valid and effectual to satisfy and discharge the
liability upon such Note to the extent of the sum or sums so paid, and neither
the Corporation nor any Indenture Agent shall be liable for any notice to the
contrary. If the Trustee is not the Registrar, the Registrar will deliver an
updated register of the Registered Owners of the Notes to the Trustee upon the
Trustee's request and in any case at least quarterly.
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Section 3.06. Regulations With Respect to Exchanges and Transfers. In all
cases in which the privilege of exchanging Notes or transferring Notes is
exercised, the Corporation shall execute and an Authenticating Agent shall
authenticate and deliver Notes in accordance with the provisions of this
Indenture. For every such exchange or transfer of Notes, whether temporary or
definitive, the Corporation or an Authenticating Agent may make a charge to the
requesting Registered Owner in an amount sufficient to reimburse it for any tax,
fee or other governmental charge required to be paid with respect to such
exchange or transfer. The Corporation will not be obligated to (a) register the
transfer of or exchange any Note of a Series during a period beginning on the
date Notes of the Series are selected for redemption and ending on the day of
the mailing of a notice of redemption of Notes selected for redemption or (b)
register the transfer of or exchange any Note selected for redemption in whole
or in part, except the unredeemed portion of a Note being redeemed in part.
Section 3.07. Notes Mutilated, Destroyed, Stolen or Lost. In case any Note
shall become mutilated or be destroyed, stolen or lost, the Corporation shall
execute and an Authenticating Agent shall authenticate a new Note of like
Series, interest rate, maturity, principal amount and other terms of the Note so
mutilated, destroyed, stolen or lost. In the case of a mutilated Note, such new
Note shall be delivered only upon surrender and cancellation of such mutilated
Note. In the case of a Note issued in lieu of and substitution for a Note which
has been destroyed, stolen or lost, such new Note shall be delivered only upon
filing with the Trustee of evidence satisfactory to establish to the Corporation
and the Trustee that such Note has been destroyed, stolen or lost and to prove
the ownership thereof and upon furnishing the Corporation and the Trustee with
indemnity satisfactory to the Trustee. The person requesting the authentication
and delivery of a new Note pursuant to this Section shall comply with such other
reasonable regulations as the Corporation and the Trustee may prescribe and pay
such expenses as the Corporation and the Trustee may incur in connection
therewith. All Notes so surrendered to the Trustee shall be canceled by it.
Evidence of such cancellation shall be given to the Corporation.
Section 3.08. Cancellation of Notes. All Notes paid or redeemed, either at
or before maturity, shall be delivered to the Trustee when such payment or
redemption is made, and such Notes, together with all Notes purchased by the
Trustee, shall thereupon be promptly canceled. The Trustee shall execute a
certificate of cancellation in duplicate by the signature of one of its
authorized officers describing the Notes so canceled. Such executed certificate
shall be filed with the Corporation and the other executed certificate shall be
retained by the Trustee.
Section 3.09. Security Depository Procedures. Except as such procedures
conflict with the provisions of this Indenture, so long as any Series of Notes
are in Book-Entry Form under an agreement or agreements with a Securities
Depository, the policies and procedures of the Security Depository on receipt of
payments, tenders, transfer and exchange of such Notes and presentation of such
Notes for payment or cancellation shall govern such Series of Notes.
Section 3.10. Preparation of Definitive Notes; Temporary Notes.
(a) Definitive Notes shall be typewritten, lithographed or printed.
Until definitive Notes are prepared, the Corporation may execute and
deliver, in lieu of definitive Notes, but subject to the same provisions,
limitations and conditions as the
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definitive Notes, except as to the denominations thereof and as to
exchangeability, one or more temporary Notes, substantially of the tenor
of the definitive Notes in lieu of which such temporary Notes are issued,
in authorized denominations or any multiple thereof, and with such
omissions, insertions and variations as may be appropriate to temporary
Notes. Upon surrender of such temporary Notes for exchange and
cancellation, the Corporation at its own expense shall prepare and execute
and, without charge to the Registered Owner thereof, deliver in exchange
therefor, at the corporate trust office of an Authenticating Agent,
definitive Notes, of the same aggregate principal amount, Series and
maturity, bearing the same rate of interest and having the same terms as
the temporary Notes surrendered. Until so exchanged, the temporary Notes
shall be in all respects entitled to the same benefits and security as
definitive Notes issued pursuant to this Indenture.
(b) All temporary Notes surrendered in exchange for definitive Notes
shall be forthwith canceled by the Trustee.
Section 3.11. Execution and Authentication.
(a) After their authorization pursuant to a Supplemental Indenture,
Notes of a Series may be executed pursuant to or on behalf of the
Corporation and delivered to an Authenticating Agent for authentication.
The Notes shall be executed in the name and on behalf of the Corporation
by the manual or, to the extent permitted by law, the facsimile signature
of the President of the Corporation and attested by the manual or, to the
extent permitted by law, the facsimile signature of the Secretary of the
Corporation or as otherwise may be required by the Supplemental Indenture
authorizing the Notes of a Series. In case any one or more of the officers
or employees who shall have signed any of the Notes shall cease to be such
officer or employee before the Notes so signed shall have been actually
delivered, such Notes may, nevertheless, be delivered as herein provided,
and may be issued as if the person who signed such Notes had not ceased to
hold such office or be so employed. Any Note may be signed on behalf of
the Corporation by such persons as at the actual time of the execution of
such Note shall be duly authorized or hold the proper office in or
employment by the Corporation, although at the date of the Notes of such
Series such persons may not have been so authorized or have held such
office or employment.
(b) The Notes of each Series shall bear thereon a certificate of
authentication, in the form set forth in the Supplemental Indenture
authorizing such Notes, executed manually by an Authenticating Agent. No
Note shall be entitled to any right or benefit under this Indenture or
shall be valid or obligatory for any purpose until such certificate of
authentication shall have been duly executed by an Authenticating Agent.
Such certificate of an Authenticating Agent upon any Note executed on
behalf of the Corporation shall be conclusive evidence that the Note so
authenticated was issued and delivered under this Indenture and that the
Registered Owner thereof is entitled to the benefits hereof.
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(c) Issuance of Notes in Book-Entry Form shall take place upon the
completion of such acts as may be specified and in the manner which may be
specified in the Supplemental Indenture authorizing such issuance.
ARTICLE IV
APPLICATION OF NOTE PROCEEDS AND OTHER AMOUNTS
Section 4.01. Application of Note Proceeds, Accrued Interest and Premium.
Except as otherwise provided in a Supplemental Indenture, the proceeds of sale
of any Series of Notes, other than the proceeds of refinancing Notes, or the
proceeds of Notes issued to refinance other notes or obligations of the
Corporation not issued under this Indenture, shall, as soon as practicable upon
the delivery of the Notes, be applied as follows:
(a) the amount, if any, necessary to cause the aggregate amount on
deposit in the Debt Service Reserve Fund, together with any Debt Service
Reserve Policy, to at least equal the aggregate amount of the Debt Service
Reserve Requirement immediately following the time of such delivery shall
be deposited into the Debt Service Reserve Fund, together with such
additional amounts, if any, as may be specified in the Supplemental
Indenture authorizing such Series;
(b) upon the delivery of a Series of Notes, the amount, if any,
received at such time as a premium above the aggregate principal amount of
such Notes shall be applied by the Trustee as specified in the
Supplemental Indenture authorizing such Series, and the amount, if any,
received as accrued interest, if any, as designated by a Supplemental
Indenture, shall be deposited into the Revenue Fund;
(c) upon delivery of a Series of Notes, any amount required to be
deposited in the Capitalized Interest Account of the Note Fund to pay a
portion of the interest accruing on the Notes shall be deposited in such
Account; and
(d) upon delivery of a Series of Notes, any amount required to be
deposited in the Capitalized Expense Account of the Revenue Fund to pay
Program Expenses and Maintenance and Operating Expenses shall be deposited
in such Account; and
(e) the balance remaining after such deposits have been made shall
be deposited into the Acquisition Fund.
Section 4.02. Application of Proceeds of Refinancing. The proceeds of
Notes issued to refinance other Notes or obligations of the Corporation not
issued under this Indenture, shall be deposited as provided in the Supplemental
Indenture authorizing such Series of Notes.
Section 4.03. Application of Amounts Pledged as Security for Notes
Defeased. The balance of any Fund or Account of the Corporation which is pledged
as security for any Series of Notes of the Corporation shall be distributed,
upon the defeasance of such Series, as prescribed in the Supplemental Indenture
authorizing such refinancing Notes.
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ARTICLE V
PLEDGE OF INDENTURE; ESTABLISHMENT OF
FUNDS AND ACCOUNTS
Section 5.01. Pledge Effected by Indenture; Priority. The Trust Estate is
hereby pledged in accordance with the Recitals and the Granting Clauses hereof.
To the fullest extent provided by applicable law, the money and property hereby
pledged shall immediately be subject to the lien of such pledge and such lien
shall be valid and binding against all parties having claims in tort, contract
or otherwise against the Corporation, irrespective of whether such parties have
notice of the pledge.
Section 5.02. Creation of Funds. There are hereby created and established
the following Funds to be held by the Trustee and maintained in accordance with
the provisions of this Indenture:
(a) Acquisition Fund;
(b) Revenue Fund, within which there may be a Capitalized Expense
Account;
(c) Note Fund, within which there shall be a Senior Principal
Account, a Subordinate Principal Account, a Junior-Subordinate Principal
Account, a Senior Interest Account, a Subordinate Interest Account and a
Junior-Subordinate Interest Account and within which there may be
Capitalized Interest Accounts for one or more Series of Notes;
(d) Credit Proceeds Fund; and
(e) Debt Service Reserve Fund.
There is hereby created an Operating Fund which will be established by the
Corporation and which does not constitute a Fund and Account held by the Trustee
as part of the Trust Estate. The Operating Fund shall be held by a depository
bank for the benefit of the Corporation. None of the Registered Owners, any
Credit Facility Provider, any Liquidity Facility Provider or any Surety Provider
shall have any right, title or interest therein.
There is also hereby created and established a Purchase Fund which is not
part of the Trust Estate and which shall be held by the Tender Agent for the
purposes described in Section 5.09 hereof.
The Trustee is hereby authorized for the purpose of facilitating
administration of the Trust Estate to create further Accounts or subaccounts in
any of the various Funds and Accounts established hereunder which are deemed to
be desirable or necessary.
The Corporation shall cause to be filed UCC financing statements (and
continuation statements) and shall direct the Trustee to execute custodian
agreements all as shall be necessary under applicable law to perfect and
maintain the security interest created by this Indenture in the Financed Student
Loans. Following the filing of any UCC financing statement with respect to
29
this Indenture the Trustee hereby agrees to notify the Corporation six months
prior to the expiration of such filing of the need to file continuation
statements, and to the extent permitted by law, the Trustee shall execute and
file such continuation statements without further direction from the
Corporation.
Section 5.03. Acquisition Fund. There shall be deposited into the
Acquisition Fund amounts described in any Supplemental Indenture, moneys from
proceeds of any Notes, any Recoveries of Principal required to be transferred
thereto pursuant to a Supplemental Indenture and any moneys transferred thereto
from the Revenue Fund pursuant to Section 5.04 hereof. Financed Student Loans
shall be held by the Trustee or its agent or bailee (including any Servicer) and
shall be pledged to the Trust Estate and accounted for as a part of the
Acquisition Fund.
Moneys on deposit in the Acquisition Fund shall be used, (a) to pay costs
of issuance of Notes; (b) to pay principal of and interest due on the Notes and
to pay Program Expenses, Maintenance and Operating Expenses and other costs upon
the transfer of such moneys to the Revenue Fund as provided in Section 5.12
hereof; (c) upon Corporation Order, to redeem Notes in accordance with the
provisions of any Supplemental Indenture; and (d) upon receipt by the Trustee of
a Student Loan Acquisition Certificate in the form attached as Exhibit A hereto,
to acquire Student Loans at a price which would permit the results of Cash Flow
Statements provided to each Credit Facility Provider and Rating Agency then
rating the Notes on any Issue Date of any Series of Notes not to be changed in a
material adverse manner as certified to the Trustee on the Student Loan
Acquisition Certificate; provided that such price may be increased if a Credit
Confirmation (or, for Notes not subject to a Credit Facility, a Rating
Confirmation) is obtained, based on new Cash Flow Statements containing such
assumptions as the Corporation shall reasonably determine. Any such Corporation
Order or Student Loan Acquisition Certificate shall state that such proposed use
of moneys is in compliance with the provisions of this Indenture. The Trustee
may conclusively rely on such Corporation Order or Student Loan Acquisition
Certificate. If the Corporation determines that all or any portion of such
moneys in the Acquisition Fund cannot be used to acquire Student Loans, then an
Authorized Representative of the Corporation may, by Corporation Order, direct
the Trustee to redeem Notes in accordance with any Supplemental Indenture. Prior
to the acquisition of any FFELP Loans, the Corporation, the Trustee or another
entity acting on their behalf shall be required to obtain an Eligible Lender
number from the Secretary and the Corporation shall be required to provide the
Trustee with an opinion of Bond Counsel that the Trustee will have a first
perfected security interest in such FFELP Loans.
Notwithstanding the foregoing, if there are not sufficient moneys on
deposit in the Revenue Fund to make the transfers and disbursements required by
Section 5.04(b)(i) through (xvi) hereof, then, an amount equal to any such
deficiency may, upon Corporation Order, be transferred from the Acquisition Fund
to the Revenue Fund for transfer or disbursement.
The Corporation will be the owner of the Financed Student Loans and it is
understood and agreed that the Trustee will have a security interest in the
Financed Student Loans for and on behalf of the Registered Owners, each Credit
Facility Provider, each Liquidity Facility Provider and each Surety Provider, as
applicable. While the Corporation will be the beneficial owner of the FFELP
Loans, it is understood and agreed that the Trustee (or another Person acting on
the
30
Corporation's behalf), as an Eligible Lender, will be the legal owner of the
FFELP Loans. In the case of a single Financed Student Loan evidenced by a
separate note, each such note will be held in the name of the Corporation (or
the Eligible Lender in the case of FFELP Loans), for the benefit of the
Registered Owners, each Credit Facility Provider and each Liquidity Facility
Provider, as applicable. In the case of FFELP Loans evidenced by a Master
Promissory Note, the Corporation shall cause the holder of the original Master
Promissory Note to indicate by book entry on its books and records that the
Eligible Lender acting on behalf of the Corporation is the Registered Owner of
the FFELP Loan and that the Trustee has a security interest in the FFELP Loan
for the benefit of the Registered Owners, each Credit Facility Provider, each
Liquidity Facility Provider and each Surety Provider, as applicable.
Financed Student Loans shall be sold, transferred or otherwise disposed of
(other than for consolidation, serialization or transfer to a Guarantee Agency)
by the Trustee free from the lien of this Indenture at any time pursuant to a
Corporation Order and if the Trustee is provided with the following:
(a) a Corporation Order stating the sale price and directing that
Financed Student Loans be sold, transferred or otherwise disposed of and
delivered to a transferee whose name shall be specified, provided that if
the Financed Student Loan is a FFELP Loan and the Higher Education Act
requires any such FFELP Loan to be held only by an Eligible Lender, the
transferee shall be an Eligible Lender; and
(b) a Certificate signed by an Authorized Representative of the
Corporation to the effect that the disposition price is equal to or in
excess of the amount required in Section 7.06(c) hereof.
Further, Financed Student Loans shall also be sold, transferred or
otherwise disposed of by the Trustee, with a Credit Confirmation (or, for Notes
not subject to a Credit Facility, a Rating Confirmation), pursuant to a
Corporation Order in which the Corporation determines that such disposition of
Financed Student Loans from the Trust Estate is necessary in order to avoid the
occurrence of an Event of Default hereunder or to avoid any default in the
payment obligations of the Corporation under any Reimbursement Agreement, in
such amount and at such times and prices as may be specified in such Corporation
Order. The Trustee, following receipt of the foregoing and of a Certificate of
the Corporation indicating that such purchaser or transferee is one of the
entities described in clause (a) above, if applicable, shall deliver such
Financed Student Loans free from the lien of this Indenture upon the receipt of
the purchase price or consideration specified in a Corporation Order, in
compliance with the foregoing. The Trustee shall have no duty to know or
determine whether the purchaser or transferee is an Eligible Lender and may rely
on the certificate of the Corporation indicating that such purchase or
transferee is an Eligible Lender. The proceeds to be received upon any
disposition may consist of any combination of cash, Investment Securities and
Financed Student Loans.
Section 5.04. Revenue Fund.
(a) The Trustee shall deposit in the Revenue Fund the amounts
described in any Supplemental Indenture, any other amounts deposited
thereto on Corporation Order, all Revenues and any Recoveries of Principal
required to be transferred thereto pursuant
31
to a Supplemental Indenture, including earnings on amounts in the Funds
and Accounts (except as specified herein), any transfers as set forth in
Section 5.12 hereof, all payments of principal and interest, Special
Allowance Payments, if any, together with any repurchase payments from
Sellers, funds transferred to the Trustee from the Servicer's or
Servicers' separate bank accounts maintained pursuant to any servicing
agreement, Guarantee Agency payments (other than Recoveries of Principal,
unless such Recoveries of Principal are required to be deposited to the
Revenue Fund), and proceeds from the sale of Financed Student Loans (other
than Recoveries of Principal, unless such Recoveries of Principal are
required to be deposited to the Revenue Fund). Money in the Revenue Fund
shall be kept separate and apart from all other Funds.
A Supplemental Indenture for a Series of Notes may provide for the
deposit of funds into a Capitalized Expense Account of the Revenue Fund.
Unless otherwise provided in the Supplemental Indenture, the Trustee shall
use the funds on deposit in a Capitalized Expense Account, upon
Corporation Order, to solely pay Program Expenses and Maintenance and
Operating Expenses for which the Capitalized Expense Account was created.
(b) On each Monthly Calculation Date, the Corporation shall provide
to the Trustee a Corporation Order directing the following reservations,
payments, deposits or transfers in the following order of priority.
(i) there shall be reserved an amount equal to the fees and
expenses of each Indenture Agent, the fees and expenses of the
Servicer under any Servicing Agreement, the fees and expenses of any
Auction Agent and Broker-Dealer, the fees and expenses of each
Credit Facility Provider under any Credit Facility, the fees and
expenses of each Surety Provider under any Debt Service Reserve
Policy, the fees and expenses of each Liquidity Facility Provider
under any Liquidity Facility and the fees and expenses of any
Remarketing Agent then acting under any Supplemental Indenture, that
will become payable during the following calendar month;
(ii) on a parity basis:
(A) with respect to each Series of Senior Notes on which
interest is paid at least every 30 days, there shall be
transferred to the Senior Interest Account established within
the Note Fund an amount equal to the interest that will become
payable on such Senior Notes during the following calendar
month. With respect to each Series of Senior Notes on which
interest is paid at intervals in excess of every 30 days,
there shall be made monthly deposits to the Senior Interest
Account established within the Note Fund on each Monthly
Calculation Date preceding each Interest Payment Date to
aggregate the full amount of the interest payable on such
Senior Notes on such Interest Payment Date. With respect to
any Senior Notes which are Adjustable Rate Notes for which any
such amount cannot be determined, such reservation shall be
made based upon assumptions set forth in the Supplemental
Indenture authorizing such Senior Notes; and
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(B) with respect to any Interest Rate Exchange Agreement
relating to a Series of Senior Notes under which the
Corporation is required to make a payment at least every 30
days (other than any payment due upon termination of the
Interest Rate Exchange Agreement), there shall be deposited to
the Senior Interest Account established within the Note Fund
an amount equal to the amount of such payments that will
become payable under the Interest Rate Exchange Agreement
during the following calendar month. With respect to each
Interest Rate Exchange Agreement relating to any Series of
Senior Notes under which the Corporation is required to make
payments at intervals in excess of 30 days (other than any
payment due upon termination of the Interest Rate Exchange
Agreement), there shall be made monthly deposits to the Senior
Interest Account established within the Note Fund on each
Monthly Calculation Date preceding each date on which such
payments are due to aggregate the full amount of such payments
payable on such date. With respect to any Interest Rate
Exchange Agreement for which any such amount cannot be
determined, such reservation shall be made based upon
assumptions set forth in the Supplemental Indenture
authorizing such Interest Rate Exchange Agreement;
(iii) there shall be transferred to the Senior Principal
Account established within the Note Fund for the Senior Notes an
amount which, together with amounts already on deposit in the Senior
Principal Account, is equal to all principal due with respect to the
Senior Notes during the following calendar month;
(iv) to the extent necessary to reimburse a Surety Provider of
a Debt Service Reserve Policy, payment shall be made to such Surety
Provider of all other amounts due under the agreement with such
provider relating to such Debt Service Reserve Policy and, to the
extent necessary, to increase the balance therein to the Debt
Service Reserve Requirement, a transfer shall be made to the Debt
Service Reserve Fund;
(v) all other amounts due and owing to a Credit Facility
Provider under a Reimbursement Agreement with such Credit Facility
Provider relating to a Credit Facility securing any Senior Notes,
together with any required interest thereon, shall be paid to such
Credit Facility Provider;
(vi) all other amounts due and owing to the Liquidity Facility
Providers under the agreement or agreements with such Liquidity
Facility Providers relating to a Liquidity Facility providing for
payment of the Purchase Price of any Senior Notes, together with any
interest thereon, shall be paid to such Liquidity Facility Provider;
(vii) on a parity basis:
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(A) with respect to each Series of Subordinate
Notes on which interest is paid at least every 30 days,
there shall be transferred to the Subordinate Interest
Account established within the Note Fund an amount equal
to the interest that will become payable on such
Subordinate Notes during the following calendar month.
With respect to each Series of Subordinate Notes on
which interest is paid at intervals in excess of every
30 days, there shall be made monthly deposits to the
Subordinate Interest Account established within the Note
Fund on each Monthly Calculation Date preceding each
Interest Payment Date to aggregate the full amount of
the interest payable on such Subordinate Notes on such
Interest Payment Date. With respect to any Subordinate
Notes which are Adjustable Rate Notes for which any such
amount cannot be determined, such reservation shall be
made based upon assumptions set forth in the
Supplemental Indenture authorizing such Subordinate
Notes; and
(B) with respect to any Interest Rate Exchange
Agreement relating to a Series of Subordinate Notes
under which the Corporation is required to make a
payment at least every 30 days (other than any payment
due upon termination of the Interest Rate Exchange
Agreement), there shall be deposited to the Subordinate
Interest Account established within the Note Fund an
amount equal to the amount of such payments that will
become payable under the Interest Rate Exchange
Agreement during the following calendar month. With
respect to each Interest Rate Exchange Agreement
relating to any Series of Subordinate Notes under which
the Corporation is required to make payments at
intervals in excess of 30 days (other than any payment
due upon termination of the Interest Rate Exchange
Agreement), there shall be made monthly deposits to the
Subordinate Interest Account established within the Note
Fund on each Monthly Calculation Date preceding each
date on which such payments are due to aggregate the
full amount of such payments payable on such date. With
respect to any Interest Rate Exchange Agreement for
which any such amount cannot be determined, such
reservation shall be made based upon assumptions set
forth in the Supplemental Indenture authorizing such
Interest Rate Exchange Agreement;
(viii) there shall be transferred to the Subordinate Principal
Account established within the Note Fund for the Subordinate Notes
an amount which, together with amounts already on deposit in the
Subordinate Principal Account, is equal to all principal due with
respect to the Subordinate Notes during the following calendar
month;
(ix) all other amounts due and owing to a Credit Facility
Provider under a Reimbursement Agreement with such Credit Facility
Provider relating to a Credit Facility securing any Subordinate
Notes, together with any required interest thereon, shall be paid to
such Credit Facility Provider;
34
(x) all other amounts due and owing to the Liquidity Facility
Providers under the agreement or agreements with such Liquidity
Facility Providers relating to a Liquidity Facility providing for
payment of the Purchase Price of any Subordinate Notes, together
with any interest thereon, shall be paid to such Liquidity Facility
Provider;
(xi) on a parity basis:
(A) with respect to each Series of
Junior-Subordinate Notes on which interest is paid at
least every 30 days, there shall be transferred to the
Junior-Subordinate Interest Account established within
the Note Fund an amount equal to the interest that will
become payable on such Junior-Subordinate Notes during
the following calendar month. With respect to each
Series of Junior-Subordinate Notes on which interest is
paid at intervals in excess of every 30 days, there
shall be made monthly deposits to the Junior-Subordinate
Interest Account established within the Note Fund on
each Monthly Calculation Date preceding each Interest
Payment Date to aggregate the full amount of the
interest payable on such Junior-Subordinate Notes on
such Interest Payment Date. With respect to any
Junior-Subordinate Notes which are Adjustable Rate Notes
for which any such amount cannot be determined, such
reservation shall be made based upon assumptions set
forth in the Supplemental Indenture authorizing such
Junior-Subordinate Notes; and
(B) with respect to any Interest Rate Exchange
Agreement relating to a Series of Junior-Subordinate
Notes under which the Corporation is required to make a
payment at least every 30 days (other than any payment
due upon termination of the Interest Rate Exchange
Agreement), there shall be deposited to the
Junior-Subordinate Interest Account established within
the Note Fund an amount equal to the amount of such
payments that will become payable under the Interest
Rate Exchange Agreement during the following calendar
month. With respect to each Interest Rate Exchange
Agreement relating to any Series of Junior-Subordinate
Notes under which the Corporation is required to make
payments at intervals in excess of 30 days (other than
any payment due upon termination of the Interest Rate
Exchange Agreement), there shall be made monthly
deposits to the Junior-Subordinate Interest Account
established within the Note Fund on each Monthly
Calculation Date preceding each date on which such
payments are due to aggregate the full amount of such
payments payable on such date. With respect to any
Interest Rate Exchange Agreement for which any such
amount cannot be determined, such reservation shall be
made based upon assumptions set forth in the
Supplemental Indenture authorizing such Interest Rate
Exchange Agreement;
(xii) there shall be transferred to the Junior-Subordinate
Principal Account established within the Note Fund for the
Junior-Subordinate Notes an
35
amount which, together with amounts already on deposit in the
Junior-Subordinate Principal Account, is equal to all principal due
with respect to the Junior-Subordinate Notes during the following
calendar month;
(xiii) all other amounts due and owing to a Credit Facility
Provider under a Reimbursement Agreement with such Credit Facility
Provider relating to a Credit Facility securing any
Junior-Subordinate Notes, together with any required interest
thereon, shall be paid to such Credit Facility Provider;
(xiv) all other amounts due and owing to the Liquidity
Facility Providers under the agreement or agreements with such
Liquidity Facility Providers relating to a Liquidity Facility
providing for payment of the Purchase Price of any
Junior-Subordinate Notes, together with any interest thereon, shall
be paid to such Liquidity Facility Provider;
(xv) there shall be reserved an amount equal to the Program
Expenses, other than those described in Section 5.04(b)(i) hereof,
that will become payable during the next calendar month;
(xvi) the Trustee shall make a transfer to the Operating Fund,
subject to the certification required in Section 5.08 hereof, in an
amount sufficient to pay Maintenance and Operating Expenses that
will become payable during the next calendar month;
(xvii) an amount up to the amounts due during the following
month in connection with the termination of an Interest Rate
Exchange Agreement shall be paid when due; and
(xviii) if, on any Interest Payment Date occurring in the next
calendar month, Carry-over Amount (including any accrued interest
thereon) is due and payable with respect to a Series of Notes, as
provided in the related Supplemental Indenture (to the extent
amounts are available therefor after taking into account all other
amounts payable therefrom on such Interest Payment Date), an amount
up to such Carry-over Amount (including any accrued interest
thereon) shall be paid, first, to the applicable Registered Owners
of Senior Notes, Second, to the applicable Registered Owners of
Subordinate Notes and, third, to the applicable Registered Owners of
Junior-Subordinate Notes;
(xix) as directed in a Corporation Order, any portion or all
of the remaining money shall be transferred to the Acquisition Fund
and applied as set forth in Section 5.03 hereof;
(xx) any money remaining after the foregoing applications may
be transferred to the Corporation on the last Note Payment Date of
each month, if permitted pursuant to Section 5.11 hereof and if all
applicable provisions set forth in any Supplemental Indenture are
satisfied.
36
(c) Moneys in the Revenue Fund that have been reserved by the
Trustee for the payment of the amounts specified in a Corporation Order
shall be applied by the Trustee to the payment of such amounts when due in
the priority described above. In the event amounts are payable to more
than one Person pursuant to any one of the preceding clauses, and the
money available is insufficient to pay all such amounts, the available
money shall be applied, first, pro rata to the payment of amounts on or
relating to Senior Notes based upon the amount payable thereto, second,
pro rata to the payment of amounts on or relating to Subordinate Notes
based upon the amount payable thereto and, third, pro rata to the payment
of amounts on or relating to Junior-Subordinate Notes based upon the
amount payable thereto.
Section 5.05. Note Fund. The Trustee shall deposit into each Capitalized
Interest Account established within the Note Fund, the amount required to be
deposited therein pursuant to the Supplemental Indenture establishing such
Capitalized Interest Account. The Trustee shall deposit into each Interest
Account established within the Note Fund, the amount transferred thereto from
the Revenue Fund pursuant to Section 5.04(b) hereof and from the Debt Service
Reserve Fund pursuant to Section 5.07 hereof. The Trustee shall deposit into
each Principal Account established within the Note Fund, all Recoveries of
Principal required to be deposited therein, if any, pursuant to any Supplemental
Indenture, the amount transferred thereto from the Revenue Fund pursuant to
Section 5.04(b) hereof and from the Debt Service Reserve Fund pursuant to
Section 5.07 hereof.
Amounts on deposit in each Capitalized Interest Account of the Note Fund
shall be used to pay interest on the Series of Notes for which such Capitalized
Interest Account was created or to pay Program Expenses to the extent amount in
any Capitalized Expense Account are insufficient to make such payments. Amounts
on deposit in each Interest Account of the Note Fund shall be used (a) to pay
interest on the Notes or payments due on related Interest Rate Exchange
Agreements (other than any payment due upon termination of the Interest Rate
Exchange Agreement) for which such Interest Account was created and (b) if such
Notes are secured by a Credit Facility which is not a bond insurance policy, to
reimburse such Credit Facility Provider for a drawing upon its Credit Facility
to pay interest on the related Notes. Amounts on deposit in each Principal
Account of the Note Fund shall be used (i) to pay the principal of, and premium,
if any, on the Notes for which such Principal Account was created and (ii) if
such Notes are secured by a Credit Facility which is not a bond insurance
policy, to reimburse such Credit Facility Provider for a drawing upon its Credit
Facility to pay principal on the related Notes.
Section 5.06. Credit Proceeds Fund. The first source of payment of
principal and interest on a Series of Notes secured by a Credit Facility that is
not a bond insurance policy shall be a designated Account within the Credit
Proceeds Fund established for such Series of Notes. The Trustee shall deposit
into such designated Account of the Credit Proceeds Fund the proceeds of each
drawing on that Credit Facility (other than drawings to provide the Purchase
Price of tendered Notes) immediately upon receipt. The Trustee shall draw under
such Credit Facility in accordance with its terms in time and amount sufficient
to provide for the payment of principal of and interest on the related Series of
Notes secured by that Credit Facility on each Note Payment Date, whether at
maturity or upon earlier proceedings for redemption or acceleration, or
otherwise, in an amount equal to the full amount of the interest or principal
coming due on such date with respect to all such Series of Notes then
Outstanding (except with respect to Notes of
37
such Series then registered to the order or in the name of such Credit Facility
Provider or the Corporation). The Trustee shall, following deposit of such
proceeds into the Credit Proceeds Fund, apply the amounts in such designated
Account solely to pay such principal and interest on the related Series of Notes
as they become due.
Amounts on deposit in the Credit Proceeds Fund shall not be commingled
with any other Fund or Account established hereunder. The Trustee shall have the
sole right of withdrawal from the Credit Proceeds Fund, and the Corporation
shall have no legal, beneficial or equitable right, title or interest therein.
The Credit Proceeds Fund is established solely for the benefit of the Registered
Owners (except the Corporation and any Credit Facility Provider as to Notes
purchased with the proceeds of drawings under that Credit Facility), from time
to time, of the Notes secured by a Credit Facility. The Trustee shall have no
lien on amounts on deposit in the Credit Proceeds Fund for payment of its fees
or expenses.
Notwithstanding anything contained herein to the contrary, the Trustee
shall only make payments of principal, Redemption Price of, Purchase Price of
(to the extent remarketing proceeds are not available for such purposes) and
interest on Notes secured by a Credit Facility, first, from moneys drawn from
the Credit Facility and, if insufficient, then from other moneys in the Funds
and Accounts established hereunder.
The Trustee shall not require any indemnity as a condition to presenting a
draw certificate under the Credit Facility.
Section 5.07. Debt Service Reserve Fund. The Trustee shall deposit in the
Debt Service Reserve Fund the Debt Service Reserve Requirement specified in any
Supplemental Indenture and any transfers thereto from the Revenue Fund as set
forth in Section 5.04(b) hereof. Amounts on deposit in the Debt Service Reserve
Fund shall be applied as provided in Section 5.12 hereof and in conjunction with
the final payment of the principal of and interest on the last Outstanding
Notes.
To the extent moneys on deposit in the Debt Service Reserve Fund exceed
the Debt Service Reserve Requirement, as required under a Supplemental
Indenture, the Corporation may by Corporation Order direct the Trustee to
transfer such excess to the Revenue Fund. The Debt Service Reserve Fund shall be
replenished from amounts on deposit in the Revenue Fund as provided in Section
5.04(b) hereof.
The Corporation may substitute for some or all of the cash deposit
required to be maintained hereunder a Debt Service Reserve Policy or Policies
with the written approval of each Credit Facility Provider to such substitution.
Any such Debt Service Reserve Policy shall be delivered to the Trustee who shall
draw upon the Debt Service Reserve Policy in accordance with its terms and in
the manner provided in a Supplemental Indenture. Notwithstanding any of the
foregoing, amounts available under any Debt Service Reserve Policy shall not be
used to make any payments with respect to any Interest Rate Exchange Agreement.
Section 5.08. Operating Fund. The Operating Fund shall be maintained in an
account established by the Corporation with the Trustee or another depository
financial institution. Except as may be set forth in any Supplemental Indenture,
the Corporation shall be entitled to
38
withdraw in accordance with Section 5.04(b) hereof, moneys from the Revenue Fund
to pay Maintenance and Operating Expenses. The amount deposited in the Operating
Fund by transfer from the Revenue Fund and the schedule of deposits shall be
determined by the Corporation, but Maintenance and Operating Expenses expended
in any one Fiscal Year shall not exceed the amount shown in the most recent Cash
Flow Statement as Maintenance and Operating Expenses for such Fiscal Year with
respect to the Notes. The requisition, in the form of a Corporation Order, shall
include a certification that the amount requisitioned, when combined with the
amount requisitioned previously in the Fiscal Year and any other Maintenance and
Operating Expenses paid, does not exceed the amount shown in the most recent
Cash Flow Statement as Maintenance and Operating Expenses for such Fiscal Year
with respect to the Notes. The Trustee may conclusively rely upon such
Corporation Order. Upon the receipt of such requisition, the Trustee shall
withdraw the amount requisitioned from the Revenue Fund and transfer the same
into the Operating Fund. In the event there is not sufficient money on hand in
the Revenue Fund, after transfers authorized by Section 5.12 hereof, to transfer
the full amount requisitioned, the Trustee shall notify the Corporation and the
Corporation shall then determine the amount to be transferred. The Operating
Fund shall be used to pay Maintenance and Operating Expenses of the Corporation
in connection with its participation in the Student Loan Program, but shall not
be a part of the Trust Estate.
Section 5.09. Purchase Fund. The Purchase Fund is not part of the Trust
Estate and is a fund to be held by the Tender Agent. The Tender Agent shall
deposit to the credit of the Purchase Fund only the following promptly upon
receipt:
(a) the Purchase Price of tendered Notes or Undelivered Notes sold
pursuant to a remarketing agreement (other than to the Corporation); and
(b) all amounts derived from a Liquidity Facility to purchase
tendered Notes or Undelivered Notes.
The Tender Agent shall disburse amounts held for the credit of the
Purchase Fund to purchase Notes, on behalf of the persons purchasing the same.
No Notes shall be remarketed to the Corporation by any Remarketing Agent.
Section 5.10. Investment of Funds. The Trustee shall invest money held for
the credit of any Fund and Account as directed in writing (or orally, confirmed
in writing) by the Corporation or its designee to the fullest extent practicable
and reasonable, but only in Investment Securities which shall mature or be
redeemable at the option of the holder, in any event, prior to the respective
dates when the money held for the credit of such Fund and Account shall be
required for the purposes intended and in accordance with the investment and
maturity limitations set forth in the following paragraph.
Money held for the credit of the Credit Proceeds Fund shall be invested
only in Governmental Obligations which mature at the lesser of 30 days or when
needed or Investment Securities having a maturity of one day. Money held for the
credit of the Note Fund shall be invested only in Governmental Obligations which
mature at the lesser of 30 days or when needed or Investment Securities having a
maturity of one day, or in the shares of any no-load investment
39
company registered under the Investment Company Act of 1940 that operates as a
money market fund under Rule 2a-7. Any money held by the Tender Agent in any
account in the Purchase Fund shall not be invested.
The Investment Securities purchased shall be held by the Trustee and shall
be deemed at all times to be part of such Fund and Account or combination of
Funds and Accounts, and the Trustee shall inform the Corporation of the details
of all such investments. The Trustee shall use its best efforts to sell or
present for redemption any Investment Securities purchased by it as an
investment whenever it shall be necessary to provide money to meet any payment
from the applicable Fund or Account.
Notwithstanding the foregoing, the Trustee shall not be responsible or
liable for any losses on investments made by it or sold by it hereunder or for
keeping all funds held by it fully invested at all times, its only
responsibility being to comply with the investment instructions of the
Corporation or its designee in a non-negligent manner and to invest in
Investment Securities.
The Trustee shall advise the Corporation and each Credit Facility
Provider, if any, in writing, on or before the fifteenth day of each calendar
month (or such later date as reasonably consented to by the Corporation), of all
investments held for the credit of each Fund and Account as of the end of the
preceding month and the value thereof.
If the period between Interest Payment Dates for any Series of Notes is
greater than thirty days, the Trustee shall determine the cash available in the
Funds and Accounts established under this Indenture on the fifth Business Day
prior to any Note Payment Date for that Series of Notes. If at such time, the
available moneys in the Funds and Accounts established with it are insufficient
for the respective purpose for which the Funds and Accounts were established,
taking into consideration the obligations of payment from each Fund or Account
as of such Note Payment Date, the Trustee shall so notify the Corporation or its
agent, and, after the expiration of two Business Days, unless otherwise
directed, the Trustee may sell, to the extent possible on the open market, an
amount of Investment Securities as may be required to meet such deficiency or
anticipated deficiency, and the Trustee shall not be liable for any loss
resulting from such sale. The Trustee shall provide notice of any such sale to
the Credit Facility Provider.
When reference is made to the amount on deposit or required to be on
deposit at any one time in any Fund established under this Indenture, such
reference shall include (a) cash on deposit in such fund; and (b) the value,
determined pursuant to this Indenture and the applicable Supplemental Indenture,
of Investment Securities held in such fund.
Section 5.11. Withdrawal of Excess Coverage. At any time, but no more
frequently than once every month, the Corporation may deliver to the Trustee a
Corporation Order, evidencing the fact that there is then Excess Coverage on
deposit hereunder and specifying the amount thereof. On the Monthly Calculation
Date following Trustee's receipt of that Corporation Order, the Trustee shall
release such Excess Coverage to the Corporation from the Revenue Fund pursuant
to Section 5.04(b)(xx) hereof (to the extent available) for any of its corporate
purposes; provided the Corporation has received, and provided to the Trustee, a
Credit Confirmation (or, for Notes not subject to a Credit Facility, a Rating
Confirmation) with respect to such transfer.
40
Section 5.12. Order of Use of Amounts in Funds For Payment of Program
Expenses, Maintenance and Operating Expenses, Notes and Reimbursement
Obligations. Except as may be set forth in any Supplemental Indenture, in the
event there shall be a deficiency in the amounts available in the Revenue Fund
to be applied to the payment of those items described in Sections 5.04(b)(i)
through (xvi) hereof, the Trustee shall transfer moneys on deposit in the
Acquisition Fund to the Revenue Fund to the extent of such deficiency. In the
event that after such transfer or transfers there remains a deficiency in the
amounts available in the applicable Principal Account or Interest Account of the
Note Fund to pay the principal of or interest on any Notes issued hereunder, the
Trustee shall transfer moneys on deposit in the Debt Service Reserve Fund to the
appropriate Principal Account or Interest Account of the Note Fund or, if
applicable, draw on any Debt Service Reserve Policy, in accordance with its
terms, to pay such principal or interest when due; provided, however, transfers
from the Debt Service Reserve Fund to the Note Fund shall be deposited, first,
to the Senior Interest Account and the Senior Principal Account to the extent
necessary, second, to the Subordinate Interest Account and the Subordinate
Principal Account to the extent necessary and, third, to the Junior-Subordinate
Interest Account and the Junior-Subordinate Principal Account to the extent
necessary..
Section 5.13. Investment Requirements. Any investment of funds in
Investment Securities shall be held by a financial institution in accordance
with the following requirements:
(a) all Investment Securities shall be held in an account with such
financial institution in the name of the Trustee;
(b) all Investment Securities held in such account shall be
delivered to the Trustee in the following manner:
(i) 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 (other than certificated securities) and are susceptible
to physical delivery, transferred to the Trustee by physical
delivery to the Trustee, indorsed to, or registered in the name of,
the Trustee or its nominee or indorsed in blank; or such additional
or alternative procedures as may hereafter become appropriate to
effect the complete transfer of ownership of any such Investment
Securities to the Trustee free of any adverse claims, consistent
with changes in applicable law or regulations or the interpretation
thereof;
(ii) with respect to a "certificated security" (as defined in
Section 8-102(a)(4) of the UCC), transferred:
(A) by physical delivery of such certificated
security to the Trustee, provided that if the
certificated security is in the registered form, it
shall be indorsed to, or registered in the name of, the
Trustee or indorsed in blank;
(B) by physical delivery of such certificated
security in registered form to a "securities
intermediary" (as defined in Section 8-102(a)(14) of the
UCC) acting on behalf of the Trustee if the
41
certificated security has been specially indorsed to the
Trustee by an effective indorsement;
(iii) with respect to any security 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
property to an appropriate book-entry account maintained with a
Federal Reserve Bank by a securities intermediary which is also a
"depositary" pursuant to applicable federal regulations and issuance
by such securities intermediary of a deposit advice or other written
confirmation of such book-entry registration to the Trustee of the
purchase by the securities intermediary on behalf of the Trustee of
such book-entry security; the making by such securities 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 Trustee and indicating
that such securities intermediary holds such book-entry security
solely as agent for the Trustee; or such additional or alternative
procedures as may hereafter become appropriate to effect complete
transfer of ownership of any such Investment Securities to the
Trustee free of any adverse claims, consistent with changes in
applicable law or regulations or the interpretation thereof;
(iv) with respect to any "uncertificated security" (as defined
in Section 8-102(a)(18) of the UCC) that is not governed by clause
(iii) above, transferred:
(A) (1) by registration to the Trustee as
the registered owner thereof, on the books and
records of the issuer thereof, or
(2) by registration to another Person (not a
securities intermediary) that either becomes the
registered owner of the uncertificated security on
behalf of the Trustee or, have become the
registered owner, acknowledges that it holds for
the Trustee; or
(B) by the issuer thereof having agreed that it
will comply with instructions originated by the Trustee
without further consent of the registered owner thereof;
(C) with respect to any "security entitlement" (as
defined in Section 8-102(a)(17) of the UCC);
(D) if a securities intermediary
(1) indicates by book entry that a
"financial asset" (as defined in Section
8-102(a)(9) of the UCC) has been credited to
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the Trustee's "securities account" (as defined in
Section 8-501 (a) of the UCC),
(2) receives a financial asset (as so
defined) from the Trustee or acquires a financial
asset for the Trustee, and, in either case,
accepts it for credit to the Trustee's securities
account (as so defined),
(3) becomes obligated under other law,
regulation or rule to credit a financial asset to
the Trustee's securities account, or
(4) has agreed that it will comply with
"entitlement orders" (as defined in Section
8-102(a)(8) of the UCC) originated by the Trustee,
without further consent by the "entitlement
holder" (as defined in Section 8-102(a)(7) of the
UCC), and
(E) such financial asset either is such Investment
Security or a security entitlement evidencing a claim
thereto; and
(F) in each case of delivery contemplated pursuant
to clauses (A) through (E) above, the Trustee shall make
appropriate notations on its records, and shall cause
the same to be made on the records of its nominees,
indicating that such Investment Security is held in
trust pursuant to and as provided in this Indenture.
Any cash held by the Trustee shall not be considered a "financial asset"
for purposes of this Section. Subject to the other provisions hereof, the
Trustee shall have sole control over each such investment and the income
thereon, and any certificate or other instrument evidencing any such investment,
if any, shall be delivered directly to the Trustee or its agent, together with
each document of transfer, if any, necessary to transfer title to such
investment to the Trustee in a manner which complies with this paragraph.
ARTICLE VI
REDEMPTION OF NOTES
Section 6.01. Privilege of Redemption and Redemption Price. Notes may be
subject to redemption prior to maturity as set forth in a Supplemental
Indenture. Such Notes shall be redeemable as set forth in this Article, except
as may be otherwise provided in a Supplemental Indenture.
Section 6.02. Optional Redemption. In the case of any redemption of Notes
other than as provided in Section 6.03 hereof, the Corporation shall give
written notice to the Trustee and each Credit Facility Provider providing a
Credit Facility for the Notes to be redeemed, if any (a) of its election or
direction so to redeem, on the specified Redemption Date, (b) of the aggregate
principal amount of the Notes within each Series and maturities to be redeemed
(which Redemption Date, Series, maturities and principal amounts thereof to be
redeemed shall be determined by the Corporation in its sole discretion, subject
to any limitations with respect
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thereto contained in or permitted by the respective Supplemental Indenture) and
(c) of any moneys to be applied to the payment of the Redemption Price. Except
as set forth in the respective Supplemental Indenture, the notice from the
Corporation to the Trustee shall be given not less than 10 Business Days prior
to the last day on which the Trustee can give notice of redemption to Registered
Owners, unless a shorter period is acceptable to the Trustee. In the event
notice of redemption shall have been given as provided in Section 6.05 hereof,
the Trustee, if it holds the moneys to be applied to the payment of the
Redemption Price, shall prior to the Redemption Date, pay or cause to be paid to
the appropriate Paying Agent or Paying Agents an amount which, in addition to
other moneys, if any, available therefor held by such Paying Agent or Paying
Agents, will be sufficient to redeem on the Redemption Date at the Redemption
Price thereof, all the Notes to be redeemed. Such moneys shall be derived from
the Credit Proceeds Fund if the Notes to be redeemed are secured by a Credit
Facility other than a bond insurance policy. Except as provided in the preceding
sentence, funds used to optionally redeem Notes under this Section shall, to the
extent any Credit Facility other than a bond insurance policy is in effect, be
Eligible Funds.
In addition, the Outstanding Notes are subject to redemption in whole
prior to their maturity at the option of the Corporation on any Interest Payment
Date on which the aggregate current principal balance of the Notes Outstanding
shall be less than or equal to 10% of the initial aggregate principal balance of
the Notes on their respective Issue Dates, at a redemption price equal to 100%
of the principal amount of such Notes being redeemed, together with accrued
interest thereon (including any Carry-over Amount thereon and any accrued
interest on such Carry-over Amount) to the date of redemption. The amount
deposited pursuant to this paragraph shall be paid to the Registered Owners on
the related Interest Payment Date following the date of such deposit.
Section 6.03. Mandatory Redemption. Whenever by the terms of this
Indenture, the Trustee is required to redeem Notes otherwise than at the
election or direction of the Corporation, and subject to and in accordance with
the terms of the related Supplemental Indenture and this Article, the Trustee
shall select the Redemption Date of the Notes to be redeemed, give the notice of
redemption (with a copy to each Credit Facility Provider, if any) and transfer
the Redemption Price to the appropriate Paying Agents.
Section 6.04. Selection of Notes to Be Redeemed. Except as may be
otherwise provided in a Supplemental Indenture, in the event of redemption of
less than all the Outstanding Notes of like Series and maturity, the Trustee
shall assign to each Outstanding Note within the Series and maturity designated
for partial redemption a distinctive number for each minimum denomination of the
principal amount thereof so as to distinguish each such minimum denomination
from each other portion of the Notes subject to such redemption. Subject to the
terms of any Supplemental Indenture, the Trustee shall select by "lot" or in
such other manner as the Trustee shall deem fair and reasonable, the aggregate
principal amount of Notes required to be redeemed from the numbers of all such
Notes then Outstanding of such maturity within the Series designated for partial
redemption, as many numbers as, at the minimum denomination for each Note, shall
equal the principal amounts of such Notes to be redeemed. The Notes to be
redeemed shall be the Notes to which were assigned numbers so selected; but only
so much of the principal amount of each such Notes of a denomination of more
than the minimum denomination shall be redeemed as shall equal the minimum
denomination for each number
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assigned to it and so selected. For the purposes of this Section, Notes which
have theretofore been selected by lot for redemption shall not be deemed
Outstanding.
Each Supplemental Indenture may specify the minimum authorized
denominations for Notes of the Series and redemptions of a portion of any Series
of Notes issued hereunder shall be effected in integral multiples of the
applicable minimum authorized denominations.
Section 6.05. Notice of Redemption. When the Trustee shall receive notice
from the Corporation of its election or direction to redeem Notes pursuant to
Section 6.02 hereof or whenever redemption of Notes is required by this
Indenture pursuant to Section 6.03 hereof, but in each case, on the dates and at
the Redemption Prices specified in the related Supplemental Indenture, the
Trustee shall give notice, in the name of the Corporation, of the redemption of
such Notes. Such notice shall specify the complete name and Series, CUSIP
Number, interest rate, date of issue, and maturities of the Notes to be
redeemed, the Redemption Date and the place or places where amounts due upon
such redemption will be payable (with the name, address and phone number of a
contact person for the Trustee) and, if less than all the Notes of any Series
and maturity are to be redeemed, the letters and numbers or other distinguishing
marks of such Notes to be redeemed and, in the case of Notes to be redeemed in
part only, such notice shall also specify the respective portions of the
principal amount thereof to be redeemed. Such notice shall further state that on
such date there shall become due and payable upon each Note to be redeemed the
Redemption Price thereof, or the Redemption Price of the specified portions of
the principal thereof in the case of Notes to be redeemed in part only, and that
from and after such date interest thereon shall cease to accrue and be payable.
Such notice shall be given by first-class mail, not less than 15 days in the
case of Adjustable Rate Notes, and not less than 30 days, in the case of Fixed
Rate Notes, and in each case not more than 60 days before the Redemption Date,
to the Registered Owners of any Notes or portions of Notes which are to be
redeemed, at their addresses appearing upon the Note registration books;
provided, however, that shorter periods before the Redemption Date during which
notice pursuant to this Section must be given may be prescribed by a
Supplemental Indenture as to Notes issued pursuant to such Supplemental
Indenture. Failure so to mail any such notice shall not affect the validity of
the proceedings for the redemption of Notes with respect to which no such
failure occurred. As directed by the Corporation, further notice shall be given
by the Trustee in such manner as may be required or suggested by regulations or
market practice at the applicable time, but no defect in such further notice nor
any failure to give all or any portion of such further notice shall in any
manner defeat the effectiveness of a call for redemption if notice thereof is
nonetheless given as prescribed herein.
In addition, the Trustee shall send a second notice of redemption not more
than 60 days subsequent to the redemption date to Registered Owners of Notes or
portions thereof redeemed but who failed to deliver such Notes for redemption
prior to the thirtieth day following such redemption date. Failure to give all
or any portion of such further notice shall not in any manner defeat the
effectiveness of the call for redemption.
In addition to the foregoing, further notice of any redemption of Notes
hereunder shall be given by the Trustee, at least two business days in advance
of the mailed notice to Registered Owners, by registered or certified mail or
overnight delivery service, to all registered securities depositories then in
the business of holding substantial amounts of obligations of types
45
comprising the Notes and to at least two national information services that
disseminate notices of redemption of obligations such as the Notes. Such further
notice shall contain the information required above. Failure to give all or any
portion of such further notice shall not in any manner defeat the effectiveness
of a call for redemption.
Section 6.06. Payment of Redeemed Notes. Notice having been given by mail
in the manner provided in Section 6.05 hereof, the Notes or portions thereof so
called for redemption shall become due and payable on the Redemption Date so
designated at the Redemption Price, and, upon presentation and surrender thereof
at the office specified in such notice, such Notes, or portions thereof, shall
be paid at the Redemption Price. If there shall be called for redemption less
than the entire principal amount of a Note, the Corporation shall execute, the
Authenticating Agent shall authenticate and the Paying Agent shall deliver, upon
the surrender of such Note, without charge to the Registered Owner thereof, for
the unredeemed balance of the principal amount of the Note so surrendered at the
option of the Registered Owner, Notes of like Series and maturity in any of the
authorized denominations. If, on the Redemption Date, moneys for the redemption
of all the Notes or portions thereof of any like Series and maturity to be
redeemed, together with interest to the Redemption Date, shall be held by the
Paying Agent so as to be available therefor on said date and if notice of
redemption shall have been mailed as aforesaid, then, from and after the
Redemption Date, interest on the Notes or portions thereof of such Series and
maturities so called for redemption shall cease to accrue. If said moneys shall
not be available on the Redemption Date, such Notes or portions thereof shall
continue to bear interest until paid at the same rate as they would have borne
had they not been called for redemption.
ARTICLE VII
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE CORPORATION
Section 7.01. Payment of Notes. The Corporation shall duly and punctually
pay or cause to be paid, as herein provided, the principal or Redemption Price
of every Note and the interest, if any, thereon, at the dates and places and in
the manner stated in the Notes, according to the true intent and meaning
thereof.
Section 7.02. Designation of Indenture Agents. The Corporation shall
designate such Indenture Agents, in addition to or replacing the Trustee as to
the agencies to which they are appointed, as Tender Agent, Paying Agents,
Registrar or Authenticating Agent as it may deem appropriate under the
provisions of any Supplemental Indenture.
Section 7.03. Power to Issue Notes and Pledge Trust Estate. The
Corporation is duly authorized under all applicable laws to authorize and issue
the Notes and to enter into, execute and deliver this Indenture and to pledge
the Trust Estate pledged hereby in the manner and to the extent herein provided.
The Trust Estate so pledged is and will be free and clear of any pledge, lien,
charge or encumbrance thereon, or with respect thereto, prior to the pledge
created hereby, and all action on the part of the Corporation to that end has
been and will be duly and validly taken. The Notes and the provisions of this
Indenture are and will be the valid and legally enforceable limited obligations
of the Corporation in accordance with their terms and the terms of this
Indenture.
46
Section 7.04. Further Assurances. At any and all times, the Corporation
shall, so far as it may be authorized by law, pass, make, do, execute,
acknowledge and deliver, all and every such further resolutions, acts, deeds,
conveyances, assignments, transfers and assurances as may be necessary or
desirable for the better assuring, conveying, granting, pledging, assigning and
confirming all and singular the Trust Estate, rights and assets hereby pledged
or assigned, or intended so to be, or which the Corporation may become bound to
pledge or assign.
Section 7.05. Accounts and Reports.
(a) The Corporation shall keep, or cause to be kept, proper books of
record and account in which complete and accurate entries shall be made of
all of its transactions relating to the Financed Student Loans and all
Funds established by this Indenture which shall upon reasonable notice and
at all reasonable times be subject to the inspection of the Trustee, any
Credit Facility Provider and the Registered Owners of an aggregate of not
less than 25% in principal amount of Notes then Outstanding or their
representatives duly authorized in writing.
(b) The Corporation shall annually, within 150 days after the end of
the Corporation's first Fiscal Year and within 120 days after the close of
each Fiscal Year thereafter, file with the Trustee, any Credit Facility
Provider, any Liquidity Facility Provider and the Rating Agencies then
rating the Notes: (i) audited financial statements for such Fiscal Year
for any Person for which the Corporation has been consolidated for
financial accounting purposes (or for the Corporation if the Corporation
is not then consolidated with any other Person for financial accounting
purposes) and (ii) a balance sheet showing the assets and liabilities of
the Trust Estate at the end of such Fiscal Year. The financial statements
shall be accompanied by an Accountant's Certificate stating that the
financial statements examined present fairly the financial position of
such Person (or the Corporation) at the end of the Fiscal Year, the
results of its operations and the changes in financial position for the
period examined, in conformity with generally accepted accounting
principles.
(c) The Trustee shall have no duty or responsibility with respect to
the Corporation's financial statements or accounts and reports set forth
herein except to make them available at no charge, upon request, to the
Registered Owners as hereinbefore provided and to persons or entities that
claim in writing to be a beneficial owner of Notes. The Trustee shall be
entitled to reimbursement for all expenses and charges related to the
Trustee providing such financial statements to the Registered Owners.
Section 7.06. Student Loan Program.
(a) The Corporation, through its Servicers and Subservicers, shall
diligently collect all principal and interest payments on all the Financed
Student Loans held under this Indenture, and Default Claims, if any, which
relate to such Financed Student Loans. The Corporation, through its
Servicer or Subservicers, shall cause the filing and assignment of such
claims within the time prescribed, with respect to Private Loans acquired
with proceeds of Notes, by the Regulations of each Guarantee Agency
guaranteeing Private Loans acquired with proceeds of Notes and, with
respect to FFELP
47
Loan acquired with proceeds of Notes, the Higher Education Act and the
Regulations of the Secretary and the Guarantee Agencies guaranteeing FFELP
Loans acquired with proceeds of Notes. The Corporation will comply with
the provisions of the Higher Education Act, if any, which apply to the
FFELP Loans acquired with proceeds of Notes.
(b) No amount in the Acquisition Fund shall be expended or applied
for the purpose of purchasing, originating or financing a Student Loan,
and no Student Loan shall be financed hereunder, unless the Corporation
has determined that each of the Student Loans meets the requirements of
Section 7.12 hereof.
(c) The Corporation may at any time exchange a Financed Student Loan
for another Student Loan that does not meet the similar characteristics
requirement of paragraph (e) of this Section provided that is has a
maturity, an aggregate principal amount and interest rate not less than
the aggregate principal amount and interest rate of the Financed Student
Loan being exchanged, or sell, assign, transfer or otherwise dispose of a
Financed Student Loan at a price:
(i) in excess of the principal amount thereof (plus
accrued borrower interest) or in excess of the purchase price
paid by the Corporation for such Financed Student Loan (less
principal amounts received with respect to such Financed
Student Loan);
(ii) equal to the principal amount thereof (plus accrued
borrower interest), when the amounts on deposit in the Funds
and Accounts and the Financed Student Loans in the Acquisition
Fund (including accrued interest thereon), are at least equal
to the principal amount of the Outstanding Notes plus accrued
interest or in order to pay current Debt Service on the Notes
or to avoid any default in the payment obligations of the
Corporation under any Reimbursement Agreement or otherwise; or
(iii) lower than the principal amount thereof (plus
accrued borrower interest) if the Corporation has received a
Credit Confirmation (or, for Notes not subject to a Credit
Facility, a Rating Confirmation);
provided, however, that such exchanges, sales, assignments, transfers or
dispositions shall not collectively exceed 5% of the aggregate principal
amount of the Financed Student Loans in any one year without the written
consent of each Credit Facility Provider, if any.
(d) To the extent permitted by this Indenture and each Supplemental
Indenture, the Corporation will use its best efforts to evaluate the
reinvestment of Recoveries of Principal and interest receipts with respect
to Financed Student Loans to ensure that it will continue to be able to
fulfill its debt service requirements hereunder.
(e) Notwithstanding anything herein to the contrary, the Corporation
may, without limitation, at any time and from time to time exchange
Financed Student Loans for other Student Loans having similar
characteristics (including insurance or guarantees, if any, maturities and
payment status) and an aggregate principal amount and interest rate
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not less than the aggregate principal amount and interest rate of the
Financed Student Loans being exchanged.
Section 7.07. Servicing of Financed Student Loans. The Corporation shall
cause all Financed Student Loans to be properly serviced and the payment and
collection of all payments of principal and interest to be enforced by the
Servicer or any additional or successor Servicer evidencing, in the judgment of
the Corporation, the capability and experience necessary to adequately service
student loans, including, with respect to FFELP Loans, in accordance with
regulations issued under the Higher Education Act, if applicable. The
Corporation covenants that the Servicer will be its agent and subject to its
general direction under a contract with the Servicer. The Servicer may perform
its duties through Subservicers, except as may be provided by any Supplemental
Indenture. The Corporation shall cause all Financed Student Loan notes to be
held in trust as part of the Trust Estate subject to the lien of this Indenture.
The Corporation shall cause to be diligently enforced, and take all
reasonable steps, actions and proceedings necessary for the enforcement of, all
terms, covenants and conditions of all Servicing Agreements, including the
prompt payment of all principal and interest payments and all other amounts due
the Corporation thereunder. The Corporation shall not permit the release of the
obligations in any manner that materially adversely affects the rights or
security of the Registered Owners, any Credit Facility Provider or any Liquidity
Facility Provider of any Servicer under any Servicing Agreement and shall at all
times, to the extent permitted by law, cause to be defended, enforced, preserved
and protected the rights and privileges of the Corporation, the Trustee and the
Registered Owners under or with respect to each Servicing Agreement. The
Corporation shall not consent or agree to or permit any amendment or
modification of any Servicing Agreement which will in any manner materially
adversely affect the rights or security of the Trustee, the Registered Owners,
any Credit Facility Providers or any Liquidity Facility Providers.
Section 7.08. Issuance of Additional Notes.
(a) After the issuance of the initial Series of Notes under this
Indenture, the Corporation shall not create or permit the creation of or
issue any obligations or create any additional indebtedness which will be
secured by a lien or charge on the Trust Estate, except as follows: (i)
additional Series of Notes may be issued from time to time, subject to the
provisions of Section 2.03 hereof, including a Rating Confirmation and
written consent of each Credit Facility Provider, if any, for Senior
Notes, which may have any priority designation and which may be superior
to (but not superior to Senior Notes), on a parity with, or subordinate to
one or more initial Series of Notes or Interest Rate Exchange Agreements;
and (ii) Interest Rate Exchange Agreements may be entered into from time
to time which may have any priority designation and which may be superior
to (but not superior to Senior Notes), on a parity with or subordinate to
one or more Series of Notes or Interest Rate Exchange Agreements. The
Corporation shall not enter into an Interest Rate Exchange Agreement
without obtaining a Credit Confirmation (or, for Notes not subject to a
Credit Facility, a Rating Confirmation).
(b) No Series of Notes shall be issued under this Indenture except
in accordance with Section 2.03 hereof.
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(c) The Corporation hereby expressly reserves the right to execute
and deliver one or more additional general indentures, to issue
indebtedness thereunder, and to pledge other assets not in the Trust
Estate to payment of such indebtedness.
Section 7.09. Compliance With Conditions Precedent. The Corporation
represents that upon the date of issuance of any of the Notes, all conditions,
acts and things required by law or by this Indenture to exist, to have happened
or to have been performed precedent to or in the issuance of such Notes shall
exist, have happened and have been performed, or will have happened or been
performed, and such Notes, together with all other indebtedness of the
Corporation, shall be within every debt and other limit prescribed by law.
Section 7.10. General Compliance with Conditions in this Indenture and any
Reimbursement Agreements. The Corporation shall do and perform or cause to be
done and performed all acts and things required to be done or performed by or on
behalf of the Corporation under the provisions of this Indenture and any
Reimbursement Agreement in accordance with the terms of such provisions. The
Corporation agrees that, if there is any conflict between this Indenture and any
Reimbursement Agreement, the provisions of this Indenture shall control. In the
event of a conflict between the terms of Reimbursement Agreements pertaining to
the Notes, the Reimbursement Agreement pertaining to the Senior Notes shall
govern (or if no Senior Notes are Outstanding, the Reimbursement Agreement
pertaining to the Subordinate Notes shall govern and, if no Senior Notes or
Subordinate Notes are Outstanding, the Reimbursement Agreement pertaining to the
Junior-Subordinate Notes shall govern).
Section 7.11. Additional Covenants. The Corporation covenants that it will
acquire or cause to be acquired Student Loans as described herein. The
Registered Owners of the Notes shall not in any circumstances be deemed to be
the owner or holder of the Financed Student Loan.
The Corporation, or its designated agent, shall be responsible for each of
the following actions:
(a) With respect to Financed Student Loans originated under the
Higher Education Act, the Corporation, or its designated agent, shall be
responsible for dealing with the Secretary with respect to the rights,
benefits and obligations under the certificates of insurance and the
contract of insurance with respect to Financed Student Loans originated
under the Higher Education Act, and the Corporation shall be responsible
for dealing with the Guarantee Agency with respect to the rights, benefits
and obligations under any Guarantee Agreement with respect to the Financed
Student Loans.
(b) With respect to Financed Student Loans originated under the
Higher Education Act, the Corporation, or its designated agent, shall
comply, and shall cause all of its officers, directors, employees and
agents to comply, with the provisions of the Higher Education Act and any
regulations or rulings thereunder, and with the provisions of any
Guarantee Agreement with respect to the Financed Student Loans.
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(c) The Corporation, or its designated agent, shall cause the
benefits of the Guarantee Agreements, the Interest Subsidy Payments and
the Special Allowance Payments to flow to the Trustee.
(d) The Trustee shall have no obligation to administer, service or
collect the loans in the Trust Estate or to maintain or monitor the
administration, servicing or collection of such loans.
The Trustee shall not be deemed to be the designated agent for the
purposes of this Section unless it has agreed in writing to be such agent.
Section 7.12. Covenant Regarding Financed Student Loans. The Corporation
hereby covenants that all Student Loans to be acquired hereunder will meet the
following:
(a) Each Student Loan is evidenced by an executed promissory note,
which note is a valid and binding obligation of the borrower, enforceable
by or on behalf of the holder thereof in accordance with its terms,
subject to bankruptcy, insolvency and other laws relating to or affecting
creditors' rights.
(b) The amount of the unpaid principal balance of each Student Loan
is due and owing, and no counterclaim, offset, defense or right to
rescission exists with respect to any such Student Loan which can be
asserted and maintained or which, with notice, lapse of time, or the
occurrence or failure to occur of any act or event, could be asserted and
maintained by the borrower against the Corporation as assignee thereof.
The Corporation shall take all reasonable actions to assure that no maker
of a Student Loan has or may acquire a defense to the payment thereof.
(c) No Student Loan has a payment that is more than 60 days overdue.
(d) The Corporation has full right, title and interest in each
Student Loan free and clear of all liens, pledges or encumbrances
whatsoever.
(e) Each Student Loan was made in compliance with all applicable
local, state and federal laws, rules and regulations, including, without
limitation, all applicable nondiscrimination, truth-in-lending, consumer
credit and usury laws.
(f) Except as otherwise approved in writing by each Credit Facility
Provider, all loan documentation shall be delivered to the Servicer (as
custodian for the Trustee) prior to payment of the purchase price of such
Student Loan.
(g) Each Student Loan is accruing interest (whether or not such
interest is being paid currently, either by the borrower or the Secretary,
or is being capitalized), except as otherwise expressly permitted by this
Indenture.
(h) Each FFELP Loan evidenced by a Master Promissory Note in the
form mandated by Section 432(m)(1)(D) of the Higher Education Act and any
Private Loan evidenced by a master promissory note shall be acquired
pursuant to a loan purchase agreement with a Seller containing language
similar to that contained in Exhibit B hereto.
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Section 7.13. Continued Existence; Successor of Corporation. The
Corporation agrees that it will do or cause to be done all things necessary to
preserve and keep in full force and effect its existence, rights and franchises
as a corporation under the laws of the State, except as otherwise permitted by
this Section. The Corporation further agrees that it will not (a) sell, transfer
or otherwise dispose of all or substantially all, of its assets (except Financed
Student Loans if such sale, transfer or disposition will discharge this
Indenture in accordance with Article XII hereof); (b) consolidate with or merge
into another corporation or entity; or (c) permit one or more other corporations
or entities to consolidate with or merge into it. The preceding restrictions in
clauses (a), (b) and (c) shall not apply to a transaction if the transferee or
the surviving or resulting corporation or entity, if other than the Corporation,
by proper written instrument for the benefit of the Trustee, irrevocably and
unconditionally assumes the obligation to perform and observe the agreements and
obligations of the Corporation under this Indenture.
Section 7.14. Servicer Computer Operations. The Corporation, if it has
prior knowledge of a proposed conversion, shall not permit any Servicer to
transfer material components of its computer servicing operations from an
existing application system to a new application system unless it has notified
each Credit Facility Provider of the proposed timing and extent of conversion
and it has received the written consent of each Credit Facility Provider, if
any. The Corporation also agrees to provide each Credit Facility Provider
information regarding the operating and efficiency of the Servicer's system
following such conversion within 30 days following conversion or such longer
time as is consented to in writing by each Credit Facility Provider and in any
event the Corporation agrees to provide each Credit Facility Provider with a due
diligence audit within 90 days following conversion or such longer time as is
consented to in writing by such Credit Facility Provider.
Section 7.15. Representations; Negative Covenants. The Corporation hereby
makes the following representations and warranties to the Trustee on which the
Trustee relies in authenticating the Notes and on which the Registered Owners
have relied in purchasing the Notes. Such representations and warranties shall
survive the transfer and assignment of the Trust Estate to the Trustee.
(a) Organization and Good Standing. The Corporation is duly
organized and validly existing under the laws of the State of Delaware,
and has the power to own its own assets and to transact the business in
which it presently engages.
(b) Due Qualification. The Corporation is duly qualified to do
business and is in good standing, and has obtained all material, necessary
licenses and approvals, in all jurisdictions where the failure to be so
qualified, have such good standing or have such licenses or approvals
would have a material adverse effect on the Corporation's business and
operations or in which the actions as required by this Indenture require
or will require such qualification.
(c) Authorization. The Corporation has the power, authority and
legal right to execute, deliver and perform its obligations under this
Indenture and to grant the Trust Estate to the Trustee and the execution
and delivery of and the performance of its obligations under this
Indenture and grant of the Trust Estate to the Trustee have been duly
authorized by the Corporation by all necessary corporation action.
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(d) Binding Obligation. This Indenture, assuming due authorization,
execution and delivery by the Trustee, constitutes a legal, valid and
binding obligation of the Corporation enforceable against the Corporation
in accordance with its terms, except that (i) such enforcement may be
subject to bankruptcy, insolvency, reorganization, moratorium or other
similar laws (whether statutory, regulatory or decisional) now or
hereafter in effect relating to creditors' rights generally; and (ii) the
remedy of specific performance and injunctive and other forms of equitable
relief may be subject to certain equitable defenses and to the discretion
of the court before which any proceeding therefor may be brought, whether
a proceeding at law or in equity.
(e) No Violation. The consummation of the transactions contemplated
by this Indenture and the fulfillment of the terms hereof does not
conflict with, result in any breach of any terms and provisions of or
constitute (with or without notice, lapse of time or both) a default under
the organizational documents of the Corporation, or any material
indenture, agreement, mortgage, deed of trust or other instrument to which
the Corporation is a party or by which it is bound, or result in the
creation or imposition of any lien upon any of its material properties
pursuant to the terms of any such indenture, agreement, mortgage, deed of
trust or other instrument, other than this Indenture, nor violate any law
or any order, rule or regulation applicable to the Corporation of any
court or of any federal or state regulatory body, administrative agency,
or other governmental instrumentality having jurisdiction over the
Corporation or any of its properties.
(f) No Proceedings. There are no proceedings, injunctions, writs,
restraining orders or investigations to which the Corporation or any of
its Affiliates is a party pending, or, to the best of such entity's
knowledge, threatened, before any court, regulatory body, administrative
agency, or other tribunal or governmental instrumentality (i) asserting
the invalidity of this Indenture, (ii) seeking to prevent the issuance of
any Notes or the consummation of any of the transactions contemplated by
this Indenture or (iii) seeking any determination or ruling that might
materially and adversely affect the performance by the Corporation of its
obligations under, or the validity or enforceability of this Indenture.
(g) Approvals. All approvals, authorizations, consents, orders or
other actions of any person, corporation or other organization, or of any
court, governmental agency or body or official, required on the part of
the Corporation in connection with the execution and delivery of this
Indenture have been taken or obtained on or prior to the Issue Date.
(h) Place of Business. The Corporation's place of business and chief
executive office is ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇.
(i) Tax and Accounting Treatment. The Corporation intends to treat
the transactions contemplated by Student Loan Purchase Agreements for
Student Loan as an absolute transfer rather than as a pledge of the
Student Loans from the Seller for federal income tax, and the Corporation
will be treated as the owner of the Financed Student Loans for all
purposes. The Corporation further intends to treat the Notes as its
indebtedness for federal income tax.
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(j) Taxes. The Corporation has filed (or caused to be filed) all
federal, state, county, local and foreign income, franchise and other tax
returns required to be filed by it through the date hereof, and has paid
all taxes reflected as due thereon. The Corporation has taken all steps
necessary to ensure that it is eligible to file a consolidated federal
income tax return with UICI and such returns will be filed for all taxable
years in which the Notes are Outstanding. There is no pending dispute with
any taxing authority that, if determined adversely to the Corporation,
would result in the assertion by any taxing authority of any material tax
deficiency, and the Corporation has no knowledge of a proposed liability
for any tax year to be imposed upon such entity's properties or assets for
which there is not an adequate reserve reflected in such entity's current
financial statements.
(k) Legal Name. The legal name of the Corporation is "CFLD-I, Inc."
and has not changed since its inception. The Corporation has no trade
names, fictitious names, assumed names or "dba's" under which it conducts
its business and has made no filing in respect of any such name.
(l) Business Purpose. The Corporation will acquire Student Loans
conveyed to it under Student Loan Purchase Agreements for a bona fide
business purpose rather than as an agent of any other person. The
Corporation has no subsidiaries, has adopted and operated consistently
with all corporate formalities with respect to its operations and has
engaged in no other activities other than those specified in this
Indenture and its organizational documents and in accordance with the
transactions contemplated herein and therein.
(m) Compliance with Laws. The Corporation is in compliance with all
applicable laws and regulations with respect to the conduct of its
business and has obtained and maintains all permits, licenses and other
approvals as are necessary for the conduct of its operations.
(n) Valid Business Reasons; No Fraudulent Transfers. The
transactions contemplated by this Indenture are in the ordinary course of
the Corporation's business and the Corporation has valid business reasons
for granting the Trust Estate pursuant to this Indenture. At the time of
each such grant: (i) the Corporation granted the Trust Estate to the
Trustee without any intent to hinder, delay, or defraud any current or
future creditor of the Corporation; (ii) the Corporation was not insolvent
and did not become insolvent as a result of any such grant; (iii) the
Corporation was not engaged and was not about to engage in any business or
transaction for which any property remaining with such entity was an
unreasonably small capital or for which the remaining assets of such
entity are unreasonably small in relation to the business of such entity
or the transaction; (iv) the Corporation did not intend to incur, and did
not believe or should not have reasonably believed, that it would incur,
debts beyond its ability to pay as they become due; and (v) the
consideration paid received by the Corporation for the grant of the Trust
Estate was reasonably equivalent to the value of the related grant.
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(o) No Management of Affairs of Affiliates. The Corporation is not
and will not be involved in the day-to-day management of the Corporation's
parent or any Affiliate.
(p) No Intercorporate Transfers with Seller or Affiliates. Other
than the acquisition of assets and the transfer of any Notes pursuant to
this Indenture, the Corporation does not engage in and will not engage in
any intercorporate transactions with any of its Affiliates, except as
provided herein.
(q) Ability to Perform. There has been no material impairment in the
ability of the Corporation to perform its obligations under this
Indenture.
(r) Financial Condition. No material adverse change has occurred in
the Corporation's financial status since the date of its formation.
(s) Event of Default. No Event of Default has occurred and no event
has occurred that, with the giving of notice, the passage of time, or
both, would become an Event of Default.
(t) Acquisition of Student Loans Legal. The Corporation has complied
with all applicable, federal, state and local laws and regulations in
connection with its acquisition of the Student Loans from the Seller.
(u) No Material Misstatements or Omissions. No information,
certificate of an officer, statement furnished in writing or report
delivered to the Trustee, any Servicer, any Guarantee Agency, any Credit
Facility Provider, any Liquidity Facility Provider, any Surety Provider or
any Registered Owner by the Corporation contains any untrue statement of a
material fact or omits a material fact necessary to make such information,
certificate, statement or reporting not misleading.
Section 7.16. Corporation Covenants. So long as any of the Notes are
Outstanding:
(a) The Corporation shall not engage in any business or activity
other than in connection with the activities contemplated hereby and in
the Student Loan Purchase Agreements, and in connection with the issuance
of Notes.
(b) The funds and other assets of the Corporation shall not be
commingled with those of any other individual, corporation, estate,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization, or government or any agency or political
subdivision thereof.
(c) The Corporation shall not be, become or hold itself out as being
liable for the debts of any other party.
(d) The Corporation shall not form, or cause to be formed, any
subsidiaries.
55
(e) The Corporation shall act solely in its own name and through its
duly authorized officers or agents in the conduct of its business, and
shall conduct its business so as not to mislead others as to the identity
of the entity with which they are concerned.
(f) The Corporation shall maintain its records and books of account
and shall not commingle its records and books of account with the records
and books of account of any other Person. The books of the Corporation
maybe kept (subject to any provision contained in the statutes) inside or
outside the State at such place or places as may be designated from time
to time by the board of trustees or in the bylaws of the Corporation.
(g) All actions of the Corporation shall be taken by a duly
authorized officer or agent of the Corporation.
(h) The Corporation shall not amend, alter, change or repeal any
provision contained in this Section without (i) the prior written consent
of the Trustee and each Credit Facility Provider or Liquidity Facility
Provider, if required by the Reimbursement Agreement relating to such
Liquidity Facility, and (ii) a Rating Confirmation from each Rating Agency
rating any Notes Outstanding (a copy of which shall be provided to the
Trustee) that such amendment, alteration, change or repeal will have no
adverse effect on the rating assigned to the Notes.
(i) The Corporation shall not amend its Articles of Incorporation
without first obtaining the prior written consent of each Rating Agency
and each Credit Facility Provider, if any.
(j) All audited financial statements of the Corporation that are
consolidated with those of any Affiliate thereof will contain detailed
notes clearly stating that (i) all of the Corporation's assets are owned
by the Corporation, and (ii) the Corporation is a separate entity with
creditors who have received ownership and/or security interests in the
Corporation's assets.
(k) The Corporation will strictly observe legal formalities in its
dealings with any of its Affiliates, and funds or other assets of the
Corporation will not be commingled with those of any of its Affiliates.
The Corporation shall not maintain joint bank accounts or other depository
accounts to which any of its Affiliate has independent access. None of the
Corporation's funds will at any time be pooled with the funds of any of
its Affiliates.
(l) The Corporation will maintain an arm's length relationship with
the Seller (and any Affiliate). Any Person that renders or otherwise
furnishes services to the Corporation will be compensated by the
Corporation at market rates for such services it renders or otherwise
furnishes to the Corporation except as otherwise provided in this
Indenture. Except as contemplated in this Indenture, the Student Loan
Purchase Agreements or the Servicing Agreements, the Corporation will not
hold itself out to be responsible for the debts of the Seller, the parent
or the decisions or actions respecting the daily business and affairs of
the Seller or parent.
56
(m) The Corporation shall not sell, transfer, exchange or otherwise
dispose of any portion of the Trust Estate except as expressly permitted
by this Indenture.
(n) The Corporation shall not claim any credit on, or make any
deduction from, the principal amount of any of the Notes by reason of the
payment of any taxes levied or assessed upon any portion of the Trust
Estate.
(o) The Corporation shall not permit the validity or effectiveness
of this Indenture, any Supplement or any grant hereunder 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 under this Indenture, except as
may be expressly permitted hereby.
ARTICLE VIII
SUPPLEMENTAL INDENTURES NOT REQUIRING
CONSENT OF REGISTERED OWNERS
Section 8.01. Supplemental Indentures Not Requiring the Consent of
Registered Owners. For any one or more of the following purposes and at any time
or from time to time subject to the provisions of Section 8.02 hereof and with
written approval of each Credit Facility Provider, if any, a Supplemental
Indenture not requiring the consent of Registered Owners may be executed and
delivered by the Corporation and the Trustee for the following purposes:
(a) to close this Indenture, or provide limitations and restrictions
in addition to the limitations and restrictions contained in this
Indenture on, the authentication and delivery of Notes or the issuance of
other evidences of indebtedness;
(b) to add to the covenants and agreements of the Corporation in
this Indenture other covenants and agreements to be observed by the
Corporation which are not contrary to or inconsistent with this Indenture
as theretofore in effect;
(c) to add to the limitations and restrictions in this Indenture
other limitations and restrictions to be observed by the Corporation which
are not contrary to or inconsistent with this Indenture as theretofore in
effect;
(d) to surrender any right, power or privilege reserved to or
conferred upon the Corporation by the terms of this Indenture, but only if
the surrender of such right, power or privilege is not contrary to or
inconsistent with the covenants and agreements of the Corporation
contained in this Indenture;
(e) to confirm, as further assurance, any pledge under, and the
subjection to any lien or pledge created or to be created by, this
Indenture, of the Trust Estate or of any other revenues or assets;
(f) to modify any of the provisions of this Indenture in any respect
whatever, but only if (i) such modification shall be, and be expressed to
be, effective only after all Notes Outstanding at the date of the
execution of such Supplemental Indenture shall
57
cease to be Outstanding, and (ii) such Supplemental Indenture shall be
specifically referred to in the text of all Notes authenticated and
delivered after the date of the execution of such Supplemental Indenture
and of Notes issued in exchange therefor or in place thereof;
(g) to authorize the issuance of one or more Series of Notes and to
prescribe the terms and conditions upon which such Notes may be issued;
(h) to create additional special trust accounts for the further
securing of all Notes, all Senior Notes, all Subordinate Notes, all
Junior-Subordinate Notes or all Notes of a Series issued pursuant to this
Indenture if along with such Supplemental Indenture there is filed an
Opinion of Counsel to the effect that the creation and operation of such
account will in no way impair the existing security of the Registered
Owner of any Outstanding Note;
(i) to cure any ambiguity, supply any omission, or cure or correct
any defect or inconsistent provisions in this Indenture;
(j) to insert such provisions clarifying matters or questions
arising under this Indenture as are necessary or desirable and are not
contrary to or inconsistent with this Indenture as theretofore in effect;
(k) to provide for additional duties of the Trustee in connection
with the Financed Student Loans;
(l) to satisfy the requirements of a Rating Agency in order to
obtain, maintain or improve the rating on any of the Notes;
(m) to replace, change or alter the Rating Agencies then rating the
Notes;
(n) to provide for the orderly sale or remarketing of Notes;
(o) to make any other change which, in the judgment of the Trustee
acting in reliance on an Opinion of Counsel is necessary or desirable to
maintain the tax status of the Notes as debt for federal tax purposes;
(p) to make any change which, in the judgment of the Trustee acting
in reliance upon an Opinion of Counsel, to the extent the Trustee deems
such opinion desirable, is not to the prejudice of the Trustee or the
Registered Owners;
(q) to make any change that affects only the rights of a Credit
Facility Provider or Liquidity Facility Provider which has issued a Credit
Facility or Liquidity Facility with respect to any of the Notes, with the
prior written consent of such Credit Facility Provider or Liquidity
Facility Provider;
(r) to provide for the conversion of the interest rate on any Series
of Notes as provided in a Supplemental Indenture;
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(s) to allow the Trustee, or any other Person acting on behalf of
the Corporation, to become, or continue as, an Eligible Lender under the
Higher Education Act;
(t) to make any other change with a Credit Confirmation (or, for
Notes not subject to a Credit Facility, a Rating Confirmation); or
(u) to modify, amend or supplement this Indenture or any
Supplemental Indenture in such manner as to permit the qualification
hereof and thereof under the Trust Indenture Act of 1939, as amended or
any similar federal statute hereafter in effect or to permit the
qualification of the Notes for sale under the securities laws of the
United States of America or of any of the states of the United States of
America, and, if they so determine, to add to this Indenture or any
Supplemental Indenture hereto such other terms, conditions and provisions
as may be permitted by said Trust Indenture Act of 1939, as amended or
similar federal statute.
Section 8.02. General Provisions.
(a) Any Supplemental Indenture permitted or authorized by Section
8.01 hereof may be executed by the Corporation without the consent of any
of the Registered Owners, but with the consent of each Credit Facility
Provider, and the Liquidity Facility Provider for the Series of Notes
affected. The Corporation shall further notify the Rating Agencies then
Rating the Notes of the execution of such Supplemental Indenture. The copy
of every Supplemental Indenture filed with the Trustee shall be
accompanied by an Opinion of Counsel including a statement that such
Supplemental Indenture has been duly and lawfully executed in accordance
with the provisions of this Indenture and any applicable Reimbursement
Agreement, is authorized or permitted by this Indenture, and, assuming due
authorization, execution and delivery by the other parties thereto, is
valid and binding upon the Corporation.
(b) The Trustee is hereby authorized to execute any Supplemental
Indenture referred to and permitted or authorized by Section 8.01 or
Article IX hereof, and to make all further agreements and stipulations
which may be therein contained, and the Trustee, in taking such action,
shall be fully protected in relying on an Opinion of Counsel that such
Supplemental Indenture is authorized or permitted by the provisions of
this Indenture.
(c) No Supplemental Indenture shall change or modify any of the
rights or obligations of any Indenture Agent without its written assent
thereto.
ARTICLE IX
SUPPLEMENTAL INDENTURES
REQUIRING CONSENT OF REGISTERED OWNERS
Section 9.01. Mailing of Notice of Amendment. Any provision of this
Article for the mailing of a notice or other document to Registered Owners shall
be fully complied with if it is mailed postage prepaid (a) to each Registered
Owner of Notes then Outstanding at his address
59
appearing upon the Note registration books of the Corporation, (b) to the
Trustee, (c) to the Rating Agencies then rating the Notes, (d) to each Credit
Facility Provider, if any, and (e) to each Liquidity Facility Provider for any
Notes to which such notice or other document relates.
Section 9.02. Powers of Amendment. Except as provided in Article VIII
hereof, any modification of or amendment to this Indenture and of the rights and
obligations of the Corporation, any Credit Facility Provider, or any Liquidity
Facility Provider under a Supplemental Indenture, and of the Registered Owners
of the Notes of any particular Series, may be made by a Supplemental Indenture,
with the written consent: (a) of the Registered Owners of at least 51% in
principal amount of the Senior Notes Outstanding (or, if no Senior Notes are
Outstanding, then by Registered Owners of at least 51% in principal amount of
the Subordinate Notes Outstanding at the time such consent is given or, if no
Senior Notes or Subordinate Notes are Outstanding, then by Registered Owners of
at least 51% in principal amount of the Junior-Subordinate Notes Outstanding at
the time such consent is given); (b) in case less than all of the several Series
of Notes then Outstanding are affected by the modification or amendment, of the
Registered Owners of at least 51% in aggregate principal amount of the Notes of
each Series so affected and Outstanding at the time such consent is given, (c)
in case the modification or amendment changes the terms of any Sinking Fund
Payment, of the Registered Owners of at least 100% in principal amount of the
Notes of the particular Series and maturity entitled to such Sinking Fund
Payment and Outstanding at the time such consent is given, and (d) of each
Credit Facility Provider, if any.
In the event that a Credit Facility Provider has issued a Credit Facility
or a Liquidity Facility Provider has issued a Liquidity Facility respecting a
Series of Notes and unless such Credit Facility Provider or such Liquidity
Facility Provider is then in receivership, bankruptcy or reorganization or is
then continuing wrongfully to dishonor drawings under the Credit Facility or
Liquidity Facility, such Credit Facility Provider or, in the event there is no
Credit Facility Provider, such Liquidity Facility Provider shall be considered
as the Registered Owner of 100% of such Series of Notes for the purpose of
consenting to any modification of or amendment to this Indenture, but, only if
so required by the applicable Reimbursement Agreement in the case of the
Liquidity Facility Provider.
If any such modification or amendment will not take effect so long as any
Notes of any specified maturity remain Outstanding, the consent of the
Registered Owners of such Notes shall not be required and such Notes shall not
be deemed to be Outstanding for the purpose of any calculation of Outstanding
Notes under this Section. No such modification or amendment shall permit a
change in the terms of redemption or maturity of the principal of any
Outstanding Note or of any installment of interest thereon or a reduction in the
principal amount or the Redemption Price thereof or in the rate of interest
thereon without the consent of the Registered Owner of such Note (which consent
shall not be deemed to be effected by a Credit Facility Provider or Liquidity
Facility Provider), or shall reduce the percentages or otherwise affect the
Series of Notes that must consent to any modification or amendment of this
Indenture without the consent of all of Registered Owners of the Notes of that
Series, or shall change or modify any of the rights or obligations of any
Indenture Agent without its written assent thereto. For the purposes of this
Section, a Series of Notes shall be deemed to be affected by a modification or
amendment of this Indenture if the same adversely affects or diminishes the
rights of the Registered Owners of Notes of such Series. The Trustee may
determine, upon receipt of an Opinion of Counsel,
60
whether Notes of any particular Series would be affected by any modification or
amendment hereof and any such determination shall be binding and conclusive on
the Corporation, any Credit Facility Provider or Liquidity Facility Provider and
all Registered Owners of Notes.
Section 9.03. Consent of Registered Owners.
(a) A copy of any Supplemental Indenture making a modification or
amendment which is not permitted by the provisions of Section 8.01 hereof
(or brief summary thereof or reference thereto in a form approved by the
Trustee), together with a request to Registered Owners for their consent
thereto in a form satisfactory to the Trustee, shall be mailed by the
Registrar on behalf of the Corporation to each Credit Facility Provider,
if any, and the Registered Owner of any Note to be affected by such
proposed amendment or modification. Such Supplemental Indenture shall not
be effective unless and until there shall have been filed with the Trustee
(A) the written consents of Registered Owners of the percentages of
Outstanding Notes and each Credit Facility Provider specified in Section
9.02 hereof and (B) an Opinion of Counsel stating that such Supplemental
Indenture has been duly executed by the Corporation in accordance with the
provisions of this Indenture and any applicable Reimbursement Agreement,
is authorized or permitted hereby and, assuming due authorization,
execution and delivery by the other parties thereto, is valid and binding
upon the Corporation.
(b) Any such consent shall be binding upon the Registered Owner of
the Notes giving such consent and upon any subsequent Registered Owner of
such Notes and of any Notes issued in exchange therefor (whether or not
such subsequent Registered Owner thereof has notice thereof) unless such
consent is revoked in writing by the Registered Owner of such Notes giving
such consent or a subsequent Registered Owner thereof by filing with the
Trustee, prior to the time when the written statement of the Trustee
hereinafter provided for in this Section is filed, such revocation.
(c) At any time after the Registered Owners of the required
percentages of Notes shall have filed their consents to the Supplemental
Indenture, the Trustee shall make and file with the Corporation and the
Trustee a written statement that the Registered Owners of such required
percentages of Notes have filed such consents. Such written statements
shall be conclusive that such consents have been so filed. At any time
thereafter, notice, stating in substance that the Supplemental Indenture
(which may be referred to as a Supplemental Indenture dated as of a stated
date, a copy of which is on file with the Trustee) has been consented to
by the Registered Owners of the required percentages of Notes and will be
effective as provided in this Section shall be given to Registered Owners
by the Corporation by mailing such notice to the Registered Owners not
more than 90 days after the Registered Owners of the required percentages
of Notes shall have filed their consents to the Supplemental Indenture and
the written statement of the Trustee herein above provided for is filed.
The Corporation shall file with the Trustee proof of the mailing of such
notice. A record, consisting of the papers required or permitted by this
Section to be filed with the Trustee, shall be proof of the matters
therein stated. Such Supplemental Indenture making such amendment or
modification shall be deemed conclusively binding upon the Corporation,
the Indenture Agents and the Registered Owners of all Notes after the
filing with the Trustee of the proof of the
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mailing of the notice of such consent, except in the event of a final
decree of a court of competent jurisdiction setting aside such
Supplemental Indenture in a legal action or equitable proceeding for such
purpose.
Section 9.04. Modifications by Unanimous Consent. The terms and provisions
of this Indenture and the rights and obligations of the Corporation and of the
Registered Owners of the Notes hereunder may be modified or amended in any
respect upon the execution by the Corporation and the Trustee of a Supplemental
Indenture with the consent of the Registered Owners of all the Notes then
Outstanding, such consent to be given as provided in Section 9.03 hereof, but no
such modification or amendment shall change or modify any of the rights or
obligations of any Indenture Agent without the filing with the Trustee of the
written assent thereto of such Indenture Agent in addition to the consent of the
Registered Owners. No notice of any such modification, amendment, assent or
publication thereof shall be required.
Section 9.05. Exclusion of Notes. Notes owned or held by the Corporation
shall not be deemed Outstanding for the purpose of consent or other action or
any calculation of Outstanding Notes provided for in this Article, and the
Corporation shall not be entitled with respect to such Notes to give any consent
or take any other action provided for in this Article. At the time of any
consent or other action taken under this Article, the Corporation shall furnish
the Trustee a Certificate of an Authorized Representative, upon which the
Trustee may rely, describing all Notes so to be excluded.
Section 9.06. Notation on Notes. Notes authenticated and delivered after
the effective date of any action taken as provided in Article VIII hereof or
this Article may and, if the Trustee so determines, shall bear a notation by
endorsement or otherwise in form approved by the Corporation and the Trustee as
to such action, and in that case upon demand of the Registered Owner of any
Outstanding Note at such effective date and presentation of his Note for the
purpose at the principal corporate trust office of the Trustee or upon any
transfer or exchange of any Note Outstanding at such effective date, suitable
notation shall be made on such Note or upon any Note issued upon any such
transfer or exchange by the Trustee as to any such action. If the Corporation or
the Trustee shall so determine, new Notes modified to conform to such action in
the opinion of the Trustee and the Corporation shall be prepared, executed,
authenticated and delivered, and upon demand of the Registered Owner of any Note
then Outstanding shall be exchanged, without cost to such Registered Owner, upon
surrender of such Outstanding Note.
ARTICLE X
DEFAULTS AND REMEDIES
Section 10.01. Events of Default. Each of the following events is an
"Event of Default":
(a) payment by the Corporation of the principal, Purchase Price, or
Redemption Price, if any, with respect to the Senior Notes Outstanding
shall not be made when and as the same shall become due, whether at
maturity or upon call for redemption or otherwise (or, if no Senior Notes
are Outstanding, payment by the Corporation of the
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principal, Purchase Price, or Redemption Price, if any, with respect to
the Subordinate Notes Outstanding shall not be made when and as the same
shall become due, whether at maturity or upon call for redemption or
otherwise, or, if no Senior Notes or Subordinate Notes are Outstanding,
payment by the Corporation of the principal, Purchase Price, or Redemption
Price, if any, with respect to the Junior-Subordinate Notes Outstanding
shall not be made when and as the same shall become due, whether at
maturity or upon call for redemption or otherwise); or
(b) payment by the Corporation of any installment of interest with
respect to the Senior Notes Outstanding shall not be made when and as the
same shall become due (or, if no Senior Notes are Outstanding, payment by
the Corporation of any installment of interest with respect to the
Subordinate Notes Outstanding shall not be made when and as the same shall
become due, or, if no Senior Notes or Subordinate Notes are Outstanding,
payment by the Corporation of any installment of interest with respect to
the Junior-Subordinate Notes Outstanding shall not be made when and as the
same shall become due); or
(c) the Corporation shall fail or refuse to comply with the
provisions of this Indenture, or shall default in the performance or
observance of any of the other covenants, agreements or conditions on its
part contained herein or in any Supplemental Indenture or the Notes, other
than those described in paragraph (a) or (b) of this Section, and such
failure, refusal or default shall continue for a period of 30 days after
written notice thereof has been delivered to the Corporation by the
Trustee or by the Registered Owners of not less than 25% in principal
amount of the Outstanding Notes;
(d) (i) except for each Series of Notes that is secured by a Credit
Facility which is an insurance policy, with respect to any Series of Notes
secured by a Credit Facility or Liquidity Facility, the related Credit
Facility Provider or Liquidity Facility Provider has delivered written
notice to the Trustee to the effect that the Corporation has failed to
reimburse or otherwise pay such Credit Facility Provider or Liquidity
Facility Provider pursuant to the terms of its Reimbursement Agreement as
and when such reimbursement or payment becomes due and payable, and
pursuant to the terms of the applicable Reimbursement Agreement, it is
requiring that such Notes be accelerated, or (ii) for a Series of Notes
secured by a Credit Facility that is an insurance policy, the related
Credit Facility Provider has delivered written notice to the Trustee that
it is requiring that such Notes be accelerated pursuant to the terms of
this Indenture; or
(e) the Corporation shall have commenced a voluntary case or other
proceeding seeking liquidation, reorganization or other relief with
respect to itself or its debts under any bankruptcy, insolvency, or other
similar law now or hereafter in effect, or an involuntary case or other
proceeding shall have been commenced against the Corporation seeking
liquidation, reorganization or other relief with respect to it or its
debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect.
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Section 10.02. Remedies.
(a) Upon the occurrence and continuance of any Event of Default
specified in paragraphs (a), (b), (d) or (e) of Section 10.01 hereof, the
Trustee shall promptly notify the Corporation, each Credit Facility
Provider, each Liquidity Facility Provider, each Surety Provider, each
counterparty to an Interest Rate Exchange Agreement and each Indenture
Agent of the existence of such Event of Default and shall proceed upon
indemnification to the Trustee's satisfaction with the consent of each
Credit Facility Provider or at the written direction of each Credit
Facility Provider subject to the provisions of Article XI hereof, or upon
the occurrence and continuance of any Event of Default specified in
paragraph (c) of Section 10.01 hereof, the Trustee shall promptly notify
the Corporation, each Credit Facility Provider, each Liquidity Facility
Provider, each Surety Provider, each counterparty to an Interest Rate
Exchange Agreement and each Indenture Agent of the existence of such Event
of Default and may, with the written consent of each Credit Facility
Provider, but shall not be required to (or, if instructed by the
Registered Owners as described in Section 10.05 hereof with the written
consent of each Credit Facility Provider, if any, or, if instructed in
writing by each Credit Facility Provider, shall) proceed in its own name,
subject to the provisions of Article XI hereof, to protect and enforce the
rights of the Registered Owners by such of the following remedies, as the
Trustee, being advised by counsel, shall deem most effectual to protect
and enforce such rights:
(i) by mandamus or other suit, action or proceeding at law or
in equity, to enforce all rights of the Registered Owners, including
the right to require the Corporation to carry out the covenants and
agreements as to, and the assignment of, the Financed Student Loans
and to require the Corporation to carry out any other covenants or
agreements with Registered Owners and to perform its duties as
prescribed by law;
(ii) by bringing suit upon the Notes;
(iii) by action or suit in equity, to require the Corporation
to account as if it were the trustee of an express trust for the
Registered Owners of the Notes;
(iv) by action or suit in equity to enjoin any acts or things
which may be unlawful or in violation of the rights of the
Registered Owners of the Notes; or
(v) upon the occurrence of an Event of Default specified in
paragraphs (a) or (b), (d) or (e) of Section 10.01 hereof, the
Trustee shall, but only with the written consent or at the written
direction of each Credit Facility Provider, if any, and in the case
of an Event of Default specified in paragraph (c), the Trustee
shall, upon the written direction of the Registered Owners with the
written consent or the written direction of each Credit Facility
Provider, if any, as provided in Section 10.05 hereof, after written
notice to the Corporation, to the extent required by law, declare
the principal of the Notes then Outstanding to be immediately due
and payable, whereupon the principal and the accrued interest on
such Notes through the date of acceleration shall, without further
action, become
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and be immediately due and payable, anything in this Indenture, or
in the Notes to the contrary notwithstanding. If all defaults shall
be cured, then, the Trustee may annul such declaration and its
consequences with the written consent of each Credit Facility
Provider, if any; provided each Credit Facility or Liquidity
Facility for the Notes previously in effect is fully reinstated and
in full force and effect.
(b) If Notes secured by a Credit Facility are accelerated upon the
written consent or direction of each Credit Facility Provider, the Trustee
shall make a drawing or claim on the Credit Facility concurrently with
such acceleration for the principal and accrued interest on such Notes
then due. Such drawing shall be made notwithstanding any right of such
Credit Facility Provider to control remedies provided in Section 10.05
hereof, and the Trustee shall not require any indemnity for making such
drawing.
(c) In the enforcement of any rights and remedies under this
Indenture, the Trustee shall be entitled to ▇▇▇ for, enforce payment of
and receive any and all amounts then or during any default becoming, and
at any time remaining, due and unpaid from the Corporation for principal,
interest or otherwise, under any provisions of this Indenture or a
Supplemental Indenture or of the Notes, with interest on overdue payments
at the rate of interest specified in such Notes, together with any and all
costs and expenses of collection and of all proceedings thereunder and
under such Notes without prejudice to any other right or remedy of the
Trustee or of the Registered Owners, and to recover and enforce a judgment
or decree against the Corporation for any portion of such amounts
remaining unpaid, with interest, costs and expenses (including without
limitation pretrial, trial and appellate attorney fees), and to collect
from the Corporation any moneys adjudged or decreed to be payable;
provided, however, any recovery against the Corporation is limited to the
Trust Estate.
(d) Upon the occurrence of any Event of Default, and on the filing
of suit or other commencement of judicial proceedings to enforce the
rights of the Registered Owners under this Indenture, the Trustee shall be
entitled, as a matter of right, to the appointment of a receiver or
receivers of the Trust Estate and of the assets of the Corporation
relating to the Student Loan Program, pending such proceedings, with such
powers as the court making such appointment shall confer.
(e) Except upon the occurrence and during the continuance of an
Event of Default hereunder, the Corporation hereby expressly reserves and
retains the privilege to receive and, subject to the terms and provisions
of this Indenture, to keep or dispose of, claim, bring suit upon or
otherwise exercise, enforce or realize upon its rights and interest in and
to the Financed Student Loans and the proceeds of any collections
therefrom, and neither the Trustee nor any Registered Owner shall in any
manner be or be deemed to be an indispensable party to the exercise of any
such privilege, claim or suit.
(f) The Trustee shall select and liquidate or sell Trust Estate
assets as provided in the following paragraph or as provided in the last
paragraph of this Section but only at the written direction of each Credit
Facility Provider, if any, and shall not be liable to any Registered
Owner, any Credit Facility Provider, any Liquidity Facility Provider or
the Corporation by reason of such selection, liquidation or sale.
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Whenever moneys are to be applied pursuant to this Article irrespective of
and whether other remedies authorized under this Indenture shall have been
pursued in whole or in part, the Trustee may cause any or all of the assets of
the Trust Estate to be sold. The Trustee may so sell the assets of the Trust
Estate and all right, title, interest, claim and demand thereto and the right of
redemption thereof, in one or more parts, at any such place or places, and at
such time or times and upon such notice and terms as the Trustee may deem
appropriate with written consent of each Credit Facility Provider, if any, or at
the written direction of each Credit Facility Provider and as may be required by
law and apply the proceeds thereof in accordance with the provisions of this
Section at the written direction of each Credit Facility Provider or with the
written consent of each Credit Facility Provider. Upon such sale, the Trustee
may make and deliver to the purchaser or purchasers a good and sufficient
assignment or conveyance for the same, which sale shall be a perpetual bar both
at law and in equity against the Corporation, each Credit Facility Provider,
each Liquidity Facility Provider, the Registered Owners, and all other persons
claiming such properties. No purchaser at any sale shall be bound to see to the
application of the purchase money proceeds thereof or to inquire as to the
authorization, necessity, expediency or regularity of any such sale.
Nevertheless, if so requested by the Trustee, the Corporation shall ratify and
confirm any sale or sales by executing and delivering to the Trustee or to such
purchaser or purchasers all such instruments as may be necessary or, in the
judgment of the Trustee, proper for the purpose which may be designated in such
request.
To the extent that funds are not otherwise available to pay amounts due to
a Credit Facility Provider or a Liquidity Facility Provider under its
Reimbursement Agreement pursuant to this Section, and unless otherwise provided
in a Supplemental Indenture, the Trustee, at the request and in the sole
discretion of the Corporation (except as provided in the final paragraph of this
Section), shall convey or sell and deliver Financed Student Loans purchased with
assets of the Trust Estate to such Credit Facility Provider or such Liquidity
Facility Provider in partial or complete satisfaction of such obligations of the
Corporation, subject to the acceptance of such Financed Student Loans by such
Credit Facility Provider or such Liquidity Facility Provider at a purchase price
equal to the principal outstanding plus accrued interest.
Should an event of default under a Reimbursement Agreement have occurred
and be continuing unremedied for more than 15 days each Credit Facility Provider
under its Reimbursement Agreement shall be entitled to direct the Trustee in
writing to sell Financed Student Loans constituting part of the Trust Estate and
to apply the proceeds thereof as provided in Section 10.03 hereof.
Section 10.03. Priority of Payments After Default.
(a) In the event that upon the occurrence and during the continuance
of any Event of Default, the funds held by the Trustee and Paying Agents
shall be insufficient for the payment of principal or Redemption Price of
and interest then due on the Notes, such funds (other than funds held for
the payment of particular Notes pursuant to Article XII hereof or which
have theretofore become due at maturity) and any other amounts received or
collected by the Trustee acting pursuant to this Article, after providing
for the payment of any fees and expenses, including attorney's fees,
necessary in the opinion of the Trustee to protect the interest of the
Registered Owners of the Notes and for the payment of the fees, charges
and expenses and liabilities incurred and
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advances made by the Trustee or another Indenture Agent in the performance
of their respective duties under this Indenture, including any fees due
and owing (except that no lien shall attach to the proceeds of any drawing
under a Credit Facility or Liquidity Facility or on any remarketing
proceeds for the payment of such fees, charges and expenses), shall be
applied as follows:
(i) If the principal of all of the Notes is not due and
payable:
FIRST: To the payment to the persons entitled thereto of all
installments of interest then due on Senior Notes and unpaid
installments of amounts then due on any Interest Rate Exchange
Agreements secured on a parity with the Senior Notes in the order of
the maturity of such installments, and, if the amount available
shall not be sufficient to pay in full any installment, then to the
payment thereof ratably, according to the amounts due on such
installment, to the persons entitled thereto, without any
discrimination or preference.
SECOND: To the payment to the persons entitled thereto of the
unpaid principal or Redemption Price of any Senior Notes then due
and, if the amounts available shall not be sufficient to pay in full
all the Senior Notes due, then to the payment thereof ratably,
according to the amounts of principal or Redemption Price due on
such date, to the persons entitled thereto, without any
discrimination or preference.
THIRD: To the payment of any amounts then due and owing on a
Credit Facility or Liquidity Facility for Senior Notes not paid
pursuant to Section 10.03(a)(iv) hereof.
FOURTH: To the payment of any amounts then due and owing to
the provider of a Debt Service Reserve Policy.
FIFTH: To the payment to the persons entitled thereto of all
installments of interest then due on Subordinate Notes and unpaid
installments of amounts then due on any Interest Rate Exchange
Agreements secured on a parity with Subordinate Notes in the order
of the maturity of such installments, and, if the amount available
shall not be sufficient to pay in full any installment, then to the
payment thereof ratably, according to the amounts due on such
installment, to the persons entitled thereto, without any
discrimination or preference.
SIXTH: To the payment to the persons entitled thereto of the
unpaid principal or Redemption Price of any Subordinate Notes then
due and, if the amounts available shall not be sufficient to pay in
full all the Subordinate Notes due, then to the payment thereof
ratably, according to the amounts of principal or Redemption Price
due on such date, to the persons entitled thereto, without any
discrimination or preference.
SEVENTH: To the payment of any amounts then due and owing on a
Credit Facility or Liquidity Facility for Subordinate Notes not paid
pursuant to Section 10.03(a)(iv) hereof.
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EIGHTH: To the payment to the persons entitled thereto of all
installments of interest then due on Junior-Subordinate Notes and
unpaid installments of amounts then due on any Interest Rate
Exchange Agreements secured on a parity with Junior-Subordinate
Notes in the order of maturity of such installments, and, if the
amount available shall not be sufficient to pay in full any
installment, then to the payment thereof ratably, according to the
amounts due on such installment, to the persons entitled thereto,
without any discrimination or preference.
NINTH: To the payment to the persons entitled thereto of the
unpaid principal or Redemption Price of any Junior-Subordinate Notes
then due and, if the amounts available shall not be sufficient to
pay in full all the Junior-Subordinate Notes due, then to the
payment thereof ratably, according to the amounts of the principal
or Redemption Price due on such date, to the persons entitled
thereto, without any discrimination or preference.
TENTH: To the payment of any amounts then due and owing on a
Credit Facility or Liquidity Facility for Junior-Subordinate Notes
not paid pursuant to Section 10.03(a)(iv) hereof.
(ii) If the principal of all of the Notes have become or have
been declared due and payable:
FIRST, to the payment of the principal and interest then due
and unpaid upon the Senior Notes and amounts payable on Interest
Rate Exchange Agreements secured on a parity with Senior Notes
without preference or priority of principal over interest or of
interest over principal, or of any installment of interest on an
Interest Rate Exchange Agreement secured on a parity with the Senior
Notes over any other installment of interest, or of any Senior Notes
or Interest Rate Exchange Agreements secured on a parity with Senior
Notes over any other Senior Note or Interest Rate Exchange
Agreements secured on a parity with Senior Notes, ratably, according
to the amounts due respectively for principal and interest, to the
persons entitled thereto without any discrimination or preference
except as to any difference in the respective rates of interest
specified in the Senior Notes or any Interest Rate Exchange
Agreements secured on a parity with Senior Notes;
SECOND, to the payment of any amounts then due and owing on a
Credit Facility or Liquidity Facility for Senior Notes not paid
pursuant to Section 10.03(a)(iv) hereof;
THIRD, to the payment of any amounts then due and owing to any
provider of a Debt Service Reserve Policy;
FOURTH, to the payment of the principal and interest then due
and unpaid upon the Subordinate Notes and amounts payable on
Interest Rate Exchange Agreements secured on a parity with
Subordinate Notes without
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preference or priority of principal over interest or of interest
over principal, or of any installment of interest on an Interest
Rate Exchange Agreement secured on a parity with the Subordinate
Notes over any other installment of interest, or of any Subordinate
Notes or Interest Rate Exchange Agreements secured on a parity with
Subordinate Notes over any other Subordinate Note or Interest Rate
Exchange Agreements secured on a parity with Subordinate Notes,
ratably, according to the amounts due respectively for principal and
interest, to the persons entitled thereto without any discrimination
or preference except as to any difference in the respective rates of
interest specified in the Subordinate Notes or any Interest Rate
Exchange Agreements secured on a parity with Subordinate Notes;
FIFTH, to the payment of any amounts then due and owing on a
Credit Facility or Liquidity Facility for Subordinate Notes not paid
pursuant to Section 10.03(a)(iv) hereof;
SIXTH, to the payment of the principal and interest then due
and unpaid upon the Junior-Subordinate Notes and amounts payable on
Interest Rate Exchange Agreements secured on a parity with
Junior-Subordinate Notes without preference or priority of principal
over interest or of interest over principal, or of any installment
of interest on an Interest Rate Exchange Agreement secured on a
parity with the Junior-Subordinate Notes over any other installment
of interest, or of any Junior-Subordinate Notes or Interest Rate
Exchange Agreements secured on a parity with Junior-Subordinate
Notes over any other Junior-Subordinate Note or Interest Rate
Exchange Agreements secured on a parity with Junior-Subordinate
Notes, ratably, according to the amounts due respectively for
principal and interest, to the persons entitled thereto without any
discrimination or preference except as to any difference in the
respective rates of interest specified in the Junior-Subordinate
Notes or any Interest Rate Exchange Agreements secured on a parity
with Junior-Subordinate Notes;
SEVENTH, to the payment of any amounts then due and owing on a
Credit Facility or Liquidity Facility for Junior-Subordinate Notes
not paid pursuant to Section 10.03(a)(iv) hereof.
(iii) If the principal of all the Notes shall have been
declared immediately due and payable, and if such declarations shall
thereafter have been rescinded and annulled under the provisions of
this Article, then, subject to the provisions of Section 10.02(a)(v)
hereof in the event that the principal of all the Notes shall later
become due or be declared due and payable, the moneys shall be
applied in accordance with the provisions of Section 10.03(a)(i)
hereof.
(iv) With respect to any payment made under this Section
10.03(a), in the event the Notes on which a payment is to be made
are secured by a Credit Facility, payment of principal and interest
on such Notes shall be paid from a drawing on the Credit Facility as
set forth in Section 5.06 hereof and each Credit Facility Provider
shall be reimbursed for the drawing in the priority given to such
Notes in subsections (i) and (ii) above.
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(b) Whenever moneys are to be applied by the Trustee pursuant to the
provisions of this Section, such moneys shall be applied by the Trustee at
such times, and from time to time, as the Trustee in its sole discretion
shall determine, having due regard to the amount of such moneys available
for application and the likelihood of additional money becoming available
for such application in the future. The deposit of such moneys with the
Paying Agents, or otherwise setting aside such moneys in trust for the
proper purpose, shall constitute proper application by the Trustee, and
the Trustee shall incur no liability whatsoever to the Corporation, to any
Registered Owner or to any other person for any delay in applying any such
moneys, so long as the Trustee acts with reasonable diligence, having due
regard for the circumstances, and ultimately applies the same in
accordance with such provisions of this Indenture as may be applicable at
the time of application by the Trustee. Whenever the Trustee shall
exercise such discretion in applying such moneys, it shall fix the date
(which shall be an Interest Payment Date unless the Trustee shall deem
another date more suitable) upon which such application is to be made and
upon such date interest on the amounts of principal to be paid on such
date shall cease to accrue. The Trustee shall give such notice as it may
deem appropriate for the fixing of any such date. The Trustee shall not be
required to make payment to the Registered Owner of any unpaid Note unless
such Note shall be presented to the Trustee for appropriate endorsement or
for cancellation if fully paid.
Section 10.04. Termination of Proceedings. In case any proceedings taken
by the Trustee on account of any Event of Default shall have been discontinued
or abandoned for any reason, then in every such case the Corporation, the
Trustee and the Registered Owners shall be restored to their former positions
and rights hereunder, respectively, and all rights, remedies, powers and duties
of the Trustee shall continue as though no such proceeding had been taken;
provided each Credit Facility or Liquidity Facility for the Notes previously in
effect is fully reinstated and in full force and effect.
Section 10.05. Registered Owners' Direction of Proceedings. Whenever it is
provided in this Article that the Registered Owners of the Notes shall enjoy
certain rights, be permitted to exercise certain remedies or to direct the
Trustee to take certain actions, this Section shall control. Upon the occurrence
of an Event of Default described in Section 10.01(c), (d) or (e) hereof, each
Credit Facility Provider, if any, for or the Registered Owners of not less than
100% in principal amount of the Senior Notes then Outstanding, but only with the
written consent of each Credit Facility Provider, if any, for the Senior Notes
(or, if no Senior Notes are Outstanding, each Credit Facility Provider, if any,
for or the Registered Owners of not less than 100% in principal amount of the
Subordinate Notes then Outstanding, but only with the written consent of each
Credit Facility Provider, if any, for the Subordinate Notes, or, if no Senior
Notes or Subordinate Notes are Outstanding, each Credit Facility Provider, if
any, or the Registered Owners of not less than 100% in principal amount of the
Junior-Subordinate Notes then Outstanding, but only with the written consent of
each Credit Facility Provider, if any, for the Junior-Subordinate Notes), or,
upon the occurrence of an Event of Default described in Section 10.01(a) or (b)
hereof, each Credit Facility Provider, if any, for or the Registered Owners of a
majority in the principal amount of the Senior Notes then Outstanding, but only
with the written consent of each Credit Facility Provider, if any, for the
Senior Notes (or, if no Senior Notes are Outstanding, each Credit Facility
Provider, if any, for or the Registered Owners of a majority in principal amount
of the Subordinate Notes then Outstanding, but only with the
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written consent of each Credit Facility Provider, if any, for the Subordinate
Notes, or, if no Senior Notes or Subordinate Notes are Outstanding, each Credit
Facility Provider, if any, or the Registered Owners of a majority in principal
amount of the Junior-Subordinate Notes then Outstanding, but only with the
written consent of each Credit Facility Provider, if any, for the
Junior-Subordinate Notes), shall have the right to direct the Trustee to take
all or any of the actions described in Section 10.02(a) hereof. In the event
that each Credit Facility Provider or such Registered Owners have previously
given to the Trustee written notice of an Event of Default and shall have
afforded the Trustee a reasonable opportunity, following the offer to the
Trustee of security and indemnity satisfactory to it against the fees, costs,
expenses and liabilities to be incurred therein or thereby, either to proceed to
exercise the powers herein granted or to pursue a remedy described herein, and
the Trustee shall have refused or neglected to comply with such request, then
each Credit Facility Providers, if any, for or the Registered Owners of the
requisite percentage in principal amount of the Senior Notes with the written
consent of each Credit Facility Provider for the Senior Notes (or, if no Senior
Notes are Outstanding, each Credit Facility Provider, if any, for or the
Registered Owners of requisite percentage in principal amount of the Subordinate
Notes then Outstanding, but only with the written consent of each Credit
Facility Provider, if any, for the Subordinate Notes, or, if no Senior Notes or
Subordinate Notes are Outstanding, each Credit Facility Provider, if any, or the
Registered Owners of requisite percentage in principal amount of the
Junior-Subordinate Notes then Outstanding, but only with the written consent of
each Credit Facility Provider, if any, for the Junior-Subordinate Notes), shall
have the right to direct the Trustee in writing to take all or any of the
actions described in Section may exercise such rights.
In the event that a Credit Facility Provider has issued a Credit Facility
or a Liquidity Facility Provider has issued a Liquidity Facility respecting a
Series of Notes and unless such Credit Facility Provider or such Liquidity
Facility Provider is then in receivership, bankruptcy or reorganization or is
then continuing wrongfully to dishonor drawings under the Credit Facility or
Liquidity Facility, upon the occurrence of any Event of Default or any other
event described below, such Credit Facility Provider or, in the event there is
no Credit Facility Provider, such Liquidity Facility Provider (provided amounts
are owing to the Liquidity Facility Provider under the applicable Reimbursement
Agreement) shall be considered as the Registered Owner of 100% of such Series of
Notes solely for the purpose of directing the actions of the Trustee under this
Article. All rights and remedies described in this Article shall apply not only
following the occurrence of an Event of Default, but also following the
occurrence of any event which gives rights to a Credit Facility Provider or
Liquidity Facility Provider upon the occurrence of an event of default under the
Reimbursement Agreement with that Credit Facility Provider or Liquidity Facility
Provider. Notwithstanding anything else herein, if the Trustee receives contrary
written direction from the Registered Owners, any Credit Facility Provider and
any Liquidity Facility Provider for the same Series of Notes, it shall act on
the direction of such Credit Facility Provider provided (a) the direction
complies with the requirements of this Indenture (including the provisions of
satisfactory indemnity), and (b) such Credit Facility Provider is not then in
receivership, bankruptcy or reorganization or continuing to dishonor wrongfully
a drawing on the Credit Facility. If the conditions for direction by such Credit
Facility Provider are not met, the Trustee shall act on the direction of the
Liquidity Facility Provider provided (i) the direction complies with the
requirements of this Indenture (including the provisions of satisfactory
indemnity), (ii) the Liquidity Facility Provider is not then in receivership,
bankruptcy or reorganization or continuing to dishonor wrongfully a drawing on
the Liquidity Facility, and
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(iii) amounts are owing to the Liquidity Facility Provider under the applicable
Reimbursement Agreement. If the conditions for direction by such Credit Facility
Provider and Liquidity Facility Provider are not met, the Trustee shall act on
the direction of the Registered Owners provided in the manner described in this
Section.
Any provision of this Indenture to the contrary notwithstanding, the
consent or approval of a Credit Facility Provider or Liquidity Facility Provider
shall not be necessary where, in the case of consent or approval by a Credit
Facility Provider, such Credit Facility Provider is in bankruptcy, insolvency,
receivership or similar proceeding or in default of or contesting its
obligations under any Credit Facility, and in the case of consent or approval of
a Liquidity Facility Provider, such Liquidity Facility Provider is in
bankruptcy, insolvency, receivership or similar proceeding, or is in default of
or contesting its obligations under any Liquidity Facility.
Section 10.06. Limitation on Rights of Registered Owners.
(a) Except as otherwise specifically provided by Section 10.05
hereof or by this Section, no Registered Owner of any Note shall have any
right to institute any suit, action, mandamus or other proceeding in
equity or at law hereunder, or for the protection or enforcement of any
right under this Indenture. It is understood and intended that, except as
otherwise above provided, no one, or more Registered Owners of the Notes
shall have any right in any manner whatever by its or their action to
affect, disturb or prejudice the security of this Indenture, or to enforce
any right hereunder with respect to the Notes or this Indenture, except in
the manner herein provided, and that all proceedings at law or in equity
shall be instituted, had and maintained in the manner herein provided and
for the benefit of Registered Owners of the Outstanding Notes.
(b) Anything to the contrary notwithstanding contained in this
Section, or any other provision of this Indenture, each Registered Owner
of any Note by his acceptance thereof shall be deemed to have agreed that
any court in its discretion may require, in any suit for the enforcement
of any right or remedy under this Indenture or any Supplemental Indenture,
or in any suit against the Trustee for any action taken or omitted by it
as Trustee, the filing by any party litigant in such suit of an
undertaking to pay the reasonable costs of such suit, and that such court
may in its discretion assess reasonable costs, including reasonable
pretrial, trial and appellate attorneys fees, against any party litigant
in any 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
paragraph shall not apply to any suit instituted by the Trustee.
Section 10.07. Possession of Notes by Trustee Not Required. All rights of
action under this Indenture or under any of the Notes, enforceable by the
Trustee, may be enforced by it without the possession of any of the Notes or the
production thereof on the trial or other proceeding relative thereto, and any
such suit, action or proceeding instituted by the Trustee shall be brought in
its name for the benefit of all the Registered Owners of such Notes, subject to
the provisions of this Indenture.
Section 10.08. Remedies Not Exclusive. No remedy herein conferred upon or
reserved to the Trustee or to the Registered Owners of the Notes is intended to
be exclusive of any other
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remedy or remedies, and each and every such remedy shall be cumulative and shall
be in addition to any other remedy given hereunder or now or hereafter existing
at law or in equity or by statute.
Section 10.09. No Waiver of Default. No delay or omission of the Trustee
or of any Registered Owner of the Notes to exercise any right or power accruing
upon any default shall impair any such right or power or shall be construed to
be a waiver of any such default or an acquiescence therein and every power and
remedy given by this Indenture to the Trustee and the Registered Owners of the
Notes, respectively, may be exercised from time to time and as often as may be
deemed expedient.
Section 10.10. Notice of Event of Default; Acceleration. The Trustee shall
give to all the Registered Owners, the Corporation, each Indenture Agent, each
Credit Facility Provider, each Liquidity Facility Provider and each Surety
Provider notice of each Event of Default hereunder known by a trust officer in
the corporate trust department of the Trustee within 90 days after actual
knowledge of the occurrence thereof, unless such Event of Default shall have
been remedied or cured before the giving of such notice; provided, that, the
Trustee shall be protected in withholding such notice from the Registered Owners
if and so long as the board of directors, the executive committee, or a trust
committee of directors or responsible officers of the Trustee in good faith
determines that the withholding of such notice is in the interest of the
Registered Owners. The Trustee shall be deemed to have actual knowledge of any
Event of Default under Section 10.01(a) and (b) and any other Event of Default
for which an Indenture Agent, a Credit Facility Provider, a Liquidity Facility
Provider or a Registered Owner has provided the Trustee with written notice of
such Event of Default. Each such notice of Event of Default shall be given by
the Trustee by mailing written notice thereof: (a) to all Registered Owners of
Notes, as the names and addresses of such Registered Owners appear upon the
books for registration and transfer of Notes as kept by the Trustee, and (b) to
such other persons, at the addresses given herein or in the related Supplemental
Indenture.
The Trustee shall give to all Registered Owners, the Corporation, each
Indenture Agent, each Credit Facility Provider, each Liquidity Facility Provider
and each Surety Provider notice of acceleration of a Series of Notes as soon as
possible, but in any event no later than the second Business Day after an
acceleration.
ARTICLE XI
CONCERNING THE INDENTURE AGENTS
Section 11.01. Appointment and Acceptance of Duties of Trustee. Zions
First National Bank is hereby appointed as Trustee. By executing this Indenture,
the Trustee hereby accepts the trusts and obligations imposed upon it by this
Indenture and agrees to perform such trusts and obligations, but only upon and
subject to the following express terms and conditions:
(a) The Trustee, prior to the occurrence of an Event of Default and
after the curing of all Events of Default which may have occurred,
undertakes to perform such duties and only such duties as are specifically
set forth in this Indenture and there shall be no implied duties or
obligations. In case an Event of Default has occurred (which has not
73
been cured or waived) the Trustee shall exercise such of 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 man would exercise or use in the
circumstances in the conduct of his own affairs.
(b) The Trustee may execute any of the trusts or powers hereof and
perform, any of its duties by or through attorneys, agents, receivers or
employees but shall be answerable for the conduct of the same in
accordance with the standard specified above, and shall be entitled to
act, upon the opinion or advice of its counsel concerning all matters
hereof, and may in all cases be reimbursed hereunder for reasonable
compensation paid to all such attorneys, agents, receivers and employees
as may reasonably be employed in connection with the trust hereof. The
Trustee may act upon an Opinion of Counsel, and shall not be responsible
for any loss or damage resulting from any action by it taken or omitted to
be taken in good faith in reliance upon such Opinion of Counsel. The
Trustee may act upon a Corporation Order and shall not be responsible for
any loss or damage resulting from any action by it taken or omitted to be
taken in good faith in reliance upon such Corporation Order without
negligence or willful default. The Trustee need not investigate or make
any independent determination of the facts, representations or conclusions
contained in a Corporation Order. Prior to taking any action hereunder,
the Trustee shall be entitled to a Corporation Order and/or an Opinion of
Counsel that all conditions precedent under this Indenture and any
Supplemental Indenture to the taking of such action have been satisfied.
(c) The recitals of fact (other than those expressly made by the
Trustee) contained herein and in the Notes shall be taken as statements of
the Corporation and the Trustee shall not be responsible for any recital
herein or in the Notes (except in respect to the certificate of the
Trustee endorsed on the Notes), or for the validity of the execution by
the Corporation of this Indenture or of any supplements thereto or
instruments of further assurance, or for the sufficiency of, or filing of
documents related to, the security for the Notes issued hereunder or
intended to be secured hereby, and the Trustee shall not be bound to
ascertain or inquire as to the observance or performance of any covenants,
conditions or agreements on the part of the Corporation except as set
forth in subsection (j) of this Section. The Trustee makes no
representations as to the value of the Financed Student Loans, the Trust
Estate, the Funds and Accounts or any part thereof, or as to the title of
the Corporation thereto or as to the security or priority afforded thereby
and hereby, or as to the validity or sufficiency of this Indenture or of
the Notes issued hereunder and the Trustee shall not be responsible or
liable for any loss suffered directly or indirectly in connection with any
investment of funds made by it in accordance with this Indenture.
(d) The Trustee shall not be accountable for the use of any Notes
authenticated or delivered hereunder. The commercial bank or trust company
acting as Trustee and its directors, officers, employees or agents may in
good faith buy, sell, own, hold and deal in the Notes and may join in any
action which any Registered Owner may be entitled to take with like effect
as if such commercial bank or trust company were not the Trustee. To the
extent permitted by law, such bank or trust company may also receive
tenders and purchase in good faith Notes from itself, including any
department, affiliate or subsidiary, with like effect as if it were not
the Trustee.
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(e) The Trustee shall be protected in acting upon any notice,
request, consent, certificate, order, affidavit, letter, telegram, opinion
or other paper or document reasonably believed by it to be genuine and
correct and to have been signed or sent by the proper person or persons.
Any action taken by the Trustee pursuant to this Indenture upon the
request or authority or consent of any person who at the time of making
such request or giving such authority or consent is the Registered Owner
of any Note shall be conclusive and binding upon all future Registered
Owners of the same Note and upon Notes issued in exchange there for or in
place thereof.
(f) As to the existence or nonexistence of any fact or as to the
sufficiency or validity of any document, instrument, certificate, paper or
proceeding, the Trustee shall be entitled to rely upon a certificate
believed in good faith to be genuine and correct, signed on behalf of the
Corporation by an Authorized Representative as sufficient evidence of the
facts therein contained, the Trustee may also accept a similar certificate
to the effect that any particular dealing, transaction or action is
necessary or expedient, but may at its discretion secure such further
evidence deemed necessary or advisable, but shall in no case be bound to
secure the same. The Trustee may accept a certificate of an Authorized
Representative of the Corporation to the effect that a resolution in the
form therein set forth has been adopted by the Corporation as conclusive
evidence that such resolution has been duly adopted and is in full force
and effect.
(g) The permissive right of the Trustee to do things enumerated in
this Indenture shall not be construed as a duty and the Trustee shall not
be answerable for other than its negligence or willful default. The
immunities and exceptions from liability of the Trustee shall extend to
its officers, directors, employees and agents.
(h) The Trustee shall not be required to give any Note or surety in
respect to the execution of its rights and obligations hereunder.
(i) All moneys received by the Trustee shall, until used or applied
or invested as herein provided, be held in trust in the manner and for the
purposes for which they were received but need not be segregated from
other funds except to the extent required by this Indenture or by law. The
Trustee shall not be under any liability for interest on any moneys
received hereunder except such as may be agreed upon.
(j) The Trustee shall not be required to take notice or be deemed to
have notice of any Event of Default hereunder except Events of Default of
which the Trustee has, through a trust officer of its corporate trust
department, actual knowledge, and in the absence of such knowledge the
Trustee may conclusively assume there is no Event of Default except as
aforesaid.
(k) Notwithstanding anything contained elsewhere in this Indenture,
the Trustee shall have the right, but shall not be required, to demand, in
respect of the authentication of any Notes, the withdrawal of any cash,
the release of any property, or any action whatsoever within the purview
of this Indenture, any showings, certificates, opinions, appraisals or
other information, or corporate action or evidence thereof, in addition to
that required by the terms hereof as a condition of such action by the
Trustee,
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reasonably and in good faith deemed necessary by the Trustee, for the
purpose of establishing the right of the Corporation to the authentication
of any Notes, the withdrawal of any cash, or the taking of any other
action by the Trustee.
(l) Except for establishing and notifying Registered Owners of
mandatory tenders, mandatory redemptions and acceleration of the Notes and
actions required to effect drawings under a Credit Facility or a Liquidity
Facility and the payment of proceeds thereof to entitled Registered
Owners, before taking any action hereunder, whether permissive or
mandatory, the Trustee may require that security and/or indemnification
satisfactory to it be furnished for the reimbursement of all fees and
expenses to which it may be put and to protect it against all liability,
except liability which is adjudicated to have resulted from its negligence
or willful default by reason of any action so taken.
(m) If the Trustee receives different or conflicting instructions or
directions from more than one group of Registered Owners of Notes of a
given Series or priority of Notes, each of which is provided in accordance
with the Indenture, the Trustee shall act in accordance with the
instructions or directions provided by the group of Registered Owners
representing the larger aggregate principal amount with such Series or
priority of Notes then Outstanding.
(n) Recitals, statements and representations contained in any
document in the nature of an official statement or offering circular,
preliminary or final, relating to any Series of Notes shall not be taken
or construed as made by the Trustee, and the Trustee neither assumes or
shall be under any responsibility for the correctness or truth of the
same. Except for information concerning the Trustee provided in writing by
the Trustee, if any, the Trustee shall have no duty or responsibility to
examine or review and shall have no liability for the contents of any
documents submitted or delivered to any Registered Owner in the nature of
an official statement or offering circular, preliminary or final.
(o) The Trustee shall not be accountable or responsible in any
manner whatsoever for any action of the Corporation, any other Indenture
Agent, any Servicer or Subservicer, any Guarantee Agency, any Remarketing
Agent or for the application of moneys by any Servicer or Subservicer or
moneys on deposit in the Operating Fund until such time as funds are
received by the Trustee. The Servicer shall prepare for filing with the
Secretary any required reports. The Trustee shall have no duty to monitor
or supervise any actions relating to the servicer's obligations under any
Servicing Agreement.
(p) In fulfilling its responsibilities hereunder, under any other
instruments or agreements, or under law the Trustee may act in full
reliance upon the Corporation or any Servicer or Subservicer with respect
to all such determinations made, actions taken and directions to the
Trustee given by them, and the Trustee shall have no duty or
responsibility to the Corporation, any Servicer, any Subservicer, the
Registered Owners of the Notes or any other person or entity for any
action (or inaction) of the Trustee taken in reliance upon any such
determinations, actions or directions. The Corporation shall
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hold the Trustee harmless for any error or omission resulting from the
Trustee's reliance upon the Corporation, any Indenture Agent or any
Servicer or Subservicer unless in connection with such action or omission
the Trustee has unreasonably or negligently failed to perform its
obligations under an agreement with any Servicer or under this Indenture.
(q) Before taking any action hereunder (other than a draw on a
Credit Facility, Liquidity Facility or Debt Service Reserve Policy)
requested by the Registered Owner, or by any Credit Facility Provider or
any Liquidity Facility Provider, the Trustee may require that it be
furnished an indemnity note or other indemnity and security satisfactory
to it, for the reimbursement of all expenses to which it may be put and to
protect it against all liability, except liability which results from the
gross negligence or willful misconduct of the Trustee pursuant to this
Indenture, by reason of any action so taken by the Trustee.
(r) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder, or in the exercise of any
of its rights or powers (other than the Trustee's duty to draw on a Credit
Facility, a Liquidity Facility or a Debt Service Reserve Policy), unless
it shall have indemnity and security satisfactory to it for the
reimbursement of all payments and expenses to which it may be put and to
protect it against all liability.
Section 11.02. Appointment and Acceptance of Duties of Paying Agents Note
Registrar and Other Indenture Agents.
(a) The Corporation may appoint one or more Indenture Agents as the
Corporation deems necessary, provided that each such Indenture Agent shall
at all times be a commercial bank or trust company organized and doing
business under the laws of the United States or of any state with a
combined capital and surplus of at least $25,000,000 and authorized under
such laws to exercise corporate trust powers subject to supervision or
examination by a Federal or state regulatory authority. If such
corporation publishes reports of condition at least annually pursuant to
law or the requirements of such regulatory authority, then for the
purposes of this Section the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition to be published. Such
Indenture Agents shall include one or more Paying Agents and a Registrar
for the Notes and the Corporation may at any time or from time to time
appoint one or more other Paying Agents having the qualifications set
forth above for a successor Paying Agent, along with such other Indenture
Agents as may be required in connection with any Notes in accordance with
the provisions of and by designation in the Supplemental Indenture
authorizing such Notes with the written consent of each Credit Facility
Provider, if any.
(b) Each Paying Agent, Registrar and other Indenture Agent (other
than the Trustee) shall signify its acceptance of the duties and
obligations imposed upon it by this Indenture by a written statement of
acceptance executed and delivered to the Corporation and the Trustee which
shall include the address to which notice may be delivered in accordance
with Section 13.04 hereof.
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(c) The principal or corporate trust officers of the Paying Agents
are hereby designated as the respective agents of the Corporation for the
payment of the Notes.
Section 11.03. Responsibility of Indenture Agents. The recitals of fact
herein and in the Notes contained shall be taken as the statements of the
Corporation and no Indenture Agent assumes any responsibility for the
correctness of the same. No Indenture Agent makes any representations as to the
validity or sufficiency of this Indenture or of any Notes issued hereunder or in
respect of the security afforded by this Indenture, and no Indenture Agent shall
incur any responsibility in respect thereof. The Authenticating Agent shall,
however, be responsible for its representations contained in its certificate on
the Notes. No Indenture Agent shall be under any responsibility or duty with
respect to the issuance of the Notes for value or the application of the
proceeds thereof or the application of any moneys paid to the Corporation. No
Indenture Agent shall be under any responsibility or duty with respect to the
application of any moneys paid to any other Indenture Agent. No Indenture Agent
shall be under any obligation or duty to perform any act which would involve it
in expense or liability or to institute or defend any suit in respect hereof, or
to advance any of its own moneys, unless indemnified to its satisfaction (but no
such indemnification shall be made with proceeds of a drawing on a Credit
Facility or a Liquidity Facility or with remarketing proceeds). No Indenture
Agent shall be liable in connection with the performance of its duties hereunder
except for its own negligence or willful default. Neither the Trustee nor any
Paying Agent shall be under any responsibility or duty with respect to the
application of any moneys paid to any one of the others.
Section 11.04. Evidence on Which Indenture Agents May Act. Each Indenture
Agent shall be protected in acting upon any notice, indenture, request, consent,
order, certificate, report, Opinion of Counsel, Note or other paper or document
believed by it to be genuine, and to have been signed or presented by the proper
party or parties. Each Indenture Agent may consult with counsel, who may be
counsel to the Corporation, and the Opinion of Counsel of such counsel shall be
full and complete authorization and protection in respect of any action taken or
suffered by it hereunder in good faith and in accordance therewith. Whenever any
Indenture Agent shall deem it necessary or desirable that a matter be proved or
established prior to taking or suffering any action hereunder, including payment
of moneys out of any Fund or Account, such matter (unless other evidence in
respect thereof be herein specifically prescribed) may be deemed to be
conclusively proved and established by a certificate signed by a Authorized
Representative or by another Indenture Agent if so specified herein or in the
applicable Supplemental Indenture, and such certificate shall be full warrant
for any action taken or suffered in good faith under the provisions of this
Indenture upon the faith thereof, but in its sole discretion the Indenture Agent
may in lieu thereof accept other evidence of such fact or matter or may require
such further or additional evidence as to it may seem reasonable. Neither the
Trustee nor any successor Trustee or other Indenture Agent shall be liable to
the Corporation, the Registered Owners of any of the Notes, any Credit Facility
Provider, any Liquidity Facility Provider, or any other person for any act or
omission done or omitted to be done by such Indenture Agent in reliance upon any
instruction, direction or certification received by the Trustee pursuant to this
Indenture or for any act or omission done or omitted in good faith and without
negligence or willful default. Except as otherwise expressly provided herein,
any request, order, notice or other direction required or permitted to be
furnished pursuant to any provision hereof by the Corporation to any Indenture
Agent shall be sufficiently executed if executed in the name of the Corporation
by an Authorized Representative.
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Section 11.05. Compensation and Indemnification. Except as may be
otherwise provided in a Supplemental Indenture, the Corporation shall pay to
each Indenture Agent from time to time reasonable compensation for all services
rendered under this Indenture, and also all reasonable expenses, charges,
counsel fees and other disbursements, including those of their attorneys, agents
and employees, incurred in and about the performance of their powers and duties
under this Indenture. The Corporation further agrees to indemnify and save each
Indenture Agent harmless against any liabilities which it may incur in the
exercise and performance of its powers and duties hereunder, and which are not
due to its negligence or willful default, to the extent solely payable from the
Trust Estate, but not from the proceeds of a drawing on a Credit Facility or a
Liquidity Facility or from remarketing proceeds.
Section 11.06. Permitted Acts and Functions. Any Indenture Agent may
become the Registered Owner of any Notes, with the same rights it would have if
it were not an Indenture Agent. Any Indenture Agent may permit any of its
officers or directors to act as a member of, or in any other capacity with
respect to, any committee formed to protect the rights of Registered Owners or
to effect or aid in any reorganization growing out of the enforcement of the
Notes or this Indenture, whether or not any such committee shall represent the
Registered Owners of a majority in principal amount of the Notes then
Outstanding. Any Indenture Agent may be a participant in the Student Loan
Program and may sell Student Loans to the Corporation. Any Indenture Agent may
be an underwriter in connection with the sale of the Notes or of any other
securities offered or issued by the Corporation.
Section 11.07. Trustee Covenants with Respect to Eligible Lender Status.
The Trustee covenants as follows:
(a) if requested by the Corporation, the Trustee will fulfill the
requirements to become an Eligible Lender and will remain an Eligible
Lender so long as the Trustee remains Trustee under this Indenture;
provided, however, that the Trustee shall have no responsibility or
liability hereunder if it fails to remain as an Eligible Lender as a
result of the actions or inactions of the Corporation or any Servicer; and
(b) if requested by the Corporation to become an Eligible Lender,
the Trustee shall take such actions, but only such actions, with respect
to being an Eligible Lender as shall be reasonably requested by the
Corporation; such actions do not include taking steps or instituting
suits, actions or proceedings necessary or appropriate for the enforcement
of all terms covenants and conditions of all Student Loans and agreements
in connection therewith, including the prompt payment of all principal and
interest payments and all other amounts due thereunder, for which the
Corporation is solely responsible.
Section 11.08. Trustee's Status as an Eligible Lender. If the Trustee is
requested by the Corporation to act as an Eligible Lender under this Indenture,
for the purposes of this Indenture and all documents, agreements, understandings
and arrangements relating to this Indenture that are executed by the Trustee,
such documents have been executed by the Trustee with the understanding that it
may be deemed to be an Eligible Lender under the Higher Education Act. The
Corporation hereby agrees that it will indemnify and hold harmless the Trustee
and its officers, directors, employees and agents for any and all liability
which may be incurred because of Trustee's status as an Eligible Lender or
because of the Trustee's entering
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into this Indenture or any of the other transaction documents that results from
the actions or inactions of the Corporation or any Servicer. The Corporation
agrees that it will not seek recourse or commence any action against the Trustee
or its officers, directors, employees or agents or any of their personal assets
for the performance or payment of any obligation under the Act. The Trustee
shall have no liability or responsibility with respect to any of the duties and
obligations specifically undertaken by the Corporation pursuant to Section 7.11
hereof.
Section 11.09. Resignation of Trustee. The Trustee may at any time resign
and be discharged of the duties and obligations created by this Indenture by
giving not less than 60 days' written notice to the Corporation, each Indenture
Agent, each Credit Facility Provider, each Liquidity Facility and each Surety
Provider, and mailing notice thereof specifying the date when such resignation
shall take effect, to the Registered Owners, and such resignation shall take
effect upon the day specified in such notice unless a successor shall have been
appointed as provided in Section 11.11 hereof, in which event such resignation
shall take effect immediately on the appointment of such successor.
Notwithstanding the foregoing, no resignation of the Trustee hereunder shall
become effective until a successor Trustee has been appointed with the written
consent of each Credit Facility Provider, if any, and accepted its appointment
and each Credit Facility, each Liquidity Facility and each Debt Service Reserve
Policy has been properly transferred to the successor Trustee in accordance with
their respective terms.
Section 11.10. Removal of Trustee. The Trustee shall be removed by the
Corporation if at any time so requested by an instrument or concurrent
instruments in writing, filed with the Trustee and the Corporation and signed by
each Credit Facility Provider, if any, or by the Registered Owners of a majority
in principal amount of the Notes then Outstanding or their attorney-in-fact duly
authorized, excluding any Notes held by or for the account of the Corporation,
with the written consent of each Credit Facility Provider, if any, shall have
been obtained. The Corporation may remove the Trustee at any time, except during
the existence of an Event of Default, for such cause as shall be determined in
the sole discretion of the Corporation by filing with the Trustee an instrument
signed by an Authorized Representative. The Corporation shall remove the Trustee
if directed to do so in writing by each Credit Facility Provider for cause by
filing with the Trustee an instrument signed by an Authorized Representative and
such Credit Facility Provider. Notwithstanding the foregoing, no removal of the
Trustee hereunder shall become effective until a successor has been appointed
and has accepted such appointment and until each Credit Facility, each Liquidity
Facility and each Debt Service Reserve Policy then in effect has been properly
transferred to a successor Trustee in accordance with their respective terms.
Section 11.11. Appointment of Successor Trustee.
(a) If at any time the Trustee shall resign or shall be removed or
shall become incapable of acting, or shall be adjudged bankrupt or
insolvent, or if a receiver, liquidator or conservator of the Trustee, or
of its property, shall be appointed, or if any public officer shall take
charge or control of the Trustee, or of its property or affairs, the
Corporation covenants and agrees that it will promptly thereupon appoint a
successor Trustee. The Corporation shall mail notice of any such
appointment made by it within 20 days after such appointment to all
Registered Owners of Notes.
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(b) If no appointment of a successor Trustee shall have been made
pursuant to the provisions of subsection (a) above within 45 days after
the Trustee shall have given to the Corporation written notice, as
provided in Section 11.09 hereof, or after a vacancy in the office of the
Trustee shall have occurred by reason of its inability to act, the Trustee
or the Registered Owner of any Note may apply to any court of competent
jurisdiction to appoint a successor Trustee. Said court may thereupon,
after such notice, if any, as such court may deem proper and prescribe,
appoint a successor Trustee.
Every successor Trustee appointed pursuant to this Section shall be a
commercial bank or trust company in good standing, duly authorized to exercise
trust powers and subject to examination by federal or state authority, having a
reported capital and surplus of not less than $25,000,000, shall otherwise meet
the requirements of Section 11.02(a) hereof, shall be acceptable to each Credit
Facility Provider and, if requested by the Corporation, shall be an Eligible
Lender as required by Section 11.07 hereof.
Section 11.12. Transfer of Rights and Properly to Successor Trustee. Any
successor Trustee appointed under this Indenture shall execute, acknowledge and
deliver to its predecessor Trustee, and also to the Corporation, an instrument
accepting such appointment, and thereupon such successor Trustee, without any
further act, deed or conveyance, shall become fully vested with all moneys,
estates, properties, rights, powers, duties and obligations of such predecessor
Trustee, with like effect as if originally named as Trustee, but the Trustee
ceasing to act shall nevertheless, on the request of the Corporation, or of its
successor Trustee, upon payment in full of all fees, costs and expenses,
execute, acknowledge and deliver such instruments of conveyance and further
assurance and do such other things as may reasonably be required for more fully
and certainly vesting and confirming in such successor Trustee all the right,
title and interest of the predecessor Trustee in and to any property held by it
under this Indenture, and shall pay over, assign and deliver to the successor
Trustee any money or other property subject to the trusts and conditions herein
set forth. Should any deed, conveyance or instrument in writing from the
Corporation be required by such successor Trustee for more fully and certainly
vesting in and confirming to such successor Trustee any such estates, rights,
powers and duties, any and all such deeds, conveyances and instruments in
writing shall, on request, and so far as may be authorized by law, be executed,
acknowledged and delivered by the Corporation. Any such successor Trustee shall
promptly notify each Indenture Agent, each Credit Facility Provider, each
Liquidity Facility and each Surety Provider of its appointment as Trustee. Upon
the effectiveness of the resignation or removal of the Trustee, such Trustee's
authority to act pursuant to this Indenture shall terminate and such Trustee
shall have no further responsibility or liability whatsoever for performance of
this Indenture as Trustee.
Section 11.13. Merger or Consolidation. Any company into which any
Indenture Agent may be merged or converted or with which it may be consolidated
or any company resulting from any merger, conversion or consolidation to which
it shall be a party or any company to which any Indenture Agent may sell or
transfer all or substantially all of its corporate trust business, provided such
company shall be a trust company or bank which is qualified to be a successor to
such Indenture Agent under Section 11.11 or 11.15 hereof and shall be authorized
by law to perform all the duties imposed upon it by this Indenture, shall be the
successor to such Indenture Agent without the execution or filing of any paper
or the performance of any further act, anything herein to the contrary
notwithstanding.
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Section 11.14. Adoption of Authentication. In case any of the Notes
contemplated to be issued under this Indenture shall have been authenticated but
not delivered, any successor Authenticating Agent may adopt the certificate of
authentication of any predecessor Authenticating Agent so authenticating such
Notes and deliver such Notes so authenticated, and in case any of the said Notes
shall not have been authenticated, any successor Authenticating Agent may
authenticate such Notes in the name of the successor Authenticating Agent, and
in all such cases such certificate shall have the full force provided anywhere
in said Notes or in this Indenture.
Section 11.15. Resignation or Removal of the Tender Agent, Paying Agents,
Registrar and Other Indenture Agents and Appointment of Successors.
(a) The Tender Agent, any Paying Agent, the Registrar and any other
Indenture Agent (other than the Trustee) may at any time resign and be
discharged of the duties and obligations created by this Indenture by
giving at least 60 days' written notice to the Corporation, the Trustee,
each Auction Agent, each Broker-Dealer, each Credit Facility Provider,
each Liquidity Facility Provider, each Surety Provider, each Remarketing
Agent, the Registered Owners and any other Person required to get notice
pursuant to a Supplemental Indenture. The Tender Agent, any Paying Agent,
the Registrar and any other Indenture Agent (other than the Trustee) may
be removed at any time by an instrument signed by an Authorized
Representative and filed with the Tender Agent, any Paying Agent,
Registrar or such other Indenture Agent, each Credit Facility Provider and
with the Trustee. Any successor Tender Agent, Paying Agent, Registrar or
other Indenture Agent (other than the Trustee) shall be appointed by the
Corporation with the written consent of each Credit Facility Provider, if
any, and shall be a trust company or commercial bank having trust powers,
having a reported capital and surplus aggregating at least $25,000,000,
shall otherwise meet the requirements of Section 11.02(a) hereof and be
willing and able to accept the office of Tender Agent, Paying Agent,
Registrar or Indenture Agent (other than the Trustee), as the case may be,
on reasonable and customary terms and shall be authorized by law to
perform all the duties imposed upon it by this Indenture. Notwithstanding
any other provision of this Indenture, no resignation or removal of the
Tender Agent, any Paying Agent, Registrar or Indenture Agent shall take
effect until a successor shall be appointed and has accepted such
appointment.
(b) In the event of the resignation or removal of the Tender Agent,
any Paying Agent, Registrar or other Indenture Agent (other than the
Trustee), the Tender Agent, such Paying Agent, Registrar or other
Indenture Agent (other than the Trustee) shall, after payment of its fees,
costs and expenses, pay over, assign and deliver any moneys held by it to
its successor.
Section 11.16. Evidence of Signatures of Registered Owners and Ownership
of Notes.
(a) Any request, consent or other instrument which this Indenture
may require (or permit) to be executed by Registered Owners may be
executed by such Registered Owners or by their attorneys pursuant to
powers of attorney or instruments of similar
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tenor and shall be signed or executed by such Registered Owners in person
or by their attorneys appointed in writing. Proof of (i) the execution of
any such instrument, or of an instrument appointing any such attorney, or
(ii) the holding by any person of the Notes shall be sufficient for any
purpose of this Indenture (except as otherwise herein expressly provided)
if made in the following manner, but the Trustee may nevertheless in its
sole discretion require further or other proof in cases where it deems the
same desirable.
The fact and date of the execution by any Registered Owner or his
attorney of such instrument may be proved by the Certificate, which need
not be acknowledged or verified, of an officer of a bank or trust company,
financial institution or other member of the National Association of
Securities Dealers, Inc. or of any notary public or other officer
authorized to take acknowledgments of deeds to be recorded in the state in
which he purports to act, that the person signing such request or other
instrument acknowledged to him the execution thereof, or by an affidavit
of a witness of such execution, duly sworn to before such notary public or
other officer. The authority of the person or persons executing any such
instrument on behalf of a corporate Registered Owner may be established
without further proof if such instrument is signed by a person purporting
to be the president or vice president of such corporation with a corporate
seal affixed and attested by a person purporting to be its secretary or an
assistant secretary.
(b) The ownership of Notes and the amount, numbers and other
identification, and date of holding the same shall be proved by the
registry books.
(c) Any request, consent or vote of the Registered Owner of any Note
shall bind all future Registered Owners of such Note in respect of
anything done or suffered to be done by the Corporation or any Indenture
Agent in accordance therewith.
Section 11.17. Preservation and Inspection of Documents. All Indenture
Agents under the provisions of this Indenture or any Supplemental Indenture
shall maintain adequate records relating to the performance of their duties
consistent with industry practices, which records shall be subject at all
reasonable times to the inspection of the Corporation, any other Indenture
Agent, any Credit Facility Provider and any Registered Owner and their agents
and their representatives, any of whom may make copies thereof.
Section 11.18. Statement of Trustee of Funds and Accounts and Other
Matters. Not more than 30 days after the close of each Fiscal Year the Trustee
shall furnish the Corporation and each Credit Facility Provider a statement
setting forth (to the extent applicable) in respect to such Fiscal Year, (a) all
transactions relating to the receipt, disbursement and application of all money
received by the Trustee pursuant to all terms of this Indenture, (b) the
balances held by the Trustee at the end of such Fiscal Year to the credit of
each Fund, (c) a brief description of all moneys and Investment Securities held
by the Trustee as part of the balance of each Fund as of the end of such Fiscal
Year, and (d) any other information which the Corporation may reasonably
request.
The Corporation, not more than 30 days after the close of each Fiscal Year
and 25 days after the close of each calendar month, shall furnish to each Credit
Facility Provider, ▇▇▇▇▇'▇ and the Trustee a statement setting forth in respect
to such Fiscal Year or month, a brief
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description (including aggregate principal balance plus accrued interest) of all
Financed Student Loans in the form attached as Exhibit C hereto.
ARTICLE XII
TERMINATION
Section 12.01. Termination of the Trust.
(a) The trust created by this Indenture (the "Trust") shall
terminate upon the earlier of (i) the later of (A) payment to the
Registered Owners and to the Trustee of all amounts required to be paid to
them pursuant to this Indenture and any Supplemental Indenture and the
disposition of all property held as part of the Trust Estate or (B) the
day following the date on which all reimbursement obligations to each
Credit Facility Provider, each Liquidity Facility Provider, each Surety
Provider and each provider of an Interest Rate Exchange Agreement, if any,
and any other Person as may be provided for in any Supplemental Indenture
have been paid in full, (ii) the expiration of 21 years from the death of
the last survivor of the descendants of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (the late
ambassador of the United States to the Court of St. ▇▇▇▇▇) living on the
date of this Indenture or (iii) subject to Section 12.01(d) hereof, upon
the occurrence of a Liquidation Event (as defined in Section 12.01(c)
hereof). The Corporation shall promptly notify the Trustee of any
prospective termination pursuant to this Section.
(b) Notice of any prospective termination, specifying the Interest
Payment Date for payment of the final distribution and requesting the
surrender of the Notes for cancellation, shall be given promptly by the
Trustee by letter to Registered Owners mailed not less than 10 nor more
than 15 days preceding the specified Interest Payment Date stating (i) the
Interest Payment Date upon which final payment of the Notes shall be made,
(ii) the amount of any such final payment and (iii) the location for
presentation and surrender of the Notes. Payment of the final distribution
which shall be made only upon presentation and surrender of the Notes at
the corporate trust office of the Trustee specified in the notice.
(c) A "Liquidation Event" shall be deemed to have occurred, subject
to Section 12.01(d) hereof, upon Dissolution of the Corporation.
(d) The Corporation shall not voluntarily take any action that would
cause it to be deemed dissolved within the meaning of this Article.
In the event of the Dissolution of the Corporation or any action
that would cause the Corporation to cease being deemed a general partner
of the Trust if the Trust were deemed a limited partnership formed under
the Delaware Revised Uniform Limited Partnership Act, and the
Corporation's interest were deemed to represent the sole general
partnership interest in such a partnership, the Trust shall terminate 90
days after the date of such event and its assets liquidated in accordance
with Section 12.01(e) hereof unless both of the following occur:
84
(i) the Registered Owners representing a majority of the
aggregate principal of the Notes Outstanding, inform the Trustee in
writing before the end of such 90 day period that they disapprove of
the liquidation of the assets of the Trust; and
(ii) the Corporation, the Trustee, each Credit Facility
Provider and each Liquidity Facility Provider shall receive an
Opinion of Counsel to the effect that the continuation of the Trust
shall not cause the Trust to be treated as an association taxable as
a corporation for federal income tax purposes.
(e) Upon receipt by the Trustee from the Corporation of notice of
the occurrence of a Liquidation Event (as defined in Section 12.01(c)
hereof), the Trustee shall, subject to the direction of the Registered
Owners representing a majority of the aggregate principal of the Notes
Outstanding (provided that, if Registered Owners representing a majority
of the aggregate principal of the Notes Outstanding shall not have
provided such direction to the Trustee within 30 days of the Trustee
having sent a written request for such direction to the Registered Owners,
the Trustee shall proceed without such direction) sell the remaining
assets of the Trust Estate, if any, at public or private sale, in a
commercially reasonable manner and on commercially reasonable terms. The
Corporation agrees to cooperate with the Trustee to effect any such sale,
including by executing such instruments of conveyance or assignment as
shall be necessary or required by the purchaser. Proceeds of sale, net of
expenses, shall be treated as collections on the assets of the Trust and
shall be deposited into the Revenue Fund. On the next Interest Payment
Date the Trustee shall cause to be paid to Registered Owners and the
Corporation amounts distributable on such Interest Payment Date pursuant
to Article V hereof. Following the termination of the Trust, all right,
title and interest in and to the Financed Student Loans and other property
and funds in the Trust Estate (other than funds on deposit in certain
accounts for the payment of expenses) shall be conveyed and transferred to
the Corporation.
Section 12.02. Notice. The Trustee shall give notice of termination of the
Trust to the Corporation and each Rating Agency.
ARTICLE XIII
DEFEASANCE; MISCELLANEOUS PROVISIONS
Section 13.01. Defeasance.
(a) If the Corporation shall pay or cause to be paid to the
Registered Owners of the Notes, the principal or Redemption Price and
interest to become due thereon at the times and in the manner stipulated
in the Notes and in this Indenture, and pay or cause to be paid (i) to
each Indenture Agent its fees, costs and expenses, (ii) to each Credit
Facility Provider and each Liquidity Facility Provider all amounts owing
under each Credit Facility, each Liquidity Facility and each Reimbursement
Agreement relating thereto, (iii) to each Surety Provider all amounts
owing under the agreement relating its Debt Service Reserve Policy, (iv)
to each Remarketing Agent all amounts owing under each
85
remarketing agreement and (v) to each party to any Interest Rate Exchange
Agreement all amounts owing to it, then the pledge of the Trust Estate,
including any Revenues, Recoveries of Principal and other moneys,
securities, funds and property hereby pledged and all other rights granted
hereby shall be discharged and satisfied. In such event, the Trustee
shall, upon the request of the Corporation, execute and deliver to the
Corporation all such instruments as may be desirable to evidence such
discharge and satisfaction and the Indenture Agents shall pay over or
deliver to the Corporation all moneys or securities held by them pursuant
to this Indenture which are not required for the payment of Notes not
theretofore surrendered for such payment.
(b) Except as otherwise provided in any Supplemental Indenture, all
Notes shall, prior to the maturity or Redemption Date thereof, be deemed
to have been paid and no longer Outstanding if (i) in case any of said
Notes are to be redeemed on any date prior to their maturity, the
Corporation shall have given to the Trustee in form satisfactory to it
irrevocable instructions to mail as provided in Article VI hereof notice
of redemption on said date, (ii) there shall have been deposited with the
Trustee either moneys (which shall be Eligible Funds to the extent any
Liquidity Facility or Credit Facility other than a bond insurance policy
is in effect for such Notes) in an amount which shall be sufficient, or
noncallable and nonprepayable Governmental Obligations (including any
Governmental Obligations issued or held in book entry form on the books of
the Department of the Treasury of the United States of America) (which
Governmental Obligations shall have been purchased with Eligible Funds to
the extent any Liquidity Facility or Credit Facility other than a bond
insurance policy is in effect for such Notes) the principal of and the
interest on which when due, without reinvestment, will provide moneys
which together with the moneys, if any, deposited with the Trustee at the
same time, shall be sufficient to pay when due the principal of and
interest to become due on such Notes on and prior to the Redemption Date
or maturity date thereof, as the case may be, verified as to sufficiency
by a report of an Accountant, and (iii) in the event said Notes are not by
their terms subject to redemption within the next succeeding 60 days, the
Corporation shall have given the Trustee in form satisfactory to it
irrevocable instructions to mail, as soon as practicable, a notice to the
Registered Owners of such Notes that the deposit required by clause (ii)
above has been made with the Trustee and that said Notes are deemed to
have been paid in accordance with this Section and stating such maturity
or Redemption Date upon which moneys are to be available for the payment
of the principal or Redemption Price, if any, on said Notes. In the event
the Notes are Adjustable Rate Notes, for periods in which the interest
rate has not been determined, a rate equal to the maximum rate such Notes
may bear shall be assumed. Neither Governmental Obligations or moneys
deposited with the Trustee pursuant to this Section nor principal or
interest payments on any such Governmental Obligations shall be withdrawn
or used for any purpose other than, and shall be held in trust for, the
payment of the principal of or Redemption Price, if any, and interest on
said Notes; but any cash received from such principal or interest payments
on such Governmental Obligations deposited with the Trustee, if not then
needed for such purpose, shall, to the extent practicable, be reinvested
in Governmental Obligations maturing at times and in amounts sufficient to
pay when due the principal or Redemption Price, if any, and interest to
become due on said Notes on and prior to such maturity date thereof, as
the case may be, and interest earned from such reinvestments shall, as
contemplated by a report of an
86
Accountant verifying continued sufficiency, be paid over to the
Corporation, as received by the Trustee, free and clear of any trust, lien
or pledge; provided, however, that such reinvestment may be effected only
upon receipt by the Trustee of an approving Opinion of Counsel. The
Trustee shall deposit the moneys to be set aside for payment of the
Redemption Price of the Notes hereunder in a separate redemption account
or pursuant to a separate escrow agreement, if the Corporation so
designates, and shall use the money for the purpose of reimbursing each
Credit Facility Provider for a drawing on its Credit Facility.
The Trustee shall not terminate the Credit Facility or release the
money in the redemption account until the Notes have been redeemed in full
with either a drawing on the Credit Facility or the moneys in the
redemption account.
(c) The deposit required by paragraph (b) above may be made with
respect to any Series of Notes, or a portion thereof, within any
particular maturity, in which case such maturity of Notes shall no longer
be deemed to be Outstanding under the terms of this Indenture, and the
Registered Owners of such defeased Notes shall be secured only by such
trust funds and not by any other part of the Trust Estate, and this
Indenture shall remain in full force and effect to protect the interests
of the Registered Owners of Notes remaining Outstanding thereafter.
Notwithstanding the foregoing and paragraph (b) above and the definition
of "Registered Owner," the provisions of this Indenture relating to
optional purchases with respect to Adjustable Rate Notes and to payment,
registration, transfer and redemption of Notes shall remain in effect
until final maturity or the Redemption Date of the Notes.
(d) In addition to the foregoing provisions of this Section, Notes
or interest installments for the payment of which moneys shall have been
set aside and shall be held in trust by the Indenture Agents (through
deposit by the Corporation of funds for such payment or otherwise) shall,
upon maturity or upon the Redemption Date established therefor, be deemed
to have been paid and no longer Outstanding. Should any of the Notes not
be presented for payment when due, the Trustee shall retain from any
moneys transferred to it for the purpose of paying said Notes so due, for
the benefit of the Registered Owners thereof, a sum of money sufficient to
pay such Notes when the same are presented by the Registered Owners
thereof for payment (upon which sum the Trustee shall not be required to
pay interest). All liability of the Corporation to the Registered Owners
of such Notes and all rights of such Registered Owners against the
Corporation under the Notes or under the Indenture shall thereupon be and
become limited to amounts on deposit with the Trustee and set aside for
such payment, and the sole right of such Registered Owners shall
thereafter be against such deposit. The Trustee shall bear no duty or
liability to the Registered Owners of such nonpresented Notes other than
to disburse funds from such deposit upon presentation of the appropriate
Note. If any Note shall not be presented for payment within the period of
six years following its maturity, the Trustee shall, to the extent
permitted by law, turn over the money theretofore held by it for payment
of such Note to the Corporation, provided, however, that such amounts
shall not be so transferred until at least one year after the final
maturity date of the Notes of the related Series.
87
(e) From and after the date of payment in full of all Notes
Outstanding, the Corporation shall have the right to receive payments with
respect to all Financed Student Loans.
Section 13.02. Delegation of Duties by the Corporation. When any action is
required to be taken by the Corporation under this Indenture, the Corporation
may (a) delegate such duty to a committee of the Corporation or (b) contract for
another to perform such duty, provided in either instance that actions of those
to whom the duty is delegated or contracted are reviewed at least annually by
the Corporation. When any duty is placed upon the Servicer by contract, such
contract may permit the Servicer to delegate such duty to another, by contract,
and a copy of any such contract shall be filed with the Trustee.
Section 13.03. Appointment of Agents, etc. The Corporation shall appoint
all employees and attorneys which it may consider necessary. The individual
members of the Corporation shall not be personally liable, neither singly nor
collectively, for any act or omission of any agent or employee.
Section 13.04. Notices. Any notice, demand, direction, request or other
instrument authorized or required by this Indenture or by any Supplemental
Indenture to be given to or filed with the Corporation, the Trustee or any other
Indenture Agent shall be deemed to have been sufficiently given or filed for all
purposes if and when delivered or sent by facsimile transmission, promptly
confirmed by first class mail, postage prepaid:
If to the Corporation: CFLD-I, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
UICI
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Trustee: Zions First National Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Corporate Trust Department
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
88
To any other Indenture Agent: to such facsimile number and address as such
Indenture Agent shall indicate in the acceptance of office filed by each such
Indenture Agent pursuant to Section 11.02(b) hereof.
To any Credit Facility Provider or Liquidity Facility Provider: to the
address specified in the related Supplemental Indenture.
The Corporation, the Trustee, any other Indenture Agent, any Credit
Facility Provider and Liquidity Facility Provider may, by like written notice to
each other such person, designate any further or different facsimile numbers and
addresses to which subsequent notices shall be sent.
Section 13.05. Governing Law. This Indenture shall be construed pursuant
to the laws of the State.
Section 13.06. Notices to Rating Agencies. The Corporation shall provide
written notice to each Rating Agency (and each Credit Facility Provider) then
rating some or all Notes of any Series Outstanding hereunder, to the address
specified by such Rating Agency (and each Credit Facility Provider) for such
purposes, upon the occurrence of any of the following:
(a) substitution or replacement of any Indenture Agent;
(b) any amendment to this Indenture and any Supplemental Indenture
pursuant to which Notes are then outstanding or any amendment to any
Credit Facility or Liquidity Facility pursuant to a Supplemental
Indenture; and
(c) mandatory tender, redemption, or defeasance of all Outstanding
Notes of any Series.
Section 13.07. Nonliability of Officers. It is hereby expressly made a
condition of this Indenture that any agreements, covenants or representations
herein contained or contained in the Notes do not and shall never constitute or
give rise to a personal or pecuniary liability or charge against the officers,
employees, agents or members of the Corporation, or the general credit of the
Corporation, and in the event of a breach of any such agreement, covenant or
representation, no personal or pecuniary liability or charge payable directly or
indirectly from the general revenues of the Corporation shall arise therefrom.
Nothing contained in this Section, however, shall relieve the Corporation from
the observance and performance of the several covenants and agreements on its
part herein contained.
Section 13.08. Parties Interested Herein. Each Credit Facility Provider
and each Liquidity Facility Provider shall be deemed to be a third party
beneficiary and party in interest to this Indenture.
Section 13.09. Counterparts. This Indenture maybe executed in several
counterparts, each of which shall be an original and all of which shall
constitute but one and the same instrument.
89
IN WITNESS WHEREOF, the undersigned President and Secretary of the CFLD-I,
Inc. and the undersigned officer of the Trustee has hereunto executed this
General Indenture as of the date first written above.
CFLD-I, INC.
By:_____________________________________
▇▇▇▇▇ ▇. ▇▇▇▇, President
Attest:
By:_________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Secretary
ZIONS FIRST NATIONAL BANK as Trustee
By:_____________________________________
▇▇▇▇▇ ▇. ▇▇▇▇
Vice President
90
================================================================================
FIRST SUPPLEMENTAL INDENTURE
By and Between
CFLD-I, INC.
and
ZIONS FIRST NATIONAL BANK,
as Trustee
Relating To
$100,000,000
CFLD-I, Inc.
Student Loan Asset Backed Notes
Senior Series 2001A-1 and Senior Series 2001A-2
(Auction Rate Certificates)
Dated as of April 1, 2001
================================================================================
TABLE OF CONTENTS
Page
ARTICLE I
SHORT TITLE, DEFINITIONS AND AUTHORITY
Section 1.01. Short Title.................................................... 3
Section 1.02. Definitions.................................................... 3
Section 1.03. Authority...................................................... 5
Section 1.04. Definition of Investment Securities............................ 5
ARTICLE II
AUTHORIZATION, TERMS AND ISSUANCE OF SERIES 2001A NOTES
Section 2.01. Principal Amount, Designation and Series....................... 8
Section 2.02. Purposes of Issuance........................................... 9
Section 2.03. Dates, Maturities and Interest Rates........................... 9
Section 2.04. Form, Denomination, Numbers and Letters........................ 9
Section 2.05. Book-Entry System; Limited Obligation of Corporation........... 9
Section 2.06. Appointment of Paying Agent and Registrar...................... 11
Section 2.07. Appointment of Authenticating Agent............................ 11
Section 2.08. Redemption..................................................... 12
Section 2.09. Transfer of Notes.............................................. 13
Section 2.10. Execution of Reimbursement Agreement and Custodian
Agreements..................................................... 14
ARTICLE III
DEPOSITS INTO FUNDS AND ACCOUNTS; DISPOSITION OF PROCEEDS OF THE SALE
OF THE SERIES 2001A NOTES; AND USE AND DISBURSEMENTS OF FUNDS
Section 3.01. Deposits into Funds and Accounts on the Issue Date............. 14
Section 3.02. Payment of Expenses and Costs of Issuance...................... 14
Section 3.03. Increase in Program Expenses and Maintenance and Operating
Expenses....................................................... 15
Section 3.04. Debt Service Reserve Fund...................................... 15
Section 3.05. Recoveries of Principal, Recycling............................. 16
Section 3.06. Limitation on Sale of Financed Student Loans................... 16
Section 3.07. Cash Flow Statements........................................... 17
Section 3.08. Perfection of Financed Student Loans and Defaulted Student
Loans.......................................................... 17
Section 3.09. Servicing of Financed Student Loans............................ 17
Section 3.10. Repurchase Obligation Under Student Loan Purchase
Agreements..................................................... 18
Section 3.11. Acquisition of Future Private Loans............................ 18
ARTICLE IV
CREDIT FACILITY PROVIDER
Section 4.01. Rights of Credit Facility Provider Controlling................. 18
Section 4.02. Payments Under the Credit Facilities for the Series 2001
Notes.......................................................... 18
Section 4.03. Notices, Consents, Miscellaneous............................... 20
Section 4.04. Consents, etc. by Credit Facility Provider Limited............. 22
Section 4.05. Rating Notifications Upon a Credit Confirmation................ 22
ARTICLE V
MISCELLANEOUS
Section 5.01. First Supplemental Indenture Construed with General
Indenture...................................................... 22
Section 5.02. General Indenture as Supplemented to Remain in Effect.......... 22
Section 5.03. Severability................................................... 23
Section 5.04. Confirmation of Actions........................................ 23
Section 5.05. Governing Law.................................................. 23
Section 5.06. Notices........................................................ 23
Section 5.07. Rights of Credit Facility Provider............................. 25
Section 5.08. Execution in Counterparts...................................... 25
EXHIBIT A PROVISIONS RELATING TO SERIES 2001A NOTES OUTSTANDING AS
AUCTION RATE CERTIFICATES
EXHIBIT B FORM OF FINANCIAL GUARANTY INSURANCE POLICY
EXHIBIT C FORM OF NOTICE OF CHANGE IN LENGTH OF ONE OR MORE
AUCTION PERIODS
EXHIBIT D FORM OF NOTICE ESTABLISHING CHANGE IN LENGTH
EXHIBIT E FORM OF NOTICE OF CHANGE IN AUCTION DATE
EXHIBIT F FORM OF SERIES 2001A NOTES
EXHIBIT G DTC LETTER OF REPRESENTATIONS
EXHIBIT H FORM OF INVESTMENT LETTER
EXHIBIT I FORM OF DEBT SERVICE RESERVE SURETY BOND
ii
THIS FIRST SUPPLEMENTAL INDENTURE, dated as of April 1, 2001 (this "First
Supplemental Indenture"), is entered into by and between CFLD-I, INC. (the
"Corporation"), a corporation established under the laws of the State of
Delaware, and ZIONS FIRST NATIONAL BANK, a national banking association
authorized to accept trusts of the nature established herein (the "Trustee"),
and amends and supplements the General Indenture, dated as of April 1, 2001 (the
"General Indenture"), between the Corporation and the Trustee.
WHEREAS, The MEGA Life and Health Insurance Company, an Oklahoma
corporation ("MEGA"), and Mid-West National Life Insurance Company of Tennessee,
a Tennessee corporation ("Mid-West"), offer whole life insurance policies with
student loan benefits (the "Life Insurance Policies"); and
WHEREAS, pursuant to the College First Alternative Loan Program (the
"Student Loan Program"), a policyholder under a Life Insurance Policy may obtain
a loan (a "College First Student Loan") to fund the policyholder's children's
educational expenses at an educational institution approved under the Student
Loan Program; and
WHEREAS, the College First Student Loans are presently originated by
Richland State Bank, a South Dakota banking institution ("Richland"), pursuant
to the terms and provision of a Loan Underwriting and Processing Agreement,
dated as of June 12, 2000 (the "Loan Underwriting Agreement"), among Richland,
MEGA and Mid-West; and
WHEREAS, UICI Funding Corp. 2, a Delaware corporation ("UICI Funding"),
has agreed to purchase all of the College First Student Loans originated by
Richland pursuant to the terms and provisions of a Loan Origination and Purchase
Agreement, dated as of June 12, 2000 (the "Loan Origination and Purchase
Agreement"), between Richland and UICI Funding; and
WHEREAS, the Corporation and UICI Funding have entered into a Student Loan
Purchase Agreement, dated April 27, 2001 (the "College First Student Loan
Purchase Agreement"), permitting the Corporation to purchase certain College
First Student Loans owned by UICI Funding; and
WHEREAS, MEGA, Mid-West, UICI Funding and the Corporation are wholly-owned
subsidiaries of UICI, a Delaware corporation ("UICI"); and
WHEREAS, certain College First Student Loans are secured, in part, by an
allocable portion of the cash surrender value of the policyholder's Life
Insurance Policy related to such College First Student Loan (the "Cash Surrender
Value"); and
WHEREAS, a College First Student Loan made to a policyholder who receives
a credit score higher than a certain predetermined level is eligible to be
insured by The Education Resources Institute, Inc., a private non-profit
corporation organized under Chapter 180 of the Massachusetts General Laws
("▇▇▇▇"), pursuant to the terms and provisions of an Amended and Restated
Guaranty Agreement, dated as of December 31, 1999, between UICI and ▇▇▇▇, or the
Guaranty Agreement, dated as of April 1, 2001, between the Corporation and ▇▇▇▇
(collectively, the "▇▇▇▇ Guaranty Agreement"), or by United Student Aid Funds,
Inc. ("USA Funds"), a Delaware corporation, pursuant to the terms and provisions
of an Amended and Restated
Guarantee Agreement, dated as of January 1, 1996 (the "USA Funds Guarantee
Agreement"), among, MEGA, Mid-West, the Corporation and USA Funds; and
WHEREAS, the Corporation, in the future may desire to purchase other
student loans permitted to be acquired pursuant to this Indenture, including
student loans made pursuant to the Federal Family Education Loan Program (the
"FFELP Loans") under the Higher Education Act of 1965, as amended (the "Higher
Education Act"); and
WHEREAS, pursuant to the Corporation's Articles of Incorporation and this
Indenture, the Corporation is authorized to issue its debt obligations (the
"Notes") to obtain funds to make or purchase College First Student Loans, FFELP
Loans and other student loans permitted to be acquired pursuant to this
Indenture (collectively, the "Student Loans"); and
WHEREAS, any series of the Notes (a "Series") may be secured by a form of
credit enhancement purchased by the Corporation, including, without limitation,
a letter of credit, bond insurance, a surety bond or a standby bond purchase
agreement (each a "Credit Facility") delivered by the provider of such Credit
Facility (the "Credit Facility Provider"); and
WHEREAS, the Corporation desires to issue its first two Series of Notes
(collectively, the "Series 2001A Notes") in the aggregate principal amount of
$100,000,000 to, in part, acquire Student Loans from UICI Funding pursuant to
the College First Student Loan Purchase Agreement; and
WHEREAS, the Series 2001A Notes shall be issued as Senior Notes (as
defined in the General Indenture); and
WHEREAS, MBIA Insurance Corporation, as a Credit Facility Provider, has
agreed to guarantee the payment of the principal of and interest on the Series
2001A Notes, when due, pursuant to two separate Credit Facilities for the Series
2001A Notes to be issued simultaneously with the delivery of the Series 2001A
Notes; and
WHEREAS, Section 8.01(g) of the General Indenture permits the Corporation
and the Trustee, with the written consent of each Credit Facility Provider, but
without the consent of the Registered Owners of any Notes issued under the
General Indenture, to enter into Supplemental Indentures which amend and
supplement the General Indenture (which Supplemental Indentures shall thereafter
form a part of the General Indenture) for the purpose of authorizing one or more
Series of Notes; and
WHEREAS, MBIA Insurance Corporation, as the sole Credit Facility Provider,
has consented to the execution and delivery of this First Supplemental Indenture
by the Corporation and the Trustee; and
WHEREAS, UBS PaineWebber Inc., as the initial purchaser for the Series
2001A Notes, has agreed to place the Series 2001A Notes with certain qualified
institutional buyers and institutional accredited investors; and
2
WHEREAS, all things necessary to constitute the Indenture, including this
First Supplemental Indenture, a valid, binding and legal instrument for the
security of the Notes issued pursuant to the Indenture in accordance with its
terms, have been done and performed.
NOW, THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE WITNESSETH:
ARTICLE I
SHORT TITLE, DEFINITIONS AND AUTHORITY
Section 1.01. Short Title. This First Supplemental Indenture shall be
known as and may be designated by the short title "First Supplemental Indenture"
(this "First Supplemental Indenture").
Section 1.02. Definitions. All words and phrases defined in Article I of
the General Indenture or in Exhibit A hereto, respectively, shall have the same
meaning in this First Supplemental Indenture, except as otherwise appears in
this Section. In addition, the following terms shall have the following
meanings, unless the context otherwise requires:
"ARCs" means the Series 2001A Notes bearing interest at Auction Rates.
"Authorized Denomination" means, with respect to the Series 2001A Notes,
principal amounts of $50,000 and integral multiples thereof.
"Cede" means Cede & Co., the nominee of DTC, and any successor nominee
thereof.
"Credit Facility" shall include the financial guaranty insurance policy
No. 350461 and the financial guaranty insurance policy No. 350462, each issued
by MBIA Insurance Corporation, and any replacements thereof, the forms of which
are attached as Exhibit B hereto.
"Debt Service Reserve Policy" shall include the Debt Service Reserve
Surety Bond No. 350463 to be delivered by MBIA Insurance Corporation, and any
replacement thereof, guaranteeing the payment of the principal of and interest
on the Series 2001A Notes, the form of which is attached hereto as Exhibit I.
"Debt Service Reserve Requirement" with respect to the Series 2001A Notes,
means an amount equal 2% of the principal amount of the Series 2001A Notes
Outstanding from time to time.
"DTC" means The Depository Trust Company, and any successor thereof.
"Financial Guaranty Agreement" means the Financial Guaranty Agreement,
dated as of April 1, 2001, between the Corporation and the Surety Provider,
relating to the Debt Service Reserve Policy.
"Fitch" means Fitch, Inc., its successors and assigns, and if such entity
shall be dissolved or liquidated or shall no longer perform the functions of a
securities rating agency, "Fitch" shall
3
be deemed to refer to any nationally recognized securities rating agency
designated by a Corporation Order, with written notice thereof to the Trustee
and Credit Facility Provider.
"General Indenture" means the General Indenture, dated as of April 1,
2001, by and between the Trustee and the Corporation, as amended and
supplemented in accordance with the terms thereof.
"Insurance Paying Agent" means State Street Bank or its successors under
the Credit Facilities for the Series 2001A Notes.
"Issue Date" shall include the date of original delivery of the Series
2001A Notes; April 27, 2001.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc., its successors and
assigns, and if such entity shall be dissolved or liquidated or shall no longer
perform the functions of a securities rating agency, "Moody's" shall be deemed
to refer to any nationally recognized securities rating agency designated by a
Corporation Order, with written notice thereof to the Trustee and Credit
Facility Provider.
"Participants" means those broker-dealers, banks and other financial
institutions from time to time for which DTC holds Series 2001A Notes as
Securities Depository.
"Initial Purchaser" means UBS PaineWebber Inc. and any successor thereof.
"Qualified Surety Bond" means a surety bond issued by an insurance company
rated in the highest category by S&P and Moody's and, if rated by A.M. Best &
Company, must also be rated in the highest rating category by A.M. Best &
Company.
"Reimbursement Agreement" shall include the Insurance Agreement, dated as
of April 1, 2001, among MBIA Insurance Corporation, UICI, the Corporation, UICI
Funding, as the seller, UICI Funding, as the master servicer, and the Trustee,
as amended and supplemented pursuant to the terms thereof.
"Representation Letter" means the representation letter between the
Corporation, the Trustee and DTC in substantially the form attached as Exhibit G
hereto.
"Securities Act" means the Securities Act of 1933, as amended.
"Series 2001A Notes" means, collectively, the Series 2001A-1 Notes and the
Series 2001A-2 Notes.
"Series 2001A-1 Notes" means the Senior Notes authorized by Section 2.01
of this First Supplemental Indenture and titled "Student Loan Asset Backed
Notes, Senior Series 2001A-1 (Auction Rate Certificates)."
"Series 2001A-2 Notes" means the Senior Notes authorized by Section 2.01
of this First Supplemental Indenture and titled "Student Loan Asset Backed
Notes, Senior Series 2001A-2 (Auction Rate Certificates)."
4
"S&P" means Standard & Poor's Credit Market Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., its successors and assigns, and if such entity
shall be dissolved or liquidated or shall no longer perform the functions of a
securities rating agency, "S&P" shall be deemed to refer to any nationally
recognized securities rating agency designated by a Corporation Order, with
written notice thereof to the Trustee and Credit Facility Provider.
"Surety Provider" shall include MBIA Insurance Corporation and any
successor thereof, as the provider of a Debt Service Reserve Policy.
Section 1.03. Authority. This Supplemental Indenture is executed pursuant
to the provisions of the General Indenture and a resolution of the Corporation.
Section 1.04. Definition of Investment Securities. As permitted by the
definition of Investment Securities in Section 1.01 of the General Indenture,
Investment Securities means the following categories of securities:
(a) Direct obligations of the United States of America (including
obligations issued or held in book-entry form on the books of the
Department of the Treasury, and CATS and TIGRS) or obligations the
principal of and interest on which are unconditionally guaranteed by the
United States of America.
(b) Bonds, debentures, notes or other evidence of indebtedness
issued or guaranteed by any of the following federal agencies and provided
such obligations are backed by the full faith and credit of the United
States of America (stripped securities are only permitted if they have
been stripped by the agency itself):
(i) U.S. Export-Import Bank (Eximbank)
(A) Direct obligations or fully guaranteed certificates
of beneficial ownership
(ii) Farmers Home Administration (FmHA)
(A) Certificates of beneficial ownership
(iii) Federal Financing Bank
(iv) Federal Housing Administration Debentures (FHA)
(v) General Services Administration
(A) Participation certificates
(vi) Government National Mortgage Association (GNMA or "▇▇▇▇▇▇
Mae")
(A) GNMA - guaranteed mortgage-backed Notes
(B) GNMA - guaranteed pass-through obligations
5
(vii) U.S Maritime Administration
(A) Guaranteed Title XI financing
(viii) U.S. Department of Housing and Urban Development (HUD)
Project Notes
(A) Local Authority Notes
(B) New Communities Debentures - U.S. government
guaranteed debentures
(C) U.S. Public Housing Notes and Bonds - U.S.
government guaranteed public housing notes and bonds
(c) Bonds, debentures, notes, other evidence of indebtedness issued
or guaranteed by any of the following non-full faith and credit U.S.
government agencies (stripped securities are only permitted if they have
been stripped by the agency itself):
(i) Federal Home Loan Bank System
(A) Senior debt obligations
(ii) Federal Home Loan Mortgage Corporation (FHLMC or "▇▇▇▇▇▇▇
Mac")
(A) Participation Certificates
(B) Senior debt obligations
(iii) Federal National Mortgage Association (FNMA or "▇▇▇▇▇▇
Mae")
(A) Mortgage-backed securities and senior debt
obligations
(iv) Student Loan Marketing Association (SLMA or "▇▇▇▇▇▇ ▇▇▇")
(A) Senior debt obligations
(v) Resolution Funding Corp. (REFCORP) obligations
(vi) Farm Credit System
(A) Consolidated system-wide Notes and notes
(d) Money market funds, including money market funds for which the
Trustee or an affiliate of the Trustee acts as adviser or provides other
services, registered under the Federal Investment Company Act of 1940,
whose shares are registered under the Federal Securities Act of 1933, and
having a rating by S&P of "AAAm-G"; "AAA-m"; and a ▇▇▇▇▇'▇ rating of
"Aaa"; and if rated by Fitch rated "AA" or higher if the money
6
market fund has the ability to maintain a stable one dollar net asset
value per share and the shares are freely transferable on a daily basis.
(e) Certificates of deposit secured at all times by collateral
described in (a) and/or (b) above. Such certificates must be issued by
commercial banks, which may include the Trustee, savings and loan
associations or mutual savings banks. The collateral must be held by a
third party and the Registered Owners must have a perfected first security
interest in the collateral.
(f) Certificates of deposit, savings accounts, deposit accounts or
money market deposits which are fully insured by FDIC, including BIF and
SAIF, and which may be issued by the Trustee.
(g) Investment agreements, including guaranteed investment
contracts, forward purchase agreements and reserve fund put agreements
acceptable to the Credit Facility Provider, and which may be issued by the
Trustee.
(h) Commercial paper rated, at the time of purchase, "A-1+" or
better by S&P and "P1" by Moody's and if rated by Fitch rated "F-1+."
(i) Bonds or notes issued by any state or municipality which are
rated "A-1+" or "AA-" or better by S&P, "Aa2" or better by Moody's and, if
rated by Fitch rated in one of its two highest rating categories, in one
of the two highest rating categories.
(j) Federal funds or bankers acceptances with a maximum term of one
year of any bank which has an unsecured, uninsured and unguaranteed
obligation rating of "A-1" or "A" or better by S&P, "P1" or "A2" by
Moody's and if rated by Fitch "F-1" or "A" or better.
(k) Repurchase agreements for 30 days or less must follow the
following criteria.
Repurchase agreements which exceed 30 days must be acceptable to the
Credit Facility Provider and S&P.
Repurchase agreements are agreements which provide for the transfer of
securities from a dealer bank or securities firm (seller/borrower) to a
counterparty (buyer/lender), and the transfer of cash from the buyer/lender to
the dealer bank or securities firm with an agreement that the dealer bank or
securities firm will repay the cash plus a yield to the buyer/lender in exchange
for the securities at a specified date.
(i) Repurchase agreements must be between the buyer/lender and
a dealer bank or securities firm, which include primary dealers on
the Federal Reserve reporting dealer list which are rated "A" or
above by S&P, "A2" or above by Moody's and if rated by Fitch "A."
7
(ii) The written repurchase agreements must include the
following:
(A) Securities which are acceptable for transfer are:
(1) Direct U.S. governments or
(2) Federal agencies backed by the full faith and
credit of the U.S. government, FNMA and FHLMC
(B) The term of the repurchase agreement may be up to 30
days
(C) The collateral must be delivered to the
buyer/lender, trustee (if trustee is not supplying the
collateral) or third-party acting as agent for the trustee (if
the trustee is supplying the collateral) before/simultaneous
with payment (perfection by possession of certificated
securities).
(D) Valuation of collateral;
(1) The securities must be valued weekly,
marked-to-market at current market price plus accrued
interest;
(a) The value of collateral must be equal
to 104% of the amount of cash transferred by the
buyer/lender to the dealer bank or security firm
under the repurchase contract plus accrued
interest. If the value of securities held as
collateral slips below 104% of the value of the
cash transferred by buyer/lender, then additional
cash and/or acceptable securities must be
transferred. If, however, the securities used as
collateral are FNMA or FHLMC, then the value of
collateral must equal 105%.
(iii) Legal opinion must be delivered to the buyer/lender that
the repurchase agreement meets guidelines under state law for legal
investment of public funds.
ARTICLE II
AUTHORIZATION, TERMS AND ISSUANCE OF SERIES 2001A NOTES
Section 2.01. Principal Amount, Designation and Series. Pursuant to the
provisions of the General Indenture, two Series of Notes entitled to the
benefit, protection and security of the General Indenture are hereby authorized
in the aggregate principal amount of $100,000,000, consisting of a Series of
Senior Notes in the aggregate principal amount of $50,000,000 designated as and
distinguished from the Notes of all other Series by the title "Student Loan
Asset Backed Notes, Senior Series 2001A-1 (Auction Rate Certificates)" (the
"Series 2001A-1 Notes") and a second Series of Senior Notes in the aggregate
principal amount of $50,000,000 designated as and distinguished from the Notes
of all other Series by the title "Student Loan
8
Asset Backed Notes, Senior Series 2001A-2 (Auction Rate Certificates)" (the
"Series 2001A-2 Notes" and, collectively with the Series 2001A-1 Notes, the
"Series 2001A Notes").
Section 2.02. Purposes of Issuance. The Series 2001A Notes are issued for
the purposes of obtaining funds to finance the acquisition of Student Loans, to
make a $500,000 deposit to the Debt Service Reserve Fund, to purchase a Debt
Service Reserve Policy, to make a deposit to the Capitalized Expense Account of
the Revenue Fund, to make a deposit to a Capitalized Interest Account of the
Note Fund established for the Series 2001A Notes and to pay certain Costs of
Issuance related to the Series 2001A Notes.
Section 2.03. Dates, Maturities and Interest Rates. The Series 2001A-1
Notes shall consist of Senior Notes which shall be dated the date of initial
authentication and delivery thereof, shall bear interest at the Auction Rate
described in Exhibit A hereto, shall mature on July 1, 2036 (subject to
redemption prior to maturity as described herein) and shall be payable as
described in Exhibit A hereto. The Series 2001A-2 Notes shall consist of Senior
Notes which shall be dated the date of initial authentication and delivery
thereof, shall bear interest at the Auction Rate described in Exhibit A hereto,
shall mature on July 1, 2036 (subject to redemption prior to maturity as
described herein) and shall be payable as described in Exhibit A hereto. For
purposes of calculating the interest on the Series 2001A Notes to be deposited
to the corresponding Interest Account of the Note Fund pursuant to Section
5.04(b) of the General Indenture, a Series 2001A Note for which an interest rate
has not yet been determined shall be deemed to bear interest at the highest
interest rate determined for such Series 2001A Note for the then current and
preceding two Interest Periods.
Section 2.04. Form, Denomination, Numbers and Letters. The Series 2001A
Notes shall be issued in the form of fully registered notes without coupons, in
substantially the form set forth as Exhibit F hereto. The Series 2001A Notes
shall be issued in the Authorized Denominations and each Series shall be
numbered separately from 1 upward preceded by the letter R prefixed to the
number.
Section 2.05. Book-Entry System; Limited Obligation of Corporation.
(a) The Series 2001A Notes shall be initially issued in the form of
a separate single certificated fully registered Note for each Series. Upon
initial issuance, the ownership of all Series 2001A Notes shall be
registered in the registration books kept by the Registrar in the name of
Cede & Co., as nominee of DTC. Except as provided in Section 2.05(d)
hereof, all of the Outstanding Series 2001A Notes shall be registered in
the registration books kept by the Registrar in the name of Cede, as
nominee of DTC.
(b) With respect to Series 2001A Notes registered in the
registration books kept by the Registrar in the name of Cede, as nominee
of DTC, the Corporation, the Trustee, the Registrar and the Paying Agent
shall have no responsibility or obligation to any Participant or to any
person on behalf of which a Participant holds an interest in the Series
2001A Notes. Without limiting the immediately preceding sentence, the
Corporation, the Trustee, the Registrar and the Paying Agent shall have no
responsibility or obligation with respect to (i) the accuracy of the
records of DTC, Cede or any Participant with respect to any ownership
interest in the Series 2001A Notes, (ii) the
9
delivery to any Participant or any other person, other than a Registered
Owner, as shown in the registration books kept by the Registrar, of any
notice with respect to the Series 2001A Notes, including any notice of
redemption or (iii) the payment to any Participant or any other person,
other than a Registered Owner, as shown in the registration books kept by
the Registrar, of any amount with respect to principal of, premium, if
any, or interest on the Series 2001A Notes. The Corporation, the Trustee,
the Registrar and the Paying Agent may treat and consider the person in
whose name each Series 2001A Note is registered in the registration books
kept by the Registrar as the holder and absolute owner of such Series
2001A Note, as applicable, for the purpose of payment of principal,
premium, if any, and interest with respect to such Series 2001A Note, for
the purpose of giving notices of redemption and other matters with respect
to such Series 2001A Note, for the purpose of registering transfers with
respect to such Series 2001A Note, and for all other purposes whatsoever.
The Paying Agent shall pay all principal of, premium, if any, and
interest on the Series 2001A Notes only to or upon the order of the
respective Registered Owners, as shown in the registration books kept by
the Registrar, or their respective attorneys duly authorized in writing,
and all such payments shall be valid and effective to fully satisfy and
discharge the Corporation's obligations with respect to payment of
principal of, premium, if any, and interest on the Series 2001A Notes, as
applicable, to the extent of the sum or sums so paid. No person other than
a Registered Owner, as shown in the registration books kept by the
Registrar, shall receive a certificated Series 2001A Note evidencing the
obligation of the Corporation to make payments of principal, premium, if
any, and interest of the Series 2001A Notes pursuant to the Indenture.
Upon delivery by DTC to the Registrar of written notice to the effect that
DTC has determined to substitute a new nominee in place of Cede, and
subject to the provisions herein with respect to record dates, the word
"Cede" in this First Supplemental Indenture shall refer to such new
nominee of DTC; and upon receipt of such a notice the Registrar shall
promptly deliver a copy of the same to the Trustee, if the Trustee is
other than itself.
(c) The Representation Letter in the form attached hereto as Exhibit
G, has been executed and delivered on behalf of the Corporation and the
Trustee. The Representation Letter and DTC's operational arrangements
shall not in any way limit the provisions of Section 2.05(b) hereof or in
any other way impose upon the Corporation any obligation whatsoever with
respect to persons having interests in any Series of the Series 2001A
Notes other than the Registered Owners, as shown on the registration books
kept by the Registrar. The Registrar shall take all action necessary for
all representations of the Corporation in the Representation Letter and
DTC's operational arrangements with respect to the Paying Agents and the
Registrar, respectively, to at all times be complied with.
(d) (i) DTC may determine to discontinue providing its services with
respect to the Series 2001A Notes at any time by giving reasonable notice
to the Corporation, the Trustee and the Registrar and discharging its
responsibilities with respect thereto under applicable law.
10
(ii) The Corporation, in its sole discretion and without the
consent of any other person, may terminate the services of DTC with
respect to the Series 2001A Notes if the Corporation determines
that:
(A) DTC is unable to discharge its responsibilities with
respect to such Series of Series 2001A Notes, or
(B) a continuation of the requirement that all of the
Outstanding Series 2001A Notes of such Series be registered in
the registration books kept by the Registrar in the name of
Cede, or any other nominee of DTC, is not in the best interest
of the Beneficial Owners of the Series 2001A Notes of such
Series.
(iii) Upon the termination of the services of DTC with respect
to the Series 2001A Notes pursuant to Section 2.05(d)(ii)(B) hereof,
or upon the discontinuance or termination of the services of DTC
with respect to the Series 2001A Notes, pursuant to Section
2.05(d)(i) or Section 2.05(d)(ii)(A) hereof after which no
substitute Securities Depository willing to undertake the functions
of DTC hereunder can be found which, in the opinion of the
Corporation, is willing and able to undertake such functions upon
reasonable and customary terms, the Corporation is obligated to
deliver Series 2001A Note certificates, as described in the
Indenture and the Series 2001A Notes shall no longer be restricted
to being registered in the registration books kept by the Registrar
in the name of Cede as nominee of DTC, but may be registered in
whatever name or names Registered Owners transferring or exchanging
Series 2001A Notes of such Series shall designate, in accordance
with the provisions of the Indenture.
(e) Notwithstanding any other provision of the Indenture to the
contrary, so long as any Series 2001A Note is registered in the name of
Cede, as nominee of DTC, all payments with respect to principal of,
premium, if any, and interest on such Series 2001A Note, as applicable and
all notices with respect to such Series 2001A Note shall be made and
given, respectively, in the manner provided in the Representation Letter
and DTC's operational arrangements.
Section 2.06. Appointment of Paying Agent and Registrar. Zions First
National Bank is hereby appointed Paying Agent and Registrar with respect to the
Series 2001A Notes. In its capacity as Paying Agent and Registrar, Zions First
National Bank hereby indicates its acceptance of the duties thereof by its
execution of this First Supplemental Indenture as Trustee.
Section 2.07. Appointment of Authenticating Agent. The Corporation hereby
determines that the appointment of an Authenticating Agent is necessary to the
issuance of the Series 2001A Notes and hereby appoints Zions First National Bank
as Authenticating Agent with respect to the Series 2001A Notes. In its capacity
as Authenticating Agent, Zions First National Bank hereby indicates its
acceptance of the duties thereof by its execution of this First Supplemental
Indenture as Trustee.
11
Section 2.08. Redemption.
(a) General. The Series 2001A Notes shall be subject to redemption
by or on behalf of the Corporation prior to maturity upon notice as
provided in this Section and Article VI of the General Indenture. Except
as otherwise provided in this Section, if less than all of the Series
2001A Notes then Outstanding are to be redeemed, the particular Series
2001A Notes to be redeemed shall be selected in accordance with the
written directions of the Corporation and the provisions of Section 6.04
of the General Indenture.
(b) Optional Redemption of the Series 2001A Notes. Subject to
Section 3.04(e) hereof, the Series 2001A Notes are subject to redemption
prior to their maturity at the option of the Corporation from any source
of funds, including funds derived from the sale of Financed Student Loans,
in whole or in part, on any date at a redemption price equal to 100% of
the principal amount of such Series 2001A Notes or portions thereof
redeemed, together with accrued interest thereon (including any Carry-over
Amount thereon and any accrued interest on such Carry-over Amount) to the
date of redemption. The Series of the Series 2001A Notes to be redeemed
shall be determined by the Corporation.
(c) Mandatory Redemption of the Series 2001A Notes.
(i) The Series 2001A Notes are subject to mandatory redemption
prior to their maturity on the first Interest Payment Date which is
at least 25 days after July 1, 2004, or such later date agreed to in
writing by the Credit Facility Provider, from moneys representing
unexpended original proceeds of the Series 2001A Notes remaining on
deposit in the Acquisition Fund on such date, in whole or in part,
at a redemption price equal to 100% of the principal amount of such
Series 2001A Notes or portions thereof redeemed, together with
accrued interest thereon (but not including any Carry-over Amount
thereon and any accrued interest on such Carry-over Amount) to the
date of redemption. Unless otherwise directed by the Corporation,
Series 2001A-1 Notes shall be redeemed prior to the redemption of
Series 2001A-2 Notes. Any moneys representing unexpended original
proceeds of the Series 2001A Notes remaining on deposit in the
Acquisition Fund after the redemption described in this paragraph
(i) (which amount must be less than an Authorized Denomination for
the Series 2001A Notes) shall be transferred to the Revenue Fund.
(ii) The Series 2001A Notes are subject to mandatory
redemption prior to their maturity on the first Interest Payment
Date which is at least 25 days after July 1, 2004 from Recoveries of
Principal on Financed Student Loans purchased with proceeds of the
Series 2001A Notes (or with Recoveries of Principal derived
therefrom) on deposit in the Acquisition Fund on such date, or such
later date agreed to in writing by the Credit Facility Provider, in
whole or in part, at a redemption price equal to 100% of the
principal amount of such Series 2001A Notes or portions thereof
redeemed, together with accrued interest thereon (but not including
any Carry-over Amount thereon and any accrued interest on such
Carry-over Amount) to the date of redemption. Unless otherwise
directed by the
12
Corporation, Series 2001A-1 Notes shall be redeemed prior to the
redemption of Series 2001A-2 Notes. Any moneys representing
Recoveries of Principal on Financed Student Loans purchased with
proceeds of the Series 2001A Notes (or with Recoveries of Principal
derived therefrom) remaining on deposit in the Acquisition Fund
after the redemption described in this paragraph (i) (which amount
must be less than an Authorized Denomination for the Series 2001A
Notes) shall be transferred to the Revenue Fund.
(iii) The Series 2001A Notes shall be subject to mandatory
redemption prior to their maturity on each Interest Payment Date
from Recoveries of Principal on Financed Student Loans purchased
with proceeds of the Series 2001A Notes (or with Recoveries of
Principal derived therefrom) deposited to the Senior Principal
Account of the Note Fund on the 25th day prior to such Interest
Payment Date, in whole or in part, at a redemption price equal to
100% of the principal amount of such Series 2001A Notes or portions
thereof redeemed, together with accrued interest thereon (but not
including any Carry-over Amount thereon and any accrued interest on
such Carry-over Amount) to the date of redemption. Unless otherwise
directed by the Corporation, Series 2001A-1 Notes shall be redeemed
prior to the redemption of Series 2001A-2 Notes.
(d) Notice. Notice of the redemption of Series 2001A Notes shall be
given pursuant to Section 6.04 of the General Indenture.
Section 2.09. Transfer of Notes.
(a) Each Person who is or who becomes a Beneficial Owner of a Series
2001A Note shall be deemed by the acceptance or acquisition of such
beneficial ownership interest to have agreed to be bound by the provisions
of this Section. No beneficial ownership interest in a Series 2001A Note
may be transferred, unless the proposed transferee shall have delivered to
the Corporation and the Trustee either (i) evidence satisfactory to them
that such Series 2001A Note has been registered under the Securities Act
and has been registered or qualified under all applicable state securities
laws to the reasonable satisfaction of the Corporation or (ii) an express
agreement substantially in the form of the Investment Letter attached as
Exhibit H hereto by the proposed transferee to be bound by and to abide by
the provisions of this Section and the restrictions noted in the
Investment Letter; provided that compliance with the provisions of
subparagraphs (i) and (ii) of this Section shall not be required if the
proposed transferee is listed in the latest available S&P Rule 144A list
of Qualified Institutional Buyers or other industry recognized subscriber
services listing Qualified Institutional Buyers.
(b) The Corporation will, upon the request of any Beneficial Owner
of any Outstanding Series 2001A Note, which Beneficial Owner is a
qualified institutional buyer, provide such Beneficial Owner, and any
qualified institutional buyer designated by such Beneficial Owner, such
financial and other information as such Beneficial Owner may reasonably
determine to be necessary in order to permit compliance with the
information requirements of Rule 144A under the Securities Act in
connection with the
13
resale of Series 2001A Notes, except at such times as the Corporation is
subject to the reporting requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended. For the purpose of this
paragraph, the term "qualified institutional buyer" shall have the meaning
specified in Rule 144A under the Securities Act.
Section 2.10. Execution of Reimbursement Agreement and Custodian
Agreements. The Corporation hereby directs the Trustee to execute and deliver
the Reimbursement Agreement with MBIA Insurance Corporation and each of the
Custodian Agreements dated as of April 1, 2001, among the Corporation, the
Trustee and the respective Servicers.
ARTICLE III
DEPOSITS INTO FUNDS AND ACCOUNTS; DISPOSITION OF
PROCEEDS OF THE SALE OF THE SERIES 2001A NOTES; AND
USE AND DISBURSEMENTS OF FUNDS
Section 3.01. Deposits into Funds and Accounts on the Issue Date. The net
proceeds of the sale of the Series 2001A Notes will be distributed and applied
in accordance with the following provisions:
(a) On the Issue Date, the Trustee shall deposit into the Series
2001 Capitalized Expense Account of the Revenue Fund an amount equal to
$625,000.00 from the net proceeds of the Series 2001A Notes, of which
$208,000 shall be paid to MBIA Insurance Corporation as provider of the
Credit Facility and the Debt Service Reserve Policy.
(b) On the Issue Date, the Trustee shall deposit into the Series
2001 Capitalized Interest Account of the Note Fund an amount equal to
$9,200,000.00 from the net proceeds of the Series 2001A Notes.
(c) On the Issue Date, the Trustee shall deposit into the Debt
Service Reserve Fund an amount equal to $500,000 from the net proceeds of
the Series 2001A Notes.
(d) On the Issue Date, the Trustee shall deposit into the
Acquisition Fund an amount equal to $89,200,000.00, representing the
remaining net proceeds of the Series 2001A Notes.
(e) On the Issue Date, the Corporation shall deliver to the Trustee
the Debt Service Reserve Policy in an amount equal to the initial Debt
Service Reserve Requirement for the Series 2001A Notes, for credit to the
Senior Reserve Account of the Debt Service Reserve Fund to secure the
payment of the principal of and interest on the Senior Notes. The Trustee
is hereby directed to accept delivery of the Debt Service Reserve Policy
and the Credit Facility.
Section 3.02. Payment of Expenses and Costs of Issuance. The Trustee
shall, upon written direction of the Corporation, pay Program Expenses from
amounts available therefor in the Revenue Fund to the extent provided in Section
5.04 of the General Indenture. The Corporation shall pay Maintenance and
Operating Expenses from amounts available therefor in
14
the Operating Fund to the extent provided in Section 5.08 of the General
Indenture. Notwithstanding the foregoing, Program Expenses and Maintenance and
Operating Expenses to be paid from the Revenue Fund and the Operating Fund,
respectively, shall be limited to the amounts shown in the Closing Cash Flow
Statement relating to the Series 2001A Notes as certified to the Trustee by the
Corporation. Costs of Issuance of the Series 2001A Notes shall be paid out of
the Capitalized Expense Fund.
Section 3.03. Increase in Program Expenses and Maintenance and Operating
Expenses. The Corporation may increase Program Expenses and Maintenance and
Operating Expenses beyond the limit set forth in Section 3.02 hereof upon
delivery to the Trustee of a subsequent Cash Flow Statement relating to the
Series 2001A Notes and a Credit Confirmation (or, for Notes not subject to a
Credit Facility, a Rating Confirmation). The Trustee shall have no duty to
examine, know or determine any information set forth in any Cash Flow Statement
and may conclusively rely on the certification of the Corporation.
Section 3.04. Debt Service Reserve Fund.
(a) On the Issue Date, there shall be credited to the Debt Service
Reserve Fund (i) $500,000 from the net proceeds of the Series 2001A Notes
and (ii) the Debt Service Reserve Policy from MBIA Insurance Corporation,
as the Surety Provider, which shall be deemed a deposit to the Debt
Service Reserve Fund in the amount of the Debt Service Reserve Requirement
for the Series 2001A Notes (less the $500,000 cash deposit). Amounts on
deposit or available in the Debt Service Reserve Fund shall be applied as
provided in Section 5.07 and Section 5.12 of the General Indenture.
(b) After the application of any cash on deposit in the Debt Service
Reserve Fund, if the Trustee determines pursuant to Section 5.07 or
Section 5.12 of the General Indenture that a further claim or draw upon
the Debt Service Reserve Fund is required to pay the principal of or
interest on the Notes, the Trustee shall draw on the Debt Service Reserve
Policy. The Trustee shall make a Demand for Payment to the Surety Provider
for any such required amount in the manner and as provided in the Debt
Service Reserve Policy attached hereto as Exhibit I. Such Demand for
Payment shall be given to the Surety Provider at least three Business Days
prior to the date on which the funds are required.
(c) In the event that the amount on deposit in the Debt Service
Reserve Fund falls below the Debt Service Reserve Requirement, there shall
be deposited to the Debt Service Reserve Fund from money on deposit in the
Revenue Fund, in accordance with Section 5.04(b) of the General Indenture,
that sum of money needed to accumulate or reaccumulate the amount therein
so that at all times the amount of the Debt Service Reserve Fund equals
the Debt Service Reserve Requirement; provided that so long as the Debt
Service Reserve Policy is in effect, in lieu of such repayments to the
Debt Service Reserve Fund, an amount necessary to reinstate the Debt
Service Reserve Policy shall be payable to the Surety Provider to be used
to reinstate the Debt Service Reserve Policy in accordance with the
Financial Guaranty Agreement prior to replenishing the Debt Service
Reserve Fund.
15
(d) The Trustee shall maintain adequate records, verified with the
Surety Provider, as to the amount available to be drawn at any time under
the Debt Service Reserve Policy and as to the amounts paid and owing to
the Surety Provider under the terms of the Financial Guaranty Agreement or
any other documents relating to the Debt Service Reserve Policy.
(e) Any provisions in the General Indenture notwithstanding, no
money shall be remitted to the Corporation from moneys on deposit in the
Revenue Fund, pursuant to Section 5.04(b)(xx) or Section 5.11 of the
General Indenture and no Notes shall be optionally redeemed by the
Corporation, unless at the time of such transfer or optional redemption
the Debt Service Reserve Policy is fully reinstated and all amounts
currently due and owing to the Surety Provider under the Financial
Guaranty Agreement or any other documents relating to the Debt Service
Reserve Policy have been paid in full.
(f) Nothing herein shall be construed as limiting the right of the
Corporation to deposit cash in the Debt Service Reserve Fund, to
substitute a Debt Service Reserve Policy which constitutes a Qualified
Surety Bond for the cash required hereunder, or to meet the Debt Service
Reserve Requirement with a combination of cash and a Debt Service Reserve
Policy which constitutes a Qualified Surety Bond.
Section 3.05. Recoveries of Principal, Recycling. The Corporation may
finance additional Student Loans with amounts on deposit in the Acquisition Fund
before July 1, 2004, (or such later date approved in writing by the Credit
Facility Provider) derived from Revenues and Recoveries of Principal on Financed
Student Loans purchased with proceeds of the Series 2001A Notes (or with
Recoveries of Principal derived therefrom); provided, however, the Credit
Facility Provider may direct the Corporation in writing to not purchase any
Student Loans at any time if the Credit Provider provides the Corporation and
the Trustee with a certificate stating a reasonable basis why the financing of
additional Student Loans should not continue, and the Credit Facility Provider
may also subsequently permit Student Loans to again be purchased by giving
written notice to the Corporation and the Trustee. Prior to July 1, 2004, (or
such later date approved in writing by the Credit Facility Provider), Recoveries
of Principal on Financed Student Loans purchased with proceeds of the Series
2001A Notes (or with Recoveries of Principal derived therefrom) shall be
deposited to the Acquisition Fund. On and after July 1, 2004, (or such later
date approved in writing by the Credit Facility Provider), all Recoveries of
Principal on Financed Student Loans purchased with proceeds of the Series 2001A
Notes (or with Recoveries of Principal derived therefrom) shall be deposited to
the Senior Principal Account of the Note Fund and used to redeem Series 2001A
Notes pursuant to the mandatory redemption provisions of Section 2.08(c)(iii)
hereof.
Section 3.06. Limitation on Sale of Financed Student Loans. In the event
that the sum of the value of (a) the Financed Student Loans (valued at par plus
accrued interest and accrued Special Allowance Payments and Interest Subsidy
Payments, if any) credited to the Acquisition Fund and (b) all cash and
Investment Securities held in the Funds and Accounts (valued as set forth in the
General Indenture or in the pertinent Supplemental Indenture, plus accrued
interest, but excluding amounts irrevocably set aside to pay particular Notes
pursuant to Section 13.01 of the General Indenture) shall be less than 100% of
the sum of principal and accrued interest on all Outstanding Notes, the
Corporation shall not direct the sale of Financed
16
Student Loans, unless the Corporation shall have received a Credit Confirmation
(or, for Notes not subject to a Credit Facility, a Rating Confirmation) (all as
calculated and determined by the Corporation and evidenced in a Certificate of
an Authorized Representative to the Trustee).
Section 3.07. Cash Flow Statements. The Corporation shall, no more
frequently than once every 12 months, provide to the Credit Facility Provider,
if requested in writing, a Cash Flow Statement based upon assumptions acceptable
to the Credit Facility Provider. At the request of the Credit Facility Provider,
if any, the Corporation shall provide a Cash Flow Statement upon the occurrence
of an Event of Default or upon the Corporation's failure to pay principal or
interest on any Notes Outstanding when and as the same shall become due.
Section 3.08. Perfection of Financed Student Loans and Defaulted Student
Loans. The Trustee shall have a first perfected security interest in all
Financed Student Loans; provided that the foregoing shall not prevent a Servicer
from releasing possession to the Corporation of the related promissory notes and
other documentation with respect to Financed Student Loans in default in
accordance with the provisions of its Servicing Agreement.
Section 3.09. Servicing of Financed Student Loans. The Corporation will
obtain from each Servicer copies of third party audits of such Servicer at least
once each calendar year and upon the written request of the Credit Facility
Provider upon the occurrence of an Event of Default under the Indenture to
ensure that such Servicer is complying with the terms of the Servicing Agreement
and the rules and regulations of the Corporation and provide such report to the
Credit Facility Provider. Such report shall report such compliance in writing
(or otherwise describe any noncompliance in such detail as shall be reasonably
satisfactory to the Credit Facility Provider) and the Corporation shall provide
such report to the Credit Facility Provider. In the event that the Corporation
is notified (whether by such accountants or otherwise) of any material
noncompliance by a Servicer with the due diligence standards, the Corporation
shall use its best efforts to cause such Servicer to do all things necessary to
cure such noncompliance. If a required audit of a Servicer is not received
within 30 days after the time required or if a Servicer shall fail to cure
noncompliance described in the preceding sentence within 60 days after the
Corporation received notice thereof, the Corporation shall, at the written
request of the Credit Facility Provider, arrange for the prompt substitution of
such Servicer for the Financed Student Loans satisfactory to the Credit Facility
Provider and the Corporation under a Servicing Agreement granting rights
substantially identical to the rights granted under the initial Servicing
Agreement with respect to the Financed Student Loans or otherwise satisfactory
to the Credit Facility Provider. The Corporation covenants that each Servicing
Agreement shall provide that the Corporation may terminate the Servicing
Agreement and will, at the written direction of the Credit Facility Provider, if
the Servicer refuses or fails to perform in a material fashion any part of its
obligations under the Servicing Agreement, and fails or refuses to correct said
action or lack of action within 60 days after written notice, upon 60 days'
written notice to the Servicer. All written information required under this
Section shall be delivered to each Credit Facility Provider and the Trustee
within 15 days after receipt thereof by the Corporation. The Corporation
covenants that all amendments to a Servicing Agreement will be consented to in
writing by the Credit Facility Provider. The Corporation covenants that each
Servicing Agreement shall provide that the Servicer thereunder shall, upon an
Event of Default under the Indenture, service the Financed Student Loans as if
the Credit Facility Provider is the owner of the Financed Student Loans (a
third-party beneficiary) and the Credit Facility Provider pays the
17
fees for such accounts. The Corporation covenants that pursuant to each
Servicing Agreement or a related custody agreement, the Servicer will act as
bailee and agent of the Financed Student Loans for the Trustee. The Corporation
shall annually certify to the Trustee that each Servicer is in compliance with
its Servicing Agreement
Section 3.10. Repurchase Obligation Under Student Loan Purchase
Agreements. The Trustee, as a third-party beneficiary under the Student Loan
Purchase Agreements entered into by the Corporation shall have the right to
request the repurchase of loans by the Seller thereunder upon the conditions and
subject to the provisions contained in the Student Loan Purchase Agreement. The
Trustee shall make such a request to the Seller thereunder to repurchase certain
specific loans pursuant to the Student Loan Purchase Agreement if: (a) the
Trustee has actual knowledge that the conditions precedent to such a repurchase
obligation with respect to such loans have not been satisfied; (b) it has
notified the Corporation in writing that such conditions have been satisfied;
and (c) the Corporation has not exercised its right to request the repurchase of
the applicable loans by the Seller within 30 days after receiving written notice
from the Trustee.
Section 3.11. Acquisition of Future Private Loans. The characteristics of
the Private Loans acquired by the Corporation or the Trustee and deposited to
the Trust Estate subsequent to the Issue Date for the Series 2001A Notes shall
not materially differ from the portfolio of Private Loans purchase on the Issue
Date for the Series 2001A Notes (including, without limitation, school type and
borrower credit scores), unless the Corporation and the Trustee receive the
written approval of each Credit Facility Provider, if any, or if there is no
Credit Facility Provider, a Rating Confirmation.
ARTICLE IV
CREDIT FACILITY PROVIDER
Section 4.01. Rights of Credit Facility Provider Controlling. Anything
herein to the contrary notwithstanding, if a Credit Facility is in effect with
respect to a Series of the Series 2001A Notes and the Credit Facility Provider
is not in default of its obligation to make payments thereunder, the Credit
Facility Provider shall be deemed to be the Registered Owner of all such Series
of the Series 2001A Notes then Outstanding for all purposes (including, without
limitation, all approvals, consents, waivers, authorizations, directions,
inspections and the institution of any action), provided that nothing in this
Section shall impair the rights of the Registered Owners to receive all payments
due under the Series 2001A Notes, and the Credit Facility Provider shall have
the exclusive right to exercise or direct the exercise of remedies on behalf of
the Registered Owners of the Series 2001A Notes in accordance with the terms of
the Indenture following an Event of Default, and the principal of all such
Series 2001A Notes Outstanding may not be declared to be due and payable
immediately without the prior written consent of the Credit Facility Provider.
Section 4.02. Payments Under the Credit Facilities for the Series 2001
Notes.
(a) If, as of the second Business Day next preceding any Note
Payment Date for the Series 2001A Notes is due, there are insufficient
moneys available under the
18
Indenture to pay all principal and interest coming due on the Series 2001A
Notes on the next succeeding payment date, the Trustee shall immediately
notify the Credit Facility Provider or its designee by telephone or
telegraph, confirmed in writing by mail, of the amount of the deficiency.
(b) If the deficiency is made up in whole or in part prior to or on
the Interest Payment Date or Principal Payment Date, the Trustee shall so
notify the Credit Facility Provider or its designee.
(c) In addition, if the Trustee has notice that any of the
Registered Owners have been required to disgorge payments of principal or
interest on the Series 2001A Notes to the Corporation or to the trustee in
bankruptcy for creditors or others pursuant to a final judgment by a court
of competent jurisdiction that such payment constitutes a voidable
preference to such Registered Owner within the meaning of any applicable
bankruptcy laws, then the Trustee shall notify the Credit Facility
Provider or its designee of such fact by telephone or telegraphic notice,
confirmed in writing by mail.
(d) The Trustee is hereby irrevocably designated, appointed,
directed and authorized to act as attorney-in-fact for Registered Owners
of the Series 2001A Notes as follows:
(i) if and to the extent there is a deficiency in amounts
required to pay interest on the Series 2001A Notes, the Trustee
shall (A) execute and deliver to the Insurance Paying Agent, in form
satisfactory to the Insurance Paying Agent, an instrument appointing
the Credit Facility Provider as agent for such Registered Owner in
any legal proceedings related to the payment of such interest and an
assignment to the Credit Facility Provider of the claims for
interest to which such deficiency rates and which are paid by the
Credit Facility Provider, (B) receive as designee of the respective
Registered Owner (and not as Trustee) in accordance with the tenor
of the corresponding Credit Facility payment from the Insurance
Paying Agent with respect to the claims for interest so assigned and
(C) disburse the same to such respective Registered Owners.
(ii) if and to the extent of a deficiency in amounts required
to pay principal of the Series 2001A Notes, the Trustee shall (A)
execute and deliver to the Insurance Paying Agent an instrument
appointing the Credit Facility Provider as agent for such Registered
Owner in any legal proceeding relating to the payment of such
principal and assignment to the Credit Facility Provider of any of
the Series 2001A Notes surrendered to the Insurance Paying Agent of
so much of the principal amount thereof as has not previously been
paid or for which moneys are not held by the Trustee and available
for such payment (but such assignment shall be delivered only if
payment from the Insurance Paying Agent is received), (B) receive as
designee of the respective Registered Owners (and not as Trustee) in
accordance with the tenor of the corresponding Credit Facility
payment therefor from the Insurance Paying Agent and (C) disburse
the same to such Registered Owner.
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(e) Payments with respect to claims for interest on and principal of
Series 2001A Notes disbursed by the Trustee from proceeds of the
corresponding Credit Facility shall not be considered to discharge the
obligation of the Corporation with respect to such Series 2001A Notes, and
the Credit Facility Provider shall become the Registered Owner of such
unpaid Series 2001A Notes and claims for interest in accordance with the
tenor of the assignment made to it under the provisions of this subsection
or otherwise.
(f) Irrespective of whether any such assignment is executed and
delivered, the Corporation and the Trustee hereby agree for the benefit of
the Credit Facility Provider that:
(i) they recognize that to the extent the Credit Facility
Provider makes payments, directly or indirectly (as by paying
through the Trustee), on account of principal of or interest on the
Series 2001A Notes, the Credit Facility Provider will be subrogated
to the rights of such Registered Owners to receive the amount of
such principal and interest from the Corporation, with interest
thereon as provided and solely from the sources stated in the
Indenture and the Series 2001A Notes; and
(ii) they will accordingly pay to the Credit Facility Provider
the amount of such principal and interest (including principal and
interest recovered under subparagraph (ii) of the first paragraph of
the corresponding Credit Facility, which principal and interest
shall be deemed past due and not to have been paid), with interest
thereof as provided in this First Supplemental Indenture and the
Series 2001A Notes, but only from the sources and in the manner
provided herein for the payment of principal of and interest on the
Series 2001A Notes to Registered Owners and will otherwise treat the
Credit Facility Provider as the owner of such rights to the amount
of such principal and interest.
Section 4.03. Notices, Consents, Miscellaneous.
(a) In connection with the issuance of additional Notes, if any,
under the General Indenture, the Corporation shall deliver to the Credit
Facility Provider a copy of the disclosure document, if any, circulated
with respect to such additional Notes.
(b) No amendment or supplement shall be made to the General
Indenture, this First Supplemental Indenture, the Auction Agency
Agreement, the Broker-Dealer Agreement, any Student Loan Purchase
Agreement, any Servicing Agreement, any Liquidity Facility or any
Reimbursement Agreement of any Liquidity Facility Provider without prior
written consent of the Credit Facility Provider. Copies of any amendments
or supplements made to the documents executed in connection with the
issuance of the Series 2001A Notes which are consented to in writing by
the Credit Facility Provider shall be sent to the Rating Agencies by the
Corporation.
(c) The Credit Facility Provider shall receive written notice of the
resignation or removal of the Trustee and any successor trustee must be
approved by the Credit Facility Provider. The Credit Facility Provider
shall receive written notice of the
20
resignation or removal of any Paying Agent and any successor paying agent
must be approved in writing by the Credit Facility Provider.
(d) The Credit Facility Provider shall receive from the Corporation
copies of all notices required to be delivered to Registered Owners or to
the Trustee. The Credit Facility Provider shall receive copies, on an
annual basis, of the Corporation's audited financial statements and annual
budget and, on a quarterly basis, copies of the Corporation's unaudited
financial statements.
(e) While any Series 2001A Notes are Outstanding, the Credit
Facility Provider shall approve in writing any Liquidity Facility Provider
and the terms of any Liquidity Facility.
(f) While the Credit Facility is in effect, the Trustee will furnish
the Credit Facility Provider with such information as it may reasonably
request regarding the Series 2001A Notes, as appears from the books and
records under its custody and control, or as otherwise known to it. The
Trustee will permit the Credit Facility Provider to have access to and
make copies at the Credit Facility Provider's own expense of all such
books and records at any reasonable time.
(g) While the Credit Facility is in effect, the Corporation agrees
to permit the Credit Facility Provider to examine, visit and inspect, at
any reasonable time, upon reasonable notice, the Financed Student Loans
acquired, originated or refinanced with the net proceeds of the Notes, and
its facilities, and any accounts, books and records, including their
receipts, disbursements, contracts, investments and any other matters
relating thereto and to their financial standing, and to supply such
reports and information as the Credit Facility Provider may reasonably
require. An Authorized Representative of the Corporation shall, at the
reasonable written request of the Credit Facility Provider, discuss its
financial matters with the Credit Facility Provider or a designee and
provide the Credit Facility Provider with copies of any documents that are
reasonably requested by the Credit Facility Provider or a designee and
have a material financial affect on it.
(h) The Credit Facility Provider shall be notified by the Trustee
(i) immediately upon its actual knowledge of the occurrence of an Event of
Default or of any event that with notice and/or with the lapse of time
could become an Event of Default and (ii) of any redemption of Series
2001A Notes at the same time that the Registered Owners of the Series
2001A Notes to be redeemed are notified. All notices, reports, statements,
schedules, and certificates to be delivered to or by the Trustee, or to a
Registered Owner of a Series 2001A Note or available at the request of the
Registered Owners shall also be provided to the Credit Facility Provider.
In addition, all opinions to be delivered to or by the Trustee, or to a
Registered Owner of a Series 2001A Note shall also be addressed to the
Credit Facility Provider. All notices required to be given to the Credit
Facility Provider under this First Supplemental Indenture shall be in
writing and shall be sent by registered or certified mail addressed to
MBIA Insurance Corporation, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇,
Attention: Insured Portfolio Management--PCF.
21
(i) Notwithstanding any other provision to the contrary in this
First Supplemental Indenture, the Credit Facility Provider is an express
third-party beneficiary of and may enforce this First Supplemental
Indenture as if a party thereto.
Section 4.04. Consents, etc. by Credit Facility Provider Limited.
Notwithstanding any other provision of this First Supplemental Indenture or the
General Indenture to the contrary, no consent of or notice to the Credit
Facility Provider shall be required under any provision of this First
Supplemental Indenture or the General Indenture nor shall the Credit Facility
Provider have any right to receive notice of, consent to, direct or control any
actions, restrictions, rights, remedies, waivers or accelerations pursuant to
any provision of this First Supplemental Indenture or the General Indenture
after each Credit Facility has expired or during any time which:
(a) the Credit Facility Provider is in default in its obligation
under a Credit Facility;
(b) either Credit Facility for any reason ceases to be valid and
binding on the Credit Facility Provider or is declared to be null and
void, or the validity or enforceability of any material provision of
either Credit Facility is denied by the Credit Facility Provider or any
governmental agency or authority, or the Credit Facility Provider is
denying further liability or obligation under either Credit Facility,
contrary to the terms of either Credit Facility;
(c) a petition has been filed and is pending against the Credit
Facility Provider under any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution or liquidation law of any
jurisdiction, whether now or hereafter in effect, and has not been
dismissed within 30 days after such filing; or
(d) the Credit Facility Provider has filed a petition, which is
pending, under any bankruptcy, reorganization, arrangement, insolvency,
readjustment of debt, dissolution or liquidation law of any jurisdiction,
whether now or hereafter in effect, or has consented to the filing of any
petition against it under such law.
Section 4.05. Rating Notifications Upon a Credit Confirmation. Each Rating
Agency shall receive a Rating Notification any time a Credit Facility Provider
has been requested to provide, or has actually provided to, the Corporation or
the Trustee a Credit Confirmation.
ARTICLE V
MISCELLANEOUS
Section 5.01. First Supplemental Indenture Construed with General
Indenture. All of the provisions of this First Supplemental Indenture shall be
deemed to be and construed as part of the General Indenture to the same extent
as if fully set forth therein.
Section 5.02. General Indenture as Supplemented to Remain in Effect. Save
and except as herein supplemented by this First Supplemental Indenture, the
General Indenture shall remain in full force and effect.
22
Section 5.03. Severability. In any section, paragraph, clause or provision
of this First Supplemental Indenture shall for any reason be held to be invalid
or unenforceable, the invalidity or unenforceability of such section, paragraph,
clause or provision shall not affect any of the remaining provisions of this
First Supplemental Indenture.
Section 5.04. Confirmation of Actions. All action (not inconsistent with
the provisions of this First Supplemental Indenture) heretofore taken by the
Corporation, directed toward the issuance and sale of the Series 2001A Notes is
hereby ratified, approved and confirmed.
Section 5.05. Governing Law. This First Supplemental Indenture shall be
construed in accordance with the laws of the State.
Section 5.06. Notices. Any notice, demand, direction, request or other
instrument authorized or required by this First Supplemental Indenture to be
given to or filed with the Corporation shall be deemed to have been sufficiently
given or filed for all purposes, if any, when delivered or sent by facsimile
transmission, confirmed by first class mail, postage prepaid, and shall be
deemed given when transmitted (answer back confirmed) to the addresses given in
Section 13.04 of the General Indenture and as follows:
If to the Corporation: CFLD-I, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
UICI
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Trustee,
Tender Agent,
Paying Agent,
Registrar, and
Authenticating Agent: Zions First National Bank
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Department
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Auction Agent: Bankers Trust Company
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Assistant Vice President
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
23
If to the Broker-Dealer: UBS PaineWebber Inc.
1285 Avenue of the ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Manager, Short Term Desk
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to Moody's: ▇▇▇▇▇'▇ Investors Service, Inc.
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ABS Monitoring Department
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to Fitch: Fitch, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ABS Group
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to Credit Facility MBIA Insurance Corporation
Provider: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: IPM-SF
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to Surety Provider: MBIA Insurance Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: IPM-SF
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
To any other Indenture Agent: to such facsimile number and address as such
Indenture Agent shall indicate in the acceptance of office filed by each such
Indenture Agent pursuant to Section 13.04 of the General Indenture.
The Corporation, the Trustee, the Credit Facility Provider, the Surety
Provider, any other Indenture Agent and a Rating Agency, may, by like notice to
each other such person, designate any further or different facsimile numbers and
addresses to which subsequent notices shall be sent.
The parties, by like notice to each other person, may designate any
further or different addressed to which subsequent notices shall be sent.
The Corporation shall give written notice to the Rating Agencies and any
Credit Facility Provider of each of the following events, promptly following the
occurrence thereof:
(a) any change in the identity of the Trustee;
(b) any change in the identity of the Surety Provider;
24
(c) any material amendments in or supplements to the General
Indenture or this First Supplemental Indenture; or
(d) the redemption or defeasance of all the Outstanding Series 2001A
Notes.
Section 5.07. Rights of Credit Facility Provider. The Credit Facility
Provider may not exercise its rights and remedies under this First Supplemental
Indenture and the General Indenture if the Credit Facility Provider is then in
default under the Credit Facility or bankrupt or insolvent.
Section 5.08. Execution in Counterparts. This First Supplemental Indenture
may be executed in any number of counterparts, each of which, when so executed
and delivered, shall be an original; but such counterparts shall together
constitute but one and the same instrument.
25
IN WITNESS WHEREOF, the undersigned President and Secretary of the
Corporation and an authorized officer of the Trustee have hereunto executed this
First Supplemental Indenture as of the date first written above.
CFLD-I, INC.
By:_____________________________________
▇▇▇▇▇ ▇. ▇▇▇▇, President
Attest:
By:_________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Secretary
ZIONS FIRST NATIONAL BANK, as Trustee
By:_____________________________________
▇▇▇▇▇ ▇. ▇▇▇▇, Vice President
26
The undersigned representative of MBIA Insurance Corporation, as the sole
Credit Facility Provider, hereby consents to the execution and delivery of this
First Supplemental Indenture and to the issuance and delivery of the Series
2001A Notes thereunder.
MBIA INSURANCE CORPORATION
By _____________________________________
Name: __________________________________
Title: _________________________________
27