Exhibit 4.1
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INDENTURE
between
XXXXX FARGO STUDENT LOAN TRUST 2001-1
as Issuer
and
CHASE MANHATTAN BANK
not in its individual capacity but
solely as Indenture Trustee
Dated as of November [o], 2001
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TABLE OF CONTENTS
Page
ARTICLE I
Definitions and Usage
SECTION 1.01. Definitions and Usage.............................................................................7
SECTION 1.02. Incorporation by Reference of Trust Indenture Act.................................................7
ARTICLE II
The Notes
SECTION 2.01. Form..............................................................................................8
SECTION 2.02. Execution, Authentication and Delivery............................................................8
SECTION 2.03. Temporary Notes...................................................................................9
SECTION 2.04. Registration; Registration of Transfer and Exchange...............................................9
SECTION 2.05. Mutilated, Destroyed, Lost or Stolen Notes.......................................................10
SECTION 2.06. Persons Deemed Owner.............................................................................11
SECTION 2.07. Payment of Principal and Interest; Defaulted Interest............................................11
SECTION 2.08. Cancellation.....................................................................................12
SECTION 2.09. Release of Collateral............................................................................12
SECTION 2.10. Book-Entry Notes.................................................................................13
SECTION 2.11. Notices to Clearing Agency.......................................................................13
SECTION 2.12. Definitive Notes.................................................................................13
ARTICLE III
Covenants
SECTION 3.01. Payment to Noteholders...........................................................................14
SECTION 3.02. Maintenance of Office or Agency..................................................................14
SECTION 3.03. Money for Payments to Be Held in Trust...........................................................14
SECTION 3.04. Existence........................................................................................16
SECTION 3.05. Protection of Indenture Trust Estate.............................................................16
SECTION 3.06. Opinions as to Indenture Trust Estate............................................................17
SECTION 3.07. Performance of Obligations; Servicing of Student Loans...........................................17
SECTION 3.08. Negative Covenants...............................................................................19
SECTION 3.09. Annual Statement as to Compliance................................................................20
SECTION 3.10. Issuer May Consolidate, etc. Only on Certain Terms...............................................20
SECTION 3.11. Successor or Transferee..........................................................................22
SECTION 3.12. No Other Business................................................................................22
SECTION 3.13. No Borrowing.....................................................................................22
SECTION 3.14. Obligations of Servicer and Administrator........................................................22
SECTION 3.15. Guarantees, Loans, Advances and Other Liabilities................................................22
SECTION 3.16. Capital Expenditures.............................................................................23
SECTION 3.17. Restricted Payments..............................................................................23
SECTION 3.18. Notice of Events of Default......................................................................23
SECTION 3.19. Further Instruments and Acts.....................................................................23
SECTION 3.20. Removal of Administrator.........................................................................23
ARTICLE IV
Satisfaction and Discharge
SECTION 4.01. Satisfaction and Discharge of Indenture..........................................................23
SECTION 4.02. Application of Trust Money.......................................................................25
SECTION 4.03. Repayment of Monies Held by Paying Agent.........................................................25
SECTION 4.04. Auction of Financed Student Loans................................................................25
ARTICLE V
Remedies
SECTION 5.01. Events of Default................................................................................26
SECTION 5.02. Acceleration of Maturity; Rescission and Annulment...............................................27
SECTION 5.03. Collection of Indebtedness and Suits for Enforcement by Indenture Trustee........................27
SECTION 5.04. Remedies; Priorities.............................................................................29
SECTION 5.05. Optional Preservation of the Indenture Trust Estate..............................................31
SECTION 5.06. Limitation of Suits..............................................................................31
SECTION 5.07. Unconditional Rights of Noteholders to Receive Principal and Interest............................32
SECTION 5.08. Restoration of Rights and Remedies...............................................................32
SECTION 5.09. Rights and Remedies Cumulative...................................................................32
SECTION 5.10. Delay or Omission Not a Waiver...................................................................33
SECTION 5.11. Control by Noteholders...........................................................................33
SECTION 5.12. Waiver of Past Defaults..........................................................................33
SECTION 5.13. Undertaking for Costs............................................................................34
SECTION 5.14. Waiver of Stay or Extension Laws.................................................................34
SECTION 5.15. Action on Notes..................................................................................34
SECTION 5.16. Performance and Enforcement of Certain Obligations...............................................34
ARTICLE VI
The Indenture Trustee
SECTION 6.01. Duties of Indenture Trustee......................................................................35
SECTION 6.02. Rights of Indenture Trustee......................................................................37
SECTION 6.03. Individual Rights of Indenture Trustee...........................................................37
SECTION 6.04. Indenture Trustee's Disclaimer...................................................................37
SECTION 6.05. Notice of Defaults...............................................................................38
SECTION 6.06. Reports by Indenture Trustee to Noteholders......................................................38
SECTION 6.07. Compensation and Indemnity.......................................................................38
SECTION 6.08. Replacement of Indenture Trustee.................................................................39
SECTION 6.09. Successor Indenture Trustee by Merger............................................................40
SECTION 6.10. Appointment of Co-Trustee or Separate Trustee....................................................40
SECTION 6.11. Eligibility; Disqualification....................................................................41
SECTION 6.12. Preferential Collection of Claims Against Issuer.................................................42
SECTION 6.13. Declaration of Default or Termination Event under any Swap Agreements............................42
ARTICLE VII
Noteholders' Lists and Reports
SECTION 7.01. Issuer to Furnish Indenture Trustee Names and Addresses of Noteholders...........................42
SECTION 7.02. Preservation of Information; Communications to Noteholders.......................................42
SECTION 7.03. Reports by Issuer................................................................................43
ARTICLE VIII
Accounts, Disbursements and Releases
SECTION 8.01. Collection of Money..............................................................................43
SECTION 8.02. Trust Accounts...................................................................................44
SECTION 8.03. General Provisions Regarding Accounts............................................................45
SECTION 8.04. Release of Indenture Trust Estate................................................................46
SECTION 8.05. Opinion of Counsel...............................................................................46
ARTICLE IX
Supplemental Indentures
SECTION 9.01. Supplemental Indentures Without Consent of Noteholders...........................................47
SECTION 9.02. Supplemental Indentures with Consent of Noteholders..............................................48
SECTION 9.03. Execution of Supplemental Indentures.............................................................49
SECTION 9.04. Effect of Supplemental Indenture.................................................................50
SECTION 9.05. Conformity with Trust Indenture Act..............................................................50
SECTION 9.06. Reference in Notes to Supplemental Indentures....................................................50
ARTICLE X
Redemption of Notes
SECTION 10.01. Redemption......................................................................................51
SECTION 10.02. Form of Redemption Notice.......................................................................52
SECTION 10.03. Notes Payable on Redemption Date................................................................52
ARTICLE XI
Miscellaneous
SECTION 11.01. Compliance Certificates and Opinions............................................................52
SECTION 11.02. Form of Documents Delivered to Indenture Trustee................................................54
SECTION 11.03. Acts of Noteholders.............................................................................55
SECTION 11.04. Notices to Indenture Trustee, Issuer, Swap Counterparties and Rating Agencies...................55
SECTION 11.05. Notices to Noteholders; Waiver..................................................................56
SECTION 11.06. Alternate Payment and Notice Provisions.........................................................56
SECTION 11.07. Conflict with Trust Indenture Act...............................................................57
SECTION 11.08. Effect of Headings and Table of Contents........................................................57
SECTION 11.09. Successors and Assigns..........................................................................57
SECTION 11.10. Separability....................................................................................57
SECTION 11.11. Benefits of Indenture...........................................................................57
SECTION 11.12. Governing Law...................................................................................57
SECTION 11.13. Counterparts....................................................................................57
SECTION 11.14. Recording of Indenture..........................................................................58
SECTION 11.15. Trust Obligations...............................................................................58
SECTION 11.16. No Petition.....................................................................................58
SECTION 11.17. Inspection......................................................................................58
SECTION 11.18. Consents........................................................................................59
EXHIBIT A-1 - Form of Class A-1 Note
EXHIBIT A-2 - Form of Class A-2 Note
EXHIBIT A-3 - Form of Subordinate Note
EXHIBIT B - Depository Agreement
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INDENTURE dated as of November [o], 2001 between XXXXX FARGO STUDENT
LOAN TRUST 2001-1, a Delaware trust (the "Issuer"), and CHASE MANHATTAN BANK,
a New York banking corporation, as trustee and not in its individual capacity
(the "Indenture Trustee").
Each party agrees as follows for the benefit of the other party and
for the equal and ratable benefit of the holders of the Issuer's Class A-1
Floating Rate Senior Asset-Backed Notes (the "Class A-1 Notes"), Class A-2
Floating Rate Asset-Backed Senior Notes (the "Class A-2 Notes" and, together
with the Class A-1 Notes, the "Senior Notes") and Class B Floating Rate
Asset-Backed Subordinate Notes (the "Subordinate Notes" and, together with the
Senior Notes, the "Notes"):
GRANTING CLAUSE
The Issuer (and, with respect to the legal title to the Financed
Student Loans, the Eligible Lender Trustee) hereby Grants to the Indenture
Trustee at the Closing Date, as trustee for the benefit of the Noteholders and
any Swap Counterparties, all the Issuer's and the Eligible Lender Trustee's
right, title and, interest in and to, but none of its obligations under, the
following:
(a) the Financed Student Loans, and all obligations of the
Obligors thereunder including all monies paid thereunder on and after
the Cutoff Date net of interest accrued thereunder prior to the
Cutoff Date that is not to be capitalized (or, in the case of
Prefunded Loans or Serial Loans, on and after the related Subsequent
Cutoff Date, in the case of Consolidation Loans, on and after the
related date of origination, in the case of Consolidation Loans the
principal balances of which have been increased by the principal
balances of any related Add-on Consolidation Loans, on and after the
related Add-on Consolidation Loan Funding Date, and in the case of
Qualified Substitute Student Loans, on and after the date of
assignment thereof to the Issuer);
(b) the Loan Sale Agreement, including the right of the
Issuer to cause the Seller to repurchase or substitute for, Financed
Student Loans from the Issuer under circumstances described therein;
(c) the Servicing Agreement, including the right of the
Issuer to cause the Servicer to purchase Financed Student Loans from
the Issuer under the circumstances described therein;
(d) each Guarantee Agreement, including the right of the
Issuer to cause the related Guarantor to make Guarantee Payments in
respect of the Financed Student Loans;
(e) the Administration Agreement;
(f) any Swap Agreements;
(g) all funds on deposit from time to time in the Trust
Accounts, including the Reserve Account Initial Deposit and the
Prefunding Account Closing Date Deposit, and in all investments and
proceeds thereof (including all income thereon); and
(h) all present and future claims, demands, causes and
chooses in action in respect of any or all of the foregoing and all
payments on or under and all proceeds of every kind and nature
whatsoever in respect of any or all of the foregoing, including all
proceeds of the conversion, voluntary or involuntary, into cash or
other liquid property, all cash proceeds, accounts, accounts
receivable, notes, drafts, acceptances, chattel paper, checks,
deposit accounts, insurance proceeds, condemnation awards, rights to
payment of any and every kind and other forms of obligations and
receivables, instruments and other property which at any time
constitute all or part of or are included in the proceeds of any of
the foregoing (collectively, the "Collateral").
The foregoing Grant is made in trust to secure the payment of
principal of and interest on, and any other amounts owing in respect of, the
Notes, equally and ratably without prejudice, priority or distinction, and
under any Swap Agreements, and to secure compliance with the provisions of
this Indenture, all as provided in this Indenture.
The Indenture Trustee, as Indenture Trustee on behalf of the
Noteholders and any Swap Counterparties, acknowledges such Grant, accepts the
trusts under this Indenture in accordance with the provisions of this
Indenture and agrees to perform its duties required in this Indenture to the
best of its ability to the end that the interests of the Noteholders and any
Swap Counterparties may be adequately and effectively protected.
ARTICLE I
Definitions and Usage
SECTION 1.01. Definitions and Usage. Except as otherwise specified
herein or as the context may otherwise require, capitalized terms used but not
defined herein are defined in Appendix A to the Administration Agreement,
dated as of November [o], 2001, among the Issuer, Xxxxx Fargo Bank Minnesota,
National Association, as Administrator, and the Indenture Trustee, which also
contains rules as to usage that shall be applicable herein.
SECTION 1.02. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Indenture
Trustee.
"obligor" on the indenture securities means the Issuer and any other
obligor on the indenture securities.
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All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by Commission rule
have the meaning assigned to them by such definitions.
ARTICLE II
The Notes
SECTION 2.01. Form. The Class A-1 Notes, the Class A-2 Notes and the
Subordinate Notes, together with the Indenture Trustee's certificate of
authentication, shall be in substantially the form set forth in Exhibits X-0,
X-0 xxx X-0, respectively, with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture and may have such letters, numbers or other marks of identification
and such legends or endorsements placed thereon as may, consistently herewith,
be determined by the officers executing such Notes, as evidenced by their
execution of the Notes. Any portion of the text of any Note may be set forth
on the reverse thereof, with an appropriate reference thereto on the face of
the Note.
The Definitive Notes shall be typewritten, printed, lithographed or
engraved or produced by any combination of these methods (with or without
steel engraved borders), all as determined by the officers executing such
Notes, as evidenced by their execution of such Notes.
Each Note shall be dated the date of its authentication. The terms of
the Notes set forth in Exhibits X-0, X-0 and A-3 are part of the terms of this
Indenture.
SECTION 2.02. Execution, Authentication and Delivery. The Notes shall
be executed on behalf of the Issuer by any of its Authorized Officers. The
signature of any such Authorized Officer on the Notes may be manual or
facsimile.
Notes bearing the manual or facsimile signature of individuals who
were at any time Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.
The Indenture Trustee shall upon Issuer Order authenticate and
deliver Class A-1 Notes for original issue in an aggregate principal amount of
$[o], Class A-2 Notes for original issue in the aggregate principal amount of
$[o], and Subordinate Notes for original issue in an aggregate principal
amount of $[o]. The aggregate principal amount of Class A-1 Notes, Class A-2
Notes and Subordinate Notes outstanding at any time may not exceed such
respective amounts except as provided in Section 2.05.
Each Note shall be dated the date of its authentication. The Notes
shall be issuable as registered Book-Entry Notes in the minimum denomination
of $1,000 and in integral multiples of $1,000 in excess thereof.
No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Note a
certificate of authentication substantially in the form provided for herein
executed by the Indenture Trustee by the manual signature of one of its
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authorized signatories, and such certificate upon any Note shall be conclusive
evidence, and the only evidence, that such Note has been duly authenticated
and delivered hereunder.
SECTION 2.03. Temporary Notes. Pending the preparation of Definitive
Notes, the Issuer may execute, and upon receipt of an Issuer Order the
Indenture Trustee shall authenticate and deliver, temporary Notes which are
printed, lithographed, typewritten, mimeographed or otherwise produced, of the
tenor of the Definitive Notes in lieu of which they are issued and with such
variations not inconsistent with the terms of this Indenture as the officers
executing such Notes may determine, as evidenced by their execution of such
Notes.
If temporary Notes are issued, the Issuer will cause Definitive Notes
to be prepared without unreasonable delay. After the preparation of Definitive
Notes, the temporary Notes shall be exchangeable for Definitive Notes upon
surrender of the temporary Notes at the office or agency of the Issuer to be
maintained as provided in Section 3.02, without charge to the Noteholder. Upon
surrender for cancellation of any one or more temporary Notes, the Issuer
shall execute and the Indenture Trustee shall authenticate and deliver in
exchange therefor a like principal amount of Definitive Notes of authorized
denominations. Until so exchanged, the temporary Notes shall in all respects
be entitled to the same benefits under this Indenture as Definitive Notes.
SECTION 2.04. Registration; Registration of Transfer and Exchange.
The Issuer shall cause to be kept a register (the "Note Register") in which,
subject to such reasonable regulations as it may prescribe, the Issuer shall
provide for the registration of Notes and the registration of transfers of
Notes. The Indenture Trustee shall be "Note Registrar" for the purpose of
registering Notes and transfers of Notes as herein provided. Upon any
resignation of any Note Registrar, the Issuer shall promptly appoint a
successor or, if it elects not to make such an appointment, assume the duties
of Note Registrar.
If a Person other than the Indenture Trustee is appointed by the
Issuer as Note Registrar, the Issuer will give the Indenture Trustee prompt
written notice of the appointment of such Note Registrar and of the location,
and any change in the location, of the Note Register, and the Indenture
Trustee shall have the right to inspect the Note Register at all reasonable
times and to obtain copies thereof, and the Indenture Trustee shall have the
right to rely upon a certificate executed on behalf of the Note Registrar by
an Executive Officer thereof as to the names and addresses of the Noteholders
and the principal amounts and number of such Notes.
Subject to the restrictions and limitations set forth below, upon
surrender for registration of transfer of any Note at the office or agency of
the Issuer to be maintained as provided in Section 3.02, if the requirements
of Section 8-401(1) of the UCC are met, the Issuer shall execute, and the
Indenture Trustee shall authenticate and the Noteholder shall obtain from the
Indenture Trustee, in the name of the designated transferee or transferees,
one or more new Notes in any authorized denominations, of a like aggregate
principal amount.
At the option of the Noteholder, Notes may be exchanged for other
Notes of the same class in any authorized denominations, of a like aggregate
principal amount, upon surrender of the Notes to be exchanged at such office
or agency. Whenever any Notes are so surrendered for exchange, if the
requirements of Section 8-401(1) of the UCC are met, the Issuer shall execute,
9
and the Indenture Trustee shall authenticate and, the Noteholder shall obtain
from the Indenture Trustee, the Notes which the Noteholder making the exchange
is entitled to receive.
All Notes issued upon any registration of transfer or exchange of
Notes shall be the valid obligations of the Issuer, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Notes
surrendered upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or
exchange shall be duly endorsed by, or be accompanied by a written instrument
of transfer in form satisfactory to the Note Registrar duly executed by, the
Noteholder thereof or such Noteholder's attorney duly authorized in writing,
with such signature guaranteed by an "eligible guarantor institution" meeting
the requirements of the Note Registrar, which requirements include membership
or participation in Securities Transfer Agent's Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Note
Registrar in addition to, or in substitution for, STAMP, all in accordance
with the Exchange Act.
No service charge shall be made to a Noteholder for any registration
of transfer or exchange of Notes, but the Indenture Trustee may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any registration of transfer or exchange of
Notes, other than exchanges pursuant to Section 2.03 or 9.06 not involving any
transfer.
The preceding provisions of this Section notwithstanding, the Issuer
shall not be required to make and the Note Registrar need not register
transfers or exchanges of Notes selected for redemption or of any Note for a
period of 15 days preceding the due date for any payment with respect to such
Note.
SECTION 2.05. Mutilated, Destroyed, Lost or Stolen Notes. If (i) any
mutilated Note is surrendered to the Indenture Trustee, or the Indenture
Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Note, and (ii) there is delivered to the Indenture Trustee such
security or indemnity as may be required by it to hold the Issuer and the
Indenture Trustee harmless, then, in the absence of notice to the Issuer, the
Note Registrar or the Indenture Trustee that such Note has been acquired by a
bona fide purchaser, and provided that the requirements of Section 8-405 of
the UCC are met, the Issuer shall execute and upon its request the Indenture
Trustee shall authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Note, a replacement Note of the same
category; provided, however, that if any such destroyed, lost or stolen Note,
but not a mutilated Note, shall have become or within 15 days shall be due and
payable, or shall have been called for redemption, instead of issuing a
replacement Note, the Issuer may pay such destroyed, lost or stolen Note when
so due or payable or upon the Redemption Date without surrender thereof. If,
after the delivery of such replacement Note or payment of a destroyed, lost or
stolen Note pursuant to the proviso to the preceding sentence, a bona fide
purchaser of the original Note in lieu of which such replacement Note was
issued presents for payment such original Note, the Issuer, the Indenture
Trustee shall be entitled to recover such replacement Note (or such payment)
from the Person to whom it was delivered or any Person taking such replacement
Note from such Person to whom such replacement Note was delivered or any
assignee of such Person, except a bona fide purchaser, and shall be entitled
to recover upon the security or indemnity
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provided therefor to the extent of any loss, damage, cost or expense incurred
by the Issuer, the Indenture Trustee in connection therewith.
Upon the issuance of any replacement Note under this Section, the
Issuer may require the payment by the Noteholder thereof of a sum sufficient
to cover any tax or other governmental charge that may be imposed in relation
thereto and any other reasonable expenses (including the fees and expenses of
the Indenture Trustee) connected therewith.
Every replacement Note issued pursuant to this Section in replacement
of any mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Issuer, whether or not the mutilated,
destroyed, lost or stolen Note shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Notes.
SECTION 2.06. Persons Deemed Owner. Prior to due presentment for
registration of transfer of any Note, the Issuer, the Indenture Trustee, and
any agent of the Issuer, or the Indenture Trustee may treat the Person in
whose name any Note is registered (as of the day of determination) as the
owner of such Note for the purpose of receiving payments of principal of,
interest, if any, on such Note and for all other purposes whatsoever, whether
or not such Note be overdue, and none of the Issuer, or the Indenture Trustee
or any agent of the Issuer or the Indenture Trustee shall be affected by
notice to the contrary.
SECTION 2.07. Payment of Principal and Interest; Defaulted Interest.
(a) The Notes shall accrue interest as provided in the forms of Class A-1
Note, Class A-2 Note and Subordinate Note set forth in Exhibits X-0, X-0 xxx
X-0, respectively, and such interest shall be payable on each Quarterly
Payment Date as specified therein, subject, in each case, to Section 3.01. Any
installment of interest or principal, if any, payable on any Note which is
punctually paid or duly provided for by the Issuer on the applicable Quarterly
Payment Date shall be paid to the Person in whose name such Note (or one or
more Predecessor Notes) is registered on the Record Date by wire transfer if
such Person holds Notes in an aggregate original principal amount in excess of
$1,000,000 and provides appropriate written instructions to the Indenture
Trustee no later than such Record Date, and otherwise by check mailed
first-class, postage prepaid to such Person's address as it appears on the
Note Register on such Record Date, except that, unless Definitive Notes have
been issued pursuant to Section 2.12, with respect to Senior Notes registered
on the Record Date in the name of the nominee of the Clearing Agency
(initially, such nominee to be Cede & Co.), payment will be made by wire
transfer in immediately available funds to the account designated by such
nominee and except for the final installment of principal payable with respect
to such Note on a Quarterly Payment Date or on the Class A-1 Note Final
Maturity Date, the Class A-2 Note Final Maturity Date or the Subordinate Note
Final Maturity Date, as the case may be, which shall be payable as provided
below. The funds represented by any such checks returned undelivered shall be
held in accordance with Section 3.03.
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(b) The principal of each Note shall be payable in installments on
each Quarterly Payment Date as provided in the forms of the Class A-1 Notes,
Class A-2 Notes and Subordinate Note set forth in Exhibits X-0, X-0 xxx X-0,
respectively. Notwithstanding the foregoing, the entire unpaid principal
amount of the Notes shall be due and payable, if not previously paid, on the
date on which an Event of Default shall have occurred, if the Indenture
Trustee or the Noteholders of the Notes representing not less than a majority
of the Outstanding Amount of the Notes have declared the Notes to be
immediately due and payable in the manner provided in Section 5.02. All
principal payments on each class of Notes shall be made pro rata to the
Noteholders of such class. The Indenture Trustee shall notify the Person in
whose name a Note is registered at the close of business on the Record Date
preceding the Quarterly Payment Date on which the Issuer expects that the
final installment of principal of and interest on such Note will be paid. Such
notice shall be mailed or transmitted by facsimile prior to such final
Quarterly Payment Date and shall specify that such final installment will be
payable only upon presentation and surrender of such Note and shall specify
the place where such Note may be presented and surrendered for payment of such
installment. Notices in connection with redemptions of Notes shall be mailed
to Noteholders as provided in Section 10.02.
(c) If the Issuer defaults in a payment of interest on the Notes, the
Issuer shall pay defaulted interest (plus interest on such defaulted interest
to the extent lawful) at the applicable Note Rate in any lawful manner. The
Issuer may pay such defaulted interest to the Persons who are Noteholders on a
subsequent special record date, which date shall be at least five Business
Days prior to the payment date. The Issuer shall fix or cause to be fixed any
such special record date and payment date, and, at least 15 days before any
such special record date, the Issuer shall mail to the Indenture Trustee a
notice which the Indenture Trustee will, as soon as practicable, distribute to
each Noteholder that states the special record date, the payment date and the
amount of defaulted interest to be paid.
SECTION 2.08. Cancellation. All Notes surrendered for payment,
registration of transfer, exchange or redemption shall, if surrendered to any
Person other than the Indenture Trustee, be delivered to the Indenture Trustee
and shall be promptly cancelled by the Indenture Trustee. The Issuer may at
any time deliver to the Indenture Trustee for cancellation any Notes
previously authenticated and delivered hereunder which the Issuer may have
acquired in any manner whatsoever, and all Notes so delivered shall be
promptly cancelled by the Indenture Trustee. No Notes shall be authenticated
in lieu of or in exchange for any Notes cancelled as provided in this Section,
except as expressly permitted by this Indenture. All cancelled Notes may be
held or disposed of by the Indenture Trustee in accordance with its standard
retention or disposal policy as in effect at the time, unless the Issuer shall
direct by an Issuer Order that they be returned to it and so long as such
Issuer Order is timely and the Notes have not been previously disposed of by
the Indenture Trustee.
SECTION 2.09. Release of Collateral. Subject to Section 11.01 and the
terms of the Basic Documents, the Indenture Trustee shall release property
from the lien of this Indenture only upon receipt by it and any Swap
Counterparties of an Issuer Request accompanied by an Officers' Certificate of
the Issuer, an Opinion of Counsel and Independent Certificates in accordance
with TIA xx.xx. 314(c) and 314(d)(1) or an Opinion of Counsel in lieu of such
Independent Certificates to the effect that the TIA does not require any such
Independent Certificates.
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SECTION 2.10. Book-Entry Notes. The Class A-1 Notes, Class A-2 Notes
and the Subordinate Notes, upon original issuance, will be issued in the form
of typewritten Notes representing the Book-Entry Notes, to be delivered to The
Depository Trust Company, the initial Clearing Agency, by, or on behalf of,
the Issuer. Such Notes shall initially be registered on the Note Register in
the name of Cede & Co., the nominee of the initial Clearing Agency, and no
Note Owner will receive a Definitive Note (as defined below) representing such
Note Owner's interest in such Book-Entry Note, except as provided in Section
2.12. Unless and until definitive, fully registered Notes (the "Definitive
Notes") have been issued to Note Owners pursuant to Section 2.12:
(i) the provisions of this Section shall be in full force
and effect;
(ii) the Note Registrar and the Indenture Trustee may deal
with the Clearing Agency for all purposes (including the payment of
principal of and interest and other amounts on the Book-Entry Notes)
as the authorized representative of the Note Owners;
(iii) to the extent that the provisions of this Section
conflict with any other provisions of this Indenture, the provisions
of this Section shall control;
(iv) the rights of Note Owners shall be exercised only
through the Clearing Agency and shall be limited to those established
by law and agreements between such Note Owners and the Clearing
Agency and/or the Clearing Agency Participants pursuant to the Note
Depository Agreement. Unless and until Definitive Notes are issued
pursuant to Section 2.12, the initial Clearing Agency will make
book-entry transfers among the Clearing Agency Participants and
receive and transmit payments of principal of and interest and other
amounts on the Book-Entry Notes to such Clearing Agency Participants;
and
(v) whenever this Indenture requires or permits actions to
be taken based upon instructions or directions of Noteholders of
Notes evidencing a specified percentage of the Outstanding Amount of
the Notes, the Clearing Agency shall be deemed to represent such
percentage only to the extent that it has received written
instructions to such effect from Note Owners and/or Clearing Agency
Participants owning or representing, respectively, such required
percentage of the beneficial interest in the Notes and has delivered
such written instructions to the Indenture Trustee.
SECTION 2.11. Notices to Clearing Agency. Whenever a notice or other
communication to the Noteholders is required under this Indenture, unless and
until Definitive Notes shall have been issued to Note Owners pursuant to
Section 2.12, the Indenture Trustee shall give all such notices and
communications specified herein to be given to Noteholders of the Notes to the
Clearing Agency.
SECTION 2.12. Definitive Notes. If (i) the Administrator advises the
Indenture Trustee in writing that the Clearing Agency is no longer willing or
able to properly discharge its responsibilities with respect to the Book-Entry
Notes, and the Administrator is unable to locate a qualified successor, (ii)
the Administrator at its option advises the Indenture Trustee in writing that
it elects to terminate the book-entry system through the Clearing Agency or
(iii) after the
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occurrence of an Event of Default, a Servicer Default or an Administrator
Default, Note Owners representing beneficial interests aggregating at least a
majority of the Outstanding Amount of the Book-Entry Notes advise the
Indenture Trustee in writing (which shall then notify the Clearing Agency)
that the continuation of a book-entry system through the Clearing Agency is no
longer in the best interests of the Note Owners, then the Indenture Trustee
will cause the Clearing Agency to notify all Note Owners, through the Clearing
Agency Participants, of the occurrence of any such event and of the
availability of Definitive Notes to Note Owners requesting the same. Upon
surrender to the Indenture Trustee of the typewritten Notes representing the
Book-Entry Notes by the Clearing Agency, accompanied by registration
instructions, the Issuer shall execute and the Indenture Trustee shall
authenticate the Definitive Notes in accordance with the instructions of the
Clearing Agency. None of the Issuer, the Note Registrar or the Indenture
Trustee shall be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be fully protected in relying on, such
instructions. Upon the issuance of Definitive Notes, the Indenture Trustee
shall recognize the holders of the Definitive Notes as Noteholders.
ARTICLE III
Covenants
SECTION 3.01. Payment to Noteholders. The Issuer will duly and
punctually pay the principal of interest, if any, on the Notes in accordance
with the terms of the Notes and this Indenture. Without limiting the
foregoing, subject to Section 8.02(d), the Issuer will cause to be distributed
to the Senior Noteholders and the Subordinate Noteholders in accordance with
the Administration Agreement and Section 8.02 hereof that portion of the
amounts on deposit in the Trust Accounts on a Quarterly Payment Date which the
Noteholders are entitled to receive pursuant to the Administration Agreement.
Amounts properly withheld under the Code by any Person from a payment to any
Noteholder of interest and/or principal shall be considered as having been
paid by the Issuer to such Noteholder for all purposes of this Indenture.
SECTION 3.02. Maintenance of Office or Agency. The Issuer will
maintain in the Borough of Manhattan, The City of New York, or in such other
location within the United States as the Issuer shall disclose to the
Indenture Trustee in writing, an office or agency where Notes may be
surrendered for registration of transfer or exchange, and where notices and
demands to or upon the Issuer in respect of the Notes and this Indenture may
be served. The Issuer hereby initially appoints the Indenture Trustee to serve
as its agent for the foregoing purposes. The Issuer will give prompt written
notice to the Indenture Trustee of the location, and of any change in the
location, of any such office or agency. If at any time the Issuer shall fail
to maintain any such office or agency or shall fail to furnish the Indenture
Trustee with the address thereof, such surrenders, notices and demands may be
made or served at the Corporate Trust Office, and the Issuer hereby appoints
the Indenture Trustee as its agent to receive all such surrenders, notices and
demands.
SECTION 3.03. Money for Payments to Be Held in Trust. As provided in
Section 8.02, all payments of amounts due and payable with respect to any
Notes that are to be made from amounts distributed from the Collection Account
or any other Trust Account shall be made on behalf of the Issuer by the
Indenture Trustee or by another Paying Agent, and no amounts so
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distributed for payments of Notes shall be paid over to the Issuer except as
provided in this Section.
On or before the Business Day next preceding each Quarterly Payment
Date and Redemption Date, the Issuer shall distribute or cause to be
distributed to the Indenture Trustee (or any other Paying Agent) an aggregate
sum sufficient to pay the amounts then becoming due under the Notes, such sum
to be held in trust for the benefit of the Persons entitled thereto and
(unless the Paying Agent is the Indenture Trustee) shall promptly notify the
Indenture Trustee and any Swap Counterparties of its action or failure so to
act.
The Issuer will cause each Paying Agent other than the Indenture
Trustee to execute and deliver to the Indenture Trustee an instrument in which
such Paying Agent shall agree with the Indenture Trustee (and if the Indenture
Trustee acts as Paying Agent, it hereby so agrees), subject to the provisions
of this Section, that such Paying Agent will:
(i) hold all sums held by it for the payment of amounts due
with respect to the Notes in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided and pay such sums to such
Persons as herein provided;
(ii) give the Indenture Trustee and any Swap Counterparties
written notice of any default by the Issuer of which it has actual
knowledge (or any other obligor upon the Notes) in the making of any
payment required to be made with respect to the Notes;
(iii) at any time during the continuance of any such
default, upon the written request of the Indenture Trustee, forthwith
pay to the Indenture Trustee all sums so held in trust by such Paying
Agent;
(iv) immediately resign as a Paying Agent and forthwith pay
to the Indenture Trustee all sums held by it in trust for the payment
of Notes if at any time it ceases to meet the standards required to
be met by a Paying Agent at the time of its appointment; and
(v) comply with all requirements of the Code with respect to
the withholding from any payments made by it on any Notes of any
applicable withholding taxes imposed thereon and with respect to any
applicable reporting requirements in connection therewith.
The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by
Issuer Order direct any Paying Agent to pay to the Indenture Trustee all sums
held in trust by such Paying Agent, such sums to be held by the Indenture
Trustee upon the same trusts as those upon which the sums were held by such
Paying Agent; and upon such payment by any Paying Agent to the Indenture
Trustee, such Paying Agent shall be released from all further liability with
respect to such money.
Subject to applicable laws with respect to escheat of funds, any
money held by the Indenture Trustee or any Paying Agent in trust for the
payment of any amount due with respect to any Note and remaining unclaimed for
two years after such amount has become due and
15
payable shall be discharged from such trust and be paid to the Issuer on
Issuer Request; and the Noteholder thereof shall thereafter, as an unsecured
general creditor, look only to the Issuer for payment thereof (but only to the
extent of the amounts so paid to the Issuer), and all liability of the
Indenture Trustee or such Paying Agent with respect to such trust money shall
thereupon cease; provided, however, that the Indenture Trustee or such Paying
Agent, before being required to make any such repayment, shall at the expense
and direction of the Issuer cause to be published once, in a newspaper
published in the English language, customarily published on each Business Day
and of general circulation in The City of New York, notice that such money
remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such publication, any unclaimed balance of
such money then remaining will be repaid to the Issuer. The Indenture Trustee
shall also adopt and employ, at the expense of the Issuer, any other
reasonable means of notification of such repayment (including mailing notice
of such repayment to Noteholders whose Notes have been called but have not
been surrendered for redemption or whose right to or interest in monies due
and payable but not claimed is determinable from the records of the Indenture
Trustee or of any Paying Agent, at the last address of record for each such
Noteholder).
SECTION 3.04. Existence. The Issuer will keep in full effect its
existence, rights and franchises as a trust under the laws of the State of
Delaware (unless it becomes, or any successor Issuer hereunder is or becomes,
organized under the laws of any other State or of the United States of
America, in which case the Issuer will keep in full effect its existence,
rights and franchises under the laws of such other jurisdiction) and will
obtain and preserve its qualification to do business in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes, the Collateral and each other
instrument or agreement included in the Indenture Trust Estate.
SECTION 3.05. Protection of Indenture Trust Estate. The Issuer will
from time to time execute and deliver all such supplements and amendments
hereto and all such financing statements, continuation statements, instruments
of further assurance and other instruments, and will take such other action
necessary or advisable to:
(i) maintain or preserve the lien and security interest (and
the priority thereof) of this Indenture or carry out more effectively
the purposes hereof;
(ii) perfect, publish notice of or protect the validity of
any Grant made or to be made by this Indenture;
(iii) enforce any of the Collateral; or
(iv) preserve and defend title to the Indenture Trust Estate
and the rights of the Indenture Trustee, any Swap Counterparties and
the Noteholders in such Indenture Trust Estate against the claims of
all persons and parties. It shall be the responsibility of the Issuer
to prepare such instruments.
The Issuer hereby designates the Indenture Trustee its agent and
attorney-in-fact to execute any financing statement, continuation statement or
other instrument required to be executed pursuant to this Section.
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SECTION 3.06. Opinions as to Indenture Trust Estate. (a) On the
Closing Date, the Issuer shall furnish to the Indenture Trustee and any Swap
Counterparties an Opinion of Counsel either stating that, in the opinion of
such counsel, such action has been taken with respect to the recording and
filing of this Indenture, any indentures supplemental hereto, and any other
requisite documents, and with respect to the execution and filing of any
financing statements and continuation statements, as are necessary to perfect
and make effective the lien and security interest of this Indenture and
reciting the details of such action, or stating that, in the opinion of such
counsel, no such action is necessary to make such lien and security interest
effective.
(b) On or before [o] in each calendar year, beginning in 2003, the
Issuer shall furnish to the Indenture Trustee and any Swap Counterparties an
Opinion of Counsel either stating that, in the opinion of such counsel, such
action has been taken with respect to the recording, filing, re-recording and
refiling of this Indenture, any indentures supplemental hereto and any other
requisite documents and with respect to the execution and filing of any
financing statements and continuation statements as are necessary to maintain
the lien and security interest created by this Indenture and reciting the
details of such action or stating that in the opinion of such counsel no such
action is necessary to maintain such lien and security interest. Such Opinion
of Counsel shall also describe the recording, filing, re-recording and
refiling of this Indenture, any indentures supplemental hereto and any other
requisite documents and the execution and filing of any financing statements
and continuation statements that will, in the opinion of such counsel, be
required to maintain the lien and security interest of this Indenture until
[o] in the following calendar year.
SECTION 3.07. Performance of Obligations; Servicing of Student Loans.
(a) The Issuer will not take any action and will use its best efforts not to
permit any action to be taken by others that would release any Person from any
of such Person's material covenants or obligations under any instrument or
agreement included in the Indenture Trust Estate or that would result in the
amendment, hypothecation, subordination, termination or discharge of, or
impair the validity or effectiveness of, any such instrument or agreement,
except as expressly provided in this Indenture, the Loan Sale Agreement, the
Servicing Agreement or such other instrument or agreement.
(b) The Issuer may contract with other Persons to assist it in
performing its duties under this Indenture, and any performance of such duties
by a Person identified to the Indenture Trustee and any Swap Counterparties in
an Officers' Certificate of the Issuer shall be deemed to be action taken by
the Issuer. Initially, the Issuer has contracted with the Servicer and the
Administrator to assist the Issuer in performing its duties under this
Indenture.
(c) The Issuer will punctually perform and observe all its
obligations and agreements contained in this Indenture, the other Basic
Documents and in the instruments and agreements included in the Indenture
Trust Estate, including filing or causing to be filed all UCC financing
statements and continuation statements required to be filed by the terms of
this Indenture, the Loan Sale Agreement and the Servicing Agreement in
accordance with and within the time periods provided for herein and therein.
Except as otherwise expressly provided therein, the Issuer shall not waive,
amend, modify, supplement or terminate any Basic Document or any provision
thereof without the consent of the Indenture Trustee or the Noteholders of at
least a
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majority of the Outstanding Amount of the Notes (and, in either such case, any
Swap Counterparties).
(d) If the Issuer shall have knowledge of the occurrence of a
Servicer Default under the Servicing Agreement or an Administrator Default
under the Administration Agreement, the Issuer shall promptly notify the
Indenture Trustee, the Rating Agencies and any Swap Counterparties thereof,
and shall specify in such notice the action, if any, the Issuer is taking with
respect to such default. If a Servicer Default shall arise from the failure of
the Servicer to perform any of its duties or obligations under the Servicing
Agreement with respect to the Financed Student Loans, the Issuer shall take
all reasonable steps available to it to enforce its rights under the Basic
Documents in respect of such failure.
(e) As promptly as possible after the giving of notice of termination
to the Servicer of the Servicer's rights and powers pursuant to Section 6.01
of the Servicing Agreement, the Issuer shall appoint a successor servicer (the
"Successor Servicer"), and such Successor Servicer shall accept its
appointment by a written assumption in a form acceptable to the Indenture
Trustee. In the event that a Successor Servicer has not been appointed and
accepted its appointment at the time when the Servicer ceases to act as
Servicer, the Indenture Trustee without further action shall automatically be
appointed the Successor Servicer. The Indenture Trustee may resign as the
Servicer by giving written notice of such resignation to the Issuer and any
Swap Counterparties and in such event will be released from such duties and
obligations, such release not to be effective until the date a new servicer
enters into an agreement with the Issuer as provided below; provided, however,
that nothing herein shall require or permit the Indenture Trustee to act as
Servicer, or otherwise service the Financed Student Loans, in violation of the
Higher Education Act. Upon delivery of any such notice to the Issuer, the
Issuer shall obtain a new servicer as the Successor Servicer under the
Servicing Agreement. Any Successor Servicer other than the Indenture Trustee
shall (i) be an established institution (A) that satisfies any requirements of
the Higher Education Act applicable to servicers, (B) the appointment of which
satisfies the Rating Agency Condition and (C) the regular business includes
the servicing or administration of student loans and (ii) enter into a
servicing agreement with the Issuer having substantially the same provisions
as the provisions of the Servicing Agreement applicable to the Servicer. If
within 60 days after the delivery of the notice referred to above, the Issuer
shall not have obtained such a new servicer, the Indenture Trustee may
appoint, or may petition a court of competent jurisdiction to appoint, a
Successor Servicer; provided, however, that such right to appoint or to
petition for the appointment of any such Successor Servicer shall in no event
relieve the Indenture Trustee from any obligations otherwise imposed on it
under the Basic Documents until such Successor Servicer has in fact assumed
such appointment. In connection with any such appointment, the Indenture
Trustee may make such arrangements for the compensation of such Successor
Servicer as it, any Swap Counterparties and such Successor Servicer shall
agree, subject to the limitations set forth below and in the Servicing
Agreement, and in accordance with Section 6.02 of the Servicing Agreement, the
Issuer shall enter into an agreement with such Successor Servicer for the
servicing of the Financed Student Loans (such agreement to be in form and
substance satisfactory to the Indenture Trustee). If the Indenture Trustee
shall succeed as provided herein to the Servicer's duties as servicer with
respect to the Financed Student Loans, it shall do so in its individual
capacity and not in its capacity as Indenture Trustee and, accordingly, the
provisions of Article VI hereof shall be inapplicable to the Indenture Trustee
in its duties as the successor to the Servicer and the servicing of the
18
Financed Student Loans. In case the Indenture Trustee shall become successor
to the Servicer under the Servicing Agreement, the Indenture Trustee shall be
entitled to appoint as Servicer any one of its affiliates, provided that such
appointment shall not affect or alter in any way the liability of the
Indenture Trustee as a successor for the performance of the duties and
obligations of the Servicer in accordance with the terms hereof.
Notwithstanding anything else herein to the contrary, in no event
shall the Indenture Trustee be liable for any servicing fee or for any
differential in the amount of the servicing fee paid hereunder and the amount
necessary to induce any Successor Servicer to act as Successor Servicer under
the Servicing Agreement and the transactions set forth or provided for
therein.
(f) Upon any termination of the Servicer's rights and powers pursuant
to the Servicing Agreement, the Issuer shall promptly notify the Indenture
Trustee. As soon as a Successor Servicer is appointed, the Issuer shall notify
the Indenture Trustee of such appointment, specifying in such notice the name
and address of such Successor Servicer.
(g) Without derogating from the absolute nature of the assignment
granted to the Indenture Trustee under this Indenture or the rights of the
Indenture Trustee hereunder, the Issuer agrees that it will not, without the
prior written consent of the Indenture Trustee or the Noteholders of at least
a majority in Outstanding Amount of the Notes (and, in either such case, any
Swap Counterparties), amend, modify, waive, supplement, terminate or
surrender, or agree to any amendment, modification, supplement, termination,
waiver or surrender of, the terms of any Collateral or the Basic Documents,
except to the extent otherwise provided in the Servicing Agreement, or waive
timely performance or observance by the Servicer, the Seller, the Issuer, the
Administrator or the Eligible Lender Trustee under the Loan Sale Agreement,
the Servicing Agreement or the Administration Agreement; provided, however,
that no such amendment shall (i) increase or reduce in any manner the amount
of, or accelerate or delay the timing of, distributions that are required to
be made for the benefit of the Noteholders, or (ii) reduce the aforesaid
percentage of the Notes which are required to consent to any such amendment,
without the consent of the Noteholders of all the Outstanding Notes. If any
such amendment, modification, supplement or waiver shall be so consented to,
the Issuer agrees, promptly following a request by the Indenture Trustee or
any Swap Counterparty to do so, to execute and deliver, in its own name and at
its own expense, such agreements, instruments, consents and other documents as
the Indenture Trustee or any Swap Counterparties may deem necessary or
appropriate in the circumstances.
SECTION 3.08. Negative Covenants. So long as any Notes are
Outstanding, the Issuer shall not:
(i) except as expressly permitted by this Indenture or any
other Basic Document, sell, transfer, exchange or otherwise dispose
of any of the properties or assets of the Issuer, including those
included in the Indenture Trust Estate, unless directed to do so by
the Indenture Trustee (which direction the Indenture Trustee shall
not give without the prior written consent of each of the Rating
Agencies);
(ii) claim any credit on, or make any deduction from the
principal or interest payable in respect of, the Notes (other than
amounts properly withheld from such
19
payments under the Code or applicable state law) or assert any claim
against any present or former Noteholder by reason of the payment of
the taxes levied or assessed upon any part of the Indenture Trust
Estate; or
(iii) (A) permit the validity or effectiveness of this
Indenture to be impaired, or permit the lien of this Indenture to be
amended, hypothecated, subordinated, terminated or discharged, or
permit any Person to be released from any covenants or obligations
with respect to the Notes under this Indenture except as may be
expressly permitted hereby, (B) permit any lien, charge, excise,
claim, security interest, mortgage or other encumbrance (other than
the lien of this Indenture) to be created on or extend to or
otherwise arise upon or burden the Indenture Trust Estate or any part
thereof or any interest therein or the proceeds thereof (other than
tax liens and other liens that arise by operation of law, in each
case arising solely as a result of an action or omission of the
related Obligor, and other than as expressly permitted by the Basic
Documents) or (C) permit the lien of this Indenture not to constitute
a valid first priority (other than with respect to any such tax or
other lien) security interest in the Indenture Trust Estate.
SECTION 3.09. Annual Statement as to Compliance. The Issuer will
deliver to the Indenture Trustee and any Swap Counterparties, within 120 days
after the end of each fiscal year of the Issuer (commencing with the fiscal
year 2001), an Officers' Certificate of the Issuer stating that:
(i) a review of the activities of the Issuer during such
year and of performance under this Indenture has been made under such
Authorized Officers' supervision; and
(ii) to the best of such Authorized Officers' knowledge,
based on such review, the Issuer has complied with all conditions and
covenants under this Indenture throughout such year, or, if there has
been a default in the compliance of any such condition or covenant,
specifying each such default known to such Authorized Officers and
the nature and status thereof.
SECTION 3.10. Issuer May Consolidate, etc. Only on Certain Terms. (a)
The Issuer shall not consolidate or merge with or into any other Person,
unless:
(i) the Person (if other than the Issuer) formed by or
surviving such consolidation or merger shall be a Person organized
and existing under the laws of the United States of America or any
State and shall expressly assume, by an indenture supplemental
hereto, executed and delivered to the Indenture Trustee and any Swap
Counterparties, in form satisfactory to the Indenture Trustee and any
Swap Counterparties, the due and punctual payment of the principal
of, and interest on and with respect to all Notes and the performance
or observance of every agreement and covenant of this Indenture on
the part of the Issuer to be performed or observed, all as provided
herein;
(ii) immediately after giving effect to such transaction, no
Event of Default shall have occurred and be continuing;
20
(iii) the Rating Agency Condition shall have been satisfied
with respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel
(and shall have delivered copies thereof to the Indenture Trustee and
any Swap Counterparties) to the effect that such transaction will not
have any material adverse tax consequence to the Issuer or any
Noteholder;
(v) any action as is necessary to maintain the lien and
security interest created by this Indenture shall have been taken;
and
(vi) the Issuer shall have delivered to the Indenture
Trustee and any Swap Counterparties an Officers' Certificate of the
Issuer and an Opinion of Counsel each stating that such consolidation
or merger and such supplemental indenture comply with this Article
III and that all conditions precedent herein provided for relating to
such transaction have been complied with (including any filing
required by the Exchange Act).
(b) The Issuer shall not convey or transfer all or substantially all
its properties or assets, including those included in the Indenture Trust
Estate, to any Person, unless:
(i) the Person that acquires by conveyance or transfer the
properties and assets of the Issuer the conveyance or transfer of
which is hereby restricted shall (A) be a United States citizen or a
Person organized and existing under the laws of the United States of
America or any State, (B) expressly assumes, by an indenture
supplemental hereto, executed and delivered to the Indenture Trustee,
in form satisfactory to the Indenture Trustee and any Swap
Counterparties, the due and punctual payment of the principal of, and
interest on and with respect to all Notes and the performance or
observance of every agreement and covenant of this Indenture on the
part of the Issuer to be performed or observed, all as provided
herein, (C) expressly agrees by means of such supplemental indenture
that all right, title and interest so conveyed or transferred shall
be subject and subordinate to the rights of Noteholders and any Swap
Counterparties, (D) unless otherwise provided in such supplemental
indenture, expressly agrees to indemnify, defend and hold harmless
the Issuer and any Swap Counterparties against and from any loss,
liability or expense arising under or related to this Indenture and
the Notes and (E) expressly agrees by means of such supplemental
indenture that such Person (or if a group of Persons, then one
specified Person) shall make all filings with the Commission (and any
other appropriate Person) required by the Exchange Act in connection
with the Notes;
(ii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied
with respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel
(and shall have delivered copies thereof to the Indenture Trustee and
any Swap Counterparties) to the
21
effect that such transaction will not have any material adverse tax
consequence to the Issuer or any Noteholder;
(v) any action as is necessary to maintain the lien and
security interest created by this Indenture shall have been taken;
(vi) the Issuer shall have delivered to the Indenture
Trustee and any Swap Counterparties an Officers' Certificate of the
Issuer and an Opinion of Counsel each stating that such conveyance or
transfer and such supplemental indenture comply with this Article III
and that all conditions precedent herein provided for relating to
such transaction have been complied with (including any filing
required by the Exchange Act); and
(vii) any Swap Counterparties shall have given their prior
written consent.
SECTION 3.11. Successor or Transferee. (a) Upon any consolidation or
merger of the Issuer in accordance with Section 3.10(a), the Person formed by
or surviving such consolidation or merger (if other than the Issuer) shall
succeed to, and be substituted for, and may exercise every right and power of,
the Issuer under this Indenture with the same effect as if such Person had
been named as the Issuer herein.
(b) Upon a conveyance or transfer of all the assets and properties of
the Issuer pursuant to Section 3.10(b), Xxxxx Fargo Student Loan Trust
2001-1will be released from every covenant and agreement of this Indenture to
be observed or performed on the part of the Issuer with respect to the Notes
immediately upon the delivery by the Issuer of written notice to the Indenture
Trustee stating that Xxxxx Fargo Student Loan Trust 2001-1 is to be so
released.
SECTION 3.12. No Other Business. Except as contemplated by this
Indenture or the other Basic Documents, the Issuer shall not engage in any
business other than financing, purchasing, owning, selling and managing the
Financed Student Loans, and originating Consolidation Loans during the Funding
Period, in the manner contemplated by this Indenture and the other Basic
Documents and activities incidental thereto.
SECTION 3.13. No Borrowing. Except as contemplated by this Indenture
or the other Basic Documents, the Issuer shall not issue, incur, assume,
guarantee or otherwise become liable, directly or indirectly, for any
indebtedness except for the Notes.
SECTION 3.14. Obligations of Servicer and Administrator. The Issuer
shall cause the Servicer to comply with Sections 3.07, 3.08, 3.09 and 3.10 of
the Servicing Agreement and shall cause the Administrator to comply with
Section 2(g) of the Administration Agreement.
SECTION 3.15. Guarantees, Loans, Advances and Other Liabilities.
Except as contemplated by the Basic Documents or this Indenture, the Issuer
shall not make any loan or advance or credit to, or guarantee (directly or
indirectly or by an instrument having the effect of assuring another's payment
or performance on any obligation or capability of so doing or otherwise),
endorse or otherwise become contingently liable, directly or indirectly, in
connection with the obligations, stocks or dividends of, or own, purchase,
repurchase or acquire (or agree
22
contingently to do so) any stock, obligations, assets or securities of, or any
other interest in, or make any capital contribution to, any other Person.
SECTION 3.16. Capital Expenditures. The Issuer shall not make any
expenditure (by long-term or operating lease or otherwise) for capital assets
(either realty or personalty).
SECTION 3.17. Restricted Payments. The Issuer shall not, directly or
indirectly, (i) pay any dividend or make any distribution (by reduction of
capital or otherwise), whether in cash, property, securities or a combination
thereof, to the Eligible Lender Trustee or any owner of a beneficial interest
in the Issuer or otherwise with respect to any ownership or equity interest or
security in or of the Issuer or to the Servicer or the Administrator, (ii)
redeem, purchase, retire or otherwise acquire for value any such ownership or
equity interest or security or (iii) set aside or otherwise segregate any
amounts for any such purpose; provided, however, that the Issuer may make, or
cause to be made, distributions to the Servicer, the Eligible Lender Trustee,
the Indenture Trustee, the Noteholders, the Administrator and the Seller as
contemplated by, and to the extent funds are available for such purpose under,
this Indenture, the Loan Sale Agreement, the Servicing Agreement or the
Administration Agreement. The Issuer will not, directly or indirectly, make
payments to or distributions from the Collection Account except in accordance
with this Indenture and the other Basic Documents.
SECTION 3.18. Notice of Events of Default. The Issuer shall give the
Indenture Trustee, the Rating Agencies and any Swap Counterparties prompt
written notice of each Event of Default hereunder and each default on the part
of the Seller, the Servicer or the Administrator of its obligations under the
Loan Sale Agreement, the Servicing Agreement or the Administration Agreement.
In addition, the Issuer shall deliver to the Indenture Trustee, within five
days after the occurrence thereof, written notice in the form of an Officers'
Certificate of the Issuer of any event which with the giving of notice and the
lapse of time would become an Event of Default under Section 5.01(iii), its
status and what action the Issuer is taking or proposes to take with respect
thereto. The Indenture Trustee shall provide notice to the Noteholders and any
Swap Counterparties of each default or other event of which it receives notice
pursuant to this Section 3.18, promptly after receipt of such Notice.
SECTION 3.19. Further Instruments and Acts. Upon request of the
Indenture Trustee or any Swap Counterparties, the Issuer will execute and
deliver such further instruments and do such further acts as may be reasonably
necessary or proper to carry out more effectively the purpose of this
Indenture.
SECTION 3.20. Removal of Administrator. So long as any Notes are
Outstanding, the Issuer shall not remove the Administrator unless the Rating
Agency Condition shall have been satisfied in connection with such removal.
ARTICLE IV
Satisfaction and Discharge
SECTION 4.01. Satisfaction and Discharge of Indenture. This Indenture
shall cease to be of further effect with respect to the Notes except as to (i)
rights of registration of transfer and
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exchange, (ii) substitution of mutilated, destroyed, lost or stolen Notes,
(iii) rights of Noteholders to receive payments of principal thereof and
interest thereon, (iv) Sections 3.03, 3.04, 3.05, 3.08, 3.10, 3.12, 3.13,
3.15, 3.16 and 3.17, (v) the rights, obligations and immunities of the
Indenture Trustee hereunder (including the rights of the Indenture Trustee
under Section 6.07 and the obligations of the Indenture Trustee under Section
4.02) and (vi) the rights of Noteholders and any Swap Counterparties as
beneficiaries hereof with respect to the property so deposited with the
Indenture Trustee payable to all or any of them, and the Indenture Trustee, on
demand of and at the expense of the Issuer, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture with respect to the
Notes, when:
(A) either
(1) all Notes theretofore authenticated and
delivered (other than (i) Notes that have been destroyed,
lost or stolen and that have been replaced or paid as
provided in Section 2.05 and (ii) Notes for whose payment
money has theretofore been deposited in trust or segregated
and held in trust by the Issuer and thereafter repaid to the
Issuer or discharged from such trust, as provided in Section
3.03) have been delivered to the Indenture Trustee for
cancellation; or
(2) all Notes not theretofore delivered to the
Indenture Trustee for cancellation
(i) have become due and payable,
(ii) will become due and payable at the
Class A-1 Note Final Maturity Date, the Class A-2
Note Final Maturity Date or the Subordinate Note
Final Maturity Date, as the case may be, within one
year, or
(iii) are to be called for redemption
within one year under arrangements satisfactory to
the Indenture Trustee for the giving of notice of
redemption by the Indenture Trustee in the name,
and at the expense, of the Issuer,
and the Issuer, in the case of (i), (ii) or (iii)
above, has irrevocably deposited or caused to be irrevocably
deposited with the Indenture Trustee cash or direct
obligations of or obligations guaranteed by the United
States of America (which will mature prior to the date such
amounts are payable), in trust for such purpose, in an
amount sufficient to pay and discharge the entire
indebtedness on such Notes not theretofore delivered to the
Indenture Trustee for cancellation as of such day of
discharge or when due on the Class A-1 Note Final Maturity
Date, the Class A-2 Note Final Maturity Date or the
Subordinate Note Final Maturity Date, as the case may be;
(B) the Issuer has paid or caused to be paid all other sums
payable hereunder and under any Swap Agreements by the Issuer; and
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(C) the Issuer has delivered to the Indenture Trustee and
any Swap Counterparties an Officers' Certificate of the Issuer, an
Opinion of Counsel and (if required by the TIA or the Indenture
Trustee) an Independent Certificate from a firm of certified public
accountants, each meeting the applicable requirements of Section
11.01(a) and, subject to Section 11.02, each stating that all
conditions precedent herein provided for relating to the satisfaction
and discharge of this Indenture have been complied with.
SECTION 4.02. Application of Trust Money. All monies deposited with
the Indenture Trustee pursuant to Section 4.01 hereof shall be held in trust
and applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent, as the
Indenture Trustee may determine, to the Noteholders of the particular Notes
for the payment or redemption of which such monies have been deposited with
the Indenture Trustee, of all sums due and to become due thereon for principal
and interest and to any Swap Counterparties of all amounts due to any Swap
Counterparties under any Swap Agreements; but such monies need not be
segregated from other funds except to the extent required herein, in the
Servicing Agreement or the Administration Agreement or required by law.
SECTION 4.03. Repayment of Monies Held by Paying Agent. In connection
with the satisfaction and discharge of this Indenture with respect to the
Notes, all monies then held by any Paying Agent other than the Indenture
Trustee under the provisions of this Indenture with respect to such Notes
shall, upon demand of the Issuer, be paid to the Indenture Trustee to be held
and applied according to Section 3.03 and thereupon such Paying Agent shall be
released from all further liability with respect to such monies.
SECTION 4.04. Auction of Financed Student Loans. The Indenture
Trustee shall offer the Financed Student Loans for sale, and shall accept bids
on behalf of the Issuer for such purpose as of the last day of the Collection
Period that immediately follows the first Collection Period as of which the
Pool Balance is less than or equal to 10% of the sum of the Initial Pool
Balance plus the Prefunded Account Closing Date Deposit. If with respect to
the last date of the Collection Period as of which such offer is made, the
Indenture Trustee receives no bid to purchase the Financed Student Loans, or
no bid that it may, as specified below, accept, the Indenture Trustee may at
its discretion, but shall not be obligated to, offer the Financed Student
Loans for sale as of the last day of each, or any, of the succeeding
Collection Periods until a bid is received that may, as specified below, be
accepted by the Indenture Trustee. With respect to any attempt to arrange for
the purchase of the Financed Student Loans, the Indenture Trustee shall accept
the highest bid submitted so long as (i) at least two bids (one of which is
from a Person that is not the Seller or an Affiliate of the Seller) to
purchase the Financed Student Loans as of the last day of the applicable
Collection Period are received and (ii) the highest such bid is at least equal
to the Minimum Purchase Price. Any attempt to arrange for the purchase of the
Financed Student Loans and the consummation of any such sale shall be
conducted by the Indenture Trustee in a commercially reasonable manner. The
Indenture Trustee shall provide notice of any such attempt at least 60 days
prior to the last day of the related Collection Period to the Seller, the
Depositor, the Servicer, the Eligible Lender Trustee, the Rating Agencies, any
Swap Counterparties and each Noteholder, and any such Person or their
respective Affiliates or any other Person may submit a timely bid for the
purchase of the Financed Student Loans.
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ARTICLE V
Remedies
SECTION 5.01. Events of Default. "Event of Default", wherever used
herein, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of
any court or any order, rule or regulation of any administrative or
governmental body):
(i) default in the payment by the Issuer of any interest on
any Note when the same becomes due and payable, and such default
shall continue for a period of five days; or
(ii) default in the payment by the Issuer of the principal
of any Note when the same becomes due and payable; or
(iii) default in the observance or performance of any
covenant or agreement of the Issuer made in this Indenture (other
than a covenant or agreement, a default in the observance or
performance of which is elsewhere in this Section specifically dealt
with), or any representation or warranty of the Issuer made in this
Indenture or in any certificate or other writing delivered pursuant
hereto or in connection herewith proving to have been incorrect in
any material respect as of the time when the same shall have been
made which default materially and adversely affects the rights of the
Noteholders, and such default shall continue or not be cured, or the
circumstance or condition in respect of which such misrepresentation
or warranty was incorrect shall not have been eliminated or otherwise
cured, for a period of 30 (or, in the circumstances provided below,
90) days after there shall have been given, by registered or
certified mail, to the Issuer by the Indenture Trustee or to the
Issuer and the Indenture Trustee by the Noteholders of at least 25%
of the Outstanding Amount of the Notes, a written notice specifying
such default or incorrect representation or warranty and requiring it
to be remedied and stating that such notice is a notice of Default
hereunder; provided, however, that, if at the end of such 30-day
period, the Indenture Trustee determines that a good faith effort to
cure or eliminate the Default has commenced, the Indenture Trustee
may extend such 30-day period to 90 days; or
(iv) the filing of a decree or order for relief by a court
having jurisdiction in the premises in respect of the Issuer or any
substantial part of the Indenture Trust Estate in an involuntary case
under any applicable federal or state bankruptcy, insolvency or other
similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar
official of the Issuer or for any substantial part of the Indenture
Trust Estate, or ordering the winding-up or liquidation of the
Issuer's affairs, and such decree or order shall remain unstayed and
in effect for a period of 60 consecutive days; or
(v) the commencement by the Issuer of a voluntary case under
any applicable federal or state bankruptcy, insolvency or other
similar law now or hereafter in effect, or
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the consent by the Issuer to the entry of an order for relief in an
involuntary case under any such law, or the consent by the Issuer to
the appointment or taking possession by a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official of the
Issuer or for any substantial part of the Indenture Trust Estate, or
the making by the Issuer of any general assignment for the benefit of
creditors, or the failure by the Issuer generally to pay its debts as
such debts become due, or the taking of action by the Issuer in
furtherance of any of the foregoing.
SECTION 5.02. Acceleration of Maturity; Rescission and Annulment. If
an Event of Default should occur, then and in every such case the Indenture
Trustee or the Noteholders of Notes representing not less than a majority of
the Outstanding Amount of the Notes may declare all the Notes to be
immediately due and payable, by a notice in writing to the Issuer and any Swap
Counterparties (and to the Indenture Trustee if given by Noteholders), and
upon any such declaration the unpaid principal amount of such Notes, together
with accrued and unpaid interest thereon through the date of acceleration,
shall become immediately due and payable.
At any time after such declaration of acceleration of maturity has
been made and before a judgment or decree for payment of the money due has
been obtained by the Indenture Trustee as hereinafter in this Article V
provided, the Noteholders of Notes representing a majority of the Outstanding
Amount of the Notes, by written notice to the Issuer and the Indenture
Trustee, may rescind and annul such declaration and its consequences if:
(i) the Issuer has paid or deposited with the Indenture
Trustee a sum sufficient to pay:
(A) all payments of principal of and interest on
all Notes and all other amounts that would then be due
hereunder or upon such Notes if the Event of Default giving
rise to such acceleration had not occurred; and
(B) all sums paid or advanced by the Indenture
Trustee hereunder plus all amounts owed to any Swap
Counterparties under the Basic Documents and the reasonable
compensation, expenses, disbursements and advances of the
Indenture Trustee, any Swap Counterparties and their
respective agents and counsel; and
(ii) all Events of Default, other than the nonpayment of the
principal of the Notes that has become due solely by such
acceleration, have been cured or waived as provided in Section 5.12.
No such rescission shall affect any subsequent default or impair any
right consequent thereto.
SECTION 5.03. Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee. (a) The Issuer covenants that if (i) default is made in the
payment of any interest on any Note when the same becomes due and payable, and
such default continues for a period of five days, or (ii) default is made in
the payment of the principal of or any installment of the principal of any
Note when the same becomes due and payable, the Issuer will, upon demand of
the Indenture Trustee, pay to it, for the benefit of the Noteholders and any
Swap Counterparties, the whole amount then due and payable on such Notes for
principal and interest with interest
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upon the overdue principal, and, to the extent payment at such rate of
interest shall be legally enforceable, upon overdue installments of interest,
at the rate specified in Section 2.07 and all amounts due under any Swap
Agreements and in addition thereto such further amount as shall be sufficient
to cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Indenture Trustee,
any Swap Counterparties and their respective agents and counsel.
(b) In case the Issuer shall fail forthwith to pay such amounts upon
such demand, the Indenture Trustee, in its own name and as trustee of an
express trust, may institute a Proceeding for the collection of the sums so
due and unpaid, and may prosecute such Proceeding to judgment or final decree,
and may enforce the same against the Issuer or other obligor upon such Notes
and collect in the manner provided by law out of the property of the Issuer or
other obligor upon such Notes, wherever situated, the monies adjudged or
decreed to be payable.
(c) If an Event of Default occurs and is continuing, the Indenture
Trustee may, as more particularly provided in Section 5.04, in its discretion,
proceed to protect and enforce its rights and the rights of the Noteholders,
by such appropriate Proceedings as the Indenture Trustee shall deem most
effective to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy or
legal or equitable right vested in the Indenture Trustee by this Indenture or
by law.
(d) In case there shall be pending, relative to the Issuer or any
other obligor upon the Notes or any Person having or claiming an ownership
interest in the Indenture Trust Estate, Proceedings under Title 11 of the
United States Code or any other applicable federal or state bankruptcy,
insolvency or other similar law, or in case a receiver, assignee or trustee in
bankruptcy or reorganization, liquidator, sequestrator or similar official
shall have been appointed for or taken possession of the Issuer or its
property or such other obligor or Person, or in case of any other comparable
judicial Proceeding relative to the Issuer or other obligor upon the Notes, or
to the creditors or property of the Issuer or such other obligor, the
Indenture Trustee, irrespective of whether the principal of any Notes shall
then be due and payable as therein expressed or by declaration or otherwise
and irrespective of whether the Indenture Trustee shall have made any demand
pursuant to the provisions of this Section, shall be entitled and empowered,
by intervention in such proceedings or otherwise:
(i) to file and prove a claim or claims for the whole amount
of principal and interest owing and unpaid in respect of the Notes
and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Indenture Trustee
(including any claim for reasonable compensation to the Indenture
Trustee and each predecessor Indenture Trustee, and their respective
agents, attorneys and counsel, and for reimbursement of all expenses
and liabilities incurred, and all advances made, by the Indenture
Trustee and each predecessor Indenture Trustee, except as a result of
negligence or bad faith) and of the Noteholders allowed in such
Proceeding;
(ii) unless prohibited by applicable law and regulations, to
vote on behalf of the Noteholders in any election of a trustee, a
standby trustee or Person performing similar functions in any such
Proceeding;
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(iii) to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute all
amounts received with respect to the claims of the Noteholders, any
Swap Counterparties and the Indenture Trustee on their behalf; and
(iv) to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the
claims of the Indenture Trustee, any Swap Counterparties or the
Noteholders allowed in any judicial Proceeding relative to the
Issuer, its creditors and its property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by each of such Noteholders to make
payments to the Indenture Trustee, and, in the event that the Indenture
Trustee shall consent to the making of payments directly to such Noteholders,
to pay to the Indenture Trustee such amounts as shall be sufficient to cover
reasonable compensation to the Indenture Trustee, each predecessor Indenture
Trustee and their respective agents, attorneys and counsel, and all other
expenses and liabilities incurred, and all advances made, by the Indenture
Trustee and each predecessor Indenture Trustee except as a result of
negligence or bad faith.
(e) Nothing herein contained shall be deemed to authorize the
Indenture Trustee to authorize or consent to or vote for or accept or adopt on
behalf of any Noteholder any plan of reorganization, arrangement, adjustment
or composition affecting the Notes or the rights of any Noteholder thereof or
to authorize the Indenture Trustee to vote in respect of the claim of any
Noteholder in any such proceeding except, as aforesaid, to vote for the
election of a trustee in bankruptcy or similar Person.
(f) All rights of action and of asserting claims under this
Indenture, or under any of the Notes, may be enforced by the Indenture Trustee
without the possession of any of the Notes or the production thereof in any
trial or other Proceeding relative thereto, and any such action or Proceeding
instituted by the Indenture Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment, subject to the
payment of the expenses, disbursements and compensation of the Indenture
Trustee, each predecessor Indenture Trustee and their respective agents and
attorneys, shall be for the benefit of the Noteholders and any Swap
Counterparties.
(g) In any Proceeding brought by the Indenture Trustee (and also any
Proceeding involving the interpretation of any provision of this Indenture to
which the Indenture Trustee shall be a party), the Indenture Trustee shall be
held to represent all the Noteholders, and it shall not be necessary to make
any Noteholder a party to any such Proceeding.
SECTION 5.04. Remedies; Priorities. (a) If an Event of Default shall
have occurred, the Indenture Trustee may or, upon the written request of
Noteholders of at least 51% of the Notes, shall do one or more of the
following (subject to Section 5.05):
(i) institute Proceedings in its own name and as trustee of
an express trust for the collection of all amounts then payable on
the Notes or under this Indenture with respect thereto, whether by
declaration or otherwise, enforce any judgment obtained, and collect
from the Issuer and any other obligor upon such Notes monies adjudged
due;
29
(ii) institute Proceedings from time to time for the
complete or partial foreclosure of this Indenture with respect to the
Indenture Trust Estate;
(iii) exercise any remedies of a secured party under the UCC
and take any other appropriate action to protect and enforce the
rights and remedies of the Indenture Trustee, any Swap Counterparties
and the Noteholders; and
(iv) sell the Indenture Trust Estate or any portion thereof
or rights or interests therein, at one or more public or private
sales called and conducted in any manner permitted by law;
provided, however, that the Indenture Trustee may not sell or otherwise
liquidate the Indenture Trust Estate following an Event of Default, other than
an Event of Default described in Section 5.01(i) or (ii), unless (A) the
Noteholders of 100% of the Outstanding Amount of the Notes and any Swap
Counterparties (but, in the case of any Swap Counterparties, only to the
extent that the Administrator directs the Indenture Trustee that any Swap
Counterparties would not receive all amounts due under any Swap Agreements)
consent thereto, (B) the proceeds of such sale or liquidation distributable to
the Noteholders are sufficient to discharge in full all amounts then due and
unpaid upon such Notes for principal and interest and under any Swap
Agreements or (C) the Indenture Trustee determines that the Indenture Trust
Estate will not continue to provide sufficient funds for the payment of
principal of and interest on the Notes as they would have become due if the
Notes had not been declared due and payable, and the Indenture Trustee obtains
the consent of Noteholders of 66-2/3% of the Outstanding Amount of the Notes
and any Swap Counterparties (but, in the case of any Swap Counterparties, only
to the extent that any Swap Counterparties would not receive all amounts due
under any Swap Agreements). In determining such sufficiency or insufficiency
with respect to clauses (B) and (C), the Indenture Trustee may, but need not,
obtain and rely upon an opinion of an Independent investment banking or
accounting firm of national reputation as to the feasibility of such proposed
action and as to the sufficiency of the Indenture Trust Estate for such
purpose.
(b) Following an Event of Default and an acceleration of the Notes,
the Indenture Trustee shall pay out the money or property in the following
order:
First: to the Indenture Trustee for amounts due under
Section 6.07;
Second: ratably, without preference or priority of any kind
(a) to the Senior Noteholders for amounts due and unpaid on the
Senior Notes for interest and (b) if the Trust is the Defaulting
Party (as such term is defined in any Swap Agreements) under any Swap
Agreements, to any Swap Counterparties for all amounts due to any
Swap Counterparties under any Swap Agreements (provided, however,
that to the extent that the Trust is the Defaulting Party with
respect to an Event of Default specified in Section 5 (a)(i) of a
Swap Agreement this priority shall apply only with respect to the
related Trust Swap Payment Amount (and not the remainder of the
related Termination Payment));
Third: to the Subordinate Noteholders for amounts due and
unpaid on the Subordinate Notes for interest, ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Subordinate Notes for interest;
30
Fourth: to the Senior Noteholders for amounts due and unpaid
on the Senior Notes for principal, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Senior Notes for principal;
Fifth: to the Subordinate Noteholders for amounts due and
unpaid (without regard to the Subordinate Note Trigger) on the
Subordinate Notes for interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Subordinate Notes (after giving effect to payments pursuant to clause
FOURTH above);
Sixth: to the Subordinate Noteholders for amounts due and
unpaid on the Subordinate Notes for principal, ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Subordinate Notes for principal;
Seventh: to the Servicer for due and unpaid Servicing Fees;
Eighth: to any Swap Counterparties for all amounts due under
any Swap Agreements, to the extent that such Swap Counterparty is the
Defaulting Party (as such term is defined in the related Swap
Agreement), the Early Termination Date (as such term is defined
therein) arises from a Termination Event or the Trust is the
Defaulting Party with respect to an Event of Default specified in
Section 5 (a)(i) of the related Swap Agreement (exclusive of any
Trust Swap Payment Amount paid pursuant to Clause SECOND hereof); and
Ninth: to the Issuer, for distribution in accordance with
the terms of the Administration Agreement.
The Indenture Trustee may fix a record date and payment date for any
payment to Noteholders pursuant to this Section. At least 15 days before such
record date, the Issuer shall mail to each Noteholder and the Indenture
Trustee a notice that states the record date, the payment date and the amount
to be paid.
SECTION 5.05. Optional Preservation of the Indenture Trust Estate. If
the Notes have been declared to be due and payable under Section 5.02
following an Event of Default and such declaration and its consequences have
not been rescinded and annulled, the Indenture Trustee may, but need not,
elect to maintain possession of the Indenture Trust Estate. It is the desire
of the parties hereto and the Noteholders that there be at all times
sufficient funds for the payment of principal of and interest on the Notes,
and the Indenture Trustee shall take such desire into account when determining
whether to maintain possession of the Indenture Trust Estate. In determining
whether to maintain possession of the Indenture Trust Estate, the Indenture
Trustee may, but need not, obtain and rely upon an opinion (which shall be
obtained at the expense of the Issuer) of an Independent investment banking or
accounting firm of national reputation as to the feasibility of such proposed
action and as to the sufficiency of the Indenture Trust Estate for such
purpose.
SECTION 5.06. Limitation of Suits. No Noteholder shall have any right
to institute any Proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless:
31
(i) such Noteholder has previously given written notice to
the Indenture Trustee of a continuing Event of Default;
(ii) the Noteholders of not less than 25% of the Outstanding
Amount of the Notes have made written request to the Indenture
Trustee to institute such Proceeding in respect of such Event of
Default in its own name as Indenture Trustee hereunder;
(iii) such Noteholder or Noteholders have offered to the
Indenture Trustee reasonable indemnity against the costs, expenses
and liabilities to be incurred in complying with such request;
(iv) the Indenture Trustee for 60 days after its receipt of
such notice, request and offer of indemnity has failed to institute
such Proceeding; and
(v) no direction inconsistent with such written request has
been given to the Indenture Trustee during such 60-day period by the
Noteholders of a majority of the Outstanding Amount of the Notes it
being understood and intended that no one or more Noteholders shall
have any right in any manner whatever by virtue of, or by availing
of, any provision of this Indenture to affect, disturb or prejudice
the rights of any other Noteholders or to obtain or to seek to obtain
priority or preference over any other Noteholders or to enforce any
right under this Indenture, except in the manner herein provided.
In the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Noteholders
pursuant to this Section 5.06, each representing less than a majority of the
Outstanding Amount of the Notes, the Indenture Trustee in its sole discretion
may determine what action, if any, shall be taken, notwithstanding any other
provisions of this Indenture.
SECTION 5.07. Unconditional Rights of Noteholders to Receive
Principal and Interest. Notwithstanding any other provisions in this
Indenture, any Noteholder shall have the right, which is absolute and
unconditional, to receive payment of the principal of and interest, if any, on
such Note on or after the respective due dates thereof expressed in such Note
or in this Indenture (or, in the case of redemption, on or after the
Redemption Date) and to institute suit for the enforcement of any such
payment, and such right shall not be impaired without the consent of such
Noteholder.
SECTION 5.08. Restoration of Rights and Remedies. If the Indenture
Trustee or any Noteholder has instituted any Proceeding to enforce any right
or remedy under this Indenture and such Proceeding has been discontinued or
abandoned for any reason or has been determined adversely to the Indenture
Trustee or to such Noteholder, then and in every such case the Issuer, the
Indenture Trustee and the Noteholders shall, subject to any determination in
such Proceeding, be restored severally and respectively to their former
positions hereunder, and thereafter all rights and remedies of the Indenture
Trustee and the Noteholders shall continue as though no such Proceeding had
been instituted.
SECTION 5.09. Rights and Remedies Cumulative. No right or remedy
herein conferred upon or reserved to the Indenture Trustee or to the
Noteholders is intended to be exclusive of any
32
other right or remedy, and every right and remedy shall, to the extent
permitted by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any
other appropriate right or remedy.
SECTION 5.10. Delay or Omission Not a Waiver. No delay or omission of
the Indenture Trustee or any Noteholder to exercise any right or remedy
accruing upon any Default or Event of Default shall impair any such right or
remedy or constitute a waiver of any such Default or Event of Default or an
acquiescence therein. Every right and remedy given by this Article V or by law
to the Indenture Trustee, to the Noteholders may be exercised from time to
time, and as often as may be deemed expedient, by the Indenture Trustee or the
Noteholders, as the case may be.
SECTION 5.11. Control by Noteholders. The Noteholders of a majority
of the Outstanding Amount of the Notes shall have the right to direct the
time, method and place of conducting any Proceeding for any remedy available
to the Indenture Trustee with respect to the Notes or exercising any trust or
power conferred on the Indenture Trustee; provided, however, that
(i) such direction shall not be in conflict with any rule of
law or with this Indenture;
(ii) subject to the express terms of Section 5.04, any
direction to the Indenture Trustee to sell or liquidate the Indenture
Trust Estate shall be by the Noteholders of 100% of the Outstanding
Amount of the Notes;
(iii) if the conditions set forth in Section 5.05 have been
satisfied and the Indenture Trustee elects to retain the Indenture
Trust Estate pursuant to such Section, then any direction to the
Indenture Trustee by Noteholders of less than 100% of the Outstanding
Amount of the Notes to sell or liquidate the Indenture Trust Estate
shall be of no force and effect; and
(iv) the Indenture Trustee may take any other action deemed
proper by the Indenture Trustee that is not inconsistent with such
direction;
and provided, further, that, subject to Section 6.01, the Indenture Trustee
need not take any action that it determines might involve it in liability or
might materially adversely affect the rights of any Noteholders not consenting
to such action.
SECTION 5.12. Waiver of Past Defaults. Prior to the time a judgment
or decree for payment of money due has been obtained as described in Section
5.02, the Noteholders of not less than a majority of the Outstanding Amount of
the Notes, with the prior written consent of the Swap Counterparties, if any,
may waive any past Default or Event of Default and its consequences except a
Default or Event of Default (a) in payment when due of principal of or
interest on any of the Notes or (b) in respect of a covenant or provision
hereof which cannot be modified or amended without the consent of each
Noteholder and any Swap Counterparties; provided, however, that all
Noteholders may waive events described in clauses (a) and (b)
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hereof. In the case of any such waiver, the Issuer, the Indenture Trustee and
the Noteholders shall be restored to their former positions and rights
hereunder, respectively; but no such waiver shall extend to any subsequent or
other Default or Event of Default or impair any right consequent thereto.
Upon any such waiver, such Default shall cease to exist and be deemed
to have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to be cured and not to have occurred, for every
purpose of this Indenture to the extent specified in such waiver but no such
waiver shall extend to any subsequent or other Default or Event of Default or
impair any right consequent thereto.
SECTION 5.13. Undertaking for Costs. All parties to this Indenture
agree, and each Noteholder by such Noteholder's acceptance of any Note shall
be deemed to have agreed, that any court may in its discretion require, in any
suit for the enforcement of any right or remedy under this Indenture, or in
any suit against the Indenture Trustee for any action taken, suffered or
omitted by it as Indenture Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may
in its discretion assess reasonable costs, including reasonable attorneys'
fees, against any party litigant in such suit, having due regard to the merits
and good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to (a) any suit instituted by the
Indenture Trustee, (b) any suit instituted by any Noteholder, or group of
Noteholders, in each case holding in the aggregate more than 10% of the
Outstanding Amount of the Notes or (c) any suit instituted by any Noteholder
for the enforcement of the payment of principal of or interest on any Note on
or after the respective due dates expressed in such Note and in this Indenture
(or, in the case of redemption, on or after the Redemption Date).
SECTION 5.14. Waiver of Stay or Extension Laws. The Issuer covenants
(to the extent that it may lawfully do so) that it will not at any time insist
upon, or plead or in any manner whatsoever, claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, that may affect the covenants or the performance of this
Indenture; and the Issuer (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that
it will not hinder, delay or impede the execution of any power herein granted
to the Indenture Trustee, but will suffer and permit the execution of every
such power as though no such law had been enacted.
SECTION 5.15. Action on Notes. The Indenture Trustee's right to seek
and recover judgment on the Notes or under this Indenture shall not be
affected by the seeking, obtaining or application of any other relief under or
with respect to this Indenture. Neither the lien of this Indenture nor any
rights or remedies of the Indenture Trustee or the Noteholders shall be
impaired by the recovery of any judgment by the Indenture Trustee against the
Issuer or by the levy of any execution under such judgment upon any portion of
the Indenture Trust Estate or upon any of the assets of the Issuer. Any money
or property collected by the Indenture Trustee shall be applied in accordance
with Section 5.04(b).
SECTION 5.16. Performance and Enforcement of Certain Obligations. (a)
Promptly following a request from the Indenture Trustee to do so and at the
Administrator's expense, the Issuer shall take all such lawful action as the
Indenture Trustee may request to compel or secure
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the performance and observance by the Seller, the Servicer, the Administrator
and any Swap Counterparties, as applicable, of each of their obligations to
the Issuer under or in connection with the Loan Sale Agreement, the Servicing
Agreement, the Administration Agreement and any Swap Agreements and to
exercise any and all rights, remedies, powers and privileges lawfully
available to the Issuer under or in connection with the Loan Sale Agreement,
the Servicing Agreement and the Administration Agreement to the extent and in
the manner directed by the Indenture Trustee, including the transmission of
notices of default on the part of the Seller, the Servicer, the Administrator
or any Swap Counterparties thereunder and the institution of legal or
administrative actions or proceedings to compel or secure performance by the
Seller, the Servicer, the Administrator or any Swap Counterparties of each of
their obligations under the Loan Sale Agreement, the Servicing Agreement, the
Administration Agreement or any Swap Agreements.
(b) If an Event of Default has occurred, the Indenture Trustee may,
and at the direction (which direction shall be in writing or by telephone
(confirmed in writing promptly thereafter)) of the Noteholders of 66-2/3% of
the Outstanding Amount of the Notes, shall, exercise all rights, remedies,
powers, privileges and claims of the Issuer against the Seller, the Servicer,
the Administrator or any Swap Counterparties under or in connection with the
Loan Sale Agreement, the Servicing Agreement, the Administration Agreement or
any Swap Agreements, including the right or power to take any action to compel
or secure performance or observance by the Seller, the Servicer, the
Administrator or any Swap Counterparties of each of their obligations to the
Issuer thereunder and to give any consent, request, notice, direction,
approval, extension or waiver under the Loan Sale Agreement, the Servicing
Agreement, the Administration Agreement or any Swap Agreements and any right
of the Issuer to take such action shall be suspended.
ARTICLE VI
The Indenture Trustee
SECTION 6.01. Duties of Indenture Trustee. (a) If an Event of Default
has occurred and is continuing, the Indenture Trustee shall exercise the
rights and powers vested in it by this Indenture and use the same degree of
care and skill in their exercise as a prudent person would exercise or use
under the circumstances in the conduct of such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Indenture Trustee undertakes to perform such duties
and only such duties as are specifically set forth in this Indenture
and no implied covenants or obligations shall be read into this
Indenture against the Indenture Trustee; and
(ii) in the absence of bad faith on its part, the Indenture
Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon certificates
or opinions furnished to the Indenture Trustee and conforming to the
requirements of this Indenture; provided, however, that the Indenture
Trustee shall examine such certificates and opinions to determine
whether they conform to the requirements of this Indenture.
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(c) The Indenture Trustee may not be relieved from liability for its
own negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph
(b) of this Section;
(ii) the Indenture Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer unless it is
proved that the Indenture Trustee was negligent in ascertaining the
pertinent facts; and
(iii) the Indenture Trustee shall not be liable with respect
to any action it takes or omits to take in good faith in accordance
with a direction received by it pursuant to Sections 5.02, 5.11, 5.12
and 5.16.
(d) Every provision of this Indenture that in any way relates to the
Indenture Trustee is subject to paragraphs (a), (b), (c) and (g) of this
Section.
(e) The Indenture Trustee shall not be liable for interest on any
money received by it except as the Indenture Trustee may agree in writing with
the Issuer.
(f) Money held in trust by the Indenture Trustee need not be
segregated from other funds except to the extent required by law or the terms
of this Indenture or the Servicing Agreement.
(g) No provision of this Indenture shall require the Indenture
Trustee to expend or risk its own funds or otherwise incur financial liability
in the performance of any of its duties hereunder or in the exercise of any of
its rights or powers, if it shall have reasonable grounds to believe that
repayments of such funds or adequate indemnity satisfactory to it against any
loss, liability or expense is not reasonably assured to it.
(h) Except as expressly provided in the Basic Documents, the
Indenture Trustee shall have no obligation to administer, service or collect
the Financed Student Loans or to maintain, monitor or otherwise supervise the
administration, servicing or collection of the Financed Student Loans.
(i) In the event that the Indenture Trustee is the Paying Agent or
the Note Registrar, the rights and protections afforded to the Indenture
Trustee pursuant to this Indenture shall also be afforded to the Indenture
Trustee in its capacity as Paying Agent or Note Registrar.
(j) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Indenture Trustee
shall be subject to the provisions of this Section and to the provisions of
the TIA.
(k) Notwithstanding any other provision in this Agreement or the
other Basic Documents, nothing in this Agreement or the other Basic Documents
shall be construed to limit the Indenture Trustee's legal responsibility to
the U.S. Secretary of Education or a Guarantor for any violations of statutory
or regulatory requirements that may occur with respect to loans held by the
Indenture Trustee pursuant to, or to otherwise comply with its obligations
under, the Higher Education Act or implementing regulations, it being
expressly understood that the
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Indenture Trustee has no obligation or duty pursuant to this Section in the
capacity of a successor Servicer except pursuant to Section 6.02 of the
Servicing Agreement.
SECTION 6.02. Rights of Indenture Trustee. (a) The Indenture Trustee
may rely on any document believed by it to be genuine and to have been signed
or presented by the proper Person. The Indenture Trustee need not investigate
any fact or matter stated in such document.
(b) Before the Indenture Trustee acts or refrains from acting in
connection with any matter contemplated by this Indenture or other Basic
Documents, it may require an Officers' Certificate of the Issuer or an Opinion
of Counsel. The Indenture Trustee shall not be liable for any action it takes
or omits to take in good faith in reliance on such Officers' Certificate or
Opinion of Counsel.
(c) The Indenture Trustee may exercise any of the trusts and powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys or a custodian or nominee and the Indenture Trustee shall
not be responsible for any misconduct or negligence on the part of any
attorney, agent, custodian or nominee appointed with due care by it hereunder.
(d) The Indenture Trustee shall not be liable for any action it takes
or omits to take in good faith which it believes to be authorized or within
its rights or powers; provided, however, that the Indenture Trustee's conduct
does not constitute willful misconduct, negligence or bad faith.
(e) The Indenture Trustee may consult with counsel, and the advice or
opinion of counsel with respect to legal matters relating to this Indenture
and the other Basic Documents and the Notes shall be full and complete
authorization and protection from liability in respect to any action taken,
omitted or suffered by it hereunder in good faith and in accordance with the
advice or opinion of such counsel.
(f) Subject to clauses (a), (b), (c) and (g) of Section 6.01 hereof,
the Indenture Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any Noteholder pursuant to this Indenture, unless such Noteholder shall have
offered to the Indenture Trustee security or indemnity reasonably satisfactory
to the Indenture Trustee against the costs, expenses and liabilities which
might be incurred by it in compliance with such request or direction.
SECTION 6.03. Individual Rights of Indenture Trustee. The Indenture
Trustee in its individual or any other capacity may become the owner or
pledgee of Notes and may otherwise deal with the Issuer or its Affiliates with
the same rights it would have if it were not Indenture Trustee. Any Paying
Agent, Note Registrar, co-registrar or co-paying agent may do the same with
like rights. However, the Indenture Trustee must comply with Sections 6.11 and
6.12.
SECTION 6.04. Indenture Trustee's Disclaimer. The Indenture Trustee
shall not be responsible for and makes no representation as to the validity or
adequacy of this Indenture or the Notes, it shall not be accountable for the
Issuer's use of the proceeds from the Notes, and it shall not be responsible
for any statement of the Issuer in the Indenture or in any document issued in
connection with the sale of the Notes or in the Notes other than the Indenture
Trustee's certificate of authentication.
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SECTION 6.05. Notice of Defaults. If a Default occurs and if it is
actually known by, or written notice of the existence thereof has been
delivered to, a Responsible Officer of the Indenture Trustee, the Indenture
Trustee shall mail notice of the Default to each Noteholder, any Swap
Counterparties and the Rating Agencies promptly after the Indenture Trustee
obtains such knowledge or receives such notice of the Default. Except in the
case of a Default in payment of principal of or interest on any Note
(including payments pursuant to the mandatory redemption provisions of such
Note), the Indenture Trustee may withhold the notice to the Noteholders if and
so long as a committee of its Responsible Officers in good faith determines
that withholding the notice is in the interests of Noteholders.
SECTION 6.06. Reports by Indenture Trustee to Noteholders. The Paying
Agent shall deliver to each Noteholder (and to each Person who was a
Noteholder at any time during the applicable calendar year) such information
as may be required to enable such holder to prepare its federal and state
income tax returns. Within 60 days after each December 31 beginning with the
December 31 following the date of this Indenture, the Indenture Trustee shall
mail to each Noteholder a brief report as of such December 31 that complies
with TIA ss. 313(a) if required by said section. The Indenture Trustee shall
also comply with TIA ss. 313(b). A copy of each such report required pursuant
to TIA ss. 313(a) or (b) shall, at the time of such transmission to
Noteholders, be filed by the Indenture Trustee with the Commission and with
each securities exchange, if any, upon which the Notes are listed, provided
that the Issuer has previously notified the Indenture Trustee in writing of
such listing.
SECTION 6.07. Compensation and Indemnity. The Issuer shall cause the
Administrator to pay to the Indenture Trustee from time to time reasonable
compensation for its services and shall cause the Administrator to reimburse
the Indenture Trustee for all reasonable out-of-pocket expenses incurred or
made by it, including costs of collection, in addition to the compensation for
its services. Such expenses shall include the reasonable compensation and
expenses, disbursements and advances of the Indenture Trustee's agents,
counsel, accountants and experts. The Indenture Trustee's compensation shall
not be limited by any law on compensation of a trustee of an express trust.
The Issuer shall cause the Administrator to indemnify the Indenture Trustee,
its officers, directors, employees and agents against any and all loss,
liability or expense (including attorneys' fees and expenses) incurred by it
in connection with the administration of this trust and the performance of its
duties hereunder and under the other Basic Documents. The Indenture Trustee
shall notify the Issuer and the Administrator promptly of any claim for which
it may seek indemnity. Failure by the Indenture Trustee to so notify the
Issuer and the Administrator shall not relieve the Issuer or the Administrator
of its obligations hereunder and under the other Basic Documents. The Issuer
shall cause the Administrator to defend the claim and the Administrator shall
not be liable for any additional legal fees and expenses of the Indenture
Trustee after it has assumed such defense; provided, however, that, in the
event that there may be a conflict between the positions of the Indenture
Trustee and the Administrator in conducting the defense of such claim, the
Indenture Trustee shall be entitled to separate counsel the fees and expenses
of which shall be paid by the Administrator on behalf of the Issuer. Neither
the Issuer nor the Administrator need reimburse any expense or indemnify
against any loss, liability or expense incurred by the Indenture Trustee
through the Indenture Trustee's own willful misconduct, negligence or bad
faith.
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All amounts payable to the Indenture Trustee under this Section 6.07
shall be payable solely by the Administrator. The Indenture Trustee agrees to
continue to perform its obligations under the Basic Documents notwithstanding
any failure of the Administrator to pay any amounts owed to the Indenture
Trustee.
The Issuer's and Administrator's payment obligations to the Indenture
Trustee pursuant to this Section shall survive the discharge of this
Indenture. When the Indenture Trustee incurs expenses after the occurrence of
a Default specified in Section 5.01(iv) or (v) with respect to the Issuer, the
expenses are intended to constitute expenses of administration under Title 11
of the United States Code or any other applicable federal or state bankruptcy,
insolvency or similar law.
SECTION 6.08. Replacement of Indenture Trustee. No resignation or
removal of the Indenture Trustee and no appointment of a successor Indenture
Trustee shall become effective until the acceptance of appointment by the
successor Indenture Trustee pursuant to this Section 6.08. The Indenture
Trustee may resign at any time by so notifying the Issuer and any Swap
Counterparties. The Administrator may remove the Indenture Trustee at any time
following thirty days written notice by so notifying the Indenture Trustee and
may appoint a successor Indenture Trustee; provided that all fees and expenses
of the Indenture Trustee being removed are paid in full. The Noteholders of a
majority in Outstanding Amount of the Notes may remove the Indenture Trustee
by so notifying the Indenture Trustee and may appoint a successor Indenture
Trustee. The Issuer shall remove the Indenture Trustee if:
(i) the Indenture Trustee fails to comply with Section 6.11;
(ii) an Insolvency Event occurs with respect to the
Indenture Trustee;
(iii) a receiver or other public officer takes charge of the
Indenture Trustee or its property;
(iv) the Indenture Trustee otherwise becomes incapable of
acting; or
(v) the Indenture Trustee is in breach of any material
representation, warranty, or covenant or other material obligations
of the Indenture Trustee under any Basic Document.
If the Indenture Trustee resigns or is removed or if a vacancy exists
in the office of Indenture Trustee for any reason (the Indenture Trustee in
such event being referred to herein as the retiring Indenture Trustee), the
Issuer shall, promptly appoint a successor Indenture Trustee. Any successor
Indenture Trustee shall be satisfactory to any Swap Counterparties. A former
Indenture Trustee shall not be liable for any acts or omissions of any
successor Indenture Trustee.
A successor Indenture Trustee shall deliver a written acceptance of
its appointment to the retiring Indenture Trustee and the Issuer and shall
notify the Rating Agencies in writing of such acceptance. Thereupon the
resignation or removal of the retiring Indenture Trustee shall become
effective, and the successor Indenture Trustee shall have all the rights,
powers and duties of the Indenture Trustee under this Indenture. The successor
Indenture Trustee shall mail a notice of its
39
succession to Noteholders. The retiring Indenture Trustee shall promptly
transfer all property held by it as Indenture Trustee to the successor
Indenture Trustee.
If a successor Indenture Trustee does not take office within 60 days
after the retiring Indenture Trustee resigns or is removed, the retiring
Indenture Trustee, the Issuer, any Swap Counterparties or the Noteholders of a
majority in Outstanding Amount of the Notes may petition any court of
competent jurisdiction for the appointment of a successor Indenture Trustee.
If the Indenture Trustee fails to comply with Section 6.11, any
Noteholder may petition any court of competent jurisdiction for the removal of
the Indenture Trustee and the appointment of a successor Indenture Trustee.
Notwithstanding the replacement of the Indenture Trustee pursuant to
this Section, the Issuer's and the Administrator's obligations under Section
6.07 shall continue for the benefit of the retiring Indenture Trustee.
SECTION 6.09. Successor Indenture Trustee by Merger. If the Indenture
Trustee consolidates with, merges or converts into, or transfers all or
substantially all its corporate trust business or assets to, another
corporation or banking association, the resulting, surviving or transferee
corporation or banking association without any further act shall be the
successor Indenture Trustee; provided, however, that such corporation or
banking association shall be otherwise qualified and eligible under Section
6.11. The Indenture Trustee shall provide the Rating Agencies prior written
notice of any such transaction.
In case at the time such successor or successors by merger,
conversion or consolidation to the Indenture Trustee shall succeed to the
trusts created by this Indenture any of the Notes shall have been
authenticated but not delivered, any such successor to the Indenture Trustee
may adopt the certificate of authentication of any predecessor trustee, and
deliver such Notes so authenticated; and in case at that time any of the Notes
shall not have been authenticated, any successor to the Indenture Trustee may
authenticate such Notes either in the name of any predecessor hereunder or in
the name of the successor to the Indenture Trustee; and in all such cases such
certificates shall have the full force which it is anywhere in the Notes or in
this Indenture provided that the certificate of the Indenture Trustee shall
have.
SECTION 6.10. Appointment of Co-Trustee or Separate Trustee. (a)
Notwithstanding any other provisions of this Indenture, at any time, for the
purpose of meeting any legal requirement of any jurisdiction in which any part
of the Indenture Trust Estate may at the time be located, the Indenture
Trustee shall have the power and may execute and deliver all instruments to
appoint one or more Persons to act as a co-trustee or co-trustees, or separate
trustee or separate trustees, of all or any part of the Indenture Trust
Estate, and to vest in such Person or Persons, in such capacity and for the
benefit of the Noteholders and any Swap Counterparties, such title to the
Indenture Trust Estate, or any part hereof, and, subject to the other
provisions of this Section, such powers, duties, obligations, rights and
trusts as the Indenture Trustee may consider necessary or desirable. No
co-trustee or separate trustee hereunder shall be required to meet the terms
of eligibility as a successor trustee under Section 6.11 and no notice to
Noteholders of the appointment of any co-trustee or separate trustee shall be
required under Section 6.08 hereof.
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The Indenture Trustee shall notify the Rating Agencies of any appointment of a
co-trustee or separate trustee hereunder.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Indenture Trustee shall be conferred or imposed upon
and exercised or performed by the Indenture Trustee and such separate
trustee or co-trustee jointly (it being understood that such separate
trustee or co-trustee is not authorized to act separately without the
Indenture Trustee joining in such act), except to the extent that
under any law of any jurisdiction in which any particular act or acts
are to be performed the Indenture Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights,
powers, duties and obligations (including the holding of title to the
Indenture Trust Estate or any portion thereof in any such
jurisdiction) shall be exercised and performed singly by such
separate trustee or co-trustee, but solely at the direction of the
Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by
reason of any act or omission of any other trustee hereunder; and
(iii) the Indenture Trustee may at any time accept the
resignation of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Indenture
Trustee shall be deemed to have been given to each of the then separate
trustees and co-trustees, as effectively as if given to each of them. Every
instrument appointing any separate trustee or co-trustee shall refer to this
Indenture and the conditions of this Article VI. Each separate trustee and
co-trustee, upon its acceptance of the trusts conferred, shall be vested with
the estates or property specified in its instrument of appointment, either
jointly with the Indenture Trustee or separately, as may be provided therein,
subject to all the provisions of this Indenture, specifically including every
provision of this Indenture relating to the conduct of, affecting the
liability of, or affording protection to, the Indenture Trustee. Every such
instrument shall be filed with the Indenture Trustee.
(d) Any separate trustee or co-trustee may at any time constitute the
Indenture Trustee, its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under or
in respect of this Indenture on its behalf and in its name. If any separate
trustee or co-trustee shall die, become incapable of acting, resign or be
removed, all its estates, properties, rights, remedies and trusts shall vest
in and be exercised by the Indenture Trustee, to the extent permitted by law,
without the appointment of a new or successor trustee.
SECTION 6.11. Eligibility; Disqualification. The Indenture Trustee
shall at all times satisfy the requirements of TIA ss. 310(a). The Indenture
Trustee shall have a combined capital and surplus of at least $50,000,000 as
set forth in its most recent published annual report of condition and it shall
have a long term debt rating of "Baa3" or better by Moody's. The Indenture
Trustee shall comply with TIA ss. 310(b), including the optional provision
permitted by the
41
second sentence of TIA ss. 310(b)(9); provided, however, that there shall be
excluded from the operation of TIA ss. 310(b)(1) any indenture or indentures
under which other securities of the Issuer are outstanding if the requirements
for such exclusion set forth in TIA ss. 310(b)(1) are met.
SECTION 6.12. Preferential Collection of Claims Against Issuer. The
Indenture Trustee shall comply with TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). An Indenture Trustee that has resigned
or been removed shall be subject to TIA ss. 311(a) to the extent indicated.
SECTION 6.13. Declaration of Default or Termination Event under any
Swap Agreements. The Indenture Trustee shall not declare any Swap
Counterparties to be in Default or declare a Termination Event under any Swap
Agreements without the prior written consent of the Administrator.
ARTICLE VII
Noteholders' Lists and Reports
SECTION 7.01. Issuer to Furnish Indenture Trustee Names and Addresses
of Noteholders. The Issuer will furnish or cause to be furnished to the
Indenture Trustee (a) not more than five days after the earlier of (i) each
Record Date and (ii) three months after the last Record Date, a list, in such
form as the Indenture Trustee may reasonably require, of the names and
addresses of the Noteholders as of such Record Date, and (b) at such other
times as the Indenture Trustee may request in writing, within ten days after
receipt by the Issuer of any such request, a list of similar form and content
as of a date not more than ten days prior to the time such list is furnished;
provided, however, that so long as the Indenture Trustee is the Note
Registrar, no such list shall be required to be furnished.
SECTION 7.02. Preservation of Information; Communications to
Noteholders. (a) The Indenture Trustee shall preserve, in as current a form as
is reasonably practicable, the names and addresses of the Noteholders
contained in the most recent list furnished to the Indenture Trustee as
provided in Section 7.01 and the names and addresses of Noteholders received
by the Indenture Trustee in its capacity as Note Registrar. The Indenture
Trustee may destroy any list furnished to it as provided in such Section 7.01
upon receipt of a new list so furnished.
(b) Noteholders may communicate pursuant to TIA ss. 312(b) with other
Noteholders with respect to their rights under this Indenture or under the
Notes.
(c) The Issuer, the Indenture Trustee and the Note Registrar shall
have the protection of TIA ss.312(c).
(d) The Indenture Trustee shall furnish to the Noteholders promptly
upon receipt of a written request therefor, duplicates or copies of all
reports, notices, requests, demands, certificates, financial statements and
any other instruments furnished to the Indenture Trustee under the Basic
Documents.
(e) The Indenture Trustee shall provide notice to the Noteholders and
any Swap Counterparties as provided in Section 9.02 of the Trust Agreement,
and shall provide notice to
42
the Noteholders of any amendment or supplement to the Trust Agreement as
provided in Section 11.01 of the Trust Agreement.
SECTION 7.03. Reports by Issuer. (a) The Issuer shall:
(i) file with the Indenture Trustee, within 15 days after
the Issuer is required to file the same with the Commission, copies
of the annual reports and of the information, documents and other
reports (or copies of such portions of any of the foregoing as the
Commission may from time to time by rules and regulations prescribe)
which the Issuer may be required to file with the Commission pursuant
to Section 13 or 15(d) of the Exchange Act;
(ii) file with the Indenture Trustee and the Commission in
accordance with rules and regulations prescribed from time to time by
the Commission such additional information, documents and reports
with respect to compliance by the Issuer with the conditions and
covenants of this Indenture as may be required from time to time by
such rules and regulations; and
(iii) supply to the Indenture Trustee (and the Indenture
Trustee shall transmit by mail to all Noteholders described in TIA
ss. 313(c)) such summaries of any information, documents and reports
required to be filed by the Issuer pursuant to clauses (i) and (ii)
of this Section 7.03(a) as may be required by rules and regulations
prescribed from time to time by the Commission.
(b) Unless the Issuer otherwise determines, the fiscal year of the
Issuer shall end on December 31 of each year.
(c) Copies of all reports to be sent to the Indenture Trustee under
this Section 7.03 shall be mailed to any Swap Counterparties and the Rating
Agencies by the Issuer at the same time.
ARTICLE VIII
Accounts, Disbursements and Releases
SECTION 8.01. Collection of Money. Except as otherwise expressly
provided herein, the Indenture Trustee may demand payment or delivery of, and
shall receive and collect, directly and without intervention or assistance of
any fiscal agent or other intermediary, all money and other property payable
to or receivable by the Indenture Trustee pursuant to this Indenture. The
Indenture Trustee shall apply all such money received by it on behalf of
itself and the Noteholders pursuant to the Loan Sale Agreement, the Servicing
Agreement or the Administration Agreement as provided in this Indenture.
Except as otherwise expressly provided in this Indenture, if any default
occurs in the making of any payment or performance under any agreement or
instrument that is part of the Indenture Trust Estate, the Indenture Trustee
may take such action as may be appropriate to enforce such payment or
performance, including the institution and prosecution of appropriate
Proceedings. Any such action shall be without prejudice to any right to claim
a Default or Event of Default under this Indenture and any right to proceed
thereafter as provided in Article V.
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SECTION 8.02. Trust Accounts. (a) On or prior to the Closing Date,
the Issuer shall cause the Administrator to establish and maintain, in the
name of the Indenture Trustee, for the benefit of the Noteholders and the Swap
Counterparty, the Trust Accounts as provided in Section 2(c) of the
Administration Agreement.
(b) On or before the Business Day preceding each Monthly Payment Date
and Quarterly Payment Date, all Monthly Available Funds with respect to the
preceding Monthly Collection Period (or in the case of a Quarterly Payment
Date, Available Funds with respect to the preceding Collection Period) will be
deposited in the Collection Account as provided in Section 4.01 of the
Servicing Agreement. On each Quarterly Payment Date, the Noteholders'
Distribution Amount with respect to such Quarterly Payment Date will be
distributed from the Collection Account, from the Prefunding Account and from
the Reserve Account to the Indenture Trustee (or other Paying Agent) on behalf
of the Noteholders as provided in Sections 2(d)(v)(C), 2(e)(iv)(C) and
2(f)(ii) of the Administration Agreement. On each Quarterly Payment Date, the
Reserve Account Excess for such Quarterly Payment Date will be distributed to
the Indenture Trustee (or other Paying Agent) on behalf of the Noteholders as
provided in clause (i) of Section 2(e)(ii) of the Administration Agreement.
(c) On each Quarterly Payment Date, the Indenture Trustee (or any
other Paying Agent) shall distribute all amounts received by it from the
Collection Account, the Prefunding Account and the Reserve Account pursuant to
paragraph (b) above to Noteholders in respect of the Notes to the extent of
amounts due and unpaid on the Notes for principal and interest to any Swap
Counterparties in the following amounts and in the following order of
priority:
(i) the Class A-1 Noteholders' Interest Distribution Amount,
the Class A-2 Noteholders' Interest Distribution Amount, the Trust
Swap Payment Amounts, if any, and the remainder of any Termination
Payment (to the extent the remainder of such Termination Payment is
owed to any Swap Counterparties following a Redemption Event (as
defined in any related Swap Agreement) or a default by the Trust
under any Swap Agreements [other than an Event of Default by the
Trust specified in (x) Section 5(a)(i) of any Swap Agreements or (y)
5(a)(ix) of any Swap Agreements unless an Event of Default has
occurred, the Notes have been accelerated and such acceleration has
been waived]), to the Class A-1 Noteholders, the Class A-2
Noteholders and any Swap Counterparties, respectively; provided,
however, that if there are not sufficient funds to pay the Class A-1
Noteholders' Interest Distribution Amount, the Class A-2 Noteholders'
Interest Distribution Amount, the Trust Swap Payment Amounts, if any,
and the remainder of any Termination Payment, the amounts so received
shall be applied to the payment of such Class A-1 Noteholders'
Interest Distribution Amount, the Class A-2 Noteholders' Interest
Distribution Amount, the Trust Swap Payment Amounts, if any, and the
remainder of any Termination Payment, on a pro rata basis based on
the ratio of each such amount to the total of such amounts;
(ii) the Subordinate Noteholders' Interest Distribution
Amount, to the Subordinate Noteholders;
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(iii) the Senior Noteholders' Principal Distribution Amount,
to the Senior Noteholders (such amount to be allocated among the
Senior Noteholders as provided in Section 8.02(f) until the
Outstanding Amount of the Senior Notes is reduced to zero; and
(iv) after the Outstanding principal amount of the Senior
Notes is reduced to zero, the Subordinate Noteholders' Principal
Distribution Amount to the Subordinate Noteholders until the
Outstanding principal amount of the Subordinate Notes is reduced to
zero.
(d) On each Quarterly Payment Date, the Indenture Trustee (or any
Paying Agent) shall distribute all amounts received by it on behalf of
Noteholders in respect of Reserve Account Excess pursuant to paragraph (b)
above to Senior Noteholders (to be allocated among the Senior Noteholders as
provided in Section 8.02(f)).
(e) On the Quarterly Payment Date referred to in Section 10.01(a)(i)
with respect to redemption pursuant to Section 10.01(a)(i), the Indenture
Trustee (or any other Paying Agent) upon the written direction of the
Administrator shall distribute all amounts received by it from the Prefunding
Account pursuant to the last sentence of Section (b) above in the following
amounts and among the Class A-1 and Class A-2 Noteholders[, pro rata,] based
upon the initial principal balance of each class of Class A-1 and Class A-2
Notes.
(f) All amounts allocated from whatever source to pay principal of
the Senior Notes [, except as provided in clause (e) above,] shall be
distributed sequentially to the Class A-1 Notes and the Class A-2 Notes, in
that order, in each case until the principal balance of the class receiving
such distributions has been reduced to zero.
(g) In the event that any Swap Counterparty is replaced by a
successor swap counterparty pursuant to the terms of any Swap Agreement, the
Indenture Trustee shall pay any amounts owing to such Swap Counterparties in
accordance with the terms of the related Swap Agreements at the written
direction of such Swap Counterparties.
SECTION 8.03. General Provisions Regarding Accounts. (a) So long as
no Default or Event of Default shall have occurred and be continuing, all or a
portion of the funds in the Trust Accounts shall be invested in Eligible
Investments and reinvested by the Indenture Trustee upon Issuer Order, subject
to the provisions of Section 2(c) of the Administration Agreement. All income
or other gain from investments of monies deposited in the Trust Accounts shall
be deposited by the Indenture Trustee in the Collection Account, and any loss
resulting from such investments shall be charged to such Trust Account. The
Issuer will not direct the Indenture Trustee to make any investment of any
funds or to sell any investment held in any of the Trust Accounts unless the
security interest granted and perfected in such account will continue to be
perfected in such investment or the proceeds of such sale, in either case
without any further action by any Person, and, in connection with any
direction to the Indenture Trustee to make any such investment or sale, if
requested by the Indenture Trustee, the Issuer shall deliver to the Indenture
Trustee and any Swap Counterparties an Opinion of Counsel, acceptable to the
Indenture Trustee and any Swap Counterparties, to such effect. All Eligible
Investments shall mature on the Business Day prior to the Monthly Payment Date
or Quarterly Payment Date, as applicable, and shall not be sold prior to their
maturity.
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(b) Subject to Section 6.01(c), the Indenture Trustee shall not in
any way be held liable by reason of any insufficiency in any of the Trust
Accounts resulting from any loss on any Eligible Investment included therein
except for losses attributable to the Indenture Trustee's failure to make
payments on such Eligible Investments issued by the Indenture Trustee, in its
commercial capacity as principal obligor and not as trustee, in accordance
with their terms.
(c) If (i) the Issuer (or the Administrator pursuant to Section
2.(a)(U) of the Administration Agreement) shall have failed to give investment
directions for any funds on deposit in the Trust Accounts to the Indenture
Trustee by 10:00 a.m. New York time (or such other time as may be agreed by
the Issuer and Indenture Trustee) on any Business Day; or (ii) a Default or an
Event of Default, shall have occurred and be continuing with respect to the
Notes but the Notes shall not have been declared due and payable pursuant to
Section 5.02, or, if such Notes shall have been declared due and payable
following an Event of Default, amounts collected or receivable from the
Indenture Trust Estate are being applied in accordance with Section 5.05 as if
there had not been such a declaration; then the Indenture Trustee shall, to
the fullest extent practicable, invest and reinvest funds in the Trust
Accounts in one or more Eligible Investments described in clause (d) of the
definition thereof.
SECTION 8.04. Release of Indenture Trust Estate. (a) Subject to the
payment of its fees and expenses (including, without limitation, legal fees
and expenses) pursuant to Section 6.07, the Indenture Trustee may, and when
required by the provisions of this Indenture shall, execute instruments to
release property from the lien of this Indenture, or convey the Indenture
Trustee's interest in the same, in a manner and under circumstances that are
not inconsistent with the provisions of this Indenture. No party relying upon
an instrument executed by the Indenture Trustee as provided in this Article
VIII shall be bound to ascertain the Indenture Trustee's authority, inquire
into the satisfaction of any conditions precedent or see to the application of
any monies.
(b) The Indenture Trustee shall, at such time as there are no Notes
Outstanding and all sums due the Indenture Trustee pursuant to Section 6.07
have been paid and all amounts due to any Swap Counterparties under the Basic
Documents have been paid, release any remaining portion of the Indenture Trust
Estate that secured the Notes from the lien of this Indenture and release to
the Issuer or any other Person entitled thereto any funds then on deposit in
the Trust Accounts. The Indenture Trustee shall release property from the lien
of this Indenture pursuant to this Section 8.04(b) only upon receipt by it and
any Swap Counterparties of an Issuer Request accompanied by an Officers'
Certificate of the Issuer, an Opinion of Counsel and (if required by the TIA)
Independent Certificates in accordance with TIA xx.xx. 314(c) and 314(d)(1)
meeting the applicable requirements of Section 11.01.
SECTION 8.05. Opinion of Counsel. The Indenture Trustee shall receive
at least seven days' notice when requested by the Issuer to take any action
pursuant to Section 8.04(a), accompanied by copies of any instruments
involved, and the Indenture Trustee and any Swap Counterparties shall also
require, as a condition to such action, an Opinion of Counsel, in form and
substance satisfactory to the Indenture Trustee and any Swap Counterparties,
stating the legal effect of any such action, outlining the steps required to
complete the same, and concluding that all conditions precedent to the taking
of such action have been complied with and such action will not materially and
adversely impair the security for the Notes or the rights of the
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Noteholders in contravention of the provisions of this Indenture; provided,
however, that such Opinion of Counsel shall not be required to express an
opinion as to the fair value of the Indenture Trust Estate. Counsel rendering
any such opinion may rely, with respect to factual matters without independent
investigation thereof, on the accuracy and validity of any certificate or
other instrument delivered to the Indenture Trustee in connection with any
such action.
ARTICLE IX
Supplemental Indentures
SECTION 9.01. Supplemental Indentures Without Consent of Noteholders.
(a) Without the consent of any Noteholders but with the prior written consent
of any Swap Counterparties and the prior notice to the Rating Agencies, the
Issuer and the Indenture Trustee, when authorized by an Issuer Order, at any
time and from time to time, may enter into one or more indentures supplemental
hereto (which shall conform to the provisions of the Trust Indenture Act as in
force at the date of the execution thereof), in form satisfactory to the
Indenture Trustee, for any of the following purposes:
(i) to correct or amplify the description of any property at
any time subject to the lien of this Indenture, or, better to assure,
convey and confirm unto the Indenture Trustee any property subject or
required to be subjected to the lien of this Indenture, or to subject
to the lien of this Indenture additional property;
(ii) to evidence the succession, in compliance with the
applicable provisions hereof, of another Person to the Issuer, and
the assumption by any such successor of the covenants of the Issuer
herein and in the Notes contained;
(iii) to add to the covenants of the Issuer, for the benefit
of the Noteholders and any Swap Counterparties, or to surrender any
right or power herein conferred upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any
property to or with the Indenture Trustee;
(v) to cure any ambiguity, to correct or supplement any
provision herein or in any supplemental indenture which may be
inconsistent with any other provision herein or in any supplemental
indenture or to make any other provisions with respect to matters or
questions arising under this Indenture or in any supplemental
indenture; provided, however, that such action shall not materially
adversely affect the interests of the Noteholders;
(vi) to evidence and provide for the acceptance of the
appointment hereunder by a successor trustee with respect to the
Notes and to add to or change any of the provisions of this Indenture
as shall be necessary to facilitate the administration of the trusts
hereunder by more than one trustee, pursuant to the requirements of
Article VI; or
(vii) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the
qualification of this Indenture under the TIA or
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under any similar federal statute hereafter enacted and to add to
this Indenture such other provisions as may be expressly required by
the TIA.
The Indenture Trustee is hereby authorized to join in the execution
of any such supplemental indenture and to make any further appropriate
agreements and stipulations that may be therein contained.
(b) The Issuer and the Indenture Trustee, when authorized by an
Issuer Order, may also, without the consent of any of the Noteholders but with
the prior written consent of any Swap Counterparties and prior notice to the
Rating Agencies, enter into an indenture or indentures supplemental hereto for
the purpose of adding any provisions to, or changing in any manner or
eliminating any of the provisions of, this Indenture or of modifying in any
manner the rights of the Noteholders under this Indenture; provided, however,
that such action shall not, as evidenced by an Opinion of Counsel, adversely
affect in any material respect the interests of any Noteholder.
SECTION 9.02. Supplemental Indentures with Consent of Noteholders.
The Issuer and the Indenture Trustee, when authorized by an Issuer Order, also
may, with prior notice to the Rating Agencies and with the written consent of
any Swap Counterparties and the Noteholders of not less than a majority of the
Outstanding Amount of the Notes, by Act of such Noteholders delivered to the
Issuer and the Indenture Trustee, enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to, or changing
in any manner or eliminating any of the provisions of, this Indenture or of
modifying in any manner the rights of the Noteholders under this Indenture;
provided, however, that no such supplemental indenture shall, without the
consent of the Noteholder of each Outstanding Note affected thereby:
(i) change the date of payment of any installment of
principal of or interest on any Note, or reduce the principal amount
thereof, the interest rate thereon or the Redemption Price with
respect thereto, change the provisions of this Indenture relating to
the application of collections on, or the proceeds of the sale of,
the Indenture Trust Estate to payment of principal of or interest on
the Notes, or change any place of payment where, or the coin or
currency in which, any Note or the interest thereon is payable, or
impair the right to institute suit for the enforcement of the
provisions of this Indenture requiring the application of funds
available therefor, as provided in Article V, to the payment of any
such amount due on the Notes on or after the respective due dates
thereof (or, in the case of redemption, on or after the Redemption
Date);
(ii) reduce the percentage of the Outstanding Amount of the
Notes, the consent of the Noteholders of which is required for any
such supplemental indenture, or the consent of the Noteholders of
which is required for any waiver of compliance with certain
provisions of this Indenture or certain defaults hereunder and their
consequences provided for in this Indenture;
(iii) modify or alter the provisions of the proviso to the
definition of the term "Outstanding";
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(iv) reduce the percentage of the Outstanding Amount of the
Notes required to direct the Indenture Trustee to direct the Issuer
to sell or liquidate the Indenture Trust Estate pursuant to Section
5.04;
(v) modify any provision of this Section except to increase
any percentage specified herein or to provide that certain additional
provisions of this Indenture or the other Basic Documents cannot be
modified or waived without the consent of the Noteholder of each
Outstanding Note affected thereby;
(vi) modify any of the provisions of this Indenture in such
manner as to affect the calculation of the amount of any payment of
interest or principal due on any Note on any Quarterly Payment Date
(including the calculation of any of the individual components of
such calculation) or to affect the rights of the Noteholders to the
benefit of any provisions for the mandatory redemption of the Notes
contained herein; or
(vii) permit the creation of any lien ranking prior to or on
a parity with the lien of this Indenture with respect to any part of
the Indenture Trust Estate or, except as otherwise permitted or
contemplated herein, terminate the lien of this Indenture on any
property at any time subject hereto or deprive any Noteholder of any
Note of the security provided by the lien of this Indenture.
The Indenture Trustee may in its discretion determine whether or not
any Notes would be affected by any supplemental indenture and any such
determination shall be conclusive upon the Noteholders of all Notes whether
theretofore or thereafter authenticated and delivered hereunder. The Indenture
Trustee shall not be liable for any such determination made in good faith.
It shall not be necessary for any Act of Noteholders under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.
Promptly after the execution by the Issuer and the Indenture Trustee
of any supplemental indenture pursuant to this Section, the Indenture Trustee
shall mail to the Noteholders of the Notes to which such amendment or
supplemental indenture relates and to the Rating Agencies a notice setting
forth in general terms the substance of such supplemental indenture. Any
failure of the Indenture Trustee to mail such notice, or any defect therein,
shall not, however, in any way impair or affect the validity of any such
supplemental indenture.
SECTION 9.03. Execution of Supplemental Indentures. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modifications thereby of the trusts
created by this Indenture, the Indenture Trustee shall receive, and subject to
Sections 6.01 and 6.02, shall be fully protected in relying upon, an Opinion
of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Indenture Trustee may, but
shall not be obligated to, enter into any such supplemental indenture that
affects the Indenture Trustee's own rights, duties, liabilities or immunities
under this Indenture or otherwise. The Indenture Trustee shall provide a fully
executed copy of any supplemental indentures to the Indenture to any Swap
Counterparties and each Rating Agency.
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SECTION 9.04. Effect of Supplemental Indenture. Upon the execution of
any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and be deemed to be modified and amended in accordance therewith with
respect to the Notes affected thereby, and the respective rights, limitations
of rights, obligations, duties, liabilities and immunities under this
Indenture of the Indenture Trustee, the Issuer, the Noteholders and any Swap
Counterparties shall thereafter be determined, exercised and enforced
hereunder subject in all respects to such modifications and amendments, and
all the terms and conditions of any such supplemental indenture shall be and
are deemed to be part of the terms and conditions of this Indenture for any
and all purposes.
SECTION 9.05. Conformity with Trust Indenture Act. Every amendment of
this Indenture and every supplemental indenture executed pursuant to this
Article IX shall conform to the requirements of the Trust Indenture Act as
then in effect so long as this Indenture shall then be qualified under the
Trust Indenture Act.
SECTION 9.06. Reference in Notes to Supplemental Indentures. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the Indenture Trustee
shall, bear a notation in form approved by the Indenture Trustee as to any
matter provided for in such supplemental indenture. If the Issuer or the
Indenture Trustee shall so determine, new Notes so modified as to conform, in
the opinion of the Indenture Trustee and the Issuer, to any such supplemental
indenture may be prepared and executed by the Issuer and authenticated and
delivered by the Indenture Trustee in exchange for Outstanding Notes.
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ARTICLE X
Redemption of Notes
SECTION 10.01. Redemption.
(a) In the event that on the Quarterly Payment Date on which the
Funding Period ends (or on the Quarterly Payment Date on or immediately
following the last day of the Funding Period, if the Funding Period does not
end on a Quarterly Payment Date) any amount remains on deposit in the
Prefunding Account after giving effect to the making of all Additional
Fundings, including any such Additional Fundings on such Quarterly Payment
Date and the payment to any Swap Counterparties of any prior unpaid Net Trust
Swap Payment Carryover Shortfalls as provided in Section 8.02(e), one or more
classes of the Notes will be redeemed in part, in the order of priority
specified in Section 8.02(e), in an aggregate principal amount equal to the
amount then on deposit in the Prefunding Account after giving effect to such
Additional Fundings and such payment to any Swap Counterparties.
(b) In the event that the Financed Student Loans are sold pursuant to
Section 4.04 hereof, that portion of the amounts on deposit in the Trust
Accounts to be distributed to the Noteholders and any Swap Counterparties, if
any, shall be paid, first, to any Swap Counterparties, (in accordance with the
written direction of any Swap Counterparties) to the extent any amounts remain
due and payable to any Swap Counterparties under any Swap Agreements and,
second, to the Noteholders, the Redemption Price for the Notes. If amounts are
to be paid to Noteholders and any Swap Counterparties, if any, pursuant to
this Section 10.01(b), the Administrator or the Issuer shall furnish notice of
such Event to the Indenture Trustee and any Swap Counterparties not later than
25 days prior to the Redemption Date whereupon all such amounts shall be
payable on the Redemption Date. If the auction referenced in the notice
described in the immediately preceding sentence fails to be consummated, the
Redemption Date shall not occur and no amounts will be payable pursuant to
this Section 10.01(b).
(c) The Notes are subject to redemption in whole, but not in part, on
any Quarterly Payment Date on which the Servicer exercises its option to
purchase the Trust Estate pursuant to Section 5.01 of the Loan Sale Agreement.
If the Notes are to be redeemed pursuant to this Section 10.01(c), the
Servicer shall furnish notice of such election to the Indenture Trustee and
any Swap Counterparties not later than 20 days prior to the Redemption Date
and the Issuer shall deposit by 10:00 a.m. New York time on the Redemption
Date with the Indenture Trustee in the Collection Account the Redemption Price
for the Notes, whereupon the Notes shall be due and payable on the Redemption
Date upon furnishing a notice complying with Section 10.02 to each Noteholder
and any Swap Counterparties.
(d) No redemption of the Notes pursuant to Section 10.01(b) or
10.01(c) shall occur until the Indenture Trustee shall have first paid to any
Swap Counterparties (or simultaneously pays) any prior unpaid Net Trust Swap
Payment Carryover Shortfalls and any other amounts owed to any Swap
Counterparties under any Swap Agreements as directed in writing by the
Administrator.
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(e) The Indenture Trustee shall provide notice to any Swap
Counterparties immediately upon the Minimum Purchase Price being deposited in
the Collection Account.
SECTION 10.02. Form of Redemption Notice. Notice of redemption under
Section 10.01 shall be given by the Indenture Trustee by first-class mail,
postage prepaid, or by facsimile, mailed or transmitted on or prior to the
applicable Redemption Date to any Swap Counterparties and to each Noteholder,
as of the close of business on the Record Date preceding the applicable
Redemption Date, at such Noteholder's address or facsimile number appearing in
the Note Register or, in the case of the Swap Counterparty, as provided in any
Swap Agreements.
All notices of redemption shall state:
(i) the Redemption Date,
(ii) the Redemption Price and
(iii) the place where such Notes are to be surrendered for
payment of the Redemption Price (which shall be the office or agency
of the Issuer to be maintained as provided in Section 3.02).
Notice of redemption of the Notes shall be given by the Indenture
Trustee in the name and at the expense of the Issuer. Failure to give notice
of redemption, or any defect therein, to any Noteholder of any Note shall not
impair or affect the validity of the redemption of any other Note.
SECTION 10.03. Notes Payable on Redemption Date. The Notes or
portions thereof to be redeemed shall on the Redemption Date become due and
payable at the Redemption Price and (unless the Issuer shall default in the
payment of the Redemption Price) no interest shall accrue on the Redemption
Price for any period after the date to which accrued interest is calculated
for purposes of calculating the Redemption Price.
ARTICLE XI
Miscellaneous
SECTION 11.01. Compliance Certificates and Opinions. (a) Upon any
application or request by the Issuer to the Indenture Trustee to take any
action under any provision of this Indenture, the Issuer shall furnish to the
Indenture Trustee and any Swap Counterparties (i) an Officers' Certificate of
the Issuer stating that all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with, (ii) an
Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with and (iii) (if required
by the TIA) an Independent Certificate from a firm of certified public
accountants meeting the applicable requirements of this Section, except that,
in the case of any such application or request as to which the furnishing of
such documents is specifically required by any provision of this Indenture, no
additional certificate or opinion need be furnished.
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Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(i) a statement that each signatory of such certificate or
opinion has read or has caused to be read such covenant or condition
and the definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(iii) a statement that, in the opinion of each such
signatory, such signatory has made such examination or investigation
as is necessary to enable such signatory to express an informed
opinion as to whether such covenant or condition has been complied
with; and
(iv) a statement as to whether, in the opinion of each such
signatory, such condition or covenant has been complied with.
(b) (i) Prior to the deposit of any Collateral or other property or
securities with the Indenture Trustee that is to be made the basis for the
release of any property or securities subject to the lien of this Indenture,
the Issuer shall, in addition to any obligation imposed in Section 11.01(a) or
elsewhere in this Indenture, furnish to the Indenture Trustee an Officers'
Certificate of the Issuer certifying or stating the opinion of each person
signing such certificate as to the fair value (within 90 days of such deposit)
to the Issuer of the Collateral or other property or securities to be so
deposited.
(ii) Whenever the Issuer is required to furnish to the Indenture
Trustee an Officers' Certificate of the Issuer certifying or stating the
opinion of any signer thereof as to the matters described in clause (i) above,
the Issuer shall also deliver to the Indenture Trustee an Independent
Certificate as to the same matters, if the fair value to the Issuer of the
securities to be so deposited and of all other such securities made the basis
of any such withdrawal or release since the commencement of the then current
fiscal year of the Issuer, as set forth in the certificates delivered pursuant
to clause (i) above and this clause (ii), is 10% or more of the Outstanding
Amount of the Notes, but such a certificate need not be furnished with respect
to any securities so deposited, if the fair value thereof to the Issuer as set
forth in the related Officers' Certificate is less than $25,000 or less than
one percent of the Outstanding Amount of the Notes.
(iii) Other than any property released as contemplated by clause (v)
below, whenever any property or securities are to be released from the lien of
this Indenture, the Issuer shall also furnish to the Indenture Trustee an
Officers' Certificate of the Issuer certifying or stating the opinion of each
person signing such certificate as to the fair value (within 90 days of such
release) of the property or securities proposed to be released and stating
that in the opinion of such person the proposed release will not impair the
security under this Indenture in contravention of the provisions hereof.
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(iv) Whenever the Issuer is required to furnish to the Indenture
Trustee an Officers' Certificate of the Issuer certifying or stating the
opinion of any signer thereof as to the matters described in clause (iii)
above, the Issuer shall also furnish to the Indenture Trustee an Independent
Certificate as to the same matters if the fair value of the property or
Securities and of all other property, other than property as contemplated by
clause (v) below, or securities released from the lien of this Indenture since
the commencement of the then-current calendar year, as set forth in the
certificates required by clause (iii) above and this clause (iv), equals 10%
or more of the Outstanding Amount of the Notes, but such certificate need not
be furnished in the case of any release of property or securities if the fair
value thereof as set forth in the related Officers' Certificate is less than
$25,000 or less than one percent of the then Outstanding Amount of the Notes.
(v) Notwithstanding Section 2.09 or any other provision of this
Section, the Issuer may, without compliance with the requirements of the other
provisions of this Section, (A) collect, liquidate, sell or otherwise dispose
of Financed Student Loans as and to the extent permitted or required by the
Basic Documents and (B) make cash payments out of the Trust Accounts as and to
the extent permitted or required by the Basic Documents.
SECTION 11.02. Form of Documents Delivered to Indenture Trustee. In
any case where several matters are required to be certified by, or covered by
an opinion of, any specified Person, it is not necessary that all such matters
be certified by, or covered by the opinion of, only one such Person, or that
they be so certified or covered by only one document, but one such Person may
certify or give an opinion with respect to some matters and one or more other
such Persons as to other matters, and any such Person may certify or give an
opinion as to such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of the Issuer may
be based, insofar as it relates to legal matters, upon a certificate or
opinion of, or representations by, counsel, unless such officer knows, or in
the exercise of reasonable care should know, that the certificate or opinion
or representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate of an Authorized Officer
or Opinion of Counsel may be based, insofar as it relates to factual matters,
upon a certificate or opinion of, or representations by, an officer or
officers of the Servicer, the Seller, the Issuer or the Administrator, stating
that the information with respect to such factual matters is in the possession
of the Servicer, the Seller, the Issuer or the Administrator, unless such
counsel knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to such matters are
erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Whenever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the Issuer
shall deliver any document as a condition of the granting of such application,
or as evidence of the Issuer's compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application
or at the effective date of such certificate or report (as the case may be),
of the facts and opinions stated in
54
such document shall in such case be conditions precedent to the right of the
Issuer to have such application granted or to the sufficiency of such
certificate or report. The foregoing shall not, however, be construed to
affect the Indenture Trustee's right to rely upon the truth and accuracy of
any statement or opinion contained in any such document as provided in Article
VI.
SECTION 11.03. Acts of Noteholders. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Noteholders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Noteholders in person or by agents duly appointed in writing; and except
as herein otherwise expressly provided such action shall become effective when
such instrument or instruments are delivered to the Indenture Trustee, and,
where it is hereby expressly required, to the Issuer. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Noteholders signing such instrument
or instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 6.01) conclusive in favor of the Indenture
Trustee and the Issuer, if made in the manner provided in this Section.
(b) The fact and date of the execution by any person of any such
instrument or writing may be proved in any manner that the Indenture Trustee
deems sufficient.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Noteholder of any Notes shall bind the
Noteholder of every Note issued upon the registration thereof or in exchange
therefor or in lieu thereof, in respect of anything done, omitted or suffered
to be done by the Indenture Trustee or the Issuer in reliance thereon, whether
or not notation of such action is made upon such Note.
SECTION 11.04. Notices to Indenture Trustee, Issuer, Swap
Counterparties and Rating Agencies. Any request, demand, authorization,
direction, notice, consent, waiver or act of Noteholders or other documents
provided or permitted by this Indenture shall be in writing and if such
request, demand, authorization, direction, notice, consent, waiver or act of
Noteholders is to be made upon, given or furnished to or filed with:
(a) the Indenture Trustee by any Noteholder, by any Swap
Counterparties or by the Issuer, it shall be sufficient for every purpose
hereunder if made, given, furnished or filed in writing to or with the
Indenture Trustee at its Corporate Trust Office, or
(b) the Issuer by the Indenture Trustee, or by any Noteholder, it
shall be sufficient for every purpose hereunder if in writing and mailed,
first-class, postage prepaid, to the Issuer addressed to: Xxxxx Fargo Student
Loan Trust 2001-1, in care of [o], as Trustee, [o], with a copy to the
Eligible Lender Trustee at the Corporate Trust Office of the Eligible Lender
Trustee, or at any other address previously furnished in writing to the
Indenture Trustee by the Issuer. The Issuer shall promptly transmit any notice
received by it from the Noteholders to the Indenture Trustee.
55
Notices required to be given to any Swap Counterparties by the
Issuer, the Indenture Trustee or the Eligible Lender Trustee shall be in
writing, personally delivered or mailed by certified mail, return receipt
requested, to the addresses set forth in any related Swap Agreement or at such
other address as shall be designated by written notice to the other parties.
Notices required to be given to the Rating Agencies by the Issuer,
the Indenture Trustee or the Eligible Lender Trustee shall be in writing,
personally delivered or mailed by certified mail, return receipt requested, to
the following address: (i) in the case of Xxxxx'x Investors Service, Inc., at
the following address: 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention
of ABS Monitoring Department, (ii) in the case of Fitch, Inc., at the
following address: Xxx Xxxxx Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention
of Asset Backed Monitoring Unit and (iii) in the case of Standard & Poor's, a
division of The XxXxxx-Xxxx Companies, Inc., 00 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: ABS Surveillance Department; or as to each of
the foregoing, at such other address as shall be designated by written notice
to the other parties.
SECTION 11.05. Notices to Noteholders; Waiver. Where this Indenture
provides for notice to Noteholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class, postage prepaid to each Noteholder affected by such
event, at his address as it appears on the Note Register, not later than the
latest date, and not earlier than the earliest date, prescribed for the giving
of such notice. In any case where notice to Noteholders is given by mail,
neither the failure to mail such notice nor any defect in any notice so mailed
to any particular Noteholder shall affect the sufficiency of such notice with
respect to other Noteholders, and any notice that is mailed in the manner
herein provided shall conclusively be presumed to have been duly given.
Where this Indenture provides for notice in any manner, such notice
may be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Noteholders shall be filed with the Indenture
Trustee but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such a waiver.
In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity, it shall be impractical
to mail notice of any event to Noteholders when such notice is required to be
given pursuant to any provision of this Indenture, then any manner of giving
such notice as shall be satisfactory to the Indenture Trustee shall be deemed
to be a sufficient giving of such notice.
Where this Indenture provides for notice to the Rating Agencies,
failure to give such notice shall not affect any other rights or obligations
created hereunder, and shall not under any circumstance constitute a Default
or an Event of Default.
SECTION 11.06. Alternate Payment and Notice Provisions.
Notwithstanding any provision of this Indenture or any of the Notes to the
contrary, the Issuer may enter into any agreement with any Noteholder
providing for a method of payment, or notice by the Indenture Trustee or any
Paying Agent to such Noteholder, that is different from the methods provided
for in this Indenture for such payments or notices, provided that such
agreement is reasonably
56
acceptable to the Indenture Trustee. The Issuer will furnish to the Indenture
Trustee a copy of each such agreement and the Indenture Trustee will cause
payments to be made and notices to be given in accordance with such
agreements.
SECTION 11.07. Conflict with Trust Indenture Act. If any provision
hereof limits, qualifies or conflicts with another provision hereof that is
required to be included in this Indenture by any of the provisions of the
Trust Indenture Act, such required provision shall control.
The provisions of TIA xx.xx. 310 through 317 that impose duties on
any Person (including the provisions automatically deemed included herein
unless expressly excluded by this Indenture) are a part of and govern this
Indenture, whether or not physically contained herein.
SECTION 11.08. Effect of Headings and Table of Contents. The Article
and Section headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof.
SECTION 11.09. Successors and Assigns. All covenants and agreements
in this Indenture and the Notes by the Issuer shall bind its successors and
assigns, whether so expressed or not. All agreements of the Indenture Trustee
in this Indenture shall bind the successors, co-trustees and agents (excluding
any legal representatives or accountants) of the Indenture Trustee.
SECTION 11.10. Separability. In case any provision in this Indenture
or in the Notes shall be invalid, illegal or unenforceable, the validity,
legality, and enforceability of the remaining provisions shall not in any way
be affected or impaired thereby.
SECTION 11.11. Benefits of Indenture. Nothing in this Indenture or in
the Notes, express or implied, shall give to any Person, other than the
parties hereto and their successors hereunder, any Swap Counterparties and the
Noteholders, and any other party secured hereunder, and any other Person with
an ownership interest in any part of the Indenture Trust Estate, any benefit
or any legal or equitable right, remedy or claim under this Indenture. The
Administrator and any Swap Counterparties and their respective successors and
assigns shall each be an express third-party beneficiary to this Indenture and
shall be entitled to rely upon and directly enforce the provisions of this
Indenture; provided, however, that in the case of any Swap Counterparties,
such right to enforcement and the right to provide consents and waivers
pursuant to the provisions hereof or to take other actions as provided herein
are conditioned upon its not being in default under any Swap Agreements.
SECTION 11.12. Governing Law. This Indenture shall be construed in
accordance with the laws of the State of New York, without reference to its
conflict of law provisions, and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws.
SECTION 11.13. Counterparts. This Indenture may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
57
SECTION 11.14. Recording of Indenture. If this Indenture is subject
to recording in any appropriate public recording offices, such recording is to
be effected by the Issuer and at its expense and shall be accompanied by an
Opinion of Counsel (which may be counsel to the Indenture Trustee or any other
counsel reasonably acceptable to the Indenture Trustee) to the effect that
such recording is necessary either for the protection of the Noteholders, any
Swap Counterparties or any other Person secured hereunder or for the
enforcement of any right or remedy granted to the Indenture Trustee under this
Indenture.
SECTION 11.15. Trust Obligations. No recourse may be taken, directly
or indirectly, with respect to the obligations of the Issuer, the Seller, the
Depositor, the Administrator, the Servicer, the Eligible Lender Trustee or the
Indenture Trustee on the Notes or under this Indenture or any certificate or
other writing delivered in connection herewith or therewith, against (i) the
Seller, the Depositor, the Administrator, the Servicer, the Indenture Trustee
or the Eligible Lender Trustee in its individual capacity or (ii) any partner,
owner, beneficiary, agent, officer, director or employee of the Seller, the
Depositor, the Administrator, the Servicer, the Indenture Trustee or the
Eligible Lender Trustee in its individual capacity, any holder or owner of a
beneficial interest in the Issuer, the Eligible Lender Trustee or the
Indenture Trustee or of any successor or assign of the Seller, the Depositor,
Administrator, the Servicer, the Indenture Trustee or the Eligible Lender
Trustee in its individual capacity, except as any such Person may have
expressly agreed (it being understood that the Indenture Trustee and the
Eligible Lender Trustee have no such obligations in their individual capacity)
and except that any such partner, owner or beneficiary shall be fully liable,
to the extent provided by applicable law, for any unpaid consideration for
stock, unpaid capital contribution or failure to pay any installment or call
owing to such entity. For all purposes of this Indenture, in the performance
of any duties or obligations of the Issuer hereunder, the Eligible Lender
Trustee shall be subject to, and entitled to the benefits of, the terms and
provisions of Articles VI, VII and VIII of the Trust Agreement.
SECTION 11.16. No Petition. The Indenture Trustee, by entering into
this Indenture, and each Noteholder, by accepting a Note, hereby covenant and
agree that they will not at any time institute against the Depositor, the
Seller or the Issuer, or join in any institution against the Depositor, the
Seller or the Issuer of, any bankruptcy, reorganization, arrangement,
insolvency, receivership or liquidation proceedings, or other proceedings
under any United States Federal or state bankruptcy or similar law in
connection with any obligations relating to the Notes, this Indenture or any
of the other Basic Documents.
SECTION 11.17. Inspection. The Issuer agrees that, on reasonable
prior notice, it will permit any representative of the Indenture Trustee,
during the Issuer's normal business hours, to examine all the books of
account, records, reports, and other papers of the Issuer, to make copies and
extracts therefrom, to cause such books to be audited by Independent certified
public accountants, and to discuss the Issuer' affairs, finances and accounts
with the Issuer's officers, employees, and Independent certified public
accountants, all at such reasonable times and as often as may be reasonably
requested. The Indenture Trustee shall and shall cause its representatives to
hold in confidence all such information obtained from such examination or
inspection except to the extent disclosure may be required by law (and all
reasonable applications for confidential treatment are unavailing) and except
to the extent that the Indenture Trustee may reasonably determine that such
disclosure is consistent with its obligations hereunder.
58
SECTION 11.18. Consents. With respect to any action to be taken
hereunder that requires the consent of a party hereto or of the Eligible
Lender Trustee or any Swap Counterparties, such consent shall not be
unreasonably withheld, delayed or conditioned.
[Signatures Follow on Next Page]
59
IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused
this Indenture to be duly executed by their respective officers, thereunto
duly authorized and duly attested, all as of the day and year first above
written.
XXXXX FARGO STUDENT LOAN TRUST 2001-1
By: BANK ONE, NATIONAL ASSOCIATION, not in its individual
capacity but solely as Eligible Lender Trustee
By:
----------------------------------------------
Name:
Title:
CHASE MANHATTAN BANK,
not in its individual capacity but solely as
Indenture Trustee
By:
----------------------------------------------
Name:
Title:
Acknowledged and accepted as to the
Granting Clause as of the day and year
first above written:
BANK ONE, NATIONAL ASSOCIATION, not
in its Individual capacity but
solely as Eligible Lender Trustee
By:
-------------------------------------
Name:
Title:
00
XXXXX XX XXX XXXX )
) ss.:
COUNTY OF NEW YORK)
BEFORE ME, the undersigned authority, a Notary Public in and for said
county and state, on this day personally appeared ________________, known to
me to be the person and officer whose name is subscribed to the foregoing
instrument and acknowledged to me that the same was the act of the said Xxxxx
Fargo Student Loan Trust 2001-1, a Delaware trust, and that such person
executed the same as the act of said trust for the purpose and consideration
therein expressed, and in the capacities therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this [o]th day of [o] 200_.
--------------------------------
Notary Public in and for the
State of New York
[Seal]
My commission expires:
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK)
BEFORE ME, the undersigned authority, a Notary Public in and for said
county and state, on this day personally appeared _____________, known to me
to be the person and officer whose name is subscribed to the foregoing
instrument and acknowledged to me that the same was the act of the said Chase
Manhattan Bank, a New York banking corporation, and that such person executed
the same as the act of said corporation for the purpose and consideration
therein expressed, and in the capacities therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this [o]th day of [o] 2001
-------------------------------
Notary Public in and for the
State of New York
[Seal]
My commission expires:
EXHIBIT A-1
TO THE INDENTURE
[FORM OF CLASS A-1 NOTE]
CLASS A-1 NOTE
SEE REVERSE FOR CERTAIN DEFINITIONS
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer (as
defined below) or its agent for registration of transfer, exchange or payment,
and any Note issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF. THIS NOTE IS NOT
GUARANTEED OR INSURED BY ANY GOVERNMENTAL AGENCY.
REGISTERED CUSIP NO. _____________
$___________
No. R-
XXXXX FARGO STUDENT LOAN TRUST 2001-1
CLASS A-1 FLOATING RATE ASSET-BACKED SENIOR NOTES
Xxxxx Fargo Student Loan Trust 2001-1, a trust organized and existing
under the laws of the State of Delaware (herein referred to as the "Issuer"),
for value received, hereby promises to pay to ______________________________,
or registered assigns, the principal sum of __________________________________
DOLLARS payable on each Quarterly Payment Date in an amount equal to the
result obtained by multiplying (i) a fraction the numerator of which is
$___________ and the denominator of which is $______________ by (ii) the
aggregate amount, if any, payable to Noteholders on such Quarterly Payment
Date in respect of principal of the Class A-1 Notes pursuant to Section 3.01
of the Indenture dated as of November [o], 2001 (the "Indenture"), between the
Issuer and Chase Manhattan Bank, a New York banking corporation, as Indenture
Trustee (the "Indenture Trustee") (capitalized terms used but not defined
herein shall have the meanings ascribed thereto in the Indenture, which also
references rules as to usage that shall be applicable herein); provided,
however, that no principal shall be payable on this Note until after the end
of the Funding Period; and provided, further, that the entire unpaid principal
amount of this Note shall be due and payable on the [o] Quarterly Payment Date
(the
A-1-1
"Class A-1 Note Final Maturity Date") and the Redemption Date, if any,
pursuant to Section 10.01(b) or 10.01(c) of the Indenture.
The Issuer will pay interest on this Note, at the rate per annum
equal to the Class A-1 Note Rate (assigned on the reverse hereof), on each
Quarterly Payment Date until the principal of this Note is paid or made
available for payment, on the principal amount of this Note outstanding on the
preceding Quarterly Payment Date, after giving effect to all payments of
principal made on the preceding Quarterly Payment Date (or, in the case of the
first Quarterly Payment Date, on the Closing Date), subject to certain
limitations contained in Section 3.01 of the Indenture. Interest on this Note
will accrue for each Quarterly Payment Date from the most recent Quarterly
Payment Date on which interest has been paid to but excluding such Quarterly
Payment Date or, if no interest has yet been paid, from the Closing Date
(each, a "Quarterly Interest Period"). Interest on this Note will be computed
on the basis of the actual number of days elapsed in each Quarterly Interest
Period and a 360-day year. Such principal of and interest on this Note shall
be paid in the manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of
this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
A-1-2
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed, manually or in facsimile, as of the date set forth below.
XXXXX FARGO STUDENT LOAN TRUST 2001-1
By: BANK ONE, NATIONAL ASSOCIATION,
not in its individual capacity
but solely as Eligible Lender Trustee
under the Trust Agreement
By: _________________________________
Authorized Signatory
Date:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
CHASE MANHATTAN BANK, not in its
individual capacity but solely as
Indenture Trustee
By: _________________________________
Authorized Signatory
Date:
A-1-3
REVERSE OF NOTE
This Note is one of a duly authorized issue of Notes of the Issuer
designated as its Class A-1 Floating Rate Asset-Backed Senior Notes (herein
called the "Class A-1 Notes"), which, together with the Class A-2 Floating
Rate Asset-Backed Senior Notes (the "Class A-2 Notes" and, together with the
Class A-1 Notes, the "Senior Notes") and the Floating Rate Asset-Backed
Subordinate Notes (the "Subordinate Notes" and, together with the Senior
Notes, the "Notes") are issued under the Indenture, to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of
the respective rights and obligations thereunder of the Issuer, the Indenture
Trustee and the Noteholders. The Class A-1 Notes are subject to all terms of
the Indenture.
The Class A-1 Notes are and will be equally and ratably secured by
the collateral pledged as security therefor as provided in the Indenture.
Allocations of principal will be made among the Class A-1 Notes, the Class A-2
Notes and the Subordinate Notes as provided in the Indenture. The Senior Notes
collectively are senior in right of payment to the Subordinate Notes, all as
and to the extent provided in the Indenture.
Principal of the Class A-1 Notes will be payable on each Quarterly
Payment Date after the end of the Funding Period in an amount described in the
Indenture. "Quarterly Payment Date" means the [o] day of each January, April,
July and October, or, if any such date is not a Business Day, the next
succeeding Business Day, commencing [o].
As provided in the Indenture, the Class A-1 Notes may be redeemed in
part on the Quarterly Payment Date on which the Funding Period ends (or on the
Quarterly Payment Date on or immediately following the last day of the Funding
Period, if the Funding Period does not end on a Quarterly Payment Date) in the
event that any amount remains on deposit in the Prefunding Account after
giving effect to all Additional Fundings, including any Additional Fundings,
on such Quarterly Payment Date and payments to any Swap Counterparties of any
prior related unpaid Net Trust Swap Payment Carryover Shortfalls as of such
date.
As described on the face hereof, the entire unpaid principal amount
of this Note shall be due and payable on the Class A-1 Note Final Maturity
Date and the Redemption Date, if any, pursuant to Section 10.01(b) or 10.01(c)
of the Indenture. Notwithstanding the foregoing, the entire unpaid principal
amount of the Notes shall be due and payable on the date on which (i) an Event
of Default shall have occurred and be continuing and (ii) the Indenture
Trustee or the Noteholders representing not less than a majority of the
Outstanding principal amount of the Notes shall have declared the Notes to be
immediately due and payable in the manner provided in Section 5.02 of the
Indenture. All principal payments of the Class A-1 Notes shall be made pro
rata to the Class A-1 Noteholders entitled thereto.
Interest on the Class A-1 Notes will be payable on each Quarterly
Payment Date, commencing [o], on the principal amount outstanding of such
Notes until the principal amount thereof is paid in full, at a rate per annum
equal to the Class A-1 Note Rate. The "Class X- 0 Note Rate" for each
Quarterly Payment Date and the related LIBOR Reset Period shall be equal to
Three-Month LIBOR for the related LIBOR Reset Period plus [o]%.
A-1-4
Pursuant to the Administration Agreement, the Administrator will
determine Three-Month LIBOR for purposes of calculating the Class A-1 Note
Rate for (a) each Quarterly Interest Period other than the initial Quarterly
Interest Period on the second business day prior to the commencement of each
LIBOR Reset Period within such Quarterly Interest Period (or, in the case of
the initial LIBOR Reset Period, on the second business day prior the Closing
Date) and (b) with respect to the initial Quarterly Interest Period, as
determined pursuant to clause (a) for the period from the Closing Date to but
excluding [o]and as determined on the second Business Day prior to [o] for the
period from [o] to but excluding [o] (each, a "LIBOR Determination Date"). For
purposes of calculating Three-Month LIBOR, a business day is any day on which
banks in The City of New York and the City of London are open for the
transaction of international business. Interest due for any Quarterly Interest
Period will be determined based on the actual number of days in such Quarterly
Interest Period over a 360-day year.
"Three-Month LIBOR" means, with respect to any LIBOR Reset Period,
the London interbank offered rate for deposits in U.S. dollars having a
maturity of three months commencing on the related LIBOR Determination Date
(the "Index Maturity") which appears on Telerate Page 3750 as of 11:00 a.m.
London time, on such LIBOR Determination Date. If such rate does not appear on
Telerate Page 3750, the rate for that day will be determined on the basis of
the rates at which deposits in U.S. dollars, having the Index Maturity and in
a principal amount of not less than U.S. $1,000,000, are offered at
approximately 11:00 a.m. London time, on such LIBOR Determination Date to
prime banks in the London interbank market by the Reference Banks. The
Administrator will request the principal London office of each such Reference
Bank to provide a quotation of its rate. If at least two such quotations are
provided, the rate for that day will be the arithmetic mean of the quotations.
If fewer than two quotations are provided, the rate for that day will be the
arithmetic mean of the rates quoted by major banks in The City of New York,
selected by the Administrator, at approximately 11:00 a.m. New York time, on
such LIBOR Determination Date for loans in U.S. dollars to leading European
banks having the Index Maturity and in a principal amount equal to an amount
of not less than U.S. $1,000,000; provided, however, that if the banks
selected as aforesaid are not quoting as mentioned in this sentence,
Three-Month LIBOR in effect for the applicable LIBOR Reset Period will be
Three-Month LIBOR in effect for the previous LIBOR Reset Period.
"LIBOR Reset Period" means the three-month period commencing on the
[o]th day (or, if any such date is not a business day, on the next succeeding
business day) of each January, April, July and October and ending on the day
immediately preceding the following LIBOR Reset Period; provided, however,
that the initial LIBOR Reset Period will commence on the Closing Date.
"Telerate Page 3750" means the display page so designated on the Dow
Xxxxx Telerate Service (or such other page as may replace that page on that
service for the purpose of displaying comparable rates or prices).
"Reference Banks" means four major banks in the London interbank
market selected by the Administrator.
Payments of interest on this Note due and payable on each Quarterly
Payment Date, and payments of interest together with the installment of
principal, if any, due and payable on each
A-1-5
Quarterly Payment Date, to the extent not in full payment of this Note, shall
be made by wire transfer or check mailed to the Person whose name appears as
the Registered Holder of this Note (or one or more Predecessor Notes) on the
Note Register on the Record Date, except that with respect to Notes registered
on the Record Date in the name of the nominee of the Clearing Agency, unless
Definitive Notes have been issued (initially, such nominee to be Cede & Co.),
payments will be made by wire transfer in immediately available funds to the
account designated by such nominee. Such checks shall be mailed to the Person
entitled thereto at the address of such Person as it appears on the Note
Register as of the applicable Record Date without requiring that this Note be
submitted for notation of payment, and the mailing of such check shall
constitute payment of the amount thereof regardless of whether such check is
returned undelivered. Any reduction in the principal amount of this Note (or
any one or more Predecessor Notes) effected by any payments made on any
Quarterly Payment Date shall be binding upon all future Noteholders of this
Note and of any Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof, whether or not noted hereon. If funds are
expected to be available, as provided in the Indenture, for payment in full of
the then remaining unpaid principal amount of this Note on a Quarterly Payment
Date, then the Indenture Trustee, in the name of and on behalf of the Issuer,
will notify the Person who was the Noteholder hereof as of the Record Date
preceding such Quarterly Payment Date by notice mailed no later than five days
prior to such Quarterly Payment Date and the amount then due and payable shall
be payable only upon presentation and surrender of this Note at the Indenture
Trustee's Corporate Trust Office or at the office of the Indenture Trustee's
agent appointed for such purposes located in the Borough of Manhattan, The
City of New York.
The Issuer shall pay interest on overdue installments of interest at
the Class A-1 Note Rate to the extent lawful.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note
Register upon surrender of this Note for registration of transfer at the
office or agency designated by the Issuer pursuant to the Indenture, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Indenture Trustee duly executed by, the Noteholder hereof
or his attorney duly authorized in writing, with such signature guaranteed by
an "eligible guarantor institution" meeting the requirements of the Note
Registrar, which requirements include membership or participation in
Securities Transfer Agent's Medallion Program ("STAMP") or such other
"signature guarantee program" as may be determined by the Note Registrar in
addition to, or in substitution for, STAMP (all in accordance with the
Exchange Act), and such other documents as the Indenture Trustee may require,
and thereupon one or more new Notes of authorized denominations and in the
same aggregate principal amount will be issued to the designated transferee or
transferees. No service charge will be charged for any registration of
transfer or exchange of this Note, but the transferor may be required to pay a
sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any such registration of transfer or exchange.
Each Noteholder or Note Owner, by its acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in the Note, covenants and agrees
that no recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Seller, the Depositor, the Administrator, the
Servicer, the Eligible Lender Trustee or the Indenture Trustee on the Notes or
under the Indenture or any certificate or other writing delivered in
connection therewith, against
A-1-6
(i) the Seller, the Depositor, the Administrator, the Servicer, the Indenture
Trustee or the Eligible Lender Trustee in its individual capacity or (ii) any
partner, owner, beneficiary, agent, officer, director or employee of the
Seller, the Depositor, the Administrator, the Servicer, the Indenture Trustee
or the Eligible Lender Trustee in its individual capacity, any holder or owner
of a beneficial interest in the Issuer, the Eligible Lender Trustee or the
Indenture Trustee or of any successor or assign of the Seller, the Depositor,
the Administrator, the Servicer, the Indenture Trustee or the Eligible Lender
Trustee in its individual capacity, except as any such Person may have
expressly agreed (it being understood that the Indenture Trustee and the
Eligible Lender Trustee have no such obligations in their individual capacity)
and except that any such partner, owner or beneficiary shall be fully liable,
to the extent provided by applicable law, for any unpaid consideration for
stock, unpaid capital contribution or failure to pay any installment or call
owing to such entity.
Each Noteholder or Note Owner, by its acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note, covenants and agrees
that by accepting the benefits of the Indenture that such Noteholder or Note
Owner will not at any time institute against the Depositor, the Seller or the
Issuer, or join in any institution against the Depositor, the Seller or the
Issuer of, any bankruptcy, reorganization, arrangement, insolvency,
receivership or liquidation proceedings or other proceedings under any United
States federal or state bankruptcy or similar law in connection with any
obligations relating to the Notes, the Indenture or the other Basic Documents.
The Issuer has entered into this Indenture and this Note is issued
with the intention that, for federal, state, foreign, and local income and
franchise tax and usury purposes, this Note will be treated as indebtedness of
the Issuer secured by the Trust Estate. Each Noteholder, by its acceptance of
a Note (and each Note Owner by its acceptance of a beneficial interest in a
Note) agrees to treat this Note for federal, state, foreign and local income
and franchise tax and usury purposes as indebtedness of the Issuer secured by
the Trust Estate.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note (as of the day
of determination or as of such other date as may be specified in the
Indenture) is registered as the owner hereof for all purposes whether or not
this Note be overdue, and neither the Issuer, the Indenture Trustee nor any
such agent shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of
the Issuer and the rights of the Noteholders under the Indenture at any time
by the Issuer with the prior written consent of any Swap Counterparties and
the Noteholders representing a majority of the Outstanding Amount of all Notes
at the time outstanding. The Indenture also contains provisions permitting the
Noteholders representing specified percentages of the Outstanding Amount of
the Notes, on behalf of all the Noteholders, with the prior written consent of
any Swap Counterparties, to waive compliance by the Issuer with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the holder of this Note (or
any one or more Predecessor Notes) shall be conclusive and binding upon such
holder and upon all future holders of this Note and of any Note issued upon
the registration of transfer
A-1-7
hereof or in exchange hereof or in lieu hereof whether or not notation of such
consent or waiver is made upon this Note. The Indenture also permits the
Indenture Trustee to amend or waive certain terms and conditions set forth in
the Indenture with the consent of any Swap Counterparties but without the
consent of holders of the Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Indenture
Trustee and the Noteholders under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note shall be construed in accordance with the laws of the State
of New York, without reference to its conflict of law provisions, and the
obligations, rights and remedies of the parties hereunder and thereunder shall
be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note
at the times, place, and rate, and in the coin or currency, herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, none of Chase Manhattan Bank in its
individual capacity, Bank One, National Association in its individual
capacity, any owner of a beneficial interest in the Issuer, or any of their
respective partners, beneficiaries, agents, officers, directors, employees or
successors or assigns shall be personally liable for, nor shall recourse be
had to any of them for, the payment of principal of or interest on, or
performance of, or omission to perform, any of the covenants, obligations or
indemnifications contained in this Note or the Indenture; it being expressly
understood that said covenants, obligations and indemnifications have been
made by the Eligible Lender Trustee for the sole purposes of binding the
interests of the Eligible Lender Trustee in the assets of the Issuer. The
Noteholder of this Note by the acceptance hereof agrees that, except as
expressly provided in the Basic Documents, in the case of an Event of Default
under the Indenture, the Noteholder shall have no claim against any of the
foregoing for any deficiency, loss or claim therefrom; provided, however, that
nothing contained herein shall be taken to prevent recourse to, and
enforcement against, the assets of the Issuer for any and all liabilities,
obligations and undertakings contained in the Indenture or in this Note.
A-1-8
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto ________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints ______________________, attorney, to transfer said Note on the
books kept for registration thereof, with full power of substitution in the
premises.
Dated:_______________________________
__________________________________________*/
Signature Guaranteed:
__________________________________________*/
*/ NOTICE: The signature to this assignment must correspond with the
name of the registered owner as it appears on the face of the within
Note in every particular, without alteration, enlargement or any
change whatever. Such signature must be guaranteed by an "eligible
guarantor institution" meeting the requirements of the Note
Registrar, which requirements include membership or participation in
STAMP or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution
for, STAMP, all in accordance with the Securities Exchange Act of
1934, as amended.
X-0-0
XXXXXXX X-0
TO THE INDENTURE
[FORM OF CLASS A-2 NOTE]
CLASS A-2 NOTE
SEE REVERSE FOR CERTAIN DEFINITIONS
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer (as
defined below) or its agent for registration of transfer, exchange or payment,
and any Note issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF. THIS NOTE IS NOT
GUARANTEED OR INSURED BY ANY GOVERNMENTAL AGENCY.
REGISTERED CUSIP NO. __________
$___________
No. R-
XXXXX FARGO STUDENT LOAN TRUST 2001-1
CLASS A-2 FLOATING RATE ASSET-BACKED SENIOR NOTES
Xxxxx Fargo Student Loan Trust 2001-1, a trust organized and existing
under the laws of the State of Delaware (herein referred to as the "Issuer"),
for value received, hereby promises to pay to ______________________________,
or registered assigns, the principal sum of __________________________________
DOLLARS payable on each Quarterly Payment Date in an amount equal to the
result obtained by multiplying (i) a fraction the numerator of which is
$___________ and the denominator of which is $_____________ by (ii) the
aggregate amount, if any, payable to Noteholders on such Quarterly Payment
Date in respect of principal of the Class A-2 Notes pursuant to Section 3.01
of the Indenture dated as of November [o], 2001 (the "Indenture"), between the
Issuer and Chase Manhattan Bank , a New York banking corporation, as Indenture
Trustee (the "Indenture Trustee") (capitalized terms used but not defined
herein shall have the meanings ascribed thereto in the Indenture, which also
references rules as to usage that shall be applicable herein); provided,
however, that no principal shall be payable on this Note until after the end
of the Funding Period; and provided, further, that the entire unpaid principal
amount of this Note shall be due and payable on the [o] Quarterly Payment Date
(the
A-2-1
"Class A-2 Note Final Maturity Date") and the Redemption Date, if any,
pursuant to Section 10.01(b) or 10.01(c) of the Indenture.
The Issuer will pay interest on this Note, at the rate per annum
equal to the Class A-2 Note Rate (assigned on the reverse hereof), on each
Quarterly Payment Date until the principal of this Note is paid or made
available for payment, on the principal amount of this Note outstanding on the
preceding Quarterly Payment Date, after giving effect to all payments of
principal made on the preceding Quarterly Payment Date (or, in the case of the
first Quarterly Payment Date, on the Closing Date), subject to certain
limitations contained in Section 3.01 of the Indenture. Interest on this Note
will accrue for each Quarterly Payment Date from the most recent Quarterly
Payment Date on which interest has been paid to but excluding such Quarterly
Payment Date or, if no interest has yet been paid, from the Closing Date
(each, a "Quarterly Interest Period"). Interest on this Note will be computed
on the basis of the actual number of days elapsed in each Quarterly Interest
Period and a 360-day year. Such principal of and interest on this Note shall
be paid in the manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of
this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
A-2-2
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed, manually or in facsimile, as of the date set forth below.
XXXXX FARGO STUDENT LOAN TRUST 2001-1
By: BANK ONE, NATIONAL ASSOCIATION, not in its
individual capacity but solely as Eligible
Lender Trustee under the Trust Agreement
By: _________________________________
Authorized Signatory
Date:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
CHASE MANHATTAN BANK, not
in its individual capacity
but solely as Indenture
Trustee
By:_________________________________
Authorized Signatory Date:
A-2-3
REVERSE OF NOTE
This Note is one of a duly authorized issue of Notes of the Issuer
designated as its Class A-2 Floating Rate Asset-Backed Senior Notes (herein
called the "Class A-2 Notes"), which, together with the Class A-1 Floating
Rate Asset-Backed Senior Notes (the "Class A-1 Notes" and, together with the
Class A-2 Notes, the "Senior Notes") and the Floating Rate Asset-Backed
Subordinate Notes (the "Subordinate Notes" and, together with the Senior
Notes, the "Notes") are issued under the Indenture, to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of
the respective rights and obligations thereunder of the Issuer, the Indenture
Trustee and the Noteholders. The Class A-2 Notes are subject to all terms of
the Indenture.
The Class A-2 Notes are and will be equally and ratably secured by
the collateral pledged as security therefor as provided in the Indenture.
Allocations of principal will be made among the Class A-1 Notes, the Class A-2
Notes and the Subordinate Notes as provided in the Indenture. The Senior Notes
collectively are senior in right of payment to the Subordinate Notes, all as
and to the extent provided in the Indenture.
Principal of the Class A-2 Notes will be payable on each Quarterly
Payment Date after (i) the end of the Funding Period and (ii) the outstanding
principal amount of the Class A-1 Notes has been reduced to zero in an amount
described in the Indenture. "Quarterly Payment Date" means the [o] day of each
January, April, July and October, or, if any such date is not a Business Day,
the next succeeding Business Day, commencing [o].
As provided in the Indenture, the Class A-2 Notes may be redeemed in
part on the Quarterly Payment Date on which the Funding Period ends (or on the
Quarterly Payment Date on or immediately following the last day of the Funding
Period, if the Funding Period does not end on a Quarterly Payment Date) in the
event that any amount remains on deposit in the Prefunding Account after
giving effect to all Additional Fundings, including any Additional Fundings,
on such Quarterly Payment Date and payments to any Swap Counterparties of any
prior related unpaid Net Trust Swap Payment Carryover Shortfalls as of such
date.
As described on the face hereof, the entire unpaid principal amount
of this Note shall be due and payable on the Class A-2 Note Final Maturity
Date and the Redemption Date, if any, pursuant to Section 10.01(b) or 10.01(c)
of the Indenture. Notwithstanding the foregoing, the entire unpaid principal
amount of the Notes shall be due and payable on the date on which (i) an Event
of Default shall have occurred and be continuing and (ii) the Indenture
Trustee or the Noteholders representing not less than a majority of the
Outstanding principal amount of the Notes shall have declared the Notes to be
immediately due and payable in the manner provided in Section 5.02 of the
Indenture. All principal payments of the Class A-2 Notes shall be made pro
rata to the Class A-2 Noteholders entitled thereto.
Interest on the Class A-2 Notes will be payable on each Quarterly
Payment Date, commencing [o], on the principal amount outstanding of such
Notes until the principal amount thereof is paid in full, at a rate per annum
equal to the Class A-2 Note Rate. The "Class X- 0 Note Rate" for each
Quarterly Payment Date and the related LIBOR Reset Period shall be equal to
Three-Month LIBOR for the related LIBOR Reset Period plus [o]%.
A-2-4
Pursuant to the Administration Agreement, the Administrator will
determine Three-Month LIBOR for purposes of calculating the Class A-2 Note
Rate for (a) each Quarterly Interest Period other than the initial Quarterly
Interest Period on the second business day prior to the commencement of each
LIBOR Reset Period within such Quarterly Interest Period (or, in the case of
the initial LIBOR Reset Period, on the second business day prior the Closing
Date) and (b) with respect to the initial Quarterly Interest Period, as
determined pursuant to clause (a) for the period from the Closing Date to but
excluding [o] and as determined on the second Business Day prior to [o] for
the period from [o] to but excluding [o] (each, a "LIBOR Determination Date").
For purposes of calculating Three-Month LIBOR, a business day is any day on
which banks in The City of New York and the City of London are open for the
transaction of international business. Interest due for any Quarterly Interest
Period will be determined based on the actual number of days in such Quarterly
Interest Period over a 360-day year.
"Three-Month LIBOR" means, with respect to any LIBOR Reset Period,
the London interbank offered rate for deposits in U.S. dollars having a
maturity of three months commencing on the related LIBOR Determination Date
(the "Index Maturity") which appears on Telerate Page 3750 as of 11:00 a.m.
London time, on such LIBOR Determination Date. If such rate does not appear on
Telerate Page 3750, the rate for that day will be determined on the basis of
the rates at which deposits in U.S. dollars, having the Index Maturity and in
a principal amount of not less than U.S. $1,000,000, are offered at
approximately 11:00 a.m. London time, on such LIBOR Determination Date to
prime banks in the London interbank market by the Reference Banks. The
Administrator will request the principal London office of each such Reference
Bank to provide a quotation of its rate. If at least two such quotations are
provided, the rate for that day will be the arithmetic mean of the quotations.
If fewer than two quotations are provided, the rate for that day will be the
arithmetic mean of the rates quoted by major banks in The City of New York,
selected by the Administrator, at approximately 11:00 a.m. New York time, on
such LIBOR Determination Date for loans in U.S. dollars to leading European
banks having the Index Maturity and in a principal amount equal to an amount
of not less than U.S. $1,000,000; provided, however, that if the banks
selected as aforesaid are not quoting as mentioned in this sentence,
Three-Month LIBOR in effect for the applicable LIBOR Reset Period will be
Three-Month LIBOR in effect for the previous LIBOR Reset Period.
"LIBOR Reset Period" means the three-month period commencing on the
[o]th day (or, if any such date is not a business day, on the next succeeding
business day) of each January, April, July and October and ending on the day
immediately preceding the following LIBOR Reset Period; provided, however,
that the initial LIBOR Reset Period will commence on the Closing Date.
"Telerate Page 3750" means the display page so designated on the Dow
Xxxxx Telerate Service (or such other page as may replace that page on that
service for the purpose of displaying comparable rates or prices).
"Reference Banks" means four major banks in the London interbank
market selected by the Administrator.
Payments of interest on this Note due and payable on each Quarterly
Payment Date, and payments of interest together with the installment of
principal, if any, due and payable on each
A-2-5
Quarterly Payment Date, to the extent not in full payment of this Note, shall
be made by wire transfer or check mailed to the Person whose name appears as
the Registered Holder of this Note (or one or more Predecessor Notes) on the
Note Register on the Record Date, except that with respect to Notes registered
on the Record Date in the name of the nominee of the Clearing Agency, unless
Definitive Notes have been issued (initially, such nominee to be Cede & Co.),
payments will be made by wire transfer in immediately available funds to the
account designated by such nominee. Such checks shall be mailed to the Person
entitled thereto at the address of such Person as it appears on the Note
Register as of the applicable Record Date without requiring that this Note be
submitted for notation of payment, and the mailing of such check shall
constitute payment of the amount thereof regardless of whether such check is
returned undelivered. Any reduction in the principal amount of this Note (or
any one or more Predecessor Notes) effected by any payments made on any
Quarterly Payment Date shall be binding upon all future Noteholders of this
Note and of any Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof, whether or not noted hereon. If funds are
expected to be available, as provided in the Indenture, for payment in full of
the then remaining unpaid principal amount of this Note on a Quarterly Payment
Date, then the Indenture Trustee, in the name of and on behalf of the Issuer,
will notify the Person who was the Noteholder hereof as of the Record Date
preceding such Quarterly Payment Date by notice mailed no later than five days
prior to such Quarterly Payment Date and the amount then due and payable shall
be payable only upon presentation and surrender of this Note at the Indenture
Trustee's Corporate Trust Office or at the office of the Indenture Trustee's
agent appointed for such purposes located in the Borough of Manhattan, The
City of New York.
The Issuer shall pay interest on overdue installments of interest at
the Class A-2 Note Rate to the extent lawful.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note
Register upon surrender of this Note for registration of transfer at the
office or agency designated by the Issuer pursuant to the Indenture, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Indenture Trustee duly executed by, the Noteholder hereof
or his attorney duly authorized in writing, with such signature guaranteed by
an "eligible guarantor institution" meeting the requirements of the Note
Registrar, which requirements include membership or participation in
Securities Transfer Agent's Medallion Program ("STAMP") or such other
"signature guarantee program" as may be determined by the Note Registrar in
addition to, or in substitution for, STAMP (all in accordance with the
Exchange Act), and such other documents as the Indenture Trustee may require,
and thereupon one or more new Notes of authorized denominations and in the
same aggregate principal amount will be issued to the designated transferee or
transferees. No service charge will be charged for any registration of
transfer or exchange of this Note, but the transferor may be required to pay a
sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any such registration of transfer or exchange.
Each Noteholder or Note Owner, by its acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in the Note, covenants and agrees
that no recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Seller, the Depositor, the Administrator, the
Servicer, the Eligible Lender Trustee or the Indenture Trustee on the Notes or
under the Indenture or any certificate or other writing delivered in
connection therewith, against
A-2-6
(i) the Seller, the Depositor, the Administrator, the Servicer, the Indenture
Trustee or the Eligible Lender Trustee in its individual capacity or (ii) any
partner, owner, beneficiary, agent, officer, director or employee of the
Seller, the Depositor, the Administrator, the Servicer, the Indenture Trustee
or the Eligible Lender Trustee in its individual capacity, any holder or owner
of a beneficial interest in the Issuer, the Eligible Lender Trustee or the
Indenture Trustee or of any successor or assign of the Seller, the Company,
the Administrator, the Servicer, the Indenture Trustee or the Eligible Lender
Trustee in its individual capacity, except as any such Person may have
expressly agreed (it being understood that the Indenture Trustee and the
Eligible Lender Trustee have no such obligations in their individual capacity)
and except that any such partner, owner or beneficiary shall be fully liable,
to the extent provided by applicable law, for any unpaid consideration for
stock, unpaid capital contribution or failure to pay any installment or call
owing to such entity.
Each Noteholder or Note Owner, by its acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note, covenants and agrees
that by accepting the benefits of the Indenture that such Noteholder or Note
Owner will not at any time institute against the Depositor, the Seller or the
Issuer, or join in any institution against the Depositor, the Seller or the
Issuer of, any bankruptcy, reorganization, arrangement, insolvency,
receivership or liquidation proceedings or other proceedings under any United
States federal or state bankruptcy or similar law in connection with any
obligations relating to the Notes, the Indenture or the other Basic Documents.
The Issuer has entered into this Indenture and this Note is issued
with the intention that, for federal, state, foreign, and local income and
franchise tax and usury purposes, this Note will be treated as indebtedness of
the Issuer secured by the Trust Estate. Each Noteholder, by its acceptance of
a Note (and each Note Owner by its acceptance of a beneficial interest in a
Note) agrees to treat this Note for federal, state, foreign and local income
and franchise tax and usury purposes as indebtedness of the Issuer secured by
the Trust Estate.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note (as of the day
of determination or as of such other date as may be specified in the
Indenture) is registered as the owner hereof for all purposes whether or not
this Note be overdue, and neither the Issuer, the Indenture Trustee nor any
such agent shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of
the Issuer and the rights of the Noteholders under the Indenture at any time
by the Issuer with the prior written consent of any Swap Counterparties and
the Noteholders representing a majority of the Outstanding Amount of all Notes
at the time outstanding. The Indenture also contains provisions permitting the
Noteholders representing specified percentages of the Outstanding Amount of
the Notes, on behalf of all the Noteholders, with the prior written consent of
any Swap Counterparties, to waive compliance by the Issuer with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the holder of this Note (or
any one or more Predecessor Notes) shall be conclusive and binding upon such
holder and upon all future holders of this Note and of any Note issued upon
the registration of transfer
A-2-7
hereof or in exchange hereof or in lieu hereof whether or not notation of such
consent or waiver is made upon this Note. The Indenture also permits the
Indenture Trustee to amend or waive certain terms and conditions set forth in
the Indenture with the prior written consent of any Swap Counterparties but
without the consent of holders of the Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Indenture
Trustee and the Noteholders under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note shall be construed in accordance with the laws of the State
of New York, without reference to its conflict of law provisions, and the
obligations, rights and remedies of the parties hereunder and thereunder shall
be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note
at the times, place, and rate, and in the coin or currency, herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, none of Chase Manhattan Bank in its
individual capacity, Bank One, National Association in its individual
capacity, any owner of a beneficial interest in the Issuer, or any of their
respective partners, beneficiaries, agents, officers, directors, employees or
successors or assigns shall be personally liable for, nor shall recourse be
had to any of them for, the payment of principal of or interest on, or
performance of, or omission to perform, any of the covenants, obligations or
indemnifications contained in this Note or the Indenture; it being expressly
understood that said covenants, obligations and indemnifications have been
made by the Eligible Lender Trustee for the sole purposes of binding the
interests of the Eligible Lender Trustee in the assets of the Issuer. The
Noteholder of this Note by the acceptance hereof agrees that, except as
expressly provided in the Basic Documents, in the case of an Event of Default
under the Indenture, the Noteholder shall have no claim against any of the
foregoing for any deficiency, loss or claim therefrom; provided, however, that
nothing contained herein shall be taken to prevent recourse to, and
enforcement against, the assets of the Issuer for any and all liabilities,
obligations and undertakings contained in the Indenture or in this Note.
A-2-8
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of
assignee
_______________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto ___________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably
constitutes and appoints ______________________, attorney, to
transfer said Note on the books kept for registration thereof, with
full power of substitution in the premises.
Dated:
________________________________*/
Signature Guaranteed:
________________________________*/
*/ NOTICE: The signature to this assignment must correspond with the
name of the registered owner as it appears on the face of the within
Note in every particular, without alteration, enlargement or any
change whatever. Such signature must be guaranteed by an "eligible
guarantor institution" meeting the requirements of the Note
Registrar, which requirements include membership or participation in
STAMP or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution
for, STAMP, all in accordance with the Securities Exchange Act of
1934, as amended.
X-0-0
XXXXXXX X-0
TO THE INDENTURE
[FORM OF SUBORDINATE NOTE]
SUBORDINATE NOTE
SEE REVERSE FOR CERTAIN DEFINITIONS
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer (as
defined below) or its agent for registration of transfer, exchange or payment,
and any Note issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF. THIS NOTE IS NOT
GUARANTEED OR INSURED BY ANY GOVERNMENTAL AGENCY.
REGISTERED CUSIP NO. __________
$_______________
No. R-
XXXXX FARGO STUDENT LOAN TRUST 2001-1
CLASS B FLOATING RATE ASSET-BACKED SUBORDINATE NOTES
Xxxxx Fargo Student Loan Trust 2001-1, a trust organized and existing
under the laws of the State of Delaware (herein referred to as the "Issuer"),
for value received, hereby promises to pay to ______________________, or
registered assigns, the principal sum of
___________________________________________ DOLLARS payable on each Quarterly
Payment Date in an amount equal to the result obtained by multiplying (i) a
fraction the numerator of which is $____________ and the denominator of which
is $___________ by (ii) the aggregate amount, if any, payable to Noteholders
on such Quarterly Payment Date in respect of principal of the Subordinate
Notes pursuant to Section 3.01 of the Indenture dated as of November [o], 2001
(the "Indenture"), between the Issuer and Chase Manhattan Bank, a New York
banking corporation, as Indenture Trustee (the "Indenture Trustee")
(capitalized terms used but not defined herein shall have the meanings
ascribed thereto in the Indenture, which also references rules as to usage
that shall be applicable herein); provided, however, that no principal shall
be payable on this Note until the principal balance of the Senior Notes has
been paid in full; and provided, further, that the entire unpaid principal
amount of this Note shall be due and payable on the [o] Quarterly Payment Date
(the "Subordinate Note Final Maturity Date") and the Redemption Date, if any,
pursuant to Section 10.01(b) or 10.01(c) of the Indenture.
A-3-1
The Issuer will pay interest on this Note at the rate per annum equal
to the Subordinate Note Rate (as defined on the reverse hereof), on each
Quarterly Payment Date until the principal of this Note is paid or made
available for payment, on the principal amount of this Note outstanding on the
preceding Quarterly Payment Date, after giving effect to all payments of
principal made on the preceding Quarterly Payment Date (or, in the case of the
first Quarterly Payment Date, on the Closing Date), subject to certain
limitations contained in Section 3.01 of the Indenture. Interest on this Note
will accrue for each Quarterly Payment Date from the most recent Quarterly
Payment Date on which interest has been paid to but excluding such Quarterly
Payment Date or, if no interest has yet been paid, from the Closing Date
(each, a "Quarterly Interest Period"). Interest on this Note will be computed
on the basis of the actual number of days elapsed in each Quarterly Interest
Period and a 360-day year. Such principal of and interest on this Note shall
be paid in the manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of
this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
A-3-2
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed, manually or in facsimile, as of the date set forth below.
XXXXX FARGO STUDENT LOAN TRUST 2001-1
By: BANK ONE, NATIONAL ASSOCIATION,
not in its individual capacity but solely
as Eligible Lender Trustee under the
Trust Agreement
By: _____________________________________
Authorized Signatory
Date:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
CHASE MANHATTAN BANK, not in its
individual capacity but solely as Indenture
Trustee
By: ________________________________
Authorized Signatory Date:
A-3-3
REVERSE OF NOTE
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Floating Rate Asset-Backed Subordinate Notes (herein called
the "Subordinate Notes"), which, together with the Class A-1 Notes Floating
Rate Asset-Backed Senior Notes (the "Class A-1 Notes") and the Class A-2
Floating Rate Asset-Backed Senior Notes (the "Class A-2 Notes" and, together
with the Class A-1 Notes, the "Senior Notes"; the Senior Notes and the
Subordinate Notes, collectively, the "Notes") are issued under the Indenture,
to which Indenture and all indentures supplemental thereto reference is hereby
made for a statement of the respective rights and obligations thereunder of
the Issuer, the Indenture Trustee and the Noteholders. The Subordinate Notes
are subject to all terms of the Indenture.
The Subordinate Notes are and will be equally and ratably secured by
the collateral pledged as security therefor as provided in the Indenture.
Allocations of principal will be made among the Class A-1 Notes, the Class A-2
Notes and the Subordinate Notes as provided in the Indenture. The Senior Notes
collectively are senior in right of payment to the Subordinate Notes, all as
and to the extent provided in the Indenture.
Principal of the Subordinate Notes will be payable on each Quarterly
Date on or after the date on which the principal amount of the Senior Notes
has been paid in its entirety, in an amount described on the face hereof.
"Quarterly Payment Date" means the [o] day of each January, April, July and
October, or, if any such date is not a Business Day, the next succeeding
Business Day, commencing [o].
As provided in the Indenture, the Subordinate Notes may be redeemed
in part on the Quarterly Payment Date on which the Funding Period ends (or on
the Quarterly Payment Date on or immediately following the last day of the
Funding Period, if the Funding Period does not end on a Quarterly Payment
Date) in the event that any amount remains on deposit in the Prefunding
Account after giving effect to all Additional Fundings, including any
Additional Fundings, on such Quarterly Payment Date and payments to any Swap
Counterparties of any prior related unpaid Net Trust Swap Payment Carryover
Shortfalls as of such date.
As described on the face hereof, the entire unpaid principal amount
of this Note shall be due and payable on the Subordinate Note Final Maturity
Date and the Redemption Date, if any, pursuant to Section 10.01(b) or 10.01(c)
of the Indenture. Notwithstanding the foregoing, the entire unpaid principal
amount of the Notes shall be due and payable on the date on which (i) an Event
of Default shall have occurred and be continuing and (ii) the Indenture
Trustee or the Noteholders representing not less than a majority of the
Outstanding principal amount of the Notes shall have declared the Notes to be
immediately due and payable in the manner provided in Section 5.02 of the
Indenture. All principal payments of the Subordinate Notes shall be made pro
rata to the Subordinate Noteholders entitled thereto.
Interest on the Subordinate Notes will be payable on each Quarterly
Payment Date, commencing [o], on the principal amount outstanding of such
Notes until the principal amount thereof is paid in full, at a rate per annum
equal to the Subordinate Note Rate. The "Subordinate Note Rate" for each
Quarterly Payment Date and the related LIBOR Reset Period shall be equal to
Three-Month LIBOR for the related LIBOR Reset Period plus [o]%; provided that
if the
A-3-4
Subordinate Note Trigger is triggered on any date, the Subordinate Note Rate
shall equal zero until the Subordinate Note Trigger is no longer triggered.
Pursuant to the Administration Agreement, the Administrator will
determine Three-Month LIBOR for purposes of calculating the Subordinate Note
Rate (a) each Quarterly Interest Period other than the initial Quarterly
Interest Period on the second business day prior to the commencement of each
LIBOR Reset Period within such Quarterly Interest Period (or, in the case of
the initial LIBOR Reset Period, on the second business day prior the Closing
Date) and (b) with respect to the initial Quarterly Interest Period, as
determined pursuant to clause (a) for the period from the Closing Date to but
excluding [o] and as determined on the second Business Day prior to [o] for
the period from [o] to but excluding [o] (each, a "LIBOR Determination Date").
For purposes of calculating Three-Month LIBOR, a business day is any day on
which banks in The City of New York and the City of London are open for the
transaction of international business. Interest due for any Quarterly Interest
Period will be determined based on the actual number of days in such Quarterly
Interest Period over a 360-day year.
"Three-Month LIBOR" means, with respect to any LIBOR Reset Period,
the London interbank offered rate for deposits in U.S. dollars having a
maturity of three months commencing on the related LIBOR Determination Date
(the "Index Maturity") which appears on Telerate Page 3750 as of 11:00 a.m.
London time, on such LIBOR Determination Date. If such rate does not appear on
Telerate Page 3750, the rate for that day will be determined on the basis of
the rates at which deposits in U.S. dollars, having the Index Maturity and in
a principal amount of not less than U.S. $1,000,000, are offered at
approximately 11:00 a.m. London time, on such LIBOR Determination Date to
prime banks in the London interbank market by the Reference Banks. The
Administrator will request the principal London office of each such Reference
Bank to provide a quotation of its rate. If at least two such quotations are
provided, the rate for that day will be the arithmetic mean of the quotations.
If fewer than two quotations are provided, the rate for that day will be the
arithmetic mean of the rates quoted by major banks in The City of New York,
selected by the Administrator, at approximately 11:00 a.m. New York time, on
such LIBOR Determination Date for loans in U.S. dollars to leading European
banks having the Index Maturity and in a principal amount equal to an amount
of not less than U.S. $1,000,000; provided, however, that if the banks
selected as aforesaid are not quoting as mentioned in this sentence,
Three-Month LIBOR in effect for the applicable LIBOR Reset Period will be
Three-Month LIBOR in effect for the previous LIBOR Reset Period.
"LIBOR Reset Period" means the three-month period commencing on the
[o]th day (or, if any such date is not a business day, on the next succeeding
business day) of each January, April, July and October and ending on the day
immediately preceding the following LIBOR Reset Period; provided, however,
that the initial LIBOR Reset Period will commence on the Closing Date.
"Telerate Page 3750" means the display page so designated on the Dow
Xxxxx Telerate Service (or such other page as may replace that page on that
service for the purpose of displaying comparable rates or prices).
"Reference Banks" means four major banks in the London interbank
market selected by the Administrator.
A-3-5
Payments of interest on this Note due and payable on each Quarterly
Payment Date, and payments of interest together with the installment of
principal, if any, due and payable on each Quarterly Payment Date, to the
extent not in full payment of this Note, shall be made, if the original
principal amount of this Note is $1,000,000 or more, by wire transfer and
otherwise by check mailed to the Person whose name appears as the Registered
Holder of this Note (or one or more Predecessor Notes) on the Note Register on
the Record Date. Such checks shall be mailed to the Person entitled thereto at
the address of such Person as it appears on the Note Register as of the
applicable Record Date without requiring that this Note be submitted for
notation of payment, and the mailing of such check shall constitute payment of
the amount thereof regardless of whether such check is returned undelivered.
Any reduction in the principal amount of this Note (or any one or more
Predecessor Notes) effected by any payments made on any Quarterly Payment Date
shall be binding upon all future Noteholders of this Note and of any Note
issued upon the registration of transfer hereof or in exchange hereof or in
lieu hereof, whether or not noted hereon. If funds are expected to be
available, as provided in the Indenture, for payment in full of the then
remaining unpaid principal amount of this Note on a Quarterly Payment Date,
then the Indenture Trustee, in the name of and on behalf of the Issuer, will
notify the Person who was the Noteholder hereof as of the Record Date
preceding such Quarterly Payment Date by notice mailed no later than five days
prior to such Quarterly Payment Date and the amount then due and payable shall
be payable only upon presentation and surrender of this Note at the Indenture
Trustee's Corporate Trust Office or at the office of the Indenture Trustee's
agent appointed for such purposes located in the Borough of Manhattan, The
City of New York.
The Issuer shall pay interest on overdue installments of interest at
the Subordinate Note Rate to the extent lawful.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note
Register upon surrender of this Note for registration of transfer at the
office or agency designated by the Issuer pursuant to the Indenture, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Indenture Trustee duly executed by, the Noteholder hereof
or his attorney duly authorized in writing, with such signature guaranteed by
an "eligible guarantor institution" meeting the requirements of the Note
Registrar, which requirements include membership or participation in
Securities Transfer Agent's Medallion Program ("STAMP") or such other
"signature guarantee program" as may be determined by the Note Registrar in
addition to, or in substitution for, STAMP (all in accordance with the
Exchange Act), and such other documents as the Indenture Trustee may require,
and thereupon one or more new Notes of authorized denominations and in the
same aggregate principal amount will be issued to the designated transferee or
transferees. No service charge will be charged for any registration of
transfer or exchange of this Note, but the transferor may be required to pay a
sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any such registration of transfer or exchange.
Each Noteholder, by its acceptance of a Note, covenants and agrees
that no recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Seller, the Company, the Administrator, the
Servicer, the Eligible Lender Trustee or the Indenture Trustee on the Notes or
under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Seller, the Depositor, the
Administrator, the Servicer, the Indenture Trustee or the Eligible Lender
Trustee in its individual capacity or (ii) any partner, owner,
A-3-6
beneficiary, agent, officer, director or employee of the Seller, the
Depositor, the Administrator, the Servicer, the Indenture Trustee or the
Eligible Lender Trustee in its individual capacity, any holder or owner of a
beneficial interest in the Issuer, the Eligible Lender Trustee or the
Indenture Trustee or of any successor or assign of the Seller, the Depositor,
the Administrator, the Servicer, the Indenture Trustee or the Eligible Lender
Trustee in its individual capacity, except as any such Person may have
expressly agreed (it being understood that the Indenture Trustee and the
Eligible Lender Trustee have no such obligations in their individual capacity)
and except that any such partner, owner or beneficiary shall be fully liable,
to the extent provided by applicable law, for any unpaid consideration for
stock, unpaid capital contribution or failure to pay any installment or call
owing to such entity.
Each Noteholder, by its acceptance of a Note, covenants and agrees
that by accepting the benefits of the Indenture that such Noteholder or Note
Owner will not at any time institute against the Depositor, the Seller or the
Issuer, or join in any institution against the Depositor, the Seller or the
Issuer of, any bankruptcy, reorganization, arrangement, insolvency,
receivership or liquidation proceedings or other proceedings under any United
States federal or state bankruptcy or similar law in connection with any
obligations relating to the Notes, the Indenture or the other Basic Documents.
The Issuer has entered into this Indenture and this Note is issued
with the intention that, for federal, state, foreign, and local income and
franchise tax and usury purposes, this Note will be treated as indebtedness of
the Issuer secured by the Trust Estate. Each Noteholder, by its acceptance of
a Note, agrees to treat this Note for federal, state, foreign and local income
and franchise tax and usury purposes as indebtedness of the Issuer secured by
the Trust Estate.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note (as of the day
of determination or as of such other date as may be specified in the
Indenture) is registered as the owner hereof for all purposes whether or not
this Note be overdue, and none of the Issuer, the Indenture Trustee or any
such agent shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of
the Issuer and the rights of the Noteholders under the Indenture at any time
by the Issuer with the prior written consent of any Swap Counterparties and
the Noteholders representing a majority of the Outstanding Amount of all Notes
at the time outstanding. The Indenture also contains provisions permitting the
Noteholders representing specified percentages of the Outstanding Amount of
the Notes, on behalf of all the Noteholders, with the prior written consent of
any Swap Counterparties, to waive compliance by the Issuer with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the holder of this Note (or
any one or more Predecessor Notes) shall be conclusive and binding upon such
holder and upon all future holders of this Note and of any Note issued upon
the registration of transfer hereof or in exchange hereof or in lieu hereof
whether or not notation of such consent or waiver is made upon this Note. The
Indenture also permits the Indenture Trustee to amend or waive certain terms
and conditions set forth in the Indenture with the prior written consent of
any Swap Counterparties but without the consent of holders of the Notes issued
thereunder.
A-3-7
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Indenture
Trustee and the Noteholders under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note shall be construed in accordance with the laws of the State
of New York, without reference to its conflict of law provisions, and the
obligations, rights and remedies of the parties hereunder and thereunder shall
be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note
at the times, place, and rate, and in the coin or currency, herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, none of Chase Manhattan Bank in its
individual capacity, Bank One, National Association in its individual
capacity, any owner of a beneficial interest in the Issuer, or any of their
respective partners, beneficiaries, agents, officers, directors, employees or
successors or assigns shall be personally liable for, nor shall recourse be
had to any of them for, the payment of principal of or interest on, or
performance of, or omission to perform, any of the covenants, obligations or
indemnifications contained in this Note or the Indenture; it being expressly
understood that said covenants, obligations and indemnifications have been
made by the Eligible Lender Trustee for the sole purposes of binding the
interests of the Eligible Lender Trustee in the assets of the Issuer. The
Noteholder of this Note by the acceptance hereof agrees that, except as
expressly provided in the Basic Documents, in the case of an Event of Default
under the Indenture, the Noteholder shall have no claim against any of the
foregoing for any deficiency, loss or claim therefrom; provided, however, that
nothing contained herein shall be taken to prevent recourse to, and
enforcement against, the assets of the Issuer for any and all liabilities,
obligations and undertakings contained in the Indenture or in this Note.
A-3-8
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of
assignee
_______________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns
and transfers unto _________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably
constitutes and appoints ______________________, attorney, to
transfer said Note on the books kept for registration thereof, with
full power of substitution in the premises.
Dated:_________________
________________________________________*/
Signature Guaranteed:
________________________________________*/
*/ NOTICE: The signature to this assignment must correspond with the
name of the registered owner as it appears on the face of the within
Note in every particular, without alteration, enlargement or any
change whatever. Such signature must be guaranteed by an "eligible
guarantor institution" meeting the requirements of the Note
Registrar, which requirements include membership or participation in
STAMP or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution
for, STAMP, all in accordance with the Securities Exchange Act of
1934, as amended.
A-3-9
EXHIBIT B TO THE INDENTURE
Depository Agreement
B-1
CROSS-REFERENCE TABLE*
TIA Indenture
Section Section
310(a)(1) 6.11
(a)(2) 6.11
(a)(3) 6.10
(a)(3) N.A.**
(a)(3) 6.111
(b) 6.08;
6.10' 6.11
(c) N.A.
311(a) 6.11
(b) 6.11
(c) N.A.
312(a) 7.01;
