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EXHIBIT 10.4
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INDENTURE
Dated as of June 14, 1999
among
EFG-II, LP,
as Issuer,
and
THE FIRST NATIONAL BANK OF CHICAGO,
as Indenture Trustee and Eligible Lender Trustee,
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TABLE OF CONTENTS
Page
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Article I
THE NOTES
Section 1.01. Form of Notes..........................................................................3
Section 1.02. Execution, Authentication and Delivery.................................................3
Section 1.03. Registration; Registration of Transfer and Exchange....................................4
Section 1.04. Mutilated, Destroyed, Lost or Stolen Notes.............................................5
Section 1.05. Persons Deemed Owner...................................................................6
Section 1.06. Certain Issuance and Transfer Restrictions.............................................6
Section 1.07. Legending of Notes.....................................................................8
Section 1.08. Provision of Information to Prospective Purchasers of the
Notes; Rule 144A Matters...............................................................9
Section 1.09. Cancellation...........................................................................9
Section 1.10. Book-Entry Notes.......................................................................9
Section 1.11. Notices to Clearing Agency............................................................10
Section 1.12. Definitive Notes......................................................................10
Section 1.13. Payment of Principal and Interest; Defaulted Interest;
Noteholders' Interest Basis Carryover.................................................11
Article II
REPRESENTATIONS AND WARRANTIES
Section 2.01. Representations and Warranties of the Issuer..........................................14
Section 2.02. Reassignment upon Breach..............................................................16
Section 2.03. Representations and Warranties of General Partner.....................................17
Section 2.04. Representations and Warranties of Indenture Trustee...................................18
Section 2.05. Representations and Warranties of Eligible Lender Trustee.............................18
Article III
GENERAL COVENANTS OF THE ISSUER
Section 3.01. Payment to Noteholders................................................................19
Section 3.02. Money for Payments to Be Held in Trust................................................19
Section 3.03. Existence.............................................................................20
Section 3.04. Protection of Indenture Trust Estate..................................................21
Section 3.05. Performance of Obligations............................................................21
Section 3.06. Reporting Requirements of the Issuer..................................................23
Section 3.07. Servicing Covenants...................................................................25
Section 3.08. Negative Covenants of the Issuer......................................................26
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Section 3.09. Issuer May Consolidate, etc...........................................................26
Section 3.10. Successor or Transferee...............................................................28
Section 3.11. No Other Business.....................................................................28
Section 3.12. No Borrowing..........................................................................28
Section 3.13. Guarantees, Loans, Advances and Other Liabilities.....................................29
Article IV
SATISFACTION AND DISCHARGE
Section 4.01. Satisfaction and Discharge of Indenture...............................................30
Section 4.02. Application of Trust Money............................................................31
Section 4.03. Repayment of Monies Held by Paying Agent..............................................31
Article V
REMEDIES
Section 5.01. Events of Default.....................................................................32
Section 5.02. Acceleration of Maturity; Rescission and Annulment....................................33
Section 5.03. Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee.....................................................................34
Section 5.04. Remedies; Priorities..................................................................36
Section 5.05. Optional Preservation of the Indenture Trust Estate...................................38
Section 5.06. Limitation of Suits...................................................................38
Section 5.07. Unconditional Rights of Noteholders to Receive Principal and
Interest..............................................................................39
Section 5.08. Restoration of Rights and Remedies....................................................39
Section 5.09. Rights and Remedies Cumulative........................................................39
Section 5.10. Delay or Omission Not a Waiver........................................................40
Section 5.11. Control by Noteholders................................................................40
Section 5.12. Waiver of Past Defaults...............................................................40
Section 5.13. Undertaking for Costs.................................................................41
Section 5.14. Waiver of Stay or Extension Laws......................................................41
Section 5.15. Action on Notes.......................................................................42
Section 5.16. Performance and Enforcement of Certain Obligations....................................42
Article VI
INDENTURE TRUSTEE
Section 6.01. Acceptance of the Trusts..............................................................43
Section 6.02. Fees, Charges and Expenses of Indenture Trustee.......................................45
Section 6.03. Notice if Default Occurs..............................................................45
Section 6.04. Intervention by Indenture Trustee.....................................................45
Section 6.05. Successors............................................................................45
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Section 6.06. Resignation...........................................................................45
Section 6.07. Removal...............................................................................46
Section 6.08. Appointment of Successor..............................................................46
Section 6.09. Concerning Any Successor..............................................................46
Section 6.10. Appointment of Co-Trustee.............................................................46
Section 6.11. Successor Indenture Trustee as Trustee of Funds.......................................47
Section 6.12. Indemnification.......................................................................47
Section 6.13. Eligibility Requirements for Indenture Trustee........................................48
Article VII
RESERVED
Article VIII
SETTLEMENTS
Section 8.01. Trust Accounts; Investments by Indenture Trustee......................................50
Section 8.02. Collection of Moneys..................................................................51
Section 8.03. Collection Account; Class A-2 Distribution Account....................................52
Section 8.04. Reserve Account.......................................................................55
Section 8.05. Pre-Funding Account...................................................................56
Section 8.06. Claims on the Insurance Policy........................................................56
Section 8.07. Rights in Respect of Insolvency Proceedings...........................................57
Section 8.08. Effect of Payments by the Insurer; Subrogation........................................58
Section 8.09. Capitalized Interest Account..........................................................58
Article IX
REDEMPTION
Section 9.01. Redemption............................................................................59
Section 9.02. Form of Redemption Notice.............................................................59
Section 9.03. Notes Payable on Redemption Date......................................................60
Article X
MISCELLANEOUS
Section 10.01. Amendments, Etc.......................................................................61
Section 10.02. Notices, Etc..........................................................................62
Section 10.03. No Waiver; Remedies...................................................................63
Section 10.04. Binding Effect; Survival..............................................................63
Section 10.05. Costs, Expenses and Taxes.............................................................63
Section 10.06. No Proceedings........................................................................63
Section 10.07. Captions and Cross References.........................................................64
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Section 10.08. Integration...........................................................................64
Section 10.09. Governing Law.........................................................................64
Section 10.10. Waiver of Jury Trial..................................................................64
Section 10.11. Execution in Counterparts.............................................................64
Section 10.12. Usury.................................................................................64
Section 10.13. Compliance Certificates and Opinions..................................................65
Section 10.14. Certain Matters Regarding the Insurer and The Insurance Policy........................65
APPENDICES
APPENDIX A Definitions
APPENDIX B Auction Procedures
APPENDIX C Student Loan Schedule
SCHEDULE
SCHEDULE 2.01(k) List of Offices of the Issuer where Records Are Kept
EXHIBITS
EXHIBIT 1.01(a) Form of Class A-1 Note
EXHIBIT 1.01(b) Form of Class A-2 Note
EXHIBIT 1.06(b) Form of Transfer Certificate
EXHIBIT 3.06(d) Form of Monthly Report
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INDENTURE
Dated as of June 14, 1999
THIS IS AN INDENTURE, among EFG-II, LP, a Delaware limited partnership,
("Issuer") and THE FIRST NATIONAL BANK OF CHICAGO, a national banking
association ("First Chicago"), as indenture trustee hereunder (in such capacity,
and together with any successor thereto in such capacity, the "Indenture
Trustee") and as eligible lender trustee (in such capacity, and together with
any successor thereto in such capacity, the "Eligible Lender Trustee"). Unless
otherwise indicated, capitalized terms used in this Indenture are defined in
Appendix A.
BACKGROUND
(i) The Issuer is a limited partnership with Educational Finance Group,
Inc., a Delaware corporation ("EFG") as its Limited Partner and EFG-II SPC-I,
Inc., a Delaware corporation, as its General Partner (the "General Partner").
(ii) Pursuant to the Purchase and Contribution Agreement, First
Chicago, in its capacity as Eligible Lender Trustee, has purchased, at the
direction of and on behalf of the Issuer, from First Chicago, in its capacity as
eligible lender trustee for EFG, Student Loans. The legal title of the Student
Loans are held or will be held by the Eligible Lender Trustee on behalf of the
Issuer.
(iii) The Issuer intends to finance the purchase of the Student Loans
by issuing the Class A-1 Notes and the Class A-2 Notes, which it will sell to
Xxxxxx Brothers Inc., as initial purchaser, pursuant to a Note Purchase
Agreement. The principal of and interest on the Notes will be secured by the
Financed Student Loans and other Collateral.
(iv) First Chicago has been requested, and is willing, to act as the
Indenture Trustee.
(v) MBIA Insurance Corporation, a stock insurance company organized and
created under the laws of the State of New York, has been requested and will
issue for the benefit of the Class A Noteholders, its Insurance Policy with
respect to the Class A Notes.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the parties hereto agree as follows:
GRANTING CLAUSE
The Issuer and, with respect to the legal title of the Student Loans,
the Eligible Lender Trustee hereby Grant to the Indenture Trustee at the Closing
Date, as trustee for the benefit of
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the Noteholders and the Insurer, all the Issuer's right, title and interest in
and to, but none of its obligations under, the following:
(i) the Financed Student Loans, and all obligations of the Obligors
thereunder including all monies paid thereunder on and after the Cutoff Date
(or, in the case of Additional Financed Student Loans, on and after the related
Subsequent Cutoff Date), including all Subsidy Payments and all Related Security
with respect thereto;
(ii) the Purchase and Contribution Agreement;
(iii) the Master Servicing Agreement;
(iv) each Student Loan Guarantee Agreement with respect to the Financed
Student Loans, including the right of the Issuer and the Eligible Lender Trustee
to cause the related Student Loan Guarantor to make Guarantee Payments in
respect of the Financed Student Loans;
(v) the Trust Agreement;
(vi) all funds on deposit from time to time in the Trust Accounts and
in all investments and proceeds thereof (including all income thereon);
(vii) all books and records (including computer tapes and disks)
related to the foregoing; and
(viii) all present and future claims, demands, causes and choses in
action in respect of any or all of the foregoing and all payments on or under
and all proceeds of every kind and nature whatsoever in respect of any or all of
the foregoing, including all proceeds of the conversion, voluntary or
involuntary, into cash or other liquid property, all cash proceeds, Trust
Accounts, Trust Accounts receivable, notes, drafts, acceptances, chattel paper,
checks, deposit Trust Accounts, insurance proceeds, condemnation awards, rights
to payment of any and every kind and other forms of obligations and receivables,
instruments and other property which at any time constitute all or part of or
are included in the proceeds of any of the foregoing (collectively, the
"Collateral").
The foregoing Grant is made in trust to secure the payment of principal
of and interest on, and any other amounts owing in respect of, the Notes,
equally and ratably without prejudice, priority or distinction and to secure
compliance with the provisions of this Indenture, subject to, and as further
provided in this Indenture.
The Indenture Trustee, as Indenture Trustee on behalf of the
Noteholders, acknowledges such Grant, accepts the trusts under this Indenture in
accordance with the provisions of this Indenture and agrees to perform its
duties required in this Indenture to the best of its ability to the end that the
interests of the Noteholders may be adequately and effectively protected.
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Article I
THE NOTES
Section 1.01. Form of Notes.
(a) The Class A-1 Notes and Class A-2 Notes, in each case together with
the Indenture Trustee's certificate of authentication, shall be in substantially
the form set forth in Exhibit 1.01(a) and Exhibit 1.01(b), 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 Authorized Officer of the
General Partner executing such Notes on behalf of the Issuer, as evidenced by
such Authorized Officer's execution of such Notes. The Notes shall be issued on
the Closing Date in minimum denominations of $10,000 and integral multiples of
$10,000 in excess thereof, and will be available in book-entry form only.
(b) With respect to each Class of Notes, the Indenture Trustee shall
record in its records the interest rate for each Interest Period with respect to
such Class, each repayment thereof, and the other information provided for
thereon. The 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 Authorized Officer of the General Partner
executing each such Note on behalf of the Issuer, as evidenced by such
Authorized Officer's execution of such Note. Each Note shall be dated the date
of its authentication, and the terms of the Notes set forth in Exhibits 1.01(a)
and 1.01(b) are part of the terms of this Indenture.
Section 1.02. Execution, Authentication and Delivery.
(a) Execution of the Notes. The Notes shall be executed on behalf of
the Issuer by any of the Authorized Officers of the General Partner. The
signature of any such Authorized Officer on any Note may be original or
facsimile. Any Note bearing the original or facsimile signature of an individual
who was at any time an Authorized Officer of the General Partner of the Issuer
shall bind the Issuer, notwithstanding that such individual has ceased to hold
such office prior to the authentication and delivery of such Note or did not
hold such offices at the date of such Note.
(b) Authentication of the Notes. The Indenture Trustee shall upon
receipt of the Issuer Order, authenticate and deliver (i) the Class A-1 Notes
for original issue in an aggregate principal amount of $159,730,000 (the "Class
A-1 Original Note Principal Amount") and (ii) the Class A-2 Notes for original
issue in an aggregate principal amount of $159,730,000 (the "Class A-2 Original
Note Principal Amount"). The aggregate principal amount of each Class of Notes
outstanding at any time shall not exceed its respective Original Note Principal
Amount except as provided in Section 1.04. Each of the Notes shall be dated the
date of its
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authentication. No Note shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose, unless there appears attached to such
Note a certificate of authentication substantially in the form provided for
herein executed by the Indenture Trustee by the manual signature of one of its
authorized signatories, and such certificate attached to any such Note shall be
conclusive evidence, and the only evidence, that such Note has been duly
authenticated and delivered hereunder.
Section 1.03. Registration; Registration of Transfer and Exchange.
(a) Note Register; Note Registrar. 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 the Notes
and the registration of transfers of the Notes. The Indenture Trustee shall be
"Note Registrar" for the purpose of registering Notes and transfers of the
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.
(b) Appointment 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. 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 related principal amounts and numbers of such Notes.
(c) Transfer of the Notes. Upon surrender for registration or transfer
of a Note at the office or agency of the Issuer to be maintained as provided in
Section 1.03(e), and if the requirements of Section 8-401(l) of the UCC are met,
the Issuer shall execute and cause the Indenture Trustee to authenticate a new
Note, in any authorized denominations of like aggregate principal amount. Any
Note issued upon any registration of transfer thereof shall be the valid
obligation of the Issuer, evidencing the same debt, and entitled to the same
benefits under this Indenture, as the Note surrendered upon such registration of
transfer. 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.
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(d) No Service Charge. No service charge shall be made to a Noteholder,
for any registration of transfer or exchange of any Note, but the Note Registrar
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 a Note.
(e) Maintenance of Office or Agency. The Issuer will maintain in New
York, New York, an office or agency where the Notes may be surrendered for
registration of transfer thereof, 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 1.04. Mutilated, Destroyed, Lost or Stolen Notes.
(a) Replacement of 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 and the Issuer such security or indemnity as
may be required by them 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; provided, however, that if any such destroyed,
lost or stolen Note, but not a mutilated Note, shall have become or within seven
days shall be due and payable, the Issuer may, instead of issuing a replacement
Note, direct the Indenture Trustee, in writing, to pay such destroyed, lost or
stolen Note when so due or payable without surrender thereof. If, after the
delivery of a replacement Note or payment of a destroyed, lost or stolen Note or
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 such
original Note for payment, the Issuer and the Indenture Trustee shall be
entitled to recover such replacement Note (or such payment) from the Person to
whom it was delivered or any Person taking such replacement Note from such
Person to whom such replacement Note was delivered or any assignee of such
Person, except a bona fide purchaser, and shall be entitled to recover upon the
security or indemnity provided therefor to the extent of any loss, damage, cost
or expense incurred by the Issuer or the Indenture Trustee in connection
therewith.
(b) Payment of Tax. Upon the issuance of any replacement Note under
this Section, the Issuer or the Indenture Trustee may require the payment by the
related Noteholder
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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 or the Note Registrar) connected
therewith.
(c) Enforcement of Replacement Notes. 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.
(d) Exclusiveness of Section. 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 1.05. 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 and the Indenture Trustee may treat the Person in whose name
any such Note is registered (as of the Record Date) as the owner of such Note
for the purpose of receiving payments of principal of and interest, if any, on
such Note, and for all other purposes whatsoever, whether or not such Note be
overdue, and none of the Issuer, the Indenture Trustee nor any agent of the
Issuer or the Indenture Trustee shall be affected by notice to the contrary.
Section 1.06. Certain Issuance and Transfer Restrictions.
(a) Issuance and Transfer of the Notes. The Notes may not be issued,
sold, transferred, assigned, participated, pledged or otherwise disposed of
unless such sale or transfer is pursuant to an exemption from the registration
requirements of the Securities Act, and, in each case, in compliance with any
applicable state securities or "Blue Sky" laws. Each prospective holder or
purchaser of a Note shall be deemed to have represented and acknowledged (for
the benefit of the Issuer and the Indenture Trustee) as follows:
(A) It is purchasing the Notes for its own account or an
account with respect to which it exercises sole investment discretion
and it or such account is a "QIB" ("Qualified Institutional Buyer") and
is aware that the sale to it is being made in reliance on Rule 144A
under the Securities Act ("Rule 144A") and is acquiring such Notes for
investment and not with a view to, or for offer or sale in connection
with, any distribution (within the meaning of the Securities Act of
1933) or fractionalization thereof or with any intention of reselling
the Notes or any part thereof, subject to any requirement of law that
the disposition of its property or the property of such account or
accounts be at all times within its or their control and subject to its
or their ability to resell such Notes pursuant to Rule 144A.
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(B) It acknowledges that the Notes have not been and will not
be registered under the Securities Act of 1933 and may not be sold
within the United States or to, or for the account or benefit of, U.S.
persons except as permitted below.
(C) If it is a person other than a foreign purchaser outside
the United States, it agrees that (i) if it should reoffer, resell,
pledge or otherwise transfer its Note prior to the second anniversary
of the later of (a) the original issuance of such Note (or any
predecessor Note), and (b) the sale of such Note (or any predecessor
Note) by the Issuer or any affiliate of the Issuer (computed in
accordance with paragraph (d) of Rule 144 under the Securities Act of
1933), or (ii) if it was at the date of such transfer or during the
three months preceding such date of transfer an affiliate of the Issuer
(a) it will do so in compliance with any applicable state securities or
"Blue Sky" laws and only (A) to the Issuer or (B) in compliance with
Rule 144A, and only if a certificate in the form attached to the
Indenture is delivered by the transferee to the Indenture Trustee, and
(b) it will give the transferee notice of any restrictions on resale of
such Note.
(D) It understands that the Issuer has not been registered
under the Investment Company Act and that such Note is being offered in
a transaction not involving any public offering in the United States
within the meaning of the Securities Act, that such Note has not been
registered under the Securities Act and that (1) such Note may be
offered, resold, pledged or otherwise transferred only (i) to a person
who the seller reasonably believes is a qualified institutional buyer
in a transaction meeting the requirements of Rule 144A under the
Securities Act, (ii) the Issuer or (iii) pursuant to an effective
registration statement, and in each case, in accordance with any
applicable laws of any State of the United States or any other
applicable jurisdiction, (2) no transfer of such Note may be made if
such transfer would require registration of either or both of the
Issuer or the pool of Collateral as an "investment company" under the
Investment Company Act, and (3) the purchaser will, and each subsequent
holder is required to, notify any subsequent purchaser from it of the
resale restrictions set forth in this clause (B).
(E) It understands that such Note will bear a legend
substantially as set forth in Section 1.07
(F) It has received the information, if any, requested by it
pursuant to Rule 144A, has had full opportunity to review such
information and has received all additional information necessary to
verify such information.
(G) It (i) has such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of
its investment in
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the Notes, and (ii) has the ability to bear the economic risks of its
prospective investment and can afford the complete loss of such
investment.
(H) It understands that the Issuer, the Initial Purchaser and
others will rely upon the truth and accuracy of the foregoing
acknowledgments, representations and agreements and agrees that if any
of the foregoing acknowledgments, representations or agreements deemed
to have been made by it are no longer accurate, it will promptly notify
the Issuer and the Initial Purchaser. If it is acquiring any Notes as a
fiduciary or agent for one or more investor accounts, it represents
that it has sole investment discretion with respect to each such
account and it has full power to make the foregoing acknowledgments,
representations and agreements on behalf of such account.
(I) It acknowledges that it has had the opportunity to ask
questions and receive answers concerning the terms and conditions of
the transaction contemplated by the Indenture and to obtain additional
information necessary to verify the accuracy and completeness of any
information furnished to it or to which it has had access.
(J) It will not sell, transfer, assign, participate, pledge,
or otherwise dispose of such Note (or any interest in such Note) other
than by unconditional sale of the entire right, title and interest of
the purchaser or transferee in and to a principal amount of such Note
not less than the minimum denomination of such Note.
(K) It is acquiring such Note for its own account, for
investment purposes only and not with a view to a distribution, and is
the sole beneficial owner of such Note, recognizing that the
disposition of its property shall at all times be and remain within its
control.
(b) Transfer Certificate. Notwithstanding the provisions of Section
1.06(a), an Owner is required to deliver to the Issuer, the Indenture Trustee
and the Note Registrar a certificate substantially in the form of Exhibit
1.06(b) hereto unless it is purchasing a Note from the Initial Purchaser or
pursuant to an Auction.
(c) Void Transfers. If (i) any Note is issued, sold, transferred,
assigned, participated, pledged or otherwise disposed of in contravention of the
provisions of this Section 1.06, (ii) at any time the foregoing representations
of such purchaser or transferee are not true, or (iii) the purchaser or
transferee breaches the foregoing agreements, then the purchase or transfer of
such Note shall be void ab initio and of no effect.
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Section 1.07. Legending of Notes.
Legending of Class A Notes. The Class A Notes shall each bear a legend
in substantially the following form:
THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). THE HOLDER
HEREOF, BY PURCHASING THIS NOTE, AGREES FOR THE BENEFIT OF THE ISSUER
THAT THIS NOTE MAY NOT BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED,
PRIOR TO THE SECOND ANNIVERSARY OF THE ISSUANCE HEREOF (OR ANY
PREDECESSOR NOTE HERETO) OTHER THAN IN COMPLIANCE WITH THE SECURITIES
ACT AND OTHER APPLICABLE LAWS (1) TO THE ISSUER OR ANY OF ITS
AFFILIATES OR PURSUANT TO RULE 144A UNDER THE SECURITIES ACT TO AN
INSTITUTIONAL INVESTOR THAT THE HOLDER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A OR
PURCHASING FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER WHOM THE
HOLDER HAS INFORMED, IN EACH CASE, THAT THE RESALE, PLEDGE OR OTHER
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, AND UPON THE RECEIPT
BY THE ISSUER OF SUCH OTHER EVIDENCE ACCEPTABLE TO THE ISSUER THAT SUCH
RESALE, PLEDGE OR TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT AND
OTHER APPLICABLE LAWS. ADDITIONAL TRANSFER RESTRICTIONS ARE SET FORTH
IN THE INDENTURE.
Section 1.08. Provision of Information to Prospective Purchasers of the
Notes; Rule 144A Matters. For so long as any of the Notes remain outstanding and
are a "restricted security" within the meaning of Rule 144(a)(3) under the
Securities Act, any Noteholder may request that the Indenture Trustee forward to
the Issuer a request that the Issuer provide the information specified in, and
meeting the requirements of, Rule 144A(d)(4) under the Securities Act. Upon
receipt of such request, the Indenture Trustee shall forward such request
promptly to the Issuer. The Issuer shall provide such requested information
promptly to the Indenture Trustee, who shall forward such requested information
promptly to the requesting Noteholder.
Section 1.09. Cancellation. All Notes surrendered for payment,
registration of transfer, exchange or redemption shall, if surrendered to any
Person other than the Indenture Trustee, be delivered to the Indenture Trustee
and shall be promptly canceled by the Indenture Trustee. The Issuer may at any
time deliver to the Indenture Trustee for cancellation any Notes previously
authenticated and delivered hereunder which the Issuer may have acquired in any
manner whatsoever, and all Notes so delivered shall be promptly canceled by the
Indenture Trustee. No Notes shall be authenticated in lieu of or in exchange for
any Notes canceled as provided in this Section, except as expressly permitted by
this Indenture. All canceled Notes
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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 destroyed or returned to it;
provided that such Issuer Order is timely and the Notes have not been previously
disposed of by the Indenture Trustee.
Section 1.10. Book-Entry Notes. The Class A 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 of any Class of Notes will receive a
Definitive Note (as defined below) representing such Note Owner's interest in
such Book-Entry Note, except as provided in Section 1.12. Unless and until
definitive, fully registered Notes (the "Definitive Notes") have been issued to
Note Owners pursuant to Section 1.12:
(i) the provisions of this Section shall be in full force and
effect;
(ii) the Issuer, 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 sole holder of the Notes, and shall have no
obligation to the Note Owners of any Class of Notes;
(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 of each Class of Notes 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 1.12, 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;
(v) whenever this Indenture requires or permits actions to be
taken based upon instructions or directions of Noteholders of any Class
of Notes evidencing a specified percentage of the Note Principal Amount
of such Class of Notes, the Clearing Agency shall be deemed to
represent such percentage only to the extent that it has received
instructions to such effect from Note Owners and/or Clearing Agency
Participants owning or representing, respectively, such required
percentage of the beneficial interest in the applicable Class of Notes
and has delivered such instructions to the Indenture Trustee; and
(vi) each Note Owner, by its acceptance of its interest in a
Note, shall be deemed to have made the representations and to have
bound itself by the agreements set
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forth pursuant to Section 1.06 and to have agreed to treat the Notes as
indebtedness for all tax and financial reporting purposes.
Section 1.11. 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
1.12, the Indenture Trustee shall give all such notices and communications
specified herein to be given to Noteholders of any Class of Notes to the
Clearing Agency, and shall have no obligation to the Note Owners to enforce such
notices or communications.
Section 1.12. Definitive Notes. If (i) the Issuer 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 Issuer is unable to locate a qualified successor, (ii) the Issuer at its
option advises the Indenture Trustee in writing that it elects to terminate the
book-entry system through the Clearing Agency or (iii) after the occurrence of
an Event of Default, Note Owners representing beneficial interests aggregating
at least a majority of each of the Class A-1 Note Principal Amount and the Class
A-2 Note Principal Amount of the Book-Entry Notes advise the Clearing Agency
(which shall then notify the Indenture Trustee and the Issuer) in writing that
the continuation of a book-entry system through the Clearing Agency is no longer
in the best interests of the Note Owners, then the Indenture Trustee will cause
the Clearing Agency to notify all Note Owners, through the Clearing Agency, of
the occurrence of any such event and of the availability of Definitive Notes to
Note Owners requesting the same. Upon surrender to the Indenture Trustee of the
typewritten Notes representing the Book-Entry Notes by the Clearing Agency,
accompanied by registration instructions, the Issuer shall execute and the
Indenture Trustee shall authenticate the Definitive Notes in accordance with the
instructions of the Clearing Agency. None of the Issuer, the Note Registrar or
the Indenture Trustee shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying on,
such instructions. Upon the issuance of Definitive Notes, the Indenture Trustee
shall recognize the holders of the Definitive Notes as Noteholders.
Section 1.13. Payment of Principal and Interest; Defaulted Interest;
Noteholders' Interest Basis Carryover.
(a) Class A Notes.
(i) The Class A-1 Notes shall accrue interest as provided in
the form of Class A-1 Note set forth in Exhibit 1.01(a), and such
interest shall be payable on each Primary Payment Date as specified
therein, subject, in each case, to Section 3.01. The Class A-2 Notes
shall accrue interest as provided in the form of Class A-2 Note set
forth in Exhibit 1.01(b), and such interest shall be payable on each
Secondary Payment Date as specified therein, subject, in each case, to
Section 3.01. Any installment of interest (and any Noteholders'
Interest Basis Carryover) or principal, if any, payable on
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any Class A Note which is punctually paid or duly provided for by the
Issuer on the applicable Primary Payment Date, in the case of the Class
A-1 Notes, or the applicable Secondary Payment Date, in the case of the
Class A-2 Notes, shall be paid to the Person in whose name such Class A
Note (or one or more Predecessor Notes) is registered on the Record
Date by wire transfer if such Person 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 1.12, with respect to Class A 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 Class A Note on a Primary Payment Date, in the case of the
Class A-1 Notes, or a Secondary Payment Date, in the case of the Class
A-2 Notes, which shall be payable as provided below. The funds
represented by any such checks returned undelivered shall be held in
accordance with Section 3.02.
(ii) The principal of each Class A-1 Note shall be payable in
installments on each Primary Payment Date as provided in the form of
the Class A-1 Notes set forth in Exhibit 1.01(a). The principal of each
Class A-2 Note shall be payable in installments on each Secondary
Payment Date as provided in the form of the Class A-2 Notes set forth
in Exhibit 1.01(b). Notwithstanding the foregoing, the entire unpaid
principal amount of the Class A Notes shall be due and payable, if not
previously paid, if an Event of Default shall have occurred and if the
Indenture Trustee or the Noteholders of the Notes representing not less
than a majority of the Class A Note Principal Amount have declared the
Notes to be immediately due and payable with the prior consent of the
Insurer or at the direction of the Insurer, in the manner provided in
Section 5.02; provided, however, that during the existence and
continuation of an Insurer Default the Indenture Trustee shall not
require the prior consent or direction of the Insurer. All principal
payments on the Class A Notes shall be made, first, to the Class A-1
Notes until the Class A-1 Note Principal Amount has been paid in full
and then to the Class A-2 Notes until the Class A-2 Notes have been
paid in full; provided, that, if an Event of Default has occurred and
the unpaid principal amount of the Class A Notes has been
declared due and payable, principal payments on the Class A-1 Notes and
the Class A-2 Notes shall be made pro rata (based on the unpaid Note
Principal Amount of each such Class) to the Noteholders of each such
class. The Indenture Trustee shall notify the Person in whose name a
Class A Note is registered at the close of business on the Record Date
preceding the Primary Payment Date, in the case of the Class A-1 Notes,
or the Secondary Payment Date, in the case of the Class A-2 Notes, on
which the Issuer expects that the final installment of principal of and
interest (and any Noteholders' Interest Basis Carryover) on such Class
A Note will be paid. Such notice shall be mailed or transmitted by
facsimile prior to such final Primary Payment Date, in the
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case of the Class A-1 Notes, or such final Secondary Payment Date, in
the case of the Class A-2 Notes, and shall specify that such final
installment will be payable only upon presentation and surrender of
such Class A Note and shall specify the place where such Class A Note
may be presented and surrendered for payment of such installment.
Notices in connection with redemptions of Class A Notes shall be mailed
to Class A Noteholders as provided in Section 9.02.
(iii) If the Issuer defaults in a payment of interest on the
Class A Notes, the Issuer shall pay defaulted interest (plus interest
on such defaulted interest to the extent lawful) at the Class A-1 Note
Rate or Class A-2 Note Rate, as applicable, in any lawful manner. The
Issuer may pay such defaulted interest to Class A 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 Class A Noteholder
that states the special record date, the payment date and the amount of
defaulted interest to be paid. Any shortfall in the payment of interest
on the Class A Notes shall be allocated pari passu among the Class A-1
and Class A-2 Notes (based on the ratio of each such amount to the
total of such amounts).
(iv) The Noteholders' Interest Basis Carryover on each Primary
Payment Date, in the case of the Class A-1 Notes, or each Secondary
Payment Date, in the case of the Class A-2 Notes, including all such
unpaid carryover from prior Primary Payment Dates or Secondary Payment
Dates, as applicable, and interest accrued thereon at the Class A-1
Note Rate or Class A-2 Note Rate, as applicable for each Class of Class
A Notes for each applicable Collection Period, shall be allocable among
the Class A-1 Notes and the Class A-2 Notes pari passu basis (based on
the ratio of each such amount to the total of such amounts) and shall
be payable on such Primary Payment Date, in the case of the Class A-1
Notes, or Secondary Payment Date, in the case of the Class A-2 Notes,
solely to the extent that the funds required are available to be
distributed to Class A Noteholders by the Indenture Trustee pursuant to
Section 8.04(b); provided, however, that the payment of any such
Noteholders' Interest Basis Carryover is not guaranteed by the Insurer
under the Insurance Policy.
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Article II
REPRESENTATIONS AND WARRANTIES
Section 2.01. Representations and Warranties of the Issuer. The Issuer
represents and warrants as follows:
(a) Organization, Powers. The Issuer is a limited partnership duly
organized, validly existing and in good standing under the laws of the State of
Delaware, has all necessary power as a limited partnership to carry on its
present business, is duly licensed or qualified in all jurisdictions where the
nature of its activities require such licensing or qualifying and where its
failure to be so licensed or qualified would not have a Material Adverse Effect
on the Issuer or the Notes; and has full power, right and authority to enter
into this Indenture, the other Transaction Documents to which it is, or will be,
a party and the transactions contemplated hereby and thereby, to issue the Notes
and to perform each and all of the matters and things herein and therein
provided for. The Issuer has not been known by any name other than "EFG-II, LP"
and has not had any office other than its office at 000 Xxxxxxx Xxxxxx, Xxxxx
Xxxxxxxx, Xxxxxxxxxxxxx 00000, and that office is its chief executive office and
principal place of business.
(b) Issuer Authority, etc. The execution, delivery and performance by
the Issuer of this Indenture, the Notes and the other Transaction Documents to
which it is, or will be, a party and the transactions contemplated hereby and
thereby have been duly authorized by all necessary limited partnership action
and this Indenture, the Notes and such Transaction Documents constitute the
legal, valid and binding obligations of the Issuer enforceable against the
Issuer in accordance with their terms, except to the extent that enforceability
may be limited by bankruptcy, insolvency, reorganization or other laws affecting
creditors' rights generally and general principles of equity, regardless of
whether such enforceability is considered in a proceeding in equity or law.
(c) Compliance with Laws and Contracts. The execution, delivery and
performance by the Issuer of this Indenture, the Notes and the other Transaction
Documents to which the Issuer is a party do not and will not (i) violate, in any
material respect, any provision of any law, rule, regulation, order, writ,
judgment, injunction, decree, determination or award to which the Issuer or its
property is subject, or of the limited partnership agreement and certificate of
limited partnership of the Issuer; (ii) result in a material breach of or
constitute a material default under the provisions of any indenture, loan or
credit agreement or any other material agreement, lease or instrument to which
the Issuer may be or is subject or by which it, or its property, is bound; or
(iii) result in, or require, the creation or imposition of any Lien on or with
respect of any of the material properties of the Issuer other than the Lien in
favor of the Indenture Trustee provided herein; and the Issuer is not in
violation of, or in default under, any such law, rule, regulation, order, writ,
judgment, injunction, decree, determination or award or any such indenture,
agreement, lease or instrument except for violations or defaults
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that singly or in the aggregate have not had nor would not have a Material
Adverse Effect on the Issuer.
(d) Governmental Approvals. The Issuer has obtained all authorizations,
consents, approvals, exemptions of or filings or registrations with all
governmental commissions, regulatory bodies, boards, bureaus, agencies and
instrumentalities, domestic or foreign, necessary to the conduct of its business
and with respect to which the failure to obtain would not have a Material
Adverse Effect on the Issuer, or necessary to the valid execution, delivery and
performance by the Issuer of this Indenture, the Notes and the other Transaction
Documents to which the Issuer is, or will be, a party (the "Approvals"), and
such Approvals remain in full force and effect.
(e) Litigation. There is no action, suit, proceeding, inquiry or
investigation at law or in equity or before or by any court, public board or
body pending or, to the knowledge of the Issuer, overtly threatened in writing
against or affecting the Issuer wherein an unfavorable decision, ruling or
finding would have a Material Adverse Effect on the Issuer or which affects, or
purports to affect, the validity or enforceability against the Issuer of any
Transaction Document.
(f) Employee Benefit Plans. All "employee benefit plans" (as such term
is defined in ERISA) of the Issuer and each of its ERISA Affiliates (as defined
in ERISA) (individually, a "Plan" and collectively the "Plans") are in
compliance in all material respects with any applicable provisions of ERISA and
the regulations and published interpretations thereunder, except for compliance
amendments which may be required due to changes in such laws and regulations and
which were not addressed by the latest determination letters and for which the
retroactive amendment period has not expired. No Plan is insolvent or in
reorganization. No proceedings have been instituted to terminate any Plan, and
no conditions exist which would permit the institution of proceedings to
terminate any such Plan.
(g) Perfected Interest. Each Financed Student Loan, including the
related Student Loan Note, is owned by the Issuer or by the Eligible Lender
Trustee, on behalf of the Issuer, free and clear of any Lien other than the Lien
created hereby. Except for the filing of the financing statements being executed
and filed in connection with the closing of the transaction, no further action,
including any filing or recording of any document, is necessary in order to
establish, protect and perfect the first priority security interest of the
Indenture Trustee, for the benefit of the Noteholders, in the Collateral as
against any third party in any applicable jurisdiction, including, without
limitation, any purchaser from, or creditor of, the Issuer. No financing
statement or other instrument similar in effect covering any of the Collateral
or any interest therein is on file in any recording office except such as may be
filed (i) in connection with any Lien arising solely as the result of any action
taken by the Indenture Trustee, (ii) in favor of the Indenture Trustee or (iii)
for which UCC termination statements have been filed or with respect to Liens
which by their terms do not require that a release be filed for the security
interest of the Indenture Trustee to be of first priority.
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(h) Accuracy of Information. All information (including each Monthly
Report, Student Loan Schedule and Computer Tape) supplied by, or on behalf of,
the Issuer in writing to the Indenture Trustee in connection with this Indenture
or the transactions contemplated hereby is true and accurate in all material
respects as of the date thereof stated or certified. No information, exhibit or
report furnished by the Issuer to the Indenture Trustee in connection with this
Indenture contained any material misstatement.
(i) Defaults. No Event of Default or Unmatured Event of Default exists.
(j) Margin Regulations. The use of all funds obtained by the Issuer
under this Indenture will not conflict with or contravene any of Regulations G,
T, U and X promulgated by the Board of Governors of the Federal Reserve System
from time to time.
(k) Offices. The chief place of business and chief executive office of
the Issuer are located at the address of the Issuer referred to in Section
10.02, and the offices where the Issuer keeps all its books, records and
documents evidencing the Financed Student Loans are located at the addresses
specified in Schedule 2.01(k) (or at such other locations, notified to the
Indenture Trustee in accordance with Section 10.02, in jurisdictions where all
action necessary to maintain the Indenture Trustee's first priority perfected
interest, for the benefit of the Noteholders, in the Collateral has been taken
and completed).
(l) Eligible Student Loans. Each Student Loan, as of the date of its
inclusion in the Collateral, is an Eligible Student Loan.
(m) The Issuer Not an Investment Company. The Issuer is not required to
register as an "investment company" within the meaning of the Investment Company
Act.
Section 2.02. Reassignment upon Breach. The Issuer or the Indenture
Trustee, as the case may be, shall inform the other parties to this Indenture,
the Insurer and the Noteholders promptly, in writing, upon the discovery of any
breach in any material respects of the representations and warranties made by
the Issuer pursuant to Sections 2.01(g) or (l) or any breach in any material
respects of the covenants of the Issuer made pursuant to Section 3.07; provided,
however, that a material breach of such representations, warranties and
covenants shall be deemed to have occurred only if the related Guarantee
Agreements are affected. Unless any such breach shall have been cured within 30
days (or in the sole discretion of the Insurer, 60 days) following the discovery
thereof by the Issuer or receipt by the Issuer of written notice from the
Indenture Trustee of such breach, the Financed Student Loan as to which such
representation and warranty or covenant relates shall be released from the
Collateral and reassigned to the Eligible Lender Trustee (a "Reassignment"), as
of the first Determination Date succeeding the end of such 30-day or 60-day
period, respectively. In consideration of and simultaneously with the
reassignment of such Financed Student Loan, the Issuer shall deposit to the
Collection Account on such Determination Date immediately available funds equal
to the Purchase Amount. Notwithstanding the foregoing, so long as no Event of
Default shall have occurred and be continuing the Issuer may, at its option in
lieu of
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depositing such Purchase Amount to the Collection Account on such date, cause
the Eligible Lender Trustee to pledge to the Indenture Trustee on such date for
inclusion in the Collateral a new Eligible Student Loan in substitution for such
Financed Student Loan having a Principal Balance plus accrued and unpaid
interest at least equal to the Substitution Amount of the Financed Student Loan
being substituted, by delivering an updated Student Loan Schedule to the
Indenture Trustee reflecting such substitution (a "Substitution"). The Indenture
Trustee shall execute such documents reasonably requested by the Issuer or
Insurer in order to effect such reassignment and to release the Indenture
Trustee's Lien thereunder. The sole remedy of the Indenture Trustee or the
Noteholders with respect to a breach of representations and warranties pursuant
to Sections 2.01(g) and (l) and the covenants contained in Section 3.07 shall be
to require the Issuer to deposit the Purchase Amount or substitute Financed
Student Loans as provided above.
Section 2.03. Representations and Warranties of General Partner. The
General Partner hereby represents and warrants as follows:
(a) Organization, Corporate Powers. The General Partner is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware, has all necessary corporate power to carry on its
present business, is duly licensed or qualified in all jurisdictions where the
nature of its activities require such licensing or qualifying and where its
failure to be so licensed or qualified would not have a Material Adverse Effect
on the Issuer.
(b) Issuer Authority, etc. The execution, delivery and performance by
the General Partner of the limited partnership agreement of the Issuer and the
transactions contemplated thereby have been duly authorized by all necessary
corporate action.
(c) Compliance with Laws and Contracts. The execution, delivery and
performance by the General Partner of its duties under the limited partnership
agreement of the Issuer will not (i) violate, in any material respect, any
provision of any law, rule, regulation, order, writ, judgment, injunction,
decree, determination or award to which the General Partner or its property is
subject, or of the certificate of incorporation or bylaws of the General
Partner; (ii) result in a material breach of or constitute a material default
under the provisions of any indenture, loan or credit agreement or any other
material agreement, lease or instrument to which the General Partner may be or
is subject or by which it, or its property, is bound; or (iii) result in, or
require, the creation or imposition of any Lien on or with respect of any of the
material properties of the General Partner, which in any case would have a
Material Adverse Effect on the General Partner; and the General Partner is not
in violation of, or in default under, any such law, rule, regulation, order,
writ, judgment, injunction, decree, determination or award or any such
indenture, agreement, lease or instrument except for violations or defaults that
singly or in the aggregate have not had nor would not have a Material Adverse
Effect on the General Partner.
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(d) Governmental Approvals. The General Partner has obtained all
authorizations, consents, approvals, exemptions of or filings or registrations
with all governmental commissions, regulatory bodies, boards, bureaus, agencies
and instrumentalities, domestic or foreign, necessary to the conduct of its
business and with respect to which the failure to obtain would not have a
Material Adverse Effect on the General Partner.
(e) Litigation. There is no action, suit, proceeding, inquiry or
investigation at law or in equity or before or by any court, public board or
body pending or, to the knowledge of the General Partner, overtly threatened in
writing against or affecting the General Partner wherein an unfavorable
decision, ruling or finding would have a Material Adverse Effect on the General
Partner or which affects, or purports to affect, the validity or enforceability
against the General Partner of the limited partnership agreement of the Issuer.
Section 2.04. Representations and Warranties of Indenture Trustee. The
Indenture Trustee hereby represents and warrants as follows:
(a) Due Organization. It is a national banking association duly
organized and validly existing in good standing under the laws of the United
States. It has all requisite corporate power and authority to execute, deliver
and perform its obligations under this Indenture.
(b) Authorization. It has taken all corporate action necessary to
authorize the execution and delivery by it of this Indenture, and this Indenture
will be executed and delivered by one of its officers who is duly authorized to
execute and deliver this Indenture on its behalf.
(c) Eligible Lender. It is an "eligible lender" as such term is defined
in Section 435(d) of the Higher Education Act, for purposes of being pledgee of
the Financed Student Loans as contemplated by this Indenture.
(d) Binding Obligation. This Indenture constitutes, and each other
Transaction Document to be executed by the Indenture Trustee when duly executed
and delivered, will constitute, a legal, valid and binding obligation of the
Indenture Trustee, enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization, or
other similar laws affecting the enforcement of creditors' rights generally and
by general principles of equity, regardless of whether such enforceability is
considered in a proceeding in equity or at law.
Section 2.05. Representations and Warranties of Eligible Lender
Trustee. The Eligible Lender Trustee hereby represents and warrants as follows:
(a) Due Organization. It is a national banking association duly
organized and validly existing in good standing under the laws of the United
States. It has all requisite corporate power and authority to execute and
deliver this Indenture.
(b) Eligible Lender. It is an "eligible lender" as such term is defined
in Section 435(d) of the Higher Education Act.
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Article III
GENERAL COVENANTS OF THE ISSUER
Section 3.01. Payment to Noteholders. The Issuer will duly and
punctually pay the principal of, interest, if any, on and any interest on
Noteholders' Interest Basis Carryover (but only to the extent provided in
Sections 1.13(a)(iv) and 8.03(b)) with respect to the Notes in accordance with
the terms of the Notes and this Indenture. Without limiting the foregoing,
subject to Section 8.03(b), the Issuer will cause to be distributed to the Class
A-1 Noteholders that portion of the amounts on deposit in the Trust Accounts on
a Primary Payment Date which the Class A-1 Noteholders are entitled to receive
and will cause to be distributed to the Class A-2 Noteholders that portion of
the amounts on deposit in the Trust Accounts on a Secondary Payment Date which
the Class A-2 Noteholders are entitled to receive. Amounts properly withheld
under the Code by any Person from a payment to any Noteholder of interest
(including any Noteholders' Interest Basis Carryover) and/or principal shall be
considered as having been paid by the Issuer to such Noteholder for all purposes
of this Indenture.
Section 3.02. Money for Payments to Be Held in Trust. 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 Account shall be
made on behalf of the Issuer by the Indenture Trustee or by another Paying
Agent, and no amounts so distributed for payments of Notes shall be paid over to
the Issuer except as provided in this Section.
On or before the Business Day next preceding each Primary Payment 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 (or in the case of the Class A-2 Notes, becoming
due on the related Secondary Payment Date), 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 the Insurer
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 and the Insurer 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 the Insurer 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;
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(iii) at any time during the continuance of any such default,
upon the written request of the Indenture Trustee, forthwith pay to the
Indenture Trustee all sums so held in trust by such Paying Agent;
(iv) immediately resign as a Paying Agent and forthwith pay to
the Indenture Trustee all sums held by it in trust for the payment of
Notes if at any time it ceases to meet the standards required to be met
by a Paying Agent at the time of its appointment; and
(v) comply with all requirements of the Code with respect to
the withholding from any payments made by it on any Notes of any
applicable withholding taxes imposed thereon and with respect to any
applicable reporting requirements in connection therewith.
The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by Issuer
Order direct any Paying Agent to pay to the Indenture Trustee all sums held in
trust by such Paying Agent, such sums to be held by the Indenture Trustee upon
the same trusts as those upon which the sums were held by such Paying Agent; and
upon such payment by any Paying Agent to the Indenture Trustee, such Paying
Agent shall be released from all further liability with respect to such money.
Subject to applicable laws with respect to escheat of funds, any money
held by the Indenture Trustee or any Paying Agent in trust for the payment of
any amount due with respect to any Note and remaining unclaimed for two years
after such amount has become due and payable shall be discharged from such trust
and be paid to either (i) the Issuer on Issuer Request and with the prior
written consent of the Insurer or (ii) the Insurer if and to the extent such
money or any portion thereof was paid by the Insurer to the Indenture Trustee
for payment of interest on or principal of the Notes; 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).
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Section 3.03. Existence. The Issuer will keep in full effect its
existence, rights and franchises as a limited partnership under the laws of the
State of Delaware (unless, subject to the prior written consent of the Insurer,
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. The Issuer will maintain its status as a pass-through
entity for federal income tax purposes.
Section 3.04. Protection of Indenture Trust Estate.
(a) 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 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) collect payments due on the Financed Student Loans; or
(iv) preserve and defend title to the Indenture Trust Estate
and the rights of the Indenture Trustee, the Insurer 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.
(b) Opinions as to Indenture Trust Estate. On the Closing Date, the
Issuer shall furnish to the Indenture Trustee and the Insurer 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.
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Section 3.05. Performance of Obligations.
(a) The Issuer will not take any action and will use its best efforts
not to permit any action to be taken by others (if such action is within the
Issuer's control) 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 Purchase and Contribution Agreement, the Master Servicing
Agreement or such other instrument or agreement.
(b) The Issuer may contract with other Persons to assist it in
performing its duties under this Indenture, and any performance of such duties
by a Person identified to the Indenture Trustee and the Insurer in an Officer's
Certificate of the Issuer shall be deemed to be action taken by the Issuer.
Initially, the Issuer has contracted with the Master Servicer to assist the
Issuer in performing its duties under this Indenture.
(c) If the Issuer shall have knowledge of the occurrence of a Servicer
Default, the Issuer shall promptly notify the Indenture Trustee, the Rating
Agencies and the Insurer, 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 Master Servicer to perform any of its duties or
obligations under the Master 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 Transaction Documents in respect of such failure
and shall take all reasonable steps available to it to enforce its rights in
respect of such failure at the direction of the Insurer.
(d) Upon any termination of the Master Servicer's rights and powers
pursuant to the Master Servicing Agreement, the Issuer shall promptly notify the
Indenture Trustee and the Insurer. As soon as a successor Master Servicer is
appointed with the consent of the Insurer, the Issuer shall notify the Indenture
Trustee and the Insurer of such appointment, specifying in such notice the name
and address of such successor Master Servicer.
(e) 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 and the Insurer, 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 Transaction Documents, except to the extent otherwise provided
in the Master Servicing Agreement, or waive timely performance or observance by
the Master Servicer, EFG, the Issuer or the Eligible Lender Trustee under a
material provision of the Purchase and Contribution Agreement, or the Master
Servicing Agreement; provided, however, that no such amendment shall (i)
increase or reduce in any manner the amount of, or accelerate or delay the
timing of, distributions that are required to be made for the benefit of the
Noteholders, (ii)
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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, or (iii) result in a deemed exchange of Notes for new notes
under Section 1001 of the Code. 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 the Insurer 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 the Insurer may deem
necessary or appropriate in the circumstances.
(f) The Issuer shall maintain and implement administrative and
operating procedures (including, without limitation, an ability to recreate
records identifying and evidencing the Financed Student Loans and each
Sub-servicer servicing each Financed Student Loan in the event of the
destruction of the originals thereof), and keep and maintain, or cause to be
kept and maintained, all documents, books, records and other information
reasonably necessary or advisable for the collection of all the Financed Student
Loans (including, without limitation, records adequate to permit the daily
identification of each new Financed Student Loan included in the Collateral from
time to time and all Collections of and adjustments to each existing Financed
Student Loan).
(g) At its expense, the Issuer shall timely and fully perform and
comply, and cause the Eligible Lender Trustee to perform and comply, with all
material provisions, covenants and other promises required to be observed by
each of them under the Higher Education Act, Student Loan Notes, the Student
Loan Guaranty Agreements, the Master Servicing Agreement and other agreements to
which the Issuer is a party related to the Collateral.
(h) The Issuer shall administer, operate and maintain, or cause the
Eligible Lender Trustee to administer, operate and maintain, its student loan
program in such manner as to ensure that such program and the Financed Student
Loans will benefit, to the extent applicable and in all material respects, from
(i) the Student Loan Guaranty Agreements and (ii) the Federal Family Education
Loan Program authorized under the Higher Education Act and the federal program
of reimbursement for Student Loans pursuant to the Higher Education Act, or from
any other federal statute providing for such Federal Family Education Loan
Program.
(i) The Issuer shall (i) maintain, and cause the Eligible Lender
Trustee to maintain, in effect all Student Loan Guaranty Agreements and the
Master Servicing Agreement, diligently and promptly enforce its rights
thereunder and take, or use commercially reasonable steps to cause the Master
Servicer to take, all reasonable steps, actions and proceedings necessary or
appropriate for the enforcement of all material terms, covenants and conditions
of each Financed Student Loan, including the prompt payment of all principal and
interest payments and all other amounts due with respect to such Financed
Student Loan, including all Subsidy Payments, and all Student Loan Guaranty
Payments under the applicable Student Loan Guaranty Agreement, except for such
deferments and forbearance permitted with respect to Student Loans under the
Higher Education Act, and (ii) enter, and cause the Eligible Lender
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Trustee to enter, into Student Loan Guaranty Agreements and the Master Servicing
Agreement so that all Financed Student Loans are covered thereby.
Section 3.06. Reporting Requirements of the Issuer. From the date
hereof until the Final Scheduled Payment Date, the Issuer shall furnish to the
Eligible Lender Trustee, the Indenture Trustee and the Insurer:
(a) Quarterly Financial Statements. As soon as available and in any
event within 60 days after the end of each of the first three quarters of each
fiscal year of the Issuer, the Issuer's consolidated statement of income and
statement of changes in cash flow for such quarter and balance sheet as of the
end of such quarter presented fairly in accordance with generally accepted
accounting principles;
(b) Annual Financial Statements. As soon as available and in any event
within 120 days after the end of each fiscal year of the Issuer, the Issuer's
statement of income and statement of changes in cash flow for such year and
balance sheet as of the end of such year in each case presented fairly in
accordance with generally accepted accounting principles;
(c) [Quarterly] Officer's Certificate. Within 30 days after the last
day of each calendar [quarter], an officer's certificate executed by the chief
financial officer or treasurer of the General Partner, certifying that, as of
such calendar month, (i) the Issuer is in compliance with all of the terms,
conditions and requirements of the Transaction Documents, and (ii) no Event of
Default or Unmatured Event of Default under this Indenture or other event of
default as described in any other Transaction Documents exists;
(d) Monthly Report. No later than the tenth Business Day of each month,
a Monthly Report for the immediately preceding calendar month, substantially in
the form of Exhibit 3.06(d);
(e) DOE Audit Materials. Within 30 days after the last day of each
calendar month, notice of all DOE audits of or any other actions of a material
nature by the DOE with respect to, the Issuer or any Affiliate thereof, to the
extent that it has knowledge thereof, of the Master Servicer or Student Loan
Guarantor, under any Student Loan Guaranty Agreement, and, in each case, notice
of the results thereof (including, but not limited to, the rate of reimbursement
by the DOE for the Student Loan Guarantors under the related Student Loan
Guaranty Agreements, to the extent that such rate is below the maximum permitted
under the Higher Education Act (i.e., 95% for Student Loans disbursed on or
after October 1, 1998, 98% with respect to Student Loans disbursed on or after
October 1, 1993, and 100% for Student Loans disbursed prior thereto));
(f) Reports of Independent Accountants. As promptly as practicable,
copies of any reports or written comments (including, without limitation, audit
reports, management letters and any other reports or communications with respect
to the internal control structure) relating to the Issuer submitted by its
independent accountants;
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(g) Event of Defaults. Immediately upon becoming aware of the existence
of any Event of Default or Unmatured Event of Default, a written statement of an
Authorized Officer of the Issuer setting forth details of such event and the
action that the Issuer proposes to take with respect thereto; and immediately
upon becoming aware of a Servicer Default, written notice thereof.
In addition, the Issuer shall promptly furnish a copy of each Monthly
Report upon delivery thereof to the Indenture Trustee and the Eligible Lender
Trustee, to (i) S&P at Standard & Poor's, 00 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: ABS Surveillance Department, (ii) Moody's at Xxxxx'x Investors
Service, Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: ABS
Monitoring Department and (iii) Fitch IBCA at Fitch IBCA, Inc., Xxx Xxxxx Xxxxxx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Asset Backed Monitoring Unit.
Section 3.07. Servicing Covenants. From the date hereof until the Final
Scheduled Payment Date, the Issuer shall comply with the following covenants.
(a) Servicing. The Issuer shall cause the Master Servicer to service,
administer and make collections with respect to the Financed Student Loans in
accordance in all material respects with all applicable Federal and State laws,
including all applicable standards, guidelines and requirements of the Higher
Education Act and any Student Loan Guaranty Agreement, the failure to comply
with which would adversely affect the eligibility of one or more of the Financed
Student Loans for Subsidy Payments or Student Loan Guaranty Payments, as
applicable, or would have a Material Adverse Effect on the Issuer.
(b) Collection of Financed Student Loan Payments. The Issuer shall
cause the Master Servicer to make reasonable efforts (including all efforts that
may be specified under the Higher Education Act or any Student Loan Guaranty
Agreement), in each case in accordance with the terms of the Master Servicing
Agreement, to collect all payments called for under the terms and provisions of
the Financed Student Loans as and when the same shall become due.
(c) Collection of Student Loan Guaranty Payments. The Issuer shall (or
shall cause the Master Servicer to) make reasonable efforts to claim, pursue and
collect all Student Loan Guaranty Payments from the Student Loan Guarantors
pursuant to the Student Loan Guaranty Agreements with respect to any of the
Financed Student Loans as and when the same shall become due and payable, and
shall comply, and shall cause the Master Servicer to comply, in all material
respects with all applicable laws and agreements with respect to claiming,
pursuing and collecting such payments in each case in accordance with the terms
of the Master Servicing Agreement. In connection therewith, the Master Servicer
is hereby authorized and empowered to convey to any Student Loan Guarantor the
Student Loan Note and the related Financed Student Loan file representing any
Financed Student Loan in connection with submitting a claim to such Student Loan
Guarantor for a Student Loan Guaranty Payment in accordance
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with the terms of the applicable Student Loan Guaranty Agreement whereupon the
Lien of the Indenture Trustee relating to such Financed Student Loan shall be
released without any further action of any kind.
(d) Collection of Subsidy Payments. The Issuer shall make or cause to
be made reasonable efforts to claim, pursue and collect all Subsidy Payments
from the DOE with respect to any of the Financed Student Loans as and when the
same shall become due and payable, shall comply or undertake commercially
reasonable efforts to cause compliance with in all material respects with all
applicable laws and agreements with respect to claiming, pursuing and collecting
such payments. All amounts so collected by the Issuer or otherwise shall
constitute Collections for the applicable Collection Period and shall be
deposited into the Collection Account in accordance with Section 8.03 (a). In
connection therewith, the Issuer, shall prepare and file or cause there to be
prepared with the DOE on a timely basis all claims, forms and other documents
and filings necessary or appropriate in connection with the claiming of Subsidy
Payments and otherwise pursuing and collecting such Subsidy Payments from the
DOE.
(e) Realization upon Financed Student Loans. The Issuer shall cause the
Master Servicer to use reasonable efforts consistent with customary servicing
practices and procedures and subject to the Master Servicing Agreement,
including all efforts that may be specified under any applicable Student Loan
Guaranty Agreement and the Higher Education Act, in its servicing of any
delinquent Financed Student Loans.
(f) Termination of the Master Servicer. In the event that the Guaranty
Agreement dated June 14, 1999, among EFG, the Insurer and the Indenture Trustee
is no longer the enforceable obligation of EFG, the Issuer shall take all
reasonable steps to replace the Master Servicer with a successor acceptable to
the Insurer.
Section 3.08. Negative Covenants of the Issuer. The Issuer shall not:
(a) except as expressly permitted by this Indenture or any other
Transaction Document and except for properties and assets released from the
Indenture Trust Estate in accordance with this Indenture, 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 the Insurer);
(b) claim any credit on, or make any deduction from the principal or
interest (including any Noteholders' Interest Basis Carryover) payable in
respect of, the Notes (other than amounts properly withheld from such payments
under the Code or applicable state law) or assert any claim against any present
or former Noteholder by reason of the payment of the taxes levied or assessed
upon any part of the Indenture Trust Estate; or
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(c) (i) 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, (ii) 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
Transaction Documents) or (iii) 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. 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 the Insurer, in
form satisfactory to the Indenture Trustee and the Insurer, the due and
punctual payment of the principal of, interest on and any Noteholders'
Interest Basis Carryover, if any, with respect to all Notes and the
performance or observance of every agreement and covenant of this
Indenture on the part of the Issuer to be performed or observed, all as
provided herein;
(ii) immediately after giving effect to such transaction, no
Event of Default shall have occurred and be continuing;
(iii) the consent of the Insurer shall have been obtained with
respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel (and
shall have delivered copies thereof to the Indenture Trustee) to the
effect that such transaction will not have any material adverse tax
consequence to the Issuer or any Noteholder;
(v) any action as is necessary to maintain the lien and
security interest created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture Trustee
and the Insurer an Officer's Certificate of the Issuer 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.
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(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 assume, by an indenture supplemental
hereto, executed and delivered to the Indenture Trustee and the
Insurer, in form satisfactory to the Indenture Trustee and the Insurer,
the due and punctual payment of the principal of, interest on and
Noteholders' Interest Basis Carryover, if any, with respect to all
Notes and the performance or observance of every agreement and covenant
of this Indenture on the part of the Issuer to be performed or
observed, all as provided herein, (C) expressly agree 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 the Insurer, (D) unless otherwise provided in such
supplemental indenture, expressly agree to indemnify, defend and hold
harmless the Issuer and the Insurer against and from any loss,
liability or expense arising under or related to this Indenture and the
Notes and (E) expressly agree 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 consent of the Insurer shall have been obtained with
respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel (and
shall have delivered copies thereof to the Indenture Trustee) to the
effect that such transaction will not have any material adverse tax
consequence to the Issuer or any Noteholder;
(v) any action as is necessary to maintain the lien and
security interest created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture Trustee
and the Insurer an Officer's Certificate of the Issuer 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.
Section 3.10. Successor or Transferee.
(a) Upon any consolidation or merger of the Issuer in accordance with
Section 3.09(a), the Person formed by or surviving such consolidation or merger
(if other than the
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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 3.09(b), EFG-II, LP will be released from every
covenant and agreement of this Indenture to be observed or performed on the part
of the Issuer with respect to the Notes immediately upon the delivery by the
Issuer of written notice to the Indenture Trustee and the Insurer stating that
EFG-II, LP is to be so released.
Section 3.11. No Other Business. Except as contemplated by this
Indenture, its limited partnership agreement or the other Transaction Documents,
the Issuer shall not engage in any business other than financing, purchasing,
owning, selling and managing the Financed Student Loans in the manner
contemplated by this Indenture, its limited partnership agreement and the other
Transaction Documents and activities incidental thereto.
Section 3.12. No Borrowing. Unless the Insurer shall have given consent
with respect to such issuance, the Issuer shall not issue, incur, assume,
guarantee or otherwise become liable, directly or indirectly, for any
indebtedness except for the Notes.
Section 3.13. Guarantees, Loans, Advances and Other Liabilities. Except
as contemplated by the Transaction Documents or this Indenture, the Issuer shall
not make any loan or advance or credit to, or guarantee (directly or indirectly
or by an instrument having the effect of assuring another's payment or
performance on any obligation or capability of so doing or otherwise), endorse
or otherwise become contingently liable, directly or indirectly, in connection
with the obligations, stocks or dividends of, or own, purchase, repurchase or
acquire (or agree contingently to do so) any stock, obligations, assets or
securities of, or any other interest in, or make any capital contribution to,
any other Person.
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Article IV
SATISFACTION AND DISCHARGE
Section 4.01. Satisfaction and Discharge of Indenture. This Indenture
shall cease to be of further effect with respect to the Notes except as to (i)
rights of registration of transfer and exchange, (ii) substitution of mutilated,
destroyed, lost or stolen Notes, (iii) rights of Noteholders to receive payments
of principal thereof and interest (including any Noteholders' Interest Basis
Carryover) thereon, (iv) Section 3.02, (v) the rights, obligations and
immunities of the Indenture Trustee hereunder (including the rights of the
Indenture Trustee under Sections 6.02 and 6.12 and the obligations of the
Indenture Trustee under Section 4.02) and (vi) the rights of Noteholders and the
Insurer 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
1.04 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 3.02) have been delivered
to the Indenture Trustee for cancellation and the Insurance
Policy has been returned to the Insurer for cancellation and
any amounts owed to the Insurer under this Indenture have been
paid; 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
Final Scheduled Payment Date 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
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will mature prior to the date such amounts are payable), in
trust for such purpose, in an amount sufficient, as certified
by an independent certified public accountant, 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
Final Scheduled Payment Date and all amounts due to the
Insurer;
(B) the Issuer has paid or caused to be paid all other sums payable
hereunder by the Issuer; and
(C) the Issuer has delivered to the Indenture Trustee and the Insurer
an Officer's Certificate of the Issuer 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 (including any Noteholders' Interest Basis Carryover), to the Insurer
of all amounts due to the Insurer under the Transaction Documents; but such
monies need not be segregated from other funds except to the extent required
herein or in the Master Servicing Agreement or required by law.
Section 4.03. Repayment of 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 3.02 and thereupon such Paying Agent shall be released from all
further liability with respect to such monies.
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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):
(a) without taking into account any payments under the Insurance
Policy, a default for two days or more in the payment by the Issuer of any
interest (provided, however, that any Noteholders' Interest Basis Carryover
shall not constitute interest for this purpose) on any Note after the same
becomes due and payable; or
(b) default in the payment by the Issuer of the remaining principal
balance of any Note when the same becomes due and payable on the Final Scheduled
Payment Date; or
(c) default for five days or more in the payment of any installment of
the principal of any Note when the same becomes due and payable and when
Available Funds are sufficient to make such payment; or
(d) default in any material respect in the observance or performance of
any covenant or agreement of the Issuer made in this Indenture and the
continuation of any such default for a period of 45 days after notice thereof is
given to the Issuer by the Indenture Trustee or to the Issuer and the Indenture
Trustee by the holders of at least 25% in principal amount of the Notes then
outstanding; provided, however, that if the Issuer demonstrates that it is
making a good-faith attempt to cure such default, such 45 day period may be
extended by the Indenture Trustee (with the prior consent of the Insurer) to 90
days; or
(e) any representation or warranty made by the Issuer in this Indenture
or in any certificate delivered pursuant thereto or in connection therewith
having been incorrect in a material adverse respect as of the time made, and
such breach not having been cured within 45 days after notice thereof is given
to the Issuer by the Indenture Trustee or to the Issuer and the Indenture
Trustee by the holders of at least 25% in principal amount of the Notes then
outstanding; provided, however, that if the Issuer demonstrates that it is
making a good-faith attempt to cure such breach, such 45 day period may be
extended by the Indenture Trustee (with the prior consent of the Insurer) to 90
days; or
(f) 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
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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
(g) the commencement by the Issuer of a voluntary case under any
applicable federal or state bankruptcy, insolvency or other similar law now or
hereafter in effect, or the consent by the Issuer to the entry of an order for
relief in an involuntary case under any such law, or the consent by the Issuer
to the appointment or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Issuer or for any
substantial part of the Indenture Trust Estate, or the making by the Issuer of
any general assignment for the benefit of creditors, or the failure by the
Issuer generally to pay its debts as such debts become due, or the taking of
action by the Issuer in furtherance of any of the foregoing.
Section 5.02. Acceleration of Maturity; Rescission and Annulment. If an
Event of Default should occur, then the Indenture Trustee may, with the consent
of the Insurer, or shall, at the direction of the Insurer, declare all the Notes
to be immediately due and payable, by a notice in writing to the Issuer, 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; provided, however, that during the existence
and continuation of an Insurer Default the right of consent or direction shall
instead be exercised by Noteholders representing 66-2/3 % of the Class A Note
Principal Amount.
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 provided in this Article V, the
Noteholders of Notes representing a majority of the Class A-1 Note Principal
Amount and the Class A-2 Note Principal Amount may rescind and annul such
declaration and its consequences (with the prior consent of the Insurer) if:
(a) the Issuer has paid or deposited with the Indenture Trustee a sum
sufficient to pay:
(i) 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
(ii) all sums paid or advanced by the Indenture Trustee
hereunder plus all amounts owed to the Insurer under the Transaction
Documents and the reasonable compensation, expenses, disbursements and
advances of the Indenture Trustee and its agents and counsel; and
(b) 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.
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Section 5.03. Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee.
(a) The Issuer covenants that if (i) default is made in the payment of
any interest (including, subject to the limitations of Sections 1.13(a)(iv) and
8.03(b), any Noteholders' Interest Basis Carryover) on any Note when the same
becomes due and payable, and such default continues for a period of five days,
or (ii) default is made in the payment of the remaining principal balance of any
Notes when the same becomes due and payable on the Final Scheduled Payment Date,
or (iii) default for five days or more is made in the payment of any installment
of the principal of any Note when the same becomes due and payable and when
Available Funds are sufficient to make such payment, the Issuer will, upon
demand of the Indenture Trustee with the Insurer's prior consent, pay to it, for
the benefit of the Noteholders, the whole amount then due and payable on such
Notes for principal and interest (and any Noteholders' Interest Basis
Carryover), with interest upon the overdue principal, and, to the extent payment
at such rate of interest shall be legally enforceable, upon overdue installments
of interest (and any Noteholders' Interest Basis Carryover), at the rate
specified in Section 1.13 and in addition thereto such further amount as shall
be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Indenture
Trustee and its 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 (with the prior written consent of the Insurer) 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, in each case
subject to Section 10.06 hereof.
(c) If an Event of Default occurs and is continuing, the Indenture
Trustee may, subject to the Insurer's right to direct and control all remedies
unless an Insurer Default has occurred and is continuing, as more particularly
provided in Section 5.04, in its discretion, proceed to protect and enforce its
rights and the rights of the Noteholders and the Insurer, 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, in each case subject to
Section 10.06 hereof.
(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
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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, with the prior written consent of
the Insurer, and shall, at the written direction of the Insurer, by intervention
in such proceedings or otherwise:
(i) to file and prove a claim or claims for the whole amount
of principal and interest (including any Noteholders' Interest Basis
Carryover) owing and unpaid in respect of the Notes and to file such
other papers or documents as may be necessary or advisable in order to
have the claims of the Indenture Trustee (including any claim for
reasonable compensation to the Indenture Trustee and each predecessor
Indenture Trustee, and their respective agents, attorneys and counsel,
and for reimbursement of all expenses and liabilities incurred, and all
advances made, by the Indenture Trustee and each predecessor Indenture
Trustee, except as a result of negligence, willful misconduct 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;
(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, the Insurer 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, the Insurer 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, willful
misconduct 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
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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 the Insurer.
(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 and be continuing and
the Notes have become due and payable, the Indenture Trustee may (upon the
Insurer's prior consent), and shall at the Insurer's direction, 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;
(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, the Insurer 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 during the existence and continuation of an Insurer
Default the Indenture Trustee shall not require the prior consent and direction
of the Insurer; and further provided, however, that the Indenture Trustee may
not sell or otherwise liquidate the Indenture
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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
Class A-1 Note Principal Amount and the Class A-2 Note Principal Amount, (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 (as evidenced by a certificate of a Responsible
Officer of the Indenture Trustee which shall be provided to the Insurer) 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 the
Insurer and of Noteholders of 66-2/3% of the Class A-1 Note Principal Amount and
the Class A-2 Principal Amount. In determining such sufficiency or insufficiency
with respect to clauses (B) and (C), the Indenture Trustee may, but need not,
obtain and rely upon an opinion of an Independent investment banking or
accounting firm of national reputation as to the feasibility of such proposed
action and as to the sufficiency of the Indenture Trust Estate for such purpose.
(b) If the Indenture Trustee collects any money or property pursuant to
this Article V, it shall pay out the money or property in the following order:
FIRST: to the Insurer for all due and unpaid Policy Premiums;
SECOND: on a pari passu basis (based on the ratio of each such
amount to the total of such amounts), to the Indenture Trustee
for all due and unpaid Indenture Trustee Fees and to the
Eligible Lender Trustee for all due and unpaid Eligible Lender
Trustee Fees.;
THIRD: to the Master Servicer for all due and unpaid Servicing
Fee Amounts due to the Master Servicer under the Master
Servicing Agreement;
FOURTH: to the Class A-1 Noteholders and the Class A-2
Noteholders for amounts due and unpaid on the Class A-1 Notes
and Class A-2 Notes, respectively, for interest (other than
any Noteholders' Interest Basis Carryover), on a pari passu
basis (based on the ratio of each such amount to the total of
such amounts) as between the Class A-1 Notes and Class A-2
Notes and ratably as between Noteholders within each such
Class, without preference or priority of any kind, according
to the respective amounts due and payable on the Class A-1
Notes and Class A-2 Notes for interest;
FIFTH: to the Class A-1 Noteholders and the Class A-2
Noteholders for amounts due and unpaid on the Class A-1 Notes
and Class A-2 Notes, respectively, for principal, on a pro
rata basis as between the Class A-1 Notes and Class A-2 Notes
(based on the unpaid Note Principal Amount of each such Class)
and ratably as between Noteholders within each such Class,
without preference or priority of any kind, according to the
respective amounts due and
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payable on the Class A-1 Notes and Class A-2 Notes for
principal, until the Class A Note Principal Amount has been
paid in full;
SIXTH: to the Insurer for all due and unpaid Insurer
Reimbursement Amounts;
SEVENTH: to the Class A-1 Noteholders and Class A-2
Noteholders for any unpaid Noteholders' Interest Basis
Carryover, on a pari passu basis (based on the ratio of each
such amount to the total of such amounts) as between the Class
A-1 Notes and Class A-2 Notes and ratably as between
Noteholders within each such Class, without preference or
priority of any kind, according to the amounts due and payable
on the Class A-1 Notes and Class A-2 Notes for Noteholders'
Interest Basis Carryover;
EIGHTH: to the Master Servicer for all amounts due to it under
the Master Servicing Agreement and not paid to it pursuant to
priority THIRD above;
NINTH: to the Persons entitled thereto, any amounts due under
Section or 10.05; and
TENTH: to the Issuer, free and clear of the lien of this
Indenture.
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, the Indenture Trustee and
the Insurer 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 (with the prior consent of the
Insurer) may elect to maintain possession of the Indenture Trust Estate. It is
the desire of the parties hereto and the Noteholders that there be at all times
sufficient funds for the payment of principal of and interest (including any
Noteholders' Interest Basis Carryover) on the Notes, and the Indenture Trustee
shall take such desire into account when determining whether to maintain
possession of the Indenture Trust Estate. In determining whether to maintain
possession of the Indenture Trust Estate, the Indenture Trustee may, but need
not, obtain and rely upon an opinion (which shall be obtained at the expense of
the Issuer) of an Independent investment banking or accounting firm of national
reputation as to the feasibility of such proposed action and as to the
sufficiency of the Indenture Trust Estate for such purpose.
Section 5.06. 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:
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(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 Class A-1
Note Principal Amount and the Class A-2 Note Principal Amount 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;
(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 Class A-1 Note Principal Amount and
the Class A-2 Note Principal Amount or the Insurer; and
(vi) the Insurer shall have given its prior written consent;
provided, however, that during the existence and continuation of an
Insurer Default the Indenture Trustee shall not require the prior
written consent of the Insurer.
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
Class A-1 Note Principal Amount and the Class A-2 Note Principal Amount, the
Indenture Trustee in its sole discretion may determine what action, if any,
shall be taken, notwithstanding any other provisions of this Indenture, but such
action, if any, shall require the prior consent of the Insurer or shall be at
the direction of the Insurer.
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 Primary Payment Date, in the case of the
Class A-1 Notes, or the Secondary Payment Date, in the case of the Class A-2
Notes, fixed
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for redemption) 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, the Insurer 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, the Insurer or to such Noteholder, then and in every such
case the Issuer, the Indenture Trustee, the Insurer 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, the Insurer 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, the Insurer or to the
Noteholders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
Section 5.10. Delay or Omission Not a Waiver. No delay or omission of
the Indenture Trustee or any Noteholder or the Insurer 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 or to the Insurer may be exercised
from time to time, and as often as may be deemed expedient, by the Indenture
Trustee, the Noteholders or the Insurer, as the case may be.
Section 5.11. Control by Noteholders. The Noteholders of a majority of
the Class A-1 Note Principal Amount and the Class A-2 Note Principal Amount
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) the Insurer shall have consented to such direction;
(ii) such direction shall not be in conflict with any rule of
law or with this Indenture;
(iii) subject to the express terms of Section 5.04 and only
during the existence and continuation of an Insurer Default, any
direction to the Indenture Trustee to sell or liquidate the Indenture
Trust Estate shall be by the Noteholders of 100% of the Class A-1 Note
Principal Amount and the Class A-2 Note Principal Amount;
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(iv) 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 Class A-1
Note Principal Amount and the Class A-2 Note Principal Amount to sell
or liquidate the Indenture Trust Estate shall be of no force and
effect; and
(v) 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 (with the consent of the Insurer) of not less than a majority of
the Class A-1 Note Principal Amount and the Class A-2 Note Principal Amount 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
(including, subject to the limitations of Sections 1.13(a)(iv) and 8.03(b), any
Noteholders' Interest Basis Carryover) on any of the Notes or (b) in respect of
a covenant or provision hereof which cannot be modified or amended without the
consent of each Noteholder; provided, however, that all Class A Noteholders
(with the consent of the Insurer) may waive events described in clauses (a) and
(b) hereof. In the case of any such waiver, the Issuer, the Indenture Trustee,
the Insurer 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 or the Insurer, (b) any suit instituted by any Noteholder, or
group of
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Noteholders, in each case holding in the aggregate more than 10% of the Note
Principal Amount or (c) any suit instituted by any Noteholder for the
enforcement of the payment of principal of or interest (including any
Noteholders' Interest Basis Carryover) 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 Primary Payment Date, in the case of the Class A-1
Notes, or the Secondary Payment Date, in the case of the Class A-2 Notes, fixed
for redemption).
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 or the Insurer, 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, the Insurer or the Noteholders shall be
impaired by the recovery of any judgment by the Indenture Trustee or the Insurer
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 or the
Insurer to do so, the Issuer shall take all such lawful action as the Indenture
Trustee may request to compel or secure the performance and observance by EFG or
the Master Servicer, as applicable, of each of their obligations to the Issuer
under or in connection with the Purchase and Contribution Agreement, the Master
Servicing Agreement and the other Transaction Documents and to exercise any and
all rights, remedies, powers and privileges lawfully available to the Issuer
under or in connection with the Purchase and Contribution Agreement, the Master
Servicing Agreement and the other Transaction Documents to the extent and in the
manner directed by the Indenture Trustee or the Insurer, including the
transmission of notices of default on the part of the Master Servicer thereunder
and the institution of legal or administrative actions or proceedings to compel
or secure performance by EFG or the Master Servicer of each of their obligations
under the Purchase and Contribution Agreement, the Master Servicing Agreement or
the other Transaction Documents.
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(b) The Indenture Trustee, with the written consent of the Insurer or
during the existence and continuation of an Insurer Default the Noteholders of
66-2/3% of the Class A-1 Note Principal Amount and the Class A-2 Note Principal
Amount, shall exercise all rights, remedies, powers, privileges and claims of
the Issuer against EFG and the Master Servicer under or in connection with the
Purchase and Contribution Agreement, the Master Servicing Agreement or the other
Transaction Documents, including the right or power to take any action to compel
or secure performance or observance by EFG or the Master Servicer of each of
their obligations to the Issuer thereunder and to give any consent, request,
notice, direction, approval, extension or waiver under the Purchase and
Contribution Agreement, the Master Servicing Agreement or the other Transaction
Documents and any right of the Issuer to take such action shall be suspended.
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Article VI
INDENTURE TRUSTEE
Section 6.01. Acceptance of the Trusts. The Indenture Trustee accepts
and agrees to execute the trusts granted to it by this Indenture, but only upon
the terms and conditions set forth herein. The Indenture Trustee, prior to the
occurrence of an Event of Default and after the curing or waiving of all Events
of Default which may have occurred, undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture and no implied
covenants or obligations shall be read into this Indenture against the Indenture
Trustee.
In case an Event of Default has occurred of which the Indenture Trustee
has, or is deemed to have, notice in accordance with this Indenture and has not
been cured, the Indenture Trustee agrees to act in accordance with the
instructions and orders of the Noteholders, but in any such event, only upon and
subject to the following expressed terms and conditions:
(a) The Indenture Trustee may execute any of the trusts or powers
hereof and perform any of its duties by or through attorneys, agents, receivers,
employees or co-trustees and shall not be answerable for the conduct of the same
if appointed in accordance with the standard specified above, and shall be
entitled to advice of counsel concerning all matters of trusts hereof and the
duties hereunder, and may in all cases pay such reasonable compensation to all
such attorneys, agents, receivers, and employees as may reasonably be employed
in connection with the trusts hereof. The Indenture Trustee may act upon the
opinion or advice of an attorney or accountant by it in the exercise of
reasonable care. The Indenture Trustee shall not be responsible for any loss or
damage resulting from any action or nonaction of such Person which is in good
faith and in reliance upon such opinion or advice. The Indenture Trustee shall
not be responsible for any action or inaction of the Master Servicer or any
party hereto except as provided herein or under applicable laws, rules and
regulations.
(b) The Indenture Trustee shall not be responsible for any recital
herein, or in any Note, or for the validity of the execution by the Issuer of
this Indenture, or of any supplemental indentures or instruments of further
assurance, or for the sufficiency of the security for the Notes issued hereunder
or intended to be secured hereby, or for the value or title of the property
herein conveyed or otherwise as to the maintenance of the security hereof.
(c) The Indenture Trustee shall not be accountable for the use or
application by the Issuer of the Notes or the proceeds thereof or for the use or
application of any money paid over by the Indenture Trustee in accordance with
the provisions of this Indenture or for the use and application of other money
received by the Indenture Trustee.
(d) The Indenture Trustee shall be protected in acting upon any notice,
requisition, request, consent, certificate, order, opinion, affidavit, letter,
telegram or other paper or document reasonably believed to be genuine and
correct and to have been signed or sent by the proper Person or Persons. Any
action taken by the Indenture Trustee pursuant to this
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Indenture upon the request or authority or consent of any Person who at the time
of making such request or giving such authority or consent is the owner of a
Note shall be conclusive and binding upon all future owners of the Notes and
upon any Notes issued in exchange therefor or in place thereof.
(e) Except as otherwise expressly provided in this Indenture, as to the
existence or nonexistence of any fact or as to the sufficiency or validity of
any instrument, paper or proceeding, the Indenture Trustee shall be entitled to
rely upon a certificate of an officer of any Noteholder as sufficient evidence
of facts therein contained, and prior to the occurrence of a default of which
the Indenture Trustee has been notified as provided in subsection (g) of this
Section, or of which by said subsection it is deemed to have notice, shall also
be at liberty to accept a dealing, transaction or action as necessary or
expedient, but may at its discretion secure such further evidence deemed
necessary or advisable, but shall in no case be bound to secure the same.
(f) The permissive right of the Indenture Trustee to do things
enumerated in this Indenture shall not be construed as a duty and the Indenture
Trustee shall not be answerable for other than its negligence or willful
misconduct; provided, however, that the Indenture Trustee shall not be liable
for any error of judgment made in good faith, unless it shall be proved that
such Person was negligent in ascertaining the pertinent facts.
(g) The Indenture Trustee shall not be required to take notice or be
deemed to have notice of any default hereunder except failure by the Issuer to
cause to be made any of the payments to it for the account of the Noteholders
required to be made by Section 3.01, or defaults under Section 5.01, unless the
Indenture Trustee shall be specifically notified in writing of such default by
the Issuer or a Noteholder.
(h) The Indenture Trustee shall not be required to give any bond or
surety in respect of the execution of the said trusts and powers or otherwise in
respect of the premises.
(i) No provision of this Indenture shall require the Indenture Trustee
to expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
(j) All moneys received by the Indenture Trustee shall, until used or
applied or invested as herein provided, be held in trust for the purposes for
which they were received in the Collection Account, the Class A-2 Distribution
Account, the Pre-Funding Account, the Capitalized Interest Account or the
Reserve Account.
(k) Whether or not herein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Indenture Trustee shall be subject to the provisions
of this Section.
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(l) NOTWITHSTANDING ANY OTHER PROVISION OF THIS INDENTURE OR THE OTHER
TRANSACTION DOCUMENTS, NOTHING IN THIS INDENTURE OR THE OTHER TRANSACTION
DOCUMENTS SHALL BE CONSTRUED TO LIMIT THE LEGAL RESPONSIBILITY OF THE INDENTURE
TRUSTEE TO THE SECRETARY OF EDUCATION OR A FEDERAL GUARANTOR FOR ANY VIOLATIONS
OF STATUTORY OR REGULATORY REQUIREMENTS THAT MAY OCCUR WITH RESPECT TO STUDENT
LOANS HELD BY THE INDENTURE TRUSTEE PURSUANT TO, OR TO OTHERWISE COMPLY WITH ITS
OBLIGATIONS UNDER, THE HIGHER EDUCATION ACT OR IMPLEMENTING REGULATIONS.
Section 6.02. Fees, Charges and Expenses of Indenture Trustee. The
Indenture Trustee shall be entitled (i) to payment of the Indenture Trustee's
Fees for its services rendered hereunder pursuant to the priorities set forth in
Section 8.03(b) and (ii) to payment by the Issuer of, or reimbursement for, all
advances, reasonable counsel fees and expenses and other out-of-pocket expenses
reasonably and necessarily made or incurred by the Indenture Trustee, in
connection with such services, which shall be paid to it.
Section 6.03. Notice if Default Occurs. If a default occurs of which
the Indenture Trustee is by Section 6.01(g) required to take notice or if notice
of default be given as provided in said Section 6.01(g), then the Indenture
Trustee shall give written notice thereof by registered or certified mail to the
Issuer and the Noteholders.
Section 6.04. Intervention by Indenture Trustee. In any judicial
proceeding to which the Issuer is a party, the Indenture Trustee shall intervene
if directed to do so in writing by the Insurer or a Majority Interest of the
Noteholders with the consent of the Insurer.
Section 6.05. Successors. Any corporation or association into which the
Indenture Trustee may be converted or merged, or with which it may be
consolidated, or to which it may sell or transfer its corporate trust business
and assets as a whole or substantially as a whole, or any corporation or
association resulting from any such conversion, sale, merger, consolidation or
transfer to which it is a party, ipso facto, shall be and become successor
Indenture Trustee hereunder and vested with all of the title to the whole
property or trust estate and all the trusts, powers, discretions, immunities,
privileges and all other matters as was its predecessor, without the execution
or filing of any instrument or any further act, deed or conveyance on the part
of any of the parties hereto, anything herein to the contrary notwithstanding.
Section 6.06. Resignation. The Indenture Trustee may at any time resign
from the trusts hereby created by giving 90 days' written notice to the Issuer,
the Insurer and the Noteholders, and such resignation shall take effect at the
end of such 90 days, or upon the earlier appointment and acceptance of a
successor Indenture Trustee, as provided in Section 6.08 hereof, or removal as
provided in Section 6.07 hereof. Notwithstanding the foregoing, resignation of
the Indenture Trustee shall not be effective until a successor or temporary
Indenture Trustee is appointed and has accepted such appointment; provided,
however, if an
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instrument of acceptance shall not have been delivered within 120 days after
giving such notice of resignation, the resigning Indenture Trustee may petition
a court of competent jurisdiction for the appointment of a successor, and any
attorneys' fees and expenses incurred in connection with such petition shall be
payable by the Issuer.
Section 6.07. Removal. The Indenture Trustee may be removed by the
Insurer or a Majority Interest of the Noteholders at any time with the consent
of the Insurer, by an instrument in writing delivered to the Indenture Trustee.
The Issuer shall remove the Indenture Trustee if (i) the Indenture Trustee fails
to comply with Section 6.13, (ii) an Insolvency Event occurs with respect to the
Indenture Trustee, (iii) a receiver or other public officer takes charge of the
Indenture Trustee or its property or (iv) the Indenture Trustee otherwise
becomes incapable of acting. Notwithstanding the foregoing, removal of the
Indenture Trustee shall not be effective until a successor is appointed and has
accepted such appointment.
Section 6.08. Appointment of Successor. In case the Indenture Trustee
shall resign or be removed, or be dissolved, or shall be in course of
dissolution or liquidation, or otherwise become incapable of acting hereunder,
or in case it shall be taken under the control of any public officer or
officers, or of a receiver appointed by a court, a successor acceptable to the
Insurer and meeting the eligibility requirements of Section 6.13 may be
appointed by the Issuer by an instrument in writing signed by the Issuer. The
Issuer shall also inform the Rating Agencies promptly of any such resignation or
removal of the Indenture Trustee. If no appointment of a successor Indenture
Trustee shall have been made pursuant to the foregoing provisions of this
Section within 120 days after the Indenture Trustee shall have given written
notice as provided in Section 6.06 hereof, the Indenture Trustee, the Issuer or
a Majority Interest of the Noteholders may apply to a court of competent
jurisdiction to appoint a successor Indenture Trustee. Each such successor
Indenture Trustee shall agree in writing to be bound by the provisions of
Section 10.06.
Section 6.09. Concerning Any Successor. Every successor Indenture
Trustee appointed hereunder shall execute, acknowledge and deliver to its
predecessor and also to the Issuer an instrument in writing accepting such
appointment hereunder, and thereupon such successor, without any further act,
deed or conveyance, shall become fully vested with all the estates, properties,
rights, powers, trusts, duties and obligations of its predecessor; but such
predecessor shall, nevertheless, upon receipt of a request from the Issuer
execute and deliver an instrument transferring to such successor all the
estates, properties, rights, powers and trusts of such predecessor hereunder;
and every predecessor shall deliver all securities and moneys held by it as
Indenture Trustee hereunder to its successor.
Section 6.10. Appointment of Co-Trustee. It is the purpose of this
Indenture that there shall be no violation of any law of any jurisdiction
denying or restricting the right of banking corporations or associations to
transact business as the Indenture Trustee in such jurisdiction. It is
recognized that in case of litigation under this Indenture or any other
Transaction
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Document or any Student Loan or related agreement, and in particular in case of
the enforcement thereof on default, or in case of a conflict of interest, or in
case the Indenture Trustee deems that by reason of any present or future law of
any jurisdiction it may not exercise any of the powers, rights or remedies
herein granted to the Indenture Trustee or hold title to the properties, in
trust, as herein granted, or take any other action which may be desirable or
necessary in connection therewith, it may be necessary that the Indenture
Trustee appoint an additional institution, which must be a commercial bank with
trust powers acceptable to the Insurer, as a separate or co-Trustee. The
following provisions of this Section are intended to accomplish these ends.
In the event that the Indenture Trustee appoints an additional
individual or institution as a separate or co-Trustee, each and every remedy,
power, right, claim, demand, cause of action, immunity, estate, title, interest
and lien expressed or intended by this Indenture to be exercised by or vested in
or conveyed to the Indenture Trustee with respect thereto shall be exercisable
by and vest in such separate or co-Trustee but only to the extent necessary to
enable such separate or co-Trustee to exercise such powers, rights and remedies,
and every covenant and obligation necessary to the exercise thereof by such
separate or co-Trustee shall run to and be enforceable by either of them.
Should any instrument in writing from the Issuer be required by the
separate or co-Trustee so appointed by the Indenture Trustee for more fully and
certainly vesting in and confirming to him, her or it such properties, rights,
powers, trusts, duties and obligations, any and all such instruments in writing
shall, on request, be executed, acknowledged and delivered by the Issuer. In
case any separate or co-Trustee, or a successor to either, shall die, become
incapable of acting, resign or be removed, all the estates, properties, rights,
powers, trusts, duties and obligations of such separate or co-Trustee, so far as
permitted by law, shall vest in and be exercised by the Indenture Trustee until
the appointment of a new Indenture Trustee or a successor to such separate or
co-Trustee.
Section 6.11. Successor Indenture Trustee as Trustee of Funds. In the
event of a change of the Indenture Trustee the predecessor which has resigned or
been removed shall cease to be trustee of any funds then held by it hereunder
and the successor Indenture Trustee shall become such trustee.
Section 6.12. Indemnification.
(a) The Indenture Trustee shall not be under any obligation or duty to
perform any act at the request of the Noteholders or the Issuer or to institute
or defend any suit in respect hereof or to exercise any remedy hereunder unless
properly indemnified to its satisfaction subject to Section 6.01(i) hereof,
except making payment of principal and interest, making a draw on the Insurance
Policy or accelerating the Notes as provided herein. The Indenture Trustee shall
not be required to take notice, or be deemed to have knowledge, of any default
of the Issuer, except as provided in Section 6.01(g).
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(b) The Issuer agrees to indemnify the Indenture Trustee for, and to
hold it harmless against, any loss, liability or expense, including reasonable
attorneys' fees and expenses, incurred without negligence or bad faith or
willful misconduct on its part, arising out of or in connection with the
acceptance or administration of the trust or trusts hereunder, including the
costs and expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder except as a result of negligence, bad faith or willful misconduct on
its part and except any liability to the DOE on account of the Indenture
Trustee's status as such.
Section 6.13. Eligibility Requirements for Indenture Trustee. The
Indenture Trustee and any successor Indenture Trustee shall at all times be (i)
an institution insured by the Federal Deposit Insurance Corporation, (ii) a
corporation or national bank or national banking association organized and doing
business under the laws of the United States of America or any state thereof,
authorized under such laws to exercise corporate trust powers, having a combined
capital and surplus of not less than $50,000,000 and subject to supervision or
examination by federal and state authority, (iii) an institution whose long-term
senior unsecured debt is rated at least "BBB-", in the case of S&P, "Ba2", in
the case of Xxxxx'x, or "BBB-", in the case of Fitch IBCA (or in the case of
each Rating Agency, such lower rating as is confirmed by such Rating Agency in
writing would not adversely affect any of the ratings then assigned to the Class
A Notes), and (iv) unaffiliated with the Issuer or EFG. If such corporation,
national bank or national banking association publishes reports of condition at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then, for the purposes of this Section, the
combined capital and surplus of such corporation, national bank or national
banking association shall be deemed to be its combined capital and surplus as
set forth in its most recent report or condition so published. If at any time
the Indenture Trustee shall cease to be eligible in accordance with the
provisions of this Section, the Indenture Trustee shall resign immediately in
the manner and with the effect specified in Section 6.06. No person shall become
a successor trustee hereunder if the succession of such Person would result in
the qualification, downgrading and withdrawal of any of the ratings then
assigned by the Ratings Agencies to the Notes.
Section 6.14. Tax Information. The Indenture Trustee shall deliver to
each Noteholder such information as may be required to enable such holder to
prepare its federal and state incime tax returns, provided that such information
shall consist only of Form 1099's or any successor forms required to be given to
Noteholders pursuant to the Code.
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Article VII
[RESERVED]
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Article VIII
SETTLEMENTS
Section 8.01. Trust Accounts; Investments by Indenture Trustee.
(a) Trust Accounts. On or before the Closing Date, the Indenture
Trustee shall establish, for the benefit of the Noteholders, to the extent of
their interests therein as provided herein, the Collection Account, the
Pre-Funding Account, the Reserve Account and the Capitalized Interest Account,
which Trust Accounts shall be maintained as Eligible Deposit Accounts. On or
before the Closing Date, the Indenture Trustee shall establish, for the benefit
of the Class A-2 Noteholders, to the extent of their interests therein as
provided herein, the Class A-2 Distribution Account, which account shall be
maintained as an Eligible Deposit Account. Subject to the further provisions of
this Section 8.01, the Indenture Trustee shall, upon receipt deposit into such
Trust Accounts all amounts received by it which are required to be deposited
therein in accordance with the provisions hereof. All such amounts and all
investments made with such amounts, including all income and other gain from
such investments, shall be held by the Indenture Trustee in such Trust Accounts
as part of the Collateral as herein provided, subject to withdrawal by the
Indenture Trustee in accordance with, and for the purposes specified in the
provisions of, this Indenture.
(b) Administration of Payments. The Indenture Trustee shall assume that
any amount remitted to it by the Master Servicer, any Sub-servicer or the Issuer
is to be deposited into the Collection Account pursuant to Section 8.03. The
Indenture Trustee may establish from time to time such deadline or deadlines as
it shall determine are reasonable or necessary in the administration hereof
after which all amounts received or collected by the Indenture Trustee on any
day shall not be deemed to have been received or collected until the next
succeeding Business Day.
(c) No Set-Off. None of the Eligible Lender Trustee or the Indenture
Trustee shall have any right of set-off against Collections, Trust Accounts, or
any investment therein, whether or not commingled to satisfy any other
obligations, and each of the Eligible Lender Trustee and the Indenture Trustee
hereby irrevocably waives any and all such rights.
(d) Investments. Amounts in the Trust Accounts shall be invested and
reinvested by the Indenture Trustee in Eligible Investments. Subject to the
restrictions on the maturity of investments set forth in Section 8.01(f), an
Issuer Order may authorize the Indenture Trustee to make the specific Eligible
Investments set forth therein, to make Eligible Investments from time to time
consistent with the general instructions set forth therein, or to make specific
Eligible Investments pursuant to instructions received in writing or by
facsimile transmission from the employees or agents of the Issuer identified
therein, in each case in such amounts as such Issuer Order shall specify. The
Issuer agrees to report as income for financial reporting
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and tax purposes (to the extent reportable) all investment earnings on amounts
in the Trust Accounts.
(e) Investments in the Absence of an Issuer Order; Notice of Uninvested
Cash. In the event that either (i) the Issuer shall have failed to give
investment directions to the Indenture Trustee by 11:00 a.m., New York City
time, on any Business Day on which there may be uninvested cash deposited in the
Trust Accounts or (ii) an Event of Default or Unmatured Event of Default shall
have occurred and be continuing, then the Indenture Trustee shall invest such
funds in Eligible Investments described in clause (v) of the definition thereof.
All Eligible Investments made by the Indenture Trustee shall mature no later
than the maturity date therefor permitted by Section 8.01(f).
(f) Maturity of Eligible Investments. All Eligible Investments shall
mature (or, with respect to mutual fund investments, shall be redeemable without
premium or penalty) no later than the Business Day prior to each Primary Payment
Date, or only in the case of the Class A-2 Distribution Account, no later than
the Business Day prior to each Secondary Payment Date. All income or other gains
from the investment of moneys deposited in the Trust Accounts shall be deposited
by the Indenture Trustee in the Collection Account upon receipt and shall deemed
to constitute a portion of the Available Funds for the related Primary Payment
Date or Secondary Payment Date, as applicable.
(g) Form of Investment. Any investment of any funds in the Trust
Accounts shall be made under the following terms and conditions:
(i) each such investment shall be made in the name of the
Indenture Trustee, for the benefit of the Issuer and the Noteholders
(to the extent of their respective interests therein), or in the name
of a nominee of the Indenture Trustee; and
(ii) any certificate or other instrument evidencing such
investment shall be delivered directly to the Indenture Trustee, and
the Indenture Trustee shall have sole possession of such instrument,
and all income on such investment.
(h) [Reserved]
(i) Indenture Trustee Not Liable. The Indenture Trustee shall not in
any way be held liable by reason of any insufficiency in the Trust Accounts
resulting from losses on investments made in accordance with the provisions of
this Section 8.01 (but the institution serving as Indenture Trustee shall at all
times remain liable for its own debt obligations, if any, constituting part of
such investments) except for negligence or intentional misconduct. The Indenture
Trustee shall not be liable for any investment made by it in accordance with
this Section 8.01 on the grounds that it could have made a more favorable
investment.
Section 8.02. Collection of Moneys. Except as otherwise expressly
provided herein, the Indenture Trustee may demand payment or delivery of, and
shall receive and collect,
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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 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 in accordance with the terms hereof.
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.
If at any time the Issuer shall receive any Collections on or in
respect of any Financed Student Loan (including any Student Loan Guaranty
Payment or Subsidy Payment), it shall hold such Collections for the benefit of
the Indenture Trustee (for the benefit of the Noteholders and the Insurer),
shall segregate such payment from the other property of the Issuer and shall
deliver such payment in the form received (endorsed as necessary for transfer)
to the Indenture Trustee for deposit in the Collection Account in accordance
with Section 8.03.
Section 8.03. Collection Account; Class A-2 Distribution Account.
(a) Deposits. The Issuer shall remit all Collections received by it to
the Collection Account no later than the close of business on the second
Business Day after receipt thereof, and the Master Servicer shall be instructed
to remit all Collections received by it in accordance with the Master Servicing
Agreement to the Collection Account for deposit therein. In addition, the Issuer
shall deposit to the Collection Account no later than the close of business on
each Determination Date the aggregate Purchase Amounts payable by the Issuer
pursuant to Section 2.02. If the Issuer shall receive any written statement from
the Master Servicer stating that any amount previously paid by the Master
Servicer to the Indenture Trustee or Issuer and deposited into the Collection
Account was so paid and deposited into the Collection Account in error, the
Issuer, if it shall concur as to the truth of such statement, shall forward to
the Indenture Trustee in writing, together with such security or indemnity as
may be required by it to hold the Indenture Trustee harmless, a copy of such
written statement from the Master Servicer, along with an instruction to the
Indenture Trustee to withdraw such amount from the Collection Account and pay
such amount to the Master Servicer. Following receipt from the Issuer of the
Master Servicer's statement and the written instructions set forth in the
preceding sentence, so long as no Event of Default shall have occurred and be
continuing, the Indenture Trustee shall withdraw such amount from the Collection
Account and pay such amount to such Master Servicer.
(b) Payment Date Procedures.
(i) Amounts on deposit on any Primary Payment Date in the
Collection Account representing Available Funds received during or with
respect to the related
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Collection Period, shall be withdrawn from the Collection Account on
such Primary Payment Date no later than 11:00 a.m. (New York City
time), in the amounts required, and applied in the following order of
priority set forth below, in each case to the extent of Available Funds
remaining after application of each clause representing a higher
priority:
first, an amount equal to the Policy Premium then
due, if any, pursuant to the Insurance Agreement shall be set
aside in the Collection Account and paid to the Insurer on
such Primary Payment Date;
second, an amount equal to the sum of (i) the
Servicing Fee Amount then due with respect to such Primary
Payment Date, plus any overdue Servicing Fees Amounts, (ii)
the Eligible Lender Trustee's Fees with respect to such
Primary Payment Date, plus any overdue Eligible Lender
Trustee's Fees, (iii) the Indenture Trustee's Fees with
respect to such Primary Payment Date, plus any overdue
Indenture Trustee's Fees, (iv) the Auction Agent Fee with
respect to such Primary Payment Date plus any overdue Auction
Agent Fees and (v) the Broker-Dealer Fee with respect to such
Primary Payment Date, plus any overdue Broker Dealer Fees,
shall in each case be paid to the Master Servicer, the
Eligible Lender Trustee (in the case of the Eligible Lender
Trustee's Fee), the Indenture Trustee (in the case of the
Indenture Trustee's Fee), the Auction Agent (in the case of
the Auction Agent Fee) and the Broker-Dealer (in the case of
the Broker-Dealer Fee), pari passu (based on the ratio of each
such amount to the total of such amounts), on such Primary
Payment Date;
third, an amount equal to the Class A-1 Noteholders'
Interest Distribution Amount and the Class A-2 Noteholders'
Interest Distribution Amount shall be allocated to the Class
A-1 Noteholders and the Class A-2 Noteholders, respectively,
pari passu (based on the ratio of each such amount to the
total of such amounts) and shall be set aside in the
Collection Account and, in the case of the Class A-1
Noteholders, paid as a distribution of interest to the Class
A-1 Noteholders on such Primary Payment Date and, in the case
of the Class A-2 Noteholders, deposited in the Class A-2
Distribution Account for payment as a distribution of interest
to the Class A-2 Noteholders on the related Secondary Payment
Date;
fourth, if the amount on deposit in the Reserve
Account is less than the Specified Reserve Account Balance, an
amount sufficient to cause the amount on deposit in the
Reserve Account to equal the Specified Reserve Account Balance
will be deposited into the Reserve Account;
fifth, an amount equal to the Noteholders' Principal
Distribution Amount shall be set aside in the Collection
Account and paid as a distribution of
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principal to the Class A-1 Noteholders on such Primary Payment
Date until the Class A-1 Note Principal Amount shall be
reduced to zero and thereafter shall be deposited in the Class
A-2 Distribution Account to be paid as a distribution of
principal to the Class A-2 Noteholders on the related
Secondary Payment Date until the Class A-2 Note Principal
Amount shall be reduced to zero; provided, however, that any
Principal Holdover Amounts shall be set aside and deposited
into the Collection Account and not distributed or deposited
on each Primary Payment Date;
sixth, an amount equal to any Insurer Reimbursement
Amounts shall be set aside in the Collection Account and paid
to the Insurer on such Primary Payment Date;
seventh, an amount equal to the Class A-1
Noteholders' Interest Basis Carryover and the Class A-2
Noteholders' Interest Basis Carryover shall be allocated to
the Class A-1 Noteholders and the Class A-2 Noteholders,
respectively, pari passu (based on the ratio of each such
amount to the total of such amounts) and shall be, in the case
of the Class A-1 Noteholders, distributed to the Class A-1
Noteholders on such Primary Payment Date and, in the case of
the Class A-2 Noteholders, deposited in the Class A-2
Distribution Account for distribution to the Class A-2
Noteholders on the related Secondary Payment Date; and
eighth, any Available Funds remaining in the
Collection Account after the distributions pursuant to clauses
first through seventh above shall be released to the Issuer on
such Primary Payment Date.
(ii) For any calendar month in which no Payment Dates occur
(because no Auction has occurred in accordance with the Auction
Procedures) amounts on deposit in the Collection Account in such month,
shall be withdrawn from the Collection Account on the Administrative
Payment Date in such month no later than 11:00 a.m. (New York City
time), in the amounts required, and applied in the following order of
priority set forth below, to the extent of the amounts on deposit in
the Collection Account are sufficient therefor:
first, an amount equal to the Policy Premium then
due, if any, pursuant to the Insurance Agreement shall be set
aside in the Collection Account and paid to the Insurer on
such Administrative Payment Date; and
second, an amount equal to the sum of (i) the
Servicing Fee Amount then due with respect to such
Administrative Payment Date, plus any overdue Servicing Fee
Amounts, (ii) the Eligible Lender Trustee's Fees with respect
to such Administrative Payment Date, plus any overdue Eligible
Lender Trustee's Fees, (iii) the Indenture Trustee's Fees with
respect to such Administrative
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Payment Date, plus any overdue Indenture Trustee's Fees, (iv)
the Auction Agent Fee with respect to such Administrative
Payment Date, plus any overdue Auction Agent Fees and (v) the
Broker-Dealer Fee with respect to such Administrative Payment
Date, plus any overdue Broker Dealer Fees, shall in each case
be paid to the Master Servicer, the Eligible Lender Trustee
(in the case of the Eligible Lender Trustee's Fee), the
Indenture Trustee (in the case of the Indenture Trustee's
Fee), the Auction Agent (in the case of the Auction Agent
Fee), the Broker-Dealer (in the case of the Broker-Dealer Fee)
and amounts owed under the Insurance Agreement, pari passu
(based on the ratio of each such amount to the total of such
amounts), on such Administrative Payment Date.
(c) Class A-2 Distribution Account. On each Secondary Payment Date, the
amount on deposit in the Class A-2 Distribution Account shall be applied to pay
all amounts due to the Class A-2 Noteholders. Such amount shall be distributed
as interest, principal or Noteholders' Interest Basis Carryover on the Class A-2
Notes based on the portion and amount, if any, of the deposit into the Class A-2
Distribution Account in respect of the related Primary Payment Date that was
allocated to each such item pursuant to Section 8.03(b), 8.04(b), 8.05(b),
5.04(b) or any other relevant provision of this Indenture or the Notes. To the
extent that amounts on deposit in the Class A-2 Distribution Account, including
Investment Earnings thereon, are not needed for distribution on each Secondary
Payment Date, all such amounts shall be transferred to the Collection Account on
such Secondary Payment Date.
Section 8.04. Reserve Account.
(a) On the Closing Date, the Issuer shall deposit the Reserve Account
Initial Deposit into the Reserve Account.
(b) On each Primary Payment Date (after giving effect to any deposit to
the Reserve Account pursuant to Section 8.03(b)(i), fourth, and after giving
effect to any withdrawal from the Reserve Account pursuant to Section 8.04(d)),
the Issuer shall instruct the Indenture Trustee to withdraw from the Reserve
Account the amount of any Reserve Account Excess and distribute such amount in
the following order of priority: (A) to the Noteholders, the aggregate unpaid
amount of any Noteholders' Interest Basis Carryover, (such amount to be
allocated on a pari passu basis (based on the ratio of the Class A-1
Noteholders' Interest Basis Carryover or the Class A-2 Noteholders' Interest
Basis Carryover, as applicable, to the total of such amounts) among the Class
A-1 Notes and the Class A-2 Notes, with the amount to be allocated to the Class
A-2 Notes to be deposited into the Class A-2 Distribution Account for
distribution on the related Secondary Payment Date, and (B) the remaining amount
of such excess to the Issuer. Amounts properly distributed pursuant to clause
(B) of this Section 8.04(b) shall be deemed released from the Indenture Trust
Estate and the security interest therein granted to the Indenture Trustee, and
the Issuer shall in no event thereafter be required to refund any such
distributed amounts.
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(c) Following the payment in full of the Note Principal Amount and of
all other amounts owing or to be distributed hereunder to the Noteholder, the
Indenture Trustee, the Insurer and the Master Servicer (including any
Noteholders' Interest Basis Carryover), any amount remaining on deposit in the
Reserve Account shall be distributed to the Issuer. Issuer shall in no event be
required to refund any amounts properly distributed pursuant to this Section
8.04(c).
(d) Amounts on deposit in the Reserve Account will be applied (i) on
each Primary Payment Date to cover any shortfalls (in the priority indicated in
Section 8.03(b)(i)) in payments of (A) Policy Premiums and any overdue Policy
Premiums, (B) the Servicing Fee Amount, the Trustee Fees, the Broker-Dealer Fee,
the Auction Agent Fee and any such amounts that are overdue Servicing Fee
Amounts, Trustee Fees, Auction Agent Fees or Broker-Dealer Fees, and (C) the
Class A Noteholders' Interest Distribution Amount, in each case, for which
Available Funds for such Payment Date are insufficient to make such payments and
(ii) and only on the Primary Payment Date on which either the Final Scheduled
Payment Date (whether as scheduled or if accelerated after an Event of Default)
occurs or on which, after allocating all Available Funds and making any
withdrawals required under clause (i) above, the remaining balance on deposit in
the Reserve Account exceeds the remaining principal balance of the Notes, to pay
(or deposit into the Class A-2 Distribution Account for distribution on the
following Secondary Payment Date) the remaining principal balance of the Notes.
Section 8.05. Pre-Funding Account.
(a) On the Closing Date, the Issuer will deposit in the Pre-Funding
Account $____________. During the Funding Period, the Issuer shall instruct the
Indenture Trustee to withdraw from the Pre-Funding Account on each Transfer
Date, an amount equal to the Additional Fundings Purchase Amount of the
Additional Financed Student Loans transferred to the Eligible Lender Trustee on
behalf of the Issuer on such Transfer Date and to distribute such amount to or
upon the order of the Issuer upon satisfaction of the conditions set forth in
Section 3.2 of the Purchase and Contribution Agreement with respect to such
transfer.
(b) If the Pre-Funded Amount has not been reduced to zero on the
Primary Payment Date on which the Funding Period ends (or, if the Funding Period
does not end on a Primary Payment Date, on the first Primary Payment Date
following the end of the Funding Period), the Issuer shall instruct the
Indenture Trustee to withdraw from the Pre-Funding Account on such Primary
Payment Date an amount equal to the Pre-Funded Amount and to distribute such
amount to Noteholders as a payment of principal. Such distribution shall be
allocated to the Class A-1 Notes until the Class A-1 Note Principal Amount has
been reduced to zero, and then to the Class A-2 Distribution Account, until the
amount on deposit therein is sufficient to reduce the Class A-2 Note Principal
Amount to zero on the related Secondary Payment Date.
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Section 8.06. Claims on the Insurance Policy.
(a) If an Insured Payment is necessary for any Collection Period, then
the Indenture Trustee shall give notice to the Insurer and the Fiscal Agent (as
defined in the Insurance Policy), if any, by telephone or telecopy of the amount
of the required Insured Payment. Such notice shall be confirmed in writing by
the Indenture Trustee in the form set forth as Exhibit A to the Insurance
Policy, to the Insurer and the Fiscal Agent, if any, so that such notice is
received by the Insurer and the Fiscal Agent no later than 12:00 noon, New York
City time, on the Deficiency Claim Date (as defined in the Insurance Policy).
Following receipt by the Insurer of such notice in such form, the Insurer or the
Fiscal Agent shall pay the Indenture Trustee any amount payable under the
Insurance Policy, on the later to occur of (i) 12:00 noon, New York City time,
on the third Business Day following such receipt and (ii) 12:00 noon, New York
City time, on the Primary Payment Date to which such deficiency relates, as
provided in the Insurance Policy.
(b) The Indenture Trustee shall deposit the Insured Payment made under
the Insurance Policy in the Collection Account and distribute such amount only
to pay to the Noteholders in accordance with the terms of the Insurance Policy,
and such amount may not be applied in any other manner. Amounts paid under the
Insurance Policy shall remain uninvested and shall be disbursed by the Indenture
Trustee to Noteholders in accordance with Section 8.03(b) hereof, the Insurance
Policy and this Indenture. However, the amount of any payment of principal of or
interest on the Notes to be paid from amounts in the Collection Account in
respect of payments on the Insurance Policy shall be noted as provided in
paragraph (c) below in the Note Register, and in the statement to be furnished
to the Noteholders pursuant to Section 3.06(d) hereof.
(c) The Indenture Trustee shall keep a complete and accurate record of
the amount of interest and principal paid in respect of any Notes from moneys
received under the Insurance Policy. The Insurer shall have the right to inspect
such records at reasonable times during normal business hours upon three
Business Day's prior notice to the Indenture Trustee at the expense of the
Insurer.
Section 8.07. Rights in Respect of Insolvency Proceedings.
(a) In the event that the Indenture Trustee has received a certified
copy of a final, nonappealable order of the appropriate court that any
distribution of the Noteholders' Distribution Amount has been voided in whole or
in part as a preference payment under applicable bankruptcy or insolvency law,
the Indenture Trustee shall comply with the terms of the Insurance Policy
relating to Preference Amounts (as defined in the Insurance Policy).
(b) The Indenture Trustee shall promptly notify the Insurer of either
of the following as to which an applicable Responsible Officer has actual
knowledge: (i) the commencement of any proceeding by or against the Issuer
commenced under the United States Bankruptcy Code or any other applicable United
States federal or state bankruptcy, insolvency, receivership, rehabilitation, or
similar law (an "Insolvency Proceeding") or (ii) the making of
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any claim in connection with any Insolvency Proceeding seeking the avoidance as
a preferential transfer (a "Preference Claim") of any payment of principal of or
interest on the Notes. Each Noteholder, by its purchase of a Note, and the
Indenture Trustee hereby agree that, so long as a Insurer Default shall not have
occurred and be continuing, the Insurer may at any time during the continuation
of an Insolvency Proceeding direct all matters relating to such Insolvency
Proceeding, including (i) all matters relating to any Preference Claim, (ii) the
direction of any appeal of any order relating to any Preference Claim and (iii)
the posting of any surety, supersedeas or performance bond pending any such
appeal. In addition, and without limitation of the foregoing, as set forth in
Section 8.08, the Insurer shall be subrogated to, and each Noteholder and the
Indenture Trustee hereby delegate and assign, to the fullest extent permitted by
law, the rights of the Indenture Trustee and such Noteholder in the conduct of
any Insolvency Proceeding, including all rights of any party to an adversary
proceeding action with respect to any court order issued in connection with any
such Insolvency Proceeding.
(c) Upon the occurrence of any of the events described in (a) or (b)
above, the Indenture Trustee shall furnish to the Insurer its records evidencing
the distributions of principal of and interest on the Notes that have been made
and subsequently recovered from Noteholders and the dates on which such payments
were made.
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Section 8.08. Effect of Payments by the Insurer; Subrogation.
(a) Anything herein to the contrary notwithstanding, any distribution
of principal of or interest on the Notes that is made with moneys received
pursuant to the terms of the Insurance Policy shall not be considered payment of
the Notes by the Issuer and shall not discharge the Issuer in respect of such
distribution. The Indenture Trustee acknowledges that, without the need for any
further action on the part of the Insurer, the Indenture Trustee or the Note
Registrar, (i) to the extent the Insurer makes payments, directly or indirectly,
on account of principal of or interest on the Notes to the Noteholders thereof,
the Insurer will be fully subrogated to the rights of such Noteholders to
receive such principal and interest from distributions of the assets of the
Issuer and will be deemed to the extent of the payments so made to be a
Noteholder and (ii) the Insurer shall be paid principal and interest in its
capacity as a Noteholder until all such payments by the Insurer have been fully
reimbursed, but only from the sources and in the manner provided herein for the
distribution of such principal and interest and in each case only after the
Noteholders have received all payments of principal and interest due to them
under this Indenture on the related Primary Payment Date or Secondary Payment
Date, as applicable.
(b) Without limiting the rights or interests of the Noteholders as
otherwise set forth herein, so long as no Insurer Default exists, the Indenture
Trustee shall cooperate in all respects with any reasonable request by the
Insurer for action to preserve or enforce the Insurer's rights or interests
under this Indenture, including a request to take any one or more of the
following actions upon the occurrence of an Event of Default:
(i) institute proceedings for the collection of all amounts
then payable on the Notes or under this Indenture, enforce any judgment
obtained and collect moneys adjudged due; and
(ii) 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 Insurer hereunder.
Section 8.09. Capitalized Interest Account.
(a) On the Closing Date, the Issuer shall deposit in the Capitalized
Interest Account $450,000. On the Determination Date with respect to each
Primary Payment Date occurring during the Funding Period and with respect to the
Primary Payment Date occurring immediately after the Collection Period during
which the Funding Period ends, the Issuer shall instruct the Indenture Trustee
to transfer from the Capitalized Interest Account to the Collection Account, the
Capitalized Interest Requirement for such Primary Payment Date.
(b) Immediately after the last Primary Payment Date with respect to
which the Capitalized Interest Requirement may be transferred to the Collection
Account as provided in clause (a) above, any amounts remaining in the
Capitalized Interest Account, shall be paid to the Issuer free and clear of the
Indenture. Immediately after such transfers, the Capitalized Interest Account
shall be closed.
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Article IX
REDEMPTION
Section 9.01. Redemption.
(a) In the event that on the Primary Payment Date on which the Funding
Period ends (or on the Primary Payment Date on or immediately following the last
day of the Funding Period, if the Funding Period does not end on a Primary
Payment Date) any amount that remains on deposit in the Pre-Funding Account
after giving effect to the making of all Additional Fundings, including any such
Additional Fundings on the Redemption Date, shall be used to redeem, in part,
the Class A-1 Notes and, to the extent all the Class A-1 Notes are paid in full,
the Class A-2 Notes in an aggregate principal amount equal to the amount then on
deposit in the Pre-Funding Account.
(b) [Reserved]
(c) The Issuer may elect to redeem the Notes in whole but not in part
on any Primary Payment Date by depositing with the Indenture Trustee an amount
which, when combined with all other amounts on deposit in the Trust Accounts on
such Primary Payment Date, is sufficient to distribute (or deposit in the case
of clause (ii)) on such Primary Payment Date (i) to the Class A-1 Noteholders,
the entire unpaid Class A-1 Note Principal Amount, all accrued and unpaid
interest on the Class A-1 Notes and all accrued and unpaid Class A-1
Noteholders' Interest Basis Carryover, (ii) into the Class A-2 Distribution
Account, an amount sufficient to distribute to the Class A-2 Noteholders on the
related Secondary Payment Date, the entire unpaid Class A-2 Note Principal
Amount, all accrued and unpaid interest on the Class A-2 Notes and all accrued
and unpaid Class A-2 Noteholders' Interest Basis Carryover, (iii) to the
Indenture Trustee, all amounts due to it under Section 6.02, (iv) to the Master
Servicer, all amounts due to the Master Servicer under the Master Servicing
Agreement and Sections 5.04 and 8.04(b) hereof, (v) to the Insurer, all due and
unpaid Policy Premiums and all Insurer Reimbursement Amounts and (vi) to the
Persons entitled thereto, any amounts due under Sections 7.01 or 10.05. Notice
of any redemption pursuant to this Section 9.01(c) shall be furnished by the
Issuer to the Indenture Trustee not later than 25 days prior to the Redemption
Date whereupon all of the amounts set forth above in this Section 9.01(c) shall
be payable on such Redemption Date.
Section 9.02. Form of Redemption Notice. Notice of redemption under
Section 9.01 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 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.
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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 1.03).
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 9.03. 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.
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Article X
MISCELLANEOUS
Section 10.01. Amendments, Etc.
(a) Without the consent of any Noteholders, the Issuer and the
Indenture Trustee, at any time and from time to time with prior written consent
of the Insurer, may enter into one or more indentures supplemental hereto, in
form satisfactory to the Indenture Trustee, for any of the following purposes:
(i) to add to the covenants of the Issuer for the benefit of
the Noteholders, or to surrender any right or power herein conferred
upon the Issuer;
(ii) to cure any ambiguity, to correct or supplement any
provision herein which may be inconsistent with any other provision
herein; or
(iii) to correct or amplify the description of any property at
any time subject to the lien of this Indenture, or to better assure,
convey and confirm unto the Indenture Trustee any property subject or
required to be subjected to the lien of this Indenture; or
(iv) to evidence and provide for the acceptance of the
appointment of a successor Indenture Trustee; or
(v) add, change or eliminate any other provision herein in any
manner;
provided such action pursuant to this Section 10.01(a) shall not
materially and adversely affect the interests of the Noteholders in any respect.
The Indenture Trustee shall promptly deliver to each Noteholder and the
Rating Agency a copy of any supplemental indenture entered into pursuant to this
Section 10.01(a).
(b) With the written consent of the Holders of not less than 66-2/3% of
the then Note Principal Amount (for which purpose the Insurer shall be deemed
the sole Holder for so long as the Insurance Policy is in effect and the Insurer
has not defaulted), the Issuer and the Indenture Trustee may 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 supplemental indenture shall, without
the written consent (which consent shall in no event be exercised by the
Insurer) of the Holder of each Outstanding Note affected thereby,
(i) change the Final Scheduled Payment Date of any Note or the
principal payments or interest payments due or to become due on any
Payment Date with respect
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to any Note, or change the priority of payment thereof as set forth
herein, or reduce the principal amount thereof or the Note Rate
thereon, or change the 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 any such payment on or
after the maturity thereof;
(ii) reduce the percentage of the Note Principal Amount
required for any such supplemental indenture pursuant to Section
10.01(b) hereof, for any waiver of compliance with provisions of this
Indenture or Events of Default and their consequences, or for any act
of Noteholders;
(iii) modify any of the provisions of this Section except to
increase any percentage or fraction set forth therein or to provide
that certain other provisions of this Indenture cannot be modified or
waived without the consent of the Holder of each Outstanding Note
affected thereby;
(iv) modify or alter the provisions of the proviso to the
definition of the term "Outstanding"; or
(v) 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 terminate the lien of this Indenture on any
property at any time subject hereto or deprive any Noteholder of the
security afforded by the lien of this Indenture; or
(vi) result in a taxable event to any Class of Noteholders.
(c) In executing any supplemental indenture, the Indenture Trustee
shall be entitled to receive and 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 supplemental indenture which affects the
Indenture Trustee's own rights, duties, protections, or immunities under this
Indenture or otherwise.
(d) Upon the execution of any supplemental indenture under this Section
10.01, this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes, and
every Noteholder of Notes theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.
Section 10.02. Notices, Etc. All notices and other communications
provided for hereunder shall, unless otherwise stated herein, be in writing
(including facsimile communication) and shall be personally delivered or sent by
express mail or courier or by certified mail, postage prepaid, or by facsimile,
to the intended party at the address or facsimile number of such party set forth
under its name on the signature pages hereof or at such other address or
facsimile number as shall be designated by such party in a written notice
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to the other parties hereto. All such notices and communications shall be
effective, (a) if personally delivered or sent by express mail or courier or if
sent by certified mail, when received, and (b) if transmitted by facsimile, when
sent, receipt confirmed by telephone or electronic means.
Section 10.03. No Waiver; Remedies. No failure on the part of the
Issuer, the Indenture Trustee or any Noteholder to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof (unless waived
in writing); nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
Section 10.04. Binding Effect; Survival. This Indenture shall be
binding upon and inure to the benefit of the Issuer, the Indenture Trustee, the
Insurer, the Noteholders, and their respective successors and assigns. This
Indenture shall create and constitute the continuing obligations of the parties
hereto in accordance with its terms, and shall remain in full force and effect
until the Final Scheduled Payment Date. The rights and remedies with respect to
any breach of any representation and warranty made by the Issuer pursuant to
Article II and the indemnification and payment provisions of Article VI, and
Section 10.05 and 10.06 shall be continuing and shall survive any termination of
this Indenture.
Section 10.05. Costs, Expenses and Taxes. The Issuer agrees to pay
within three Business Days of demand:
(a) all reasonable costs and expenses incurred by the Indenture Trustee
and its Affiliates in connection with the negotiation, preparation, execution
and delivery, the administration (including periodic auditing and monitoring
fees of the Ratings Agencies), the amendment to, or waiver of, or the
enforcement of, or any actual or claimed breach of, this Indenture and the other
Transaction Documents, including, without limitation (i) the reasonable fees and
expenses of counsel to any of such Persons incurred in connection with any of
the foregoing or in advising such Persons as to their respective rights and
remedies under any of the Transaction Documents, and (ii) all reasonable
out-of-pocket expenses (including reasonable fees and expenses of independent
accountants), incurred in connection with any review of the Issuer's, the Master
Servicer's or a Sub-servicer's books and records either prior to the execution
and delivery hereof or pursuant to this Indenture, the Master Servicing
Agreement or a Sub-servicing Agreement; and
(b) all stamp and other taxes and fees payable or determined to be
payable in connection with the execution, delivery, filing and recording of this
Indenture or the other Transaction Documents, and agrees to indemnify the
Indenture Trustee against any liabilities with respect to or resulting from any
delay in paying or omission to pay such taxes and fees.
Section 10.06. No Proceedings. Notwithstanding any provision hereof to
the contrary, the Indenture Trustee, by entering into this Indenture, and each
Noteholder by accepting a
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Note, hereby covenant and agree that they will not at any time institute against
the Issuer, or join in any institution against the Issuer of, any bankruptcy,
reorganization, arrangement, insolvency 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 Transaction Documents. The provisions of this Section 10.06 shall survive
the termination of this Indenture.
Section 10.07. Captions and Cross References. The various captions
(including, without limitation, the table of contents) in this Indenture are
provided solely for convenience of reference and shall not affect the meaning or
interpretation of any provision of this Indenture. Unless otherwise indicated,
references in this Indenture to any Section, Appendix, Schedule or Exhibit are
to such Section of or Appendix, Schedule or Exhibit to this Indenture, as the
case may be, and references in any Section, subsection, or clause to any
subsection, clause or subclause are to such subsection, clause or subclause of
such Section, subsection or clause.
Section 10.08. Integration. This Indenture and the other Transaction
Documents, contains a final and complete integration of all prior expressions by
the parties hereto with respect to the subject matter hereof and shall
constitute the entire understanding among the parties hereto with respect to the
subject matter hereof, superseding all prior oral or written understandings.
Section 10.09. Governing Law. THIS INDENTURE, INCLUDING THE RIGHTS AND
DUTIES OF THE PARTIES HERETO, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK, EXCEPT TO THE EXTENT THAT THE
PERFECTION OF THE INTERESTS OF NOTEHOLDERS IN THE COLLATERAL IS GOVERNED BY THE
LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK.
Section 10.10. Waiver of Jury Trial. THE ISSUER HEREBY EXPRESSLY WAIVES
ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND
ANY RIGHTS UNDER THIS INDENTURE, ANY OTHER TRANSACTION DOCUMENT OR UNDER ANY
AMENDMENT, INSTRUMENT OR DOCUMENT DELIVERED OR WHICH MAY BE IN THE FUTURE BE
DELIVERED IN CONNECTION HEREWITH OR ARISING FROM ANY BANKING OR OTHER
RELATIONSHIP EXISTING IN CONNECTION WITH THIS INDENTURE OR ANY OTHER TRANSACTION
DOCUMENT AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A
COURT AND NOT A JURY TRIAL.
Section 10.11. Execution in Counterparts. This Indenture may be
executed in any number of counterparts and by the different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and the same
agreement.
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Section 10.12. Usury. The amount of interest payable or paid on any
Note under the terms of this Indenture shall be limited to an amount that shall
not exceed the maximum nonusurious rate of interest allowed by the applicable
laws of the State of New York or any applicable law of the United States of
America permitting a higher maximum nonusurious rate that preempts such
applicable New York laws, which could lawfully be contracted for, charged or
received (the "Highest Lawful Rate"). In the event any payment of interest on
any Note exceeds the Highest Lawful Rate, the Issuer stipulates that such excess
amount will be deemed to have been paid to the applicable Noteholder as a result
of an error and the Noteholder receiving such excess payment shall promptly,
upon discovery of such error or upon notice thereof from the Indenture Trustee
on behalf of the Issuer, refund the amount of such excess or, at the option of
such Noteholder, apply the excess to the payment of principal of such Note, if
any, remaining unpaid. In addition, all sums paid or agreed to be paid to the
Indenture Trustee for the benefit of Noteholders for the use, forbearance or
detention of money shall, to the extent permitted by applicable law, be
amortized, prorated, allocated and spread throughout the full term of such
Notes.
Section 10.13. Compliance Certificates and Opinions. 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 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
(iii) a statement as to whether, in the opinion of each such
signatory such condition or covenant has been complied with.
Section 10.14. Certain Matters Regarding the Insurer and The Insurance
Policy.
(a) Rights of the Insurer to Exercise Certain Rights of Class A
Noteholders. By accepting its Note, each Class A Noteholder agrees that unless
an Insurer Default exists, the Insurer, notwithstanding any other provision
contained herein, shall have the right to exercise the rights of the Class A
Noteholders with respect to all matters, including without limitation the
following matters without consent of the Class A Noteholders, to the extent such
rights are provided for herein:
(i) the right to direct the Indenture Trustee in writing to
terminate the rights and obligations of the Master Servicer under the
Master Servicing Agreement in the event of a Servicer Default;
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(ii) the right to consent to or direct any waivers of defaults
by the Master Servicer;
(iii) the right to remove the Indenture Trustee pursuant to
this Indenture;
(iv) the right to control actions of the Master Servicer with
respect to modifications or waivers with respect to the Collateral; and
(v) the right to exercise all rights of consent, election,
waiver, recission, annulment, instruction, direction or control
provided to Noteholders under Article V of the Indenture, including but
not limited to any declaration of acceleration with respect to the
Notes.
In addition, unless an Insurer Default exists, the Insurer's consent
will be required prior to, among other things, (i) the appointment of any
successor Indenture Trustee or Master Servicer or (ii) any amendment to the
Indenture or the other Transaction Documents; provided, however, in any case
that the Insurer shall not unreasonably withhold, condition or delay its
consent. Each Class A Noteholder agrees that, unless an Insurer Default exists,
the rights specifically set forth above may be exercised by the Class A
Noteholders only with the prior written consent of the Insurer.
(b) Issuer to Act Solely with Consent of the Insurer. Unless an Insurer
Default exists, the Issuer shall not exercise the right to appoint a co-trustee
pursuant to Section 6.10 of this Indenture or successor Indenture Trustee
pursuant to Section 6.08 of this Indenture without the prior written consent of
the Insurer which shall not be unreasonably withheld.
Unless an Insurer Default exists and is continuing, the Issuer and the
Indenture Trustee shall not undertake any litigation with respect to the
Indenture Trust Estate without the prior consent of or at the written direction
of the Insurer.
(c) Indenture Trustee to Act Solely with Consent of the Insurer. Unless
an Insurer Default exists and is continuing, the Indenture Trustee shall not
exercise the right to:
(i) undertake any litigation pursuant to the Indenture or
incur any expenses reimbursable pursuant to Section 10.05 of this
Indenture.
(ii) make any of the elections or exercise any of the remedies
set forth in Section 5.02, 5.03, 5.04(a) or 5.05 of this Indenture; and
(iii) agree to any amendment to, or grant any waiver of its
rights under, the Master Servicing Agreement;
without the prior written consent of the Insurer, which shall not be
unreasonably withheld, but shall do so at the direction of the Insurer;
provided, however, that during the existence and
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continuation of an Insurer Default the Indenture Trustee shall not require the
prior written consent of the Insurer to exercise any of the rights enumerated
above.
(d) Collateral and Trust Accounts Held for Benefit of the Insurer and
the Class A Noteholders. The Indenture Trustee shall hold the Collateral for the
benefit of the Noteholders and, unless an Insurer Default exists, the Insurer,
and all references in this Indenture and in the Notes to the benefit of Holders
of the Notes shall, unless an Insurer Default exists, be deemed to include the
Insurer.
(e) Indenture Trustee to Cooperate. Unless an Insurer Default exists,
the Indenture Trustee shall cooperate in all respects with any reasonable
written request by the Insurer for action to preserve or enforce the Insurer's
rights or interests hereunder without limiting the rights or affecting the
interests of the Noteholders as otherwise set forth herein. The Indenture
Trustee shall be fully protected in acting at the direction of the Insurer as
provided hereunder.
(f) Surrender and Cancellation. The Indenture Trustee shall surrender
the Insurance Policy to the Insurer for cancellation upon the expiration of the
term of the Insurance Policy as provided in the Insurance Policy.
(g) Reports to the Insurer. All notices, statements, reports,
certificates or opinions required by this Indenture to be sent to any other
party hereto or to any of the Class A Noteholders shall also be sent to the
Insurer. The Issuer and the Indenture Trustee shall make available to the
Insurer their books and records during regular business hours for the purpose of
copying at the Insurer's expense and inspection of any information about the
Class A Notes or the Class A Noteholders.
[SIGNATURES BEGIN ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the parties have caused this Indenture to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
EFG-II, LP,
as Issuer
By: EFG-II SPC-I, Inc.,
as General Partner
By:
Address: 000 Xxxxxxx Xxxxxx
X. Xxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xx. Xxxxxxx X. Xxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (508) 394-1755
THE FIRST NATIONAL BANK OF CHICAGO,
as Indenture Trustee and Eligible Lender
Trustee
By:
Name:
Title:
Address: Xxx Xxxxx Xxxxxxxx Xxxxx,
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Corporate Trust
Services Division
Telephone No.:
Facsimile No.:
Solely for the purpose of making
the representations and warranties set
forth in Section 2.03
EFG-II SPC-II, INC.
By:
Name:
Title:
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APPENDIX A
DEFINITIONS
This is Appendix A to the Indenture, dated as of June 14, 1999, among
EFG-II, LP and The First National Bank of Chicago, as Indenture Trustee and
Eligible Lender Trustee (as amended, supplemented or otherwise modified from
time to time, the "Indenture"). Each reference in this Appendix A to any
Section, the Preamble, Appendix or Exhibit, unless otherwise stated, refers to
such Section of or Appendix, Preamble or Exhibit to the Indenture.
77
Defined Terms. As used in the Indenture, unless the context requires a
different meaning, the following terms have the meanings indicated below (such
definitions to be applicable to both the singular and plural forms of such
terms):
"Additional Financed Student Loans" means a Student Loan which is
transferred to the Issuer pursuant to the Purchase and Contribution Agreement
during the Funding Period or any Student Loan substituted pursuant to Section
2.02 of the Indenture.
"Additional Fundings" means any withdrawal of amounts from the
Pre-Funding Account for the purposes set forth in Section 8.05(a) of the
Indenture.
"Additional Fundings Purchase Amount" means with respect to the
purchase of Additional Financed Student Loans an amount equal to the sum of the
Principal Balance of such Additional Financed Student Loans and all accrued and
unpaid interest thereon.
"Administrative Payment Date" means, for a calendar month in which a
Payment Date does not occur, the eighteenth day of such calendar month or if
such day is not a Business Day, the next succeeding Business Day.
"Affiliate" when used with respect to a Person means any other Person
controlling, controlled by, or under common control with, such Person. For
purposes of this definition, "control" when used with respect to any specified
Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Auction" means the implementation of the Auction Procedures.
"Auction Agent" means IBJ Whitehall Bank & Trust Company and its
successors and assigns.
"Auction Agent Agreement" means the Auction Agent Agreement dated as of
June 14, 1999, between the Indenture Trustee and the Auction Agent including any
amendment thereof or supplement thereto.
"Auction Date" means (i) in the case of the Class A-1 Notes, the
eighteenth day of each calendar month in which an Auction occurs, or if the
eighteenth day is not a Business Day, the next succeeding Business Day and (ii)
in the case of the Class A-2 Notes, the twenty-fifth day of each calendar month
in which an Auction occurs, of if the twenty-fifth day is not a Business Day,
the next succeeding Business Day.
"Auction Agent Fee" means the fee payable to the Auction Agent as set
forth in the Auction Agent Agreement.
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"Auction Procedures" means the procedures set forth in Appendix B to
the Indenture by which each Auction Rate is determined.
"Auction Rate" means each per annum rate of interest that results from
the implementation of the Auction Procedures which rate is determined as
described in Section 2.1.1(c)(ii) of the Auction Procedures.
"Authorized Officer" means (i) with respect to the Issuer, any officer
or agent of the General Partner, acting on behalf of the General Partner for and
on behalf of the Issuer and (ii) with respect to the Seller and the Master
Servicer, any officer of the Seller or the Master Servicer, respectively, who is
authorized to act for and on behalf of the Seller or the Master Servicer,
respectively.
"Available Funds" means with respect to each Primary Payment Date and
the related Collection Period the sum of (x) (i) all Collections received during
or with respect to such Collection Period, (ii) all Purchase Amounts received in
respect of such Collection Period pursuant to Section 2.02 of the Indenture,
Section 4.2 of the Purchase and Contribution Agreement or Section 4.01 of the
Master Servicing Agreement, (iii) all Investment Earnings, (iv) the Principal
Holdover Amount for the preceding Primary Payment Date and (v) the amount
deposited from the Capitalized Interest Account into the Collection Account on
such Primary Payment Date and minus (y) the amounts paid on any Administrative
Payment Date during such Collection Period.
"Bankruptcy Code" means Title 11 of the United States Code.
"Book-Entry Note" means a beneficial interest in the Notes, ownership
and transfers of which shall be made through book entries by a Clearing Agency
as described in Section 1.10 of the Indenture.
"Borrower" means an individual who is the maker of a Student Loan Note
and who obtains a Student Loan from an "eligible lender" in accordance with the
Higher Education Act and the policies and procedures of the applicable Student
Loan Guarantor.
"Broker-Dealer" means Xxxxxx Brothers Inc. or any other broker or
dealer (each as defined in the Securities Exchange Act of 1934, as amended),
commercial bank or other entity permitted by law to perform the functions
required of a Broker-Dealer set forth in the Auction Procedures that (a) is a
Participant (or an affiliate of a Participant), (b) has been appointed as such
by the Issuer pursuant to Section 2.1.6 of the Auction Procedures and (c) has
entered into a Broker-Dealer Agreement that is in effect on the date of
reference.
"Broker-Dealer Agreement" means each agreement between the Auction
Agent and a Broker-Dealer, and approved by the Issuer, pursuant to which the
Broker-Dealer agrees to participate in Auctions as set forth in the Auction
Procedures, as from time to time amended or
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supplemented. Each Broker-Dealer Agreement shall be in substantially the form of
the Broker-Dealer Agreement dated as of June 14, 1999, between the Auction
Agent, and the Broker-Dealer.
"Broker-Dealer Fee" means the fee payable to the Broker-Dealer as set
forth in the Broker-Dealer Agreement.
"Business Day" means a day other than (i) a Saturday or Sunday, or (ii)
a day on which the Indenture Trustee or banks located in Chicago, Illinois, New
York, New York or the Commonwealth of Massachusetts are all authorized or
obligated by law or executive order to be closed for business.
"Capitalized Interest Account" means the account designated as such,
established and maintained pursuant to Sections 8.01 and 8.09 of the Indenture.
"Capitalized Interest Amount" means for any Collection Period or other
period of determination, the amount of interest that accrued on the Financed
Student Loans during such period but was not then payable and that has been or
will, pursuant to the terms of such Financed Student Loans, be capitalized and
added to the principal balances of such loans.
"Capitalized Interest Requirement" means, with respect to each Primary
Payment Date occurring during the Funding Period and the Primary Payment Date
occurring immediately after the Collection Period during which the Funding
Period ends, the excess, if any, of (x) the sum of the Servicing Fee Amount,
Indenture Trustee's Fees and Expenses, Auction Agent Fee, Broker-Dealer Fee,
Policy Premium and Noteholders' Interest Distribution Amount over (y) the
Expected Interest Collection with respect to the related Collection Period.
"Class" means the Class A-1 Notes or the Class A-2 Notes.
"Class A Note" means a Class A-1 Note or a Class A-2 Note and "Class A
Notes" means the Class A-1 Notes, together with the Class A-2 Notes.
"Class A Noteholder" means a Person in whose name a Class A-1 Note or a
Class A-2 Note is registered in the Note Register.
"Class A Note Principal Amount" means the sum of the Class A-1 Note
Principal Amount and the Class A-2 Note Principal Amount.
"Class A-1 Available Funds" means, solely with respect to Class A-1
Required Distributions, for any Primary Payment Date, the Available Funds for
such Primary Payment Date plus any amounts available from the Reserve Account
less (i) all amounts allocated pursuant to the Indenture in respect of the
Servicing Fee, the Trustee Fees and Expenses, the Auction Agent Fee and the
Policy Premium, including any such amounts that are overdue and
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(ii) the amount allocated on such Primary Payment Date for deposit into the
Class A-2 Distribution Account.
"Class A-1 Deficiency Amount" means the excess if any of the Class A-1
Required Distribution over, in the case of any Primary Payment Date or the Final
Scheduled Payment Date for the Class A-1 Notes, the Class A-1 Available Funds
for such date.
"Class A-1 Formula Rate" means with respect to any Primary Payment
Date, the Auction Rate established for the Class A-1 Notes for such Primary
Payment Date as determined pursuant to the Auction Procedures.
"Class A-1 Insurance Policy" means a note guaranty insurance policy
with respect to the Class A-1 Notes and all endorsements thereto, if any, dated
the Closing Date, issued by the Insurer for the benefit of the Class A-1
Noteholders.
"Class A-1 Note" means a Class A-1 Note issued pursuant to Section
1.01(a) of the Indenture, substantially in the form of Exhibit 1.01(a) to the
Indenture.
"Class A-1 Note Principal Amount" means with respect to the Class A-1
Notes at any time, the Class A-1 Original Note Principal Amount, less all
payments in reduction of principal of the Class A-1 Notes that have actually
been received by the Class A-1 Noteholders.
"Class A-1 Note Rate" means with respect to the first Primary Payment
Date, 5.038% per annum, and for any subsequent Primary Payment Date, the per
annum rate equal to the lesser of (i) the Class A-1 Formula Rate and (ii) the
Student Loan Rate for the related Collection Period.
"Class A-1 Noteholder" means a Person in whose name a Class A-1 Note is
registered in the Note Register.
"Class A-1 Noteholders' Interest Basis Carryover" means, if the Class
A-1 Note Rate for any Payment Date is based on the Student Loan Rate, the amount
equal to the excess, if any, of (a) the amount of interest on the Class A-1
Notes that would have accrued in respect of the related Interest Period had
interest been calculated based on the Class A-1 Formula Rate over (b) the amount
of interest on the Class A-1 Notes actually accrued in respect of such Interest
Period based on the Student Loan Rate, together with the unpaid portion of any
such excess from prior Payment Dates (and interest accrued thereon, to the
extent permitted by law, at the applicable Class A-1 Note Rate calculated based
on the Class A-1 Formula Rate).
"Class A-1 Noteholders' Interest Carryover Shortfall" means, with
respect to any Primary Payment Date, the excess, if any, of (i) the Class A-1
Noteholders' Interest Distribution Amount on the preceding Primary Payment Date
over (ii) the amount of interest
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actually distributed to the Class A-1 Noteholders on such preceding Primary
Payment Date, plus interest on the amount of such excess, to the extent
permitted by law, at the interest rate borne by the Class A-1 Notes from such
preceding Primary Payment Date to the current Primary Payment Date.
"Class A-1 Noteholders' Interest Distribution Amount" means, with
respect to any Primary Payment Date, the sum of (i) the amount of interest
accrued at the Class A-1 Note Rate for the related Interest Period on the
outstanding Class A-1 Note Principal Amount on the immediately preceding Primary
Payment Date after giving effect to all principal distributions to holders of
Class A-1 Notes on such date (or, in the case of the first Primary Payment Date,
outstanding on the Closing Date) and (ii) the Class A-1 Noteholders' Interest
Carryover Shortfall for such Primary Payment Date; provided, however, that the
Class A-1 Noteholders' Interest Distribution Amount will not include any Class
A-1 Noteholders' Interest Basis Carryover.
"Class A-1 Original Note Principal Amount" has the meaning set forth in
Section 1.02(b) of the Indenture.
"Class A-1 Required Distribution" means for the Class A-1 Insurance
Policy and (i) any Primary Payment Date prior to the Final Scheduled Payment
Date, an amount equal to the Class A-1 Noteholders' Interest Distribution Amount
plus (x) the lesser of (1) the Subordination Deficit, if any, and (2) the
outstanding Class A-1 Note Principal Amount or (y) if an Event of Default has
occurred and is continuing, the Subordination Deficit, if any, multiplied by a
fraction the numerator of which is the outstanding Class A-1 Note Principal
Amount and the denominator of which is the outstanding Class A Note Principal
Amount and (ii) for the Final Scheduled Payment Date (whether as scheduled or if
accelerated after an Event of Default) with respect to the Class A-1 Notes, an
amount equal to the sum of the Class A-1 Noteholders' Interest Distribution
Amount plus the outstanding Class A-1 Note Principal Amount.
"Class A-2 Available Funds" means, solely with respect to the Class A-2
Required Distributions, for any Secondary Payment Date, the amount on deposit in
the Class A-2 Distribution Account on such date consisting of the amount
allocated on the immediately preceding Primary Payment Date for deposit into the
Class A-2 Distribution Account plus any Investment Earnings realized on such
amount since such Primary Payment Date plus any amounts available from the
Reserve Account.
"Class A-2 Deficiency Amount" means the excess if any of the Class A-2
Required Distribution over, in the case of any Secondary Payment Date or the
Final Scheduled Payment Date for the Class A-2 Notes, the Class A-2 Available
Funds for such date.
"Class A-2 Distribution Account" means the segregated trust account
established at a Qualified Institution, in the name of the Indenture Trustee,
for the benefit of the Class X-0
X-0
00
Xxxxxxxxxxx, which account has been designated as the Class A-2 Distribution
Account, and any other account designated as the Class A-2 Distribution Account
by the Indenture Trustee.
"Class A-2 Formula Rate" means with respect to any Secondary Payment
Date, the Auction Rate established for the Class A-2 Notes for such Secondary
Payment Date as determined pursuant to the Auction Procedures.
"Class A-2 Insurance Policy" means a note guaranty insurance policy
with respect to the Class A-2 Notes and all endorsements thereto, if any, dated
the Closing Date, issued by the Insurer for the benefit of the Class A-2
Noteholders.
"Class A-2 Note" means a Class A-2 Note issued pursuant to Section
1.01(a) of the Indenture, substantially in the form of Exhibit 1.01(b) to the
Indenture.
"Class A-2 Note Principal Amount" means with respect to the Class A-2
Notes at any time, the Class A-2 Original Note Principal Amount, less all
payments in reduction of principal of the Class A-2 Notes that have actually
been received by the Class A-2 Noteholders.
"Class A-2 Note Rate" means with respect to the first Secondary Payment
Date, 5.038% per annum, and for any subsequent Secondary Payment Date, the per
annum rate equal to the lesser of (i) the Class A-2 Formula Rate and (ii) the
Student Loan Rate for the related Collection Period.
"Class A-2 Noteholder" means a Person in whose name a Class A-2 Note is
registered in the Note Register.
"Class A-2 Noteholders' Interest Basis Carryover" means, if the Class
A-2 Note Rate for any Payment Date is based on the Student Loan Rate, the amount
equal to the excess, if any, of (a) the amount of interest on the Class A-2
Notes that would have accrued in respect of the related Interest Period had
interest been calculated based on the Class A-2 Formula Rate over (b) the amount
of interest on the Class A-2 Notes actually accrued in respect of such Interest
Period based on the Student Loan Rate , together with the unpaid portion of any
such excess from prior Payment Dates (and interest accrued thereon, to the
extent permitted by law, at the applicable Class A-2 Note Rate calculated based
on the Class A-2 Formula Rate).
"Class A-2 Noteholders' Interest Carryover Shortfall" means, with
respect to any Secondary Payment Date, the excess, if any, of (i) the Class A-2
Noteholders' Interest Distribution Amount on the preceding Secondary Payment
Date over (ii) the amount of interest actually distributed to the Class A-2
Noteholders on such preceding Secondary Payment Date, plus interest on the
amount of such excess, to the extent permitted by law, at the interest rate
borne by the Class A-2 Notes from such preceding Secondary Payment Date to the
current Secondary Payment Date.
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"Class A-2 Noteholders' Interest Distribution Amount" means, with
respect to any Secondary Payment Date, the sum of (i) the amount of interest
accrued at the Class A-2 Note Rate for the related Interest Period on the
outstanding Class A-2 Note Principal Amount on the immediately preceding
Secondary Payment Date after giving effect to all principal distributions to
holders of Class A-2 Notes on such date (or, in the case of the first Secondary
Payment Date, outstanding on the Closing Date) and (ii) the Class A-2
Noteholders' Interest Carryover Shortfall for such Secondary Payment Date;
provided, however, that the Class A-2 Noteholders' Interest Distribution Amount
will not include any Class A-2 Noteholders' Interest Basis Carryover.
"Class A-2 Required Distribution" means for the Class A-2 Insurance
Policy and (i) any Secondary Payment Date prior to the Final Scheduled Payment
Date, an amount equal to the Class A-2 Noteholders' Interest Distribution Amount
plus (x) if the Class A-1 Note Principal Amount has been paid in full the
Subordination Deficit, if any, or (y) if an Event of Default has occurred and is
continuing, the Subordination Deficit, if any, multiplied by a fraction the
numerator of which is the outstanding Class A-2 Note Principal Amount and the
denominator of which is the outstanding Class A Note Principal Amount and (ii)
for the Final Scheduled Payment Date (whether as scheduled or if accelerated
after an Event of Default) with respect to the Class A-2 Notes, an amount equal
to the sum of the Class A-2 Noteholders' Interest Distribution Amount plus the
outstanding Class A-2 Note Principal Amount.
"Class A-2 Original Note Principal Amount" has the meaning set forth in
Section 1.02(b) of the Indenture.
"Clearing Agency" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Securities Exchange Act of 1934, as
amended.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Date" means June 14, 1999.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" has the meaning specified in the granting clause of the
Indenture.
"Collection Account" means the segregated trust account established at
a Qualified Institution, in the name of the Indenture Trustee, for the benefit
of the Noteholders, which account has been designated as the Collection Account,
and any other account designated as the Collection Account by the Indenture
Trustee.
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"Collection Period" means, with respect to the Payment Dates occurring
in July 1999, the period beginning on the Closing Date, and ending on June 30,
1999, and, with respect to each succeeding Payment Date, the period beginning on
the first day after the end of the preceding Collection Period and ending on the
last day of the month preceding such Payment Date.
"Collections" means (i) all funds which are received by Issuer, the
Master Servicer or the Indenture Trustee from or on behalf of the related
Obligors in payment of any amounts owed (including, without limitation, all
Subsidy Payments, Student Loan Guaranty Payments, Reimbursement Payments,
finance charges, interest and all other charges) in respect of the Financed
Student Loans, or applied to such amounts owed by such Obligors, net of accrued
Consolidated Rebate Amounts and other amounts required by the Higher Education
Act to be paid to the DOE, with respect to the Financed Student Loans for the
related Collection Period, (ii) all funds received pursuant to the Master
Servicing Agreement, including all payments representing the Purchase Amount of
any purchased Financed Student Loan, and (iii) all funds, including any Purchase
Amounts received for Financed Student Loans repurchased by the Seller, received
by the Issuer, the Indenture Trustee or the Master Servicer pursuant to the
Purchase and Contribution Agreement or from any other source in respect of the
Financed Student Loans.
"Confidential Information" means information provided by the Master
Servicer or the Seller to the Eligible Lender Trustee or the Indenture Trustee
related to the transactions effected under the Transaction Documents and any
computer software provided to the Eligible Lender Trustee or the Indenture
Trustee in connection with the transactions effected under the Transactions
Documents, in each case whether in the form of documents, reports, lists, tapes,
discs or any other form.
"Consolidated Rebate Amount" means with respect to any Collection
Period, the aggregate amount of all rebate fees payable to the DOE in respect of
any Federal Consolidation Loans that are then included in the Collateral.
"Corporate Trust Office" means the principal office of the Indenture
Trustee at which at any particular time its corporate trust business shall be
administered, which on the Closing Date shall be the address indicated beneath
the signature of the Indenture Trustee in the Indenture, or any other address
indicated by the Indenture Trustee in a written notice furnished by the
Indenture Trustee to the Issuer.
"Cutoff Date" means June 11, 1999, with respect to the Initial Financed
Student Loans and as of the date established pursuant to the Purchase and
Contribution Agreement with respect to the Additional Financed Student Loans.
"Defaulted Financed Student Loan" means any Financed Student Loan that
is a Defaulted Student Loan.
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"Defaulted Student Loan" means any Student Loan (i) as to which any
payment, or portion thereof, is more than 180 days past due from the original
due date therefor, unless such Student Loan is in a Deferment Status or
Forbearance Status, (ii) the borrower of which is the subject of an Event of
Bankruptcy or is deceased or disabled or (iii) as to which a continuing
condition that with notice or the lapse of time or both would constitute a
default, breach, violation or event permitting acceleration under the terms of
such Student Loan (other than payment defaults continuing for a period of not
more than 180 days).
"Deferment Status" means a status with respect to any Student Loan
permitted by the Higher Education Act and the policies of the applicable Student
Loan Guarantor during which the related obligor may postpone or reduce the
amount of the obligor's scheduled payment of principal and interest.
"Deficiency Claim Date" means the third Business Day prior to the
applicable Payment Date.
"Definitive Notes" has the meaning specified in Section 1.10 of the
Indenture.
"Delinquent Student Loan" means any student loan as to which the any
portion of a scheduled payment remains outstanding for greater than 30 days.
"Depository" means the nominee of DTC and any successor depository
selected by the Issuer.
"Determination Date" means the fifth Business Day preceding the Primary
Payment Date.
"DOE" means the U.S. Department of Education, and any successor
thereto.
"Dollars" means dollars in lawful money of the United States of
America.
"DTC" means The Depository Trust Company, and any successor thereto.
"EFG" means Educational Finance Group, Inc.
"Eligible Borrower" means, with respect to any Student Loan, an
individual who is eligible under the Higher Education Act to be the Obligor of a
Student Loan for financing a program of education at an Eligible Institution or
for consolidating two or more such Student Loans, including an individual who is
eligible under the Higher Education Act to be an Obligor of a loan made pursuant
to Section 428A, 428B, 428C or 428H of the Higher Education Act (20 U.S.C.
Sections 1078-1, 1078-2, 1078-3, or 1078-8).
"Eligible Deposit Account" means either (i) a segregated account with a
Qualified Institution or (ii) a segregated trust account with a Qualified
Institution.
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"Eligible Financed Student Loan" means a Financed Student Loan that is
an Eligible Student Loan as of the date it became a Financed Student Loan.
"Eligible Institution" means an institution that is (i) an institution
of higher education, (ii) a vocational school or (iii) any other institution
that, in all of the above case, is an "eligible institution" as defined in the
Higher Education Act.
"Eligible Investments" means any one or more of the following
obligations or securities:
direct obligations of or obligations insured or guaranteed by the
United States of America;
obligations issued or guaranteed by any instrumentality or agency of
the United States of America, whether now existing or hereafter organized, which
bear the full faith and credit of the United States of America;
certificates of deposit of not more than $100,000 issued by a financial
institution with its principal place of business in the United States of
America, but only if such certificates of deposit are fully insured as to
principal by the Federal Deposit Insurance Corporation or the Federal Savings
and Loan Insurance Corporation; and
shares in mutual funds investing solely in short term securities of the
United States government where the mutual fund custodian has taken delivery of
the collateralizing securities, provided that (i) such fund shall have the
highest short-term credit rating available from Xxxxx'x and S&P and (ii) such
shares shall be freely redeemable by the holder on a daily basis.
"Eligible Lender Trustee" has the meaning set forth in the preamble to
the Indenture.
"Eligible Lender Trustee Fee" means the fee paid to the Eligible Lender
Trustee pursuant to Section 10 of the Trust Agreement; provided, however, that
under no circumstance shall such fee (exclusive of the acceptance fee) exceed an
annual amount equal to $12,000, payable in twelve equal monthly installments
pursuant to Section 8.03(b) of the Indenture.
"Eligible Student Loan" means a Student Loan:
which was originated in the United States of America, its territories,
its possessions or other areas subject to its jurisdiction to an eligible
borrower under applicable law and agreements and was fully and properly executed
by the parties thereto;
was originated or acquired by EFG (or by the Eligible Lender Trustee on
its behalf) and acquired by the Issuer in the ordinary course of its business;
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provides for payments on a periodic basis that fully amortizes the
Principal Balance of such Student Loan by its maturity, as such maturity may be
modified in accordance with any applicable deferral or forbearance periods
granted in accordance with applicable laws and restrictions or any related
Student Loan Guaranty Agreement, and yield interest at the rates applicable
thereto;
was originated by an "eligible lender" under the Higher Education Act
in the ordinary course of its business and is guaranteed by a Student Loan
Guarantor that is an eligible guarantor under the Higher Education Act,
qualifies the holder thereof to receive Subsidy Payments from the DOE and
Student Loan Guaranty Payments from the related Student Loan Guarantor,
qualifies the related Student Loan Guarantor to receive reinsurance payments
thereon from the DOE, and such Student Loan qualifies for a rate of
reimbursement to the related lender equal to at least 98%;
complied at the time of origination and, except as may otherwise be
agreed to by the Insurer, complies, at the time of its inclusion in the
Collateral, in all material respects with all applicable requirements of local,
state, and federal laws, rules and regulations which govern the making and
servicing of such Student Loan including the requirements of the applicable
Student Loan Guaranty Agreement;
all signatures with respect to which are genuine and the Student Loan
Note evidencing such Student Loan has been duly executed and delivered and
constitutes the legal, valid and binding obligation of the related Obligors
enforceable in accordance with its terms;
with respect to which no right of rescission, setoff, counterclaim, or
defense has been asserted or threatened or exists with respect to such Student
Loan;
no payment with respect to which is more than 120 days delinquent;
except as permitted in this clause (h), no default, breach, violation or event
permitting acceleration under the terms of such Student Loan has occurred, and
except for payment defaults continuing for a period of not more than 120 days,
no continuing condition that with notice or the lapse of time or both that would
constitute a default, breach, violation or event permitting acceleration under
terms of such Student Loan has arisen; and with respect to such Student Loan,
none of the forgoing events has occurred and been waived by any Person;
with respect to which, to the best of the Issuer's knowledge, an Event
of Bankruptcy has not occurred with respect to the related borrower;
that has not been originated in, and is not subject to the laws of, any
jurisdiction under which the origination, sale, transfer and assignment of such
Student Loan or beneficial ownership therein, is unlawful, void or voidable;
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with respect to which there is only one original executed copy of the
Student Loan Note;
with regard to which the warranty of the Issuer in Section 2.01(g) of
the Indenture is true and correct;
the sale or assignment of which to the Issuer pursuant to the Purchase
and Contribution Agreement, if applicable, and the granting of a security
interest to the Indenture Trustee pursuant to the Indenture does not contravene
or conflict with any law or regulation, or require the consent or approval of,
or notice to, any Person;
that is the subject of a valid Subservicing Agreement and as to which a
Sub-servicer Event of Default has not occurred;
the maturity date with respect to such Student Loan does not occur
after the date which is one year prior to the Final Scheduled Payment Date;
if such Student Loan is a subsidized Xxxxxxxx Loan to an Eligible
Borrower attending a non-proprietary institution with a matriculation period
less than four years, if the outstanding Principal Balance thereof is added to
the aggregate outstanding Principal Balance of all subsidized Xxxxxxxx Loans to
Eligible Borrowers attending non-proprietary institutions with a matriculation
period less than four years that are Financed Student Loans, the aggregate
outstanding balance of all subsidized Xxxxxxxx Loans to Eligible Borrowers
attending a non-proprietary institution with a matriculation period less than
four years that are Financed Student Loans shall not exceed 5% of the aggregate
outstanding Principal Balance of all Financed Student Loans;
if such Student Loan is a subsidized Xxxxxxxx Loan to an Eligible
Borrower attending a proprietary institution, if the outstanding Principal
Balance thereof is added to the aggregate outstanding Principal Balance of all
subsidized Xxxxxxxx Loans to Eligible Borrowers attending proprietary
institutions that are Financed Student Loans, the aggregate outstanding balance
of all subsidized Xxxxxxxx Loans to Eligible Borrowers attending proprietary
institutions that are Financed Student Loans shall not exceed 5% of the
aggregate outstanding Principal Balance of all Financed Student Loans;
if such Student Loan is a PLUS Loan to an Eligible Borrower attending a
non-proprietary institution with a matriculation period less than four years, if
the outstanding Principal Balance thereof is added to the aggregate outstanding
Principal Balance of all PLUS Loans to Eligible Borrowers attending
non-proprietary institutions with a matriculation period less than four years
that are Financed Student Loans, the aggregate outstanding balance of all PLUS
Loans to Eligible Borrowers attending a non-proprietary institution with a
matriculation period less than four years that are Financed Student Loans shall
not exceed 1% of the aggregate outstanding Principal Balance of all Financed
Student Loans;
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if such Student Loan is a Federal Consolidation Loan to an Eligible
Borrower attending a non-proprietary institution with a matriculation period
less than four years, if the aggregate outstanding Principal Balance thereof is
added to the outstanding Principal Balance of all Federal Consolidation Loans to
Eligible Borrowers attending non-proprietary institutions with a matriculation
period less than four years that are Financed Student Loans, the aggregate
outstanding balance of all Federal Consolidation Loans to Eligible Borrowers
attending a non-proprietary institution with a matriculation period less than
four years that are Financed Student Loans shall not exceed 1% of the aggregate
outstanding Principal Balance of all Financed Student Loans;
if such Student Loan is a Federal Consolidation Loan to an Eligible
Borrower attending a proprietary institution, if the outstanding Principal
Balance thereof is added to the aggregate outstanding Principal Balance of all
Federal Consolidation Loans to Eligible Borrowers attending proprietary
institutions that are Financed Student Loans, the aggregate outstanding balance
of all Federal Consolidation Loans to Eligible Borrowers attending proprietary
institutions that are Financed Student Loans shall not exceed 2.0% of the
aggregate outstanding Principal Balance of all Financed Student Loans;
if such Student Loan is a Federal Consolidation Loan to an Eligible
Borrower, if the outstanding Principal Balance thereof is added to the aggregate
outstanding Principal Balance of all Federal Consolidation Loans to Eligible
Borrowers that are Financed Student Loans, the aggregate outstanding balance of
all Federal Consolidation Loans to Eligible Borrowers that are Financed Student
Loans shall not exceed 3% of the aggregate outstanding Principal Balance of all
Financed Student Loans;
if such Student Loan is a Student Loan in which the related Eligible
Borrower is in a Deferment Status, if the outstanding Principal Balance thereof
is added to the aggregate outstanding Principal Balance of all Financed Student
Loans the Eligible Borrowers with respect to which are in a Deferment Status,
the aggregate outstanding balance of all Financed Student Loans that the
Eligible Borrowers with respect to which are in a Deferment Status shall not
exceed 5% of the aggregate outstanding Principal Balance of all Financed Student
Loans;
if such Student Loan is a Student Loan in which the related Eligible
Borrower is in an In School Status, if the outstanding Principal Balance thereof
is added to the aggregate outstanding Principal Balance of all Financed Student
Loans the Eligible Borrowers with respect to which are in an In School Status,
the aggregate outstanding balance of all Financed Student Loans that the
Eligible Borrowers with respect to which are in an In School Status shall not
exceed 65% of the aggregate outstanding Principal Balance of all Financed
Student Loans;
if such Student Loan is a Student Loan which is in a Grace Period, if
the outstanding Principal Balance thereof is added to the aggregate outstanding
Principal Balance of all Financed Student Loans that are in a Grace Period, the
aggregate outstanding balance of all
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Financed Student Loans that are in a Grace Period shall not exceed 15% of the
aggregate outstanding Principal Balance of all Financed Student Loans;
if such Student Loan is a Student Loan which is in Forbearance Status,
if the outstanding Principal Balance thereof is added to the aggregate
outstanding Principal Balance of all Financed Student Loans the are in
Forbearance Status, the aggregate outstanding balance of all Financed Student
Loans that are in Forbearance Status shall not exceed 5% of the aggregate
outstanding Principal Balance of all Financed Student Loans; and
if such Student Loan is an Unsubsidized Loan in which the related
Eligible Borrower is in an In School Status, if the outstanding Principal
Balance thereof is added to the aggregate outstanding Principal Balance of all
Unsubsidized Loans in which the related Eligible Borrower is in an In School
Status, the aggregate outstanding balance of all Unsubsidized Loans to Eligible
Borrowers in which the related Eligible Borrower is in an In School Status, that
are Financed Student Loans shall not exceed 30% of the aggregate outstanding
Principal Balance of all Financed Student Loans.
"ERISA" means the U.S. Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Event of Bankruptcy" shall be deemed to have occurred with respect to
a Person if either:
(a) a case or other proceeding shall be commenced, without the
application or consent of such Person, in any court, seeking the
liquidation, reorganization, debt arrangement, dissolution, winding up,
or composition or readjustment of debts of such Person, the appointment
of a trustee, receiver, custodian, liquidator, assignee, sequestrator
or the like for such Person or all or substantially all of its assets,
or any similar action with respect to such Person under any law
relating to bankruptcy, insolvency, reorganization, winding up or
composition or adjustment of debts, and such case or proceeding shall
continue undismissed, or unstayed and in effect, for a period of 60
consecutive days; or an order for relief in respect of such Person
shall be entered in an involuntary case under the federal bankruptcy
laws or other similar laws now or hereafter in effect; or
such Person shall commence a voluntary case or other proceeding under
any applicable bankruptcy, insolvency, reorganization, debt arrangement,
dissolution or other similar law now or hereafter in effect, or shall consent to
the appointment of or taking possession by a receiver, liquidator, assignee,
trustee, custodian, sequestrator (or other similar official) for, such Person or
for any substantial part of its property, or shall make any general assignment
for the benefit of creditors, or shall fail to, or admit in writing its
inability to, pay its debts generally as they become due, or, if a corporation
or similar entity, its board of directors shall vote to implement any of the
foregoing.
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"Event of Default" has the meaning set forth in Section 5.01 of the
Indenture.
"Executive Officer" means, with respect to any corporation, the Chief
Executive Officer, Chief Operating Officer, Chief Financial Officer, President,
Executive Vice President, any Vice President, the Secretary or the Treasurer of
such corporation.
"Expected Interest Collections" means, with respect to any Collection
Period, the sum of (i) the amount of interest accrued, net of accrued
Consolidated Rebate Amounts and other amounts required by the Higher Education
Act to be paid to the DOE, with respect to the Financed Student Loans for the
related Collection Period (whether or not such interest is actually paid), (ii)
all Subsidy Payments estimated to have accrued for such Collection Period
whether or not actually received and (iii) Investment Earnings on amounts in the
Collection Account, the Pre-Funding Account and the Class A-2 Distribution
Account (in the case of the Class A-2 Distribution Account, to the extent not
used to make payment on such Notes) since the preceding Primary Payment Date.
"Federal Consolidation Loan" means a loan made to an Eligible Borrower
pursuant to which the Eligible Borrower consolidates two or more of its PLUS
Loans, SLS Loans or Xxxxxxxx Loans in accordance with the Higher Education Act.
"Federal Guarantor" means each guarantor with whom the Eligible Lender
Trustee has entered into a separate Guaranty Agreement.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System, or any successor thereto or to the functions thereof.
"Federal Student Loan Program" means the Federal Family Education Loan
Program authorized under the Higher Education Act.
"Final Scheduled Payment Date" means the Primary Payment Date, in the
case of the Class A-1 Notes and the Secondary Payment Date, in the case of the
Class A-2 Notes, occurring in November 2022, on which dates the principal of and
interest on the Class A-1 Notes and Class A-2 Notes, respectively, shall have
been paid in full.
"Financed Student Loan" means each Student Loan identified from time to
time on the Student Loan Schedule and, without duplication but by way of
inclusion and emphasis, all Additional Financed Student Loans funded or
substituted, or purported to be funded or substituted, with amounts on deposit
in the Pre-Funding Account or pursuant to Section 2.02 of the Indenture,
respectively and all Student Loans, whether or not funded or substituted as
described above, that are subject to the Lien of the Indenture.
"Fitch IBCA" means Fitch IBCA, Inc.
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"Forbearance Status" means the temporary period of time where the
Obligor's required interest and principal payments are postponed or reduced due
to financial hardship in accordance with the Higher Education Act and the
policies of the applicable Student Loan Guarantor.
"Funding Period" means the period from the Closing Date until the first
to occur of (i) the Primary Payment Date on which the amount on deposit in the
Pre-Funding Account is less than $100,000, (ii) an Event of Default occurring
under the Indenture, (iii) the date on which a Bankruptcy Event occurs with
respect to EFG or (iv) the last day of September 1999.
"General Partner" means EFG-II SPC-I, Inc., a Delaware corporation, in
its capacity as the general partner of the Issuer under the Issuer's limited
partnership agreement.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any body or entity exercising executive,
legislative, judicial, regulatory or administrative functions or pertaining to
government, including without limitation any court, and any Person owned or
controlled, through stock or capital ownership or otherwise, by any of the
foregoing.
"Grace Period" means the period of time from when the student borrower
leaves school or drops below half-time status and when the student borrower's
repayment period begins.
"Grant" means mortgage, pledge, bargain, sell, warrant, alienate,
remise, release, convey, assign, transfer, create, and xxxxx x xxxx upon and a
security interest in and right of set-off against, deposit, set over and confirm
pursuant to the Indenture. A Grant of the Collateral or of any other agreement
or instrument shall include all rights, powers and options (but none of the
obligations) of the Granting party thereunder, including the immediate and
continuing right to claim for, collect, receive and give receipt for principal
and interest payments in respect of the Collateral and all other moneys payable
thereunder, to give and receive notices and other communications, to make
waivers or other agreements, to exercise all rights and options, to bring
Proceedings in the name of the Granting party or otherwise and generally to do
and receive anything that the Granting party is or may be entitled to do or
receive thereunder or with respect thereto.
"Guaranty Agreement" means each guaranty agreement pursuant to which
each Financed Student Loan to be sold to the Eligible Lender Trustee on behalf
of the Issuer will be guaranteed as to principal and interest by a Federal
Guarantor.
"Higher Education Act" means the Higher Education Act of 1965, as
amended, together with any rules, regulations and interpretations thereunder of
DOE or the applicable guaranty agent.
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"Indemnification Agreement" means the Indemnification Agreement dated
as of the Closing Date among the Insurer, EFG, the General Partner and Xxxxxx
Brothers Inc.
"Indenture" means the Indenture dated as of June 14, 1999, as amended,
between the Issuer and First Chicago, as Indenture Trustee.
"Indenture Trust Estate" means all money, instruments, rights and other
property that are subject or intended to be subject to the lien and security
interest of the Indenture for the benefit of the Noteholders and the Insurer
(including all property and interests Granted to the Indenture Trustee),
including all proceeds thereof.
"Indenture Trustee" has the meaning set forth in the preamble to the
Indenture.
"Indenture Trustee's Fees" means an amount equal to $10,000 per annum,
payable in twelve equal monthly installments pursuant to Section 8.03(b) of the
Indenture.
"Indenture Trustee's Office" means The First National Bank of Chicago,
Xxx Xxxxx Xxxxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000-0000, Attention:
Corporate Trust Services Division.
"Independent" means, when used with respect to any specified Person,
that the Person (a) is in fact independent of the Issuer, any other obligor upon
the Notes, EFG and any Affiliate of any of the foregoing Persons, (b) does not
have any interest in the Issuer, any such other obligor, EFG or any Affiliate of
any of the foregoing Persons and (c) is not connected with the Issuer, any such
other obligor, EFG or any Affiliate of any of the foregoing Persons as an
officer, employee, promoter, underwriter, trustee, partner, director or person
performing similar functions.
"In School Status" means with respect to any Student Loan the period
during which (i) the student borrower is attending school at least half-time and
maintaining satisfactory academic progress and (ii) the student borrower is
eligible for additional student loans and in-school deferment of payment of
interest and principal.
"Initial Financed Student Loans" means the Financed Student Loans sold
and/or contributed to the Issuer on or prior to the Closing Date pursuant to the
Purchase and Contribution Agreement.
"Initial Pool Balance" means the Pool Balance (including the Pre-Funded
Amount) as of the Closing Date.
"Insolvency Event" means, with respect to a specified Person, (a) the
filing of a decree or order for relief by a court having jurisdiction in the
premises in respect of such Person or any substantial part of its property in an
involuntary case under any applicable Federal or state bankruptcy, insolvency or
other similar law now or hereafter in effect, or appointing a
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receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official for such Person or for any substantial part of its property, or
ordering the winding-up or liquidation of such Person's affairs, and such decree
or order shall remain unstayed and in effect for a period of sixty consecutive
days; or (b) the commencement by such Person of a voluntary case under any
applicable Federal or state bankruptcy, insolvency or other similar law now or
hereafter in effect, or the consent by such Person to the entry of an order for
relief in an involuntary case under any such law, or the consent by such Person
to the appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official for such Person or for any
substantial part of its property, or the making by such Person of any general
assignment for the benefit of creditors, or the failure by such Person generally
to pay its debts as such debts become due, or the taking of action by such
Person in furtherance of any of the foregoing.
"Insurance Agreement" means the Insurance Agreement, dated as of the
Closing Date, among EFG, the Issuer, the Insurer, the Master Servicer, EFG, the
General Partner, the Indenture Trustee and the Eligible Lender Trustee.
"Insurance Policy" means the Class A-1 Insurance Policy and the Class
A-2 Insurance Policy.
"Insured Payment" means (a) with respect to the Class A-1 Insurance
Policy (i) as of any Primary Payment Date, any Class A-1 Deficiency Amount and
(ii) any Preference Amount with respect to the Class A-1 Notes and (b) with
respect to the Class A-2 Insurance Policy (i) as of any Secondary Payment Date,
any Class A-2 Deficiency Amount and (ii) any Preference Amount with respect to
the Class A-2 Notes.
"Insurer" means MBIA Insurance Corporation, a stock insurance company
organized and created under the laws of the State of New York and any successors
thereto.
"Insurer Default" means (i) the occurrence of an Event of Bankruptcy
with respect to the Insurer or (ii) the occurrence of a failure by the Insurer
to make an Insured Payment in accordance with the Insurance Policy.
"Insurer Reimbursement Amount" means, as of any Primary Payment Date,
the sum of (i) all amounts previously paid by the Insurer under the Insurance
Policy which have not previously been reimbursed and (ii) all other amounts due
to the Insurer under the Insurance Agreement and Indemnification Agreement,
other than the Policy Premium.
"Interest Collections" means, with respect to any Collection Period,
that portion of any Collections received during such Collection Period
attributable to interest accrued on the Financed Student Loans, including, but
not limited to all Subsidy Payments and that portion of any Purchase Amounts,
Reimbursement Payments and Student Loan Guaranty Payments attributable to
interest accrued on the Financed Student Loans, plus all Investment Earnings.
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"Interest Period" means (i) with respect to the Class A-1 Notes and any
Primary Payment Date, the period commencing on and including the preceding
Primary Payment Date (or in the case of the first Primary Payment Date
commencing on the Closing Date) and ending on and not including such Primary
Payment Date and (ii) with respect to the Class A-2 Notes and any Secondary
Payment Date, the period commencing on and including the preceding Secondary
Payment Date (or in the case of the first Secondary Payment Date commencing on
the Closing Date) and ending on and not including such Secondary Payment Date.
"Investment Company Act" means the Investment Company Act of 1940, as
amended.
"Investment Earnings" means, with respect to each Primary Payment Date,
all investment earnings (net of losses and investment expenses) on amounts on
deposit in the Trust Accounts realized since the preceding Primary Payment Date
(and in the case of the Class A-2 Distribution Account not distributed on the
preceding Secondary Payment Date).
"Issuer" has the meaning set forth in the preamble to the Indenture.
"Issuer Order" and "Issuer Request" means a written order or request
signed in the name of the Issuer by any one of its Authorized Officers and
delivered to the Indenture Trustee.
"Lien" means any interest in property securing an obligation owed to,
or a claim by, a Person other than the owner of the property, whether such
interest is based on the common law, statute or contract, and including but not
limited to the security interest lien arising from a mortgage, encumbrance,
pledge, conditional sale or trust receipt for a lease, consignment or bailment
for security purposes. The term "Lien" shall include reservations, exceptions,
encroachments, easements, rights-of-way, covenants, conditions, restrictions,
leases and other title exceptions and encumbrances affecting property.
"Majority Interest" means with respect to the rights of the Noteholders
arising under the Indenture and in connection with any other Transaction
Document, the holders of Notes evidencing more than 50% of the balance of the
Notes by outstanding principal amount.
"Master Servicer" means EFG Technologies, Inc. and any successors
thereto.
"Master Servicing Agreement" means the Master Servicing Agreement,
dated as of June 14, 1999, among the Issuer, the Master Servicer and the
Eligible Lender Trustee.
"Material Adverse Effect" with respect to any event or circumstance and
any Person, means a material adverse effect on:
(i) the business, assets, financial condition or operations of such
Person;
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with respect to the Issuer or General Partner, the ability of such
Person to perform its respective obligations under the Indenture or any other
Transaction Document;
with respect to the Issuer, the validity, enforceability or
collectibility of the Indenture, any other Transaction Document, a material
amount of the Financed Student Loans or a material amount of the Student Loan
Notes, or the Master Servicing Agreement or the Student Loan Guaranty
Agreements; or
with respect to the Issuer, the status, existence, perfection, priority
or enforceability of the Indenture Trustee's security interest in the
Collateral.
"Monthly Report" means a report, in substantially the form of Exhibit
3.06(d) to the Indenture, furnished by the Issuer to the Eligible Lender
Trustee, the Indenture Trustee and the Insurer.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Net Principal Collections" means, as of any date, the Principal
Collections (calculated for the Collection Period ending in the preceding
calendar month) minus the Capitalized Interest Amount for such Collection
Period.
"Note" means a Class A-1 Note or Class A-2 Note, and "Notes" means the
Class A-1 Notes and Class A-2 Notes.
"Note Depository Agreement" means the agreement dated as of June 14,
1999, among the Issuer, the Indenture Trustee and The Depository Trust Company.
"Note Owner" means, with respect to a Book-Entry Note, the Person who
is the owner of such Book-Entry Note, as reflected on the books of the Clearing
Agency, or on the books of a Person maintaining an account with such Clearing
Agency (directly as a Clearing Agency Participant or as an indirect participant,
in each case in accordance with the rules of such Clearing Agency).
"Note Principal Amount" means the Class A-1 Note Principal Amount
and/or the Class A-2 Note Principal Amount, as applicable.
"Note Purchase Agreement" means the purchase agreement, dated as of
June 11, 1999, among Xxxxxx Brothers, Inc., the Issuer and EFG relating to the
Notes.
"Note Register" has the meaning set forth in Section 1.03(a) of the
Indenture.
"Note Registrar" has the meaning set forth in Section 1.03(a) of the
Indenture.
"Note Rate" means the Class A-1 Note Rate or the Class A-2 Note Rate,
as applicable.
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"Noteholder" means a Person in whose name a Class A-1 Note or Class A-2
Note is registered in the Note Register.
"Noteholders' Distribution Amount" means, with respect to any Primary
Payment Date, the sum of the Noteholders' Interest Distribution Amount and the
Noteholders' Principal Distribution Amount for such Primary Payment Date.
"Noteholders' Interest Basis Carryover" means, with respect to any
Primary Payment Date, the sum of the Class A-1 Noteholders' Interest Basis
Carryover and the Class A-2 Noteholders' Interest Basis Carryover.
"Noteholders' Interest Distribution Amount" means, with respect to any
Primary Payment Date, the sum of the Class A-1 Noteholders' Interest
Distribution Amount for such Primary Payment Date and the Class A-2 Noteholders'
Interest Distribution Amount for the related Secondary Payment Date.
"Noteholders' Principal Carryover Shortfall" means, as of the close of
business on any Primary Payment Date, the excess of (i) the Noteholders'
Principal Distribution Amount on such Primary Payment Date over (ii) the amount
of principal actually distributed to the Class A-1 Noteholders and deposited in
respect of principal into the Class A-2 Distribution Account on such Primary
Payment Date.
"Noteholders' Principal Distribution Amount" means, with respect to any
Primary Payment Date, the sum of (a) the Principal Distribution Amount for such
Primary Payment Date and (b) the Noteholders' Principal Carryover Shortfall as
of the close of the preceding Primary Payment Date; provided, however, that in
each case such amount will be rounded down to the nearest multiple of $10,000;
provided, further, that the Noteholders' Principal Distribution Amount will in
no event exceed the outstanding Class A Note Principal Amount; and provided,
further, that on the Final Scheduled Payment Date the Noteholders' Principal
Distribution Amount will equal the amount, if any, that is necessary in order to
reduce the Class A Note Principal Balance to zero on such date.
"Obligor" means a Person obligated to make payments with respect to a
Student Loan, including the students, the Student Loan Guarantors and the DOE.
"Officer's Certificate" means (i) in the case of the Issuer, a
certificate signed by an Authorized Officer of the Issuer, under the
circumstances described in, and otherwise complying with, the applicable
requirements of Section 10.13 of the Indenture, and delivered to the Indenture
Trustee and (ii) in the case of the Seller and the Master Servicer, a
certificate signed by an Authorized Officer of the Seller and the Master
Servicer, respectively.
"Opinion of Counsel" means a written opinion of counsel acceptable to
the Indenture Trustee and the Insurer, who may be in-house counsel for the
Master Servicer or EFG (except
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that any opinion pursuant to Section 3.04(b) of the Indenture or any opinion
pursuant to any other Transaction Document or relating to taxation must be an
opinion of independent outside counsel) and who, in the case of opinions
delivered to the Insurer and the Rating Agencies, is reasonably acceptable to
it.
"Original Note Principal Amount" means the Class A-1 Original Note
Principal Amount or the Class A-2 Original Note Principal Amount, as applicable.
"Outstanding" means, as of any date of determination and with respect
to the Notes, all Notes theretofore authenticated and delivered under the
Indenture except: (i) Notes theretofore cancelled or delivered for cancellation,
as specified in the Indenture; (ii) Notes or portions thereof for which payment
or redemption money in the necessary amount has been theretofore deposited as
specified in the Indenture; (iii) Notes in exchange for or in lieu of which
other Notes have been authenticated and delivered pursuant to the Indenture
unless proof is presented to the Indenture Trustee that any such Notes are held
by a holder in due course; and (v) Notes alleged to have been destroyed, lost or
stolen and for which replacement Notes have been issued as provided for in the
Indenture.
"Owner" means each Noteholder who, on the applicable Payment Date, is
entitled under the terms of the applicable Notes to payment thereunder.
"Parity Date" means the first Primary Payment Date on which the Class A
Note Principal Amount as of such Primary Payment Date, after giving effect to
all distributions on the Class A-1 Notes and deposits to the Class A-2
Distribution Account on such date, is less than or no more than $9,999 in excess
of, the Pool Balance as of the last day of the related Collection Period.
"Paying Agent" means the Indenture Trustee or any other Person that
meets the eligibility standards for the Indenture Trustee specified in Section
6.13 of the Indenture and is authorized by the Issuer to make the payments to
and distributions from the Collection Account and payments of principal of and
interest and any other amounts owing on the Notes on behalf of the Issuer.
"Payment Date" means a Primary Payment Date or a Secondary Payment
Date.
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, limited liability company, trust,
unincorporated association, joint venture, government or any agency or political
subdivision thereof or any other entity.
"Policy Premium" means the premium described in each Insurance Policy.
"Pool Balance" at any time means the aggregate outstanding Principal
Balance of the Financed Student Loans at the end of the preceding Collection
Period (including accrued
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interest thereon through the end of such Collection Period to the extent such
interest will be capitalized upon commencement of repayment), after giving
effect to the following, without duplication: (i) all payments received by the
Issuer and/or the Indenture Trustee during such Collection Period from or on
behalf of the Obligors, the Federal Guarantors and the DOE, (ii) all Purchase
Amounts received by the Issuer and/or the Indenture Trustee for such Collection
Period from the Seller, the Issuer or the Master Servicer in respect of any
Financed Student Loans that have been repurchased by the Seller or reassigned to
the Issuer due to a breach of a representation or warranty made by the Seller or
Issuer as to the Financed Student Loans in the Indenture or the Purchase and
Contribution Agreement, respectively, or that have been purchased by the Master
Servicer due to a breach of certain servicing covenants by the Master Servicer,
and (iii) all Realized Losses on Financed Student Loans liquidated during such
Collection Period; provided, that, during the Funding Period, the Pool Balance
will also include an amount equal to the difference between the amount deposited
into the Pre-Funding Account on the Closing Date and the amount of Additional
Fundings since the Closing Date.
"PLUS Loan" means a Parent Loan for Undergraduate Students, made in
accordance with the Higher Education Act.
"Preferred Amount" means any amount previously distributed to an Owner
with respect to the Notes that is recoverable and sought to be recovered as a
voidable preference by a trustee in bankruptcy pursuant to the United States
Bankruptcy Code (11 U.S.C.), as amended from time to time, in accordance with a
final non-applicable order of a court having competent jurisdiction.
"Pre-Funded Amount" means, with respect to any Primary Payment Date or
other specified date of determination, the amount on deposit in the Pre-Funding
Account.
"Pre-Funding Account" means the account designated as such, established
and maintained pursuant to Sections 8.01 and 8.05 of the Indenture.
"Predecessor Note" means, with respect to any particular Note, every
previous Note evidencing all or a portion of the same debt as that evidenced by
such particular Note; and, for the purpose of this definition, any Note
authenticated and delivered under Section 1.04 of the Indenture and in lieu of a
mutilated, lost, destroyed or stolen Note shall be deemed to evidence the same
debt as the mutilated, lost, destroyed or stolen Note.
"Premium Percentage" means, at any time, the percentage equivalent of a
fraction, the numerator of which is the outstanding Class A Note Principal
Amount, and the denominator of which is equal to the Pool Balance.
"Primary Payment Date" means for any Collection Period the first
Business Day after each Auction Date relating to the Class A-1 Notes.
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"Prime Rate" means the interest rate that banks charge to their most
creditworthy customers.
"Principal Balance" with respect to any Student Loan means the original
principal amount of such Student Loan, plus capitalized interest thereon, if
any, less payments of principal by or on behalf of the Obligor of such Student
Loan.
"Principal Collections" means all Collections other than Interest
Collections.
"Principal Distribution Amount" means, with respect to any Primary
Payment Date, the lesser of (i) the Available Funds remaining for the related
Primary Payment Date after the payment and allocations required pursuant to
clauses first through fourth of Section 8.03(b) of the Indenture and (ii) the
excess of the outstanding Class A Note Principal Amount immediately prior to
such Primary Payment Date over the Pool Balance as of the end of the preceding
Collection Period.
"Principal Holdover Amount" means, with respect to any Primary Payment
Date, the amount by which the Noteholders' Principal Distribution Amount is
rounded down pursuant to the first proviso of the definition thereof.
"Proceeding" means any suit in equity, action at law or other judicial
or administrative proceeding.
"Purchase Amount" means, with respect to the purchase of any Initial
Financed Student Loans and with respect to any reassignment of any Financed
Student Loan pursuant to Section 2.02 of the Indenture, Section 4.2 of the
Purchase and Contribution Agreement or Section 3.05 of the Master Servicing
Agreement, an amount equal to the sum of (i) the Principal Balance of such
Financed Student Loans multiplied prior to the Parity Date by the Premium
Percentage and (ii) all accrued and unpaid interest thereon.
"Purchase and Contribution Agreement" means the Purchase and
Contribution Agreement, dated as of June 14, 1999, among EFG, the Eligible
Lender Trustee and the Issuer, as the same may be amended, supplemented, or
otherwise modified from time to time.
"Qualified Institution" means a depository institution organized under
the laws of the United States of America on any one of the States thereof or the
District of Columbia (or any domestic branch of a foreign bank), (i) which has
either (A) a long-term unsecured debt rating acceptable to the Insurer, Xxxxx'x
and S&P or (B) a short-term unsecured debt rating or certificate of deposit
rating acceptable to the Insurer, Xxxxx'x and S&P and (ii) whose deposits are
insured by the Federal Deposit Insurance Corporation.
"Ratings Agencies" means Xxxxx'x, S&P and Fitch IBCA.
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"Rating Agency Condition" means, with respect to any action, that each
Rating Agency shall have been given ten days' prior notice thereof and that each
of the Rating Agencies shall have notified the Issuer and the Indenture Trustee
(with a copy to the Insurer) in writing that such action will not result in and
of itself in a reduction or withdrawal of the then current rating of the Notes
without regard to the Insurance Policy.
"Realized Losses" means, with respect to a Collection Period and for
Student Loans that became Defaulted Student Loans during such Collection Period,
the excess of the Principal Balance of each such Defaulted Student Loan plus
accrued but unpaid interest thereon over any net recoveries or other Collections
thereon during such Collection Period.
"Reassignment" has the meaning assigned thereto in Section 2.02 of the
Indenture.
"Record Date" means (i) with respect to the Book Entry Notes, the
Transfer Date immediately preceding each Primary Payment Date and (ii) with
respect to the Definitive Notes, the last day of the calendar month immediately
preceding each Primary Payment Date.
"Redemption Date" means in the case of a payment to Noteholders
pursuant to Section 9.01 of the Indenture, the Primary Payment Date specified by
the Issuer pursuant to Section 9.01 of the Indenture.
"Redemption Price" means in the case of a payment made to Noteholders
pursuant to Section 9.01 of the Indenture, the amount to be so paid pursuant to
such Section 9.01.
"Reimbursement Contract" means the agreements between the Student Loan
Guarantors and the DOE providing for the payment by the Secretary of amounts
authorized to be paid pursuant to the Higher Education Act, including, without
limitation, reimbursement of amounts paid or payable upon Defaulted Student
Loans and Subsidy Payments to holders of Student Loans.
"Reimbursement Payment" means any payment by the Secretary pursuant to
a Reimbursement Contract in respect of a Student Loan.
"Related Security" means, with respect to any Financed Student Loan:
(a) all of the right, title and interest of the Issuer and the Eligible Lender
Trustee in and to the Student Loan Note(s) and all other agreements that relate
to such Financed Student Loan; (b) any security interests or liens and property
subject thereto from time to time purporting to secure payment of such Financed
Student Loan, whether pursuant to the Student Loan Note related to such Financed
Student Loan or otherwise and (c) all other guarantees and other agreements or
arrangements of whatever character from time to time supporting or securing
payment of such Financed Student Loan.
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"Reserve Account" means the account established at Qualified
Institution, in the name of the Indenture Trustee, for the benefit of the
Noteholders, which account has been designated as the Reserve Account, and any
other account designated as the Reserve Account by the Indenture Trustee.
"Reserve Account Excess" means, as of each Primary Payment Date, the
amount, if any, by which the amount on deposit in the Reserve Account (after
giving effect to all deposits thereto pursuant to Section 8.03(b) and all
withdrawals therefrom pursuant to Section 8.04(d) of the Indenture) is greater
than the Specified Reserve Account Balance for such Primary Payment Date.
"Reserve Account Initial Deposit" means $10,701,901.
"Responsible Officer" means with respect to the Indenture Trustee, any
officer within the Corporate Trust Office of the Indenture Trustee, including
any vice president, assistant vice president, assistant treasurer, assistant
secretary, or any other similar officer of the Indenture Trustee customarily
performing functions similar to those performed by any of the above designated
officers, with direct responsibility for the administration of the Indenture and
the other Transaction Documents on behalf of the Indenture Trustee and also,
with respect to a particular matter, any other officer to whom such matter is
referred because of such officer's knowledge of an familiarity with the subject.
"Rule 144A" has the meaning set forth in Section 1.06(a) of the
Indenture.
"Secondary Payment Date" means for any Collection Period the first
Business Day after each Auction Date relating to the Class A-2 Notes.
"Secretary" means the Secretary of the DOE or an official or employee
of the DOE acting for the Secretary under a delegation of authority.
"Securities Act" means the Securities Act of 1933, as amended.
"Seller" means Educational Finance Group, Inc., a Delaware corporation,
and any successors thereto.
"Servicer Default" has the meaning assigned thereto in Section 6.01 of
the Master Servicing Agreement.
"Servicing Fee Amount" means an amount equal to the product of (i)
one-twelfth of 0.75% and (ii) the Pool Balance as of the close of business on
the last day of the second preceding calendar month.
"SLS Loan" means a loan that is made under the Supplemental Loans for
Students Program in accordance with the Higher Education Act.
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"Specified Reserve Account Balance" means with respect to any Primary
Payment Date, an amount equal to the greater of (i) 3.35% of the aggregate
principal balance of the Notes after taking into account the effect of
distributions and deposits to the Class A-2 Distribution Account on such Primary
Payment Date and (ii) $798,650.
"S&P" means Standard & Poor's, a division of The McGraw Hill Companies,
Inc.
"Xxxxxxxx Loan" means a loan made to an Eligible Borrower designated as
such that is made under the Xxxxxx X. Xxxxxxxx Student Loan Program in
accordance with the Higher Education Act, including subsidized loans and
Unsubsidized Loans.
"Student Loan" means a student loan originated in compliance with the
Federal Student Loan Program and which is guaranteed as to principal and
interest by a Student Loan Guarantor pursuant to a Student Loan Guaranty
Agreement.
"Student Loan Files" means the documents relating to the Financed
Student Loans specified in Section 2.01 of the Master Servicing Agreement.
"Student Loan Guaranty Agreement" means any of, and "Student Loan
Guaranty Agreements" means all of, the agreements pursuant to which the Student
Loan Guarantors guarantee Financed Student Loans, in each case as the same may
be amended, supplemented or otherwise modified from time to time.
"Student Loan Guaranty Payment" means any payment by a Student Loan
Guarantor pursuant to a Student Loan Guaranty Agreement in respect of a Financed
Student Loan.
"Student Loan Guarantors" means any guaranty agency under the Higher
Education Act providing guarantees with respect to Financed Student Loans
approved by the Insurer.
"Student Loan Notes" means the promissory notes or other writings
evidencing the Student Loans.
"Student Loan Rate" means, with respect to any Collection Period, the
interest rate equal to the product of (a) the quotient obtained by dividing (i)
360 by (ii) the actual number of days elapsed in such Collection Period and (b)
the percentage equivalent of a fraction, the numerator of which is equal to the
sum of the Expected Interest Collection for such Collection Period, less the sum
of the Policy Premium, the Servicing Fee Amount, the Trustee's Fees and
Expenses, the Auction Agent Fee, the Broker-Dealer Fee, the Eligible Lender
Trustee's Fees, with respect to such Collection Period and (ii) the denominator
of which is the aggregate principal amount of the Notes as of the last day of
such Collection Period (provided, that, during the Funding Period such
denominator shall equal the aggregate principal amount of the Notes less the
Pre-Funded Amount as of the last day of such Collection Period).
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"Student Loan Schedule" means Appendix C to the Indenture constituting
a listing of Student Loans legally or beneficially owned by the Issuer
(including all Student Loans subject to the Lien of the Indenture) delivered to
and held by the Indenture Trustee pursuant to the Indenture (which Schedule may
be in the form of microfiche or computer file or other medium acceptable to the
Indenture Trustee), as from time to time amended, supplemented, or modified.
"Subordination Deficit" means, with respect to a Primary Payment Date
occurring after the Parity Date, and the Secondary Payment Date immediately
subsequent to such Primary Payment Date, the amount, if any, by which (x) the
Class A Note Principal Amount as of such Primary Payment Date, and following the
making of all payments to be made on such Primary Payment Date and the
immediately subsequent Secondary Payment Date (except for any payment to be made
as to principal from proceeds of the Insurance Policy), exceeds (y) the Pool
Balance as of the last day of the preceding Collection Period.
"Subsequent Cutoff Date" means the date during the Funding Period as of
which any New Loan is transferred to the Issuer pursuant to the Purchase and
Contribution Agreement and the date on and after which all distributions on such
loan are property of the Issuer.
"Sub-servicer" means any of, and "Sub-servicers" means all of, the
sub-servicer(s) which have been approved by the Insurer servicing the Financed
Student Loans, identified as such on the Student Loan Schedule, which is
Appendix C to the Indenture and on Schedule C of the Master Servicing Agreement.
"Sub-servicer Event of Default" means for any Subservicing Agreement,
an event as defined therein pursuant to which the Sub-servicer's right to
service Financed Student Loans thereunder is subject to termination or removal.
"Sub-servicing Agreement" means any of, and "Sub-servicing Agreements"
means all of, the agreements entered into between the Master Servicer and any
Sub-servicer which has been approved by the Insurer pursuant to which such
Sub-servicer agrees to service Financed Student Loans, in each case, as the same
may be amended, supplemented or otherwise modified from time to time, with the
Insurer's consent.
"Subsidiary" means a corporation of which the relevant Person and/or
its other Subsidiaries own, directly or indirectly, such number of outstanding
shares as have more than 50% of the ordinary voting power for the election of
directors.
"Subsidy Payment" means interest subsidy payments, special allowance
payments and other payments of a similar nature made to the Issuer pursuant to
the terms of the Higher Education Act.
"Substitution" has the meaning assigned thereto in Section 2.02 of the
Indenture.
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"Substitution Amount" means with respect to the Substitution of any
Financed Student Loan pursuant to Section 2.02 of the Indenture, Section 4.2 of
the Purchase and Contribution Agreement or Section 3.05 of the Master Servicing
Agreement, an amount equal to the sum of the Principal Balance of such Financed
Student Loans and all accrued and unpaid interest thereon.
"Transaction Documents" means the Indenture, the Notes, the Master
Servicing Agreement, the Sub-servicing Agreements, the Student Loan Guaranty
Agreements, the Purchase and Contribution Agreement, the Lender Services
Agreement, the Trust Agreement, the Insurance Agreement, the Indemnification
Agreement, the Insurance Policy and the Reimbursement Contract and the other
documents to be executed and delivered in connection herewith.
"Transfer Date" means the date designated for the purchase of
Additional Financed Student Loans pursuant to the Purchase and Contribution
Agreement.
"Trust Accounts" means the Collection Account, the Class A-2
Distribution Account, the Pre-Funding Account, the Reserve Account and the
Capitalized Interest Account.
"Trust Agreement" means the Trust Agreement dated December 7, 1998,
between EFG-I, LP, and The First National Bank of Chicago, as trustee, as
amended by the amendment dated June 1, 1999 among the Issuer, EFG-I, LP, the
Indenture Trustee and the Eligible Lender Trustee.
"Trustees Fees" means the sum of the Eligible Lender Trustee's Fee and
the Indenture Trustee's Fee.
"UCC" means the Uniform Commercial Code as from time to time in effect
in the applicable jurisdiction or jurisdictions.
"Unmatured Event of Default" means any event which, with the giving of
notice or lapse of time, or both, would become an Event of Default.
"Unsubsidized Loan" means Xxxxxxxx Loans that are not subsidized by the
DOE as set forth in Section 428H of the Higher Education Act (20 U.S.C.
Section 1078-8).
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Other Terms. All accounting terms not specifically defined herein shall
be construed in accordance with generally accepted accounting principles. All
terms used in Article 9 of the UCC in the State of New York, and not
specifically defined herein, are used herein as defined in such Article 9.
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Xxxxxxxxxxx of Time Periods. Unless otherwise stated in the Indenture,
in the computation of a period of time from a specified date to a later
specified date, the word "from" means "from and including" and the words "to"
and "until" each means "to but excluding".
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