EXHIBIT 4.1
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INDENTURE OF TRUST
by and between
SLC STUDENT LOAN TRUST-I
and
BANKERS TRUST COMPANY
as Indenture Trustee
Dated as of _____, 200_
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SLC STUDENT LOAN TRUST-I
Reconciliation and tie between Trust Indenture Act of 1939 and
Indenture of Trust dated as of _____, 200_.
TRUST INDENTURE ACT SECTION INDENTURE SECTION
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Section 310(a)(1) 7.23
(a)(2) 7.23
(b) 7.23, 7.09
Section 312(b) 9.14
(c) 9.14
Section 313(c) 4.16, 8.04
Section 314(a) 4.16
(a)(4) 4.17
Section 315(b) 8.04
Section 317(a)(1) 4.18
(a)(2) 7.24
Section 318(a) 9.07
(c) 9.07
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NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
Attention should also be directed to Section 318(c) of the 1939 Act, which
provides that the provisions of Sections 310 to and including 317 of the 1939
Act are a part of and govern every qualified indenture, whether or not
physically contained therein.
TABLE OF CONTENTS
(This Table of Contents is for convenience of reference only and is
not intended to define, limit or describe the purpose or intent of any
provisions of this Indenture of Trust.)
Page
ARTICLE I
DEFINITIONS AND USE OF PHRASES
ARTICLE II
NOTE DETAILS, FORM OF NOTES, REDEMPTION OF NOTES AND USE OF PROCEEDS OF NOTES
Section 2.01 Note Details..................................................14
Section 2.02 Execution of Notes............................................14
Section 2.03 Registration, Transfer and Exchange of Notes; Persons
Treated as Registered Owners.................................14
Section 2.04 Lost, Stolen, Destroyed and Mutilated Notes...................15
Section 2.05 Indenture Trustee's Authentication Certificate................15
Section 2.06 Cancellation and Destruction of Notes by the Indenture
Trustee......................................................16
Section 2.07 Temporary Notes...............................................16
Section 2.08 Issuance of Notes.............................................16
ARTICLE III
PARITY AND PRIORITY OF LIEN; OTHER OBLIGATIONS;
AND DERIVATIVE PRODUCTS
Section 3.01 Parity and Priority of Lien...................................17
Section 3.02 Other Obligations.............................................17
Section 3.03 Derivative Products; Counterparty Derivative Payments;
Issuer Derivative Payments...................................18
ARTICLE IV
PROVISIONS APPLICABLE TO THE NOTES;
DUTIES OF THE ISSUER
Section 4.01 Payment of Principal, Interest and Premium....................19
Section 4.02 Representations and Warranties of the Issuer..................20
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Section 4.03 Covenants as to Additional Conveyances........................20
Section 4.04 Further Covenants of the Issuer...............................20
Section 4.05 Enforcement of the Servicing Agreement........................21
Section 4.06 Procedures for Transfer of Funds..............................22
Section 4.07 Additional Covenants with Respect to the Act..................22
Section 4.08 Financed Eligible Loans; Collections Thereof; Assignment
Thereof......................................................23
Section 4.09 Appointment of Agents, Etc....................................23
Section 4.10 Capacity to Sue...............................................23
Section 4.11 Continued Existence; Successor to Issuer......................23
Section 4.12 Amendment of Student Loan Transfer Agreements.................24
Section 4.13 Representations; Negative Covenants...........................24
Section 4.14 Additional Covenants..........................................29
Section 4.15 Providing of Notice...........................................30
Section 4.16 Reports by Issuer.............................................30
Section 4.17 Statement as to Compliance....................................31
Section 4.18 Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee............................................31
ARTICLE V
FUNDS
Section 5.01 Creation and Continuation of Funds and Accounts...............32
Section 5.02 Acquisition Fund..............................................32
Section 5.03 Revenue Fund..................................................33
Section 5.04 Reserve Fund..................................................34
Section 5.05 Operating Fund................................................34
Section 5.06 Transfers to Issuer...........................................35
Section 5.07 Investment of Funds Held by Indenture Trustee.................35
Section 5.08 Release.......................................................36
Section 5.09 Purchase of Notes.............................................36
ARTICLE VI
DEFAULTS AND REMEDIES
Section 6.01 Events of Default Defined.....................................37
Section 6.02 Remedy on Default; Possession of Trust Estate.................37
Section 6.03 Remedies on Default; Advice of Counsel........................39
Section 6.04 Remedies on Default; Sale of Trust Estate.....................39
Section 6.05 Appointment of Receiver.......................................40
Section 6.06 Restoration of Position.......................................40
Section 6.07 Purchase of Properties by Indenture Trustee or Registered
Owners.......................................................40
Section 6.08 Application of Sale Proceeds..................................40
Section 6.09 Accelerated Maturity..........................................40
Section 6.10 Remedies Not Exclusive........................................40
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Section 6.11 Direction of Indenture Trustee................................41
Section 6.12 Right to Enforce in Indenture Trustee.........................41
Section 6.13 Physical Possession of Obligations Not Required...............42
Section 6.14 Waivers of Events of Default..................................42
ARTICLE VII
THE INDENTURE TRUSTEE
Section 7.01 Acceptance of Trust...........................................42
Section 7.02 Recitals of Others............................................43
Section 7.03 As to Filing of Indenture.....................................43
Section 7.04 Indenture Trustee May Act Through Agents......................44
Section 7.05 Indemnification of Indenture Trustee..........................44
Section 7.06 Indenture Trustee's Right to Reliance.........................45
Section 7.07 Compensation of Indenture Trustee.............................45
Section 7.08 Indenture Trustee May Own Notes...............................46
Section 7.09 Resignation of Indenture Trustee..............................46
Section 7.10 Removal of Indenture Trustee..................................46
Section 7.11 Successor Indenture Trustee...................................47
Section 7.12 Manner of Vesting Title in Indenture Trustee..................47
Section 7.13 Additional Covenants By the Indenture Trustee to Conform
to the Act...................................................48
Section 7.14 Right of Inspection...........................................48
Section 7.15 Limitation with Respect to Examination of Reports.............48
Section 7.16 Servicing Agreement...........................................48
Section 7.17 Additional Covenants of Indenture Trustee.....................48
Section 7.18 Duty of Indenture Trustee with Respect to Rating Agencies.....48
Section 7.19 Merger of the Indenture Trustee...............................49
Section 7.20 Receipt of Funds from Servicer................................49
Section 7.21 Special Circumstances Leading to Resignation of Indenture
Trustee......................................................49
Section 7.22 Survival of Indenture Trustee's Rights to Receive
Compensation, Reimbursement and Indemnification..............50
Section 7.23 Corporate Trustee Required; Eligibility; Conflicting
Interests....................................................50
Section 7.24 Indenture Trustee May File Proofs of Claim....................50
ARTICLE VIII
SUPPLEMENTAL INDENTURES
Section 8.01 Supplemental Indentures Not Requiring Consent of
Registered Owners............................................51
Section 8.02 Supplemental Indentures Requiring Consent of Registered
Owners.......................................................52
Section 8.03 Additional Limitation on Modification of Indenture............53
Section 8.04 Notice of Defaults............................................53
Section 8.05 Conformity With the Trust Indenture Act.......................54
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ARTICLE IX
GENERAL PROVISIONS
Section 9.01 Notices.......................................................54
Section 9.02 Covenants Bind Issuer.........................................55
Section 9.03 Lien Created..................................................55
Section 9.04 Severability of Lien..........................................55
Section 9.05 Consent of Registered Owners Binds Successors.................56
Section 9.06 Nonpresentment of Notes or Interest Checks....................56
Section 9.07 Laws Governing................................................56
Section 9.08 Severability..................................................56
Section 9.09 Exhibits......................................................56
Section 9.10 Non-Business Days.............................................56
Section 9.11 Parties Interested Herein.....................................56
Section 9.12 Obligations Are Limited Obligations...........................57
Section 9.13 Counterparty Rights...........................................57
Section 9.14 Disclosure of Names and Addresses of Registered Owners........57
Section 9.15 Aggregate Principal Amount of Obligations.....................57
Section 9.16 Financed Eligible Loans.......................................57
ARTICLE X
PAYMENT AND CANCELLATION OF NOTES
AND SATISFACTION OF INDENTURE
Section 10.01 Trust Irrevocable.............................................57
Section 10.02 Satisfaction of Indenture.....................................58
Section 10.03 Cancellation of Paid Notes....................................58
ARTICLE XI
TERMINATION
Section 11.01 Termination of the Trust......................................58
Section 11.02 Notice........................................................59
ARTICLE XII
REPORTING REQUIREMENTS
Section 12.01 Annual Statement as to Compliance.............................59
Section 12.02 Annual Independent Public Accountants' Servicing Report.......59
Section 12.03 Servicer's Certificate........................................59
Section 12.04 Statements to Registered Owners...............................59
Exhibit A - Eligible Loan Acquisition Certificate
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INDENTURE OF TRUST
THIS INDENTURE OF TRUST, dated as of ______, 200_ (this
"Indenture"), is by and between SLC STUDENT LOAN TRUST-I, a Delaware business
trust (the "Issuer"), and BANKERS TRUST COMPANY, a New York corporation, as
indenture trustee (the "Indenture Trustee") (all capitalized terms used in these
preambles, recitals and granting clauses shall have the same meanings assigned
thereto in Article I hereof);
W I T N E S S E T H:
WHEREAS, the Issuer represents that it is duly created as a Delaware
business trust and that it has duly authorized the execution and delivery of
this Indenture, which Indenture provides for the payment of student loan
asset-backed notes (the "Notes") and the payments to any Counterparty (as
defined herein), all to be issued pursuant to the terms of Supplemental
Indentures; and
WHEREAS, this Indenture is subject to the provisions of the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act" or "TIA"), that are
deemed to be incorporated into this Indenture and shall, to the extent
applicable, be governed by such provisions; and
WHEREAS, the Indenture Trustee has agreed to accept the trusts
herein created upon the terms herein set forth; and
WHEREAS, it is hereby agreed between the parties hereto, the
Registered Owners of any Notes (the Registered Owners evidencing their consent
by their acceptance of the Notes) and any Counterparty (the Counterparty
evidencing its consent by its execution and delivery of a Derivative Product (as
defined herein)) that in the performance of any of the agreements of the Issuer
herein contained, any obligation it may thereby incur for the payment of money
shall not be general debt on its part, but shall be secured by and payable
solely from the Trust Estate, payable in such order of preference and priority
as provided herein;
NOW, THEREFORE, the Issuer (and, with respect to the legal title to
the Financed Eligible Loans, the Eligible Lender Trustee), in consideration of
the premises and acceptance by the Indenture Trustee of the trusts herein
created, of the purchase and acceptance of the Notes by the Registered Owners
thereof, of the execution and delivery of any Derivative Product by a
Counterparty and the Issuer and the acknowledgement thereof by the Indenture
Trustee, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, hereby GRANT, CONVEY, PLEDGE,
TRANSFER, ASSIGN AND DELIVER to the Indenture Trustee, for the benefit of the
Registered Owners of the Notes, any Counterparty (to secure the payment of any
and all amounts which may from time to time become due and owing to a
Counterparty pursuant to any Derivative Product), all of their right, title and
interest in and to the moneys, rights, and properties described in the granting
clauses A through F below (the "Trust Estate"), as follows:
GRANTING CLAUSE A
The Revenues (other than Revenues deposited in the Operating Fund or
otherwise released from the lien of the Trust Estate as provided herein);
GRANTING CLAUSE B
All moneys and investments held in the Funds created under Section
5.01(a) hereof (other than the moneys and investments held in the Operating
Fund);
GRANTING CLAUSE C
The Financed Eligible Loans;
GRANTING CLAUSE D
The Servicing Agreements, the Student Loan Transfer Agreements and
the Guarantee Agreements as the same relate to Financed Eligible Loans;
GRANTING CLAUSE E
Any Derivative Product and any Counterparty Guarantee; provided,
however, that this Granting Clause E shall not be for the benefit of a
Counterparty with respect to its Derivative Product; and
GRANTING CLAUSE F
Any and all other property, rights and interests of every kind or
description that from time to time hereafter is granted, conveyed, pledged,
transferred, assigned or delivered to the Indenture Trustee as additional
security hereunder.
TO HAVE AND TO HOLD the Trust Estate, whether now owned or held or
hereafter acquired, unto the Indenture Trustee and its successors or assigns,
IN TRUST NEVERTHELESS, upon the terms and trusts herein set forth
for the equal and proportionate benefit and security of all present and future
Registered Owners of the Notes, without preference of any Note over any other,
except as provided herein, and for enforcement of the payment of the Notes in
accordance with their terms, and all other sums payable hereunder (including
payments due and payable to any Counterparty) or on the Notes, and for the
performance of and compliance with the obligations, covenants, and conditions of
this Indenture, as if all the Notes and other Obligations (as defined herein) at
any time Outstanding had been executed and delivered simultaneously with the
execution and delivery of this Indenture;
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PROVIDED, HOWEVER, that if the Issuer, its successors or assigns,
shall well and truly pay, or cause to be paid, the principal of the Notes and
the interest due and to become due thereon, or provide fully for payment thereof
as herein provided, at the times and in the manner mentioned in the Notes
according to the true intent and meaning thereof, and shall make all required
payments into the Funds as required under Article V hereof, or shall provide, as
permitted hereby, for the payment thereof by depositing with the Indenture
Trustee sums sufficient to pay or to provide for payment of the entire amount
due and to become so due as herein provided (including payments due and payable
to any Counterparty), then this Indenture and the rights hereby granted shall
cease, terminate and be void; otherwise, this Indenture shall be and remain in
full force and effect;
NOW, THEREFORE, it is mutually covenanted and agreed as follows:
ARTICLE I
DEFINITIONS AND USE OF PHRASES
The following terms have the following meanings unless the context
clearly requires otherwise:
"Account" shall mean any of the accounts created and established
within any Fund by this Indenture.
"Acquisition Fund" shall mean the Fund by that name created in
accordance with Section 5.01(a)(i) hereof and further described in Section 5.02
hereof, including any Accounts and Subaccounts created therein.
"Act" shall mean the Higher Education Act of 1965, as amended or
supplemented from time to time, or any successor federal act and all
regulations, directives, bulletins, and guidelines promulgated from time to time
thereunder.
"Aggregate Market Value" shall mean on any calculation date the sum
of the Values of all assets of the Trust Estate, less moneys in any Fund or
Account which the Issuer is then entitled to receive for deposit into the
Operating Fund but which has not yet been removed from the Trust Estate.
"Authorized Officer" shall mean, with respect to the Issuer, any
officer of the Issuer Trustee who is authorized to act for the Issuer Trustee in
matters relating to the Issuer and who is identified on the list of Authorized
Officers delivered by the Issuer Trustee to the Indenture Trustee (as such list
may be modified or supplemented from time to time thereafter).
"Authorized Representative" shall mean, when used with reference to
the Issuer, (a) an Authorized Officer or (b) any affiliate organization or other
entity authorized by the Issuer to act on the Issuer's behalf.
"Business Day" shall mean the definition of Business Day found in
the Supplemental Indenture authorizing a series of Notes.
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"Certificate of Insurance" shall mean any Certificate evidencing a
Financed Eligible Loan is Insured pursuant to a Contract of Insurance.
"Commission" shall mean the Securities and Exchange Commission.
"Contract of Insurance" shall mean the contract of insurance between
the Eligible Lender and the Secretary.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time. Each reference to a section of the Code herein shall be deemed to
include the United States Treasury Regulations, including applicable temporary
and proposed regulations, relating to such section which are applicable to the
Notes or the use of the proceeds thereof. A reference to any specific section of
the Code shall be deemed also to be a reference to the comparable provisions of
any enactment which supersedes or replaces the Code thereunder from time to
time.
"Counterparty" shall mean any counterparty under a Derivative
Product.
"Counterparty Derivative Payment" shall mean any payment to be made
to, or for the benefit of, the Issuer under a Derivative Product.
"Date of Issuance" shall mean the date of original issuance and
delivery of any Notes to an underwriter or placement agent pursuant to this
Indenture.
"Depositor" shall mean SLC Student Loan Receivables I, Inc.
"Derivative Payment Date" shall mean, with respect to a Derivative
Product, any date specified in such Derivative Product on which both or either
of the Issuer Derivative Payment and/or a Counterparty Derivative Payment is due
and payable under such Derivative Product.
"Derivative Product" shall mean a written contract or agreement
between the Issuer and a Counterparty, which provides that the Issuer's
obligations thereunder will be conditioned on the absence of (i) a failure by
the Counterparty to make any payment required thereunder when due and payable,
or (ii) a default thereunder with respect to the financial status of the
Counterparty, and:
(a) under which the Issuer is obligated to pay (whether on a net payment
basis or otherwise) on one or more scheduled and specified
Derivative Payment Dates, the Issuer Derivative Payments in exchange
for the Counterparty's obligation to pay (whether on a net payment
basis or otherwise), or to cause to be paid, to the Issuer,
Counterparty Derivative Payments on one or more scheduled and
specified Derivative Payment Dates in the amounts set forth in the
Derivative Product;
(b) for which the Issuer's obligation to make Issuer Derivative Payments
may be secured by a pledge of and lien on the Trust Estate on an
equal and ratable basis with any class of the Issuer's Outstanding
Notes and which Issuer Derivative Payments may be equal in priority
with any priority classification of the Issuer's Outstanding Notes;
and
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(c) under which Counterparty Derivative Payments are to be made directly
to the Indenture Trustee for deposit into the Revenue Fund.
"Derivative Value" shall mean the value of the Derivative Product,
if any, to the Counterparty, provided that such value is defined and calculated
in substantially the same manner as amounts are defined and calculated pursuant
to the applicable provisions of an ISDA Master Agreement.
"Eligible Lender" shall mean any "Eligible Lender," as defined in
the Act, and which has received an eligible lender designation from the
Secretary with respect to Eligible Loans made under the Act.
"Eligible Lender Trustee" shall mean Bankers Trust Company, a
____________, not in its individual capacity but solely as Eligible Lender
Trustee under the Eligible Lender Trust Agreement.
"Eligible Lender Trust Agreement" shall mean the Eligible Lender
Trust Agreement dated as of __________, 200_ between the Issuer and the Eligible
Lender Trustee.
"Eligible Loan" shall mean any loan made to finance post-secondary
education that is (a) made under the Act; (b) insured by the Secretary of Health
and Human Services pursuant to the Public Health Services Act; or (c) otherwise
permitted to be acquired by the Issuer pursuant to its Program (provided a
Rating Confirmation is received with respect thereto).
"Eligible Loan Acquisition Certificate" shall mean a certificate
signed by an Authorized Officer of the Issuer in substantially the form attached
as Exhibit A hereto.
"Event of Bankruptcy" shall mean (a) the Issuer shall have commenced
a voluntary case or other proceeding seeking liquidation, reorganization, or
other relief with respect to itself or its debts under any bankruptcy,
insolvency, or other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian, or other similar
official of it or any substantial part of its property, or shall have made a
general assignment for the benefit of creditors, or shall have declared a
moratorium with respect to its debts or shall have failed generally to pay its
debts as they become due, or shall have taken any action to authorize any of the
foregoing; or (b) an involuntary case or other proceeding shall have been
commenced against the Issuer seeking liquidation, reorganization, or other
relief with respect to it or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian, or other similar official of it or any
substantial part of its property provided such action or proceeding is not
dismissed within 60 days.
"Event of Default" shall have the meaning specified in Article VI
hereof.
"Financed" or "Financing," when used with respect to Eligible Loans,
shall mean or refer to Eligible Loans (a) acquired by the Issuer with balances
in the Acquisition Fund or otherwise deposited in or accounted for in the
Acquisition Fund or otherwise constituting a part of the Trust Estate and (b)
Eligible Loans substituted or exchanged for Financed Eligible Loans, but does
not include Eligible Loans released from the lien of this Indenture and sold or
transferred, to the extent permitted by this Indenture.
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"Fiscal Year" shall mean the fiscal year of the Issuer as
established from time to time.
"Fitch" shall mean Fitch, Inc., or any successor thereto.
"Funds" shall mean each of the Funds created in accordance with
Sections 5.01(a) and (b) hereof.
"Guarantee" or "Guaranteed" shall mean, with respect to an Eligible
Loan, the insurance or guarantee by the Guaranty Agency pursuant to such
Guaranty Agency's Guarantee Agreement of the maximum percentage of the principal
of and accrued interest on such Eligible Loan allowed by the terms of the Act
with respect to such Eligible Loan at the time it was originated and the
coverage of such Eligible Loan by the federal reimbursement contracts,
providing, among other things, for reimbursement to the Guaranty Agency for
payments made by it on defaulted Eligible Loans insured or guaranteed by the
Guaranty Agency of at least the minimum reimbursement allowed by the Act with
respect to a particular Eligible Loan.
"Guarantee Agreements" shall mean a guaranty or lender agreement
between the Indenture Trustee and any Guaranty Agency, and any amendments
thereto.
"Guaranty Agency" shall mean any entity authorized to guarantee
student loans under the Act and with which the Indenture Trustee maintains a
Guarantee Agreement.
"Highest Priority Obligations" shall mean, (a) at any time when
Senior Obligations are Outstanding, the Senior Obligations, (b) at any time when
no Senior Obligations are Outstanding, the Subordinate Obligations, and (c) at
any time when no Senior Obligations or Subordinate Obligations are Outstanding,
the Junior-Subordinate Obligations (and any priorities as between
Junior-Subordinate Obligations as shall be established by Supplemental
Indentures).
"Indenture" shall mean this Indenture of Trust, including all
supplements and amendments hereto.
"Insurance" or "Insured" or "Insuring" means, with respect to an
Eligible Loan, the insuring by the Secretary (as evidenced by a Certificate of
Insurance or other document or certification issued under the provisions of the
Act) under the Act of 100% of the principal of and accrued interest on such
Eligible Loan.
"Interest Benefit Payment" shall mean an interest payment on
Eligible Loans received pursuant to the Act and an agreement with the federal
government, or any similar payments.
"Investment Agreement" shall mean any investment agreement approved
by the Rating Agencies.
"Investment Securities" shall mean:
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(a) direct obligations of, or obligations on which the timely payment of
the principal of and interest on which are unconditionally and fully
guaranteed by, the United States of America;
(b) interest-bearing time or demand deposits, certificates of deposit or
other similar banking arrangements with a maturity of 12 months or
less with any bank, trust company, national banking association or
other depository institution, including those of the Indenture
Trustee, provided that, at the time of deposit or purchase such
depository institution has commercial paper which is rated ["A-1+"
by S&P, "F-1+" by Fitch and "P-1" by Moody's];
(c) interest-bearing time or demand deposits, certificates of deposit or
other similar banking arrangements with a maturity of 24 months or
less, but more than 12 months, with any bank, trust company,
national banking association or other depository institution,
including those of the Indenture Trustee and any of its affiliates,
provided that, at the time of deposit or purchase such depository
institution has senior debt rated ["A" or higher by S&P, "A" or
higher by Fitch and "Aa" or higher by Moody's,] and, if commercial
paper is outstanding, commercial paper which is rated ["A-1+" by
S&P, "F-1+" by Fitch and "P-1" by Moody's];
(d) interest-bearing time or demand deposits, certificates of deposit or
other similar banking arrangements with a maturity of more than 24
months with any bank, trust company, national banking association or
other depository institution, including those of the Indenture
Trustee and any of its affiliates, provided that, at the time of
deposit or purchase such depository institution has senior debt
rated ["AA" or higher by S&P, "AA" or higher by Fitch and "Aaa" or
higher by Moody's] and if commercial paper is outstanding,
commercial paper which is rated ["A-1+" by S&P, "F-1+" by Fitch and
"P-1" by Moody's];
(e) bonds, debentures, notes or other evidences of indebtedness issued
or guaranteed by any of the following agencies: Federal Farm Credit
Banks, Federal Home Loan Mortgage Corporation; the Export-Import
Bank of the United States; the Federal National Mortgage
Association; the Student Loan Marketing Association; the Farmers
Home Administration; Federal Home Loan Banks provided such
obligation is rated ["AAA" by S&P, "AAA" by Fitch and "Aaa" by
Moody's]; or any agency or instrumentality of the United States of
America which shall be established for the purposes of acquiring the
obligations of any of the foregoing or otherwise providing financing
therefor;
(f) repurchase agreements and reverse repurchase agreements, other than
overnight repurchase agreements and overnight reverse repurchase
agreements, with banks, including the Indenture Trustee and any of
its affiliates, which are members of the Federal Deposit Insurance
Corporation or firms which are members of the Securities Investors
Protection Corporation, in each case whose outstanding, unsecured
debt securities are rated [no lower than two subcategories below the
highest rating on any series of Outstanding Notes by S&P, Fitch and
Moody's] and, if commercial paper is outstanding, commercial paper
which is rated ["A-1+" by S&P, "F-1+" by Fitch and "P-1" by
Moody's];
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(g) overnight repurchase agreements and overnight reverse repurchase
agreements at least 101% collateralized by securities described in
subparagraph (a) of this definition and with a counterparty,
including the Indenture Trustee and any of its affiliates, that has
senior debt rated ["A" or higher by S&P, "A" or higher by Fitch and
"Aa" or higher by Moody's] and, if commercial paper is outstanding,
commercial paper which is rated ["A-1+" by S&P, "F-1+" by Fitch and
"P-1" by Moody's] or a counterparty approved in writing by S&P,
Fitch and Moody's, respectively;
(h) investment agreements or guaranteed investment contracts, which may
be entered into by and among the Issuer and/or the Indenture Trustee
and any bank, bank holding company, corporation or any other
financial institution, including the Indenture Trustee and any of
its affiliates, whose outstanding (i) commercial paper is rated
["A-1+" by S&P, "F-1+" by Fitch and "P-1" by Moody's] for agreements
or contracts with a maturity of 12 months or less; (ii) unsecured
long-term debt is rated [no lower than two subcategories below the
highest rating on any series of Outstanding Notes by S&P, Fitch and
Moody's] and, if commercial paper is outstanding, commercial paper
which is rated ["A-1+" by S&P, "F-1+" by Fitch and "P-1" by Moody's]
for agreements or contracts with a maturity of 24 months or less,
but more than 12 months, or (iii) unsecured long-term debt which is
rated [no lower than two subcategories below the highest rating on
any series of Outstanding Notes by S&P, Fitch and Moody's] and, if
commercial paper is outstanding, commercial paper which is rated
["A-1+" by S&P, "F-1+" by Fitch and "P-1" by Moody's] for agreements
or contracts with a maturity of more than 24 months, or, in each
case, by an insurance company whose claims-paying ability is so
rated;
(i) collateralized investment agreements or collateralized guaranteed
investment agreements, which may be entered into by and among the
Issuer, the Indenture Trustee and any bank, bank holding company,
corporation or any other financial institution, including the
Indenture Trustee and any of its affiliates, so long as (i) the
collateral consists of securities of the types specified in (a) or
(e) above, at the levels shown below under (v) below; (ii) the
Indenture Trustee has possession of the collateral; (iii) the
Indenture Trustee has a perfected first priority security interest
in the collateral; (iv) the collateral is free and clear of
third-party liens and, in the case of a SIPC broker, was not
acquired pursuant to a repurchase agreement or reverse repurchase
agreement; and (v) the collateral shall be valued (based upon
current market price plus accrued interest) weekly and shall be
equal to not less than 103% of the amount of the deposit (or 105% in
the case where the collateral consists of obligations of the Federal
National Mortgage Association or the Federal Home Loan Mortgage
Issuer);
(j) "tax exempt bonds" as defined in Section 150(a)(6) of the Code,
other than "specified private activity bonds" as defined in Section
57(a)(5)(C) of the Code, that are rated [in the highest category by
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S&P, Fitch and Moody's] for long-term or short-term debt or shares
of a so-called money market or mutual fund rated ["AA/A-1" or higher
by S&P, "AA/F-1+" or higher by Fitch and "Aa/P-1" or higher by
Moody's], that do not constitute "investment property" within the
meaning of Section 148(b)(2) of the Code, provided that the fund has
all of its assets invested in obligations of such rating quality;
(k) commercial paper, including that of the Indenture Trustee and any of
its affiliates, which is rated in the single highest classification,
"A-1+" by S&P, "F-1+" by Fitch and "P-1" by Moody's, and which
matures not more than 270 days after the date of purchase;
(l) investments in a money market fund rated at least ["AA" or "A-1" by
S&P, "AA" or "F-1+" by Fitch and "Aa" or "P-1" by Moody's],
including funds for which the Indenture Trustee or an affiliate
thereof acts as investment advisor or provides other similar
services for a fee;
(m) any Investment Agreement; and
(n) any other investment with respect to which a Rating Confirmation has
been obtained from each Rating Agency.
"ISDA Master Agreement" shall mean the ISDA Interest Rate and
Currency Exchange Agreement, copyright 1992, as amended from time to time, and
as in effect with respect to any Derivative Product.
"Issuer" shall mean SLC Student Loan Trust-I, a Delaware business
trust, and any successor thereto.
"Issuer Order" shall mean a written order signed in the name of the
Issuer by any one of its Authorized Officers and delivered to the Indenture
Trustee.
"Issuer Derivative Payment" shall mean a payment required to be made
by or on behalf of the Issuer due to a Counterparty pursuant to a Derivative
Product.
"Issuer Trustee" shall mean Wilmington Trust Company, as Trustee
under the Trust Agreement.
"Junior-Subordinate Notes" shall mean Notes, the principal of and
interest on which is payable on a subordinated basis to the payment of the
principal of and interest on the Senior Notes and the Subordinate Notes;
provided, however, that any series of the Junior-Subordinate Notes need not
necessarily be payable on a parity with all other series of the
Junior-Subordinate Notes.
"Junior-Subordinate Obligations" shall mean Junior-Subordinate Notes
and any Derivative Product, the priority of payment of which is equal with that
of any series or subseries of Junior-Subordinate Notes.
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"Maturity" when used with respect to any Note, shall mean the date
on which the principal thereof becomes due and payable as therein or herein
provided, whether at its Stated Maturity, by earlier redemption, by declaration
of acceleration, or otherwise.
"Moody's" shall mean Moody's Investors Service , Inc. or any
successor thereto.
"Note Counsel" shall mean counsel to the Issuer.
"Note Payment Date" shall mean, for any Note, any interest payment
date, its Stated Maturity or the date of any other regularly scheduled principal
payment with respect thereto.
"Notes" shall mean any notes or other debt obligations issued
pursuant to Section 2.08 hereof.
"Obligations" shall mean Senior Obligations, Subordinate Obligations
and Junior-Subordinate Obligations.
"Operating Fund" shall mean the fund by that name created in
accordance with Section 5.01 hereof and further described in Section 5.05
hereof.
"Outstanding" shall mean, when used in connection with any Note, a
Note which has been executed and delivered pursuant to this Indenture which at
such time remains unpaid as to principal or interest, unless provision has been
made for such payment pursuant to Section 10.02 hereof, excluding Notes which
have been replaced pursuant to Section 2.09 hereof and, when used in connection
with any Derivative Product, a Derivative Product which has been executed and
delivered pursuant to this Indenture and which at such time remains in effect.
"Person" shall mean an individual, corporation, partnership, joint
venture, association, joint stock company, trust, unincorporated organization,
or government or agency or political subdivision thereof.
"Principal Office" shall mean the principal office of the party
indicated, as set forth in Section 9.01 hereof or elsewhere in this Indenture.
"Program" shall mean the Issuer's program for the origination and
the purchase of Eligible Loans, as the same may be modified from time to time.
"Program Expenses" shall mean (a) the fees and expenses of the
Indenture Trustee; (b) the fees and expenses of any auction agent, any market
agent, any calculation agent and any broker-dealer then acting under a
Supplemental Indenture with respect to auction rate Notes; (c) the fees and
expenses of any remarketing agent then acting under a Supplemental Indenture
with respect to variable rate Notes; (d) the fees and expenses due to any credit
provider of any Notes for which a credit facility or liquidity facility is in
place; (e) the fees of the Servicer and/or Custodian under any servicing
agreement or custodian agreement; (f) the fees and expenses of the Issuer
incurred in connection with the preparation of legal opinions and other
authorized reports or statements attributable to the Notes and the Financed
Eligible Loans; (g) transfer fees, purchase premiums and loan origination fees
on Financed Eligible Loans; (h) fees and expenses associated with the delivery
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of a substitute credit facility or liquidity facility under a Supplemental
Indenture; (i) fees and expenses associated with (but not payments under)
Derivative Products; (j) the costs of remarketing any variable rate Notes and
(k) expenses incurred for the Issuer's maintenance and operation of its Program
as a direct consequence of this Indenture, the Notes or the Financed Eligible
Loans; including, but not limited to, taxes, the reasonable fees and expenses of
attorneys, agents, financial advisors, consultants, accountants and other
professionals, attributable to such maintenance and operation, marketing
expenses for the Program and a prorated portion of the rent, personnel
compensation, office supplies and equipment, travel expenses and other lawful
payments made to the Issuer Trustee.
"Rating" shall mean one of the rating categories of S&P, Fitch and
Moody's or any other Rating Agency, provided S&P, Fitch and Moody's or any other
Rating Agency, as the case may be, is currently rating the Notes.
"Rating Agency" shall mean, collectively, S&P, Fitch and Moody's and
their successors and assigns or any other Rating Agency requested by the Issuer
to maintain a Rating on any of the Notes.
"Rating Confirmation" means, as of any date, a letter from each
Rating Agency then providing a Rating for any of the Notes, confirming that the
action proposed to be taken by the Issuer will not, in and of itself, result in
a downgrade of any of the Ratings then applicable to the Notes, or cause any
Rating Agency to suspend or withdraw the Ratings then applicable to the Notes.
"Recoveries of Principal" shall mean all amounts received by the
Indenture Trustee from or on account of any Financed Eligible Loan as a recovery
of the principal amount thereof, including scheduled, delinquent and advance
payments, payouts or prepayments, proceeds from insurance or from the sale,
assignment, transfer, reallocation or other disposition of a Financed Eligible
Loan and any payments representing such principal from the guarantee or
insurance of any Financed Eligible Loan.
"Registered Owner" shall mean, with respect to a Note, the Person in
whose name a Note is registered on the Note registration books maintained by the
Indenture Trustee and, with respect to a Derivative Product, the Counterparty
thereunder.
"Regulations" shall mean the Regulations promulgated from time to
time by the Secretary or any Guaranty Agency guaranteeing Financed Eligible
Loans.
"Reserve Fund" shall mean the Fund by that name created in
accordance with Section 5.01(a)(iii) hereof and further described in Section
5.04 hereof, including any Accounts and Subaccounts created therein.
"Reserve Fund Requirement" shall mean an amount, if any, required to
be on deposit in the Reserve Fund with respect to any Notes issued pursuant to
the Supplemental Indenture authorizing the issuance of such Notes.
"Revenue" or "Revenues" shall mean all Recoveries of Principal,
payments, proceeds, charges and other income received by the Indenture Trustee
or the Issuer from or on account of any Financed Eligible Loan (including
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scheduled, delinquent and advance payments of and any insurance proceeds with
respect to, interest, including Interest Benefit Payments, on any Financed
Eligible Loan and any Special Allowance Payment received by the Issuer with
respect to any Financed Eligible Loan) and all interest earned or gain realized
from the investment of amounts in any Fund or Account and all payments received
by the Issuer pursuant to a Derivative Product.
"Revenue Fund" shall mean the Fund by that name created in
accordance with Section 5.01(a)(ii) hereof and further described in Section 5.03
hereof.
"S&P" shall mean Standard & Poor's Ratings Group, a Division of The
McGraw-Hill Companies, Inc. or any successor thereto.
"Secretary" shall mean the Secretary of the United States Department
of Education or any successor to the pertinent functions thereof under the Act.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Depository" or "Depository" shall mean The Depository
Trust Company and its successors and assigns or if, (a) the then Securities
Depository resigns from its functions as depository of the Notes or (b) the
Issuer discontinues use of the Securities Depository, any other securities
depository which agrees to follow the procedures required to be followed by a
securities depository in connection with the Notes and which is selected by the
Issuer with the consent of the Indenture Trustee.
"Securities Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
"Senior Notes" shall mean all Notes secured on a senior priority to
the Subordinate Obligations and the Junior-Subordinate Obligations.
"Senior Obligations" shall mean Senior Notes and any Derivative
Product, the priority of payment of which is equal with that of Senior Notes.
"Servicer" shall mean, The Student Loan Corporation, in its capacity
as servicer of the Financed Eligible Loans or any permitted successor Servicer.
"Servicing Agreement" shall mean the servicing agreement with the
Servicer relating to Financed Eligible Loans, as amended from time to time.
"Special Allowance Payments" shall mean the special allowance
payments authorized to be made by the Secretary by Section 438 of the Act, or
similar allowances, if any, authorized from time to time by federal law or
regulation.
"Stated Maturity" shall mean the date specified in the Notes as the
fixed date on which principal of such Notes is due and payable.
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"Student Loan Transfer Agreement" shall mean a loan transfer
agreement entered into for the transfer of Eligible Loans to the Issuer for
inclusion in the Trust Estate.
"Subaccount" shall mean any of the subaccounts which may be created
and established within any Account by this Indenture.
"Subordinate Notes" shall mean any Notes secured on a priority
subordinate to the Senior Obligations and on a priority senior to the
Junior-Subordinate Obligations.
"Subordinate Obligations" shall mean Subordinate Notes and any
Derivative Product, the priority of payment of which is equal with that of
Subordinate Notes.
"Supplemental Indenture" shall mean an agreement supplemental hereto
executed pursuant to Article VIII hereof.
"Trust Agreement" shall mean the Amended and Restated Trust
Agreement dated as of _______, 2002 between the Depositor and Wilmington Trust
Company, as trustee.
"Trust Estate" shall mean the property described as such in the
granting clauses hereto.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of
1939, as amended, and as in force at the date as of which this Indenture was
executed, except as provided in Section 8.05 hereof.
"Indenture Trustee" shall mean Bankers Trust Company, acting in its
capacity as indenture trustee under this Indenture, or any successor trustee
designated pursuant to this Indenture.
"Value" on any calculation date when required under this Indenture
shall mean the value of the Trust Estate calculated by the Issuer as to (a)
below and by the Indenture Trustee as to (b) through (e), inclusive, below, as
follows:
(a) with respect to any Eligible Loan, the unpaid principal amount
thereof plus any accrued but unpaid interest, Interest Benefit
Payments and Special Allowance Payments;
(b) with respect to any funds of the Issuer held under this Indenture
and on deposit in any commercial bank or as to any banker's
acceptance or repurchase agreement or investment contract, the
amount thereof plus accrued but unpaid interest;
(c) with respect to any Investment Securities of an investment company,
the bid price of the shares as reported by the investment company
plus accrued but unpaid interest;
(d) as to investments the bid and asked prices of which are published on
a regular basis in The Wall Street Journal (or, if not there, then
in The New York Times): the average of the bid and asked prices for
such investments so published on or most recently prior to such time
of determination; and
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(e) as to investments the bid and asked prices of which are not
published on a regular basis in The Wall Street Journal or The
New York Times: (i) the lower of the bid prices at such time of
determination for such investments by any two nationally
recognized government securities dealers (selected by the Issuer
in its absolute discretion) at the time making a market in such
investments or (ii) the bid price published by a nationally
recognized pricing service.
Words importing the masculine gender include the feminine gender,
and words importing the feminine gender include the masculine gender. Words
importing persons include firms, associations and corporations. Words importing
the singular number include the plural number and vice versa. Additional terms
are defined in the body of this Indenture.
ARTICLE II
NOTE DETAILS, FORM OF NOTES, REDEMPTION OF NOTES AND USE OF
PROCEEDS OF NOTES
Section 2.01 Note Details. The details of each series of Notes
authorized pursuant to this Indenture and a Supplemental Indenture, shall be
contained in the applicable Supplemental Indenture. Such details shall include,
but are not limited to, the principal amount, authorized denomination, dated
date, interest rate, principal maturity date, redemption provisions and
registration provisions.
Section 2.02 Execution of Notes. The Notes shall be executed in the
name and on behalf of the Issuer by the manual or facsimile signature of any of
its Authorized Officers. Any Note may be signed (manually or by facsimile) or
attested on behalf of the Issuer by any person who, at the date of such act,
shall hold the proper office, notwithstanding that at the date of
authentication, issuance or delivery, such person may have ceased to hold such
office.
Section 2.03 Registration, Transfer and Exchange of Notes; Persons
Treated as Registered Owners. The Issuer shall cause books for the registration
and for the transfer of the Notes as provided in this Indenture to be kept by
the Indenture Trustee which is hereby appointed the transfer agent of the Issuer
for the Notes. Notwithstanding such appointment and with the prior written
consent of the Issuer, the Indenture Trustee is hereby authorized to make any
arrangements with other institutions which it deems necessary or desirable in
order that such institutions may perform the duties of transfer agent for the
Notes. Upon surrender for transfer of any Note at the Principal Office of the
Indenture Trustee, duly endorsed for transfer or accompanied by an assignment
duly executed by the Registered Owner or his attorney duly authorized in
writing, the Issuer shall execute and the Indenture Trustee shall authenticate
and deliver in the name of the transferee or transferees a new fully registered
Note or Notes of the same interest rate and for a like series, subseries, if
any, and aggregate principal amount of the same maturity.
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Notes may be exchanged at the Principal Office of the Indenture
Trustee for a like aggregate principal amount of fully registered Notes of the
same series, subseries, if any, interest rate and maturity in authorized
denominations. The Issuer shall execute and the Indenture Trustee shall
authenticate and deliver Notes which the Registered Owner making the exchange is
entitled to receive, bearing numbers not contemporaneously outstanding. The
execution by the Issuer of any fully registered Note of any authorized
denomination shall constitute full and due authorization of such denomination
and the Indenture Trustee shall thereby be authorized to authenticate and
deliver such fully registered Note.
The Indenture Trustee shall not be required to transfer or exchange
any Note during the period of 15 business days next preceding the mailing of
notice of redemption as herein provided. After the giving of such notice of
redemption, the Indenture Trustee shall not be required to transfer or exchange
any Note, which Note or portion thereof has been called for redemption.
As to any Note, the person in whose name the same shall be
registered shall be deemed and regarded as the absolute owner thereof for all
purposes, and payment of either principal or interest on any fully registered
Note shall be made only to or upon the written order of the Registered Owner
thereof or his legal representative but such registration may be changed as
hereinabove provided. All such payments shall be valid and effectual to satisfy
and discharge the liability upon such Note to the extent of the sum or sums
paid.
The Indenture Trustee shall require the payment by any Registered
Owner requesting exchange or transfer of any tax or other governmental charge
required to be paid with respect to such exchange or transfer. The applicant for
any such transfer or exchange may be required to pay all taxes and governmental
charges in connection with such transfer or exchange.
Section 2.04 Lost, Stolen, Destroyed and Mutilated Notes. Upon
receipt by the Indenture Trustee of evidence satisfactory to it of the ownership
of and the loss, theft, destruction or mutilation of any Note and, in the case
of a lost, stolen or destroyed Note, of indemnity satisfactory to it, and upon
surrender and cancellation of the Note, if mutilated, (a) the Issuer shall
execute, and the Indenture Trustee shall authenticate and deliver, a new Note of
the same series, subseries, if any, interest rate, maturity and denomination in
lieu of such lost, stolen, destroyed or mutilated Note or (b) if such lost,
stolen, destroyed or mutilated Note shall have matured or have been called for
redemption, in lieu of executing and delivering a new Note as aforesaid, the
Issuer may pay such Note. Any such new Note shall bear a number not
contemporaneously outstanding. The applicant for any such new Note may be
required to pay all taxes and governmental charges and all expenses and charges
of the Issuer and of the Indenture Trustee in connection with the issuance of
such Note. All Notes shall be held and owned upon the express condition that, to
the extent permitted by law, the foregoing conditions are exclusive with respect
to the replacement and payment of mutilated, destroyed, lost or stolen Notes,
negotiable instruments or other securities.
Section 2.05 Indenture Trustee's Authentication Certificate. The
Indenture Trustee's authentication certificate upon any Notes shall be
substantially in the form provided in the Supplemental Indenture authorizing the
issuance of such Notes. No Note shall be secured hereby or entitled to the
benefit hereof, or shall be valid or obligatory for any purpose, unless a
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certificate of authentication, substantially in such form, has been duly
executed by the Indenture Trustee; and such certificate of the Indenture Trustee
upon any Note shall be conclusive evidence and the only competent evidence that
such Note has been authenticated and delivered hereunder and under a
Supplemental Indenture. The Indenture Trustee's certificate of authentication
shall be deemed to have been duly executed by it if manually signed by an
authorized officer or signatory of the Indenture Trustee, but it shall not be
necessary that the same person sign the certificate of authentication on all of
the Notes issued hereunder.
Section 2.06 Cancellation and Destruction of Notes by the Indenture
Trustee. Whenever any Outstanding Notes shall be delivered to the Indenture
Trustee for the cancellation thereof pursuant to this Indenture, upon payment of
the principal amount and interest represented thereby, or for replacement
pursuant to Section 2.03 hereof, such Notes shall be promptly cancelled and,
within a reasonable time, cremated or otherwise destroyed by the Indenture
Trustee and counterparts of a certificate of destruction evidencing such
cremation or other destruction shall be furnished by the Indenture Trustee to
the Issuer.
Section 2.07 Temporary Notes. Pending the preparation of definitive
Notes, the Issuer may execute and the Indenture Trustee shall authenticate and
deliver temporary Notes. Temporary Notes shall be issuable as fully registered
Notes without coupons, of any denomination, and substantially in the form of the
definitive Notes but with such omissions, insertions and variations as may be
appropriate for temporary Notes, all as may be determined by the Issuer. Every
temporary Note shall be executed by the Issuer and be authenticated by the
Indenture Trustee upon the same conditions and in substantially the same manner,
and with like effect, as the definitive Notes. As promptly as practicable the
Issuer shall execute and shall furnish definitive Notes and thereupon temporary
Notes may be surrendered in exchange therefor without charge at the principal
office of the Indenture Trustee, and the Indenture Trustee shall authenticate
and deliver in exchange for such temporary Notes a like aggregate principal
amount of definitive Notes. Until so exchanged the temporary Notes shall be
entitled to the same benefits under this Indenture as definitive Notes.
Section 2.08 Issuance of Notes.
(a) The Issuer shall have the authority, upon complying with the
provisions of this Section 2.08, to issue and deliver from time to time Notes
secured by the Trust Estate on a parity with the Senior Notes, the Subordinate
Notes or the Junior-Subordinate Notes, if any, secured hereunder as shall be
determined by the Issuer. In addition, the Issuer may enter into any Derivative
Products it deems necessary or desirable with respect to any or all of the
Notes.
(b) No Notes shall be authenticated and delivered pursuant to this
Indenture until the following conditions have been satisfied:
(i) The Issuer and the Indenture Trustee have entered into a
Supplemental Indenture (which Supplemental Indenture shall not require the
approval of the Registered Owners of any of the Outstanding Notes or
Derivative Products) providing the terms and forms of the proposed Notes
as described in Section 2.01 hereof, including the designation of such
Notes as Senior Notes, Subordinate Notes or Junior-Subordinate Notes, the
redemption and selection provisions applicable to such Notes, and the
Reserve Fund Requirement with respect to such Notes, if any.
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(ii) The Indenture Trustee shall have received a Rating
Confirmation from each Rating Agency which has assigned a Rating or
Ratings to any Outstanding Notes that such Rating or Ratings will not be
reduced or withdrawn as a result of the issuance of the proposed Notes.
(iii) The Indenture Trustee shall have received an opinion of
Note Counsel to the effect that all of the foregoing conditions to the
issuance of the proposed Notes have been satisfied.
(iv) Upon the issuance of the proposed Notes, an amount equal to
the Reserve Fund Requirement with respect to such Notes, if any, shall be
deposited in the Reserve Fund.
(c) The Indenture Trustee is authorized to set up any additional
Funds or Accounts or Subaccounts under this Indenture which it deems necessary
or convenient in connection with the issuance and delivery of any Notes.
ARTICLE III
PARITY AND PRIORITY OF LIEN; OTHER OBLIGATIONS;
AND DERIVATIVE PRODUCTS
Section 3.01 Parity and Priority of Lien. The provisions, covenants
and agreements herein set forth to be performed by or on behalf of the Issuer
shall be for the equal benefit, protection and security of the Registered Owners
of any and all of the Obligations, all of which, regardless of the time or times
of their issuance or maturity, shall be of equal rank without preference,
priority or distinction of any of the Obligations over any other thereof, except
as expressly provided in this Indenture with respect to certain payment and
other priorities.
Section 3.02 Other Obligations.
(a) The Issuer reserves the right to issue other notes or
obligations which do not constitute or create a lien on the Trust Estate.
(b) The Issuer shall not commingle the Funds established by this
Indenture with funds, proceeds, or investment of funds relating to other issues
or series of notes heretofore or hereafter issued, except to the extent such
commingling is required by the Indenture Trustee for ease in administration of
its duties and responsibilities; provided, however, that should the Indenture
Trustee require such permitted commingling, it shall keep complete records in
order that the funds, proceeds, or investments under this Indenture may at all
times be identified by source and application, and if necessary, separated.
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(c) The revenues and other moneys, Financed Eligible Loans,
securities, evidences of indebtedness, interests, rights and properties pledged
under this Indenture are and will be owned by the Issuer (or the Eligible Lender
Trustee) free and clear of any pledge, lien, charge or encumbrance thereon or
with respect thereto prior to or of equal rank with the respective pledges
created by this Indenture, except as otherwise expressly provided herein, and
all action on the part of the Issuer to that end has been duly and validly
taken. If any Financed Eligible Loan is found to have been subject to a lien at
the time such Financed Eligible Loan was acquired, the Issuer shall cause such
lien to be released, shall purchase such Financed Eligible Loan from the Trust
Estate for a purchase price equal to its principal amount plus any unamortized
premium, if any, and interest accrued thereon or shall replace such Financed
Eligible Loan with another Eligible Loan with substantially identical
characteristics which replacement Eligible Loan shall be free and clear of liens
at the time of such replacement. Except as otherwise provided herein, the Issuer
shall not create or voluntarily permit to be created any debt, lien, or charge
on the Financed Eligible Loans which would be on a parity with or prior to the
lien of this Indenture; shall not do or omit to do or suffer to be done or
omitted to be done any matter of things whatsoever whereby the lien of this
Indenture or the priority of such lien for the Obligations hereby secured might
or could be lost or impaired; and will pay or cause to be paid or will make
adequate provisions for the satisfaction and discharge of all lawful claims and
demands which if unpaid might by law be given precedence to or any equality with
this Indenture as a lien or charge upon the Financed Eligible Loans; provided,
however, that nothing in this subsection (c) shall require the Issuer to pay,
discharge, or make provision for any such lien, charge, claim, or demand so long
as the validity thereof shall be by it in good faith contested, unless thereby,
in the opinion of the Indenture Trustee, the same will endanger the security for
the Obligations; and provided further that any subordinate lien hereon (i.e.,
subordinate to the lien securing the Senior Obligations, the Subordinate
Obligations and the Junior-Subordinate Obligations) shall be entitled to no
payment from the Trust Estate, nor may any remedy be exercised with respect to
such subordinate lien against the Trust Estate until all Obligations have been
paid or deemed paid hereunder.
Section 3.03 Derivative Products; Counterparty Derivative Payments;
Issuer Derivative Payments. The Issuer hereby authorizes and directs the
Indenture Trustee to acknowledge and agree to any Derivative Product hereafter
entered into by the Issuer and a Counterparty under which (a) the Issuer may be
required to make, from time to time, Issuer Derivative Payments and (b) the
Indenture Trustee may receive, from time to time, Counterparty Derivative
Payments for the account of the Issuer. No Derivative Product shall be entered
into unless (i) the Indenture Trustee shall have received a Rating Confirmation
from each Rating Agency that such Derivative Product will not adversely affect
the Rating on any of the Notes and (ii) all Issuer Derivative Payments and
Counterparty Derivative Payments are made on the third Business Day immediately
preceding a Note Payment Date. Anything in this Indenture to the contrary
notwithstanding, any Revenues representing Counterparty Derivative Payments
shall not be available to make an Issuer Derivative Payment or to pay any other
amounts owed to a Counterparty under a Derivative Product.
No later than the fourth Business Day immediately preceding each
Note Payment Date on which a Counterparty Derivative Payment or Issuer
Derivative Payment is due pursuant to the applicable Derivative Product through
and including the termination date of a Derivative Product, the Issuer shall
give written notice to the Indenture Trustee stating either (a) the amount of
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any Counterparty Derivative Payment due to be received by the Indenture Trustee
for the account of the Issuer on the third Business Day immediately preceding
such Note Payment Date or (b) the amount of any Issuer Derivative Payment to be
paid to the Counterparty on the third Business Day immediately preceding such
Note Payment Date. If the Indenture Trustee fails to receive such written
notification from the Issuer by the end of such fourth Business Day, it shall
immediately notify the Issuer of such fact in writing.
On the third Business Day immediately preceding each Note Payment
Date on which a Counterparty Derivative Payment is due pursuant to the
applicable Derivative Product in accordance with the written notification
received from the Issuer, the Indenture Trustee shall deposit all moneys
received representing such Counterparty Derivative Payment in the Revenue Fund
to be applied in accordance with the provisions of Section 5.03 hereof. The
Indenture Trustee shall notify the Issuer on such Business Day, if (a) the
amount received from the Counterparty is not equal to the amount specified in
the written notification of the Issuer, (b) no amount is received from the
Counterparty or (c) the amount received is not received in immediately available
funds.
On the third Business Day immediately preceding any Note Payment
Date with respect to which an Issuer Derivative Payment is due in accordance
with the written notification received from the Issuer or, with respect to a
payment in respect of an early termination date due pursuant to the terms of a
Derivative Product from the Issuer, the Indenture Trustee shall make payment to
the Counterparty from moneys in the Revenue Fund of the amount of the Issuer
Derivative Payment specified in such written notification of the Issuer, due on
such date by the deposit or wire transfer of immediately available funds to the
credit of the account of the Counterparty specified in such written notification
of the Issuer, but only to the extent such payment will not result in a
deficiency in the amount due on the next succeeding Note Payment Date to the
Registered Owners of any class of Obligations having a priority equal to or
higher than such Counterparty under such Derivative Product.
If any payment to such a Counterparty described in the paragraph
above would result in a deficiency in the amounts required to make payments to
the Registered Owners of the Obligations referred to in the paragraph above on
such Note Payment Date, then the Indenture Trustee shall delay the making of
such payment to the Counterparty until the first date on which no deficiency
would result from such payment.
ARTICLE IV
PROVISIONS APPLICABLE TO THE NOTES;
DUTIES OF THE ISSUER
Section 4.01 Payment of Principal, Interest and Premium. The Issuer
covenants that it will promptly pay, but solely from the Trust Estate, the
principal of and interest, if any, on each and every Obligation issued under the
provisions of this Indenture at the places, on the dates and in the manner
specified herein and in said Obligations and any premium required for the
retirement of said Obligations by purchase or redemption according to the true
intent and meaning thereof. The Obligations shall be and are hereby declared to
be payable from and equally secured by an irrevocable first lien on and pledge
of the properties constituting the Trust Estate, subject to the application
thereof as permitted by this Indenture, but in no event shall the Registered
Owners of any of the Obligations have any right to possession of any Financed
Eligible Loans, which shall be held only by the Indenture Trustee or its agent
or bailee.
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Section 4.02 Representations and Warranties of the Issuer. The
Issuer represents and warrants that it is duly authorized under the laws of
Delaware to create and issue the Notes and to execute and deliver this Indenture
and any Derivative Product and to make the pledge to the payment of Notes and
any Issuer Derivative Payments hereunder, that all necessary action on the part
of the Issuer for the creation and issuance of the Notes and the execution and
delivery of this Indenture and any Derivative Product has been duly and
effectively taken; and that the Notes in the hands of the Registered Owners
thereof and the Issuer Derivative Payments are and will be valid and enforceable
special limited obligations of the Issuer secured by and payable solely from the
Trust Estate.
Section 4.03 Covenants as to Additional Conveyances. At any and all
times, the Issuer will duly execute, acknowledge, and deliver, or will cause to
be done, executed, and delivered, all and every such further acts, conveyances,
transfers, and assurances in law as the Indenture Trustee shall reasonably
require for the better conveying, transferring, and pledging and confirming unto
the Indenture Trustee, all and singular, the properties constituting the Trust
Estate hereby transferred and pledged, or intended so to be transferred and
pledged.
Section 4.04 Further Covenants of the Issuer.
(a) The Issuer will cause financing statements and continuation
statements with respect thereto at all times to be filed in the office of the
Secretary of the State of Delaware and any other jurisdiction necessary to
perfect and maintain the security interest granted by the Issuer hereunder.
(b) The Issuer will duly and punctually keep, observe and perform
each and every term, covenant, and condition on its part to be kept, observed,
and performed, contained in this Indenture and the other agreements to which the
Issuer is a party pursuant to the transactions contemplated herein, and will
punctually perform all duties required by the Trust Agreement and the laws of
Delaware.
(c) The Issuer shall be operated on the basis of its Fiscal Year.
(d) The Issuer shall cause to be kept full and proper books of
records and accounts, in which full, true, and proper entries will be made of
all dealings, business, and affairs of the Issuer which relate to the Notes and
any Derivative Product.
(e) The Issuer, upon written request of the Indenture Trustee, will
permit at all reasonable times the Indenture Trustee or its agents, accountants,
and attorneys, to examine and inspect the property, books of account, records,
reports, and other data relating to the Financed Eligible Loans, and will
furnish the Indenture Trustee such other information as it may reasonably
request. The Indenture Trustee shall be under no duty to make any such
examination unless requested in writing to do so by the Registered Owners of 66%
in collective aggregate principal amount of the Notes at the time Outstanding,
and unless such Registered Owners shall have offered the Indenture Trustee
security and indemnity satisfactory to it against any costs, expenses and
liabilities which might be incurred thereby.
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(f) The Issuer shall cause an annual audit to be made by an
independent auditing firm of national reputation and file one copy thereof with
the Indenture Trustee and each Rating Agency within 150 days of the close of
each Fiscal Year. The Indenture Trustee shall be under no obligation to review
or otherwise analyze such audit.
(g) The Issuer covenants that all Financed Eligible Loans upon
receipt thereof shall be delivered to the Indenture Trustee or its agent or
bailee to be held pursuant to this Indenture and pursuant to the Servicing
Agreement or a custodian agreement.
(h) Notwithstanding anything to the contrary contained herein,
except upon the occurrence and during the continuance of an Event of Default
hereunder, the Issuer hereby expressly reserves and retains the privilege to
receive and, subject to the terms and provisions of this Indenture, to keep or
dispose of, claim, bring suits upon or otherwise exercise, enforce or realize
upon its rights and interest in and to the Financed Eligible Loans and the
proceeds and collections therefrom, and neither the Indenture Trustee nor any
Registered Owner shall in any manner be or be deemed to be an indispensable
party to the exercise of any such privilege, claim or suit and the Indenture
Trustee shall be under no obligation whatsoever to exercise any such privilege,
claim or suit; provided, however, that the Indenture Trustee shall have and
retain possession of the Financed Eligible Loans pursuant to Section 5.02 hereof
(which Financed Eligible Loans may be held by the Indenture Trustee's agent or
bailee) so long as such loans are subject to the lien of this Indenture.
(i) The Issuer shall notify the Indenture Trustee and each Rating
Agency in writing prior to entering into any Derivative Product and shall not
enter into any Derivative Product unless the Indenture Trustee has received a
Rating Confirmation.
Section 4.05 Enforcement of the Servicing Agreement. Regardless of
whether the Issuer is otherwise in default under this Indenture, the Issuer
shall comply with and shall require the Servicer to comply with the following:
(a) diligently enforce and take all reasonable steps, actions and
proceedings necessary for the enforcement of all terms, covenants and conditions
of the Servicing Agreement, including the prompt payment of all amounts due the
Issuer thereunder, including without limitation all principal and interest
payments, and Guarantee payments which relate to any Financed Eligible Loans and
cause the Servicer to specify whether payments received by it represent
principal or interest;
(b) not permit the release of the obligations of the Servicer under
the Servicing Agreement except in conjunction with amendments or modifications
permitted by (g) below;
(c) at all times, to the extent permitted by law, cause to be
defended, enforced, preserved and protected the rights and privileges of the
Issuer and of the Registered Owners under or with respect to the Servicing
Agreement;
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(d) at its own expense, the Issuer shall duly and punctually perform
and observe each of its obligations to the Servicer under the Servicing
Agreement in accordance with the terms thereof;
(e) the Issuer agrees to give the Indenture Trustee prompt written
notice of each default on the part of the Servicer of its obligations under the
Servicing Agreement coming to the Issuer's attention;
(f) the Issuer shall not waive any default by the Servicer under the
Servicing Agreement without the written consent of the Indenture Trustee; and
(g) not consent or agree to or permit any amendment or modification
of the Servicing Agreement which will in any manner materially adversely affect
the rights or security of the Registered Owners. The Issuer shall be entitled to
receive and rely upon an opinion of its counsel that any such amendment or
modification will not materially adversely affect the rights or security of the
Registered Owners.
Section 4.06 Procedures for Transfer of Funds. In any instance where
this Indenture requires a transfer of funds or money from one Fund to another, a
transfer of ownership in investments or an undivided interest therein may be
made in any manner agreeable to the Issuer and the Indenture Trustee, and in the
calculation of the amount transferred, interest on the investment which has or
will accrue before the date the money is needed in the fund to which the
transfer is made shall not be taken into account or considered as money on hand
at the time of such transfer.
Section 4.07 Additional Covenants with Respect to the Act. The
Issuer covenants that it will cause the Indenture Trustee to be, or replace the
Indenture Trustee with, an Eligible Lender under the Act, that it will acquire
or cause to be acquired Eligible Loans originated and held only by an Eligible
Lender and that it will not dispose of or deliver any Financed Eligible Loans or
any security interest in any such Financed Eligible Loans to any party who is
not an Eligible Lender so long as the Act or Regulations adopted thereunder
require an Eligible Lender to be the owner or holder of Guaranteed Eligible
Loans; provided, however, that nothing above shall prevent the Issuer from
delivering the Eligible Loans to the Servicer or the Guarantee Agency. The
Registered Owners of the Notes shall not in any circumstances be deemed to be
the owner or holder of the Guaranteed Eligible Loans.
The Issuer, or its designated agent, shall be responsible for each
of the following actions with respect to the Act:
(a) the Issuer, or its designated agent, shall be responsible for
dealing with the Secretary with respect to the rights, benefits and obligations
under the Certificates of Insurance and the Contract of Insurance, and the
Issuer shall be responsible for dealing with the Guarantee Agencies with respect
to the rights, benefits and obligations under the Guarantee Agreements with
respect to the Financed Eligible Loans;
(b) the Issuer, or its designated agent, shall cause to be
diligently enforced, and shall cause to be taken all reasonable steps, actions
and proceedings necessary or appropriate for the enforcement of all terms,
covenants and conditions of all Financed Eligible Loans and agreements in
connection therewith, including the prompt payment of all principal and interest
payments and all other amounts due thereunder;
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(c) the Issuer, or its designated agent, shall cause the Financed
Eligible loans to be serviced by entering into the Servicing Agreement or other
agreement with the Servicer for the collection of payments made for, and the
administration of the accounts of, the Financed Eligible Loans;
(d) the Issuer, or its designated agent, shall comply, and shall
cause all of its officers, directors, employees and agents to comply, with the
provisions of the Act and any regulations or rulings thereunder, with respect to
the Financed Eligible Loans; and
(e) the Issuer, or its designated agent, shall cause the benefits of
the Guarantee Agreements, the Interest Subsidy Payments and the Special
Allowance Payments to flow to the Indenture Trustee. The Indenture Trustee shall
have no liability for actions taken at the direction of the Issuer, except for
negligence or willful misconduct in the performance of its express duties
hereunder. The Indenture Trustee shall have no obligation to administer, service
or collect the loans in the Trust Estate or to maintain or monitor the
administration, servicing or collection of such loans.
The Indenture Trustee shall not be deemed to be the designated agent
for the purposes of this Section 4.07 unless it has agreed in writing to be such
agent.
Section 4.08 Financed Eligible Loans; Collections Thereof;
Assignment Thereof. The Issuer, through the Servicer, shall diligently collect
all principal and interest payments on all Financed Eligible Loans, and all
Interest Benefit Payments, insurance, guarantee and default claims and Special
Allowance Payments which relate to such Financed Eligible Loans. The Issuer
shall cause the filing and assignment of such claims (prior to the timely filing
deadline for such claims under the Regulations) by the Servicer. The Issuer will
comply with the Act and Regulations which apply to the Program and to such
Financed Eligible Loans.
Section 4.09 Appointment of Agents, Etc. The Issuer shall employ and
appoint all employees, agents, consultants and attorneys which it may consider
necessary.
Section 4.10 Capacity to Sue. The Issuer shall have the power and
capacity to sue and to be sued on matters arising out of or relating to the
financing of the Financed Eligible Loans.
Section 4.11 Continued Existence; Successor to Issuer. The Issuer
agrees that it will do or cause to be done all things necessary to preserve and
keep in full force and effect its existence, rights and franchises as a Delaware
business trust, except as otherwise permitted by this Section 4.11. The Issuer
further agrees that it will not (a) sell, transfer or otherwise dispose of all
or substantially all, of its assets (except Financed Eligible Loans if such
sale, transfer or disposition will discharge this Indenture in accordance with
Article X hereof); (b) consolidate with or merge into another entity; or (c)
permit one or more other corporations or entities to consolidate with or merge
into it. The preceding restrictions in (a), (b) and (c) shall not apply to a
transaction if the transferee or the surviving or resulting corporation or
entity, if other than the Issuer, by proper written instrument for the benefit
of the Indenture Trustee, irrevocably and unconditionally assumes the obligation
to perform and observe the agreements and obligations of the Issuer under this
Indenture.
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If a transfer is made as provided in this Section 4.11, the
provisions of this Section 4.11 shall continue in full force and effect and no
further transfer shall be made except in compliance with the provisions of this
Section 4.11.
Section 4.12 Amendment of Student Loan Transfer Agreements. The
Issuer shall notify the Indenture Trustee in writing of any proposed amendments
to any existing Student Loan Transfer Agreement. No such amendment shall become
effective unless and until the Indenture Trustee consents thereto in writing.
The consent of the Indenture Trustee shall not be unreasonably withheld and
shall not be withheld if the Indenture Trustee receives an opinion of counsel
acceptable to them that such an amendment is required by the Act and is not
materially prejudicial to the Registered Owners. Notwithstanding the foregoing,
however, the Indenture Trustee shall consent to an amendment from time to time
so long as it is not materially prejudicial to the interests of the Registered
Owners, and the Indenture Trustee may rely on an opinion of counsel to such
effect.
Section 4.13 Representations; Negative Covenants.
(a) The Issuer hereby makes the following representations and
warranties to the Indenture Trustee on which the Indenture Trustee relies in
authenticating the Notes and on which the Registered Owners of the Notes have
relied in purchasing the Notes. Such representations and warranties shall
survive the grant of the Trust Estate to the Indenture Trustee pursuant to this
Indenture.
(i) Organization and Good Standing. The Issuer is duly organized
and validly existing under the laws of Delaware, and has the power to own
its assets and to transact the business in which it presently engages.
(ii) Due Qualification. The Issuer is duly qualified to do
business and is in good standing, and has obtained all material necessary
licenses and approvals, in all jurisdictions where the failure to be so
qualified, have such good standing or have such licenses or approvals
would have a material adverse effect on the Issuer's business and
operations or in which the actions as required by this Indenture require
or will require such qualification.
(iii) Authorization. The Issuer has the power, authority and
legal right to execute, deliver and perform this Indenture and to grant
the Trust Estate to the Indenture Trustee and the execution, delivery and
performance of this Indenture and grant of the Trust Estate to the
Indenture Trustee have been duly authorized by the Issuer.
(iv) Binding Obligation. This Indenture, assuming due
authorization, execution and delivery by the Indenture Trustee,
constitutes a legal, valid and binding obligation of the Issuer
enforceable against the Issuer in accordance with its terms, except that
(A) such enforcement may be subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws (whether statutory,
regulatory or decisional) now or hereafter in effect relating to
creditors' rights generally and (B) the remedy of specific performance and
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injunctive and other forms of equitable relief may be subject to certain
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought, whether a proceeding at law or in
equity.
(v) No Violation. The consummation of the transactions
contemplated by this Indenture and the fulfillment of the terms hereof
does not conflict with, result in any breach of any of the terms and
provisions of or constitute (with or without notice, lapse of time or
both) a default under the organizational documents of the Issuer, or any
material indenture, agreement, mortgage, deed of trust or other instrument
to which the Issuer is a party or by which it is bound, or result in the
creation or imposition of any lien upon any of its material properties
pursuant to the terms of any such indenture, agreement, mortgage, deed of
trust or other instrument, other than this Indenture, nor violate any law
or any order, rule or regulation applicable to the Issuer of any court or
of any federal or state regulatory body, administrative agency, or other
governmental instrumentality having jurisdiction over the Issuer or any of
its properties.
(vi) No Proceedings. There are no proceedings, injunctions,
writs, restraining orders or investigations to which the Issuer or any of
such entity's affiliates is a party pending, or, to the best of such
entity's knowledge, threatened, before any court, regulatory body,
administrative agency, or other tribunal or governmental instrumentality
(A) asserting the invalidity of this Indenture, (B) seeking to prevent the
issuance of any Notes or the consummation of any of the transactions
contemplated by this Indenture or (C) seeking any determination or ruling
that might materially and adversely affect the performance by the Issuer
of its obligations under, or the validity or enforceability of this
Indenture.
(vii) Approvals. All approvals, authorizations, consents, orders
or other actions of any person, corporation or other organization, or of
any court, governmental agency or body or official, required on the part
of the Issuer in connection with the execution and delivery of this
Indenture have been taken or obtained on or prior to the Date of Issuance.
(viii) Place of Business. The Issuer's place of business and
office is located at [________].
(ix) Tax and Accounting Treatment. The Issuer intends to treat
the transactions contemplated by the Student Loan Transfer Agreements as
an absolute transfer rather than as a pledge of the Financed Eligible
Loans from the Depositor for federal income tax and financial accounting
purposes and the Issuer will be treated as the owner of the Financed
Eligible Loans for all purposes. The Issuer further intends to treat the
Senior Notes as its indebtedness for federal income tax and financial
accounting purposes.
(x) Taxes. The Issuer has filed (or caused to be filed) all
federal, state, county, local and foreign income, franchise and other tax
returns required to be filed by it through the date hereof, and has paid
all taxes reflected as due thereon. The Issuer has taken all steps
necessary to ensure that it is eligible to file a consolidated federal
income tax return with National Education Loan Network, Inc. and such
returns will be filed for all taxable years in which the Notes are
Outstanding. There is no pending dispute with any taxing authority that,
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if determined adversely to the Issuer, would result in the assertion by
any taxing authority of any material tax deficiency, and the Issuer has no
knowledge of a proposed liability for any tax year to be imposed upon such
entity's properties or assets for which there is not an adequate reserve
reflected in such entity's current financial statements.
(xi) Legal Name. The legal name of the Issuer is "SLC Student
Loan Trust-I" and has not changed since its inception. The Issuer has no
tradenames, fictitious names, assumed names or "dba's" under which it
conducts its business and has made no filing in respect of any such name.
(xii) Business Purpose. The Issuer has acquired the Financed
Eligible Loans conveyed to it under a Student Loan Transfer Agreement for
a bona fide business purpose and has undertaken the transactions
contemplated herein as principal rather than as an agent of any other
person. The Issuer has adopted and operated consistently with all
formalities with respect to its operations and has engaged in no other
activities other than those specified in this Indenture and the Student
Loan Transfer Agreements and in accordance with the transactions
contemplated herein and therein.
(xiii) With Laws. The Issuer is in compliance with all applicable
laws and regulations with respect to the conduct of its business and has
obtained and maintains all permits, licenses and other approvals as are
necessary for the conduct of its operations.
(xiv) Valid Business Reasons; No Fraudulent Transfers. The
transactions contemplated by this Indenture are in the ordinary course of
the Issuer's business and the Issuer has valid business reasons for
granting the Trust Estate pursuant to this Indenture. At the time of each
such grant: (A) the Issuer granted the Trust Estate to the Indenture
Trustee without any intent to hinder, delay, or defraud any current or
future creditor of the Issuer; (B) the Issuer was not insolvent and did
not become insolvent as a result of any such grant; (C) the Issuer was not
engaged and was not about to engage in any business or transaction for
which any property remaining with such entity was an unreasonably small
capital or for which the remaining assets of such entity are unreasonably
small in relation to the business of such entity or the transaction; (D)
the Issuer did not intend to incur, and did not believe or should not have
reasonably believed, that it would incur, debts beyond its ability to pay
as they become due; and (E) the consideration received by the Issuer for
the grant of the Trust Estate was reasonably equivalent to the value of
the related grant.
(xv) No Management of Affairs of Depositor. The Issuer is not and
will not be involved in the day-to-day management of the Depositor.
(xvi) Ability to Perform. There has been no material impairment
in the ability of the Issuer to perform its obligations under this
Indenture.
(xvii) Financial Condition. No material adverse change has
occurred in the Issuer's financial status since the date of its formation.
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(xviii) Event of Default. No Event of Default has occurred and no
event has occurred that, with the giving of notice, the passage of time,
or both, would become an Event of Default.
(xix) Acquisition of Financed Eligible Loans Legal. The Issuer
has complied with all applicable federal, state and local laws and
regulations in connection with its acquisition of the Financed Eligible
Loans from the Depositor.
(xx) No Material Misstatements or Omissions. No information,
certificate of an officer, statement furnished in writing or report
delivered to the Indenture Trustee, the Servicer or any Registered Owner
by the Issuer contains any untrue statement of a material fact or omits a
material fact necessary to make such information, certificate, statement
or report not misleading.
(b) The Issuer will not:
(i) sell, transfer, exchange or otherwise dispose of any
portion of the Trust Estate except as expressly permitted by this
Indenture;
(ii) claim any credit on, or make any deduction from, the
principal amount of any of the Notes by reason of the payment of any taxes
levied or assessed upon any portion of the Trust Estate;
(iii) except as otherwise provided herein, dissolve or liquidate
in whole or in part, except with the prior written consent of the
Indenture Trustee, and to the extent Notes remain Outstanding, approval of
the Registered Owners of the Notes and a Rating Confirmation;
(iv) permit the validity or effectiveness of this Indenture, any
Supplement or any grant hereunder to be impaired, or permit the lien of
this Indenture to be amended, hypothecated, subordinated, terminated or
discharged, or permit any Person to be released from any covenants or
obligations under this Indenture, except as may be expressly permitted
hereby;
(v) except as otherwise provided herein, permit any lien,
charge, 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 Trust Estate or any part thereof or any interest
therein or the proceeds thereof;
(vi) permit the lien of this Indenture not to constitute a
valid first priority, perfected security interest in the Trust Estate;
(vii) incur or assume any indebtedness or guarantee any
indebtedness of any Person whether secured by any Financed Eligible Loans
under this Indenture or otherwise, except for such obligations as may be
incurred by the Issuer in connection with the issuance of the Notes
pursuant to this Indenture and unsecured trade payables in the ordinary
course of its business;
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(viii) operate such that it would be consolidated with any
affiliate and its separate existence disregarded in any federal or state
proceeding
(ix) act as agent of the Depositor or allow the Depositor to act
as its agent;
(x) allow the Depositor or any other affiliate to pay its
expenses, guarantee its obligations or advance funds to it for payment of
expenses; or
(xi) consent to the appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of debt, marshalling of assets
and liabilities or similar proceedings of or relating to the Issuer or of
or relating to all or substantially all of its property, or a decree or
order of a court or agency or supervisory authority having jurisdiction in
the premises for the appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of debt, marshalling of assets
and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the Issuer; or
the Issuer shall not consent to the appointment of a receiver, conservator
or liquidator in any insolvency, readjustment of debt, marshalling of
assets and liabilities, voluntary liquidation or similar proceedings of or
relating to the Issuer or of or relating to all or substantially all of
its property; or admit in writing its inability to pay its debts generally
as they become due, file a petition to take advantage of any applicable
insolvency, bankruptcy or reorganization statute, make an assignment for
the benefit of its creditors or voluntarily suspend payment of its
obligations.
(c) The Issuer makes the following representations and warranties as
to the Trust Estate which is granted to the Indenture Trustee hereunder on which
the Indenture Trustee relies in accepting the Trust Estate. Such representations
and warranties shall survive the grant of the Trust Estate to the Indenture
Trustee pursuant to this Indenture.
(i) Financed Eligible Loans. Each Financed Eligible Loan acquired
by the Issuer shall constitute an Eligible Loan and contain the
characteristics found in a Student Loan Transfer Agreement.
Notwithstanding the definition of "Eligible Loans" herein, the Issuer
covenants not to acquire Eligible Loan delinquent by more than 91 days. In
addition, the Issuer covenants that no more than [20]% of each purchase of
Eligible Loans will be made up of Eligible Loans delinquent by more than
30 days.
(ii) Schedule of Financed Eligible Loans. The information set
forth in each Schedule of Financed Eligible Loans is true and correct in
all material respects as of the opening of business on the Date of
Issuance.
(iii) Grant. It is the intention of the Issuer that the transfer
herein contemplated constitutes a grant of the Financed Eligible Loans to
the Indenture Trustee.
(iv) All Filings Made. All filings (including, without
limitation, UCC filings) necessary in any jurisdiction to give the
Indenture Trustee a first priority perfected ownership and security
interest in the Trust Estate, including the Financed Eligible Loans, have
been made no later than the Date of Issuance and copies of the
file-stamped financing statements shall be delivered to the Indenture
Trustee within five Business Days of receipt by the Issuer or its agent
from the appropriate secretary of state. The Issuer has not caused,
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suffered or permitted any lien, pledges, offsets, defenses, claims,
counterclaims, charges or security interest with respect to the promissory
notes relating to the Financed Eligible Loans (other than the security
interest created in favor of the Indenture Trustee) to be created.
(v) Transfer Not Subject to Bulk Transfer Act. Each grant of the
Financed Eligible Loans by the Issuer pursuant to this Indenture is not
subject to the bulk transfer act or any similar statutory provisions in
effect in any applicable jurisdiction.
(vi) No Transfer Taxes Due. Each grant of the Financed Eligible
Loans (including all payments due or to become due thereunder) by the
Issuer pursuant to this Indenture is not subject to and will not result in
any tax, fee or governmental charge payable by the Issuer or the Depositor
to any federal, state or local government.
Section 4.14 Additional Covenants. So long as any of the Notes are
Outstanding:
(a) The Issuer shall not engage in any business or activity other
than in connection with the activities contemplated hereby and in the Student
Loan Transfer Agreements, and in connection with the issuance of Notes.
(b) The Issuer shall not consolidate or merge with or into any other
entity or convey or transfer its properties and assets substantially as an
entirety to any entity except as otherwise provided herein.
(c) The funds and other assets of the Issuer shall not be commingled
with those of any other individual, corporation, estate, partnership, joint
venture, association, joint stock company, trust, unincorporated organization,
or government or any agency or political subdivision thereof.
(d) The Issuer shall not be, become or hold itself out as being
liable for the debts of any other party.
(e) The Issuer shall act solely in its own name and through its duly
Authorized Officers in the conduct of its business, and shall conduct its
business so as not to mislead others as to the identity of the entity with which
they are concerned.
(f) The Issuer shall maintain its records and books of account and
shall not commingle its records and books of account with the records and books
of account of any other Person. The books of the Issuer may be kept (subject to
any provision contained in the statutes) inside or outside of Delaware at such
place or places as may be designated from time to time by the Issuer.
(g) All actions of the Issuer shall be taken by a duly Authorized
Officer or agent of the Issuer.
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(h) The Issuer shall not amend, alter, change or repeal any
provision contained in this Section 4.14 without (i) the prior written consent
of the Indenture Trustee and (ii) a Rating Confirmation (a copy of which shall
be provided to the Indenture Trustee).
(i) The Issuer shall not amend the Trust Agreement without first
obtaining the prior written consent of each Rating Agency.
(j) All audited financial statements of the Issuer that are
consolidated with those of any affiliate thereof will contain detailed notes
clearly stating that (i) all of the Issuer's assets are owned by the Issuer, and
(ii) the Issuer is a separate entity with creditors who have received ownership
and/or security interests in the Issuer's assets.
(k) The Issuer will strictly observe legal formalities in its
dealings with the Depositor or any affiliate thereof, and funds or other assets
of the Issuer will not be commingled with those of the Depositor or any other
affiliate thereof. The Issuer shall not maintain joint bank accounts or other
depository accounts to which the Depositor or any other affiliate has
independent access. None of the Issuer's funds will at any time be pooled with
any funds of the Depositor or any other affiliate.
(l) The Issuer will maintain an arm's length relationship with the
Depositor (and any affiliate). Any Person that renders or otherwise furnishes
services to the Issuer will be compensated by the Issuer at market rates for
such services it renders or otherwise furnishes to the Issuer except as
otherwise provided in this Indenture. Except as contemplated in this Indenture
or, the Student Loan Transfer Agreements, the Issuer will not hold itself out to
be responsible for the debts of the Depositor or the decisions or actions
respecting the daily business and affairs of the Depositor.
Section 4.15 Providing of Notice. The Issuer, upon learning of any
failure on its part to observe or perform in any material respect any covenant,
representation or warranty of the Issuer set forth in this Indenture or the
Student Loan Transfer Agreements, or of any failure on the part of the Depositor
to observe or perform in any material respect any covenant, representation or
warranty of the Depositor set forth in the Student Loan Transfer Agreements,
shall promptly notify the Indenture Trustee, the Servicer and each Rating Agency
of such failure.
Section 4.16 Reports by Issuer. The Issuer will:
(a) file with the Indenture Trustee, within 15 days after the Issuer
is required to file the same with the Commission, copies of the annual reports
and of the information, documents and other reports (or copies of such portions
of any of the foregoing as the Commission may from time to time by rules and
regulations prescribe) which the Issuer may be required to file with the
Commission pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act;
(b) file with the Indenture Trustee and the Commission, in
accordance with rules and regulations prescribed from time to time by the
Commission, such additional information, documents and reports with respect to
compliance by the Issuer with the conditions and covenants of this Indenture as
may be required from time to time by such rules and regulations; and
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(c) transmit by mail to the Registered Owners of Notes, within 30
days after the filing thereof with the Indenture Trustee, in the manner and to
the extent provided in TIA Section 313(c), such summaries of any information,
documents and reports required to be filed by the Issuer pursuant to clauses (a)
and (b) of this Section 4.16 as may be required by rules and regulations
prescribed from time to time by the Commission.
Section 4.17 Statement as to Compliance. The Issuer will deliver to
the Indenture Trustee, within 120 days after the end of each fiscal year, a
brief certificate from an Authorized Officer as to his or her knowledge of the
Issuer's compliance with all conditions and covenants under this Indenture and,
in the event of any noncompliance, specifying such noncompliance and the nature
and status thereof. For purposes of this Section 4.17, such compliance shall be
determined without regard to any period of grace or requirement of notice under
this Indenture.
Section 4.18 Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee. The Issuer covenants that if:
(a) default is made in the payment of any installment of interest,
if any, on any Notes when such interest becomes due and payable and such default
continues for a period of 30 days; or
(b) default is made in the payment of the principal of (or premium,
if any, on) any Notes at their Maturity, then the Issuer will, upon demand of
the Indenture Trustee, pay to the Indenture Trustee, for the benefit of the
Registered Owners of the Notes, the whole amount then due and payable on such
Notes for principal (and premium, if any) and interest, with interest upon any
overdue principal (and premium, if any) and, to the extent that payment of such
interest shall be legally enforceable, upon any overdue installments of
interest, if any, at the rate or rates borne by or provided for in such Notes,
and, in addition thereto, such further amount as shall be sufficient to cover
the costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Indenture Trustee and its agents and
counsel.
If the Issuer fails to pay such amounts forthwith upon such demand,
the Indenture Trustee, in its own name and as Indenture Trustee of an express
trust, may institute a judicial proceeding for the collection of the sums so due
and unpaid, may prosecute such proceeding to judgment or final decree, and may
enforce the same against the Issuer or any other obligor upon such Notes of such
series and collect the moneys adjudged or decreed to be payable in the manner
provided by law out of the property of the Issuer or any other obligor upon such
Notes, wherever situated.
If an Event of Default with respect to Notes occurs and is
continuing, the Indenture Trustee may, after being indemnified to its
satisfaction and in its discretion, proceed to protect and enforce its rights
and the rights of the Registered Owners of Notes and any related coupons by such
appropriate judicial proceedings as the Indenture Trustee shall deem most
effectual 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.
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ARTICLE V
FUNDS
Section 5.01 Creation and Continuation of Funds and Accounts.
(a) There are hereby created and established the following Funds to
be held and maintained by the Indenture Trustee for the benefit of the
Registered Owners:
(i) Acquisition Fund;
(ii) Revenue Fund; and
(iii) Reserve Fund.
(b) The Operating Fund has previously been established by the
Issuer, is hereby continued, does not constitute a Fund within the meaning of
this Indenture, and is held by a depository bank of the Issuer for the benefit
of the Issuer; and the Registered Owners shall have no right, title or interest
therein.
The Indenture Trustee is hereby authorized for the purpose of
facilitating the administration of the Trust Estate and for the administration
of any Notes issued hereunder to create further Accounts or Subaccounts in any
of the various Funds and Accounts established hereunder which are deemed
necessary or desirable.
Section 5.02 Acquisition Fund. There shall be deposited into the
Acquisition Fund moneys from proceeds of any Notes and moneys transferred
thereto from the Revenue Fund pursuant to Section 5.03(c) hereof. Financed
Eligible Loans shall be held by the Indenture Trustee or its agent or bailee
(including the Servicer) and shall be pledged to the Trust Estate and accounted
for as a part of the Acquisition Fund.
Moneys on deposit in the Acquisition Fund shall be used, upon Issuer
Order, solely to pay costs of issuance of the Notes, to redeem Notes in
accordance with the provisions of any Supplemental Indenture, and, upon receipt
by the Indenture Trustee of an Eligible Loan Acquisition Certificate, to acquire
Eligible Loans at a price which would permit the results of cash flow analyses
provided to each Rating Agency on any Date of Issuance to be sustained as
certified to the Indenture Trustee on the Eligible Loan Acquisition Certificate;
provided that such price may be increased if Rating Confirmation is obtained,
based on new cash flow analyses containing such assumptions as the Issuer shall
reasonably determine. Any such Issuer Order or Eligible Loan Acquisition
Certificate shall state that such proposed use of moneys in the Acquisition Fund
is in compliance with the provisions of this Indenture. If the Issuer determines
that all or any portion of such moneys cannot be so used, then an Authorized
Officer of the Issuer may, by Issuer Order, direct the Indenture Trustee to
redeem Notes in accordance with any Supplemental Indenture.
Notwithstanding the foregoing, if on any Note Payment Date there are
not sufficient moneys on deposit in the Revenue Fund to make the transfers
required by Section 5.03(d)(i) through (vii) hereof, then, an amount equal to
any such deficiency may, upon Issuer Order, be transferred directly from the
Acquisition Fund.
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While the Issuer will be the beneficial owner of the Financed
Eligible Loans and the Registered Owners will have a security interest therein,
it is understood and agreed that the Eligible Lender Trustee will be the legal
owner thereof and the Indenture Trustee will have a security interest in the
Financed Eligible Loans for and on behalf of the Registered Owners. The notes
representing the Financed Eligible Loans will be held in the name of the
Eligible Lender Trustee for the account of the Issuer, for the benefit of the
Registered Owners.
Section 5.03 Revenue Fund.
(a) The Indenture Trustee shall deposit into the Revenue Fund all
Revenues derived from Financed Eligible Loans acquired by the Issuer, and all
other Revenue derived from moneys or assets on deposit in the Acquisition Fund
and the Reserve Fund, all Counterparty Derivative Payments and any other amounts
deposited thereto upon receipt of an Issuer Order.
(b) Upon receipt of an Issuer Order directing the same, moneys in
the Revenue Fund shall be used, on any date, to make a transfer to the Operating
Fund, subject to Section 5.05 hereof.
(c) All Recoveries of Principal constituting a portion of the
Revenue deposited in the Revenue Fund and so identified to the Indenture
Trustee, shall be transferred, as soon as practicable, to the Acquisition Fund.
(d) In addition, on each Note Payment Date and Derivative Payment
Date, money in the Revenue Fund shall be used and transferred to other funds or
Persons in the following order of precedence (any money not so transferred or
paid to remain in the Revenue Fund until subsequently applied pursuant to this
Section 5.03(d)):
(i) on a parity basis, to pay interest due on any Senior Notes on
such Note Payment Date and any Issuer Derivative Payment secured on a
parity with the Senior Notes due on such Derivative Payment Date;
(ii) on a parity basis, to pay the principal of or premium, if
any, on any Senior Notes due on such Note Payment Date (if such Note
Payment Date is a Stated Maturity or mandatory sinking fund redemption
date with respect to such Senior Notes);
(iii) on a parity basis, to pay interest due on any Subordinate
Notes on such Note Payment Date and any Issuer Derivative Payment secured
on a parity with the Subordinate Notes due on such Derivative Payment
Date;
(iv) on a parity basis, to pay the principal of or premium, if
any, on any Subordinate Notes due on such Note Payment Date (if such Note
Payment Date is a Stated Maturity or mandatory sinking fund redemption
date with respect to such Subordinate Notes);
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(v) on a parity basis, to pay interest on Junior-Subordinate
Notes on such Note Payment Date and to make any Issuer Derivative Payment
secured on a parity with such Junior-Subordinate Notes due on such
Derivative Payment Date;
(vi) on a parity basis, to pay the principal of or premium, if
any, on any Junior-Subordinate Notes due on such Note Payment Date (if
such Note Payment Date is a Stated Maturity or mandatory sinking fund
redemption date with respect to such Junior-Subordinate Notes);
(vii) to the Reserve Fund the amount, if any, required by Section
5.04(b) hereof;
(viii) at the option of the Issuer and upon Issuer Order, to the
Acquisition Fund; and
(ix) at the option of the Issuer and upon Issuer Order, to the
Issuer to the extent permitted by Section 5.06 hereof.
Section 5.04 Reserve Fund.
(a) The Indenture Trustee shall deposit to the Reserve Fund the
amount, if any, specified in each Supplemental Indenture. On each Note Payment
Date, to the extent there are insufficient moneys in the Revenue Fund to make
the transfers required by Sections 5.03(d)(i) through (vi) hereof, then, the
amount of such deficiency shall be paid directly from the Reserve Fund if such
deficiency has not been paid from the Acquisition Fund.
(b) If the Reserve Fund is used for the purposes described in
Section 5.04(a) hereof, the Indenture Trustee shall restore the Reserve Fund to
the Reserve Fund Requirement with respect thereto by transfers from the Revenue
Fund on the next Note Payment Date pursuant to Section 5.03(d)(vii) hereof or
from the Acquisition Fund pursuant to Section 5.02 hereof. If the full amount
required to restore the Reserve Fund to the applicable Reserve Fund Requirement
is not available in the Revenue Fund on such next succeeding Note Payment Date,
the Indenture Trustee shall continue to transfer funds from the Revenue Fund as
they become available and in accordance with Section 5.03(d)(vii) hereof until
the deficiency in the Reserve Fund has been eliminated.
(c) On any day that the amount in the Reserve Fund exceeds the
Reserve Fund Requirement with respect thereto for any reason, the Indenture
Trustee, at the direction of the Issuer, shall transfer the excess to the
Acquisition Fund.
Section 5.05 Operating Fund. The Indenture Trustee shall deposit to
the Operating Fund or transfer to the Issuer's depository bank if not the
Indenture Trustee, the amount, if any, specified in each Supplemental Indenture.
The Operating Fund is a special fund created with a depository bank of the
Issuer and shall be used to pay Program Expenses. The Operating Fund shall be
held by such depository bank of the Issuer, and no Registered Owner shall have
any right, title or interest in the Operating Fund. Amounts deposited in the
Operating Fund shall be used to pay Program Expenses.
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The amount deposited in the Operating Fund by transfer from the
Revenue Fund and, if necessary, from the Acquisition Fund, and the schedule of
deposits shall be determined by the Issuer, but the amount so transferred in any
one Fiscal Year shall not exceed the amount budgeted by the Issuer as Program
Expenses for such Fiscal Year with respect to the Notes and as may be limited by
a Supplemental Indenture, and shall not exceed the amount designated therefor in
the cash flows provided to each Rating Agency on each Date of Issuance, unless
the Issuer, after furnishing each Rating Agency with revised cash flows, shall
have received a Rating Confirmation. The Issuer shall provide the Indenture
Trustee with an Issuer Order from time to time as to the amount to be
transferred.
At any time in order to meet expenses which have been incorporated
in an amended budget, the Issuer may requisition from the Indenture Trustee the
amount which it is anticipated will be required to pay the Program Expenses not
in excess of the amount budgeted with respect to the Notes for the period to the
next deposit into the Operating Fund. The requisition, in the form of an Issuer
Order, shall include a statement that the amount requisitioned, when combined
with the amount requisitioned previously in the Fiscal Year, does not exceed the
amount currently budgeted for that year as Program Expenses or as may be further
limited by a Supplemental Indenture.
Upon the receipt of such requisition, the Indenture Trustee shall
withdraw the amount requisitioned from the Revenue Fund, and if necessary, from
the Acquisition Fund (or so much thereof as is then on deposit in such Funds)
and transfer the same into the Operating Fund. The Issuer may request that the
Indenture Trustee pay the requisitioned amount in installments as specified by
the Issuer. In the event there is not sufficient money on hand in the Revenue
Fund and the Acquisition Fund to transfer the full amount requisitioned, the
Indenture Trustee shall notify the Issuer and the Issuer shall then determine
the amount to be transferred.
Section 5.06 Transfers to Issuer. Transfers from the Revenue Fund to
the Issuer may be made in accordance with Section 5.03(d)(ix) hereof; provided,
however, that no transfer of assets to the Issuer (other than pursuant to the
Operating Fund as otherwise permitted in Article V of the Indenture) shall be
made if there is not on deposit in the Reserve Fund an amount equal to at least
the Reserve Fund Requirement; and further provided, that no transfer shall be
made to the Issuer unless immediately after taking into account any such
transfer, the Aggregate Market Value of the assets in the Trust Estate will be
equal to at least [___]% of the unpaid principal amount of the Senior Notes
Outstanding and [___]% of all Senior and Subordinate Notes Outstanding, or such
lesser percentages as are acceptable to each Rating Agency then rating the
Notes, as evidenced by a Rating Confirmation.
The amounts so transferred to the Issuer may be used for any proper
purpose of the Issuer and investment earnings thereon shall be the property of
the Issuer.
Section 5.07 Investment of Funds Held by Indenture Trustee. The
Indenture Trustee shall invest money held for the credit of any Fund or Account
or Subaccount held by the Indenture Trustee hereunder as directed in writing (or
orally, confirmed in writing) by an Authorized Officer of the Issuer, to the
fullest extent practicable and reasonable, in Investment Securities which shall
mature or be redeemed at the option of the holder prior to the respective dates
when the money held for the credit of such Fund or Account will be required for
the purposes intended. In the absence of any such direction and to the extent
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practicable, the Indenture Trustee shall invest amounts held hereunder in those
Investment Securities described in clause (a) of the definition of the
Investment Securities. The Indenture Trustee and the Issuer hereby agree that
unless an Event of Default shall have occurred hereunder, the Issuer acting by
and through an Authorized Officer shall be entitled to, and shall, provide
written direction or oral direction confirmed in writing to the Indenture
Trustee with respect to any discretionary acts required or permitted of the
Indenture Trustee under any Investment Securities and the Indenture Trustee
shall not take such discretionary acts without such written direction.
The Investment Securities purchased shall be held by the Indenture
Trustee and shall be deemed at all times to be part of such Fund or Account or
Subaccounts or combination thereof, and the Indenture Trustee shall inform the
Issuer of the details of all such investments. Upon direction in writing (or
orally, confirmed in writing) from an Authorized Officer of the Issuer, the
Indenture Trustee shall use its best efforts to sell at the best price
obtainable, or present for redemption, any Investment Securities purchased by it
as an investment whenever it shall be necessary to provide money to meet any
payment from the applicable Fund. The Indenture Trustee shall advise the Issuer
in writing, on or before the fifteenth day of each calendar month (or such later
date as reasonably consented to by the Issuer), of all investments held for the
credit of each Fund in its custody under the provisions of this Indenture as of
the end of the preceding month and the value thereof, and shall list any
investments which were sold or liquidated for less than their Value at the time
thereof.
Money in any Fund constituting a part of the Trust Estate may be
pooled for the purpose of making investments and may be used to pay accrued
interest on Investment Securities purchased. The Indenture Trustee and its
affiliates may act as principal or agent in the acquisition or disposition of
any Investment Securities.
Notwithstanding the foregoing, the Indenture Trustee shall not be
responsible or liable for any losses on investments made by it hereunder or for
keeping all Funds held by it, fully invested at all times, its only
responsibility being to comply with the investment instructions of the Issuer or
its designee in a non-negligent manner.
The Issuer acknowledges that to the extent the regulations of the
Comptroller of the Currency or other applicable regulatory agency grant the
Issuer the right to receive brokerage confirmations of security transactions,
the Issuer waives receipt of such confirmations.
Section 5.08 Release. The Indenture Trustee shall, upon Issuer Order
and subject to the provisions of this Indenture, take all actions reasonably
necessary to effect the release of any Financed Eligible Loans from the lien of
this Indenture to the extent the terms hereof permit the sale, disposition or
transfer of such Financed Eligible Loans.
Section 5.09 Purchase of Notes. Pursuant to this Indenture, any
amounts held under this Indenture which are available to redeem Notes may
instead be used to purchase Notes outstanding under this Indenture at the same
times and subject to the same conditions (except as to price) as apply to the
redemption of Notes.
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ARTICLE VI
DEFAULTS AND REMEDIES
Section 6.01 Events of Default Defined. For the purpose of this
Indenture, the following events are hereby defined as, and are declared to be,
"Events of Default":
(a) default in the due and punctual payment of the principal of or
interest on any of the Senior Notes when due or failure to make any payment due
under any other Senior Obligations when due;
(b) if no Senior Obligations are Outstanding hereunder, default in
the due and punctual payment of the principal of or interest on any of the
Subordinate Notes when due or failure to make any payment due under any other
Subordinate Obligations when due;
(c) if no Senior Obligations or Subordinate Obligations are
Outstanding hereunder, default in the due and punctual payment of the principal
of or interest on any of the Junior-Subordinate Notes when due or failure to
make any payment due under any other Junior-Subordinate Obligations when due;
(d) failure to make any payment due under any other
Junior-Subordinate Obligations under this Indenture when due;
(e) default in the performance or observance of any other of the
covenants, agreements, or conditions on the part of the Issuer to be kept,
observed, and performed contained in this Indenture or in the Notes, and
continuation of such default for a period of 90 days after written notice
thereof by the Indenture Trustee to the Issuer; and
(f) the occurrence of an Event of Bankruptcy.
Any notice herein provided to be given to the Issuer with respect to any default
shall be deemed sufficiently given if sent by registered mail with postage
prepaid to the Person to be notified, addressed to such Person at the post
office address as shown in Section 9.01 of this Indenture or such other address
as may hereafter be given as the principal office of the Issuer in writing to
the Indenture Trustee by an Authorized Officer of the Issuer. The Indenture
Trustee may give any such notice in its discretion and shall give such notice if
requested to do so in writing by the Registered Owners of at least a majority of
the collective aggregate principal amount of the Highest Priority Obligations at
the time Outstanding ("Registered Owner Approval").
Section 6.02 Remedy on Default; Possession of Trust Estate. Subject
to Section 6.09 hereof, upon the happening and continuance of any Event of
Default, the Indenture Trustee personally or by its attorneys or agents may
enter into and upon and take possession of such portion of the Trust Estate as
shall be in the custody of others, and all property comprising the Trust Estate,
and each and every part thereof, and exclude the Issuer and its agents,
servants, and employees wholly therefrom, and have, hold, use, operate, manage,
and control the same and each and every part thereof, and in the name of the
Issuer or otherwise, as they shall deem best, conduct the business thereof and
exercise the privileges pertaining thereto and all the rights and powers of the
Issuer and use all of the then existing Trust Estate for that purpose, and
collect and receive all charges, income and Revenue of the same and of every
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part thereof, and after deducting therefrom all expenses incurred hereunder and
all other proper outlays herein authorized, and all payments which may be made
as just and reasonable compensation for its own services, and for the services
of its attorneys, agents, and assistants, the Indenture Trustee shall apply the
rest of the money received by the Indenture Trustee as follows:
(a) if the principal of none of the Obligations shall have become
due, first, to the payment of the interest in default on the Senior Notes and to
the payment of all Issuer Derivative Payments secured on a parity with the
Senior Notes then due, in order of the maturity of the installments thereof,
with interest on the overdue installments thereof at the same rates,
respectively, as were borne by the Senior Notes on which such interest shall be
in default and any such Issuer Derivative Payments as provided in the ISDA
Master Agreement then due, such payments to be made ratably to the parties
entitled thereto without discrimination or preference, second, to the payment of
the interest in default on the Subordinate Notes and to the payment of all
Issuer Derivative Payments secured on a parity with the Subordinate Notes then
due, in order of the maturity of the installments of such interest and any such
Issuer Derivative Payments, with interest on the overdue installments thereof at
the same rates, respectively, as were borne by the Subordinate Notes on which
such interest shall be in default and any such Issuer Derivative Payments then
due, such payments to be made ratably to the parties entitled thereto without
discrimination or preference and, third, to the payment of the interest in
default on the Junior-Subordinate Notes and to the payment of all Issuer
Derivative Payments secured on a parity with such Junior-Subordinate Notes then
due, in order of the maturity of the installments of such interest and any such
Issuer Derivative Payments, with interest on the overdue installments thereof at
the same rates, respectively, as were borne by the Junior-Subordinate Notes on
which such interest shall be in default and any such Issuer Derivative Payments
then due, such payments to be made ratably to the parties entitled thereto
without discrimination or preference, except as may be provided in a
Supplemental Indenture; and
(b) if the principal of any of the Obligations shall have become due
by declaration of acceleration or otherwise, first to the payment of the
interest in default on the Senior Notes and all Issuer Derivative Payments
secured on a parity with the Senior Notes then due, in the order of the maturity
of the installments thereof, with interest on overdue installments thereof at
the same rates, respectively, as were borne by the Senior Notes on which such
interest shall be in default and such Issuer Derivative Payments as provided in
the ISDA Master Agreement then due, as the case may be, second, to the payment
of the principal of all Senior Notes then due and any amount owed to a
Counterparty secured on a parity with Senior Obligations under the ISDA Master
Agreement, such payments to be made ratably to the parties entitled thereto
without discrimination or preference, third, to the payment of the interest in
default on the Subordinate Notes and all Issuer Derivative Payments secured on a
parity with the Subordinate Notes then due, in the order of the maturity of the
installments thereof with interest on overdue installments thereof at the same
rates, respectively, as were borne by the Subordinate Notes on which such
interest shall be in default and such Issuer Derivative Payments as provided in
the ISDA Master Agreement then due, as the case may be, fourth, to the payment
of the principal of all Subordinate Notes then due and any amount owed to a
Counterparty secured on a parity with Subordinate Obligations under the ISDA
Master Agreement, such payments to be made ratably to the parties entitled
thereto without discrimination or preference, fifth, to the payment of the
interest in default on the Junior-Subordinate Notes and all Issuer Derivative
Payments secured on a parity with such Junior-Subordinate Notes then due, in the
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order of the maturity of the installments thereof, with interest on overdue
installments thereof at the same rates, respectively, as were borne by the
Junior-Subordinate Notes on which such interest shall be in default and such
Issuer Derivative Payments as provided in the ISDA Master Agreement then due, as
the case may be, and sixth, to the payment of the principal of all
Junior-Subordinate Notes then due and any amount owed to a Counterparty secured
on a parity with Junior-Subordinate Obligations under the ISDA Master Agreement,
such payments to be made ratably to the parties entitled thereto without
discrimination or preference, except as may be provided in a Supplemental
Indenture.
Section 6.03 Remedies on Default; Advice of Counsel. Upon the
happening of any Event of Default, the Indenture Trustee may proceed to protect
and enforce the rights of the Indenture Trustee and the Registered Owners in
such manner as counsel for the Indenture Trustee may advise, whether for the
specific performance of any covenant, condition, agreement or undertaking herein
contained, or in aid of the execution of any power herein granted, or for the
enforcement of such other appropriate legal or equitable remedies as, in the
opinion of such counsel, may be more effectual to protect and enforce the rights
aforesaid.
Section 6.04 Remedies on Default; Sale of Trust Estate. Upon the
happening of any Event of Default and if the principal of all of the Outstanding
Obligations shall have been declared due and payable, then and in every such
case, and irrespective of whether other remedies authorized shall have been
pursued in whole or in part, the Indenture Trustee may sell, with or without
entry, to the highest bidder the Trust Estate, and all right, title, interest,
claim and demand thereto and the right of redemption thereof, at any such place
or places, and at such time or times and upon such notice and terms as may be
required by law. Upon such sale the Indenture Trustee may make and deliver to
the purchaser or purchasers a good and sufficient assignment or conveyance for
the same, which sale shall be a perpetual bar both at law and in equity against
the Issuer and all Persons claiming such properties. No purchaser at any sale
shall be bound to see to the application of the purchase money or to inquire as
to the authorization, necessity, expediency or regularity of any such sale. The
Indenture Trustee is hereby irrevocably appointed the true and lawful
attorney-in-fact of the Issuer, in its name and stead, to make and execute all
bills of sale, instruments of assignment and transfer and such other documents
of transfer as may be necessary or advisable in connection with a sale of all or
part of the Trust Estate, but the Issuer, if so requested by the Indenture
Trustee, shall ratify and confirm any sale or sales by executing and delivering
to the Indenture Trustee or to such purchaser or purchasers all such instruments
as may be necessary, or in the judgment of the Indenture Trustee, proper for the
purpose which may be designated in such request. In addition, the Indenture
Trustee may proceed to protect and enforce the rights of the Indenture Trustee
and the Registered Owners of the Obligations in such manner as counsel for the
Indenture Trustee may advise, whether for the specific performance of any
covenant, condition, agreement or undertaking herein contained, or in aid of the
execution of any power herein granted, or for the enforcement of such other
appropriate legal or equitable remedies as may in the opinion of such counsel,
be more effectual to protect and enforce the rights aforesaid. The Indenture
Trustee shall take any such action or actions if requested to do so in writing
by the Registered Owners of at least a majority of the collective aggregate
principal amount of the Highest Priority Obligations at the time Outstanding.
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Section 6.05 Appointment of Receiver. In case an Event of Default
occurs, and if all of the Outstanding Obligations shall have been declared due
and payable and in case any judicial proceedings are commenced to enforce any
right of the Indenture Trustee or of the Registered Owners under this Indenture
or otherwise, then as a matter of right, the Indenture Trustee shall be entitled
to the appointment of a receiver of the Trust Estate and of the earnings, income
or Revenue, rents, issues and profits thereof with such powers as the court
making such appointments may confer.
Section 6.06 Restoration of Position. In case the Indenture Trustee
shall have proceeded to enforce any rights under this Indenture by sale or
otherwise, and such proceedings shall have been discontinued, or shall have been
determined adversely to the Indenture Trustee, then and in every such case to
the extent not inconsistent with such adverse decree, the Issuer, the Indenture
Trustee and the Registered Owners shall be restored to their former respective
positions and the rights hereunder in respect to the Trust Estate, and all
rights, remedies, and powers of the Indenture Trustee and of the Registered
Owners shall continue as though no such proceeding had been taken.
Section 6.07 Purchase of Properties by Indenture Trustee or
Registered Owners. In case of any such sale of the Trust Estate, any Registered
Owner or Registered Owners or committee of Registered Owners or the Indenture
Trustee, may bid for and purchase such property and upon compliance with the
terms of sale may hold, retain possession, and dispose of such property as the
absolute right of the purchaser or purchasers without further accountability and
shall be entitled, for the purpose of making any settlement or payment for the
property purchased, to use and apply any Obligations hereby secured and any
interest thereon due and unpaid, by presenting such Obligations in order that
there may be credited thereon the sum apportionable and applicable thereto out
of the net proceeds of such sale, and thereupon such purchaser or purchasers
shall be credited on account of such purchase price payable to him or them with
the sum apportionable and applicable out of such net proceeds to the payment of
or as a credit on the Obligations so presented.
Section 6.08 Application of Sale Proceeds. The proceeds of any sale
of the Trust Estate, together with any funds at the time held by the Indenture
Trustee and not otherwise appropriated, shall be applied by the Indenture
Trustee as set forth in Section 6.02 hereof, and then to the Issuer or
whomsoever shall be lawfully entitled thereto.
Section 6.09 Accelerated Maturity. If an Event of Default shall have
occurred and be continuing, the Indenture Trustee may declare, or upon the
written direction by the Registered Owners of at least a majority of the
collective aggregate principal amount of the Highest Priority Obligations then
Outstanding, shall declare, the principal of all Obligations then Outstanding,
and the interest thereon, if not previously due, immediately due and payable,
anything in the Obligations or this Indenture to the contrary notwithstanding;
provided, however, that for a declaration of acceleration upon a default
pursuant to Section 6.01(d) hereof shall require the consent of 100% of the
Registered Owners of the collective aggregate principal amount of the Highest
Priority Obligations then Outstanding.
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Section 6.10 Remedies Not Exclusive. The remedies herein conferred
upon or reserved to the Indenture Trustee or the Registered Owners of
Obligations are not intended to be exclusive of any other remedy, but each
remedy herein provided shall be cumulative and shall be in addition to every
other remedy given hereunder or now or hereafter existing, and every power and
remedy hereby given to the Indenture Trustee or to the Registered Owners of
Obligations, or any supplement hereto, may be exercised from time to time as
often as may be deemed expedient. No delay or omission of the Indenture Trustee
or of any Registered Owner of Obligations to exercise any power or right arising
from any default hereunder shall impair any such right or power or shall be
construed to be a waiver of any such default or to be acquiescence therein.
Section 6.11 Direction of Indenture Trustee. Upon the happening of
any Event of Default, the Registered Owners of at least a majority of the
collective aggregate principal amount of the Highest Priority Obligations then
Outstanding, shall have the right by an instrument or instruments in writing
delivered to the Indenture Trustee to direct and control the Indenture Trustee
as to the method of taking any and all proceedings for any sale of any or all of
the Trust Estate, or for the appointment of a receiver, if permitted by law, and
may at any time cause any proceedings authorized by the terms hereof to be so
taken or to be discontinued or delayed; provided, however, that such Registered
Owners shall not be entitled to cause the Indenture Trustee to take any
proceedings which in the Indenture Trustee's opinion would be unjustly
prejudicial to non-assenting Registered Owners of Obligations, but the Indenture
Trustee shall be entitled to assume that the action requested by the Registered
Owners of at least a majority of the collective aggregate principal amount of
the Highest Priority Obligations then Outstanding will not be prejudicial to any
non-assenting Registered Owners unless the Registered Owners of more than 50% of
the collective aggregate principal amount of the non-assenting Registered Owners
of such Obligations, in writing, show the Indenture Trustee how they will be
prejudiced. Anything in this Indenture to the contrary notwithstanding, the
Registered Owners of a majority of the collective aggregate principal amount of
the Highest Priority Obligations then Outstanding together with the Registered
Owners of a majority of the collective aggregate principal amount of all other
Obligations then Outstanding shall have the right, at any time, by an instrument
or instruments in writing executed and delivered to the Indenture Trustee, to
direct the method and place of conducting all proceedings to be taken in
connection with the enforcement of the terms and conditions of this Indenture,
or for the appointment of a receiver or any other proceedings hereunder,
provided that such direction shall not be otherwise than in accordance with the
provisions of law and of this Indenture. The provisions of this Section 6.11
shall be expressly subject to the provisions of Sections 7.01(c) and 7.05
hereof.
Section 6.12 Right to Enforce in Indenture Trustee. No Registered
Owner of any Obligation shall have any right as such Registered Owner to
institute any suit, action, or proceedings for the enforcement of the provisions
of this Indenture or for the execution of any trust hereunder or for the
appointment of a receiver or for any other remedy hereunder, all rights of
action hereunder being vested exclusively in the Indenture Trustee, unless and
until such Registered Owner shall have previously given to the Indenture Trustee
written notice of a default hereunder, and of the continuance thereof, and also
unless the Registered Owners of the requisite principal amount of the
Obligations then Outstanding shall have made written request upon the Indenture
Trustee and the Indenture Trustee shall have been afforded reasonable
opportunity to institute such action, suit or proceeding in its own name, and
unless the Indenture Trustee shall have been offered indemnity and security
satisfactory to it against the costs, expenses, and liabilities to be incurred
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therein or thereby, which offer of indemnity shall be an express condition
precedent hereunder to any obligation of the Indenture Trustee to take any such
action hereunder, and the Indenture Trustee for 30 days after receipt of such
notification, request, and offer of indemnity, shall have failed to institute
any such action, suit or proceeding. It is understood and intended that no one
or more Registered Owners of the Obligations shall have the right in any manner
whatever by his or their action to affect, disturb, or prejudice the lien of
this Indenture or to enforce any right hereunder except in the manner herein
provided and for the equal benefit of the Registered Owners of not less than a
majority of the collective aggregate principal amount of the Obligations then
Outstanding.
Section 6.13 Physical Possession of Obligations Not Required. In any
suit or action by the Indenture Trustee arising under this Indenture or on all
or any of the Obligations issued hereunder, or any supplement hereto, the
Indenture Trustee shall not be required to produce such Obligations, but shall
be entitled in all things to maintain such suit or action without their
production.
Section 6.14 Waivers of Events of Default. The Indenture Trustee may
in its discretion waive any Event of Default hereunder and its consequences and
rescind any declaration of acceleration of Obligations, and shall do so upon the
written request of the Registered Owners of at least a majority of the
collective aggregate principal amount of the Highest Priority Obligations then
Outstanding; provided, however, that there shall not be waived (a) any Event of
Default in the payment of the principal of or premium on any Outstanding
Obligations at the date of maturity or redemption thereof, or any default in the
payment when due of the interest on any such Obligations, unless prior to such
waiver or rescission, all arrears of interest or all arrears of payments of
principal and premium, if any, and all expenses of the Indenture Trustee, in
connection with such default shall have been paid or provided for or (b) any
default in the payment of amounts set forth in Section 7.05 hereof. In case of
any such waiver or rescission, or in case any proceedings taken by the Indenture
Trustee on account of any such default shall have been discontinued or abandoned
or determined adversely to the Indenture Trustee, then and in every such case
the Issuer, the Indenture Trustee and the Registered Owners of Obligations shall
be restored to their former positions and rights hereunder respectively, but no
such waiver or rescission shall extend to or affect any subsequent or other
default, or impair any rights or remedies consequent thereon.
ARTICLE VII
THE INDENTURE TRUSTEE
Section 7.01 Acceptance of Trust. The Indenture Trustee hereby
accepts the trusts imposed upon it by this Indenture, and agrees to perform said
trusts, but only upon and subject to the following terms and conditions:
(a) Except during the continuance of an Event of Default,
(i) the Indenture Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture, and no
implied covenants or obligations shall be read into this Indenture against
the Indenture Trustee; and
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(ii) in the absence of bad faith on its part, the Indenture Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Indenture Trustee and conforming to the
requirements of this Indenture; but in the case of any such certificates
or opinions which by any provisions hereof are specifically required to be
furnished to the Indenture Trustee, the Indenture Trustee shall be under a
duty to examine the same to determine whether or not they conform as to
form with the requirements of this Indenture and whether or not they
contain the statements required under this Indenture.
(b) In case an Event of Default has occurred and is continuing, the
Indenture Trustee, in exercising the rights and powers vested in it by this
Indenture, shall use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.
(c) Before taking any action hereunder requested by Registered
Owners, the Indenture Trustee may require that it be furnished an indemnity bond
or other indemnity and security satisfactory to it by the Registered Owners, as
applicable, for the reimbursement of all expenses to which it may be put and to
protect it against all liability.
Section 7.02 Recitals of Others. The recitals, statements, and
representations set forth herein and in the Notes shall be taken as the
statements of the Issuer, and the Indenture Trustee assumes no responsibility
for the correctness of the same. The Indenture Trustee makes no representations
as to the title of the Issuer in the Trust Estate or as to the security afforded
thereby and hereby, or as to the validity or sufficiency of this Indenture or of
the Notes issued hereunder, and the Indenture Trustee shall incur no
responsibility in respect of such matters.
Section 7.03 As to Filing of Indenture. The Indenture Trustee shall
be under no duty (a) to file or record, or cause to be filed or recorded, this
Indenture or any instrument supplemental hereto, (b) or to procure any further
order or additional instruments of further assurance, (c) to see to the delivery
to it of any personal property intended to be mortgaged or pledged hereunder or
thereunder, (d) or to do any act which may be suitable to be done for the better
maintenance of the lien or security hereof (other than the filing of any
continuation (but not initial) statements), or (e) for giving notice of the
existence of such lien, or for extending or supplementing the same or to see
that any rights to Revenue and Funds intended now or hereafter to be transferred
in trust hereunder are subject to the lien hereof. The Indenture Trustee shall
not be liable for failure of the Issuer to pay any tax or taxes in respect of
such property, or any part thereof, or the income therefrom or otherwise, nor
shall the Indenture Trustee be under any duty in respect of any tax which may be
assessed against it or the Registered Owners in respect of such property or
pledged Revenue and Funds. The Indenture Trustee agrees to prepare, request that
the Issuer execute (if such execution is necessary for any such filing) and file
in a timely manner (if received from the Issuer in a timely manner) with any
necessary execution by the Issuer, the continuation statements referred to
herein; provided, that the Indenture Trustee shall have no responsibility for
the sufficiency, adequacy or priority of any initial filing and in the absence
of written notice to the contrary by the Issuer or other Authorized Officer, may
rely and shall be protected in relying on all information and exhibits in such
initial filings for the purposes of any continuation statements.
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Section 7.04 Indenture Trustee May Act Through Agents. The Indenture
Trustee may execute any of the trusts or powers hereof and perform any duty
hereunder, either itself or by or through its attorneys, agents, or employees,
and it shall not be answerable or accountable for any default, neglect, or
misconduct of any such attorneys, agents, or employees, if reasonable care has
been exercised in the appointment, supervision, and monitoring of the work
performed. All reasonable costs incurred by the Indenture Trustee and all
reasonable compensation to all such persons as may reasonably be employed in
connection with the trusts hereof shall be paid by the Issuer.
Section 7.05 Indemnification of Indenture Trustee. Other than with
respect to its duties to make payment on the Obligations when due, and its duty
to pursue the remedy of acceleration as provided in Section 6.02 hereof, for
each of which no additional security or indemnity may be required, the Indenture
Trustee shall be under no obligation or duty to perform any act at the request
of Registered Owners or to institute or defend any suit in respect thereof
unless properly indemnified and provided with security to its satisfaction as
provided in Section 7.01(c) hereof. The Indenture Trustee shall not be required
to take notice, or be deemed to have knowledge, of any default or Event of
Default of the Issuer hereunder and may conclusively assume that there has been
no such default or Event of Default (other than an Event of Default described in
Sections 6.01(a), (b), (c), or (d) hereof) unless and until it shall have been
specifically notified in writing at the address in Section 9.01 hereof of such
default or Event of Default by (a) the Registered Owners of the required
percentages in principal amount of the Obligations then Outstanding hereinabove
specified or (b) an Authorized Officer of the Issuer. However, the Indenture
Trustee may begin suit, or appear in and defend suit, execute any of the trusts
hereby created, enforce any of its rights or powers hereunder, or do anything
else in its judgment proper to be done by it as Indenture Trustee, without
assurance of reimbursement or indemnity, and in such case the Indenture Trustee
shall be reimbursed or indemnified by the Registered Owners requesting such
action, if any, or the Issuer in all other cases, for all fees, costs and
expenses, liabilities, outlays and counsel fees and other reasonable
disbursements properly incurred in connection therewith, unless such costs and
expenses, liabilities, outlays and attorneys' fees and other reasonable
disbursements properly incurred in connection therewith are adjudicated to have
resulted from the negligence or willful misconduct of the Indenture Trustee. In
furtherance and not in limitation of this Section 7.05, the Indenture Trustee
shall not be liable for, and shall be held harmless by the Issuer from,
following any orders, instructions or other directions upon which the Indenture
Trustee is authorized to rely pursuant to this Indenture or any other agreement
to which it is a party. If the Issuer or the Registered Owners, as appropriate,
shall fail to make such reimbursement or indemnification, the Indenture Trustee
may reimburse itself from any money in its possession under the provisions of
this Indenture, subject only to the prior lien of the Notes for the payment of
the principal thereof, premium, if any, and interest thereon from the Revenue
Fund. None of the provisions contained in this Indenture or any other Agreement
to which it is a party shall require the Indenture Trustee to act or to expend
or risk its own funds or otherwise incur individual financial liability in the
performance of any of its duties or in the exercise of any of its rights or
powers if the Registered Owners shall not have offered security and indemnity
acceptable to it or if it shall have reasonable grounds for believing that
prompt repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
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The Issuer agrees to indemnify and hold harmless the Indenture
Trustee against any and all claims, demands, suits, actions or other proceedings
and all liabilities, costs and expenses whatsoever caused by any untrue
statement or misleading statement or alleged untrue statement or alleged
misleading statement of a material fact contained in any offering document
distributed in connection with the issuance of the Notes or caused by any
omission or alleged omission from such offering document of any material fact
required to be stated therein or necessary in order to make the statements made
therein in the light of the circumstances under which they were made, not
misleading.
Section 7.06 Indenture Trustee's Right to Reliance. The Indenture
Trustee shall be protected in acting upon any notice, resolution, request,
consent, order, certificate, report, appraisal, opinion, report or document of
the Issuer or the Servicer or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or parties. The
Indenture Trustee may consult with experts and with counsel (who may, but need
not, be counsel for the Issuer, the Indenture Trustee, or for a Registered
Owner), and the opinion of such counsel shall be full and complete authorization
and protection in respect of any action taken or suffered, and in respect of any
determination made by it hereunder in good faith and in accordance with the
opinion of such counsel.
Whenever in the administration hereof the Indenture Trustee shall
reasonably deem it desirable that a matter be proved or established prior to
taking, suffering, or omitting any action hereunder, the Indenture Trustee
(unless other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon a certificate signed by an Authorized Officer
of the Issuer or an authorized officer of the Servicer.
The Indenture Trustee shall not be liable for any action taken,
suffered, or omitted by it in good faith and believed by it to be authorized or
within the discretion or rights or powers conferred upon it hereby; provided,
however, that the Indenture Trustee shall be liable for its negligence or
willful misconduct in taking such action.
The Indenture Trustee is authorized, under this Indenture, subject
to Section 4.12 hereof, to sell, assign, transfer or convey Financed Eligible
Loans in accordance with an Issuer Order. If such Financed Eligible Loan was
originated under the Act, such Issuer Order shall certify that the Person to
whom such Financed Eligible Loan is sold, assigned, transferred, or conveyed is
an Eligible Lender unless not required by the Act. The Indenture Trustee is
further authorized to enter into agreements with other Persons, in its capacity
as Indenture Trustee, in order to carry out or implement the terms and
provisions of this Indenture.
Section 7.07 Compensation of Indenture Trustee. Except as otherwise
expressly provided herein, all advances, counsel fees and other expenses
reasonably made or incurred by the Indenture Trustee in and about the execution
and administration of the trust hereby created and reasonable compensation to
the Indenture Trustee for its services in the premises shall be paid by the
Issuer. The compensation of the Indenture Trustee shall not be limited to or by
any provision of law in regard to the compensation of trustees of an express
trust. If not paid by the Issuer, the Indenture Trustee shall have a lien
against all money held pursuant to this Indenture, subject only to the prior
lien of the Obligations against the money and investments in the Revenue Fund
for the payment of the principal thereof, premium, if any, and interest thereon,
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for such reasonable compensation, expenses, advances and counsel fees incurred
in and about the execution of the trusts hereby created and the exercise and
performance of the powers and duties of the Indenture Trustee hereunder and the
cost and expense incurred in defending against any liability in the premises of
any character whatsoever (unless such liability is adjudicated to have resulted
from the negligence or willful misconduct of the Indenture Trustee).
Section 7.08 Indenture Trustee May Own Notes. The Indenture Trustee
hereunder, or any successor Indenture Trustee, in its individual or other
capacity, may become the owner or pledgee of Notes and may otherwise deal with
the Issuer, with the same rights it would have if it were not the Indenture
Trustee. The Indenture Trustee may act as depository for, and permit any of its
officers or directors to act as a member of, or act in any other capacity in
respect to, any committee formed to protect the rights of the Registered Owners
or to effect or aid in any reorganization growing out of the enforcement of the
Notes or of this Indenture, whether or not any such committee shall represent
the Registered Owners of more than 60% of the collective aggregate principal
amount of the Outstanding Obligations.
Section 7.09 Resignation of Indenture Trustee. The Indenture Trustee
and any successor to the Indenture Trustee may resign and be discharged from the
trust created by this Indenture by giving to the Issuer notice in writing which
notice shall specify the date on which such resignation is to take effect;
provided, however, that such resignation shall only take effect on the day
specified in such notice if a successor Indenture Trustee shall have been
appointed pursuant to Section 7.11 hereof (and is qualified to be the Indenture
Trustee under the requirements of Section 7.11 hereof). If no successor
Indenture Trustee has been appointed by the date specified or within a period of
90 days from the receipt of the notice by the Issuer, whichever period is the
longer, the Indenture Trustee may (a) appoint a temporary successor Indenture
Trustee having the qualifications provided in Section 7.11 hereof or (b) request
a court of competent jurisdiction to (i) require the Issuer to appoint a
successor, as provided in Section 7.11 hereof, within three days of the receipt
of citation or notice by the court, or (ii) appoint a Indenture Trustee having
the qualifications provided in Section 7.11 hereof. In no event may the
resignation of the Indenture Trustee be effective until a qualified successor
Indenture Trustee shall have been selected and appointed. In the event a
temporary successor Indenture Trustee is appointed pursuant to (a) above, the
Issuer may remove such temporary successor Indenture Trustee and appoint a
successor thereto pursuant to Section 7.11 hereof.
Section 7.10 Removal of Indenture Trustee. The Indenture Trustee or
any successor Indenture Trustee may be removed (a) at any time by the Registered
Owners of a majority of the collective aggregate principal amount of the Highest
Priority Obligations then Outstanding, (b) by the Issuer for cause or upon the
sale or other disposition of the Indenture Trustee or its corporate trust
functions or (c) by the Issuer without cause so long as no Event of Default as
described in Sections 6.01(a), (b), (c), (d) or (e) exists or has existed within
the last 30 days, upon payment to the Indenture Trustee so removed of all money
then due to it hereunder and appointment of a successor thereto by the Issuer
and acceptance thereof by said successor. One copy of any such order of removal
shall be filed with the Issuer and the other with the Indenture Trustee so
removed.
In the event a Indenture Trustee (or successor Indenture Trustee) is
removed by any person or for any reason permitted hereunder, such removal shall
not become effective until (a) in the case of removal by the Registered Owners,
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such Registered Owners by instrument or concurrent instruments in writing
(signed and acknowledged by such Registered Owners or their attorneys-in-fact)
filed with the Indenture Trustee removed have appointed a successor Indenture
Trustee or otherwise the Issuer shall have appointed a successor, and (b) the
successor Indenture Trustee has accepted appointment as such.
Section 7.11 Successor Indenture Trustee. In case at any time the
Indenture Trustee or any successor Indenture Trustee shall resign, be dissolved,
or otherwise shall be disqualified to act or be incapable of acting, or in case
control of the Indenture Trustee or of any successor Indenture Trustee or of its
officers shall be taken over by any public officer or officers, a successor
Indenture Trustee may be appointed by the Issuer. In the case of any such
appointment by the Issuer of a successor to the Indenture Trustee, the Issuer
shall forthwith cause notice thereof to be mailed to the Registered Owners of
the Notes at the address of each Registered Owner appearing on the note
registration books maintained by the Registrar. Every successor Indenture
Trustee appointed by the Registered Owners, by a court of competent
jurisdiction, or by the Issuer shall be a bank or trust company in good
standing, organized and doing business under the laws of the United States or of
a state therein, which has a reported capital and surplus of not less than
$50,000,000, be authorized under the law to exercise corporate trust powers, be
subject to supervision or examination by a federal or state authority, and be an
Eligible Lender so long as such designation is necessary to maintain guarantees
and federal benefits under the Act with respect to the Financed Eligible Loans
originated under the Act.
Section 7.12 Manner of Vesting Title in Indenture Trustee. Any
successor Indenture Trustee appointed hereunder shall execute, acknowledge, and
deliver to its predecessor Indenture Trustee, and also to the Issuer, an
instrument accepting such appointment hereunder, and thereupon such successor
Indenture Trustee, without any further act, deed, or conveyance shall become
fully vested with all the estate, properties, rights, powers, trusts, duties,
and obligations of its predecessors in trust hereunder (except that the
predecessor Indenture Trustee shall continue to have the benefits to
indemnification hereunder together with the successor Indenture Trustee), with
like effect as if originally named as Indenture Trustee herein; but the
Indenture Trustee ceasing to act shall nevertheless, on the written request of
an Authorized Officer of the Issuer, or an authorized officer of the successor
Indenture Trustee, execute, acknowledge, and deliver such instruments of
conveyance and further assurance and do such other things as may reasonably be
required for more fully and certainly vesting and confirming in such successor
Indenture Trustee all the right, title, and interest of the Indenture Trustee
which it succeeds, in and to pledged Revenue and Funds and such rights, powers,
trusts, duties, and obligations, and the Indenture Trustee ceasing to act also,
upon like request, pay over, assign, and deliver to the successor Indenture
Trustee any money or other property or rights subject to the lien of this
Indenture, including any pledged securities which may then be in its possession.
Should any deed or instrument in writing from the Issuer be required by the
successor Indenture Trustee for more fully and certainly vesting in and
confirming to such new Indenture Trustee such estate, properties, rights,
powers, and duties, any and all such deeds and instruments in writing shall on
request be executed, acknowledged and delivered by the Issuer.
In case any of the Notes to be issued hereunder shall have been
authenticated but not delivered, any successor Indenture Trustee may adopt the
certificate of authentication of the Indenture Trustee or of any successor to
the Indenture Trustee; and in case any of the Notes shall not have been
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authenticated, any successor to the Indenture Trustee may authenticate such
Notes in its own name; and in all such cases such certificate shall have the
full force which it has anywhere in the Notes or in this Indenture.
Section 7.13 Additional Covenants By the Indenture Trustee to
Conform to the Act. The Indenture Trustee covenants that it will at all times be
an Eligible Lender under the Act so long as such designation is necessary, as
determined by the Issuer, to maintain the guarantees and federal benefits under
the Act with respect to the Financed Eligible Loans, that it will acquire
Eligible Loans originated under the Act in its capacity as an Eligible Lender
and that it will not dispose of or deliver any Financed Eligible Loans
originated under the Act or any security interest in any such Financed Eligible
Loans to any party who is not an Eligible Lender so long as the Act or
Regulations adopted thereunder require an Eligible Lender to be the owner or
holder of such Financed Eligible Loans; provided, however, that nothing above
shall prevent the Indenture Trustee from delivering the Eligible Loans to the
Servicer or the Guaranty Agency.
Section 7.14 Right of Inspection. A Registered Owner shall be
permitted at reasonable times during regular business hours and in accordance
with reasonable regulations prescribed by the Indenture Trustee to examine at
the principal office of the Indenture Trustee a copy of any report or instrument
theretofore filed with the Indenture Trustee relating to the condition of the
Trust Estate.
Section 7.15 Limitation with Respect to Examination of Reports.
Except as provided in this Indenture, the Indenture Trustee shall be under no
duty to examine any report or statement or other document required or permitted
to be filed with it by the Issuer.
Section 7.16 Servicing Agreement. The Indenture Trustee acknowledges
the receipt of a copy of the Servicing Agreement.
Section 7.17 Additional Covenants of Indenture Trustee. The
Indenture Trustee, by the execution hereof, covenants, represents and agrees
that:
(a) it will not exercise any of the rights, duties, or privileges
under this Indenture in such manner as would cause the Eligible Loans held or
acquired under the terms hereof to be transferred, assigned, or pledged as
security to any person or entity other than as permitted by this Indenture; and
(b) it will comply with the Act and the Regulations and will, upon
written notice from an Authorized Officer of the Issuer, the Secretary, or the
Guaranty Agency, use its reasonable efforts to cause this Indenture to be
amended (in accordance with Section 8.01 hereof) if the Act or Regulations are
hereafter amended so as to be contrary to the terms of this Indenture.
Section 7.18 Duty of Indenture Trustee with Respect to Rating
Agencies. It shall be the duty of the Indenture Trustee to notify each Rating
Agency then rating any of the Notes (but the Indenture Trustee shall incur no
liability for any failure to do so) of (a) any change, expiration, extension, or
renewal of this Indenture, (b) redemption or defeasance of any or all the Notes,
(c) any change in the Indenture Trustee or (d) any other information required to
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be reported to each Rating Agency under any Supplemental Indenture; provided,
however, the provisions of this Section 7.18 do not apply when such documents
have been previously supplied to such Rating Agency and the Indenture Trustee
has received written evidence to such effect, all as may be required by this
Indenture. All notices required to be forwarded to the Rating Agencies under
this Section 7.18 shall be sent in writing at the following addresses:
Standard & Poor's Ratings Group
25 Broadway
New York, New York 10004
Attention: Asset-Backed Surveillance Group
Fitch, Inc.
One State Street Plaza
New York, New York 10004
Attention: Structured Finance
Moody's Investors Service
99 Church Street
New York, New York 10007
Attention: [Contact]
The Indenture Trustee also acknowledges that each Rating Agency's
periodic review for maintenance of a Rating on any series of the Notes may
involve discussions and/or meetings with representatives of the Indenture
Trustee at mutually agreeable times and places.
Section 7.19 Merger of the Indenture Trustee. Any corporation into
which the Indenture Trustee may be merged or with which it may be consolidated,
or any corporation resulting from any merger or consolidation to which the
Indenture Trustee shall be a party, or any corporation succeeding to all or
substantially all of the corporate trust business of the Indenture Trustee,
shall be the successor of the Indenture Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Indenture,
without the execution or filing of any paper of any further act on the part of
any other parties hereto.
Section 7.20 Receipt of Funds from Servicer. The Indenture Trustee
shall not be accountable or responsible in any manner whatsoever for any action
of the Issuer, the depository bank of any funds of the Issuer, or the Servicer
while the Servicer is acting as bailee or agent of the Indenture Trustee with
respect to the Eligible Loans except, to the extent provided in the Servicing
Agreement or custodian agreement, for actions taken in compliance with any
instruction or direction given to the Indenture Trustee, or for the application
of funds or moneys by the Servicer until such time as funds are received by the
Indenture Trustee.
Section 7.21 Special Circumstances Leading to Resignation of
Indenture Trustee. Because the Indenture Trustee serves as trustee hereunder for
Obligations of different priorities, it is possible that circumstances may arise
which will cause the Indenture Trustee to resign from its position as trustee
for one or more of the Obligations. In the event that the Indenture Trustee
makes a determination that it should so resign, due to the occurrence of an
Event of Default or potential default hereunder, or otherwise, the Issuer may
permit such resignation as to one or more of the Obligations or request the
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Indenture Trustee's resignation as to all Obligations, as the Issuer may elect.
If the Issuer should determine that a conflict of interest has arisen as to the
trusteeship of any of the Obligations, it may authorize and execute a
Supplemental Indenture with one or more successor Indenture Trustees, under
which the administration of certain of the Obligations would be separated from
the administration of the other Obligations.
Section 7.22 Survival of Indenture Trustee's Rights to Receive
Compensation, Reimbursement and Indemnification. The Indenture Trustee's rights
to receive compensation, reimbursement and indemnification of money due and
owing hereunder at the time of the Indenture Trustee's resignation or removal
shall survive the Indenture Trustee's resignation or removal.
Section 7.23 Corporate Trustee Required; Eligibility; Conflicting
Interests. There shall at all times be a Indenture Trustee hereunder which shall
be eligible to act as Indenture Trustee under TIA Section 310(a)(1) and shall
have a combined capital and surplus of at least $50,000,000. If such corporation
publishes reports of condition at least annually, pursuant to law or the
requirements of federal, state, territorial or District of Columbia supervising
or examining authority, then for the purposes of this Section 7.23, the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time the Indenture Trustee shall cease to be eligible in
accordance with the provisions of this Section 7.23, it shall resign immediately
in the manner and with the effect specified in this Article VII. Neither the
Issuer nor any Person directly or indirectly controlling or controlled by, or
under common control with, the Issuer shall serve as Indenture Trustee.
Section 7.24 Indenture Trustee May File Proofs of Claim. In case of
the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Issuer or any other obligor upon the Notes or the
property of the Issuer or of such other obligor or their creditors, the
Indenture Trustee (irrespective of whether the principal of the Notes of any
series 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 on the Issuer for the payment of overdue principal, premium, if any, or
interest) shall be entitled and empowered, by intervention in such proceeding or
otherwise:
(a) to file and prove a claim for the whole amount, or such lesser
amount as may be provided for in the Notes, of principal (and premium, if any)
and interest, if any, 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 the reasonable
compensation, expenses, disbursements and advances of the Indenture Trustee and
its agents and counsel) and of the Registered Owners allowed in such judicial
proceeding; and
(b) to collect and receive any money or other property payable or
deliverable on any such claims and to distribute the same; and any custodian,
receiver, assignee, trustee, liquidator, sequestrator (or other similar
official) in any such judicial proceeding is hereby authorized by each
Registered Owner of Notes to make such payments to the Indenture Trustee, and if
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the Indenture Trustee shall consent to the making of such payments directly to
the Registered Owners, to pay to the Indenture Trustee any amount due to it for
the reasonable compensation, expenses, disbursements and advances of the
Indenture Trustee and any predecessor Indenture Trustee, their agents and
counsel, and any other amounts due the Indenture Trustee or any predecessor
Indenture Trustee.
Nothing herein contained shall be deemed to authorize the Indenture
Trustee to authorize or consent to or accept or adopt on behalf of any
Registered Owner of a Note any plan of reorganization, arrangement, adjustment
or composition affecting the Notes or the rights of any Registered Owner
thereof, or to authorize the Indenture Trustee to vote in respect of the claim
of any Registered Owner of a Note in any such proceeding.
In any proceedings brought by the Indenture Trustee (and also any
proceedings involving the interpretation of any provision of this Indenture to
which the Indenture Trustee shall be a party), the Indenture Trustee shall be
held to represent all the Registered Owners of the Notes, and it shall not be
necessary to make any Registered Owners of the Notes parties to any such
proceedings.
ARTICLE VIII
SUPPLEMENTAL INDENTURES
Section 8.01 Supplemental Indentures Not Requiring Consent of
Registered Owners. The Issuer and the Indenture Trustee may, without the consent
of or notice to any of the Registered Owners of any Obligations enter into any
indenture or indentures supplemental to this Indenture for any one or more of
the following purposes:
(a) to cure any ambiguity or formal defect or omission in this
Indenture;
(b) to grant to or confer upon the Indenture Trustee for the benefit
of the Registered Owners any additional benefits, rights, remedies, powers or
authorities that may lawfully be granted to or conferred upon the Registered
Owners or the Indenture Trustee;
(c) to subject to this Indenture additional revenues, properties or
collateral;
(d) to modify, amend or supplement this Indenture or any indenture
supplemental hereto in such manner as to permit the qualification hereof and
thereof under the Trust Indenture Act or any similar federal statute hereafter
in effect or to permit the qualification of the Notes for sale under the
securities laws of the United States of America or of any of the states of the
United States of America, and, if they so determine, to add to this Indenture or
any indenture supplemental hereto such other terms, conditions and provisions as
may be permitted by said Trust Indenture Act or similar federal statute;
(e) to evidence the appointment of a separate or co-Trustee or a
co-registrar or transfer agent or the succession of a new Indenture Trustee
hereunder, or any additional or substitute Guaranty Agency or Servicer;
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(f) to add such provisions to or to amend such provisions of this
Indenture as may, in Note Counsel's opinion, be necessary or desirable to assure
implementation of the Program in conformance with the Act if along with such
Supplemental Indenture there is filed a Note Counsel's opinion to the effect
that the addition or amendment of such provisions will in no way impair the
existing security of the Registered Owners of any Outstanding Obligations;
(g) to make any change as shall be necessary in order to obtain and
maintain for any of the Notes an investment grade Rating from a nationally
recognized rating service, which changes, in the opinion of the Indenture
Trustee are not to the prejudice of the Registered Owner of any of the
Obligations;
(h) to make any changes necessary to comply with the Act, the
Regulations or the Code and the regulations promulgated thereunder;
(i) to provide for the issuance of Notes pursuant to the provisions
of Section 2.08 of this Indenture, including the creation of appropriate Funds,
Accounts and Subaccounts with respect to such Notes;
(j) to make the terms and provisions of this Indenture, including
the lien and security interest granted herein, applicable to a Derivative
Product, and to modify Section 3.03 hereof with respect to any particular
Derivative Product;
(k) to create any additional Funds or Accounts or Subaccounts under
this Indenture deemed by the Indenture Trustee to be necessary or desirable;
(l) to amend the Indenture to allow for any Notes to be supported by
a letter of credit or insurance policy or a liquidity agreement, including
amendments with respect to repayment to such a provider on a parity with any
Notes or Derivative Product and providing rights to such provider under this
Indenture, including with respect to defaults and remedies;
(m) to amend the Indenture to provide for use of a surety bond or
other financial guaranty instrument in lieu of cash and/or Investment Securities
in all or any portion of the Reserve Fund, so long as such action shall not
adversely affect the Ratings on any of the Notes;
(n) to make any other change with a Rating Confirmation; or
(o) to make any other change which, in the judgment of the Indenture
Trustee is not to the material prejudice of the Registered Owners of any
Obligations; provided, however, that nothing in this Section 8.01 shall permit,
or be construed as permitting, any modification of the trusts, powers, rights,
duties, remedies, immunities and privileges of the Indenture Trustee without the
prior written approval of the Indenture Trustee, which approval shall be
evidenced by execution of a Supplemental Indenture.
Section 8.02 Supplemental Indentures Requiring Consent of Registered
Owners. Exclusive of Supplemental Indentures covered by Section 8.01 hereof and
subject to the terms and provisions contained in this Section 8.02, and not
otherwise, the Registered Owners of not less than a majority of the principal
amount of each class of affected Notes and each affected Derivative Product then
Outstanding shall have the right, from time to time, to consent to and approve
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the execution by the Issuer and the Indenture Trustee of such other indenture or
indentures supplemental hereto as shall be deemed necessary and desirable by the
Indenture Trustee for the purpose of modifying, altering, amending, adding to or
rescinding, in any particular, any of the terms or provisions contained in this
Indenture or in any Supplemental Indenture; provided, however, that nothing in
this Section 8.02 shall permit, or be construed as permitting (a) without the
consent of the Registered Owners of each affected Note and each Derivative
Product then Outstanding, (i) an extension of the maturity date of the principal
of or the interest on any Obligation, or (ii) a reduction in the principal
amount of any Obligation or the rate of interest thereon, or (iii) a privilege
or priority of any Obligation or Obligations over any other Obligation or
Obligations except as otherwise provided herein, or (iv) a reduction in the
aggregate principal amount of the Obligations required for consent to a
Supplemental Indenture, or (v) the creation of any lien other than a lien
ratably securing all of the Obligations at any time Outstanding hereunder except
as otherwise provided herein or (b) any modification of the trusts, powers,
rights, obligations, duties, remedies, immunities and privileges of the
Indenture Trustee without the prior written approval of the Indenture Trustee.
If at any time the Issuer shall request that the Indenture Trustee
enter into any such Supplemental Indenture for any of the purposes of this
Section 8.02, the Indenture Trustee shall, upon being satisfactorily indemnified
with respect to expenses, cause notice of the proposed execution of such
Supplemental Indenture to be mailed by registered or certified mail to each
Registered Owner of an Obligation at the address shown on the registration books
or listed in any Derivative Product. Such notice (which shall be prepared by the
Issuer) shall briefly set forth the nature of the proposed Supplemental
Indenture and shall state that copies thereof are on file at the principal
corporate trust office of the Indenture Trustee for inspection by all Registered
Owners. If, within 60 days, or such longer period as shall be prescribed by the
Issuer, following the mailing of such notice, the Registered Owners of not less
than a majority of the principal amount of each class of affected Notes and each
affected Derivative Product then Outstanding at the time of the execution of any
such Supplemental Indenture shall have consented in writing to and approved the
execution thereof as herein provided, no Registered Owner of any Obligation
shall have any right to object to any of the terms and provisions contained
therein, or the operation thereof, or in any manner to question the propriety of
the execution thereof, or to enjoin or restrain the Indenture Trustee or the
Issuer from executing the same or from taking any action pursuant to the
provisions thereof. Upon the execution of any such Supplemental Indenture as in
this Section 8.02 permitted and provided, this Indenture shall be and be deemed
to be modified and amended in accordance therewith.
Section 8.03 Additional Limitation on Modification of Indenture.
None of the provisions of this Indenture (including Sections 8.01 and 8.02
hereof) shall permit an amendment to the provisions of the Indenture which
permits the transfer of all or part of the Financed Eligible Loans originated
under the Act or granting of a security interest therein to any Person other
than an Eligible Lender or the Servicer, unless the Act or Regulations are
hereafter modified so as to permit the same.
Section 8.04 Notice of Defaults. Within 90 days after the occurrence
of any default hereunder with respect to the Notes, the Indenture Trustee shall
transmit in the manner and to the extent provided in TIA Section 313(c), notice
of such default hereunder known to the Indenture Trustee, unless such default
shall have been cured or waived; provided, however, that, except in the case of
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a default in the payment of the principal of (or premium, if any) or interest
with respect to any Note, or in the payment of any sinking fund installment with
respect to the Notes, the Indenture Trustee shall be protected in withholding
such notice if and so long as an authorized officer of the Indenture Trustee in
good faith determine that the withholding of such notice is in the interest of
the Registered Owners of the Notes. For the purpose of this Section 8.04, the
term "default" means any event which is, or after notice or lapse of time or
both would become, an Event of Default with respect to the Notes.
Section 8.05 Conformity With the Trust Indenture Act. Every
supplemental indenture executed pursuant to this Article VIII shall conform to
the requirements of the Trust Indenture Act as then in effect.
ARTICLE IX
GENERAL PROVISIONS
Section 9.01 Notices. Any notice, request or other instrument
required by this Indenture to be signed or executed by the Registered Owners of
Obligations may be executed by the execution of any number of concurrent
instruments of similar tenor, and may be signed or executed by such Registered
Owners of Obligations in person or by agent appointed in writing. As a condition
for acting thereunder the Indenture Trustee may demand proof of the execution of
any such instrument and of the fact that any person claiming to be the owner of
any of said Obligations is such owner and may further require the actual deposit
of such Obligation or Obligations with the Indenture Trustee. The fact and date
of the execution of such instrument may be proved by the certificate of any
officer in any jurisdiction who by the laws thereof is authorized to take
acknowledgments of deeds within such jurisdiction, that the person signing such
instrument acknowledged before him the execution thereof, or may be proved by
any affidavit of a witness to such execution sworn to before such officer.
The amount of Notes held by any person executing such instrument as
a Registered Owner of Notes and the fact, amount, and numbers of the Notes held
by such person and the date of his holding the same may be proved by a
certificate executed by any responsible trust company, bank, banker, or other
depository in a form approved by the Indenture Trustee, showing that at the date
therein mentioned such person had on deposit with such depository the Notes
described in such certificate; provided, however, that at all times the
Indenture Trustee may require the actual deposit of such Note or Notes with the
Indenture Trustee.
All notices, requests and other communications to any party
hereunder shall be in writing (including bank wire, telex, telecopy or facsimile
or similar writing) at the following addresses, and each address shall
constitute each party's respective "Principal Office" for purposes of the
Indenture:
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If intended for the Issuer:
The Student Loan Corporation
c/o SLC Student Loan Trust-I
750 Washington Boulevard
9th Floor
Stamford, CT 06901
Attention: [Trust Administrator]
Telephone: [ ]
Telecopier: [ ]
If intended for the Indenture Trustee:
Bankers Trust Company
Four Albany Street
New York, New York 10006
Until further notice:
100 Plaza One
Jersey City, NJ 07311
Attention: Structured Finance Services
Telephone: [ ]
Telecopier: [ ]
Any party may change the address to which subsequent notices to such party are
to be sent, or of its Principal Office, by notice to the others, delivered by
hand or received by telex or telecopier or registered first-class mail, postage
prepaid. Each such notice, request or other communication shall be effective
when delivered by hand or received by telex or telecopier or registered
first-class mail, postage prepaid.
Section 9.02 Covenants Bind Issuer. The covenants, agreements,
conditions, promises, and undertakings in this Indenture shall extend to and be
binding upon the successors and assigns of the Issuer, and all of the covenants
hereof shall bind such successors and assigns, and each of them, jointly and
severally. All the covenants, conditions, and provisions hereof shall be held to
be for the sole and exclusive benefit of the parties hereto and their successors
and assigns and of the Registered Owners from time to time of the Obligations.
No extension of time of payment of any of the Obligations shall
operate to release or discharge the Issuer, it being agreed that the liability
of the Issuer, to the extent permitted by law, shall continue until all of the
Obligations are paid in full, notwithstanding any transfer of Financed Eligible
Loans or extension of time for payment.
Section 9.03 Lien Created. This Indenture shall operate effectually
as (a) a grant of lien on and security interest in, and (b) an assignment of,
the Trust Estate.
Section 9.04 Severability of Lien. If the lien of this Indenture
shall be or shall ever become ineffectual, invalid, or unenforceable against any
part of the Trust Estate, which is not subject to the lien, because of want of
power or title in the Issuer, the inclusion of any such part shall not in any
way affect or invalidate the pledge and lien hereof against such part of the
Trust Estate as to which the Issuer in fact had the right to pledge.
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Section 9.05 Consent of Registered Owners Binds Successors. Any
request or consent of the Registered Owner of any Obligations given for any of
the purposes of this Indenture shall bind all future Registered Owners of the
same Obligation or any Obligations issued in exchange therefor or in
substitution thereof in respect of anything done or suffered by the Issuer or
the Indenture Trustee in pursuance of such request or consent.
Section 9.06 Nonpresentment of Notes or Interest Checks. Should any
of the Notes or interest checks not be presented for payment when due, the
Indenture Trustee shall retain from any money transferred to it for the purpose
of paying the Notes or interest checks so due, for the benefit of the Registered
Owners thereof, a sum of money sufficient to pay such Notes or interest checks
when the same are presented by the Registered Owners thereof for payment. Such
money shall not be required to be invested. All liability of the Issuer to the
Registered Owners of such Notes or interest checks and all rights of such
Registered Owners against the Issuer under the Notes or interest checks or under
this Indenture shall thereupon cease and determine, and the sole right of such
Registered Owners shall thereafter be against such deposit. If any Note or
interest check shall not be presented for payment within the period of two years
following its payment or redemption date, the Indenture Trustee shall return to
the Issuer the money theretofore held by it for payment of such Note or interest
check, and such Note or interest check shall (subject to the defense of any
applicable statute of limitation) thereafter be an unsecured obligation of the
Issuer. The Indenture Trustee's responsibility for any such money shall cease
upon remittance thereof to the Issuer.
Section 9.07 Laws Governing. It is the intent of the parties hereto
that this Indenture shall be construed in accordance with the laws of New York
without reference to its conflict of law provisions. This Indenture is subject
to the provisions of the TIA that are required to be part of this Indenture and
shall, to the extent applicable, be governed by such provisions.
Section 9.08 Severability. of any covenant, agreement, waiver, or
part thereof in this Indenture contained be forbidden by any pertinent law or
under any pertinent law be effective to render this Indenture invalid or
unenforceable or to impair the lien hereof, then each such covenant, agreement,
waiver, or part thereof shall itself be and is hereby declared to be wholly
ineffective, and this Indenture shall be construed as if the same were not
included herein.
Section 9.09 Exhibits. The terms of the Schedules and Exhibits, if
any, attached to this Indenture are incorporated herein in all particulars.
Section 9.10 Non-Business Days. Except as may otherwise be provided
herein, if the date for making payment of any amount hereunder or on any Note,
or if the date for taking any action hereunder, is not a Business Day, then such
payment can be made without accruing further interest or action can be taken on
the next succeeding Business Day, with the same force and effect as if such
payment were made when due or action taken on such required date.
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Section 9.11 Parties Interested Herein. Nothing in this Indenture
expressed or implied is intended or shall be construed to confer upon, or to
give to, any person or entity, other than the Indenture Trustee, the paying
agent, if any, and the Registered Owners of the Obligations, any right, remedy
or claim under or by reason of this Indenture or any covenant, condition or
stipulation hereof, and all covenants, stipulations, promises and agreements in
this Indenture contained by and on behalf of the Issuer shall be for the sole
and exclusive benefit of the Indenture Trustee, the paying agent, if any, and
the Registered Owners of the Obligations.
Section 9.12 Obligations Are Limited Obligations. The Notes and the
obligations of the Issuer contained in this Indenture are special, limited
obligations of the Issuer, secured by and payable solely from the Trust Estate
herein provided. The Issuer shall not be obligated to pay the Notes, the
interest thereon, or any other obligation created by or arising from this
Indenture from any other source.
Section 9.13 Counterparty Rights. Notwithstanding any provision of
this Indenture, no Counterparty which shall be in default under any Derivative
Product with the Issuer shall have any of the rights granted to a Counterparty
or as the Registered Owner of an Obligation hereunder.
Section 9.14 Disclosure of Names and Addresses of Registered Owners.
Registered Owners of Notes, by receiving and holding the same, agree with the
Issuer and the Indenture Trustee that neither the Issuer nor the Indenture
Trustee nor any Securities Depository shall be held accountable by reason of the
disclosure of any information as to the names and addresses of the Registered
Owners of Notes in accordance with TIA Section 312, regardless of the source
from which such information was derived, and that the Indenture Trustee shall
not be held accountable by reason of mailing any material pursuant to a request
made under TIA Section 312(b).
Section 9.15 Aggregate Principal Amount of Obligations. Whenever in
this Indenture reference is made to the aggregate principal amount of any
Obligations, such phrase shall mean, at any time, the principal amount of any
Notes and the Derivative Value of any Derivative Product.
Section 9.16 Financed Eligible Loans. The Issuer expects to acquire
Eligible Loans and to pledge Eligible Loans to the Indenture Trustee, in
accordance with this Indenture, which Eligible Loans, upon becoming subject to
the lien of this Indenture, constitute Financed Eligible Loans, as defined
herein. If for any reason a Financed Eligible Loan does not constitute an
Eligible Loan, or ceases to constitute an Eligible Loan, such loan shall
continue to be subject to the lien of this Indenture as a Financed Eligible
Loan.
ARTICLE X
PAYMENT AND CANCELLATION OF NOTES
AND SATISFACTION OF INDENTURE
Section 10.01 Trust Irrevocable. The trust created by the terms and
provisions of this Indenture is irrevocable until the indebtedness secured
hereby (the Notes and interest thereon) and all Issuer Derivative Payments are
fully paid or provision made for its payment as provided in this Article X.
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Section 10.02 Satisfaction of Indenture.
(a) If the Issuer shall pay, or cause to be paid, or there shall
otherwise be paid (i) to the Registered Owners of the Notes, the principal of
and interest on the Notes, at the times and in the manner stipulated in this
Indenture and (ii) to each Counterparty, all Issuer Derivative Payments then
due, then the pledge of the Trust Estate hereunder, and all covenants,
agreements, and other obligations of the Issuer to the Registered Owners of
Notes shall thereupon cease, terminate, and become void and be discharged and
satisfied. In such event, the Indenture Trustee shall execute and deliver to the
Issuer all such instruments as may be desirable to evidence such discharge and
satisfaction, and the Indenture Trustee shall pay over or deliver all money held
by it under this Indenture to the party entitled to receive the same under this
Indenture.
(b) Any Issuer Derivative Payments are deemed to have been paid and
the applicable Derivative Product terminated when payment of all Issuer
Derivative Payments due and payable to each Counterparty under its respective
Derivative Product have been made or duly provided for to the satisfaction of
each Counterparty and the respective Derivative Product has been terminated.
(c) In no event shall the Indenture Trustee deliver over to the
Issuer any Financed Eligible Loans originated under the Act unless the Issuer is
an Eligible Lender, if the Act or Regulations then in effect require the owner
or holder of such Financed Eligible Loans to be an Eligible Lender.
Section 10.03 Cancellation of Paid Notes. Any Notes which have been
paid or purchased by the Issuer, mutilated Notes replaced by new Notes, and any
temporary Note for which definitive Notes have been delivered shall (unless
otherwise directed by the Issuer by Issuer Order) forthwith be cancelled by the
Indenture Trustee and, except for temporary Notes, returned to the Issuer.
ARTICLE XI
TERMINATION
Section 11.01 Termination of the Trust.
(a) The trust created by this Indenture (the "Trust") shall
terminate upon the earlier of (i) the later of (A) payment to the Registered
Owners and to the Indenture Trustee of all amounts required to be paid to them
pursuant to this Indenture and any Supplemental Indenture and the disposition of
all property held as part of the Trust Estate or (B) the day following the date
on which all reimbursement obligations to the Counterparties, if any, and any
other Person as may be provided for in any Supplemental Indenture have been paid
in full, or (ii) the expiration of 21 years from the death of the last survivor
of the descendants of Joseph P. Kennedy (the late ambassador of the United
States to the Court of St. James) living on the date of this Indenture. The
Issuer shall promptly notify the Indenture Trustee of any prospective
termination pursuant to this Section 11.01.
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(b) Notice of any prospective termination, specifying the Note
Payment Date for payment of the final distribution and requesting the surrender
of the Notes for cancellation, shall be given promptly by the Indenture Trustee
by letter to Registered Owners mailed not less than 10 nor more than 15 days
preceding the specified Note Payment Date stating (i) the Note Payment Date upon
which final payment of the Notes shall be made, (ii) the amount of any such
final payment, and (iii) the location for presentation and surrender of the
Notes. Payment of the final distribution which shall be made only upon
presentation and surrender of the Notes at the corporate trust office of the
Indenture Trustee specified in the notice.
Section 11.02 Notice. The Indenture Trustee shall give notice of
termination of the Trust to the Issuer and each Rating Agency.
ARTICLE XII
REPORTING REQUIREMENTS
Section 12.01 Annual Statement as to Compliance. The Servicer will
deliver to each Rating Agency, the Indenture Trustee and the Issuer, on or
before March 31 of each year, beginning with March 31, 2003, a certificate
stating that (a) a review of the activities of the Servicer during the preceding
calendar year and of its performance under the Servicing Agreement has been made
under the supervision of the officer signing such certificate and (b) to the
best of such officers' knowledge, based on such review, the Servicer has
fulfilled all its obligations under the Servicing Agreement throughout such
year, or, there has been a default in the fulfillment of any such obligation,
specifying each such default known to such officer and the nature and statue
thereof.
Section 12.02 Annual Independent Public Accountants' Servicing
Report. On or before March 31 of each year, beginning March 31, 2003, the
Servicer at its expense shall cause a firm of independent public accountants
which is a member of the American Institute of Certified Public Accountants to
furnish a statement to each Rating Agency, the Issuer and the Indenture Trustee
to the effect that such firm has examined certain documents and records relating
to the servicing of the Financed Eligible Loans (during the preceding fiscal
year) under servicing agreements substantially similar one to another and to the
Servicing Agreement and that, on the basis of such examination, such servicing
has been conducted in compliance with such servicing agreements except for such
significant exceptions or errors in records that, in the opinion of such firm,
requires it to report and which are set forth in such report.
Section 12.03 Servicer's Certificate. Each month, not later than the
fifteenth day of each month, the Servicer shall deliver to the Indenture
Trustee, a certificate certified by an officer of the Servicer certifying to the
accuracy of the monthly statement contemplated by Section 12.04.
Section 12.04 Statements to Registered Owners. On or before the
fifteenth day of each month, the Issuer shall provide or cause to be provided to
the Indenture Trustee (with a copy to the Rating Agencies) for the Indenture
Trustee to forward within five days of receipt to each Registered Owner, a
statement setting forth at least the following information with respect to the
preceding month, to the extent applicable;
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(a) the amount of payments with respect to each series of Notes paid
with respect to principal during the preceding month;
(b) the amount of payments with respect to each series of Notes paid
with respect to interest during the preceding month;
(c) the amount of the payments allocable to any interest that was
carried over together with the amount of any remaining outstanding interest that
was carried over;
(d) the principal balance of Financed Eligible Loans as of the close
of business on the last day of the preceding month;
(e) the aggregate outstanding principal amount of the Notes of each
series as of the close of business on the last day of the preceding month, after
giving effect to payments allocated to principal reported under clause (a)
above;
(f) the interest rate for any series of variable rate Notes,
indicating such interest rate is calculated;
(g) the amount of the servicing fees allocated to the Servicer as of
the close of business on the last day of the preceding month;
(h) the amount of the administration fee, the auction agent fee,
market agent fee, calculation agent fee and the trustee fee, if any, allocated
as of the close of business on the last day of the preceding month;
(i) the amount of the recoveries of principal and interest received
during the preceding month relating to Financed Eligible Loans;
(j) the amount of the payment attributable to amounts in the Reserve
Fund, the amount of any other withdrawals from the Reserve Fund and the balance
of the Reserve Fund as of the close of business on the last day of the preceding
month;
(k) the portion, if any, of the payments attributable to amounts on
deposit in the Acquisition Fund;
(l) the aggregate amount, if any, paid by the Indenture Trustee to
acquire Eligible Loans from amounts on deposit in the Acquisition Fund during
the preceding month;
(m) the amount remaining in the Acquisition Fund that has not been
used to acquire Eligible Loans and is being transferred to the Revenue Fund;
(n) the aggregate amount, if any, paid for Financed Eligible Loans
purchased from the Trust during the preceding month;
(o) the number and principal amount of Financed Eligible Loans, as
of the close of business on the last day of the preceding month, that are (i) 30
to 60 days delinquent, (ii) 61 to 90 days delinquent, (iii) 91 to 120 days
delinquent, (iv) 121 to 180 days delinquent, (v) 181 to 240 days delinquent and
(vi) for which claims have been filed with the appropriate Guarantee Agency and
which are awaiting payment; and
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(p) the Aggregate Market Value of the Trust Estate and the
Outstanding principal amount of the Notes as of the close of business on the
last day of the preceding month.
Each amount set forth pursuant to paragraph (a), (b), (g) and (h)
above shall be expressed as a dollar amount per authorized denomination of a
Note. A copy of the statements referred to above may be obtained by any
Registered Owner by a written request to the Indenture Trustee, addressed to its
corporate trust office.
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IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused
this Indenture to be duly executed by their respective officers, thereunto duly
authorized and duly attested, all as of the day and year first above written.
SLC STUDENT LOAN TRUST-I
By:[WILMINGTON TRUST COMPANY],
not in its individual capacity but
solely as Issuer Trustee
By
------------------------------------
Name:
Title:
Bankers Trust Company, not in its
individual capacity but solely as
Indenture Trustee
By
------------------------------------
Name:
Title:
Acknowledged and accepted as to the
Granting Clauses as of the day and year
first above written:
Bankers Trust Company, not in its
individual capacity but solely as
Eligible Lender Trustee
By
------------------------------------
Name:
Title:
The Student Loan Corporation hereby acknowledges and accepts the
duties and obligations assigned to the Servicer in Article XII hereof.
THE STUDENT LOAN CORPORATION, as Servicer
By
------------------------------------
Name:
Title:
EXHIBIT A
ELIGIBLE LOAN ACQUISITION CERTIFICATE
This Eligible Loan Acquisition Certificate is submitted pursuant to
the provisions of Section 5.02 of the Indenture of Trust, dated as of _________
_, 200_ (the "Indenture"), between SLC Student Loan Trust-I (the "Issuer") and
Bankers Trust Company, as Indenture Trustee. All capitalized terms used in this
Certificate and not otherwise defined herein shall have the same meanings given
to such terms in the Indenture. In your capacity as Indenture Trustee, you are
hereby authorized and requested to disburse to _________________ (the "Lender")
the sum of $____________ (or, in the case of an exchange, the Eligible Loans
listed in Exhibit A hereto) for the acquisition of Eligible Loans. With respect
to the Eligible Loans so to be acquired, the Issuer hereby certifies as follows:
1. The Eligible Loans to be acquired are those specified in Schedule
A attached hereto (the "Acquired Eligible Loans"). The remaining unpaid
principal amount of each Acquired Eligible Loan is as shown on such Schedule A.
2. The amount to be disbursed pursuant to this Certificate does not
exceed the amount permitted by Section 5.02 of the Indenture (or, if a Financed
Eligible Loan is being sold in exchange for an Acquired Eligible Loan under the
Indenture, the aggregate unpaid principal amount of, and accrued interest on,
such Financed Eligible Loan does not exceed the amount permitted by Section 5.02
of the Indenture).
3. Each Acquired Eligible Loan is an Eligible Loan authorized so to
be acquired by the Indenture.
4. You have been previously, or are herewith, provided with the
following items (the items listed in (a), (b), (c), (d), (f) and (g) have been
received and are being retained, on your behalf, by the Issuer or the Servicer):
(a) a copy of the Student Loan Transfer Agreement between the Issuer
and the Eligible Lender with respect to the Acquired Eligible Loans;
(b) with respect to each Insured Loan included among the Acquired
Eligible Loans, the Certificate of Insurance relating thereto;
(c) with respect to each Guaranteed Loan included among the Acquired
Eligible Loans, a certified copy of the Guarantee Agreement relating thereto;
(d) an opinion of counsel to the Issuer specifying each action
necessary to perfect a security interest in all Eligible Loans to be acquired by
the Issuer pursuant to the Student Loan Transfer Agreements in favor of the
Indenture Trustee in the manner provided for by the provisions of 20 U.S.C. ss.
1087-2(d)(3) (you are authorized to rely on the advice of a single blanket
opinion of counsel to the Issuer until such time as the Issuer shall provide any
amended opinion to you);
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(e) a certificate of an Authorized Officer of the Issuer to the
effect that (i) the Issuer is not in default in the performance of any of its
covenants and agreements made in the Student Loan Transfer Agreement relating to
the Acquired Eligible Loans; (ii) with respect to all Acquired Eligible Loans
which are Insured, Insurance is in effect with respect thereto, and with respect
to all Acquired Eligible Loans which are Guaranteed, the Guarantee Agreement is
in effect with respect thereto; and (iii) the Issuer is not in default in the
performance of any of its covenants and agreements made in any Contract of
Insurance or the Guarantee Agreement applicable to the Acquired Eligible Loans;
(f) evidence that the promissory notes evidencing the Acquired
Eligible Loans have had stamped thereon or affixed thereto (individually or by
blanket endorsement) a notice specifying that they have been assigned to the
Indenture Trustee with all necessary endorsements; and
(g) instruments duly assigning the Acquired Eligible Loans to the
Indenture Trustee.
5. The Issuer is not, on the date hereof, in default under the
Indenture or in the performance of any of its covenants and agreements made in
the Student Loan Transfer Agreement relating to the Acquired Eligible Loans,
and, to the best knowledge of the Issuer, the Eligible Lender is not in default
under the Student Loan Transfer Agreement applicable to the Acquired Eligible
Loans. The Issuer is not aware of any default existing on the date hereof under
any of the other documents referred to in paragraph 4 hereof, nor of any
circumstances which would reasonably prevent reliance upon the opinion of
counsel referred to in paragraphs 4(d) hereof.
6. All of the conditions specified in the Student Loan Transfer
Agreement applicable to the Acquired Eligible Loans and the Indenture for the
acquisition of the Acquired Eligible Loans and the disbursement hereby
authorized and requested have been satisfied; provided that the Issuer may waive
the requirement of receiving an opinion of counsel from the counsel to the
Lender.
7. If a Financed Eligible Loan is being sold in exchange for an
Acquired Eligible Loan, the final expected maturity date of such Acquired
Eligible Loan shall be substantially similar to that of the Financed Eligible
Loan being sold and such sale and exchange shall not adversely affect the
ability of the Trust Estate to make timely principal and interest payments on
its Obligations.
8. With respect to all Acquired Eligible Loans which are Insured,
Insurance is in effect with respect thereto, and with respect to all Acquired
Eligible Loans which are Guaranteed, the Guarantee Agreement is in effect with
respect thereto.
9. The Issuer is not in default in the performance of any of its
covenants and agreements made in any Contract of Insurance or the Guarantee
Agreement applicable to the Acquired Eligible Loans.
10. The undersigned is authorized to sign and submit this
Certificate on behalf of the Issuer.
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11. Eligible Loans are being acquired at a price which permits the
results of the cash flow analyses provided to the Rating Agencies on the Date of
Issuance to be sustained.
WITNESS my hand this _____ day of ___________.
SLC STUDENT LOAN TRUST-I
By
-----------------------------------
Name:
Title:
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EXHIBIT A
Eligible Loans To Be Acquired