EXHIBIT 10.76
AMS-3 2003, LP,
as the Issuer
and
BANK ONE, NATIONAL ASSOCIATION,
as Indenture Trustee and Eligible Lender Trustee
----------
BASE INDENTURE
Dated as of May 8, 2003
----------
Student Loan-Backed Notes
(Issuable in Series)
TABLE OF CONTENTS
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PAGE
ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE .......................... 1
Section 1.1. Definitions ..................................................... 1
Section 1.2. Cross-References ................................................ 1
Section 1.3. Accounting and Financial Determinations; No
Duplication ..................................................... 2
Section 1.4. Rules of Construction ........................................... 2
ARTICLE II THE NOTES .......................................................... 3
Section 2.1. Designation and Terms of Notes .................................. 3
Section 2.2. Notes Issuable in Series ........................................ 3
Section 2.3. Series Supplement for Each Series ............................... 6
Section 2.4. Execution and Authentication .................................... 8
Section 2.5. Form, Issuance and Transfer ..................................... 9
Section 2.6. Registrar and Paying Agent ...................................... 9
Section 2.7. Paying Agent to Hold Money in Trust ............................. 10
Section 2.8. Noteholder List ................................................. 12
Section 2.9. Transfer and Exchange ........................................... 12
Section 2.10. Legending of Notes .............................................. 12
Section 2.11. Replacement Notes ............................................... 12
Section 2.12. Treasury Notes .................................................. 13
Section 2.13. Temporary Notes ................................................. 13
Section 2.14. Cancellation .................................................... 13
Section 2.15. Principal and Interest .......................................... 14
Section 2.16. Book-Entry Notes ................................................ 14
Section 2.17. Notices to Clearing Agency ...................................... 16
Section 2.18. [Reserved] ...................................................... 16
Section 2.19. Tax Treatment ................................................... 16
Section 2.20. CUSIP Numbers ................................................... 17
ARTICLE III SECURITY .......................................................... 17
Section 3.1. Grant of Security Interest ...................................... 17
Section 3.2. Certain Rights and Obligations of the Issuer Unaffected ......... 18
Section 3.3. [Reserved] ...................................................... 19
Section 3.4. Stamp, Other Similar Taxes and Filing Fees ...................... 19
Section 3.5. Release from Lien of Indenture .................................. 19
ARTICLE IV REPORTS ............................................................ 20
Section 4.1. Agreement of the Issuer to Provide Reports and
Instructions .................................................... 20
Section 4.2. Monthly Noteholders' Statement .................................. 21
Section 4.3. Annual Noteholders' Tax Statement ............................... 21
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TABLE OF CONTENTS
(continued)
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ARTICLE V ALLOCATION AND APPLICATION OF COLLECTIONS;
CAPITALIZED INTEREST ACCOUNT; RESERVE
ACCOUNT ............................................................. 22
Section 5.1. Rights of Noteholders ........................................... 22
Section 5.2. Collection Account .............................................. 22
Section 5.3. Collections and Allocations ..................................... 23
Section 5.4. Determination of Interest ....................................... 24
Section 5.5. Determination of Principal ...................................... 24
Section 5.6. Paired Series ................................................... 24
Section 5.7. Capitalized Interest Account .................................... 25
Section 5.8. Administration of Capitalized Interest Account .................. 25
Section 5.9. Allocations ..................................................... 26
Section 5.10. Reserve Account ................................................. 26
ARTICLE VI DISTRIBUTIONS TO NOTEHOLDERS ....................................... 27
Section 6.1. Distributions in General ........................................ 27
Section 6.2. Optional Repurchase of Notes .................................... 28
ARTICLE VII REPRESENTATIONS AND WARRANTIES .................................... 28
Section 7.1. Representations and Warranties of the Issuer .................... 28
Section 7.2. Representations and Warranties of the General Partner ........... 31
Section 7.3. Representations and Warranties of the Indenture
Trustee ......................................................... 32
Section 7.4. Representations and Warranties of Eligible Lender
Trustee ......................................................... 32
Section 7.5. Reassignment upon Breach ........................................ 33
ARTICLE VIII COVENANTS ........................................................ 34
Section 8.1. Payment of Notes ................................................ 34
Section 8.2. Money for Payments to Be Held in Trust .......................... 34
Section 8.3. Existence ....................................................... 36
Section 8.4. Protection of Indenture Trust Estate ............................ 36
Section 8.5. Performance of Obligations ...................................... 37
Section 8.6. Reporting Requirements of the Issuer ............................ 39
Section 8.7. Servicing Covenants ............................................. 39
Section 8.8. Negative Covenants of the Issuer ................................ 41
Section 8.9. Issuer May Consolidate, etc., Only on Certain Terms ............. 41
Section 8.10. Successor or Transferee ......................................... 43
Section 8.11. No Other Business ............................................... 43
Section 8.12. No Borrowing .................................................... 43
Section 8.13. Guarantees, Loans, Advances and Other Liabilities ............... 44
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TABLE OF CONTENTS
(continued)
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ARTICLE IX EVENTS OF DEFAULTS AND REMEDIES .................................... 44
Section 9.1. Event of Defaults ............................................... 44
Section 9.2. Rights of the Indenture Trustee upon Events of Default .......... 45
Section 9.3. Other Remedies .................................................. 47
Section 9.4. Optional Preservation of the Indenture Trust Estate ............. 49
Section 9.5. Limitation on Suits ............................................. 49
Section 9.6. Unconditional Rights of Holders to Receive Payment;
Withholding Taxes ............................................... 49
Section 9.7. Restoration of Rights and Remedies .............................. 50
Section 9.8. Rights and Remedies Cumulative .................................. 50
Section 9.9. Delay or Omission Not Waiver .................................... 50
Section 9.10. Control by Requisite Investors or Required Noteholders .......... 50
Section 9.11. Waiver of Past Events ........................................... 51
Section 9.12. Collection of Indebtedness and Suits for Enforcement
by Indenture Trustee ............................................ 51
Section 9.13. The Indenture Trustee May File Proofs of Claim .................. 54
Section 9.14. Priorities ...................................................... 54
Section 9.15. Undertaking for Costs ........................................... 54
Section 9.16. Reassignment of Surplus ......................................... 54
Section 9.17. Waiver of Stay or Extension Laws ................................ 55
Section 9.18. Action on Notes ................................................. 55
Section 9.19. Remedies; Priorities ............................................ 55
ARTICLE X THE INDENTURE TRUSTEE ............................................... 57
Section 10.1. Acceptance of the Trusts ....................................... 57
Section 10.2. [Reserved] ..................................................... 59
Section 10.3. Notice if Default Occurs ....................................... 59
Section 10.4. Intervention by Indenture Trustee .............................. 59
Section 10.5. Successors ..................................................... 59
Section 10.6. Resignation .................................................... 60
Section 10.7. Removal ........................................................ 60
Section 10.8. Appointment of Successor ....................................... 60
Section 10.9. Concerning Any Successor ....................................... 60
Section 10.10. Appointment of Co-Indenture Trustee or Separate
Indenture Trustee .............................................. 61
Section 10.11. Successor Indenture Trustee as Trustee of Funds ................ 62
Section 10.12. Indemnification ................................................ 62
Section 10.13. Eligibility Requirements for Indenture Trustee ................. 63
ARTICLE XI DISCHARGE OF BASE INDENTURE ........................................ 63
Section 11.1. Termination of the Issuer's Obligations ......................... 63
Section 11.2. Application of Trust Money ...................................... 65
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TABLE OF CONTENTS
(continued)
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Section 11.3. Repayment to the Issuer ............................... 65
ARTICLE XII AMENDMENTS .............................................. 65
Section 12.1. Without Consent of the Noteholders .................... 65
Section 12.2. With Consent of the Noteholders ....................... 67
Section 12.3. Supplements ........................................... 68
Section 12.4. Revocation and Effect of Consents ..................... 68
Section 12.5. Notation on or Exchange of Notes ...................... 68
Section 12.6. The Indenture Trustee to Sign Amendments, etc. ........ 68
Section 12.7. Amendments of Certain Defined Terms ................... 68
ARTICLE XIII MISCELLANEOUS .......................................... 69
Section 13.1. Notices .............................................. 69
Section 13.2. Communication by Noteholders With Other
Noteholders .......................................... 70
Section 13.3. Certificate and Opinion as to Conditions Precedent ... 70
Section 13.4. Statements Required in Certificate ................... 70
Section 13.5. Rules by the Indenture Trustee ....................... 71
Section 13.6. No Recourse Against Others ........................... 71
Section 13.7. Duplicate Originals .................................. 71
Section 13.8. Benefits of Base Indenture ........................... 71
Section 13.10. Governing Law; Waiver of Jury Trial .................. 71
Section 13.11. Successors ........................................... 72
Section 13.12. Severability ......................................... 72
Section 13.13. Counterpart Originals ................................ 72
Section 13.14. Table of Contents, Headings, etc. .................... 72
Section 13.15. Termination; Collateral .............................. 72
Section 13.16. No Bankruptcy Petition Against the Issuer ............ 73
Section 13.17. No Recourse; Limitation of Obligations ............... 73
Section 13.18. Waiver of Set-Off .................................... 74
Section 13.19. Compliance Certificates and Opinions ................. 74
Section 13.20. Higher Education Act ................................. 74
Section 13.21. Confidentiality ...................................... 75
Schedule I: Definitions List
Schedule II: List of Offices Where Records are Kept
Exhibit A: [Reserved]
Exhibit B: [Reserved]
Exhibit C: [Reserved]
Exhibit D: Form of Quarterly Report
Appendix A: Alternative Loan Schedule and Student Loan Schedule
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BASE INDENTURE, dated as of May 8, 2003, between AMS-3 2003, LP, a
limited partnership established under the laws of Delaware, as the Issuer (the
"Issuer"), and BANK ONE, NATIONAL ASSOCIATION, a national banking association
organized under the laws of the United States, as indenture trustee (in such
capacity, the "Indenture Trustee") and as eligible lender trustee (in such
capacity, the "Eligible Lender Trustee").
WITNESSETH:
WHEREAS, the Issuer is a limited partnership with Academic Management
Services Corp., a Delaware corporation ("AMS") as its Limited Partner and AMS-3
SPC-1, Inc., a Delaware corporation, as its General Partner (the "General
Partner");
WHEREAS, the Issuer has duly authorized the execution and delivery of
this Base Indenture to provide for the issuance from time to time of one or more
series of Student Loan-Backed Notes (the "Notes"), issuable as provided in this
Base Indenture; and
WHEREAS, all things necessary to make this Base Indenture a legal,
valid and binding agreement of the Issuer, enforceable in accordance with its
terms, have been done, and the Issuer proposes to do all the things necessary to
make the Notes, when executed by the Issuer and authenticated and delivered by
the Indenture Trustee hereunder and duly issued by the Issuer, the legal, valid
and binding obligations of the Issuer hereinafter provided;
NOW, THEREFORE, for and in consideration of the premises and the
receipt of the Notes by the Noteholders, it is mutually covenanted and agreed,
for the equal and proportionate benefit of all Noteholders, as follows:
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1. Definitions. (a) Certain capitalized terms used herein
(including the preamble and the recitals hereto) shall have the meanings
assigned to such terms in the Definitions List attached hereto as Schedule I
(the "Definitions List"), as such Definitions List may be amended, restated or
modified from time to time in accordance with the provisions hereof.
(b) All terms defined in this Base Indenture or any Series Supplement
shall have the defined meanings when used in any certificate or other document
made or delivered pursuant hereto unless otherwise defined therein.
Section 1.2. Cross-References. Unless otherwise specified, references
in this Base Indenture and in each other Related Document to any Article or
Section are
references to such Article or Section of this Base Indenture or such other
Related Document, as the case may be, and, unless otherwise specified,
references in any Article, Section or definition to any clause are references to
such clause of such Article, Section or definition.
Section 1.3. Accounting and Financial Determinations; No Duplication.
Where the character or amount of any asset or liability or item of income or
expense is required to be determined, or any accounting computation is required
to be made, for the purpose of this Base Indenture, such determination or
calculation shall be made, to the extent applicable and except as otherwise
specified in this Base Indenture, in accordance with GAAP applied on a
consistent basis. When used herein, the term "financial statement" shall include
the notes and schedules thereto. All accounting determinations and computations
hereunder or under any other Related Documents shall be made without
duplication.
Section 1.4. Rules of Construction. In this Base Indenture, unless the
context otherwise requires:
(i) "or" is not exclusive;
(ii) the singular includes the plural and vice versa;
(iii) reference to any Person includes such Person's successors and
assigns but, if applicable, only if such successors and assigns are permitted by
this Base Indenture, and reference to any Person in a particular capacity only
refers to such Person in such capacity;
(iv) reference to any gender includes the other gender;
(v) "including" (and with correlative meaning "include") means
including without limiting the generality of any description preceding such
term;
(vi) with respect to the determination of any period of time, "from"
means "from and including" and "to" means "to but excluding"; and
(vii) the words "hereof," "herein" and "hereunder" and words of similar
import when used in this Base Indenture shall refer to this Base Indenture as a
whole and not to any particular provision of this Base Indenture; and Section,
subsection, Schedule and Exhibit references contained in this Base Indenture are
references to Sections, subsections, Schedules and Exhibits in or to this Base
Indenture unless otherwise specified.
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ARTICLE II
THE NOTES
Section 2.1. Designation and Terms of Notes. Each Series of Notes shall
be substantially in the form specified in the applicable Series Supplement and
shall bear, upon its face, the designation for such Series to which it belongs
so selected by the Issuer. All Notes of any Series shall, except as specified in
the related Series Supplement, be equally and ratably entitled as provided
herein to the benefits hereof without preference, priority or distinction on
account of the actual time or times of authentication and delivery, all in
accordance with the terms and provisions of this Base Indenture and the
applicable Series Supplement. The aggregate principal amount of Notes which may
be authenticated and delivered under this Base Indenture is unlimited. Each
Series of Notes shall be issued in the minimum denominations set forth in the
related Series Supplement.
Section 2.2. Notes Issuable in Series. The Notes may be issued in one
or more Series. Each Series of Notes shall be created by a Series Supplement.
Notes of a new Series may from time to time be executed by the Issuer and
delivered to the Indenture Trustee for authentication and thereupon the same
shall be authenticated and delivered by the Indenture Trustee upon the receipt
by a Trust Officer of the Indenture Trustee of an Issuer Request at least two
(2) Business Days (or such shorter time as is acceptable to the Indenture
Trustee) in advance of the related Series Closing Date and upon delivery by the
Issuer to the Indenture Trustee, and receipt by a Trust Officer of the Indenture
Trustee, of the following:
(a) an Issuer Order authorizing and directing the authentication and
delivery of the Notes of such new Series by the Indenture Trustee and specifying
the designation of such new Series, the aggregate principal amount of Notes of
such new Series to be authenticated and the Note Rate (or the method for
allocating interest payments or other cash flow) with respect to such new
Series;
(b) a Series Supplement in form satisfactory to the Indenture Trustee
executed by the Issuer, the Indenture Trustee and the Eligible Lender Trustee
and specifying the Principal Terms of such new Series;
(c) the related Enhancement Agreement, if any, executed by each of the
parties thereto, other than the Indenture Trustee;
(d) with respect to each Series of Notes issued after the Initial
Closing Date, written confirmation that the Rating Agency Confirmation Condition
with respect to each outstanding Series of Notes shall have been satisfied with
respect to such issuance;
(e) an Officer's Certificate of the General Partner of the Issuer dated
as of the applicable Series Closing Date to the effect that (i) no Event of
Default with
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respect to any outstanding Series of Notes, Enhancement Agreement Event of
Default or Enhancement Deficiency with respect to any outstanding Series of
Notes, Potential Event of Default or potential Enhancement Agreement Event of
Default with respect to any outstanding Series of Notes, is continuing or will
occur as a result of the issuance of the new Series of Notes, (ii) the issuance
of the new Series of Notes will not result in any breach of any of the terms,
conditions or provisions of or constitute a default under any Base Indenture,
mortgage, deed of trust or other agreement or instrument to which the Issuer is
a party or by which it or its property is bound or any order of any court or
administrative agency entered in any suit, action or other judicial or
administrative proceeding to which the Issuer is a party or by which it or its
property may be bound or to which it or its property may be subject, (iii) all
representations and warranties of the Issuer set forth in the Base Indenture and
each Related Document with respect to each outstanding Series of Notes are true
and correct (excluding Related Documents relating solely to a Segregated Series)
in all material respects (to the extent any such representations and warranties
do not incorporate a materiality limitation in their terms) as of the Series
Closing Date, (iv) all instruments furnished to the Indenture Trustee conform in
all material respects to the requirements of this Base Indenture and the related
Series Supplement and constitute all the documents required to be delivered
hereunder and thereunder for the Indenture Trustee to authenticate and deliver
the new Series of Notes, (v) all conditions precedent provided in this Base
Indenture and the related Series Supplement with respect to the authentication
and delivery of the new Series of Notes have been complied with and (vi) if such
new Series of Notes is a Segregated Series, the criteria used to select the
Series-Specific Collateral will not have a material adverse effect on the
quality of the Collateral securing any other outstanding Series of Notes;
(f) unless otherwise specified in the related Series Supplement, an
Opinion of Counsel, subject to the assumptions and qualifications stated
therein, and in a form substantially acceptable to the Indenture Trustee, dated
the applicable Series Closing Date, substantially to the effect that:
(i) (A) the Issuer is duly organized under the jurisdiction of its
organization and has, or at the time of execution and delivery had, the power
and authority to execute and deliver the related Series Supplement, this Base
Indenture and each other Related Document to which it is a party (other than any
Series Supplement, Enhancement Agreement, if any, or other Related Document
relating solely to another Series of Notes) and to issue the new Series of
Notes; and (B) the General Partner of the Issuer is duly organized under the
jurisdiction of its organization and has, or at the time of execution and
delivery, had the power and authority to execute and deliver each of the Related
Documents to which it is a party;
(ii) the related Series Supplement, this Base Indenture and each of the
other Related Documents to which the Issuer is a party (other than any Series
Supplement, Enhancement Agreement, if any, or other Related Document relating
solely to another Series of Notes) have been duly authorized, executed and
delivered by the Issuer;
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(iii) the new Series of Notes has been duly authorized and executed
and, when authenticated and delivered in accordance with the provisions of this
Base Indenture and the related Series Supplement, will constitute valid, binding
and enforceable obligations of the Issuer entitled to the benefits of this Base
Indenture and the related Series Supplement, subject, in the case of
enforcement, to bankruptcy, insolvency, reorganization, moratorium and other
similar laws affecting creditors' rights generally and to general principles of
equity and by an implied covenant of good faith and fair dealing;
(iv) this Base Indenture, the related Series Supplement and each of the
other Related Documents to which the Issuer is a party (other than any Series
Supplement, Enhancement Agreement, if any, or other Related Document relating
solely to another Series of Notes) are legal, valid and binding agreements of
the Issuer, enforceable in accordance with their respective terms, subject to
bankruptcy, insolvency, reorganization, moratorium and other similar laws
affecting creditors' rights generally and to general principles of equity and by
an implied covenant of good faith and fair dealing;
(v) the Issuer is not, and is not controlled by, an "investment
company" within the meaning of, and is not required to register as an
"investment company" under, the Investment Company Act, and neither this Base
Indenture nor the related Series Supplement are required to be registered under
the Trust Indenture Act;
(vi) the offer and sale of the new Series of Notes is not required to
be registered under the Securities Act;
(vii) this Base Indenture and the related Series Supplement are
effective to create a legal, valid and enforceable security interest in the
Collateral and that such security interest constitutes a first priority,
perfected security interest in the Collateral;
(viii) there does not exist any pending or threatened litigation which,
if adversely determined, would materially and adversely affect the ability of
the Issuer to perform its obligations under any of the Related Documents;
(ix) there is no conflict with or violation of any court decree,
injunction, writ or order applicable to the Issuer or any breach or default of
any indenture, agreement or other instrument as a result of the issuance of such
Series of Notes by the Issuer; and
(x) such other matters as the Indenture Trustee may reasonably require;
(g) executed counterparts of each of the Related Documents with respect
to such new Series, duly executed by the parties thereto;
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(h) evidence that each of the parties to the Related Documents (other
than any Series Supplement, Enhancement Agreement, if any, or other Related
Document relating solely to another Series of Notes) has covenanted and agreed
that, prior to the date which is one year and one day after the payment in full
of the latest maturing Note, it will not institute against, or join with any
other Person in instituting, against the Issuer, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings, under
any Federal or state bankruptcy or similar law;
(i) evidence of the grant by the Issuer to the Indenture Trustee of a
first priority, perfected security interest in and to the Collateral;
(j) evidence (which, in the case of the filing of financing statements
on form UCC-1, may be telephonic, followed by prompt written confirmation) that,
to the extent the Collateral is subject to delivery, the Issuer has delivered
the Collateral to the Indenture Trustee in accordance with the requirements of
the related Series Supplement and has caused all filings (including filing of
financing statements on form UCC-l) and recordings to be accomplished as may be
reasonably required by law to establish, perfect, protect and preserve the
rights, titles, interests, remedies, powers, privileges, licenses and security
interest of the Indenture Trustee in the Collateral for the benefit of the
Secured Parties; and
(k) such other documents, instruments, certifications, agreements or
other items as the Indenture Trustee may reasonably require.
Upon satisfaction of such conditions, the Indenture Trustee shall
authenticate and deliver, as provided above, such Series of Notes upon execution
thereof by the Issuer.
Section 2.3. Series Supplement for Each Series. (a) In conjunction with
the issuance of a new Series, the parties hereto shall execute a Series
Supplement, which shall specify the relevant terms with respect to such new
Series of Notes, which shall include, without limitation, as applicable: (i) the
name or designation of such Series, (ii) the aggregate principal amount of Notes
of such Series (which may be a variable amount), (iii) the Note Rate (or the
method for calculating such Note Rate) with respect to such Series, (iv) the
interest payment date or dates and the date or dates from which interest shall
accrue, (v) the method of allocating Collections with respect to such Series and
the method by which the principal amount of Notes of such Series shall amortize
or accrete, (vi) the names of any accounts to be used by such Series and the
terms governing the operation of any such account and the use of moneys therein,
(vii) the terms of any Enhancement Agreement, if any, (viii) the Enhancement
Provider, if any, (ix) whether the Notes may be issued in bearer form and any
limitations imposed thereon, (x) the Final Scheduled Payment Date, (xi) whether
the Notes will be issued in multiple classes and, if so, the method of
allocating Collections among such classes, (xii) whether such Series of Notes
shall have the benefit of Series-Specific Collateral for such Series (xiii) any
issuance and transfer restrictions, including whether the Notes may be issued in
definitive or global form and any limitations imposed thereon and (xiv) any
other relevant terms of
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such Series of Notes that do not (subject to Section 2.3(b) and Article 12
hereof) change the terms of any outstanding Series of Notes or otherwise
materially conflict with the provisions of this Base Indenture and that do not
prevent the satisfaction of the Rating Agency Confirmation Condition with
respect to each outstanding Series of Notes with respect to the issuance of such
new Series (all such terms, the "Principal Terms" such Series);
(b) (i) A Series Supplement may specify that the related Series of
Notes (each, a "Segregated Series") will have collateral that is to be solely
for the benefit of the Noteholders of such Segregated Series of Notes and any
other Segregated Series of Notes specified in such Series Supplement (such
collateral being referred to as "Series-Specific Collateral"); provided,
however, that no such Segregated Series of Notes will be issued unless (A) the
Rating Agency Confirmation Condition with respect to each outstanding Series of
Notes is met with respect to the issuance of such Segregated Series of Notes,
(B) the Issuer shall have delivered to the Indenture Trustee an Officer's
Certificate to the effect that the issuance of such Segregated Series of Notes
will not have a material adverse effect upon the Noteholders of any Series of
Notes outstanding at the time of the issuance of the Segregated Series of Notes,
and (C) the applicable Series Supplement provides, in form satisfactory to the
Indenture Trustee, for the changes and modifications to the Base Indenture and
the other Related Documents as are described in clause (ii) below.
(ii) In the event any Segregated Series of Notes is issued, the related
Series Supplement will provide that (A) the Indenture Trustee will identify the
collateral for such Segregated Series of Notes such that (1) the Series-Specific
Collateral will secure only the Segregated Series of Notes to which such
Series-Specific Collateral is applicable and (2) the Noteholders with respect to
any other Series of Notes will not be entitled to the benefit of such
Series-Specific Collateral, (B) the Indenture Trustee will adjust the
allocations and distributions to be made under the Base Indenture so that the
Noteholders with respect to the Segregated Series of Notes will be entitled to
allocations and distributions arising solely from the Series-Specific Collateral
applicable to such Segregated Series of Notes and the Noteholders with respect
to the non-Segregated Series of Notes will be entitled to allocations and
distributions arising solely from the non-Series-Specific Collateral, (C) the
Indenture Trustee will act as collateral agent under the Base Indenture (and in
such capacity the Indenture Trustee shall (1) establish and maintain a master
collection account, and one or more segregated collection accounts, into which
Collections allocated to all Series of Notes will be deposited and, after such
deposit, further allocated among one or more Segregated Series of Notes and the
non-Segregated Series of Notes and (2) hold its lien encumbering the
non-Series-Specific Collateral for the benefit of the non-Segregated Series of
Notes and hold its lien encumbering the Series-Specific Collateral for the
benefit of the applicable Segregated Series of Notes), (D) the Noteholders of
the Segregated Series of Notes will, subject to the limitations contained in
this Base Indenture and the applicable Series Supplement, be entitled to direct
the Indenture Trustee in writing to exercise the remedies under the Base
Indenture solely on behalf of such Segregated Series of Notes, (E) separate
monthly
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reports and other information will be furnished under the Base Indenture for the
Series-Specific Collateral, which monthly reports and other information will
contain substantially the same type of information as the monthly reports
provided under the Base Indenture prior to the issuance of such Segregated
Series of Notes, (F) the Issuer will take such actions as are necessary to
perfect the Indenture Trustee's interest on behalf of the Noteholders of such
Series in the Series-Specific Collateral, (H) amendments will be made to this
Base Indenture and the other Related Documents, if necessary, to reflect the
foregoing, provided that any such amendment shall not have a material adverse
effect on the Noteholders of any Series unless the Required Noteholders of such
Series shall have given their prior written consent thereto (and, with respect
to each Series, the Indenture Trustee may conclusively rely on an Officer's
Certificate as sufficient evidence of such lack of a material adverse effect),
(I) for purposes of the Segregated Series, terms that are defined both in the
applicable Series Supplement and in Schedule I to the Base Indenture, shall for
purposes of such Series Supplement and the Base Indenture as it relates to such
Segregated Series, have the meanings assigned to them in such Series Supplement
and (J) references herein to "all" or "each" Series of Notes or words of similar
import (other than as specifically stated herein) shall be modified to refer to
all or each Series of Notes other than any Segregated Series of Notes which may
hereafter be issued.
Section 2.4. Execution and Authentication. (a) Each Note shall be
executed by the manual or the facsimile signature on behalf of the Issuer by any
of the Authorized Officers of the Issuer. Notes bearing the manual or facsimile
signature of the individual who was, at the time when such signature was
affixed, authorized to sign on behalf of the Issuer shall not be rendered
invalid, notwithstanding that such individual has ceased to be so authorized
prior to the authentication and delivery of such Notes or does not hold such
office at the date of such Notes.
(b) From time to time after the execution and delivery of this Base
Indenture, the Issuer may deliver Notes of any particular Series executed by the
Issuer to the Indenture Trustee for authentication, together with one or more
Issuer Orders for the authentication and delivery of such Notes, and the
Indenture Trustee, in accordance with such Issuer Order and this Base Indenture,
shall authenticate and deliver such Notes.
(c) Unless otherwise provided in the related Series Supplement, no Note
shall be entitled to any benefit under this Base Indenture or be valid for any
purpose unless there appears on such Note a certificate of authentication
substantially in the form provided for herein, duly executed by the Indenture
Trustee by the manual signature of a Trust Officer and the agent of a foreign
exchange (the "Non-U.S. Exchange Agent"), if such Notes are listed on a non-U.S.
stock exchange, and such certificate shall be conclusive evidence, and the only
evidence, that the Note has been duly authenticated under this Base Indenture.
The Indenture Trustee may appoint an authenticating agent acceptable to the
Issuer to authenticate Notes. Unless limited by the term of such appointment, an
authenticating agent may authenticate Notes whenever the Indenture Trustee may
do so. Each reference in this Base Indenture to authentication by the Indenture
Trustee includes authentication by such agent. An authenticating agent has the
8
same rights as an Agent to deal with the Issuer or an Affiliate of the Issuer.
The Indenture Trustee's certificate of authentication shall be in substantially
the following form:
This is one of the [ENTER SPECIFIC NAME OF NOTE] (i) of a series issued
under the within mentioned Base Indenture and (ii) designated above and referred
to in the within mentioned [ENTER NAME OF SERIES SUPPLEMENT.].
BANK ONE, NATIONAL ASSOCIATION,
not in its individual capacity but solely as
Indenture Trustee,
By:
-----------------------------------------
Authorized Signatory
Date:
(d) Each Note shall be dated and issued as of the date of its
authentication by the Indenture Trustee.
(e) Notwithstanding the foregoing, if any Note shall have been
authenticated and delivered hereunder but never issued and sold by the Issuer,
and the Issuer shall deliver such Note to the Indenture Trustee for cancellation
as provided in Section 2.14 together with a written statement (which need not
comply with Section 13.3 and need not be accompanied by an Opinion of Counsel)
stating that such Note has never been issued and sold by the Issuer, for all
purposes of this Base Indenture such Note shall be deemed never to have been
authenticated and delivered hereunder and shall not be entitled to the benefits
of this Base Indenture.
Section 2.5. Form, Issuance and Transfer. The Notes may not be issued,
sold, transferred, assigned, participated, pledged or otherwise disposed of
unless such sale or transfer is pursuant to an exemption from the registration
requirements of the Securities Act, and, in each case, in compliance with any
applicable state securities or "Blue Sky" laws and in accordance with the
restrictions set forth in the applicable Series Supplement. Each Series of Notes
shall be in the form specified in the applicable Series Supplement.
Section 2.6. Registrar and Paying Agent. (a) The Issuer shall (i)
maintain an office or agency where Notes may be presented for registration of
transfer or for exchange ("Registrar") and where notices and demands to or upon
the Issuer in respect of the Notes and this Indenture may be served, and (ii)
appoint a paying agent ("Paying Agent") at whose office or agency Notes may be
presented for payment. The Issuer will give prompt written notice to the
Indenture Trustee of the location, and of any change in the location, of any
such office or agency referred to in clause (i) above. If at any time the Issuer
shall fail to maintain any such office or agency referred to in clause (i) above
or shall fail to furnish the Indenture Trustee with the address thereof, such
9
surrenders, notices and demands may be made or served at the Corporate Trust
Office, and the Issuer hereby appoints the Indenture Trustee as its agent to
receive all such surrenders, notices and demands. The Registrar shall keep a
register of the Notes and of their transfer and exchange (the "Note Register").
The Issuer may appoint one or more co-registrars and one or more additional
paying agents. The term "Paying Agent" includes any additional paying agent and
the term "Registrar" includes any co-registrars. The Issuer may change any
Paying Agent or Registrar without prior notice to any Noteholder. The Issuer
shall notify the Indenture Trustee in writing of the name and address of any
Agent not a party to this Base Indenture.
(b) The Indenture Trustee shall be the initial Registrar for the
purpose of registering Notes and transfers of the Notes, as herein provided.
Upon any resignation of any Registrar, the Issuer shall promptly appoint a
successor or, if it elects not to make such an appointment, assume the duties of
Registrar.
(c) If a Person other than the Indenture Trustee is appointed by the
Issuer as Registrar, the Issuer will give the Indenture Trustee prompt written
notice of the appointment of such Registrar and of the location, and any change
in the location, of the Note Register, and the Indenture Trustee shall have the
right to inspect the Note Register at all reasonable times and to obtain copies
thereof. The Indenture Trustee shall have the right to rely upon a certificate
executed on behalf of the Note Registrar by an Executive Officer thereof as to
the names and addresses of the Noteholders and the related principal amounts and
numbers of such Notes.
(d) The Issuer shall enter into an appropriate agency agreement with
any Agent not a party to this Base Indenture. Such agency agreement shall
implement the provisions of this Base Indenture that relate to such Agent. The
Issuer shall notify the Indenture Trustee in writing of the name and address of
any such Agent. If the Issuer fails to maintain a Registrar or Paying Agent and
a Trust Officer has actual knowledge of such failure, or if the Issuer fails to
give the foregoing notice, the Indenture Trustee shall act as such, and shall be
entitled to appropriate compensation in accordance with this Base Indenture,
until the Issuer shall appoint a replacement Registrar and Paying Agent.
Section 2.7. Paying Agent to Hold Money in Trust. (a) The Issuer will
cause each Paying Agent other than the Indenture Trustee to execute and deliver
to the Indenture Trustee an instrument in which such Paying Agent shall agree
with the Indenture Trustee (and if the Indenture Trustee acts as Paying Agent,
it hereby so agrees), subject to the provisions of this Section, that such
Paying Agent will:
(i) hold all sums held by it for the payment of amounts due with
respect to the Notes in trust for the benefit of the Persons entitled thereto
until such sums shall be paid to such Persons or otherwise disposed of as herein
provided and pay such sums to such Persons as herein provided;
(ii) give the Indenture Trustee written notice of any default by the
Issuer (or any other obligor under the Notes) of which it (or, in the case of
the Indenture
10
Trustee, a Trust Officer) has actual knowledge in the making of any payment
required to be made with respect to the Notes;
(iii) at any time during the continuance of any such default, upon the
written request of the Indenture Trustee, forthwith pay to the Indenture Trustee
all sums so held in trust by such Paying Agent;
(iv) immediately resign as a Paying Agent and forthwith pay to the
Indenture Trustee all sums held by it in trust for the payment of Notes if at
any time it ceases to meet the standards required to be met by an Indenture
Trustee hereunder at the time of its appointment; and
(v) comply with all requirements of the Code with respect to the
withholding from any payments made by it on any Notes of any applicable
withholding taxes imposed thereon and with respect to any applicable reporting
requirements in connection therewith.
(b) The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Base Indenture or for any other purpose, by
Issuer Order direct any Paying Agent to pay to the Indenture Trustee all sums
held in trust by such Paying Agent, such sums to be held by the Indenture
Trustee upon the same trusts as those upon which the sums were held by such
Paying Agent; and upon such payment by any Paying Agent to the Indenture
Trustee, such Paying Agent shall be released from all further liability with
respect to such money.
(c) Subject to applicable laws with respect to escheat of funds, any
money held by the Indenture Trustee, any Paying Agent or any Clearing Agency in
trust for the payment of any amount due with respect to any Note and remaining
unclaimed for two years after such amount has become due and payable shall be
discharged from such trust and be paid to the Issuer on Issuer Request; and the
Holder of such Note shall thereafter, as an unsecured general creditor, look
only to the Issuer for payment thereof (but only to the extent of the amounts so
paid to the Issuer), and all liability of the Indenture Trustee, such Paying
Agent or such Clearing Agency with respect to such trust money shall thereupon
cease; provided, however, that the Indenture Trustee, such Paying Agent or such
Clearing Agency, before being required to make any such repayment, may at the
expense of the Issuer cause to be published once, in a newspaper published in
the English language, customarily published on each Business Day and of general
circulation in New York City and, if the related Series of Notes has been listed
on a non-U.S. stock exchange, and if the non-U.S. stock exchange so requires, in
a newspaper customarily published on each local business day for such non-U.S.
stock exchange and of general circulation in the city of such non-U.S. stock
exchange, notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such
publication, any unclaimed balance of such money then remaining will be repaid
to the Issuer. The Indenture Trustee may also adopt and employ, at the expense
of the Issuer, any other reasonable means of notification of such repayment.
11
Section 2.8. Noteholder List. The Indenture Trustee shall preserve in
as current a form as is reasonably practicable the most recent list available to
it of the names and addresses of Noteholders of each Series of Notes. If the
Indenture Trustee is not the Registrar, the Issuer shall furnish to the
Indenture Trustee at least seven Business Days before each Fee Remittance Date
and at such other time as the Indenture Trustee may request in writing, a list
in such form and as of such date as the Indenture Trustee may reasonably require
of the names and addresses of Noteholders of each Series of Notes.
Section 2.9. Transfer and Exchange. The restrictions and requirements
with respect to the transfer or exchange of Notes shall be specified for each
Series in the related Series Supplement.
Section 2.10. Legending of Notes. In addition to any legend required by
Section 2.16, each Note shall bear a legend as specified in the applicable
Series Supplement.
Section 2.11. Replacement Notes. (a) If (i) any mutilated Note is
surrendered to the Indenture Trustee, or the Indenture Trustee receives evidence
to its satisfaction of the destruction, loss or theft of any Note, and (ii)
there is delivered to the Indenture Trustee such security or indemnity as may be
required by it to hold the Issuer and the Indenture Trustee harmless and
provided that the requirements of Section 8-405 of the UCC (which generally
permit the Issuer to impose reasonable requirements) are met, the Issuer shall
execute and upon its request the Indenture Trustee shall authenticate and
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Note, a replacement Note; provided, however, that if any such destroyed,
lost or stolen Note, but not a mutilated Note, shall have become or within seven
days shall be due and payable, instead of issuing a replacement Note, the Issuer
may pay such destroyed, lost or stolen Note when so due or payable without
surrender thereof. If, after the delivery of such replacement Note or payment of
a destroyed, lost or stolen Note pursuant to the proviso to the preceding
sentence, a purchaser for value of the original Note in lieu of which such
replacement Note was issued presents for payment such original Note, the Issuer
and the Indenture Trustee shall be entitled to recover such replacement Note (or
such payment) from the Person to whom it was delivered or any Person taking such
replacement Note from such Person to whom such replacement Note was delivered or
any assignee of such Person, except a purchaser for value, and shall be entitled
to recover upon the security or indemnity provided therefor to the extent of any
loss, damage, cost or expense incurred by the Issuer or the Indenture Trustee in
connection therewith.
(b) Upon the issuance of any replacement Note under this Section 2.11,
the Registrar, the Indenture Trustee or the Issuer may require the payment by
the Holder of such Note of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
reasonable expenses (including the fees and expenses of the Indenture Trustee)
connected therewith.
(c) Every replacement Note issued pursuant to this Section 2.11, in
replacement of any mutilated, destroyed, lost or stolen Note shall be entitled
to all the
12
benefits of this Base Indenture equally and proportionately with any and all
other Notes duly issued hereunder.
(d) The provisions of this Section 2.11 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Notes.
Section 2.12. Treasury Notes. In determining whether the Noteholders of
the required principal amount of Notes have concurred in any direction, waiver
or consent, Notes owned by the Issuer or any Affiliate of the Issuer (other than
as set forth in the related Series Supplement) shall be considered as though
they are not outstanding, except that for the purpose of determining whether the
Indenture Trustee shall be protected in relying on any such direction, waiver or
consent, only Notes of which a Trust Officer of the Indenture Trustee has
received written notice of such ownership shall be so disregarded. Absent
written notice to the Indenture Trustee of such ownership, the Indenture Trustee
shall not be deemed to have knowledge of the identity of the individual
beneficial owners of the Notes.
Section 2.13. Temporary Notes. Pending the preparation of Definitive
Notes if so specified in accordance with the terms of any Series Supplement, the
Issuer may prepare and the Indenture Trustee, upon receipt of a Issuer Order,
shall authenticate and deliver temporary Notes of such Series. Temporary Notes
shall be substantially in the form of Definitive Notes of like Series but may
have variations that are not inconsistent with the terms of this Base Indenture
as the officers executing such Notes may determine, as evidenced by their
execution of such Notes.
(a) If temporary Notes are issued pursuant to Section 2.13(a) above,
the Issuer will cause Definitive Notes to be prepared without unreasonable
delay. After the preparation of Definitive Notes, the temporary Notes shall be
exchangeable for Definitive Notes upon surrender of the temporary Notes at the
office or agency of the Issuer to be maintained as provided in Section 8.2,
without charge to the Noteholder. Upon surrender for cancellation of any one or
more temporary Notes, the Issuer shall execute and the Indenture Trustee shall
authenticate and deliver in exchange therefor a like principal amount of
Definitive Notes of authorized denominations. Until so exchanged, the temporary
Notes shall in all respects be entitled to the same benefits under this Base
Indenture as Definitive Notes.
Section 2.14. Cancellation. The Issuer may at any time deliver to the
Indenture Trustee for cancellation any Notes previously authenticated and
delivered hereunder which the Issuer may have acquired in any manner whatsoever,
and all Notes so delivered shall be promptly cancelled by the Indenture Trustee.
The Registrar and Paying Agent shall forward to the Indenture Trustee any Notes
surrendered to them for registration of transfer, exchange or payment. The
Indenture Trustee shall cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation. The Issuer may not
issue new Notes to replace Notes that it has redeemed or paid or that have been
delivered to the Indenture Trustee for cancellation. All
13
cancelled Notes held by the Indenture Trustee shall be disposed of in accordance
with the Indenture Trustee's standard disposition procedures unless by a written
order, signed by two Authorized Officers and received by a Trust Officer of the
Indenture Trustee in a timely fashion, the Issuer shall direct that cancelled
Notes be returned to it.
Section 2.15. Principal and Interest. The principal of each Series of
Notes shall be payable at the times and in the amounts set forth in the related
Series Supplement and in accordance with Section 6.1.
(a) Each Series of Notes shall accrue interest as provided in the
related Series Supplement and such interest shall be payable at the times and in
the amounts set forth in the related Series Supplement and in accordance with
Section 6.1.
(b) Except as provided in the following sentence, the Person in whose
name any Note is registered at the close of business on any Record Date with
respect to the Payment Date for such Note shall be entitled to receive the
principal and interest payable on such Payment Date notwithstanding the
cancellation of such Note upon any registration of transfer, exchange or
substitution of such Note subsequent to such Record Date. Any interest payable
at maturity shall be paid to the Person to whom the principal of such Note is
payable.
(c) If the Issuer defaults in the payment of interest on the Notes of
any Series, such interest, to the extent paid on any date that is more than five
(5) Business Days after the applicable due date, shall, at the option of the
Issuer, cease to be payable to the Persons who were Noteholders of such Series
at the applicable Record Date and the Issuer shall pay the defaulted interest in
any lawful manner, plus, to the extent lawful, interest payable on the defaulted
interest, to the Persons who are Noteholders of such Series on a subsequent
special record date which date shall be at least five (5) Business Days prior to
the payment date, at the rate provided in this Base Indenture and in the Notes
of such Series. The Issuer shall fix or cause to be fixed each such special
record date and payment date, and at least fifteen (15) days before the special
record date, the Issuer (or the Indenture Trustee, in the name of and at the
expense of the Issuer) shall mail to Noteholders of such Series a notice that
states the special record date, the related payment date and the amount of such
interest to be paid.
Section 2.16. Book-Entry Notes. (a) Unless otherwise provided in any
related Series Supplement, the Notes, upon original issuance, shall be issued in
the form of typewritten Notes representing the Book-Entry Notes, to be delivered
to the depository specified in such Series Supplement which shall be the
Clearing Agency, by or on behalf of the Issuer. The Notes of each Series shall,
unless otherwise provided in the related Series Supplement, initially be
registered on the Note Register in the name of the nominee of the Clearing
Agency. Unless otherwise provided in a related Series Supplement, no Note Owner
will receive a definitive note representing such Note Owner's interest in the
related Series of Notes, except as provided in Section 2.18.
14
(b) For each Series of Notes to be issued in registered form, the
Issuer shall duly execute, and the Indenture Trustee shall, in accordance with
Section 2.4 hereof, authenticate and deliver initially, unless otherwise
provided in the applicable Series Supplement, one or more Notes as further
specified in the applicable Series Supplement that shall be registered on the
Note Register in the name of a Clearing Agency or such Clearing Agency's
nominee. Each Note registered in the name of DTC or its nominee shall bear a
legend substantially to the following effect:
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO
BANK ONE, NATIONAL ASSOCIATION AS INDENTURE TRUSTEE OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. ("CEDE") OR SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
HEREON IS MADE TO CEDE OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE, HAS AN INTEREST HEREIN.
(c) [Reserved].
(d) Title to the Notes shall pass only by registration in the Note
Register maintained by the Registrar pursuant to Section 2.6.
(e) Any typewritten Note or Notes representing Book-Entry Notes shall
provide that they represent the aggregate or a specified amount of outstanding
Notes from time to time endorsed thereon and may also provide that the aggregate
amount of outstanding Notes represented thereby may from time to time be reduced
to reflect exchanges. Any endorsement of a typewritten Note or Notes
representing Book-Entry Notes to reflect the amount, or any increase or decrease
in the amount, or changes in the rights of Note Owners represented thereby,
shall be made in such manner and by such Person or Persons as shall be specified
therein or in the Issuer Order to be delivered to the Indenture Trustee pursuant
to Section 2.4(b). Subject to the provisions of Section 2.5, the Indenture
Trustee shall deliver and redeliver any typewritten Note or Notes representing
Book-Entry Notes in the manner and upon instructions given by the Person or
Persons specified therein or in the applicable Issuer Order. Any instructions by
the Issuer with respect to endorsement or delivery or redelivery of a
typewritten Note or Notes representing the Book-Entry Notes shall be in writing
but need not comply with Section 13.3 hereof and need not be accompanied by an
Opinion of Counsel.
(f) Unless and until definitive, fully registered Notes ("Definitive
Notes") have been issued to Note Owners with respect to any Series of Notes
pursuant to Section 2.18 or the applicable Series Supplement:
15
(i) the provisions of this Indenture shall be in full force and effect;
(ii) the Paying Agent, the Registrar and the Indenture Trustee may deal
with the Clearing Agency and the Clearing Agency Participants for all purposes
of this Indenture (including the making of payments on the Notes and the giving
of instructions or directions hereunder) as the sole holder of the Notes, and
shall have no obligation to the Note Owners of any Class of Notes;
(iii) to the extent that the provisions of this Section 2.16 conflict
with any other provisions of this Indenture, the provisions of this Section 2.16
shall control;
(iv) whenever this Indenture requires or permits actions to be taken
based upon instructions or directions of Holders of such Series of Notes
evidencing a specified percentage of the outstanding principal amount of such
Series of Notes, the applicable Clearing Agency shall be deemed to represent
such percentage only to the extent that it has received instructions to such
effect from Note Owners and/or their related Clearing Agency Participants owning
or representing, respectively, such required percentage of the beneficial
interest in such Series of Notes and has delivered such instructions to the
Indenture Trustee; and
(v) the rights of such Note Owners shall be exercised only through the
applicable Clearing Agency and their related Clearing Agency Participants and
shall be limited to those established by law and agreements between such Note
Owners and their related Clearing Agency and/or the Clearing Agency
Participants. Unless and until Definitive Notes are issued pursuant to Section
2.18, the applicable Clearing Agencies will make book-entry transfers among
their related Clearing Agency Participants and receive and transmit payments of
principal and interest on such Series of Notes to such Clearing Agency
Participants.
Section 2.17. Notices to Clearing Agency. Whenever notice or other
communication to the Noteholders is required under this Indenture, unless and
until Definitive Notes shall have been issued to Note Owners pursuant to Section
2.18 or the applicable Series Supplement, the Indenture Trustee and the Issuer
shall give all such notices and communications specified herein to be given to
Noteholders to the applicable Clearing Agency for distribution to the Note
Owners.
Section 2.18. [Reserved].
Section 2.19. Tax Treatment. The Issuer has structured this Base
Indenture and the Notes have been (or will be) issued with the intention that
the Notes will qualify under applicable tax law as indebtedness of the Issuer
and any entity acquiring any direct or indirect interest in any Note by
acceptance of its Notes (or, in the case of a Note Owner, by virtue of such Note
Owner's acquisition of a beneficial interest therein) agrees to treat the Notes
(or beneficial interests therein) for purposes of Federal, state and local and
income or franchise taxes and any other tax imposed on or measured by income, as
indebtedness of the Issuer. Each Noteholder agrees that it will cause any
16
Note Owner acquiring an interest in a Note through it to comply with this Base
Indenture as to treatment as indebtedness for such tax purposes.
Section 2.20. CUSIP Numbers. The Issuer may use "CUSIP" numbers in
respect of any Series of Notes (if then generally in use), and, if so, the
Indenture Trustee shall use "CUSIP" numbers in notices of redemption in respect
of such Series of Notes as a convenience to Holders; provided that any such
notice may state that no representation is made as to the correctness of such
numbers either as printed on the Notes of such Series or as contained in any
notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Notes of such Series, and any such
redemption shall not be affected by any defect in or omission of such numbers.
The Issuer will promptly notify the Indenture Trustee of any change in any such
"CUSIP" numbers.
ARTICLE III
SECURITY
Section 3.1. Grant of Security Interest. In order to secure the Issuer
Obligations with respect to the Notes (other than any Segregated Series of
Notes), the Issuer, and with respect to the legal title of the Student Loans,
the Eligible Lender Trustee, hereby Grants, pledges, assigns, conveys, delivers,
transfers and sets over to the Indenture Trustee, for the benefit of the
Indenture Trustee, the Noteholders and the Eligible Lender Trustee (the "Secured
Parties"), a security interest in all of the Issuer's right, title and interest
to, but none of the obligations under, the following:
(i) the Initial Financed Student Loans, and all obligations of the
Obligors thereunder including all monies paid thereunder on and after the
Initial Cutoff Date with respect to such Initial Financed Student Loans,
including all Subsidy Payments and all Related Security with respect thereto;
(ii) the Additional Financed Student Loans, and all obligations of the
Obligors thereunder including all monies paid thereunder on and after the Cutoff
Date with respect to such Additional Financed Student Loans, including all
Subsidy Payments and all Related Security with respect thereto;
(iii) each Purchase and Contribution Agreement entered into pursuant to
each applicable Series Supplement;
(iv) the Servicing Agreement entered into pursuant to this Base
Indenture;
(v) each Student Loan Guaranty Agreement with respect to the Student
Loans comprising part of the Financed Student Loans, including the right of the
Issuer and the Eligible Lender Trustee to cause the related Student Loan
Guarantor to make Guaranty Payments in respect of the Financed Student Loans;
17
(vi) the Trust Agreement;
(vii) all funds on deposit from time to time in the Collection Account,
Reserve Account and Capitalized Interest Account and in all investments and
proceeds thereof (including all income thereon);
(viii) all books and records (including computer tapes and disks)
related to the foregoing;
(ix) any other collateral set forth or specified in each Series
Supplement; and
(x) all present and future claims, demands, causes and choses in action
in respect of any or all of the foregoing and all payments on or under and all
proceeds of every kind and nature whatsoever in respect of any or all of the
foregoing, including all proceeds of the conversion, voluntary or involuntary,
into cash or other liquid property, all cash proceeds, trust accounts, trust
accounts receivables, notes, drafts, acceptances, chattel paper, checks, deposit
trust accounts, insurance proceeds, condemnation awards, rights to payment of
any and every kind and other forms of obligations and receivables, instruments
and other property which at any time constitute all or part of or are included
in the proceeds of any of the foregoing (collectively, the "Collateral").
The foregoing grant is made in trust to secure the payment of principal
of and interest on, and any other amounts owing in respect of, the Notes,
equally and ratably without prejudice, priority or distinction and to secure
compliance with the provisions of this Indenture and any Series Supplement,
subject to, and as further provided in this Indenture and any Series Supplement.
The Indenture Trustee, as Indenture Trustee on behalf of the Secured
Parties, acknowledges such grant, accepts the trusts under this Indenture in
accordance with the provisions of this Indenture and agrees to perform its
duties required in this Indenture and the Related Documents in accordance with
their terms.
Section 3.2. Certain Rights and Obligations of the Issuer Unaffected.
(a) Notwithstanding the assignment and security interest so granted to the
Indenture Trustee on behalf of the Secured Parties, the Issuer shall
nevertheless be permitted, subject to the Indenture Trustee's right to revoke
such permission in the event of an Event of Default, to give all consents,
requests, notices, directions, approvals, extensions or waivers, if any, which
are required or permitted to be given in the normal course of business (which
does not include waivers of defaults under, or consent to amendments or
modifications of, any of the Related Documents) to any Person by the specific
terms of the Related Documents.
(b) The grant of the security interest in the Collateral to the
Indenture Trustee on behalf of the Secured Parties shall not (i) relieve the
Issuer from the performance of any term, covenant, condition or agreement on the
Issuer's part to be
18
performed or observed under or in connection with any of the Related Documents
or from any liability to any Person thereunder or (ii) impose any obligation on
the Indenture Trustee or any of the Secured Parties to perform or observe any
such term, covenant, condition or agreement on the Issuer's part to be so
performed or observed or impose any liability on the Indenture Trustee or any of
the Secured Parties for any act or omission on the part of the Issuer or from
any breach of any representation or warranty on the part of the Issuer. The
Issuer hereby agrees to indemnify and hold harmless the Indenture Trustee and
each Noteholder (including, in each case, their respective assigns, directors,
officers, employees and agents) from and against any and all losses, liabilities
(including liabilities for penalties), claims, demands, actions, suits,
judgments, out-of-pocket costs and expenses arising out of or resulting from the
security interest granted hereby, whether arising by virtue of any act or
omission on the part of the Issuer or otherwise, including, without limitation,
the reasonable out-of-pocket costs, expenses, and disbursements (including
reasonable attorneys' fees and expenses) incurred by the Indenture Trustee and
any of the Noteholders in enforcing this Indenture or preserving any of their
respective rights to, or realizing upon, any of the Collateral; provided,
however, the foregoing indemnification shall not extend to any action by the
Indenture Trustee or a Noteholder which constitutes negligence or willful
misconduct by the Indenture Trustee, such Noteholder or any other indemnified
person hereunder. The indemnification provided for in this Section 3.2 shall
survive the removal of, or a resignation by, such Person as Indenture Trustee as
well as the termination of this Base Indenture or any Series Supplement.
Section 3.3. [Reserved].
Section 3.4. Stamp, Other Similar Taxes and Filing Fees. The Issuer
shall indemnify and hold harmless the Indenture Trustee and each Secured Party
from any present or future claim for liability for any stamp or other similar
tax and any penalties or interest with respect thereto, that may be assessed,
levied or collected by any jurisdiction in connection with this Base Indenture
or any Collateral. The Issuer shall pay, or reimburse the Indenture Trustee for,
any and all amounts in respect of, all search, filing, recording and
registration fees, taxes, excise taxes and other similar imposts that may be
payable or reasonably determined to be payable in respect of the execution,
delivery, performance and/or enforcement of this Base Indenture.
Section 3.5. Release from Lien of Indenture. Notwithstanding any other
provision in this Indenture to the contrary, and unless otherwise specified with
respect to certain Guaranteed Alternative Loans in a Series Supplement, the
Indenture Trustee is permitted to release from the Lien of this Indenture any
Guaranteed Alternative Loans upon notice from the Servicer to the effect that
such Guaranteed Alternative Loans are in default and need to be released from
the Lien of this Indenture in order to realize the benefits of the applicable
Alternative Loan Guaranty Payment.
19
ARTICLE IV
REPORTS
Section 4.1. Agreement of the Issuer to Provide Reports and
Instructions. Unless otherwise provided for in each related Series Supplement,
and with respect to each Series of Notes, from the date of issuance of each
Series of Notes until the Final Scheduled Payment Date for each such Series of
Notes, the Issuer shall furnish to the Eligible Lender Trustee and the Indenture
Trustee:
(a) Quarterly Financial Statements. As soon as available and in any
event within 60 days after the end of each of the first three quarters of each
fiscal year of the Issuer, the Issuer's consolidated statement of income and
statement of changes in cash flow for such quarter and balance sheet as of the
end of such quarter presented fairly in accordance with generally accepted
accounting principles;
(b) Annual Financial Statements. As soon as available and in any event
within 120 days after the end of each fiscal year of the Issuer, the Issuer's
statement of income and statement of changes in cash flow for such year and
balance sheet as of the end of such year in each case presented fairly in
accordance with generally accepted accounting principles;
(c) Quarterly Officer's Certificate. Within 30 days after the last day
of each calendar quarter, an officer's certificate executed by the chief
financial officer or treasurer of the General Partner, certifying that, as of
such calendar month, (i) the Issuer is in compliance with all of the terms,
conditions and requirements of the Related Documents for such Series, and (ii)
no Event of Default or Unmatured Event of Default under this Indenture or other
event of default as described in any other Related Document for such Series
exists;
(d) Quarterly Report. No later than the tenth Business Day of each
January, April, July and October, a Quarterly Report for the immediately
preceding quarter, substantially in the form of Exhibit D;
(e) DOE Audit Materials. Within 30 days after the last day of each
calendar month, notice of all DOE audits of or any other actions of a material
nature by the DOE with respect to, the Issuer or any Affiliate thereof, to the
extent that it has knowledge thereof, of the Servicer or Student Loan Guarantor,
under any Student Loan Guaranty Agreement, and, in each case, notice of the
results thereof (including, but not limited to, the rate of reimbursement by the
DOE for the Student Loan Guarantors under the related Student Loan Guaranty
Agreements, to the extent that such rate is below the maximum permitted under
the Higher Education Act (i.e., 95% for Student Loans disbursed on or after
October 1, 1998, 98% with respect to Student Loans disbursed on or after October
1, 1993, and 100% for Student Loans disbursed prior thereto));
20
(f) Reports of Independent Accountants. As promptly as practicable,
copies of any reports or written comments (including, without limitation, audit
reports, management letters and any other reports or communications with respect
to the internal control structure) relating to the Issuer submitted by its
independent accountants; and
(g) Event of Defaults. Immediately upon becoming aware of the existence
of any Event of Default or Unmatured Event of Default, a written statement of an
Authorized Officer of the Issuer setting forth details of such event and the
action that the Issuer proposes to take with respect thereto; and immediately
upon becoming aware of a Servicer Default, written notice thereof.
In addition, the Issuer shall promptly furnish a copy of each Quarterly
Report upon delivery thereof to the Indenture Trustee and the Eligible Lender
Trustee, to each Rating Agency rating each such Series of Notes.
The Issuer shall also inform each Rating Agency in writing immediately
upon the occurrence of any resignation, substitution or replacement of the
Eligible Lender Trustee, the Servicer or any Subservicer. In addition, at any
time at which the Issuer provides the Indenture Trustee with notice of the
occurrence of any other event pursuant to the terms of this Indenture, it shall
concurrently provide such notice to each Rating Agency.
Section 4.2. Monthly Noteholders' Statement. Unless otherwise specified
in the related Series Supplement, on the Fee Remittance Date, the Indenture
Trustee or the Paying Agent shall forward to each Noteholder of record of each
outstanding Series the Monthly Noteholders' Statement with respect to such
Series, with a copy to the Rating Agencies and each Enhancement Provider, if
any, with respect to such Series.
Section 4.3. Annual Noteholders' Tax Statement. Unless otherwise
specified in the related Series Supplement, on or before January 31 of each
calendar year, beginning with calendar year 2004, the Indenture Trustee or the
Paying Agent shall furnish to each Person who at any time during the preceding
calendar year was a Noteholder a statement prepared by or on behalf of the
Issuer containing the information which is required to be contained in the
Monthly Noteholders' Statements with respect to each Series of Notes aggregated
for such calendar year or the applicable portion thereof during which such
Person was a Noteholder, together with such other customary information
(consistent with the treatment of the Notes as debt) as the Issuer deems
necessary or desirable to enable the Noteholders to prepare their tax returns
(each such statement, an "Annual Noteholders' Tax Statement"). Such obligations
of the Issuer to prepare and the Indenture Trustee or the Paying Agent to
distribute the Annual Noteholders' Tax Statement shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
provided by the Indenture Trustee or the Paying Agent pursuant to any
requirements of the Code as from time to time in effect.
21
ARTICLE V
ALLOCATION AND APPLICATION OF COLLECTIONS; CAPITALIZED
INTEREST ACCOUNT; RESERVE ACCOUNT
Section 5.1. Rights of Noteholders. Each Series of Notes, unless such
Series is designated a Segregated Series, shall be secured by all of the
Collateral, including the benefits of any Enhancement, if any, issued with
respect to such Series and the right to receive the applicable Series Percentage
of Collections and other amounts at the times and in the amounts specified in
this Article 5 to be deposited in the Collection Account and any other accounts
(if so specified in the related Series Supplement) or to be paid to the
Noteholders of such Series. In no event shall the grant of a security interest
in Collateral be deemed to entitle any Noteholder to receive Collections or
other proceeds of the Collateral in excess of the amounts described in this
Article 5.
Section 5.2. Collection Account.
(a) Establishment of Collection Account. On or prior to the Initial
Closing Date, the Indenture Trustee shall establish and maintain in the name of
the Indenture Trustee for the benefit of the Secured Parties, or cause to be
established and maintained, an account (the "Collection Account"), bearing a
designation clearly indicating that the funds deposited therein are held for the
benefit of the Secured Parties. The Indenture Trustee shall possess all right,
title and interest in all moneys, instruments, securities and other property on
deposit from time to time in the Collection Account and the proceeds thereof for
the benefit of the Secured Parties. The Collection Account shall be under the
sole dominion and control of the Indenture Trustee for the benefit of the
Secured Parties. The Collection Account shall be maintained as an Eligible
Deposit Account. If the Collection Account is not maintained in accordance with
the previous sentence, then within 10 Business Days after obtaining knowledge of
such fact, the Indenture Trustee shall establish a new Collection Account which
complies with such sentence and transfer into the new Collection Account all
cash and investments from the non-qualifying Collection Account. Initially, the
Collection Account will be established with Bank One, National Association.
(b) Establishment of Additional Accounts. To the extent specified in
the Series Supplement with respect to any Series of Notes, the Indenture Trustee
may establish and maintain one or more additional accounts and/or Administrative
Subaccounts to facilitate the proper allocation of Collections in accordance
with the terms of such Series Supplement.
(c) Administration of the Collection Account. The Issuer shall instruct
the institution maintaining the Collection Account in writing to invest funds on
deposit in the Collection Account (including any administrative subaccounts
thereof) at all times in Eligible Investments selected by the Issuer (by
standing instructions or otherwise); provided, however, that except as provided
in any Series Supplement, any such investment shall mature not later than the
Business Day prior to the applicable Fee
22
Remittance Date, following the date on which such funds were so invested, except
for any Eligible Investment held in the Collection Account (including any
administrative subaccounts thereof) which is in an investment made by the Paying
Agent institution, in which event such investment may mature on such applicable
Fee Remittance Date, so long as such funds shall be available for withdrawal on
or prior to such applicable Fee Remittance Date. All such Eligible Investments
will be credited to the Collection Account and any such Eligible Investments
that constitute (i) Physical Property (and that is not either a United States
Security Entitlement or a Security Entitlement) shall be delivered to the
Indenture Trustee in accordance with paragraph (a) of the definition of
"Delivery" and shall be held by the Indenture Trustee pending maturity or
disposition; (ii) United States Security Entitlements or Security Entitlements
shall be Controlled by the Indenture Trustee pending maturity or disposition;
and (iii) Uncertificated Securities (and not United States Security
Entitlements) shall be delivered to the Indenture Trustee in accordance with
paragraph (b) of the definition of "Delivery" and shall be maintained by the
Indenture Trustee pending maturity or disposition. The Indenture Trustee shall,
at the expense of the Issuer, take such action as is required to maintain the
Indenture Trustee's security interest in the Eligible Investments credited to
the Collection Account. In the absence of written investment instructions
hereunder, funds on deposit in the Collection Account shall remain uninvested.
Neither the Issuer nor the Indenture Trustee shall dispose of (or permit the
disposal of) any Eligible Investments prior to the maturity thereof to the
extent such disposal would result in a loss of principal of such Eligible
Investment.
(d) Earnings from Collection Account. Subject to the restrictions set
forth above, the Issuer shall have the authority to instruct the Indenture
Trustee (which instructions shall be in writing) with respect to (i) the
investment of funds on deposit in the Collection Account and (ii) the
liquidation of such investments. All interest and earnings (net of losses and
investment expenses) paid on funds on deposit in the Collection Account shall be
deemed to be available and on deposit for distribution.
Section 5.3. Collections and Allocations. (a) Collections in General.
Until this Base Indenture is terminated pursuant to Section 11.1, the Issuer
shall, and the Indenture Trustee is authorized to, cause all Collections due and
to become due to the Issuer or the Indenture Trustee, as the case may be, to be
paid directly into the Collection Account no later than the close of business on
the second Business Day after receipt thereof, and the Servicer shall be
instructed to remit all Collections received by it in accordance with the
Servicing Agreement to the Collection Account for deposit therein. In addition,
the Issuer shall deposit to the Collection Account no later than the close of
business on each Determination Date the aggregate Purchase Amounts payable by
the Issuer pursuant to Section 7.5 of the Base Indenture. If the Issuer shall
receive any written statement from the Servicer stating that any amount
previously paid by the Servicer to the Indenture Trustee or Issuer and deposited
into the Collection Account was so paid and deposited into the Collection
Account in error, the Issuer, if it shall concur as to the truth of such
statement, shall forward to the Indenture Trustee in writing, together with such
security or indemnity as may be required by it to hold the Indenture Trustee
23
harmless, a copy of such written statement from the Servicer, along with an
instruction to the Indenture Trustee to withdraw such amount from the Collection
Account and pay such amount to the Servicer. Following receipt from the Issuer
of the Servicer's statement and the written instructions set forth in the
preceding sentence, so long as no Event of Default shall have occurred and be
continuing, the Indenture Trustee shall withdraw such amount from the Collection
Account and pay such amount to such Servicer. The Issuer agrees that if any such
monies, instruments, cash or other proceeds shall be received by the Issuer in
an account other than the Collection Account or in any other manner, such
monies, instruments, cash and other proceeds will not be commingled by the
Issuer with any of its other funds or property, if any, but will be held
separate and apart therefrom and shall be held in trust by the Issuer for, and
immediately paid over to, but in any event within two Business Days from
receipt, the Indenture Trustee with any necessary endorsement. All monies,
instruments, cash and other proceeds received by the Indenture Trustee pursuant
to this Base Indenture shall be immediately deposited in the Collection Account
within two Business Days from receipt and shall be applied as provided in this
Article 5.
(b) Disqualification of Institution Maintaining Collection Account.
Upon and after the establishment of a new Collection Account as an Eligible
Deposit Account pursuant to Section 5.2(a), the Issuer shall deposit or cause to
be deposited all Collections as set forth in Section 5.3(a) into the new
Collection Account, and in no such event shall deposit or cause to be deposited
any Collections thereafter into any account established, held or maintained with
the institution formerly maintaining the Collection Account (unless it later
becomes a Qualified Institution maintaining the Collection Account as an
Eligible Deposit Account).
Section 5.4. Determination of Interest. Interest with respect to each
Series of Notes shall be determined, allocated and distributed in accordance
with the procedures set forth in the applicable Series Supplement.
Section 5.5. Determination of Principal. Principal with respect to each
Series of Notes shall be determined, allocated and distributed in accordance
with the procedures set forth in the applicable Series Supplement. However, all
principal or interest with respect to any Series of Notes shall be due and
payable no later than the Final Scheduled Payment Date with respect to such
Series.
Section 5.6. Paired Series. To the extent provided in a Series
Supplement, any Series of Notes may be paired with one or more other Series
(each, a "Paired Series"). Each Paired Series may be prefunded with an initial
deposit to a pre-funding account in an amount up to the initial principal
balance of such Paired Series, primarily from the proceeds of the sale of such
Paired Series, or will have a variable principal amount. Any such pre-funding
account will be held for the benefit of such Paired Series and not for the
benefit of the Noteholders of the Series paired therewith. As funds are
accumulated in a principal funding account or paid to Noteholders of the Series
paired to the Paired Series, either (i) in the case of a pre-funded Paired
Series, an equal amount of funds on deposit in any pre-funding account for such
prefunded Paired Series
24
will be released and paid to the Issuer or (ii) in the case of a Paired Series
having a variable principal amount, an interest in such variable Paired Series
in an equal or lesser amount may be sold by the Issuer and, in either case, the
note principal amount of such Paired Series will increase by up to a
corresponding amount. Upon payment in full of the Series paired to the Paired
Series, the aggregate note principal amount of such related Paired Series will
have been increased by an amount up to an aggregate amount equal to the Note
Principal Amount of such Series paid to the Noteholders thereof. The issuance of
a Paired Series may be subject to certain conditions described in the related
Series Supplement.
Section 5.7. Capitalized Interest Account. (a) Establishment of
Capitalized Interest Account. On or prior to the Initial Closing Date, the
Indenture Trustee shall establish and maintain in the name of the Indenture
Trustee for the benefit of the Secured Parties, or cause to be established and
maintained, an account (the "Capitalized Interest Account") bearing a
designation that the funds deposited therein are held for the benefit of the
Secured Parties. The Indenture Trustee shall possess all right, title and
interest in all moneys, instruments, securities and other property on deposit
from time to time in the Capitalized Interest Account and the proceeds thereof
for the benefit of the Secured Parties. The Capitalized Interest Account shall
be under the sole dominion and control of the Indenture Trustee for the benefit
of the Secured Parties. The Capitalized Interest Account shall be maintained as
an Eligible Deposit Account. If the Capitalized Interest Account is not
maintained in accordance with the previous sentence, then within 10 Business
Days after obtaining knowledge of such fact, the Indenture Trustee shall
establish a new Capitalized Interest Account which complies with such sentence
and transfer into the new Capitalized Interest Account all cash and investments
from the non-qualifying Capitalized Interest Account.
Section 5.8. Administration of Capitalized Interest Account.
(a) The Issuer shall instruct the institution maintaining the
Capitalized Interest Account in writing to invest funds on deposit in the
Capitalized Interest Account at all times in Eligible Investments selected by
the Issuer (by standing instructions or otherwise); provided, however, that
except as provided in any Series Supplement, any such investment shall mature
not later than the Business Day prior to the Fee Remittance Date following the
date on which such funds were so invested, except for any Eligible Investment
held in the Capitalized Interest Account (including any administrative
subaccounts thereof) which is in an investment made by the Paying Agent
institution, in which event such investment may mature on such Fee Remittance
Date, so long as such funds shall be available for withdrawal on or prior to
such applicable Fee Remittance Date. All income or other gains from the
investment of moneys deposited in the Capitalized Interest Account shall be
deposited by the Indenture Trustee into the Collection Account upon receipt. Any
such Eligible Investments that constitute (i) Physical Property (and that is not
either a United States Security Entitlement or a Security Entitlement) shall be
delivered to the Indenture Trustee in accordance with paragraph (a) of the
definition of "Delivery" and shall be held by the Indenture Trustee pending
maturity or disposition; (ii) United States Security Entitlements or Security
Entitlements
25
shall be Controlled by the Indenture Trustee pending maturity or disposition;
and (iii) Uncertificated Securities (and not United States Security
Entitlements) shall be delivered to the Indenture Trustee in accordance with
paragraph (b) of the definition of "Delivery" and shall be maintained by the
Indenture Trustee pending maturity or disposition. The Indenture Trustee shall,
at the expense of the Issuer, take such action as is required to maintain the
Indenture Trustee's security interest in the Eligible Investments credited to
the Capitalized Interest Account. In the absence of written investment
instructions hereunder, funds on deposit in the Capitalized Interest Account
shall remain uninvested. Neither the Issuer nor the Indenture Trustee shall
dispose of (or permit the disposal of) any Eligible Investments prior to the
maturity thereof to the extent such disposal would result in a loss of principal
of such Eligible Investment.
Section 5.9. Allocations. (a) The Issuer shall instruct the Indenture
Trustee to transfer amounts on deposit in the Capitalized Interest Account in
accordance with each Series Supplement.
Section 5.10. Reserve Account. (a) Establishment of Reserve Account. On
or prior to the Initial Closing Date, the Indenture Trustee shall establish and
maintain in the name of the Indenture Trustee for the benefit of the Secured
Parties, or cause to be established and maintained, an account (the "Reserve
Account") bearing a designation that the funds deposited therein are held for
the benefit of the Secured Parties. The Indenture Trustee shall possess all
right, title and interest in all moneys, instruments, securities and other
property on deposit from time to time in the Reserve Account and the proceeds
thereof for the benefit of the Secured Parties. The Reserve Account shall be
under the sole dominion and control of the Indenture Trustee for the benefit of
the Secured Parties. The Reserve Account shall be maintained as an Eligible
Deposit Account. If the Reserve Account is not maintained in accordance with the
previous sentence, then within 10 Business Days after obtaining knowledge of
such fact, the Indenture Trustee shall establish a new Reserve Account which
complies with such sentence and transfer into the new Reserve Account all cash
and investments from the non-qualifying Reserve Account.
(b) Administration of Reserve Account. The Issuer shall instruct he
institution maintaining the Reserve Account in writing to invest funds on
deposit in the Reserve Account at all times in Eligible Investments selected by
the Issuer (by standing instructions or otherwise); provided, however, that
except as provided in any Series Supplement, any such investment shall mature
not later than the Business Day prior to the Fee Remittance Date following the
date on which such funds were so invested, except for any Eligible Investment
held in the Reserve Account (including any administrative subaccounts thereof)
which is in an investment made by the Paying Agent institution, in which event
such investment may mature on such Fee Remittance Date, so long as such funds
shall be available for withdrawal on or prior to such applicable Fee Remittance
Date. All income or other gains from the investment of moneys deposited in the
Reserve Account shall be deposited by the Indenture Trustee into the Collection
Account upon receipt. Any such Eligible Investments that constitute (i) Physical
Property (and that is not either a United States Security Entitlement or a
Security Entitlement) shall be
26
delivered to the Indenture Trustee in accordance with paragraph (a) of the
definition of "Delivery" and shall be held by the Indenture Trustee pending
maturity or disposition; (ii) United States Security Entitlements or Security
Entitlements shall be Controlled by the Indenture Trustee pending maturity or
disposition; and (iii) Uncertificated Securities (and not United States Security
Entitlements) shall be delivered to the Indenture Trustee in accordance with
paragraph (b) of the definition of "Delivery" and shall be maintained by the
Indenture Trustee pending maturity or disposition. The Indenture Trustee shall,
at the expense of the Issuer, take such action as is required to maintain the
Indenture Trustee's security interest in the Eligible Investments credited to
the Reserve Account. In the absence of written investment instructions
hereunder, funds on deposit in the Reserve Account shall remain uninvested.
Neither the Issuer nor the Indenture Trustee shall dispose of (or permit the
disposal of) any Eligible Investments prior to the maturity thereof to the
extent such disposal would result in a loss of principal of such Eligible
Investment.
(c) Allocations. The Issuer shall instruct the Indenture Trustee to
transfer amounts on deposit in the Reserve Account in accordance with each
Series Supplement.
(d) Termination of Reserve Account. Following the payment in full of
the Note Principal Amount of all Shared Collateral Series and all other amounts
owing or to be distributed hereunder or under any applicable Series Supplement
to the Servicer, the Indenture Trustee and the Eligible Lender Trustee (such
Servicer, Indenture Trustee and Eligible Lender Trustee fees to be paid pari
passu) and the Noteholders of all Shared Collateral Series (including any
Noteholders' Interest Basis Carryover), any amount remaining on deposit in the
Reserve Account shall be distributed to the Issuer. The Issuer shall in no event
be required to refund any amounts properly distributed pursuant to this Section
5.10(d)
[THE REMAINDER OF ARTICLE 5 IS RESERVED AND MAY BE SPECIFIED IN ANY SERIES
SUPPLEMENT WITH RESPECT TO ANY SERIES.]
ARTICLE VI
DISTRIBUTIONS TO NOTEHOLDERS
Section 6.1. Distributions in General. (a) Unless otherwise specified
in the applicable Series Supplement, on each Fee Remittance Date, with respect
to each outstanding Series, (i) the Indenture Trustee or the Paying Agent shall
deposit into the applicable Trust Account for each such Series the amounts
deposited in the Collection Account, and (ii) to the extent provided for in the
applicable Series Supplement, the Indenture Trustee shall deposit into the
Distribution Account for each such Series the amount of Enhancement, if any, for
such Series drawn in connection with such Fee Remittance Date.
27
(b) Unless otherwise specified in the applicable Series Supplement, on
each Payment Date, the Indenture Trustee or the Paying Agent shall distribute to
the Noteholders of each Series, to the extent amounts are on deposit in the
Distribution Account for such Series, an amount sufficient to pay all principal
and interest due on such Series on such Payment Date. Such distribution with
respect to principal shall be by lot at random to each Noteholder of record of
such Series on the preceding Record Date; provided, however, that, the final
principal payment due on a Note shall only be paid to the holder of a Note on
due presentment of such Note for cancellation in accordance with the provisions
of the Note.
(c) Unless otherwise specified in the applicable Series Supplement,
amounts distributable to a Noteholder pursuant to this Section 6.1 shall be
payable by check mailed first-class postage prepaid to such Noteholder at the
address for such Noteholder appearing in the Note Register except that with
respect to Notes registered in the name of a Clearing Agency or its nominee,
such amounts shall be payable by wire transfer of immediately available funds
released by the Indenture Trustee or the Paying Agent from the Distribution
Account no later than 10:00 A.M. (New York City time) for credit to the account
designated by such Clearing Agency or its nominee, as applicable.
(d) Unless otherwise specified in the applicable Series Supplement, (i)
all distributions to Noteholders of all classes within a Series of Notes will
have the same priority and (ii) in the event that on any date of determination
the amount available to make payments to the Noteholders of a Series is not
sufficient to pay all sums required to be paid to such Noteholders on such date,
then each class of Noteholders will receive its ratable share (based upon the
aggregate amount due to such class of Noteholders) of the aggregate amount
available to be distributed in respect of the Notes of such Series.
Section 6.2. Optional Repurchase of Notes. The Issuer may repurchase a
particular Series of Notes (or class of such Series) to the extent, if any, set
forth in the related Series Supplement for that Series (or class of such
Series).
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
Section 7.1. Representations and Warranties of the Issuer. The Issuer
hereby represents and warrants, as of each Series Closing Date:
(a) Organization, Powers. The Issuer is a limited partnership duly
organized, validly existing and in good standing under the laws of the State of
Delaware, has all necessary power as a limited partnership to carry on its
present business, is duly licensed or qualified in all jurisdictions where the
nature of its activities requires such licensing or qualifying and where its
failure to be so licensed or qualified would not have a Material Adverse Effect
on the Issuer or the Notes; and has full power, right and authority to enter
into this Indenture, the other Related Documents to which it is, or will be, a
party and the transactions contemplated hereby and thereby, to issue the Notes
in
28
accordance with a related Series Supplement and to perform each and all of the
matters and things herein and therein provided for.
(b) Issuer Authority, etc. The execution, delivery and performance by
the Issuer of this Base Indenture, the related Series Supplement and the other
Related Documents to which it is a party (other than any Related Document
relating solely to a Segregated Series) is, or will be, and the transactions
contemplated hereby and thereby, have been duly authorized by all necessary
limited partnership action.
(c) Compliance with Laws and Contracts. The execution, delivery and
performance by the Issuer of this Base Indenture, the Notes and the other
Related Documents (other than any Related Document relating solely to a
Segregated Series) to which the Issuer is a party do not and will not (i)
violate, in any material respect, any provision of any law, rule, regulation,
order, writ, judgment, injunction, decree, determination or award to which the
Issuer or its property is subject, or of the limited partnership agreement and
certificate of limited partnership of the Issuer; (ii) result in a material
breach of or constitute a material default under the provisions of any
indenture, loan or credit agreement or any other material agreement, lease or
instrument to which the Issuer may be or is subject or by which it, or its
property, is bound; or (iii) result in, or require, the creation or imposition
of any Lien on or with respect of any of the material properties of the Issuer
other than the Lien in favor of the Indenture Trustee provided herein; and the
Issuer is not in violation of, or in default under, any such law, rule,
regulation, order, writ, judgment, injunction, decree, determination or award or
any such indenture, agreement, lease or instrument except for violations or
defaults that singly or in the aggregate have not had nor would have a Material
Adverse Effect on the Issuer.
(d) Governmental Approvals. The Issuer has obtained all authorizations,
consents, approvals, exemptions of or filings or registrations with all
governmental commissions, regulatory bodies, boards, bureaus, agencies and
instrumentalities, domestic or foreign, necessary to the conduct of its business
and with respect to which the failure to obtain would not have a Material
Adverse Effect on the Issuer, or necessary to the valid execution, delivery and
performance by the Issuer of this Indenture, the Notes and the other Related
Documents (other than any Related Document relating solely to a Segregated
Series) to which the Issuer is, or will be, a party (the "Approvals"), and such
Approvals remain in full force and effect.
(e) Litigation. There is no action, suit, proceeding, inquiry or
investigation at law or in equity or before or by any court, public board or
body pending or, to the knowledge of the Issuer, overtly threatened in writing
against or affecting the Issuer wherein an unfavorable decision, ruling or
finding would have a Material Adverse Effect on the Issuer or which affects, or
purports to affect, the validity or enforceability against the Issuer of any
Related Document (other than any Related Document relating solely to a
Segregated Series).
(f) Employee Benefit Plans. All "employee benefit plans" (as such term
is defined in ERISA) of the Issuer and each of its ERISA Affiliates (as defined
in
29
ERISA) (individually, a "Plan" and collectively the "Plans") are in compliance
in all material respects with any applicable provisions of ERISA and the
regulations and published interpretations thereunder, except for compliance
amendments which may be required due to changes in such laws and regulations and
which were not addressed by the latest determination letters and for which the
retroactive amendment period has not expired. No Plan is insolvent or in
reorganization. No proceedings have been instituted to terminate any Plan, and
no conditions exist which would permit the institution of proceedings to
terminate any such Plan.
(g) Perfected Interest. Each Financed Student Loan, including the
related Student Loan Note or Alternative Loan Note, is owned by the Issuer or by
the Eligible Lender Trustee, on behalf of the Issuer, free and clear of any Lien
other than the Lien created by the Indenture. Except for the filing of the
financing statements being executed and filed in connection with the closing of
the transaction, no further action, including any filing or recording of any
document, is necessary in order to establish, protect and perfect the first
priority security interest of the Indenture Trustee, for the benefit of the
Secured Parties, in the Collateral as against any third party in any applicable
jurisdiction, including, without limitation, any purchaser from, or creditor of,
the Issuer. No financing statement or other instrument similar in effect
covering any of the Collateral or any interest therein is on file in any
recording office except such as may be filed (i) in connection with any Lien
arising solely as the result of any action taken by the Indenture Trustee, (ii)
in favor of the Indenture Trustee or (iii) for which UCC termination statements
have been filed or with respect to Liens which by their terms do not require
that a release be filed for the security interest of the Indenture Trustee to be
of first priority.
(h) Accuracy of Information. All information (including each Quarterly
Report, Student Loan Schedule, Alternative Loan Schedule and computer tape)
supplied by, or on behalf of, the Issuer in writing to the Indenture Trustee in
connection with this Indenture or the transactions contemplated hereby is true
and accurate in all material respects as of the date thereof stated or
certified. No information, exhibit or report furnished by the Issuer to the
Indenture Trustee in connection with this Indenture contained any material
misstatement.
(i) Defaults. No Event of Default or Unmatured Event of Default exists.
(j) Margin Regulations. The use of all funds obtained by the Issuer
under this Indenture will not conflict with or contravene any of Regulations T,
U and X promulgated by the Board of Governors of the Federal Reserve System from
time to time.
(k) Offices. The chief place of business and chief executive office of
the Issuer are located at the address of the Issuer referred to in Section 13.1
(or at such other location which may be specified in a Series Supplement from
time to time), and the offices where the Issuer keeps all its books, records and
documents evidencing the
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Financed Student Loans are located at the addresses specified in Schedule II (or
at such other locations, notified to the Indenture Trustee in accordance with
Section 13.1, in jurisdictions where all action necessary to maintain the
Indenture Trustee's first priority perfected interest, for the benefit of the
Secured Parties, in the Collateral has been taken and completed).
(l) Eligible Student Loans. Each Student Loan, as of the date of its
inclusion in the Collateral, is or will be an Eligible Student Loan.
(m) Eligible Alternative Loans. Each Alternative Loan, as of the date
of its inclusion in the Collateral, is or will be an Eligible Alternative Loan.
(n) The Issuer Not an Investment Company. The Issuer is not an
"investment company" or under the "control" of an "investment company", as such
terms are defined in the Investment Company Act.
Section 7.2. Representations and Warranties of the General Partner. The
General Partner hereby represents and warrants, as of each Series Closing Date:
(a) Organization, Corporate Powers. The General Partner is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware, has all necessary corporate power to carry on its
present business, is duly licensed or qualified in all jurisdictions where the
nature of its activities require such licensing or qualifying and where its
failure to be so licensed or qualified would not have a Material Adverse Effect
on the Issuer.
(b) Authority, etc. The execution, delivery and performance by the
General Partner of the limited partnership agreement of the Issuer and the
transactions contemplated thereby have been duly authorized by all necessary
corporate action.
(c) Compliance with Laws and Contracts. The execution, delivery and
performance by the General Partner of its duties under the limited partnership
agreement of the Issuer will not (i) violate, in any material respect, any
provision of any law, rule, regulation, order, writ, judgment, injunction,
decree, determination or award to which the General Partner or its property is
subject, or of the certificate of incorporation or bylaws of the General
Partner; (ii) result in a material breach of or constitute a material default
under the provisions of any indenture, loan or credit agreement or any other
material agreement, lease or instrument to which the General Partner may be or
is subject or by which it, or its property, is bound; or (iii) result in, or
require, the creation or imposition of any Lien on or with respect of any of the
material properties of the General Partner, which in any case would have a
Material Adverse Effect on the General Partner; and the General Partner is not
in violation of, or in default under, any such law, rule, regulation, order,
writ, judgment, injunction, decree, determination or award or any such
indenture, agreement, lease or instrument except for violations or defaults that
singly or in the aggregate have not had nor would have a Material Adverse Effect
on the General Partner.
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(d) Governmental Approvals. The General Partner has obtained all
authorizations, consents, approvals, exemptions of or filings or registrations
with all governmental commissions, regulatory bodies, boards, bureaus, agencies
and instrumentalities, domestic or foreign, necessary to the conduct of its
business and with respect to which the failure to obtain would not have a
Material Adverse Effect on the General Partner.
(e) Litigation. There is no action, suit, proceeding, inquiry or
investigation at law or in equity or before or by any court, public board or
body pending or, to the knowledge of the General Partner, overtly threatened in
writing against or affecting the General Partner wherein an unfavorable
decision, ruling or finding would have a Material Adverse Effect on the General
Partner or which affects, or purports to affect, the validity or enforceability
against the General Partner of the limited partnership agreement of the Issuer.
Section 7.3. Representations and Warranties of the Indenture Trustee.
The Indenture Trustee hereby represents and warrants, as of each Series Closing
Date:
(a) Due Organization. It is a national banking association duly
organized and validly existing in good standing under the laws of the United
States. It has all requisite corporate power and authority to execute, deliver
and perform its obligations under this Indenture.
(b) Authorization. It has taken all corporate action necessary to
authorize the execution and delivery by it of this Indenture, and this Indenture
will be executed and delivered by one of its officers who is duly authorized to
execute and deliver this Indenture on its behalf.
(c) Eligible Lender. It is an "eligible lender" as such term is defined
in Section 435(d) of the Higher Education Act, for purposes of being pledgee of
the Financed Student Loans as contemplated by this Indenture.
(d) Binding Obligation. This Indenture constitutes, and each other
Related Document to be executed by the Indenture Trustee when duly executed and
delivered, will constitute, a legal, valid and binding obligation of the
Indenture Trustee, enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization, or
other similar laws affecting the enforcement of creditors' rights generally and
by general principles of equity, regardless of whether such enforceability is
considered in a proceeding in equity or at law.
Section 7.4. Representations and Warranties of Eligible Lender Trustee.
The Eligible Lender Trustee hereby represents and warrants as follows, as of
each Series Closing Date:
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(a) Due Organization. It is a national banking association duly
organized and validly existing in good standing under the laws of the United
States. It has all requisite corporate power and authority to execute and
deliver this Indenture.
(b) Eligible Lender. It is an "eligible lender" as such term is defined
in Section 435(d) of the Higher Education Act.
Section 7.5. Reassignment upon Breach. The Issuer or the Indenture
Trustee, as the case may be, shall inform the other parties to this Indenture
and the Noteholders promptly, in writing, upon the discovery of any breach of
the representations and warranties made by the Issuer pursuant to Sections
7.1(g), (l) or (m) or any of the covenants of the Issuer made pursuant to
Section 8.3 that materially and adversely affects the interest of the
Noteholders in any Financed Student Loan (any such breach that does not affect
any Student Loan Guarantor's) obligation to guarantee payment of such Financed
Student Loan shall not be considered to have a material adverse effect and, if
pursuant to a Series Supplement the Noteholders have an interest in the
Alternative Loan Guarantor's obligation to guarantee payment of such Financed
Student Loan, any breach that does not affect any Alternative Loan Guarantor's
obligation to guarantee payment of such Financed Student Loan shall not be
considered to have a material adverse effect). Unless any such breach which
materially and adversely (subject to the preceding parenthetical) affects the
interests of the Noteholders, shall have been cured within 30 days following the
discovery thereof by the Issuer or receipt by the Issuer of written notice from
the Indenture Trustee of such breach, the Financed Student Loan as to which such
representation and warranty or covenant relates shall be released from the
Collateral and reassigned (a) in the case of a Student Loan to the Eligible
Lender Trustee, and (b) in the case of an Alternative Loan to the Seller (each,
a "Reassignment"), as of the first Determination Date succeeding the end of such
30 day period. In consideration of and as a precondition to the reassignment of
such Financed Student Loan, the Issuer shall deposit to the Collection Account
on such Determination Date immediately available funds equal to the Purchase
Amount. Notwithstanding the foregoing, so long as no Event of Default shall have
occurred and be continuing the Issuer may, at its option in lieu of depositing
such Purchase Amount to the Collection Account on such date, cause, as the case
may be, either (i) the Eligible Lender Trustee to pledge to the Indenture
Trustee on such date for inclusion in the Collateral a new Eligible Student Loan
in substitution for such Student Loan which was a Financed Student Loan, such
new Eligible Student Loan to have a Principal Balance plus accrued and unpaid
interest at least equal to the Substitution Amount of the Student Loan for which
it is being substituted and bearing an interest rate that is the maximum allowed
by law for the related student loan program, by delivering an updated Student
Loan Schedule to the Indenture Trustee reflecting such substitution or (ii) the
Issuer to pledge to the Indenture Trustee on such date for inclusion in the
Collateral a new Eligible Alternative Loan in substitution for such Alternative
Loan, such new Alternative Loan to have a Principal Balance plus accrued and
unpaid interest at least equal to the Substitution Amount of the Alternative
Loan for which it is being substituted and, if applicable, bearing an interest
rate that is the maximum allowed by law for the related student loan program, by
delivering an updated Alternative Loan
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Schedule to the Indenture Trustee reflecting such substitution (in either case,
a "Substitution"). The Indenture Trustee shall execute such documents reasonably
requested by the Issuer in order to effect such reassignment and to release the
Indenture Trustee's Lien thereunder. The sole remedy of the Indenture Trustee or
the Noteholders with respect to a breach of representations and warranties
pursuant to Sections 7.1(g), (l) and (m) and the covenants contained in Section
8.3 shall be to require the Issuer to deposit the Purchase Amount or substitute
Financed Student Loans as provided above.
ARTICLE VIII
COVENANTS
Section 8.1. Payment of Notes. The Issuer shall duly and punctually pay
or cause to be paid the principal of (and premium, if any) and interest
(including any Noteholder's Interest Basis Carryover, if any) on the Notes
pursuant to the provisions of this Base Indenture and any applicable Series
Supplement. Principal and interest shall be considered paid on the date due if
the Indenture Trustee or the Paying Agent holds on that date money designated
for and sufficient to pay all principal and interest then due. Amounts properly
withheld under the Code by any Person from a payment to any Noteholder of
interest and/or principal shall be considered as having been paid by the Issuer
to such Noteholder for all purposes of this Base Indenture.
In accordance with Section 2.6(a) the Issuer will maintain an office or
agency (which may be an office of the Indenture Trustee, Registrar or
co-registrar) where Notes may be surrendered for registration of transfer or
exchange, where notices and demands to or upon the Issuer in respect of the
Notes and this Base Indenture may be served, and where, at any time when the
Issuer is obligated to make a payment of principal and premium upon the Notes,
the Notes may be surrendered for payment. The Issuer will give prompt written
notice to the Indenture Trustee of the location, and any change in the location,
of such office or agency. If at any time the Issuer shall fail to maintain any
such required office or agency or shall fail to furnish the Indenture Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the Corporate Trust Office of the Indenture Trustee.
The Issuer may also from time to time designate one or more other offices or
agencies where the Notes may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations. The Issuer will
give prompt written notice to the Indenture Trustee of any such designation or
rescission and of any change in the location of any such other office or agency.
Section 8.2. Money for Payments to Be Held in Trust. All payments of
amounts due and payable with respect to any Notes that are to be made from
amounts distributed from the Collection Account or any other account shall be
made on behalf of the Issuer by the Indenture Trustee or by another Paying
Agent, and no amounts so distributed for payments of Notes shall be paid over to
the Issuer except as provided in this Base Indenture, or in any applicable
Series Supplement.
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The Issuer will cause each Paying Agent other than the Indenture
Trustee to execute and deliver to the Indenture Trustee and each Enhancement
Provider, if any, an instrument in which such Paying Agent shall agree with the
Indenture Trustee (and if the Indenture Trustee acts as Paying Agent, it hereby
so agrees), subject to the provisions of this Section, that such Paying Agent
will:
(i) hold all sums held by it for the payment of amounts due with
respect to the Notes in trust for the benefit of the Persons entitled thereto
until such sums shall be paid to such Persons or otherwise disposed of as herein
provided and pay such sums to such Persons as herein provided;
(ii) give the Indenture Trustee and each Enhancement Provider, if any,
notice of any default by the Issuer of which it has actual knowledge (or any
other obligor upon the Notes) in the making of any payment required to be made
with respect to the Notes;
(iii) at any time during the continuance of any such default, upon the
written request of the Indenture Trustee, forthwith pay to the Indenture Trustee
all sums so held in trust by such Paying Agent;
(iv) immediately resign as a Paying Agent and forthwith pay to the
Indenture Trustee all sums held by it in trust for the payment of Notes if at
any time it ceases to meet the standards required to be met by a Paying Agent at
the time of its appointment; and
(v) comply with all requirements of the Code with respect to the
withholding from any payments made by it on any Notes of any applicable
withholding taxes imposed thereon and with respect to any applicable reporting
requirements in connection therewith.
The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by Issuer
Order direct any Paying Agent to pay to the Indenture Trustee all sums held in
trust by such Paying Agent, such sums to be held by the Indenture Trustee upon
the same trusts as those upon which the sums were held by such Paying Agent; and
upon such payment by any Paying Agent to the Indenture Trustee, such Paying
Agent shall be released from all further liability with respect to such money.
Subject to applicable laws with respect to escheat of funds, any money
held by the Indenture Trustee or any Paying Agent in trust for the payment of
any amount due with respect to any Note and remaining unclaimed for two years
after such amount has become due and payable shall be discharged from such trust
and be paid to either (i) the Issuer on Issuer Request and with the prior
written consent of the applicable Enhancement Provider, if so specified in the
applicable Series Supplement, or (ii) if so specified in the applicable Series
Supplement, the applicable Enhancement Provider, if and to the extent such money
or any portion thereof was paid by such Enhancement
35
Provider, if any, to the Indenture Trustee for payment of interest on or
principal of the Notes; and the Noteholder thereof shall thereafter, as an
unsecured general creditor, look only to the Issuer for payment thereof (but
only to the extent of the amounts so paid to the Issuer), and all liability of
the Indenture Trustee or such Paying Agent with respect to such trust money
shall thereupon cease; provided, however, that the Indenture Trustee or such
Paying Agent, before being required to make any such repayment, shall at the
expense and direction of the Issuer cause to be published once, in a newspaper
published in the English language, customarily published on each Business Day
and of general circulation in The City of New York, notice that such money
remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such publication, any unclaimed balance of
such money then remaining will be repaid to the Issuer. The Indenture Trustee
shall also adopt and employ, at the expense of the Issuer, any other reasonable
means of notification of such repayment (including mailing notice of such
repayment to Noteholders whose Notes have been called but have not been
surrendered for redemption or whose right to or interest in monies due and
payable but not claimed is determinable from the records of the Indenture
Trustee or of any Paying Agent, at the last address of record for each such
Noteholder).
Section 8.3. Existence. The Issuer will keep in full effect its
existence, rights and franchises as a limited partnership under the laws of the
State of Delaware (unless, subject to the prior written consent of each
Enhancement Provider, if specified in the applicable Series Supplement, it
becomes, or any successor Issuer hereunder is or becomes, organized under the
laws of any other State or of the United States of America, in which case the
Issuer will keep in full effect its existence, rights and franchises under the
laws of such other jurisdiction) and will obtain and preserve its qualification
to do business in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this Indenture, the
Notes, the Collateral and each other instrument or agreement included in the
Indenture Trust Estate. The Issuer will maintain its status as a pass-through
entity for federal income tax purposes.
Section 8.4. Protection of Indenture Trust Estate. (a) The Issuer will
from time to time execute or authenticate and deliver a Supplement hereto and
all such financing statements, continuation or amendment statements, instruments
of further assurance and other instruments, and will take such other action
necessary or advisable to:
(i) maintain or preserve the lien and security interest of this
Indenture or carry out more effectively the purposes hereof;
(ii) perfect, publish notice of or protect the validity of any Grant
made or to be made by this Indenture;
(iii) collect payments due on the Financed Student Loans; or
(iv) preserve and defend title to the Indenture Trust Estate and the
rights of the Indenture Trustee and the Secured Parties in such Indenture Trust
Estate
36
against the claims of all persons and parties. It shall be the responsibility of
the Issuer to prepare such instruments.
The Issuer hereby designates the Indenture Trustee its agent and
attorney-in-fact to, if it fails to do so itself, execute or authenticate any
financing statement, continuation or amendment statement or other instrument
required to be executed, authenticated or filed pursuant to this Section.
(b) Opinions as to Indenture Trust Estate. On each Series Closing Date,
the Issuer shall furnish to the Indenture Trustee and each Enhancement Provider,
if any, an Opinion of Counsel either stating that, in the opinion of such
counsel, such action has been taken with respect to the recording and filing of
this Indenture, any Series Supplement, and any other requisite documents, and
with respect to the execution and filing of any financing statements and
continuation statements, as are necessary to perfect and make effective the lien
and security interest of this Indenture and reciting the details of such action,
or stating that, in the opinion of such counsel, no such action is necessary to
make such lien and security interest effective.
Section 8.5. Performance of Obligations. (a) The Issuer will not take
any action and will use its best efforts not to permit any action to be taken by
others (if such action is within the Issuer's control) that would release any
Person from any of such Person's material covenants or obligations under any
instrument or agreement included in the Indenture Trust Estate or that would
result in the amendment, hypothecation, subordination, termination or discharge
of, or impair the validity or effectiveness of, any such instrument or
agreement, except as expressly provided in this Indenture, each Series
Supplement, each Purchase and Contribution Agreement, the Servicing Agreement or
such other instrument or agreement.
(b) The Issuer may contract with other Persons to assist it in
performing its duties under this Indenture and each Series Supplement, and any
performance of such duties by a Person identified to the Indenture Trustee and
in an Officer's Certificate of the Issuer shall be deemed to be action taken by
the Issuer. Initially, the Issuer has contracted with the Servicer to assist the
Issuer in performing its duties under this Indenture.
(c) If the Issuer shall have knowledge of the occurrence of a Servicer
Default, the Issuer shall promptly notify the Indenture Trustee and the Rating
Agencies, and shall specify in such notice the action, if any, the Issuer is
taking with respect to such default. If a Servicer Default shall arise from the
failure of the Servicer to perform any of its duties or obligations under the
Servicing Agreement with respect to the Financed Student Loans, the Issuer shall
take all reasonable steps available to it to enforce its rights under the
Related Documents in respect of such failure and shall take all reasonable steps
available to it to enforce its rights in respect of such failure at the
direction of the Indenture Trustee or the Requisite Investors.
37
(d) Upon any termination of the Servicer's rights and powers pursuant
to any Servicing Agreement, the Issuer shall promptly notify the Indenture
Trustee and each Enhancement Provider, if any. As soon as a successor Servicer
is appointed the Issuer shall notify the Indenture Trustee and each Enhancement
Provider, if any, of such appointment, specifying in such notice the name and
address of such successor Servicer.
(e) Without derogating from the absolute nature of the assignment
granted to the Indenture Trustee under this Indenture or the rights of the
Indenture Trustee hereunder, the Issuer agrees that it will not, without the
prior written consent of the Indenture Trustee and each Enhancement Provider, if
specified in the applicable Series Supplement, amend, modify, waive, supplement,
terminate or surrender, or agree to any amendment, modification, supplement,
termination, waiver or surrender of, the terms of any Collateral or the Related
Documents, except to the extent otherwise provided in the Servicing Agreement,
or waive timely performance or observance by the Servicer, AMS, the Issuer or
the Eligible Lender Trustee under a material provision of any Purchase and
Contribution Agreement, or the Servicing Agreement; provided, however, that no
such amendment shall (i) increase or reduce in any manner the amount of, or
accelerate or delay the timing of, distributions that are required to be made
for the benefit of the Noteholders, (ii) reduce the aforesaid percentage of the
Notes which are required to consent to any such amendment, without the consent
of the Noteholders of all the outstanding Notes of the applicable Series, or
(iii) result in a deemed exchange of Notes for new notes under Section 1001 of
the Code. If any such amendment, modification, supplement or waiver shall be so
consented to, the Issuer agrees, promptly following a request by the Indenture
Trustee or any Enhancement Provider, if specified in the applicable Series
Supplement, to do so, to execute and deliver, in its own name and at its own
expense, such agreements, instruments, consents and other documents as the
Indenture Trustee or each Enhancement Provider, if specified in the applicable
Series Supplement, may deem necessary or appropriate in the circumstances.
(f) The Issuer shall maintain and implement administrative and
operating procedures (including, without limitation, an ability to recreate
records identifying and evidencing the Financed Student Loans in the event of
the destruction of the originals thereof), and keep and maintain, or cause to be
kept and maintained, all documents, books, records and other information
reasonably necessary or advisable for the collection of all the Financed Student
Loans (including, without limitation, records adequate to permit the daily
identification of each new Financed Student Loan included in the Collateral from
time to time and all Collections of and adjustments to each existing Financed
Student Loan).
(g) At its expense, the Issuer shall timely and fully perform and
comply, and cause the Eligible Lender Trustee to perform and comply, with all
material provisions, covenants and other promises required to be observed by
each of them under the Higher Education Act, all Student Loan Notes, all the
Student Loan Guaranty Agreements, each applicable Alternative Loan program, all
Alternative Loan Notes, all the Alternative Loan Guaranty Agreements, the
Servicing Agreement and other agreements to which the Issuer is a party related
to the Collateral.
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(h) The Issuer shall administer, operate and maintain, or cause the
Eligible Lender Trustee to administer, operate and maintain, its student loan
program in such manner as to ensure that such program and the Financed Student
Loans will benefit, to the extent applicable and in all material respects, from
(i) the Student Loan Guaranty Agreements, (ii) the Federal Family Education Loan
Program authorized under the Higher Education Act and the federal program of
reimbursement for Student Loans pursuant to the Higher Education Act, or from
any other federal statute providing for such Federal Student Loan Program, (iii)
the Alternative Loan Guaranty Agreements and (iv) each applicable Alternative
Loan program.
(i) The Issuer shall (i) maintain, and, where applicable, cause the
Eligible Lender Trustee to maintain, in effect all Student Loan Guaranty
Agreements, all Alternative Loan Guaranty Agreements and the Servicing
Agreement, diligently and promptly enforce its rights thereunder and take, or
use commercially reasonable steps to cause the Servicer to take, all reasonable
steps, actions and proceedings necessary or appropriate for the enforcement of
all material terms, covenants and conditions of each Financed Student Loan,
including the prompt payment of all principal and interest payments and all
other amounts due with respect to such Financed Student Loan, including all
Subsidy Payments, and all Student Loan Guaranty Payments under the applicable
Student Loan Guaranty Agreement and all Alternative Loan Guaranty Payments under
the applicable Alternative Loan Guaranty Agreement, except for such deferments
and forbearance permitted with respect to either Student Loans under the Higher
Education Act or Alternative Loans, and (ii) enter and, where applicable, cause
the Eligible Lender Trustee to enter, into Student Loan Guaranty Agreements so
that all Student Loans are covered thereby and enter into the Servicing
Agreement so that all Financed Student Loans are covered thereby.
Section 8.6. Reporting Requirements of the Issuer. The Issuer shall
furnish the reports required to be furnished by the Issuer, as described in
Article 4 of this Base Indenture and in the manner set forth in such Article.
Section 8.7. Servicing Covenants. From the date hereof until the
termination of this Indenture in accordance with its terms, the Issuer shall
comply with the following covenants.
(a) Servicing. The Issuer shall cause the Servicer to service,
administer and make collections with respect to the Financed Student Loans in
accordance in all material respects with all applicable Federal and State laws,
including all applicable standards, guidelines and requirements of the Higher
Education Act and any Student Loan Guaranty Agreement and any applicable
Alternative Loan program and any Alternative Loan Guaranty Agreement, the
failure to comply with which would adversely affect the eligibility of one or
more of the Financed Student Loans for Subsidy Payments, Student Loan Guaranty
Payments or Alternative Loan Guaranty Payments, as applicable, or would have a
Material Adverse Effect on the Issuer.
39
(b) Collection of Financed Student Loan Payments. The Issuer shall
cause the Servicer to make reasonable efforts (including all efforts that may be
specified under the Higher Education Act, any Student Loan Guaranty Agreement or
any Alternative Loan Guaranty Agreement), in each case in accordance with the
terms of the Servicing Agreement, to collect all payments called for under the
terms and provisions of the Financed Student Loans as and when the same shall
become due.
(c) Collection of Student Loan Guaranty Payments. The Issuer shall (or
shall cause the Servicer to) (i) make reasonable efforts to claim, pursue and
collect all Student Loan Guaranty Payments from the Student Loan Guarantors
pursuant to the Student Loan Guaranty Agreements with respect to any of the
Student Loans that are Financed Student Loans as and when the same shall become
due and payable, (ii) make reasonable efforts to claim, pursue and collect all
Alternative Loan Guaranty Payments from the Alternative Loan Guarantors pursuant
to the Alternative Loan Guaranty Agreements with respect to any of the
Alternative Loans that are Financed Student Loans as and when the same shall
become due and payable, and (iii) shall comply, and shall cause the Servicer to
comply, in all material respects with all applicable laws and agreements with
respect to claiming, pursuing and collecting such payments in each case in
accordance with the terms of the Servicing Agreement. In connection therewith,
the Servicer is hereby authorized and empowered to convey to (i) any Student
Loan Guarantor the Student Loan Note and the related Financed Student Loan file
representing any Financed Student Loan in connection with submitting a claim to
such Student Loan Guarantor for a Student Loan Guaranty Payment in accordance
with the terms of the applicable Student Loan Guaranty Agreement whereupon the
Lien of the Indenture Trustee relating to such Financed Student Loan shall be
released without any further action of any kind and (ii) any Alternative Loan
Guarantor the Alternative Loan Note and the related Financed Student Loan file
representing any Financed Student Loan in connection with submitting a claim to
such Alternative Loan Guarantor for an Alternative Loan Guaranty Payment in
accordance with the terms of the applicable Alternative Loan Guaranty Agreement
whereupon the Lien of the Indenture Trustee relating to such Financed Student
Loan shall be released without any further action of any kind.
(d) Collection of Subsidy Payments. The Issuer shall make or cause to
be made reasonable efforts to claim, pursue and collect all Subsidy Payments
from the DOE with respect to any of the Financed Student Loans as and when the
same shall become due and payable, shall comply or undertake commercially
reasonable efforts to cause compliance in all material respects with all
applicable laws and agreements with respect to claiming, pursuing and collecting
such payments. All amounts so collected by the Issuer or otherwise shall
constitute Collections for the applicable Collection Period and shall be
deposited into the Collection Account. In connection therewith, the Issuer shall
prepare and file or cause there to be prepared with the DOE on a timely basis
all claims, forms and other documents and filings necessary or appropriate in
connection with the claiming of Subsidy Payments and otherwise pursuing and
collecting such Subsidy Payments from the DOE.
40
(e) Realization upon Financed Student Loans. The Issuer shall cause the
Servicer to use reasonable efforts consistent with customary servicing practices
and procedures and subject to the Servicing Agreement, including all efforts
that may be specified under any applicable Student Loan Guaranty Agreement and
the Higher Education Act, or any applicable Alternative Loan Agreement in its
servicing of any delinquent Financed Student Loans.
Section 8.8. Negative Covenants of the Issuer. The Issuer shall not:
(a) except as expressly permitted by this Indenture or any other of the
Related Documents and except for properties and assets released from the
Indenture Trust Estate in accordance with this Indenture, sell, transfer,
exchange or otherwise dispose of any of the properties or assets of the Issuer,
including those included in the Indenture Trust Estate, unless directed to do so
by the Indenture Trustee;
(b) claim any credit on, or make any deduction from the principal or
interest (including any Noteholders' Interest Basis Carryover or interest
thereon, if any) payable in respect of the Notes (other than amounts properly
withheld from such payments under the Code or applicable state law) or assert
any claim against any present or former Noteholder by reason of the payment of
the taxes levied or assessed upon any part of the Indenture Trust Estate;
(c) except as contemplated by the Related Documents, dissolve or
liquidate in whole or in part; or
(d) (i) permit the validity or effectiveness of this Indenture to be
impaired, or permit the lien of this Indenture to be amended, hypothecated,
subordinated, terminated or discharged, or permit any Person to be released from
any covenants or obligations with respect to the Notes under this Indenture
except as may be expressly permitted hereby, (ii) permit any lien, charge,
excise, claim, security interest, mortgage or other encumbrance (other than the
lien of this Indenture) to be created on or extend to or otherwise arise upon or
burden the Indenture Trust Estate or any part thereof or any interest therein or
the proceeds thereof (other than tax liens and other liens that arise by
operation of law, in each case arising solely as a result of an action or
omission of the related Obligor, and other than as expressly permitted by the
Related Documents) or (iii) permit the lien of this Indenture not to constitute
a valid first priority (other than with respect to any such tax or other lien)
perfected security interest in the Indenture Trust Estate.
Section 8.9. Issuer May Consolidate, etc., Only on Certain Terms. (a)
The Issuer shall not consolidate or merge with or into any other Person, unless:
(i) the Person (if other than the Issuer) formed by or surviving such
consolidation or merger shall be a Person organized and existing under the laws
of the United States of America or any state and shall expressly assume, by an
indenture supplemental hereto, executed and delivered to the Indenture Trustee
and each
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Enhancement Provider, if any, in form satisfactory to the Indenture Trustee and
each Enhancement Provider, if specified in the applicable Series Supplement, the
due and punctual payment of the principal of, interest on and any Noteholders'
Interest Basis Carryover, if any, with respect to all Notes and the performance
or observance of every agreement and covenant of this Indenture on the part of
the Issuer to be performed or observed, all as provided herein;
(ii) immediately after giving effect to such transaction, no Event of
Default shall have occurred and be continuing;
(iii) the consent of each Enhancement Provider (if such consent right
shall be specified in the applicable Series Supplement) shall have been obtained
with respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel (and shall
have delivered copies thereof to the Indenture Trustee) to the effect that such
transaction will not have any material adverse tax consequence to the Issuer or
any Noteholder;
(v) any action as is necessary to maintain the lien and security
interest created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture Trustee and each
Enhancement Provider, if any, an Officer's Certificate of the Issuer stating
that such consolidation or merger and such Supplement comply with this Base
Indenture and that all conditions precedent provided for herein relating to such
transaction have been complied with by the Issuer.
(b) The Issuer shall not convey or transfer all or substantially all
its properties or assets, including those included in the Indenture Trust
Estate, to any Person, unless:
(i) the Person that acquires by conveyance or transfer the properties
and assets of the Issuer the conveyance or transfer of which is hereby
restricted (A) shall be a United States citizen or a Person organized and
existing under the laws of the United States of America or any state, (B)
expressly assumes, by a Supplement, executed and delivered in accordance with
this Base Indenture, the due and punctual payment of the principal of, interest
on and Noteholders' Interest Basis Carryover, if any, with respect to all Notes
and the performance or observance of every agreement and covenant of this
Indenture on the part of the Issuer to be performed or observed, all as provided
herein, (C) expressly agrees by means of such Supplement that all right, title
and interest so conveyed or transferred shall be subject and subordinate to the
rights of Noteholders and each Enhancement Provider, if any, (D) unless
otherwise provided in such Supplement, expressly agrees to indemnify, defend and
hold harmless the Issuer and each Enhancement Provider, if any, against and from
any loss, liability or expense arising under or related to this Indenture and
the Notes and (E) expressly agrees by means of such Supplement that such Person
(or if a group of Persons, then one specified Person)
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shall make all filings with the Commission (and any other appropriate Person)
required by the Exchange Act in connection with the Notes;
(ii) immediately after giving effect to such transaction, no Default or
Event of Default shall have occurred and be continuing;
(iii) the consent of each Enhancement Provider (if such consent right
shall be specified in the applicable Series Supplement) shall have been obtained
with respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel (and shall
have delivered copies thereof to the Indenture Trustee) to the effect that such
transaction will not have any material adverse tax consequence to the Issuer or
any Noteholder;
(v) any action as is necessary to maintain the lien and security
interest created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture Trustee and each
Enhancement Provider, if any, an Officer's Certificate of the Issuer stating
that such conveyance or transfer and such Supplement comply with this Base
Indenture and that all conditions precedent herein provided for relating to such
transaction have been complied with by the Issuer.
Section 8.10. Successor or Transferee. (a) Upon any consolidation or
merger of the Issuer in accordance with Section 8.9(a), the Person formed by or
surviving such consolidation or merger (if other than the Issuer) shall succeed
to, and be substituted for, and may exercise every right and power of, the
Issuer under this Indenture with the same effect as if such Person had been
named as the Issuer herein.
(b) Upon a conveyance or transfer of all the assets and properties of
the Issuer pursuant to Section 8.9(b), AMS-3 2003, LP will be released from
every covenant and agreement of this Indenture to be observed or performed on
the part of the Issuer with respect to the Notes immediately upon the delivery
by the Issuer of written notice to the Indenture Trustee and each Enhancement
Provider, if any, stating that AMS-3 2003, LP is to be so released.
Section 8.11. No Other Business. Except as contemplated by this
Indenture, its limited partnership agreement or the other Related Documents, the
Issuer shall not engage in any business other than financing, purchasing,
owning, selling and managing the Financed Student Loans in the manner
contemplated by this Indenture, its limited partnership agreement and the other
Related Documents, and activities incidental thereto.
Section 8.12. No Borrowing. Unless each Rating Agency Confirmation
Condition shall be satisfied with respect to such issuance, the Issuer shall not
issue, incur,
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assume, guarantee or otherwise become liable, directly or indirectly, for any
indebtedness except for the Notes.
Section 8.13. Guarantees, Loans, Advances and Other Liabilities. Except
as contemplated by the Related Documents or this Base Indenture, the Issuer
shall not make any loan or advance or credit to, or guarantee (directly or
indirectly or by an instrument having the effect of assuring another's payment
or performance on any obligation or capability of so doing or otherwise),
endorse or otherwise become contingently liable, directly or indirectly, in
connection with the obligations, stocks or dividends of, or own, purchase,
repurchase or acquire (or agree contingently to do so) any stock, obligations,
assets or securities of, or any other interest in, or make any capital
contribution to, any other Person.
ARTICLE IX
EVENTS OF DEFAULTS AND REMEDIES
Section 9.1. Event of Defaults. "Event of Default," wherever used
herein, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law and/or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body):
(a) A default for two days or more in the payment of interest
(excluding Noteholders' Interest Basis Carryover) on any Note after the same
becomes due and payable; provided, that no default under this clause (a) with
respect to a subordinate Note will constitute an Event of Default so long as any
senior Notes are outstanding;
(b) A default in the payment of the remaining balance of any Series of
Notes on the Final Scheduled Payment Date for each class of such Series of
Notes;
(c) A default not otherwise constituting an Event of Default under
clause (a) or (b) above for three Business Days or more in the payment of
interest or any installment or principal of any Series of Notes when the same
becomes due and payable and when available funds with respect to such Series of
Notes are sufficient to make such payment;
(d) default in any material respect in the observance or performance of
any covenant or agreement of the Issuer made in this Indenture and the
continuation of any such default for a period of 30 days after notice thereof is
given to the Issuer by the Indenture Trustee or to the Issuer and the Indenture
Trustee by the holders of at least 25% of the aggregate Note Principal Amount of
all Series of Notes then outstanding; provided, however, that if any Series of
Notes shall limit the voting rights with respect to such Series to certain
classes during certain times, only the classes with then-current voting rights
will be taken into consideration, and provided, further, that if the Issuer
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demonstrates that it is making a good-faith attempt to cure such default, such
30 day period may be extended by the Indenture Trustee to 90 days; or
(e) any representation or warranty made by the Issuer in this Indenture
or in any certificate delivered pursuant hereto or in connection herewith having
been incorrect in a material adverse respect as of the time made, and such
breach not having been cured within 45 days after notice thereof is given to the
Issuer by the Indenture Trustee or to the Issuer and the Indenture Trustee by
the holders of at least 25% of the aggregate Note Principal Amount of all Series
of Notes then outstanding; provided, however, that if any Series of Notes shall
limit the voting rights with respect to such Series to certain classes during
certain times, only the classes with then-current voting rights will be taken
into consideration, and provided, further, that if the Issuer demonstrates that
it is making a good-faith attempt to cure such breach, such 45 day period may be
extended by the Indenture Trustee) to 90 days; or
(f) the filing of a decree or order for relief by a court having
jurisdiction in the premises in respect of the Issuer or any substantial part of
the Indenture Trust Estate in an involuntary case under any applicable federal
or state bankruptcy, insolvency or other similar law now or hereafter in effect,
or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator
or similar official of the Issuer or for any substantial part of the Indenture
Trust Estate, or ordering the winding-up or liquidation of the Issuer's affairs,
and such decree or order shall remain unstayed and in effect for a period of 60
consecutive days;
(g) the commencement by the Issuer of a voluntary case under any
applicable federal or state bankruptcy, insolvency or other similar law now or
hereafter in effect, or the consent by the Issuer to the entry of an order for
relief in an involuntary case under any such law, or the consent by the Issuer
to the appointment or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Issuer or for any
substantial part of the Indenture Trust Estate, or the making by the Issuer of
any general assignment for the benefit of creditors, or the failure by the
Issuer generally to pay its debts as such debts become due, or the taking of
action by the Issuer in furtherance of any of the foregoing; and
(h) Any of the Related Documents or any material portion thereof shall
not be in full force and effect, enforceable in accordance with its terms (other
than any Related Document that has been terminated in accordance with its
terms); and
(i) Any other event shall occur which may be specified in any Series
Supplement as an "Event of Default."
Section 9.2. Rights of the Indenture Trustee upon Events of Default.
(a) Acceleration of Maturity; Recision and Annulment. If and whenever an Event
of Default specified in Section 9.1 (a), (b), (c), (d), (e), (h) or (i) should
occur and be continuing with respect to a Series of Notes (other than a
Segregated Series), the Indenture Trustee may and, at the written direction of
the Requisite Investors shall
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declare all the Notes of each Series (other than a Segregated Series) to be
immediately due and payable, by a notice in writing to the Issuer and upon any
such declaration the unpaid principal amount of such Notes of each Series (other
than a Segregated Series), together with accrued and unpaid interest thereon
through the date of acceleration shall become immediately due and payable. If
and whenever an Event of Default specified in Section 9.1 (f) or (g) should
occur and be continuing with respect to a Shared Collateral Series, the Notes of
all Shared Collateral Series shall be immediately due and payable without notice
or action by any person. If and whenever an Event of Default should occur and be
continuing with respect to a Segregated Series of Notes, the Indenture Trustee
may and, at the written direction of the Required Noteholders with respect to
such Segregated Series of Notes shall, declare all the Notes with respect to
such Segregated Series to be immediately due and payable, by a notice in writing
to the Issuer and upon any such declaration the unpaid principal amount of such
Segregated Series of Notes, together with accrued and unpaid interest thereon
through the date of acceleration shall become immediately due and payable. The
Indenture Trustee shall provide each Rating Agency with written notice of any
acceleration of maturity of the Notes. At any time after such declaration of
acceleration of maturity has been made and before a judgment or decree for
payment of the money due has been obtained by the Indenture Trustee as
hereinafter provided in this Article IX, the Requisite Investors (if such
acceleration of maturity relates to all outstanding Series of Notes other than a
Segregated Series) or the Required Noteholders for the applicable Series (if
such acceleration of maturity relates to a Segregated Series of Notes) may
rescind and annul such declaration and its consequences if:
(i) the Issuer has paid or deposited with the Indenture Trustee a sum
sufficient to pay:
(A) all payments of principal of and interest on (1) all Notes
of each Series (if such Event of Default occurred with respect a Series
of Notes other than a Segregated Series) or (2) all Notes of the
applicable Segregated Series (if such Event of Default occurred with
respect to a Segregated Series), and all other amounts that would then
be due hereunder or upon such Notes if the Event of Default giving rise
to such acceleration had not occurred; and
(B) all sums paid or advanced by the Indenture Trustee
hereunder plus all amounts owed to each Enhancement Provider, if any,
under the Related Documents and the reasonable compensation, expenses,
disbursements and advances of the Indenture Trustee and its agents and
counsel; and
(ii) all Events of Default, other than the nonpayment of the principal
of the Notes that have become due solely by such acceleration, have been cured
or waived as provided in Section 9.11.
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No such rescission shall affect any subsequent default or impair any
right consequent thereto.
(b) Related Documents. If an Event of Default shall have occurred and
be continuing with respect to (i) a non-Segregated Series of Notes, the
Indenture Trustee shall exercise, to the extent necessary, all rights, remedies,
powers, privileges and claims of the Issuer against any party under or in
connection with applicable law and the Related Documents for each Series which
is a non-Segregated Series of Notes, including the right or power to take any
action to compel performance or observance by any such party of its obligations
to the Issuer, and to give any consent, request, notice, direction, approval,
extension or waiver in respect of the Related Documents for each Series which is
a non-Segregated Series of Notes; or (ii) a Segregated Series of Notes, the
Indenture Trustee shall exercise, to the extent necessary, all rights, remedies,
powers, privileges and claims of the Issuer against any party under or in
connection with the applicable law and the Related Documents for such Segregated
Series, including the right or power to take any action to compel performance or
observance by any such party of its obligations to the Issuer, and to give any
consent, request, notice, direction, approval, extension or waiver in respect of
the Related Documents for such Segregated Series. If so specified in the
applicable Series Supplement, the Indenture Trustee may agree to limit its
exercise of rights and remedies available to it as a result of the occurrence of
an Event of Default to the extent set forth therein.
(c) [Reserved].
(d) Certain Other Non-Segregated Series. Certain Series of Notes (not
including any Segregated Series of Notes) may provide for allocations of
Collections to such Series of Notes only in respect of specified items of
Collateral upon the occurrence of certain Events of Default. Upon the occurrence
of such an Event of Default relating to such a Series of Notes, the Indenture
Trustee shall, to the extent specified in the applicable Series Supplement,
limit any recourse hereunder to the related specified items of Collateral to
satisfy the payment of all interest and principal on such Series of Notes up to
the Note Principal Amount of such Series.
(e) Segregated Series. Upon the occurrence of an Event of Default
relating to any outstanding Segregated Series of Notes, the Indenture Trustee
shall limit any recourse hereunder to the related Series-Specific Collateral in
satisfying the payment of interest and principal due on such Segregated Series
of Notes.
Section 9.3. Other Remedies. (a) Subject to the terms and conditions of
this Base Indenture, if an Event of Default occurs and is continuing, the
Indenture Trustee may pursue any remedy available under applicable law or in
equity to collect the payment of principal or interest on the Notes (or the
applicable Segregated Series of Notes, in the case of an Event of Default that
affects only one or more particular Segregated Series of Notes) or to enforce
the performance of any provision of each Series of Notes, this Base Indenture or
any Series Supplement with respect to each Series of Notes. In addition, the
Indenture Trustee may, or shall at the written direction of the Requisite
Investors (or the
47
Required Noteholders of one or more Segregated Series of Notes, in the case of
an Event of Default that affects only such Segregated Series of Notes), direct
the Issuer to exercise any rights or remedies available under any Related
Document or under applicable law or in equity with respect to each Series of
Notes or to do one or more of the following (subject to the provisions of this
Base Indenture and any Series Supplement):
(i) institute Proceedings in its own name and as trustee of an express
trust for the collection of all amounts then payable on the Notes or under this
Indenture with respect thereto, whether by declaration or otherwise, enforce any
judgment obtained, and collect from the Issuer and any other obligor upon such
Notes monies adjudged due;
(ii) institute Proceedings from time to time for the complete or
partial foreclosure of this Indenture with respect to the Indenture Trust
Estate;
(iii) exercise any remedies of a secured party under the UCC and take
any other appropriate action to protect and enforce the rights and remedies of
the Indenture Trustee, each Enhancement Provider, if any, and the Noteholders;
and
(iv) sell the Indenture Trust Estate or any portion thereof or rights
or interests therein, at one or more public or private sales called and
conducted in any manner permitted by law;
provided, however, that the Indenture Trustee may not sell or otherwise
liquidate the Indenture Trust Estate following an Event of Default, unless (A)
the Noteholders holding 100% of the Note Principal Amount for each outstanding
Shared Collateral Series of Notes consents (or the Noteholders holding 100% of
the Note Principal Amount for each applicable Segregated Series of Notes, in the
case of an Event of Default that affects only one or more particular Segregated
Series of Notes, consents); (B) the proceeds of such sale or liquidation
distributable to the Noteholders are sufficient to discharge in full all amounts
then due and unpaid upon such Notes for principal and interest (as evidenced by
a certificate of a Responsible Officer of the Indenture Trustee) or (C) the
Indenture Trustee determines that the Indenture Trust Estate will not continue
to provide sufficient funds for the payment of principal of and interest on the
Notes as they would have become due if the Notes had not been declared due and
payable, and the Indenture Trustee obtains the consent of the Supermajority
Investors (or the consent of the Required Noteholders of each applicable
Segregated Series of Notes in the case of an Event of Default that affects only
one or more particular Segregated Series of Notes). In determining such
sufficiency or insufficiency with respect to clauses (B) and (C), the Indenture
Trustee may, but need not, obtain and rely upon an opinion of an Independent
investment banking or accounting firm of national reputation as to the
feasibility of such proposed action and as to the sufficiency of the Indenture
Trust Estate for such purpose.
(b) The Indenture Trustee may maintain a Proceeding even if it does not
possess any of the Notes or does not produce any of them in the proceeding, and
any such Proceeding instituted by the Indenture Trustee shall be in its own name
as Indenture Trustee. All remedies are cumulative to the extent permitted by
law.
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Section 9.4. Optional Preservation of the Indenture Trust Estate. If
the Notes have been declared to be due and payable under Section 9.1 following
an Event of Default and such declaration and its consequences have not been
rescinded and annulled, the Indenture Trustee may elect to maintain possession
of the Indenture Trust Estate. It is the desire of the parties hereto and the
Noteholders that there be at all times sufficient funds for the payment of
principal of and interest (including any Noteholders' Interest Basis Carryover)
on the Notes, and the Indenture Trustee shall take such desire into account when
determining whether to maintain possession of the Indenture Trust Estate. In
determining whether to maintain possession of the Indenture Trust Estate, the
Indenture Trustee may, but need not, obtain and rely upon an opinion (which
shall be obtained at the expense of the Issuer) of an Independent investment
banking or accounting firm of national reputation as to the feasibility of such
proposed action and as to the sufficiency of the Indenture Trust Estate for such
purpose.
Section 9.5. Limitation on Suits. Any other provision of this Base
Indenture to the contrary notwithstanding, a Noteholder may pursue a remedy with
respect to this Indenture or the Notes only if:
(a) The Noteholder gives to the Indenture Trustee written notice of a
continuing Event of Default with respect to such Noteholder;
(b) The Requisite Investors (or the Required Noteholders of one or more
Segregated Series of Notes if one or more Segregated Series of Notes is
affected) make a written request to the Indenture Trustee to pursue the remedy;
(c) Such Noteholder or Noteholders offer and, if requested, provide to
the Indenture Trustee reasonable indemnity against any loss, liability or
expense;
(d) The Indenture Trustee does not comply with the request within 60
days after receipt of the request; and
(e) During such 60-day period the Requisite Investors (or the Required
Noteholders of one or more Segregated Series of Notes if one or more Segregated
Series of Notes is affected) do not give the Indenture Trustee a direction
inconsistent with the request.
A Noteholder may not use this Base Indenture to prejudice the rights of another
Noteholder or to obtain a preference or priority over another Noteholder.
Section 9.6. Unconditional Rights of Holders to Receive Payment;
Withholding Taxes. (a) Notwithstanding any other provision of this Base
Indenture, the right of any Noteholder of a Note to receive payment of principal
and interest on the Note (except for any Noteholders' Interest Basis Carryover),
on or after the respective due dates expressed in the Note, or to bring suit for
the enforcement of any such payment on or after such respective dates, is
absolute and unconditional and shall not be impaired or affected without the
consent of the Noteholder.
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(b) The Paying Agent shall (or if the Indenture Trustee is not the
Paying Agent, the Indenture Trustee shall cause the Paying Agent to execute and
deliver to the Indenture Trustee an instrument in which such Paying Agent shall
agree with the Indenture Trustee that such Paying Agent shall) comply with all
requirements of the Code regarding the withholding of payments in respect of
Federal income taxes due from Noteholders and otherwise comply with the
provisions of this Base Indenture applicable to it.
Section 9.7. Restoration of Rights and Remedies. If the Indenture
Trustee, or any Noteholder, has instituted any Proceeding to enforce any right
or remedy under this Indenture and such Proceeding has been discontinued or
abandoned for any reason or has been determined adversely to the Indenture
Trustee or to such Noteholder, then and in every such case the Issuer, the
Indenture Trustee and the Noteholders shall, subject to any determination in
such Proceeding, be restored severally and respectively to their former
positions hereunder, and thereafter all rights and remedies of the Indenture
Trustee and the Noteholders shall continue as though no such Proceeding had been
instituted.
Section 9.8. Rights and Remedies Cumulative. No right or remedy herein
conferred upon or reserved to the Indenture Trustee or to the holders of Notes
is intended to be exclusive of any other right or remedy, and every right or
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given under this Base Indenture or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy under this Base Indenture, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
Section 9.9. Delay or Omission Not Waiver. No delay or omission of the
Indenture Trustee or of any holder of any Note to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article 9 or by law to the Indenture
Trustee or to the holders of Notes may be exercised from time to time, and as
often as may be deemed expedient, by the Indenture Trustee or by the holders of
Notes, as the case may be.
Section 9.10. Control by Requisite Investors or Required Noteholders.
The Requisite Investors (or to the extent such remedy relates only to a
particular Segregated Series of Notes, the Required Noteholders) may direct the
time, method and place of conducting any Proceeding for any remedy available to
the Indenture Trustee or exercising any trust or power conferred on the
Indenture Trustee. However, (a) subject to Section 10.1, the Indenture Trustee
may refuse to follow any direction that it determines might involve it in
liability, conflicts with law or this Base Indenture, or that the Indenture
Trustee determines might materially adversely affect the rights of any
Noteholders not consenting to such action, (b) subject to the express terms of
Section 9.3, any direction to sell or liquidate the Indenture Trust Estate shall
be by the Noteholders holding 100% of the aggregate Note Principal Amount of all
Series of Notes; provided,
50
however, that if any Series of Notes shall limit the voting rights with respect
to such Series to certain classes during certain times, only the classes with
then-current voting rights will be taken into consideration and (c) if the
conditions set forth in Section 9.4 have been satisfied and the Indenture
Trustee elects to retain the Indenture Trust Estate pursuant to such Section,
then any direction to the Indenture Trustee by Noteholders holding less than
100% of the aggregate Note Principal Amount for all Series of Notes; provided,
however, that if any Series of Notes shall limit the voting rights with respect
to such Series to certain classes during certain times, only the classes with
then-current voting rights will be taken into consideration, to sell or
liquidate the Indenture Trust Estate shall be of no force or effect.
Section 9.11. Waiver of Past Events. Subject to Section 12.2 hereof,
the Requisite Investors (or the Required Noteholders of a Segregated Series of
Notes if only a Segregated Series of Notes has been affected), by notice to the
Indenture Trustee, may waive any existing Potential Event of Default or Event of
Default, except that (a) any Potential Event of Default or Event of Default
arising out of an Event of Bankruptcy with respect to the Issuer or (b) any
Potential Event of Default or Event of Default in the payment of the principal
of or interest on any Note of such Series may only be waived by the Noteholders
holding 100% of the Note Principal Amount of each Series of Notes. Upon any such
waiver pursuant to this Section 9.4, such Potential Event of Default or Event of
Default shall cease to exist with respect to all (but not less than all) Series,
and any Potential Event of Default or Event of Default with respect to all (but
not less than all) Series arising therefrom shall be deemed to have been cured
for every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other Potential Event of Default or Event of Default or impair any
right consequent thereon.
Section 9.12. Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee.
(a) The Issuer covenants that if (i) default is made in the payment of
any interest (including any Noteholders' Interest Basis Carryover or interest
thereon) on any Notes when the same becomes due and payable, and such default
continues for a period of two days, or (ii) default is made in the payment of
the remaining principal balance of any Notes when the same becomes due and
payable on the applicable Final Scheduled Payment Date, or (iii) default for
five days or more is made in the payment of any installment of the principal of
any Notes when the same becomes due and payable and when available funds are
sufficient to make such payment, the Issuer shall, upon demand of the Indenture
Trustee, pay to it, for the benefit of the Noteholders, the whole amount then
due and payable on such Notes for principal and interest (and any Noteholders'
Interest Basis Carryover), with interest upon the overdue principal, and, to the
extent payment at such rate of interest shall be legally enforceable, upon
overdue installments of interest (and any Noteholders' Interest Basis Carryover
together with interest thereon), at the rate specified in the applicable Series
Supplement and in addition thereto such further amount as shall be sufficient to
cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Indenture Trustee and
its respective agents and counsel.
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(b) In case the Issuer shall fail forthwith to pay such amounts upon
such demand, the Indenture Trustee, in its own name and as trustee of an express
trust, may (and with the prior written consent of the Requisite Investors,
shall) institute a Proceeding for the collection of the sums so due and unpaid,
and may prosecute such Proceeding to judgment or final decree, and may enforce
the same against the Issuer or other obligor upon such Notes and collect in the
manner provided by law out of the property of the Issuer or other obligor upon
such Notes, wherever situated, the monies adjudged or decreed to be payable, in
each case subject to Section 13.17 of this Base Indenture.
(c) If an Event of Default occurs and is continuing, the Indenture
Trustee may, in its discretion, proceed to protect and enforce its rights and
the rights of the Noteholders, by such appropriate Proceedings as the Indenture
Trustee shall deem most effective to protect and enforce any such rights,
whether for the specific enforcement of any covenant or agreement in the
applicable Related Document or in aid of the exercise of any power granted
herein, or to enforce any other proper remedy or legal or equitable right vested
in the Indenture Trustee by the applicable Related Document or by law, in each
case subject to Section 13.17 of this Base Indenture.
(d) In case there shall be pending, relative to the Issuer or any other
obligor upon the Notes or any Person having or claiming an ownership interest in
the Indenture Trust Estate, Proceedings under Title 11 of the United States Code
or any other applicable federal or state bankruptcy, insolvency or other similar
law, or in case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or
taken possession of the Issuer or its property or such other obligor or Person,
or in case of any other comparable judicial Proceeding relative to the Issuer or
other obligor upon the Notes, or to the creditors or property of the Issuer or
such other obligor, the Indenture Trustee, irrespective of whether the principal
of any Notes shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Indenture Trustee shall
have made any demand pursuant to the provisions of this Section, shall be
entitled and empowered, and shall, at the written direction of the Requisite
Investors, by intervention in such proceedings or otherwise:
(i) to file and prove a claim or claims for the whole amount of
principal and interest (including any Noteholders' Interest Basis Carryover and
interest thereon) owing and unpaid in respect of any Notes and to file such
other papers or documents as may be necessary or advisable in order to have the
claims of the Indenture Trustee (including any claim for reasonable compensation
to the Indenture Trustee and each predecessor Indenture Trustee, and their
respective agents, attorneys and counsel, and for reimbursement of all expenses
and liabilities incurred, and all advances made, by the Indenture Trustee and
each predecessor Indenture Trustee, except as a result of negligence, willful
misconduct or bad faith) and of the Noteholders allowed in such Proceeding;
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(ii) unless prohibited by applicable law and regulations, to vote on
behalf of the Noteholders in any election of a trustee, a standby trustee or
Person performing similar functions in any such Proceeding;
(iii) to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute all amounts received with
respect to the claims of the Noteholders and the Indenture Trustee on their
behalf; and
(iv) to file such proofs of claim and other papers or documents as may
be necessary or advisable in order to have the claims of the Indenture Trustee
or the Noteholders allowed in any judicial Proceeding relative to the Issuer,
its creditors and its property;
and any trustee, receiver, liquidator, custodian or other similar
official in any such Proceeding is hereby authorized by each of such Noteholders
to make payments to the Indenture Trustee, and, in the event that the Indenture
Trustee shall consent to the making of payments directly to such Noteholders, to
pay to the Indenture Trustee such amounts as shall be sufficient to cover
reasonable compensation to the Indenture Trustee, each predecessor Indenture
Trustee and their respective agents, attorneys and counsel, and all other
expenses and liabilities incurred, and all advances made, by the Indenture
Trustee and each predecessor Indenture Trustee except as a result of negligence,
willful misconduct or bad faith.
(e) Nothing herein contained shall be deemed to authorize the Indenture
Trustee to authorize or consent to or vote for or accept or adopt on behalf of
any Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Noteholder thereof or to
authorize the Indenture Trustee to vote in respect of the claim of any
Noteholder in any such proceeding except, as aforesaid, to vote for the election
of a trustee in bankruptcy or similar Person.
(f) All rights of action and of asserting claims under this Indenture,
or under any of the Notes, may be enforced by the Indenture Trustee without the
possession of any of the Notes or the production thereof in any trial or other
Proceeding relative thereto, and any such action or Proceeding instituted by the
Indenture Trustee shall be brought in its own name as trustee of an express
trust, and any recovery of judgment, subject to the payment of the expenses,
disbursements and compensation of the Indenture Trustee, each predecessor
Indenture Trustee and their respective agents and attorneys, shall be for the
benefit of the Noteholders.
(g) In any Proceeding brought by the Indenture Trustee (and also any
Proceeding involving the interpretation of any provision of this Indenture to
which the Indenture Trustee shall be a party), the Indenture Trustee shall be
held to represent all the Noteholders, and it shall not be necessary to make any
Noteholder a party to any such Proceeding.
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Section 9.13. The Indenture Trustee May File Proofs of Claim. The
Indenture Trustee is authorized to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Indenture Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Indenture Trustee, its agents and
counsel) and the Noteholders allowed in any judicial proceedings relative to the
Issuer (or any other obligor upon the Notes), its creditors or its property, and
shall be entitled and empowered to collect, receive and distribute any money or
other property payable or deliverable on any such claim and any custodian in any
such judicial proceeding is hereby authorized by each Noteholder to make such
payments to the Indenture Trustee and, in the event that the Indenture Trustee
shall consent to the making of such payments directly to the Noteholders, to pay
the Indenture Trustee any amount due to it for the reasonable compensation,
expenses, disbursements and advances of the Indenture Trustee, its agents and
counsel, and any other amounts due the Indenture Trustee under Section 10.2
hereof. To the extent that the payment of any such compensation, expenses,
disbursements and advances of the Indenture Trustee, its agents and counsel, and
any other amounts due the Indenture Trustee under Section 10.2 hereof out of the
estate in any such proceeding, shall be denied for any reason, payment of the
same shall be secured by a Lien on, and shall be paid out of, any and all
distributions, dividends, money, notes and other properties which the
Noteholders of the Notes may be entitled to receive in such proceeding whether
in liquidation or under any plan of reorganization or arrangement or otherwise.
Nothing herein contained shall be deemed to authorize the Indenture Trustee to
authorize or consent to or accept or adopt on behalf of any Noteholder any plan
of reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Noteholder thereof, or to authorize the Indenture Trustee to
vote in respect of the claim of any Noteholder in any such proceeding.
Section 9.14. Priorities. If the Indenture Trustee collects any money
pursuant to this Article, the Indenture Trustee shall pay out the money in
accordance with the provisions of Article 5 and Section 6.1 of this Indenture.
Section 9.15. Undertaking for Costs. In any suit for the enforcement of
any right or remedy under this Indenture or in any suit against the Indenture
Trustee for any action taken or omitted by it as an Indenture Trustee, a court
in its discretion may require the filing by any party litigant in the suit of
any undertaking to pay the costs of the suit, and the court in its discretion
may assess reasonable costs, including reasonable attorneys' fees and expenses,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section does
not apply to a suit by the Indenture Trustee or a suit by a Noteholder pursuant
to Section 9.5.
Section 9.16. Reassignment of Surplus. Promptly after termination of
this Base Indenture and the payment in full of the Issuer Obligations, any
proceeds of the Collateral received or held by the Indenture Trustee shall be
turned over to the Issuer and the Eligible Lender Trustee and the Collateral
shall be reassigned to the Issuer and the
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Eligible Lender Trustee by the Indenture Trustee without recourse to the
Indenture Trustee and without any representations, warranties or agreements of
any kind.
Section 9.17. Waiver of Stay or Extension Laws. The Issuer covenants
(to the extent that it may lawfully do so) that it will not at any time insist
upon, or plead or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, that may affect the covenants or the performance of this
Indenture; and the Issuer (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
will not hinder, delay or impede the execution of any power herein granted to
the Indenture Trustee, but will suffer and permit the execution of every such
power as though no such law had been enacted.
Section 9.18. Action on Notes. The Indenture Trustee's right to seek
and recover judgment on the Notes or under this Indenture shall not be affected
by the seeking, obtaining or application of any other relief under or with
respect to this Indenture. Neither the lien of this Indenture nor any rights or
remedies of the Indenture Trustee or the Noteholders shall be impaired by the
recovery of any judgment by the Indenture Trustee against the Issuer or by the
levy of any execution under such judgment upon any portion of the Indenture
Trust Estate or upon any of the assets of the Issuer. Any money or property
collected by the Indenture Trustee shall be applied in accordance with this Base
Indenture and any Series Supplement.
Section 9.19. Remedies; Priorities.
(a) If and whenever (i) an Event of Default shall have occurred and be
continuing with respect to any Shared Collateral Series, (ii) the Notes of such
Shared Collateral Series have been declared, or have become, immediately due and
payable and (iii) the Financed Student Loans have been liquidated, the Indenture
Trustee shall distribute such proceeds in the following order:
FIRST: on a pari passu basis (based on the ratio of each such amount to
the total of such amounts), to the Indenture Trustee and Eligible
Lender Trustee for all due and unpaid Indenture Trustee fees and to the
Eligible Lender Trustee for all due and unpaid Eligible Lender Trustee
fees;
SECOND: to the Servicer for all due and unpaid Servicing Fees due to
the Servicer under the Servicing Agreement;
THIRD: to the Noteholders holding Class A Notes of each Series for
amounts due and unpaid on such Notes, for interest (other than any
Noteholders' Interest Basis Carryover), on a pro rata basis (based on
the ratio of each such amount to the total of such amounts) as between
each Class and ratably as between Noteholders within each such Class,
without preference or priority of any kind, according to the respective
amounts due and payable on such Notes for interest;
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FOURTH: to the Noteholders holding Class A Notes of each Series for
amounts due and unpaid on such Notes for principal, on a pro rata basis
as between each Class (based on the unpaid Note Principal Amount of
each such Class) and ratably as between Noteholders within each such
Class, without preference or priority of any kind, according to the
respective amounts due and payable on such Notes for principal, until
such Notes have been paid in full;
FIFTH: to the Noteholders holding Class B Notes of each Series for
amounts due and unpaid on such Notes, for interest (other than any
Noteholders' Interest Basis Carryover), on a pro rata basis (based on
the ratio of each such amount to the total of such amounts) as between
each Class and ratably as between Noteholders within each such Class,
without preference or priority of any kind, according to the respective
amounts due and payable on such Notes for interest;
SIXTH: to the Noteholders holding Class B Notes of each Series for
amounts due and unpaid on such Notes for principal, on a pro rata basis
as between each Class (based on the unpaid Note Principal Amount of
each such Class) and ratably as between Noteholders within each such
Class, without preference or priority of any kind, according to the
respective amounts due and payable on such Notes for principal, until
such Notes have been paid in full;
SEVENTH: on a pro rata basis (based on the ratio of each such amount to
the total of such amounts), to each Interest Rate Exchange Agreement
Counterparty for all due and unpaid termination amounts with respect to
any outstanding Interest Rate Exchange Agreements resulting from the
insolvency of the Issuer or the failure of the Issuer to make regularly
scheduled payments under any outstanding Interest Rate Exchange
Agreements;
EIGHTH: to the Noteholders holding Class A Notes of each Series for any
unpaid Noteholders' Interest Basis Carryover, on a pari passu basis
(based on the ratio of each such amount to the total of such amounts)
as between each Class and ratably as between Noteholders within each
such Class, without preference or priority of any kind, according to
the amounts due and payable on such Notes for Noteholders' Interest
Basis Carryover;
NINTH: to the Noteholders holding Class B Notes of each Series for any
unpaid Noteholders' Interest Basis Carryover, on a pari passu basis
(based on the ratio of each such amount to the total of such amounts)
as between each Class and ratably as between Noteholders within each
such Class, without preference or priority of any kind, according to
the amounts due and payable on such Notes for Noteholders' Interest
Basis Carryover;
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TENTH: on a pro rata basis (based on the ratio of each such amount to
the total of such amounts) to an Interest Rate Exchange Agreement
Counterparty an amount equal to any amounts due and owing to an
Interest Rate Exchange Agreement Counterparty (other than amounts paid
in accordance with clause seventh above); and
ELEVENTH: to the Issuer, free and clear of the lien of this Indenture.
The Indenture Trustee may fix a record date and payment date for any
payment to Noteholders pursuant to this Section. At least 15 days before such
record date, the Issuer shall mail to each Noteholder and the Indenture Trustee
a notice that states the record date, the payment date and the amount to be
paid.
ARTICLE X
THE INDENTURE TRUSTEE
Section 10.1. Acceptance of the Trusts. The Indenture Trustee accepts
and agrees to execute the trusts granted to it by this Indenture, but only upon
the terms and conditions set forth herein. The Indenture Trustee undertakes to
perform such duties and only such duties as are specifically set forth in this
Base Indenture and no implied covenants or obligations shall be read into this
Base Indenture against the Indenture Trustee.
In case an Event of Default has occurred of which the Indenture Trustee
has, or is deemed to have, notice in accordance with this Indenture and has not
been cured, the Indenture Trustee agrees to act in accordance with the
instructions and orders of the Requisite Investors, but in any such event, only
upon and subject to the following expressed terms and conditions:
(a) The Indenture Trustee may execute any of the trusts or powers
hereof and perform any of its duties by or through attorneys, agents, receivers,
employees or co-trustees and shall not be answerable for the conduct of the same
if appointed in accordance with the standards set forth herein, and shall be
entitled to an Opinion of Counsel or advice of counsel concerning all matters of
trusts hereof and the duties hereunder, and may in all cases pay such reasonable
compensation to all such attorneys, agents, receivers, and employees as may
reasonably be employed in connection with the trusts hereof. The Indenture
Trustee may act upon an Opinion of Counsel or the opinion or advice of an
attorney or accountant rendered by it in the exercise of reasonable care. The
Indenture Trustee shall not be responsible for any loss or damage resulting from
any action or nonaction of such Person which is in good faith and in reliance
upon such opinion or advice. The Indenture Trustee shall not be responsible for
any action or inaction of the Servicer or any party hereto except as provided
herein or under applicable laws, rules and regulations.
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(b) The Indenture Trustee shall not be responsible for any recital
herein, or in any Note, or for the validity of the execution by the Issuer or
the other parties of this Indenture or the other Related Documents, or of any
Supplement or instruments of further assurance, or for the sufficiency of the
security for the Notes issued hereunder or intended to be secured hereby, or for
the value or title of the property herein conveyed or otherwise as to the
maintenance of the security hereof.
(c) The Indenture Trustee shall not be accountable for the use or
application by the Issuer of the Notes or the proceeds thereof or for the use or
application of any money paid over by the Indenture Trustee in accordance with
the provisions of this Indenture or for the use and application of other money
received by the Indenture Trustee.
(d) The Indenture Trustee shall be protected in acting upon any notice,
requisition, request, consent, certificate, order, opinion, affidavit, letter,
telegram or other paper or document reasonably believed to be genuine and
correct and to have been signed or sent by the proper Person or Persons. Any
action taken by the Indenture Trustee pursuant to this Indenture upon the
request or authority or consent of any Person who at the time of making such
request or giving such authority or consent is the owner of a Note shall be
conclusive and binding upon all future owners of the Notes and upon any Notes
issued in exchange therefor or in place thereof.
(e) Except as otherwise expressly provided in this Indenture, as to the
existence or nonexistence of any fact or as to the sufficiency or validity of
any instrument, paper or proceeding, the Indenture Trustee shall be entitled to
rely upon a certificate of an officer of any Noteholder as sufficient evidence
of facts therein contained, and prior to the occurrence of a default of which
the Indenture Trustee has been notified as provided in subsection (g) of this
Section 10.1, or of which by said subsection it is deemed to have notice, and
shall also be at liberty to accept a dealing, transaction or action as necessary
or expedient, but may at its discretion secure such further evidence deemed
necessary or advisable, but shall in no case be bound to secure the same.
(f) The permissive right of the Indenture Trustee to do things
enumerated in this Indenture shall not be construed as a duty and the Indenture
Trustee shall not be answerable for other than its negligence or willful
misconduct; provided, however, that the Indenture Trustee shall not be liable
for any error of judgment made in good faith, unless it shall be proved that
such Person was negligent in ascertaining the pertinent facts.
(g) The Indenture Trustee shall not be required to take notice or be
deemed to have notice of any default hereunder except failure by the Issuer to
cause to be made any of the payments to it for the account of the Noteholders
required to be made by Section 8.1, or defaults under Section 9.1, unless the
Indenture Trustee shall be specifically notified in writing of such default by
the Issuer or a Noteholder.
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(h) The Indenture Trustee shall not be required to give any bond or
surety in respect of the execution of the said trusts and powers or otherwise in
respect of the premises.
(i) No provision of this Base Indenture shall require the Indenture
Trustee to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in the exercise
of any of its rights or powers, if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against such risk
or liability is not reasonably assured to it.
(j) All moneys received by the Indenture Trustee shall, until used or
applied or invested as herein provided, be held in trust for the purposes for
which they were received in the respective account.
(k) Whether or not herein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Indenture Trustee shall be subject to the provisions
of this Section.
(l) NOTWITHSTANDING ANY OTHER PROVISION OF THIS INDENTURE OR THE OTHER
RELATED DOCUMENTS, NOTHING IN THIS INDENTURE OR THE OTHER RELATED DOCUMENTS
SHALL BE CONSTRUED TO LIMIT THE LEGAL RESPONSIBILITY OF THE INDENTURE TRUSTEE TO
THE SECRETARY OF EDUCATION OR A FEDERAL GUARANTOR FOR ANY VIOLATIONS OF
STATUTORY OR REGULATORY REQUIREMENTS THAT MAY OCCUR WITH RESPECT TO STUDENT
LOANS HELD BY THE INDENTURE TRUSTEE PURSUANT TO, OR TO OTHERWISE COMPLY WITH ITS
OBLIGATIONS UNDER, THE HIGHER EDUCATION ACT OR IMPLEMENTING REGULATIONS.
Section 10.2. [Reserved].
Section 10.3. Notice if Default Occurs. If a default occurs of which
the Indenture Trustee is by Section 10.1(g) required to take notice or if notice
of default be given as provided in said Section 10.1(g), then the Indenture
Trustee shall give written notice thereof by registered or certified mail to the
Issuer and the Noteholders.
Section 10.4. Intervention by Indenture Trustee. In any judicial
proceeding to which the Issuer is a party, the Indenture Trustee shall intervene
if directed to do so in writing by the Requisite Investors.
Section 10.5. Successors. Any corporation or association into which the
Indenture Trustee may be converted or merged, or with which it may be
consolidated, or to which it may sell or transfer its corporate trust business
and assets as a whole or substantially as a whole, or any corporation or
association resulting from any such conversion, sale, merger, consolidation or
transfer to which it is a party, ipso facto, shall be and become successor
Indenture Trustee hereunder and vested with all of the title to
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the whole property or trust estate and all the trusts, powers, discretions,
immunities, privileges and all other matters as was its predecessor, without the
execution or filing of any instrument or any further act, deed or conveyance on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding.
Section 10.6. Resignation. The Indenture Trustee may at any time resign
from the trusts hereby created by giving 90 days' written notice to the Issuer,
each Enhancement Provider, if any, and the Noteholders, and such resignation
shall take effect at the end of such 90 days, or upon the earlier appointment
and acceptance of a successor Indenture Trustee, as provided in Section 10.8
hereof, or removal as provided in Section 10.7 hereof. Notwithstanding the
foregoing, resignation of the Indenture Trustee shall not be effective until a
successor or temporary Indenture Trustee is appointed and has accepted such
appointment; provided, however, if an instrument of acceptance shall not have
been delivered within 120 days after giving such notice of resignation, the
resigning Indenture Trustee may petition a court of competent jurisdiction for
the appointment of a successor, and any attorneys' fees and expenses incurred in
connection with such petition shall be payable by the Issuer.
Section 10.7. Removal. The Indenture Trustee may be removed by each
Enhancement Provider, if specified in the applicable Series Supplement, or the
Requisite Investors at any time with the consent of each Enhancement Provider,
if specified in the applicable Series Supplement, by an instrument in writing
delivered to the Indenture Trustee. The Issuer shall remove the Indenture
Trustee if (i) the Indenture Trustee fails to comply with Section 10.13, (ii) an
Event of Bankruptcy occurs with respect to the Indenture Trustee, (iii) a
receiver or other public officer takes charge of the Indenture Trustee or its
property or (iv) the Indenture Trustee otherwise becomes incapable of acting.
Notwithstanding the foregoing, removal of the Indenture Trustee shall not be
effective until a successor is appointed and has accepted such appointment.
Section 10.8. Appointment of Successor. In case the Indenture Trustee
shall resign or be removed, or be dissolved, or shall be in course of
dissolution or liquidation, or otherwise become incapable of acting hereunder,
or in case it shall be taken under the control of any public officer or
officers, or of a receiver appointed by a court, a successor meeting the
eligibility requirements of Section 10.13 may be appointed by the Issuer by an
instrument in writing signed by the Issuer. The Issuer shall also inform the
Rating Agencies promptly of any such resignation or removal of the Indenture
Trustee. If no appointment of a successor Indenture Trustee shall have been made
pursuant to the foregoing provisions of this Section within 120 days after the
Indenture Trustee shall have given written notice as provided in Section 10.6
hereof, the Indenture Trustee, the Issuer or the Requisite Investors may apply
to a court of competent jurisdiction to appoint a successor Indenture Trustee.
Each such successor Indenture Trustee shall agree in writing to be bound by the
provisions of Section 13.16.
Section 10.9. Concerning Any Successor. Every successor Indenture
Trustee appointed hereunder shall execute, acknowledge and deliver to its
predecessor and also to the Issuer an instrument in writing accepting such
appointment hereunder, and
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thereupon such successor, without any further act, deed or conveyance, shall
become fully vested with all the estates, properties, rights, powers, trusts,
duties and obligations of its predecessor; but such predecessor shall,
nevertheless, upon receipt of a request from the Issuer execute and deliver an
instrument transferring to such successor all the estates, properties, rights,
powers and trusts of such predecessor hereunder; and every predecessor shall
deliver all securities and moneys held by it as Indenture Trustee hereunder to
its successor.
Section 10.10. Appointment of Co-Indenture Trustee or Separate
Indenture Trustee. (a) Notwithstanding any other provisions of this Base
Indenture or any Series Supplement, at any time, for the purpose of meeting any
legal requirements of any jurisdiction in which any part of the Collateral may
at the time be located, the Indenture Trustee shall have the power and may
execute and deliver all instruments to appoint one or more persons to act as a
co-trustee or co-trustees, or separate trustee or separate trustees, of all or
any part of the Collateral, and to vest in such Person or Persons, in such
capacity and for the benefit of the Secured Parties, such title to the
Collateral, or any part thereof, and, subject to the other provisions of this
Section 10.10, such powers, duties, obligations, rights and trusts as the
Indenture Trustee may consider necessary or desirable. No co-trustee or separate
trustee hereunder shall be required to meet the terms of eligibility as a
successor Indenture Trustee under Section 10.8 and no notice to Noteholders of
the appointment of any co-trustee or separate trustee shall be required under
Section 10.6. No co-trustee shall be appointed without the consent of the Issuer
unless such appointment is required as a matter of state law or to enable the
Indenture Trustee to perform its functions hereunder.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) The Notes of each Series shall be authenticated and delivered
solely by the Indenture Trustee or an authenticating agent appointed by the
Indenture Trustee;
(ii) All rights, powers, duties and obligations conferred or imposed
upon the Indenture Trustee shall be conferred or imposed upon and exercised or
performed by the Indenture Trustee and such separate trustee or co-trustee
jointly (it being understood that such separate trustee or co-trustee is not
authorized to act separately without the Indenture Trustee joining in such act),
except to the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed, the Indenture Trustee shall be
incompetent or unqualified to perform, such act or acts, in which event such
rights, powers, duties and obligations (including the holding of title to the
Assets or any portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely at the
direction of the Indenture Trustee;
(iii) No trustee hereunder shall be personally liable by reason of any
act or omission of any other trustee hereunder;
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(iv) The Indenture Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee; and
(v) The Indenture Trustee shall remain primarily liable for the actions
of any co-trustee.
(c) Any notice, request or other writing given to the Indenture Trustee
shall be deemed to have been given to each of the then separate trustees and co-
trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Indenture and
the conditions of this Article 10. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Indenture Trustee or separately, as may be provided therein, subject to all the
provisions of this Base Indenture and any Series Supplement, specifically
including every provision of this Base Indenture or any Series Supplement
relating to the conduct of, affecting the liability of, or affording protection
to, the Indenture Trustee. Every such instrument shall be filed with the
Indenture Trustee and a copy thereof given to the Issuer.
(d) Any separate trustee or co-trustee may at any time constitute the
Indenture Trustee, its agent or attorney-in-fact with full power and authority,
to the extent not prohibited by law, to do any lawful act under or in respect to
this Base Indenture or any Series Supplement on its behalf and in its name. If
any separate trustee or co-trustee shall die, become incapable of acting, resign
or be removed, all of its estates, properties, rights, remedies and trusts shall
vest in and be exercised by the Indenture Trustee, to the extent permitted by
law, without the appointment of a new or successor Indenture Trustee.
(e) In connection with the appointment of a co-trustee, the Indenture
Trustee may, at any time, at the Indenture Trustee's sole cost and expense,
without notice to the Noteholders, delegate its duties under this Base Indenture
and any Series Supplement to any Person who agrees to conduct such duties in
accordance with the terms hereof; provided, however, that no such delegation
shall relieve the Indenture Trustee of its obligations and responsibilities
hereunder with respect to any such delegated duties.
Section 10.11. Successor Indenture Trustee as Trustee of Funds. In the
event of a change of the Indenture Trustee the predecessor which has resigned or
been removed shall cease to be trustee of any funds then held by it hereunder
and the successor Indenture Trustee shall become such trustee.
Section 10.12. Indemnification. (a) The Indenture Trustee shall not be
under any obligation or duty to perform any act at the request of the
Noteholders or the Issuer or to institute or defend any suit in respect hereof
or to exercise any remedy hereunder unless properly indemnified to its
satisfaction subject to Section 10.1(i) hereof, except making payment of
principal and interest or accelerating the Notes as provided
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herein. The Indenture Trustee shall not be required to take notice, or be deemed
to have knowledge, of any default of the Issuer, except as provided in Section
10.1(g).
(b) The Issuer agrees to indemnify the Indenture Trustee for, and to
hold it harmless against, any loss, liability or expense, including reasonable
attorneys' fees and expenses, incurred without negligence or bad faith or
willful misconduct on its part, arising out of or in connection with the
acceptance or administration of the trust or trusts hereunder, including the
costs and expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder except as a result of negligence, bad faith or willful misconduct on
its part and except any liability to the DOE on account of the Indenture
Trustee's status as such.
Section 10.13. Eligibility Requirements for Indenture Trustee. The
Indenture Trustee and any successor Indenture Trustee shall at all times be (i)
an institution insured by the Federal Deposit Insurance Corporation, (ii) a
corporation or national bank or national banking association organized and doing
business under the laws of the United States of America or any state thereof,
authorized under such laws to exercise corporate trust powers, having a combined
capital and surplus of not less than $50,000,000 and subject to supervision or
examination by federal and state authority, (iii) an institution whose long-term
senior unsecured debt is rated at least "Ba2", in the case of Moody's, or
"BBB-", in the case of Fitch, Inc. (or in the case of each Rating Agency, such
lower rating as is confirmed by such Rating Agency in writing would not
adversely affect any of the ratings then assigned to the Notes), and (iv)
unaffiliated with the Issuer or AMS. If such corporation, national bank or
national banking association publishes reports of condition at least annually,
pursuant to law or to the requirements of the aforesaid supervising or examining
authority, then, for the purposes of this Section, the combined capital and
surplus of such corporation, national bank or national banking association shall
be deemed to be its combined capital and surplus as set forth in its most recent
report or condition so published. If at any time the Indenture Trustee shall
cease to be eligible in accordance with the provisions of this Section, the
Indenture Trustee shall resign immediately in the manner and with the effect
specified in Section 10.6. No person shall become a successor trustee hereunder
if the succession of such Person would result in the qualification, downgrading
and withdrawal of any of the ratings then assigned by the Ratings Agencies to
the Notes.
ARTICLE XI
DISCHARGE OF BASE INDENTURE
Section 11.1. Termination of the Issuer's Obligations. (a) This Base
Indenture shall cease to be of further effect (except that the Issuer's
obligations under Section 10.2 and Section 10.12 and the Indenture Trustee's and
Paying Agent's obligations under Section 11.3 shall survive) when all
outstanding Notes theretofore authenticated and issued have been delivered
(other than destroyed, lost or stolen Notes which have been replaced or paid) to
the Indenture Trustee for cancellation and the Issuer has paid all sums payable
hereunder.
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(b) In addition, except as may be provided to the contrary in any
Series Supplement, the Issuer may terminate all of its obligations under this
Base Indenture if:
(i) the Issuer irrevocably deposits in trust with the Indenture Trustee
or at the option of the Indenture Trustee, with a trustee reasonably
satisfactory to the Indenture Trustee and the Issuer under the terms of an
irrevocable trust agreement in form and substance satisfactory to the Indenture
Trustee, money or U.S. Government Obligations in an amount sufficient, in the
opinion of a nationally recognized firm of independent certified public
accountants expressed in a written certification thereof delivered to the
Indenture Trustee, to pay, when due, principal and interest on the Notes to
maturity or redemption, as the case may be, and to pay all other sums payable by
it hereunder; provided, however, that (1) the Indenture Trustee of the
irrevocable trust shall have been irrevocably instructed to pay such money or
the proceeds of such U.S. Government Obligations to the Indenture Trustee and
(2) the Indenture Trustee shall have been irrevocably instructed to apply such
money or the proceeds of such U.S. Government Obligations to the payment of said
principal and interest with respect to the Notes;
(ii) the Issuer delivers to the Indenture Trustee an Officer's
Certificate stating that all conditions precedent to satisfaction and discharge
of this Base Indenture have been complied with, and an Opinion of Counsel to the
same effect;
(iii) the Issuer delivers to the Indenture Trustee an Officer's
Certificate stating that no Potential Event of Default or Event of Default, in
either case, described in Section 9.1 shall have occurred and be continuing on
the date of such deposit; and
(iv) the Rating Agency Confirmation Condition is satisfied with respect
to each outstanding Series of Notes.
Then, this Base Indenture shall cease to be of further effect (except
as provided in this Section 11.1), and the Indenture Trustee, on written demand
of the Issuer, shall execute proper instruments acknowledging confirmation of
and discharge under this Base Indenture.
(c) After such irrevocable deposit made pursuant to Section 11.1(b) and
satisfaction of the other conditions set forth herein, the Indenture Trustee
promptly upon request shall acknowledge in writing the discharge of the Issuer's
obligations under this Base Indenture except for those surviving obligations
specified above.
In order to have money available on a payment date to pay principal or
interest on the Notes, the U.S. Government Obligations shall be payable as to
principal or interest at least one Business Day before such payment date in such
amounts as will provide the necessary money. U.S. Government Obligations shall
not be callable at the Issuer's option.
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Section 11.2. Application of Trust Money. The Indenture Trustee or a
trustee satisfactory to the Indenture Trustee and the Issuer shall hold in trust
money or U.S. Government Obligations deposited with it pursuant to Section 11.1.
The Indenture Trustee shall apply the deposited money and the money from U.S.
Government Obligations in accordance with this Base Indenture to the payment of
principal and interest on the Notes.
The provisions of this Section 11.2 shall survive the expiration or
earlier termination of this Base Indenture.
Section 11.3. Repayment to the Issuer. The Indenture Trustee and the
Paying Agent shall promptly pay to the Issuer upon written request any excess
money or, pursuant to Section 2.11 and Section 2.14, return any Notes held by
them at any time.
Subject to Section 2.7(c), the Indenture Trustee and the Paying Agent
shall pay to the Issuer upon written request any money held by them for the
payment of principal or interest that remains unclaimed for two years after the
date upon which such payment shall have become due.
The provisions of this Section 11.3 shall survive the expiration or
earlier termination of this Base Indenture.
ARTICLE XII
AMENDMENTS
Section 12.1. Without Consent of the Noteholders. Without the consent
of any Noteholder, the Issuer, the Indenture Trustee, and any applicable
Enhancement Provider, if any, at any time and from time to time, may enter into
one or more Supplements hereto, in form satisfactory to the Indenture Trustee,
for any of the following purposes, provided that the Rating Agency Confirmation
Condition with respect to each outstanding Series of Notes is met with respect
to such Supplement:
(a) to create a new Series of Notes (including, without limitation,
making such modifications to the Base Indenture and the other Related Documents
as may be required to issue a Segregated Series of Notes; provided, however,
that the creation of any Segregated Series of Notes shall not result in a
material adverse effect on the Noteholders of any Series unless the Required
Noteholders of such Series shall have given their prior written consent to the
creation thereof);
(b) to add to the covenants of the Issuer for the benefit of any
Secured Parties (and if such covenants are to be for the benefit of less than
all Series of Notes, stating that such covenants are expressly being included
solely for the benefit of such Series) or to surrender any right or power herein
conferred upon the Issuer;
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(c) to mortgage, pledge, convey, assign and transfer to the Indenture
Trustee any property or assets as security for the Notes and to specify the
terms and conditions upon which such property or assets are to be held and dealt
with by the Indenture Trustee and to set forth such other provisions in respect
thereof as may be required by the Indenture or as may, consistent with the
provisions of the Base Indenture, be deemed appropriate by the Issuer and the
Indenture Trustee, or to correct or amplify the description of any such property
or assets at any time so mortgaged, pledged, conveyed and transferred to the
Indenture Trustee (including amending or modifying the Alternative Loan Schedule
or Student Loan Schedule);
(d) to cure any mistake, ambiguity, defect, or inconsistency or to
correct or supplement any provision contained herein or in any Series
Supplement;
(e) to provide for uncertificated Notes in addition to certificated
Notes;
(f) to add to or change any of the provisions of the Base Indenture to
such extent as shall be necessary to permit or facilitate the issuance of Notes
in bearer form, registrable or not registrable as to principal, and with or
without interest coupons;
(g) to correct or supplement any provision herein which may be
inconsistent with any other provision herein or to make any other provisions
with respect to matters or questions arising under this Indenture;
(h) to evidence and provide for the acceptance of appointment hereunder
by a successor Indenture Trustee with respect to the Notes of one or more Series
and to add to or change any of the provisions of the Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Indenture Trustee;
(i) to add to the covenants and agreements contained herein or in any
Related Document for the benefit of the holders of the Notes; or
(j) to add such provisions with respect to matters or questions arising
hereunder or under any Related Document as may be necessary or desirable and not
inconsistent with the Related Documents;
provided, however, that, as evidenced by an Opinion of Counsel, such
action shall not adversely affect in any material respect the interests
of any Noteholders. Upon the request of the Issuer and upon receipt by
the Indenture Trustee of the documents described in Section 2.2 hereof,
the Indenture Trustee shall join with the Issuer in the execution of
any Series Supplement authorized or permitted by the terms of this Base
Indenture and shall make any further appropriate agreements and
stipulations which may be therein contained, but the Indenture Trustee
shall not be obligated to enter into such Series Supplement which
affects its own rights, duties or immunities under this Base Indenture
or otherwise.
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Section 12.2. With Consent of the Noteholders. Except as provided in
Sections 9.11 and Section 12.1, the provisions of this Base Indenture and any
Series Supplement (unless otherwise provided in such Series Supplement) and each
other Related Document to which the Issuer is a party may from time to time be
amended, modified or waived, if such amendment, modification or waiver is in
writing and consented to in writing by the Issuer, the Indenture Trustee, any
applicable Enhancement Provider (if such consent rights of an Enhancement
Provider are specified in the applicable Series Supplement) and the Required
Noteholders of each outstanding Series of Notes; provided that, if such
amendment, modification or waiver of or to this Base Indenture, the Series
Supplement with respect to a Series of Notes or any Related Document does not
adversely affect in any material respect the Noteholders of a particular Series
of Notes (as substantiated by an Opinion of Counsel to such effect), then the
consent of the Noteholders of such Series shall not be required to such
amendment, modification or waiver; and provided further, that the Rating Agency
Confirmation Condition is satisfied with respect to each affected Series of
Notes. Notwithstanding the foregoing:
(i) any modification of this Section 12.1, any change in any
requirement hereunder that any particular action be taken by Noteholders holding
the relevant percentage in principal amount of the Notes or any change in the
definition of the terms "Note Principal Amount", "Required Noteholders",
"Supermajority Investors" or "Requisite Investors" or the applicable amount of
Enhancement, if any, or any defined term used for the purpose of any such
definitions shall require the consent of each affected Noteholder; and
(ii) any amendment, waiver or other modification that would (a) extend
the due date for, or reduce the amount of any scheduled repayment or prepayment
of principal of or interest on any Note (or reduce the principal amount of or
rate of interest on any Note) shall require the consent of each affected
Noteholder; (b) approve the assignment or transfer by the Issuer of any of its
rights or obligations hereunder or under any other Related Document to which it
is a party except pursuant to the express terms hereof or thereof shall require
the consent of each affected Noteholder; (c) release any obligor under any
Related Document to which it is a party except pursuant to the express terms of
such Related Document shall require the consent of each affected Noteholder; (d)
affect adversely the interests, rights or obligations of any Noteholder
individually in comparison to any other Noteholder shall require the consent of
such Noteholder; or (e) amend or otherwise modify any Event of Default shall
require the consent of each affected Noteholder.
No failure or delay on the part of any Noteholder or the Indenture Trustee in
exercising any power or right under this Base Indenture or any other Related
Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power or right preclude any other or further exercise
thereof or the exercise of any other power or right.
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Section 12.3. Supplements. Each amendment or other modification to this
Base Indenture or the Notes shall be set forth in a Supplement. The initial
effectiveness of each Supplement shall be subject to the satisfaction of the
Rating Agency Confirmation Condition with respect to such Supplement. In
addition to the manner provided in Sections 12.1 and 12.2, each Series
Supplement may be amended as provided in such Series Supplement.
Section 12.4. Revocation and Effect of Consents. Until an amendment or
waiver becomes effective, a consent to it by a Noteholder of a Note is a
continuing consent by the Noteholder and every subsequent Noteholder of a Note
or portion of a Note that evidences the same debt as the consenting Noteholder's
Note, even if notation of the consent is not made on any Note. However, any such
Noteholder or subsequent Noteholder may revoke the consent as to his Note or
portion of a Note if the Indenture Trustee receives written notice of revocation
before the date the amendment or waiver becomes effective. An amendment or
waiver becomes effective in accordance with its terms and thereafter binds every
Noteholder. The Issuer may fix a record date for determining which Noteholders
must consent to such amendment or waiver.
Section 12.5. Notation on or Exchange of Notes. The Indenture Trustee
may place an appropriate notation about an amendment or waiver on any Note
thereafter authenticated. The Issuer in exchange for all Notes may issue and the
Indenture Trustee shall authenticate new Notes that reflect the amendment or
waiver. Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment or waiver.
Section 12.6. The Indenture Trustee to Sign Amendments, etc. The
Indenture Trustee shall sign any Supplement authorized pursuant to this Article
12 if the Supplement does not adversely affect the rights, duties, liabilities
or immunities of the Indenture Trustee. If it does have such an adverse effect,
the Indenture Trustee may, but need not, sign it. In signing such Supplement,
the Indenture Trustee shall be entitled to receive, if requested, an indemnity
reasonably satisfactory to it and to receive and, subject to Section 10.1, shall
be fully protected in relying upon, an Officer's Certificate and an Opinion of
Counsel as conclusive evidence that such Supplement is authorized or permitted
by this Base Indenture and that it will be valid and binding upon the Issuer in
accordance with its terms.
Section 12.7. Amendments of Certain Defined Terms. Notwithstanding any
other provision of this Article 12, the following defined terms (each of which
is defined in Schedule I to this Base Indenture) may be amended upon
satisfaction of the Rating Agency Confirmation Condition and without any further
action or consent of any kind: "Additional Financed Student Loans"; Alternative
Loan"; Alternative Loan Guarantors"; "Borrower"; "Defaulted Alternative Loan";
"Defaulted Student Loan"; "Deferment Status"; "Eligible Alternative Loan";
"Eligible Student Loan"; "Forbearance Status"; "Initial Financed Student Loans";
"Realized Losses"; and "Student Loan."
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ARTICLE XIII
MISCELLANEOUS
Section 13.1. Notices. (a) Any notice or communication by the Issuer,
the Indenture Trustee or the Eligible Lender Trustee to the other shall be in
writing and delivered in person or mailed by first-class mail (registered or
certified, return receipt requested), telecopier or overnight air courier
guaranteeing next day delivery, to the other's address:
If to the Issuer:
One AMS Place
463 Swansea Mall Drive
Swansea, MA 02777
Attn: Mr. Lloyd C. Alcorn
Phone: (508) 235-2824
Fax: (508) 235-2944
If to the Indenture Trustee or Eligible Lender Trustee:
Bank One, National Association
1 Bank One Plaza
Suite IL1-0126
Chicago, IL 60670
Attn: Corporate Trust Services Division
Phone: (212) 373-1105
Fax: (212) 373-1382
The Issuer or the Indenture Trustee or the Eligible Lender Trustee by
notice to the other may designate additional or different addresses for
subsequent notices or communications; provided, however, the Issuer may not at
any time designate more than a total of three (3) addresses to which notices
must be sent in order to be effective.
Any notice (i) given in person shall be deemed delivered on the date of
delivery of such notice, (ii) given by first class mail shall be deemed given
five (5) days after the date that such notice is mailed, (iii) delivered by
telex or telecopier shall be deemed given on the date of delivery of such
notice, and (iv) delivered by overnight air courier shall be deemed delivered
one Business Day after the date that such notice is delivered to such overnight
courier.
Notwithstanding any provisions of this Base Indenture to the contrary,
the Indenture Trustee shall have no liability based upon or arising from the
failure to receive any notice required by or relating to this Base Indenture or
the Notes.
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If the Issuer mails a notice or communication to Noteholders, it shall
mail a copy to the Indenture Trustee at the same time.
(b) Where the Base Indenture provides for notice to Noteholders of any
event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if sent in writing and mailed, first-class postage prepaid,
to each Noteholder affected by such event, at its address as it appears in the
Note Register, not later than the latest date, and not earlier than the earliest
date, prescribed (if any) for the giving of such notice. In any case where
notice to Noteholder is given by mail, neither the failure to mail such notice,
nor any defect in any notice so mailed, to any particular Noteholder shall
affect the sufficiency of such notice with respect to other Noteholders, and any
notice which is mailed in the manner herein provided shall be conclusively
presumed to have been duly given. Where this Base Indenture provides for notice
in any manner, such notice may be waived in writing by any Person entitled to
receive such notice, either before or after the event, and such waiver shall be
the equivalent of such notice. Waivers of notice by Noteholders shall be filed
with the Indenture Trustee, but such filing shall not be a condition precedent
to the validity of any action taken in reliance upon such waiver.
In the case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made that is satisfactory to the Indenture
Trustee shall constitute a sufficient notification for every purpose hereunder.
Section 13.2. Communication by Noteholders With Other Noteholders.
Noteholders may communicate with other Noteholders with respect to their rights
under this Base Indenture or the Notes.
Section 13.3. Certificate and Opinion as to Conditions Precedent. Upon
any request or application by the Issuer to the Indenture Trustee to take any
action under this Base Indenture, the Issuer shall furnish to the Indenture
Trustee an Officer's Certificate in form and substance reasonably satisfactory
to the Indenture Trustee (which shall include the statements set forth in
Section 13.4) stating that, in the opinion of the signers, all conditions
precedent and covenants, if any, provided for in this Base Indenture relating to
the proposed action have been complied with.
Section 13.4. Statements Required in Certificate. Each certificate with
respect to compliance with a condition or covenant provided for in this Base
Indenture shall include:
(a) a statement that the Person giving such certificate has read such
covenant or condition;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements contained in such certificate are based;
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(c) a statement that, in the opinion of such Person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(d) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been complied with.
Section 13.5. Rules by the Indenture Trustee. The Indenture Trustee may
make reasonable rules for action by or at a meeting of Noteholders.
Section 13.6. No Recourse Against Others. A director, Authorized
Officer, employee or stockholder of the Issuer, as such, shall not have any
liability for any obligations of the Issuer under the Notes or this Base
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. Each Noteholder by accepting a Note waives and
releases all such liability.
Section 13.7. Duplicate Originals. The parties may sign any number of
copies of this Base Indenture. One signed copy is enough to prove this Base
Indenture.
Section 13.8. Benefits of Base Indenture. Except as set forth in a
Series Supplement, nothing in this Base Indenture or in the Notes, expressed or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder and the Holders, any benefit or any legal or equitable
right, remedy or claim under the Base Indenture.
Section 13.9. [Reserved].
Section 13.10. Governing Law; Waiver of Jury Trial. THIS AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK WITHOUT REGARD TO ITS CONFLICTS OF LAWS PRINCIPLES. EACH PARTY HERETO
HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT
COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE COURT
SITTING IN NEW YORK CITY FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY
HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION
WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH
PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING
BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH PARTY
HERETO HEREBY CONSENTS TO PROCESS BEING SERVED IN ANY SUIT, ACTION OR PROCEEDING
WITH RESPECT TO THIS AGREEMENT, OR ANY DOCUMENT DELIVERED PURSUANT HERETO BY THE
MAILING OF A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID,
RETURN RECEIPT REQUESTED, TO ITS RESPECTIVE ADDRESS SPECIFIED AT
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THE TIME FOR NOTICES UNDER THIS AGREEMENT OR TO ANY OTHER ADDRESS OF WHICH IT
SHALL HAVE GIVEN WRITTEN OR ELECTRONIC NOTICE TO THE OTHER PARTIES. THE
FOREGOING SHALL NOT LIMIT THE ABILITY OF ANY PARTY HERETO TO BRING SUIT IN THE
COURTS OF ANY JURISDICTION.
THE ISSUER HEREBY EXPRESSLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY
ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS INDENTURE, ANY
OTHER RELATED DOCUMENT OR UNDER ANY AMENDMENT, INSTRUMENT OR DOCUMENT DELIVERED
OR WHICH MAY BE IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR ARISING
FROM ANY BANKING OR OTHER RELATIONSHIP EXISTING IN CONNECTION WITH THIS
INDENTURE OR ANY OTHER RELATED DOCUMENT AND AGREES THAT ANY SUCH ACTION OR
PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT A JURY TRIAL.
Section 13.11. Successors. All agreements of the Issuer in this Base
Indenture and the Notes shall bind its successor; provided, however, the Issuer
may not assign its obligations or rights under this Base Indenture or any
Related Document. All agreements of the Indenture Trustee and the Eligible
Lender Trustee in this Base Indenture shall bind its successor.
Section 13.12. Severability. In case one or more of the provisions
contained in this Indenture shall be or shall be deemed to be invalid, illegal
or unenforceable in any respect, the validity, legality and enforceability of
the remaining provisions contained herein shall not in any way be affected or
impaired thereby. If any provision of this Indenture shall be or shall be deemed
to be illegal, invalid or unenforceable under the applicable laws and
regulations of one jurisdiction, such provision shall not thereby be rendered
illegal, invalid or unenforceable in any other jurisdiction.
Section 13.13. Counterpart Originals. The parties may sign any number
of copies of this Base Indenture. Each signed copy shall be an original, but all
of them together represent the same agreement.
Section 13.14. Table of Contents, Headings, etc. The Table of Contents,
Cross-Reference Table, and headings of the Articles and Sections of this Base
Indenture have been inserted for convenience of reference only, are not to be
considered a part hereof, and shall in no way modify or restrict any of the
terms or provisions hereof.
Section 13.15. Termination; Collateral. This Base Indenture, and any
grants, pledges and assignments hereunder, shall become effective concurrently
with the issuance of the first Series of Notes and shall terminate when all the
Issuer Obligations shall have been fully paid and satisfied, at which time the
Indenture Trustee, at the written request of the Issuer and upon receipt of an
Officer's Certificate from the Issuer
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to the effect that such condition has been complied with, shall reassign
(without recourse upon, or any warranty whatsoever by, the Indenture Trustee)
and deliver all Collateral and documents then in the custody or possession of
the Indenture Trustee promptly to the Issuer.
The Issuer and the Secured Parties hereby agree that, if any funds
remain on deposit in the Collection Account after the termination of this Base
Indenture, such amounts shall be released by the Indenture Trustee and paid to
the Issuer.
Section 13.16. No Bankruptcy Petition Against the Issuer. Each of the
Secured Parties and the Indenture Trustee hereby covenants and agrees that,
prior to the date which is one year and one day after the payment in full of the
latest maturing Note, it will not institute against, or join with any other
Person in instituting against, the Issuer any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings, under
any Federal or state bankruptcy or similar law; provided, however, that nothing
in this Section 13.16 shall constitute a waiver of any right to indemnification,
reimbursement or other payment from the Issuer pursuant to this Base Indenture.
In the event that any such Secured Party or the Indenture Trustee takes action
in violation of this Section 13.16, the Issuer shall file an answer with the
bankruptcy court or otherwise properly contesting the filing of such a petition
by any such Secured Party or the Indenture Trustee against the Issuer or the
commencement of such action and raising the defense that such Secured Party or
the Indenture Trustee has agreed in writing not to take such action and should
be estopped and precluded therefrom and such other defenses, if any, as its
counsel advises that it may assert. The provisions of this Section 13.16 shall
survive the termination of this Base Indenture, and the resignation or removal
of the Indenture Trustee. Nothing contained herein shall preclude participation
by any Secured Party or the Indenture Trustee in the assertion or defense of its
claims in any such proceeding involving the Issuer.
Section 13.17. No Recourse; Limitation of Obligations. No recourse
under or with respect to any obligation, covenant or agreement of the Issuer as
contained in this Base Indenture or any of the other Related Documents or any
other agreement, instrument or document to which the Issuer is a party shall be
had against any incorporator, stockholder, Affiliate, officer, employee or
director of the Issuer by the enforcement of any assessment or by any legal or
equitable proceeding, by virtue of any statute or otherwise; it being expressly
agreed and understood that the agreements of the Issuer contained in this Base
Indenture and all other agreements, instruments and documents entered into
pursuant hereto or in connection herewith are, in each case, solely limited
partnership obligations of the Issuer.
(a) Notwithstanding any provisions contained in this Base Indenture to
the contrary, the Issuer shall not, and shall not be obligated to, pay any fees,
costs, indemnified amounts or expenses due pursuant to this Base Indenture other
than in accordance with the order of priorities set out in the related Series
Supplement. Any amount which the Issuer does not pay pursuant to the operation
of the preceding sentence shall not constitute a claim (as defined in Sections
101 of the United States Bankruptcy Reform
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Act of 1978 (11 U.S.C. Sections 101, et seq.), as amended from time to time)
against or limited liability company obligation of the Issuer for any such
insufficiency unless and until funds are available for the payment of such
amounts as aforesaid.
(b) The provisions of this Section 13.17 survive the termination of
this Agreement.
Section 13.18. Waiver of Set-Off. Each of the parties hereto waives any
right to, and agrees not to, set-off or appropriate and apply, any and all
deposits and any other indebtedness at any time held or owing thereby to or for
the credit or the account of the Issuer, against or on account of any obligation
or liability of the Issuer to such party hereto; provided that such waiver and
agreement shall only be effective until one year and one day after the latest
maturing Note is paid in full.
Section 13.19. Compliance Certificates and Opinions. Every certificate
or opinion with respect to compliance with a condition or covenant provided for
in this Indenture shall include:
(i) a statement that each signatory of such certificate or opinion has
read or has caused to be read such covenant or condition and the definitions
herein relating thereto;
(ii) a statement that, in the opinion of each such signatory, such
signatory has made such examination or investigation as is necessary to enable
such signatory to express an informed opinion as to whether such covenant or
condition has been complied with; and
(iii) a statement as to whether, in the opinion of each such signatory
such condition or covenant has been complied with.
Section 13.20. Higher Education Act. The parties acknowledge, intend,
and agree that (a) all provisions in this Agreement that require compliance with
the Higher Education Act are enforceable standards of conduct for the parties,
and terms and/or conditions hereof; (b) all provisions of the Higher Education
Act, as amended from time to time, relevant to such provisions in this Base
Indenture are incorporated by reference into this Base Indenture with the same
force and effect as if fully stated herein; (c) any assertion in litigation by a
party hereto of a claim or defense based on a violation of any such provision of
this Base Indenture constitutes a claim or defense based on the agreed upon
terms and conditions of this Base Indenture, and does not constitute a private
claim or defense under the Higher Education Act or an attempt to enforce or
implement the Higher Education Act through a state law claim or defense; and (d)
in any such action, the party opposing such claim or defense shall not assert or
contend that such claim or defense is either a prohibited private claim or
defense under the Higher Education Act or preempted by the Higher Education Act
due to the fact that the provision at issue requires compliance with the Higher
Education Act.
74
Section 13.21. Confidentiality. Notwithstanding any other provision of
this Base Indenture or the other Related Documents, the parties to the
transactions described herein (and their employees, representatives or other
agents) may disclose to any and all persons, without limitation of any kind, the
tax treatment and tax structure of the transactions described herein and all
materials of any kind (including opinions or other tax analyses) that are
provided to the recipient relating to such tax treatment and tax structure.
75
IN WITNESS WHEREOF, the Indenture Trustee, the Eligible Lender Trustee
and the Issuer have caused this Base Indenture to be duly executed by their
respective duly authorized officers as of the day and year first written above.
AMS-3 2003, LP,
as the Issuer
By: AMS-3, SPC-1, Inc.,
as General Partner
By:
-------------------------------------
Name: Lloyd Alcorn
Title:
BANK ONE, NATIONAL ASSOCIATION,
as Indenture Trustee and
Eligible Lender Trustee
By:
-------------------------------------
Name:
Title:
76
SCHEDULE I
TO THE
BASE INDENTURE
DEFINITIONS LIST
"0% Interest Benefit Program" means a borrower benefit incentive
program offered by AMS, in which, at repayment, a borrower who graduates and
complies with the terms of the program may be credited for the amount of accrued
interest during the first twelve months after disbursement on the first
Unsubsidized Loan the borrower receives from AMS.
"Acceptance Rate" means, with respect to the 0% Interest Benefit
Program, a fraction, expressed as a percentage, the numerator of which equals
the principal balance of student loans the obligors for which have qualified to
participate in such program and the denominator of which equals the principal
balance of all student loans eligible to qualify for such program.
"Acquisition Period" is defined, with respect to any Series of Notes,
in the applicable Series Supplement.
"Additional Financed Student Loans" means certain Student Loans and
Alternative Loans purchased by the Issuer from the Seller or contributed to the
Issuer by the Seller during any Acquisition Period or Funding Period pursuant to
any Purchase and Contribution Agreement; provided, however, that the definition
of "Additional Financed Student Loans" may be changed by the Issuer at any time
upon satisfaction of the Rating Agency Confirmation Condition.
"Administrative Subaccount" means an internal administrative account
established by the Indenture Trustee for record keeping purposes to facilitate
the proper allocation of Collections within the Collection Account.
"Affiliate" means, with respect to any specified Person, another Person
that directly, or indirectly through one or more intermediaries, controls or is
controlled by or is under common control with the Person specified. For purposes
of this definition, "control" means the power to direct the management and
policies of a Person, directly or indirectly, whether through ownership of
voting securities, by contract or otherwise; and "controlled" and "controlling"
have meanings correlative to the foregoing.
"Agent" means any Registrar or Paying Agent.
"Alternative Loan" means the Non-Guaranteed Alternative Loans and the
Guaranteed Alternative Loans; provided, however, that the definition of
"Alternative Loan" may be changed by the Issuer at any time upon satisfaction of
the Rating Agency Confirmation Condition.
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"Alternative Loan Guarantors" means any guaranty agency under the
TuitionGard Program or any other applicable Alternative Loan program providing
guarantees with respect to the Guaranteed Alternative Loans comprising part of
the Financed Student Loans acquired by the Issuer from the Seller pursuant to
any Purchase and Contribution Agreement; provided, however, that the definition
of "Alternative Loan Guarantors" may be changed by the Issuer at any time upon
satisfaction of the Rating Agency Confirmation.
"Alternative Loan Guaranty Agreement" means any of, and "Alternative
Loan Guaranty Agreements" means all of, the agreements pursuant to which the
Alternative Loan Guarantors guarantee the Alternative Loans comprising part of
the Financed Student Loans, in each case as the same may be amended,
supplemented or otherwise modified from time to time.
"Alternative Loan Guaranty Payment" means any payment by an Alternative
Loan Guarantor pursuant to an Alternative Loan Guaranty Agreement in respect of
a Guaranteed Alternative Loan which is a Financed Student Loan.
"Alternative Loan Notes" means the promissory notes or other writings
evidencing the Alternative Loans.
"Alternative Loan Schedule" means the schedule attached as Appendix A
to this Base Indenture (which schedule may be in the form of microfiche or
computer file or other medium acceptable to the Indenture Trustee), as from time
to time amended, supplemented, or modified by the Issuer (whether pursuant to a
Series Supplement or otherwise) constituting a listing of Alternative Loans
which are (i) legally or beneficially owned by the Issuer and (ii) delivered to
and held by the Indenture Trustee.
"AMS" means Academic Management Services Corp.
"AMS Non-Guaranteed Alternative Loan Program" means the Alternative
Loan program with the same name administered by AMS.
"Annual Noteholders' Tax Statement" is defined in Section 4.3 of the
Base Indenture.
"Assets" means any interest of any kind in any assets or property of
any kind, tangible or intangible, real, personal or mixed, now owned or
hereafter acquired by the Issuer.
"Auction Date" is defined, with respect to any Series of Notes, in the
applicable Series Supplement.
"Authorized Officer" means, (i) with respect to the Issuer, any officer
or agent of the General Partner, acting on behalf of the General Partner for and
on behalf of the Issuer and (ii) with respect to the Seller and the Servicer,
any officer of the Seller or
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Servicer, respectively, who is authorized to act for and on behalf of the Seller
or the Servicer.
"Bankruptcy Code" means The Bankruptcy Reform Act of 1978, as amended
from time to time, and as codified as 11 U.S.C. Section 101 et seq.
"Base Indenture" means the Base Indenture, dated as of May 8, 2003,
between the Issuer, the Indenture Trustee and the Eligible Lender Trustee, as
amended, restated, modified or supplemented from time to time, exclusive of
Series Supplements.
"Book-Entry Notes" means beneficial interests in the Notes, ownership
and transfers of which shall be evidenced or made through book entries by a
Clearing Agency as described in Section 2.16 of the Base Indenture.
"Borrower" means an individual who is either (i) the maker of a Student
Loan Note who obtains a Student Loan from an "eligible lender" in accordance
with the Higher Education Act and the policies and procedures of the applicable
Student Loan Guarantor, or (ii) the maker of an Alternative Loan Note who
obtains an Alternative Loan from an "eligible lender" in accordance with the
TuitionGard Program or the AMS Non-Guaranteed Alternative Loan Program;
provided, however, that the definition of "Borrower" may be changed by the
Issuer at any time upon satisfaction of the Rating Agency Confirmation
Condition.
"Business Day" means (i) a day other than a Saturday, Sunday or (ii) a
day on which the New York Stock Exchange, the Indenture Trustee or other day
banks located in Chicago, Illinois, New York, New York or the Commonwealth of
Massachusetts are authorized or obligated by law or executive order to be closed
for business.
"Capitalized Interest Account" is defined in Section 5.7 of the Base
Indenture.
"Capitalized Interest Requirement" means with respect to each Fee
Remittance Date occurring up through and including May 14, 2007 (or such other
date chosen by the parties hereto, subject to the Rating Agency Confirmation
Condition), the excess, if any, of (x) the noteholders' interest distribution
amount for all Shared Collateral Series over (y) available funds prior to the
application of amounts from the Reserve Account.
"Clearing Agency" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act or any successor provision
thereto.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
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"Closing Date" means the Initial Closing Date or any Series Closing
Date.
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time, and any successor statute of similar
import, in each case as in effect from time to time. References to sections of
the Code also refer to any successor sections.
"Collateral" is defined in Section 3.1 of the Base Indenture.
"Collection Account" is defined in Section 5.2 of the Base Indenture.
"Collection Period" means, initially the period beginning on the
Initial Cutoff Date and ending May 31, 2003, and thereafter with respect to any
Fee Remittance Date or Auction Date, the preceding calendar month.
"Collections" means (i) all funds which are received by the Issuer, the
Servicer or the Indenture Trustee from or on behalf of the related Obligors in
payment of any amounts owed (including, without limitation, all Interest Subsidy
Payments, Special Allowance Payments, payments under Student Loan Guaranty
Agreements, finance charges, interest and all other charges in respect of the
Financed Student Loans, and all proceeds (net of expenses) of the liquidation of
defaulted Financed Student Loans ("Liquidated Financed Student Loans")) or
applied to such amounts owed by such Obligors, net of all amounts required by
the Higher Education Act to be paid to the DOE, with respect to the Financed
Student Loans for the related Collection Period, (ii) all funds received
pursuant to the Servicing Agreement, including all payments representing the
Purchase Amount in respect of any purchased Financed Student Loan, (iii) all
funds, including any Purchase Amounts for Financed Student Loans repurchased by
AMS as Seller, received by the Issuer, the Indenture Trustee or the Servicer
pursuant to any Purchase and Contribution Agreement or from any other source in
respect of the Financed Student Loans, (iv) all net amounts received by the
Issuer from a Interest Rate Exchange Agreement Counterparty under any Interest
Rate Exchange Agreement with respect to the related Collection Period, (v) any
other monies deposited into the Collection Account and all amounts earned on
Eligible Investments of funds in the Collection Account (including any
subaccount thereof), the Capitalized Interest Account, the Reserve Account and
the Trust Accounts. To the extent so specified in a Series Supplement,
Collections shall also include all proceeds from the sale of the Notes issued
under such Series Supplement.
"Control" means (a) with respect to a Security Entitlement, the
Indenture Trustee (i) is identified in the records of the Securities
Intermediary for such Security Entitlement as the person having such Security
Entitlement against such Security Intermediary or (ii) has obtained the
agreement, in writing, of the Securities Intermediary for such Security
Entitlement that it will comply with orders of the Indenture Trustee regarding
the transfer or redemption of such Security Entitlement without further consent
of any other person; or (b) with respect to a United States Security
Entitlement, (i) the Indenture Trustee is a participant in the book entry system
maintained by the Federal
I-4
Reserve Bank that is acting as a fiscal agent for the Issuer of such United
States Security Entitlement and such Federal Reserve Bank has indicated by book
entry that such United States Securities Entitlement has been credited to the
Indenture Trustee's securities account in such book entry system or (ii) (A) the
Indenture Trustee (x) is identified in the records of the Securities
Intermediary for such United States Security Entitlement as the person having
such Security Entitlement against such Securities Intermediary or (y) has
obtained the agreement, in writing, of the Securities Intermediary for such
Security Entitlement that it will comply with orders of the Indenture Trustee
regarding the transfer or redemption of such Security Entitlement without
further consent of any other person, (B) the Securities Intermediary for such
United States Securities Entitlement is a participant in the book entry system
maintained by the Federal Reserve Bank that is acting as fiscal agent for the
Issuer of such United States Securities Entitlement and (C) such Federal Reserve
Bank has indicated by book entry that such United States Securities Entitlement
has been credited to such Securities Intermediary's securities account in such
book entry system.
"Corporate Trust Office" means the principal office of the Indenture
Trustee at which at any particular time its corporate trust business shall be
administered which office at the date of the execution of the Base Indenture is
located at 1 Bank One Plaza, Suite IL1-0126, Chicago, Illinois 60670, Attention:
Corporate Trust Services Division, or at any other time at such other address as
the Indenture Trustee may designate from time to time by notice to the
Noteholders and the Issuer.
"CP Basis" means, with respect to any interest rate, that such interest
rate is based on a commercial paper rate.
"Cutoff Date" means, except for the applicable Initial Cutoff Date
which applies to the applicable Initial Financed Student Loans, the Business Day
immediately preceding the date of purchase by, or contribution to, the Issuer
with respect to the applicable Additional Financed Student Loans.
"Defaulted Alternative Loan" means any Alternative Loan (i) as to which
any payment, or portion thereof, is more than 180 days past due from the
original due date therefor, unless such Alternative Loan is in a Deferment
Status or Forbearance Status, (ii) the borrower of which is the subject of an
Event of Bankruptcy or is deceased or disabled or (iii) as to which a continuing
condition exists that with notice or the lapse of time or both would constitute
a default, breach, violation or event permitting acceleration, or would
otherwise result in a claim, under the terms of such Alternative Loan (other
than payment defaults continuing for a period of not more than 180 days);
provided, however, that the definition of "Defaulted Alternative Loan" may be
changed by the Issuer at any time upon satisfaction of the Rating Agency
Confirmation Condition.
"Defaulted Financed Student Loan" means any Financed Student Loan that
is either a Defaulted Alternative Loan or a Defaulted Student Loan.
I-5
"Defaulted Student Loan" means any Student Loan (i) as to which any
payment, or portion thereof, is more than 270 days past due from the original
due date therefor, unless such Student Loan is in a Deferment Status or
Forbearance Status, (ii) the borrower of which is the subject of an Event of
Bankruptcy or is deceased or disabled or (iii) as to which a continuing
condition that with notice or the lapse of time or both would constitute a
default, breach, violation or event permitting acceleration, or would otherwise
result in a claim, under the terms of such Student Loan (other than payment
defaults continuing for a period of not more than 270 days); provided, however,
that the definition of "Defaulted Student Loan" may be changed by the Issuer at
any time upon satisfaction of the Rating Agency Confirmation Condition.
"Deferment Status" means a status with respect to (i) any Student Loan
permitted by the Higher Education Act and the policies of the applicable Student
Loan Guarantor during which the related Borrower may postpone or reduce the
amount of the Borrower's scheduled payment of principal and interest, or (ii)
any Alternative Loan permitted by the TuitionGard Program or the AMS
Non-Guaranteed Alternative Loan Program and the policies of the applicable
Alternative Loan Guarantor during which the related Borrower may postpone or
reduce the amount of the obligor's scheduled payment of principal and interest;
provided, however, that the definition of "Deferment Status" may be changed by
the Issuer at any time upon satisfaction of the Rating Agency Confirmation
Condition.
"Definitions List" means this Definitions List, as amended, restated,
supplemented or modified from time to time in accordance with the terms of the
Base Indenture.
"Definitive Notes" is defined in Section 2.16(f) of the Base Indenture.
"Delivery" means (a) with respect to any Physical Property (that is not
either a United States Security Entitlement or a Security Entitlement), physical
delivery thereof to the Indenture Trustee or its nominee or custodian by an
effective endorsement, or registered in the name of, the Indenture Trustee or
its nominee or custodian endorsed in blank and (b) with respect to any
Uncertificated Security, the issuer thereof registers the Indenture Trustee as
the registered owner thereof or the Indenture Trustee otherwise satisfies the
requirements of Revised Article 8.
"Determination Date" means the date five Business Days prior to each
Fee Remittance Date.
"Distribution Account" means, with respect to any Series of Notes, an
account established as such pursuant to the applicable Series Supplement.
"DOE" means the U.S. Department of Education, and any successor
thereto.
I-6
"Dollar" and the symbol "$" mean the lawful currency of the United
States.
"DTC" means The Depository Trust Company.
"Eligible Alternative Loan" means an Alternative Loan:
1. which was originated in the United States of America, its
territories, its possessions or other areas subject to its jurisdiction to an
Eligible Borrower under applicable law and agreements and was fully and properly
executed by the parties thereto;
2. which was originated or acquired by AMS and acquired by the Issuer
in the ordinary course of its business;
3. which provides for payments on a periodic basis that fully amortize
the Principal Balance of such Alternative Loan by its maturity, as such maturity
may be modified in accordance with any applicable deferral or forbearance
periods granted in accordance with applicable laws and restrictions or any
related Alternative Loan Guaranty Agreement, and yields interest at the rates
applicable thereto;
4. which complied at the time of origination and complies, at the time
of its inclusion in the Collateral, in all material respects with all applicable
requirements of local, state, and federal laws, rules and regulations which
govern the making and servicing of such Alternative Loan including the
requirements of the applicable Alternative Loan Guaranty Agreement;
5. with respect to which all signatures are genuine and the Alternative
Loan Note evidencing such Alternative Loan has been duly executed and delivered
and constitutes the legal, valid and binding obligation of the related Borrower
enforceable in accordance with its terms;
6. with respect to which no right of rescission, setoff, counterclaim,
or defense has been asserted or threatened or exists with respect to such
Alternative Loan;
7. with respect to which no default, breach, violation or event
permitting acceleration under the terms of such Alternative Loan has occurred,
and except for payment defaults continuing for a period of not more than 120
days, no continuing condition that with notice or the lapse of time or both that
would constitute a default, breach, violation or event permitting acceleration
under terms of such Alternative Loan has arisen; and with respect to such
Alternative Loan, none of the forgoing events has occurred and been waived by
any Person;
8. with respect to which, to the best of the Issuer's knowledge, an
Event of Bankruptcy has not occurred with respect to the related Borrower;
I-7
9. that has not been originated in, and is not subject to the laws of,
any jurisdiction under which the origination, sale, transfer and assignment of
such Alternative Loan, or beneficial ownership therein, is unlawful, void or
voidable;
10. with respect to which there is only one original executed copy of
the Alternative Loan Note;
11. with regard to which the warranty of the Issuer in Section 7.1(g)
of the Base Indenture is true and correct;
12. the sale or assignment of which to the Issuer pursuant to the
Purchase and Contribution Agreement and the granting of a security interest to
the Indenture Trustee pursuant to the Base Indenture does not contravene or
conflict with any law or regulation, or require the consent or approval of, or
notice to, any Person;
13. that is the subject of a valid Subservicing Agreement and as to
which a Sub-servicer Event of Default has not occurred; and
14. which, were it to become a Financed Student Loan, would not result
in the Alternative Loans comprising more than 25% of the aggregate principal
amount of the Financed Student Loans; provided, however, that the definition of
"Eligible Alternative Loan" may be changed by the Issuer at any time upon
satisfaction of the Rating Agency Confirmation Condition.
"Eligible Borrower" means, (i) with respect to any Student Loan, an
individual who is eligible under the Higher Education Act to be the obligor of a
Student Loan for financing a program of education at an Eligible Institution or
for consolidating two or more such Student Loans, including an individual who is
eligible under the Higher Education Act to be an obligor of a loan made pursuant
to Section 428A, 428B, 428C or 428H of the Higher Education Act (20 U.S.C.
Sections 1078-1, 1078-2, 1078-3, or 1078-8) and (ii) with respect to
any Alternative Loan, an individual who is eligible under the TuitionGard
Program or the AMS Non-Guaranteed Alternative Loan Program to be the obligor of
an Alternative Loan for financing a program of education at an Eligible
Institution; provided, however, that the definition of "Eligible Borrower" may
be changed by the Issuer at any time upon satisfaction of the Rating Agency
Confirmation Condition.
"Eligible Deposit Account" means either (i) a segregated account with a
Qualified Institution or (ii) a segregated trust account with a Qualified
Institution.
"Eligible Financed Student Loan" means a Financed Student Loan that is
either an Eligible Student Loan or an Eligible Alternative Loan as of the date
it became a Financed Student Loan.
"Eligible Institution" means an institution that is (i) an institution
of higher education, (ii) a vocational school or (iii) any other institution
that, in all of the above cases, is an "eligible institution" as defined in the
Higher Education Act.
I-8
"Eligible Investments " means any one or more of the following
obligations or securities:
(i) direct obligations of or obligations insured or guaranteed
by the United States of America;
(ii) obligations issued or guaranteed by any instrumentality
or agency of the United States of America, whether now existing or
hereafter organized, which bear the full faith and credit of the United
States of America;
(iii) certificates of deposit of not more than $100,000 issued
by a financial institution with its principal place of business in the
United States of America, but only if such certificates of deposit are
fully insured as to principal by the Federal Deposit Insurance
Corporation;
(iv) shares in mutual funds investing solely in short term
debt securities of the United States government including money market
mutual funds managed by the Indenture Trustee or one of its affiliates
where the mutual fund custodian has taken delivery of the
collateralizing securities, provided that (a) such fund shall have the
highest short term credit rating available from the Rating Agencies,
(b) such shares shall be freely redeemable by the holder on a daily
basis and (c) such fund shall be rated "Aaa" by Moody's;
(v) a common trust fund managed by the Indenture Trustee or
one of its affiliates which fund shall have (a) the highest short term
credit rating available from the Rating Agencies and (b) a long term
rating of "Aaa" from Moody's;
(vi) any Investment Agreement, provided that the Rating Agency
Confirmation Condition must be satisfied with respect to any Investment
Agreement not entered into in connection with a new Series Supplement;
and
(vii) investments of any nature (including, without
limitation, negotiable or non-negotiable certificates of deposit,
repurchase agreements, notes, investment agreements or shares with an
investment company, whether or not satisfying the conditions of the
foregoing paragraphs of the definition of Eligible Investments)
permitted by applicable law as to which the Rating Agency Confirmation
Condition has been satisfied.
"Eligible Lender Trustee" has the meaning set forth in the preamble to
the Base Indenture.
"Eligible Student Loan" means a Student Loan:
1. which was originated in the United States of America, its
territories, its possessions or other areas subject to its jurisdiction to an
Eligible Borrower
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under applicable law and agreements and was fully and properly executed by the
parties thereto;
2. which was originated or acquired by AMS (or by the Eligible Lender
Trustee on its behalf) and acquired by the Issuer in the ordinary course of its
business;
3. which provides for payments on a periodic basis that fully amortize
the Principal Balance of such Student Loan by its maturity, as such maturity may
be modified in accordance with any applicable deferral or forbearance periods
granted in accordance with applicable laws and restrictions or any related
Student Loan Guaranty Agreement, and yields interest at the rates applicable
thereto;
4. which was originated by an "eligible lender" under the Higher
Education Act in the ordinary course of its business and is guaranteed by a
Student Loan Guarantor that is an eligible guarantor under the Higher Education
Act, qualifies the holder thereof to receive Subsidy Payments from the DOE and
Student Loan Guaranty Payments from the related Student Loan Guarantor,
qualifies the related Student Loan Guarantor to receive reinsurance payments
thereon from the DOE, and such Student Loan qualifies for a rate of
reimbursement to the related lender equal to at least 98%;
5. which complied at the time of origination and complies, at the time
of its inclusion in the Collateral, in all material respects with all applicable
requirements of local, state, and federal laws, rules and regulations which
govern the making and servicing of such Student Loan including the requirements
of the applicable Student Loan Guaranty Agreement;
6. with respect to which all signatures are genuine and the Student
Loan Note evidencing such Student Loan has been duly executed and delivered and
constitutes the legal, valid and binding obligation of the related Borrower
enforceable in accordance with its terms;
7. with respect to which no right of rescission, setoff, counterclaim,
or defense has been asserted or threatened or exists;
8. with respect to which no default, breach, violation or event
permitting acceleration under the terms of such Student Loan has occurred, and
except for payment defaults continuing for a period of not more than 120 days,
no continuing condition that with notice or the lapse of time or both that would
constitute a default, breach, violation or event permitting acceleration under
terms of such Student Loan has arisen; and with respect to such Student Loan,
none of the forgoing events has occurred and been waived by any Person;
9. with respect to which, to the best of the Issuer's knowledge, an
Event of Bankruptcy has not occurred with respect to the related Borrower;
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10. that has not been originated in, and is not subject to the laws of,
any jurisdiction under which the origination, sale, transfer and assignment of
such Student Loan, or beneficial ownership therein, is unlawful, void or
voidable;
11. with respect to which there is only one original executed copy of
the Student Loan Note;
12. with regard to which the warranty of the Issuer in Section 7.1 (g)
of the Base Indenture is true and correct;
13. the sale or assignment of which to the Issuer pursuant to the
Purchase and Contribution Agreement and the granting of a security interest to
the Indenture Trustee pursuant to the Base Indenture does not contravene or
conflict with any law or regulation, or require the consent or approval of, or
notice to, any Person;
14. that is the subject of a valid Subservicing Agreement and as to
which a Sub-Servicer Event of Default has not occurred;
15. which, if such Student Loan is eligible to participate in the 0%
Interest Benefit Program, is purchased or contributed prior to the Acceptance
Rate with respect to AMS' 0% Interest Benefit Program exceeding 25%; and
16. which, if acquired after the Initial Closing Date, will receive
Special Allowance Payments on a CP Basis; provided, however, that the definition
of "Eligible Student Loan" may be changed by the Issuer at any time upon the
satisfaction of the Rating Agency Confirmation Condition; provided, further,
that if after any reauthorization or amendment of the Higher Education Act,
loans authorized thereunder (including, without limitation, the benefits of such
loans, any provisions with respect to such loans, or the servicing of such
loans), are materially different from loans so authorized prior to such
reauthorization or amendment, such loans authorized after such reauthorization
or amendment shall not constitute an Eligible Student Loan unless the Rating
Agency Confirmation Condition is satisfied.
"Enhancement" means, with respect to any Series of Notes, the rights
and benefits provided to the Noteholders of such Series of Notes, if any,
pursuant to any letter of credit, insurance policy, surety bond, cash collateral
account, overcollateralization, issuance of subordinated Notes, spread account,
guaranteed rate agreement, maturity guaranty facility, tax protection agreement,
interest rate swap or any other similar arrangement.
"Enhancement Agreement" means any contract, agreement, instrument or
document governing the terms of any Enhancement or pursuant to which any
Enhancement is issued or outstanding.
I-11
"Enhancement Agreement Event of Default" means with respect to any
Series of Notes any event of default under any Enhancement Agreement specified
in the applicable Series Supplement, after giving effect to any applicable cure
periods.
"Enhancement Deficiency" is defined, with respect to any Series of
Notes, in the applicable Series Supplement.
"Enhancement Provider" means the Person providing any Enhancement as
designated in the applicable Series Supplement, other than any Noteholders the
Notes of which are subordinated to any class or Series of Notes.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute of similar import, in each case as in effect
from time to time. References to sections of ERISA also refer to any successor
sections.
"Event of Bankruptcy" shall be deemed to have occurred with respect to
a Person if:
(a) a case or other proceeding shall be commenced, without the
application or consent of such Person, in any court, seeking the
liquidation, reorganization, debt arrangement, dissolution, winding up,
or composition or readjustment of debts of such Person, the appointment
of a trustee, receiver, custodian, liquidator, assignee, sequestrator
or the like for such Person or all or any substantial part of its
assets, or any similar action with respect to such Person under any law
relating to bankruptcy, insolvency, reorganization, winding up or
composition or adjustment of debts, and such case or proceeding shall
continue undismissed, or unstayed and in effect, for a period of 60
consecutive days; or an order for relief in respect of such Person
shall be entered in an involuntary case under the federal bankruptcy
laws or other similar laws now or hereafter in effect; or
(b) such Person shall commence a voluntary case or other
proceeding under any applicable bankruptcy, insolvency, reorganization,
debt arrangement, dissolution or other similar law now or hereafter in
effect, or shall consent to the appointment of or taking possession by
a receiver, liquidator, assignee, trustee, custodian, sequestrator (or
other similar official) for such Person or for any substantial part of
its property, or shall make any general assignment for the benefit of
creditors; or
(c) the board of directors or other similar governing body of
such Person (if such Person is a corporation or similar entity) shall
vote to implement any of the actions set forth in clause (b) above.
"Event of Default" has the meaning specified in Section 9.1 of the Base
Indenture.
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"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Executive Officer" means, with respect to any corporation, the Chief
Executive Officer, Chief Operating Officer, Chief Financial Officer, President,
Executive Vice President, any Vice President, the Secretary or the Treasurer of
such corporation.
"Expected Interest Collections" means, with respect to any Collection
Period, the positive difference, if any, between (i) the sum of (a) the amount
of interest accrued, net of any amounts required by the Higher Education Act to
be paid to the DOE, with respect to the Financed Student Loans during that
Collection Period, whether or not such interest is actually paid, (b) all
Interest Subsidy Payments and Special Allowance Payments estimated to have
accrued for that Collection Period, with respect to the Financed Student Loans,
whether or not actually received, (c) Investment Earnings on amounts on deposit
in all of the accounts of Shared Collateral Series during such Collection Period
and (d) all gross amounts that have accrued under any Interest Rate Exchange
Agreement related to any Shared Collateral Series with respect to such
Collection Period that are payable by all Interest Rate Exchange Agreement
Counterparties thereunder and (ii) all gross amounts that have accrued under
such Interest Rate Exchange Agreements with respect to such Collection Period
and that are payable by the Issuer.
"Federal Student Loan Program" means the Federal Family Education Loan
Program authorized under the Higher Education Act.
"Fee Remittance Date" means the tenth Business Day of each month,
commencing in June 2003.
"Final Scheduled Payment Date" is defined, with respect to any Series
of Notes, in the applicable Series Supplement.
"Financed Student Loan" means each Alternative Loan and each Student
Loan identified on the Student Loan Schedule or the Alternative Loan Schedule
and, without duplication but by way of inclusion and emphasis, all Additional
Financed Student Loans funded or substituted, or purported to be funded or
substituted, with amounts on deposit in the applicable Trust Account and all
Student Loans and Alternative Loans, whether or not funded or substituted as
described above, that are subject to the Lien of the Indenture.
"Fitch" means Fitch, Inc.
"Forbearance Status" means the temporary period of time where the
Borrower's required interest and principal payments are postponed or reduced due
to financial hardship in accordance with (i) the Higher Education Act and the
policies of the applicable Student Loan Guarantor, with respect to any Student
Loan, or (ii) the TuitionGard Program or the AMS Non-Guaranteed Alternative Loan
Program and the policies of the applicable Alternative Loan Guarantor, with
respect to any Alternative
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Loan; provided, however, that the definition of "Forbearance Status" may be
changed by the Issuer at any time upon satisfaction of the Rating Agency
Confirmation Condition.
"Funding Period" is defined, with respect to any Series of Notes, in
the related Series Supplement.
"GAAP" means those principles of accounting set forth in pronouncements
of the Financial Accounting Standards Board, the American Institute of Certified
Public Accountants or which have other substantial authoritative support and are
applicable in the circumstances as of the date of a report, as such principles
are from time to time supplemented and amended.
"Governmental Authority" means any Federal, state, local or foreign
court or governmental department, commission, board, bureau, agency, authority,
instrumentality or regulatory body.
"Grant" means mortgage, pledge, bargain, sell, warrant, alienate,
remise, release, convey, assign, transfer, create, and grant a lien upon and a
security interest in and right of set-off against, deposit, set over and confirm
pursuant to the Indenture. A Grant of the Collateral or of any other agreement
or instrument shall include all rights, powers and options (but none of the
obligations) of the Granting party thereunder, including the immediate and
continuing right to claim for, collect, receive and give receipt for principal
and interest payments in respect of the Collateral and all other moneys payable
thereunder, to give and receive notices and other communications, to make
waivers or other agreements, to exercise all rights and options, to bring
Proceedings in the name of the Granting party or otherwise and generally to do
and receive anything that the Granting party is or may be entitled to do or
receive thereunder or with respect thereto.
"Guaranteed Alternative Loans" means Alternative Loans guaranteed by an
Alternative Loan Guarantor pursuant to an Alternative Loan Guaranty Agreement.
"Guaranty Payments" means the payment under any Alternative Loan
Guaranty Agreement or Student Loan Guaranty Agreement, as applicable.
"Higher Education Act" means the Higher Education Act of 1965, as
amended, together with any rules, regulations and interpretations thereunder of
DOE or the applicable guaranty agent.
"Indenture" means the Base Indenture, together with all Series
Supplements, as the same may be amended, restated, modified or supplemented from
time to time.
"Indenture Trust Estate" means all money, instruments, rights and other
property that are subject or intended to be subject to the lien and security
interest of the Indenture for the benefit of the Noteholders and the Enhancement
Providers, if any,
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(including all property and interests Granted to the Indenture Trustee),
including all proceeds thereof.
"Indenture Trustee" means the party named as such in the Base Indenture
until a successor replaces it in accordance with the applicable provisions of
the Base Indenture and thereafter means the successor serving thereunder.
"Independent" means, when used with respect to any specified Person,
that the Person (a) is in fact independent of the Issuer, any other obligor upon
the Notes, AMS and any Affiliate of any of the foregoing Persons, (b) does not
have any interest in the Issuer, any such other obligor, AMS or any Affiliate of
any of the foregoing Persons and (c) is not connected with the Issuer, any such
other obligor, AMS or any Affiliate of any of the foregoing Persons as an
officer, employee, promoter, underwriter, trustee, partner, director or person
performing similar functions.
"Initial Closing Date" means the date on which the Notes are first
issued and authenticated.
"Initial Cutoff Date" (i) with respect to the Initial Closing Date, the
Business Day immediately preceding the Initial Closing Date, and (ii) with
respect to each Series Closing Date, the Business Day immediately preceding each
Series Closing Date.
"Initial Financed Student Loans" means certain Student Loans and
Alternative Loans purchased by the Issuer from the Seller or otherwise
contributed to the Issuer by the Seller pursuant to the applicable Purchase and
Contribution Agreement; provided, however, that the definition of "Initial
Financed Student Loans" may be changed by the Issuer at any time upon
satisfaction of the Rating Agency Confirmation Condition.
"Interest Period" means, with respect to any Series of Notes, the
period specified in the applicable Series Supplement.
"Interest Rate Exchange Agreement" means one or more interest rate swap
contracts, interest rate cap agreements or similar contracts entered into by the
Issuer upon satisfaction of the Rating Agency Confirmation Condition in
connection with the issuance of a Series of Notes, as set forth in the related
Series Supplements, providing limited protection against interest rate risks.
"Interest Rate Exchange Agreement Counterparty" means any Person with
whom the Issuer shall, from time to time, enter into an Interest Rate Exchange
Agreement.
"Interest Subsidy Payments" means quarterly payments made by the DOE to
holders of subsidized Stafford Loans with respect to those Stafford Loans as to
which the applicable conditions of the Higher Education Act have been satisfied,
in the amount
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of interest accruing on the unpaid principal balance thereof prior to the
commencement of repayment or during any deferment periods.
"Investment Agreement" means the investment agreement dated May 8, 2003
between Bayerische Landesbank and the Indenture Trustee and any other investment
agreement authorized pursuant to the Base Indenture or a Series Supplement.
"Investment Company Act" means the Investment Company Act of 1940, as
amended.
"Investment Earnings" means, with respect to each Fee Remittance Date,
all investment earnings (net of losses and investment expenses) on amounts on
deposit in the Trust Accounts realized since the preceding Fee Remittance Date
(and in the case of any Note Distribution Account not distributed on the
preceding Payment Date).
"Issuer Obligations" means all principal and interest, at any time and
from time to time, owing by the Issuer on the Notes and all costs, fees and
expenses payable by, or obligations of, the Issuer under the Base Indenture and
or the Related Documents.
"Issuer Order" and "Issuer Request" means a written order or request
signed in the name of the Issuer by any one of its Authorized Officers and
delivered to the Indenture Trustee.
"Lien" means, when used with respect to any Person, any interest in any
real or personal property, asset or other right held, owned or being purchased
or acquired by such Person which secures payment or performance of any
obligation, and shall include any mortgage, lien, pledge, encumbrance, charge,
retained security title of a conditional vendor or lessor, or other security
interest of any kind, whether arising under a security agreement, mortgage,
lease, deed of trust, chattel mortgage, assignment, pledge, retention or
security title, financing or similar statement, or notice or arising as a matter
of law, judicial process or otherwise.
"Limited Partnership Agreement " means the Limited Partnership
Agreement of the Issuer.
"Liquidated Financed Student Loans" has the meaning set forth in the
definition of Collections in this Base Indenture.
"Material Adverse Effect" means (A) with respect to the Issuer or the
Servicer, and any occurrence, event or condition with respect to either of them:
(i) a material adverse change in the financial condition,
business, assets or operations of the Issuer or the Servicer, as the
case may be, that materially adversely affects the ability of the
Issuer or the Servicer to perform its respective obligations under any
of the Related Documents; or
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(ii) a material adverse effect on the ability of the Issuer or
the Servicer, as the case may be, to perform its material obligations
under any of the Related Documents; and
(B) with respect to any Series of Notes, an adverse effect on
(a) the enforceability of any portion of the Collateral or (b) the
priority or perfection of the Indenture Trustee's Lien on a material
portion of the Collateral.
"Monthly Noteholders' Statement" means, with respect to each Series of
Notes, a statement described in the applicable Series Supplement.
"Moody's" means Moody's Investors Service, Inc.
"Non-Guaranteed Alternative Loans" means education loans to students
and parents of students which are not insured or reinsured by a Student Loan
Guarantor or the Federal government and not privately guaranteed or insured.
"Non-U.S. Exchange Agent" is defined in Section 2.4(c) of the Base
Indenture.
"Note" is defined in the recitals to the Base Indenture.
"Note Owner" means, with respect to a Book-Entry Note, the Person who
is the beneficial owner of such Book-Entry Note, as reflected on the books of
the Clearing Agency, or on the books of a Person maintaining an account with
such Clearing Agency (directly or as an indirect participant, in accordance with
the rules of such Clearing Agency).
"Note Principal Amount" is defined, with respect to any Series of
Notes, in the applicable Series Supplement.
"Note Rate" means, with respect to any Series of Notes, the annual rate
at which interest accrues on the Notes of such Series of Notes (or formula on
the basis of which such rate shall be determined) as stated in the applicable
Series Supplement.
"Note Register" means the register maintained pursuant to Section
2.6(a) of the Base Indenture, providing for the registration of the Notes and
transfers and exchanges thereof.
"Noteholder" and "Holder" means the Person in whose name a Note is
registered in the Note Register.
"Noteholders' Interest Basis Carryover" is defined, with respect to any
Series of Notes, in the applicable Series Supplement.
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"Obligor" means a Person obligated to make payments with respect to (i)
a Student Loan, including the students, the Student Loan Guarantors and the DOE
and (ii) an Alternative Loan, including the students.
"Officer's Certificate" means a certificate signed by an Authorized
Officer of the Issuer.
"Opinion of Counsel" means a written opinion from legal counsel who is
acceptable to the Indenture Trustee. The counsel may be an employee of or
counsel to the Issuer. An Opinion of Counsel may, to the extent same is based on
any factual matter, rely on an Officer's Certificate as to the truth of such
factual matter.
"Paired Series" is defined in Section 5.6 of the Base Indenture.
"Paying Agent" is defined in Section 2.6(a) of the Base Indenture.
"Payment Date" is defined, with respect to any Series of Notes, in the
applicable Series Supplement.
"Person" means any natural person, corporation, limited liability
company, business trust, joint venture, association, company, partnership, joint
stock company, corporation, trust, unincorporated organization or government
authority.
"Physical Property" means banker's acceptances, commercial paper,
negotiable certificates of deposits and other obligations that constitute
"instruments" within the meaning of Section 9-105(l)(i) of the applicable UCC
and are susceptible to physical delivery and Certificated Securities.
"Placement Agent" is defined, with respect to any Series of Notes, in
the applicable Series Supplement.
"Pool Balance" at any time represents the sum of (i) the aggregate
Principal Balance of the Financed Student Loans at the end of the preceding
Collection Period (including accrued interest thereon through the end of such
Collection Period to the extent such interest will be capitalized upon
commencement of repayment), after giving effect to the following, without
duplication: (a) all payments received by the Issuer and/or the Indenture
Trustee during such Collection Period from or on behalf of Borrowers, the
Federal Guarantors and, with respect to certain payments on certain Financed
Student Loans, the DOE, (b) all Purchase Amounts received by the Issuer and/or
the Indenture Trustee for such Collection Period from the Seller, the Issuer or
the Servicer in respect of any Financed Student Loans that have been repurchased
by the Seller or reassigned to the Issuer due to a breach of a representation or
warranty made by the Seller or Issuer as to the Financed Student Loans in the
Indenture, the purchase and contribution agreements for any Shared Collateral
Series, or that have been purchased by the Servicer due to a breach of certain
servicing covenants by the Servicer, and (c) all Realized Losses realized on
Financed Student Loans liquidated during such Collection
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Period and (ii) funds on deposit in all of the other accounts for all Shared
Collateral Series.
"Potential Event of Default" means any occurrence or event which, with
the giving of notice, the passage of time or both, would constitute an Event of
Default.
"Premium Percentage" means, at any time, the percentage equivalent of a
fraction, the numerator of which is the outstanding note principal amount of all
Shared Collateral Series, and the denominator of which is equal to the Pool
Balance.
"Principal Balance" with respect to any Student Loan or Alternative
Loan means the original principal amount of such Student Loan or Alternative
Loan, plus capitalized interest thereon, if any, less payments of principal by
or on behalf of the Obligor of such Student Loan or Alternative Loan.
"Principal Distribution Amount" means, with respect to any Fee
Remittance Date and all Shared Collateral Series, (i) so long as no Event of
Default has occurred and is continuing, all available funds remaining after the
payment of all items of higher priority to the extent necessary to cause (A) the
note principal amount of all notes of Shared Collateral Series plus all amounts
on deposit in all applicable note distribution accounts in respect of principal
of all notes of Shared Collateral Series as of such Fee Remittance Date (after
giving effect to any purchase of additional Financed Student Loans on such date)
times (B) 103% (or such other percentage subject to satisfaction of the Rating
Agency Confirmation Condition) plus (C) $150,000, to equal the Pool Balance as
of the last day of the related Collection Period, or (ii) if an Event of Default
has occurred and is continuing, all available funds remaining after the payment
of all items of higher priority for each Series for distribution as principal on
the notes of all Shared Collateral Series.
"Principal Terms" is defined in Section 2.3(a) of the Base Indenture.
"Proceeding" means any suit in equity, action at law or other judicial
or administrative proceeding.
"Purchase Amount" means with respect to any reassignment of any
Financed Student Loan pursuant to Section 7.5 of the Base Indenture, Section
3.05 of the Servicing Agreement or pursuant to the applicable section of each
Purchase and Contribution Agreement, an amount equal to the sum of (i) the
Principal Balance of such Financed Student Loan multiplied by the Premium
Percentage and (ii) all accrued and unpaid interest therein.
"Purchase and Contribution Agreement" means each Purchase and
Contribution Agreement entered into with respect to each Series Supplement, as
applicable.
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"Qualified Institution" means a depository institution organized under
the laws of the United States of America or any one of the States thereof or the
District of Columbia (or any domestic branch of a foreign bank), (i) which has
either (A) a long-term unsecured debt rating acceptable to the Rating Agencies
other than Moody's and a long-term unsecured debt rating of at least A2 from
Moody's or (B) a short-term unsecured debt rating or certificate of deposit
rating acceptable to the Rating Agencies and a short-term unsecured debt rating
of at least P1 from Moody's and (ii) whose deposits are insured by the Federal
Deposit Insurance Corporation.
"Quarterly Report" means a report, in substantially the form of Exhibit
D to the Base Indenture, furnished by the Issuer to the Eligible Lender Trustee
and the Indenture Trustee.
"Rating Agency" is defined, with respect to each Series of Notes, in
the applicable Series Supplement.
"Rating Agency Confirmation Condition" with respect to any Series of
Notes, has the meaning set forth in the applicable Series Supplement.
"Realized Losses" means, with respect to a Collection Period and for
Student Loans or Alternative Loans that became Defaulted Student Loans or
Defaulted Alternative Loans during such Collection Period, the excess of the
Principal Balance of each such Defaulted Student Loan or Defaulted Alternative
Loan plus accrued but unpaid interest thereon over any net recoveries or other
Collections thereon during such Collection Period; provided, however, that the
definition of "Realized Losses" may be changed by the Issuer at any time upon
satisfaction of the Rating Agency Confirmation Condition.
"Record Date" means (i) with respect to the Book-Entry Notes, the
Business Day immediately preceding each Payment Date and (ii) with respect to
the Definitive Notes, the last day of the calendar month immediately preceding
each applicable Payment Date.
"Registrar" is defined in Section 2.6(a) of the Base Indenture.
"Related Documents" means, with respect to each Series, the Base
Indenture, the applicable Series Supplement, the Notes of such Series, the
Servicing Agreement, the Sub-servicing Agreements, the Student Loan Guaranty
Agreements, the applicable Purchase and Contribution Agreement, the Trust
Agreement and all other documents to be executed and delivered in connection
therewith.
"Related Security" means, with respect to any Financed Student Loan:
(a) all of the right, title and interest of the Issuer and the Eligible Lender
Trustee in and to the Student Loan Note(s) and Alternative Loan Note(s) and all
other agreements that relate to such Financed Student Loan; (b) any security
interests or liens and property subject thereto from time to time purporting to
secure payment of such Financed Student
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Loan, whether pursuant to the Student Loan Note or Alternative Loan Note related
to such Financed Student Loan or otherwise and (c) all other guarantees and
other agreements or arrangements of whatever character from time to time
supporting or securing payment of such Financed Student Loan.
"Required Noteholders" with respect to each Series of Notes, has the
meaning set forth in the applicable Series Supplement.
"Requisite Investors" means (i) so long as any Class A notes of any
Shared Collateral Series are outstanding, the holders of more than 50% of the
aggregate Note Principal Amount of such Class A notes, (ii) after such Class A
notes have been paid in full, the holders of more than 50% of the aggregate Note
Principal Amount of all Class B notes of any Shared Collateral Series, and (iii)
after such Class B notes have been paid in full, if any Class of Notes with
Shared Collateral is outstanding which is subordinate to such Class B notes, the
holders of more than 50% of the aggregate Note Principal Amount of the most
senior of such Classes.
"Reserve Account" is defined in Section 5.8 of the Base Indenture.
"Reserve Account Excess" means, as of each Fee Remittance Date, the
amount, if any, by which the amount on deposit in the Reserve Account (after
giving effect to all deposits and withdrawals therefrom on such Fee Remittance
Date is greater than the Specified Reserve Account Balance for such Fee
Remittance Date.
"Responsible Officer" means with respect to the Indenture Trustee, any
officer within the Corporate Trust Services Division of the Indenture Trustee,
including any vice president, assistant vice president, assistant treasurer,
assistant secretary, or any other similar officer of the Indenture Trustee
customarily performing functions similar to those performed by any of the above
designated officers, with direct responsibility for the administration of the
Indenture and the other Related Documents on behalf of the Indenture Trustee and
also, with respect to a particular matter, any other officer to whom such matter
is referred because of such officer's knowledge of a familiarity with the
subject.
"Revised Article 8" means Revised Article 8 (1994 Version) (and
corresponding amendments to Article 9) as promulgated by the National Conference
of Commissioners on Uniform State Laws.
"Secured Parties" is defined in Section 3.1 of the Base Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Intermediary" means a "securities intermediary" within the
meaning of Section 8-102(a)(14) of Revised Article 8.
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"Security Entitlement" means a "security entitlement" within the
meaning of Section 8-102(a)(17) of Revised Article 8.
"Segregated Series" is defined in Section 2.3(b) of the Base Indenture.
"Senior Parity Distribution Amount" means with respect to any Fee
Remittance Date and all Shared Collateral Series, all available funds remaining
after the payment of all items of higher priority to the extent necessary to
cause (A) the note principal amount of the Class A Notes of all Shared
Collateral Series plus all amounts on deposit in all applicable note
distribution accounts in respect of principal of all the Class A Notes of all
Shared Collateral Series as of such Fee Remittance Date times (B) 101% (or such
other percentage subject to the satisfaction of the Rating Agency Confirmation
Condition), to equal the Pool Balance (less all amounts on deposit in the
Reserve Account) as of the last day of the related Collection Period.
"Senior Parity Requirement" means the Pool Balance (less all amounts on
deposit in the Reserve Account) is equal to at least 101% (or such other
percentage subject to the satisfaction of the Rating Agency Confirmation
Condition) of the Class A notes of all Shared Collateral Series or such other
amount subject to the satisfaction of the Rating Agency Confirmation Condition.
"Series Closing Date" means, with respect to any Series of Notes, the
date of issuance of such Series of Notes, as specified in the applicable Series
Supplement.
"Series of Notes" or "Series" means each Series of Notes issued and
authenticated pursuant to the Base Indenture and a related Series Supplement.
"Series Percentage" means, with respect to each Series of Notes, the
percentage specified in the applicable Series Supplement.
"Series-Specific Collateral" is defined in Section 2.3(b) of the Base
Indenture.
"Series Supplement" means a supplement to the Base Indenture complying
with the terms of Section 2.3 of the Base Indenture.
"Servicer" means Academic Management Services Corp. and any successors
thereto.
"Servicer Default" is defined, with respect to any Series of Notes, in
the applicable Series Supplement.
"Servicing Agreement" means the Servicing Agreement, dated as of May 8,
2003, among the Issuer, the Servicer and the Eligible Lender Trustee.
"Servicing Fee Amount" is defined, with respect to any Series of Notes,
in the applicable Series Supplement.
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"Shared Collateral Series" means a Series of Notes secured by the
Collateral.
"Special Allowance Payments" means quarterly payments made by the DOE
to holders of loans under the Federal Student Loan Program, to the extent
necessary to ensure that such holder receives at least a specified market
interest rate of return on such loans, equal to a percentage of the daily
average unpaid principal balance. The special allowance rate is set by statutory
formula.
"Specified Reserve Account Balance" means with respect to any Fee
Remittance Date, an amount equal to (a) the greater of (i) 0.50% of the sum of
the aggregate principal balance of the Shared Collateral Series minus all
aggregate amounts being on deposit in the all note distribution accounts for
payment in respect of principal on the Notes of all Shared Collateral Series on
all applicable Payment Dates after taking into account the effect of
distributions on such Fee Remittance Date or Payment Date, as applicable, and
(ii) $500,000 or (b) any other amount chosen by the Issuer subject to the
satisfaction of the Rating Agency Confirmation Condition.
"Stafford Loan" means a loan under the Robert T. Stafford Student Loan
Program in accordance with the Higher Education Act, including subsidized loans
and Unsubsidized Loans.
"Student Loan" means a student loan originated in compliance with the
Federal Student Loan Program and which is guaranteed as to principal and
interest by a Student Loan Guarantor pursuant to a Student Loan Guaranty
Agreement; provided, however, that the definition of "Student Loan" may be
changed by the Issuer at any time upon satisfaction of the Rating Agency
Confirmation Condition.
"Student Loan Files" means the documents relating to the Financed
Student Loans specified in Section 2.01 of the Servicing Agreement.
"Student Loan Guarantors" means any guaranty agency under the Higher
Education Act providing guarantees with respect to Financed Student Loans;
provided, however, that the definition of "Student Loan Guarantors" may be
changed by the Issuer at any time upon satisfaction of the Rating Agency
Confirmation Condition.
"Student Loan Guaranty Agreement" means any of, and "Student Loan
Guaranty Agreements" means all of, the agreements pursuant to which the Student
Loan Guarantors guarantee Student Loans comprising part of the Financed Student
Loans, in each case as the same may be amended, supplemented or otherwise
modified from time to time.
"Student Loan Guaranty Payment" means any payment by a Student Loan
Guarantor pursuant to a Student Loan Guaranty Agreement in respect of a Student
Loan.
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"Student Loan Notes" means the promissory notes or other writings
evidencing the Student Loans.
"Student Loan Rate" means, with respect to any Collection Period, the
interest rate equal to the product of (a) the quotient obtained by dividing (i)
360 by (ii) the actual number of days elapsed in such Collection Period and (b)
the percentage equivalent of a fraction, the numerator of which is equal to the
sum of the Expected Interest Collections for such Collection Period, less the
sum of the Servicing Fee Amount, the Trustee's Fees, the Auction Agent Fee and
the Broker-Dealers Fee with respect to such Collection Period and (ii) the
denominator of which is the aggregate principal amount of all Shared Collateral
Series as of the last day of such Collection Period.
"Student Loan Schedule" means Appendix A to this Base Indenture
constituting a listing of Student Loans legally or beneficially owned by the
Issuer delivered to and held by the Indenture Trustee (which Schedule may be in
the form of microfiche or computer file or other medium acceptable to the
Indenture Trustee), as from time to time amended, supplemented, or modified by
the Issuer (whether pursuant to a Series Supplement or otherwise).
"Sub-servicer" means any of, and "Sub-servicers" means all of, the
sub-servicer(s) servicing the Financed Student Loans pursuant to Sub-servicing
Agreements.
"Sub-servicer Event of Default" means for any Subservicing Agreement,
an event as defined therein pursuant to which the Sub-servicer's right to
service Financed Student Loans thereunder is subject to termination or removal.
"Sub-servicing Agreement" or "Subservicing Agreement" means any of, and
"Sub-servicing Agreements" or "Subservicing Agreements" means all of, the
agreements entered into between the Servicer and any Sub-servicer pursuant to
which such Sub-servicer agrees to service Financed Student Loans, in each case,
as the same may be amended, supplemented or otherwise modified from time to
time.
"Subsidy Payment" means interest subsidy payments, special allowance
payments and other payments of a similar nature made to the Issuer pursuant to
the terms of the Higher Education Act.
"Substitution" is defined in Section 7.5 of the Base Indenture.
"Substitution Amount" means with respect to the Substitution of any
Financed Student Loan pursuant to Section 7.5 of the Base Indenture, Section
3.05 of the Servicing Agreement or pursuant to the applicable section of each
Purchase and Contribution Agreement, an amount equal to the sum of the Principal
Balance of such Financed Student Loan and all accrued and unpaid interest
thereon.
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"Supermajority Investors" means (i) so long as any Class A notes of any
Shared Collateral Series are outstanding, the holders of more than 66 2/3% of
the aggregate Note Principal Amount of such Class A notes, (ii) after such Class
A notes have been paid in full, the holders of more than 66 2/3% of the
aggregate Note Principal Amount of all Class B notes of any Shared Collateral
Series, and (iii) after such Class B notes have been paid in full, if any Class
of Notes of any Shared Collateral Series is outstanding which is subordinate to
such Class B notes, the holders of more than 66 2/3% of the aggregate Note
Principal Amount of the most senior of such Classes.
"Supplement" means a supplement to the Base Indenture complying with
the terms of Article 12 of the Base Indenture.
"Trust Accounts" means the Collection Account, Capitalized Interest
Account, Reserve Account and each "Trust Account" as defined in the related
Series Supplement.
"Trust Agreement" means the Trust Agreement dated as of December 7,
1998, between EFG-I, LP, and Bank One, National Association (formerly The First
National Bank of Chicago), as eligible lender trustee, as amended by the
amendment dated as of June 1, 1999, between EFG-I, LP and the Eligible Lender
Trustee.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
"Trust Officer" means, with respect to the Indenture Trustee, any
Senior Vice President, Vice President, Assistant Vice President, Assistant
Secretary or Assistant Treasurer of the Corporate Trust Office, or any trust
officer, or any officer customarily performing functions similar to those
performed by the person who at the time shall be such officers, or to whom any
corporate trust matter is referred because of his knowledge of and familiarity
with a particular subject, or any successor thereto responsible for the
administration of the Base Indenture.
"TuitionGard Program" means the TUITIONGard(R) program.
"UCC" means the Uniform Commercial Code as in effect from time to time
in the specified jurisdiction.
"Uncertificated Security" means an "uncertificated security" within the
meaning of the applicable UCC.
"Unsubsidized Loan" means Stafford Loans that are not subsidized by the
DOE as set forth in Section 428H of the Higher Education Act (20 U.S.C. Sections
1078-8); provided, however, that the definition of "Unsubsidized Loan" may be
changed by the Issuer at any time upon satisfaction of the Rating Agency
Confirmation Condition.
"United States" or "U.S." means the United States of America, its fifty
States and the District of Columbia.
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"United States Security Entitlement" means a "Security Entitlement" as
defined in 31 C.F.R. Sections 357.2, 24 C.F.R. Sections 1.2, 12 C.F.R. Sections
912.1, 12 C.F.R. Sections 1511.1, 12 C.F.R. Sections 615.5450 or 31 C.F.R.
Sections 354.1.
"Unmatured Event of Default" means any event which, with the giving of
notice or lapse of time, or both, would become an Event of Default.
"U.S. Government Obligations" means direct obligations of the United
States of America, or any agency or instrumentality thereof for the payment of
which the full faith and credit of the United States of America is pledged as to
full and timely payment of such obligations.
"written" or "in writing" means any form of written communication,
including, without limitation, by means of telex, telecopier device, telegraph
or cable.
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SCHEDULE II
TO THE BASE
INDENTURE
LIST OF OFFICES WHERE
RECORDS ARE KEPT
AMS-3 2003, LP
One AMS Place
463 Swansea Mall Drive
Swansea, MA 02777
II-1
EXHIBIT D
FORM OF QUARTERLY REPORT
Please see attached.
D-1
APPENDIX A
ALTERNATIVE LOAN SCHEDULE AND STUDENT LOAN
SCHEDULE
Schedule on file with the Indenture Trustee