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INDENTURE OF TRUST
by and between
NELNET STUDENT LOAN TRUST 2004-3
and
ZIONS FIRST NATIONAL BANK,
as Trustee and as Eligible Lender Trustee
Dated as of July 1, 2004
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NELNET STUDENT LOAN TRUST 2004-3
Reconciliation and tie between Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act") and Indenture of Trust, dated as of July 1, 2004.
TRUST INDENTURE ACT SECTION INDENTURE SECTION
Section 310(a)(1) 7.23
310(a)(2) 7.23
310(b) 7.23, 7.09
Section 311(a) 7.08
311(b) 7.08
Section 312(b) 9.16
312(c) 9.16
Section 313(a) 4.15
313(b) 4.15
313(c) 4.15, 8.04
Section 314(a)(1) 4.15
314(a)(2) 4.15
314(a)(3) 4.15
314(a)(4) 4.16
314(c) 2.02, 5.06
314(d)(1) 5.06
Section 315(b) 8.04
Section 317(a)(1) 4.17, 6.10
317(a)(2) 7.24
Section 318(a) 9.09
318(c) 9.09
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NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
Attention should also be directed to Section 318(c) of the Trust Indenture
Act, which provides that the provisions of Sections 310 to and including 317 of
the Trust Indenture Act are a part of and govern every qualified indenture,
whether or not physically contained therein.
ARTICLE I
DEFINITIONS AND USE OF PHRASES............................................................... 3
ARTICLE II
NOTE DETAILS AND FORM OF NOTES
Section 2.01. Note Details................................................................ 25
Section 2.02. Execution, Authentication and Delivery of Notes............................. 25
Section 2.03. Registration, Transfer and Exchange of Notes; Persons Treated as
Registered Owners........................................................... 25
Section 2.04. Lost, Stolen, Destroyed and Mutilated Notes................................. 26
Section 2.05. Trustee's Authentication Certificate........................................ 27
Section 2.06. Cancellation and Destruction of Notes by the Trustee........................ 27
Section 2.07. Temporary Notes............................................................. 27
Section 2.08. Issuance of Notes........................................................... 27
Section 2.09. Definitive Notes............................................................ 27
Section 2.10. Payment of Principal and Interest........................................... 28
ARTICLE III
PARITY AND PRIORITY OF LIEN; OTHER OBLIGATIONS; AND DERIVATIVE
PRODUCTS
Section 3.01. Parity and Priority of Lien................................................. 29
Section 3.02. Other Obligations........................................................... 29
Section 3.03. Derivative Products; Counterparty Payments; Issuer Derivative
Payments.................................................................... 29
ARTICLE IV
PROVISIONS APPLICABLE TO THE NOTES; DUTIES OF THE ISSUER
Section 4.01. Payment of Principal and Interest........................................... 30
Section 4.02. Covenants as to Additional Conveyances...................................... 30
Section 4.03. Further Covenants of the Issuer............................................. 30
Section 4.04. Enforcement of Master Servicing Agreement and Subservicing
Agreements.................................................................. 31
Section 4.05. Procedures for Transfer of Funds............................................ 33
Section 4.06. Additional Covenants with Respect to the Higher Education Act............... 33
Section 4.07. Financed Eligible Loans; Collections Thereof; Assignment Thereof............ 34
Section 4.08. Appointment of Agents, Direction to Trustee, Etc............................ 35
Section 4.09. Capacity to Sue............................................................. 35
Section 4.10. Continued Existence; Successor to Issuer.................................... 35
Section 4.11. Amendment of Student Loan Purchase Agreements............................... 35
Section 4.12. Representations; Negative Covenants......................................... 36
Section 4.13. Additional Covenants........................................................ 41
Section 4.14. Providing of Notice......................................................... 42
Section 4.15. Certain Reports............................................................. 42
Section 4.16. Statement as to Compliance.................................................. 43
Section 4.17. Representations of the Issuer Regarding the Trustee's Security Interest..... 44
Section 4.18. Further Covenants of the Issuer Regarding the Trustee's Security
Interest.................................................................... 45
ARTICLE V
FUNDS
Section 5.01. Creation and Continuation of Funds and Accounts............................. 45
Section 5.02. Acquisition Fund............................................................ 45
Section 5.03. Collection Fund............................................................. 46
Section 5.04. Reserve Fund................................................................ 49
Section 5.05. Investment of Funds Held by Trustee......................................... 50
Section 5.06. Release..................................................................... 51
ARTICLE VI
DEFAULTS AND REMEDIES
Section 6.01. Events of Default Defined................................................... 52
Section 6.02. Remedy on Default; Possession of Trust Estate............................... 53
Section 6.03. Remedies on Default; Advice of Counsel...................................... 54
Section 6.04. Remedies on Default; Sale of Trust Estate................................... 54
Section 6.05. Appointment of Receiver..................................................... 55
Section 6.06. Restoration of Position..................................................... 55
Section 6.07. Application of Sale Proceeds................................................ 55
Section 6.08. Acceleration of Maturity; Rescission and Annulment.......................... 55
Section 6.09. Remedies Not Exclusive...................................................... 56
Section 6.10. Collection of Indebtedness and Suits for Enforcement by Trustee............. 56
Section 6.11. Direction of Trustee........................................................ 57
Section 6.12. Right to Enforce in Trustee................................................. 58
Section 6.13. Physical Possession of Obligations Not Required............................. 58
Section 6.14. Waivers of Events of Default................................................ 58
ARTICLE VII
THE TRUSTEE
Section 7.01. Acceptance of Trust......................................................... 59
Section 7.02. Recitals of Others.......................................................... 59
Section 7.03. As to Filing of Indenture................................................... 59
Section 7.04. Trustee May Act Through Agents.............................................. 60
Section 7.05. Indemnification of Trustee.................................................. 60
Section 7.06. Trustee's Right to Reliance................................................. 61
Section 7.07. Compensation of Trustee..................................................... 62
Section 7.08. Creditor Relationships...................................................... 62
Section 7.09. Resignation of Trustee...................................................... 62
Section 7.10. Removal of Trustee.......................................................... 63
Section 7.11. Successor Trustee........................................................... 63
Section 7.12. Manner of Vesting Title in Trustee.......................................... 63
Section 7.13. Additional Covenants by the Trustee to Conform to the Higher
Education Act............................................................... 64
Section 7.14. Right of Inspection......................................................... 64
Section 7.15. Limitation with Respect to Examination of Reports........................... 64
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Section 7.16. Servicing Agreements........................................................ 64
Section 7.17. Additional Covenants of Trustee............................................. 65
Section 7.18. Duty of Trustee with Respect to Rating Agencies............................. 65
Section 7.19. Merger of the Trustee....................................................... 65
Section 7.20. Receipt of Funds from Master Servicer or a Subservicer...................... 66
Section 7.21. Special Circumstances Leading to Resignation of Trustee..................... 66
Section 7.22. Survival of Trustee's Rights to Receive Compensation,
Reimbursement and Indemnification........................................... 66
Section 7.23. Corporate Trustee Required; Eligibility; Conflicting Interests.............. 66
Section 7.24. Trustee May File Proofs of Claim............................................ 66
Section 7.25. No Petition................................................................. 67
ARTICLE VIII
SUPPLEMENTAL INDENTURES
Section 8.01. Supplemental Indentures Not Requiring Consent of Registered Owners.......... 67
Section 8.02. Supplemental Indentures Requiring Consent of Registered Owners.............. 69
Section 8.03. Additional Limitation on Modification of Indenture.......................... 69
Section 8.04. Notice of Defaults.......................................................... 70
Section 8.05. Conformity with the Trust Indenture Act..................................... 70
ARTICLE IX
GENERAL PROVISIONS
Section 9.01. Notices..................................................................... 70
Section 9.02. Covenants Bind Issuer....................................................... 71
Section 9.03. Lien Created................................................................ 72
Section 9.04. Severability of Lien........................................................ 72
Section 9.05. Consent of Registered Owners Binds Successors............................... 72
Section 9.06. Nonliability of Persons; No General Obligation.............................. 72
Section 9.07. Nonpresentment of Notes or Interest Checks.................................. 72
Section 9.08. Security Agreement.......................................................... 72
Section 9.09. Laws Governing.............................................................. 73
Section 9.10. Severability................................................................ 73
Section 9.11. Exhibits.................................................................... 73
Section 9.12. Non-Business Days........................................................... 73
Section 9.13. Parties Interested Herein................................................... 73
Section 9.14. Obligations Are Limited Obligations......................................... 73
Section 9.15. Limitations on Counterparty Rights.......................................... 73
Section 9.16. Disclosure of Names and Addresses of Registered Owners...................... 73
Section 9.17. Aggregate Principal Amount of Obligations................................... 74
Section 9.18. Financed Eligible Loans..................................................... 74
Section 9.19. Concerning the Delaware Trustee............................................. 74
ARTICLE X
PAYMENT AND CANCELLATION OF NOTES AND SATISFACTION OF INDENTURE
Section 10.01. Trust Irrevocable........................................................... 75
Section 10.02. Satisfaction of Indenture................................................... 75
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Section 10.03. Optional Purchase of All Financed Eligible Loans............................ 76
Section 10.04. Auction of Financed Eligible Loans.......................................... 77
Section 10.05. Cancellation of Paid Notes.................................................. 77
EXHIBIT A ELIGIBLE LOAN ACQUISITION CERTIFICATE
EXHIBIT B-1 FORM OF CLASS A-1 NOTE
EXHIBIT B-2 FORM OF CLASS A-2 NOTE
EXHIBIT B-3 FORM OF CLASS A-3 NOTE
EXHIBIT B-4 FORM OF CLASS A-4 NOTE
EXHIBIT B-5 FORM OF CLASS A-5 NOTE
EXHIBIT B-6 FORM OF CLASS B NOTE
EXHIBIT C FORM OF ADMINISTRATOR'S MONTHLY SERVICING PAYMENT
DATE CERTIFICATE
EXHIBIT D FORM OF ADMINISTRATOR'S QUARTERLY DISTRIBUTION DATE
CERTIFICATE
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INDENTURE OF TRUST
THIS INDENTURE OF TRUST, dated as of July 1, 2004 (this "Indenture"), is by
and between NELNET STUDENT LOAN TRUST 2004-3 (the "Issuer"), a statutory trust
duly organized and existing under the laws of the State of Delaware (the
"State"), and ZIONS FIRST NATIONAL BANK, a national banking association duly
organized and operating under the laws of the United States of America, as
trustee hereunder (together with its successors, the "Trustee") and as eligible
lender trustee (together with its successors, the "Eligible Lender Trustee")
under the Eligible Lender Trust Agreement (all capitalized terms used in these
preambles, recitals and granting clauses shall have the same meanings assigned
thereto in Article I hereof);
W I T N E S S E T H :
WHEREAS, the Issuer represents that it is duly created as a statutory trust
under the laws of the State and that by proper action has duly authorized the
execution and delivery of this Indenture, which Indenture provides for the
payment of student loan asset-backed notes (the "Notes") and the payments to any
Counterparty (as defined herein); and
WHEREAS, this Indenture is subject to the provisions of the Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act"), that are deemed to be
incorporated into this Indenture and shall, to the extent applicable, be
governed by such provisions; and
WHEREAS, the Trustee has agreed to accept the trusts herein created upon
the terms herein set forth; and
WHEREAS, it is hereby agreed between the parties hereto, the Registered
Owners of the Notes (the Registered Owners evidencing their consent by their
acceptance of the Notes) and any Counterparty (the Counterparty evidencing its
consent by its execution and delivery of a Derivative Product (as defined
herein)) that in the performance of any of the agreements of the Issuer herein
contained, any obligation it may thereby incur for the payment of money shall
not be general debt on its part, but shall be secured by and payable solely from
the Trust Estate, payable in such order of preference and priority as provided
herein;
NOW, THEREFORE, the Issuer, and as appropriate the Eligible Lender Trustee,
in consideration of the premises and acceptance by the Trustee of the trusts
herein created, of the purchase and acceptance of the Notes by the Registered
Owners thereof, of the execution and delivery of any Derivative Product by a
Counterparty and the Issuer and the acknowledgement thereof by the Trustee, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, do hereby GRANT, CONVEY, PLEDGE, TRANSFER, ASSIGN AND
DELIVER to the Trustee, for the benefit of the Registered Owners of the Notes
and any Counterparty (to secure the payment of any and all amounts which may
from time to time become due and owing to a Counterparty pursuant to any
Derivative Product), all of the moneys, rights and properties described in the
granting clauses A through F below (the "Trust Estate"), as follows:
GRANTING CLAUSE A
The Available Funds and Accounts (other than moneys released from the lien
of the Trust Estate as provided herein);
GRANTING CLAUSE B
All moneys and investments held in the Funds and Accounts created under
Section 5.01 hereof, including all proceeds thereof and all income thereon;
GRANTING CLAUSE C
The Financed Eligible Loans (other than Financed Eligible Loans released
from the lien of the Trust Estate as provided herein) and all obligations of the
obligors thereunder including all moneys accrued and paid thereunder on or after
the Cutoff Date;
GRANTING CLAUSE D
The rights of the Issuer and/or the Eligible Lender Trustee in and to the
Eligible Lender Trust Agreement, the Master Servicing Agreement, any
Subservicing Agreement, the Student Loan Purchase Agreements, the Administration
Agreement, the Custodian Agreements and the Guarantee Agreements as the same
relate to the Financed Eligible Loans;
GRANTING CLAUSE E
The rights of the Issuer in and to any Derivative Product; provided,
however, that this Granting Clause E shall not be for the benefit of a
Counterparty with respect to its Derivative Product; and
GRANTING CLAUSE F
Any and all other property, rights and interests of every kind or
description that from time to time hereafter is granted, conveyed, pledged,
transferred, assigned or delivered to the Trustee as additional security
hereunder.
TO HAVE AND TO HOLD the Trust Estate, whether now owned or held or
hereafter acquired, unto the Trustee and its successors or assigns;
IN TRUST NEVERTHELESS, upon the terms and trusts herein set forth for the
equal and proportionate benefit and security of all present and future
Registered Owners of the Notes, without preference of any Note over any other,
except as provided herein, and for enforcement of the payment of the Notes in
accordance with their terms, and all other sums payable hereunder (including
payments due and payable to any Counterparty) or on the Notes, and for the
performance of and compliance with the obligations, covenants and conditions of
this Indenture, as if all the Notes and other Obligations (as defined herein) at
any time Outstanding had been executed and delivered simultaneously with the
execution and delivery of this Indenture;
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PROVIDED, HOWEVER, that if the Issuer, its successors or assigns, shall
well and truly pay, or cause to be paid, the principal of the Notes and the
interest due and to become due thereon, or provide fully for payment thereof as
herein provided, at the times and in the manner mentioned in the Notes according
to the true intent and meaning thereof, and shall make all required payments
into the Funds as required under Article V hereof, or shall provide, as
permitted hereby, for the payment thereof by depositing with the Trustee sums
sufficient to pay or to provide for payment of the entire amount due and to
become so due as herein provided (including payments due and payable to any
Counterparty), then this Indenture (other than Sections 4.13, 4.14 (for a period
of 90 days) and 7.05 hereof) and the rights hereby granted shall cease,
terminate and be void; otherwise, this Indenture shall be and remain in full
force and effect;
NOW, THEREFORE, it is mutually covenanted and agreed as follows:
ARTICLE I
DEFINITIONS AND USE OF PHRASES
Capitalized terms used herein and not otherwise defined shall have the
meanings set forth below unless the context clearly requires otherwise:
"ACCOUNT" shall mean any of the accounts created and established within any
Fund pursuant to this Indenture.
"ACQUISITION FUND" shall mean the Fund by that name created in Section
5.01(a) hereof and further described in Section 5.02 hereof, including any
Accounts and Subaccounts created therein.
"ADJUSTED POOL BALANCE" shall mean, for any Quarterly Distribution Date as
determined by the Administrator, (a) if the Pool Balance as of the last day of
the related Collection Period is greater than 40% of the Initial Pool Balance,
the sum of such Pool Balance, and the Specified Reserve Fund Balance for that
Quarterly Distribution Date; or (b) if the Pool Balance as of the last day of
the related Collection Period is less than or equal to 40% of the Initial Pool
Balance, that Pool Balance.
"ADMINISTRATION AGREEMENT" shall mean the Administration Agreement dated as
of July 1, 2004, among the Issuer, the Administrator, the Trustee and the
Delaware Trustee, as supplemented and amended.
"ADMINISTRATION FEE" shall mean an amount equal to 0.18% per annum, based
on the aggregate principal amount of the Pool Balance at any time, as determined
by the Administrator; provided, however, that if the Financed Eligible Loans are
not optionally purchased pursuant to Section 10.03 hereof and the Financial
Eligible Loans are not sold on the Trust Auction Date pursuant to Section 10.04
hereof, the Administration Fee shall be reduced to an amount equal to 0.05% per
annum, based on the aggregate principal amount of the Pool Balance at any time,
as determined by the Administrator.
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"ADMINISTRATOR" shall mean National Education Loan Network, Inc. in its
capacity as administrator of the Issuer and the Financed Eligible Loans, or any
successor thereto in accordance with the Administration Agreement.
"AFFILIATE" shall mean, with respect to any specified Person, any other
Person controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect to
any specified Person means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"AUTHORIZED REPRESENTATIVE" shall mean, when used with reference to the
Issuer, any Person duly authorized by the Trust Agreement to act on the Issuer's
behalf.
"AVAILABLE FUNDS" shall mean, with respect to a Quarterly Distribution Date
or any related Monthly Servicing Payment Date, the sum of the following amounts
received to the extent not previously distributed: (a) all collections received
by the Master Servicer or any Subservicer on the Financed Eligible Loans
(including late fees received by the Master Servicer or any Subservicer with
respect to the Financed Eligible Loans and payments from any Guaranty Agency
received with respect to the Financed Eligible Loans but net of (i) any
collections in respect of principal on the Financed Eligible Loans applied by
the Issuer to repurchase guaranteed loans from the Guaranty Agencies or the
Master Servicer or any Subservicer in accordance with its Guarantee Agreement,
the Master Servicing Agreement or the related Subservicing Agreement, as
applicable; (ii) amounts required by the Higher Education Act to be paid to the
Department (including, but not limited to, rebate fees owed with respect to
consolidation loans) or to be repaid to borrowers (whether or not in the form of
a principal reduction of the applicable Financed Eligible Loan), with respect to
the Financed Eligible Loans; and (iii) any proceeds used to purchase Eligible
Loans which constitute "add-on consolidation loans"); (b) any Interest Benefit
Payments and Special Allowance Payments received by the Trustee with respect to
Financed Eligible Loans; (c) all Liquidation Proceeds from any Financed Eligible
Loans which became Liquidated Financed Eligible Loans in accordance with the
related Master Servicer or Subservicer's customary servicing procedures, and all
other moneys collected with respect to any Liquidated Financed Eligible Loan
which was written off, net of the sum of any amounts expended by the Master
Servicer or related Subservicer in connection with such liquidation and any
amounts required by law to be remitted to the obligor on such Liquidated
Financed Eligible Loan; (d) the aggregate Purchase Amounts received for Financed
Eligible Loans repurchased by the Seller or purchased by the Master Servicer or
a Subservicer or for serial loans sold to another eligible lender pursuant to
the Master Servicing Agreement or the related Subservicing Agreement; (e) the
aggregate amounts, if any, received from the Seller, the Master Servicer or any
Subservicer, as the case may be, as reimbursement of non-guaranteed interest
amounts, or lost Interest Benefit Payments and Special Allowance Payments, with
respect to the Financed Eligible Loans pursuant to a Student Loan Purchase
Agreement, the Master Servicing Agreement or a Subservicing Agreement,
respectively; (f) other amounts received by the Master Servicer or a Subservicer
pursuant to its role as Master Servicer or Subservicer under the Master
Servicing Agreement or the related Subservicing Agreement, respectively, and
payable to the Issuer in connection therewith; (g) all interest earned or gain
realized from the investment of amounts in any Fund or Account; and (h) any
payments received
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under the Derivative Products from the Counterparties in respect of such
Quarterly Distribution Date. "Available Funds" shall be determined pursuant to
the terms of this definition by the Administrator and reported to the Trustee.
Amounts described in clause (a)(i), (ii) and (iii) hereof shall be paid by the
Trustee upon receipt of a written direction from the Administrator. The Trustee
may conclusively rely on such determinations without further duty to review or
examine such information.
"BASIC DOCUMENTS" shall mean the Trust Agreement, this Indenture, the
Master Servicing Agreement, any Subservicing Agreement, the Administration
Agreement, the Student Loan Purchase Agreements, the Custodian Agreements, the
Guarantee Agreements, the Eligible Lender Trust Agreement, the Derivative
Products and other documents and certificates delivered in connection with any
thereof.
"BUSINESS DAY" shall mean (a) for purposes of calculating LIBOR, any day on
which banks in New York, New York and London, England are open for the
transaction of international business; and (b) for all other purposes, any day
other than a Saturday, Sunday, holiday or other day on which the New York Stock
Exchange or banks located in New York, New York or the city in which the
principal office of the Trustee is located, are authorized or permitted by law
or executive order to close.
"CERTIFICATE OF INSURANCE" shall mean any Certificate evidencing that a
Financed Eligible Loan is Insured pursuant to a Contract of Insurance.
"CERTIFICATE OF TRUST" shall mean the certificate filed with the Secretary
of State of the State establishing the Issuer under Delaware law.
"CLASS A NOTEHOLDER" shall mean the Person in whose name a Class A Note is
registered in the Note registration books of the Trustee.
"CLASS A NOTEHOLDERS' INTEREST DISTRIBUTION AMOUNT" shall mean, on any
Quarterly Distribution Date for any class of Class A Notes, the Class A-1
Noteholders' Interest Distribution Amount, the Class A-2 Noteholders' Interest
Distribution Amount, the Class A-3 Noteholders' Interest Distribution Amount,
the Class A-4 Noteholders' Interest Distribution Amount or the Class A-5
Noteholders' Interest Distribution Amount, as applicable, in each case to the
extent payable on such Quarterly Distribution Date.
"CLASS A NOTES" shall mean, collectively, the Class A-1 Notes, the Class
A-2 Notes, the Class A-3 Notes, the Class A-4 Notes and the Class A-5 Notes
secured on a senior priority to the Class B Obligations.
"CLASS A OBLIGATIONS" shall mean Class A Notes and the Derivative Products,
the priority of payment of which is equal with that of Class A Notes.
"CLASS A PERCENTAGE" shall mean, for any Quarterly Distribution Date, 100%
less the Class B Percentage.
"CLASS A PRINCIPAL DISTRIBUTION AMOUNT" shall mean, for any Quarterly
Distribution Date, the product of the Principal Distribution Amount and the
Class A Percentage.
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"CLASS A-1 MATURITY DATE" shall mean the January, 2011 Quarterly
Distribution Date.
"CLASS A-1 NOTE INTEREST SHORTFALL" shall mean, with respect to any
Quarterly Distribution Date, the excess, if any, of (a) the Class A-1
Noteholders' Interest Distribution Amount on the immediately preceding Quarterly
Distribution Date over (b) the amount of interest actually distributed to the
Class A-1 Noteholders on such preceding Quarterly Distribution Date, plus
interest on the amount of such excess interest due to the Class A-1 Noteholders,
to the extent permitted by law, at the interest rate borne by the Class A-1
Notes from such immediately preceding Quarterly Distribution Date to the current
Quarterly Distribution Date, as determined by the Administrator.
"CLASS A-1 NOTEHOLDER" shall mean the Person in whose name a Class A-1 Note
is registered in the Note registration books maintained by the Trustee.
"CLASS A-1 NOTEHOLDERS' INTEREST DISTRIBUTION AMOUNT" shall mean, with
respect to any Quarterly Distribution Date, the sum of (a) the amount of
interest accrued at the Class A-1 Rate for the related Interest Accrual Period
on the aggregate outstanding principal balances of the Class A-1 Notes
immediately prior to such Quarterly Distribution Date; and (b) the Class A-1
Note Interest Shortfall for such Quarterly Distribution Date, as based on the
actual number of days in such Interest Accrual Period divided by 360 and
rounding the resultant figure to the fifth decimal place, as determined by the
Administrator.
"CLASS A-1 NOTES" shall mean the $200,000,000 Student Loan Asset-Backed
Notes, Senior Class A-1 issued by the Issuer pursuant to this Indenture,
substantially in the form of Exhibit B-1 hereto.
"CLASS A-1 RATE" shall mean, for any Interest Accrual Period, other than
the first Interest Accrual Period, the applicable Three-Month LIBOR, plus 0.00%,
as determined by the Administrator. For the first Interest Accrual Period, the
Class A-1 Rate shall be determined by reference to the following formula:
x + [28/31 * (y-x)] plus 0.00%, as determined by the Administrator.
where:
x = Five-Month LIBOR, and
y = Six-Month LIBOR.
"CLASS A-2 MATURITY DATE" shall mean the January, 2016, Quarterly
Distribution Date.
"CLASS A-2 NOTE INTEREST SHORTFALL" shall mean, with respect to any
Quarterly Distribution Date, the excess, if any, of (a) the Class A-2
Noteholders' Interest Distribution Amount on the immediately preceding Quarterly
Distribution Date over (b) the amount of interest actually distributed to the
Class A-2 Noteholders on such preceding Quarterly Distribution Date, plus
interest on the amount of such excess interest due to the Class A-2 Noteholders,
to the extent permitted by law, at the interest rate borne by the Class A-2
Notes from such immediately
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preceding Quarterly Distribution Date to the current Quarterly Distribution
Date, as determined by the Administrator.
"CLASS A-2 NOTEHOLDER" shall mean the Person in whose name a Class A-2 Note
is registered in the Note registration books maintained by the Trustee.
"CLASS A-2 NOTEHOLDERS' INTEREST DISTRIBUTION AMOUNT" shall mean, with
respect to any Quarterly Distribution Date, the sum of (a) the amount of
interest accrued at the Class A-2 Rate for the related Interest Accrual Period
on the aggregate outstanding principal balances of the Class A-2 Notes
immediately prior to such Quarterly Distribution Date; and (b) the Class A-2
Note Interest Shortfall for such Quarterly Distribution Date, as based on the
actual number of days in such Interest Accrual Period divided by 360 and
rounding the resultant figure to the fifth decimal place, as determined by the
Administrator.
"CLASS A-2 NOTES" shall mean the $335,000,000 Student Loan Asset-Backed
Notes, Senior Class A-2 issued by the Issuer pursuant to this Indenture,
substantially in the form of Exhibit B-2 hereto.
"CLASS A-2 RATE" shall mean, for any Interest Accrual Period, other than
the first Interest Accrual Period, the applicable Three-Month LIBOR, plus 0.03%,
as determined by the Administrator. For the first Interest Accrual Period, the
Class A-2 Rate shall be determined by reference to the following formula:
x + [28/31 * (y-x)] plus 0.03%, as determined by the Administrator.
where:
x = Five-Month LIBOR, and
y = Six-Month LIBOR.
"CLASS A-3 MATURITY DATE" shall mean the July, 2016, Quarterly Distribution
Date.
"CLASS A-3 NOTE INTEREST SHORTFALL" shall mean, with respect to any
Quarterly Distribution Date, the excess, if any, of (a) the Class A-3
Noteholders' Interest Distribution Amount on the immediately preceding Quarterly
Distribution Date over (b) the amount of interest actually distributed to the
Class A-3 Noteholders on such preceding Quarterly Distribution Date, plus
interest on the amount of such excess interest due to the Class A-3 Noteholders,
to the extent permitted by law, at the interest rate borne by the Class A-3
Notes from such immediately preceding Quarterly Distribution Date to the current
Quarterly Distribution Date, as determined by the Administrator.
"CLASS A-3 NOTEHOLDER" shall mean the Person in whose name a Class A-3 Note
is registered in the Note registration books maintained by the Trustee.
"CLASS A-3 NOTEHOLDERS' INTEREST DISTRIBUTION AMOUNT" shall mean, with
respect to any Quarterly Distribution Date, the sum of (a) the amount of
interest accrued at the Class A-3 Rate for the related Interest Accrual Period
on the aggregate outstanding principal balances of the
7
Class A-3 Notes immediately prior to such Quarterly Distribution Date; and (b)
the Class A-3 Note Interest Shortfall for such Quarterly Distribution Date, as
based on the actual number of days in such Interest Accrual Period divided by
360 and rounding the resultant figure to the fifth decimal place, as determined
by the Administrator.
"CLASS A-3 NOTES" shall mean $160,000,000 Student Loan Asset-Backed Notes,
Senior Class A-3 issued by the Issuer pursuant to this Indenture, substantially
in the form of Exhibit B-3 hereto.
"CLASS A-3 RATE" shall mean, for any Interest Accrual Period, other than
the first Interest Accrual Period, the applicable Three-Month LIBOR, plus 0.09%,
as determined by the Administrator. For the first Interest Accrual Period, the
Class A-3 Rate shall be determined by reference to the following formula:
x + [28/31* (y-x)] plus 0.09%, as determined by the Administrator.
where:
x = Five-Month LIBOR, and
y = Six-Month LIBOR.
"CLASS A-4 MATURITY DATE" shall mean the January, 2021 Quarterly
Distribution Date.
"CLASS A-4 NOTE INTEREST SHORTFALL" shall mean, with respect to any
Quarterly Distribution Date, the excess, if any, of (a) the Class A-4
Noteholders' Interest Distribution Amount on the immediately preceding Quarterly
Distribution Date over (b) the amount of interest actually distributed to the
Class A-4 Noteholders on such preceding Quarterly Distribution Date, plus
interest on the amount of such excess interest due to the Class A-4 Noteholders,
to the extent permitted by law, at the interest rate borne by the Class A-4
Notes from such immediately preceding Quarterly Distribution Date to the current
Quarterly Distribution Date, as determined by the Administrator.
"CLASS A-4 NOTEHOLDER" shall mean the Person in whose name a Class A-4 Note
is registered in the Note registration books maintained by the Trustee.
"CLASS A-4 NOTEHOLDERS' INTEREST DISTRIBUTION AMOUNT" shall mean, with
respect to any Quarterly Distribution Date, the sum of (a) the amount of
interest accrued at the Class A-4 Rate for the related Interest Accrual Period
on the aggregate outstanding principal balances of the Class A-4 Notes
immediately prior to such Quarterly Distribution Date; and (b) the Class A-4
Note Interest Shortfall for such Quarterly Distribution Date, as based on the
actual number of days in such Interest Accrual Period divided by 360 and
rounding the resultant figure to the fifth decimal place, as determined by the
Administrator.
"CLASS A-4 NOTES" shall mean the $246,000,000 Student Loan Asset-Backed
Notes, Senior Class A-4 issued by the Issuer pursuant to this Indenture,
substantially in the form of Exhibit B-4.
8
"CLASS A-4 RATE" shall mean, for any Interest Accrual Period, other than
the first Interest Accrual Period, the applicable Three-Month LIBOR, plus 0.15%,
as determined by the Administrator. For the first Accrual Period, the Class A-4
Rate shall be determined by reference to the following formula:
x + [28/31 * (y-x)] plus 0.15%, as determined by the Administrator.
where:
x = Five-Month LIBOR, and
y = Six-Month LIBOR.
"CLASS A-5 MATURITY DATE" shall mean the October, 2036 Quarterly
Distribution Date.
"CLASS A-5 NOTE INTEREST SHORTFALL" shall mean, with respect to any
Quarterly Distribution Date, the excess, if any, of (a) the Class A-5
Noteholders' Interest Distribution Amount on the immediately preceding Quarterly
Distribution Date over (b) the amount of interest actually distributed to the
Class A-5 Noteholders on such preceding Quarterly Distribution Date, plus
interest on the amount of such excess interest due to the Class A-5 Noteholders,
to the extent permitted by law, at the interest rate borne by the Class A-5
Notes from such immediately preceding Quarterly Distribution Date to the current
Quarterly Distribution Date, as determined by the Administrator.
"CLASS A-5 NOTEHOLDER" shall mean the Person in whose name a Class A-5 Note
is registered in the Note registration books maintained by the Trustee.
"CLASS A-5 NOTEHOLDERS' INTEREST DISTRIBUTION AMOUNT" shall mean, with
respect to any Quarterly Distribution Date, the sum of (a) the amount of
interest accrued at the Class A-5 Rate for the related Interest Accrual Period
on the aggregate outstanding principal balances of the Class A-5 Notes
immediately prior to such Quarterly Distribution Date; and (b) the Class A-5
Note Interest Shortfall for such Quarterly Distribution Date, as based on the
actual number of days in such Interest Accrual Period divided by 360 and
rounding the resultant figure to the fifth decimal place, as determined by the
Administrator.
"CLASS A-5 NOTES" shall mean the $373,300,000 Student Loan Asset-Backed
Notes, Senior Class A-5 issued by the Issuer pursuant to this Indenture,
substantially in the form of Exhibit B-5.
"CLASS A-5 RATE" shall mean, for any Interest Accrual Period, other than
the first Interest Accrual Period, the applicable Three-Month LIBOR, plus 0.18%,
as determined by the Administrator. For the first Accrual Period, the Class A-5
Rate shall be determined by reference to the following formula:
x + [28/31 * (y-x)] plus 0.18%, as determined by the Administrator.
where:
9
x = Five-Month LIBOR, and
y = Six-Month LIBOR.
"CLASS B MATURITY DATE" shall mean the October, 2040 Quarterly Distribution
Date.
"CLASS B NOTE INTEREST SHORTFALL" shall mean, with respect to any Quarterly
Distribution Date, the excess, if any, of (a) the Class B Noteholders' Interest
Distribution Amount on the immediately preceding Quarterly Distribution Date
over (b) the amount of interest actually distributed to the Class B Noteholders
on such preceding Quarterly Distribution Date, plus interest on the amount of
such excess interest due to the Class B Noteholders, to the extent permitted by
law, at the interest rate borne by the Class B Notes from such immediately
preceding Quarterly Distribution Date to the current Quarterly Distribution
Date, as determined by the Administrator.
"CLASS B NOTEHOLDER" shall mean the Person in whose name a Class B Note is
registered in the Note registration books maintained by the Trustee.
"CLASS B NOTEHOLDERS' INTEREST DISTRIBUTION AMOUNT" shall mean, with
respect to any Quarterly Distribution Date, the sum of (a) the amount of
interest accrued at the Class B Rate for the related Interest Accrual Period on
the aggregate outstanding principal balances of the Class B Notes immediately
prior to such Quarterly Distribution Date; and (b) the Class B Note Interest
Shortfall for such Quarterly Distribution Date, as based on the actual number of
days in such Interest Accrual Period divided by 360 and rounding the resultant
figure to the fifth decimal place, as determined by the Administrator.
"CLASS B NOTES" shall mean the $40,700,000 Student Loan Asset-Backed Notes,
Subordinate Class B issued by the Issuer pursuant to this Indenture,
substantially in the form of Exhibit B-6 hereto.
"CLASS B OBLIGATIONS" shall mean Class B Notes.
"CLASS B PERCENTAGE" shall mean, for any Quarterly Distribution Date, (a)
prior to the Stepdown Date or with respect to any Quarterly Distribution Date on
which a Trigger Event is in effect, zero; or (b) on and after the Stepdown Date
and provided that no Trigger Event is in effect, a fraction expressed as a
percentage, the numerator of which is the aggregate principal balance of the
Class B Notes then Outstanding and the denominator of which is the aggregate
principal balance of all Notes then Outstanding, in each case determined on the
Determination Date by the Administrator for that Quarterly Distribution Date.
"CLASS B PRINCIPAL DISTRIBUTION AMOUNT" shall mean, for any Quarterly
Distribution Date, the product of the Principal Distribution Amount and the
Class B Percentage.
"CLASS B RATE" shall mean, for any Interest Accrual Period, other than the
first Interest Accrual Period, the applicable Three-Month LIBOR, plus 0.35%, as
determined by the Administrator. For the first Interest Accrual Period, the
Class B Rate shall be determined by reference to the following formula:
10
x + [28/31 * (y-x)] plus 0.35%, as determined by the Administrator.
where:
x = Five-Month LIBOR, and
y = Six-Month LIBOR.
"CLEARING AGENCY" shall mean an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act. The initial Clearing Agency
shall be The Depository Trust Company and the initial nominee for the Clearing
Agency shall be Cede & Co.
"CLEARING AGENCY PARTICIPANT" shall mean 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.
"CODE" shall mean the Internal Revenue Code of 1986, as amended from time
to time. Each reference to a section of the Code herein shall be deemed to
include the United States Treasury Regulations, including applicable temporary
and proposed regulations, relating to such section which are applicable to the
Notes or the use of the proceeds thereof. A reference to any specific section of
the Code shall be deemed also to be a reference to the comparable provisions of
any enactment which supersedes or replaces the Code thereunder from time to
time.
"COLLECTION FUND" shall mean the Fund by that name created in Section
5.01(b) hereof and further described in Section 5.03 hereof.
"COLLECTION PERIOD" shall mean, with respect to the first Quarterly
Distribution Date, the period beginning on July 1, 2004 and ending on December
31, 2004, and with respect to each subsequent Quarterly Distribution Date, the
Collection Period means the three calendar months immediately following the end
of the previous Collection Period, beginning January 1, 2005.
"COMMISSION" shall mean the Securities and Exchange Commission.
"CONTRACT OF INSURANCE" shall mean the contract of insurance between the
Eligible Lender and the Secretary.
"COUNTERPARTY" shall mean the counterparties to any Derivative Product
entered into pursuant to Section 3.03 hereof.
"COUNTERPARTY PAYMENTS" shall mean any payment to be made to, or for the
benefit of, the Issuer under a Derivative Product.
"CUSTODIAN AGREEMENT" shall mean, collectively, the custodian agreements
with the Master Servicer and any Subservicer or other custodian or bailee
related to Financed Eligible Loans.
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"CUTOFF DATE" shall mean (i) with respect to the initial pool of Financed
Eligible Loans, June 30, 2004; and (ii) with respect to subsequently acquired
Eligible Loans, the date on which such loans are transferred to the Trust.
"DATE OF ISSUANCE" shall mean July 28, 2004.
"DELAWARE TRUSTEE" shall mean Wilmington Trust Company, a Delaware banking
corporation, solely in its capacity as the trustee of the Issuer under the Trust
Agreement.
"DELAWARE TRUSTEE FEE" shall mean an amount equal to $5,500 per annum,
payable on each June Quarterly Distribution Date, beginning on the June 2005
Quarterly Distribution Date.
"DEPARTMENT" shall mean the United States Department of Education, an
agency of the Federal government.
"DERIVATIVE PRODUCT" shall mean any Derivative Product entered into
subsequent to the Date of Issuance subject to the provisions of Section 3.03
hereof.
"DERIVATIVE VALUE" shall mean the value of a Derivative Product, if any, to
the Counterparty, provided that such value is defined and calculated in
substantially the same manner as amounts are defined and calculated pursuant to
the applicable provisions of an ISDA Master Agreement.
"DETERMINATION DATE" shall mean, with respect to any Distribution Date or
the Monthly Servicing Payment Date, as applicable, the fourth Business Day
preceding such Distribution Date or Monthly Servicing Payment Date.
"ELIGIBLE LENDER" shall mean (i) Zions First National Bank, in its capacity
as eligible lender trustee under the terms of the Eligible Lender Trust
Agreement, and (ii) any "eligible lender," as defined in the Higher Education
Act, and which has received an eligible lender designation from the Secretary
with respect to Eligible Loans made under the Higher Education Act.
"ELIGIBLE LENDER TRUST AGREEMENT" shall mean the Eligible Lender Trust
Agreement, dated as of July 1, 2004, between the Issuer and Zions First National
Bank, as eligible lender trustee, as amended from time to time.
"ELIGIBLE LOAN" shall mean any loan made to finance post-secondary
education that is made under the Higher Education Act, provided that if, after
any reauthorization or amendment of the Higher Education Act, loans authorized
thereunder, including, without limitation, their benefits, any provisions, or
the servicing thereof, are materially different from loans so authorized prior
to such reauthorization or amendment, such loans authorized after such
reauthorization or amendment shall not constitute Eligible Loans unless a Rating
Confirmation is obtained.
"ELIGIBLE LOAN ACQUISITION CERTIFICATE" shall mean a certificate signed by
an Authorized Representative of the Issuer in substantially the form attached as
Exhibit A hereto.
12
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.
"EVENT OF BANKRUPTCY" shall mean (a) the Issuer shall have commenced a
voluntary case or other proceeding seeking liquidation, reorganization or other
relief with respect to itself or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, or shall have made a general assignment for
the benefit of creditors, or shall have declared a moratorium with respect to
its debts or shall have failed generally to pay its debts as they become due, or
shall have taken any action to authorize any of the foregoing; or (b) an
involuntary case or other proceeding shall have been commenced against the
Issuer seeking liquidation, reorganization or other relief with respect to it or
its debts under any bankruptcy, insolvency or other similar law now or hereafter
in effect or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part of its
property provided such action or proceeding is not dismissed within 60 days.
"EVENT OF DEFAULT" shall have the meaning specified in Article VI hereof.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended.
"FINANCED" or "Financing" when used with respect to Eligible Loans, shall
mean or refer to Eligible Loans (a) acquired by the Issuer with balances in the
Acquisition Fund or otherwise deposited in or accounted for in the Acquisition
Fund or otherwise constituting a part of the Trust Estate and (b) Eligible Loans
substituted or exchanged for Financed Eligible Loans, but does not include
Eligible Loans released from the lien of this Indenture and sold or transferred,
to the extent permitted by this Indenture.
"FISCAL YEAR" shall mean the fiscal year of the Issuer (initially January 1
to December 31) as otherwise established from time to time.
"FITCH" shall mean Fitch Inc., its successors and assigns.
"FIVE-MONTH LIBOR," see "One-Month LIBOR" above.
"FUNDS" shall mean each of the Funds created pursuant to Section 5.01
hereof.
"GUARANTEE" or "GUARANTEED" shall mean, with respect to an Eligible Loan,
the insurance or guarantee by a Guaranty Agency pursuant to such Guaranty
Agency's Guarantee Agreement of the maximum percentage of the principal of and
accrued interest on such Eligible Loan allowed by the terms of the Higher
Education Act with respect to such Eligible Loan at the time it was originated
and the coverage of such Eligible Loan by the federal reimbursement contracts,
providing, among other things, for reimbursement to such Guaranty Agency for
payments made by it on defaulted Eligible Loans insured or guaranteed by such
Guaranty Agency of at least the minimum reimbursement allowed by the Higher
Education Act with respect to a particular Eligible Loan.
"GUARANTEE AGREEMENTS" shall mean a guaranty or lender agreement between
the Trustee or the Eligible Lender Trustee and any Guaranty Agency, and any
amendments thereto.
13
"GUARANTY AGENCY" or "GUARANTOR" shall mean any entity authorized to
guarantee student loans under the Higher Education Act and with which the
Trustee or the Eligible Lender Trustee maintains a Guarantee Agreement.
"HIGHER EDUCATION ACT" shall mean the Higher Education Act of 1965, as
amended or supplemented from time to time, or any successor federal act and all
regulations, directives, bulletins and guidelines promulgated from time to time
thereunder.
"HIGHEST PRIORITY OBLIGATIONS" shall mean at any time when Class A
Obligations are Outstanding, the Class A Obligations, and at any time when no
Class A Obligations are Outstanding, the Class B Obligations.
"INDENTURE" shall mean this Indenture of Trust, including all supplements
and amendments hereto.
"INDEPENDENT" shall mean, when used with respect to any specified Person,
that the Person (a) is in fact independent of the Trust, any other obligor upon
the Notes, the Seller and any Affiliate of any of the foregoing Persons; (b)
does not have any direct financial interest or any material indirect financial
interest in the Trust, any such other obligor, the Seller or any Affiliate of
any of the foregoing Persons; and (c) is not connected with the Trust, any such
other obligor, the Seller or any Affiliate of any of the foregoing Persons as an
officer, employee, promoter, underwriter, placement agent, trustee, partner,
director or person performing similar functions.
"INDEPENDENT CERTIFICATE" shall mean a certificate or opinion to be
delivered to the Trustee under the circumstances described in, and otherwise
complying with, the applicable requirements of the Indenture, made by an
Independent appraiser or other expert appointed by an Issuer Order and approved
by the Trustee in the exercise of reasonable care, and such opinion or
certificate shall state that the signer has read the definition of "Independent"
in the Indenture and that the signer is Independent within the meaning thereof.
"INDEX MATURITY" shall mean (i) for One-Month LIBOR, one month, (ii) for
Two-Month LIBOR, two months, (iii) for Three-Month LIBOR, three months, (iii)
for Five-Month LIBOR, five months, (iii) for Six-Month LIBOR, six months, and
(iv) for One-Year LIBOR, one year.
"INITIAL POOL BALANCE" shall mean the Pool Balance as of the Cutoff Date
with respect to the Financed Eligible Loans acquired on the Date of Issuance
plus all other amounts on deposit in the Acquisition Fund on the Date of
Issuance, which is $1,340,924,085.
"INSURANCE" or "INSURED" or "INSURING" shall mean, with respect to an
Eligible Loan, the insuring by the Secretary (as evidenced by a Certificate of
Insurance or other document or certification issued under the provisions of the
Higher Education Act) under the Higher Education Act of 100% of the principal of
and accrued interest on such Eligible Loan.
"INTEREST ACCRUAL PERIOD" shall mean, initially, the period commencing on
the Date of Issuance to but not including January 25, 2005, and thereafter, with
respect to each Quarterly Distribution Date, the period beginning on the prior
Quarterly Distribution Date and ending on the day immediately preceding such
Quarterly Distribution Date.
14
"INTEREST BENEFIT PAYMENT" shall mean an interest payment on Eligible Loans
received pursuant to the Higher Education Act and an agreement with the federal
government, or any similar payments.
"INVESTMENT AGREEMENT" shall mean, collectively, the (i) Investment
Agreement dated July 28, 2004, between the Trustee and Trinity Plus Funding
Company, LLC, (ii) Investment Agreement dated July 28, 2004, between the Trustee
and FSA Capital Management Services LLC and (iii) any other investment agreement
approved by the Rating Agencies. The issuance by the Rating Agencies of the
ratings on the Notes on the Date of Issuance shall serve as the Rating
Confirmation required with respect to the Investment Agreements set forth in (i)
and (ii) above.
"INVESTMENT SECURITIES" shall mean:
(a) direct obligations of, or obligations on which the timely payment
of the principal of and interest on which are unconditionally and fully
guaranteed by, the United States of America;
(b) interest-bearing time or demand deposits, certificates of deposit
or other similar banking arrangements with a maturity of 12 months or less
with any bank, trust company, national banking association or other
depository institution, including those of the Trustee, provided that, at
the time of deposit or purchase such depository institution has commercial
paper which is rated "A-1+" by S&P and "F1" by Fitch and has the required
ratings from Moody's corresponding to the duration of such investment set
forth below;
(c) interest-bearing time or demand deposits, certificates of deposit
or other similar banking arrangements with a maturity of 24 months or less,
but more than 12 months, with any bank, trust company, national banking
association or other depository institution, including those of the Trustee
and any of its affiliates, provided that, at the time of deposit or
purchase such depository institution has senior debt rated "A" or higher by
S&P or higher by Fitch, if commercial paper is outstanding, commercial
paper which is rated "A-1+" by S&P and "F1" by Fitch and has the required
ratings from Moody's corresponding to the duration of such investment set
forth below;
(d) interest-bearing time or demand deposits, certificates of deposit
or other similar banking arrangements with a maturity of more than 24
months with any bank, trust company, national banking association or other
depository institution, including those of the Trustee and any of its
affiliates, provided that, at the time of deposit or purchase such
depository institution has senior debt rated "AA" or higher by S&P and "AA"
or higher by Fitch, if commercial paper is outstanding, commercial paper
which is rated "A-1+" by S&P, "P-1" by Moody's and "F1" by Fitch and has
the required ratings from Moody's corresponding to the duration of such
investment set forth below;
(e) bonds, debentures, notes or other evidences of indebtedness
issued or guaranteed by any of the following agencies: Federal Farm Credit
Banks, Federal Home Loan Mortgage Corporation; the Export-Import Bank of
the United States; the Federal
15
National Mortgage Association; the Farmers Home Administration; Federal
Home Loan Banks provided such obligation is rated "AAA" by S&P, "Aaa" by
Moody's and "AAA" by Fitch; or any agency or instrumentality of the United
States of America which shall be established for the purposes of acquiring
the obligations of any of the foregoing or otherwise providing financing
therefor;
(f) repurchase agreements and reverse repurchase agreements, other
than overnight repurchase agreements and overnight reverse repurchase
agreements, with banks, including the Trustee and any of its affiliates,
which are members of the Federal Deposit Insurance Corporation or firms
which are members of the Securities Investors Protection Corporation, in
each case whose outstanding, unsecured debt securities are rated no lower
than two subcategories below the highest rating on any series of
Outstanding Notes by S&P and Fitch, if commercial paper is outstanding,
commercial paper which is rated "A-1+" by S&P and "F1" by Fitch and has the
required ratings from Moody's corresponding to the duration of such
investment set forth below;
(g) overnight repurchase agreements and overnight reverse repurchase
agreements at least 101% collateralized by securities described in
subparagraph (a) of this definition and with a counterparty, including the
Trustee and any of its affiliates, that has senior debt rated "AA" or
higher by S&P and "A" or higher by Fitch, if commercial paper is
outstanding, commercial paper which is rated "A-1+" by S&P and "F1" by
Fitch and has the required ratings from Moody's corresponding to the
duration of such investment set forth below, or a counterparty approved in
writing by S&P, Moody's and Fitch, respectively;
(h) investment agreements or guaranteed investment contracts, which
may be entered into by and among the Issuer and/or the Trustee and any
bank, bank holding company, corporation or any other financial institution,
including the Trustee and any of its affiliates, whose outstanding (i)
commercial paper is rated "A-1+" by S&P and "F1" by Fitch for agreements or
contracts with a maturity of 12 months or less and has the required ratings
from Moody's corresponding to the duration of such investment set forth
below; (ii) unsecured long-term debt is rated no lower than two
subcategories below the highest rating on any series of Outstanding Notes
by S&P and Fitch and, if commercial paper is outstanding, commercial paper
which is rated "A-1+" by S&P and "F1" by Fitch for agreements or contracts
with a maturity of 24 months or less, but more than 12 months and has the
required ratings from Moody's corresponding to the duration of such
investment set forth below, or (iii) unsecured long-term debt which is
rated no lower than two subcategories below the highest rating on any
series of Outstanding Notes by S&P and Fitch and, if commercial paper is
outstanding, commercial paper which is rated "A-1+" by S&P and "F1" by
Fitch for agreements or contracts with a maturity of more than 24 months
and has the required ratings from Moody's corresponding to the duration of
such investment set forth below, or, in each case, by an insurance company
whose claims-paying ability is so rated;
(i) "tax exempt bonds" as defined in Section 150(a)(6) of the Code,
other than "specified private activity bonds" as defined in Section
57(a)(5)(C) of the Code, that are rated in the highest category by S&P and
Fitch for long-term or short-term debt or
16
shares of a so-called money market or mutual fund rated "AAAm/AAAm-G" or
higher by S&P, and "AA/F1+" or higher by Fitch and has the required ratings
from Moody's corresponding to the duration of such investment set forth
below, that do not constitute "investment property" within the meaning of
Section 148(b)(2) of the Code, provided that the fund has all of its assets
invested in obligations of such rating quality;
(j) commercial paper, including that of the Trustee and any of its
affiliates, which is rated in the single highest classification, "A-1+" by
S&P and "F1" by Fitch and has the required ratings from Moody's
corresponding to the duration of such investment set forth below, and which
matures not more than 270 days after the date of purchase;
(k) investments in a money market fund rated at least "AAAm" or
"AAAm-G" by S&P, "Aaa" by Moody's and "AA" or "F1" by Fitch, including
funds for which the Trustee or an affiliate thereof acts as investment
advisor or provides other similar services for a fee;
(l) any Investment Agreement; and
(m) any other investment with a Rating Confirmation from each Rating
Agency.
Each Investment Security or the provider of such Investment Security (other
than those described in paragraphs (a), (e) and (k)of this definition) shall
have the following long-term and or short-term ratings corresponding to the
duration of such investment:
MAXIMUM MATURITY MINIMUM RATINGS
----------------------- -------------------
One Month "A2" or "Prime-1"
Three Months "A1" and "Prime-1"
Six Months "Aa3" and "Prime-1"
Greater than Six Months "Aaa" and "Prime-1"
"ISDA MASTER AGREEMENT" shall mean the ISDA Master Agreement, copyright
1992, as amended from time to time, and as in effect with respect to any
Derivative Product.
"ISSUER" shall mean Nelnet Student Loan Trust 2004-3, a statutory trust
organized and existing under the laws of the State, and any successor thereto.
"ISSUER DERIVATIVE PAYMENT" shall mean any payment required to be made by
or on behalf of the Issuer due to a Counterparty pursuant to a Derivative
Product.
"ISSUER ORDER" shall mean a written order signed in the name of the Issuer
by an Authorized Representative.
"LIBOR" shall mean One-Month LIBOR, Two-Month LIBOR, Three-Month LIBOR,
Five-Month LIBOR, Six-Month LIBOR or One-Year LIBOR, as applicable.
17
"LIBOR DETERMINATION DATE" shall mean, for each Interest Accrual Period,
the second Business Day before the beginning of that Interest Accrual Period.
"LIQUIDATED FINANCED ELIGIBLE LOAN" shall mean any defaulted Financed
Eligible Loan liquidated by the Master Servicer or a Subservicer (which shall
not include any Financed Eligible Loan on which payments are received from a
Guaranty Agency) or which such Master Servicer or Subservicer has, after using
all reasonable efforts to realize upon such Financed Eligible Loan, determined
to charge off.
"LIQUIDATION PROCEEDS" shall mean, with respect to any Liquidated Financed
Eligible Loan which became a Liquidated Financed Eligible Loan during the
current Collection Period in accordance with the Master Servicer or a
Subservicer's customary servicing procedures, the moneys collected in respect of
the liquidation thereof from whatever source, other than moneys collected with
respect to any Liquidated Financed Eligible Loan which was written off in prior
Collection Periods or during the current Collection Period, net of the sum of
any amounts expended by such Master Servicer or Subservicer in connection with
such liquidation and any amounts required by law to be remitted to the obligor
on such Liquidated Financed Eligible Loan.
"MASTER PROMISSORY NOTE" shall mean a Master Promissory Note in the form
mandated by Section 432(m)(1) of the Higher Education Act, as added by Public
Law No: 105-244 Section 427, 112 Stat. 1702 (1998), as amended by Public Law No:
106-554 (enacted December 21, 2000) and as codified in 20 U.S.C. Section
1082(m)(1).
"MASTER SERVICER" shall mean National Education Loan Network, Inc. and any
other master servicer or successor master servicer selected by the Issuer,
including an affiliate of the Issuer, so long as the Issuer obtains a Rating
Confirmation as to each such other master servicer.
"MASTER SERVICING AGREEMENT" shall mean (a) the Master Servicing Agreement,
dated as of July 1, 2004, among the Issuer, the Depositor, the Administrator and
the Master Servicer, and (b) any replacement master servicing agreement among
the Issuer, the Administrator and any other Master Servicer.
"MATURITY" when used with respect to any Note, shall mean the date on which
the principal thereof becomes due and payable as therein or herein provided,
whether at its Note Final Maturity Date, by earlier prepayment or purchase, by
declaration of acceleration, or otherwise.
"MINIMUM PURCHASE AMOUNT" shall mean, on any Quarterly Distribution Date,
an amount that would be sufficient to (a) reduce the Outstanding Amount of each
class of Notes on such Quarterly Distribution Date to zero; (b) pay to the
respective Registered Owners the Class A Noteholders' Interest Distribution
Amount and the Class B Noteholders' Interest Distribution Amount payable on such
Quarterly Distribution Date; (c) pay any Servicing Fees and Carryover Servicing
Fees, Trustee Fees and Delaware Trustee Fees due and owing; and (d) pay any
Issuer Derivative Payments due and owing.
18
"MONTHLY SERVICING PAYMENT DATE" shall mean the twenty-fifth day of each
calendar month or, if such day is not a Business Day, the immediately succeeding
Business Day, commencing on August 25, 2004.
"MOODY'S" shall mean Moody's Investors Service, Inc., its successors and
assigns.
"MPN LOAN" shall mean a loan originated pursuant to the Federal Family
Education Loan Program and the Higher Education Act and evidenced by a Master
Promissory Note.
"NOTEHOLDER" shall mean, (a) with respect to a book-entry Note, the Person
who is the owner of such book-entry Note, as reflected on the books of the
Clearing Agency, or on the books of a Person maintaining an account with such
Clearing Agency (directly as a Clearing Agency Participant or as an indirect
participant, in each case in accordance with the rules of such Clearing Agency);
and (b) with respect to Notes held in definitive form pursuant to Section 2.09
hereof, the Person in whose name a Note is registered in the Note registration
books of the Trustee.
"NOTE FINAL MATURITY DATE" for a class of Notes shall mean the Class A-1
Maturity Date, the Class A-2 Maturity Date, the Class A-3 Maturity Date, the
Class A-4 Maturity Date, the Class A-5 Maturity Date or the Class B Maturity
Date, as applicable.
"NOTES" shall mean, collectively, the Class A Notes and the Class B Notes.
"OBLIGATIONS" shall mean, collectively, the Class A Obligations and the
Class B Obligations.
"ONE-MONTH LIBOR," "TWO-MONTH LIBOR" "THREE-MONTH LIBOR," "FIVE-MONTH
LIBOR" "SIX-MONTH LIBOR" and "ONE-YEAR LIBOR" shall mean, with respect to any
Interest Accrual Period, the London interbank offered rate for deposits in U.S.
dollars having the applicable Index Maturity as it appears on Telerate Page 3750
as of 11:00 a.m., London time, on the related LIBOR Determination Date as
determined by the Administrator. If this rate does not appear on Telerate Page
3750, the rate for that day will be determined on the basis of the rates at
which deposits in U.S. dollars, having the index maturity and in a principal
amount of not less than U.S. $1,000,000, are offered at approximately 11:00
a.m., London time, on that LIBOR Determination Date, to prime banks in the
London interbank market by the Reference Banks. The Administrator or the
Trustee, as applicable, will request the principal London office of each
Reference Bank to provide a quotation of its rate. If the Reference Banks
provide at least two quotations, the rate for that day will be the arithmetic
mean of the quotations. If the Reference Banks provide fewer than two
quotations, the rate for that day will be the arithmetic mean of the rates
quoted by major banks in New York City, selected by the Administrator or the
Trustee, as applicable, at approximately 11:00 a.m., New York time, on that
LIBOR Determination Date, for loans in U.S. dollars to leading European banks
having the Index Maturity and in a principal amount of not less than U.S.
$1,000,000. If the banks selected as described above are not providing
quotations, One-Month LIBOR, Two-Month LIBOR, Three-Month LIBOR, Five-Month
LIBOR, Six-Month LIBOR or One-Year LIBOR, as the case may be, in effect for the
applicable Interest Accrual Period will be One-Month LIBOR, Two-Month LIBOR,
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Three-Month LIBOR, Five-Month LIBOR, Six-Month LIBOR or One-Year LIBOR, as the
case may be, in effect for the previous Interest Accrual Period.
"ONE-YEAR LIBOR," see "One-Month LIBOR" above.
"OPINION OF COUNSEL" shall mean (a) with respect to the Trust, one or more
written opinions of counsel who may, except as otherwise expressly provided in
the Indenture, be employees of or counsel to the Delaware Trustee, the Trust,
the Seller or an Affiliate of the Seller and who shall be satisfactory to the
Trustee, and which opinion or opinions shall be addressed to the Trustee as
Trustee, shall comply with any applicable requirements of the Trust Indenture
Act and shall be in form and substance satisfactory to the Trustee; and (b) with
respect to the Seller, the Administrator, the Master Servicer or a Subservicer,
one or more written opinions of counsel who may be an employee of or counsel to
the Seller, the Administrator, the Master Servicer or a Subservicer, which
counsel shall be acceptable to the Trustee and the Delaware Trustee.
"OPTIONAL PURCHASE DATE" shall have the meaning set forth in Section 10.03
hereof.
"OUTSTANDING" shall mean, when used in connection with any Note, a Note
which has been executed and delivered pursuant to this Indenture which at such
time remains unpaid as to principal or interest, excluding Notes which have been
replaced pursuant to Section 2.03 or 2.04 hereof and when used in connection
with a Derivative Product, a Derivative Product which has not expired or been
terminated, unless provision has been made for such payment pursuant to Section
10.02 hereof.
"OUTSTANDING AMOUNT" shall mean the aggregate principal amount of all Notes
Outstanding at the date of determination or, if the context so requires, the
aggregate principal amount of one or more classes of Class A Notes or Class B
Notes Outstanding at the date of determination.
"PERSON" shall mean an individual, corporation, partnership, joint venture,
association, joint stock company, trust, limited liability company,
unincorporated organization or government or agency, or political subdivision
thereof.
"POOL BALANCE" shall mean as of any date the aggregate principal balance of
the Financed Eligible Loans on such date (including accrued interest thereon to
the extent such interest is expected to be capitalized) and any moneys on
deposit in the Acquisition Fund, after giving effect to the following, without
duplication: (a) all payments received by the Issuer through such date from or
on behalf of obligors on such Financed Eligible Loans; (b) all Purchase Amounts
on Financed Eligible Loans received by the Issuer through such date from the
Seller, the Master Servicer or a Subservicer; (c) all Liquidation Proceeds and
Realized Loss on Financed Eligible Loans liquidated through such date; (d) the
aggregate amount of adjustments to balances of Financed Eligible Loans permitted
to be effected by the Master Servicer or a Servicer under the Master Servicing
Agreement or its related Subservicing Agreement, if any, recorded through such
date; and (e) the aggregate amount by which reimbursements by Guarantors of the
unpaid principal balance of defaulted Financed Eligible Loans through such date
are reduced from 100% to 98% or other applicable percentage, as required by the
risk sharing provisions of the Higher
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Education Act. The Pool Balance shall be calculated by the Administrator and
certified to the Trustee, upon which the Trustee may conclusively rely with no
duty to further examine or determine such information.
"PRINCIPAL DISTRIBUTION AMOUNT" shall mean, as determined by the
Administrator, (a) with respect to the initial Quarterly Distribution Date, the
amount by which the sum of the Outstanding Amount of the Notes exceeds the
Adjusted Pool Balance as of the last day of the initial Collection Period; and
(b) with respect to each subsequent Quarterly Distribution Date, the excess of
(i) the Adjusted Pool Balance as of the last day of the Collection Period
preceding the related Collection Period, less (ii) the Adjusted Pool Balance as
of the last day of the related Collection Period, plus the amount, if any, of
the Principal Distribution Amount due on the prior Quarterly Distribution Date
that was not paid. Further, on the Note Final Maturity Date for a class of
Notes, the Principal Distribution Amount on that date also shall include the
amount needed to reduce the Outstanding principal amount of such class of Notes
to zero.
"PRINCIPAL OFFICE" shall mean the principal office of the party indicated,
as set forth in Section 9.01 hereof or elsewhere in this Indenture.
"PRIORITY TERMINATION PAYMENT" shall mean, with respect to a Derivative
Product, any termination payment payable by the Issuer under such Derivative
Product relating to an early termination of such Derivative Product by the
Counterparty, as the non-defaulting party, following (i) a monthly payment
default by the Issuer thereunder (ii) the occurrence of an Event of Default
specified in Section 6.01(d) hereof or (iii) the Trustee's taking any action
hereunder to liquidate the Trust Estate following an Event of Default and
acceleration of the Notes pursuant to Section 6.04 hereof.
"PROGRAM" shall mean the Sponsor's program for the origination and the
purchase of Eligible Loans, as the same may be modified from time to time.
"PURCHASE AMOUNT" with respect to any Financed Eligible Loan shall mean the
amount required to prepay in full such Financed Eligible Loan under the terms
thereof including all accrued interest thereon and any unamortized premium, it
being acknowledged that any accrued and unpaid Interest Subsidy Payments or
Special Allowance Payments will continue to be payable to the Trustee and
constitute part of the Trust Estate.
"QUARTERLY DISTRIBUTION DATE" shall mean the 25th day of January, April,
July and October, or, if such day is not a Business Day, the immediately
succeeding Business Day, commencing on January 25, 2005.
"RATING" shall mean one of the rating categories of Fitch, Moody's and S&P
or any other Rating Agency, provided Fitch, Moody's and S&P or any other Rating
Agency, as the case may be, is currently rating the Notes.
"RATING AGENCY" shall mean each of Fitch, Moody's and S&P and their
successors and assigns or any other rating agency requested by the Issuer to
maintain a Rating on any of the Notes.
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"RATING CONFIRMATION" shall mean a letter from each Rating Agency then
providing a Rating for any of the Notes, confirming that a proposed action,
failure to act, or other event specified therein will not, in and of itself,
result in a downgrade of any of the Ratings then applicable to the Notes, or
cause any Rating Agency to suspend, withdraw or qualify the Ratings then
applicable to the Notes.
"REALIZED LOSS" shall mean the excess of the principal balance (including
any interest that had been or had been expected to be capitalized) of any
Liquidated Financed Eligible Loan over Liquidation Proceeds with respect to such
Financed Eligible Loan to the extent allocable to principal (including any
interest that had been or had been expected to be capitalized).
"RECORD DATE" shall mean, with respect to a Distribution Date, the close of
business on the day preceding such Distribution Date.
"REFERENCE BANKS" shall mean, with respect to a determination of LIBOR for
any Interest Accrual Period by the Administrator, four major banks in the London
interbank market selected by the Administrator.
"REGISTERED OWNER" shall mean any Noteholder, and, with respect to a
Derivative Product, any Counterparty, unless the context otherwise requires.
"REGULATIONS" shall mean the Regulations promulgated from time to time by
the Secretary or any Guaranty Agency guaranteeing Financed Eligible Loans.
"RESERVE FUND" shall mean the Fund by that name created in Section 5.01(c)
hereof and further described in Section 5.04 hereof, including any Accounts and
Subaccounts created therein.
"S&P" shall mean Standard & Poor's Ratings Group, a Division of The
McGraw-Hill Companies, Inc., its successors and assigns.
"SECRETARY" shall mean the Secretary of the United States Department of
Education or any successor to the pertinent functions thereof under the Higher
Education Act.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"SECURITIES DEPOSITORY" or "DEPOSITORY" shall mean The Depository Trust
Company and its successors and assigns or if, (a) the then Securities Depository
resigns from its functions as depository of the Notes or (b) the Issuer
discontinues use of the Securities Depository, any other securities depository
which agrees to follow the procedures required to be followed by a securities
depository in connection with the Notes and which is selected by the Issuer with
the consent of the Trustee.
"SELLER" shall mean Nelnet Student Loan Funding, LLC, and its successors
and assigns.
"SERVICER'S REPORT" shall mean the servicer reports to be furnished to the
Issuer by the Master Servicer or a Subservicer pursuant to the Master Servicing
Agreement or its related Subservicing Agreement.
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"SERVICING FEE" shall mean the fees and expenses due to the Master Servicer
and any Subservicer under the terms of the Master Servicing Agreement or its
related Subservicing Agreement and the fees and expenses due to any custodian
under the terms of a Custodian Agreement.
"SIX-MONTH LIBOR," see "One-Month LIBOR" above.
"SPECIAL ALLOWANCE PAYMENTS" shall mean the special allowance payments
authorized to be made by the Secretary by Section 438 of the Higher Education
Act, or similar allowances, if any, authorized from time to time by federal law
or regulation.
"SPECIFIED RESERVE FUND BALANCE" shall mean, with respect to any Quarterly
Distribution Date, the greater of (a) 0.25% of the Pool Balance as of the close
of business on the last day of the related Collection Period; and (b) 0.150% of
the Initial Pool Balance, provided that in no event will such balance exceed the
sum of the outstanding principal amount of the Notes and provided further, that
such Specified Reserve Fund Balance may be reduced with a Rating Confirmation.
"SPONSOR" shall mean Nelnet Student Loan Funding, LLC, and its successors
and assigns and any other Person or Persons as may become a Sponsor pursuant to
the terms of the Trust Agreement.
"STATE" shall mean the State of Delaware.
"STEPDOWN DATE" shall mean the earlier to occur of (a) the Quarterly
Distribution Date in July of 2010 and (b) the first date on which all of the
Class A Notes are no longer Outstanding.
"STUDENT LOAN PURCHASE AGREEMENT" shall mean, collectively, (a) the Loan
Purchase Agreement, dated as of July 1, 2004, between the Issuer and the Seller
and (b) each additional student loan purchase agreement entered into between the
Issuer and the Seller for the purchase of Eligible Loans which constitute
"add-on consolidation loans."
"SUBACCOUNT" shall mean any of the subaccounts which may be created and
established within any Account by this Indenture.
"SUBSERVICER" shall mean Nelnet, Inc., Sallie Mae Servicing L.P. and any
other additional subservicer or successor subservicer selected by the Issuer,
including an affiliate of the Issuer, so long as the Issuer obtains a Rating
Confirmation as to each such other subservicer.
"SUBSERVICING AGREEMENT" shall mean (a) the Nelnet, Inc. Subservicing
Agreement, dated as of July 1, 2004, between the Master Servicer and Nelnet,
Inc., as subservicer, and (b) any subservicing agreement between the Master
Servicer and any other Subservicer.
"SUPPLEMENTAL INDENTURE" shall mean an agreement supplemental hereto
executed pursuant to Article VIII hereof.
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"TELERATE PAGE 3750" shall mean the display page so designated on the
Telerate Service (or such other page as may replace that page on that service
for the purpose of displaying comparable rates or prices).
"THREE-MONTH LIBOR," see "One-Month LIBOR" above.
"TERMINATION PAYMENT" shall mean, with respect to a Derivative Product, any
termination payment payable by the Issuer under such Derivative Product relating
to an early termination of such Derivative Product by the Counterparty, as the
non-affected party or non-defaulting party, after the occurrence of a
termination event or event of default specified in such Derivative Product,
including any Priority Termination Payment.
"TRIGGER EVENT" shall mean, on any Quarterly Distribution Date while any of
the Class A Notes are Outstanding, that (a) the Outstanding Amount of the Notes,
after giving effect to distributions to be made on that Quarterly Distribution
Date, would exceed the Adjusted Pool Balance as of the end of the related
Collection Period or (b) the Student Loans have not been sold pursuant to
Section 10.03 or 10.04 hereof after the Pool Balance falls below 10% of the
Initial Pool Balance.
"TRUST" shall mean the Nelnet Student Loan Trust 2004-3.
"TRUST AGREEMENT" shall mean the Trust Agreement dated as of July 1, 2004
by and between the Sponsor and the Delaware Trustee, as may be amended pursuant
to the terms thereof.
"TRUST AUCTION DATE" shall have the meaning set forth in Section 10.04
hereof.
"TRUST ESTATE" shall mean the property described as such in the granting
clauses hereto.
"TRUST INDENTURE ACT" shall mean the Trust Indenture Act of 1939, as
amended, and as in force at the date as of which this Indenture was executed,
except as provided in Section 8.05 hereof.
"TRUSTEE" shall mean Zions First National Bank, acting in its capacity as
Trustee under this Indenture, or any successor trustee designated pursuant to
this Indenture.
"TRUSTEE FEE" shall mean an amount equal to the annual amount set forth in
the Trustee Fee Letter, dated July 1, 2004. Such fee shall be in satisfaction of
the Trustee's compensation as trustee under this Indenture and as eligible
lender trustee under the Eligible Lender Trust Agreement.
"TWO-MONTH LIBOR," see "One-Month LIBOR" below.
Words importing the masculine gender include the feminine gender, and words
importing the feminine gender include the masculine gender. Words importing
persons include firms, associations and corporations. Words importing the
singular number include the plural number and vice versa. Additional terms are
defined in the body of this Indenture.
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ARTICLE II
NOTE DETAILS AND FORM OF NOTES
SECTION 2.01. NOTE DETAILS. The Notes, together with the Trustee's
certificate of authentication, shall be in substantially the forms set forth in
Exhibit B hereto, with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture and may have
such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may, consistently herewith, be determined by the
officers executing the Notes, as evidenced by their execution of the Notes. Any
portion of the text of any Note may be set forth on the reverse thereof, with an
appropriate reference thereto on the face of the Note.
The definitive Notes shall be typewritten, printed, lithographed or
engraved or produced by any combination of these methods (with or without steel
engraved borders), all as determined by the Authorized Representatives executing
such Notes, as evidenced by their execution of such Notes.
Each Note shall be dated the date of its authentication. The terms of the
Notes set forth in Exhibit B hereto are part of the terms of this Indenture.
SECTION 2.02. EXECUTION, AUTHENTICATION AND DELIVERY OF NOTES. The Notes
shall be executed in the name and on behalf of the Issuer by the manual or
facsimile signature of an Authorized Representative. Any Note may be signed
(manually or by facsimile) or attested on behalf of the Issuer by any person
who, at the date of such act, shall hold the proper office or position,
notwithstanding that at the date of authentication, issuance or delivery, such
person may have ceased to hold such office or position.
The Trustee shall upon Issuer Order authenticate and deliver Notes for
original issue in an aggregate principal amount of $1,355,000,000. The aggregate
principal amount of Notes outstanding at any time may not exceed such amount
except as provided in Section 2.04 hereof.
Each Note shall be dated the date of its authentication. The Notes shall be
issuable as registered Notes in minimum denominations of $5,000 and in integral
multiples of $1,000 in excess thereof (the "Authorized Denominations").
No Note shall be entitled to any benefit under this Indenture or be valid
or obligatory for any purpose, unless there appears on such Note a certificate
of authentication substantially in the form provided for in Section 2.05 hereof.
SECTION 2.03. REGISTRATION, TRANSFER AND EXCHANGE OF NOTES; PERSONS TREATED
AS REGISTERED OWNERS. The Issuer shall cause books for the registration and for
the transfer of the Notes as provided in this Indenture to be kept by the
Trustee which is hereby appointed the transfer agent of the Issuer for the
Notes. Notwithstanding such appointment and with the prior written consent of
the Issuer, the Trustee is hereby authorized to make any arrangements with other
institutions which it deems necessary or desirable in order that such
institutions may perform the duties of transfer agent for the Notes. Upon
surrender for transfer of any Note at the Principal Office of the Trustee, duly
endorsed for transfer or accompanied by an assignment duly
25
executed by the Registered Owner or his attorney duly authorized in writing, the
Issuer shall execute and the Trustee shall authenticate and deliver in the name
of the transferee or transferees a new fully registered Note or Notes of the
same interest rate and for a like class and aggregate principal amount of the
same maturity.
Notes may be exchanged at the Principal Office of the Trustee for a like
aggregate principal amount of fully registered Notes of the same class, interest
rate and maturity in Authorized Denominations. The Issuer shall execute and the
Trustee shall authenticate and deliver Notes which the Registered Owner making
the exchange is entitled to receive, bearing numbers not contemporaneously
outstanding. The execution by the Issuer of any fully registered Note of any
Authorized Denomination shall constitute full and due authorization of such
denomination and the Trustee shall thereby be authorized to authenticate and
deliver such fully registered Note.
As to any Note, the person in whose name the same shall be registered shall
be deemed and regarded as the absolute owner thereof for all purposes, and
payment of either principal or interest on any fully registered Note shall be
made only to or upon the written order of the Registered Owner thereof or his
legal representative but such registration may be changed as hereinabove
provided. All such payments shall be valid and effectual to satisfy and
discharge the liability upon such Note to the extent of the sum or sums paid.
Each Registered Owner and each transferee of a Note shall be deemed to
represent and warrant that either (a) it is not acquiring the Note directly or
indirectly for, or on behalf of, an ERISA plan or any entity whose underlying
assets are deemed to be plan assets of such ERISA plan; or (b)(i) the
acquisition and holding of the Notes will not result in a nonexempt prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code or similar
law and (ii) if the Notes are subsequently deemed to be "plan assets" pursuant
to the regulations set forth at 29 C.F.R. Section 2510.3-101, it will promptly
dispose of the Notes.
The Trustee shall require the payment by any Registered Owner requesting
exchange or transfer of any tax or other governmental charge required to be paid
with respect to such exchange or transfer. The applicant for any such transfer
or exchange may be required to pay all taxes and governmental charges in
connection with such transfer or exchange, other than exchanges pursuant to
Section 2.07 hereof.
SECTION 2.04. LOST, STOLEN, DESTROYED AND MUTILATED NOTES. Upon receipt by
the Trustee of evidence satisfactory to it of the ownership of and the loss,
theft, destruction or mutilation of any Note and, in the case of a lost, stolen
or destroyed Note, of indemnity satisfactory to it, and upon surrender and
cancellation of the Note, if mutilated, (a) the Issuer shall execute, and the
Trustee shall authenticate and deliver, a replacement Note of the same interest
rate, maturity and denomination in lieu of such lost, stolen, destroyed or
mutilated Note or (b) if such lost, stolen, destroyed or mutilated Note shall
have matured within 15 days be due and payable, in lieu of executing and
delivering a new Note as aforesaid, the Issuer may pay such Note. Any such new
Note shall bear a number not contemporaneously outstanding. The applicant for
any such new Note may be required to pay all taxes and governmental charges and
all expenses and charges of the Issuer and of the Trustee in connection with the
issuance of such Note. All Notes shall be held and owned upon the express
condition that, to the extent permitted
26
by law, the foregoing conditions are exclusive with respect to the replacement
and payment of mutilated, destroyed, lost or stolen Notes, negotiable
instruments or other securities.
SECTION 2.05. TRUSTEE'S AUTHENTICATION CERTIFICATE. The Trustee's
authentication certificate upon any Notes shall be substantially in the form
attached to the Notes. No Note shall be secured hereby or entitled to the
benefit hereof, or shall be valid or obligatory for any purpose, unless a
certificate of authentication, substantially in such form, has been duly
executed by the Trustee; and such certificate of the Trustee upon any Note shall
be conclusive evidence and the only competent evidence that such Note has been
authenticated and delivered hereunder. The Trustee's certificate of
authentication shall be deemed to have been duly executed by it if manually
signed by an authorized officer or signatory of the Trustee, but it shall not be
necessary that the same person sign the certificate of authentication on all of
the Notes issued hereunder.
SECTION 2.06. CANCELLATION AND DESTRUCTION OF NOTES BY THE TRUSTEE.
Whenever any Outstanding Notes shall be delivered to the Trustee for the
cancellation thereof pursuant to this Indenture, upon payment of the principal
amount and interest represented thereby, or for replacement pursuant to Section
2.03 hereof, such Notes shall be promptly cancelled and, within a reasonable
time, cremated or otherwise destroyed by the Trustee and counterparts of a
certificate of destruction evidencing such cremation or other destruction shall
be furnished by the Trustee to the Issuer.
SECTION 2.07. TEMPORARY NOTES. Pending the preparation of definitive Notes,
the Issuer may execute and the Trustee shall authenticate and deliver temporary
Notes. Temporary Notes shall be issuable as fully registered Notes without
coupons, of any denomination, and substantially in the form of the definitive
Notes but with such omissions, insertions and variations as may be appropriate
for temporary Notes, all as may be determined by the Issuer. Every temporary
Note shall be executed by the Issuer and be authenticated by the Trustee upon
the same conditions and in substantially the same manner, and with like effect,
as the definitive Notes. As promptly as practicable the Issuer shall execute and
shall furnish definitive Notes and thereupon temporary Notes may be surrendered
in exchange therefor without charge at the principal office of the Trustee, and
the Trustee shall authenticate and deliver in exchange for such temporary Notes
a like aggregate principal amount of definitive Notes. Until so exchanged the
temporary Notes shall be entitled to the same benefits under this Indenture as
definitive Notes.
SECTION 2.08. ISSUANCE OF NOTES. The Issuer shall have the authority, upon
complying with the provisions of this Article, to issue and deliver the Notes
which shall be secured by the Trust Estate. In addition, the Issuer may enter
into any Derivative Products it deems necessary or desirable with respect to any
or all of the Notes.
SECTION 2.09. DEFINITIVE NOTES. If (a) the Administrator advises the
Trustee in writing that the Clearing Agency is no longer willing or able to
discharge its responsibilities with respect to the Notes, and the Administrator
is unable to locate a successor; (b) the Administrator at its option, with the
consent of the applicable Clearing Agency Participants, advises the Trustee in
writing that it elects to terminate the book-entry system through the Clearing
Agency; or (c) after the occurrence of an Event of Default, or a default by the
Master Servicer, a Subservicer or the Administrator under the Master Servicing
Agreement, its related Servicing Agreement or the
27
Administration Agreement, respectively, Noteholders representing beneficial
interests aggregating at least a majority of the Outstanding Amount of the Notes
advise the Clearing Agency (which shall then notify the Trustee) in writing that
the continuation of a book-entry system through the Clearing Agency is no longer
in the best interests of the Noteholders and the applicable Clearing Agency
Participants consent to the termination of the book-entry system through the
Clearing Agency, then the Trustee shall cause the Clearing Agency to notify all
Noteholders, through the Clearing Agency, of the occurrence of any such event
and of the availability of definitive Notes to Noteholders requesting the same.
Upon surrender to the Trustee of the typewritten Notes representing the
book-entry Notes by the Clearing Agency, accompanied by registration
instructions, the Issuer shall execute and the Trustee shall authenticate the
definitive Notes in accordance with the instructions of the Clearing Agency.
None of the Issuer, the Note Registrar or the Trustee shall be liable for any
delay in delivery of such instructions and may conclusively rely on, and shall
be protected in relying on, such instructions. Upon the issuance of definitive
Notes, the Trustee shall recognize the holders of the definitive Notes as
Registered Owners.
SECTION 2.10. PAYMENT OF PRINCIPAL AND INTEREST.
(a) The Notes shall accrue interest as provided in the forms of Class
A-1 Notes, Class A-2 Notes, Class A-3 Notes, Class A-4 Notes, Class A-5
Notes and the Class B Notes set forth in Exhibits B-1, B-2, B-3, B-4, B-5
and B-6, respectively, hereto. Such interest shall be payable with respect
to each class of Notes on each Quarterly Distribution Date as specified in
Section 5.03(c) hereof, subject to Section 4.01 hereof. Any installment of
interest or principal, if any, payable on any Note which is punctually paid
or duly provided for by the Issuer on the Quarterly Distribution Date shall
be paid to the Person in whose name such Note is registered on the Record
Date by check mailed first-class, postage prepaid to such Person's address
as it appears on the records of the Trustee on such Record Date, except
that, unless definitive Notes have been issued pursuant to Section 2.09
hereof, with respect to Notes registered on the Record Date in the name of
the nominee of the Clearing Agency (initially, such nominee to be Cede &
Co.), payment shall be made by wire transfer in immediately available funds
to the account designated by such nominee and except for the final
installment of principal payable with respect to such Note on a Quarterly
Distribution Date or on the Note Final Maturity Date for such Note which
shall be payable as provided below.
(b) The principal of each Note shall be payable in installments on
each Quarterly Distribution Date as provided in Section 5.03(c) hereof.
Notwithstanding the foregoing, the entire unpaid principal amount of each
class of the Notes shall be due and payable, if not previously paid, on the
Note Final Maturity Date for such class of Notes and on the date on which
an Event of Default shall have occurred and be continuing if the Trustee or
the Registered Owners of the Notes representing not less than a majority of
the Outstanding Amount of the Notes have declared the Notes to be
immediately due and payable in the manner provided in Section 6.02 hereof.
The Trustee shall notify the Person in whose name a Note is registered at
the close of business on the Record Date preceding the Quarterly
Distribution Date on which the Issuer expects that the final installment of
principal of and interest on such Note will be paid. Such notice shall be
mailed or transmitted by facsimile prior to such final Quarterly
Distribution Date and
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shall specify that such final installment will be payable only upon
presentation and surrender of such Note and shall specify the place where
such Note may be presented and surrendered for payment of such installment.
ARTICLE III
PARITY AND PRIORITY OF LIEN; OTHER OBLIGATIONS;
AND DERIVATIVE PRODUCTS
SECTION 3.01. PARITY AND PRIORITY OF LIEN. The provisions, covenants and
agreements herein set forth to be performed by or on behalf of the Issuer shall
be for the equal benefit, protection and security of the Registered Owners of
any and all of the Obligations, all of which, shall be of equal rank without
preference, priority or distinction of any of the Obligations over any other
thereof, except as expressly provided in this Indenture with respect to certain
payment and other priorities.
SECTION 3.02. OTHER OBLIGATIONS. The Available Funds and other moneys,
Financed Eligible Loans, securities, evidences of indebtedness, interests,
rights and properties pledged under this Indenture are and will be owned by the
Issuer free and clear of any pledge, lien, charge or encumbrance thereon or with
respect thereto prior to, of equal rank with or subordinate to the respective
pledges created by this Indenture, except as otherwise expressly provided
herein, and all action on the part of the Issuer to that end has been duly and
validly taken. If any Financed Eligible Loan is found to have been subject to a
lien at the time such Financed Eligible Loan was acquired, the Issuer shall
cause such lien to be released, shall purchase such Financed Eligible Loan from
the Trust Estate for a purchase price equal to its principal amount plus any
unamortized premium, if any, and interest accrued thereon or shall replace such
Financed Eligible Loan with another Eligible Loan with substantially identical
characteristics which replacement Eligible Loan shall be free and clear of liens
at the time of such replacement. Except as otherwise provided herein, the Issuer
shall not create or voluntarily permit to be created any debt, lien or charge on
the Financed Eligible Loans which would be on a parity with, subordinate to, or
prior to the lien of this Indenture; shall not do or omit to do or suffer to be
done or omitted to be done any matter or things whatsoever whereby the lien of
this Indenture or the priority of such lien for the Obligations hereby secured
might or could be lost or impaired; and will pay or cause to be paid or will
make adequate provisions for the satisfaction and discharge of all lawful claims
and demands which if unpaid might by law be given precedence to or any equality
with this Indenture as a lien or charge upon the Financed Eligible Loans;
provided, however, that nothing in this Section shall require the Issuer to pay,
discharge or make provision for any such lien, charge, claim or demand so long
as the validity thereof shall be by it in good faith contested, unless thereby,
in the opinion of the Trustee, the same will endanger the security for the
Obligations; and provided further that any subordinate lien hereon (i.e.,
subordinate to the lien securing the Class A Obligations and the Class B
Obligations) shall be entitled to no payment from the Trust Estate, nor may any
remedy be exercised with respect to such subordinate lien against the Trust
Estate until all Obligations have been paid or deemed paid hereunder.
SECTION 3.03. DERIVATIVE PRODUCTS; COUNTERPARTY PAYMENTS; ISSUER DERIVATIVE
PAYMENTS. The Issuer hereby authorizes and directs the Trustee to acknowledge
and agree to
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any Derivative Product hereafter entered into by the Issuer and a Counterparty
under which (a) the Issuer may be required to make, from time to time, payments
to a Counterparty and (b) the Trustee may receive, from time to time,
Counterparty Payments for the account of the Issuer. No Derivative Product shall
be entered into subsequent to the Date of Issuance unless the Trustee shall have
received a Rating Confirmation from each Rating Agency that such Derivative
Product will not adversely affect the Rating on any of the Notes.
ARTICLE IV
PROVISIONS APPLICABLE TO THE NOTES;
DUTIES OF THE ISSUER
SECTION 4.01. PAYMENT OF PRINCIPAL AND INTEREST. The Issuer covenants that
it will promptly pay, but solely from the Trust Estate, the principal of and
interest, if any, on each and every Obligation issued under the provisions of
this Indenture at the places, on the dates and in the manner specified herein
and in said Obligations according to the true intent and meaning thereof. The
Obligations shall be and are hereby declared to be payable from and equally
secured, except as specifically provided in this Indenture with respect to
certain payment and other priorities, by an irrevocable first lien on and pledge
of the properties constituting the Trust Estate, subject to the application
thereof as permitted by this Indenture, but in no event shall the Registered
Owners or any Counterparty have any right to possession or control of any
Financed Eligible Loans, which shall be held only by the Trustee or its agent or
bailee.
SECTION 4.02. COVENANTS AS TO ADDITIONAL CONVEYANCES. At any and all times,
the Issuer will duly execute, acknowledge and deliver, or will cause to be done,
executed and delivered, all and every such further acts, conveyances, transfers
and assurances in law as the Trustee shall reasonably require for the better
conveying, transferring and pledging and confirming unto the Trustee, all and
singular, the properties constituting the Trust Estate hereby transferred and
pledged, or intended so to be transferred and pledged.
SECTION 4.03. FURTHER COVENANTS OF THE ISSUER.
(a) The Issuer will cause financing statements and continuation
statements with respect thereto at all times to be filed in the office of
the Secretary of State of the State and any other jurisdiction necessary to
perfect and maintain the security interest granted by the Issuer hereunder.
(b) The Issuer will duly and punctually keep, observe and perform each
and every term, covenant and condition on its part to be kept, observed and
performed, contained in this Indenture and the other agreements to which
the Issuer is a party pursuant to the transactions contemplated herein,
including but not limited to the Basic Documents to which it is a party,
the Guarantee Agreements and the Certificate of Insurance, and will
punctually perform all duties required by the Trust Agreement and the laws
of the State.
(c) The Issuer shall be operated on the basis of its Fiscal Year.
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(d) The Issuer shall cause to be kept full and proper books of records
and accounts, in which full, true and proper entries will be made of all
dealings, business and affairs of the Issuer which relate to the Notes and
any Derivative Product.
(e) The Issuer, upon written request of the Trustee, will permit at
all reasonable times the Trustee or its agents, accountants and attorneys,
to examine and inspect the property, books of account, records, reports and
other data relating to the Financed Eligible Loans, and will furnish the
Trustee such other information as it may reasonably request. The Trustee
shall be under no duty to make any such examination unless requested in
writing to do so by the Registered Owners of 66% in collective aggregate
principal amount of the Notes at the time Outstanding, and unless such
Registered Owners shall have offered the Trustee security and indemnity
satisfactory to it against any costs, expenses and liabilities which might
be incurred thereby.
(f) The Issuer shall cause an annual audit to be made by an
independent auditing firm of national reputation and file one copy thereof
with the Trustee and each Rating Agency within 150 days of the close of
each Fiscal Year. The Trustee shall be under no obligation to review or
otherwise analyze such audit.
(g) The Issuer covenants that all Financed Eligible Loans upon receipt
thereof shall be delivered to the Trustee or its agent or bailee to be held
pursuant to this Indenture and pursuant to the Master Servicing Agreement,
a Subservicing Agreement or a Custodian Agreement.
(h) Notwithstanding anything to the contrary contained herein, except
upon the occurrence and during the continuance of an Event of Default
hereunder, the Issuer hereby expressly reserves and retains the privilege
to receive and, subject to the terms and provisions of this Indenture, to
keep or dispose of, claim, bring suits upon or otherwise exercise, enforce
or realize upon its rights and interest in and to the Financed Eligible
Loans and the proceeds and collections therefrom, and neither the Trustee
nor any Registered Owner shall in any manner be or be deemed to be an
indispensable party to the exercise of any such privilege, claim or suit
and the Trustee shall be under no obligation whatsoever to exercise any
such privilege, claim or suit; provided, however, that the Trustee shall
have and retain possession or control of the Financed Eligible Loans
pursuant to Section 5.02 hereof (which Financed Eligible Loans may be held
by the Trustee's agent or bailee) so long as such loans are subject to the
lien of this Indenture.
(i) The Issuer shall notify the Trustee and each Rating Agency in
writing prior to entering into any Derivative Product.
SECTION 4.04. ENFORCEMENT OF MASTER SERVICING AGREEMENT AND SUBSERVICING
AGREEMENTS. The Issuer shall comply with, shall require the Master Servicer to
comply with and shall cause the Master Servicer to require the Subservicers to
comply with the following whether or not the Issuer is otherwise in default
under this Indenture:
(a) cause to be diligently enforced and taken all reasonable steps,
actions and proceedings necessary for the enforcement of all terms,
covenants and conditions of the
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Master Servicing Agreement and all Subservicing Agreements, including the
prompt payment of all amounts due the Issuer thereunder, including, without
limitation, all principal and interest payments, and Guarantee payments
which relate to any Financed Eligible Loans and cause the Master Servicer
and each Subservicer to specify whether payments received by it represent
principal or interest;
(b) not permit the release of the obligations of the Master Servicer
and any Subservicer under the Master Servicing Agreement and any
Subservicing Agreement except in conjunction with amendments or
modifications permitted by paragraph (h) below;
(c) at all times, to the extent permitted by law, cause to be
defended, enforced, preserved and protected the rights and privileges of
the Issuer, the Trustee and the Registered Owners under or with respect to
the Master Servicing Agreement and each Subservicing Agreement;
(d) at its own expense, the Issuer shall duly and punctually perform
and observe each of its obligations to the Master Servicer or a Subservicer
under the Master Servicing Agreement or its related Subservicing Agreement
in accordance with the terms thereof;
(e) the Issuer agrees to give the Trustee and the Rating Agency
prompt written notice of each default on the part of the Master Servicer or
a Subservicer of its obligations under the Master Servicing Agreement or
its related Subservicing Agreement coming to the Issuer's attention;
(f) the Issuer shall not waive any default by the Master Servicer or
a Subservicer under the Master Servicing Agreement or its related
Subservicing Agreement without the written consent of the Trustee and the
giving of written notice to the Rating Agency;
(g) the Issuer shall cause the Master Servicer and each Subservicer
to deliver to the Trustee and the Issuer, on or before June 30 of each
year, beginning with June 30, 2005, a certificate stating that (i) a review
of the activities of the Master Servicer and each Subservicer during the
preceding calendar year and of its performance under the Master Servicing
Agreement and its related Subservicing Agreement has been made under the
supervision of the officer signing such certificate and (ii) to the best of
such officers' knowledge, based on such review, the Master Servicer and
such Subservicer has fulfilled all its obligations under the Master
Servicing Agreement and its related Subservicing Agreement throughout such
year, or, there has been a default in the fulfillment of any such
obligation, specifying each such default known to such officer and the
nature and stature thereof. The Issuer shall send copies of such annual
certificate of the Master Servicer and each Subservicer to each Rating
Agency; and
(h) not consent or agree to or permit any amendment or modification
of the Master Servicing Agreement or any Subservicing Agreement which will
in any manner materially adversely affect the rights or security of the
Registered Owners. The Issuer
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and the Trustee shall be entitled to receive and rely upon an opinion of
counsel that any such amendment or modification will not materially
adversely affect the rights or security of the Registered Owners.
SECTION 4.05. PROCEDURES FOR TRANSFER OF FUNDS. In any instance where this
Indenture requires a transfer of funds or money from one Fund to another, a
transfer of ownership in investments or an undivided interest therein may be
made in any manner agreeable to the Issuer and the Trustee, and in the
calculation of the amount transferred, interest on the investment which has or
will accrue before the date the money is needed in the fund to which the
transfer is made shall not be taken into account or considered as money on hand
at the time of such transfer.
SECTION 4.06. ADDITIONAL COVENANTS WITH RESPECT TO THE HIGHER EDUCATION
ACT. The Issuer covenants that it will cause the Trustee to be, or replace the
Trustee with, an Eligible Lender under the Higher Education Act, that it will
acquire or cause to be acquired Eligible Loans originated and held only by an
Eligible Lender and that it will not dispose of or deliver any Financed Eligible
Loans or any security interest in any such Financed Eligible Loans to any party
who is not an Eligible Lender so long as the Higher Education Act or Regulations
adopted thereunder require an Eligible Lender to be the owner or holder of
Guaranteed Eligible Loans; provided, however, that nothing above shall prevent
the Issuer from delivering the Eligible Loans to the Master Servicer, a
Subservicer or a Guaranty Agency. The Registered Owners of the Notes shall not
in any circumstances be deemed to be the owner or holder of the Guaranteed
Eligible Loans.
The Issuer, or the Administrator on behalf of the Issuer, shall be
responsible for each of the following actions with respect to the Higher
Education Act:
(a) the Issuer, or the Administrator on behalf of the Issuer, shall
be responsible for dealing with the Secretary with respect to the rights,
benefits and obligations under the Certificates of Insurance, and the
Issuer shall be responsible for dealing with the Guaranty Agencies with
respect to the rights, benefits and obligations under the Guarantee
Agreements with respect to the Financed Eligible Loans;
(b) the Issuer, or the Administrator on behalf of the Issuer, shall
cause to be diligently enforced, and shall cause to be taken all reasonable
steps, actions and proceedings necessary or appropriate for the enforcement
of all terms, covenants and conditions of all Financed Eligible Loans and
agreements in connection therewith, including the prompt payment of all
principal and interest payments and all other amounts due thereunder;
(c) the Issuer, or the Administrator on behalf of the Issuer, shall
cause the Financed Eligible Loans to be serviced by entering into the
Master Servicing Agreement or other agreement with the Master Servicer for
the collection of payments made for, and the administration of the accounts
of, the Financed Eligible Loans;
(d) the Issuer, or the Administrator on behalf of the Issuer, shall
comply, and shall cause all of its officers, directors, employees and
agents to comply, with the
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provisions of the Higher Education Act and any regulations or rulings
thereunder, with respect to the Financed Eligible Loans;
(e) the Issuer, or the Administrator on behalf of the Issuer, shall
cause all Available Funds, including the benefits of the Guarantee
Agreements, the Interest Benefit Payments and the Special Allowance
Payments, to flow to the Trustee. The Trustee shall have no liability for
actions taken at the direction of the Issuer or the Administrator, except
for negligence or willful misconduct in the performance of its express
duties hereunder. The Trustee shall have no obligation to administer,
service or collect the loans in the Trust Estate or to maintain or monitor
the administration, servicing or collection of such loans; and
(f) the Issuer, or the Administrator on behalf of the Issuer, shall
cause each Financed Eligible Loan evidenced by a Master Promissory Note in
the form mandated by Section 432(m)(1) of the Higher Education Act to be
acquired pursuant to a Student Loan Purchase Agreement with the Seller
containing language similar to the following:
"The Seller hereby represents and warrants that the Seller is
transferring all of its right title and interest in the MPN Loan to
the Trustee, that it has not assigned any interest in such MPN Loan
(other than security interests that have been released or ownership
interests that the Seller has reacquired) to any person other than the
Trustee, and that no prior holder of the MPN Loan has assigned any
interest in such MPN Loan (other than security interests that have
been released or ownership interests that such prior holder has
reacquired) to any Person other than a predecessor in title to the
Seller. The Seller hereby covenants that the Seller shall not attempt
to transfer to any other Person any interest in any MPN Loan assigned
hereunder. The Seller hereby authorizes the Trustee to file a UCC-1
financing statement identifying the Seller as debtor and the Trustee
as secured party and describing the MPN Loan sold pursuant to this
Agreement. The preparation or filing of such UCC-1 financing statement
is solely for additional protection of the Trustee's interest in the
MPN Loans and shall not be deemed to contradict the express intent of
the Seller and the Trustee that the transfer of MPN Loans under this
Agreement is an absolute assignment of such MPN Loans and is not a
transfer of such MPN Loans as security for a debt."
The Trustee shall not be deemed to be the designated agent for the purposes
of this Section unless it has agreed in writing to be such agent.
SECTION 4.07. FINANCED ELIGIBLE LOANS; COLLECTIONS THEREOF; ASSIGNMENT
THEREOF. The Issuer, through the Master Servicer and one or more Subservicers,
shall diligently collect all principal and interest payments on all Financed
Eligible Loans, and all Interest Benefit Payments, insurance, guarantee and
default claims and Special Allowance Payments which relate to such Financed
Eligible Loans; provided, however, the Issuer may offer interest rate reductions
with respect to the Financed Eligible Loans which result in rates of interest
not less than those shown in the cash flow analyses provided to each Rating
Agency on the Date of Issuance, and provided further that such rates of interest
may be further reduced if a Rating Confirmation is obtained, based on new cash
flow analyses containing such assumptions as the Issuer shall
34
reasonably determine. The Issuer shall cause the filing and assignment of such
claims (prior to the timely filing deadline for such claims under the
Regulations) by the Master Servicer or the appropriate Subservicer. The Issuer
will comply with the Higher Education Act and Regulations which apply to the
Program and to such Financed Eligible Loans.
SECTION 4.08. APPOINTMENT OF AGENTS, DIRECTION TO TRUSTEE, ETC. The Issuer
shall employ and appoint all employees, agents, consultants and attorneys which
it may consider necessary. No member of the board of directors or officer of the
Administrator, either singly or collectively, shall be personally liable for any
act or omission not willfully fraudulent or mala fide. The Issuer hereby directs
the Trustee to enter into this Indenture, the Administration Agreement, the
Custodian Agreements, the Investment Agreements and to accept the FSA Policy (as
defined in the FSA Capital Management Services LLC Investment Agreement) as the
initial Guaranty thereunder. The Issuer hereby directs the Eligible Lender
Trustee to enter into this Indenture, the Guarantee Agreements and the Eligible
Lender Trust Agreement.
SECTION 4.09. CAPACITY TO SUE. The Issuer shall have the power and capacity
to sue and to be sued on matters arising out of or relating to the financing of
the Financed Eligible Loans.
SECTION 4.10. CONTINUED EXISTENCE; SUCCESSOR TO ISSUER. The Issuer agrees
that it will do or cause to be done all things necessary to preserve and keep in
full force and effect its existence, rights and franchises as a Delaware
statutory trust, except as otherwise permitted by this Section. The Issuer
further agrees that it will not (a) sell, transfer or otherwise dispose of all
or substantially all, of its assets (except Financed Eligible Loans if such
sale, transfer or disposition will discharge this Indenture in accordance with
Article X hereof); (b) consolidate with or merge into another entity; or (c)
permit one or more other entities to consolidate with or merge into it. The
preceding restrictions in clauses (a), (b) and (c) above shall not apply to a
transaction if the transferee or the surviving or resulting entity, if other
than the Issuer, by proper written instrument for the benefit of the Trustee,
irrevocably and unconditionally assumes the obligation to perform and observe
the agreements and obligations of the Issuer under this Indenture.
If a transfer is made as provided in this Section, the provisions of this
Section shall continue in full force and effect and no further transfer shall be
made except in compliance with the provisions of this Section.
SECTION 4.11. AMENDMENT OF STUDENT LOAN PURCHASE AGREEMENTS. The Issuer
shall notify the Trustee in writing of any proposed amendments to any existing
Student Loan Purchase Agreement. No such amendment shall become effective unless
and until the Trustee consents thereto in writing. The consent of the Trustee
shall not be unreasonably withheld and shall not be withheld if the Trustee
receives an opinion of counsel acceptable to them that such an amendment is
required by the Higher Education Act and is not materially prejudicial to the
Registered Owners. Notwithstanding the foregoing, however, the Trustee shall
consent to an amendment from time to time so long as it is not materially
prejudicial to the interests of the Registered Owners, and the Trustee may rely
on an opinion of counsel to such effect.
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SECTION 4.12. REPRESENTATIONS; NEGATIVE COVENANTS.
(a) The Issuer hereby makes the following representations and
warranties to the Trustee on which the Trustee relies in authenticating the
Notes and on which the Registered Owners have relied in purchasing the
Notes. Such representations and warranties shall survive the transfer and
assignment of the Trust Estate to the Trustee.
(i) ORGANIZATION AND GOOD STANDING. The Issuer is duly
organized and validly existing under the laws of the State, and has
the power to own its assets and to transact the business in which it
presently engages.
(ii) DUE QUALIFICATION. The Issuer is duly qualified to do
business and is in good standing, and has obtained all material
necessary licenses and approvals, in all jurisdictions where the
failure to be so qualified, have such good standing or have such
licenses or approvals would have a material adverse effect on the
Issuer's business and operations or in which the actions as required
by this Indenture require or will require such qualification.
(iii) AUTHORIZATION. The Issuer has the power, authority and
legal right to create and issue the Notes, to execute, deliver and
perform this Indenture and to grant the Trust Estate to the Trustee
and the creation and issuance of the Notes, execution, delivery and
performance of this Indenture and grant of the Trust Estate to the
Trustee have been duly authorized by the Issuer by all necessary
statutory trust action.
(iv) BINDING OBLIGATION. This Indenture, assuming due
authorization, execution and delivery by the Trustee, the Notes in the
hands of the Registered Owners thereof and the Issuer Derivative
Payments constitute legal, valid and binding obligations of the Issuer
enforceable against the Issuer in accordance with their terms, except
that (A) such enforcement may be subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws (whether statutory,
regulatory or decisional) now or hereafter in effect relating to
creditors' rights generally and (B) the remedy of specific performance
and injunctive and other forms of equitable relief may be subject to
certain equitable defenses and to the discretion of the court before
which any proceeding therefor may be brought, whether a proceeding at
law or in equity.
(v) NO VIOLATION. The consummation of the transactions
contemplated by this Indenture and the fulfillment of the terms hereof
does not conflict with, result in any breach of any of the terms and
provisions of or constitute (with or without notice, lapse of time or
both) a default under the organizational documents of the Issuer, or
any material indenture, agreement, mortgage, deed of trust or other
instrument to which the Issuer is a party or by which it is bound, or
result in the creation or imposition of any lien upon any of its
material properties pursuant to the terms of any such indenture,
agreement, mortgage, deed of trust or other instrument, other than
this Indenture, nor violate any law or any order, rule or regulation
applicable to the Issuer of any court or of any federal or state
36
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Issuer or any of its
properties.
(vi) NO PROCEEDINGS. There are no proceedings, injunctions,
writs, restraining orders or investigations to which the Issuer or any
of such entity's affiliates is a party pending, or, to the best of
such entity's knowledge, threatened, before any court, regulatory
body, administrative agency or other tribunal or governmental
instrumentality (A) asserting the invalidity of this Indenture, (B)
seeking to prevent the issuance of any Notes or the consummation of
any of the transactions contemplated by this Indenture or (C) seeking
any determination or ruling that might materially and adversely affect
the performance by the Issuer of its obligations under, or the
validity or enforceability of this Indenture.
(vii) APPROVALS. All approvals, authorizations, consents,
orders or other actions of any person, corporation or other
organization, or of any court, governmental agency or body or
official, required on the part of the Issuer in connection with the
execution and delivery of this Indenture have been taken or obtained
on or prior to the Date of Issuance.
(viii) PLACE OF BUSINESS. The Issuer's place of business and
chief executive office is located in Wilmington, Delaware and the
Issuer has had no other chief executive office.
(ix) TAX AND ACCOUNTING TREATMENT. The Issuer intends to
treat the transactions contemplated by the Student Loan Purchase
Agreements as an absolute transfer rather than as a pledge of the
Financed Eligible Loans from the Seller for federal income tax and
financial accounting purposes and the Issuer (through the Eligible
Lender Trustee) will be treated as the owner of the Financed Eligible
Loans for all purposes. The Issuer further intends to treat the Notes
as its indebtedness for federal income tax and financial accounting
purposes.
(x) TAXES. The Issuer has filed (or caused to be filed) all
federal, state, county, local and foreign income, franchise and other
tax returns required to be filed by it through the date hereof, and
has paid all taxes reflected as due thereon. There is no pending
dispute with any taxing authority that, if determined adversely to the
Issuer, would result in the assertion by any taxing authority of any
material tax deficiency, and the Issuer has no knowledge of a proposed
liability for any tax year to be imposed upon such entity's properties
or assets for which there is not an adequate reserve reflected in such
entity's current financial statements.
(xi) LEGAL NAME. The legal name of the Issuer is "Nelnet
Student Loan Trust 2004-3" and has not changed since its inception.
The Issuer has no trade names, fictitious names, assumed names or
"dba's" under which it conducts its business and has made no filing in
respect of any such name.
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(xii) BUSINESS PURPOSE. The Issuer has acquired the Financed
Eligible Loans conveyed to it under a Student Loan Purchase Agreement
for a bona fide business purpose and has undertaken the transactions
contemplated herein as principal rather than as an agent of any other
Person. The Issuer has no subsidiaries, has adopted and operated
consistently with all requirements for statutory trusts under the laws
of the State with respect to its operations and has engaged in no
other activities other than those specified in this Indenture and the
Student Loan Purchase Agreements and in accordance with the
transactions contemplated herein and therein.
(xiii) COMPLIANCE WITH LAWS. The Issuer is in compliance with
all applicable laws and regulations with respect to the conduct of its
business and has obtained and maintains all permits, licenses and
other approvals as are necessary for the conduct of its operations.
(xiv) VALID BUSINESS REASONS; NO FRAUDULENT TRANSFERS. The
transactions contemplated by this Indenture are in the ordinary course
of the Issuer's business and the Issuer has valid business reasons for
granting the Trust Estate pursuant to this Indenture. At the time of
each such grant: (A) the Issuer granted the Trust Estate to the
Trustee without any intent to hinder, delay or defraud any current or
future creditor of the Issuer; (B) the Issuer was not insolvent and
did not become insolvent as a result of any such grant; (C) the Issuer
was not engaged and was not about to engage in any business or
transaction for which any property remaining with such entity was an
unreasonably small capital or for which the remaining assets of such
entity are unreasonably small in relation to the business of such
entity or the transaction; (D) the Issuer did not intend to incur, and
did not believe or should not have reasonably believed, that it would
incur, debts beyond its ability to pay as they become due; and (E) the
consideration received by the Issuer for the grant of the Trust Estate
was reasonably equivalent to the value of the related grant.
(xv) NO MANAGEMENT OF AFFAIRS OF SELLER. The Issuer is not
and will not be involved in the day-to-day management of the Seller,
the Administrator, the Sponsor or any affiliate.
(xvi) NO TRANSFERS WITH SELLER OR AFFILIATES. Other than the
acquisition of assets and the transfer of any Notes pursuant to this
Indenture, the Issuer does not engage in and will not engage in any
transactions with the Seller and affiliates, except as provided herein
with respect to the Administration Agreement or the payment of
dividends or distributions to the Issuer's parent.
(xvii) ABILITY TO PERFORM. There has been no material
impairment in the ability of the Issuer to perform its obligations
under this Indenture.
(xviii) FINANCIAL CONDITION. No material adverse change has
occurred in the Issuer's financial status since the date of its
formation.
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(xix) EVENT OF DEFAULT. No Event of Default has occurred and
no event has occurred that, with the giving of notice, the passage of
time, or both, would become an Event of Default.
(xx) ACQUISITION OF FINANCED ELIGIBLE LOANS LEGAL. The
Issuer has complied with all applicable federal, state and local laws
and regulations in connection with its acquisition of the Financed
Eligible Loans from the Seller.
(xxi) NO MATERIAL MISSTATEMENTS OR OMISSIONS. No information,
certificate of an officer, statement furnished in writing or report
delivered to the Trustee, the Master Servicer, a Subservicer or any
Registered Owner by the Issuer contains any untrue statement of a
material fact or omits a material fact necessary to make such
information, certificate, statement or report not misleading.
(b) The Issuer will not:
(i) sell, transfer, exchange or otherwise dispose of any
portion of the Trust Estate except as expressly permitted by this
Indenture;
(ii) claim any credit on, or make any deduction from, the
principal amount of any of the Notes by reason of the payment of any
taxes levied or assessed upon any portion of the Trust Estate;
(iii) except as otherwise provided herein, dissolve or
liquidate in whole or in part, except with the prior written consent
of the Trustee, and to the extent Notes remain Outstanding, approval
of the Registered Owners and a Rating Confirmation;
(iv) permit the validity or effectiveness of this Indenture,
any Supplement or any grant hereunder to be impaired, or permit the
lien of this Indenture to be amended, hypothecated, subordinated,
terminated or discharged, or permit any Person to be released from any
covenants or obligations under this Indenture, except as may be
expressly permitted hereby;
(v) except as otherwise provided herein, permit any lien,
charge, security interest, mortgage or other encumbrance (other than
the lien of this Indenture) to be created on or extend to or otherwise
arise upon or burden the Trust Estate or any part thereof or any
interest therein or the proceeds thereof;
(vi) permit the lien of this Indenture not to constitute a
valid first priority, perfected security interest in the Trust Estate;
(vii) incur or assume any indebtedness or guarantee any
indebtedness of any Person whether secured by any Financed Eligible
Loans under this Indenture or otherwise, except for such obligations
as may be incurred by the Issuer in connection with the issuance of
the Notes pursuant to this Indenture and unsecured trade payables in
the ordinary course of its business;
39
(viii) operate such that it would be consolidated with its
Sponsor or any other affiliate and its separate existence disregarded
in any federal or state proceeding;
(ix) act as agent of the Seller or, except as provided in
its Student Loan Purchase Agreement, allow the Seller to act as its
agent;
(x) allow the Seller or its parent or any other affiliate
to pay its expenses, guarantee its obligations or advance funds to it
for payment of expenses; or
(xi) consent to the appointment of a conservator or receiver
or liquidator in any insolvency, readjustment of debt, marshalling of
assets and liabilities or similar proceedings of or relating to the
Issuer or of or relating to all or substantially all of its property,
or a decree or order of a court or agency or supervisory authority
having jurisdiction in the premises for the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment
of debt, marshalling of assets and liabilities or similar proceedings,
or for the winding-up or liquidation of its affairs, shall have been
entered against the Issuer; or the Issuer shall not consent to the
appointment of a receiver, conservator or liquidator in any
insolvency, readjustment of debt, marshalling of assets and
liabilities, voluntary liquidation or similar proceedings of or
relating to the Issuer or of or relating to all or substantially all
of its property; or admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of any
applicable insolvency, bankruptcy or reorganization statute, make an
assignment for the benefit of its creditors or voluntarily suspend
payment of its obligations.
(c) The Issuer makes the following representations and warranties as
to the Trust Estate which is granted to the Trustee hereunder on such date,
on which the Trustee relies in accepting the Trust Estate. Such
representations and warranties shall survive the grant of the Trust Estate
to the Trustee pursuant to this Indenture:
(i) FINANCED ELIGIBLE LOANS. Each Financed Eligible Loan
acquired by the Issuer shall constitute an Eligible Loan and contain
the characteristics found in a Student Loan Purchase Agreement.
Notwithstanding the definition of "Eligible Loans" herein, the Issuer
covenants that no more than 20% of each purchase of Eligible Loans
will be made up of Eligible Loans delinquent by more than 30 days.
(ii) GRANT. It is the intention of the Issuer that the
transfer herein contemplated constitutes a grant of the Financed
Eligible Loans to the Trustee.
(iii) ALL FILINGS MADE. All filings (including, without
limitation, UCC filings) necessary in any jurisdiction to give the
Trustee a first priority perfected ownership and security interest in
the Trust Estate, including the Financed Eligible Loans, have been
made no later than the Date of Issuance and copies of the file-stamped
financing statements shall be delivered to the Trustee within five
40
Business Days of receipt by the Issuer or its agent from the
appropriate secretary of state. The Issuer has not caused, suffered or
permitted any lien, pledges, offsets, defenses, claims, counterclaims,
charges or security interest with respect to the Financed Eligible
Loans (other than the security interest created in favor of the
Trustee) to be created.
(iv) TRANSFER NOT SUBJECT TO BULK TRANSFER ACT. Each grant
of the Financed Eligible Loans by the Issuer pursuant to this
Indenture is not subject to the bulk transfer act or any similar
statutory provisions in effect in any applicable jurisdiction.
(v) NO TRANSFER TAXES DUE. Each grant of the Financed
Eligible Loans (including all payments due or to become due
thereunder) by the Issuer pursuant to this Indenture is not subject to
and will not result in any tax, fee or governmental charge payable by
the Issuer or the Seller to any federal, state or local government.
SECTION 4.13. ADDITIONAL COVENANTS. So long as any of the Notes are
Outstanding:
(a) The Issuer shall not engage in any business or activity other
than in connection with the activities contemplated hereby and in the
Student Loan Purchase Agreements, and in connection with the issuance of
Notes.
(b) The Issuer shall not consolidate or merge with or into any other
entity or convey or transfer its properties and assets substantially as an
entirety to any entity except as otherwise provided herein.
(c) The funds and other assets of the Issuer shall not be commingled
with those of any other individual, corporation, estate, partnership, joint
venture, association, joint stock company, trust, unincorporated
organization or government, or any agency or political subdivision thereof.
(d) The Issuer shall not be, become or hold itself out as being
liable for the debts of any other party.
(e) The Issuer shall not form, or cause to be formed, any
subsidiaries.
(f) The Issuer shall act solely in its own name and through its duly
authorized officers or agents in the conduct of its business, and shall
conduct its business so as not to mislead others as to the identity of the
entity with which they are concerned.
(g) The Issuer shall maintain its records and books of account and
shall not commingle its records and books of account with the records and
books of account of any other Person. The books of the Issuer may be kept
(subject to any provision contained in the statutes) inside or outside the
State at such place or places as may be designated from time to time by the
provisions of the Trust Agreement.
(h) All actions of the Issuer shall be taken by an Authorized
Representative.
41
(i) The Issuer shall not amend, alter, change or repeal any provision
contained in this Section without (i) the prior written consent of the
Trustee and (ii) a Rating Confirmation from each Rating Agency rating any
Notes Outstanding (a copy of which shall be provided to the Trustee) that
such amendment, alteration, change or repeal will have no adverse effect on
the rating assigned to the Notes.
(j) The Issuer shall not amend its Certificate of Trust or its Trust
Agreement without first obtaining the prior written consent of each Rating
Agency.
(k) All audited financial statements of the Issuer that are
consolidated with those of any affiliate thereof will contain detailed
notes clearly stating that (i) all of the Issuer's assets are owned by the
Issuer, and (ii) the Issuer is a separate entity with creditors who have
received ownership and/or security interests in the Issuer's assets.
(l) The Issuer will strictly observe legal formalities in its
dealings with the Seller, the Sponsor or any affiliate thereof, and funds
or other assets of the Issuer will not be commingled with those of the
Seller, the Sponsor or any other affiliate thereof. The Issuer shall not
maintain joint bank accounts or other depository accounts to which the
Seller, the Sponsor or any other affiliate has independent access. None of
the Issuer's funds will at any time be pooled with any funds of the Seller,
the Sponsor or any other affiliate.
(m) The Issuer will maintain an arm's length relationship with the
Seller (and any affiliate). Any Person that renders or otherwise furnishes
services to the Issuer will be compensated by the Issuer at market rates
for such services it renders or otherwise furnishes to the Issuer except as
otherwise provided in this Indenture. Except as contemplated in this
Indenture, the Student Loan Purchase Agreements, the Master Servicing
Agreement or a Subservicing Agreement, the Issuer will not hold itself out
to be responsible for the debts of the Seller, the parent or the decisions
or actions respecting the daily business and affairs of the Seller or
parent.
SECTION 4.14. PROVIDING OF NOTICE. The Issuer, upon learning of any failure
on its part to observe or perform in any material respect any covenant,
representation or warranty of the Issuer set forth in this Indenture or the
Student Loan Purchase Agreements, or of any failure on the part of the Seller to
observe or perform in any material respect any covenant, representation or
warranty of the Seller set forth in the Student Loan Purchase Agreements, shall
promptly notify the Trustee, the Master Servicer, the appropriate Subservicer
and each Rating Agency of such failure.
SECTION 4.15. CERTAIN REPORTS.
(a) The Issuer will:
(i) file with the Trustee, within 15 days after the Issuer
is required to file the same with the Commission, copies of the annual
reports and of the information, documents and other reports (or copies
of such portions of any of the foregoing as the Commission may from
time to time by rules and regulations
42
prescribe) which the Issuer may be required to file with the
Commission pursuant to Section 13 or Section 15(d) of the Exchange
Act;
(ii) file with the Trustee and the Commission, in accordance
with rules and regulations prescribed from time to time by the
Commission, such additional information, documents and reports with
respect to compliance by the Issuer with the conditions and covenants
of this Indenture as may be required from time to time by such rules
and regulations; and
(iii) transmit by mail to the Registered Owners of Notes,
within 30 days after the filing thereof with the Trustee, in the
manner and to the extent provided in Section 313(c) of the Trust
Indenture Act, such summaries of any information, documents and
reports required to be filed by the Issuer pursuant to subsections (a)
and (b) of this Section as may be required by rules and regulations
prescribed from time to time by the Commission.
(b) The Trustee shall mail to each Registered Owner, within 60 days
after each December 31 beginning with the December 31 following the date of
this Indenture, a brief report as of such December 31 that complies with
Section 313(a) of the Trust Indenture Act if required by said section. The
Trustee shall also comply with Section 313(b) of the Trust Indenture Act. A
copy of each such report required pursuant to Section 313(a) or (b) of the
Trust Indenture Act shall, at the time of such transaction to Registered
Owners, be filed by the Trustee with the Commission and with each
securities exchange, if any, upon which the Notes are listed, provided that
the Issuer has previously notified the Trustee of such listing.
(c) Not later than the fourth Business Day preceding each Quarterly
Distribution Date, the Administrator will prepare and provide a certificate
in the form of Exhibit D hereto (the "Administrator's Quarterly
Distribution Date Certificate"), or containing such information as the
Commission may from time to time by rules or regulations prescribe, to the
Trustee. The Trustee shall provide a copy of any Administrator's Quarterly
Distribution Date Certificate to any Noteholder who requests such in
writing.
(d) The Trustee may conclusively rely and accept such reports from
the Issuer as fulfilling the requirements of this Section, with no further
duty to know, determine or examine such reports or comply with the
prescribed timing, rules and regulations of the Commission.
SECTION 4.16. STATEMENT AS TO COMPLIANCE. The Issuer will deliver to the
Trustee, within 120 days after the end of each fiscal year, a brief certificate
from an Authorized Representative including (a) a current list of the Authorized
Representatives, and (b) a statement indicating whether or not to the knowledge
of the signers thereof the Issuer is in compliance with all conditions and
covenants under this Indenture and, in the event of any noncompliance,
specifying such noncompliance and the nature and status thereof. For purposes of
this Section, such compliance shall be determined without regard to any period
of grace or requirement of notice under this Indenture.
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SECTION 4.17. REPRESENTATIONS OF THE ISSUER REGARDING THE TRUSTEE'S
SECURITY INTEREST. The Issuer hereby represents and warrants for the benefit of
the Trustee and the Registered Owners as follows:
(a) This Indenture creates a valid and continuing security interest
(as defined in the applicable Uniform Commercial Code in effect in the
States of Colorado, Delaware, Nebraska and Utah) in the Financed Eligible
Loans in favor of the Trustee, which security interest is prior to all
other liens, charges, security interests, mortgages or other encumbrances,
and is enforceable as such as against creditors of and purchasers from
Issuer.
(b) The Higher Education Act deems the Financed Eligible Loans to
constitute accounts within the meaning of the applicable UCC as in effect
in the State of Delaware for the purposes of perfecting a security interest
in the Financed Eligible Loans.
(c) The Issuer (or the Eligible Lender Trustee on behalf of the
Issuer) owns and has good and marketable title to the Financed Eligible
Loans free and clear of any lien, charge, security interest, mortgage or
other encumbrance, claim or encumbrance of any Person, other that those
granted pursuant to this Indenture.
(d) For sale of loan participations, swaps and other "payment
intangibles" (within the meaning of the applicable UCC), the Issuer has
received all consents and approvals required by the terms of the Financed
Eligible Loans to the sale of the Financed Eligible Loans hereunder to the
Trustee.
(e) The Issuer has caused or will have caused, within ten days, the
filing of all appropriate financing statements in the proper filing office
in the appropriate jurisdictions under applicable law in order to perfect
the security interest in the Financed Eligible Loans granted to the Trustee
hereunder.
(f) The Issuer has received a written acknowledgment from the Master
Servicer and each Subservicer (as custodian for the Trustee) that the
Master Servicer or such Subservicer is holding executed copies of the
promissory notes and master promissory notes that constitute or evidence
the Financed Eligible Loans for which it is acting as Master Servicer or
Subservicer, and that the Master Servicer or such Subservicer is holding
such solely on behalf and for the benefit of the Trustee.
(g) Other than the security interest granted to the Trustee pursuant
to this Indenture, the Issuer has not pledged, assigned, sold, granted a
security interest in, or otherwise conveyed any of the Financed Eligible
Loans. The Issuer has not authorized the filing of and is not aware of any
financing statements against the Issuer that include a description of
collateral covering the Financed Eligible Loans other than any financing
statement relating to the security interest granted to the Trustee
hereunder or that has been terminated. The Issuer is not aware of any
judgment or tax lien filings against the Issuer.
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SECTION 4.18. FURTHER COVENANTS OF THE ISSUER REGARDING THE TRUSTEE'S
SECURITY INTEREST. The Issuer hereby covenants for the benefit of the Trustee
and the Registered Owners as follows:
(a) The representations and warranties set forth in Section 4.17
hereof shall survive the termination of this Indenture.
(b) The Trustee shall not waive any of the representations and
warranties set forth in Section 4.17 hereof.
(c) The Issuer shall take all steps necessary, and shall cause the
Master Servicer and Subservicers, if any, to take all steps necessary and
appropriate, to maintain the perfection and priority of the Trustee's
security interest in the Financed Eligible Loans.
ARTICLE V
FUNDS
SECTION 5.01. CREATION AND CONTINUATION OF FUNDS AND ACCOUNTS. There are
hereby created and established the following Funds to be held and maintained by
the Trustee for the benefit of the Registered Owners:
(a) Acquisition Fund;
(b) Collection Fund; and
(c) Reserve Fund.
The Trustee is hereby authorized for the purpose of facilitating the
administration of the Trust Estate and for the administration of any Notes
issued hereunder to create further Accounts or Subaccounts in any of the various
Funds and Accounts established hereunder which are deemed necessary or
desirable.
SECTION 5.02. ACQUISITION FUND. There shall be deposited into the
Acquisition Fund moneys from proceeds of the Notes in an amount equal to
$1,342,736,408.10. Financed Eligible Loans shall be held by the Trustee or its
agent or bailee (including the Master Servicer or a Subservicer) and shall be
pledged to the Trust Estate and accounted for as a part of the Acquisition Fund.
Moneys on deposit in the Acquisition Fund shall be used, upon Issuer Order,
solely to (a) pay costs of issuance of the Notes, including the costs related to
the purchase of one or more Derivative Products, if any, and (b) upon receipt by
the Trustee of an Eligible Loan Acquisition Certificate, to acquire Eligible
Loans at a price not in excess of 100%, plus accrued interest. Any such Issuer
Order or Eligible Loan Acquisition Certificate shall state that such proposed
use of moneys in the Acquisition Fund is in compliance with the provisions of
this Indenture. In addition, on each Monthly Servicing Payment Date or Quarterly
Distribution Date, to the extent there are insufficient Available Funds in the
Collection Fund to make one or more of the
45
transfers required by Sections 5.03(b) and 5.03(c)(i) through (c)(iv) hereof,
then the Administrator shall instruct the Trustee in writing to withdraw from
the Acquisition Fund on such Monthly Servicing Payment Date or Quarterly
Distribution Date, as the case may be, an amount of money (but not Eligible
Loans) equal to such deficiency and to deposit such amount in the Collection
Fund. Notwithstanding the foregoing, if any funds or moneys remain in the
Acquisition Fund on December 31, 2004, then the Trustee shall, without direction
from or notice to the Issuer, transfer all such remaining moneys or funds to the
Collection Fund not later than the third Business Day preceding the Quarterly
Distribution Date in January, 2005.
While the Issuer will be the beneficial owner of the Financed Eligible
Loans, it is understood and agreed that the Eligible Lender Trustee will be the
legal owner thereof and the Trustee will have a security interest in the
Financed Eligible Loans for and on behalf of the Registered Owners. In the case
of a single Financed Eligible Loan evidenced by a separate note, each such note
will be held in the name of the Trustee for the account of the Issuer, for the
benefit of the Registered Owners. In the case of a Financed Eligible Loan
evidenced by a Master Promissory Note, the Issuer shall cause the holder of the
original Master Promissory Note to indicate by book entry on its books and
records that the Issuer is the beneficial owner of the Loan and that the Trustee
is the legal owner and has a security interest in the Financed Eligible Loan for
the benefit of the Registered Owners.
Except as provided in Sections 5.06, 10.03 and 10.04 hereof, Financed
Eligible Loans shall not be sold, transferred or otherwise disposed of (other
than for consolidation, serialization or transfer to a Guaranty Agency) by the
Issuer through the Trustee free from the lien of this Indenture while any of the
Class A Notes are Outstanding. The Issuer hereby certifies, upon which the
Trustee may conclusively rely, that any Financed Eligible Loan sold pursuant to
this Indenture shall not be sold for a price less than the Purchase Amount of
such Financed Eligible Loan. The Issuer shall provide notice to Moody's, if the
principal amount of Financed Eligible Loans sold pursuant to this Indenture
exceeds 10% of the Initial Pool Balance.
SECTION 5.03. COLLECTION FUND.
(a) DEPOSITS TO COLLECTION FUND. There shall be deposited to the
Collection Fund (i) moneys from proceeds of the Notes in an amount equal to
$8,911,282.69, (ii) all Available Funds, and all other moneys and
investments derived from assets on deposit in and transfers from the
Acquisition Fund (as described in Section 5.02 hereof) and the Reserve Fund
(as described in Section 5.04 hereof), (iii) all Counterparty Payments, and
(iv) any other amounts deposited thereto upon receipt of an Issuer Order.
Moneys on deposit in the Collection Fund shall be used to make the payments
described below. The Trustee may conclusively rely on all written
instructions of the Administrator described in this Indenture with no
further duty to examine or determine the information contained in any
Administrator's Certificate or Issuer Order.
(b) PAYMENTS ON MONTHLY SERVICING PAYMENT DATES. The Administrator
shall instruct the Trustee in writing no later than the fourth Business Day
preceding each Monthly Servicing Payment Date that is not a Quarterly
Distribution Date (based on the information contained in a certificate of
the Administrator (in the form set forth as Exhibit C hereto) and the
related Servicer's Report, if applicable) to distribute to the
46
Master Servicer, on such Monthly Servicing Payment Date, from and to the
extent of the Available Funds on deposit in the Collection Fund, the
Servicing Fees due with respect to the preceding calendar month, and the
Trustee shall comply with such instructions. Upon written direction from
the Administrator to the Trustee, moneys in the Collection Fund shall be
used on any date to pay, when due, fees and expenses insofar as the same
relate to Financed Eligible Loans and other fees and expenses with respect
to the Trust Estate the payment of which is not otherwise provided for in
subsection (c) of this Section, but including amounts described in clause
(a)(i), (ii) and (iii) of the definition of Available Funds.
(c) PAYMENTS ON QUARTERLY DISTRIBUTION DATES. The Administrator shall
instruct the Trustee in writing no later than the fourth Business Day
preceding each Quarterly Distribution Date (based on the information
contained in a certificate of the Administrator (in the form set forth as
Exhibit D hereto) and the related Servicer's Report, if applicable) to make
the following deposits and distributions from Available Funds in the
Collection Fund (including any amounts transferred from the Reserve Fund
pursuant to Section 5.04(b), (c) and (d) hereof) to the Persons or to the
account specified below on such Quarterly Distribution Date, in the
following order of priority, and the Trustee shall comply with such
instructions:
(i) to pay to the Master Servicer, the Trustee and the
Delaware Trustee, pro rata, based on amounts owed to each such party,
without preference or priority of any kind, the Servicing Fee (to the
extent remaining unpaid following the Monthly Servicing Payment Date),
the Trustee Fee and the Delaware Trustee Fee, respectively, due on
such Quarterly Distribution Date, in each case, together with such
fees remaining unpaid from prior Quarterly Distribution Dates (and, in
the case of the Servicing Fees, prior Monthly Servicing Payment
Dates);
(ii) to pay to the Administrator, the Administration Fee due
on such Quarterly Distribution Date and all unpaid Administration Fees
from prior Quarterly Distribution Dates;
(iii) to pay (A) to the Class A Noteholders of each class ,
the portion of the Class A Noteholders' Interest Distribution Amount
payable to such class on such Quarterly Distribution Date and (B) to
the Counterparty, any Issuer Derivative Payments owed to such
Counterparty on such Quarterly Distribution Date (excluding
Termination Payments other than Priority Termination Payments), pro
rata, based on amounts owed to each such party, without preference or
priority of any kind;
(iv) to pay to the Class B Noteholders, the portion of the
Class B Noteholders' Interest Distribution Amount;
(v) to the Sponsor, an amount equal to the unpaid interest
accrued on the Financed Student Loans subsequent to the Cutoff Date
but prior to the Date of Issuance, until such amount has been paid in
full;
47
(vi) to the Class A Noteholders, the Class A Principal
Distribution Amount in the following order:
(A) to pay to the Class A-1 Noteholders until the
Class A-1 Notes have been paid in full;
(B) to pay to the Class A-2 Noteholders until the
Class A-2 Notes have been paid in full;
(C) to pay to the Class A-3 Noteholders until the
Class A-3 Notes have been paid in full;
(D) to pay to the Class A-4 Noteholders until the
Class A-4 Notes have been paid in full; and
(E) to pay to the Class A-5 Noteholders until the
Class A-5 Notes have been paid in full;
(vii) on and after the Stepdown Date, and provided that no
Trigger Event is in effect on such Quarterly Distribution Date, to the
Class B Noteholders, the Class B Principal Distribution Amount;
(viii) to deposit to the Reserve Fund, the amount, if any,
necessary to reinstate the balance of the Reserve Fund up to the
Specified Reserve Fund Balance;
(ix) to pay to the Master Servicer, the aggregate unpaid
amount of any Carryover Servicing Fee, if any;
(x) to pay to the Counterparties, pro rata, without
preference or priority of any kind, any accrued and unpaid Termination
Payments due to each such Counterparty under the applicable Derivative
Product;
(xi) in the event the Financed Eligible Loans are not sold
pursuant to Sections 10.03 or 10.04 hereof, to pay as an accelerated
payment of principal balance of the Notes then Outstanding, to the
Noteholders in the same order and priority as is set forth in Sections
5.03(c)(vi)(A) through (F) and 5.03(c)(vii) hereof until the principal
amount of the Notes is paid in full; and
(xii) subject to the remaining provisions of this Section, to
pay to the Sponsor any remaining funds.
Amounts properly distributed to the Sponsor pursuant to paragraph
(xii) shall be deemed released from the Trust Estate and the security
interest therein granted to the Trustee, and the Sponsor shall in no event
thereafter be required to refund any such distributed amounts.
48
The amounts paid to the Trustee and the Delaware Trustee (but not the
Master Servicer) pursuant to clause (i) above and the Administration Fee
pursuant to clause (ii) above, shall not in any one Fiscal Year exceed the
amount designated therefor in the cash flows provided to each Rating Agency
on each Date of Issuance, unless the Issuer, after furnishing each Rating
Agency with revised cash flows, shall have received a Rating Confirmation.
(d) DETERMINATION, ALLOCATION AND PAYMENT OF PRINCIPAL DISTRIBUTION
AMOUNT. The Class A Principal Distribution Amount and the Class B Principal
Distribution Amount will be determined for the Notes only on Quarterly
Distribution Dates. If a class of Notes is allocated some or all of the
Class A Principal Distribution Amount on a Quarterly Distribution Date,
that class also will be paid such amount on such Quarterly Distribution
Date.
(e) OPTIONAL REDEMPTION FROM SALE OF FINANCED ELIGIBLE LOANS. The
Notes shall be subject to redemption from the proceeds of a sale of
Financed Eligible Loans in accordance with Section 10.03 or 10.04 hereof on
any Quarterly Distribution Date. Redemption of the Class B Notes shall be
subject to the limitations set forth in subsection (f) of this Section.
(f) LIMITATION ON REDEMPTION OF CLASS B NOTES. Notwithstanding
anything to the contrary, in no event may any Class B Notes be redeemed
pursuant to Section 5.03(e) hereof if any Class A Notes would be
Outstanding following such redemption.
SECTION 5.04. RESERVE FUND.
(a) On the Date of Issuance, the Trustee shall deposit $3,352,310.21
into the Reserve Fund. Thereafter, the Trustee shall transfer to the
Reserve Fund from the Collection Fund all amounts designated for transfer
thereto pursuant to Section 5.03(c)(viii) hereof.
(b) On each Monthly Servicing Payment Date or Quarterly Distribution
Date, to the extent there are insufficient Available Funds in the
Collection Fund to make one or more of the transfers required by Sections
5.03(b) and 5.03(c)(i) through (c)(iv) hereof, then the Administrator shall
instruct the Trustee in writing to withdraw from the Reserve Fund on such
Monthly Servicing Payment Date or Quarterly Distribution Date, as the case
may be, an amount equal to such deficiency and to deposit such amount in
the Collection Fund to the extent moneys are not available to make such
transfers from the Acquisition Fund pursuant to Section 5.02 hereof.
Additionally, if on the Note Final Maturity Date for a class of Notes, and
after giving effect to the distribution of the Available Funds on such Note
Final Maturity Date, the principal amount of such class of Notes will not
be reduced to zero, the Administrator shall instruct the Trustee in writing
to withdraw from the Reserve Fund on such Note Final Maturity Date an
amount equal to the amount needed to reduce the principal amount of such
class of Notes to zero and to deposit such amount in the Collection Fund
for application to payment of the outstanding principal balance of such
class of Notes.
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(c) After giving effect to subsection (b) of this Section, if the
amount on deposit in the Reserve Fund on any Quarterly Distribution Date is
greater than the Specified Reserve Fund Balance for such Quarterly
Distribution Date, the Administrator shall instruct the Trustee in writing
to withdraw from the Reserve Fund on such Quarterly Distribution Date an
amount equal to such excess and to deposit such amount in the Collection
Fund.
(d) On the final Quarterly Distribution Date upon termination of the
trust and following the payment in full of the Outstanding Amount of the
Notes and of all other amounts (other than unpaid Issuer Derivative
Payments and Carryover Servicing Fees) owing or to be distributed hereunder
to Noteholders, the Trustee, the Master Servicer, the Administrator, the
Delaware Trustee or the Counterparties (excluding Termination Payments
other than Priority Termination Payments), to the extent that Available
Funds on such date are insufficient to make the following payments, amounts
remaining in the Reserve Fund shall be used first to pay any unpaid Issuer
Derivative Payments and second to pay any Carryover Servicing Fees. Any
amount remaining on deposit in the Reserve Fund after such payments have
been made shall be distributed to the Sponsor. The Sponsor shall in no
event be required to refund any amounts properly distributed pursuant to
this subsection (d).
(e) Anything in this Section to the contrary notwithstanding, if the
market value of securities and cash in the Reserve Fund is on any Quarterly
Distribution Date sufficient to pay the remaining principal amount of and
interest accrued on the Notes, and to pay any unpaid Issuer Derivative
Payments and Carryover Servicing Fee, such amount will be so applied on
such Quarterly Distribution Date and the Administrator shall instruct the
Trustee in writing to make such payments.
SECTION 5.05. INVESTMENT OF FUNDS HELD BY TRUSTEE. The Trustee is hereby
directed to enter into the Investment Agreements. In addition, the Trustee shall
invest money held for the credit of any Fund or Account or Subaccount held by
the Trustee hereunder as directed in writing (or orally, confirmed in writing)
by an Authorized Representative of the Issuer, to the fullest extent practicable
and reasonable, in Investment Securities which shall mature or be redeemed at
the option of the holder prior to the respective dates when the money held for
the credit of such Fund or Account will be required for the purposes intended.
In the absence of any such direction and to the extent practicable, the Trustee
shall invest amounts held hereunder in those Investment Securities described in
clause (k) of the definition of the Investment Securities. All such investments
shall be held by (or by any custodian on behalf of) the Trustee for the benefit
of the Issuer; provided that on the Business Day preceding each Quarterly
Distribution Date and Monthly Servicing Payment Date all interest and other
investment income collected (net of losses and investment expenses) on funds on
deposit therein shall be deposited into the Collection Fund and shall be deemed
to constitute a portion of the Available Funds for such Quarterly Distribution
Date. The Trustee and the Issuer hereby agree that unless an Event of Default
shall have occurred hereunder, the Issuer acting by and through an Authorized
Representative shall be entitled to, and shall, provide written direction or
oral direction confirmed in writing to the Trustee with respect to any
discretionary acts required or permitted of the Trustee under any Investment
Securities and the Trustee shall not take such discretionary acts without such
written direction.
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The Investment Securities purchased shall be held by the Trustee and shall
be deemed at all times to be part of such Fund or Account or Subaccounts or
combination thereof, and the Trustee shall inform the Issuer of the details of
all such investments. Upon direction in writing (or orally, confirmed in
writing) from an Authorized Representative of the Issuer, the Trustee shall use
its best efforts to sell at the best price obtainable, or present for
redemption, any Investment Securities purchased by it as an investment whenever
it shall be necessary to provide money to meet any payment from the applicable
Fund. The Trustee shall advise the Issuer in writing, on or before the fifteenth
day of each calendar month (or such later date as reasonably consented to by the
Issuer), of all investments held for the credit of each Fund in its custody
under the provisions of this Indenture as of the end of the preceding month and
the value thereof, and shall list any investments which were sold or liquidated
for less than the par value thereof, plus accrued but unpaid interest at the
time thereof.
Money in any Fund constituting a part of the Trust Estate may be pooled for
the purpose of making investments and may be used to pay accrued interest on
Investment Securities purchased. The Trustee and its affiliates may act as
principal or agent in the acquisition or disposition of any Investment
Securities.
Notwithstanding the foregoing, the Trustee shall not be responsible or
liable for any losses on investments made by it hereunder or for keeping all
Funds held by it, fully invested at all times, its only responsibility being to
comply with the investment instructions of the Issuer or its designee in a
non-negligent manner.
The Issuer acknowledges that to the extent the regulations of the
Comptroller of the Currency or other applicable regulatory agency grant the
Issuer the right to receive brokerage confirmations of security transactions,
the Issuer waives receipt of such confirmations.
SECTION 5.06. RELEASE.
(a) The Trustee shall, upon Issuer Order and subject to the
provisions of this Indenture, take all actions reasonably necessary to
effect the release of any Financed Eligible Loans from the lien of this
Indenture to the extent the terms hereof permit the sale, disposition or
transfer of such Financed Eligible Loans.
(b) Subject to the payment of its fees and expenses pursuant to
Sections 7.05 and 7.07 hereof, the Trustee may, and when required by the
provisions of this Indenture shall, execute instruments to release property
from the lien of this Indenture, or convey the Trustee's interest in the
same, in a manner and under circumstances that are not inconsistent with
the provisions of this Indenture. No party relying upon an instrument
executed by the Trustee as provided in this Article shall be bound to
ascertain the Trustee's authority, inquire into the satisfaction of any
conditions precedent or see to the application of any moneys.
(c) The Trustee shall, at such time as there are no Notes Outstanding
and all sums due the Trustee pursuant to Sections 7.05 and 7.07 hereof and
all amounts payable to the Master Servicer, each Subservicer, the
Administrator, the Delaware Trustee and the Counterparties have been paid,
release any remaining portion of the Trust Estate that
51
secured the Notes from the lien of this Indenture and release to the Issuer
or any other Person entitled thereto any funds then on deposit in the Funds
and Accounts. The Trustee shall release property from the lien of this
Indenture pursuant to this subsection (c) only upon receipt of an Issuer
Order, an Opinion of Counsel and (if required by the Trust Indenture Act)
Independent Certificates in accordance with Sections 314(c) and 314(d)(1)
of the Trust Indenture Act.
(d) Subject to the provisions of this Indenture, the Trustee shall
release property from the lien of this Indenture only upon receipt of an
Issuer Order, an Opinion of Counsel and Independent Certificates in
accordance with Sections 314(c) and 314(d)(1) of the Trust Indenture Act or
an Opinion of Counsel in lieu of such Independent Certificates to the
effect that the Trust Indenture Act does not require any such Independent
Certificates.
(e) Each Registered Owner, by the acceptance of a Note, acknowledges
that from time to time the Trustee shall release the lien of this Indenture
on any Financed Eligible Loan to be sold to (i) the Seller in accordance
with the Student Loan Purchase Agreement; (ii) the Master Servicer or a
Subservicer in accordance with the Master Servicing Agreement or the
applicable Subservicing Agreement; and (iii) another eligible lender
holding one or more serial loans with respect to such Financed Eligible
Loan, in accordance with the Master Servicing Agreement or the applicable
Subservicing Agreement, and each Registered Owner, by the acceptance of a
Note, consents to any such release.
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT DEFINED. For the purpose of this Indenture,
the following events are hereby defined as, and are declared to be, "Events of
Default":
(a) default in the due and punctual payment of any interest on any
Note when the same becomes due and payable, and such default shall continue
for a period of five (5) days;
(b) default in the due and punctual payment of the principal of any
Note when the same becomes due and payable on the related Note Final
Maturity Date;
(c) default in the performance or observance of any other of the
covenants, agreements or conditions on the part of the Issuer to be kept,
observed and performed contained in this Indenture or in the Notes, and
continuation of such default for a period of 90 days after written notice
thereof by the Trustee to the Issuer; and
(d) the occurrence of an Event of Bankruptcy.
Any notice herein provided to be given to the Issuer with respect to any
default shall be deemed sufficiently given if sent by registered mail with
postage prepaid to the Person to be notified, addressed to such Person at the
post office address as shown in Section 9.01 hereof or
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such other address as may hereafter be given as the principal office of the
Issuer in writing to the Trustee by an Authorized Representative of the Issuer.
The Trustee may give any such notice in its discretion and shall give such
notice if requested to do so in writing by the Registered Owners of at least 51%
of the collective aggregate principal amount of the Highest Priority Obligations
at the time Outstanding.
SECTION 6.02. REMEDY ON DEFAULT; POSSESSION OF TRUST ESTATE. Subject to
Sections 7.05, 7.07 and 6.08 hereof, upon the happening and continuance of any
Event of Default, the Trustee or by its attorneys or agents may enter into and
upon and take possession of such portion of the Trust Estate as shall be in the
custody of others, and all property comprising the Trust Estate, and each and
every part thereof, and exclude the Issuer and its agents, servants and
employees wholly therefrom, and have, hold, use, operate, manage, and control
the same and each and every part thereof, and in the name of the Issuer or
otherwise, as they shall deem best, conduct the business thereof and exercise
the privileges pertaining thereto and all the rights and powers of the Issuer
and use all of the then existing Trust Estate for that purpose, and collect and
receive all charges, income and Available Funds of the same and of every part
thereof, and after deducting therefrom all expenses incurred hereunder and all
other proper outlays herein authorized, and all payments which may be made as
just and reasonable compensation for its own services, and for the services of
its attorneys, agents, and assistants, the Trustee shall apply the rest and
residue of the money received by the Trustee as follows:
FIRST, to the Trustee and the Delaware Trustee, any Trustee Fee and
any Delaware Trustee Fee, respectively due and owing;
SECOND, to the Master Servicer, any Servicing Fees, due and remaining
unpaid;
THIRD, pro rata, to (i) the Counterparties, pro rata, without
preference or priority of any kind, in proportion to their respective
entitlements under the applicable Derivative Products (excluding all
Termination Payments other than Priority Termination Payments) and (ii) to
the Class A Noteholders of each class for amounts due and unpaid on each
such class of Class A Notes for interest, pro rata, without preference or
priority of any kind, according to the amounts due and payable on each such
class of Class A Notes for such interest;
FOURTH, to Class A Noteholders for amounts due and unpaid on the Class
A Notes for principal, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Notes for principal;
FIFTH, to the Class B Noteholders for amounts due and unpaid on the
Class B Notes for interest, pro rata without preference or priority of any
kind, according to the amounts due and payable on the Notes for such
interest;
SIXTH, to the Class B Noteholders for amounts due and unpaid on the
Class B Notes for principal, pro rata without preference or priority of any
kind, according to the amounts due and payable on the Class B Notes for
principal;
SEVENTH, to the Counterparties, in proportion to the respective
entitlements under the applicable Derivative Product Agreement without
preference or priority of any
53
kind, for any Termination Payments due and any other unpaid Issuer
Derivative Payments;
EIGHTH, to the Master Servicer, for any unpaid Carryover Servicing
Fees; and
NINTH, to the Issuer, for distribution in accordance with the terms of
the Administration Agreement and the Trust Agreement.
The Trustee may fix a record date and payment date for any payment to
Registered Owners pursuant to this Section. At least 15 days before such record
date, the Trustee shall mail to each Registered Owner and the Issuer a notice
that states the record date, the payment date and the amount to be paid.
SECTION 6.03. REMEDIES ON DEFAULT; ADVICE OF COUNSEL. Upon the happening of
any Event of Default, the Trustee may proceed to protect and enforce the rights
of the Trustee and the Registered Owners in such manner as counsel for the
Trustee may advise, whether for the specific performance of any covenant,
condition, agreement or undertaking herein contained, or in aid of the execution
of any power herein granted, or for the enforcement of such other appropriate
legal or equitable remedies as, in the opinion of such counsel, may be more
effectual to protect and enforce the rights aforesaid.
SECTION 6.04. REMEDIES ON DEFAULT; SALE OF TRUST ESTATE. Upon the happening
of any Event of Default and if the principal of all of the Outstanding
Obligations shall have been declared due and payable, then and in every such
case, and irrespective of whether other remedies authorized shall have been
pursued in whole or in part, the Trustee may sell, with or without entry, to the
highest bidder the Trust Estate, and all right, title, interest, claim and
demand thereto and the right of redemption thereof, at any such place or places,
and at such time or times and upon such notice and terms as may be required by
law. Upon such sale the Trustee may make and deliver to the purchaser or
purchasers a good and sufficient assignment or conveyance for the same, which
sale shall be a perpetual bar both at law and in equity against the Issuer and
all Persons claiming such properties. No purchaser at any sale shall be bound to
see to the application of the purchase money or to inquire as to the
authorization, necessity, expediency or regularity of any such sale. The Trustee
is hereby irrevocably appointed the true and lawful attorney-in-fact of the
Issuer, in its name and stead, to make and execute all bills of sale,
instruments of assignment and transfer and such other documents of transfer as
may be necessary or advisable in connection with a sale of all or part of the
Trust Estate, but the Issuer, if so requested by the Trustee, shall ratify and
confirm any sale or sales by executing and delivering to the Trustee or to such
purchaser or purchasers all such instruments as may be necessary, or in the
judgment of the Trustee, proper for the purpose which may be designated in such
request. In addition, the Trustee may proceed to protect and enforce the rights
of the Trustee and the Registered Owners of the Obligations in such manner as
counsel for the Trustee may advise, whether for the specific performance of any
covenant, condition, agreement or undertaking herein contained, or in aid of the
execution of any power herein granted, or for the enforcement of such other
appropriate legal or equitable remedies as may in the opinion of such counsel,
be more effectual to protect and enforce the rights aforesaid. The Indenture
Trustee shall take any such action or actions if requested to do so in writing
by the Registered Owners of
54
at least a majority of the principal amount of the Highest Priority Obligations
at the time Outstanding.
Notwithstanding the foregoing, the Indenture Trustee is prohibited from
selling the Financed Eligible Loans following an Event of Default, other than a
default in the payment of any principal or interest on any Note, unless:
(a) The Registered Owners of all of the Highest Priority Obligations
at the time Outstanding consent to such a sale;
(b) The proceeds of such a sale will be sufficient to discharge all
the Outstanding Obligations pursuant to Article X hereof at the date of
such a sale; or
(c) The Issuer, or the Administrator on behalf of the Issuer,
determines that the collections on the Financed Eligible Loans would not be
sufficient on an ongoing basis to make all payments on such Obligations as
such payments would have become due if such Obligations had not been
declared due and payable, and the Indenture Trustee obtains the consent of
the Registered Owners of at least 66-2/3% of the aggregate principal amount
of the Highest Priority Obligations at the time Outstanding.
Such a sale shall also require the consent of all the Registered Owners of
the Class B Notes unless the proceeds of such a sale would be sufficient to
discharge the Class B Notes pursuant to Article X hereof at the date of such a
sale.
SECTION 6.05. APPOINTMENT OF RECEIVER. In case an Event of Default occurs,
and if all of the Outstanding Obligations shall have been declared due and
payable and in case any judicial proceedings are commenced to enforce any right
of the Trustee or of the Registered Owners under this Indenture or otherwise,
then as a matter of right, the Trustee shall be entitled to the appointment of a
receiver of the Trust Estate and of the earnings, income or revenue, rents,
issues and profits thereof with such powers as the court making such
appointments may confer.
SECTION 6.06. RESTORATION OF POSITION. In case the Trustee shall have
proceeded to enforce any rights under this Indenture by sale or otherwise, and
such proceedings shall have been discontinued, or shall have been determined
adversely to the Trustee, then and in every such case to the extent not
inconsistent with such adverse decree, the Issuer, the Trustee and the
Registered Owners shall be restored to their former respective positions and the
rights hereunder in respect to the Trust Estate, and all rights, remedies and
powers of the Trustee and of the Registered Owners shall continue as though no
such proceeding had been taken.
SECTION 6.07. APPLICATION OF SALE PROCEEDS. The proceeds of any sale of the
Trust Estate, together with any funds at the time held by the Trustee and not
otherwise appropriated, shall be applied by the Trustee as set forth in Section
6.02 hereof, and then to the Issuer or whomsoever shall be lawfully entitled
thereto.
SECTION 6.08. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT. If an
Event of Default should occur and be continuing, then and in every such case the
Trustee or the Registered Owners of Obligations representing not less than a
majority of the Outstanding Amount of the Highest Priority Obligations may
declare all the Outstanding Obligations to be
55
immediately due and payable, by a notice in writing to the Issuer (and to the
Trustee if given by Registered Owners), and upon any such declaration the unpaid
principal amount of such Outstanding Obligations, together with accrued and
unpaid interest thereon through the date of acceleration, shall become
immediately due and payable, subject, however, to Section 6.04 hereof.
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 Trustee as hereinafter in this Article provided, the Registered
Owners of Obligations representing a majority of the collective aggregate
principal amount of the Highest Priority Obligations then Outstanding, by
written notice to the Issuer and the Trustee, may rescind and annul such
declaration and its consequences if:
(a) the Issuer has paid or deposited with the Trustee a sum
sufficient to pay:
(i) all payments of principal of and interest on all
Obligations and all other amounts that would then be due hereunder or
upon such Obligations if the Event of Default giving rise to such
acceleration had not occurred; and
(ii) all sums paid or advanced by the Trustee hereunder and
the reasonable compensation, expenses, disbursements and advances of
the Trustee, the Master Servicer, any Subservicer, the Delaware
Trustee and their agents and counsel; and
(b) all Events of Default, other than the nonpayment of the principal
of the Obligations that has become due solely by such acceleration, have
been cured or waived as provided in Section 6.14 hereof.
No such rescission shall affect any subsequent default or impair any right
consequent thereto.
SECTION 6.09. REMEDIES NOT EXCLUSIVE. The remedies herein conferred upon or
reserved to the Trustee or the Registered Owners of Obligations are not intended
to be exclusive of any other remedy, but each remedy herein provided shall be
cumulative and shall be in addition to every other remedy given hereunder or now
or hereafter existing, and every power and remedy hereby given to the Trustee or
to the Registered Owners of Obligations, or any supplement hereto, may be
exercised from time to time as often as may be deemed expedient. No delay or
omission of the Trustee or of any Registered Owner of Obligations to exercise
any power or right arising from any default hereunder shall impair any such
right or power or shall be construed to be a waiver of any such default or to be
acquiescence therein.
SECTION 6.10. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE. The Issuer covenants that if:
(a) default is made in the payment of any installment of interest, if
any, on any Notes when such interest becomes due and payable and such
default continues for a period of five (5) days; or
56
(b) default is made in the payment of the principal of (or premium,
if any, on) any Notes at its Note Final Maturity Date,
then the Issuer will, upon demand of the Trustee, pay to the Trustee, for the
benefit of the Registered Owners, the whole amount then due and payable on such
Notes for principal (and premium, if any) and interest, with interest upon any
overdue principal (and premium, if any) and, to the extent that payment of such
interest shall be legally enforceable, upon any overdue installments of
interest, if any, at the rate or rates borne by or provided for in such Notes,
and, in addition thereto, such further amount as shall be sufficient to cover
the costs and expenses of collection, including the reasonable compensation,
fees, expenses, disbursements and advances of the Trustee and its agents and
counsel.
If the Issuer fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as Trustee of an express trust, may upon receiving
indemnification satisfactory to the Trustee institute a judicial proceeding for
the collection of the sums so due and unpaid, may prosecute such proceeding to
judgment or final decree, and may enforce the same against the Issuer or any
other obligor upon such Notes of such class and collect the moneys adjudged or
decreed to be payable in the manner provided by law out of the property of the
Issuer or any other obligor upon such Notes, wherever situated.
If an Event of Default with respect to Notes occurs and is continuing, the
Trustee may, after being indemnified to its satisfaction and in its discretion,
proceed to protect and enforce its rights and the rights of the Registered
Owners of Notes by such appropriate judicial proceedings as the Trustee shall
deem most effectual to protect and enforce any such rights, whether for the
specific enforcement of any covenant or agreement in this Indenture or in aid of
the exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 6.11. DIRECTION OF TRUSTEE. Upon the happening of any Event of
Default, the Registered Owners of at least 51% of the collective aggregate
principal amount of the Highest Priority Obligations then Outstanding, shall
have the right by an instrument or instruments in writing delivered to the
Trustee to direct and control the Trustee as to the method of taking any and all
proceedings for any sale of any or all of the Trust Estate, or for the
appointment of a receiver, if permitted by law, and may at any time cause any
proceedings authorized by the terms hereof to be so taken or to be discontinued
or delayed; provided, however, that such Registered Owners shall not be entitled
to cause the Trustee to take any proceedings which in the Trustee's opinion
would be unjustly prejudicial to non-assenting Registered Owners of Obligations,
but the Trustee shall be entitled to assume that the action requested by the
Registered Owners of at least 51% of the collective aggregate principal amount
of the Highest Priority Obligations then Outstanding will not be prejudicial to
any non-assenting Registered Owners unless the Registered Owners of more than
50% of the collective aggregate principal amount of the non-assenting Registered
Owners of such Obligations, in writing, show the Trustee how they will be
prejudiced. Provided, however, that anything in this Indenture to the contrary
notwithstanding, the Registered Owners of a majority of the collective aggregate
principal amount of the Highest Priority Obligations then Outstanding together
with the Registered Owners of a majority of the collective aggregate principal
amount of all other Obligations then Outstanding shall have the right, at any
time, by an instrument or instruments in writing executed and delivered to the
Trustee, to direct the method and place of conducting all proceedings to be
57
taken in connection with the enforcement of the terms and conditions of this
Indenture, or for the appointment of a receiver or any other proceedings
hereunder, provided that such direction shall not be otherwise than in
accordance with the provisions of law and of this Indenture. The provisions of
this Section shall be expressly subject to the provisions of Sections 7.01(c),
7.05 and 7.07 hereof.
SECTION 6.12. RIGHT TO ENFORCE IN TRUSTEE. No Registered Owner of any
Obligation shall have any right as such Registered Owner to institute any suit,
action or proceedings for the enforcement of the provisions of this Indenture or
for the execution of any trust hereunder or for the appointment of a receiver or
for any other remedy hereunder, all rights of action hereunder being vested
exclusively in the Trustee, unless and until such Registered Owner shall have
previously given to the Trustee written notice of a default hereunder, and of
the continuance thereof, and also unless the Registered Owners of the requisite
principal amount of the Obligations then Outstanding shall have made written
request upon the Trustee and the Trustee shall have been afforded reasonable
opportunity to institute such action, suit or proceeding in its own name, and
unless the Trustee shall have been offered indemnity and security satisfactory
to it against the costs, expenses and liabilities to be incurred therein or
thereby, which offer of indemnity shall be an express condition precedent
hereunder to any obligation of the Trustee to take any such action hereunder,
and the Trustee for 30 days after receipt of such notification, request and
offer of indemnity, shall have failed to institute any such action, suit or
proceeding. It is understood and intended that no one or more Registered Owners
of the Obligations shall have the right in any manner whatever by his or their
action to affect, disturb or prejudice the lien of this Indenture or to enforce
any right hereunder except in the manner herein provided and for the equal
benefit of the Registered Owners of not less than a majority of the collective
aggregate principal amount of the Obligations then Outstanding.
SECTION 6.13. PHYSICAL POSSESSION OF OBLIGATIONS NOT REQUIRED. In any suit
or action by the Trustee arising under this Indenture or on all or any of the
Obligations issued hereunder, or any supplement hereto, the Trustee shall not be
required to produce such Obligations, but shall be entitled in all things to
maintain such suit or action without their production.
SECTION 6.14. WAIVERS OF EVENTS OF DEFAULT. The Trustee may in its
discretion waive any Event of Default hereunder and its consequences and rescind
any declaration of acceleration of Obligations, and shall do so upon the written
request of the Registered Owners of at least a majority of the collective
aggregate principal amount of the Highest Priority Obligations then Outstanding;
provided, however, that there shall not be waived (a) any Event of Default in
the payment of the principal of or premium on any Outstanding Obligations at the
date of maturity thereof, or any default in the payment when due of the interest
on any such Obligations, unless prior to such waiver or rescission, all arrears
of interest or all arrears of payments of principal and all expenses of the
Trustee, in connection with such default shall have been paid or provided for;
or (b) any default in the payment of amounts set forth in Sections 7.05 and 7.07
hereof. In case of any such waiver or rescission, or in case any proceedings
taken by the Trustee on account of any such default shall have been discontinued
or abandoned or determined adversely to the Trustee, then and in every such case
the Issuer, the Trustee and the Registered Owners of Obligations shall be
restored to their former positions and rights hereunder respectively, but no
such waiver or rescission shall extend to or affect any subsequent or other
default, or impair any
58
rights or remedies consequent thereon. The Trustee shall give written notice to
the Rating Agency of any waiver of an Event of Default pursuant to this Section.
ARTICLE VII
THE TRUSTEE
SECTION 7.01. ACCEPTANCE OF TRUST. The Trustee hereby accepts the trusts
imposed upon it by this Indenture, and agrees to perform said trusts, but only
upon and subject to the following terms and conditions:
(a) Except during the continuance of an Event of Default,
(i) the Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture, and no
implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements
of this Indenture; but in the case of any such certificates or
opinions which by any provisions hereof are specifically required to
be furnished to the Trustee, the Trustee shall be under a duty to
examine the same to determine whether or not they conform as to form
with the requirements of this Indenture and whether or not they
contain the statements required under this Indenture.
(b) In case an Event of Default has occurred and is continuing, the
Trustee, in exercising the rights and powers vested in it by this
Indenture, shall use the same degree of care and skill in their exercise as
a prudent person would exercise or use under the circumstances in the
conduct of his or her own affairs.
(c) Before taking any action hereunder requested by Registered
Owners, the Trustee may require that it be furnished an indemnity bond or
other indemnity and security satisfactory to it by the Registered Owners,
as applicable, for the reimbursement of all expenses to which it may be put
and to protect it against all liability.
SECTION 7.02. RECITALS OF OTHERS. The recitals, statements and
representations set forth herein and in the Notes shall be taken as the
statements of the Issuer, and the Trustee assumes no responsibility for the
correctness of the same. The Trustee makes no representations as to the title of
the Issuer in the Trust Estate or as to the security afforded thereby and
hereby, or as to the validity or sufficiency of this Indenture or of the Notes
issued hereunder, and the Trustee shall incur no responsibility in respect of
such matters.
SECTION 7.03. AS TO FILING OF INDENTURE. The Trustee shall be under no duty
(a) to file or record, or cause to be filed or recorded, this Indenture or any
instrument supplemental hereto, (b) or to procure any further order or
additional instruments of further assurance, (c) to see to the delivery to it of
any personal property intended to be mortgaged or pledged hereunder or
59
thereunder, (d) or to do any act which may be suitable to be done for the better
maintenance of the lien or security hereof (other than the filing of any
continuation (but not initial) statements), or (e) for giving notice of the
existence of such lien, or for extending or supplementing the same or to see
that any rights to the Trust Estate and Funds intended now or hereafter to be
transferred in trust hereunder are subject to the lien hereof. The Trustee shall
not be liable for failure of the Issuer to pay any tax or taxes in respect of
such property, or any part thereof, or the income therefrom or otherwise, nor
shall the Trustee be under any duty in respect of any tax which may be assessed
against it or the Registered Owners in respect of such property or pledged to
the Trust Estate. The Trustee agrees to prepare, request that the Issuer execute
(if such execution is necessary for any such filing) and file in a timely manner
(if received from the Issuer in a timely manner) with any necessary execution by
the Issuer, the continuation statements referred to herein; provided, that the
Trustee shall have no responsibility for the sufficiency, adequacy or priority
of any initial filing and in the absence of written notice to the contrary by
the Issuer or other Authorized Representative, may rely and shall be protected
in relying on all information and exhibits in such initial filings for the
purposes of any continuation statements.
SECTION 7.04. TRUSTEE MAY ACT THROUGH AGENTS. The Trustee may execute any
of the trusts or powers hereof and perform any duty hereunder, either itself or
by or through its attorneys, agents or employees, and it shall not be answerable
or accountable for any default, neglect or misconduct of any such attorneys,
agents or employees, if reasonable care has been exercised in the appointment,
supervision and monitoring of the work performed. All reasonable costs incurred
by the Trustee and all reasonable compensation to all such persons as may
reasonably be employed in connection with the trusts hereof shall be paid by the
Issuer.
SECTION 7.05. INDEMNIFICATION OF TRUSTEE. Other than with respect to its
duties to make payment on the Obligations when due, and its duty to pursue the
remedy of acceleration as provided in Sections 6.02 and 6.08 hereof, for each of
which no additional security or indemnity may be required, the Trustee shall be
under no obligation or duty to perform any act at the request of Registered
Owners or to institute or defend any suit in respect thereof unless properly
indemnified and provided with security to its satisfaction as provided in
Section 7.01(c) hereof. The Trustee shall not be required to take notice, or be
deemed to have knowledge, of any default or Event of Default of the Issuer
hereunder and may conclusively assume that there has been no such default or
Event of Default (other than an Event of Default described in Section 6.01(a) or
(b) hereof) unless and until it shall have been specifically notified in writing
at the address in Section 9.01 hereof of such default or Event of Default by (a)
the Registered Owners of the required percentages in principal amount of the
Obligations then Outstanding hereinabove specified or (b) an Authorized
Representative of the Issuer. However, the Trustee may begin suit, or appear in
and defend suit, execute any of the trusts hereby created, enforce any of its
rights or powers hereunder, or do anything else in its judgment proper to be
done by it as Trustee, without assurance of reimbursement or indemnity, and in
such case the Trustee shall be reimbursed or indemnified by the Registered
Owners requesting such action, if any, or the Issuer in all other cases, for all
fees, costs and expenses, liabilities, outlays and counsel fees and other
reasonable disbursements properly incurred in connection therewith, unless such
costs and expenses, liabilities, outlays and attorneys' fees and other
reasonable disbursements properly incurred in connection therewith are
adjudicated to have resulted from the negligence or willful misconduct of the
Trustee. In furtherance and not in limitation of this Section, the Trustee shall
not be liable for, and shall be held harmless by the Issuer from, following any
Issuer Orders,
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instructions or other directions upon which the Trustee is authorized to rely
pursuant to this Indenture or any other agreement to which it is a party. If the
Issuer or the Registered Owners, as appropriate, shall fail to make such
reimbursement or indemnification, the Trustee may reimburse itself from any
money in its possession under the provisions of this Indenture, subject only to
the prior lien of the Notes for the payment of the principal thereof, premium,
if any, and interest thereon from the Collection Fund. None of the provisions
contained in this Indenture or any other agreement to which it is a party shall
require the Trustee to act or to expend or risk its own funds or otherwise incur
individual financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers if the Registered Owners shall not have
offered security and indemnity acceptable to it or if it shall have reasonable
grounds for believing that prompt repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured to it.
The Issuer agrees to indemnify the Trustee for, and to hold it harmless
against, any loss, liability or expenses incurred without negligence or bad
faith 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 arising
from the Trust Estate. The Issuer agrees to indemnify and hold harmless the
Trustee against any and all claims, demands, suits, actions or other proceedings
and all liabilities, costs and expenses whatsoever caused by any untrue
statement or misleading statement or alleged untrue statement or alleged
misleading statement of a material fact contained in any offering document
distributed in connection with the issuance of the Notes or caused by any
omission or alleged omission from such offering document of any material fact
required to be stated therein or necessary in order to make the statements made
therein in the light of the circumstances under which they were made, not
misleading.
SECTION 7.06. TRUSTEE'S RIGHT TO RELIANCE. The Trustee shall be protected
in acting upon any notice, resolution, request, consent, order, certificate,
report, appraisal, opinion, report or document of the Issuer, the Master
Servicer or a Subservicer or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or parties. The
Trustee may consult with experts and with counsel (who may but need not be
counsel for the Issuer, the Trustee, or for a Registered Owner), and the opinion
of such counsel shall be full and complete authorization and protection in
respect of any action taken or suffered, and in respect of any determination
made by it hereunder in good faith and in accordance with the opinion of such
counsel.
Whenever in the administration hereof the Trustee shall reasonably deem it
desirable that a matter be proved or established prior to taking, suffering or
omitting any action hereunder, the Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its part, rely upon
a certificate signed by an Authorized Representative of the Issuer or an
authorized officer of the Administrator, the Master Servicer or a Subservicer.
The Trustee shall not be liable for any action taken, suffered or omitted
by it in good faith and believed by it to be authorized or within the discretion
or rights or powers conferred upon it hereby; provided, however, that the
Trustee shall be liable for its negligence or willful misconduct in taking such
action.
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The Trustee is authorized to enter into agreements with other Persons, in
its capacity as Trustee, in order to carry out or implement the terms and
provisions of this Indenture. The Trustee shall not be liable with respect to
any action taken, suffered or omitted to be taken in good faith in accordance
with this Indenture or any other transaction document or at the direction of the
Registered Owners evidencing the appropriate percentage of the aggregate
principal amount of the Outstanding Notes relating to the time, method and place
of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this Indenture
or any other transaction document.
SECTION 7.07. COMPENSATION OF TRUSTEE. Except as otherwise expressly
provided herein, all advances, counsel fees (including without limitation
allocated fees of in-house counsel) and other expenses reasonably made or
incurred by the Trustee in and about the execution and administration of the
trust hereby created and reasonable compensation to the Trustee for its services
in the premises shall be paid by the Issuer. The compensation of the Trustee
shall not be limited to or by any provision of law in regard to the compensation
of trustees of an express trust. The Trustee shall not change the amount of its
annual compensation without giving the Issuer and the Rating Agency at least 90
days' written notice prior to the beginning of a Fiscal Year. If not paid by the
Issuer, the Trustee shall have a lien against all money held pursuant to this
Indenture, subject only to the prior lien of the Obligations against the money
and investments in the Collection Fund for the payment of the principal thereof,
premium, if any, and interest thereon, for such reasonable compensation,
expenses, advances and counsel fees incurred in and about the execution of the
trusts hereby created and the exercise and performance of the powers and duties
of the Trustee hereunder and the cost and expense incurred in defending against
any liability in the premises of any character whatsoever (unless such liability
is adjudicated to have resulted from the negligence or willful misconduct of the
Trustee).
SECTION 7.08. CREDITOR RELATIONSHIPS. The Trustee shall comply with Section
311(a) of the Trust Indenture Act, excluding any creditor relationship listed in
Section 311(b) of the Trust Indenture Act. A Trustee who has resigned or been
removed shall be subject to Section 311(a) of the Trust Indenture Act to the
extent indicated therein. The Trustee may act as depository for, and permit any
of its officers or directors to act as a member of, or act in any other capacity
in respect to, any committee formed to protect the rights of the Registered
Owners or to effect or aid in any reorganization growing out of the enforcement
of the Notes or of this Indenture, whether or not any such committee shall
represent the Registered Owners of more than 60% of the collective aggregate
principal amount of the Outstanding Obligations.
SECTION 7.09. RESIGNATION OF TRUSTEE. The Trustee and any successor to the
Trustee may resign and be discharged from the trust created by this Indenture by
giving to the Issuer notice in writing which notice shall specify the date on
which such resignation is to take effect; provided, however, that such
resignation shall only take effect on the day specified in such notice if a
successor Trustee shall have been appointed pursuant to Section 7.11 hereof (and
is qualified to be the Trustee under the requirements of Section 7.11 hereof).
If no successor Trustee has been appointed by the date specified or within a
period of 90 days from the receipt of the notice by the Issuer, whichever period
is the longer, the Trustee may (a) appoint a temporary successor Trustee having
the qualifications provided in Section 7.11 hereof or (b) request a court of
competent jurisdiction to (i) require the Issuer to appoint a successor, as
provided in Section 7.11 hereof, within three days of the receipt of citation or
notice by the court, or (ii) appoint a Trustee
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having the qualifications provided in Section 7.11 hereof. In no event may the
resignation of the Trustee be effective until a qualified successor Trustee
shall have been selected and appointed. In the event a temporary successor
Trustee is appointed pursuant to clause (a) above, the Issuer may remove such
temporary successor Trustee and appoint a successor thereto pursuant to Section
7.11 hereof.
SECTION 7.10. REMOVAL OF TRUSTEE. The Trustee or any successor Trustee may
be removed (a) at any time by the Registered Owners of a majority of the
collective aggregate principal amount of the Highest Priority Obligations then
Outstanding, (b) by the Issuer for cause or upon the sale or other disposition
of the Trustee or its corporate trust functions or (c) by the Issuer without
cause so long as no Event of Default exists or has existed within the last 30
days, upon payment to the Trustee so removed of all money then due to it
hereunder and appointment of a successor thereto by the Issuer and acceptance
thereof by said successor. One copy of any such order of removal shall be filed
with the Delaware Trustee and the other with the Trustee so removed.
In the event a Trustee (or successor Trustee) is removed, by any person or
for any reason permitted hereunder, such removal shall not become effective
until (a) in the case of removal by the Registered Owners, such Registered
Owners by instrument or concurrent instruments in writing (signed and
acknowledged by such Registered Owners or their attorneys-in-fact) filed with
the Trustee removed have appointed a successor Trustee or otherwise the Issuer
shall have appointed a successor, and (b) the successor Trustee has accepted
appointment as such.
SECTION 7.11. SUCCESSOR TRUSTEE. In case at any time the Trustee or any
successor Trustee shall resign, be dissolved, or otherwise shall be disqualified
to act or be incapable of acting, or in case control of the Trustee or of any
successor Trustee or of its officers shall be taken over by any public officer
or officers, a successor Trustee may be appointed by the Issuer by an instrument
in writing duly authorized by the Issuer. In the case of any such appointment by
the Issuer of a successor to the Trustee, the Issuer shall forthwith cause
notice thereof to be mailed to the Registered Owners of the Notes at the address
of each Registered Owner appearing on the note registration books maintained by
the Registrar.
Every successor Trustee appointed by the Registered Owners, by a court of
competent jurisdiction, or by the Issuer shall be a bank or trust company in
good standing, organized and doing business under the laws of the United States
or of a state therein, which has a reported capital and surplus of not less than
$50,000,000, be authorized under the law to exercise corporate trust powers, be
subject to supervision or examination by a federal or state authority, and be an
Eligible Lender so long as such designation is necessary to maintain guarantees
and federal benefits under the Higher Education Act with respect to the Financed
Eligible Loans originated under the Higher Education Act.
SECTION 7.12. MANNER OF VESTING TITLE IN TRUSTEE. Any successor Trustee
appointed hereunder shall execute, acknowledge and deliver to its predecessor
Trustee, and also to the Issuer, an instrument accepting such appointment
hereunder, and thereupon such successor Trustee, without any further act, deed
or conveyance shall become fully vested with all the estate, properties, rights,
powers, trusts, duties and obligations of its predecessors in trust hereunder
(except that the predecessor Trustee shall continue to have the benefits to
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indemnification hereunder together with the successor Trustee), with like effect
as if originally named as Trustee herein; but the Trustee ceasing to act shall
nevertheless, on the written request of an Authorized Representative of the
Issuer, or an authorized officer of the successor Trustee, execute, acknowledge
and deliver such instruments of conveyance and further assurance and do such
other things as may reasonably be required for more fully and certainly vesting
and confirming in such successor Trustee all the right, title and interest of
the Trustee which it succeeds, in and to the Trust Estate and such rights,
powers, trusts, duties and obligations, and the Trustee ceasing to act also,
upon like request, pay over, assign and deliver to the successor Trustee any
money or other property or rights subject to the lien of this Indenture,
including any pledged securities which may then be in its possession. Should any
deed or instrument in writing from the Issuer be required by the successor
Trustee for more fully and certainly vesting in and confirming to such new
Trustee such estate, properties, rights, powers and duties, any and all such
deeds and instruments in writing shall on request be executed, acknowledged and
delivered by the Issuer.
In case any of the Notes to be issued hereunder shall have been
authenticated but not delivered, any successor Trustee may adopt the certificate
of authentication of the Trustee or of any successor to the Trustee; and in case
any of the Notes shall not have been authenticated, any successor to the Trustee
may authenticate such Notes in its own name; and in all such cases such
certificate shall have the full force which it has anywhere in the Notes or in
this Indenture.
SECTION 7.13. ADDITIONAL COVENANTS BY THE TRUSTEE TO CONFORM TO THE HIGHER
EDUCATION ACT. The Trustee covenants that it will at all times be an Eligible
Lender under the Higher Education Act so long as such designation is necessary,
as determined by the Issuer, to maintain the guarantees and federal benefits
under the Higher Education Act with respect to the Financed Eligible Loans, that
it will acquire Eligible Loans originated under the Higher Education Act in its
capacity as an Eligible Lender and that it will not knowingly dispose of or
deliver any Financed Eligible Loans originated under the Higher Education Act or
any security interest in any such Financed Eligible Loans to any party who is
not an Eligible Lender so long as the Higher Education Act or Regulations
adopted thereunder require an Eligible Lender to be the owner or holder of such
Financed Eligible Loans; provided, however, that nothing above shall prevent the
Trustee from delivering the Eligible Loans to the Master Servicer, a Subservicer
or a Guaranty Agency.
SECTION 7.14. RIGHT OF INSPECTION. A Registered Owner shall be permitted at
reasonable times during regular business hours and in accordance with reasonable
regulations prescribed by the Trustee to examine at the principal office of the
Trustee a copy of any report or instrument theretofore filed with the Trustee
relating to the condition of the Trust Estate.
SECTION 7.15. LIMITATION WITH RESPECT TO EXAMINATION OF REPORTS. Except as
provided in this Indenture, the Trustee shall be under no duty to examine any
report or statement or other document required or permitted to be filed with it
by the Issuer.
SECTION 7.16. SERVICING AGREEMENTS. The Trustee acknowledges the receipt of
copies of the Master Servicing Agreement and Subservicing Agreements described
in Section 4.04 hereof.
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SECTION 7.17. ADDITIONAL COVENANTS OF TRUSTEE. The Trustee, by the
execution hereof, covenants, represents and agrees that:
(a) it will not exercise any of the rights, duties or privileges
under this Indenture in such manner as would cause the Eligible Loans held
or acquired under the terms hereof to be transferred, assigned or pledged
as security to any person or entity other than as permitted by this
Indenture; and
(b) it will comply with the Higher Education Act and the Regulations
and will, upon written notice from an Authorized Representative of the
Issuer, the Secretary or the Guaranty Agency, use its reasonable efforts to
cause this Indenture to be amended (in accordance with Section 8.01 hereof)
if the Higher Education Act or Regulations are hereafter amended so as to
be contrary to the terms of this Indenture.
SECTION 7.18. DUTY OF TRUSTEE WITH RESPECT TO RATING AGENCIES. It shall be
the duty of the Issuer to notify each Rating Agency then rating any of the Notes
(but the Trustee shall incur no liability for any failure to do so) of (a) any
amendment, change, expiration, extension or renewal of this Indenture, (b)
prepayment or defeasance of all the Notes, (c) any change in the Trustee or (d)
any other information reasonably required to be reported to each Rating Agency
under any Supplemental Indenture; provided, however, the provisions of this
Section do not apply when such documents have been previously supplied to such
Rating Agency and the Trustee has received written evidence to such effect, all
as may be required by this Indenture. All notices required to be forwarded to
the Rating Agencies under this Section shall be sent in writing at the following
addresses:
Standard & Poor's Ratings Services,
a Division of the McGraw-Hill Companies, Inc.
55 Water Street
New York, New York 10041
Attention: Asset-Backed Surveillance Group
Fitch, Inc.
One State Street Plaza
New York, New York 10004
Attention: ABS Surveillance
Moody's Investors Service
99 Church Street
New York, New York 10007
Attention: ABS Monitoring Group
The Trustee also acknowledges that each Rating Agency's periodic review for
maintenance of a Rating on any series of the Notes may involve discussions
and/or meetings with representatives of the Trustee at mutually agreeable times
and places.
SECTION 7.19. MERGER OF THE TRUSTEE. Any corporation into which the Trustee
may be merged or with which it may be consolidated, or any corporation resulting
from any merger or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or
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substantially all of the corporate trust business of the Trustee, shall be the
successor of the Trustee hereunder, provided such corporation shall be otherwise
qualified and eligible under this Indenture, without the execution or filing of
any paper of any further act on the part of any other parties hereto.
SECTION 7.20. RECEIPT OF FUNDS FROM MASTER SERVICER OR A SUBSERVICER. The
Trustee shall not be accountable or responsible in any manner whatsoever for any
action of the Issuer, the Administrator, the depository bank of any funds of the
Issuer, or the Master Servicer or a Subservicer while such Master Servicer or
Subservicer is acting as bailee or agent of the Trustee with respect to the
Eligible Loans for actions taken in compliance with any instruction or direction
given to the Trustee, or for the application of funds or moneys by the Master
Servicer or a Subservicer until such time as funds are received by the Trustee.
SECTION 7.21. SPECIAL CIRCUMSTANCES LEADING TO RESIGNATION OF TRUSTEE.
Because the Trustee serves as trustee hereunder for Obligations of different
priorities, it is possible that circumstances may arise which will cause the
Trustee to resign from its position as trustee for one or more of the
Obligations. In the event that the Trustee makes a determination that it should
so resign, due to the occurrence of an Event of Default or potential default
hereunder, or otherwise, the Issuer may permit such resignation as to one or
more of the Obligations or request the Trustee's resignation as to all
Obligations, as the Issuer may elect. If the Issuer should determine that a
conflict of interest has arisen as to the trusteeship of any of the Obligations,
it may authorize and execute a Supplemental Indenture with one or more successor
Trustees, under which the administration of certain of the Obligations would be
separated from the administration of the other Obligations.
SECTION 7.22. SURVIVAL OF TRUSTEE'S RIGHTS TO RECEIVE COMPENSATION,
REIMBURSEMENT AND INDEMNIFICATION. The Trustee's rights to receive compensation,
reimbursement and indemnification of money due and owing hereunder at the time
of the Trustee's resignation or removal shall survive the Trustee's resignation
or removal.
SECTION 7.23. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY; CONFLICTING
INTERESTS. There shall at all times be a Trustee hereunder which shall be
eligible to act as Trustee under Section 310(a)(1) of the Trust Indenture Act
and shall have a combined capital and surplus of at least $50,000,000. If such
corporation publishes reports of condition at least annually, pursuant to law or
the requirements of federal, state, territorial or District of Columbia
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, it shall resign immediately in
the manner and with the effect hereinafter specified in this Article. Neither
the Issuer nor any Person directly or indirectly controlling or controlled by,
or under common control with, the Issuer shall serve as Trustee.
SECTION 7.24. TRUSTEE MAY FILE PROOFS OF CLAIM. In case of the pendency of
any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
the Issuer or any other obligor upon the Notes or the property of the Issuer or
of such other obligor or their creditors, the Trustee
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(irrespective of whether the principal of the Notes of any series shall then be
due and payable as therein expressed or by declaration or otherwise and
irrespective of whether the Trustee shall have made any demand on the Issuer for
the payment of overdue principal, premium, if any, or interest) shall be
entitled and empowered, by intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount, or such lesser
amount as may be provided for in the Notes, of principal (and premium, if
any) and interest, if any, owing and unpaid in respect of the Notes and to
file such other papers or documents as may be necessary or advisable in
order to have the claims of the Trustee (including any claim for the
reasonable fees, compensation, expenses, disbursements and advances of the
Trustee and its agents and counsel) and of the Registered Owners allowed in
such judicial proceeding; and
(b) to collect and receive any money or other property payable or
deliverable on any such claims and to distribute the same; and any
custodian, receiver, assignee, trustee, liquidator, sequestrator (or other
similar official) in any such judicial proceeding is hereby authorized by
each Registered Owner of Notes to make such payments to the Trustee, and if
the Trustee shall consent to the making of such payments directly to the
Registered Owners, to pay to the Trustee any amount due to it for the
reasonable fees, compensation, expenses, disbursements and advances of the
Trustee and any predecessor Trustee, their agents and counsel, and any
other amounts due the Trustee or any predecessor Trustee.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Registered Owner of
a Note any plan of reorganization, arrangement, adjustment or composition
affecting the Notes or the rights of any Registered Owner thereof, or to
authorize the Trustee to vote in respect of the claim of any Registered Owner of
a Note in any such proceeding.
In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party), the Trustee shall be held to represent all the
Registered Owners of the Notes, and it shall not be necessary to make any
Registered Owners of the Notes parties to any such proceedings.
SECTION 7.25. NO PETITION. The Trustee will not at any time institute
against the Issuer any bankruptcy proceeding under any United States federal or
State bankruptcy or similar law in connection with any obligations of the Issuer
under this Indenture.
ARTICLE VIII
SUPPLEMENTAL INDENTURES
SECTION 8.01. SUPPLEMENTAL INDENTURES NOT REQUIRING CONSENT OF REGISTERED
OWNERS. The Issuer and the Trustee may, without the consent of or notice to any
of the Registered Owners of any Obligations enter into any indenture or
indentures supplemental to this Indenture for any one or more of the following
purposes:
(a) to cure any ambiguity or formal defect or omission in this
Indenture;
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(b) to grant to or confer upon the Trustee for the benefit of the
Registered Owners any additional benefits, rights, remedies, powers or
authorities that may lawfully be granted to or conferred upon the
Registered Owners or the Trustee;
(c) to subject to this Indenture additional revenues, properties or
collateral;
(d) to modify, amend or supplement this Indenture or any indenture
supplemental hereto in such manner as to permit the qualification hereof
and thereof under the Trust Indenture Act of 1939 or any similar federal
statute hereafter in effect or to permit the qualification of the Notes for
sale under the securities laws of the United States of America or of any of
the states of the United States of America, and, if they so determine, to
add to this Indenture or any indenture supplemental hereto such other
terms, conditions and provisions as may be permitted by said Trust
Indenture Act of 1939 or similar federal statute;
(e) to evidence the appointment of a separate or co-Trustee or a
co-registrar or transfer agent or the succession of a new Trustee
hereunder, or any additional or substitute Guaranty Agency, the Master
Servicer or a Subservicer;
(f) to add such provisions to or to amend such provisions of this
Indenture as may be necessary or desirable to assure implementation of the
Program in conformance with the Higher Education Act if along with such
Supplemental Indenture there is filed an opinion of counsel to the effect
that the addition or amendment of such provisions will in no way impair the
existing security of the Registered Owners of any Outstanding Obligations;
(g) to make any change as shall be necessary in order to obtain and
maintain for any of the Notes an investment grade Rating from a nationally
recognized rating service, which changes, in the opinion of the Trustee are
not to the prejudice of the Registered Owner of any of the Obligations;
(h) to make any changes necessary to comply with the Higher Education
Act, the Regulations or the Code and the regulations promulgated
thereunder;
(i) to make the terms and provisions of this Indenture, including the
lien and security interest granted herein, applicable to a Derivative
Product, and to modify this Indenture with respect to any particular
Derivative Product;
(j) to create any additional Funds or Accounts or Subaccounts under
this Indenture deemed by the Trustee to be necessary or desirable;
(k) to make any other change with a Rating Confirmation; or
(l) to make any other change which, in the judgment of the Trustee is
not to the material prejudice of the Registered Owners of any Obligations;
provided, however, that nothing in this Section shall permit, or be construed as
permitting, any modification of the trusts, powers, rights, duties, remedies,
immunities and privileges of the
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Trustee without the prior written approval of the Trustee, which approval shall
be evidenced by execution of a Supplemental Indenture.
SECTION 8.02. SUPPLEMENTAL INDENTURES REQUIRING CONSENT OF REGISTERED
OWNERS. Exclusive of Supplemental Indentures covered by Section 8.01 hereof and
subject to the terms and provisions contained in this Section, and not
otherwise, the Registered Owners of not less than a majority of the collective
aggregate principal amount of the Obligations then Outstanding shall have the
right, from time to time, to consent to and approve the execution by the Issuer
and the Trustee of such other indenture or indentures supplemental hereto as
shall be deemed necessary and desirable by the Trustee for the purpose of
modifying, altering, amending, adding to or rescinding, in any particular, any
of the terms or provisions contained in this Indenture or in any Supplemental
Indenture; provided, however, that nothing in this Section shall permit, or be
construed as permitting (a) without the consent of the Registered Owners of all
then Outstanding Obligations, (i) an extension of the maturity date of the
principal of or the interest on any Obligation, or (ii) a reduction in the
principal amount of any Obligation or the rate of interest thereon, or (iii) a
privilege or priority of any Obligation or Obligations over any other Obligation
or Obligations except as otherwise provided herein, or (iv) a reduction in the
aggregate principal amount of the Obligations required for consent to such
Supplemental Indenture, or (v) the creation of any lien other than a lien
ratably securing all of the Obligations at any time Outstanding hereunder except
as otherwise provided herein; or (b) any modification of the trusts, powers,
rights, obligations, duties, remedies, immunities and privileges of the Trustee
without the prior written approval of the Trustee.
If at any time the Issuer shall request the Trustee to enter into any such
Supplemental Indenture for any of the purposes of this Section, the Trustee
shall, upon being satisfactorily indemnified with respect to expenses, cause
notice of the proposed execution of such Supplemental Indenture to be mailed by
registered or certified mail to each Registered Owner of an Obligation at the
address shown on the registration books or listed in any Derivative Product.
Such notice (which shall be prepared by the Issuer) shall briefly set forth the
nature of the proposed Supplemental Indenture and shall state that copies
thereof are on file at the principal corporate trust office of the Trustee for
inspection by all Registered Owners. If, within 60 days, or such longer period
as shall be prescribed by the Issuer, following the mailing of such notice, the
Registered Owners of not less than a majority of the collective aggregate
principal amount of the Obligations Outstanding at the time of the execution of
any such Supplemental Indenture shall have consented in writing to and approved
the execution thereof as herein provided, no Registered Owner of any Obligation
shall have any right to object to any of the terms and provisions contained
therein, or the operation thereof, or in any manner to question the propriety of
the execution thereof, or to enjoin or restrain the Trustee or the Issuer from
executing the same or from taking any action pursuant to the provisions thereof.
Upon the execution of any such Supplemental Indenture as in this Section
permitted and provided, this Indenture shall be and be deemed to be modified and
amended in accordance therewith.
SECTION 8.03. ADDITIONAL LIMITATION ON MODIFICATION OF INDENTURE. None of
the provisions of this Indenture (including Sections 8.01 and 8.02 hereof) shall
permit an amendment to the provisions of the Indenture which permits the
transfer of all or part of the Financed Eligible Loans originated under the
Higher Education Act or granting of a security interest therein to any Person
other than an Eligible Lender, the Master Servicer or a Subservicer, unless
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the Higher Education Act or Regulations are hereafter modified so as to permit
the same. The Trustee may request an opinion of counsel to the effect that an
amendment or supplement to this Indenture was adopted in conformance with this
Indenture.
SECTION 8.04. NOTICE OF DEFAULTS. Within 90 days after the occurrence of
any default hereunder with respect to the Notes, the Trustee shall transmit in
the manner and to the extent provided in Section 313(c) of the Trust Indenture
Act, notice of such default hereunder known to the Trustee, unless such default
shall have been cured or waived; provided, however, that, except in the case of
a default in the payment of the principal of (or premium, if any) or interest
with respect to any Note, or in the payment of any sinking fund installment with
respect to the Notes, the Trustee shall be protected in withholding such notice
if and so long as an authorized officer of the Trustee in good faith determine
that the withholding of such notice is in the interest of the Registered Owners
of the Notes. For the purpose of this Section, the term "default" means any
event which is, or after notice or lapse of time or both would become, an Event
of Default with respect to the Notes.
SECTION 8.05. CONFORMITY WITH THE TRUST INDENTURE ACT. Every supplemental
indenture executed pursuant to this Article shall conform to the requirements of
the Trust Indenture Act as then in effect.
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01. NOTICES. Any notice, request or other instrument required by
this Indenture to be signed or executed by the Registered Owners of Obligations
may be executed by the execution of any number of concurrent instruments of
similar tenor, and may be signed or executed by such Registered Owners of
Obligations in person or by agent appointed in writing. As a condition for
acting thereunder the Trustee may demand proof of the execution of any such
instrument and of the fact that any person claiming to be the owner of any of
said Obligations is such owner and may further require the actual deposit of
such Obligation or Obligations with the Trustee. The fact and date of the
execution of such instrument may be proved by the certificate of any officer in
any jurisdiction who by the laws thereof is authorized to take acknowledgments
of deeds within such jurisdiction, that the person signing such instrument
acknowledged before him the execution thereof, or may be proved by any affidavit
of a witness to such execution sworn to before such officer.
The amount of Notes held by any person executing such instrument as a
Registered Owner of Notes and the fact, amount and numbers of the Notes held by
such person and the date of his holding the same may be proved by a certificate
executed by any responsible trust company, bank, banker or other depository in a
form approved by the Trustee, showing that at the date therein mentioned such
person had on deposit with such depository the Notes described in such
certificate; provided, however, that at all times the Trustee may require the
actual deposit of such Note or Notes with the Trustee.
All notices, requests and other communications to any party hereunder shall
be in writing (including bank wire, telex, telecopy, electronic communication,
facsimile or similar writing) at
70
the following addresses, and each address shall constitute each party's
respective "Principal Office" for purposes of the Indenture:
If intended for the Issuer:
Nelnet Student Loan Trust 2004-3
c/o Wilmington Trust Company, Delaware Trustee
Rodney Square North
1100 North Market Street
Wilmington, DE 19890
Attention: Corporate Trust Administration
Telephone: (302) 651-1000
Facsimile: (302) 636-4140
With a copy to the Administrator:
Nelnet, Inc.
121 South 13th Street, Suite 201
Lincoln, NE 68505
Attention: Terry J. Heimes
Telephone: (402) 458-2303
Facsimile: (402) 458-2399
If intended for the Trustee:
Zions First National Bank
717 Seventeenth Street, Suite 301
Denver, CO 80202
Attention: Corporate Trust Department
Telephone: (720) 947-7475
Facsimile: (720) 947-7480
Any party may change the address to which subsequent notices to such party
are to be sent, or of its Principal Office, by notice to the others, delivered
by hand or received by telex or facsimile or registered first-class mail,
postage prepaid. Each such notice, request or other communication shall be
effective when delivered by hand or received by facsimile or registered
first-class mail, postage prepaid.
SECTION 9.02. COVENANTS BIND ISSUER. The covenants, agreements, conditions,
promises, and undertakings in this Indenture shall extend to and be binding upon
the successors and assigns of the Issuer, and all of the covenants hereof shall
bind such successors and assigns, and each of them, jointly and severally. All
the covenants, conditions and provisions hereof shall be held to be for the sole
and exclusive benefit of the parties hereto and their successors and assigns and
of the Registered Owners from time to time of the Obligations.
No extension of time of payment of any of the Obligations shall operate to
release or discharge the Issuer, it being agreed that the liability of the
Issuer, to the extent permitted by law,
71
shall continue until all of the Obligations are paid in full, notwithstanding
any transfer of Financed Eligible Loans or extension of time for payment.
SECTION 9.03. LIEN CREATED. This Indenture shall operate effectually as (a)
a grant of lien on and security interest in, and (b) an assignment of, the Trust
Estate.
SECTION 9.04. SEVERABILITY OF LIEN. If the lien of this Indenture shall be
or shall ever become ineffectual, invalid or unenforceable against any part of
the Trust Estate, which is not subject to the lien, because of want of power or
title in the Issuer, the inclusion of any such part shall not in any way affect
or invalidate the pledge and lien hereof against such part of the Trust Estate
as to which the Issuer in fact had the right to pledge.
SECTION 9.05. CONSENT OF REGISTERED OWNERS BINDS SUCCESSORS. Any request or
consent of the Registered Owner of any Obligations given for any of the purposes
of this Indenture shall bind all future Registered Owners of the same Obligation
or any Obligations issued in exchange therefor or in substitution thereof in
respect of anything done or suffered by the Issuer or the Trustee in pursuance
of such request or consent.
SECTION 9.06. NONLIABILITY OF PERSONS; NO GENERAL OBLIGATION. It is hereby
expressly made a condition of this Indenture that any agreements, covenants or
representations herein contained or contained in the Notes do not and shall
never constitute or give rise to a personal or pecuniary liability or charge
against the organizers, officers, employees, agents or trustees or the
Administrator of the Issuer, or against the general credit of the Issuer, and in
the event of a breach of any such agreement, covenant or representation, no
personal or pecuniary liability or charge payable directly or indirectly from
the general revenues of the Issuer shall arise therefrom. Nothing contained in
this Section, however, shall relieve the Issuer from the observance and
performance of the several covenants and agreements on its part herein
contained.
SECTION 9.07. NONPRESENTMENT OF NOTES OR INTEREST CHECKS. Should any of the
Notes or interest checks not be presented for payment when due, the Trustee
shall retain from any money transferred to it for the purpose of paying the
Notes or interest checks so due, for the benefit of the Registered Owners
thereof, a sum of money sufficient to pay such Notes or interest checks when the
same are presented by the Registered Owners thereof for payment. Such money
shall not be required to be invested. All liability of the Issuer to the
Registered Owners of such Notes or interest checks and all rights of such
Registered Owners against the Issuer under the Notes or interest checks or under
this Indenture shall thereupon cease and determine, and the sole right of such
Registered Owners shall thereafter be against such deposit. If any Note or
interest check shall not be presented for payment within the period of two years
following its payment or prepayment date, the Trustee shall return to the Issuer
the money theretofore held by it for payment of such Note or interest check, and
such Note or interest check shall (subject to the defense of any applicable
statute of limitation) thereafter be an unsecured obligation of the Issuer. The
Trustee's responsibility for any such money shall cease upon remittance thereof
to the Issuer.
SECTION 9.08. SECURITY AGREEMENT. This Indenture constitutes a Financing
Statement and a Security Agreement under the Delaware Uniform Commercial Code.
72
SECTION 9.09. LAWS GOVERNING. It is the intent of the parties hereto that
this Indenture shall in all respects be governed by the laws of the State of New
York. This Indenture is subject to the provisions of the Trust Indenture Act
that are required to be part of this Indenture and shall, to the extent
applicable, be governed by such provisions.
SECTION 9.10. SEVERABILITY. If any covenant, agreement, waiver, or part
thereof in this Indenture contained be forbidden by any pertinent law or under
any pertinent law be effective to render this Indenture invalid or unenforceable
or to impair the lien hereof, then each such covenant, agreement, waiver, or
part thereof shall itself be and is hereby declared to be wholly ineffective,
and this Indenture shall be construed as if the same were not included herein.
SECTION 9.11. EXHIBITS. The terms of the Schedules and Exhibits, if any,
attached to this Indenture are incorporated herein in all particulars.
SECTION 9.12. NON-BUSINESS DAYS. Except as may otherwise be provided
herein, if the date for making payment of any amount hereunder or on any Note,
or if the date for taking any action hereunder, is not a Business Day, then such
payment can be made without accruing further interest or action can be taken on
the next succeeding Business Day, with the same force and effect as if such
payment were made when due or action taken on such required date.
SECTION 9.13. PARTIES INTERESTED HEREIN. Nothing in this Indenture
expressed or implied is intended or shall be construed to confer upon, or to
give to, any person or entity, other than the Trustee, the Delaware Trustee, the
paying agent, if any, and the Registered Owners of the Obligations, any right,
remedy or claim under or by reason of this Indenture or any covenant, condition
or stipulation hereof, and all covenants, stipulations, promises and agreements
in this Indenture contained by and on behalf of the Issuer shall be for the sole
and exclusive benefit of the Trustee, the paying agent, if any, and the
Registered Owners of the Obligations.
SECTION 9.14. OBLIGATIONS ARE LIMITED OBLIGATIONS. The Notes and the
obligations of the Issuer contained in this Indenture are special, limited
obligations of the Issuer, secured by and payable solely from the Trust Estate
herein provided. The Issuer shall not be obligated to pay the Notes, the
interest thereon, or any other obligation created by or arising from this
Indenture from any other source.
SECTION 9.15. LIMITATIONS ON COUNTERPARTY RIGHTS. No Counterparty which
shall be in default under any Derivative Product with the Issuer shall have any
of the rights granted to a Counterparty or as the Registered Owner of an
Obligation hereunder. A Counterparty which is in default under any Derivative
Product shall however, continue to maintain all obligations undertaken by it
under the terms of its Derivative Product. No Counterparty shall have any
consent or voting rights under this Indenture, or any rights to instruct the
Trustee to take, or refrain from taking, any action hereunder except upon
satisfaction of the Rating Confirmation.
SECTION 9.16. DISCLOSURE OF NAMES AND ADDRESSES OF REGISTERED OWNERS.
(a) Registered Owners may communicate pursuant to Section 312(b) of
the Trust Indenture Act with other Registered Owners with respect to their
rights under this Indenture or under the Notes. Upon receipt by the Trustee
of any request by three or more Registered Owners or by one or more holders
of Notes evidencing not less than
73
25% of the Outstanding principal amount of the Notes to receive a copy of
the current list of Registered Owners (whether or not made pursuant to
Section 312(b) of the Trust Indenture Act), the Trustee shall promptly
notify the Issuer thereof by providing to the Issuer a copy of such request
and a copy of the list of Registered Owners produced in response thereto.
(b) Registered Owners of Notes, by receiving and holding the same,
agree with the Issuer and the Trustee that neither the Issuer nor the
Trustee nor any Securities Depository shall be held accountable by reason
of the disclosure of any information as to the names and addresses of the
Registered Owners of Notes in accordance with Section 312 of the Trust
Indenture Act, regardless of the source from which such information was
derived, and that the Trustee shall not be held accountable by reason of
mailing any material pursuant to a request made under Section 312(b) of the
Trust Indenture Act.
SECTION 9.17. AGGREGATE PRINCIPAL AMOUNT OF OBLIGATIONS. Whenever in this
Indenture reference is made to the aggregate principal amount of any
Obligations, such phrase shall mean, at any time, the principal amount of any
Notes and the Derivative Value of any Derivative Product.
SECTION 9.18. FINANCED ELIGIBLE LOANS. The Issuer expects to acquire
Eligible Loans and to transfer Eligible Loans to the Trustee, in accordance with
this Indenture, which Eligible Loans, upon becoming subject to the lien of this
Indenture, constitute Financed Eligible Loans, as defined herein. If for any
reason a Financed Eligible Loan does not constitute an Eligible Loan, or ceases
to constitute an Eligible Loan, such loan shall continue to be subject to the
lien of this Indenture as a Financed Eligible Loan.
SECTION 9.19. CONCERNING THE DELAWARE TRUSTEE. It is expressly understood
and agreed by the parties to this Indenture and the Registered Owners that (a)
this Indenture is executed and delivered by the Delaware Trustee not in its
individual or personal capacity but solely in its capacity as Delaware Trustee
under the Trust Agreement on behalf of the Issuer, in the exercise of the powers
and authority conferred and vested in it as Delaware Trustee under the Trust
Agreement, subject to the protections, indemnities and limitations from
liability afforded to the Delaware Trustee thereunder; (b) the representations,
warranties, covenants, undertakings, agreements and obligations by the Delaware
Trustee are made and intended not as personal representations, warranties,
covenants, undertakings, agreements and obligations by Wilmington Trust Company,
but are made and intended for the purpose of only binding the Trust Estate, as
defined in the Trust Agreement, and the Issuer; (c) nothing contained herein
shall be construed as creating any liability on Wilmington Trust Company,
individually or personally, to perform any expressed or implied covenant, duty
or obligation of any kind whatsoever contained herein; and (d) under no
circumstances shall Wilmington Trust Company, be personally liable for the
payment of any fees, costs, indebtedness or expenses of any kind whatsoever or
be personally liable for the breach or failure of any obligation,
representation, agreement, warranty or covenant whatsoever made or undertaken by
the Delaware Trustee or Issuer hereunder.
74
ARTICLE X
PAYMENT AND CANCELLATION OF NOTES
AND SATISFACTION OF INDENTURE
SECTION 10.01. TRUST IRREVOCABLE. The trust created by the terms and
provisions of this Indenture is irrevocable until the indebtedness secured
hereby (the Notes and interest thereon) and all Issuer Derivative Payments are
fully paid or provision made for its payment as provided in this Article.
SECTION 10.02. SATISFACTION OF INDENTURE.
(a) If the Issuer shall pay, or cause to be paid, or there shall
otherwise be paid (i) to the Registered Owners of the Notes, the principal
of and interest on the Notes, at the times and in the manner stipulated in
this Indenture; and (ii) to each Counterparty, all Issuer Derivative
Payments then due, then the pledge of the Trust Estate, and all covenants,
agreements and other obligations of the Issuer to the Registered Owners of
Notes shall thereupon cease, terminate and become void and be discharged
and satisfied. In such event, the Trustee shall execute and deliver to the
Issuer all such instruments as may be desirable to evidence such discharge
and satisfaction, and the Trustee shall pay over or deliver all money held
by it under this Indenture to the party entitled to receive the same under
this Indenture. If the Issuer shall pay or cause to be paid, or there shall
otherwise be paid, to the Registered Owners of any Outstanding Notes the
principal of and interest on such Notes and to each Counterparty all
Counterparty Payments then due, at the times and in the manner stipulated
in this Indenture and in the Derivative Product, such Notes and each
Counterparty shall cease to be entitled to any lien, benefit or security
under this Indenture, and all covenants, agreements and obligations of the
Issuer to the Registered Owners thereof and each Counterparty shall
thereupon cease, terminate and become void and be discharged and satisfied.
(b) Notes or interest installments shall be deemed to have been paid
within the meaning of Section 10.02(a) hereof if money for the payment
thereof has been set aside and is being held in trust by the Trustee at the
Note Final Maturity Date or earlier prepayment date thereof. Any
Outstanding Note shall, prior to the Note Final Maturity Date or earlier
prepayment thereof, be deemed to have been paid within the meaning and with
the effect expressed in Section 10.02(a) hereof if (i) such Note is to be
prepaid on any date prior to its Note Final Maturity Date and (ii) the
Issuer shall have given notice of prepayment as provided herein on said
date, there shall have been deposited with the Trustee either money (fully
insured by the Federal Deposit Insurance Issuer or fully collateralized by
Governmental Obligations) in an amount which shall be sufficient, or
Governmental Obligations (including any Governmental Obligations issued or
held in book-entry form on the books of the Department of Treasury of the
United States of America) the principal of and the interest on which when
due will provide money which, together with the money, if any, deposited
with the Trustee at the same time, shall be sufficient, to pay when due the
principal of and interest to become due on such Note on and prior to the
prepayment date or Note Final Maturity Date thereof, as the case may be.
Notwithstanding anything herein to the contrary, however, no such deposit
shall have the
75
effect specified in this subsection (b) if made during the existence of an
Event of Default, unless made with respect to all of the Notes then
Outstanding. Neither Governmental Obligations nor money deposited with the
Trustee pursuant to this subsection (b) nor principal or interest payments
on any such Governmental Obligations shall be withdrawn or used for any
purpose other than, and shall be held irrevocably in trust in an escrow
account for, the payment of the principal of and interest on such Notes.
Any cash received from such principal of and interest on such Governmental
Obligations deposited with the Trustee, if not needed for such purpose,
shall, to the extent practicable, be reinvested in Governmental Obligations
maturing at times and in amounts sufficient to pay when due the principal
of and interest on such Notes on and prior to such prepayment date or Note
Final Maturity Date thereof, as the case may be, and interest earned from
such reinvestments shall be paid over to the Issuer, as received by the
Trustee, free and clear of any trust, lien or pledge. Any payment for
Governmental Obligations purchased for the purpose of reinvesting cash as
aforesaid shall be made only against delivery of such Governmental
Obligations. For the purposes of this Section, "Governmental Obligations"
shall mean and include only non-callable direct obligations of the
Department of the Treasury of the United States of America or portions
thereof (including interest or principal portions thereof), and such
Governmental Obligations shall be of such amounts, maturities and interest
payment dates and bear such interest as will, without further investment or
reinvestment of either the principal amount thereof or the interest
earnings therefrom, be sufficient to make the payments required herein, and
which obligations have been deposited in an escrow account which is
irrevocably pledged as security for the Notes. Such term shall not include
mutual funds and unit investment trusts.
(c) Any Issuer Derivative Payments are deemed to have been paid and
the applicable Derivative Product terminated when payment of all Issuer
Derivative Payments due and payable to each Counterparty under its
respective Derivative Product have been made or duly provided for to the
satisfaction of each Counterparty and the respective Derivative Product has
been terminated.
(d) In no event shall the Trustee deliver over to the Issuer any
Financed Eligible Loans originated under the Higher Education Act unless
the Issuer is an Eligible Lender, if the Higher Education Act or
Regulations then in effect require the owner or holder of such Financed
Eligible Loans to be an Eligible Lender.
(e) The provisions of this Section are applicable to the Notes and
the Issuer Derivative Payments.
SECTION 10.03. OPTIONAL PURCHASE OF ALL FINANCED ELIGIBLE LOANS. The
Administrator shall certify to and notify the Sponsor and the Trustee in
writing, within 15 days after the last Business Day of each Collection Period in
which the then outstanding Pool Balance is 12% or less of the Initial Pool
Balance, of the percentage that the then outstanding Pool Balance bears to the
Initial Pool Balance. The Sponsor shall have the option to purchase all of the
Financed Eligible Loans on the date (the "Optional Purchase Date") that is the
tenth (10th) Business Day preceding the Quarterly Distribution Date next
succeeding the date on which the then outstanding Pool Balance is 10% or less of
the Initial Pool Balance. To exercise the option
76
described in this Section, the Sponsor shall deposit in the Collection Fund on
the Optional Purchase Date, an amount equal to the aggregate Purchase Amount for
the Financed Eligible Loans and the related rights with respect thereto, plus
the appraised value of any such other property held by in the Trust Estate other
than the Funds and Accounts, such value to be determined by an appraiser
mutually agreed upon by the Sponsor and the Trustee; provided, however, that the
Sponsor may not effect such purchase if such aggregate Purchase Amounts do not
equal or exceed the Minimum Purchase Amount.
SECTION 10.04. AUCTION OF FINANCED ELIGIBLE LOANS. If the Sponsor does not
exercise its option to purchase Financed Eligible Loans pursuant to Section
10.03 hereof, the Trustee (or its designated agent) shall, promptly after the
Business Day next succeeding the Optional Purchase Date, offer for sale Financed
Eligible Loans in an amount sufficient to redeem all Notes Outstanding on such
Quarterly Distribution Date, and any such sale shall be consummated on or before
such Quarterly Distribution Date (the "Trust Auction Date"). The Trustee shall
provide written notice to the Sponsor of any such offer for sale at least three
Business Days in advance of the Trust Auction Date. If at least two independent
bids are received, the Trustee (or its designated agent) shall solicit and
resolicit new bids from all participating bidders until only one bid remains or
the remaining bidders decline to resubmit bids. The Trustee shall accept the
highest of the remaining bids if it equals or exceeds the Minimum Purchase Price
described above. If Nelnet, Inc., or its Affiliates, bid to purchase the
Financed Eligible Loans and less than two independent bids are received, the
Trustee the shall accept the highest of such remaining bids if it is equal to or
in excess of both (i) the Minimum Purchase Amount and (ii) the fair market value
of such Financed Eligible Loans as of the end of the Collection Period
immediately preceding the Trust Auction Date. If at least two bids are not
received or the highest bid after the resolicitation process is completed is not
equal to or in excess of the higher of the amounts described in the preceding
sentences, the Trustee shall not consummate such sale. The Trustee may consult,
and, at the direction of the Sponsor, shall consult, with a financial advisor,
including an underwriter of the Notes or the Administrator, to determine if the
fair market value of the Financed Eligible Loans has been offered. The proceeds
of any such sale will be applied to the redemption of all Notes Outstanding in
accordance with Section 5.03(e) hereof. Unless requested by the Administrator,
if the sale is not completed, the Trustee may, but will not be obligated to,
solicit bids for sale of the Financed Eligible Loans with respect to future
Quarterly Distribution Dates upon terms similar to those described above. The
Trustee shall be obligated to make such solicitations, however, if requested to
do so by the Administrator. Notice of the prepayment of any Obligations
resulting from a purchase of the Financed Eligible Loans on the Optional
Purchase Date or the auction of the Financed Eligible Loans on the Trust Auction
Date, shall be given by the Trustee to the Registered Owners by first-class mail
within five Business Days of such Optional Purchase Date or Trust Auction Date.
SECTION 10.05. CANCELLATION OF PAID NOTES. Any Notes which have been paid
or purchased by the Issuer, mutilated Notes replaced by new Notes, and any
temporary Note for which definitive Notes have been delivered shall (unless
otherwise directed by the Issuer by Issuer Order) forthwith be cancelled by the
Trustee and, except for temporary Notes, returned to the Issuer.
[Remainder of This Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the Issuer has caused this Indenture to be executed in
its organizational name and behalf by its Delaware Trustee, and the Trustee, to
evidence its acceptance of the trusts hereby created, has caused this Indenture
to be executed in its organizational name and behalf, all in multiple
counterparts, each of which shall be deemed an original, and the Issuer and the
Trustee have caused this Indenture to be dated as of the date herein above first
shown.
NELNET STUDENT LOAN TRUST 2004-3, a
Delaware statutory trust
By: WILMINGTON TRUST COMPANY, not
in its individual capacity or personal
capacity but solely in its capacity as
Delaware Trustee
By /s/ Patricia A. Evans
-----------------------------------------------
Name
---------------------------------------------
Title
--------------------------------------------
ZIONS FIRST NATIONAL BANK, as Trustee
By /s/ David Bata
-----------------------------------------------
David W. Bata, Vice President
Acknowledged and accepted as to clause "C" of
the Granting Clauses as of the day and year first
written above:
ZIONS FIRST NATIONAL BANK, as Eligible
Lender Trustee
By /s/ David Bata
-----------------------------------------------
David W. Bata, Vice President
78
EXHIBIT A
ELIGIBLE LOAN ACQUISITION CERTIFICATE
This Eligible Loan Acquisition Certificate is submitted pursuant to the
provisions of Section 5.02 of the Indenture of Trust, dated as of July 1, 2004,
as amended (the "Indenture"), between Nelnet Student Loan Trust 2004-3 (the
"Issuer") and Zions First National Bank, as Trustee. All capitalized terms used
in this Certificate and not otherwise defined herein shall have the same
meanings given to such terms in the Indenture. In your capacity as Trustee, you
are hereby authorized and requested to disburse to _________________ (the
"Seller") the sum of $__________ (or, in the case of an exchange, the Eligible
Loans listed in Exhibit A hereto) for the acquisition of Eligible Loans. With
respect to the Eligible Loans so to be acquired, the Issuer hereby certifies as
follows:
1. The Eligible Loans to be acquired are those specified in Schedule A
attached hereto (the "Acquired Eligible Loans"). The remaining unpaid principal
amount of each Acquired Eligible Loan is as shown on such Schedule A.
2. The amount to be disbursed pursuant to this Certificate does not
exceed the amount permitted by Section 5.02 of the Indenture, plus accrued
interest.
3. Each Acquired Eligible Loan is an Eligible Loan authorized so to be
acquired by the Indenture.
4. The following items have been received and are being retained, on your
behalf, by the Issuer, the Master Servicer or a Subservicer):
(a) a copy of the Student Loan Purchase Agreement(s) between the
Issuer and the Eligible Lender with respect to the Acquired Eligible Loans
(original copy maintained on file with the Issuer on behalf of the
Trustee);
(b) with respect to each Insured Loan included among the Acquired
Eligible Loans, the Certificate of Insurance relating thereto;
(c) with respect to each Guaranteed Loan included among the Acquired
Eligible Loans, a certified copy of the Guarantee Agreement relating
thereto;
(d) an opinion of counsel to the Issuer specifying each action
necessary to perfect a security interest in all Eligible Loans to be
acquired by the Issuer pursuant to the Student Loan Purchase Agreements in
favor of the Trustee in the manner provided for by the provisions of 20
U.S.C. Section 1087-2(d)(3) or 20 U.S.C. Section 1082(m)(1)(D)(iv), as
applicable, (you are authorized to rely on the advice of a single blanket
opinion of counsel to the Issuer until such time as the Issuer shall
provide any amended opinion to you); and
(e) instruments duly assigning the Acquired Eligible Loans to the
Trustee.
5. The Issuer is not, on the date hereof, in default under the Indenture
or in the performance of any of its covenants and agreements made in the Student
Loan Purchase Agreement(s) relating to the Acquired Eligible Loans, and, to the
best knowledge of the Issuer, the Eligible Lender is not in default under the
Student Loan Purchase Agreement applicable to the Acquired Eligible Loans. The
Issuer is not aware of any default existing on the date hereof under any of the
other documents referred to in paragraph 4 hereof, nor of any circumstances
which would reasonably prevent reliance upon the opinion of counsel referred to
in paragraph 4(d) hereof.
6. All of the conditions specified in the Student Loan Purchase
Agreement(s) applicable to the Acquired Eligible Loans and the Indenture for the
acquisition of the Acquired Eligible Loans and the disbursement hereby
authorized and requested have been satisfied; provided that the Issuer may waive
the requirement of receiving an opinion of counsel from the counsel to the
Lender.
7. If a Financed Eligible Loan is being sold in exchange for an Acquired
Eligible Loan, the final expected maturity date of such Acquired Eligible Loan
shall be substantially similar to that of the Financed Eligible Loan being sold
and such sale and exchange shall not adversely affect the ability of the Trust
Estate to make timely principal and interest payments on its Obligations.
8. With respect to all Acquired Eligible Loans which are Insured,
Insurance is in effect with respect thereto, and with respect to all Acquired
Eligible Loans which are Guaranteed, the Guarantee Agreement is in effect with
respect thereto.
9. The Issuer is not in default in the performance of any of its
covenants and agreements made in any Contract of Insurance or the Guarantee
Agreement applicable to the Acquired Eligible Loans.
10. The proposed use of moneys in the Acquisition Fund is in compliance
with the provisions of the Indenture.
11. The undersigned is authorized to sign and submit this Certificate on
behalf of the Issuer.
12. Eligible Loans are being acquired at a price which permits the results
of the cash flow analyses provided to the Rating Agencies on the Date of
Issuance and as revised/amended to be sustained.
WITNESS my hand this _____ day of ___________.
NELNET STUDENT LOAN TRUST 2004-3
By
----------------------------------------
Name
--------------------------------------
Title
-------------------------------------
A-2
EXHIBIT B-1
FORM OF CLASS A-1 NOTE
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer (as
defined below) or its agent for registration of transfer, exchange or payment,
and any Note issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE
AMOUNT SHOWN ON THE FACE HEREOF. THIS NOTE IS NOT GUARANTEED OR INSURED BY ANY
GOVERNMENTAL AGENCY.
NELNET STUDENT LOAN TRUST 2004-3
STUDENT LOAN ASSET-BACKED NOTES
SENIOR CLASS A-1 (LIBOR)
REGISTERED NO. R-__ REGISTERED $__________
DATE OF ISSUANCE MATURITY DATE CUSIP NO. ISIN NO.
July 28, 2004 January 25, 2011 64031Q AY 7 US64031QAY70
PRINCIPAL SUM: DOLLARS
REGISTERED OWNER: CEDE & CO.
Nelnet Student Loan Trust 2004-3, a statutory trust organized and existing
under the laws of the State of Delaware (herein referred to as the "Issuer"),
for value received, hereby promises to pay to CEDE & CO., or registered assigns,
on each Quarterly Distribution Date the principal sum equal to the applicable
Class A-1 Noteholder's Principal Distribution Amount for such Quarterly
Distribution Date, as described in the Indenture of Trust dated as of July 1,
2004, between the Issuer (by Wilmington Trust Company, in its capacity as
Delaware Trustee) and Zions First National Bank, a national banking association,
as eligible lender trustee and indenture trustee (the "Trustee") (capitalized
terms used but not defined herein being defined in Article I of the Indenture,
which also contains rules as to usage that shall be applicable herein);
provided, however, that the entire unpaid principal amount of this Note shall be
due and payable on the Maturity Date specified above (the "Class A-1 Maturity
Date").
The Issuer shall pay interest on this Note at the rate per annum equal to
the Class A-1 Rate (as defined herein), on each Quarterly Distribution Date
until the principal of this Note is paid or made available for payment, on the
principal amount of this Note outstanding on the preceding Quarterly
Distribution Date or the Date of Issuance in the case of the first Quarterly
Distribution Date (after giving effect to all payments of principal made on the
preceding Quarterly Distribution Date), subject to certain limitations contained
in the Indenture. Interest on this Note shall accrue from and including the
preceding Quarterly Distribution Date (or, in the case of the first Interest
Accrual Period, the Date of Issuance) to but excluding the following Quarterly
Distribution Date (each an "Interest Accrual Period"). Interest shall be
calculated on the basis of the actual number of days elapsed in each Interest
Accrual Period divided by 360 and rounding the resultant figure to the fifth
decimal point. Such principal of and interest on this Note shall be paid in the
manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on the
reverse hereof, which shall have the same effect as though fully set forth on
the face of this Note.
Unless the certificate of authentication hereon has been executed by the
Trustee whose name appears below by manual signature, this Note shall not be
entitled to any benefit under the Indenture referred to on the reverse hereof,
or be valid or obligatory for any purpose.
B-1-2
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed, manually or in facsimile, as of the date set forth below.
NELNET STUDENT LOAN TRUST 2004-3
By WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as
Delaware Trustee under the Trust
Agreement,
By
---------------------------------------
Authorized Signatory
Date: __________ __, ____
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
ZIONS FIRST NATIONAL BANK, not in its
individual capacity but solely as Trustee,
By
---------------------------------------
Authorized Signatory
Date: __________ __, ____
B-1-3
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Student Loan Asset-Backed Notes, Senior Class A-1 (the "Class
A-1 Notes"), which, together with the Issuer's Student Loan Asset-Backed Notes,
Senior Class A-2, A-3, A-4 and A-5 (together with the Class A-1 Notes, the
"Class A Notes") and the Issuer's Student Loan Asset-Backed Notes, Subordinate
Class B (the "Class B Notes" and, together with the Class A Notes, the "Notes"),
are issued under and secured by the Indenture, to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights and obligations thereunder of the Issuer, the Trustee and the
Registered Owners. The Notes are subject to all terms of the Indenture.
The Class A-1 Notes are and will be secured by the Trust Estate pledged as
security therefor as provided in the Indenture. The Class A Notes are senior to
the Class B Notes as and to the extent provided in the Indenture. The Class A
Notes are, except for certain Termination Payments that are not Priority
Termination Payments, issued on a parity with any Derivative Products entered
into by the Issuer with a Counterparty, pursuant to which the Issuer will, from
time to time, owe Issuer Derivative Payments, and will, from time to time, be
owed Counterparty Payments.
Principal of the Class A-1 Notes shall be payable on each Quarterly
Distribution Date in an amount equal to the Class A-1 Noteholder's Principal
Distribution Amount for such Quarterly Distribution Date. "Quarterly
Distribution Date" means the twenty-fifth (25th) day of each January, April,
July and October or, if any such date is not a Business Day, the immediately
succeeding Business Day, commencing January 25, 2005.
As described on the face hereof, the entire unpaid principal amount of this
Note shall be due and payable on the Class A-1 Maturity Date. Notwithstanding
the foregoing, the entire unpaid principal amount of the Notes shall be due and
payable on the date on which (a) an Event of Default shall have occurred and be
continuing and (b) either the Trustee or the Registered Owners of Obligations
representing not less than a majority of the Outstanding Amount of the Highest
Priority Obligations shall have declared the Notes to be immediately due and
payable in the manner provided in the Indenture.
Interest on the Class A-1 Notes shall be payable on each Quarterly
Distribution Date on the principal amount outstanding of the Class A-1 Notes
until the principal amount thereof is paid in full, at a rate per annum equal to
the Class A-1 Rate. The "Class A-1 Rate" for each Interest Accrual Period, other
than the first Interest Accrual Period, shall be equal to the applicable
Three-Month LIBOR, plus 0.00%. The "Class A-1 Rate" for the first Interest
Accrual Period shall be determined by reference to the following formula: x +
[28/31 * (y-x)] (where: x = Five-Month LIBOR, and y = Six-Month LIBOR), plus
0.00%, as determined by the Administrator.
Payments of interest on this Note on each Quarterly Distribution Date,
together with the installment of principal, if any, to the extent not in full
payment of this Note, shall be paid to the Person in whose name such Note is
registered on the Record Date by check mailed first-class, postage prepaid to
such Person's address as it appears on the records of the Trustee on such Record
Date, except that, unless definitive Notes have been issued pursuant to the
Indenture, with respect to Notes registered on the Record Date in the name of
the nominee of the Clearing
B-1-4
Agency (initially, such nominee to be Cede & Co.), payment shall be made by wire
transfer in immediately available funds to the account designated by such
nominee. If funds are expected to be available, as provided in the Indenture,
for payment in full of the then remaining unpaid principal amount of this Note
on a Quarterly Distribution Date, then the Trustee shall notify the Person in
whose name a Note is registered at the close of business on the Record Date
preceding the Quarterly Distribution Date on which the Issuer expects that the
final installment of principal of and interest on such Note will be paid. Such
notice shall be mailed or transmitted by facsimile prior to such final Quarterly
Distribution Date and shall specify that such final installment will be payable
only upon presentation and surrender of such Note and shall specify the place
where such Note may be presented and surrendered for payment of such
installment.
As provided in the Indenture and subject to certain limitations set forth
therein, the transfer of this Note may be registered upon the records of the
Trustee upon surrender for transfer of any Note at the Principal Office of the
Trustee, duly endorsed for transfer or accompanied by an assignment duly
executed by the Registered Owner or his attorney duly authorized in writing, and
thereupon the Issuer shall execute and the Trustee shall authenticate and
deliver in the name of the transferee or transferees a new fully registered Note
or Notes of the same interest rate and for a like class and aggregate principal
amount of the same maturity.
As to any Note, the person in whose name the same shall be registered shall
be deemed and regarded as the absolute owner thereof for all purposes, and
payment of either principal or interest on any fully registered Note shall be
made only to or upon the written order of the Registered Owner thereof or his
legal representative but such registration may be changed as provided in the
Indenture. All such payments shall be valid and effectual to satisfy and
discharge the liability upon such Note to the extent of the sum or sums paid.
Each Registered Owner and each transferee of a Note shall be deemed to
represent and warrant that either (a) it is not acquiring the Note directly or
indirectly for, or on behalf of, an ERISA plan or any entity whose underlying
assets are deemed to be plan assets of such ERISA plan; or (b)(i) the
acquisition and holding of the Notes will not result in a nonexempt prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code or similar
law and (ii) if the Notes are subsequently deemed to be "plan assets" pursuant
to the regulations set forth at 29 C.F.R. Section 2510.3-101, it will promptly
dispose of the Notes.
The Trustee shall require the payment by any Registered Owner requesting
exchange or transfer of any tax or other governmental charge required to be paid
with respect to such exchange or transfer. The applicant for any such transfer
or exchange may be required to pay all taxes and governmental charges in
connection with such transfer or exchange, other than exchanges pursuant to the
Indenture.
The term "Issuer" as used in this Note includes any successor to the Issuer
under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances, to
merge or consolidate, subject to the rights of the Trustee and the Registered
Owners under the Indenture.
B-1-5
The Notes are issuable only in registered form in denominations as provided
in the Indenture, subject to certain limitations therein set forth.
This Note shall be construed in accordance with the laws of the State of
New York, without reference to its conflict of law provisions, and the
obligations, rights and remedies of the parties hereunder and thereunder shall
be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place and rate, and in the coin or currency, herein prescribed.
B-1-6
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
- --------------------------------------------------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
- --------------------------------------------------------------------------------
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints
- --------------------------------------------------------------------------------
attorney, to transfer said Note on the books kept for registration thereof, with
full power of substitution in the premises.
Dated: ____________________________
By *
--------------------------------------
Name
-------------------------------------
Title
------------------------------------
Signature Guaranteed:
By *
--------------------------------------
*NOTICE: Signature(s) should be guaranteed
by a guarantor institution participating
in the Securities Transfer Agents
Medallion Program or in such other
guarantee program acceptable to the
Trustee. The Assignor's signature to this
assignment must correspond with the name
as it appears upon the face of the within
note in every particular without
alteration or any change whatever.
B-1-7
EXHIBIT B-2
FORM OF CLASS A-2 NOTE
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer (as
defined below) or its agent for registration of transfer, exchange or payment,
and any Note issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE
AMOUNT SHOWN ON THE FACE HEREOF. THIS NOTE IS NOT GUARANTEED OR INSURED BY ANY
GOVERNMENTAL AGENCY.
NELNET STUDENT LOAN TRUST 2004-3
STUDENT LOAN ASSET-BACKED NOTES
SENIOR CLASS A-2 (LIBOR)
REGISTERED NO. R-__ REGISTERED $__________
DATE OF ISSUANCE MATURITY DATE CUSIP NO. ISIN NO.
July 28, 2004 January 25, 2016 64031Q AZ 4 US64031QAZ46
PRINCIPAL SUM: DOLLARS
REGISTERED OWNER: CEDE & CO.
Nelnet Student Loan Trust 2004-3, a statutory trust organized and existing
under the laws of the State of Delaware (herein referred to as the "Issuer"),
for value received, hereby promises to pay to CEDE & CO., or registered assigns,
on each Quarterly Distribution Date the principal sum equal to the Class A-2
Noteholder's Principal Distribution Amount for such Quarterly Distribution Date,
as described in the Indenture of Trust dated as of July 1, 2004, between the
Issuer (by Wilmington Trust Company, in its capacity as Delaware Trustee) and
Zions First National Bank, a national banking association, as eligible lender
trustee and indenture trustee (the "Trustee") (capitalized terms used but not
defined herein being defined in Article I of the Indenture, which also contains
rules as to usage that shall be applicable herein); provided, however, that the
entire unpaid principal amount of this Note shall be due and payable on the
Maturity Date specified above (the "Class A-2 Maturity Date").
The Issuer shall pay interest on this Note at the rate per annum equal to
the Class A-2 Rate (as defined herein), on each Quarterly Distribution Date
until the principal of this Note is paid or made available for payment, on the
principal amount of this Note outstanding on the preceding Quarterly
Distribution Date or the Date of Issuance in the case of the first Quarterly
Distribution Date (after giving effect to all payments of principal made on the
preceding Quarterly Distribution Date), subject to certain limitations contained
in the Indenture. Interest on this Note shall accrue from and including the
preceding Quarterly Distribution Date (or, in the case of the first Interest
Accrual Period, the Date of Issuance) to but excluding the following Quarterly
Distribution Date (each an "Interest Accrual Period"). Interest shall be
calculated on the basis of the actual number of days elapsed in each Interest
Accrual Period divided by 360 and rounding the resultant figure to the fifth
decimal point. Such principal of and interest on this Note shall be paid in the
manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on the
reverse hereof, which shall have the same effect as though fully set forth on
the face of this Note.
Unless the certificate of authentication hereon has been executed by the
Trustee whose name appears below by manual signature, this Note shall not be
entitled to any benefit under the Indenture referred to on the reverse hereof,
or be valid or obligatory for any purpose.
B-2-2
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed, manually or in facsimile, as of the date set forth below.
NELNET STUDENT LOAN TRUST 2004-3
By WILMINGTON TRUST COMPANY, not
in its individual capacity but solely as
Delaware Trustee under the Trust
Agreement,
By
-----------------------------------------
Authorized Signatory
Date: __________ __, ____
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
ZIONS FIRST NATIONAL BANK, not in its
individual capacity but solely as Trustee,
By
---------------------------------------
Authorized Signatory
Date: __________ __, ____
B-2-3
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Student Loan Asset-Backed Notes, Senior Class A-2 (the "Class
A-2 Notes"), which, together with the Issuer's Student Loan Asset-Backed Notes,
Senior Class A-1, Class A-3, Class A-4 and Class A-5 (together with the Class
A-2 Notes, the "Class A Notes") and the Issuer's Student Loan Asset-Backed
Notes, Subordinate Class B (the "Class B Notes" and, together with the Class A
Notes, the "Notes"), are issued under and secured by the Indenture, to which
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights and obligations thereunder of the Issuer, the
Trustee and the Registered Owners. The Notes are subject to all terms of the
Indenture.
The Class A-2 Notes are and will be secured by the Trust Estate pledged as
security therefor as provided in the Indenture. The Class A Notes are senior to
the Class B Notes as and to the extent provided in the Indenture. The Class A
Notes are, except for certain Termination Payments that are not Priority
Termination Payments, issued on a parity with any Derivative Products entered
into by the Issuer with a Counterparty, pursuant to which the Issuer will, from
time to time, owe Issuer Derivative Payments, and will, from time to time, be
owed Counterparty Payments.
Principal of the Class A-2 Notes shall be payable on each Quarterly
Distribution Date in an amount equal to the Class A-2 Noteholder's Principal
Distribution Amount for such Quarterly Distribution Date. "Quarterly
Distribution Date" means the twenty-fifth (25th) day of each January, April,
July and October or, if any such date is not a Business Day, the immediately
succeeding Business Day, commencing January 25, 2005.
As described on the face hereof, the entire unpaid principal amount of this
Note shall be due and payable on the Class A-2 Maturity Date. Notwithstanding
the foregoing, the entire unpaid principal amount of the Notes shall be due and
payable on the date on which (a) an Event of Default shall have occurred and be
continuing and (b) either the Trustee or the Registered Owners of Obligations
representing not less than a majority of the Outstanding Amount of the Highest
Priority Obligations shall have declared the Notes to be immediately due and
payable in the manner provided in the Indenture.
Interest on the Class A-2 Notes shall be payable on each Quarterly
Distribution Date on the principal amount outstanding of the Class A-2 Notes
until the principal amount thereof is paid in full, at a rate per annum equal to
the Class A-2 Rate. The "Class A-2 Rate" for each Interest Accrual Period, other
than the first Interest Accrual Period, shall be equal to the applicable
Three-Month LIBOR, plus 0.03%. The "Class A-2 Rate" for the first Interest
Accrual Period shall be determined by reference to the following formula: x +
[28/31 * (y-x)] (where: x = Five-Month LIBOR, and y = Six-Month LIBOR), plus
0.03%, as determined by the Administrator.
Payments of interest on this Note on each Quarterly Distribution Date,
together with the installment of principal, if any, to the extent not in full
payment of this Note, shall be paid to the Person in whose name such Note is
registered on the Record Date by check mailed first-class, postage prepaid to
such Person's address as it appears on the records of the Trustee on such Record
Date, except that, unless definitive Notes have been issued pursuant to the
Indenture, with respect to Notes registered on the Record Date in the name of
the nominee of the Clearing
B-2-4
Agency (initially, such nominee to be Cede & Co.), payment shall be made by wire
transfer in immediately available funds to the account designated by such
nominee. If funds are expected to be available, as provided in the Indenture,
for payment in full of the then remaining unpaid principal amount of this Note
on a Quarterly Distribution Date, then the Trustee shall notify the Person in
whose name a Note is registered at the close of business on the Record Date
preceding the Quarterly Distribution Date on which the Issuer expects that the
final installment of principal of and interest on such Note will be paid. Such
notice shall be mailed or transmitted by facsimile prior to such final Quarterly
Distribution Date and shall specify that such final installment will be payable
only upon presentation and surrender of such Note and shall specify the place
where such Note may be presented and surrendered for payment of such
installment.
As provided in the Indenture and subject to certain limitations set forth
therein, the transfer of this Note may be registered upon the records of the
Trustee upon surrender for transfer of any Note at the Principal Office of the
Trustee, duly endorsed for transfer or accompanied by an assignment duly
executed by the Registered Owner or his attorney duly authorized in writing, and
thereupon the Issuer shall execute and the Trustee shall authenticate and
deliver in the name of the transferee or transferees a new fully registered Note
or Notes of the same interest rate and for a like class and aggregate principal
amount of the same maturity.
As to any Note, the person in whose name the same shall be registered shall
be deemed and regarded as the absolute owner thereof for all purposes, and
payment of either principal or interest on any fully registered Note shall be
made only to or upon the written order of the Registered Owner thereof or his
legal representative but such registration may be changed as provided in the
Indenture. All such payments shall be valid and effectual to satisfy and
discharge the liability upon such Note to the extent of the sum or sums paid.
Each Registered Owner and each transferee of a Note shall be deemed to
represent and warrant that either (a) it is not acquiring the Note directly or
indirectly for, or on behalf of, an ERISA plan or any entity whose underlying
assets are deemed to be plan assets of such ERISA plan; or (b)(i) the
acquisition and holding of the Notes will not result in a nonexempt prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code or similar
law and (ii) if the Notes are subsequently deemed to be "plan assets" pursuant
to the regulations set forth at 29 C.F.R. Section 2510.3-101, it will promptly
dispose of the Notes.
The Trustee shall require the payment by any Registered Owner requesting
exchange or transfer of any tax or other governmental charge required to be paid
with respect to such exchange or transfer. The applicant for any such transfer
or exchange may be required to pay all taxes and governmental charges in
connection with such transfer or exchange, other than exchanges pursuant to the
Indenture.
The term "Issuer" as used in this Note includes any successor to the Issuer
under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances, to
merge or consolidate, subject to the rights of the Trustee and the Registered
Owners under the Indenture.
B-2-5
The Notes are issuable only in registered form in denominations as provided
in the Indenture, subject to certain limitations therein set forth.
This Note shall be construed in accordance with the laws of the State of
New York, without reference to its conflict of law provisions, and the
obligations, rights and remedies of the parties hereunder and thereunder shall
be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place and rate, and in the coin or currency, herein prescribed.
B-2-6
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
- --------------------------------------------------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
- --------------------------------------------------------------------------------
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints
- --------------------------------------------------------------------------------
attorney, to transfer said Note on the books kept for registration thereof, with
full power of substitution in the premises.
Dated:
By *
---------------------------------------
Name
-------------------------------------
Title
------------------------------------
Signature Guaranteed:
By *
--------------------------------------
*NOTICE: Signature(s) should be guaranteed
by a guarantor institution participating
in the Securities Transfer Agents
Medallion Program or in such other
guarantee program acceptable to the
Trustee. The Assignor's signature to this
assignment must correspond with the name
as it appears upon the face of the within
note in every particular without
alteration or any change whatever.
B-2-7
EXHIBIT B-3
FORM OF CLASS A-3 NOTE
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer (as
defined below) or its agent for registration of transfer, exchange or payment,
and any Note issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE
AMOUNT SHOWN ON THE FACE HEREOF. THIS NOTE IS NOT GUARANTEED OR INSURED BY ANY
GOVERNMENTAL AGENCY.
NELNET STUDENT LOAN TRUST 2004-3
STUDENT LOAN ASSET-BACKED NOTES
SENIOR CLASS A-3 (LIBOR)
REGISTERED NO. R-__ REGISTERED $__________
DATE OF ISSUANCE MATURITY DATE CUSIP NO. ISIN NO.
July 28, 2004 July 25, 2016 64031Q BA 8 US64031QBA85
PRINCIPAL SUM: DOLLARS
REGISTERED OWNER: CEDE & CO.
Nelnet Student Loan Trust 2004-3, a statutory trust organized and existing
under the laws of the State of Delaware (herein referred to as the "Issuer"),
for value received, hereby promises to pay to CEDE & CO., or registered assigns,
on each Quarterly Distribution Date the principal sum equal to the Class A-3
Noteholder's Principal Distribution Amount for such Quarterly Distribution Date,
as described in the Indenture of Trust dated as of July 1, 2004, between the
Issuer (by Wilmington Trust Company, in its capacity as Delaware Trustee) and
Zions First National Bank, a national banking association, as eligible lender
trustee and indenture trustee (the "Trustee") (capitalized terms used but not
defined herein being defined in Article I of the Indenture, which also contains
rules as to usage that shall be applicable herein); provided, however, that the
entire unpaid principal amount of this Note shall be due and payable on the
Maturity Date specified above (the "Class A-3 Maturity Date").
The Issuer shall pay interest on this Note at the rate per annum equal to
the Class A-3 Rate (as defined herein), on each Quarterly Distribution Date
until the principal of this Note is paid or made available for payment, on the
principal amount of this Note outstanding on the preceding Quarterly
Distribution Date or the Date of Issuance in the case of the first Quarterly
Distribution Date (after giving effect to all payments of principal made on the
preceding Quarterly Distribution Date), subject to certain limitations contained
in the Indenture. Interest on this Note shall accrue from and including the
preceding Quarterly Distribution Date (or, in the case of the first Interest
Accrual Period, the Date of Issuance) to but excluding the following Quarterly
Distribution Date (each an "Interest Accrual Period"). Interest shall be
calculated on the basis of the actual number of days elapsed in each Interest
Accrual Period divided by 360 and rounding the resultant figure to the fifth
decimal point. Such principal of and interest on this Note shall be paid in the
manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on the
reverse hereof, which shall have the same effect as though fully set forth on
the face of this Note.
Unless the certificate of authentication hereon has been executed by the
Trustee whose name appears below by manual signature, this Note shall not be
entitled to any benefit under the Indenture referred to on the reverse hereof,
or be valid or obligatory for any purpose.
B-3-2
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed, manually or in facsimile, as of the date set forth below.
NELNET STUDENT LOAN TRUST 2004-3
By WILMINGTON TRUST COMPANY, not in
its individual capacity but solely as
Delaware Trustee under the Trust
Agreement,
By
---------------------------------------
Authorized Signatory
Date: __________ __, ____
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
ZIONS FIRST NATIONAL BANK, not in its
individual capacity but solely as Trustee,
By
---------------------------------------
Authorized Signatory
Date: __________ __, ____
B-3-3
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Student Loan Asset-Backed Notes, Senior Class A-3 (the "Class
A-3 Notes"), which, together with the Issuer's Student Loan Asset-Backed Notes,
Senior Class A-1, Class A-2, Class A-4 and Class A-5 (together with the Class
A-3 Notes, the "Class A Notes") and the Issuer's Student Loan Asset-Backed
Notes, Class B (the "Class B Notes" and, together with the Class A Notes, the
"Notes"), are issued under and secured by the Indenture, to which Indenture and
all indentures supplemental thereto reference is hereby made for a statement of
the respective rights and obligations thereunder of the Issuer, the Trustee and
the Registered Owners. The Notes are subject to all terms of the Indenture.
The Class A-3 Notes are and will be secured by the Trust Estate pledged as
security therefor as provided in the Indenture. The Class A Notes are senior to
the Class B Notes as and to the extent provided in the Indenture. The Class A
Notes are, except for certain Termination Payments that are not Priority
Termination Payments, issued on a parity with any Derivative Products entered
into by the Issuer with a Counterparty, pursuant to which the Issuer will, from
time to time, owe Issuer Derivative Payments, and will, from time to time, be
owed Counterparty Payments.
Principal of the Class A-3 Notes shall be payable on each Quarterly
Distribution Date in an amount equal to the Class A-3 Noteholder's Principal
Distribution Amount for such Quarterly Distribution Date. "Quarterly
Distribution Date" means the twenty-fifth (25th) day of each January, April,
July and October or, if any such date is not a Business Day, the immediately
succeeding Business Day, commencing January 25, 2005.
As described on the face hereof, the entire unpaid principal amount of this
Note shall be due and payable on the Class A-3 Maturity Date. Notwithstanding
the foregoing, the entire unpaid principal amount of the Notes shall be due and
payable on the date on which (a) an Event of Default shall have occurred and be
continuing and (b) either the Trustee or the Registered Owners of Obligations
representing not less than a majority of the Outstanding Amount of the Highest
Priority Obligations shall have declared the Notes to be immediately due and
payable in the manner provided in the Indenture.
Interest on the Class A-3 Notes shall be payable on each Quarterly
Distribution Date on the principal amount outstanding of the Class A-3 Notes
until the principal amount thereof is paid in full, at a rate per annum equal to
the Class A-3 Rate. The "Class A-3 Rate" for each Interest Accrual Period, other
than the first Interest Accrual Period, shall be equal to the applicable
Three-Month LIBOR, plus 0.09%. The "Class A-3 Rate" for the first Interest
Accrual Period shall be determined by reference to the following formula: x +
[28/31 * (y-x)] (where: x = Five-Month LIBOR, and y = Six-Month LIBOR), plus
0.09%, as determined by the Administrator.
Payments of interest on this Note on each Quarterly Distribution Date,
together with the installment of principal, if any, to the extent not in full
payment of this Note, shall be paid to the Person in whose name such Note is
registered on the Record Date by check mailed first-class, postage prepaid to
such Person's address as it appears on the records of the Trustee on such Record
Date, except that, unless definitive Notes have been issued pursuant to the
Indenture, with respect to Notes registered on the Record Date in the name of
the nominee of the Clearing
B-3-4
Agency (initially, such nominee to be Cede & Co.), payment shall be made by wire
transfer in immediately available funds to the account designated by such
nominee. If funds are expected to be available, as provided in the Indenture,
for payment in full of the then remaining unpaid principal amount of this Note
on a Quarterly Distribution Date, then the Trustee shall notify the Person in
whose name a Note is registered at the close of business on the Record Date
preceding the Quarterly Distribution Date on which the Issuer expects that the
final installment of principal of and interest on such Note will be paid. Such
notice shall be mailed or transmitted by facsimile prior to such final Quarterly
Distribution Date and shall specify that such final installment will be payable
only upon presentation and surrender of such Note and shall specify the place
where such Note may be presented and surrendered for payment of such
installment.
As provided in the Indenture and subject to certain limitations set forth
therein, the transfer of this Note may be registered upon the records of the
Trustee upon surrender for transfer of any Note at the Principal Office of the
Trustee, duly endorsed for transfer or accompanied by an assignment duly
executed by the Registered Owner or his attorney duly authorized in writing, and
thereupon the Issuer shall execute and the Trustee shall authenticate and
deliver in the name of the transferee or transferees a new fully registered Note
or Notes of the same interest rate and for a like class and aggregate principal
amount of the same maturity.
As to any Note, the person in whose name the same shall be registered shall
be deemed and regarded as the absolute owner thereof for all purposes, and
payment of either principal or interest on any fully registered Note shall be
made only to or upon the written order of the Registered Owner thereof or his
legal representative but such registration may be changed as provided in the
Indenture. All such payments shall be valid and effectual to satisfy and
discharge the liability upon such Note to the extent of the sum or sums paid.
Each Registered Owner and each transferee of a Note shall be deemed to
represent and warrant that either (a) it is not acquiring the Note directly or
indirectly for, or on behalf of, an ERISA plan or any entity whose underlying
assets are deemed to be plan assets of such ERISA plan; or (b)(i) the
acquisition and holding of the Notes will not result in a nonexempt prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code or similar
law and (ii) if the Notes are subsequently deemed to be "plan assets" pursuant
to the regulations set forth at 29 C.F.R. Section 2510.3-101, it will promptly
dispose of the Notes.
The Trustee shall require the payment by any Registered Owner requesting
exchange or transfer of any tax or other governmental charge required to be paid
with respect to such exchange or transfer. The applicant for any such transfer
or exchange may be required to pay all taxes and governmental charges in
connection with such transfer or exchange, other than exchanges pursuant to the
Indenture.
The term "Issuer" as used in this Note includes any successor to the Issuer
under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances, to
merge or consolidate, subject to the rights of the Trustee and the Registered
Owners under the Indenture.
B-3-5
The Notes are issuable only in registered form in denominations as provided
in the Indenture, subject to certain limitations therein set forth.
This Note shall be construed in accordance with the laws of the State of
New York, without reference to its conflict of law provisions, and the
obligations, rights and remedies of the parties hereunder and thereunder shall
be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place and rate, and in the coin or currency, herein prescribed.
B-3-6
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
- --------------------------------------------------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
- --------------------------------------------------------------------------------
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints
- --------------------------------------------------------------------------------
attorney, to transfer said Note on the books kept for registration thereof, with
full power of substitution in the premises.
Dated: ___________________________
By *
---------------------------------------
Name
-------------------------------------
Title
------------------------------------
Signature Guaranteed:
By *
--------------------------------------
*NOTICE: Signature(s) should be guaranteed
by a guarantor institution participating
in the Securities Transfer Agents
Medallion Program or in such other
guarantee program acceptable to the
Trustee. The Assignor's signature to this
assignment must correspond with the name
as it appears upon the face of the within
note in every particular without
alteration or any change whatever.
B-3-7
EXHIBIT B-4
FORM OF CLASS A-4 NOTE
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer (as
defined below) or its agent for registration of transfer, exchange or payment,
and any Note issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE
AMOUNT SHOWN ON THE FACE HEREOF. THIS NOTE IS NOT GUARANTEED OR INSURED BY ANY
GOVERNMENTAL AGENCY.
NELNET STUDENT LOAN TRUST 2004-3
STUDENT LOAN ASSET-BACKED NOTES
SENIOR CLASS A-4 (LIBOR)
REGISTERED NO. R-__ REGISTERED $__________
DATE OF ISSUANCE MATURITY DATE CUSIP NO. ISIN NO.
July 28, 2004 January 25, 2021 64031Q BB 6 US64031QBB68
PRINCIPAL SUM: DOLLARS
REGISTERED OWNER: CEDE & CO.
Nelnet Student Loan Trust 2004-3, a statutory trust organized and existing
under the laws of the State of Delaware (herein referred to as the "Issuer"),
for value received, hereby promises to pay to CEDE & CO., or registered assigns,
on each Quarterly Distribution Date the principal sum equal to the Class A-4
Noteholder's Principal Distribution Amount for such Quarterly Distribution Date,
as described in the Indenture of Trust dated as of July 1, 2004, between the
Issuer (by Wilmington Trust Company, in its capacity as Delaware Trustee) and
Zions First National Bank, a national banking association, as eligible lender
trustee and indenture trustee (the "Trustee") (capitalized terms used but not
defined herein being defined in Article I of the Indenture, which also contains
rules as to usage that shall be applicable herein); provided, however, that the
entire unpaid principal amount of this Note shall be due and payable on the
Maturity Date specified above (the "Class A-4 Maturity Date").
The Issuer shall pay interest on this Note at the rate per annum equal to
the Class A-4 Rate (as defined herein), on each Quarterly Distribution Date
until the principal of this Note is paid or made available for payment, on the
principal amount of this Note outstanding on the preceding Quarterly
Distribution Date or the Date of Issuance in the case of the first Quarterly
Distribution Date (after giving effect to all payments of principal made on the
preceding Quarterly Distribution Date), subject to certain limitations contained
in the Indenture. Interest on this Note shall accrue from and including the
preceding Quarterly Distribution Date (or, in the case of the first Interest
Accrual Period, the Date of Issuance) to but excluding the following Quarterly
Distribution Date (each an "Interest Accrual Period"). Interest shall be
calculated on the basis of the actual number of days elapsed in each Interest
Accrual Period divided by 360 and rounding the resultant figure to the fifth
decimal point. Such principal of and interest on this Note shall be paid in the
manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on the
reverse hereof, which shall have the same effect as though fully set forth on
the face of this Note.
Unless the certificate of authentication hereon has been executed by the
Trustee whose name appears below by manual signature, this Note shall not be
entitled to any benefit under the Indenture referred to on the reverse hereof,
or be valid or obligatory for any purpose.
B-4-2
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed, manually or in facsimile, as of the date set forth below.
NELNET STUDENT LOAN TRUST 2004-3
By WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as
Delaware Trustee under the Trust
Agreement,
By
---------------------------------------
Authorized Signatory
Date: __________ __, ____
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
ZIONS FIRST NATIONAL BANK, not in its
individual capacity but solely as Trustee,
By
---------------------------------------
Authorized Signatory
Date: __________ __, ____
B-4-3
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Student Loan Asset-Backed Notes, Senior Class A-4 (the "Class
A-4 Notes"), which, together with the Issuer's Student Loan Asset-Backed Notes,
Senior Class A-1, Class A-2, Class A-3 and Class A-5 (together with the Class
A-4 Notes, the "Class A Notes") and the Issuer's Student Loan Asset-Backed
Notes, Subordinate Class B (the "Class B Notes" and, together with the Class A
Notes, the "Notes"), are issued under and secured by the Indenture, to which
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights and obligations thereunder of the Issuer, the
Trustee and the Registered Owners. The Notes are subject to all terms of the
Indenture.
The Class A-4 Notes are and will be secured by the Trust Estate pledged as
security therefor as provided in the Indenture. The Class A Notes (the "Class A
Notes") are senior to the Class B Notes as and to the extent provided in the
Indenture. The Class A Notes are, except for certain Termination Payments that
are not Priority Termination Payments, issued on a parity with any Derivative
Products entered into by the Issuer with a Counterparty, pursuant to which the
Issuer will, from time to time, owe Issuer Derivative Payments, and will, from
time to time, be owed Counterparty Payments.
Principal of the Class A-4 Notes shall be payable on each Quarterly
Distribution Date in an amount equal to the Class A-4 Noteholder's Principal
Distribution Amount for such Quarterly Distribution Date. "Quarterly
Distribution Date" means the twenty-fifth (25th) day of each January, April,
July and October or, if any such date is not a Business Day, the immediately
succeeding Business Day, commencing January 25, 2005.
As described on the face hereof, the entire unpaid principal amount of this
Note shall be due and payable on the Class A-4 Maturity Date. Notwithstanding
the foregoing, the entire unpaid principal amount of the Notes shall be due and
payable on the date on which (a) an Event of Default shall have occurred and be
continuing and (b) either the Trustee or the Registered Owners of Obligations
representing not less than a majority of the Outstanding Amount of the Highest
Priority Obligations shall have declared the Notes to be immediately due and
payable in the manner provided in the Indenture.
Interest on the Class A-4 Notes shall be payable on each Quarterly
Distribution Date on the principal amount outstanding of the Class A-4 Notes
until the principal amount thereof is paid in full, at a rate per annum equal to
the Class A-4 Rate. The "Class A-4 Rate" for each Interest Accrual Period, other
than the first Interest Accrual Period, shall be equal to the applicable
Three-Month LIBOR, plus 0.15%. The "Class A-4 Rate" for the first Interest
Accrual Period shall be determined by reference to the following formula: x +
[28/31 * (y-x)] (where: x = Five-Month LIBOR, and y = Six-Month LIBOR), plus
0.15%, as determined by the Administrator.
Payments of interest on this Note on each Quarterly Distribution Date,
together with the installment of principal, if any, to the extent not in full
payment of this Note, shall be paid to the Person in whose name such Note is
registered on the Record Date by check mailed first-class, postage prepaid to
such Person's address as it appears on the records of the Trustee on such Record
Date, except that, unless definitive Notes have been issued pursuant to the
Indenture, with respect to Notes registered on the Record Date in the name of
the nominee of the Clearing
B-4-4
Agency (initially, such nominee to be Cede & Co.), payment shall be made by wire
transfer in immediately available funds to the account designated by such
nominee. If funds are expected to be available, as provided in the Indenture,
for payment in full of the then remaining unpaid principal amount of this Note
on a Quarterly Distribution Date, then the Trustee shall notify the Person in
whose name a Note is registered at the close of business on the Record Date
preceding the Quarterly Distribution Date on which the Issuer expects that the
final installment of principal of and interest on such Note will be paid. Such
notice shall be mailed or transmitted by facsimile prior to such final Quarterly
Distribution Date and shall specify that such final installment will be payable
only upon presentation and surrender of such Note and shall specify the place
where such Note may be presented and surrendered for payment of such
installment.
As provided in the Indenture and subject to certain limitations set forth
therein, the transfer of this Note may be registered upon the records of the
Trustee upon surrender for transfer of any Note at the Principal Office of the
Trustee, duly endorsed for transfer or accompanied by an assignment duly
executed by the Registered Owner or his attorney duly authorized in writing, and
thereupon the Issuer shall execute and the Trustee shall authenticate and
deliver in the name of the transferee or transferees a new fully registered Note
or Notes of the same interest rate and for a like class and aggregate principal
amount of the same maturity.
As to any Note, the person in whose name the same shall be registered shall
be deemed and regarded as the absolute owner thereof for all purposes, and
payment of either principal or interest on any fully registered Note shall be
made only to or upon the written order of the Registered Owner thereof or his
legal representative but such registration may be changed as provided in the
Indenture. All such payments shall be valid and effectual to satisfy and
discharge the liability upon such Note to the extent of the sum or sums paid.
Each Registered Owner and each transferee of a Note shall be deemed to
represent and warrant that either (a) it is not acquiring the Note directly or
indirectly for, or on behalf of, an ERISA plan or any entity whose underlying
assets are deemed to be plan assets of such ERISA plan; or (b)(i) the
acquisition and holding of the Notes will not result in a nonexempt prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code or similar
law and (ii) if the Notes are subsequently deemed to be "plan assets" pursuant
to the regulations set forth at 29 C.F.R. Section 2510.3-101, it will promptly
dispose of the Notes.
The Trustee shall require the payment by any Registered Owner requesting
exchange or transfer of any tax or other governmental charge required to be paid
with respect to such exchange or transfer. The applicant for any such transfer
or exchange may be required to pay all taxes and governmental charges in
connection with such transfer or exchange, other than exchanges pursuant to the
Indenture.
The term "Issuer" as used in this Note includes any successor to the Issuer
under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances, to
merge or consolidate, subject to the rights of the Trustee and the Registered
Owners under the Indenture.
B-4-5
The Notes are issuable only in registered form in denominations as provided
in the Indenture, subject to certain limitations therein set forth.
This Note shall be construed in accordance with the laws of the State of
New York, without reference to its conflict of law provisions, and the
obligations, rights and remedies of the parties hereunder and thereunder shall
be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place and rate, and in the coin or currency, herein prescribed.
B-4-6
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
- --------------------------------------------------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
- --------------------------------------------------------------------------------
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints
- --------------------------------------------------------------------------------
attorney, to transfer said Note on the books kept for registration thereof, with
full power of substitution in the premises.
Dated: _______________________
By *
--------------------------------------
Name
-------------------------------------
Title
------------------------------------
Signature Guaranteed:
By *
--------------------------------------
*NOTICE: Signature(s) should be guaranteed
by a guarantor institution participating
in the Securities Transfer Agents
Medallion Program or in such other
guarantee program acceptable to the
Trustee. The Assignor's signature to this
assignment must correspond with the name
as it appears upon the face of the within
note in every particular without
alteration or any change whatever.
B-4-7
EXHIBIT B-5
FORM OF CLASS A-5 NOTE
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer (as
defined below) or its agent for registration of transfer, exchange or payment,
and any Note issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE
AMOUNT SHOWN ON THE FACE HEREOF. THIS NOTE IS NOT GUARANTEED OR INSURED BY ANY
GOVERNMENTAL AGENCY.
NELNET STUDENT LOAN TRUST 2004-3
STUDENT LOAN ASSET-BACKED NOTES
SENIOR CLASS A-5 (LIBOR)
REGISTERED NO. R-__ REGISTERED $__________
DATE OF ISSUANCE MATURITY DATE CUSIP NO. ISIN NO.
July 28, 2004 October 27, 2036 64031Q BC 4 US64031QBC42
PRINCIPAL SUM: DOLLARS
REGISTERED OWNER: CEDE & CO.
Nelnet Student Loan Trust 2004-3, a statutory trust organized and existing
under the laws of the State of Delaware (herein referred to as the "Issuer"),
for value received, hereby promises to pay to CEDE & CO., or registered assigns,
on each Quarterly Distribution Date the principal sum equal to the Class A-5
Noteholder's Principal Distribution Amount for such Quarterly Distribution Date,
as described in the Indenture of Trust dated as of July 1, 2004, between the
Issuer (by Wilmington Trust Company, in its capacity as Delaware Trustee) and
Zions First National Bank, a national banking association, as eligible lender
trustee and indenture trustee (the "Trustee") (capitalized terms used but not
defined herein being defined in Article I of the Indenture, which also contains
rules as to usage that shall be applicable herein); provided, however, that the
entire unpaid principal amount of this Note shall be due and payable on the
Maturity Date specified above (the "Class A-5 Maturity Date").
The Issuer shall pay interest on this Note at the rate per annum equal to
the Class A-5 Rate (as defined herein), on each Quarterly Distribution Date
until the principal of this Note is paid or made available for payment, on the
principal amount of this Note outstanding on the preceding Quarterly
Distribution Date or the Date of Issuance in the case of the first Quarterly
Distribution Date (after giving effect to all payments of principal made on the
preceding Quarterly Distribution Date), subject to certain limitations contained
in the Indenture. Interest on this Note shall accrue from and including the
preceding Quarterly Distribution Date (or, in the case of the first Interest
Accrual Period, the Date of Issuance) to but excluding the following Quarterly
Distribution Date (each an "Interest Accrual Period"). Interest shall be
calculated on the basis of the actual number of days elapsed in each Interest
Accrual Period divided by 360 and rounding the resultant figure to the fifth
decimal point. Such principal of and interest on this Note shall be paid in the
manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on the
reverse hereof, which shall have the same effect as though fully set forth on
the face of this Note.
Unless the certificate of authentication hereon has been executed by the
Trustee whose name appears below by manual signature, this Note shall not be
entitled to any benefit under the Indenture referred to on the reverse hereof,
or be valid or obligatory for any purpose.
B-5-2
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed, manually or in facsimile, as of the date set forth below.
NELNET STUDENT LOAN TRUST 2004-3
By WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as
Delaware Trustee under the Trust
Agreement
By
---------------------------------------
Authorized Signatory
Date: __________ __, ____
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
ZIONS FIRST NATIONAL BANK, not in its
individual capacity but solely as Trustee,
By
---------------------------------------
Authorized Signatory
Date: __________ __, ____
B-5-3
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Student Loan Asset-Backed Notes, Class A-5 (the "Class A-5
Notes"), which, together with the Issuer's Student Loan Asset-Backed Notes,
Class A-1, Class A-2, Class A-3 and Class A-4 (together with the Class A-5
Notes, the "Class A Notes") and the Issuer's Student Loan Asset-Backed Notes,
Class B (the "Class B Notes" and, together with the Class A Notes, the "Notes"),
are issued under and secured by the Indenture, to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights and obligations thereunder of the Issuer, the Trustee and the
Registered Owners. The Notes are subject to all terms of the Indenture.
The Class A-5 Notes are and will be secured by the Trust Estate pledged as
security therefor as provided in the Indenture. The Class A Notes (the "Class A
Notes") are senior to the Class B Notes as and to the extent provided in the
Indenture. The Class A Notes are, except for certain Termination Payments that
are not Priority Termination Payments, issued on a parity with any Derivative
Products entered into by the Issuer with a Counterparty, pursuant to which the
Issuer will, from time to time, owe Issuer Derivative Payments, and will, from
time to time, be owed Counterparty Payments.
Principal of the Class A-5 Notes shall be payable on each Quarterly
Distribution Date in an amount equal to the Class A-5 Noteholder's Principal
Distribution Amount for such Quarterly Distribution Date. "Quarterly
Distribution Date" means the twenty-fifth (25th) day of each January, April,
July and October or, if any such date is not a Business Day, the immediately
succeeding Business Day, commencing January 25, 2005.
As described on the face hereof, the entire unpaid principal amount of this
Note shall be due and payable on the Class A-5 Maturity Date. Notwithstanding
the foregoing, the entire unpaid principal amount of the Notes shall be due and
payable on the date on which (a) an Event of Default shall have occurred and be
continuing and (b) either the Trustee or the Registered Owners of Obligations
representing not less than a majority of the Outstanding Amount of the Highest
Priority Obligations shall have declared the Notes to be immediately due and
payable in the manner provided in the Indenture.
Interest on the Class A-5 Notes shall be payable on each Quarterly
Distribution Date on the principal amount outstanding of the Class A-5 Notes
until the principal amount thereof is paid in full, at a rate per annum equal to
the Class A-5 Rate. The "Class A-5 Rate" for each Interest Accrual Period, other
than the first Interest Accrual Period, shall be equal to the applicable
Three-Month LIBOR, plus 0.18%. The "Class A-5 Rate" for the first Interest
Accrual Period shall be determined by reference to the following formula: x +
[28/31 * (y-x)] (where: x = Five-Month LIBOR, and y = Six-Month LIBOR), plus
0.18%, as determined by the Administrator.
Payments of interest on this Note on each Quarterly Distribution Date,
together with the installment of principal, if any, to the extent not in full
payment of this Note, shall be paid to the Person in whose name such Note is
registered on the Record Date by check mailed first-class, postage prepaid to
such Person's address as it appears on the records of the Trustee on such Record
Date, except that, unless definitive Notes have been issued pursuant to the
Indenture, with respect to Notes registered on the Record Date in the name of
the nominee of the Clearing
B-5-4
Agency (initially, such nominee to be Cede & Co.), payment shall be made by wire
transfer in immediately available funds to the account designated by such
nominee. If funds are expected to be available, as provided in the Indenture,
for payment in full of the then remaining unpaid principal amount of this Note
on a Quarterly Distribution Date, then the Trustee shall notify the Person in
whose name a Note is registered at the close of business on the Record Date
preceding the Quarterly Distribution Date on which the Issuer expects that the
final installment of principal of and interest on such Note will be paid. Such
notice shall be mailed or transmitted by facsimile prior to such final Quarterly
Distribution Date and shall specify that such final installment will be payable
only upon presentation and surrender of such Note and shall specify the place
where such Note may be presented and surrendered for payment of such
installment.
As provided in the Indenture and subject to certain limitations set forth
therein, the transfer of this Note may be registered upon the records of the
Trustee upon surrender for transfer of any Note at the Principal Office of the
Trustee, duly endorsed for transfer or accompanied by an assignment duly
executed by the Registered Owner or his attorney duly authorized in writing, and
thereupon the Issuer shall execute and the Trustee shall authenticate and
deliver in the name of the transferee or transferees a new fully registered Note
or Notes of the same interest rate and for a like class and aggregate principal
amount of the same maturity.
As to any Note, the person in whose name the same shall be registered shall
be deemed and regarded as the absolute owner thereof for all purposes, and
payment of either principal or interest on any fully registered Note shall be
made only to or upon the written order of the Registered Owner thereof or his
legal representative but such registration may be changed as provided in the
Indenture. All such payments shall be valid and effectual to satisfy and
discharge the liability upon such Note to the extent of the sum or sums paid.
Each Registered Owner and each transferee of a Note shall be deemed to
represent and warrant that either (a) it is not acquiring the Note directly or
indirectly for, or on behalf of, an ERISA plan or any entity whose underlying
assets are deemed to be plan assets of such ERISA plan; or (b)(i) the
acquisition and holding of the Notes will not result in a nonexempt prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code or similar
law and (ii) if the Notes are subsequently deemed to be "plan assets" pursuant
to the regulations set forth at 29 C.F.R. Section 2510.3-101, it will promptly
dispose of the Notes.
The Trustee shall require the payment by any Registered Owner requesting
exchange or transfer of any tax or other governmental charge required to be paid
with respect to such exchange or transfer. The applicant for any such transfer
or exchange may be required to pay all taxes and governmental charges in
connection with such transfer or exchange, other than exchanges pursuant to the
Indenture.
The term "Issuer" as used in this Note includes any successor to the Issuer
under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances, to
merge or consolidate, subject to the rights of the Trustee and the Registered
Owners under the Indenture.
B-5-5
The Notes are issuable only in registered form in denominations as provided
in the Indenture, subject to certain limitations therein set forth.
This Note shall be construed in accordance with the laws of the State of
New York, without reference to its conflict of law provisions, and the
obligations, rights and remedies of the parties hereunder and thereunder shall
be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place and rate, and in the coin or currency, herein prescribed.
B-5-6
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
- --------------------------------------------------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
- --------------------------------------------------------------------------------
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints
- --------------------------------------------------------------------------------
attorney, to transfer said Note on the books kept for registration thereof, with
full power of substitution in the premises.
Dated: ___________________________
By *
--------------------------------------
Name
-------------------------------------
Title
------------------------------------
Signature Guaranteed:
By *
--------------------------------------
*NOTICE: Signature(s) should be guaranteed
by a guarantor institution participating
in the Securities Transfer Agents
Medallion Program or in such other
guarantee program acceptable to the
Trustee. The Assignor's signature to this
assignment must correspond with the name
as it appears upon the face of the within
note in every particular without
alteration or any change whatever.
B-5-7
EXHIBIT B-6
FORM OF CLASS B NOTE
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer (as
defined below) or its agent for registration of transfer, exchange or payment,
and any Note issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE
AMOUNT SHOWN ON THE FACE HEREOF. THIS NOTE IS NOT GUARANTEED OR INSURED BY ANY
GOVERNMENTAL AGENCY.
NELNET STUDENT LOAN TRUST 2004-3
STUDENT LOAN ASSET-BACKED NOTES
SUBORDINATE CLASS B (LIBOR)
REGISTERED NO. R-__ REGISTERED $__________
DATE OF ISSUANCE MATURITY DATE CUSIP NO. ISIN NO.
July 28, 2004 October 25, 2040 64031Q BE 0 US64031QBE08
PRINCIPAL SUM: DOLLARS
REGISTERED OWNER: CEDE & CO.
Nelnet Student Loan Trust 2004-3, a statutory trust organized and existing
under the laws of the State of Delaware (herein referred to as the "Issuer"),
for value received, hereby promises to pay to CEDE & CO., or registered assigns,
on each Quarterly Distribution Date the principal sum equal to the applicable
Class B Noteholder's Principal Distribution Amount for such Quarterly
Distribution Date, as described in the Indenture of Trust dated as of July 1,
2004, between the Issuer (by Wilmington Trust Company, in its capacity as
Delaware Trustee) and Zions First National Bank, a national banking association,
as eligible lender trustee and indenture trustee (the "Trustee") (capitalized
terms used but not defined herein being defined in Article I of the Indenture,
which also contains rules as to usage that shall be applicable herein);
provided, however, that the entire unpaid principal amount of this Note shall be
due and payable on the Maturity Date specified above (the "Class B Maturity
Date").
The Issuer shall pay interest on this Note at the rate per annum equal to
the Class B Rate (as defined on the reverse hereof), on each Quarterly
Distribution Date until the principal of this Note is paid or made available for
payment, on the principal amount of this Note outstanding on the preceding
Quarterly Distribution Date or the Date of Issuance in the case of the first
Quarterly Distribution Date (after giving effect to all payments of principal
made on the preceding Quarterly Distribution Date), subject to certain
limitations contained in the Indenture. Interest on this Note shall accrue from
and including the preceding Quarterly Distribution Date (or, in the case of the
first Interest Accrual Period, the Date of Issuance) to but excluding the
following Quarterly Distribution Date (each an "Interest Accrual Period").
Interest shall be calculated on the basis of the actual number of days elapsed
in each Interest Accrual Period divided by 360 and rounding the resultant figure
to the fifth decimal point. Such principal of and interest on this Note shall be
paid in the manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on the
reverse hereof, which shall have the same effect as though fully set forth on
the face of this Note.
Unless the certificate of authentication hereon has been executed by the
Trustee whose name appears below by manual signature, this Note shall not be
entitled to any benefit under the Indenture referred to on the reverse hereof,
or be valid or obligatory for any purpose.
B-6-2
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed, manually or in facsimile, as of the date set forth below.
NELNET STUDENT LOAN TRUST 2004-3
By WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as
Delaware Trustee under the Trust
Agreement,
By
---------------------------------------
Authorized Signatory
Date: __________ __, ____
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
ZIONS FIRST NATIONAL BANK, not in its
individual capacity but solely as Trustee,
By
---------------------------------------
Authorized Signatory
Date: __________ __, ____
B-6-3
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Student Loan Asset-Backed Notes, Subordinate Class B (the
"Class B Notes"), which, together with the Issuer's Student Loan Asset-Backed
Notes, Senior Class A-1, Class A-2, Class A-3, Class A-4 and Class A-5
(collectively, the "Class A Notes" and, together with the Class B Notes, the
"Notes"), are issued under and secured by the Indenture, to which Indenture and
all indentures supplemental thereto reference is hereby made for a statement of
the respective rights and obligations thereunder of the Issuer, the Trustee and
the Registered Owners. The Notes are subject to all terms of the Indenture.
The Class B Notes are and will be secured by the Trust Estate pledged as
security therefor as provided in the Indenture. The Class A Notes are senior to
the Class B Notes as and to the extent provided in the Indenture. The Class A
Notes are, except for certain Termination Payments that are not Priority
Termination Payments, issued on a parity with any Derivative Products entered
into by the Issuer with a Counterparty, pursuant to which the Issuer will, from
time to time, owe Issuer Derivative Payments, and will, from time to time, be
owed Counterparty Payments.
Principal of the Class B Notes shall be payable on each Quarterly
Distribution Date in an amount equal to the Class B Noteholder's Principal
Distribution Amount for such Quarterly Distribution Date. "Quarterly
Distribution Date" means the twenty-fifth (25th) day of each January, April,
July and October or, if any such date is not a Business Day, the immediately
succeeding Business Day, commencing January 25, 2005.
As described on the face hereof, the entire unpaid principal amount of this
Note shall be due and payable on the Class B Maturity Date. Notwithstanding the
foregoing, the entire unpaid principal amount of the Notes shall be due and
payable on the date on which (a) an Event of Default shall have occurred and be
continuing and (b) either the Trustee or the Registered Owners of Obligations
representing not less than a majority of the Outstanding Amount of the Highest
Priority Obligations shall have declared the Notes to be immediately due and
payable in the manner provided in the Indenture.
Interest on the Class B Notes shall be payable on each Quarterly
Distribution Date on the principal amount outstanding of the Class B Notes until
the principal amount thereof is paid in full, at a rate per annum equal to the
Class B Rate. The "Class B Rate" for each Interest Accrual Period, other than
the first Interest Accrual Period, shall be equal to the applicable Three-Month
LIBOR, plus 0.35%. The "Class B Rate" for the first Interest Accrual Period
shall be determined by reference to the following formula: x + [28/31 * (y-x)]
(where: x = Five-Month LIBOR, and y = Six-Month LIBOR), plus 0.35%, as
determined by the Administrator.
Payments of interest on this Note on each Quarterly Distribution Date,
together with the installment of principal, if any, to the extent not in full
payment of this Note, shall be paid to the Person in whose name such Note is
registered on the Record Date by check mailed first-class, postage prepaid to
such Person's address as it appears on the records of the Trustee on such Record
Date, except that, unless definitive Notes have been issued pursuant to the
Indenture, with respect to Notes registered on the Record Date in the name of
the nominee of the Clearing Agency (initially, such nominee to be Cede & Co.),
payment shall be made by wire transfer in immediately available funds to the
account designated by such nominee. If funds are expected to
B-6-4
be available, as provided in the Indenture, for payment in full of the then
remaining unpaid principal amount of this Note on a Quarterly Distribution Date,
then the Trustee shall notify the Person in whose name a Note is registered at
the close of business on the Record Date preceding the Quarterly Distribution
Date on which the Issuer expects that the final installment of principal of and
interest on such Note will be paid. Such notice shall be mailed or transmitted
by facsimile prior to such final Quarterly Distribution Date and shall specify
that such final installment will be payable only upon presentation and surrender
of such Note and shall specify the place where such Note may be presented and
surrendered for payment of such installment.
As provided in the Indenture and subject to certain limitations set forth
therein, the transfer of this Note may be registered upon the records of the
Trustee upon surrender for transfer of any Note at the Principal Office of the
Trustee, duly endorsed for transfer or accompanied by an assignment duly
executed by the Registered Owner or his attorney duly authorized in writing, and
thereupon the Issuer shall execute and the Trustee shall authenticate and
deliver in the name of the transferee or transferees a new fully registered Note
or Notes of the same interest rate and for a like class and aggregate principal
amount of the same maturity.
As to any Note, the person in whose name the same shall be registered shall
be deemed and regarded as the absolute owner thereof for all purposes, and
payment of either principal or interest on any fully registered Note shall be
made only to or upon the written order of the Registered Owner thereof or his
legal representative but such registration may be changed as provided in the
Indenture. All such payments shall be valid and effectual to satisfy and
discharge the liability upon such Note to the extent of the sum or sums paid.
Each Registered Owner and each transferee of a Note shall be deemed to
represent and warrant that either (a) it is not acquiring the Note directly or
indirectly for, or on behalf of, an ERISA plan or any entity whose underlying
assets are deemed to be plan assets of such ERISA plan; or (b)(i) the
acquisition and holding of the Notes will not result in a nonexempt prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code or similar
law and (ii) if the Notes are subsequently deemed to be "plan assets" pursuant
to the regulations set forth at 29 C.F.R. Section 2510.3-101, it will promptly
dispose of the Notes.
The Trustee shall require the payment by any Registered Owner requesting
exchange or transfer of any tax or other governmental charge required to be paid
with respect to such exchange or transfer. The applicant for any such transfer
or exchange may be required to pay all taxes and governmental charges in
connection with such transfer or exchange, other than exchanges pursuant to the
Indenture.
The term "Issuer" as used in this Note includes any successor to the Issuer
under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances, to
merge or consolidate, subject to the rights of the Trustee and the Registered
Owners under the Indenture.
The Notes are issuable only in registered form in denominations as provided
in the Indenture, subject to certain limitations therein set forth.
B-6-5
This Note shall be construed in accordance with the laws of the State of
New York, without reference to its conflict of law provisions, and the
obligations, rights and remedies of the parties hereunder and thereunder shall
be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place and rate, and in the coin or currency, herein prescribed.
B-6-6
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
- --------------------------------------------------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
- --------------------------------------------------------------------------------
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints
- --------------------------------------------------------------------------------
attorney, to transfer said Note on the books kept for registration thereof, with
full power of substitution in the premises.
Dated: _______________________
By *
--------------------------------------
Name
-------------------------------------
Title
------------------------------------
Signature Guaranteed:
By *
--------------------------------------
*NOTICE: Signature(s) should be guaranteed
by a guarantor institution participating
in the Securities Transfer Agents
Medallion Program or in such other
guarantee program acceptable to the
Trustee. The Assignor's signature to this
assignment must correspond with the name
as it appears upon the face of the within
note in every particular without
alteration or any change whatever.
B-6-7
EXHIBIT C
FORM OF ADMINISTRATOR'S MONTHLY
SERVICING PAYMENT DATE CERTIFICATE
This Administrator's Monthly Servicing Payment Date Certificate (the
"Certificate") is being provided by National Education Loan Network, Inc., as
Administrator (the "Administrator") to Nelnet Student Loan Trust 2004-3 (the
"Issuer") pursuant to Section 5.03(b) of the Indenture of Trust dated as of July
1, 2004 (the "Indenture"), between the Issuer and Zions First National Bank (the
"Trustee"). All capitalized terms used in this Certificate and not otherwise
defined shall have the same meanings as assigned to such terms in the Indenture.
Pursuant to this Certificate, the Administrator hereby directs the Trustee
to distribute to the Master Servicer, by 3:00 p.m. (New York time) on
__________, __________ (the "Monthly Servicing Payment Date"), from and to the
extent of the Available Funds on deposit in the Collection Fund, $__________
Servicing Fee due with respect to the preceding calendar month.
The Available Funds on this Monthly Servicing Payment Date is equal to
$__________.
The Administrator hereby certifies that the information herein is true and
accurate in all material respects, is in compliance with the provisions of the
Indenture and that the Trustee may conclusively rely on this Certificate with no
further duty to examine or determine the information contained herein.
IN WITNESS WHEREOF, the Administrator has caused this Certificate to be
duly executed and delivered as of the date written below.
NATIONAL EDUCATION LOAN
NETWORK, INC., as Administrator
By
---------------------------------------
Authorized Signatory
[DATE]
EXHIBIT D
FORM OF ADMINISTRATOR'S QUARTERLY DISTRIBUTION DATE
CERTIFICATE
This Administrator's Quarterly Distribution Date Certificate (the
"Certificate") is being provided by National Education Loan Network, Inc., as
Administrator (the "Administrator") to Nelnet Student Loan Trust 2004-3 (the
"Issuer") pursuant to Section 5.03(c) of the Indenture of Trust dated as of July
1, 2004 (the "Indenture"), between the Issuer and Zions First National Bank (the
"Trustee"). All capitalized terms used in this Certificate and not otherwise
defined shall have the same meanings as assigned to such terms in the Indenture.
Pursuant to this Certificate, the Administrator hereby directs the Trustee
to make the following deposits and distributions to the Persons or to the
account specified below by 3:00 p.m. (New York time) on __________ __, _____
(the "Quarterly Distribution Date"), to the extent of (x) the amount of
Available Funds in the Collection Fund, (y) the amount transferred from the
Reserve Fund pursuant to Section 5.04(b), (c) and (d) of the Indenture and (z)
the amount transferred from the Acquisition Fund pursuant to Section 5.02 of the
Indenture. The Trustee shall make the following deposits and distributions in
the following order of priority, and the Trustee shall comply with such
instructions:
(i) (a) The Servicing Fee to the Master Servicer, $ -
---
(b) The Trustee Fee to the Trustee, and $ -
---
(c) The Delaware Trustee Fee to the Delaware Trustee, $ -
---
payments described in (a) through (e) above to be made ratably,
without preference or priority of any kind, due on the Quarterly
Distribution Date in each case with such fees remaining unpaid from
prior Quarterly Distribution Dates (or as applicable from prior
Monthly Service Payment Dates);
(ii) (a) The Administration Fee to the Administrator $ -
---
(b) Any unpaid Administration Fees, if any, from prior Distribution
Dates to the Administrator due on the Distribution Date; $ -
---
(iii) (a) The Interest Distribution Amount to the Class A-1 Noteholders, $ -
---
The Interest Distribution Amount to the Class A-2 Noteholders, $ -
---
The Interest Distribution Amount to the Class A-3 Noteholders, $ -
---
The Interest Distribution Amount to the Class A-4 Noteholders, and $ -
---
The Interest Distribution Amount to the Class A-5 Noteholders, $ -
---
(b) Issuer Derivative Payments (excluding Termination Payments other
than Priority Termination Payments) to the Counterparties, pro
rata, without preference or priority of any kind, according to
the amounts payable to each such party; $ -
---
(iv) The Interest Distribution Amount to the Class B Noteholders; $ -
---
(v) An amount equal to the unpaid interest accrued on the Financed Student
Loans subsequent to the Cutoff Date but prior to the Date of Issuance,
until such amount has been paid in full, to the Sponsor; $ -
---
(vi) The Class A Principal Distribution Amount to the Class A-1 Noteholders
(until paid in full); $ -
---
(vii) The Class A Principal Distribution Amount to the Class A-2 Noteholders
(until paid in full); $ -
---
(viii) The Class A Principal Distribution Amount to the Class A-3 Noteholders
(until paid in full); $ -
---
(ix) The Class A Principal Distribution Amount to the Class A-4 Noteholders
(until paid in full); $ -
---
D-2
(x) The Class A Principal Distribution Amount to the Class A-5 Noteholders
(until paid in full); $ -
---
(xi) On and after the Stepdown Date (no Trigger Event is in effect), the
Class B Principal Distribution Amount to the Class B Noteholders
(until paid in full); $ -
---
(xii) Amounts to be deposited to the Reserve Fund necessary to reinstate the
balance of the Reserve Fund up to the Specified Reserve Fund Balance; $ -
---
(xiii) Amounts due to the Master Servicer representing the aggregate unpaid
amount of the Carryover Servicing Fee; $ -
---
(xiv) Amounts due to the Counterparties, pro rata, without preference or
priority (representing any accrued and unpaid Termination Payments due
under any Derivative Product Payments); $ -
---
(xv) If the Financed Eligible Loans have not been sold pursuant to Section
10.03 or 10.04 of the Indenture, amounts payable to the Noteholders
of the Notes constituting Class A Notes to pay as an accelerated
payment of principal balance on the Notes constituting Class A Notes
then Outstanding until the principal amount of the Notes constituting
Class A Notes is paid in full. $ -
---
(xvi) Remaining amounts to the Sponsor. $ -
---
Total Distributions $ -
===
The Available Funds on this Quarterly Distribution Date (Collection
Acct. and Reserve Fund Excess) $ -
===
Pursuant to this Certificate, if applicable, the Administrator further
hereby directs the Trustee to withdraw from the (a) the Acquisition Fund for
deposit to the Collection Fund an amount equal to $__________, representing the
amount of insufficient Available Funds in the Collection Account to make the
transfers required by Section(s) 5.03(c)(i) through (c)(iv) of the Indenture and
(b) the Reserve Fund for deposit to the Collection Fund (i) to the extent moneys
are not available to make the transfers from the Acquisition Fund, an amount
equal to $__________, representing the amount of insufficient Available Funds in
the Collection Account to make the transfers required by Sections 5.03(c)(i)
through 5.03(c)(iv) of the Indenture, and (ii) an amount equal to $__________,
representing the amount on deposit in the Reserve Fund in excess of the
Specified Reserve Fund Balance.
The Administrator hereby certifies that the information herein is true and
accurate in all material respects, is in compliance with the provisions of the
Indenture and that the Trustee may conclusively rely on this Certificate with no
further duty to examine or determine the information contained herein.
D-3
IN WITNESS WHEREOF, the Administrator has caused this Certificate to be
duly executed and delivered as of the date written below.
NATIONAL EDUCATION LOAN
NETWORK, INC., as Administrator
By
---------------------------------------
Authorized Signatory
Date _______________________
D-4