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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 10, 1997
THE NATIONAL COLLEGIATE TRUST 1997-S1 (as issuer under the Indenture, dated as
of April 1, 1997, providing for the issuance of 7.45% Class A Collateralized
Student Loan Bonds, Series 1997-S1 and 8.25% Class B Collateralized Student Loan
Bonds, Series 1997-S1)
The National Collegiate Trust 1997-S1
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(Exact name of Issuer as specified in its charter)
Delaware 33-63616 51-2019939
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(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification Number)
c/o Delaware Trust Capital Management, Inc.
900 Market Street
Wilmington, Delaware 19801
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(Address of Principal (Zip Code)
Executive Offices)
Registrant's telephone number, including area code (302) 421-7748
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Item 2. ACQUISITION OR DISPOSITION OF ASSETS
Description of the Bonds and the Student Loan Pool
On April 10, 1997, two series of bonds, entitled 7.45% Class A
Collateralized Student Loan Bonds, Series 1997-S1 and 8.25% Collateralized
Student Loan Bonds, Series 1997-S1 (the "Bonds") were issued pursuant to an
indenture (the "Indenture") attached hereto as Exhibit 4.1, dated as of April 1,
1997, between Delaware Trust Capital Management, Inc., as owner trustee for The
National Collegiate Trust 1997-S1 (the "Issuer"), and State Street Bank and
Trust Company, as indenture trustee (the "Trustee"). The Bonds are
collateralized by a pool of student loans (the "Student Loans") made to students
at the educational institutions identified below (the "Owner Participants") that
hold the beneficial ownership interests in the Issuer. The Student Loans were
purchased by the Issuer directly from either The First National Bank of Boston
or Bank of America National Association, as indicated below, simultaneously with
the closing for the sale of the Bonds. The trust estate of the Issuer (the
"Trust Estate") consists primarily of 2,657 Student Loans with an initial
aggregate principal amount as of April 10, 1997 of $6,484,747. The following is
a list of the Owner Participants whose students are borrowers of the Student
Loans held by the Issuer, together with the percentage of their ownership
interest in the Issuer:
<TABLE>
<CAPTION>
Name Of Institution Percentage Interest Originator
- ------------------- ------------------- ----------
<S> <C> <C>
Albright College 4.11% The First National Bank of Boston
Allegheny College 0.61% The First National Bank of Boston
Babson College 0.04% The First National Bank of Boston
Beaver College 3.71% The First National Bank of Boston
Bennington College 0.03% The First National Bank of Boston
Clarkson University 25.34% The First National Bank of Boston
Franciscan University of Steubenville 0.39% The First National Bank of Boston
Franklin Pierce College 2.94% The First National Bank of Boston
Geneva College 0.08% The First National Bank of Boston
Hartwick College 42.35% The First National Bank of Boston
Illinois Institute of Technology 0.07% Bank of America National Association
Linfield College 1.06% Bank of America National Association
Lycoming College 0.28% The First National Bank of Boston
Mount Ida College 2.89% The First National Bank of Boston
Oglethorpe University 0.50% The First National Bank of Boston
St. Anselm College 3.19% The First National Bank of Boston
Santa Clara University 0.88% Bank of America National Association
Seton Hill University 1.34% The First National Bank of Boston
Tulane University 1.80% The First National Bank of Boston
Utica College 0.79% The First National Bank of Boston
Wesleyan College 7.61% The First National Bank of Boston
</TABLE>
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The Bonds were sold by the Issuer to BancAmerica Securities, Inc. (the
"Underwriter") pursuant to a Master Underwriting Agreement, dated as of April 3,
1996, between The National Collegiate Trust (the "Depositor") and the
Underwriter, and the Terms Agreement, dated April 10, 1997, among the Depositor,
the Issuer and the Underwriter, attached hereto as Exhibit 1.1.
The Bonds will bear a fixed interest rate from the Closing Date of
7.45% per annum with respect to the Class A Bonds and 8.25% per annum with
respect to the Class B Bonds until the principal amount of each Class the Bonds
is paid in full, as more fully described in the Indenture. Interest on the Bonds
will be payable semiannually on the 20th day of each March and September, or, if
such 20th day is not a Business Day, on the first Business Day thereafter,
commencing on September 20, 1997 (each an "Interest Payment Date"). Interest is
payable on the Bonds in an amount equal to the interest accrued on the unpaid
principal amount of Bonds during the six-month period (or for the initial
Interest Payment Date, the period commencing with the Closing Date) ending on
the last day preceding each such Interest Payment Date. In addition, as more
fully described in the Indenture, principal payments on the Bonds will be
payable semiannually, pro rata among each Class on the basis of the principal
balance thereof, on the 20th day of each March and September, or, if such 20th
day is not a Business Day, on the first Business Day thereafter, commencing (i)
with respect to the Class A Bonds, on September 20, 2000 and (ii) with respect
to the Class B Bonds, following the payment in full of the Class A Bonds (which
initially may be the same Principal Payment Date on which the Class A Bonds are
paid in full) (each, a "Principal Payment Date"; together with the related
Interest Payment Date, a "Payment Date"), from all amounts on deposit in the
reserve fund (the "Reserve Fund") established and maintained by the Trustee for
the benefit of the holders of the Bonds pursuant to the Indenture, less the
amount of interest payable on the Bonds on the next succeeding Payment Date (the
"Interest Reserve Amount"), and, thereafter in an aggregate amount equal to the
sum (net of servicing fees) of: (i) monthly interest collected with respect to
the Student Loans during the six-month period ending on the 15th day of the
calendar month in which the related Payment Date occurs (each such period, a
"Collection Period") in excess of the amount needed to make the interest payment
on the Bonds and to pay certain expenses on such Principal Payment Date; (ii)
all monthly principal collected with respect to the Student Loans during the
related Collection Period together with any and all prepayments received with
respect to the Student Loans during the Collection Period; (iii) net liquidation
proceeds related to defaulted Student Loans received during the Collection
Period, including late payment charges on the Student Loans, if any; (iv)
reinvestment income deposited in the Collateral Proceeds Account established and
maintained by the Trustee for the benefit of the holders of the Bonds; and (v)
funds in the Reserve Fund in excess of the Interest Reserve Amount and less
payment of certain expenses.
Capitalized terms used in this Item 2 hereof and not otherwise defined
shall have the meanings assigned to them in the Indenture.
Items 1, 3, 4, 5, 6 and 8 are not included because they are not
applicable.
Item 7. Financial Statements and Exhibits
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(a) Not applicable
(b) Not applicable
(c) Exhibits
1.1 Terms Agreement, dated April 10, 1997, among The
National Collegiate Trust as Depositor, the Issuer and the Underwriter.
3(i) Trust Agreement, dated as of February 26, 1997,
between Delaware Trust Capital Management, Inc. and The National Collegiate
Trust 1997-S1.
4.1 Indenture, dated as of April 1, 1997, between Delaware
Trust Capital Management, Inc., as owner trustee for The National Collegiate
Trust 1997-S1, and State Street Bank and Trust Company, as indenture trustee.
10.1 Administration Agreement, dated as of April 1, 1997,
among the Issuer, Delaware Trust Capital Management, Inc., as owner trustee for
The National Collegiate Trust 1997-S1, State Street Bank and Trust Company, as
indenture trustee and First Marblehead Data Services Inc. as Administrator.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Issuer has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
THE NATIONAL COLLEGIATE TRUST
1997-S1
By: DELAWARE TRUST CAPITAL
MANAGEMENT, INC., not in its
individual capacity but as Owner
Trustee
By: /s/ Richard N. Smith
-----------------------------
Name: Richard N. Smith
Title: Vice President
Dated: April 22, 1997
<PAGE>
EXHIBITS TABLE
1.1 Terms Agreement, dated April 10, 1997, among The
National Collegiate Trust as Depositor, the Issuer and the Underwriter.
3(i) Trust Agreement, dated as of February 26, 1997,
between Delaware Trust Capital Management, Inc. and The National Collegiate
Trust 1997-S1.
4.1 Indenture, dated as of April 1, 1997, between Delaware
Trust Capital Management, Inc., as owner trustee for The National Collegiate
Trust 1997-S1, and State Street Bank and Trust Company, as indenture trustee.
10.1 Administration Agreement, dated as of April 1, 1997,
among the Issuer, Delaware Trust Capital Management, Inc., as owner trustee for
The National Collegiate Trust 1997-S1, State Street Bank and Trust Company, as
indenture trustee and First Marblehead Data Services Inc. as Administrator.
GATE(sm) RECEIVABLE ASSET-BACKED DEBT SECURITIES (GRADS(sm))
COLLATERALIZED STUDENT LOAN BONDS
SERIES 1997-S1
$8,000,000
TERMS AGREEMENT
Dated: April 10, 1997
To: The National Collegiate Trust (the "Company") and The National
Collegiate Trust 1997-S1 (the "Issuer")
Re: Underwriting Agreement dated as of April 3, 1996 (the "Agreement")
Series Designation: 7.45% Class A Collateralized Student Loan Bonds,
Series 1997-S1
8.25% Class B Collateralized Student Loan Bonds,
Series 1997-S1
Terms of the Bonds and Underwriting Compensation:
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Original Interest Price to
Principal Amount Rate Public
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Class A $5,250,000 7.45% 96.390625
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Class B $2,750,000 8.25% 95.312500
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Certificate Ratings:
Class A - Moody's Aa2; Class B - Moody's Baa2
Underwriting Fee:
1.20% of the original principal amount of the Series 1997-S1 Class A
Bonds issued. 2.00% of the original principal amount of the Series
1997-S1 Class B Bonds issued.
Purchase Price:
Class A 95.190625%
Class B 93.312500%
<PAGE>
Final Maturity:
September 20, 2013
Closing Date and Location:
April 10, 1997 at the office of Thacher Proffitt & Wood, New
York, New York.
Attached as EXHIBIT A are the Computational Materials
furnished by the Underwriter to prospective purchasers pursuant to
SECTIONS 3(G) and 6(A)(II) of the Agreement. The Issuer, the Company
and the Underwriter hereby agree to the terms of this Terms Agreement
and to the terms of the Underwriting Agreement, dated as of April 3,
1996, between the Company and BancAmerica Securities, Inc.
THE NATIONAL COLLEGIATE TRUST 1997-S1
By: DELAWARE TRUST CAPITAL
MANAGEMENT, INC., not in its individual
capacity, but solely as Owner Trustee
By:_________________________________
Name:
Title:
BANCAMERICA SECURITIES, INC.
By:_________________________________
Name:
Title:
ACCEPTED:
THE NATIONAL COLLEGIATE TRUST
By: DELAWARE TRUST CAPITAL MANAGEMENT,
INC., not in its individual capacity,
but solely as Owner Trustee
By:_________________________________
Name:
Title:
THE NATIONAL COLLEGIATE TRUST 1997-S1
TRUST AGREEMENT
Between
DELAWARE TRUST CAPITAL MANAGEMENT, INC.,
as OWNER TRUSTEE
and
THE NATIONAL COLLEGIATE TRUST
as DEPOSITOR
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS............................... 1
Section 1.01. CAPITALIZED TERMS............................................ 1
ARTICLE II
ORGANIZATION............................... 8
Section 2.01. NAME...................................................... 8
Section 2.02. OFFICE.................................................... 8
Section 2.03. PURPOSES AND POWERS....................................... 8
Section 2.04. APPOINTMENT OF THE OWNER TRUSTEE.......................... 10
Section 2.05. DECLARATION OF TRUST...................................... 10
Section 2.06. OTHER EXPENSES, LIABILITIES OF TRUST...................... 10
Section 2.07. SITUS OF TRUST............................................ 10
ARTICLE III
TRUST CERTIFICATES AND TRANSFER OF INTEREST............... 11
Section 3.01. ISSUANCE OF TRUST CERTIFICATE............................. 11
Section 3.02. REGISTRATION AND TRANSFER OF CERTIFICATES................. 11
Section 3.03. LOST, STOLEN, MUTILATED OR DESTROYED CERTIFICATES......... 12
Section 3.04. LIMITATION ON TRANSFER OF OWNERSHIP RIGHTS................ 12
Section 3.05. ASSIGNMENT OF RIGHT TO DISTRIBUTIONS...................... 13
ARTICLE IV
CONCERNING THE OWNERS.......................... 13
Section 4.01. ACTION BY OWNERS WITH RESPECT TO CERTAIN MATTERS.......... 13
Section 4.02. ACTION UPON INSTRUCTIONS.................................. 14
Section 4.03. SUPER-MAJORITY CONTROL.................................... 14
Section 4.04. REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR........... 15
Section 4.05. LIABILITY OF THE OWNERS................................... 15
Section 4.06. POWER OF ATTORNEY......................................... 15
ARTICLE V
INVESTMENT AND APPLICATION OF TRUST FUNDS................ 16
Section 5.01. INVESTMENT OF TRUST FUNDS................................. 16
Section 5.02. APPLICATION OF FUNDS...................................... 16
<PAGE>
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ARTICLE VI
CAPITAL................................. 17
Section 6.01. TAX CHARACTERIZATION......................................... 17
Section 6.02. CAPITAL CONTRIBUTIONS OF OWNERS.............................. 17
Section 6.03. CAPITAL ACCOUNTS............................................. 17
Section 6.04. INTEREST..................................................... 18
Section 6.05. ADDITIONAL CAPITAL CONTRIBUTIONS............................. 18
Section 6.06. INVESTMENT OF CAPITAL CONTRIBUTIONS.......................... 18
Section 6.07. REPAYMENT AND RETURN OF CAPITAL CONTRIBUTIONS................ 18
ARTICLE VII
ALLOCATION OF PROFIT AND LOSS; DISTRIBUTIONS............... 19
Section 7.01. PROFIT....................................................... 19
Section 7.02. LOSS......................................................... 20
Section 7.03. SPECIAL ALLOCATIONS.......................................... 20
Section 7.04. CURATIVE ALLOCATIONS......................................... 22
Section 7.05. OTHER ALLOCATION RULES....................................... 23
Section 7.06. DISTRIBUTION OF NET CASH FLOW................................ 23
Section 7.07. DISTRIBUTION STATEMENT....................................... 23
Section 7.08. ALLOCATION OF TAX LIABILITY.................................. 24
Section 7.09. METHOD OF PAYMENT............................................ 24
Section 7.10. NO SEGREGATION OF FUNDS; NO INTEREST......................... 24
Section 7.11. INTERPRETATION AND APPLICATION OF PROVISIONS BY THE
ADMINISTRATOR............................................................... 24
ARTICLE VIII
AUTHORITY AND DUTIES OF THE OWNER TRUSTEE................ 25
Section 8.01. GENERAL AUTHORITY............................................ 25
Section 8.02. SPECIFIC AUTHORITY........................................... 25
Section 8.03. GENERAL DUTIES............................................... 25
Section 8.04. ACCOUNTING AND REPORTS TO THE OWNERS, THE INTERNAL REVENUE
SERVICE AND OTHERS.......................................................... 25
Section 8.05. SIGNATURE OF RETURNS......................................... 26
Section 8.06. RIGHT TO RECEIVE AND RELY UPON INSTRUCTIONS.................. 26
Section 8.07. NO DUTIES EXCEPT AS SPECIFIED IN THIS AGREEMENT OR IN
INSTRUCTIONS................................................................ 26
Section 8.08. NO ACTION EXCEPT UNDER SPECIFIED DOCUMENTS OR INSTRUCTIONS... 26
Section 8.09. RESTRICTION.................................................. 27
<PAGE>
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ARTICLE IX
CONCERNING THE OWNER TRUSTEE....................... 27
Section 9.01. ACCEPTANCE OF TRUSTS AND DUTIES.............................. 27
Section 9.02. FURNISHING OF DOCUMENTS...................................... 28
Section 9.03. RELIANCE; ADVICE OF COUNSEL.................................. 28
Section 9.04. NOT ACTING IN INDIVIDUAL CAPACITY............................ 29
ARTICLE X
COMPENSATION OF OWNER TRUSTEE...................... 29
Section 10.01. OWNER TRUSTEE'S FEES AND EXPENSES........................... 29
Section 10.02. INDEMNIFICATION............................................. 29
Section 10.03. LIEN ON TRUST PROPERTY...................................... 29
Section 10.04. PAYMENTS TO THE OWNER TRUSTEE............................... 29
ARTICLE XI
TERMINATION OF TRUST........................... 30
Section 11.01. TERMINATION OF TRUST........................................ 30
Section 11.02. DISTRIBUTION OF ASSETS...................................... 30
Section 11.03. NO TERMINATION BY DEPOSITOR OR OWNERS....................... 31
ARTICLE XII
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES.......... 31
Section 12.01. RESIGNATION OF OWNER TRUSTEE; APPOINTMENT OF SUCCESSOR...... 31
Section 12.02. APPOINTMENT OF ADDITIONAL OWNER TRUSTEES.................... 32
ARTICLE XIII
TAX MATTERS PARTNER........................... 32
Section 13.01. TAX MATTERS PARTNER......................................... 32
Section 13.02. NOTICE OF TAX AUDIT......................................... 33
Section 13.03. AUTHORITY TO EXTEND PERIOD FOR ASSESSING TAX................ 33
Section 13.04. CHOICE OF FORUM FOR FILING PETITION FOR READJUSTMENT........ 33
Section 13.05. AUTHORITY TO BIND OWNERS BY SETTLEMENT AGREEMENT............ 33
Section 13.06. NOTICES SENT TO THE INTERNAL REVENUE SERVICE................ 33
Section 13.07. INDEMNIFICATION OF TAX MATTERS PARTNER...................... 33
Section 13.08. APPROVAL OF TAX MATTERS PARTNER'S DECISIONS................. 33
Section 13.09. PARTICIPATION BY OWNERS IN INTERNAL REVENUE SERVICE
ADMINISTRATIVE PROCEEDINGS.................................................. 34
<PAGE>
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ARTICLE XIV
MISCELLANEOUS.............................. 34
Section 14.01. SUPPLEMENTS AND AMENDMENTS.................................. 34
Section 14.02. NO LEGAL TITLE TO TRUST PROPERTY IN OWNER................... 34
Section 14.03. PLEDGE OF COLLATERAL BY OWNER TRUSTEE IS BINDING............ 34
Section 14.04. LIMITATIONS ON RIGHTS OF OTHERS............................. 34
Section 14.05. NOTICES..................................................... 35
Section 14.06. SEVERABILITY................................................ 35
Section 14.07. SEPARATE COUNTERPARTS....................................... 35
Section 14.08. SUCCESSORS AND ASSIGNS...................................... 35
Section 14.09. HEADINGS.................................................... 35
Section 14.10. GOVERNING LAW............................................... 35
Section 14.11. GENERAL INTERPRETIVE PRINCIPLES............................. 35
EXHIBIT 1 FORM OF TRUST CERTIFICATE
EXHIBIT 2 FORM OF ACCESSION AGREEMENT
EXHIBIT 3 FORM OF CERTIFICATE OF TRUST
EXHIBIT 4 FEE SCHEDULE
<PAGE>
TRUST AGREEMENT, dated as of February 26, 1997, between The National
Collegiate Trust, a Delaware business trust (the "Depositor"), and Delaware
Trust Capital Management, Inc., a Delaware trust company (the "Owner Trustee").
ARTICLE I
DEFINITIONS
Section 1.01. CAPITALIZED TERMS. For all purposes of this
Agreement, the following terms shall have the meaning set forth below:
"Administration Agreement" means the Administration Agreement,
dated as of April 1, 1997, among the Trust, the Indenture Trustee and First
Marblehead Data Services Inc., as Administrator, as it may be amended from time
to time.
"Administrator" means First Marblehead Data Services Inc., a
Delaware corporation, as Administrator under the Administration Agreement, or
any successor Administrator as appointed pursuant to the terms of the
Administration Agreement.
"Affiliate" 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.
"Agreement" means this Trust Agreement, as it may be amended
or restated from time to time.
"Allocable Bonds" means, as to any Owner, the then outstanding
aggregate principal balance of Bonds which are collateralized by such Owner's
Allocable Student Loans. The initial Allocable Bonds for each Owner are set
forth on Schedule A attached hereto. Thereafter, the Allocable Bonds as to any
Owner shall be determined by multiplying the then outstanding aggregate
principal balance of the Bonds by a percentage derived by dividing the initial
Allocable Bonds for such Owner by the initial aggregate principal balance of the
Bonds.
"Allocable Student Loans" means, as to any Owner, the then
outstanding aggregate principal balance of Student Loans originated by the
Originator and made to students who were attending or recently graduated from
such Owner. The initial Allocable Student Loans for each Owner are set forth on
Schedule A attached hereto.
"Authorized Officer" means any officer of the Owner Trustee
who is authorized to act for the Owner Trustee in matters relating to, and
binding upon, the Trust and whose name
<PAGE>
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appears on a list of such authorized officers furnished by the Owner Trustee as
such list may be amended or supplemented from time to time.
"Beneficial Interest" as to any Owner, means all or any part
of the interest of that Owner in the Trust, including without limitation its (i)
right to a distributive share of the Profit and Loss of the Trust, (ii) right to
a distributive share of the assets of the Trust, and (iii) right to direct or
consent to actions of the Owner Trustee and otherwise participate in the
management of and control the affairs of the Trust.
"Bonds" means collateralized student loan bonds to be issued
by the Trust pursuant to the Indenture.
"Business Day" means any day that is not a Saturday, Sunday or
any other day on which commercial banking institutions in Delaware are
authorized or obligated by law or executive order to be closed.
"Capital Account" means the Capital Account maintained for
each Owner pursuant to Article VI of this Agreement.
"Capital Contribution" means the amount of money contributed
by an Owner to the capital of the Trust, which shall be deemed to be such
Owner's share of the Securitization Reserves (as defined in the Master
Securitization Agreement or the Note Purchase Agreement, as the case may be,
with respect to the related Originator) plus the excess of the aggregate
principal balance of such Owner's Allocable Student Loans over the aggregate
principal balance of such Owner's Allocable Bonds as of the Closing Date, as set
forth on Schedule A to this Agreement.
"Certificate of Trust" means the Certificate of Trust to be
filed with the Secretary of State of the State of Delaware by the Owner Trustee
on behalf of the Trust pursuant to Section 8.02.
"Closing Date" means April 9, 1997.
"Depositor" means The National Collegiate Trust, a Delaware
business trust.
"Distributions" means any money or other property distributed
to an Owner with respect to its Beneficial Interest.
"Distribution Date" means the first Business Day following a
day on which the Owner Trustee obtains receipt of funds or, if instructed by the
Owners, such other Business Day as they shall specify in writing.
<PAGE>
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"Distribution Date Statement" means the statement described as
such in Section 7.07.
"Eligible Investments" means one or more of the following:
(i) obligations of or guaranteed as to principal and interest
by the United States or any agency or instrumentality thereof when such
obligations are backed by the full faith and credit of the United
States;
(ii) repurchase agreements on obligations specified in clause
(i) maturing not more than one month from the date of acquisition
thereof, provided that the unsecured obligations of the party agreeing
to repurchase such obligations are at the time rated by the Rating
Agency in its highest short-term rating available;
(iii) federal funds, certificates of deposit, demand deposits,
time deposits and bankers' acceptances (which shall each have an
original maturity of not more than 90 days and, in the case of bankers'
acceptances, shall in no event have an original maturity of more than
365 days or a remaining maturity of more than 30 days) denominated in
United States dollars of any U.S. depository institution or trust
company incorporated under the laws of the United States or any state
thereof or of any domestic branch of a foreign depository institution
or trust company; provided that the debt obligations of such depository
institution or trust company at the date of acquisition thereof has
been rated by the Rating Agency in its highest short-term rating
available; and, provided further that, if the original maturity of such
short-term obligations of a domestic branch of a foreign depository
institution or trust company shall exceed 30 days, the short-term
rating of such institution shall have a credit rating in one of the two
highest applicable categories from the Rating Agency;
(iv) commercial paper (having original maturities of not more
than 365 days) of any corporation incorporated under the laws of the
United States or any state thereof which on the date of acquisition has
been rated by the Rating Agency in its highest short-term rating
available; provided that such commercial paper shall have a remaining
maturity of not more than 30 days;
(v) a money market fund rated by the Rating Agency in its
highest rating available; and
(vi) other obligations or securities that are acceptable to
the Rating Agency as an Eligible Investment hereunder and will not
result in a reduction in the then current ratings of the Bonds, as
evidenced in writing;
<PAGE>
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provided, however, that no instrument shall be an Eligible Investment if it
represents either (1) the right to receive only interest payments with respect
to the underlying debt instrument or (2) the right to receive both principal and
interest payments derived from the obligations underlying such instrument and
the principal and interest payments with respect to such instrument provide a
yield to maturity greater than 120% of the yield to maturity at par of such
underlying obligations; and, provided further, that, Eligible Investments shall
include only such obligations or securities that mature on or before the
Business Day immediately preceding the next Distribution Date. In addition, no
Eligible Investment which incorporates a penalty for early withdrawal shall be
acquired unless the maturity of such Eligible Investment is on or before the
Business Day immediately preceding the next Distribution Date.
"Fiscal Year" means the calendar year or such portion thereof
as the Trust may be in existence.
"Indenture" means the trust indenture between the Trust and
the Indenture Trustee pursuant to which the Bonds are to be issued.
"Indenture Trustee" means the bank or trust company acting as
Indenture trustee under the Indenture.
"Master Securitization Agreement" means that certain Master
Purchase and Securitization Agreement between the Owner and The First National
Bank of Boston, as the Originator.
"Net Cash Flow" means with respect to any fiscal period of the
Trust, all revenues of the Trust decreased by (a) cash expenditures for
operating expenses (including interest on indebtedness of the Trust but not
including expense items which do not require current cash outlay), (b) capital
expenditures to the extent not made from reserves, (c) reserves for capital
expenditures, contingencies and working capital established in such amounts as
the Owner Trustee, with the consent of the Owners, may determine, (d) repayments
of principal on any Trust indebtedness and (e) taxes.
"Net Interest Income Attributable to Student Loans" means,
with respect to a Fiscal Year, the interest income from the Student Loans minus
any servicing fees and expenses, other operating expenses of the Trust and
interest expense of the Bonds.
"Net Interest Income Attributable to Student Loans as to Each
Owner" means Net Interest Income Attributable to Student Loans (i) multiplied by
the interest rate on such Owner's Related Owner's Notes divided by the weighted
average interest rate on the Notes and (ii) such product multiplied by such
Owner's Allocable Student Loans as at the end of such Fiscal Year divided by the
aggregate principal balance of the Student Loans as at the end of such Fiscal
Year.
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"Net Interest Income Attributable to Reserve Accounts" means,
with respect to a Fiscal Year, interest income from investments of all funds
held by the Indenture Trustee for the benefit of the holders of the Bonds and/or
the Trust and all funds, if any, held by the Owner Trustee or its agents for the
benefit of the Owners.
"Net Interest Income Attributable to Reserve Accounts as to
Each Owner" means Net Interest Income Attributable to Reserve Accounts
multiplied by such Owner's Allocable Bonds divided by the then outstanding
aggregate principal balance of the Bonds.
"Note Purchase Agreement" means that certain Note Purchase
Agreement between the Owner and Bank of America National Association as the
Originator.
"Notes" means the promissory notes to be sold to the Trust by
each Originator pursuant to the Master Securitization Agreement or the Note
Purchase Agreement, as the case may be.
"Originator" means either Bank of America National Association
or The First National Bank of Boston.
"Owner" means the Depositor and each of its successors in
interest as beneficiaries of the Trust pursuant to Article III hereof.
"Owner Trustee" means Delaware Trust Capital Management, Inc.,
a Delaware trust company.
"Percentage Interest" means the initial undivided beneficial
interest in the Trust Property of an Owner expressed as a percentage of the
total initial undivided beneficial interests in the Trust Property. References
to Percentage Interests herein shall be solely for the purpose of certificating
Owners' interests hereunder and for any other purpose specified in this
Agreement.
"Periodic Filings" means any filings or submissions that the
Trust is required to make with any state or Federal regulatory agency or under
the Code.
"Person" means any individual, corporation, partnership, joint
venture, limited liability company, association, trust (including any
beneficiary thereof), estate, custodian, nominee, unincorporated organization or
government or any agency or political subdivision thereof.
"Rating Agency" means Moody's Investors Service, Inc. or
Standard & Poor's Ratings Services, A Division of the McGraw-Hill Companies,
Inc.
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"Related Owner Notes" means, with respect to any Owner, all of
the Notes transferred to the Trust which represent Student Loans to students who
were attending or recently graduated from such Owner at the time such Student
Loans were originated.
"Sharing Ratio" means, with respect to any Owner and as of any
date, the ratio (expressed as a percentage) of (i) the sum of such Owner's
unreturned Capital Contribution and the aggregate unpaid principal balance of
such Owner's Related Owner Notes that are not in default to (ii) the sum of all
of the Owners' unreturned Capital Contributions and the aggregate unpaid
principal balance of the Notes that are not in default.
"Student Loan" means the education loans to students
originated under the GATESM (Guaranteed Access to Education) student loan
program.
"Super-majority Owners" shall have the meaning set forth in
Section 4.03.
"Transfer" means the sale, transfer or other assignment of all
of an Owner's right, title and interest in all or a portion of such Owner's
Beneficial Interest.
"Trust" means the trust established by this Agreement.
"Trust Certificate" means a certificate evidencing the
Beneficial Interest of an Owner in substantially the form attached hereto as
Exhibit 1.
"Trust Property" means all right, title and interest of the
Owner Trustee in and to any property contributed to the Trust by the Owners or
otherwise acquired by the Trust, including without limitation all distributions,
payments or proceeds thereon.
"Trust Related Agreements" means any instruments or agreements
signed by the Owner Trustee on behalf of the Trust, including the Administration
Agreement.
TAX TERMS:
"Adjusted Capital Account Deficit" means, with respect to any
Partner, the deficit balance, if any, in such Partner's Capital Account as of
the end of the relevant Fiscal Year, after giving effect to the following
adjustments:
(i) Credit to such Capital Account the minimum gain
chargeback that such Partner is deemed to be obligated to
restore pursuant to the penultimate sentences of Regulations
Sections 1.704-2(g)(1) and 1.704-2(i)(5); and
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(ii) Debit to such Capital Account the items described
in Section 1.704- 1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5),
and 1.704-1(b)(2)(ii)(d)(6) of the Regulations.
The foregoing definition of Adjusted Capital Account Deficit
is intended to comply with the provisions of Section 1.704-1(b)(2)(ii)(d) of the
Regulations and shall be interpreted consistently therewith.
"Code" means the Internal Revenue Code of 1986, as amended.
"Nonrecourse Liability" has the meaning set forth in Section
1.704-2(b)(3) of the Regulations.
"Nonrecourse Deductions" has the meaning set forth in Section
1.704-2(b)(1) of the Regulations.
"Partners" means the Owners.
"Partnership" means the Trust.
"Partner Nonrecourse Debt" has the meaning set forth in
Section 1.704-2(b)(4) of the Regulations.
"Partner Nonrecourse Debt Minimum Gain" means an amount, with
respect to each Partner Nonrecourse Debt, equal to the Partnership
Minimum Gain that would result if such Partner Nonrecourse Debt were
treated as a Nonrecourse Liability, determined in accordance with
Section 1.704-2(i)(3) of the Regulations.
"Partner Nonrecourse Deductions" has the meaning set forth in
Sections 1.704- 2(i)(1) and 1.704-2(i)(2) of the Regulations.
"Partnership Minimum Gain" has the meaning set forth in
Section 1.704-2(b)(2) and 1.704-2(d) of the Regulations.
"Profit and Loss" means, for each Fiscal Year, an amount equal
to the Partnership's taxable income or loss for such Fiscal Year,
determined in accordance with Code Section 703(a) (for this purpose,
all items of income, gain, loss, or deduction required to be stated
separately pursuant to Code Section 703(a)(1) shall be included in
taxable income or loss), with the following adjustments:
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(i) Any income of the Partnership that is exempt from
federal income tax and not otherwise taken into account in
computing Profit or Loss pursuant to this definition shall be
added to such taxable income or loss;
(ii) Any expenditures of the Partnership described in
Code Section 705(a)(2)(B) or treated as Code Section
705(a)(2)(B) expenditures pursuant to Regulations Section
1.704-1(b)(2)(iv)(i), and not otherwise taken into account in
computing Profit or Loss pursuant to this definition, shall be
subtracted from such taxable income or loss;
(iii) Notwithstanding any other provisions of this
definition, any items which are specially allocated pursuant
to Section 7.03 or Section 7.04 shall not be taken into
account in computing Profit or Loss.
The amounts of the items of Partnership income, gain, loss, or
deduction available to be specially allocated pursuant to Section 7.03
and 7.04 shall be determined by applying rules analogous to those set
forth in clauses (i) and (ii) above.
"Regulations" means the federal income tax regulations
promulgated by the United States Treasury Department under the Code as
such Regulations may be amended from time to time. All references
herein to a specific section of the Regulations shall be deemed also to
refer to any corresponding provision of succeeding Regulations.
ARTICLE II
ORGANIZATION
Section 2.01. NAME. The Trust created hereby shall be known as The
National Collegiate Trust 1997-S1, in which name the Owner Trustee may take any
action as provided herein.
Section 2.02. OFFICE. The office of the Trust shall be in care of
the Owner Trustee, at the address set forth in Section 14.05. The Trust shall
also have an office at 237 Park Avenue, New York, New York 10017.
Section 2.03. PURPOSES AND POWERS. (a) The purpose of the Trust is
to engage in the following activities:
(i) to prepare and deliver a Prospectus, a Prospectus
Supplement and other offering materials in connection with public issuance and
sale of the Bonds;
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(ii) to acquire a pool of Student Loans and to issue the
Bonds;
(iii) to engage in those activities and to enter into such
agreements that are necessary, suitable or convenient to accomplish the
foregoing or are incidental thereto or connected therewith; and
(iv) to engage in such other activities as may be required in
connection with conservation of the Trust Property and distributions to
Owners. Until the Indenture is discharged, the Trust shall not engage
in any business or activities other than in connection with, or
relating to, the foregoing and other than as required or authorized by
the terms of this Agreement and the Indenture, except as are incidental
to and necessary to accomplish such activities.
(b) Until the Indenture is discharged, the operations of the Trust
shall be conducted in accordance with the following standards:
(i) the Trust will act solely in its own name and the Owner
Trustee or other agents selected in accordance with this Agreement will
act on behalf of the Trust subject to direction by the Owners as
provided herein, but such action shall not be in violation of the terms
of this Agreement;
(ii) the Trust's funds and assets shall at all times be
maintained separately from those of the Owners and any of their
respective Affiliates;
(iii) the Trust shall maintain complete and correct books,
minutes of the meetings and proceedings of the Owners, and records of
accounts;
(iv) the Trust shall conduct its business at the office of the
Owner Trustee and will use stationery and other business forms of the
Trust under its own name and not that of the Owners or any of their
respective Affiliates, and will avoid the appearance (x) of conducting
business on behalf of any Owner or any Affiliate of an Owner or (y)
that the assets of the Trust are available to pay the creditors of the
Owner Trustee or any Owner;
(v) the Trust's operating expenses shall be paid out of its
own funds;
(vi) the Trust shall not hold itself out as being liable for
the debts of any Owner or any Affiliates of any Owner; and
(vii) the Owners of the Trust Certificates shall meet at least
once each year (which meeting may be by telephonic conference, if not
held in the State of Delaware) and take such actions as may be
necessary to authorize actions of the Trust, copies of the minutes of
such meetings shall be promptly delivered to the Owner Trustee;
provided,
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that any Owner that has the right to vote as to any matter shall be
given notice thereof at least seven days in advance of any such vote,
which notice may be waived by such Owner in writing.
Section 2.04. APPOINTMENT OF THE OWNER TRUSTEE. The Depositor hereby
appoints the Owner Trustee as trustee of the Trust effective as of the date
hereof, to have all the rights, powers and duties set forth herein. The Owner
Trustee acknowledges receipt in trust from the Depositor as of the date hereof,
of the sum of one hundred dollars ($100), constituting the initial Trust
Property.
Section 2.05. DECLARATION OF TRUST. The Owner Trustee hereby declares
that it will hold the Trust Property in trust upon and subject to the conditions
set forth herein for the use and benefit of the Owners, subject to the
obligations of the Owner Trustee under the Trust Related Agreements. It is the
intention of the parties hereto that the Trust constitute a business trust under
Chapter 38 of Title 12 of the Delaware Code.
Section 2.06. OTHER EXPENSES, LIABILITIES OF TRUST. The Owners shall be
jointly and severally liable for any and all liabilities and obligations of the
Trust; provided, however, that the Owners shall have rights of contribution in
proportion to their respective Percentage Interests; and provided further, that
an Owner shall be liable only for liabilities and obligations of the Trust
incurred from the date such Owner became duly registered as an Owner in
accordance with Sections 3.02 and 3.04 and such Owner shall continue to be
liable for such liabilities and obligations after such Owner transfers its
Beneficial Interest pursuant to Article III hereof or otherwise is no longer an
Owner for the purposes of this Agreement. Within ten business days of receipt or
a statement delivered by the Owner Trustee to the effect that amounts necessary
to pay expenses or to meet any obligation of the Trust are not available in the
Trust Property, and setting forth the basis for such expenses and such Owner's
allocable share of such expenses, each Owner shall deliver to the Owner Trustee
immediately available funds in the amount or such Owner's allocable share of
such expenses.
Section 2.07. SITUS OF TRUST. The Trust will be located and
administered in the State of Delaware. The Trust shall not have any employees in
any state other than in the State of Delaware and payments will be received by
the Trust only in the State of Delaware and payments will be made by the Trust
only from the State of Delaware.
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ARTICLE III
TRUST CERTIFICATES AND TRANSFER OF INTEREST
Section 3.01. ISSUANCE OF TRUST CERTIFICATE.
(a) As of the date hereof, the Owner Trustee has issued and delivered
to the Depositor a Trust Certificate in the name of the Depositor evidencing
100% of the Beneficial Interest in the Trust.
(b) Each Trust Certificate shall be executed by manual signature on
behalf of the Owner Trustee by one of its Authorized Officers. Trust
Certificates bearing the manual signature of an individual who was, at the time
when such signature was affixed, authorized to sign on behalf of the Owner
Trustee shall bind the Trust, notwithstanding that such individual has ceased to
be so authorized prior to the delivery of such Trust Certificate or does not
hold such office at the date of such Trust Certificate. Each Trust Certificate
shall be dated the date of its issuance.
(c) On the Closing Date, the Owner Trustee is authorized to issue Trust
Certificates to each of the Persons set forth on Schedule A as Owners. Upon the
issuance of the first additional Trust Certificate, the Depositor shall be
deemed to have withdrawn as the initial Owner and to have contributed its Trust
Certificate to the Trust.
Section 3.02. REGISTRATION AND TRANSFER OF CERTIFICATES.
(a) The Owner Trustee shall maintain at its office referred to in
Section 2.02, or at the office of any agent appointed by it and approved in
writing by the Owners at the time of such appointment, a register for the
registration and Transfer of Trust Certificates. No Transfer of a Beneficial
Interest shall be made unless such Transfer is made pursuant to an effective
registration statement under the Securities Act of 1933, as amended (the "1933
Act"), and state securities laws, or is exempt from the registration
requirements under the 1933 Act and state securities laws.
(b) The registered Owner of any Trust Certificate may Transfer all or
any portion of the Beneficial Interest evidenced by such Trust Certificate upon
surrender thereof to the Owner Trustee accompanied by the documents required by
Section 3.04. Such Transfer may be made by the registered Owner in person or by
its attorney duly authorized in writing upon surrender of the Trust Certificate
to the Owner Trustee accompanied by a written instrument of Transfer and with
such signature guarantees and evidence of authority of the Persons signing the
instrument of Transfer as the Owner Trustee may reasonably require. Promptly
upon the receipt of such documents and receipt by the Owner Trustee of the
transferor's Trust Certificate, the Owner Trustee shall record the name of such
transferee as an Owner and its Percentage Interest
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in the Trust Certificate register and issue, execute and deliver to such Owner a
Trust Certificate evidencing such Percentage Interest. In the event a transferor
Transfers only a portion of its Beneficial Interest, the Owner Trustee shall
register and issue to such transferor a new Trust Certificate evidencing such
transferor's new Percentage Interest. Subsequent to a Transfer and upon the
issuance of the new Trust Certificate or Trust Certificates, the Owner Trustee
shall cancel and destroy the Trust Certificate surrendered to it in connection
with such Transfer. The Owner Trustee may treat the Person in whose name any
Trust Certificate is registered as the sole Owner of the Beneficial Interest in
the Trust evidenced by such Trust Certificate.
(c) As a condition precedent to any registration of Transfer, the Owner
Trustee may require the payment of a sum sufficient to cover the payment of any
tax or taxes or other governmental charges required to be paid in connection
with such Transfer and any other reasonable expenses connected therewith.
Section 3.03. LOST, STOLEN, MUTILATED OR DESTROYED CERTIFICATES. If (i)
any mutilated Trust Certificate is surrendered to the Owner Trustee, or (ii) the
Owner Trustee receives evidence to its satisfaction that any Trust Certificate
has been destroyed, lost or stolen, and upon proof of ownership satisfactory to
the Owner Trustee together with such security or indemnity as may be requested
by the Owner Trustee to save it harmless, the Owner Trustee shall execute and
deliver a new Trust Certificate for the same Percentage Interest as the Trust
Certificate so mutilated, destroyed, lost or stolen, of like tenor and bearing a
different issue number, with such notations, if any, as the Owner Trustee shall
determine. In connection with the issuance of any new Trust Certificate under
this Section 3.03, the Owner Trustee may require the payment by the registered
Owner thereof of a sum sufficient to cover any tax or other governmental charge
that may be imposed in relation thereto and any other expenses (including the
reasonable fees and expenses of the Owner Trustee) connected therewith. Any
replacement Trust Certificate issued pursuant to this Section 3.03 shall
constitute evidence of ownership of a Beneficial Interest, as if originally
issued, whether or not the lost, stolen or destroyed Trust Certificate shall be
found at any time.
Section 3.04. LIMITATION ON TRANSFER OF OWNERSHIP RIGHTS.
(a) No Transfer of all or any part of a Beneficial Interest shall be
made to any Person unless (i) such Person delivers to the Owner Trustee an
accession agreement substantially in the form of Exhibit 2 hereof, and (ii)
except for the initial transfer of the Beneficial Interest of the Depositor, the
Owner Trustee shall have received a written opinion of counsel in form and
substance satisfactory to the Owner Trustee stating that such Transfer is exempt
from the 1933 Act and any applicable state securities law.
(b) At any time that there is more than one Owner, no Transfer of a
Beneficial Interest shall be valid unless the Owner making such Transfer shall
have received the prior written consent to such Transfer of the Owners holding
at least 66 2/3% of both the Percentage
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Interests and the Sharing Ratios in the Trust at such time, which consent may be
unreasonably withheld; PROVIDED, HOWEVER, that in calculating the total
Beneficial Interests in the Trust there shall be excluded the Beneficial
Interest owned by the transferor or (unless the transferor and its Affiliates
are the only Owners) any Affiliate thereof.
(c) Except for the initial issuance of the Trust Certificates to the
Depositor, no Transfer shall be valid if, as a result of such Transfer, (i) any
Person would have an a Percentage Interest or a Sharing Ratio of 100%,
considering for such purpose all interests owned by any Affiliate of such Person
as owned by such Person, or (ii) such Transfer would result in a termination of
the Trust for Federal income tax purposes.
Section 3.05. ASSIGNMENT OF RIGHT TO DISTRIBUTIONS. An Owner may assign
all or any part of its right to receive distributions hereunder, but such
assignment (in the absence of a permitted Transfer) shall effect no change in
the ownership of the Trust.
ARTICLE IV
CONCERNING THE OWNERS
Section 4.01. ACTION BY OWNERS WITH RESPECT TO CERTAIN MATTERS.
(a) The Owner Trustee will take such action or refrain from taking such
action under this Agreement or any Trust Related Agreement as it shall be
directed pursuant to an express provision of this Agreement or such Trust
Related Agreement or, with respect to nonministerial matters, as it shall be
directed by all the Owners.
(b) Without limiting the generality of the foregoing, in connection
with the following nonministerial matters, the Owner Trustee will take no action
unless it receives written approval from all the Owners:
(i) the initiation of any claim or lawsuit by the Trust and
the compromise of any claim or lawsuit brought by or against the Trust;
(ii) the amendment, change or modification of this Agreement,
the Administration Agreement or any Trust Related Agreement;
(iii) the merger or consolidation of the Trust;
(iv) the adoption of a plan of liquidation; and
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(v) the filing of a voluntary petition in bankruptcy for the
Trust, which in no event shall the Owner Trustee be permitted to do or
be instructed to do until at least 366 days after the payment in full
of all Bonds issued by the Trust.
(c) No Owner shall take any action to cause the filing of an
involuntary petition in bankruptcy against the Trust.
Section 4.02. ACTION UPON INSTRUCTIONS.
(a) The Owner Trustee shall take such action or actions as may be
specified in this Agreement or in any instructions delivered in accordance with
this Article IV or Article VIII; provided, however, that the Owner Trustee shall
not be required to take any such action if it shall have reasonably determined,
or shall have been advised by counsel, that such action (i) is contrary to the
terms hereof or of any document contemplated hereby to which the Trust or the
Owner Trustee is a party or is otherwise contrary to law, (ii) is likely to
result in personal liability on the part of the Owner Trustee, unless the Owners
shall have provided to the Owner Trustee indemnification or security reasonably
satisfactory to the Owner Trustee against all costs, expenses and liabilities
arising from the Owner Trustee's taking such action, or (iii) would adversely
affect the status of the Trust as a partnership for Federal income tax purposes.
(b) No Owner shall direct the Owner Trustee to take or refrain from
taking any action contrary to this Agreement or any Trust Related Agreement, nor
shall the Owner Trustee be obligated to follow any such direction, if given.
(c) Notwithstanding anything contained herein or in any Trust Related
Agreement to the contrary, the Owner Trustee shall not be required to take any
action in any jurisdiction other than in the State of Delaware if the taking of
such action will (i) require the consent or approval or authorization or order
for the giving of notice to, or the registration with or taking of any action in
respect of, any state or other governmental authority or agency of any
jurisdiction other than the State of Delaware; (ii) result in any fee, tax or
other governmental charge under the laws of any jurisdiction or any political
subdivision thereof in existence on the date hereof other than the State of
Delaware becoming payable by the Owner Trustee; or (iii) subject the Owner
Trustee to personal jurisdiction in any jurisdiction other than the State of
Delaware for causes of action arising from acts unrelated to the consummation of
the transactions by the Owner Trustee contemplated hereby.
(d) The Owner Trustee shall not have the power to remove the
Administrator under the Administration Agreement or appoint a successor
Administrator pursuant to the Administration Agreement without written
instruction by the Owners.
Section 4.03. SUPER-MAJORITY CONTROL. Except as otherwise expressly
provided in this Agreement, any action which may be taken or consent or
instructions which may be given by
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the Owners under this Agreement may be taken by the Owners holding in the
aggregate at least 66 2/3% of both the Percentage Interests and the Sharing
Ratios in the Trust at the time of such action (the "Super-majority Owners").
Any written notice of the Owners delivered pursuant to this Agreement shall be
effective if signed by the Super-majority Owners at the time of the delivery of
such notice.
Section 4.04. REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR.
The Depositor hereby represents and warrants to the Owner Trustee as follows:
(a) Upon the receipt of the Trust Property by the Owner Trustee under
this Agreement, the Owner Trustee will have good title to the Trust Property
free and clear of any lien.
(b) The Trust is not, and will not be upon conveyance of the Trust
Property to the Owner Trustee, an "Investment Company" or under the "control" of
an "Investment Company," as such terms are defined in the Investment Company Act
of 1940, as amended.
(c) Except for the filing of the Certificate of Trust with the
Secretary of State, no consent, approval, authorization or order of, or filing
with, any court or regulatory, supervisory or governmental agency or body is
required under current law in connection with the execution, delivery or
performance by the Depositor of this Agreement or the consummation of the
transactions contemplated hereby; provided, however, that no representation or
warranty is made herein as to compliance with federal securities laws or the
securities or "blue sky" laws of any state.
(d) This Agreement has been duly and validly authorized, executed and
delivered by, and constitutes a valid and binding agreement of, the Depositor,
enforceable in accordance with its terms.
Section 4.05. LIABILITY OF THE OWNERS. The Owners shall be jointly
and severally liable for all obligations of the Trust.
Section 4.06. POWER OF ATTORNEY. (a) GENERAL. Each Owner hereby
irrevocably constitutes and appoints the Administrator, with full power of
substitution, such Owner's true and lawful attorney-in-fact, in such Owner's
name, place and stead, with full power to act jointly and severally, to make,
execute, sign, acknowledge, swear to verify, deliver, file, record and publish
the following documents:
(i) Any certificate, instrument or document to be filed
by the Owners under the laws of any state, or by any governmental
agency;
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(ii) Any certificate, instrument or document which may be
required to effect the continuation or the termination of the Trust,
including any amendments to the Agreement; provided such continuation
or termination is in accordance with the terms of this Agreement; and
(iii) Any written notice, instruction, instrument or document
under Article XII of this Agreement.
(b) DURATION OF POWER OF ATTORNEY. It is expressly intended by
each of the Owners that the Power of Attorney granted under this Section 4.06 is
coupled with an interest, and it is agreed that such Power of Attorney shall
survive (i) the dissolution, death or incompetency of the Owner and (ii) the
assignment by any Owner of the whole or any portion of such Owner's Beneficial
Interest.
ARTICLE V
INVESTMENT AND APPLICATION OF TRUST FUNDS
Section 5.01. INVESTMENT OF TRUST FUNDS. Unless otherwise directed in
writing by the Owners, income with respect to and proceeds of the Trust Property
which are received by the Owner Trustee more than one day prior to a
Distribution Date shall be invested and reinvested by the Owner Trustee in
Eligible Investments. Interest earned from such investment and reinvestment
shall be credited to the Trust Property.
Section 5.02. APPLICATION OF FUNDS.
Income with respect to and proceeds of Trust Property held by
the Owner Trustee on a Distribution Date shall be applied by the Owner Trustee
on such Distribution Date in the following order:
(i) FIRST, to pay any amounts due to the Owner Trustee
under this Agreement;
(i) SECOND, to pay any amounts due to the Administrator
under the Administration Agreement;
(iii) THIRD, to pay any amounts then due to any Person
under the Trust Related Agreements;
(iv) FOURTH, to pay any other expenses of the Trust; and
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(v) FIFTH, to the Owners in accordance with Section 7.06.
All payments to be made under this Agreement by the Owner Trustee shall be made
only from the income and proceeds of the Trust Property and only to the extent
that the Owner Trustee has received such income or proceeds.
ARTICLE VI
CAPITAL
Section 6.01. TAX CHARACTERIZATION. It is intended that the
Trust be characterized and treated as a partnership for federal income tax
purposes. All references to a "Partner," the "Partners" and to the "Partnership"
in this Agreement and in the provisions of the Code and Regulations cited in
this Agreement shall be deemed to refer to an Owner, the Owners and the Trust,
respectively.
Section 6.02. CAPITAL CONTRIBUTIONS OF OWNERS. The Depositor
shall make a Capital Contribution in the amount of one hundred dollars ($100)
upon execution of this Agreement. Upon their accession to the Trust Agreement as
Owners and the issuance of Trust Certificates to them in accordance with Section
3.01(c), the Owners will be deemed to have made initial Capital Contributions in
the amounts set forth on Schedule A attached hereto.
Section 6.03. CAPITAL ACCOUNTS. A capital account shall be
maintained for each Owner throughout the term of the Trust in accordance with
the rules of Regulation ss.1.704- 1(b)(2)(iv) as in effect from time to time,
and, to the extent not inconsistent therewith, to which the following provisions
apply:
(a) To each Owner's Capital Account there shall be credited
(i) the amount of money contributed by such Owner to the Trust
(including each Owner's share of any liabilities of the Trust assumed
by such Owner as provided in Regulation Section 1.704- 1(b)(2)(iv)(c)),
(ii) the fair market value of any property contributed to the Trust by
such Owner (net of liabilities secured by such contributed property
that the Trust is considered to assume or take subject to under Code
ss.752), and (iii) such Owner's share of Profit and items of income and
gain that are specially allocated pursuant to Section 7.03 and 7.04.
The initial Capital Contributions of each Owner are set forth on
Schedule A attached hereto.
(b) To each Owner's Capital Account there shall be debited (i)
the amount of money distributed to such Owner by the Trust (including
liabilities of such Owner assumed by the Trust as provided in
Regulation Section 1.704-1(b)(2)(iv)(c)) other than amounts that are in
repayment of debt obligations of the Trust to such Owner, (ii) the fair
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market value of property distributed to such Owner (net of liabilities
secured by such distributed property that such Owner is considered to
assume or take subject to), and (iii) such Owner's share of Loss and
items of loss or deduction that are specially allocated pursuant to
Sections 7.03 and 7.04.
(c) The Capital Account of a transferee Owner shall include
the appropriate portion of the Capital Account of the Owner from whom
the transferee Owner's interest was obtained.
(d) In determining the amount of any liability there shall be
taken into account Code Section 752(c) and any other applicable
provisions of the Code and Regulations.
The foregoing provisions and the other provisions of this Agreement relating to
the maintenance of Capital Accounts are intended to comply with Regulations
Section 1.704-1(b), and shall be interpreted and applied in a manner consistent
with such Regulations.
Section 6.04. INTEREST. No Owner shall be entitled to interest
on its Capital Contribution or on any Profit retained by the Trust.
Section 6.05. ADDITIONAL CAPITAL CONTRIBUTIONS. No Owner shall
make an additional Capital Contribution to the Trust, or receive a distribution
from the Trust, of property unless this Agreement shall have first been amended
to the extent necessary to comply with the requirements of Sections 704(b) and
(c) of the Code regarding the distributive shares of, and the allocation of
income, gain, loss, deduction and credit among, partners of a partnership.
Section 6.06. INVESTMENT OF CAPITAL CONTRIBUTIONS. The cash
Capital Contributions of the Owners shall be invested by the Owner Trustee in
accordance with Section 5.01.
Section 6.07. REPAYMENT AND RETURN OF CAPITAL CONTRIBUTIONS.
(a) The Owner Trustee shall have no personal liability for the
repayment of any Capital Contributions of the Owners.
(b) Following redemption or payment of the Bonds in full,
principal payments received by the Trust in a Fiscal Year on account of
the Student Loans, including prepayments of principal and amounts
recovered in liquidation of a Student Loan allocable to outstanding
principal thereof, shall be distributed to the Owners in proportion to
the positive balances in their respective Capital Accounts.
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ARTICLE VII
ALLOCATION OF PROFIT AND LOSS; DISTRIBUTIONS
Section 7.01. PROFIT. After giving effect to special
allocations set forth in Section 7.03, Profit for any Fiscal Year shall be
allocated in the following order and priority:
(a) OFFSET OF SECTION 7.02(C) ALLOCATION. Profit shall first
be allocated to the Owners in proportion to and to the extent of the
excess, if any, of (i) the cumulative Loss allocated to each Owner
pursuant to Section 7.02(b) for all prior Fiscal Years, over (ii) the
cumulative Profit allocated to each Owner pursuant to this Section
7.01(a) for all prior Fiscal Years;
(b) NET INTEREST INCOME ATTRIBUTABLE TO STUDENT LOANS AS TO
EACH OWNER. Net Interest Income Attributable to Student Loans as to
Each Owner shall be allocated as follows:
(i) First, to the extent that cumulative Loss resulting
from defaults on one or more Owner's Related Owner Notes
("Default Losses") have been allocated to other Owners (the
"Other Owners") pursuant to Section 7.02(a), to the Other
Owners to the extent of and in the same proportions as such
Default Losses were so allocated; and
(ii) Second, to such Owner.
(c) NET INTEREST INCOME ATTRIBUTABLE TO RESERVE ACCOUNTS AS TO
EACH OWNER. Net Interest Income Attributable to Reserve Accounts as to
Each Owner shall be allocated as follows:
(i) First, to the extent that the allocation under Section
7.01(b)(i) shall not have offset all allocations of Default
Losses to the Other Owners, to the Other Owners to the extent
of and in the same proportions as such Default Losses which
were not so offset were allocated; and
(ii) Second, to such Owner.
(d) OTHER PROFIT. All Profit for any Fiscal Year not allocated
pursuant to Section 7.01 (a), (b) and (c) shall be allocated as
follows:
(i) First, to the extent that the allocation under Section
7.01 (b)(i) and (c)(i) shall not have offset all allocations
of Default Losses to the Other Owners, to the
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Other Owners to the extent of and in the same proportion as
such Default Losses which were not so offset were allocated;
(ii) Second, all income resulting from recoveries on defaulted
Related Owner Notes shall be allocated to the Related Owner of
such Notes to the extent the Related Owner was previously
allocated Loss under Section 7.02(a) with respect to such
Related Owner Notes; and
(iii) Third, to the Owners in proportion to their Sharing
Ratios.
Section 7.02. LOSS. After giving effect to the special
allocations set forth in Section 7.03, Loss for any Fiscal Year shall be
allocated as set forth in Section 7.02(a) and (b), subject to the limitation in
Section 7.02(c).
(a) LOSS ATTRIBUTABLE TO NOTE DEFAULTS. To the extent of any
positive balance in such Owner's Capital Account, each Owner shall be
specially allocated all Default Losses for such Fiscal Year resulting
from defaults on such Owner's Related Owner Notes transferred to the
Trust. If the allocation of such Default Losses would be in excess of
the positive balance in such Owner's Capital Account, such excess shall
be allocated to the Other Owners to the extent of the respective
positive balance in each other Owner's Capital Account and in
proportion to each other Owner's initial Capital Contributions.
(b) OTHER LOSS. All Loss not allocated pursuant to Section
7.02(a) shall be allocated to the Owners in proportion to their Sharing
Ratios.
(c) EFFECT OF ADJUSTED CAPITAL ACCOUNT DEFICIT. The Loss
allocated pursuant to Section 7.02(a) and (b) shall not exceed the
maximum amount of Loss that can be so allocated without causing any
Owner to have an Adjusted Capital Account Deficit at the end of any
Fiscal Year. In the event some but not all of the Owners would have
Adjusted Capital Account Deficits as a consequence of an allocation of
Loss pursuant to Section 7.02(a) and (b), the limitation set forth in
this Section 7.02(c) shall be applied on a Owner by Owner basis so as
to allocate the maximum permissible Loss to the Owner under Section
1.704-1(b)(2)(ii)(d) of the Regulations.
Section 7.03. SPECIAL ALLOCATIONS.
(a) MINIMUM GAIN CHARGEBACK. Except as otherwise provided in
Section 1.704-2(f) of the Regulations, notwithstanding any other
provision of this Article VII, if there is a net decrease in
Partnership Minimum Gain during any Fiscal Year, each Owner shall be
specially allocated items of Trust income and gain for such Fiscal Year
(and, if necessary, subsequent Fiscal Years) in an amount equal to such
Owner's share
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of the net decrease in Partnership Minimum Gain, determined in
accordance with Regulations Section 1.704-2(g). Allocations pursuant to
the previous sentence shall be made in proportion to the respective
amounts required to be allocated to each Owner pursuant thereto. The
items to be so allocated shall be determined in accordance with
Sections 1.704-2(f)(6) and 1.704-2(j)(2) of the Regulations. This
Section 7.03(a) is intended to comply with the minimum gain chargeback
requirement in Section 1.704-2(f) of the Regulations and shall be
interpreted consistently therewith.
(b) OWNER MINIMUM GAIN CHARGEBACK. Except as otherwise
provided in Section 1.704-2(i)(4) of the Regulations, notwithstanding
any other provision of this Article VII, if there is a net decrease in
Partner Nonrecourse Debt Minimum Gain attributable to a Partner
Nonrecourse Debt during any Fiscal Year, each Owner who has a share of
the Partner Nonrecourse Debt Minimum Gain attributable to such Partner
Nonrecourse Debt, determined in accordance with Section 1.704-2(i)(5)
of the Regulations, shall be specially allocated items of Partnership
income and gain for such Fiscal Year (and, if necessary, subsequent
Fiscal Years) in an amount equal to such Partner's share of the net
decrease in Partner Nonrecourse Debt Minimum Gain attributable to such
Partner Nonrecourse Debt, determined in accordance with Regulations
Section 1.704-2(i)(4). Allocations pursuant to the previous sentence
shall be made in proportion to the respective amounts required to be
allocated to each Partner pursuant thereto. The items to be so
allocated shall be determined in accordance with Sections 1.704-2(i)(4)
and 1.704-2(j)(2) of the Regulations. This Section 7.03(b) is intended
to comply with the minimum gain chargeback requirement in Section
1.704- 2(i)(4) of the Regulations and shall be interpreted consistently
therewith.
(c) QUALIFIED INCOME OFFSET. In the event any Owner
unexpectedly receives any adjustments, allocations, or distributions
described in Section 1.704-1(b)(2)(ii)(d)(4), Section
1.704-1(b)(2)(ii)(d)(5), or Section 1.704-1(b)(2)(ii)(d)(6) of the
Regulations, items of Trust income and gain shall be specially
allocated to the Owner in an amount and manner sufficient to eliminate,
to the extent required by the Regulations, the Adjusted Capital Account
Deficit of the Owner as quickly as possible, provided that an
allocation pursuant to this Section 7.03(c) shall be made only if and
to the extent that the Owner would have an Adjusted Capital Account
Deficit after all other allocations provided for in this Article VII
have been tentatively made as if this Section 7.03(c) were not in this
Agreement.
(d) GROSS INCOME ALLOCATION. In the event any Owner has a
deficit Capital Account at the end of any Fiscal Year which is in
excess of the sum of the amount such Owner is deemed to be obligated to
restore pursuant to the penultimate sentences of Sections 1.704-2(g)(1)
and 1.704-2(i)(5) of the Regulations, each such Owner shall be
specially allocated items of Trust income and gain in the amount of
such excess as quickly as possible, provided that an allocation
pursuant to this Section 7.03(d) shall be
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made only if and to the extent that such Owner would have a deficit
Capital Account in excess of such sum after all other allocations
provided for in this Article VII have been made as if Section 7.03(c)
and this Section 7.03(d) were not in this Agreement.
(e) NONRECOURSE DEDUCTIONS. Nonrecourse Deductions for any
Fiscal Year shall be specially allocated among the Owners in proportion
to their Sharing Ratios.
(f) PARTNER NONRECOURSE DEDUCTIONS. Any Partner Nonrecourse
Deductions for any Fiscal Year shall be specially allocated to the
Owner who bears the economic risk of loss with respect to the Partner
Nonrecourse Debt to which such Partner Nonrecourse Deductions are
attributable in accordance with Regulations Section 1.704-2(i)(1).
(g) MANDATORY ALLOCATIONS UNDER CODE SECTION 704(C).
Notwithstanding the foregoing provisions of this Section 7.03, in the
event Code Section 704(c) or Code Section 704(c) principles applicable
under Section 1.704-1(b)(2)(iv) of the Regulations require allocations
of Profit or Loss in a manner different than that set forth above, the
provisions of Code Section 704(c) and the Regulations thereunder shall
control such allocations. Any item of Trust income, gain, loss and
deduction with respect to any property (other than cash) that has been
contributed by a Partner to the capital of the Trust or which has been
revalued for Capital Account purposes pursuant to Section
1.744-1(b)(2)(iv) of the Regulations and which is required to be
allocated to such Partner for income tax purposes under Code Section
704(c) so as to take into account the variation between the tax basis
of such property and its fair market value at the time of its
contribution shall be allocated solely for income tax purposes in the
manner required or permitted under Code Section 704(c) using the
"traditional method" described in Section 1.704-3(b) of the
Regulations, PROVIDED, HOWEVER, that curative allocations consisting of
the special allocation of gain or loss upon the sale or other
disposition of the contributed property shall be made in accordance
with Section 1.704-3(c) of the Regulations to the extent necessary to
eliminate any disparity, to the extent possible, between the Partners'
book and tax Capital Accounts attributable to such property; FURTHER
PROVIDED, HOWEVER, that any other method allowable under applicable
Regulations may be used for any contribution of property as to which
there is agreement between the contributing Partner and the
Administrator.
Section 7.04. CURATIVE ALLOCATIONS. The allocations set forth
in Section 7.03 (the "Regulatory Allocations") are intended to comply with
certain requirements of the Regulations. It is the intent of the Owners that, to
the extent possible, all Regulatory Allocations shall be offset either with
other Regulatory Allocations or with special allocations of other items of Trust
income, gain, loss, or deduction. Therefore, notwithstanding any other provision
of this Article VII (other than the Regulatory Allocations), offsetting special
allocations of Trust income, gain, loss, or deduction shall be made so that,
after such offsetting allocations are made, each Owner's Capital Account balance
is, to the extent possible, equal to the Capital Account balance such
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Owner would have had if the Regulatory Allocations were not part of the
Agreement and all Trust items were allocated pursuant to Sections 7.01 and 7.02.
In making such offsetting allocations, there shall be taken into account future
Regulatory Allocations under Sections 7.03(a) and (b) that, although not yet
made, are likely to offset other Regulatory Allocations previously made under
Sections 7.03(e) and (f).
Section 7.05. OTHER ALLOCATION RULES.
(a) For purposes of determining the Profit, Loss, or any other
items allocable to any period, Profit, Loss, and any such other items shall be
determined on a daily, monthly, or other basis, as determined by the Owner
Trustee, under the direction of the Super-majority Owners, using any method
permissible under Code Section 706 and the Regulations thereunder.
(b) The Owners are aware of the income tax consequences of the
allocations made by this Article VII and hereby agree to be bound by the
provisions of this Article VII in reporting their shares of Trust income and
loss for income tax purposes.
(c) Solely for purposes of determining a Owner's proportionate
share of the "excess nonrecourse liabilities" of the Trust within the meaning of
Section 1.752-3(a)(3) of the Regulations, the Owner's interests in Trust profits
are in proportion to their Sharing Ratios.
(d) To the extent permitted by Section 1.704-2(h)(3) of the
Regulations, the Owner Trustee shall endeavor to treat distributions of Net Cash
Flow as having been made from the proceeds of a Nonrecourse Liability or a
Partner Nonrecourse Debt only to the extent that such distributions would cause
or increase an Adjusted Capital Account Deficit for any Limited Partner.
Section 7.06. DISTRIBUTION OF NET CASH FLOW. Except to the
extent prohibited by any agreement to which the Partnership is a party or is
otherwise bound, Net Cash Flow on each Distribution Date shall be distributed on
such Distribution Date to the Owners in the same manner as Profit is allocated
under this Article VII, less Default Loss. All payments to be made under this
Agreement by the Owner Trustee shall be made only from the income and proceeds
of the Trust Property and only to the extent the Owner Trustee has received such
income or proceeds.
Section 7.07. DISTRIBUTION STATEMENT. With each distribution
to an Owner pursuant to Section 7.06, the Owner Trustee shall deliver a
Distribution Date Statement setting forth, for the period since the preceding
Distribution Date:
(i) income and proceeds received by the Owner Trustee with
respect to the Trust Property;
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(ii) amounts paid to the Owner Trustee;
(iii) amounts paid to any Person pursuant to a Trust
Related Agreement; and
(iv) amounts paid for other expenses of the Trust.
Section 7.08. ALLOCATION OF TAX LIABILITY. In the event that
any tax is imposed on the Trust, such tax shall be charged against amounts
otherwise distributable to the Owners in proportion to their respective Sharing
Ratios. The Owner Trustee is hereby authorized to retain from amounts otherwise
distributable to the Owners sufficient funds to pay or provide for the payment
of, and then actually pay, such tax as is legally owed by the Trust (but such
authorization shall not prevent the Owner Trustee from contesting any such tax
in appropriate proceedings, and withholding payment of such tax, if permitted by
law, pending the outcome of such proceedings).
Section 7.09. METHOD OF PAYMENT. All amounts payable to an
Owner pursuant to this Agreement shall be paid by the Owner Trustee to such
Owner or a nominee therefor by check payable to such Owner, mailed first class
to the address of such Owner appearing on the register maintained pursuant to
Section 3.02, or by crediting the amount to be distributed to such Owner to an
account maintained by such Owner with the Owner Trustee or by transferring such
amount by wire transfer in immediately available funds to a banking institution
with bank wire transfer facilities for the account of such Owner, as instructed
in writing from time to time by such Owner. The Owner Trustee may require an
Owner to pay any wire transfer fees incurred in connection with any wire
transfer made to such Owner.
Section 7.10. NO SEGREGATION OF FUNDS; NO INTEREST. Subject to
Section 2.03(b)(ii) and Section 5.01, funds received by the Owner Trustee
hereunder need not be segregated in any manner except to the extent required by
law and may be deposited under such general conditions as may be prescribed by
law, and the Owner Trustee shall not be liable for any interest thereon.
Section 7.11. INTERPRETATION AND APPLICATION OF PROVISIONS BY
THE ADMINISTRATOR. The Owner Trustee shall appoint and authorize the
Administrator to interpret and apply the provisions set forth in this Article
VII regarding allocations of Profit and Loss and Distributions of Net Cash Flow,
to resolve any ambiguities that may result from such application and to provide
the Owner Trustee and the Owners with clarification of any provision as may be
necessary or appropriate. The determinations of the Administrator shall be
binding upon the Owners.
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ARTICLE VIII
AUTHORITY AND DUTIES OF THE OWNER TRUSTEE
Section 8.01. GENERAL AUTHORITY. The Owner Trustee is
authorized to take all actions required or permitted to be taken by it pursuant
to the terms of this Agreement and the Trust Related Agreements. The Owner
Trustee is further authorized from time to time to take such action as the
Administrator directs with respect to the Trust Related Agreements.
Section 8.02. SPECIFIC AUTHORITY. The Owner Trustee is
hereby authorized and directed to take the following actions:
(a) execute the Certificate of Trust substantially in the form of
Exhibit 3 hereto; and
(b) execute and deliver on behalf of the Trust, the Trust Related
Agreements, including without limitation, the Trust Certificates and any other
document contemplated by the foregoing; in each case, in such form as the
Administrator shall approve, as evidenced conclusively by the Owner Trustee's
execution thereof.
Section 8.03. GENERAL DUTIES. It shall be the duty of the
Owner Trustee to discharge (or cause to be discharged) all of its
responsibilities pursuant to the terms of this Agreement and to administer the
Trust in the interest of the Owners. Notwithstanding the foregoing, the Owner
Trustee shall have deemed to have discharged its duties and responsibilities
hereunder under the Trust Related Agreements to the extent the Administrator has
agreed in the Administration Agreement to perform such acts or to discharge such
duties of the Owner Trustee hereunder or under any Trust Related Agreement, and
the Owner Trustee shall not be held liable for the default or failure of the
Administrator to carry out its obligations under the Administration Agreement.
Section 8.04. ACCOUNTING AND REPORTS TO THE OWNERS, THE
INTERNAL REVENUE SERVICE AND OTHERS. The Owner Trustee shall (i) maintain or
cause to be maintained the books of the Trust on a calendar year basis on the
accrual method of accounting, (ii) deliver to each Owner, within 60 days of the
end of each Fiscal Year, or more often, as may be required by the Code and the
regulations thereunder, a copy of the annual financial statement of the Trust
for such Fiscal Year and a statement in such form and containing such
information as may be required by such regulations, and as is necessary and
appropriate to enable each Owner to prepare its federal and state income tax
returns, (iii) file such tax returns relating to the Trust, and make such
elections, including an election for the first taxable year of the Trust,
necessary for the Trust to qualify as a partnership, or as may from time to time
be required under any applicable state or federal statute or rule or regulation
thereunder, (iv) cause such tax returns to be signed in the manner required by
law, (v) collect or cause to be collected any withholding tax required by the
Code to be withheld by the Owner Trustee with respect to distributions to
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Owners who are nonresident aliens or foreign corporations, and (vi) cause to be
mailed to each Owner copies of all such reports and tax returns of the Trust.
Section 8.05. SIGNATURE OF RETURNS. The Owner Trustee shall
sign on behalf of the Trust the tax returns and other Periodic Filings of the
Trust, unless applicable law requires an Owner to sign such documents, in which
case, so long as the Depositor is an Owner and applicable law allows the
Depositor to sign any such document, the Depositor shall sign such document. At
any time that the Depositor is not an Owner, or is otherwise not allowed by law
to sign any such document, then the Owner required by law to sign such document
shall sign.
Section 8.06. RIGHT TO RECEIVE AND RELY UPON INSTRUCTIONS. In
the event that the Owner Trustee is unable to decide between alternative courses
of action, or is unsure as to the application of any provision of this Agreement
or any Trust Related Agreement, or such provision is ambiguous as to its
application, or is or appears to be, in conflict with any other applicable
provision, or in the event that this Agreement or any Trust Related Agreement
permits any determination by the Owner Trustee or is silent or is incomplete as
to the course of action which the Owner Trustee is required to take with respect
to a particular set of facts, the Owner Trustee may give notice (in such form as
shall be appropriate under the circumstances) to the Owners requesting
instructions and, to the extent that the Owner Trustee shall have acted or
refrained from acting in good faith in accordance with any instructions received
from the Owners, the Owner Trustee shall not be liable on account of such action
or inaction to any Person. If the Owner Trustee shall not have received
appropriate instructions within ten days of such notice (or within such shorter
period of time as may be specified in such notice) the Owner Trustee may, but
shall be under no duty to, take or refrain from taking such action, not
inconsistent with this Agreement or the Trust Related Agreements, as the Owner
Trustee shall deem to be in the best interests of the Owners, and the Owner
Trustee shall have no liability to any Person for such action or inaction.
Section 8.07. NO DUTIES EXCEPT AS SPECIFIED IN THIS AGREEMENT
OR IN INSTRUCTIONS. The Owner Trustee shall not have any duty or obligation to
manage, make any payment in respect of, register, record, sell, dispose of or
otherwise deal with the Trust Property, or to otherwise take or refrain from
taking any action under, or in connection with, any document contemplated hereby
to which the Owner Trustee is a party, except as expressly provided by the terms
of this Agreement and no implied duties or obligations shall be read into this
Agreement against the Owner Trustee. The Owner Trustee nevertheless agrees that
it will, at its own cost and expense, promptly take all action as may be
necessary to discharge any liens on any part of the Trust Property which result
from claims against the Owner Trustee personally that are not related to the
ownership or the administration of the Trust Property or the transactions
contemplated by the Trust Related Agreements.
Section 8.08. NO ACTION EXCEPT UNDER SPECIFIED DOCUMENTS OR
INSTRUCTIONS. The Owner Trustee shall not manage, control, use, sell, dispose of
or otherwise deal with any part
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of the Trust Property except (i) in accordance with the powers granted to and
the authority conferred upon the Owner Trustee pursuant to this Agreement, and
(ii) in accordance with instructions delivered to the Owner Trustee pursuant to
Section 8.06 and Article IV hereof.
Section 8.09. RESTRICTION. Notwithstanding anything herein to
the contrary, the Owner Trustee shall not take any action (a) that is
inconsistent with the purposes of the Trust or (b) that would result in the
Trust being treated as an association taxable as a corporation for Federal
income tax purposes.
ARTICLE IX
CONCERNING THE OWNER TRUSTEE
Section 9.01. ACCEPTANCE OF TRUSTS AND DUTIES. The Owner
Trustee accepts the trusts hereby created and agrees to perform its duties
hereunder with respect to the same but only upon the terms of this Agreement.
The Owner Trustee shall not be personally liable under any circumstances, except
(i) for its own willful misconduct or gross negligence, (ii) for liabilities
arising from the failure by the Owner Trustee to perform obligations expressly
undertaken by it in the last sentence of Section 8.07, or (iii) for taxes, fees
or other charges on, based on or measured by any fees, commissions or
compensation received by the Owner Trustee in connection with any of the
transactions contemplated by this Agreement or the Trust Related Agreements. In
particular, but not by way of limitation:
(a) The Owner Trustee shall not be personally liable for any error of
judgment made in good faith by an Authorized Officer of the Owner Trustee;
(b) The Owner Trustee shall not be personally liable with respect to
any action taken or omitted to be taken by the Owner Trustee in good faith in
accordance with the instructions of the Administrator or the Owners;
(c) No provision of this Agreement shall require the Owner Trustee to
expend or risk its personal funds or otherwise incur any financial liability in
the performance of any of its rights or powers hereunder, if the Owner Trustee
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured or
provided to it;
(d) Under no circumstance shall the Owner Trustee be personally liable
for any indebtedness of the Trust under any Trust Related Agreement;
(e) The Owner Trustee shall not be personally responsible for or in
respect of the validity or sufficiency of this Agreement or for the due
execution hereof by the Depositor, or
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for the form, character, genuineness, sufficiency, value or validity of any
Student Loan, or for or in respect of the validity or sufficiency of the
Administration Agreement or the Trust Related Agreements; and
(f) The Owner Trustee shall not be liable for the default or misconduct
of the Administrator under any of the Trust Related Agreements or otherwise and
the Owner Trustee shall have no obligation or liability to perform the
obligations of the Issuer hereunder or under any Trust Related Agreement that
are required to be performed by the Administrator under the Administration
Agreement.
Section 9.02. FURNISHING OF DOCUMENTS. The Owner Trustee shall
furnish to the Owners, promptly upon receipt thereof, duplicates or copies of
all material reports, notices, requests, demands, certificates, financial
statements and any other instruments furnished to the Owner Trustee hereunder
(other than documents originated by or otherwise furnished to such Owners).
Section 9.03. RELIANCE; ADVICE OF COUNSEL.
(a) The Owner Trustee shall incur no liability to anyone in acting upon
any signature, instrument, notice, resolution, request, consent, order,
certificate, report, opinion, bond or other document or paper believed by it to
be genuine and believed by it to be signed by the proper party or parties. The
Owner Trustee may accept a certified copy of a resolution of the board of
directors or other governing body of any corporate party as conclusive evidence
that such resolution has been duly adopted by such body and that the same is in
full force and effect. As to any fact or matter the manner of ascertainment of
which is not specifically prescribed herein, the Owner Trustee may for all
purposes hereof rely on a certificate, signed by the president or any vice
president or by the treasurer or any assistant treasurer or the secretary of the
relevant party, as to such fact or matter, and such certificate shall constitute
full protection to the Owner Trustee for any action taken or omitted to be taken
by it in good faith in reliance thereon.
(b) In the exercise or administration of the trusts hereunder and in
the performance of its duties and obligations under any of the Trust Related
Agreements, the Owner Trustee (i) may act directly or, at the expense of the
Trust, through agents or attorneys pursuant to agreements entered into with any
of them, and the Owner Trustee shall not be liable for the default or misconduct
of such agents or attorneys if such agents or attorneys shall have been selected
by the Owner Trustee with reasonable care; and (ii) may, at the expense of the
Trust, consult with counsel, accountants and other skilled persons to be
selected with reasonable care and employed by it, and the Owner Trustee shall
not be liable for anything done, suffered or omitted in good faith by it in
accordance with the advice or opinion of any such counsel, accountants or other
skilled persons.
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Section 9.04. NOT ACTING IN INDIVIDUAL CAPACITY. Except as
expressly provided in this Article IX, in accepting the trusts hereby created
the Owner Trustee acts solely as trustee hereunder and not in its individual
capacity, and all Persons having any claim against the Owner Trustee by reason
of the transactions contemplated by this Agreement or the Trust Related
Agreements shall look only to the Trust Property for payment or satisfaction
thereof.
ARTICLE X
COMPENSATION OF OWNER TRUSTEE
Section 10.01. OWNER TRUSTEE'S FEES AND EXPENSES. The Owner
Trustee shall receive compensation from the Trust Property for its services
hereunder as set forth on the fee schedule attached hereto as Exhibit 4. The
Owner Trustee shall be entitled to be reimbursed for its reasonable expenses
hereunder, including, without limitation, the reasonable compensation, expenses
and disbursements of such agents, representatives, experts and counsel as the
Owner Trustee may employ in connection with the exercise and performance of its
rights and duties under this Agreement and the Trust Related Agreements.
Section 10.02. INDEMNIFICATION. The Owners shall be jointly
and severally liable for, and hereby agree to indemnify Delaware Trust Capital
Management, Inc., individually and as Owner Trustee and its successors, assigns,
agents and servants, from and against, any and all liabilities, obligations,
losses, damages, taxes (other than taxes incurred as the result of the payment
of fees and expenses pursuant to Section 10.01), claims, actions, suits, costs,
expenses and disbursements (including legal fees and expenses) of any kind and
nature whatsoever which may be imposed on, incurred by or asserted at any time
against the Owner Trustee (whether or not indemnified against by other parties)
in any way relating to or arising out of this Agreement, any Trust Related
Agreement, the administration of the Trust Property or the action or inaction of
the Owner Trustee hereunder, except only that the Owners shall not be required
to indemnify the Owner Trustee for expenses arising or resulting from any of the
matters described in the second sentence of Section 9.01. The indemnities
contained in this Section 10.02 shall survive the termination of this Agreement.
The obligations of the Owners pursuant to this Section 10.02 shall be borne in
proportion to their respective Percentage Interests. The indemnities contained
in this Section 10.02 extend only to the Owner Trustee in its individual
capacity.
Section 10.03. LIEN ON TRUST PROPERTY. The Owner Trustee shall
have a lien on the Trust Property for any compensation or expenses and indemnity
due hereunder which lien shall be prior to all other liens.
Section 10.04. PAYMENTS TO THE OWNER TRUSTEE. Any amounts paid
to the Owner Trustee from the Trust Property pursuant to this Article X shall be
deemed not to be part of the Trust Property immediately after such payment.
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ARTICLE XI
TERMINATION OF TRUST
Section 11.01. TERMINATION OF TRUST.
(a) The trust created hereby shall terminate and, except as otherwise
provided in this Article XI, this Agreement shall be of no further force or
effect, upon the earlier of (i) the unanimous consent of the Owners, (ii) the
sale or other final disposition by the Owner Trustee of the Trust Property and
the final distribution by the Owner Trustee of all funds or other property or
proceeds of the Trust Property in accordance with the terms of this Agreement
and the Trust Related Agreements, and (iii) 21 years less one day after the
death of the survivor of the descendants living on the date of this Agreement of
Joseph P. Kennedy, the late Ambassador of the United States to the Court of St.
James.
(b) The bankruptcy, death, incapacity, dissolution or termination of
any Owner shall not operate to dissolve or terminate this Agreement, nor entitle
such Owner's legal representatives or heirs to claim an accounting or to take
any action or proceeding in any court for a partition or winding up of the Trust
Property, nor otherwise affect the rights, obligations and liabilities of the
parties hereto.
(c) Upon the termination of the Trust pursuant to this Article XI, the
Owner Trustee shall cause a Certificate of Termination to be filed with the
Secretary of State of the State of Delaware.
Section 11.02. DISTRIBUTION OF ASSETS. Upon termination of the
Trust, the Owner Trustee shall take full account of the Trust assets and
liabilities, shall liquidate the assets as promptly as is consistent with
obtaining the fair value thereof, and shall apply and distribute the proceeds
therefrom in the following order:
(a) To the payment of the expenses of liquidation and the
debts and liabilities of the Trust;
(b) To the setting up of reserves which the Owner Trustee may
deem necessary or appropriate for anticipated obligations or
contingencies of the Trust arising out of or in connection with the
operation of the Trust. Such reserves may be paid over by the Owner
Trustee to an escrow agent or trustee selected by the Owner Trustee to
be disbursed by such escrow agent or trustee in payment of any of such
obligations or contingencies and, if any balance remains at the
expiration of such period as the Owner Trustee shall deem advisable, to
be distributed by such escrow agent or trustee in the manner
hereinafter provided;
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(c) To the Owners in accordance with the positive balances in
their respective Capital Accounts.
If at the time of liquidation the Owner Trustee shall determine that an
immediate sale of some or all of the Assets would cause undue loss to the
Owners, the Owner Trustee may, in order to avoid such loss and with the consent
of the Owners, defer liquidation.
Section 11.03. NO TERMINATION BY DEPOSITOR OR OWNERS. Except
as provided in Section 11.01, neither the Depositor nor the Owners shall be
entitled to terminate or revoke the Trust established hereunder.
ARTICLE XII
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES
Section 12.01. RESIGNATION OF OWNER TRUSTEE; APPOINTMENT OF
SUCCESSOR.
(a) The Owner Trustee may resign at any time without cause by
giving at least 60 days' prior written notice to the Administrator and the
Owners, such resignation to be effective upon the acceptance of appointment by a
successor Owner Trustee under Section 12.01(b). In addition, the Super-majority
Owners may at any time remove the Owner Trustee without cause by an instrument
in writing delivered to the Owner Trustee and the Administrator, such removal to
be effective upon the acceptance of appointment by a successor Owner Trustee
under Section 12.01(b). In case of the resignation or removal of the Owner
Trustee, the Owners may appoint a successor Owner Trustee by an instrument
signed by the Owners. If a successor Owner Trustee shall not have been appointed
within 30 days after the giving of written notice of such resignation or the
delivery of the written instrument with respect to such removal, the Owner
Trustee or the Owners may apply to any court of competent jurisdiction to
appoint a successor Owner Trustee to act until such time, if any, as a successor
Owner Trustee shall have been appointed as provided above. Any successor Owner
Trustee so appointed by such court shall immediately and without further act be
superseded by any successor Owner Trustee appointed as above provided within one
year from the date of the appointment by such court.
(b) Any successor Owner Trustee, however appointed, shall execute and
deliver to the predecessor Owner Trustee an instrument accepting such
appointment, and thereupon such successor Owner Trustee, without further act,
shall become vested with all the estates, properties, rights, powers, duties and
trust of the predecessor Owner Trustee in the trusts hereunder with like effect
as if originally named the Owner Trustee herein; but nevertheless, upon the
written request of such successor Owner Trustee, such predecessor Owner Trustee
shall execute and deliver an instrument transferring to such successor Owner
Trustee, upon the trusts
<PAGE>
-32-
herein expressed, all the estates, properties, rights, powers, duties and trusts
of such predecessor Owner Trustee, and such predecessor Owner Trustee shall duly
assign, transfer, deliver and pay over to such successor Owner Trustee all funds
or other property then held or subsequently received by such predecessor Owner
Trustee upon the trusts herein expressed.
(c) Any successor Owner Trustee, however appointed, shall be a bank or
trust company that meets the requirements of Section 3(a)(7) of the Investment
Company Act of 1940, as amended, and whose parent entity has a combined capital
and surplus of as least $50,000,000, if there be such an institution willing,
able and legally qualified to perform the duties of the Owner Trustee hereunder
upon reasonable or customary terms.
(d) Any corporation into which the Owner Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Owner Trustee shall be
a party, or any corporation to which substantially all the corporate trust
business of the Owner Trustee may be transferred, shall, subject to the terms of
Section 12.01(c), be the Owner Trustee under this Agreement without further act.
Section 12.02. APPOINTMENT OF ADDITIONAL OWNER TRUSTEES. At any time or
times for the purpose of meeting any legal requirements of any jurisdiction in
which any part of the Trust Property may at the time be located, the Owner
Trustee and the Administrator, acting jointly, by an instrument in writing, may
appoint one or more individuals or corporations approved by the Administrator
and the Owner Trustee to act as separate trustee or separate trustees of all or
any part of the Trust Property to the full extent that local law makes it
necessary or appropriate for such separate trustee or separate trustees to act
alone. If the Administrator shall not have joined in such appointment within
fifteen days after the receipt of such request, the Owner Trustee, acting alone,
shall have the power to make such appointment.
ARTICLE XIII
TAX MATTERS PARTNER
Section 13.01. TAX MATTERS PARTNER. The tax matters partner
(within the meaning of section 6231(a)(7) of the Code and applicable Treasury
Regulations) of the Trust for all federal income tax purposes set forth in the
Code shall be the Owner that would be treated as the tax matters partner
pursuant to section 6231(a)(7)(B) of the Code. Subject to Section 13.08, the tax
matters partner shall have the authority to represent the Trust and perform the
duties imposed on the tax matters partner under the Code, and as set forth in
this Article XIII.
<PAGE>
-33-
Section 13.02. NOTICE OF TAX AUDIT. The tax matters partner
shall give prompt notice to the Owners upon receipt of advice that the Internal
Revenue Service intends to examine Trust income tax returns for any year.
Section 13.03. AUTHORITY TO EXTEND PERIOD FOR ASSESSING TAX.
Subject to Section 13.08, the tax matters partner shall have the authority to
extend the period for assessing any tax imposed on any Owner under the Code by
any agreement as provided for under Section 6229(b)(1)(B) of the Code.
Section 13.04. CHOICE OF FORUM FOR FILING PETITION FOR
READJUSTMENT. Any petition for readjustment may, but is not required to, be
filed by the tax matters partner in accordance with Section 6226(a) of the Code
in the United States District Court for the district in which the Trust's
principal place of business is located, or the United States Claims Court.
Section 13.05. AUTHORITY TO BIND OWNERS BY SETTLEMENT
AGREEMENT. Subject to Section 13.08, the tax matters partner shall enter into a
settlement agreement in accordance with Section 6224(c)(3) of the Code as
directed by the Owners.
Section 13.06. NOTICES SENT TO THE INTERNAL REVENUE SERVICE.
The tax matters partner shall use its best efforts to furnish to the Internal
Revenue Service the name, address, profits interest and taxpayer identification
number of each Owner and any additional information it receives from each Owner
regarding any change in that Owner's name, address, profits interest and
taxpayer identification number. In no event shall the tax matters partner be
liable, responsible or accountable in damages or otherwise to the Owner for any
loss in connection with furnishing such information to the Internal Revenue
Service if the tax matters partner acts in good faith and is not guilty of fraud
or gross negligence.
Section 13.07. INDEMNIFICATION OF TAX MATTERS PARTNER. The
Trust shall indemnify and save harmless the tax matters partner against any
loss, damage, cost or expense (including attorneys' fees) incurred by it as a
result of any act performed or omitted on behalf of the Trust or any Owner or in
furtherance of the Trust's interests or the interests of the Owner, in its
capacity as tax matters partner, without, however, relieving the tax matters
partner of liability for bad faith, fraud or gross negligence.
Section 13.08. APPROVAL OF TAX MATTERS PARTNER'S DECISIONS.
The tax matters partner shall call a meeting of the Owners at any time in order
to discuss any decisions the tax matters partner may propose to make, notice of
which shall be included in the notice of such meeting. The tax matters partner
shall make no decision and take no action with respect to the determination,
assessment or collection of any tax imposed by the Code on the Owners unless and
until such decision has been approved by the Owners.
<PAGE>
-34-
Section 13.09. PARTICIPATION BY OWNERS IN INTERNAL REVENUE
SERVICE ADMINISTRATIVE PROCEEDINGS. Nothing contained in this Article XIII shall
be construed to take away from any Owner any right granted to such person by the
Code to participate in any manner in administrative proceedings of the Internal
Revenue Service.
ARTICLE XIV
MISCELLANEOUS
Section 14.01. SUPPLEMENTS AND AMENDMENTS. This Agreement may
be amended only by a written instrument signed by the Owner Trustee and all of
the Owners at the time of such amendment; provided, however, that if, in the
opinion of the Owner Trustee, any instrument required to be so executed
adversely affects any right, duty or liability of, or immunity or indemnity in
favor of, the Owner Trustee under this Agreement or any of the documents
contemplated hereby to which the Owner Trustee is a party, or would cause or
result in any conflict with or breach of any terms, conditions or provisions of,
or default under, the charter documents or by-laws of the Owner Trustee or any
document contemplated hereby to which the Owner Trustee is a party, the Owner
Trustee may in its sole discretion decline to execute such instrument.
Section 14.02. NO LEGAL TITLE TO TRUST PROPERTY IN OWNER. The
Owners shall not have legal title to any part of the Trust Property and shall
only have an undivided beneficial interest therein. No transfer, by operation of
law or otherwise, of any right, title and interest of the Owners in and to their
undivided Beneficial Interests in the Trust Property hereunder shall operate to
terminate this Agreement or the trusts hereunder or entitle any successor
transferee to an accounting or to the transfer to it of legal title to any part
of the Trust Property.
Section 14.03. PLEDGE OF COLLATERAL BY OWNER TRUSTEE IS
BINDING. The pledge of any Trust Property to any Person by the Owner Trustee
made under any Trust Related Agreement and pursuant to the terms of this
Agreement shall bind the Owners and shall be effective to transfer or convey the
rights of the Owner Trustee and the Owners in and to such Trust Property to the
extent set forth in such Trust Related Agreement. No purchaser or other grantee
shall be required to inquire as to the authorization, necessity, expediency or
regularity of such pledge or as to the application of any proceeds with respect
thereto by the Owner Trustee.
Section 14.04. LIMITATIONS ON RIGHTS OF OTHERS. Nothing in
this Agreement, whether express or implied, shall be construed to give to any
Person other than the Owner Trustee, the Administrator and the Owners any legal
or equitable right, remedy or claim in the Trust Property or under or in respect
of this Agreement or any covenants, conditions or provisions contained herein.
<PAGE>
-35-
Section 14.05. NOTICES. Unless otherwise expressly specified
or permitted by the terms hereof, all notices shall be in writing and delivered
by hand or mailed by certified mail, postage prepaid, if to the Owner Trustee,
addressed to: Delaware Trust Capital Management, Inc., 900 Market Street,
Wilmington, Delaware 19801, Attention: Corporate Trust Administration, or to
such other address as the Owner Trustee may have set forth in a written notice
to the Owners; and if to an Owner, addressed to it at the address set forth for
such Owner in the register maintained by the Owner Trustee. Whenever any notice
in writing is required to be given by the Owner Trustee hereunder, such notice
shall be deemed given and such requirement satisfied 72 hours after such notice
is mailed by certified mail, postage prepaid, addressed as provided above; any
notice given by an Owner to the Owner Trustee shall be effective upon receipt by
an Authorized Officer of the Owner Trustee. A copy of any notice delivered to
the Owner Trustee shall also be delivered to the Administrator, addressed to:
First Marblehead Data Services Inc., 277 Park Avenue, New York, New York 10017.
Section 14.06. SEVERABILITY. Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
Section 14.07. SEPARATE COUNTERPARTS. This Agreement may be
executed by the parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all such counterparts shall
together constitute but one and the same instrument.
Section 14.08. SUCCESSORS AND ASSIGNS. All covenants and
agreements contained herein shall be binding upon, and inure to the benefit of,
the Owner Trustee and its successors and assigns and each Owner and its
successors and permitted assigns, all as herein provided. Any request, notice,
direction, consent, waiver or other instrument or action by an Owner shall bind
the successors and assigns of such Owner.
Section 14.09. HEADINGS. The headings of the various
Articles and Sections herein are for convenience of reference only and shall not
define or limit any of the terms or provisions hereof.
Section 14.10. GOVERNING LAW. This Agreement shall in all
respects be governed by, and construed in accordance with, the laws of the State
of Delaware (excluding conflict of law rules), including all matters of
construction, validity and performance.
Section 14.11. GENERAL INTERPRETIVE PRINCIPLES. For purposes
of this Agreement except as otherwise expressly provided or unless the context
otherwise requires:
<PAGE>
-36-
(a) the defined terms in this Agreement include the
plural as well as the singular, and the use of any gender herein shall be deemed
to include any other gender;
(b) accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles as in effect on the date hereof;
(c) references herein to "Articles", "Sections", "paragraphs",
and other subdivisions without reference to a document are to designated
Articles, Sections, paragraphs and other subdivisions of this Agreement;
(d) a reference to a paragraph without further reference to a
Section is a reference to such paragraph as contained in the same Section in
which the reference appears, and this rule shall also apply to subparagraphs and
other subdivisions;
(e) the words "herein", "hereof", "hereunder" and other words
of similar import refer to this Agreement as a whole and not to any particular
provision; and
(f) the term "include" or "including" shall mean without
limitation by reason of enumeration.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement
to be duly executed by their respective officers hereunto duly authorized, as of
the day and year first above written.
DELAWARE TRUST CAPITAL MANAGEMENT, INC.,
not in its individual capacity except as
expressly provided herein, but solely as
Owner Trustee
By:_____________________________________
Name: Richard N. Smith
Title: Vice President
THE NATIONAL COLLEGIATE TRUST, as
Depositor and Owner
By: Delaware Trust Capital Management,
Inc., not in its individual capacity
but solely as Owner Trustee
By:_____________________________________
Name: Richard N. Smith
Title: Vice President
ACKNOWLEDGED WITH RESPECT
TO THE POWER OF ATTORNEY
GRANTED IN SECTION 4.06
FIRST MARBLEHEAD DATA SERVICES INC.
By:_____________________________________
Name:
Title:
<PAGE>
SCHEDULE A
Initial Allocable Initial Allocable Capital
Owners Bonds Student Loans Contribution
------ ----- ------------- ------------
<PAGE>
EXHIBIT 1
FORM OF TRUST CERTIFICATE
THE NATIONAL COLLEGIATE TRUST 1997-S1
TRUST CERTIFICATE
THE BENEFICIAL INTEREST IN THE TRUST REPRESENTED BY THIS TRUST
CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAW, AND MAY NOT BE
DIRECTLY OR INDIRECTLY OFFERED OR SOLD OR OTHERWISE DISPOSED OF
(INCLUDING PLEDGED) BY THE HOLDER HEREOF UNLESS IN THE OPINION OF
COUNSEL SATISFACTORY TO THE OWNER TRUSTEE, SUCH TRANSACTION IS EXEMPT
FROM REGISTRATION UNDER THE ACT AND STATE SECURITIES LAWS. THE TRANSFER
OF THIS TRUST CERTIFICATE WILL NOT BE EFFECTIVE UNLESS THE TRANSFEREE
HAS DELIVERED TO THE OWNER TRUSTEE A LETTER IN THE FORM REQUIRED BY
SECTION 3.04(A) OF THE TRUST AGREEMENT AND THE TRANSFEREE PROVIDES THE
OWNER TRUSTEE WITH EVIDENCE SATISFACTORY TO THE OWNER TRUSTEE
DEMONSTRATING THE TRANSFEROR'S COMPLIANCE WITH SECTION 3.04(B) OF THE
TRUST AGREEMENT.
TRUST CERTIFICATE
UNDER TRUST AGREEMENT, DATED
AS OF FEBRUARY 26, 1997
Certificate No. 1
Delaware Trust Capital Management, Inc., not in its individual
capacity, but solely as owner trustee (the "Owner Trustee") under a Trust
Agreement, dated as of February 26, 1997, with The National Collegiate Trust
(the "Depositor"), on behalf of the holders from time to time (each an "Owner")
of beneficial interests in the trust created thereby (the "Trust Agreement"),
hereby certifies that _________________ is the owner of a ___% undivided
beneficial interest in the Trust Property provided for and created by the Trust
Agreement. This Trust Certificate is issued pursuant to and is entitled to the
benefits of the Trust Agreement, and each Owner by acceptance hereof shall be
bound by the terms of the Trust Agreement. Reference is hereby made to the Trust
Agreement for a statement of the rights and obligations of the Owner hereof. The
Owner Trustee may treat the person shown on the register maintained by the Owner
Trustee pursuant to Section 3.02 of the Trust Agreement as the absolute Owner
hereof for all purposes.
<PAGE>
2
Capitalized terms used herein without definition have the meanings
ascribed to them in or by reference in the Trust Agreement.
Transfer of this Trust Certificate is subject to certain restrictions
and limitations set forth in the Trust Agreement, including the requirement that
any transfer requires the prior consent of owners of at least 66 2/3% of the
Percentage Interests in the Trust. In the manner more fully set forth in, and as
limited by, the Trust Agreement, this Trust Certificate may be transferred upon
the books of the Owner Trustee by the registered Owner in person or by his
attorney duly authorized in writing upon surrender of this Trust Certificate to
the Owner Trustee accompanied by a written instrument of transfer and with such
signature guarantees and evidence of authority of the Persons signing the
instrument of transfer as the Owner Trustee may reasonably require, whereupon
the Owner Trustee shall issue in the name of the transferee a Trust Certificate
or Trust Certificates evidencing the amount and extent of interest of the
transferee.
The Owner hereof, by its acceptance of this Trust Certificate, warrants
and represents to the Owner Trustee and to the Owners of the other Trust
Certificates issued under the Trust Agreement and agrees (a) that it is jointly
and severally liable for all fees, expenses, taxes, indemnity payments and other
charges of the Trust pursuant to the Trust Agreement, (b) not to transfer this
Trust Certificate except in accordance with the Trust Agreement.
This Trust Certificate and the Trust Agreement shall in all respects be
governed by, and construed in accordance with, the laws of the State of Delaware
(excluding conflict of law rules).
<PAGE>
3
IN WITNESS WHEREOF, the Owner Trustee, pursuant to the Trust Agreement,
has caused this Trust Certificate to be issued as of the date hereof.
DELAWARE TRUST CAPITAL MANAGEMENT, INC.,
not in its individual capacity, but
solely as Owner Trustee
By:_____________________________________
Name:___________________________________
Title:__________________________________
Dated: , 1997
<PAGE>
EXHIBIT 2
FORM OF ACCESSION AGREEMENT
__________________, 1997
Delaware Trust Capital Management, Inc.
900 Market Street
Wilmington, Delaware 19801
Attention: Corporate Trust Administration
Dear Sirs:
We refer to the Trust Agreement, dated as of February 26, 1997 (the
"Trust Agreement"), between The National Collegiate Trust (the "Company"), and
Delaware Trust Capital Management, Inc., a Delaware trust company (in its
capacity as trustee thereunder, the "Owner Trustee"). We propose to purchase a
beneficial interest in The National Collegiate Trust 1997-S1, a Delaware trust
(the "Trust") formed pursuant to the Trust Agreement. Capitalized terms used
herein without definition have the meanings given them in the Trust Agreement.
1. We hereby agree, as provided and to the extent specified in Section
2.06 of the Trust Agreement, to be jointly and severally liable with any other
holders of Trust Certificates with respect to the Trust for all fees, expenses,
taxes, indemnity payments and other liabilities of the Trust in accordance with
the terms of the Trust Agreement, including (except as otherwise provided in the
Trust Agreement) those incurred by Delaware Trust Capital Management, Inc. in
its capacity as Owner Trustee in the administration of the Trust thereunder, to
the extent such fees, expenses, taxes, indemnity payments and other liabilities
of the Trust or the Owner Trustee, as the case may be, with respect to the
Trust, are not paid out of the Trust Property; provided, however, that we will
be liable only for obligations of the Trust arising on and after the date
hereof.
2. We understand that our Trust Certificate is not being registered
under the Securities Act of 1933, as amended (the "1933 Act"), or any state
securities or "Blue Sky" law and is being sold to us in a transaction that is
exempt from the registration requirements of the 1933 Act and any applicable
state laws.
3. We have knowledge and experience in financial and business matters
as to be capable of evaluating the merits and risks of an investment in the
Trust, we are able to bear the economic risk of investment in the Trust and we
are an "accredited investor" as defined in Regulation D under the 1933 Act.
<PAGE>
2
4. We acknowledge that none of the Trust, the Company or the Owner
Trustee has advised us concerning the federal or state income tax consequences
of owning beneficial interest in the Trust, including the tax status of the
Trust or the likelihood that distributions from the Trust would be characterized
as "unrelated business income" for federal tax purposes, and we have consulted
with our own tax advisor with respect to such matters.
5. We are acquiring our Trust Certificate for our own account and not
for the benefit of any other person and not with a view to any distribution of
our beneficial interest in the Trust subject, nevertheless, to the understanding
that disposition of our property shall at all times be and remain within our
control.
6. We agree that our beneficial interest in the Trust must be held
indefinitely by us unless subsequently registered under the 1933 Act and any
applicable state securities or "Blue Sky" law or unless exemptions from the
registration requirements of the 1933 Act and applicable state laws are
available.
7. We agree that in the event that at some future time we wish to
dispose of or exchange any of our beneficial interest in the Trust, we will not
transfer or exchange any of our beneficial interest in the Trust unless we have
obtained the prior written consent to such transfer or exchange pursuant to
Section 3.04 of the Trust Agreement, and either:
(A)(1) the transfer or exchange is made to an Eligible
Purchaser (as defined below), (2) a letter to substantially the same
effect as this letter is executed promptly by such Eligible Purchaser
and (3) all offers or solicitations in connection with the sale (if a
sale), whether made directly or through any agent acting on our behalf,
are limited only to Eligible Purchasers and are not made by means of
any form of general solicitation or general advertising whatsoever; or
(B) our beneficial interest in the Trust is sold in a
transaction that does not require registration under the 1933 Act and
any applicable State "Blue Sky" law.
"Eligible Purchaser" means a corporation, partnership or other entity
which we have reasonable grounds to believe and do believe can make
representations with respect to itself to substantially the same effect as the
representations set forth herein.
8. We understand that our Trust Certificate bears a legend to
substantially the following effect:
THE BENEFICIAL INTEREST IN THE TRUST REPRESENTED BY THIS TRUST
CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAW, AND MAY NOT BE
DIRECTLY OR INDIRECTLY
<PAGE>
3
OFFERED OR SOLD OR OTHERWISE DISPOSED OF (INCLUDING PLEDGED) BY THE
HOLDER HEREOF UNLESS IN THE OPINION OF COUNSEL SATISFACTORY TO THE
OWNER TRUSTEE SUCH TRANSACTION IS EXEMPT FROM REGISTRATION UNDER THE
ACT AND STATE SECURITIES LAWS. THE TRANSFER OF THIS TRUST CERTIFICATE
WILL NOT BE EFFECTIVE UNLESS THE TRANSFEREE HAS DELIVERED TO THE OWNER
TRUSTEE A LETTER IN THE FORM REQUIRED BY SECTION 3.04(A) OF THE TRUST
AGREEMENT AND THE TRANSFEREE PROVIDES THE OWNER TRUSTEE WITH EVIDENCE
SATISFACTORY TO THE OWNER TRUSTEE DEMONSTRATING THE TRANSFEROR'S
COMPLIANCE WITH SECTION 3.04(B) OF THE TRUST AGREEMENT.
9. We agree to be bound by all the terms and conditions of our Trust
Certificate and the Trust Agreement.
Very truly yours,
[Name of Purchaser]
By:_____________________________________
Name: __________________________________
Title:__________________________________
Accepted and Acknowledged this ____ day of ____________, 1997.
DELAWARE TRUST CAPITAL MANAGEMENT, INC., not in its
individual capacity, but solely as Owner Trustee
By:__________________________________
Name:________________________________
Title:_______________________________
<PAGE>
EXHIBIT 3
CERTIFICATE OF TRUST
OF
THE NATIONAL COLLEGIATE TRUST 1997-S1
THE UNDERSIGNED, Delaware Trust Capital Management, Inc., as trustee,
for the purpose of forming a business trust does hereby certify as follows:
1. The name of the business trust is:
THE NATIONAL COLLEGIATE TRUST 1997-S1
2. The name and business address of the trustee of the business trust
in the State of Delaware is Delaware Trust Capital Management, Inc., 900 Market
Street, Wilmington, Delaware 19801.
3. The business trust reserves the right to amend, alter, change, or
repeal any provision contained in this Certificate of Trust in the manner now or
hereafter prescribed by law.
4. This Certificate of Trust shall be effective upon filing.
THE UNDERSIGNED, being the trustee hereinbefore named, for the purpose
of forming a business trust pursuant to the provisions of the Delaware Business
Trust Act, does make this certificate of trust, hereby declaring and further
certifying that this is its act and deed and that to the best of the
undersigned's knowledge and belief the facts herein stated are true.
DELAWARE TRUST CAPITAL
MANAGEMENT, INC.,
as trustee
By:__________________________________
Name: Richard N. Smith
Title: Vice President
================================================================================
THE NATIONAL COLLEGIATE TRUST 1997-S1
a trust acting through Delaware Trust Capital Management, Inc.,
not in its individual capacity but solely
as Owner Trustee
and
STATE STREET BANK AND TRUST COMPANY,
Trustee
---------------------------------------
INDENTURE
Dated as of April 1, 1997
---------------------------------------
GATESM RECEIVABLE ASSET-BACKED DEBT SECURITIES (GRADSSM)
7.45% CLASS A COLLATERALIZED STUDENT LOAN BONDS
8.25% CLASS B COLLATERALIZED STUDENT LOAN BONDS
Series 1997-S1
================================================================================
<PAGE>
INDENTURE DATED AS OF APRIL 1, 1997
BETWEEN THE NATIONAL COLLEGIATE TRUST 1997-S1
AS ISSUER AND STATE STREET BANK AND TRUST COMPANY AS TRUSTEE
Cross-reference sheet showing the location in the Indenture of the
provisions inserted pursuant to Sections 310 through 318(a) inclusive of the
Trust Indenture Act of 1939.
TIA INDENTURE SECTION
- --- -----------------
Section 310 (a)(1).................................................7.08
(a)(2).................................................7.09
(a)(3).................................................7.14
(a)(4).......................................Not Applicable
(a)(5).................................................7.08
(b)....................................................7.08
.......................................................7.10
......................................................14.05
(c)..........................................Not Applicable
Section 311 (a)....................................................7.13
(b)....................................................7.13
(c)..........................................Not Applicable
Section 312 (a)....................................................8.01
....................................................8.02(a)
(b).................................................8.02(b)
(c).................................................8.02(c)
Section 313 (a).................................................8.03(a)
(b).................................................8.03(a)
(c)....................................................8.03
......................................................14.05
(d).................................................8.03(b)
Section 314 (a)....................................................8.04
......................................................14.05
(b)(1)........................................2.04(c)(viii)
....................................................9.05(a)
(b)(2)..............................................9.05(b)
(c)(1)..............................................2.04(e)
......................................................14.01
.......................................................5.01
(c)(2)................................................14.01
.......................................................2.04
.......................................................5.01
(c)(3).......................................Not Applicable
(d)(1)..............................................8.03(a)
....................................................4.04(b)
(d)(2)..............................................2.04(f)
(d)(3)..............................................2.04(f)
(e)...................................................13.01
<PAGE>
(f)..........................................Not Applicable
Section 315 (a).................................................7.01(a)
.................................................7.01(c)(1)
(b)....................................................7.02
......................................................14.05
(c).................................................7.01(b)
(d).................................................7.01(c)
(e)....................................................6.14
Section 316 (a)(1)(a)..............................................6.12
.......................................................3.01
(a)(1)(B)..............................................6.02
.......................................................6.13
(a)(2).......................................Not Applicable
(b)....................................................6.19
(c)....................................................1.01
......................................................12.02
Section 317(a)(1) .......................................................6.03
.......................................................6.06
(a)(2).................................................6.05
(b)....................................................7.06
Section 318 (a)...................................................14.06
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS................................................. 1
SECTION 1.01 GENERAL DEFINITIONS.................................................................. 1
-------------------
<S> <C>
Accountants..................................................................................................... 1
Act" and "Act of Bondholders.................................................................................... 1
Administrator................................................................................................... 1
Administration Agreement........................................................................................ 1
Affiliate....................................................................................................... 1
Agent ....................................................................................................... 1
Aggregate Current Principal Amount.............................................................................. 1
Authorized Officer.............................................................................................. 1
Available Payment Amount........................................................................................ 2
BANA ....................................................................................................... 2
Bondholder" or "Holder.......................................................................................... 2
Bond Interest Rate.............................................................................................. 2
"Bond Owner".................................................................................................... 2
Bond Register" and "Bond Registrar.............................................................................. 2
Bonds ....................................................................................................... 2
"Book-Entry Bonds".............................................................................................. 2
Business Day.................................................................................................... 2
Class ....................................................................................................... 2
Class A Bonds................................................................................................... 2
Class B Bonds................................................................................................... 3
Closing Date.................................................................................................... 3
Code ....................................................................................................... 3
Collateral...................................................................................................... 3
Collateral Proceeds............................................................................................. 3
Collateral Proceeds Account..................................................................................... 3
Collection Period............................................................................................... 3
Commission...................................................................................................... 3
Corporate Trust Office.......................................................................................... 3
Costs of Issuance............................................................................................... 3
Cost of Issuance Account........................................................................................ 3
Cost of Issuance Amount......................................................................................... 3
Current Principal Amount........................................................................................ 3
Custodial Agreement............................................................................................. 4
Default ....................................................................................................... 4
Defaulted Student Loan.......................................................................................... 4
Definitive Bonds................................................................................................ 4
Depository"..................................................................................................... 4
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Depository Notice Date"......................................................................................... 4
"Depository Participants"....................................................................................... 4
"DTC Letter Agreement".......................................................................................... 4
Due Date ....................................................................................................... 4
Eligible Investments............................................................................................ 4
Event of Default................................................................................................ 6
FNBB ....................................................................................................... 6
Full Prepayment................................................................................................. 6
Grant ....................................................................................................... 6
Indenture....................................................................................................... 6
Independent..................................................................................................... 6
Individual Bond................................................................................................. 7
Interest Accrual Period......................................................................................... 7
Interest Payment Date........................................................................................... 7
Interest Reserve Amount......................................................................................... 7
Interest Support Account........................................................................................ 7
Interest Support Payment........................................................................................ 7
Interest Support Period......................................................................................... 7
Issuer ....................................................................................................... 7
Issuer Order" or "Issuer Request................................................................................ 7
Issuer Redemption............................................................................................... 7
Liquidation Proceeds............................................................................................ 7
Loan Documents.................................................................................................. 8
Net Loans Withdrawn............................................................................................. 8
Note Rate....................................................................................................... 8
Officers' Certificate........................................................................................... 8
Opinion of Counsel.............................................................................................. 8
Origination Agreement........................................................................................... 8
Outstanding..................................................................................................... 8
Owner Participant............................................................................................... 9
Owner Trustee................................................................................................... 9
Partial Prepayment.............................................................................................. 9
Paying Agent.................................................................................................... 9
Payment Date.................................................................................................... 9
Payment Date Statement.......................................................................................... 9
Person ....................................................................................................... 9
Pledged Account or Fund......................................................................................... 9
Predecessor Bonds............................................................................................... 10
Prepayment...................................................................................................... 10
Principal Payment Date.......................................................................................... 10
Proceeding...................................................................................................... 10
Promisor ....................................................................................................... 10
Rating Agency................................................................................................... 10
Record Date..................................................................................................... 10
Redemption Date................................................................................................. 10
Redemption Price................................................................................................ 10
Reserve Fund.................................................................................................... 10
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Responsible Officer............................................................................................. 10
Sale ....................................................................................................... 10
Schedule of Student Loans....................................................................................... 11
Servicer ....................................................................................................... 11
Servicer Determination Date..................................................................................... 11
Servicer Remittance............................................................................................. 11
Servicer Remittance Report...................................................................................... 11
Servicing Agreement............................................................................................. 11
Servicing Fee................................................................................................... 11
Stated Maturity................................................................................................. 11
Stated Principal Balance........................................................................................ 11
Student Loan.................................................................................................... 11
Student Loan Collateral......................................................................................... 12
Student Loan Note............................................................................................... 12
Trust Agreement................................................................................................. 12
Trust Company................................................................................................... 12
Trust Estate.................................................................................................... 12
Trust Indenture Act" or "TIA.................................................................................... 12
Trustee ....................................................................................................... 12
</TABLE>
<TABLE>
<CAPTION>
ARTICLE II
THE BONDS.................................................. 13
<S> <C> <C>
SECTION 2.01 FORMS GENERALLY...................................................................... 13
SECTION 2.02 FORMS OF BONDS....................................................................... 13
SECTION 2.03 GENERAL PROVISIONS WITH RESPECT TO PRINCIPAL AND INTEREST PAYMENTS;
DENOMINATIONS........................................................................ 13
SECTION 2.04 EXECUTION, AUTHENTICATION, DELIVERY AND DATING....................................... 15
SECTION 2.05 REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.................................. 17
SECTION 2.06 MUTILATED, DESTROYED, LOST OR STOLEN BONDS........................................... 19
SECTION 2.07 PERSONS DEEMED OWNERS................................................................ 19
SECTION 2.08 CANCELLATION......................................................................... 20
SECTION 2.09 BOOK-ENTRY BONDS..................................................................... 20
</TABLE>
<TABLE>
<CAPTION>
ARTICLE III
PAYMENTS ON THE BONDS............................................ 22
<S> <C> <C>
SECTION 3.01 COLLECTION OF MONEY.................................................................. 22
SECTION 3.02 PAYMENTS OF PRINCIPAL AND INTEREST................................................... 22
SECTION 3.03 COLLATERAL PROCEEDS ACCOUNT; APPLICATION OF FUNDS.................................... 24
SECTION 3.04 GENERAL PROVISIONS REGARDING PLEDGED ACCOUNTS OR FUNDS............................... 26
SECTION 3.05 REPORTS BY TRUSTEE TO BONDHOLDERS.................................................... 28
SECTION 3.06 PLEDGED ACCOUNTS REPORTS BY TRUSTEE.................................................. 29
SECTION 3.07 COLLECTIONS OF THE STUDENT LOANS..................................................... 30
SECTION 3.08 AMENDMENTS TO SERVICING AGREEMENT.................................................... 30
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
SECTION 3.09 RESERVE FUND......................................................................... 30
SECTION 3.10 INTEREST SUPPORT ACCOUNT............................................................. 31
SECTION 3.11 COST OF ISSUANCE ACCOUNT............................................................. 32
</TABLE>
<TABLE>
<CAPTION>
ARTICLE IV
SECURITY FOR THE BONDS............................................ 33
<S> <C> <C>
SECTION 4.01 GRANT OF TRUST ESTATE................................................................ 33
SECTION 4.02 DOCUMENTS DELIVERED TO TRUSTEE....................................................... 34
SECTION 4.03 ACCEPTANCE BY TRUSTEE................................................................ 34
SECTION 4.04 LIMITED WITHDRAWAL AND SUBSTITUTION OF COLLATERAL.................................... 34
SECTION 4.05 RELEASE OF TRUST ESTATE.............................................................. 35
SECTION 4.06 OPINION OF COUNSEL................................................................... 36
</TABLE>
<TABLE>
<CAPTION>
ARTICLE V.................................................. 37
<S> <C> <C>
SECTION 5.01 SATISFACTION AND DISCHARGE OF INDENTURE.............................................. 37
SECTION 5.02 APPLICATION OF TRUST MONEY........................................................... 38
SECTION 5.03 TRUSTEE'S AUTHORITY; RELEASE OF PREPAID STUDENT LOANS................................ 38
</TABLE>
<TABLE>
<CAPTION>
ARTICLE VI
DEFAULTS AND REMEDIES............................................ 39
<S> <C> <C>
SECTION 6.01 EVENT OF DEFAULT..................................................................... 39
SECTION 6.02 ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT................................... 40
SECTION 6.03 REMEDIES............................................................................. 41
SECTION 6.04 PRESERVATION OF TRUST ESTATE......................................................... 41
SECTION 6.05 TRUSTEE MAY FILE PROOFS OF CLAIM..................................................... 41
SECTION 6.06 TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF BONDS............................... 42
SECTION 6.07 APPLICATION OF MONEY COLLECTED....................................................... 43
SECTION 6.08 LIMITATION ON SUITS.................................................................. 43
SECTION 6.09 RESTORATION OF RIGHTS AND REMEDIES................................................... 44
SECTION 6.10 RIGHTS AND REMEDIES CUMULATIVE....................................................... 44
SECTION 6.11 DELAY OR OMISSION NOT WAIVER......................................................... 44
SECTION 6.12 CONTROL BY BONDHOLDERS............................................................... 45
SECTION 6.13 WAIVER OF PAST DEFAULTS.............................................................. 45
SECTION 6.14 UNDERTAKING FOR COSTS................................................................ 45
SECTION 6.15 WAIVER OF STAY OR EXTENSION LAWS..................................................... 46
SECTION 6.16 SALE OF TRUST ESTATE................................................................. 46
SECTION 6.17 ACTION ON BONDS...................................................................... 47
SECTION 6.18 NO RECOURSE TO ISSUER................................................................ 47
SECTION 6.19 UNCONDITIONAL RIGHTS OF BONDHOLDERS TO RECEIVE PRINCIPAL AND
INTEREST............................................................................. 47
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ARTICLE VII
THE TRUSTEE................................................. 48
<S> <C> <C>
SECTION 7.01 DUTIES OF TRUSTEE.................................................................... 48
SECTION 7.02 NOTICE OF DEFAULT.................................................................... 49
SECTION 7.03 CERTAIN RIGHTS OF TRUSTEE............................................................ 49
SECTION 7.04 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF BONDS.................................... 50
SECTION 7.05 MAY HOLD BONDS....................................................................... 50
SECTION 7.06 MONEY HELD IN TRUST.................................................................. 50
SECTION 7.07 COMPENSATION AND REIMBURSEMENT....................................................... 50
SECTION 7.08 ELIGIBILITY; DISQUALIFICATION........................................................ 51
SECTION 7.09 TRUSTEE'S CAPITAL AND SURPLUS........................................................ 51
SECTION 7.10 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.................................... 52
SECTION 7.11 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR............................................... 53
SECTION 7.12 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS OF
TRUSTEE.............................................................................. 53
SECTION 7.13 PREFERENTIAL COLLECTION OF CLAIMS AGAINST ISSUER..................................... 54
SECTION 7.14 CO-TRUSTEES AND SEPARATE TRUSTEES.................................................... 54
</TABLE>
<TABLE>
<CAPTION>
ARTICLE VIII
BONDHOLDERS' LIST AND REPORTS........................................ 56
<S> <C> <C>
SECTION 8.01 ISSUER TO FURNISH TRUSTEE NAMES AND ADDRESSES OF BONDHOLDERS......................... 56
SECTION 8.02 PRESERVATION OF INFORMATION; COMMUNICATIONS TO BONDHOLDERS........................... 56
SECTION 8.03 REPORTS BY TRUSTEE................................................................... 56
SECTION 8.04 REPORTS BY ISSUER.................................................................... 57
</TABLE>
<TABLE>
<CAPTION>
ARTICLE IX
COVENANTS OF ISSUER............................................. 58
<S> <C> <C>
SECTION 9.01 MAINTENANCE OF OFFICE OR AGENCY...................................................... 58
SECTION 9.02 MONEY FOR BOND PAYMENTS TO BE HELD IN TRUST.......................................... 58
SECTION 9.03 ISSUER'S EXISTENCE................................................................... 59
SECTION 9.04 PROTECTION OF TRUST ESTATE........................................................... 59
SECTION 9.05 PERFORMANCE OF OBLIGATIONS........................................................... 60
SECTION 9.06 NEGATIVE COVENANTS................................................................... 60
SECTION 9.07 SERVICER'S ANNUAL STATEMENT AS TO COMPLIANCE......................................... 61
SECTION 9.08 CORPORATE EXISTENCE OF OWNER TRUSTEE................................................. 61
SECTION 9.09 NO OTHER BUSINESS.................................................................... 62
SECTION 9.10 NO BORROWING......................................................................... 62
SECTION 9.11 OBLIGATIONS OF THE SERVICER.......................................................... 62
SECTION 9.12 SERVICER'S EVIDENCE AS TO COMPLIANCE................................................. 62
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ARTICLE X
SUPPLEMENTAL INDENTURES; AMENDMENTS
TO OTHER DOCUMENTS.............................................. 63
<S> <C> <C>
SECTION 10.01 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF BONDHOLDERS............................... 63
SECTION 10.02 SUPPLEMENTAL INDENTURES WITH CONSENT OF BONDHOLDERS.................................. 64
SECTION 10.03 EXECUTION OF SUPPLEMENTAL INDENTURES................................................. 66
SECTION 10.04 EFFECT OF SUPPLEMENTAL INDENTURES.................................................... 66
SECTION 10.05 CONFORMITY WITH TRUST INDENTURE ACT.................................................. 66
SECTION 10.06 REFERENCE IN BONDS TO SUPPLEMENTAL INDENTURES........................................ 66
</TABLE>
<TABLE>
<CAPTION>
ARTICLE XI
REDEMPTION OF BONDS............................................. 67
<S> <C> <C>
SECTION 11.01 REDEMPTION AT THE OPTION OF THE ISSUER; ELECTION TO REDEEM........................... 67
SECTION 11.02 NOTICE TO TRUSTEE.................................................................... 67
SECTION 11.03 NOTICE OF ISSUER REDEMPTION.......................................................... 67
SECTION 11.04 DEPOSIT OF REDEMPTION PRICE.......................................................... 68
SECTION 11.05 BONDS PAYABLE ON REDEMPTION DATE..................................................... 68
</TABLE>
<TABLE>
<CAPTION>
ARTICLE XII
BONDHOLDERS' MEETING............................................. 70
<S> <C> <C>
SECTION 12.01 PURPOSES FOR WHICH MEETINGS MAY BE CALLED............................................ 70
SECTION 12.02 MANNER OF CALLING MEETINGS........................................................... 70
SECTION 12.03 CALL OF MEETING BY ISSUER OR BONDHOLDERS............................................. 70
SECTION 12.04 WHO MAY ATTEND AND VOTE AT MEETINGS.................................................. 71
SECTION 12.05 REGULATIONS MAY BE MADE BY TRUSTEE................................................... 71
SECTION 12.06 MANNER OF VOTING AT MEETINGS AND RECORDS TO BE KEPT.................................. 72
SECTION 12.07 EXERCISE OF RIGHTS OF TRUSTEE AND BONDHOLDERS NOT TO BE HINDERED
OR DELAYED........................................................................... 72
</TABLE>
<TABLE>
<CAPTION>
ARTICLE XIII
MISCELLANEOUS................................................ 73
<S> <C> <C>
SECTION 13.01 COMPLIANCE CERTIFICATES AND OPINIONS................................................. 73
SECTION 13.02 FORM OF DOCUMENTS DELIVERED TO TRUSTEE............................................... 73
SECTION 13.03 ACTS OF BONDHOLDERS.................................................................. 74
SECTION 13.04 NOTICES.............................................................................. 75
SECTION 13.05 NOTICES AND REPORTS TO BONDHOLDERS; WAIVER OF NOTICES................................ 75
SECTION 13.06 CONFLICT WITH TRUST INDENTURE ACT.................................................... 76
SECTION 13.07 EFFECT OF HEADINGS AND TABLE OF CONTENTS............................................. 76
SECTION 13.08 SUCCESSORS AND ASSIGNS............................................................... 76
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
SECTION 13.09 SEPARABILITY......................................................................... 76
SECTION 13.10 BENEFITS OF INDENTURE................................................................ 76
SECTION 13.11 LEGAL HOLIDAYS....................................................................... 77
SECTION 13.12 GOVERNING LAW........................................................................ 77
SECTION 13.13 COUNTERPARTS......................................................................... 77
SECTION 13.14 TRUST OBLIGATION..................................................................... 77
SECTION 13.15 AUTHORITY OF THE ADMINISTRATOR....................................................... 77
</TABLE>
<PAGE>
EXHIBIT A-1 Form of Class A Bonds
EXHIBIT A-2 Form of Class B Bonds
EXHIBIT B Servicing Agreement
EXHIBIT C Custodial Agreement
EXHIBIT D Administration Agreement
EXHIBIT E DTC Letter Agreement
SCHEDULE I Schedule of Student Loans
SCHEDULE II Calculation of Servicing Fee
<PAGE>
INDENTURE, dated as of April 1, 1997, between THE NATIONAL COLLEGIATE
TRUST 1997-S1 (the "Issuer"), a trust created pursuant to the Trust Agreement
and acting through DELAWARE TRUST CAPITAL MANAGEMENT, INC., not in its
individual capacity but solely as Owner Trustee under the Trust Agreement and
STATE STREET BANK AND TRUST COMPANY, a Massachusetts trust company (the
"Trustee").
PRELIMINARY STATEMENT
The Issuer has duly authorized the execution and delivery of this
Indenture to provide for the issuance of the Bonds hereunder. All covenants and
agreements made by the Issuer herein are for the benefit and security of the
Bondholders and the Trustee. The Issuer is entering into this Indenture, and the
Trustee is accepting the trusts created hereby, for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged.
All things necessary to make this Indenture a valid agreement of the
Issuer in accordance with its terms have been done.
<PAGE>
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ARTICLE I
DEFINITIONS
SECTION 1.01 GENERAL DEFINITIONS.
Except as otherwise specified or as the context may otherwise require,
the following terms have the meanings set forth below for all purposes of this
Indenture, and the definitions of such terms are applicable to the singular as
well as to the plural forms of such terms and to the masculine as well as to the
feminine and neuter genders of such terms.
"ACCOUNTANTS": A firm of independent certified public accountants of
national reputation, which may be the firm of independent accountants that
audits the financial statements of the Issuer.
"ACT" AND "ACT OF BONDHOLDERS": The meanings specified in Section
13.03.
"ADMINISTRATOR": First Marblehead Data Services Inc. or its successor
under the Administration Agreement.
"ADMINISTRATION AGREEMENT": The Administration Agreement, dated as of
April 1, 1997, among the Issuer, the Trustee and the Administrator, a copy of
which is attached hereto as Exhibit D.
"AFFILIATE": 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.
"AGENT": Any Bond Registrar or Paying Agent.
"AGGREGATE CURRENT PRINCIPAL AMOUNT": The aggregate of the Current
Principal Amounts of all Bonds Outstanding at the time of determination.
"AUTHORIZED OFFICER": With respect to the Issuer, any officer of the
Owner Trustee who is authorized to act for the Owner Trustee in matters relating
to the Issuer and, so long as the Administration Agreement is in effect, any
officer of the Administrator who is authorized to act for the Administrator in
matters relating to the Issuer and to be acted upon by the Administrator
pursuant to the Administration Agreement.
<PAGE>
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"AVAILABLE PAYMENT AMOUNT": With respect to a Payment Date, an amount
equal to the sum of (a) the aggregate amount of Servicer Remittances deposited
in the Collateral Proceeds Account during the related Collection Period, plus
(b) net liquidation proceeds related to Defaulted Student Loans received by the
Servicer during the related Collection Period, plus (c) the aggregate amount of
reinvestment income thereon deposited in the Collateral Proceeds Account with
respect to the related Collection Period, including late payment charges on the
Student Loans, if any, plus (d) amounts on deposit in the Reserve Fund in excess
of the Interest Reserve Amount, plus (e) the aggregate Interest Support Payments
for such Payment Date, plus (f) funds released from the Interest Support Account
pursuant to Section 3.10.
"BANA": Bank of American National Association.
"BONDHOLDER" OR "HOLDER": The Person in whose name a Bond is
registered in the Bond Register.
"BOND INTEREST RATE": The interest rate on the Bonds, which shall be
7.45% per annum with respect to the Class A Bonds, and 8.25% per annum with
respect to the Class B Bonds.
"BOND OWNER": With respect to a Book-Entry Bond, the Person who is the
beneficial owner of such Bond as reflected on the books of the Depository or on
the books of a Person maintaining an account with the Depository (directly or as
an indirect participant, in accordance with the rules of the Depository).
"BOND REGISTER" AND "BOND REGISTRAR": The respective meanings specified
in Section 2.05.
"BONDS": Any one of the 7.45% Class A Collateralized Student Loan Bonds
Series 1997- S1 and/or the 8.25% Class B Collateralized Student Loan Bonds
Series 1997-S1, authorized by, and authenticated and delivered under, this
Indenture.
"BOOK-ENTRY BONDS": Bonds where ownership and transfers of beneficial
ownership interests are made through book-entries by the Depository as described
in Section 2.09; provided, that after the occurrence of a condition whereupon
book-entry registration is no longer permitted, definitive Bonds shall be issued
to the Bond Owners of Bonds, and such Bonds shall no longer be "Book-Entry
Bonds."
"BUSINESS DAY": Any day that is not a Saturday, Sunday or other day on
which commercial banking institutions in the City of Boston or in the city in
which the Corporate Trust Office is located are authorized or obligated by law
or executive order to be closed.
"CLASS": Collectively, all of the Bonds bearing the same alphabetical
class designation.
"CLASS A BONDS": Any one of the Bonds with a "Class A" designation on
its face, substantially in the form of Exhibit A-1, senior in right of payment
to the Class B Bonds, as set forth herein.
<PAGE>
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"CLASS B BONDS": Any one of the Bonds with a "Class B" designation on
its face, substantially in the form of Exhibit A-2, subordinate in right of
payment to the Class A Bonds, as set forth herein.
"CLOSING DATE": April 10, 1997.
"CODE": The Internal Revenue Code of 1986, as amended, and the rules
and regulations promulgated thereunder.
"COLLATERAL": The Trust Estate securing the Bonds.
"COLLATERAL PROCEEDS": With respect to the Student Loan Collateral, the
amount of each monthly installment of principal and interest payable to the
holder of such Student Loan on the Due Date in accordance with the terms of the
Student Loan Note evidencing such Student Loan.
"COLLATERAL PROCEEDS ACCOUNT": The trust account or accounts created
and maintained pursuant to Section 3.03.
"COLLECTION PERIOD": With respect to each Payment Date, the six-month
period ending on the 15th day of the calendar month in which the related Payment
Date occurs.
"COMMISSION": The Securities and Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934, as amended,
or if at any time such Commission is not existing and performing the duties now
assigned to it under the Trust Indenture Act, then the body performing such
duties at such time under the Trust Indenture Act or similar legislation
replacing the Trust Indenture Act.
"CORPORATE TRUST OFFICE": The principal corporate trust office of the
Trustee located at 225 Franklin Street, Boston, Massachusetts 02110, or at such
other address as the Trustee may designate from time to time by notice to the
Bondholders and the Issuer or the principal corporate trust office of any
successor Trustee. Any notices to the Trustee should be mailed to Attention:
Corporate Trust Department.
"COSTS OF ISSUANCE": Any amounts incurred as a cost or expense by the
Issuer in connection with the issuance of the Bonds and authorized to be paid
out of the Cost of Issuance Account by an Issuer Order.
"COST OF ISSUANCE ACCOUNT": The trust account created and maintained
pursuant to Section 3.11.
"COST OF ISSUANCE AMOUNT": $275,000.
"CURRENT PRINCIPAL AMOUNT": With respect to any Bond as of any date,
an amount equal to:
<PAGE>
-4-
(a) the original principal amount of such Bond, minus
(b) all prior payments, if any, made with respect to
principal of such Bond.
"CUSTODIAL AGREEMENT": The agreement, dated as of April 1, 1997, by and
among the Servicer, as custodian, the Issuer and the Trustee, pursuant to which
the Servicer agrees to act as custodian with respect to the Student Loans, as
such agreement may be amended or supplemented from time to time, a copy of which
is attached hereto as Exhibit C.
"DEFAULT": Any occurrence that is, or with notice or the lapse of time
or both would become, an Event of Default or when used in accordance with
obligations created by any agreement other than this Indenture, the meaning
specified in such agreement.
"DEFAULTED STUDENT LOAN": Any Student Loan that is more than 150 days
delinquent.
"DEFINITIVE BONDS": As defined in Section 2.09.
"DEPOSITORY": The Depository Trust Company, and any successor thereto
or substitute therefor in its capacity as depository of Book-Entry Bonds.
"DEPOSITORY NOTICE DATE": As defined in Section 2.09.
"DEPOSITORY PARTICIPANTS": A broker, dealer, bank, other financial
institution or other person for whom from time to time the Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
"DTC LETTER AGREEMENT": The Depository Letter Agreement among the
Issuer, the Trustee and the Depository, dated as of April 9, 1997, substantially
in the form of Exhibit E hereto, as such DTC Letter Agreement may be amended
from time to time.
"DUE DATE": Each date on which Collateral Proceeds are due and payable
with respect to each Student Loan.
"ELIGIBLE INVESTMENTS": One or more of the following:
(i) obligations of or guaranteed as to principal and interest
by the United States or any agency or instrumentality thereof when such
obligations are backed by the full faith and credit of the United
States;
(ii) repurchase agreements on obligations specified in clause
(i) maturing not more than one month from the date of acquisition
thereof, provided that the unsecured obligations of the party agreeing
to repurchase such obligations are at the time rated by the Rating
Agency in its highest short-term rating available;
<PAGE>
-5-
(iii) federal funds, certificates of deposit, demand deposits,
time deposits and bankers' acceptances (which shall each have an
original maturity of not more than 90 days and, in the case of bankers'
acceptances, shall in no event have an original maturity of more than
365 days or a remaining maturity of more than 30 days) denominated in
United States dollars of any U.S. depository institution or trust
company incorporated under the laws of the United States or any state
thereof or of any domestic branch of a foreign depository institution
or trust company; provided that the debt obligations of such depository
institution or trust company at the date of acquisition thereof has
been rated by the Rating Agency in its highest short-term rating
available; and, provided further that, if the original maturity of such
short-term obligations of a domestic branch of a foreign depository
institution or trust company shall exceed 30 days, the short-term
rating of such institution shall have a credit rating in the highest
applicable categories from the Rating Agency;
(iv) commercial paper (having original maturities of not more
than 365 days) of any corporation incorporated under the laws of the
United States or any state thereof which on the date of acquisition has
been rated by the Rating Agency in its highest short-term rating
available; provided that such commercial paper shall have a remaining
maturity of not more than 30 days;
(v) a money market fund rated by the Rating Agency in its
highest rating available, including without limitation money market
funds that are collateralized by assets of a bank or corporation which
bank or corporation has been rated by the Rating Agency in its highest
short term rating available; and
(vi) other obligations or securities that are acceptable to
the Rating Agency as an Eligible Investment hereunder and will not
result in a reduction in the then current rating of the Bonds, as
evidenced in writing;
provided, however, that no instrument shall be an Eligible Investment if it
represents either (1) the right to receive only interest payments with respect
to the underlying debt instrument or (2) the right to receive both principal and
interest payments derived from the obligations underlying such instrument and
the principal and interest payments with respect to such instrument provide a
yield to maturity greater than 120% of the yield to maturity at par of such
underlying obligations; and, provided further, that, Eligible Investments shall
include only such obligations or securities that mature on or before the
Business Day immediately preceding the next Payment Date, except that Eligible
Investments to be deposited in the Interest Support Account shall mature on or
before the Business Day immediately preceding the last day of the Interest
Support Period and Eligible Investments to be deposited in the Reserve Fund
prior to the initial Principal Payment Date shall mature on or before the
Business Day immediately preceding the initial Principal Payment Date. In
addition, no Eligible Investment which incorporates a penalty for early
withdrawal will be used unless the maturity of such Eligible Investment is on or
before the Business Day immediately preceding the next Payment Date.
<PAGE>
-6-
"EVENT OF DEFAULT": The meaning specified in Section 6.01, or when used
in association with obligations created by any agreement other than this
Indenture, the meaning specified in such agreement.
"FNBB": The First National Bank of Boston.
"FULL PREPAYMENT": A Student Loan prepayment in connection with the
occurrence of any of the following: (i) payment is made to the Servicer of 100%
of the outstanding principal balance of such Student Loan together with all
accrued and unpaid interest thereon, or (ii) payment is made to the Servicer of
all Liquidation Proceeds and other payments, if any, which have been determined
to be fully recoverable in the Servicer's reasonable judgment in respect of such
Student Loan.
"GRANT": To grant, bargain, sell, warrant, alienate, remise, release,
convey, assign, transfer, mortgage, pledge, create and grant a security interest
in and right of set-off against, deposit, set over and confirm. A Grant of the
Student Loan Collateral or of any other instrument shall include all rights,
powers and options (but none of the obligations) of the granting party
thereunder, including without limitation, the immediate and continuing right to
claim for, collect, receive and give receipt for principal and interest payments
in respect of the Student Loan Collateral and all other funds payable
thereunder, to give and receive notices and other communications, to make
waivers or other agreements, to exercise all rights and options, to bring
Proceedings in the name of the granting party or otherwise, and generally to do
and receive anything that the granting party is or may be entitled to do or
receive thereunder or with respect thereto.
"INDENTURE": This instrument as originally executed and, if from time
to time supplemented or amended by one or more indentures supplemental hereto
entered into pursuant to the applicable provisions hereof, as so supplemented or
amended. All references in this instrument to designated "Articles," "Sections,"
"Subsections" and other subdivisions are to the designated Articles, Sections,
Subsections and other subdivisions of this instrument as originally executed.
The words "herein," "hereof," "hereunder" and other words of similar import
refer to this Indenture as a whole and not to any particular Article, Section,
Subsection or other subdivision.
"INDEPENDENT": When used with respect to any specified Person means
such a Person who (i) is in fact independent of the Issuer and any other obligor
upon the Bonds, (ii) does not have any direct financial interest or any material
indirect financial interest in the Issuer or in any such other obligor or in an
Affiliate of the Issuer or such other obligor, and (iii) is not connected with
the Issuer or any such other obligor as an officer, employee, promoter,
underwriter, trustee, partner, director or person performing similar functions.
Whenever it is herein provided that any Independent Person's opinion or
certificate shall be furnished to the Trustee, such Person shall be 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 this
definition and that the signer is Independent within the meaning thereof.
<PAGE>
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"INDIVIDUAL BOND": A Bond with an original principal amount equal to
not less than $25,000.
"INTEREST ACCRUAL PERIOD": With respect to each Payment Date, the
six-month period (or, for the initial Interest Payment Date, the period
commencing on the Closing Date) ending on the last day preceding the related
Payment Date.
"INTEREST PAYMENT DATE": With respect to any Bond, any date specified
as a Payment Date in Section 2.03 upon which a payment of interest is payable on
such Bond or, if such day is not a Business Day, on the first Business Day
thereafter.
"INTEREST RESERVE AMOUNT": With respect to any Interest Accrual Period
or Interest Payment Date, an amount equal to the amount of interest payable on
the then Outstanding Bonds on the next succeeding Interest Payment Date.
"INTEREST SUPPORT ACCOUNT": The trust account or accounts created and
maintained pursuant to Section 3.10.
"INTEREST SUPPORT PAYMENT": With respect to each Interest Payment Date
during the Interest Support Period, (a) all accrued interest on the Bonds
together with expenses of the Issuer to be paid on such date minus (b) funds in
the Collateral Proceeds Account, if any, available to pay the amount determined
in clause (a) hereof.
"INTEREST SUPPORT PERIOD": The period commencing on the Closing Date
and ending on September 20, 2000.
"ISSUER": The National Collegiate Trust 1997-S1, a Delaware business
trust, acting through the Owner Trustee. All actions by, and rights and
obligations of, the Owner Trustee under this Indenture and the Bonds are actions
by, and rights and obligations of, the Issuer. Subject to Section 13.15,
whenever any reference is made herein to any actions (including execution of
documents) to be taken by the Issuer, to any rights of the Issuer, or to any
obligations of the Issuer hereunder, such reference shall be construed to refer
to such actions being taken by, such rights being exercised by or such
obligation being performed by the Owner Trustee (not in its individual capacity
but solely as owner trustee under the Trust Agreement) on behalf of the Issuer,
and such actions by the Owner Trustee shall fully bind the Issuer or shall fully
rebound to the benefit of the Issuer, as the case may be.
"ISSUER ORDER" OR "ISSUER REQUEST": A written order or request signed
in the name of the Issuer by an Authorized Officer.
"ISSUER REDEMPTION": A redemption of Bonds pursuant to Section 11.01.
"LIQUIDATION PROCEEDS": Amounts received and retained in connection
with the liquidation of Defaulted Student Loans, whether through acceleration or
otherwise.
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"LOAN DOCUMENTS": The loan documents pertaining to a particular
Student Loan comprising the loan file delivered to, reviewed and held by the
Servicer as specified in Section 4.02.
"NET LOANS WITHDRAWN": The meaning specified in Section 4.04.
"NOTE RATE": With respect to a Student Loan, the annual interest rate
to be paid by a Promisor under the terms of the related Student Loan Note.
"OFFICERS' CERTIFICATE": With respect to the Issuer, a certificate
signed by two Authorized Officers. With respect to any other Person, a
certificate signed on behalf of such Person by an individual who is identified
in that certificate as being an officer of such Person or any other individual
authorized to execute the certificate.
"OPINION OF COUNSEL": A written opinion of counsel, addressed to the
Trustee who may, except as otherwise expressly provided in this Indenture, be
counsel for the Issuer and who shall be satisfactory to the Trustee. Whenever an
Opinion of Counsel is required hereunder, such opinion may rely on opinions of
other counsel.
"ORIGINATION AGREEMENT": Collectively, (i) each Participation and Sale
Agreement, as amended from time to time, to be entered into between the Issuer
and an Owner Participant, (ii) the Origination Services Agreement, dated January
6, 1995, between The National Collegiate Trust and the Servicer, as such
Agreement may be amended or supplemented from time to time, relating to the
origination and sale of the Student Loan Collateral and (iii) each Origination
and Funding Agreement, to be entered into between FNBB and an Owner Participant
and (iv) each Loan Packaging and Funding Agreement, to be entered into between
BANA and an Owner Participant.
"OUTSTANDING": With respect to the Bonds or to the Bonds of a
designated Class, as of the date of determination, all Bonds or all Bonds of
that Class except:
(i) Bonds theretofore cancelled by the Bond Registrar or
delivered to the Bond Registrar for cancellation;
(ii) Bonds or portions thereof for which payment or redemption
money in the necessary amount has been theretofore deposited with the
Trustee or any Paying Agent (other then the Issuer) or set aside and
segregated in trust by the Issuer for the Holders of such Bonds;
provided, however, that if such Bonds are to be redeemed, notice of
such redemption has been duly given pursuant to this Indenture or
provision therefor, satisfactory to the Trustee;
(iii) Bonds in exchange for or in lieu of which other Bonds
have been authenticated and delivered pursuant to this Indenture unless
proof satisfactory to the Trustee is presented that any such Bonds are
held by a holder in due course; and
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(iv) Bonds alleged to have been destroyed, lost or stolen, or
Bonds mutilated and surrendered to the Trustee, for which replacement
Bonds have been issued as provided for in Section 2.06;
provided, however, that in determining whether the Holders of the requisite
percentage of the Aggregate Current Principal Amount of the Outstanding Bonds
have given any request, demand, authorization, direction, notice, consent or
waiver hereunder, Bonds owned by the Issuer or any other obligor upon the Bonds
or any Affiliate of the Issuer or such other obligor shall be disregarded and
deemed not to be Outstanding, except that, in determining whether the Trustee
shall be protected in relying upon any such request, demand, authorization,
direction, notice, consent, or waiver, only Bonds that the Trustee knows to be
so owned shall be so disregarded. Bonds so owned that have been pledged in good
faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee that the pledgee is entitled so to act with respect
to such Bonds and that the pledgee is not the Issuer or any Affiliate of the
Issuer.
"OWNER PARTICIPANT": Any educational institution holding all or any
portion of the beneficial ownership of the trust created pursuant to the Trust
Agreement.
"OWNER TRUSTEE": Delaware Trust Capital Management, Inc., a Delaware
trust company, not in its individual capacity but solely as owner trustee under
the Trust Agreement, or such successor Person as shall have become owner trustee
pursuant to the applicable provisions of this Indenture and the Trust Agreement.
"PARTIAL PREPAYMENT": Any Promisor payment or other recovery of
principal of a Student Loan (other than a Full Prepayment) that is received in
advance of its scheduled Due Date and that is not accompanied by an amount as to
interest representing scheduled interest for any payment period subsequent to
the period in which it was received.
"PAYING AGENT": The Trustee or any other depository institution or
trust company that is authorized by the Issuer pursuant to Section 9.02 to pay
the principal of or interest on, any Bonds on behalf of the Issuer.
"PAYMENT DATE": Any day specified in Section 2.03 as an Interest
Payment Date or Principal Payment Date for the Bonds or, if such day is not a
Business Day, on the first Business Day thereafter.
"PAYMENT DATE STATEMENT": As defined in Section 3.05.
"PERSON": Any individual, corporation, partnership, joint venture,
limited liability company, limited partnership, association, trust (including
any beneficiary thereof), estate, custodian, nominee, unincorporated
organization or government or any agency or political subdivision thereof.
"PLEDGED ACCOUNT OR FUND": The Collateral Proceeds Account, the
Reserve Fund and the Interest Support Account.
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"PREDECESSOR BONDS": With respect to any particular Bond, every
previous Bond evidencing all or a portion of the same debt as that evidenced by
such particular Bond; and, for the purpose of this definition, any Bond
authenticated and delivered under Section 2.06 in lieu of a lost, destroyed or
stolen Bond (or a mutilated Bond surrendered to the Trustee) shall be deemed to
evidence the same debt as the lost, destroyed or stolen Bond (or a mutilated
Bond surrendered to the Trustee).
"PREPAYMENT": A Full Prepayment or Partial Prepayment.
"PRINCIPAL PAYMENT DATE": Any Payment Date specified in Section 2.03
on which an installment of principal is due and payable or, if such day is not a
Business Day, on the first Business Day thereafter.
"PROCEEDING": Any suit in equity, action at law or other judicial or
administrative proceeding.
"PROMISOR": The Person indebted under a Student Loan.
"RATING AGENCY": Moody's Investors Service, Inc.
"RECORD DATE": The date on which the Holders of Bonds entitled to
receive a payment of principal or interest (other than a payment in full of all
unpaid principal of a Bond) are determined, such date (i) as to any Payment Date
being the last day of the month preceding the month of such Payment Date and
(ii) as to a Redemption Date pursuant to Section 11.01(a)(i), the first Business
Day which occurs 45 days following the Closing Date.
"REDEMPTION DATE": The first Business Day which occurs 75 days
following the Closing Date on which Bonds may be redeemed at the option of the
Issuer pursuant to Section 11.01(a) and any Payment Date on which Bonds may be
redeemed at the option of the Issuer pursuant to Sections 11.01(b) and (c).
"REDEMPTION PRICE": With respect to any Bond to be redeemed in whole or
in part pursuant to Section 11.01, an amount equal to 100% of the Current
Principal Amount of the Bond to be so redeemed, together with all unpaid and
accrued interest on such Bond.
"RESERVE FUND": The trust account or accounts created and maintained
pursuant to Section 3.09.
"RESPONSIBLE OFFICER": With respect to the Trustee, any corporate trust
officer or assistant corporate trust officer, or any other officer of the
Trustee customarily performing functions similar to those performed any of the
above designated officers and also, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.
"SALE": As defined in Section 6.16.
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"SCHEDULE OF STUDENT LOANS": Schedule I hereto listing, by loan number,
name of Promisor and principal balance at the Closing Date of the Student Loans
being Granted to the Trustee on the Closing Date.
"SERVICER": The Pennsylvania Higher Education Assistance Agency, a
public corporation and a government instrumentality of the Commonwealth of
Pennsylvania, or any successor thereof, as servicer of the Student Loans
pursuant to the Servicing Agreement, or any assignee of obligations under the
Servicing Agreement.
"SERVICER DETERMINATION DATE": The fifteenth (15th) day of each month
or, if such day is not a Business Day, the immediately preceding Business Day
(beginning with the month in which the Closing Date occurs) as of which the
Servicer determines the aggregate amount received with respect to the Student
Loans since the preceding Servicer Determination Date (or from the Closing Date
in the case of the first Servicer Determination Date).
"SERVICER REMITTANCE": The total amount of funds remitted to the
Trustee monthly by the Servicer pursuant to the Servicing Agreement, which
remittance shall include all monthly Collateral Proceeds collected by the
Servicer, less the Servicing Fee, together with any and all Prepayments received
by the Servicer.
"SERVICER REMITTANCE REPORT": Each monthly report prepared by the
Servicer pursuant to the Servicing Agreement.
"SERVICING AGREEMENT": The servicing agreement, dated January 6, 1995,
as amended by and between The National Collegiate Trust and the Servicer,
pursuant to which the Servicer agrees to perform certain servicing functions for
the Issuer relating to the Student Loans, as such agreement may be amended or
supplemented from time to time, a copy of which is attached hereto as Exhibit B.
"SERVICING FEE": A monthly fee, computed as set forth on Schedule II
hereto.
"STATED MATURITY": With respect to any Bond, September 20, 2013, which
is the date on which the entire unpaid principal amount of such Bond is due and
payable.
"STATED PRINCIPAL BALANCE": As of the Closing Date, for this purpose,
the Stated Principal Balance of each Student Loan is the outstanding principal
balance set forth on the Schedule of Student Loans. As of any other Date, the
Stated Principal Balance is (i) the outstanding principal balance after giving
effect to all payments and recoveries of principal and (ii) any interest in
excess of interest payable at the Bond Interest Rate, paid or payable by the
Servicer to the Trustee.
"STUDENT LOAN": Each of the student loans, which includes the related
Student Loan Notes, pledged to the Trustee as security for the Bonds, and all
renewals, extensions, substitutions and replacements thereof. The Student Loans
are listed on Schedule I hereto.
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"STUDENT LOAN COLLATERAL": The Student Loans securing the Bonds.
"STUDENT LOAN NOTE": The promissory note or other evidence of
indebtedness of a Promisor with respect to a Student Loan.
"TRUST AGREEMENT": The trust agreement, dated as of February 26, 1997,
between The National Collegiate Trust and the Trust Company, as amended or
restated from time to time.
"TRUST COMPANY": Delaware Trust Capital Management, Inc., a Delaware
trust company, or its successor under the Trust Agreement, in its individual
capacity.
"TRUST ESTATE": As defined in Section 4.01.
"TRUST INDENTURE ACT" OR "TIA": The Trust Indenture Act of 1939 as in
force at the Closing Date, unless otherwise specifically provided.
"TRUSTEE": State Street Bank and Trust Company, a Massachusetts trust
company, until a successor Person shall have become the Trustee pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean
such successor Person.
<PAGE>
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ARTICLE II
THE BONDS
SECTION 2.01 FORMS GENERALLY.
The Bonds issuable hereunder shall be issued in two Classes. The Bonds
and the Trustee's certificate of authentication shall be in substantially the
forms set forth in this Article II, with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture or as may in the Issuer's judgment be necessary, appropriate or
convenient to permit the Bonds to be issued and sold or held in bearer form, to
establish entitlement to an exemption from United States withholding tax or
reporting requirements with respect to payments on the Bonds or to comply, or
facilitate compliance, with other applicable laws or regulations, and may have
such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange on which the Bonds may be listed, or as may, consistently
herewith, be determined by the officers executing such Bonds, as evidenced by
their execution thereof. While Bonds may contain the above referenced provisions
with respect to Bonds issued in bearer form, no Bonds may actually be issued in
bearer form until the Issuer and the Trustee shall have entered into an
appropriate supplemental indenture pursuant to Section 10.01(7) providing for
such issuance. Any portion of the text of any Bond may be set forth on the
reverse thereof with an appropriate reference on the face of the Bond.
The definitive Bonds shall be printed, lithographed or engraved or
produced by any combination of these methods on steel engraved borders, or may
be typewritten or photocopied, or may be produced in any other manner permitted
by the rules of any securities exchange on which the Bonds may be listed, all as
determined by the officers executing such Bonds, as evidenced by their execution
thereof.
SECTION 2.02 FORMS OF BONDS.
The form of the Class A Bonds and the Class B Bonds issued and
authenticated hereunder shall be in substantially the form of Exhibits A-1 and
A-2, respectively.
SECTION 2.03 GENERAL PROVISIONS WITH RESPECT TO PRINCIPAL
AND INTEREST PAYMENTS; DENOMINATIONS.
The aggregate principal amount of Bonds that may be authenticated and
delivered under this Indenture is limited to $8,000,000.00 except for Bonds
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, other Bonds pursuant to Section 2.05 or 2.06 of this
Indenture. The Bonds shall have the following characteristics:
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Original Bond
Class Principal Interest Stated
Designation Amount Rate Maturity
----------- ------ ---- --------
Class A $5,250,000 7.45% September 20, 2013
Class B $2,750,000 8.25% September 20, 2013
The Interest Payment Dates for the Bonds are March 20 and September 20,
commencing September 20, 1997. The Principal Payment Dates for the Bonds are
March 20 and September 20, commencing with respect to the Class A Bonds, on
September 20, 2000.
The Bonds shall have the Stated Maturity specified above. The principal
of each Bond shall be payable as set forth herein (a) beginning no later than
(i) with respect to the Class A Bonds, on the first Principal Payment Date and
(ii) with respect to the Class B Bonds, on the Principal Payment Date following
the payment in full of the Class A Bonds (which initially may be the same
Principal Date on which the Class A Bonds are paid in full), and (b) with
respect to all Bonds, ending no later than the Stated Maturity unless the unpaid
principal of such Bond becomes due and payable at an earlier date by declaration
of acceleration, redemption or otherwise.
Subject to the Issuer's obligation to pay interest on the Bonds in
accordance with their terms and to its obligation to retire the Bonds on or
before their Stated Maturity, the aggregate amount of principal and interest on
the Bonds due and payable on each Payment Date shall be equal to the amounts
held in the Collateral Proceeds Account and the Reserve Fund in excess of the
Interest Reserve Amount on such Payment Date as applied in accordance with the
terms hereof. All payments made with respect to any Bond shall be applied first
to the interest then due and payable on such Bond and then to the principal
thereof. All computations of interest accrued on any Bond shall be made as if
each year consisted of twelve months of thirty days each. Interest on the unpaid
principal amount of each Outstanding Bond shall be payable on each Interest
Payment Date at the Bond Interest Rate for the related Interest Accrual Period.
Notwithstanding any of the foregoing provisions with respect to
payments of principal of and interest on the Bonds, if the Bonds have become or
been declared due and payable following an Event of Default and such
acceleration of maturity and its consequences have not been rescinded and
annulled and the provisions of Section 6.04 are not applicable, then payments of
principal of and interest on such Bonds shall be made in accordance with Section
6.07.
All Bonds of the same Class shall be identical in all respects except
for the denominations and dates thereof. All Bonds issued under this Indenture
shall be in all respects equally and ratably entitled to the benefits hereof
without preference, priority (except to the extent set forth in Section 3.03(c)
and 6.07 hereof) or distinction on account of the actual time or times of
authentication and delivery, all in accordance with the terms and provisions of
this Indenture.
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Payments of principal and interest on the Bonds of the same Class shall
be made pro-rata among all Outstanding Bonds of the same Class, without
preference or priority of any kind.
Each Bond shall be issuable only as registered Bonds in denominations
of $25,000 and integral multiples of $1,000 in excess thereof (except that one
Bond may be issued in a different principal amount as necessary to include the
remainder of the aggregate authorized principal of such Bond).
SECTION 2.04 EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
(a) The Bonds shall be executed on behalf of the Issuer by one of the
Authorized Officers of the Owner Trustee under its corporate seal, which may be
in facsimile form and be imprinted or otherwise reproduced thereon and attested
by one of the Authorized Officers of the Owner Trustee. The signature of any of
these officers on the Bonds may be manual or facsimile.
Bonds bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Bonds or did not hold
such offices at the date of such Bonds.
At any time and from time to time after the execution and delivery of
this Indenture, the Issuer may deliver Bonds executed by the Owner Trustee on
behalf of the Issuer to the Trustee for authentication, and the Trustee upon
Issuer Request shall authenticate and deliver such Bonds as in this Indenture
provided and not otherwise. Each Bond shall be dated as of the date of its
authentication.
No Bond shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Bond a
certificate of authentication substantially in the form set forth in the form of
Bonds in Exhibits A-1 and A-2, executed by the Trustee by the manual signature
of one of its authorized officers and such certificate upon any Bond shall be
conclusive evidence, and the only evidence, that such Bond has been duly
authenticated and delivered hereunder.
(b) On the Closing Date, the Bonds shall be executed by the Owner
Trustee on behalf of the Issuer and delivered to the Trustee for authentication
and thereupon the same shall be authenticated and delivered by the Trustee upon
Issuer Request and upon receipt by the Trustee or its agent of the following:
(i) an Officer's Certificate of the Issuer evidencing the
authorization of the execution, authentication and delivery of the
Bonds and specifying the Stated Maturity, the principal amount, Bond
Interest Rate and the Class designation of each Bond to be
authenticated and delivered;
<PAGE>
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(ii) either (A) a certificate or other official document
evidencing the due authorization, approval or consent of any
governmental body or bodies, at the time having jurisdiction in the
premises, together with an Opinion of Counsel that the Trustee is
entitled to rely thereon and that the authorization, approval or
consent of no other governmental body is required for the valid
issuance, or (B) an Opinion of Counsel that no such authorization,
approval or consent of any governmental body is required except for
such registrations, if any, as are required under the Securities Act of
1933, the TIA and the "Blue Sky" securities laws of any state;
(iii) an Opinion of Counsel dated not earlier than the Issuer
Request, to the effect that:
(A) all instruments furnished to the Trustee in
connection with the Bonds conform in all material respects to
the requirements of this Indenture and constitute sufficient
authority hereunder for the Trustee to authenticate and
deliver the Bonds;
(B) all conditions precedent provided for in this
Indenture relating to the authentication and delivery of the
Bonds have been complied with and the Issuer is duly entitled
to the authentication and delivery of the Bonds;
(C) all laws and requirements with respect to the
execution and delivery by the Issuer of the Bonds have been
complied with;
(D) the Issuer has corporate power and authority to
execute, deliver and perform under this Indenture and to issue
the Bonds and has duly taken all necessary corporate action
for those purposes;
(E) this Indenture is, and the Bonds when issued,
delivered, authenticated and paid for, will be, the valid,
legal and binding obligations of the Issuer enforceable in
accordance with their terms, subject to bankruptcy,
reorganization, insolvency and other laws affecting the
enforcement of creditors' rights generally and to general
principles of equity (regardless whether such enforceability
is considered in a Proceeding in equity or at law);
(F) the Bonds, when issued, will be entitled to the
benefits of this Indenture;
(G) such action has been taken with respect to
delivery of the Trust Estate and with respect to recording and
filing of this Indenture and any other requisite documents as
is necessary to make effective and to perfect the lien and
security interest of this Indenture as a first priority lien
and security interest of this Indenture in the Trust Estate;
(H) this Indenture has been duly qualified under the
TIA; and
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(I) the Issuer has the power and authority to assign,
pledge and deposit the Trust Estate with the Trustee as
security for the Bonds and has duly authorized such
assignment, pledge and deposit with the Trustee by all
necessary action.
(iv) Receipt of a trust receipt from the Servicer pursuant to
the Custodial Agreement that it holds the Loan Documents as agent for
the Trustee;
(v) an Officer's Certificate of the Issuer stating that the
issuance of the Bonds will not result in a breach of any of the terms,
conditions or provisions of, or constitute a default under, the
Issuer's certificate of trust or bylaws or any indenture, mortgage,
deed of trust or other agreement or instrument to which the Issuer is a
party or by which it is bound, or any order of any court or
administrative agency entered in any Proceeding to which the Issuer is
a party or by which it may be bound or to which it may be subject; and
that all conditions precedent provided in this Indenture relating to
the authentication and delivery of the Bonds have been complied with;
(vi) a certificate or opinion of an Independent Person,
meeting all applicable requirements of TIA ss.314(d)(2) and (3), as to
the fair value of the Student Loan Collateral securing the Bonds and of
any Eligible Investments to be deposited on the Closing Date into any
Pledged Account or Fund; and
(vii) such other documents as the Trustee may reasonably
require.
SECTION 2.05 REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.
(a) The Issuer shall cause to be kept a register (the "Bond Register")
in which, subject to such reasonable regulations as it may prescribe, the Issuer
shall provide for the registration of Bonds and the registration of transfers
and exchanges of Bonds in certificated form. The Trustee is hereby initially
appointed "Bond Registrar" for the purpose of registering Bonds and transfers of
Bonds in certificated form as herein provided. Upon any resignation of any Bond
Registrar appointed by the Issuer, the Issuer shall promptly appoint a successor
or, in the absence of such appointment, shall assume the duties of Bond
Registrar.
If the Trustee shall at any time not be authorized to keep and maintain
the Bond Register, the Trustee shall have the right to inspect such Bond
Register at all reasonable times and to rely conclusively upon a certificate of
the Person in charge of the Bond Register as to the names and addresses of the
holders of the Bonds and the principal amounts and numbers of such Bonds as
held.
(b) Upon surrender for registration of transfer or exchange of any Bond
in certificated form at the office or agency of the Issuer to be maintained as
provided in Section 9.01, the Issuer shall execute, and the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Bonds of any authorized denominations and of a like
aggregate initial principal amount.
<PAGE>
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At the option of the Holder, Bonds in certificated form may be
exchanged for other Bonds of any authorized denominations of a like aggregate
initial principal amount, upon surrender of the Bonds to be exchanged at such
office or agency. Whenever any Bonds are so surrendered for exchange, the Issuer
shall execute, and the Trustee shall authenticate and deliver, the Bonds that
the Bondholder making the exchange is entitled to receive.
All Bonds in certificated form issued upon any registration of transfer
or exchange of Bonds shall be the valid obligations of the Issuer, evidencing
the same debt, and entitled to the same benefits under this Indenture, as the
Bonds surrendered upon such registration of transfer or exchange.
(c) Every Bond in certificated form presented or surrendered for
registration of transfer or exchange shall be duly endorsed, or be accompanied
by a written instrument of transfer in form satisfactory to the Trustee duly
executed by the Holder thereof or his attorney duly authorized in writing.
(d) No transfer of a Bond or any interest therein may be made to:
(i)(A) any employee benefit plan or other retirement arrangement, including
individual retirement accounts and annuities, Keogh plans and collective
investment funds and separate accounts in which such plans, accounts or
arrangements are invested (each, a "Plan"), that is subject to the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or the Internal
Revenue Code of 1986 (the "Code"), or (B) any person that is directly or
indirectly purchasing such Bond or interest therein on behalf of, as named
fiduciary of, as trustee of, or with assets of such a plan, unless the
prospective transferee provides to the Trustee a certification of facts and an
Opinion of Counsel that establish to the satisfaction of the Trustee that such
transfer will not result in a violation of Section 406 of ERISA or Section 4975
of the Code or cause the Servicer or the Trustee to be deemed a fiduciary of
such plan or result in the imposition of an excise tax under Section 4975 of the
Code; or (ii) any other Person that does not provide a certification to the
Trustee that (i)(A) and (i)(B) do not apply.
A Bond Owner of a Book-Entry Bond shall be entitled to transfer
beneficial ownership of such Book-Entry Bond only upon compliance with the
procedures established by such Bond Owner's brokerage firm and by the
participating firms acting as such brokerage firm's agent, if any. No Bond Owner
shall be entitled to receive a certificate evidencing ownership of his
Book-Entry Bond.
No service charge shall be made for any registration of transfer or
exchange of Bonds, but the Issuer or the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge as may be imposed in
connection with any registration of transfer or exchange of Bonds, other than
exchanges pursuant to Section 2.06 not involving any transfer.
<PAGE>
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SECTION 2.06 MUTILATED, DESTROYED, LOST OR STOLEN BONDS.
If (a) any mutilated Bond is surrendered to the Trustee or the Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Bond, and (b) there is delivered to the Trustee such security or indemnity as
may be required by the Trustee to save the Trustee and the Issuer harmless,
then, in the absence of notice to the Issuer or the Trustee that such Bond has
been acquired by a bona fide purchaser, the Issuer shall execute and upon its
request the Trustee shall authenticate and deliver, in exchange for or in lieu
of any such mutilated, destroyed, lost or stolen Bond, a new Bond or Bonds of
the same tenor and aggregate initial principal amount bearing a number not
contemporaneously outstanding; provided, however, that if any such mutilated,
destroyed, lost or stolen Bond shall have become or shall be about to become due
and payable, or shall have become subject to redemption in full, instead of
issuing a new Bond, the Issuer may pay such Bond without surrender thereof,
except that any mutilated Bond shall be surrendered. If, after the delivery of
such new Bond or payment of a destroyed, lost or stolen Bond pursuant to the
proviso to the preceding sentence, a bona fide purchaser of the original Bond in
lieu of which such new Bond was issued presents for payment such original Bond,
the Issuer and the Trustee shall be entitled to recover such new Bond (or such
payment) from the Person to whom it was delivered or any Person taking such new
Bond from such Person, except a bona fide purchaser, and shall be entitled to
recover upon the security or indemnity provided therefor to the extent of any
loss, damage, cost or expenses incurred by the Issuer or the Trustee in
connection therewith.
Upon the issuance of any new Bond under this Section, the Trustee or
the Issuer may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
reasonable expenses (including the fees and expenses of the Trustee) in
connection therewith.
Every new Bond issued pursuant to this Section in lieu of any
destroyed, lost or stolen Bond shall constitute an original additional
contractual obligation of the Issuer, whether or not the destroyed, lost or
stolen Bond shall be at any time enforceable by anyone, and shall be entitled to
all the benefits of this Indenture equally and proportionately with any and all
other Bonds duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Bonds.
SECTION 2.07 PERSONS DEEMED OWNERS.
Prior to due presentment for registration of transfer of any Bond, the
Issuer, the Trustee, any Agent and any other agent of the Issuer or the Trustee
may treat the Person in whose name any bond is registered as the owner of such
Bond (a) on the applicable Record Date for the purpose of receiving payments of
the principal of (other than the payment in full of the unpaid principal balance
of such Bond) and interest on such Bond and (b) on any other date for all other
purposes whatsoever, whether or not such Bond is overdue, and, except as
otherwise required
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by applicable law, neither the Issuer, the Trustee, any Agent nor any other
agent of the Issuer or the Trustee shall be affected by notice to the contrary.
SECTION 2.08 CANCELLATION.
All Bonds surrendered for payment, registration of transfer, exchange
or redemption shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee and shall be promptly cancelled by it. The Issuer may
at any time deliver to the Trustee for cancellation any Bond previously
authenticated and delivered hereunder that the Issuer may have acquired in any
manner whatsoever, and all Bonds so delivered shall be promptly cancelled by the
Trustee. No Bonds shall be authenticated in lieu of or in exchange for any Bonds
cancelled as provided in this Section, except as expressly permitted by this
Indenture. All cancelled Bonds held by the Trustee shall be destroyed unless the
Issuer shall direct by an Issuer Order that they be returned to the Issuer.
SECTION 2.09 BOOK-ENTRY BONDS.
The Bonds will be Book-Entry Bonds. Each Class of Bonds shall be
represented by a single bond certificate with respect to such Class in the
original principal amount of the related Bonds. The Issuer hereby designates The
Depository Trust Company, 55 Water Street, New York, New York 10041, as the
initial Depository for the Book-Entry Bonds and directs the Trustee to execute
and deliver the DTC Letter Agreement. The bond certificates representing the
Book-Entry Bonds shall be registered in the name of the nominee of the
Depository designated in the DTC Letter Agreement, CEDE & Co. The Trustee shall
not register the transfer of any Book-Entry Bond to another depository until the
Issuer shall have delivered or caused to be delivered to the Trustee a written
acceptance by the proposed transferee of the duties of acting as depository with
respect to Book-Entry Bonds and an Opinion of Counsel to the effect that the
proposed transferee is an entity registered as a "clearing agency" pursuant to
Section 17A of the Securities Exchange Act of 1934, as amended and to the
further effect that all other conditions precedent for such registration of
transfer have been completed. The Trustee shall be under no liability to any
Person for any such registration or for making any payments due on such Bonds to
the Holder thereof or for taking any other action with respect to such Holder
under the provisions of this Indenture so long as the transfer was registered
upon receipt of the Opinion of Counsel described above. Any Bond Owner acquiring
an interest in a Book-Entry Bond through the Depository or its participating
organizations ("Depository Participants") shall not be entitled to receive a
certificate representing any interest in the Bonds except in the event that
fully-registered, certificated Bonds are issued to Bond Owners ("Definitive
Bonds") under the circumstances set forth in this Section.
As long as the Outstanding Bonds remain Book-Entry Bonds (i) the
provisions of this Section shall be in full force, (ii) to the extent that the
provisions of this Section conflict with any provisions of this Indenture, the
provisions of this Section shall control, (iii) the Trustee shall deal with the
Depository as representative of the Bond Owners of the Bonds for purposes of
exercising the rights of Holders under this Indenture, and requests and
directions for and votes of such representative shall not be deemed to be
inconsistent if they are made with respect
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to different Bond Owners; (iv) the Issuer or the Trustee shall deliver to the
Depository any notice or other communication required to be delivered to any
Holder by the Issuer or the Trustee, respectively, and shall note thereon the
CUSIP number of the Bonds, (v) the Trustee is hereby authorized by the Issuer to
request from the Depository at any time a list of Depository Participants, (vi)
the Trustee may rely and shall be fully protected in relying upon information
furnished by the Depository with respect to its Depository Participants and
information furnished by the Depository Participants with respect to Bond
Owners, (vii) the Depository shall maintain book entry records with respect to
the Bond Owners and with respect to the ownership and transfers of beneficial
interests in the Bonds; (viii) ownership and transfers of registration of the
Bonds on the books of the Depository shall be governed by applicable rules
established by the Depository; (ix) the Depository may collect its usual and
customary fees, charges and expenses from the Depository Participants, (x) any
invitation to tender the Bonds shall be made in compliance with the pertinent
provisions of the DTC Letter Agreement, (xi) to the extent required by the
pertinent provisions of the DTC Letter Agreement, the Issuer or, if applicable,
the Trustee shall give the Depository notice of any record date set by the
Issuer or the Trustee (as the case may be) pursuant to Section 13.03(e), (xii)
to the extent of any conflict between the DTC Letter Agreement and this
Indenture, the provisions of the DTC Letter Agreement shall control, (xiii) the
rights of Bond Owners shall be exercised only through the Depository and the
Depository Participants and shall be limited to those established by law and
agreement between such Bond Owners, the Depository and/or Depository
Participants.
On or before the thirtieth (30th) day prior to any Issuer Redemption,
the Trustee shall notify the Depository of the date of such Issuer Redemption.
Bonds issued as Book-Entry Bonds shall be issued in Definitive Bonds in
the event that (A) the Issuer expressly advises the Trustee in writing that the
Depository is no longer willing or able to properly discharge its
responsibilities as depository with respect to such Book-Entry Bonds, and the
Issuer is unable to locate a qualified successor, or (B) the Issuer, in its sole
discretion (but only with the express prior written consent of the Trustee),
elects to terminate the book-entry system through the Depository by express
written notice to the Depository and the Trustee, or (C) after the occurrence of
an Event of Default, Bond Owners representing not less than two-thirds in
Aggregate Current Principal Amount of such Book-Entry Bonds advise the
Depository through Depository Participants in writing that the continuation of a
book-entry system through the Depository is no longer in the best interest of
the Bond Owners. Upon the occurrence of any event described in the immediately
preceding sentence, the Depository shall be required to notify all Depository
Participants of the availability through the Depository of Definitive Bonds.
Upon surrender by the Depository of the certificate representing such BookEntry
Bonds and instructions to the Trustee from the Depository for reregistration of
the Definitive Bond certificates and the Issuer's delivery to the Trustee of
appropriate Definitive Bond certificates, the Owner Trustee shall, on behalf of
the Issuer, execute and the Trustee shall authenticate the entire principal
amount of such Book-Entry Bonds then Outstanding in Definitive Bonds and
thereafter the Trustee shall recognize the Holders of such Definitive Bonds as
Holders under this Indenture. Neither the Issuer, the Trustee nor the Owner
Trustee shall be liable for any delay in delivery of such instructions and
certificates and may conclusively rely on and shall be protected in relying on
such instructions.
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ARTICLE III
PAYMENTS ON THE BONDS
SECTION 3.01 COLLECTION OF MONEY.
Except as otherwise expressly provided herein, the Trustee may demand
payment or delivery of, and shall receive and collect, directly and without
intervention or assistance of any fiscal agent or other intermediary, all money
and other property payable to or receivable by the Trustee pursuant to this
Indenture, shall hold all such money and property received by it as part of the
Trust Estate, and shall apply it as provided in this Indenture. If the Trustee
shall not have received a Servicer Remittance with respect to a Student Loan by
the second Business Day after the related Servicer Determination Date, the
Trustee shall request the Servicer to make such payment as promptly as
practicable or legally permitted.
Except as otherwise expressly provided in this Indenture, if, following
any request by the Trustee for payment of a late Servicer Remittance, any
Default occurs in the making of such payment or if a Default occurs in any other
performance required under the Servicing Agreement of which a Responsible
Officer of the Trustee has actual knowledge, the Trustee may, and upon the
request of the Holders of Bonds representing more than 66 2/3% of the Aggregate
Current Principal Amount of the Outstanding Bonds shall, take such action as may
be specified in Section 6.03 herein to enforce such payment or performance
including the institution and prosecution of appropriate Proceedings against the
Servicer. Any such action shall be without prejudice to any right to claim a
Default or Event of Default under this Indenture and to proceed thereafter as
provided in Article VI.
SECTION 3.02 PAYMENTS OF PRINCIPAL AND INTEREST.
(a) Interest or principal payable on any Bond that is punctually paid
out of the Collateral Proceeds Account pursuant to Section 3.03 or duly provided
for by the Issuer on the applicable Payment Date or Redemption Date shall be
paid to the Person in whose name such Bond (or one or more Predecessor Bonds) is
registered at the close of business on the Record Date for such applicable
Payment Date or Redemption Date by payment to the Depository, which shall credit
the amount of such payments to the accounts of its Depository Participants in
accordance with its normal procedures, provided that in the event the Bonds are
no longer maintained as Book-Entry Bonds, payment shall be made by check mailed
to such Person's address as it appears in the Bond Register on such Record Date
or upon prior notice given to the Trustee, by wire transfer of immediately
available funds to the accounts specified by such Person, except for the final
payment of principal payable with respect to such Bond (or the Redemption Price)
for any Bond called for redemption, if such redemption will result in payment of
the then entire unpaid principal amount of such Bond), which shall be payable as
provided in subsection (b) of this Section 3.02. Each Depository Participant
shall be responsible for disbursing such payments to the Bond Owners of the
Book-Entry Bonds that it represents and to each brokerage firm for which it acts
as agent. Each brokerage firm shall be responsible for
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disbursing funds to the Bond Owners of the Book-Entry Bonds that it represents.
All such credits and disbursements are to be made by the Depository and the
Depository Participants in accordance with the provisions of the Bonds. Neither
the Trustee nor the Issuer shall have any responsibility therefor except as
otherwise provided by applicable law.
Any payment of interest or principal payable on any Bond which
otherwise would be due and payable on a day which is not a Business Day shall be
payable on the next succeeding Business Day and shall be deemed to have been
paid on such non-Business Day on which such payment was otherwise payable.
(b) All reductions in the principal amount of a Bond (or one or more
Predecessor Bonds) effected by payments of principal made on any Payment Date or
Redemption Date shall be binding upon all Holders of such Bonds and of any Bonds
issued upon the registration of transfer thereof or in exchange therefor or in
lieu thereof, whether or not such payment is noted on such Bonds. The final
payment of principal of each Bond (including the Redemption Price of any Bond
called for redemption pursuant to Article XI) shall be payable only upon
presentation and surrender on or after the Payment Date or Redemption Date
therefor at the office or agency of the Issuer maintained by it for such purpose
pursuant to Section 9.01.
As soon as practicable prior to each Payment Date, the Trustee shall
determine whether, on the basis of Collateral Proceeds received and expected to
be received during the related Collection Period and withdrawn from the
Collateral Proceeds Account pursuant to Section 3.03(c), the entire remaining
unpaid principal amount of the Bonds will become due and payable on that Payment
Date or whether in accordance with Section 3.09(c), the Interest Reserve Amount
equals or exceeds the Aggregate Current Principal Amount of Outstanding Bonds,
and, if so, the Trustee shall, no later than five days prior to such Payment
Date, mail or cause to be mailed to the Issuer and to each Person in whose name
a Bond to be so retired is registered at the close of business on the Record
Date a notice to the effect that:
(i) it is expected that funds sufficient to pay such final
payment will be available in the Collateral Proceeds Account and the
Reserve Fund on such Payment Date, and
(ii) if such funds are available, (A) such final payment will
be payable on such Payment Date, but only upon presentation and
surrender of such Bond at the office or agency of the Issuer maintained
for such purpose pursuant to Section 9.01 (the address of which shall
be set forth in such notice), and (B) interest shall accrue on such
Bond up to the Business Day preceding such Payment Date.
Notices in connection with redemptions of Bonds shall contain the information
set forth in, and be mailed in accordance with, Section 11.03.
(c) Subject to the foregoing provisions of this Section 3.02, each Bond
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Bond shall represent the rights to unpaid principal
and interest that were represented by such
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other Bond. Any checks mailed pursuant to subsection (a) of this Section 3.02
and returned undelivered shall be held in accordance with Section 9.02.
(d) Notwithstanding any of the provisions of this Section with respect
to payments of principal of and interest on the Bonds, if the Bonds have become
or been declared due and payable in accordance with Section 3.09(c) or following
an Event of Default and such acceleration of maturity and its consequences have
not been rescinded and annulled, then payments of principal of and interest on
such Bonds shall be made in accordance with Section 6.07.
SECTION 3.03 COLLATERAL PROCEEDS ACCOUNT; APPLICATION OF FUNDS.
(a) On or before the Closing Date, the Trustee shall establish, at its
Corporate Trust Office, a segregated account that shall be the "Collateral
Proceeds Account" and shall be clearly labeled as such. The Trustee shall
promptly deposit in the Collateral Proceeds Account all Servicer Remittances
received by it with respect to the Student Loan Collateral, including any
liquidation proceeds related to Defaulted Student Loans and late payment
charges, if any. All remittances deposited from time to time in the Collateral
Proceeds Account, all other deposits therein pursuant to this Indenture, and all
investments made with such amounts, including all income or other gain from such
investments, shall be held by the Trustee in the Collateral Proceeds Account as
part of the Trust Estate as herein provided, subject to withdrawal by the
Trustee for the purposes set forth in Subsection (c) of this Section. The Issuer
may, at any time and at its option, deposit cash (or Eligible Investments
maturing prior to the next Payment Date) in the Collateral Proceeds Account for
the purpose of avoiding any Event of Default which would otherwise result
pursuant to Section 6.01(1), but the Issuer is under no obligation to do so. All
funds withdrawn from the Collateral Proceeds Account pursuant to Subsection (c)
of this Section for the purpose of making payments to the Holders of Bonds shall
be so withdrawn in accordance with Section 9.02.
(b) So long as no Default or Event of Default shall have occurred and
be continuing, all amounts in the Collateral Proceeds Account shall be invested
and reinvested by the Trustee in one or more Eligible Investments pursuant to an
Issuer Order. Such investments are subject to the following restrictions:
(i) except as permitted by clause (ii) below, no investment of
any amount held in the Collateral Proceeds Account may mature later
than the Business Day immediately preceding the next Payment Date; and
(ii) any investment (including repurchase agreements) in which
State Street Bank and Trust Company, in either its commercial or trust
capacity, is the obligor, may mature on a Payment Date if, under this
Section such investment could otherwise mature on the Business Day
immediately preceding such Payment Date.
All income or other gains from investment of funds deposited in the
Collateral Proceeds Account shall be deposited by the Trustee in the Collateral
Proceeds Account immediately upon
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receipt, and any loss resulting from such investment shall be charged to the
Collateral Proceeds Account, and the Trustee shall not be responsible in any way
for such loss on any investment made pursuant to this Indenture, except in its
commercial capacity as obligor of an investment.
(c) Unless the Bonds have been declared due and payable pursuant to
Section 6.02 and funds collected by the Trustee are being applied in accordance
with Section 6.07, amounts in the Collateral Proceeds Account on any Payment
Date deposited during the Collection Period which ended during the calendar
month in which the Payment Date occurs shall be withdrawn from the Collateral
Proceeds Account, in the amounts required but not to exceed the Available
Payment Amount, for application on any Payment Date as follows:
FIRST, to the Class A Bonds for the payment of accrued
interest at the related Bond Interest Rate;
SECOND, to the Class B Bonds for the payment of accrued
interest at the related Bond Interest Rate;
THIRD, to the payment to the Reserve Fund of any shortfall in
the Interest Reserve Amount for the Interest Accrual Period commencing
on such Payment Date; provided that, if after giving effect to all
payments of interest and principal on the Bonds on such Payment Date,
the Interest Reserve Amount equals or exceeds the Aggregate Current
Principal Amount of Outstanding Bonds, then all the Bonds shall be
immediately due and payable pursuant to Section 3.09(c);
FOURTH, to the payment of any unpaid amount due the Trustee
pursuant to Section 7.07;
FIFTH, to the payment of any unpaid amount due any Accountants
for services rendered pursuant to Section 9.12 hereof or otherwise
under this Indenture;
SIXTH, to the payment of any unpaid amount due the Owner
Trustee pursuant to the Trust agreement;
SEVENTH, to the payment of any unpaid amount due the
Administrator pursuant to the Administration Agreement;
EIGHTH, on each Principal Payment Date, to the Class A Bonds
for the payment of any unpaid principal amount of the Class A Bonds;
NINTH, on each Principal Payment Date following payment in
full of the Class A Bonds (which initially may be the same Principal
Payment Date on which the Class A Bonds are paid in full), to the Class
B Bonds for the payment of any unpaid principal amount of the Class B
Bonds;
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TENTH, if such Payment Date is not a Principal Payment Date,
any remaining amounts in the Collateral Proceeds Account shall be
deposited in the Reserve Fund;
each such amount in paragraphs FIRST, SECOND, EIGHTH and NINTH above being the
amount thereof set forth in the Payment Date Statement or in the notice from the
Issuer given pursuant to Section 11.02.
SECTION 3.04 GENERAL PROVISIONS REGARDING PLEDGED ACCOUNTS OR FUNDS.
(a) Each Pledged Account or Fund shall relate solely to the Bonds and
to the Student Loans and other property securing the Bonds. Funds and other
property in each Pledged Account or Fund shall be at all times separately
accountable on the internal books and records of the Trustee. Funds and other
property in each Pledged Account or Fund shall not be commingled with any other
funds or property of the Issuer or any Affiliate thereof. Notwithstanding the
foregoing, the Trustee may hold any funds or other property received or held by
it as part of a Pledged Account or Fund in collective accounts maintained by it
in the normal course of its business and containing funds or property held by it
for other Persons (which may include the Issuer or an Affiliate), provided that
such accounts are under the sole control of the Trustee and the Trustee
maintains adequate records indicating the ownership of all such funds or
property and the portions thereof held for credit to each Pledged Account or
Fund.
(b) The Issuer agrees not to direct the Trustee to make any investment
of any funds in a Pledged Account or Fund or to sell any investment held in a
Pledged Account or Fund except under the following terms and conditions:
(i) each such investment shall be made in the name of the
Trustee (in its capacity as such) or in the name of a nominee of the
Trustee (or, if, as indicated by an Opinion of Counsel delivered to the
Trustee, applicable law provides for perfection of security interests
of an investment not evidenced by a certificate or other instrument
through a recordation of such security interests on books maintained by
or on behalf of the issuer of such investment, such security interests
may be so recorded);
(ii) the Trustee shall have sole control over such
investment, the income thereon and the proceeds thereof;
(iii) any certificate or other instrument evidencing such
investment shall be delivered directly to the Trustee or its agent; and
(iv) the proceeds of each sale of such an investment shall be
remitted by the purchaser thereof directly to the Trustee for deposit
in the Pledged Account or Fund in which such investment was held.
(c) If any amounts are needed for disbursement from a Pledged Account
or Fund and sufficient uninvested funds are not available therein to make such
disbursement, in the absence
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of an Issuer Order for the liquidation of investments held therein in an amount
sufficient to provide the required funds, the Trustee shall cause to be sold or
otherwise converted to cash a sufficient amount of the investments in such
Pledged Account or Fund.
(d) The Trustee shall not in any way be held liable by reason of any
insufficiency in any Pledged Account or Fund except for losses on investments
that are liabilities of State Street Bank and Trust Company in its commercial
capacity as obligor under the terms of this Indenture.
(e) All investments of funds in a Pledged Account or Fund and all sales
of investments held in a Pledged Account or Fund shall, except as provided
below, be made by the Trustee in accordance with an Issuer Order. Subject to
compliance with the requirements of Section 3.03(b), such Issuer Order may
authorize the Trustee to make the specific investments set forth therein, to
make investments from time to time consistent with the general instructions set
forth therein, or to make specific investments pursuant to written or
telegraphic instructions of the employees or agents of the Issuer identified
therein, in each case in such amounts as such Issuer Order shall specify.
In the event that:
(i) the Issuer shall have failed to give written investment
directions to the Trustee by 10:00 A.M. New York City time on any
Business Day authorizing the Trustee to invest the funds then in a
Pledged Account or Fund;
(ii) a Default or Event of Default shall have occurred and be
continuing but the Bonds shall not have been declared due and payable
pursuant to Section 6.02, or if the Bonds shall have been declared due
and payable following an Event of Default, amounts collected or
receivable from the Trust Estate are being applied in accordance with
Section 6.04; or
(iii) an Event of Default shall have occurred and be
continuing, the Bonds shall have been declared due and payable pursuant
to Section 6.02, and amounts collected or receivable from the Trust
Estate are being applied in accordance with Section 6.07;
the Trustee shall invest and reinvest the funds then in each related Pledged
Account or Fund to the fullest extent practicable, in such manner as the Trustee
shall from time to time determine, but only in the Eligible Investment which is
a money market fund rated by the Rating Agency in its highest rating category.
If no such investment vehicle is available, the funds shall remain uninvested.
All investments made pursuant to clause (i) above shall mature on the next
Business Day following the date of such investment and all such investments made
pursuant to Clause (ii) above shall mature no later than the maturity date
therefor permitted by Section 3.03(b) or 3.09(d) and all investments made
pursuant to clause (iii) above shall mature no later than the first date
following the date of such investment on which the Trustee proposes to make a
distribution to Holders of Bonds.
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SECTION 3.05 REPORTS BY TRUSTEE TO BONDHOLDERS.
The Trustee shall prepare and deliver to the Issuer, the Rating Agency
and each Bondholder not later than one (1) Business Day following each Payment
Date, a statement (a "Payment Date Statement") with respect to such Payment Date
setting forth the following information:
(a) the Available Payment Amount on deposit in the Collateral
Proceeds Account and the Reserve Fund, itemizing (i) Servicer
Remittances received by the Trustee during the related Collection
Period, (ii) net liquidation proceeds related to Defaulted Student
Loans received during the related Collection Period, (iii) the
aggregate amount of reinvestment income earned on the Pledged Accounts
and received during the Collection Period, (iv) Interest Support
Payments withdrawn from the Interest Support Account and (v) amounts on
deposit in the Reserve Fund in excess of the Interest Reserve Amount;
(b) the aggregate amount of interest accrued during the
immediately preceding Interest Accrual Period on all Outstanding
Bonds;
(c) the aggregate amount of interest accrued during the
immediately preceding Interest Accrual Period on all Outstanding Class
A Bonds;
(d) the aggregate amount of interest accrued during the
immediately preceding Interest Accrual Period on all Outstanding Class
B Bonds;
(e) the aggregate amount of all payments then being made with
respect to the Bonds;
(f) the aggregate amount of all payments then being made with
respect to the Class A Bonds;
(g) the aggregate amount of all payments then being made with
respect to the Class B Bonds;
(h) the aggregate amount of all payments then being made with
respect to the Bonds which represents principal;
(i) the aggregate amount of all payments then being made with
respect to the Class A Bonds which represents principal;
(j) the aggregate amount of all payments then being made with
respect to the Class B Bonds which represents principal;
(k) the amount of any payment then being made with respect to
an Individual Bond;
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(l) the amount of the payment then being made with respect to
an Individual Bond which represents interest;
(m) the amount of the payment then being made with respect to
an Individual Bond which represents principal;
(n) the Current Principal Amount of an Individual Bond after
giving effect to any repayment of principal made on such date;
(o) the Aggregate Stated Principal Balance of all Student
Loans still subject to the lien of this Indenture;
(p) the Aggregate Current Principal Amount of Class A Bonds
after giving effect to the principal payments to be made on such
Payment Date;
(q) the Aggregate Current Principal Amount of Class B Bonds
after giving effect to the principal payments to be made on such
Payment Date; and
(r) the aggregate amount of Defaulted Student Loans, if any,
as of the related Payment Date;
provided, the Issuer shall cause the Servicer or the Administrator as the case
may be, to certify in writing to the Trustee the information in (a)(ii), (o) and
(r) above and the Trustee shall be entitled to rely conclusively on such
information for the purpose of preparing such Payment Date Statement.
In addition, the Issuer, to the extent required by applicable
law, shall prepare and file any and all tax returns, information statements or
other filings required to be delivered to any governmental taxing authority and
to Bondholders pursuant to any applicable law with respect to the Trust Estate
and the transactions contemplated hereby. The Trustee shall, to the extent
required by applicable law, execute the foregoing documents upon the Issuer's
request and return such documents to the Issuer.
SECTION 3.06 PLEDGED ACCOUNTS REPORTS BY TRUSTEE.
The Trustee shall prepare and deliver to the Issuer not later than the
tenth (10th) Business Day after the end of each calendar quarter, a report, with
respect to each Pledged Account securing the Bonds, setting forth the following
information:
(1) the balance in each Pledged Account at the beginning and end
of such calendar quarter;
(2) the cash and Eligible Investments held in each Pledged Account
at the end of such calendar quarter; and
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(3) the aggregate amount of reinvestment income with respect to
each Pledged Account received during such calendar quarter.
SECTION 3.07 COLLECTIONS OF THE STUDENT LOANS.
In order to facilitate the servicing of the Student Loans by the
Servicer of such Student Loans, the Servicing Agreement provides that the
Servicer shall retain, in accordance with the provisions of the Servicing
Agreement and this Indenture, all collections on such Student Loans prior to the
time they are deposited into the Collateral Proceeds Account or the Reserve
Fund. The Trustee hereby designates the Servicer as its agent and bailee to hold
such collections on such Student Loans until they are deposited into the
Collateral Proceeds Account or the Reserve Fund. By the designation pursuant to
this Section and the acceptance of such designation by the Servicer of a Student
Loan pursuant to the Servicing Agreement, the Trustee, as secured party, has
possession of all collections on the Student Loans for purposes of Section 9-305
of the Uniform Commercial Code as in effect in Massachusetts.
SECTION 3.08 AMENDMENTS TO SERVICING AGREEMENT.
The Trustee may, without the consent of any Bondholder, enter into or
consent to any amendment or supplement to the Servicing Agreement (including
without limitation any amendment providing for the appointment of a successor
Servicer) provided such amendment or supplement cannot reasonably be expected to
adversely affect the Bondholders. Such a consent shall not adversely affect the
Holders of the Bonds if there is delivered to the Trustee written notification
from the Rating Agency (which shall be obtained by the Trustee prior to any such
amendment providing for the appointment of a successor Servicer) to the effect
that such amendment or supplement will not result in any change in the current
rating assigned by the Rating Agency. The Trustee may, in its discretion,
decline to enter into or consent to any such supplement or amendment if its own
rights, duties or immunities shall be adversely affected.
SECTION 3.09 RESERVE FUND.
(a) The Trustee shall establish and maintain the Reserve Fund into
which the Trustee shall make such deposits, and from which the Trustee shall
make such withdrawals, as herein specified. The Reserve Fund shall be maintained
at the Corporate Trust Office as a segregated account clearly labeled as such.
All funds deposited from time to time in the Reserve Fund pursuant to this
Indenture shall be held by the Trustee as part of the Trust Estate on behalf of
the Bondholders and the Trustee as provided herein.
(b) On the Closing Date, the Trustee shall acquire from the proceeds of
the sale of the Bonds, pursuant to an Issuer Order, an Eligible Investment (that
is in the form of a U.S. Treasury security) in an amount such that it will
return payments of principal and interest so that the Interest Reserve Amount
for the Interest Accrual Period commencing on September 20, 2000 is available
from the proceeds of such Eligible Investment; provided such Issuer Order shall
specify the U.S. Treasury security to be acquired; provided further, that the
Issuer shall, from time to time, by Issuer Order, direct the Trustee as to which
new Eligible Investment should be
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disposed of or newly acquired for this purpose. Notwithstanding anything set
forth in Section 3.04 to the contrary, the Trustee shall deposit in the Reserve
Fund (pursuant to Issuer Order) the proceeds from the earnings on any sale of
Eligible Investments.
On each Payment Date, any shortfall in the Interest Reserve Amount for
the Interest Accrual Period commencing on such Payment Date shall be deposited
from funds in the Collateral Proceeds Account, pursuant to Section 3.03(c) or
from funds in the Interest Support Account, pursuant to Section 3.10.
(c) On any Payment Date, if the amount in the Collateral Proceeds
Account is not sufficient to pay interest due and unpaid on the Bonds, the
Trustee shall withdraw (to the amount of available funds) from the Reserve Fund
and deposit in the Collateral Proceeds Account an amount equal to the amount of
such shortfall. If after giving effect to all payments of interest of and
principal on the Bonds on a Payment Date, the Interest Reserve Amount equals or
exceeds the Aggregate Current Principal Amount of Outstanding Bonds, then all
the Bonds shall be immediately due and payable as set forth in the notice given
by the Trustee in writing to the Issuer and to all Bondholders pursuant to
Section 3.02(b).
(d) After September 20, 2000, so long as no Default or Event of
Default shall have occurred and be continuing, all amounts in the Reserve Fund
shall be invested and reinvested by the Trustee in one or more Eligible
Investments pursuant to an Issuer Order. Such investments are subject to the
following restrictions:
(i) except as permitted by clause (ii) below, no investment of
any amount held in the Reserve Fund may mature later than the Business
Day immediately preceding the next Payment Date; and
(ii) any investment (including repurchase agreements) in which
State Street Bank and Trust Company, in either its commercial or trust
capacity, is the obligor, may mature on a Payment Date if, under
Section 3.03 such investment could otherwise mature on the Business Day
immediately preceding such Payment Date.
All income or other gains from investment of funds deposited in the
Reserve Fund shall be deposited by the Trustee in the Reserve Fund immediately
upon receipt, and any loss resulting from such investment shall be charged to
the Reserve Fund, and the Trustee shall not be responsible in any way for such
loss on any investment made pursuant to this Indenture.
SECTION 3.10 INTEREST SUPPORT ACCOUNT.
(a) The Trustee shall establish and maintain the Interest Support
Account into which the Trustee shall make such deposits, and from which the
Trustee shall make such withdrawals, as herein specified. The Interest Support
Account shall be maintained at the Corporate Trust Office as a segregated
account clearly labeled as such. All funds deposited from time to time in the
Interest Support Account pursuant to this Indenture shall be held by the Trustee
as part of the Trust Estate on behalf of the Bondholders and the Trustee as
provided herein.
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(b) On the Closing Date, the Trustee shall acquire from the proceeds of
the sale of the Bonds, pursuant to an Issuer Order, a portfolio of Eligible
Investments (that are in the form of U.S. Treasury securities with varying
maturities) in an amount such that it will return payments of principal and
interest so that on each Interest Payment Date during the Interest Support
Period, the applicable Interest Support Payment for such Payment Date is
available from the proceeds of such Eligible Investments; provided, that such
Issuer Order shall specify the U.S. Treasury securities to be acquired; provided
further, that the Issuer shall, from time to time, by Issuer Order, direct the
Trustee as to which Eligible Investments should be disposed of or newly acquired
for this purpose. Notwithstanding anything set forth in Section 3.04 to the
contrary, the Trustee shall deposit in the Interest Support Account (pursuant to
an Issuer Order) the proceeds from the earnings on any sale of Eligible
Investments.
(c) On each Interest Payment Date during the Interest Support Period,
the Trustee shall withdraw from the Interest Support Account and deposit in the
Collateral Proceeds Account the Interest Support Payment, for such Payment Date.
Thereafter, if there is a shortfall in the payment of interest on the Bonds or
in the Interest Reserve Amount on any Payment Date, after application of funds
in the Collateral Proceeds Account pursuant to Section 3.03(c) on such Payment
Date, the Trustee shall withdraw the amount of such shortfall from funds in the
Interest Support Account, if any, and deposit such amount in the Collateral
Proceeds Account or the Reserve Fund, as applicable. On September 20, 2003, the
Trustee shall deposit in the Collateral Proceeds Account any remaining funds on
deposit in the Interest Support Account.
SECTION 3.11 COST OF ISSUANCE ACCOUNT.
(a) The Trustee shall establish and maintain the Cost of
Issuance Account into which the Trustee shall make such deposits, and from which
the Trustee shall make such withdrawals, as herein specified. The Cost of
Issuance Account shall be maintained at the Corporate Trust Office as a
segregated account clearly labeled as such.
(b) On the Closing Date, the Cost of Issuance Amount shall be
deposited in the Cost of Issuance Account from the proceeds of the sale of the
Bonds.
(c) Promptly after the Closing Date, amounts in the Cost of
Issuance Account shall be withdrawn and used by the Trustee in accordance with
this Section 3.11 for the purpose of paying Costs of Issuance. Costs of Issuance
shall be paid by the Trustee upon receipt of an Issuer Order, which shall direct
the payment to designated payees in designated amounts for stated services and
certify that such payment is a proper charge against the Cost of Issuance
Account therein and is then due and owing for services rendered or expenses
incurred. Any amounts remaining therein upon payment of all Costs of Issuance
shall be deposited in the Collateral Proceeds Account upon receipt by the
Trustee of an Officers' Certificate of the Issuer stating that such moneys are
no longer needed for the payment of Costs of Issuance.
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ARTICLE IV
SECURITY FOR THE BONDS
SECTION 4.01 GRANT OF TRUST ESTATE.
To secure the payment of principal of and interest on the Bonds in
accordance with their terms, the payment of all other sums payable hereunder and
the performance of all of the Issuer's covenants and agreements in this
Indenture, the Issuer hereby Grants to the Trustee without recourse, in trust
and as collateral security, for the exclusive benefit of the Holders of the
Bonds (and the Trustee, to the extent provided herein) a security interest in
and to the following (collectively, the "Trust Estate" or the "Collateral"):
(a) all of the Issuer's right, title and interest in and to, and all
benefits accruing from, the Student Loans identified on Schedule I hereto, and
all payments made thereon, together with the related Loan Documents;
(b) the Collateral Proceeds Account (including all income from
investment of funds therein);
(c) the Reserve Fund (including all income from investment of funds
therein);
(d) the Interest Support Account (including all income from investment
of funds therein);
(e) the Issuer's rights under the Servicing Agreement;
(f) the Issuer's rights under any Origination Agreement;
(g) the Issuer's rights under the Administration Agreement;
(h) the Issuer's rights under any other agreements in connection
herewith; and
(i) all proceeds of each of the foregoing items of Collateral
(including without limitation, all cash proceeds, accounts, accounts receivable,
notes, drafts, acceptances, chattel paper, checks, deposit accounts, rights to
payment of any and every kind, and other forms of obligations or receivables
that at any time constitute any or all of the proceeds of the foregoing).
The Trustee acknowledges such Grant without notice of any prior or
competing interest in the Collateral, accepts the trusts hereunder in accordance
with the provisions of this Indenture and agrees to perform the duties required
by this Indenture.
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SECTION 4.02 DOCUMENTS DELIVERED TO TRUSTEE.
To effect the Grant of the Student Loans constituting a portion of the
Trust Estate, the Issuer has delivered and released to the Servicer pursuant to
the Custodial Agreement, as agent for Trustee, the original Loan Documents as
required by the Custodial Agreement for each Student Loan comprising the Student
Loan Collateral.
The Servicer shall certify its receipt to the Trustee and the Issuer of
all such Loan Documents required to be delivered pursuant to the Custodial
Agreement, as evidenced by the trust receipt of the Custodian in the form
annexed to the Custodial Agreement.
SECTION 4.03 ACCEPTANCE BY TRUSTEE.
The Trustee acknowledges receipt of the documents described in Section
4.02 hereof by the Servicer, on behalf of the Trustee, and declares that the
Servicer holds and will hold the Collateral on behalf of the Trustee in trust,
upon the trusts set forth herein, for the use and benefit of all present and
future Holders of Bonds as provided in this Indenture.
SECTION 4.04 LIMITED WITHDRAWAL AND SUBSTITUTION OF COLLATERAL.
During the 60 day period following the Closing Date, the Issuer, at its
option, upon Issuer Order delivered to the Trustee, may withdraw Student Loans
having an aggregate original Stated Principal Balance up to five percent (5%) of
the aggregate Stated Principal Balance of the Student Loans identified on
Schedule I hereto.
(A) Student Loans shall be released from the lien of this Indenture, if
the Issuer:
(1) deposits with the Trustee, on or before the date of
withdrawal, cash, together with an Issuer Order
directing the Trustee to deposit such cash in the
Collateral Proceeds Account, and/or additional
Student Loans having the same terms, including
interest rates, as the Student Loans being withdrawn,
and
(2) certifies to the Trustee that either:
(a) the aggregate Stated Principal Balance of
the Student Loans being deposited is at
least equal to the aggregate Stated
Principal Balance of the Student Loans being
withdrawn or
(b) to the extent that cash is substituted in
whole or in part for such Student Loans, the
amount of cash being deposited is at least
equal to the aggregate Stated Principal
Balance of the Student Loans being withdrawn
minus
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(i) the aggregate Stated Principal
Balance of the Student Loans
being deposited, if any (such
difference, the "Net Loans
Withdrawn"),
(ii) the amount derived by dividing the
excess of the aggregate Stated
Principal Balance of the Student
Loans at the Closing Date over the
Aggregate Current Principal Amount
of the Bonds by the Aggregate
Current Principal Amount of the
Bonds, multiplied by the Net Loans
Withdrawn,
(iii) the amount derived by dividing the
Net Loans Withdrawn by the aggregate
Stated Principal Balance of the
Student Loans in the Trust Estate
prior to any withdrawal being made
therefrom, multiplied by the then
current balance of the Reserve Fund,
and
(iv) the amount equal to that portion of
the Interest Support Account which
represents the Interest Support
Payments related to the Net Loans
Withdrawn;
(B) Notwithstanding Subclause (A), no withdrawal or substitution
of Student Loans pursuant to this Section 4.04 having an
aggregate Stated Principal Balance in excess of one percent
(1%) of the aggregate Stated Principal Balance of the Student
Loans identified on Schedule I hereto shall be permitted until
the Rating Agency shall have confirmed in writing that such
withdrawal or substitution will not result in a reduction in
or withdrawal of the then current rating of the Bonds.
(C) Prior to any withdrawal or substitution of Collateral pursuant
to this Section 4.04, the Issuer shall provide an Opinion of
Counsel that complies with TIA ss.314(d)(1), if required.
SECTION 4.05 RELEASE OF TRUST ESTATE.
(a) Subject to the payment of its fees and expenses pursuant to Section
7.07 and upon receipt of an Issuer Order directing the Trustee to do so, 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, including
Sections 4.04, 5.03 and 6.16 hereof. No party relying upon an instrument
executed by the Trustee as provided in this Article IV shall be bound to
ascertain the Trustee's authority, inquire into the satisfaction of any
conditions precedent or supervise the application of any funds.
(b) The Trustee shall, at such time as there are no Bonds Outstanding
and all amounts due the Trustee pursuant to Section 7.07 have been paid, release
any remaining portion of the Trust Estate that secured the Bonds from the lien
of this Indenture and release to the Issuer or
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any other Person entitled thereto any funds then on deposit in the Collateral
Proceeds Account and the Reserve Fund. The Trustee shall release property from
the lien of this Indenture pursuant to this Section 4.05(b) only upon receipt of
an Issuer Request accompanied by an Officers' Certificate of the Issuer, an
Opinion of Counsel and (if required by the TIA) an Independent certificate in
accordance with TIA ss.ss. 314(c) and 314(d)(1).
SECTION 4.06 OPINION OF COUNSEL.
The Trustee shall receive at least seven days' notice when requested by
the Issuer to take any action pursuant to Section 4.05(a), accompanied by copies
of any instruments involved, and the Trustee shall also require, as a condition
to such action, an Opinion of Counsel, in form and substance satisfactory to the
Trustee, stating the legal effect of any such action, outlining the steps
required to complete the same, and concluding that all conditions precedent to
the taking of such action have been complied with and such action will not
materially and adversely impair the security for the Bonds or the rights of the
Bondholders in contravention of the provisions of this Indenture; provided,
however, that such Opinion of Counsel shall not be required to express an
opinion as to the fair value of the Trust Estate. Counsel rendering any such
opinion may rely, without independent investigation, on the accuracy and
validity of any certificate or other instrument delivered to the Trustee in
connection with any such action.
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ARTICLE V
SATISFACTION AND DISCHARGE
SECTION 5.01 SATISFACTION AND DISCHARGE OF INDENTURE.
Whenever the following conditions shall have been satisfied:
(1) either:
(A) all Bonds theretofore authenticated and delivered (other
than (i) Bonds that have been destroyed, lost, stolen or mutilated and
surrendered to the Trustee and that have been replaced or paid as
provided in Section 2.06, and (ii) Bonds for whose payment money has
theretofore been deposited in trust thereafter repaid to the Issuer, as
provided in Section 9.02) have been delivered to the Trustee for
cancellation; or
(B) all Bonds not theretofore delivered to the Trustee for
cancellation:
(i) have become due and payable; or
(ii) will become due and payable at the Stated Maturity
within one year; or
(iii) are to be called for redemption within one year under
irrevocable arrangements satisfactory to the Trustee for the giving of
notice of redemption by the Trustee in the name, and at the expense, of
the Issuer;
and the Issuer, in the case of clauses (i), (ii) or (iii) above, has
deposited or caused to be deposited with the Trustee, in trust for such
purpose, an amount sufficient to pay and discharge the entire
indebtedness on such Bonds not theretofore delivered to the Trustee for
cancellation, for principal and interest through and including the
Business Day preceding such applicable Payment Date, the date of
acceleration if the Bonds shall have been declared immediately due and
payable, or the Business Day preceding the date of the Stated Maturity;
(2) the Issuer has paid or caused to be paid all other
amounts payable hereunder by the Issuer; and
(3) the Issuer has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel each stating that all conditions
precedent herein providing for the satisfaction and discharge of this
Indenture have been complied with;
then, upon Issuer Request, this Indenture and the lien, rights and interests
created hereby shall cease to be of further effect, and the Trustee and each
co-trustee and separate trustee, if any, then acting as such hereunder shall, at
the expense of the Issuer, execute and deliver all such
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instruments as may be necessary to acknowledge the satisfaction and discharge of
this Indenture and shall pay, or assign or transfer and deliver, to the Issuer
or, upon Issuer Order, its assignee, all cash, securities and other property
held by it as part of the Trust Estate remaining after satisfaction of the
conditions set forth in clauses (1) and (2) above.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Issuer to the Trustee under Section 7.07, the obligations of
the Trustee to the Issuer and to the Holders of Bonds under Section 9.02, the
obligations of the Trustee to the Holders of Bonds under Section 5.02, the
rights, privileges and immunities of the Trustee pursuant to Article VII and the
provisions of Article II with respect to lost, stolen, destroyed or mutilated
Bonds, registration or transfers of Bonds, and rights to receive payments of
principal of and interest on the Bonds shall survive.
SECTION 5.02 APPLICATION OF TRUST MONEY.
All money deposited with the Trustee pursuant to Sections 5.01 and 9.02
shall be held in trust and applied by it, in accordance with the provisions of
the Bonds and this Indenture, to the payment of the principal and interest,
either directly or through any Paying Agent, as the Trustee may determine, to
the Persons entitled thereto, for whose payment such money has been deposited
with the Trustee.
SECTION 5.03 TRUSTEE'S AUTHORITY; RELEASE OF PREPAID STUDENT LOANS.
(a) 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 funds.
(b) Upon the request of the Servicer accompanied by an Officer's
Certificate and such documents as required by the Servicing Agreement, as
certified to the Trustee in such Officer's Certificate, to the effect that a
Student Loan has been the subject of a Full Prepayment so as to become a prepaid
Student Loan and certifying that the unpaid principal balance of and accrued
interest at the Note Rate on such Student Loan has been deposited or remitted in
accordance with the Servicing Agreement, the Trustee shall release from the lien
of this Indenture such Student Loan including the related Loan Documents to the
Servicer or its designees or assigns in accordance with the instructions of the
Servicer.
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ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.01 EVENT OF DEFAULT.
"Event of Default", wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(1) if the Issuer shall:
(A) default in the payment of principal of any Bond at
Stated Maturity;
(B) default in the payment of interest on any Bond and such
Default or failure shall continue for a period of one Business Day; or
(C) default in the payment of the Redemption Price of any Bond
that has been called for redemption pursuant to Article XI, and such
Default or failure shall continue for a period of five days;
(2) if the Issuer shall breach or default in the due
observance or performance of, any covenant or warranty of the Issuer in
this Indenture (other than a covenant or warranty of the Issuer that is
specifically addressed elsewhere in this Section or in Article IX), and
such Default shall continue for a period of 30 days after there shall
have been given, by first class mail or overnight courier service, to
the Issuer by the Trustee or to the Issuer and the Trustee by the
Holders of the Bonds, representing at least 25% of the Aggregate
Current Principal Amount of the Outstanding Bonds, a written notice
specifying such Default or breach and requiring it to be remedied and
stating that such notice is a "Notice of Default" hereunder;
(3) the entry of a decree or order by a court having
jurisdiction in the premises adjudging the Issuer a bankrupt or
insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of or in respect
of the Issuer under the Federal Bankruptcy Code or any other applicable
federal or state law, or appointing a receiver, liquidator, assignee,
or sequestrator (or other similar official) of the Issuer or of any
substantial part of its property, or ordering the winding up or
liquidation of the affairs of the Issuer and the continuance of any
such decree or order unstayed and in effect for a period of 90
consecutive days; or
(4) the commencement by the Issuer of proceedings to be
adjudicated as bankrupt or insolvent, or the consent by it to the
institution of bankruptcy or insolvency proceedings against it, or the
filing by it of a petition or answer or consent seeking
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reorganization or similar relief under the Federal Bankruptcy Code or
any other similar applicable federal or state law, or the consent by
the Issuer to the filing of any such petition or to the appointment of
a receiver, liquidator, assignee, trustee, or sequestrator (or other
similar official) of the Issuer or of any substantial part of its
property, or the making by the Issuer of an assignment for the benefit
of creditors, or the admission in writing by the Issuer of its
inability to pay its debts generally as such debts become due, or the
taking of corporate action by the Issuer in furtherance of any of the
foregoing.
SECTION 6.02 ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default occurs and is continuing, then and in every such
case as the Trustee or the Bondholders representing not less than 66 2/3% (if
the Event of Default is under Section 6.01(1)) and not less than 100% (if the
Event of Default is under Section 6.01(2), (3) or (4)) of the Aggregate Current
Principal Amount of the Outstanding Bonds may declare all the Bonds to be
immediately due and payable, by a notice in writing to the Issuer (and to the
Trustee if given by Bondholders), and upon any such declaration such Bonds, in
an amount equal to the Aggregate Current Principal Amount of Bonds, together
with accrued and unpaid interest thereon to the Business Day preceding the date
of such acceleration, shall become immediately due and payable.
At any time after such a declaration of acceleration of maturity of the
Bonds has been made and before a judgment or decree for payment of the money due
has been obtained by the Trustee as hereinafter provided in this Article,
Bondholders representing not less than 66 2/3% of the Aggregate Current
Principal Amount of the Outstanding Bonds, by written notice to the Issuer and
the Trustee, may rescind and annul such declaration and its consequences if:
(1) the Issuer has paid or deposited with the Trustee a sum
sufficient to pay:
(A) all payments of principal of, and interest on, all Bonds
and all other amounts that would then be due hereunder or upon such
Bonds if the Event of Default giving rise to such acceleration had not
occurred; and
(B) all sums paid by the Trustee hereunder and the reasonable
compensation, expenses and disbursements of the Trustee, its agents and
counsel;
(2) all Events of Default, other than the nonpayment of the
principal of or interest on Bonds that have become due solely by such
acceleration, have been cured or waived as provided in Section 6.13.
No such rescission shall effect any subsequent Default or impair any right in
connection therewith.
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SECTION 6.03 REMEDIES.
If an Event of Default shall have occurred and be continuing, the
Trustee may do one or more of the following:
(a) institute Proceedings for the collection of all amounts
then payable on the Bonds or under this Indenture, whether by
declaration or otherwise, enforce any judgment obtained, and collect
from the Trust Estate securing the Bonds and from the Issuer amounts
adjudged due;
(b) sell the Trust Estate securing the Bonds or any portion
thereof or rights or interest therein, at one or more public or private
Sales called and conducted in any manner permitted by law;
(c) institute Proceedings from time to time for the complete
or partial foreclosure of this Indenture with respect to the Trust
Estate securing the Bonds; and
(d) exercise any remedies of a secured party under the Uniform
Commercial Code and take any other appropriate action to protect and
enforce the rights and remedies of the Trustee or the Holders of the
Bonds hereunder;
provided, however, that unless a declaration of acceleration has been made in
accordance with Section 6.02, notwithstanding subsection 3.10(c), the Trustee
may not sell or otherwise liquidate the Trust Estate securing the Bonds.
SECTION 6.04 PRESERVATION OF TRUST ESTATE.
If an Event of Default shall have occurred and be continuing and no
Bonds have been declared due and payable or such declaration and its
consequences are rescinded and annulled, the Trustee may retain possession of
the Trust Estate securing the Bonds intact, collect or cause the collection of
the proceeds thereof and make and apply all payments and deposits and maintain
all accounts in respect of such Bonds in accordance with the provisions of
Article III.
SECTION 6.05 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 Bonds
or relative to the creditors or property of the Issuer or of such other obligor,
the Trustee (regardless of whether the Bonds shall then be due and payable as
therein expressed or by declaration or otherwise and regardless of whether the
Trustee shall have made any demand on the Issuer for the payment of any overdue
principal or interest) shall be entitled and empowered, by intervention in such
Proceeding or otherwise, to
(a) file and prove a claim for the whole amount of principal
and interest owing and unpaid in respect of the Bonds and to file such
other papers or documents as may
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be necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel and
any claim for reimbursement of all expenses and advances and, except as
a result of Trustee's negligence or bad faith, liabilities incurred and
all advances made by the Trustee) and of the Bondholders allowed in
such Proceeding;
(b) unless prohibited by applicable law and regulations, to
vote on behalf of the Holders of the Bonds in any election of a trustee
or a standby trustee in arrangement, reorganization, liquidation or
other bankruptcy or insolvency Proceedings or person performing similar
functions in comparable proceedings and be a member of a committee of
creditors on behalf of the Bondholders; and
(c) collect and receive any funds or other property payable or
deliverable on any such claims and to distribute the same; and any
receiver, assignee, trustee, liquidator, custodian, or sequestrator (or
other similar official) in any such Proceeding is hereby authorized by
each Bondholder to make such payments to the Trustee, and in the event
that the Trustee shall consent to the making of such payments directly
to the Bondholders, to pay to the Trustee any amount due to it for the
reasonable compensation, expenses and disbursements of the Trustee, its
agents and counsel, any and all other expenses and, except as a result
of the Trustee's negligence or bad faith, liabilities incurred by the
Trustee and any other amounts due the Trustee under Section 7.07.
Amounts payable to the Trustee under this Section are intended to
constitute administrative expenses. Nothing herein contained shall be deemed to
authorize the Trustee to authorize or consent to or accept or adopt on behalf of
any Bondholder any plan of reorganization, arrangement, adjustment, or
composition affecting any of the Bonds or the rights of any Holder thereof, or
to authorize the Trustee to vote in respect of the claim of any Bondholder in
any such Proceeding except to vote for election of a trustee in bankruptcy or
similar party as provided herein.
SECTION 6.06 TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF BONDS.
All rights of action and claims under this Indenture or any of the
Bonds may be prosecuted and enforced by the Trustee without the possession of
any of the Bonds or the production thereof in any Proceeding relating thereto.
Any such Proceedings instituted by the Trustee (and also any Proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party) shall be brought in its own name as trustee of an
express trust, and any recovery of judgment shall be for the ratable benefit of
the Holders of the Bonds in respect of which such judgment has been recovered
and, in accordance with Section 6.07, for the payment of the compensation and
reasonable expenses, disbursements and advances of the Trustee, its agents and
counsel.
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SECTION 6.07 APPLICATION OF MONEY COLLECTED.
Except as provided in Section 6.04, if applicable, any money collected
by the Trustee pursuant to this Article or otherwise and any funds that may then
be held or thereafter received by the Trustee as security shall be applied in
the following order, at the date or dates fixed by the Trustee and, in case of
the distribution of such money on account of principal or interest, upon
presentation of the Bonds and the notation thereon of such payment if only
partially paid and upon surrender thereof if fully paid:
FIRST: To reimbursement of the Trustee for all expenses
associated with the disposition of the Collateral or other
remedies;
SECOND: To the payment of any accrued and unpaid interest on
the Class A Bonds at the related Bond Interest Rate;
THIRD: To the payment of any unpaid interest on the Class B
Bonds at the related Bond Interest Rate;
FOURTH: To the payment of the Aggregate Current Principal
Amount of the Class A Bonds;
FIFTH: To the payment of the Aggregate Current Principal
Amount of the Class B Bonds;
SIXTH: To the payment of all amounts due the Trustee under
Section 7.07;
SEVENTH: To the payment of any unpaid amount due any
Accountants for services rendered pursuant to Section 9.12
hereof or otherwise under this Indenture;
EIGHTH: To the Owner Trustee for amounts owed to the Owner
Trustee; and
NINTH: To the Administrator or any other person legally
entitled thereto, any remaining funds.
SECTION 6.08 LIMITATION ON SUITS.
No Holder of a Bond shall have any right to institute any Proceedings,
judicial or otherwise, with respect to this Indenture, or for the appointment of
a receiver or trustee, or for any other remedy hereunder, unless:
(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default;
(2) the Holders of Bonds representing not less than 25% of the
Aggregate Current Principal Amount of the Outstanding Bonds shall have
made written request to
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the Trustee to institute Proceedings in respect of such Event of
Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
Proceeding; and
(5) no direction inconsistent with such written request has
been given to the Trustee during such 60-day period by the Holders of
Bonds representing not less than 66 2/3% of the Aggregate Current
Principal Amount of the Outstanding Bonds;
it being understood and intended that no one or more Holders of Bonds shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other
Holders of Bonds or to obtain or to seek to obtain priority or preference over
any other Holders or to enforce any right under this Indenture, except in the
manner herein provided and for the equal and ratable benefit of all of the
Holders of Bonds.
SECTION 6.09 RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Bondholder has instituted any Proceeding to
enforce any right or remedy under this Indenture and such Proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Bondholder, then and in every such case the Issuer, the
Trustee and the Bondholders shall, subject to any determination in such
Proceeding, be restored severally and respectively to their former positions
hereunder, and thereafter all rights and remedies of the Trustee and the
Bondholders shall continue as though no such Proceeding had been instituted.
SECTION 6.10 RIGHTS AND REMEDIES CUMULATIVE.
No right or remedy herein conferred upon or reserved to the Trustee or
to the Bondholders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 6.11 DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any Holder of any Bond to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such right or remedy accruing
upon any Event of Default or an acquiescence in or waiver of the Event of
Default. Every right and remedy given by this Article
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or by law to the Trustee or to the Bondholders may be exercised from time to
time, and as often as may be deemed expedient, by the Trustee or by the
Bondholders, as the case may be.
SECTION 6.12 CONTROL BY BONDHOLDERS.
The Holders of Bonds representing not less than 66 2/3% of the
Aggregate Current Principal Amount of the Outstanding Bonds shall have the right
to direct the time, method and place of conducting any Proceeding for any remedy
available to the Trustee or exercising any trust or power conferred on the
Trustee; provided that:
(1) such direction shall not be in conflict with any
applicable rule of law or with this Indenture; and
(2) the Trustee may take any other action deemed proper by the
Trustee that is not inconsistent with such direction; provided,
however, that, subject to Section 7.01, the Trustee need not take any
action that it determines might involve it in liability or be unjustly
prejudicial to the Bondholders not consenting.
SECTION 6.13 WAIVER OF PAST DEFAULTS.
The Holders of Bonds representing more than 66 2/3% of the Aggregate
Current Principal Amount of the Outstanding Bonds may on behalf of the Holders
of all the Bonds waive any past Default hereunder and its consequences, except a
Default:
(1) in the payment of any principal of or interest on any
Bond, or in the payment of the Redemption Price of any Bond that has
been called for redemption pursuant to Article XI; or
(2) in respect of a covenant or provision hereof that under
Section 10.02 cannot be modified or amended without the consent of the
Holder of each Outstanding Bond.
Upon any such waiver, such Default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereon.
SECTION 6.14 UNDERTAKING FOR COSTS.
All parties to this Indenture agree, and each Holder of any Bond by his
acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may in
its discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by
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such party litigant; but the provisions of this Section shall not apply to any
suit instituted by the Trustee, to any suit instituted by any Bondholder, or
group of Bondholders, holding in the aggregate Bonds representing more than 10%
of the Aggregate Current Principal Amount of the Outstanding Bonds, or to any
suit instituted by any Bondholder for the enforcement of the payment of any
installment of interest on any Bond on or after the related Interest Payment
Date expressed in such Bond or for the enforcement of the payment of principal
on such Bond (or, in the case of any Bond called for redemption, on or after the
applicable redemption date) in accordance with the terms thereof.
SECTION 6.15 WAIVER OF STAY OR EXTENSION LAWS.
The Issuer covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants in, or the
performance of, this Indenture; and the Issuer (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
SECTION 6.16 SALE OF TRUST ESTATE.
(a) The power to effect any sale (a "Sale") of any portion of the Trust
Estate pursuant to Section 6.03 shall not be exhausted by any one or more Sales
as to any portion of such Trust Estate remaining unsold, but shall continue
unimpaired until the entire Trust Estate securing the Bonds shall have been sold
or all amounts payable on the Bonds shall have been paid. The Trustee may from
time to time postpone any Sale by public announcement made at the time and place
of such Sale. The Trustee hereby expressly waives its right to any amount fixed
by law as compensation for any Sale.
(b) The Trustee may, on behalf of the Bondholders, bid for and acquire
any portion of the Trust Estate in connection with a public Sale thereof, and
may pay all or part of the purchase price by crediting against amounts owing on
the Bonds or other amounts secured by this Indenture, all or part of the net
proceeds of such Sale after deducting the costs, charges and expenses incurred
by the Trustee in connection with such Sale. The Bonds need not be produced in
order to complete any such Sale, or in order for the net proceeds of such Sale
to be credited against amounts owing on the Bonds. The Trustee may hold, lease,
operate, manage or otherwise deal with any property so acquired in any manner
permitted by law.
(c) The Trustee shall execute and deliver an appropriate instrument of
conveyance transferring its interest in any portion of the Trust Estate in
connection with a Sale thereof. In addition, the Trustee is hereby irrevocably
appointed the agent and attorney-in-fact of the Issuer to transfer and convey
its interest in any portion of the Trust Estate in connection with a Sale
thereof, and to take all action necessary to effect such Sale. No purchaser or
transferee at such
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a Sale shall be bound to ascertain the Trustee's authority, inquire into the
satisfaction of any conditions precedent or see to the application of any funds.
SECTION 6.17 ACTION ON BONDS.
The Trustee's right to seek and recover judgment on the Bonds or under
this Indenture shall not be affected by the seeking, obtaining or application of
any other relief under or with respect to this Indenture. Neither the lien of
this Indenture nor any rights or remedies of the Trustee or the Holders of Bonds
shall be impaired by the recovery of any judgment by the Trustee against the
Issuer or by the levy of any execution under such judgment upon any portion of
the Trust Estate or upon any of the assets of the Issuer.
SECTION 6.18 NO RECOURSE TO ISSUER.
In the event of a Default, the Holders of the Bonds shall have no
recourse to the Issuer, except to the assets of the Issuer included in the Trust
Estate. The Trust Estate granted to the Trustee hereunder shall serve as
collateral security only for the Bonds and other obligations of the Issuer
hereunder, in the priority and to the extent set forth herein.
In addition, the Owner Trustee is entering into this Indenture solely
as owner trustee under the Trust Agreement and not in its individual capacity
and in no case whatsoever shall the Trust Company or the Owner Participants be
personally liable on, or for any loss in respect of, any of the statements,
representations, warranties, agreements or obligations of the Issuer or the
Owner Trustee hereunder as to all of which the parties hereto agree to look
solely to the assets of the Issuer.
SECTION 6.19 UNCONDITIONAL RIGHTS OF BONDHOLDERS TO RECEIVE PRINCIPAL
AND INTEREST.
Notwithstanding any other provision in this Indenture, other than the
provisions hereof limiting the right to recover amounts due on the Bonds to
recoveries from the property of the Trust Estate, the Holder of any Bond shall
have the right, to the extent permitted by applicable law, which right is
absolute and unconditional except to the extent restricted by applicable law,
(i) to receive payments of interest on such Bond on each Interest Payment Date,
(ii) to receive payments of principal on such Bond at Stated Maturity (or, in
the case of any Bond called for redemption, on or after the date fixed for such
redemption) and (iii) to institute suit for the enforcement of any such payment,
and such right shall not be impaired without the consent of such Holder;
provided, however, no Holder of a Bond shall have any right to institute any
such suit, if and to the extent that the institution or prosecution thereof or
the entry of a judgment therein would, under applicable law, result in the
surrender, impairment, waiver or lien of this Indenture upon the Trust Estate.
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ARTICLE VII
THE TRUSTEE
SECTION 7.01 DUTIES OF TRUSTEE.
(a) Except during the continuance of an Event of Default:
(1) The Trustee undertakes to perform such duties as are
specifically set forth in this Indenture, and no implied covenants or
obligations of the Trustee shall be read into this Indenture; and
(2) 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. The Trustee shall, however, examine such certificates
and opinions to determine whether they conform to the requirements of
this Indenture.
(b) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in their exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that:
(1) This Subsection shall not be construed to limit the effect
of Subsections (a) and (b) of this Section;
(2) The Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it is proved that a
Responsible Officer was negligent in ascertaining the pertinent facts;
(3) The Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
of the Holders of Bonds representing not less than 66 2/3% of the
Aggregate Current Principal Amount of the Outstanding Bonds 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; and
(4) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in the
exercise of any of its rights or powers, if it shall have
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reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably
assured to it. In determining that such repayment or indemnity is not
reasonably assured to it, the Trustee must consider not only the
likelihood of repayment or indemnity by or on behalf of the Issuer but
also the likelihood of repayment or indemnity from amounts payable to
it from the applicable Trust Estate pursuant to Sections 7.07 and
9.01(d).
SECTION 7.02 NOTICE OF DEFAULT.
Within 30 days after the occurrence of any Default, the Trustee shall
transmit by mail to all Holders of Bonds, as their names and addresses appear on
the Bond Register, notice of such Default hereunder known to a Responsible
Officer of the Trustee, unless such Default shall have been cured or waived;
provided, that, except in the case of a Default in the payment of the principal
of or interest on any Bond, the Trustee shall be protected in withholding such
notice if and so long as the board of directors, the executive committee or a
trust committee of directors and/or Responsible Officers of the Trustee in good
faith determine that the withholding of such notice is in the interests of the
Holders of the Bonds; provided, further, that in the case of any Default of the
character specified in Section 6.01(3) or 6.01(4) no such notice to Bondholders
shall be given until at least 60 days after the occurrence thereof.
SECTION 7.03 CERTAIN RIGHTS OF TRUSTEE.
Except as otherwise provided in Section 7.01:
(a) the Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, note or other paper or
document believed by it to be genuine and to have been signed or presented by
the proper party or parties;
(b) any request or direction of the Issuer mentioned herein shall be
sufficiently evidenced by an Issuer Request or Issuer Order;
(c) whenever in the administration of this Indenture the Trustee shall
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 required) may, in the absence of bad faith on its part,
rely upon an Officer's Certificate;
(d) as a condition to the taking, suffering or omitting of any action
by it hereunder, the Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon; and
(e) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not
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be responsible for any misconduct or negligence on the part of any agent or
attorney appointed with due care by it hereunder.
SECTION 7.04 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF BONDS.
The recitals contained herein and in the Bonds, except the certificates
of authentication on the Bonds, shall be taken as the statements of the Issuer,
and the Trustee assumes no responsibility for their correctness. The Trustee
makes no representations with respect to the Trust Estate or as to the validity
or sufficiency of this Indenture, the Trust Estate or the Bonds. The Trustee
shall not be accountable for the use or application by the Issuer or the Owner
Trustee of Bonds or the proceeds thereof or any money paid to the Issuer or the
Owner Trustee or upon Issuer Order pursuant to the provisions hereof.
SECTION 7.05 MAY HOLD BONDS.
The Trustee, any Agent, the Administrator or any other agent of the
Issuer, in its individual or any other capacity, may become the owner or pledgee
of Bonds and, subject to Sections 7.08 and 7.13, may otherwise deal with the
Issuer or any Affiliate of the Issuer with the same rights it would have if it
were not Trustee, Agent, Administrator or such other agent.
SECTION 7.06 MONEY HELD IN TRUST.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by this Indenture or by
applicable law. The Trustee shall be under no liability for interest on any
money received by it hereunder except as otherwise agreed with the Issuer and
except to the extent of income or other gain on investments that are obligations
of State Street Bank and Trust Company in either its commercial or trust
capacity hereunder.
SECTION 7.07 COMPENSATION AND REIMBURSEMENT.
(a) The Issuer agrees:
(1) to pay or to cause the Administrator to pay the Trustee
from time to time reasonable compensation for all services rendered by
it hereunder (which compensation shall not be limited by any provision
of law in regard to the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to
reimburse or to cause the Administrator to reimburse the Trustee upon
its request for all reasonable expenses, disbursements and advances
incurred or made by the Trustee in accordance with any provision of
this Indenture (including the reasonable compensation and the expenses
and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence,
willful misconduct or bad faith; and
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(3) to indemnify or to cause the Administrator to indemnify
the Trustee for, and to hold it harmless against, any loss, liability
or expense incurred without negligence, wilful misconduct or bad faith
on its part, arising out of, or in connection with, the acceptance or
administration of this trust, including the costs and expenses of
defending itself against any claim in connection with the exercise or
performance of any of its powers or duties hereunder, provided that:
(i) with respect to any such claim, the Trustee shall
have given the Issuer and the Administrator written notice
thereof promptly after a Responsible Officer of the Trustee
shall have knowledge thereof (provided, that failure to give
such notice shall not alter the Issuer's obligations
hereunder, unless such failure materially adversely affects
the Issuer);
(ii) while maintaining absolute control over its own
defense, the Trustee shall cooperate and consult fully with
the Issuer and the Administrator in preparing such defense;
and
(iii) notwithstanding anything to the contrary in
this Subsection, neither the Issuer nor the Administrator
shall be liable for settlement of any such claim by the
Trustee entered into without the prior consent of the Issuer
and the Administrator.
(b) To secure the Trustee's right to receive amounts pursuant to this
Section 7.07, the Trustee shall have a lien against the Trust Estate prior in
right to all other parties, except that such lien shall at all times be
subordinate to the lien in favor of the Bondholders. The Trustee hereby agrees
not to cause the filing of a petition in bankruptcy against the Issuer for the
non-payment to the Trustee of any amounts provided by this Section 7.07 until at
least 366 days after the payment in full of all Bonds issued under this
Indenture.
SECTION 7.08 ELIGIBILITY; DISQUALIFICATION.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA ss.310(a)(1) and (a)(5). The Trustee shall always have a
combined capital and surplus as stated in Section 7.09. The Trustee shall be
subject to TIA ss.310(b), including the optional provision permitted by the
second sentence of TIA ss.310(b)(9).
SECTION 7.09 TRUSTEE'S CAPITAL AND SURPLUS.
The Trustee shall at all times have a combined capital and surplus of
at least $50,000,000. If the Trustee publishes annual reports of condition of
the kind described in TIA ss.310(a)(2) its combined capital and surplus for
purposes of this Section 7.09 shall be as set forth in the latest such report.
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SECTION 7.10 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by, and transfer of the Trust Estate to, the successor
Trustee under Section 7.11.
(b) The Trustee may resign at any time by giving written notice thereof
to the Issuer. If an instrument of acceptance by a successor Trustee shall not
have been delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time by Act of the Holders
representing not less than 66 2/3% of the Aggregate Current Principal Amount of
the Outstanding Bonds, delivered to the Trustee and to the Issuer.
(d) If at any time:
(1) the Trustee shall have a conflicting interest prohibited
by Section 7.08 and shall fail to resign or eliminate such conflicting
interest in accordance with Section 7.08 after written request therefor
by the Issuer or by any Bondholder, or
(2) the Trustee shall cease to be eligible under Section 7.09
and shall fail to resign after written request therefor by the Issuer
or by any such Bondholder, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent, or a receiver or liquidator of the
Trustee or of its property shall be appointed or any public officer
shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation,
then, in any such case, (i) the Issuer by an Issuer Order may remove the
Trustee, or (ii) subject to Section 6.14, any Bondholder who has been a bona
fide Holder of a Bond for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of the Trustee for any cause,
the Issuer, by an Issuer Order, shall promptly appoint a successor Trustee. If
within one year after such resignation, removal or incapability or the
occurrence of such vacancy, a successor Trustee shall be appointed by Act of the
Holders of Bonds representing not less than 66 2/3% of the Aggregate Current
Principal Amount of the Outstanding Bonds delivered to the Issuer and the
retiring Trustee, the successor Trustee so appointed shall, forthwith upon its
acceptance of such appointment, become the successor Trustee and supersede the
successor Trustee appointed by the Issuer. If no successor Trustee shall have
been so appointed by the Issuer or Bondholders and shall have accepted
appointment in the manner hereinafter provided, any Bondholder who has been a
bona fide
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Holder of a Bond for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee.
(f) The Issuer shall give notice of each resignation and each removal
of the Trustee and each appointment of a successor Trustee by mailing written
notice of such event by first-class mail, postage prepaid, to the Holders of
Bonds as their names and addresses appear in the Bond Register. Each notice
shall include the name of the successor Trustee and the address of its Corporate
Trust Office.
SECTION 7.11 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
Every successor Trustee appointed hereunder shall execute, acknowledge
and deliver to the Issuer and the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Trustee
shall become effective and such successor Trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee. Notwithstanding the foregoing, on request of the
Issuer or the successor Trustee, such retiring Trustee shall, upon payment of
its charges, execute and deliver an instrument transferring to such successor
Trustee all the rights, powers and trusts of the retiring Trustee, and shall
duly assign, transfer and deliver to such successor Trustee all property and
money held by such retiring Trustee hereunder, subject nevertheless to its lien,
if any, provided for in Section 7.07. Upon request of any such successor
Trustee, the Issuer shall execute and deliver any and all instruments for more
fully and certainly vesting in and confirming to such successor Trustee all such
rights, and powers and trusts.
No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article.
SECTION 7.12 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS OF TRUSTEE.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, automatically shall be the successor of the Trustee
hereunder, provided such corporation shall be otherwise qualified and eligible
under this Article, without the execution or filing of any paper or any further
act on the part of any of the parties hereto. In case any Bonds have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Bonds so authenticated with the same effect
as if such successor Trustee had authenticated such Bonds.
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SECTION 7.13 PREFERENTIAL COLLECTION OF CLAIMS AGAINST ISSUER.
The Trustee shall be subject to TIA ss.311(a), excluding any creditor
relationship listed in TIA ss.311(b), and a Trustee who has resigned or been
removed shall be subject to TIA ss.311(a) to the extent indicated.
SECTION 7.14 CO-TRUSTEES AND SEPARATE TRUSTEES.
At any time or times, for the purpose of meeting the legal requirements
of the TIA or of any jurisdiction in which any of a Trust Estate may at the time
be located, the Issuer and the Trustee shall have power to appoint, and, upon
the written request of the Trustee or of the Holders of Bonds representing not
less than 66 2/3% of the Aggregate Current Principal Amount of the Outstanding
Bonds, the Issuer shall for such purpose join with the Trustee in the execution,
delivery and performance of all instruments and agreements necessary or proper
to appoint one or more Persons approved by the Trustee either to act as
co-trustee, jointly with the Trustee, of all or any part of such Trust Estate,
or to act as separate trustee of any such property, in either case with such
powers as may be provided in the instrument of appointment, and to vest in such
Person or Persons in the capacity aforesaid, any property, title, right or power
deemed necessary or desirable, subject to the other provisions of this Section.
If the Issuer does not join in such appointment within 15 days after the receipt
by it of a request so to do, or in case an Event of Default has occurred and in
continuing, the Trustee alone shall have power to make such appointment.
Should any written instrument from the Issuer be required by any
co-trustee or separate trustee so appointed for more fully confirming to such
co-trustee or separate trustee such property, title, right or power, any and all
such instruments shall, on request, be executed, acknowledged and delivered by
the Issuer.
Every co-trustee or separate trustee shall, to the extent permitted by
law, but to such extent only, be appointed subject to the following terms:
(1) The Bonds shall be authenticated and delivered and all
rights, powers, duties and obligations hereunder in respect to the
custody of securities, cash and other personal property held by, or
required to be deposited or pledged with, the Trustee hereunder, shall
be exercised, solely by the Trustee.
(2) The rights, powers, duties and obligations hereby
conferred or imposed upon the Trustee shall be conferred or imposed
upon and exercised or performed by the Trustee or by the Trustee and
such co-trustee or separate trustee jointly, as shall be provided in
the instrument appointing such co-trustee or separate trustee, except
to the extent that, under any law of any jurisdiction in which any
particular act is to be performed, the Trustee shall be incompetent or
unqualified to perform such act, in which event such rights, powers,
duties and obligations shall be exercised and performed by such
co-trustee or separate trustee.
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(3) The Trustee at any time, by an instrument in writing
executed by it, with the concurrence of the Issuer evidenced by an
Issuer Order, may accept the resignation of or remove any co-trustee or
separate trustee appointed under this Section, and, in case an Event of
Default has occurred and is continuing, the Trustee shall have power to
accept the resignation of, or remove, any such co-trustee or separate
trustee without the concurrence of the Issuer. Upon the written request
of the Trustee, the Issuer shall join with the Trustee in the
execution, delivery and performance of all instruments and agreements
necessary or proper to effectuate such resignation or removal. A
successor to any co-trustee or separate trustee so resigned or removed
may be appointed in the manner provided in this Section.
(4) No co-trustee or separate trustee hereunder shall be
personally liable by reason of any act or omission of the Trustee, or
any other such trustee hereunder and the Trustee shall not be
personally liable by reason of any act or omission of any co-trustee or
other such separate trustee hereunder.
(5) Any Act of Bondholders delivered to the Trustee shall be
deemed to have been delivered to each such co-trustee and separate
trustee.
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ARTICLE VIII
BONDHOLDERS' LIST AND REPORTS
SECTION 8.01 ISSUER TO FURNISH TRUSTEE NAMES AND ADDRESSES OF
BONDHOLDERS.
The Issuer will furnish or cause to be furnished to the Trustee (i)
semiannually, not less than 45 days nor more than 60 days after each Interest
Payment Date, a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Holders of Bonds as they appear on the Bond Register,
and (ii) at such other times, as the Trustee may request in writing, within 30
days after receipt by the Issuer of any such request, a list of similar form and
content as of a date not more than 10 days prior to the time such list is
furnished; provided, however, that so long as the Trustee is the Bond Registrar,
no such list shall be required to be furnished.
SECTION 8.02 PRESERVATION OF INFORMATION; COMMUNICATIONS TO
BONDHOLDERS.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of the Holders of Bonds contained in the
most recent list, if any, furnished to the Trustee as provided in Section 8.01
and the names and addresses of the Holders of Bonds received by the Trustee in
its capacity as Bond Registrar. The Trustee may destroy any list furnished to it
as provided in Section 8.01 upon receipt of a new list so furnished.
(b) Bondholders may communicate pursuant to TIA ss.312(b) with other
Bondholders with respect to their rights under this Indenture or under the
Bonds.
(c) The Issuer, the Trustee and the Bond Registrar shall have the
protection of TIA ss.312(c).
SECTION 8.03 REPORTS BY TRUSTEE.
(a) In addition to the Payment Date Statement pursuant to Section 3.05,
within 60 days after December 31 of each year, (the "Reporting Date"),
commencing with the year 1997, the Trustee shall mail to all Holders a brief
report dated after the Reporting Date that complies with TIA ss.313(a). The
Trustee shall also mail to all Holders a brief report that complies with TIA
ss.313(b)(1), together with an Opinion of Counsel that complies with TIA
ss.314(d)(1), if required, as to any release, or any release and substitution,
of any portion of the Trust Estate, unless the fair value of the property then
released is less than 10% of the Aggregate Current Principal Amount of the then
Outstanding Bonds, within 90 days after such release. The Trustee shall mail to
Holders of Bonds with respect to which it has made advances any reports with
respect to such advances that are required by TIA ss.313(b)(2), any such report
to be mailed within 90 days of any such advance. For purposes of the information
required to be included in any such reports pursuant to TIA ss.313(a)(2) or
ss.313(b), the principal amount of indenture securities outstanding on the date
as of which such information is provided shall be the Aggregate Current
Principal Amount of the then Outstanding Bonds.
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(b) A copy of each report required under this Section shall, at the
time of such transmission to Holders of Bonds be filed by the Trustee with the
Commission and with each securities exchange upon which the Bonds are listed.
The Issuer will notify the Trustee when the Bonds are listed on any securities
exchange.
(c) The Issuer shall supply to the Trustee at least fifteen calendar
days prior to any applicable filing prescribed by law or Internal Revenue
Service regulation, and the Trustee, as agent for the Issuer, shall transmit by
mail, to each Holder of Bonds, as his name and address appears in the Bond
Register for and to the Internal Revenue Service, within the time limits
prescribed by law, the amounts of interest and original issue discount (which
original issue discount shall be calculated by the Issuer), if any, paid or
accrued with respect to Bonds held by such Bondholder.
SECTION 8.04 REPORTS BY ISSUER.
(a) The Issuer (i) shall file with the Trustee within 15 days after it
files them 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 by rules and regulations prescribe) that the
Issuer is required to file with the Commission pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934, as amended, and (ii) shall also comply
with the other provisions of TIA ss.314(a).
(b) The Issuer shall promptly file, and exercise its reasonable best
efforts to obtain a favorable response to, no-action requests to, or other
appropriate exemptive relief from, the Commission seeking the usual and
customary exemption from such reporting requirements granted to issuers of
securities similar to the Bonds.
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ARTICLE IX
COVENANTS OF ISSUER
SECTION 9.01 MAINTENANCE OF OFFICE OR AGENCY.
The Issuer will maintain an office or agency within the United States
of America where Bonds may be presented or surrendered for payment or may be
surrendered for registration of transfer or exchange, and where notices and
demands to or upon the Issuer in respect of the Bonds and this Indenture may be
served. The Issuer hereby initially appoints the Trustee to serve, and the
Trustee may appoint an agent to serve, as such office or agency. The Issuer will
give prompt written notice to the Trustee of the location and any change in the
location, of such office or agency. Until written notice of any change in the
location of such office or agency is delivered to the Trustee or if at any time
the Issuer shall fail to maintain any such required office or agency or shall
fail to furnish the Trustee with the address thereof, presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office and the
Issuer hereby appoints the Trustee as its agent for the foregoing purposes.
SECTION 9.02 MONEY FOR BOND PAYMENTS TO BE HELD IN TRUST.
Whenever the Issuer shall have one or more Paying Agents, the Trustee
will, on each Payment Date or Redemption Date, withdraw from the Collateral
Proceeds Account and deposit with such Paying Agent cash in an amount sufficient
to pay principal of or interest on the Bonds with respect to the related
Interest Accrual Period, such sum to be held in trust for the benefit of the
Persons entitled to such principal or interest, and (unless such Paying Agent is
the Trustee) the Issuer will promptly notify the Trustee of its action or
failure to so act.
The initial Paying Agent shall be the Trustee. Any additional or
successor Paying Agent shall be appointed by Issuer Order. The Issuer shall not
appoint any Paying Agent that is not, at the time of such appointment, a
depository institution or trust company incorporated under the laws of the
United States of America or any state thereof and subject to supervision and
examination by federal or state banking authorities. The Issuer will cause each
Paying Agent, other than the Trustee, to execute and deliver to the Trustee an
instrument in which such Paying Agent shall agree with the Trustee, subject to
the provisions of this Section, that such Paying Agent will:
(1) hold all amounts held by it for the payment of principal
of or interest on the Bonds in trust for the benefit of the Persons
entitled thereto until such amounts shall be paid to such Persons or
otherwise disposed of as herein provided and pay such amounts to such
Persons as herein provided;
(2) give the Trustee notice of any Default by the Issuer (or
any other obligor upon the Bonds) in the making of any payment of principal or
interest; and
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(3) at any time during the continuance of any such Default,
upon the written request of the Trustee, forthwith pay to the Trustee
all amounts so held in trust by such Paying Agent.
The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Issuer Order direct any Paying Agent to pay, to the Trustee all amounts held
in trust by the Issuer or such Paying Agent, such amounts to be held by the
Trustee upon the same trusts as those upon which such amounts were held by the
Issuer or such Paying Agent; and, upon such payment by any Paying Agent to the
Trustee, such Paying Agent shall be released from all further liability with
respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Issuer, in trust for the payment of the principal of or interest on any
Bond and remaining unclaimed for six years after the related Payment Date shall
be paid to the Issuer on Issuer Request, or (if then held by the Issuer) shall
be discharged from such trust; and the Holder of such Bond shall thereafter, as
an unsecured general creditor, look only to the Issuer for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust
money (but only to the extent of the amounts so paid to the Issuer), and all
liability of the Issuer as trustee thereof, shall thereupon cease; provided,
however, that the Trustee or such Paying Agent, before being required to make
any such release of payment, may at the expense of the Issuer cause to be
published once, in a newspaper published in the English language, customarily
published on each Business Day and of general circulation in New York, New York
and in the city in which the Issuer's office is located pursuant to Section
9.01, notice that such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such publication,
any unclaimed balance of such money then remaining will be repaid to the Issuer.
The Trustee may also adopt and employ, at the expense of the Issuer, any other
reasonable means of notification of such release of payment (including, but not
limited to, mailing notice of such release to Holders whose Bonds have been
called but have not been surrendered for redemption or whose right to or
interest in funds due and payable but not claimed is determinable from the
records of any Paying Agent, at the last address of record of each such Holder).
SECTION 9.03 ISSUER'S EXISTENCE.
The Issuer will keep in full effect its existence, rights and
franchises as a business trust under the laws of the state of its organization
and will obtain and preserve its qualification to do business as a foreign
business trust in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this Indenture and the
Bonds.
SECTION 9.04 PROTECTION OF TRUST ESTATE.
The Issuer will from time to time execute and deliver all such
supplements and amendments hereto and all such financing statements,
continuation statements, instruments of further assurance, and other
instruments, and will take such other action as may be necessary or advisable
to:
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(i) Grant more effectively all or any portion of the
Trust Estate;
(ii) maintain or preserve the lien (and the priority
thereof) of this Indenture or to carry out more effectively the
purposes hereof;
(iii) perfect, publish notice of, or protect the validity
of, any Grant made or to be made by this Indenture;
(iv) enforce any of the Student Loans; or
(v) preserve and defend title to the Trust Estate, and the
rights of the Trustee and of the Bondholders secured thereby, against
the claims of all persons and parties.
The Issuer hereby designates the Trustee its agent and attorney-in-fact to
execute any financing statement, continuation statement or other instrument
required pursuant to this Section.
The Issuer shall pay or cause to be paid any taxes levied on the
account of the beneficial ownership by the Issuer or an Affiliate of the Issuer
of the Student Loan Collateral that secures the Bonds.
SECTION 9.05 PERFORMANCE OF OBLIGATIONS.
(a) The Issuer will punctually perform and observe all of its
obligations and covenants contained in the Trust Agreement, the Servicing
Agreement, the Administration Agreement and the Origination Agreements.
(b) The Issuer will not knowingly take any action or permit any action
to be taken by others which would release any Person from any of such Person's
covenants or obligations under any instrument included in the Trust Estate, or
which would result in the amendment, hypothecation, subordination, termination
or discharge of, or impair the validity or effectiveness of, any such
instrument, except as expressly provided in this Indenture or such other
instrument.
(c) The Issuer may contract with other Persons to perform certain
obligations of the Issuer hereunder, and performance by any such Persons
identified to the Trustee in an Officer's Certificate of the Issuer shall be
deemed to be performance of such obligations by the Issuer. Initially, the
Issuer has contracted with the Administrator to assist the Issuer in performing
its duties under this Indenture.
SECTION 9.06 NEGATIVE COVENANTS.
Until the conditions of Section 5.01 have been satisfied, the Issuer
will not:
(i) sell, transfer, exchange or otherwise dispose of, or
pledge, mortgage, hypothecate, or otherwise encumber (or permit such to
occur or suffer to exist) any part of the Trust Estate except as
expressly permitted by this Indenture;
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(ii) claim any credit on, or make any deduction from, the
principal or interest payable in respect of the Bonds by reason of the
payment of any taxes levied or assessed upon any portion of the Trust
Estate; or
(iii) engage in any business or activity other than in
connection with, or relating to, the issuance of Bonds and other than
as permitted or contemplated by the Trust Agreement.
SECTION 9.07 SERVICER'S ANNUAL STATEMENT AS TO COMPLIANCE.
The Issuer shall cause the Servicer to deliver to the Trustee, on or
prior to March 31 of each year, commencing March 31, 1998, a written statement
signed by an officer of the Servicer stating that:
(1) a review of the activities of the Servicer, and the
Servicer's performance under the Servicing Agreement for the previous
twelve months ending December 31, has been made under such servicing
officer's supervision; and
(2) to the best of such officer's knowledge, based on such
review, the Servicer has or has caused to be performed all of its
obligations under the Servicing Agreement throughout such year and that
no Default has occurred, or, if such Default has occurred and is
continuing, specifying each such Default, the nature and status
thereof, and the steps necessary to remedy such Default.
SECTION 9.08 CORPORATE EXISTENCE OF OWNER TRUSTEE.
(a) Subject to Subsections (b) and (c) hereof, the Owner Trustee will
keep in full effect its existence, rights and franchises as a banking
corporation under the laws of the State of Delaware.
(b) Any corporation into which the Owner Trustee may be merged or with
which it may be consolidated, or any corporation resulting from any merger or
consolidation to which such Owner Trustee shall be a party, shall be the
successor Owner Trustee under this Indenture without the execution or filing of
any paper, instrument or further act to be done on the part of the parties
hereto, anything herein, or in any agreement relating to such merger or
consolidation, by which any such Owner Trustee may seek to retain certain
powers, rights and privileges theretofore obtaining for any period of time
following such merger or consolidation, to the contrary notwithstanding.
(c) Any successor to the Owner Trustee appointed pursuant to the Trust
Agreement shall be the successor Owner Trustee under this Indenture without the
execution or filing of any paper, instrument or further act to be done on the
part of the parties hereto.
(d) Upon any consolidation or merger of or other succession to the
Owner Trustee, the Person formed by or surviving such consolidation or merger
(if other than the Owner
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Trustee) or the Person succeeding to the Owner Trustee under the Trust Agreement
may exercise every right and power of, the Owner Trustee, on behalf of the
Issuer under this Indenture with the same effect as if such Person had been
named as the Owner Trustee herein.
SECTION 9.09 NO OTHER BUSINESS.
The Issuer shall not engage in any business other than financing,
purchasing, owning, selling and managing of Student Loans in the manner
contemplated by this Indenture and all activities incidental thereto.
SECTION 9.10 NO BORROWING.
The Issuer shall not issue, incur, assume, guarantee or otherwise
become liable, directly or indirectly, for any indebtedness except for the
Bonds.
SECTION 9.11 OBLIGATIONS OF THE SERVICER.
The Issuer shall cause the Servicer (a) to comply with the Servicing
Agreement and the Custodial Agreement and (b) to deliver to the Rating Agency
within 30 days following the end of each calendar quarter, the related Servicer
Remittance Reports for such calendar quarter.
SECTION 9.12 SERVICER'S EVIDENCE AS TO COMPLIANCE.
For such time as the Issuer is required to file reports or information
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as
amended, the Issuer shall cause the Servicer on or before March 31 of each
calendar year, commencing with the year 1997, to cause a firm of Accountants to
furnish a report to the Trustee and the Issuer to the effect that such firm has
examined certain documents and records relating to the servicing of the Student
Loans, compared the information contained in the Servicer Remittance Reports
delivered during the period covered by the report with such documents and
records relating to the servicing of the Student Loans and that, on the basis of
such examination and comparison, nothing has come to the attention of such
accountants to indicate that such servicing was not in compliance with The
National Collegiate Trust's GATESM Policies and Procedures Manual and the
Servicing Agreement except for such exceptions or errors as such firm shall
believe to be immaterial and such other exceptions as shall be set forth in such
statements.
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ARTICLE X
SUPPLEMENTAL INDENTURES; AMENDMENTS
TO OTHER DOCUMENTS
SECTION 10.01 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF BONDHOLDERS.
Without the consent of the Holders of any Bonds, the Issuer and the
Trustee, by an Issuer Order, at any time and from time to time, may enter into
one or more indentures supplemental hereto, in form satisfactory to the Trustee,
for any of the following purposes:
(1) to correct or amplify the description of any property at
any time subject to the lien of this Indenture, or better to assure,
convey and confirm unto the Trustee any property subject or required to
be subjected to the lien of this Indenture, or to subject to the lien
of this Indenture additional property;
(2) to add to the conditions, limitations and restrictions on
the authorized amount, terms and purposes of issue, authentication and
delivery of the Bonds;
(3) to evidence the succession of another Person to the
Issuer, and the assumption by any such successor of the covenants of
the Issuer herein and in the Bonds contained;
(4) to add to the covenants of the Issuer or the Trustee for
the benefit of the Holders of the Bonds or to surrender any right or
power herein conferred upon the Issuer;
(5) to convey, transfer, assign or pledge any property to or
with the Trustee;
(6) to cure any ambiguity, to amend, correct or supplement any
provision herein or in any supplemental indenture that may be
defective, ineffective or inconsistent with any other provision herein
or in any supplemental indenture, or to make any other provisions with
respect to matters or questions relating to this Indenture or in any
supplemental indenture; provided that such action shall not adversely
affect the interests of the Holders of Outstanding Bonds;
(7) to provide for the issuance of Bonds in bearer form with
coupons ("Bearer Bonds") and for the exchangeability of Bearer Bonds
and Bonds issued in registered form ("Registered Bonds"); any such
supplemental indenture may also contain any provisions as may in the
Issuer's judgment be necessary, appropriate or convenient (a) to permit
the Bonds to be issued and sold to or held in bearer form by non-United
States Persons, (b) to establish entitlement to an exemption from
United States withholding tax or reporting requirements with respect to
payments on the Bonds, (c) to comply, or facilitate compliance, with
other applicable laws or regulations, (d) to provide for usual and
customary provisions for communication (by notice publication,
maintenance of lists of holders of Bearer Bonds who have provided names
and addresses for such purpose, or
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otherwise) with holders of Bearer Bonds, or (e) to otherwise effectuate
provisions for the issuance of Bearer Bonds and their exchangeability
with Registered Bonds;
(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee and to add to or change any of the
provisions of this Indenture as shall be necessary to facilitate the
administration of the Trust hereunder by more than one Trustee,
pursuant to the requirements of Section 7.11 or 7.12 hereof;
(9) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the
qualification of this Indenture under TIA, or under any similar federal
statute hereafter enacted or to conform the provisions of this
Indenture to TIA, as amended from time to time, and to add to this
Indenture such other provisions as may be expressly required by TIA;
(10) to amend the provisions of Article XIII in accordance
with Section 13.03 thereof; or
(11) to provide for the maintenance of the rating on the
Bonds, at the option of the Issuer.
SECTION 10.02 SUPPLEMENTAL INDENTURES WITH CONSENT OF BONDHOLDERS.
With the consent of the Holders of Bonds of each Class affected thereby
representing not less than 66 2/3% of Bonds of the Aggregate Current Principal
Amount of Outstanding Bonds, by Act of such Holders delivered to the Issuer and
the Trustee, the Issuer and the Trustee, by an Issuer Order, may enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to, or changing in any manner or eliminating any of the provisions
of, this Indenture or of modifying in any manner the rights of the Holders of
such Class of Bonds under this Indenture; provided, however, that no such
supplemental indenture shall, without the consent of the Holder of each
Outstanding Bond affected thereby:
(1) change the Stated Maturity of, or the Interest Payment
Date for, any Bond or reduce the principal amount thereof, the Bond
Interest Rate thereon or the Redemption Price with respect thereto,
change the provisions of this Indenture relating to the application of
proceeds of the Trust Estate to the payment of principal of the Bonds
or change any place of payment where, or the coin or currency in which,
any Bond or any interest thereon is payable, or impair the right to
institute suit for the enforcement of the payment of any installment of
interest due on any Bond on or after the related Interest Payment Date
or for the enforcement of the payment of the entire remaining unpaid
principal amount of any Bond on or after Stated Maturity (or, in the
case of redemption, on or after the applicable Redemption Date);
(2) reduce the percentage of the Aggregate Current Principal
Amount of the Outstanding Bonds, the consent of the Holders of which is
required for any such supplemental indenture, or the consent of the
Holders of which is required for any waiver
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of compliance with provisions of this Indenture or Defaults hereunder
and their consequences provided for in this Indenture;
(3) modify any of the provisions of this Section or Section
6.13, except to increase any percentage specified therein or to provide
that certain other provisions of this Indenture cannot be modified or
waived without the consent of the Holder of each Outstanding Bond
affected thereby;
(4) modify the definition of the term "Outstanding";
(5) permit the creation of any lien ranking prior to or on a
parity with the lien of this Indenture with respect to any part of the
Trust Estate or terminate the lien of this Indenture on any property at
any time subject hereto or deprive the Holder of any Bond of the
security afforded by the lien of this Indenture;
(6) modify any of the provisions of this Indenture in such
manner as to affect the calculation of principal and interest payable
on the Bonds on any Payment Date (including the components of any such
calculations), adversely affect the rights of the Holders of Bonds to
the benefits of any provisions for the mandatory redemption of Bonds
contained herein, or to adversely affect the rights of the Bondholders
to any amounts deposited in the Reserve Fund or the Interest Support
Account;
(7) modify or alter any of the provisions of Section 6.16;
(8) impair or adversely affect the Trust Estate except as
otherwise permitted herein; or
(9) change the percentage required to declare an acceleration
of the Bonds pursuant to Section 6.02.
The Trustee shall determine whether the interests of the Holders of the
Bonds would be adversely affected by any supplemental indenture and any such
determination shall be conclusive upon the Holders of all Bonds, whether
theretofore or thereafter authenticated and delivered hereunder. The Trustee
shall not be liable for any such determination made in good faith.
It shall not be necessary for any Act of Bondholders under this Section
to approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
Promptly after the execution by the Issuer and the Trustee of any
supplemental indenture pursuant to this Section, the Trustee shall mail to the
Holders of the Bonds as their names appear on the Bond Register, a notice
setting forth in general terms the substance of such supplemental indenture. Any
failure of the Trustee to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such supplemental
indenture.
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SECTION 10.03 EXECUTION OF SUPPLEMENTAL INDENTURES.
In executing or accepting the additional trusts created by any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and, subject to Section 7.01, shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not,
except to the extent required in the case of a supplemental indenture entered
into under Section 10.01(9), be obligated to, enter into any such supplemental
indenture that affects the Trustee's own rights, duties, liabilities or
immunities under this Indenture or otherwise except to the extent required by
law.
SECTION 10.04 EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Bonds theretofore or thereafter authenticated and delivered hereunder and
affected by such supplemental indenture shall be bound thereby.
SECTION 10.05 CONFORMITY WITH TRUST INDENTURE ACT.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of TIA as then in effect.
SECTION 10.06 REFERENCE IN BONDS TO SUPPLEMENTAL INDENTURES.
Bonds authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and if required by the
Trustee shall, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Issuer shall so determine,
new Bonds so modified as to conform, in the opinion of the Trustee and the
Issuer, to any such supplemental indenture may be prepared and executed by the
Issuer and authenticated and delivered by the Trustee in exchange for
Outstanding Bonds.
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ARTICLE XI
REDEMPTION OF BONDS
SECTION 11.01 REDEMPTION AT THE OPTION OF THE ISSUER; ELECTION TO
REDEEM.
(a) The Class A Bonds shall be redeemable at the option of the Issuer
at the Redemption Price and, upon retirement in full of all Class A Bonds, the
Class B Bonds shall be redeemable at the option of the Issuer at the Redemption
Price in each case in part, on any Payment Date prior to the first Principal
Payment Date, in an amount equal to any Prepayments collected by the Servicer
during the related Collection Period;
(b) The Class A Bonds and the Class B Bonds shall be redeemable, pro
rata, at the option of the Issuer at the Redemption Price, in part, not to
exceed five (5%) percent of the Aggregate Current Principal Amount of Bonds,
upon Issuer Order delivered to the Trustee at any time during the 60 day period
following the Closing Date.
(c) The Class B Bonds shall be redeemable at the option of the Issuer
at the Redemption Price in whole, when the Aggregate Current Principal Amount of
Bonds is ten percent (10%) or less of the Aggregate Current Principal Amount of
Bonds as of the Closing Date;
(d) Interest due on or prior to a Redemption Date shall continue to be
payable to the Holders of such Bonds as of the relevant Record Dates according
to their terms and the provisions of Section 3.02. The election of the Issuer to
redeem any Bonds pursuant to this Section 11.01 shall be evidenced by an Issuer
Order directing the Trustee to make the payment of the Redemption Price of all
of the Bonds to be redeemed from funds in the Collateral Proceeds Account and
the Reserve Fund and for funds deposited with the Trustee by the Issuer pursuant
to Section 11.04.
The Issuer shall set the Redemption Date and the Record Date and give
notice thereof to the Trustee pursuant to Section 11.02.
SECTION 11.02 NOTICE TO TRUSTEE.
In case of any redemption pursuant to Section 11.01, the Issuer shall
at least 20 days prior to the Redemption Date (unless a shorter period shall be
satisfactory to the Trustee), notify the Trustee by an Officers' Certificate of
such Redemption Date, the Record Date and the principal amount of Bonds to be
redeemed on such Redemption Date.
SECTION 11.03 NOTICE OF ISSUER REDEMPTION.
Notice of redemption pursuant to Section 11.01 shall be given by
first-class mail, postage prepaid, mailed not less than fifteen days prior to
the applicable Redemption Date, to each
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Holder of Bonds to be redeemed (as of the close of business of the Record Date)
pursuant to Section 11.01 at its address appearing in the Bond Register.
All notices of redemption shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) the fact that the Bonds are to be redeemed in part or in
full, as the case may be, and that interest thereon shall accrue up to
the Business Day preceding such Redemption Date; and
(4) the address where such Bonds are to be surrendered for
payment of the Redemption Price, which shall be the office or agency of
the Issuer to be maintained as provided in Section 9.01.
Notice for redemption of Bonds shall be given by the Issuer or, at the
Issuer's request, by the Trustee in the name and at the expense of the Issuer.
Failure to give notice of redemption, or any defect therein, to any Holder of
any Bond selected for redemption shall not impair or affect the validity of the
redemption of any other Bond.
SECTION 11.04 DEPOSIT OF REDEMPTION PRICE.
In the case of all redemptions, on or before the Business Day
immediately preceding the related Redemption Date, the Issuer shall deposit in
the Collateral Proceeds Account with the Trustee or with a Paying Agent cash in
an amount sufficient to provide for payment of the Redemption Price of all of
the Bonds that are to be redeemed on such Redemption Date (unless such payment
is to be made solely from the Collateral Proceeds Account or the Reserve Fund),
plus any outstanding fees and expenses of the Trustee.
SECTION 11.05 BONDS PAYABLE ON REDEMPTION DATE.
Notice of redemption pursuant to Section 11.01 or having been given as
provided in Section 11.02, the Bonds to be so redeemed shall, on the applicable
Redemption Date, become due and payable at the Redemption Price and as of the
Business Day preceding such Redemption Date (unless the Issuer shall Default in
the payment of the Redemption Price) such Bonds shall cease to bear interest. On
or after the Redemption Date, such Bonds shall be paid by the Issuer at the
Redemption Price; provided, however, that payments due on a Payment Date on or
prior to the Redemption Date shall be payable to the Holders of such Bonds
registered as such on the relevant Record Dates according to their terms and the
provisions of Section 3.02.
If Bonds are redeemed in part pursuant to Sections 11.01(a)(i) or
(a)(ii), the redemption shall be pro rata in respect of all Outstanding Bonds.
If any Bond called for redemption shall
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not be so paid upon surrender thereof for redemption, the principal thereof
shall, until paid, bear interest up to the Business Day prior to the relevant
Redemption Date at the Bond Interest Rate.
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ARTICLE XII
BONDHOLDERS' MEETING
SECTION 12.01 PURPOSES FOR WHICH MEETINGS MAY BE CALLED.
A meeting of the Holders of Bonds may be called at any time and from
time to time pursuant to the provisions of this Article for any of the following
purposes:
(1) to give any notice to the Issuer or to the Trustee, or to
give any directions to the Trustee, or to consent to the waiver of any
Default hereunder and its consequences, or to take any other action
authorized to be taken by Bondholders pursuant to any of the provisions
of Article VI;
(2) to remove the Trustee and appoint a successor Trustee
pursuant to the provisions of Article VII;
(3) to consent to the execution of an indenture or indentures
supplemental hereto pursuant to the provisions of Article X; or
(4) to take any other action authorized to be taken by or on
behalf of the Holders of any specified aggregate principal amount of
the Bonds under any other provision of this Indenture or under
applicable law.
SECTION 12.02 MANNER OF CALLING MEETINGS.
The Trustee may at any time call a meeting of Bondholders to take any
action specified in Section 12.01, to be held at such time and at such place in
the United States of America as the Trustee shall determine. Notice of every
meeting of the Bondholders, setting forth the time and the place of such meeting
and in general terms the actions proposed to be taken at such meeting, shall be
mailed to such Bondholders not less than 20 nor more than 60 days prior to the
date fixed for the meeting as provided in Section 13.05. The Trustee may fix, in
advance of the giving of such notice, a date as the record date for determining
the Bondholders entitled to notice of or to vote at any such meeting not more
than 15 days prior to the date fixed for the giving of such notice.
SECTION 12.03 CALL OF MEETING BY ISSUER OR BONDHOLDERS.
In case at any time the Issuer, pursuant to a resolution of its Board
of Directors, or the Holders representing at least 10% of the Aggregate Current
Principal Amount of the Outstanding Bonds, shall have requested the Trustee to
call a meeting of Bondholders to take any action authorized in Section 12.01 by
written request setting forth in reasonable detail the action proposed to be
taken at the meeting, and the Trustee shall not have mailed notice of such
meeting within 20 days after receipt of such request, then the Issuer or the
Holders of Bonds in
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the amount above specified may determine the time and the place for such
meeting, the record date for determining the Bondholders entitled to notice of
or to vote at such meeting, and may call such meeting to take any action
authorized in Section 12.01, by mailing notice thereof as provided in Section
12.02.
SECTION 12.04 WHO MAY ATTEND AND VOTE AT MEETINGS.
To be entitled to vote at any meeting of Bondholders a Person shall (a)
be a Holder, as of the record date set for such meeting, of one or more Bonds
will respect to which such meeting was called or, (b) be a Person appointed by
an instrument in writing as proxy by a Holder of one or more such Bonds. The
only Persons who shall be entitled to be present or to speak at any meeting of
Bondholders shall be the Persons entitled to vote at such meeting and their
counsel, any representatives of the Trustee and its counsel and any
representatives of the Issuer and its counsel.
SECTION 12.05 REGULATIONS MAY BE MADE BY TRUSTEE.
Notwithstanding any other provisions of this Indenture, the Trustee may
make such reasonable regulations as it may deem advisable for any meeting of
Bondholders, in regard to proof of the holding of Bonds and of the appointment
of proxies, and in regard to the appointment and duties of inspectors of votes,
the submission and examination of proxies, certificates and other evidence of
the right to vote, and such other matters concerning the conduct of the meeting.
Except as otherwise permitted or required by any such regulations, the holding
of Bonds shall be proved in the manner specified in Section 13.03(c) and the
appointment of any proxy shall be proved in the manner specified in Section
13.03; provided, however, that such regulations may provide that written
instruments appointing proxies regular on their face may be presumed valid and
genuine without the proof hereinabove or in Section 13.03 specified.
The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the Issuer
or by Bondholders as provided in Section 12.03, in which case the Issuer or the
Bondholders calling the meeting, as the case may be, shall in like manner
appoint a temporary chairman. A permanent chairman and a permanent secretary of
the meeting shall be elected by vote of the Holders of a majority in principal
amount of the Bonds represented at the meeting.
At any meeting each Holder of Bonds or any proxy shall be entitled to
one vote for each $25,000 principal amount of Outstanding Bonds held or
represented by him, provided, however, that no vote shall be cast or counted at
any meeting in respect of the principal amount of any Bond challenged as not
Outstanding and ruled by the chairman of the meeting to be not Outstanding. The
chairman of the meeting shall have no right to vote other than by virtue of
Bonds held by him or by virtue of instruments in writing as aforesaid duly
designating him as the person to vote on behalf of other Bondholders. Any
meeting of Bondholders duly called pursuant to the provisions of Section 12.02
or Section 12.03 may be adjourned from time to
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time, and the meeting so adjourned may be held without further notice, except as
given at the meeting.
At any meeting of Bondholders, the presence of Persons holding or
representing Bonds in an aggregate principal amount sufficient to take action on
the business for the transactions of which such meeting was called shall
constitute a quorum, but, if less than a quorum is present, the Persons holding
or representing a majority in aggregate principal amount of the Bonds
represented at the meeting may adjourn such meeting with the same effect, for
all intents and purposes, as though a quorum had been present, and the meeting
may be held as so adjourned without further notice, except as given at the
meeting.
SECTION 12.06 MANNER OF VOTING AT MEETINGS AND RECORDS TO BE KEPT.
The vote upon any matter submitted to any meeting of Bondholders shall
be by written ballots on which shall be subscribed the signatures of the Holders
of Bonds or of their representatives by proxy and the serial number or numbers
of the Bonds held or represented by them. The permanent chairman of the meeting
shall appoint two inspectors of votes who shall count all votes cast at the
meeting for or against any resolution and who shall make and file with the
secretary of the meeting their verified written reports in duplicate of all
votes cast at the meeting. A record in duplicate of the proceedings of each
meeting of Bondholders shall be prepared by the secretary of the meeting and
there shall be attached to such record the original reports of the inspectors of
votes on any vote by ballot taken thereat and affidavits by one or more persons
having knowledge of the facts setting forth a copy of the notice of the meeting
and showing that such notice was mailed as provided in Section 12.02. The record
shall show the serial numbers of the Bonds voting in favor of and against any
resolution. The record shall be signed and verified by the affidavits of the
permanent chairman and secretary of the meeting and one of the duplicates shall
be delivered to the Issuer and the other to the Trustee to be preserved by the
Trustee.
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
SECTION 12.07 EXERCISE OF RIGHTS OF TRUSTEE AND BONDHOLDERS NOT TO BE
HINDERED OR DELAYED.
Nothing in this Article shall be deemed or construed to authorize or
permit, by reason of any call of a meeting of Bondholders or any rights
expressly or impliedly conferred hereunder to make such call, any hindrance or
delay in the exercise of any right or rights conferred upon or reserved to the
Trustee or to the Bondholders under any of the provisions of this Indenture or
of the Bonds.
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ARTICLE XIII
MISCELLANEOUS
SECTION 13.01 COMPLIANCE CERTIFICATES AND OPINIONS.
Upon any application or request by the Issuer to the Trustee to take
any action under any provision of this Indenture, the Issuer shall furnish to
the Trustee an Officer's Certificate stating that all conditions precedent
(including any covenant with which compliance constitutes a condition
precedent), if any, provided for in this Indenture relating to the proposed
action have been complied with and an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent, if any, have been
complied with, except that in the case of any such application or request as to
which the furnishing of such documents is specifically required by any provision
of this Indenture relating to such particular application or request, no
additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(a) a statement that each individual signing such certificate
or opinion has read such covenant or condition and the definitions
herein relating thereto;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(c) a statement that, in the opinion of each such individual,
he has made such examination or investigation as is necessary to enable
him to express an informed opinion whether such covenant or condition
has been complied with; and
(d) a statement whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 13.02 FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an Authorized Officer may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by counsel, unless such
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Authorized Officer knows, or in the exercise of reasonable care should know,
that the certificate or opinion or representations with respect to the matters
upon which his certificate or opinion is based are erroneous. Any such
certificate or opinion of an Authorized Officer or any Opinion of Counsel may be
based, insofar as it relates to factual matters, upon a certificate or opinion
of, or representations by, one or more officers of the Issuer, the Owner Trustee
or the Administrator, stating that the information with respect to such factual
matters is in the possession of the Issuer, the Owner Trustee, or the
Administrator unless such Authorized Officer or counsel knows that the
certificate or opinion or representations with respect to such matters are
erroneous. Any Opinion of Counsel may also be based, insofar as it relates to
factual matters, upon a certificate or opinion of, or representations by, an
Authorized Officer, stating that the information with respect to such matters is
in the possession of the Owner Trustee or the Administrator, unless such counsel
knows that the certificate or opinion or representations with respect to such
matters are erroneous. Any Opinion of Counsel may be based on the written
opinion of other counsel, in which event such Opinion of Counsel shall be
accompanied by a copy of such other counsel's opinion and shall include a
statement to the effect that such counsel believes that such counsel and the
Trustee may reasonably rely upon the opinion of such other counsel.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 13.03 ACTS OF BONDHOLDERS.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Bondholders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Bondholders in person or by agent
duly appointed in writing; and, except as herein otherwise expressly provided,
such action shall become effective when such instrument or instruments are
delivered to the Trustee, and, where it is hereby expressly required, to the
Issuer. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the
Bondholders signing such instrument or instruments. Proof of execution of any
such instrument or of a writing appointing any such agent shall be sufficient
for any purpose of this Indenture and (subject to Section 6.01) conclusive in
favor of the Trustee and the Issuer, if made in the manner provided in this
Section.
(b) The fact and date of the execution by any Person or any such
instrument or writing may be proved in any manner that the Trustee deems
sufficient.
(c) The ownership of Bonds shall be proved by the Bond Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Bonds shall bind the Holder (and any
transferee thereof) of every Bond issued upon the registration of, in respect of
anything done, omitted or suffered to be done
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by the Trustee or the Issuer in reliance thereon, whether or not notation of
such action is made upon such Bond.
(e) The Issuer and (during the continuance of any Event of Default) the
Trustee shall fix, in advance, a date as the record date for determining, the
Bondholders entitled to consent to or vote on any action required or permitted
to be consented to or voted upon by or on behalf of the Bondholders of any
specified Aggregate Current Principal Amount of the Bonds.
SECTION 13.04 NOTICES.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Bondholders or other documents provided or permitted by this Indenture
to be made upon, given or furnished to, or filed with:
(1) the Trustee by any Bondholder or by the Issuer shall be
sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with the Trustee at its Corporate Trust Office,
or
(2) the Issuer by the Trustee or by any Bondholder shall be
sufficient for every purpose hereunder if in writing and mailed,
first-class postage prepaid, to the Issuer addressed to it at c/o
Delaware Trust Capital Management, Inc., 900 Market Street, Wilmington,
Delaware 19801, Attention: Richard N. Smith, with a copy to the
Administrator at First Marblehead Data Services Inc., 237 Park Avenue,
New York, New York 10017, Attention: Stephen Anbinder, or at any other
address previously furnished in writing to the Trustee by the Issuer or
the Administrator.
SECTION 13.05 NOTICES AND REPORTS TO BONDHOLDERS; WAIVER OF NOTICES.
Where this Indenture provides for notice to Bondholders of any event or
the mailing of any report to Bondholders, such notice or report shall be
sufficiently given (unless otherwise herein expressly provided) if mailed,
first-class postage prepaid, to each Bondholder affected by such event or to
whom such report is required to be mailed, at the address of such Bondholder as
it appears on the Bond Register, not later than the latest date, and not earlier
than the earliest date, prescribed for the giving of such notice or the mailing
of such report. In any case where a notice or report to Bondholders is mailed in
the manner provided above, neither the failure to mail such notice or report,
nor any defect in any notice or report so mailed, to any particular Bondholder
shall affect the sufficiency of such notice or report with respect to other
Bondholders, and any notice or report which is mailed in the manner herein
provided shall be conclusively presumed to have been duly given or provided.
Where this Indenture provides for notice in any manner, such notice may
be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Bondholders shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
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In the event that, by reason of the suspension of regular mail service
as a result of a strike, work stoppage or similar activity, it shall be
impractical to mail notice of any event to Bondholders when such notice is
required to be given pursuant to any provision of this Indenture, then any
manner of giving such notice as shall be satisfactory to the Trustee shall be
deemed to be a sufficient giving of such notice.
SECTION 13.06 CONFLICT WITH TRUST INDENTURE ACT.
If any provision hereof limits, qualifies or conflicts with another
provision hereof which is required to be included in this Indenture by any of
the provisions of TIA, such required provision shall control.
SECTION 13.07 EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 13.08 SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the Issuer shall bind
its successors and assigns, whether so expressed or not.
SECTION 13.09 SEPARABILITY.
In case any provision in this Indenture or in the Bonds shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 13.10 BENEFITS OF INDENTURE.
Nothing in this Indenture or in the Bonds, expressed or implied, shall
give to any Person, other than the parties hereto and their successors
hereunder, any separate trustee or co-trustee appointed hereunder and the
Bondholders, any benefit or any legal or equitable right, remedy or claim under
this Indenture.
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SECTION 13.11 LEGAL HOLIDAYS.
In the event that the date of any Payment Date, Redemption Date or any
other date on which principal of or interest on any Bond is proposed to be paid,
or any date on which mailing of notices by the Trustee to any Person is required
pursuant to any provision of the Indenture, shall not be a Business Day, then
(notwithstanding any other provision of the Bonds or this Indenture) payment or
mailing of such notice need not be made on such date, but may be made on the
next succeeding Business Day with the same force and effect as if made or mailed
on the nominal date of any such Payment Date, Redemption Date or other date for
the payment of principal of or interest on any Bond, or mailing of such notice,
as the case may be, and, in the case of payments, no interest shall accrue for
the period from and after any such nominal date, provided such payment is made
in full on such next succeeding Business Day.
SECTION 13.12 GOVERNING LAW.
This Indenture and each Bond shall be construed in accordance with and
governed by the laws of the State of New York applicable to agreements made and
to be performed therein.
SECTION 13.13 COUNTERPARTS.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
SECTION 13.14 TRUST OBLIGATION.
No recourse may be taken, directly or indirectly, against (i) the Trust
Company, (ii) the Administrator, (iii) the Trustee, (iv) any incorporator,
subscriber to the capital stock, stockholder, officer or director of the Trust
Company, the Administrator or the Trustee or of any predecessor or successor of
the Trust Company, the Administrator or the Trustee, (v) any Owner Participant,
or (vi) any partner, beneficiary, agent, officer, director, employee, or
successor or assign of any Owner Participant with respect to the Issuer's
obligations with respect to the Bonds or the obligations of the Issuer or the
Trustee under this Indenture or any certificate or other writing delivered in
connection herewith or therewith.
SECTION 13.15 AUTHORITY OF THE ADMINISTRATOR.
Each of the parties to this Indenture acknowledges that the Issuer and
the Owner Trustee have each appointed the Administrator to act as its agent to
perform the duties and obligations of the Issuer hereunder. Unless otherwise
instructed by the Issuer or the Owner Trustee, copies of all notices, requests,
demands and other documents to be delivered to the Issuer or the Owner Trustee
pursuant to the terms hereof shall be delivered to the Administrator. Unless
otherwise instructed by the Issuer or the Owner Trustee, all notices, requests,
demands and other documents to be executed or delivered, and any action to be
taken, by the Issuer or the Owner
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Trustee pursuant to the terms hereof may be executed, delivered and/or taken by
the Administrator pursuant to the Administration Agreement.
<PAGE>
IN WITNESS WHEREOF, the Issuer and the Trustee have caused this
Indenture to be duly executed by their respective officers thereunto duly
authorized, all as of the day and year first above written.
THE NATIONAL COLLEGIATE TRUST 1997-S1, a
trust acting through Delaware Trust
Capital Management, Inc., not in its
individual capacity but solely as Owner
Trustee under a Trust Agreement dated as
of February 26, 1997.
By:_________________________________
Name:
Title:
STATE STREET BANK AND TRUST COMPANY, as
Trustee
By:_________________________________
Name:
Title:
<PAGE>
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EXHIBIT A-1
FORM OF CLASS A BONDS
THE NATIONAL COLLEGIATE TRUST 1997-S1
a trust acting through
Delaware Trust Capital Management, Inc.
not in its Individual Capacity but solely
as Owner Trustee
GATESM RECEIVABLE ASSET-BACKED DEBT SECURITIES (GRADSSM)
______% CLASS A COLLATERALIZED STUDENT LOAN BONDS, SERIES 1997-S1
DUE: September 20, 2013
CLOSING DATE: April _____, 1997
THE PRINCIPAL AMOUNT OF THIS CLASS A BOND IS PAYABLE AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL OF THIS BOND AT ANY TIME MAY BE LESS THAN
THE AMOUNT SHOWN ON THE FACE HEREOF.
THIS CLASS A BOND REPRESENTS AN OBLIGATION OF THE ISSUER AND WILL NOT BE INSURED
OR GUARANTEED BY ANY GOVERNMENT AGENCY OR INSTRUMENTALITY, OR BY ANY EDUCATIONAL
INSTITUTION HAVING ANY INTEREST IN THE ISSUER, OR BY ANY OTHER PERSON OR ENTITY.
THIS CLASS A BOND IS ONE OF A DULY AUTHORIZED ISSUE OF THE ISSUER'S ______%
CLASS A COLLATERALIZED STUDENT LOAN BONDS, SERIES 1997-S1, DUE SEPTEMBER 20,
2013, WHICH MAY NOT BE TRANSFERRED EXCEPT UPON COMPLIANCE WITH THE TERMS OF THE
WITHIN-REFERENCED INDENTURE.
[DTC LEGEND]
NO TRANSFER OF A CLASS A BOND OR ANY INTEREST THEREIN MAY BE MADE TO: (A)(1) ANY
EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT, INCLUDING INDIVIDUAL
RETIREMENT ACCOUNTS AND ANNUITIES, KEOGH PLANS AND COLLECTIVE INVESTMENT FUNDS
AND SEPARATE ACCOUNTS IN WHICH SUCH PLANS, ACCOUNTS OR ARRANGEMENTS ARE INVESTED
(EACH, A "PLAN"), THAT IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT
OF 1974, AS AMENDED ("ERISA"), OR THE INTERNAL REVENUE CODE OF 1986 (THE
"CODE"), OR (2) ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING SUCH BOND OR
INTEREST THEREIN ON BEHALF OF, AS NAMED FIDUCIARY OF, AS TRUSTEE OF, OR WITH
ASSETS OF SUCH A PLAN, UNLESS THE PROSPECTIVE TRANSFEREE PROVIDES TO THE TRUSTEE
A CERTIFICATION OF FACTS AND AN OPINION OF COUNSEL THAT ESTABLISH TO THE
SATISFACTION OF THE TRUSTEE THAT SUCH TRANSFER WILL NOT RESULT IN A VIOLATION OF
SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE OR CAUSE THE SERVICER OR THE
TRUSTEE TO BE DEEMED A FIDUCIARY OF SUCH PLAN OR RESULT IN THE IMPOSITION OF AN
EXCISE TAX UNDER
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SECTION 4975 OF THE CODE; OR (B) ANY OTHER PERSON THAT DOES NOT PROVIDE A
CERTIFICATION TO THE TRUSTEE THAT (A)(1) AND (A)(2) DO NOT APPLY.
$___________________ CUSIP #______________
The National Collegiate Trust 1997-S1 (the "Issuer"), a trust duly organized and
existing under the laws of the State of Delaware acting through Delaware Trust
Capital Management, Inc., not in its individual capacity but solely as owner
trustee under a Trust Agreement, dated as of ______________________, 1997, as
amended and restated from time to time (herein referred to as the "Owner
Trustee"), for value received, hereby promises to pay to
__________________________ or registered assigns, the principal amount of
_________________________________ Dollars in semiannual payments on each March
20 and September 20 (the "Principal Payment Dates"), commencing September 20,
2000 and ending on or before September 20, 2013 (the "Stated Maturity" of such
final payment of principal), and to pay interest (computed on the basis of a
360-day year of twelve 30-day months) on each March 20 and September 20 (the
"Interest Payment Dates"), commencing on September 20, 1997, at the rate of
______% per annum, in an amount equal to the interest accrued on the unpaid
principal amount of this Class A Bond during the six-month period (or, for the
initial Interest Payment Date, the period commencing on the Closing Date) ending
on the last day preceding each such Interest Payment Date (each such period, an
"Interest Accrual Period"). All terms used in this Class A Bond that are not
defined herein shall have the meanings assigned to them in the Indenture.
This Class A Bond is one of a duly authorized issue of Class A Bonds designated
as The National Collegiate Trust 1997-S1, ______% Class A Collateralized Student
Loan Bonds, Series 1997-S1 (herein called the "Class A Bonds"), issued under an
Indenture, dated as of April 1, 1997 (herein called the "Indenture"), between
the Issuer and State Street Bank and Trust Company, as Trustee (the "Trustee",
which term includes any successor Trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights thereunder of the Issuer, the Owner Trustee,
the Trustee and the Holders of the Bonds and the terms upon which the Bonds are,
and are to be, authenticated and delivered. In addition, the Issuer has issued
subordinated bonds (the "Class B Bonds") in the aggregate principal amount of
$______________ pursuant to the Indenture. Payments on the Class B Bonds are
subordinated to payments on the Class A Bonds to the extent set forth herein and
in the Indenture.
On each Payment Date, the Trustee will apply all amounts held in the Collateral
Proceeds Account and the Reserve Fund in excess of the Interest Reserve Amount,
FIRST to the Class A Bonds, pro rata, for payment of accrued interest at the
related Bond Interest Rate; SECOND, to the Class B Bonds, pro rata, for the
payment of accrued interest on the Class B Bonds at the related Bond Interest
Rate; THIRD, to the payment of any shortfall in the Interest Reserve Amount for
the related Interest Accrual Period; provided that, if after giving effect to
all payments of
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interest and principal on the Bonds on such Payment Date, the Interest Reserve
Amount equals or exceeds the Aggregate Current Principal Amount of the
Outstanding Bonds, then the Bonds will be immediately due and payable; FOURTH,
to the payment of any unpaid amount due the Trustee pursuant to the Indenture;
FIFTH, to the payment of any unpaid amount due any Accountants pursuant to the
Indenture; SIXTH, to the payment of any unpaid amount due the Owner Trustee of
the Issuer pursuant to the Trust Agreement between the Owner Trustee and the
Owner Participants; SEVENTH, to the payment of any unpaid amount due the
Administrator; EIGHTH, on each Principal Payment Date, to the Class A Bonds for
the payment, of any unpaid principal amount of the Class A Bonds; NINTH, on each
Principal Payment Date following payment in full of the Class A Bonds (which
initially may be the same Principal Payment Date on which the Class A Bonds are
paid in full), to the Class B Bonds for the payment of any unpaid principal
amount of the Class B Bonds; and TENTH, if such Payment Date is not a Principal
Payment Date, any remaining amounts in the Collateral Proceeds Account shall be
deposited in the Reserve Fund.
The principal of, and interest on, this Class A Bond 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; provided that as long as the
Class A Bonds are registered in the name of the Depository or its nominee and
maintained in book-entry form, the interest on and principal of this Class A
Bond shall be payable to the Depository. In the event that the Class A Bonds are
no longer maintained as Book-Entry Bonds in accordance with the Indenture, the
interest on and principal of this Class A Bond shall be paid by check mailed to
the Person entitled thereto at his address as it appears on the Bond Register,
except that the final payment due on maturity or redemption in full of this
Class A Bond shall be made only upon presentation and surrender of this Class A
Bond at the office or agency of the Issuer maintained for such purpose.
(i) The Class A Bonds and the Class B Bonds shall be redeemable, pro rata, at
the option of the Issuer in part, not to exceed five percent (5%) of the
Aggregate Current Principal Amount of Outstanding Bonds, upon notice to the
Trustee by the Issuer at any time during the 60 day period following the Closing
Date, and (ii) The Class A Bonds and upon their retirement, the Class B Bonds,
shall be redeemable at the option of the Issuer in part on any Payment Date
prior to the first Principal Payment Date, in an amount equal to any Prepayments
collected by the Servicer during the related Prepayments Collection Period, at
the Redemption Price. Notice of any Issuer Redemption shall be mailed or
delivered by the Issuer or by the Trustee at least fifteen days prior to the
date set for such redemption.
Notwithstanding the foregoing the entire unpaid principal amount of the Class A
Bonds shall be due and payable, if not then previously paid, on the Stated
Maturity.
If an Event of Default as defined in the Indenture shall occur and be
continuing, the Class A Bonds may become or be declared due and payable in the
manner and with the effect provided in the Indenture. If any such acceleration
of maturity occurs prior to the Stated Maturity of this Class A Bond, the amount
payable to the Holder of this Class A Bond will be equal to the aggregate unpaid
principal amount of this Class A Bond on the date this Class A Bond becomes so
due and payable, together with the accrued interest on such unpaid principal
amount to such
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date. Following the acceleration of the maturity of the Class A Bonds, all
amounts collected as proceeds of the collateral securing the Class A Bonds or
otherwise shall be applied, after the reimbursement of certain expenses of the
Trustee, ratably among all Class A Bonds, without preference or priority, first
to the payment of interest and then to the payment of principal.
A Bond Owner of a Book-Entry Bond shall be entitled to transfer beneficial
ownership of such Book-Entry Bond only upon compliance with the procedures
established by such Bond Owner's brokerage firm and by the participating firms
acting as such brokerage firm's agent, if any. No Bond Owner shall be entitled
to receive a bond evidencing ownership of his Book-Entry Bond. In the event the
Class A Bonds are no longer maintained as Book-Entry Bonds, the transfer of
Class A Bonds shall be effected as provided for in the Indenture, subject to the
limitations therein set forth.
Prior to the due presentment for registration of transfer of this Class A Bond,
the Issuer, the Trustee and any agent of the Issuer or the Trustee may treat the
Person in whose name this Class A Bond is registered (i) on any Record Date, for
purposes of making payments of interest and principal (other than a payment in
full of all unpaid principal of a Class A Bond), and (ii) on any date for any
other purpose, as the owner hereof, and neither the Issuer, the Trustee nor any
such agent shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Bonds under the Indenture at any
time by the Issuer with the consent of the Holders of Bonds representing
two-thirds of the Aggregate Current Principal Amount of all Bonds by an Event of
Default at the time Outstanding. The Indenture also contains provisions
permitting the Holders of Bonds representing specified percentages of the
Aggregate Current Principal Amount of the Bonds at the time Outstanding on
behalf of the Holders of all the Bonds, to waive compliance by the Issuer with
certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder, at
the time of the giving thereof, of this Class A Bond (or any one or more
Predecessor Bonds) shall be conclusive and binding upon such Holder and upon all
future Holders of this Class A Bond and of any Class A Bond issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof whether
or not notation of such consent or waiver is made upon this Class A Bond. The
Indenture also permits the Issuer and the Trustee to amend or waive certain
terms and conditions set forth in the Indenture without the consent of Holders
of the Bonds issued thereunder.
The Class A Bonds are issuable only in registered form in denominations as
provided in the Indenture and subject to certain limitations therein set forth.
The Class A Bonds are exchangeable for a like aggregate initial principal amount
of Class A Bonds of different authorized denominations, as requested by the
Holder surrendering same.
Anything herein to the contrary notwithstanding, neither the Trust Company, any
Owner Participant, nor any of their respective partners, beneficiaries, agents,
officers, directors, employees or successors or assigns nor any other person
shall be personally liable for, nor shall recourse be had to any of them for the
payment or performance of, or omission to perform, any of the
<PAGE>
-5-
covenants, obligations or indemnifications contained in this Class A Bond or in
the Indenture, it being expressly understood that said covenants, obligations
and indemnifications have been made by the Owner Trustee for the sole purpose of
binding the respective interests of the Owner Participants and the Owner Trustee
in the assets of the Issuer. The Holder of this Class A Bond by the acceptance
hereof agrees that in the case of an Event of Default under the Indenture, the
Holder shall have no claim resulting against any of the foregoing for any
deficiency, loss or claim resulting therefrom; provided, however, that nothing
contained herein shall be taken to prevent recourse and enforcement solely
against the Trust Estate and the Issuer for any and all liabilities, obligations
and undertakings contained in the Indenture or in this Class A Bond.
The Owner Trustee has executed this Class A Bond on behalf of the Issuer not in
its individual capacity but solely as owner trustee under the Trust Agreement
and the Owner Trustee shall be liable hereunder only in respect of the assets of
the trust created by such Trust Agreement.
The remedies of the Holder hereof as provided herein, or in the Indenture, shall
be cumulative and concurrent and may be pursued solely against the assets of the
Issuer. No failure on the part of Holder in exercising any right or remedy
hereunder shall operate as waiver or release thereof, nor shall any single or
partial exercise of any such right or remedy preclude any other further exercise
thereof or the exercise of any other right or remedy hereunder.
AS PROVIDED IN THE INDENTURE, THIS CLASS A BOND AND THE INDENTURE SHALL BE
CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.
No reference herein to the Indenture and no provision of this Class A Bond or of
the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional to the extent permitted by applicable law, to pay the
principal of, and interest on, this Class A Bond at the times, place and rate,
and in the coin or currency, herein prescribed.
Unless the certificate of authentication hereon has been executed by the Trustee
by manual signature, this Class A Bond shall not be entitled to any benefit
under the Indenture, or be valid or obligatory for any purpose.
<PAGE>
-6-
IN WITNESS WHEREOF, the Issuer has executed this instrument through Delaware
Trust Capital Management, Inc., not in its individual capacity, but solely as
Owner Trustee under the Trust Agreement.
Dated: April _____, 1997 THE NATIONAL
COLLEGIATE TRUST 1997-S1, a trust acting
through Delaware Trust Capital
Management, Inc., not in its individual
capacity but solely as owner trustee
under the Trust Agreement dated as of
______________, 1997
By________________________________
[Title]
Attest:
__________________________
[Title]
This is one of the Class A Bonds referred to in the within-mentioned Indenture.
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By_______________________________
Authorized Signatory
<PAGE>
-7-
FOR VALUE RECEIVED, __________________________ hereby sells, assigns and
transfers unto ______________________________ the within Class A Bond of The
National Collegiate Trust 1997-S1 standing in the name(s) of the undersigned in
the Bond Register of the Issuer with respect to such Class A Bond and does
hereby irrevocably constitute and appoint ________________ Attorney to transfer
such Class A Bond in such Bond Register, with full power of substitution in the
premises.
Please insert Social Security
or other identifying number of
assignee:_____________________
Dated: ___________________________________________________
[Signature]
__________________________
[Signature]
Signature Guarantee: Notice: The signature(s) to this assignment
must correspond with the name(s) as written
__________________________ upon the face of this Bond in every
Authorized Officer particular without alteration or any change
whatsoever. The signature(s) must be
guaranteed by a commercial bank or trust
__________________________ company located, or having a correspondent
Name of Institution located, in the City of New York or the city
in which the Corporate Trust Office is
located, or by a member firm of a national
securities exchange. Notarized or witnessed
signatures are not acceptable as guaranteed
signatures.
<PAGE>
EXHIBIT A-2
-----------
FORM OF CLASS B BONDS
THE NATIONAL COLLEGIATE TRUST 1997-S1
a trust acting through
Delaware Trust Capital Management, Inc.
not in its Individual Capacity but solely
as Owner Trustee
GATESM RECEIVABLE ASSET-BACKED DEBT SECURITIES (GRADSSM)
_____% CLASS B COLLATERALIZED STUDENT LOAN BONDS, SERIES 1997-S1
DUE: September 20, 2013
CLOSING DATE: ___________________, 1997
THE PRINCIPAL AMOUNT OF THIS CLASS B BOND IS PAYABLE AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL OF THIS BOND AT ANY TIME MAY BE LESS THAN
THE AMOUNT SHOWN ON THE FACE HEREOF.
THIS CLASS B BOND REPRESENTS AN OBLIGATION OF THE ISSUER AND WILL NOT BE INSURED
OR GUARANTEED BY ANY GOVERNMENT AGENCY OR INSTRUMENTALITY, OR BY ANY EDUCATIONAL
INSTITUTION HAVING ANY INTEREST IN THE ISSUER, OR BY ANY OTHER PERSON OR ENTITY.
THIS CLASS B BOND IS ONE OF A DULY AUTHORIZED ISSUE OF THE ISSUER'S _____% CLASS
B COLLATERALIZED STUDENT LOAN BONDS, SERIES 1997-S1, DUE SEPTEMBER 20, 2013,
WHICH MAY NOT BE TRANSFERRED EXCEPT UPON COMPLIANCE WITH THE TERMS OF THE
WITHIN-REFERENCED INDENTURE.
[DTC LEGEND]
NO TRANSFER OF A CLASS B BOND OR ANY INTEREST THEREIN MAY BE MADE TO: (A)(1) ANY
EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT, INCLUDING INDIVIDUAL
RETIREMENT ACCOUNTS AND ANNUITIES, KEOGH PLANS AND COLLECTIVE INVESTMENT FUNDS
AND SEPARATE ACCOUNTS IN WHICH SUCH PLANS, ACCOUNTS OR ARRANGEMENTS ARE INVESTED
(EACH, A "PLAN"), THAT IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT
OF 1974, AS AMENDED ("ERISA"), OR THE INTERNAL REVENUE CODE OF 1986 (THE
"CODE"), OR (2) ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING SUCH BOND OR
INTEREST THEREIN ON BEHALF OF, AS NAMED FIDUCIARY OF, AS TRUSTEE OF, OR WITH
ASSETS OF SUCH A PLAN, UNLESS THE PROSPECTIVE TRANSFEREE PROVIDES TO THE TRUSTEE
A CERTIFICATION OF FACTS AND AN OPINION OF COUNSEL THAT ESTABLISH TO THE
SATISFACTION OF THE TRUSTEE THAT SUCH TRANSFER WILL NOT RESULT IN A VIOLATION OF
SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE OR CAUSE THE SERVICER OR THE
TRUSTEE TO BE DEEMED A FIDUCIARY
<PAGE>
-2-
OF SUCH PLAN OR RESULT IN THE IMPOSITION OF AN EXCISE TAX UNDER SECTION 4975 OF
THE CODE; OR (B) ANY OTHER PERSON THAT DOES NOT PROVIDE A CERTIFICATION TO THE
TRUSTEE THAT (A)(1) AND (A)(2) DO NOT APPLY.
$___________________ CUSIP #______________
The National Collegiate Trust 1997-S1 (the "Issuer"), a trust duly organized and
existing under the laws of the State of Delaware acting through Delaware Trust
Capital Management, Inc., not in its individual capacity but solely as owner
trustee under a Trust Agreement, dated as of ____________________, 1997, as
amended and restated from time to time (herein referred to as the "Owner
Trustee"), for value received, hereby promises to pay to
__________________________ or registered assigns, the principal amount of
_________________________________ Dollars in semiannual payments on each March
20 and September 20 (the "Principal Payment Dates"), commencing following the
payment in full of the Class A Bonds (which initially may be the same Principal
Payment Date on which the Class A Bonds are paid in full), and ending on or
before September 20, 2013 (the "Stated Maturity" of such final payment of
principal), and to pay interest (computed on the basis of a 360-day year of
twelve 30-day months) on each March 20 and September 20 (the "Interest Payment
Dates"), commencing on September 20, 1997, at the rate of _____% per annum, in
an amount equal to the interest accrued on the unpaid principal amount of this
Class B Bond during the six-month period (or, for the initial Interest Payment
Date, the period commencing on the Closing Date) ending on the last day
preceding each such Interest Payment Date (each such period, an "Interest
Accrual Period"). All terms used in this Class B Bond that are not defined
herein shall have the meanings assigned to them in the Indenture.
This Bond is one of a duly authorized issue of Class B Bonds designated as The
National Collegiate Trust 1997-S1, _____% Class B Collateralized Student Loan
Bonds, Series 1997-S1 (herein called the "Bonds"), issued under an Indenture,
dated as of April 1, 1997 (herein called the "Indenture"), between the Issuer
and State Street Bank and Trust Company, as Trustee (the "Trustee", which term
includes any successor Trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights thereunder of the Issuer, the Owner Trustee, the Trustee and
the Holders of the Bonds and the terms upon which the Bonds are, and are to be,
authenticated and delivered. In addition, the Issuer has issued senior bonds
(the "Class A Bonds") in the aggregate principal amount of $___________________
pursuant to the Indenture. Payments on the Class B Bonds are subordinated to
payments on the Class A Bonds to the extent set forth herein and in the
Indenture.
On each Payment Date, the Trustee will apply all amounts held in the Collateral
Proceeds Account and the Reserve Fund in excess of the Interest Reserve Amount,
FIRST to the Class A Bonds, pro rata, for payment of accrued interest on the
Class A Bonds at the related Bond Interest Rate; SECOND, to the Class B Bonds,
pro rata, for the payment of accrued interest on the
<PAGE>
-3-
Class B Bonds at the related Bond Interest Rate; THIRD, to the payment of any
shortfall in the Interest Reserve Amount for the related Interest Accrual
Period; provided that, if after giving effect to all payments of interest and
principal on the Bonds on such Payment Date, the Interest Reserve Amount equals
or exceeds the Aggregate Current Principal Amount of the Outstanding Bonds, then
the Bonds will be immediately due and payable; FOURTH, to the payment of any
unpaid amount due the Trustee pursuant to the Indenture; FIFTH, to the payment
of any unpaid amount due any Accountants pursuant to the Indenture; SIXTH, to
the payment of any unpaid amount due the Owner Trustee of the Issuer pursuant to
the Trust Agreement between the Owner Trustee and the Owner Participants;
SEVENTH, to the payment of any unpaid amount due the Administrator; EIGHTH, on
each Principal Payment Date, to the Class A Bonds for the payment of any unpaid
principal amount of the Class A Bonds; NINTH, on each Principal Payment Date
following payment in full of the Class A Bonds (which initially may be the same
Principal Payment Date on which the Class A Bonds are paid in full), to the
Class B Bonds for the payment of any unpaid principal amount of the Class B
Bonds; and TENTH, if such Payment Date is not a Principal Payment Date, any
remaining amounts in the Collateral Proceeds Account shall be deposited in the
Reserve Fund.
The principal of, and interest on, this Class B Bond 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; provided that as long as the
Class B Bonds are registered in the name of the Depository or its nominee and
maintained in book-entry form, the interest on and principal of this Class B
Bond shall be payable to the Depository. In the event that the Class B Bonds are
no longer maintained as Book-Entry Bonds in accordance with the Indenture, the
interest on and principal of this Class B Bond shall be paid by check mailed to
the Person entitled thereto at his address as it appears on the Bond Register,
except that the final payment due on maturity or redemption in full of this Bond
shall be made only upon presentation and surrender of this Bond at the office or
agency of the Issuer maintained for such purpose.
(i) The Class A Bonds and the Class B Bonds shall be redeemable, pro rata, at
the option of the Issuer in part, not to exceed five percent (5%) of the
Aggregate Current Principal Amount of Outstanding Bonds, upon notice to the
Trustee by the Issuer at any time during the 60 day period following the Closing
Date, (ii) Following payment in full of the Class A Bonds, the Class B Bonds
shall be redeemable at the option of the Issuer in part on any Payment Date
prior to the first Principal Payment Date, in an amount equal to any Prepayments
collected by the Servicer during the related Collection Period and (iii) the
Class B Bonds shall be redeemable in whole, when the Aggregate Current Principal
Amount of Outstanding Bonds is ten percent (10%) or less of the initial
outstanding principal amount of Outstanding Bonds at the Redemption Price.
Notice of any Issuer Redemption shall be mailed or delivered by the Issuer or by
the Trustee at least fifteen days prior to the date set for such redemption.
Notwithstanding the foregoing the entire unpaid principal amount of the Class B
Bonds shall be due and payable, if not then previously paid, on the Stated
Maturity.
If an Event of Default as defined in the Indenture shall occur and be
continuing, the Class B Bonds may become or be declared due and payable in the
manner and with the effect provided
<PAGE>
-4-
in the Indenture. If any such acceleration of maturity occurs prior to the
Stated Maturity of this Bond, the amount payable to the Holder of this Class B
Bond will be equal to the aggregate unpaid principal amount of this Class B Bond
on the date this Class B Bond becomes so due and payable, together with the
accrued interest on such unpaid principal amount to such date. Following the
acceleration of the maturity of the Class B Bonds, all amounts collected as
proceeds of the collateral securing the Bonds or otherwise shall be applied,
after the reimbursement of certain expenses of the Trustee, ratably among all
Class A Bonds, without preference or priority, first to the payment of interest
and then to the payment of principal and then ratably among all Class B Bonds,
without preference or priority, first to the payment of interest and then to the
payment of principal.
A Bond Owner of a Book-Entry Bond shall be entitled to transfer beneficial
ownership of such Book-Entry Bond only upon compliance with the procedures
established by such Bond Owner's brokerage firm and by the participating firms
acting as such brokerage firm's agent, if any. No Bond Owner shall be entitled
to receive a bond evidencing ownership of his Book-Entry Bond. In the event the
Class B Bonds are no longer maintained as Book-Entry Bonds, the transfer of
Class B Bonds shall be effected as provided for in the Indenture, subject to the
limitations therein set forth.
Prior to the due presentment for registration of transfer of this Class B Bond,
the Issuer, the Trustee and any agent of the Issuer or the Trustee may treat the
Person in whose name this Class B Bond is registered (i) on any Record Date, for
purposes of making payments of interest and principal (other than a payment in
full of all unpaid principal of a Bond), and (ii) on any date for any other
purpose, as the owner hereof, and neither the Issuer, the Trustee nor any such
agent shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Bonds under the Indenture at any
time by the Issuer with the consent of the Holders of Bonds representing
two-thirds of the Aggregate Current Principal Amount of all Class B Bonds at the
time Outstanding. The Indenture also contains provisions permitting the Holders
of Bonds representing specified percentages of the Aggregate Current Principal
Amount of the Bonds of each Class affected by an Event of Default at the time
Outstanding on behalf of the Holders of all the Bonds, to waive compliance by
the Issuer with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Holder, at the time of the giving thereof, of this Class B Bond (or any one or
more Predecessor Bonds) shall be conclusive and binding upon such Holder and
upon all future Holders of this Class B Bond and of any Class B Bond issued upon
the registration of transfer hereof or in exchange herefor or in lieu hereof
whether or not notation of such consent or waiver is made upon this Class B
Bond. The Indenture also permits the Issuer and the Trustee to amend or waive
certain terms and conditions set forth in the Indenture without the consent of
Holders of the Class B Bonds issued thereunder.
The Class B Bonds are issuable only in registered form in denominations as
provided in the Indenture and subject to certain limitations therein set forth.
The Class B Bonds are
<PAGE>
-5-
exchangeable for a like aggregate initial principal amount of Class B Bonds of
different authorized denominations, as requested by the Holder surrendering
same.
Anything herein to the contrary notwithstanding, neither the Trust Company, any
Owner Participant, nor any of their respective partners, beneficiaries, agents,
officers, directors, employees or successors or assigns nor any other person
shall be personally liable for, nor shall recourse be had to any of them for the
payment or performance of, or omission to perform, any of the covenants,
obligations or indemnifications contained in this Class B Bond or in the
Indenture, it being expressly understood that said covenants, obligations and
indemnifications have been made by the Owner Trustee for the sole purpose of
binding the respective interests of the Owner Participants and the Owner Trustee
in the assets of the Issuer. The Holder of this Class B Bond by the acceptance
hereof agrees that in the case of an Event of Default under the Indenture, the
Holder shall have no claim resulting against any of the foregoing for any
deficiency, loss or claim resulting therefrom; provided, however, that nothing
contained herein shall be taken to prevent recourse and enforcement solely
against the Trust Estate and the Issuer for any and all liabilities, obligations
and undertakings contained in the Indenture or in this Bond.
The Owner Trustee has executed this Class B Bond on behalf of the Issuer not in
its individual capacity but solely as owner trustee under the Trust Agreement
and the Owner Trustee shall be liable hereunder only in respect of the assets of
the trust created by such Trust Agreement.
The remedies of the Holder hereof as provided herein, or in the Indenture, shall
be cumulative and concurrent and may be pursued solely against the assets of the
Issuer. No failure on the part of Holder in exercising any right or remedy
hereunder shall operate as waiver or release thereof, nor shall any single or
partial exercise of any such right or remedy preclude any other further exercise
thereof or the exercise of any other right or remedy hereunder.
AS PROVIDED IN THE INDENTURE, THIS BOND AND THE INDENTURE SHALL BE CONSTRUED IN
ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF NEW YORK APPLICABLE
TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.
No reference herein to the Indenture and no provision of this Class B Bond or of
the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional to the extent permitted by applicable law, to pay the
principal of, and interest on, this Bond at the times, place and rate, and in
the coin or currency, herein prescribed.
Unless the certificate of authentication hereon has been executed by the Trustee
by manual signature, this Class B Bond shall not be entitled to any benefit
under the Indenture, or be valid or obligatory for any purpose.
<PAGE>
-6-
IN WITNESS WHEREOF, the Issuer has executed this instrument through Delaware
Trust Capital Management, Inc., not in its individual capacity, but solely as
Owner Trustee under the Trust Agreement.
Dated: _________________, 1997
THE NATIONAL COLLEGIATE
TRUST 1997-S1, a trust
acting through Delaware
Trust Capital Management,
Inc., not in its individual
capacity but solely as
owner trustee under the
Trust Agreement dated as of
_________________, 1997
By________________________________
[Title]
Attest:
__________________________
[Title]
This is one of the Class B Bonds referred to in the within-mentioned Indenture.
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By_______________________________
Authorized Signatory
<PAGE>
-7-
FOR VALUE RECEIVED, __________________________ hereby sells, assigns and
transfers unto ______________________________ the within Class B Bond of The
National Collegiate Trust 1997-S1 standing in the name(s) of the undersigned in
the Bond Register of the Issuer with respect to such Bond and does hereby
irrevocably constitute and appoint ________________ Attorney to transfer such
Bond in such Bond Register, with full power of substitution in the premises.
Please insert Social Security
or other identifying number of
assignee:_____________________
Dated: ___________________________________________________
[Signature]
__________________________
[Signature]
Signature Guarantee: Notice: The signature(s) to this assignment
must correspond with the name(s) as written
__________________________ upon the face of this Bond in every
Authorized Officer particular without alteration or any change
whatsoever. The signature(s) must be
guaranteed by a commercial bank or trust
__________________________ company located, or having a correspondent
Name of Institution located, in the City of New York or the city
in which the Corporate Trust Office is
located, or by a member firm of a national
securities exchange. Notarized or witnessed
signatures are not acceptable as guaranteed
signatures.
<PAGE>
EXHIBIT B
SERVICING AGREEMENT
<PAGE>
EXHIBIT C
CUSTODIAL AGREEMENT
<PAGE>
EXHIBIT D
ADMINISTRATION AGREEMENT
<PAGE>
EXHIBIT E
DTC LETTER AGREEMENT
<PAGE>
SCHEDULE I
----------
Schedule of Student Loans
<PAGE>
SCHEDULE II
-----------
Calculation of Servicing Fee
The Servicer will be entitled to a monthly fee for its services (the
"Servicing Fee") in an amount based upon the aggregate principal balance of the
Student Loans serviced at the end of each month, multiplied by the applicable
Servicing Fee divided by twelve, equal to the following:
Time Period Servicing Fee
----------- -------------
Through September 2000 0.46%
October 2000 through September 2005 0.66%
October 2005 through September 2009 0.86%
October 2009 through September 2013 1.00%
ADMINISTRATION AGREEMENT
among
THE NATIONAL COLLEGIATE TRUST 1997-S1,
as Issuer
DELAWARE TRUST CAPITAL MANAGEMENT, INC.,
as Owner Trustee
STATE STREET BANK AND TRUST COMPANY,
as Indenture Trustee
and
FIRST MARBLEHEAD DATA SERVICES INC.,
as Administrator
Dated as of April 1, 1997
<PAGE>
This ADMINISTRATION AGREEMENT dated as of April 1, 1997 (as
amended from time to time, the "Agreement"), among THE NATIONAL COLLEGIATE TRUST
1997-S1, a Delaware business trust (the "Issuer"), DELAWARE TRUST CAPITAL
MANAGEMENT, INC., a Delaware trust company (the "Owner Trustee"), STATE STREET
BANK AND TRUST COMPANY, a Massachusetts trust company (the "Indenture Trustee"),
and FIRST MARBLEHEAD DATA SERVICES INC., a Delaware corporation (the
"Administrator"),
W I T N E S S E T H :
WHEREAS, the Issuer is issuing: (a) its 7.45% Class A
Collateralized Student Loan Bonds, Series 1997-S1 and its 8.25% Class B
Collateralized Student Loan Bonds, Series 1997-S1 (the "Bonds") pursuant to the
Indenture dated as of April 1, 1997 (the "Indenture"), between the Issuer and
the Indenture Trustee and (b) its Trust Certificates pursuant to the Trust
Agreement dated as of February 26, 1997 (the "Trust Agreement") between the
Owner Trustee and The National Collegiate Trust (together with its successors in
interest, the "Owners"). Capitalized terms used and not otherwise defined herein
shall have the meanings assigned to such terms in the Trust Agreement or
Indenture (the "Basic Documents");
WHEREAS, pursuant to the Basic Documents, the Issuer and the
Owner Trustee are required to perform certain duties in connection with (a) the
Student Loan Notes and other collateral pledged pursuant to the Indenture (the
"Collateral") and (b) the Bonds (the registered holders of which are being
referred to herein as the "Bondholders");
WHEREAS, the Issuer and the Owner Trustee desire to have the
Administrator perform certain of the duties of the Issuer referred to in the
Basic Documents and any other documents signed by the Owner Trustee on behalf of
the Issuer (collectively, the "Trust Related Agreements") and to provide such
additional services consistent with the terms of this Agreement and the Trust
Related Agreements as the Issuer and the Owner Trustee may from time to time
request; and
WHEREAS, the Administrator has the capacity to provide the
services required hereby and is willing to perform such services for the Issuer
and the Owner Trustee on the terms set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants
contained herein, and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties agree as follows:
1. DUTIES OF THE ADMINISTRATOR.
(a) DUTIES WITH RESPECT TO THE TRUST RELATED AGREEMENTS.
(i) The Administrator agrees to perform all its
duties as Administrator and the duties of the Issuer under the Trust Related
Agreements. In addition, the Administrator
<PAGE>
shall consult with the Owner Trustee regarding the duties of the Issuer under
the Trust Related Agreements. The Administrator shall monitor the performance of
the Issuer and shall advise the Owner Trustee when action is necessary to comply
with the Issuer's duties under the Trust Related Agreements. The Administrator
shall prepare for execution by the Issuer, or shall cause the preparation by
other appropriate persons or entities of, all such documents, reports, filings,
instruments, certificates and opinions that it shall be the duty of the Issuer
to prepare, file or deliver pursuant to the Trust Related Agreements. In
furtherance of the foregoing, the Administrator shall take all appropriate
action that is the duty of the Issuer to take pursuant to the Indenture
including, without limitation, such of the foregoing as are required with
respect to the following matters under the Indenture (references are to sections
of the Indenture):
(A) the direction to the Indenture Trustee by Issuer
Order to deposit moneys with Paying Agents, if any, other than
the Indenture Trustee (Section 9.02);
(B) the administration of the Issuer's obligations as
to the satisfaction and discharge of the Indenture and the
preparation of an Officer's Certificate and the obtaining of
the Opinion of Counsel relating thereto (Section 5.01);
(C) the preparation and delivery of notice to
Bondholders of the removal of the Indenture Trustee and the
appointment of a successor Indenture Trustee (Section 7.10);
(D) the preparation and, after execution by the
Issuer, the filing with the Commission, any applicable state
agencies and the Indenture Trustee of documents required to be
filed on a periodic basis with, and summaries thereof as may
be required by rules and regulations prescribed by, the
Commission and any applicable state agencies and the
transmission of such summaries, as necessary, to the
Bondholders (Section 8.04);
(E) the preparation of an Issuer Order and Officer's
Certificate and the obtaining of an Opinion of Counsel, if
necessary, for the release of property of the Trust Estate
(Sections 4.05 and 4.06);
(F) the preparation of Issuer Requests and the
obtaining of Opinions of Counsel with respect to the execution
of supplemental indentures and the mailing to the Bondholders
of notices with respect to such supplemental indentures
(Sections 10.01 and 10.02);
(G) the execution and delivery of new Bonds
conforming to any supplemental indenture (Section 10.06);
(H) the preparation and delivery of Issuer Order and
Officer's Certificates and providing an Opinion of Counsel, if
necessary, for the release of property from the lien of the
Indenture (Sections 4.04, 4.06 and 4.07);
2
<PAGE>
(I) the payment of all expenses in connection with
the issuance of the Bonds (Section 7.07);
(J) the redemption of the Bonds and the related
notice to the Indenture Trustee (Sections 11.01 and 11.02);
and
(K) the furnishing of names and addresses of the
Bondholders to the Indenture Trustee (Section 8.01).
(ii) the Administrator will:
(A) indemnify the Indenture Trustee and its
agents for, and hold them harmless against, any losses,
liability or expense, including reasonable attorneys fees and
expenses, incurred without willful misconduct, negligence, or
bad faith on their part, arising out of the willful
misconduct, negligence or bad faith of the Administrator in
the performance of the transactions contemplated by this
Agreement; and
(B) indemnify the Issuer and the Owner
Trustee and their respective agents for, and hold them
harmless against, any losses, liability or expense, including
reasonable attorneys fees and expenses, incurred without
negligence, willful misconduct or bad faith on their part,
arising out of the willful misconduct, negligence or bad faith
of the Administrator in the performance of the transactions
contemplated by this Agreement;
PROVIDED, HOWEVER, that the Administrator shall not be required to indemnify
either the Indenture Trustee, the Issuer or the Owner Trustee pursuant to
Subsection (ii)(A) or (B) so long as the Administrator has acted pursuant to the
instructions of the Owner Trustee or the Owners in accordance with Subsection
(c) of Section 1 of this Agreement.
(b) ADDITIONAL DUTIES. (i) In addition to the duties of the
Administrator set forth above, the Administrator shall perform, or cause to be
performed, its duties and obligations and the duties and obligations of the
Owner Trustee on behalf of the Issuer under the Trust Agreement including,
without limitation, those duties and obligations set forth on Schedule A hereto.
In furtherance thereof, the Issuer shall execute and deliver to the
Administrator and to each successor Administrator appointed pursuant to the
terms hereof, one or more powers of attorney substantially in the form of
Exhibit A hereto, appointing the Administrator the attorney-in-fact of the
Issuer for the purpose of executing on behalf of the Issuer all such documents,
reports, filings, instruments, certificates and opinions. Subject to Section 4
of this Agreement, and in accordance with the directions of the Issuer and the
Owner Trustee, the Administrator shall administer, perform or supervise the
performance of such other activities in connection with the Collateral
(including the Trust Related Agreements) as are not covered by any of the
foregoing provisions and as are expressly requested by the Issuer or the Owner
Trustee and are reasonably within the capability of the Administrator. The
Administrator shall be responsible for any filings required by the Issuer under
the Securities Exchange Act of 1934, as amended.
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(ii) In carrying out the foregoing duties or any
of its other obligations under this Agreement, the Administrator may enter into
transactions or otherwise deal with any of its affiliates; PROVIDED, HOWEVER,
that the terms of any such transactions or dealings shall be in accordance with
any directions received from the Issuer and shall be, in the Administrator's
opinion, no less favorable to the Issuer than would be available from
unaffiliated parties.
(iii) In carrying out any of its obligations under
this Agreement, the Administrator may act either directly or through agents,
attorneys, accountants, independent contractors and auditors and enter into
agreements with any of them.
(c) NON-MINISTERIAL MATTERS.
(i) With respect to matters that in the
reasonable judgment of the Administrator are non-ministerial, the Administrator
shall not be under any obligation to take any action, and in any event shall not
take any action unless the Administrator shall have received instructions from
the Owner Trustee or the Owners in accordance with the Trust Agreement. For the
purpose of the preceding sentence, "non-ministerial matters" shall include,
without limitation:
(A) the amendment of or any supplement to the
Trust Related Agreements;
(B) the initiation of any claim or lawsuit by
the Issuer and the compromise of any action, claim or
lawsuit brought by or against the Issuer;
(C) the appointment of successor Administrators and
successor Indenture Trustees pursuant to the Indenture, or the
consent to the assignment by the Administrator or Indenture
Trustee of its obligations under the Indenture; and
(D) the removal of the Indenture Trustee.
(ii) Notwithstanding anything to the contrary in
this Agreement, the Administrator shall not be obligated to, and shall not (x)
make any payments to the Bondholders under the Trust Related Agreements, (y)
sell the Trust Estate pursuant to the Indenture or (z) take any action that the
Issuer directs the Administrator not to take on its behalf.
(d) ACTIONS ON BEHALF OF THE OWNERS. Pursuant to Section 4.06
of the Trust Agreement, each Owner has appointed the Administrator as its true
and lawful attorney-in-fact with respect to certain matters described in such
Section 4.06.
2. RECORDS. The Administrator shall maintain
appropriate books of account and records relating to services performed
hereunder, which books of account and records shall be accessible for inspection
by the Issuer, the Indenture Trustee and the Owners at any time during normal
business hours.
3. COMPENSATION. As compensation for the performance of
the Administrator's obligations under this Agreement and as reimbursement for
its expenses related
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thereto, the Administrator shall be entitled to an Administration Fee equal to
(i) on each Payment Date, .075% of the outstanding principal balance of the
Bonds as of the immediately preceding Payment Date plus (ii) on each
Distribution Date after the Bonds have been retired, 5% of the Net Cash Flow to
be distributed to the Owners on such Distribution Date, determined in accordance
with the Trust Agreement, which in each case shall be solely an obligation of
the Issuer.
4. ADDITIONAL INFORMATION TO BE FURNISHED TO THE ISSUER. The
Administrator shall furnish to the Issuer from time to time such additional
information regarding the Collateral as the Issuer shall reasonably request.
5. INDEPENDENCE OF THE ADMINISTRATOR. For all purposes of this
Agreement, the Administrator shall be an independent contractor and shall not be
subject to the supervision of the Issuer or the Owner Trustee with respect to
the manner in which it accomplishes the performance of its obligations
hereunder. Unless expressly authorized by the Issuer, the Administrator shall
have no authority to act for or represent the Issuer or the Owner Trustee in any
way and shall not otherwise be deemed an agent of the Issuer or the Owner
Trustee.
6. NO JOINT VENTURE. Nothing contained in this Agreement (i)
shall constitute the Administrator and either of the Issuer, the Owner Trustee
or any Owner as members of any partnership, joint venture, association,
syndicate, unincorporated business or other separate entity, (ii) shall be
construed to impose any liability as such on any of them or (iii) shall be
deemed to confer on any of them any express, implied or apparent authority to
incur any obligation or liability on behalf of the others.
7. OTHER ACTIVITIES OF THE ADMINISTRATOR. Nothing herein shall
prevent the Administrator or its Affiliates from engaging in other businesses
or, in its sole discretion, from acting in a similar capacity as an
administrator for any other person or entity even though such person or entity
may engage in business activities similar to those of the Issuer, the Owner
Trustee or the Indenture Trustee.
8. TERM OF AGREEMENT; RESIGNATION AND REMOVAL OF
ADMINISTRATOR. (a) This Agreement shall continue in force until the dissolution
of the Issuer, upon which event this Agreement shall automatically terminate.
(b) Subject to Section 8(e) of this Agreement, the
Administrator may resign its duties hereunder by providing the Issuer with at
least 60 days' prior written notice.
(c) Subject to Section 8(e) of this Agreement, the Issuer may
remove the Administrator without cause by providing the Administrator with at
least 60 days' prior written notice.
(d) Subject to Section 8(e) of this Agreement, at the sole
option of the Issuer, the Administrator may be removed immediately upon written
notice of termination from the Issuer to the Administrator if any of the
following events shall occur:
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(i) the Administrator shall default in the
performance of any of its duties under this Agreement and, after notice of such
default, shall not cure such default within ten days (or, if such default cannot
be cured in such time, shall not give within ten days such assurance of cure as
shall be reasonably satisfactory to the Issuer);
(ii) a court having jurisdiction in the premises
shall enter a decree or order for relief, and such decree or order shall not
have been vacated within 60 days, in respect of the Administrator in any
involuntary case under any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect or appoint a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official for the Administrator or
any substantial part of its property or order the winding-up or liquidation of
its affairs; or
(iii) the Administrator shall commence a voluntary
case under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, shall consent to the entry of an order for relief in an
involuntary case under any such law, or shall consent to the appointment of a
receiver, liquidator, assignee, trustee, custodian, sequestrator or similar
official for the Administrator or any substantial part of its property, shall
consent to the taking of possession by any such official of any substantial part
of its property, shall make any general assignment for the benefit of creditors
or shall fail generally to pay its debts as they become due;
The Administrator agrees that if any of the events specified
in clauses (ii) or (iii) of this Section shall occur, it shall give written
notice thereof to the Owner Trustee and the Indenture Trustee within seven days
after the happening of such event.
(e) No resignation or removal of the Administrator pursuant to
this Section shall be effective until (i) a successor Administrator shall have
been appointed by the Issuer (with the consent of the Owner Trustee) and (ii)
such successor Administrator shall have agreed in writing to be bound by the
terms of this Agreement in the same manner as the Administrator is bound
hereunder.
(f) The appointment of any successor Administrator shall be
effective only after the Rating Agency, after having been given 10 days' prior
notice of such proposed appointment, shall have declared in writing that such
appointment will not result in a reduction or withdrawal of the then current
rating of the Bonds.
9. ACTION UPON TERMINATION, RESIGNATION OR REMOVAL. Promptly
upon the effective date of termination of this Agreement pursuant to Section
8(a) of this Agreement or the resignation or removal of the Administrator
pursuant to Section 8(b) or (c) of this Agreement, respectively, the
Administrator shall be entitled to be paid all fees and reimbursable expenses
accruing to it to the date of such termination, resignation or removal. The
Administrator shall forthwith upon such termination pursuant to Section 8(a) of
this Agreement deliver to the Issuer all property and documents of or relating
to the Collateral then in the custody of the Administrator. In the event of the
resignation or removal of the Administrator pursuant to Section 8(b) or (c) of
this Agreement, respectively, the Administrator shall cooperate with the Issuer
and take all reasonable steps requested to assist the Issuer in making an
orderly transfer of the duties of the Administrator.
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10. NOTICES. Any notice, report or other communication
given hereunder shall be in writing and addressed as follows:
(a) If to the Issuer, to:
The National Collegiate Trust 1997-S1
c/o Delaware Trust Capital Management, Inc.
900 Market Street
Wilmington, DE 19801
(b) If to the Administrator, to:
First Marblehead Data Services Inc.
237 Park Avenue
New York, NY 10017
Attention: Mr. Stephen Anbinder
(c) If to the Indenture Trustee, to:
State Street Bank and Trust Company
Corporate Trust Department
225 Franklin Street
Boston, MA 02110
Attention: Ms. Patricia DiCarlo
(d) If to the Owner Trustee, to:
Delaware Trust Capital Management, Inc.
900 Market Street
Wilmington, DE 19801
Attention: Mr. Richard N. Smith
or to such other address as any party shall have provided to the other parties
in writing. Any notice required to be in writing hereunder shall be deemed given
if such notice is mailed by certified mail, postage prepaid, or hand-delivered
to the address of such party as provided above.
11. AMENDMENTS. (a) This Agreement may be
amended from time to time by the parties hereto as specified in this Section,
provided that any amendment be accompanied by the written consent of the Owner
Trustee and an Opinion of Counsel to the Indenture Trustee to the effect that
such amendment complies with the provisions of this Section.
(b) If the purpose of the amendment (as detailed therein) is
to correct any mistake, eliminate any inconsistency, cure any ambiguity or deal
with any matter not covered (i.e., to give effect to the intent of the parties
and, if applicable, to the expectations of the Bondholders), it shall not be
necessary to obtain the consent of any Bondholder, but the Indenture Trustee
shall be furnished with a letter from the Rating Agency that the amendment will
not result in the downgrading or withdrawal of the rating then assigned to the
Bonds.
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(c) If the purpose of the amendment is to prevent the
imposition of any federal or state taxes at any time that the Bonds are
outstanding (i.e., technical in nature), it shall not be necessary to obtain the
consent of any Bondholder, but the Indenture Trustee shall be furnished with an
Opinion of Counsel from counsel to the Issuer that such amendment is necessary
or helpful to prevent the imposition of such taxes and is not materially adverse
to any Bondholder.
(d) If the purpose of the amendment is to add or eliminate or
change any provision of the Agreement other than as contemplated in (b) and (c)
above, the amendment shall require the consent of the Rating Agency; PROVIDED,
HOWEVER, that no such amendment shall reduce in any manner the amount of, or
delay the timing of, payments received that are required to be distributed on
the Bonds without the consent of the related Bondholder, as applicable.
(e) It shall not be necessary for the consent of the Rating
Agency to approve the particular form of any proposed amendment, but it shall be
sufficient if such consent approves the substance thereof.
12. SUCCESSORS AND ASSIGNS. This Agreement may not be assigned
by the Administrator unless such assignment is previously consented to in
writing by the Issuer, the Owner Trustee and the Indenture Trustee and unless
the Rating Agency, after having been given 10 days' prior notice of such
assignment, shall have declared in writing that such assignment will not result
in a reduction or withdrawal of the then current rating of the Bonds. An
assignment with such consent and satisfaction, if accepted by the assignee,
shall bind the assignee hereunder in the same manner as the Administrator is
bound hereunder. Notwithstanding the foregoing, this Agreement may be assigned
by the Administrator without the consent of the Issuer or the Owner Trustee to a
corporation or other organization that is a successor (by merger, consolidation
or purchase of assets) to the Administrator; PROVIDED that such successor
organization executes and delivers to the Issuer, the Owner Trustee and the
Indenture Trustee an agreement in which such corporation or other organization
agrees to be bound hereunder by the terms of said assignment in the same manner
as the Administrator is bound hereunder. Subject to the foregoing, this
Agreement shall bind any such permitted successors or assigns of the parties
hereto.
13. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS,
RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
14. HEADINGS. The section headings hereof have been
inserted for convenience of reference only and shall not be construed to affect
the meaning, construction or effect of this Agreement.
15. COUNTERPARTS. This Agreement may be executed in
counterparts, each of which when so executed shall together constitute but one
and the same agreement.
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16. SEVERABILITY. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall be ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
17. LIMITATION OF LIABILITY OF OWNER TRUSTEE. Notwithstanding
anything contained herein to the contrary, this instrument has been executed by
Delaware Trust Capital Management, Inc., not in its individual capacity but
solely in its capacity as Owner Trustee of the Issuer, and in no event shall
Delaware Trust Capital Management, Inc. in its individual capacity or any
beneficial owner of the Issuer have any liability for the representations,
warranties, covenants, agreements or other obligations of the Issuer hereunder,
as to all of which recourse shall be had solely to the assets of the Issuer. For
all purposes of this Agreement, in the performance of any duties or obligations
of the Issuer hereunder, the Owner Trustee shall be subject to, and entitled to
the benefits of, the terms and provisions of Articles VIII, IX and X of the
Trust Agreement.
* * * * * * * *
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IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed and delivered as of the day and year first above written.
THE NATIONAL COLLEGIATE TRUST 1997-S1
By: DELAWARE TRUST CAPITAL
MANAGEMENT, INC., not in its
individual capacity but solely as
Owner Trustee
By:____________________________
Name:
Title:
DELAWARE TRUST CAPITAL
MANAGEMENT, INC.
By:____________________________
Name:
Title:
STATE STREET BANK AND TRUST
COMPANY, as Indenture Trustee
By:____________________________
Name:
Title:
FIRST MARBLEHEAD DATA SERVICES INC.
By:____________________________
Name:
Title:
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EXHIBIT A
POWER OF ATTORNEY
STATE OF NEW YORK )
)
COUNTY OF NEW YORK )
KNOW ALL MEN BY THESE PRESENTS, that The National Collegiate
Trust 1997-S1 (the "Issuer"), does hereby make, constitute and appoint First
Marblehead Data Services Inc., as administrator under the Administration
Agreement dated as of April 1, 1997 (the "Administration Agreement"), among the
Issuer, State Street Bank and Trust Company, as Indenture Trustee, and First
Marblehead Data Services Inc., as Administrator, as the same may be amended from
time to time, and its agents and attorneys, as Attorneys-in-Fact to execute on
behalf of the Issuer all such documents, reports, filings, instruments,
certificates and opinions as it shall be the duty of the Issuer to prepare, file
or deliver pursuant to the Trust Related Agreements, including, without
limitation, to appear for and represent the Issuer in connection with the
preparation, filing and audit of federal, state and local tax returns pertaining
to the Issuer, and with full power to perform any and all acts associated with
such returns and audits that the Issuer could perform, including without
limitation, the right to distribute and receive confidential information, defend
and assert positions in response to audits, initiate and defend litigation, and
to execute waivers of restrictions on assessments of deficiencies, consents to
the extension of any statutory or regulatory time limit, and settlements.
All powers of attorney for this purpose heretofore filed or executed by the
Issuer are hereby revoked.
Capitalized terms that are used and not otherwise defined herein shall have the
meanings ascribed thereto in the Administration Agreement.
EXECUTED this ___ day of ________, 1997.
THE NATIONAL COLLEGIATE TRUST 1997-S1
By: DELAWARE TRUST CAPITAL
MANAGEMENT, INC., not in its
individual capacity but solely
as Owner Trustee
By: ____________________________________
Name:
Title:
<PAGE>
SCHEDULE A
DUTIES OF THE ISSUER
PERFORMED BY THE ADMINISTRATOR UNDER THE TRUST AGREEMENT
(A) Filing tax returns, reports and forms under Section 8.03.
(B) Furnishing documents to the Owners under Section 9.02.
(C) Filing a Certificate of Termination of the Trust upon
termination pursuant to Section 11.01.
(D) Appointing separate trustees under Section 12.02.
(E) Obtaining execution by the Owners of any amendment to the
Trust Agreement thereunder.
DUTIES OF THE ADMINISTRATOR UNDER THE TRUST AGREEMENT
Interpreting and applying the provisions set forth in Article VII
regarding allocations of Profit and Loss and Distributions of Net Cash
Flow, resolving any ambiguities that may result from such application
and providing the Owners with clarification of any provisions.
