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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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October 28, 1999
(Date of Event)
STUDENT LOAN FUNDING 1999 - A/B TRUST
(Exact name of registrant as specified in its charter)
Delaware 333-64283 31-1599686
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation or organization) Identification No.)
ONE WEST FOURTH STREET, SUITE 310
CINCINNATI, OHIO 45202
(513) 763-4415
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
NOT APPLICABLE.
(Registrant's former name or former address, if changed since last report)
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Item 7. Financial Statements and Exhibits.
(c) Exhibits
The following exhibits are filed herewith. The exhibit number
corresponds with Item 601(b) of Regulation S-K.
Exhibit No. Description
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1.1 Underwriting Agreement
3.3 Trust Agreement
4.1 Indenture of Trust
4.2 Terms Supplement
5.1 Opinion of Thompson Hine & Flory LLP
8.1 Opinion of Thompson Hine & Flory LLP with
respect to tax matters
10.1 Administration Agreement between the
Administrator and the Trust
10.2 Eligible Lender Trust Agreement between the
Trust and the Eligible Lender Trustee
10.3 Transfer and Sale Agreement among the
Depositor, the Depositor's eligible lender
trustee, the trust and the Eligible Lender
Trustee
10.4 Master Servicing Agreement between the
Master Servicer and the Trust
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Signature
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, hereto duly authorized.
FIRSTAR BANK, N.A., not in its
individual capacity but solely in
its capacity as Co-owner Trustee for
STUDENT LOAN FUNDING 1999 - A/B
TRUST
Date: November 5, 1999 By: /s/ Brian J. Gardner
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Brian J. Gardner
Vice President & Trust Officer
EXHIBIT INDEX
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Exhibit Description of Exhibit
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1.1 Underwriting Agreement
3.3 Trust Agreement
4.1 Indenture of Trust
4.2 Terms Supplement
5.1 Opinion of Thompson Hine & Flory LLP
8.1 Opinion of Thompson Hine & Flory LLP with
respect to tax matters
10.1 Administration Agreement between the
Administrator and the Trust
10.2 Eligible Lender Trust Agreement between the
Trust and the Eligible Lender Trustee
10.3 Transfer and Sale Agreement among the
Depositor, the Depositor's eligible lender
trustee, the trust and the Eligible Lender
Trustee
10.4 Master Servicing Agreement between the
Master Servicer and the Trust
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EXHIBIT 1.1
STUDENT LOAN FUNDING 1999-A/B TRUST
$525,000,000 STUDENT LOAN ASSET-BACKED NOTES
UNDERWRITING AGREEMENT
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October 27, 1999
SALOMON SMITH BARNEY INC.
As Representative of the
several Underwriters named herein
388 Greenwich Street, 32nd Floor
New York, New York 10013
Ladies and Gentlemen:
Student Loan Funding Resources, Inc., an Ohio corporation, as master
servicer of the Financed Student Loans (as defined below) ("Resources"), and as
administrator of the business activities of the Depositor (as defined below),
has caused the Depositor to form a trust known as the Student Loan Funding
1999-A/B Trust (the "Trust") under the laws of the State of Delaware to which
the Depositor will transfer the Financed Student Loans (as defined below), and
Resources and the Depositor propose to cause the Trust to sell to the
underwriters named in Schedule I hereto (collectively, the "Underwriters" and
each individually an "Underwriter"), for whom you (the "Representative") are
acting as representative, pursuant to the terms of this Underwriting Agreement,
Student Loan Asset-Backed Notes in the following series and initial principal
amounts: $75,000,000 Series 1999A-1 Senior Auction Rate Callable Notes (the
"Series 1999A-1 Notes"), $75,000,000 Series 1999A-2 Senior Auction Rate Callable
Notes (the "Series 1999A-2 Notes"), $75,000,000 Series 1999A-3 Senior Auction
Rate Callable Notes (the "Series 1999A-3 Notes"), $100,000,000 Series 1999A-4
Senior Auction Rate Callable Notes (the "Series 1999A-4 Notes"), $75,000,000
Series 1999A-5 Senior Auction Rate Callable Notes (the "Series 1999A-5 Notes"),
$95,000,000 Series 1999A-6 Senior Auction Rate Callable Notes (the "Series
1999A-6 Notes" and together with the Series 1999A-1 Notes, Series 1999A-2 Notes,
Series 1999A-3 Notes, Series 1999A-4 Notes and Series 1999A-5 Notes, the "Series
1999A Notes") and $30,000,000 Series 1999B-1 Subordinate Auction Rate Callable
Notes (the "Series 1999B-1 Notes" and together with the Series 1999A Notes, the
"Notes"). Firstar Bank, National Association, a national banking association
formed under the laws of the United States, acts as eligible lender trustee (the
"Depositor ELT") on behalf of Student Loan Funding Riverfront LLC, a Delaware
limited liability company (the "Depositor") and on behalf of the Trust (the
"Trust ELT"). The Trust has been formed pursuant to a Trust Agreement, dated as
October 1, 1999 (the "Trust Agreement") by and among the Depositor, First Union
Trust Company, National Association, a national banking association formed under
the laws of the United States, as Owner Trustee, and Firstar Bank,
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To the Parties Identified on Schedule 1 Hereto
October 27, 1999
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National Association, as Trust ELT and Co-owner Trustee. On or before the
Closing Date, the Financed Student Loans will have been acquired by the
Depositor from a variety of sources, including one or more affiliates of the
Depositor and third parties. On the Closing Date, the Financed Student Loans
will have been transferred to the Trust ELT by the Depositor. The Notes will be
issued under an Indenture of Trust dated as of October 1, 1999, as supplemented
from time to time, and the related Terms Supplement dated as of October 1, 1999
(collectively, the "Indenture") among the Co-owner Trustee, the Trust ELT and
Firstar Bank, National Association, a national banking association formed under
the laws of the United States, as indenture trustee (the "Indenture Trustee").
Upon issuance, the Notes will be secured by, among other things, Financed
Student Loans pledged to the Indenture Trustee and described in the Prospectus
(as defined in Section 3 below). This Agreement, the Transfer and Sale Agreement
dated as of October 1, 1999 (the "Transfer and Sale Agreement") among the
Depositor, the Depositor ELT, the Trust, the Co-Owner Trustee and the Trust ELT;
the Master Servicing Agreement dated as of October 1, 1999 (the "Master
Servicing Agreement") between the Co-owner Trustee on behalf of the Trust and
the Master Servicer, the Indenture and the Trust Agreement shall collectively
hereinafter be referred to as the "Basic Documents." Capitalized terms used
herein without definition shall have the meanings ascribed to them in the
Indenture.
1. PURCHASE, SALE AND DELIVERY OF THE NOTES.
(a) On the basis of the representations, warranties and agreements herein
contained, but subject to the terms and conditions herein set forth, Resources
and the Depositor jointly and severally agree to cause the Trust to sell to the
Underwriters, and the Underwriters agree, severally and not jointly, to purchase
from the Trust: the Series 1999A-1 Notes, at a purchase price of 99.675% of the
principal amount of the Series 1999A-1 Notes; the Series 1999A-2 Notes, at a
purchase price of 99.675% of the principal amount of the Series 1999A-2 Notes;
the Series 1999A-3 Notes, at a purchase price of 99.675% of the principal amount
of the Series 1999A-3 Notes; the Series 1999A-4 Notes, at a purchase price of
99.675% of the principal amount of the Series 1999A-4 Notes; the Series 1999A-5
Notes, at a purchase price of 99.675% of the principal amount of the Series
1999A-5 Notes; the Series 1999A-6 Notes, at a purchase price of 99.675% of the
principal amount of the Series 1999A-6 Notes; and the Series 1999B-1 Notes at a
purchase price of 99.675% of the principal amount of the Series 1999B-1 Notes,
the respective principal amounts of each Series of Notes set forth opposite the
names of the Underwriters in Schedule I hereto. The Notes will bear interest at
the rates as set forth in Schedule I.
(b) No later than 12:00 noon, Cincinnati time, on October 28, 1999, or at
such other time or on such earlier or later date as shall have been mutually
agreed upon by the Depositor and the Representative, the Depositor shall
deliver, or cause to be delivered the Notes to the Indenture Trustee to be held
in its custody pursuant to a FAST delivery arrangement with and on behalf of The
Depository Trust Company ("DTC") which Notes shall be in form satisfactory to
the Representative duly executed by the Co-owner Trustee on behalf of the Trust,
and shall deliver a specimen copy of each executed and authenticated Note to the
Representative together with the
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To the Parties Identified on Schedule 1 Hereto
October 27, 1999
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other documents hereinafter mentioned; and the Representative shall accept such
delivery for the respective accounts of the Underwriters and the Underwriters
shall pay the purchase price of the Notes as set forth in Schedule I by wire
transfer in clearinghouse funds to the Indenture Trustee for the account of the
Depositor. Such payment and delivery is herein called the "Closing," and the
date of the Closing is herein called the "Closing Date." The Notes (one Note for
each series in the respective principal amount thereof unless otherwise required
by the rules and regulations of DTC) shall be made available to the
Representative for checking and delivery to the Indenture Trustee not less than
24 hours prior to the Closing at a place designated by the Representative. The
Notes may be typewritten and shall be registered in the name of Cede & Co. The
Depositor and the Co-Owner Trustee on behalf of the Trust will file with DTC a
DTC Letter of Representation, together with any rider and/or supplement thereto,
required by DTC to permit the Notes to be held in the custody of the Indenture
Trustee pursuant to a FAST delivery arrangement.
2. OFFERING BY THE UNDERWRITERS.
(a) It is understood that, after the Registration Statement becomes
effective, the Underwriters propose to offer the Notes for sale to the public
(which may include selected dealers) as set forth in the Prospectus. The
Underwriters agree not to offer or sell the Notes in any state or jurisdiction
where registration, qualification or any filing to effect any exemption is
required under such state's or jurisdiction's securities or Blue Sky laws,
except where, with the consent of the Depositor (which may be withheld in the
Depositor's sole discretion), such registration, qualification or filing has
been completed. The Underwriters agree that all offers and sales of the Notes
will be made in accordance with applicable federal and state securities laws and
regulations. To the extent the Underwriters engage in overallotment, stabilizing
transactions, syndicate covering transactions and penalty bids, the Underwriters
agree that such activities shall be in accordance with Regulation M under the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
(b) Each Underwriter severally represents and agrees that (i) it has not
offered or sold and will not offer or sell any Notes to persons in the United
Kingdom except to persons whose ordinary activities involve them in acquiring,
holding, managing or disposing of investments (as principal or agent) for the
purpose of their businesses or otherwise in circumstances which have not
resulted and will not result in an offer to the public in the United Kingdom
within the meaning of the Public Offers of Securities Regulations 1995; (ii) it
has complied and will comply with all applicable provisions of the Financial
Services Act of 1986 with respect to anything done by it in relation to the
Notes in, from or otherwise involving the United Kingdom; and (iii) it has only
issued or passed on, and will only issue or pass on, in the United Kingdom any
document received by it in connection with the issue of the Notes to a person
who is of a kind described in Article 11(3) of the Financial Services Act 1986
(Investment Advertisements) (Exemptions) Order 1996 or to a person to whom such
document may otherwise lawfully be issued, distributed or passed on.
3. REPRESENTATIONS AND WARRANTIES OF RESOURCES AND THE DEPOSITOR. Resources
and the Depositor represent and warrant to and agree with the Underwriters that:
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To the Parties Identified on Schedule 1 Hereto
October 27, 1999
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(a) A registration statement on Form S-3 (No. 333-64283), including a
prospectus and such amendments thereto as may have been required to the date
hereof, relating to the Notes and the offering thereof from time to time in
accordance with Rule 415 under the Securities Act of 1933, as amended (the
"Act") has been filed with the Securities and Exchange Commission (the "SEC")
and such registration statement, as amended, has become effective under the Act;
such registration statement, as amended, including all information (if any)
deemed to be a part of such registration statement as of the Effective Time (as
defined below), and including the exhibits thereto and any material incorporated
by reference therein, and the prospectus and prospectus supplement relating to
the sale of the Notes offered thereby constituting a part thereof, as amended or
supplemented including any prospectus filed under Rule 424(b) under the Act, are
respectively referred to herein as the "Registration Statement" and the
"Prospectus"; and the conditions to the use of a registration statement on Form
S-3 under the Act, as set forth in the General Instructions to Form S-3, and the
conditions of Rule 415 under the Act have been satisfied with respect to the
Registration Statement. For purposes of this Agreement, "Effective Time" means
(x) if the Depositor has advised the Representative that it does not propose to
amend the Registration Statement, the date and time as of which the Registration
Statement, or the most recent post-effective amendment thereto (if any) filed
prior to the execution and delivery of this Agreement, was declared effective by
the SEC, or (y) if the Depositor has advised the Representative that it proposes
to file an amendment or post-effective amendment to the Registration Statement,
the date and time as of which the Registration Statement, as amended by such
amendment or post-effective amendment, as the case may be, is declared effective
by the SEC. "Effective Date" means the date of the Effective Time.
(b) On the Effective Date and on the date of this Agreement, the
Registration Statement and the Prospectus, conformed and conform in all material
respects to the requirements of the Act, the rules and regulations of the SEC
(the "Rules and Regulations") and the Trust Indenture Act of 1939, as amended,
and the rules and regulations thereunder (the "Trust Indenture Act"), and in the
case of the Registration Statement, did not and does not include any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading and,
in the case of the Prospectus, did not and does not include any untrue statement
of a material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that the foregoing does not apply to
statements in or omissions from the Registration Statement or the Prospectus
based upon written information furnished to the Depositor by any Underwriter
specifically for use therein.
4. REPRESENTATIONS AND WARRANTIES OF RESOURCES. Resources represents and
warrants to and agrees with the Underwriters that:
(a) The SEC has not issued and, to the best knowledge of Resources, is
not threatening to issue any order preventing or suspending the use of the
Registration Statement.
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To the Parties Identified on Schedule 1 Hereto
October 27, 1999
Page 5
(b) This Agreement has been duly authorized, executed and delivered by
Resources. The execution, delivery and performance of this Agreement and the
issuance and sale of the Notes and compliance with the terms and provisions
hereof will not result in a breach or violation of any of the terms and
provisions of, or constitute a default under, the organizational documents or
by-laws of Resources or any agreement or instrument to which Resources is a
party or by which Resources is bound or to which any of the properties of
Resources is subject which could reasonably be expected to have a material
adverse effect on the transactions contemplated herein.
(c) Resources is duly organized and validly existing as an Ohio corporation
with the power and authority to own its properties and to conduct its business
as such properties are currently owned and such business is presently conducted,
except for such power and authority the absence of which would not have a
material adverse effect on Resources or its ability to consummate the
transactions contemplated hereby.
(d) There are no legal or governmental proceedings pending or, to the
knowledge of Resources, threatened, against Resources, or to which Resources or
any of its properties is subject, of a character required to be disclosed in the
Prospectus that are not disclosed in the Prospectus.
(e) All authorizations, consents, orders or approvals of or registrations
or declarations with any court, regulatory body, administrative agency or other
government instrumentality required to be obtained, effected or given by
Resources in connection with the execution and delivery by Resources of this
Agreement and the performance by Resources of the transactions expressly
contemplated by this Agreement, have been duly obtained, effected or given and
are in full force and effect, except such as may be required by the blue sky
laws of any jurisdiction in connection with the sale and distribution of the
Notes for which no representation is being given.
(f) Resources has all requisite corporate power and authority to execute
and deliver this Agreement and carry out its terms.
(g) Resources is not required to register as an "investment company" under
the Investment Company Act of 1940, as amended (the "1940 Act") by reason of the
issuance of the Notes.
(h) The representations and warranties made by Resources in the Master
Servicing Agreement will be true and correct in all material respects on and as
of the Closing Date.
(i) Other than as contemplated by this Agreement or as disclosed in the
Prospectus, there is no broker, finder or other party that is entitled to
receive from Resources or any of its subsidiaries any brokerage or finder's fee
or other fee or commission as a result of any of the transactions contemplated
by this Agreement.
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To the Parties Identified on Schedule 1 Hereto
October 27, 1999
Page 6
5. REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR. The Depositor
represents and warrants to and agrees with the Underwriters that:
(a) The SEC has not issued and, to the best knowledge of the Depositor,
is not threatening to issue any order preventing or suspending the use of the
Registration Statement.
(b) This Agreement has been duly authorized, executed and delivered by
the Depositor. The execution, delivery and performance of this Agreement and the
issuance and sale of the Notes and compliance with the terms and provisions
hereof will not result in a breach or violation of any of the terms and
provisions of, or constitute a default under, the organizational documents or
the operating agreement of the Depositor or any agreement or instrument to which
the Depositor is a party or by which the Depositor is bound or to which any of
the properties of the Depositor is subject which could reasonably be expected to
have a material adverse effect on the transactions contemplated herein.
(c) The Depositor is duly organized and validly existing as a Delaware
limited liability company with the power and authority to own its properties and
to conduct its business as such properties are currently owned and such business
is presently conducted, except for such power and authority the absence of which
would not have a material adverse effect on the Depositor or its ability to
consummate the transactions contemplated hereby.
(d) There are no legal or governmental proceedings pending or, to the
knowledge of the Depositor, threatened, against the Depositor, or to which the
Depositor or any of its properties is subject, of a character required to be
disclosed in the Prospectus that are not disclosed in the Prospectus.
(e) All authorizations, consents, orders or approvals of or
registrations or declarations with any court, regulatory body, administrative
agency or other government instrumentality required to be obtained, effected or
given by the Depositor in connection with the execution and delivery by the
Depositor of this Agreement and the performance by the Depositor of the
transactions expressly contemplated by this Agreement, have been duly obtained,
effected or given and are in full force and effect, except such as may be
required by the blue sky laws of any jurisdiction in connection with the sale
and distribution of the Notes for which no representation is being given.
(f) The Depositor has all requisite power and authority to execute and
deliver this Agreement and carry out its terms.
(g) The Depositor is not required to register as an "investment
company" under the Investment Company Act of 1940, as amended (the "1940 Act")
by reason of the issuance of the Notes.
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To the Parties Identified on Schedule 1 Hereto
October 27, 1999
Page 7
(h) The representations and warranties made by the Depositor in the
Transfer and Sale Agreement will be true and correct in all material respects on
and as of the Closing Date.
(i) Other than as contemplated by this Agreement or as disclosed in the
Prospectus, there is no broker, finder or other party that is entitled to
receive from the Depositor or any of its subsidiaries any brokerage or finder's
fee or other fee or commission as a result of any of the transactions
contemplated by this Agreement.
6. AGREEMENTS OF RESOURCES AND THE DEPOSITOR. Resources and the
Depositor each agree with the Underwriters as follows:
(a) Immediately following the execution of this Agreement, the Depositor
will pursuant to Rule 424(b) prepare and file a prospectus supplement, properly
completed, with the SEC. The Depositor will advise the Representative promptly
of any such filing. The Depositor will advise the Representative promptly of any
proposal to amend or supplement the Registration Statement or the Prospectus and
will not effect such amendment or supplement without the consent of the
Representative prior to the Closing Date, and thereafter will not effect any
such amendment or supplement relating to or affecting the Notes to which the
Representative reasonably objects; provided, however, except for the Current
Report on Form 8-K described in Section 6(m), no consent of the Representative
shall be required in connection with any filing made pursuant to the Exchange
Act and the rules and regulations promulgated thereunder; the Depositor will
also advise the Representative promptly of any request by the SEC for any
amendment of or supplement to the Registration Statement or the Prospectus or
for any additional information; and the Depositor will also advise the
Representative promptly of the effectiveness of the Registration Statement and
of any amendment or supplement to the Registration Statement or the Prospectus
and of the issuance by the SEC of any stop order suspending the effectiveness of
the Registration Statement or the institution or known threat of any proceeding
for that purpose and the Depositor will use its best efforts to prevent the
issuance of any such stop order and to obtain as soon as possible the lifting of
any issued stop order.
(b) If, at any time when the Prospectus relating to the Notes is required
to be delivered under the Act, any event occurs as a result of which such
Prospectus as then amended or supplemented would include an untrue statement of
a material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or if it is necessary at any time to amend or supplement
the Prospectus to comply with the Act or the Rules and Regulations, the
Depositor promptly will prepare and file with the SEC, an amendment or
supplement to such Prospectus that will correct such statement or omission or an
amendment that will effect such compliance.
(c) The Depositor will immediately inform the Representative (i) of the
receipt by Resources, the Depositor or the Trust of any communication from the
SEC or any state securities authority concerning the offering or sale of the
Notes and (ii) of the commencement of any lawsuit
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To the Parties Identified on Schedule 1 Hereto
October 27, 1999
Page 8
or proceeding to which Resources, the Depositor or the Trust is a party relating
to the offering or sale of the Notes; provided, however, with respect to the
Trust, the Trust has so informed the Depositor to the extent the Depositor did
not receive such communication provided in clause (i) or is not a party to the
lawsuit or proceeding as provided in clause (ii) and did not receive notice of
such lawsuit, and with respect to Resources, Resources has so informed the
Depositor to the extent the Depositor did not receive such communication
provided in clause (i) or is not a party to the lawsuit or proceeding as
provided in clause (ii) and did not receive notice of such lawsuit.
(d) The Depositor will furnish to the Underwriters, without charge, copies
of the Registration Statement (including all documents and exhibits thereto or
incorporated by reference therein), the Prospectus, and all amendments and
supplements to such documents relating to the Notes, in each case in such
quantities as the Underwriters may reasonably request.
(e) No amendment or supplement relating to or affecting the Notes will be
made to the Registration Statement or Prospectus unless the Representative shall
have previously been advised thereof and the Representative shall not have
reasonably objected thereto after being so advised; provided, however, after the
Closing Date, excluded from this provision shall be filings made pursuant to the
Exchange Act.
(f) Resources and the Depositor will cooperate with the Representative and
with its counsel in connection with the qualification of, or procurement of
exemptions with respect to, the Notes for offering and sale by the Underwriters
and by dealers under the securities or Blue Sky laws of such jurisdictions as
any Underwriter may designate and to which the Depositor shall consent (which
consent may be withheld in the Depositor's sole discretion) and, in such
jurisdictions, will file or cause the Trust to file such consents to service of
process or other documents necessary or appropriate in order to effect such
qualification or exemptions; provided that in no event shall Resources, the
Depositor or the Trust be obligated to qualify to do business in any
jurisdiction where it is not now so qualified or to take any action which would
subject it to service of process in suits, other than those arising out of the
offering or sale of the Notes, in any jurisdiction where it is not now so
subject.
(g) Subject to Section 2, Resources, the Depositor and the Trust consent to
the use, in accordance with the securities or Blue Sky laws of such
jurisdictions in which the Notes are offered by the Underwriters and by dealers,
of the Prospectus furnished by the Depositor.
(h) To the extent, if any, that the rating or ratings provided with respect
to the Notes by the rating agency or agencies that initially rate a series of
Notes is conditional upon the furnishing of documents or the taking of any other
actions by Resources, the Depositor or the Trust, the Depositor shall cause to
be furnished such documents and such other reasonable actions to be taken.
(i) For two years from the Closing Date, the Depositor will furnish to the
Representative (i) as soon as available, a copy of each document relating to the
Trust or the Notes
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To the Parties Identified on Schedule 1 Hereto
October 27, 1999
Page 9
required to be filed with the SEC pursuant to the Exchange Act or any order of
the SEC thereunder, and (ii) such other information concerning Resources, the
Depositor or the Trust as the Representative may reasonably request from time to
time insofar as such information reasonably relates to the Registration
Statement or the transactions contemplated by the Basic Documents.
(j) If this Agreement shall terminate or shall be terminated after
execution and delivery pursuant to any provisions hereof (otherwise than by
notice given by an Underwriter terminating this Agreement pursuant to Section 10
or Section 11 hereof) or if this Agreement shall be terminated by the
Representative because of any failure or refusal on the part of Resources or the
Depositor to comply with the terms or fulfill any of the conditions of this
Agreement, Resources agrees to reimburse the Underwriters for all out-of-pocket
expenses (including reasonable fees and expenses of their counsel) reasonably
incurred in connection herewith. In no event shall Resources, the Depositor or
the Trust be liable to the Underwriters for loss of anticipated profits from the
transactions contemplated by this Agreement.
(k) The net proceeds from the sale of the Notes hereunder will be applied
substantially in accordance with the description set forth in the Prospectus.
(l) Except as stated in this Agreement and in the Prospectus, neither
Resources nor the Depositor has taken, nor will it take, directly or indirectly,
any action designed to or that might reasonably be expected to cause or result
in stabilization or manipulation of the price of the Notes to facilitate the
sale or resale of the Notes; it being understood and agreed that no such action
by any Underwriter shall be deemed an action of Resources or the Depositor.
(m) For the period beginning on the date of this Agreement and ending 90
days after the Closing Date, Resources, the Depositor and any trust originated,
directly or indirectly, by Resources or the Depositor will not, without the
prior written consent of the Representative, offer to sell or sell notes (other
than the Notes) collateralized by, or certificates evidencing an ownership
interest in, student loans.
7. INDEMNIFICATION AND CONTRIBUTION. (a) Resources and the Depositor agree
to jointly and severally indemnify and hold harmless each Underwriter and each
person, if any, who controls an Underwriter within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act, from and against any and all losses,
claims, damages, liabilities and expenses (including reasonable costs of
investigation) arising out of or based upon any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement, the
Prospectus, or in any amendment or supplement thereto, or the preliminary
prospectus supplement dated October 22, 1999 (the "Preliminary Prospectus"), or
arising out of or based upon any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages,
liabilities or expenses arise out of or are based upon any untrue statement or
omission or alleged untrue statement or omission which has been made therein or
omitted therefrom in reliance upon and in conformity with the information
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To the Parties Identified on Schedule 1 Hereto
October 27, 1999
Page 10
relating to the Underwriter furnished in writing to the Depositor by or on
behalf of any Underwriter through the Representative expressly for use in
connection therewith; PROVIDED, HOWEVER, that the foregoing indemnity with
respect to the Prospectus or the Preliminary Prospectus shall not inure to the
benefit of any Underwriter (or any person controlling such Underwriter) from
whom the person asserting any such loss, claim, damage or liability purchased
Notes, if such person did not receive a copy of the Prospectus (as then amended
or supplemented) at or prior to the written confirmation of the sale of such
Notes to such person and if the Prospectus (as so amended or supplemented) would
have cured the defect giving rise to such loss, claim, damage or liability. The
foregoing indemnity agreement shall be in addition to any liability which
Resources or the Depositor may otherwise have.
(b) If any action, suit or proceeding shall be brought against an
Underwriter or any person controlling an Underwriter in respect of which
indemnity may be sought against Resources or the Depositor, such Underwriter or
such controlling person shall promptly notify the parties against whom
indemnification is being sought (the "indemnifying parties"), and such
indemnifying parties shall assume the defense thereof, including the employment
of counsel and payment of all reasonable fees and expenses. Such Underwriter or
any such controlling person shall have the right to employ separate counsel in
any such action, suit or proceeding and to participate in the defense thereof,
but the fees and expenses of such counsel shall be at the expense of the
Underwriter or such controlling person unless (i) the indemnifying parties have
agreed in writing to pay such fees and expenses, (ii) the indemnifying parties
have failed to assume the defense and employ counsel within a reasonable period
of time, or (iii) the named parties to any such action, suit or proceeding
(including any impleaded parties) include both the Underwriter or such
controlling person and the indemnifying parties and the Underwriter or such
controlling person shall have been advised by its counsel that representation of
such indemnified party and any indemnifying party by the same counsel would be
inappropriate under applicable standards of professional conduct (whether or not
such representation by the same counsel has been proposed) due to actual or
potential differing interests between them (in which case the indemnifying party
shall not have the right to assume the defense of such action, suit or
proceeding on behalf of the Underwriter or such controlling person). It is
understood, however, that the indemnifying parties shall, in connection with any
one such action, suit or proceeding or separate but substantially similar or
related actions, suits or proceedings in the same jurisdiction arising out of
the same general allegations or circumstances, be liable for the reasonable fees
and expenses of only one separate firm of attorneys (in addition to any local
counsel) at any time for the Underwriter and controlling persons not having
actual or potential differing interests with the Underwriter or among
themselves, which firm shall be designated in writing by the Underwriter, and
that all such fees and expenses shall be reimbursed on a monthly basis as
provided in paragraph (a) hereof. The indemnifying parties shall not be liable
for any settlement of any such action, suit or proceeding effected without their
written consent, but if settled with such written consent, or if there be a
final judgment for the plaintiff in any such action, suit or proceeding, the
indemnifying parties agree to indemnify and hold harmless the Underwriter and
any such controlling person from and against any loss, claim, damage, liability
or expense by reason of such settlement or judgment to the extent provided in
paragraph (a).
<PAGE> 11
To the Parties Identified on Schedule 1 Hereto
October 27, 1999
Page 11
(c) Each Underwriter agrees severally but not jointly to indemnify and hold
harmless Resources and the Depositor and their respective directors and
officers, and any person who controls Resources or the Depositor within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act to the same
extent as the indemnity from Resources and the Depositor to such Underwriter set
forth in paragraph (a) hereof, but only with respect to information relating to
such Underwriter furnished in writing by or on behalf of such Underwriter
through the Representative expressly for use in the Registration Statement, the
Prospectus, or any amendment or supplement thereto, or any related preliminary
prospectus. If any action, suit or proceeding shall be brought against Resources
or the Depositor, any of their directors or officers, or any such controlling
person based on the Registration Statement, the Prospectus, or any amendment or
supplement thereto, or any related preliminary prospectus and in respect of
which indemnity may be sought against an Underwriter pursuant to this paragraph
(c), such Underwriter shall have the rights and duties given to Resources and
the Depositor by paragraph (b) above (except that if Resources or the Depositor
shall have assumed the defense thereof no Underwriter shall be required to do
so, but may employ separate counsel therein and participate in the defense
thereof, but the fees and expenses of such counsel shall be at such
Underwriter's expense, except as otherwise provided in paragraph (b) above), and
Resources, the Depositor, their respective directors and officers, and any such
controlling person shall have the rights and duties given to such Underwriter by
paragraph (b) above. The foregoing indemnity agreement shall be in addition to
any liability which the Underwriters may otherwise have.
(d) If the indemnification provided for in this Section 7 is unavailable to
an indemnified party under paragraphs (a) or (c) hereof in respect of any
losses, claims, damages, liabilities or expenses referred to therein, then an
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or expenses (i) in such proportion
as is appropriate to reflect the relative benefits received by Resources and the
Depositor on the one hand and the applicable Underwriter on the other hand from
the offering of the Notes, or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of Resources and the Depositor on the one hand and such
Underwriter on the other in connection with the statements or omissions that
resulted in such losses, claims, damages, liabilities or expenses, as well as
any other relevant equitable considerations. The relative benefits received by
Resources and the Depositor on the one hand and such Underwriter on the other
shall be deemed to be in the same proportion as the total net proceeds from the
offering of the Notes (before deducting expenses) received by Resources and the
Depositor bear to the total underwriting discounts and commissions received by
such Underwriter. The relative fault of Resources and the Depositor on the one
hand and such Underwriter on the other hand shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by Resources or the Depositor on the one
<PAGE> 12
To the Parties Identified on Schedule 1 Hereto
October 27, 1999
Page 12
hand or by such Underwriter on the other hand and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
(e) Resources, the Depositor and the Underwriters agree that it would not
be just and equitable if contribution pursuant to this Section 7 were determined
by a pro rata allocation or by any other method of allocation that does not take
account of the equitable considerations referred to in paragraph (d) above. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities and expenses referred to in paragraph (d) above
shall be deemed to include, subject to the limitations set forth above, any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating any claim or defending any such action, suit or
proceeding. Notwithstanding the provisions of this Section 7, no Underwriter
shall be required to contribute any amount in excess of the underwriting
discounts and commissions applicable to the Notes hereunder. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
(f) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 7 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 7 and the
representations and warranties of Resources and the Depositor set forth in this
Agreement shall remain operative and in full force and effect, regardless of (i)
any investigation made by or on behalf of an Underwriter, Resources, the
Depositor or any person controlling any of them or their respective directors or
officers, (ii) acceptance of any Notes and payment therefor hereunder, and (iii)
any termination of this Agreement. A successor to any Underwriter, Resources,
the Depositor or any person controlling any of them or their respective
directors or officers, shall be entitled to the benefits of the indemnity,
contribution and reimbursement agreements contained in this Section 7.
8. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The obligations of the
Underwriters to purchase the Notes hereunder are subject to the following
conditions:
(a) All actions required to be taken and all filings required to be made by
Resources and the Depositor under the Act prior to the sale of the Notes shall
have been duly taken or made. At and prior to the Closing Date, no stop order
suspending the effectiveness of the Registration Statement shall have been
issued and no proceedings for that purpose shall have been instituted or, to the
knowledge of Resources, the Depositor or the Underwriters, shall be threatened
by the SEC.
(b) Since the respective dates as of which information is given in the
Registration Statement (or any amendment or supplement thereto), except as may
otherwise be stated therein or contemplated thereby, there shall not have
occurred (i) any change, or any development involving a prospective change, in
or affecting the condition (financial or other), business, properties, net
worth, or results of operations of Resources and the Depositor not contemplated
by the Registration
<PAGE> 13
To the Parties Identified on Schedule 1 Hereto
October 27, 1999
Page 13
Statement, which in the opinion of the Representative, would materially
adversely affect the market for the Notes, or (ii) any event or development
which makes any statement made in the Registration Statement or Prospectus
untrue in any material respect or which, in the opinion of Resources and the
Depositor and their counsel or the Underwriters and their counsel, requires the
filing of any amendment to or change in the Registration Statement or Prospectus
in order to state a material fact required by any law to be stated therein or
necessary in order to make the statements therein not misleading, if amending or
supplementing the Registration Statement or Prospectus to reflect such event or
development would, in the opinion of the Representative, materially adversely
affect the market for the Notes.
(c) The Representative shall have received on the Closing Date an opinion
of Richards, Layton & Finger, P.A., special Delaware counsel for the Trust,
dated the Closing Date and addressed to the Underwriters, in form and scope
reasonably satisfactory to the Representative and its counsel.
(d) The Representative shall have received on the Closing Date the opinions
of Calfee, Halter & Griswold LLP, special counsel for Resources and the
Depositor, dated the Closing Date and addressed to the Underwriters, in form and
scope reasonably satisfactory to the Representative and its counsel.
(e) The Representative shall have received on the Closing Date an opinion
of Thompson, Hine & Flory LLP, counsel for Resources and the Depositor, dated
the Closing Date and addressed to the Underwriters, relating to general
corporate authority and other matters in form and scope reasonably satisfactory
to the Representative and its counsel.
(f) The Representative shall have received on the Closing Date an opinion
of the Graydon, Head & Ritchey, counsel for the Co-Owner Trustee, the Depositor
ELT, the Trust ELT and the Indenture Trustee, dated the Closing Date and
addressed to the Underwriters, in form and scope reasonably satisfactory to the
Representative and its counsel.
(g) The Representative shall have received on the Closing Date an opinion
of Richards, Layton & Finger, P.A. counsel for the Owner Trustee, dated the
Closing Date and addressed to the Underwriters, in form and scope satisfactory
to the Representative and its counsel.
(h) The Representative shall have received on the Closing Date the opinion
of Squire, Sanders & Dempsey L.L.P., special counsel for the Underwriters, dated
the Closing Date, and addressed to the Underwriters, in form and scope
satisfactory to the Representative.
(i) The Representative shall have received on the Closing Date the opinion
of Thompson, Hine & Flory LLP, counsel for Resources and the Depositor, dated
the Closing Date and addressed to the Underwriters, relating to the transfer of
the Financed Student Loans to the Depositor in form and scope reasonably
satisfactory to the Representative and its counsel.
<PAGE> 14
To the Parties Identified on Schedule 1 Hereto
October 27, 1999
Page 14
(j) The Representative shall have received on the Closing Date the opinion
of Thompson, Hine & Flory LLP, counsel for Resources and the Depositor, dated
the Closing Date and addressed to the Underwriters, relating to the transfer of
the financed Student Loans to the Trust in form and scope reasonably
satisfactory to the Representative and its counsel.
(k) The Representative shall have received on the Closing Date the opinion
of Thompson, Hine & Flory LLP, counsel for Resources and the Depositor, dated
the Closing Date and addressed to the Underwriters, relating to tax matters in
form and scope reasonably satisfactory to the Representative and its counsel.
(l) The Representative shall have received on the Closing Date the opinion
of Thompson, Hine & Flory LLP, counsel for Resources and the Depositor, relating
to bankruptcy matters dated the Closing Date and addressed to the Underwriters,
in form and scope reasonably satisfactory to the Representative and its counsel.
(m) The Representative shall have received on the Closing Date the opinion
of Thompson, Hine & Flory LLP, counsel for Resources and the Depositor, relating
to such other matters as the Underwriters may reasonably request, dated the
Closing Date and addressed to the Underwriters, in form and scope reasonably
satisfactory to the Representative and its counsel.
(n) All the representations and warranties of the Resources contained in
this Agreement and the Basic Documents shall be true and correct in all material
respects on and as of the date hereof and on and as of the Closing Date as if
made on and as of the Closing Date and the Representative shall have received a
certificate, dated the Closing Date and signed by an executive officer of
Resources, to the effect set forth in this Section 8(n) and in Section 8(p)
hereof.
(o) All the representations and warranties of the Depositor contained in
this Agreement and the Basic Documents shall be true and correct in all material
respects on and as of the date hereof and on and as of the Closing Date as if
made on and as of the Closing Date and the Representative shall have received a
certificate, dated the Closing Date and signed by an executive officer of the
Depositor, to the effect set forth in this Section 8(o) and in Section 8(q)
hereof.
(p) Resources shall not have failed at or prior to the Closing Date to have
performed or complied in any material respect with any of its agreements herein
contained and required to be performed or complied with by it hereunder at or
prior to the Closing Date.
(q) The Depositor shall not have failed at or prior to the Closing Date to
have performed or complied in any material respect with any of its agreements
herein contained and required to be performed or complied with by it hereunder
at or prior to the Closing Date.
<PAGE> 15
To the Parties Identified on Schedule 1 Hereto
October 27, 1999
Page 15
(r) The Representative shall have received by instrument dated the Closing
Date (at the option of the Representative), in lieu of or in addition to the
opinions referred to in clauses (c) through (m) of this Section (8), the right
to rely on opinions provided by such counsel and all other counsel under the
terms of the Basic Documents to Moody's Investors Service, Inc. ("Moody's") and
Fitch IBCA, Inc. ("Fitch").
(s) Moody's and Fitch shall have rated the Series 1999A-1 Notes, Series
1999A-2 Notes, Series 1999A-3 Notes, Series 1999A-4 Notes, Series 1999A-5 Notes
and Series 1999A-6 "Aaa" and "AAA", respectively, and the Series 1999B-1 Notes
at least "A2" and "A", respectively, and there shall not have been any
announcement by Moody's or Fitch that (i) it is downgrading any of its ratings
assigned to any Series of Notes or (ii) it is reviewing its ratings assigned to
any Series of Notes with a view to possible downgrading, or with negative
implications, or direction not determined.
(t) Resources shall have furnished or caused to be furnished to the
Representative an executed copy or certified copy of an executed copy of each of
the Basic Documents, each Guarantee Agreement, each Subservicing Agreement and
such further certificates and documents as the Representative shall have
reasonably requested.
(u) The Representative shall have received evidence satisfactory to it
that, on or before the Closing Date, UCC-1 financing statements have been or are
being filed (i) in the offices of the Secretary of State of the State of Ohio,
the Recorder of Hamilton County, Ohio, the Wisconsin Department of Financial
Institutions and the Milwaukee County (Wisconsin) Recorder, reflecting the
transfer of the interest of Student Loan Funding Holdings LLC in Financed
Student Loans to the Depositor ELT and (ii) in the offices of the Secretary of
State of Delaware, the Secretary of State of Ohio, the Recorder of Hamilton
County, Ohio, the Wisconsin Department of Financial Institutions and the
Milwaukee County (Wisconsin) Recorder, reflecting the transfer by the Depositor
ELT of the interest of the Depositor in the Financed Student Loans to the Trust
ELT and the proceeds thereof to the Trust and (iii) in the offices of the
Secretary of State of Delaware, the Secretary of State of Ohio, the Recorder of
Hamilton County, Ohio, the Wisconsin Department of Financial Institutions and
the Milwaukee County (Wisconsin) Recorder, reflecting the grant of the security
interest by the Trust in the Financed Student Loans and the proceeds thereof to
the Indenture Trustee.
All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are reasonably satisfactory
in form and substance to the Representative and counsel for the Representative.
9. EXPENSES. Resources agrees to pay or to otherwise cause the payment of
the following costs and expenses and all other costs and expenses incident to
the performance by it and the Trust of their respective obligations hereunder:
(i) the preparation, printing or reproduction of the Registration Statement,
each Prospectus and each amendment or supplement to any of them, this
<PAGE> 16
To the Parties Identified on Schedule 1 Hereto
October 27, 1999
Page 16
Agreement and each other Basic Document; (ii) the printing (or reproduction) and
delivery (including postage, air freight charges and charges for counting and
packaging) of such copies of the Registration Statement, each Prospectus and all
amendments or supplements to any of them as may be reasonably requested for use
in connection with the offering and sale of the Notes; (iii) the preparation,
printing, authentication, issuance and delivery of definitive certificates for
the Notes; (iv) the printing (or reproduction) and delivery of this Agreement,
the Blue Sky Memorandum and all other agreements or documents printed (or
reproduced) and delivered in connection with the offering of the Notes; (v)
qualification of the Indenture under the Trust Indenture Act; (vi) the
qualification of the Notes for offer and sale under the securities or Blue Sky
laws of such states as Resources and the Representative may agree (including the
reasonable fees, expenses and disbursements of counsel for the Underwriters
relating to the preparation, printing or reproduction, and delivery of any Blue
Sky Memorandum prepared in connection with such qualification); (vii) the fees
and disbursements of (A) counsel for Resources and the Depositor's counsel, (B)
the Indenture Trustee and its counsel, (C) the Depositor ELT and its counsel,
(D) the Trust ELT and its counsel, (E) The Depository Trust Company in
connection with the book-entry registration of the Notes, and (F) Richards,
Layton & Finger, P.A., Special Delaware Counsel to the Trust in connection with
the preparation of the opinion referred to in Section 8(c) and Section 8(g), and
(viii) the fees charged by Moody's and Fitch for rating the Notes.
10. DEFAULT BY ONE OF THE UNDERWRITERS. If any of the Underwriters shall
fail at the Closing Date to purchase the Notes which it is obligated to purchase
hereunder (the "Defaulted Notes") and the principal amount of the Defaulted
Notes does not exceed 10% of the total principal amount of the Notes set forth
on the first page hereof, the Representative may make arrangements satisfactory
to the Depositor for the purchase of such Defaulted Notes by other persons,
including the remaining Underwriter or Underwriters (the "Non-Defaulting
Underwriters"), but if no such arrangements are made within one (1) Business Day
thereafter, the Non-Defaulting Underwriters shall be obligated severally, in
proportion to their respective total commitments hereunder, to purchase the
Notes which such defaulting Underwriters agreed but failed to purchase. If any
Underwriter or Underwriters so default and the aggregate principal amount of the
Notes with respect to which such default or defaults occur is more than 10% of
the total principal amount of the Notes set forth on the first page hereof and
arrangements satisfactory to the Representative and the Depositor for the
purchase of such Notes by other persons are not made within two (2) Business
Days after such default, then this Agreement shall terminate without liability
on the part of the Non-Defaulting Underwriters.
No action taken pursuant to this Section 10 shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement, either the Non-Defaulting Underwriters or the Depositor shall
have the right to postpone the Closing Date for a period not exceeding seven
days in order to effect any required changes in the Registration Statement or
Prospectus or in any other documents or arrangements.
<PAGE> 17
To the Parties Identified on Schedule 1 Hereto
October 27, 1999
Page 17
11. EFFECTIVE DATE OF AGREEMENT. This Agreement shall become effective upon
the execution and delivery hereof by all the parties hereto. Until such time as
this Agreement shall have become effective, it may be terminated by Resources or
the Depositor, by notifying the Representative, or by the Representative, by
notifying Resources and the Depositor.
Any notice under this Section 11 may be given by telegram, telecopy or
telephone but shall be subsequently confirmed by letter.
12. TERMINATION OF AGREEMENT. This Agreement shall be subject to
termination in the absolute discretion of the Representative, without liability
on the part of any Underwriter, by notice to Resources and the Depositor, if
prior to the Closing Date, (i) trading in securities generally on the New York
Stock Exchange shall have been suspended or materially limited, (ii) a general
moratorium on commercial banking activities in New York shall have been declared
by either Federal or New York state authorities, (iii) there shall have occurred
any outbreak or escalation of hostilities or other international or domestic
calamity, crisis or change in political, financial or economic conditions, the
effect of which on the financial markets of the United States is such as to make
it, in the reasonable judgment of the Representative, impracticable or
inadvisable to commence or continue the offering of the Notes on the terms set
forth in the Prospectus, or to enforce contracts for the resale of the Notes by
the Underwriters, (iv) legislation shall be enacted by the Congress of the
United States or a decision by a court of the United States or the Tax Court of
the United States shall be rendered, or an officially published ruling,
regulation, proposed regulation or official statement by or on behalf of the
Treasury Department of the United States, the Internal Revenue Service or any
other governmental agency shall be made, with respect to federal taxation upon
revenues or other income of the general character expected to be pledged under
the Indenture or upon interest received on securities of the general character
of the Notes, or which would have the effect of changing, directly or
indirectly, the federal income tax consequences of interest on securities of the
general character of the Notes in the hands of the holders thereof, which in the
opinion of counsel to the Representative materially affects the market price of
the Notes, or (v) legislation shall be enacted by the States of Delaware or
Ohio, or a decision by a court of competent jurisdiction of the States of
Delaware or Ohio or any administrative tribunal of the States of Delaware or
Ohio or other governmental agency or department thereof shall be rendered with
respect to taxation by the States of Delaware or Ohio or any of their political
subdivisions upon revenues or other income of the general character expected to
be pledged under the Indenture, or upon interest received on securities of the
general character of the Notes, or which would have the effect of changing,
directly or indirectly, the tax consequences under the States of Delaware or
Ohio tax law of interest on securities of the general character of the Notes in
the hands of the holders thereof, which in the opinion of counsel to the
Representative materially affects the market price of the Notes. Notice of such
termination may be given to Resources and the Depositor, by telegram, telecopy
or telephone and shall be subsequently confirmed by letter.
<PAGE> 18
To the Parties Identified on Schedule 1 Hereto
October 27, 1999
Page 18
13. INFORMATION FURNISHED BY THE UNDERWRITER. The statements set forth
under the heading "Underwriting" in the Prospectus Supplement dated October 27,
1999 constitute the only information furnished by or on behalf of the
Underwriters as such information is referred to in Sections 3(b) and 7 hereof,
and each Underwriter confirms that such statements relating to such Underwriter
are correct.
14. REPRESENTATION OF UNDERWRITERS. The Representative shall act for the
several Underwriters in connection with this financing, and any action under
this Agreement taken by the Representative will be binding upon all the
Underwriters.
15. MISCELLANEOUS. Except as otherwise provided in Sections 6, 11 and 12
hereof, notice given pursuant to any provision of this Agreement shall be in
writing and shall be delivered (i) if to Resources or the Depositor, to Student
Loan Funding Resources, Inc., One West Fourth Street, Suite 210, Cincinnati,
Ohio 45202, Attention: Senior Vice President and Chief Financial Officer,
facsimile (513) 763-4340, (ii) if to the Trust, to the Eligible Lender Trustee,
at the Corporate Trust Office of the Eligible Lender Trustee and (iii) if to the
Representative, to Salomon Smith Barney Inc., 388 Greenwich Street, 32nd Floor,
New York, NY 10013, Attention: Debt Organization Group, facsimile (212)
816-0598.
This Agreement has been and is made solely for the benefit of the
Underwriters, the Trust, the Depositor and Resources, their respective
directors, officers, trustees and controlling persons referred to in Section 7
hereof and their respective successors and assigns, to the extent provided
herein, and no other person shall acquire or have any right under or by virtue
of this Agreement. Neither the term "successor" nor the term "successors and
assigns" as used in this Agreement shall include a purchaser from any
Underwriter of any of the Notes in its status as such purchaser.
16. APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed within the State of New York without giving effect to the
choice of laws or conflict of laws principles thereof.
17. COUNTERPARTS. This Agreement may be signed in various counterparts
which together constitute one and the same instrument. If signed in
counterparts, this Agreement shall not become effective unless at least one
counterpart hereof or thereof shall have been executed and delivered on behalf
of each party hereto.
<PAGE> 19
Please confirm that the foregoing correctly sets forth the agreement
among Resources, the Depositor, the Trust and the Underwriters.
Very truly yours,
STUDENT LOAN FUNDING RESOURCES, INC.
By: /s/ Perry D. Moore
------------------------------------
Name: Perry D. Moore
Title: Senior Vice President &
Chief Financial Officer
STUDENT LOAN FUNDING RIVERFRONT LLC
By: /s/ Perry D. Moore
------------------------------------
Name: Perry D. Moore
Title: Senior Vice President
STUDENT LOAN FUNDING 1999-A/B TRUST
By: FIRSTAR BANK, NATIONAL ASSOCIATION
not in its individual capacity but
solely as co-owner Trustee
on behalf of the Trust,
By: /s/ Brian J. Gardner
-------------------------------
Name: Brian J. Gardner
Title: Vice President & Trust Officer
Confirmed as of the date
first above mentioned.
SALOMON SMITH BARNEY INC.
By: /s/ Paul B. Sheldon
-------------------------------
Name: Paul B. Sheldon
Title: Managing Director
Acting on behalf of itself
and as Representative of
the several Underwriters named herein.
<PAGE> 20
SCHEDULE I
<TABLE>
<CAPTION>
---------------------------------------------------
Salomon Banc of
Series of Notes Smith Barney America
--------------- Inc. Securities LLC Total
---------------------------------------------------
<S> <C> <C> <C> <C>
Series 1999A-1 Notes $75,000,000 $75,000,000
Series 1999A-2 Notes $75,000,000 $75,000,000
Series 1999A-3 Notes $75,000,000 $75,000,000
Series 1999A-4 Notes $100,000,000 $100,000,000
Series 1999A-5 Notes $75,000,000 $75,000,000
Series 1999A-6 Notes $95,000,000 $95,000,000
Series 1999B-1 Notes $30,000,000 $30,000,000
----------- ------------ ------------
Total............... $425,000,000 $100,000,000 $525,000,000
============ ============ ============
</TABLE>
Interest Rate
During each Interest Accrual Period, the Series 1999A-1 Notes, Series 1999A-2
Notes, Series 1999A-3 Notes, Series 1999A-4 Notes, Series 1999A-5 Notes and
Series 1999A-6 Notes will each bear interest at the Auction Rate, subject to
certain limitations described in the Prospectus. During each Interest Accrual
Period, the Series 1999B-1 Notes will bear interest at the Auction Rate, subject
to certain limitations described in the Prospectus. The respective initial
interest rates for the respective interest periods will be as follows:
Series 1999A-1 Notes.
- ---------------------
Initial interest rate will be 5.40% per annum for the period ending
November 9, 1999. The Initial Interest Determination Date will be
November 9, 1999 and the Interest Determination Date will be each
Tuesday thereafter.
Series 1999A-2 Notes.
- ---------------------
Initial interest rate will be 5.40% per annum for the period ending
November 10, 1999. The Initial Interest Determination Date will be
November 10, 1999 and the Interest Determination Date will be each
Thursday thereafter commencing November 18, 1999.
<PAGE> 21
Series 1999A-3 Notes.
- ---------------------
Initial interest rate will be 5.50% per annum for the period ending
November 22, 1999. The Initial Interest Determination Date will be
November 22, 1999 and the Interest Determination Date will be each
fourth Monday thereafter.
Series 1999A-4 Notes.
- ---------------------
Initial interest rate will be 5.57% per annum for the period ending
December 13, 1999. The Initial Interest Determination Date will be
December 13, 1999 and the Interest Determination Date will be each
fourth Monday thereafter.
Series 1999A-5 Notes.
- ---------------------
Initial interest rate will be 6.225% per annum for the period ending
January 18, 2000. The Initial Interest Determination Date will be
January 18, 2000 and the Interest Determination Date will be each
fourth Tuesday thereafter.
Series 1999A-6 Notes.
- ---------------------
Initial interest rate will be 6.225% per annum for the period ending
January 20, 2000. The Initial Interest Determination Date will be
January 20, 2000 and the Interest Determination Date will be each
fourth Thursday thereafter.
Series 1999B-1 Notes.
- ---------------------
Initial interest rate will be 5.60% per annum for the period ending
November 22, 1999. The Initial Interest Determination Date will be
November 22, 1999 and the Interest Determination Date will be each
fourth Monday thereafter.
<PAGE> 1
EXHIBIT 3.3
- --------------------------------------------------------------------------------
TRUST AGREEMENT
Relating to
STUDENT LOAN FUNDING 1999-A/B TRUST
Dated as of August 1, 1999
among
STUDENT LOAN FUNDING RIVERFRONT LLC,
FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION,
not in its individual capacity, but solely
as Delaware Trustee,
and
FIRSTAR BANK, NATIONAL ASSOCIATION,
not in its individual capacity, but solely
as Co-Owner Trustee,
and acknowledged and agreed to by
FIRSTAR BANK, NATIONAL ASSOCIATION,
not in its individual capacity, but solely
as Co-Owner Eligible Lender Trustee
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TABLE OF CONTENTS
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INTRODUCTION......................................................................................................1
ARTICLE I.........................................................................................................1
DEFINITIONS.......................................................................................................1
Section 1.1. Definitions......................................................................................1
Section 1.2. Usage of Terms...................................................................................5
Section 1.3. Section References...............................................................................5
ARTICLE II........................................................................................................6
CREATION OF TRUST.................................................................................................6
Section 2.1. Creation of Trust................................................................................6
Section 2.2. Office...........................................................................................6
Section 2.3. Purposes and Powers..............................................................................6
Section 2.4. Appointment of Delaware Trustee and Co-Owner Trustee.............................................7
Section 2.5. Initial Capital Contribution of Trust Property...................................................7
Section 2.6. Declaration of Trust.............................................................................7
Section 2.7. Liability of a Certificateholder.................................................................8
Section 2.8. Title to Trust Property..........................................................................8
Section 2.9. Situs of Trust...................................................................................8
Section 2.10. Representations and Warranties of the Depositor..................................................9
Section 2.11. Federal Income Tax Allocations..................................................................10
Section 2.12 Covenants of Certificateholder..................................................................10
ARTICLE III......................................................................................................11
THE CERTIFICATE..................................................................................................11
Section 3.1. Initial Ownership...............................................................................11
Section 3.2. The Certificate.................................................................................11
Section 3.3. Authentication of Certificate...................................................................11
Section 3.4. Registration of Transfer and Exchange of Certificate............................................11
Section 3.5. Mutilated, Destroyed, Lost or Stolen Certificate................................................12
Section 3.6. Person Deemed Certificateholder.................................................................13
Section 3.7. [Reserved]......................................................................................13
Section 3.8. Maintenance of Office or Agency.................................................................13
Section 3.9. Appointment of Paying Agent.....................................................................14
ARTICLE IV.......................................................................................................15
ACTIONS BY DELAWARE TRUSTEE, CO-OWNER TRUSTEE AND
CO-OWNER ELIGIBLE LENDER TRUSTEE.................................................................................15
Section 4.1. Restriction on Power of Certificateholder.......................................................15
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Section 4.2. Prior Notice to Certificateholder with Respect to Certain Matters...............................15
Section 4.3. Action by Certificateholder with Respect to Bankruptcy..........................................15
Section 4.4. Restrictions on Certificateholder's Power.......................................................15
Section 4.5. Rights of Certificateholder.....................................................................16
ARTICLE V........................................................................................................17
APPLICATION OF TRUST FUNDS; CERTAIN DUTIES.......................................................................17
Section 5.1. Certificate Contribution Account; Certificate Distribution Account..............................17
Section 5.2. Application of Funds in Certificate Distribution Account and
Certificate Contribution Account........................................................................18
Section 5.3. Method of Payment...............................................................................18
Section 5.4. No Segregation of Moneys; No Interest...........................................................19
Section 5.5. Accounting; Reports; Tax Returns................................................................19
ARTICLE VI.......................................................................................................20
AUTHORITY AND DUTIES OF DELAWARE Trustee, CO-OWNER
TRUSTEE AND CO-OWNER ELIGIBLE LENDER TRUSTEE.....................................................................20
Section 6.1. General Authority...............................................................................20
Section 6.2. General Duties..................................................................................20
Section 6.3. Action upon Instruction.........................................................................20
Section 6.4. No Duties Except as Specified in this Agreement or in Instructions..............................21
Section 6.5. No Action Except under Specified Documents or Instructions......................................22
Section 6.6. Restrictions....................................................................................22
Section 6.7. Administration Agreement........................................................................22
ARTICLE VII......................................................................................................24
CONCERNING THE Delaware Trustee, CO-OWNER TRUSTEE AND
CO-OWNER ELIGIBLE LENDER TRUSTEE.................................................................................24
Section 7.1. Acceptance of Delaware Trustee and Co-Owner Trustee.............................................24
Section 7.2. Furnishing of Documents.........................................................................25
Section 7.3. Representations and Warranties..................................................................25
Section 7.4. Reliance; Advice of Counsel.....................................................................27
Section 7.5. Not Acting in Individual Capacity...............................................................28
Section 7.6. Delaware Trustee Not Liable for Certificate, Notes or Financed
Student Loans...........................................................................................28
Section 7.7. Delaware Trustee, Co-Owner Trustee and Co-Owner Eligible Lender
Trustee May Own Certificate and Notes...................................................................29
ARTICLE VIII.....................................................................................................30
COMPENSATION OF Delaware Trustee, CO-OWNER TRUSTEE AND
CO-OWNER ELIGIBLE LENDER TRUSTEE.................................................................................30
Section 8.1. Fees and Expenses of Delaware Trustee, Co-Owner Trustee and
Co-Owner Eligible Lender Trustee........................................................................30
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Section 8.2. Indemnification.................................................................................30
Section 8.3. Non-recourse Obligations........................................................................31
ARTICLE IX.......................................................................................................32
TERMINATION......................................................................................................32
Section 9.1. Termination of the Trust........................................................................32
ARTICLE X........................................................................................................34
SUCCESSOR Delaware TrusteeS, CO-OWNER TRUSTEES
AND CO-OWNER ELIGIBLE LENDER TRUSTEES............................................................................34
Section 10.1. Eligibility Requirements for Delaware Trustee, Co-Owner
Trustee and Co-Owner Eligible Lender Trustee............................................................34
Section 10.2. Resignation or Removal of Delaware Trustee, Co-Owner Trustee
or Co-Owner Eligible Lender Trustee.....................................................................34
Section 10.3. Successor Trustee..............................................................................35
Section 10.4. Merger or Consolidation of Delaware Trustee, Co-Owner Trustee or
Co-Owner Eligible Lender Trustee........................................................................36
Section 10.5. Appointment of Additional Co-Trustee or Separate Trustee.......................................36
ARTICLE XI.......................................................................................................39
MISCELLANEOUS PROVISIONS.........................................................................................39
Section 11.1. Amendment......................................................................................39
Section 11.2. No Recourse....................................................................................40
Section 11.3. Governing Law..................................................................................40
Section 11.4. Severability of Provisions.....................................................................41
Section 11.5. Certificate Nonassessable and Fully Paid.......................................................41
Section 11.6. Third-Party Beneficiaries......................................................................41
Section 11.7. Counterparts...................................................................................41
Section 11.8. Notices........................................................................................41
SIGNATURES.......................................................................................................43
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EXHIBIT A - FORM OF TRUST CERTIFICATE
EXHIBIT B - FORM OF PURCHASER'S LETTER
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THIS TRUST AGREEMENT, dated as of August 1, 1999, is made among STUDENT
LOAN FUNDING RIVERFRONT LLC, a Delaware limited liability company (together with
its permitted successors and assigns, the "Depositor"), FIRST UNION TRUST
COMPANY, NATIONAL ASSOCIATION, a national banking association, not in its
individual capacity, but solely as Delaware Trustee of the Trust created
hereunder (in such capacity, the "Delaware Trustee"), and FIRSTAR BANK, NATIONAL
ASSOCIATION, a national banking association, not in its individual capacity, but
solely as co-owner trustee of the Trust created hereunder (in such capacity, the
"Co-Owner Trustee") and is acknowledged and agreed to by, for purposes of any
provision relating to FIRSTAR BANK, NATIONAL ASSOCIATION, a national banking
association, not in its individual capacity, but solely as co-owner eligible
lender trustee for the benefit of the Co-Owner Trustee (in such capacity, the
"Co-Owner Eligible Lender Trustee").
WHEREAS, the Depositor desires to form a common law (as opposed to
statutory) trust under the laws of the State of Delaware (the "Trust") and, in
connection therewith, to transfer certain of the assets to be pledged under the
Indenture to secure the payment of the Notes to the Co-Owner Trustee and, but
solely with respect to legal title to the Financed Student Loans, to the
Co-Owner Eligible Lender Trustee;
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, and other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the parties agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 DEFINITIONS.
Capitalized words and phrases used as defined words and phrases and not
otherwise defined herein shall have the meanings given such words and phrases in
the Indenture. The following words and phrases, unless otherwise specified,
shall have the following meanings:
"ADMINISTRATION AGREEMENT" shall mean the Administration
Agreement, to be dated as of August 1, 1999, between the Administrator
and the Co-Owner Trustee, as the same may be amended and supplemented
from time to time.
"ADMINISTRATOR" shall mean Student Loan Funding Resources,
Inc., an Ohio corporation, or any successor Administrator under the
Administration Agreement.
"AGREEMENT" or "THIS AGREEMENT" shall mean this Trust
Agreement, all amendments and supplements thereto and all exhibits and
schedules to any of the foregoing.
"AUTHENTICATION AGENT" shall mean Firstar Bank, National
Association, or its successor in interest, and any successor
authentication agent appointed as provided in this Agreement.
"BENEFIT PLAN" shall mean the meaning assigned in Section 3.4
hereof.
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"BUSINESS DAY" shall mean any day on which the Delaware
Trustee, Co-Owner Trustee and the Paying Agent, if any, at their
respective addresses set forth in or for purposes of this Agreement,
are open for commercial banking business and on which the New York
Stock Exchange is open.
"CERTIFICATE" shall mean a certificate executed by the
Delaware Trustee and authenticated by the Authentication Agent
evidencing an undivided interest, whether fractional or whole, in the
Trust.
"CERTIFICATE CONTRIBUTION ACCOUNT" shall mean the account
designated as the Certificate Contribution Account in, and which is
established and maintained pursuant to, Section 5.1 hereof.
"CERTIFICATE DISTRIBUTION ACCOUNT" shall mean the account
designated as the Certificate Distribution Account in, and which is
established and maintained pursuant to, Section 5.1 hereof.
"CERTIFICATE REGISTER" shall mean the register maintained by
the Certificate Registrar pursuant to Section 3.4 hereof.
"CERTIFICATE REGISTRAR" shall mean the registrar appointed
pursuant to Section 3.4 hereof.
"CERTIFICATEHOLDER" or "HOLDER" shall mean the Person in whose
name the Certificate is registered in the Certificate Register;
provided, however, that if no Certificate has been issued by the
Delaware Trustee, the Depositor shall be deemed to be the
Certificateholder for purposes of this Agreement.
"CERTIFICATEHOLDER'S DISTRIBUTION DATE" shall mean the date on
which amounts in the Certificate Distribution Account are disbursed by
the Co-Owner Trustee to the Certificateholder which Date shall be the
last Business Day of each calendar month in which a deposit has been
made to the Certificate Distribution Account at least one day prior to
such last Business Day.
"CLOSING DATE" shall mean August 1, 1999.
"CO-OWNER ELIGIBLE LENDER TRUST AGREEMENT" shall mean the
Co-Owner Eligible Lender Trust Agreement, dated as of August 1, 1999,
by and between the Co-Owner Trustee and the Co-Owner Eligible Lender
Trustee, as originally executed and as from time to time amended or
supplemented.
"CO-OWNER ELIGIBLE LENDER TRUSTEE" shall mean Firstar Bank,
National Association, not in its individual capacity, but solely as
eligible lender trustee for the benefit of the Co-Owner Trustee, and
its permitted successors and assigns. The Co-Owner Eligible Lender
Trustee is not a trustee of the Trust.
"CO-OWNER TRUSTEE" shall mean Firstar Bank, National
Association, not in its individual capacity, but solely as co-owner
trustee of the Trust created hereunder, and its permitted successors
and assigns.
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"CODE" shall mean the Internal Revenue Code of 1986, as
amended, and the regulations promulgated thereunder.
"CORPORATE TRUST OFFICE" shall mean (i) with respect to the
Delaware Trustee, the principal office of the Delaware Trustee at
which, at any particular time, its corporate trust business shall be
administered, which office at the Closing Date is located at One Rodney
Square, Suite 100, 920 King Street, Wilmington, Delaware 19801,
Attention: Corporate Trust Administration; the telecopy number for the
Corporate Trust Office on the date of the execution of this Agreement
is (302) 888-7544 ; (ii) with respect to the Co-Owner Trustee, the
principal office of the Co-Owner Trustee at which, at any particular
time, its corporate trust business shall be administered, which office
at the Closing Date is located at 425 Walnut Street, Cincinnati, Ohio
45202, Attention: Corporate Trust Administration; the telecopy number
for the Corporate Trust Office on the date of the execution of this
Agreement is (513) 632-5511 and (iii) with respect to the Co-Owner
Eligible Lender Trustee, at the principal office of the Co-Owner
Eligible Lender Trustee at which, at any particular time, its corporate
trust business shall be administered, which office at the Closing Date
is located at 425 Walnut Street, Cincinnati, Ohio 45202, Attention:
Corporate Trust Administration -- Eligible Lender Trustee; the telecopy
number for the Corporate Trust Office of the Co-Owner Eligible Lender
Trustee on the date of the execution of this Agreement is (513)
632-5511.
"DELAWARE TRUSTEE" shall mean First Union Trust Company,
National Association, not in its individual capacity, but solely as
Delaware trustee of the Trust created hereunder, and any successor
trustee appointed as provided in this Agreement.
"DEPOSITOR" shall mean Student Loan Funding Riverfront LLC, a
Delaware limited liability company, and its permitted successors and
assigns.
"DEPOSITOR ELIGIBLE LENDER TRUSTEE" shall mean Firstar Bank,
National Association, as the eligible lender trustee under the Eligible
Lender Trust Agreement, and its lawful successors and assigns.
"ELIGIBLE LENDER TRUST AGREEMENT" shall mean the Eligible
Lender Trust Agreement, dated as of August 1, 1999, by and between the
Depositor and the Depositor Eligible Lender Trustee, as originally
executed and as from time to time amended or supplemented.
"ERISA" shall mean the meaning assigned to such term in
Section 3.4(e) hereof.
"EXPENSES" shall have the meaning assigned to such term in
Section 8.2 hereof.
"INDEMNIFIED PARTIES" shall mean the meaning assigned to such
term in Section 8.2 hereof.
"INDENTURE" shall mean, collectively, the Indenture of Trust
and the Terms Supplement to the Indenture of Trust, each to be dated as
of ____________, 1999, among the Trust, the Co-Owner Eligible Lender
Trustee and the Indenture Trustee, as amended, supplemented or restated
from time to time.
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"INDENTURE TRUSTEE" shall mean Firstar Bank, National
Association, or its successor in interest, acting not individually but
solely as trustee, and any successor trustee appointed as provided in
the Indenture.
"INSTRUCTING PARTY" shall have the meaning assigned to such
term in Section 6.3(a) hereof
"MASTER SERVICING AGREEMENT" shall mean the Master Servicing
Agreement, to be dated as of August 1, 1999, between the Co-Owner
Trustee and the Administrator, as master servicer, as the same may be
amended and supplemented from time to time.
"NOTES" shall mean the Student Loan Asset-Backed Notes, Senior
Series 1999A-1, Senior Series 1999A-2 and Subordinate Series 1999B-1,
to be issued by the Trust under the Indenture.
"PAYING AGENT" shall mean any paying agent or co-paying agent
appointed pursuant to Section 3.9 hereof, which initially shall be
Firstar Bank, National Association.
"PERCENTAGE INTEREST" shall mean that percentage of the total
beneficial interest in the Trust that is held by the Certificateholder,
which Percentage Interest with respect to the initially issued
Certificate shall be 100%.
"RECORD DATE" shall mean, with respect to the
Certificateholder's Distribution Date, the close of business on the
last Business Day immediately preceding such Certificateholder's
Distribution Date.
"RELATED DOCUMENTS" shall mean the Co-Owner Eligible Lender
Trust Agreement, the Transfer and Sale Agreement, the Master Servicing
Agreement, the Indenture, the Certificate, the Notes and the
Administration Agreement. The Related Documents executed by any party
are referred to herein as "such party's Related Documents," "its
Related Documents" or by a similar expression.
"RESPONSIBLE OFFICER" shall mean a duly appointed officer of
the Delaware Trustee, the Co-Owner Trustee or the Co-Owner Eligible
Lender Trustee, having responsibility for performance of the respective
obligations of the Delaware Trustee, the Co-Owner Trustee or Co-Owner
Eligible Lender Trustee hereunder.
"STUDENT LOAN" shall have the meaning assigned to such term in
Section 1.1 of the Indenture.
"TRANSFER AND SALE AGREEMENT" shall mean the Transfer and Sale
Agreement, to be dated as of ____________, 1999, among the Transferor,
the Trust and the Co-Owner Eligible Lender Trustee, as the same may be
amended and supplemented from time to time.
"TRANSFEROR" shall mean, collectively, the Depositor or its
successor in interest, and the Depositor Eligible Lender Trustee or its
successor in interest, if and to the extent that the Depositor Eligible
Lender Trustee holds legal title to the Financed Student Loans
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on behalf of the Depositor to be transferred in trust to the Co-Owner
Eligible Lender Trustee.
"TRUST" shall mean the common law (as opposed to statutory)
trust created by this Agreement under the laws of the State of Delaware
and designated "Student Loan Funding 1999-A Trust", the estate of which
consists of the Trust Property.
"TRUST PROPERTY" shall mean the property and proceeds of every
description conveyed to the Co-Owner Trustee and, but solely with
respect to legal title to the Financed Student Loans, the Co-Owner
Eligible Lender Trustee (i) initially pursuant to Section 2.5 hereof
and (ii) hereafter pursuant to the Transfer and Sale Agreement,
together with all amounts deposited in the Certificate Contribution
Account and the Certificate Distribution Account (including all
Eligible Investments therein and all proceeds therefrom).
"TRUSTEE" shall mean any one of the Trustees.
"TRUSTEES" shall mean, collectively, the Delaware Trustee, the
Co-Owner Trustee and the Co-Owner Eligible Lender Trustee. (although
the Co-Owner Trustee is not a trustee of the Trust).
Section 1.2 USAGE OF TERMS.
With respect to all terms used in this Agreement, the singular includes
the plural and the plural the singular; words importing any gender include the
other genders; references to "writing" include printing, typing, lithography,
and other means of reproducing words in a visible form; references to agreements
and other contractual instruments include all subsequent amendments thereto or
changes therein entered into in accordance with their respective terms and not
prohibited by this Agreement; references to Persons include their permitted
successors and assigns; and the terms "include" or "including" mean "include
without limitation" or "including without limitation." To the extent that
definitions are contained in this Agreement, or in any such certificate or other
document, such definitions shall control.
Section 1.3 SECTION REFERENCES.
All references to Articles, Sections, paragraphs, subsections, exhibits
and schedules shall be to such portions of this Agreement unless otherwise
specified.
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ARTICLE II
CREATION OF TRUST
Section 2.1 CREATION OF TRUST.
There is hereby formed a common law (as opposed to statutory) trust to
be known as "Student Loan Funding 1999-A/B Trust," under which and in which
name, but solely to the extent provided in this Agreement, the Delaware Trustee
andthe Co-Owner Trustee may conduct business, make and execute contracts and
other instruments and sue and be sued. References to the name "Student Loan
Funding 1999-A/B Trust" in this Agreement, any Related Document or any
registration statement and related prospectus shall mean Firstar Bank, National
Association, not in its individual capacity, but solely as Co-Owner Trustee of
the Trust.
Section 2.2 OFFICE.
Except as otherwise provided in this Agreement with respect to the
Delaware Trustee for purposes of performance of the duties of the Delaware
Trustee set forth herein, the office of the Trust shall be in care of the
Co-Owner Trustee at its Corporate Trust Office or at such other address in the
State of Ohio as the Co-Owner Trustee may designate by written notice to the
Delaware Trustee, the Certificateholder and the Depositor.
Section 2.3 PURPOSES AND POWERS.
(a) The purpose of the Trust is, and the Delaware Trustee and the
Co-Owner Trustee on behalf of the Trust, but each only to the extent provided in
this Agreement, shall have the power and authority, to engage in the following
activities:
(i) to issue and sell the initial Certificate pursuant to this
Agreement and to pay the organizational, start-up and transactional
expenses of the Trust from amounts on deposit in the Certificate
Contribution Account;
(ii) to execute and deliver the Transfer and Sale Agreement,
whereby the Depositor and the Depositor Eligible Lender Trustee shall
transfer and assign to the Trust and the Co-Owner Eligible Lender
Trustee all of the Trust Property;
(iii) to assign, grant, transfer, pledge, mortgage and convey
the Trust Property to which it holds title and all of its right, title
and interest in the Transfer and Sale Agreement, to the Indenture
Trustee for the benefit of the Noteholders (and to execute (by any one
or more of the Trustees) and file Uniform Commercial Code financing
statements as deemed necessary or appropriate to evidence the same) and
to hold, manage and distribute to the Certificateholder pursuant to the
terms hereof any portion of the Trust Property released from the lien
of, and remitted to the Co-Owner Trustee for deposit in the Certificate
Distribution Account pursuant to, the Indenture;
(iv) to issue and sell one or more series of the Notes;
(v) to enter into and perform its obligations under the
Related Documents to which it is a party;
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(vi) to engage in those activities, including entering into
agreements, that are necessary, suitable or convenient to accomplish
the foregoing or are incidental thereto or connected therewith; and
(vii) subject to compliance with the Related Documents, to
engage in such other activities as may be required in connection with
conservation of the Trust Property and the making of distributions to
the Certificateholder.
(b) Except as otherwise expressly provided herein with respect to the
Delaware Trustee and the Co-Owner Eligible Lender Trustee, the Co-Owner Trustee
is hereby authorized to engage in the foregoing activities. The Co-Owner Trustee
shall not engage in any activity other than in connection with the foregoing or
other than as required or expressly authorized by the terms of this Agreement or
the Related Documents.
Section 2.4 APPOINTMENT OF DELAWARE TRUSTEE AND CO-OWNER TRUSTEE.
The Depositor hereby appoints (i) the Delaware Trustee as trustee of
the Trust and (ii) the Co-Owner Trustee as co-trustee of the Trust, effective as
of the date hereof, to have all the respective rights, powers and duties set
forth herein. Each of the Delaware Trustee and the Co-Owner Trustee hereby
accepts its respective appointment.
Section 2.5 INITIAL CAPITAL CONTRIBUTION OF TRUST PROPERTY.
The Depositor hereby assigns, transfers, conveys and sets over to the
Co-Owner Trustee, as of the date hereof, the sum of One Hundred Dollars ($100).
The Co-Owner Trustee hereby acknowledges receipt in trust from the Depositor, as
of the date hereof, of the foregoing contribution, which shall constitute the
initial Trust Property and shall be deposited in the Certificate Contribution
Account. To the extent not otherwise provided for by amounts on deposit in the
Certificate Contribution Account, the Depositor shall pay organizational
expenses of the Trust as they may arise or shall, upon the request of the
Delaware Trustee, the Co-Owner Trustee or the Co-Owner Eligible Lender Trustee,
promptly reimburse the Delaware Trustee, the Co-Owner Trustee or the Co-Owner
Eligible Lender Trustee for any such expenses paid by the Delaware Trustee, the
Co-Owner Trustee or the Co-Owner Eligible Lender Trustee.
Section 2.6 DECLARATION OF TRUST.
Each of the Delaware Trustee and the Co-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 Certificateholder, subject to
the interests and rights in the Trust Property granted to other Persons by the
Related Documents. The Co-Owner Eligible Lender Trustee hereby acknowledgeds and
agrees that it is holding legal title to that part of the Trust Property
constituting Financed Student Loans in trust upon and subject to the conditions
set forth herein. It is the intention and agreement of the parties hereto that
the Trust constitute a common law (as opposed to a statutory) trust under the
laws of the State of Delaware and that this Agreement constitute the governing
instrument of such trust. It is the intention and agreement of the parties
hereto that, solely for income and franchise tax purposes, the Trust, having at
all times but a single Certificateholder, shall be treated as a "disregarded
entity", i.e. the Trust will be disregarded as an entity separate from the
Certificateholder. Unless otherwise required by appropriate tax authorities, the
Trust will file or cause to be filed all required annual or other necessary
returns, reports and other forms consistent with the characterization of the
Trust as a
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"disregarded entity" for such tax purposes. Effective as of the date hereof,
each of the Delaware Trustee, the Co-Owner Trustee and the Co-Owner Eligible
Lender Trustee shall have all rights, powers and duties set forth herein and in
the laws of the State of Delaware with respect to accomplishing the purposes of
the Trust.
Section 2.7 LIABILITY OF A CERTIFICATEHOLDER.
(a) The Certificateholder shall not be liable directly to indemnify an
injured party for all losses, claims, damages, liabilities and expenses of the
Trust, to the extent not paid out of the Trust Property. The Certificateholder
shall not be liable for any losses incurred by a Note Owner in the capacity of
an investor in the Notes.
(b) The Certificateholder shall not have any personal liability for any
liability or obligation of the Trust or by reason of any action taken by the
parties to this Agreement pursuant to any provisions of this Agreement or any
Related Document.
Section 2.8 TITLE TO TRUST PROPERTY.
(a) Legal title to all the Trust Property (other than the Financed
Student Loans) shall be vested at all times in the Co-Owner Trustee, not in its
individual capacity but solely as Co-Owner Trustee of the Trust and except where
applicable law in any jurisdiction requires legal title to any part of such
Trust Property to be vested in another trustee or trustees, in which case, after
the appropriate actions under Section 10.5 hereof shall have been taken, legal
title shall be deemed to be vested in such other co-trustee and/or separate
trustee, as the case may be. Legal title to all Trust Property consisting of the
Financed Student Loans shall be vested at all times in the Co-Owner Eligible
Lender Trustee, not in its individual capacity but solely as Co-Owner Eligible
Lender Trustee pursuant to the Co-Owner Eligible Lender Trust Agreement for the
benefit of the Trust; provided, however, that any such trustee shall be an
"eligible lender" under the Higher Education Act.
(b) The Certificateholder shall not have legal title to any part of the
Trust Property. The Certificateholder shall be entitled to receive distributions
with respect to its undivided beneficial interest therein only in accordance
with Articles V and IX of this Agreement. No transfer, by operation of law or
otherwise, of any right, title or interest by the Certificateholder of its
ownership interest in the Trust Property shall operate to terminate this
Agreement or the trusts hereunder or entitle any transferee to an accounting or
to the transfer to it of legal title to any part of the Trust Property.
Section 2.9 SITUS OF TRUST.
The chief executive office and principal place of business of the Trust
will be located at the Corporate Trust Office of the Co-Owner Trustee. The Trust
shall at all times be administered in the State of Ohio. All bank accounts shall
be maintained by the Co-Owner Trustee and shall be located in the State of Ohio.
The Trust shall not have any employees in any state; provided, however, that
nothing herein shall restrict or prohibit the Delaware Trustee, the Co-Owner
Trustee, the Co-Owner Eligible Lender Trustee, the Depositor, the Administrator,
the Servicer or any agent of the Trustees from having employees within or
without the State of Delaware or the State of Ohio. Payment will be received by
the Co-Owner Trustee only in the State of Ohio, and payments will be made by the
Co-Owner Trustee only from the State of Ohio.
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Section 2.10 REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR.
By execution of this Agreement, the Depositor makes the following
representations and warranties on which the Delaware Trustee, the Co-Owner
Trustee and the Co-Owner Eligible Lender Trustee each relies in accepting the
Trust Property in trust and issuing the Certificate:
(a) Organization and Good Standing. It has been duly organized and is
validly existing as a limited liability company in good standing under the laws
of the State of Delaware, with power and authority to own its properties and to
conduct its business as such properties are currently owned and as such business
is currently conducted and is proposed to be conducted pursuant to this
Agreement and the Related Documents.
(b) Due Qualification. It is duly qualified to do business as a limited
liability company in good standing, and has obtained all necessary licenses and
approvals, in all jurisdictions in which the ownership or lease of its property,
the conduct of its business and the performance of its obligations under this
Agreement and the Related Documents requires such qualification.
(c) Power and Authority. It has the power and authority to execute and
deliver this Agreement and its Related Documents and to perform its obligations
pursuant thereto, and the execution, delivery and performance of this Agreement
and its Related Documents have been duly authorized by all necessary company
action.
(d) No Consent Required. No consent, license, approval or authorization
or registration or declaration with, any Person or with any governmental
authority, bureau or agency is required in connection with its execution,
delivery or performance of this Agreement and the Related Documents, except for
such as have been obtained, effected or made.
(e) No Violation. The consummation of the transactions contemplated by
this Agreement and its Related Documents and the fulfillment of its obligations
under this Agreement and its Related Documents shall not conflict with, result
in any breach of any of the terms and provisions of or constitute (with or
without notice, lapse of time or both) a default under, its certificate of
formation or limited liability company agreement, or any indenture, agreement,
mortgage, deed of trust or other instrument to which it is a party or by which
it is bound, or result in the creation or imposition of any lien upon any of its
properties pursuant to the terms of any such indenture, agreement, mortgage,
deed of trust or other instrument, or violate any law, order, rule or regulation
applicable to it of any court or of any federal or state regulatory body,
administrative agency or other governmental instrumentality having jurisdiction
over it or any of its properties.
(f) No Proceedings. There are no proceedings or investigations pending
or, to its knowledge, threatened against it before any court, regulatory body,
administrative agency or other tribunal or governmental instrumentality having
jurisdiction over it or its properties (i) asserting the invalidity of this
Agreement or any of the Related Documents, (ii) seeking to prevent the issuance
of the Certificate or the Notes or the consummation of any of the transactions
contemplated by this Agreement or any of the Related Documents, (iii) seeking
any determination or ruling that might materially and adversely affect its
performance of its obligations under, or the validity or enforceability of, this
Agreement or any of the Related
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Documents, or (iv) seeking to adversely affect the federal income tax or other
federal, state or local tax attributes of the Certificate.
Section 2.11 FEDERAL INCOME TAX ALLOCATIONS.
Net income of the Trust for any month as determined for Federal income
tax purposes (and each item of income, gain, loss and deduction entering into
the computation thereof) shall be allocated to the Certificateholder, as of the
Record Date for such month, in an amount equal to the amount distributable for
such month to such Certificateholder.
Section 2.12 COVENANTS OF CERTIFICATEHOLDER.
The Certificateholder agrees:
(a) to be bound by the terms and conditions of the Certificate and of
this Agreement, including any supplements or amendments hereto and to perform
the obligations of the Certificateholder as set forth therein or herein, in all
respects as if it were a signatory hereto. This undertaking is made for the
benefit of the Delaware Trustee, the Co-Owner Trustee, the Co-Owner Eligible
Lender Trustee and any other future Certificateholder;
(b) to hereby appoint the Administrator as such Certificateholder's
agent and attorney-in-fact to sign any federal income tax information return
filed on behalf of the Certificateholder with respect to this Agreement and
that, if requested by the Co-Owner Trustee, it will sign such federal income tax
information return in its capacity as holder of an interest in the Trust. The
Certificateholder also hereby agrees that in its tax returns it will not take
any position inconsistent with those taken in any tax returns filed by the
Administrator on behalf of the Certificateholder;
(c) to notify the Delaware Trustee and the Co-Owner Trustee of any
transfer by it of the Certificate in a taxable sale or exchange, within 30 days
of the date of the transfer, provided, however, that notwithstanding anything to
the contrary in this Agreement, the Certificateholder shall not transfer the
Certificate so long as there are any Notes outstanding unless the transfer is
related to (i) the adjudication of the Certificateholder as bankrupt or
insolvent, (ii) the reorganization or relief of the Certificateholder under any
applicable federal or state law relating to bankruptcy, (iii) the appointment of
a receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Certificateholder or a substantial part of its property or (iv)
an assignment by the Certificateholder for the benefit of its creditors; and
(d) not to, for any reason, institute proceedings for the Trust to be
adjudicated a bankrupt or insolvent, or consent to the institution of bankruptcy
or insolvency proceedings against the Trust, or file a petition seeking or
consenting to reorganization or relief under any applicable federal or state law
relating to bankruptcy, or consent to the appointment of a receiver, liquidator,
assignee, trustee, sequestrator (or other similar official) of the Trust or a
substantial part of its property, or cause or permit the Co-Owner Trustee or the
Co-Owner Eligible Lender Trustee to make any assignment for the benefit of its
creditors, or admit in writing its inability to pay its debts generally as they
become due, or declare or effect a moratorium on its debt or take any action in
furtherance of any such action.
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ARTICLE III
THE CERTIFICATE
Section 3.1 INITIAL OWNERSHIP.
Upon the creation of the Trust by the contribution by the Depositor
pursuant to Section 2.5 and in the absence of the issuance of the initial
Certificate, the Depositor shall be the sole beneficiary of the Trust.
Section 3.2 THE CERTIFICATE.
A single Certificate registered in the name of the Depositor and
representing the whole beneficial interest in the Trust shall be initially
issued in accordance with the provisions of Section 3.3 hereof. The Certificate
shall be substantially in the form of Exhibit A to this Agreement with such
changes as are necessary or appropriate and not inconsistent with this
Agreement. The Certificate shall be executed by the Delaware Trustee by manual
or facsimile signature of any authorized signatory of the Delaware Trustee. A
Certificate bearing the manual or facsimile signatures of individuals who were,
at the time when such signatures were affixed, authorized to sign on behalf of
the Delaware Trustee shall be validly issued and entitled to the benefits of
this Agreement, notwithstanding that such individuals or any of them have ceased
to be so authorized prior to the authentication and delivery of such
Certificate.
Section 3.3 AUTHENTICATION OF CERTIFICATE.
Simultaneously with the assignment and transfer to the Trust of the
Transferred Assets pursuant to the Transfer and Sale Agreement and the delivery
to the Co-Owner Eligible Lender Trustee and the Co-Owner Trustee of the Financed
Student Loans and the other Trust Property, respectively, the Delaware Trustee
shall execute the Certificate and shall cause the Certificate to be
authenticated by the Authentication Agent and delivered to or upon the order of
the Depositor. No Certificate shall entitle its Holder to any benefit under this
Agreement, or shall be valid for any purpose, unless there shall appear on such
Certificate a certificate of authentication, executed by the Authentication
Agent, by manual signature; such authentication shall constitute conclusive
evidence that such Certificate shall have been duly authenticated and delivered
hereunder. The Co-Owner Trustee is hereby initially appointed Authentication
Agent. The Certificate shall be dated the date of its authentication.
Section 3.4 REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATE.
(a) The Certificate Registrar shall maintain, or cause to be
maintained, at the office or agency maintained pursuant to Section 3.8 hereof, a
Certificate Register in which, subject to such reasonable regulations as it may
prescribe, the Co-Owner Trustee shall provide for the registration of the
Certificate and of transfers and exchanges of the Certificate as provided in
this Agreement. The Co-Owner Trustee is hereby initially appointed Certificate
Registrar for the purpose of registering the Certificate and transfers and
exchanges of the Certificate as provided in this Agreement.
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(b) Subject to the provisions of paragraph (c) of Section 2.12 of this
Agreement and paragraph (e) of this Section 3.4, the Depositor, as the
registered Holder of the initial single Certificate, may transfer (but solely to
the extent not otherwise limited or prohibited in the Certificate or this
Agreement), or exchange for other Certificates aggregating Percentage Interests
equal to 100%, the initial Certificate upon surrender of such Certificate to be
transferred or exchanged at the office or agency of the Co-Owner Trustee
maintained pursuant to Section 3.8 hereof. Upon surrender for registration of
transfer of any Certificate at the office or agency of the Co-Owner Trustee
maintained pursuant to Section 3.8 hereof, the Co-Owner Trustee shall cause the
Delaware Trustee to execute, and the Authentication Agent shall authenticate and
deliver in the name of the designated transferee, one or more new Certificates
in an aggregate amount equal to the surrendered Certificate, each dated the date
of authentication.
(c) Every Certificate presented or surrendered for registration of
transfer or exchange shall be accompanied by a written instrument of transfer in
form satisfactory to the Co-Owner Trustee and the Certificate Registrar, duly
executed by the Holder or its attorney duly authorized in writing. Each
Certificate surrendered for registration of transfer or exchange shall be
canceled and subsequently disposed of by the Co-Owner Trustee in accordance with
its customary practice.
(d) No service charge shall be made for any registration of transfer or
exchange of a Certificate, but the Co-Owner Trustee or the Certificate Registrar
(if different from the Co-Owner Trustee) may require payment of a sum sufficient
to cover any tax or governmental charge that may be imposed in connection with
any transfer or exchange of a Certificate.
(e) No Certificate may be acquired by or for the account of (i) an
employee benefit plan (as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA")) that is subject to the
provisions of Title 1 of ERISA, (ii) a plan described in Section 4975(e)(1) of
the Code, or (iii) any entity whose underlying assets include plan assets by
reason of a plan's investment in the entity (each, a "Benefit Plan"). By
accepting and holding a Certificate, the Certificateholder thereof shall be
deemed to have represented and warranted that it is not a Benefit Plan.
Section 3.5 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATE.
If (a) any mutilated Certificate is surrendered to the Certificate
Registrar, or the Certificate Registrar receives evidence to its satisfaction of
the destruction, loss or theft of any Certificate, and (b) there is delivered to
the Delaware Trustee, the Certificate Registrar (if different from the Co-Owner
Trustee) and the Co-Owner Trustee such security or indemnity as may be required
by them to save each of them harmless, then, in the absence of notice to the
Certificate Registrar, the Co-Owner Trustee or the Delaware Trustee that such
Certificate has been acquired by a bona fide purchaser, the Co-Owner Trustee
shall cause the Delaware Trustee to execute, and the Authentication Agent shall
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of like tenor and
amount. In connection with the issuance of any new Certificate under this
Section 3.5, the Co-Owner Trustee 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 expenses (including the fees and expenses of the Co-Owner
Trustee, the Delaware Trustee and the Certificate Registrar) connected
therewith. Any duplicate Certificate issued pursuant to this Section 3.5 shall
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constitute conclusive evidence of beneficial ownership in the Trust, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
Section 3.6 PERSON DEEMED CERTIFICATEHOLDER.
Prior to due presentation of a Certificate for registration of
transfer, the Co-Owner Trustee, the Certificate Registrar (if different from the
Co-Owner Trustee) and any agent of the Co-Owner Trustee or the Certificate
Registrar may treat the Person in whose name any Certificate is registered as
the holder of such Certificate for the purpose of receiving distributions
pursuant to Section 5.2 hereof and for all other purposes whatsoever, and
neither the Delaware Trustee, the Co-Owner Trustee, or the Certificate Registrar
nor any agent of the Delaware Trustee, the Co-Owner Trustee or the Certificate
Registrar shall be affected by any notice to the contrary.
Section 3.7 [RESERVED]
Section 3.8 MAINTENANCE OF OFFICE OR AGENCY.
(a) The Co-Owner Trustee shall maintain in Cincinnati, Ohio an office
or offices or agency or agencies where a Certificate may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Co-Owner Trustee in respect of such Certificate and the Related Documents
may be served. The Co-Owner Trustee initially designates its Corporate Trust
Office for such purposes. The Co-Owner Trustee shall give prompt written notice
to the Delaware Trustee, the Depositor, the Co-Owner Eligible Lender Trustee and
the Certificateholder of any change in the location of the Certificate Register
or any such office or agency.
(b) The Delaware Trustee shall maintain in Wilmington, Delaware an
office or offices from which it shall perform its obligations under this
Agreement and at which all service of process with respect to this Agreement
shall be made. The Delaware Trustee initially designates its Corporate Trust
Office for such purposes. The Delaware Trustee shall give prompt written notice
to the Co-Owner Trustee, the Depositor, the Co-Owner Eligible Lender Trustee and
the Certificateholder of any change in the location of such office or agency.
(c) The Co-Owner Eligible Lender Trustee shall maintain in Cincinnati,
Ohio an office or offices from which it shall perform its obligations under this
Agreement and at which all service of process with respect to this Agreement
shall be made. The Co-Owner Eligible Lender Trustee initially designates its
Corporate Trust Office for such purposes. The Co-Owner Eligible Lender Trustee
shall give prompt written notice to the Delaware Trustee, the Co-Owner Trustee,
the Depositor and the Certificateholder of any change in the location of such
office or agency.
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Section 3.9 APPOINTMENT OF PAYING AGENT.
The Paying Agent shall make distributions to the Certificateholder from
the Certificate Distribution Account pursuant to Section 5.2 hereof and shall
report the amounts of such distributions to the Delaware Trustee and Co-Owner
Trustee (if different from the Paying Agent). Any Paying Agent (if different
from the Co-Owner Trustee) shall have the revocable power to withdraw funds from
the Certificate Distribution Account for the purpose of making the distributions
referred to above. The Co-Owner Trustee (if different from the Paying Agent) may
revoke such power and remove the Paying Agent if the Co-Owner Trustee determines
in its sole discretion that the Paying Agent shall have failed to perform its
obligations under this Agreement in any material respect. The Paying Agent shall
initially be Firstar Bank, National Association, and any co-paying agent chosen
by Firstar Bank, National Association. Firstar Bank, National Association shall
be permitted to resign as Paying Agent upon 30 days' written notice to the
Delaware Trustee. In the event that Firstar Bank, National Association shall no
longer be the Paying Agent, the Co-Owner Trustee with the written consent of the
Delaware Trustee, shall appoint a successor to act as Paying Agent (which shall
be a bank or trust company). The Co-Owner Trustee shall cause such successor
Paying Agent or any additional Paying Agent appointed by the Co-Owner Trustee to
execute and deliver to the Co-Owner Trustee an instrument in which such
successor Paying Agent or additional Paying Agent shall agree with the Co-Owner
Trustee that as Paying Agent, such successor Paying Agent or additional Paying
Agent will hold all sums, if any, held by it for payment to the
Certificateholder in trust for the benefit of the Certificateholder entitled
thereto until such sums shall be paid to such Certificateholder. The Paying
Agent (if different from the Co-Owner Trustee) shall return all unclaimed funds
to the Co-Owner Trustee and upon removal of a Paying Agent such Paying Agent
shall also return all funds in its possession to the Co-Owner Trustee (if
different from the Paying Agent). The provisions of Sections 7.1, 7.3, 7.4 and
8.2 hereof shall apply to the Co-Owner Trustee also in its role as Paying Agent,
for so long as the Co-Owner Trustee shall act as Paying Agent and, to the extent
applicable, to any other paying agent appointed hereunder. Any reference in this
Agreement to the Paying Agent shall include any co-paying agent unless the
context requires otherwise.
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ARTICLE IV
ACTIONS BY Delaware Trustee,
CO-OWNER TRUSTEE AND CO-OWNER ELIGIBLE LENDER TRUSTEE
Section 4.1 RESTRICTION ON POWER OF CERTIFICATEHOLDER.
The Certificateholder shall not have any right to vote or in any manner
otherwise control the operation and management of the Trust except as expressly
provided in this Agreement.
Section 4.2 PRIOR NOTICE TO CERTIFICATEHOLDER WITH RESPECT TO CERTAIN
MATTERS.
Neither the Delaware Trustee, the Co-Owner Trustee nor the Co-Owner
Eligible Lender Trustee shall take any of the following actions, unless at least
30 days before the taking of such action, the Delaware Trustee, the Co-Owner
Trustee or the Co-Owner Eligible Lender Trustee, as the case may be, shall have
notified the other Trustees and the Certificateholder in writing of the proposed
action and the Certificateholder shall not have notified the Delaware Trustee or
the Co-Owner Trustee, as the case may be, in writing prior to the 30th day after
such notice is given that such Certificateholder has withheld consent or
provided alternative direction:
(a) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder is required unless such
amendment would not materially adversely affect the interests of the
Certificateholder, the Delaware Trustee, the Co-Owner Trustee or the Co-Owner
Eligible Lender Trustee; or
(b) the amendment, change or modification of the Administration
Agreement, unless such amendment would not materially adversely affect the
interests of the Certificateholder, the Delaware Trustee, the Co-Owner Trustee
or the Co-Owner Eligible Lender Trustee.
Section 4.3 ACTION BY CERTIFICATEHOLDER WITH RESPECT TO BANKRUPTCY.
Neither the Delaware Trustee, the Co-Owner Trustee nor the Co-Owner
Eligible Lender Trustee shall have the power to commence a voluntary proceeding
in bankruptcy relating to the Trust, if otherwise permitted by applicable law,
without the prior approval of the Certificateholder and the delivery to the
Delaware Trustee and the Co-Owner Trustee by such Certificateholder of a
certificate certifying that such Certificateholder reasonably believes that the
Trust is insolvent.
Section 4.4 RESTRICTIONS ON CERTIFICATEHOLDER'S POWER.
The Certificateholder shall not have any right by virtue or by availing
itself of any provisions of this Agreement to institute any suit, action, or
proceeding in equity or at law upon or under or with respect to this Agreement
or any Related Document, unless the Certificateholder previously shall have
given to the Delaware Trustee and the Co-Owner Trustee a written notice of
default and of the continuance thereof, as provided in this Agreement and unless
also the Certificateholder shall have made written request upon the Delaware
Trustee and the Co-Owner Trustee to institute such action, suit or proceeding in
its own respective names as Delaware
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Trustee and Co-Owner Trustee under this Agreement and shall have offered to the
Delaware Trustee and Co-Owner Trustee such reasonable indemnity as each may
require against the costs, expenses and liabilities to be incurred therein or
thereby, and the Delaware Trustee and Co-Owner Trustee, for 30 days after their
receipt of such notice, request, and offer of indemnity, shall have neglected or
refused to institute any such action, suit, or proceeding and during such 30-day
period, no request or waiver inconsistent with such written request has been
given to the Delaware Trustee and Co-Owner Trustee pursuant to and in compliance
with this Section or Section 6.3 hereof.
Section 4.5 RIGHTS OF CERTIFICATEHOLDER.
Notwithstanding anything to the contrary in the Related Documents,
without the prior written consent of the Certificateholder, neither the Delaware
Trustee, the Co-Owner Trustee nor the Co-Owner Eligible Lender Trustee shall (i)
remove the Administrator, (ii) initiate any claim, suit or proceeding under this
Agreement or compromise any claim, suit or proceeding brought pursuant to this
Agreement or (iii) authorize the merger, conversion or consolidation of the
Trust with or into any business trust or other entity (other than in accordance
with the Indenture).
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ARTICLE V
APPLICATION OF TRUST FUNDS; CERTAIN DUTIES
Section 5.1 CERTIFICATE CONTRIBUTION ACCOUNT; CERTIFICATE DISTRIBUTION
ACCOUNT.
(a) The Co-Owner Trustee, for the benefit of the Certificateholder,
shall establish and maintain the Certificate Contribution Account, in the name
of the Co-Owner Trustee for the benefit of the Certificateholder. The
Certificate Contribution Account shall be a segregated trust account hereunder
established by the Co-Owner Trustee and maintained at the Corporate Trust Office
of the Co-Owner Trustee. The Co-Owner Trustee shall deposit in the Certificate
Contribution Account all amounts received from the Depositor pursuant to Section
2.5 hereof.
(b) The Co-Owner Trustee, for the benefit of the Certificateholder,
shall establish and maintain the Certificate Distribution Account in the name of
the Trust for the benefit of the Certificateholder. The Certificate Distribution
Account shall be a segregated trust account hereunder established and maintained
by and with the Co-Owner Trustee at its Corporate Trust Office. The Co-Owner
Trustee shall deposit in the Certificate Distribution Account all amounts
received from the Indenture Trustee as and when received.
(c) The Co-Owner Trustee shall possess all right, title and interest in
all funds on deposit from time to time in the Certificate Contribution Account
and the Certificate Distribution Account and in all proceeds of each.
(d) All amounts held in the Certificate Distribution Account shall, to
the extent permitted by applicable laws, rules and regulations, be invested by
the Co-Owner Trustee in Eligible Investments that mature not later than one
Business Day prior to the Certificateholder's Distribution Date to which such
amounts relate. Investments in Eligible Investments shall be made in the name of
the Co-Owner Trustee, and such investments shall not be sold or disposed of
prior to their maturity. Any investment of funds in the Certificate Distribution
Account shall be made in Eligible Investments held by a financial institution
with respect to which (a) such institution has noted the Co-Owner Trustee's
interest therein by book entry or otherwise and (b) a confirmation of the
Co-Owner Trustee's interest has been sent to the Co-Owner Trustee by such
institution, provided that such Eligible Investments are (i) specific
certificated securities, and (ii) either (A) in the possession of such
institution or (B) in the possession of a clearing corporation in New York,
registered in the name of such clearing corporation, not endorsed for collection
or surrender or any other purpose not involving transfer, not containing any
evidence of a right or interest inconsistent with the Co-Owner Trustee's
interest therein, and held by such clearing corporation in an account of such
institution. Subject to the other provisions hereof, the Co-Owner Trustee shall
have sole control over each such investment and the income thereon, and any
certificate or other instrument evidencing any such investment, if any, shall be
delivered directly to the Co-Owner Trustee or its agent, together with each
document of transfer, if any, necessary to transfer title to such investment to
the Co-Owner Trustee in a manner which complies with this Section 5.1. All
interest, gains upon sale and other income from, or earnings on investment of
funds in the Certificate Distribution Account shall be distributed on the next
Certificateholder's Distribution Date pursuant to Section 5.2 hereof.
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Section 5.2 APPLICATION OF FUNDS IN CERTIFICATE DISTRIBUTION ACCOUNT
AND CERTIFICATE CONTRIBUTION ACCOUNT.
(a) On each Certificateholder's Distribution Date, the Co-Owner Trustee
shall distribute to the Certificateholder the Certificateholder's pro rata
amount of the aggregate undistributed amounts deposited in the Certificate
Distribution Account pursuant to Section 5.1 hereof.
(b) On each Certificateholder's Distribution Date, the Co-Owner Trustee
shall send to the Certificateholder any statement received from the Indenture
Trustee pursuant to the Indenture.
(c) In the event that any withholding tax is imposed on the Co-Owner
Trustee's distribution (or allocations of income) to the Certificateholder, such
tax shall reduce the amount otherwise distributable to such Certificateholder in
accordance with this Section. The Co-Owner Trustee is hereby authorized and
directed to retain from amounts otherwise distributable to such
Certificateholder sufficient funds for the payment of any tax that is legally
owed on account of the Trust (but such authorization shall not prevent the
Co-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). The amount of any withholding tax imposed with respect to
such Certificateholder shall be treated as cash distributed to such
Certificateholder at the time it is withheld by the Trust and remitted to the
appropriate taxing authority. If there is a possibility that withholding tax is
payable with respect to a distribution (such as a distribution to a non-U.S.
Certificateholder), the Co-Owner Trustee may, in its sole discretion, withhold
such amounts in accordance with this paragraph (c). In the event that such
Certificateholder wishes to apply for a refund of any such withholding tax, the
Co-Owner Trustee shall reasonably cooperate with such Certificateholder in
making such claim so long as such Certificateholder agrees to reimburse the
Co-Owner Trustee for any out-of-pocket expenses incurred.
(d) On any Business Day on which there are due and payable
organizational, start-up and transactional expenses pursuant to this Agreement,
the Co-Owner Trustee shall, to the extent of available amounts in the
Certificate Contribution Account, pay such expenses from the Certificate
Contribution Account; provided, however, that if an insufficiency in the
Certificate Contribution Account exists or would exist upon payment of such
expenses, the Co-Owner Trustee shall notify the Depositor in writing of such
insufficiency and the Depositor shall immediately pay to the Co-Owner Trustee an
amount at least equal to such insufficiency. To the extent that there are
amounts on deposit in the Certificate Distribution Account pending distribution
on any such Business Day, the Co-Owner Trustee, with the consent of the
Certificateholder, may transfer a portion or all of such amounts from the
Certificate Distribution Account to the Certificate Contribution Account and
such amounts shall be applied to the payment of the expenses payable from
amounts in the Certificate Contribution Account.
Section 5.3 METHOD OF PAYMENT.
Subject to Section 9.1(c) hereof, distributions required to be made to
the Certificateholder on any Certificateholder's Distribution Date shall be made
to such Certificateholder of record on the preceding Record Date either by wire
transfer, in immediately available funds, to the account of such Holder at a
bank or other entity having appropriate facilities therefor, if such
Certificateholder shall have provided to the Certificate Registrar appropriate
written instructions
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at least five Business Days prior to such Distribution Date and the amount of
such distribution is not less than $50,000 or, if not, by check mailed to such
Certificateholder at the address of such Holder appearing in the Certificate
Register.
Section 5.4 NO SEGREGATION OF MONEYS; NO INTEREST.
Subject to Sections 5.1 and 5.2, moneys received by the Co-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 Co-Owner Trustee shall not be liable for any interest
thereon.
Section 5.5 ACCOUNTING; REPORTS; TAX RETURNS.
(a) The Administrator has agreed pursuant to the Administration
Agreement that the Administrator shall (i) maintain (or cause to be maintained)
the books of the Trust on a fiscal year basis on the accrual method of
accounting (such fiscal year initially being the fiscal year of the Depositor),
(ii) deliver to the Certificateholder, as may be required by the Code and
applicable Treasury Regulations, such information as may be required to enable
such Certificateholder to prepare its Federal and state income tax returns,
(iii) file or cause to be filed such tax returns, if any, relating to the Trust,
and direct the Co-Owner Trustee to make such elections as may from time to time
be required or appropriate under any applicable state or Federal statute or rule
or regulation thereunder so as to maintain the Trust's characterization as a
"disregarded entity" (or, if applicable, a partnership for Federal income tax
purposes), (iv) collect or cause to be collected any withholding tax as
described in and in accordance with Section 5.2(c) with respect to income or
distributions to the Certificateholder and (v) file or cause to be filed all
documents required to be filed by the Co-Owner Trustee with the Commission and
otherwise take or cause to be taken all such actions as are required for the
Trust's compliance with all applicable provisions of state and federal
securities laws.
(b) The Co-Owner Trustee shall make all elections pursuant to this
Section 5.5 as directed in writing by the Certificateholder.
(c) The Co-Owner Trustee shall sign any tax returns relating to the
Trust, unless applicable law requires the Certificateholder to sign such
documents, in which case such documents shall be signed by the Certificateholder
qualified to sign such return, or such Certificateholder's law agent or
attorney-in-fact. In signing any such tax return, the Co-Owner Trustee shall
rely entirely upon, and shall have no liability for, information or calculations
provided by the Administrator.
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ARTICLE VI
AUTHORITY AND DUTIES OF DELAWARE TRUSTEE,
CO-OWNER TRUSTEE AND CO-OWNER ELIGIBLE LENDER TRUSTEE
Section 6.1 GENERAL AUTHORITY.
The Co-Owner Trustee is authorized and directed to execute, not in its
individual capacity but solely as trustee of the Trust, and deliver, and the
Co-Owner Trustee authorizes and directs the Co-Owner Eligible Lender Trustee to
execute, not in its individual capacity but solely as eligible lender trustee
for the benefit of the Co-Owner Trustee, and deliver, the Related Documents to
which it is to be a party and each certificate or other document attached as an
exhibit to, or contemplated by, the Related Documents to which the Trust is to
be a party and any amendment thereto. In addition to the foregoing, the Co-Owner
Trustee is authorized, but shall not be obligated, to take all actions required
of the Trust pursuant to the Related Documents. The Co-Owner Trustee is further
authorized hereunder to enter into the Administration Agreement, to appoint,
with the prior written consent of the Depositor, a successor Administrator and
to take from time to time such action as the Administrator recommends with
respect to the Related Documents so long as such actions are consistent with the
terms of the Related Documents.
Section 6.2 GENERAL DUTIES.
It shall be the duty of the Co-Owner Trustee (and not the Delaware
Trustee) to discharge (or cause to be discharged through the Administrator or
such agents as shall be appointed by the Administrator) all of its
responsibilities pursuant to the terms of this Agreement and the Related
Documents and to administer the Trust in the interest of the Certificateholder,
subject to the Related Documents and in accordance with the provisions of this
Agreement. Notwithstanding the foregoing, the Co-Owner Trustee shall be deemed
to have discharged its duties and responsibilities hereunder and under the
Related Documents to the extent the Administrator has agreed in the
Administration Agreement, or the Co-Owner Eligible Lender Trustee has agreed in
the Co-Owner Eligible Lender Trust Agreement, to perform any act or to discharge
any duty of the Co-Owner Trustee hereunder or under any Related Document, and
the Co-Owner Trustee shall not be liable for the default or failure of the
Administrator or the Co-Owner Eligible Lender Trustee, as the case may be, to
carry out its obligations under the Administration Agreement or Co-Owner
Eligible Lender Trust Agreement, respectively.
Section 6.3 ACTION UPON INSTRUCTION.
(a) Subject to Article IV of this Agreement, the Administrator (the
"Instructing Party") shall have the exclusive right to direct the actions of the
Co-Owner Trustee in the management of the Trust, so long as such instructions
are not inconsistent with the express terms set forth herein or in any Related
Document. The Instructing Party shall not instruct the Co-Owner Trustee in a
manner inconsistent with this Agreement or the Related Documents.
(b) Neither the Delaware Trustee, the Co-Owner Trustee nor the Co-Owner
Eligible Lender Trustee shall be required to take any action hereunder or under
any Related Document if
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they, or any one of them, shall have reasonably determined, or shall have been
advised by counsel, that such action is contrary to the terms hereof or of any
Related Document or is otherwise contrary to law.
(c) Whenever the Delaware Trustee, the Co-Owner Trustee or the Co-Owner
Eligible Lender Trustee is unable to decide between alternative courses of
action permitted or required by the terms of this Agreement or any Related
Document, the Delaware Trustee, the Co-Owner Trustee or the Co-Owner Eligible
Lender Trustee, as the case may be, shall promptly give notice (in such form as
shall be appropriate under the circumstances) to the Instructing Party
requesting instruction as to the course of action to be adopted, and to the
extent the Delaware Trustee, the Co-Owner Trustee or the Co-Owner Eligible
Lender acts in good faith in accordance with any written instruction received
from the Instructing Party, neither the Delaware Trustee, the Co-Owner Trustee
nor the Co-Owner Eligible Lender Trustee, as the case may be, shall be liable on
account of such action to any Person. If the Delaware Trustee, the Co-Owner
Trustee or the Co-Owner Eligible Lender Trustee shall not have received
appropriate instruction within ten days of such notice (or within such shorter
period of time as reasonably may be specified in such notice or may be necessary
under the circumstances), it may, but shall be under no duty to, take or refrain
from taking such action, not inconsistent with this Agreement or the Related
Documents, as it shall deem to be in the best interests of the
Certificateholder, and shall have no liability to any Person for such action or
inaction.
(d) In the event that the Delaware Trustee, the Co-Owner Trustee or the
Co-Owner Eligible Lender Trustee is unsure as to the application of any
provision of this Agreement or any Related Document or any 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 permits any
determination by the Delaware Trustee, the Co-Owner Trustee or the Co-Owner
Eligible Lender Trustee or is silent or is incomplete as to the course of action
that the Delaware Trustee, the Co-Owner Trustee or the Co-Owner Eligible Lender
Trustee is required to take with respect to a particular set of facts, the
Delaware Trustee, the Co-Owner Trustee, or the Co-Owner Eligible Lender Trustee
may give notice (in such form as shall be appropriate under the circumstances)
to the Instructing Party requesting instruction and, to the extent that the
Delaware Trustee, the Co-Owner Trustee and/or the Co-Owner Eligible Lender
Trustee acts or refrains from acting in good faith in accordance with any such
instruction received, neither the Delaware Trustee, the Co-Owner Trustee nor the
Co-Owner Eligible Lender Trustee shall be liable on account of such action or
inaction to any Person. If the Delaware Trustee, the Co-Owner Trustee or the
Co-Owner Eligible Lender Trustee shall not have received appropriate instruction
within 10 days of such notice (or within such shorter period of time as
reasonably may be specified in such notice or may be necessary under the
circumstances) it may, but shall be under no duty to, take or refrain from
taking such action, not inconsistent with this Agreement or the Related
Documents, as it shall deem to be in the best interests of the
Certificateholder, and shall have no liability to any Person for such action or
inaction.
Section 6.4 NO DUTIES EXCEPT AS SPECIFIED IN THIS AGREEMENT OR IN
INSTRUCTIONS.
Neither the Delaware Trustee, the Co-Owner Trustee nor the Co-Owner
Eligible Lender Trustee shall have any duty or obligation to manage, make any
payment with respect to, 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 any one
of them is a party, except as expressly provided by the terms of this Agreement
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(including as provided in Section 6.2 hereof), in any Related Document or in any
written instruction received by the Co-Owner Trustee or Co-Owner Eligible Lender
Trustee pursuant to Section 6.3 hereof; and no implied duties or obligations
shall be read into this Agreement or any Related Document against the Delaware
Trustee, the Co-Owner Trustee or the Co-Owner Eligible Lender Trustee. Neither
the Delaware Trustee, the Co-Owner Trustee nor the Co-Owner Eligible Lender
Trustee shall have any responsibility for preparing, monitoring or filing any
financing or continuation statements in any public office at any time or
otherwise to perfect or maintain the perfection of any security interest or lien
granted to it hereunder or to record this Agreement or any Related Document;
provided, however, the Co-Owner Trustee and the Co-Owner Eligible Lender Trustee
shall, from time to time, execute and deliver such financing or continuation
statements as are prepared by the Administrator or the Indenture Trustee and are
delivered to the Co-Owner Trustee or the Co-Owner Eligible Lender Trustee for
execution for the purpose of perfecting or maintaining the perfection of such a
security interest or lien or effecting such a recording. Each of the Delaware
Trustee, the Co-Owner Trustee and the Co-Owner Eligible Lender Trustee,
nevertheless, agrees that it will, at its own cost and expense (and not at the
expense of the Trust), promptly take all action as may be necessary to discharge
any liens on any part of the Trust Property that are attributable to claims
against the Delaware Trustee, the Co-Owner Trustee or the Co-Owner Eligible
Lender Trustee in its individual capacity, respectively, that are not related to
the ownership or the administration of the Trust Property.
Section 6.5 NO ACTION EXCEPT UNDER SPECIFIED DOCUMENTS OR INSTRUCTIONS.
Neither the Delaware Trustee, the Co-Owner Trustee nor the Co-Owner
Eligible Lender Trustee shall manage, control, use, sell, dispose of or
otherwise deal with any part of, the Trust Property except (i) in accordance
with the powers granted to and the authority conferred upon the Delaware
Trustee, the Co-Owner Trustee or the Co-Owner Eligible Lender Trustee,
respectively, pursuant to this Agreement, or, in the case of he Co-Owner
Eligible Lender Trustee, the Co-Owner Eligible Lender Trust Agreement, (ii) in
accordance with the Related Documents and (iii) in accordance with any document
or instruction delivered to the Delaware Trustee, the Co-Owner Trustee or the
Co-Owner Eligible Lender Trustee, respectively, pursuant to Section 6.3 or
Section 6.4 hereof.
Section 6.6 RESTRICTIONS.
Neither the Delaware Trustee, the Co-Owner Trustee nor the Co-Owner
Eligible Lender Trustee shall take any action (i) that is inconsistent with the
purposes of the Trust set forth in Section 2.3 hereof or (ii) that, to the
actual knowledge of the Delaware Trustee, the Co-Owner Trustee or the Co-Owner
Eligible Lender Trustee would result in the Trust's becoming taxable as a
corporation for Federal income tax purposes. The Certificateholder shall not
direct the Delaware Trustee, the Co-Owner Trustee or the Co-Owner Eligible
Lender Trustee to take action that would violate the provisions of this Section.
Section 6.7 ADMINISTRATION AGREEMENT.
(a) The Administrator is authorized to execute on behalf of Co-Owner
Trustee as trustee of the Trust all documents, reports, filings, instruments,
certificates and opinions as it shall be the duty of the Co-Owner Trustee to
prepare, file or deliver pursuant to the Related Documents. Upon written
request, the Co-Owner Trustee shall execute and deliver to the
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Administrator a power of attorney appointing the Administrator its agent and
attorney-in-fact to execute all such documents, reports, filings, instruments,
certificates and opinions.
(b) If the Administrator shall resign or be removed pursuant to the
terms of the Administration Agreement, the Co-Owner Trustee may, and is hereby
authorized and empowered to, subject to obtaining the prior written consent of
the Depositor, appoint or consent to the appointment of a successor
Administrator pursuant to the Administration Agreement.
(c) If the Administration Agreement is terminated, the Co-Owner Trustee
may, and is hereby authorized and empowered to, subject to obtaining the prior
written consent of the Depositor, appoint or consent to the appointment of a
Person to perform substantially the same duties as are assigned to the
Administrator in the Administration Agreement pursuant to an agreement
containing substantially the same provisions as are contained in the
Administration Agreement.
(d) The Co-Owner Trustee shall promptly notify the Certificateholder of
any default by or misconduct of the Administrator under the Administration
Agreement of which the Co-Owner Trustee has received written notice or of which
a Responsible Officer has actual knowledge.
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ARTICLE VII
CONCERNING THE DELAWARE TRUSTEE
AND THE CO-OWNER TRUSTEE
Section 7.1 ACCEPTANCE OF DELAWARE TRUSTEE AND CO-OWNER TRUSTEE;
DUTIES.
Each of the Delaware Trustee and the Co-Owner Trustee accepts the
trusts hereby created and agrees to perform its respective duties hereunder with
respect to such trusts but only upon the terms of this Agreement. The Co-Owner
Trustee also agrees to disburse all moneys actually received by it constituting
part of the Trust Property upon the terms of the Related Documents and this
Agreement. Neither the Delaware Trustee nor the Co-Owner Trustee shall be
answerable or accountable hereunder or under any Related Document under any
circumstances, except that the Delaware Trustee or the Co-Owner Trustee, as
applicable, shall be answerable or accountable hereunder (i) for its own willful
misconduct or negligence, (ii) in the case of the inaccuracy of any
representation or warranty given by it contained in Section 7.3 hereof, (iii)
for liabilities arising from its failure to perform obligations expressly
undertaken by it in the last sentence of Section 6.4 hereof, (iv) for any
investments issued by it or any branch or affiliate thereof in its commercial
capacity and (v) for taxes, fees or other charges on, based on or measured by,
any fees, commissions or compensation received by it in connection with any of
the transactions contemplated by this Agreement or any Related Document. In
particular, but not by way of limitation (and subject to the exceptions set
forth in the preceding sentence):
(a) neither the Delaware Trustee nor the Co-Owner Trustee shall be
liable for any error of judgment made in good faith by an authorized officer of
the Delaware Trustee or the Co-Owner Trustee, respectively;
(b) neither the Delaware Trustee nor the Co-Owner Trustee shall be
liable with respect to any action taken or omitted to be taken by either in good
faith in accordance with the instructions of the Instructing Party;
(c) no provision of this Agreement or any Related Document shall
require the Delaware Trustee, the Co-Owner Trustee and/or the Co-Owner Eligible
Lender Trustee to expend or risk funds or otherwise incur any financial
liability in the performance of its rights or powers hereunder or under any
Related Document if they 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 them;
(d) under no circumstances shall the Delaware Trustee, the Co-Owner
Trustee or the Co-Owner Eligible Lender Trustee be liable for indebtedness
evidenced by or arising under this Agreement or any of the Related Documents,
including the principal of and interest and any Carryover Interest on the Notes;
(e) neither the Delaware Trustee, the Co-Owner Trustee nor the Co-Owner
Eligible Lender Trustee shall be responsible for or in respect of the validity
or sufficiency of this Agreement or for the due execution hereof by the
Depositor or each other hereunder or for the form, character, genuineness,
sufficiency, value or validity of any of the Trust Property or for or in respect
of the validity or sufficiency of the Related Documents, other than (i) with
respect to
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the Delaware Trustee, the execution by the Delaware Trustee of each Certificate
and (ii) with respect to the Co-Owner Trustee, the certificate of authentication
on a Certificate, and neither the Delaware Trustee, the Co-Owner Trustee nor the
Co-Owner Eligible Lender Trustee shall in any event assume or incur any
liability, duty, or obligation to each other, the Administrator, the Indenture
Trustee, any Noteholder or to any Certificateholder, other than as expressly
provided for herein and in the Related Documents;
(f) neither the Delaware Trustee, the Co-Owner Trustee nor the Co-Owner
Eligible Lender Trustee shall be liable for the default or misconduct of each
other, the Administrator, the Indenture Trustee or the Depositor under any of
the Related Documents or otherwise and neither the Delaware Trustee, the
Co-Owner Trustee nor the Co-Owner Eligible Lender Trustee shall have any
obligation or liability to perform the obligations under this Agreement or the
Related Documents that are required to be performed by the Administrator under
the Administration Agreement, by the Indenture Trustee under the Indenture or by
the Master Servicer under the Master Servicing Agreement; and
(g) neither the Delaware Trustee, the Co-Owner Trustee nor the Co-Owner
Eligible Lender Trustee shall be under any obligation to exercise any of the
rights or powers vested in it by this Agreement, or to institute, conduct or
defend any litigation under this Agreement or otherwise or in relation to this
Agreement or any Related Document, at the request, order or direction of the
Instructing Party, unless such Instructing Party has offered to it security or
indemnity satisfactory to it against the costs, expenses and liabilities that
may be incurred by it therein or thereby. The right of the Delaware Trustee, the
Co-Owner Trustee or the Co-Owner Eligible Lender Trustee to perform any
discretionary act enumerated in this Agreement or in any Related Document shall
not be construed as a duty, and neither the Delaware Trustee, the Co-Owner
Trustee nor the Co-Owner Eligible Lender Trustee shall be answerable for other
than its own negligence or willful misconduct in the performance of any such
act.
Section 7.2 FURNISHING OF DOCUMENTS.
The Co-Owner Trustee shall furnish to the Certificateholder promptly
upon receipt of a written request therefor, duplicates or copies of all reports,
notices, requests, demands, certificates, financial statements and any other
instruments furnished to it under the Related Documents unless such
Certificateholder has previously received such items.
Section 7.3 REPRESENTATIONS AND WARRANTIES.
(a) The Delaware Trustee hereby represents and warrants to the
Depositor and the Certificateholder that:
(i) It is a national banking association duly organized and
validly existing in good standing under the laws of the United States
of America. It has all requisite corporate power and authority and all
franchises, grants, authorizations, consents, orders and approvals from
all governmental authorities necessary to execute, deliver and perform
its obligations under this Agreement and each Related Document to which
it, not in its individual capacity but solely as trustee of the Trust,
is a party.
(ii) It has taken all corporate action necessary to authorize
the execution and delivery by it, not in its individual capacity but
solely as trustee of the Trust, of this Agreement and the Certificate,
and this Agreement has been executed and delivered by
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one of its officers who is duly authorized to execute and deliver this
Agreement on its behalf.
(iii) Neither the execution nor the delivery by it of this
Agreement, nor the consummation by it of the transactions contemplated
hereby nor compliance by it with any of the terms or provisions hereof
will contravene any federal or Delaware law, governmental rule or
regulation governing the banking or trust powers of the Delaware
Trustee or any judgment or order binding on it, or constitute any
default under its charter documents or by-laws or any indenture,
mortgage, contract, agreement or instrument to which it is a party or
by which any of its properties may be bound or result in the creation
or imposition of any lien, charge or encumbrance on the Trust Property
resulting from actions by or claims against the Delaware Trustee
individually which are unrelated to this Agreement or the Related
Documents.
(b) The Co-Owner Trustee hereby represents and warrants to the
Depositor and the Certificateholder that:
(i) It is a national banking association duly organized and
validly existing in good standing under the laws of the United States
of America. It has all requisite corporate power and authority and all
franchises, grants, authorizations, consents, orders and approvals from
all governmental authorities necessary to execute, deliver and perform
its obligations under this Agreement and each Related Document to which
it, not in its individual capacity but solely as trustee of the Trust,
is a party.
(ii) It has taken all corporate action necessary to authorize
the execution and delivery by it of this Agreement and each Related
Document to which it, not in its individual capacity but solely as
trustee of the Trust, is a party, and this Agreement and each Related
Document will be executed and delivered by one of its officers who is
duly authorized to execute and deliver this Agreement and each Related
Document on its behalf.
(iii) Neither the execution nor the delivery by it of this
Agreement, nor the consummation by it of the transactions contemplated
hereby nor compliance by it with any of the terms or provisions hereof
will contravene any federal or Ohio law, governmental rule or
regulation governing the banking or trust powers of the Co-Owner
Trustee or any judgment or order binding on it, or constitute any
default under its charter documents or by-laws or any indenture,
mortgage, contract, agreement or instrument to which it is a party or
by which any of its properties may be bound or result in the creation
or imposition of any lien, charge or encumbrance on the Trust Property
resulting from actions by or claims against the Co-Owner Trustee
individually which are unrelated to this Agreement or the Related
Documents.
(c) The Co-Owner Eligible Lender Trustee hereby represents and warrants
to the Depositor, the Co-Owner Trustee and the Certificateholder that:
(i) It is a national banking association duly organized and
validly existing in good standing under the laws of the United States
of America. It has all requisite corporate power and authority and all
franchises, grants, authorizations, consents, orders and approvals from
all governmental authorities necessary to execute, deliver and
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perform its obligations under this Agreement and each Related Document
to which it, not in its individual capacity but solely as eligible
lender trustee for the benefit of the Co-Owner Trustee, is a party.
(ii) It has taken all corporate action necessary to authorize
the execution and delivery by it of this Agreement and each Related
Document to which it, not in its individual capacity but solely as
trustee of the Trust, is a party, and this Agreement and each Related
Document will be executed and delivered by one of its officers who is
duly authorized to execute and deliver this Agreement and each Related
Document on its behalf.
(iii) Neither the execution nor the delivery by it of this
Agreement, nor the consummation by it of the transactions contemplated
hereby nor compliance by it with any of the terms or provisions hereof
will contravene any federal or Ohio law, governmental rule or
regulation governing the banking or trust powers of the Co-Owner
Eligible Lender Trustee or any judgment or order binding on it, or
constitute any default under its charter documents or by-laws or any
indenture, mortgage, contract, agreement or instrument to which it is a
party or by which any of its properties may be bound or result in the
creation or imposition of any lien, charge or encumbrance on the Trust
Property resulting from actions by or claims against the Co-Owner
Eligible Lender Trustee individually which are unrelated to this
Agreement or the Related Documents.
(iv) It is and will use its best efforts to remain an
"eligible lender" under the Higher Education Act.
Section 7.4 RELIANCE; ADVICE OF COUNSEL.
(a) Neither the Delaware Trustee, the Co-Owner Trustee nor the Co-Owner
Eligible Lender Trustee shall incur any 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 Delaware
Trustee, the Co-Owner Trustee and the Co-Owner Eligible Lender 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 method of the determination of which is
not specifically prescribed herein, the Delaware Trustee, the Co-Owner Trustee
and the Co-Owner Eligible Lender Trustee may for all purposes hereof rely on a
certificate, signed by the president or any vice president or by the treasurer
or other authorized officers of the relevant party, as to such fact or matter,
and such certificate shall constitute full protection to the Delaware Trustee,
the Co-Owner Trustee and Co-Owner Eligible Lender Trustee, respectively, 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 the
performance of its respective duties and obligations under this Agreement or the
Related Documents, each of the Delaware Trustee, the Co-Owner Trustee and the
Co-Owner Eligible Lender Trustee (i) may act directly or through its agents or
attorneys pursuant to agreements entered into with it, and neither the Delaware
Trustee, the Co-Owner Trustee nor the Co-Owner Eligible Lender Trustee shall be
liable for the conduct or misconduct of such agents or attorneys if such agents
or attorneys shall
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have been selected by it with reasonable care, and (ii) may consult with
counsel, accountants and other skilled persons to be selected with reasonable
care and employed by it. Neither the Delaware Trustee, the Co-Owner Trustee nor
the Co-Owner Eligible Lender Trustee shall be liable for anything done, suffered
or omitted in good faith by it in accordance with the written opinion or advice
of any such counsel, accountants or other such persons and not contrary to this
Agreement or any Related Document.
Section 7.5 NOT ACTING IN INDIVIDUAL CAPACITY.
(a) Except as provided in this Article VII, in accepting the trusts
hereby created First Union Trust Company, National Association acts solely as
Delaware Trustee hereunder and not in its individual capacity and all Persons
having any claim against the Delaware Trustee by reason of the transactions
contemplated by this Agreement or any Related Document shall look only to the
Trust Property for payment or satisfaction thereof.
(b) Except as provided in this Article VII, in accepting the trusts
hereby created Firstar Bank, National Association acts solely as Co-Owner
Trustee hereunder and not in its individual capacity and all Persons having any
claim against the Co-Owner Trustee by reason of the transactions contemplated by
this Agreement or any Related Document shall look only to the Trust Property for
payment or satisfaction thereof.
(c) Except as provided in this Article VII, all Persons having any
claim against the Co-Owner Eligible Lender Trustee by reason of the transactions
contemplated by this Agreement or any Related Document shall look only to the
Trust Property for payment or satisfaction thereof.
Section 7.6 DELAWARE TRUSTEE NOT LIABLE FOR CERTIFICATE, NOTES OR
FINANCED STUDENT LOANS.
The recitals contained herein and in each Certificate (other than the
signature of the Delaware Trustee and the signature of the Co-Owner Trustee, as
Authentication Agent, on each Certificate) shall be taken as the statements of
the Depositor, and neither the Delaware Trustee, the Co-Owner Trustee nor the
Co-Owner Eligible Lender Trustee assumes any responsibility for the correctness
thereof. Neither the Delaware Trustee, the Co-Owner Trustee nor the Co-Owner
Eligible Lender Trustee makes any representations as to the validity or
sufficiency of this Agreement, of any Related Document or of the Certificate
(other than representations of the Delaware Trustee regarding the signature of
the Delaware Trustee on the Certificate and representations of the Co-Owner
Trustee, as Authentication Agent, regarding its signature on the certificate of
authentication on the Certificate) or the Notes, or of any Financed Student Loan
or related documents. Neither the Delaware Trustee, the Co-Owner Trustee nor the
Co-Owner Eligible Lender Trustee shall at any time have any responsibility or
liability for or with respect to the legality, validity and enforceability of
any Financed Student Loan, or the perfection and priority of any security
interest created under the Indenture in any Financed Student Loan or the
maintenance of any such perfection and priority of any such security interest or
the maintenance of any such perfection and priority, or for or with respect to
the sufficiency of the Trust Property or its ability to generate the payments to
be distributed to the Certificateholder under this Agreement or the Noteholders
under the Indenture, including, without limitation: the existence, status and
ownership of any Financed Student Loan; the existence and enforceability of any
insurance or guarantee thereon; the existence and status of any Financed Student
Loan on any
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computer or other record thereof; the validity of the sale or assignment of any
Financed Student Loan to the Co-Owner Eligible Lender Trustee or of any
intervening sale or assignment; the validity or sufficiency of any Guarantee;
the completeness of any Financed Student Loan; the performance or enforcement of
any Financed Student Loan; the compliance by the Administrator or the Master
Servicer with any warranty or representation made under any Related Document or
in any other related document or the accuracy of any such warranty or
representation or any action of the Indenture Trustee, the Administrator or the
Master Servicer taken in the name of the Delaware Trustee, the Co-Owner Trustee
or the Co-Owner Eligible Lender Trustee.
Section 7.7 DELAWARE TRUSTEE, CO-OWNER TRUSTEE AND CO-OWNER ELIGIBLE
LENDER TRUSTEE MAY OWN CERTIFICATE AND NOTES.
The Delaware Trustee in its individual or any other capacity, the
Co-Owner Trustee in its individual or any other capacity, and the Co-Owner
Eligible Lender Trustee in its individual or any other capacity, or any one of
them, may become the owner or pledgee of a Certificate or Notes and may deal
with the Depositor, the Indenture Trustee, any Guarantee Agency and the Master
Servicer in banking or other transactions with the same rights as it would have
if it were not Delaware Trustee, Co-Owner Trustee or Co-Owner Eligible Lender
Trustee, respectively.
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ARTICLE VIII
COMPENSATION OF DELAWARE TRUSTEE,
THE CO-OWNER TRUSTEE AND CO-OWNER ELIGIBLE LENDER TRUSTEE
Section 8.1 FEES AND EXPENSES OF DELAWARE TRUSTEE, CO-OWNER TRUSTEE AND
CO-OWNER ELIGIBLE LENDER TRUSTEE.
(a) The Delaware Trustee shall receive as compensation for its services
hereunder such fees as have been separately agreed upon before the date hereof
between the Depositor and the Delaware Trustee, and the Delaware Trustee shall
be entitled to be reimbursed by the Depositor for its other reasonable expenses
hereunder, including the reasonable compensation, expenses and disbursements of
such agents, representatives, experts and counsel as the Delaware Trustee may
reasonably determine are necessary to employ in connection with the exercise and
performance of its rights and its duties hereunder.
(b) The Co-Owner Trustee shall receive as compensation for its services
hereunder such fees as have been separately agreed upon before the date hereof
between the Depositor and the Co-Owner Trustee, and the Co-Owner Trustee shall
be entitled to be reimbursed by the Depositor for its other reasonable expenses
hereunder, including the reasonable compensation, expenses and disbursements of
such agents, representatives, experts and counsel as the Co-Owner Trustee may
reasonably determine are necessary to employ in connection with the exercise and
performance of its rights and its duties hereunder.
(c) The Co-Owner Eligible Lender Trustee shall receive as compensation
for its services hereunder such fees as have been separately agreed upon before
the date hereof between the Depositor and the Co-Owner Eligible Lender Trustee,
and the Co-Owner Eligible Lender Trustee shall be entitled to be reimbursed by
the Depositor for its other reasonable expenses hereunder, including the
reasonable compensation, expenses and disbursements of such agents,
representatives, experts and counsel as the Co-Owner Eligible Lender Trustee may
reasonably determine are necessary to employ in connection with the exercise and
performance of its rights and its duties hereunder.
Section 8.2 INDEMNIFICATION.
The Depositor shall be liable as primary obligor for, and shall
indemnify each of the Delaware Trustee in its individual capacity and its
successors, assigns, agents and servants, the Co-Owner Trustee in its individual
capacity and its successors, assigns, agents and servants and any other
co-trustee and the Co-Owner Eligible Lender Trustee in its individual capacity
and its successors, assigns, agents and servants and any other co-trustee
(collectively, the "Indemnified Parties") from and against, any and all
liabilities, obligations, losses, damages, taxes, claims, actions and suits, and
any and all reasonable costs, expenses and disbursements (including reasonable
legal fees and expenses) of any kind and nature whatsoever (collectively,
"Expenses") which may, at any time, be imposed on, incurred by, or asserted
against the Delaware Trustee, the Co-Owner Trustee, the Co-Owner Eligible Lender
Trustee or any other Indemnified Party in any way relating to or arising out of
this Agreement, the Related
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Documents, the Trust Property, the administration of the Trust Property or the
action or inaction of the Delaware Trustee, the Co-Owner Trustee or the Co-Owner
Eligible Lender Trustee hereunder; provided, however, that the Depositor shall
not be liable for or required to indemnify the Delaware Trustee, the Co-Owner
Trustee or the Co-Owner Eligible Lender Trustee from and against Expenses
arising or resulting from any of the matters described in the third sentence of
Section 7.1 hereof; and, provided further that, notwithstanding anything in this
Agreement to the contrary, the indemnification provided herein shall be payable
solely from the Trust Property. The indemnification contained in this Section
shall survive the resignation or termination of the Delaware Trustee, the
Co-Owner Trustee or the Co-Owner Eligible Lender Trustee, or any of them, or the
termination of this Agreement.
Section 8.3 NON-RECOURSE OBLIGATIONS.
Notwithstanding anything in this Agreement or any Related Document to
the contrary, each of the Delaware Trustee, the Co-Owner Trustee and the
Co-Owner Eligible Lender Trustee agrees in its individual capacity and in its
respective capacity as Delaware Trustee, Co-Owner Trustee or Co-Owner Eligible
Lender Trustee of the Trust that all obligations under this Agreement to the
Delaware Trustee, the Co-Owner Trustee or the Co-Owner Eligible Lender Trustee,
individually or as Trustees, respectively, of the Trust shall be recourse to the
Trust Property only and specifically shall not be recourse to the assets of the
Certificateholder.
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ARTICLE IX
TERMINATION
Section 9.1 TERMINATION OF THE TRUST.
(a) Subject to distribution to the Certificateholder by the Co-Owner
Trustee of any amounts deposited or to be deposited in the Certificate
Distribution Account, the respective obligations and responsibilities of the
Depositor, the Delaware Trustee, the Co-Owner Trustee and the Co-Owner Eligible
Lender Trustee created by this Agreement and the Trust created by this Agreement
shall terminate upon the earlier to occur of (i) the maturity or other
liquidation of the last Financed Student Loan (including the auction sale by the
Indenture Trustee of the remaining Financed Student Loans in the Trust as
described in Section 3.02 of the Terms Supplement and the subsequent
distribution of amounts in respect of such auction sale as provided in the
Indenture and the other Related Documents) and (ii) the payment to the
Noteholders of all amounts payable pursuant to the Indenture. In any case, there
shall be delivered to the Delaware Trustee, the Co-Owner Trustee, the Co-Owner
Eligible Lender Trustee and the Indenture Trustee an Opinion of Counsel that all
applicable preference periods under federal, state and local bankruptcy,
insolvency and similar laws have expired with respect to the payments pursuant
to the immediately preceding clause (ii); provided, however, that in no event
shall the trust created by this Agreement continue beyond the defeasance of the
Indenture in accordance with the provisions of Article X thereof; and provided,
further, that the rights to indemnification under Section 8.2 shall survive the
termination of the Trust. The bankruptcy, liquidation, dissolution, termination,
resignation, expulsion, withdrawal, death or incapacity of any
Certificateholder, shall not (x) operate to terminate this Agreement or the
Trust, nor (y) entitle such Certificateholder'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 all or any part of the Trust or Trust Property nor
(z) otherwise affect the rights, obligations and liabilities of the parties
hereto.
(b) Neither the Depositor nor the Certificateholder shall be entitled
to revoke or terminate the Trust.
(c) Within five Business Days of receipt by the Co-Owner Trustee of
notice from the Indenture Trustee given pursuant to Section 5.9 of the Indenture
of final distribution to the Co-Owner Trustee of amounts held under the
Indenture, the Co-Owner Trustee shall mail written notice to the
Certificateholder, specifying (i) the Certificateholder's Distribution Date upon
which final distribution of amounts received hereunder shall be made upon
presentation and surrender of such Certificateholder's Certificate at the office
of the Paying Agent therein specified, (ii) the amount of any such final
payment, and (iii) that the Record Date otherwise applicable to such
Certificateholder's Distribution Date is not applicable, payments being made
only upon presentation and surrender of such Certificate at the office of the
Paying Agent therein specified. The Co-Owner Trustee shall give such notice to
the Certificate Registrar (if different from the Co-Owner Trustee) at the time
such notice is given to such Certificateholder. In the event such notice is
given, the Co-Owner Trustee shall make deposits into the Certificate
Distribution Account in accordance with Section 5.1(a) hereof. Upon presentation
and surrender
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of the Certificate, the Paying Agent shall cause to be distributed to such
Certificateholder the amount distributable on such Certificateholder's
Distribution Date pursuant to Section 5.2 hereof.
(d) In the event that the Certificateholder shall not surrender its
Certificate for cancellation within six months after the date specified in the
above-mentioned written notice, the Co-Owner Trustee shall give a second written
notice to such Certificateholder to surrender its Certificate for cancellation
and receive the final distribution with respect thereto. If within one year
after the second notice the Certificate shall not have been surrendered for
cancellation, the Co-Owner Trustee may take appropriate steps, or may appoint an
agent to take appropriate steps, to contact such Certificateholder concerning
surrender of its Certificate, and the cost thereof shall be paid out of the
funds and other assets that remain subject to this Agreement. Any funds which
are payable to the Certificateholder remaining in the Trust after exhaustion of
such remedies shall, to the fullest extent permitted by law, be distributed by
the Co-Owner Trustee to the Certificateholder (but only upon termination of this
Agreement), and such Certificateholder, by acceptance of its Certificate, hereby
waives any rights with respect to such funds.
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ARTICLE X
SUCCESSOR DELAWARE TRUSTEES,
CO-OWNER TRUSTEES AND CO-OWNER ELIGIBLE LENDER TRUSTEES
Section 10.1 ELIGIBILITY REQUIREMENTS FOR DELAWARE TRUSTEE, CO-OWNER
TRUSTEE AND CO-OWNER ELIGIBLE LENDER TRUSTEE.
(a) The Delaware Trustee shall at all times be a banking or trust
corporation (i) having its Corporate Trust Office in the State of Delaware, (ii)
authorized to exercise corporate trust powers in the State of Delaware; (iii)
having a combined capital and surplus of at least $50,000,000 and subject to
supervision or examination by Federal or State authorities; and (iv) having (or
having a parent which has) a rating of at least Baa3 by Moody's or A-1 by
Standard & Poor's. If such corporation shall publish reports of condition at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purpose of this Section, the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. In case at any time the Delaware Trustee shall cease to be
eligible in accordance with the provisions of this Section, the Delaware Trustee
shall resign immediately in the manner and with the effect specified in Section
10.2 hereof.
(b) Each of the Co-Owner Trustee and the Co-Owner Eligible Lender
Trustee shall at all times be a trust company or bank having the powers of a
trust company within the state in which the principal office of the
Administrator is located, organized and doing business under the laws of the
United States of America, any state thereof or the District of Columbia and have
a combined capital and surplus of at least $50,000,000 and subject to
supervision or examination by Federal or State authorities. In addition, the
Co-Owner Eligible Lender Trustee shall at all times be an "eligible lender"
under the Higher Education Act.
Section 10.2 RESIGNATION OR REMOVAL OF DELAWARE TRUSTEE, CO-OWNER
TRUSTEE AND CO-OWNER ELIGIBLE LENDER TRUSTEE.
(a) The Delaware Trustee or the Co-Owner Trustee may at any time resign
and be discharged from the trusts hereby created by giving written notice
thereof to the other two Trustees hereunder, the Certificateholder, the
Depositor (if different from the Certificateholder) and the Indenture Trustee at
least 30 days before the date specified in such instrument. If the Co-Owner
Eligible Lender Trustee resigns or is discharged from the trusts created by the
Co-Owner Eligible Lender Trust Agreement, the Co-Owner eligible Lender Trustee
(i) shall given written notice thereof to the other two Trustees hereunder, the
Certificateholder, the Depositor (if different from the Certificateholder) and
the Indenture Trustee at least 30 days before the effective date of such
registration and (ii) shall be deemed to have resigned from its obligations
hereunder and shall be replaced by a Successor Trustee appointed pursuant to
this Section 10.2; provided, however, that the Successor Trustee to be appointed
shall have executed and delivered an eligible lender trust agreement with the
Co-Owner Trustee. Upon receiving such notice of resignation, the
Certificateholder, with the consent of the non-resigning Trustee of the Trust
shall promptly appoint a successor Delaware Trustee, Co-Owner Trustee or
Co-Owner Eligible
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Lender Trustee, as applicable (any successor appointed under any provision of
this Section 10.2, solely for purposes of this Section 10.2 and Section 10.3
hereof, a "Successor Trustee"), meeting the qualifications set forth in Section
10.1(a) or (b), as applicable, by written instrument, in duplicate, one copy of
which instrument shall be delivered to the resigning Trustee and one copy to the
Successor Trustee, provided that the Depositor shall have received written
confirmation from each of the Rating Agencies that the proposed appointment will
not adversely affect the ratings of such Rating Agencies on any Outstanding
Notes. If no Successor Trustee shall have been so appointed and have accepted
appointment within 30 days after the giving of such notice of resignation, the
resigning Trustee, either of the non-resigning Trustees or the Indenture Trustee
may petition any court of competent jurisdiction for the appointment of a
Successor Trustee.
(b) If (i) at any time the Delaware Trustee, the Co-Owner Trustee
and/or the Co-Owner Eligible Lender Trustee shall cease to be eligible in
accordance with the provisions of Section 10.1(a) or (b), as applicable, and
shall fail to resign after written request therefor by either of the other
Trustees, the Certificateholder or the Indenture Trustee, (ii) at any time the
Delaware Trustee, the Co-Owner Trustee and/or the Co-Owner Eligible Lender
Trustee shall be legally unable to act, or shall be adjudged bankrupt or
insolvent, or a receiver of the Delaware Trustee, the Co-Owner Trustee and/or
the Co-Owner Eligible Lender Trustee, or of the respective property of any of
them, shall be appointed, or any public officer shall take charge or control of
the Delaware Trustee, the Co-Owner Trustee and/or the Co-Owner Eligible Lender
Trustee, or of the respective property or affairs of any one or all of them, for
the purpose of rehabilitation, conservation or liquidation or (iii) the
Certificateholder elects in its sole discretion to remove the Delaware Trustee,
the Co-Owner Trustee or the Co-Owner Eligible Lender Trustee for any reason (in
each case such Trustee for the purposes of this paragraph is hereafter referred
to as a "Disqualified Trustee" and a Trustee not meeting the description of a
Disqualified Trustee, a "Qualified Trustee" ), then either of the Qualified
Trustees, if any, or the Certificateholder may remove such Disqualified Trustee.
If either of the Qualified Trustees or the Certificateholder shall remove the
Disqualified Trustee under the authority of the immediately preceding sentence,
the Certificateholder shall promptly appoint a Successor Trustee meeting the
qualification requirements of Section 10.1 by written instrument, in triplicate,
one copy of which instrument shall be delivered to the Disqualified Trustee so
removed and one copy to the Successor Trustee and Qualified Trustees, if any,
and shall make payment of all fees owed to the outgoing Disqualified Trustee.
(c) Any resignation or removal of the Delaware Trustee, the Co-Owner
Trustee and/or the Co-Owner Eligible Lender Trustee and appointment of a
Successor Trustee pursuant to any of the provisions of this Section shall not
become effective until all fees and expenses, including any indemnity payments,
due to the outgoing Trustee have been paid and until acceptance of appointment
by the Successor Trustee pursuant to Section 10.3.
Section 10.3 SUCCESSOR TRUSTEE.
(a) Any Successor Trustee appointed pursuant to Section 10.2 hereof
shall execute, acknowledge and deliver to the remaining Trustees, if any, to the
Certificateholder and to its predecessor (solely for purposes of this Section
10.3, the "Predecessor Trustee") an instrument accepting such appointment under
this Agreement and, if the Successor Trustee is the Co-Owner Eligible Lender
Trustee, an eligible lender trust agreement between itself and the Co-Owner
Trustee, and thereupon the resignation or removal of the Predecessor Trustee
shall become
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effective and such Successor Trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties, and
obligations of its Predecessor Trustee under this Agreement, with like effect as
if originally named as Delaware Trustee, Co-Owner Trustee or Co-Owner Eligible
Lender Trustee, as applicable. The Predecessor Trustee shall deliver to the
Successor Trustee all documents and statements and moneys, if any, held by it
under this Agreement; and the Certificateholder, the remaining Trustee and the
Predecessor Trustee shall execute and deliver such instruments and do such other
things as may reasonably be required for fully and certainly vesting and
confirming in the Successor Trustee all such rights, powers, duties and
obligations.
(b) No Successor Trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such Successor Trustee shall be
eligible to become the Delaware Trustee, the Co-Owner Trustee or the Co-Owner
Eligible Lender Trustee, as applicable, pursuant to Section 10.1 hereof.
(c) Upon acceptance of appointment by a Successor Trustee pursuant to
this Section, the Certificateholder shall give notice by first class mail of the
name and address and telecopy number of the Successor Trustee to the Indenture
Trustee, the Noteholders and the Rating Agencies. If the Certificateholder shall
fail to mail such notice within 10 days after acceptance of appointment by the
Successor Trustee, the Successor Trustee shall cause such notice to be mailed at
the expense of the Certificateholder.
Section 10.4 MERGER OR CONSOLIDATION OF DELAWARE TRUSTEE, CO-OWNER
TRUSTEE OR CO-OWNER ELIGIBLE LENDER TRUSTEE.
Any corporation into which the Delaware Trustee, the Co-Owner Trustee
or the Co-Owner Eligible Lender Trustee, as the case may be, 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 Delaware Trustee, the
Co-Owner Trustee or the Co-Owner Eligible Lender Trustee, as the case may be,
shall be a party, or any corporation succeeding to all or substantially all of
the corporate trust business of the Delaware Trustee, the Co-Owner Trustee or
the Co-Owner Eligible Lender Trustee, as the case may be, shall be the successor
of the Delaware Trustee, the Co-Owner Trustee or the Co-Owner Eligible Lender
Trustee, as the case may be, hereunder, provided such corporation shall be
eligible pursuant to the applicable provisions of Section 10.1 hereof, without
the execution or filing of any instrument or any further act on the part of any
of the parties hereto, anything herein to the contrary notwithstanding, and
provided further that the Delaware Trustee, the Co-Owner Trustee or the Co-Owner
Eligible Lender Trustee, as the case may be, shall mail notice of such merger or
consolidation to the Rating Agencies.
Section 10.5 APPOINTMENT OF ADDITIONAL CO-TRUSTEE OR SEPARATE TRUSTEE.
(a) Notwithstanding any other provisions of this Agreement, at any
time, for the purpose of meeting any legal requirements of any jurisdiction in
which any part of the Trust Property, including, without limitation, any
Financed Student Loan, may at the time be located, the Administrator and the
Co-Owner Trustee acting jointly shall have the power and shall execute and
deliver all instruments to appoint one or more Persons to act as co-trustee,
jointly with the Delaware Trustee, the Co-Owner Trustee or the Co-Owner Eligible
Lender Trustee, as the case may be, or separate trustee or separate trustees, of
all or any part of the Trust Property, and to vest
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in such Person, in such capacity, such title to the Trust Property, or any part
thereof, and, subject to the other provisions of this Section, such powers,
duties, obligations, rights and trusts as the Administrator and the Co-Owner
Trustee may consider necessary or desirable. If the Administrator shall not have
joined in such appointment within 15 days after the receipt by it of a request
so to do, the Co-Owner Trustee shall have the power to make such appointment. No
co-trustee or separate trustee under this Agreement shall be required to meet
the terms of eligibility as a successor trustee pursuant to Section 10.1 hereof
and no notice of the appointment of any co-trustee or separate trustee shall be
required pursuant to Section 10.1 hereof; provided, however, that such
co-trustee with or separate trustee from the Co-Owner Eligible Lender Trustee
shall be an "eligible lender" under the Higher Education Act.
(b) Each separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties, and obligations conferred or
imposed upon the Delaware Trustee, the Co-Owner Trustee or the Co-Owner
Eligible Lender Trustee, as applicable, shall be conferred upon and
exercised or performed by the Delaware Trustee, the Co-Owner Trustee or
the Co-Owner Eligible Lender Trustee, as applicable, and such separate
trustee or co-trustee jointly (it being understood that such separate
trustee or co-trustee is not authorized to act separately without the
Delaware Trustee, the Co-Owner Trustee or the Co-Owner Eligible Lender
Trustee, as applicable, joining in such act), except to the extent that
under any law of any jurisdiction in which any particular act or acts
are to be performed, the Delaware Trustee, the Co-Owner Trustee or the
Co-Owner Eligible Lender Trustee, as applicable, shall be incompetent
or unqualified to perform such act or acts, in which event such rights,
powers, duties, and obligations (including the holding of title to the
Trust Property or any portion thereof in any such jurisdiction) shall
be exercised and performed singly by such separate trustee or
co-trustee, but solely at the direction of the Delaware Trustee, the
Co-Owner Trustee or the Co-Owner Eligible Lender Trustee, as
applicable;
(ii) no Trustee under this Agreement shall be personally
liable by reason of any act or omission of any other Trustee under this
Agreement; and
(iii) the Administrator and the Delaware Trustee, the Co-Owner
Trustee or the Co-Owner Eligible Lender Trustee, as applicable, acting
jointly may at any time accept the resignation of or remove any
separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Delaware Trustee,
the Co-Owner Trustee or the Co-Owner Eligible Lender Trustee, as applicable,
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall, refer to this Agreement and
the conditions of this Article. Each separate trustee and co-trustee, upon its
acceptance of the trusts conferred, shall be vested with the estates or property
specified in its instrument of appointment, either jointly with the Delaware
Trustee, the Co-Owner Trustee or the Co-Owner Eligible Lender Trustee, as
applicable, or separately, as may be provided therein, subject to all the
provisions of this Agreement, specifically including every provision of this
Agreement relating to the conduct of, affecting the liability of, or affording
protection to, the Delaware Trustee, the Co-Owner Trustee or the Co-Owner
Eligible Lender Trustee, as applicable. Each such instrument shall be filed with
the Delaware Trustee, the Co-Owner Trustee
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or the Co-Owner Eligible Lender Trustee, as applicable, and a copy thereof given
to the Administrator and the Certificateholder.
(d) Any separate trustee or co-trustee may at any time appoint the
Delaware Trustee, the Co-Owner Trustee or the Co-Owner Eligible Lender Trustee,
as applicable, its agent or attorney-in-fact with full power and authority, to
the extent not prohibited by law, to do any lawful act under or in respect of
this Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all of
its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Delaware Trustee, the Co-Owner Trustee or the Co-Owner Eligible
Lender Trustee, as applicable, to the extent permitted by law, without the
appointment of a new or successor trustee.
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ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.1 AMENDMENT.
(a) This Agreement may be amended by the Certificateholder, the
Delaware Trustee, the Co-Owner Trustee and the Co-Owner Eligible Lender Trustee,
without the consent of the Depositor (if other than the Certificateholder) or
Noteholders, (i) to cure any ambiguity or (ii) to correct, supplement or modify
any provisions in this Agreement; provided, however, that such action shall not,
as evidenced by an Opinion of Counsel, adversely affect in any material respect
the interests of the Certificateholder or any Noteholder.
(b) This Agreement may also be amended from time to time by the
Certificateholder without the consent of the Depositor (if other than the
Certificateholder), the Delaware Trustee, the Co-Owner Trustee and the Co-Owner
Eligible Lender Trustee and, if such amendment materially and adversely affects
the interests of Noteholders, the consent of a majority of the Directing Notes
(which consent of any Noteholder given pursuant to this Section or pursuant to
any other provision of this Agreement shall be conclusive and binding on such
holders and on any holder of any Certificate or Note issued upon the transfer
thereof or in exchange therefor or in lieu thereof whether or not notation of
such consent is made upon the Certificate or Note) for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Agreement, or of modifying in any manner the rights of the
Certificateholder or holder of a Note; provided, however, that no such amendment
shall (i) increase or reduce in any manner the amount of, or accelerate or delay
the timing of, collections of payments on the Financed Student Loans or
distributions that shall be required to be made on any Note or (ii) reduce the
aforesaid percentage required to consent to any such amendment or any waiver
hereunder, without the consent of the holders of all the Notes then outstanding.
(c) Prior to the execution of any such amendment or consent, the
Certificateholder shall furnish written notification of the substance of such
amendment or consent to each Rating Agency.
(d) Promptly after the execution of any such amendment or consent, the
Co-Owner Trustee shall furnish written notification of the substance of such
amendment or consent to the Indenture Trustee unless such party has previously
received such notification.
(e) It shall not be necessary for the consent of the Noteholders
pursuant to Section 11.1(b) hereof to approve the particular form of any
proposed amendment or consent, but it shall be sufficient if such consent shall
approve the substance thereof. The manner of obtaining such consents (and any
other consents of the Noteholders provided for in this Agreement) and of
evidencing the authorization of the execution thereof by the Certificateholder
shall be subject to such reasonable requirements as the Co-Owner Trustee may
prescribe, including the establishment of record dates.
(f) Prior to the execution of any amendment to this Agreement, the
Delaware Trustee, the Co-Owner Trustee and the Co-Owner Eligible Lender Trustee
shall be entitled to
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receive and rely upon an Opinion of Counsel stating that the execution of such
amendment is authorized or permitted by this Agreement and that all conditions
precedent to the execution and delivery of such amendment have been satisfied.
The Delaware Trustee, the Co-Owner Trustee and the Co-Owner Eligible Lender
Trustee may, but shall not be obligated to, enter into any such amendment which
affects the Delaware Trustee's, the Co-Owner Trustee's or the Co-Owner Eligible
Lender Trustee's own rights, duties or immunities under this Agreement or
otherwise.
Section 11.2 NO RECOURSE.
The Certificateholder by accepting a Certificate acknowledges that such
Certificateholder's Certificate represents such Certificateholder's beneficial
interest in the Trust only and does not represent interests in or obligations of
the Depositor, the Administrator, the Master Servicer, the Delaware Trustee, the
Co-Owner Trustee, the Co-Owner Eligible Lender Trustee, the Indenture Trustee or
any affiliate of any of the foregoing and no recourse may be had against such
parties or their assets, except as may be expressly set forth or contemplated in
this Agreement, in each Certificate or in the Related Documents.
Section 11.3 GOVERNING LAW.
(a) This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware without regard to the principles of
conflicts of laws thereof and the obligations, rights and remedies of the
parties under this Agreement shall be determined in accordance with such laws;
provided, however, that the parties hereto intend that the provisions hereof
shall control over any contrary or limiting statutory or common law of the State
of Delaware and that, to the maximum extent permitted by applicable law, there
shall not be applicable to the Trust, the Trustees or this Agreement any
provisions of the laws (statutory or common) of the State of Delaware pertaining
to trusts that relate to or regulate in a manner inconsistent with the terms
hereof: (i) the filing with any court or governmental body or agency of trustee
accounts or schedules of trustee fees and charges, (ii) affirmative requirements
to post bonds for trustees, officers, agents or employees of a trust, (iii) the
necessity for obtaining court or other governmental approval concerning the
acquisition, holding or disposition of real or personal property, (iv) fees or
other sums payable to trustees, officers, agents or employees of a trust, (v)
the allocation of receipts and expenditures between income and principal, (vi)
restrictions or limitations on the permissible nature, amount or concentration
of trust investments or requirements relating to the titling, storage or other
manner of holding of trust assets, or (vii) the establishment of fiduciary or
other standards or responsibilities or limitations on the acts or powers of
trustees that are inconsistent with the limitations on liability or authorities
and powers of the Trustees set forth or referenced in this Agreement. Section
3540 of Title 12 of the Delaware Code shall not apply to the Trust.
(b) Each of the parties hereto agrees (i) that this Agreement involves
at least $100,000, and (ii) this Agreement has been entered into by the parties
hereto in express reliance upon 6 DEL. C. section 2708.
(c) Each party hereto unconditionally agrees (i) to be subject to the
jurisdiction of the courts of the State of Delaware and of the federal courts
sitting in the State of Delaware and (ii)(A) to the extent that such party is
not otherwise subject to service of process in the State of Delaware, to appoint
and maintain an agent in the State of Delaware as such party's agent for
acceptance of legal process and (B) that service of process may also be made on
such party by
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prepaid certified mail with a proof of mailing receipt validated by the United
States Postal Service constituting evidence of valid service, and that service
made pursuant to (ii)(A) or (B) above shall have the same legal force effect as
if served upon such party personally within the State of Delaware. For purposes
of implementing the party's agreement to appoint and maintain an agent for
service of process in the State of Delaware, each of the Co-Owner Trustee and
the Co-Owner Eligible Lender Trustee does hereby appoint the Delaware Trustee as
such agent, and the Delaware Trustee hereby accepts such appointment.
Section 11.4 SEVERABILITY OF PROVISIONS.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of any Certificate or the rights of the Holder thereof.
Section 11.5 CERTIFICATE NONASSESSABLE AND FULLY PAID.
The Certificateholder shall not be personally liable for obligations of
the Trust, the undivided beneficial interest in the assets of the Trust, whether
fractional or whole, represented by a Certificate shall be nonassessable for any
losses or expenses of the Trust or for any reason whatsoever, and each
Certificate upon execution thereof by the Delaware Trustee and authentication
thereof by the Authentication Agent, in each case pursuant to Section 3.3
hereof, are and shall be deemed fully paid and nonassessable.
Section 11.6 THIRD-PARTY BENEFICIARIES.
This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective successors and permitted assigns. Except as
otherwise provided in this Agreement, no other Person shall have any right or
obligation hereunder.
Section 11.7 COUNTERPARTS.
For the purpose of facilitating its execution and for other purposes,
this Agreement may be executed simultaneously in any number of counterparts,
each of which counterparts shall be deemed to be an original, and all of which
counterparts shall constitute but one and the same instrument.
Section 11.8 NOTICES.
All demands, notices and communications under this Agreement shall be
in writing, personally delivered or mailed by certified mail-return receipt
requested, and shall be deemed to have been duly given upon receipt (a) in the
case of the Depositor, at the following address: One West Fourth Street, Suite
210, Cincinnati, Ohio 45202, Attention: Chief Financial Officer, (b) in the case
of the Delaware Trustee, the Co-Owner Trustee and the Co-Owner Eligible Lender
Trustee, at their respective Corporate Trust Office and (c) in the case of the
Administrator, One West Fourth Street, Suite 200, Cincinnati, Ohio, Attention:
Chief Financial Officer, or at such other address as shall be designated by any
such party in a written notice to the other parties. Notwithstanding the
foregoing, any notice required or permitted to be mailed to the
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Certificateholder shall be given by first class mail, postage prepaid, at the
address of such Holder as shown in the Certificate Register.
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IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement
to be duly executed by their respective officers as of the day and year first
above written.
STUDENT LOAN FUNDING RIVERFRONT LLC,
("Depositor" and sole initial
"Certificateholder")
By: /s/ Perry D. Moore
Name: Perry D. Moore
Title: Senior Vice President
FIRST UNION TRUST COMPANY, NATIONAL
ASSOCIATION,
not in its individual capacity, but
solely as trustee under this Trust
Agreement ("Delaware Trustee")
By: /s/ Edward L. Truitt
Name: Edward L. Truitt
Title: Trust Officer
FIRSTAR BANK, NATIONAL ASSOCIATION,
not in its individual capacity, but
solely as trustee under this Trust
Agreement ("Co-Owner Trustee")
By: /s/ Brian J. Gardner
Name: Brian J. Garnder
Title: Vice President & Trust Officer
Acknowledged and Agreed to: FIRSTAR BANK, NATIONAL ASSOCIATION,
not in its individual capacity, but
solely as eligible lender trustee under
the Co-Owner Eligible Lender Trust
Agreement for the benefit of the Trust
("Co-Owner Eligible Lender Trustee")
By: /s/ Brian J. Gardner
Name: Brian J. Garnder
Title: Vice President & Trust Officer
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EXHIBIT A
---------
FORM OF CERTIFICATE
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAWS. THE HOLDER HEREOF,
BY PURCHASING THIS CERTIFICATE, AGREES THAT THIS CERTIFICATE MAY BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED ONLY IN ACCORDANCE WITH ANY APPLICABLE STATE
SECURITIES LAWS AND (1) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS AN
INSTITUTIONAL ACCREDITED INVESTOR WITHIN THE MEANING OF RULE 501(A)(1)-(3) UNDER
THE ACT THAT PURCHASES FOR ITS OWN ACCOUNT, OR (2) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT.
THIS CERTIFICATE MAY NOT BE TRANSFERRED DIRECTLY OR INDIRECTLY TO (I)
AN EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA")) THAT IS SUBJECT TO THE
PROVISIONS OF TITLE 1 OF ERISA, (II) A PLAN DESCRIBED IN SECTION 4975(E)(1) OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR (III) ANY ENTITY
WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF A PLAN'S INVESTMENT IN
THE ENTITY. FURTHER, THIS CERTIFICATE MAY BE TRANSFERRED ONLY TO A UNITED STATES
PERSON WITHIN THE MEANING OF SECTION 7701(A)(30) OF THE CODE.
THIS CERTIFICATE IS NOT GUARANTEED OR INSURED BY ANY GOVERNMENTAL
AGENCY.
Percentage Interest: 100%
STUDENT LOAN FUNDING 1999-A/B TRUST
STUDENT LOAN ASSET-BACKED TRUST CERTIFICATE
evidencing the undivided beneficial Percentage Interest
set forth above in the Trust, as defined below, the
property of which includes a pool of
student loans transferred to and deposited in the Trust by Student
Loan Funding Riverfront LLC and Firstar Bank, National
Association, as eligible lender trustee on behalf of
Student Loan Funding Riverfront LLC
THIS CERTIFIES THAT STUDENT LOAN FUNDING RIVERFRONT LLC is the
registered owner of the Percentage Interest set forth above in the Student Loan
Funding 1999-A/B Trust (the "Trust"), a common law (as opposed to statutory)
trust formed under the laws of the State of Delaware by Student Loan Funding
Riverfront LLC, (the "Depositor"). The Trust was created pursuant to a Trust
Agreement, dated as of August 1, 1999 (as amended from time to time, the "Trust
Agreement"), among the Depositor, First Union Trust Company, National
Association, Wilmington, Delaware, not in its individual capacity, but solely in
its capacity as owner trustee under the Trust Agreement (the "Delaware
Trustee"), and Firstar Bank, National Association, Cincinnati, Ohio, not in its
individual capacity, but solely in its capacity as co-owner trustee under the
Trust Agreement (the "Co-Owner Trustee" and collectively with the Delaware
Trustee, the "Trustees"), not in its individual capacity, but solely in its
capacity as co-owner eligible lender trustee under the Trust Agreement. A
summary of certain of the pertinent provisions of the Trust Agreement is set
forth below. To the extent not otherwise defined herein, the capitalized terms
used herein shall have the meanings assigned to them in the Trust Agreement. The
rules as to usage set forth in the Trust Agreement shall also be applicable to
this Certificate.
This Certificate is the sole, initial duly authorized Certificate,
designated "Student Loan Funding 1999-A/B Trust - Student Loan Asset-Backed
Trust Certificate" (herein called "this Certificate" or, collectively, with
other Certificates that may be issued upon transfer or exchange of this
Certificate for such other Certificates, whose aggregate Percentage Interest
shall be 100%, the "Certificates") issued under the Trust Agreement, to which
Trust
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<PAGE> 49
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound. The Trust Property includes an
initial deposit by the Depositor to the Certificate Contribution Account, and
all property and proceeds thereof of every description conveyed pursuant to the
Transfer and Sale Agreement and simultaneously with the issuance of this
Certificate, including, without limitation, a pool of student loans (the
"Financed Student Loans") and any all amounts deposited from time to time in the
Certificate Distribution Account. The rights of the Holder of this Certificate
to the assets of the Trust are subject to the rights of the Holders of certain
notes (the "Notes") issued under the Indenture of Trust, as supplemented by the
Terms Supplement to the Indenture of Trust, each dated as of October 1, 1999,
among the Co-Owner Trustee, the Co-Owner Eligible Lender Trustee and Firstar
Bank, National Association, not in its individual capacity but solely in its
capacity as Indenture Trustee (the "Indenture Trustee") (collectively, as
amended from time to time, the "Indenture").
Under the Trust Agreement, distributions will be made on the
Certificate on each Certificateholder's Distribution Date in the manner set
forth in the Trust Agreement.
The Holder of this Certificate acknowledges and agrees that its rights
to receive distributions in respect of this Certificate from amounts deposited
in the Excess Surplus Account under the Indenture pending their transfer to the
Certificate Distribution Account are subject to the rights of the Noteholders as
described in the Indenture.
The Certificateholder, by its acceptance of this Certificate, covenants
and agrees that such Certificateholder will not at any time institute against
the Depositor or the Trustees, or join in any institution against the Depositor
or the Trustees, any bankruptcy, reorganization, arrangement, insolvency,
receivership or liquidation proceedings, or other proceedings under any United
States federal or state bankruptcy or similar law in connection with any
obligations relating to this Certificate, the Notes, the Trust Agreement or any
of the other Related Documents.
The Holder of this Certificate, by its acceptance of this Certificate,
(i) agrees, for federal, state and local income and franchise tax purposes, to
treat the Trust as a "disregarded entity" (i.e. the Trust will be disregarded as
an entity separate from the Certificateholder), with the assets of the Trust
being the Financed Student Loans and other assets held by the Co-Owner Trustee,
the Notes for such purposes being debt of the Certificateholder which has
elected to disregard the Trust as an entity separate from itself for tax
purposes, and (ii) acknowledges that the Trust will file or cause to be filed
annual or other necessary returns, reports and other forms consistent with the
characterization of the Trust as a "disregarded entity" for federal, state and
local and franchise tax purposes and that the Depositor will not make, or cause
to be made, an election under the provisions of Treasury Regulation Section
301.7701.3 to classify the Trust as an association.
Distributions on this Certificate will be made from the Certificate
Distribution Account as provided in the Trust Agreement by the Co-Owner Trustee
by wire transfer or by check mailed to the Certificateholder of record in the
Certificate Register without the presentation or surrender of this Certificate
or the making of any notation hereon.
This Certificate does not represent an obligation of, or an interest
in, the Depositor, the Master Servicer, the Administrator, the Trustees or the
Indenture Trustee or any affiliates of any of them, and no recourse may be had
against such parties or their assets, except as may be expressly set forth
herein, in the Trust Agreement or in the other Related Documents. In addition,
this Certificate is not guaranteed by any governmental agency or instrumentality
and is limited in right of payment to certain excess collections respecting the
Financed Student Loans, all as more specifically set forth in the Indenture. A
copy of each of the Indenture and the Trust Agreement may be examined during
normal business hours at the principal office of the Depositor, and at such
other places, if any, designated by the Depositor upon request.
The Trust Agreement permits the amendment thereof without the consent
of the Certificateholder or any Noteholders, (i) to cure any ambiguity or (ii)
to correct, supplement or modify any provisions in the Trust Agreement;
provided, however, that such action shall not, as evidenced by an Opinion of
Counsel, adversely affect in any material respect the interests of the
Certificateholder or any Noteholder. The Trust Agreement permits, with certain
exceptions therein provided, but only with the consent of the Certificateholder
and, if such amendment materially and adversely affects the interests of
Noteholders, with the consent of a majority of the Directing Notes (as defined
in the Indenture) (which consent of the Certificateholder and Noteholders, if
any, given pursuant to the Trust Agreement shall be conclusive and binding on
such holders and on all future holders of the Certificate or Notes and of any
Certificate or
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<PAGE> 50
Notes issued upon the transfer thereof or in exchange therefor or in lieu
thereof whether or not notation of such consent is made upon the Certificate or
Notes) for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of the Trust Agreement, or of modifying in any
manner the rights of the Certificateholder or any Noteholder.
As provided in the Trust Agreement and subject to certain limitations
therein set forth, the transfer, to the extent permitted herein, of this
Certificate is registrable in the Certificate Register upon surrender of this
Certificate for registration of transfer at the office or agency maintained by
Firstar Bank, National Association, in its capacity as Certificate Registrar, or
by any successor Certificate Registrar, accompanied by a written instrument of
transfer in form satisfactory to the Co-Owner Trustee and the Certificate
Registrar duly executed by the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of authorized
denominations evidencing the same aggregate interest in the Trust will be issued
to the designated transferee.
This Certificate is issuable only as a Certificate registered in the
name of the Depositor as the initial Certificateholder and in the Percentage
Interest of 100%. As provided in the Trust Agreement and subject to the
provisions of the next succeeding paragraph [and provided that there are no
Notes Outstanding (as defined in the Indenture)]1, the Depositor, as the initial
registered Holder, may transfer, or exchange for other Certificates aggregating
in Percentage Interests 100%, this Certificate upon the surrender of this
Certificate. No service charge will be made for any such registration of
transfer or exchange, but the Co-Owner Trustee or the Certificate Registrar (if
different from the Co-Owner Trustee) may require payment of a sum sufficient to
cover any tax or governmental charge payable in connection therewith.
This Certificate may not be transferred directly or indirectly to (i)
an employee benefit plan (as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA")) that is subject to the
provisions of Title 1 of ERISA, (ii) a plan described in Section 4975(e)(1) of
the Internal Revenue Code of 1986, as amended (the "Code"), or (iii) any entity
whose underlying assets include plan assets by reason of a plan's investment in
the entity (each, a "Benefit Plan"). By accepting and holding this Certificate,
the Certificateholder thereof shall he deemed to have represented and warranted
that it is not a Benefit Plan.
The Certificate Registrar and any agent of the Certificate Registrar
may treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Delaware Trustee, the Co-Owner Trustee
or the Certificate Registrar or any such agent shall be affected by any notice
to the contrary.
This Certificate may not be transferred to any person who is not a U.S.
Person, as such term is defined in Section 7701(a)(30) of the Code.
Each transferee of this Certificate, or any portion thereof, shall be
required, prior to purchasing a Certificate, to execute the Purchaser's
Representation and Warranty Letter in the form attached to the Trust Agreement
as Exhibit B.
The obligations and responsibilities created by the Trust Agreement and
the Trust created thereby shall terminate upon the earlier to occur of (i) the
maturity or other liquidation of the last Financed Student Loan (including the
auction sale by the Indenture Trustee of the remaining Financed Student Loans in
the Trust as described in Section 3.02 of the Terms Supplement and the
subsequent distribution of amounts in respect of such auction sale as provided
in the Indenture and the other Related Documents) and (ii) the payment to the
Noteholders of all amounts payable pursuant to the Indenture.
This Certificate shall be construed in accordance with the laws of the
State of Delaware, 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.
- ------------------
(1) To be included only upon direction of the Depositor at the time of issuance
of this Certificate.
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<PAGE> 51
Unless the certificate of authentication hereon shall have been
executed by an authorized representative of the Authentication Agent, by manual
signature, this Certificate shall not entitle the Holder hereof to any benefit
under the Trust Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Delaware Trustee, not in its individual
capacity but solely as trustee of the Student Loan Funding 1999-A/B Trust, has
caused this Certificate to be duly executed as of the date set forth below.
FIRST UNION TRUST COMPANY, NATIONAL
ASSOCIATION, "Delaware Trustee", not in
its individual capacity but solely as
trustee of the Student Loan Funding
1999-A/B Trust
By: _________________________________
Authorized Signatory
Date: _______________, 1999
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned Trust
Agreement.
FIRSTAR BANK, NATIONAL ASSOCIATION,
Co-Owner Trustee,
not in its individual capacity but solely as Authentication Agent
of the Student Loan Funding 1999-A/B Trust
By:_________________________________________________
Authorized Representative
Date: ________________, 1999
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<PAGE> 52
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
- --------------------------------------------------------------------------------
(Please print or type name and address, including postal zip code, of assignee)
[PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE]
the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
_____________________________________________________________________ Attorney
to transfer said Certificate on the books of the Certificate Registrar, with
full power of substitution in the premises.
Dated:________________ ____________________________________*
Signature Guaranteed:
___________________________________
* NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Certificate in every particular, without
alteration, enlargement or any change whatever. Such signature must be
guaranteed by an approved eligible guarantor institution, an institution which
is a participant in a Securities Transfer Association recognized signature
guarantee program.
A-5
<PAGE> 53
EXHIBIT B
Form of Purchaser's Representation and Warranty Letter
Student Loan Funding Riverfront LLC
One West Fourth Street, Suite 210
Cincinnati, OH 45202
Firstar Bank, National Association,
as Certificate Registrar
425 Walnut Street
Cincinnati, OH 45202
RE: STUDENT LOAN FUNDING RIVERFRONT 1999-A/B TRUST - STUDENT LOAN ASSET
BACKED TRUST CERTIFICATE
Ladies and Gentlemen:
In connection with the proposed purchase by the undersigned of the
Student Loan Asset-Backed Trust Certificate (the "Certificate") issued under the
Trust Agreement related to the Student Loan Funding Riverfront 1999-A/B Trust,
dated as of August, 1999 (the "Agreement"), among Student Loan Funding
Riverfront LLC, as Depositor (the "Depositor"), First Union Trust Company,
National Association, as Delaware trustee, and Firstar Bank, National
Association, in its capacity as co-owner trustee, the undersigned (the
"Purchaser") represents, warrants and agrees that:
1. It is an institutional "accredited investor" as defined in Rule
501(a)(1)-(3) under the Securities Act of 1933 (the "Securities
Act") or a "qualified institutional buyer" as defined in Rule
144A(a)(1) of the Securities Act and is acquiring the Certificate
for its own institutional account or for the account of an
institutional accredited investor or qualified institutional buyer.
2. It is not (i) an employee benefit plan (as defined in Section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")) that is subject to the provisions of Title 1 of ERISA,
(ii) a plan described in Section 4975(e)(1) of the Internal Revenue
Code of 1986, as amended (the "Code"), or (iii) any entity whose
underlying assets include plan assets by reason of a plan's
investment in the entity.
3. It is a U.S. Person as defined in Section 7701(a)(30) of the Code.
4. It has such knowledge and experience in evaluating business and
financial matters so that it is capable of evaluating the merits and
risks of an investment in the Certificate. It understands the full
nature and risks of an investment in the Certificate and based upon
its present and projected net income and net worth, it believes that
it can bear the economic risk of an immediate or future loss of its
entire investment in the Certificate.
5. It understands that the Certificate will be offered in a transaction
not involving any public offering within the meaning of the
Securities Act, and that, if in the future it decides to resell,
pledge or otherwise transfer the Certificate, such Certificate may
be resold, pledged or transferred only (a) to a person who the
seller reasonably believes is an institutional "accredited investor"
as defined in Rule 501(a)(1)-(3) under the Securities Act that
purchases for its own account or for the account of another
institutional accredited investor or (b) pursuant to an effective
registration statement under the Securities Act.
6. It understands that the Certificate will bear a legend substantially
to the following effect:
"THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT") OR STATE SECURITIES LAWS.
THE HOLDER
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<PAGE> 54
HEREOF, BY PURCHASING THIS CERTIFICATE, AGREES THAT THIS
CERTIFICATE MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED
ONLY IN ACCORDANCE WITH ANY APPLICABLE STATE SECURITIES LAWS
AND (1) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS AN
INSTITUTIONAL ACCREDITED INVESTOR WITHIN THE MEANING OF RULE
501(A)(1)-(3) UNDER THE ACT THAT PURCHASES FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF AN INSTITUTIONAL ACCREDITED INVESTOR, OR
(2) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
ACT.
THIS CERTIFICATE MAY NOT BE TRANSFERRED DIRECTLY OR INDIRECTLY
TO (I) AN EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA")) THAT IS SUBJECT TO THE PROVISIONS OF TITLE
1 OF ERISA, (II) A PLAN DESCRIBED IN SECTION 4975(E)(1) OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR
(III) ANY ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS
BY REASON OF A PLAN'S INVESTMENT IN THE ENTITY. FURTHER, THIS
CERTIFICATE MAY BE TRANSFERRED ONLY TO A UNITED STATES PERSON
WITHIN THE MEANING OF SECTION 7701(A)(30) OF THE CODE.
THIS CERTIFICATE IS NOT GUARANTEED OR INSURED BY ANY
GOVERNMENTAL AGENCY."
7. It is acquiring the Certificate for its own account and not with a
view to the public offering thereof in violation of the Securities
Act (subject, nevertheless, to the understanding that disposition of
its property shall at all times be and remain within its control).
8. It has been furnished with all information regarding the Trust and
the Certificate which it has requested from the Trust and the
Depositor.
9. Neither it nor anyone acting on its behalf has offered, transferred,
pledged, sold or otherwise disposed of the Certificate, any interest
in the Certificate or any other similar security to, or solicited
any offer to buy or accept a transfer, pledge or other disposition
of the Certificate, any interest in the Certificate or any other
similar security from, or otherwise approached or negotiated with
respect to the Certificate, any interest in the Certificate or any
other similar security with, any person in any manner or made any
general solicitation by means of general advertising or in any other
manner, which would constitute a distribution of the Certificate
under the Securities Act or which would require registration
pursuant to the Securities Act nor will it act, nor has it
authorized or will authorize any person to act, in such manner with
respect to the Certificate.
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<PAGE> 55
10. It is not an "affiliate" (within the meaning of Rule 144 under
the Securities Act) of the Depositor.
Dated:_____________
Very truly yours,
__________________________________
[Name of Purchaser]
By:_______________________________
Name:_____________________________
Title:____________________________
NOTE: To be executed by an executive officer
B-3
<PAGE> 1
================================================================================
EXHIBIT 4.1
INDENTURE OF TRUST,
Dated as of October 1, 1999,
By and Among
STUDENT LOAN FUNDING 1999-A/B TRUST,
a Delaware common law trust,
FIRSTAR BANK, NATIONAL ASSOCIATION,
Not in its individual capacity, but solely as co-owner eligible lender trustee
for the benefit Student Loan Funding 1999-A/B Trust
and
FIRSTAR BANK, NATIONAL ASSOCIATION,
as Indenture Trustee
Relating to the
STUDENT LOAN AUCTION RATE CALLABLE ASSET-BACKED NOTES,
SERIES 1999A AND SERIES 1999B
OF
STUDENT LOAN FUNDING 1999-A/B TRUST
================================================================================
<PAGE> 2
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939
(THE "TRUST INDENTURE ACT") AND THE
INDENTURE OF TRUST, DATED AS OF OCTOBER 1, 1999
TRUST INDENTURE
ACT SECTION INDENTURE SECTION
----------- -----------------
Section 310 (a)(1)...........................................7.1(b)
(a)(2)...........................................7.1(b)
(a)(3)..............................................7.2
(a)(4)..............................................N/A
(a)(5)...........................................7.1(b)
(b)..............................................7.1(d)
(c).................................................N/A
Section 311 (a)................................................7.17
(b)................................................7.17
(c).................................................N/A
Section 312 (a)................................................6.15
(b)................................................7.18
(c)................................................7.18
Section 313 (a)................................................7.10
(b)................................................7.10
(c)................................................7.10
(d)................................................7.10
Section 314 (a).................................................6.7
(b)................................................12.8
(c)..............................................1.3(a)
(c)(1)...........................................1.3(a)
(c)(2)...........................................1.3(a)
(c)(3)...........................................1.3(a)
(d)...........................................1.3(c)(e)
(e)..............................................1.3(a)
(f)..............................................1.3(k)
Section 315 (a)...........................................7.1(a)(i)
(b).................................................8.8
(c)..........................................7.1(a)(ii)
(d).........................................7.1(a)(iii)
(e)................................................6.16
Section 316 (a)(1)(A)...........................................8.4
(a)(1)(B)...........................................8.7
(a)(2)..............................................N/A
(a)(computations)...................................8.9
(b).................................................8.5
(c).................................................N/A
Section 317 (a)(1)..............................................8.4
(a)(2)..............................................8.4
(b).................................................N/A
Section 318 (a)................................................12.9
- ---------------------
NOTE: This reconciliation and tie shall not, for any purpose, be
deemed to be a part of the Indenture. Attention should also be
directed to Section 318(c) of the Trust Indenture Act (the
provisions of which are intended to apply to this Indenture,
regardless of whether this Indenture is qualified thereunder),
which provides that the provisions of Section 310 to and
including Section 317 are a part of and govern every qualified
indenture whether or not physically contained therein.
ii
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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<S> <C>
PREAMBLE............................................................................................1
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.1 Definitions..............................................................................4
SECTION 1.2 Use of Certain Terms....................................................................18
SECTION 1.3 Compliance Certificates and Opinions....................................................18
SECTION 1.4 Incorporation by Reference of Trust Indenture Act.......................................21
ARTICLE II
AUTHORIZATION, TERMS AND PROVISIONS OF NOTES
SECTION 2.1 Authorization of Notes; Terms of Notes in General; Notes to Constitute
Limited Obligations.....................................................................22
SECTION 2.2 Execution of Notes; Validity of Signatures..............................................22
SECTION 2.3 Transfer of Notes; Exchange of Notes....................................................23
SECTION 2.4 Books of Registry.......................................................................24
SECTION 2.5 Mutilated, Lost, Stolen or Destroyed Notes..............................................24
SECTION 2.6 Disposition and Destruction of Notes....................................................25
SECTION 2.7 Forms of Notes and Instructions for Payment.............................................25
SECTION 2.8 Temporary Notes.........................................................................26
ARTICLE III
[RESERVED]
ARTICLE IV
REDEMPTION OF THE NOTES
SECTION 4.1 Redemption of Notes in General..........................................................28
ARTICLE V
DISPOSITION OF PROCEEDS
ESTABLISHMENT OF FUNDS AND ACCOUNTS
APPLICATION OF AVAILABLE FUNDS
SECTION 5.1 Disposition of Proceeds of the Notes....................................................29
SECTION 5.2 Reserve Fund............................................................................29
SECTION 5.3 Acquisition Fund........................................................................30
SECTION 5.3.1 Financing of Student Loans..........................................................30
SECTION 5.3.2 Investment of Acquisition Fund; Transfer of Proceeds in Acquisition Fund............32
SECTION 5.4 Student Loan Portfolio Fund; Sale of Student Loans......................................32
SECTION 5.5 Collection Fund.........................................................................34
</TABLE>
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<TABLE>
<CAPTION>
<S> <C>
SECTION 5.5.1 Collection Account..................................................................34
SECTION 5.5.2 Note Payment Account................................................................35
SECTION 5.5.3 Capitalized Interest Account........................................................32
SECTION 5.5.4 Expense Account.....................................................................36
SECTION 5.5.5 [Reserved]..........................................................................36
SECTION 5.5.6 Investment of Collection Fund.......................................................36
SECTION 5.6 Pledge..................................................................................36
SECTION 5.7 Investments.............................................................................39
SECTION 5.8 Exchange Agreements; Counterparty Exchange Payments; Issuer
Exchange Payments.......................................................................41
SECTION 5.9 Termination.............................................................................43
ARTICLE VI
COVENANTS TO SECURE NOTES
SECTION 6.1 Administration of the Program...........................................................44
SECTION 6.2 Contracts of Guarantee..................................................................44
SECTION 6.3 Acquisition, Collection and Assignment of Student Loans; Compliance
with Law................................................................................45
SECTION 6.4 Enforcement of Financed Student Loans...................................................45
SECTION 6.5 Enforcement of Master Servicing Agreement and Servicing Agreements;
Removal of Servicer.....................................................................45
SECTION 6.6 Enforcement of Purchase Agreements......................................................46
SECTION 6.7 Books of Account; Annual Audit..........................................................46
SECTION 6.8 Punctual Payment of Notes...............................................................47
SECTION 6.9 Further Assurances......................................................................47
SECTION 6.10 Protection of Security.................................................................48
SECTION 6.11 No Encumbrances........................................................................48
SECTION 6.12 Compliance with Indenture..............................................................49
SECTION 6.13 Limitation on Program Operating Expenses...............................................49
SECTION 6.14 Notice of Additional Guarantee Agencies or Servicers...................................49
SECTION 6.15 Issuer to Furnish Indenture Trustee Names and Addresses of Holders. ...................49
SECTION 6.16 Undertaking for Costs..................................................................50
ARTICLE VII
CONCERNING THE INDENTURE TRUSTEE
SECTION 7.1 Appointment of, Acceptance by, and Duties of Indenture Trustee;
Qualification; Resignation; Removal; Successor..........................................51
SECTION 7.2 Appointment of Co-Indenture Trustee.....................................................54
SECTION 7.3 Certain Rights and Obligations of the Indenture Trustee.................................55
SECTION 7.4 Evidence of Compliance with Conditions Precedent; Examination of
Evidence; Evidence of Rights of Holders.................................................57
SECTION 7.5 Proofs of Claims and Other Papers and Documents.........................................58
SECTION 7.6 Dealing with the Issuer.................................................................58
SECTION 7.7 Fees and Reimbursement of Indenture Trustee.............................................59
SECTION 7.8 Fees and Reimbursements of Each Eligible Lender Trustee.................................59
</TABLE>
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<PAGE> 5
<TABLE>
<CAPTION>
<S> <C>
SECTION 7.9 Covenants of Indenture Trustee Pursuant to Higher Education Act............................60
SECTION 7.10 Statements and Reports by Indenture Trustee of Funds and Accounts and
Other Matters.............................................................................60
SECTION 7.11 Additional Authenticating Agent...........................................................62
SECTION 7.12 Notice to Rating Agencies.................................................................62
SECTION 7.13 Indenture Trustee Not Liable for Acts of the Issuer; No Representations
by Indenture Trustee......................................................................62
SECTION 7.14 Indenture Trustee Not Responsible for Calculation Agent...................................63
SECTION 7.15 Indemnification of the Indenture Trustee and each Eligible Lender
Trustee...................................................................................63
SECTION 7.16 Intervention by the Indenture Trustee.....................................................63
SECTION 7.17 Preferential Collection of Claims Against Issuer..........................................64
SECTION 7.18 Preservation of Information; Communication to Holders.....................................64
SECTION 7.19 Survival of Certain Provisions of the Indenture...........................................64
ARTICLE VIII
DEFAULTS AND REMEDIES
SECTION 8.1 Events of Default..........................................................................65
SECTION 8.2 Inspection of Books and Records............................................................68
SECTION 8.3 Application of Moneys......................................................................68
SECTION 8.4 Suits at Law or in Equity; Direction of Action by Holders..................................71
SECTION 8.5 Suits by Individual Holders or an Exchange Counterparty....................................72
SECTION 8.6 Remedies Not Exclusive.....................................................................73
SECTION 8.7 Waivers of Default.........................................................................73
SECTION 8.8 Notice of Events of Default................................................................74
SECTION 8.9 Computations...............................................................................74
SECTION 8.10 Article Subject to Certain Provisions.....................................................74
ARTICLE IX
AMENDING AND SUPPLEMENTING OF INDENTURE
SECTION 9.1 Amending and Supplementing of Indenture Without Consent of Holders.........................75
SECTION 9.2 Amendment of Indenture with Consent of Holders and Exchange
Counterparties.............................................................................76
SECTION 9.3 Effectiveness of Supplemental Indenture....................................................77
SECTION 9.4 Supplemental Indenture Affecting Indenture Trustee.........................................77
SECTION 9.5 Supplemental Indentures Affecting Certain Requirements of the Higher
Education Act..............................................................................77
ARTICLE X
DEFEASANCE; MONEYS HELD FOR PAYMENT OF DEFEASED NOTES
SECTION 10.1 Trust Irrevocable.........................................................................78
SECTION 10.2 Discharge of Liens and Pledges; Notes No Longer Outstanding and
Deemed to Be Paid.........................................................................78
</TABLE>
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<TABLE>
<CAPTION>
<S> <C>
SECTION 10.3 Notes Not Presented for Payment When Due; Moneys Held for the Notes
after Due Date Thereof.............................................................80
ARTICLE XI
MEETINGS OF HOLDERS
SECTION 11.1 Purposes of Meetings...............................................................82
SECTION 11.2 Call of Meetings; Place of Meetings................................................82
SECTION 11.3 Meetings; Regulations of the Indenture Trustee.....................................83
SECTION 11.4 Voting; Speaking at Meeting; Record of Meeting.....................................83
SECTION 11.5 Miscellaneous......................................................................84
ARTICLE XII
MISCELLANEOUS
SECTION 12.1 Benefits of Indenture Limited to Issuer, Eligible Lender Trustees,
Indenture Trustee, Exchange Counterparty and Holders...............................85
SECTION 12.2 Effect of Legal Holidays...........................................................85
SECTION 12.3 Partial Invalidity.................................................................85
SECTION 12.4 Notices............................................................................85
SECTION 12.5 Law and Place of Enforcement of Indenture..........................................86
SECTION 12.6 No Recourse Against Directors, Officers or Employees of the Issuer.................86
SECTION 12.7 Cross-Indemnification..............................................................86
SECTION 12.8 Suspension of Mail.................................................................87
SECTION 12.9 Opinion as to Trust Estate.........................................................87
SECTION 12.10 Conflict with Trust Indenture Act.................................................87
SECTION 12.11 Effect of Article and Section Headings and Table of Contents......................88
SECTION 12.12 Execution of Counterparts. .......................................................88
</TABLE>
SCHEDULE I SCHEDULE OF APPROVED GUARANTEE AGENCIES
SCHEDULE II SCHEDULE OF APPROVED SERVICERS AND SERVICING AGREEMENTS
EXHIBIT A STUDENT LOAN ACQUISITION CERTIFICATE
EXHIBIT B UPDATING STUDENT LOAN ACQUISITION CERTIFICATE
vi
<PAGE> 7
THIS INDENTURE OF TRUST, dated as of October 1, 1999, as
hereafter amended or supplemented by Supplemental Indentures (the "Base
Indenture"), by and among STUDENT LOAN FUNDING 1999-A/B TRUST, a common law (as
opposed to statutory) trust created under the laws of the State of Delaware (the
"Issuer"), by FIRSTAR BANK, NATIONAL ASSOCIATION, a national banking association
duly organized and existing under the laws of the United States, having its
principal corporate trust office in Cincinnati, Ohio, not in its individual
capacity, but solely as co-owner trustee of the Issuer (the "Co-Owner Trustee"),
FIRSTAR BANK, NATIONAL ASSOCIATION, a national banking association duly
organized and existing under the laws of the United states, having its principal
corporate trust offices in Cincinnati, Ohio, not in its individual capacity, but
solely as the eligible lender trustee on behalf of the Issuer (the "Initial
Co-Owner Eligible Lender Trustee") and FIRSTAR BANK, NATIONAL ASSOCIATION, a
national banking association duly organized and existing under the laws of the
United States, having its principal corporate trust office in Cincinnati, Ohio
and being qualified to accept and administer the trusts hereby created (the
"Indenture Trustee"), with the capitalized words and terms used in the recitals
and granting clauses of this Indenture as defined words and terms and not
otherwise defined therein are being used as defined in Section 1.1 hereof
(References to the name "Student Loan Funding 1999-A/B Trust" or to the terms
"Issuer" or "Delaware Trust" in this Indenture, including the Schedules and
Exhibits attached hereto and made a part hereof, shall mean the Co-Owner
Trustee, not in its individual capacity, but solely as Co-Owner Trustee of the
Issuer on behalf of the Issuer);
WITNESSETH:
WHEREAS, the Issuer is authorized by the applicable provisions
of the laws of the United States and the State of Delaware and by the Trust
Agreement, dated as of August 1, 1999 (the "Trust Agreement"), among Student
Loan Funding Riverfront LLC (the "Depositor"), Firstar Bank, National
Association, not in its individual capacity, but solely as the eligible lender
trustee on behalf of the Depositor (the "Depositor Eligible Lender Trustee"),
the Delaware Trustee (as defined therein), the Co-Owner Trustee and the Initial
Co-Owner Eligible Lender Trustee, to acquire directly, or indirectly through an
Eligible Lender Trustee, student loan notes incurred under the Higher Education
Act, and to finance and refinance the acquisition directly, or indirectly
through an Eligible Lender Trustee, of such student loan notes by the issuance
of notes and other evidences of indebtedness of the Issuer;
WHEREAS, the Issuer has determined to provide under this Base
Indenture and the Terms Supplement (collectively, the "Indenture") for the
issuance in Series of (i) its Student Loan Senior Auction Rate Callable
Asset-Backed Notes, Series 1999A (the "Senior Notes") and (ii) its Student Loan
Subordinate Auction Rate Callable Asset-Backed Notes, Series 1999B (the
"Subordinate Notes" and collectively with the Senior Notes, the "Notes");
WHEREAS, pursuant to the Transfer and Sale Agreement, the
Depositor and the Depositor Eligible Lender Trustee have sold, transferred and
assigned all of the Transferred Assets to the Issuer and the Initial Co-Owner
Eligible Lender Trustee;
WHEREAS, the Issuer, the Initial Eligible Lender Trustee and
the Indenture Trustee desire to execute and deliver this Indenture in order to
confirm and declare the terms and conditions upon which the Notes will be
secured and to secure payment of the principal thereof and interest and any
Carryover Interest thereon; and
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NOW THEREFORE, THIS INDENTURE OF TRUST WITNESSETH:
That (a)(i) in order to secure (A) the payment of the fees and
expenses of the Indenture Trustee hereunder in accordance with the provisions of
this Indenture and (B) the payment of the fees and expenses of each Eligible
Lender Trustee hereunder in accordance with the provisions of this Indenture;
and (ii) in order to secure (A) the payment of the principal of and interest and
any Carryover Interest on, the Senior Notes according to their respective tenor,
purport and effect and (B) the payment of any Senior Issuer Exchange Payment and
the performance and observance of all covenants and conditions contained in any
Senior Exchange Agreement; and (iii) in order to secure (A) the payment of the
principal of and interest and any Carryover Interest on the Subordinate Notes
according to their respective tenor, purport and effect and (B) the payment of
any Subordinate Issuer Exchange Payment and the performance and observance of
all covenants and conditions contained in any Subordinate Exchange Agreement;
and (iv) in order to secure the performance and observance of all the covenants
and conditions contained in this Indenture, in the Notes and in any Exchange
Agreement; (b) for and in consideration of (i) the mutual covenants contained in
this Indenture, (ii) the acceptance by the Indenture Trustee of the trusts
hereby created, and (iii) the execution and delivery of any Exchange Agreement
by the Issuer and an Exchange Counterparty, and the acknowledgment thereof by
the Indenture Trustee; (c) each of the Issuer and the Initial Co-Owner Eligible
Lender Trustee has executed and delivered this Indenture and by these presents
does hereby convey, transfer, assign, pledge, and grant a valid and binding lien
on and a security interest in, unto the Indenture Trustee, its successor or
successors and its or their assigns forever, (i) for the benefit of the
Indenture Trustee and each Eligible Lender Trustee with respect to their
respective fees and expenses, all rights, title and interest of the Issuer and
the Initial Co-Owner Eligible Lender Trustee in and to (A) the Trust Estate and
(B) the Transfer and Sale Agreement, including, all other General Intangibles of
the Issuer and the Initial Co-Owner Eligible Lender Trustee related to the
Transfer and Sale Agreement, whether now owned or hereafter acquired, and all
other rights hereinafter granted for the further securing of the fees and
expenses of the Indenture Trustee, each Eligible Lender Trustee; (ii) for the
equal and ratable benefit (except as otherwise provided in Section 8.3 hereof)
of the Holders of the Senior Notes, all rights, title and interest of the Issuer
and the Initial Co-Owner Eligible Lender Trustee in and to (A) the Trust Estate
and (B) the Transfer and Sale Agreement, including, all other General
Intangibles of the Issuer and the Initial Co-Owner Eligible Lender Trustee
related to the Transfer and Sale Agreement, whether now owned or hereafter
acquired, and all other rights hereinafter granted for the further securing of
the Senior Notes; and (iii) for the equal and ratable benefit (except as
otherwise provided in Section 8.3 hereof) of a Senior Exchange Counterparty, if
any, on a parity with Holders of the Senior Notes, all rights, title and
interest of the Issuer and the Initial Co-Owner Eligible Lender Trustee in and
to (A) the Trust Estate and (B) the Transfer and Sale Agreement, including, all
other General Intangibles of the Issuer and the Initial Co-Owner Eligible Lender
Trustee related to the Transfer and Sale Agreement, whether now owned or
hereafter acquired, and all other rights hereinafter granted for the further
securing of any Senior Exchange Agreement; and (iv) for the equal and ratable
benefit (except as otherwise provided in Section 8.3 hereof) of the Holders of
the Subordinate Notes, subordinate, however, to the extent provided herein to
(A) that of the Holders of the Senior Notes and (B) that of a Senior Exchange
Counterparty, all rights, title and interest of the Issuer and the Initial
Co-Owner Eligible Lender Trustee in and to (C) the Trust Estate and (D) the
Transfer and Sale Agreement, including, all other General Intangibles of the
Issuer and the Initial Co-Owner Eligible Lender Trustee related to the Transfer
and Sale Agreement, whether now owned or hereafter acquired, and all other
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rights hereinafter granted for the further securing of the Subordinate Notes;
and (v) for the equal and ratable benefit (except as otherwise provided in
Section 8.3 hereof) of any Exchange Counterparty in addition to each Senior
Exchange Counterparty, if any, whether on a parity with the Holders of the
Subordinate Notes and any Subordinate Exchange Counterparty or subordinate to
the Holders of the Senior Notes and any Senior Exchange Counterparty, all
rights, title and interest of the Issuer and the Initial Co-Owner Eligible
Lender Trustee in and to (A) the Trust Estate and (B) the Transfer and Sale
Agreement, including, all other General Intangibles of the Issuer and the
Initial Co-Owner Eligible Lender Trustee related to the Transfer and Sale
Agreement, whether now owned or hereafter acquired, and all other rights
hereinafter granted for the further securing of the Exchange Agreement of such
Exchange Counterparty;
TO HAVE AND TO HOLD the same unto the Indenture Trustee and
its successor or successors and its or their assigns forever;
IN TRUST, NEVERTHELESS, upon the terms and trusts herein set
forth, to secure the payment of the principal of the Notes and the interest and
any Carryover Interest thereon, and to secure the payment of any Issuer Exchange
Payment, and to secure also the observance and performance of all the terms,
provisions, covenants and conditions of this Indenture, and for the equal and
ratable (except as otherwise provided in this Indenture) benefit and security of
all and singular the Holders and any Exchange Counterparty, without preference,
priority or distinction as to lien or otherwise, of any one of such Notes over
any other of such Notes or over any Issuer Exchange Payment or as among
principal and interest and Carryover Interest, or of any one Exchange Agreement
over any other Exchange Agreement or over any Notes, except as otherwise
provided in this Indenture; and it is hereby mutually covenanted and agreed that
the terms and conditions upon which any Exchange Agreement is to be executed,
delivered and accepted by the Issuer and the Exchange Counterparty and
acknowledged by the Indenture Trustee are as set forth in such Exchange
Agreement, and it is hereby further mutually covenanted and agreed that the
terms and conditions upon which such Notes are executed, authenticated, issued,
delivered, secured and accepted by all Persons who shall from time to time be or
become the Holders thereof and upon which any Exchange Agreement is to be
secured, and the trusts and conditions upon which the Trust Estate is to be held
and disbursed, are as set forth in this Indenture:
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ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.1 DEFINITIONS.
Unless the context shall clearly indicate some other meaning
or may otherwise require, the terms defined in this Section 1.1 shall, for all
purposes of this Indenture and of any indenture or other instrument amendatory
hereof or supplemental hereto, have the meanings herein specified:
"ACCOUNT" shall mean any of the accounts established by this
Indenture.
The terms "ACQUIRE," "ACQUIRING," or "ACQUISITION" when used
in connection with the acquisition or making, respectively, of Student Loans by
the Issuer or the Indenture Trustee shall mean and specifically include the
acquisition directly, or indirectly through an Eligible Lender Trustee, of such
Student Loans.
"ACQUISITION FUND" shall mean the Fund established by Section
5.3 hereof.
"ADMINISTRATION AGREEMENT" shall mean the administration
agreement, between the Issuer and the Administrator providing for, among other
things, the administration of this Indenture on behalf of the Issuer.
"ADMINISTRATOR" shall mean the administrator, and its
successors or assigns, appointed by the Issuer in the Administration Agreement
to provide for, among other things, the administration of this Indenture on
behalf of the Issuer, such administrator on the Date of Issuance being Student
Loan Funding Resources, Inc., an Ohio for-profit corporation.
"ADVANCES" shall mean deposits to the Trust Estate made by the
Depositor to the Note Payment Account hereunder with respect to anticipated
future collections on the Financed Student Loans.
"ADVERSELY AFFECT" shall mean, when used with respect to any
rating on a Series of Notes, to cause the reduction or withdrawal of such
rating.
"AUTHENTICATING AGENT" shall mean any bank, trust company or
other financial institution appointed by the Issuer as authenticating agent for
the Indenture Trustee hereunder and as depositary under the Authenticating Agent
Agreement, or any successor or successors thereto appointed pursuant to Section
7.11 hereof or pursuant to an Authenticating Agent Agreement, as the case may
be, with respect to such functions collectively or separately provided, however,
that if no Authenticating Agent has been appointed under this Indenture,
provisions relating to the Authenticating Agent shall be read as applying to the
Indenture Trustee.
"AUTHENTICATING AGENT AGREEMENT" shall mean an Authenticating
Agent Agreement among the Issuer, the Indenture Trustee and the Authenticating
Agent, as depositary, or any similar agreement hereafter entered into by the
Issuer with respect to a Series of Notes, in
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<PAGE> 11
each case as originally executed and as from time to time amended or
supplemented in accordance with the terms thereof and with this Indenture.
"AUTHORIZED DENOMINATIONS" shall have the meaning given such
term in the Terms Supplement.
"AUTHORIZED OFFICER" when used with reference to the Issuer
shall mean any vice president, trust officer or other officer of the Co-Owner
Trustee authorized to sign the document or take the action in question.
"AVAILABLE FUNDS" shall mean, with respect to any Collection
Period, the excess of (a) the sum, without duplication, of the following amounts
with respect to such Collection Period: (i) all collections received by the
Indenture Trustee on the Financed Student Loans (including any Guarantee
Payments received with respect to the Financed Student Loans) during such
Collection Period; (ii) any payments, including, without limitation, Interest
Subsidy Payments and Special Allowance Payments, received by each Eligible
Lender Trustee during such Collection Period with respect to Financed Student
Loans; (iii) all proceeds from any sales of Financed Student Loans during such
Collection Period; (iv) any payments of or with respect to interest received by
the Indenture Trustee during such Collection Period with respect to a Financed
Student Loan for which a Realized Loss was previously allocated; (v) the
aggregate Purchase Amounts received for those Financed Student Loans purchased
by the Indenture Trustee during the related Collection Period; (vi) the
aggregate amounts, if any, received from the Issuer or the Indenture Trustee as
reimbursement of non-guaranteed or uninsured interest amounts (which shall not
include, with respect to Financed Student Loans, the portion of such interest
amounts for which the Guarantee Agency did not have an obligation to make a
Guarantee Payment), or lost Interest Subsidy Payments and Special Allowance
Payments, with respect to the Financed Student Loans; (vii) Counterparty
Exchange Payments, (viii) Advances received and (ix) Investment Earnings for
such Collection Period OVER (b) amounts received by the Issuer in connection
with balance reconciliations required by virtue of Student Loan consolidations
for such Collection Period; provided, however, that Available Funds shall
exclude (1) all payments and proceeds of any Financed Student Loans the Purchase
Amount of which has been included in Available Funds for a prior Collection
Period, which payments and proceeds shall be paid to the Issuer, (2) amounts
used to reimburse the Depositor for Advances or any other amounts advanced by
the Depositor on a voluntary basis with respect to Guarantee Payments or
Interest Subsidy Payments applied for but not received as of the end of the
Collection Period immediately preceding the date such Advance is made, and (3)
amounts which are paid to the Issuer pursuant to the Indenture.
"BASE INDENTURE" shall mean this Indenture of Trust, dated as
of October 1, 1999, exclusive of the Terms Supplement but as from time to time
amended or supplemented by Supplemental Indentures.
"BOOK-ENTRY SYSTEM" shall have the meaning given such term in
the Terms Supplement.
"BUSINESS DAY" shall mean any day on which the Indenture
Trustee and the Authenticating Agent, if any, at their respective addresses set
forth in or for purposes of this
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Indenture, are open for commercial banking business and on which the New York
Stock Exchange is open.
"CALCULATION AGENT" shall have the meaning given such term in
the Terms Supplement.
"CALCULATION AGENT AGREEMENT" shall have the meaning given
such term in the Terms Supplement.
"CAPITALIZED INTEREST ACCOUNT" shall mean the Account so
designated and established in the Collection Fund by Section 5.5.3 hereof.
"CARRYOVER INTEREST" shall mean the difference between the
interest that would have accrued on a Series of Notes at the Formula Rate during
a Collection Period and the interest accrued at the Net Loan Rate during such
Collection Period, together with interest thereon at the Formula Rate from the
Distribution Date on which such Carryover Interest is due until paid, but in no
event greater than the maximum rate permitted by law.
"CASH FLOW STATEMENT" shall mean a report or reports prepared
by or at the direction of the Issuer with respect to the period covered by the
Cash Flow Statement, which period shall extend from the date of the Cash Flow
Statement to the latest maturity of the Notes then Outstanding, showing, (i) all
Available Funds expected to be received during such period, (ii) the application
of all such Available Funds in accordance with this Indenture, (iii) the
resulting periodic balances and Parity Percentages, and (iv) that under all
assumptions and scenarios used for the cash flows accompanying such Cash Flow
Statement, (a) anticipated Available Funds will be at least sufficient to pay
the principal of and interest on the Notes when due and all other amounts
payable under this Indenture when due and (b) a Parity Percentage of at least
101% will be maintained at all times, including, without limitation, on each
Distribution Date.
"CERTIFICATE", "DIRECTION", "INSTRUCTION", "ORDER", "REQUEST"
or "REQUISITION" of the Issuer, as the case may be, shall mean, respectively, a
certificate, direction, instruction, order, request or requisition which shall,
unless otherwise specifically provided herein, be in writing and which is signed
in the name of the Issuer by an Authorized Officer.
"COLLECTION ACCOUNT" shall mean the Account so designated and
established in the Collection Fund by Section 5.5 hereof.
"COLLECTION FUND" shall mean the Fund established by Section
5.5 hereof.
"COLLECTION PERIOD" shall have the meaning given such term in
the Terms Supplement.
"COMMISSION" shall mean 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 after the execution of this
Indenture 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.
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"CONSOLIDATION LOANS" shall mean Student Loans governed by
Section 428C of the Higher Education Act which are Financed by the Issuer, but
excluding any such loans which are made by a Seller and purchased by the Issuer.
"CONTRACT OF GUARANTEE" shall mean a contract between a
Guarantee Agency and a Lender providing for, or a certificate or other evidence
of, the Guarantee of Student Loans.
"CO-OWNER TRUSTEE" shall mean Firstar Bank, National
Association, not in its individual capacity, but solely as co-owner trustee of
the Delaware Trust.
"COSTS OF ISSUANCE" shall mean all items of expense allocable
to establishment of the Program and the authorization, issuance, sale and
delivery of the related Notes, or any obligations of the Issuer the proceeds of
which are used in whole or in any part directly, or indirectly through an
Eligible Lender Trustee, to acquire Financed Student Loans under this Indenture,
including without limitation costs of planning and feasibility studies, costs of
obtaining governmental registrations, qualifications and regulatory rulings and
approvals, costs of financial advisory, legal, accounting and management
services and services of other consultants and professionals and related
charges, fees and disbursements, costs of preparation and reproduction of
documents, costs of preparation and printing of any offering document relating
to the Notes, advertising and printing costs, filing and recording fees, any
initial fees and charges of the Indenture Trustee, each Eligible Lender Trustee,
the Calculation Agent, any auction agent, any broker-dealer, any market agent
and any Authenticating Agent, Rating Agency fees, costs of preparation,
execution, transportation and safekeeping of the Notes, and any other costs,
charges or fees in connection with the issuance of the Notes.
"COUNTERPARTY EXCHANGE PAYMENT" shall mean a payment due to
the Issuer from an Exchange Counterparty pursuant to the applicable Exchange
Agreement.
"CUT-OFF DATE" shall mean September 30, 1999, the date on or
after which principal and interest payments on the Financed Student Loans are to
be included in the Trust Estate.
"DATE OF ISSUANCE" shall mean with respect to a Series of
Notes, the date of the initial issuance and delivery of such Series of Notes as
set forth in the definition thereof in the Terms Supplement related to such
Series of Notes.
The term "DAY" shall mean any calendar day, whether or not a
Business Day.
"DELAWARE TRUST" shall mean the common law (as opposed to
statutory) trust created under the laws of the State of Delaware by the Trust
Agreement, dated as of August 1, 1999, among the Depositor, the Co-Owner
Trustee, the Initial Co-Owner Eligible Lender Trustee and the Delaware Trustee
(as defined therein), and designated "Student Loan Funding 1999-A/B Trust";
provided that references to the name "Student Loan Funding 1999-A/B Trust" or to
the term "Delaware Trust" in this Indenture, including the Schedules and
Exhibits attached hereto and made a part hereof, shall mean the Co-Owner
Trustee, not in its individual capacity, but solely as Co-Owner Trustee on
behalf of the Issuer.
"DELAWARE TRUST AGREEMENT" shall mean the Trust Agreement,
dated as of August 1, 1999, among the Depositor, the Delaware Trustee (as
defined therein) and the Co-
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Owner Trustee, and acknowledged and agreed to by the Initial Co-Owner Eligible
Lender Trustee.
"DEPARTMENT OF EDUCATION" shall mean the U.S. Department of
Education.
"DEPOSITOR" shall mean Student Loan Funding Riverfront LLC, a
Delaware limited liability company.
"DEPOSITOR ELIGIBLE LENDER TRUSTEE" shall mean Firstar Bank,
National Association, not in its individual capacity, but solely as the eligible
lender trustee on behalf of the Depositor.
"DEPOSITORY" shall have the meaning given such term in the
Terms Supplement.
"DIRECTING NOTES" shall mean, so long as any Series of Senior
Notes are Outstanding the Senior Notes, and thereafter, the Subordinate Notes.
The phrase "DIRECTLY OR INDIRECTLY" shall mean, with respect
to the making, acquisition or Financing of Student Loans, the making,
acquisition or Financing of Student Loans by the Issuer or by an Eligible Lender
Trustee on behalf of the Issuer, respectively.
"DISTRIBUTION DATE" shall have the meaning given such term in
the Terms Supplement.
"ELIGIBLE INVESTMENTS" shall have the meaning set forth in
Section 5.7 hereof.
"ELIGIBLE LENDER TRUST AGREEMENT" shall mean, collectively,
(i) the Eligible Lender Trust Agreement dated as of October 1, 1999 by and
between the Issuer and the Initial Co-Owner Eligible Lender Trustee, as from
time to time amended or supplemented and (ii) any other eligible lender trust
agreement between the Issuer and an eligible lender trustee holding legal title
to any Financed Student Loans, in each case as originally executed and as from
time to time amended or supplemented.
"ELIGIBLE LENDER TRUSTEE" shall mean (i) the Initial Co-Owner
Eligible Lender Trustee and/or (ii) any other eligible lender trustee under its
respective Eligible Lender Trust Agreement.
"EVENT OF DEFAULT" shall have the meaning set forth in Section
8.1 hereof.
"EXCHANGE AGREEMENT" shall mean an interest rate exchange
agreement between the Issuer and an Exchange Counterparty, as originally
executed and as amended or supplemented, or other interest rate hedge agreement
between the Issuer and an Exchange Counterparty, as originally executed and as
amended or supplemented, which agreement shall be designated as a Senior
Exchange Agreement or a Subordinate Exchange Agreement.
"EXCHANGE COUNTERPARTY" shall mean any Person with whom the
Issuer shall, from time to time, enter into an Exchange Agreement.
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"EXCHANGE COUNTERPARTY GUARANTEE" shall mean a guarantee in
favor of the Issuer given in connection with the execution and delivery of an
Exchange Agreement hereunder, which guarantee shall be designated a Senior
Exchange Counterparty Guarantee or Subordinate Exchange Counterparty Guarantee
consistent with the Exchange Agreement to which it relates.
"EXPECTED INTEREST COLLECTIONS" shall mean, with respect to
any Collection Period, the sum of (i) the amount of interest accrued, net of
amounts required to be paid to the Department of Education or to be repaid to
Guarantee Agencies, with respect to the Financed Student Loans in the Trust
Estate for such Collection Period (whether or not such interest is actually
paid), (ii) all Interest Subsidy Payments and Special Allowance Payments
pursuant to claims submitted for such Collection Period (whether or not actually
received), net of amounts required to be paid to the Department of Education,
with respect to Financed Student Loans in the Trust Estate, to the extent not
included in (i) above, (iii) plus or minus the net of any Counterparty Exchange
Payments less any Issuer Exchange Payments to be made on the related
Distribution Date, and (iv) Investment Earnings on the amounts on deposit
allocable to the Trust Estate with respect to such Collection Period prior to
the related Distribution Date.
"EXPENSE ACCOUNT" shall mean the Account so designated and
established in the Collection Fund by Section 5.5 hereof.
"FFEL PROGRAM" shall mean the Federal Family Education Loan
Program established by the Higher Education Act pursuant to which loans are made
to borrowers pursuant to certain guidelines, and the repayment of such loans is
guaranteed by a Guarantee Agency, and any predecessor or successor program.
"FFELP LOANS" shall mean Student Loans made under the FFEL
Program.
"FINANCED" in the case of Student Loans shall refer to Student
Loans made or acquired directly, or indirectly through an Eligible Lender
Trustee, with the proceeds of the Notes or moneys in the Acquisition Fund or the
Collection Account, or upon the exchange of Student Loans pursuant to Section
5.4 hereof, and included in the Student Loan Portfolio Fund, including, without
limitation, all Student Loans identified on the books of the Issuer by a
designation of Lender Identification Number 829626 and any one or more of the
following: Client Codes 2648 or 2748; Bond ID 1999A; Portfolios TO, TA or TN;
Branch Numbers 10, 11, 12, 13, 14 or 15; Branch Number 2; and portfolio Numbers
852626, 871626, 872626 or 862626; and to "FINANCE" or "FINANCING" in the case of
Loans shall mean to make or acquire or the making or acquisition of,
respectively, directly, or indirectly through an Eligible Lender Trustee,
Student Loans with such moneys or upon any such exchange or transfer.
"FINANCED STUDENT LOANS" shall mean Student Loans which are
Financed and are evidenced solely by promissory notes and applications related
thereto.
"FISCAL YEAR" shall mean the fiscal year of the Issuer, which
is, as of the date of execution and delivery of this Indenture, each
twelve-month period commencing on July 1 and ending on the next succeeding June
30.
"FITCH" shall mean Fitch IBCA, Inc., and its successors and
assigns.
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"FORMULA RATE" shall have the meaning given such term in the
Terms Supplement.
"FUND" shall mean any of the Funds established by this
Indenture.
"GENERAL INTANGIBLES" shall have the meaning given such term
by the Uniform Commercial Code as adopted by the State of Ohio.
"GUARANTEE" or "GUARANTEED" shall mean, with respect to a
Student Loan, the guarantee, by a Guarantee Agency which has entered into a
federal reimbursement agreement and a supplemental federal reimbursement
agreement with the Secretary of Education, of at least ninety-eight percent
(98%), or such lower percentage as may be approved by the Rating Agencies then
rating the Outstanding Notes, of the principal of and accrued interest on such
Student Loan thereafter, and the coverage of such Student Loan by a federal
reimbursement agreement and a supplemental federal reimbursement agreement
providing, among other things, for reimbursement to a Guarantee Agency for
losses incurred by it on defaulted Student Loans guaranteed by such Guarantee
Agency at up to the maximum amount of the principal thereof and accrued interest
thereon provided for in the Higher Education Act.
"GUARANTEE PAYMENT" shall mean any payment made by a Guarantee
Agency pursuant to a Contract of Guarantee in respect of a Financed Student
Loan.
"GUARANTEE AGENCIES" shall mean the agencies set forth on
Schedule I hereto and any other agency, and the successors and assigns of each,
whether a governmental body or private corporation or other entity, approved by
the Rating Agencies then rating the Outstanding Notes and providing a Guarantee
acceptable to the Issuer; provided, however, that no agency set forth on
Schedule I shall be qualified as a Guarantee Agency of a Financed Student Loan
unless an Eligible Lender Trustee or the Issuer, as applicable, and such agency
shall have entered into a guarantee agreement with respect thereto.
"HIGHER EDUCATION ACT" shall mean Title IV, Part B of the
Higher Education Act of 1965, as amended, or any successor federal act, and all
regulations, directives and guidelines promulgated thereunder from time to time.
"HOLDERS" or "Noteholders" shall mean, collectively, the
registered owners of the Notes or the duly authorized attorneys-in-fact,
representatives or assignees of such persons..
"INDENTURE" shall mean this Indenture of Trust, dated as of
October 1, 1999, as supplemented by the Terms Supplement and as from time to
time amended or supplemented by Supplemental Indentures.
"INDENTURE TRUSTEE" shall mean Firstar Bank, National
Association, not in its individual capacity, but solely as trustee under this
Indenture, and any successor or successors thereto which may at any time be
appointed or substituted in its place pursuant to this Indenture.
"INITIAL CO-OWNER ELIGIBLE LENDER TRUSTEE" shall mean Firstar
Bank, National Association, not in its individual capacity, but solely as
eligible lender trustee under the Eligible Lender Trust Agreement.
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"INITIAL DISTRIBUTION DATE" shall mean, as to each Series of
Notes, the date set forth in the definition thereof in the Terms Supplement for
such Series of Notes.
"INITIAL INTEREST DETERMINATION DATE" shall mean, as to each
Series of Notes, the date set forth in the definition thereof in the Terms
Supplement for such Series of Notes.
"INITIAL POOL BALANCE" shall mean the Pool Balance of the
Financed Student Loans as of the Cut-off Date.
"INITIAL PURCHASERS" shall mean Salomon Smith Barney Inc. and
Banc of America Securities LLC.
"INSIDER" shall mean an entity referred to or described in
Section 101(31) of the United States Bankruptcy Code (assuming for this purpose
that the Issuer or any Affiliate of the Issuer, as applicable, is a debtor) and
any limited partner or limited liability company member thereof.
"INTEREST DETERMINATION DATE" shall mean with respect to each
Series of Notes, (i) the Initial Interest Determination Date and thereafter (ii)
the day set forth in the Terms Supplement related to such Series of Notes;
provided, however, that if such day is not a Business Day, then the next
succeeding Business Day.
"INTEREST SUBSIDY PAYMENTS" shall mean the interest subsidy
payments in respect of eligible Student Loans paid by the Secretary of Education
pursuant to Section 428 of the Higher Education Act during the period prior to
the time that such Student Loan enters repayment or during grace or deferment
periods, or similar subsidies authorized from time to time by federal law or
regulation.
"INTERNAL REVENUE CODE" shall mean the Internal Revenue Code
of 1986, as amended, and the regulations promulgated thereunder.
"INVESTMENT EARNINGS" means, with respect to any Distribution
Date, the investment earnings (net of losses and investment expenses) on amounts
on deposit in the Funds and Accounts hereunder to be deposited into the
Collection Fund on or prior to such Distribution Date.
"ISSUER" shall mean the Delaware Trust; provided that
references to the name "Student Loan Funding 1999-A/B Trust" or to the term
"Issuer" in this Indenture, including the Schedules and Exhibits attached hereto
and made a part hereof, shall mean the Co-Owner Trustee, not in its individual
capacity, but solely as Co-Owner Trustee on behalf of the Issuer.
"ISSUER EXCHANGE PAYMENT" shall mean a payment due to an
Exchange Counterparty from the Issuer pursuant to the applicable Exchange
Agreement (excluding, however, payments to an Exchange Counterparty in respect
of any early termination date, as defined in the applicable Exchange Agreement).
"LEGAL FINAL MATURITY" shall mean with respect to a Series of
Notes, the date set forth in the definition thereof in the Terms Supplement
related to such Series of Notes.
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"LENDER" shall mean any "eligible lender" as defined in the
Higher Education Act and qualified to participate as a seller of Student Loans
to the Issuer.
The terms "MAKE" or "MAKING" when used in connection with the
making of Student Loans by the Issuer shall mean and specifically include the
making, directly or indirectly through an Eligible Lender Trustee, of such
Student Loans.
"MASTER SERVICER" shall mean initially Student Loan Funding
Resources, Inc., an Ohio corporation.
"MASTER SERVICING AGREEMENT" shall mean the Master Servicing
Agreement, dated as of October 1, 1999, by and between the Issuer and Master
Servicer, pursuant to which the Master Servicer covenants and agrees to provide
for the servicing of the Financed Student Loans by the Servicers.
The term "MATERIALLY," as used in Article VI hereof, shall
mean any effect which will result in a Holder not being fully and timely paid
principal of and interest on such Holder's Notes.
"MOODY'S" shall mean Moody's Investors Service, Inc., a
Delaware corporation, and its successors and assigns.
"NET LOAN RATE" shall have the meaning given such term in the
Terms Supplement.
"NOTEHOLDER" or "HOLDER OF A NOTE" shall mean any person who
shall be the registered owner of any Note or the duly authorized
attorney-in-fact, representative or assignee of such person.
"NOTE PURCHASE AGREEMENT" shall mean the note purchase
agreement among the Issuer and the Initial Purchasers of the Notes.
"NOTES" shall mean the Senior Notes and the Subordinate Notes.
"OFFICER'S CERTIFICATE" shall mean a document signed by an
Authorized Officer of the Issuer either attesting to or acknowledging the
circumstances, representations or other matters therein stated or set forth or
directing that an action be taken by the person to whom such document is
addressed.
"OUTSTANDING" when used with respect to Notes shall refer to
any Notes executed, authenticated, issued and delivered under this Indenture
other than Notes for the transfer or exchange of or in lieu of which other Notes
shall have been authenticated and delivered by the Indenture Trustee pursuant to
this Indenture and other than Notes which at the time are deemed not to be
Outstanding under this Indenture by reason of the operation and effect of
Section 10.2 hereof or the limitation of Section 8.3 hereof.
"PARITY PERCENTAGE" shall mean, as of any Distribution Date or
other date, the fraction expressed as a percentage, the numerator of which is
the sum, without duplication, of (i) the Pool Balance plus accrued interest
thereon due from borrowers, accrued interest which is
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expected to be capitalized, and accrued Interest Subsidy Payments and Special
Allowance Payments, if any, as of the end of the preceding Collection Period,
and (ii) all amounts on deposit (including any accrued interest thereon) in the
Acquisition Fund, the Collection Fund and the Reserve Fund, if any, as of the
end of such Collection Period (adjusted for payments made on such Distribution
Date) and the denominator of which is the sum of (a) the Outstanding principal
amount of the Notes (after payment thereon on such Distribution Date) and
accrued interest thereon and (b) accrued and unpaid Program Operating Expenses.
"PARITY PERCENTAGE LIMITATION" shall have the meaning given
such term in the Terms Supplement.
"PARITY PERCENTAGE PAYMENT" shall have the meaning given such
term in the Terms Supplement.
"PERSON" or words importing persons shall mean firms,
associations, partnerships, limited liability companies, joint ventures,
societies, estates, trusts, corporations, public or governmental bodies, other
legal entities and natural persons.
"POOL BALANCE" shall mean as of the end of a Collection
Period, an amount equal to the aggregate principal balance of the Financed
Student Loans (including accrued interest thereon capitalized through such date)
as of the end of such Collection Period, after giving effect to the following,
without duplication: (i) all payments in respect of principal received by the
Indenture Trustee during such Collection Period from or on behalf of borrowers
and Guarantee Agencies and, with respect to certain payments on certain Financed
Student Loans, the Secretary of Education and (ii) the principal portion of all
Purchase Amounts received by the Indenture Trustee for such Collection Period.
"PRINCIPAL DISTRIBUTION AMOUNT" shall mean the principal
amount of a Series of Notes calculated to be distributed on a Distribution Date.
"PROGRAM" shall mean the Issuer's or the Depositor's program
of making or Financing Student Loans pursuant to this Indenture.
"PROGRAM EXPENSE REQUIREMENT" shall mean, as of any date of
calculation, such amount as may then be necessary to be accumulated in the
Expense Account for payment, in accordance with Section 5.5.4 hereof, of Program
Operating Expenses due or to become due during the month beginning on the first
day of the next succeeding calendar month, in each case subject to the
limitation provided in Section 6.13 hereof.
"PROGRAM OPERATING EXPENSES" shall mean, with respect to the
Notes, all items of expense allocable to the operation of the Program, including
(i) fees and expenses of and any other amounts payable to the Indenture Trustee
and the Authenticating Agent, if any, and any fees charged by a Depository; (ii)
the fees and expenses of and any other amounts payable to the Calculation Agent,
any auction agent, broker-dealers, any market agent or other agent in connection
with the Notes under their respective agreements; (iii) fees and expenses of and
any other amounts payable to the Servicers, each Eligible Lender Trustee and any
bank providing lock-box or similar services in connection with Financed Student
Loans and Servicing Development Fees; and (iv) the fees and expenses incurred by
or on behalf of the Issuer, including, but not limited to the fees and expenses
of the Master Servicer under the Master
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Servicing Agreement and the Administrator under the Administration Agreement, in
the administration of the Program under the Higher Education Act.
The term "PURCHASE" when used in connection with the purchase
of Student Loans by the Issuer shall mean and specifically include the purchase
directly, or indirectly through an Eligible Lender Trustee, of such Student
Loans.
"PURCHASE AGREEMENTS" shall mean the Student Loan Purchase
Agreements with Sellers, for purposes of the Program (in whole or in part), in
each case as from time to time amended or supplemented in accordance with the
terms thereof and with this Indenture, and in each case only to the extent that
each such Purchase Agreement covers Financed Student Loans.
"PURCHASE AMOUNT" shall mean, as of the end of any Collection
Period, the principal amount of a Financed Student Loan (including any interest
required to be capitalized through such date), together with accrued but unpaid
interest thereon.
"RATING AGENCY" shall mean Moody's and Fitch, as long as they
maintain a rating on the Outstanding Notes, and the successor of either or, if
both no longer exist and have no successors, then any other rating agency then
rating the Outstanding Notes.
"REALIZED LOSS" shall mean, for each Financed Student Loan
submitted to a Guarantee Agency for a Guarantee Payment, the excess, if any, of
(i) the unpaid principal balance of such Financed Student Loan on the date it
was first submitted to a Guarantee Agency for a Guarantee Payment over (ii) all
amounts received on or with respect to principal on such Financed Student Loan
up through the earlier to occur of (A) the date a related Guarantee Payment is
made or (B) the last day of the Collection Period occurring 12 months after the
date the claim for such Guarantee Payment is first denied.
"RECORD DATE" shall have the meaning given such term in the
Terms Supplement.
"REGISTRAR" shall mean the Indenture Trustee, unless and until
a separate Person performing the functions of a registrar is appointed hereunder
pursuant to a Supplemental Indenture.
"RESERVE FUND" shall mean the Fund established by Section 5.2
hereof.
"SECRETARY OF EDUCATION" shall mean the Secretary of
Education, Department of Education of the United States, or any other officer,
board, body, commission or agency succeeding to the functions thereof under the
Higher Education Act.
"SECURITIES ACT" shall mean the United States Securities Act
of 1933, as amended.
"SELLER" shall mean a Lender or other party from which
Depositor purchased or the Issuer is purchasing or has purchased or agreed to
purchase Student Loans pursuant to a Purchase Agreement with such Lender or
other party.
"SENIOR EXCHANGE AGREEMENT" shall mean an Exchange Agreement
on a parity with a Series of Senior Notes and designated a Senior Exchange
Agreement under this Indenture.
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"SENIOR EXCHANGE COUNTERPARTY" shall mean the Exchange
Counterparty under a Senior Exchange Agreement.
"SENIOR EXCHANGE COUNTERPARTY GUARANTEE" shall mean an
Exchange Counterparty Guarantee applicable to a Senior Exchange Agreement.
"SENIOR ISSUER EXCHANGE PAYMENT" shall mean an Issuer Exchange
Payment under a Senior Exchange Agreement.
"SENIOR NOTES" shall mean, collectively, all Series of the
Issuer's Student Loan Senior Auction Rate Callable Asset-Backed Notes designated
in the Terms Supplement as "Series 1999A".
"SENIOR PARITY PERCENTAGE" shall mean, as of any Distribution
Date or other date, the fraction expressed as a percentage, the numerator of
which is the sum, without duplication, of (i) the Pool Balance plus accrued
interest thereon due from borrowers, accrued interest which is expected to be
capitalized, and accrued Interest Subsidy Payments and Special Allowance
Payments, if any, as of the end of the preceding Collection Period and (ii) all
amounts allocable to the Notes on deposit (including any accrued interest
thereon) in the Acquisition Fund, the Collection Fund and the Reserve Fund, if
any, as of the end of such Collection Period (adjusted for payments made on such
Distribution Date) and the denominator of which is the sum of (a) the
Outstanding principal amount of all Senior Notes (after payment thereon on such
Distribution Date), and accrued and unpaid interest thereon, and (b) all accrued
and unpaid Program Operating Expenses.
"SERIES" shall mean a series of Notes to which all the same
terms and conditions apply and which can be identified by its own alpha-numeric
designation (e.g. "A-1") and which is so designated in the Terms Supplement.
"SERIES INTEREST RATE" shall mean as of a given date with
respect to a Series of Notes the rate of interest per annum at which interest
accrues on such Series of Notes on such date.
"SERVICERS" shall mean the organizations set forth on Schedule
II hereto for purposes of the Program providing for the administration,
servicing and collection of Financed Student Loans, as such Schedule II may be
amended and supplemented from time to time with the written approval of each
Rating Agency then rating any Outstanding Notes.
"SERVICING AGREEMENTS" shall mean the Servicing Agreements set
forth on Schedule II hereto with respect to each Servicer therein, in each case
as originally executed and as amended or supplemented from time to time in
accordance with the terms thereof and with this Indenture, but only to the
extent that any such agreement relates to the servicing of Financed Student
Loans.
"SERVICING DEVELOPMENT FEES" shall mean costs, fees and
expenses relating to the development of electronic data information or systems
in connection with the servicing of Financed Student Loans, the establishment of
a servicing center for the servicing of Financed Student Loans, or reserves for
current or future servicing fees for Financed Student Loans; provided, however,
that Servicing Development Fees are payable only with the consent of the
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Rating Agencies then rating any Outstanding Notes, such consent to be evidenced
by written confirmation from each Rating Agency that the payment of such Fees
will not adversely affect the rating of such Rating Agency on the Outstanding
Notes.
"SPECIAL ALLOWANCE PAYMENTS" shall mean special allowance
payments authorized to be made by the Secretary of Education pursuant to Section
438(b) of the Higher Education Act with respect to a Student Loan, or similar
allowances authorized from time to time by Federal law or regulation.
"SPECIFIED RESERVE FUND BALANCE" shall mean on any
Distribution Date a balance in the Reserve Fund equal to the greater of (i) .75%
of the principal balance of the Outstanding Notes on such Distribution Date
after giving effect to payments on such Distribution Date or (ii) $500,000, but
not in excess of the principal balance of the Outstanding Notes.
"STATE" shall mean the State of Ohio.
"STUDENT LOAN PORTFOLIO FUND" shall mean the Fund established
by Section 5.4 hereof.
"STUDENT LOANS" shall mean FFELP Loans (i) which were or will
be originated in the United States or its territories or possessions under and
in accordance with the FFEL Program to or on behalf of a student who has
graduated or is expected to graduate from an accredited institution of higher
education within the meaning of the Higher Education Act, (ii) Guaranteed, (iii)
bearing interest at the maximum interest rate permitted under the Higher
Education Act, or such lesser rate of interest per annum as is approved by the
Rating Agencies after delivery of a Cash Flow Statement including Student Loans
at such lower rate, with respect to the Student Loan in question at the time
such Student Loan was made, (iv) either (a) eligible for Interest Subsidy
Payments or for such other similar payments at the time provided for under said
Act, or (b) governed by Sections 428A or 428B or 428C or 428H of the Higher
Education Act, and (v) eligible for Special Allowance Payments or for such other
similar payments at the time provided for under said Act.
"SUBORDINATE EXCHANGE AGREEMENT" shall mean an Exchange
Agreement which is on a parity with a Series of Subordinate Notes and designated
a Subordinate Exchange Agreement under this Indenture.
"SUBORDINATE EXCHANGE COUNTERPARTY" shall mean the Exchange
Counterparty under a Subordinate Exchange Agreement.
"SUBORDINATE EXCHANGE COUNTERPARTY GUARANTEE" shall mean an
Exchange Counterparty Guarantee applicable to a Subordinate Exchange Agreement.
"SUBORDINATE ISSUER EXCHANGE PAYMENT" shall mean an Issuer
Exchange Payment under a Subordinate Exchange Agreement.
"SUBORDINATE NOTES" shall mean, collectively, all Series of
the Issuer's Student Loan Subordinate Auction Rate Callable Asset-Backed Notes
designated in the Terms Supplement as "Series 1999B".
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"SUPPLEMENTAL INDENTURE" shall mean any supplement to or
amendment of this Indenture (other than the Terms Supplement) entered into among
the Issuer, each Eligible Lender Trustee and the Indenture Trustee pursuant to
and in accordance with the provisions of Article IX hereof.
"TERMS SUPPLEMENT" shall mean the indenture supplemental to
this Base Indenture, dated as of even date with this Base Indenture, among the
Issuer, the Initial Co-Owner Eligible Lender Trustee and the Indenture Trustee,
setting forth the terms and conditions of each Series of Notes to be issued
hereunder.
"TRANSFER AND SALE AGREEMENT" shall mean the Transfer and Sale
Agreement, dated as of October 1, 1999, by and among the Depositor, the
Depositor Eligible Lender Trustee, the Issuer and the Initial Co-Owner Eligible
Lender Trustee.
"TRANSFERRED ASSETS" shall mean all rights of the Depositor
and the Depositor Eligible Lender Trustee in and to the Financed Student Loans,
the Contracts of Guarantee with respect thereto, the Purchase Agreements and the
Servicing Agreements with respect to the Financed Student Loans serviced
thereunder, including all rights of the Depositor under the warranties of each
Seller, Master Servicer or Servicer, as the case may be thereunder.
"TRUST ESTATE" shall mean: (i) all Available Funds, the
balances of all Accounts and Funds, whether derived from proceeds of the sale of
Notes, from Available Funds or from any other source and all rights of the
Issuer and each Eligible Lender Trustee therein and all investment property,
security entitlements and securities accounts (all as defined under the Uniform
Commercial Code as adopted in the State) comprised of the Accounts and Funds and
the balances thereof, including, without limitation, the following Accounts and
Funds maintained with Firstar Bank, National Association, Cincinnati, Ohio:
Account Nos. 12-7801C SLF 99 A/B Trust Note Payment Account, 12-7801G SLF 99 A/B
Trust Reserve Fund, 12-7801H SLF 99 A/B Trust Expense Account, 12-7801K SLF 99
A/B Trust Acquisition Fund, 12-7801KI SLF 99 A/B Trust Capitalized Interest
Account and 12-7801M SLF 99 A/B Trust Collection Account, (ii) all rights of the
Issuer and each Eligible Lender Trustee in and to the Financed Student Loans,
the Contracts of Guarantee with respect thereto, the Eligible Investments, any
Exchange Agreement and any Exchange Counterparty Guarantee, the Purchase
Agreements, the Master Servicing Agreement and the Servicing Agreements with
respect to Financed Student Loans serviced thereunder, including all rights of
the Issuer under the warranties of each Seller, Master Servicer or Servicer, as
the case may be, thereunder, and (iii) any proceeds of the foregoing.
"TRUST INDENTURE ACT" shall mean the Trust Indenture Act of
1939, as amended, and any reference herein to the Trust Indenture Act or a
particular provision thereof shall mean such Act or provision, as the case may
be, as amended or replaced from time to time or as supplemented from time to
time by rules or regulations adopted by the Commission under or in furtherance
of the purposes of such Act or provision, as the case may be.
"VALUE OF ELIGIBLE INVESTMENTS" shall have the following
meaning:
the value of Eligible Investments shall be calculated at the
end of each month as follows:
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(a) as to Eligible Investments the bid and asked prices of
which are published on a regular basis in THE WALL STREET JOURNAL (or, if not
there, then THE NEW YORK TIMES): the average of the bid and asked prices for
such investments so published on or most recently prior to such time of
determination, plus accrued interest, if any;
(b) as to Eligible Investments the bid and asked prices of
which are not published on a regular basis in THE WALL STREET JOURNAL or THE NEW
YORK TIMES: the average bid price at such time of determination for such
investments by any two nationally recognized government securities dealers
(selected by the Indenture Trustee in its absolute discretion) at the time
making a market in such investments or the bid price published by a nationally
recognized pricing service, plus accrued interest, if any;
(c) as to certificates of deposit and bankers acceptances: the
face amount thereof, plus accrued interest, if any; and
(d) as to any investment not specified above: the value
thereof established by prior agreement between the Issuer, the Indenture Trustee
and the Rating Agencies then rating any Outstanding Notes.
SECTION 1.2. USE OF CERTAIN TERMS.
Unless the context clearly indicates otherwise, or may
otherwise require, in this Indenture (i) the term "person" includes a firm,
partnership, trust, association, limited liability company, corporation (public
or private), public body, public agency and a natural person, and shall also
include an executor, administrator, trustee, receiver or other representative;
(ii) the terms "herein", "hereunder", "hereby", "hereto", "hereof" and any
similar terms, refer to this Indenture as a whole and not to any particular
section or subdivision hereof; and (iii) references to specific provisions of
the Ohio Revised Code, the Higher Education Act, the Internal Revenue Code or
any other public law or statute are to such provisions as they may be amended
from time to time. The definitions set forth in Section 1.1 hereof shall include
both the singular and the plural, and any pronoun used herein shall include both
the singular and the plural and shall include all genders.
SECTION 1.3 COMPLIANCE CERTIFICATES AND OPINIONS.
(a) Except as otherwise specifically provided in this
Indenture, upon any application or request by the Issuer to the Indenture
Trustee to take any action under any provision of this Indenture, including,
without limitation, any action relating to authentication and delivery of any
Notes, the release or the release and substitution of property subject to the
lien and security interest of this Indenture or the satisfaction and discharge
of this Indenture, the Issuer shall furnish (i) a Certificate stating that all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with, (ii) an opinion of counsel stating that
in the opinion of such counsel all such conditions precedent, if any, have been
complied with and (iii) if required by the Trust Indenture Act, a certificate
from a firm of independent certified public accountants meeting the applicable
requirements of this Section 1.3, 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, no additional
certificate or opinion need be furnished. Every certificate or opinion with
respect to compliance
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with a condition or covenant provided for in this Indenture shall include: (i) a
statement that each signatory of such certificate or opinion has read or has
caused to be read such covenant or condition and the definitions herein relating
thereto; (ii) a 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; (iii) a statement that, in the opinion of each
such signatory, such signatory has made such examination or investigation as is
necessary to enable such signatory to express an informed opinion as to whether
or not such covenant or condition has been complied with; and (iv) a statement
as to whether, in the opinion of each such signatory, such condition or covenant
has been complied with.
(b) Prior to the deposit of any property or securities with
the Indenture Trustee that is to be made the basis for the release of any
property subject to the lien created by this Indenture, the Issuer shall, in
addition to any obligation imposed in Section 1.3(a) or elsewhere in this
Indenture, furnish to the Indenture Trustee (1) a Certificate certifying or
stating the opinion of each person signing such Certificate as to the fair value
(within 90 days of such deposit) to the Issuer of the property or securities to
be so deposited, (2) an opinion of counsel either stating that, in the opinion
of such counsel, such action has been taken with respect to the recording and
filing of this Indenture and any other requisite documents, and with respect to
the execution and filing of any financing statements and continuation
statements, as are necessary to perfect and make effective the lien and security
interest in favor of the Indenture Trustee, for the benefit of the Indenture
Trustee, created by this Indenture in the property or securities to be so
deposited, and reciting the details of such action, or stating that, in the
opinion of such counsel, no such action is necessary to make such lien and
security interest effective, and (3) evidence that each of the Rating Agencies
then rating any Outstanding Notes have confirmed that such action will not
result in a reduction, qualification or withdrawal of the then-current rating of
any of the Notes.
(c) Whenever the Issuer is required to furnish to the
Indenture Trustee a Certificate certifying or stating the opinion of any signer
thereof as to the matters described in paragraph (b) above, the Issuer shall
also furnish to the Indenture Trustee an Independent Certificate as to the same
matters, if the fair value to the Issuer of the property to be so deposited and
of all other such property made the basis of any such withdrawal or release
since the commencement of the then-current fiscal year of the Issuer, as set
forth in the certificates delivered pursuant to paragraph (b) above and this
paragraph (c), is ten percent (10%) or more of the Outstanding principal amount
of the Notes, but such a certificate need not be furnished with respect to any
property so deposited, if the fair value thereof set forth in the related
Certificate is less than $25,000 or less than one percent (1%) of the
Outstanding principal amount of the Notes.
(d) Other than with respect to any release described in clause
(1) or (2) of paragraph (f) below, whenever any property or securities are to be
released from the lien created by the Indenture, the Issuer shall also furnish
to the Indenture Trustee a Certificate certifying or stating the opinion of each
person signing such Certificate as to the fair value (within 90 days of such
release) of the property or securities proposed to be released and stating that
in the opinion of such person the proposed release will not impair the security
created by this Indenture in contravention of the provisions hereof.
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(e) Whenever the Issuer is required to furnish to the
Indenture Trustee a Certificate certifying or stating the opinion of any signer
thereof as to the matters described in paragraph (d) above, the Issuer shall
also furnish to the Indenture Trustee an Independent Certificate as to the same
matters, if the fair value to the Issuer of the property or securities or of all
other property or securities (other than property described in clauses (1) and
(2) of paragraph (f) below) released from the lien created by this Indenture
since the commencement of the then-current fiscal year of the Issuer, as set
forth in the certificates delivered pursuant to paragraph (d) above and this
paragraph (e), equals ten percent (10%) or more of the Outstanding principal
amount of the Notes, but such a certificate need not be furnished with respect
to any release of property or securities, if the fair value thereof set forth in
the related Certificate is less than $25,000 or less than one percent (1%) of
the Outstanding principal amount of the Notes.
(f) Notwithstanding any other provision of this Section 1.3,
the Issuer may, without compliance with the other provisions of this Section
1.3, (1) collect, liquidate, sell or otherwise dispose of Financed Student Loans
as and to the extent permitted or required by this Indenture, including, without
limitation, Section 5.4 and Section 8.3 hereof, and any Servicing Agreement, and
(2) make cash payments out of the Funds and Accounts as and to the extent
permitted or required by the Indenture.
(g) 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.
(h) 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 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 counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officer of any Servicer or the Issuer, stating
that the information with respect to such factual matters is in the possession
of such Servicer or the Issuer, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to such matters are erroneous.
(i) 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.
(j) Whenever in this Indenture, in connection with any
application or certificate or report to the Indenture Trustee, it is provided
that the Issuer shall deliver any document as a condition of granting such
application, or as evidence of the Issuer's compliance with any term hereof, it
is intended that the truth and accuracy, at the time of the granting of such
application or at the effective date of such certificate or report, as the case
may be, of the facts and opinions stated in such document shall in such case be
conditions precedent to the right of the Issuer to have such application granted
or to the sufficiency of such certificate or report. The
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foregoing, shall not, however, be construed to affect the Indenture Trustee's
right to rely upon the truth and accuracy of any statement or opinion contained
in any such document as provided in Article VII hereof.
(k) Nothing in this Section 1.3 shall be construed either as
requiring the inclusion in this Indenture of provisions that the Issuer shall
furnish to the Indenture Trustee any other evidence of compliance with the
conditions and covenants provided for in this Indenture than the evidence
specified in this Section 1.3, or as preventing the inclusion of such provisions
in this Indenture, if the parties hereto agree.
SECTION 1.4 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the Trust
Indenture Act, the provision is incorporated by reference in and made a part of
this Indenture. The following terms used in the Trust Indenture Act shall have
the following meanings insofar as such terms are incorporated into this
Indenture pursuant to this Section 1.4.
"COMMISSION" shall mean the Commission.
"INDENTURE SECURITIES" shall mean the Notes issued and
Outstanding under this Indenture.
"INDENTURE SECURITY HOLDER" shall mean a Holder.
"INDENTURE TO BE QUALIFIED" shall mean this Indenture.
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" shall mean the
Indenture Trustee.
"OBLIGOR" on the indenture securities shall mean the Issuer
and any other obligor on the indenture securities.
All other terms from the Trust Indenture Act used in this
Indenture that are defined by the Trust Indenture Act, defined by reference in
the Trust Indenture Act to another statute or defined by Commission rule shall
have the meaning assigned to them by such definition in the Trust Indenture Act.
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ARTICLE II
AUTHORIZATION, TERMS AND PROVISIONS OF NOTES
SECTION 2.1 AUTHORIZATION OF NOTES; TERMS OF NOTES IN GENERAL;
NOTES TO CONSTITUTE LIMITED OBLIGATIONS.
Subject to the other terms and conditions set forth in this
Base Indenture or in the Terms Supplement, each Series of Notes issued hereunder
shall be authorized by, shall have the terms set forth in and shall be subject
to the further conditions, if any, of the Terms Supplement which shall be
executed and delivered in connection with the issuance of such Series of Notes.
A Series of Notes may be issued under and secured by this Base
Indenture and a Terms Supplement relating thereto, subject to the conditions
hereinafter provided, for the purpose of (i) making or acquiring Student Loans
and (ii) making deposits to certain of the Funds and Accounts hereunder.
Such Series of Notes shall be executed and authenticated
substantially in the form and manner provided in this Base Indenture with such
changes as may be necessary or appropriate to conform to the provisions of the
Terms Supplement and shall be deposited with the Indenture Trustee for
authentication, but before such Series of Notes shall be authenticated and
delivered by the Indenture Trustee, there shall be filed with the Indenture
Trustee the following:
(a) a certified copy of the resolution of the board of
directors of the Issuer authorizing the issuance of such Series of Notes; and
(b) a fully executed counterpart of the Terms Supplement.
When the documents described above in this Section shall
have been filed with the Indenture Trustee and when such Series of Notes shall
have been executed and authenticated as required by this Base Indenture, the
Indenture Trustee shall deliver such Series of Notes at one time to or upon the
order of the Initial Purchasers, but only upon payment to the Indenture Trustee
of the purchase price of such Series of Notes and the satisfaction of all other
conditions of the Initial Purchasers set forth in the Note Purchase Agreement.
The proceeds of all such Series of Notes issued under the
Indenture shall be paid to the Indenture Trustee for deposit to the credit of
the Funds and Accounts as set forth in the Terms Supplement.
Each Series of Notes shall be limited obligations of the
Issuer payable solely from and secured under this Indenture solely by the Trust
Estate as provided in this Indenture. Each Note shall contain a statement to
that effect.
SECTION 2.2 EXECUTION OF NOTES; VALIDITY OF SIGNATURES.
Each Note and the Indenture Trustee's certificate of
authentication shall be in substantially the form set forth in Exhibits B-1, B-2
or C, as applicable, to the Terms Supplement and may have such letters, numbers
or other marks of identification and such legends of
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endorsements placed thereon as may, consistent herewith, be determined by the
Authorized Officers executing such Notes, as evidenced by their execution of
such Notes. Each such Note shall be executed on behalf of the Issuer by manual
or facsimile signatures of any two Authorized Officers of the Issuer. Each Note
shall be authenticated by the manual signature of an authorized signature of the
Indenture Trustee or the Authenticating Agent.
In case any person who shall have executed, authenticated or
registered any of the Notes, whether manually or by facsimile, shall die or
cease to be the person authorized to execute, authenticate or register the Notes
before the Notes so executed, authenticated or registered by such person shall
have been actually issued and delivered, such Notes shall be valid nevertheless,
and may be issued with the same effect as though the person who had so executed,
authenticated or registered such Notes had not died or ceased to be such
authorized person.
Only such of the Notes as shall bear thereon a certificate of
authentication as described above, manually executed by an authorized signature
of the Indenture Trustee or the Authenticating Agent, shall be valid or
obligatory for any purpose or entitled to the benefits of this Indenture, and
such certificate of authentication shall be conclusive evidence that the Notes
so authenticated have been duly executed, authenticated, delivered and issued
hereunder and are entitled to the benefits of this Indenture.
SECTION 2.3 TRANSFER OF NOTES; EXCHANGE OF NOTES.
Except when Notes are held in a Book-Entry System and subject
to the provisions of this Section 2.3 and Section 2.05 of the Terms Supplement,
any Note may be transferred upon the books of registry maintained pursuant to
Section 2.4 hereof, by the person in whose name it is registered, in person or
by its duly authorized attorney, upon surrender of such Note to the Indenture
Trustee or the Authenticating Agent for cancellation, accompanied by a written
instrument of transfer in the form set forth in Exhibits B-1, B-2 or C, as
applicable, to the Terms Supplement, as applicable, duly executed by the
registered owner in person or by its duly authorized attorney, with signatures
guaranteed, in a manner satisfactory to the Indenture Trustee or the
Authenticating Agent.
Whenever any Note shall be surrendered for transfer, the
Issuer shall execute and the Indenture Trustee or the Authenticating Agent shall
authenticate and deliver, at the principal corporate trust office of the
Indenture Trustee or at the office of the Authenticating Agent (or send by first
class mail to the new Holder or Holders), registered in the name or names of the
transferee or transferees, a new duly executed Note or (to the extent of
Authorized Denominations) two or more new duly executed Notes of the same date,
Series (if applicable) and aggregate principal amount as the Note being
surrendered.
Except when Notes are held in a Book-Entry System, to the
extent of Authorized Denominations, any Note or Notes may be surrendered and
exchanged at the principal corporate trust office of the Indenture Trustee or at
the office of the Authenticating Agent for a Note or Notes of the same date and
Series (if applicable) and of like aggregate principal amount. The Issuer shall
execute and the Indenture Trustee or the Authenticating Agent shall authenticate
and deliver the Notes issued upon such exchange and shall deliver the same at
the principal corporate trust office of the Indenture Trustee or at the office
of the Authenticating Agent (or send the same by first class mail to the Holder
thereof).
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All exchanges and transfers of Notes pursuant to this Section
2.3 shall be made without expense to the Holder of such Notes, except that the
Indenture Trustee or the Authenticating Agent shall require the payment by the
Holder of any Note requesting such transfer or exchange of any tax, fee or other
governmental charge required to be paid with respect to such transfer or
exchange.
All Notes surrendered pursuant to this Section shall be
canceled.
No exchanges or transfers of any Note shall be required to be
made if such Note has been selected for redemption, nor during the seven (7)
days next preceding the date of selection of Notes for redemption.
SECTION 2.4 BOOKS OF REGISTRY.
At all times while any Note remains Outstanding, the Indenture
Trustee shall keep or cause to be kept books of registry for the registration
and transfer of Notes at its principal corporate trust office. Upon presentation
of any Notes to the Indenture Trustee at the principal corporate trust office of
the Indenture Trustee or at the office of the Authenticating Agent, the
Indenture Trustee shall transfer, or the Authenticating Agent shall cause the
Indenture Trustee to transfer, as the case may be, under such reasonable
regulations as the Indenture Trustee may prescribe, such Notes on such books of
registry as hereinabove set forth. Such books of registry shall at all
reasonable times be open for inspection by the Issuer or its duly authorized
agents or representatives.
The Issuer, the Indenture Trustee and the Authenticating Agent
may treat the registered owner of any Note as the absolute owner of such Note
for the purpose of receiving payment of the principal of and interest on such
Note and for all other purposes whatsoever and the Issuer, the Indenture Trustee
and the Authenticating Agent shall not be affected by any notice to the
contrary.
SECTION 2.5 MUTILATED, LOST, STOLEN OR DESTROYED NOTES.
In case any Note shall at any time become mutilated in whole
or in part, or is destroyed, lost or stolen, the Issuer shall cause to be
executed and delivered at the principal corporate trust office of the Indenture
Trustee or at the office of the Authenticating Agent (or send by first class
mail to the Holder thereof at the Holder's request, risk and expense), a new
Note of the same date, Series (if applicable) and principal amount and of like
tenor and effect as the Note so mutilated, destroyed, lost or stolen, in
exchange and substitution for and upon the surrender for cancellation of such
mutilated Note, or in lieu of or in substitution for such destroyed, lost or
stolen Note. In any such event the applicant for the issuance of a substitute
Note shall file with the Indenture Trustee or the Authenticating Agent evidence
or proof satisfactory to the Indenture Trustee or the Authenticating Agent, as
the case may be, of the mutilation, destruction, loss or theft of the original
Note, and proof of ownership thereof, shall furnish the Issuer, the Indenture
Trustee and the Authenticating Agent with security and indemnity satisfactory to
the Issuer and the Indenture Trustee, and shall comply with such other
reasonable rules as the Issuer or the Indenture Trustee may prescribe. Any
duplicate Note issued under the provisions of this Section 2.5 in exchange and
substitution for any mutilated Note or in substitution for any allegedly
destroyed, lost or stolen Note, shall be entitled to the identical
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benefits under this Indenture as was the original Note in lieu of which such
duplicate Note is issued, and shall be entitled to equal and proportionate
benefits with all the other Notes of the same Series issued hereunder. Neither
the Issuer nor the Indenture Trustee shall be required to treat both the
original Note and any duplicate Note as being Outstanding for the purpose of
determining the principal amount of Notes Outstanding hereunder, but both the
original and duplicate Note shall be treated as one and the same.
Notwithstanding the foregoing provisions of this Section 2.5
as to the issuance of duplicate or replacement Notes, if any such mutilated,
destroyed, lost or stolen Note has matured, at the option of the Issuer or the
Indenture Trustee, payment of the amount due thereon may be made without the
issuance of any duplicate or replacement Note upon receipt of like evidence,
indemnity, security and expenses and the surrender for cancellation of any such
mutilated Note and upon such other conditions as the Issuer or the Indenture
Trustee may prescribe.
All mutilated Notes surrendered to the Indenture Trustee or
the Authenticating Agent in substitution for new Notes pursuant to this Section
2.5 shall be canceled by the Indenture Trustee or the Authenticating Agent. The
Authenticating Agent shall deliver any such canceled Notes to the Indenture
Trustee.
All expenses incurred by the Issuer or the Indenture Trustee
or the Authenticating Agent for providing of any duplicate or replacement Note
shall be paid by the registered owner thereof.
SECTION 2.6 DISPOSITION AND DESTRUCTION OF NOTES.
All Notes surrendered to the Indenture Trustee or the
Authenticating Agent for payment, or surrendered to the Indenture Trustee for
transfer or exchange in accordance with Section 2.3 hereof or for substitution
in accordance with Section 2.5 hereof, shall be canceled by the Indenture
Trustee or the Authenticating Agent upon such payment, transfer, exchange or
substitution, as the case may be.
Whenever in this Indenture provision is made for the
cancellation of any Notes, the canceled Notes shall be delivered by the
Indenture Trustee to the Issuer or as it may direct. Upon the written request of
the Issuer, the Indenture Trustee may, however, in lieu of such cancellation and
delivery, destroy such Notes to the extent permitted by law. If any Notes are
destroyed by the Indenture Trustee, the Issuer may require that such destruction
be done in the presence of its representative. If the Indenture Trustee shall
destroy any Notes, it shall deliver a certificate of such destruction to the
Issuer.
SECTION 2.7 FORMS OF NOTES AND INSTRUCTIONS FOR PAYMENT.
The form of each Note and the certificate of authentication
and form of assignment for transfer to be endorsed thereon shall be in
substantially the form set forth in Exhibits B-1, B-2 or C to the Terms
Supplement, with necessary or appropriate variations, omissions or insertions,
as permitted or required by this Indenture. Any instructions to the Indenture
Trustee for payment of interest on the Notes shall be in substantially the form
of Exhibit E to the Terms Supplement, with necessary or appropriate variations,
omissions or insertions, as permitted or required by this Indenture.
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SECTION 2.8 TEMPORARY NOTES.
Until definitive Notes are prepared, the Issuer may execute
and deliver, in lieu of definitive Notes, but subject to the same provisions,
limitations and conditions as the definitive Notes, except as to the
denominations thereof and as to exchangeability, one or more temporary Notes,
substantially of the tenor of the definitive Notes in lieu of which such
temporary Notes are issued, in Authorized Denominations, and with such
omissions, insertions and variations as may be appropriate to temporary Notes.
Until so exchanged, the temporary Notes shall in all respects be entitled to the
same benefits and security as definitive Notes issued pursuant to this
Indenture. All temporary Notes surrendered in exchange for definitive Notes
shall be forthwith canceled by the Indenture Trustee.
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ARTICLE III
[Reserved]
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ARTICLE IV
REDEMPTION OF THE NOTES
SECTION 4.1 REDEMPTION OF NOTES IN GENERAL.
The Notes shall be subject to redemption prior to their Legal
Final Maturity only upon the terms and conditions, including without limitation
prior written notice of such redemption to the Holders of the Notes, and at the
redemption price or prices, as are set forth in the Terms Supplement.
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ARTICLE V
DISPOSITION OF PROCEEDS;
ESTABLISHMENT OF FUNDS AND ACCOUNTS;
APPLICATION OF AVAILABLE FUNDS
SECTION 5.1 DISPOSITION OF PROCEEDS OF THE NOTES.
All proceeds of the issuance and sale of the Notes hereunder
shall be deposited with the Indenture Trustee on the Date of Issuance, and the
Indenture Trustee shall apply such proceeds in accordance with the terms and
provisions of Article IV of the Terms Supplement.
SECTION 5.2 RESERVE FUND.
There is established hereunder a Fund, held by the Indenture
Trustee and designated the "Reserve Fund". The moneys in the Reserve Fund shall
be invested in Eligible Investments as provided in Section 5.7 hereof. Any
income or earnings on such moneys shall be credited to the Collection Account in
the Collection Fund.
To the extent necessary or appropriate, the Issuer and the
Indenture Trustee may establish Accounts within the Reserve Fund and subaccounts
within such Accounts established under this Section.
At any time the balance of the Reserve Fund is below its
Specified Reserve Fund Balance, the Indenture Trustee shall restore the Reserve
Fund to its Specified Reserve Fund Balance by transfers on the first Business
Day of the next succeeding calendar month from the Collection Account after
making therefrom all prior distributions on such first Business Day of such
calendar month pursuant to Section 5.5.1 hereof and Article IV of the Terms
Supplement.
If the full amount required to restore the Reserve Fund to its
Specified Reserve Fund Balance is not available in the Collection Account on the
such Business Day of the next succeeding calendar month, the Indenture Trustee
shall continue to transfer funds in such order of priority from the Collection
Account as they become available and in accordance with the instructions for
transfers from such Account pursuant to Section 5.5.1 hereof and Article IV of
the Terms Supplement until the deficiency in the Reserve Fund has been
eliminated. If the Indenture Trustee transferred amounts from the Reserve Fund
to cover a Realized Loss on a Financed Student Loan, the Indenture Trustee shall
deposit any subsequent payments of principal received on or with respect to such
Financed Student Loan into the Reserve Fund.
On the first Business Day of each calendar month, the
Indenture Trustee shall transfer any excess in the Reserve Fund over the
Specified Reserve Fund Balance to the Collection Account. After the transfer of
any such excess balance, the Reserve Fund shall be used solely for the following
purposes in the following order of priority:
FIRST, to make up any deficiency in the Expense Account immediately
following the transfer of moneys into such Account pursuant to
Section 5.5.1 hereof;
SECOND, to increase the amount in the Note Payment Account, following the
transfer of moneys into such Account pursuant to Section 5.5.1
hereof and Article IV of the
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Terms Supplement, to the amount required to pay interest on the
Notes and any related Issuer Exchange Payment pursuant to Section
5.5.2 hereof (other than (i) Carryover Interest or (ii) interest
on the Subordinate Notes or any Subordinate Issuer Exchange
Payment when the payment of such interest or Subordinate Issuer
Exchange Payment is deferred pursuant to Section 5.5.1 hereof and
Article IV of the Terms Supplement) on any Distribution Date or
on any other date on which interest is due upon redemption or
payment of the Notes or on any other date on which any related
Issuer Exchange Payment is due and payable (other than any
Subordinate Issuer Exchange Payment when the payment of such
Subordinate Issuer Exchange Payment is deferred pursuant to
Section 5.5.1 hereof and Article IV of the Terms Supplement), by
transfer and deposit by the Indenture Trustee to the credit of
the Note Payment Account on any such date; and
THIRD, to provide for payment of the principal of any Series of Notes at
their Legal Final Maturity thereof or for the payment of the
principal of such Series of Notes being redeemed in whole
pursuant to the Terms Supplement by transfer and deposit by the
Indenture Trustee to the credit of the Note Payment Account on
the Legal Final Maturity of such Series of Notes or the date of
any such redemption, as the case may be.
SECTION 5.3 ACQUISITION FUND.
There is established hereunder a Fund, held by the Indenture
Trustee and designated the "Acquisition Fund".
To the extent necessary or appropriate, the Issuer and the
Indenture Trustee may establish Accounts within the Acquisition Fund and
subaccounts within such Accounts established under this Section.
The Indenture Trustee shall deposit to the credit of the
Acquisition Fund the amount required by the Terms Supplement.
The Acquisition Fund and the Accounts therein shall be applied
by the Indenture Trustee for the Financing directly, or indirectly through an
Eligible Lender Trustee, of Student Loans from Sellers. The Financing directly,
or indirectly through an Eligible Lender Trustee, of Student Loans from Sellers,
from the Issuer and/or from the indenture trustee under other financing
documents to which the Issuer is a party with moneys representing amounts
deposited in the Acquisition Fund (or any Accounts therein) shall be governed by
the provisions of Section 5.3.1 below.
SECTION 5.3.1 FINANCING OF STUDENT LOANS.
The moneys representing amounts deposited to the Acquisition
Fund (or any Accounts therein) pursuant to the Terms Supplement to be applied
for the Financing directly, or indirectly through an Eligible Lender Trustee, of
Student Loans shall be (i) in the case of Student Loans that have been fully
disbursed, the full remaining unpaid principal amount of such Student Loans or
(ii) in the case of Student Loans that have not been fully disbursed, the unpaid
principal amount of such Student Loans that has been disbursed to the borrower
prior to its Financing hereunder, plus, in each case, the amount of accrued and
unpaid interest on such Student Loans
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payable by the borrowers in respect thereof, less a discount or plus a premium,
and, when directed by the Issuer, less any accrued but unpaid interest on such
Student Loans, and plus reasonable transfer fees payable to or on behalf of the
Sellers with respect to such Student Loans pursuant to the applicable Purchase
Agreements, and plus any interest paid by the Indenture Trustee to a Seller at
the direction of the Issuer on the amount of principal and accrued interest on
such Student Loans being Financed, directly or indirectly, from the date of
transfer of such Student Loans until the date funds are actually paid to such
Seller at a rate of interest not to exceed the current yield on funds in the
Expense Account, in any case not exceeding the amount permitted by law. Such
moneys shall be paid to such Sellers upon receipt by the Indenture Trustee of a
Student Loan Acquisition Certificate of the Issuer, in the form of Exhibit A
hereto, together with all documents and certificates required thereby, if any,
with respect to such Student Loans. Within ten (10) Business Days after the
disbursement of moneys from the Acquisition Fund (or any Account therein), the
Issuer shall deliver to the Indenture Trustee an Updating Student Loan
Acquisition Certificate in the form of Exhibit B hereto. Any amount refunded by
the Seller in a loan purchase transaction shall be deposited by the Indenture
Trustee in the Collection Account.
Upon request by the Issuer, the Acquisition Fund may also be
applied by the Indenture Trustee for the acquisition directly, or indirectly
through an Eligible Lender Trustee, of Student Loans from the indenture trustee
under another indenture of trust between the Depositor or its affiliates and
such indenture trustee or from the Issuer, the Depositor or its affiliates for
Student Loans financed by the Issuer, the Depositor or its affiliates with funds
not subject to an indenture of trust, in either case at a price not in excess of
the full remaining unpaid principal amount of such Student Loans, plus the
amount of accrued and unpaid interest on such Student Loans payable by the
obligors in respect thereof, plus any unamortized premium and plus reasonable
transfer fees not exceeding the amount permitted by law, which price shall be
payable upon receipt of Student Loan Acquisition and Updating Student Loan
Acquisition Certificates of the Issuer as set forth above, and otherwise as
provided in said other indenture of trust.
In addition to the amount paid to a Seller, another indenture
trustee, the Depositor or the Issuer from the Acquisition Fund (or any Account
therein) with respect to the purchase of a Student Loan that has not been fully
disbursed, the Indenture Trustee shall pay from the Acquisition Fund (or any
Account therein) from which the purchase price of the partially disbursed
Student Loan was paid, to or for the benefit of the borrower of such Student
Loan that is acquired, directly or indirectly, by check mailed by first-class
mail, postage prepaid, or by electronic funds transfer to such borrower or such
borrower's eligible institution, disbursement agent or other Person (including
the Depositor or the Issuer) (as specified in a written certificate of an
Authorized Officer in the form acceptable to the Indenture Trustee (a
"Disbursement Certificate") at the address and on the date set forth in such
Disbursement Certificate the amount certified to it in such Disbursement
Certificate. In each such Disbursement Certificate the Issuer shall further
certify that the amount to be disbursed pursuant to such Disbursement
Certificate represents an amount which, together with any other amounts
previously disbursed by the Seller, the Issuer, the Depositor, other indenture
trustee and/or the Indenture Trustee in connection with such Student Loan, does
not exceed the maximum amount available to or for the benefit of such obligor
from such Student Loan, including all fees payable to the Guarantee Agency and
the Secretary of Education.
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The Student Loans Financed as aforesaid shall be included in
the balances of the Student Loan Portfolio Fund until they shall have been paid
in full or sold, exchanged or otherwise disposed of by the Indenture Trustee in
accordance with Section 5.4 hereof.
SECTION 5.3.2 INVESTMENT OF ACQUISITION FUND; TRANSFER OF
PROCEEDS IN ACQUISITION FUND.
Pending application of moneys in the Acquisition Fund (or any
Account therein) to the foregoing purposes, such moneys shall be invested in
Eligible Investments as provided in Section 5.7 hereof.
Any portion of the moneys in the Acquisition Fund which is
not, or which the Issuer at any time determines cannot for any reason be, used
to Finance Student Loans prior to the date specified in the Terms Supplement
shall, at the written direction of the Issuer and subject to any requirements
set forth in the Terms Supplement, be transferred by the Indenture Trustee to
the Collection Account for the payment of the principal of and interest on the
Notes as provided in the Terms Supplement.
SECTION 5.4 STUDENT LOAN PORTFOLIO FUND; SALE OF STUDENT
LOANS.
There is established hereunder a Fund, held by the Indenture
Trustee and designated the "Student Loan Portfolio Fund."
To the extent necessary or appropriate, the Issuer and the
Indenture Trustee may establish Accounts within the Student Loan Portfolio Fund
and subaccounts within such Accounts established under this Section.
All Financed Student Loans (including, without limitation, any
Student Loans transferred to the Indenture Trustee for deposit under this
Indenture by the indenture trustee under any other indenture of trust between
the Issuer and such indenture trustee) shall be included in the balances of the
Student Loan Portfolio Fund. All principal of, interest on and Special Allowance
Payments or other Available Funds in respect of, the Financed Student Loans
shall be deposited upon receipt to the credit of the Collection Account in the
Collection Fund as provided in Section 5.5 hereof.
Financed Student Loans included in the balances of the Student
Loan Portfolio Fund may be removed therefrom and sold or exchanged by the
Indenture Trustee only in accordance with this Section 5.4 and with Section 8.3
hereof. Nothing in this Indenture shall be deemed to preclude the Servicers from
maintaining possession of the notes evidencing, and other documentation relating
to, Financed Student Loans on behalf of the Indenture Trustee in accordance with
the Servicing Agreements, provided the same is consistent with the creation and
maintenance of the first lien and security interest created by the granting
clause hereof and Section 5.6 hereof and does not impair the perfection of such
security interest.
The Indenture Trustee may (a) at any time and from time to
time deliver Student Loans to the Sellers thereof as and to the extent provided
for in the applicable Purchase Agreements (or pursuant to the Transfer and Sale
Agreement to the Depositor or other purchaser on behalf of the Depositor under
the applicable Purchase Agreements) with respect to rejections and repurchases
of such Student Loans against payment to the Indenture Trustee by the Seller,
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the Depositor or such other purchaser of moneys at least equal to the repurchase
price thereof together with all other amounts payable by the Sellers thereof
under such Purchase Agreements in connection with such rejections or repurchases
or (b) deliver all or any part of the Financed Student Loans against moneys at
least sufficient to defease pursuant to Article X hereof all (but not less than
all) of the Outstanding Notes (provided that such moneys are applied by the
Indenture Trustee immediately after receipt thereof to such defeasance in
accordance with Section 10.2 hereof), or (c) following a default on any Financed
Student Loan, remove such Student Loan from the Student Loan Portfolio Fund and
tender it to the Guarantee Agency or the Secretary of Education to the extent
required to collect the benefits of any related Contract of Guarantee in
connection with such default.
The Indenture Trustee may, at any time and from time to time
in accordance with the provisions of the applicable Servicing Agreement, deliver
Financed Student Loans to the Servicer thereof for purchase by such Servicer as
and to the extent required under such Servicing Agreement against payment to the
Indenture Trustee of moneys equal to the purchase price thereof, together with
all other amounts payable by such Servicer thereof, under such Servicing
Agreement.
The Indenture Trustee shall permit the sale of Financed
Student Loans in the Student Loan Portfolio Fund selected by the Issuer only (a)
to avoid an Event of Default or, if an Event of Default has occurred, as may be
required or appropriate pursuant to the provisions of Section 8.3 hereof or (b)
in an exchange of Financed Student Loans pursuant to the provisions of this
Section 5.4. In addition, the Indenture Trustee shall permit the sale of
Financed Student Loans and the removal thereof from the Student Loan Portfolio
Fund in connection with the consolidation of such Student Loans by the student
borrower with another Lender.
Other than in connection with any sale of Financed Student
Loan pursuant to Article III of the Terms Supplement or pursuant to item (b) of
the third preceding paragraph, any Financed Student Loan that is sold pursuant
to this Section 5.4 shall be sold at a price not less than the aggregate unpaid
principal amount thereof plus the amount of accrued and unpaid interest thereon
payable by the student obligors thereof plus late charges, if any, and
unamortized premium thereon determined in accordance with the Issuer's
established accounting policies. The proceeds of the sale of a Financed Student
Loan shall be deposited to the credit of the Collection Account in the
Collection Fund.
The Issuer may, at any time and from time to time, instruct
the Indenture Trustee to exchange Financed Student Loans for other Student Loans
having an aggregate principal amount no less than the aggregate principal amount
of the Financed Student Loans being exchanged, bearing the same or higher rates
of interest, being eligible, after exchange, for the same Special Allowance
Payments, and having the same status, whether interim, grace or payout
(provided, however, that as a result of such exchange the average principal
amount of all of the Student Loans included in Trust Estate shall not be
decreased, the average maturity of all such Student Loans shall not be increased
and no Student Loan shall be Financed which is not at the time authorized under
this Indenture) pursuant to a Certificate, in which the Issuer shall certify
that such exchange will not materially adversely affect the sufficiency of
Available Funds to meet the obligations of the Issuer under this Indenture,
including, without limitation, the payment of principal of and interest on the
Notes. The conditions relating to the acquisition directly, or indirectly
through an Eligible Lender Trustee, of Student Loans and the form of certificate
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required to be received by the Indenture Trustee as set forth in Section 5.3
hereof shall apply to any such exchange to the extent the same may reasonably be
made applicable. All Student Loans acquired directly, or indirectly through an
Eligible Lender Trustee, by the Indenture Trustee as a result of any such
exchange shall be included in the balances of the Student Loan Portfolio Fund.
Any sale, exchange or other disposition pursuant to this
Section 5.4 of Financed Student Loans made under the Higher Education Act shall
be only to or with one or more eligible lenders under the Higher Education Act
so long as the Higher Education Act requires the owner or holder of Student
Loans to be an eligible lender.
SECTION 5.5 COLLECTION FUND.
There is established hereunder a Fund, held by the Indenture
Trustee and designated the "Collection Fund", and established therein (a) the
"Collection Account", (b) the "Note Payment Account", and (c) the "Expense
Account".
To the extent necessary or appropriate, the Issuer and the
Indenture Trustee may establish additional Accounts hereunder, and subaccounts
within any such Accounts established in the Collection Fund under this Section.
The Indenture Trustee shall deposit to the credit of (a) the
Collection Account and (b) the Expense Account in the Collection Fund the
amounts required by the Terms Supplement.
SECTION 5.5.1 COLLECTION ACCOUNT.
There shall be deposited to the Collection Account all amounts
received, whether as principal, interest, Interest Subsidy Payments, Special
Allowance Payments, Guarantee payments, tuition refunds, repurchase payments
paid by Sellers pursuant to the Purchase Agreements or otherwise, in respect of
all Financed Student Loans, interest on all such Financed Student Loans payable
by the borrowers in respect thereof accrued prior to the date of acquisition
thereof by the Indenture Trustee and included in the purchase price thereof paid
by the Indenture Trustee to the Sellers thereof; amounts received as earnings on
or income from Eligible Investments included in the balances of the Funds and
Accounts to the extent provided in Section 5.7 hereof; any Counterparty Exchange
Payments; and proceeds of any sale of Financed Student Loans pursuant to Section
5.4 hereof to the extent required by such Section.
The Issuer shall, and shall cause each Seller and Servicer, in
accordance with the applicable Purchase Agreement or Servicing Agreement, as the
case may be, to transfer all Available Funds received by it to the Indenture
Trustee, and the Indenture Trustee shall, upon receipt of any such Available
Funds, immediately deposit and credit such Available Funds to the Collection
Account.
Payment of rebate fees in respect of Consolidation Loans and
any other amount owed by the Issuer with respect to Financed Student Loans to
the Secretary of Education, any Guarantee Agency, any Servicer or the Indenture
Trustee shall be made by the Indenture Trustee from funds available in the
Collection Account.
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On the first Business Day of each calendar month, the
Indenture Trustee shall transfer from the Collection Account, subject to the
limitations set forth in Section 6.13 hereof, the amounts and in the priority
set forth in Article IV of the Terms Supplement.
SECTION 5.5.2 NOTE PAYMENT ACCOUNT.
On each applicable Distribution Date, following the transfers
to the Note Payment Account set forth in the Terms Supplement, the Indenture
Trustee shall distribute to the Noteholders as of the Record Date and Exchange
Counterparties, if any, the amounts transferred to the Note Payment Account,
together with (i) any amounts received from the Capitalized Interest Account in
the Collection Fund as provided in Section 5.5.3 hereof, (ii) any amounts
therein transferred from the Reserve Fund and (iii) any Advances.
Notwithstanding anything herein or in the Terms Supplement to the contrary, if
on any Distribution Date there are insufficient funds transferred to the Note
Payment Account for payment of any Series 1999A Noteholders' Interest
Distribution Amount, the Indenture Trustee is directed to, and shall apply any
funds already then on deposit in the Note Payment Account for payment of any
Series 1999B Noteholders' Interest Distribution Amount to the payment of such
Series 1999A Noteholders' Interest Distribution Amount.
If the Issuer or an Eligible Lender Trustee on behalf of the
Issuer has applied for a Guarantee Payment from a Guarantee Agency or an
Interest Subsidy Payment or a Special Allowance Payment from the Department of
Education, and the Issuer or such Eligible Lender Trustee, as applicable, has
not received the related payment prior to the end of the Collection Period
immediately preceding the Distribution Date on which such amount would be
required to be distributed as a payment of interest, the Depositor may, no later
than the third Business Day before such Distribution Date, deposit into the Note
Payment Account an amount up to the amount of such payments applied for but not
received (such deposits by the Depositor are referred to herein as "Advances").
Such Advances are recoverable by the Issuer, (i) first, from moneys in the Fund
or Account which such Advance temporarily replaced and (ii) second, from
payments received generally on or with respect to the Financed Student Loans
immediately upon their availability and prior to the use of such moneys for any
of the other purposes permitted under this Indenture. The Depositor shall have
no obligation, legal or otherwise, to make any Advance, and a determination by
the Depositor to make an Advance shall not create any obligation of the
Depositor, legal or otherwise, to make any future Advances.
SECTION 5.5.3 CAPITALIZED INTEREST ACCOUNT. There is
established hereunder an Account in the Collection Fund designated the
"Capitalized Interest Account." The Indenture Trustee shall deposit to the
credit of Capitalized Interest Account of the Collection Fund the amount
required by the Terms Supplement. To provide for the payment of interest on any
Distribution Date or other date on which interest on the Notes is due, the
Indenture Trustee shall transfer from the Capitalized Interest Account, after
any transfer pursuant to Sections 4.02(ii) and 4.02(iii) of the Terms Supplement
but prior to any transfer pursuant to Section 5.2 hereof, on the Business Day
immediately preceding each Distribution Date and any other date on which
interest is due on the Notes, to the extent of moneys available in the
Capitalized Interest Account, an amount up to but not exceeding the amount
needed to increase the amount in the Note Payment Account of the Collection Fund
to the amount of the related Noteholders' Interest Distribution Amount on such
Distribution Date or other date on which interest on the Notes is due. The
Indenture Trustee shall continue to make such transfers until the date on which
all
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moneys in the Capitalized Interest Account have been transferred from such
Account; provided, that, on January 5, 2000, the Trustee shall transfer the
balance of the Capitalized Interest Account to the Acquisition Fund.
SECTION 5.5.4 EXPENSE ACCOUNT.
On the Date of Issuance, the Indenture Trustee shall deposit
to the credit of the Expense Account the amount, if any, set forth in the Terms
Supplement. Thereafter, the Indenture Trustee shall transfer amounts to the
Expense Account from the Collection Account funds in accordance with the
provisions of Section 5.5.1 hereof and Article IV of the Terms Supplement and,
if necessary, from the Reserve Fund in accordance with the provisions of Section
5.2 hereof.
The Indenture Trustee shall apply the funds in the Expense
Account to pay Program Operating Expenses and Costs of Issuance. In addition,
the Indenture Trustee may pay expenses relating to the Notes from time to time
from Available Funds on deposit in the Collection Account by transferring the
amount necessary to pay such expenses from the Collection Account to the Expense
Account.
The Indenture Trustee shall pay Program Operating Expenses and
Costs of Issuance from moneys in the Expense Account upon receipt of written
orders or requisitions signed by an Authorized Officer, 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 Expense Account and is
then due and owing for services rendered or expenses incurred, and in the case
of payments to the Administrator shall certify that such amounts (a) constitute
related Program Operating Expenses described in clause (iv) of the definition
thereof in Section 1.1 hereof and (b) do not exceed the amount of such Program
Operating Expenses permitted to be paid pursuant to Section 6.13 hereof.
SECTION 5.5.5 [Reserved.]
SECTION 5.5.6 INVESTMENT OF COLLECTION FUND.
Moneys in the Collection Fund, or any Account thereof, pending
their application as authorized herein, shall be invested by the Indenture
Trustee in Eligible Investments as provided in Section 5.7 hereof.
SECTION 5.6 PLEDGE.
The Notes of each Series, including the principal thereof and
interest and any Carryover Interest thereon, and any Issuer Exchange Payments
shall be payable solely from the Trust Estate and secured hereunder solely by
(i)(A) the Trust Estate and (B) the Transfer and Sale Agreement, all as provided
in this Indenture and (ii) any other assets pledged to secure such Series of
Notes under a Supplemental Indenture; PROVIDED, HOWEVER, the Exchange
Counterparty in the Exchange Agreement and the Indenture Trustee, on behalf of
the Exchange Counterparty, herein or in any Supplemental Indenture executed in
connection with the Exchange Agreement, shall waive any and all rights which the
Exchange Counterparty may have to receive any amounts realized by the Indenture
Trustee from foreclosure upon the Trust Estate consisting of its Exchange
Agreement and its Exchange Counterparty Guarantee, if any.
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The Notes of a Series, including the principal thereof and
interest and any Carryover Interest thereon shall be secured hereunder by the
pledge of the Trust Estate and all right, title and interest of the Issuer and
Initial Co-Owner Eligible Lender Trustee in the Transfer and Sale Agreement
granted hereby, by the lien thereon and security interest therein, and by the
assignment to the Indenture Trustee of all right, title and interest of the
Issuer and each Eligible Lender Trustee in the Trust Estate and the Transfer and
Sale Agreement, without priority by reason of number, date, purpose, or
otherwise, except as otherwise expressly provided in this Indenture and in the
Notes. Senior Issuer Exchange Payments shall be secured hereunder by the pledge
of the Trust Estate and all right, title and interest of the Issuer and the
Initial Co-Owner Eligible Lender Trustee in the Transfer and Sale Agreement
granted hereby, by the lien thereon and security interest therein on an equal
priority with the payment of interest on Senior Notes, and by the assignment to
the Indenture Trustee for the benefit of the Senior Exchange Counterparty of all
rights, title and interest of the Issuer and each Eligible Lender Trustee in the
Trust Estate and the Transfer and Sale Agreement. Subordinate Issuer Exchange
Payments shall be secured hereunder by the pledge of the Trust Estate and all
right, title and interest of the Issuer and Initial Co-Owner Eligible Lender
Trustee in the Transfer and Sale Agreement granted hereby, by the lien thereon
and security interest therein on an equal priority with the payment of interest
on Subordinate Notes, and by the assignment to the Indenture Trustee for the
benefit of the Subordinate Exchange Counterparty of all rights, title and
interest of the Issuer and each Eligible Lender Trustee in the Trust Estate and
the Transfer and Sale Agreement. Each pledge, lien, security interest and
assignment hereunder shall be valid and binding and shall, except as otherwise
expressly provided herein, constitute a lien of equal priority and charge on the
Trust Estate and all right, title and interest of the Issuer and Initial
Co-Owner Eligible Lender Trustee in the Transfer and Sale Agreement from time to
time held hereunder for the benefit of the Holders of the Notes of such Series
and any Exchange Counterparty (subject to the provisions of this Indenture
permitting the application of the Trust Estate for the purposes and on the terms
and conditions hereof, including, without limitation, (i) the prior rights of
the Indenture Trustee to any realization from the Indenture Trustee's lien on
and security interest in the Trust Estate, for the payment of the Indenture
Trustee's and each Eligible Lender Trustee's fees and expenses hereunder and
(ii) solely with respect to the Holders of any Subordinate Notes and any
Subordinate Exchange Counterparty, the prior rights (but solely to the extent
provided herein) of the Holders of the Senior Notes and of any Senior Exchange
Counterparty, to any realization from the Indenture Trustee's lien on and
security interest in the Trust Estate to the full extent provided by law, prior
to all other indebtedness payable from or secured by the Trust Estate which may
hereafter be created or incurred).
Pursuant to this Indenture each of the Issuer and each
Eligible Lender Trustee has granted to the Indenture Trustee a lien on and
security interest in the Trust Estate and all right, title and interest of the
Issuer and Initial Co-Owner Eligible Lender Trustee in the Transfer and Sale
Agreement. Regardless of the time or order of attachment, or the time, order or
manner of perfection, or the time or order of filing of financing statements,
each of the Holders of Notes of a Series by their purchase thereof, an Exchange
Counterparty by execution and delivery of its Exchange Agreement, the Indenture
Trustee, on behalf of itself and the Holders of such Series and each Eligible
Lender Trustee by their respective execution of this Indenture and any Exchange
Agreement, each agrees that each shall have the following relative priority with
respect to the lien on and security interest in and rights related to the Trust
Estate and the Transfer and Sale Agreement:
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(i) The Indenture Trustee shall have a first and prior right
to any realization from the Indenture Trustee's lien on and security interest in
the Trust Estate and all right, title and interest of the Issuer and Initial
Co-Owner Eligible Lender Trustee in the Transfer and Sale Agreement, as security
for the payment of the fees and expenses of the Indenture Trustee and each
Eligible Lender Trustee, and any rights that the Holders of the Notes of such
Series or an Exchange Counterparty may have to any realization from the
Indenture Trustee's lien on or security interest in the Trust Estate and the
Transfer and Sale Agreement with respect to the Issuer's obligations under this
Indenture with respect to (A) the Notes of each Series and (B) any Exchange
Agreement shall be subordinate to such first and prior right; and
(ii) The Holders of Senior Notes and any Senior Exchange
Counterparty shall have a second right (but solely to the extent provided
herein) to any realization from the Indenture Trustee's lien on and security
interest in the Trust Estate and all right, title and interest of the Issuer and
Initial Co-Owner Eligible Lender Trustee in the Transfer and Sale Agreement, as
security for the payment and performance of the Issuer's obligations under this
Indenture with respect to (A) such Senior Notes and (B) any Senior Exchange
Agreement in the manner provided in this Indenture.
(iii) The Holders of Subordinate Notes and any Subordinate
Exchange Counterparty shall have a third right to any realization from the
Indenture Trustee's lien on and security interest in the Trust Estate and all
right, title and interest of the Issuer and Initial Co-Owner Eligible Lender
Trustee in the Transfer and Sale Agreement, as security for the payment and
performance of the Issuer's obligations under this Indenture with respect to (A)
the Subordinate Notes and (B) any Subordinate Exchange Counterparty in the
manner provided in this Indenture.
Subject to the priorities established in this Section 5.6 and
otherwise in this Indenture, including without limitation, Section 5.5.1 of this
Base Indenture and Section 4.02 of the Terms Supplement, a Holder, an Exchange
Counterparty, an Eligible Lender Trustee or the Indenture Trustee shall not
contest, or join in any contest of, the validity, perfection, priority or
enforceability of the lien or security interest in or right with respect to the
Trust Estate and the Transfer and Sale Agreement granted or provided for herein.
The covenants and agreements herein set forth to be performed
by or on behalf of the Issuer shall be for the equal and proportionate benefit,
security and protection of all Holders of the Notes of each Series and any
Exchange Counterparty, without preference, priority or distinction as to payment
or security or otherwise of any of the Notes of such Series over any of the
other Notes or over any related Issuer Exchange Payment or any Issuer Exchange
Payment over any of the Notes or over any other Issuer Exchange Payment for any
reason or cause whatsoever, except as expressly provided in this Indenture or
the Notes of such Series, and, except as otherwise herein or therein
specifically provided, all Notes of such Series and any Issuer Exchange Payment
shall be secured equally and ratably hereunder without discrimination or
preference whatsoever.
No Holder of a Note of a Series shall be required to see that
the moneys derived from such Series of Notes are applied to the purpose or
purposes for which the Series of Notes was issued. The validity of any Note of a
Series shall neither be dependent upon nor affected by
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the validity or regularity of any proceedings or contracts relating to the
Program nor the use and application of the proceeds of the Notes of such Series.
Nothing in this Section 5.6 or in this Indenture shall prevent
or be construed to prevent any Supplemental Indenture from pledging or otherwise
providing, or the Issuer from providing, in addition to the security given or
intended to be given by this Indenture, additional security for the benefit of
any Series of Notes or any portion thereof or for the benefit of any Issuer
Exchange Payment.
The pledges of, liens on and security interests in, and
assignments to the Indenture Trustee of the Trust Estate and all right, title
and interest of the Issuer and Initial Co-Owner Eligible Lender Trustee in the
Transfer and Sale Agreement made hereby include any contract or any evidence of
indebtedness or other rights of the Issuer to receive any of the same, whether
now existing or hereafter coming into existence, and whether now or hereafter
acquired, and the proceeds thereof, with respect to any of the Trust Estate,
including, without limitation, all rights of the Issuer or the Eligible Lender
Trustees in and under the Transfer and Sale Agreement, all Financed Student
Loans, all Contracts of Guarantee guaranteeing Financed Student Loans, any
Exchange Agreement, any Exchange Counterparty Guarantee, all Purchase Agreements
(including all rights of the Issuer to the warranties of each Seller
thereunder), the Master Servicing Agreement and the Servicing Agreements
(including all rights of the Issuer to the warranties of each Servicer
thereunder).
SECTION 5.7 INVESTMENTS.
The term "Eligible Investments" shall mean any of the
following:
(a) direct obligations of (including obligations issued or
held in book entry form on the books of) the Department of the Treasury of the
United States of America;
(b) obligations of any of the following federal agencies,
which obligations represent the full faith and credit of the United States of
America:
(1) Export-Import Bank,
(2) Farm Credit System Financial Assistance Issuer,
(3) Rural Economic Community Development
Administration (formerly the Farmers Home Administration),
(4) General Services Administration,
(5) U.S. Maritime Administration,
(6) Small Business Administration,
(7) Government National Mortgage Association (GNMA),
(8) U.S. Department of Housing & Urban Development
(PHAs), and
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(9) Federal Housing Administration;
(c) senior debt obligations rated "AAA" or "Aaa" by each
Rating Agency issued by the Federal National Mortgage Association or the Federal
Home Loan Mortgage Corporation, and senior debt obligations of other federal
government-sponsored agencies approved by each Rating Agency;
(d) U.S. dollar denominated deposit accounts, federal funds
and banker's acceptances with domestic commercial banks which have a rating on
their short-term certificates of deposit on the date of purchase of "A-1",
"F-1+" or "P-1" by each Rating Agency and maturing no more than 360 days after
the date of purchase (ratings on holding companies are not considered as the
rating on the bank);
(e) commercial paper which is rated at the time of purchase in
the single highest classification, (i.e., "A-1", "F-1+" or "P-1") by each Rating
Agency and which matures not more than 270 days after the date of purchase;
(f) investments in a money market fund rated in the highest
applicable rating category by (i) a nationally recognized rating service
acceptable to each Rating Agency or (ii) each Rating Agency;
(g) Pre-refunded Municipal Obligations defined as follows: Any
bonds or other obligations of any state of the United States of America or of
any agency, instrumentality or local governmental unit of any such state which
are not callable at the option of the obligor prior to maturity or as to which
irrevocable instructions have been given by the obligor to call on the date
specified in the notice; and
(1) which are rated, based on an irrevocable escrow
account or fund (the "escrow"), in the highest rating category of each Rating
Agency; or
(2) (A) which are fully secured as to principal and
interest and redemption premium, if any, by an escrow consisting only of cash or
obligations described in item (a) above, which escrow may be applied only to the
payment of such principal of and interest and redemption premium, if any, on
such bonds or other obligations on the maturity date or dates thereof or the
specified redemption date or dates pursuant to such irrevocable instructions, as
appropriate, and (B) which escrow is sufficient, as verified by a nationally
recognized independent certified public accountant, to pay principal of and
interest and redemption premium, if any, on the bonds or other obligations
described in this paragraph on the maturity date or dates specified in the
irrevocable instructions referred to above, as appropriate;
(h) investment agreements which each Rating Agency has
confirmed in writing will not will not adversely affect the rating of such
Rating Agency on the Notes and which are supported by appropriate opinions of
counsel for the investment agreement provider; and
(i) other forms of investments (including repurchase
agreements) approved in writing by each Rating Agency.
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Moneys held by the Indenture Trustee for the credit of any
Fund or Account shall be invested by the Indenture Trustee to the fullest extent
practicable and reasonable, in accordance with the provisions hereof, in
Eligible Investments, as directed in writing by the Issuer, and in the absence
of any such directions, in Eligible Investments selected by the Indenture
Trustee with due regard for the fiduciary responsibility of the Indenture
Trustee to maximize investment income and to protect the interests of the
Holders. All Eligible Investments shall be acquired subject to the limitations
on maturities hereinafter in this Section 5.7 set forth and to any additional
limitations or requirements, consistent with the foregoing provisions of this
paragraph, as may be established by Request of the Issuer. Moneys shall be
invested in Eligible Investments with respect to which payments of principal and
interest are scheduled or otherwise payable not later than the date on which it
is estimated that such moneys will be required by the Indenture Trustee for the
purposes intended. Eligible Investments purchased under a repurchase agreement
may be deemed to mature on the date or dates on which the Indenture Trustee may
deliver such Eligible Investments for repurchase under such agreement. Eligible
Investments which may be tendered for payment of the full principal amount
thereof plus accrued interest thereon prior to the maturity thereof may be
deemed to mature on the date or dates on which they may be so tendered. Eligible
Investments acquired as an investment of moneys in any Fund or Account shall be
credited to such Fund or Account. Unless otherwise provided herein, any earnings
on or income from Eligible Investments shall be credited to the Collection
Account in the Collection Fund, as provided in Section 5.5.6 hereof, except that
an amount of interest received with respect to any Eligible Investment on the
first payment of interest after purchase equal to the amount of accrued
interest, if any, paid as part of the purchase price of such Eligible Investment
shall be credited to the Account or Fund from which such accrued interest was
paid.
Investments in any and all Funds and Accounts may be
commingled in a separate fund or funds established by the Indenture Trustee for
purposes of making, holding and disposing of investments, notwithstanding
provisions herein for transfer to or holding in or to the credit of particular
Funds and Accounts amounts received or held by the Indenture Trustee hereunder,
provided that the Indenture Trustee shall at all times account for such
investments strictly in accordance with the Funds and Accounts to which they are
credited and otherwise as provided in this Indenture. The Indenture Trustee may
act as principal or agent in the acquisition or disposing of any Eligible
Investment. The Indenture Trustee may sell at the best price obtainable, or
present for redemption, any Eligible Investment so purchased whenever it shall
be necessary to provide moneys to meet any required payment, transfer,
withdrawal or disbursement from the Fund or Account to which such Eligible
Investment is credited, and the Indenture Trustee shall not be liable or
responsible for any loss resulting from the acquisition or disposition of such
Eligible Investment in accordance herewith.
SECTION 5.8 EXCHANGE AGREEMENTS; COUNTERPARTY EXCHANGE
PAYMENTS; ISSUER EXCHANGE PAYMENTS.
The Issuer hereby authorizes and directs the Indenture Trustee
to acknowledge and agree to any Exchange Agreement hereafter entered into by the
Issuer and an Exchange Counterparty under which (a) the Issuer may be required
to make, from time to time, Issuer Exchange Payments and (b) the Indenture
Trustee may receive, from time to time, Counterparty Exchange Payments for the
account of the Issuer. The Issuer shall not execute and deliver any Exchange
Agreement unless at the time of entering into such Exchange Agreement, (i) the
Issuer
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and the Indenture Trustee enter into a Supplemental Indenture in connection with
the execution and delivery of the Exchange Agreement, and (ii) the Issuer
obtains written evidence from each Rating Agency then rating any Outstanding
Notes that the execution and delivery of the Exchange Agreement will not
adversely affect such Rating Agency's rating on such Notes provided, however,
that in the case of any Exchange Agreement executed in connection with the
execution and delivery of this Indenture, the immediately preceding two
conditions shall not apply; and provided further, however, that in any event the
long-term debt securities of any Exchange Counterparty must be rated at least
Aa1 (or its equivalent) from a Rating Agency. In connection with the execution
of any Exchange Agreement simultaneously with the execution and delivery of this
Indenture, the Indenture Trustee, on behalf of the Exchange Counterparty, hereby
waives any and all rights which the Exchange Counterparty may have to receive
any amounts realized by the Indenture Trustee from foreclosure upon the Trust
Estate consisting of its Exchange Agreement and its Exchange Counterparty
Guarantee, if any. In connection with the execution of any Exchange Agreement,
the Indenture Trustee, on behalf of the Exchange Counterparty, shall waive in
the Supplemental Indenture executed in connection with the Exchange Agreement
any and all rights which the Exchange Counterparty may have to receive any
amounts realized by the Indenture Trustee from foreclosure upon the Trust Estate
consisting of its Exchange Agreement and its Exchange Counterparty Guarantee, if
any.
No later than the last Business Day of the calendar month that
immediately precedes a calendar month in which a Counterparty Exchange Payment
or Issuer Exchange Payment is due pursuant to the applicable Exchange Agreement
through and including the termination date of an Exchange Agreement, the Issuer
shall give written notice to the Indenture Trustee stating either (a) the amount
of any Counterparty Exchange Payment due to be received by the Indenture Trustee
for the account of the Issuer no later than each such date or (b) the amount of
any Issuer Exchange Payment to be paid to the Exchange Counterparty on each such
date. If the Indenture Trustee fails to receive such written notification from
the Issuer by the end of such Business Day, it shall immediately notify the
Issuer of such fact in writing.
On any Business Day on which a Counterparty Exchange Payment
is due pursuant to the applicable Exchange Agreement in accordance with the
written notification received from the Issuer, the Indenture Trustee shall
deposit all moneys received representing such Counterparty Exchange Payment in
the Collection Account to be applied in accordance with the provisions of
Section 5.5.1 hereof and Article IV of the Terms Supplement. The Indenture
Trustee shall notify the Issuer on such Business Day, if (a) the amount received
from the Exchange Counterparty is not equal to the amount specified in the
written notification of the Issuer, (b) no amount is received from the Exchange
Counterparty or (c) the amount received is not received in freely transferable
funds.
On any date with respect to which an Issuer Exchange Payment
is due in accordance with the written notification received from the Issuer or,
with respect to a payment in respect of an early termination date, from the
Exchange Counterparty, the Indenture Trustee shall make payment to the Exchange
Counterparty of the amount of the Issuer Exchange Payment specified in such
written notification of the Issuer or the Exchange Counterparty, as the case may
be, due on such date from moneys in the Note Payment Account by the deposit or
wire transfer of freely transferable funds to the credit of the account of the
Exchange Counterparty specified in such written notification of the Issuer or
the Exchange Counterparty, as the case may be.
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Nothing in this Indenture shall prohibit, or be construed as
prohibiting, an Issuer Exchange Payment or Counterparty Exchange Payment from
being made on a date other than a Distribution Date.
SECTION 5.9 TERMINATION.
When no Notes remain Outstanding and all amounts due or to
become due hereunder have been paid in full or provided for to the satisfaction
of the Indenture Trustee, the Indenture Trustee shall transfer to the Issuer or
to any person designated by the Issuer, including, without limitation, to an
Eligible Lender Trustee or its duly appointed successor, upon the written
request of the Issuer, all balances of all Funds and Accounts established
hereby, except that Financed Student Loans included in the balances of the
Student Loan Portfolio Fund shall not be transferred to the Issuer unless, at
the time of such transfer, the Issuer is an eligible lender under the Higher
Education Act or the Higher Education Act permits transfer of such Student Loans
to a person other than an eligible lender and except that the Indenture Trustee
shall retain and hold in the Expense Account in the Collection Fund an amount
estimated by the Indenture Trustee to be necessary to reimburse the Secretary of
Education for any excess payments by the Secretary of Education to the Indenture
Trustee in respect of the Financed Student Loans.
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ARTICLE VI
COVENANTS TO SECURE NOTES
The covenants and agreements of the Issuer, each Eligible
Lender Trustee and the Indenture Trustee contained in Article VI of the
Indenture shall be applicable to, and shall be made with respect to, any
Exchange Counterparty, and the Issuer, each Eligible Lender Trustee and the
Indenture Trustee hereby make such covenants and agreements with any such
Exchange Counterparty. The Issuer, each Eligible Lender Trustee and the
Indenture Trustee shall have the same responsibilities and obligations under
this Article VI with respect to any Exchange Counterparty as each has with
respect to the Holders, except for such responsibilities and obligations which,
of necessity, apply only to the Holders of Notes.
The Issuer, each Eligible Lender Trustee and the Indenture
Trustee, as the case may be, hereby covenant and agree with the purchasers and
Holders of the Notes as follows:
SECTION 6.1 ADMINISTRATION OF THE PROGRAM.
The Issuer shall require the Administrator to administer,
operate and perform all acts and things required to administer, operate and
maintain the Program in strict compliance with the law, including, without
limitation, the Higher Education Act, in such manner as to insure that the
Program and the Financed Student Loans will benefit, to the optimum extent, from
any Guarantee, and Interest Subsidy Payments and Special Allowance Payments (to
the extent, if any, allowed) in respect of Student Loans pursuant to the Higher
Education Act or other applicable federal statutes. The Indenture Trustee hereby
acknowledges the authority of the Administrator under the terms of the
Administration Agreement to take all action necessary to administer, operate and
perform all acts and things required to administer, operate and maintain the
Program in strict compliance with the law. The Indenture Trustee hereby further
acknowledges and agrees that if for any reason the Administrator fails or is
unable to perform its duties under this Indenture, the Indenture Trustee shall
perform such duties until such time as either the Administrator resumes the
performance of its duties or a substitute Administrator has been appointed by
the Issuer.
SECTION 6.2 CONTRACTS OF GUARANTEE.
So long as any Notes are Outstanding and unpaid, each Eligible
Lender Trustee and the Indenture Trustee (a) will, from and after the date on
which each Eligible Lender Trustee and the Indenture Trustee shall have
succeeded to the rights and interests of any Seller under a Contract of
Guarantee covering a Financed Student Loan, maintain such Contract of Guarantee
and diligently enforce their rights thereunder; (b) will enter into such other
similar or supplemental agreements as the Issuer shall determine are required to
maintain benefits for all Financed Student Loans covered thereby and shall
notify in writing each Eligible Lender Trustee and/or the Indenture Trustee; and
(c) will not voluntarily consent to or permit any rescission of or consent to
any amendment to or otherwise take any action under or in connection with any
such Contract of Guarantee or any similar or supplemental agreement which in any
manner will materially adversely affect the rights of the Holders.
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SECTION 6.3 ACQUISITION, COLLECTION AND ASSIGNMENT OF STUDENT
LOANS; COMPLIANCE WITH LAW.
The Issuer shall Finance directly, or indirectly through an
Eligible Lender Trustee, only Student Loans with moneys under this Indenture and
shall diligently cause to be collected all principal and interest payments on
each Financed Student Loan, and grants, subsidies, donations, Guarantee
Payments, Interest Subsidy Payments, Special Allowance Payments (to the extent,
if any, allowed) and all defaulted payments Guaranteed by a Guarantee Agency or
the Secretary of Education which relate to any Financed Student Loan. The Issuer
shall also make, or cause to be made by each Servicer, every effort to perfect
the claims of the Issuer and each Eligible Lender Trustee for payment from the
Guarantee Agency or the Secretary of Education, as soon as possible, of all
amounts related to each Financed Student Loan. The Issuer and each Eligible
Lender Trustee, at the Issuer's written request, shall assign or cause to be
assigned each Financed Student Loan for payment of Guarantee benefits at the
earliest date permitted under applicable law and regulations. The Issuer and
each Eligible Lender Trustee, at the Issuer's written request, shall comply with
all State and federal statutes, rules and regulations which apply to the Program
and to Financed Student Loans, including, the Higher Education Act.
SECTION 6.4 ENFORCEMENT OF FINANCED STUDENT LOANS.
The Issuer and each Eligible Lender Trustee, at the Issuer's
written request, shall cause to be diligently taken all reasonable steps,
actions and proceedings necessary for the enforcement of all terms, covenants
and conditions of all Financed Student Loans and agreements in connection
therewith, including the prompt payment of all principal and interest payments
and all other amounts due thereunder. The Issuer and each Eligible Lender
Trustee, at the Issuer's written request, shall at all times, to the extent
permitted by law, defend, enforce, preserve and protect the rights and
privileges of the Issuer, each such Eligible Lender Trustee and of the Holders
under or with respect to each Financed Student Loan and agreement in connection
therewith. The Issuer and each Eligible Lender Trustee shall not consent, or
agree to or permit any amendment or modification of any Financed Student Loan or
agreement in connection therewith which will in any manner materially adversely
affect the rights or security of the Holders or of any Exchange Counterparty
under this Indenture or the Guarantee of such Financed Student Loans. Nothing in
this Indenture shall be construed to prevent the Issuer or an Eligible Lender
Trustee from permitting a student borrower to settle a default or cure a
delinquency on any Financed Student Loan on such terms as shall be required by
law or consolidate any Financed Student Loan with another Lender.
SECTION 6.5 ENFORCEMENT OF MASTER SERVICING AGREEMENT AND
SERVICING AGREEMENTS; REMOVAL OF SERVICER.
The Issuer shall cause to be diligently enforced and taken all
reasonable steps, actions and proceedings necessary for the enforcement of all
terms, covenants and conditions of the Master Servicing Agreement and the
Servicing Agreements, including the prompt payment of all principal and interest
payments, all Interest Subsidy Payments, all Special Allowance Payments (to the
extent, if any, allowed), all defaulted payments Guaranteed by a Guarantee
Agency or the Secretary of Education which relate to any Financed Student Loan
and all other amounts due the Issuer thereunder. The Issuer shall at all times,
to the extent permitted by law,
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cause to be defended, enforced, preserved and protected the rights and interests
of the Issuer and of the Holders under or with respect to the Master Servicing
Agreement and the Servicing Agreements. The Issuer shall not consent or agree to
or permit any amendment or modification of the Master Servicing Agreement or any
Servicing Agreement which will in any manner materially adversely affect the
rights or security of the Holders under this Indenture. Upon termination or
expiration of the Master Servicing Agreement or any Servicing Agreement, the
Issuer shall take all appropriate steps to maintain adequate provision for the
administration, servicing and collection of the Financed Student Loans. The
Issuer shall notify the Indenture Trustee and each Rating Agency if either a
successor Master Servicer or Servicer is appointed and shall send a copy of any
amendment or supplement to the Master Servicing Agreement or any Servicing
Agreement in connection therewith.
SECTION 6.6 ENFORCEMENT OF PURCHASE AGREEMENTS.
The Issuer shall cause to be diligently enforced and taken all
reasonable steps, actions and proceedings necessary for the enforcement of all
terms, covenants and conditions of its rights under any Purchase Agreements,
including warranties with respect to the Student Loans and Guarantees thereof
and including the prompt payment of all amounts due the Servicers and the Issuer
thereunder, to the extent of the Issuer's rights under such Purchase Agreements.
The Issuer shall at all times, to the extent permitted by law, cause to be
defended, enforced, preserved and protected the rights and interests of the
Issuer, of the Holders and of each Exchange Counterparty under or with respect
to the Purchase Agreements. The Issuer shall not consent or agree to or permit
any amendment or modification of any of its rights under a Purchase Agreement
which will in any manner materially adversely affect the rights or security of
the Holders or of any Exchange Counterparty under this Indenture.
SECTION 6.7 BOOKS OF ACCOUNT; ANNUAL AUDIT.
The Issuer shall cause to be kept and maintained, or cause the
Indenture Trustee to keep and maintain, proper books of record and account
relating to the Program in which full, true and correct entries will be made of
all dealings or transactions of or in relation to the Program, the proceeds of
the Notes, the Available Funds and all Funds and Accounts. Such books of record
and account shall be made available for inspection by the Indenture Trustee (or
the Issuer, as the case may be) and by any Holder of more than ten percent (10%)
of the aggregate principal amount of Notes Outstanding, at reasonable hours and
under reasonable circumstances. Within one hundred twenty (120) days after the
end of each Fiscal Year, the Issuer shall cause such books of record and account
to be audited by a firm of independent certified public accountants of national
reputation. A copy of each audit report, annual balance sheet and income and
expense statement showing in reasonable detail the financial condition of the
Program as of the close of each Fiscal Year, summarizing in reasonable detail
the income and expenses for such year, and containing such other reviews or
reports as may be required by the Higher Education Act, including a report of
the transactions relating to the Funds and Accounts, shall be filed promptly
with the Indenture Trustee and shall be available for inspection by any Holder.
Any financial statements prepared in connection with the foregoing may be
presented on a consolidated or combined basis with other programs of the Issuer,
provided that such financial statements for the Program are separately
identified and only to the extent that such basis of reporting is not
inconsistent with that required by this Section 6.7.
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The Issuer, pursuant to Section 314(a) of the Trust Indenture
Act, shall:
(a) file with the Indenture Trustee, within fifteen (15) days
after the Issuer is required to file the same with the Commission, copies of the
annual reports and of the information, documents and other reports (or copies of
such portions of any of the foregoing as the Commission may from time to time by
rules and regulations prescribe) which the Issuer may be required to file with
the Commission pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934; or, if the Issuer is not required to file information,
documents or reports pursuant to either of such Sections, then it shall file
with the Indenture Trustee and the Commission, in accordance with the rules and
regulations prescribed from time to time by the Commission, such of the
supplementary and periodic information, documents and reports which may be
required pursuant to Section 13 of the Securities Exchange Act of 1934 in
respect of a security listed and registered on a national securities exchange as
may be prescribed from time to time in such rules and regulations;
(b) file with the Indenture Trustee and the Commission, in
accordance with the rules and regulations prescribed from time to time by the
Commission, such additional information, documents and reports with respect to
compliance by the Issuer, as the case may be, with the conditions and covenants
of this Indenture as may be required from time to time by such rules and
regulations; and
(c) transmit within thirty (30) days after the filing thereof
with the Indenture Trustee, in the manner and to the extent provided in Section
313(c) of the Trust Indenture Act, such summaries of any information, documents
and reports required to be filed by the Issuer pursuant to clauses (a) and (b)
of this paragraph as may be required by the rules and regulations prescribed
from time to time by the Commission.
SECTION 6.8 PUNCTUAL PAYMENT OF NOTES.
The Issuer shall duly and punctually pay, or cause to be paid,
the principal of and interest on each Note on the dates, at the places and in
the manner provided in the Notes according to the true intent and meaning
thereof, but only from the Trust Estate, and the Issuer shall faithfully do and
perform and at all times fully observe and keep any and all of its covenants,
undertakings, stipulations and provisions contained in the Notes and this
Indenture.
SECTION 6.9 FURTHER ASSURANCES.
The Issuer and each Eligible Lender Trustee, at the written
request of the Issuer, shall at any and all times, make, do, execute,
acknowledge, file, record and deliver all and every such further resolutions,
indentures, acts, deeds, conveyances, assignments, transfers, assurances and
other documents, including financing statements and continuation statements, as
may be necessary or desirable for the better assuring, conveying, granting,
assigning, perfecting and confirming of any and all of the Trust Estate and the
Transfer and Sale Agreement hereby pledged or charged with or assigned to the
payment of the Notes, or intended so to be, or which the Issuer or any Eligible
Lender Trustee may hereafter become bound to pledge or charge or assign.
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SECTION 6.10 PROTECTION OF SECURITY.
The Issuer is duly authorized under its Article of
Association, its By-Laws, the Delaware Trust Agreement and applicable law to own
student loan notes, directly or indirectly through an Eligible Lender Trustee,
and the other assets pledged to the payment of the Notes and to pledge, to
grant, or cause to be granted, a lien on and a security interest in, and to
assign, or cause to be assigned, the Trust Estate and all right, title and
interest of the Issuer and Initial Co-Owner Eligible Lender Trustee in the
Transfer and Sale Agreement in the manner and to the extent provided in this
Indenture. Each of the Trust Estate and the Transfer and Sale Agreement is and
will be free and clear of any pledge, lien, security interest, charge or
encumbrance thereon or with respect thereto prior to, or of equal rank with, the
pledge, lien, security interest and assignment created by this Indenture, except
as otherwise expressly provided or permitted herein, and all action on the part
of the Issuer to that end has been duly and validly taken. The Issuer is duly
authorized under its Articles of Association, its By-Laws, the Delaware Trust
Agreement and applicable law to enter into this Indenture. The Notes are and
will be legal, valid and binding limited obligations of the Issuer enforceable
in accordance with their respective terms and the terms of this Indenture and
each Supplemental Indenture. The Issuer and each Eligible Lender Trustee shall
at all times, to the extent permitted by law, defend, preserve and protect the
pledge of, lien on, security interest in and assignment of the Trust Estate and
the Transfer and Sale Agreement, the priority of such pledge, lien, security
interest and assignment and all the rights of the Holders and each Exchange
Counterparty thereto against all claims and demands of all persons whomsoever.
The pledge of, lien on, security interest in and assignment of the Trust Estate
and the Transfer and Sale Agreement made hereby includes the pledge of, any lien
on, security interest in and assignment of any contract or any evidence of
indebtedness or other right of the Issuer and each Eligible Lender Trustee to
receive any of the same, whether now existing or hereafter coming into existence
or acquired and the proceeds thereof, including, without limitation, all
Contracts of Guarantee covering Financed Student Loans, all Purchase Agreements,
the Master Servicing Agreement and all Servicing Agreements.
SECTION 6.11 NO ENCUMBRANCES.
The Issuer and each Eligible Lender Trustee shall not create,
or permit the creation of, any pledge, lien, charge or encumbrance upon the
Trust Estate and the Transfer and Sale Agreement except only as provided in or
permitted by this Indenture. The Issuer shall not issue any obligations, notes,
securities or other evidences of indebtedness, other than the Notes as permitted
by this Indenture secured by a pledge of the Trust Estate and the Transfer and
Sale Agreement creating a lien or charge on the Trust Estate and the Transfer
and Sale Agreement equal or superior to the lien of this Indenture; provided,
that nothing in this Indenture shall prevent the Issuer from issuing evidences
of indebtedness secured by a pledge of the Trust Estate or the Transfer and Sale
Agreement subordinate in priority to that of the Notes, or secured by a pledge
of the Trust Estate or the Transfer and Sale Agreement arising on or after such
date as the pledge of the Trust Estate and the Transfer and Sale Agreement
hereunder shall be discharged and satisfied as provided in this Indenture, or
from issuing notes, Notes or other evidences of indebtedness of the Issuer
(whether or not under other indentures in order to fund the Program or other
programs of the Issuer) secured by assets and revenues of the Issuer other than
the Trust Estate.
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SECTION 6.12 COMPLIANCE WITH INDENTURE.
The Issuer shall not issue, or permit to be issued, any Notes
in any manner other than in accordance with the provisions of this Indenture and
shall not suffer or permit any Event of Default to occur under this Indenture,
but shall faithfully observe and perform all the covenants, conditions and
requirements hereof. The Issuer, for itself, its successors and assigns,
represents, covenants and agrees with the Holders, as a material inducement to
the purchase and holding of the Notes, that so long as any of the Notes remain
Outstanding and the principal thereof or interest thereon is unpaid or
unprovided for, it shall faithfully perform all of the covenants and agreements
contained in this Indenture and the Notes.
SECTION 6.13 LIMITATION ON PROGRAM OPERATING EXPENSES.
(a) The Issuer (i) shall not permit the Program Operating
Expenses described in clause (i) of the definition thereof and paid to the
Indenture Trustee (excluding, however, any fees and expenses payable to the
Indenture Trustee that are not fees or expenses normally incurred by a trustee
under instruments similar to this Indenture) to exceed an amount equal to .015%
(one and a half basis points) of the aggregate outstanding principal balance of
the Notes on the date of payment of such expenses; (ii) shall not permit the
Program Operating Expenses described in clause (ii) of the definition thereof
and paid to an auction agent to exceed an amount equal to .01% (one basis
points) of the aggregate outstanding principal balance of the Notes on the date
of payment of such expenses; and (iii) shall not permit the Program Operating
Expenses described in clause (ii) of the definition thereof and paid to each
broker-dealer to exceed a net amount equal to .20% (twenty basis points) of the
aggregate outstanding principal balance of the Notes on the date of payment of
such expenses.
(b) The Issuer shall not permit the Program Operating Expenses
described in clause (iv) of the definition thereof to exceed an amount equal to
0.05% (five basis points) of the aggregate outstanding principal balance of the
Financed Student Loans on the date of payment of such expenses until the Parity
Percentage is 100%, after which time, the Issuer shall not permit the Program
Operating Expenses described in clause (iv) of the definition thereof to exceed
0.25% (twenty-five basis points) of the aggregate outstanding principal balance
of the Financed Student Loans on the date of payment of such expenses; provided,
that prior to any increase in the limitation on such Program Operating Expenses
permitted hereunder, the Issuer shall have received from Moody's confirmation
that such an increase in the limitation on such Program Operating Expenses will
not adversely affect Moody's rating on the Notes.
SECTION 6.14 NOTICE OF ADDITIONAL GUARANTEE AGENCIES OR
SERVICERS.
The Issuer shall give notice to each Rating Agency of the
appointment of (i) any Guarantee Agency in addition to the Guarantee Agencies
set forth on Schedule I hereto and (ii) any Servicer in addition to the
Servicers set forth on Schedule II hereto.
SECTION 6.15 ISSUER TO FURNISH INDENTURE TRUSTEE NAMES AND
ADDRESSES OF HOLDERS.
In accordance with Section 312(a) of the Trust Indenture Act,
the Issuer shall furnish or cause to be furnished to the Indenture Trustee:
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(a) semi-annually with respect to each Series of Notes on
January 15 and July 15 of each year or upon such other dates as are set forth in
or pursuant to a resolution of the board of directors of the Issuer or a
Supplemental Indenture, a list, in each case in such form as the Indenture
Trustee may reasonably require, of the names and addresses of Holders as of the
applicable date, and
(b) at such other times as the Indenture Trustee may request
in writing, within 30 days after the receipt by the Issuer of any such request,
a list of similar form and content as of a date not more than 15 days prior to
the time such list is furnished, provided, however, that so long as the
Indenture Trustee is the Registrar no such list shall be required to be
furnished.
SECTION 6.16 UNDERTAKING FOR COSTS.
The Issuer and the Indenture Trustee agree, and each Holder by
such Holder's acceptance of an Note shall be deemed to have agreed, that any
court may, in its discretion, require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the Indenture
Trustee for any action taken or omitted by it as Indenture Trustee, the filing
by any party litigant in such suit of an undertaking to pay the costs of such
suit, and that such court may, in its discretion, assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section 6.16 shall not apply to
(i) any suit instituted by the Indenture Trustee, (ii) any suit instituted by
any Holder, or group of Holders, in each case holding in the aggregate more than
ten percent (10%) of the Outstanding principal amount of the Notes or (iii) any
suit instituted by any Holder for the enforcement of the payment of the
principal of, premium, if any, or interest on any Note in accordance with
Section 8.5 hereof.
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ARTICLE VII
CONCERNING THE INDENTURE TRUSTEE
SECTION 7.1 APPOINTMENT OF, ACCEPTANCE BY, AND DUTIES OF
INDENTURE TRUSTEE; QUALIFICATION; RESIGNATION; REMOVAL; SUCCESSOR.
(a) APPOINTMENT, ACCEPTANCE AND DUTIES. The Issuer hereby
appoints Firstar Bank, National Association to act as the initial Indenture
Trustee hereunder. Firstar Bank, National Association hereby accepts such
appointment and the trusts created under this Indenture, and agrees to perform
said trusts, but only upon and subject to the following terms and conditions, to
all of which the Holders agree, such agreement to be evidenced with respect to
the Holders by their acceptance of the Notes:
(i) Except during the continuance of an Event of
Default,
(A) the Indenture Trustee undertakes to perform
such duties and only such duties as are specifically set forth in this
Indenture, and no implied covenants or obligations shall be read into this
Indenture against the Indenture Trustee; and
(B) in the absence of bad faith on its part,
the Indenture Trustee may conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Indenture Trustee and conforming to the requirements
of this Indenture; but in the case of any such certificates or opinions which by
any provisions hereof are specifically required to be furnished to the Indenture
Trustee, the Indenture Trustee shall be under a duty to examine the same to
determine whether or not they conform as to form with the requirements of this
Indenture and whether or not they conform to the requirements of this Indenture.
(ii) In case an Event of Default has occurred and is
continuing, the Indenture Trustee shall exercise such of the rights and powers
vested in it by this Indenture, and shall 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/her own affairs.
(iii) No provisions of this Indenture shall be
construed to relieve the Indenture Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that
(A) this subsection shall not be construed to
affect the limitation of the Indenture Trustee's duties and obligations provided
in subparagraph (i)(A) of this Section or the Indenture Trustee's right to rely
on the truth of statements and the correctness of opinions as provided in
subparagraph (i)(B) of this Section;
(B) the Indenture Trustee shall not be liable
for any error of judgment made in good faith by any one of its officers, unless
it shall be established that the Indenture Trustee was negligent in ascertaining
the pertinent facts;
(C) the Indenture Trustee shall not be liable
with respect to any action taken or omitted to be taken by it in good faith in
accordance with the direction of
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the Holders of not less than a majority in principal amount of the Notes then
Outstanding relating to the time, method and place of conducting any proceeding
for any remedy available to the Indenture Trustee, or exercising any trust or
power conferred upon the Indenture Trustee, under this Indenture; and
(D) no provision of this Indenture shall
require the Indenture Trustee to expend or risk its own funds or otherwise incur
any financial liability in the performance of any of its duties hereunder, or in
the exercise of any of its rights or powers if it shall have reasonable grounds
for believing that repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it (with the exception of any
action required to be taken under Section 8.8 hereof).
(iv) Before taking any action hereunder requested by
any Holder, the Indenture Trustee may require that it be furnished an indemnity
bond or other indemnity satisfactory to it in its sole discretion by the Holder
for the reimbursement of all expenses to which it may be put and to protect it
against all liability, except liability which results from the negligence or
misconduct of the Indenture Trustee, by reason of any action so taken by the
Indenture Trustee;
(v) Whether or not therein expressly so provided,
every provision of this Indenture relating to the conduct or affecting the
liability of or affording protection to the Indenture Trustee shall be subject
to the provisions of this Section 7.1 and to the provisions of the Trust
Indenture Act.
(b) QUALIFICATION. The Indenture Trustee, including any
successor Indenture Trustee shall at all times be a trust company or bank having
the powers of a trust company within the state in which it is located, organized
and doing business under the laws of the United States of America, any state
thereof or the District of Columbia, eligible under Section 310(a) of the Trust
Indenture Act to act as Indenture Trustee under an indenture qualified under the
Trust Indenture Act and have a combined capital and surplus (computed in
accordance with Section 310(a)(2) of the Trust Indenture Act) of at least Ten
Million Dollars ($10,000,000.). The Indenture Trustee shall meet all the
requirements of law for the performance of the duties of the Indenture Trustee
specified herein, shall at all times maintain a rating from any one of the
Rating Agencies in one of their three highest categories (except that Firstar
Bank, National Association shall not be required to maintain such rating).
(c) RESIGNATION. The Indenture Trustee and any successor to
the Indenture Trustee may resign and be discharged from the trusts created by
this Indenture by giving to the Issuer notice in writing which notice shall
specify the date on which such resignation is to take effect and which date
shall not be sooner than sixty (60) days after the date of giving such notice.
Such resignation shall take effect on the day specified in such notice, if a
successor Indenture Trustee shall have been appointed pursuant to Section 7.1(e)
hereof and is qualified to be the Indenture Trustee under the requirements of
this Indenture. If no successor Indenture Trustee has been appointed by the date
specified or within a period of sixty (60) days from the receipt of the notice
by the Issuer, whichever period is the longer, the resigning Indenture Trustee
may request a court of competent jurisdiction to (i) require the Issuer to
appoint a successor, as provided in Section 7.1(e) hereof, within three (3) days
of the receipt of citation or notice by the court, or (ii) appoint an Indenture
Trustee having the qualifications provided in Section 7.1(e) hereof. In no
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event may the resignation of the Indenture Trustee be effective until a
qualified successor Indenture Trustee shall have been selected and appointed.
(d) REMOVAL. If at any time,
(1) the Indenture Trustee has or shall fail to comply with
the obligations imposed on it under Section 310(b) of the Trust Indenture Act
with respect to the Notes of any Series after written request therefor by the
Issuer or any Holder of such Series who has been a bona fide Holder of a Note of
such Series for at least six (6) months, or
(2) the Indenture Trustee shall cease to be eligible under
Section 7.1(b) hereof and shall fail to resign after written request therefor by
the Issuer or any such Holder, or
(3) the Indenture Trustee shall become incapable of acting
or shall be adjudged a bankrupt or insolvent or a receiver of the Indenture
Trustee or of its property shall be appointed or any public officer shall take
charge or control of the Indenture Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation,
then, (i) the Issuer, by or pursuant to a resolution of its board of directors,
may remove the Indenture Trustee with respect to all Notes or the Notes of such
Series, or (ii) subject to Section 315(e) of the Trust Indenture Act, any Holder
who has been a bona fide Holder of a Note of such Series for at least six (6)
months may, on behalf of himself and all others similarly situated, petition any
court of competent jurisdiction for the removal of the Indenture Trustee with
respect to all Notes of such Series and the appointment of a successor Indenture
Trustee or Indenture Trustees.
The Indenture Trustee may be removed at any time with or
without cause by the written direction or upon affirmative vote of the Holders
of a majority in aggregate principal amount of the Directing Notes then
Outstanding or their attorneys-in-fact duly authorized.
(e) SUCCESSOR. In the event of resignation, removal,
ineligibility, disability or refusal to act of the Indenture Trustee, a
successor may be appointed by the Holders of not less than a majority in
aggregate principal amount of the Directing Notes then Outstanding by an
instrument or concurrent instruments in writing signed by such Holders or their
attorneys-in-fact duly authorized provided, nevertheless, that in case at any
time there shall be a vacancy in the office of the Indenture Trustee hereunder,
the Issuer, by an instrument in writing shall appoint a successor to fill such
vacancy until a new Indenture Trustee shall be appointed by the Holders of the
Directing Notes as above authorized; and any such successor Indenture Trustee
appointed by the Issuer shall be superseded, immediately and without further
act, by the new Indenture Trustee appointed by the Holders of the Directing
Notes. No resignation or removal of the Indenture Trustee shall be effective
until a successor Indenture Trustee has been appointed and has qualified under
this Section 7.1 and the predecessor Indenture Trustee has been paid all money
then due it under this Indenture.
Any successor Indenture Trustee shall meet the qualifications
of this Section 7.1. Such successor Indenture Trustee shall execute, acknowledge
and deliver to its predecessor and to the Issuer an instrument in writing
accepting such appointment hereunder, and thereupon such successor Indenture
Trustee, without any further act, deed or conveyance, shall become fully
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vested with all the rights, powers, trusts, duties and obligations of its
predecessor in trust hereunder, with like effect as if originally named as
Indenture Trustee, but such predecessor shall, nevertheless, on the written
request of the Issuer or such successor execute and deliver an instrument
transferring to such successor Indenture Trustee all rights, powers, trusts,
duties and obligations of such predecessor in trust hereunder and shall deliver
all balances (including lawful money of the United States, Eligible Investments,
Financed Student Loans and all evidences of indebtedness, securities and
certificates relating thereto) held by it to such successor Indenture Trustee,
together with an accounting of balances held by the predecessor Indenture
Trustee hereunder. The successor Indenture Trustee shall have no responsibility
for the acts of the predecessor Indenture Trustee. Upon acceptance of
appointment by the successor Indenture Trustee as provided in this Section 7.1,
the Issuer shall give written notice to each Holder within ten (10) days
thereafter.
Any corporation or association into which the Indenture
Trustee may be merged or with which it may be consolidated, or any corporation
or association resulting from any merger or consolidation to which the Indenture
Trustee shall be a party, or any corporation or association to which the
Indenture Trustee may sell or transfer all or substantially all of its corporate
trust business, shall be the successor Indenture Trustee under this Indenture
without the execution or filing of any paper or any further act on the part of
the parties hereto, anything herein to the contrary notwithstanding, provided
such Issuer or association meets the qualifications of this Section 7.1.
The Holders agree to the appointment of the Indenture Trustee
under this Indenture and the performance by the Indenture Trustee of the trusts
imposed upon the Indenture Trustee, but only upon the terms and conditions set
forth in this Indenture, such agreement of the Holders being evidenced with
respect to the Holders by their acceptance of the Notes.
SECTION 7.2 APPOINTMENT OF CO-INDENTURE TRUSTEE.
It is the purpose of this Indenture that there shall be no
violation of any law of any jurisdiction (including in particular the Trust
Indenture Act, if and when applicable, and the law of the State) denying or
restricting the right of banking corporations or associations to transact
business as the Indenture Trustee in such jurisdiction. It is recognized that in
case of litigation under this Indenture or any Financed Student Loan or related
agreement, and in particular in case of the enforcement thereof on default, or
in case of a conflict of interest, or in case the Indenture Trustee deems that
by reason of any present or future law of any jurisdiction it may not exercise
any of the powers, rights or remedies herein granted to the Indenture Trustee or
hold title to the properties, in trust, as herein granted, or take any other
action which may be desirable or necessary in connection therewith, it may be
necessary that the Indenture Trustee appoint an additional individual or
institution as a separate or co-Indenture Trustee. The following provisions of
this Section are intended to accomplish these ends.
The Indenture Trustee may appoint a co-Indenture Trustee under
this Section 7.2 with the consent of the Issuer. In the event that the Indenture
Trustee so appoints an individual or institution as a separate or co-Indenture
Trustee, each and every remedy, power, right, duty, obligation, claim, demand,
cause of action, immunity, estate, title, interest, pledge and security interest
expressed or intended by this Indenture to be exercised by or vested in or
conveyed to the Indenture Trustee with respect thereto shall be conferred or
imposed upon and exercised or
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performed by the Indenture Trustee, or the Indenture Trustee and such separate
or co-Indenture Trustee jointly, except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed the
Indenture Trustee shall be incompetent or unqualified to perform such act or
acts, in which event such remedy, power, right, duty, obligation, claim, demand,
cause of action, immunity, estate, title, interest, pledge and security interest
shall be exercised and performed by such separate or co-Indenture Trustee but
shall be exercised only to the extent necessary to enable such separate or
co-Indenture Trustee to exercise such powers, rights and remedies, and every
covenant, duty and obligation necessary to the exercise thereof by such separate
or co-Indenture Trustee shall run to and be enforceable by either of them.
Should any instrument in writing from the Issuer or each
Eligible Lender Trustee be required by the separate or co-Indenture Trustee so
appointed by the Indenture Trustee for more fully and certainly vesting in and
confirming to him or its such properties, rights, powers, trusts, duties and
obligations, any and all such instruments in writing shall, on request, be
executed, acknowledged and delivered by the Issuer or each Eligible Lender
Trustee. In case any separate or co-Indenture Trustee, or a successor to either,
shall die, become incapable of acting, resign or be removed, all the estates,
properties, rights, powers, trusts, duties and obligations of such separate or
co-Indenture Trustee, so far as permitted by law, shall vest in and be exercised
by the Indenture Trustee until the appointment of a new Indenture Trustee or a
successor to such separate or co-Indenture Trustee.
SECTION 7.3 CERTAIN RIGHTS AND OBLIGATIONS OF THE INDENTURE
TRUSTEE.
The following paragraphs (a) through (j), inclusive, of this
Section 7.3 are subject to Sections 315(a) through 315(d) of the Trust Indenture
Act.
(a) The Indenture Trustee (i) may execute any of the trusts or
powers hereof and perform any of its duties by or through attorneys, agents,
receivers or employees appointed by the Indenture Trustee in the exercise of
reasonable care, (ii) shall be entitled to the advice of counsel concerning all
matters of trusts hereof and duties hereunder, and (iii) may pay reasonable
compensation in all cases to all of those attorneys, agents, receivers and
employees reasonably employed by it in connection with the trusts hereof. The
Indenture Trustee may act upon the opinion or advice of an attorney (who may be
the attorney or attorneys for the Issuer) approved by the Indenture Trustee in
the exercise of reasonable care. The Indenture Trustee shall not be responsible
for any loss or damage resulting from any action taken or omitted to be taken in
good faith in reliance upon that opinion or advice. In addition, the Indenture
Trustee shall not be answerable for the default or misconduct of any such
attorney, agent or employee selected by it with reasonable care.
(b) Except as provided herein, the Indenture Trustee shall
have no responsibility or duty with respect to the application of any moneys
paid to the Issuer or to the Servicers.
(c) Except for its certificate of authentication on the Notes
and pursuant to Section 7.1(a)(i)(A), the Indenture Trustee shall not be
responsible for or have any liability for:
(i) any act of the Issuer or any Eligible Lender Trustee;
(ii) any recital in this Indenture or in the Notes;
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(iii) the validity, priority, recording, rerecording,
filing or refiling of this Indenture or any Supplemental Indenture issued
hereunder or of any other document in connection herewith;
(iv) any instrument or document of further assurance or
collateral assignment;
(v) any financing statements, amendments thereto, or
continuation statements;
(vi) the validity of the execution by the Issuer of this
Indenture, any Supplemental Indenture or instruments or documents of further
assurance;
(vii) the sufficiency of the security for the Notes issued
hereunder or intended to be secured hereby; and
(viii) the maintenance of the security hereof.
(d) The Indenture Trustee shall be protected in acting upon
any notice, resolution, request, consent, order, certificate, report, appraisal,
opinion, or other paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties. Any action taken by the
Indenture Trustee pursuant to this Indenture upon the request of any Person who
is a Holder at the time of making the request or giving the authority or consent
shall be conclusive and binding upon all future Holders of the same Note and of
Notes issued in exchange therefor or in place thereof.
(e) Whenever in the administration hereof the Indenture
Trustee shall deem it desirable that a matter be proved or established prior to
taking, suffering, or omitting any action hereunder, the Indenture Trustee
(unless other evidence be herein specifically prescribed), in the absence of bad
faith on its part, may, but shall not be obligated to, rely upon a certificate
signed by an Authorized Officer of the Issuer. Prior to the occurrence of a
default or Event of Default hereunder, the Indenture Trustee may accept a
similar certificate to the effect that any particular dealing, transaction or
action is necessary or expedient; provided, that the Indenture Trustee in its
discretion may require and obtain any further evidence which it deems to be
necessary or advisable; and, provided further, that the Indenture Trustee shall
not be bound to secure any further evidence.
(f) At any reasonable time, the Indenture Trustee and its duly
authorized agents, attorneys, experts, engineers, accountants and
representatives (i) may inspect and copy fully all books, papers and records of
the Issuer pertaining to the Notes, and (ii) may take any memoranda from and in
regard thereto as the Indenture Trustee may desire.
(g) The Indenture Trustee shall not be required to give any
bond or surety with respect to the execution of these trusts and powers or
otherwise.
(h) Notwithstanding anything contained elsewhere in this
Indenture, the Indenture Trustee may demand any showings, certificates, reports,
opinions, appraisals and other information, and any corporate action and
evidence thereof, in addition to that required by the terms hereof, as a
condition to the authentication of any Notes or the taking of any action
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whatsoever within the purview of this Indenture, if the Indenture Trustee deems
it to be desirable for the purpose of establishing the right of the Issuer to
the authentication of any Notes or the right of any person to the taking of any
other action by the Indenture Trustee; provided, that the Indenture Trustee
shall not be required to make that demand and shall be protected by the
provisions hereof if such demand is not made.
(i) Unless otherwise provided herein, all moneys received by
the Indenture Trustee under this Indenture shall be held in trust for the
purpose for which those moneys were received, until those moneys are used,
applied or invested as provided herein; provided, however, that those moneys
need to be segregated from other moneys, except to the extent required by this
Indenture or by law. The Indenture Trustee shall not have any liability for
interest on any moneys received hereunder, except to the extent expressly
provided herein or agreed in writing with the Issuer.
(j) Any opinions, certificates and other instruments and
documents for which provision is made in this Indenture may be accepted by the
Indenture Trustee, in the absence of bad faith on its part, as conclusive
evidence of the facts and conclusions stated therein and shall be full warrant,
protection and authority to the Indenture Trustee for its actions taken
hereunder. In all cases the Indenture Trustee shall be entitled to rely
conclusively upon the notice of the rate of interest on the Notes announced by
the Calculation Agent pursuant to Section 2.03(a) of the Terms Supplement and
any applicable subsections thereunder.
SECTION 7.4 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT;
EXAMINATION OF EVIDENCE; EVIDENCE OF RIGHTS OF HOLDERS.
The Issuer will furnish, or will cause to be furnished, to the
Indenture Trustee any evidence of compliance with the conditions precedent, if
any, provided in this Indenture (including any covenants compliance with which
constitutes a condition precedent) which relate to any action to be taken by the
Indenture Trustee at the request or upon the application of the Issuer. The
Indenture Trustee shall examine such evidence and any evidence furnished to it
pursuant to any other provisions of this Indenture to determine whether or not
such evidence conforms to the requirements of this Indenture.
Any request, consent or other instrument required by this
Indenture to be signed and executed by Holders may be in any number of
concurrent writings of substantially similar tenor and may be signed or executed
by such Holders in person or by agent or agents duly appointed in writing. Proof
of the execution of any such request, consent or other instrument or of a
writing appointing any such agent, or of the ownership of Notes, shall be
sufficient for any purpose of this Indenture and shall be conclusive in favor of
the Indenture Trustee, the Issuer if made in the following manner:
(a) The fact and date of the execution by any person of any
such request, consent or other instrument or writing may be proved by the
affidavit of a witness of such execution or by the certificate of any notary
public or other officer of any jurisdiction, authorized by the laws thereof to
take acknowledgments of deeds, certifying that the person signing such request,
consent or other instrument or writing acknowledged to him the execution
thereof.
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(b) The ownership of Notes shall be proved by the Note
registry maintained by the Indenture Trustee pursuant to Section 2.4 hereof. The
fact and the date of execution of any request, consent or other instrument and
the amount and distinguishing numbers of Notes held by the person so executing
such request, consent or other instrument may also be proved in any other manner
which the Indenture Trustee may deem sufficient. The Indenture Trustee may
nevertheless, in its discretion, require further proof in cases where it may
deem further proof desirable.
Any request, consent or vote of the Holder of any Note shall
bind every future Holder of the same Note and the Holder of any Note issued in
exchange therefor or in lieu thereof, in respect of anything done or suffered to
be done by the Indenture Trustee, the Issuer in pursuance of such request,
consent or vote.
In determining whether the Holders of the requisite aggregate
principal amount of Notes have concurred in any demand, request, direction,
consent or waiver under this Indenture, Notes which are owned by the Issuer or
by any other direct or indirect obligor on the Notes, or by any person directly
or indirectly controlling or controlled by, or under direct or indirect common
control with, the Issuer or any other direct or indirect obligor on the Notes,
shall be disregarded and deemed not to be Outstanding for the purpose of any
such determination, provided that, for the purpose of determining whether the
Indenture Trustee shall be protected in relying on any such demand, request,
direction, consent or waiver, only Notes which the Indenture Trustee knows to be
so owned shall be disregarded. Notes so owned which have been pledged in good
faith may be regarded as Outstanding for the purposes of this paragraph if the
pledgees shall establish to the satisfaction of the Indenture Trustee the
pledgee's right to vote such Notes and that the pledgee is not a person directly
or indirectly controlling or controlled by, or under direct or indirect common
control with, the Issuer or any other direct or indirect obligor on the Notes.
In case of a dispute as to such right, any decision by the Indenture Trustee
taken upon the advice of counsel shall provide full protection to the Indenture
Trustee.
SECTION 7.5 PROOFS OF CLAIMS AND OTHER PAPERS AND DOCUMENTS.
The Indenture Trustee may file such proofs of claims and other
papers or documents as may be necessary or advisable in order to have claims of
the Indenture Trustee and of the Holders of the Notes allowed in any judicial
proceedings relative to the Notes and the security therefor.
SECTION 7.6 DEALING WITH THE ISSUER.
The Indenture Trustee, each Eligible Lender Trustee and their
respective directors, officers, employees or agents, may in good faith buy,
sell, own, hold and deal in any of the Notes, and may join in any action which
any Holder of a Note may be entitled to take, with like effect as if the
Indenture Trustee or such Eligible Lender Trustee were not the Indenture Trustee
or an Eligible Lender Trustee, respectively, under this Indenture. The Indenture
Trustee or any Eligible Lender Trustee may in good faith hold any other form of
indebtedness of the Issuer, own, accept or negotiate any drafts, bills of
exchange, acceptances or obligations of the Issuer, and make disbursements for
the Issuer and enter into any commercial or business arrangement therewith,
including, without limitation, acting as Servicer and/or Seller of Financed
Student Loans under the Program. The Indenture Trustee may act as depository
for, and permit
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any of its officers or directors to act as a member of, or act in any other
capacity in respect to, any committee formed to protect the rights of the
Holders or to effect or aid in any reorganization growing out of the enforcement
of the Notes or of this Indenture. Notwithstanding the foregoing, except as
provided in Section 6.1 hereof, the Indenture Trustee shall not be responsible
for servicing any Financed Student Loans unless the Indenture Trustee, acting at
its sole discretion, elects to enter into a Servicing Agreement with the Issuer
or the Administrator.
SECTION 7.7 FEES AND REIMBURSEMENT OF INDENTURE TRUSTEE.
The Issuer shall promptly pay to the Indenture Trustee from
time to time, but solely from the Trust Estate, customary compensation for all
services rendered by it hereunder, and also all its reasonable expenses,
charges, and other disbursements and those of its attorneys, agents, and
employees incurred in and about the administration and execution of the trusts
hereby created. For purposes hereof, fees for ordinary services provided for by
its applicable standard fee schedules with respect to such services, in the
absence of a written agreement between the Issuer and the Indenture Trustee with
respect to its compensation for ordinary services rendered hereunder, shall be
deemed to be customary. As security for such payment, each Eligible Lender
Trustee and the Issuer in the granting clauses hereof or a Supplemental
Indenture, as the case may be, has pledged, and granted unto the Indenture
Trustee a security interest in, the Trust Estate hereunder and the Transfer and
Sale Agreement, prior to any rights of the Holders; provided, however, so long
as no Event of Default under Section 8.1(1) hereof exists, such pledge and
security interest shall secure payment of the fees and expenses of the Indenture
Trustee incurred hereunder in an amount not to exceed in any one calendar year
$100,000; provided further, however, that if an Event of Default under Section
8.1(1) exists, such pledge and security interest shall secure payment of the
fees and expenses of the Indenture Trustee incurred hereunder without limitation
as to amount so long as such Event of Default continues to exist.
SECTION 7.8 FEES AND REIMBURSEMENTS OF EACH ELIGIBLE LENDER
TRUSTEE.
The Issuer shall promptly pay to each Eligible Lender Trustee
from time to time customary compensation for all services rendered by it under
this Indenture and each Supplemental Indenture hereto and under the applicable
Eligible Lender Trust Agreement, and also all of its respective reasonable
expenses, charges and other disbursements and those of its attorneys, agents and
employees incurred relating to the administration and execution of the trusts
created by this Indenture and further trusts created by any Supplemental
Indenture. For purposes hereof, fees for ordinary services provided for by its
standard fee schedules with respect to such services, in the absence of a
written agreement between the Issuer and an Eligible Lender Trustee or with
respect to its compensation for ordinary services rendered hereunder and under
the Eligible Lender Trust Agreement shall be deemed to be customary. As security
for such payment, each Eligible Lender Trustee and the Issuer in the granting
clauses hereof or in a Supplemental Indenture, as the case may be, has pledged
and granted unto the Indenture Trustee for the fees and expenses of each
Eligible Lender Trustee hereunder and under any Supplemental Indenture and under
the applicable Eligible Lender Trust Agreement a security interest in the Trust
Estate hereunder and the Transfer and Sale Agreement, prior to any rights of the
Holders of Notes or; provided, however, so long as no Event of Default hereunder
exists, such pledge and security interest shall secure payment of such fees and
expenses of each Eligible Lender Trustee
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incurred with respect to this Indenture and any Supplemental Indenture hereto
in an amount not to exceed in any one calendar year $100,000; provided further,
however, that if an Event of Default hereunder exists, such pledge and security
interest shall secure payment of such fees and expenses, without limitation as
to amount, of each Eligible Lender Trustee so long as such Event of Default
continues to exist.
SECTION 7.9 COVENANTS OF INDENTURE TRUSTEE PURSUANT TO HIGHER
EDUCATION ACT.
The Indenture Trustee hereby represents, covenants and agrees
as follows:
1. The Indenture Trustee is an eligible lender under
the Higher Education Act and so long as any of the Notes
remain Outstanding and any Financed Student Loans are held by
the Indenture Trustee under the Indenture, the Indenture
Trustee will remain an eligible lender.
2. The Indenture Trustee will not exercise any of the
rights, duties or privileges under this Indenture
(particularly those enumerated in Article V, Article VII or
Article VIII hereof) in such manner as would cause any
Financed Student Loans to be sold, transferred, assigned or
pledged as security to any person or entity other than an
eligible lender so long as the Higher Education Act prohibits
such sale, transfer, assignment or pledge.
3. The Indenture Trustee will comply with the Higher
Education Act, and will execute such Supplemental Indentures
in accordance with Section 9.1(6) hereof as may from time to
time be required in order for this Indenture, as amended by
any such Supplemental Indenture, to be operative in a manner
consistent with amendments made to the Higher Education Act.
4. Prior to the Financing of any Student Loan, the
Indenture Trustee shall have received the certificates and
other documents required by Section 5.3 hereof.
The Indenture Trustee and the Issuer hereby acknowledge their
understanding that the Indenture Trustee has special contractual obligations to
the Secretary of Education which must be maintained and preserved in order for
the Indenture Trustee to remain an eligible lender under the Higher Education
Act, and the Indenture Trustee specifically recognizes its obligations
thereunder and in particular such obligations during the administration of the
trust created hereby.
SECTION 7.10 STATEMENTS AND REPORTS BY INDENTURE TRUSTEE OF
FUNDS AND ACCOUNTS AND OTHER MATTERS.
Within twenty (20) days following the end of each calendar
month, the Indenture Trustee shall furnish to the Issuer a statement setting
forth (to the extent applicable) with respect to such calendar month (a) the
balances held by the Indenture Trustee at the end of such month to the credit of
each Fund and Account, (b) the principal amount of Notes Outstanding at the end
of such calendar month and the principal amount thereof redeemed or paid by the
Indenture Trustee
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during such calendar month and (c) any other information which the Issuer may
reasonably request and which is customarily provided by indenture trustees under
trusts similar hereto.
Within sixty (60) days after each April 15 of each year
commencing with the April 15 following the first issuance of Notes under this
Indenture, if required by Section 313(a) of the Trust Indenture Act, the
Indenture Trustee shall transmit, pursuant to Section 313(c) of the Trust
Indenture Act, a brief report dated as of such April 15 with respect to any of
the events specified in such Section 313(a) which may have occurred since the
later of the immediately preceding April 15 or the date of this Indenture. The
Indenture Trustee shall transmit the reports required by Section 313(a) of the
Trust Indenture Act at the time specified therein. Reports pursuant to this
Section 7.10 shall be transmitted in the manner and to the Persons required by
Sections 313(c) and 313(d) of the Trust Indenture Act.
On each Distribution Date, the Indenture Trustee shall provide
to each Rating Agency and to each Noteholder of the applicable Series of Notes,
a statement substantially in the form of Exhibit A to the Terms Supplement,
setting forth at least the following information with respect to such
Distribution Date or the preceding Collection Period or Collection Periods, to
the extent applicable:
(a) the amount of the payment allocable to principal of each
Series of Notes;
(b) the amount of the payment allocable to interest on such
Series of Notes, together with the Series Interest Rates applicable with respect
thereto (indicating, whether such Series Interest Rates are based on the Formula
Rate or on the Net Loan Rate with respect to such Notes, and specifying what
each such Series Interest Rate would have been if it had been calculated using
the alternate basis);
(c) the amount of the payment, if any, allocable to any
Carryover Interest, together with the outstanding amount, if any, thereof after
giving effect to any such distribution;
(d) the Pool Balance, the Parity Percentage and the Senior
Parity Percentage, in each case as of the close of business on the last day of
the preceding Collection Period;
(e) the aggregate outstanding principal amount of each Series
of Notes as of such Distribution Date, after giving effect to distributions
allocated to principal on such Distribution Date;
(f) the estimated amount to be allocated to Program Operating
Expenses on the upcoming Distribution Date;
(g) the amount of the aggregate Realized Losses, if any, for
the preceding Collection Period and the aggregate amount, if any, received
(stated separately for interest and principal) during such Collection Period
relating to Financed Student Loans for which a Realized Loss was previously
allocated;
(h) the amount of the distribution attributable to amounts in
the Reserve Fund, the Acquisition Fund or other Account hereunder, the amount of
any other withdrawals from such Funds and other Accounts for such Distribution
Date, the balance of such Funds and other Accounts on such Distribution Date,
after giving effect to changes therein on such Distribution
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Date, the then applicable Parity Percentage and the amount of the distribution,
if any, attributable to Parity Percentage Payments;
(i) the aggregate amount, if any, paid for Financed Student
Loans purchased from the Student Loan Portfolio Fund during the preceding
Collection Period;
(j) the following information as reported to the Indenture
Trustee by the Issuer or Servicers: the number and principal amount of Financed
Student Loans, as of the end of the preceding Collection Period, that are (i) 31
to 60 days delinquent, (ii) 61 to 90 days delinquent, (iii) 91 to 120 days
delinquent, (iv) more than 120 days delinquent and (v) for which claims have
been filed with the appropriate Guarantee Agency or the Secretary of Education
and which are awaiting payment; and
(k) any other information specified in Terms Supplement.
Within the prescribed period of time for federal tax reporting
purposes after the end of each calendar year during the term of the Indenture,
the Indenture Trustee shall mail to each Person who at any time during such
calendar year was a Noteholder and received any payment thereon, a statement
containing the information required for such Noteholder's preparation of its
federal income tax returns.
SECTION 7.11 ADDITIONAL AUTHENTICATING AGENT.
The Indenture Trustee may at any time, subject to the approval
of the Issuer, appoint an authenticating agent which shall be authorized to act
on the Indenture Trustee's behalf and subject to its direction in the
authentication and delivery of Notes in connection with transfers and exchanges
of Notes as fully to all intents and purposes as though the agent had been
expressly authorized to authenticate and deliver Notes hereunder. Any
authenticating agent appointed hereunder shall be a commercial bank, trust
company or other financial institution, in each case whose debt securities are
rated "Baa3/P-3" or higher or "BBB-/A-3" or higher by a Rating Agency. For all
purposes of this Indenture, the authentication and delivery of Notes by the
agent appointed pursuant to this Indenture shall be deemed to be the
authentication and delivery of such Notes by the Indenture Trustee.
SECTION 7.12 NOTICE TO RATING AGENCIES.
The Indenture Trustee shall give written notice to any Rating
Agency that then maintains a rating on the Notes: (a) if a successor Indenture
Trustee is appointed hereunder; (b) if this Indenture is amended or
supplemented; (c) if all Notes are no longer Outstanding or are defeased; (d) if
there is a change in or an addition to Servicers or Guarantee Agencies or (e) if
an Event of Default has occurred and is continuing.
SECTION 7.13 INDENTURE TRUSTEE NOT LIABLE FOR ACTS OF THE
ISSUER; NO REPRESENTATIONS BY INDENTURE TRUSTEE.
The Indenture Trustee shall not be responsible or have any
liability for any act of the Issuer. The Indenture Trustee shall not be
responsible in any manner whatsoever for the correctness of the recitals,
statements and representations of the Issuer in this Indenture and any and all
Supplemental Indentures or in the Notes, all of which are made by the Issuer
solely.
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Except with regard to the execution of the certificate of authentication set
forth on each Note and as to the authority and eligibility of the Indenture
Trustee hereunder and due execution by the Indenture Trustee hereof, the
Indenture Trustee makes no representation as to the validity of this Indenture
or of the Notes issued hereunder, and the Indenture Trustee shall incur no
liability or responsibility in respect of any such matters.
SECTION 7.14 INDENTURE TRUSTEE NOT RESPONSIBLE FOR CALCULATION
AGENT.
The Indenture Trustee shall not be liable or responsible for
the actions of or the failure to act by the Calculation Agent under this
Indenture or under any Calculation Agent Agreement. The Indenture Trustee may
conclusively rely upon any information required to be furnished by the
Calculation Agent without undertaking any independent review or investigation of
the truth or accuracy of such information.
SECTION 7.15 INDEMNIFICATION OF THE INDENTURE TRUSTEE AND EACH
ELIGIBLE LENDER TRUSTEE.
The Indenture Trustee shall be under no obligation or duty to
perform any act at the request of any Holder or to institute or defend any suit
in respect thereof unless properly indemnified to its satisfaction as provided
in Section 7.1(a) hereof, except as otherwise provided in said Section 7.1(a).
The Indenture Trustee shall not be required to take notice, or be deemed to have
knowledge, of any default or Event of Default of the Issuer hereunder and may
conclusively assume that there has been no such default or Event of Default
(other than an Event of Default described in Section 8.1(1) hereof) unless it
shall have actual notice thereof or unless and until it shall have been
specifically notified in writing of such default or Event of Default by a Holder
or the Issuer. The Issuer agrees to indemnify (a) the Indenture Trustee for, and
to hold it harmless against, any loss, liability, or expenses incurred without
negligence or bad faith on its part, arising out of or in connection with the
acceptance or administration of the trust or trusts hereunder, including the
costs and expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder and (b) each Eligible Lender Trustee for, and to hold it harmless
against, any loss, liability or expenses incurred without negligence or bad
faith on its part, arising out of or in connection with (i) the acceptance or
administration of the trust or trusts under its respective Eligible Lender Trust
Agreement or (ii) the exercise of performance of any of its powers or duties
under this Indenture, including the costs and expenses of defending itself
against any claim or liability in connection with the exercise or performance of
any or its powers or duties under its respective Eligible Lender Trust Agreement
or hereunder; provided, however, that any such indemnification shall be payable
solely out of the Trust Estate.
All expenses and obligations incurred by the Issuer by reason
of the indemnification provided for in this Section 7.15 shall be payable solely
from, as appropriate, the Trust Estate in accordance with the provision of
Sections 5.5.1 and 5.5.4 hereof.
SECTION 7.16 INTERVENTION BY THE INDENTURE TRUSTEE.
The Indenture Trustee may intervene on behalf of the Holders,
and shall intervene if requested to do so in writing by the Holders of not less
than a majority of the aggregate principal amount of Notes then Outstanding, in
any judicial proceeding with respect to this
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Indenture to which the Issuer is a part and which in the opinion of the
Indenture Trustee and its counsel has a substantial bearing on the interest of
the Holders of the Notes. The rights and obligations of the Indenture Trustee
under this Section are subject to the approval of that intervention by a court
of competent jurisdiction. The Indenture Trustee may, but is not required to,
require that an indemnity bond satisfactory to it be provided to it in
accordance with Section 7.1(a) hereof before it takes action under this Section.
SECTION 7.17 PREFERENTIAL COLLECTION OF CLAIMS AGAINST ISSUER.
The Indenture Trustee shall comply with Section 311(a) of the
Trust Indenture Act, excluding any creditor relationship listed in Section
311(b) of the Trust Indenture Act. An Indenture Trustee who has resigned or been
removed shall be subject to Section 311(a) of the Trust Indenture Act to the
extent indicated.
SECTION 7.18 PRESERVATION OF INFORMATION; COMMUNICATION TO
HOLDERS.
The Indenture Trustee shall comply with the obligations
imposed upon it pursuant to Section 312 of the Trust Indenture Act.
Every Holder, by receiving and holding the same, agrees with
the Issuer and the Indenture Trustee that no one of the Issuer, the Indenture
Trustee, any Paying Agent or Registrar shall be held accountable by reason of
the disclosure of any such information as to the names and addresses of the
Holders in accordance with Section 312(c) of the Trust Indenture Act, regardless
of the source from which such information was derived, and that the Indenture
Trustee shall not be held accountable by reason of mailing any material pursuant
to a request made under Section 312(b) of the Trust Indenture Act.
SECTION 7.19 SURVIVAL OF CERTAIN PROVISIONS OF THE INDENTURE.
The provisions of Sections 7.1(a), 7.3, 7.4, 7.7, 7.8, 7.9 and
7.15 of this Article VII shall survive the release, discharge and satisfaction
of this Indenture.
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ARTICLE VIII
Defaults and Remedies
SECTION 8.1 EVENTS OF DEFAULT.
The following shall constitute "Events of Default":
1. Failure in the due and punctual payment of:
(i) the principal of or interest on any Note when
due, either at Final Legal Maturity or upon redemption or
otherwise (excluding, however, (a) any shortfall on a
Distribution Date other than the Legal Final Maturity of any
Series of Notes if Available Funds are insufficient to pay the
related Principal Distribution Amount on such date, (b) for so
long as any Senior Notes are Outstanding under this Indenture,
any shortfall on a Distribution Date other than the Legal Final
Maturity of any Series of Subordinate Notes if Available Funds
are insufficient to pay the related Noteholders' Interest
Distribution Amount on such date, and (c) for so long as any
Senior Notes are Outstanding under this Indenture, any deferral
in the payment of interest or principal on Subordinate Notes on a
Distribution Date other than the Legal Final Maturity of the
Subordinate Notes pursuant to Section 5.5.1 hereof and Article IV
of the Terms Supplement), or
(ii) any Issuer Exchange Payment when due,
excluding, however (a) payment in respect of an early termination
of the Exchange Agreement, (b) for so long as Senior Notes are
Outstanding under this Indenture, any shortfall on a Distribution
Date other than the Legal Final Maturity of any series of
Subordinate Notes if Available Funds are insufficient to pay any
Subordinate Issuer Exchange Payments relating to such Subordinate
Notes, and (c) for so long as any Senior Notes are Outstanding
under this Indenture, any deferral in the payment of Subordinate
Issuer Exchange Payments pursuant to Section 5.5.1 hereof and
Article IV of the Terms Supplement;
2. Failure by the Issuer in the observance and
performance of any other of the covenants and agreements of the Issuer contained
in this Indenture and the continuation of such failure for a period of 30 days
after written notice thereof is given to the Issuer from the Indenture Trustee
or from the Holders of at least a majority of the aggregate principal amount of
the Notes then Outstanding under this Indenture;
3. If an order or decree shall be entered, with the
consent or acquiescence of the Issuer, appointing a receiver or other custodian
for the Trust Estate, or approving a petition filed against the Issuer seeking
reorganization or liquidation of the Issuer under the federal bankruptcy laws or
any other similar state or federal law, or if any such order or decree, having
been entered without the consent or acquiescence of the Issuer, shall not be
vacated or discharged or stayed on appeal within thirty (30) days after the
entry thereof; or any proceeding shall be instituted, with the consent or
acquiescence of the Issuer, for the purpose of effecting a composition or other
arrangement between the Issuer and its creditors or for the purpose of adjusting
the claims of such creditors pursuant to any federal or state statute, if the
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claims of such creditors are under any circumstances payable from the Trust
Estate; or if the Issuer makes an assignment for the benefit of its creditors,
or consents to the appointment of a receiver, trustee or other custodian for
itself or for the whole or any part of the Trust Estate; or if (i) the Issuer is
adjudged insolvent by a court of competent jurisdiction, or (ii) an order,
judgment or decree be entered by any court of competent jurisdiction appointing,
without the consent of the Issuer, a receiver, trustee or other custodian of the
Issuer or of the whole or any substantial part of its property and any of the
aforesaid adjudications, orders, judgments or decrees shall not be vacated or
set aside or stayed within thirty (30) days from the date of entry thereof; or
if the Issuer shall file a petition or answer seeking reorganization or any
arrangement under the federal bankruptcy laws or any other applicable state or
federal law; or if, under the provisions of any other law for the relief or aid
of debtors, any court of competent jurisdiction shall assume custody or control
of the Issuer or of the whole or any substantial part of its property, and such
custody or control shall not be terminated within thirty (30) days from the date
of assumption of such custody or control;
4. The entry of a final judgment against the Issuer
which judgment constitutes or could result in (a) a lien or charge upon the
Available Funds or the Trust Estate equal or superior to the lien granted under
this Indenture for the benefit of the Holders of Senior, (b) if there are no
Senior Notes Outstanding, a lien or charge upon the Available Funds or the Trust
Estate equal or superior to the lien granted under this Indenture for the
benefit of the Holders of Subordinate Notes, or (c) which materially and
adversely affects the ownership, control or operation of the Program, if such
judgment will not be discharged within 60 days from the entry thereof, or if an
appeal will not be taken therefrom, or from the order, decree or process upon
which or pursuant to which such judgment was granted or entered, in such manner
as to conclusively set aside the execution or levy under such judgment, order,
decree or process, or the enforcement thereof.
Upon the occurrence of an Event of Default,
(a) in the case of an Event of Default described in clause (1)
above, so long as such Event of Default shall not have been remedied, unless the
principal of all of the Notes shall have already become due and payable, the
Indenture Trustee may, and upon written request of the Holders of at least a
majority of the aggregate principal amount of the Outstanding Directing Notes,
the Indenture Trustee shall, by written notice to the Issuer, declare the
principal of all the Notes then Outstanding and the interest and Carryover
Interest, if any, accrued thereon to be due and payable immediately, and upon
any such declaration the same shall become and be immediately due and payable,
anything contained in the Indenture or in any of the Notes to the contrary
notwithstanding; or
(b) in the case of an Event of Default described in clauses
(2) and (4) above, so long as such Event of Default shall not have been
remedied, unless the principal of all of the Notes shall have already become due
and payable, the Indenture Trustee may, and upon written request of all of the
Holders of the Directing Notes then Outstanding in the case of an Event of
Default under clause (2) above and at least a majority of the aggregate
principal amount of the Directing Notes then Outstanding in the case of an Event
of Default under clause (4) above, the Indenture Trustee shall, by written
notice to the Issuer, declare the principal of all the Notes then Outstanding
and the interest and Carryover Interest, if any, accrued thereon to be due and
payable immediately, and upon any such declaration the same shall become and be
immediately
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due and payable, anything contained in the Indenture or in any of the Notes to
the contrary notwithstanding; or
(c) in the case of any Event of Default described in clause
(3) above, so long as such Event of Default shall not have been remedied, the
principal of and all accrued interest and Carryover Interest, if any, on the
Notes then Outstanding shall become immediately due and payable without notice
or any action by the Indenture Trustee of any kind and a declaration of such
acceleration shall be deemed to have been made.
The right of the Indenture Trustee to make any such
declaration as aforesaid, however, is subject to the condition that if, at any
time after such declaration, but before any judgment or decree for the payment
of moneys due shall have been obtained or entered unless the same has been
discharged:
1. all defaults under the Notes or under the
Indenture (other than the payment of principal and interest due and payable
solely by reason of such declaration) shall have been cured to the satisfaction
of the Indenture Trustee or provision deemed by the Indenture Trustee to be
adequate shall have been made therefor, and
2. the following amounts shall either have been paid
by or for the account of the Issuer or provision satisfactory to the Indenture
Trustee shall have been made for such payment:
(i) all overdue installments of interest upon (a)
the Senior Notes for so long as any Senior Notes are Outstanding,
or (b) the Subordinate Notes if no Senior Notes are Outstanding,
and
(ii) the reasonable and proper charges, expenses
and liabilities of the Indenture Trustee, any Exchange
Counterparty and the Noteholders and their respective agents and
attorneys, and all other sums then payable by the Issuer under
this Indenture (except the principal of and interest accrued
since the next preceding Distribution Date on the Notes due and
payable solely by virtue of such declaration),
then, the Holders of at least a majority of the aggregate principal amount of
the Directing Notes then Outstanding, by written notice to the Issuer and to the
Indenture Trustee, may rescind such declaration with respect to the Notes and
annul such Event of Default with respect to the Notes, or, if the Indenture
Trustee has acted with respect to the Notes without a direction from the Holders
of at least a majority of the aggregate principal amount of the Directing Notes
Outstanding at the time of such request, and if there has not been theretofore
delivered to the Indenture Trustee written direction to the contrary by the
Holders of at least a majority of the aggregate principal amount of the
Directing Notes then Outstanding, then the Indenture Trustee may annul, by
written notice to the Issuer, such declaration and any such default with respect
to the Notes and its consequences will be annulled; provided that no such
rescission and annulment will extend to or affect any subsequent Event of
Default or impair or exhaust any right or power consequent thereon.
Upon any declaration of acceleration of the Notes hereunder,
the Indenture Trustee shall give notice of such declaration and its consequences
to Holders and to any related
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Exchange Counterparty in the manner set forth in Section 8.8 hereof. Notice of
such acceleration having been given as aforesaid, anything contained in this
Indenture or in the Notes to the contrary notwithstanding, interest and
Carryover Interest, if any, shall cease to accrue on the Notes from and after
the date set forth in such notice (which shall be not more than five (5) days
from the date of such declaration).
SECTION 8.2 INSPECTION OF BOOKS AND RECORDS.
The Issuer covenants that if an Event of Default shall have
happened and shall not have been remedied, the books of record and account of
the Issuer and the Servicers relating to the Program shall at all times, at
reasonable hours and under reasonable circumstances, be subject to the
inspection and use of the Indenture Trustee and any Holder of at least ten
percent (10%) of the aggregate principal amount of Notes then Outstanding and of
their respective agents and attorneys.
The Issuer covenants that if an Event of Default shall have
happened and shall not have been remedied, the Issuer will continue to account,
as a Indenture Trustee of an express trust, for all moneys, securities and
property pledged under this Indenture.
SECTION 8.3 APPLICATION OF MONEYS.
In the event that an Event of Default shall have occurred and
be continuing and at any time the moneys held by the Indenture Trustee will be
insufficient for the payment of (i) the principal of and interest then due on
the Notes and/or (ii) any Issuer Exchange Payment, such moneys (other than
moneys held for the payment or redemption of particular Notes, which proceeds
and moneys shall be applied solely to the payment of principal and interest to
Holders other than the Issuer) and all Available Funds received or collected
from the Trust Estate or otherwise for the benefit or for the account of Holders
and/or an Exchange Counterparty by the Indenture Trustee shall be applied first
to the payment of the costs and expenses of the proceedings resulting in the
collection of such moneys, the expenses, liabilities and advances incurred or
made by the Indenture Trustee in connection with such proceedings and to the
payment of the other reasonable and proper fees and expenses of the Indenture
Trustee under this Indenture and of such other expenses as are necessary in the
judgment of the Indenture Trustee to prevent loss of Available Funds and to
protect the interests of the Holders and/or each Exchange Counterparty, and
thereafter as follows:
1. If the principal of all of the Notes shall not have become
or has not been declared due and payable,
FIRST, to the payment to the Persons entitled thereto of all
installments of interest then due on the Senior Notes (including any interest on
overdue principal at the rate borne by the respective Senior Notes), and to each
Senior Exchange Counterparty of all Senior Issuer Exchange Payments then due, in
the order that such installments of interest and/or Senior Issuer Exchange
Payments shall have become due, and, if the amounts available shall not be
sufficient to pay in full all installments of interest and/or Senior Issuer
Exchange Payments coming due on the same date, then to the payment thereof
ratably, according to the amount due thereon, to such Persons entitled thereto,
without any discrimination or preference; and
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SECOND, to the payment to the Persons entitled thereto, of the
unpaid Noteholders' Principal Distribution Amount and/or principal due and
unpaid on the Senior Notes at the time of such payment without preference or
priority of any Senior Notes over any other Senior Notes, ratably, according to
the Noteholders' Principal Distribution Amount and/or amounts due for principal,
to such Persons entitled thereto without any discrimination or preference; and
THIRD, to the payment to the Persons entitled thereto of all
installments of interest then due on the Subordinate Notes (including any
interest on overdue principal at the interest rates borne by the respective
Subordinate Notes), and to each Subordinate Exchange Counterparty of all
Subordinate Issuer Exchange Payments then due, in the order that such
installments of interest and/or Subordinate Issuer Exchange Payments shall have
become due, and, if the amounts available shall not be sufficient to pay in full
all installments of interest and/or Subordinate Issuer Exchange Payments coming
due on the same date, then to the payment thereof ratably, according to the
amount due thereon, to such Persons entitled thereto, without any discrimination
or preference; and
FOURTH, to the payment to the Persons entitled thereto of the
unpaid Noteholders' Principal Distribution Amount and/or principal due and
unpaid on the Subordinate Notes at the time of such payment without preference
or priority of any Subordinate Notes over any other Subordinate Notes, ratably,
according to the amounts due for principal, to such Persons entitled thereto
without any discrimination or preference.
No Carryover Interest shall be paid under this Part 1 until
all payments required to be made pursuant to FIRST through FOURTH of this Part 1
have been made in full, and then if paid, shall be paid in accordance with the
provisions of Section 4.02 of the Terms Supplement.
2. If the principal of all of the Notes shall have become or
have been declared due and payable,
FIRST, to the payment of the principal and interest then due
and unpaid on the Senior Notes and all Senior Issuer Exchange Payments then due,
without preference or priority of principal over interest or over any Senior
Issuer Exchange Payment, or of interest over principal or over any Senior Issuer
Exchange Payment, of any installment of interest over any other installment of
interest, or of any Senior Note over any other Senior Note, or of any Senior
Issuer Exchange Payment over any other Senior Issuer Exchange Payment, ratably,
according to the amounts due respectively for principal and interest, and all
Senior Issuer Exchange Payments to the Persons entitled thereto without any
discrimination or preference; and
SECOND, to the payment of the principal and interest then due
and unpaid on the Subordinate Notes and all Subordinate Issuer Exchange Payments
due, without preference or priority of principal over interest or over any
Subordinate Issuer Exchange Payment, of interest over principal or over any
Subordinate Issuer Exchange Payment, of any installment of interest over any
other installment of interest, or of any Subordinate Note over any other
Subordinate Note, or of any Subordinate Issuer Exchange Payment over any other
Subordinate Issuer Exchange Payment, ratably, according to the amounts due
respectively for principal and interest, and any Subordinate Issuer Exchange
Payment to the Persons entitled thereto without any discrimination or
preference; and
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THIRD, to the payment of all Carryover Interest due and unpaid
on the Senior Notes, without preference or priority of any Senior Notes over any
other Senior Notes, ratably, according to the amounts due for Carryover
Interest, to the Persons entitled thereto without any discrimination or
preference; and
FOURTH, to the payment of all Carryover Interest due and
unpaid on the Subordinate Notes, without preference or priority to any
Subordinate Notes over any other Subordinate Notes, ratably according to the
amounts due for Carryover Interest, to the Persons entitled thereto without any
discrimination or preference.
Whenever moneys are to be applied pursuant to the foregoing
paragraphs, such moneys shall be applied at such times, and from time to time,
as the Indenture Trustee in its sole discretion shall determine, having due
regard to the amount of such moneys available for application and the likelihood
of additional moneys becoming available for such application in the future.
Whenever the Indenture Trustee shall exercise such discretion, it shall fix the
date upon which application is to be made, and upon such date interest and
Carryover Interest, if any, on the amounts of principal to be paid on such date
shall cease to accrue on the Notes. The Indenture Trustee shall give such notice
as it may deem appropriate of the fixing of any such date and shall not be
required to make payment to the Holder of any unpaid Note unless such Note is
presented for appropriate endorsement.
Whenever moneys are to be applied pursuant to the foregoing
paragraphs, irrespective of and whether other remedies authorized shall have
been pursued in whole or in part, the Indenture Trustee may cause any or all of
the Trust Estate to be sold. The Indenture Trustee may, with or without entry,
so sell the Trust Estate and all right, title, interest, claim and demand
thereto and the right of redemption thereof, in one or more parts, at any such
place or places, and at such time or times and upon such notice and terms as the
Indenture Trustee may deem appropriate and as may be required by law and apply
the proceeds thereof in accordance with the provisions of this Section 8.3. Upon
such sale, the Indenture Trustee may make and deliver to the purchaser or
purchasers a good and sufficient assignment or conveyance for the same, which
sale shall be a perpetual bar both at law and in equity against the Issuer and
all Persons claiming such properties. No purchaser at any sale shall be bound to
see to the application of the purchase money or to inquire as to the
authorization, necessity, expediency or regularity of any such sale.
Nevertheless, the Issuer and/or each Eligible Lender Trustee, if so requested by
the Indenture Trustee, shall ratify and confirm any sale or sales by executing
and delivering to the Indenture Trustee or to such purchaser or purchasers all
such instruments as may be necessary or in the judgment of the Indenture Trustee
and/or such Eligible Lender Trustee proper for the purpose which may be
designated in such request.
The Indenture Trustee shall not sell or permit the sale or
assignment of any Financed Student Loans or any interest therein (as a part of
the Trust Estate) to any Person who is not an eligible lender under the Higher
Education Act if such Act or the regulations thereunder, or either of them, in
force and effect at the time, prohibit the same.
If and whenever all overdue installments of interest on all
Notes, and all overdue Issuer Exchange Payments, together with the reasonable
and proper charges, expenses and liabilities of the Indenture Trustee, each
Exchange Counterparty, the Holders of Notes, their respective agents and
attorneys, and all other sums payable by the Issuer under this Indenture,
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including the principal of and accrued and unpaid interest on all Notes and
amounts due under each Exchange Agreement which shall then be payable by
declaration or otherwise, shall either be paid in full by or for the account of
the Issuer or provision satisfactory to the Indenture Trustee shall be made for
such payment, and all Events of Default under this Indenture or the Notes shall
be made good or secured to the satisfaction of the Indenture Trustee or
provision deemed by the Indenture Trustee to be adequate shall be made therefor,
thereupon the Issuer and the Indenture Trustee shall be restored, respectively,
to their former positions and rights under this Indenture, and all Available
Funds shall thereafter be applied as provided in Article V hereof. No such
resumption of the application of Available Funds as provided in Article V hereof
shall extend to or affect any subsequent Event of Default under this Indenture
or impair any right consequent thereon.
SECTION 8.4 SUITS AT LAW OR IN EQUITY; DIRECTION OF ACTION BY
HOLDERS.
If an Event of Default shall happen and shall not have been
remedied within the applicable time period, if any, provided herein, then and in
every such case, the Indenture Trustee either in its own name or as trustee of
an express trust, or as attorney-in-fact for the Holders and/or each such
Exchange Counterparty or in any one or more of such capacities by its agents and
attorneys, shall be entitled and empowered to proceed forthwith to institute
such suits, actions and proceedings at law or in equity against the Issuer for
the collection of all sums due in connection with the Notes and any Issuer
Exchange Payment and to protect and enforce its rights and the rights of the
Holders and each Exchange Counterparty under this Indenture for the specific
performance of any covenant herein contained, or in aid of the execution of any
power herein granted, or for an accounting as Indenture Trustee of any express
trust, or in the enforcement of any legal or equitable right as the Indenture
Trustee, being advised by counsel, shall deem most effectual to enforce any of
its rights, or to perform any of its duties under this Indenture. The Indenture
Trustee shall be entitled and empowered either in its own name or as a trustee
of an express trust, or as attorney-in-fact for the Holders and/or each such
Exchange Counterparty, or in any one or more of such capacities, to file such
proof of debt, claim, petition or other document as may be necessary or
advisable in order to have the claims of the Indenture Trustee, the Holders and
any Exchange Counterparty allowed in any equity, receivership, insolvency,
bankruptcy, liquidation, readjustment, reorganization or other similar
proceedings. For this purpose, subject to the provisions of Section 8.10 hereof,
the Indenture Trustee is hereby irrevocably appointed the true and lawful
attorney-in-fact of the respective Holders and any Exchange Counterparty (and
the successive Holders by taking and holding the same shall be conclusively
deemed to have so appointed the Indenture Trustee) with authority to make and
file in the respective names of the Holders and any Exchange Counterparty any
such proof of debt, amendment of proof of debt, claim, petition or other
document in any such proceedings, and to receive payment of any sums becoming
distributable on account thereof, and to execute any such other papers and
documents and to do and perform any and all acts and things for and on behalf of
the Holders and any Exchange Counterparty as may be necessary or advisable in
the opinion of the Indenture Trustee in order to have the respective claims of
the Indenture Trustee and the Holders and any Exchange Counterparty allowed in
any such proceedings and to receive payment of and on account of such claims.
All rights of action under this Indenture may be enforced by
the Indenture Trustee without the possession of any of the Notes or any of the
Exchange Agreements or the production thereof in any suit, action or other
proceeding.
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The Holders of at least a majority in aggregate principal
amount of the Outstanding Directing Notes shall have the right, at any time, by
an instrument or instruments in writing executed and delivered to the Indenture
Trustee, to direct the time, method and place of conducting all proceedings to
be taken in connection with the enforcement of the terms and conditions of this
Indenture; provided that (i) such direction shall not be otherwise than in
accordance with the provisions of law and this Indenture ; (ii) the Indenture
Trustee shall not determine that the action so directed would be unjustly
prejudicial to the Holders not taking part in such direction, other than by
effect of the subordination of any of their interests hereunder; and (iii) the
Indenture Trustee may take any other action deemed proper by the Indenture
Trustee which is not inconsistent with such direction.
In case the Indenture Trustee shall have proceeded to enforce
any right or remedy under this Indenture and such proceedings shall have been
discontinued or abandoned for any reason, or shall have been determined
adversely to the Indenture Trustee, then and in every such case the Issuer and
the Indenture Trustee shall be restored to their former positions and rights
hereunder with respect to the Trust Estate and the Transfer and Sale Agreement
(subject, however, to such determination), and all rights, remedies and powers
of the Indenture Trustee shall continue as if no such proceedings have been
taken.
SECTION 8.5 SUITS BY INDIVIDUAL HOLDERS OR AN EXCHANGE
COUNTERPARTY.
Except as otherwise specifically provided in this Section 8.5,
no Holder or Exchange Counterparty shall have any right to institute any suit,
action or proceeding in equity or at law for the enforcement of any provision
of, or the execution of any trust or for any remedy under, this Indenture unless
(i) such Holder or Exchange Counterparty, as the case may be, previously shall
have given to the Indenture Trustee notice of the Event of Default on account of
which such suit, action or proceeding is to be instituted, (ii) with respect to
any Exchange Counterparty, such Exchange Counterparty is not in default of its
obligations under its respective Exchange Agreement, all obligations of all the
parties under such Agreement have not been satisfied and such Exchange Agreement
has not been terminated, (iii) the Holders of not less than a majority in
aggregate principal amount of the Directing Notes then Outstanding shall have
filed a written request with the Indenture Trustee after the right to exercise
such powers or right of action, as the case may be, shall have accrued that such
suit, action or proceeding be instituted, (iv) there shall have been offered to
the Indenture Trustee reasonable security and indemnity against the costs,
expenses and liability to be incurred therein or thereby, (v) the Indenture
Trustee for a period of thirty (30) days after the receipt by it of such notice,
request and offer of indemnity shall have failed to proceed to exercise such
powers or to institute any such action, suit or proceeding, or the Indenture
Trustee shall at any time after such receipt have stated in writing that it
shall not so proceed, and (vi) no direction inconsistent with such written
request shall have been given to the Indenture Trustee pursuant to Section 8.4
hereof by the Holders of at least a majority in aggregate principal amount of
the Directing Note then Outstanding; it being understood and intended that,
except as otherwise above provided, neither an Exchange Counterparty nor one or
more Holders shall have any right in any manner whatsoever by its or their
action to affect, disturb or prejudice the pledge created by this Indenture, or
to enforce any right under this Indenture except in the manner herein provided
and that all proceedings at law or in equity shall be instituted, had and
maintained in the manner herein provided for the benefit of Holders and each
Exchange Counterparty.
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Notwithstanding any other provision in this Indenture, each
Holder and each Exchange Counterparty shall have the right, which is absolute
and unconditional as to the payment, respectively, of principal and interest and
which is limited and conditional as the payment of Carryover Interest, to
receive payment of the principal of, and interest and Carryover Interest, if
any, on such Holder's Note in accordance with the terms thereof and hereof and
of each Issuer Exchange Payment, and, upon the occurrence of an Event of Default
with respect thereto, to institute suit for the enforcement of any such payment,
and nothing in this Indenture shall affect or impair the right of any Holder or
Exchange Counterparty to enforce the payment, respectively, of the principal of
and interest and Carryover Interest, if any, on any Note at and after the
maturity thereof and of each Issuer Exchange Payment at the time, place, from
the source and in the manner provided herein.
Notwithstanding any other provision of this Indenture, the
right of any Holder of any Note to receive payment of the principal of and
interest and Carryover Interest on such Note, on or after the respective due
dates expressed in such Note, or the right of any Exchange Counterparty to
receive payment of any Issuer Exchange Payment, or to institute suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.
SECTION 8.6 REMEDIES NOT EXCLUSIVE.
No remedy by the terms of this Indenture conferred upon or
reserved to the Indenture Trustee, the Holders or an Exchange Counterparty is
intended to be exclusive of any other remedy, but each and every such remedy
shall be cumulative and shall be in addition to every other remedy given under
this Indenture or existing at law or in equity or by statute on or after the
date of adoption of this Indenture.
SECTION 8.7 WAIVERS OF DEFAULT.
No delay or omission of the Indenture Trustee, any Holder or
any Exchange Counterparty to exercise any right or power arising upon the
happening of an Event of Default shall impair any right or power or shall be
construed to be a waiver of any such Event of Default or to be an acquiescence
therein and every power and remedy given by this Article VIII to the Indenture
Trustee, the Holders or any Exchange Counterparty may be exercised from time to
time and as often as may be deemed necessary by the Indenture Trustee, such
Holders or any Exchange Counterparty. No waiver of any Event of Default
hereunder, whether by the Indenture Trustee, any Holder or any Exchange
Counterparty, shall extend to or shall affect any subsequent Event of Default or
shall impair any rights or remedies consequent thereon.
Prior to a declaration accelerating the maturity of the Notes
as provided in Section 8.1 hereof, the Holders of not less than two-thirds (2/3)
in principal amount of the Directing Notes at the time Outstanding and each
Exchange Counterparty (so long as such Exchange Counterparty is not in default
of its obligations under its respective Exchange Agreement and such Exchange
Agreement has not be terminated), or their attorneys-in-fact duly authorized,
may, on behalf of the Holders of all of the Notes and each such Exchange
Counterparty, respectively, waive any past failure under this Indenture and its
consequences with respect to the Notes, except a failure in payment of the
principal of or interest on any of the Notes. The Indenture Trustee shall, upon
the written request of an Exchange Counterparty,
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except as otherwise provided in the next succeeding paragraph, waive any failure
in the payment of an Issuer Exchange Payment to such Exchange Counterparty. No
such waiver shall extend to any subsequent or other failure or impair any right
consequent thereon.
SECTION 8.8 NOTICE OF EVENTS OF DEFAULT.
The Indenture Trustee shall, within thirty (30) days after the
Indenture Trustee becomes aware of the occurrence of an Event of Default, give
written notice to each Exchange Counterparty and all Holders by registered mail
of all Events of Default known to the Indenture Trustee, unless such Event of
Default shall have been cured before the giving of such notice.
SECTION 8.9 COMPUTATIONS.
For the purposes of this Article VIII and Section
7.1(a)(iii)(C) hereof, in determining whether the Holders of a required
principal amount of Notes have concurred in any such direction or consent, Notes
owned by the Issuer, or by any person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Issuer, shall
be disregarded, except for purposes of determining whether the Indenture Trustee
shall be protected in relying on any such direction or consent, only Notes which
the Indenture Trustee knows are so owned shall be so disregarded.
SECTION 8.10 ARTICLE SUBJECT TO CERTAIN PROVISIONS.
The provisions of this Article VIII are subject to the
provisions of Section 7.8 hereof.
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ARTICLE IX
AMENDING AND SUPPLEMENTING OF INDENTURE
SECTION 9.1 AMENDING AND SUPPLEMENTING OF INDENTURE WITHOUT
CONSENT OF HOLDERS.
The Issuer, each Eligible Lender Trustee and the Indenture
Trustee, with the written confirmation from each Rating Agency then rating the
Notes that execution of the proposed Supplemental Indenture will not adversely
affect the rating of such Rating Agency on the Notes (provided, however, that
such written confirmation shall not be required for a Supplemental Indenture
executed pursuant to item (13) of this Section 9.1), from time to time and at
any time and without the consent or concurrence of any Holder, may execute a
Supplemental Indenture for any one or more of the following purposes:
(1) To make any changes or corrections in this Indenture as
are required for the purpose of curing or correcting any ambiguity or
defective or inconsistent provision or omission or mistake or manifest
error contained in this Indenture or to insert in this Indenture such
provisions clarifying matters or questions arising under this Indenture
as are necessary or desirable;
(2) To add additional covenants and agreements of the Issuer
for the purpose of further securing the payment of the Notes;
(3) To surrender any right, power or privilege reserved to or
conferred upon the Issuer by the terms of this Indenture;
(4) To confirm as further assurance any lien, pledge, security
interest, assignment or charge, or the subjection to any lien, pledge,
security interest, assignment or charge, created or to be created by
the provisions of this Indenture;
(5) To grant to or confer upon the Holders any additional
rights, remedies, powers, authority or security that lawfully may be
granted to or conferred upon them, or to grant to or to confer upon the
Indenture Trustee for the benefit of the Holders or an Exchange
Counterparty any additional rights, duties, remedies, powers or
authority;
(6) To make such amendments to this Indenture as are required
to permit the Indenture Trustee fully to comply with the Higher
Education Act, or as required in order for this Indenture, as amended
by such Supplemental Indenture, not to be contrary to the terms of the
Higher Education Act;
(7) To make such amendments to this Indenture as may be
necessary or convenient to provide for issuance of the Notes in coupon
form or issuance and registration of the Notes in book-entry form and
to provide for other related provisions of the Notes;
(8) To modify, amend or supplement this Indenture or any
indenture supplemental hereto in such manner as to maintain the
qualification hereof or thereof under the Trust Indenture Act or any
similar federal statute hereafter in effect, and, if the
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Issuer and the Indenture Trustee so determine, to add to this Indenture
or any indenture supplemental hereto such other terms, conditions and
provisions as may be permitted by the Trust Indenture Act or similar
federal statute, and which shall not materially adversely affect the
interests of the Holders of the Notes;
(9) To authorize the establishment of agreements providing for
the pledge of funds in excess of the amount required to pay principal
of and interest on the Notes hereunder to other indentures, and for the
pledge of such funds under other indentures to this Indenture;
(10) To permit any changes or modifications hereof required
(a) by a Rating Agency to maintain the outstanding rating on the Notes
or (b) by the issuer of (i) a policy of bond insurance or (ii) any
similar financial guaranty insuring the payment of the principal of and
interest on any Notes to obtain an internal rating of at least
investment grade or as a condition of the issuance of such insurance or
guaranty;
(11) To make the terms and provisions of this Indenture,
including the lien and security interest granted herein, applicable to
an Exchange Agreement;
(12) To provide for the issuance of credit enhancement,
including, but not limited to, a policy of bond insurance, with respect
to any Series of Notes;
(13) To add any additional Eligible Lender Trustee or replace
any existing Eligible Lender Trustee; or
(14) To make any other amendment which, in the judgment of the
Indenture Trustee, is not to the material prejudice of the Indenture
Trustee, the Holders or any Exchange Counterparty.
The Issuer, each Eligible Lender Trustee and the Indenture
Trustee, from time to time and at any time without the consent or concurrence of
any Holder, may execute a Supplemental Indenture, if the Issuer determines that
the provisions of such Supplemental Indenture are necessary or desirable to
maximize Available Funds.
SECTION 9.2 AMENDMENT OF INDENTURE WITH CONSENT OF HOLDERS AND
EXCHANGE COUNTERPARTIES.
The Issuer, each Eligible Lender Trustee and the Indenture
Trustee from time to time and at any time may execute a Supplemental Indenture,
with the prior written consent of the Holders of not less than a majority in
aggregate principal amount of the Directing Notes then Outstanding (or, with
respect to any change affecting only certain Series of Notes, the Holders of a
majority in aggregate principal amount of the Outstanding Notes of such Series)
for the purpose of adding any provisions to, or changing in any manner or
eliminating any of the provisions of, this Indenture, or modifying or amending
the rights and obligations of the Issuer hereunder, or modifying or amending in
any manner the rights of an Exchange Counterparty or the Holders of Notes then
Outstanding; PROVIDED, HOWEVER, that, without the specific consent of the Holder
of each such Note which would be affected thereby, no Supplemental Indenture
amending or supplementing the provisions hereof shall: (1) change the Legal
Final Maturity for the payment of the principal of any Note or any date for the
payment of interest thereon, or
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reduce the principal amount of any Note or, except on an Interest Determination
Date, the Series Interest Rate thereon; or (2) reduce the aforesaid proportion
of Notes the Holders of which are required to consent to any Supplemental
Indenture amending or supplementing the provisions of the Indenture; or (3)
except as shall be otherwise provided herein, give to any Note any preference
over any other Notes secured hereby; or (4) except as shall be otherwise
provided herein, authorize the creation of any pledge of the Trust Estate and
all right, title and interest of the Issuer and Initial Co-Owner Eligible Lender
Trustee in the Transfer and Sale Agreement prior, superior or equal to, or
deprive the Holders or any Exchange Counterparty of, the pledge, lien, security
interest and assignment created herein for the payment of the Notes or any
Issuer Exchange Payment.
It shall not be necessary that the consents of the Holders
approve the particular form of wording of the proposed amendment or supplement
or of the Supplemental Indenture effecting such amendment or supplement, but it
shall be sufficient if such consents approve the substance of the proposed
amendment or supplement.
SECTION 9.3 EFFECTIVENESS OF SUPPLEMENTAL INDENTURE.
Upon the execution pursuant to this Article IX by the Issuer,
each Eligible Lender Trustee and the Indenture Trustee of any Supplemental
Indenture amending or supplementing the provisions of this Indenture or at such
later date as may be specified in such Supplemental Indenture, this Indenture
shall be amended or supplemented in accordance with such Supplemental Indenture.
SECTION 9.4 SUPPLEMENTAL INDENTURE AFFECTING INDENTURE
TRUSTEE.
The Indenture Trustee shall not be required to execute any
Supplemental Indenture changing, amending or modifying any of the rights, duties
and obligations of the Indenture Trustee.
SECTION 9.5 SUPPLEMENTAL INDENTURES AFFECTING CERTAIN
REQUIREMENTS OF THE HIGHER EDUCATION ACT.
No Supplemental Indenture amending the provisions of this
Indenture which prohibit the transfer of, or the granting of a security interest
in, Financed Student Loans (or any security interest therein) to persons other
than eligible lenders under the Higher Education Act shall be effective unless
the Higher Education Act shall have been amended to permit such a transfer or
grant.
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ARTICLE X
DEFEASANCE; MONEYS HELD FOR PAYMENT OF DEFEASED NOTES
SECTION 10.1 TRUST IRREVOCABLE.
The trust created by this Indenture shall be irrevocable until
the indebtedness secured hereby has been fully paid or provision for the payment
thereof has been made as provided in this Article X.
SECTION 10.2 DISCHARGE OF LIENS AND PLEDGES; NOTES NO LONGER
OUTSTANDING AND DEEMED TO BE PAID.
The Notes of the Issuer under this Indenture and the liens,
pledges, security interests, charges, trusts, assignments, covenants and
agreements of the Issuer and each Eligible Lender Trustee, herein made or
provided for, shall be fully discharged and satisfied as to: (a) any Note, when
either of items (i) or (ii) below shall have occurred; (b) any Program Operating
Expenses, when item (iii) below shall have occurred; (c) any Exchange Agreement,
when item (iv) below shall have occurred; and (d) Carryover Interest, when item
(v) below shall have occurred, and such Note, Program Operating Expense.
Exchange Agreement or Carryover Interest shall no longer be deemed to be
Outstanding hereunder (provided, however, that this Indenture shall not be
deemed defeased unless and until all of the following shall have occurred):
(i) when such Note shall have been canceled;
(ii) as to any Note not canceled, when payment of the
principal of such Note, plus interest on such
principal to the due date thereof (whether such due
date is by reason of maturity or upon redemption, or
otherwise), either:
(a) shall have been made or caused to be made in
accordance with the terms thereof, or
(b) shall have been provided for by an irrevocable
deposit with the Indenture Trustee or the
Authenticating Agent, which is irrevocably
appropriated and set aside exclusively for such
payment, and which is derived from a source which
is not a transfer of property voidable under
Sections 544 or 547 of the United States
Bankruptcy Code, (accompanied by an opinion of
counsel experienced in bankruptcy matters to that
effect), should the Issuer be a debtor under such
Code of:
(1) moneys sufficient to make such payment,
and/or
(2) Eligible Investments (which for the purpose
of this Article X shall include only those
obligations which are described in item (a)
of the definition thereof in Section 5.7
hereof and which are not subject to call for
redemption prior to maturity), maturing as to
principal and interest in such amounts and at
such times as will insure the availability
of
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sufficient moneys to make such payment,
the sufficiency of said moneys or Eligible
Investments to be verified in writing by a
firm of independent certified public
accountants;
(iii) when all Program Operating Expenses then owed by the
Issuer, including related necessary and proper fees,
compensation and expenses of the Indenture Trustee,
each Eligible Lender Trustee and the Authenticating
Agent, if any, when they shall have been paid or the
payment thereof provided for to the satisfaction of
the Indenture Trustee;
(iv) in the case of payment of any Issuer Exchange Payment
pursuant to Section 5.8 hereof and the applicable
Exchange Agreement, when payment of all Issuer
Exchange Payments due and payable to each Exchange
Counterparty under its respective Exchange Agreement
has been made or duly provided for to the
satisfaction of each Exchange Counterparty and each
Exchange Agreement has been terminated and
(v) in the case of payment of any amount of Carryover
Interest, when the first of the following occurs:
(a) payment of all such Carryover Interest that
has accrued and remains unpaid has been made
or duly provided for to the satisfaction of
such Indenture Trustee; or
(b) all amounts held in the Funds and Accounts
hereunder which are available pursuant to
the provisions of this Indenture to pay
Carryover Interest have been paid out, and
no further amounts, or assets the proceeds
of which could be used to pay Carryover
Interest, are so available hereunder to make
payment of Carryover Interest.
At such time as an Note shall be deemed to be no longer
Outstanding, hereunder, as aforesaid, such Note shall cease to accrue interest
from the due date thereof (whether such due date is by reason of maturity, or
upon redemption, or otherwise), or, in the case of any Note paid after the due
date thereof, from the date of such payment or provision for payment as
aforesaid, and shall no longer be secured by or entitled to the benefits of this
Indenture and the Holder of such Note thereafter shall be entitled only to
payment out of such moneys or Eligible Investments.
Notwithstanding the foregoing, in the case of Notes which are
to be redeemed prior to their stated maturities, no deposit under clause (b) of
subparagraph (ii) above shall constitute such payment, discharge and
satisfaction as aforesaid until proper notice of such redemption shall have been
given in accordance with Article IV hereof or provision satisfactory to the
Indenture Trustee shall have been irrevocably made for the giving of such
notice.
Anything in Article IX hereof to the contrary notwithstanding,
if moneys and/or Eligible Investments have been deposited or set aside with the
Indenture Trustee pursuant to this Section for the payment of Notes and such
Notes shall be deemed to have been paid and to be no
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longer Outstanding hereunder as provided in this Section, but such Notes shall
not have in fact been actually paid in full, no amendment to the provisions of
this Section shall be made without the consent of the Holder of each Note
affected thereby.
The Issuer may at any time cause to be canceled any Note
previously executed and delivered which the Issuer may have acquired in any
manner whatsoever, and such Note upon such surrender for cancellation shall be
deemed to be paid and no longer Outstanding hereunder.
Notwithstanding any provision of any other Section of this
Indenture which may be contrary to the provisions of this Section, all moneys or
Eligible Investments set aside and held in trust pursuant to the provisions of
this Section for the payment of the Notes described in items (a) and (c) of the
first paragraph of this Section 10.2 (including, without limitation, any accrued
but unpaid interest on items (a) and (c)) shall be applied to and used solely
for the payment of the particular Notes with respect to which such moneys and
Eligible Investments have been so set aside in trust.
In no event shall the Indenture Trustee deliver over to the
Issuer any Financed Student Loans unless the Issuer is at the time an eligible
lender under the Higher Education Act, if the Higher Education Act as then in
effect then requires the owner or holder of Student Loans to be an eligible
lender. If to be the owner or holder of Student Loans, the Issuer is required to
be an eligible lender under the Higher Education Act, it shall evidence the fact
that it is an eligible lender under the Higher Education Act by a written
certificate to that effect delivered to the Indenture Trustee. If the Higher
Education Act does not permit the Issuer to be the owner or holder of Student
Loans, then such Financed Student Loans shall remain in the name of an Eligible
Lender Trustee, or its duly appointed and qualified successor, for the benefit
of the Issuer.
SECTION 10.3 NOTES NOT PRESENTED FOR PAYMENT WHEN DUE; MONEYS
HELD FOR THE NOTES AFTER DUE DATE THEREOF.
Subject to the provisions of the next sentence of this Section
10.3, if any Note shall not be presented for payment when the principal thereof
shall become due, whether at maturity or at the date fixed for the redemption
thereof, or otherwise, and if moneys and/or Eligible Investments shall at such
due date be held by the Indenture Trustee, in trust for that purpose sufficient
and available to pay the principal of such Note, together with all interest and
Carryover Interest, if any, due and payable pursuant to the provisions of this
Indenture on such principal, to the due date thereof, or to the date fixed for
redemption thereof, as the case may be, all liability of the Issuer for such
payment shall forthwith cease, determine and be completely discharged, and
thereupon it shall be the duty of the Indenture Trustee, to hold said moneys
and/or Eligible Investments without liability to the Holder of such Note for
interest thereon, in trust for the benefit of the Holder of such Note, who
thereafter shall be restricted exclusively to said moneys and/or Eligible
Investments for any claim of whatever nature on its part on or with respect to
said Note, including for any claim for the payment thereof; provided, however,
that any such moneys and/or Eligible Investments held by the Indenture Trustee
remaining unclaimed by the Holders of such Notes for four (4) years after the
principal of the respective Notes with respect to which such moneys and/or
Eligible Investments have been so set aside has become due and payable (whether
at maturity or upon redemption or otherwise) shall be paid to the
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Issuer free from the trusts created by this Indenture, and all liabilities of
the Indenture Trustee with respect to such moneys and/or Eligible Investments
shall cease. In such event such Holders shall thereafter be deemed to be general
unsecured creditors of the Issuer for the amounts so paid to the Issuer (without
interest thereon), subject to any applicable statute of limitation.
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ARTICLE XI
MEETINGS OF HOLDERS
SECTION 11.1 PURPOSES OF MEETINGS.
A meeting of Holders of the Notes, or of the Holders of any
Series of Notes, may be called at any time and from time to time pursuant to the
provisions of this Article XI, to the extent relevant to the Holders of all of
the Notes or of Notes of that Series, as the case may be, to take any action
authorized to be taken by or on behalf of the Holders of any specified aggregate
principal amount of the Notes, or of that Series, under any provision of this
Indenture or authorized or permitted by law.
SECTION 11.2 CALL OF MEETINGS; PLACE OF MEETINGS.
The Indenture Trustee may, but is not obligated to, call at
any time a meeting of Holders pursuant to this Article to be held at any
reasonable time and place which the Indenture Trustee shall determine. Notice of
that meeting, setting forth the time and the place of the meeting and, in
general terms, the subject thereof and the action proposed to be taken, shall be
mailed not fewer than fifteen (15) or nor more than ninety (90) days prior to
the date determined for the meeting. That notice shall be mailed to each Holder
at the close of business on the 15th day preceding the mailing of the notice at
its address as it appears on the books of registry maintained by the Indenture
Trustee pursuant to Section 2.4 hereof on that 15th day preceding the mailing.
The date of determination of Holders for purposes of the mailing shall
constitute the record date for the meeting.
At any time, the Issuer or the Holders of not less than a
majority in aggregate principal amount of the Outstanding Notes, or if
applicable, the affected Series of Outstanding Notes, may request the Indenture
Trustee in writing to call a meeting of respective Holders. The request shall
describe in general terms the subject of the meeting and the action proposed to
be taken. If the Indenture Trustee shall not have mailed the notice of the
meeting within twenty (20) days after receipt of the request, the Issuer or the
Holders of Notes in the amount described above, as the case may be, may
determine a reasonable time and place of the meeting and may call the meeting to
take any action authorized in this Article, by mailing notice thereof as
provided above.
Any meetings of Holders, or the Holders of any Series of
Outstanding Notes affected by a particular matter, shall be valid without
notice, if
(a) the Holders of all Outstanding Notes, or if applicable,
the affected Series of Outstanding Notes, are present in person or by proxy; or
notice is waived before or after the meeting by the Holders of all Outstanding
Notes, or if applicable, the affected Series of Outstanding Notes, who were not
so present at the meeting; and
(b) the Issuer and the Indenture Trustee are either present by
duly authorized representatives or have waived notice, before or after the
meeting.
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SECTION 11.3 MEETINGS; REGULATIONS OF THE INDENTURE TRUSTEE.
Notwithstanding any other provisions of this Indenture, the
Indenture Trustee may make any reasonable regulations which it may deem to be
advisable for meetings of Holders, with regard to
(a) proof of the holding of Outstanding Notes and of the
appointment of proxies;
(b) the appointment and duties of inspectors of votes;
(c) recordation of the proceedings of those meetings;
(d) the execution, submission and examination of proxies and
other evidence of the right to vote; and
(e) any other matters concerning the conduct, adjournment or
reconvening of meetings which it may consider to be necessary or desirable.
The Indenture Trustee shall appoint a temporary chair of the
meeting by an instrument or document in writing, unless the meeting shall have
been called by the Issuer or Holders, in which case the Issuer or the Holders
calling the meeting, as the case may be, shall appoint a temporary chair in like
manner. A permanent chair and a permanent secretary of the meeting shall be
elected by vote of the Holders of a majority in principal amount of the
Outstanding Notes represented at the meeting and entitled to vote.
SECTION 11.4 VOTING; SPEAKING AT MEETING; RECORD OF MEETING.
To be entitled to vote at any meeting of Holders, a Person
shall
(a) be a Holder of one or more Outstanding Notes, or if
applicable, of the affected Series of Outstanding Notes, as of the record date
for the meeting as determined above; or
(b) be a person appointed in writing by an instrument or
document as proxy by a Holder, as of the record date for the meeting, of one or
more Outstanding Notes or, if applicable, of the affected Series of Outstanding
Notes.
The only Persons who shall be entitled to be present or to
speak at any meeting of Holders shall be the Persons entitled to vote at the
meeting and their counsel, any representatives of the Issuer and its counsel.
Each Holder or proxy shall be entitled to one vote for each $5,000 principal
amount of Outstanding Notes held or represented by it; provided, however, that
no vote shall be cast or counted at any meeting in respect of any Notes
challenged as not Outstanding and ruled by the chair of the meeting to be not
Outstanding.
The chair of the meeting shall have no right to vote other
than by virtue of Notes held by him or her or of instruments or documents
described above duly designating him or her as the person entitled to vote on
behalf of other Holders. Any meeting duly called pursuant to
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the provisions of this Article XI may be adjourned from time to time, and the
meeting may be held as so adjourned without further notice.
The vote upon any resolution submitted to any meeting of
Holders shall be by written ballots on which shall be subscribed the signatures
of the Holders of Outstanding Notes, or if their representatives by proxy and
the identifying number or numbers of the Outstanding Notes held or represented
by them.
The permanent chair 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 triplicate of all votes cast at the
meeting. A record in triplicate of the proceedings of each meeting of Holders
shall be prepared by the secretary of the meeting.
The original reports of the inspectors of votes on any vote by
ballot taken at the meeting and the affidavits by one or more individuals having
knowledge of the facts, setting forth a copy of the notice of the meeting and
showing that the notice was mailed as provided herein, shall be attached to each
copy of the record of the meeting prepared by the secretary. Each copy of the
record shall be signed and verified by the affidavits of the permanent chair and
the secretary of the meeting. One of the triplicate copies shall be delivered to
the Issuer and the other to the Indenture Trustee to be preserved by the
Indenture Trustee. The copy delivered to the Indenture Trustee shall have
attached thereto the ballots voted at the meeting.
Any record signed and verified as described above shall be
conclusive evidence of the matters therein stated.
SECTION 11.5 MISCELLANEOUS.
Nothing contained in this Article XI shall be deemed or
construed to authorize or permit any hindrance or delay in the exercise of any
right, remedy or power conferred upon or reserved to the Indenture Trustee or to
the Holders under any of the provisions of this Indenture or of any Series of
Notes by reason of any call of a meeting of Holders or any right, remedy or
power conferred expressly or impliedly hereunder to make a call of a meeting.
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ARTICLE XII
MISCELLANEOUS
SECTION 12.1 BENEFITS OF INDENTURE LIMITED TO ISSUER, ELIGIBLE
LENDER TRUSTEES, INDENTURE TRUSTEE, EXCHANGE COUNTERPARTY AND HOLDERS.
With the exception of rights or benefits herein expressly
conferred, nothing expressed or mentioned in or to be implied from this
Indenture or the Notes is intended or shall be construed to confer upon or give
to any Person other than the Issuer, each Eligible Lender Trustee, the Indenture
Trustee, any Exchange Counterparty and the Holders, any legal or equitable
right, remedy or claim under or by reason of or in respect to this Indenture or
any covenant, condition, stipulation, promise, agreement or provision contained
herein and all of the covenants, conditions, stipulations, promises, agreements
and provisions hereof are intended to be and shall be for and inure to the sole
and exclusive benefit of the Issuer, each Eligible Lender Trustee, the Indenture
Trustee, any Exchange Counterparty and the Holders from time to time of the
Notes as herein and therein provided.
SECTION 12.2 EFFECT OF LEGAL HOLIDAYS.
Whenever this Indenture requires any action to be taken on a
day which is not a Business Day, such action shall be taken on the next
succeeding Business Day with the same force and effect as if taken on such day.
SECTION 12.3 PARTIAL INVALIDITY.
If any one or more of the covenants or agreements or portion
thereof provided in this Indenture on the part of the Issuer, each Eligible
Lender Trustee or the Indenture Trustee to be performed should be determined by
a court of competent jurisdiction to be contrary to law, then such covenant or
covenants, or such agreement or agreements, or such portions thereof, shall be
deemed severable from the remaining covenants and agreements provided in this
Indenture and the invalidity thereof shall in no way affect the validity of the
other provisions of this Indenture or of the Notes, and the Holders shall retain
all the rights and benefits accorded to them hereunder and under any applicable
provisions of law.
SECTION 12.4 NOTICES.
Except as otherwise expressly provided herein, any notice to
or demand upon the Indenture Trustee may be served or presented, and such demand
may be made, at the principal corporate trust office of the Indenture Trustee in
Cincinnati, Ohio, at 425 Walnut Street, Cincinnati, Ohio 45202, Attention:
Corporate Trust Services, telecopier number: (513) 632-3286, or at such other
address or number as may have been filed in writing by the Indenture Trustee
with the Issuer and each Eligible Lender Trustee.
Except as otherwise expressly provided herein, any notice to
or demand upon the Initial Co-Owner Eligible Lender Trustee may be served or
presented, and such demand may be made, at the principal corporate trust office
of the Initial Co-Owner Eligible Lender Trustee in Cincinnati, Ohio, at 425
Walnut Street, Cincinnati, Ohio 45202, Attention: Corporate Trust Services,
telecopier number: (513) 632-3286, or at such other address or number as may
have
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been filed in writing by the Initial Co-Owner Eligible Lender Trustee with the
Issuer and the Indenture Trustee.
Except as otherwise expressly provided herein, any notice to
or demand upon the Issuer may be served or presented, and such demand may be
made, at the principal corporate trust office of the Co-Owner Trustee not in its
individual capacity, but solely as co-owner trustee of the Delaware Trust, at
425 Walnut Street, Cincinnati, Ohio 45202, Attention: Corporate Trust Services,
telecopier number: (513) 632-3286, or to the Issuer at such other address or
number as may have been filed in writing by the Issuer with the Indenture
Trustee and each Eligible Lender Trustee.
Copies of any notices delivered to the Indenture Trustee, the
Holders (except for any notice of redemption) or the Issuer shall be delivered
by the Indenture Trustee or the Issuer to each Exchange Counterparty at the
address filed in writing by each such Exchange Counterparty with the Indenture
Trustee.
Any notice required to be in writing shall be deemed to be in
writing if given by telex, telecopier or other method which produces a written
record.
SECTION 12.5 LAW AND PLACE OF ENFORCEMENT OF INDENTURE.
This Indenture shall be construed and interpreted in
accordance with the laws of the State and all suits and actions arising out of
this Indenture shall be instituted in a court of competent jurisdiction in the
State.
SECTION 12.6 NO RECOURSE AGAINST DIRECTORS, OFFICERS OR
EMPLOYEES OF THE ISSUER.
All representations, covenants and obligations of any
director, officer or employee of the Issuer shall be treated as representations,
covenants and obligations of the Issuer and not as made in such person's
individual capacity, and no recourse shall be had for the payment of the
principal of or interest or Carryover Interest on the Notes or for any claim
based on that payment or on this Indenture against any such person or any person
executing the Notes on behalf of the Issuer; but nothing herein contained shall
relieve any such director, officer or employee from the performance of any
official duty provided by law or by this Indenture.
SECTION 12.7 CROSS-INDEMNIFICATION.
The Issuer, the Indenture Trustee and the Eligible Lender
Trustee hereby covenant and agree to indemnify, solely from the assets held in
the Trust Estate, any trust estate held under any other indenture between the
Issuer and the Eligible Lender Trustee entered into after the date hereof, in
which trust estate are held Student Loans assigned the same Department of
Education lender identification numbers as Student Loans included in the Trust
Estate, against any offset, shortfall or other loss of payments with respect to
Student Loans in such trust estate caused solely by an offset or withholding of
payments on Student Loans in this Trust Estate that share the same Department of
Education lender identification number.
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SECTION 12.8 SUSPENSION OF MAIL.
If because of the suspension of delivery of first class mail
or, for any other reason, the Indenture Trustee shall be unable to mail by the
required class of mail any notice, request, complaint, demand or other
instrument or document required to be mailed hereby, the Indenture Trustee shall
give it in any other manner which shall approximate most effectively the mailing
thereof in accordance herewith in the judgment of the Indenture Trustee. The
giving of that notice, request, complaint, demand or other instrument or
document in that manner shall be deemed for all purposes of this Indenture to be
in compliance with the requirement for the mailing thereof. Except as provided
otherwise herein, the mailing of any notice, request, complaint, demand or other
instrument or document shall be deemed to be complete upon deposit thereof in
the mail, and the giving thereof by any other means of delivery shall be deemed
to be complete upon receipt thereof by the delivery service.
SECTION 12.9 OPINION AS TO TRUST ESTATE.
On the Date of Issuance of the Notes, the Issuer shall furnish
or cause to be furnished to the Indenture Trustee an opinion of counsel either
(i) stating that, in the opinion of such counsel, such action has been taken
with respect to the recording and filing of any financing statements and
continuation statements, as are necessary to make effective the lien and
security interest created by this Indenture in favor of the Indenture Trustee,
for the benefit of the parties described in the granting clauses and Section 5.6
of this Indenture, and reciting the details of such action, or (ii) stating that
in the opinion of such counsel, no such action is necessary to make such lien
and security interest effective.
On or before June 30 in each calendar year, beginning in 2003,
the Issuer shall furnish or cause to be furnished to the Indenture Trustee an
opinion of counsel with respect to each jurisdiction in which the Financed
Student Loans are located or a Uniform Commercial Code financing statement has
been filed by the Issuer either stating that, in the opinion of such counsel,
such action has been taken with respect to the recording, filing, re-recording
and refiling of this Indenture, any Supplemental Indentures and any other
requisite documents and with respect to the execution and filing of any
financing statements and continuation statements as is necessary to maintain the
lien and security interest created by this Indenture and reciting the details of
such action or stating that in the opinion of such counsel no such action is
necessary to maintain such lien and security interest. Such opinion of counsel
shall also describe the recording, filing, re-recording and refiling of this
Indenture, any Supplemental Indentures and any other requisite documents and
with respect to the execution and filing of any financing statements and
continuation statements that will, in the opinion of such counsel, be required
to maintain the lien and security interest of this Indenture until June 30 in
the following calendar year.
SECTION 12.10 CONFLICT WITH TRUST INDENTURE ACT.
If any provision of this Indenture limits, qualifies or
conflicts with another provision hereof that is required to be included in this
Indenture by any of the provisions of the Trust Indenture Act, such required
provision shall control. The provisions of the Trust Indenture Act, Sections 310
through 317, inclusive, that impose duties on any Person (including the
87
<PAGE> 94
provisions automatically deemed included herein unless expressly excluded by a
provision in this Indenture) are a part of and govern this Indenture, whether or
not physically contained herein.
SECTION 12.11 EFFECT OF ARTICLE AND SECTION HEADINGS AND TABLE
OF CONTENTS.
The heading or titles of the several Articles and Sections
hereof, and any table of contents appended hereto, shall be solely for
convenience of reference and shall not affect the meaning or construction,
interpretation or effect of this Indenture.
SECTION 12.12 EXECUTION OF COUNTERPARTS.
This Indenture may be executed in several counterparts, each
of which shall be regarded as an original and all of which shall constitute but
one and the same document. It shall not be necessary in proving this Indenture
to produce or account for more than one of those counterparts.
88
<PAGE> 95
IN WITNESS WHEREOF, STUDENT LOAN FUNDING 1999-A/B TRUST, by
Firstar Bank, National Association, not in its individual capacity, but solely
as Co-Owner Trustee, has caused this Indenture to be signed in its name and on
its behalf by one of its officers thereunto duly authorized and FIRSTAR BANK,
NATIONAL ASSOCIATION, as Initial Co-Owner Eligible Lender Trustee, has caused
this Indenture to be signed in its name and on its behalf by one of its officers
thereunto duly authorized; and FIRSTAR BANK, NATIONAL ASSOCIATION, to evidence
its acceptance of the trusts hereby created, has caused this Indenture to be
signed in its name and on its behalf by one of its officers thereunto duly
authorized, all as of the date first above written.
STUDENT LOAN FUNDING 1999-A/B TRUST,
By FIRSTAR BANK NATIONAL BANK, not
in its individual capacity, but
solely as Co-Owner Trustee of the
Issuer on behalf of the Issuer
By: /s/ Brian J. Gardner
Title: Vice President & Trust Officer
FIRSTAR BANK, NATIONAL ASSOCIATION,
as Initial Co-Owner Eligible Lender
Trustee
By: /s/ Brian J. Gardner
Title: Vice President & Trust Officer
FIRSTAR BANK, NATIONAL ASSOCIATION,
as Indenture Trustee
By: /s/ Brian J. Gardner
Title: Vice President & Trust Officer
89
<PAGE> 96
SCHEDULE I
SCHEDULE OF APPROVED GUARANTEE AGENCIES
---------------------------------------
<TABLE>
<CAPTION>
- ----------------------------------------------- ------------------------------------------
<S> <C>
California Student Aid Commission Nebraska Student Loan Program
- ----------------------------------------------- ------------------------------------------
Educational Credit Management Corporation New Jersey Higher Assistance Authority
- ----------------------------------------------- ------------------------------------------
Finance Authority of Maine New York State Higher Education Services
Corporation
- ----------------------------------------------- ------------------------------------------
FLORIDA DEPARTMENT OF EDUCATION, OFFICE OF Oklahoma Guaranteed Student Loan Program
STUDENT FINANCIAL ASSISTANCE(1)
- ----------------------------------------------- ------------------------------------------
Georgia Higher Education Assistance PENNSYLVANIA HIGHER EDUCATION ASSISTANCE
Corporation AGENCY(2)
- ----------------------------------------------- ------------------------------------------
GREAT LAKES HIGHER EDUCATION GUARANTY Tennessee Student Assistance Commission
AUTHORITY(1)(2)
- ----------------------------------------------- ------------------------------------------
Kentucky Higher Education Assistance Authority Texas Guaranteed Student Loan Corporation
- ----------------------------------------------- ------------------------------------------
Missouri Guaranteed Student Loan Program UNITED STUDENT AID FUNDS, INC.(1)(2)
- ----------------------------------------------- ------------------------------------------
</TABLE>
BOLD (1) = NAMED IN S-3 REGISTRATION STATEMENT
BOLD (2) = NAMED IN PROSPECTUS SUPPLEMENT
II-1
<PAGE> 97
SCHEDULE II
SCHEDULE OF APPROVED SERVICERS AND SERVICING AGREEMENTS
-------------------------------------------------------
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
Servicers Servicing Agreements
- --------- --------------------
- ---------------------------------------------------------------------------------------------------
<S> <C>
AFSA DATA CORPORATION ("AFSA") Servicing Agreement, dated as of November 1,
1998, between the Master Servicer and AFSA
and (i) the Subservicing Addendum, dated as
of August 1, 1999, among the Master Servicer,
AFSA and the Depositor and (ii) the
Subservicing Addendum, dated as of August 1,
1999, among the Master Servicer, AFSA and the
Trust.
- ---------------------------------------------------------------------------------------------------
GREAT LAKES HIGHER EDUCATION SERVICING CENTER Servicing Agreement, dated as of November 1,
("GLHESC") 1998, between the Master Servicer and GLHESC
and (i) the Subservicing Addendum, dated as
of August 1, 1999, among the Master Servicer,
GLHESC and the Depositor and (ii) the
Subservicing Addendum, dated as of August 1,
1999, among the Master Servicer, GLHESC and
the Trust.
- ---------------------------------------------------------------------------------------------------
INTUITION, INC. ("INTUITION") Servicing Agreement, dated as of July 31,
1998, between the Master Servicer and
InTuition and (i) the Subservicing Addendum,
dated as of August 1, 1999, among the Master
Servicer, InTuition and the Depositor and
(ii) the Subservicing Addendum, dated as of
August 1, 1999, among the Master Servicer,
InTuition and the Trust.
- ---------------------------------------------------------------------------------------------------
KENTUCKY HIGHER EDUCATION STUDENT LOAN Servicing Agreement, dated as of November 1,
CORPORATION ("KHESLC") 1998, between the Master Servicer and KHESLC
and (i) the Subservicing Addendum, dated as
of August 1, 1999, among the Master Servicer,
KHESLC and the Depositor and (ii) the
Subservicing Addendum, dated as of August 1,
1999, among the Master Servicer, KHESLC and
the Trust.
- ---------------------------------------------------------------------------------------------------
</TABLE>
II-1
<PAGE> 98
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
<S> <C>
PENNSYLVANIA HIGHER EDUCATION ASSISTANCE Servicing Agreement, dated as of November 1,
AGENCY ("PHEAA") 1998, between the Master Servicer and PHEAA
and (i) the Subservicing Addendum, dated as
of August 1, 1999, among the Master Servicer,
PHEAA and the Depositor and (ii) the
Subservicing Addendum, dated as of August 1,
1999, among the Master Servicer, PHEAA and
the Trust.
- ---------------------------------------------------------------------------------------------
UNIPAC SERVICE CORPORATION ("UNIPAC") Servicing Agreement, dated as of September 1,
1998, between the Master Servicer and UNIPAC
and (i) the Subservicing Addendum, dated as
of August 1, 1999, among the Master Servicer,
UNIPAC and the Depositor and (ii) the
Subservicing Addendum, dated as of August 1,
1999, among the Master Servicer, UNIPAC and
the Trust.
- ---------------------------------------------------------------------------------------------
USA GROUP LOAN SERVICES, INC. ("USAGLS") Servicing Agreement, dated as of November 1,
1998, between the Master Servicer and USAGLS
and (i) the Subservicing Addendum, dated as
of August 1, 1999, among the Master Servicer,
USAGLS and the Depositor and (ii) the
Subservicing Addendum, dated as of August 1,
1999, among the Master Servicer, USAGLS and
the Trust.
- ---------------------------------------------------------------------------------------------
</TABLE>
BOLD = NAMED IN S-3 REGISTRATION STATEMENT AND PROSPECTUS SUPPLEMENT
II-2
<PAGE> 99
EXHIBIT A
---------
to the
Indenture of Trust,
dated as of October 1, 1999, by and among
Student Loan Funding 1999-A/B Trust,
Firstar Bank, National Association,
as Initial Co-Owner Eligible Lender Trustee,
and
Firstar Bank, National Association,
as Indenture Trustee
[Addressed to Indenture Trustee]
STUDENT LOAN ACQUISITION CERTIFICATE
------------------------------------
This Student Loan Acquisition Certificate is submitted
pursuant to the provisions of the Indenture of Trust, dated as of October 1,
1999 (the "Indenture"), among Student Loan Funding 1999-A/B Trust, (the
"Issuer") by Firstar Bank, National Association, not in its individual capacity,
but solely as co-owner trustee of the Issuer (the "Co-Owner Trustee"), Firstar
Bank, National Association, as Initial Co-Owner Eligible Lender Trustee, and
Firstar Bank, National Association, as Indenture Trustee. All capitalized terms
used in this Certificate and not otherwise defined herein shall have the same
meanings given to such terms in the Indenture. In your capacity as Indenture
Trustee, you are hereby authorized and requested to disburse to
_____________________________ (the "Lender") the sum of $_______________________
for the acquisition of Student Loans. With respect to the Student Loans so to be
acquired, the Issuer hereby certifies as follows:
1. The Student Loans to be acquired (the "Acquired Student
Loans") will be further described by an updating certificate if required by the
Indenture.
2. The amount to be disbursed pursuant to this Certificate
does not exceed the aggregate of the remaining unpaid principal amount of the
Acquired Student Loans plus accrued borrower interest, if any, [plus a premium
of ____% of the unpaid principal amount of Acquired Student Loans] [plus
transfer fees of $_________] [plus interest on the amount of principal and
accrued borrower interest from the date of transfer of said Student Loans until
the date of payment in the amount of $______________, said rate of interest not
exceeding the current yield on funds in the Expense Account.
3. Each Acquired Student Loan is a Student Loan authorized so
to be acquired by the Indenture.
4. The Issuer is not, on the date hereof, in default under the
Indenture.
5. The undersigned, as the _________________________ of the
Issuer, is authorized to sign and submit this Certificate on behalf of the
Issuer.
A-1
<PAGE> 100
WITNESS my hand this _____ day of ___________________, 199_.
STUDENT LOAN FUNDING 1999-A/B Trust,
By FIRSTAR BANK, NATIONAL
ASSOCIATION, not in its individual
capacity, but solely as co-owner
trustee of the Issuer
By:_________________________________
Title:______________________________
A-2
<PAGE> 101
EXHIBIT B
---------
to the
Indenture of Trust,
dated as of October 1, 1999,
by and among
Student Loan Funding 1999-A/B Trust,
Firstar Bank, National Association,
as Initial Co-Owner Eligible Lender Trustee
and
Firstar Bank, National Association,
as Indenture Trustee
[Addressed to Indenture Trustee]
UPDATING STUDENT LOAN ACQUISITION CERTIFICATE
---------------------------------------------
This Updating Student Loan Acquisition Certificate is
submitted pursuant to the provisions of the Indenture of Trust, dated as of
October 1, 1999, (the "Indenture"), among Student Loan Funding 1999-A/B Trust
(the "Issuer"), by Firstar Bank, National Association, not in its individual
capacity, but solely as co-owner trustee of the Issuer, Firstar Bank, National
Association, as Initial Co-Owner Eligible Lender Trustee, and Firstar Bank,
National Association, as Indenture Trustee. All capitalized terms used in this
Certificate and not otherwise defined herein shall have the same meanings given
to such terms in the Indenture. In your capacity as Indenture Trustee, you have,
pursuant to a Student Loan Acquisition Certificate, dated
__________________________, been previously authorized and requested to disburse
to _____________________________ the sum of $__________ for the acquisition of
Student Loans. With respect to the Student Loans so acquired, the Issuer hereby
certifies as follows:
1. The Student Loans acquired with such moneys are those
specified in Schedule A attached hereto (the "Acquired Student Loans").
2. The remaining unpaid principal amount of each Acquired
Student Loan is as shown on Schedule A attached hereto.
3. The undersigned, as _____________________ of the Issuer, is
authorized to sign and submit this Certificate on behalf of the Issuer.
4. The additional sum of $___________ is due and owing to the
Lender for the purchase price of such Student Loans representing
_________________________________.
OR
We are herewith transmitting to you $_______________
representing an overpayment made to the Lender for such Student Loans.
B-1
<PAGE> 102
WITNESS my hand this _____ day of ___________________, 199_.
STUDENT LOAN FUNDING 1999-A/B Trust,
By FIRSTAR BANK, NATIONAL
ASSOCIATION, not in its individual
capacity, but solely as co-owner
trustee of the Issuer
By:_________________________________
Title:______________________________
B-2
<PAGE> 1
================================================================================
EXHIBIT 4.2
TERMS SUPPLEMENT
TO THE
INDENTURE OF TRUST
Dated as of October 1, 1999,
by and among
STUDENT LOAN FUNDING 1999-A/B TRUST,
A Delaware common law trust,
FIRSTAR BANK, NATIONAL ASSOCIATION,
not in its individual capacity, but solely as co-owner eligible
lender trustee for the benefit of
Student Loan Funding 1999-A/B Trust,
and
FIRSTAR BANK, NATIONAL ASSOCIATION,
as Indenture Trustee,
Dated as of October 1, 1999
Securing
STUDENT LOAN SENIOR AUCTION RATE CALLABLE ASSET-BACKED NOTES,
SERIES 1999A-1, SERIES 1999A-2, SERIES 1999A-3,
SERIES 1999A-4, SERIES 1999A-5 AND SERIES 1999A-6
and
STUDENT LOAN SUBORDINATE AUCTION RATE CALLABLE ASSET-BACKED NOTES,
SERIES 1999B-1
OF
STUDENT LOAN FUNDING 1999-A/B TRUST
================================================================================
<PAGE> 2
TABLE OF CONTENTS
Page
ARTICLE I
Definitions
-----------
ARTICLE II
Authorization, Terms and Provisions of Notes
--------------------------------------------
<TABLE>
<S> <C>
SECTION 2.01 Authorization of Notes; Notes to Constitute Special Obligations...........................19
SECTION 2.02 Terms of Notes............................................................................19
SECTION 2.03 Determination of Series Interest Rates on the Notes.......................................23
SECTION 2.03.1 Determination of the Series Interest Rate on the Notes.........................23
SECTION 2.03.1.1 Auction Procedures..................................................24
SECTION 2.03.1.2 Application of Interest Payments for the Notes......................33
SECTION 2.03.1.3 Calculation of Maximum Auction Rate, All Hold Rate, Net Loan
Rate, Applicable LIBOR Rate and Non-Payment Rate.............................33
SECTION 2.03.1.4 Notification of Rates, Amounts and Payment Dates....................34
SECTION 2.03.1.5 Auction Agent.......................................................35
SECTION 2.03.1.6. Broker-Dealers.....................................................36
SECTION 2.03.1.7 Changes in Auction Period or Periods................................36
SECTION 2.03.1.8 Changes in the Interest Determination Date..........................37
SECTION 2.03.1.9 Auction Period Conversions..........................................38
SECTION 2.03.1.10 Mandatory Tender and Purchase of Notes in connection with
Auction Period Conversion....................................................40
SECTION 2.03.1.11 Remarketing Agent Notes............................................41
SECTION 2.03.2 Carryover Interest..............................................................42
SECTION 2.03.3 Additional Provisions Regarding Series Interest Rate...........................43
SECTION 2.04 Forms of Notes and Instructions for Payment...............................................44
</TABLE>
ARTICLE III
Redemption of the Notes
-----------------------
<TABLE>
<S> <C>
SECTION 3.01 Redemption of Notes in General............................................................45
SECTION 3.02 Optional Redemption of Notes prior to the Legal Final Maturity.............................45
</TABLE>
i
<PAGE> 3
ARTICLE IV
Disposition of Proceeds of the Notes; Collection Account; Acquisition Fund
--------------------------------------------------------------------------
<TABLE>
<S> <C>
SECTION 4.01 Disposition of Proceeds of the Notes......................................................47
SECTION 4.02 Disposition of Collection Account.........................................................47
SECTION 4.03 Disposition of Acquisition Fund...........................................................53
</TABLE>
ARTICLE V
Miscellaneous
-------------
<TABLE>
<S> <C>
SECTION 5.01 Execution and Delivery of this Terms Supplement...........................................54
SECTION 5.02. Effect of Terms Supplement on Indenture..................................................54
SECTION 5.03 Execution of Counterparts.................................................................54
SECTION 5.04. Governing Law............................................................................54
SCHEDULE I TERMS OF SENIOR NOTES; TERMS OF SUBORDINATE NOTES
EXHIBIT A DISTRIBUTION STATEMENT
EXHIBIT B FORM OF SENIOR NOTE
EXHIBIT C FORM OF SUBORDINATE NOTE
EXHIBIT D INSTRUCTION FOR PAYMENT OF INTEREST
EXHIBIT E NOTICE OF PAYMENT DEFAULT
EXHIBIT F NOTICE OF CURE OF PAYMENT DEFAULT
EXHIBIT G NOTICE OF PROPOSED AUCTION PERIOD ADJUSTMENT
EXHIBIT H NOTICE ESTABLISHING AUCTION PERIOD ADJUSTMENT
EXHIBIT I NOTICE OF CHANGE IN RATE DETERMINATION DATE
EXHIBIT J NOTICE OF PROPOSED AUCTION PERIOD CONVERSION
EXHIBIT K NOTICE ESTABLISHING AUCTION PERIOD CONVERSION
</TABLE>
ii
<PAGE> 4
TERMS SUPPLEMENT
THIS TERMS SUPPLEMENT, dated as of October 1, 1999 (this "Terms
Supplement"), by and among STUDENT LOAN FUNDING 1999-A/B TRUST, a common law (as
opposed to statutory) trust created under the laws of the State of Delaware (the
"Issuer"), by FIRSTAR BANK, NATIONAL ASSOCIATION, a national banking association
duly organized and existing under the laws of the United States, having its
principal corporate trust office in Cincinnati, Ohio, not in its individual
capacity, but solely as Co-Owner Trustee of the Issuer (the "Co-Owner Trustee"),
FIRSTAR BANK, NATIONAL ASSOCIATION, not in its individual capacity, but solely
in its capacity as the initial eligible lender trustee holding title to the
Financed Student Loans on behalf of the Issuer (the "Initial Co-Owner Eligible
Lender Trustee"), and FIRSTAR BANK, NATIONAL ASSOCIATION, a national banking
association duly organized and existing under the laws of the United States,
having its principal corporate trust office in Cincinnati, Ohio (the "Indenture
Trustee"), as Indenture Trustee under that certain Indenture of Trust, dated as
of October 1, 1999 (as hereafter amended and supplemented by Supplemental
Indentures, the "Base Indenture"), among the Issuer, the Initial Co-Owner
Eligible Lender Trustee and the Indenture Trustee, amends and supplements the
Base Indenture (as amended and supplemented by this Terms Supplement, the
"Indenture"). Words and terms used as defined words and terms herein and not
otherwise defined herein shall have the meanings given them in the Base
Indenture. (References to the name "Student Loan Funding 1999-A/B Trust" or to
the term "Issuer" in this Terms Supplement, including the Schedules and Exhibits
attached hereto and made a part hereof, shall mean the Co-Owner Trustee, not in
its individual capacity, but solely as Co-Owner Trustee of the Issuer on behalf
of the Issuer.)
WITNESSETH:
WHEREAS, Section 2.1 of the Base Indenture provides, among
other things, that the Issuer, the Initial Co-Owner Eligible Lender Trustee and
the Indenture Trustee shall enter into a Terms Supplement thereto for the
purposes of (i) authorizing the issuance of a Series of Notes thereunder and
(ii) specifying certain terms of such Notes; and
WHEREAS, the Issuer has determined to provide hereunder for
the issuance of (i) its Student Loan Senior Auction Rate Callable Asset-Backed
Notes, Series 1999A-1 (the "Series 1999A-1 Notes"), (ii) Student Loan Senior
Auction Rate Callable Asset-Backed Notes, Series 1999A-2 (the "Series 1999A-2
Notes"), (iii) Student Loan Senior Auction Rate Callable Asset-Backed Notes,
Series 1999A-3 (the "Series 1999A-3 Notes"), (iv) Student Loan Senior Auction
Rate Callable Asset-Backed Notes, Series 1999A-4 (the "Series 1999A-4 Notes"),
(v) Student Loan Senior Auction Rate Callable Asset-Backed Notes, Series 1999A-5
(the "Series 1999A-5 Notes"), (vi) Student Loan Senior Auction Rate Callable
Asset-Backed Notes, Series 1999A-6 (the "Series 1999A-6 Notes" and, together
with the Series 1999A-1 Notes, the Series 1999A-2 Notes, the Series 1999A-3
Notes, the Series 1999A-4 Notes and the Series 1999A-5 Notes, the "Series 1999A
Notes" or the "Senior Notes"), and (vii) its Student Loan Subordinate Auction
Rate Callable Asset-Backed Notes, Series 1999B-1 (the "Series 1999B-1 Notes" or
the "Subordinate Notes" and, collectively with the Senior Notes, the "Notes");
and
1
<PAGE> 5
WHEREAS, the Issuer, the Initial Co-Owner Eligible Lender
Trustee and the Indenture Trustee desire to execute and deliver this Terms
Supplement in order to authorize the issuance of each Series of the Notes and to
declare the terms upon which each Series of the Notes will be issued; and
2
<PAGE> 6
NOW, THEREFORE, THIS TERMS SUPPLEMENT WITNESSETH:
That it is hereby mutually covenanted and agreed that the
terms and conditions upon which each Series of the Notes are executed,
authenticated, issued, delivered, secured and accepted by all Persons who shall
from time to time be or become the Holders thereof, and the trusts and
conditions upon which the Trust Estate is to be held and disbursed, are as set
forth herein and in the Base Indenture:
3
<PAGE> 7
ARTICLE I
DEFINITIONS
Unless the context shall clearly indicate some other meaning
or may otherwise require, the terms defined in this Article I shall, for all
purposes of the Base Indenture and of any indenture or other instrument
amendatory or supplemental thereto, have the meanings herein specified (terms
used herein as defined terms and not defined herein, shall have the meanings
ascribed thereto in the Base Indenture):
"ALL HOLD RATE" shall mean eighty-five percent (85%) of the
Applicable LIBOR Rate.
"APPLICABLE LIBOR RATE" shall mean (a) for Auction Periods of
35 days or less, One-Month LIBOR, (b) for Auction Periods of more than 35 days
but less than 91 days, Three-Month LIBOR, (c) for Auction Periods of more than
90 days but less than 181 days, Six-Month LIBOR, and (d) for Auction Periods of
more than 180 days, One-Year LIBOR. As used in this definition and otherwise
herein, the terms "Three-Month LIBOR", "Six-Month LIBOR" or "One-Year LIBOR,"
means the rate of interest per annum equal to the rate per annum with respect to
United States dollar deposits in the London interbank market having a maturity
of three months, six months or one year, respectively.
"AUCTION" shall mean the implementation of the Auction
Procedures on an Interest Determination Date.
"AUCTION AGENT" shall mean the Initial Auction Agent unless
and until a Substitute Auction Agent Agreement becomes effective, after which
the Auction Agent shall mean the Substitute Auction Agent.
"AUCTION AGENT AGREEMENT" shall mean the Initial Auction Agent
Agreement unless and until a Substitute Auction Agent Agreement is entered into,
after which Auction Agent Agreement shall mean such Substitute Auction Agent
Agreement.
"AUCTION AGENT FEE" shall have the meaning set forth in the
applicable Auction Agent Agreement.
"AUCTION AGENT FEE RATE" shall have the meaning set forth in
the applicable Auction Agent Agreement.
"AUCTION PERIOD" shall mean with (i) respect to the Series
1999A-1 Notes, a period generally consisting of seven (7) days beginning on a
Wednesday and ending on the following Tuesday, as the same may be changed
pursuant to Section 2.03.1.7 hereof; (ii) with respect to the Series 1999A-2
Notes, a period generally consisting of seven (7) days beginning on a Thursday
and ending on the following Wednesday, as the same may be changed pursuant to
Section 2.03.1.7 hereof; (iii) with respect to the Series 1999A-3 Notes, a
period generally consisting of twenty-eight (28) days beginning on a Tuesday and
ending on the fourth Monday
4
<PAGE> 8
thereafter, as the same may be changed pursuant to Section 2.03.1.7 hereof; (iv)
with respect to the Series 1999A-4 Notes, a period generally consisting of
twenty-eight (28) days beginning on a Tuesday and ending on the fourth Monday
thereafter, as the same may be changed pursuant to Section 2.03.1.7 hereof; (v)
with respect to the Series 1999A-5 Notes, a period generally consisting of
twenty-eight (28) days beginning on a Wednesday and ending on the fourth Tuesday
thereafter, as the same may be changed pursuant to Section 2.03.1.7 hereof; (vi)
with respect to the Series 1999A-6 Notes, a period generally consisting of
twenty-eight (28) days beginning on a Friday and ending on the fourth Thursday
thereafter, as the same may be changed pursuant to Section 2.03.1.7 hereof; and
(vii) with respect to the Series 1999B-1 Notes, a period generally consisting of
twenty-eight (28) days beginning on a Tuesday and ending on the fourth Monday
thereafter, as the same may be changed pursuant to Section 2.03.1.7 hereof.
"AUCTION PERIOD ADJUSTMENT" shall mean the change, from time
to time, in the length of an Auction Period and, specifically, (i) with respect
to an Auction Period between seven (7) and ninety-one (91) days, inclusive, from
such an Auction Period to any other Auction Period between seven (7) and
ninety-one (91) days, inclusive, or (ii) with respect to an Auction Period
between ninety-two (92) days and the Legal Final Maturity of a Series of Notes,
inclusive, from such an Auction Period to an Auction Period between ninety-two
(92) days and the Legal Final Maturity of a Series of Notes, inclusive, if such
latter Auction Period is no more than three (3) months shorter or no more than
three (3) months longer than the Auction Period for such series of Notes
established either at the initial issuance of such Series of Notes or pursuant
to an Auction Period Conversion, whichever has occurred most recently.
"AUCTION PERIOD COMMENCEMENT DATE" shall mean the first
Business Day following each Interest Determination Date.
"AUCTION PERIOD CONVERSION" shall mean with respect to a
Series of Notes, the change in the length of an Auction Period (i) from an
Auction Period between seven (7) and ninety-one (91) days, inclusive, to an
Auction Period between ninety-two (92) days and the Legal Final Maturity of such
Series of Notes, inclusive, (ii) from an Auction Period between ninety-two (92)
days and the Legal Final Maturity of such Series of Notes, inclusive, to an
Auction Period between seven (7) and ninety-one (91) days, inclusive, or (iii)
from an Auction Period between ninety-two (92) days and the Legal Final Maturity
of such Series of Notes, inclusive, to an Auction Period between ninety-two (92)
and the Legal Final Maturity of such Series of Notes, inclusive, if such latter
Auction Period is at least three (3) months shorter or at least three (3) months
longer than the Auction Period for such Series of Notes established either upon
initial issuance of such Series of Notes or pursuant to an Auction Period
Conversion, whichever has occurred most recently.
"AUCTION PERIOD CONVERSION DATE" shall mean, with respect to a
Series of Notes, the date on which an Auction Period Conversion is effective
which shall be an Auction Period Distribution Date.
"AUCTION PERIOD DISTRIBUTION DATE" shall mean, with respect to
a Series of Notes, the Business Day immediately following the expiration of each
related Auction Period,
5
<PAGE> 9
commencing on the Initial Distribution Date for each Series of Notes; provided,
however, that in connection with any Auction Period Adjustment or Auction Period
Conversion, the Auction Period Distribution Date may be changed.
"AUCTION PROCEDURES" shall mean the procedures set forth in
Section 2.03.1 hereof and all subsections thereof.
"AUCTION RATE" shall mean with respect to the Series Interest
Rate on a Series of Notes, the interest rate that results from implementation of
the applicable Auction Procedures.
"AUTHORIZED DENOMINATIONS" shall mean $50,000 and integral
multiples of $50,000 in excess thereof.
"BID AUCTION RATE" shall have the meaning described in Section
2.03.1.1(c)(i) hereof.
"BIDDER" shall have the meaning set forth in Section
2.03.1.1(a)(i) hereof.
"BOOK-ENTRY FORM" or "BOOK-ENTRY SYSTEM" shall mean a form or
system under which (i) the beneficial right to principal and interest may be
transferred only through a book entry, (ii) physical Series 1999A-1 Notes,
Series 1999A-2 Notes, Series 1999A-3 Notes, Series 1999A-4 Notes, Series 1999A-5
Notes, Series 1999A-6 Notes, Series 1999B-1 Notes or notes in registered form
are issued only to a Depository or its nominee as registered owner, with such
Notes "immobilized" to the custody of the Depository, and (iii) the book entry
is the record that identifies the owners of beneficial interests in that
principal and interest and Carryover Interest, if any.
"BROKER-DEALER" shall mean Salomon Smith Barney Inc. and Banc
of America Securities LLC or any other broker or dealer (each as defined in the
Securities Exchange Act of 1934, as amended), commercial bank or other entity
permitted by law to perform the functions required of a Broker-Dealer set forth
in the Auction Procedures that (a) is a Participant (or an affiliate of a
Participant), (b) has been appointed as such by the Issuer pursuant to Section
2.03.2.6 hereof, and (c) has entered into a Broker-Dealer Agreement that is in
effect on the date of reference.
"BROKER-DEALER AGREEMENT" shall mean each agreement between
the Auction Agent and a Broker-Dealer, approved by the Issuer, pursuant to which
the Broker-Dealer agrees to participate in Auctions as set forth in the Auction
Procedures, as from time to time amended or supplemented. Each Broker-Dealer
Agreement from and after the effective date of this Indenture shall be
substantially in the form of the Broker-Dealer Agreement, dated as of October 1,
1999, between Bankers Trust Company, as Auction Agent, and Salomon Smith Barney,
Inc., as Broker-Dealer, and of the Broker-Dealer Agreement, dated as of October
1, 1999, between Bankers Trust Company, as Auction Agent, and Banc of America
Securities LLC, as Broker-Dealer.
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"BROKER-DEALER FEE" shall have the meaning set forth in the
applicable Auction Agent Agreement.
"BROKER-DEALER FEE RATE" shall have the meaning set forth in
the applicable Auction Agent Agreement.
"CALCULATION AGENT" shall mean Salomon Smith Barney, Inc., as
Calculation Agent under the Calculation Agent Agreement, or any successor to it
as such agent under the Calculation Agent Agreement.
"CALCULATION AGENT AGREEMENT" shall mean the Calculation Agent
Agreement, dated as of October 1, 1999, among the Issuer, the Calculation Agent
and the Indenture Trustee, in each case as originally executed and as from time
to time amended or supplemented in accordance with the terms thereof and the
Indenture.
"CEDEL" shall mean a professional depository incorporated
under the laws of Luxembourg which holds securities for its participating
organizations and facilitates the clearance and settlement of securities
transactions between Cedel Participants through electronic book-entry.
"CEDEL PARTICIPANTS" means recognized financial institutions
around the world that utilize the services of Cedel, including initial
purchasers, securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations and may include the Initial
Purchasers.
"COLLECTION PERIOD" shall mean (i) initially the period
commencing on Date of Issuance and running through and including November 30,
1999, and (ii) thereafter a period of one calendar month commencing and
including the date next following the end of the preceding Collection Period.
"DATE OF ISSUANCE" shall mean with respect to each Series of
the Notes, October 28, 1999, the date of their initial issuance and delivery.
"DEPOSITORY" shall mean any securities depository that is a
clearing agency under federal law operating and maintaining a Book-Entry System
to record beneficial ownership of the right to principal and interest, and to
effect transfers of Notes, in Book-Entry Form, and includes and means initially
(i) DTC, if the Notes are offered in the United States, and (ii) Cedel or
Euroclear, if the Notes are offered in Europe.
"DEPOSITORY PARTICIPANT" shall mean any broker-dealer, bank or
other financial institution for which a Depository holds Notes from time to time
as securities depository.
"DISTRIBUTION DATE" shall mean (i) with respect to each Series
of Notes, an Auction Period Distribution Date, (ii) any date on which an Issuer
Exchange Payment is due and payable, and (iii) the Legal Final Maturity of each
Series of Notes, or if such day is not a Business Day, on the next succeeding
Business Day.
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<PAGE> 11
"DTC" shall mean The Depository Trust Company (a limited
purpose trust company), New York, New York.
"EUROCLEAR" shall mean Morgan Guaranty Trust Company of New
York, Brussels, Belgium office.
"EXISTING HOLDER" shall mean, (i) with respect to and for the
purpose of dealing with the Auction Agent in connection with the Auction, a
Person who is a Broker-Dealer listed in the Existing Holder Registry at the
close of business on the Business Day immediately preceding such Auction, and
(ii) with respect to and for the purpose of dealing with the Broker-Dealer in
connection with an Auction, a Person who is a beneficial owner of Notes.
"EXISTING HOLDER REGISTRY" shall mean the registry of Persons
who are holders of Notes maintained by the Auction Agent as provided in the
Auction Agent Agreement.
"FORMULA RATE" shall mean, (i) with respect to the Series
1999A-1 Notes, the lesser of the Auction Rate for such Interest Accrual Period
and 17%, (ii) with respect to the Series 1999A-2 Notes, the lesser of the
Auction Rate for such Interest Accrual Period and 17%, (iii) with respect to the
Series 1999A-3 Notes, the lesser of the Auction Rate for such Interest Accrual
Period and 17%, (iv) with respect to the Series 1999A-4 Notes, the lesser of the
Auction Rate for such Interest Accrual Period and 17%, (v) with respect to the
Series 1999A-5 Notes, the lesser of the Auction Rate for such Interest Accrual
Period and 17%, (vi) with respect to the Series 1999A-6 Notes, the lesser of the
Auction Rate for such Interest Accrual Period and 17%, and (vii) with respect to
the Series 1999B-1 Notes, the lesser of the Auction Rate for such Interest
Accrual Period and 17%.
"INDIRECT PARTICIPANT" shall mean any Person which has
indirect access to a Clearing Agency, such as securities brokers and dealers,
banks, and trust companies that clear through or maintain a custodial
relationship with a Participant, either directly or indirectly.
"INITIAL AUCTION AGENT" shall mean Bankers Trust Company, New
York, New York, its successors and assigns.
"INITIAL AUCTION AGENT AGREEMENT" shall mean the Auction Agent
Agreement, dated as of October 1, 1999, by and among the Issuer, the Indenture
Trustee and the Initial Auction Agent, including any amendment thereof or
supplement thereto, relating to the Notes.
"INITIAL DISTRIBUTION DATE" shall mean, (i) as to the Series
1999A-1 Notes, November 10, 1999, (ii) as to the Series 1999A-2 Notes, November
12, 1999, (iii) as to the Series 1999A-3 Notes, November 23, 1999, (iv) as to
the Series 1999A-4 Notes, December 14, 1999, (v) as to the Series 1999A-5
Notes, January 19, 2000, (vi) as to the Series 1999A-6 Notes, January 21, 2000,
and (vii) as to the Series 1999B-1 Notes, November 23, 1999.
"INITIAL INTEREST DETERMINATION DATE" shall mean (i) as to the
Series 1999A-1 Notes, November 9, 1999, (ii) as to the Series 1999A-2 Notes,
November 10, 1999, (iii) as to the
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<PAGE> 12
Series 1999A-3 Notes, November 22, 1999, (iv) as to the Series 1999A-4 Notes,
December 13, 1999, (v) as to the Series 1999A-5 Notes, January 18, 2000, (vi)
as to the Series 1999A-6 Notes, January 20, 2000, and (vii) as to the Series
1999B-1 Notes, November 22, 1999.
"INTEREST ACCRUAL PERIOD" shall mean with respect to each
Series of Notes, the period of time in which interest may accrue commencing
initially on the Date of Issuance for such Series of Notes and ending on the day
before the Initial Distribution Date for each Series and thereafter commencing
on each Auction Period Distribution Date for such Series of Notes and ending on
the day before the next Auction Period Distribution Date for such Series.
"INTEREST DETERMINATION DATE" shall mean (i) the Initial
Interest Determination Date and thereafter (ii) the Business Day on which the
Auction Rate is determined by an Auction and that immediately precedes the first
day of each Interest Accrual Period, other than (1) an Interest Accrual Period
which commences on an Auction Period Conversion Date or an Auction Period
Adjustment Date; (2) each Interest Accrual Period commencing after the ownership
of the Notes is no longer maintained in Book-Entry Form; (3) each Interest
Accrual Period commencing after the occurrence and during the continuance of a
Payment Default; provided, however, that if such day is not a Business Day, then
the next preceding Business Day.
"LEGAL FINAL MATURITY" shall mean with respect to (i) the
Series 1999A-1 Notes, December 1, 2020, (ii) the Series 1999A-2 Notes, December
1, 2020; (iii) the Series 1999A-3 Notes, December 1, 2020; (iv) the Series
1999A-4 Notes, December 1, 2020; (v) the Series 1999A-5 Notes, December 1, 2020;
(vi) the Series 1999A-6 Notes, December 1, 2020; and (vii) the Series 1999B-1
Notes, December 1, 2027.
"LIBOR" shall mean, the rate of interest per annum equal to
the rate per annum at which United States dollar deposits having a particular
maturity are offered to prime banks in the London interbank market which appears
on the Telerate Page 3750 as of approximately 11:00 a.m., Greenwich Mean time,
on the Interest Determination Date. If such rate does not appear on Telerate
Page 3750, the rate for that day will be determined on the basis on the Reuters
Screen LIBOR Page. If at least two such quotations appear, LIBOR shall be the
arithmetic mean (rounded to the nearest one-hundredth of one percent (.01%)) of
such offered rates. If fewer than two such quotes appear, LIBOR with respect to
an Interest Accrual Period will be determined at approximately 11:00 a.m.,
London time, on such applicable Interest Determination Date on the basis of the
rate at which deposits in United States dollars having such particular maturity
are offered to prime banks in the London interbank market by four major banks in
the London interbank market selected by the Calculation Agent and in a principal
amount of not less than U.S. $1,000,000 and that is representative for a single
transaction in such market at such time. The Calculation Agent will request the
principal London office of each of such banks to provide a quotation of its
rate. If at least two quotations are provided, LIBOR shall be the arithmetic
mean (rounded to the nearest one-hundredth of one percent (.01%)) of such
offered rates. If fewer than two quotations are provided, LIBOR with respect to
such Interest Accrual Period shall be the arithmetic mean (rounded to the
nearest one-hundredth of one percent (.01%)) of the rates quoted at
approximately 11:00 a.m., New York City time on such applicable Interest
Determination Date by three major banks in New York, New York selected by the
Calculation Agent for loans in United States dollars to leading European banks
having such particular
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<PAGE> 13
maturity and in a principal amount equal to an amount of not less than U.S.
$1,000,000 and that is representative for a single transaction in such market at
such time; provided, however, that if the banks selected as aforesaid are not
quoting as mentioned in this sentence, LIBOR in effect for the applicable
Interest Accrual Period shall be LIBOR in effect for the immediately preceding
Interest Accrual Period.
"LONDON BANKING DAY" shall mean any business day on which
dealings in deposits in United States dollars are transacted in the London
interbank market.
"MAXIMUM AUCTION RATE" shall mean (i) prior to an Auction
Period Conversion, (a) the Applicable LIBOR Rate plus 1.50% (if both of the
ratings assigned by the Rating Agencies to the applicable Series of Notes are
"Aa3," "AA-" or better) or (b) the Applicable LIBOR Rate plus 2.50% (if any one
of the ratings assigned by Rating Agencies to the applicable Series of Notes is
less than "Aa3" or "AA-" but at least "A") or (c) the Applicable LIBOR Rate plus
3.50% (if any one of the ratings assigned by the Ratings Agencies to the
applicable Series of Notes is less than "A") and (ii) after an Auction Period
Conversion, the rate set forth in the Supplemental Indenture executed in
connection with the Auction Period Conversion. For purposes of the Auction Agent
and the Auction Procedures, the ratings referred to in this definition shall be
the last ratings of which the Auction Agent has been given notice pursuant to
the Auction Agent Agreement.
"NET LOAN RATE" shall mean with respect to any Interest
Accrual Period for a Series of the Notes, the annualized percentage rate
determined by the Administrator on each Interest Determination Date by
multiplying (a) the ratio of 360 to the actual number of days in such Interest
Accrual Period, and (b) the ratio of (i) Expected Interest Collections for the
applicable Collection Period less Program Operating Expenses with respect to
such Collection Period, to (ii) the Pool Balance as of the first day of such
Collection Period. In calculating the Net Loan Rate, the applicable Collection
Period for the Notes is the second preceding Collection Period prior to the
applicable Auction Period Distribution Date.
"NON-PAYMENT RATE" on any date of determination, shall mean
(a) prior to an Auction Period Conversion, One-Month LIBOR plus 1.50% and (b)
after an Auction Period Conversion, the interest rate per annum set forth in the
definition thereof in the Supplemental Indenture executed in connection with the
Auction Period Conversion.
"NOTICE OF FEE CHANGE" shall mean a notice of a change in the
Auction Agent Fee Rate or the Broker-Dealer Fee Rate substantially in the form
of Exhibit D to the applicable Auction Agent Agreement.
"ONE-MONTH LIBOR" shall mean LIBOR with respect to U.S.
denominated deposits having a maturity of one (1) month.
"PARITY PERCENTAGE" shall have the meaning given such term in
the Base Indenture.
"PARITY PERCENTAGE PAYMENT" shall mean those principal amounts
required to be
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<PAGE> 14
paid on the Notes pursuant to Section 4.02 hereof until the Parity Percentage is
101%.
"PARTICIPANT" shall mean a Person who is a participant in or
member of the Depository, as determined by the rules or bylaws of the
Depository.
"PAYMENT DEFAULT" shall mean (a) a default in the due and
punctual payment of any installment of interest on a Series of Notes or (b) a
default in the due and punctual payment of any interest on and principal of a
Series of Notes at their Legal Final Maturity.
"POTENTIAL HOLDER" shall mean any Person (including an
Existing Holder that is (i) a Broker-Dealer when dealing with the Auction Agent
and (ii) a potential beneficial owner when dealing with a Broker-Dealer), who
may be interested in acquiring Notes (or, in the case of an Existing Holder
thereof, an additional principal amount of Notes).
"PROGRAM EXPENSE REQUIREMENT" shall have the meaning given
such term in the Base Indenture.
"RECORD DATE" shall mean the Business Day immediately
preceding an Auction Period Distribution Date.
"REMARKETING AGENT" shall mean the remarketing agent under the
remarketing agreement related to the Notes, or any successor to it as such
agent.
"REMARKETING AGREEMENT" shall mean a remarketing agreement
among the Issuer, the Remarketing Agent and the Indenture Trustee, or any
similar agreement hereafter entered into by the Issuer with respect to the
Notes, in each case as originally executed and as from time to time amended or
supplemented in accordance with the terms thereof and with this Indenture.
"SENIOR NOTES" shall mean the Series 1999A Notes.
"SENIOR PARITY PERCENTAGE" shall have the meaning given such
term in the Base Indenture.
"SERIES 1999A NOTEHOLDERS" shall mean, collectively, the
Series 1999A-1 Noteholders, the Series 1999A-2 Noteholders, the Series 1999A-3
Noteholders, the Series 1999A-4 Noteholders, the Series 1999A-5 Noteholders and
the Series 1999A-6 Noteholders.
"SERIES 1999A NOTEHOLDERS' PRINCIPAL DISTRIBUTION AMOUNT"
shall mean, with respect to any Auction Period Distribution Date for a Series of
Series 1999A Notes, the Series 1999A Principal Distribution Amount for such
Auction Period Distribution Date plus the Series 1999A Principal Shortfall as of
the close of the preceding Auction Period Distribution Date; provided that the
Series 1999A Noteholders' Principal Distribution Amount will not exceed the
outstanding principal balance of the Series 1999A Notes. In addition, (i) on the
Legal Final Maturity of the Series 1999A-1 Notes, the principal required to be
distributed to the Series 1999A-1 Noteholders will include the amount required
to reduce the outstanding principal balance of the Series 1999A-1 Notes to zero,
(ii) on the Legal Final Maturity of the Series
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<PAGE> 15
1999A-2 Notes, the principal required to be distributed to the Series 1999A-2
Noteholders will include the amount required to reduce the outstanding principal
balance of the Series 1999A-2 Notes to zero, (iii) on the Legal Final Maturity
of the Series 1999A-3 Notes, the principal required to be distributed to the
Series 1999A-3 Noteholders will include the amount required to reduce the
outstanding principal balance of the Series 1999A-3 Notes to zero, (iv) on the
Legal Final Maturity of the Series 1999A-4 Notes, the principal required to be
distributed to the Series 1999A-4 Noteholders will include the amount required
to reduce the outstanding principal balance of the Series 1999A-4 Notes to zero,
(v) on the Legal Final Maturity of the Series 1999A-5 Notes, the principal
required to be distributed to the Series 1999A-5 Noteholders will include the
amount required to reduce the outstanding principal balance of the Series
1999A-5 Notes to zero and (vi) on the Legal Final Maturity of the Series 1999A-6
Notes, the principal required to be distributed to the Series 1999A-6
Noteholders will include the amount required to reduce the outstanding principal
balance of the Series 1999A-6 Notes to zero.
"SERIES 1999A NOTES" shall mean, collectively, the Series
1999A-1 Notes, the Series 1999A-2 Notes, the Series 1999A-3 Notes, the Series
1999A-4 Notes, the Series 1999A-5 Notes and the Series 1999A-6 Notes.
"SERIES 1999A PRINCIPAL DISTRIBUTION AMOUNT" shall be equal to
(i) with respect to the Series 1999A-1 Notes an amount equal to the decline in
the Pool Balance between the end of the third Collection Period preceding the
first Business Day of a calendar month and the end of the second Collection
Period preceding the first Business Day of such calendar month, (ii) with
respect to the Series 1999A-2 Notes on and after the date on which the principal
balance of the Series 1999A-1 Notes has been paid in full, an amount equal to
the decline in the Pool Balance between the end of the third Collection Period
preceding the first Business Day of a calendar month and the end of the second
Collection Period preceding the first Business Day of such calendar month, (iii)
with respect to the Series 1999A-3 Notes on and after the date on which the
principal balance of the Series 1999A-1 Notes and Series 1999A-2 Notes has been
paid in full, an amount equal to the decline in the Pool Balance between the end
of the third Collection Period preceding the first Business Day of a calendar
month and the end of the second Collection Period preceding the first Business
Day of such calendar month, (iv) with respect to the Series 1999A-4 Notes on and
after the date on which the principal balance of the Series 1999A-1 Notes,
Series 1999A-2 Notes and Series 1999A-3 Notes has been paid in full, an amount
equal to the decline in the Pool Balance between the end of the third Collection
Period preceding the first Business Day of a calendar month and the end of the
second Collection Period preceding the first Business Day of such calendar
month, (v) with respect to the Series 1999A-5 Notes on and after the date on
which the principal balance of the Series 1999A-1 Notes, Series 1999A-2 Notes,
Series 1999A-3 Notes and Series 1999A-4 Notes has been paid in full, an amount
equal to the decline in the Pool Balance between the end of the third Collection
Period preceding the first Business Day of a calendar month and the end of the
second Collection Period preceding the first Business Day of such calendar month
and (vi) with respect to the Series 1999A-6 Notes on and after the date on which
the principal balance of the Series 1999A-1 Notes, Series 1999A-2 Notes, Series
1999A-3 Notes, Series 1999A-4 Notes and Series 1999A-5 Notes has been paid in
full, an amount equal to the decline in the Pool Balance between the end of the
third Collection Period preceding the first Business Day of a calendar month and
the end of the second Collection Period preceding the first Business Day of such
calendar month.
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<PAGE> 16
"SERIES 1999A PRINCIPAL SHORTFALL" shall mean, as of the first
Business Day of each calendar month, the excess of (i) the Series 1999A
Principal Distribution Amount on an applicable Auction Period Distribution Date
over (ii) the amount of principal actually to be distributed to the Series 1999A
Noteholders on such Auction Period Distribution Date.
"SERIES 1999A-1 INTEREST SHORTFALL" shall mean, with respect
to any Auction Period Distribution Date, the excess of (i) the Series 1999A-1
Noteholders' Interest Distribution Amount on the preceding Auction Period
Distribution Date over (ii) the amount of interest actually distributed to the
Series 1999A-1 Noteholders on such preceding Auction Period Distribution Date,
plus interest on the amount of such excess interest due to the Series 1999A-1
Noteholders, to the extent permitted by law, at the related Series Interest Rate
from such preceding Auction Period Distribution Date to the current Auction
Period Distribution Date.
"SERIES 1999A-1 NOTEHOLDERS" shall mean the Holders of the
Series 1999A-1 Notes.
"SERIES 1999A-1 NOTEHOLDERS' INTEREST DISTRIBUTION AMOUNT"
shall mean with respect to any Auction Distribution Date, the sum of (i) the
amount of interest accrued at the related Series Interest Rate for the related
Interest Accrual Period on the aggregate outstanding principal balance of the
Series 1999A-1 Notes on the immediately preceding Auction Period Distribution
Date after giving effect to all principal distributions to Holders of Series
1999A-1 Notes on such preceding Auction Period Distribution Date (or, in the
case of the first Auction Period Distribution Date, on the Date of Issuance) and
(ii) the Series 1999A-1 Interest Shortfall for such Auction Period Distribution
Date; provided that the Series 1999A-1 Noteholders' Interest Distribution Amount
will not include any Carryover Interest on the Series 1999A-1 Notes.
"SERIES 1999A-1 NOTES" shall mean the Student Loan Senior
Auction Rate Callable Asset-Backed Notes, Series 1999A-1, of the Issuer issued
and Outstanding under the Indenture.
"SERIES 1999A-2 INTEREST SHORTFALL" shall mean, with respect
to any Auction Period Distribution Date, the excess of (i) the Series 1999A-2
Noteholders' Interest Distribution Amount on the preceding Auction Period
Distribution Date over (ii) the amount of interest actually distributed to the
Series 1999A-2 Noteholders on such preceding Auction Period Distribution Date,
plus interest on the amount of such excess interest due to the Series 1999A-2
Noteholders, to the extent permitted by law, at the related Series Interest Rate
from such preceding Auction Period Distribution Date to the current Auction
Period Distribution Date.
"SERIES 1999A-2 NOTEHOLDERS" shall mean the Holders of the
Series 1999A-2 Notes.
"SERIES 1999A-2 NOTEHOLDERS' INTEREST DISTRIBUTION AMOUNT"
shall mean with respect to any Auction Period Distribution Date, the sum of (i)
the amount of interest accrued at the related Series Interest Rate for the
related Interest Accrual Period on the aggregate outstanding principal balance
of the Series 1999A-2 Notes on the immediately preceding Auction Period
Distribution Date after giving effect to all principal distributions to Holders
of Series 1999A-2 Notes on such preceding
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<PAGE> 17
Auction Period Distribution Date (or, in the case of the first Auction Period
Distribution Date, on the Date of Issuance) and (ii) the Series 1999A-2 Interest
Shortfall for such Auction Period Distribution Date; provided that the Series
1999A-2 Noteholders' Interest Distribution Amount will not include any Carryover
Interest on the Series 1999A-2 Notes.
"SERIES 1999A-2 NOTES" shall mean the Student Loan Senior
Auction Rate Callable Asset-Backed Notes, Series 1999A-2, of the Issuer issued
and Outstanding under the Indenture.
"SERIES 1999A-3 INTEREST SHORTFALL" shall mean, with respect
to any Auction Period Distribution Date, the excess of (i) the Series 1999A-3
Noteholders' Interest Distribution Amount on the preceding Auction Period
Distribution Date over (ii) the amount of interest actually distributed to the
Series 1999A-3 Noteholders on such preceding Auction Period Distribution Date,
plus interest on the amount of such excess interest due to the Series 1999A-3
Noteholders, to the extent permitted by law, at the related Series Interest Rate
from such preceding Auction Period Distribution Date to the current Auction
Period Distribution Date.
"SERIES 1999A-3 NOTEHOLDERS" shall mean the Holders of the
Series 1999A-3 Notes.
"SERIES 1999A-3 NOTEHOLDERS' INTEREST DISTRIBUTION AMOUNT"
shall mean with respect to any Auction Period Distribution Date, the sum of (i)
the amount of interest accrued at the related Series Interest Rate for the
related Interest Accrual Period on the aggregate outstanding principal balance
of the Series 1999A-3 Notes on the immediately preceding Auction Period
Distribution Date after giving effect to all principal distributions to Holders
of Series 1999A-3 Notes on such preceding Auction Period Distribution Date (or,
in the case of the first Auction Period Distribution Date, on the Date of
Issuance) and (ii) the Series 1999A-3 Interest Shortfall for such Auction Period
Distribution Date; provided that the Series 1999A-3 Noteholders' Interest
Distribution Amount will not include any Carryover Interest on the Series
1999A-3 Notes.
"SERIES 1999A-3 NOTES" shall mean the Student Loan Senior
Auction Rate Callable Asset-Backed Notes, Series 1999A-3, of the Issuer issued
and Outstanding under the Indenture.
"SERIES 1999A-4 INTEREST SHORTFALL" shall mean, with respect
to any Auction Period Distribution Date, the excess of (i) the Series 1999A-4
Noteholders' Interest Distribution Amount on the preceding Auction Period
Distribution Date over (ii) the amount of interest actually distributed to the
Series 1999A-4 Noteholders on such preceding Auction Period Distribution Date,
plus interest on the amount of such excess interest due to the Series 1999A-4
Noteholders, to the extent permitted by law, at the related Series Interest Rate
from such preceding Auction Period Distribution Date to the current Auction
Period Distribution Date.
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<PAGE> 18
"SERIES 1999A-4 NOTEHOLDERS" shall mean the Holders of the
Series 1999A-4 Notes.
"SERIES 1999A-4 NOTEHOLDERS' INTEREST DISTRIBUTION AMOUNT"
shall mean with respect to any Auction Period Distribution Date, the sum of (i)
the amount of interest accrued at the related Series Interest Rate for the
related Interest Accrual Period on the aggregate outstanding principal balance
of the Series 1999A-4 Notes on the immediately preceding Auction Period
Distribution Date after giving effect to all principal distributions to Holders
of Series 1999A-4 Notes on such preceding Auction Period Distribution Date (or,
in the case of the first Auction Period Distribution Date, on the Date of
Issuance) and (ii) the Series 1999A-4 Interest Shortfall for such Auction Period
Distribution Date; provided that the Series 1999A-4 Noteholders' Interest
Distribution Amount will not include any Carryover Interest on the Series
1999A-4 Notes.
"SERIES 1999A-4 NOTES" shall mean the Student Loan Senior
Auction Rate Callable Asset-Backed Notes, Series 1999A-4, of the Issuer issued
and Outstanding under the Indenture.
"SERIES 1999A-5 INTEREST SHORTFALL" shall mean, with respect
to any Auction Period Distribution Date, the excess of (i) the Series 1999A-5
Noteholders' Interest Distribution Amount on the preceding Auction Period
Distribution Date over (ii) the amount of interest actually distributed to the
Series 1999A-5 Noteholders on such preceding Auction Period Distribution Date,
plus interest on the amount of such excess interest due to the Series 1999A-5
Noteholders, to the extent permitted by law, at the related Series Interest Rate
from such preceding Auction Period Distribution Date to the current Auction
Period Distribution Date.
"SERIES 1999A-5 NOTEHOLDERS" shall mean the Holders of the
Series 1999A-5 Notes.
"SERIES 1999A-5 NOTEHOLDERS' INTEREST DISTRIBUTION AMOUNT"
shall mean with respect to any Auction Period Distribution Date, the sum of (i)
the amount of interest accrued at the related Series Interest Rate for the
related Interest Accrual Period on the aggregate outstanding principal balance
of the Series 1999A-5 Notes on the immediately preceding Auction Period
Distribution Date after giving effect to all principal distributions to Holders
of Series 1999A-5 Notes on such preceding Auction Period Distribution Date (or,
in the case of the first Auction Period Distribution Date, on the Date of
Issuance) and (ii) the Series 1999A-5 Interest Shortfall for such Auction Period
Distribution Date; provided that the Series 1999A-5 Noteholders' Interest
Distribution Amount will not include any Carryover Interest on the Series
1999A-5 Notes.
"SERIES 1999A-5 NOTES" shall mean the Student Loan Senior
Auction Rate Callable Asset-Backed Notes, Series 1999A-5, of the Issuer issued
and Outstanding under the Indenture.
"SERIES 1999A-6 INTEREST SHORTFALL" shall mean, with respect
to any Auction Period Distribution Date, the excess of (i) the Series 1999A-6
Noteholders' Interest Distribution
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Amount on the preceding Auction Period Distribution Date over (ii) the amount of
interest actually distributed to the Series 1999A-6 Noteholders on such
preceding Auction Period Distribution Date, plus interest on the amount of such
excess interest due to the Series 1999A-6 Noteholders, to the extent permitted
by law, at the related Series Interest Rate from such preceding Auction Period
Distribution Date to the current Auction Period Distribution Date.
"SERIES 1999A-6 NOTEHOLDERS" shall mean the Holders of the
Series 1999A-6 Notes.
"SERIES 1999A-6 NOTEHOLDERS' INTEREST DISTRIBUTION AMOUNT"
shall mean with respect to any Auction Period Distribution Date, the sum of (i)
the amount of interest accrued at the related Series Interest Rate for the
related Interest Accrual Period on the aggregate outstanding principal balance
of the Series 1999A-6 Notes on the immediately preceding Auction Period
Distribution Date after giving effect to all principal distributions to Holders
of Series 1999A-6 Notes on such preceding Auction Period Distribution Date (or,
in the case of the first Auction Period Distribution Date, on the Date of
Issuance) and (ii) the Series 1999A-6 Interest Shortfall for such Auction Period
Distribution Date; provided that the Series 1999A-6 Noteholders' Interest
Distribution Amount will not include any Carryover Interest on the Series
1999A-6 Notes.
"SERIES 1999A-6 NOTES" shall mean the Student Loan Senior
Auction Rate Callable Asset-Backed Notes, Series 1999A-6, of the Issuer issued
and Outstanding under the Indenture.
"SERIES 1999B-1 INTEREST SHORTFALL" shall mean, with respect
to any Auction Period Distribution Date, the excess of (i) the Series 1999B-1
Noteholders' Interest Distribution Amount on the preceding Auction Period
Distribution Date over (ii) the amount of interest actually distributed to the
Series 1999B-1 Noteholders on such preceding Auction Period Distribution Date,
plus interest on the amount of such excess interest due to the Series 1999B-1
Noteholders, to the extent permitted by law, at the related Series Interest Rate
from such preceding Auction Period Distribution Date to the current Auction
Period Distribution Date.
"SERIES 1999B-1 NOTEHOLDERS" shall mean the Holders of the
Series 1999B-1 Notes.
"SERIES 1999B-1 NOTEHOLDERS' INTEREST DISTRIBUTION AMOUNT"
shall mean, with respect to any Auction Period Distribution Date, the sum of (i)
the amount of interest accrued at the related Series Interest Rate for the
related Interest Accrual Period on the aggregate outstanding principal balance
of the Series 1999B-1 Notes on the immediately preceding Auction Period
Distribution Date after giving effect to all principal distributions to Holders
of Series 1999B-1 Notes on such preceding Auction Period Distribution Date (or,
in the case of the first Auction Period Distribution Date, on the Date of
Issuance) and (ii) the Series 1999B-1 Interest Shortfall for such Auction Period
Distribution Date; provided that the Series 1999B-1 Noteholders' Interest
Distribution Amount will not include any Carryover Interest on the Series
1999B-1 Notes.
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"SERIES 1999B-1 NOTEHOLDERS' PRINCIPAL DISTRIBUTION AMOUNT"
shall mean, with respect to any Auction Period Distribution Date, the Series
1999B-1 Principal Distribution Amount for such Auction Period Distribution Date
plus the Series 1999B-1 Principal Shortfall as of the close of the preceding
Auction Period Distribution Date; provided that the Series 1999B-1 Noteholders'
Principal Distribution Amount shall not exceed the outstanding principal balance
of the Series 1999B-1 Notes . In addition, on the Legal Final Maturity of the
Series 1999B-1 Notes, the principal required to be distributed to the Series
1999B-1 Noteholders shall include the amount required to reduce the outstanding
principal balance on the Series 1999B-1 Notes to zero.
"SERIES 1999B-1 NOTES" shall mean the Student Loan Subordinate
Auction Rate Callable Asset-Backed Notes, Series 1999B-1, of the Issuer issued
and Outstanding under the Indenture.
"SERIES 1999B-1 PRINCIPAL DISTRIBUTION AMOUNT" shall mean (i)
while the Series 1999A Notes are then Outstanding, on the first Business Day of
a calendar month an amount equal to the decline in the Pool Balance between the
end of the third Collection Period preceding the first Business Day of such
calendar month and the end of the second Collection Period preceding the first
Business Day of such calendar month, but only to the extent that after the
payment of principal of the Series 1999B-1 Notes, the Senior Parity Percentage
is no less than 109%, the Parity Percentage is no less than 101% and the
aggregate principal amount of Series 1999B-1 Notes that remain Outstanding is
not less than 5.75% of the aggregate principal amount of all Notes that remain
Outstanding hereunder following such payment of principal on the Series 1999B-1
Notes, and (ii) on the first Business Day of a calendar month on and after which
the principal balance of the Series 1999A Notes has been paid in full the
decline in the Pool Balance between the end of the third Collection Period
preceding the first Business Day of such calendar month and the end of the
second Collection Period preceding the first Business Day of such calendar month
(reduced with respect to the first Auction Period Distribution Date on which
principal is to be paid on the Series 1999B-1 Notes by the Series 1999A
Noteholders' Principal Distribution Amount on such Auction Period Distribution
Date).
"SERIES 1999B-1 PRINCIPAL SHORTFALL" shall mean, as of the
first Business Day of each calendar month on and after which the principal
balance of the Series 1999A Notes has been paid, the excess of (i) the Series
1999B-1 Principal Distribution Amount on an applicable Auction Period
Distribution Date over (ii) the amount of principal actually distributed to the
Series 1999B-1 Noteholders on such Auction Period Distribution Date.
"SUBMISSION DEADLINE" shall mean 12:30 p.m., eastern time, on
any Interest Determination Date or such other time on any Interest Determination
Date by which Broker-Dealers are required to submit Orders to the Auction Agent
as specified by the Auction Agent from time to time.
"SUBMITTED BID" shall have the meaning set forth in Section
2.03.1.1(c)(i) hereof.
"SUBMITTED HOLD ORDER" shall have the meaning set forth in
Section 2.03.1.1(c)(i).
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"SUBMITTED ORDER" shall have the meaning set forth in Section
2.03.1.1(c)(i).
"SUBMITTED SELL ORDER" shall have the meaning set forth in
Section 2.3.1.1(c)(i).
"SUBORDINATE NOTES" shall mean the Series 1999B-1 Notes.
"SUBSTITUTE AUCTION AGENT" shall mean a Person having the
qualifications required by Section 2.03.1.5 of this Indenture with whom the
Indenture Trustee and the Issuer enter into a Substitute Auction Agent
Agreement.
"SUBSTITUTE AUCTION AGENT AGREEMENT" shall mean an auction
agent agreement containing terms substantially similar to the terms of the
Initial Auction Agent Agreement, whereby a Substitute Auction Agent agrees with
the Indenture Trustee and the Issuer to perform the duties of the Auction Agent
under this Indenture.
"TELERATE PAGE 3750" shall mean the display page so designated
on the Dow Jones Telerate Service (or such other page as may replace that page
on that service for the purpose of displaying comparable rates or prices).
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ARTICLE II
AUTHORIZATION, TERMS AND PROVISIONS OF NOTES
SECTION 2.01 AUTHORIZATION OF NOTES; NOTES TO CONSTITUTE
SPECIAL OBLIGATIONS There is hereby authorized the borrowing of funds, and to
evidence such borrowing there is authorized the issuance of Notes of the Issuer
in the following aggregate principal amounts and Series: (i) Seventy-Five
Million Dollars ($75,000,000) designated "Student Loan Funding 1999-A/B Trust
Student Loan Senior Auction Rate Callable Asset-Backed Notes, Series 1999A-1"
(herein referred to as the "Series 1999A-1 Notes"); (ii) Seventy-Five Million
Dollars ($75,000,000) designated "Student Loan Funding 1999-A/B Trust Student
Loan Senior Auction Rate Callable Asset-Backed Notes, Series 1999A-2" (herein
referred to as the "Series 1999A-2 Notes"); (iii) Seventy-Five Million Dollars
($75,000,000) designated "Student Loan Funding 1999-A/B Trust Student Loan
Senior Auction Rate Callable Asset-Backed Notes, Series 1999A-3" (herein
referred to as the "Series 1999A-3 Notes"); (iv) One Hundred Million Dollars
($100,000,000) designated "Student Loan Funding 1999-A/B Trust Student Loan
Senior Auction Rate Callable Asset-Backed Notes, Series 1999A-4" (herein
referred to as the "Series 1999A-4 Notes"); (v) Seventy-Five Million Dollars
($75,000,000) designated "Student Loan Funding 1999-A/B Trust Student Loan
Senior Auction Rate Callable Asset-Backed Notes, Series 1999A-5" (herein
referred to as the "Series 1999A-5 Notes"); (vi) Ninety-Five Million Dollars
($95,000,000) designated "Student Loan Funding 1999-A/B Trust Student Loan
Senior Auction Rate Callable Asset-Backed Notes, Series 1999A-6" (herein
referred to as the "Series 1999A-6 Notes" and together with the Series 1999A-1
Notes, the Series 1999A-2 Notes, the Series 1999A-3 Notes, the Series 1999A-4
Notes and the Series 1999A-5 Notes, the "Senior Notes" or the "Series 1999A
Notes"); and (vii) Thirty Million Dollars ($30,000,000) designated "Student Loan
Funding 1999-A/B Trust Student Loan Subordinate Auction Rate Callable
Asset-Backed Notes, Series 1999B-1" (herein referred to as the "Subordinate
Notes" or the "Series 1999B-1 Notes" and, collectively with the Senior Notes,
the "Notes").
SECTION 2.02 TERMS OF NOTES
(a) TERMS OF NOTES GENERALLY. Payments of principal of and
interest on each Note shall be made by the Indenture Trustee from its principal
corporate trust office in Cincinnati, Ohio in lawful money of the United States,
and payment of interest on each Note shall, if the Holder thereof is the
registered owner of $1,000,000 or more in aggregate principal amount of Notes,
be made by the deposit or wiring of immediately available funds to the credit of
an account specified by such Holder in duly executed instructions, with
signature guaranteed in a manner satisfactory to the Indenture Trustee, in the
form set forth in Exhibit D hereto delivered to the Indenture Trustee no less
than ten (10) Business Days prior to the date such payment is to be made. If
such instructions are not delivered to the Indenture Trustee in accordance with
the immediately preceding sentence and except as otherwise provided for when
Notes are registered in the name of the Depository or its nominee, payment of
interest shall be made by check mailed to such Holder's address as it appears on
the books of registry maintained by the Indenture Trustee pursuant to Section
2.4 of the Base Indenture. Each payment of principal and interest and Carryover
Interest, if any, on each Note of a Series shall be accompanied by the CUSIP
number, if any, of the Note of such Series to which such payment relates.
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Notwithstanding the foregoing and except as otherwise provided
for when Notes are registered in the name of the Depository or its nominee, no
payment of principal shall be made on any Note unless and until such Note is
tendered to the Indenture Trustee for cancellation; and no payment of interest
or Carryover Interest shall be made on any Note except to the Person whose name
appears on the books of registry maintained by the Indenture Trustee as the
registered Holder thereof as of the close of business on the Record Date.
If and as long as a Book-Entry System is utilized, (i) the
Notes shall be issued in the form of one fully registered Note for each Legal
Final Maturity within each Series of Notes or otherwise as may be required or
requested by the Depository and agreed to by the Issuer, registered in the name
of the Depository or its nominee, as registered owner, and immobilized in the
custody of the Depository; (ii) (a) the principal of the Notes shall be payable
in same day or federal funds delivered or transmitted to the Depository or its
nominee on the Legal Final Maturity or such other date as principal is payable
hereunder and (b) interest on the Notes shall be payable in same day or federal
funds delivered to the Depository or its nominee on the applicable Auction
Period Distribution Date; (iii) the beneficial owners in Book-Entry Form shall
have no right to receive Notes in the form of physical securities or
certificates; (iv) ownership of beneficial interests in Book-Entry Form shall be
shown by a book entry on the system maintained and operated by the Depository
and its Participants, and transfers of the ownership of beneficial interests
shall be made only by book entry by the Depository and its Participants; and (v)
the Notes as such shall not be transferable or exchangeable, except for transfer
to another Depository or to another nominee of a Depository, without further
action by the Issuer.
As long as the Notes are held by a Depository in a Book-Entry
System, the Indenture Trustee shall send any notice of redemption only to the
Depository. In the event that the Indenture Trustee gives notice of redemption
to the Depository, such notice shall initiate the Depository's standard
redemption process.
If any Depository determines not to continue to act as a
Depository for the Notes for use in a Book-Entry System, the Authorized Officer
may attempt to have established a securities depository/book-entry relationship
with another qualified Depository. If (i) the Issuer advises the Indenture
Trustee in writing the a Depository is no longer willing or able to discharge
properly its responsibilities as Depository with respect to the Notes, and the
Issuer is unable to locate a qualified successor, (ii) the Issuer, at its
option, advises the Indenture Trustee in writing that it elects to terminate the
Book-Entry System through a Depository, or (iii) after the occurrence of an
Event of Default, Noteholders representing not less than 50% of the Outstanding
principal balance of the Directing Notes advise the Indenture Trustee and the
Depository in writing that the continuation of a Book-Entry System through a
Depository is no longer in the best interest of the Noteholders, the Indenture
Trustee shall permit withdrawal of the Notes from the Depository or its nominee,
all at the cost and expense (including any costs of printing), if the event is
not the result of Issuer action or inaction, of those Persons requesting such
issuance. Note certificates authenticated and delivered pursuant to this
paragraph shall be in Authorized Denominations.
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With respect to the Notes registered in the name of Cede &
Co., as nominee of DTC, or in the name of any successor Depository or its
nominee, the Issuer and the Indenture Trustee shall have no responsibility or
obligation to any Depository Participant or to any Indirect Participant. Without
limiting the generality of the immediately preceding sentence, the Issuer and
the Indenture Trustee shall have no responsibility or obligation with respect to
(i) the accuracy of the records of DTC, Cede & Co., any other Depository, its
nominee, or any Depository Participant with respect to any ownership interest in
the Notes, (ii) the delivery to any Depository Participant or any Indirect
Participant or any other Person, other than a Holder of a Note, of any notice
with respect to the Notes, including any notice of redemption, or (iii) the
payment to any Depository Participant or any Indirect Participant or any other
Person, other than a Holder of a Note, of any amount with respect to principal
of or interest on the Notes.
For as long as the Notes are in Book-Entry Form, the notice,
tender and delivery procedures of DTC, or any other Depository to which the
Notes are transferred, shall be applicable. Whenever during the term of the
Notes the beneficial ownership thereof is determined by a book-entry at DTC, the
requirements of the Indenture of holding, delivering, surrendering or
transferring Notes shall be deemed modified to require the appropriate person to
meet the requirements of DTC as to registering, holding, surrendering or
transferring the book-entry to produce the same effect.
(b) TERMS OF SENIOR NOTES GENERALLY. The Senior Notes shall be
initially issued in fully registered form in substantially the form set forth in
Exhibit B hereof. The Senior Notes may be issued only in Authorized
Denominations. The Senior Notes initially issued hereunder shall be dated their
Date of Issuance, and each Series of such Senior Notes shall mature on the
respective Legal Final Maturity for such Series. The Senior Notes shall be
subject to redemption prior to their respective Legal Final Maturity as provided
in Article III hereof. The Senior Notes of each Series shall be numbered in
consecutive numerical order as set forth in Schedule I attached hereto.
The Senior Notes shall be issued to a Depository for use in a
Book-Entry System in accordance with the provisions of the Indenture. The
Authorized Officer, on behalf of the Issuer and to the extent necessary or
required, shall enter into any agreements determined necessary in connection
with the registration, authentication, immobilization, and transfer of the
Senior Notes, including arrangements for the payment of principal and interest
by wire transfer, after determining that the execution thereof will not endanger
the funds or securities of the Issuer.
Each Senior Note of a Series shall be payable on its
respective Legal Final Maturity and shall bear interest for each Interest
Accrual Period at the Series Interest Rate determined in accordance with the
procedures and subject to the limitations set forth in Section 2.03 hereof.
Interest at such Series Interest Rate shall accrue during each Interest Accrual
Period on the principal balance of each Series of Senior Notes Outstanding until
such Series of Senior Notes has been paid in full or payment has been duly
provided for, as the case may be, and shall accrue from the later of the date
thereof or the most recent applicable Auction Period Distribution Date to which
interest has been paid or duly provided for until paid, subject, however, to the
provisions of Section 2.03 hereof. Each Senior Note of a Series shall initially
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bear interest at the rate of interest per annum set forth in Schedule I attached
hereto. Interest on each Senior Note shall be paid on each applicable Auction
Period Distribution Date to the extent of interest accrued on the principal then
being paid or redeemed to the Holders of such Senior Notes as of the Record
Date. Interest accrued as of any applicable Auction Period Distribution Date on
the Senior Notes of a Series but not paid on such Auction Period Distribution
Date shall be payable on the succeeding applicable Auction Period Distribution
Date, together with interest thereon at the applicable Series Interest Rate. If
on any Auction Period Distribution Date, Available Funds are insufficient to pay
all interest accrued and payable on the Senior Notes of such Series on such
Date, interest shall be paid from such Available Funds pro rata to the Holders
of each such Series of Senior Notes Outstanding.
(c) TERMS OF SUBORDINATE NOTES GENERALLY. The Subordinate
Notes shall be initially issued in fully registered form in substantially the
form set forth in Exhibit C hereof. The Subordinate Notes shall be issued only
in Authorized Denominations. The Subordinate Notes issued hereunder shall be
dated their Date of Issuance and shall mature on the Legal Final Maturity. The
Subordinate Notes shall be subject to redemption prior to their respective Legal
Final Maturity as provided in Article III hereof. The Subordinate Notes shall be
numbered in consecutive numerical order as set forth in Schedule I hereto.
The Subordinate Notes shall be issued to a Depository for use
in a Book-Entry System in accordance with the provisions of the Indenture. The
Authorized Officer, on behalf of the Issuer and to the extent necessary or
required, shall enter into any agreements determined necessary in connection
with the registration, authentication, immobilization, and transfer of the
Subordinate Notes, including arrangements for the payment of principal and
interest by wire transfer, after determining that the execution thereof will not
endanger the funds or securities of the Issuer.
The Subordinate Notes shall be payable on their Legal Final
Maturity and shall bear interest for each Interest Accrual Period at the Series
Interest Rate determined in accordance with the procedures, subject to the
limitations set forth in Section 2.03 hereof. Interest shall accrue during each
Interest Accrual Period on the principal balance of the Subordinate Notes
Outstanding until such Subordinate Notes have been paid in full or payment has
been duly provided for, as the case may be, and shall accrue from the later of
the date thereof or the most recent applicable Auction Period Distribution Date
to which interest has been paid or duly provided for until paid, subject,
however, to the provisions of Section 2.03 hereof. Each Subordinate Note shall
bear interest at the rate of interest per annum set forth in Schedule I attached
hereto. Interest accrued as of any applicable Auction Period Distribution Date
on the Subordinate Notes but not paid on such Auction Period Distribution Date
shall be payable on the next succeeding applicable Auction Period Distribution
Date, together with interest thereon at the applicable Series Interest Rate. If
on any Auction Period Distribution Date, Available Funds are insufficient to pay
all interest accrued and payable on the Subordinate Notes on such Date, interest
will be paid from such Available Funds pro rata to the Holders of the
Subordinate Notes Outstanding.
The Indenture Trustee shall make available to each Holder or
owner of a beneficial interest in a Series of Notes via telephone information
concerning the Series Interest
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Rate applicable to the Notes of each Series. The Indenture Trustee shall make
such information available to such Holders between the hours of 9 a.m. and 5
p.m. Eastern time on any day on which the principal corporate trust office of
the Indenture Trustee is open for business.
SECTION 2.03 DETERMINATION OF SERIES INTEREST RATES ON THE
NOTES.
SECTION 2.03.1 DETERMINATION OF THE SERIES INTEREST RATE ON
THE NOTES. Until an Auction Period Adjustment or Auction Period Conversion and
subject to the Net Loan Rate, the Notes shall bear interest at a Series Interest
Rate based on the appropriate Auction Period, as determined pursuant to Section
2.03.1 hereof and the subsections thereunder.
For the Notes during each Interest Accrual Period, interest at
the applicable Series Interest Rate shall accrue daily and shall be computed for
the actual number of days elapsed on the basis of a year consisting of 360 days.
The Series Interest Rate to be borne by each Series of Notes
after the initial Interest Accrual Period shall be determined by the Auction
Agent, which Series Interest Rate shall be the Formula Rate, as hereinafter
described and subject to the limitation of the Net Loan Rate, as hereinafter
described. Each Auction Period shall commence on and include the first day of
such Interest Accrual Period and end on and include the immediately succeeding
Interest Determination Date. The Series Interest Rate on each Series of Notes
for each Auction Period shall be the lesser of the (i) Net Loan Rate in effect
for such Auction Period and (ii) the Formula Rate in effect for such Auction
Period; provided that if, on any Interest Determination Date, an Auction is not
held for any reason, then the Series Interest Rate on the Notes for the next
succeeding Auction Period shall be the Net Loan Rate.
Notwithstanding the foregoing:
(A) if the ownership of Notes is no longer
maintained in Book-entry Form, the Auction Rate on such Notes for any Auction
Period commencing after the delivery of certificates representing such series
pursuant to Section 2.3 of the Base Indenture shall equal the lesser of (i) the
Maximum Auction Rate and (ii) the Net Loan Rate on the Business Day immediately
preceding the first day of such subsequent Auction Period; or
(B) if a Payment Default shall have
occurred, the Auction Rate on the Notes for the Auction Period commencing on or
immediately after such Payment Default, and for each Auction Period thereafter,
to and including the Auction Period, if any, during which, or commencing less
than two Business Days after, such Payment Default is cured in accordance with
this Indenture, shall be the Non-Payment Rate on the first day of each such
Auction Period; or
(C) the Auction Rate for an Auction Period
that commences on an Auction Period Conversion Date will be equal to the lesser
of (i) the interest rate necessary to enable the Auction Agent to sell all of
such Notes at par plus accrued interest to the Auction Period Conversion Date or
(ii) the Maximum Auction Rate as of the Auction Period Conversion Date, subject
to the Net Loan Rate.
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In accordance with Section 2.03.1.1(c)(ii) hereof, the Auction
Agent shall promptly give written notice to the Indenture Trustee and the Issuer
of each Series Interest Rate (unless the Series Interest Rate is the Non-Payment
Rate in which case the Indenture Trustee will determine the Non-Payment Rate and
give written notice thereof to the Issuer) and either the Auction Rate or the
Net Loan Rate, as the case may be, when such rate is not the Series Interest
Rate, applicable to the Notes. The Indenture Trustee shall notify the Holders of
Notes of the Series Interest Rate applicable to the Notes for each Auction
Period on the second Business Day of such Auction Period.
In the event that there are fewer than three (3) Business Days
in any week during which the Auction Period for the Notes would otherwise be
scheduled to expire, the expiration date and the Auction Period Distribution
Date for such Auction Period then in effect, and the Interest Determination Date
and commencement date for the immediately following Auction Period for the
Notes, may be adjusted to fall on such dates as the Calculation Agent, with the
consent of the Issuer, may determine to be appropriate under such circumstances.
The Calculation Agent will promptly notify the Indenture Trustee and the Auction
Agent in writing of any such determination. The Indenture Trustee, upon receipt
of such notice, will immediately give written notification of such determination
to the Holders of the Notes.
Notwithstanding any other provision of the Notes or this
Indenture and except for interest payable at the Non-Payment Rate in connection
with the occurrence of a Payment Default, interest payable on the Notes for an
Auction Period shall never exceed for such Auction Period the amount of interest
payable at the Net Loan Rate in effect for such Auction Period.
In the event that the Auction Agent no longer determines, or
fails to determine, when required, the Series Interest Rate with respect to each
series of Notes, or, if for any reason such manner of determination shall be
held to be invalid or unenforceable, the Series Interest Rate for the next
succeeding Interest Accrual Period, which period shall be an Auction Period, for
each Series of Notes shall be the Net Loan Rate as determined by the
Administrator for such next succeeding Auction Period, and if the Administrator
shall fail or refuse to determine said Net Loan Rate, the Net Loan Rate shall be
determined by a securities dealer appointed by the Issuer and capable, in the
reasonable judgment of the Issuer, of making such a determination in accordance
with the provisions hereof, and written notice of such determination shall be
given by such securities dealer to the Indenture Trustee.
SECTION 2.03.1.1 AUCTION PROCEDURES.
By purchasing Notes, whether in an Auction or otherwise, each
purchaser of the Notes, or its Broker-Dealer, must agree and shall be deemed by
such purchase to have agreed (i) to participate in Auctions on the terms
described herein, (ii) to have its beneficial ownership of the Notes maintained
at all times in Book-Entry Form for the account of its Depository Participant,
which in turn will maintain records of such beneficial ownership and (iii) to
authorize such Depository Participant to disclose to the Auction Agent such
information with respect to such beneficial ownership as the Auction Agent may
request.
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So long as the ownership of a Series of Notes is maintained in
Book-Entry Form by the Depository, an Existing Holder may sell, transfer or
otherwise dispose of Notes only pursuant to a Bid or Sell Order placed in an
Auction or otherwise sell, transfer or dispose of Notes through a Broker-Dealer,
provided that, in the case of all transfers other than pursuant to Auctions,
such Existing Holder, its Broker-Dealer or its Depository Participant advises
the Auction Agent of such transfer. Prior to a Period Adjustment Date and except
with respect to the Interest Determination Date immediately preceding an Auction
Period Conversion Date, Auctions shall be conducted on each Interest
Determination Date, if there is an Auction Agent on such Interest Determination
Date, in the following manner:
(a) (i) Prior to the Submission Deadline on each
Interest Determination Date;
(A) each Existing Holder of Notes may submit
to a Broker-Dealer by telephone or otherwise any information as to:
(1) the principal amount of Outstanding
Notes, if any, held by such Existing Holder which such Existing Holder desires
to continue to hold without regard to the Series Interest Rate for the next
succeeding Auction Period;
(2) the principal amount of Outstanding
Notes, if any, which such Existing Holder offers to sell if the Series Interest
Rate for the next succeeding Auction Period shall be less than the rate per
annum specified by such Existing Holder; and/or
(3) the principal amount of Outstanding
Notes, if any, held by such Existing Holder which such Existing Holder offers to
sell without regard to the Series Interest Rate for the next succeeding Auction
Period;
and
(B) or more Broker-Dealers may contact
Potential Holders to determine the principal amount of Notes which each
Potential Holder offers to purchase, if the Series Interest Rate for the next
succeeding Auction Period shall not be less than the rate per annum specified by
such Potential Holder.
The statement of an Existing Holder or a Potential Holder
referred to in (A) or (B) of this paragraph (i) is hereinafter referred to as an
"Order," and each Existing Holder and each Potential Holder placing an Order is
hereinafter referred to as a "Bidder"; an Order described in clause (A)(1) is
hereinafter referred to as a "Hold Order"; an Order described in clauses (A)(2)
and (B) is hereinafter referred to as a "Bid"; and an Order described in clause
(A)(3) is hereinafter referred to as a "Sell Order."
(ii) (A) Subject to the provisions of Section
2.03.1.1(b) hereof, a Bid by an Existing Holder shall constitute an irrevocable
offer to sell:
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(1) the principal amount of Outstanding
Notes specified in such Bid if the Series Interest Rate determined as provided
in this Section 2.03.1.1 shall be less than the rate specified therein; or
(2) such principal amount or a lesser
principal amount of Outstanding Notes to be determined as set forth in Section
2.03.1.1(d)(i)(D), if the Series Interest Rate determined as provided in this
Section 2.03.1.1 shall be equal to the rate specified therein; or
(3) such principal amount or a lesser
principal amount of Outstanding Notes to be determined as set forth in Section
2.03.1.1(d)(ii)(C) if the rate specified therein shall be higher than the Series
Interest Rate and Sufficient Clearing Bids have not been made.
(B) Subject to the provisions of
Section 2.03.1.1(b) hereof, a Sell Order by an Existing Holder shall constitute
an irrevocable offer to sell:
(1) the principal amount of Outstanding
Notes specified in such Sell Order; or
(2) such principal amount or a lesser
principal amount of Outstanding Notes set forth in Section 2.03.1.1(d)(i)(C), if
Sufficient Clearing Bids have not been made.
(C) Subject to the provisions of Section
2.03.1.1(b) hereof, a Bid by a Potential Holder shall constitute an irrevocable
offer to purchase:
(1) the principal amount of Outstanding
Notes specified in such Bid if the Series Interest Rate determined as provided
in this Section 2.03.1.1 shall be higher than the rate specified in such Bid; or
(2) such principal amount or a lesser
principal amount of Outstanding Notes set forth in Section 2.03.1.1(d)(i)(E), if
the Series Interest Rate determined as provided in this Section 2.03.1.1 shall
be equal to the rate specified in such Bid.
(b) (i) Each Broker-Dealer shall submit in writing to the
Auction Agent prior to the Submission Deadline on each Interest Determination
Date all Orders obtained by such Broker-Dealer and shall specify with respect to
each such Order:
(A) the name of the Bidder placing such Order;
(B) the aggregate principal amount of Notes that are the
subject of such Order;
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(C) to the extent that such Bidder is an Existing Holder:
(1) the principal amount of Notes, if any, subject to
any Hold Order placed by such Existing Holder;
(2) the principal amount of Notes, if any, subject to
any Bid placed by such Existing Holder and the rate specified in such Bid; and
(3) the principal amount of Notes, if any, subject to
any Sell Order placed by such Existing Holder;
and
(D) to the extent such Bidder is a Potential Holder, the
rate specified in such Potential Holder's Bid.
(ii) If any rate specified in any Bid contains more than three
figures to the right of the decimal point, the Auction Agent shall round such
rate up to the next higher one- thousandth (.001) of 1%.
(iii) If an Order or Orders covering all Outstanding Notes
held by an Existing Holder is not submitted to the Auction Agent prior to the
Submission Deadline, the Auction Agent shall deem a Hold Order to have been
submitted on behalf of such Existing Holder covering the principal amount of
Outstanding Notes held by such Existing Holder and not subject to an Order
submitted to the Auction Agent.
(iv) Neither the Issuer, the Indenture Trustee nor the Auction
Agent shall be responsible for any failure of a Broker-Dealer to submit an Order
to the Auction Agent on behalf of any Existing Holder or Potential Holder.
(v) If any Existing Holder submits through a Broker-Dealer to
the Auction Agent one or more Orders covering in the aggregate more than the
principal amount of Outstanding Notes held by such Existing Holder, such Orders
shall be considered valid as follows and in the following order of priority:
(A) All Hold Orders shall be considered valid, but only up
to the aggregate principal amount of Outstanding Notes held by such Existing
Holder, and if the aggregate principal amount of Notes subject to such Hold
Orders exceeds the aggregate principal amount of Notes held by such Existing
Holder, the aggregate principal amount of Notes subject to each such Hold Order
shall be reduced pro rata so that the aggregate principal amount of Notes
subject to such Hold Order equals the aggregate principal amount of Outstanding
Notes held by such Existing Holder.
(B) (1) any Bid shall be considered valid up to an amount
equal to the excess of the principal amount of Outstanding Notes held by such
Existing Holder over the
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aggregate principal amount of Notes subject to any Hold Order referred to in
clause (A) of this paragraph (v);
(2) subject to subclause (1) of this clause (B), if
more than one Bid with the same rate is submitted on behalf of such Existing
Holder and the aggregate principal amount of outstanding Notes subject to such
Bids is greater than such excess, such Bids shall be considered valid up to an
amount equal to such excess;
(3) subject to subclauses (1) and (2) of this clause
(B), if more than one Bid with different rates are submitted on behalf of such
Existing Holder, such Bids shall be considered valid first in the ascending
order of their respective rates until the highest rate is reached at which such
excess exists and then at such rate up to the amount of such excess; and
(4) in any such event, the amount of Outstanding
Notes, if any, subject to Bids not valid under this clause (B) shall be treated
as the subject of a Bid by a Potential Holder at the rate therein specified; and
(C) All Sell Orders shall be considered valid up to
an amount equal to the excess of the principal amount of Outstanding Notes held
by such Existing Holder over the aggregate principal amount of Notes subject to
Hold Orders referred to in clause (A) of this paragraph (v) and valid Bids
referred to in clause (B) of this paragraph (v).
(vi) If more than one Bid for Notes is submitted on behalf of
any Potential Holder, each Bid submitted shall be a separate Bid with the rate
and principal amount therein specified.
(vii) An Existing Holder that offers to purchase additional
Notes is, for purposes of such offer, treated as a Potential Holder.
(viii) Any Bid or Sell Order submitted by an Existing Holder
covering an aggregate principal amount of Notes not equal to an Authorized
Denomination shall be rejected and shall be deemed a Hold Order. Any Bid
submitted by a Potential Holder covering an aggregate principal amount of Notes
not equal to an Authorized Denomination shall be rejected.
(ix) Any Bid specifying a rate higher than the Maximum Auction
Rate shall (a) be treated as a Sell Order if submitted by an Existing Holder and
(b) not be accepted if submitted by a Potential Holder.
(x) Any Order submitted in an Auction by a Broker-Dealer to
the Auction Agent prior to the Submission Deadline on any Interest Determination
Date shall be irrevocable.
(c) (i) Not earlier than the Submission Deadline on each
Interest Determination Date, the Auction Agent shall assemble all valid Orders
submitted or deemed submitted to it by the Broker-Dealers (each such Order as
submitted or deemed submitted by a Broker-Dealer being hereinafter referred to
individually as a "Submitted Hold Order," a
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"Submitted Bid" or a "Submitted Sell Order," as the case may be, or as a
"Submitted Order" and collectively as "Submitted Hold Orders," "Submitted Bids"
or "Submitted Sell Orders," as the case may be, or as "Submitted Orders") and
shall determine:
(A) the excess of the total principal
amount of Outstanding Notes over the sum of the aggregate principal amount of
Outstanding Notes subject to Submitted Hold Orders (such excess being
hereinafter referred to as the "Available Notes"), and
(B) from the Submitted Orders whether:
(1) the aggregate principal amount of
Outstanding Notes subject to Submitted Bids by Potential Holders specifying one
or more rates equal to or lower than the Maximum Auction Rate;
exceeds or is equal to the sum of:
(2) the aggregate principal amount of
Outstanding Notes subject to Submitted Bids by Existing Holders specifying one
or more rates higher than the Maximum Auction Rate; and
(3) the aggregate principal amount of
Outstanding Notes subject to submitted Sell Orders;
(in the event such excess or such equality exists, other than
because all of the Outstanding Notes are subject to Submitted Hold Orders, such
Submitted Bids described in subclause (1) above shall be referred to
collectively as "Sufficient Clearing Bids"); and
(C) if Sufficient Clearing Bids exist, the Bid
Auction Rate (the "Bid Auction Rate") shall be the lowest rate specified in such
Submitted Bids such that if:
(1) (aa) each Submitted Bid from Existing
Holders specifying such lowest rate and (bb) all other Submitted Bids from
Existing Holders specifying lower rates were rejected, thus entitling such
Existing Holders to continue to hold the principal amount of Notes subject to
such Submitted Bids; and
(2) (aa) each such Submitted Bid from
Potential Holders specifying such lowest rate and (bb) all other Submitted Bids
from Potential Holders specifying lower rates were accepted; the result would be
that such Existing Holders described in subclause (1) above would continue to
hold an aggregate principal amount of Outstanding Notes which, when added to the
aggregate principal amount of Outstanding Notes to be purchased by such
Potential Holders described in subclause (2) above, would equal not less than
the Available Notes.
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(ii) Promptly after the Auction Agent has made the
determinations pursuant to Section 2.03.2.1(c)(i) hereof, the Auction Agent
shall advise the Indenture Trustee and the Broker-Dealers of the Net Loan Rate,
the Maximum Auction Rate and the All Hold Rate and the components thereof on the
Interest Determination Date and, based on such determinations, the Auction Rate
for the next succeeding Interest Accrual Period as follows:
(A) if Sufficient Clearing Bids exist, that the Auction
Rate for the next succeeding Interest Accrual Period shall be equal to the Bid
Auction Rate so determined;
(B) if Sufficient Clearing Bids do not exist (other than
because all of the Outstanding Notes are subject to Submitted Hold Orders), that
the Auction Rate for the next succeeding Interest Accrual Period shall be equal
to the Maximum Auction Rate; or
(C) if all Outstanding Notes are subject to Submitted
Hold Orders, that the Auction Rate for the next succeeding Interest Accrual
Period shall be equal to the All Hold Rate.
(iii) Promptly after the Auction Agent has determined the
Auction Rate, the Auction Agent shall determine and advise the Indenture Trustee
of the Series Interest Rate, which rate shall be the lesser of (a) the Formula
Rate and (b) the Net Loan Rate. In no event shall the Series Interest Rate
exceed 17%.
(d) Existing Holders shall continue to hold the
principal amount of Notes that are subject to Submitted Hold Orders. If the Net
Loan Rate is equal to or greater than the Bid Auction Rate and if Sufficient
Clearing Bids have been received by the Auction Agent, the Bid Auction Rate will
be the Auction Rate, and Submitted Bids and Submitted Sell Orders will be
accepted or rejected and the Auction Agent will take such other action as
described below in subparagraph (i).
If the Net Loan Rate is greater than the Auction Rate, the
Series Interest Rate for the Outstanding Notes will be the Auction Rate. If the
Net Loan Rate is less than the Auction Rate, the Series Interest Rate for the
Outstanding Notes will be the Net Loan Rate. If the Auction Rate and the Net
Loan Rate for the Notes are both greater than 17%, the Series Interest Rate
shall be equal to 17%. If the Auction Agent has not received Sufficient Clearing
Bids (other than because all of the Outstanding Notes are subject to Submitted
Hold Orders), the Series Interest Rate will be the lesser of the Auction Rate
(which shall be the Maximum Auction Rate) and the Net Loan Rate, but in no event
greater than 17%. In any of the cases described above, Submitted Orders will be
accepted or rejected and the Auction Agent will take such other action as
described below in subparagraph (ii).
(i) if Sufficient Clearing Bids have been made and the Net
Loan Rate is equal to or greater than the Bid Auction Rate (in which case the
Series Interest Rate shall be the Bid Auction Rate), all Submitted Sell Orders
shall be accepted and, subject to the provisions of paragraphs (iv) and (v) of
this Section 2.03.1.1(d), Submitted Bids shall be accepted or rejected as
follows in the following order of priority and all other Submitted Bids shall be
rejected:
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(A) Existing Holders' Submitted Bids specifying any rate
that is higher than the Series Interest Rate shall be accepted, thus requiring
each such Existing Holder to sell the aggregate principal amount of Notes
subject to such Submitted Bids;
(B) Existing Holders' Submitted Bids specifying any rate
that is lower than the Series Interest Rate shall be rejected, thus entitling
each such Existing Holder to continue to hold the aggregate principal amount of
Notes subject to such Submitted Bids;
(C) Potential Holders' Submitted Bids specifying any rate
that is lower than the Series Interest Rate shall be accepted;
(D) Each Existing Holders' Submitted Bid specifying a
rate that is equal to the Series Interest Rate shall be rejected, thus entitling
such Existing Holder to continue to hold the aggregate principal amount of Notes
subject to such Submitted Bid, unless the aggregate principal amount of
Outstanding Notes subject to all such Submitted Bids shall be greater than the
principal amount of Notes (the "remaining principal amount") equal to the excess
of the Available Notes over the aggregate principal amount of Notes subject to
Submitted Bids described in clauses (B) and (C) of this Section 2.03.1.1(d)(i),
in which event such Submitted Bid of such Existing Holder shall be rejected in
part, and such Existing Holder shall be entitled to continue to hold the
principal amount of Notes subject to such Submitted Bid, but only in an amount
equal to the aggregate principal amount of Notes obtained by multiplying the
remaining principal amount by a fraction, the numerator of which shall be the
principal amount of Outstanding Notes held by such Existing Holder subject to
such Submitted Bid and the denominator of which shall be the sum of the
principal amount of Outstanding Notes subject to such Submitted Bids made by all
such Existing Holders that specified a rate equal to the Series Interest Rate;
and
(E) Each Potential Holder's Submitted Bid specifying a
rate that is equal to the Series Interest Rate shall be accepted, but only in an
amount equal to the principal amount of Notes obtained by multiplying the excess
of the aggregate principal amount of Available Notes over the aggregate
principal amount of Notes subject to Submitted Bids described in clauses (B),
(C) and (D) of this Section 2.03.1.1(d)(i) by a fraction the numerator of which
shall be the aggregate principal amount of Outstanding Notes subject to such
Submitted Bid and the denominator of which shall be the sum of the principal
amount of Outstanding Notes subject to Submitted Bids made by all such Potential
Holders that specified a rate equal to the Series Interest Rate; and
(F) Each Potential Noteholder's Bid specifying a rate
that is higher than the Series Interest Rate will be rejected.
(ii) If Sufficient Clearing Bids have not been made (other
than because all of the Outstanding Notes are subject to submitted Hold Orders),
or if the Net Loan Rate is less than the Bid Auction Rate (in which case the
Series Interest Rate shall equal the Net Loan Rate), or if the Series Interest
Rate would be greater than 17%, subject to the provisions of Section
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2.03.1.1(d)(iv), Submitted Orders shall be accepted or rejected as follows in
the following order of priority and all other Submitted Bids shall be rejected:
(A) Existing Holders' Submitted Bids specifying any rate
that is equal to or lower than the Series Interest Rate shall be rejected, thus
entitling such Existing Holders to continue to hold the aggregate principal
amount of Notes subject to such Submitted Bids;
(B) Potential Holders' Submitted Bids specifying (1) any
rate that is equal to or lower than the Series Interest Rate shall be accepted
and (2) any rate that is higher than the Series Interest Rate shall be rejected;
and
(C) each Existing Holder's Submitted Bid specifying any
rate that is higher than the Series Interest Rate and the Submitted Sell Order
of each Existing Holder shall be accepted, thus entitling each Existing Holder
that submitted any such Submitted Bid or Submitted Sell Order to sell the Notes
subject to such Submitted Bid or Submitted Sell Order, but in both cases only in
an amount equal to the aggregate principal amount of Notes obtained by
multiplying the aggregate principal amount of Notes subject to Submitted Bids
described in clause (B) of this Section 2.03.1.1(d)(ii) by a fraction the
numerator of which shall be the aggregate principal amount of Outstanding Notes
held by such Existing Holder subject to such Submitted Bid or Submitted Sell
Order and the denominator of which shall be the aggregate principal amount of
Outstanding Notes subject to all such Submitted Bids and Submitted Sell Orders.
(iii) If all Outstanding Notes are subject to Submitted Hold
Orders, all Submitted Bids shall be rejected.
(iv) If, as a result of the procedures described in paragraph
(i) or (ii) of this Section 2.03.1.1(d), any Existing Holder would be entitled
or required to sell, or any Potential Holder would be entitled or required to
purchase, a principal amount of Notes that is not equal to an Authorized
Denomination, the Auction Agent shall, in such manner as in its sole discretion
it shall determine, round up or down the principal amount of Notes to be
purchased or sold by any Existing Holder or Potential Holder so that the
principal amount of Notes purchased or sold by each Existing Holder or Potential
Holder shall be equal to an Authorized Denomination.
(v) If, as a result of the procedures described in paragraph
(ii) of this Section 2.03.1.1(d), any Potential Holder would be entitled or
required to purchase less than an Authorized Denomination of Notes, the Auction
Agent shall, in such manner as in its sole discretion it shall determine,
allocate Notes for purchase among Potential Holders so that only Notes in
Authorized Denominations are purchased by any Potential Holder, even if such
allocation results in one or more of such Potential Holders not purchasing any
Notes.
(e) Based on the result of each Auction, the Auction Agent
shall determine the aggregate principal amount of Notes to be purchased and the
aggregate principal amount of Notes to be sold by Potential Holders and Existing
Holders on whose behalf each Broker-Dealer submitted Bids or Sell Orders and,
with respect to each Broker-Dealer, to the extent that such aggregate principal
amount of Notes to be sold differs from such
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aggregate principal amount of Notes to be purchased, determine to which other
Broker-Dealer or Broker Dealers acting for one or more purchasers such
Broker-Dealer shall deliver, or from which other Broker-Dealer or Broker-Dealers
acting for one or more sellers such Broker-Dealer shall receive, as the case may
be, Notes.
(f) The Issuer and any affiliate may not submit an Order in any
Auction.
(g) Any calculation by the Auction Agent (or Administrator or
the Indenture Trustee, if applicable) of the Series Interest Rate, the
Applicable LIBOR Rate, the Maximum Auction Rate, the All Hold Rate, the Net Loan
Rate and the Non-Payment Rate shall, in the absence of manifest error, be
binding on all other parties.
SECTION 2.03.1.2 APPLICATION OF INTEREST PAYMENTS FOR THE
NOTES.
(a) The Indenture Trustee shall determine not later than 12:00
Noon, eastern time, on the Business Day next succeeding an Auction Period
Distribution Date, whether a Payment Default has occurred. If a Payment Default
has occurred, the Indenture Trustee shall, not later than 12:15 p.m., eastern
time, on such Business Day, send a notice thereof in substantially the form of
Exhibit F attached hereto to the Auction Agent by telecopy or similar means and,
if such Payment Default is cured, the Indenture Trustee shall immediately send a
notice in substantially the form of Exhibit F attached hereto to the Auction
Agent by telecopy or similar means.
(b) Not later than 12:00 Noon, eastern time, on each Auction
Period Distribution Date the Indenture Trustee shall pay to the Auction Agent,
in immediately available funds out of amounts in the Expense Account, an amount
equal to the Auction Agent Fee and the Broker-Dealer Fee as calculated in the
Auction Agent Agreement. The Indenture Trustee shall, from time to time at the
request of the Auction Agent and with the approval of an Authorized Officer of
the Issuer, reimburse the Auction Agent for its reasonable expenses as provided
in the Auction Agent Agreement, such expenses to be paid out of amounts in the
Expense Account.
SECTION 2.03.1.3 CALCULATION OF MAXIMUM AUCTION RATE, ALL HOLD
RATE, NET LOAN RATE, APPLICABLE LIBOR RATE AND NON-PAYMENT RATE. The Auction
Agent shall calculate the Maximum Auction Rate, the All Hold Rate and the
Applicable LIBOR Rate on each Interest Determination Date and shall notify the
Indenture Trustee and the Broker-Dealers of the Maximum Auction Rate, the All
Hold Rate and the Applicable LIBOR Rate as provided in the Auction Agent
Agreement. The Administrator shall calculate the Net Loan Rate and no later than
the Business Day immediately preceding each Interest Determination Date shall
report to the Auction Agent in writing, the Net Loan Rate. Upon receipt of
notice from the Indenture Trustee of a failed Auction Period Conversion as
described in Section 2.03.1.9 hereof, the Auction Agent shall calculate the
Maximum Auction Rate and the Administrator will report to the Auction Agent in
writing the Net Loan Rate as of such failed Auction Period Conversion and give
notice thereof as provided and to the parties specified in Section 2.3(b)(iv) of
the Auction Agent Agreement. If the ownership of a Series of Notes is no longer
maintained in Book-Entry form by the Depository, the Indenture Trustee shall
calculate the Maximum Auction
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Rate and Administrator shall report to the Indenture Trustee in writing the Net
Loan Rate on the Business Day immediately preceding the commencement of each
Interest Accrual Period after the delivery of certificates representing such
Series of Notes pursuant to this Indenture. If a Payment Default shall have
occurred, the Indenture Trustee shall calculate the Non-Payment Rate on the
Interest Determination Date for (i) each Interest Accrual Period commencing on
or after the occurrence and during the continuance of such Payment Default and
(ii) any Interest Accrual Period commencing less than two Business Days after
the cure of any Payment Default. The Auction Agent shall determine the
Applicable LIBOR Rate for each Interest Accrual Period other than the Initial
Period; provided, that if the ownership of the Auction Rate is no longer
maintained in Book-Entry form, or if a Payment Default has occurred, then the
Indenture Trustee shall determine the Applicable LIBOR Rate for each such
Interest Accrual Period. The determination by the Indenture Trustee or the
Auction Agent, as the case may be, of the Applicable LIBOR Rate shall (in the
absence of manifest error) be final and binding upon all parties. If determined
by the Auction Agent, the Auction Agent shall promptly advise the Indenture
Trustee of the Applicable LIBOR Rate.
SECTION 2.03.1.4 NOTIFICATION OF RATES, AMOUNTS AND PAYMENT
DATES.
(a) By 10:00 a.m., eastern time, on the Business Day following
each Record Date, the Indenture Trustee shall determine the aggregate amounts of
interest distributable on the next succeeding Auction Period Distribution Date
to the beneficial owners of Notes.
(b) Promptly after the Closing Date and after the beginning of
each subsequent Interest Accrual Period, and in any event at least four (4) days
prior to any Auction Period Distribution Date, as the case may be, the Indenture
Trustee shall:
(i) confirm with the Auction Agent, so long as no Payment
Default has occurred and is continuing and the ownership of the Notes is
maintained in Book-Entry form by the Depository, (1) the date of such next
Auction Period Distribution Date and (2) the amount payable to the Auction Agent
on the Interest Determination Date pursuant to Section 2.03.1.2(b) hereof;
(ii) pursuant to Section 2.03.3 hereof, advise the Holders
of any Carryover Interest accruing on any series of Notes; and
(iii) advise the Depository, so long as the ownership of
the Notes is maintained in Book-entry form by the Depository, upon request, of
the Series Interest Rate payable on the Notes and the interest amount.
If any day scheduled to be an Auction Period Distribution Date
shall be changed after the Indenture Trustee shall have given the notice or
confirmation referred to in clause (i) of the preceding sentence, the Indenture
Trustee shall, not later than 9:15 a.m., eastern time, on the Business Day next
preceding the earlier of the new Auction Period Distribution Date or the old
Auction Period Distribution Date, by such means as the Indenture Trustee deems
practicable, give notice of such change to the Auction Agent, so long as no
Payment Default has occurred
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and is continuing and the ownership of the Notes is maintained in Book-Entry
Form by the Depository.
SECTION 2.03.1.5 AUCTION AGENT.
(a) Bankers Trust Company is hereby appointed as Auction Agent
to serve as agent for the Issuer in connection with Auctions. The Indenture
Trustee shall enter into the Initial Auction Agent Agreement with Bankers Trust
Company, as the Initial Auction Agent. Any Substitute Auction Agent shall be (i)
a bank, national banking association or trust company duly organized under the
laws of the United States of America or any state or territory thereof having
its principal place of business in the Borough of Manhattan, New York, or such
other location as is approved by the Indenture Trustee and the Calculation Agent
in writing and having a combined capital stock or surplus of at least
$50,000,000, or (ii) a member of the National Association of Securities Dealers,
Inc., having a capitalization of at least $50,000,000, and, in either case,
authorized by law to perform all the duties imposed upon it hereunder and under
the Auction Agent Agreement. The Auction Agent may at any time resign and be
discharged of the duties and obligations created by this Indenture by giving at
least 90 days' notice to the Indenture Trustee, the Issuer and the Calculation
Agent. The Auction Agent may be removed at any time by the Indenture Trustee
upon the written direction of an Authorized Officer of the Issuer or the Holders
of 66-2/3% of the aggregate principal amount of the Notes then Outstanding, and
if by the Holders, by an instrument signed by such Holders or their attorneys
and filed with the Auction Agent, the Issuer, the Indenture Trustee and the
Calculation Agent upon at least 90 days' notice. Neither resignation nor removal
of the Auction Agent pursuant to the preceding two sentences shall be effective
until and unless a Substitute Auction Agent has been appointed and has accepted
such appointment. If required by the Issuer or by the Calculation Agent, with
the Issuer's consent, a Substitute Auction Agent Agreement shall be entered into
with a Substitute Auction Agent. Notwithstanding the foregoing, the Auction
Agent may terminate the Auction Agent Agreement if, within fifteen (15) days
after notifying the Indenture Trustee, the Issuer and the Calculation Agent in
writing that it has not received payment of any Auction Agent Fee due it in
accordance with the terms of the Auction Agent Agreement, the Auction Agent does
not receive such payment.
(b) If the Auction Agent shall resign or be removed or be
dissolved, or if the property or affairs of the Auction Agent shall be taken
under the control of any state or federal court or administrative body because
of bankruptcy or insolvency, or for any other reason, the Indenture Trustee at
the direction of an Authorized Officer of the Issuer (after receipt of a
certificate from the Calculation Agent confirming that any proposed Substitute
Auction Agent meets the requirements described in the immediately preceding
paragraph), shall use its best efforts to appoint a Substitute Auction Agent.
(c) The Auction Agent shall act as agent for the Issuer in
connection with Auctions. In the absence of bad faith, negligent failure to act
or negligence on its part, the Auction Agent shall not be liable for any action
taken, suffered or omitted or any error of judgment made by it in the
performance of its duties under the Auction Agent Agreement and
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shall not be liable for any error of judgment made in good faith unless the
Auction Agent shall have been negligent in ascertaining (or failing to
ascertain) the pertinent facts.
(d) In the event of a change in the Auction Agent Fee Rate
pursuant to Section 6.4(b) of the Auction Agent Agreement, the Auction Agent
shall give a Notice of Fee Rate Change to the Indenture Trustee in accordance
with the Auction Agent Agreement.
SECTION 2.03.1.6. BROKER-DEALERS.
(a) The Auction Agent has entered into Broker-Dealer Agreements
with Salomon Smith Barney Inc. and Banc of America Securities LLC, as the
initial Broker-Dealers. An Authorized Officer of the Issuer may, from time to
time, approve one or more additional persons to serve as Broker-Dealers under
Broker-Dealer Agreements and shall be responsible for providing such
Broker-Dealer Agreements to the Indenture Trustee and the Auction Agent;
provided, however, that while Salomon Smith Barney Inc. is serving as a
Broker-Dealer, Salomon Smith Barney Inc. shall have the right to consent to the
approval of any additional Broker-Dealers, which consent will not be
unreasonably withheld.
(b) Any Broker-Dealer may be removed at any time, at the
request of an Authorized Officer of the Issuer, but there shall, at all times,
be at least one Broker-Dealer appointed and acting as such.
SECTION 2.03.1.7 CHANGES IN AUCTION PERIOD OR PERIODS.
(a) While any of the Notes are Outstanding, the Issuer may,
from time to time, convert on an Auction Period Distribution Date the length of
one or more Auction Periods pursuant to an Auction Period Adjustment, in order
to conform with then current market practice with respect to similar securities
or to accommodate economic and financial factors that may affect or be relevant
to the length of the Auction Period and the interest rate borne by the Notes;
provided, however that the Issuer shall only initiate a change in the length in
the Auction Period to an Auction Period of other than seven (7) or twenty-eight
(28) days upon written evidence based on a Cash Flow Statement from each of the
Rating Agencies then rating any Outstanding Notes that such a change will not
adversely affect any rating of such Rating Agencies on any Outstanding Notes;
provided, further, however, that each Rating Agency may waive the requirement
for delivery of a Cash Flow Statement. The Issuer shall not initiate an Auction
Period Adjustment unless it shall have received the written consent of the
Calculation Agent, which consent shall not be unreasonably withheld, not less
than fifteen (15) days nor more than twenty (20) days prior to the Auction
Period Adjustment. The Issuer shall initiate the Auction Period Adjustment by
giving written notice to the Indenture Trustee, the Auction Agent, the
Calculation Agent, the Depository and each Rating Agency then rating the Notes
subject to such Auction Period Adjustment in substantially the form of, or
containing substantially the information contained in, Exhibit G to this
Indenture at least ten (10) days prior to the Interest Determination Date for
such Auction Period.
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(b) The length of any such adjusted Auction Period pursuant to
an Auction Period Adjustment shall be subject to the limitations thereon set
forth in the definition of an Auction Period Adjustment in this Indenture.
(c) An Auction Period Adjustment shall not be allowed unless
Sufficient Clearing Bids existed or all of the Outstanding Notes were subject to
Submitted Hold Orders at both the Auction, if any, before the date on which the
notice of the proposed change was given as provided in this Section 2.03.1.7 and
the Auction immediately preceding the proposed change.
(d) An Auction Period Adjustment shall take effect on an
Auction Period Distribution Date only if (A) the Indenture Trustee and the
Auction Agent receive, by 11:00 a.m., eastern time, on the Business Day before
the Interest Determination Date for the first such Auction Period, a certificate
from the Issuer in substantially the form attached as, or containing
substantially the same information contained in, Exhibit H to this Indenture,
authorizing the Auction Period Adjustment specified in such certificate along
with a copy of the certificate of the Calculation Agent described above in
subparagraph (a) and (B) Sufficient Clearing Bids exist or all of the
Outstanding Notes are subject to Submitted Hold Orders on the Interest
Determination Date for such first Auction Period. If the condition referred to
in (A) above is not met, the Auction Rate for the Auction Period commencing on
the Effective Date (as defined in Exhibit H) will be determined pursuant to the
Auction Procedures and the Auction Period shall be the Auction Period determined
without reference to the proposed change. If the condition referred to in (A) is
met but the condition referred in (B) above is not met, the Series Interest Rate
for the next Auction Period shall be the lesser of the Auction Rate (which shall
be the Maximum Auction Rate) and the Net Loan Rate, but in no event greater than
17%, and the Auction Period shall be the Auction Period determined without
reference to the proposed change.
(e) In connection with any Auction Period Adjustment, the
Auction Agent will provide such further notice as is specified in Section 2.5 of
the Auction Agent Agreement.
(f) While any of the Notes are Outstanding, the Issuer may,
from time to time, change the length of one or more Auction Periods pursuant to
an Auction Period Conversion. In such case, the Issuer, the Indenture Trustee
and the Auction Agent shall comply with the provisions of Section 2.03.1.9 of
this Indenture for effecting such an Auction Period Conversion. If the
conditions set forth in Section 2.03.1.9 are not met, the Series Interest Rate
for the Auction Period with respect to which the proposed Auction Rate
Conversion was to have been effective shall be the lesser of the Auction Rate
(which shall be the Maximum Auction Rate) and the Net Loan Rate, but in no event
greater than 17%, and the Auction Period shall be the Auction Period determined
without reference to the proposed change.
SECTION 2.03.1.8 CHANGES IN THE INTEREST DETERMINATION DATE.
The Calculation Agent may specify an earlier Interest Determination Date than
the Interest Determination Date that would otherwise be determined in accordance
with the definition of "Interest Determination Date" in Article I of this Terms
Supplement with respect to one or more specified Auction Periods in order to
conform with then current market practice with respect to similar securities or
to accommodate economic and financial factors that may affect or be relevant to
the day of the
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week constituting an Interest Determination Date and the Series Interest Rate
borne on the Notes. The Authorized Officer of the Issuer shall not consent to
such change in the Interest Determination Date unless he or she shall have
received a written request for consent from the Calculation Agent not less than
fifteen (15) days nor more than twenty (20) days prior to the effective date of
such change. The Calculation Agent shall provide notice of its determination to
specify an earlier Interest Determination Date for one or more Auction Periods
by means of a written notice delivered at least ten (10) days prior to the
proposed changed Interest Determination Date to the Indenture Trustee, the
Auction Agent, the Issuer and the Depository. Such notice shall be substantially
in the form of, or contain substantially the information contained in, Exhibit I
to this Indenture.
In connection with any change described in this Section
2.03.1.8, the Auction Agent will provide such further notice as is specified in
Section 2.5 of the Auction Agent Agreement.
SECTION 2.03.1.9 AUCTION PERIOD CONVERSIONS. At the option of
the Issuer, the length of an Auction Period for a Series of Notes is subject to
an Auction Period Conversion on an Auction Period Conversion Date. The length of
the new Auction Period, the new Interest Determination Dates, if any, and the
Auction Period Distribution Dates with respect to the new Auction Period shall
be set forth in a Supplemental Indenture executed in connection with such
Auction Period Conversion. No such Auction Period Conversion shall be effective
unless prior to the Auction Period Conversion Date the Issuer shall have
furnished to the Indenture Trustee written evidence from each of the Rating
Agencies then rating any Outstanding Notes that execution of the Supplemental
Indenture and the related Auction Period Conversion will not adversely affect
the ratings on any series of Outstanding Notes.
With respect to an Auction Period Conversion, the Issuer shall
give written notice to the Indenture Trustee, the Auction Agent, the Calculation
Agent and the Remarketing Agent of any such proposed Auction Period Conversion
not less than twenty-eight (28) days prior to the Auction Period Conversion Date
in substantially the form of, or containing substantially the information
contained in, Exhibit J to this Indenture.
Upon receipt of such written notice from the Issuer, the
Indenture Trustee shall give written notice to the Holders of such Series of
Notes in the manner set forth in Section 3.01 of this Terms Supplement not less
than twenty-five (25) days prior to the Auction Period Conversion Date. Such
notice shall state (i) that (a) the length of the Auction Period will be
converted (1) from an Auction Period between seven (7) and ninety-one (91) days,
inclusive, to an Auction Period between ninety-two (92) days and the Legal Final
Maturity of such Series of Notes, inclusive, (2) from an Auction Period between
ninety-two (92) days and the Legal Final Maturity of such Series of Notes,
inclusive, to an Auction Period between seven (7) and ninety-one (91) days,
inclusive, or (3) from an Auction Period between ninety-two (92) days and the
Legal Final Maturity of such Series of Notes, inclusive, to an Auction Period
between ninety-two (92) days and the Legal Final Maturity of such Series of
Notes, inclusive, if such latter Auction Period is at least three (3) months
shorter or at least three (3) months longer than the Auction Period established
for such series at its initial issuance or pursuant to an Auction
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Period Conversion, as applicable; (ii) the Auction Period Conversion Date, (iii)
that all Holders of such Series of Notes are required to tender their Notes to
the Indenture Trustee or its agent no later than the Auction Period Conversion
Date for purchase at a price equal to 100% of the principal amount thereof plus
accrued interest and any unpaid Carryover Interest (and interest accrued
thereon) to the Auction Period Conversion Date; provided, however, that all such
Notes that are not tendered to the Indenture Trustee by such date shall be
deemed tendered to the Indenture Trustee as of the Auction Period Conversion
Date, subject, however, to remarketing or purchase by the Remarketing Agent for
settlement on the Auction Period Conversion Date and receipt by the Indenture
Trustee of the purchase price equal to 100% of the principal amount of Notes
from the purchasers thereof or the Remarketing Agent; (iv) that in the event
that on the Auction Period Conversion Date, the Remarketing Agent has been
unable to remarket all Notes for settlement on the Auction Period Conversion
Date and has elected not to purchase for its own account such unremarketed
Notes, or on the Auction Period Conversion Date the Indenture Trustee has not
received the purchase price equal to 100% of the principal amount of the Notes
from the purchasers thereof or the Remarketing Agent, the proposed Auction
Period Conversion of the Notes shall be canceled and such Notes shall remain in
the Auction Period applicable to such Notes prior to the proposed Auction Period
Conversion; (v) that the proposed Auction Period Conversion is conditioned upon
there being sufficient moneys available in the Note Payment Account, after
making provision for the payment of accrued interest on such Notes and interest
on other Notes due and payable on such Auction Period Conversion Date to pay on
the Auction Period Conversion Date all Carryover Interest (and accrued interest
thereon), if any, on such Notes through the Auction Period Conversion Date; and
(vi) that a Holder has no right to elect to retain any such Auction Rate that
have been remarketed, or will be purchased, by the Remarketing Agent, on the
Auction Period Conversion. The Indenture Trustee shall mail a copy of such
notice to each of the Rating Agencies.
Notwithstanding anything to the contrary in this Section
2.03.1.9 or elsewhere in this Indenture, if all of the Notes subject to Auction
Period Conversion are not remarketed or purchased by the Remarketing Agent for
settlement on the Auction Period Conversion Date, or if the Indenture Trustee
does not, by 11:00 a.m., eastern time, on the Auction Period Conversion Date
receive from the purchaser or the Remarketing Agent the purchase price equal to
100% of the principal amount thereof or if there are not sufficient moneys
available in the Note Payment Account, after making provision for the payment of
accrued interest on such Notes due and payable on Auction Period Conversion Date
to pay on the Auction Period Conversion Date all Carryover Interest (and accrued
interest thereon), if any, on such Notes through the Auction Period Conversion
Date, none of such Notes shall be subject to such Auction Period Conversion, but
all such Notes shall bear interest at the lesser of the Net Loan Rate or the
Auction Rate (which shall be the Maximum Auction Rate), but in no event greater
than 17%, for the Interest Accrual Period commencing on such date and shall
continue to be held by and registered to the Holders that held such Notes
immediately prior to the failed Auction Period Conversion. Upon the occurrence
of a failed Auction Period Conversion, the Indenture Trustee shall give written
notice to the Issuer, the Auction Agent, the Calculation Agent, the Remarketing
Agent and each Rating Agency then rating the Notes, as appropriate, confirming
such failure.
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SECTION 2.03.1.10 MANDATORY TENDER AND PURCHASE OF SERIES
NOTES IN CONNECTION WITH AUCTION PERIOD CONVERSION.
In the event that an Auction Period Conversion with respect to
a Series of Notes is to take place, such Notes shall be tendered to the
Authenticating Agent no later than the related Auction Period Conversion Date
for purchase at a purchase price equal to 100% of the principal amount thereof
plus accrued interest and any unpaid Carryover Interest (and any interest
accrued thereon) to the Auction Period Conversion Date; provided, however, that
any Note not tendered to the Authenticating Agent by such date shall be deemed
tendered to the Authenticating Agent. The Indenture Trustee shall give notice by
mail to the Holders of such Notes not less than twenty-five (25) days prior to
the Auction Period Conversion Date, of the mandatory tender of such Series of
Notes, which notice shall be contained in the notice given in accordance with
the provisions of Section 2.03.1.9 hereof.
Pursuant to a Remarketing Agreement, the Remarketing Agent
shall be obligated (i) to use its best efforts to remarket the Notes subject to
an Auction Period Conversion at a purchase price of not less than 100% of the
principal amount thereof, (ii) not later than 3:00 p.m., eastern time, on the
Business Day before the Auction Period Conversion Date, to give notice to the
Indenture Trustee stating whether all of the Notes have been remarketed or will
be purchased by the Remarketing Agent on the Auction Period Conversion Date, and
(iii) to cause the purchase price of each Note so remarketed or to be purchased
by the Remarketing Agent to be deposited in the fund to be established under a
Remarketing Agreement and maintained by the Indenture Trustee pursuant to a
Remarketing Agreement (the "Note Purchase Fund") in immediately available funds.
Pursuant to a Remarketing Agreement, all amounts deposited in the Note Purchase
Fund as aforesaid shall be held by the Indenture Trustee uninvested and in cash
and in trust for the sole and exclusive benefit of the Holders of the Notes for
the purchase of which such amounts were deposited in the Note Purchase Fund and
shall be applied by the Indenture Trustee to such purchase by payment to such
Holders without further authorization or direction. Accrued interest and any
unpaid Carryover Interest (and any interest accrued thereon) on the Notes shall
be paid by the Indenture Trustee to such Holders from the Note Payment Account.
If by 11:00 a.m., eastern time, on the Auction Period
Conversion Date, there is on deposit in the Note Purchase Fund and the Note
Payment Account an aggregate amount sufficient to pay the purchase price of all
Notes subject to Auction Period Conversion equal to 100% of the principal amount
thereof plus accrued interest and any unpaid Carryover Interest (and any
interest accrued thereon) due and payable on the Auction Period Conversion Date,
all Notes which have not been delivered to the Indenture Trustee shall be deemed
to have been tendered in accordance with the provisions hereof. In connection
with an Auction Period Conversion, if necessary, replacement note certificates,
if any, amending and restating the tendered or deemed tendered note certificates
with respect to changes to the terms of such tendered or deemed tendered note
certificates, shall be authenticated by the Indenture Trustee and delivered to
the purchasers thereof; provided, however, that in the case of Notes held in a
Book-Entry System, any such replacement Notes shall be authenticated by the
Indenture Trustee and delivered to the Depository or its agent. The Holder of
any undelivered Notes shall not be
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entitled to any payment (including any interest to accrue on and subsequent to
the Auction Period Conversion Date) other than the purchase price for such
undelivered Notes, and undelivered Notes shall no longer be entitled to the
benefit of this Indenture, except for the purpose of payment of the purchase
price therefor.
As of such Auction Period Conversion Date, the Notes subject
to Auction Period Conversion shall be registered to the purchasers thereof,
regardless of tender of the predecessor Notes by the Holders thereof and shall
bear interest at the new Auction Rate for the new Auction Period. The Issuer
shall give written notice to the Indenture Trustee, the Auction Agent, the
Calculation Agent and the Depository of any such successful Auction Period
Conversion no later than 5:00 p.m., eastern time, on the Auction Period
Conversion Date in substantially the form of, or containing substantially the
information contained in, Exhibit K to this Indenture.
The Holders of Notes which are subject to mandatory tender on
the Auction Period Conversion Date do not have the right to elect to retain such
Notes. Subject only to receipt by the Indenture Trustee from the purchaser of
the purchase price equal to 100% of the principal amount of all Notes on the
Auction Period Conversion Date and the payment of accrued interest and any
unpaid Carryover Interest (and accrued interest thereon) as described above,
such Notes will be deemed to be tendered to the Indenture Trustee on such
Auction Period Conversion Date and registered in the names of the purchasers
thereof.
If by 11:00 a.m., eastern time, on the Auction Period
Conversion Date there is not on deposit in the Note Purchase Fund and the Note
Payment Account (after taking into account other amounts to be paid from the
Note Payment Account as hereinbefore described) an aggregate amount sufficient
to pay the purchase price of all Notes subject to Auction Period Conversion all
Notes that have been tendered to the Indenture Trustee shall be returned by the
Indenture Trustee to the tendering Holders thereof, and the Indenture Trustee
shall give written notice on the date that the proposed Auction Period
Conversion was to have occurred to each Holder of Notes, whether such Holder has
actually tendered his Notes or not, that (i) the Auction Period Conversion of
such Notes has been canceled because (A) not all Notes were remarketed or
purchased by the Remarketing Agent or (B) there were not moneys available to pay
accrued interest on such Notes due and payable on the Auction Period Conversion
Date, and any unpaid Carryover Interest (and accrued interest thereon), if any,
on such Notes and (ii) such Notes will bear interest at the lesser of the Net
Loan Rate or the Auction Rate (which shall be the Maximum Auction Rate) as of
the failed Auction Period Conversion Date for the Interest Accrual Period
commencing on such date, but in no event greater than 17%, written notice of
which Series Interest Rate will be given by the Indenture Trustee to each such
Holder on the second Business Day of the new Auction Period.
SECTION 2.03.1.11 REMARKETING AGENT NOTES. Notwithstanding the
fact that the Remarketing Agent is under no obligation to purchase any Notes in
connection with an Auction Period Conversion, in the event that the Remarketing
Agent should elect, in its sole discretion, to purchase Notes, then the Notes so
purchased by the Remarketing Agent will constitute "Remarketing Agent Notes"
until the date, if any, on which such Notes are sold by the Remarketing Agent.
For so long as such Notes constitute Remarketing Agent Notes, the
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Remarketing Agent will be entitled to payment of the Remarketing Agent Recovery
Amount, as hereinafter defined, with respect to the principal amount of
Remarketing Agent Notes. For purposes of this Section 2.03.1.11, "Remarketing
Agent Recovery Amount" shall mean, with respect to any Remarketing Agent Notes,
an amount equal to the Daily Deferred Rate, as hereinafter defined, multiplied
by the daily principal balance of such Remarketing Agent Notes for the actual
number of days such Notes constitute Remarketing Agent Notes. For purposes of
this Section 2.03.1.11, "Daily Deferred Rate" shall mean an amount equal to the
excess, if any, of (x) the rate published as the "Broker Call" in THE WALL
STREET JOURNAL on each day the Remarketing Agent is the owner of such
Remarketing Agent Notes over (y) the new Series Interest Rate in effect for such
Notes from and after the Auction Period Conversion Date. Any accrued but unpaid
Remarketing Agent Recovery Amount is payable from the Note Payment Account, to
the extent funds are available therefor after payment of all other amounts
payable therefrom, on each Auction Period Distribution Date.
In the event that the Remarketing Agent acquires Notes other
than in connection with a mandatory tender in anticipation of an Auction Period
Conversion, such Notes will not constitute Remarketing Agent Notes prior to
Auction Period Conversion. In the event that the Remarketing Agent holds such
Notes and such Notes become subject to Auction Period Conversion, the
Remarketing Agent will tender them to the Indenture Trustee, and in connection
with such Auction Period Conversion such Notes may become Remarketing Agent
Notes in accordance with the provisions of this Section 2.03.1.11.
SECTION 2.03.2 CARRYOVER INTEREST. The Calculation Agent and
Auction Agent, as appropriate, shall announce the Formula Rate and the Net Loan
Rate to the Indenture Trustee and the Issuer.
If, with respect to any Series of Notes for any Interest
Accrual Period, interest at the Formula Rate exceeds interest at the Net Loan
Rate with respect to such Series of Notes for such Interest Accrual Period, the
Series Interest Rate for such Interest Accrual Period shall be the Net Loan
Rate, and the Indenture Trustee, on the Auction Period Distribution Date for
such Interest Accrual Period, shall pay to the Holders of such Series of Notes
interest at the Net Loan Rate. With respect to such Series of Notes, the
Indenture Trustee shall also calculate the amount by which interest at the
Formula Rate exceeds interest at the Net Loan Rate for such Interest Accrual
Period, and such excess, together with interest thereon (compounded on each
Auction Period Distribution Date for the related Series when such interest is
not paid on the first Auction Period Distribution Date for such Series when such
interest was otherwise payable) at the applicable Formula Rate from the
Distribution Date for the related Series on which such excess was calculated
until paid, if at all, shall constitute Carryover Interest. Such Carryover
Interest shall be paid on each Auction Period Distribution Date for the related
Series subsequent to the Auction Period Distribution Date on which such excess
was calculated to the extent funds are available therefor in the Note Payment
Account of the Collection Fund after making the other required payments from the
Note Payment Account in accordance with the provisions of Section 5.5.2 of the
Base Indenture and Section 4.02 hereof. Carryover Interest shall continue to be
so payable notwithstanding that the principal amount of the applicable Series of
Notes has been reduced to zero until (i) no Notes remain outstanding and (ii)
the balances in the Funds and
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Accounts have been reduced to zero. For purpose of the Indenture any reference
herein to "principal or "interest" shall not include within the meaning of such
words Carryover Interest.
Carryover Interest shall be separately calculated for each
Series of Notes by the Indenture Trustee in sufficient time for the Indenture
Trustee to give notice to each Holder of such Carryover Interest as required in
this paragraph. On the Auction Period Distribution Date for an Interest Accrual
Period with respect to which Carryover Interest has been calculated by the
Indenture Trustee, the Indenture Trustee shall, in accordance with Section 7.10
of the Base Indenture, give written notice to each Holder of the Carryover
Interest applicable to such Holder's Note for such Interest Accrual Period,
which written notice may accompany the payment of interest by check made to each
such Holder on such Auction Period Distribution Date or otherwise shall be
mailed on such Auction Period Distribution Date by first class mail, postage
prepaid, to each such Holder at such Holder's address as it appears on the books
of registry maintained by the Indenture Trustee pursuant to the Indenture.
Such notice shall state, in addition to such Carryover
Interest, that, Carryover Interest shall continue to be payable notwithstanding
that the principal amount of the applicable Series of Notes has been reduced to
zero until (i) no Notes remain outstanding and (ii) the balances in the Funds
and Accounts have been reduced to zero.
SECTION 2.03.3 ADDITIONAL PROVISIONS REGARDING SERIES INTEREST
RATE. The determination of a Series Interest Rate by the Calculation Agent,
Auction Agent or any other Person pursuant to the provisions of the applicable
Section of this Article II shall be conclusive and binding on the Holders of the
Series of Note or Notes to which such Series Interest Rate applies, and the
Issuer and the Indenture Trustee may rely thereon for all purposes.
In no event shall the cumulative amount of interest paid or
payable on a Series of Notes (including interest calculated as provided herein,
plus any other amounts that constitute interest on the Notes of such Series
under applicable law which are contracted for, charged, reserved, taken or
received pursuant to the Notes of such Series or related documents) calculated
from the Date of Issuance of the Notes of such Series through any subsequent day
during the term of the Notes of such Series or otherwise prior to payment in
full of the Notes of such Series exceed the amount permitted by applicable law.
If the applicable law is ever judicially interpreted so as to render usurious
any amount called for under the Notes of such Series or related documents or
otherwise contracted for, charged, reserved, taken or received in connection
with the Notes of such Series, or if the redemption or acceleration of the
maturity of the Notes of such Series results in payment to or receipt by the
Holder or any former Holder of the Notes of such Series of any interest in
excess of that permitted by applicable law, then, notwithstanding any provision
of the Notes of such Series or related documents to the contrary, all excess
amounts theretofore paid or received with respect to the Notes of such Series
shall be credited on the principal balance of the Notes of such Series (or, if
the Notes of such Series have been paid or would thereby be paid in full,
refunded by the recipient thereof), and the provisions of the Notes of such
Series and related documents shall immediately be deemed reformed and the
amounts thereafter collectible hereunder and thereunder reduced, without the
necessity of the execution of any new document, so as to comply with the
applicable law, but so as to permit the
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recovery of the fullest amount otherwise called for under the Notes of such
Series and under the related documents.
SECTION 2.04 FORMS OF NOTES AND INSTRUCTIONS FOR PAYMENT.The
Senior Notes and the certificate of authentication and form of assignment for
transfer to be endorsed thereon shall be in substantially the form of Exhibit B
hereof, with necessary or appropriate variations, omissions or insertions, as
permitted or required by this Indenture.
The Subordinate Notes and the certificate of authentication
and form of assignment for transfer to be endorsed thereon shall be in
substantially the form of Exhibit C hereof, with necessary or appropriate
variations, omissions or insertions, as permitted or required by this Indenture.
Any instructions to the Indenture Trustee for payment of
interest on the Notes shall be in substantially the form of Exhibit D hereof,
with necessary or appropriate variations, omissions or insertions, as permitted
or required by this Indenture.
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ARTICLE III
REDEMPTION OF THE NOTES
SECTION 3.01 REDEMPTION OF NOTES IN GENERAL. The Notes shall
be subject to redemption prior to their Legal Final Maturity only upon the terms
and conditions, and only on the applicable dates and at the redemption price, as
are set forth in this Terms Supplement. The redemption price of the Notes shall,
in each case, be par plus (i) accrued interest to the applicable dates on which
such redemption will occur and (ii) all unpaid Carryover Interest, if any,
thereon. Principal of and interest and unpaid Carryover Interest on the Notes
shall be paid from the moneys available therefor in the Note Payment Account in
the Collection Fund and in the Reserve Fund.
If Outstanding Notes are to be redeemed pursuant to the
provisions of this Article III, the Indenture Trustee shall give written notice
of such redemption to the Holders of such Outstanding Notes not less than
fifteen (15) days prior to the applicable dates on which such Outstanding Notes
are to be redeemed. Each notice of redemption shall state (i) the date, Series
and numbers of the Notes to be redeemed, the applicable dates on which such
redemption will occur and the redemption price payable upon such redemption;
(ii) that the interest on such Outstanding Notes and on any unpaid Carryover
Interest shall cease to accrue from and after the applicable date on which such
redemption will occur and (iii) that on said date there will become due and
payable on each such Outstanding Note the principal amount thereof and the
interest accrued on such principal amount to the applicable date on which the
redemption will occur and all unpaid Carryover Interest. Each notice of
redemption shall also state that each such Outstanding Note must be surrendered
to the Indenture Trustee for payment of the principal of and interest and any
unpaid Carryover Interest on such Outstanding Notes.
If notice of redemption of Outstanding Notes has been duly
given as hereinbefore provided and if moneys for the payment of the principal of
and interest and any unpaid Carryover Interest on such Outstanding Notes are
held for the purpose of such payment by the Indenture Trustee, then such
Outstanding Notes shall, on the applicable dates on which such redemption will
occur, become due and payable, and interest on said Outstanding Notes and on any
unpaid Carryover Interest shall cease to accrue.
All Notes surrendered pursuant to the provisions of this
Article III shall be canceled by the Indenture Trustee.
SECTION 3.02 OPTIONAL REDEMPTION OF NOTES PRIOR TO THE LEGAL
FINAL MATURITY. (a) The Series 1999A Notes are subject to redemption in whole at
any time or in part on any Auction Period Distribution Date at the option of the
Issuer at a price equal to the principal balance of the Series 1999A Notes to be
redeemed plus accrued interest and unpaid Carryover Interest thereon; provided,
however, that if Series 1999A Notes are to be redeemed in part only, such
redemption is permitted hereunder only if each Rating Agency then rating any
Series of the Notes confirms in writing that the redemption will not result in
the withdrawal or reduction of any rating on any Series of Notes remaining
Outstanding.
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(b) While any Series 1999A Notes are Outstanding, the Series
1999B-1 Notes are subject to redemption in whole or in part on any Auction
Period Distribution Date at the option of the Issuer; provided, however that
such redemption is permitted hereunder only to the extent that after any such
redemption the Parity Percentage is not less than 101%, the Senior Parity
Percentage is not less than 109% and the aggregate principal amount of Series
1999B-1 Notes that remain Outstanding is not less than 5.75% of the aggregate
principal balance of all Notes that remain Outstanding hereunder. After the
Series 1999A Notes have been paid and are no longer Outstanding, the Series
1999B-1 Notes will be subject to redemption at the option of the Issuer in part
if after such redemption the Parity Percentage is not less than 100%, or in
whole at any time.
(c) The Notes shall be redeemed from funds deposited by or on
behalf of the Issuer or otherwise to the credit of the Note Payment Account,
upon notice given by the Indenture Trustee to the Noteholders thereof not less
than fifteen (15) days prior to the redemption date in the form and manner
described in 3.01 hereof, at a redemption price of 100% of the principal amount
redeemed plus accrued interest to the date of redemption. With respect to the
optional redemption of Notes pursuant to this Section 3.02, in the event of a
redemption in part of a Series, the Auction Notes to be redeemed will be
selected by lot by the Indenture Trustee. No Notes will be subject to redemption
in part in an amount less than an Authorized Denomination thereof, and no
portion of the Notes is to be retained by a Noteholders in an amount less than
an Authorized Denomination.
In connection with the optional redemption of any Notes, all
unpaid Carryover Interest on such Notes (and accrued interest, if any, thereon)
shall be paid on or before the date of optional redemption of such Notes.
Any amounts in the Note Payment Account in excess of the
amounts thereof applied to an optional redemption pursuant to this Section
3.03(b) shall remain in such Account until such amounts are applied by the
Indenture Trustee to any other payments to be made from such Account as provided
in Section 5.5.1 of the Base Indenture and Section 4.02 hereof or transferred to
the Issuer upon its written request if such amounts represent funds deposited by
or on behalf of the Issuer.
Notes to be redeemed pursuant to this Section 3.03(b) shall be
redeemed by the Indenture Trustee only upon written notice from the Issuer to
the Indenture Trustee. That notice shall specify the redemption date and shall
be given at least twenty (20) days prior to the redemption date or such shorter
period as shall be acceptable to the Indenture Trustee in its sole discretion.
Before the Indenture Trustee shall give notice of redemption to the Noteholders
as provided in Section 3.01 hereof, the Indenture Trustee shall confirm that
there is on deposit in the Note Payment Account funds which will be sufficient
to pay on the date fixed for redemption the redemption price of the Notes to be
redeemed pursuant to such notice.
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ARTICLE IV
DISPOSITION OF PROCEEDS OF THE NOTES; COLLECTION ACCOUNT;
ACQUISITION FUND
SECTION 4.01 DISPOSITION OF PROCEEDS OF THE NOTES. All
proceeds of the issuance and sale of the Series of Notes hereunder shall be
deposited with the Indenture Trustee on the Date of Issuance, and the Indenture
Trustee shall deposit such proceeds to the following Funds and Accounts:
(a) $3,937,500 of the proceeds of the Notes, an amount equal
to the Specified Reserve Fund Balance on the Date of Issuance, shall be
deposited by the Indenture Trustee upon receipt in the Reserve Fund;
(b) $779,820 of the proceeds of the Notes shall be deposited
by the Indenture Trustee upon receipt to the Expense Account in the
Collection Fund;
(c) $2,000,000 of the proceeds of the Notes shall be deposited
by the Indenture Trustee upon receipt to the Capitalized Interest
Account in the Acquisition Fund;
(d) The balance of the proceeds of the Notes ($516,576,430)
shall be deposited by the Indenture Trustee upon receipt in the
Acquisition Fund.
SECTION 4.02 DISPOSITION OF COLLECTION ACCOUNT.
On the first Business Day of each calendar month, as described
below, the Indenture Trustee shall transfer from the Collection Account the
following amounts in the following priority, subject to Available Funds for the
second preceding Collection Period:
(i) to the Expense Account, to the extent required to increase the
balance of such Account to the Program Expense Requirement
calculated as of such Business Day;
(ii) to the Note Payment Account,
(a) an amount up to the Series 1999A-1 Noteholders' Interest
Distribution Amount for payment on each Auction Period
Disbursement Date occurring in such calendar month to the
Series 1999A-1 Noteholders, ratably, without preference or
priority of any kind;
(b) an amount up to the Series 1999A-2 Noteholders' Interest
Distribution Amount for payment on each Auction Period
Distribution Date occurring in such calendar month to the
Series 1999A-2 Noteholders, ratably, without preference or
priority of any kind;
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(c) an amount up to the Series 1999A-3 Noteholders' Interest
Distribution Amount for payment on each Auction Period
Distribution Date occurring in such calendar month to the
Series 1999A-3 Noteholders, ratably, without preference or
priority of any kind;
(d) an amount up to the Series 1999A-4 Noteholders' Interest
Distribution Amount for payment on each Auction Period
Distribution Date occurring in such calendar month to the
Series 1999A-4 Noteholders, ratably, without preference or
priority of any kind;
(e) an amount up to the Series 1999A-5 Noteholders' Interest
Distribution Amount for payment on each Auction Period
Distribution Date occurring in such calendar month to the
Series 1999A-5 Noteholders, ratably, without preference or
priority of any kind;
(f) an amount up to the Series 1999A-6 Noteholders' Interest
Distribution Amount for payment on each Auction Period
Distribution Date occurring in such calendar month to the
Series 1999A-6 Noteholders, ratably, without preference or
priority of any kind;
(g) an amount up to any Senior Issuer Exchange Payment for
payment to the Senior Exchange Counterparty; including any
early termination payment resulting from a default by the
Issuer;
(iii) to the Note Payment Account:
(a) an amount up to the Series 1999B-1 Noteholders' Interest
Distribution Amount for payment on each Auction Period
Distribution Date occurring in such calendar month to the
Series 1999B-1 Noteholders, ratably, without preference or
priority of any kind; and
(b) an amount up to any Subordinate Issuer Exchange Payment
for payment to the Subordinate Exchange Counterparty;
including any early termination payment resulting from a
default by the Issuer;
(iv) to the Note Payment Account, an amount up to the Series
1999B-1 Noteholders' Principal Distribution Amount for payment
to the Series 1999B-1 Noteholders on the first Auction Period
Distribution Date occurring after the first Business Day of
such calendar month for which timely notice of such payment
can be provided to the Series 1999B-1 Noteholders in
accordance with this Section 4.02;
(v) to the Note Payment Account,
48
<PAGE> 52
(a) an amount up to the Series 1999A Noteholders' Principal
Distribution Amount for payment to the Series 1999A-1
Noteholders on the first Auction Period Distribution Date
occurring after the first Business Day of such calendar month
for which timely notice of such payment can be provided to the
Series 1999A-1 Noteholders in accordance with this Section
4.02 until the Outstanding principal balance of the Series
1999A-1 Notes has been reduced to zero; then,
(b) once the Series 1999A-1 Notes are no longer Outstanding,
an amount up to the Series 1999A Noteholders' Principal
Distribution Amount for payment to the Series 1999A-2
Noteholders on the first Auction Period Distribution Date
occurring after the first Business Day of such calendar month
for which timely notice of such payment can be provided to the
Series 1999A-2 Noteholders in accordance with this Section
4.02 until the Outstanding principal balance of the Series
1999A-2 Notes has been reduced to zero; then,
(c) once the Series 1999A-1 Notes and Series 1999A-2 Notes are
no longer Outstanding, an amount up to the Series 1999A
Noteholders' Principal Distribution Amount for payment to the
Series 1999A-3 Noteholders on the first Auction Period
Distribution Date occurring after the first Business Day of
such calendar month for which timely notice of such payment
can be provided to the Series 1999A-3 Noteholders in
accordance with this Section 4.02 until the Outstanding
principal balance of the Series 1999A-3 Notes has been reduced
to zero; then,
(d) once the Series 1999A-1 Notes, Series 1999A-2 Notes and
Series 1999A-3 Notes are no longer Outstanding, an amount up
to the Series 1999A Noteholders' Principal Distribution Amount
for payment to the Series 1999A-4 Noteholders on the first
Auction Period Distribution Date occurring after the first
Business Day of such calendar month for which timely notice of
such payment can be provided to the Series 1999A-4 Noteholders
in accordance with this Section 4.02 until the Outstanding
principal balance of the Series 1999A-4 Notes has been reduced
to zero; then,
(e) once the Series 1999A-1 Notes, Series 1999A-2 Notes,
Series 1999A-3 Notes and Series 1999A-4 Notes are no longer
Outstanding, an amount up to the Series 1999A Noteholders'
Principal Distribution Amount for payment to the Series
1999A-5 Noteholders on the first Auction Period Distribution
Date occurring during such calendar month for which timely
notice of such payment can be provided to the Series 1999A-5
Noteholders in accordance with this Section 4.02 until the
Outstanding principal balance of the Series 1999A-5 Notes has
been reduced to zero; then,
(f) once the Series 1999A-1 Notes, Series 1999A-2 Notes,
Series 1999A-3 Notes, Series 1999A-4 Notes and Series 1999A-5
Notes are no longer Outstanding, an amount up to the Series
1999A Noteholders' Principal
49
<PAGE> 53
Distribution Amount for payment to the Series 1999A-6
Noteholders on the first Auction Period Distribution Date
occurring after the first Business Day of such calendar month
for which timely notice of such payment can be provided to the
Series 1999A-6 Noteholders in accordance with this Section
4.02 until the Outstanding principal balance of the Series
1999A-6 Notes has been reduced to zero;
(vi) to the Reserve Fund the amount, if any, required to increase
the balance thereof to the Specified Reserve Fund Balance as
provided for in Section 5.2 of the Base Indenture;
(vii) to the Note Payment Account, an amount up to Parity Percentage
Payments to the extent then required:
(a) for payment to the Series 1999A-1 Noteholders on the first
Auction Period Distribution Date occurring after the first
Business Day of such calendar month for which timely notice of
such payment can be provided to the Series 1999A-1 Noteholders
in accordance with this Section 4.02, until the principal
balance of the Series 1999A-1 Notes has been reduced to zero;
then
(b) once the Series 1999A-1 Notes are no longer Outstanding,
for payment to the Series 1999A-2 Noteholders on the first
Auction Period Distribution Date occurring after the first
Business Day of such calendar month for which timely notice of
such payment can be provided to the Series 1999A-2 Noteholders
in accordance with this Section 4.02, until the principal
balance of the Series 1999A-2 Notes has been reduced to zero;
then
(c) once the Series 1999A-1 Notes and Series 1999A-2 Notes are
no longer Outstanding, for payment to the Series 1999A-3
Noteholders on the first Auction Period Distribution Date
occurring after the first Business Day of such calendar month
for which timely notice of such payment can be provided to the
Series 1999A-3 Noteholders in accordance with this Section
4.02, until the principal balance of the Series 1999A-3 Notes
has been reduced to zero; then
(d) once the Series 1999A-1 Notes, Series 1999A-2 Notes and
Series 1999A-3 Notes are no longer Outstanding, for payment to
the Series 1999A-4 Noteholders on the first Auction Period
Distribution Date occurring after the first Business Day of
such calendar month for which timely notice of such payment
can be provided to the Series 1999A-4 Noteholders in
accordance with this Section 4.02, until the principal balance
of the Series 1999A-4 Notes has been reduced to zero; then
(e) once the Series 1999A-1 Notes, Series 1999A-2 Notes,
Series 1999A-3 Notes and Series 1999A-4 Notes are no longer
Outstanding, for payment to the Series 1999A-5 Noteholders on
the first Auction Period Distribution Date
50
<PAGE> 54
occurring after the first Business Day of such calendar month
for which timely notice of such payment can be provided to the
Series 1999A-5 Noteholders in accordance with this Section
4.02, until the principal balance of the Series 1999A-5 Notes
has been reduced to zero; then
(f) once the Series 1999A-1 Notes, Series 1999A-2 Notes,
Series 1999A-3 Notes, Series 1999A-4 Notes and Series 1999A-5
Notes are no longer Outstanding, for payment to the Series
1999A-6 Noteholders on the first Auction Period Distribution
Date occurring after the first Business Day of such calendar
month for which timely notice of such payment can be provided
to the Series 1999A-6 Noteholders in accordance with this
Section 4.02, until the principal balance of the Series
1999A-6 Notes has been reduced to zero, then
(g) once the Series 1999A Notes are no longer Outstanding, for
payment to the Series 1999B-1 Noteholders on the first Auction
Period Distribution Date occurring after the first Business
Day of such calendar month for which timely notice of such
payment can be provided to the Series 1999B-1 Noteholders in
accordance with this Section 4.02, until the principal balance
of the Series 1999B-1 Notes has been reduced to zero;
(viii) to the Note Payment Account, an amount up to any Carryover
Interest,
(a) to the Series 1999A Noteholders for payment ratably on the
first Auction Period Distribution Date in such month, and upon
payment of all Carryover Interest due to such of the Series
1999A Noteholders, then
(b) to the Series 1999B-1 Noteholders for payment ratably on
the next succeeding Auction Period Distribution Date;
(ix) to the Note Payment Account, an amount up to the amount, if
any, owed an Exchange Counterparty in respect of an early
termination payment or damages for early termination as a
result of anything other than a default by the Issuer under
any Exchange Agreement for payment to such Exchange
Counterparty;
(x) at the option of the Issuer, to the Note Payment Account, an
amount to redeem the Series 1999B-1 Notes in accordance with
the provisions of Section 3.02 hereof; provided, however, that
so long as any Series 1999A Notes are then Outstanding, no
redemption of Series 1999B-1 Notes shall be made unless after
such redemption the Parity Percentage is at least 101%, the
Senior Parity Percentage is at least 109%, and the aggregate
principal amount of Series 1999B-1 Notes Outstanding after
such redemption is at least equal to 5.75% of the aggregate
principal amount of Notes Outstanding hereunder; and,
(xi) any remainder for transfer to the Depositor at the direction
of the Issuer to be used for any lawful purpose, if after
giving effect to such transfer the Parity
51
<PAGE> 55
Percentage is at least 102% and the Senior Parity Percentage
is at least 109%; if the Parity Percentage and the Senior
Parity Percentage are not able to be met, then any remainder
shall be retained in the Collection Account.
If, at the time interest on any Series of Notes is to be
transferred in accordance with the immediately preceding provisions, the
interest rate or rates on such Series of Notes is unknown, the amount of
interest to be transferred shall be calculated at the Net Loan Rate.
Notwithstanding the foregoing, if on the first Business Day of
any calendar month after giving effect to all distributions to be made during
such calendar month, either:
(a) the Outstanding principal amount of the Series 1999A Notes would
exceed the sum of the (i) the Pool Balance plus (ii) accruals of
Special Allowance Payments and Interest Subsidy Payments payable
with respect to the Financed Student Loans as of the end of the
preceding Collection Period, plus the balance of the Reserve Fund
as of the computation date, or
(b) an Event of Default described in item 1 of the first paragraph of
Section 8.1 of the Base Indenture has occurred (but prior to the
acceleration of the Legal Final Maturity of the Notes),
then, until the applicable conditions described in clauses (a) and (b) no longer
exist, the Series 1999B-1 Noteholders' Interest Distribution Amount and the
Series 1999B-1 Noteholders' Principal Distribution Amount will not be paid to
the Series 1999B-1 Noteholders pursuant to clauses (iii) and (iv) above and no
Subordinate Issuer Exchange Payment shall be made. For so long as any Series
1999A Notes remain Outstanding, such deferral in the payment of the Series
1999B-1 Noteholders' Interest Distribution Amount, the Series 1999B-1
Noteholders' Principal Distribution Amount or Subordinate Issuer Exchange
Payments (except with respect to the Legal Final Maturity of the Series 1999B-1
Notes) shall not constitute an Event of Default. In addition, as long as the
applicable conditions described in clause (b) continue to exist, the Series
1999A Noteholders' Principal Distribution Amount shall be allocated and paid pro
rata among each Series of Series 1999A Notes, without preference or priority of
any kind.
Notwithstanding the foregoing, principal payments will be made to
the Noteholders only in amounts equal to $50,000 and integral multiples in
excess thereof. If the amount in the Note Payment Account otherwise required to
be applied as a payment of principal either (i) is less than $50,000 or (ii)
exceeds an even multiple of $50,000, then, in the case of (i), such entire
amount or, in the case of (ii), such excess amount, will not be paid as
principal on the upcoming Auction Period Distribution Date, but will be retained
in the Note Payment Account until the amount therein available for payment of
principal equals $50,000.
With respect to the Series of Notes entitled to receive payments
of principal, the actual Notes of such Series that will receive payments of
principal on each applicable Auction Period Distribution Date will be selected
no later than fifteen (15) Business Days prior to the such Auction Period
Distribution Date by the Indenture Trustee by lot in such manner as the
52
<PAGE> 56
Indenture Trustee in its discretion may determine and which will provide for the
selection for payment of principal in the minimum denominations of $50,000, and
integral multiples in excess thereof.
Notice of the specific Notes to receive payments of principal is
to be given by the Indenture Trustee by first-class, postage prepaid, mailed not
less than fifteen (15) days before the applicable Auction Period Distribution
Date at the address of the applicable Noteholder appearing on the registration
books. Any defect in or failure to give such mailed notice shall not affect the
validity of proceedings for the payment of any other Notes not affected by such
failure or defect. All notices of payment are to state: (i) the applicable
Auction Period Distribution Date, (ii) the amount of principal to be paid, and
(iii) the Series of Notes to be paid.
SECTION 4.03 DISPOSITION OF ACQUISITION FUND Any portion of the
moneys in the Acquisition Fund which is not, or which the Issuer at any time
determines cannot for any reason be, used to Finance Student Loans prior to
January 25, 2000 shall, at the written direction of the Issuer shall be
transferred by the Indenture Trustee to the Collection Account.
53
<PAGE> 57
ARTICLE V
MISCELLANEOUS
SECTION 5.01 EXECUTION AND DELIVERY OF THIS TERMS SUPPLEMENT.
This Terms Supplement is executed and delivered pursuant to Section 2.1 of the
Base Indenture.
SECTION 5.02. EFFECT OF TERMS SUPPLEMENT ON INDENTURE. This
Terms Supplement shall supplement the Base Indenture, which is in all respects
ratified and confirmed, and the Base Indenture so supplemented by this Terms
Supplement shall be read, taken and construed as one and the same instrument.
Each addition to and amendment of the Base Indenture herein is solely for the
purposes of the Notes. If any term of this Terms Supplement conflicts with any
terms of the Base Indenture, this Terms Supplement shall control for purposes of
the Notes.
SECTION 5.03 EXECUTION OF COUNTERPARTS. This Terms Supplement
may be executed in several counterparts, each of which shall be regarded as an
original and all of which shall constitute but one and the same document. It
shall not be necessary in proving this Terms Supplement to produce or account
for more than one of those counterparts.
SECTION 5.04. GOVERNING LAW. This Terms Supplement is entered
into with the intent that the laws of the State of Ohio shall govern its
construction, without giving effect to the conflict of law principles thereof.
[balance of page left blank intentionally]
54
<PAGE> 58
IN WITNESS WHEREOF, STUDENT LOAN FUNDING 1999-A/B TRUST, by
Firstar Bank, National Association, not in its individual capacity, but solely
as co-owner trustee of the Issuer, has caused this Terms Supplement to be signed
in its name and on its behalf by one of its officers thereunto duly authorized;
and FIRSTAR BANK, NATIONAL ASSOCIATION, as Initial Co-Owner Eligible Lender
Trustee, has caused this Terms Supplement to be signed in its name and on its
behalf by one of its officers thereunto duly authorized; and FIRSTAR BANK,
NATIONAL ASSOCIATION, to evidence its acceptance of the trusts hereby created,
has caused this Terms Supplement to be signed in its name and on its behalf by
one of its officers thereunto duly authorized, all as of the date first above
written.
STUDENT LOAN FUNDING 1999-A/B TRUST
By Firstar Bank, National Association,
not in its individual capacity,
but solely as co-owner trustee of the
Issuer on behalf of the Issuer
By: /s/ Brian J. Gardner
Title: Vice President and Trust Officer
FIRSTAR BANK, NATIONAL ASSOCIATION,
as Initial Co-Owner Eligible Lender Trustee
By: /s/ Brian J. Gardner
Title: Vice President and Trust Officer
FIRSTAR BANK, NATIONAL ASSOCIATION,
as Indenture Trustee
By: /s/ Brian J. Gardner
Title: Vice President and Trust Officer
55
<PAGE> 59
SCHEDULE I
TERMS OF SENIOR NOTES
---------------------
INITIAL INTEREST RATE (SERIES 1999A-1) 5.40%
INITIAL INTEREST RATE (SERIES 1999A-2): 5.40%
INITIAL INTEREST RATE (SERIES 1999A-3): 5.50%
INITIAL INTEREST RATE (SERIES 1999A-4): 5.57%
INITIAL INTEREST RATE (SERIES 1999A-5): 6.225%
INITIAL INTEREST RATE (SERIES 1999A-6): 6.225%
DATED DATE: October 28, 1999.
INITIAL INTEREST DETERMINATION DATE FOR SERIES 1999A-1
NOTES: November 9, 1999
INITIAL INTEREST DETERMINATION DATE FOR SERIES 1999A-2
NOTES: November 10, 1999
INITIAL INTEREST DETERMINATION DATE FOR SERIES 1999A-3
NOTES: November 22, 1999
INITIAL INTEREST DETERMINATION DATE FOR SERIES 1999A-4
NOTES: December 13, 1999
INITIAL INTEREST DETERMINATION DATE FOR SERIES 1999A-5
NOTES: January 18, 2000
INITIAL INTEREST DETERMINATION DATE FOR SERIES 1999A-6
NOTES: January 20, 2000
SERIES 1999A-1 - NUMBERED FROM: A-1
SERIES 1999A-2 - NUMBERED FROM: B-1
SERIES 1999A-3 - NUMBERED FROM: C-1
SERIES 1999A-4 - NUMBERED FROM: D-1
I-1
<PAGE> 60
SERIES 1999A-5 - NUMBERED FROM: E-1
SERIES 1999A-6 - NUMBERED FROM: F-1
TERMS OF SUBORDINATE NOTES
--------------------------
INITIAL INTEREST RATE: 5.60%
DATED DATE: October 28, 1999
INITIAL INTEREST DETERMINATION DATE FOR THE SERIES 1999B-1
NOTES: November 22, 1999
SERIES 1999B-1 - NUMBERED FROM: G-1
I-2
<PAGE> 61
EXHIBIT A
---------
DISTRIBUTION STATEMENT
NOTEHOLDERS' STATEMENT FOR STUDENT LOAN FUNDING 1999-A/B TRUST
STUDENT LOAN AUCTION RATE CALLABLE ASSET-BACKED NOTES,
SERIES 1999A-1, A-2, A-3, A-4, A-5, A-6 AND B-1
FOR COLLECTION PERIOD ENDING
Auction Period Distribution Date:______________________
(A) Amount of principal being paid or distributed:
(i) Series A-1 Notes:$___________
(ii) Series A-2 Notes:$___________
(iii) Series A-3 Notes:$___________
(iv) Series A-4 Notes:$___________
(v) Series A-5 Notes:$___________
(vi) Series A-6 Notes:$___________
(vii) Series B-1 Notes:$___________
(B) (i) Amount of Interest being paid or distributed:
(a) Series A-1 Notes:$____________
(b) Series A-2 Notes:$____________
(c) Series A-3 Notes:$____________
(d) Series A-4 Notes:$____________
(e) Series A-5 Notes:$____________
(f) Series A-6 Notes:$____________
(g) Series B-1 Notes:$____________
(ii) Applicable Interest Rates (based on the
[Formula Rate/Net Loan Rate]):
(a) Series A-1 Notes:____________%
(b) Series A-2 Notes:____________%
(c) Series A-3 Notes:____________%
(d) Series A-4 Notes:____________%
(e) Series A-5 Notes:____________%
(f) Series A-6 Notes:____________%
(g) Series B-1 Notes:____________%
A-1
<PAGE> 62
(C) Amount of Distribution allocable to any Carryover Interest:
(i) Series A-1 Notes:$____________
(ii) Series A-2 Notes:$____________
(iii) Series A-3 Notes:$____________
(iv) Series A-4 Notes:$____________
(v) Series A-5 Notes:$____________
(vi) Series A-6 Notes:$____________
(vii) Series B-1 Notes:$____________
(D) Pool Balance at end of preceding Collection Period:$___________
(E) After giving effect to distributions on this Distribution Date:
(i) outstanding principal amount of Series A-1 Notes:$____________
(ii) outstanding principal amount of Series A-2 Notes:$____________
(iii) outstanding principal amount of Series A-3 Notes:$____________
(iv) outstanding principal amount of Series A-4 Notes:$____________
(v) outstanding principal amount of Series A-5 Notes:$____________
(vi) outstanding principal amount of Series A-6 Notes:$____________
(vii) outstanding principal amount of Series B-1 Notes:$____________
(F) Amount of Program Operating Expenses to be allocated for the upcoming
Distribution Date:$______________
(G) (i) Aggregate amount of Realized Losses (if any) for the
Collection Period immediately preceding the Distribution
Date:$_____________
(ii) Amount received for recoveries of Realized Losses from a
previous Collection Period$____________
(a) interest:$_____________
(b) principal:$____________
(H) (i) Amount of distribution attributable to amounts in the
following Funds:
(a) Reserve Fund:$_________
(b) Expense Account:$____________
(c) Acquisition Fund:$____________
(d) Collection Account:$__________
(e) Note Payment Account:$________
(ii) Balance of Funds and Accounts on Distribution Date
(a) Reserve Fund:$_________
(b) Expense Account:$___________
(c) Acquisition Fund:$___________
(d) Collection Account:$__________
(e) Note Payment Account:$___________
(iii) Parity Percentage:__________%
(iv) Senior Parity Percentage:___________%
(v) Amount of Parity Percentage Payments:$__________
A-2
<PAGE> 63
(I) The aggregate amount paid for Financed Student Loans purchased from the
Student Loan Portfolio Fund during the immediately preceding Collection
Period:$____________
(J) Amount of Financed Student Loans:
(i) that are 31 through 60 days delinquent:$_________
(ii) that are 61 through 90 days delinquent:$__________
(iii) that are 91 through 120 days delinquent:$___________
(iv) that are more than 120 days delinquent:$____________
(v) for which claims have been filed with the appropriate guarantor
or the Secretary and which are awaiting payment:$___________
By: Firstar Bank as Indenture Trustee for Student Loan Funding 1999-A/B Trust,
Student Loan Auction Rate Callable Asset-Backed Notes, Series 1999A and Series
1999B-1.
A-3
<PAGE> 64
EXHIBIT B
---------
FORM OF SENIOR NOTES
--------------------
THE INTEREST ON THIS SERIES 1999A-_ NOTE IS NOT EXCLUDABLE FROM GROSS INCOME FOR
FEDERAL INCOME TAX PURPOSES.
Registered Registered
No. _-__ $__,000,000
STUDENT LOAN FUNDING 1999-A/B TRUST
STUDENT LOAN SENIOR AUCTION RATE CALLABLE ASSET-BACKED NOTE
SERIES 1999A-_
Dated: October 28, 1999 CUSIP: ______________
Interest Rate: As Herein Provided Legal Final Maturity: December 1, 2020
Student Loan Funding 1999-A/B Trust, a common law (as opposed to
statutory) trust created under the laws of the State of Delaware (herein called
the "Issuer"), by Firstar Bank, National Association, a national banking
association duly organized and existing under the laws of the United States, not
in its individual capacity, but solely as co-owner trustee of the Issuer (the
"Co-Owner Trustee"), hereby acknowledges itself indebted and, for value
received, hereby promises to pay (but only out of the Trust Estate) to
CEDE & CO.
or registered assigns, on the Legal Final Maturity stated above (subject to
prior redemption referred to herein), the principal sum of
________________________________ DOLLARS
in lawful money of the United States of America; and to pay interest thereon at
the Series Interest Rate applicable for each Interest Accrual Period on the
dates as provided herein (but only out of said Trust Estate) in like lawful
money.
This Series 1999A-_ Note is one of a duly authorized issue of notes of
the Issuer designated as "Student Loan Funding 1999-A/B Trust Student Loan
Senior Auction Rate Callable Asset-Backed Notes, Series 1999A-_" in the
aggregate principal amount of $___________ (this series herein referred to as
the "Series 1999A-_ Notes"), issued (a) pursuant to a resolution duly adopted by
the board of directors of the Issuer authorizing the issuance of the Series
1999A-_ Notes and (b) under an Indenture of Trust, dated as of October 1, 1999
(the "Base Indenture"), and a Terms Supplement, dated as of even date with the
Base Indenture (the "Terms Supplement"), as such Base Indenture and Terms
Supplement is supplemented or amended from time to time (the "Indenture"), each
by and among the Issuer, Firstar Bank, National Association, as initial eligible
lender trustee on behalf of the Issuer (the "Initial Co-Owner Eligible Lender
Trustee" and together with any other eligible lender trustee, each an "Eligible
Lender Trustee"), and Firstar Bank, National Association, as indenture trustee
(the "Indenture Trustee"). The Series 1999A-_ Notes are issued simultaneously
and on a parity with the Issuer's (i) $__________ Student Loan Senior Auction
Rate Callable Asset-Backed Notes, Series 1999A-_ (the "Series 1999A-_ Notes"),
(ii) $__________ Student Loan Senior Auction Rate Callable Asset-Backed Notes,
Series 1999A-_ (the "Series 1999A-_ Notes"), (iii) $__________ Student Loan
Senior Auction Rate Callable Asset-Backed Notes, Series 1999A-_ (the "Series
1999A-_ Notes"), (iv) $__________ Student Loan Senior Auction Rate Callable
Asset-Backed Notes, Series 1999A-_ (the "Series 1999A-_ Notes"), (v) $__________
Student Loan Senior Auction Rate Callable Asset-Backed Notes, Series 1999A-_
(the "Series 1999A-_ Notes" and, together with the Series 1999A-_ Notes, the
Series 1999A-_ Notes, the
B-1
<PAGE> 65
Series 1999A-_ Notes, the Series 1999A-_ Notes and the Series 1999A-_ Notes, the
"Series 1999A Notes"), and simultaneously with and on a basis senior to (but
solely to the extent provided in the Indenture) the Issuer's $___________
Student Loan Subordinate Auction Rate Callable Asset-Backed Notes, Series
1999B-1 (the "Series 1999B-1 Notes" and collectively with the Series 1999A
Notes, the "Notes").
Reference is hereby made to the Indenture, a copy of which is on file
with the Indenture Trustee, and to all of the provisions thereof, to all of
which provisions the Holder of this Series 1999A-_ Note, by acceptance hereof,
hereby assents and agrees, for definitions of terms; the descriptions of and the
nature and extent of the security for the Series 1999A-_ Notes; the student loan
purchase program being financed by the issuance of the Series 1999A-_ Notes; the
revenues and other assets pledged (the "Trust Estate") to the payment of the
principal of and interest and any Carryover Interest on the Series 1999A-_ Notes
(subject to the prior rights of the Indenture Trustee to any realization from
the Indenture Trustee's lien on and security interest in the Trust Estate for
payment of its fees and expenses and the fees and expenses of each Eligible
Lender Trustee); the nature and extent and manner of enforcement of the pledge;
the conditions upon which the Indenture may be amended or supplemented with or
without the consent of the Holders of the Directing Notes; the rights and
remedies of the Holders of the Series 1999A-_ Notes, including the limitations
therein contained upon the right of a Holder to institute any suit, action or
proceeding in equity or at law with respect hereto and thereto; the rights,
duties and obligations of the Issuer, each Eligible Lender Trustee and the
Indenture Trustee thereunder; the terms and provisions upon which the liens,
pledges, charges, trusts, security interests, assignments and covenants made
therein may be discharged at or prior to the maturity of this Series 1999A-_
Note, this Series 1999A-_ Note thereafter no longer being secured by the
Indenture or being deemed to be outstanding thereunder; and for the other terms
and provisions thereof. References in this Series 1999A-_ Note to the name
"Student Loan Funding 1999-A/B Trust" or to the term "Issuer" shall mean the
Co-Owner Trustee, not in its individual capacity, but solely as Co-Owner Trustee
of the Issuer.
Words and terms used as defined words and terms in this Series 1999A-_
Note and not otherwise defined herein shall have the meanings given them in the
Indenture.
The principal of and interest and Carryover Interest, if any, on the
Series 1999A-_ Notes are limited obligations of the Issuer payable only out of
the Trust Estate, as and to the extent set forth in the Indenture, and are
secured by a pledge of, lien on, security interest in and assignment of the
Trust Estate, subject to the provisions of the Indenture permitting the
application thereof for the purposes and on the terms and conditions set forth
in the Indenture.
THE INTEREST ACCRUAL PERIOD, THE APPLICABLE SERIES INTEREST RATE, THE
METHOD OF DETERMINING THE SERIES INTEREST RATE ON EACH OF THE SERIES 1999A-_
NOTES, THE DISTRIBUTION OF PRINCIPAL OF AND INTEREST AND CARRYOVER INTEREST, IF
ANY, ON THIS SERIES 1999A-_ NOTE AND REDEMPTION OF THIS SERIES 1999A-_ NOTE WILL
BE DETERMINED IN ACCORDANCE WITH THE TERMS, CONDITIONS AND PROVISIONS OF THE
INDENTURE AND THE AUCTION AGENT AGREEMENT, TO WHICH TERMS, CONDITIONS AND
PROVISIONS SPECIFIC REFERENCE IS HEREBY MADE, AND ALL OF WHICH TERMS, CONDITIONS
AND PROVISIONS ARE HEREBY SPECIFICALLY INCORPORATED HEREIN BY REFERENCE.
No covenant or agreement contained in this Series 1999A-_ Note or in
the Indenture shall be deemed to be a covenant or agreement of any director,
officer, agent or employee of the Issuer in his or her individual capacity, and
none of such directors, officers, agents or employees nor any person executing
this Series 1999A-_ Note on behalf of the Issuer shall be liable personally on
this Series 1999A-_ Note or be subject to any personal liability or
accountability by reason of the issuance of this Series 1999A-_ Note.
If an Event of Default occurs, the principal of and interest on all
Notes issued under the Indenture may be declared due and payable upon the
conditions and in the manner and with the effect provided in the Indenture. The
Indenture and the rights and obligations of the Issuer, each Eligible Lender
Trustee, the Indenture Trustee and the registered owner hereof may be modified
or amended in the manner and subject to the conditions set forth in the
Indenture.
Except when this Series 1999A-_ Note is held in a Book-Entry System,
this Series 1999A-_ Note is transferable by the registered owner hereof or its
attorney duly authorized in writing at the principal corporate trust office of
the Indenture Trustee, upon surrender of this Series 1999A-_ Note, accompanied
by a duly executed instrument of transfer in the form set forth herein, with
signature guaranteed in a manner satisfactory to the
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<PAGE> 66
Indenture Trustee, subject to such reasonable regulations as the Issuer or the
Indenture Trustee may prescribe, and upon payment of any tax, fee or other
governmental charge incident to such transfer. Upon any such transfer there
shall be issued in the name of the transferee a new fully registered Series
1999A-_ Note or Series 1999A-_ Notes of Authorized Denominations of the same
aggregate principal amount and date as this Series 1999A-_ Note. The person in
whose name this Series 1999A-_ Note is registered shall be deemed the owner
hereof for all purposes, and the Issuer, the Indenture Trustee and any other
designated Authenticating Agent shall not be affected by any notice to the
contrary.
The Series 1999A-_ Notes are issuable only as fully registered notes in
Authorized Denominations. Except when this Series 1999A-_ Note is held in a
Book-Entry System and subject to the limitations and upon payment of the
charges, if any, provided in the Indenture, Series 1999A-_ Notes may be
exchanged at said office of the Indenture Trustee for a like aggregate principal
amount of Series 1999A-_ Notes of the same date and series of other Authorized
Denominations.
In any case where the date fixed for the payment of principal of or
interest or Carryover Interest on this Series 1999A-_ Note shall not be a
Business Day, then payment of such principal or interest or Carryover Interest
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 on the date fixed for the payment
thereof.
It is hereby certified, recited and declared that all acts, conditions
and things required to have happened, to exist and to have been performed
precedent to and in the issuance of this Series 1999A-_ Note and the issue of
which it is one, have happened, exist and have been performed in regular and due
time, form and manner as required by law; and that this Series 1999A-_ Note and
the issue of which it is one do not exceed any limitations of indebtedness
prescribed by law or otherwise applicable to the Issuer.
This Series 1999A-_ Note shall not be entitled to any benefit under the
Indenture, or become valid or obligatory for any purpose, until the certificate
of authentication and registration hereon endorsed shall have been signed by the
Indenture Trustee or the Authenticating Agent.
This Series 1999A-_ Note shall be governed by, and construed and
interpreted in accordance with, the laws of the State of Ohio.
IN WITNESS WHEREOF, the Issuer has caused this Series 1999A-_
Note to be executed in its name and on its behalf by the facsimile signatures of
two Authorized Officers of the Issuer.
STUDENT LOAN FUNDING 1999-A/B TRUST
By Firstar Bank, National Association,
not in its individual capacity, but solely as co-owner trustee of the Issuer
BY: [FACSIMILE/MANUAL SIGNATURE] BY: [FACSIMILE/MANUAL SIGNATURE]
---------------------------- ---------------------------
B-3
<PAGE> 67
[FORM OF CERTIFICATE OF AUTHENTICATION AND REGISTRATION]
This is one of the Series 1999A-_ Notes described in the
within mentioned Indenture, and has been registered this date:
Date of Registration and Authentication: _______________________
FIRSTAR BANK, NATIONAL ASSOCIATION,
as Indenture Trustee
By ____________________________________
Authorized Signatory
[Form of Assignment for Transfer]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto _______________ (Tax Identification or Social Security Number:
_______________) the within Student Loan Senior Auction Rate Callable
Asset-Backed Note, Series 1999A-_, of Student Loan Funding 1999-A/B Trust, and
hereby irrevocably constitutes and appoints _______________ attorney to transfer
said Note on the registry books kept by the Indenture Trustee for that purpose
with full power of substitution in the premises.
Dated_______________ ______________________________
Signature
NOTE: The signature to the assignment must correspond to the
name as written on the face of this Note in every particular, without any
alteration or change whatsoever.
Signature Guarantee:______________________________
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<PAGE> 68
EXHIBIT C
---------
FORM OF SUBORDINATE NOTE
------------------------
THE INTEREST ON THIS SERIES 1999B-1 NOTE IS NOT EXCLUDABLE FROM GROSS INCOME FOR
FEDERAL INCOME TAX PURPOSES.
Registered Registered
No. G-__ $30,000,000
STUDENT LOAN FUNDING 1999-A/B TRUST
STUDENT LOAN SUBORDINATE AUCTION RATE CALLABLE ASSET-BACKED NOTE
SERIES 1999B-1
Dated: October 28, 1999 CUSIP: ______________
Interest Rate: As Herein Provided Legal Final Maturity: December 1, 2027
Student Loan Funding 1999-A/B Trust, a common law (as opposed to
statutory) trust created under the laws of the State of Delaware (herein called
the "Issuer"), by Firstar Bank, National Association, a national banking
association duly organized and existing under the laws of the United States, not
in its individual capacity, but solely as co-owner trustee of the Issuer on
behalf of the Issuer (the "Co-Owner Trustee"), hereby acknowledges itself
indebted and, for value received, hereby promises to pay (but only out of the
Trust Estate) to
CEDE & CO.
or registered assigns, on the Legal Final Maturity stated above (subject to
prior redemption referred to herein), the principal sum of
THIRTY MILLION DOLLARS
in lawful money of the United States of America; and to pay interest thereon at
the Series Interest Rate applicable for each Interest Accrual Period on the
dates as provided herein (but only out of said Trust Estate) in like lawful
money.
This Series 1999B-1 Note is one of a duly authorized issue of
notes of the Issuer designated as "Student Loan Funding 1999-A/B Trust Student
Loan Subordinate Auction Rate Callable Asset-Backed Notes, Series 1999B-1" in
the aggregate principal amount of $30,000,000 (this series herein referred to as
the "Series 1999B-1 Notes"), issued (a) pursuant to a resolution duly adopted by
the board of directors of the Issuer authorizing the issuance of the Series
1999B-1 Notes and (b) under an Indenture of Trust, dated as of October 1, 1999
(the "Base Indenture"), and a Terms Supplement, dated as of even date with the
Base Indenture (the "Terms Supplement"), as such Base Indenture and Terms
Supplement is supplemented or amended from time to time (the "Indenture"), each
by and among the Issuer, Firstar Bank, National Association, as initial eligible
lender trustee on behalf of the Issuer (the "Initial Co-Owner Eligible Lender
Trustee" and together with any other eligible lender trustee, each an "Eligible
Lender Trustee"), and Firstar Bank, National Association, as indenture trustee
(the "Indenture Trustee"). The Series 1999B-1 Notes are issued simultaneously
with and on a basis subordinate to (but solely to the extent provided in the
Indenture) the Issuer's (i) $75,000,000 Student Loan Senior Auction Rate
Callable Asset-Backed Notes, Series 1999A-1 (the "Series 1999A-1 Notes"), (ii)
the Issuer's $75,000,000 Student Loan Senior Auction Rate Callable Asset-Backed
Notes, Series 1999A-2 (the "Series 1999A-2 Notes"), (iii) the Issuer's
$75,000,000 Student Loan Senior Auction Rate Callable Asset-Backed Notes, Series
1999A-3 (the "Series 1999A-3 Notes"), (iv) the Issuer's $100,000,000 Student
Loan Senior Auction Rate Callable Asset-Backed Notes, Series 1999A-4 (the
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<PAGE> 69
"Series 1999A-4 Notes"), (v) the Issuer's $75,000,000 Student Loan Senior
Auction Rate Callable Asset-Backed Notes, Series 1999A-5 (the "Series 1999A-5
Notes") and (vi) the Issuer's $95,000,000 Student Loan Senior Auction Rate
Callable Asset-Backed Notes, Series 1999A-6 (the "Series 1999A-6 Notes" and
together with the Series 1999A-1 Notes, the Series 1999A-2 Notes, the Series
1999A-3 Notes, the Series 1999A-4 Notes and the Series 1999A-5 Notes, the
"Series 1999A Notes", and collectively with the Series 1999B-1 Notes, the
"Notes").
Reference is hereby made to the Indenture, a copy of which is on file
with the Indenture Trustee, and to all of the provisions thereof, to all of
which provisions the Holder of this Series 1999B-1 Note, by acceptance hereof,
hereby assents and agrees, for definitions of terms; the descriptions of and the
nature and extent of the security for the Series 1999B-1 Notes; the student loan
purchase program being financed by the issuance of the Series 1999B-1 Notes; the
revenues and other assets pledged (the "Trust Estate") to the payment of the
principal of and interest on the Series 1999B-1 Notes (subject to the prior
rights of the Indenture Trustee to any realization from the Indenture Trustee's
lien on and security interest in the Trust Estate for payment of its fees and
expenses, the fees and expenses of each Eligible Lender Trustee and for payment
of the principal of and interest on the Series 1999A Notes); the nature and
extent and manner of enforcement of the pledge; the conditions upon which the
Indenture may be amended or supplemented with or without the consent of the
Holders of the Series 1999B-1 Notes; the rights and remedies of the Holders of
the Directing Notes, including the limitations therein contained upon the right
of a Holder to institute any suit, action or proceeding in equity or at law with
respect hereto and thereto; the rights, duties and obligations of the Issuer,
each Eligible Lender Trustee and the Indenture Trustee thereunder; the terms and
provisions upon which the liens, pledges, charges, trusts, security interests,
assignments and covenants made therein may be discharged at or prior to the
maturity of this Series 1999B-1 Note, this Series 1999B-1 Note thereafter no
longer being secured by the Indenture or being deemed to be outstanding
thereunder; and for the other terms and provisions thereof. References in this
Series 1999B-1 Note to the name "Student Loan Funding 1999-A/B Trust" or to the
term "Issuer" shall mean the Co-Owner Trustee, not in its individual capacity,
but solely as Co-Owner Trustee of the Issuer.
Words and terms used as defined words and terms in this Series 1999B-1
Note and not otherwise defined herein shall have the meanings given them in the
Indenture.
The principal of and interest and Carryover Interest, if any, on the
Series 1999B-1 Notes are limited obligations of the Issuer payable only out of
the Trust Estate, as and to the extent set forth in the Indenture, and are
secured by a pledge of, lien on, security interest in and assignment of the
Trust Estate, subject to the provisions of the Indenture permitting the
application thereof for the purposes and on the terms and conditions set forth
in the Indenture.
THE INTEREST ACCRUAL PERIOD, THE APPLICABLE SERIES INTEREST RATE, THE
NET LOAN RATE, THE METHOD OF DETERMINING THE SERIES INTEREST RATE ON EACH OF THE
SERIES 1999B-1 NOTES, THE DISTRIBUTION OF PRINCIPAL OF AND INTEREST AND
CARRYOVER INTEREST, IF ANY, ON THIS SERIES 1999B-1 NOTE AND THE REDEMPTION OF
THIS SERIES 1999B-1 NOTE WILL BE DETERMINED IN ACCORDANCE WITH THE TERMS,
CONDITIONS AND PROVISIONS OF THE INDENTURE AND THE AUCTION AGENT AGREEMENT, TO
WHICH TERMS, CONDITIONS AND PROVISIONS SPECIFIC REFERENCE IS HEREBY MADE, AND
ALL OF WHICH TERMS, CONDITIONS AND PROVISIONS ARE HEREBY SPECIFICALLY
INCORPORATED HEREIN BY REFERENCE.
No covenant or agreement contained in this Series 1999B-1 Note or in
the Indenture shall be deemed to be a covenant or agreement of any director,
officer, member, agent or employee of the Issuer in his or her individual
capacity, and none of such directors, officers, agents or employees nor any
person executing this Series 1999B-1 Note on behalf of the Issuer shall be
liable personally on this Series 1999B-1 Note or be subject to any personal
liability or accountability by reason of the issuance of this Series 1999B-1
Note.
If an Event of Default occurs, the principal of and interest on all
Notes issued under the Indenture may be declared due and payable upon the
conditions and in the manner and with the effect provided in the Indenture. The
Indenture and the rights and obligations of the Issuer, each Eligible Lender
Trustee, the Indenture Trustee and the registered owner hereof may be modified
or amended in the manner and subject to the conditions set forth in the
Indenture.
Except when this Series 1999B-1 Note is held in a Book-Entry System,
this Series 1999B-1 Note is transferable by the registered owner hereof or its
attorney duly authorized in writing at the principal corporate trust
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<PAGE> 70
office of the Indenture Trustee, upon surrender of this Series 1999B-1 Note,
accompanied by a duly executed instrument of transfer in the form set forth
herein, with signature guaranteed in a manner satisfactory to the Indenture
Trustee subject to such reasonable regulations as the Issuer or the Indenture
Trustee may prescribe, and upon payment of any tax, fee or other governmental
charge incident to such transfer. Upon any such transfer there shall be issued
in the name of the transferee a new fully registered Series 1999B-1 Note or
Series 1999B-1 Notes of Authorized Denominations of the same aggregate principal
amount and date as this Series 1999B-1 Note. The person in whose name this
Series 1999B-1 Note is registered shall be deemed the owner hereof for all
purposes, and the Issuer, the Indenture Trustee and any other designated
Authenticating Agent shall not be affected by any notice to the contrary.
The Series 1999B-1 Notes are issuable only as fully registered notes in
Authorized Denominations. Except when this Series 1999B-1 Note is held in a
Book-Entry System and subject to the limitations and upon payment of the
charges, if any, provided in the Indenture, Series 1999B-1 Notes may be
exchanged at said office of the Indenture Trustee for a like aggregate principal
amount of Series 1999B-1 Notes of the same date and series of other Authorized
Denominations.
In any case where the date fixed for the payment of principal of or
interest or Carryover Interest on this Series 1999B-1 Note shall not be a
Business Day, then payment of such principal or interest or Carryover Interest
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 on the date fixed for the payment
thereof.
It is hereby certified, recited and declared that all acts, conditions
and things required to have happened, to exist and to have been performed
precedent to and in the issuance of this Series 1999B-1 Note and the issue of
which it is one, have happened, exist and have been performed in regular and due
time, form and manner as required by law; and that this Series 1999B-1 Note and
the issue of which it is one do not exceed any limitations of indebtedness
prescribed by law or otherwise applicable to the Issuer.
This Series 1999B-1 Note shall not be entitled to any benefit under the
Indenture, or become valid or obligatory for any purpose, until the certificate
of authentication and registration hereon endorsed shall have been signed by the
Indenture Trustee or the Authenticating Agent.
This Series 1999B-1 Note shall be governed by, and construed and
interpreted in accordance with, the laws of the State of Ohio.
IN WITNESS WHEREOF, the Issuer has caused this Series 1999B-1 Note to
be executed in its name and on its behalf by the facsimile signatures of two
Authorized Officers of the Issuer.
STUDENT LOAN FUNDING 1999-A/B Trust
By Firstar Bank, National Association,
not in its individual capacity, but solely as co-owner trustee
of the Issuer on behalf of the Issuer
BY: [facsimile/manual signature] BY: [facsimile/manual signature]
---------------------------- ----------------------------
C-3
<PAGE> 71
[FORM OF CERTIFICATE OF AUTHENTICATION AND REGISTRATION]
This is one of the Series 1999B-1 Notes described in the
within mentioned Indenture, and has been registered this date:
Date of Registration and Authentication: _______________________
FIRSTAR BANK, NATIONAL ASSOCIATION,
as Indenture Trustee
By ____________________________________
Authorized Signatory
[Form of Assignment for Transfer]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto _______________ (Tax Identification or Social Security Number:
_______________) the within Student Loan Subordinate Auction Rate Callable
Asset-Backed Note, Series 1999B-1, of Student Loan Funding 1999-A/B Trust, and
hereby irrevocably constitutes and appoints _______________ attorney to transfer
said Note on the registry books kept by the Indenture Trustee for that purpose
with full power of substitution in the premises.
Dated_______________ ______________________________
Signature
NOTE: The signature to the assignment must correspond to the
name as written on the face of this Note in every particular, without any
alteration or change whatsoever.
Signature Guarantee:______________________________
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<PAGE> 72
EXHIBIT D
---------
[FORM OF]
INSTRUCTIONS FOR
PAYMENT OF INTEREST
Firstar Bank, National Association
425 Walnut Street
Cincinnati, Ohio 45202
Attention: Corporate Trust Services
The undersigned is the registered owner of Student Loan
[Senior/Subordinate] Auction Rate Callable Asset-Backed Note(s), Series
1999[A/B-_], of Student Loan Funding 1999-A/B Trust, No(s). _____________ (the
"Note(s)"), in an aggregate principal amount of $1,000,000 or more. Until
further notice or until the undersigned ceases to be the registered owner of the
Note(s), you are instructed to make payment of all interest due on the Note(s)
on any date due by depositing or wiring immediately available funds on such date
to the credit of the undersigned's Account No. ___________ with
__________________.
Name ______________________________
Date:____________________ ___________________________________
Authorized Signature
Signature Guaranteed:
___________________________________
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<PAGE> 73
EXHIBIT E
---------
STUDENT LOAN FUNDING 1999-A/B TRUST
STUDENT LOAN [SENIOR/SUBORDINATE]
AUCTION RATE CALLABLE ASSET-BACKED NOTES,
SERIES 1999[A/B]-_
NOTICE OF PAYMENT DEFAULT
-------------------------
NOTICE IS HEREBY GIVEN that a Payment Default has occurred and
is continuing with respect to the Notes identified above. The next Auction for
the Series 1999[A/B]-_ Notes will not be held. The Auction Rate for the Series
1999[A/B]-_ Notes for the next succeeding Interest Accrual Period shall be the
Non-Payment Rate.
FIRSTAR BANK, NATIONAL ASSOCIATION,
as Indenture Trustee
Dated: ____________________ By: ____________________________
E-1
<PAGE> 74
EXHIBIT F
---------
STUDENT LOAN FUNDING 1999-A/B TRUST
STUDENT LOAN [SENIOR/SUBORDINATE]
AUCTION RATE CALLABLE ASSET-BACKED NOTES,
SERIES 1999[A/B]-_
NOTICE OF CURE OF PAYMENT DEFAULT
---------------------------------
NOTICE IS HEREBY GIVEN that a Payment Default with respect to
the Notes identified above has been waived or cured. The next Auction Period
Distribution Date for the Series 1999[A/B]-_ Notes is _____________________ and
the next Interest Determination Date is ___________________.
FIRSTAR BANK, NATIONAL ASSOCIATION,
as Indenture Trustee
Dated:_____________________ By: ___________________________
F-1
<PAGE> 75
EXHIBIT G
---------
STUDENT LOAN FUNDING 1999-A/B TRUST
STUDENT LOAN [SENIOR/SUBORDINATE]
AUCTION RATE CALLABLE ASSET-BACKED NOTES,
SERIES 1999[A/B]-_
NOTICE OF PROPOSED AUCTION PERIOD ADJUSTMENT
--------------------------------------------
Notice is hereby given that Student Loan Funding 1999-A/B
Trust, by Firstar Bank, National Association, not in its individual capacity,
but solely as the co-owner of the Student Loan Funding 1999-A/B Trust, proposes
to change with respect to the captioned Notes the length of the Auction Period
pursuant to the Indenture as follows:
1. The change shall take effect on __________________, the
Auction Period Distribution Date for the current Auction Period and the date of
commencement of the next Auction Period (the "Effective Date").
2. The Auction Period Adjustment in Paragraph 1 shall take
place only if (A) the Indenture Trustee and the Auction Agent receive, by 11:00
A.M., eastern time, on the Business Day before the Auction Date for the Auction
Period commencing on the Effective Date, a certificate from the Calculation
Agent, as required by the Indenture authorizing the change in length of one or
more Auction Periods and (B) Sufficient Clearing Bids exist on the Interest
Determination Date for the Auction Period commencing on the Effective Date.
3. If the condition referred to in (A) above is not met, the
Auction Rate for the Auction Period commencing on the Effective Date will be
determined pursuant to the Auction Procedures and the Auction Period shall be
the Auction Period determined without reference to the proposed change. If the
condition referred to in (A) is met but the condition referred to in (B) above
is not met, the Auction Rate for the Auction Period commencing on the Effective
Date shall be the lesser of the Maximum Auction Rate and the Net Loan Rate and
the Auction Period shall be the Auction Period determined without reference to
the proposed change.
4. It is hereby represented, upon advice of the Auction Agent
for the Notes described herein, that there were Sufficient Clearing Bids for
such Notes at the Auction immediately preceding the date of this Notice.
5. Terms not defined in this Notice shall have the meanings
set forth in the Indenture entered into in connection with the captioned Notes.
STUDENT LOAN FUNDING 1999-A/B TRUST,
By Firstar Bank, National
Association, not in its
individual capacity, but solely
as the co-owner trustee of the
Student Loan Funding 1999-A/B
Trust
Date:______________________ By:___________________________
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<PAGE> 76
EXHIBIT H
---------
STUDENT LOAN FUNDING 1999-A/B TRUST
STUDENT LOAN [SENIOR/SUBORDINATE]
AUCTION RATE CALLABLE ASSET-BACKED NOTES,
SERIES 1999[A/B]-_
NOTICE ESTABLISHING AUCTION PERIOD ADJUSTMENT
---------------------------------------------
Notice is hereby given that Student Loan Funding 1999-A/B
Trust, by Firstar Bank, National Association, not in its individual capacity,
but solely as the co-owner trustee of the Student Loan Funding 1999-A/B Trust,
hereby establishes with respect to the captioned Notes new lengths for one or
more Auction Periods pursuant to the Indenture:
1. The change shall take effect on _______________, the
Auction Period Distribution Date for the current Auction Period and the date of
commencement of the next Auction Period (the "Effective Date").
2. For the Auction Period commencing on the Effective Date,
the Auction Period Distribution Date shall be __________________, or the next
succeeding Business Day if such date is not a Business Day.
3. For Auction Periods occurring after the Auction Period
commencing on the Effective Date the Auction Period Distribution Dates shall be
[___________(date) and every ____________(number) _____________ (day of week)
thereafter] [every ____________ (number) _____________ (day of week) after the
date set forth in paragraph 2 above], or the next Business Day if any such day
is not a Business Day; provided, however, that the length of subsequent Auction
Periods shall be subject to further change hereafter as provided in Section
2.03.1.7 of the Indenture.
4. For all purposes of the Indenture, from and after the
Effective Date, "RATE ADJUSTMENT DATE" shall mean the Effective Date, and
thereafter _________ of each __________, if each such __________ is a Business
Day; provided, however, that if each such __________ is not a Business Day, then
the first Business Day next succeeding such ____________.
5. The changes described in paragraphs 2 and 3 above shall
take place only upon delivery of this Notice and the satisfaction of other
conditions set forth in the Indenture and our prior notice dated
________________ regarding the proposed change.
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<PAGE> 77
6. Terms not defined in this Notice shall have the meanings
set forth in the Indenture relating to the captioned Notes.
STUDENT LOAN FUNDING 1999-A/B BANK,
By Firstar Bank, National
Association, not in its
individual capacity, but solely
as the co-owner trustee of the
Student Loan Funding 1999-A/B
Trust
Date:______________________ By:___________________________
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<PAGE> 78
EXHIBIT I
---------
STUDENT LOAN FUNDING 1999-A/B TRUST
STUDENT LOAN [SENIOR/SUBORDINATE]
AUCTION RATE CALLABLE ASSET-BACKED NOTES,
SERIES 1999[A/B]-_
NOTICE OF CHANGE IN INTEREST DETERMINATION DATE
-----------------------------------------------
Notice is hereby given by _____________________, as
Calculation Agent for the captioned Notes, that with respect to the captioned
Notes, the Interest Determination Date is hereby changed as follows:
1. The definition of "Interest Determination Date" shall be
deemed amended by substituting "________________ (number) Business Day" as set
forth in the definition thereof in the Indenture and by substituting
"___________________ (number) Business Days" for "two Business Days" in
subsection (d) thereof.
2. This change shall take effect on ________________ which
shall be the Auction Date for the Auction Period commencing on
___________________.
3. The Interest Determination Date for the captioned Notes
shall be subject to further change hereafter as provided in the Indenture.
4. Terms not defined in this Notice shall have the meanings
set forth in the Indenture relating to the captioned Notes.
SALOMON SMITH BARNEY INC.,
as Calculation Agent
Dated:____________________ By: ___________________________
I-1
<PAGE> 79
EXHIBIT J
---------
STUDENT LOAN FUNDING 1999-A/B TRUST
STUDENT LOAN [senior/SUBORDINATE]
AUCTION RATE CALLABLE ASSET-BACKED NOTES,
SERIES 1999[A/B]-_
NOTICE OF PROPOSED AUCTION PERIOD CONVERSION
--------------------------------------------
Notice is hereby given that STUDENT LOAN FUNDING 1999-A/B TRUST, by
Firstar Bank, National Association, not in its individual capacity, but solely
in its capacity as the co-owner trustee of the Student Loan Funding 1999-A/B
Trust, proposes to change for the captioned Notes the length of one or more
Auction Periods pursuant to an Auction Period Conversion under the Indenture as
follows:
1. The change shall take effect on __________________, the
Auction Period Distribution Date for the current Auction Period and the date of
commencement of the next Auction Period (the "Auction Period Conversion Date").
2. The Auction Period Conversion in Paragraph 1 shall take
place only if the provisions set forth in Sections 2.03.1.9 and 2.03.1.10 of the
Indenture are fully satisfied. In connection with such proposed Auction Period
Conversion, the Auction Agent shall not conduct an Auction on the Interest
Determination Date immediately preceding the Auction Period Conversion Date.
3. Regardless of whether the provisions in Sections 2.03.1.9
and 2.03.1.10 of the Indenture are met or are not met, the Auction Agent shall
resume conducting an Auction on the Interest Determination Date that immediately
succeeds such Auction Period Conversion Date.
4. Terms not defined in this Notice shall have the meanings
set forth in the Indenture entered into in connection with the captioned Notes.
STUDENT LOAN FUNDING 1999-A/B TRUST,
By Firstar Bank, National
Association, not in its
individual capacity, but solely
as the co-owner trustee of the
Student Loan Funding 1999-A/B
Trust
Date:______________________ By:___________________________
J-1
<PAGE> 80
EXHIBIT K
---------
STUDENT LOAN FUNDING 1999-A/B TRUST
STUDENT LOAN [senior/SUBORDINATE]
AUCTION RATE CALLABLE ASSET-BACKED NOTES,
SERIES 1999[A/B]-_
NOTICE ESTABLISHING AUCTION PERIOD CONVERSION
---------------------------------------------
Notice is hereby given that STUDENT LOAN FUNDING 1999-A/B
TRUST, by Firstar Bank, National Association, not in its individual capacity,
but solely in its capacity as the co-owner trustee of the Student Loan Funding
1999-A/B Trust, hereby establishes for the captioned Notes new lengths for one
or more Auction Periods pursuant an Auction Period Conversion under the
Indenture:
1. The Auction Period Conversion is effective _______________,
being the Auction Period Distribution Date for the Auction Period immediately
preceding the date of commencement of the Auction Period with respect to which
the Auction Period Conversion is initially effective (the "Effective Date").
2. Terms and provisions applicable to the new Auction Periods
established pursuant to the Auction Period Conversion are set forth in the
Supplemental Indenture attached hereto as Attachment 1 and effective on the
Effective Date.
3. Attached hereto as Attachment 2 is the written evidence
required by Section 2.03.1.9 of the Indenture to the effect that the Auction
Period Conversion described herein will not adversely affect the ratings on the
obligations described in such Section 2.03.1.9.
4. Terms not defined in this Notice shall have the meanings
set forth in the Indenture relating to the captioned Notes.
STUDENT LOAN FUNDING 1999-A/B TRUST,
By Firstar Bank, National
Association, not in its
individual capacity, but solely
as the co-owner trustee of the
Student Loan Funding 1999-A/B
Trust
Date:______________________ By:___________________________
K-1
<PAGE> 1
EXHIBIT 5.1
October 28, 1999
Salomon Smith Barney Inc.,
as Representative of
the Underwriters named in
the Underwriting Agreement
referred to herein
388 Greenwich Street, 32nd Floor
New York, New York 10013
Re: Student Loan Funding 1999-A/B Trust
Ladies and Gentlemen:
We have acted as counsel to Student Loan Funding Resources, Inc.
("Resources"), Student Loan Funding LLC ("Funding"), Student Loan Funding
Holdings LLC ("Holdings"), Student Loan Funding Premier LLC ("Premier"), and
Student Loan Funding Riverfront LLC ("Riverfront") and Student Loan Funding
1999-A/B Trust (the "Trust") in connection with issuance, sale and delivery of
the Student Loan Senior Auction Rate Callable Notes, Series 1999A-1, 1999A-2,
1999A-3, 1999A-4, 1999A-5, and 1999A-6 and Student Loan Subordinate Auction Rate
Callable Notes, Series 1999B-1 (collectively, the "Notes").
Resources has entered into and delivered the following documents and
instruments:
(i) Master Servicing Agreement dated as of October 1, 1999 among
Resources and the Trust and all Subservicing Addenda related
thereto (the "Servicing Agreements");
(ii) Underwriting Agreement, dated October 27, 1999, between
Salomon Smith Barney Inc., as representative of the
underwriters named therein, Resources, Riverfront and the
Trust (the "Underwriting Agreement");
(iii) Administration Agreement dated as of October 1, 1999 between
Resources and Riverfront (the "Riverfront Administration
Agreement"); and
(iv) Administration Agreement dated as of October 1, 1999 between
Resources and the Trust (the "Trust Administration
Agreement").
The above-referenced documents herein referred to collectively as the "Resources
Agreements."
<PAGE> 2
Salomon Smith Barney Inc.
October 28, 1999
Page 2
Funding has entered into and delivered the following documents and
instruments:
(i) Transfer and Sale Agreement, dated October 1, 1999, by and
among Funding, Firstar Bank, National Association ("Firstar"),
as eligible lender trustee, Holdings, and Firstar as eligible
lender trustee for the benefit of Holdings;
(ii) Bill of Sale, dated October 28, 1999, from Funding to
Holdings;
(iii) Blanket Endorsement, dated October 28, 1999, from Funding to
Holdings; and
(iv) Eligible Lender Trust Agreement dated as of
___________________, 1999 between Funding and Firstar, as
eligible lender trustee.
The above-referenced documents herein referred to collectively as the "Funding
Agreements."
Premier has entered into and delivered the following documents and
instruments:
(i) Transfer and Sale Agreement, dated October 1, 1999, by and
among Premier, Firstar as eligible lender trustee, The Fifth
Third Bank, as eligible lender trustee for the benefit of
Funding, Holdings, and Firstar as eligible lender trustee for
the benefit of Holdings;
(ii) Bill of Sale, dated October 28, 1999, from Premier to
Holdings;
(iii) Blanket Endorsement, dated October 28, 1999, from Premier to
Holdings; and
(iv) Eligible Lender Trust Agreement dated as of June 26, 1999
between Premier and Firstar as eligible lender trustee.
The above-referenced documents herein referred to collectively as the "Premier
Agreements."
Holdings has entered into and delivered the following documents and
instruments:
(i) Transfer and Sale Agreement, dated October 1, 1999, by and
among Holdings, Firstar as eligible lender trustee,
Riverfront, and Firstar as eligible lender trustee for the
benefit of Riverfront;
(ii) Bill of Sale, dated October 28, 1999, from Holdings to
Riverfront;
<PAGE> 3
Salomon Smith Barney Inc.
October 28, 1999
Page 3
(iii) Blanket Endorsement, dated October 28, 1999, from Holdings to
Riverfront; and
(iv) Eligible Lender Trust Agreement dated as of October 1, 1999
between Holdings and Firstar as eligible lender trustee.
The above-referenced documents herein referred to collectively as the "Holdings
Agreements."
Riverfront has entered into and delivered the following documents and
instruments:
(i) Transfer and Sale Agreement, dated October 1, 1999, by and
among Riverfront, Firstar, as eligible lender trustee for the
benefit of Holdings, Firstar, as co-owner trustee of the
Trust, and Firstar, as eligible lender trustee for the benefit
of the Trust (the "Riverfront/Trust Transfer and Sale
Agreement");
(ii) Bill of Sale, dated October 28, 1999, from Riverfront to the
Trust;
(iii) Blanket Endorsement, dated October 28, 1999, from Riverfront
to the Trust;
(iv) Eligible Lender Trust Agreement dated as of October 1, 1999
between Riverfront and Firstar as eligible lender trustee;
(v) Riverfront Administration Agreement; and
(vi) Underwriting Agreement.
The above-referenced documents herein referred to collectively as the
"Riverfront Agreements."
The Trust has entered into and delivered the following documents and
instruments:
(i) Indenture of Trust dated as of October 1, 1999 between the
Trust and Firstar (the "Indenture Trustee"), as supplemented
by the Terms Supplement dated as of October 1, 1999 between
the Trust and the Indenture Trustee.
(ii) Trust Administration Agreement;
(iii) Servicing Agreements;
(iv) Eligible Lender Trust Agreement dated as of October 1, 1999
between the Trust and Firstar as eligible lender trustee;
<PAGE> 4
Salomon Smith Barney Inc.
October 28, 1999
Page 4
(v) Riverfront/Trust Transfer and Sale Agreement;
(vii) Underwriting Agreement;
(vii) Calculation Agent Agreement dated as of October 1, 1999 among
the Trust, the Indenture Trustee and Salomon Smith Barney Inc.
as calculation agent;
(viii) Auction Agent Agreement among the Trust, the Indenture Trustee
and Bankers Trust Company as auction agent;
(ix) Broker-Dealer Agreement dated as of October 1, 1999 among the
Trust, the Indenture Trustee and Salomon Smith Barney Inc. as
broker-dealer; and
(x) Broker-Dealer Agreement dated as of October 1, 1999 among the
Trust, the Indenture Trustee and Banc of America Securities
LLC as broker-dealer.
The above-referenced documents are herein referred to collectively as
the "Trust's Agreements".
We have reviewed the documents referred to above and have reviewed such
other documents (including, for purposes of clarification, the Registration
Statement and Prospectus, each as defined in the Underwriting Agreement) and
such examination of such other matters as we have deemed necessary to render the
opinions expressed herein.
In rendering the opinions expressed herein, we have assumed the
genuineness of all signatures (of parties other than Resources, Funding,
Premier, Holdings and Riverfront) on original documents and the conformity to
the original documents of all copies submitted to us. We have also assumed the
due execution and delivery by and enforceability against the parties thereto (as
to all parties other than Resources Funding, Premier, Holding, Riverfront and
the Trust) of all documents which we have examined where due execution and
delivery or enforceability is a prerequisite to the effectiveness thereof. As to
various facts material to our opinion, we have relied upon statements or
certificates of officers and representatives of Resources, Funding, Premier,
Holdings, Riverfront and the Trust. Although for purposes of our opinions
contained herein, we have assumed the accuracy of such facts, nothing has come
to the attention of those attorneys in our firm who have devoted substantive
attention to the transaction contemplated herein which would lead us to question
the accuracy of such assumptions.
<PAGE> 5
Salomon Smith Barney Inc.
October 28, 1999
Page 5
We are admitted to the Bar of the State of Ohio and we express no
opinion herein as to the laws of any jurisdiction other than the laws of the
United States of America and the laws of the State of Ohio.
Based upon the review, examination and assumptions described above and
subject to the further assumptions, exceptions and qualifications set forth
below, it is our opinion that:
1. Resources is a corporation duly organized, validly existing and in
good standing under the laws of the State of Ohio, has the requisite power to
carry on its present activity, and has full power and authority, and has taken
or caused to be taken all necessary action, to authorize, execute and deliver
the Resources Agreements.
2. Resources has all requisite power and authority to perform, and has
taken or caused to be taken all necessary action to authorize performance of,
its obligations under the Resources Agreements.
3. All authorizations, approvals, consents or other orders of, or
filings or registrations with, any governmental authorities or agencies which
are required for the valid authorization, execution and delivery by Resources of
the Resources Agreements and for the performance of its obligations under
Resources Agreements, have been properly obtained or made.
4. The execution and delivery by Resources of the Resources Agreements,
and the performance of its obligations under the Resources Agreements, will not
(i) violate any provision of the Articles or Regulations of Resources; (ii)
result in a breach of or constitute a default under the provisions of any
resolution, contract, agreement or instrument known to us (after having made due
inquiry with respect thereto) to which Resources is or may be subject, or by
which it or its property is bound; or (iii) to the best of our knowledge,
violate any applicable law of the State of Ohio or the United States, whether
statutory or common law, or any other applicable order, decree, statute, rule or
regulation.
5. The Resources Agreements, have been duly authorized, executed and
delivered by Resources, and constitute the legal, valid and binding obligations
of Resources, enforceable in accordance with their respective terms, except as
follows:
(A) their enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, rearrangement,
liquidation, conservatorship or other similar laws affecting creditors'
rights generally, including court decisions interpreting such laws,
statutes of limitations and personal jurisdiction;
<PAGE> 6
Salomon Smith Barney Inc.
October 28, 1999
Page 6
(B) their enforceability and the availability of specific
performance, injunctive relief and other forms of equitable relief are
subject to principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law),
commercial reasonableness and conscionability, under which a court
might, among other things, decline to permit acceleration of
indebtedness with respect to breach of a covenant deemed not material
by the court, or to require a party thereto to act with reasonableness
and good faith;
(C) although certain of the remedial provisions may be limited
or rendered unenforceable by the laws of the United States of America,
the State of Ohio or other jurisdictions where enforcement may be
sought, none of such qualifications, singly or in the aggregate, should
materially interfere with the practical realization of the legal rights
and remedies provided by the Resources Agreements;
(D) the rights of indemnity under the Underwriting Agreement
may be limited under applicable securities law; and
(E) no opinion is expressed with respect to the enforceability
of any provisions of the Resources Agreements that purport to require
payment or reimbursement of attorneys' fees or litigation expenses of
another party.
6. To our knowledge, based solely on our current actual knowledge and
due inquiry of certain officers of Resources with respect thereto, there is no
action, suit, proceeding or investigation by law or in equity before or by any
court, public board or body pending or threatened against or affecting Resources
wherein an adverse determination would affect the power or authority of
Resources to execute and deliver the Resources Agreements or perform its
obligations under the Resources Agreements or the validity or enforceability
against Resources of the Resources Agreements.
7. Funding is a Delaware limited liability company, has the requisite
power to carry on its present activity, and has full power and authority, and
has taken or caused to be taken all necessary action, to authorize, execute and
deliver the Funding Agreements.
8. Funding has all requisite power and authority to perform, and has
taken or caused to be taken all necessary action to authorize performance of,
its obligations under the Funding Agreements.
9. All authorizations, approvals, consents or other orders of, or
filings or registrations with, any governmental authorities or agencies which
are required for the valid authorization,
<PAGE> 7
Salomon Smith Barney Inc.
October 28, 1999
Page 7
execution and delivery by Funding of the Funding Agreements and for the
performance of its obligations under the Funding Agreements, have been properly
obtained or made.
10. The execution and delivery by Funding of the Funding Agreements,
and the performance of its obligations under the Funding Agreements, will not
(i) violate any provision of the Articles of Organization or its First Amended
and Restated Limited Liability Company Agreement; (ii) result in a breach of or
constitute a default under the provisions of any resolution, contract, agreement
or instrument known to us (after having made due inquiry with respect thereto)
to which Funding is or may be subject, or by which it or its property is bound;
or (iii) to the best of our knowledge, violate any applicable law of the State
of Ohio or the United States, whether statutory or common law, or any other
applicable order, decree, statute, rule or regulation.
11. The Funding Agreements, have been duly authorized, executed and
delivered by Funding, and constitute the legal, valid and binding obligations of
Funding, enforceable in accordance with their respective terms, except as
follows:
(A) their enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, rearrangement,
liquidation, conservatorship or other similar laws affecting creditors'
rights generally, including court decisions interpreting such laws,
statutes of limitations and personal jurisdiction;
(B) their enforceability and the availability of specific
performance, injunctive relief and other forms of equitable relief are
subject to principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law),
commercial reasonableness and conscionability, under which a court
might, among other things, decline to permit acceleration of
indebtedness with respect to breach of a covenant deemed not material
by the court, or to require a party thereto to act with reasonableness
and good faith;
(C) although certain of the remedial provisions may be limited
or rendered unenforceable by the laws of the United States of America,
the State of Ohio or other jurisdictions where enforcement may be
sought, none of such qualifications, singly or in the aggregate, should
materially interfere with the practical realization of the legal rights
and remedies provided by the Funding Agreements; and
(D) no opinion is expressed with respect to the enforceability
of any provisions of the Funding Agreements that purport to require
payment or reimbursement of attorneys' fees or litigation expenses of
another party.
<PAGE> 8
Salomon Smith Barney Inc.
October 28, 1999
Page 8
12. To our knowledge, based solely on our current actual knowledge and
due inquiry of certain officers of Funding with respect thereto, there is no
action, suit, proceeding or investigation by law or in equity before or by any
court, public board or body pending or threatened against or affecting Funding
wherein an adverse determination would affect the power or authority of Funding
to execute and deliver the Funding Agreements or perform its obligations under
the Funding Agreements or the validity or enforceability against Funding of the
Funding Agreements.
13. Holdings is a Delaware limited liability company, has the requisite
power to carry on its present activity, and has full power and authority, and
has taken or caused to be taken all necessary action, to authorize, execute and
deliver the Holding Agreements.
14. Holdings has all requisite power and authority to perform, and has
taken or caused to be taken all necessary action to authorize performance of,
its obligations under the Holdings Agreements.
15. All authorizations, approvals, consents or other orders of, or
filings or registrations with, any governmental authorities or agencies which
are required for the valid authorization, execution and delivery by Holdings of
the Holdings Agreements and for the performance of its obligations under the
Holdings Agreements, have been properly obtained or made.
16. The execution and delivery by Holdings of the Holdings Agreements,
and the performance of its obligations under the Holdings Agreements, will not
(i) violate any provision of the Articles of Organization or its Limited
Liability Company Agreement; (ii) result in a breach of or constitute a default
under the provisions of any resolution, contract, agreement or instrument known
to us (after having made due inquiry with respect thereto) to which Holdings is
or may be subject, or by which it or its property is bound; or (iii) to the best
of our knowledge, violate any applicable law of the State of Ohio or the United
States, whether statutory or common law, or any other applicable order, decree,
statute, rule or regulation.
17. The Holdings Agreements, have been duly authorized, executed and
delivered by Holdings, and constitute the legal, valid and binding obligations
of Holdings, enforceable in accordance with their respective terms, except as
follows:
(A) their enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, rearrangement,
liquidation, conservatorship or other similar laws affecting creditors'
rights generally, including court decisions interpreting such laws,
statutes of limitations and personal jurisdiction;
<PAGE> 9
Salomon Smith Barney Inc.
October 28, 1999
Page 9
(B) their enforceability and the availability of specific
performance, injunctive relief and other forms of equitable relief are
subject to principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law),
commercial reasonableness and conscionability, under which a court
might, among other things, decline to permit acceleration of
indebtedness with respect to breach of a covenant deemed not material
by the court, or to require a party thereto to act with reasonableness
and good faith;
(C) although certain of the remedial provisions may be limited
or rendered unenforceable by the laws of the United States of America,
the State of Ohio or other jurisdictions where enforcement may be
sought, none of such qualifications, singly or in the aggregate, should
materially interfere with the practical realization of the legal rights
and remedies provided by the Holdings Agreements; and
(D) no opinion is expressed with respect to the enforceability
of any provisions of the Holdings Agreements that purport to require
payment or reimbursement of attorneys' fees or litigation expenses of
another party.
18. To our knowledge, based solely on our current actual knowledge and
due inquiry of certain officers of Holdings with respect thereto, there is no
action, suit, proceeding or investigation by law or in equity before or by any
court, public board or body pending or threatened against or affecting Holdings
wherein an adverse determination would affect the power or authority of Holdings
to execute and deliver Holdings Agreements or perform its obligations under the
Holdings Agreements or the validity or enforceability against Holdings of the
Holdings Agreements.
19. Premier is a Delaware limited liability company, has the requisite
power to carry on its present activity, and has full power and authority, and
has taken or caused to be taken all necessary action, to authorize, execute and
deliver the Premier Agreements.
20. Premier has all requisite power and authority to perform, and has
taken or caused to be taken all necessary action to authorize performance of,
its obligations under the Premier Agreements.
21. All authorizations, approvals, consents or other orders of, or
filings or registrations with, any governmental authorities or agencies which
are required for the valid authorization, execution and delivery by Premier of
the Premier Agreements and for the performance of its obligations under the
Premier Agreements, have been properly obtained or made.
22. The execution and delivery by Premier of the Premier Agreements,
and the performance of its obligations under the Premier Agreements, will not
(i) violate any provision of
<PAGE> 10
Salomon Smith Barney Inc.
October 28, 1999
Page 10
the Articles of Organization or its First Amended and Restated Limited Liability
Company Agreement; (ii) result in a breach of or constitute a default under the
provisions of any resolution, contract, agreement or instrument known to us
(after having made due inquiry with respect thereto) to which Resources is or
may be subject, or by which it or its property is bound; or (iii) to the best of
our knowledge, violate any applicable law of the State of Ohio or the United
States, whether statutory or common law, or any other applicable order, decree,
statute, rule or regulation.
23. The Premier Agreements, have been duly authorized, executed and
delivered by Premier, and constitute the legal, valid and binding obligations of
Premier, enforceable in accordance with their respective terms, except as
follows:
(A) their enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, rearrangement,
liquidation, conservatorship or other similar laws affecting creditors'
rights generally, including court decisions interpreting such laws,
statutes of limitations and personal jurisdiction;
(B) their enforceability and the availability of specific
performance, injunctive relief and other forms of equitable relief are
subject to principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law),
commercial reasonableness and conscionability, under which a court
might, among other things, decline to permit acceleration of
indebtedness with respect to breach of a covenant deemed not material
by the court, or to require a party thereto to act with reasonableness
and good faith;
(C) although certain of the remedial provisions may be limited
or rendered unenforceable by the laws of the United States of America,
the State of Ohio or other jurisdictions where enforcement may be
sought, none of such qualifications, singly or in the aggregate, should
materially interfere with the practical realization of the legal rights
and remedies provided by the Premier Agreements; and
(D) no opinion is expressed with respect to the enforceability
of any provisions of the Premier Agreements that purport to require
payment or reimbursement of attorneys' fees or litigation expenses of
another party.
24. To our knowledge, based solely on our current actual knowledge and
due inquiry of certain officers of Premier with respect thereto, there is no
action, suit, proceeding or investigation by law or in equity before or by any
court, public board or body pending or threatened against or affecting Premier
wherein an adverse determination would affect the power or authority of Premier
to execute and deliver Premier Agreements or perform its obligations under the
Premier Agreements or the validity or enforceability against Premier of the
Premier Agreements.
<PAGE> 11
Salomon Smith Barney Inc.
October 28, 1999
Page 11
25. Riverfront is a Delaware limited liability company, has the
requisite power to carry on its present activity, and has full power and
authority, and has taken or caused to be taken all necessary action, to
authorize, execute and deliver the Riverfront Agreements.
26. Riverfront has all requisite power and authority to perform, and
has taken or caused to be taken all necessary action to authorize performance
of, its obligations under the Riverfront Agreements.
27. All authorizations, approvals, consents or other orders of, or
filings or registrations with, any governmental authorities or agencies which
are required for the valid authorization, execution and delivery by Riverfront
of the Riverfront Agreements and for the performance of its obligations under
the Riverfront Agreements have been properly obtained or made.
28. The execution and delivery by Riverfront of the Riverfront
Agreements, and the performance of its obligations under Riverfront Agreements,
will not (i) violate any provision of the Articles of Organization or its First
Amended and Restated Limited Liability Company Agreement; (ii) result in a
breach of or constitute a default under the provisions of any resolution,
contract, agreement or instrument known to us (after having made due inquiry
with respect thereto) to which Resources is or may be subject, or by which it or
its property is bound; or (iii) to the best of our knowledge, violate any
applicable law of the State of Ohio or the United States, whether statutory or
common law, or any other applicable order, decree, statute, rule or regulation.
29. The Riverfront Agreements have been duly authorized, executed and
delivered by Riverfront, and constitute the legal, valid and binding obligations
of Riverfront, enforceable in accordance with their respective terms, except as
follows:
(A) their enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, rearrangement,
liquidation, conservatorship or other similar laws affecting creditors'
rights generally, including court decisions interpreting such laws,
statutes of limitations and personal jurisdiction;
(B) their enforceability and the availability of specific
performance, injunctive relief and other forms of equitable relief are
subject to principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law),
commercial reasonableness and conscionability, under which a court
might, among other things, decline to permit acceleration of
indebtedness with respect to breach of a covenant deemed not material
by the court, or to require a party thereto to act with reasonableness
and good faith;
<PAGE> 12
Salomon Smith Barney Inc.
October 28, 1999
Page 12
(C) although certain of the remedial provisions may be limited
or rendered unenforceable by the laws of the United States of America,
the State of Ohio or other jurisdictions where enforcement may be
sought, none of such qualifications, singly or in the aggregate, should
materially interfere with the practical realization of the legal rights
and remedies provided by the Riverfront Agreements;
(D) the rights of indemnity under the Underwriting Agreement
may be limited under applicable securities law; and
(E) no opinion is expressed with respect to the enforceability
of any provisions of the Riverfront Agreements that purport to require
payment or reimbursement of attorneys' fees or litigation expenses of
another party.
30. To our knowledge, based solely on our current actual knowledge and
due inquiry of certain officers of Riverfront with respect thereto, there is no
action, suit, proceeding or investigation by law or in equity before or by any
court, public board or body pending or threatened against or affecting
Riverfront wherein an adverse determination would affect the power or authority
of Riverfront to execute and deliver Riverfront Agreements or perform its
obligations under the Riverfront Agreements or the validity or enforceability
against Riverfront of the Riverfront Agreements.
31. All authorizations, approvals, consents or other orders of, or
filings or registrations with, any governmental authorities or agencies which
are required for the valid authorization, execution and delivery by Trust of the
Trust's Agreements and for the performance of its obligations under the Trust's
Agreements, have been properly obtained or made.
32. The execution and delivery by the Trust of the Trust's Agreements,
and the performance of its obligations under the Trust's Agreements, will not
(i) violate any provision of the of the Trust Agreement of the Trust; (ii)
result in a breach of or constitute a default under the provisions of any
resolution, contract, agreement or instrument known to us (after having made due
inquiry with respect thereto) to which the Trust is or may be subject, or by
which it or its property is bound; or (iii) to the best of our knowledge,
violate any applicable law of the State of Ohio or the United States, whether
statutory or common law, or any other applicable order, decree, statute, rule or
regulation.
33. The Trust's Agreements, have been duly authorized, executed and
delivered by the Trust, and constitute the legal, valid and binding obligations
of the Trust, enforceable in accordance with their respective terms, except as
follows:
<PAGE> 13
Salomon Smith Barney Inc.
October 28, 1999
Page 13
(A) their enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, rearrangement,
liquidation, conservatorship or other similar laws affecting creditors'
rights generally, including court decisions interpreting such laws,
statutes of limitations and personal jurisdiction;
(B) their enforceability and the availability of specific
performance, injunctive relief and other forms of equitable relief are
subject to principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law),
commercial reasonableness and conscionability, under which a court
might, among other things, decline to permit acceleration of
indebtedness with respect to breach of a covenant deemed not material
by the court, or to require a party thereto to act with reasonableness
and good faith;
(C) although certain of the remedial provisions may be limited
or rendered unenforceable by the laws of the United States of America,
the State of Ohio or other jurisdictions where enforcement may be
sought, none of such qualifications, singly or in the aggregate, should
materially interfere with the practical realization of the legal rights
and remedies provided by the Trust's Agreements;
(D) the rights of indemnity under the Underwriting Agreement
may be limited under applicable securities law; and
(E) no opinion is expressed with respect to the enforceability
of any provisions of the Trust's Agreements that purport to require
payment or reimbursement of attorneys' fees or litigation expenses of
another party.
34. To our knowledge, based solely on our current actual knowledge and
due inquiry of certain representatives of the Trust with respect thereto, there
is no action, suit, proceeding or investigation by law or in equity before or by
any court, public board or body pending or threatened against or affecting the
Trust wherein an adverse determination would affect the power or authority of
the Trust to execute and deliver the Trust's Agreements or perform its
obligations under the Trust's Agreements or the validity or enforceability
against the Trust of the Trust's Agreements.
35. Assuming that the Indenture Trustee is and will continue to be an
"eligible lender" under the Higher Education Act, and assuming that the Financed
Student Loans are serviced in accordance with the requirements of the Higher
Education Act, and assuming that the contracts of guarantee between the
Guarantors and the Indenture Trustee are in full force and effect, then the
Indenture Trustee is entitled, under the terms of the Higher Education Act, to
full benefits of all interest benefit subsidies, special allowance payments and
federal reinsurance provided by the
<PAGE> 14
Salomon Smith Barney Inc.
October 28, 1999
Page 14
Higher Education Act upon foreclosure of its security interest in and an
assignment of the Financed Student Loans to the Indenture Trustee.
36. The Registration Statement has become effective under the
Securities Act and, to the best of our knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceedings
for that purpose have been instituted or are pending or contemplated under the
Securities Act, and the Registration Statement, the Prospectus and the
Prospectus Supplement, and each amendment or supplement thereto, as of their
respective effective or issue dates (except for any financial statements or
other financial data or notes thereto or any statistical or tabular data
contained or incorporated therein as to which we express no opinion), complied
as to form in all material respects with the requirements of the Securities Act
and the Rules and Regulations thereunder.
37. The Indenture has been duly qualified under the Trust Indenture Act
of 1939, as amended.
38. None of the Trust, Riverfront, Holdings, Premier or Funding is, and
will not as a result of the offer and sale of the Notes as contemplated in the
Prospectus and the Underwriting Agreement become, an "investment company" as
defined in the Investment Company Act of 1940 ("Investment Company Act") or a
company "controlled by" an "investment company" within the meaning of the
Investment Company Act.
This opinion is furnished by us to you, solely for your benefit as
purchasers of the Notes and solely with respect to the initial purchase of the
Notes by you, upon the understanding that we are not hereby assuming any
professional responsibility to any other person. No opinion may be inferred or
implied beyond the matters expressly stated herein. This opinion is solely for
the benefit of the addressees set forth above. This opinion may be furnished to
Calfee, Halter & Griswold LLP as special counsel to Resources, Squire, Sanders &
Dempsey, L.L.P., Moody's Investors Service, Inc. and Fitch IBCA, Inc. This
opinion may not be relied upon in any manner or used by any other person without
our express written consent. This opinion speaks as of its date only and we
disclaim any undertaking or obligation to advise you of changes that hereafter
may come to our attention.
Very truly yours,
/s/ Thompson Hine & Flory LLP
THOMPSON HINE & FLORY LLP
PMS:RAS:KKW
<PAGE> 1
EXHIBIT 8.1
October 28, 1999
Salomon Smith Barney Inc.
As Representative to
the Underwriters
388 Greenwich Street, 32nd Floor
New York, New York 10013
Re: Student Loan Funding 1999-A/B Trust Registration Statement on Form S-3
(No. 333-64283)
Ladies and Gentlemen:
We have acted as special tax counsel for Student Loan Funding 1999-A/B Trust, a
Delaware common law trust (the "Issuer"), and Student Loan Funding Riverfront
LLC, a Delaware limited liability company (the "Depositor"), in connection with
the above-referenced Registration Statement (together with the exhibits and any
amendments thereto, the "Registration Statement"), filed by the Issuer with the
Securities and Exchange Commission in connection with the registration by the
Issuer of certain Asset Backed Notes (the "Notes"), and in connection with the
Prospectus Supplement to the Prospectus (the "Prospectus") included in the
Registration Statement delivered by the Issuer in connection with the issuance
and sale of the Notes.
In order to express our opinion hereinafter stated, (a) we have examined copies
of the forms of (i) the Eligible Lender Trust Agreement, (ii) the Trust
Agreement, (iii) the Indenture, (iv) the Notes (collectively the "Operative
Documents") and (v) the Servicing Agreements and (b) we have examined such other
records and documents and such matters of law, and we have satisfied ourselves
as to such matters of fact, as we have considered relevant for purposes of this
opinion.
The opinions set forth in this letter concerning federal income tax matters are
based upon the applicable provisions of the Internal Revenue Code of 1986, as
amended (the "Code"), Treasury Regulations promulgated and proposed thereunder,
current positions of the Internal Revenue Service (the "IRS") including those
contained in published Revenue Rulings and Revenue Procedures, and existing
judicial decisions. This opinion is subject to the explanations and
qualifications set forth under the caption "Federal Income Tax Consequences" in
the Prospectus which constitutes a part of the Registration Statement.
Based on the foregoing and assuming that the Operative Documents are executed
and delivered in substantially the form we have examined, we hereby confirm our
opinion with
<PAGE> 2
Salomon Smith Barney Inc.
October 28, 1999
respect to the federal income tax characterization of the Notes and the federal
income tax treatment of the issuance of such Notes set forth under the caption
"Federal Income Tax Consequences" in the Prospectus. In our opinion, for federal
income tax purposes, the Notes will be characterized as debt. However, if the
IRS were to assert successfully that the Notes should not be characterized as
debt for federal income tax purposes, in our opinion the Issuer would not be
taxable as a corporation even though the Issuer might be treated as a publicly
traded partnership. Also, in our opinion, for federal income tax purposes, the
Issuer will not be treated as an entity separate from the Depositor and thus
will not be classified as a separate entity that is an association (or a
publicly traded partnership) taxable as a corporation. However, if the IRS were
to assert successfully that the Issuer should be treated as an entity separate
from the Depositor for federal income tax purposes, it is our opinion that the
Issuer would not be subject to federal income tax as a publicly traded
partnership taxable as a corporation. Our opinion that neither the Depositor nor
the Issuer would be taxable as a corporation is based upon the representation by
both the Depositor and the Issuer that for 1999 and any subsequent taxable year
90% or more of the gross income of the Depositor, and the Issuer if treated as a
separate entity, for such taxable year will consist of interest income
attributable to loans acquired by either the Depositor or the Issuer and not
attributable to loans originated by either the Depositor or the Issuer. We do
not intend nor do we undertake any obligation to verify whether or not the
representation described in the immediately preceding sentence is met for any
taxable year. Moreover, we are of the opinion that the statements set forth in
the Prospectus under the heading "Federal Income Tax Consequences" are a fair
and accurate summary of the material tax consequences of the issuance and of the
holding of the Notes. There can be no assurance, however, that the legal
conclusions presented therein will not be successfully challenged by the
relevant administrative authorities, or significantly altered by new
legislation, changes in administrative positions, or judicial decisions, any of
which challenges or alterations may be applied retroactively with respect to
completed transactions.
This opinion is provided as a legal opinion only. No opinion may be inferred or
implied beyond the matters expressly stated herein. This opinion is solely for
the benefit of the addressees set forth above. This opinion may not be relied
upon in any manner or used by any other person without our express written
consent. This opinion speaks as of its date only and we disclaim any undertaking
or obligation to advise you of changes that hereafter may come to our attention.
Very truly yours,
/s/ Thompson Hine & Flory LLP
-2-
<PAGE> 1
EXHIBIT 10.1
- --------------------------------------------------------------------------------
ADMINISTRATION AGREEMENT
BETWEEN
STUDENT LOAN FUNDING 1999-A/B TRUST
AS ISSUER
AND
STUDENT LOAN FUNDING RESOURCES, INC.
AS ADMINISTRATOR
DATED AS OF OCTOBER 1, 1999
- --------------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
-----------------
PAGE
Section 1. Definitions .................................................2
Section 2. Indenture and Related Documents .............................2
Section 3. Servicing Documents .........................................4
Section 4. Transfer Agreement ..........................................5
Section 5. Higher Education Act ........................................6
Section 6. Other Duties with Respect to the Indenture
and Servicing Documents .....................................6
Section 7. Other Administrative Services ...............................6
Section 8. Exceptions ..................................................7
Section 9. Employees; Offices ..........................................8
Section 10. Non-Ministerial Matters .....................................8
Section 11. Compensation ................................................8
Section 12. Representations and Warranties of the Issuer ................9
Section 13. Representations and Warranties of the Administrator .........9
Section 14. Term .......................................................10
Section 15. Obligation to Supply Information ...........................11
Section 16. Liability of Administrator .................................11
Section 17. Merger or Consolidation of, or Assumption of
the Obligations of, the Administrator ......................12
Section 18. Administrator Default ......................................12
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<PAGE> 3
Section 19. Appointment of Successor ...................................13
Section 20. Reliance on Information Obtained from Third Parties ........14
Section 21. Notices ....................................................14
Section 22. Amendment ..................................................14
Section 23. Assignment .................................................14
Section 24. Independence of Administrator ..............................15
Section 25. No Joint Venture. ..........................................15
Section 26. Other Activities of Administrator ..........................15
Section 27. No Petition ................................................15
Section 28. Governing Law ..............................................15
Section 29. Entire Agreement ...........................................15
Section 30. Successors; Counterparts ...................................15
Section 31. Captions ...................................................16
ii
<PAGE> 4
ADMINISTRATION AGREEMENT
------------------------
THIS ADMINISTRATION AGREEMENT (the "Administration Agreement") is made
as of October 1, 1999 between Student Loan Funding 1999-A/B Trust (the "Issuer")
and Student Loan Funding Resources, Inc., an Ohio corporation, as administrator
(the "Administrator") under the circumstances set forth below. All references to
Student Loan Funding 1999-A/B Trust or the Issuer shall be deemed to be
references to Firstar Bank, National Association, not in its individual
capacity, but solely as Co-Owner Trustee (the "Co-Owner Trustee") under the
Trust Agreement dated as of October 1, 1999.
RECITALS
A. The Issuer is engaged in the acquisition from Student Loan Funding
LLC of student loans (the "Student Loans") guaranteed under a guaranty program
established pursuant to the requirements of the Higher Education Act of 1965, as
amended, and the regulations promulgated thereunder (the "Higher Education
Act").
B. In connection with the acquisition of such Student Loans, the Issuer
has executed and delivered that certain Indenture of Trust and Terms Supplement
to Indenture, each dated as of October 1, 1999 (together, the "Indenture") among
the Issuer, Firstar Bank, National Association, as Eligible Lender Trustee, on
behalf of the Issuer (the "Eligible Lender Trustee"), and Firstar Bank, National
Association, as Indenture Trustee (the "Indenture Trustee").
C. The Issuer and/or the Master Servicer (as defined below) have
entered into certain agreements in connection with the acquisition of Student
Loans, including without limitation one or more Servicing Agreements and any
Subservicing Addenda thereto with a Servicer (the "Servicing Agreements"), the
Transfer and Sale Agreement, dated as of October1, 1999 by and among Student
Loan Funding LLC (the "Depositor"), Firstar Bank, National Association, as
eligible lender trustee on behalf of the Depositor, the Issuer, the Eligible
Lender Trustee and the Indenture Trustee (the "Transfer Agreement"), and the
Master Servicing Agreement, dated as of October 1, 1999 by and between the
Issuer and Student Loan Funding Resources, Inc., as Master Servicer (the "Master
Servicing Agreement", together with the Servicing Agreements collectively
referred to herein as the "Servicing Documents").
D. Pursuant to the Indenture and the Basic Documents, the Issuer is
obligated to perform certain duties and responsibilities under the Indenture and
in connection with the assets and obligations thereunder.
E. The Issuer has requested that the Administrator provide advice and
assistance to the Issuer and perform various services for and duties of the
Issuer, including the duties and responsibilities of the Issuer under the
Indenture and in connection with the assets and obligations thereunder.
<PAGE> 5
F. The Issuer desires to avail itself of the experience, advice and
assistance of the Administrator and to have the Administrator perform various
financial, statistical, accounting and other services for and duties of the
Issuer, and the Administrator has the capacity and is willing to furnish such
services on the terms and conditions set forth herein.
NOW THEREFORE, in consideration of the mutual promises and covenants
set forth herein and other valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
SECTION 1. DEFINITIONS. For all purposes of this Agreement, except as
otherwise expressly provided herein or unless the context requires, capitalized
terms not otherwise defined herein shall have the following meanings:
"AFFILIATE" means any corporation or other entity directly or
indirectly controlling or controlled by, or under direct or indirect common
control with, the Administrator or the Issuer. For purposes of this definition,
"control" means the power to direct management and policies of such entity,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise.
"GUARANTEE AGENCY" means any guarantee agency that provides guarantees
for Student Loans.
"SERVICER" means any servicing entity selected by the Master Servicer
to provide servicing of Student Loans, including but not limited to application,
review, disbursement, collection, due diligence and claims services.
SECTION 2. INDENTURE AND RELATED DOCUMENTS. The Administrator shall
cause the duties and responsibilities of the Issuer under the Indenture to be
performed, including but not limited to the actions set forth below. The
Administrator shall advise the Issuer when action by the Issuer is necessary to
comply with the Issuer's duties under the Indenture and the agreements relating
thereto. The Administrator shall prepare for execution, if required, by the
Issuer, or shall cause the preparation by other appropriate persons of 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 Indenture.
In furtherance of the foregoing, the Administrator shall take all appropriate
action, including but not limited to, the following:
a. obtaining and preserving the Issuer's legal right to do
business in any jurisdiction in which such qualification is or
shall be necessary to protect the validity and enforceability
of the Indenture, and each instrument and agreement included
in the trust estate of the Indenture;
b. preparing all supplements, amendments, financing statements,
continuation statements, instruments of further assurance and
other instruments, in accordance
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<PAGE> 6
with the relevant provisions of the Indenture, necessary to
protect the trust estate of the Indenture;
c. arranging for the delivery of any opinions of counsel and
certificates of officers of the Issuer and other statements
required under the relevant provisions of the Indenture;
d. preparing and obtaining documents and instruments required for
the release of the Issuer from its obligations under the
Indenture;
e. monitoring the Issuer's obligations as to the satisfaction and
discharge of the Indenture and preparing any certificates of
officers of the Issuer and obtaining any opinions of counsel
required in connection therewith;
f. preparing, obtaining or filing the instruments, opinions and
certificates and other documents required for the release of
collateral;
g. taking such actions as may be required of the Issuer under the
Indenture upon the occurrence and continuance of an event of
default thereunder;
h. preparing and, after execution by the Issuer, filing with the
Securities and Exchange Commission (the "Commission"), any
applicable State agencies and the Indenture Trustee, 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 including
without limitation, the requirements under any continuing
disclosure agreements;
i. causing the directions of the Issuer to be carried out in
connection with opening one or more accounts in the Issuer's
name, preparing any orders of the Issuer and certificates of
officers of the Issuer and obtaining opinions of counsel
required, and taking all other actions necessary, with respect
to investment and reinvestment of funds in trust funds and
accounts established under the Indenture in accordance with
the investment criteria and requirements of the Indenture and
applicable investment policies.
j. preparing any requests of the Issuer and certificates of
officers of the Issuer and obtaining any opinions of counsel
required for the release of the trust estate of the Indenture;
k. preparing all certificates of officers of the Issuer, and
coordinating obtaining opinions of counsel as required with
respect to any requests by the Issuer of the Indenture Trustee
to take any action under the Indenture;
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<PAGE> 7
l. preparing orders of the Issuer and obtaining opinions of
counsel as necessary or required for the execution of any
amendments or supplements to the Indenture;
m. preparing and delivering certificates of officers of the
Issuer, if necessary, for the release of property from the
lien of the Indenture;
n. preparing and delivering to the Indenture Trustee any
agreements with respect to notice provisions;
o. preparing and delivering investment instructions to the
Indenture Trustee, as necessary or required under the terms of
the applicable Indenture and in accordance with the applicable
investment policy, adopted from time to time; and
p. taking such actions as may be required of the Issuer under any
agreement between the Issuer and other parties relating to the
Indenture.
SECTION 3. SERVICING DOCUMENTS. The Administrator shall cause the
duties and responsibilities of the Issuer under each of the Student Loans and
the Servicing Documents to be performed, including but not limited to the
duties set forth below. The Administrator shall advise the Issuer when action
by the Issuer is necessary to comply with the Issuer's obligations under the
Student Loans and the Servicing Documents. The Administrator shall prepare for
execution, if required, by the Issuer or shall cause the preparation by other
appropriate persons of 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 Student Loans and the Servicing Documents. In
furtherance of the foregoing, the Administrator shall take all appropriate
action, including but not limited to the following:
a. pursuant to the Servicing Agreements, providing to each
Servicer (or such Servicer's bailee) from time to time, as
necessary, and requiring that each Servicer (or such
Servicer's bailee) maintain physical custody and possession
of, documentation and information relating to Student Loans
transferred to the Issuer pursuant to the Transfer Agreement
and, on and after each applicable date on which Student Loans
are to be purchased (the "Loan Purchase Date"), Student Loans
sold and transferred to the Issuer on each such Loan Purchase
Date, including the documents evidencing such Student Loans
and such additional documentation or information relating to
such Student Loans as is reasonably required for the Student
Loans to be properly serviced by such Servicer;
b. cause to be paid solely from Indenture assets, all amounts to
be paid by the Issuer pursuant to the Transfer Agreement;
c. promptly after each Loan Purchase Date, ensuring that
notification as required under the Higher Education Act and by
the applicable Guarantee Agencies is made to the
4
<PAGE> 8
borrower under each Student Loan and to the Secretary of
Education and the applicable Guarantee Agencies, as
appropriate;
d. promptly after each Loan Purchase Date, notifying the
applicable Servicer of the Indenture Trustee to which each
Student Loan purchased on such Loan Purchase Date has been
assigned and such other information as may be required under
the applicable Servicing Agreement;
e. causing to be paid to each Servicer on behalf of the Issuer,
but solely from Indenture assets, all fees required to be paid
by the Issuer pursuant to the applicable Servicing Agreement;
f. performing all audits of records and accounts that the Issuer
from time to time may be permitted or required to perform
under the Servicing Agreements;
g. preparing all other documents, reports, filings, instruments,
certificates and opinions as it is the duty of the Issuer to
prepare, file or deliver pursuant to the Servicing Documents;
h. in the event of the default of any Servicer under any
Servicing Agreement, or default of any other party to any
other Basic Document, taking all reasonable steps available to
enforce the Issuer's rights under such documents in respect of
such default;
SECTION 4. TRANSFER AGREEMENT. The Administrator shall take the actions
necessary to cause the duties of the Issuer to be carried out under the
provisions of the Transfer Agreement and any of the rights or obligations
thereunder. The Administrator also shall enforce the rights of the Issuer under
the applicable provisions of the Transfer Agreement to require the Depositor to
repurchase certain Student Loans that have been transferred to the Issuer,
including but not limited to providing notice to the applicable Servicer of each
such repurchase request, endorsing to the Servicer each Student Loan to be
repurchased by the Depositor and taking all other actions necessary to enforce
the Issuer's rights of recourse against the Depositor.
SECTION 5. HIGHER EDUCATION ACT. The Administrator shall take the
actions that are necessary to cause the Issuer to comply with the requirements
of the Higher Education Act and the applicable Guarantee Agencies with respect
to the Student Loans acquired by the Issuer.
SECTION 6. OTHER DUTIES WITH RESPECT TO THE INDENTURE AND SERVICING
DOCUMENTS.
a. In addition to the duties of the Administrator set forth above, the
Administrator shall perform such calculations and shall prepare for execution by
the Issuer or shall cause the preparation by other appropriate persons of 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
Indenture or the Servicing Documents, and shall take all appropriate action that
it is the duty of the Issuer to take
5
<PAGE> 9
pursuant to the Indenture or the Servicing Documents. The Administrator shall
administer, perform or supervise the performance of such other activities in
connection with the trust estate of the Indenture (including the Servicing
Documents) as the Issuer is obligated to perform and are not covered by any of
the foregoing provisions and as are reasonably within the capability of the
Administrator.
b. In carrying out the foregoing duties or any of its other obligations
under this Agreement, the Administrator may enter into transactions with or
otherwise deal with any of its Affiliates; PROVIDED that the terms of any such
transactions or dealings shall be, in the Administrator's opinion, no less
favorable to the Issuer than would be available from unaffiliated parties.
SECTION 7. OTHER ADMINISTRATIVE SERVICES. The Issuer hereby authorizes
the Administrator, as its agent, to perform, and the Administrator hereby agrees
to perform, all administrative services necessary or desirable in connection
with the Issuer's existence as a bankruptcy-remote Delaware common law trust
holding the assets described hereunder, including but not limited to the
following:
a. subject to the directions of the authorized representatives of
the Issuer, carrying out and performing the day to day
business activities of the Issuer;
b. providing, or causing to be provided, all clerical and
bookkeeping services necessary and appropriate for the Issuer,
including, without limitation, the following services:
(i) maintaining general accounting records of the Issuer,
and preparing for audit such periodic financial
statements as may be necessary or appropriate;
(ii) maintaining records of deposit accounts of the Issuer
established under the Indenture and the Servicing
Documents or otherwise, authorizing withdrawals from
such accounts on behalf of the Issuer and taking all
other actions on behalf of the Issuer as may be
necessary with respect to such accounts;
(iii) (A) preparing for execution by the Issuer and causing
to be filed on behalf of the Issuer such income,
franchise or other tax returns of the Issuer as shall
be required to be filed by applicable law, and (B)
causing to be paid by the Issuer, solely out of funds
of the Issuer, any taxes required to be paid by the
Issuer by applicable law;
(iv) assisting in preparing for execution by the Issuer
amendments to and waivers under the Servicing
Documents and any other documents or instruments
deliverable by the Issuer thereunder or in connection
therewith;
6
<PAGE> 10
(v) holding, maintaining and preserving executed copies
of the Servicing Documents (to the extent applicable)
and other documents or instruments executed by the
Issuer thereunder or in connection therewith;
(vi) assisting in giving such other notices, consents and
other communications that the Issuer may from time to
time be required or permitted to give under any of
the Servicing Documents or other documents executed
by the Issuer thereunder or in connection therewith;
(vii) facilitating the annual audit of the financial
statements of the Issuer; and
(viii) taking such other actions as may be incidental or
reasonably necessary to accomplish the actions of the
Administrator authorized under this subsection b;
c. assisting the Issuer in carrying out the investment and
reinvestment of the funds of the Issuer in accordance with
applicable investment policies; and
d. undertaking such other administrative services as may be
required by the Issuer.
If the Administrator or the Issuer deems it necessary or desirable, any
of the foregoing administrative services may be subcontracted by the
Administrator. Costs and expenses associated with such subcontracting incurred
by the Administrator shall be paid by the Issuer in accordance with Section 11
hereof.
SECTION 8. EXCEPTIONS. Notwithstanding anything to the contrary in this
Agreement, the Administrator shall not be obligated to, and shall not, (1) make
any payments to the holder of the Notes issued under the Indenture, (2) sell the
trust estates of the Indenture to unrelated third parties, or (3) take any other
action that the Issuer directs the Administrator not to take on its behalf.
SECTION 9. EMPLOYEES; OFFICES. All services to be furnished by the
Administrator under this Agreement may be furnished by an officer or employee of
the Administrator or any other person or agent designated or retained by the
Administrator.
The Administrator agrees to provide office space, together with
appropriate materials and any necessary support personnel, for performing the
day to day business activities of the Issuer, all for the compensation provided
in Section 11 hereof.
SECTION 10. NON-MINISTERIAL MATTERS. With respect to matters that in
the reasonable judgment of the Administrator are non-ministerial, the
Administrator shall not take any action unless within a reasonable time before
the taking of such action, the Administrator shall have notified the Issuer of
the proposed action and the Issuer shall not have withheld consent or provided
an
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<PAGE> 11
alternative direction. For the purpose of the preceding sentence,
"non-ministerial matters" shall include:
a. the amendment of or any supplement to the Indenture;
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 (other than in connection with the
collection of the Student Loans);
c. the amendment, change or modification of the Servicing
Documents;
d. the appointment of successor Indenture Trustee pursuant to the
Indenture or the appointment of successor administrators or
successor servicers, or the consent to the assignment by the
Indenture Trustee of its obligations under the Indenture; and
e. the removal of the Indenture Trustee.
SECTION 11. COMPENSATION. On or before the last day of each month (the
"Payment Date"), the Issuer shall pay to the Administrator, as compensation for
its services specified hereunder, a fee in the amount of .25% (on a per annum
basis) of the aggregate principal amount of the assets of the Issuer subject to
this Administration Agreement. The monthly fee will be determined on the basis
of the aggregate outstanding principal amount of assets of the Issuer subject to
the Administration Agreement as of the first day of the month of such Payment
Date. If at any time the Issuer requests the Administrator to perform any
additional services not specified hereunder, the Issuer shall pay the
Administrator such additional fees in respect thereof as shall be agreed to by
the Issuer and the Administrator. The Issuer agrees to reimburse the
Administrator for all reasonable expenses, disbursements and advances incurred
or made by the Administrator in connection with the performance of this
Agreement, including, but not limited to, the fees and expenses of
subcontracting, any independent accountants and outside counsel, which
reimbursement shall relate to amounts incurred in a calendar month and shall be
payable by the Issuer to the Administrator on the next succeeding Payment Date.
The Issuer and the Administrator agree that payments to the
Administrator shall be made out of the Collection Fund held under the Indenture.
SECTION 12. REPRESENTATIONS AND WARRANTIES OF THE ISSUER. The Issuer
makes the following representations:
a. CREATION. The Issuer is duly created and validly existing with the
power and authority to own its properties and to conduct its business as such
properties are currently owned and such business is presently conducted.
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<PAGE> 12
b. POWER AND AUTHORITY. The Issuer has the power and authority to
execute and deliver this Agreement and to carry out its terms, and the
execution, delivery and performance of this Agreement have been duly authorized
by the Issuer by all necessary action.
c. BINDING OBLIGATION. This Agreement constitutes a legal, valid and
binding obligation of the Issuer enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization and similar laws
relating to creditors' rights generally and subject to general principles of
equity.
d. NO PROCEEDINGS. There are no proceedings or investigations pending
against the Issuer or, to its best knowledge, threatened against the Issuer,
before any court, regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Issuer or its properties: (i)
asserting the invalidity of this Agreement, (ii) seeking to prevent the
consummation of any of the transactions contemplated by this Agreement or (iii)
seeking any determination or ruling that could reasonably be expected to have a
material and adverse effect on the performance by the Issuer of its obligations
under, or the validity or enforceability of, this Agreement.
e. ALL CONSENTS. All authorizations, consents, orders or approvals of
or registrations or declarations with any court, regulatory body, administrative
agency or other governmental instrumentality required to be obtained, effected
or given by the Issuer in connection with the execution and delivery by the
Issuer of this Agreement and the performance by the Issuer of the transactions
contemplated by this Agreement have been duly obtained, effected or given and
are in full force and effect.
SECTION 13. REPRESENTATIONS AND WARRANTIES OF THE ADMINISTRATOR. The
Administrator makes the following representations:
a. ORGANIZATION AND GOOD STANDING. The Administrator is duly organized
and validly existing and in good standing in its State of incorporation with the
power and authority to own its properties and to conduct its business as such
properties are currently owned and such business is presently conducted.
b. POWER AND AUTHORITY. The Administrator has the corporate power and
authority to execute and deliver this Agreement and to carry out its terms, and
the execution, delivery and performance of this Agreement have been duly
authorized by the Administrator by all necessary corporate action.
c. BINDING OBLIGATION. This Agreement constitutes a legal, valid and
binding obligation of the Administrator enforceable in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization and similar
laws relating to creditors' rights generally and subject to general principles
of equity.
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<PAGE> 13
d. NO PROCEEDINGS. There are no proceedings or investigations pending
against the Administrator or, to its best knowledge, threatened against the
Administrator, before any court, regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Administrator or its
properties: (i) asserting the invalidity of this Agreement, (ii) seeking to
prevent the consummation of any of the transactions contemplated by this
Agreement or (iii) seeking any determination or ruling that could reasonably be
expected to have a material and adverse effect on the performance by the
Administrator of its obligations under, or the validity or enforceability of,
this Agreement.
e. ALL CONSENTS. All authorizations, consents, orders or approvals of
or registrations or declarations with any court, regulatory body, administrative
agency or other governmental instrumentality required to be obtained, effected
or given by the Administrator in connection with the execution and delivery by
the Administrator of this Agreement and the performance by the Administrator of
the transactions contemplated by this Agreement have been duly obtained,
effected or given and are in full force and effect.
SECTION 14. TERM. Subject to the terms hereof, the Administrator may
resign at any time. The Administrator or the Issuer may terminate this Agreement
upon at least 45 days' prior written notice to the other party. Notwithstanding
the foregoing, no resignation or termination shall be effective until 45 days
after written notice has been delivered to the Indenture Trustee and the
Administrative Agent under the Indenture.
SECTION 15. OBLIGATION TO SUPPLY INFORMATION. The Issuer shall prepare
and supply, or cause the other parties to the Indenture or the Servicing
Documents to prepare and supply, the Administrator with such information
regarding the performance of the Indenture or the Servicing Documents as the
Administrator may from time to time reasonably request in connection with the
performance of its obligations hereunder.
SECTION 16. LIABILITY OF ADMINISTRATOR. The Administrator shall be
liable in accordance herewith only to the extent of the obligations specifically
undertaken by the Administrator under this Agreement.
The Administrator shall indemnify, defend and hold harmless the Issuer,
and all of the officers, directors, employees and agents of the Issuer, from and
against any and all costs, expenses, losses, claims, damages and liabilities to
the extent that any such cost, expense, loss, claim, damage or liability arose
out of, or was imposed upon the Issuer through, the gross negligence, willful
misfeasance or bad faith of the Administrator in the performance of its duties
under this Agreement or by reason of reckless disregard of its obligations and
duties hereunder or thereunder. The Issuer shall notify the Administrator
promptly of any claim for which it may seek indemnity. The Administrator shall
defend the claim and the Administrator shall not be liable for the legal fees
and expenses of the Issuer after it has assumed such defense.
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<PAGE> 14
For purposes of this Section 16, in the event of the termination of the
rights and obligations of the Administrator (or any successor thereto pursuant
to Section 20 hereof) pursuant to Section 14 hereof or the resignation by such
Administrator pursuant to this Agreement, unless the Issuer elects not to
appoint a successor Administrator, such Administrator shall be deemed to be the
Administrator pending appointment of a successor Administrator pursuant to
Section 20 hereof.
Indemnification under this Section 16 shall survive the termination of
this Agreement and shall include reasonable fees and expenses of counsel and
expenses of litigation. If the Administrator has made any indemnity payments
pursuant to this Section 16 and the Issuer thereafter collects any of such
amounts from others, the Issuer promptly shall repay such amounts to the
Administrator, without interest.
Neither the Administrator nor any of its directors, officers, employees
or agents shall be under any liability to the Issuer except as provided under
this Agreement for any action taken or for refraining from the taking of any
action pursuant to this Agreement or for errors in judgment; PROVIDED that these
provisions shall not protect the Administrator or any such person against any
liability that would otherwise be imposed by reason of willful misfeasance, bad
faith or negligence in the performance of duties or by reason of reckless
disregard of obligations and duties under this Agreement. The Administrator and
any of its directors, officers, employees or agents may rely in good faith on
the advice of counsel or on any document of any kind, prima facie properly
executed and submitted by any person respecting any matters arising hereunder.
Except as provided in this Agreement, the Administrator shall not be
under any obligation to appear in, prosecute or defend any legal action that
shall not be incidental to its duties hereunder and that in its opinion may
involve it in any expense or liability; PROVIDED that the Administrator may
undertake any reasonable action that it may deem necessary or desirable in
respect of this Agreement, the Indenture, the Transfer Agreement and the
Servicing Documents and the rights and duties of the parties to this Agreement,
the Indenture, the Transfer Agreement and the Servicing Documents and the
interests of the holders of the Notes under the Indenture.
SECTION 17. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, THE ADMINISTRATOR. Any person (a) into which the Administrator
may be merged or consolidated, (b) which may result from any merger or
consolidation to which the Administrator shall be a party or (c) which may
succeed to the properties and assets of the Administrator substantially as a
whole, shall be the successor to the Administrator hereunder without the
execution or filing of any documents or any further act by any of the parties
to this Agreement; PROVIDED that the Administrator hereby covenants that, if
the surviving Administrator is other than Student Loan Funding Resources, Inc.
or an Affiliate, it will not consummate any of the foregoing transactions
except upon satisfaction of the following: (i) the surviving Administrator
executes an agreement of assumption to perform every obligation of the
Administrator under this Agreement, (ii) immediately after giving effect to
such transaction, no representation or warranty made pursuant to Section 13 has
been breached and no Administrator Default, and no event that, after notice or
lapse of time, or both, would become an Administrator Default has occurred and
is continuing, (iii) the surviving Administrator has delivered
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to the Indenture Trustee a certificate of an officer of the surviving
Administrator and an opinion of counsel each stating that such consolidation,
merger or succession and such agreement of assumption comply with this section
and that all conditions precedent, if any, provided for in this Agreement
relating to such transaction have been complied with, and (iv) such transaction
will not result in a material adverse Federal or state tax consequence to the
holders of Notes under the Indenture. Anything in this Section 17 to the
contrary notwithstanding, the Administrator may at any time assign its rights,
obligations and duties under this Agreement to an Affiliate.
SECTION 18. ADMINISTRATOR DEFAULT. The occurrence and continuance of
any one of the following events shall constitute an "Administrator Default":
a. any act or omission by the Administrator that results in a failure
to pay principal or interest or Carryover Interest on the Notes when such
principal or interest Carryover Interest becomes due and payable in accordance
with the Notes and the Indenture;
b. any failure by the Administrator duly to observe or to perform in
any material respect any covenant or agreement of the Administrator set forth in
this Agreement, which failure continues unremedied for a period of 30 days after
the date on which written notice of such failure has been given to the
Administrator by the Issuer;
c. (i) having entered involuntarily against it an order for relief
under the Bankruptcy Code of 1978, as amended, (ii) not paying, or admitting in
writing its inability to pay, its debts generally as they become due or
suspending payment of its obligations, (iii) making an assignment for the
benefit of creditors, (iv) applying for, seeking, consenting to, or acquiescing
in, the appointment of a receiver, custodian, trustee, conservator, liquidator
or similar official for it or any substantial part of its property, (v)
instituting any proceeding seeking to have entered against it an order for
relief under the Bankruptcy Code of 1978, as amended, to adjudicate it
insolvent, or seeking dissolution, winding up, liquidation, reorganization,
arrangement, marshaling of assets, adjustment or composition of it or its debts
under any law relating to bankruptcy, insolvency or reorganization, or relief of
debtors or failing to file an answer or other pleading denying the material
allegations of any such proceeding filed against it, (vi) failing to contest in
good faith any appointment or proceeding described in Section 18(d) hereof or
(vii) taking any action in furtherance of any of the foregoing purposes; or
d. the appointment of a custodian, receiver, trustee, conservator,
liquidator or similar official for the Administrator or any substantial part of
the property of the Administrator, or the institution of a proceeding described
in Section 18(c)(v) against the Administrator, which appointment continues
undischarged or which proceeding continues undismissed or unstayed for a period
of 60 or more days.
In the case of any Administrator Default, so long as such Administrator
Default has not been remedied, the Issuer or the Indenture Trustee shall, by
written notice to the Administrator of such Administrator Default, terminate all
of the rights and obligations (other than the obligations set forth
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<PAGE> 16
in Section 16) of the Administrator under this Agreement with respect to such
Indenture. On or after the receipt by the Administrator of such written notice,
all authority and power of the Administrator under this Agreement shall, without
further action, be carried out by the Issuer or shall pass to and be vested in
such successor Administrator as may be appointed under Section 19; and, without
limitation, the Issuer is hereby authorized and empowered to execute and
deliver, for the benefit of the predecessor Administrator, as attorney-in-fact
or otherwise, any and all documents and other instruments, and to do or
accomplish all other acts or things necessary or appropriate to effect the
purposes of such notice of termination. The predecessor Administrator shall
cooperate with the successor Administrator in effecting the termination of the
responsibilities and rights of the predecessor Administrator under this
Agreement. All reasonable costs and expenses (including attorneys' fees)
incurred in connection with amending this Agreement to reflect such succession
as Administrator pursuant to this Section 18 shall be paid by the predecessor
Administrator upon presentation of reasonable documentation of such costs and
expenses.
SECTION 19. APPOINTMENT OF SUCCESSOR.
a. Upon receipt by the Administrator of notice of termination pursuant
to Section 14, or the resignation by the Administrator in accordance with the
terms of this Agreement, the predecessor Administrator shall continue to perform
its functions as Administrator under this Agreement, in the case of termination,
only until the date specified in such termination notice or, if no such date is
specified in a notice of termination, until receipt of such notice and, in the
case of resignation, until the date a successor Administrator is appointed by
the Issuer. In the event of the termination or resignation hereunder of the
Administrator, the Issuer may appoint a successor Administrator. Any such
successor Administrator shall accept its appointment by a written assumption.
b. Upon appointment, the successor Administrator shall be the successor
in all respects to the predecessor Administrator and shall be subject to all of
the responsibilities, duties and liabilities placed on the predecessor
Administrator that arise thereafter or are related thereto and shall be entitled
to payment of compensation in accordance with the terms of this Agreement, or
such other terms as are agreed to by the Issuer, and all of the rights granted
to the predecessor Administrator by the terms and provisions of this Agreement.
SECTION 20. RELIANCE ON INFORMATION OBTAINED FROM THIRD PARTIES. The
Issuer recognizes that the accuracy and completeness of the records maintained
and the information supplied by the Administrator hereunder is dependent upon
the accuracy and completeness of the information obtained by the Administrator
from the parties to the Indenture and the Servicing Documents and other sources
and the Administrator shall not be responsible for any inaccuracy in the
information so obtained or for any inaccuracy in the records maintained by the
Administrator hereunder which may result therefrom.
SECTION 21. NOTICES. All notices, demands, instructions and other
communications required or permitted to be given to or made upon either party
hereto shall be in writing (including
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by facsimile transmission) and shall be personally delivered or sent by
guaranteed overnight delivery or by facsimile transmission (to be followed by
personal or guaranteed overnight delivery) and shall be deemed to be given for
purposes of this Agreement on the date that such writing is received by the
intended recipient thereof in accordance with the provisions of this Section 21.
Unless otherwise specified in a notice sent or delivered in accordance with the
foregoing provisions of this Section 21, notices, demands, instructions and
other communications in writing shall be given to or made upon the respective
parties thereto at their respective addresses as follows:
The Issuer:
Firstar Bank, National Association, as Co-Owner Trustee
of Student Loan Funding 1999-A/B Trust
425 Walnut Street
ML5125 P.O. Box 1118
Cincinnati, Ohio 45202-1118
The Administrator:
Student Loan Funding Resources, Inc.
One West Fourth Street, Suite 200
Cincinnati, Ohio 45202
Attention: Treasurer
SECTION 22. AMENDMENT. This Agreement may be amended in writing by the
Administrator and the Issuer. Promptly after the execution of any such
amendment, the Administrator shall furnish written notification of the substance
of such amendment to the Indenture Trustee.
SECTION 23. ASSIGNMENT. Except as provided in Section 17 hereof or as
contemplated by the Indenture, this Agreement may not be assigned by either
party hereto without the prior written consent of the other party.
SECTION 24. INDEPENDENCE OF ADMINISTRATOR. For all purposes of this
Agreement, the Administrator shall be an independent contractor. Unless
expressly authorized by the Issuer, the Administrator shall have no authority to
act for or represent the Issuer in any way and shall not otherwise be deemed an
agent of the Issuer.
SECTION 25. NO JOINT VENTURE. Nothing contained in this Agreement shall
constitute the Issuer and the Administrator as members of any partnership, joint
venture, association, syndicate, unincorporated business or other separate
entity or shall be deemed to confer on either of them any express, implied or
apparent authority to incur any obligation or liability on behalf of the other.
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SECTION 26. OTHER ACTIVITIES OF ADMINISTRATOR. Nothing herein shall
prevent the Administrator or its Affiliates from engaging in other business 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.
SECTION 27. NO PETITION. The Administrator covenants and agrees that,
notwithstanding the termination of this Agreement, the Administrator will not
institute against, or join in instituting against the Issuer, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding, or other
proceeding under any Federal or state bankruptcy or similar law ordering the
winding up or liquidation of the Issuer's affairs or appointing a receiver,
liquidator, trustee, or other similar official, of the Issuer or any substantial
part of its property, for one year and a day after the termination of this
Agreement. This Section 27 shall survive the termination of this Agreement.
SECTION 28. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Ohio, without regard to
its conflict of law provisions.
SECTION 29. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties hereto with respect to the matters covered hereby
and supersedes all prior agreements and understandings between the parties.
SECTION 30. SUCCESSORS; COUNTERPARTS.
a. This Agreement shall be binding upon, inure to the benefit of and be
enforceable by the respective successors and assigns of each of the Issuer and
the Administrator.
b. This Agreement may be executed in several counterparts, each of
which shall be deemed an original hereof and all of which taken together shall
constitute one and the same instrument.
SECTION 31. CAPTIONS. The captions in this Agreement are for
convenience of reference only and shall not define or limit any of the terms
or provisions hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
STUDENT LOAN FUNDING 1999-A/B TRUST
By Firstar Bank, National Association , not
in its individual capacity, but solely as
Co-Owner Trustee, on behalf of the Issuer
By: /s/ Brain J. Gardner
Name: Brian J. Garnder
Title: Vice President and Trust Officer
STUDENT LOAN FUNDING RESOURCES, INC.
as Administrator
By: /s/ Perry D. Moore
Name: Perry D. Moore
Title: Senior Vice President and
Chief Financial Officer
Firstar Bank, National Association, as the Eligible Lender Trustee
under the Indenture, hereby agrees to take such actions and execute such
documents as may be reasonably requested by the Administrator in order for the
Administrator to provide the services and perform its duties and
responsibilities under the foregoing Agreement.
Firstar Bank, National Association,
as Eligible Lender Trustee
By: /s/ Brain J. Gardner
Name: Brian J. Gardner
Title: Vice President and Trust Officer
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Firstar Bank, National Association, as the Indenture Trustee under the
Indenture, hereby agrees to take such actions and execute such documents as may
be reasonably requested by the Administrator in order for the Administrator to
provide the services and perform its duties and responsibilities under the
foregoing Agreement.
Firstar Bank, National Association,
as Indenture Trustee
By: /s/ Brain J. Gardner
Name: Brian J. Gardner
Title: Vice President and Trust Officer
<PAGE> 1
EXHIBIT 10.2
ELIGIBLE LENDER TRUST AGREEMENT
This Eligible Lender Trust Agreement (the "Agreement") is entered into as
of October 1, 1999 (the "Effective Date"), between STUDENT LOAN FUNDING 1999-A/B
TRUST (the "Issuer") and FIRSTAR BANK, NATIONAL ASSOCIATION, as eligible lender
trustee (the "Eligible Lender Trustee") for the benefit of the Issuer. All
references to the Issuer or Student Loan Funding 1999-A/B Trust shall be deemed
to be references to FIRSTAR BANK, NATIONAL ASSOCIATION, not in its individual
capacity, but solely as Co-owner Trustee (the "Co-Owner Trustee") under the
Trust Agreement dated as of October 1, 1999 (the "Trust Agreement").
WITNESSETH:
WHEREAS, the Eligible Lender Trustee is an "eligible lender" under the
Higher Education Act; and
WHEREAS, the Issuer desires the Eligible Lender Trustee to hold all of the
Issuer's right, title and interest in and to certain Financed Student Loans in
trust for the benefit of the Issuer upon the transfer and sale of such Financed
Student Loans to the Issuer;
WHEREAS, such Financed Student Loans are, and upon transfer to the Eligible
Lender Trustee will continue to be, pledged to secure payment of certain Student
Loan Senior LIBOR Rate Notes, Series 1999A and Student Loan Subordinate LIBOR
Rate Notes, Series 1999B-1 under the Indenture (as defined in Section 2.3
hereof); and
WHEREAS, in order to consummate the transactions contemplated by the Trust
Agreement, the parties hereto desire and intend to create the trusts set forth
herein and the Eligible Lender Trustee agrees to be charged with and accept its
trusts and duties set forth in this Agreement;
NOW, THEREFORE, for and in consideration of the mutual covenants contained
herein the parties hereto hereby agree as follows:
ARTICLE I
CREATION OF TRUST FOR BENEFIT OF THE ISSUER AND
AUTHORITY TO ENTER INTO AND
EXECUTE DOCUMENTS; ACCEPTANCE OF TRUST
SECTION 1.1. PURPOSE. The trust created by Article I of this Agreement is
formed, entered into and intended by the Issuer and the Eligible Lender Trustee
to create a trust for the purpose of (a) the Eligible Lender Trustee holding all
right, title and interest to the Financed Student Loans for the benefit of the
Issuer (b) the Eligible Lender Trustee entering into, and complying with, the
<PAGE> 2
terms of any agreement, document or certificate required under the Trust
Agreement and this Agreement and (c) the Eligible Lender Trustee complying with
the requirements of the Higher Education Act, if applicable.
SECTION 1.2. CREATION AND ACCEPTANCE OF TRUST FOR THE BENEFIT OF THE
ISSUER. The Issuer may from time to time cause title to the Financed Student
Loans to be conveyed to the Eligible Lender Trustee; which Financed Student
Loans shall be held, administered and pledged and the proceeds thereof
distributed by the Eligible Lender Trustee for the benefit of the Issuer as set
forth in the Indenture, the Trust Agreement and herein. At the request of the
Issuer hereunder, the Eligible Lender Trustee hereby agrees to accept and hold
title to such Financed Student Loans (without liability or responsibility at
acceptance for the condition or validity of such right, title and interest) in
trust, as hereinafter set forth for the use and benefit of the Issuer.
SECTION 1.3. AUTHORITY TO ENTER INTO AND EXECUTE DOCUMENTS.
(a) The Issuer hereby authorizes and directs the Eligible Lender Trustee to
enter into, execute and deliver any and all agreements, documents and
certificates which may be required in connection with performing its duties and
obligations with respect to the Financed Student Loans under this Agreement
including, without limitation, the Trust Agreement, the Transfer Agreement and
the Indenture.
(b) The Issuer hereby authorizes and directs the Eligible Lender Trustee to
enter into, execute and deliver, from time to time as the Issuer may request,
any and all agreements, documents or certificates which may be required in
connection with the Trust Agreement, including, without limitation, the
Transaction Documents, Servicing Agreements or Federal Loan Program Documents,
with respect to the Financed Student Loans held on behalf of the Issuer under
this Agreement.
SECTION 1.4. DUTIES OF THE ELIGIBLE LENDER TRUSTEE. The Eligible Lender
Trustee, by the execution hereof, covenants, represents and agrees that:
(a) it shall accept and hold as herein set forth all such right, title and
interest to the Financed Student Loans that are transferred and assigned to it
at the request of the Issuer;
(b) it is, and shall be, an "eligible lender" as defined in 20 U.S.C.
ss.1085(d) under the Higher Education Act;
(c) it shall enter into and maintain a Contract of Guarantee with each
Guarantor;
(d) if requested by the Issuer (with respect to the Financed Student Loans
held on behalf of the Issuer under this Agreement) in a reasonably detailed
writing that sets forth sufficient information and instructions, it shall
execute, deliver and perform Federal Loan Program Documents, Servicing
Agreements, Transaction Documents, and all other agreements, documents
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or certificates required under the Trust Agreement and any other agreements,
instruments, or documents relating, directly or indirectly, to the making,
acquisition or consolidation of the Financed Student Loans or the servicing,
administration, sale, exchange, assignment or transfer of the Financed Student
Loans;
(e) it shall sell, exchange or otherwise deal with such Financed Student
Loans in accordance with the Trust Agreement and the Indenture;
(f) it shall enter into, and thereafter comply with the terms thereof, any
agreement or other document relating to the Trust Agreement and take such
actions as are necessary and reasonably requested to convey, transfer, assign,
pledge and grant a lien on and a security interest in all of its right, title
and interest in and to the Financed Student Loans in accordance with the
Indenture;
(g) it shall take such actions, at the request of the Issuer as are
necessary or appropriate in order for the Issuer to obtain the full value and
benefits of the Financed Student Loans under this Agreement, the Indenture and
the Trust Agreement;
(h) it shall hold all data, materials and information pertaining to the
Financed Student Loans confidential, and it agrees not to use such data,
materials or information for any purpose other than for the limited purpose of
performing its obligations under this Agreement or the Trust Agreement; and
(i) following the discharge or other termination of the transactions
contemplated by the Indenture and the Trust Agreement, it shall (i) continue to
hold all right, title and interest in and to the Financed Student Loans for the
benefit of the Issuer pursuant to the terms and conditions of this Agreement
until otherwise directed by the Issuer and (ii) shall execute such agreements
and documents as requested by the Issuer providing for the administration of and
receipt by the Issuer of the cash flows and other interests in such Financed
Student Loans.
SECTION 1.5. DUTIES OF THE ISSUER. The Issuer, by the execution hereof,
covenants, represents and agrees that:
(a) it shall accept, hold and maintain the beneficial interest in each
Financed Student Loan free of any claims, liens or encumbrances, except the
rights of the Eligible Lender Trustee and any trustee or other secured party
under the Indenture;
(b) it shall promptly take all necessary actions to perform its obligations
hereunder and to support the Eligible Lender Trustee, in the prompt and full
performance of its obligations hereunder.
SECTION 1.6. ACCEPTANCE OF DUTIES. The Eligible Lender Trustee accepts the
trusts hereby created and agrees to perform the duties and only the duties
specifically set forth in this
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Agreement, and no implied covenants or obligations shall be read into the trust
created hereby against the Eligible Lender Trustee. The Eligible Lender Trustee
shall not be answerable or accountable under any circumstances except for its
gross negligence or willful misconduct.
SECTION 1.7. RELIANCE ON CERTAIN DOCUMENTS, OTHER PERSONS. The Eligible
Lender Trustee shall not incur any liability 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. In the
administration of its duties hereunder, the Eligible Lender Trustee may execute
any of the trusts or powers hereof and perform its powers and duties hereunder
directly or through other agents or attorneys and may, at the expense of the
Issuer seek advice of counsel, accountants and other skilled persons to be
selected and employed by it, and the Eligible Lender 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.
SECTION 1.8. SECURITY FOR ACTION. No provision hereof shall require the
Eligible Lender Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder, or in the
exercise of any of its rights or powers if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against such risk
or liability is not reasonably assured to it.
SECTION 1.9. CAPACITY. In accepting the trust hereby created, the Eligible
Lender Trustee acts solely as trustee hereunder and not in its individual
capacity.
SECTION 1.10. COMPENSATION. The Issuer shall pay to the Eligible Lender
Trustee from time to time reasonable compensation for all services rendered by
it hereunder with respect to the Financed Student Loans held on behalf of the
Issuer under this Agreement, and also all of its reasonable expenses, charges,
and other disbursements and those of its attorneys, agents, and employees
incurred in and about the administration and execution of the trust hereby
created with respect to the Financed Student Loans held on behalf of the Issuer
under this Agreement. Such payment shall be made solely out of the Collection
Fund as defined in and held under the Indenture.
SECTION 1.11. QUALIFICATION. The Eligible Lender Trustee, including any
successor, shall at all times (a) be a trust company or bank having the powers
of a trust company within the state in which it is located, (b) be an "eligible
lender" as defined in 20 U.S.C. ss. 1085(d) under the Higher Education Act of
1965, as amended, and (c) have entered into, and maintain in force, a Contract
of Guarantee with each Guarantor.
SECTION 1.12. SUCCESSORS.
(a) The Eligible Lender Trustee or any successor thereto may resign at any
time without cause by giving at least 90 days' prior written notice, such
resignation to be effective upon
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the acceptance of the trusts created by Article I hereunder by any successor
Eligible Lender Trustee meeting the requirements of Section 1.11 hereof and
payment in full of all amounts due the Eligible Lender Trustee. In addition, the
Issuer may at any time remove the Eligible Lender Trustee with or without cause
by an instrument in writing delivered to the Eligible Lender Trustee, such
removal to be effective upon the acceptance of the trusts hereunder by a
successor Eligible Lender Trustee meeting the requirements of Section 1.11
hereof and payment in full of all amounts due the Eligible Lender Trustee. If no
successor Eligible Lender Trustee has been appointed within 90 days after notice
of resignation or removal, as the case may be, the Eligible Lender Trustee may
request a court of competent jurisdiction to (i) require the Issuer to appoint a
qualified successor Eligible Lender Trustee meeting the requirements of Section
1.11 hereof within 3 days of the receipt of citation or notice by the court, or
(ii) appoint a successor Eligible Lender Trustee meeting the requirements of
Section 1.11 hereof;
(b) Any successor Eligible Lender Trustee shall execute and deliver to the
predecessor Eligible Lender Trustee an instrument accepting such appointment
and, in cooperation with the predecessor Eligible Lender Trustee, shall take
such further actions to ensure (i) that title to the Financed Student Loans has
been assigned to such successor Eligible Lender Trustee and (ii) that the
beneficial interest of the Issuer in the Financed Student Loans is maintained;
thereupon such successor Eligible Lender Trustee, without further act, shall
become vested with all the estates, properties, rights, powers, duties and
trusts of the predecessor Eligible Lender Trustee in the trusts hereunder with
like effect as if originally named as the Eligible Lender Trustee herein;
(c) Any bank, corporation or other entity into which the Eligible Lender
Trustee may be merged or converted or with which it may be consolidated, or any
bank, corporation or other entity resulting from any merger, conversion or
consolidation to which the Eligible Lender Trustee shall be a party, or any
bank, corporation or other entity to which substantially all the corporate trust
business of the Eligible Lender Trustee may be transferred, shall be the
Eligible Lender Trustee under this Agreement without any further act, provided
the resulting bank, corporation or other entity meets the qualification
requirements of Section 1.11 hereof.
SECTION 1.13. SERVICING OF THE FINANCED STUDENT LOANS. The Issuer
acknowledges that pursuant to the Federal Loan Program, due diligence must be
used in the origination, servicing and collection of the Financed Student Loans
and collection practices must be used no less extensive and forceful than those
generally in use among financial institutions with respect to other consumer
debt. In fulfillment of these obligations, the Issuer has entered into a Master
Servicing Agreement with Student Loan Funding Resources, Inc. as Master
Servicer. The Issuer acknowledges that the Eligible Lender Trustee is not
required to monitor the actions taken by the Servicers. The Issuer will cause an
annual certification to be provided to the Eligible Lender Trustee that
servicing of the Financed Student Loans by the Servicers has been conducted in
accordance with the terms of the respective agreements that the Issuer or the
Master Servicer has with each Servicer.
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SECTION 1.14. INDEMNIFICATION BY THE ISSUER OF THE ELIGIBLE LENDER TRUSTEE.
The Issuer hereby agrees and does hereby indemnify and hold harmless the
Eligible Lender Trustee from and against any and all liabilities, obligations,
losses, damages, penalties, claims, actions, suits, costs, expenses or
disbursements (including legal fees and expenses) of any kind and nature
whatsoever which may be imposed on, incurred by or asserted against the Eligible
Lender Trustee in any way relating to or arising out of this Agreement or any
document, or the performance or enforcement of any of the terms of any provision
thereof, or in any way relating to or arising out of the administration of the
trust estate or the action or inaction of the Eligible Lender Trustee hereunder,
except only in the case of willful misconduct or gross negligence on the part of
the Eligible Lender Trustee in the performance of its duties hereunder;
provided, that the Issuer's indemnification with respect to each Financed
Student Loan shall be limited to the period of time that the Eligible Lender
Trustee holds such Financed Student Loans in trust on behalf of the Issuer. Such
indemnification shall be payable solely out of the Trust Estate as defined in
and held under the Indenture.
SECTION 1.15. TERMINATION. This Agreement and the trusts created hereby
shall terminate with respect to the Issuer, upon the sale, transfer, final
disposition, maturity, final payment or assignment by the Issuer of all Financed
Student Loans held by the Eligible Lender Trustee on behalf of the Issuer.
ARTICLE II
MISCELLANEOUS
SECTION 2.1. DEFINITIONS. Capitalized terms used herein shall have the same
meaning given below and if not given below shall have the same meaning given in
the Trust Agreement:
"CONSOLIDATION LOANS" shall mean the Financed Student Loans authorized
under Section 428C of the Higher Education Act of 1965, as amended, or any
successor provision.
"CONTRACT OF GUARANTEE" shall mean a contract with a Guarantor
providing for, or a certificate or other evidence of, the guarantee of the
Financed Student Loans.
"FEDERAL LOAN PROGRAM" shall mean a program that makes moneys
available for Federal Loans.
"FEDERAL LOAN PROGRAM DOCUMENTS" shall mean any agreement, document or
certificate relating to the terms and conditions of the Federal Loans under
a particular Federal Loan Program, including but not limited to any
Contract of Guarantee, and any amendments or supplements thereto.
"FEDERAL LOANS" shall mean Stafford Loans, PLUS Loans or Consolidation
Loans.
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"FINANCED STUDENT LOANS" shall mean Student Loans which become subject
to this Agreement.
"GUARANTEE" OR "GUARANTEED" shall mean, with respect to a Federal
Loan, the guarantee by the applicable Guarantor of the principal of and
accrued interest on such Federal Loan and the coverage of such Federal Loan
by a federal reinsurance agreement providing, among other things, for
reimbursement to the Guarantor for losses incurred by it on defaulted
Federal Loans guaranteed by the Guarantor as provided by the Higher
Education Act from time to time.
"GUARANTOR" shall mean any guarantee agency as is agreed to in writing
by the Issuer and the Eligible Lender Trustee with respect to the Financed
Student Loans held in trust by the Eligible Lender Trustee.
"HIGHER EDUCATION ACT" shall mean the Higher Education Act of 1965, as
amended from time to time, and all regulations and directives promulgated
thereunder from time to time.
"MASTER SERVICING AGREEMENT" shall mean the agreement dated as of
October 1, 1999, entered into between the Issuer and the Master Servicer.
"MASTER SERVICER" shall mean Student Loan Funding Resources, Inc.
"PLUS LOANS" shall mean the Financed Student Loans authorized under
Section 428B of the Higher Education Act of 1965, as amended, or any
successor provision.
"SERVICER" shall mean a servicing entity selected to provide servicing
of the Financed Student Loans, including but not limited to application
review, disbursement, collection, due diligence and claims services.
"SERVICING AGREEMENT" shall mean an agreement with a Servicer for the
servicing of the Financed Student Loans.
"STAFFORD LOANS" shall mean the Financed Student Loans authorized
under Section 427 and 428 of the Higher Education Act of 1965, as amended,
or any successor provision, including Unsubsidized Stafford Loans, but not
including PLUS Loans.
"STUDENT LOANS" shall mean loans made to or for the benefit of
students for the purpose of financing part or all of the costs of higher
education.
"TRANSACTION DOCUMENTS" shall mean any agreement, document or
certificate relating to the terms and conditions of the Trust Agreement,
including but not limited to
-7-
<PAGE> 8
an indenture of trust, security agreement, bailment agreement, UCC
financing statements, and any amendments or supplements thereto.
"TRANSFER AGREEMENT" means Transfer and Sale Agreement, dated as of
October 1, 1999, by and among Student Loan Funding Riverfront LLC
("Riverfront"), Firstar Bank, National Association as eligible lender
trustee for the benefit of Riverfront, the Issuer, the Eligible Lender
Trustee and Firstar Bank, National Association as indenture trustee (the
"Indenture Trustee") under the Indenture.
"UNSUBSIDIZED STAFFORD LOANS" shall mean student loans authorized
under Section 428H of the Higher Education Act of 1965, as amended, or any
successor provision.
SECTION 2.2. NOTICES. All notices shall be in writing, mailed by regular
mail, postage prepaid, (i) if to the Eligible Lender Trustee, addressed to
Firstar Bank, National Association, 425 Walnut Street, ML5125; P.O. Box 1118;
Cincinnati, Ohio 45201-1118, Attention: Corporate Trust Division, or to such
other address as may have been filed in writing with the Issuer; and (ii) if to
Issuer, addressed to Firstar Bank, National Association, 425 Walnut Street,
ML5125; P.O. Box 1118; Cincinnati, Ohio 45201-1118, Attention: Corporate Trust
Division, or to such other address as may have been filed by the Issuer in
writing.
SECTION 2.3. LENDER IDENTIFICATION NUMBER. The parties acknowledge that
Lender Identification Number ___________ shall be used in connection with the
Student Loans financed under the Indenture of Trust, together with the Terms
Supplement, each dated as of October 1, 1999, and each by and among the Issuer,
the Eligible Lender Trustee and the Indenture Trustee (the "Indenture") as the
same may be amended from time to time.
SECTION 2.4. PARTIAL INVALIDITY. Any provisions of this Agreement which are
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 2.5. AMENDMENT. No term or provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party or other person against whom enforcement of the
change, waiver, discharge or termination is sought; and any waiver of the terms
hereof shall be effective only in the specific instance and for the specific
purpose given.
SECTION 2.6. 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.
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<PAGE> 9
SECTION 2.7. TRUST BINDING UPON SUCCESSORS AND ASSIGNS. All covenants and
agreements contained herein shall be binding upon, and inure to the benefit of,
the Issuer and its successors and assigns and the Eligible Lender Trustee and
its permitted successors and assigns.
SECTION 2.8. 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 2.9. GOVERNING LAW AND PLACE OF ENFORCEMENT. This Agreement shall
be governed by, and construed in accordance with, the laws of the State of Ohio
and all suits and actions arising out of this Agreement shall be instituted in a
court of competent jurisdiction in the State of Ohio.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by a duly authorized officer as of the date first above written.
STUDENT LOAN FUNDING FIRSTAR BANK, NATIONAL
1999-A/B TRUST ASSOCIATION
By Firstar Bank, National Association, as Eligible Lender Trustee
not in its individual capacity,
but solely as Co-Owner Trustee,
of the Issuer
By: /s/ Brian J. Gardner By: /s/ Brian J. Gardner
Title: Vice President and Title: Vice President and
Trust Officer Trust Officer
-9-
<PAGE> 1
EXHIBIT 10.3
- --------------------------------------------------------------------------------
TRANSFER AND SALE AGREEMENT
BY AND AMONG
STUDENT LOAN FUNDING RIVERFRONT LLC,
A DELAWARE LIMITED LIABILITY COMPANY,
FIRSTAR BANK, NATIONAL ASSOCIATION,
NOT IN ITS INDIVIDUAL CAPACITY, BUT SOLELY IN ITS CAPACITY
AS ELIGIBLE LENDER TRUSTEE FOR THE BENEFIT OF STUDENT LOAN FUNDING HOLDINGS LLC
UNDER THE ELIGIBLE LENDER TRUST AGREEMENT,
FIRSTAR BANK, NATIONAL ASSOCIATION,
NOT IN ITS INDIVIDUAL CAPACITY, BUT SOLELY AS
CO-OWNER TRUSTEE OF
STUDENT LOAN FUNDING 1999-A/B TRUST
A DELAWARE COMMON LAW TRUST
AND
FIRSTAR BANK, NATIONAL ASSOCIATION,
NOT IN ITS INDIVIDUAL CAPACITY, BUT SOLELY AS CO-OWNER
ELIGIBLE LENDER TRUSTEE FOR THE BENEFIT OF
STUDENT LOAN FUNDING 1999-A/B TRUST
--------------------------------------------
DATED AS OF OCTOBER 1, 1999,
--------------------------------------------
<PAGE> 2
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
ARTICLE I SALE, TRANSFER AND ACCEPTANCE OF TRANSFERRED ASSETS.............................................2
1.01 SALE, TRANSFER AND ACCEPTANCE OF TRANSFERRED ASSETS.............................................2
1.02 CONSIDERATION FOR TRANSFER OF TRANSFERRED ASSETS................................................2
1.03 RELEASE OF DEPOSITOR AND DEPOSITOR ELIGIBLE LENDER TRUSTEE......................................3
ARTICLE II CLOSING.........................................................................................4
2.01 CLOSING.........................................................................................4
2.02 GENERAL PROCEDURE...............................................................................4
ARTICLE III REPRESENTATIONS AND WARRANTIES OF DEPOSITOR AND
DEPOSITOR ELIGIBLE LENDER TRUSTEE.........................................................................5
3.01 FORMATION AND AUTHORITY.........................................................................5
3.02 EXECUTION, DELIVERY; VALID AND BINDING AGREEMENT................................................5
3.03 AUTHORITY; NO BREACH............................................................................5
3.04 BROKERAGE.......................................................................................6
3.05 REGARDING THE FINANCED STUDENT LOANS............................................................6
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF TRUST AND CO-
OWNER ELIGIBLE LENDER TRUSTEE.............................................................................9
4.01 AUTHORITY UNDER TRUST...........................................................................9
4.02 EXECUTION, DELIVERY; VALID AND BINDING AGREEMENT................................................9
4.03 AUTHORITY; NO BREACH............................................................................9
ARTICLE V COVENANTS OF DEPOSITOR.........................................................................10
5.01 REGARDING CLOSING CONDITIONS...................................................................10
5.02 REGARDING THE HIGHER EDUCATION ACT.............................................................10
5.03 CONDITIONS PRECEDENT TO REPURCHASE OBLIGATION..................................................10
5.04 REPURCHASE BY DEPOSITOR........................................................................10
5.05 REGARDING TAX MATTERS..........................................................................11
ARTICLE VI COVENANTS OF TRUST AND THE CO-OWNER ELIGIBLE
LENDER TRUSTEE ..........................................................................................12
6.01 REGARDING CLOSING CONDITIONS...................................................................12
6.02 REGARDING THE HIGHER EDUCATION ACT AND THE FINANCED STUDENT LOANS..............................12
6.03 REGARDING TAX MATTERS..........................................................................12
6.04 RESTRICTIONS REGARDING BANKRUPTCY..............................................................12
ARTICLE VII CONDITIONS TO CLOSING..........................................................................13
7.01 CONDITIONS TO CLOSING..........................................................................13
ARTICLE VIII TERMINATION....................................................................................15
8.01 TERMINATION....................................................................................15
8.02 EFFECT OF TERMINATION..........................................................................15
ARTICLE IX SURVIVAL; INDEMNIFICATION......................................................................16
9.01 SURVIVAL.......................................................................................16
9.02 INDEMNIFICATION BY THE DEPOSITOR...............................................................16
9.03 INDEMNIFICATION BY TRUST.......................................................................16
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
<S> <C> <C>
9.04 LEGAL PROCEEDINGS..............................................................................16
ARTICLE X MISCELLANEOUS..................................................................................17
10.01 EXPENSES.......................................................................................17
10.02 FURTHER ASSURANCES.............................................................................17
10.03 AMENDMENT AND WAIVER...........................................................................17
10.04 NOTICES........................................................................................17
10.05 ASSIGNMENT.....................................................................................17
10.06 SEVERABILITY...................................................................................18
10.07 COMPLETE AGREEMENT.............................................................................18
10.08 COUNTERPARTS...................................................................................18
10.09 GOVERNING LAW..................................................................................18
</TABLE>
EXHIBIT A - Glossary of Defined Terms
EXHIBIT B - Administration Agreement
EXHIBIT C - Master Servicing Agreement
EXHIBIT D - Schedule of Applicable Depositor Indentures of Trust
<PAGE> 4
TRANSFER AND SALE AGREEMENT
This TRANSFER AND SALE AGREEMENT (the "Agreement"), dated as of October
1, 1999, is made and entered into by and among STUDENT LOAN FUNDING RIVERFRONT
LLC, a Delaware limited liability company (the "Depositor"), FIRSTAR BANK,
NATIONAL ASSOCIATION, not in its individual capacity, but as eligible lender
trustee for the Depositor under the Eligible Lender Trust Agreement (the
"Depositor Eligible Lender Trustee"), FIRSTAR BANK, NATIONAL ASSOCIATION, not in
its individual capacity, but as co-owner trustee (the "Co-Owner Trustee") of the
STUDENT LOAN FUNDING 1999-A/B TRUST, a Delaware common law trust (as opposed to
statutory) trust (the "Trust"), and FIRSTAR BANK, NATIONAL ASSOCIATION, not in
its individual capacity, but as eligible lender trustee for the benefit of the
Trust under the Trust Eligible Lender Trust Agreement (the "Co-Owner Eligible
Lender Trustee"):
A The Depositor has heretofore created the Trust, among the
depositor, First Union Trust Company, National Association, not in its
individual capacity, but solely as Delaware Trustee (the "Delaware Trustee") of
the Trust, and the Co-Owner Trustee of the Trust, acknowledged and agreed to by
Firstar Bank, National Association, not in its individual capacity, but solely
as Co-Owner Eligible Lender Trustee for the benefit of the Trust.
B References to the name "Student Loan Funding 1999-A/B Trust"
or to the "Trust" (other than in the phrase "Co-Owner Trustee of the Trust") in
this Agreement, including the Exhibits attached hereto and made a part hereof,
shall mean the Co-Owner Trustee, not in its individual capacity, but solely as
Co-Owner Trustee of the Trust. Capitalized words and terms used as defined words
and terms in this Agreement and not otherwise defined herein shall have the
meanings given such words and terms in the Glossary of Defined Terms attached as
Exhibit A to this Agreement.
C Each of the Depositor and the Depositor Eligible Lender
Trustee (i) to sell, transfer, assign and convey to the Co-Owner Trustee and the
Co-Owner Eligible Lender Trustee, as the case may be, for the benefit of the
Trust all of their respective right, title and interest in and to the
Transferred Assets and (ii) to carry out such transactions on the terms and
subject to the conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants,
representations, warranties and agreements and the conditions set forth in this
Agreement and other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto hereby agree as follows:
<PAGE> 5
ARTICLE I
SALE, TRANSFER AND ACCEPTANCE OF TRANSFERRED ASSETS
1.01 SALE, TRANSFER AND ACCEPTANCE OF TRANSFERRED ASSETS. (a) The
Depositor, to the full extent of its right, title and interest and as evidenced
by the execution and delivery of this Agreement, does hereby sell, transfer,
assign, set over and otherwise convey, without recourse, to the Co-Owner Trustee
of the Trust, and the Depositor Eligible Lender Trustee to the full extent of
its respective right, title and interest and as evidenced by the execution and
delivery of this Agreement, does hereby sell, transfer, assign, set over and
otherwise convey, without recourse, to the Co-Owner Eligible Lender Trustee, for
the benefit of the Trust, and each of the Co-Owner Trustee of the Trust and the
Co-Owner Eligible Lender Trustee, as the case may be, for the benefit of the
Trust hereby accepts and acquires from the Depositor or the Depositor Eligible
Lender Trustee, as the case may be, all of the Depositor's and the Depositor
Eligible Lender Trustee's respective right, title and interest as of the Closing
Date, in and to the Transferred Assets, whether now owned or hereafter acquired;
provided, however, that (i) with respect to such sale, transfer, assignment, and
conveyance to the Co-Owner Eligible Lender Trustee, only the legal title to the
Financed Student Loans held by the Depositor Eligible Lender Trustee is hereby
sold, transferred, assigned, set over and conveyed to the Co-Owner Eligible
Lender Trustee, and (ii) with respect to such sale, transfer, assignment, and
conveyance of all the Depositor's right, title and interest in the Purchase
Agreements to the Co-Owner Trustee of the Trust, to the extent that the Trust
requests that the Depositor repurchase or cause the Depositor Eligible Lender
Trustee, as the case may be, to repurchase a Financed Student Loan pursuant to
Sections 5.03 and 5.04 of this Agreement, the Depositor reserves the right to
exercise all rights under the applicable Purchase Agreement related to the
enforcement of the repurchase obligation of the seller or sellers under such
Purchase Agreement, and the Co-Owner Trustee of the Trust hereby authorizes and
consents to the exercise of such right by the Depositor.
(b) The parties intend that the conveyance of all the respective right,
title and interest in the Transferred Assets be a sale of the Transferred Assets
from each of the Depositor and the Depositor Eligible Lender Trustee, as the
case may be, to each of the Co-Owner Trustee of the Trust and the Co-Owner
Eligible Lender Trustee, as the case may be (a "Sale"). However, in the event
that, notwithstanding the intent of the parties, a court of competent
jurisdiction were to hold that the Transferred Assets are deemed not to have
been sold and therefore continue to be the property of the Depositor and the
Depositor Eligible Lender Trustee, as the case may be, then this Agreement shall
be deemed to be a conveyance by the Depositor and the Depositor Eligible Lender
Trustee, as the case may be, of a valid and binding lien on and a security
interest in all of the Depositor's and the Depositor Eligible Lender Trustee's
respective right, title and interest in the Transferred Assets, whether now
owned or hereafter acquired, to the Co-Owner Trustee of the Trust and the
Co-Owner Eligible Lender Trustee, as the case may be, for the benefit of the
Trust (a "Pledge").
1.02 CONSIDERATION FOR TRANSFER OF TRANSFERRED ASSETS. The
consideration to be provided by Co-Owner Trustee to the Depositor and the
Depositor Eligible Lender Trustee for
2
<PAGE> 6
the Transfer of the Transferred Assets shall be payment of the Purchase Price
for each Financed Student Loan.
1.03 RELEASE OF DEPOSITOR AND DEPOSITOR ELIGIBLE LENDER TRUSTEE. (a)
The Depositor and the Depositor Eligible Lender Trustee hereby acknowledge and
agree that, upon Transfer of the Transferred Assets and payment of the Purchase
Price, the Trust has become the successor to the Depositor with respect thereto.
(b) The Depositor and the Depositor Eligible Lender Trustee hereby
acknowledge and agree that, upon Transfer of the Transferred Assets and payment
of the Purchase Price, the Co-Owner Eligible Lender Trustee has become the
successor to the Depositor Eligible Lender Trustee.
3
<PAGE> 7
ARTICLE II
CLOSING
2.01 CLOSING. The closing of the transactions contemplated by this
Agreement (the "Closing") will take place at the offices of Thompson Hine &
Flory LLP, 10 West Broad Street, 7th Floor, Columbus, Ohio 43215, on October 28,
1999 or at such other place and on such other date as shall be mutually agreed
upon by the Depositor and the Trust (the "Closing Date").
2.02 GENERAL PROCEDURE. (a) At the Closing, and effective as of the
Closing Date, each party shall deliver to the party entitled to receipt thereof
the documents required to be delivered pursuant to Article VII hereof and such
other documents, instruments and materials (or complete and accurate copies
thereof, where appropriate) as may be reasonably required in order to effectuate
the intent and provisions of this Agreement, and all such documents, instruments
and materials shall be satisfactory in form and substance to counsel for the
receiving party.
(b) The Transfer of the respective Transferred Assets to the Trust and
the Co-Owner Eligible Lender Trustee shall be effected by the execution and
delivery of this Agreement.
(c) At the Closing, and effective on the Closing Date, Resources and
the Trust shall execute and deliver the Administration Agreement, providing for
certain administrative services to be performed by Resources for the Trust, in
the form of Exhibit B hereto (the "Administration Agreement").
(d) At the Closing, and effective on the Closing Date, Resources and
the Trust shall execute and deliver the Master Servicing Agreement, providing
for the Master Servicer to arrange for the servicing of the Financed Student
Loans on behalf of the Trust, in the form of Exhibit C hereto (the "Master
Servicing Agreement").
4
<PAGE> 8
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF DEPOSITOR AND DEPOSITOR ELIGIBLE
LENDER TRUSTEE
Each of the Depositor and the Depositor Eligible Lender Trustee, as the
case may be, hereby represents and warrants to the Trust and the Co-Owner
Eligible Lender Trustee that, as of the date of this Agreement:
3.01 FORMATION AND AUTHORITY. The Depositor is a limited liability
company duly formed, validly existing and in good standing under the laws of the
State of Delaware, and had at all relevant times and has all requisite power and
authority to enter into this Agreement and perform its obligations hereunder.
Firstar Bank, National Association ("Firstar"), in its capacity as the Depositor
Eligible Lender Trustee, is a national banking association, duly formed and
validly existing under the law of the United States of America, and had at all
relevant times and has all requisite power and authority to enter into this
Agreement and perform its obligations hereunder. Firstar, in its capacity as the
Depositor Eligible Lender Trustee, was at all relevant times and is an "eligible
lender" under the provisions of the Higher Education Act.
3.02 EXECUTION, DELIVERY; VALID AND BINDING AGREEMENT. The execution,
delivery and performance of this Agreement by each of the Depositor and the
Depositor Eligible Lender Trustee and the consummation of the transactions
contemplated hereby have been duly and validly authorized by all requisite
action by each of the Depositor and the Depositor Eligible Lender Trustee, and
no other proceedings on the respective parts of either or both are necessary to
authorize the execution, delivery or performance of this Agreement, and such
action has not been repealed or revoked by the Depositor or the Depositor
Eligible Lender Trustee. This Agreement has been duly executed and delivered by
the Depositor and the Depositor Eligible Lender Trustee, and, assuming that this
Agreement is the valid and binding obligation of the other respective party or
parties thereto, constitutes the valid and binding obligation of each of the
Depositor and the Depositor Eligible Lender Trustee, enforceable against each of
them in accordance with its respective terms, except as such enforcement may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other laws of general application affecting enforcement of creditors' rights or
by general principles of equity.
3.03 AUTHORITY; NO BREACH. Each of the Depositor and the Depositor
Eligible Lender Trustee has the requisite power and authority to execute and
deliver this Agreement and to Transfer the Transferred Assets and to perform its
obligations hereunder. The execution, delivery and performance of this Agreement
by each of the Depositor and the Depositor Eligible Lender Trustee and the
consummation of the transactions contemplated hereby do not conflict with or
result in any breach of any of the provisions of, constitute a default under,
result in a violation of, result in the creation of a right of termination or
acceleration of any lien, security interest, charge or encumbrance upon any
assets of the Depositor or the Depositor Eligible Lender Trustee, or require any
authorization, consent, approval, exemption or other action by or notice to any
court or other governmental body, under the provisions of the Certificate of
Formation or the Amended and Restated Limited Liability Company Agreement of the
Depositor or under the Articles of Association and ByLaws of Firstar or under
any indenture, mortgage, lease, loan agreement or other agreement or instrument
by which either the Depositor or the
5
<PAGE> 9
Depositor Eligible Lender Trustee is bound or affected, or any law, statute,
rule or regulation or order, judgment or decree to which either the Depositor,
the Depositor Eligible Lender Trustee or the Transferred Assets are bound or
affected.
3.04 BROKERAGE. No broker or finder has acted for the Depositor or the
Depositor Eligible Lender Trustee in connection with this Agreement or the
transactions contemplated hereby, and no third party shall be entitled to
receive any fees for financial advisory services or similar compensation in
connection with the transactions contemplated by this Agreement based on any
arrangement or agreement made by or on behalf of the Depositor or the Depositor
Eligible Lender Trustee.
3.05 REGARDING FINANCED STUDENT LOANS. The Depositor (or the Depositor
Eligible Lender Trustee where expressly otherwise stated) hereby represents and
warrants to the Trust that as of the date of Transfer of the Transferred Assets:
(a) Any information furnished by the Depositor to the Trust or
its agents with respect to any Financed Student Loan is true, complete and
correct in all material respects.
(b) To the best of the Depositor's knowledge, each Financed
Student Loan has been duly executed and delivered and constitutes the legal,
valid and binding obligation of the maker (and the endorser, if any) thereof,
enforceable in accordance with its terms.
(c) To the best of the Depositor's knowledge, the amount of
the unpaid principal balance of each Financed Student Loan is due and owing, and
no counterclaim, offset, defense or right to rescission exists with respect to
any Financed Student Loan which can be asserted and maintained or which with
respect to any Financed Student Loan which can be asserted and maintained or
which, with notice, lapse of time, or the occurrence or failure too occur of any
act or event, could be asserted and maintained by the student borrower against
the Trust as assignee thereof. The rate of interest carried by each Financed
Student Loan is currently allowable and was allowable by law at the time the
loan was made, and no such Financed Student Loan carries a rate of interest in
excess of, or less than, the maximum rate permitted by the provisions of the
Higher Education Act, subject, however, to the timely repayment incentive
programs described in the Purchase Agreement.
(d) The Depositor and the Depositor Eligible Lender Trustee
are the sole owners and holders of each Financed Student Loan and have full
right and authority to Transfer the same free and clear of all liens, pledges or
encumbrances, and upon the delivery of a fully executed blanket endorsement with
regard to the promissory notes and applications evidencing the Transfer of the
Financed Student Loans to the Trust and the Co-Owner Eligible Lender Trustee
pursuant to this Agreement, the Trust and the Co-Owner Eligible Lender Trustee
will acquire full right, title and interest in, or alternatively, a lien and
perfected security interest in, such Financed Student Loans free and clear of
all liens, pledges or encumbrances whatsoever. All documentation relating to the
Financed Student Loans, including the original promissory note for each Financed
Student Loan, is in the possession of the applicable Servicer.
6
<PAGE> 10
(e) To the best of the Depositor's knowledge, each Financed
Student Loan complies in all respects with the requirements of the Higher
Education Act and is a Financed Student Loan as those terms are defined in this
Agreement.
(f) The information set forth in Exhibit D hereto accurately
describes and identifies the Financed Student Loans transferred as part of the
Transferred Assets separate from any Financed Student Loans not transferred by
the Depositor and the Depositor Eligible Lender Trustee.
(g) It is the intention of the Depositor and the Depositor
Eligible Lender Trustee that the Transfer from the Depositor Eligible Lender
Trustee, in each case on behalf of Depositor to the Trust herein contemplated,
constitute a true sale of the Financed Student Loans to the Trust and that
neither the interest in nor title to the Financed Student Loans shall become or
be deemed property of the Depositor for any purpose under state or federal law.
(h) The Depositor shall furnish and file, and shall cause the
Depositor Eligible Lender Trustee to furnish and file, if appropriate, any
document reasonably requested by the Trust to perfect the Trust's and the
Co-Owner Eligible Lender Trustee's ownership interest in the Financed Student
Loans.
(i) The transactions contemplated by this Agreement are and
will be in the ordinary course of the Depositor's business, and the Depositor
has valid business reasons for Transferring the Financed Student Loans rather
than obtaining a secured loan with the Financed Student Loans as collateral.
Both before and immediately after giving effect to any Transfer: (i) the
Depositor Transferred or will Transfer the Financed Student Loans to the Trust
without any intent to hinder, delay or defraud any current or future creditor of
the Depositor; (ii) the Depositor was not engaged and was not about to engage,
and will not engage in, any business or transaction for which any property
remaining with the Depositor was or will constitute unreasonably small capital
in relation to the business of the Depositor or the transaction; (iii) the
Depositor did not intend or will not intend to incur, and did not believe or
reasonably should not have believed, or will not believe or reasonably shall not
have believed, that it would incur debts beyond its ability to pay as they
become due; and (iv) the Depositor was not and will not be insolvent or did not
or will not become insolvent as a result of any Transfer.
(j) Each Transfer of the Financed Student Loans (including all
payments due or to become due thereunder) by the Depositor pursuant to this
Agreement is not subject to and will not result in any tax, fee or governmental
charge payable by the Trust or the Depositor to any federal, state or local
government ("Transfer Taxes") except such Transfer Taxes as are paid by the
Depositor at the time of Transfer and except UCC filing fees. In the event that
the Trust receives actual notice of any unpaid Transfer Taxes arising out of the
Transfer of the Financed Student Loans, on written demand by the Trust, or upon
the Depositor otherwise being given notice thereof, the Depositor shall pay, and
otherwise indemnify and hold the Trust harmless therefor. The Depositor shall
not be responsible for the Trust's income taxes, if any.
7
<PAGE> 11
(k) The Depositor has conducted or caused to be conducted on
its behalf a reasonable investigation of sufficient scope and content to enable
it to make in good faith the representations and warranties contained in this
Agreement.
8
<PAGE> 12
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE TRUST AND CO-OWNER ELIGIBLE
LENDER TRUSTEE
Each of the Trust and the Co-Owner's Eligible Lender Trustee, as
applicable, hereby represents and warrants to the Depositor that, as of the date
of this Agreement:
4.01 FORMATION AND AUTHORITY. The Trust is a common law (as opposed to
statutory) trust validly created under the laws of the State of Delaware, and
has all requisite power and authority under the Trust Agreement to enter into
this Agreement and perform its obligations hereunder. The Co-Owner Eligible
Lender Trustee is a national banking association, duly formed and validly
existing under the law of the United States of America, and has all requisite
power and authority to enter into this Agreement and perform its obligations
hereunder. The Co-Owner Eligible Lender Trustee is an "eligible lender" under
the provisions of the Higher Education Act.
4.02 EXECUTION, DELIVERY; VALID AND BINDING AGREEMENT. The execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized by all
requisite action by each of the Trust and the Co-Owner Eligible Lender Trustee,
and no other proceedings on the part of either are necessary to authorize the
execution, delivery or performance of this Agreement. This Agreement has been
duly executed and delivered by the Trust and the Co-Owner Eligible Lender
Trustee and, assuming that such instrument is the valid and binding obligation
of the other respective party or parties thereto, constitutes the valid and
binding obligation of the Trust and the Co-Owner Eligible Lender Trustee,
enforceable against each of them in accordance with its respective terms, except
as such enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application affecting
enforcement of creditors' rights or by general principles of equity.
4.03 AUTHORITY; NO BREACH. Each of the Trust and the Co-Owner Eligible
Lender Trustee has the requisite power and authority to assume the Depositor
Obligations and the Depositor Eligible Lender Trustee Obligations, to execute
and deliver this Agreement and to perform their respective obligations
hereunder. The execution, delivery and performance of this Agreement by the
Trust and by the Co-Owner Eligible Lender Trustee and the consummation of the
transactions contemplated hereby do not conflict with or result in any breach of
any of the provisions of, constitute a default under, result in a violation of,
result in the creation of a right of termination or acceleration of any lien,
security interest, charge or encumbrance upon any assets of the Trust, or
require any authorization, consent, approval, exemption or other action by or
notice to any court or other governmental body, under the provisions of the
Trust Agreement of the Trust or under the Articles of Association and ByLaws of
the Co-Owner Eligible Lender Trustee or under any indenture, mortgage, lease,
loan agreement or other agreement or instrument by which the Trust or the
Co-Owner Eligible Lender Trustee is bound or affected, or any law, statute, rule
or regulation or order, judgment or decree to which the Trust or the Co-Owner
Eligible Lender Trustee or their respective assets are bound or affected.
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<PAGE> 13
ARTICLE V
COVENANTS OF DEPOSITOR
The Depositor covenants and agrees with the Trust as follows:
5.01 REGARDING CLOSING CONDITIONS. The Depositor shall take all
commercially reasonable actions necessary to cause the conditions applicable to
itself and the Trust set forth in Section 7.01 to be satisfied and to consummate
the transactions contemplated herein as soon as reasonably possible after the
satisfaction thereof.
5.02 REGARDING THE HIGHER EDUCATION ACT. The Depositor shall, both
before or after the Closing Date, take all such action, or refrain from taking
such action, to the extent necessary and reasonable to be taken or not taken by
the Depositor in its capacity as assignor in order to comply with the
requirements of the Higher Education Act, so that the receipt of Special
Allowance Payments with respect to Financed Student Loans will not be adversely
affected.
5.03 CONDITIONS PRECEDENT TO REPURCHASE OBLIGATION. At the request of
the Trust, (a) the Depositor shall repurchase, or, shall cause the Depositor
Eligible Lender Trustee, as applicable, to repurchase, each Financed Student
Loan, with respect to which the Secretary of Education or a Guarantee Agency, as
the case may be, refuses to honor all or part of a claim filed with respect to
such Financed Student Loan (including any claim for Interest Subsidy Payments,
Special Allowance Payments, Insurance, reinsurance or Guarantee Payments) on
account of any circumstance or event that occurred after the Depositor and the
Depositor Eligible Lender Trustee, as the case may be, took title to such
Student Loan but prior to the Closing Date and (b) with respect to any
circumstance or event that occurred prior to the date on which the Depositor or
the Depositor Eligible Lender Trustee took title to such Student Loan and that
resulted in the Secretary of Education or a Guarantee Agency, as the case may
be, refusing to honor all or part of a claim filed with respect to such Financed
Student Loan (including any claim for Interest Subsidy Payments, Special
Allowance Payments, Insurance, reinsurance or Guarantee Payments), the Depositor
shall repurchase, or, shall cause the Depositor Eligible Lender Trustee to
repurchase, such Financed Student Loan, but only after the Depositor has had
reasonable time to exercise its rights under the applicable Purchase Agreement
to require the seller under such Purchase Agreement to repurchase such Financed
Student Loan.
5.04 REPURCHASE BY DEPOSITOR. Upon the occurrence of any of the
conditions set forth in Section 5.03 hereof and upon the request of the Trust,
the Depositor shall pay, or cause to be paid, to the Trust an amount equal to
the same percentage of the then-outstanding Principal Balance of such Financed
Student Loan as the Depositor originally paid in the Purchase Price for such
Financed Student Loan, plus interest and Special Allowance Payments accrued and
unpaid with respect to such Financed Student Loan from the Closing Date to and
including the date of repurchase, plus any attorneys' fees, legal expenses,
court costs, servicing fees or other expenses incurred by the Trust or the
appropriate successors or assigns in connection with such Financed Student Loan
and arising out of the reasons for the repurchase. With respect to any Financed
Student Loan repurchased by the Depositor pursuant to this Agreement, the Trust
shall Transfer, without recourse, representation or warranty, to the Depositor
Eligible Lender Trustee, on behalf of Depositor all of Trust's and the Co-Owner
Eligible Lender Trustee's right,
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<PAGE> 14
title and interest in and to such Financed Student Loan, and all security and
documents relating thereto.
5.05 REGARDING TAX MATTERS. The Depositor shall be responsible for all
taxes attributable to the ownership of the Transferred Assets for all periods
prior to the Closing Date.
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<PAGE> 15
ARTICLE VI
COVENANTS OF THE TRUST AND THE CO-OWNER ELIGIBLE LENDER TRUSTEE
Each of the Trust and the Co-Owner Eligible Lender Trustee covenants
and agrees with the Depositor as follows:
6.01 REGARDING CLOSING CONDITIONS. Each of the Trust and the Co-Owner
Eligible Lender Trustee shall take all commercially reasonable actions necessary
to cause the conditions applicable to itself set forth in Section 7.01 to be
satisfied and to consummate the transactions contemplated herein as soon as
reasonably possible after the satisfaction thereof.
6.02 REGARDING THE HIGHER EDUCATION ACT AND THE FINANCED STUDENT LOANS.
Each of the Trust and the Co-Owner Eligible Lender Trustee shall, both before
and after the Closing Date, take all such action, or refrain from taking such
action, as is necessary to comply with the requirements of the Higher Education
Act, so that the receipt of Special Allowance Payments and Interest Subsidy
Payments, if applicable, with respect to the Financed Student Loans will not be
adversely affected.
6.03 REGARDING TAX MATTERS. The Trust shall be responsible for the
payment of all taxes attributable to the ownership of the Transferred Assets for
all periods after the Closing Date; provided, however, that the Trust shall be
responsible for the payment of such taxes only from the Transferred Assets.
6.04 RESTRICTIONS REGARDING BANKRUPTCY. Neither the Trust nor the
Co-Owner Eligible Lender Trustee shall, for any reason, institute proceedings
for the Depositor to be adjudicated a bankrupt or insolvent, or consent to the
institution of bankruptcy or insolvency proceedings against the Depositor, or
file a petition seeking or consenting to reorganization or relief under any
applicable federal or state law relating to the bankruptcy of the Depositor, or
consent to the appointment of a receiver, liquidator, assignee, trustee,
sequestrator (or other similar official) of the Depositor or a substantial part
of the property of the Depositor or cause or permit the Depositor to make any
assignment for the benefit of creditors, or admit in writing the inability of
the Depositor to pay its debts generally as they become due, or declare or
effect a moratorium on the debt of the Depositor or take any action in
furtherance of any such action.
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<PAGE> 16
ARTICLE VII
CONDITIONS TO CLOSING
7.01 CONDITIONS TO CLOSING. The obligation of each party to consummate
the transactions contemplated by this Agreement is subject to the satisfaction
of the following conditions on or before the Closing Date:
(a) The respective representations and warranties of the
Depositor, the Depositor Eligible Lender Trustee, the Trust and the
Co-Owner Eligible Lender Trustee set forth in Articles III and IV
hereof, respectively, shall be true and correct in all material
respects at and as of the Closing Date as though then made, except that
any such representation or warranty made as of a specified date (other
than the date hereof) shall only need to have been true on and as of
such date;
(b) Each party shall have performed in all material respects
all of the covenants and agreements required to be performed and
complied with by it under this Agreement prior to the Closing Date;
(c) Each party shall have obtained, or caused to be obtained,
each consent and approval required in order to complete the
transactions contemplated hereby including, without limitation, rating
agency confirmations;
(d) There shall not be threatened, instituted or pending any
action or proceeding, before any court or governmental authority or
agency, domestic or foreign, challenging or seeking to make illegal, or
to delay or otherwise directly or indirectly restrain or prohibit, the
consummation of the transactions contemplated hereby or seeking to
obtain material damages in connection with such transactions;
(e) On the Closing Date, the Depositor shall have received
from the Trust the Purchase Price;
(f) On the Closing Date, the Depositor, the Depositor Eligible
Lender Trustee, the Trust or the Co-Owner Eligible Lender Trustee, as
applicable (and any other parties to each of the following agreements
or instruments), shall have executed and delivered the following to the
applicable parties, together with the execution and delivery of this
Agreement (provided, however, that this Agreement shall be deem
delivered immediately prior to, but nevertheless subject to, the
delivery of the following agreements or instruments):
(1) An executed original Administration Agreement between the
Trust and the Administrator;
(2) An executed original Master Servicing Agreement between
the Trust and Master Servicer;
(3) bills of sale, blanket endorsements and such other
instruments of transfer, assignment and delivery as each
of the Trust and the Co-Owner Eligible
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<PAGE> 17
Lender Trustee shall have reasonably requested pursuant to
Section 2.02 hereof;
(4) a certificate of an appropriate officer of the Depositor
and the Depositor Eligible Lender Trustee, dated the
Closing Date, stating that the conditions set forth in
subsections 7.01(b) and (c) above to be satisfied by the
Depositor and the Depositor Eligible Lender Trustee have
been satisfied; and
(5) (a) legal opinions, in form and substance satisfactory to
the parties listed in subsection 7.01(a) and their
counsel, with respect to the organization and authority of
the Depositor and Trust, true sale, non-consolidation and
bankruptcy remoteness, and such other matters as such
counsel may reasonably require and (b) such other
opinions, documents, instruments and agreements as Calfee,
Halter & Griswold LLP, Thompson Hine & Flory LLP, the
Trust or the Co-Owner Eligible Lender Trustee, or their
respective counsels, may request.
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<PAGE> 18
ARTICLE VIII
TERMINATION
8.01 TERMINATION. This Agreement may be terminated at any time prior to
the consummation of the Transfer of the Transferred Assets:
(a) by the mutual consent of the Depositor and the Trust; or
(b) by either the Depositor or the Trust if there has been a
material misrepresentation, breach of warranty or breach of covenant on
the part of the other in the representations, warranties and covenants
set forth in this Agreement.
8.02 EFFECT OF TERMINATION. In the event of termination of this
Agreement by either the Depositor or the Trust as provided in Section 8.01, this
Agreement shall become void and there shall be no liability on the part of the
Depositor or the Trust, or their respective officers, members or trustees,
except that Sections 10.01 and 10.09 hereof shall survive indefinitely, and
except with respect to willful breaches of this Agreement prior to the time of
such termination.
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<PAGE> 19
ARTICLE IX
SURVIVAL; INDEMNIFICATION
9.01 SURVIVAL. Subject to Section 3.05 hereof, the representations and
warranties of the parties to this Agreement shall not survive the Closing Date.
The covenants contained in this Agreement shall survive the Closing Date.
9.02 INDEMNIFICATION BY THE DEPOSITOR. The Depositor agrees to
indemnify the Trust and its officers and employees (the "Trust Indemnified
Parties") with respect to, and hold the Trust Indemnified Parties harmless from,
any loss, liability or expense (including, but not limited to, reasonable legal
fees) which the Trust Indemnified Parties may directly or indirectly incur or
suffer by reason of, or which results, arises out of or is based upon the
failure of the Depositor to comply with any covenants or other commitments made
by the Depositor in this Agreement or any other agreement or document delivered
by the Depositor in connection herewith.
9.03 INDEMNIFICATION BY THE TRUST. The Trust agrees to indemnify the
Depositor and its Management Committee members, officers and employees (the
"Depositor Indemnified Parties") with respect to, and hold the Depositor
Indemnified Parties harmless from, any loss, liability or expense (including,
but not limited to, reasonable legal fees) which the Depositor Indemnified
Parties may directly or indirectly incur or suffer by reason of, or which
results, arises out of or is based upon the failure of the Trust to comply with
any covenants or other commitments made by the Trust in this Agreement or any
other agreement or document delivered by the Trust in connection herewith.
9.04 LEGAL PROCEEDINGS. In the event the Depositor or the Trust becomes
involved in any legal, governmental or administrative proceeding which may
result in indemnification claims hereunder, such party shall promptly notify the
other party against whom indemnity may be sought (the "Indemnifying Party") in
writing and in full detail of the filing, and of the nature of such proceeding.
The Indemnifying Party may, at its option and expense, defend any such
proceeding if the proceeding could give rise to an indemnification obligation
hereunder. If the Indemnifying Party elects to defend any proceeding, it shall
have full control over the conduct of such proceeding, although each party being
indemnified shall have the right to retain legal counsel at its own expense and
shall have the right to approve any settlement of any dispute giving rise to
such proceeding, provided that such approval may not be withheld unreasonably by
the party being indemnified. The party being indemnified shall reasonably
cooperate with the Indemnifying Party in such proceeding.
16
<PAGE> 20
ARTICLE X
MISCELLANEOUS
10.01 EXPENSES. Except as otherwise expressly provided for herein, each
party will pay all of its respective expenses incurred (including attorneys' and
accountants' fees) in connection with the negotiation of this Agreement, the
performance of its respective obligations hereunder and the consummation of the
transactions contemplated by this Agreement (whether consummated or not).
10.02 FURTHER ASSURANCES. The Depositor, the Depositor Eligible Lender
Trustee, the Trust and the Co-Owner Eligible Lender Trustee each agrees that, on
and after the Closing Date, it shall take all appropriate action and execute any
documents, instruments or conveyances of any kind which may be reasonably
necessary or advisable to carry out the transfers of assets and assumptions of
liabilities provided for herein.
10.03 AMENDMENT AND WAIVER. This Agreement may be amended in writing by
the parties thereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Agreement.
10.04 NOTICES. All notices, demands and other communications to be
given or delivered under or by reason of the provisions of this Agreement will
be in writing and will be deemed to have been given when personally delivered or
three business days after being mailed by first class U.S. mail, return receipt
requested, or when receipt is acknowledged, if sent by facsimile, telecopy or
other electronic transmission device. Notices, demands and communications to the
parties will, unless another address is specified in writing, be sent to the
address indicated below:
Notices to the Depositor: Student Loan Funding Riverfront LLC
One West Fourth Street, Suite 205
Cincinnati, Ohio 45202
Attention: Manager
Notices to the Trust: Firstar Bank, National Association
425 Walnut Street
Cincinnati, Ohio 45202
Attention: Corporate Trust Department
with copies of all notices to: Thompson Hine & Flory LLP
312 Walnut Street, Suite 1400
Cincinnati, Ohio 45202-4029
Attn: Patricia Mann Smitson, Esq.
10.05 ASSIGNMENT. This Agreement and all of the provisions hereof will
be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, except that neither this Agreement
nor any of the rights, interests or obligations hereunder may be assigned by any
party hereto without the prior written consent of the other parties hereto.
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<PAGE> 21
10.06 SEVERABILITY. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be prohibited by or
invalid under applicable law, such provision will be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement.
10.07 COMPLETE AGREEMENT. This Agreement and the documents referred to
herein contain the complete agreement between the parties and supersede any
prior understandings, agreements or representations by or between the parties,
written or oral, which may have related to the subject matter hereof in any way.
10.08 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, any one of which need not contain the signatures of more than one
party, but all such counterparts taken together will constitute one and the same
instrument.
10.09 GOVERNING LAW. The law, without regard to conflicts of laws
principles, of the State of Ohio will govern all questions concerning the
construction, validity and interpretation of this Agreement and the performance
of the obligations imposed by this Agreement.
[Remainder of page intentionally left blank]
18
<PAGE> 22
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement on the day, month and year first above written.
STUDENT LOAN FUNDING RIVERFRONT LLC FIRSTAR BANK, NATIONAL ASSOCIATION,
a Delaware limited liability company not in its individual capacity, but
("Depositor") solely as eligible lender trustee
for the Depositor
("Depositor Eligible Lender Trustee")
By: /s/ Perry D. Moore By: /s/ Brian J. Gardner
Title: Senior Vice President Title: Vice President & Trust Officer
FIRSTAR BANK, NATIONAL ASSOCIATION FIRSTAR BANK, NATIONAL ASSOCIATION,
not in its individual capacity, but not in its individual capacity, but
solely as Co-Owner Trustee of STUDENT solely as eligible lender trustee for
LOAN FUNDING 1999-A/B Trust the benefit of the Trust
("Co-Owner Trustee") ("Co-Owner Eligible Lender Trustee")
By: /s/ Brian J. Gardner By: /s/ Brian J. Gardner
Title: Vice President & Trust Officer Title: Vice President & Trust Officer
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<PAGE> 23
EXHIBIT A
to
Transfer and Sale Agreement,
dated as of October 1, 1999
GLOSSARY OF DEFINED TERMS
-------------------------
Words and terms used as defined words in this Agreement or in this
Glossary of Defined Terms and not otherwise defined in this Agreement or in this
Glossary of Defined Terms shall have the meanings given such words and terms in
the Indenture. Unless the context shall clearly indicate some other meaning or
may otherwise require, the terms defined in this Glossary of Defined Terms
shall, for all purposes of this Transfer and Sale Agreement and of any
instrument amendatory hereof or supplemental hereto, have the meanings herein
specified:
"DEPOSITOR" shall mean Student Loan Funding Riverfront LLC, a limited
liability company formed under the laws of the State of Delaware, and its
successors and assigns.
"DEPOSITOR ELIGIBLE LENDER TRUSTEE" shall mean Firstar Bank, National
Association, not in its individual capacity, but solely in its capacity as
eligible lender trustee on behalf of the Depositor, and its successor and
assigns.
"ELIGIBLE LENDER TRUST AGREEMENT" shall mean the Eligible Lender Trust
Agreement, dated as of October 1, 1999, between the Depositor and the Depositor
Eligible Lender Trustee, not in its individual capacity, but solely in its
capacity as eligible lender trustee on behalf of the Depositor, and its
successors and assigns.
"FFELP LOANS" shall mean student loans made under the FFELP Program.
"FFELP PROGRAM" shall mean the Federal Family Education Loan Program
established by the Higher Education Act pursuant to which student loans are made
to borrowers pursuant to certain guidelines, and the repayment of such loans is
guaranteed by a Guarantee Agency, and any predecessor or successor program.
"FINANCED STUDENT LOANS" shall mean, collectively, the student loans
described in Exhibit D hereto.
"HIGHER EDUCATION ACT" shall mean Title IV, Part B of the Higher
Education Act of 1965, as amended, or any successor federal act, and all
regulations, directives and guidelines promulgated thereunder from time to time.
"INDENTURE" shall mean the Indenture of Trust, together with the Terms
Supplement to the Indenture of Trust, each dated as of October 1, 1999, among
the Trust, the Co-Owner Eligible Lender Trustee and the Firstar Bank, National
Association, as Indenture Trustee.
A-1
<PAGE> 24
"INSURANCE" shall mean, with respect to a Financed Student Loan, the
insurance by the Secretary of Education under the Higher Education Act (as
evidenced by a Contract of Insurance issued or entered into under the provisions
of the Higher Education Act) of 100%, or such lesser percentage as is provided
by the Higher Education Act, of the principal of such Financed Student Loan and,
during such time as such Financed Student Loan is not entitled to Interest
Subsidy Payments, the interest on such Financed Student Loan.
"PURCHASE AGREEMENTS" shall mean the Student Loan Purchase Agreements
with sellers, for purposes of the Program (in whole or in part), in each case as
from time to time amended or supplemented in accordance with the terms thereof,
and in each case only to the extent that each such Purchase Agreement covers
Financed Student Loans.
"PURCHASE PRICE" shall mean the cash consideration, in an amount equal
to the fair market value of the Student Loans to be acquired by the Trust, as
such value has been determined by Resources.
"RESOURCES" shall mean Student Loan Funding Resources, Inc., a Ohio
corporation.
"TRANSFER" with respect to the Transferred Assets shall mean, and it is
the intention of the parties hereto that it mean, the sale, transfer, assignment
and conveyance of, or to sell, transfer, assign and convey, the Transferred
Assets, provided, however, that if a court of competent jurisdiction were to
hold that any such sale, transfer, assignment or conveyance were not a sale,
transfer, assignment and conveyance, then with respect to the Transferred
Assets, "Transfer" shall be deemed to mean (i) a conveyance of a valid and
binding lien on and a security interest in, or (ii) to convey a valid and
binding lien on and a security interest in, the Transferred Assets.
"TRANSFERRED ASSETS" shall mean all rights of the Depositor and
Depositor Eligible Lender Trustee in and to the Financed Student Loans, the
Contracts of Guarantee with respect thereto and the Purchase Agreements.
"TRUST" shall mean the common law (as opposed to statutory) trust
created under the laws of the State of Delaware by the Trust Agreement; provided
that references to the name "Student Loan Funding 1999-A/B Trust" or to the term
"Trust" in this Agreement or Exhibits attached hereto shall mean the Co-Owner
Trustee, not in its individual capacity, but solely in its capacity as Co-Owner
Trustee of the Trust.
"TRUST AGREEMENT" shall mean the Trust Agreement, dated as of August 1,
1999, among the Depositor, the Delaware Trustee and the Trust, acknowledged and
agreed to by the Co-Owner Eligible Lender Trustee.
"TRUST ELIGIBLE LENDER TRUST AGREEMENT" shall mean the Eligible Lender
Trust Agreement, dated as of October 1, 1999, between the Trust and the Co-Owner
Eligible Lender Trustee, not in its individual capacity, but solely in its
capacity as eligible lender trustee on behalf of the Trust.
A-2
<PAGE> 25
EXHIBIT B
to
Transfer and Sale Agreement,
dated as of October 1, 1999,
- -------------------------------------------------------------------------------
ADMINISTRATION AGREEMENT
BETWEEN
STUDENT LOAN FUNDING 1999-A/B TRUST
AS ISSUER
AND
STUDENT LOAN FUNDING RESOURCES, INC.
AS ADMINISTRATOR
DATED AS OF OCTOBER 1, 1999
- --------------------------------------------------------------------------------
B-1
<PAGE> 26
ADMINISTRATION AGREEMENT
THIS ADMINISTRATION AGREEMENT (the "Administration Agreement") is made
as of October 1, 1999 between Student Loan Funding 1999-A/B Trust (the "Issuer")
and Student Loan Funding Resources, Inc., an Ohio corporation, as administrator
(the "Administrator") under the circumstances set forth below. All references to
Student Loan Funding 1999-A/B Trust or the Issuer shall be deemed to be
references to Firstar Bank, National Association, not in its individual
capacity, but solely as Co-Owner Trustee (the "Co-Owner Trustee") under the
Trust Agreement dated as of October 1, 1999.
RECITALS
A. The Issuer is engaged in the acquisition from Student Loan Funding
LLC of student loans (the "Student Loans") guaranteed under a guaranty program
established pursuant to the requirements of the Higher Education Act of 1965, as
amended, and the regulations promulgated thereunder (the "Higher Education
Act").
B. In connection with the acquisition of such Student Loans, the Issuer
has executed and delivered that certain Indenture of Trust and Terms Supplement
to Indenture, each dated as of October 1, 1999 (together, the "Indenture") among
the Issuer, Firstar Bank, National Association, as Eligible Lender Trustee, on
behalf of the Issuer (the "Eligible Lender Trustee"), and Firstar Bank, National
Association, as Indenture Trustee (the "Indenture Trustee").
C. The Issuer and/or the Master Servicer (as defined below) have
entered into certain agreements in connection with the acquisition of Student
Loans, including without limitation one or more Servicing Agreements and any
Subservicing Addenda thereto with a Servicer (the "Servicing Agreements"), the
Transfer and Sale Agreement, dated as of October 1, 1999 by and among Student
Loan Funding LLC (the "Depositor"), Firstar Bank, National Association, as
eligible lender trustee on behalf of the Depositor, the Issuer, the Eligible
Lender Trustee and the Indenture Trustee (the "Transfer Agreement"), and the
Master Servicing Agreement, dated as of October 1, 1999 by and between the
Issuer and Student Loan Funding Resources, Inc., as Master Servicer (the "Master
Servicing Agreement", together with the Servicing Agreements collectively
referred to herein as the "Servicing Documents").
D. Pursuant to the Indenture and the Basic Documents, the Issuer is
obligated to perform certain duties and responsibilities under the Indenture and
in connection with the assets and obligations thereunder.
E. The Issuer has requested that the Administrator provide advice and
assistance to the Issuer and perform various services for and duties of the
Issuer, including the duties and responsibilities of the Issuer under the
Indenture and in connection with the assets and obligations thereunder.
F. The Issuer desires to avail itself of the experience, advice and
assistance of the Administrator and to have the Administrator perform various
financial, statistical, accounting
B-2
<PAGE> 27
and other services for and duties of the Issuer, and the Administrator has the
capacity and is willing to furnish such services on the terms and conditions set
forth herein.
NOW THEREFORE, in consideration of the mutual promises and covenants
set forth herein and other valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
SECTION 1. DEFINITIONS. For all purposes of this Agreement, except as
otherwise expressly provided herein or unless the context requires, capitalized
terms not otherwise defined herein shall have the following meanings:
"AFFILIATE" means any corporation or other entity directly or
indirectly controlling or controlled by, or under direct or indirect common
control with, the Administrator or the Issuer. For purposes of this definition,
"control" means the power to direct management and policies of such entity,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise.
"GUARANTEE AGENCY" means any guarantee agency that provides guarantees
for Student Loans.
"SERVICER" means any servicing entity selected by the Master Servicer
to provide servicing of Student Loans, including but not limited to application,
review, disbursement, collection, due diligence and claims services.
SECTION 2. INDENTURE AND RELATED DOCUMENTS. The Administrator shall
cause the duties and responsibilities of the Issuer under the Indenture to be
performed, including but not limited to the actions set forth below. The
Administrator shall advise the Issuer when action by the Issuer is necessary to
comply with the Issuer's duties under the Indenture and the agreements relating
thereto. The Administrator shall prepare for execution, if required, by the
Issuer, or shall cause the preparation by other appropriate persons of 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 Indenture.
In furtherance of the foregoing, the Administrator shall take all appropriate
action, including but not limited to, the following:
a. obtaining and preserving the Issuer's legal right to do
business in any jurisdiction in which such qualification is or
shall be necessary to protect the validity and enforceability
of the Indenture, and each instrument and agreement included
in the trust estate of the Indenture;
b. preparing all supplements, amendments, financing statements,
continuation statements, instruments of further assurance and
other instruments, in accordance with the relevant provisions
of the Indenture, necessary to protect the trust estate of the
Indenture;
c. arranging for the delivery of any opinions of counsel and
certificates of officers of the Issuer and other statements
required under the relevant provisions of the
B-3
<PAGE> 28
Indenture;
d. preparing and obtaining documents and instruments required for
the release of the Issuer from its obligations under the
Indenture;
e. monitoring the Issuer's obligations as to the satisfaction and
discharge of the Indenture and preparing any certificates of
officers of the Issuer and obtaining any opinions of counsel
required in connection therewith;
f. preparing, obtaining or filing the instruments, opinions and
certificates and other documents required for the release of
collateral;
g. taking such actions as may be required of the Issuer under the
Indenture upon the occurrence and continuance of an event of
default thereunder;
h. preparing and, after execution by the Issuer, filing with the
Securities and Exchange Commission (the "Commission"), any
applicable State agencies and the Indenture Trustee, 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 including
without limitation, the requirements under any continuing
disclosure agreements;
i. causing the directions of the Issuer to be carried out in
connection with opening one or more accounts in the Issuer's
name, preparing any orders of the Issuer and certificates of
officers of the Issuer and obtaining opinions of counsel
required, and taking all other actions necessary, with respect
to investment and reinvestment of funds in trust funds and
accounts established under the Indenture in accordance with
the investment criteria and requirements of the Indenture and
applicable investment policies.
j. preparing any requests of the Issuer and certificates of
officers of the Issuer and obtaining any opinions of counsel
required for the release of the trust estate of the Indenture;
k. preparing all certificates of officers of the Issuer, and
coordinating obtaining opinions of counsel as required with
respect to any requests by the Issuer of the Indenture Trustee
to take any action under the Indenture;
l. preparing orders of the Issuer and obtaining opinions of
counsel as necessary or required for the execution of any
amendments or supplements to the Indenture;
m. preparing and delivering certificates of officers of the
Issuer, if necessary, for the release of property from the
lien of the Indenture;
n. preparing and delivering to the Indenture Trustee any
agreements with respect to notice provisions;
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o. preparing and delivering investment instructions to the
Indenture Trustee, as necessary or required under the terms of
the applicable Indenture and in accordance with the applicable
investment policy, adopted from time to time; and
p. taking such actions as may be required of the Issuer under any
agreement between the Issuer and other parties relating to the
Indenture.
SECTION 3. SERVICING DOCUMENTS. The Administrator shall cause the
duties and responsibilities of the Issuer under each of the Student Loans and
the Servicing Documents to be performed, including but not limited to the duties
set forth below. The Administrator shall advise the Issuer when action by the
Issuer is necessary to comply with the Issuer's obligations under the Student
Loans and the Servicing Documents. The Administrator shall prepare for
execution, if required, by the Issuer or shall cause the preparation by other
appropriate persons of 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 Student Loans and the Servicing Documents. In
furtherance of the foregoing, the Administrator shall take all appropriate
action, including but not limited to the following:
a. pursuant to the Servicing Agreements, providing to each
Servicer (or such Servicer's bailee) from time to time, as
necessary, and requiring that each Servicer (or such
Servicer's bailee) maintain physical custody and possession
of, documentation and information relating to Student Loans
transferred to the Issuer pursuant to the Transfer Agreement
and, on and after each applicable date on which Student Loans
are to be purchased (the "Loan Purchase Date"), Student Loans
sold and transferred to the Issuer on each such Loan Purchase
Date, including the documents evidencing such Student Loans
and such additional documentation or information relating to
such Student Loans as is reasonably required for the Student
Loans to be properly serviced by such Servicer;
b. cause to be paid solely from Indenture assets, all amounts to
be paid by the Issuer pursuant to the Transfer Agreement;
c. promptly after each Loan Purchase Date, ensuring that
notification as required under the Higher Education Act and by
the applicable Guarantee Agencies is made to the borrower
under each Student Loan and to the Secretary of Education and
the applicable Guarantee Agencies, as appropriate;
d. promptly after each Loan Purchase Date, notifying the
applicable Servicer of the Indenture Trustee to which each
Student Loan purchased on such Loan Purchase Date has been
assigned and such other information as may be required under
the applicable Servicing Agreement;
e. causing to be paid to each Servicer on behalf of the Issuer,
but solely from Indenture assets, all fees required to be paid
by the Issuer pursuant to the applicable Servicing Agreement;
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<PAGE> 30
f. performing all audits of records and accounts that the Issuer
from time to time may be permitted or required to perform
under the Servicing Agreements;
g. preparing all other documents, reports, filings, instruments,
certificates and opinions as it is the duty of the Issuer to
prepare, file or deliver pursuant to the Servicing Documents;
h. in the event of the default of any Servicer under any
Servicing Agreement, or default of any other party to any
other Basic Document, taking all reasonable steps available to
enforce the Issuer's rights under such documents in respect of
such default;
SECTION 4. TRANSFER AGREEMENT. The Administrator shall take the actions
necessary to cause the duties of the Issuer to be carried out under the
provisions of the Transfer Agreement and any of the rights or obligations
thereunder. The Administrator also shall enforce the rights of the Issuer under
the applicable provisions of the Transfer Agreement to require the Depositor to
repurchase certain Student Loans that have been transferred to the Issuer,
including but not limited to providing notice to the applicable Servicer of each
such repurchase request, endorsing to the Servicer each Student Loan to be
repurchased by the Depositor and taking all other actions necessary to enforce
the Issuer's rights of recourse against the Depositor.
SECTION 5. HIGHER EDUCATION ACT. The Administrator shall take the
actions that are necessary to cause the Issuer to comply with the requirements
of the Higher Education Act and the applicable Guarantee Agencies with respect
to the Student Loans acquired by the Issuer.
SECTION 6.OTHER DUTIES WITH RESPECT TO THE INDENTURE AND SERVICING
DOCUMENTS.
a. In addition to the duties of the Administrator set forth above, the
Administrator shall perform such calculations and shall prepare for execution by
the Issuer or shall cause the preparation by other appropriate persons of 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
Indenture or the Servicing Documents, and shall take all appropriate action that
it is the duty of the Issuer to take pursuant to the Indenture or the Servicing
Documents. The Administrator shall administer, perform or supervise the
performance of such other activities in connection with the trust estate of the
Indenture (including the Servicing Documents) as the Issuer is obligated to
perform and are not covered by any of the foregoing provisions and as are
reasonably within the capability of the Administrator.
b. In carrying out the foregoing duties or any of its other obligations
under this Agreement, the Administrator may enter into transactions with or
otherwise deal with any of its Affiliates; PROVIDED that the terms of any such
transactions or dealings shall be, in the Administrator's opinion, no less
favorable to the Issuer than would be available from unaffiliated parties.
SECTION 7. OTHER ADMINISTRATIVE SERVICES. The Issuer hereby authorizes
the
B-6
<PAGE> 31
Administrator, as its agent, to perform, and the Administrator hereby agrees to
perform, all administrative services necessary or desirable in connection with
the Issuer's existence as a bankruptcy-remote Delaware common law trust holding
the assets described hereunder, including but not limited to the following:
a. subject to the directions of the authorized representatives of
the Issuer, carrying out and performing the day to day
business activities of the Issuer;
b. providing, or causing to be provided, all clerical and
bookkeeping services necessary and appropriate for the Issuer,
including, without limitation, the following services:
(i) maintaining general accounting records of the Issuer,
and preparing for audit such periodic financial
statements as may be necessary or appropriate;
(ii) maintaining records of deposit accounts of the Issuer
established under the Indenture and the Servicing
Documents or otherwise, authorizing withdrawals from
such accounts on behalf of the Issuer and taking all
other actions on behalf of the Issuer as may be
necessary with respect to such accounts;
(iii) (A) preparing for execution by the Issuer and causing
to be filed on behalf of the Issuer such income,
franchise or other tax returns of the Issuer as shall
be required to be filed by applicable law, and (B)
causing to be paid by the Issuer, solely out of funds
of the Issuer, any taxes required to be paid by the
Issuer by applicable law;
(iv) assisting in preparing for execution by the Issuer
amendments to and waivers under the Servicing
Documents and any other documents or instruments
deliverable by the Issuer thereunder or in connection
therewith;
(v) holding, maintaining and preserving executed copies
of the Servicing Documents (to the extent applicable)
and other documents or instruments executed by the
Issuer thereunder or in connection therewith;
(vi) assisting in giving such other notices, consents and
other communications that the Issuer may from time to
time be required or permitted to give under any of
the Servicing Documents or other documents executed
by the Issuer thereunder or in connection therewith;
(vii) facilitating the annual audit of the financial
statements of the Issuer; and
(viii) taking such other actions as may be incidental or
reasonably necessary to accomplish the actions of the
Administrator authorized under this
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subsection b;
c. assisting the Issuer in carrying out the investment and
reinvestment of the funds of the Issuer in accordance with
applicable investment policies; and
d. undertaking such other administrative services as may be
required by the Issuer.
If the Administrator or the Issuer deems it necessary or desirable, any
of the foregoing administrative services may be subcontracted by the
Administrator. Costs and expenses associated with such subcontracting incurred
by the Administrator shall be paid by the Issuer in accordance with Section 11
hereof.
SECTION 8. EXCEPTIONS. Notwithstanding anything to the contrary in this
Agreement, the Administrator shall not be obligated to, and shall not, (1) make
any payments to the holder of the Notes issued under the Indenture, (2) sell the
trust estates of the Indenture to unrelated third parties, or (3) take any other
action that the Issuer directs the Administrator not to take on its behalf.
SECTION 9. EMPLOYEES; OFFICES. All services to be furnished by the
Administrator under this Agreement may be furnished by an officer or employee of
the Administrator or any other person or agent designated or retained by the
Administrator.
The Administrator agrees to provide office space, together with
appropriate materials and any necessary support personnel, for performing the
day to day business activities of the Issuer, all for the compensation provided
in Section 11 hereof.
SECTION 10. NON-MINISTERIAL MATTERS. With respect to matters that in
the reasonable judgment of the Administrator are non-ministerial, the
Administrator shall not take any action unless within a reasonable time before
the taking of such action, the Administrator shall have notified the Issuer of
the proposed action and the Issuer shall not have withheld consent or provided
an alternative direction. For the purpose of the preceding sentence,
"non-ministerial matters" shall include:
a. the amendment of or any supplement to the Indenture;
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 (other than in connection with the
collection of the Student Loans);
c. the amendment, change or modification of the Servicing
Documents;
d. the appointment of successor Indenture Trustee pursuant to the
Indenture or the appointment of successor administrators or
successor servicers, or the consent to the assignment by the
Indenture Trustee of its obligations under the Indenture; and
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e. the removal of the Indenture Trustee.
SECTION 11. COMPENSATION. On or before the last day of each month (the
"Payment Date"), the Issuer shall pay to the Administrator, as compensation for
its services specified hereunder, a fee in the amount of .25% (on a per annum
basis) of the aggregate principal amount of the assets of the Issuer subject to
this Administration Agreement. The monthly fee will be determined on the basis
of the aggregate outstanding principal amount of assets of the Issuer subject to
the Administration Agreement as of the first day of the month of such Payment
Date. If at any time the Issuer requests the Administrator to perform any
additional services not specified hereunder, the Issuer shall pay the
Administrator such additional fees in respect thereof as shall be agreed to by
the Issuer and the Administrator. The Issuer agrees to reimburse the
Administrator for all reasonable expenses, disbursements and advances incurred
or made by the Administrator in connection with the performance of this
Agreement, including, but not limited to, the fees and expenses of
subcontracting, any independent accountants and outside counsel, which
reimbursement shall relate to amounts incurred in a calendar month and shall be
payable by the Issuer to the Administrator on the next succeeding Payment Date.
The Issuer and the Administrator agree that payments to the
Administrator shall be made out of the Collection Fund held under the Indenture.
SECTION 12. REPRESENTATIONS AND WARRANTIES OF THE ISSUER. The Issuer
makes the following representations:
a. CREATION. The Issuer is duly created and validly existing with the
power and authority to own its properties and to conduct its business as such
properties are currently owned and such business is presently conducted.
b. POWER AND AUTHORITY. The Issuer has the power and authority to
execute and deliver this Agreement and to carry out its terms, and the
execution, delivery and performance of this Agreement have been duly authorized
by the Issuer by all necessary action.
c. BINDING OBLIGATION. This Agreement constitutes a legal, valid and
binding obligation of the Issuer enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization and similar laws
relating to creditors' rights generally and subject to general principles of
equity.
d. NO PROCEEDINGS. There are no proceedings or investigations pending
against the Issuer or, to its best knowledge, threatened against the Issuer,
before any court, regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Issuer or its properties: (i)
asserting the invalidity of this Agreement, (ii) seeking to prevent the
consummation of any of the transactions contemplated by this Agreement or (iii)
seeking any determination or ruling that could reasonably be expected to have a
material and adverse effect on the performance by the Issuer of its obligations
under, or the validity or enforceability of, this Agreement.
e. ALL CONSENTS. All authorizations, consents, orders or approvals of
or registrations
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<PAGE> 34
or declarations with any court, regulatory body, administrative agency or other
governmental instrumentality required to be obtained, effected or given by the
Issuer in connection with the execution and delivery by the Issuer of this
Agreement and the performance by the Issuer of the transactions contemplated by
this Agreement have been duly obtained, effected or given and are in full force
and effect.
SECTION 13. REPRESENTATIONS AND WARRANTIES OF THE ADMINISTRATOR. The
Administrator makes the following representations:
a. ORGANIZATION AND GOOD STANDING. The Administrator is duly organized
and validly existing and in good standing in its State of incorporation with the
power and authority to own its properties and to conduct its business as such
properties are currently owned and such business is presently conducted.
b. POWER AND AUTHORITY. The Administrator has the corporate power and
authority to execute and deliver this Agreement and to carry out its terms, and
the execution, delivery and performance of this Agreement have been duly
authorized by the Administrator by all necessary corporate action.
c. BINDING OBLIGATION. This Agreement constitutes a legal, valid and
binding obligation of the Administrator enforceable in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization and similar
laws relating to creditors' rights generally and subject to general principles
of equity.
d. NO PROCEEDINGS. There are no proceedings or investigations pending
against the Administrator or, to its best knowledge, threatened against the
Administrator, before any court, regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Administrator or its
properties: (i) asserting the invalidity of this Agreement, (ii) seeking to
prevent the consummation of any of the transactions contemplated by this
Agreement or (iii) seeking any determination or ruling that could reasonably be
expected to have a material and adverse effect on the performance by the
Administrator of its obligations under, or the validity or enforceability of,
this Agreement.
e. ALL CONSENTS. All authorizations, consents, orders or approvals of
or registrations or declarations with any court, regulatory body, administrative
agency or other governmental instrumentality required to be obtained, effected
or given by the Administrator in connection with the execution and delivery by
the Administrator of this Agreement and the performance by the Administrator of
the transactions contemplated by this Agreement have been duly obtained,
effected or given and are in full force and effect.
SECTION 14. TERM. Subject to the terms hereof, the Administrator may
resign at any time. The Administrator or the Issuer may terminate this Agreement
upon at least 45 days' prior written notice to the other party. Notwithstanding
the foregoing, no resignation or termination shall be effective until 45 days
after written notice has been delivered to the Indenture Trustee and the
Administrative Agent under the Indenture.
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SECTION 15. OBLIGATION TO SUPPLY INFORMATION. The Issuer shall prepare
and supply, or cause the other parties to the Indenture or the Servicing
Documents to prepare and supply, the Administrator with such information
regarding the performance of the Indenture or the Servicing Documents as the
Administrator may from time to time reasonably request in connection with the
performance of its obligations hereunder.
SECTION 16. LIABILITY OF ADMINISTRATOR. The Administrator shall be
liable in accordance herewith only to the extent of the obligations specifically
undertaken by the Administrator under this Agreement.
The Administrator shall indemnify, defend and hold harmless the Issuer,
and all of the officers, directors, employees and agents of the Issuer, from and
against any and all costs, expenses, losses, claims, damages and liabilities to
the extent that any such cost, expense, loss, claim, damage or liability arose
out of, or was imposed upon the Issuer through, the gross negligence, willful
misfeasance or bad faith of the Administrator in the performance of its duties
under this Agreement or by reason of reckless disregard of its obligations and
duties hereunder or thereunder. The Issuer shall notify the Administrator
promptly of any claim for which it may seek indemnity. The Administrator shall
defend the claim and the Administrator shall not be liable for the legal fees
and expenses of the Issuer after it has assumed such defense.
For purposes of this Section 16, in the event of the termination of the
rights and obligations of the Administrator (or any successor thereto pursuant
to Section 20 hereof) pursuant to Section 14 hereof or the resignation by such
Administrator pursuant to this Agreement, unless the Issuer elects not to
appoint a successor Administrator, such Administrator shall be deemed to be the
Administrator pending appointment of a successor Administrator pursuant to
Section 20 hereof.
Indemnification under this Section 16 shall survive the termination of
this Agreement and shall include reasonable fees and expenses of counsel and
expenses of litigation. If the Administrator has made any indemnity payments
pursuant to this Section 16 and the Issuer thereafter collects any of such
amounts from others, the Issuer promptly shall repay such amounts to the
Administrator, without interest.
Neither the Administrator nor any of its directors, officers, employees
or agents shall be under any liability to the Issuer except as provided under
this Agreement for any action taken or for refraining from the taking of any
action pursuant to this Agreement or for errors in judgment; provided that these
provisions shall not protect the Administrator or any such person against any
liability that would otherwise be imposed by reason of willful misfeasance, bad
faith or negligence in the performance of duties or by reason of reckless
disregard of obligations and duties under this Agreement. The Administrator and
any of its directors, officers, employees or agents may rely in good faith on
the advice of counsel or on any document of any kind, prima facie properly
executed and submitted by any person respecting any matters arising hereunder.
Except as provided in this Agreement, the Administrator shall not be
under any obligation to appear in, prosecute or defend any legal action that
shall not be incidental to its duties hereunder and that in its opinion may
involve it in any expense or liability; PROVIDED that
B-11
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the Administrator may undertake any reasonable action that it may deem necessary
or desirable in respect of this Agreement, the Indenture, the Transfer Agreement
and the Servicing Documents and the rights and duties of the parties to this
Agreement, the Indenture, the Transfer Agreement and the Servicing Documents and
the interests of the holders of the Notes under the Indenture.
SECTION 17. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, THE ADMINISTRATOR. Any person (a) into which the Administrator
may be merged or consolidated, (b) which may result from any merger or
consolidation to which the Administrator shall be a party or (c) which may
succeed to the properties and assets of the Administrator substantially as a
whole, shall be the successor to the Administrator hereunder without the
execution or filing of any documents or any further act by any of the parties to
this Agreement; PROVIDED that the Administrator hereby covenants that, if the
surviving Administrator is other than Student Loan Funding Resources, Inc. or an
Affiliate, it will not consummate any of the foregoing transactions except upon
satisfaction of the following: (i) the surviving Administrator executes an
agreement of assumption to perform every obligation of the Administrator under
this Agreement, (ii) immediately after giving effect to such transaction, no
representation or warranty made pursuant to Section 13 has been breached and no
Administrator Default, and no event that, after notice or lapse of time, or
both, would become an Administrator Default has occurred and is continuing,
(iii) the surviving Administrator has delivered to the Indenture Trustee a
certificate of an officer of the surviving Administrator and an opinion of
counsel each stating that such consolidation, merger or succession and such
agreement of assumption comply with this section and that all conditions
precedent, if any, provided for in this Agreement relating to such transaction
have been complied with, and (iv) such transaction will not result in a material
adverse Federal or state tax consequence to the holders of Notes under the
Indenture. Anything in this Section 17 to the contrary notwithstanding, the
Administrator may at any time assign its rights, obligations and duties under
this Agreement to an Affiliate.
SECTION 18. ADMINISTRATOR DEFAULT. The occurrence and continuance of
any one of the following events shall constitute an "Administrator Default":
a. any act or omission by the Administrator that results in a failure
to pay principal or interest or Carryover Interest on the Notes when such
principal or interest Carryover Interest becomes due and payable in accordance
with the Notes and the Indenture;
b. any failure by the Administrator duly to observe or to perform in
any material respect any covenant or agreement of the Administrator set forth in
this Agreement, which failure continues unremedied for a period of 30 days after
the date on which written notice of such failure has been given to the
Administrator by the Issuer;
c. (i) having entered involuntarily against it an order for relief
under the Bankruptcy Code of 1978, as amended, (ii) not paying, or admitting in
writing its inability to pay, its debts generally as they become due or
suspending payment of its obligations, (iii) making an assignment for the
benefit of creditors, (iv) applying for, seeking, consenting to, or acquiescing
in, the appointment of a receiver, custodian, trustee, conservator, liquidator
or similar official for it or any substantial part of its property, (v)
instituting any proceeding seeking to have entered
B-12
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against it an order for relief under the Bankruptcy Code of 1978, as amended, to
adjudicate it insolvent, or seeking dissolution, winding up, liquidation,
reorganization, arrangement, marshaling of assets, adjustment or composition of
it or its debts under any law relating to bankruptcy, insolvency or
reorganization, or relief of debtors or failing to file an answer or other
pleading denying the material allegations of any such proceeding filed against
it, (vi) failing to contest in good faith any appointment or proceeding
described in Section 18(d) hereof or (vii) taking any action in furtherance of
any of the foregoing purposes; or
d. the appointment of a custodian, receiver, trustee, conservator,
liquidator or similar official for the Administrator or any substantial part of
the property of the Administrator, or the institution of a proceeding described
in Section 18(c)(v) against the Administrator, which appointment continues
undischarged or which proceeding continues undismissed or unstayed for a period
of 60 or more days.
In the case of any Administrator Default, so long as such Administrator
Default has not been remedied, the Issuer or the Indenture Trustee shall, by
written notice to the Administrator of such Administrator Default, terminate all
of the rights and obligations (other than the obligations set forth in Section
16) of the Administrator under this Agreement with respect to such Indenture. On
or after the receipt by the Administrator of such written notice, all authority
and power of the Administrator under this Agreement shall, without further
action, be carried out by the Issuer or shall pass to and be vested in such
successor Administrator as may be appointed under Section 19; and, without
limitation, the Issuer is hereby authorized and empowered to execute and
deliver, for the benefit of the predecessor Administrator, as attorney-in-fact
or otherwise, any and all documents and other instruments, and to do or
accomplish all other acts or things necessary or appropriate to effect the
purposes of such notice of termination. The predecessor Administrator shall
cooperate with the successor Administrator in effecting the termination of the
responsibilities and rights of the predecessor Administrator under this
Agreement. All reasonable costs and expenses (including attorneys' fees)
incurred in connection with amending this Agreement to reflect such succession
as Administrator pursuant to this Section 18 shall be paid by the predecessor
Administrator upon presentation of reasonable documentation of such costs and
expenses.
SECTION 19. APPOINTMENT OF SUCCESSOR.
a. Upon receipt by the Administrator of notice of termination pursuant
to Section 14, or the resignation by the Administrator in accordance with the
terms of this Agreement, the predecessor Administrator shall continue to perform
its functions as Administrator under this Agreement, in the case of termination,
only until the date specified in such termination notice or, if no such date is
specified in a notice of termination, until receipt of such notice and, in the
case of resignation, until the date a successor Administrator is appointed by
the Issuer. In the event of the termination or resignation hereunder of the
Administrator, the Issuer may appoint a successor Administrator. Any such
successor Administrator shall accept its appointment by a written assumption.
b. Upon appointment, the successor Administrator shall be the successor
in all respects to the predecessor Administrator and shall be subject to all of
the responsibilities, duties
B-13
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and liabilities placed on the predecessor Administrator that arise thereafter or
are related thereto and shall be entitled to payment of compensation in
accordance with the terms of this Agreement, or such other terms as are agreed
to by the Issuer, and all of the rights granted to the predecessor Administrator
by the terms and provisions of this Agreement.
SECTION 20. RELIANCE ON INFORMATION OBTAINED FROM THIRD PARTIES. The
Issuer recognizes that the accuracy and completeness of the records maintained
and the information supplied by the Administrator hereunder is dependent upon
the accuracy and completeness of the information obtained by the Administrator
from the parties to the Indenture and the Servicing Documents and other sources
and the Administrator shall not be responsible for any inaccuracy in the
information so obtained or for any inaccuracy in the records maintained by the
Administrator hereunder which may result therefrom.
SECTION 21. NOTICES. All notices, demands, instructions and other
communications required or permitted to be given to or made upon either party
hereto shall be in writing (including by facsimile transmission) and shall be
personally delivered or sent by guaranteed overnight delivery or by facsimile
transmission (to be followed by personal or guaranteed overnight delivery) and
shall be deemed to be given for purposes of this Agreement on the date that such
writing is received by the intended recipient thereof in accordance with the
provisions of this Section 21. Unless otherwise specified in a notice sent or
delivered in accordance with the foregoing provisions of this Section 21,
notices, demands, instructions and other communications in writing shall be
given to or made upon the respective parties thereto at their respective
addresses as follows:
The Issuer:
Firstar Bank, National Association, as Co-Owner Trustee
of Student Loan Funding 1999-A/B Trust
425 Walnut Street
ML5125 P.O. Box 1118
Cincinnati, Ohio 45202-1118
The Administrator:
Student Loan Funding Resources, Inc.
One West Fourth Street, Suite 200
Cincinnati, Ohio 45202
Attention: Treasurer
SECTION 22. AMENDMENT. This Agreement may be amended in writing by the
Administrator and the Issuer. Promptly after the execution of any such
amendment, the Administrator shall furnish written notification of the substance
of such amendment to the Indenture Trustee.
SECTION 23. ASSIGNMENT. Except as provided in Section 17 hereof or as
contemplated by the Indenture, this Agreement may not be assigned by either
party hereto without the prior
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written consent of the other party.
SECTION 24. INDEPENDENCE OF ADMINISTRATOR. For all purposes of this
Agreement, the Administrator shall be an independent contractor. Unless
expressly authorized by the Issuer, the Administrator shall have no authority to
act for or represent the Issuer in any way and shall not otherwise be deemed an
agent of the Issuer.
SECTION 25. NO JOINT VENTURE. Nothing contained in this Agreement shall
constitute the Issuer and the Administrator as members of any partnership, joint
venture, association, syndicate, unincorporated business or other separate
entity or shall be deemed to confer on either of them any express, implied or
apparent authority to incur any obligation or liability on behalf of the other.
SECTION 26. OTHER ACTIVITIES OF ADMINISTRATOR. Nothing herein shall
prevent the Administrator or its Affiliates from engaging in other business 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.
SECTION 27. NO PETITION. The Administrator covenants and agrees that,
notwithstanding the termination of this Agreement, the Administrator will not
institute against, or join in instituting against the Issuer, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding, or other
proceeding under any Federal or state bankruptcy or similar law ordering the
winding up or liquidation of the Issuer's affairs or appointing a receiver,
liquidator, trustee, or other similar official, of the Issuer or any substantial
part of its property, for one year and a day after the termination of this
Agreement. This Section 27 shall survive the termination of this Agreement.
SECTION 28. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Ohio, without regard to
its conflict of law provisions.
SECTION 29. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties hereto with respect to the matters covered hereby
and supersedes all prior agreements and understandings between the parties.
SECTION 30. SUCCESSORS; COUNTERPARTS.
a. This Agreement shall be binding upon, inure to the benefit of and be
enforceable by the respective successors and assigns of each of the Issuer and
the Administrator.
b. This Agreement may be executed in several counterparts, each of
which shall be deemed an original hereof and all of which taken together shall
constitute one and the same instrument.
SECTION 31. CAPTIONS. The captions in this Agreement are for
convenience of reference only and shall not define or limit any of the terms or
provisions hereof.
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<PAGE> 40
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
STUDENT LOAN FUNDING 1999-A/B TRUST
By Firstar Bank, National Association, not
in its individual capacity, but solely as
Co-Owner Trustee, on behalf of the Issuer
By:
--------------------------------------
Name:
Title:
STUDENT LOAN FUNDING RESOURCES, INC.
as Administrator
By:
--------------------------------------
Name:
Title:
Firstar Bank, National Association, as the Eligible Lender Trustee
under the Indenture, hereby agrees to take such actions and execute such
documents as may be reasonably requested by the Administrator in order for the
Administrator to provide the services and perform its duties and
responsibilities under the foregoing Agreement.
Firstar Bank, National Association,
as Eligible Lender Trustee
By:
--------------------------------------
Name:
Title:
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<PAGE> 41
Firstar Bank, National Association, as the Indenture Trustee under the
Indenture, hereby agrees to take such actions and execute such documents as may
be reasonably requested by the Administrator in order for the Administrator to
provide the services and perform its duties and responsibilities under the
foregoing Agreement.
Firstar Bank, National Association,
as Indenture Trustee
By:
--------------------------------------
Name:
Title:
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<PAGE> 42
EXHIBIT C
to
Transfer and Sale Agreement,
dated as of October 1, 1999,
------------------------------------------------------------------------------
MASTER SERVICING AGREEMENT
BETWEEN
STUDENT LOAN FUNDING 1999-A/B TRUST,
ISSUER
AND
STUDENT LOAN FUNDING RESOURCES, INC.,
MASTER SERVICER
DATED AS OF OCTOBER 1, 1999
------------------------------------------------------------------------------
C-1
<PAGE> 43
MASTER SERVICING AGREEMENT
MASTER SERVICING AGREEMENT dated as of October 1, 1999 between STUDENT
LOAN FUNDING 1999-A/B TRUST, a Delaware common law trust (the "Issuer"), and
STUDENT LOAN FUNDING RESOURCES, INC., an Ohio corporation, as master servicer
(the "Master Servicer"). References to the Issuer or Student Loan Funding
1999-A/B Trust shall be deemed to be references to FIRSTAR BANK, NATIONAL
ASSOCIATION, not in its individual capacity, but solely as Co-Owner Trustee
under the Trust Agreement dated as of October 1, 1999 (the "Co-Owner Trustee").
WHEREAS, the Issuer, directly or through an eligible lender trustee,
owns a portfolio of student loans; and
WHEREAS, the Master Servicer is willing to arrange for the servicing of
such student loans.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. DEFINITIONS. Whenever used in this Agreement, the
following words and phrases shall have the following meanings:
"AFFILIATE" means any corporation or other entity directly or
indirectly controlling or controlled by, or under direct or indirect common
control with, the Master Servicer or the Issuer. For purposes of this
definition, "control" means the power to direct management and policies of such
entity, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise.
"AGREEMENT" means this Master Servicing Agreement, as the same may be
amended, supplemented or otherwise modified from time to time.
"GUARANTEE AGENCY" means a state agency or private nonprofit
corporation which guarantees certain payments of principal of and interest on
Student Loans pursuant to a guarantee agreement.
"GUARANTEE AGREEMENT" means a contract between a Guarantee Agency and a
lender providing for, or a certificate or other evidence of, the guarantee of
Student Loans.
"GUARANTEE PAYMENTS" means those payments made by a Guarantee Agency
with respect to a Student Loan.
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"HIGHER EDUCATION ACT" means the Higher Education Act of 1965, as
amended, together with any rules and regulations promulgated by the U.S.
Department of Education or the Guarantee Agencies.
"INDENTURE" means the Indenture of Trust, together with the Terms
Supplement, each dated as of October 1, 1999, by and among the Issuer, Firstar
Bank, National Association, as eligible lender trustee (the "Eligible Lender
Trustee"), and Firstar Bank, National Association, as indenture trustee (the
"Indenture Trustee").
"MASTER SERVICER DEFAULT" means an event specified in Section 4.1 of
this Agreement.
"MASTER SERVICING FEE" has the meaning specified in Section 2.2 of this
Agreement.
"NOTEHOLDER" means a holder of a note of the Issuer issued pursuant to
the Indenture.
"PERSON" means any individual, corporation, limited liability company,
estate, partnership, joint venture, association, joint stock company, trust
(including any beneficiary thereof), unincorporated organization or government
or any agency or political subdivision thereof.
"SERVICER" means any servicing entity selected by the Master Servicer,
including without limitation the Master Servicer and/or any Affiliate of the
Master Servicer, to provide servicing for all or a part of the Student Loans,
including but not limited to application, review, disbursement, administration,
collection, due diligence and claims services, provided, that such entity is
qualified to be a servicer of such Student Loans in accordance with any
indentures or other documents of the Issuer relating to such Student Loans.
"SERVICING AGREEMENT" means an agreement, including all addenda
thereto, between a Servicer and the Issuer and/or the Master Servicer for the
servicing of all or part of the Student Loans subject to this Agreement.
"STUDENT LOAN" means a student loan incurred under the Higher Education
Act by eligible students attending eligible post secondary educational
institutions.
ARTICLE II
ADMINISTRATION AND SERVICING OF STUDENT LOANS
SECTION 2.1. DUTIES OF MASTER SERVICER.
(a) Subject to the written direction of the Issuer, the Master
Servicer, for the benefit of the Issuer (to the extent provided herein), shall
provide for, arrange and maintain, or take such actions as are necessary to
provide for, arrange and maintain, the servicing and administration of the
Student Loans in accordance with prudent industry practices with one or more
Servicers in accordance with this Agreement and shall perform the other actions
required by the Master Servicer under this Agreement, with reasonable care. The
Master Servicer shall have full authority to do anything it reasonably deems
appropriate in connection with providing for,
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arranging and maintaining such servicing and administration relationships with
Servicers, including without limitation (1) entering into one or more Servicing
Agreements with the Servicers and/or with the Issuer and the Servicers, (2)
providing or arranging for the replacement of any Servicing Agreement that
expires or is terminated, (3) consulting with any Servicer regarding the
negotiation, execution and performance of any Servicing Agreement or the
servicing and administration of any related Student Loan, and (4) terminating
any Servicing Agreement that may exist in accordance with the terms and
conditions of such Servicing Agreement, provided, that upon termination of any
such Servicing Agreement, the Master Servicer shall arrange for an appropriate
Servicing Agreement with a Servicer pertaining to and maintaining continuous
servicing of the Student Loans previously serviced under the terminated
Servicing Agreement. The servicing arrangements provided for by the Master
Servicer shall maintain servicing standards in accordance in all material
respects with all applicable agreements and indentures of the Issuer and all
applicable federal and state laws, including all applicable standards,
guidelines and requirements of the Higher Education Act and any Guarantee
Agreement with respect to the Student Loans, the failure to comply with which
would adversely affect the eligibility of one or more of the Student Loans for
Guarantee Payments or would have a material adverse effect on the Noteholders.
The Master Servicer may perform its responsibilities hereunder through other
agents or independent contractors, but shall not thereby be released from any of
its responsibilities as hereinafter set forth.
As part of its master servicing responsibilities hereunder, the Master
Servicer, for the benefit of the Issuer, shall oversee, administer and enforce
the obligations of each Servicer under the related Servicing Agreement. Such
enforcement, including, without limitation, the legal prosecution of claims,
termination of such Servicing Agreements and the pursuit of other appropriate
remedies, shall be in such form and carried out to such an extent and at such
time as the Master Servicer, in its good faith business judgment, would require
were it the owner of the related Student Loans.
(b) EXCEPTIONS. Notwithstanding anything to the contrary in this
Agreement, except as expressly provided herein, the Master Servicer, in its
capacity hereunder, shall not be obligated to, and shall not (1) make any
payments to the Noteholders, or (2) take any other action that the Issuer
directs the Master Servicer in writing not to take on its behalf.
SECTION 2.2. MASTER SERVICING FEE. On or before the last day of each
month (the "Payment Date"), the Issuer shall pay to the Master Servicer, as
compensation for its services specified hereunder, a fee in the amount of .02%
(on a per annum basis) of the aggregate principal amount of the Student Loans
subject to this Agreement (the "Master Servicing Fee"). The Master Servicing Fee
will be determined on the basis of the aggregate outstanding principal amount of
Student Loans subject to this Agreement as of the first day of the month of each
such Payment Date. The Issuer agrees to reimburse the Master Servicer for all
reasonable expenses, disbursements and advances incurred or made by the Master
Servicer in connection with the performance of this Agreement, including, but
not limited to, the fees and expenses of obtaining Servicers, subcontracting,
any independent accountants and outside counsel, which reimbursement shall
relate to amounts incurred in a calendar month and shall be payable by the
Issuer to the Master Servicer on the next succeeding Payment Date.
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SECTION 2.3. COOPERATION BY THE ISSUER. The Issuer agrees to cooperate
and assist the Master Servicer in any manner reasonably requested by the Master
Servicer in connection with the servicing and administration of the Student
Loans subject to this Agreement and the prompt and full performance of the
Master Servicer's duties hereunder, including without limitation, executing,
delivering and performing Servicing Agreements and all other agreements,
documents or certificates relating, directly or indirectly, to the servicing and
administration of the Student Loans subject to this Agreement and the prompt and
full performance of the Master Servicer's duties hereunder.
ARTICLE III
THE MASTER SERVICER
SECTION 3.1. REPRESENTATIONS OF MASTER SERVICER. The Master Servicer
makes the following representations on which the Issuer is deemed to have relied
in executing and delivering this Agreement. The representations speak as of the
date of execution and delivery of the Agreement and shall survive such date.
(a) ORGANIZATION AND GOOD STANDING. The Master Servicer is duly
organized and validly existing as a corporation in good standing under the laws
of the State of Ohio with the corporate power and authority to own its
properties and to conduct its business as such properties are currently owned
and such business is presently conducted, and had at all relevant times, and
has, the power, authority and legal right to perform its obligations as required
by this Agreement.
(b) DUE QUALIFICATION. The Master Servicer is duly qualified to do
business and has obtained all necessary licenses and approvals in all
jurisdictions in which the ownership or lease of property or the conduct of its
business (including the performance of its obligations as required by this
Agreement) shall require such qualifications except where failure to obtain the
same would not have a material adverse effect on its business or property.
(c) POWER AND AUTHORITY OF THE MASTER SERVICER. The Master Servicer has
the corporate power and authority to execute and deliver this Agreement and to
perform its obligations hereunder, and the execution, delivery and performance
of this Agreement have been duly authorized by the Master Servicer by all
necessary corporate action. All authorizations, consents, orders or approvals of
or registrations or declarations with any court, regulatory body, administrative
agency or other government instrumentality required to be obtained, effected or
given by the Master Servicer in connection with the execution and delivery by
the Master Servicer of this Agreement and the performance by the Master Servicer
of the transactions contemplated by this Agreement have been duly obtained,
effected or given and are in full force and effect, except where failure to
obtain the same would not have a material adverse effect upon the rights of the
Issuer hereunder.
(d) BINDING OBLIGATION. This Agreement constitutes a legal, valid and
binding obligation of the Master Servicer, enforceable in accordance with its
terms, subject to applicable bankruptcy, insolvency, moratorium, fraudulent
conveyance, reorganization and similar laws now or hereafter in effect relating
to creditors' rights generally, and subject to general principles
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of equity (whether applied in a proceeding of law or in equity).
(e) NO VIOLATION. The consummation of the transactions contemplated by
this Agreement and the fulfillment of the terms hereof will not result in any
breach of any of the terms and provisions of, or constitute (with or without
notice or lapse of time or both) a default under the Articles of Incorporation
or Code of Regulations of the Master Servicer, or any material indenture,
agreement or other instrument to which the Master Servicer is a party or by
which it is bound; nor result in the creation or imposition of any lien upon any
of its properties pursuant to the terms of any such indenture, agreement or
other instrument; or violate any law or, to the best of its knowledge, any
order, rule or regulation applicable to the Master Servicer of any court or of
any federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Master Servicer or its
properties.
(f) NO PROCEEDINGS. There are no proceedings or investigations pending
against the Master Servicer, or, to its best knowledge, threatened against the
Master Servicer, before any court, regulatory body, administrative agency or
other governmental instrumentality having jurisdiction over the Master Servicer
or its properties: (i) asserting the invalidity of this Agreement, (ii) seeking
to prevent the consummation of any of the transactions contemplated by this
Agreement, or (iii) seeking any determination or ruling that could reasonably be
expected to have a material and adverse effect on the performance by the Master
Servicer of its obligations under, or the validity or enforceability of this
Agreement.
SECTION 3.2. INDEMNITIES OF MASTER SERVICER. The Master Servicer shall
be liable in accordance herewith only to the extent of the obligations
specifically undertaken by the Master Servicer under this Agreement.
The Master Servicer shall indemnify, defend and hold harmless the
Issuer and all of the officers, employees and agents of the Issuer, from any and
all costs, expenses, losses, claims, damages and liabilities (including
reasonable attorneys' fees and expenses) to the extent arising out of, or
imposed upon any such Person through, the negligence, willful misfeasance or bad
faith of the Master Servicer in the performance of its obligations and duties
under this Agreement or by reason of the reckless disregard of its obligations
and duties under this Agreement, where the final determination that any such
cost, expense, loss, claim, damage or liability arose out of, or was imposed
upon any such Person through, any such negligence, willful misfeasance, bad
faith or recklessness (other than errors in judgment) on the part of the Master
Servicer is established by a court of law, by an arbitrator or by way of
settlement agreed to in writing by the Master Servicer. Notwithstanding the
foregoing, if the Master Servicer is rendered unable, in whole or in part, by
virtue of an act of God, act of war, fire, earthquake or other natural disaster,
to satisfy its obligations under this Agreement, the Master Servicer shall not
be deemed to have breached any such obligation upon the sending of written
notice of such event to the other parties hereto, for so long as the Master
Servicer remains unable to perform such obligation as a result of such event.
This provision shall not be construed to limit the Master Servicer's or any
other party's rights, obligations, liabilities, claims or defenses which arise
as a matter of law or pursuant to any other provision of this Agreement.
The Issuer shall notify the Master Servicer promptly of any claim for
which it may seek indemnity. The Master Servicer shall defend the claim and the
Master Servicer shall not be
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liable for the legal fees and expenses of the Issuer after it has assumed such
defense.
Indemnification under this Section 3.2 shall survive the termination of
this Agreement and shall include reasonable fees and expenses of counsel and
expenses of litigation. If the Master Servicer has made any indemnity payments
pursuant to this Section 3.2 and the Issuer thereafter collects any of such
amounts from others, the Issuer promptly shall repay such amounts to the Master
Servicer, without interest.
Anything in this Agreement to the contrary notwithstanding, neither the
Master Servicer nor any of its directors, officers, employees or agents shall be
liable for any cost, expense, loss, claim damage or liability that arises out
of, or was imposed upon any Person seeking indemnity under this Section 3.2
through any negligence, willful misfeasance, bad faith, recklessness or other
act, error or omission on the part of any Servicer under a Servicing Agreement,
provided, that this provision shall not protect the Master Servicer or any such
Person against any liability that would otherwise be imposed by reason of
willful misfeasance, bad faith or negligence in the performance of its duties
(except for errors in judgment) or by reason of reckless disregard of its
obligations and duties under this Agreement.
SECTION 3.3. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, MASTER SERVICER. Any Person (a) into which the Master Servicer
may be merged or consolidated, (b) which may result from any merger or
consolidation to which the Master Servicer shall be a party or (c) which may
succeed to the properties and assets of the Master Servicer, substantially as a
whole, shall be the successor to the Master Servicer without the execution or
filing of any document or any further act by any of the parties to this
Agreement; provided, that the Master Servicer hereby covenants that, if the
surviving Master Servicer is other than Student Loan Funding Resources, Inc. or
an Affiliate, it will not consummate any of the foregoing transactions except
upon satisfaction of the following: (i) the surviving Master Servicer executes
an agreement of assumption to perform every obligation of the Master Servicer
under this Agreement, (ii) immediately after giving effect to such transaction,
no representation or warranty made pursuant to Section 3.1 shall have been
breached and no Master Servicer Default, and no event that, after notice or
lapse of time, or both, would become a Master Servicer Default shall have
occurred and be continuing, (iii) the surviving Master Servicer shall have
delivered to the Issuer a certificate of an officer of the surviving Master
Servicer and an opinion of counsel each stating that such consolidation, merger
or succession and such agreement of assumption comply with this Section 3.3 and
that all conditions precedent, if any, provided for in this Agreement relating
to such transaction have been complied with, and (iv) such transaction will not
result in a material adverse federal or state tax consequence to the Issuer or
the holders of any bonds, notes or other indebtedness of the Issuer.
SECTION 3.4. LIMITATION ON LIABILITY OF MASTER SERVICER AND OTHERS.
Neither the Master Servicer nor any of its directors, officers, employees or
agents shall be under any liability to the Issuer except as provided under this
Agreement for any action taken or for refraining from the taking of any action
pursuant to this Agreement or for errors in judgment or for any action or
omission by any Servicer pursuant to a Servicing Agreement; provided, that this
provision shall not protect the Master Servicer or any such Person against any
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liability that would otherwise be imposed by reason of willful misfeasance, bad
faith or negligence (except for errors in judgment) in the performance of its
duties or by reason of reckless disregard of its obligations and duties under
this Agreement. Without limiting the generality of the foregoing, the Master
Servicer in particular shall not be liable for any servicing errors or
interruptions resulting from any failure of any Servicer to maintain computer
and other information systems that are year-2000 compliant. The Master Servicer
and any of its respective directors, officers, employees or agents may rely in
good faith on any document of any kind prima facie properly executed and
submitted by any Person respecting any matters arising under this Agreement.
Except as provided in this Agreement, the Master Servicer shall not be under any
obligation to appear in, prosecute or defend any legal action that shall be
incidental to its duties in accordance with this Agreement and that in its
opinion may involve it in any expense or liability.
ARTICLE IV
DEFAULT
SECTION 4.1. MASTER SERVICER DEFAULT. The occurrence and continuance of
any one of the following events shall constitute a "Master Servicer Default":
(a) any failure on the part of the Master Servicer duly to observe or
to perform in any material respect any of the covenants or agreements of the
Master Servicer set forth in this Agreement, which failure shall (i) materially
and adversely affect the rights of the Noteholders and (ii) continue unremedied
for a period of 60 days after the date on which written notice of such failure,
requiring the same to be remedied, shall have been given to the Master Servicer
by the Issuer (or for such longer period, not in excess of 120 days, as may be
reasonably necessary to remedy such default; provided that such default is
capable of remedy within 120 days and the Master Servicer delivers a certificate
of an officer of the Master Servicer to the Issuer to such effect and to the
effect that the Master Servicer has commenced or will promptly commence, and
will diligently pursue, all reasonable efforts to remedy such default); or
(b) (i) having entered involuntarily against it an order for relief
under any applicable Federal or state bankruptcy, insolvency or similar law now
or hereafter in effect, (ii) not paying, or admitting in writing its inability
to pay, its debts generally as they become due or suspending payment of its
obligations, (iii) making an assignment for the benefit of creditors, (iv)
applying for, seeking, consenting to, or acquiescing in, the appointment of a
receiver, custodian, trustee, conservator, liquidator or similar official for it
or any substantial part of its property, (v) instituting any proceeding seeking
to have entered against it an order for relief under any applicable Federal or
state bankruptcy, insolvency or similar law now or hereafter in effect, to
adjudicate it insolvent, or seeking dissolution, winding up, liquidation,
reorganization, arrangement, marshaling of assets, adjustment or composition of
it or its debts under any law relating to bankruptcy, insolvency or
reorganization, or relief of debtors or failing to file an answer or other
pleading denying the material allegations of any such proceeding filed against
it, (vi) failing to contest in good faith any appointment or proceeding
described in Section 4.1(c) hereof or (vii) taking any action in furtherance of
any of the foregoing purposes; or
(c) the appointment of a custodian, receiver, trustee, conservator,
liquidator or similar
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official for the Master Servicer or any substantial part of the property of the
Master Servicer, or the institution of a proceeding described in Section
4.1(b)(v) against the Master Servicer, which appointment continues undischarged
or which proceeding continues undismissed or unstayed for a period of 60 or more
consecutive days.
In the case of any Master Servicer Default, so long as the Master
Servicer Default shall not have been remedied prior to the expiration of any
applicable cure period, the Issuer, by notice then given in writing to the
Master Servicer of such Master Servicer Default, may terminate all the rights
and obligations (other than the obligations set forth in Section 3.2 and Section
6.12) of the Master Servicer under this Agreement. On or after the receipt by
the Master Servicer of such written notice, all authority and power of the
Master Servicer under this Agreement shall, without further action, pass to and
be vested in the Issuer or such successor Master Servicer as may be appointed
under Section 4.2; and, without limitation, the Issuer is hereby authorized and
empowered to execute and deliver, on behalf of the predecessor Master Servicer,
as attorney-in-fact or otherwise, any and all documents and other instruments,
and to do or accomplish all other acts or things necessary or appropriate to
effect the purposes of such notice of termination, whether to complete the
transfer and endorsement of the Student Loans and related documents, or
otherwise.
SECTION 4.2. APPOINTMENT OF SUCCESSOR.
(a) Upon the Master Servicer's receipt of notice of termination,
pursuant to Section 4.1 above or the Master Servicer's resignation in accordance
with the terms of this Agreement, the predecessor Master Servicer shall continue
to perform its functions as Master Servicer under this Agreement, in the case of
termination, only until the date specified in such termination notice or, if no
such date is specified in a notice of termination, until receipt of such notice
and, in the case of resignation, until the date 30 days from the delivery to the
Issuer of written notice of such resignation (or written confirmation of such
notice) in accordance with the terms of this Agreement. In the event of the
Master Servicer's termination hereunder, the Issuer, may appoint a successor
Master Servicer, and the successor Master Servicer shall accept its appointment
by a written assumption in form acceptable to the Issuer.
(b) Upon appointment, the successor Master Servicer shall be the
successor in all respects to the predecessor Master Servicer and shall be
subject to all the responsibilities, duties and liabilities arising thereafter
relating thereto placed on the predecessor Master Servicer and shall be entitled
to the Master Servicing Fee, or such other terms as are agreed to by the Issuer,
and all the rights granted to the predecessor Master Servicer by the terms and
provisions of this Agreement. No successor Master Servicer shall be liable for
any acts or omissions of any predecessor Master Servicer.
(c) The predecessor Master Servicer shall cooperate with the successor
Master Servicer and the Issuer in effecting the termination of the
responsibilities and rights of the predecessor Master Servicer under this
Agreement. All reasonable costs and expenses (including attorneys' fees)
incurred in connection with transferring the duties of the predecessor Master
Servicer to the successor Master Servicer and amending this Agreement to reflect
such succession as Master Servicer pursuant to this Section shall be paid by the
predecessor Master
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Servicer upon presentation of reasonable documentation of such costs and
expenses.
SECTION 4.3. PAYMENT OF MASTER SERVICING FEE. If the Master Servicer
shall change, the predecessor Master Servicer shall be entitled to receive any
accrued and unpaid Master Servicing Fees through the date of the successor
Master Servicer's acceptance hereunder.
ARTICLE V
TERM; TERMINATION
SECTION 5.1. TERM; TERMINATION. The Master Servicer or the Issuer may
terminate this Agreement upon not less than 45 days' prior written notice to the
other party.
ARTICLE VI
MISCELLANEOUS PROVISIONS
SECTION 6.1. AMENDMENT. The provisions of this Agreement may not be
amended, waived or modified unless such amendment, waiver or modification is in
writing and signed by the Master Servicer and the Issuer. Inaction or failure to
demand strict performance shall not be deemed a waiver.
SECTION 6.2. NOTICES. All demands, notices, instructions and
communications required or permitted to be given to or made upon either party
hereto shall be in writing (including by facsimile transmission) and shall be
personally delivered or sent by guaranteed overnight delivery, by facsimile
transmission (to be followed by personal or guaranteed overnight delivery) or by
postage prepaid registered or certified mail, return receipt requested, and
shall be deemed to be given for purposes of this Agreement on the date that such
writing is received by the intended recipient thereof in accordance with the
provisions of this Section 6.2. Unless otherwise specified in a notice sent or
delivered in accordance with the foregoing provisions of this Section 6.2,
notices, demands, instructions and other communications in writing shall be
given to or made upon the respective parties thereto at their respective
addresses as follows:
The Issuer:
Firstar Bank, National Association, as Co-Owner Trustee
of Student Loan Funding 1999-A/B Trust
425 Walnut Street
ML5125 P.O.Box 1118
Cincinnati, Ohio 45202-1118
The Master Servicer:
Student Loan Funding Resources, Inc.
One West Fourth Street, Suite 200
Cincinnati, Ohio 45202
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Attention: Senior Vice President and CFO
SECTION 6.3. ASSIGNMENT. Notwithstanding anything to the contrary
contained herein, except as provided in Sections 2.1 and 3.3 and as provided in
the provisions of this Agreement concerning the resignation and succession of
the Master Servicer, this Agreement may not be assigned by the Issuer or the
Master Servicer without the prior written consent of the other party.
SECTION 6.4. LIMITATIONS ON RIGHTS OF OTHERS. The provisions of this
Agreement are solely for the benefit of the Issuer and the Master Servicer, and
nothing in this Agreement, whether express or implied, shall be construed to
give to any other Person any legal or equitable right, remedy or claim under or
in respect of this Agreement or any covenants, conditions or provisions
contained herein.
SECTION 6.5. SEVERABILITY. Any provision of this Agreement that 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 6.6. 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 6.7. 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 6.8. GOVERNING LAW. This Agreement shall be construed in
accordance with the laws of the State of Ohio , without reference to principles
of conflicts of law, and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws.
SECTION 6.9. INDEPENDENCE OF THE MASTER SERVICER. For all purposes of
this Agreement, the Master Servicer shall be an independent contractor and shall
not be subject to the supervision of the Issuer with respect to the manner in
which it accomplishes the performance of its obligations hereunder. Unless
expressly authorized by the Issuer, the Master Servicer shall have no authority
to act for or represent the Issuer in any way and shall not otherwise be deemed
an agent of the Issuer.
SECTION 6.10. NO JOINT VENTURE. Nothing contained in this Agreement (i)
shall constitute the Master Servicer and the Issuer 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.
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SECTION 6.11. OTHER ACTIVITIES OF MASTER SERVICER. Nothing herein shall
prevent the Master Servicer or its Affiliates from engaging in other business
or, in its or their sole discretion, from acting in a similar capacity as a
master servicer for any other Person or entity even though such Person or entity
may engage in business activities similar to those of the Issuer.
SECTION 6.12 NO PETITION. The Master Servicer covenants and agrees
that, notwithstanding the termination of this Agreement, the Master Servicer
will not institute against, or join in instituting against, the Issuer, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding,
or other proceeding under any Federal or state bankruptcy or similar law
ordering the winding up or liquidation of the Issuer's affairs or appointing a
receiver, liquidator, trustee, or other similar official, of the Issuer or any
substantial part of its property, for one year and a day after the termination
of this Agreement. This Section 6.12 shall survive the termination of this
Agreement.
SECTION 6.13. LIMITED RECOURSE. Notwithstanding anything to the
contrary contained herein, the obligations of the Issuer hereunder shall not be
recourse to the Issuer (or any Person or organization acting on behalf of the
Issuer or any affiliate, officer, member, Management Committee member, agent or
employee of the Issuer), and shall be paid solely from moneys in the Collection
Fund established under the Indenture. The Master Servicer agrees that to the
extent such funds are insufficient or unavailable to pay any amounts owing to
the Master Servicer from the Issuer pursuant to this Agreement, it shall not
institute a claim against the Issuer.
SECTION 6.14. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties hereto with respect to the matters covered hereby
and supercedes all prior agreements and understandings between the parties.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective duly authorized officers as of
the day and year first above written.
STUDENT LOAN FUNDING 1999-A/B TRUST,
By: Firstar Bank, National Association, not in
its individual capacity, but solely as
Co-Owner Trustee, on behalf of the
Issuer
By:
----------------------------------
Name:
Its:
STUDENT LOAN FUNDING RESOURCES, INC., as
Master Servicer
By:
----------------------------------
Name:
Its:
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EXHIBIT D
to
Transfer and Sale Agreement,
dated as of October 1, 1999
SCHEDULE OF TRANSFERRED
-----------------------
FINANCED STUDENT LOANS
----------------------
Those Student Loan which are evidenced solely by promissory notes and
applications related thereto and are identified on the books of the Servicer
indicated on Schedule I attached hereto, identified therein by the Portfolio and
Lender Identification Numbers (LID) indicated in respect of such Servicer on
Schedule I and which are identified on the books and records of such Servicers
as either (i) Student Loans which are made under the federal loan programs to
the extent identified on Schedule I and as more specifically identified therein,
or (ii) Student Loans which are consolidation loan in respect of Student Loans,
or (iii) Student Loans which are in the period of repayment, "grace" period (as
defined under the applicable federal law) or within six month of a "grace"
period.
D-1
<PAGE> 1
EXHIBIT 10.4
- ------------------------------------------------------------------------------
MASTER SERVICING AGREEMENT
BETWEEN
STUDENT LOAN FUNDING 1999-A/B TRUST,
ISSUER
AND
STUDENT LOAN FUNDING RESOURCES, INC.,
MASTER SERVICER
DATED AS OF OCTOBER 1, 1999
- ------------------------------------------------------------------------------
<PAGE> 2
<TABLE>
<CAPTION>
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
<S> <C> <C>
SECTION 1.1. Definitions...............................................................1
ARTICLE II
ADMINISTRATION AND SERVICING OF STUDENT LOANS
SECTION 2.1. Duties of Master Servicer.................................................2
SECTION 2.2. Compensation..............................................................3
SECTION 2.3. Cooperation by the Issuer.................................................3
ARTICLE III
THE MASTER SERVICER
SECTION 3.1. Representations of Master Servicer........................................3
SECTION 3.2. Indemnities of Master Servicer............................................4
SECTION 3.3. Merger or Consolidation of, or Assumption of the Obligations of, Master
Servicer..........................................................5
SECTION 3.4. Limitation on Liability of Master Servicer and Others.....................5
ARTICLE IV
DEFAULT
SECTION 4.1. Master Servicer Default...................................................6
SECTION 4.2. Appointment of Successor..................................................7
SECTION 4.3. Payment of Master Servicing Fee...........................................7
ARTICLE V
TERM; TERMINATION
SECTION 5.1. Term; Termination.........................................................7
ARTICLE VI
MISCELLANEOUS PROVISIONS
SECTION 6.1. Amendment.................................................................7
SECTION 6.2. Notices...................................................................7
SECTION 6.3. Assignment................................................................8
SECTION 6.4. Limitations on Rights of Others...........................................8
SECTION 6.5. Severability..............................................................8
SECTION 6.6. Separate Counterparts.....................................................8
</TABLE>
ii
<PAGE> 3
<TABLE>
<S> <C> <C>
SECTION 6.7. Headings..................................................................8
SECTION 6.8. Governing Law.............................................................8
SECTION 6.9. Independence of the Master Servicer.......................................8
SECTION 6.10. No Joint Venture..........................................................9
SECTION 6.11. Other Activities of Master Servicer.......................................9
SECTION 6.12. No Petition...............................................................9
SECTION 6.13. Limited Recourse..........................................................9
SECTION 6.14. Entire Agreement .........................................................9
</TABLE>
iii
<PAGE> 4
MASTER SERVICING AGREEMENT
MASTER SERVICING AGREEMENT dated as of October 1, 1999 between STUDENT
LOAN FUNDING 1999-A/B TRUST, a Delaware common law trust (the "Issuer"), and
STUDENT LOAN FUNDING RESOURCES, INC., an Ohio corporation, as master servicer
(the "Master Servicer"). References to the Issuer or Student Loan Funding
1999-A/B Trust shall be deemed to be references to FIRSTAR BANK, NATIONAL
ASSOCIATION, not in its individual capacity, but solely as Co-Owner Trustee
under the Trust Agreement dated as of October 1, 1999 (the "Co-Owner Trustee").
WHEREAS, the Issuer, directly or through an eligible lender trustee,
owns a portfolio of student loans; and
WHEREAS, the Master Servicer is willing to arrange for the servicing of
such student loans.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. DEFINITIONS. Whenever used in this Agreement, the
following words and phrases shall have the following meanings:
"AFFILIATE" means any corporation or other entity directly or
indirectly controlling or controlled by, or under direct or indirect common
control with, the Master Servicer or the Issuer. For purposes of this
definition, "control" means the power to direct management and policies of such
entity, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise.
"AGREEMENT" means this Master Servicing Agreement, as the same may be
amended, supplemented or otherwise modified from time to time.
"GUARANTEE AGENCY" means a state agency or private nonprofit
corporation which guarantees certain payments of principal of and interest on
Student Loans pursuant to a guarantee agreement.
"GUARANTEE AGREEMENT" means a contract between a Guarantee Agency and a
lender providing for, or a certificate or other evidence of, the guarantee of
Student Loans.
"GUARANTEE PAYMENTS" means those payments made by a Guarantee Agency
with respect to a Student Loan.
<PAGE> 5
"HIGHER EDUCATION ACT" means the Higher Education Act of 1965, as
amended, together with any rules and regulations promulgated by the U.S.
Department of Education or the Guarantee Agencies.
"INDENTURE" means the Indenture of Trust, together with the Terms
Supplement, each dated as of October 1, 1999, by and among the Issuer, Firstar
Bank, National Association, as eligible lender trustee (the "Eligible Lender
Trustee"), and Firstar Bank, National Association, as indenture trustee (the
"Indenture Trustee").
"MASTER SERVICER DEFAULT" means an event specified in Section 4.1 of
this Agreement.
"MASTER SERVICING FEE" has the meaning specified in Section 2.2 of this
Agreement.
"NOTEHOLDER" means a holder of a note of the Issuer issued pursuant to
the Indenture.
"PERSON" means any individual, corporation, limited liability company,
estate, partnership, joint venture, association, joint stock company, trust
(including any beneficiary thereof), unincorporated organization or government
or any agency or political subdivision thereof.
"SERVICER" means any servicing entity selected by the Master Servicer,
including without limitation the Master Servicer and/or any Affiliate of the
Master Servicer, to provide servicing for all or a part of the Student Loans,
including but not limited to application, review, disbursement, administration,
collection, due diligence and claims services, provided, that such entity is
qualified to be a servicer of such Student Loans in accordance with any
indentures or other documents of the Issuer relating to such Student Loans.
"SERVICING AGREEMENT" means an agreement, including all addenda
thereto, between a Servicer and the Issuer and/or the Master Servicer for the
servicing of all or part of the Student Loans subject to this Agreement.
"STUDENT LOAN" means a student loan incurred under the Higher Education
Act by eligible students attending eligible post secondary educational
institutions.
ARTICLE II
ADMINISTRATION AND SERVICING OF STUDENT LOANS
SECTION 2.1. DUTIES OF MASTER SERVICER.
(a) Subject to the written direction of the Issuer, the Master
Servicer, for the benefit of the Issuer (to the extent provided herein), shall
provide for, arrange and maintain, or take such actions as are necessary to
provide for, arrange and maintain, the servicing and administration of the
Student Loans in accordance with prudent industry practices with one or more
Servicers in accordance with this Agreement and shall perform the other actions
required by the Master Servicer under this Agreement, with reasonable care. The
Master Servicer shall have full authority to do
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<PAGE> 6
anything it reasonably deems appropriate in connection with providing for,
arranging and maintaining such servicing and administration relationships with
Servicers, including without limitation (1) entering into one or more Servicing
Agreements with the Servicers and/or with the Issuer and the Servicers, (2)
providing or arranging for the replacement of any Servicing Agreement that
expires or is terminated, (3) consulting with any Servicer regarding the
negotiation, execution and performance of any Servicing Agreement or the
servicing and administration of any related Student Loan, and (4) terminating
any Servicing Agreement that may exist in accordance with the terms and
conditions of such Servicing Agreement, provided, that upon termination of any
such Servicing Agreement, the Master Servicer shall arrange for an appropriate
Servicing Agreement with a Servicer pertaining to and maintaining continuous
servicing of the Student Loans previously serviced under the terminated
Servicing Agreement. The servicing arrangements provided for by the Master
Servicer shall maintain servicing standards in accordance in all material
respects with all applicable agreements and indentures of the Issuer and all
applicable federal and state laws, including all applicable standards,
guidelines and requirements of the Higher Education Act and any Guarantee
Agreement with respect to the Student Loans, the failure to comply with which
would adversely affect the eligibility of one or more of the Student Loans for
Guarantee Payments or would have a material adverse effect on the Noteholders.
The Master Servicer may perform its responsibilities hereunder through other
agents or independent contractors, but shall not thereby be released from any of
its responsibilities as hereinafter set forth.
As part of its master servicing responsibilities hereunder, the Master
Servicer, for the benefit of the Issuer, shall oversee, administer and enforce
the obligations of each Servicer under the related Servicing Agreement. Such
enforcement, including, without limitation, the legal prosecution of claims,
termination of such Servicing Agreements and the pursuit of other appropriate
remedies, shall be in such form and carried out to such an extent and at such
time as the Master Servicer, in its good faith business judgment, would require
were it the owner of the related Student Loans.
(b) EXCEPTIONS. Notwithstanding anything to the contrary in this
Agreement, except as expressly provided herein, the Master Servicer, in its
capacity hereunder, shall not be obligated to, and shall not (1) make any
payments to the Noteholders, or (2) take any other action that the Issuer
directs the Master Servicer in writing not to take on its behalf.
SECTION 2.2. MASTER SERVICING FEE. On or before the last day of each
month (the "Payment Date"), the Issuer shall pay to the Master Servicer, as
compensation for its services specified hereunder, a fee in the amount of .02%
(on a per annum basis) of the aggregate principal amount of the Student Loans
subject to this Agreement (the "Master Servicing Fee"). The Master Servicing Fee
will be determined on the basis of the aggregate outstanding principal amount of
Student Loans subject to this Agreement as of the first day of the month of each
such Payment Date. The Issuer agrees to reimburse the Master Servicer for all
reasonable expenses, disbursements and advances incurred or made by the Master
Servicer in connection with the performance of this Agreement, including, but
not limited to, the fees and expenses of obtaining Servicers, subcontracting,
any independent accountants and outside counsel, which reimbursement shall
relate to amounts incurred in a calendar month and shall be payable by the
Issuer to the Master Servicer on the next succeeding Payment Date.
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<PAGE> 7
SECTION 2.3. COOPERATION BY THE ISSUER. The Issuer agrees to cooperate
and assist the Master Servicer in any manner reasonably requested by the Master
Servicer in connection with the servicing and administration of the Student
Loans subject to this Agreement and the prompt and full performance of the
Master Servicer's duties hereunder, including without limitation, executing,
delivering and performing Servicing Agreements and all other agreements,
documents or certificates relating, directly or indirectly, to the servicing and
administration of the Student Loans subject to this Agreement and the prompt and
full performance of the Master Servicer's duties hereunder.
ARTICLE III
THE MASTER SERVICER
SECTION 3.1. REPRESENTATIONS OF MASTER SERVICER. The Master Servicer
makes the following representations on which the Issuer is deemed to have relied
in executing and delivering this Agreement. The representations speak as of the
date of execution and delivery of the Agreement and shall survive such date.
(a) ORGANIZATION AND GOOD STANDING. The Master Servicer is duly
organized and validly existing as a corporation in good standing under the laws
of the State of Ohio with the corporate power and authority to own its
properties and to conduct its business as such properties are currently owned
and such business is presently conducted, and had at all relevant times, and
has, the power, authority and legal right to perform its obligations as required
by this Agreement.
(b) DUE QUALIFICATION. The Master Servicer is duly qualified to do
business and has obtained all necessary licenses and approvals in all
jurisdictions in which the ownership or lease of property or the conduct of its
business (including the performance of its obligations as required by this
Agreement) shall require such qualifications except where failure to obtain the
same would not have a material adverse effect on its business or property.
(c) POWER AND AUTHORITY OF THE MASTER SERVICER. The Master Servicer has
the corporate power and authority to execute and deliver this Agreement and to
perform its obligations hereunder, and the execution, delivery and performance
of this Agreement have been duly authorized by the Master Servicer by all
necessary corporate action. All authorizations, consents, orders or approvals of
or registrations or declarations with any court, regulatory body, administrative
agency or other government instrumentality required to be obtained, effected or
given by the Master Servicer in connection with the execution and delivery by
the Master Servicer of this Agreement and the performance by the Master Servicer
of the transactions contemplated by this Agreement have been duly obtained,
effected or given and are in full force and effect, except where failure to
obtain the same would not have a material adverse effect upon the rights of the
Issuer hereunder.
(d) BINDING OBLIGATION. This Agreement constitutes a legal, valid and
binding obligation of the Master Servicer, enforceable in accordance with its
terms, subject to applicable bankruptcy, insolvency, moratorium, fraudulent
conveyance, reorganization and similar laws now or hereafter
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in effect relating to creditors' rights generally, and subject to general
principles of equity (whether applied in a proceeding of law or in equity).
(e) NO VIOLATION. The consummation of the transactions contemplated by
this Agreement and the fulfillment of the terms hereof will not result in any
breach of any of the terms and provisions of, or constitute (with or without
notice or lapse of time or both) a default under the Articles of Incorporation
or Code of Regulations of the Master Servicer, or any material indenture,
agreement or other instrument to which the Master Servicer is a party or by
which it is bound; nor result in the creation or imposition of any lien upon any
of its properties pursuant to the terms of any such indenture, agreement or
other instrument; or violate any law or, to the best of its knowledge, any
order, rule or regulation applicable to the Master Servicer of any court or of
any federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Master Servicer or its
properties.
(f) NO PROCEEDINGS. There are no proceedings or investigations pending
against the Master Servicer, or, to its best knowledge, threatened against the
Master Servicer, before any court, regulatory body, administrative agency or
other governmental instrumentality having jurisdiction over the Master Servicer
or its properties: (i) asserting the invalidity of this Agreement, (ii) seeking
to prevent the consummation of any of the transactions contemplated by this
Agreement, or (iii) seeking any determination or ruling that could reasonably be
expected to have a material and adverse effect on the performance by the Master
Servicer of its obligations under, or the validity or enforceability of this
Agreement.
SECTION 3.2. INDEMNITIES OF MASTER SERVICER. The Master Servicer shall
be liable in accordance herewith only to the extent of the obligations
specifically undertaken by the Master Servicer under this Agreement.
The Master Servicer shall indemnify, defend and hold harmless the
Issuer and all of the officers, employees and agents of the Issuer, from any and
all costs, expenses, losses, claims, damages and liabilities (including
reasonable attorneys' fees and expenses) to the extent arising out of, or
imposed upon any such Person through, the negligence, willful misfeasance or bad
faith of the Master Servicer in the performance of its obligations and duties
under this Agreement or by reason of the reckless disregard of its obligations
and duties under this Agreement, where the final determination that any such
cost, expense, loss, claim, damage or liability arose out of, or was imposed
upon any such Person through, any such negligence, willful misfeasance, bad
faith or recklessness (other than errors in judgment) on the part of the Master
Servicer is established by a court of law, by an arbitrator or by way of
settlement agreed to in writing by the Master Servicer. Notwithstanding the
foregoing, if the Master Servicer is rendered unable, in whole or in part, by
virtue of an act of God, act of war, fire, earthquake or other natural disaster,
to satisfy its obligations under this Agreement, the Master Servicer shall not
be deemed to have breached any such obligation upon the sending of written
notice of such event to the other parties hereto, for so long as the Master
Servicer remains unable to perform such obligation as a result of such event.
This provision shall not be construed to limit the Master Servicer's or any
other party's rights, obligations, liabilities,
5
<PAGE> 9
claims or defenses which arise as a matter of law or pursuant to any other
provision of this Agreement.
The Issuer shall notify the Master Servicer promptly of any claim for
which it may seek indemnity. The Master Servicer shall defend the claim and the
Master Servicer shall not be liable for the legal fees and expenses of the
Issuer after it has assumed such defense.
Indemnification under this Section 3.2 shall survive the termination of
this Agreement and shall include reasonable fees and expenses of counsel and
expenses of litigation. If the Master Servicer has made any indemnity payments
pursuant to this Section 3.2 and the Issuer thereafter collects any of such
amounts from others, the Issuer promptly shall repay such amounts to the Master
Servicer, without interest.
Anything in this Agreement to the contrary notwithstanding, neither the
Master Servicer nor any of its directors, officers, employees or agents shall be
liable for any cost, expense, loss, claim damage or liability that arises out
of, or was imposed upon any Person seeking indemnity under this Section 3.2
through any negligence, willful misfeasance, bad faith, recklessness or other
act, error or omission on the part of any Servicer under a Servicing Agreement,
provided, that this provision shall not protect the Master Servicer or any such
Person against any liability that would otherwise be imposed by reason of
willful misfeasance, bad faith or negligence in the performance of its duties
(except for errors in judgment) or by reason of reckless disregard of its
obligations and duties under this Agreement.
SECTION 3.3. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, MASTER SERVICER. Any Person (a) into which the Master Servicer
may be merged or consolidated, (b) which may result from any merger or
consolidation to which the Master Servicer shall be a party or (c) which may
succeed to the properties and assets of the Master Servicer, substantially as a
whole, shall be the successor to the Master Servicer without the execution or
filing of any document or any further act by any of the parties to this
Agreement; provided, that the Master Servicer hereby covenants that, if the
surviving Master Servicer is other than Student Loan Funding Resources, Inc. or
an Affiliate, it will not consummate any of the foregoing transactions except
upon satisfaction of the following: (i) the surviving Master Servicer executes
an agreement of assumption to perform every obligation of the Master Servicer
under this Agreement, (ii) immediately after giving effect to such transaction,
no representation or warranty made pursuant to Section 3.1 shall have been
breached and no Master Servicer Default, and no event that, after notice or
lapse of time, or both, would become a Master Servicer Default shall have
occurred and be continuing, (iii) the surviving Master Servicer shall have
delivered to the Issuer a certificate of an officer of the surviving Master
Servicer and an opinion of counsel each stating that such consolidation, merger
or succession and such agreement of assumption comply with this Section 3.3 and
that all conditions precedent, if any, provided for in this Agreement relating
to such transaction have been complied with, and (iv) such transaction will not
result in a material adverse federal or state tax consequence to the Issuer or
the holders of any bonds, notes or other indebtedness of the Issuer.
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<PAGE> 10
SECTION 3.4. LIMITATION ON LIABILITY OF MASTER SERVICER AND OTHERS.
Neither the Master Servicer nor any of its directors, officers, employees or
agents shall be under any liability to the Issuer except as provided under this
Agreement for any action taken or for refraining from the taking of any action
pursuant to this Agreement or for errors in judgment or for any action or
omission by any Servicer pursuant to a Servicing Agreement; provided, that this
provision shall not protect the Master Servicer or any such Person against any
liability that would otherwise be imposed by reason of willful misfeasance, bad
faith or negligence (except for errors in judgment) in the performance of its
duties or by reason of reckless disregard of its obligations and duties under
this Agreement. Without limiting the generality of the foregoing, the Master
Servicer in particular shall not be liable for any servicing errors or
interruptions resulting from any failure of any Servicer to maintain computer
and other information systems that are year-2000 compliant. The Master Servicer
and any of its respective directors, officers, employees or agents may rely in
good faith on any document of any kind prima facie properly executed and
submitted by any Person respecting any matters arising under this Agreement.
Except as provided in this Agreement, the Master Servicer shall not be under any
obligation to appear in, prosecute or defend any legal action that shall be
incidental to its duties in accordance with this Agreement and that in its
opinion may involve it in any expense or liability.
ARTICLE IV
DEFAULT
SECTION 4.1. MASTER SERVICER DEFAULT. The occurrence and continuance of
any one of the following events shall constitute a "Master Servicer Default":
(a) any failure on the part of the Master Servicer duly to observe or
to perform in any material respect any of the covenants or agreements of the
Master Servicer set forth in this Agreement, which failure shall (i) materially
and adversely affect the rights of the Noteholders and (ii) continue unremedied
for a period of 60 days after the date on which written notice of such failure,
requiring the same to be remedied, shall have been given to the Master Servicer
by the Issuer (or for such longer period, not in excess of 120 days, as may be
reasonably necessary to remedy such default; provided that such default is
capable of remedy within 120 days and the Master Servicer delivers a certificate
of an officer of the Master Servicer to the Issuer to such effect and to the
effect that the Master Servicer has commenced or will promptly commence, and
will diligently pursue, all reasonable efforts to remedy such default); or
(b) (i) having entered involuntarily against it an order for relief
under any applicable Federal or state bankruptcy, insolvency or similar law now
or hereafter in effect, (ii) not paying, or admitting in writing its inability
to pay, its debts generally as they become due or suspending payment of its
obligations, (iii) making an assignment for the benefit of creditors, (iv)
applying for, seeking, consenting to, or acquiescing in, the appointment of a
receiver, custodian, trustee, conservator, liquidator or similar official for it
or any substantial part of its property, (v) instituting any proceeding seeking
to have entered against it an order for relief under any applicable Federal or
state bankruptcy, insolvency or similar law now or hereafter in effect, to
adjudicate it insolvent, or seeking dissolution, winding up, liquidation,
reorganization, arrangement, marshaling of assets,
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adjustment or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization, or relief of debtors or failing to
file an answer or other pleading denying the material allegations of any such
proceeding filed against it, (vi) failing to contest in good faith any
appointment or proceeding described in Section 4.1(c) hereof or (vii) taking any
action in furtherance of any of the foregoing purposes; or
(c) the appointment of a custodian, receiver, trustee, conservator,
liquidator or similar official for the Master Servicer or any substantial part
of the property of the Master Servicer, or the institution of a proceeding
described in Section 4.1(b)(v) against the Master Servicer, which appointment
continues undischarged or which proceeding continues undismissed or unstayed for
a period of 60 or more consecutive days.
In the case of any Master Servicer Default, so long as the Master
Servicer Default shall not have been remedied prior to the expiration of any
applicable cure period, the Issuer, by notice then given in writing to the
Master Servicer of such Master Servicer Default, may terminate all the rights
and obligations (other than the obligations set forth in Section 3.2 and Section
6.12) of the Master Servicer under this Agreement. On or after the receipt by
the Master Servicer of such written notice, all authority and power of the
Master Servicer under this Agreement shall, without further action, pass to and
be vested in the Issuer or such successor Master Servicer as may be appointed
under Section 4.2; and, without limitation, the Issuer is hereby authorized and
empowered to execute and deliver, on behalf of the predecessor Master Servicer,
as attorney-in-fact or otherwise, any and all documents and other instruments,
and to do or accomplish all other acts or things necessary or appropriate to
effect the purposes of such notice of termination, whether to complete the
transfer and endorsement of the Student Loans and related documents, or
otherwise.
SECTION 4.2. APPOINTMENT OF SUCCESSOR.
(a) Upon the Master Servicer's receipt of notice of termination,
pursuant to Section 4.1 above or the Master Servicer's resignation in accordance
with the terms of this Agreement, the predecessor Master Servicer shall continue
to perform its functions as Master Servicer under this Agreement, in the case of
termination, only until the date specified in such termination notice or, if no
such date is specified in a notice of termination, until receipt of such notice
and, in the case of resignation, until the date 30 days from the delivery to the
Issuer of written notice of such resignation (or written confirmation of such
notice) in accordance with the terms of this Agreement. In the event of the
Master Servicer's termination hereunder, the Issuer, may appoint a successor
Master Servicer, and the successor Master Servicer shall accept its appointment
by a written assumption in form acceptable to the Issuer.
(b) Upon appointment, the successor Master Servicer shall be the
successor in all respects to the predecessor Master Servicer and shall be
subject to all the responsibilities, duties and liabilities arising thereafter
relating thereto placed on the predecessor Master Servicer and shall be entitled
to the Master Servicing Fee, or such other terms as are agreed to by the Issuer,
and all the rights granted to the predecessor Master Servicer by the terms and
provisions of this Agreement. No successor Master Servicer shall be liable for
any acts or omissions of any predecessor Master Servicer.
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(c) The predecessor Master Servicer shall cooperate with the successor
Master Servicer and the Issuer in effecting the termination of the
responsibilities and rights of the predecessor Master Servicer under this
Agreement. All reasonable costs and expenses (including attorneys' fees)
incurred in connection with transferring the duties of the predecessor Master
Servicer to the successor Master Servicer and amending this Agreement to reflect
such succession as Master Servicer pursuant to this Section shall be paid by the
predecessor Master Servicer upon presentation of reasonable documentation of
such costs and expenses.
SECTION 4.3. PAYMENT OF MASTER SERVICING FEE. If the Master Servicer
shall change, the predecessor Master Servicer shall be entitled to receive any
accrued and unpaid Master Servicing Fees through the date of the successor
Master Servicer's acceptance hereunder.
ARTICLE V
TERM; TERMINATION
SECTION 5.1. TERM; TERMINATION. The Master Servicer or the Issuer may
terminate this Agreement upon not less than 45 days' prior written notice to the
other party.
ARTICLE VI
MISCELLANEOUS PROVISIONS
SECTION 6.1. AMENDMENT. The provisions of this Agreement may not be
amended, waived or modified unless such amendment, waiver or modification is in
writing and signed by the Master Servicer and the Issuer. Inaction or failure to
demand strict performance shall not be deemed a waiver.
SECTION 6.2. NOTICES. All demands, notices, instructions and
communications required or permitted to be given to or made upon either party
hereto shall be in writing (including by facsimile transmission) and shall be
personally delivered or sent by guaranteed overnight delivery, by facsimile
transmission (to be followed by personal or guaranteed overnight delivery) or by
postage prepaid registered or certified mail, return receipt requested, and
shall be deemed to be given for purposes of this Agreement on the date that such
writing is received by the intended recipient thereof in accordance with the
provisions of this Section 6.2. Unless otherwise specified in a notice sent or
delivered in accordance with the foregoing provisions of this Section 6.2,
notices, demands, instructions and other communications in writing shall be
given to or made upon the respective parties thereto at their respective
addresses as follows:
The Issuer:
Firstar Bank, National Association, as Co-Owner Trustee
of Student Loan Funding 1999-A/B Trust
425 Walnut Street
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ML5125 P.O.Box 1118
Cincinnati, Ohio 45202-1118
The Master Servicer:
Student Loan Funding Resources, Inc.
One West Fourth Street, Suite 200
Cincinnati, Ohio 45202
Attention: Senior Vice President and CFO
SECTION 6.3. ASSIGNMENT. Notwithstanding anything to the contrary
contained herein, except as provided in Sections 2.1 and 3.3 and as provided in
the provisions of this Agreement concerning the resignation and succession of
the Master Servicer, this Agreement may not be assigned by the Issuer or the
Master Servicer without the prior written consent of the other party.
SECTION 6.4. LIMITATIONS ON RIGHTS OF OTHERS. The provisions of this
Agreement are solely for the benefit of the Issuer and the Master Servicer, and
nothing in this Agreement, whether express or implied, shall be construed to
give to any other Person any legal or equitable right, remedy or claim under or
in respect of this Agreement or any covenants, conditions or provisions
contained herein.
SECTION 6.5. SEVERABILITY. Any provision of this Agreement that 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 6.6. 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 6.7. 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 6.8. GOVERNING LAW. This Agreement shall be construed in
accordance with the laws of the State of Ohio , without reference to principles
of conflicts of law, and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws.
SECTION 6.9. INDEPENDENCE OF THE MASTER SERVICER. For all purposes of
this Agreement, the Master Servicer shall be an independent contractor and shall
not be subject to the supervision of the Issuer with respect to the manner in
which it accomplishes the performance of its obligations hereunder. Unless
expressly authorized by the Issuer, the Master Servicer shall
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have no authority to act for or represent the Issuer in any way and shall not
otherwise be deemed an agent of the Issuer.
SECTION 6.10. NO JOINT VENTURE. Nothing contained in this Agreement (i)
shall constitute the Master Servicer and the Issuer 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.
SECTION 6.11. OTHER ACTIVITIES OF MASTER SERVICER. Nothing herein shall
prevent the Master Servicer or its Affiliates from engaging in other business
or, in its or their sole discretion, from acting in a similar capacity as a
master servicer for any other Person or entity even though such Person or entity
may engage in business activities similar to those of the Issuer.
SECTION 6.12 NO PETITION. The Master Servicer covenants and agrees
that, notwithstanding the termination of this Agreement, the Master Servicer
will not institute against, or join in instituting against, the Issuer, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding,
or other proceeding under any Federal or state bankruptcy or similar law
ordering the winding up or liquidation of the Issuer's affairs or appointing a
receiver, liquidator, trustee, or other similar official, of the Issuer or any
substantial part of its property, for one year and a day after the termination
of this Agreement. This Section 6.12 shall survive the termination of this
Agreement.
SECTION 6.13. LIMITED RECOURSE. Notwithstanding anything to the
contrary contained herein, the obligations of the Issuer hereunder shall not be
recourse to the Issuer (or any Person or organization acting on behalf of the
Issuer or any affiliate, officer, member, Management Committee member, agent or
employee of the Issuer), and shall be paid solely from moneys in the Collection
Fund established under the Indenture. The Master Servicer agrees that to the
extent such funds are insufficient or unavailable to pay any amounts owing to
the Master Servicer from the Issuer pursuant to this Agreement, it shall not
institute a claim against the Issuer.
SECTION 6.14. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties hereto with respect to the matters covered hereby
and supercedes all prior agreements and understandings between the parties.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective duly authorized officers as of
the day and year first above written.
STUDENT LOAN FUNDING 1999-A/B TRUST,
By: Firstar Bank, National Association, not in its
individual capacity, but solely as Co-Owner
Trustee, on behalf of the Issuer
By: /s/ Brian J. Gardner
Name: Brian J. Gardner
Its: Vice President & Trust Officer
STUDENT LOAN FUNDING RESOURCES,
INC., as Master Servicer
By: /s/ Perry D. Moore
Name: Perry D. Moore
Its: Senior Vice President &
Chief Financial Officer
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