<PAGE>
Exhibit 4.1
===========
================================================================================
INDENTURE OF TRUST
between
EDUCATION LOANS INCORPORATED
and
U.S. BANK NATIONAL ASSOCIATION
as Trustee
----------------------------------
Dated as of February 1, 2004
----------------------------------
================================================================================
<PAGE>
CROSS REFERENCE TABLE/1/
TIA
Indenture
Section
Section
-------
------------
310(a)(1).........................................................
7.13
(a)(2)............................................................
7.13
(a)(3)............................................................
7.12
(a)(4)............................................................
N.A./2/
(a)(5)............................................................
7.13
(b)...............................................................
7.8;
7.13
(c)...............................................................
N.A.
311(a)............................................................
7.14
(b)...............................................................
7.14
(c)...............................................................
N.A.
312(a)............................................................
12.1
(b)...............................................................
12.2
(c)...............................................................
12.2
313(a)............................................................
12.4
(b)(1)............................................................
12.4
(b)(2)............................................................
12.4
(c)...............................................................
13.4
(d)...............................................................
12.4
314(a)............................................................
12.3
(b)...............................................................
13.12; 13.13
(c)(1)............................................................
1.4
(c)(2)............................................................
1.4
(c)(3)............................................................
1.4
(d)...............................................................
1.4
(e)...............................................................
1.4
(f)...............................................................
1.4
315(a)............................................................
7.1
(b)...............................................................
7.3;
13.4
(c)...............................................................
7.1
(d)...............................................................
7.1
(e)...............................................................
6.11
316(a)(last
sentence).............................................
1.1
(a)(1)(A).........................................................
6.4
(a)(1)(B).........................................................
6.13
(a)(2)............................................................
N.A.
(b)...............................................................
6.9
(c)...............................................................
N.A.
317(a)(1).........................................................
6.3
(a)(2)............................................................
6.10
(b)...............................................................
7.17
318(a)............................................................
13.11
----------
/1/ Note: This Cross Reference Table
shall not, for any purpose, be deemed to
be part of this
Indenture.
/2/ N.A. means Not Applicable.
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S>
<C>
PARTIES....................................................................
vii
RECITALS...................................................................
vii
GRANTING
CLAUSES...........................................................
viii
ARTICLE ONE DEFINITIONS AND GENERAL
PROVISIONS............................. 1-1
Section 1.1
Definitions..............................................
1-1
Section 1.2 Definitions of General
Terms............................. 1-27
Section 1.3
Computations............................................. 1-27
Section 1.4 Compliance
Certificates and Opinions, etc................ 1-27
Section 1.5 Evidence of Action by the
Corporation.................... 1-30
Section 1.6 Exclusion of Notes
Held By or For the Corporation........ 1-30
Section 1.7
Exhibits................................................. 1-30
Section 1.8 Incorporation by
Reference of Trust Indenture Act........ 1-30
ARTICLE TWO NOTE
FORMS.....................................................
2-1
Section 2.1 Forms
Generally.......................................... 2-1
Section 2.2 Form of
Notes............................................ 2-1
ARTICLE THREE THE
NOTES....................................................
3-1
Section 3.1 General
Title............................................ 3-1
Section 3.2 General Limitations;
Issuable in Series; Purposes and
Conditions for Issuance; Payment of Principal and
Interest.................................................
3-1
Section 3.3 Terms of Particular
Series............................... 3-3
Section 3.4 Form and
Denominations................................... 3-3
Section 3.5 Execution,
Authentication and Delivery................... 3-3
Section 3.6 Temporary
Notes.......................................... 3-4
Section 3.7 Registration, Transfer
and Exchange...................... 3-4
Section 3.8 Mutilated, Destroyed,
Lost and Stolen Notes.............. 3-6
Section 3.9 Interest Rights
Preserved; Dating of Notes............... 3-7
Section 3.10 Persons Deemed
Holders................................... 3-7
Section 3.11
Cancellation.............................................
3-7
Section 3.12 Class B and Class C
Notes................................ 3-7
ARTICLE FOUR CREATION OF FUNDS AND
ACCOUNTS; CREDITS THERETO AND
PAYMENTS THEREFROM.......................................
4-1
Section 4.1 Creation of Funds and
Accounts........................... 4-1
Section 4.2 Acquisition
Fund......................................... 4-1
Section 4.3 Administration
Fund...................................... 4-4
Section 4.4 Reserve
Fund............................................. 4-6
Section 4.5 Indemnification
Fund..................................... 4-7
Section 4.6 Revenue
Fund............................................. 4-8
Section 4.7 Note
Fund................................................ 4-11
Section 4.8 Surplus
Fund............................................. 4-21
</TABLE>
ii
<PAGE>
<TABLE>
<S>
<C>
Section 4.9 Alternative Loan
Guarantee Fund.......................... 4-27
Section 4.10
Pledge................................................... 4-27
Section 4.11
Investments.............................................. 4-28
Section 4.12 Transfer of Investment
Securities........................ 4-31
Section 4.13
Termination.............................................. 4-31
ARTICLE FIVE COVENANTS TO SECURE NOTES;
REPRESENTATIONS AND WARRANTIES..... 5-1
Section 5.1 Trustee to Hold
Financed Student Loans................... 5-1
Section 5.2 Credit Enhancement
Facilities, Demand Purchase
Agreements and Swap Agreements...........................
5-1
Section 5.3 Enforcement and
Amendment of Guarantee Agreements........ 5-2
Section 5.4 Trustee to Hold
Alternative Loan Notes................... 5-2
Section 5.5 Acquisition,
Collection and Assignment of Student Loans.. 5-2
Section 5.6 Enforcement of
Financed Student Loans.................... 5-3
Section 5.7 Servicing and Other
Agreements........................... 5-3
Section 5.8 Administration and
Collection of Financed Student Loans.. 5-4
Section 5.9 Books of Account;
Annual Audit........................... 5-4
Section 5.10 Punctual
Payments........................................ 5-4
Section 5.11 Further
Assurances....................................... 5-5
Section 5.12 Protection of Security;
Power To Issue Notes and Pledge
Revenues and Other Funds.................................
5-5
Section 5.13 No
Encumbrances.......................................... 5-5
Section 5.14 Use of Trustee Eligible
Lender Number.................... 5-6
Section 5.15 Limitation on Administrative
Expenses and Note Fees...... 5-6
Section 5.16 Continuing Existence; Merger
and Consolidation........... 5-6
Section 5.17 Fidelity
Bonds........................................... 5-7
Section 5.18 Amendment of Student Loan
Purchase Agreements............ 5-7
Section 5.19 Enforcement and Amendment of
Guarantee Agreements........ 5-7
Section 5.20 Amendment of Remarketing
Agreements and Depositary
Agreements...............................................
5-7
Section 5.21 Additional Covenants of the
Corporation.................. 5-8
Section 5.22 Representations and
Warranties of the Corporation........ 5-10
Section 5.23 Trustee to Furnish Monthly
Servicing Report.............. 5-12
Section 5.24 Change in Name or State of
Incorporation of Corporation.. 5-12
Section 5.25 Enforcement of Bailment
Agreements....................... 5-12
ARTICLE SIX DEFAULTS AND
REMEDIES.......................................... 6-1
Section 6.1 Events of
Default........................................ 6-1
Section 6.2
Acceleration.............................................
6-2
Section 6.3 Other Remedies; Rights
of Beneficiaries.................. 6-5
Section 6.4 Direction of
Proceedings by Acting Beneficiaries
Upon Default.............................................. 6-6
Section 6.5 Waiver of Stay or
Extension Laws.......................... 6-6
Section 6.6 Application of
Moneys..................................... 6-6
Section 6.7 Remedies Vested in
Trustee............................... 6-10
Section 6.8 Limitation on Suits by
Beneficiaries..................... 6-10
Section 6.9 Unconditional Right of
Noteholders To Enforce Payment.... 6-11
Section 6.10 Trustee May File Proofs of
Claims........................ 6-11
Section 6.11 Undertaking for
Costs.................................... 6-12
</TABLE>
iii
<PAGE>
<TABLE>
<S>
<C>
Section 6.12 Termination of
Proceedings............................... 6-12
Section 6.13 Waiver of Defaults and
Events of Default................. 6-12
Section 6.14 Inspection of Books and
Records.......................... 6-13
ARTICLE SEVEN
FIDUCIARIES...................................................
7-1
Section 7.1 Acceptance of the
Trustee................................. 7-1
Section 7.2 Fees, Charges and
Expenses of the Trustee, Paying
Agents, Note Registrar, Authenticating Agents, Deposit
Agents, Remarketing Agents, Depositaries, Auction Agents
and Broker-Dealers.......................................
7-3
Section 7.3 Notice to
Beneficiaries if Default Occurs................ 7-4
Section 7.4 Intervention by
Trustee.................................. 7-4
Section 7.5 Successor Trustee,
Paying Agents, Authenticating Agents,
Deposit Agents and Depositaries..........................
7-4
Section 7.6 Resignation by
Trustee, Paying Agents, Authenticating
Agents, Deposit Agents and Depositaries..................
7-5
Section 7.7 Removal of
Trustee....................................... 7-5
Section 7.8 Appointment of
Successor Trustee......................... 7-5
Section 7.9 Concerning any
Successor Trustee......................... 7-6
Section 7.10 Trustee Protected in Relying
Upon Resolutions, Etc....... 7-6
Section 7.11 Successor Trustee as
Custodian of Funds.................. 7-6
Section 7.12
Co-Trustee...............................................
7-6
Section 7.13 Corporate Trustee Required;
Eligibility;
Disqualification.........................................
7-8
Section 7.14 Preferential Collection of
Claims Against Corporation.... 7-9
Section 7.15 Statement by Trustee of
Funds and Accounts and Other
Matters..................................................
7-9
Section 7.16 Trustee, Authenticating
Agent, Note Registrar, Paying
Agents, Deposit Agents, Remarketing Agents,
Depositaries, Auction Agents and Broker-Dealers May Buy,
Hold, Sell or Deal in Notes..............................
7-9
Section 7.17 Authenticating Agent and
Paying Agents; Paying Agents
To Hold Moneys in Trust..................................
7-9
Section 7.18 Removal of Authenticating
Agent and Paying Agents;
Successors............................................... 7-10
Section 7.19 Appointment and
Qualifications of Deposit Agents......... 7-11
Section 7.20 Appointment and
Qualifications of Depositaries........... 7-11
Section 7.21 Remarketing
Agents....................................... 7-13
Section 7.22 Qualifications of
Remarketing Agents..................... 7-13
ARTICLE EIGHT SUPPLEMENTAL
INDENTURES...................................... 8-1
Section 8.1 Supplemental
Indentures Not Requiring Consent of
Beneficiaries............................................
8-1
Section 8.2 Supplemental
Indentures Requiring Consent of
Beneficiaries............................................
8-2
Section 8.3 Rights of
Trustee........................................ 8-3
Section 8.4 Rating Agency
Confirmation Required Prior to Execution
of Supplemental Indenture................................
8-3
Section 8.5 Consent of
Depositaries.................................. 8-3
Section 8.6 Consent of Remarketing
Agents............................ 8-3
Section 8.7 Consent of Auction
Agents................................ 8-4
Section 8.8 Consent of
Broker-Dealers................................ 8-4
Section 8.9 Conformity With Trust
Indenture Act...................... 8-4
</TABLE>
iv
<PAGE>
<TABLE>
<S>
<C>
ARTICLE NINE NOTEHOLDERS'
MEETINGS......................................... 9-1
Section 9.1 Purposes for Which
Noteholders' Meetings May Be Called... 9-1
Section 9.2 Place of Meetings of
Noteholders......................... 9-1
Section 9.3 Call and Notice of
Noteholders' Meetings................. 9-1
Section 9.4 Persons Entitled To
Vote at Noteholders' Meetings........ 9-2
Section 9.5 Determination of
Voting Rights; Conduct and Adjournment
of Meetings..............................................
9-2
Section 9.6 Counting Votes and
Recording Action of Meetings.......... 9-3
Section 9.7 Revocation by
Noteholders................................. 9-3
ARTICLE TEN REDEMPTION AND
PREPAYMENT...................................... 10-1
Section 10.1 Right of Redemption and
Prepayment....................... 10-1
Section 10.2 Election To Redeem, Prepay
or Purchase; Notice to
Trustee; Senior Asset Requirement........................ 10-1
Section 10.3 Selection by Trustee of
Notes To Be Redeemed............. 10-2
Section 10.4 Notice of
Redemption..................................... 10-2
Section 10.5 Notes Payable on Redemption
Date and Sinking Fund
Payment Date............................................. 10-3
Section 10.6 Notes Redeemed or Prepaid in
Part........................ 10-3
Section 10.7 Purchase of
Notes........................................ 10-4
ARTICLE ELEVEN DEFEASANCE; MONEYS HELD FOR
PAYMENT OF DEFEASED NOTES....... 11-1
Section 11.1 Discharge of Liens and
Pledges; Notes No Longer
Outstanding and Deemed To Be Paid Hereunder.............. 11-1
Section 11.2 Notes Not Presented for
Payment When Due; Moneys Held
for the Notes after Due Date of Notes.................... 11-3
ARTICLE TWELVE NOTEHOLDERS' LISTS AND
REPORTS.............................. 12-1
Section 12.1 Note Registrar To Furnish
Trustee Names and Addresses
to Noteholders........................................... 12-1
Section 12.2 Preservation of Information;
Communications
to Noteholders........................................... 12-1
Section 12.3 Reports by
Corporation................................... 12-1
Section 12.4 Reports by
Trustee....................................... 12-2
ARTICLE THIRTEEN
MISCELLANEOUS............................................. 13-1
Section 13.1 Consent, Etc., of
Noteholders............................ 13-1
Section 13.2 Limitation of
Rights..................................... 13-1
Section 13.3
Severability............................................. 13-1
Section 13.4
Notices.................................................. 13-2
Section 13.5
Counterparts............................................. 13-3
Section 13.6 Indenture Constitutes a
Security Agreement............... 13-3
Section 13.7 Payments Due on Non-Business
Days........................ 13-3
Section 13.8 Notices to Rating
Agencies............................... 13-3
Section 13.9 Governing
Law............................................ 13-3
Section 13.10 Rights of Other
Beneficiaries............................ 13-3
Section 13.11 Conflict with Trust Indenture
Act........................ 13-3
Section 13.12 Opinions as to Trust
Estate.............................. 13-3
Section 13.13 Recording of
Indenture................................... 13-4
</TABLE>
v
<PAGE>
<TABLE>
<S>
<C>
Section 13.14 No
Petition.............................................. 13-4
Section 13.15 Income Tax
Characterization.............................. 13-4
SIGNATURES......................................................................
EXHIBIT A Eligible
FFELP Loan Acquisition Certificate.............. A-1
EXHIBIT B Eligible
FFELP Loan Origination Certificate.............. B-1
EXHIBIT C Student Loan
Acquisition Certificate..................... C-1
EXHIBIT D Form of
Updating Eligible FFELP Loan Acquisition
Certificate..............................................
D-1
EXHIBIT E Eligible
Alternative Loan Acquisition Certificate........ E-1
</TABLE>
vi
<PAGE>
THIS INDENTURE
OF TRUST, dated as of February 1, 2004, between EDUCATION
LOANS INCORPORATED, a corporation duly
organized and existing under the laws of
the State of Delaware (herein called the
"Corporation"), and U.S. BANK NATIONAL
ASSOCIATION, a national banking association
duly established, existing and
authorized to accept and execute trusts of
the character herein set out under
and by virtue of the laws of the United
States (herein called the "Trustee");
RECITALS OF THE CORPORATION
WHEREAS, the
Trustee has entered into certain contracts and agreements,
herein identified, with the Secretary of
Education (hereinafter, together with
the former United States Commissioner of
Education, referred to as the
"Secretary of Education") and each
Guarantee Agency (as hereinafter defined), to
provide an insurance or guarantee program
for student loans incurred under the
Higher Education Act of 1965, as amended,
and the regulations promulgated by the
United States Department of Education
thereunder (hereinafter referred to as the
"Higher Education Act"), that the Trustee
on behalf of the Corporation may
acquire with the proceeds of the sale of
the Corporation's bonds, notes or other
obligations, and it is contemplated that
the Trustee may in the future enter
into comparable agreements with other
Guarantee Agencies; and
WHEREAS, each
Guarantee Agency has entered into agreements with the
Secretary of Education for the payment by
the Secretary of Education of amounts
authorized to be paid pursuant to the
Higher Education Act, including
reimbursement of certain amounts to be paid
upon certain defaulted student loans
guaranteed or insured by such Guarantee
Agency, and interest subsidy payments
and Special Allowance Payments to holders
of loans guaranteed or insured by such
Guarantee Agency, and it is contemplated
that any other Guarantee Agency as
described in the preceding paragraph will
enter into comparable agreements; and
WHEREAS, the
Corporation has duly authorized the execution and delivery of
this Indenture to provide for the issuance
of its Notes, to be issued in one or
more series (hereinafter referred to as the
"Notes") and for the purposes as in
this Indenture provided; and
WHEREAS, all
things necessary to make the Notes, when executed by the
Corporation and authenticated and delivered
by the Trustee hereunder, the valid
obligations of the Corporation, and to make
this Indenture a valid agreement of
the Corporation in accordance with their
and its terms, have been done;
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
The Corporation,
in consideration of the premises and the acceptance by the
Trustee of the trusts hereby created and of
the purchase and acceptance of the
Notes by the Holders thereof, the execution
and delivery of any Swap Agreement
(as hereinafter defined) by any Swap
Counterparty (as hereinafter defined), the
execution and delivery of any Credit
Enhancement Facility (as hereinafter
defined) by any Credit Facility Provider
(as hereinafter defined), the execution
and delivery of any Demand Purchase
Agreement (as hereinafter defined) by any
Credit Facility Provider, and the
acknowledgment thereof by the Trustee, in
order to secure the payment of the
principal of, premium, if any, and interest
on and any Carry-Over Amounts (and accrued
interest thereon) with respect to the
Notes according to their tenor and effect
and the performance and observance by
the Corporation of all the covenants
expressed or implied herein and in the
Notes and in any such Swap Agreement,
Credit Enhancement Facility or Demand
vii
<PAGE>
Purchase Agreement, does hereby grant to
the Trustee, and to its successors in
trust, and to them and their assigns,
forever, a security interest in the
following (the "Trust Estate"):
GRANTING CLAUSE FIRST
All rights,
title, interest and privileges of the Corporation (1) with
respect to Financed Student Loans, in, to
and under the Federal Reimbursement
Contracts, any Servicing Agreement, the
Student Loan Purchase Agreements
(including, but not limited to, those
agreements described in Exhibits H-1, H-2
and H-3 to the First Supplemental
Indenture), the Transfer Agreements, any
Non-Delivery Fees and the Guarantee
Agreements, (2) in, to and under all
Financed Student Loans (including the
evidences of indebtedness thereof and
related documentation), the proceeds of the
sale of the Notes (until expended
for the purpose for which the Notes were
issued) and the revenues, moneys,
evidences of indebtedness , instruments,
securities and other financial assets
(including any earnings thereon) in and
payable into the Acquisition Fund, Note
Fund, Revenue Fund, Reserve Fund,
Administration Fund, Indemnification Fund,
Alternative Loan Guarantee Fund and Surplus
Fund, and any deposit accounts or
securities accounts to which such Financed
Student Loans, proceeds, revenues,
moneys, evidences of indebtedness,
instruments, securities and other financial
assets may be credited, including, without
limitation, the Acquisition Fund,
Note Fund, Revenue Fund, Reserve Fund,
Administration Fund, Indemnification
Fund, Alternative Loan Guarantee Fund and
Surplus Fund and any Accounts or
Subaccounts therein, in the manner and
subject to the prior applications
provided in Article Four hereof, and (3)
in, to and under any Credit Enhancement
Facility, any Demand Purchase Agreement,
any Swap Agreement, any Swap
Counterparty Guarantee, any Depositary
Agreement, any Remarketing Agreement, any
Auction Agent Agreement and any
Broker-Dealer Agreement, all as hereinbefore and
hereinafter defined, including any
contract, any payment intangible, any general
intangible or any evidence of indebtedness
or other rights of the Corporation to
receive any of the same whether now
existing or hereafter coming into existence,
and whether now or hereafter acquired;
GRANTING CLAUSE SECOND
All proceeds
from any property described in these Granting Clauses and any
and all other property of every name and
nature from time to time hereafter by
delivery or by writing of any kind
conveyed, pledged, assigned or transferred,
as and for additional security hereunder by
the Corporation or by anyone in its
behalf or with its written consent to the
Trustee, which is hereby authorized to
receive any and all such property at any
and all times and to hold and apply the
same subject to the terms hereof;
TO HAVE AND TO
HOLD all the same with all privileges and appurtenances
hereby conveyed and assigned, or agreed or
intended so to be, to the Trustee and
its successors in said trust and to them
and their assigns forever;
IN TRUST
NEVERTHELESS, upon the terms and trust herein set forth (i) for
the equal and proportionate benefit,
security and protection of all present and
future Senior Beneficiaries (as hereinafter
defined), without privilege,
priority or distinction as to lien or
otherwise of any of the Senior
Beneficiaries over any of the other, (ii)
for the equal and proportionate
benefit, security and protection of all
present and future Subordinate
Beneficiaries (as hereinafter defined),
without privilege, priority or
distinction as to the lien or otherwise of
any of the Subordinate Beneficiaries
over any of the other, but on a basis
subordinate to the Senior
viii
<PAGE>
Beneficiaries on the terms described
herein, and (iii) for the equal and
proportionate benefit, security and
protection of all present and future Holders
of Class C Notes (as hereinafter defined),
but on a basis subordinate to the
Senior Beneficiaries and the Subordinate
Beneficiaries on the terms described
herein;
PROVIDED,
HOWEVER, that if the Corporation, its successors or assigns,
shall well and truly pay, or cause to be
paid, the principal of and premium, if
any, on the Notes and the interest and any
Carry-Over Amounts (and accrued
interest thereon) with respect thereto due
and to become due thereon, or provide
fully for payment thereof as herein
provided, at the times and in the manner
mentioned in the Notes, according to the
true intent and meaning thereof, and
shall make the payments into the Trust
Funds as required under Article Four
hereof, or shall provide, as permitted
hereby, for the payment thereof by
depositing with the Trustee sums sufficient
for payment of the entire amount due
and to become due thereon as herein
provided, and shall well and truly keep,
perform and observe all the covenants and
conditions pursuant to the terms of
this Indenture to be kept, performed and
observed by it, and shall pay to the
Trustee, any Swap Counterparty and any
Credit Facility Provider all sums of
money due or to become due to them in
accordance with the terms and provisions
hereof, then (except as provided in Section
4.5 hereof or otherwise provided in
a Supplemental Indenture) this Indenture
and the rights hereby granted shall
cease, terminate and be void; otherwise,
this Indenture shall be and remain in
full force and effect.
NOW, THEREFORE,
it is mutually covenanted and agreed for the benefit of all
Holders of the Notes and for the benefit of
any Swap Counterparty and any Credit
Facility Provider, as follows:
ix
<PAGE>
ARTICLE ONE
DEFINITIONS AND GENERAL PROVISIONS
Section 1.1
Definitions. In
this Indenture the following terms have the
following respective meanings unless the
context hereof clearly requires
otherwise:
"Account" shall
mean any of the Accounts created or established by this
Indenture.
"Accountant"
shall mean Eide Helmeke PLLP, Certified Public Accountants,
Aberdeen, South Dakota, any other
registered or certified public accountant or
firm of such accountants duly licensed to
practice and practicing as such under
the laws of the State, selected and paid by
the Corporation, who is Independent
and not under the domination of the
Corporation, but who may be regularly
retained to make annual or similar audits
of the books or records of the
Corporation.
"Acquisition
Fund" shall mean the Acquisition Fund created and established
by Section 4.1 hereof.
"Acting
Beneficiaries Upon Default" shall mean, as such term is used in
Article Six hereof:
(a) at any time that any Senior Notes
are Outstanding:
(i) for purposes
of clause (i) of Section 6.2(A) hereof, the Holders
of a majority in
aggregate Principal Amount of Class A Notes Outstanding;
(ii) for purposes of
clause (ii) of Section 6.2(A) hereof, the
Holders of one
hundred percent (100%) in aggregate Principal Amount of
Class A Notes
Outstanding;
(iii) for purposes of Sections 6.2(B), 6.3, 6.4 and 6.13 hereof,
the
Holders of a
majority in aggregate Principal Amount of the Class A Notes
Outstanding;
and
(iv) for all other
purposes hereunder, the Holders of a majority in
aggregate
Principal Amount of Class A Notes Outstanding;
(b) at any time that no Senior Notes
are Outstanding but Subordinate Notes
are Outstanding:
(i) for purposes
of clause (i) of Section 6.2(A) hereof, the Holders
of a majority in
aggregate Principal Amount of Class B Notes Outstanding;
(ii) for purposes of
clause (ii) of Section 6.2(A) hereof, the
Holders of one
hundred percent (100%) in aggregate Principal Amount of
Class B Notes
Outstanding;
(iii) for purposes of Sections 6.2(B), 6.3, 6.4 and 6.13 hereof,
the
Holders of a
majority in aggregate Principal Amount of the Class B Notes
Outstanding;
and
1-1
<PAGE>
(iv) for all other
purposes hereunder, the Holders of a majority in
aggregate
Principal Amount of Class B Notes Outstanding;
(c) at any time no Senior Notes or
Subordinate Notes are Outstanding but
Senior Obligations are Outstanding:
(i) for purposes
of clause (i) of Section 6.2(A) hereof, any Other
Senior
Beneficiary;
(ii) for purposes of
clause (ii) of Section 6.2(A) hereof, all Other
Senior
Beneficiaries;
(iii) for purposes of Sections 6.2(B), 6.3, 6.4 and 6.13 hereof,
any
Other Senior
Beneficiary, unless the Trustee shall, in its sole discretion,
determine that
the requesting action is not in the overall interest of the
Senior
Beneficiaries or shall have received or shall thereafter
receive
conflicting
requests or directions from one or more Other Senior
Beneficiaries;
and
(iv) for all other
purposes hereunder, any Other Senior Beneficiary;
(d) at any time that no Senior
Obligations or Subordinate Notes are
Outstanding but Subordinate Obligations are
Outstanding:
(i)
for purposes of
clause (i) of Section 6.2(A) hereof, any Other
Subordinate
Beneficiary;
(ii) for purposes of
clause (ii) of Section 6.2(A) hereof, all Other
Subordinate
Beneficiaries;
(iii) for purposes of Sections 6.2(B), 6.3, 6.4 and 6.13 hereof,
any
Other
Subordinate Beneficiaries, unless the Trustee shall, in its
sole
discretion,
determine that the requested action is not in the overall
interest of the
Subordinate Beneficiaries or shall have received or shall
thereafter
receive conflicting requests or directions from one or more
Other
Subordinate Beneficiaries; and
(iv) for all other
purposes hereunder, any Other Subordinate
Beneficiary;
and
(e) at any time that no Senior
Obligations are Outstanding and no
Subordinate Obligations are Outstanding,
for all purposes hereunder, the Holders
of a majority in aggregate Principal Amount
of Class C Notes Outstanding.
"Administration
Fund" shall mean the Administration Fund created and
established by Section 4.1 hereof.
"Administrative
Expenses" shall mean the Corporation's actual expenses,
excluding Note Fees but including Servicing
Fees and any other expenses of the
Corporation incurred in connection with the
servicing of Financed Student Loans
(including any cost of conversion of one
Servicer to another), of carrying out
and administering its powers, duties and
functions under
1-2
<PAGE>
(1) its articles of incorporation, its
bylaws, the Student Loan Purchase
Agreements, any Servicing Agreement, any
Bailment Agreement, the Guarantee
Agreements, the Program, the Higher
Education Act, any Alternative Loan Program
or any requirement of the laws of the
United States with respect to the Program,
as such powers, duties and functions relate
to Financed Student Loans, (2) any
Swap Agreement, Credit Enhancement Facility
or Demand Purchase Agreement (other
than amounts payable thereunder which
constitute Other Obligations), (3) any
Remarketing Agreement, Depositary
Agreement, Auction Agent Agreement or
Broker-Dealer Agreement, and (4) this
Indenture. Such expenses may include,
without limiting the generality of the
foregoing, salaries, supplies, utilities,
mailing, labor, materials, office rent,
maintenance, furnishings, equipment,
machinery, telephones, travel expenses,
insurance premiums, and legal,
accounting, management, consulting and
banking services and expenses, and
payments for pension, retirement, health
and hospitalization and life and
disability insurance benefits; but shall
not include (i) debt service on the
Notes or any other bonds, notes or other
evidences of indebtedness of the
Corporation, (ii) amounts payable under any
Other Obligation or (iii) Costs of
Issuance or the fees, costs or expenses of
the Corporation with respect to any
other bonds, notes or indebtedness of the
Corporation.
"Affiliate"
shall mean, with respect to any Person, any other Person
directly or indirectly controlling,
controlled by, or under direct or indirect
common control with such specified Person.
For the purposes of this definition,
"control," when used with respect to any
specified Person, shall mean the power
to direct the management and policies of
such Person, directly or indirectly,
whether through the ownership of voting
securities, by contract or otherwise;
and the terms "controlling" and
"controlled" have meanings correlative to the
foregoing.
"Aggregate
Value" shall mean on any calculation date the sum of the Values
of all assets of the Trust Estate, less
moneys in any Fund or Account which the
Corporation is then entitled to receive for
deposit into the Indemnification
Fund but has not yet removed from the Trust
Estate, and less any funds to be
used to pay Costs of Issuance unless, under
the provisions of a Supplemental
Indenture, such funds are not to be applied
to the payment of Costs of Issuance
to the extent the Senior Asset Requirement
would not be met after such payment.
"Alternative
Loan Guarantee Fund" shall mean the Fund by that name created
and established by Section 4.1 hereof.
"Alternative
Loan Program" shall mean each program for the making of
Student Loans other than FFELP Loans that
is identified in a Supplemental
Indenture as a program the Alternative
Loans under which are eligible to be
Financed under this Indenture.
"Alternative
Loans" shall mean Student Loans that are originated under
Alternative Loan Programs.
"Auction Agent"
shall mean, with respect to any series of Notes, any bank,
national banking association or trust
company designated as such with respect to
such Notes pursuant to the provisions of a
Supplemental Indenture, and its
successor or successors, and any bank,
national banking association or trust
company at any time substituted in its
place pursuant to such Supplemental
Indenture.
1-3
<PAGE>
"Auction Agent
Agreement" shall mean, with respect to any series of Notes,
an agreement among an Auction Agent, the
Trustee and the Corporation setting
forth the rights and obligations of the
Auction Agent acting in such capacity
with respect to such Notes under this
Indenture and the related Supplemental
Indenture, including any supplement thereto
or amendment thereof entered into in
accordance with the provisions thereof.
"Authenticating
Agent," when used with respect to a series of Notes, shall
mean a bank or trust company appointed for
the purpose of receiving,
authenticating and delivering Notes of that
series in connection with transfers,
exchanges and registrations as in this
Indenture provided, and its successor or
successors and any other bank or trust
company which may at any time be
substituted in its place as Authenticating
Agent pursuant to this Indenture.
"Authorized
Officer," when used with reference to the Corporation, shall
mean the chairman of the Board, the
president, any vice president, the secretary
or other person designated in writing to
the Trustee from time to time by the
Board.
"Bailment
Agreement" shall mean any agreement among the Corporation, the
Trustee and a bailee, including the
Servicer or any sub-servicer, providing for
the bailee to act as the agent of the
Trustee in perfecting the Trustee's
security interest in Financed FFELP Loans,
including any supplement thereto or
amendment thereof entered into in
accordance with the provisions thereof.
"Balance," when
used with reference to any Account or Fund, shall mean the
aggregate sum of all assets standing to the
credit of such Account or Fund,
including, without limitation, Investment
Securities computed at the Value of
Investment Securities; Notes purchased with
moneys standing to the credit of
such Fund or Account computed at the
Principal Amount of such Notes; Financed
Student Loans computed at the Principal
Balance thereof; and lawful money of the
United States; provided, however, that (1)
the Balance of the Interest Account
shall not include amounts standing to the
credit thereof which are being held
therein for (A) the payment of past due and
unpaid interest on Notes, or (B) the
payment of interest on Notes that are
deemed no longer Outstanding as a result
of the defeasance thereof pursuant to
subparagraph (ii) of the first paragraph
of Section 11.1 hereof, and (2) the
Balances of the Principal Account and the
Retirement Account shall not include
amounts standing to the credit thereof
which are being held therein for the
payment of principal of or premium, if any,
on Notes which are deemed no longer
Outstanding in accordance with the
provisions of subparagraph (ii) of the
first paragraph of Section 11.1 hereof.
"Beneficiaries"
shall mean, collectively, all Senior Beneficiaries, all
Subordinate Beneficiaries and all Holders
of any Outstanding Class C Notes.
"Board" shall
mean the Board of Directors of the Corporation.
"Board
Resolution" shall mean a copy of a resolution certified by the
secretary or an assistant secretary of the
Corporation to have been duly adopted
by the Board and to be in full force and
effect on the date of such
certification, and delivered to the
Trustee.
"Broker-Dealer"
shall mean, with respect to any series of Notes, any broker
or dealer (each as defined in the
Securities Exchange Act of 1934, as amended),
commercial bank or other
1-4
<PAGE>
entity permitted by law to perform the
functions required of a broker-dealer set
forth in the auction procedures relating to
such Notes, designated as such with
respect to such Notes pursuant to the
provisions of a Supplemental Indenture,
and its successor or successors, and any
broker or dealer, commercial bank or
other entity at any time substituted in its
place pursuant to such Supplemental
Indenture.
"Broker-Dealer
Agreement" shall mean, with respect to any series of Notes,
an agreement between an Auction Agent and a
Broker-Dealer, and approved by the
Corporation, setting forth the rights and
obligations of the Broker-Dealer
acting in such capacity with respect to
such Notes under this Indenture and the
related Supplemental Indenture, including
any supplement thereto or amendment
thereof entered into in accordance with the
provisions thereof.
"Budgeted
Administrative Expenses" shall mean, with respect to each
Fiscal
Year, subject to the provisions of Section
5.15 hereof, an amount of
Administrative Expenses budgeted by the
Corporation for such Fiscal Year, as
evidenced by a Board Resolution adopted
prior to the commencement of such Fiscal
Year; provided that such Budgeted
Administrative Expenses shall not exceed (and,
in the absence of a Board Resolution with
respect thereto, shall be assumed to
be equal to) the amount of Administrative
Expenses permitted to be paid, or
reimbursed to the Corporation, from the
Administration Fund pursuant to any
Supplemental Indenture providing for the
issuance of a series of Notes.
"Business Day"
shall mean, except as otherwise provided in a Supplemental
Indenture, a day of the year other than a
Saturday, a Sunday or a day on which
banks located in the city in which the
Principal Office of the Trustee is
located, in the city in which the Principal
Office of any Authenticating Agent
is located, in the city in which the
Principal Office of any Paying Agent (other
than the Trustee) is located, in the city
in which the Principal Office of any
Auction Agent is located, or in the city in
which the Principal Office of any
Depositary is located, are required or
authorized by law to remain closed, or on
which The New York Stock Exchange is
closed.
"Carry-Over
Amount" shall mean, if and to the extent specifically provided
for as such in a Supplemental Indenture
with respect to a series of Variable
Rate Notes, the amount, if any, by which
(i) the interest payable on such series
with respect to a given interest period is
exceeded by (ii) the interest that
otherwise would have been payable with
respect to such interest period but for a
limitation on the interest rate for such
interest period based upon the
anticipated return on Financed Student
Loans, together with the unpaid portion
of any such excess from prior interest
periods. To the extent required by a
Supplemental Indenture providing for any
Carry-Over Amount, interest will accrue
on such Carry-Over Amount until paid. Any
reference to "principal" or "interest"
in this Indenture and in the related Notes
shall not include, within the
meanings of such words, any Carry-Over
Amount or any interest accrued on any
Carry-Over Amount.
"Cash Flow
Projection" shall mean a projection as to future revenues and
cash flow through the final Stated Maturity
of the Outstanding Notes based upon
existing facts and, to the extent not so
based, upon assumptions accepted by
each Rating Agency (including, without
limitation, assumptions relating to
variable rates of interest under Swap
Agreements, Credit Enhancement Facilities
and Demand Purchase Agreements and on any
Notes) and the following
1-5
<PAGE>
assumptions: (1) a thirty (30)-day lag in
receipt of borrower payments, and a
sixty (60)-day lag in receipt of federal
payments, with respect to Financed
Student Loans; (2) no prepayments of
principal of Financed Student Loans; (3)
bond-equivalent rates of 91-day or 52-week
U.S. Treasury bills (for purposes of
determining returns on Financed Student
Loans that are based upon such rates or
averages thereof) equal to known rates (or
averages) for such time as they are
known, and thereafter equal to five and
two-tenths percent (5.2%) per annum; and
(4) a reinvestment rate of five and
two-tenths percent (5.2%) per annum. The
foregoing assumptions may, pursuant to a
Supplemental Indenture as provided in
Section 8.1(h) hereof, be replaced with or
supplemented by such other reasonable
assumptions as will not result in the
withdrawal or reduction of the
then-current rating of any of the
Unenhanced Outstanding Notes, as evidenced by
written confirmation to that effect from
each Rating Agency, or, if no
Unenhanced Notes are then Outstanding, but
Other Obligations are Outstanding, as
are acceptable to the Other Beneficiaries
holding such Other Obligations, as
evidenced in writing to the Trustee by each
such Other Beneficiary.
"Class A Notes"
shall mean any Notes designated in a Supplemental Indenture
as Class A Notes, which are secured under
this Indenture on a basis senior to
any Subordinate Obligations and any Class C
Notes (as such seniority is
described in Section 3.12 hereof), and on a
parity with Other Senior
Obligations.
"Class B Notes"
shall mean any Notes designated in a Supplemental Indenture
as Class B Notes, which are secured under
this Indenture on a basis subordinate
to any Senior Obligations (as such
subordination is described in Section 3.12
hereof and elsewhere herein), on a parity
with Other Subordinate Obligations but
on a basis senior to any Class C Notes (as
such seniority is described in
Section 3.12 hereof and elsewhere
herein).
"Class C Notes"
shall mean any Notes designated in a Supplemental Indenture
as Class C Notes, which are secured under
this Indenture subordinate to any
Senior Obligations and any Subordinate
Obligations (as such subordination is
described in Section 3.12 hereof and
elsewhere herein).
"Code" shall
mean the Internal Revenue Code of 1986, as amended.
"Consolidation
Loan" shall mean a Student Loan authorized under Section
428C of the Higher Education Act.
"Corporation"
shall mean (1) Education Loans Incorporated, a corporation
duly organized and existing under the laws
of the State of Delaware, (2) any
successor thereto under this Indenture, and
(3) for purposes of any provision
contained herein and required by the TIA,
each other obligor on the Notes.
"Corporation
Request," "Corporation Order," "Corporation Certificate" or
"Corporation Consent" shall mean,
respectively, a written request, order,
certificate or consent signed in the name
of the Corporation by an Authorized
Officer and delivered to the Trustee.
"Corporation
Student Loan Purchase Agreements" shall mean all agreements
between the Corporation and a Lender (in
the case of FFELP Loans) or SLFC (in
the case of Alternative Loans) providing
for the sale by such Lender or SLFC to
the Corporation of Student Loans
1-6
<PAGE>
Financed or to be Financed under this
Indenture and substantially in the forms
which are on file with the Trustee,
including amendments thereto made in
accordance with Section 5.18 hereof.
"Corporation
Swap Payment" shall mean a payment due to a Swap Counterparty
from the Corporation pursuant to the
applicable Swap Agreement (including, but
not limited to, payments in respect of any
early termination of such Swap
Agreement).
"Costs of
Issuance" shall mean all items of expense directly or
indirectly
payable by or reimbursable to the
Corporation and related to the authorization,
sale and issuance of a series of the Notes,
including, but not limited to,
printing costs, costs of preparation and
reproduction of documents, filing fees,
initial fees and charges of the Trustee,
any Authenticating Agent, any Deposit
Agent, any Remarketing Agent, any
Depositary, any Auction Agent or any
Broker-Dealer, legal fees and charges, fees
and disbursements of underwriters,
consultants and professionals,
underwriters' discount, costs of credit ratings,
fees and charges for preparation,
execution, transportation and safekeeping of
such Notes, other costs incurred by the
Corporation in anticipation of the
issuance of such Notes and any other cost,
charge or fee in connection with the
issuance of such Notes.
"Counsel" shall
mean a person, or firm of which such a person is a member,
authorized in any state to practice
law.
"Counterparty
Swap Payment" shall mean a payment due to or received by the
Corporation from a Swap Counterparty
pursuant to a Swap Agreement (including,
but not limited to, payments in respect of
any early termination of such Swap
Agreement) and amounts received by the
Corporation under any related Swap
Counterparty Guarantee.
"Credit
Enhancement Facility" shall mean, if and to the extent provided
for
in a Supplemental Indenture described in
Section 8.1(i) hereof, with respect to
Notes of one or more series of the same
class, an insurance policy insuring, or
a letter of credit or surety bond providing
a direct or indirect source of funds
for, the timely payment of principal of and
interest on such Notes (but not
necessarily principal due upon acceleration
thereof under Section 6.2 hereof),
and all agreements entered into by the
Corporation or the Trustee with respect
thereto.
"Credit Facility
Provider" shall mean, if and to the extent provided for in
a Supplemental Indenture entered into
pursuant to Section 8.1(i), any Person or
Persons engaged by the Corporation (i)
pursuant to a Demand Purchase Agreement,
to provide credit enhancement or liquidity
for the Corporation's obligation to
repurchase or redeem Notes of one or more
series of the same class subject to a
remarketing which have not been remarketed,
or (ii) pursuant to a Credit
Enhancement Facility, to provide credit
enhancement for the payment of the
principal of and interest on any or all of
the Notes of one or more series.
"Debt Service"
shall mean: (1) with respect to any Notes, as of any
particular date and with respect to any
particular period, the aggregate of the
moneys to be paid or set aside on such date
or during such period for the
payment (or retirement) of the principal
of, premium, if any, and interest on
Notes, after giving effect to any
Corporation Swap Payments and Counterparty
Swap Payments, and (2) with respect to
Other Obligations, as of any particular
date and with respect to any particular
period, the aggregate of the moneys to
be paid or set aside on such date
1-7
<PAGE>
or during such period for the payment of
amounts payable by the Corporation
under any Swap Agreements, Credit
Enhancement Facilities or Demand Purchase
Agreements, including, inter alia, fees
payable by the Corporation to the Credit
Facility Provider thereunder.
"Defaulted
Interest" shall have the meaning given in Section 3.2 hereof.
"Deemed
Tendered" shall mean, with respect to any Note, a Note deemed
tendered in accordance with the provisions
of the Supplemental Indenture
providing for the issuance thereof.
"Demand Note"
shall mean a Note required to be purchased by or on behalf of
the Corporation, at the option of the
Holder thereof, upon receipt of a Purchase
Demand.
"Demand Purchase
Agreement" shall mean any or all of the credit facilities,
reimbursement agreements, standby purchase
agreements and the like, pertaining
to Notes of one or more series issued with
a tender right granted to or tender
obligation imposed on the Holder thereof,
if and to the extent provided for in a
Supplemental Indenture described in Section
8.1(i) hereof.
"Deposit Agent"
shall mean any bank or banking association having trust
powers or trust company designated as such
pursuant to the provisions of Section
7.19 hereof and its successor or successors
and any other bank or banking
association having trust powers or trust
company at any time substituted in its
place pursuant to this Indenture.
"Depositary"
shall mean, with respect to any series of Notes, any
commercial bank or banking association
having trust powers or trust company
designated as such with respect to such
Notes pursuant to the provisions of
Section 7.20 hereof and its successor or
successors and any other commercial
bank or banking association having trust
powers or trust company at any time
substituted in its place pursuant to this
Indenture.
"Depositary
Agreement" shall mean an agreement among a Depositary, the
Trustee, the Corporation, any Remarketing
Agent and/or any related Credit
Facility Provider setting forth the rights
and obligations of the Depositary
acting in such capacity under this
Indenture and otherwise meeting the
requirements of Section 7.20 hereof,
including any supplement thereto or
amendment thereof entered into in
accordance with the provisions thereof.
"Eligible
Alternative Loan Acquisition Certificate" shall mean a
certificate signed by an Authorized Officer
of the Corporation and substantially
in the form attached as Exhibit E
hereto.
"Eligible
Borrower" shall mean a borrower who, in the case of a FFELP
Loan,
is eligible under the Higher Education Act,
or, in the case of an Alternative
Loan, is eligible under an Alternative Loan
Program, to be the obligor of a loan
for financing a program of post-secondary
education, including a borrower who is
eligible under the Higher Education Act to
be an obligor of a Plus Loan.
"Eligible FFELP
Loan Acquisition Certificate" shall mean a certificate
signed by an Authorized Officer of the
Corporation and substantially in the form
attached as Exhibit A hereto.
1-8
<PAGE>
"Eligible FFELP
Loan Origination Certificate" shall mean a certificate
signed by an Authorized Officer of the
Corporation and substantially in the form
attached as Exhibit B hereto.
"Eligible Loan"
shall mean: (A) a FFELP Loan which: (1) has been or will be
made to an Eligible Borrower for
post-secondary education; (2) is Guaranteed by
a Guarantee Agency to the extent of not
less than ninety-eight percent (98%) of
the principal thereof and all accrued
interest thereon; (3) is an "eligible
loan" as defined in Section 438 of the
Higher Education Act for purposes of
receiving Special Allowance Payments; and
(4) bears interest at a rate per annum
not less than or in excess of the
applicable rate of interest provided by the
Higher Education Act, or such lesser rates
as may be approved by each Rating
Agency; or (B) any other Student Loan
(including Alternative Loans) if the
Corporation shall have caused to be
provided to the Trustee written confirmation
from each Rating Agency that treating such
type of loan as an Eligible Loan will
not adversely affect any rating or ratings
then applicable to any of the
Unenhanced Notes or, if no Unenhanced Notes
are then Outstanding, but Other
Obligations are Outstanding, such Other
Beneficiaries holding such Other
Obligations consent to the treatment of
such type of loan an Eligible Loan, as
evidenced in writing to the Trustee by each
such Other Beneficiary; provided
that if, after any reauthorization or
amendment of the Higher Education Act, any
FFELP Loans authorized thereunder,
including the benefits to which they are
entitled, are materially different from
FFELP Loans authorized prior to such
reauthorization or amendment, such FFELP
Loans shall not be Financed as Eligible
Loans hereunder after such reauthorization
or amendment unless the Trustee has
received a written confirmation from each
Rating Agency that including such
loans as Eligible Loans will not adversely
affect any rating or ratings then
applicable to any of the Unenhanced
Bonds.
"Eligible
Termination Events" shall mean those termination events under
each Swap Agreement set forth in a
Supplemental Indenture and as to which the
Trustee has received a written confirmation
from each Rating Agency that
treating such termination events as
Eligible Termination Events under this
Indenture would not adversely affect any
rating or ratings then applicable to
any of the Unenhanced Bonds.
"Event of
Default" shall mean one of the events described as such in
Section 6.1 hereof.
"Exchange Act"
shall mean the Securities Exchange Act of 1934, as amended.
"Federal
Reimbursement Contract" shall mean any agreement between a
Guarantee Agency and the Secretary of
Education providing for the payment by the
Secretary of Education of amounts
authorized to be paid pursuant to the Higher
Education Act, including (but not
necessarily limited to) reimbursement of
amounts paid or payable upon defaulted
Financed Student Loans and other student
loans guaranteed or insured by the
Guarantee Agency and interest subsidy
payments to holders of qualifying student
loans guaranteed or insured by the
Guarantee Agency.
"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 specified guidelines,
and the repayment of such loans is
guaranteed by a guarantee agency, and any
predecessor or successor program.
1-9
<PAGE>
"FFELP Loans"
shall mean Student Loans made under the FFEL Program or the
FISL Program.
"Financed," when
used with respect to Student Loans or Eligible Loans,
shall mean Student Loans or Eligible Loans,
as the case may be, acquired or
originated by the Trustee on behalf of the
Corporation with moneys in the
Acquisition Fund or the Surplus Account,
any Eligible Loans received in exchange
for Financed Student Loans upon the sale
thereof or substitution therefor in
accordance with Section 4.2 hereof and any
other Student Loans deemed to be
"Financed" with moneys in the Acquisition
Fund and the Surplus Account pursuant
to this Indenture, but does not include (1)
Student Loans released from the lien
of this Indenture and sold, as permitted in
this Indenture, to any purchaser,
including a trustee for the holders of the
Corporation's bonds, notes or other
evidences of indebtedness or (2) for
certain purposes under this Indenture,
Liquidated Alternative Loans.
"Fiscal Year"
shall mean the fiscal year of the Corporation as established
from time to time.
"FISL Program"
shall mean the federal loan insurance program created under
the Higher Education Act whereby the
Secretary of Education directly insures the
repayment of at least eighty percent (80%)
of the principal of (or in certain
cases up to one hundred percent (100%) of
the principal of and accrued interest
on) student loans under the Higher
Education Act.
"Fitch" shall
mean Fitch Ratings, its successors and their assigns, and, if
such partnership shall be dissolved or
liquidated or shall no longer perform the
functions of a securities rating agency,
"Fitch" shall be deemed to refer to any
other nationally recognized securities
rating agency designated by the Trustee,
at the written direction of the
Corporation.
"GOAL Funding"
shall mean GOAL Funding, Inc., a corporation duly organized
and existing under the laws of the State of
Delaware, its successors and
assigns.
"GOAL Funding
II" shall mean GOAL Funding II, Inc., a corporation duly
organized and existing under the laws of
the State of Delaware, its successors
and assigns.
"Government
Obligations" shall mean direct obligations of, or obligations
the full and timely payment of the
principal of and interest on which are
unconditionally guaranteed by, the United
States of America.
"Guarantee" or
"Guaranteed" shall mean, with respect to a FFELP Loan, the
insurance or guarantee by a Guarantee
Agency, to the extent provided in the
Higher Education Act, of the principal of
and accrued interest on such FFELP
Loan, and, where applicable, the coverage
of such FFELP Loan by one or more
Federal Reimbursement Contracts providing,
among other things, for reimbursement
to the Guarantee Agency for losses incurred
by it on defaulted Financed Student
Loans insured or guaranteed by the
Guarantee Agency to the extent provided in
the Higher Education Act.
"Guarantee
Agency" shall mean (1) Education Assistance Corporation, and
its
successors and assigns, including, without
limitation, the Secretary of
Education, (2) Pennsylvania Higher
Education Assistance Agency, and its
successors and assigns, including, without
limitation, the Secretary of
Education, (3) United Student Aid Funds,
Inc., and its successors and assigns,
including, without limitation, the
1-10
<PAGE>
Secretary of Education, (4) Student Loans
of North Dakota, and its successors
and assigns, including, without limitation,
the Secretary of Education, (5)
Northwest Education Loan Association, and
its successors and assigns, including,
without limitation, the Secretary of
Education, (6) Great Lakes Higher Education
Guaranty Corporation, and its successors
and assigns, including, without
limitation, the Secretary of Education, (7)
Educational Credit Management
Corporation (formerly known as Transitional
Guaranty Agency, Inc.), and its
successors and assigns, including, without
limitation, the Secretary of
Education, (8) Iowa College Student Aid
Commission, and its successors and
assigns, including, without limitation, the
Secretary of Education, (9) Missouri
Student Loan Program, and its successors
and assigns, including, without
limitation, the Secretary of Education,
(10) Illinois Student Assistance
Commission, and its successors and assigns,
including, without limitation, the
Secretary of Education, (11) California
Student Aid Commission, and its
successors and assigns, including, without
limitation, the Secretary of
Education, (12) Oregon Student Assistance
Commission, and its successors and
assigns, including, without limitation, the
Secretary of Education, (13) Texas
Guaranteed Student Loan Corporation, and
its successors and assigns, including,
without limitation, the Secretary of
Education, (14) Massachusetts Higher
Education Assistance Corporation (d/b/a as
American Student Assistance), and its
successors and assigns, including, without
limitation, the Secretary of
Education, (15) Student Loan Guarantee
Foundation of Arkansas, Inc., and its
successors and assigns, including, without
limitation, the Secretary of
Education, (16) Colorado Student Loan
Program, and its successors and assigns,
including, without limitation, the
Secretary of Education, (17) Kentucky Higher
Education Assistance Authority, and its
successors and assigns, including,
without limitation, the Secretary of
Education, (18) Finance Authority of Maine,
and its successors and assigns, including,
without limitation, the Secretary of
Education, (19) Michigan Higher Education
Assistance Authority, with is
component unit, Michigan Guaranty Agency,
and its successors and assigns,
including, without limitation, the
Secretary of Education, (20) Montana
Guaranteed Student Loan Program, and its
successors and assigns, including,
without limitation, the Secretary of
Education, (21) National Student Loan
Program, Inc., and its successors and
assigns, including, without limitation,
the Secretary of Education, (22) New York
State Higher Education Services
Corporation, and its successors and
assigns, including, without limitation, the
Secretary of Education, (23) New Jersey
Higher Education Student Assistance
Authority, and its successors and assigns,
including, without limitation, the
Secretary of Education, (24) Oklahoma State
Regents for Higher Education, and
its successors and assigns, including,
without limitation, the Secretary of
Education, (25) Louisiana Office of Student
Financial Assistance, and its
successors and assigns, including, without
limitation, the Secretary of
Education, (26) Florida Department of
Education, Office of Student Financial
Assistance, and its successors and assigns,
including, without limitation, the
Secretary of Education, (27) Rhode Island
Higher Education Assistance Authority
and its successors and assigns, including
without limitation, the Secretary of
Education, (28) the Secretary of Education,
to the extent the Secretary of
Education has directly insured or
guaranteed FFELP Loans, or (29) any other
state agency or private nonprofit
institution or organization which administers
a Guarantee Program, subject to
confirmation of ratings on any Outstanding
Unenhanced Notes or, if no Unenhanced Notes
are then Outstanding but Other
Obligations are Outstanding, consent of
each Other Beneficiary holding such
Outstanding Other Obligations, as evidenced
in writing to the Trustee by each
such Other Beneficiary.
1-11
<PAGE>
"Guarantee
Agreements" shall mean, collectively, (1) that certain Lender
Agreement for Guarantee of Student Loans
With Federal Reinsurance, dated July 3,
1997, and those certain Certificates of
Comprehensive Insurance, dated September
12, 1997, September 29,1998, October 1,
1999, October 11, 2000, September 27,
2001, September 28, 2001, May 17, 2002, and
September 24, 2002, respectively,
each between the Trustee and Education
Assistance Corporation, (2) that certain
Lender Agreement for Guarantee of Student
Loans With Federal Reinsurance, dated
February 28, 1994, between the Trustee and
Pennsylvania Higher Education
Assistance Agency, (3) that certain
Agreement to Guarantee Loans, dated February
22, 2002, that certain Agreement to
Guarantee Consolidation Loans, dated
February 22, 2002, and that certain
Certificate of Comprehensive Guarantee
Coverage, dated February 22, 2002, each
between the Trustee and United Student
Aid Funds, Inc., (4) that certain Lender
Participation Agreement for Insurance,
dated July 8, 1997, between the Trustee and
Student Loans of North Dakota, (5)
that certain Agreement to Guarantee Loans,
dated March 22, 1999, that certain
Lender Participation Agreement for
Consolidation Loans, dated August 16, 2002,
and that certain Blanket Certificate of
Loan Guaranty, dated September 9, 2002,
each between the Trustee and Northwest
Education Loan Association, (6) that
certain Student Loan Guaranty, dated July
15, 1997, and that certain Certificate
of Comprehensive Insurance for
Consolidation Loans, dated June 1, 2002, each
between the Trustee and Great Lakes Higher
Education Guaranty Corporation, (7)
that certain Agreement for Payment on
Guarantee of Student Loans With Federal
Reinsurance, dated January 30, 2002, and
that certain Certificate of
Comprehensive Guarantee for Consolidation
Loans, dated January 30, 2002, each
between the Trustee and Educational Credit
Management Corporation (formerly
known as Transitional Guaranty Agency,
Inc.), (8) that certain Agreement to
Guarantee Loans, dated July 15, 1997, and
that certain Agreement to Guarantee
PLUS/SLS Loans, dated July 15, 1997, each
between the Trustee and Iowa Student
College Aid Commission, (9) that certain
Agreement to Guarantee Federal Stafford
Loans (Subsidized and Unsubsidized),
Federal PLUS Loans, Federal SLS Loans,
dated July 15, 1997, that certain Lender
Participation Agreement, dated February
7, 2002, and that certain Certificate of
Comprehensive Insurance, dated July 16,
2002, each between the Trustee and Missouri
Student Loan Program, (10) those
certain Holder Agreements, dated July 7,
1997, and January 7, 2000,
respectively, each between the Trustee and
Illinois Student Assistance
Commission, (11) that certain Agreement to
Guarantee Loans Made by a Commercial
Lender, dated July 10, 1997, that certain
Agreement to Guarantee CLAS Program
Loans Made by a Commercial Lender, dated
July 10, 1997, that certain
Consolidation Loan Program Lender
Participation Agreement, dated July 6, 1997,
that certain Certificate of Comprehensive
Insurance (for Federal Consolidation
Loans made in accordance with Title IV,
Part B of the Higher Education Act of
1965, as amended), dated July 17, 1997, and
that certain Agreement (relating to
the guarantee of loans for attendance at
educational institutions), dated August
29, 2001, each between the Trustee and
California Student Aid Commission, (12)
that certain Agreement to Endorse Loans,
dated January 30, 2002, that certain
Agreement to Guarantee Federal
Consolidation Loans, dated January 30, 2002, that
certain Certificate of Comprehensive
Guarantee Coverage, dated January 30, 2002,
and that certain Certificate of
Comprehensive Insurance, dated February 27,
2002, each between the Trustee and Oregon
Student Assistance Commission, (13)
that certain Lender Participation
Agreement, dated April 18, 2000, that certain
Consolidation Loans Lender Participation
Agreement, dated April 18, 2000, and
that certain Certificate of Comprehensive
Insurance, dated April 18, 2000, each
between the Trustee and Texas Guaranteed
Student Loan Corporation, (14) that
certain Guarantee Agreement, dated June
1-12
<PAGE>
19, 2002, between the Trustee and
Massachusetts Higher Education Assistance
Corporation (d/b/a as American Student
Assistance), (15) that certain Agreement
to Guarantee Loans, dated January 30, 2002,
between the Trustee and Student Loan
Guarantee Foundation of Arkansas, Inc.,
(16) that certain Lender Program
Participation Agreement, dated February 26,
2002, and that certain Certificate
of Comprehensive Insurance, dated February
25, 2002, each between the Trustee
and Student Loan Division of the Colorado
Student Loan Program, (17) that
certain Lender Participation Agreement and
Contract of Insurance, dated July 5,
2001, between the Trustee and Kentucky
Higher Education Assistance Authority,
(18) that certain Agreement to Guarantee
Loans, dated February 20, 2002, that
certain Agreement to Guarantee
Consolidation Loans, dated February 20, 2002, and
that certain Certificate of Comprehensive
Guarantee Coverage, dated February 20,
2002, each between the Trustee and Finance
Authority of Maine, (19) that certain
Agreement to Guarantee Loans, dated January
30, 2002, that certain Agreement to
Guarantee Consolidation Loans, dated
January 30, 2002, and that certain
Certificate of Comprehensive Guarantee
Coverage, dated January 30, 2002, each
between the Trustee and Michigan Higher
Education Assistance Authority, with is
component unit, Michigan Guaranty Agency,
(20) that certain Agreement to
Guarantee Federal Family Education Loans,
dated January 30, 2002, that certain
Agreement (relating to the guarantee of
consolidation loans), dated February 15,
2002, and that certain Certificate of
Comprehensive Insurance for Consolidation
Loans, dated January 30, 2002, each between
the Trustee and Montana Guaranteed
Student Loan Program, (21) that certain
Lender Agreement for Guarantee of
Student Loans with Federal Reinsurance,
dated January 30, 2002, that certain
Lender Agreement for Guarantee of Federal
Consolidation Loans with Federal
Reinsurance, dated January 30, 2002, that
certain Blanket Certificate of
Guarantee with Respect to Student Loans
with Federal Reinsurance, dated February
15, 2002, and that certain Certificate of
Guarantee with respect to Federal
Consolidation Loans, dated February 27,
2002, each between the Trustee and
National Student Loan Program, Inc., (22)
that certain Loan Guarantee Agreement
with Lending Institution, dated January 30,
2002, that certain Lender
Participation Agreement, dated July 1,
2002, and that certain Certificate of
Comprehensive Insurance, dated July 1,
2002, each between the Trustee and New
York State Higher Education Services
Corporation, (23) that certain Guaranty
Loan Agreement, dated January 30, 2002,
that certain Lender Participation
Agreement for Consolidation Loans, dated
January 30, 2002, and that certain
Authority Certification of Comprehensive
Insurance, dated February 20, 2002,
each between the Trustee and New Jersey
Higher Education Student Assistance
Authority, (24) that certain Agreement to
Guarantee Loans, dated January 30,
2002, that certain Agreement to Guarantee
Consolidation Loans, dated January 30,
2002, and that certain Certificate of
Comprehensive Guarantee Coverage for
Federal Consolidation Loans, dated January
30, 2002, each between the Trustee
and Oklahoma State Regents for Higher
Education, (25) that certain Participation
Agreement, dated January 30, 2002, that
certain Agreement to Guarantee
Consolidation Loans, dated January 30,
2002, and that certain Certificate of
Comprehensive Guarantee Coverage, dated
January 30, 2002, each between the
Trustee and Louisiana Office of Student
Financial Assistance Commission, (26)
that certain Lending Institution
Participation Agreement, dated March 16, 2002,
that certain Lender Participation Agreement
(federal consolidation loans), dated
April 16, 2002, and that certain
Certificate of Comprehensive Insurance, dated
April 16, 2002, each between the Trustee
and Florida Department of Education,
Office of Student Financial Assistance,
(27) that certain Agreement to Guarantee
Loans, dated August 23, 2003, that certain
Agreement to Guarantee Consolidation
Loans, dated August 23, 2003, and that
certain Certificate of Comprehensive
1-13
<PAGE>
Guarantee Coverage for Federal
Consolidation Loans, dated August 23, 2003, each
between the Trustee and Rhode Island Higher
Education Assistance Authority, and
(28) any other agreement between a
Guarantee Agency and the Trustee providing
for the insurance or guarantee by such
Guarantee Agency, to the extent provided
in the Higher Education Act, of the
principal of and accrued interest on FFELP
Loans acquired by the Trustee from time to
time, including any supplement
thereto or amendment thereof entered into
in accordance with the provisions
thereof and hereof.
"Guarantee
Program" shall mean a Guarantee Agency's student loan insurance
program pursuant to which such Guarantee
Agency guarantees or insures FFELP
Loans.
"Guaranteed
Loan" shall mean a FFELP Loan which is Guaranteed.
"Higher
Education Act" shall mean the Higher Education Act of 1965, as
amended or supplemented from time to time,
and all regulations promulgated
thereunder.
"Holder," when
used with respect to any Note, shall mean the Person in
whose name such Note is registered in the
Note Register.
"Income Account"
shall mean the Account by that name created and
established by Section 4.1 hereof.
"Indemnification
Fund" shall mean the Fund by that name created and
established by Section 4.1 hereof.
"Indenture"
shall mean this Indenture of Trust, including any supplement
hereto or amendment hereof entered into in
accordance with the provisions
hereof.
"Independent,"
when used with respect to any specified Person, shall mean
such a Person who (i) is in fact
independent; (ii) does not have any direct
financial interest or any material indirect
financial interest in the
Corporation, other than the payment to be
received under a contract for services
to be performed by such Person; and (iii)
is not connected with the Corporation
as an official, officer, employee,
promoter, underwriter, trustee, partner,
affiliate, subsidiary, director or Person
performing similar functions. Whenever
it is herein provided that any Independent
Person's opinion or certificate shall
be furnished to the Trustee, such Person
shall be appointed by the Corporation
or the Trustee, as the case may be, and
such opinion or certificate shall state
that the signer has read this definition
and that the signer is Independent
within the meaning hereof.
"Independent
Certificate" shall mean a certificate or opinion to be
delivered to the Trustee under the
circumstances described in, and otherwise
complying with, the applicable requirements
of Section 1.4, made by an
Independent appraiser or other expert
appointed by a Corporation Order and
approved by the Trustee in the exercise of
reasonable care, and such opinion or
certificate shall state that the signer has
read the definition of "Independent"
in this Indenture and that the signer is
Independent within the meaning thereof.
"Initial Notes"
shall mean the Notes of the initial six (6) series
hereunder issued contemporaneously with the
execution and delivery of this
Indenture.
1-14
<PAGE>
"Interest
Account" shall mean the Account by that name created and
established by Section 4.1 hereof.
"Interest
Payment Date" shall mean each regularly scheduled interest
payment date on the Notes [which, except in
the case of any Variable Rate Notes,
including those Initial Notes constituting
Variable Rate Notes (as to which such
dates shall be specified in the
Supplemental Indenture providing for the
issuance thereof), shall be each June 1 and
December 1] or, with respect to the
payment of interest upon redemption or
acceleration of a Note, purchase of a
Note by the Trustee on a Mandatory Tender
Date (to the extent such Mandatory
Tender Date is designated as an Interest
Payment Date in the related
Supplemental Indenture) or the payment of
Defaulted Interest, such date on which
such interest is payable under this
Indenture.
"Investment
Securities" shall mean any of the following:
1. Government Obligations;
2. Interest-bearing time or
demand deposits, certificates of deposit or
other similar banking arrangements with any
bank, trust company, national
banking association or other depository
institution (including the Trustee or
any of its affiliates), provided that, at
the time of deposit or purchase, if
the investment is for a period exceeding
one year, such depository institution
shall have long-term unsecured debt rated
by each Rating Agency not lower than
in its highest applicable Specific Rating
Category or, if the investment is for
a period of less than one year, such
depository institution shall have
short-term unsecured debt rated by each
Rating Agency not lower than its highest
applicable Specific Rating Category;
3. Obligations issued or
guaranteed as to principal and interest by any
of the following: (a) the Government
National Mortgage Association; (b) the
Federal National Mortgage Association; or
(c) the Federal Farm Credit Banks, the
Federal Intermediate Credit Banks, the
Export-Import Bank of the United States,
the Federal Land Banks, the Student Loan
Marketing Association, the Federal
Financing Bank, the Federal Home Loan
Banks, the Federal Home Loan Mortgage
Corporation or the Farmers Home
Administration, or any agency or instrumentality
of the United States of America which shall
be established for the purpose of
acquiring the obligations of any of the
foregoing or otherwise providing
financing therefor, provided that any such
obligation described in this clause
(c) shall be rated by Moody's and Fitch,
(i) if such obligation has a term of
less than one year, not lower than in its
highest applicable Specific Rating
Category, or (ii) if such obligation has a
term of one year or longer, not lower
than in its highest applicable Specific
Rating Category;
4. Repurchase agreements with
banks (which may include the Trustee or any
of its affiliates) which are members of the
Federal Deposit Insurance
Corporation or with government bond dealers
insured by the Securities Investor
Protection Corporation, which such
agreements are secured by securities which
are Government Obligations to a level
sufficient to obtain a rating by each
Rating Agency in its highest Specific
Rating Category, or with brokers or
dealers whose unsecured long-term debt is
rated by each Rating Agency in its
highest Specific Rating Category. The
Trustee will give written notice to each
Rating Agency of any investment in a
repurchase agreement or reverse repurchase
agreement pursuant to this paragraph with a
term greater than one (1) year;
1-15
<PAGE>
5. Any money market fund,
including a qualified regulated investment
company described in Internal Revenue
Service Notice 87-22, 1987-1 C.B. 466,
rated by each Rating Agency not lower than
its highest applicable Specific
Rating Category;
6. Any debt instrument;
provided that such instrument has a term of less
than one year, is rated by each Rating
Agency not lower than in its highest
applicable Specific Rating Category and
notice of such investment is given to
each Rating Agency;
7. Any investment agreement
which constitutes a general obligation of a
Person, or the obligations under which are
unconditionally guaranteed by a
Person, whose debt, unsecured securities,
deposits or claims paying ability is
rated by each Rating Agency, (a) if such
investment agreement has a term of less
than one year, not lower than in its
highest applicable Specific Rating
Category, or (b) if such investment
agreement has a term of one year or longer,
not lower than in its highest applicable
Specific Rating Category; and
8. Any other investment if the
Trustee shall have received written
evidence from each Rating Agency that
treating such investment as an Investment
Security will not cause any rating then
applicable to any Unenhanced Outstanding
Notes to be lowered or withdrawn or, if no
Unenhanced Notes are then
Outstanding, but Other Obligations are
Outstanding, is acceptable to such Other
Beneficiaries, as evidenced in writing to
the Trustee by each such Other
Beneficiary.
If any Investment Security described in
clause (7) above has a term of one year
or longer, the Trustee shall give each
Rating Agency written notice thereof.
"Joint Sharing
Agreement" shall mean any agreement entered into in
accordance with Section 5.14(2) hereof.
"Lender" shall
mean (1) as to a FFELP Loan, any "eligible lender" (as
defined in the Higher Education Act) which
has received an eligible lender
designation from a Guarantee Agency, and
(2) as to an Alternative Loan, any
entity eligible to be a lender under the
related Alternative Loan Program.
"Liquidated
Alternative Loan" shall mean a Financed Alternative Loan as to
which any payment has been delinquent for
180 days or more. At such time, and
for so long, as any such Financed
Alternative Loan no longer has any payment
that has been delinquent for 180 days or
more, such Financed Alternative Loan
shall cease to be a Liquidated Alternative
Loan.
"Mandatory
Tender Date" shall mean, with respect to any Note, a date on
which such Note is required to be tendered
for purchase by or on behalf of the
Corporation in accordance with the
provisions in the Supplemental Indenture
providing for the issuance thereof.
"Maturity," when used with
respect to any Note, shall mean the date on
which the principal of such Note becomes
due and payable as therein or herein
provided, whether at the Stated Maturity
thereof or by declaration of
acceleration, call for redemption or
otherwise.
"Monthly Payment
Date" shall mean the 15th day of each calendar month (or,
in the event such 15th day is not a
Business Day, the next preceding Business
Day); provided that any
1-16
<PAGE>
transfers to be made from the Revenue Fund
on a Monthly Payment Date shall, as
to amounts therein constituting payments in
respect of Financed Student Loans,
include only such payments as have been
deposited in the Revenue Fund as of the
last day of the preceding calendar
month.
"Monthly
Servicing Report" shall mean the monthly report prepared by the
Servicer in accordance with any Servicing
Agreement.
"Moody's" shall
mean Moody's Investors Service, Inc., its successors and
their assigns, and, if such corporation
shall be dissolved or liquidated or
shall no longer perform the functions of a
securities rating agency, "Moody's"
shall be deemed to refer to any other
nationally recognized securities rating
agency designated by the Trustee, at the
written direction of the Corporation.
"Non-Delivery
Fee" shall mean any fee received by the Corporation or the
Trustee from a Lender upon the failure of
the Lender, in whole or in part, to
perform its obligation to sell Eligible
Loans to the Corporation pursuant to a
Student Loan Purchase Agreement.
"Note Fees"
shall mean the fees, costs and expenses, excluding Costs of
Issuance, of the Trustee and any Paying
Agents, Authenticating Agent, Deposit
Agents, Remarketing Agents, Depositaries,
Auction Agents, Broker-Dealers,
Counsel, Note Registrar, Accountants and
other consultants and professionals
incurred by the Corporation in carrying out
and administering its powers, duties
and functions under (1) its articles of
incorporation, its bylaws, the Student
Loan Purchase Agreements, any Servicing
Agreement, any Bailment Agreement, the
Guarantee Agreements, the Program, the
Higher Education Act, any Alternative
Loan Program or any requirement of the laws
of the United States or any State
with respect to the Program, as such
powers, duties and functions relate to
Financed Student Loans, (2) any Swap
Agreement, Credit Enhancement Facility or
Demand Purchase Agreement (other than any
amounts payable thereunder which
constitute Other Obligations), (3) any
Remarketing Agreement, Depositary
Agreement, Auction Agent Agreement or
Broker-Dealer Agreement and (4) this
Indenture.
"Note Fund"
shall mean the Fund by that name created and established by
Section 4.1 hereof.
"Note Register"
shall mean the register maintained by the Note Registrar
pursuant to Section 3.7 hereof.
"Note Registrar"
shall mean the Trustee, or, if so designated pursuant to
the terms of a Supplemental Indenture, the
Authenticating Agent, serving in such
capacity under the terms of this Indenture,
unless and until a Corporation Order
is delivered to the Authenticating Agent
and the Trustee directing that the
Authenticating Agent or the Trustee, as the
case may be, become the Note
Registrar and the Authenticating Agent or
the Trustee, as the case may be,
agrees to serve in such capacity
hereunder.
"Noteholder"
shall mean the Holder of any Note.
"Notes" shall
mean all Notes issued pursuant to this Indenture in
accordance with the provisions of Article
Three hereof.
1-17
<PAGE>
"Other
Beneficiary" shall mean an Other Senior Beneficiary or an Other
Subordinate Beneficiary.
"Other
Obligations" shall mean, collectively, Other Senior Obligations
and
Other Subordinate Obligations.
"Other Senior
Beneficiary" shall mean a Person who is a Senior Beneficiary
other than as a result of ownership of
Class A Notes.
"Other Senior
Obligation" shall mean the Corporation's obligations to pay
any amounts under any Senior Swap
Agreements, any Senior Credit Enhancement
Facilities and any Senior Demand Purchase
Agreements.
"Other
Subordinate Beneficiary" shall mean a Person who is a
Subordinate
Beneficiary other than as a result of
ownership of Class B Notes.
"Other
Subordinate Obligation" shall mean the Corporation's obligations
to
pay any amounts under any Subordinate Swap
Agreements, any Subordinate Credit
Enhancement Facilities and any Subordinate
Demand Purchase Agreements.
"Outstanding,"
(1) when used with respect to any Note, shall (a) have the
construction given to such word in Sections
1.6, 3.7 and 11.1 hereof, i.e., a
Note shall not be Outstanding hereunder if
such Note is at the time not deemed
to be Outstanding hereunder by reason of
the operation and effect of Section
1.6, Section 3.7 or Section 11.1 hereof,
and (b) not include any Note Deemed
Tendered; and (2) when used with respect to
any Other Obligation, shall mean all
Other Obligations which have become, or may
in the future become, due and
payable and which have not been paid or
otherwise satisfied.
"Paying Agent"
shall mean the Trustee and any other commercial bank
designated herein or in accordance herewith
as a place at which principal of,
premium, if any, or interest on any Note is
payable.
"Person" shall
mean any individual, corporation, limited liability company,
partnership, joint venture, association,
joint stock company, trust,
incorporated organization or government or
any agency or political subdivision
thereof.
"Plus Loan"
shall mean a Student Loan made pursuant to Section 428B of the
Higher Education Act.
"Prepayment
Date," when used with respect to any Note, a portion of the
Principal Amount of which is to be paid
prior to its Stated Maturity, shall mean
the date fixed for such prepayment by or
pursuant to this Indenture.
"Principal
Account" shall mean the Account by that name created and
established by Section 4.1 hereof.
1-18
<PAGE>
"Principal
Amount," when used with respect to a Note, shall mean the
original principal amount of such Note less
all payments previously made to the
Holder thereof in respect of principal.
"Principal
Balance," when used with respect to a Student Loan, shall mean
the unpaid principal amount thereof
(including (a) with respect to a FFELP Loan
any unpaid capitalized interest thereon
that is authorized to be capitalized
under the Higher Education Act for purposes
of Special Allowance Payments,
federal interest subsidy payments, a
borrower's liability to a lender and the
amount of the lender's loss on a guarantee
or insurance claim, and (b) with
respect to an Alternative Loan, any unpaid
interest thereon that is authorized
to be added to the principal balance
thereof under the applicable Alternative
Loan Program) as of a given date.
"Principal
Office" shall mean (i) when used with respect to the Trustee,
the principal office of the Trustee for the
performance of its duties as trustee
hereunder, which office as of the date of
execution of this Indenture is located
at the address specified in Section 13.4
hereof, and (ii) when used with respect
to a Paying Agent (other than the Trustee),
an Authenticating Agent, the Note
Registrar, a Depositary, a Remarketing
Agent, an Auction Agent or a
Broker-Dealer, such office designated in
writing to the Trustee and the
Corporation as the location of its
principal office for the performance of its
duties as Paying Agent, Authenticating
Agent, Note Registrar, Depositary,
Remarketing Agent, Auction Agent or
Broker-Dealer, as the case may be, under
this Indenture.
"Principal
Payment Date" shall mean the Stated Maturity of principal of
any
Serial Note and the Sinking Fund Payment
Date for any Term Note, which, unless
otherwise specified with respect to any
Variable Rate Notes, including those
Initial Notes constituting Variable Rate
Notes, in the Supplemental Indenture
providing for the issuance thereof, shall
occur on a June 1 or an December 1.
"Program" shall
mean the program to be administered by the Servicer for the
purchase of Student Loans from Lenders,
SLFC, GOAL Funding, and GOAL Funding II
or origination of Student Loans in order to
increase the supply of moneys
available for new Student Loans, thereby
assisting students in obtaining a
post-secondary school education.
"Purchase Date"
shall mean, with respect to a Demand Note, the date
specified in a Purchase Demand (provided
that such date is not less than the
required number of calendar days after
receipt of such Purchase Demand by the
Depositary) as the date on which the Holder
of the Demand Note identified in
such Purchase Demand is demanding purchase
of such Note, or a specified portion
thereof, in accordance with the applicable
provisions of the related
Supplemental Indenture, or the next
preceding or succeeding Business Day, as
specified in such Supplemental Indenture,
if such date is not a Business Day.
"Purchase
Demand" shall mean, with respect to a Demand Note, a written
demand, in the form required by the related
Supplemental Indenture, by the
Holder thereof that such Note, or, in the
case of a partial purchase demand, a
specified portion thereof, be purchased in
accordance with the applicable
provisions of such Supplemental
Indenture.
1-19
<PAGE>
"Rating Agency"
shall mean any rating agency that shall have an outstanding
rating on any of the Notes pursuant to
request by the Corporation.
"Rating Agency
Condition" shall mean, with respect to any action, that each
of the Rating Agencies shall have notified
the Corporation and the Trustee in
writing that such action will not result in
a reduction, qualification or
withdrawal of the then-current rating of
any of the Notes.
"Rating
Category" shall mean one of the general rating categories of a
Rating Agency, without regard to any
refinement or gradation of such rating
category by a numerical modifier or
otherwise.
"Redemption
Date," when used with respect to any Note to be redeemed, shall
mean the date fixed for such redemption by
or pursuant to this Indenture.
"Redemption
Price," when used with respect to any Note to be redeemed,
shall mean the price at which it is to be
redeemed pursuant to this Indenture.
"Regular Record
Date" shall mean, with respect to an Interest Payment Date
for any series of Notes, unless the
Supplemental Indenture authorizing the
issuance of such series of Notes otherwise
provides, the fifteenth day (whether
or not a Business Day) of the calendar
month immediately preceding such Interest
Payment Date.
"Remarketing
Agent" shall mean, with respect to any series of Notes, any
securities dealer designated as such with
respect to such Notes pursuant to the
provisions of Section 7.21 hereof and its
successor or successors and any
securities dealer at any time substituted
in its place pursuant to this
Indenture.
"Remarketing
Agreement" shall mean an agreement between a Remarketing Agent
and the Corporation setting forth the
rights and obligations of the Remarketing
Agent acting in such capacity under this
Indenture and otherwise meeting the
requirements of Section 7.21 hereof,
including any supplement thereto or
amendment thereof entered into in
accordance with the provisions thereof.
"Repayment
Account" shall mean the Account by that name created and
established by Section 4.1 hereof.
"Reserve Fund"
shall mean the Reserve Fund created and established by
Section 4.1 hereof.
"Reserve Fund
Requirement" shall mean, at any time, an amount equal to the
greater of (1) one and one-half percent
(1.50%) of the aggregate Principal
Amount of Class A Notes and Class B Notes
then Outstanding, and (2) $750,000;
or, as determined upon the issuance of any
Class A Notes or any Class B Notes,
such lesser or greater amount as will not
cause any Rating Agency to lower or
withdraw any rating on any Unenhanced
Outstanding Notes, as confirmed in writing
to the Trustee by each Rating Agency or, if
no Unenhanced Notes are then
Outstanding, but Other Obligations are
Outstanding, and the Reserve Fund
Requirement is to be reduced, such
1-20
<PAGE>
lesser amount as is acceptable to the Other
Beneficiaries holding such Other
Obligations, as evidenced in writing to the
Trustee by each such Other
Beneficiary.
"Retirement Account"
shall mean the Account by that name created and
established by Section 4.1 hereof.
"Revenue Fund"
shall mean the Revenue Fund created and established by
Section 4.1 hereof.
"Secretary of
Education" shall mean the Commissioner of Education,
Department of Health, Education and Welfare
of the United States, and the
Secretary of the United States Department
of Education (who succeeded to the
functions of the Commissioner of Education
pursuant to the Department of
Education Organization Act), or any other
officer, board, body, commission or
agency succeeding to the functions thereof
under the Higher Education Act.
"Senior Asset
Requirement" shall mean, as of the date of determination,
that:
(a) the Senior Percentage is at least
equal to one hundred ten percent
(110%) (or such lower percentage specified
in a Corporation Certificate
delivered to the Trustee which, if
Unenhanced Class A Notes are Outstanding,
shall not result in the lowering or
withdrawal of the outstanding rating
assigned by any Rating Agency to any of the
Unenhanced Class A Notes Outstanding
prior to such action being taken by the
Corporation, as evidenced in writing to
the Trustee by each such Rating Agency, or,
if no Unenhanced Class A Notes are
Outstanding but Other Senior Obligations
are Outstanding, is acceptable to the
Other Senior Beneficiaries holding such
Other Senior Obligations, as evidenced
in writing to the Trustee by each such
Other Senior Beneficiary), and
(b) the Subordinate Percentage is at
least equal to one hundred percent
(100%) (or such lower percentage specified
in a Corporation Certificate
delivered to the Trustee which, if
Unenhanced Class B Notes are Outstanding,
shall not result in the lowering or
withdrawal of the outstanding rating
assigned by any Rating Agency to any of the
Unenhanced Class B Notes Outstanding
prior to such action being taken by the
Corporation, as evidenced in writing to
the Trustee by each such Rating Agency, or,
if no Unenhanced Class B Notes are
Outstanding but Other Subordinate
Obligations are Outstanding, is acceptable to
the Other Subordinate Beneficiaries holding
such Other Subordinate Obligations,
as evidenced in writing to the Trustee by
each such Other Subordinate
Beneficiary).
"Senior
Beneficiaries" shall mean (1) the Holders of any Outstanding
Class
A Notes, and (2) any Other Senior
Beneficiary holding any Other Senior
Obligation that is Outstanding.
"Senior Credit
Enhancement Facility" shall mean a Credit Enhancement
Facility designated as a Senior Credit
Enhancement Facility in the Supplemental
Indenture pursuant to which such Credit
Enhancement Facility is furnished by the
Corporation.
"Senior Credit
Enhancement Provider" shall mean any Person who provides a
Senior Credit Enhancement Facility or a
Senior Demand Purchase Agreement.
1-21
<PAGE>
"Senior Demand
Purchase Agreement" shall mean a Demand Purchase Agreement
designated as a Senior Demand Purchase
Agreement in the Supplemental Indenture
pursuant to which such Demand Purchase
Agreement is furnished by the
Corporation.
"Senior
Obligations" shall mean, collectively, the Class A Notes and
any
Other Senior Obligations.
"Senior
Percentage" shall mean, as of the date of determination, the
percentage resulting by dividing the
Aggregate Value by the sum of (i) the
aggregate Principal Amount of Outstanding
Class A Notes plus accrued interest
thereon and (ii) accrued Corporation Swap
Payments under Senior Swap Agreements
and (iii) other payments accrued and owing
by the Corporation on Other Senior
Obligations.
"Senior Swap
Agreement" shall mean a Swap Agreement designated as a Senior
Swap Agreement in the Supplemental
Indenture pursuant to which such Swap
Agreement is furnished by the
Corporation.
"Senior Swap
Counterparty" shall mean any Person who provides a Senior Swap
Agreement.
"Serial Notes"
shall mean all Notes other than Term Notes.
"Servicer" shall
mean SLFC, and any other organization with which the
Corporation and the Trustee have entered
into a Servicing Agreement, subject to
confirmation of ratings on any then
Outstanding Unenhanced Notes, as evidenced
by written confirmation to the Trustee to
that effect from each Rating Agency,
or, if no Unenhanced Notes are then
Outstanding but Other Obligations are
Outstanding, consent of each Other
Beneficiary holding such Outstanding Other
Obligations, as evidenced in writing to the
Trustee by each such Other
Beneficiary.
"Servicing
Agreement" shall mean, the Servicing and Administration
Agreement, dated as of February 1, 2004,
among the Corporation, the Trustee and
SLFC, as servicer and administrator, and
any other agreement among the
Corporation, the Trustee and a Servicer
under which the Servicer agrees to act
as the Corporation's agent in connection
with the administration and collection
of Financed Student Loans in accordance
with this Indenture.
"Servicing Fees"
shall mean any fees payable by the Corporation to a
Servicer in respect of Financed Student
Loans pursuant to the provisions of a
Servicing Agreement.
"Sinking Fund
Payment Date" shall mean the date on which any Term Note is
to be called for redemption pursuant to
subsection (A) or (B) of Section 4.7.2
hereof and the applicable provisions of the
Supplemental Indenture providing for
the issuance thereof, or, if not redeemed,
the Stated Maturity thereof.
"SLFC" shall
mean Student Loan Finance Corporation, a corporation duly
organized and existing under the laws of
the State of South Dakota.
"SLS Loan" shall
mean a Student Loan made pursuant to former Section 428A
of the Higher Education Act.
1-22
<PAGE>
"Special
Allowance Payments" shall mean special allowance payments
authorized to be made by the Secretary of
Education by Section 438 of the Higher
Education Act, or similar allowances
authorized from time to time by federal law
or regulation.
"Special Record
Date" shall mean, with respect to the payment of any
Defaulted Interest, a date fixed by the
Trustee pursuant to Section 3.2 hereof.
"Special
Redemption and Prepayment Account" shall mean the Account by
that
name created and established by Section 4.1
hereof.
"Special
Redemption and Prepayment Account Requirement" shall mean the
amount specified for a series of Notes in
the Supplemental Indenture authorizing
the issuance of Notes of such series.
"Specific Rating
Category" shall mean a specific rating category of a
Rating Agency, taking into account any
refinement or gradation of a Rating
Category by a numerical or other qualifier.
For so long as any of the Notes are
rated by Moody's: (a) references to the
highest applicable Specific Rating
Category shall be, with respect to
obligations or investments having a term of
less than one year, to a rating of "P-1"
(or, if Moody's revises its rating
schedule from time to time, such rating as
Moody's shall advise the Trustee in
writing is comparable to "P-1" under such
revised rating schedule), and with
respect to obligations or investments
having a term of one year or longer, to a
rating of "Aaa" (or, if Moody's revises its
rating schedule from time to time,
such rating as Moody's shall advise the
Trustee in writing is comparable to
"Aaa" under such revised rating schedule);
and (b) references to the third
highest applicable Specific Rating Category
shall be, with respect to
obligations or investments having a term of
one year or longer, to a rating of
"Aa2" (or, if Moody's revises its rating
schedule from time to time, such rating
as Moody's shall advise the Trustee in
writing is comparable to "Aa2" under such
revised rating schedule). For so long as
any of the Notes are rated by Fitch:
(a) references to the highest applicable
Specific Rating Category shall be, with
respect to obligations or investments
having a term of less than one year, to a
rating of "F-1+" (or, if Fitch revises its
rating schedule from time to time,
such rating as Fitch shall advise the
Trustee in writing is comparable to "F-1+"
under such revised rating schedule), and
with respect to obligations or
investments having a term of one year or
longer, to a rating of "AAA" (or, if
Fitch revises its rating schedule from time
to time, such rating as Fitch shall
advise the Trustee in writing is comparable
to "AAA" under such revised rating
schedule); and (b) references to the third
highest applicable Specific Rating
Category shall be, with respect to
obligations or investments having a term of
one year or longer, to a rating of "AA"
(or, if Fitch revises its rating
schedule from time to time, such rating as
Fitch shall advise the Trustee in
writing is comparable to "AA" under such
revised rating schedule).
"Stated
Maturity," when used with respect to any Note or any installment
of
interest thereon, shall mean the date
specified in such Note as the fixed date
on which principal of such Note or such
installment of interest is due and
payable.
"Student Loan"
shall mean a loan to a borrower for post-secondary
education.
"Student Loan
Acquisition Certificate" shall mean a certificate signed by
an Authorized Officer of the Corporation
and substantially in the form attached
as Exhibit C hereto.
1-23
<PAGE>
"Student Loan
Purchase Agreements" shall mean, collectively, all
Corporation Student Loan Purchase
Agreements and Transferor Student Loan
Purchase Agreements.
"Subaccount"
shall mean any subaccount of an Account created or established
by a Supplemental Indenture.
"Subordinate
Beneficiaries" shall mean (1) the Holders of any Outstanding
Class B Notes, and (2) any Other
Subordinate Beneficiary holding any Other
Subordinate Obligation that is
Outstanding.
"Subordinate
Credit Enhancement Facility" shall mean a Credit Enhancement
Facility designated as a Subordinate Credit
Enhancement Facility in the
Supplemental Indenture pursuant to which
such Credit Enhancement Facility is
furnished by the Corporation.
"Subordinate
Credit Facility Provider" shall mean any Person who provides a
Subordinate Credit Enhancement Facility or
a Subordinate Demand Purchase
Agreement.
"Subordinate
Demand Purchase Agreement" shall mean a Demand Purchase
Agreement designated as a Subordinate
Demand Purchase Agreement in the
Supplemental Indenture pursuant to which
such Demand Purchase Agreement is
furnished by the Corporation.
"Subordinate
Obligations" shall mean, collectively, the Class B Notes and
any Other Subordinate Obligations.
"Subordinate
Percentage" shall mean, as of the date of determination, the
percentage resulting by dividing the
Aggregate Value by the sum of (i) the
aggregate Principal Amount of Outstanding
Class A Notes and Class B Notes plus
accrued interest thereon, (ii) accrued
Corporation Swap Payments and (iii) other
payments accrued and owing by the
Corporation on Other Obligations.
"Subordinate
Swap Agreement" shall mean a Swap Agreement designated as a
Subordinate Swap Agreement in the
Supplemental Indenture pursuant to which such
Swap Agreement is furnished by the
Corporation.
"Subordinate
Swap Counterparty" shall mean any Person who provides a
Subordinate Swap Agreement.
"Supplemental
Indenture" shall mean any amendment of or supplement to this
Indenture made in accordance with Article
Eight hereof.
"Surplus
Account" shall mean the Account by that name created and
established by Section 4.1 hereof.
"Surplus Fund"
shall mean the Fund by that name created and established by
Section 4.1 hereof.
"Swap Agreement"
shall mean an interest rate exchange agreement between the
Corporation and a Swap Counterparty, as
originally executed and as amended or
supplemented,
1-24
<PAGE>
or other interest rate hedge agreement
between the Corporation and a Swap
Counterparty, as originally executed and as
amended or supplemented, in each
case approved by each Rating Agency, for
the purpose of converting, in whole or
in part, (i) the Corporation's fixed
interest rate liability on all or a portion
of any Notes to a variable rate liability,
(ii) the Corporation's variable rate
liability on all or a portion of the Notes
to a fixed rate liability or (iii)
the Corporation's variable rate liability
on all or a portion of the Notes to a
different variable rate liability.
"Swap
Counterparty" shall mean any Person with whom the Corporation
shall,
from time to time, enter into a Swap
Agreement.
"Swap
Counterparty Guarantee" shall mean a guarantee in favor of the
Corporation given in connection with the
execution and delivery of a Swap
Agreement under this Indenture.
"Term Notes"
shall mean Notes the payment of the principal of which is
provided for from moneys credited to the
Principal Account pursuant to
subsection (A) or (B) of Section 4.7.2
hereof.
"Transfer Agreement" shall mean
any agreement among the Corporation, the
Trustee and the Transferor providing for
the sale by the Transferor to the
Corporation of Student Loans Financed or to
be Financed under this Indenture
(which Student Loans have previously been
originated on behalf of the Transferor
or purchased from one or more Lenders or
SLFC pursuant to one or more Student
Loan Purchase Agreements), together with
all of the Transferor's right, title
and interest in and to the related Student
Loan Purchase Agreements as they
relate to such Student Loans.
"Transferor"
shall mean GOAL Funding, GOAL Funding II and any other
organization with which the Corporation and
the Trustee have entered into a
Transfer Agreement, subject to confirmation
of ratings on any then Outstanding
Unenhanced Notes, as evidenced by written
confirmation to the Trustee to that
effect from each Rating Agency, or, if no
Unenhanced Notes are then Outstanding
but Other Obligations are Outstanding,
consent of each Other Beneficiary holding
such Outstanding Other Obligations, as
evidenced in writing to the Trustee by
each such Other Beneficiary.
"Transferor
Student Loan Purchase Agreements" shall mean, with respect to
Financed Student Loans transferred pursuant
to a Transfer Agreement, all
agreements between the Transferor and a
Lender (in the case of FFELP Loans) or
SLFC (in the case of Alternative Loans)
providing for the sale of such Financed
Student Loans by such Lender or SLFC to the
Transferor or its agent and
substantially in the forms which are on
file with the Trustee, including
amendments thereto made in accordance with
Section 5.18 hereof.
"Trust Estate"
shall mean the Trust Estate as described in the Granting
Clauses hereof.
"Trust Funds"
shall mean, in the aggregate, all of the Funds and Accounts.
"Trust Indenture
Act" or "TIA" shall mean the Trust Indenture Act of 1939,
as amended, as in force on the date hereof,
unless otherwise specifically
provided.
1-25
<PAGE>
"Trustee" shall
mean U.S. Bank National Association, as trustee under this
Indenture, and its successor or successors
and any other corporation which may
at any time be substituted in its place
pursuant to this Indenture.
"Unenhanced
Note" shall mean, with respect to a Class A Note or a Class B
Note, any Note the payment of the principal
of and interest on which is not
secured by a Credit Enhancement Facility or
a Demand Purchase Agreement.
"Value" shall
mean, on any calculation date when required under this
Indenture, the value of the Trust Estate
calculated by the Corporation, in
accordance with the following:
(1) with respect
to any Eligible Loan, the Principal Balance
thereof, plus
any unamortized premiums, accrued interest and Special
Allowance
Payments thereon; provided that any Liquidated Alternative Loan
shall be deemed
to have a value of zero;
(2) with respect
to any funds of the Corporation on deposit in any
commercial bank
or as to any banker's acceptance or repurchase agreement or
investment
agreement, the amount thereof plus accrued interest thereon;
(3) with respect
to any Investment Securities of an investment
company, the bid
price of the shares as reported by the investment company;
(4) as to other
investments, (i) the bid price published by a
nationally
recognized pricing service, or (ii) if the bid and asked prices
thereof are
published on a regular basis in The Wall Street Journal (or, if
not there, then
in The New York Times): the average of the bid and asked
prices for such
investments so published on or most recently prior to such
time of
determination plus accrued interest thereon;
(5) as to
investments the bid prices of which are not published by a
nationally
recognized pricing service and 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
lower of the bid prices at such time of determination for
such investments
by any two nationally recognized government securities
dealers
(selected by the Corporation in its absolute discretion) at the
time making a
market in such investments, plus accrued interest thereon;
(6) any accrued
but unpaid Swap Counterparty Payment, unless the
Swap
Counterparty is in default of its obligations under the Swap
Agreement;
and
(7) with respect
to any Student Loan that does not constitute an
Eligible Loan,
unless otherwise specifically provided herein, the lesser of
(i) the market
value thereof, as determined by a nationally recognized
evaluator
acceptable to the Trustee, and (ii) the Principal Balance
thereof, plus
any unamortized premiums and accrued interest thereon;
provided that
any Liquidated Alternative Loan shall be deemed to have a
value of
zero.
"Value of
Investment Securities" shall mean (i) as to demand bank
deposits,
bank time deposits which may be withdrawn
without penalty by the depositor upon
fourteen (14) days' or less notice and
Investment Securities which mature not
more than six (6) months from the date
of
1-26
<PAGE>
computation, the amount of such deposits
and the par value of such Investment
Securities, and (ii) as to Investment
Securities, other than demand bank
deposits and bank time deposits described
in clause (i), which mature more than
six (6) months after the date of
computation, the par value thereof or, if
purchased at more or less than par, the
cost thereof adjusted to reflect the
amortization or premium or discount, as the
case may be, paid upon their
purchase. The computation made under this
paragraph shall include accrued
interest.
"Variable Rate
Notes" shall mean Notes whose interest rate is not fixed but
varies on a periodic basis as specified in
the Supplemental Indenture providing
for the issuance thereof.
Section 1.2
Definitions of
General Terms. Unless the context shall
clearly indicate otherwise, or may
otherwise require, in this Indenture the
terms "herein," "hereunder," "hereby,"
"hereto," "hereof" and any similar terms
refer to this Indenture as a whole and not
to any particular article, section or
subdivision hereof.
Unless the
context shall clearly indicate otherwise, or may otherwise
require, in this Indenture: (i) references
to articles, sections and other
subdivisions, whether by number or letter
or otherwise, are to the respective or
corresponding articles, sections or
subdivisions of this Indenture as such
articles, sections or subdivisions may be
amended from time to time; (ii)
references to articles, chapters,
subchapters and sections of any public law or
statute of the United States or any section
thereof, are to the respective or
corresponding articles, chapters,
subchapters, sections and statutes as they may
be amended from time to time; (iii) the
word "heretofore" means before the date
of execution of this Indenture, the word
"now" means at the date of execution of
this Indenture, and the word "hereafter"
means after the date of execution of
this Indenture.
Section 1.3
Computations.
Unless the facts shall then be otherwise, all
computations required for the purposes of
this Indenture shall be made on the
assumption that: (i) the principal of and
interest on all Notes shall be paid as
and when the same become due; (ii) all
credits required by this Indenture to be
made to any Fund or Account shall be made
in the amounts and at the times
required; (iii) all Notes required by this
Indenture to be redeemed from moneys
credited to the Note Principal Account
shall be redeemed on the respective
Sinking Fund Payment Dates therefor in the
amounts and at the times as required
by this Indenture; and (iv) all Corporation
Swap Payments and Counterparty Swap
Payments (unless the Swap Counterparty is
then in default of its obligations
under the Swap Agreement) shall be paid
when the same become due.
Section 1.4
Compliance
Certificates and Opinions, etc.
(a) Except as otherwise specifically
provided in this Indenture, upon any
application or request by the Corporation
to the Trustee to take any action
under any provision of this Indenture, the
Corporation shall furnish to the
Trustee (i) a Corporation 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 TIA) an Independent
Certificate from a firm of certified
public accountants meeting the applicable
requirements of this Section, except
that, in the case of any such application
or request as to
1-27
<PAGE>
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 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) (i) Prior to the deposit of any
property or securities with the
Trustee that is to be made the basis for
the release of any property subject to
the lien created by this Indenture, the
Corporation shall, in addition to any
obligation imposed in Section 1.4(a) or
elsewhere in this Indenture, furnish to
the Trustee (1) a Corporation Certificate
certifying or stating the opinion of
each person signing such certificate as to
the fair value (within ninety (90)
days of such deposit) to the Corporation 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 first priority lien and security
interest in favor of the Trustee, for the
benefit of the 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 the Rating Agency
Condition has been satisfied.
(ii) Whenever the
Corporation is required to furnish to the Trustee a
Corporation
Certificate certifying or stating the opinion of any signer
thereof as to
the matters described in clause (i) above, the Corporation
shall also
deliver to the Trustee an Independent Certificate as to the
same
matters, if the
fair value to the Corporation 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
Corporation, as set forth in the certificates delivered
pursuant to
clause (i) above and this clause (ii), is 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
1-28
<PAGE>
value thereof to
the Corporation as set forth in the related Corporation
Certificate is
less than $25,000 or less than 1% of the Outstanding
Principal Amount
of the Notes.
(iii) Other than with respect to any release described in clause
(A)
or (B) of
Section 1.4(b)(v), whenever any property or securities are to
be
released from
the lien created by this Indenture, the Corporation shall
also furnish to
the Trustee a Corporation Certificate certifying or stating
the opinion of
each person signing such certificate as to the fair value
(within ninety
(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.
(iv) Whenever the
Corporation is required to furnish to the Trustee a
Corporation
Certificate certifying or stating the opinion of any signer
thereof as to
the matters described in clause (iii) above, the Corporation
shall also
furnish to the Trustee an Independent Certificate as to the
same
matters if the
fair value of the property or securities and of all other
property or
securities (other than property described in clauses (A) or (B)
of Section
1.4(b)(v)) released from the lien created by this Indenture
since the
commencement of the then current fiscal year, as set forth in
the
certificates
required by clause (iii) above and this clause (iv), equals
10% or more of
the Outstanding Principal Amount of the Notes, but such
certificate need
not be furnished in the case of any release of property or
securities if
the fair value thereof as set forth in the related
Corporation
Certificate is less than $25,000 or less than one percent of
the then
Outstanding Principal Amount of the Notes.
(v)
Notwithstanding any other provision of this Section, the
Corporation may,
without compliance with the other provisions of this
Section, (A)
collect, liquidate, sell or otherwise dispose of Student Loans
as and to the
extent permitted or required by this Indenture and the
Servicing
Agreement, and (B) make cash payments out of the Funds and
Accounts as and
to the extent permitted or required by this Indenture.
(c) In any case where several matters
are required to be certified by, or
covered by an opinion of, any specified
Person, it is not necessary that all
such matters be certified by, or covered by
the opinion of, only one such
Person, or that they be so certified or
covered by only one document, but one
such Person may certify or give an opinion
with respect to some matters and one
or more other such Persons as to other
matters, and any such Person may certify
or give an opinion as to such matters in
one or several documents.
Any certificate
or opinion of an Authorized Officer of the Corporation 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 of an Authorized Officer 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 officers of
the Servicer or the Corporation, stating
that the information with respect to
such factual matters is in the possession
of the Servicer or the
1-29
<PAGE>
Corporation, 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.
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.
Whenever in this
Indenture, in connection with any application or
certificate or report to the Trustee, it is
provided that the Corporation shall
deliver any document as a condition of the
granting of such application, or as
evidence of the Corporation'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 Corporation
to have such application granted or to
the sufficiency of such certificate or
report. The foregoing shall not, however,
be construed to affect the 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.
Section 1.5
Evidence of
Action by the Corporation. Except as
otherwise specifically provided in this
Indenture, any request, direction,
command, order, notice, certificate or
other instrument of, by or from the
Corporation shall be effective and binding
upon the Corporation for the purposes
of this Indenture if signed by an
Authorized Officer.
Section 1.6
Exclusion of
Notes Held By or For the Corporation. In
determining whether the Holders of the
requisite Principal Amount of Notes
Outstanding have given any request, demand,
authorization, direction, notice,
consent or waiver hereunder, Notes owned by
the Corporation shall be disregarded
and deemed not to be Outstanding, except
that, in determining whether the
Trustee shall be protected in relying upon
any such request, demand,
authorization, direction, notice, consent,
or waiver, only Notes which the
Trustee knows to be so owned shall be
disregarded.
Section 1.7
Exhibits.
Attached to and by reference made a part of this
Indenture are the following Exhibits:
Exhibit A: Form of Eligible FFELP Loan Acquisition Certificate;
Exhibit B: Form of Eligible FFELP Loan Origination Certificate;
Exhibit C: Form of Student Loan Acquisition Certificate;
Exhibit D: Form of Updating Eligible FFELP Loan Acquisition
Certificate; and
Exhibit E: Form of Eligible Alternative Loan Acquisition
Certificate.
Section 1.8
Incorporation by
Reference of Trust Indenture Act. Whenever
this Indenture refers to a provision of the
TIA, the provision is incorporated
by reference in and made a part of this
Indenture. The following TIA terms used
in this Indenture have the following
meanings:
1-30
<PAGE>
"Commission"
means the Securities and Exchange Commission.
"indenture
securities" means the Notes and any Other Obligations.
"indenture
security holder" means a Noteholder or Other Beneficiary.
"indenture to be
qualified" means this Indenture.
"indenture
trustee" or "institutional trustee" means the Trustee.
"obligor" on the
indenture securities means the Corporation and any other
obligor on the
indenture securities.
All other TIA
terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute
or defined by Commission rule have
the meaning assigned to them by such
definitions.
1-31
<PAGE>
ARTICLE TWO
NOTE FORMS
Section 2.1
Forms Generally.
The Notes and the Trustee's certificate of
authentication shall be in substantially
the forms set forth in this Article
Two, with such appropriate insertions,
omissions, substitutions and other
variations as are required or permitted by
this Indenture or by the Supplemental
Indenture providing for the issuance
thereof, and may have such letters, numbers
or other marks of identification and such
legends or endorsements placed thereon
as may, consistently herewith, be
determined by the officers executing such
Notes, as evidenced by their signing of the
Notes. Any portion of the text of
any Note may be set forth on the reverse
thereof, with an appropriate reference
thereto on the face of the Note.
Section 2.2
Form of Notes.
The Notes shall be in substantially the
following form:
EDUCATION LOANS INCORPORATED
STUDENT LOAN ASSET-BACKED NOTE
[SENIOR][SUBORDINATE][JUNIOR SUBORDINATE]SERIES
CLASS ____
No. R________
$
Stated
Date of Original
Interest
Maturity
Date
Issue
Rate
CUSIP
---------------
------------------ --------------
-----------
REGISTERED HOLDER:
PRINCIPAL AMOUNT:
FOR VALUE
RECEIVED, EDUCATION LOANS INCORPORATED, a corporation organized
under the laws of the State of Delaware
(the "Corporation," which term includes
any successor corporation under the
Indenture hereinafter referred to),
acknowledges itself indebted and hereby
promises to pay to the registered holder
specified above, or registered assigns (the
"Registered Holder"), but solely
from the revenues and receipts hereinafter
specified and not otherwise, the
Principal Amount specified above on the
Stated Maturity Date specified above
(subject to the right of prior redemption
hereinafter mentioned), upon
presentation and surrender of this Note at
the Principal Office (as defined in
the Indenture) of the Trustee hereinafter
referred to or, at the option of the
Registered Holder hereof, at the Principal
Office of any duly appointed Paying
Agent, and to pay, from the source and in
the manner hereinafter provided,
interest on said principal sum to the
Registered Holder hereof from the date
hereof until the
2-1
<PAGE>
payment of said principal sum in full, at
the rate per annum specified above,
payable semiannually on the first day of
June and December in each year,
commencing ________, _____, by check or
draft mailed to the Person who is the
Registered Holder hereof as of 5:00 p.m. in
the city in which the Principal
Office of the Note Registrar is located on
the fifteenth day of the calendar
month, whether or not a Business Day (as
defined in the Indenture), preceding
such interest payment date (the "Record
Date"), at the address of such
Registered Holder as it appears on the Note
Register maintained by the Note
Registrar[; provided that, if the
Registered Holder of this Note is the
Registered Holder of Notes of this series
in the aggregate Principal Amount of
$1,000,000 or more (or, if less than
$1,000,000 in Principal Amount of Notes of
such series is outstanding, the Registered
Holder of all outstanding Notes), at
the direction of such Registered Holder
such principal and interest shall be
payable by electronic transfer by the
Trustee in immediately available funds to
an account designated by such Registered
Holder]. In addition, interest on this
Note is payable at the maturity hereof in
the same manner as the principal
hereof, unless the date of such maturity is
a regularly scheduled interest
payment date, in which event interest is
payable in the manner set forth in the
preceding sentence. Any interest not so
timely paid or duly provided for shall
cease to be payable to the Person who is
the Registered Holder hereof at the
close of business on the Record Date and
shall be payable to the Person who is
the Registered Holder hereof at the close
of business on a special record date
for the payment of any such defaulted
interest. Such special record date shall
be fixed by the Trustee whenever moneys
become available for payment of the
defaulted interest, and notice of the
special record date shall be given to the
Registered Holder hereof not less than ten
days prior thereto by first-class
mail to such Registered Holder as shown on
the Note Register on a date selected
by the Trustee, stating the date of the
special record date and the date fixed
for the payment of such defaulted interest.
The principal of, premium, if any,
and interest on this Note are payable in
lawful money of the United States of
America.
This Note is one
of an authorized issue of Notes (hereinafter called the
"Notes"), issued and to be issued by the
Corporation in one or more series
pursuant to an Indenture of Trust, dated as
of February 1, 2004, as [amended
and] supplemented by a ________
Supplemental Indenture of Trust, dated as of
________________, (collectively, the
"Indenture"), each between the Corporation
and U.S. Bank National Association,
Minneapolis, Minnesota, as Trustee (the
"Trustee," which term includes any
successor trustee under the Indenture). As
provided in the Indenture, the Notes are
issuable in series which may vary as in
the Indenture provided or permitted. This
Note is one of a series (the "Series
____ Notes") limited to an aggregate
Principal Amount of $____________, the
proceeds of which will be used by the
Corporation to ____________________.
Reference is
hereby made to the Indenture, copies of which are on file in
the principal corporate trust office of the
Trustee, and to all of the
provisions of which any Registered Holder
of this Note by his acceptance hereof
hereby assents, for definitions of terms;
the description of and the nature and
extent of the security for the various
classes of Notes and Other Obligations
(as defined in the Indenture) secured
thereunder; the student loan acquisition
program being financed by the issuance of
the Notes; the revenues and other
moneys pledged to the payment of the
principal of, premium, if any, and interest
on the Notes and the Other Obligations; the
nature and extent and manner of
enforcement of the pledge; the conditions
upon which Notes may be issued or
Other Obligations may be incurred by the
Corporation thereunder, payable from
such revenues and other moneys thereunder
as Senior Obligations, Subordinate
Obligations or Class C
2-2
<PAGE>
Notes (each as defined in the Indenture);
the conditions upon which the
Indenture may be amended or supplemented
with or without the consent of the
Holders of the Notes; the rights and
remedies of the Registered Holder hereof
with respect hereto and thereto, including
the limitations upon the right of a
Registered Holder hereof to institute any
suit, action or proceeding in equity
or at law with respect hereto and thereto;
the rights, duties and obligations of
the Corporation and the Trustee thereunder;
the terms and provisions upon which
the liens, pledges, charges, trusts and
covenants made therein may be discharged
at or prior to the maturity or redemption
of this Note, and this Note thereafter
no longer be secured by the Indenture, or
be deemed to be Outstanding (as
defined in the Indenture) thereunder; and
for the other terms and provisions
thereof.
The Notes and
Other Obligations are limited obligations of the Corporation,
payable solely from the revenues and assets
of the Corporation pledged therefor
under the Indenture, including certain
notes evidencing Student Loans and the
proceeds of the Corporation's bonds, notes
or other evidences of indebtedness,
if any, issued with respect to the
Notes.
Each Noteholder,
by acceptance of a Note, covenants and agrees that by
accepting the benefits of the Indenture and
such Note that such Noteholder will
not at any time institute against the
Corporation, or join in any institution
against the Corporation, any bankruptcy,
reorganization, arrangement, insolvency
or liquidation proceedings under any United
States Federal or state bankruptcy
or similar law in connection with any
obligations relating to the Notes, the
Indenture or the Servicing Agreement.
The Corporation
has structured the Indenture and the Notes with the
intention that the Notes will qualify under
applicable federal, state, local and
foreign tax law as indebtedness of the
Corporation secured by the Trust Estate.
The Corporation, the Trustee, the Servicer
and each Noteholder agree to treat
and to take no action inconsistent with the
treatment of the Notes as such
indebtedness for purposes of federal,
state, local and foreign income or
franchise taxes and any other tax imposed
on or measured by income. Each
Noteholder, by acceptance of its Note,
agrees to be bound by the provisions of
this paragraph. Each Noteholder agrees that
it will cause any Person acquiring
an interest in a Note through it to comply
with the Indenture as to treatment as
indebtedness under applicable tax law, as
described in this paragraph.
[The Series
_______ Notes constitute Class B Notes under the Indenture
which are subordinated in right of payment,
the direction of remedies and
certain other matters in accordance with
the terms of the Indenture to the
rights of Class A Notes issued from time to
time under the Indenture and Other
Senior Beneficiaries thereunder. A failure
to pay principal of, premium, if any,
or interest on this Class B Note will not
constitute an Event of Default under
the Indenture if any Senior Obligation is
Outstanding (each as defined in the
Indenture).]
[The Series
_______ Notes constitute Class C Notes under the Indenture
which are subordinated in right of payment,
the direction of remedies and
certain other matters in accordance with
the terms of the Indenture to the
rights of Class A Notes and Class B Notes
issued from time to time under the
Indenture and Other Senior Beneficiaries
and Other Subordinate Beneficiaries (as
defined in the Indenture) thereunder. A
failure to pay principal of, premium, if
any, or interest on this Class C Note will
not constitute an Event of Default
under the
2-3
<PAGE>
Indenture if any Senior Obligation is
Outstanding or any Subordinate Obligation
(as defined in the Indenture) is
Outstanding.]
[At this point
in the Note form of any series should be inserted the
paragraphs, if any, relating to the terms
of redemption for that series.]
Notice of
redemption shall be given by first-class mail mailed at least
thirty (30) days before the Redemption Date
to each Registered Holder of Notes
to be redeemed at his last address
appearing on the Note Register; but no defect
in or failure to give such notice of
redemption shall affect the validity of
proceedings for redemption of any Note not
affected by such defect or failure.
All Notes so called for redemption will
cease to bear interest on such
Redemption Date, provided funds for their
redemption have been duly deposited,
and, except for the purpose of payment,
shall no longer be protected by the
Indenture and shall not be deemed
Outstanding thereunder.
It is provided
in the Indenture that Notes of a denomination larger than
$[5,000] may be redeemed in part ($[5,000]
or an integral multiple thereof) and
that upon any partial redemption of any
such Note the same shall be surrendered
in exchange for one or more new Notes of
the same series in authorized form for
the unredeemed portion of principal.
If provision is
made for the payment of principal of, premium, if any, and
interest on this Note in accordance with
the Indenture, this Note shall no
longer be deemed Outstanding under the
Indenture, shall cease to be entitled to
the benefits of the Indenture and shall
thereafter be payable solely from the
funds provided for such payment.
If an Event of
Default shall occur, the principal of all the Outstanding
Notes may and, under certain circumstances,
shall be declared due and payable in
the manner and with the effect provided in
the Indenture.
The Indenture
permits, with certain exceptions as therein provided, the
amendment thereof and the modification of
the rights and obligations of the
Corporation and the rights of the Holders
of the Notes and Other Beneficiaries
under the Indenture at any time by the
Corporation with, among other things, the
consent of the Holders of two-thirds of the
aggregate Principal Amount of Class
A Notes at the time Outstanding, if
affected thereby, and with the consent of
the Holders of two-thirds of the aggregate
Principal Amount of Class B Notes at
the time Outstanding, if affected thereby.
The Indenture also contains
provisions permitting the Holders of
specified percentages in aggregate
Principal Amount of the Class A Notes at
the time Outstanding or Other Senior
Beneficiaries or, if no Senior Obligations
are Outstanding, the Holders of
specified percentages in aggregate
Principal Amount of the Class B Notes at the
time Outstanding or Other Subordinate
Beneficiaries, on behalf of the Holders of
all the Notes, to waive certain past
defaults under the Indenture and their
consequences. Any such consent or waiver
shall be conclusive and binding upon
the Registered Holder of this Note and upon
all future Registered Holders hereof
and of any Note issued in exchange herefor
or in lieu hereof, whether or not
notation of such consent or waiver is made
upon this Note.
This Note is
transferable by the Registered Holder hereof upon surrender of
this Note for transfer at the Principal
Office of the Note Registrar (which
shall be the Trustee unless and until
2-4
<PAGE>
the Authenticating Agent becomes the Note
Registrar under the Indenture) or at
the Principal Office of a duly appointed
Authenticating Agent (the
"Authenticating Agent," which term includes
any successor Authenticating Agent
under the Indenture), duly endorsed or
accompanied by a written instrument of
transfer in form satisfactory to the Note
Registrar or the Authenticating Agent,
as the case may be, and executed by the
Registered Holder hereof or his attorney
duly authorized in writing, with signature
guarantees satisfactory to the Note
Registrar or the Authenticating Agent, as
the case may be. This Note may also be
exchanged for one or more other Notes of
the same series and Stated Maturity
upon surrender hereof at the Principal
Office of the Note Registrar or the
Principal Office of an Authenticating
Agent. Thereupon the Corporation shall
execute and the Trustee or the
Authenticating Agent, as the case may be, shall
authenticate and deliver, in exchange for
this Note, one or more new fully
registered Notes in the name of the
transferee, of an authorized denomination,
in aggregate Principal Amount equal to the
Principal Amount of this Note, of the
same series and Stated Maturity and bearing
interest at the same rate.
The Corporation
may require payment by the Registered Holder hereof of a
sum sufficient to cover any tax or other
governmental charge that may be imposed
in connection with any transfer or exchange
of this Note, other than certain
exchanges specifically exempted under the
Indenture and not involving any
transfer.
The Corporation,
the Trustee, each Paying Agent, any Authenticating Agent,
the Note Registrar and any other agent of
the Corporation may treat the Person
in whose name this Note is registered on
the Note Register as the absolute owner
hereof for all purposes, whether or not
this Note is overdue, and neither the
Corporation, the Trustee, any Paying Agent,
any Authenticating Agent, the Note
Registrar nor any other such agent shall be
affected by notice to the contrary.
IT IS HEREBY
CERTIFIED, RECITED, COVENANTED 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 Note have happened, do exist,
and have been performed in regular and due
time, form and manner as so required.
This Note shall
not be valid or become obligatory for any purpose or be
entitled to any security or benefit under
the Indenture until the Certificate of
Authentication hereon shall have been
signed by the Trustee or by the
Authenticating Agent by the manual
signature of one of its authorized
representatives.
2-5
<PAGE>
IN WITNESS
WHEREOF, the Corporation has caused this Note to be executed in
its name by the facsimile signatures of its
President and Secretary.
EDUCATION LOANS INCORPORATED
--------------------------------------
President
--------------------------------------
Secretary
Dated:
CERTIFICATE OF AUTHENTICATION
This Note is one
of the Notes of the series designated therein and issued
under the provisions of the
within-mentioned Indenture.
U.S. BANK NATIONAL
ASSOCIATION, as Trustee
[or ____________, ____________, as
Authenticating Agent
By:
By:
----------------------------------
----------------------------------
Authorized
Representative
Authorized Representative]
2-6
<PAGE>
----------
ASSIGNMENT
FOR VALUE
RECEIVED the undersigned hereby sells, assigns and transfers
unto
________________________ the within Note
and irrevocably appoints
____________________________,
attorney-in-fact, to transfer the within Note on
the books kept for registration thereof,
with full power of substitution in the
premises.
Dated
--------------------------------
PLEASE INSERT SOCIAL SECURITY
--------------------------------------
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
NOTICE: The signature
to this
assignment must correspond with the
name as it appears upon the face of
--------------------------------------
the within
Note in every particular,
without any alteration whatsoever.
SIGNATURE GUARANTEED:
2-7
<PAGE>
ARTICLE THREE
THE NOTES
Section 3.1
General Title.
There is hereby created and established an
issue of Notes of the Corporation to be
known and designated as "Student Loan
Asset-Backed Notes," which Notes may be
issued in series as hereinafter
provided. With respect to the Notes of any
particular series, the Corporation
may incorporate in or add to the general
title of such Notes any words, letters
or figures designed to distinguish that
series.
Section 3.2
General
Limitations; Issuable in Series; Purposes and
Conditions for Issuance; Payment of
Principal and Interest. The aggregate
Principal Amount of Notes that may be
authenticated and delivered and
Outstanding under this Indenture is not
limited, except as may be limited by
law. The Notes may be issued in series as
from time to time authorized by the
Board.
Notes shall be
issued only for the purposes of (a) providing funds for the
origination or purchase, or both, by the
Corporation of Eligible Loans
(including, for this purpose, the
acquisition under this Indenture of Eligible
Loans previously purchased or originated by
the Corporation from other available
moneys of the Corporation), or (b)
refunding at or before their Stated Maturity
any or all Outstanding Notes issued for
that purpose, and (c) paying
Administrative Costs, Note Fees, Costs of
Issuance and capitalized interest on
the Notes being issued and making deposits
to the Reserve Fund.
The Notes,
including the principal thereof, premium, if any, and interest
thereon and any Carry-Over Amounts (and
accrued interest thereon) with respect
thereto, and Other Obligations are limited
obligations of the Corporation,
payable solely from the revenues and assets
of the Corporation pledged therefor
under this Indenture.
The Stated
Maturities and Sinking Fund Payment Dates of all Notes shall
occur on a June 1 or an December 1 (unless
otherwise specified with respect to
any Variable Rate Notes, including those
Initial Notes constituting Variable
Rate Notes, in the Supplemental Indenture
providing for the issuance thereof).
All Corporation Swap Payments and other
payments to be made by the Corporation
to Credit Facility Providers shall be
payable on a regularly scheduled Interest
Payment Date. Except as otherwise provided
in a Supplemental Indenture with
respect to the series of Notes authorized
thereby, interest on each Note shall
be calculated to accrue on the basis of a
360-day year composed of twelve 30-day
months. In the event a default occurs in
the due and punctual payment of any
interest on any Note, interest shall be
payable thereon to the extent permitted
by law on the overdue installment of
interest, at the interest rate borne by the
Note in respect of which such interest is
overdue.
The principal of
and premium, if any, on the Notes, together with interest
payable on the Notes at the Maturity
thereof if the date of such Maturity is
other than a regularly scheduled Interest
Payment Date, shall, except as
hereinafter provided or as otherwise
provided in a Supplemental Indenture, be
payable upon presentation and surrender of
such Notes at the Principal Office of
the Trustee or, at the option of the
Holder, at the Principal Office of a duly
appointed Paying Agent. Interest due on the
Notes on each regularly scheduled
Interest Payment
3-1
<PAGE>
Date shall, except as hereinafter provided
or as otherwise provided in a
Supplemental Indenture, be payable by check
or draft drawn upon the Trustee
mailed to the Person who is the Holder
thereof as of 5:00 p.m. in the city in
which the Principal Office of the Note
Registrar is located on the Regular
Record Date relating thereto, at the
address of such Holder as it appears on the
Note Register. Any interest not so timely
paid or duly provided for (herein
referred to as "Defaulted Interest") shall
cease to be payable to the Person who
is the Holder thereof at the close of
business on the Regular Record Date and
shall be payable to the Person who is the
Holder thereof at the close of
business on a Special Record Date for the
payment of any such defaulted
interest. Such Special Record Date shall be
fixed by the Trustee whenever moneys
become available for payment of the
Defaulted Interest, and notice of the
Special Record Date shall be given to the
Holders of the Notes not less than ten
(10) days prior thereto by first-class mail
to each such Holder as shown on the
Note Register on a date selected by the
Trustee, stating the date of the Special
Record Date and the date fixed for the
payment of such Defaulted Interest. All
payments of principal of, premium, if any,
and interest on the Notes shall be
made in lawful money of the United States
of America.
After the
issuance of the Initial Notes, and from time to time, one or
more
additional series of Notes may be issued
upon compliance with the provisions of
Article Three hereof (except where
specifically indicated otherwise in this
Section 3.2) in such Principal Amounts as
may be determined by the Corporation
for any of the purposes hereinbefore
specified in this Section 3.2 upon
compliance with the following conditions
and any additional conditions specified
in a Supplemental Indenture:
A. The Trustee shall
have certified that there is no deficiency in
the
Indemnification Fund or the Note Fund and that, after the issuance
of
the series of
Notes then to be issued, there will not be a deficiency in
the Reserve
Fund.
B. An Authorized
Officer of the Corporation shall have certified (as
evidenced by a
Corporation Certificate filed with the Trustee) that the
Corporation is
not in default in the performance of any of its covenants
and agreements
in this Indenture made (unless, in the opinion of Counsel,
any such default
does not deprive any Beneficiary in any material respect
of the security
afforded by this Indenture).
C. The Trustee shall
have been provided with a Cash Flow Projection
giving effect to
such issuance of Notes which shall reflect that, after
such issuance,
the Senior Asset Requirement will be met; provided that no
such Cash Flow
Projection shall be required if Unenhanced Notes are then
Outstanding and
each Rating Agency confirms in writing to the Trustee that
it will not
require such Cash Flow Projection.
D. If such Notes are
to be Class A Notes or Class B Notes, the
Trustee shall
have been provided with written evidence from each Rating
Agency that such
series of Notes is rated (i) if such Notes are to be Class
A Notes, at
least as high as the outstanding rating assigned by each Rating
Agency to any
Outstanding Class A Notes, and (ii) if such Notes are to be
Class B Notes,
at least as high as the outstanding rating assigned by each
Rating Agency to
any Outstanding Class B Notes.
3-2
<PAGE>
E. If any Unenhanced
Notes are Outstanding, each Rating Agency shall
have confirmed
that no outstanding ratings on any of the Outstanding
Unenhanced Notes
will be reduced or withdrawn as a result of such issuance,
as evidenced by
written confirmations thereof delivered to the Trustee from
each Rating
Agency, or, if no Unenhanced Notes are then Outstanding, but
Other
Obligations are Outstanding, the Other Beneficiaries holding
such
Other Obligations consent to
the issuance of such Notes, as evidenced in
writing to the
Trustee by each such Other Beneficiary.
In calculating
the Reserve Fund Requirement, all Notes to be defeased by a
series of refunding Notes shall be deemed
not Outstanding as of the date of
calculation.
Section 3.3
Terms of
Particular Series. Each series of Notes shall be
created by and issued pursuant to a
Supplemental Indenture and such Supplemental
Indenture shall designate Notes of each
series as Class A Notes, Class B Notes
or Class C Notes. The Notes of each series
shall bear such date or dates, shall
be payable at such place or places, shall
have such Stated Maturities and
Sinking Fund Payment Dates on June 1 or
December 1 (unless otherwise specified
with respect to any Variable Rate Notes,
including those Initial Notes
constituting Variable Rate Notes, in the
Supplemental Indenture providing for
the issuance thereof), shall bear interest
at such rate or rates, from such date
or dates, payable in such installments and
on Interest Payment Dates and at such
place or places, may be redeemable at such
Redemption Price or Prices and upon
such terms (in addition to the prices and
terms herein specified for redemption
of all Notes) and may be prepayable upon
such terms as shall be provided for in
the Supplemental Indenture creating that
series. The Supplemental Indenture
creating any series of Notes may contain a
provision limiting the aggregate
Principal Amount of the Notes of that
series or the aggregate Principal Amount
of Notes which may thereafter be
issued.
All Notes of the
same series shall be substantially identical in tenor and
effect, except as to denomination, the
differences specified herein or in a
Supplemental Indenture between interest
rates, Stated Maturities and redemption
provisions.
Section 3.4
Form and
Denominations. Except as otherwise set forth in the
Supplemental Indenture providing for the
issuance thereof, the Notes of each
series shall be issued in substantially the
form set forth in Article Two
hereof. The Notes of each series shall be
distinguished from the Notes of other
series and Term Notes shall be
distinguished from Serial Notes in such manner as
the Board may determine.
The Notes of any
series may be issuable as fully registered Notes only, of
single Stated Maturities.
The Notes of
each series shall be issuable in such denominations as shall
be provided in the provisions of the
Supplemental Indenture creating such
series. In the absence of any such
provisions with respect to the Notes of any
particular series, the Notes of such series
shall be in the denomination of
$5,000 in original Principal Amount or any
integral multiple thereof.
Section 3.5
Execution,
Authentication and Delivery. The Notes shall be
executed on behalf of the Corporation by
the president or any vice president of
the Corporation and attested
3-3
<PAGE>
by the secretary or an assistant secretary
of the Corporation, either or both of
which signatures may be facsimiles.
Notes bearing
the manual or facsimile signatures of individuals who were at
any time the proper officers of the
Corporation shall bind the Corporation,
notwithstanding that such individuals or
any of them have ceased to hold such
offices prior to the authentication and
delivery of such Notes or did not hold
such offices at the date of such Notes.
At any time and
from time to time after the execution and delivery of this
Indenture, the Corporation may deliver
Notes executed by the Corporation to the
Trustee or the Authenticating Agent for
authentication; and, upon Corporation
Order, the Trustee or the Authenticating
Agent, as the case may be, shall
authenticate and deliver such Notes as in
this Indenture provided and not
otherwise.
No Note shall be
entitled to any benefit under this Indenture or be valid
or obligatory for any purpose, unless there
appears on such Note a certificate
of authentication substantially in the form
provided for in Article Two hereof
executed by the Trustee or the
Authenticating Agent by manual signature of one
of its authorized officers, and such
certificate upon any Note shall be
conclusive evidence, and the only evidence,
that such Note has been duly
authenticated and delivered hereunder.
Section 3.6
Temporary Notes.
Pending the preparation of definitive Notes,
the Corporation may execute and, upon
Corporation Order, the Trustee shall
authenticate and deliver, temporary Notes
which are printed, lithographed,
typewritten, mimeographed or otherwise
produced, in any denomination,
substantially of the tenor of the
definitive Notes in lieu of which they are
issued, in fully registered form, without
coupons, and with such appropriate
insertions, omissions, substitutions and
other variations as the officers of the
Corporation executing such Notes may
determine, as evidenced by their signing of
such Notes.
If temporary
Notes are issued, the Corporation will cause definitive Notes
to be prepared without unreasonable delay.
After the preparation of definitive
Notes, the temporary Notes shall be
exchangeable for definitive Notes upon
surrender of the temporary Notes at the
Principal Office of the Trustee, without
charge to the Holder. Upon surrender for
cancellation of any one or more
temporary Notes, the Corporation shall
execute and the Trustee shall
authenticate and deliver in exchange
therefor a like Principal Amount of
definitive Notes of the same series and
Stated Maturity of authorized
denominations. Until so exchanged the
temporary Notes shall in all respects be
entitled to the same benefits under this
Indenture as definitive Notes.
Section 3.7
Registration,
Transfer and Exchange. The Corporation shall
cause to be kept at the Principal Office of
the Note Registrar a Note Register
in which, subject to such reasonable
regulations as it may prescribe, the
Corporation shall provide for the
registration of Notes and of transfers of
Notes as herein provided. The Corporation
may, in a Supplemental Indenture,
appoint an Authenticating Agent for the
purpose of receiving, authenticating and
delivering Notes in connection with
transfers, exchanges and registrations as
herein provided. Unless an Authenticating
Agent is designated to serve in such
capacity pursuant to a Supplemental
Indenture or is otherwise directed, and
agrees, to so serve in accordance with a
Corporation Order, the Trustee shall be
Note Registrar for the purpose of
registering Notes and
3-4
<PAGE>
transfer of Notes as herein provided. At
reasonable times and under reasonable
regulations established by the Note
Registrar, the Note Register may be
inspected and copied by the Corporation or
by the Holders (or a designated
representative thereof) of ten percent
(10%) or more in Principal Amount of
Notes then Outstanding.
The Trustee and
any Authenticating Agent shall adhere, with respect to
transfer of Notes, to the standards for
efficiency in transfer agent performance
established in Securities and Exchange
Commission Rules 17Ad-2 through 17Ad-7
under the Securities Exchange Act of 1934,
most particularly Rule 17Ad-2, which
requires that registered transfer agents
process at least ninety percent (90%)
of routine items (such as certificates
presented for transfer) received during
any month within three (3) business days of
their receipt.
Upon surrender
for transfer or exchange of any Note at the Principal Office
of the Note Registrar or at the Principal
Office of any Authenticating Agent, or
on a Purchase Date or Mandatory Tender Date
with respect to Notes which are
Deemed Tendered, whether or not surrendered
on such date, the Corporation shall
execute, and the Trustee or the
Authenticating Agent, as the case may be, shall
authenticate and deliver, in the name of
the designated transferee or
transferees, including transferees
designated by a Depositary with respect to
Notes Deemed Tendered, or in exchange for
the Note surrendered, one or more new
fully registered Notes of any authorized
denomination or denominations, of like
aggregate Principal Amount, of the same
series, having the same Stated Maturity
and interest rate and bearing numbers not
previously assigned.
All Notes
executed, delivered and authenticated pursuant to the preceding
paragraph shall be registered in the name
of the Holder presenting the Note for
exchange or the designated transferee, as
the case may be, on the Note Register
on the date of such transfer or
exchange.
All Notes
surrendered upon any exchange or transfer provided for in this
Indenture shall be promptly canceled by the
Trustee upon receipt thereof from
the Note Registrar or the Authenticating
Agent, as the case may be, and
thereafter disposed of as directed by
Corporation Order.
All Notes issued
upon any transfer or exchange of Notes, including Notes
issued in lieu of Notes Deemed Tendered,
whether or not surrendered, shall be
the valid obligations of the Corporation
evidencing the same debt, and entitled
to the same security and benefits under
this Indenture, as the Notes surrendered
upon such transfer or exchange or in lieu
of which such Notes were issued.
Every Note
presented or surrendered for transfer or exchange shall be duly
endorsed, or be accompanied by a written
instrument of transfer in form
satisfactory to the Note Registrar or the
Authenticating Agent, as the case may
be, duly executed, by the Holder thereof or
his attorney duly authorized in
writing, with such signature guaranteed by
an "eligible guarantor institution"
meeting the requirements of the Note
Registrar or the Authenticating Agent, as
the case may be, which requirements include
membership or participation in a
"signature guarantee program" determined by
the Note Registrar or the
Authenticating Agent, as the case may be,
in accordance with the Exchange Act,
and such other documents as the Trustee may
require.
3-5
<PAGE>
The Corporation
may require payment by the Noteholder of a sum sufficient
to cover any tax or other governmental
charge that may be imposed in connection
with any transfer or exchange of Notes,
other than exchanges upon a partial
redemption of a Note not involving any
transfer. All other expenses incurred by
the Corporation, the Trustee, the Note
Registrar or the Authenticating Agent in
connection with any transfer or exchange of
Notes shall be paid by the
Corporation.
Except in
connection with a Purchase Demand, the Corporation shall not be
required to transfer any Note (i) during a
period beginning at the opening of
business fifteen (15) days before any
selection of Notes of the same series for
redemption and ending at the close of
business on the day of such selection,
(ii) selected for redemption in whole or in
part, (iii) after receipt by the
Depositary of a properly completed Purchase
Demand with respect thereto, or (iv)
on or after the date notice of a Mandatory
Tender Date is given through such
Mandatory Tender Date. In the event that a
Note is transferred in connection
with a Purchase Demand either during the
period referred to in clause (i) or
after being selected for redemption in
whole or in part, the Note Registrar or
the Authenticating Agent, as appropriate,
shall give written notice to any
transferee thereof that such Note may be,
or has been, selected for redemption,
as the case may be.
Section 3.8
Mutilated,
Destroyed, Lost and Stolen Notes. If a mutilated
Note is surrendered to the Trustee or the
Note Registrar, the Corporation shall
execute and the Trustee or any
Authenticating Agent shall authenticate and
deliver in exchange therefor a new Note of
the same series and of like tenor and
Principal Amount, Stated Maturity and
interest rate, bearing a number not
contemporaneously outstanding. If the
Corporation, the Note Registrar, any
Authenticating Agent and the Trustee
receive evidence to their satisfaction of
the destruction, loss or theft of any Note,
and there is delivered to the
Corporation, the Note Registrar, any
Authenticating Agent and the 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
Corporation, the Note Registrar, any
Authenticating Agent or the Trustee that
such Note has been acquired by a bona
fide purchaser, the Corporation shall
execute and upon its request the Trustee
or any Authenticating Agent shall
authenticate and deliver, in exchange for or
in lieu of such destroyed, lost or stolen
Note, a new Note of the same series
and of like tenor, Principal Amount, Stated
Maturity and interest rate.
In case any such
mutilated, destroyed, lost or stolen Note has become or is
about to become due and payable, the
Corporation in its discretion may, instead
of issuing a new Note, pay such Note.
Every new Note
issued pursuant to this Section 3.8 in lieu of any
destroyed, lost or stolen Note shall
constitute an original additional
contractual obligation of the Corporation,
whether or not the destroyed, lost or
stolen Note shall be at any time
enforceable by anyone, and shall be entitled to
all the benefits of this Indenture equally
and proportionately with any and all
other Notes of such series duly issued and
authenticated hereunder. Neither the
Corporation, the Trustee, the Note
Registrar nor any Authenticating Agent 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 which
may be issued hereunder or for the purpose
of determining any
3-6
<PAGE>
percentage of Notes Outstanding hereunder,
but both the original and duplicate
Note shall be treated as one and the
same.
Upon the
issuance of any new Note under this Section 3.8, the
Corporation
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 Note Registrar, any
Authenticating Agent and the Trustee)
connected therewith.
The provisions
of this Section 3.8 are exclusive and shall preclude (to the
extent lawful) all other rights and
remedies with respect to the replacement or
payment of mutilated, destroyed, lost or
stolen Notes.
Section 3.9
Interest Rights
Preserved; Dating of Notes. Each Note
delivered under this Indenture upon
transfer of or in exchange for or in lieu of
any other Note shall carry all the rights
to interest accrued and unpaid, and to
accrue, which were carried by such other
Note. Each Note shall bear an original
issue date as provided in the Supplemental
Indenture authorizing the issuance of
the series of Notes of which such Note is a
part and, upon the original delivery
of a series of Notes or an exchange or
transfer of Notes pursuant to Section 3.7
hereof, the Trustee or the Authenticating
Agent, as the case may be, shall date
each Note to be delivered as of the date of
authentication thereof, except as
may be otherwise provided in a Supplemental
Indenture with respect to Notes of
the series authorized to be issued
thereby.
Section 3.10
Persons Deemed
Holders. The Corporation, the Trustee, each
Authenticating Agent, each Paying Agent,
each Note Registrar, each Depositary
and any other agent of the Corporation may,
except in the case of Notes Deemed
Tendered, treat the Person in whose name
any Registered Note is registered as
the owner of such Note for the purpose of
receiving payment of principal of (and
premium, if any), interest on and any
Carry-Over Amounts (and accrued interest
thereon) with respect to such Note and for
all other purposes whatsoever,
whether or not such Note be overdue, and
neither the Corporation, the Trustee,
any Authenticating Agent, any Paying Agent,
any Note Registrar, any Depositary
nor any other agent of the Corporation
shall be affected by notice to the
contrary.
Section 3.11
Cancellation. All
Notes surrendered for payment, redemption,
transfer or exchange, if surrendered to the
Trustee, shall be promptly canceled
by it, and, if surrendered to any Person
other than the Trustee, shall be
delivered to the Trustee and, if not
already canceled, shall be promptly
canceled by it. The Corporation may at any
time deliver to the Trustee for
cancellation any Notes previously
authenticated and delivered hereunder, which
Notes so delivered shall be promptly
canceled by the Trustee. All canceled Notes
held by the Trustee shall be disposed of as
directed by a Corporation Order.
Section 3.12
Class B and Class C
Notes. The Corporation may at any time
issue a series of Notes pursuant to Section
3.2 hereof which is subordinate in
rights to the Senior Obligations. Such
subordinate obligations shall either be
on a parity with the Subordinate
Obligations in all respects or may be
subordinate to the Subordinate Obligations
in respect of each of the provisions
of this Indenture which express the
subordination of the Subordinate
Obligations.
3-7
<PAGE>
ARTICLE FOUR
CREATION OF FUNDS AND ACCOUNTS;
CREDITS THERETO AND PAYMENTS THEREFROM
Section 4.1
Creation of
Funds and Accounts. There are hereby created and
established the following Funds and
Accounts (each of which shall be a
securities account, as defined in Section
8-501 of the UCC) to be held by the
Trustee, or, in the case of the Acquisition
Fund, the Revenue Fund or the
Administration Fund, by the Trustee or a
Deposit Agent, and maintained in
accordance with the provisions of this
Indenture:
1. An Acquisition Fund.
2. An Administration Fund.
3. A Reserve Fund.
4. An Indemnification Fund.
5. A Revenue Fund, within which
there shall be a Repayment Account and an
Income Account.
6. A Note Fund, within which
there shall be an Interest Account, a
Principal Account and a Retirement
Account.
7. An Alternative Loan
Guarantee Fund.
8. A Surplus Fund, within which
there shall be a Special Redemption and
Prepayment Account and a Surplus
Account.
Section 4.2
Acquisition
Fund. With respect to each series of Notes, the
Trustee shall, upon delivery to the initial
purchasers thereof and from the
proceeds thereof, credit to the Acquisition
Fund the amount, if any, specified
in the Supplemental Indenture providing for
the issuance of such series of
Notes. The Trustee shall also deposit in
the Acquisition Fund: (i) any funds to
be transferred thereto from the Revenue
Fund as provided in Section 4.6 hereof
or from the Surplus Fund as provided in
Section 4.8 hereof, and (ii) any other
amounts specified in a Supplemental
Indenture to be deposited therein. In
addition, the Trustee shall also credit to
the Acquisition Fund any Eligible
Loans transferred thereto from the Surplus
Account pursuant to Section 4.8
hereof (any such Eligible Loans so
transferred being thereafter deemed to have
been Financed with moneys in the
Acquisition Fund).
Balances in the
Acquisition Fund shall be used only for (a) the acquisition
of Eligible Loans pursuant to a Student
Loan Purchase Agreement (including, for
this purpose, the acquisition of Eligible
Loans previously purchased or
originated by the Corporation or the
Trustee on behalf of the Corporation
pursuant to a Student Loan Purchase
Agreement from other available moneys of the
Corporation) or Transfer Agreement, (b) the
origination of Eligible Loans, (c)
the redemption or purchase of Notes as
provided in a Supplemental Indenture
providing for the issuance of such Notes,
(d) the payment of Debt Service on the
Class A Notes
4-1
<PAGE>
and Other Senior Obligations when due (upon
transfer to the Note Fund as set
forth in the following paragraph), (e) the
payment of the purchase price of any
Class A Notes required to be purchased on a
Purchase Date or a Mandatory Tender
Date (upon transfer to the Note Fund as set
forth in the following paragraph),
or (f) to cure deficiencies in the
Indemnification Fund (upon transfer to the
Indemnification Fund as set forth in the
following paragraph). The Trustee shall
make or shall authorize the Deposit Agent
to make payments to the Transferor,
Lenders or SLFC from the Acquisition Fund
for the acquisition of Eligible Loans
(such payments to be made at purchase
prices not in excess of the amount
specified therefor in the Supplemental
Indenture which created the Account in
the Acquisition Fund from which such
purchase price is to be withdrawn),
including the payment of reasonable
transfer or assignment fees, if applicable,
upon receipt by the Trustee of an Eligible
FFELP Loan Acquisition Certificate,
in the case of Eligible FFELP Loans, or an
Eligible Alternative Loan Acquisition
Certificate, in the case of Eligible
Alternative Loans, and all documents,
opinions, certificates and amounts required
thereby (including, in the case of
an Eligible Alternative Loan, (i) the
original promissory note relating thereto
and all endorsements thereof required by
the related Student Loan Purchase
Agreement, and (ii) the amount, if any,
required by the related Supplemental
Indenture to be deposited in the
Alternative Loan Guarantee Fund in connection
with such acquisition). Within three (3)
Business Days after the disbursement of
moneys from the Acquisition Fund for the
purchase of Eligible FFELP Loans
pursuant to an Eligible FFELP Loan
Acquisition Certificate, the Corporation
shall forward to the Trustee an updating
Corporation Certificate substantially
in the form of Exhibit D hereto with
respect to such Eligible FFELP Loans. The
Trustee shall make or shall authorize the
Deposit Agent to make payments from
the Acquisition Fund for the origination of
Eligible FFELP Loans upon receipt by
the Trustee of an Eligible FFELP Loan
Origination Certificate and all documents,
opinions and certificates required thereby.
The Trustee shall make or shall
authorize the Deposit Agent to make
payments to a Transferor from the
Acquisition Fund for the acquisition of
Eligible Loans pursuant to a Transfer
Agreement (such payments to be made at
purchase prices not in excess of the
amount specified therefor in the
Supplemental Indenture which created the
Account in the Acquisition Fund from which
such purchase price is to be
withdrawn), including the payment of
reasonable transfer or assignment fees, if
applicable, upon receipt by the Trustee of
all documents, opinions, certificates
and amounts required by such Transfer
Agreement (including, in the case of an
Eligible Alternative Loan, (i) the original
promissory note relating thereto and
all endorsements thereof required by the
Transfer Agreement, and (ii) the
amount, if any, required by the related
Supplemental Indenture to be deposited
in the Alternative Loan Guarantee Fund in
connection with such acquisition).
After any such acquisition, the Corporation
and the Trustee shall amend the
Exhibit or Exhibits to the applicable
Supplemental Indentures to reflect the
addition of the student loan purchase
agreements relating to the Eligible Loans
so acquired and such agreements shall
become Student Loan Purchase Agreements
for all purposes under this Indenture.
Balances in the
Acquisition Fund (other than any portion of such Balance
consisting of Student Loans) shall be (i)
transferred to the credit of the
Indemnification Fund to the extent
necessary, after transfers thereto from the
Revenue Fund, the Surplus Fund, the Reserve
Fund, the Administration Fund (other
than that portion of such Balance necessary
to pay Administrative Expenses and
Note Fees due during the next thirty (30)
days) and the Note Fund, to make any
deposit to the credit of the
Indemnification Fund required by Section 4.5
hereof, (ii) after such transfer, if any,
to be made pursuant to the preceding
clause (i) has been taken into account,
transferred to the credit of the Note
Fund on the last Business Day preceding
any
4-2
<PAGE>
Interest Payment Date, Principal Payment
Date or Redemption Date to the extent
required to pay the Debt Service due on the
Class A Notes and any Other Senior
Obligations, all as provided in Section 4.7
hereof, and (iii) after such
transfers, if any, to be made pursuant to
the preceding clauses (i) and (ii)
have been taken into account, transferred
to the credit of the Principal Account
on any Purchase Date or Mandatory Tender
Date with respect to Class A Notes, to
the extent required by Section 4.7.2(C)
hereof. Transfers of amounts from the
Acquisition Fund to the Indemnification
Fund and the Note Fund pursuant to the
preceding sentence shall be made by the
Trustee without any further
authorization or direction. In the event
that, after transfers to the
Indemnification Fund from all other Funds
and Accounts, a deficiency exists in
the Indemnification Fund under Section 4.5
hereof, the Trustee shall use its
best efforts to sell Student Loans included
in the Balance of the Acquisition
Fund at the best price available to the
extent of such deficiency; and the
proceeds of any such sale shall be credited
to the Indemnification Fund, to the
extent of any deficiency in the
Indemnification Fund, and otherwise to the
Revenue Fund. If any amounts have been
transferred to either or both of the
Indemnification Fund or the Note Fund
pursuant to this paragraph, the Trustee
shall, to the extent necessary to cure the
deficiency in the Acquisition Fund as
a result of such transfer or transfers,
transfer to the Acquisition Fund amounts
from the Revenue Fund in the manner
provided in Section 4.6 hereof.
The unpaid
principal balance of Financed Student Loans in the Acquisition
Fund shall be included in the Balance of
the Acquisition Fund until such
Financed Student Loans shall have been paid
in full or sold or exchanged as
herein provided. Interest and principal
payments, including Guarantee payments,
and Special Allowance Payments received
with respect to Financed Student Loans
(excluding, except as otherwise provided in
a Supplemental Indenture, any
federal interest subsidy payments and
Special Allowance Payments that accrued
prior to the date on which such Student
Loans were Financed) and proceeds from
the sale or other conveyance of Financed
Student Loans (except as otherwise
provided in the preceding paragraph) shall
be credited, in the case of such
principal and interest, including Guarantee
payments and Special Allowance
Payments, to the Revenue Fund as provided
in Section 4.6 hereof; in the case of
the portion of the proceeds of such sale or
other conveyance which represents
payment of the principal of Financed
Student Loans sold, to the Principal
Account; and in the case of the portion of
the proceeds of such sale or other
conveyance which represent payment of
accrued interest on and Special Allowance
Payments with respect to Financed Student
Loans sold, to the Interest Account.
The Corporation
may direct the Trustee to sell to any purchaser one or more
Student Loans Financed with moneys in the
Acquisition Fund in exchange for one
or more Eligible Loans (of approximately
the same aggregate Principal Balance
and accrued noncapitalized borrower
interest as such Financed Student Loans)
which (1) evidence the additional
obligations of Eligible Borrowers whose
Student Loans have been previously Financed
hereunder, or (2) are to be
substituted for Financed Student Loans
which are not Eligible Loans; provided
that, prior to any such sale and exchange,
the Trustee shall have received an
Eligible FFELP Loan Acquisition
Certificate, in the case of Eligible FFELP
Loans, or an Eligible Alternative Loan
Acquisition Certificate, in the case of
Eligible Alternative Loans and, in the case
of Eligible FFELP Loans, an updating
Corporation Certificate substantially in
the form of Exhibit D hereto and all
documents, opinions and certifications
required thereby with respect to all
Eligible Loans to be so transferred to this
Indenture in exchange, together with
(A) except in the case of Eligible
4-3
<PAGE>
Loans referred to in the preceding clause
(2) or unless the Principal Balance of
Eligible Loans sold or exchanged within the
preceding twelve (12)-month period
pursuant to this paragraph will not,
together with the Principal Balance of
Eligible Loans then proposed to be sold or
exchanged, exceed $1,000,000, a
Corporation Certificate that, based on a
Cash Flow Projection (a copy of which
shall be provided to each Rating Agency),
such sale and exchange will not
materially adversely affect the
Corporation's ability to pay Debt Service on the
Outstanding Notes and Outstanding Other
Obligations, Carry-Over Amounts
(including accrued interest thereon) with
respect to Outstanding Notes,
Administrative Expenses or Note Fees or to
make the required deposits to the
credit of the Indemnification Fund, and (B)
a written instrument satisfactory to
the Trustee assigning all right, title,
interest and privilege of the
Corporation in, to and under the student
loan purchase agreement pursuant to
which each such Eligible Loan to be
transferred to this Indenture was acquired,
to the extent such right, title, interest
and privilege relate to such Eligible
Loan; and thereafter the Corporation and
the Trustee shall amend the Exhibit or
Exhibits to the applicable Supplemental
Indentures to reflect the addition of
such student loan purchase agreements and
such agreements shall become Student
Loan Purchase Agreements for all purposes
under this Indenture. Any money
received by the Corporation in connection
with a sale and exchange of Financed
Student Loans pursuant to this paragraph,
including those moneys representing
the excess of the aggregate Principal
Balance of and accrued noncapitalized
borrower interest on such Financed Student
Loans released from this Indenture
over the aggregate Principal Balance of and
accrued noncapitalized borrower
interest on the Eligible Loans transferred
to this Indenture in exchange
therefor, shall be deposited to the credit
of the Principal Account and the
Interest Account in accordance with the
preceding paragraph. Any such Eligible
Loans so transferred to this Indenture in
exchange for Student Loans previously
Financed from the Acquisition Fund shall,
for all purposes of this Indenture, be
deemed to have been Financed with moneys in
the Acquisition Fund and shall be
credited to the Acquisition Fund and
included in the Balance thereof.
Pending
application of moneys in the Acquisition Fund for one or more
authorized purposes, such moneys shall be
invested in Investment Securities, as
provided in Section 4.11 hereof, and any
earnings on or income from said
investments shall be deposited in the
Revenue Fund as provided in Section 4.6
hereof.
Section 4.3
Administration
Fund. With respect to each series of Notes,
the Trustee shall, upon delivery thereof
and from the proceeds thereof, credit
to the Administration Fund the amount, if
any, specified in the Supplemental
Indenture providing for the issuance of
such series of Notes. The Trustee shall
also credit to the Administration Fund all
amounts transferred thereto from the
Revenue Fund and the Surplus Fund. Except
as otherwise provided in this Section
4.3, amounts in the Administration Fund
shall, upon receipt by the Trustee of
Corporation Orders directing the payment to
designated payees in designated
amounts for stated services, or, in the
case of reimbursement of the Corporation
for its expenses, to the Corporation, and
in each case certifying that such
payment is authorized by this Indenture, be
used for and applied only to pay
Costs of Issuance, Administrative Expenses
and Note Fees or to reimburse another
fund, account or other source of the
Corporation for the previous payment of
Costs of Issuance, Administrative Expenses
or Note Fees. If the servicing of
Financed Student Loans is to be converted
from one Servicer to another, and
there are any costs or fees associated with
such conversion, such costs or fees
shall constitute Administrative Expenses
and, to the extent payable by the
Corporation or the Trustee, shall be paid
by the Trustee from amounts in the
4-4
<PAGE>
Administration Fund. If any such fees or
expenses are payable by the replaced
Servicer and such Servicer is insolvent or
otherwise incapable of paying, the
Trustee shall pay such fees or expenses
from amounts in the Administration Fund,
with or without direction from the
Corporation, and shall thereafter seek
reimbursement therefor from the replaced
Servicer. Payments from the
Administration Fund for such purposes shall
be made by check or wire transfer by
the Trustee or a Deposit Agent, but only in
accordance with such Corporation
Orders.
Balances in the
Administration Fund shall be applied to the following
purposes in the following order of
priority: first, to remedy deficiencies in
the Indemnification Fund to the extent and
in the manner provided in Section 4.5
hereof; second, to remedy deficiencies in
the Interest Account to the extent and
in the manner provided in Section 4.7.1
hereof for the payment of interest on
Class A Notes or Other Senior Obligations
payable therefrom; third, to remedy
deficiencies in the Principal Account to
the extent and in the manner provided
in subsections (A) and (C) of Section 4.7.2
hereof for the redemption or payment
of principal or the purchase price of Class
A Notes or the payment of Other
Senior Obligations payable therefrom;
fourth, to remedy deficiencies in the
Retirement Account to the extent and in the
manner provided in Section 4.7.3
hereof for the redemption of Class A Notes
or the payment of Other Senior
Obligations payable therefrom; fifth, to
remedy deficiencies in the Interest
Account to the extent and in the manner
provided in Section 4.7.1 hereof for the
payment of interest on Class B Notes or
Other Subordinate Obligations payable
therefrom; sixth, to remedy deficiencies in
the Principal Account to the extent
and in the manner provided in subsections
(A) and (C) of Section 4.7.2 hereof
for the payment of principal or the
purchase price of Class B Notes or the
payment of Other Subordinate Obligations
payable therefrom; seventh, to remedy
deficiencies in the Retirement Account to
the extent and in the manner provided
in Section 4.7.3 hereof for the redemption
of Class B Notes or the payment of
Other Subordinate Obligations payable
therefrom; and eighth, to pay Costs of
Issuance, Note Fees and Administrative
Expenses. Notwithstanding the foregoing,
Balances in the Administration Fund
necessary to pay Administrative Expenses and
Note Fees due during the next thirty (30)
days shall not be required to be
applied pursuant to priorities first
through seventh in the preceding sentence.
Amounts in the
Administration Fund may, subject to any limitations
specified in a Supplemental Indenture, be
paid out for Costs of Issuance or Note
Fees at any time upon receipt of a
Corporation Order and shall be paid in the
full amount designated therein; provided
that the aggregate amount of Costs of
Issuance paid or reimbursed from amounts in
the Administrative Fund or any other
Fund or Account in respect of a particular
series of Notes shall under no
circumstances exceed the amount, if any,
specified therefor in the Supplemental
Indenture authorizing the issuance of Notes
of such series. Amounts in the
Administration Fund may, subject to any
limitations specified in a Supplemental
Indenture, be paid out for Administrative
Expenses, or to reimburse the
Corporation for the prior payment of
Administrative Expenses, at any time, in
cumulative amounts in any given Fiscal Year
not in excess of (A) the amount of
Budgeted Administrative Expenses for that
Fiscal Year, unless an Authorized
Officer of the Corporation shall certify in
writing to the Trustee that
Administrative Expenses in an increased
amount (i) are reasonable and necessary
in light of all circumstances then
existing, (ii) will not materially adversely
affect the ability of the Corporation to
pay or perform, as the case may be, all
of its obligations under this Indenture,
and (iii) can be paid out of amounts
deposited into the Administration Fund
pursuant to the provisions of this
Indenture, plus (B) the amount of
Administrative Expenses for any prior Fiscal
Year previously paid by the Corporation
from a
4-5
<PAGE>
source other than the Administration Fund
and requested to be reimbursed to such
source, provided that the amount of such
Administrative Expenses, together with
all other Administrative Expenses for such
prior Fiscal Year previously paid or
reimbursed from the Administration Fund,
shall not exceed the Budgeted
Administrative Expenses for such prior
Fiscal Year.
The Trustee
shall transfer and credit to the Administration Fund moneys
available hereunder for transfer thereto
from the sources set forth in the
following paragraph and in such amounts and
at such times as an Authorized
Officer of the Corporation shall direct by
Corporation Order; provided such
Corporation Order shall certify that the
amounts are required and have been or
will be expended within the next ninety
(90) days for a purpose for which the
Administration Fund may be used and
applied.
Deposits to the
credit of the Administration Fund shall be made from the
following sources in the following order of
priority: the Revenue Fund to the
extent and in the manner provided in
Section 4.6 hereof; and the Surplus Fund to
the extent and in the manner provided in
Section 4.8 hereof.
Pending
transfers from the Administration Fund, the moneys therein shall
be
invested in Investment Securities, as
provided in Section 4.11 hereof, and any
earnings on or income from such investments
shall be deposited in the Revenue
Fund as provided in Section 4.6 hereof.
Section 4.4
Reserve Fund.
The Reserve Fund is established only for the
security of the Senior Beneficiaries and
the Subordinate Beneficiaries, and not
for the Holders of the Class C Notes.
Immediately upon the delivery of any
series of Class A Notes or Class B Notes,
and from the proceeds thereof or, at
the option of the Corporation, from any
amounts to be transferred thereto from
the Surplus Fund pursuant to Section 4.8
hereof and from any other available
moneys of the Corporation not otherwise
credited to or payable into any Fund or
Account under this Indenture or otherwise
subject to the pledge and security
interest created by this Indenture, the
Trustee shall credit to the Reserve Fund
the amount, if any, specified in the
Supplemental Indenture providing for the
issuance of that series of Notes, such that
upon issuance of such Notes, the
Balance in the Reserve Fund shall not be
less than the Reserve Fund Requirement.
If on any
Monthly Payment Date the Balance in the Reserve Fund shall be
less than the Reserve Fund Requirement, the
Trustee shall transfer and credit
thereto an amount equal to the deficiency
from the following Funds and Accounts
in the following order of priority: the
Repayment Account (to the extent not
required for credit to the Indemnification
Fund, the Administration Fund, the
Note Fund or the Acquisition Fund), the
Income Account (to the extent not
required for credit to the Indemnification
Fund, the Administration Fund, the
Note Fund or the Acquisition Fund) and the
Surplus Fund (to the extent not
required for credit to the Indemnification
Fund, the Administration Fund or the
Note Fund); provided, however, that any
such transfer from the Surplus Fund
shall be made only to the extent that that
portion of the Balance thereof not
consisting of Eligible Loans is sufficient
therefor.
The Balance in
the Reserve Fund shall be used and applied solely for (i)
transfers to the Indemnification Fund to
the extent necessary, after transfers
thereto from the Revenue Fund and
4-6
<PAGE>
the Surplus Fund, to make any deposit to
the credit of the Indemnification Fund
required by Section 4.5 hereof, and (ii)
after such transfer, if any, to be made
pursuant to the preceding clause (i) has
been taken into account, the payment
when due of Debt Service on the Class A
Notes, the Class B Notes and the Other
Obligations and the purchase price of Class
A Notes and Class B Notes on a
Purchase Date or Mandatory Tender Date and
the other purposes specified in
Section 4.7 hereof, and shall be so used
and applied by transfer by the Trustee
to the credit of the Note Fund, (a) at any
time and to the extent that the
Balance therein and the Balances available
for deposit to the credit thereof
from the Revenue Fund and the Surplus Fund
(other than that portion of the
Balance thereof consisting of Eligible
Loans) are insufficient to meet the
requirements specified in Section 4.7
hereof for deposit to the credit of the
Note Fund at such time (provided, however,
that such amounts shall be applied,
first, to the payment of interest on the
Class A Notes and the payment of Other
Senior Obligations payable from the
Interest Account, second, to the payment of
principal and the purchase price of the
Class A Notes and the payment of Other
Senior Obligations payable from the
Principal Account, third, to the payment of
interest on the Class B Notes and the
payment of Other Subordinate Obligations
payable from the Interest Account, and,
fourth, to the payment of principal and
the purchase price of the Class B Notes and
the payment of Other Subordinate
Obligations payable from the Principal
Account), and (b) at any time when a
portion of the Balance therein is required
to be transferred to the Retirement
Account to pay a portion of the Redemption
Price of Class A Notes or Class B
Notes to be redeemed as provided in a
Supplemental Indenture relating thereto;
provided, however, that on the Stated
Maturity or any Redemption Date of any
Class A Notes or Class B Notes, amounts in
the Reserve Fund shall, upon
Corporation Order, be applied to the
payment at maturity or redemption of all
Outstanding Class A Notes or Class B Notes
of a series, to the extent that such
application, and payment of all deposits to
be made to the credit of the
Indemnification Fund required by Section
4.5 hereof upon such redemption, will
not reduce the Balance of the Reserve Fund
below the Reserve Fund Requirement
(calculated as though the Notes to be
retired on such Stated Maturity or
Redemption Date were not Outstanding as of
the date of such calculation), and,
after giving effect to such payment or
redemption, the conditions of Section
10.2 will be met; and provided, further,
that at any time when the aggregate of
the Balances in the Note Fund, the Reserve
Fund and the Surplus Fund (exclusive
of Student Loans) equals an amount
sufficient to discharge and satisfy the
obligations of the Corporation with respect
to all of the Outstanding Class A
Notes, Class B Notes and Other Obligations
and to make all deposits to the
credit of the Indemnification Fund required
by Section 4.5 hereof, all in the
manner described in Section 11.1 hereof,
said Balances shall, upon Corporation
Order, be so applied. Notwithstanding the
foregoing, if on any Monthly Payment
Date the Balance in the Reserve Fund
exceeds the Reserve Fund Requirement, such
excess shall, upon Corporation Order, be
transferred to the Principal Account,
to the extent necessary to make the
deposits required to be made to the credit
of the Principal Account on such Monthly
Payment Date pursuant to the provisions
of Section 4.7.2 hereof, whether or not
other moneys are available to make such
deposits.
Pending
transfers from the Reserve Fund, the moneys therein shall be
invested in Investment Securities as
provided in Section 4.11 hereof, and any
earnings on or income from such investments
shall be deposited in the Revenue
Fund as provided in Section 4.6 hereof.
Section 4.5
Indemnification
Fund. The Trustee shall, upon receipt of any
notice that an amount is payable from the
Trust Estate pursuant to the
indemnification provisions of a Joint
Sharing Agreement, immediately furnish a
copy thereof to the Corporation.
Thereafter, the
4-7
<PAGE>
Corporation and the Trustee shall promptly
determine if, and the extent to
which, such amount is so payable and, if
and to the extent it is, the Trustee
shall transfer such amount to the
Indemnification Fund from the Balances in the
Revenue Fund, the Surplus Fund (other than
that portion of the Balance therein
consisting of Eligible Loans), the Reserve
Fund, the Administration Fund (other
than that portion of the Balance therein
necessary to pay Administrative
Expenses and Note Fees due during the next
thirty (30) days), the Surplus Fund
(including any portion of the Balance
therein consisting of Eligible Loans), the
Retirement Account, the Principal Account,
the Interest Account and the
Acquisition Fund, in that order of
priority. Any amount so transferred to the
Indemnification Fund shall be immediately
paid by the Trustee to the appropriate
party or parties.
Amounts in the
Indemnification Fund shall be used only for the purposes
specified in the preceding paragraph, and
shall not be available for any other
purpose, including, but not limited to,
payment of Debt Service on or the
purchase price of the Notes or Other
Obligations.
Section 4.6
Revenue Fund.
The Trustee and any Deposit Agent shall credit
to the Revenue Fund: (i) all amounts
received as interest, including federal
interest subsidy payments, and principal
payments with respect to Financed
Student Loans, including all Guarantee
payments and Special Allowance Payments
with respect to Financed Student Loans
(excluding, unless otherwise provided in
a Supplemental Indenture, any federal
interest subsidy payments and Special
Allowance Payments that accrued prior to
the date on which such Student Loans
were Financed), (ii) unless otherwise
provided in a Supplemental Indenture,
proceeds of the resale to a Lender or SLFC
of any Financed Student Loans
pursuant to such Lender's or SLFC's
repurchase obligation under the applicable
Student Loan Purchase Agreement, (iii) all
amounts received as earnings on or
income from Investment Securities in the
Acquisition Fund, the Reserve Fund, the
Administration Fund, the Surplus Fund and
the Note Fund, (iv) all Non-Delivery
Fees, (v) all amounts to be transferred to
the Revenue Fund from the
Indemnification Fund, (vi) any amounts
received by the Trustee pursuant to the
indemnification provisions of any Joint
Sharing Agreement, and (vii) all amounts
to be transferred to the Revenue Fund from
the Alternative Loan Guarantee Fund.
Pending
transfers from the Revenue Fund, the moneys therein shall be
invested in Investment Securities as
provided in Section 4.11 hereof, and any
earnings on or income from said investments
shall be retained therein.
The Corporation
shall cause all amounts required to be credited to the
Revenue Fund, upon receipt by the
Corporation, a Lender, SLFC, a Transferor or a
Servicer, or any agent thereof, as the case
may be, to be forthwith transmitted
to the Trustee or any Deposit Agent
therefor for such credit. On each Monthly
Payment Date and on any other date on which
the Balance in the Note Fund is not
sufficient to pay all amounts payable
therefrom on such date, all such moneys
theretofore received and then held by a
Deposit Agent shall be transferred to
the Trustee. The Trustee shall deposit and
credit all revenues to be credited to
the Revenue Fund as follows: all such
revenues received as payments of or in
respect of principal of Financed Student
Loans shall be credited by the Trustee
forthwith upon receipt to the Repayment
Account; and all other revenues and
amounts, including all such revenues
received as payments o
