INDENTURE OF TRUST

Exhibit 4.1

 

INDENTURE OF TRUST

 

between

 

EDUCATION LOANS INCORPORATED

 

and

 

U.S. BANK NATIONAL ASSOCIATION

 

as Trustee

 

 

Dated as of August 1, 2004

 

 

CROSS REFERENCE TABLE ¹

 

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.

 

TABLE OF CONTENTS

 

 

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THIS INDENTURE OF TRUST, dated as of August 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

 

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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

 

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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:

 

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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

 

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(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

 

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(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.

 

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“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

 

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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

 

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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 percent (5.0%) per annum; and (4) a reinvestment rate of five percent (5.0%) 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

 

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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

 

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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.

 

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“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 Notes.

 

“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 Notes.

 

“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.

 

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“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

 

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Secretary of Education, (3) United Student Aid Funds, Inc., and its successors and assigns, including, without limitation, the 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.

 

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“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

 

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June 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

 

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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.

 

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“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;

 

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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

 

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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.

 

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“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.

 

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“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.

 

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“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

 

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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.

 

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“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 August 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.

 

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“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.

 

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“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,

 

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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.

 

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“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 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

 

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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

 

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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

 

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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

 

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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:

 

“Commission” means the Securities and Exchange Commission.

 

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“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.

 

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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             

 

 

 

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

 

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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 August 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

 

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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

 

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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

 

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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.

 

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IN WITNESS WHEREOF, the Corporation has caused this Note to be executed in its name by the facsimile signatures of its President and 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]

 

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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:

 

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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

 

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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.

 

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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

 

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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

 

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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.

 

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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

 

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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.

 

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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

 

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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), (f) to make transfers to the Alternative Loan Guarantee Fund, as provided in the following paragraph) or (g) 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.

 

To the extent that an Alternative Loan Financed from the Acquisition Fund became a Liquidated Alternative Loan, amounts were withdrawn from the Alternative Loan Guarantee Fund in respect of principal and accrued interest thereon, and thereafter all delinquent payments of principal and interest due and payable thereon were received from the obligor, the Trustee, upon receipt of a Corporation Order so directing it to do so, shall transfer from the Acquisition Fund to the Alternative Loan Guarantee Fund an amount equal to the lesser of (i) the Principal Balance of such Alternative Loan, plus interest accrued thereon but not yet due and payable, and

 

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(ii) the amount that was withdrawn from the Alternative Loan Guarantee Fund in respect of such Alternative Loan.

 

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 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.

 

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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 and provided that such exchange shall not cause any change to the overall character and composition of the most recent Cash Flow Projections provided to the Rating Agencies) 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 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, (B) written confirmation from each Rating Agency that such sale and exchange will not adversely affect any rating or ratings then applicable to any Unenhanced Notes and (C) 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.

 

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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 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

 

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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 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

 

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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 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

 

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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 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.

 

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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 of or in respect of interest on or Special Allowance Payments with respect to Financed Student Loans, income from Investment Securities and Non-Delivery Fees, shall be credited by the Trustee forthwith upon receipt to the Income Account.

 

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, the Trustee shall, from the moneys received since the preceding Monthly Payment Date in the Repayment Account, (1) make any periodic rebate fee payments required to be made to the Secretary of Education in connection with Financed Student Loans, and (2) transfer the remainder of such moneys, as follows:

 

First, to the credit of the Indemnification Fund to the extent and in the manner provided in Section 4.5 hereof; second, to the credit of the Administration Fund, to the extent necessary to increase the Balance therein to the amount required for the payment of all Administrative Expenses and Note Fees due during the next thirty (30) days; third, to the credit of 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 (except a Corporation Swap Payment due under a Senior Swap Agreement as a result of a Termination Event, as defined in such Swap Agreement, which is not an Eligible Termination Event); fourth, to the credit of 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 the Class A Notes or the payment of Other Senior Obligations payable therefrom; fifth, to the credit of 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; sixth, to the credit of the Acquisition Fund to the extent and in the manner provided in Section 4.2 hereof; seventh, to the credit of 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 (except a Corporation Swap Payment due under a Subordinate Swap Agreement as a result of a Termination Event, as defined in such Swap Agreement, which is not an Eligible Termination Event); eighth, to the credit of 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

 

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principal or the purchase price of Class B Notes or th