Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
NELNET STUDENT LOAN
FUNDING, LLC
By: NELNET STUDENT LOAN FUNDING MANAGEMENT
CORPORATION, as Manager
By: /s/ Jeffrey Noordhoek
-----------------------------------
Jeffrey Noordhoek
Senior Vice President
Dated: September 29, 2004
Citigroup Global Markets Inc.
388 Greenwich Street, 35th Floor
New York, NY 10013
J.P. Morgan Securities Inc.
270 Park Avenue
New York, NY 10017
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, NY 10036
as Underwriters
Ladies and Gentlemen:
Nelnet Student Loan Funding, LLC, a Delaware limited liability company
("Nelnet Funding") proposes to cause Nelnet Student Loan Trust 2004-4, a
Delaware statutory trust (the "Trust"), to sell to Citigroup Global Markets
Inc., J.P. Morgan Securities Inc. and Morgan Stanley & Co. Incorporated (each an
"Underwriter", and collectively the "Underwriters"), pursuant to the terms of
this Underwriting Agreement, $2,020,876,000 aggregate principal amount of the
Trust's Student Loan Asset-Backed Class A-1, Class A-2, Class A-3, Class A-4,
Class A-5 and Class B Notes (the "Notes") in the classes and initial principal
amounts set forth on Schedule A hereto. Zions First National Bank, a national
banking association, will act as eligible lender trustee on behalf of the Trust
(the "Eligible Lender Trustee"). The Notes will be issued under an Indenture of
Trust, dated as of September 1, 2004 (the "Indenture"), between the Trust and
Zions First National Bank, a national banking association, as indenture trustee
(the "Indenture Trustee"). Upon issuance, the Notes will be secured by, among
other things, Financed Eligible Loans (as defined in the Indenture) pledged to
the Trustee and described in the Prospectus (as defined below). The Financed
Eligible Loans will be master serviced by National Education Loan Network, Inc.
("NELN"), f/k/a Nelnet, Inc., a Nevada Corporation, pursuant to a Master
Servicing Agreement, dated as of September 1, 2004 (the "Servicing Agreement"),
among NELN, as master servicer and administrator, Nelnet Funding and the Trust.
NELN has entered into a loan subservicing agreement with Nelnet, Inc.
("Nelnet"), f/k/a Nelnet Loan Services, Inc., a Nebraska Corporation, dated as
of September 1, 2004 (the "Subservicing Agreement") pursuant to which Nelnet
will act as subservicer with respect to all of the Financed Eligible Loans.
This Agreement, the loan purchase agreement, dated as of September 1,
2004 between the Trust and Nelnet Funding (along with the related Loan Transfer
Addendum, the "Nelnet Funding Purchase Agreement"), the loan purchase agreement,
dated as of September 1, 2004 between Nelnet Funding and Nelnet Education Loan
Funding, Inc. ("NELF") (along with the related Loan Transfer Addendum, the "NELF
Purchase Agreement"), the loan purchase agreement, dated as of September 1, 2004
between NHELP III, Inc. ("NHELP III") and Nelnet Funding (along with the related
Loan Transfer Addendum, the "NHELP III Purchase Agreement"), the loan purchase
agreement, dated as of September 1, 2004 between EMT Corp. ("EMT," and together
with NELF and NHELP III, the "Sellers") and Nelnet Funding (along with the
related Loan Transfer Addendum, the "EMT Purchase Agreement" and, together with
the Nelnet Funding Purchase Agreement, the NHELP III Purchase Agreement and the
NELF Purchase Agreement, the "Purchase Agreements"), the trust agreement, dated
as of September 1, 2004, between Wilmington Trust Company, as Delaware trustee
(the "Delaware Trustee") and Nelnet Funding, as initial certificateholder and
sponsor (the "Trust Agreement"), the administration agreement, dated as of
September 1, 2004, among the Trust, the Delaware Trustee, the Indenture Trustee
and NELN, as administrator (the "Administration Agreement"), the eligible lender
trust agreement, dated as of September 1, 2004, between Zions First National
Bank (in such capacity the "Eligible Lender Trustee", and together with the
Indenture Trustee, the "Trustee") and Nelnet Funding (the "Nelnet Funding
Eligible Lender Agreement"), the Eligible Lender Trust Agreement, dated as of
September 1, 2004, between the Eligible Lender Trustee and the Trust (the "Trust
Eligible Lender Agreement", and together with the Nelnet Funding Eligible Lender
Agreement, the "Eligible Lender Agreements"), the custodian agreement, dated
September 1, 2004, among the Trust, the Trustee and Nelnet, as custodian (the
"Custodian Agreement"), the indemnity agreement, dated as of September 22, 2004,
among Nelnet and the Underwriters (the "Indemnity Agreement"), the Servicing
Agreement, the Subservicing Agreement and the Indenture shall collectively
hereinafter be referred to as the "Basic Documents."
Capitalized terms used herein without definition shall have the
meanings ascribed to them in the Indenture or the Prospectus.
Nelnet Funding proposes to cause the Trust, upon the terms and
conditions set forth herein, to sell to each of the Underwriters on the Closing
Date (as hereinafter defined) the aggregate principal amount of each Class of
Notes set forth next to the name of each Underwriter on Schedule A at the rates
and maturities listed on Schedule B hereto.
Nelnet Funding wishes to confirm as follows this Agreement with the
Underwriters in connection with the purchase and resale of the Notes.
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1. Agreements to Sell, Purchase and Resell. (a) On the Closing Date,
Nelnet Funding hereby agrees, subject to all the terms and conditions set forth
herein, to cause the Trust to sell to each of the Underwriters and, upon the
basis of the representations, warranties and agreements of Nelnet Funding herein
contained and subject to all the terms and conditions set forth herein, on the
Closing Date each of the Underwriters severally and not jointly agrees to
purchase from the Trust, such principal amount of each Class of the Notes to be
sold on the Closing Date at such respective purchase prices as are set forth
next to the name of each Underwriter on Schedule A hereto.
(b) It is understood that the Underwriters propose to offer
the Notes for sale to the public (which may include selected dealers) as set
forth in the Prospectus.
2. Delivery of the Notes and Payment Therefor. Delivery to the
Underwriters of and payment for the Notes shall be made at the office of Stroock
& Stroock & Lavan LLP, New York, New York, at 1:00 p.m., New York City time, on
September 29, 2004 (the "Closing Date"). The place of such closing and the
Closing Date may be varied by agreement between the Underwriters and Nelnet
Funding.
On the Closing Date, the Notes will be delivered to the Underwriters
against payment of the purchase price therefor to the Trust in Federal Funds, by
wire transfer to an account at a bank acceptable to the Underwriters, or such
other form of payment as to which the parties may agree. Unless otherwise agreed
to by Nelnet Funding and the Underwriters, each Class of Notes will be evidenced
by a single global security in definitive form deposited with the Trustee as
custodian for DTC and/or by additional definitive securities, and will be
registered, in the case of the global Classes of Notes, in the name of Cede &
Co. as nominee of The Depository Trust Company ("DTC"), and in the other cases,
in such names and in such denominations as the Underwriters shall request prior
to 1:00 p.m., New York City time, no later than the business day preceding the
Closing Date. The Notes to be delivered to the Underwriters shall be made
available to the Underwriters in Denver, Colorado, for inspection and packaging
not later than 9:30 a.m., Denver time, on the business day immediately preceding
the Closing Date.
3. Representations and Warranties of Nelnet Funding. Nelnet Funding
represents and warrants to each of the Underwriters that:
(a) A registration statement on Form S-3 (No 333-108649),
including a prospectus and such amendments thereto as may have been
required to the date hereof, relating to the Notes and the offering
thereof from time to time in accordance with Rule 415 under the
Securities Act of 1933, as amended (the "Act"), has been filed with the
Securities and Exchange Commission (the "SEC" or the "Commission") and
such registration statement, as amended, has become effective; such
registration statement, as amended, and the prospectus relating to the
sale of the Notes offered thereby constituting a part thereof, as from
time to time amended or supplemented (including the base prospectus,
any prospectus supplement filed with the Commission pursuant to Rule
424(b) under the Act, the information deemed to be a part thereof
pursuant to Rule 430A(b) under the Act, and the information
incorporated by reference therein) are respectively referred to herein
as the "Registration Statement" and the "Prospectus" respectively; and
the conditions to the use of a registration statement on Form S-3 under
the Act, as set forth in the General Instructions to Form S-3, and the
conditions of Rule 415 under the Act, have been satisfied with respect
to the Registration Statement.
3
(b) On the effective date of the Registration Statement, the
Registration Statement and the Prospectus conformed in all respects to
the requirements of the Act, the rules and regulations of the SEC (the
"Rules and Regulations") and the Trust Indenture Act of 1939, as
amended, and the rules and regulations thereunder (the "Trust Indenture
Act"), and, except with respect to information omitted pursuant to Rule
430A of the Act, did not include any untrue statement of a material
fact or, in the case of the Registration Statement, omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading and, in the case of the Prospectus,
omit to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and on the
date of this Agreement and on the Closing Date, the Registration
Statement and the Prospectus will conform in all respects to the
requirements of the Act, the Rules and Regulations and the Trust
Indenture Act, and neither of such documents included or will include
any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that the foregoing does not
apply to statements in or omissions from the Registration Statement or
the Prospectus based upon written information furnished to Nelnet
Funding by the Underwriters, specifically for use therein (it being
understood that the only such information is the information specified
in Section 11 hereof). Nelnet Funding and the Underwriters acknowledge
that no Computational Materials (as defined in the No-Action Letter of
May 20, 1994 issued by the Commission to Kidder, Peabody Acceptance
Corporation I, Kidder, Peabody & Co. Incorporated and Kidder Structured
Asset Corporation, as made applicable to other issuers and underwriters
by the Commission in response to the request of the Public Securities
Association dated May 24, 1994, and the No-Action Letter of February
17, 1995 issued by the Commission to the Public Securities Association)
were delivered by or on behalf of Nelnet Funding to prospective
purchasers of the Notes.
(c) The Commission has not issued and, to the best knowledge
of Nelnet Funding, is not threatening to issue any order preventing or
suspending the use of the Registration Statement.
(d) As of the Closing Date, each consent, approval,
authorization or order of, or filing with, any court or governmental
agency or body which is required to be obtained or made by Nelnet
Funding or its affiliates for the consummation of the transactions
contemplated by this Agreement shall have been obtained, except as
otherwise provided in the Basic Documents.
(e) The Indenture has been duly and validly authorized by
Nelnet Funding and, upon its execution and delivery by the Trust and
assuming due authorization, execution and delivery by the Trustee, will
be a valid and binding agreement of the Trust, enforceable in
accordance with its terms, except as enforcement thereof may be limited
by bankruptcy, insolvency or other similar laws affecting creditors'
rights generally and the Indenture will conform in all material
respects to the description thereof in the Prospectus. The Indenture
has been duly qualified under the Trust Indenture Act with respect to
the Notes.
4
(f) The Notes have been duly authorized by the Trust and the
Notes to be issued on the Closing Date, when executed by the Trust and
authenticated by the Trustee in accordance with the Indenture, and
delivered to the Underwriters against payment therefor in accordance
with the terms hereof, will have been validly issued and delivered, and
will constitute valid and binding obligations of the Trust entitled to
the benefits of the Indenture and enforceable in accordance with their
terms, except as enforcement thereof may be limited by bankruptcy,
insolvency, moratorium, fraudulent conveyance or other similar laws
relating to or affecting creditors' rights generally and court
decisions with respect thereto, and the Notes will conform in all
material respects to the description thereof in the Prospectus.
(g) Nelnet Funding is a limited liability company duly
organized, validly existing and in good standing under the laws of the
State of Delaware with full power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and as conducted on the date hereof, and is duly registered
and qualified to conduct its business and is in good standing in each
jurisdiction or place where the nature of its properties or the conduct
of its business requires such registration or qualification, except
where the failure so to register or qualify does not have a material
adverse effect on the condition (financial or other), business,
prospects, properties, net worth or results of operations of Nelnet
Funding.
(h) Other than as contemplated by this Agreement or as
disclosed in the Prospectus, there is no broker, finder or other party
that is entitled to receive from Nelnet Funding or any of its
affiliates any brokerage or finder's fee or other fee or commission as
a result of any of the transactions contemplated by this Agreement.
(i) There are no legal or governmental proceedings pending or
threatened or, to the knowledge of Nelnet Funding contemplated, against
Nelnet Funding, or to which Nelnet Funding or any of its properties is
subject, that are not disclosed in the Prospectus and which, if
adversely decided, would individually or in the aggregate have a
material adverse effect on the condition (financial or other),
business, properties or results of operations of Nelnet Funding, or
would materially and adversely affect the ability of Nelnet Funding, or
the Trust to perform its obligations under this Agreement and the other
Basic Documents or otherwise materially affect the issuance of the
Notes or the consummation of the transactions contemplated hereby or by
the Basic Documents.
(j) Neither the offer, sale or delivery of the Notes by the
Trust nor the execution, delivery or performance of this Agreement or
the Basic Documents by Nelnet Funding or the Trust, nor the
consummation by Nelnet Funding or the Trust of the transactions
contemplated hereby or thereby (i) requires or will require any
consent, approval, authorization or other order of, or registration or
filing with, any court, regulatory body, administrative agency or other
governmental body, agency or official (except for compliance with the
securities or Blue Sky laws of various jurisdictions, the qualification
of the Indenture under the Trust Indenture Act and such other consents,
approvals or authorizations as shall have been obtained prior to the
Closing Date) or conflicts or will conflict with or constitutes or will
constitute a breach of, or a default under, the organizational
documents of Nelnet Funding or the Trust or (ii) conflicts or will
conflict with or constitutes or will constitute a breach of, or a
default under, in any material respect, any agreement, indenture, lease
5
or other instrument to which Nelnet Funding or the Trust is a party or
by which Nelnet Funding or the Trust or any of its respective
properties may be bound, or violates or will violate in any material
respect any statute, law, regulation or filing or judgment, injunction,
order or decree applicable to Nelnet Funding or the Trust or any of its
respective properties, or will result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of Nelnet
Funding or the Trust pursuant to the terms of any agreement or
instrument to which it is a party or by which it may be bound or to
which any of its properties is subject other than as contemplated by
the Basic Documents.
(k) Nelnet Funding has all requisite power and authority to
execute, deliver and perform its obligations under this Agreement and
the other Basic Documents to which it is a party; the execution and
delivery of, and the performance by Nelnet Funding of its obligations
under, this Agreement and the other Basic Documents to which it is a
party have been duly and validly authorized by Nelnet Funding and this
Agreement and the other Basic Documents have been duly executed and
delivered by Nelnet Funding and constitute the valid and legally
binding agreements of Nelnet Funding, enforceable against Nelnet
Funding in accordance with their respective terms, except as the
enforcement hereof and thereof may be limited by bankruptcy,
insolvency, moratorium, fraudulent conveyance or other similar laws
relating to or affecting creditors' rights generally and court
decisions with respect thereto and subject to the applicability of
general principles of equity, and except as rights to indemnity and
contribution hereunder and thereunder may be limited by Federal or
state securities laws or principles of public policy.
(l) The statements set forth in the Prospectus under the
caption "Description of the Notes" insofar as they purport to
constitute a summary of the terms of the Notes, are accurate, complete
and fair.
(m) Nelnet Funding's assignment and delivery of Financed
Eligible Loans to the order of the Trustee on behalf of the Trust
pursuant to the Purchase Agreements will vest in the Trustee on behalf
of the Trust all of Nelnet Funding's right, title and interest therein,
subject to no prior lien, mortgage, security interest, pledge, adverse
claim, charge or other encumbrance.
(n) The Trust's assignment of the Financed Eligible Loans to
the Trustee pursuant to the Indenture will vest in the Trustee, for the
benefit of the Noteholders, a first priority perfected security
interest therein, subject to no prior lien, mortgage, security
interest, pledge, adverse claim, charge or other encumbrance.
(o) The Trust is not, nor as a result of the issuance and sale
of the Notes as contemplated hereunder will it become, subject to
registration as an "investment company" under the Investment Company
Act of 1940, as amended.
(p) The representations and warranties made by Nelnet Funding
in any Basic Document to which Nelnet Funding is a party and made in
any Officer's Certificate of Nelnet Funding or the Trust will be true
and correct at the time made and on and as of the Closing Date.
6
(q) Since the date of the Prospectus, no material adverse
change or any development involving a prospective material adverse
change in, or affecting particularly the business or properties of,
Nelnet Funding has occurred.
4. Agreements of Nelnet Funding. Nelnet Funding agrees with each of the
Underwriters as follows:
(a) Nelnet Funding will prepare a supplement to the Prospectus
setting forth the amount of the Notes covered thereby and the terms
thereof not otherwise specified in the Prospectus, the price at which
the Notes are to be purchased by the Underwriters, either the initial
public offering price or the method by which the price at which the
Notes are to be sold will be determined, the selling concessions and
reallowances, if any, and such other information as the Underwriters
and Nelnet Funding deem appropriate in connection with the offering of
the Notes, and Nelnet Funding will timely file such supplement to the
Prospectus with the SEC pursuant to Rule 424(b) under the Act, but
Nelnet Funding will not file any amendments to the Registration
Statement as in effect with respect to the Notes or any amendments or
supplements to the Prospectus, unless it shall first have delivered
copies of such amendments or supplements to the Underwriters, with
reasonable opportunity to comment on such proposed amendment or
supplement or if the Underwriters or their counsel shall have
reasonably objected thereto promptly after receipt thereof; Nelnet
Funding will immediately advise the Underwriters or the Underwriters'
counsel (i) when notice is received from the SEC that any
post-effective amendment to the Registration Statement has become or
will become effective and (ii) of any order or communication suspending
or preventing, or threatening to suspend or prevent, the offer and sale
of the Notes or of any proceedings or examinations that may lead to
such an order or communication, whether by or of the SEC or any
authority administering any state securities or Blue Sky law, as soon
as Nelnet Funding is advised thereof, and will use its best efforts to
prevent the issuance of any such order or communication and to obtain
as soon as possible its lifting, if issued.
(b) If, at any time when the Prospectus relating to the Notes
is required to be delivered under the Act, any event occurs as a result
of which the Prospectus as then amended or supplemented would include
an untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading, or if it is necessary at any time to amend or
supplement the Prospectus to comply with the Act or the Rules and
Regulations, Nelnet Funding promptly will notify each of the
Underwriters of such event and will promptly prepare and file with the
SEC, at its own expense, an amendment or supplement to such Prospectus
that will correct such statement or omission or an amendment that will
effect such compliance. Neither the Underwriters' consent to, nor the
Underwriters' delivery of, any such amendment or supplement shall
constitute a waiver of any of the conditions set forth in Section 7
hereof.
7
(c) Nelnet Funding will immediately inform the Underwriters
(i) of the receipt by Nelnet Funding of any communication from the SEC
or any state securities authority concerning the offering or sale of
the Notes and (ii) of any threatened lawsuit or proceeding or of the
commencement of any lawsuit or proceeding to which Nelnet Funding is a
party relating to the offering or sale of the Notes.
(d) Nelnet Funding will furnish to the Underwriters, without
charge, copies of the Registration Statement (including all documents
and exhibits thereto or incorporated by reference therein), the
Prospectus, and all amendments and supplements to such documents
relating to the Notes, in each case as soon as reasonably available in
such quantities as the Underwriters may reasonably request.
(e) No amendment or supplement will be made to the
Registration Statement or Prospectus (i) prior to having furnished the
Underwriters with a copy of the proposed form of the amendment or
supplement and giving the Underwriters a reasonable opportunity to
review the same or (ii) in a manner to which the Underwriters or their
counsel shall reasonably object.
(f) Nelnet Funding will cooperate with the Underwriters and
with their counsel in connection with the qualification of, or
procurement of exemptions with respect to, the Notes for offering and
sale by the Underwriters and by dealers under the securities or Blue
Sky laws of such jurisdictions as the Underwriters may designate and
will file such consents to service of process or other documents
necessary or appropriate in order to effect such qualification or
exemptions; provided that in no event shall Nelnet Funding be obligated
to qualify to do business in any jurisdiction where it is not now so
qualified or to take any action which would subject it to service of
process in suits, other than those arising out of the offering or sale
of the Notes, in any jurisdiction where it is not now so subject.
(g) Nelnet Funding consents to the use, in accordance with the
securities or Blue Sky laws of such jurisdictions in which the Notes
are offered by the Underwriters and by dealers, of the Prospectus
furnished by Nelnet Funding.
(h) To the extent, if any, that the rating or ratings provided
with respect to the Notes by the rating agency or agencies that
initially rate the Notes is conditional upon the furnishing of
documents or the taking of any other actions by Nelnet Funding, Nelnet
Funding shall cause to be furnished such documents and such other
actions to be taken.
(i) So long as any of the Notes are outstanding, Nelnet
Funding will furnish to the Underwriters (i) as soon as available, a
copy of each document relating to the Notes required to be filed with
the SEC pursuant to the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), or any order of the SEC thereunder, and (ii) such
other information concerning Nelnet Funding or the Trust as the
Underwriters may request from time to time.
8
(j) If this Agreement shall terminate or shall be terminated
after execution and delivery pursuant to any provisions hereof
(otherwise than by notice given by the Underwriters terminating this
Agreement pursuant to Section 9 or Section 10 hereof) or if this
Agreement shall be terminated by the Underwriters because of any
failure or refusal on the part of Nelnet Funding to comply with the
terms or fulfill any of the conditions of this Agreement, Nelnet
Funding agrees to reimburse the Underwriters for all out-of-pocket
expenses (including fees and expenses of their counsel) reasonably
incurred by each of them in connection herewith, but without any
further obligation on the part of Nelnet Funding for loss of profits or
otherwise (except for the indemnity and contribution provisions of
Section 6 hereof).
(k) The net proceeds from the sale of the Notes hereunder will
be applied substantially in accordance with the description set forth
in the Prospectus.
(1) Except as stated in this Agreement and in the Prospectus,
Nelnet Funding has not taken, nor will it take, directly or indirectly,
any action designed to or that might reasonably be expected to cause or
result in stabilization or manipulation of the price of the Notes to
facilitate the sale or resale of the Notes.
(m) For a period from the date of this Agreement until the
retirement of the Notes, Nelnet Funding will deliver to you the annual
statements of compliance and the annual independent certified public
accountants' reports furnished to the Trustee pursuant to the Servicing
Agreement as soon as such statements and reports are furnished to the
Trustee.
(n) On or before the Closing Date, Nelnet Funding shall mark
its accounting and other records, if any, relating to the Financed
Eligible Loans and shall cause NELN and each Seller to mark their
respective computer records relating to the Financed Eligible Loans to
show the absolute ownership by the Trustee, as eligible lender of, and
the interest of the Trust in, the Financed Eligible Loans, and Nelnet
Funding shall not take, or shall permit any other person to take, any
action inconsistent with the ownership of, and the interest of the
Trust in, the Financed Eligible Loans, other than as permitted by the
Basic Documents.
(o) For the period beginning on the date of this Agreement and
ending 90 days hereafter, none of Nelnet Funding and any entity
affiliated, directly or indirectly, with Nelnet Funding will, without
the prior written notice to the Underwriters, offer to sell or sell
notes (other than the Notes) collateralized by FFELP Loans; provided,
however, that this shall not be construed to prevent the sale of FFELP
Loans by Nelnet Funding.
(p) If, at the time the Registration Statement became
effective, any information shall have been omitted therefrom in
reliance upon Rule 430A under the 1933 Act, then, immediately following
the execution of this Agreement, Nelnet Funding will prepare, and file
or transmit for filing with the Commission in accordance with such Rule
430A and Rule 424(b) under the 1933 Act, copies of an amended
Prospectus containing all information so omitted.
9
(q) As soon as practicable, but not later than 16 months after
the date of this Agreement, Nelnet Funding will make generally
available to its securityholders an earnings statement covering a
period of at least 12 months beginning after the later of (i) the
effective date of the Registration Statement and (ii) the effective
date of the most recent post-effective amendment to the Registration
Statement to become effective prior to the date of this Agreement.
(r) Nelnet Funding will cooperate with the Underwriters in
listing and maintaining the Class A Notes on the Irish Stock Exchange.
5. Representations and Warranties of the Underwriters. Each of the
Underwriters, severally and not jointly, hereby represents and warrants to and
agrees with Nelnet Funding, severally and not jointly, that (A) it has not
offered or sold and will not offer or sell any Notes to persons in the United
Kingdom prior to the expiration of the period of six months from the issue date
of the Notes except to persons whose ordinary activities involve them in
acquiring, holding, managing or disposing of investments (as principal or agent)
for the purposes of their business or otherwise in circumstances which have not
resulted and will not result in an offer to the public in the United Kingdom
within the meaning of the Public Offers of Securities Regulations 1965, as
amended; (B) it has only communicated or caused to be communicated any
invitation or inducement to engage in investment activity (within the meaning of
section 21 if the Financial Services Markets Act 2000 (the "FSMA")), received by
it in connection with the issue or sale of the Notes in circumstances in which
section 21(1) of the FSMA does not apply to the Trust; and (C) it has complied,
and will comply, in all material respects, with all applicable provisions of the
FSMA with respect to anything done by it in relation to the Notes in, from or
otherwise involving the United Kingdom. Nelnet Funding represents and agrees
that it has been informed of the existence of the FSMA stabilizing guidance
contained in Section MAR 2, Ann 2G of the FSMA Handbook (the Handbook of rules
and guidance issued by the Financial Services Authority).
6. Indemnification and Contribution. (a) Nelnet Funding agrees to
indemnify and hold harmless each of the Underwriters and each person, if any,
who controls an Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, from and against any and all losses, claims,
damages, liabilities and expenses (or actions in respect thereof) arising out of
or based upon any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, the Prospectus, or in any
amendment or supplement thereto, or any preliminary prospectus, or in the case
of the Registration Statement or in any amendment or supplement thereto, arising
out of or based upon any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading and in the case of the Prospectus or in any amendment or
supplement thereto, arising out of or based upon any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in light of the
circumstances under which they were made, and will reimburse each Underwriter
for any legal or other expenses reasonably incurred by such Underwriter in
connection with investigating or defending any such loss, claim, damage,
liability, or action as such expenses are incurred, except insofar as such
losses, claims, damages, liabilities or expenses arise out of or are based upon
any untrue statement or omission or alleged untrue statement or omission which
has been made therein or omitted therefrom in reliance upon and in conformity
with the information relating to an Underwriter furnished in writing to Nelnet
10
Funding by such Underwriter expressly for use therein, it being understood that
the only such information furnished by any Underwriter consists of the
information described as such in Section 11 of this Agreement; provided,
however, that the indemnification contained in this paragraph (a) with respect
to any preliminary prospectus shall not inure to the benefit of an Underwriter
(or to the benefit of any person controlling an Underwriter) on account of any
such loss, claim, damage, liability or expense arising from the sale of the of
Notes by an Underwriter to any person if the untrue statement or alleged untrue
statement or omission or alleged omission of a material fact contained in such
preliminary prospectus was corrected in the final Prospectus and such
Underwriter sold Notes to that person without sending or giving at or prior to
the written confirmation of such sale, a copy of the final Prospectus (as then
amended or supplemented but excluding documents incorporated by reference
therein) if Nelnet Funding has previously furnished sufficient copies thereof to
such Underwriter at a time reasonably prior to the date such Notes are sold to
such person. The foregoing indemnity agreement shall be in addition to any
liability which Nelnet Funding may otherwise have.
(b) If any action, suit or proceeding shall be brought against
an Underwriter or any person controlling an Underwriter in respect of
which indemnity may be sought against Nelnet Funding, such Underwriter
or such controlling person shall promptly notify the parties against
whom indemnification is being sought (the "indemnifying parties"), but
the omission so to notify the indemnifying party will not relieve it
from any liability which it may have to any indemnified party under
Sections 6(a) and 6(c) hereof, except to the extent that the
indemnifying party is materially prejudiced by such omission, and in no
event shall the omission so to notify relieve Nelnet Funding from any
liability which it may otherwise have. In case any such action is
brought against any indemnified party and it notifies the indemnifying
party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it may wish,
jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel satisfactory to such indemnified
party (who shall not, except with the consent of the indemnified party,
be counsel to the indemnifying party). The applicable Underwriter or
any such controlling person shall have the right to employ separate
counsel in any such action, suit or proceeding and to participate in
the defense thereof, but the fees and expenses of such counsel shall be
at the expense of such Underwriter or such controlling person unless
(i) the indemnifying parties have agreed in writing to pay such fees
and expenses, (ii) the indemnifying parties have failed to assume the
defense and employ counsel, or (iii) the named parties to any such
action, suit or proceeding (including any impleaded parties) include
both the Underwriter or such controlling person and the indemnifying
parties and the Underwriter or such controlling person shall have been
advised by its counsel that there may be one or more legal defenses
available to it which are different from or additional to or in
conflict with those available to the indemnifying parties and in the
reasonable judgment of such counsel it is advisable for the Underwriter
11
or such controlling person to employ separate counsel (in which case
the indemnifying party shall not have the right to assume the defense
of such action, suit or proceeding on behalf of the Underwriter or such
controlling person). It is understood, however, that the indemnifying
parties shall, in connection with any one such action, suit or
proceeding or separate but substantially similar or related actions,
suits or proceedings in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees
and expenses of only one separate firm of attorneys (in addition to any
local counsel) at any time for each Underwriter and controlling persons
not having actual or potential differing interests with such
Underwriter or among themselves, which firm shall be designated in
writing by such Underwriter, and that all such fees and expenses shall
be reimbursed on a monthly basis as provided in paragraph (a) hereof.
An indemnifying party will not, without the prior written consent of
the indemnified party, settle or compromise or consent to the entry of
any judgment with respect to any pending or threatened claim, action,
suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are
actual or potential parties to such claim or action) unless such
settlement, compromise or consent (i) includes an unconditional release
of each indemnified party from all liability arising out of such claim,
action, suit or proceeding and (ii) does not include a statement as to,
or an admission of fault, culpability or a failure to act by or on
behalf of an indemnified party.
(c) Each Underwriter, severally and not jointly, agrees to
indemnify and hold harmless Nelnet Funding and its directors and
officers, and any person who controls Nelnet Funding within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act, to the same
extent as the indemnity from Nelnet Funding to the Underwriters set
forth in paragraph (a) hereof, but only with respect to information
relating to such Underwriter furnished in writing by such Underwriter
expressly for use in the Registration Statement, the Prospectus, or any
amendment or supplement thereto, or any related preliminary prospectus
therein, it being understood that the only such information furnished
by any Underwriter consists of the information described as such in
Section 11 of this Agreement. If any action, suit or proceeding shall
be brought against Nelnet Funding, any of its directors or officers, or
any such controlling person based on the Registration Statement, the
Prospectus, or any amendment or supplement thereto, or any related
preliminary prospectus therein and in respect of which indemnity may be
sought against an Underwriter pursuant to this paragraph (c), such
Underwriter shall have the rights and duties given to Nelnet Funding by
paragraph (b) above (except that if Nelnet Funding shall have assumed
the defense thereof the Underwriter shall have the option to assume
such defense but shall not be required to do so, but may employ
separate counsel therein and participate in the defense thereof, but
the fees and expenses of such counsel shall be at such Underwriter's
expense), and Nelnet Funding, its directors and officers, and any such
controlling person shall have the rights and duties given to the
Underwriters by paragraph (b) above. The foregoing indemnity agreement
shall be in addition to any liability which the Underwriters may
otherwise have.
(d) If the indemnification provided for in this Section 6 is
unavailable to or insufficient to hold harmless an indemnified party
under paragraphs (a) or (c) hereof in respect of any losses, claims,
damages, liabilities or expenses referred to therein, then an
indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages, liabilities or
expenses (i) in such proportion as is appropriate to reflect the
relative benefits received by Nelnet Funding on the one hand and the
applicable Underwriter on the other hand from the offering of the
Notes, or (ii) if the allocation provided by clause (i) above is not
12
permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above
but also the relative fault of Nelnet Funding on the one hand and the
applicable Underwriter on the other in connection with the statements
or omissions that resulted in such losses, claims, damages, liabilities
or expenses, as well as any other relevant equitable considerations.
The relative benefits received by Nelnet Funding on the one hand and an
Underwriter on the other shall be deemed to be in the same proportion
as the total net proceeds from the offering of the Notes (before
deducting expenses) received by the Trust bear to the total
underwriting discounts and commissions received by such Underwriter.
The relative fault of Nelnet Funding on the one hand and the
Underwriters on the other hand shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material
fact relates to information supplied by Nelnet Funding on the one hand
or by an Underwriter on the other hand and the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
(e) Nelnet Funding and the Underwriters agree that it would
not be just and equitable if contribution pursuant to this Section 6
were determined by a pro rata allocation or by any other method of
allocation that does not take account of the equitable considerations
referred to in paragraph (d) above. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages,
liabilities and expenses referred to in paragraph (d) above shall be
deemed to include, subject to the limitations set forth above, any
legal or other expenses reasonably incurred by such indemnified party
in connection with investigating any claim or defending any such
action, suit or proceeding. Notwithstanding the provisions of this
Section 6, no Underwriter shall be required to contribute any amount in
excess of the amount by which the total underwriting discounts and
commissions received by such Underwriter with respect to the Notes
underwritten by such Underwriter exceed the sum of the amount of any
damages which such Underwriter has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or
alleged omission and the amount of any damages such Underwriter has
been required to pay under the Indemnity Agreement. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters'
obligations in this paragraph (e) to contribute are several in
proportion to their respective underwriting obligations.
(f) Any losses, claims, damages, liabilities or expenses for
which an indemnified party is entitled to indemnification or
contribution under this Section 6 shall be paid by the indemnifying
party to the indemnified party as such losses, claims, damages,
liabilities or expenses are incurred. The indemnity and contribution
agreements contained in this Section 6 and the representations and
warranties of Nelnet Funding and the Underwriters set forth in this
Agreement shall remain operative and in full force and effect,
regardless of (i) any investigation made by or on behalf of the
Underwriters, Nelnet Funding or any person controlling any of them or
their respective directors or officers, (ii) acceptance of any Notes
and payment therefor hereunder, and (iii) any termination of this
Agreement. A successor to the Underwriters, Nelnet Funding or any
person controlling any of them or their respective directors or
officers, shall be entitled to the benefits of the indemnity,
contribution and reimbursement agreements contained in this Section 6.
13
7. Conditions of the Underwriters' Obligations. The several obligations
of the Underwriters to purchase the Notes hereunder on the Closing Date are
subject to the following conditions precedent:
(a) All actions required to be taken and all filings required
to be made by Nelnet Funding under the Act prior to the sale of the
Notes shall have been duly taken or made. At and prior to the Closing
Date, no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose
shall have been instituted or, to the knowledge of Nelnet Funding or
the Underwriters, shall be contemplated by the Commission.
(b) Subsequent to the effective date of this Agreement, there
shall not have occurred (i) any change, or any development or event
involving a prospective change, in or affecting the condition
(financial or other), business, properties, net worth, or results of
operations of Nelnet Funding, NELN, the Sellers or Nelnet (A) not
contemplated by the Registration Statement, or (B) relating to the
matters described in the Prospectus under the heading "The Student Loan
Operations of Nelnet Student Loan Trust 2004-4 - Recent Developments",
which in the opinion of the Underwriters, would materially adversely
affect the market for the Notes, (ii) the withdrawal or any downgrading
in the long term counterparty rating of Nelnet below "BBB+" by S&P, or
any public announcement that such organization has under surveillance
or review its long term counterparty rating of Nelnet (other than an
announcement with positive implications of a possible upgrading, and no
implication of a possible downgrading, of such rating), (iii) any
downgrading in the rating of any debt securities of trusts sponsored by
Nelnet Funding, NELN, the Sellers or Nelnet by any nationally
recognized statistical rating organization or any public announcement
that any such organization has under surveillance or review its rating
of any debt securities of trusts sponsored by Nelnet Funding, NELN, the
Sellers or Nelnet (other than an announcement with positive
implications of a possible upgrading, and no implication of a possible
downgrading, of such rating), or (iv) any event or development which
makes any statement made in the Registration Statement or Prospectus
untrue or which, in the opinion of Nelnet Funding and its counsel or
the Underwriters and their counsel, requires the filing of any
amendment to or change in the Registration Statement or Prospectus in
order to state a material fact required by any law to be stated therein
or necessary in order to make the statements therein not misleading, if
amending or supplementing the Registration Statement or Prospectus to
reflect such event or development would, in the opinion of the
Underwriters, materially adversely affect the market for the Notes.
(c) You shall have received an opinion addressed to you of
Kutak Rock LLP, in its capacity as counsel to the Trust, dated the
Closing Date, in form and substance satisfactory to you and your
counsel with respect to the Nelnet Trust Purchase Agreement, the
Servicing Agreement, the Indenture, the Trust Eligible Lender
Agreement, the Administration Agreement, the Custodian Agreement and
this Agreement and to the validity of the Notes and such related
matters as you shall reasonably request. In addition, you shall have
received an opinion addressed to you of Kutak Rock LLP, in its capacity
as counsel for the Trust, in form and substance satisfactory to you and
your counsel, concerning "true sale," "non-consolidation" and "first
perfected security interest" and certain other issues with respect to
the transfer of the Financed Eligible Loans from the Sellers to Nelnet
Funding, from Nelnet Funding to the Trust and from the Trust to the
Trustee.
(d) You shall have received an opinion addressed to you of
Kutak Rock LLP, in its capacity as counsel for Nelnet Funding and the
Trust, dated the Closing Date, in form and substance satisfactory to
you and your counsel to the effect that the statements in the
14
Prospectus under the headings "Federal Income Tax Consequences" and
"ERISA Considerations", to the extent that they constitute statements
of matters of law or legal conclusions with respect thereto, have been
prepared or reviewed by such counsel and are correct in all material
respects.
(e) You shall have received an opinion addressed to you of
Kutak Rock LLP, in its capacity as counsel for Nelnet Funding and the
Trust, dated the Closing Date, in form and substance satisfactory to
you and your counsel with respect to the character of the Notes for
federal tax purposes.
(f) You shall have received an opinion addressed to you of
Stroock & Stroock & Lavan LLP, in its capacity as Underwriters'
Counsel, dated the Closing Date, in form and substance satisfactory to
you.
(g) You shall have received an opinion addressed to you of
Ballard Spahr Andrews & Ingersoll LLP, in its capacity as counsel for
Nelnet Funding and the Trust, dated the Closing Date in form and
substance satisfactory to you and your counsel with respect to the
Prospectus and the Registration Statement and certain matters arising
under the Act, the Trust Indenture Act of 1939, as amended, and the
Investment Company Act of 1940, as amended.
(h) You shall have received opinions addressed to you of
Perry, Guthery, Haase & Gessford, P.C. in their capacity as counsel to
NELN, as master servicer and administrator, Nelnet, Nelnet Funding and
each of the Sellers, each dated the Closing Date and satisfactory in
form and substance to you and your counsel, to the effect that:
(i) Each of NELN, Nelnet and each of the Sellers is a
corporation, and Nelnet Funding is a limited liability
company, in good standing under the laws of their respective
states of incorporation or organization; each having the full
power and authority (corporate and other) to own its
properties and conduct its business, as presently conducted by
it, and to enter into and perform its obligations under each
of the Basic Documents to which it is a party.
(ii) The Purchase Agreements have been duly
authorized, executed and delivered by the respective Seller,
as applicable, the Purchase Agreements, the Trust Agreement,
the Servicing Agreement, the Nelnet Funding Eligible Lender
Agreement and this Agreement have been duly authorized,
executed and delivered by Nelnet Funding, the Administration
Agreement, the Servicing Agreement and the Nelnet Subservicing
Agreement have been duly authorized, executed and delivered by
NELN and the Subservicing Agreement, the Indemnity Agreement
and the Custodian Agreement have been duly authorized,
executed and delivered by Nelnet and each such agreement is
the legal, valid and binding obligations of the respective
Seller, Nelnet Funding, NELN and Nelnet, as the case may be,
enforceable against each such Seller, Nelnet Funding, NELN and
Nelnet, as the case may be, in accordance with their
respective terms, except (x) the enforceability thereof may be
subject to bankruptcy, insolvency, reorganization, moratorium
or other similar laws now or hereafter in effect relating to
creditors' rights and (y) remedy of specific performance and
injunctive and other forms of equitable relief may be subject
to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.
(iii) Neither the execution and delivery by NELN of
the Administration Agreement, the Servicing Agreement or the
Subservicing Agreement, or the execution and delivery by
Nelnet Funding of the Purchase Agreements, the Trust
Agreement, the Servicing Agreement, the Nelnet Funding
Eligible Lender Agreement or this Agreement, or the execution
by each Seller of the respective Purchase Agreement, or the
execution and delivery by Nelnet of the Subservicing
Agreement, the Indemnity Agreement or the Custodian Agreement,
nor the consummation by NELN, Nelnet Funding, each Seller or
Nelnet of the transactions contemplated therein nor the
15
fulfillment of the terms thereof by NELN, Nelnet Funding, each
Seller or Nelnet will conflict with, result in a breach,
violation or acceleration of, or constitute a default under,
any term or provision of the by-laws or limited liability
company agreement, as the case may be, of NELN, Nelnet
Funding, each Seller or Nelnet or of any indenture or other
agreement or instrument to which NELN, Nelnet Funding, any
Seller or Nelnet is a party or by which NELN, Nelnet Funding,
any Seller or Nelnet is bound, or result in a violation of or
contravene the terms of any statute, order or regulation
applicable to NELN, Nelnet Funding, any Seller or Nelnet of
any court, regulatory body, administrative agency or
governmental body having jurisdiction over NELN, Nelnet
Funding, any Seller or Nelnet.
(iv) There are no actions, proceedings or
investigations pending or, to the best of such counsel's
knowledge after due inquiry and reasonable investigation,
threatened against NELN, Nelnet Funding, any Seller or Nelnet
before or by any governmental authority that might materially
and adversely affect the performance by NELN, Nelnet Funding,
any Seller or Nelnet of its obligations under, or the validity
or enforceability of, any Basic Documents to which it is a
party.
(v) Nothing has come to such counsel's attention that
would lead such counsel to believe that the representations
and warranties of NELN contained in the Administration
Agreement, the Servicing Agreement or the Subservicing
Agreement, or the representations and warranties of Nelnet
Funding and the Sellers in the Purchase Agreements, the Trust
Agreement, the Servicing Agreement, the Nelnet Funding
Eligible Lender Trust Agreement or this Agreement, or the
representations and warranties of the Sellers contained in the
Purchase Agreements, or the representations and warranties of
Nelnet contained in the Subservicing Agreement, the Indemnity
Agreement or the Custodian Agreement are other than as stated
therein.
16
(vi) No authorization, approval, or other action by,
and no notice to or filing with, any governmental authority or
regulatory body is required (a) for the due execution,
delivery and performance by NELN of the Administration
Agreement, the Servicing Agreement or the Subservicing
Agreement, (b) for the due execution, delivery and performance
by Nelnet Funding of the Purchase Agreements, the Trust
Agreement, the Servicing Agreement, the Nelnet Funding
Eligible Lender Trust Agreement or this Agreement, (c) for the
due execution, delivery and performance by each Seller of the
respective Purchase Agreement, (d) for the due execution,
delivery and performance by Nelnet of the Subservicing
Agreement, the Indemnity Agreement or the Custodian Agreement
or (e) for the perfection of the Trust's and the Trustee's
interest in the Student Loans sold pursuant to the Purchase
Agreements or the exercise by the Trust (or its permitted
assigns) and the Trustee of their rights and remedies under
the Purchase Agreements, including specifically the filings of
any Uniform Commercial Code financing statements, except for
the execution and delivery of the Guarantee Agreements.
(vii) The Nelnet Funding Purchase Agreement together
with the related bill of sale and blanket endorsement effects
a valid sale to the Eligible Lender Trustee of the Student
Loans to be sold under the Nelnet Funding Purchase Agreement
enforceable against creditors of, and purchasers from, Nelnet
Funding.
(viii) As of the date specified in a schedule to such
opinion, there were no (a) UCC financing statements naming a
Seller as debtor or seller and covering any Student Loans to
be sold under the Purchase Agreements or interest therein or
(b) notices of the filing of any federal tax lien (filed
pursuant to Section 6323 of the Internal Revenue Code) or lien
of the Pension Benefit Guaranty Corporation (filed pursuant to
Section 4068 of ERISA) covering any Student Loan to be sold
under the Purchase Agreements or interest therein, listed in
the available records in the respective offices set forth in
such schedule opposite each such date (which are all of the
offices that are prescribed under either the internal law of
the conflict of law rules of the Delaware, Nebraska and Nevada
UCC as the offices in which filings should be made to perfect
security interests in Student Loans), except as set forth in
such schedule.
(ix) As of the date of such opinion, by executing the
Guarantee Agreements and upon execution and delivery of the
instruments of transfer described in the Purchase Agreements
and notification of the Guarantors and borrowers of the
transfer contemplated thereby, and assuming that the Eligible
Lender Trustee is an eligible lender as that term is defined
in 20 U.S.C. ss.1085(d)(1) of the Higher Education Act of
1965, as amended, the Eligible Lender Trustee on behalf of the
Trust will be entitled to the benefit of the applicable
Guarantor and/or Department of Education payments under the
Act related to the Student Loans sold under the Purchase
Agreements, subject to the terms and conditions of the
Guarantee Agreements and the Act.
17
(i) You shall have received opinions addressed to you of
Richards, Layton & Finger, P.A., in their capacity as counsel to the
Delaware Trustee, and as Delaware counsel to the Trust and Nelnet
Funding, dated the Closing Date and in form and substance satisfactory
to you and your counsel.
(j) You shall have received an opinion addressed to you of
counsel to the Trustee, dated the Closing Date and in form and
substance satisfactory to you and your counsel, to the effect that:
(i) The Trustee is a national banking association
duly organized and validly existing under the laws of the
United States of America.
(ii) The Trustee has the full corporate trust power
to accept the office of indenture trustee under the Indenture
and to enter into and perform its obligations under the
Indenture, the Custodian Agreement, the Eligible Lender
Agreements, the Administration Agreement, the Investment
Agreements and each Guarantee Agreement.
(iii) The execution and delivery of each of the
Indenture, the Custodian Agreement, the Eligible Lender
Agreements, the Administration Agreement, the Investment
Agreements and each Guarantee Agreement, and the performance
by the Trustee of its obligations under the Indenture, the
Custodian Agreement, the Administration Agreement, the
Eligible Lender Agreements, the Investment Agreements and each
Guarantee Agreement, have been duly authorized by all
necessary action of the Trustee and each has been duly
executed and delivered by the Trustee.
(iv) The Indenture, the Custodian Agreement, the
Eligible Lender Agreements, the Administration Agreement, the
Investment Agreements and each Guarantee Agreement constitute
valid and binding obligations of the Trustee enforceable
against the Trustee.
(v) The execution and delivery by the Trustee of the
Indenture, the Custodian Agreement, the Eligible Lender
Agreements, the Administration Agreement, the Investment
Agreements and each Guarantee Agreement do not require any
consent, approval or authorization of, or any registration or
filing with, any state or United States Federal governmental
authority.
(vi) Each of the Notes has been duly authenticated by
the Trustee.
(vii) Neither the consummation by the Trustee of the
transactions contemplated in the Indenture, the Custodian
Agreement, the Eligible Lender Agreements, the Administration
Agreement, the Investment Agreements and each Guarantee
Agreement nor the fulfillment of the terms thereof by the
Trustee will conflict with, result in a breach or violation
of, or constitute a default under any law or the charter,
by-laws or other organizational documents of the Trustee or
the terms of any indenture or other agreement or instrument
known to such counsel and to which the Trustee or any of its
subsidiaries is a party or is bound or any judgment, order or
decree known to such counsel to be applicable to the Trustee
or any of its subsidiaries of any court, regulatory body,
administrative agency, governmental body or arbitrator having
jurisdiction over the Trustee or any of its subsidiaries.
18
(viii) There are no actions, suits or proceedings
pending or, to the best of such counsel's knowledge after due
inquiry, threatened against the Trustee (as indenture trustee
under the Indenture or in its individual capacity) before or
by any governmental authority that might materially and
adversely affect the performance by the Trustee of its
obligations under, or the validity or enforceability of, the
Indenture, the Custodian Agreement, the Eligible Lender
Agreements, the Administration Agreement, the Investment
Agreements or any Guarantee Agreement.
(ix) The execution, delivery and performance by the
Trustee of the Indenture, the Custodian Agreement, the
Eligible Lender Agreements, the Administration Agreement, the
Investment Agreements or any Guarantee Agreement will not
subject any of the property or assets of the Trust or any
portion thereof, to any lien created by or arising under the
Indenture that is unrelated to the transactions contemplated
in such agreements.
(x) The Trustee is an "eligible lender" for purposes
of the FFELP Program in its capacity as trustee with respect
to Financed Eligible Loans held under the Indenture.
(k) You shall have received certificates addressed to you
dated the Closing Date of any one of the Chairman of the Board, the
President, any Executive Vice President, Senior Vice President or Vice
President, the Treasurer, any Assistant Treasurer, the principal
financial officer or the principal accounting officer of Nelnet
Funding, each Seller, Nelnet and NELN in which such officers shall
state that, to the best of their knowledge after reasonable
investigation, (i) the representations and warranties of Nelnet
Funding, such Seller, Nelnet or NELN, as the case may be, contained in
the respective Basic Documents to which it is a party, as applicable,
are true and correct in all material respects, that each of Nelnet
Funding, such Seller, Nelnet and NELN has complied with all agreements
and satisfied all conditions on its part to be performed or satisfied
under such agreements at or prior to the Closing Date, (ii) that they
have reviewed the Prospectus and that the information therein regarding
Nelnet Funding, such Seller, Nelnet or NELN, as applicable, is fair and
accurate in all material respects, and (iii) since the date set forth
in such certificate, except as may be disclosed in the Prospectus, no
material adverse change or any development involving a prospective
material adverse change, in or affecting particularly the business or
properties of Nelnet Funding, such Seller, Nelnet or NELN, as
applicable, has occurred.
19
(l) You shall have received evidence satisfactory to you that,
on or before the Closing Date, UCC-1 financing statements have been or
are being filed in the office of the Secretary of State of the State of
Delaware reflecting the grant of the security interest by the Trust in
the Financed Eligible Loans and the proceeds thereof to the Trustee.
(m) You shall have received a certificate addressed to you
dated the Closing Date from a responsible officer acceptable to you of
the Trustee in form and substance satisfactory to you and your counsel
and to which shall be attached each Guarantee Agreement.
(n) The Underwriters shall have received on the Closing Date
from KPMG LLP a letter dated the Closing Date, and in form and
substance satisfactory to the Underwriters, to the effect that they
have carried out certain specified procedures, not constituting an
audit, with respect to certain information regarding the Financed
Eligible Loans and setting forth the results of such specified
procedures.
(o) All the representations and warranties of Nelnet Funding
and the Trust contained in this Agreement and the Basic Documents shall
be true and correct in all material respects on and as of the date
hereof and on and as of the Closing Date as if made on and as of the
Closing Date and the Underwriters shall have received a certificate,
dated the Closing Date and signed by an executive officer of Nelnet
Funding to the effect set forth in this Section 7(o) and in Section
7(p) hereof.
(p) Neither Nelnet Funding nor the Trust shall have failed at
or prior to the Closing Date to have performed or complied with any of
its agreements herein contained and required to be performed or
complied with by it hereunder at or prior to the Closing Date.
(q) The Underwriters shall have received by instrument dated
the Closing Date (at the option of the Underwriters), in lieu of or in
addition to the legal opinions referred to in this Section 7, the right
to rely on opinions provided by such counsel and all other counsel
under the terms of the Basic Documents.
(r) Each class of Class A Notes shall be rated "AAA", "AAA"
and "Aaa", respectively, by Fitch, Inc. ("Fitch"), Standard & Poor's
Ratings Service, a division of The McGraw-Hill Companies ("S&P"), and
Moody's Investors Service, Inc. ("Moody's"), the Class B Notes shall be
rated "AA+", "AA" and "Aal", or higher, by Fitch, S&P and Moody's,
respectively, and that neither Fitch, S&P nor Moody's have placed the
Notes under surveillance or review with possible negative implications.
(s) You shall have received evidence satisfactory to you of
the completion of all actions necessary to effect the transfer of the
Financed Eligible Loans as described in the Prospectus and the
recordation thereof on each Sellers' and NELN's computer systems.
(t) You shall have received certificates addressed to you
dated the Closing Date from officers of Nelnet Funding and legal
opinions addressing such additional matters as you may reasonably
request in form and substance satisfactory to you and your counsel.
20
(u) You shall have received a signed Indemnity Agreement from
Nelnet in form and substance satisfactory to you and your counsel.
(v) You shall have received certificates dated the Closing
Date of United Student Aid Funds, Inc., California Student Aid
Commission and Pennsylvania Higher Education Assistance Agency to the
effect that the information in the Prospectus with respect to such
entity is true and correct and is fair and accurate in all material
respects.
(w) On the Closing Date, the aggregate principal amount of the
Notes, as specified in Schedule A to this Agreement, shall have been
sold by the Trust to the Underwriters and the Underwriters shall have
received from Nelnet payment of all discounts and commissions in
connection with the underwriting of the Notes as provided for in the
Indemnity Agreement.
(x) You shall have received opinions of counsel to any
provider of an investment agreement, guaranteed investment contract, or
other similar agreement, in form and substance satisfactory to you and
your counsel, relating to corporate and securities matters with respect
to such arrangement and its provider.
(y) You shall have received such other opinions, certificates
and documents as are required under the Indenture as a condition to the
issuance of the Notes.
Nelnet Funding will provide or cause to be provided to you such
conformed copies of such of the foregoing opinions, notes, letters and documents
as you reasonably request.
8. Expenses. Nelnet Funding agrees to pay or to otherwise cause the
payment of the following costs and expenses and all other costs and expenses
incident to the performance by it of its obligations hereunder: (i) the
preparation, printing or reproduction of the Registration Statement, the
Prospectus, any preliminary prospectus and each amendment or supplement to any
of them, this Agreement, and each other Basic Document; (ii) the printing (or
reproduction) and delivery (including postage, air freight charges and charges
for counting and packaging) of such copies of the Registration Statement, the
Prospectus, any preliminary prospectus and all amendments or supplements to, and
preliminary versions of, any of them as may be reasonably requested for use in
connection with the offering and sale of the Notes; (iii) the preparation,
printing, authentication, issuance and delivery of definitive certificates for
the Notes; (iv) the printing (or reproduction) and delivery of this Agreement,
the preliminary and supplemental Blue Sky Memoranda and all other agreements or
documents printed (or reproduced) and delivered in connection with the offering
of the Notes; (v) qualification of the Indenture under the Trust Indenture Act;
(vi) the qualification of the Notes for offer and sale under the securities or
Blue Sky laws of the several states as provided in Section 3(h) hereof
(including the reasonable fees, expenses and disbursements of counsel relating
to the preparation, printing or reproduction, and delivery of the preliminary
and supplemental Blue Sky Memoranda and such qualification); (vii) the fees and
disbursements of (A) the Trust's counsel, (B) the Underwriters' counsel, (C) the
Trustee and its counsel, (D) the Delaware Trustee and its counsel, (E) the
Depository Trust Company in connection with the book-entry registration of the
Notes, (F) the SEC and (G) KPMG LLP, accountants for the Trust and issuer of the
Comfort Letter; (viii) obtaining any investment agreement, guaranteed investment
contract or other similar arrangement; and (ix) the fees charged by S&P, Fitch
and Moody's for rating the Notes.
21
9. Effective Date of Agreement. This Agreement shall be deemed
effective as of the date first above written upon the execution and delivery
hereof by all the parties hereto. Until such time as this Agreement shall have
become effective, it may be terminated by Nelnet Funding, by notifying each of
the Underwriters, or by the Underwriters, by notifying Nelnet Funding.
Any notice under this Section 9 may be given by telecopy or telephone
but shall be subsequently confirmed by letter.
10. Termination of Agreement. This Agreement shall be subject to
termination in the absolute discretion of the Underwriters, without liability on
the part of the Underwriters to Nelnet Funding, by notice to Nelnet Funding, if
prior to the Closing Date (i) trading in securities generally on the New York
Stock Exchange, American Stock Exchange or the Nasdaq National Market shall have
been suspended or materially limited, (ii) a general moratorium on commercial
banking activities in New York shall have been declared by either Federal or
state authorities, or (iii) there shall have occurred any outbreak or escalation
of hostilities or other international or domestic calamity, crisis or change in
political, financial or economic conditions, the effect of which is such as to
make it, in the judgment of the Underwriters, impracticable or inadvisable to
commence or continue the offering of the Notes on the terms set forth in the
Prospectus, as applicable, or to enforce contracts for the resale of the Notes
by the Underwriters. Notice of such termination may be given to Nelnet Funding
by telecopy or telephone and shall be subsequently confirmed by letter.
11. Information Furnished by the Underwriters. The statements set forth
in the second, fourth and tenth paragraphs and each table under the heading
"Plan of Distribution" in the Prospectus Supplement constitute the only
information furnished by or on behalf of the Underwriters as such information is
referred to in Sections 3(b) and 6 hereof.
12. Default by One of the Underwriters. If any of the Underwriters
shall fail on the Closing Date to purchase the Notes which it is obligated to
purchase hereunder (the "Defaulted Notes"), the remaining Underwriters which are
obligated to purchase that class of Notes (the "Non-Defaulting Underwriters")
shall have the right, but not the obligation, within one (1) Business Day
thereafter, to make arrangements to purchase all, but not less than all, of the
remaining Defaulted Notes of such class upon the terms herein set forth; if,
however, any such Non-Defaulting Underwriters shall have not completed such
arrangements within such one (1) Business Day period, then this Agreement shall
terminate without liability on the part of any such Non-Defaulting Underwriter.
22
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement, either the Non-Defaulting Underwriters or Nelnet Funding
shall have the right to postpone the Closing Date for a period not exceeding
seven days in order to effect any required changes in the Registration Statement
or Prospectus or in any other documents or arrangements.
13. Survival of Representations and Warranties. The respective
indemnities, agreements, representations, warranties and other statements of
Nelnet Funding or its officers and of the Underwriters set forth in or made
pursuant to this Agreement or contained in notes of officers of Nelnet Funding
submitted pursuant hereto shall remain operative and in full force and effect,
regardless of any investigation or statement as to the results thereof, made by
or on behalf of the Underwriters, Nelnet Funding or any of their respective
representatives, officers or directors or any controlling person, and will
survive (i) delivery of and payment for the Notes or (ii) termination of this
Agreement.
14. Miscellaneous. Except as otherwise provided in Sections 6, 9 and 10
hereof, notice given pursuant to any provision of this Agreement shall be in
writing and shall be delivered (i) if to Nelnet Funding, at 121 South 13th
Street, Suite 201, Lincoln, Nebraska 68508, Attention: Terry J. Heimes, and (ii)
if to the Underwriters, to the address of the respective Underwriter set forth
above with a copy to Stroock & Stroock & Lavan LLP, 180 Maiden Lane, New York,
New York 10038, Attention: Richard L. Fried.
This Agreement has been and is made solely for the benefit of the
Underwriters, Nelnet Funding, the Trust, their respective directors, officers,
managers, trustees and controlling persons referred to in Section 6 hereof and
their respective successors and assigns, to the extent provided herein, and no
other person shall acquire or have any right under or by virtue of this
Agreement. Neither the term "successor" nor the term "successors and assigns" as
used in this Agreement shall include a purchaser from an Underwriter of any of
the Notes in his status as such purchaser.
15. Applicable Law, Counterparts. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York (including
Section 5-1401 of the General Obligations Law, but otherwise without giving
effect to the choice of laws or conflict of laws principles thereof).
Nelnet Funding hereby submits to the non-exclusive jurisdiction of the
federal and state courts in the Borough of Manhattan in The City of New York in
any suit or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.
This Agreement may be signed in various counterparts which together
constitute one and the same instrument. If signed in counterparts, this
Agreement shall not become effective unless at least one counterpart hereof or
thereof shall have been executed and delivered on behalf of each party hereto.
23
Please confirm that the foregoing correctly sets forth the agreement
between the Nelnet Funding and the Underwriters.
Very truly yours,
NELNET STUDENT LOAN FUNDING, LLC
By: Nelnet Student Loan Management
Corporation, as Manager and Special Member
By: /s/ Jeffrey R. Noordhoek
-------------------------------------------
Name: Jeffrey R. Noordhoek
Title: Senior Vice President
Confirmed as of the date first
above mentioned.
CITIGROUP GLOBAL MARKETS INC.
By: /s/ Paul Stern
-------------------------------
Name: Paul Stern
Title:
J.P. MORGAN SECURITIES INC.
By: /s/ Richard J. Perez
-------------------------------
Name: Richard J. Perez
Title: Vice President
MORGAN STANLEY & CO. INCORPORATED
By: /s/ Peter Chai
-------------------------------
Name: Peter Chai
Title: Managing Director
24
SCHEDULE A
----------- ---------------- ---------------- ------------------ ---------------
Citigroup Global J.P. Morgan Morgan Stanley
Notes Markets Inc. Securities Inc. & Co. Incorporated TOTAL
----------- ---------------- ---------------- ------------------ ---------------
Class A-1 $126,670,000 $126,660,000 $126,670,000 $ 380,000,000
----------- ---------------- ---------------- ------------------ ---------------
Class A-2 $172,000,000 $172,000,000 $172,000,000 $ 516,000,000
----------- ---------------- ---------------- ------------------ ---------------
Class A-3 $ 98,000,000 $ 98,000,000 $ 98,000,000 $ 294,000,000
----------- ---------------- ---------------- ------------------ ---------------
Class A-4 $104,420,000 $104,410,000 $104,420,000 $ 313,250,000
----------- ---------------- ---------------- ------------------ ---------------
Class A-5 $152,330,000 $152,340,000 $152,330,000 $ 457,000,000
----------- ---------------- ---------------- ------------------ ---------------
Class B $ 20,212,000 $ 20,202,000 $ 20,212,000 $ 60,626,000
----------- ---------------- ---------------- ------------------ ---------------
Total $673,632,000 $673,612,000 $673,632,000 $2,020,876,000
----------- ---------------- ---------------- ------------------ ---------------
25
SCHEDULE B
TERMS OF THE NOTES
------------ -------------------------- ------------------- --------------- --------------------- ------------------
Class Interest Rate Final Maturity Date Price to Public Underwriting Discount Proceeds to Issuer
------------ -------------------------- ------------------- --------------- --------------------- ------------------
2004-4 A-1 3-month LIBOR minus 0.01% April 25, 2011 100% 0.16% $380,000,000
------------ -------------------------- ------------------- --------------- --------------------- ------------------
2004-4 A-2 3-month LIBOR plus 0.02% April 26, 2016 100% 0.18% $516,000,000
------------ -------------------------- ------------------- --------------- --------------------- ------------------
2004-4 A-3 3-month LIBOR plus 0.09% October 25, 2016 100% 0.20% $294,000,000
------------ -------------------------- ------------------- --------------- --------------------- ------------------
2004-4 A-4 3-month LIBOR plus 0.13% April 26, 2021 100% 0.23% $313,250,000
------------ -------------------------- ------------------- --------------- --------------------- ------------------
2004-4 A-5 3-month LIBOR plus 0.16% January 26, 2037 100% 0.26% $457,000,000
------------ -------------------------- ------------------- --------------- --------------------- ------------------
2004-4 B 3-month LIBOR plus 0.30% January 25, 2041 100% 0.33% $ 60,626,000
------------ -------------------------- ------------------- --------------- --------------------- ------------------
TOTAL $2,020,876,000
------------ -------------------------- ------------------- --------------- --------------------- ------------------
26
EXHIBIT 4.1
INDENTURE OF TRUST
by and between
NELNET STUDENT LOAN TRUST 2004-4
and
ZIONS FIRST NATIONAL BANK,
as Trustee and as Eligible Lender Trustee
Dated as of September 1, 2004
NELNET STUDENT LOAN TRUST 2004-4
Reconciliation and tie between Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act") and Indenture of Trust, dated as of September 1,
2004.
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
Attention should also be directed to Section 318(c) of the Trust
Indenture Act, which provides that the provisions of Sections 310 to and
including 317 of the Trust Indenture Act are a part of and govern every
qualified indenture, whether or not physically contained therein.
ARTICLE I
DEFINITIONS AND USE OF PHRASES.................................................3
ARTICLE II
NOTE DETAILS AND FORM OF NOTES
Section 2.01. Note Details............................................25
Section 2.02. Execution, Authentication and Delivery of Notes.........25
Section 2.03. Registration, Transfer and Exchange of Notes; Persons
Treated as Registered Owners..........................25
Section 2.04. Lost, Stolen, Destroyed and Mutilated Notes.............26
Section 2.05. Trustee's Authentication Certificate....................27
Section 2.06. Cancellation and Destruction of Notes by the Trustee....27
Section 2.07. Temporary Notes.........................................27
Section 2.08. Issuance of Notes.......................................27
Section 2.09. Definitive Notes........................................27
Section 2.10. Payment of Principal and Interest.......................28
ARTICLE III
PARITY AND PRIORITY OF LIEN; OTHER OBLIGATIONS;
AND DERIVATIVE PRODUCTS
Section 3.01. Parity and Priority of Lien.............................29
Section 3.02. Other Obligations.......................................29
Section 3.03. Derivative Products; Counterparty Payments; Issuer
Derivative Payments...................................29
ARTICLE IV
PROVISIONS APPLICABLE TO THE NOTES; DUTIES OF THE ISSUER
Section 4.01. Payment of Principal and Interest.......................30
Section 4.02. Covenants as to Additional Conveyances..................30
Section 4.03. Further Covenants of the Issuer.........................30
Section 4.04. Enforcement of Master Servicing Agreement and
Subservicing Agreements...............................31
Section 4.05. Procedures for Transfer of Funds........................33
Section 4.06. Additional Covenants with Respect to the Higher
Education Act.........................................33
Section 4.07. Financed Eligible Loans; Collections Thereof;
Assignment Thereof....................................34
Section 4.08. Appointment of Agents, Direction to Trustee, Etc........35
Section 4.09. Capacity to Sue.........................................35
Section 4.10. Continued Existence; Successor to Issuer................35
Section 4.11. Amendment of Student Loan Purchase Agreements...........35
Section 4.12. Representations; Negative Covenants.....................36
Section 4.13. Additional Covenants....................................41
Section 4.14. Providing of Notice.....................................42
Section 4.15. Certain Reports.........................................42
Section 4.16. Statement as to Compliance..............................43
Section 4.17. Representations of the Issuer Regarding the Trustee's
Security Interest.....................................44
Section 4.18. Further Covenants of the Issuer Regarding the Trustee's
Security Interest.....................................45
Section 4.19. Borrower Incentive Programs.............................45
i
ARTICLE V
FUNDS
Section 5.01. Creation and Continuation of Funds and Accounts.........45
Section 5.02. Acquisition Fund........................................46
Section 5.03. Capitalized Interest Fund...............................47
Section 5.04. Collection Fund.........................................47
Section 5.05. Reserve Fund............................................50
Section 5.06. Investment of Funds Held by Trustee.....................51
Section 5.07. Release.................................................52
ARTICLE VI
DEFAULTS AND REMEDIES
Section 6.01. Events of Default Defined...............................53
Section 6.02. Remedy on Default; Possession of Trust Estate...........53
Section 6.03. Remedies on Default; Advice of Counsel..................55
Section 6.04. Remedies on Default; Sale of Trust Estate...............55
Section 6.05. Appointment of Receiver.................................56
Section 6.06. Restoration of Position.................................56
Section 6.07. Application of Sale Proceeds............................56
Section 6.08. Acceleration of Maturity; Rescission and Annulment......56
Section 6.09. Remedies Not Exclusive..................................57
Section 6.10. Collection of Indebtedness and Suits for Enforcement
by Trustee............................................57
Section 6.11. Direction of Trustee....................................58
Section 6.12. Right to Enforce in Trustee.............................58
Section 6.13. Physical Possession of Obligations Not Required.........59
Section 6.14. Waivers of Events of Default............................59
ARTICLE VII
THE TRUSTEE
Section 7.01. Acceptance of Trust.....................................59
Section 7.02. Recitals of Others......................................60
Section 7.03. As to Filing of Indenture...............................60
Section 7.04. Trustee May Act Through Agents..........................61
Section 7.05. Indemnification of Trustee..............................61
Section 7.06. Trustee's Right to Reliance.............................62
Section 7.07. Compensation of Trustee.................................63
Section 7.08. Creditor Relationships..................................63
Section 7.09. Resignation of Trustee..................................63
Section 7.10. Removal of Trustee......................................63
Section 7.11. Successor Trustee.......................................64
Section 7.12. Manner of Vesting Title in Trustee......................64
Section 7.13. Additional Covenants by the Trustee to Conform to the
Higher Education Act..................................65
Section 7.14. Right of Inspection.....................................65
Section 7.15. Limitation with Respect to Examination of Reports.......65
Section 7.16. Servicing Agreements....................................65
Section 7.17. Additional Covenants of Trustee.........................65
ii
Section 7.18. Notices to Rating Agencies..............................66
Section 7.19. Merger of the Trustee...................................66
Section 7.20. Receipt of Funds from Master Servicer or a Subservicer..66
Section 7.21. Special Circumstances Leading to Resignation of Trustee.67
Section 7.22. Survival of Trustee's Rights to Receive Compensation,
Reimbursement and Indemnification.......................67
Section 7.23. Corporate Trustee Required; Eligibility; Conflicting
Interests.............................................67
Section 7.24. Trustee May File Proofs of Claim........................67
Section 7.25. No Petition.............................................68
ARTICLE VIII
SUPPLEMENTAL INDENTURES
Section 8.01. Supplemental Indentures Not Requiring Consent of
Registered Owners.....................................68
Section 8.02. Supplemental Indentures Requiring Consent of
Registered Owners.....................................69
Section 8.03. Additional Limitation on Modification of Indenture......70
Section 8.04. Notice of Defaults......................................70
Section 8.05. Conformity with the Trust Indenture Act.................71
ARTICLE IX
GENERAL PROVISIONS
Section 9.01. Notices.................................................71
Section 9.02. Covenants Bind Issuer...................................72
Section 9.03. Lien Created............................................73
Section 9.04. Severability of Lien....................................73
Section 9.05. Consent of Registered Owners Binds Successors...........73
Section 9.06. Nonliability of Persons; No General Obligation..........73
Section 9.07. Nonpresentment of Notes or Interest Checks..............73
Section 9.08. Security Agreement......................................73
Section 9.09. Laws Governing..........................................74
Section 9.10. Severability............................................74
Section 9.11. Exhibits................................................74
Section 9.12. Non-Business Days.......................................74
Section 9.13. Parties Interested Herein...............................74
Section 9.14. Obligations Are Limited Obligations.....................74
Section 9.15. Limitations on Counterparty Rights......................74
Section 9.16. Disclosure of Names and Addresses of Registered Owners..74
Section 9.17. Aggregate Principal Amount of Obligations...............75
Section 9.18. Financed Eligible Loans.................................75
Section 9.19. Concerning the Delaware Trustee.........................75
iii
ARTICLE X
PAYMENT AND CANCELLATION OF NOTES AND
SATISFACTION OF INDENTURE
Section 10.01. Trust Irrevocable.......................................76
Section 10.02. Satisfaction of Indenture...............................76
Section 10.03. Optional Purchase of All Financed Eligible Loans........77
Section 10.04. Auction of Financed Eligible Loans......................78
Section 10.05. Cancellation of Paid Notes..............................78
EXHIBIT A ELIGIBLE LOAN ACQUISITION CERTIFICATE
EXHIBIT B-1 FORM OF CLASS A-1 NOTE
EXHIBIT B-2 FORM OF CLASS A-2 NOTE
EXHIBIT B-3 FORM OF CLASS A-3 NOTE
EXHIBIT B-4 FORM OF CLASS A-4 NOTE
EXHIBIT B-5 FORM OF CLASS A-5 NOTE
EXHIBIT B-6 FORM OF CLASS B NOTE
EXHIBIT C FORM OF ADMINISTRATOR'S MONTHLY SERVICING PAYMENT DATE
CERTIFICATE
EXHIBIT D FORM OF ADMINISTRATOR'S QUARTERLY DISTRIBUTION DATE
CERTIFICATE
iv
INDENTURE OF TRUST
THIS INDENTURE OF TRUST, dated as of September 1, 2004 (this
"Indenture"), is by and between NELNET STUDENT LOAN TRUST 2004-4 (the "Issuer"),
a statutory trust duly organized and existing under the laws of the State of
Delaware (the "State"), and ZIONS FIRST NATIONAL BANK, a national banking
association duly organized and operating under the laws of the United States of
America, as trustee hereunder (together with its successors, the "Trustee") and
as eligible lender trustee (together with its successors, the "Eligible Lender
Trustee") under the Eligible Lender Trust Agreement (all capitalized terms used
in these preambles, recitals and granting clauses shall have the same meanings
assigned thereto in Article I hereof);
W I T N E S S E T H :
WHEREAS, the Issuer represents that it is duly created as a statutory
trust under the laws of the State and that by proper action has duly authorized
the execution and delivery of this Indenture, which Indenture provides for the
payment of student loan asset-backed notes (the "Notes") and the payments to any
Counterparty (as defined herein); and
WHEREAS, this Indenture is subject to the provisions of the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), that are deemed
to be incorporated into this Indenture and shall, to the extent applicable, be
governed by such provisions; and
WHEREAS, the Trustee has agreed to accept the trusts herein created
upon the terms herein set forth; and
WHEREAS, it is hereby agreed between the parties hereto, the Registered
Owners of the Notes (the Registered Owners evidencing their consent by their
acceptance of the Notes) and any Counterparty (the Counterparty evidencing its
consent by its execution and delivery of a Derivative Product (as defined
herein)) that in the performance of any of the agreements of the Issuer herein
contained, any obligation it may thereby incur for the payment of money shall
not be general debt on its part, but shall be secured by and payable solely from
the Trust Estate, payable in such order of preference and priority as provided
herein;
NOW, THEREFORE, the Issuer, and as appropriate the Eligible Lender
Trustee, in consideration of the premises and acceptance by the Trustee of the
trusts herein created, of the purchase and acceptance of the Notes by the
Registered Owners thereof, of the execution and delivery of any Derivative
Product by a Counterparty and the Issuer and the acknowledgement thereof by the
Trustee, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, do hereby GRANT, CONVEY, PLEDGE,
TRANSFER, ASSIGN AND DELIVER to the Trustee, for the benefit of the Registered
Owners of the Notes and any Counterparty (to secure the payment of any and all
amounts which may from time to time become due and owing to a Counterparty
pursuant to any Derivative Product), all of the moneys, rights and properties
described in the granting clauses A through F below (the "Trust Estate"), as
follows:
GRANTING CLAUSE A
The Available Funds and Accounts (other than moneys released from the
lien of the Trust Estate as provided herein);
GRANTING CLAUSE B
All moneys and investments held in the Funds and Accounts created under
Section 5.01 hereof, including all proceeds thereof and all income thereon;
GRANTING CLAUSE C
The Financed Eligible Loans (other than Financed Eligible Loans
released from the lien of the Trust Estate as provided herein) and all
obligations of the obligors thereunder including all moneys accrued and paid
thereunder on or after the Cutoff Date;
GRANTING CLAUSE D
The rights of the Issuer and/or the Eligible Lender Trustee in and to
the Eligible Lender Trust Agreement, the Master Servicing Agreement, any
Subservicing Agreement, the Student Loan Purchase Agreements, the Administration
Agreement, the Custodian Agreements and the Guarantee Agreements as the same
relate to the Financed Eligible Loans;
GRANTING CLAUSE E
The rights of the Issuer in and to any Derivative Product; provided,
however, that this Granting Clause E shall not be for the benefit of a
Counterparty with respect to its Derivative Product; and
GRANTING CLAUSE F
All proceeds from any property described in these Granting Clauses and
any and all other property, rights and interests of every kind or description
that from time to time hereafter is granted, conveyed, pledged, transferred,
assigned or delivered to the Trustee as additional security hereunder.
TO HAVE AND TO HOLD the Trust Estate, whether now owned or held or
hereafter acquired, unto the Trustee and its successors or assigns;
IN TRUST NEVERTHELESS, upon the terms and trusts herein set forth for
the equal and proportionate benefit and security of all present and future
Registered Owners of the Notes, without preference of any Note over any other,
except as provided herein, and for enforcement of the payment of the Notes in
accordance with their terms, and all other sums payable hereunder (including
payments due and payable to any Counterparty) or on the Notes, and for the
performance of and compliance with the obligations, covenants and conditions of
this Indenture, as if all the Notes and other Obligations (as defined herein) at
any time Outstanding had been executed and delivered simultaneously with the
execution and delivery of this Indenture;
2
PROVIDED, HOWEVER, that if the Issuer, its successors or assigns, shall
well and truly pay, or cause to be paid, the principal of the Notes and the
interest due and to become due thereon, or provide fully for payment thereof as
herein provided, at the times and in the manner mentioned in the Notes according
to the true intent and meaning thereof, and shall make all required payments
into the Funds as required under Article V hereof, or shall provide, as
permitted hereby, for the payment thereof by depositing with the Trustee sums
sufficient to pay or to provide for payment of the entire amount due and to
become so due as herein provided (including payments due and payable to any
Counterparty), then this Indenture (other than Sections 4.13, 4.14 (for a period
of 90 days) and 7.05 hereof) and the rights hereby granted shall cease,
terminate and be void; otherwise, this Indenture shall be and remain in full
force and effect;
NOW, THEREFORE, it is mutually covenanted and agreed as follows:
ARTICLE I
DEFINITIONS AND USE OF PHRASES
Capitalized terms used herein and not otherwise defined shall have the
meanings set forth below unless the context clearly requires otherwise:
"Account" shall mean any of the accounts created and established within
any Fund pursuant to this Indenture.
"Acquisition Fund" shall mean the Fund by that name created in Section
5.01(a) hereof and further described in Section 5.02 hereof, including any
Accounts and Subaccounts created therein.
"Adjusted Pool Balance" shall mean, for any Quarterly Distribution Date
as determined by the Administrator, (a) if the Pool Balance as of the last day
of the related Collection Period is greater than 40% of the Initial Pool
Balance, the sum of such Pool Balance, and the Specified Reserve Fund Balance
for that Quarterly Distribution Date; or (b) if the Pool Balance as of the last
day of the related Collection Period is less than or equal to 40% of the Initial
Pool Balance, that Pool Balance.
"Administration Agreement" shall mean the Administration Agreement,
dated as of September 1, 2004, among the Issuer, the Administrator, the Trustee
and the Delaware Trustee, as supplemented and amended.
"Administration Fee" shall mean an amount equal to 0.18% per annum,
based on the aggregate principal amount of the Pool Balance at any time, as
determined by the Administrator; provided, however, that if the Financed
Eligible Loans are not optionally purchased pursuant to Section 10.03 hereof and
the Financial Eligible Loans are not sold on the Trust Auction Date pursuant to
Section 10.04 hereof, the Administration Fee shall be reduced to an amount equal
to 0.05% per annum, based on the aggregate principal amount of the Pool Balance
at any time, as determined by the Administrator.
3
"Administrator" shall mean National Education Loan Network, Inc. in its
capacity as administrator of the Issuer and the Financed Eligible Loans, or any
successor thereto in accordance with the Administration Agreement.
"Affiliate" shall mean, with respect to any specified Person, any other
Person controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect to
any specified Person means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Authorized Representative" shall mean, when used with reference to the
Issuer, any Person duly authorized by the Trust Agreement to act on the Issuer's
behalf.
"Available Funds" shall mean, with respect to a Quarterly Distribution
Date or any related Monthly Servicing Payment Date, the sum of the following
amounts received to the extent not previously distributed: (a) all collections
received by the Master Servicer or any Subservicer on the Financed Eligible
Loans (including late fees received by the Master Servicer or any Subservicer
with respect to the Financed Eligible Loans and payments from any Guaranty
Agency received with respect to the Financed Eligible Loans but net of (i) any
collections in respect of principal on the Financed Eligible Loans applied by
the Issuer to repurchase guaranteed loans from the Guaranty Agencies or the
Master Servicer or any Subservicer in accordance with its Guarantee Agreement,
the Master Servicing Agreement or the related Subservicing Agreement, as
applicable; (ii) amounts required by the Higher Education Act to be paid to the
Department (including, but not limited to, rebate fees owed with respect to
consolidation loans) or to be repaid to borrowers (whether or not in the form of
a principal reduction of the applicable Financed Eligible Loan), with respect to
the Financed Eligible Loans; and (iii) any proceeds used to purchase Eligible
Loans which constitute "add-on consolidation loans"); (b) any Interest Benefit
Payments and Special Allowance Payments received by the Trustee with respect to
Financed Eligible Loans; (c) all Liquidation Proceeds from any Financed Eligible
Loans which became Liquidated Financed Eligible Loans in accordance with the
related Master Servicer or Subservicer's customary servicing procedures, and all
other moneys collected with respect to any Liquidated Financed Eligible Loan
which was written off, net of the sum of any amounts expended by the Master
Servicer or related Subservicer in connection with such liquidation and any
amounts required by law to be remitted to the obligor on such Liquidated
Financed Eligible Loan; (d) the aggregate Purchase Amounts received for Financed
Eligible Loans repurchased by the Seller or purchased by the Master Servicer or
a Subservicer or for serial loans sold to another eligible lender pursuant to
the Master Servicing Agreement or the related Subservicing Agreement; (e) the
aggregate amounts, if any, received from the Seller, the Master Servicer or any
Subservicer, as the case may be, as reimbursement of non-guaranteed interest
amounts, or lost Interest Benefit Payments and Special Allowance Payments, with
respect to the Financed Eligible Loans pursuant to a Student Loan Purchase
Agreement, the Master Servicing Agreement or a Subservicing Agreement,
respectively; (f) other amounts received by the Master Servicer or a Subservicer
pursuant to its role as Master Servicer or Subservicer under the Master
Servicing Agreement or the related Subservicing Agreement, respectively, and
payable to the Issuer in connection therewith; (g) all interest earned or gain
realized from the investment of amounts in any Fund or Account; and (h) any
payments received under the Derivative Products from the Counterparties in
respect of such Quarterly Distribution Date. "Available Funds" shall be
determined pursuant to the terms of this definition by the Administrator and
reported to the Trustee. Amounts described in clause (a)(i), (ii) and (iii)
hereof shall be paid by the Trustee upon receipt of a written direction from the
Administrator. The Trustee may conclusively rely on such determinations without
further duty to review or examine such information.
4
"Basic Documents" shall mean the Trust Agreement, this Indenture, the
Master Servicing Agreement, any Subservicing Agreement, the Administration
Agreement, the Student Loan Purchase Agreements, the Custodian Agreements, the
Guarantee Agreements, the Eligible Lender Trust Agreement, the Derivative
Products and other documents and certificates delivered in connection with any
thereof.
"Business Day" shall mean (a) for purposes of calculating LIBOR, any
day on which banks in New York, New York and London, England are open for the
transaction of international business; and (b) for all other purposes, any day
other than a Saturday, Sunday, holiday or other day on which the New York Stock
Exchange or banks located in New York, New York or the city in which the
principal office of the Trustee is located, are authorized or permitted by law
or executive order to close.
"Capitalized Interest Fund" shall mean the Fund by that name created in
Section 5.01(b) hereof and further described in Section 5.03 hereof.
"Carryover Servicing Fees" shall have the meaning assigned to such term
in the Master Servicing Agreement.
"Certificate of Insurance" shall mean any Certificate evidencing that a
Financed Eligible Loan is Insured pursuant to a Contract of Insurance.
"Certificate of Trust" shall mean the certificate filed with the
Secretary of State of the State establishing the Issuer under Delaware law.
"Class A Noteholder" shall mean the Person in whose name a Class A Note
is registered in the Note registration books of the Trustee.
"Class A Noteholders' Interest Distribution Amount" shall mean, on any
Quarterly Distribution Date for any class of Class A Notes, the Class A-1
Noteholders' Interest Distribution Amount, the Class A-2 Noteholders' Interest
Distribution Amount, the Class A-3 Noteholders' Interest Distribution Amount,
the Class A-4 Noteholders' Interest Distribution Amount or the Class A-5
Noteholders' Interest Distribution Amount, as applicable, in each case to the
extent payable on such Quarterly Distribution Date.
"Class A Notes" shall mean, collectively, the Class A-1 Notes, the
Class A-2 Notes, the Class A-3 Notes, the Class A-4 Notes and the Class A-5
Notes secured on a senior priority to the Class B Obligations.
5
"Class A Obligations" shall mean Class A Notes and the Derivative
Products, the priority of payment of which is equal with that of Class A Notes.
"Class A Percentage" shall mean, for any Quarterly Distribution Date,
100% less the Class B Percentage.
"Class A Principal Distribution Amount" shall mean, for any Quarterly
Distribution Date, the product of the Principal Distribution Amount and the
Class A Percentage.
"Class A-1 Maturity Date" shall mean the April, 2011 Quarterly
Distribution Date.
"Class A-1 Note Interest Shortfall" shall mean, with respect to any
Quarterly Distribution Date, the excess, if any, of (a) the Class A-1
Noteholders' Interest Distribution Amount on the immediately preceding Quarterly
Distribution Date over (b) the amount of interest actually distributed to the
Class A-1 Noteholders on such preceding Quarterly Distribution Date, plus
interest on the amount of such excess interest due to the Class A-1 Noteholders,
to the extent permitted by law, at the interest rate borne by the Class A-1
Notes from such immediately preceding Quarterly Distribution Date to the current
Quarterly Distribution Date, as determined by the Administrator.
"Class A-1 Noteholder" shall mean the Person in whose name a Class A-1
Note is registered in the Note registration books maintained by the Trustee.
"Class A-1 Noteholders' Interest Distribution Amount" shall mean, with
respect to any Quarterly Distribution Date, the sum of (a) the amount of
interest accrued at the Class A-1 Rate for the related Interest Accrual Period
on the aggregate outstanding principal balances of the Class A-1 Notes
immediately prior to such Quarterly Distribution Date; and (b) the Class A-1
Note Interest Shortfall for such Quarterly Distribution Date, as based on the
actual number of days in such Interest Accrual Period divided by 360 and
rounding the resultant figure to the fifth decimal place, as determined by the
Administrator.
"Class A-1 Notes" shall mean the $380,000,000 Student Loan Asset-Backed
Notes, Senior Class A-1 issued by the Issuer pursuant to this Indenture,
substantially in the form of Exhibit B-1 hereto.
"Class A-1 Rate" shall mean, for any Interest Accrual Period, other
than the first Interest Accrual Period, the applicable Three-Month LIBOR, minus
0.01%, as determined by the Administrator. For the first Interest Accrual
Period, the Class A-1 Rate shall be determined by reference to the following
formula:
x + [27/33 * (y-x)] minus 0.01%, as determined by the Administrator.
where:
x = Three-Month LIBOR, and
y = Four-Month LIBOR.
"Class A-2 Maturity Date" shall mean the April, 2016 Quarterly
Distribution Date.
6
"Class A-2 Note Interest Shortfall" shall mean, with respect to any
Quarterly Distribution Date, the excess, if any, of (a) the Class A-2
Noteholders' Interest Distribution Amount on the immediately preceding Quarterly
Distribution Date over (b) the amount of interest actually distributed to the
Class A-2 Noteholders on such preceding Quarterly Distribution Date, plus
interest on the amount of such excess interest due to the Class A-2 Noteholders,
to the extent permitted by law, at the interest rate borne by the Class A-2
Notes from such immediately preceding Quarterly Distribution Date to the current
Quarterly Distribution Date, as determined by the Administrator.
"Class A-2 Noteholder" shall mean the Person in whose name a Class A-2
Note is registered in the Note registration books maintained by the Trustee.
"Class A-2 Noteholders' Interest Distribution Amount" shall mean, with
respect to any Quarterly Distribution Date, the sum of (a) the amount of
interest accrued at the Class A-2 Rate for the related Interest Accrual Period
on the aggregate outstanding principal balances of the Class A-2 Notes
immediately prior to such Quarterly Distribution Date; and (b) the Class A-2
Note Interest Shortfall for such Quarterly Distribution Date, as based on the
actual number of days in such Interest Accrual Period divided by 360 and
rounding the resultant figure to the fifth decimal place, as determined by the
Administrator.
"Class A-2 Notes" shall mean the $516,000,000 Student Loan Asset-Backed
Notes, Senior Class A-2 issued by the Issuer pursuant to this Indenture,
substantially in the form of Exhibit B-2 hereto.
"Class A-2 Rate" shall mean, for any Interest Accrual Period, other
than the first Interest Accrual Period, the applicable Three-Month LIBOR, plus
0.02%, as determined by the Administrator. For the first Interest Accrual
Period, the Class A-2 Rate shall be determined by reference to the following
formula:
x + [27/33 * (y-x)] plus 0.02%, as determined by the Administrator.
where:
x = Three-Month LIBOR, and
y = Four-Month LIBOR.
"Class A-3 Maturity Date" shall mean the October, 2016 Quarterly
Distribution Date.
"Class A-3 Note Interest Shortfall" shall mean, with respect to any
Quarterly Distribution Date, the excess, if any, of (a) the Class A-3
Noteholders' Interest Distribution Amount on the immediately preceding Quarterly
Distribution Date over (b) the amount of interest actually distributed to the
Class A-3 Noteholders on such preceding Quarterly Distribution Date, plus
interest on the amount of such excess interest due to the Class A-3 Noteholders,
to the extent permitted by law, at the interest rate borne by the Class A-3
Notes from such immediately preceding Quarterly Distribution Date to the current
Quarterly Distribution Date, as determined by the Administrator.
7
"Class A-3 Noteholder" shall mean the Person in whose name a Class A-3
Note is registered in the Note registration books maintained by the Trustee.
"Class A-3 Noteholders' Interest Distribution Amount" shall mean, with
respect to any Quarterly Distribution Date, the sum of (a) the amount of
interest accrued at the Class A-3 Rate for the related Interest Accrual Period
on the aggregate outstanding principal balances of the Class A-3 Notes
immediately prior to such Quarterly Distribution Date; and (b) the Class A-3
Note Interest Shortfall for such Quarterly Distribution Date, as based on the
actual number of days in such Interest Accrual Period divided by 360 and
rounding the resultant figure to the fifth decimal place, as determined by the
Administrator.
"Class A-3 Notes" shall mean $294,000,000 Student Loan Asset-Backed
Notes, Senior Class A-3 issued by the Issuer pursuant to this Indenture,
substantially in the form of Exhibit B-3 hereto.
"Class A-3 Rate" shall mean, for any Interest Accrual Period, other
than the first Interest Accrual Period, the applicable Three-Month LIBOR, plus
0.09%, as determined by the Administrator. For the first Interest Accrual
Period, the Class A-3 Rate shall be determined by reference to the following
formula:
x + [27/33 * (y-x)] plus 0.09%, as determined by the Administrator.
where:
x = Three-Month LIBOR, and
y = Four-Month LIBOR.
"Class A-4 Maturity Date" shall mean the April, 2021 Quarterly
Distribution Date.
"Class A-4 Note Interest Shortfall" shall mean, with respect to any
Quarterly Distribution Date, the excess, if any, of (a) the Class A-4
Noteholders' Interest Distribution Amount on the immediately preceding Quarterly
Distribution Date over (b) the amount of interest actually distributed to the
Class A-4 Noteholders on such preceding Quarterly Distribution Date, plus
interest on the amount of such excess interest due to the Class A-4 Noteholders,
to the extent permitted by law, at the interest rate borne by the Class A-4
Notes from such immediately preceding Quarterly Distribution Date to the current
Quarterly Distribution Date, as determined by the Administrator.
"Class A-4 Noteholder" shall mean the Person in whose name a Class A-4
Note is registered in the Note registration books maintained by the Trustee.
"Class A-4 Noteholders' Interest Distribution Amount" shall mean, with
respect to any Quarterly Distribution Date, the sum of (a) the amount of
interest accrued at the Class A-4 Rate for the related Interest Accrual Period
on the aggregate outstanding principal balances of the Class A-4 Notes
immediately prior to such Quarterly Distribution Date; and (b) the Class A-4
Note Interest Shortfall for such Quarterly Distribution Date, as based on the
actual number of days in such Interest Accrual Period divided by 360 and
rounding the resultant figure to the fifth decimal place, as determined by the
Administrator.
8
"Class A-4 Notes" shall mean the $313,250,000 Student Loan Asset-Backed
Notes, Senior Class A-4 issued by the Issuer pursuant to this Indenture,
substantially in the form of Exhibit B-4.
"Class A-4 Rate" shall mean, for any Interest Accrual Period, other
than the first Interest Accrual Period, the applicable Three-Month LIBOR, plus
0.13%, as determined by the Administrator. For the first Accrual Period, the
Class A-4 Rate shall be determined by reference to the following formula:
x + [27/33 * (y-x)] plus 0.13%, as determined by the Administrator.
where:
x = Three-Month LIBOR, and
y = Four-Month LIBOR.
"Class A-5 Maturity Date" shall mean the January, 2037 Quarterly
Distribution Date.
"Class A-5 Note Interest Shortfall" shall mean, with respect to any
Quarterly Distribution Date, the excess, if any, of (a) the Class A-5
Noteholders' Interest Distribution Amount on the immediately preceding Quarterly
Distribution Date over (b) the amount of interest actually distributed to the
Class A-5 Noteholders on such preceding Quarterly Distribution Date, plus
interest on the amount of such excess interest due to the Class A-5 Noteholders,
to the extent permitted by law, at the interest rate borne by the Class A-5
Notes from such immediately preceding Quarterly Distribution Date to the current
Quarterly Distribution Date, as determined by the Administrator.
"Class A-5 Noteholder" shall mean the Person in whose name a Class A-5
Note is registered in the Note registration books maintained by the Trustee.
"Class A-5 Noteholders' Interest Distribution Amount" shall mean, with
respect to any Quarterly Distribution Date, the sum of (a) the amount of
interest accrued at the Class A-5 Rate for the related Interest Accrual Period
on the aggregate outstanding principal balances of the Class A-5 Notes
immediately prior to such Quarterly Distribution Date; and (b) the Class A-5
Note Interest Shortfall for such Quarterly Distribution Date, as based on the
actual number of days in such Interest Accrual Period divided by 360 and
rounding the resultant figure to the fifth decimal place, as determined by the
Administrator.
"Class A-5 Notes" shall mean the $457,000,000 Student Loan Asset-Backed
Notes, Senior Class A-5 issued by the Issuer pursuant to this Indenture,
substantially in the form of Exhibit B-5.
9
"Class A-5 Rate" shall mean, for any Interest Accrual Period, other
than the first Interest Accrual Period, the applicable Three-Month LIBOR, plus
0.16%, as determined by the Administrator. For the first Accrual Period, the
Class A-5 Rate shall be determined by reference to the following formula:
x + [27/33 * (y-x)] plus 0.16%, as determined by the Administrator.
where:
x = Three-Month LIBOR, and
y = Four-Month LIBOR.
"Class B Maturity Date" shall mean the January, 2041 Quarterly
Distribution Date.
"Class B Note Interest Shortfall" shall mean, with respect to any
Quarterly Distribution Date, the excess, if any, of (a) the Class B Noteholders'
Interest Distribution Amount on the immediately preceding Quarterly Distribution
Date over (b) the amount of interest actually distributed to the Class B
Noteholders on such preceding Quarterly Distribution Date, plus interest on the
amount of such excess interest due to the Class B Noteholders, to the extent
permitted by law, at the interest rate borne by the Class B Notes from such
immediately preceding Quarterly Distribution Date to the current Quarterly
Distribution Date, as determined by the Administrator.
"Class B Noteholder" shall mean the Person in whose name a Class B Note
is registered in the Note registration books maintained by the Trustee.
"Class B Noteholders' Interest Distribution Amount" shall mean, with
respect to any Quarterly Distribution Date, the sum of (a) the amount of
interest accrued at the Class B Rate for the related Interest Accrual Period on
the aggregate outstanding principal balances of the Class B Notes immediately
prior to such Quarterly Distribution Date; and (b) the Class B Note Interest
Shortfall for such Quarterly Distribution Date, as based on the actual number of
days in such Interest Accrual Period divided by 360 and rounding the resultant
figure to the fifth decimal place, as determined by the Administrator.
"Class B Notes" shall mean the $60,626,000 Student Loan Asset-Backed
Notes, Subordinate Class B issued by the Issuer pursuant to this Indenture,
substantially in the form of Exhibit B-6 hereto.
"Class B Obligations" shall mean Class B Notes.
"Class B Percentage" shall mean, for any Quarterly Distribution Date,
(a) prior to the Stepdown Date or with respect to any Quarterly Distribution
Date on which a Trigger Event is in effect, zero; or (b) on and after the
Stepdown Date and provided that no Trigger Event is in effect, a fraction
expressed as a percentage, the numerator of which is the aggregate Outstanding
Amount of the Class B Notes and the denominator of which is the aggregate
Outstanding Amount of all Notes, in each case determined on the Determination
Date by the Administrator for that Quarterly Distribution Date.
10
"Class B Principal Distribution Amount" shall mean, for any Quarterly
Distribution Date, the product of the Principal Distribution Amount and the
Class B Percentage.
"Class B Rate" shall mean, for any Interest Accrual Period, other than
the first Interest Accrual Period, the applicable Three-Month LIBOR, plus 0.30%,
as determined by the Administrator. For the first Interest Accrual Period, the
Class B Rate shall be determined by reference to the following formula:
x + [27/33 * (y-x)] plus 0.30%, as determined by the Administrator.
where:
x = Three-Month LIBOR, and
y = Four-Month LIBOR.
"Clearing Agency" shall mean an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act. The initial Clearing Agency
shall be The Depository Trust Company and the initial nominee for the Clearing
Agency shall be Cede & Co.
"Clearing Agency Participant" shall mean a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time. Each reference to a section of the Code herein shall be deemed to
include the United States Treasury Regulations, including applicable temporary
and proposed regulations, relating to such section which are applicable to the
Notes or the use of the proceeds thereof. A reference to any specific section of
the Code shall be deemed also to be a reference to the comparable provisions of
any enactment which supersedes or replaces the Code thereunder from time to
time.
"Collection Fund" shall mean the Fund by that name created in Section
5.01(c) hereof and further described in Section 5.04 hereof.
"Collection Period" shall mean, with respect to the first Quarterly
Distribution Date, the period beginning on September 1, 2004 and ending on
December 31, 2004, and with respect to each subsequent Quarterly Distribution
Date, the Collection Period means the three calendar months immediately
following the end of the previous Collection Period, beginning January 1, 2005.
"Commission" shall mean the Securities and Exchange Commission.
"Contract of Insurance" shall mean the contract of insurance between
the Eligible Lender and the Secretary.
"Counterparty" shall mean the counterparties to any Derivative Product
entered into pursuant to Section 3.03 hereof.
11
"Counterparty Payments" shall mean any payment to be made to, or for
the benefit of, the Issuer under a Derivative Product.
"Custodian Agreement" shall mean, collectively, the custodian
agreements with the Master Servicer and any Subservicer or other custodian or
bailee related to Financed Eligible Loans.
"Cutoff Date" shall mean (i) with respect to the initial pool of
Financed Eligible Loans, August 31, 2004; and (ii) with respect to subsequently
acquired Eligible Loans, the date on which such loans are transferred to the
Trust.
"Date of Issuance" shall mean September 29, 2004.
"Delaware Trustee" shall mean Wilmington Trust Company, a Delaware
banking corporation, solely in its capacity as the trustee of the Issuer under
the Trust Agreement.
"Delaware Trustee Fee" shall mean an amount equal to $5,500 per annum,
payable on each June Quarterly Distribution Date, beginning on the June 2005
Quarterly Distribution Date.
"Department" shall mean the United States Department of Education, an
agency of the Federal government.
"Derivative Product" shall mean any Derivative Product entered into
subsequent to the Date of Issuance subject to the provisions of Section 3.03
hereof.
"Derivative Value" shall mean the value of a Derivative Product, if
any, to the Counterparty, provided that such value is defined and calculated in
substantially the same manner as amounts are defined and calculated pursuant to
the applicable provisions of an ISDA Master Agreement.
"Determination Date" shall mean, with respect to any Distribution Date
or the Monthly Servicing Payment Date, as applicable, the fourth Business Day
preceding such Distribution Date or Monthly Servicing Payment Date.
"Eligible Lender" shall mean (i) Zions First National Bank, in its
capacity as eligible lender trustee under the terms of the Eligible Lender Trust
Agreement, and (ii) any "eligible lender," as defined in the Higher Education
Act, and which has received an eligible lender designation from the Secretary
with respect to Eligible Loans made under the Higher Education Act.
"Eligible Lender Trust Agreement" shall mean the Eligible Lender Trust
Agreement, dated as of September 1, 2004, between the Issuer and Zions First
National Bank, as eligible lender trustee, as amended from time to time.
"Eligible Loan" shall mean any loan made to finance post-secondary
education that is made under the Higher Education Act, provided that if, after
any reauthorization or amendment of the Higher Education Act, loans authorized
thereunder, including, without limitation, their benefits, any provisions, or
the servicing thereof, are materially different from loans so authorized prior
to such reauthorization or amendment, such loans authorized after such
reauthorization or amendment shall not constitute Eligible Loans unless a Rating
Confirmation is obtained.
12
"Eligible Loan Acquisition Certificate" shall mean a certificate signed
by an Authorized Representative of the Issuer in substantially the form attached
as Exhibit A hereto.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
"Event of Bankruptcy" shall mean (a) the Issuer shall have commenced a
voluntary case or other proceeding seeking liquidation, reorganization or other
relief with respect to itself or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, or shall have made a general assignment for
the benefit of creditors, or shall have declared a moratorium with respect to
its debts or shall have failed generally to pay its debts as they become due, or
shall have taken any action to authorize any of the foregoing; or (b) an
involuntary case or other proceeding shall have been commenced against the
Issuer seeking liquidation, reorganization or other relief with respect to it or
its debts under any bankruptcy, insolvency or other similar law now or hereafter
in effect or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part of its
property provided such action or proceeding is not dismissed within 60 days.
"Event of Default" shall have the meaning specified in Article VI
hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Financed" or "Financing" when used with respect to Eligible Loans,
shall mean or refer to Eligible Loans (a) acquired by the Issuer with balances
in the Acquisition Fund or otherwise deposited in or accounted for in the
Acquisition Fund or otherwise constituting a part of the Trust Estate and (b)
Eligible Loans substituted or exchanged for Financed Eligible Loans, but does
not include Eligible Loans released from the lien of this Indenture and sold or
transferred, to the extent permitted by this Indenture.
"Fiscal Year" shall mean the fiscal year of the Issuer (initially
January 1 to December 31) as otherwise established from time to time.
"Fitch" shall mean Fitch Inc., its successors and assigns.
"Four-Month LIBOR," see "Three-Month LIBOR" below.
"Funds" shall mean each of the Funds created pursuant to Section 5.01
hereof.
"Guarantee" or "Guaranteed" shall mean, with respect to an Eligible
Loan, the insurance or guarantee by a Guaranty Agency pursuant to such Guaranty
Agency's Guarantee Agreement of the maximum percentage of the principal of and
accrued interest on such Eligible Loan allowed by the terms of the Higher
Education Act with respect to such Eligible Loan at the time it was originated
and the coverage of such Eligible Loan by the federal reimbursement contracts,
providing, among other things, for reimbursement to such Guaranty Agency for
payments made by it on defaulted Eligible Loans insured or guaranteed by such
Guaranty Agency of at least the minimum reimbursement allowed by the Higher
Education Act with respect to a particular Eligible Loan.
13
"Guarantee Agreements" shall mean a guaranty or lender agreement
between the Trustee or the Eligible Lender Trustee and any Guaranty Agency, and
any amendments thereto.
"Guaranty Agency" shall mean any entity authorized to guarantee student
loans under the Higher Education Act and with which the Trustee or the Eligible
Lender Trustee maintains a Guarantee Agreement.
"Higher Education Act" shall mean the Higher Education Act of 1965, as
amended or supplemented from time to time, or any successor federal act and all
regulations, directives, bulletins and guidelines promulgated from time to time
thereunder.
"Highest Priority Obligations" shall mean at any time when Class A
Obligations are Outstanding, the Class A Obligations, and at any time when no
Class A Obligations are Outstanding, the Class B Obligations.
"Indenture" shall mean this Indenture of Trust, including all
supplements and amendments hereto.
"Independent" shall mean, when used with respect to any specified
Person, that the Person (a) is in fact independent of the Trust, any other
obligor upon the Notes, the Seller and any Affiliate of any of the foregoing
Persons; (b) does not have any direct financial interest or any material
indirect financial interest in the Trust, any such other obligor, the Seller or
any Affiliate of any of the foregoing Persons; and (c) is not connected with the
Trust, any such other obligor, the Seller or any Affiliate of any of the
foregoing Persons as an officer, employee, promoter, underwriter, placement
agent, trustee, partner, director or person performing similar functions.
"Independent Certificate" shall mean a certificate or opinion to be
delivered to the Trustee under the circumstances described in, and otherwise
complying with, the applicable requirements of this Indenture, made by an
Independent appraiser or other expert appointed by an Issuer Order and approved
by the Trustee in the exercise of reasonable care, and such opinion or
certificate shall state that the signer has read the definition of "Independent"
in this Indenture and that the signer is Independent within the meaning thereof.
"Index Maturity" shall mean (i) for Three-Month LIBOR, three months and
(ii) for Four-Month LIBOR, four months.
"Initial Pool Balance" shall mean the Pool Balance as of the Cutoff
Date, which is $1,994,271,462.
"Insurance" or "Insured" or "Insuring" shall mean, with respect to an
Eligible Loan, the insuring by the Secretary (as evidenced by a Certificate of
Insurance or other document or certification issued under the provisions of the
Higher Education Act) under the Higher Education Act of 100% of the principal of
and accrued interest on such Eligible Loan.
14
"Interest Accrual Period" shall mean, initially, the period commencing
on the Date of Issuance to but not including January 25, 2005, and thereafter,
with respect to each Quarterly Distribution Date, the period beginning on the
prior Quarterly Distribution Date and ending on the day immediately preceding
such Quarterly Distribution Date.
"Interest Benefit Payment" shall mean an interest payment on Eligible
Loans received pursuant to the Higher Education Act and an agreement with the
federal government, or any similar payments.
"Investment Agreement" shall mean, collectively, the (i) Investment
Agreement dated September 29, 2004, between the Trustee and Bayerische
Landesbank, (ii) Investment Agreement dated September 29, 2004, between the
Trustee and XL Asset Funding Company I LLC and (iii) any other investment
agreement approved by the Rating Agencies. The issuance by the Rating Agencies
of the ratings on the Notes on the Date of Issuance shall serve as the Rating
Confirmation required with respect to the Investment Agreements set forth in (i)
and (ii) above.
"Investment Securities" shall mean:
(a) direct obligations of, or obligations on which the timely
payment of the principal of and interest on which are unconditionally
and fully guaranteed by, the United States of America;
(b) interest-bearing time or demand deposits, certificates of
deposit or other similar banking arrangements with a maturity of 12
months or less with any bank, trust company, national banking
association or other depository institution, including those of the
Trustee, provided that, at the time of deposit or purchase such
depository institution has commercial paper which is rated "A-1+" by S&P
and "F1" by Fitch and has the required ratings from Moody's
corresponding to the duration of such investment set forth below;
(c) interest-bearing time or demand deposits, certificates of
deposit or other similar banking arrangements with a maturity of 24
months or less, but more than 12 months, with any bank, trust company,
national banking association or other depository institution, including
those of the Trustee and any of its affiliates, provided that, at the
time of deposit or purchase such depository institution has senior debt
rated "A" or higher by S&P or higher by Fitch, if commercial paper is
outstanding, commercial paper which is rated "A-1+" by S&P and "F1" by
Fitch and has the required ratings from Moody's corresponding to the
duration of such investment set forth below;
(d) interest-bearing time or demand deposits, certificates of
deposit or other similar banking arrangements with a maturity of more
than 24 months with any bank, trust company, national banking
association or other depository institution, including those of the
Trustee and any of its affiliates, provided that, at the time of deposit
or purchase such depository institution has senior debt rated "AA" or
higher by S&P and "AA" or higher by Fitch, if commercial paper is
outstanding, commercial paper which is rated "A-1+" by S&P, "P-1" by
Moody's and "F1" by Fitch and has the required ratings from Moody's
corresponding to the duration of such investment set forth below;
15
(e) bonds, debentures, notes or other evidences of indebtedness
issued or guaranteed by any of the following agencies: Federal Farm
Credit Banks, Federal Home Loan Mortgage Corporation; the Export-Import
Bank of the United States; the Federal National Mortgage Association;
the Farmers Home Administration; Federal Home Loan Banks provided such
obligation is rated "AAA" by S&P, "Aaa" by Moody's and "AAA" by Fitch;
or any agency or instrumentality of the United States of America which
shall be established for the purposes of acquiring the obligations of
any of the foregoing or otherwise providing financing therefor;
(f) repurchase agreements and reverse repurchase agreements,
other than overnight repurchase agreements and overnight reverse
repurchase agreements, with banks, including the Trustee and any of its
affiliates, which are members of the Federal Deposit Insurance
Corporation or firms which are members of the Securities Investors
Protection Corporation, in each case whose outstanding, unsecured debt
securities are rated no lower than two subcategories below the highest
rating on any series of Outstanding Notes by S&P and Fitch, if
commercial paper is outstanding, commercial paper which is rated "A-1+"
by S&P and "F1" by Fitch and has the required ratings from Moody's
corresponding to the duration of such investment set forth below;
(g) overnight repurchase agreements and overnight reverse
repurchase agreements at least 101% collateralized by securities
described in subparagraph (a) of this definition and with a
counterparty, including the Trustee and any of its affiliates, that has
senior debt rated "AA" or higher by S&P and "A" or higher by Fitch, if
commercial paper is outstanding, commercial paper which is rated "A-1+"
by S&P and "F1" by Fitch and has the required ratings from Moody's
corresponding to the duration of such investment set forth below, or a
counterparty approved in writing by S&P, Moody's and Fitch,
respectively;
(h) investment agreements or guaranteed investment contracts,
which may be entered into by and among the Issuer and/or the Trustee and
any bank, bank holding company, corporation or any other financial
institution, including the Trustee and any of its affiliates, whose
outstanding (i) commercial paper is rated "A-1+" by S&P and "F1" by
Fitch for agreements or contracts with a maturity of 12 months or less
and has the required ratings from Moody's corresponding to the duration
of such investment set forth below; (ii) unsecured long-term debt is
rated no lower than two subcategories below the highest rating on any
series of Outstanding Notes by S&P and Fitch and, if commercial paper is
outstanding, commercial paper which is rated "A-1+" by S&P and "F1" by
Fitch for agreements or contracts with a maturity of 24 months or less,
but more than 12 months and has the required ratings from Moody's
corresponding to the duration of such investment set forth below, or
(iii) unsecured long-term debt which is rated no lower than two
subcategories below the highest rating on any series of Outstanding
Notes by S&P and Fitch and, if commercial paper is outstanding,
commercial paper which is rated "A-1+" by S&P and "F1" by Fitch for
agreements or contracts with a maturity of more than 24 months and has
the required ratings from Moody's corresponding to the duration of such
investment set forth below, or, in each case, by an insurance company
whose claims-paying ability is so rated;
16
(i) "tax exempt bonds" as defined in Section 150(a)(6) of the
Code, other than "specified private activity bonds" as defined in
Section 57(a)(5)(C) of the Code, that are rated in the highest category
by S&P and Fitch for long-term or short-term debt or shares of a
so-called money market or mutual fund rated "AAAm/AAAm-G" or higher by
S&P, and "AA/F1+" or higher by Fitch and has the required ratings from
Moody's corresponding to the duration of such investment set forth
below, that do not constitute "investment property" within the meaning
of Section 148(b)(2) of the Code, provided that the fund has all of its
assets invested in obligations of such rating quality;
(j) commercial paper, including that of the Trustee and any of
its affiliates, which is rated in the single highest classification,
"A-1+" by S&P and "F1" by Fitch and has the required ratings from
Moody's corresponding to the duration of such investment set forth
below, and which matures not more than 270 days after the date of
purchase;
(k) investments in a money market fund rated at least "AAAm" or
"AAAm-G" by S&P, "Aaa" by Moody's and "AA" or "F1" by Fitch, including
funds for which the Trustee or an affiliate thereof acts as investment
advisor or provides other similar services for a fee;
(l) any Investment Agreement; and
(m) any other investment with a Rating Confirmation from each
Rating Agency.
Each Investment Security or the provider of such Investment Security
(other than those described in paragraphs (a), (e) and (k) of this definition)
shall have the following Moody's long-term and or short-term ratings
corresponding to the duration of such investment:
Maximum Maturity Minimum Ratings
---------------- ---------------
One Month "A2" or "Prime-1"
Three Months "A1" and "Prime-1"
Six Months "Aa3" and "Prime-1"
Greater than Six Months "Aaa" and "Prime-1"
"ISDA Master Agreement" shall mean the ISDA Master Agreement, copyright
1992, as amended from time to time, and as in effect with respect to any
Derivative Product.
"Issuer" shall mean Nelnet Student Loan Trust 2004-4, a statutory trust
organized and existing under the laws of the State, and any successor thereto.
"Issuer Derivative Payment" shall mean any payment required to be made
by or on behalf of the Issuer due to a Counterparty pursuant to a Derivative
Product.
17
"Issuer Order" shall mean a written order signed in the name of the
Issuer by an Authorized Representative.
"LIBOR" shall mean Three-Month LIBOR or Four-Month LIBOR as applicable.
"LIBOR Determination Date" shall mean, for each Interest Accrual
Period, the second Business Day before the beginning of that Interest Accrual
Period.
"Liquidated Financed Eligible Loan" shall mean any defaulted Financed
Eligible Loan liquidated by the Master Servicer or a Subservicer (which shall
not include any Financed Eligible Loan on which payments are received from a
Guaranty Agency) or which such Master Servicer or Subservicer has, after using
all reasonable efforts to realize upon such Financed Eligible Loan, determined
to charge off.
"Liquidation Proceeds" shall mean, with respect to any Liquidated
Financed Eligible Loan which became a Liquidated Financed Eligible Loan during
the current Collection Period in accordance with the Master Servicer or a
Subservicer's customary servicing procedures, the moneys collected in respect of
the liquidation thereof from whatever source, other than moneys collected with
respect to any Liquidated Financed Eligible Loan which was written off in prior
Collection Periods or during the current Collection Period, net of the sum of
any amounts expended by such Master Servicer or Subservicer in connection with
such liquidation and any amounts required by law to be remitted to the obligor
on such Liquidated Financed Eligible Loan.
"Master Promissory Note" shall mean a Master Promissory Note in the
form mandated by Section 432(m)(1) of the Higher Education Act, as added by
Public Law No: 105-244 ss. 427, 112 Stat. 1702 (1998), as amended by Public Law
No: 106-554 (enacted December 21, 2000) and as codified in 20 U.S.C. ss.
1082(m)(1).
"Master Servicer" shall mean National Education Loan Network, Inc. and
any other master servicer or successor master servicer selected by the Issuer,
including an affiliate of the Issuer, so long as the Issuer obtains a Rating
Confirmation as to each such other master servicer.
"Master Servicing Agreement" shall mean (a) the Master Servicing
Agreement, dated as of September 1, 2004, among the Issuer, the Depositor, the
Administrator and the Master Servicer, and (b) any replacement master servicing
agreement among the Issuer, the Administrator and any other Master Servicer.
"Maturity" when used with respect to any Note, shall mean the date on
which the principal thereof becomes due and payable as therein or herein
provided, whether at its Note Final Maturity Date, by earlier prepayment or
purchase, by declaration of acceleration, or otherwise.
"Minimum Purchase Amount" shall mean, on any Quarterly Distribution
Date, an amount that would be sufficient to (a) reduce the Outstanding Amount of
each class of Notes on such Quarterly Distribution Date to zero; (b) pay to the
respective Registered Owners the Class A Noteholders' Interest Distribution
Amount and the Class B Noteholders' Interest Distribution Amount payable on such
Quarterly Distribution Date; (c) pay any Servicing Fees and Carryover Servicing
Fees, Trustee Fees and Delaware Trustee Fees due and owing; and (d) pay any
Issuer Derivative Payments due and owing.
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"Monthly Servicing Payment Date" shall mean the twenty-fifth day of
each calendar month or, if such day is not a Business Day, the immediately
succeeding Business Day, commencing on October 25, 2004.
"Moody's" shall mean Moody's Investors Service, Inc., its successors and
assigns.
"MPN Loan" shall mean a loan originated pursuant to the Federal Family
Education Loan Program and the Higher Education Act and evidenced by a Master
Promissory Note.
"Noteholder" shall mean, (a) with respect to a book-entry Note, the
Person who is the owner of such book-entry Note, as reflected on the books of
the Clearing Agency, or on the books of a Person maintaining an account with
such Clearing Agency (directly as a Clearing Agency Participant or as an
indirect participant, in each case in accordance with the rules of such Clearing
Agency); and (b) with respect to Notes held in definitive form pursuant to
Section 2.09 hereof, the Person in whose name a Note is registered in the Note
registration books of the Trustee.
"Note Final Maturity Date" for a class of Notes shall mean the Class
A-1 Maturity Date, the Class A-2 Maturity Date, the Class A-3 Maturity Date, the
Class A-4 Maturity Date, the Class A-5 Maturity Date or the Class B Maturity
Date, as applicable.
"Notes" shall mean, collectively, the Class A Notes and the Class B
Notes.
"Obligations" shall mean, collectively, the Class A Obligations and the
Class B Obligations.
"Opinion of Counsel" shall mean (a) with respect to the Trust, one or
more written opinions of counsel who may, except as otherwise expressly provided
in the Indenture, be employees of or counsel to the Delaware Trustee, the Trust,
the Seller or an Affiliate of the Seller and who shall be satisfactory to the
Trustee, and which opinion or opinions shall be addressed to the Trustee, as
trustee, shall comply with any applicable requirements of the Trust Indenture
Act and shall be in form and substance satisfactory to the Trustee; and (b) with
respect to the Seller, the Administrator, the Master Servicer or a Subservicer,
one or more written opinions of counsel who may be an employee of or counsel to
the Seller, the Administrator, the Master Servicer or a Subservicer, which
counsel shall be acceptable to the Trustee and the Delaware Trustee.
"Optional Purchase Date" shall have the meaning set forth in Section
10.03 hereof.
"Outstanding" shall mean, when used in connection with any Note, a Note
which has been executed and delivered pursuant to this Indenture which at such
time remains unpaid as to principal or interest, excluding Notes which have been
replaced pursuant to Section 2.03 or 2.04 hereof and when used in connection
with a Derivative Product, a Derivative Product which has not expired or been
terminated, unless provision has been made for such payment pursuant to Section
10.02 hereof.
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"Outstanding Amount" shall mean the aggregate principal amount of all
Notes Outstanding at the date of determination or, if the context so requires,
the aggregate principal amount of one or more classes of Class A Notes or Class
B Notes Outstanding at the date of determination.
"Person" shall mean an individual, corporation, partnership, joint
venture, association, joint stock company, trust, limited liability company,
unincorporated organization or government or agency, or political subdivision
thereof.
"Pool Balance" shall mean as of any date the aggregate principal
balance of the Financed Eligible Loans on such date (including accrued interest
thereon to the extent such interest is expected to be capitalized), after giving
effect to the following, without duplication: (a) all payments received by the
Issuer through such date from or on behalf of obligors on such Financed Eligible
Loans; (b) all Purchase Amounts on Financed Eligible Loans received by the
Issuer through such date from the Seller, the Master Servicer or a Subservicer;
(c) all Liquidation Proceeds and Realized Loss on Financed Eligible Loans
liquidated through such date; (d) the aggregate amount of adjustments to
balances of Financed Eligible Loans permitted to be effected by the Master
Servicer or a Servicer under the Master Servicing Agreement or its related
Subservicing Agreement, if any, recorded through such date; and (e) the
aggregate amount by which reimbursements by Guarantee Agencies of the unpaid
principal balance of defaulted Financed Eligible Loans through such date are
reduced from 100% to 98% or other applicable percentage, as required by the risk
sharing provisions of the Higher Education Act. The Pool Balance shall be
calculated by the Administrator and certified to the Trustee, upon which the
Trustee may conclusively rely with no duty to further examine or determine such
information.
"Principal Distribution Amount" shall mean, as determined by the
Administrator, (a) with respect to the initial Quarterly Distribution Date, the
amount by which the sum of the Outstanding Amount of the Notes exceeds the
Adjusted Pool Balance as of the last day of the initial Collection Period; and
(b) with respect to each subsequent Quarterly Distribution Date, the excess of
(i) the Adjusted Pool Balance as of the last day of the Collection Period
preceding the related Collection Period, less (ii) the Adjusted Pool Balance as
of the last day of the related Collection Period, plus the amount, if any, of
the Principal Distribution Amount due on the prior Quarterly Distribution Date
that was not paid and on the October 25, 2005 Quarterly Distribution Date, any
amount transferred to the Collection Fund from the Capitalized Interest Fund on
that Quarterly Distribution Date. Further, on the Note Final Maturity Date for a
class of Notes, the Principal Distribution Amount on that date also shall
include the amount needed to reduce the Outstanding principal amount of such
class of Notes to zero.
"Principal Office" shall mean the principal office of the party
indicated, as set forth in Section 9.01 hereof or elsewhere in this Indenture.
"Priority Termination Payment" shall mean, with respect to a Derivative
Product, any termination payment payable by the Issuer under such Derivative
Product relating to an early termination of such Derivative Product by the
Counterparty, as the non-defaulting party, following (i) a monthly payment
default by the Issuer thereunder, (ii) the occurrence of an Event of Default
specified in Section 6.01(d) hereof or (iii) the Trustee's taking any action
hereunder to liquidate the Trust Estate following an Event of Default and
acceleration of the Notes pursuant to Section 6.04 hereof.
20
"Program" shall mean the Sponsor's program for the origination and the
purchase of Eligible Loans, as the same may be modified from time to time.
"Purchase Amount" with respect to any Financed Eligible Loan shall mean
the amount required to prepay in full such Financed Eligible Loan under the
terms thereof including all accrued interest thereon and any unamortized
premium, it being acknowledged that any accrued and unpaid Interest Subsidy
Payments or Special Allowance Payments will continue to be payable to the
Trustee and constitute part of the Trust Estate.
"Quarterly Distribution Date" shall mean the 25th day of January,
April, July and October, or, if such day is not a Business Day, the immediately
succeeding Business Day, commencing on January 25, 2005.
"Rating" shall mean one of the rating categories of Fitch, Moody's and
S&P or any other Rating Agency, provided Fitch, Moody's and S&P or any other
Rating Agency, as the case may be, is currently rating the Notes.
"Rating Agency" shall mean each of Fitch, Moody's and S&P and their
successors and assigns or any other rating agency requested by the Issuer to
maintain a Rating on any of the Notes.
"Rating Confirmation" shall mean a letter from each Rating Agency then
providing a Rating for any of the Notes, confirming that a proposed action,
failure to act, or other event specified therein will not, in and of itself,
result in a downgrade of any of the Ratings then applicable to the Notes, or
cause any Rating Agency to suspend, withdraw or qualify the Ratings then
applicable to the Notes.
"Realized Loss" shall mean the excess of the principal balance
(including any interest that had been or had been expected to be capitalized) of
any Liquidated Financed Eligible Loan over Liquidation Proceeds with respect to
such Financed Eligible Loan to the extent allocable to principal (including any
interest that had been or had been expected to be capitalized).
"Record Date" shall mean, with respect to a Distribution Date, the
close of business on the day preceding such Distribution Date.
"Reference Banks" shall mean, with respect to a determination of LIBOR
for any Interest Accrual Period by the Administrator, four major banks in the
London interbank market selected by the Administrator.
"Registered Owner" shall mean any Noteholder, and, with respect to a
Derivative Product, any Counterparty, unless the context otherwise requires.
"Regulations" shall mean the Regulations promulgated from time to time
by the Secretary or any Guaranty Agency guaranteeing Financed Eligible Loans.
21
"Reserve Fund" shall mean the Fund by that name created in Section
5.01(d) hereof and further described in Section 5.05 hereof, including any
Accounts and Subaccounts created therein.
"S&P" shall mean Standard & Poor's Ratings Group, a Division of The
McGraw-Hill Companies, Inc., its successors and assigns.
"Secretary" shall mean the Secretary of the United States Department of
Education or any successor to the pertinent functions thereof under the Higher
Education Act.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Securities Depository" or "Depository" shall mean The Depository Trust
Company and its successors and assigns or if, (a) the then Securities Depository
resigns from its functions as depository of the Notes or (b) the Issuer
discontinues use of the Securities Depository, any other securities depository
which agrees to follow the procedures required to be followed by a securities
depository in connection with the Notes and which is selected by the Issuer with
the consent of the Trustee.
"Seller" shall mean Nelnet Student Loan Funding, LLC, and its
successors and assigns.
"Servicer's Report" shall mean the servicer reports to be furnished to
the Issuer by the Master Servicer or a Subservicer pursuant to the Master
Servicing Agreement or its related Subservicing Agreement.
"Servicing Fee" shall mean the fees and expenses due to the Master
Servicer and any Subservicer under the terms of the Master Servicing Agreement
or its related Subservicing Agreement and the fees and expenses due to any
custodian under the terms of a Custodian Agreement.
"Special Allowance Payments" shall mean the special allowance payments
authorized to be made by the Secretary by Section 438 of the Higher Education
Act, or similar allowances, if any, authorized from time to time by federal law
or regulation.
"Specified Reserve Fund Balance" shall mean, with respect to any
Quarterly Distribution Date, the greater of (a) 0.25% of the Pool Balance as of
the close of business on the last day of the related Collection Period; and (b)
0.150% of the Initial Pool Balance, provided that in no event will such balance
exceed the sum of the outstanding principal amount of the Notes and provided
further, that such Specified Reserve Fund Balance may be reduced with a Rating
Confirmation.
"Sponsor" shall mean Nelnet Student Loan Funding, LLC, and its
successors and assigns and any other Person or Persons as may become a Sponsor
pursuant to the terms of the Trust Agreement.
"State" shall mean the State of Delaware.
22
"Stepdown Date" shall mean the earlier to occur of (a) the Quarterly
Distribution Date in October of 2009 and (b) the first date on which all of the
Class A Notes are no longer Outstanding.
"Student Loan Purchase Agreement" shall mean, collectively, (a) the
Loan Purchase Agreement, dated as of September 1, 2004, between the Issuer and
the Seller and (b) each additional student loan purchase agreement entered into
between the Issuer and the Seller for the purchase of Eligible Loans which
constitute "add-on consolidation loans."
"Subaccount" shall mean any of the subaccounts which may be created and
established within any Account by this Indenture.
"Subservicer" shall mean Nelnet, Inc., Pennsylvania Higher Education
Assistance Agency, and any other additional subservicer or successor subservicer
selected by the Issuer, including an affiliate of the Issuer, so long as the
Issuer obtains a Rating Confirmation as to each such other subservicer.
"Subservicing Agreement" shall mean (a) the Nelnet, Inc. Subservicing
Agreement, dated as of September 1, 2004, between the Master Servicer and
Nelnet, Inc., as subservicer, and (b) any subservicing agreement between the
Master Servicer and any other Subservicer.
"Supplemental Indenture" shall mean an agreement supplemental hereto
executed pursuant to Article VIII hereof.
"Telerate Page 3750" shall mean the display page so designated on the
Telerate Service (or such other page as may replace that page on that service
for the purpose of displaying comparable rates or prices).
"Termination Payment" shall mean, with respect to a Derivative Product,
any termination payment payable by the Issuer under such Derivative Product
relating to an early termination of such Derivative Product by the Counterparty,
as the non-affected party or non-defaulting party, after the occurrence of a
termination event or event of default specified in such Derivative Product,
including any Priority Termination Payment.
"Three-Month LIBOR" and "Four-Month LIBOR" shall mean, with respect to
any Interest Accrual Period, the London interbank offered rate for deposits in
U.S. dollars having the applicable Index Maturity as it appears on Telerate Page
3750 as of 11:00 a.m., London time, on the related LIBOR Determination Date as
determined by the Administrator. If this rate does not appear on Telerate Page
3750, the rate for that day will be determined on the basis of the rates at
which deposits in U.S. dollars, having the index maturity and in a principal
amount of not less than U.S. $1,000,000, are offered at approximately 11:00
a.m., London time, on that LIBOR Determination Date, to prime banks in the
London interbank market by the Reference Banks. The Administrator or the
Trustee, as applicable, will request the principal London office of each
Reference Bank to provide a quotation of its rate. If the Reference Banks
provide at least two quotations, the rate for that day will be the arithmetic
mean of the quotations. If the Reference Banks provide fewer than two
quotations, the rate for that day will be the arithmetic mean of the rates
23
quoted by major banks in New York City, selected by the Administrator or the
Trustee, as applicable, at approximately 11:00 a.m., New York time, on that
LIBOR Determination Date, for loans in U.S. dollars to leading European banks
having the Index Maturity and in a principal amount of not less than U.S.
$1,000,000. If the banks selected as described above are not providing
quotations, Three-Month LIBOR or Four-Month LIBOR, as the case may be, in effect
for the applicable Interest Accrual Period will be Three-Month LIBOR or
Four-Month LIBOR, as the case may be, in effect for the previous Interest
Accrual Period.
"Trigger Event" shall mean, on any Quarterly Distribution Date while
any of the Class A Notes are Outstanding, that (a) the Outstanding Amount of the
Notes, after giving effect to distributions to be made on that Quarterly
Distribution Date, would exceed the sum of the Pool Balance and the Specified
Reserve Fund Balance as of the end of the related Collection Period or (b) the
Student Loans have not been sold pursuant to Section 10.03 or 10.04 hereof after
the Pool Balance falls below 10% of the Initial Pool Balance.
"Trust" shall mean the Nelnet Student Loan Trust 2004-4.
"Trust Agreement" shall mean the Trust Agreement, dated as of September
1, 2004, by and between the Sponsor and the Delaware Trustee, as may be amended
pursuant to the terms thereof.
"Trust Auction Date" shall have the meaning set forth in Section 10.04
hereof.
"Trust Estate" shall mean the property described as such in the
granting clauses hereto.
"Trust Indenture Act" shall mean the Trust Indenture Act of 1939, as
amended, and as in force at the date as of which this Indenture was executed,
except as provided in Section 8.05 hereof.
"Trustee" shall mean Zions First National Bank, acting in its capacity
as Trustee under this Indenture, or any successor trustee designated pursuant to
this Indenture.
"Trustee Fee" shall mean an amount equal to the annual amount set forth
in the Trustee Fee Letter, dated September 1, 2004. Such fee shall be in
satisfaction of the Trustee's compensation as trustee under this Indenture and
as eligible lender trustee under the Eligible Lender Trust Agreement.
"Value" on any calculation date when required under this Indenture
shall mean the value of the Trust Estate calculated by the Issuer with respect
to clause (a) and by the Trustee with respect to clauses (b) and (c) as follows:
(a) with respect to any Eligible Loan owned by the Issuer as
of the calculation date, the unpaid principal amount thereof plus any
accrued but unpaid interest, Interest Benefit Payments and Special
Allowance Payments;
(b) with respect to any funds of the Issuer held under this
Indenture and on deposit in any commercial bank or as to any banker's
acceptance or repurchase agreement or investment contract, the amount
thereof plus accrued but unpaid interest; and
24
(c) with respect to any Investment Securities, the par value
thereof, plus accrued but unpaid interest.
Words importing the masculine gender include the feminine gender, and
words importing the feminine gender include the masculine gender. Words
importing persons include firms, associations and corporations. Words importing
the singular number include the plural number and vice versa. Additional terms
are defined in the body of this Indenture.
ARTICLE II
note DETAILS and FORM OF NOTES
Section 2.01. Note Details. The Notes, together with the Trustee's certificate
of authentication, shall be in substantially the forms set forth in Exhibit B
hereto, with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may, consistently herewith, be determined by the
officers executing the Notes, as evidenced by their execution of the Notes. Any
portion of the text of any Note may be set forth on the reverse thereof, with an
appropriate reference thereto on the face of the Note.
The definitive Notes shall be typewritten, printed, lithographed or
engraved or produced by any combination of these methods (with or without steel
engraved borders), all as determined by the Authorized Representatives executing
such Notes, as evidenced by their execution of such Notes.
Each Note shall be dated the date of its authentication. The terms of
the Notes set forth in Exhibit B hereto are part of the terms of this Indenture.
Section 2.02. Execution, Authentication and Delivery of Notes. The Notes shall
be executed in the name and on behalf of the Issuer by the manual or facsimile
signature of an Authorized Representative. Any Note may be signed (manually or
by facsimile) or attested on behalf of the Issuer by any person who, at the date
of such act, shall hold the proper office or position, notwithstanding that at
the date of authentication, issuance or delivery, such person may have ceased to
hold such office or position.
The Trustee shall upon Issuer Order authenticate and deliver Notes for
original issue in an aggregate principal amount of $2,020,876,000. The aggregate
principal amount of Notes outstanding at any time may not exceed such amount
except as provided in Section 2.04 hereof.
Each Note shall be dated the date of its authentication. The Notes
shall be issuable as registered Notes in minimum denominations of $5,000 and in
integral multiples of $1,000 in excess thereof (the "Authorized Denominations").
No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Note a
certificate of authentication substantially in the form provided for in Section
2.05 hereof.
25
Section 2.03. Registration, Transfer and Exchange of Notes; Persons
Treated as Registered Owners. The Issuer shall cause books for the registration
and for the transfer of the Notes as provided in this Indenture to be kept by
the Trustee which is hereby appointed the transfer agent of the Issuer for the
Notes. Notwithstanding such appointment and with the prior written consent of
the Issuer, the Trustee is hereby authorized to make any arrangements with other
institutions which it deems necessary or desirable in order that such
institutions may perform the duties of transfer agent for the Notes. Upon
surrender for transfer of any Note at the Principal Office of the Trustee, duly
endorsed for transfer or accompanied by an assignment duly executed by the
Registered Owner or his attorney duly authorized in writing, the Issuer shall
execute and the Trustee shall authenticate and deliver in the name of the
transferee or transferees a new fully registered Note or Notes of the same
interest rate and for a like class and aggregate principal amount of the same
maturity.
Notes may be exchanged at the Principal Office of the Trustee for a
like aggregate principal amount of fully registered Notes of the same class,
interest rate and maturity in Authorized Denominations. The Issuer shall execute
and the Trustee shall authenticate and deliver Notes which the Registered Owner
making the exchange is entitled to receive, bearing numbers not
contemporaneously outstanding. The execution by the Issuer of any fully
registered Note of any Authorized Denomination shall constitute full and due
authorization of such denomination and the Trustee shall thereby be authorized
to authenticate and deliver such fully registered Note.
As to any Note, the person in whose name the same shall be registered
shall be deemed and regarded as the absolute owner thereof for all purposes, and
payment of either principal or interest on any fully registered Note shall be
made only to or upon the written order of the Registered Owner thereof or his
legal representative but such registration may be changed as hereinabove
provided. All such payments shall be valid and effectual to satisfy and
discharge the liability upon such Note to the extent of the sum or sums paid.
Each Registered Owner and each transferee of a Note shall be deemed to
represent and warrant that either (a) it is not acquiring the Note directly or
indirectly for, or on behalf of, an ERISA plan or any entity whose underlying
assets are deemed to be plan assets of such ERISA plan; or (b)(i) the
acquisition and holding of the Notes will not result in a nonexempt prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code or similar
law and (ii) if the Notes are subsequently deemed to be "plan assets" pursuant
to the regulations set forth at 29 C.F.R. ss. 2510.3-101, it will promptly
dispose of the Notes.
The Trustee shall require the payment by any Registered Owner
requesting exchange or transfer of any tax or other governmental charge required
to be paid with respect to such exchange or transfer. The applicant for any such
transfer or exchange may be required to pay all taxes and governmental charges
in connection with such transfer or exchange, other than exchanges pursuant to
Section 2.07 hereof.
Section 2.04. Lost, Stolen, Destroyed and Mutilated Notes. Upon receipt
by the Trustee of evidence satisfactory to it of the ownership of and the loss,
theft, destruction or mutilation of any Note and, in the case of a lost, stolen
or destroyed Note, of indemnity satisfactory to it, and upon surrender and
cancellation of the Note, if mutilated, (a) the Issuer shall execute, and the
Trustee shall authenticate and deliver, a replacement Note of the same interest
rate, maturity and denomination in lieu of such lost, stolen, destroyed or
mutilated Note or (b) if such lost, stolen, destroyed or mutilated Note shall
have matured within 15 days be due and payable, in lieu of executing and
delivering a new Note as aforesaid, the Issuer may pay such Note. Any such new
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Note shall bear a number not contemporaneously outstanding. The applicant for
any such new Note may be required to pay all taxes and governmental charges and
all expenses and charges of the Issuer and of the Trustee in connection with the
issuance of such Note. All Notes shall be held and owned upon the express
condition that, to the extent permitted by law, the foregoing conditions are
exclusive with respect to the replacement and payment of mutilated, destroyed,
lost or stolen Notes, negotiable instruments or other securities.
Section 2.05. Trustee's Authentication Certificate. The Trustee's
authentication certificate upon any Notes shall be substantially in the form
attached to the Notes. No Note shall be secured hereby or entitled to the
benefit hereof, or shall be valid or obligatory for any purpose, unless a
certificate of authentication, substantially in such form, has been duly
executed by the Trustee; and such certificate of the Trustee upon any Note shall
be conclusive evidence and the only competent evidence that such Note has been
authenticated and delivered hereunder. The Trustee's certificate of
authentication shall be deemed to have been duly executed by it if manually
signed by an authorized officer or signatory of the Trustee, but it shall not be
necessary that the same person sign the certificate of authentication on all of
the Notes issued hereunder.
Section 2.06. Cancellation and Destruction of Notes by the Trustee.
Whenever any Outstanding Notes shall be delivered to the Trustee for the
cancellation thereof pursuant to this Indenture, upon payment of the principal
amount and interest represented thereby, or for replacement pursuant to Section
2.03 hereof, such Notes shall be promptly cancelled and, within a reasonable
time, cremated or otherwise destroyed by the Trustee and counterparts of a
certificate of destruction evidencing such cremation or other destruction shall
be furnished by the Trustee to the Issuer.
Section 2.07. Temporary Notes. Pending the preparation of definitive
Notes, the Issuer may execute and the Trustee shall authenticate and deliver
temporary Notes. Temporary Notes shall be issuable as fully registered Notes
without coupons, of any denomination, and substantially in the form of the
definitive Notes but with such omissions, insertions and variations as may be
appropriate for temporary Notes, all as may be determined by the Issuer. Every
temporary Note shall be executed by the Issuer and be authenticated by the
Trustee upon the same conditions and in substantially the same manner, and with
like effect, as the definitive Notes. As promptly as practicable the Issuer
shall execute and shall furnish definitive Notes and thereupon temporary Notes
may be surrendered in exchange therefor without charge at the principal office
of the Trustee, and the Trustee shall authenticate and deliver in exchange for
such temporary Notes a like aggregate principal amount of definitive Notes.
Until so exchanged the temporary Notes shall be entitled to the same benefits
under this Indenture as definitive Notes.
Section 2.08. Issuance of Notes. The Issuer shall have the authority,
upon complying with the provisions of this Article, to issue and deliver the
Notes which shall be secured by the Trust Estate. In addition, the Issuer may
enter into any Derivative Products it deems necessary or desirable with respect
to any or all of the Notes.
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Section 2.09. Definitive Notes. If (a) the Administrator advises the
Trustee in writing that the Clearing Agency is no longer willing or able to
discharge its responsibilities with respect to the Notes, and the Administrator
is unable to locate a successor; (b) the Administrator at its option, with the
consent of the applicable Clearing Agency Participants, advises the Trustee in
writing that it elects to terminate the book-entry system through the Clearing
Agency; or (c) after the occurrence of an Event of Default, or a default by the
Master Servicer, a Subservicer or the Administrator under the Master Servicing
Agreement, its related Servicing Agreement or the Administration Agreement,
respectively, Noteholders representing beneficial interests aggregating at least
a majority of the Outstanding Amount of the Notes advise the Clearing Agency
(which shall then notify the Trustee) in writing that the continuation of a
book-entry system through the Clearing Agency is no longer in the best interests
of the Noteholders and the applicable Clearing Agency Participants consent to
the termination of the book-entry system through the Clearing Agency, then the
Trustee shall cause the Clearing Agency to notify all Noteholders, through the
Clearing Agency, of the occurrence of any such event and of the availability of
definitive Notes to Noteholders requesting the same. Upon surrender to the
Trustee of the typewritten Notes representing the book-entry Notes by the
Clearing Agency, accompanied by registration instructions, the Issuer shall
execute and the Trustee shall authenticate the definitive Notes in accordance
with the instructions of the Clearing Agency. None of the Issuer, the Note
Registrar or the Trustee shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying on,
such instructions. Upon the issuance of definitive Notes, the Trustee shall
recognize the holders of the definitive Notes as Registered Owners.
Section 2.10. Payment of Principal and Interest.
(a) The Notes shall accrue interest as provided in the forms of
Class A-1 Notes, Class A-2 Notes, Class A-3 Notes, Class A-4 Notes,
Class A-5 Notes and the Class B Notes set forth in Exhibits B-1, B-2,
B-3, B-4, B-5 and B-6, respectively, hereto. Such interest shall be
payable with respect to each class of Notes on each Quarterly
Distribution Date as specified in Section 5.04(c) hereof, subject to
Section 4.01 hereof. Any installment of interest or principal, if any,
payable on any Note which is punctually paid or duly provided for by the
Issuer on the Quarterly Distribution Date shall be paid to the Person in
whose name such Note is registered on the Record Date by check mailed
first-class, postage prepaid to such Person's address as it appears on
the records of the Trustee on such Record Date, except that, unless
definitive Notes have been issued pursuant to Section 2.09 hereof, with
respect to Notes registered on the Record Date in the name of the
nominee of the Clearing Agency (initially, such nominee to be Cede &
Co.), payment shall be made by wire transfer in immediately available
funds to the account designated by such nominee and except for the final
installment of principal payable with respect to such Note on a
Quarterly Distribution Date or on the Note Final Maturity Date for such
Note which shall be payable as provided below.
(b) The principal of each Note shall be payable in installments
on each Quarterly Distribution Date as provided in Section 5.04(c)
hereof. Notwithstanding the foregoing, the entire unpaid principal
amount of each class of the Notes shall be due and payable, if not
previously paid, on the Note Final Maturity Date for such class of Notes
and on the date on which an Event of Default shall have occurred and be
continuing if the Trustee or the Registered Owners of the Notes
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representing not less than a majority of the Outstanding Amount of the
Notes have declared the Notes to be immediately due and payable in the
manner provided in Section 6.02 hereof. The Trustee shall notify the
Person in whose name a Note is registered at the close of business on
the Record Date preceding the Quarterly Distribution Date on which the
Issuer expects that the final installment of principal of and interest
on such Note will be paid. Such notice shall be mailed or transmitted by
facsimile prior to such final Quarterly Distribution Date and shall
specify that such final installment will be payable only upon
presentation and surrender of such Note and shall specify the place
where such Note may be presented and surrendered for payment of such
installment.
ARTICLE III
PARITY AND PRIORITY OF LIEN; OTHER OBLIGATIONS;
AND DERIVATIVE PRODUCTS
Section 3.01. Parity and Priority of Lien. The provisions, covenants and
agreements herein set forth to be performed by or on behalf of the Issuer shall
be for the equal benefit, protection and security of the Registered Owners of
any and all of the Obligations, all of which, shall be of equal rank without
preference, priority or distinction of any of the Obligations over any other
thereof, except as expressly provided in this Indenture with respect to certain
payment and other priorities.
Section 3.02. Other Obligations. The Available Funds and other moneys,
Financed Eligible Loans, securities, evidences of indebtedness, interests,
rights and properties pledged under this Indenture are and will be owned by the
Issuer free and clear of any pledge, lien, charge or encumbrance thereon or with
respect thereto prior to, of equal rank with or subordinate to the respective
pledges created by this Indenture, except as otherwise expressly provided
herein, and all action on the part of the Issuer to that end has been duly and
validly taken. If any Financed Eligible Loan is found to have been subject to a
lien at the time such Financed Eligible Loan was acquired, the Issuer shall
cause such lien to be released, shall purchase such Financed Eligible Loan from
the Trust Estate for a purchase price equal to its principal amount plus any
unamortized premium, if any, and interest accrued thereon or shall replace such
Financed Eligible Loan with another Eligible Loan with substantially identical
characteristics which replacement Eligible Loan shall be free and clear of liens
at the time of such replacement. Except as otherwise provided herein, the Issuer
shall not create or voluntarily permit to be created any debt, lien or charge on
the Financed Eligible Loans which would be on a parity with, subordinate to, or
prior to the lien of this Indenture; shall not do or omit to do or suffer to be
done or omitted to be done any matter or things whatsoever whereby the lien of
this Indenture or the priority of such lien for the Obligations hereby secured
might or could be lost or impaired; and will pay or cause to be paid or will
make adequate provisions for the satisfaction and discharge of all lawful claims
and demands which if unpaid might by law be given precedence to or any equality
with this Indenture as a lien or charge upon the Financed Eligible Loans;
provided, however, that nothing in this Section shall require the Issuer to pay,
discharge or make provision for any such lien, charge, claim or demand so long
as the validity thereof shall be by it in good faith contested, unless thereby,
in the opinion of the Trustee, the same will endanger the security for the
Obligations; and provided further that any subordinate lien hereon (i.e.,
subordinate to the lien securing the Class A Obligations and the Class B
Obligations) shall be entitled to no payment from the Trust Estate, nor may any
remedy be exercised with respect to such subordinate lien against the Trust
Estate until all Obligations have been paid or deemed paid hereunder.
Section 3.03. Derivative Products; Counterparty Payments; Issuer
Derivative Payments. The Issuer hereby authorizes and directs the Trustee to
acknowledge and agree to any Derivative Product hereafter entered into by the
Issuer and a Counterparty under which (a) the Issuer may be required to make,
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from time to time, payments to a Counterparty and (b) the Trustee may receive,
from time to time, Counterparty Payments for the account of the Issuer. No
Derivative Product shall be entered into subsequent to the Date of Issuance
unless the Trustee shall have received a Rating Confirmation from each Rating
Agency that such Derivative Product will not adversely affect the Rating on any
of the Notes.
ARTICLE IV
PROVISIONS APPLICABLE TO THE NOTES;
DUTIES OF THE ISSUER
Section 4.01. Payment of Principal and Interest. The Issuer covenants
that it will promptly pay, but solely from the Trust Estate, the principal of
and interest, if any, on each and every Obligation issued under the provisions
of this Indenture at the places, on the dates and in the manner specified herein
and in said Obligations according to the true intent and meaning thereof. The
Obligations shall be and are hereby declared to be payable from and equally
secured, except as specifically provided in this Indenture with respect to
certain payment and other priorities, by an irrevocable first lien on and pledge
of the properties constituting the Trust Estate, subject to the application
thereof as permitted by this Indenture, but in no event shall the Registered
Owners or any Counterparty have any right to possession or control of any
Financed Eligible Loans, which shall be held only by the Trustee or its agent or
bailee.
Section 4.02. Covenants as to Additional Conveyances. At any and all
times, the Issuer will duly execute, acknowledge and deliver, or will cause to
be done, executed and delivered, all and every such further acts, conveyances,
transfers and assurances in law as the Trustee shall reasonably require for the
better conveying, transferring and pledging and confirming unto the Trustee, all
and singular, the properties constituting the Trust Estate hereby transferred
and pledged, or intended so to be transferred and pledged.
Section 4.03. Further Covenants of the Issuer.
(a) The Issuer will cause financing statements and continuation
statements with respect thereto at all times to be filed in the office
of the Secretary of State of the State and any other jurisdiction
necessary to perfect and maintain the security interest granted by the
Issuer hereunder.
(b) The Issuer will duly and punctually keep, observe and
perform each and every term, covenant and condition on its part to be
kept, observed and performed, contained in this Indenture and the other
agreements to which the Issuer is a party pursuant to the transactions
contemplated herein, including but not limited to the Basic Documents to
which it is a party, the Guarantee Agreements and the Certificate of
Insurance, and will punctually perform all duties required by the Trust
Agreement and the laws of the State.
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(c) The Issuer shall be operated on the basis of its Fiscal
Year.
(d) The Issuer shall cause to be kept full and proper books of
records and accounts, in which full, true and proper entries will be
made of all dealings, business and affairs of the Issuer which relate to
the Notes and any Derivative Product.
(e) The Issuer, upon written request of the Trustee, will permit
at all reasonable times the Trustee or its agents, accountants and
attorneys, to examine and inspect the property, books of account,
records, reports and other data relating to the Financed Eligible Loans,
and will furnish the Trustee such other information as it may reasonably
request. The Trustee shall be under no duty to make any such examination
unless requested in writing to do so by the Registered Owners of 66% in
collective aggregate principal amount of the Notes at the time
Outstanding, and unless such Registered Owners shall have offered the
Trustee security and indemnity satisfactory to it against any costs,
expenses and liabilities which might be incurred thereby.
(f) The Issuer shall cause an annual audit to be made by an
independent auditing firm of national reputation and file one copy
thereof with the Trustee and each Rating Agency within 150 days of the
close of each Fiscal Year. The Trustee shall be under no obligation to
review or otherwise analyze such audit.
(g) The Issuer covenants that all Financed Eligible Loans upon
receipt thereof shall be delivered to the Trustee or its agent or bailee
to be held pursuant to this Indenture and pursuant to the Master
Servicing Agreement, a Subservicing Agreement or a Custodian Agreement.
(h) Notwithstanding anything to the contrary contained herein,
except upon the occurrence and during the continuance of an Event of
Default hereunder, the Issuer hereby expressly reserves and retains the
privilege to receive and, subject to the terms and provisions of this
Indenture, to keep or dispose of, claim, bring suits upon or otherwise
exercise, enforce or realize upon its rights and interest in and to the
Financed Eligible Loans and the proceeds and collections therefrom, and
neither the Trustee nor any Registered Owner shall in any manner be or
be deemed to be an indispensable party to the exercise of any such
privilege, claim or suit and the Trustee shall be under no obligation
whatsoever to exercise any such privilege, claim or suit; provided,
however, that the Trustee shall have and retain possession or control of
the Financed Eligible Loans pursuant to Section 5.02 hereof (which
Financed Eligible Loans may be held by the Trustee's agent or bailee) so
long as such loans are subject to the lien of this Indenture.
(i) The Issuer shall notify the Trustee and each Rating Agency
in writing prior to entering into any Derivative Product.
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Section 4.04. Enforcement of Master Servicing Agreement and Subservicing
Agreements. The Issuer shall comply with, shall require the Master Servicer to
comply with and shall cause the Master Servicer to require the Subservicers to
comply with the following whether or not the Issuer is otherwise in default
under this Indenture:
(a) cause to be diligently enforced and taken all reasonable
steps, actions and proceedings necessary for the enforcement of all
terms, covenants and conditions of the Master Servicing Agreement and
all Subservicing Agreements, including the prompt payment of all amounts
due the Issuer thereunder, including, without limitation, all principal
and interest payments, and Guarantee payments which relate to any
Financed Eligible Loans and cause the Master Servicer and each
Subservicer to specify whether payments received by it represent
principal or interest;
(b) not permit the release of the obligations of the Master
Servicer and any Subservicer under the Master Servicing Agreement and
any Subservicing Agreement except in conjunction with amendments or
modifications permitted by paragraph (h) below;
(c) at all times, to the extent permitted by law, cause to be
defended, enforced, preserved and protected the rights and privileges of
the Issuer, the Trustee and the Registered Owners under or with respect
to the Master Servicing Agreement and each Subservicing Agreement;
(d) at its own expense, the Issuer shall duly and punctually
perform and observe each of its obligations to the Master Servicer or a
Subservicer under the Master Servicing Agreement or its related
Subservicing Agreement in accordance with the terms thereof;
(e) the Issuer agrees to give the Trustee and the Rating Agency
prompt written notice of each default on the part of the Master Servicer
or a Subservicer of its obligations under the Master Servicing Agreement
or its related Subservicing Agreement coming to the Issuer's attention;
(f) the Issuer shall not waive any default by the Master
Servicer or a Subservicer under the Master Servicing Agreement or its
related Subservicing Agreement without the written consent of the
Trustee and the giving of written notice to the Rating Agency;
(g) the Issuer shall cause the Master Servicer and each
Subservicer to deliver to the Trustee and the Issuer, on or before March
30 of each year, beginning with March 30, 2005, a certificate stating
that (i) a review of the activities of the Master Servicer and each
Subservicer during the preceding calendar year and of its performance
under the Master Servicing Agreement and its related Subservicing
Agreement has been made under the supervision of the officer signing
such certificate and (ii) to the best of such officers' knowledge, based
on such review, the Master Servicer and such Subservicer has fulfilled
all its obligations under the Master Servicing Agreement and its related
Subservicing Agreement throughout such year, or, there has been a
default in the fulfillment of any such obligation, specifying each such
default known to such officer and the nature and stature thereof. The
Issuer shall send copies of such annual certificate of the Master
Servicer and each Subservicer to each Rating Agency; and
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(h) not consent or agree to or permit any amendment or
modification of the Master Servicing Agreement or any Subservicing
Agreement which will in any manner materially adversely affect the
rights or security of the Registered Owners. The Issuer and the Trustee
shall be entitled to receive and rely upon an opinion of counsel that
any such amendment or modification will not materially adversely affect
the rights or security of the Registered Owners.
Section 4.05. Procedures for Transfer of Funds. In any instance where
this Indenture requires a transfer of funds or money from one Fund to another, a
transfer of ownership in investments or an undivided interest therein may be
made in any manner agreeable to the Issuer and the Trustee, and in the
calculation of the amount transferred, interest on the investment which has or
will accrue before the date the money is needed in the fund to which the
transfer is made shall not be taken into account or considered as money on hand
at the time of such transfer.
Section 4.06. Additional Covenants with Respect to the Higher Education
Act. The Issuer covenants that it will cause the Trustee to be, or replace the
Trustee with, an Eligible Lender under the Higher Education Act, that it will
acquire or cause to be acquired Eligible Loans originated and held only by an
Eligible Lender and that it will not dispose of or deliver any Financed Eligible
Loans or any security interest in any such Financed Eligible Loans to any party
who is not an Eligible Lender so long as the Higher Education Act or Regulations
adopted thereunder require an Eligible Lender to be the owner or holder of
Guaranteed Eligible Loans; provided, however, that nothing above shall prevent
the Issuer from delivering the Eligible Loans to the Master Servicer, a
Subservicer or a Guaranty Agency. The Registered Owners of the Notes shall not
in any circumstances be deemed to be the owner or holder of the Guaranteed
Eligible Loans.
The Issuer, or the Administrator on behalf of the Issuer, shall be
responsible for each of the following actions with respect to the Higher
Education Act:
(a) the Issuer, or the Administrator on behalf of the Issuer,
shall be responsible for dealing with the Secretary with respect to the
rights, benefits and obligations under the Certificates of Insurance,
and the Issuer shall be responsible for dealing with the Guaranty
Agencies with respect to the rights, benefits and obligations under the
Guarantee Agreements with respect to the Financed Eligible Loans;
(b) the Issuer, or the Administrator on behalf of the Issuer,
shall cause to be diligently enforced, and shall cause to be taken all
reasonable steps, actions and proceedings necessary or appropriate for
the enforcement of all terms, covenants and conditions of all Financed
Eligible Loans and agreements in connection therewith, including the
prompt payment of all principal and interest payments and all other
amounts due thereunder;
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(c) the Issuer, or the Administrator on behalf of the Issuer,
shall cause the Financed Eligible Loans to be serviced by entering into
the Master Servicing Agreement or other agreement with the Master
Servicer for the collection of payments made for, and the administration
of the accounts of, the Financed Eligible Loans;
(d) the Issuer, or the Administrator on behalf of the Issuer,
shall comply, and shall cause all of its officers, directors, employees
and agents to comply, with the provisions of the Higher Education Act
and any regulations or rulings thereunder, with respect to the Financed
Eligible Loans;
(e) the Issuer, or the Administrator on behalf of the Issuer,
shall cause all Available Funds, including the benefits of the Guarantee
Agreements, the Interest Benefit Payments and the Special Allowance
Payments, to flow to the Trustee. The Trustee shall have no liability
for actions taken at the direction of the Issuer or the Administrator,
except for negligence or willful misconduct in the performance of its
express duties hereunder. The Trustee shall have no obligation to
administer, service or collect the loans in the Trust Estate or to
maintain or monitor the administration, servicing or collection of such
loans; and
(f) the Issuer, or the Administrator on behalf of the Issuer,
shall cause each Financed Eligible Loan evidenced by a Master Promissory
Note in the form mandated by Section 432(m)(1) of the Higher Education
Act to be acquired pursuant to a Student Loan Purchase Agreement with
the Seller containing language similar to the following:
"The Seller hereby represents and warrants that the Seller is
transferring all of its right title and interest in the MPN Loan to the Trustee,
that it has not assigned any interest in such MPN Loan (other than security
interests that have been released or ownership interests that the Seller has
reacquired) to any person other than the Trustee, and that no prior holder of
the MPN Loan has assigned any interest in such MPN Loan (other than security
interests that have been released or ownership interests that such prior holder
has reacquired) to any Person other than a predecessor in title to the Seller.
The Seller hereby covenants that the Seller shall not attempt to transfer to any
other Person any interest in any MPN Loan assigned hereunder. The Seller hereby
authorizes the Trustee to file a UCC-1 financing statement identifying the
Seller as debtor and the Trustee as secured party and describing the MPN Loan
sold pursuant to this Agreement. The preparation or filing of such UCC-1
financing statement is solely for additional protection of the Trustee's
interest in the MPN Loans and shall not be deemed to contradict the express
intent of the Seller and the Trustee that the transfer of MPN Loans under this
Agreement is an absolute assignment of such MPN Loans and is not a transfer of
such MPN Loans as security for a debt."
The Trustee shall not be deemed to be the designated agent for the
purposes of this Section unless it has agreed in writing to be such agent.
Section 4.07. Financed Eligible Loans; Collections Thereof; Assignment
Thereof. The Issuer, through the Master Servicer and one or more Subservicers,
shall diligently collect all principal and interest payments on all Financed
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Eligible Loans, and all Interest Benefit Payments, insurance, guarantee and
default claims and Special Allowance Payments which relate to such Financed
Eligible Loans; provided, however, the Issuer may offer interest rate reductions
with respect to the Financed Eligible Loans which result in rates of interest
not less than those shown in the cash flow analyses provided to each Rating
Agency on the Date of Issuance, and provided further that such rates of interest
may be further reduced if a Rating Confirmation is obtained, based on new cash
flow analyses containing such assumptions as the Issuer shall reasonably
determine. The Issuer shall cause the filing and assignment of such claims
(prior to the timely filing deadline for such claims under the Regulations) by
the Master Servicer or the appropriate Subservicer. The Issuer will comply with
the Higher Education Act and Regulations which apply to the Program and to such
Financed Eligible Loans.
Section 4.08. Appointment of Agents, Direction to Trustee, Etc. The
Issuer shall employ and appoint all employees, agents, consultants and attorneys
which it may consider necessary. No member of the board of directors or officer
of the Administrator, either singly or collectively, shall be personally liable
for any act or omission not willfully fraudulent or mala fide. The Issuer hereby
directs the Trustee to enter into this Indenture, the Administration Agreement,
the Custodian Agreements and the Investment Agreements. The Issuer hereby
directs the Eligible Lender Trustee to enter into this Indenture, the Guarantee
Agreements and the Eligible Lender Trust Agreement.
Section 4.09. Capacity to Sue. The Issuer shall have the power and
capacity to sue and to be sued on matters arising out of or relating to the
financing of the Financed Eligible Loans.
Section 4.10. Continued Existence; Successor to Issuer. The Issuer
agrees that it will do or cause to be done all things necessary to preserve and
keep in full force and effect its existence, rights and franchises as a Delaware
statutory trust, except as otherwise permitted by this Section. The Issuer
further agrees that it will not (a) sell, transfer or otherwise dispose of all
or substantially all, of its assets (except Financed Eligible Loans if such
sale, transfer or disposition will discharge this Indenture in accordance with
Article X hereof); (b) consolidate with or merge into another entity; or (c)
permit one or more other entities to consolidate with or merge into it. The
preceding restrictions in clauses (a), (b) and (c) above shall not apply to a
transaction if the transferee or the surviving or resulting entity, if other
than the Issuer, by proper written instrument for the benefit of the Trustee,
irrevocably and unconditionally assumes the obligation to perform and observe
the agreements and obligations of the Issuer under this Indenture.
If a transfer is made as provided in this Section, the provisions of
this Section shall continue in full force and effect and no further transfer
shall be made except in compliance with the provisions of this Section.
Section 4.11. Amendment of Student Loan Purchase Agreements. The Issuer
shall notify the Trustee in writing of any proposed amendments to any existing
Student Loan Purchase Agreement. No such amendment shall become effective unless
and until the Trustee consents thereto in writing. The consent of the Trustee
shall not be unreasonably withheld and shall not be withheld if the Trustee
receives an opinion of counsel acceptable to it that such an amendment is
required by the Higher Education Act and is not materially prejudicial to the
Registered Owners. Notwithstanding the foregoing, however, the Trustee shall
consent to an amendment from time to time so long as it is not materially
prejudicial to the interests of the Registered Owners, and the Trustee may rely
on an opinion of counsel to such effect.
(a) The Issuer hereby makes the following representations and
warranties to the Trustee on which the Trustee relies in authenticating
the Notes and on which the Registered Owners have relied in purchasing
the Notes. Such representations and warranties shall survive the
transfer and assignment of the Trust Estate to the Trustee.
(i) Organization and Good Standing. The Issuer is duly
organized and validly existing under the laws of the State, and
has the power to own its assets and to transact the business in
which it presently engages.
(ii) Due Qualification. The Issuer is duly qualified to
do business and is in good standing, and has obtained all
material necessary licenses and approvals, in all jurisdictions
where the failure to be so qualified, have such good standing or
have such licenses or approvals would have a material adverse
effect on the Issuer's business and operations or in which the
actions as required by this Indenture require or will require
such qualification.
(iii) Authorization. The Issuer has the power, authority
and legal right to create and issue the Notes, to execute,
deliver and perform this Indenture and to grant the Trust Estate
to the Trustee and the creation and issuance of the Notes,
execution, delivery and performance of this Indenture and grant
of the Trust Estate to the Trustee have been duly authorized by
the Issuer by all necessary statutory trust action.
(iv) Binding Obligation. This Indenture, assuming due
authorization, execution and delivery by the Trustee, the Notes
in the hands of the Registered Owners thereof and the Issuer
Derivative Payments constitute legal, valid and binding
obligations of the Issuer enforceable against the Issuer in
accordance with their terms, except that (A) such enforcement
may be subject to bankruptcy, insolvency, reorganization,
moratorium or other similar laws (whether statutory, regulatory
or decisional) now or hereafter in effect relating to creditors'
rights generally and (B) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to
certain equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought, whether a
proceeding at law or in equity.
(v) No Violation. The consummation of the transactions
contemplated by this Indenture and the fulfillment of the terms
hereof does not conflict with, result in any breach of any of
the terms and provisions of or constitute (with or without
notice, lapse of time or both) a default under the
organizational documents of the Issuer, or any material
indenture, agreement, mortgage, deed of trust or other
instrument to which the Issuer is a party or by which it is
bound, or result in the creation or imposition of any lien upon
any of its material properties pursuant to the terms of any such
indenture, agreement, mortgage, deed of trust or other
instrument, other than this Indenture, nor violate any law or
any order, rule or regulation applicable to the Issuer of any
court or of any federal or state regulatory body, administrative
agency or other governmental instrumentality having jurisdiction
over the Issuer or any of its properties.
(vi) No Proceedings. There are no proceedings,
injunctions, writs, restraining orders or investigations to
which the Issuer or any of such entity's affiliates is a party
pending, or, to the best of such entity's knowledge, threatened,
before any court, regulatory body, administrative agency or
36
other tribunal or governmental instrumentality (A) asserting the
invalidity of this Indenture, (B) seeking to prevent the
issuance of any Notes or the consummation of any of the
transactions contemplated by this Indenture or (C) seeking any
determination or ruling that might materially and adversely
affect the performance by the Issuer of its obligations under,
or the validity or enforceability of this Indenture.
(vii) Approvals. All approvals, authorizations,
consents, orders or other actions of any person, corporation or
other organization, or of any court, governmental agency or body
or official, required on the part of the Issuer in connection
with the execution and delivery of this Indenture have been
taken or obtained on or prior to the Date of Issuance.
(viii) Place of Business. The Issuer's place of business
and chief executive office is located in Wilmington, Delaware
and the Issuer has had no other chief executive office.
(ix) Tax and Accounting Treatment. The Issuer intends to
treat the transactions contemplated by the Student Loan Purchase
Agreements as an absolute transfer rather than as a pledge of
the Financed Eligible Loans from the Seller for federal income
tax and financial accounting purposes and the Issuer (through
the Eligible Lender Trustee) will be treated as the owner of the
Financed Eligible Loans for all purposes. The Issuer further
intends to treat the Notes as its indebtedness for federal
income tax and financial accounting purposes.
(x) Taxes. The Issuer has filed (or caused to be filed)
all federal, state, county, local and foreign income, franchise
and other tax returns required to be filed by it through the
date hereof, and has paid all taxes reflected as due thereon.
There is no pending dispute with any taxing authority that, if
determined adversely to the Issuer, would result in the
assertion by any taxing authority of any material tax
deficiency, and the Issuer has no knowledge of a proposed
liability for any tax year to be imposed upon such entity's
properties or assets for which there is not an adequate reserve
reflected in such entity's current financial statements.
(xi) Legal Name. The legal name of the Issuer is "Nelnet
Student Loan Trust 2004-4" and has not changed since its
inception. The Issuer has no trade names, fictitious names,
assumed names or "dba's" under which it conducts its business
and has made no filing in respect of any such name.
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(xii) Business Purpose. The Issuer has acquired the
Financed Eligible Loans conveyed to it under a Student Loan
Purchase Agreement for a bona fide business purpose and has
undertaken the transactions contemplated herein as principal
rather than as an agent of any other Person. The Issuer has no
subsidiaries, has adopted and operated consistently with all
requirements for statutory trusts under the laws of the State
with respect to its operations and has engaged in no other
activities other than those specified in this Indenture and the
Student Loan Purchase Agreements and in accordance with the
transactions contemplated herein and therein.
(xiii) Compliance with Laws. The Issuer is in compliance
with all applicable laws and regulations with respect to the
conduct of its business and has obtained and maintains all
permits, licenses and other approvals as are necessary for the
conduct of its operations.
(xiv) Valid Business Reasons; No Fraudulent Transfers.
The transactions contemplated by this Indenture are in the
ordinary course of the Issuer's business and the Issuer has
valid business reasons for granting the Trust Estate pursuant to
this Indenture. At the time of each such grant: (A) the Issuer
granted the Trust Estate to the Trustee without any intent to
hinder, delay or defraud any current or future creditor of the
Issuer; (B) the Issuer was not insolvent and did not become
insolvent as a result of any such grant; (C) the Issuer was not
engaged and was not about to engage in any business or
transaction for which any property remaining with such entity
was an unreasonably small capital or for which the remaining
assets of such entity are unreasonably small in relation to the
business of such entity or the transaction; (D) the Issuer did
not intend to incur, and did not believe or should not have
reasonably believed, that it would incur, debts beyond its
ability to pay as they become due; and (E) the consideration
received by the Issuer for the grant of the Trust Estate was
reasonably equivalent to the value of the related grant.
(xv) No Management of Affairs of Seller. The Issuer is
not and will not be involved in the day-to-day management of the
Seller, the Administrator, the Sponsor or any affiliate.
(xvi) No Transfers with Seller or Affiliates. Other than
the acquisition of assets and the transfer of any Notes pursuant
to this Indenture, the Issuer does not engage in and will not
engage in any transactions with the Seller and affiliates,
except as provided herein with respect to the Administration
Agreement or the payment of dividends or distributions to the
Issuer's parent.
(xvii) Ability to Perform. There has been no material
impairment in the ability of the Issuer to perform its
obligations under this Indenture.
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(xviii) Financial Condition. No material adverse change
has occurred in the Issuer's financial status since the date of
its formation.
(xix) Event of Default. No Event of Default has occurred
and no event has occurred that, with the giving of notice, the
passage of time, or both, would become an Event of Default.
(xx) Acquisition of Financed Eligible Loans Legal. The
Issuer has complied with all applicable federal, state and local
laws and regulations in connection with its acquisition of the
Financed Eligible Loans from the Seller.
(xxi) No Material Misstatements or Omissions. No
information, certificate of an officer, statement furnished in
writing or report delivered to the Trustee, the Master Servicer,
a Subservicer or any Registered Owner by the Issuer contains any
untrue statement of a material fact or omits a material fact
necessary to make such information, certificate, statement or
report not misleading.
(b) The Issuer will not:
(i) sell, transfer, exchange or otherwise dispose of any
portion of the Trust Estate except as expressly permitted by
this Indenture;
(ii) claim any credit on, or make any deduction from,
the principal amount of any of the Notes by reason of the
payment of any taxes levied or assessed upon any portion of the
Trust Estate;
(iii) except as otherwise provided herein, dissolve or
liquidate in whole or in part, except with the prior written
consent of the Trustee, and to the extent Notes remain
Outstanding, approval of the Registered Owners and a Rating
Confirmation;
(iv) permit the validity or effectiveness of this
Indenture, any Supplement or any grant hereunder to be impaired,
or permit the lien of this Indenture to be amended,
hypothecated, subordinated, terminated or discharged, or permit
any Person to be released from any covenants or obligations
under this Indenture, except as may be expressly permitted
hereby;
(v) except as otherwise provided herein, permit any
lien, charge, security interest, mortgage or other encumbrance
(other than the lien of this Indenture) to be created on or
extend to or otherwise arise upon or burden the Trust Estate or
any part thereof or any interest therein or the proceeds
thereof;
(vi) permit the lien of this Indenture not to constitute
a valid first priority, perfected security interest in the Trust
Estate;
(vii) incur or assume any indebtedness or guarantee any
indebtedness of any Person whether secured by any Financed
Eligible Loans under this Indenture or otherwise, except for
such obligations as may be incurred by the Issuer in connection
with the issuance of the Notes pursuant to this Indenture and
unsecured trade payables in the ordinary course of its business;
39
(viii) operate such that it would be consolidated with
its Sponsor or any other affiliate and its separate existence
disregarded in any federal or state proceeding;
(ix) act as agent of the Seller or, except as provided
in its Student Loan Purchase Agreement, allow the Seller to act
as its agent;
(x) allow the Seller or its parent or any other
affiliate to pay its expenses, guarantee its obligations or
advance funds to it for payment of expenses; or
(xi) consent to the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of
or relating to the Issuer or of or relating to all or
substantially all of its property, or a decree or order of a
court or agency or supervisory authority having jurisdiction in
the premises for the appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of debt, marshalling
of assets and liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have been
entered against the Issuer; or the Issuer shall not consent to
the appointment of a receiver, conservator or liquidator in any
insolvency, readjustment of debt, marshalling of assets and
liabilities, voluntary liquidation or similar proceedings of or
relating to the Issuer or of or relating to all or substantially
all of its property; or admit in writing its inability to pay
its debts generally as they become due, file a petition to take
advantage of any applicable insolvency, bankruptcy or
reorganization statute, make an assignment for the benefit of
its creditors or voluntarily suspend payment of its obligations.
(c) The Issuer makes the following representations and
warranties as to the Trust Estate which is granted to the Trustee
hereunder on such date, on which the Trustee relies in accepting the
Trust Estate. Such representations and warranties shall survive the
grant of the Trust Estate to the Trustee pursuant to this Indenture:
(i) Financed Eligible Loans. Each Financed Eligible Loan
acquired by the Issuer shall constitute an Eligible Loan and
contain the characteristics found in a Student Loan Purchase
Agreement. Notwithstanding the definition of "Eligible Loans"
herein, the Issuer covenants that no more than 20% of each
purchase of Eligible Loans will be made up of Eligible Loans
delinquent by more than 30 days.
(ii) Grant. It is the intention of the Issuer that the
transfer herein contemplated constitutes a grant of the Financed
Eligible Loans to the Trustee.
(iii) All Filings Made. All filings (including, without
limitation, UCC filings) necessary in any jurisdiction to give
the Trustee a first priority perfected ownership and security
interest in the Trust Estate, including the Financed Eligible
Loans, have been made no later than the Date of Issuance and
copies of the file-stamped financing statements shall be
delivered to the Trustee within five Business Days of receipt by
the Issuer or its agent from the appropriate secretary of state.
The Issuer has not caused, suffered or permitted any lien,
pledges, offsets, defenses, claims, counterclaims, charges or
security interest with respect to the Financed Eligible Loans
(other than the security interest created in favor of the
Trustee) to be created.
40
(iv) Transfer Not Subject to Bulk Transfer Act. Each
grant of the Financed Eligible Loans by the Issuer pursuant to
this Indenture is not subject to the bulk transfer act or any
similar statutory provisions in effect in any applicable
jurisdiction.
(v) No Transfer Taxes Due. Each grant of the Financed
Eligible Loans (including all payments due or to become due
thereunder) by the Issuer pursuant to this Indenture is not
subject to and will not result in any tax, fee or governmental
charge payable by the Issuer or the Seller to any federal, state
or local government.
Section 4.13. Additional Covenants. So long as any of the Notes are
Outstanding:
(a) The Issuer shall not engage in any business or activity
other than in connection with the activities contemplated hereby and in
the Student Loan Purchase Agreements, and in connection with the
issuance of Notes.
(b) The Issuer shall not consolidate or merge with or into any
other entity or convey or transfer its properties and assets
substantially as an entirety to any entity except as otherwise provided
herein.
(c) The funds and other assets of the Issuer shall not be
commingled with those of any other individual, corporation, estate,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization or government, or any agency or political
subdivision thereof.
(d) The Issuer shall not be, become or hold itself out as being
liable for the debts of any other party.
(e) The Issuer shall not form, or cause to be formed, any
subsidiaries.
(f) The Issuer shall act solely in its own name and through its
duly authorized officers or agents in the conduct of its business, and
shall conduct its business so as not to mislead others as to the
identity of the entity with which they are concerned.
(g) The Issuer shall maintain its records and books of account
and shall not commingle its records and books of account with the
records and books of account of any other Person. The books of the
Issuer may be kept (subject to any provision contained in the statutes)
inside or outside the State at such place or places as may be designated
from time to time by the provisions of the Trust Agreement.
41
(h) All actions of the Issuer shall be taken by an Authorized
Representative.
(i) The Issuer shall not amend, alter, change or repeal any
provision contained in this Section without (i) the prior written
consent of the Trustee and (ii) a Rating Confirmation from each Rating
Agency rating any Notes Outstanding (a copy of which shall be provided
to the Trustee) that such amendment, alteration, change or repeal will
have no adverse effect on the rating assigned to the Notes.
(j) The Issuer shall not amend its Certificate of Trust or its
Trust Agreement without first obtaining the prior written consent of
each Rating Agency.
(k) All audited financial statements of the Issuer that are
consolidated with those of any affiliate thereof will contain detailed
notes clearly stating that (i) all of the Issuer's assets are owned by
the Issuer, and (ii) the Issuer is a separate entity with creditors who
have received ownership and/or security interests in the Issuer's
assets.
(l) The Issuer will strictly observe legal formalities in its
dealings with the Seller, the Sponsor or any affiliate thereof, and
funds or other assets of the Issuer will not be commingled with those of
the Seller, the Sponsor or any other affiliate thereof. The Issuer shall
not maintain joint bank accounts or other depository accounts to which
the Seller, the Sponsor or any other affiliate has independent access.
None of the Issuer's funds will at any time be pooled with any funds of
the Seller, the Sponsor or any other affiliate.
(m) The Issuer will maintain an arm's length relationship with
the Seller (and any affiliate). Any Person that renders or otherwise
furnishes services to the Issuer will be compensated by the Issuer at
market rates for such services it renders or otherwise furnishes to the
Issuer except as otherwise provided in this Indenture. Except as
contemplated in this Indenture, the Student Loan Purchase Agreements,
the Master Servicing Agreement or a Subservicing Agreement, the Issuer
will not hold itself out to be responsible for the debts of the Seller,
the parent or the decisions or actions respecting the daily business and
affairs of the Seller or parent.
Section 4.14. Providing of Notice. The Issuer, upon learning of any
failure on its part to observe or perform in any material respect any covenant,
representation or warranty of the Issuer set forth in this Indenture or the
Student Loan Purchase Agreements, or of any failure on the part of the Seller to
observe or perform in any material respect any covenant, representation or
warranty of the Seller set forth in the Student Loan Purchase Agreements, shall
promptly notify the Trustee, the Master Servicer, the appropriate Subservicer
and each Rating Agency of such failure.
Section 4.15. Certain Reports.
(a) The Issuer will:
(i) file with the Trustee, within 15 days after the
Issuer is required to file the same with the Commission, copies
of the annual reports and of the information, documents and
other reports (or copies of such portions of any of the
foregoing as the Commission may from time to time by rules and
regulations prescribe) which the Issuer may be required to file
with the Commission pursuant to Section 13 or Section 15(d) of
the Exchange Act;
42
(ii) file with the Trustee and the Commission, in
accordance with rules and regulations prescribed from time to
time by the Commission, such additional information, documents
and reports with respect to compliance by the Issuer with the
conditions and covenants of this Indenture as may be required
from time to time by such rules and regulations; and
(iii) transmit by mail to the Registered Owners of
Notes, within 30 days after the filing thereof with the Trustee,
in the manner and to the extent provided in Section 313(c) of
the Trust Indenture Act, such summaries of any information,
documents and reports required to be filed by the Issuer
pursuant to subsections (a) and (b) of this Section as may be
required by rules and regulations prescribed from time to time
by the Commission.
(b) The Trustee shall mail to each Registered Owner, within 60
days after each December 31 beginning with the December 31 following the
date of this Indenture, a brief report as of such December 31 that
complies with Section 313(a) of the Trust Indenture Act if required by
said section. The Trustee shall also comply with Section 313(b) of the
Trust Indenture Act. A copy of each such report required pursuant to
Section 313(a) or (b) of the Trust Indenture Act shall, at the time of
such transaction to Registered Owners, be filed by the Trustee with the
Commission and with each securities exchange, if any, upon which the
Notes are listed, provided that the Issuer has previously notified the
Trustee of such listing.
(c) Not later than the fourth Business Day preceding each
Quarterly Distribution Date, the Administrator will prepare and provide
a certificate in the form of Exhibit D hereto (the "Administrator's
Quarterly Distribution Date Certificate"), or containing such
information as the Commission may from time to time by rules or
regulations prescribe, to the Trustee. The Trustee shall provide a copy
of any Administrator's Quarterly Distribution Date Certificate to any
Noteholder who requests such in writing.
(d) The Trustee may conclusively rely and accept such reports
from the Issuer as fulfilling the requirements of this Section, with no
further duty to know, determine or examine such reports or comply with
the prescribed timing, rules and regulations of the Commission.
Section 4.16. Statement as to Compliance. The Issuer will deliver to the
Trustee, within 120 days after the end of each fiscal year, a brief certificate
from an Authorized Representative including (a) a current list of the Authorized
Representatives, and (b) a statement indicating whether or not to the knowledge
of the signers thereof the Issuer is in compliance with all conditions and
covenants under this Indenture and, in the event of any noncompliance,
specifying such noncompliance and the nature and status thereof. For purposes of
this Section, such compliance shall be determined without regard to any period
of grace or requirement of notice under this Indenture.
43
Section 4.17. Representations of the Issuer Regarding the Trustee's
Security Interest. The Issuer hereby represents and warrants for the benefit of
the Trustee and the Registered Owners as follows:
(a) This Indenture creates a valid and continuing security
interest (as defined in the applicable Uniform Commercial Code in effect
in the States of Colorado, Delaware, Nebraska and Utah) in the Financed
Eligible Loans in favor of the Trustee, which security interest is prior
to all other liens, charges, security interests, mortgages or other
encumbrances, and is enforceable as such as against creditors of and
purchasers from Issuer.
(b) The Higher Education Act deems the Financed Eligible Loans
to constitute accounts within the meaning of the applicable UCC as in
effect in the State of Delaware for the purposes of perfecting a
security interest in the Financed Eligible Loans.
(c) The Issuer (or the Eligible Lender Trustee on behalf of the
Issuer) owns and has good and marketable title to the Financed Eligible
Loans free and clear of any lien, charge, security interest, mortgage or
other encumbrance, claim or encumbrance of any Person, other that those
granted pursuant to this Indenture.
(d) For sale of loan participations, swaps and other "payment
intangibles" (within the meaning of the applicable UCC), the Issuer has
received all consents and approvals required by the terms of the
Financed Eligible Loans to the sale of the Financed Eligible Loans
hereunder to the Trustee.
(e) The Issuer has caused or will have caused, within ten days,
the filing of all appropriate financing statements in the proper filing
office in the appropriate jurisdictions under applicable law in order to
perfect the security interest in the Financed Eligible Loans granted to
the Trustee hereunder.
(f) The Issuer has received a written acknowledgment from the
Master Servicer and each Subservicer (as custodian for the Trustee) that
the Master Servicer or such Subservicer is holding executed copies of
the promissory notes and master promissory notes that constitute or
evidence the Financed Eligible Loans for which it is acting as Master
Servicer or Subservicer, and that the Master Servicer or such
Subservicer is holding such solely on behalf and for the benefit of the
Trustee.
(g) Other than the security interest granted to the Trustee
pursuant to this Indenture, the Issuer has not pledged, assigned, sold,
granted a security interest in, or otherwise conveyed any of the
Financed Eligible Loans. The Issuer has not authorized the filing of and
is not aware of any financing statements against the Issuer that include
a description of collateral covering the Financed Eligible Loans other
than any financing statement relating to the security interest granted
to the Trustee hereunder or that has been terminated. The Issuer is not
aware of any judgment or tax lien filings against the Issuer.
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Section 4.18. Further Covenants of the Issuer Regarding the Trustee's
Security Interest. The Issuer hereby covenants for the benefit of the Trustee
and the Registered Owners as follows:
(a) The representations and warranties set forth in Section 4.17
hereof shall survive the termination of this Indenture.
(b) The Trustee shall not waive any of the representations and
warranties set forth in Section 4.17 hereof.
(c) The Issuer shall take all steps necessary, and shall cause
the Master Servicer and Subservicers, if any, to take all steps
necessary and appropriate, to maintain the perfection and priority of
the Trustee's security interest in the Financed Eligible Loans.
Section 4.19. Borrower Incentive Programs. The Issuer presently offers
borrower incentive programs on the Financed Eligible Loans. If any such
incentive programs, or any other borrower incentive programs offered by the
Issuer in the future which are not required by the Higher Education Act, are in
effect for any Financed Eligible Loans on any Quarterly Distribution Date on
which the Outstanding Amount of the Series 2004-4 Notes exceeds the Value of the
Trust Estate, or such other percentage that satisfies the Rating Agency
Condition, the Issuer shall either (i) contribute funds to the Collection Fund
in an amount equal to the interest that otherwise would have been paid on such
Financed Eligible Loans in the absence of the borrower incentive programs since
the preceding Quarterly Distribution Date or (ii) notify the Master Servicer to
instruct the Subservicers to terminate the borrower incentive programs for those
Financed Eligible Loans. If the Master Servicer or a Subservicer is notified to
terminate the borrower incentive programs for the Financed Eligible Loans being
serviced by such Master Servicer or the Subservicer, such Master Servicer or
Subservicer may choose to contribute funds to the Collection Fund in an amount
equal to the interest that otherwise would have been paid on such Financed
Eligible Loans in the absence of the borrower incentive programs on the Financed
Eligible Loans being serviced by such Master Servicer or Subservicer in lieu of
terminating the borrower incentive programs for those Financed Eligible Loans.
The Issuer shall notify the Rating Agencies if the Issuer, the Master Servicer
or a Subservicer contributes any additional amounts pursuant to this Section or
if any of the borrower incentive programs are terminated.
ARTICLE V
FUNDS
Section 5.01. Creation and Continuation of Funds and Accounts. There are
hereby created and established the following Funds to be held and maintained by
the Trustee for the benefit of the Registered Owners:
(a) Acquisition Fund;
(b) Capitalized Interest Fund;
(c) Collection Fund; and
45
(d) Reserve Fund.
The Trustee is hereby authorized for the purpose of facilitating the
administration of the Trust Estate and for the administration of any Notes
issued hereunder to create further Accounts or Subaccounts in any of the various
Funds and Accounts established hereunder which are deemed necessary or
desirable.
Section 5.02. Acquisition Fund. There shall be deposited into the
Acquisition Fund moneys from proceeds of the Notes in an amount equal to
$1,999,382,236. Financed Eligible Loans shall be held by the Trustee or its
agent or bailee (including the Master Servicer or a Subservicer) and shall be
pledged to the Trust Estate and accounted for as a part of the Acquisition Fund.
Moneys on deposit in the Acquisition Fund shall be used, upon Issuer
Order, solely to (a) pay costs of issuance of the Notes, including the costs
related to the purchase of one or more Derivative Products, if any, and (b) upon
receipt by the Trustee of an Eligible Loan Acquisition Certificate, to acquire
Eligible Loans at a price not in excess of 100% of the outstanding principal
balance of such Eligible Loans, plus accrued interest. Any such Issuer Order or
Eligible Loan Acquisition Certificate shall state that such proposed use of
moneys in the Acquisition Fund is in compliance with the provisions of this
Indenture.
While the Issuer will be the beneficial owner of the Financed Eligible
Loans, it is understood and agreed that the Eligible Lender Trustee will be the
legal owner thereof and the Trustee will have a security interest in the
Financed Eligible Loans for and on behalf of the Registered Owners. In the case
of a single Financed Eligible Loan evidenced by a separate note, each such note
will be held in the name of the Trustee for the account of the Issuer, for the
benefit of the Registered Owners. In the case of a Financed Eligible Loan
evidenced by a Master Promissory Note, the Issuer shall cause the holder of the
original Master Promissory Note to indicate by book entry on its books and
records that the Issuer is the beneficial owner of the Loan and that the Trustee
is the legal owner and has a security interest in the Financed Eligible Loan for
the benefit of the Registered Owners.
Except as provided in Sections 5.06, 10.03 and 10.04 hereof, Financed
Eligible Loans shall not be sold, transferred or otherwise disposed of (other
than for consolidation, serialization or transfer to a Guaranty Agency) by the
Issuer through the Trustee free from the lien of this Indenture while any of the
Class A Notes are Outstanding. In addition, if necessary for administrative
purposes or if requested by the borrower corresponding to such Financed Eligible
Loan, the Issuer may substitute another Eligible Loan for an existing Financed
Eligible Loans if the substituted Eligible Loan has characteristics (including
principal amount, maturity date and interest rate) which are substantially
similar to the characteristics of the substituted Financed Eligible Loan, and
the collective amount of all such substitutions does not exceed $1,000,000. The
Issuer hereby certifies, upon which the Trustee may conclusively rely, that any
Financed Eligible Loan sold pursuant to this Indenture shall not be sold for a
price less than the Purchase Amount of such Financed Eligible Loan. The Issuer
hereby certifies, upon which the Trustee may conclusively rely, that any
Financed Eligible Loan substituted pursuant to this Indenture shall have
characteristics (including principal amount, maturity date and interest rate)
which are substantially similar to the characteristics of the substituted
Financed Eligible Loan, and the collective amount of all such substitutions does
not exceed $1,000,000. The Issuer shall provide notice to Moody's, if the
principal amount of Financed Eligible Loans sold pursuant to this Indenture
exceeds 10% of the Initial Pool Balance.
46
Section 5.03. Capitalized Interest Fund. There shall be deposited to the
Capitalized Interest Fund moneys from proceeds of the Notes in an amount equal
to $16,508,085.
On each Monthly Servicing Payment Date or Quarterly Distribution Date,
to the extent there are insufficient Available Funds in the Collection Fund to
make one or more of the transfers required by Sections 5.04(b) and 5.04(c)(i)
through (c)(iv) and (viii) hereof, then the Administrator shall instruct the
Trustee in writing to withdraw from the Capitalized Interest Fund on such
Monthly Servicing Payment Date or Quarterly Distribution Date, as the case may
be, an amount equal to such deficiency and to deposit such amount in the
Collection Fund. On the Quarterly Distribution Date in October 2005, the Trustee
shall transfer any remaining amounts on deposit in the Capitalized Interest
Account to the Collection Fund and any such amount transferred shall be an
addition to the Class A Principal Distribution Amount for the October 2005
Quarterly Distribution Date.
Section 5.04. Collection Fund.
(a) Deposits to Collection Fund. There shall be deposited to the
Collection Fund (i) all Available Funds, and all other moneys and
investments derived from assets on deposit in and transfers from the
Capitalized Interest Fund (as described in the Section 5.03 hereof) and
the Reserve Fund (as described in Section 5.05 hereof), (ii) all
Counterparty Payments, and (iii) any other amounts deposited thereto
upon receipt of an Issuer Order. Moneys on deposit in the Collection
Fund shall be used to make the payments described below. The Trustee may
conclusively rely on all written instructions of the Administrator
described in this Indenture with no further duty to examine or determine
the information contained in any Administrator's Certificate or Issuer
Order.
(b) Payments on Monthly Servicing Payment Dates. The
Administrator shall instruct the Trustee in writing no later than the
fourth Business Day preceding each Monthly Servicing Payment Date that
is not a Quarterly Distribution Date (based on the information contained
in a certificate of the Administrator (in the form set forth as Exhibit
C hereto) and the related Servicer's Report, if applicable) to
distribute to the Master Servicer, on such Monthly Servicing Payment
Date, from and to the extent of the Available Funds on deposit in the
Collection Fund (including any amounts transferred from the Capitalized
Interest Fund pursuant to Section 5.03 hereof and the Reserve Fund
pursuant to Section 5.05(b), (c) and (d) hereof), the Servicing Fees due
with respect to the preceding calendar month, and the Trustee shall
comply with such instructions. Upon written direction from the
Administrator to the Trustee, moneys in the Collection Fund shall be
used on any date to pay, when due, fees and expenses insofar as the same
relate to Financed Eligible Loans and other fees and expenses with
respect to the Trust Estate the payment of which is not otherwise
provided for in subsection (c) of this Section, but including amounts
described in clause (a)(i), (ii) and (iii) of the definition of
Available Funds.
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(c) Payments on Quarterly Distribution Dates. The Administrator
shall instruct the Trustee in writing no later than the fourth Business
Day preceding each Quarterly Distribution Date (based on the information
contained in a certificate of the Administrator (in the form set forth
as Exhibit D hereto) and the related Servicer's Report, if applicable)
to make the following deposits and distributions from Available Funds in
the Collection Fund (including any amounts transferred from the
Capitalized Interest Fund pursuant to Section 5.03 hereof and the
Reserve Fund pursuant to Section 5.05(b), (c) and (d) hereof) to the
Persons or to the account specified below on such Quarterly Distribution
Date, in the following order of priority, and the Trustee shall comply
with such instructions:
(i) to pay to the Master Servicer, the Trustee and the
Delaware Trustee, pro rata, based on amounts owed to each such
party, without preference or priority of any kind, the Servicing
Fee (to the extent remaining unpaid following the Monthly
Servicing Payment Date), the Trustee Fee and the Delaware
Trustee Fee, respectively, due on such Quarterly Distribution
Date, in each case, together with such fees remaining unpaid
from prior Quarterly Distribution Dates (and, in the case of the
Servicing Fees, prior Monthly Servicing Payment Dates);
(ii) to pay to the Administrator, the Administration Fee
due on such Quarterly Distribution Date and all unpaid
Administration Fees from prior Quarterly Distribution Dates;
(iii) to pay (A) to the Class A Noteholders of each
class, the portion of the Class A Noteholders' Interest
Distribution Amount payable to such class on such Quarterly
Distribution Date and (B) to the Counterparty, any Issuer
Derivative Payments owed to such Counterparty on such Quarterly
Distribution Date (excluding Termination Payments other than
Priority Termination Payments), pro rata, based on amounts owed
to each such party, without preference or priority of any kind;
(iv) to pay to the Class B Noteholders, the Class B
Noteholders' Interest Distribution Amount;
(v) to the Sponsor, an amount equal to the unpaid
interest accrued on the Financed Eligible Loans subsequent to
the Cutoff Date but prior to the Date of Issuance, until such
amount has been paid in full;
(vi) to the Class A Noteholders, the Class A Principal
Distribution Amount in the following order:
(A) to pay to the Class A-1 Noteholders until
the Class A-1 Notes have been paid in full;
(B) to pay to the Class A-2 Noteholders until
the Class A-2 Notes have been paid in full;
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(C) to pay to the Class A-3 Noteholders until
the Class A-3 Notes have been paid in full;
(D) to pay to the Class A-4 Noteholders until
the Class A-4 Notes have been paid in full; and
(E) to pay to the Class A-5 Noteholders until
the Class A-5 Notes have been paid in full;
(vii) on and after the Stepdown Date, and provided that
no Trigger Event is in effect on such Quarterly Distribution
Date, to the Class B Noteholders, the Class B Principal
Distribution Amount;
(viii) to deposit to the Reserve Fund, the amount, if
any, necessary to reinstate the balance of the Reserve Fund up
to the Specified Reserve Fund Balance;
(ix) to pay to the Master Servicer, the aggregate unpaid
amount of any Carryover Servicing Fee, if any;
(x) to pay to the Counterparties, pro rata, without
preference or priority of any kind, any accrued and unpaid
Termination Payments due to each such Counterparty under the
applicable Derivative Product;
(xi) in the event the Financed Eligible Loans are not
sold pursuant to Sections 10.03 or 10.04 hereof, to pay as an
accelerated payment of principal balance of the Notes then
Outstanding, to the Noteholders in the same order and priority
as is set forth in Sections 5.04(c)(vi)(A) through (E) and
5.04(c)(vii) hereof until the principal amount of the Notes is
paid in full; and
(xii) subject to the remaining provisions of this
Section, to pay to the Sponsor any remaining funds.
Amounts properly distributed to the Sponsor pursuant to
paragraph (xii) shall be deemed released from the Trust Estate and the
security interest therein granted to the Trustee, and the Sponsor shall
in no event thereafter be required to refund any such distributed
amounts.
The amounts paid to the Trustee and the Delaware Trustee (but
not the Master Servicer) pursuant to clause (i) above and the
Administration Fee pursuant to clause (ii) above, shall not in any one
Fiscal Year exceed the amount designated therefor in the cash flows
provided to each Rating Agency on each Date of Issuance, unless the
Issuer, after furnishing each Rating Agency with revised cash flows,
shall have received a Rating Confirmation.
(d) Optional Redemption From Sale of Financed Eligible Loans.
The Notes shall be subject to redemption from the proceeds of a sale of
Financed Eligible Loans in accordance with Section 10.03 or 10.04 hereof
on any Quarterly Distribution Date. Redemption of the Class B Notes
shall be subject to the limitations set forth in subsection (e) of this
Section.
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(e) Limitation on Redemption of Class B Notes. Notwithstanding
anything to the contrary, in no event may any Class B Notes be redeemed
pursuant to Section 5.04(d) hereof if any Class A Notes would be
Outstanding following such redemption.
Section 5.05. Reserve Fund.
(a) On the Date of Issuance, the Trustee shall deposit
$4,985,679 into the Reserve Fund. Thereafter, the Trustee shall transfer
to the Reserve Fund from the Collection Fund all amounts designated for
transfer thereto pursuant to Section 5.04(c)(viii) hereof.
(b) On each Monthly Servicing Payment Date or Quarterly
Distribution Date, to the extent there are insufficient Available Funds
in the Collection Fund to make one or more of the transfers required by
Sections 5.04(b) and 5.04(c)(i) through (c)(iv) hereof, then the
Administrator shall instruct the Trustee in writing to withdraw from the
Reserve Fund on such Monthly Servicing Payment Date or Quarterly
Distribution Date, as the case may be, an amount equal to such
deficiency and to deposit such amount in the Collection Fund to the
extent such deficiency has not been paid from the Capitalized Interest
Fund. Additionally, if on the Note Final Maturity Date for a class of
Notes, and after giving effect to the distribution of the Available
Funds on such Note Final Maturity Date, the principal amount of such
class of Notes will not be reduced to zero, the Administrator shall
instruct the Trustee in writing to withdraw from the Reserve Fund on
such Note Final Maturity Date an amount equal to the amount needed to
reduce the principal amount of such class of Notes to zero and to
deposit such amount in the Collection Fund for application to payment of
the outstanding principal balance of such class of Notes.
(c) After giving effect to subsection (b) of this Section, if
the amount on deposit in the Reserve Fund on any Quarterly Distribution
Date is greater than the Specified Reserve Fund Balance for such
Quarterly Distribution Date, the Administrator shall instruct the
Trustee in writing to withdraw from the Reserve Fund on such Quarterly
Distribution Date an amount equal to such excess and to deposit such
amount in the Collection Fund.
(d) On the final Quarterly Distribution Date upon termination of
the trust and following the payment in full of the Outstanding Amount of
the Notes and of all other amounts (other than unpaid Issuer Derivative
Payments and Carryover Servicing Fees) owing or to be distributed
hereunder to Noteholders, the Trustee, the Master Servicer, the
Administrator, the Delaware Trustee or the Counterparties (excluding
Termination Payments other than Priority Termination Payments), to the
extent that Available Funds on such date are insufficient to make the
following payments, amounts remaining in the Reserve Fund shall be used
first to pay any unpaid Issuer Derivative Payments and second to pay any
Carryover Servicing Fees. Any amount remaining on deposit in the Reserve
Fund after such payments have been made shall be distributed to the
Sponsor. The Sponsor shall in no event be required to refund any amounts
properly distributed pursuant to this subsection (d).
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(e) Anything in this Section to the contrary notwithstanding, if
the market value of securities and cash in the Reserve Fund is on any
Quarterly Distribution Date sufficient to pay the remaining principal
amount of and interest accrued on the Notes, and to pay any unpaid
Issuer Derivative Payments and Carryover Servicing Fee, such amount will
be so applied on such Quarterly Distribution Date and the Administrator
shall instruct the Trustee in writing to make such payments.
Section 5.06. Investment of Funds Held by Trustee. The Trustee is hereby
directed to enter into the Investment Agreements. In addition, the Trustee shall
invest money held for the credit of any Fund or Account or Subaccount held by
the Trustee hereunder as directed in writing (or orally, confirmed in writing)
by an Authorized Representative of the Issuer, to the fullest extent practicable
and reasonable, in Investment Securities which shall mature or be redeemed at
the option of the holder prior to the respective dates when the money held for
the credit of such Fund or Account will be required for the purposes intended.
In the absence of any such direction and to the extent practicable, the Trustee
shall invest amounts held hereunder in those Investment Securities described in
clause (k) of the definition of the Investment Securities. All such investments
shall be held by (or by any custodian on behalf of) the Trustee for the benefit
of the Issuer; provided that on the Business Day preceding each Quarterly
Distribution Date and Monthly Servicing Payment Date all interest and other
investment income collected (net of losses and investment expenses) on funds on
deposit therein shall be deposited into the Collection Fund and shall be deemed
to constitute a portion of the Available Funds for such Quarterly Distribution
Date. The Trustee and the Issuer hereby agree that unless an Event of Default
shall have occurred hereunder, the Issuer acting by and through an Authorized
Representative shall be entitled to, and shall, provide written direction or
oral direction confirmed in writing to the Trustee with respect to any
discretionary acts required or permitted of the Trustee under any Investment
Securities and the Trustee shall not take such discretionary acts without such
written direction.
The Investment Securities purchased shall be held by the Trustee and
shall be deemed at all times to be part of such Fund or Account or Subaccounts
or combination thereof, and the Trustee shall inform the Issuer of the details
of all such investments. Upon direction in writing (or orally, confirmed in
writing) from an Authorized Representative of the Issuer, the Trustee shall use
its best efforts to sell at the best price obtainable, or present for
redemption, any Investment Securities purchased by it as an investment whenever
it shall be necessary to provide money to meet any payment from the applicable
Fund. The Trustee shall advise the Issuer in writing, on or before the fifteenth
day of each calendar month (or such later date as reasonably consented to by the
Issuer), of all investments held for the credit of each Fund in its custody
under the provisions of this Indenture as of the end of the preceding month and
the value thereof, and shall list any investments which were sold or liquidated
for less than the par value thereof, plus accrued but unpaid interest at the
time thereof.
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Money in any Fund constituting a part of the Trust Estate may be pooled
for the purpose of making investments and may be used to pay accrued interest on
Investment Securities purchased. The Trustee and its affiliates may act as
principal or agent in the acquisition or disposition of any Investment
Securities.
Notwithstanding the foregoing, the Trustee shall not be responsible or
liable for any losses on investments made by it hereunder or for keeping all
Funds held by it, fully invested at all times, its only responsibility being to
comply with the investment instructions of the Issuer or its designee in a
non-negligent manner.
The Issuer acknowledges that to the extent the regulations of the
Comptroller of the Currency or other applicable regulatory agency grant the
Issuer the right to receive brokerage confirmations of security transactions,
the Issuer waives receipt of such confirmations.
Section 5.07. Release.
(a) The Trustee shall, upon Issuer Order and subject to the
provisions of this Indenture, take all actions reasonably necessary to
effect the release of any Financed Eligible Loans from the lien of this
Indenture to the extent the terms hereof permit the sale, disposition or
transfer of such Financed Eligible Loans.
(b) Subject to the payment of its fees and expenses pursuant to
Sections 7.05 and 7.07 hereof, the Trustee may, and when required by the
provisions of this Indenture shall, execute instruments to release
property from the lien of this Indenture, or convey the Trustee's
interest in the same, in a manner and under circumstances that are not
inconsistent with the provisions of this Indenture. No party relying
upon an instrument executed by the Trustee as provided in this Article
shall be bound to ascertain the Trustee's authority, inquire into the
satisfaction of any conditions precedent or see to the application of
any moneys.
(c) The Trustee shall, at such time as there are no Notes
Outstanding and all sums due the Trustee pursuant to Sections 7.05 and
7.07 hereof and all amounts payable to the Master Servicer, each
Subservicer, the Administrator, the Delaware Trustee and the
Counterparties have been paid, release any remaining portion of the
Trust Estate that secured the Notes from the lien of this Indenture and
release to the Issuer or any other Person entitled thereto any funds
then on deposit in the Funds and Accounts. The Trustee shall release
property from the lien of this Indenture pursuant to this subsection (c)
only upon receipt of an Issuer Order, an Opinion of Counsel and (if
required by the Trust Indenture Act) Independent Certificates in
accordance with Sections 314(c) and 314(d)(1) of the Trust Indenture
Act.
(d) Subject to the provisions of this Indenture, the Trustee
shall release property from the lien of this Indenture only upon receipt
of an Issuer Order, an Opinion of Counsel and Independent Certificates
in accordance with Sections 314(c) and 314(d)(1) of the Trust Indenture
Act or an Opinion of Counsel in lieu of such Independent Certificates to
the effect that the Trust Indenture Act does not require any such
Independent Certificates.
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(e) Each Registered Owner, by the acceptance of a Note,
acknowledges that from time to time the Trustee shall release the lien
of this Indenture on any Financed Eligible Loan to be sold to (i) the
Seller in accordance with the Student Loan Purchase Agreement; (ii) the
Master Servicer or a Subservicer in accordance with the Master Servicing
Agreement or the applicable Subservicing Agreement; and (iii) another
eligible lender holding one or more serial loans with respect to such
Financed Eligible Loan, in accordance with the Master Servicing
Agreement or the applicable Subservicing Agreement, and each Registered
Owner, by the acceptance of a Note, consents to any such release.
ARTICLE VI
DEFAULTS AND REMEDIES
Section 6.01. Events of Default Defined. For the purpose of this
Indenture, the following events are hereby defined as, and are declared to be,
"Events of Default":
(a) default in the due and punctual payment of any interest on
any Note when the same becomes due and payable, and such default shall
continue for a period of five (5) days;
(b) default in the due and punctual payment of the principal of
any Note when the same becomes due and payable on the related Note Final
Maturity Date;
(c) default in the performance or observance of any other of the
covenants, agreements or conditions on the part of the Issuer to be
kept, observed and performed contained in this Indenture or in the
Notes, and continuation of such default for a period of 90 days after
written notice thereof by the Trustee to the Issuer; and
(d) the occurrence of an Event of Bankruptcy.
Any notice herein provided to be given to the Issuer with respect to
any default shall be deemed sufficiently given if sent by registered mail with
postage prepaid to the Person to be notified, addressed to such Person at the
post office address as shown in Section 9.01 hereof or such other address as may
hereafter be given as the principal office of the Issuer in writing to the
Trustee by an Authorized Representative of the Issuer. The Trustee may give any
such notice in its discretion and shall give such notice if requested to do so
in writing by the Registered Owners of at least 51% of the collective aggregate
principal amount of the Highest Priority Obligations at the time Outstanding.
Section 6.02. Remedy on Default; Possession of Trust Estate. Subject to
Sections 6.08, 7.05 and 7.07 hereof, upon the happening and continuance of any
Event of Default, the Trustee or by its attorneys or agents may enter into and
upon and take possession of such portion of the Trust Estate as shall be in the
custody of others, and all property comprising the Trust Estate, and each and
every part thereof, and exclude the Issuer and its agents, servants and
employees wholly therefrom, and have, hold, use, operate, manage, and control
the same and each and every part thereof, and in the name of the Issuer or
otherwise, as they shall deem best, conduct the business thereof and exercise
the privileges pertaining thereto and all the rights and powers of the Issuer
and use all of the then existing Trust Estate for that purpose, and collect and
receive all charges, income and Available Funds of the same and of every part
thereof, and after deducting therefrom all expenses incurred hereunder and all
other proper outlays herein authorized, and all payments which may be made as
just and reasonable compensation for its own services, and for the services of
its attorneys, agents, and assistants, the Trustee shall apply the rest and
residue of the money received by the Trustee as follows:
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FIRST, to the Trustee and the Delaware Trustee, any Trustee
Fee and any Delaware Trustee Fee, respectively due and owing;
SECOND, to the Master Servicer, any Servicing Fees, due and
remaining unpaid;
THIRD, pro rata, to (i) the Counterparties, pro rata, without
preference or priority of any kind, in proportion to their respective
entitlements under the applicable Derivative Products (excluding all
Termination Payments other than Priority Termination Payments) and (ii)
to the Class A Noteholders of each class for amounts due and unpaid on
each such class of Class A Notes for interest, pro rata, without
preference or priority of any kind, according to the amounts due and
payable on each such class of Class A Notes for such interest;
FOURTH, to Class A Noteholders for amounts due and unpaid on
the Class A Notes for principal, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Notes for principal;
FIFTH, to the Class B Noteholders for amounts due and unpaid
on the Class B Notes for interest, pro rata without preference or
priority of any kind, according to the amounts due and payable on the
Notes for such interest;
SIXTH, to the Class B Noteholders for amounts due and unpaid
on the Class B Notes for principal, pro rata without preference or
priority of any kind, according to the amounts due and payable on the
Class B Notes for principal;
SEVENTH, to the Counterparties, in proportion to the
respective entitlements under the applicable Derivative Product
Agreement without preference or priority of any kind, for any
Termination Payments due and any other unpaid Issuer Derivative
Payments;
EIGHTH, to the Master Servicer, for any unpaid Carryover
Servicing Fees; and
NINTH, to the Issuer, for distribution in accordance with the
terms of the Administration Agreement and the Trust Agreement.
The Trustee may fix a record date and payment date for any payment to
Registered Owners pursuant to this Section. At least 15 days before such record
date, the Trustee shall mail to each Registered Owner and the Issuer a notice
that states the record date, the payment date and the amount to be paid.
Section 6.03. Remedies on Default; Advice of Counsel. Upon the happening
of any Event of Default, the Trustee may proceed to protect and enforce the
rights of the Trustee and the Registered Owners in such manner as counsel for
the Trustee may advise, whether for the specific performance of any covenant,
condition, agreement or undertaking herein contained, or in aid of the execution
of any power herein granted, or for the enforcement of such other appropriate
legal or equitable remedies as, in the opinion of such counsel, may be more
effectual to protect and enforce the rights aforesaid.
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Section 6.04. Remedies on Default; Sale of Trust Estate. Upon the
happening of any Event of Default and if the principal of all of the Outstanding
Obligations shall have been declared due and payable, then and in every such
case, and irrespective of whether other remedies authorized shall have been
pursued in whole or in part, the Trustee may sell, with or without entry, to the
highest bidder the Trust Estate, and all right, title, interest, claim and
demand thereto and the right of redemption thereof, at any such place or places,
and at such time or times and upon such notice and terms as may be required by
law. Upon such sale the Trustee may make and deliver to the purchaser or
purchasers a good and sufficient assignment or conveyance for the same, which
sale shall be a perpetual bar both at law and in equity against the Issuer and
all Persons claiming such properties. No purchaser at any sale shall be bound to
see to the application of the purchase money or to inquire as to the
authorization, necessity, expediency or regularity of any such sale. The Trustee
is hereby irrevocably appointed the true and lawful attorney-in-fact of the
Issuer, in its name and stead, to make and execute all bills of sale,
instruments of assignment and transfer and such other documents of transfer as
may be necessary or advisable in connection with a sale of all or part of the
Trust Estate, but the Issuer, if so requested by the Trustee, shall ratify and
confirm any sale or sales by executing and delivering to the Trustee or to such
purchaser or purchasers all such instruments as may be necessary, or in the
judgment of the Trustee, proper for the purpose which may be designated in such
request. In addition, the Trustee may proceed to protect and enforce the rights
of the Trustee and the Registered Owners of the Obligations in such manner as
counsel for the Trustee may advise, whether for the specific performance of any
covenant, condition, agreement or undertaking herein contained, or in aid of the
execution of any power herein granted, or for the enforcement of such other
appropriate legal or equitable remedies as may in the opinion of such counsel,
be more effectual to protect and enforce the rights aforesaid. The Indenture
Trustee shall take any such action or actions if requested to do so in writing
by the Registered Owners of at least a majority of the principal amount of the
Highest Priority Obligations at the time Outstanding.
Notwithstanding the foregoing, the Indenture Trustee is prohibited from
selling the Financed Eligible Loans following an Event of Default, other than a
default in the payment of any principal or interest on any Note, unless:
(a) The Registered Owners of all of the Highest Priority
Obligations at the time Outstanding consent to such a sale;
(b) The proceeds of such a sale will be sufficient to discharge
all the Outstanding Obligations pursuant to Article X hereof at the date
of such a sale; or
(c) The Issuer, or the Administrator on behalf of the Issuer,
determines that the collections on the Financed Eligible Loans would not
be sufficient on an ongoing basis to make all payments on such
Obligations as such payments would have become due if such Obligations
had not been declared due and payable, and the Indenture Trustee obtains
the consent of the Registered Owners of at least 66-2/3% of the
aggregate principal amount of the Highest Priority Obligations at the
time Outstanding.
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Such a sale shall also require the consent of all the Registered Owners
of the Class B Notes unless the proceeds of such a sale would be sufficient to
discharge the Class B Notes pursuant to Article X hereof at the date of such a
sale.
Section 6.05. Appointment of Receiver. In case an Event of Default
occurs, and if all of the Outstanding Obligations shall have been declared due
and payable and in case any judicial proceedings are commenced to enforce any
right of the Trustee or of the Registered Owners under this Indenture or
otherwise, then as a matter of right, the Trustee shall be entitled to the
appointment of a receiver of the Trust Estate and of the earnings, income or
revenue, rents, issues and profits thereof with such powers as the court making
such appointments may confer.
Section 6.06. Restoration of Position. In case the Trustee shall have
proceeded to enforce any rights under this Indenture by sale or otherwise, and
such proceedings shall have been discontinued, or shall have been determined
adversely to the Trustee, then and in every such case to the extent not
inconsistent with such adverse decree, the Issuer, the Trustee and the
Registered Owners shall be restored to their former respective positions and the
rights hereunder in respect to the Trust Estate, and all rights, remedies and
powers of the Trustee and of the Registered Owners shall continue as though no
such proceeding had been taken. Section 6.07. Application of Sale Proceeds. The
proceeds of any sale of the Trust Estate, together with any funds at the time
held by the Trustee and not otherwise appropriated, shall be applied by the
Trustee as set forth in Section 6.02 hereof, and then to the Issuer or
whomsoever shall be lawfully entitled thereto.
Section 6.08. Acceleration of Maturity; Rescission and Annulment. If an
Event of Default should occur and be continuing, then and in every such case the
Trustee or the Registered Owners of Obligations representing not less than a
majority of the Outstanding Amount of the Highest Priority Obligations may
declare all the Outstanding Obligations to be immediately due and payable, by a
notice in writing to the Issuer (and to the Trustee if given by Registered
Owners), and upon any such declaration the unpaid principal amount of such
Outstanding Obligations, together with accrued and unpaid interest thereon
through the date of acceleration, shall become immediately due and payable,
subject, however, to Section 6.04 hereof.
At any time after such declaration of acceleration of maturity has been
made and before a judgment or decree for payment of the money due has been
obtained by the Trustee as hereinafter in this Article provided, the Registered
Owners of Obligations representing a majority of the collective aggregate
principal amount of the Highest Priority Obligations then Outstanding, by
written notice to the Issuer and the Trustee, may rescind and annul such
declaration and its consequences if:
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(a) the Issuer has paid or deposited with the Trustee a sum
sufficient to pay:
(i) all payments of principal of and interest on all
Obligations and all other amounts that would then be due
hereunder or upon such Obligations if the Event of Default
giving rise to such acceleration had not occurred; and
(ii) all sums paid or advanced by the Trustee hereunder
and the reasonable compensation, expenses, disbursements and
advances of the Trustee, the Master Servicer, any Subservicer,
the Delaware Trustee and their agents and counsel; and
(b) all Events of Default, other than the nonpayment of the
principal of the Obligations that has become due solely by such
acceleration, have been cured or waived as provided in Section 6.14
hereof.
No such rescission shall affect any subsequent default or impair any
right consequent thereto.
Section 6.09. Remedies Not Exclusive. The remedies herein conferred upon
or reserved to the Trustee or the Registered Owners of Obligations are not
intended to be exclusive of any other remedy, but each remedy herein provided
shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing, and every power and remedy hereby given
to the Trustee or to the Registered Owners of Obligations, or any supplement
hereto, may be exercised from time to time as often as may be deemed expedient.
No delay or omission of the Trustee or of any Registered Owner of Obligations to
exercise any power or right arising from any default hereunder shall impair any
such right or power or shall be construed to be a waiver of any such default or
to be acquiescence therein.
Section 6.10. Collection of Indebtedness and Suits for Enforcement by
Trustee. The Issuer covenants that if:
(a) default is made in the payment of any installment of
interest, if any, on any Notes when such interest becomes due and
payable and such default continues for a period of five (5) days; or
(b) default is made in the payment of the principal of (or
premium, if any, on) any Notes at its Note Final Maturity Date,
then the Issuer will, upon demand of the Trustee, pay to the Trustee, for the
benefit of the Registered Owners, the whole amount then due and payable on such
Notes for principal (and premium, if any) and interest, with interest upon any
overdue principal (and premium, if any) and, to the extent that payment of such
interest shall be legally enforceable, upon any overdue installments of
interest, if any, at the rate or rates borne by or provided for in such Notes,
and, in addition thereto, such further amount as shall be sufficient to cover
the costs and expenses of collection, including the reasonable compensation,
fees, expenses, disbursements and advances of the Trustee and its agents and
counsel.
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If the Issuer fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as Trustee of an express trust, may upon receiving
indemnification satisfactory to the Trustee institute a judicial proceeding for
the collection of the sums so due and unpaid, may prosecute such proceeding to
judgment or final decree, and may enforce the same against the Issuer or any
other obligor upon such Notes of such class and collect the moneys adjudged or
decreed to be payable in the manner provided by law out of the property of the
Issuer or any other obligor upon such Notes, wherever situated.
If an Event of Default with respect to Notes occurs and is continuing,
the Trustee may, after being indemnified to its satisfaction and in its
discretion, proceed to protect and enforce its rights and the rights of the
Registered Owners of Notes by such appropriate judicial proceedings as the
Trustee shall deem most effectual to protect and enforce any such rights,
whether for the specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein, or to enforce
any other proper remedy.
Section 6.11. Direction of Trustee. Upon the happening of any Event of
Default, the Registered Owners of at least 51% of the collective aggregate
principal amount of the Highest Priority Obligations then Outstanding, shall
have the right by an instrument or instruments in writing delivered to the
Trustee to direct and control the Trustee as to the method of taking any and all
proceedings for any sale of any or all of the Trust Estate, or for the
appointment of a receiver, if permitted by law, and may at any time cause any
proceedings authorized by the terms hereof to be so taken or to be discontinued
or delayed; provided, however, that such Registered Owners shall not be entitled
to cause the Trustee to take any proceedings which in the Trustee's opinion
would be unjustly prejudicial to non-assenting Registered Owners of Obligations,
but the Trustee shall be entitled to assume that the action requested by the
Registered Owners of at least 51% of the collective aggregate principal amount
of the Highest Priority Obligations then Outstanding will not be prejudicial to
any non-assenting Registered Owners unless the Registered Owners of more than
50% of the collective aggregate principal amount of the non-assenting Registered
Owners of such Obligations, in writing, show the Trustee how they will be
prejudiced. Provided, however, that anything in this Indenture to the contrary
notwithstanding, the Registered Owners of a majority of the collective aggregate
principal amount of the Highest Priority Obligations then Outstanding together
with the Registered Owners of a majority of the collective aggregate principal
amount of all other Obligations then Outstanding shall have the right, at any
time, by an instrument or instruments in writing executed and delivered to the
Trustee, to direct the method and place of conducting all proceedings to be
taken in connection with the enforcement of the terms and conditions of this
Indenture, or for the appointment of a receiver or any other proceedings
hereunder, provided that such direction shall not be otherwise than in
accordance with the provisions of law and of this Indenture. The provisions of
this Section shall be expressly subject to the provisions of Sections 7.01(c),
7.05 and 7.07 hereof.
Section 6.12. Right to Enforce in Trustee. No Registered Owner of any
Obligation shall have any right as such Registered Owner to institute any suit,
action or proceedings for the enforcement of the provisions of this Indenture or
for the execution of any trust hereunder or for the appointment of a receiver or
for any other remedy hereunder, all rights of action hereunder being vested
exclusively in the Trustee, unless and until such Registered Owner shall have
previously given to the Trustee written notice of a default hereunder, and of
the continuance thereof, and also unless the Registered Owners of the requisite
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principal amount of the Obligations then Outstanding shall have made written
request upon the Trustee and the Trustee shall have been afforded reasonable
opportunity to institute such action, suit or proceeding in its own name, and
unless the Trustee shall have been offered indemnity and security satisfactory
to it against the costs, expenses and liabilities to be incurred therein or
thereby, which offer of indemnity shall be an express condition precedent
hereunder to any obligation of the Trustee to take any such action hereunder,
and the Trustee for 30 days after receipt of such notification, request and
offer of indemnity, shall have failed to institute any such action, suit or
proceeding. It is understood and intended that no one or more Registered Owners
of the Obligations shall have the right in any manner whatever by his or their
action to affect, disturb or prejudice the lien of this Indenture or to enforce
any right hereunder except in the manner herein provided and for the equal
benefit of the Registered Owners of not less than a majority of the collective
aggregate principal amount of the Obligations then Outstanding.
Section 6.13. Physical Possession of Obligations Not Required. In any
suit or action by the Trustee arising under this Indenture or on all or any of
the Obligations issued hereunder, or any supplement hereto, the Trustee shall
not be required to produce such Obligations, but shall be entitled in all things
to maintain such suit or action without their production.
Section 6.14. Waivers of Events of Default. The Trustee may in its
discretion waive any Event of Default hereunder and its consequences and rescind
any declaration of acceleration of Obligations, and shall do so upon the written
request of the Registered Owners of at least a majority of the collective
aggregate principal amount of the Highest Priority Obligations then Outstanding;
provided, however, that there shall not be waived (a) any Event of Default in
the payment of the principal of or premium on any Outstanding Obligations at the
date of maturity thereof, or any default in the payment when due of the interest
on any such Obligations, unless prior to such waiver or rescission, all arrears
of interest or all arrears of payments of principal and all expenses of the
Trustee, in connection with such default shall have been paid or provided for;
or (b) any default in the payment of amounts set forth in Sections 7.05 and 7.07
hereof. In case of any such waiver or rescission, or in case any proceedings
taken by the Trustee on account of any such default shall have been discontinued
or abandoned or determined adversely to the Trustee, then and in every such case
the Issuer, the Trustee and the Registered Owners of Obligations shall be
restored to their former positions and rights hereunder respectively, but no
such waiver or rescission shall extend to or affect any subsequent or other
default, or impair any rights or remedies consequent thereon. The Trustee shall
give written notice to the Rating Agency of any waiver of an Event of Default
pursuant to this Section.
ARTICLE VII
THE TRUSTEE
Section 7.01. Acceptance of Trust. The Trustee hereby accepts the trusts
imposed upon it by this Indenture, and agrees to perform said trusts, but only
upon and subject to the following terms and conditions:
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(a) Except during the continuance of an Event of Default,
(i) the Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this
Indenture, and no implied covenants or obligations shall be read
into this Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and conforming
to the requirements of this Indenture; but in the case of any
such certificates or opinions which by any provisions hereof are
specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine
whether or not they conform as to form with the requirements of
this Indenture and whether or not they contain the statements
required under this Indenture.
(b) In case an Event of Default has occurred and is continuing,
the Trustee, in exercising the rights and powers vested in it by this
Indenture, shall use the same degree of care and skill in their exercise
as a prudent person would exercise or use under the circumstances in the
conduct of his or her own affairs.
(c) Before taking any action hereunder requested by Registered
Owners, the Trustee may require that it be furnished an indemnity bond
or other indemnity and security satisfactory to it by the Registered
Owners, as applicable, for the reimbursement of all expenses to which it
may be put and to protect it against all liability.
Section 7.02. Recitals of Others. The recitals, statements and
representations set forth herein and in the Notes shall be taken as the
statements of the Issuer, and the Trustee assumes no responsibility for the
correctness of the same. The Trustee makes no representations as to the title of
the Issuer in the Trust Estate or as to the security afforded thereby and
hereby, or as to the validity or sufficiency of this Indenture or of the Notes
issued hereunder, and the Trustee shall incur no responsibility in respect of
such matters.
Section 7.03. As to Filing of Indenture. The Trustee shall be under no
duty (a) to file or record, or cause to be filed or recorded, this Indenture or
any instrument supplemental hereto, (b) to procure any further order or
additional instruments of further assurance, (c) to see to the delivery to it of
any personal property intended to be mortgaged or pledged hereunder or
thereunder, (d) to do any act which may be suitable to be done for the better
maintenance of the lien or security hereof (other than the filing of any
continuation (but not initial) statements), or (e) to give notice of the
existence of such lien, or for extending or supplementing the same or to see
that any rights to the Trust Estate and Funds intended now or hereafter to be
transferred in trust hereunder are subject to the lien hereof. The Trustee shall
not be liable for failure of the Issuer to pay any tax or taxes in respect of
such property, or any part thereof, or the income therefrom or otherwise, nor
shall the Trustee be under any duty in respect of any tax which may be assessed
against it or the Registered Owners in respect of such property or pledged to
the Trust Estate. The Trustee agrees to prepare, request that the Issuer execute
(if such execution is necessary for any such filing) and file in a timely manner
(if received from the Issuer in a timely manner) with any necessary execution by
the Issuer, the continuation statements referred to herein; provided, that the
Trustee shall have no responsibility for the sufficiency, adequacy or priority
of any initial filing and in the absence of written notice to the contrary by
the Issuer or other Authorized Representative, may rely and shall be protected
in relying on all information and exhibits in such initial filings for the
purposes of any continuation statements.
Section 7.04. Trustee May Act Through Agents. The Trustee may execute
any of the trusts or powers hereof and perform any duty hereunder, either itself
or by or through its attorneys, agents or employees, and it shall not be
answerable or accountable for any default, neglect or misconduct of any such
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attorneys, agents or employees, if reasonable care has been exercised in the
appointment, supervision and monitoring of the work performed. All reasonable
costs incurred by the Trustee and all reasonable compensation to all such
persons as may reasonably be employed in connection with the trusts hereof shall
be paid by the Issuer.
Section 7.05. Indemnification of Trustee. Other than with respect to its
duties to make payment on the Obligations when due, and its duty to pursue the
remedy of acceleration as provided in Sections 6.02 and 6.08 hereof, for each of
which no additional security or indemnity may be required, the Trustee shall be
under no obligation or duty to perform any act at the request of Registered
Owners or to institute or defend any suit in respect thereof unless properly
indemnified and provided with security to its satisfaction as provided in
Section 7.01(c) hereof. The Trustee shall not be required to take notice, or be
deemed to have knowledge, of any default or Event of Default of the Issuer
hereunder and may conclusively assume that there has been no such default or
Event of Default (other than an Event of Default described in Section 6.01(a) or
(b) hereof) unless and until it shall have been specifically notified in writing
at the address in Section 9.01 hereof of such default or Event of Default by (a)
the Registered Owners of the required percentages in principal amount of the
Obligations then Outstanding hereinabove specified or (b) an Authorized
Representative of the Issuer. However, the Trustee may begin suit, or appear in
and defend suit, execute any of the trusts hereby created, enforce any of its
rights or powers hereunder, or do anything else in its judgment proper to be
done by it as Trustee, without assurance of reimbursement or indemnity, and in
such case the Trustee shall be reimbursed or indemnified by the Registered
Owners requesting such action, if any, or the Issuer in all other cases, for all
fees, costs and expenses, liabilities, outlays and counsel fees and other
reasonable disbursements properly incurred in connection therewith, unless such
costs and expenses, liabilities, outlays and attorneys' fees and other
reasonable disbursements properly incurred in connection therewith are
adjudicated to have resulted from the negligence or willful misconduct of the
Trustee. In furtherance and not in limitation of this Section, the Trustee shall
not be liable for, and shall be held harmless by the Issuer from, following any
Issuer Orders, instructions or other directions upon which the Trustee is
authorized to rely pursuant to this Indenture or any other agreement to which it
is a party. If the Issuer or the Registered Owners, as appropriate, shall fail
to make such reimbursement or indemnification, the Trustee may reimburse itself
from any money in its possession under the provisions of this Indenture, subject
only to the prior lien of the Notes for the payment of the principal thereof,
premium, if any, and interest thereon from the Collection Fund. None of the
provisions contained in this Indenture or any other agreement to which it is a
party shall require the Trustee to act or to expend or risk its own funds or
otherwise incur individual financial liability in the performance of any of its
duties or in the exercise of any of its rights or powers if the Registered
Owners shall not have offered security and indemnity acceptable to it or if it
shall have reasonable grounds for believing that prompt repayment of such funds
or adequate indemnity against such risk or liability is not reasonably assured
to it.
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The Issuer agrees to indemnify the Trustee for, and to hold it harmless
against, any loss, liability or expenses incurred without negligence or bad
faith on its part, arising out of or in connection with the acceptance or
administration of the trust or trusts hereunder, including the costs and
expenses of defending itself against any claim or liability in connection with
the exercise or performance of any of its powers or duties hereunder arising
from the Trust Estate. The Issuer agrees to indemnify and hold harmless the
Trustee against any and all claims, demands, suits, actions or other proceedings
and all liabilities, costs and expenses whatsoever caused by any untrue
statement or misleading statement or alleged untrue statement or alleged
misleading statement of a material fact contained in any offering document
distributed in connection with the issuance of the Notes or caused by any
omission or alleged omission from such offering document of any material fact
required to be stated therein or necessary in order to make the statements made
therein in the light of the circumstances under which they were made, not
misleading.
Section 7.06. Trustee's Right to Reliance. The Trustee shall be
protected in acting upon any notice, resolution, request, consent, order,
certificate, report, appraisal, opinion, report or document of the Issuer, the
Master Servicer or a Subservicer or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or parties. The
Trustee may consult with experts and with counsel (who may but need not be
counsel for the Issuer, the Trustee, or for a Registered Owner), and the opinion
of such counsel shall be full and complete authorization and protection in
respect of any action taken or suffered, and in respect of any determination
made by it hereunder in good faith and in accordance with the opinion of such
counsel.
Whenever in the administration hereof the Trustee shall reasonably deem
it desirable that a matter be proved or established prior to taking, suffering
or omitting any action hereunder, the Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its part, rely upon
a certificate signed by an Authorized Representative of the Issuer or an
authorized officer of the Administrator, the Master Servicer or a Subservicer.
The Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it hereby; provided, however, that
the Trustee shall be liable for its negligence or willful misconduct in taking
such action.
The Trustee is authorized to enter into agreements with other Persons,
in its capacity as Trustee, in order to carry out or implement the terms and
provisions of this Indenture. The Trustee shall not be liable with respect to
any action taken, suffered or omitted to be taken in good faith in accordance
with this Indenture or any other transaction document or at the direction of the
Registered Owners evidencing the appropriate percentage of the aggregate
principal amount of the Outstanding Notes relating to the time, method and place
of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this Indenture
or any other transaction document.
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Section 7.07. Compensation of Trustee. Except as otherwise expressly
provided herein, all advances, counsel fees (including without limitation
allocated fees of in-house counsel) and other expenses reasonably made or
incurred by the Trustee in and about the execution and administration of the
trust hereby created and reasonable compensation to the Trustee for its services
in the premises shall be paid by the Issuer. The compensation of the Trustee
shall not be limited to or by any provision of law in regard to the compensation
of trustees of an express trust. The Trustee shall not change the amount of its
annual compensation without giving the Issuer and the Rating Agency at least 90
days' written notice prior to the beginning of a Fiscal Year. If not paid by the
Issuer, the Trustee shall have a lien against all money held pursuant to this
Indenture, subject only to the prior lien of the Obligations against the money
and investments in the Collection Fund for the payment of the principal thereof,
premium, if any, and interest thereon, for such reasonable compensation,
expenses, advances and counsel fees incurred in and about the execution of the
trusts hereby created and the exercise and performance of the powers and duties
of the Trustee hereunder and the cost and expense incurred in defending against
any liability in the premises of any character whatsoever (unless such liability
is adjudicated to have resulted from the negligence or willful misconduct of the
Trustee).
Section 7.08. Creditor Relationships. The Trustee shall comply with
Section 311(a) of the Trust Indenture Act, excluding any creditor relationship
listed in Section 311(b) of the Trust Indenture Act. A Trustee who has resigned
or been removed shall be subject to Section 311(a) of the Trust Indenture Act to
the extent indicated therein. The Trustee may act as depository for, and permit
any of its officers or directors to act as a member of, or act in any other
capacity in respect to, any committee formed to protect the rights of the
Registered Owners or to effect or aid in any reorganization growing out of the
enforcement of the Notes or of this Indenture, whether or not any such committee
shall represent the Registered Owners of more than 60% of the collective
aggregate principal amount of the Outstanding Obligations.
Section 7.09. Resignation of Trustee. The Trustee and any successor to
the Trustee may resign and be discharged from the trust created by this
Indenture by giving to the Issuer notice in writing which notice shall specify
the date on which such resignation is to take effect; provided, however, that
such resignation shall only take effect on the day specified in such notice if a
successor Trustee shall have been appointed pursuant to Section 7.11 hereof (and
is qualified to be the Trustee under the requirements of Section 7.11 hereof).
If no successor Trustee has been appointed by the date specified or within a
period of 90 days from the receipt of the notice by the Issuer, whichever period
is the longer, the Trustee may (a) appoint a temporary successor Trustee having
the qualifications provided in Section 7.11 hereof or (b) request a court of
competent jurisdiction to (i) require the Issuer to appoint a successor, as
provided in Section 7.11 hereof, within three days of the receipt of citation or
notice by the court, or (ii) appoint a Trustee having the qualifications
provided in Section 7.11 hereof. In no event may the resignation of the Trustee
be effective until a qualified successor Trustee shall have been selected and
appointed. In the event a temporary successor Trustee is appointed pursuant to
clause (a) above, the Issuer may remove such temporary successor Trustee and
appoint a successor thereto pursuant to Section 7.11 hereof.
Section 7.10. Removal of Trustee. The Trustee or any successor Trustee
may be removed (a) at any time by the Registered Owners of a majority of the
collective aggregate principal amount of the Highest Priority Obligations then
Outstanding, (b) by the Issuer for cause or upon the sale or other disposition
of the Trustee or its corporate trust functions or (c) by the Issuer without
cause so long as no Event of Default exists or has existed within the last 30
days, upon payment to the Trustee so removed of all money then due to it
hereunder and appointment of a successor thereto by the Issuer and acceptance
thereof by said successor. One copy of any such order of removal shall be filed
with the Delaware Trustee and the other with the Trustee so removed.
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In the event a Trustee (or successor Trustee) is removed, by any person
or for any reason permitted hereunder, such removal shall not become effective
until (a) in the case of removal by the Registered Owners, such Registered
Owners by instrument or concurrent instruments in writing (signed and
acknowledged by such Registered Owners or their attorneys-in-fact) filed with
the Trustee removed have appointed a successor Trustee or otherwise the Issuer
shall have appointed a successor, and (b) the successor Trustee has accepted
appointment as such.
Section 7.11. Successor Trustee. In case at any time the Trustee or any
successor Trustee shall resign, be dissolved, or otherwise shall be disqualified
to act or be incapable of acting, or in case control of the Trustee or of any
successor Trustee or of its officers shall be taken over by any public officer
or officers, a successor Trustee may be appointed by the Issuer by an instrument
in writing duly authorized by the Issuer. In the case of any such appointment by
the Issuer of a successor to the Trustee, the Issuer shall forthwith cause
notice thereof to be mailed to the Registered Owners of the Notes at the address
of each Registered Owner appearing on the note registration books maintained by
the Registrar.
Every successor Trustee appointed by the Registered Owners, by a court
of competent jurisdiction, or by the Issuer shall be a bank or trust company in
good standing, organized and doing business under the laws of the United States
or of a state therein, which has a reported capital and surplus of not less than
$50,000,000, be authorized under the law to exercise corporate trust powers, be
subject to supervision or examination by a federal or state authority, and be an
Eligible Lender so long as such designation is necessary to maintain guarantees
and federal benefits under the Higher Education Act with respect to the Financed
Eligible Loans originated under the Higher Education Act.
Section 7.12. Manner of Vesting Title in Trustee. Any successor Trustee
appointed hereunder shall execute, acknowledge and deliver to its predecessor
Trustee, and also to the Issuer, an instrument accepting such appointment
hereunder, and thereupon such successor Trustee, without any further act, deed
or conveyance shall become fully vested with all the estate, properties, rights,
powers, trusts, duties and obligations of its predecessors in trust hereunder
(except that the predecessor Trustee shall continue to have the benefits to
indemnification hereunder together with the successor Trustee), with like effect
as if originally named as Trustee herein; but the Trustee ceasing to act shall
nevertheless, on the written request of an Authorized Representative of the
Issuer, or an authorized officer of the successor Trustee, execute, acknowledge
and deliver such instruments of conveyance and further assurance and do such
other things as may reasonably be required for more fully and certainly vesting
and confirming in such successor Trustee all the right, title and interest of
the Trustee which it succeeds, in and to the Trust Estate and such rights,
powers, trusts, duties and obligations, and the Trustee ceasing to act also,
upon like request, pay over, assign and deliver to the successor Trustee any
money or other property or rights subject to the lien of this Indenture,
including any pledged securities which may then be in its possession. Should any
deed or instrument in writing from the Issuer be required by the successor
Trustee for more fully and certainly vesting in and confirming to such new
Trustee such estate, properties, rights, powers and duties, any and all such
deeds and instruments in writing shall on request be executed, acknowledged and
delivered by the Issuer.
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In case any of the Notes to be issued hereunder shall have been
authenticated but not delivered, any successor Trustee may adopt the certificate
of authentication of the Trustee or of any successor to the Trustee; and in case
any of the Notes shall not have been authenticated, any successor to the Trustee
may authenticate such Notes in its own name; and in all such cases such
certificate shall have the full force which it has anywhere in the Notes or in
this Indenture.
Section 7.13. Additional Covenants by the Trustee to Conform to the
Higher Education Act. The Trustee covenants that it will at all times be an
Eligible Lender under the Higher Education Act so long as such designation is
necessary, as determined by the Issuer, to maintain the guarantees and federal
benefits under the Higher Education Act with respect to the Financed Eligible
Loans, that it will acquire Eligible Loans originated under the Higher Education
Act in its capacity as an Eligible Lender and that it will not knowingly dispose
of or deliver any Financed Eligible Loans originated under the Higher Education
Act or any security interest in any such Financed Eligible Loans to any party
who is not an Eligible Lender so long as the Higher Education Act or Regulations
adopted thereunder require an Eligible Lender to be the owner or holder of such
Financed Eligible Loans; provided, however, that nothing above shall prevent the
Trustee from delivering the Eligible Loans to the Master Servicer, a Subservicer
or a Guaranty Agency.
Section 7.14. Right of Inspection. A Registered Owner shall be permitted
at reasonable times during regular business hours and in accordance with
reasonable regulations prescribed by the Trustee to examine at the principal
office of the Trustee a copy of any report or instrument theretofore filed with
the Trustee relating to the condition of the Trust Estate.
Section 7.15. Limitation with Respect to Examination of Reports. Except
as provided in this Indenture, the Trustee shall be under no duty to examine any
report or statement or other document required or permitted to be filed with it
by the Issuer.
Section 7.16. Servicing Agreements. The Trustee acknowledges the receipt
of copies of the Master Servicing Agreement and Subservicing Agreements
described in Section 4.04 hereof.
Section 7.17. Additional Covenants of Trustee. The Trustee, by the
execution hereof, covenants, represents and agrees that:
(a) it will not exercise any of the rights, duties or privileges
under this Indenture in such manner as would cause the Eligible Loans
held or acquired under the terms hereof to be transferred, assigned or
pledged as security to any person or entity other than as permitted by
this Indenture; and
(b) it will comply with the Higher Education Act and the
Regulations and will, upon written notice from an Authorized
Representative of the Issuer, the Secretary or the Guaranty Agency, use
its reasonable efforts to cause this Indenture to be amended (in
accordance with Section 8.01 hereof) if the Higher Education Act or
Regulations are hereafter amended so as to be contrary to the terms of
this Indenture.
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Section 7.18. Notices to Rating Agencies. It shall be the duty of the
Issuer to notify each Rating Agency then rating any of the Notes of (a) any
amendment, change, expiration, extension or renewal of this Indenture, (b)
prepayment or defeasance of all the Notes, (c) any change in the Trustee or (d)
any other information reasonably required to be reported to each Rating Agency
under any Supplemental Indenture; provided, however, the provisions of this
Section do not apply when such documents have been previously supplied to such
Rating Agency and the Trustee has received written evidence to such effect, all
as may be required by this Indenture. All notices required to be forwarded to
the Rating Agencies under this Section shall be sent in writing at the following
addresses:
Via electronic delivery to Servicer_reports@sandp.com
For any information not available in electronic format:
Standard & Poor's Ratings Services
a Division of the McGraw-Hill Companies, Inc.
55 Water Street, 41st Floor
New York, New York 10041-0003
Attention: ABS Surveillance Group
Fitch, Inc.
One State Street Plaza
New York, New York 10004
Attention: ABS Surveillance
Moody's Investors Service
99 Church Street
New York, New York 10007
Attention: ABS Monitoring Group
The Trustee also acknowledges that each Rating Agency's periodic review
for maintenance of a Rating on any series of the Notes may involve discussions
and/or meetings with representatives of the Trustee at mutually agreeable times
and places.
Section 7.19. Merger of the Trustee. Any corporation into which the
Trustee may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Trustee shall be a
party, or any corporation succeeding to all or substantially all of the
corporate trust business of the Trustee, shall be the successor of the Trustee
hereunder, provided such corporation shall be otherwise qualified and eligible
under this Indenture, without the execution or filing of any paper of any
further act on the part of any other parties hereto.
Section 7.20. Receipt of Funds from Master Servicer or a Subservicer.
The Trustee shall not be accountable or responsible in any manner whatsoever for
any action of the Issuer, the Administrator, the depository bank of any funds of
the Issuer, or the Master Servicer or a Subservicer while such Master Servicer
or Subservicer is acting as bailee or agent of the Trustee with respect to the
Eligible Loans for actions taken in compliance with any instruction or direction
given to the Trustee, or for the application of funds or moneys by the Master
Servicer or a Subservicer until such time as funds are received by the Trustee.
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Section 7.21. Special Circumstances Leading to Resignation of Trustee.
Because the Trustee serves as trustee hereunder for Obligations of different
priorities, it is possible that circumstances may arise which will cause the
Trustee to resign from its position as trustee for one or more of the
Obligations. In the event that the Trustee makes a determination that it should
so resign, due to the occurrence of an Event of Default or potential default
hereunder, or otherwise, the Issuer may permit such resignation as to one or
more of the Obligations or request the Trustee's resignation as to all
Obligations, as the Issuer may elect. If the Issuer should determine that a
conflict of interest has arisen as to the trusteeship of any of the Obligations,
it may authorize and execute a Supplemental Indenture with one or more successor
Trustees, under which the administration of certain of the Obligations would be
separated from the administration of the other Obligations.
Section 7.22. Survival of Trustee's Rights to Receive Compensation,
Reimbursement and Indemnification. The Trustee's rights to receive compensation,
reimbursement and indemnification of money due and owing hereunder at the time
of the Trustee's resignation or removal shall survive the Trustee's resignation
or removal.
Section 7.23. Corporate Trustee Required; Eligibility; Conflicting
Interests. There shall at all times be a Trustee hereunder which shall be
eligible to act as Trustee under Section 310(a)(1) of the Trust Indenture Act
and shall have a combined capital and surplus of at least $50,000,000. If such
corporation publishes reports of condition at least annually, pursuant to law or
the requirements of federal, state, territorial or District of Columbia
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, it shall resign immediately in
the manner and with the effect hereinafter specified in this Article. Neither
the Issuer nor any Person directly or indirectly controlling or controlled by,
or under common control with, the Issuer shall serve as Trustee.
Section 7.24. Trustee May File Proofs of Claim. In case of the pendency
of any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
the Issuer or any other obligor upon the Notes or the property of the Issuer or
of such other obligor or their creditors, the Trustee (irrespective of whether
the principal of the Notes of any series shall then be due and payable as
therein expressed or by declaration or otherwise and irrespective of whether the
Trustee shall have made any demand on the Issuer for the payment of overdue
principal, premium, if any, or interest) shall be entitled and empowered, by
intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount, or such
lesser amount as may be provided for in the Notes, of principal (and
premium, if any) and interest, if any, owing and unpaid in respect of
the Notes and to file such other papers or documents as may be necessary
or advisable in order to have the claims of the Trustee (including any
claim for the reasonable fees, compensation, expenses, disbursements and
advances of the Trustee and its agents and counsel) and of the
Registered Owners allowed in such judicial proceeding; and
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(b) to collect and receive any money or other property payable
or deliverable on any such claims and to distribute the same; and any
custodian, receiver, assignee, trustee, liquidator, sequestrator (or
other similar official) in any such judicial proceeding is hereby
authorized by each Registered Owner of Notes to make such payments to
the Trustee, and if the Trustee shall consent to the making of such
payments directly to the Registered Owners, to pay to the Trustee any
amount due to it for the reasonable fees, compensation, expenses,
disbursements and advances of the Trustee and any predecessor Trustee,
their agents and counsel, and any other amounts due the Trustee or any
predecessor Trustee.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Registered Owner of
a Note any plan of reorganization, arrangement, adjustment or composition
affecting the Notes or the rights of any Registered Owner thereof, or to
authorize the Trustee to vote in respect of the claim of any Registered Owner of
a Note in any such proceeding.
In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party), the Trustee shall be held to represent all the
Registered Owners of the Notes, and it shall not be necessary to make any
Registered Owners of the Notes parties to any such proceedings.
Section 7.25. No Petition. The Trustee will not at any time institute
against the Issuer any bankruptcy proceeding under any United States federal or
State bankruptcy or similar law in connection with any obligations of the Issuer
under this Indenture.
ARTICLE VIII
SUPPLEMENTAL INDENTURES
Section 8.01. Supplemental Indentures Not Requiring Consent of
Registered Owners. The Issuer and the Trustee may, without the consent of or
notice to any of the Registered Owners of any Obligations enter into any
indenture or indentures supplemental to this Indenture for any one or more of
the following purposes:
(a) to cure any ambiguity or formal defect or omission in this
Indenture;
(b) to grant to or confer upon the Trustee for the benefit of
the Registered Owners any additional benefits, rights, remedies, powers
or authorities that may lawfully be granted to or conferred upon the
Registered Owners or the Trustee;
(c) to subject to this Indenture additional revenues, properties
or collateral;
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(d) to modify, amend or supplement this Indenture or any
indenture supplemental hereto in such manner as to permit the
qualification hereof and thereof under the Trust Indenture Act of 1939
or any similar federal statute hereafter in effect or to permit the
qualification of the Notes for sale under the securities laws of the
United States of America or of any of the states of the United States of
America, and, if they so determine, to add to this Indenture or any
indenture supplemental hereto such other terms, conditions and
provisions as may be permitted by said Trust Indenture Act of 1939 or
similar federal statute;
(e) to evidence the appointment of a separate or co-Trustee or a
co-registrar or transfer agent or the succession of a new Trustee
hereunder, or any additional or substitute Guaranty Agency, the Master
Servicer or a Subservicer;
(f) to add such provisions to or to amend such provisions of
this Indenture as may be necessary or desirable to assure implementation
of the Program in conformance with the Higher Education Act if along
with such Supplemental Indenture there is filed an opinion of counsel to
the effect that the addition or amendment of such provisions will in no
way impair the existing security of the Registered Owners of any
Outstanding Obligations;
(g) to make any change as shall be necessary in order to obtain
and maintain for any of the Notes an investment grade Rating from a
nationally recognized rating service, which changes, in the opinion of
the Trustee are not to the prejudice of the Registered Owner of any of
the Obligations;
(h) to make any changes necessary to comply with the Higher
Education Act, the Regulations or the Code and the regulations
promulgated thereunder;
(i) to make the terms and provisions of this Indenture,
including the lien and security interest granted herein, applicable to a
Derivative Product, and to modify this Indenture with respect to any
particular Derivative Product;
(j) to create any additional Funds or Accounts or Subaccounts
under this Indenture deemed by the Trustee to be necessary or desirable;
(k) to make any other change with a Rating Confirmation; or
(l) to make any other change which, in the judgment of the
Trustee is not to the material prejudice of the Registered Owners of any
Obligations;
provided, however, that nothing in this Section shall permit, or be construed as
permitting, any modification of the trusts, powers, rights, duties, remedies,
immunities and privileges of the Trustee without the prior written approval of
the Trustee, which approval shall be evidenced by execution of a Supplemental
Indenture.
Section 8.02. Supplemental Indentures Requiring Consent of Registered
Owners. Exclusive of Supplemental Indentures covered by Section 8.01 hereof and
subject to the terms and provisions contained in this Section, and not
otherwise, the Registered Owners of not less than a majority of the collective
aggregate principal amount of the Obligations then Outstanding shall have the
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right, from time to time, to consent to and approve the execution by the Issuer
and the Trustee of such other indenture or indentures supplemental hereto as
shall be deemed necessary and desirable by the Trustee for the purpose of
modifying, altering, amending, adding to or rescinding, in any particular, any
of the terms or provisions contained in this Indenture or in any Supplemental
Indenture; provided, however, that nothing in this Section shall permit, or be
construed as permitting (a) without the consent of the Registered Owners of all
then Outstanding Obligations, (i) an extension of the maturity date of the
principal of or the interest on any Obligation, or (ii) a reduction in the
principal amount of any Obligation or the rate of interest thereon, or (iii) a
privilege or priority of any Obligation or Obligations over any other Obligation
or Obligations except as otherwise provided herein, or (iv) a reduction in the
aggregate principal amount of the Obligations required for consent to such
Supplemental Indenture, or (v) the creation of any lien other than a lien
ratably securing all of the Obligations at any time Outstanding hereunder except
as otherwise provided herein; or (b) any modification of the trusts, powers,
rights, obligations, duties, remedies, immunities and privileges of the Trustee
without the prior written approval of the Trustee.
If at any time the Issuer shall request the Trustee to enter into any
such Supplemental Indenture for any of the purposes of this Section, the Trustee
shall, upon being satisfactorily indemnified with respect to expenses, cause
notice of the proposed execution of such Supplemental Indenture to be mailed by
registered or certified mail to each Registered Owner of an Obligation at the
address shown on the registration books or listed in any Derivative Product.
Such notice (which shall be prepared by the Issuer) shall briefly set forth the
nature of the proposed Supplemental Indenture and shall state that copies
thereof are on file at the principal corporate trust office of the Trustee for
inspection by all Registered Owners. If, within 60 days, or such longer period
as shall be prescribed by the Issuer, following the mailing of such notice, the
Registered Owners of not less than a majority of the collective aggregate
principal amount of the Obligations Outstanding at the time of the execution of
any such Supplemental Indenture shall have consented in writing to and approved
the execution thereof as herein provided, no Registered Owner of any Obligation
shall have any right to object to any of the terms and provisions contained
therein, or the operation thereof, or in any manner to question the propriety of
the execution thereof, or to enjoin or restrain the Trustee or the Issuer from
executing the same or from taking any action pursuant to the provisions thereof.
Upon the execution of any such Supplemental Indenture as in this Section
permitted and provided, this Indenture shall be and be deemed to be modified and
amended in accordance therewith.
Section 8.03. Additional Limitation on Modification of Indenture. None
of the provisions of this Indenture (including Sections 8.01 and 8.02 hereof)
shall permit an amendment to the provisions of the Indenture which permits the
transfer of all or part of the Financed Eligible Loans originated under the
Higher Education Act or granting of a security interest therein to any Person
other than an Eligible Lender, the Master Servicer or a Subservicer, unless the
Higher Education Act or Regulations are hereafter modified so as to permit the
same. The Trustee may request an opinion of counsel to the effect that an
amendment or supplement to this Indenture was adopted in conformance with this
Indenture.
Section 8.04. Notice of Defaults. Within 90 days after the occurrence of
any default hereunder with respect to the Notes, the Trustee shall transmit in
the manner and to the extent provided in Section 313(c) of the Trust Indenture
Act, notice of such default hereunder known to the Trustee, unless such default
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shall have been cured or waived; provided, however, that, except in the case of
a default in the payment of the principal of (or premium, if any) or interest
with respect to any Note, or in the payment of any sinking fund installment with
respect to the Notes, the Trustee shall be protected in withholding such notice
if and so long as an authorized officer of the Trustee in good faith determine
that the withholding of such notice is in the interest of the Registered Owners
of the Notes. For the purpose of this Section, the term "default" means any
event which is, or after notice or lapse of time or both would become, an Event
of Default with respect to the Notes.
Section 8.05. Conformity with the Trust Indenture Act. Every
supplemental indenture executed pursuant to this Article shall conform to the
requirements of the Trust Indenture Act as then in effect.
ARTICLE IX
GENERAL PROVISIONS
Section 9.01. Notices. Any notice, request or other instrument required
by this Indenture to be signed or executed by the Registered Owners of
Obligations may be executed by the execution of any number of concurrent
instruments of similar tenor, and may be signed or executed by such Registered
Owners of Obligations in person or by agent appointed in writing. As a condition
for acting thereunder the Trustee may demand proof of the execution of any such
instrument and of the fact that any person claiming to be the owner of any of
said Obligations is such owner and may further require the actual deposit of
such Obligation or Obligations with the Trustee. The fact and date of the
execution of such instrument may be proved by the certificate of any officer in
any jurisdiction who by the laws thereof is authorized to take acknowledgments
of deeds within such jurisdiction, that the person signing such instrument
acknowledged before him the execution thereof, or may be proved by any affidavit
of a witness to such execution sworn to before such officer.
The amount of Notes held by any person executing such instrument as a
Registered Owner of Notes and the fact, amount and numbers of the Notes held by
such person and the date of his holding the same may be proved by a certificate
executed by any responsible trust company, bank, banker or other depository in a
form approved by the Trustee, showing that at the date therein mentioned such
person had on deposit with such depository the Notes described in such
certificate; provided, however, that at all times the Trustee may require the
actual deposit of such Note or Notes with the Trustee.
All notices, requests and other communications to any party hereunder
shall be in writing (including bank wire, telex, telecopy, electronic
communication, facsimile or similar writing) at the following addresses, and
each address shall constitute each party's respective "Principal Office" for
purposes of this Indenture:
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If intended for the Issuer:
Nelnet Student Loan Trust 2004-4
c/o Wilmington Trust Company, Delaware Trustee
Rodney Square North
1100 North Market Street
Wilmington, DE 19890
Attention: Corporate Trust Administration
Telephone: (302) 651-1000
Facsimile: (302) 636-4140
With a copy to the Administrator:
Nelnet, Inc.
121 South 13th Street, Suite 201
Lincoln, NE 68505
Attention: Terry J. Heimes
Telephone: (402) 458-2303
Facsimile: (402) 458-2399
If intended for the Trustee:
Zions First National Bank
717 Seventeenth Street, Suite 301
Denver, CO 80202
Attention: Corporate Trust Department
Telephone: (720) 947-7475
Facsimile: (720) 947-7480
Any party may change the address to which subsequent notices to such
party are to be sent, or of its Principal Office, by notice to the others,
delivered by hand or received by telex or facsimile or registered first-class
mail, postage prepaid. Each such notice, request or other communication shall be
effective when delivered by hand or received by facsimile or registered
first-class mail, postage prepaid.
Section 9.02. Covenants Bind Issuer. The covenants, agreements,
conditions, promises, and undertakings in this Indenture shall extend to and be
binding upon the successors and assigns of the Issuer, and all of the covenants
hereof shall bind such successors and assigns, and each of them, jointly and
severally. All the covenants, conditions and provisions hereof shall be held to
be for the sole and exclusive benefit of the parties hereto and their successors
and assigns and of the Registered Owners from time to time of the Obligations.
No extension of time of payment of any of the Obligations shall operate
to release or discharge the Issuer, it being agreed that the liability of the
Issuer, to the extent permitted by law, shall continue until all of the
Obligations are paid in full, notwithstanding any transfer of Financed Eligible
Loans or extension of time for payment.
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Section 9.03. Lien Created. This Indenture shall operate effectually as
(a) a grant of lien on and security interest in, and (b) an assignment of, the
Trust Estate.
Section 9.04. Severability of Lien. If the lien of this Indenture shall
be or shall ever become ineffectual, invalid or unenforceable against any part
of the Trust Estate, which is not subject to the lien, because of want of power
or title in the Issuer, the inclusion of any such part shall not in any way
affect or invalidate the pledge and lien hereof against such part of the Trust
Estate as to which the Issuer in fact had the right to pledge.
Section 9.05. Consent of Registered Owners Binds Successors. Any request
or consent of the Registered Owner of any Obligations given for any of the
purposes of this Indenture shall bind all future Registered Owners of the same
Obligation or any Obligations issued in exchange therefor or in substitution
thereof in respect of anything done or suffered by the Issuer or the Trustee in
pursuance of such request or consent.
Section 9.06. Nonliability of Persons; No General Obligation. It is
hereby expressly made a condition of this Indenture that any agreements,
covenants or representations herein contained or contained in the Notes do not
and shall never constitute or give rise to a personal or pecuniary liability or
charge against the organizers, officers, employees, agents or trustees or the
Administrator of the Issuer, or against the general credit of the Issuer, and in
the event of a breach of any such agreement, covenant or representation, no
personal or pecuniary liability or charge payable directly or indirectly from
the general revenues of the Issuer shall arise therefrom. Nothing contained in
this Section, however, shall relieve the Issuer from the observance and
performance of the several covenants and agreements on its part herein
contained.
Section 9.07. Nonpresentment of Notes or Interest Checks. Should any of
the Notes or interest checks not be presented for payment when due, the Trustee
shall retain from any money transferred to it for the purpose of paying the
Notes or interest checks so due, for the benefit of the Registered Owners
thereof, a sum of money sufficient to pay such Notes or interest checks when the
same are presented by the Registered Owners thereof for payment. Such money
shall not be required to be invested. All liability of the Issuer to the
Registered Owners of such Notes or interest checks and all rights of such
Registered Owners against the Issuer under the Notes or interest checks or under
this Indenture shall thereupon cease and determine, and the sole right of such
Registered Owners shall thereafter be against such deposit. If any Note or
interest check shall not be presented for payment within the period of two years
following its payment or prepayment date, the Trustee shall return to the Issuer
the money theretofore held by it for payment of such Note or interest check, and
such Note or interest check shall (subject to the defense of any applicable
statute of limitation) thereafter be an unsecured obligation of the Issuer. The
Trustee's responsibility for any such money shall cease upon remittance thereof
to the Issuer.
Section 9.08. Security Agreement. This Indenture constitutes a Financing
Statement and a Security Agreement under the Delaware Uniform Commercial Code
and the Utah Uniform Commercial Code.
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Section 9.09. Laws Governing. It is the intent of the parties hereto
that this Indenture shall in all respects be governed by the laws of the State
of New York. This Indenture is subject to the provisions of the Trust Indenture
Act that are required to be part of this Indenture and shall, to the extent
applicable, be governed by such provisions.
Section 9.10. Severability. If any covenant, agreement, waiver, or part
thereof in this Indenture contained be forbidden by any pertinent law or under
any pertinent law be effective to render this Indenture invalid or unenforceable
or to impair the lien hereof, then each such covenant, agreement, waiver, or
part thereof shall itself be and is hereby declared to be wholly ineffective,
and this Indenture shall be construed as if the same were not included herein.
Section 9.11. Exhibits. The terms of the Schedules and Exhibits, if any,
attached to this Indenture are incorporated herein in all particulars.
Section 9.12. Non-Business Days. Except as may otherwise be provided
herein, if the date for making payment of any amount hereunder or on any Note,
or if the date for taking any action hereunder, is not a Business Day, then such
payment can be made without accruing further interest or action can be taken on
the next succeeding Business Day, with the same force and effect as if such
payment were made when due or action taken on such required date.
Section 9.13. Parties Interested Herein. Nothing in this Indenture
expressed or implied is intended or shall be construed to confer upon, or to
give to, any person or entity, other than the Trustee, the Delaware Trustee, the
paying agent, if any, and the Registered Owners of the Obligations, any right,
remedy or claim under or by reason of this Indenture or any covenant, condition
or stipulation hereof, and all covenants, stipulations, promises and agreements
in this Indenture contained by and on behalf of the Issuer shall be for the sole
and exclusive benefit of the Trustee, the paying agent, if any, and the
Registered Owners of the Obligations.
Section 9.14. Obligations Are Limited Obligations. The Notes and the
obligations of the Issuer contained in this Indenture are special, limited
obligations of the Issuer, secured by and payable solely from the Trust Estate
herein provided. The Issuer shall not be obligated to pay the Notes, the
interest thereon, or any other obligation created by or arising from this
Indenture from any other source.
Section 9.15. Limitations on Counterparty Rights. No Counterparty which
shall be in default under any Derivative Product with the Issuer shall have any
of the rights granted to a Counterparty or as the Registered Owner of an
Obligation hereunder. A Counterparty which is in default under any Derivative
Product shall however, continue to maintain all obligations undertaken by it
under the terms of its Derivative Product. No Counterparty shall have any
consent or voting rights under this Indenture, or any rights to instruct the
Trustee to take, or refrain from taking, any action hereunder except upon
satisfaction of the Rating Confirmation.
Section 9.16. Disclosure of Names and Addresses of Registered Owners.
(a) Registered Owners may communicate pursuant to Section 312(b)
of the Trust Indenture Act with other Registered Owners with respect to
their rights under this Indenture or under the Notes. Upon receipt by
the Trustee of any request by three or more Registered Owners or by one
or more holders of Notes evidencing not less than 25% of the Outstanding
principal amount of the Notes to receive a copy of the current list of
Registered Owners (whether or not made pursuant to Section 312(b) of the
Trust Indenture Act), the Trustee shall promptly notify the Issuer
thereof by providing to the Issuer a copy of such request and a copy of
the list of Registered Owners produced in response thereto.
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(b) Registered Owners of Notes, by receiving and holding the
same, agree with the Issuer and the Trustee that neither the Issuer nor
the Trustee nor any Securities Depository shall be held accountable by
reason of the disclosure of any information as to the names and
addresses of the Registered Owners of Notes in accordance with Section
312 of the Trust Indenture Act, regardless of the source from which such
information was derived, and that the Trustee shall not be held
accountable by reason of mailing any material pursuant to a request made
under Section 312(b) of the Trust Indenture Act.
Section 9.17. Aggregate Principal Amount of Obligations. Whenever in
this Indenture reference is made to the aggregate principal amount of any
Obligations, such phrase shall mean, at any time, the principal amount of any
Notes and the Derivative Value of any Derivative Product.
Section 9.18. Financed Eligible Loans. The Issuer expects to acquire
Eligible Loans and to transfer Eligible Loans to the Trustee, in accordance with
this Indenture, which Eligible Loans, upon becoming subject to the lien of this
Indenture, constitute Financed Eligible Loans, as defined herein. If for any
reason a Financed Eligible Loan does not constitute an Eligible Loan, or ceases
to constitute an Eligible Loan, such loan shall continue to be subject to the
lien of this Indenture as a Financed Eligible Loan.
Section 9.19. Concerning the Delaware Trustee. It is expressly
understood and agreed by the parties to this Indenture and the Registered Owners
that (a) this Indenture is executed and delivered by the Delaware Trustee not in
its individual or personal capacity but solely in its capacity as Delaware
Trustee under the Trust Agreement on behalf of the Issuer, in the exercise of
the powers and authority conferred and vested in it as Delaware Trustee under
the Trust Agreement, subject to the protections, indemnities and limitations
from liability afforded to the Delaware Trustee thereunder; (b) the
representations, warranties, covenants, undertakings, agreements and obligations
by the Delaware Trustee are made and intended not as personal representations,
warranties, covenants, undertakings, agreements and obligations by Wilmington
Trust Company, but are made and intended for the purpose of only binding the
Trust Estate, as defined in the Trust Agreement, and the Issuer; (c) nothing
contained herein shall be construed as creating any liability on Wilmington
Trust Company, individually or personally, to perform any expressed or implied
covenant, duty or obligation of any kind whatsoever contained herein; and (d)
under no circumstances shall Wilmington Trust Company, be personally liable for
the payment of any fees, costs, indebtedness or expenses of any kind whatsoever
or be personally liable for the breach or failure of any obligation,
representation, agreement, warranty or covenant whatsoever made or undertaken by
the Delaware Trustee or Issuer hereunder.
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ARTICLE X
PAYMENT AND CANCELLATION OF NOTES
AND SATISFACTION OF INDENTURE
Section 10.01. Trust Irrevocable. The trust created by the terms and
provisions of this Indenture is irrevocable until the indebtedness secured
hereby (the Notes and interest thereon) and all Issuer Derivative Payments are
fully paid or provision made for its payment as provided in this Article.
Section 10.02. Satisfaction of Indenture.
(a) If the Issuer shall pay, or cause to be paid, or there shall
otherwise be paid (i) to the Registered Owners of the Notes, the
principal of and interest on the Notes, at the times and in the manner
stipulated in this Indenture; and (ii) to each Counterparty, all Issuer
Derivative Payments then due, then the pledge of the Trust Estate, and
all covenants, agreements and other obligations of the Issuer to the
Registered Owners of Notes shall thereupon cease, terminate and become
void and be discharged and satisfied. In such event, the Trustee shall
execute and deliver to the Issuer all such instruments as may be
desirable to evidence such discharge and satisfaction, and the Trustee
shall pay over or deliver all money held by it under this Indenture to
the party entitled to receive the same under this Indenture. If the
Issuer shall pay or cause to be paid, or there shall otherwise be paid,
to the Registered Owners of any Outstanding Notes the principal of and
interest on such Notes and to each Counterparty all Counterparty
Payments then due, at the times and in the manner stipulated in this
Indenture and in the Derivative Product, such Notes and each
Counterparty shall cease to be entitled to any lien, benefit or security
under this Indenture, and all covenants, agreements and obligations of
the Issuer to the Registered Owners thereof and each Counterparty shall
thereupon cease, terminate and become void and be discharged and
satisfied.
(b) Notes or interest installments shall be deemed to have been
paid within the meaning of Section 10.02(a) hereof if money for the
payment thereof has been set aside and is being held in trust by the
Trustee at the Note Final Maturity Date or earlier prepayment date
thereof. Any Outstanding Note shall, prior to the Note Final Maturity
Date or earlier prepayment thereof, be deemed to have been paid within
the meaning and with the effect expressed in Section 10.02(a) hereof if
(i) such Note is to be prepaid on any date prior to its Note Final
Maturity Date and (ii) the Issuer shall have given notice of prepayment
as provided herein on said date, there shall have been deposited with
the Trustee either money (fully insured by the Federal Deposit Insurance
Issuer or fully collateralized by Governmental Obligations) in an amount
which shall be sufficient, or Governmental Obligations (including any
Governmental Obligations issued or held in book-entry form on the books
of the Department of Treasury of the United States of America) the
principal of and the interest on which when due will provide money
which, together with the money, if any, deposited with the Trustee at
the same time, shall be sufficient, to pay when due the principal of and
interest to become due on such Note on and prior to the prepayment date
or Note Final Maturity Date thereof, as the case may be. Notwithstanding
anything herein to the contrary, however, no such deposit shall have the
effect specified in this subsection (b) if made during the existence of
an Event of Default, unless made with respect to all of the Notes then
Outstanding. Neither Governmental Obligations nor money deposited with
the Trustee pursuant to this subsection (b) nor principal or interest
payments on any such Governmental Obligations shall be withdrawn or used
for any purpose other than, and shall be held irrevocably in trust in an
escrow account for, the payment of the principal of and interest on such
Notes. Any cash received from such principal of and interest on such
Governmental Obligations deposited with the Trustee, if not needed for
such purpose, shall, to the extent practicable, be reinvested in
Governmental Obligations maturing at times and in amounts sufficient to
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pay when due the principal of and interest on such Notes on and prior to
such prepayment date or Note Final Maturity Date thereof, as the case
may be, and interest earned from such reinvestments shall be paid over
to the Issuer, as received by the Trustee, free and clear of any trust,
lien or pledge. Any payment for Governmental Obligations purchased for
the purpose of reinvesting cash as aforesaid shall be made only against
delivery of such Governmental Obligations. For the purposes of this
Section, "Governmental Obligations" shall mean and include only
non-callable direct obligations of the Department of the Treasury of the
United States of America or portions thereof (including interest or
principal portions thereof), and such Governmental Obligations shall be
of such amounts, maturities and interest payment dates and bear such
interest as will, without further investment or reinvestment of either
the principal amount thereof or the interest earnings therefrom, be
sufficient to make the payments required herein, and which obligations
have been deposited in an escrow account which is irrevocably pledged as
security for the Notes. Such term shall not include mutual funds and
unit investment trusts.
(c) Any Issuer Derivative Payments are deemed to have been paid
and the applicable Derivative Product terminated when payment of all
Issuer Derivative Payments due and payable to each Counterparty under
its respective Derivative Product have been made or duly provided for to
the satisfaction of each Counterparty and the respective Derivative
Product has been terminated.
(d) In no event shall the Trustee deliver over to the Issuer any
Financed Eligible Loans originated under the Higher Education Act unless
the Issuer is an Eligible Lender, if the Higher Education Act or
Regulations then in effect require the owner or holder of such Financed
Eligible Loans to be an Eligible Lender.
(e) The provisions of this Section are applicable to the Notes
and the Issuer Derivative Payments.
Section 10.03. Optional Purchase of All Financed Eligible Loans. The
Administrator shall certify to and notify the Sponsor and the Trustee in
writing, within 15 days after the last Business Day of each Collection Period in
which the then outstanding Pool Balance is 12% or less of the Initial Pool
Balance, of the percentage that the then outstanding Pool Balance bears to the
Initial Pool Balance. The Sponsor shall have the option to purchase all of the
Financed Eligible Loans on the date (the "Optional Purchase Date") that is the
tenth (10th) Business Day preceding the Quarterly Distribution Date next
succeeding the date on which the then outstanding Pool Balance is 10% or less of
the Initial Pool Balance. To exercise the option described in this Section, the
Sponsor shall deposit in the Collection Fund on the Optional Purchase Date, an
amount equal to the aggregate Purchase Amount for the Financed Eligible Loans
and the related rights with respect thereto, plus the appraised value of any
such other property held in the Trust Estate other than the Funds and Accounts,
such value to be determined by an appraiser mutually agreed upon by the Sponsor
and the Trustee; provided, however, that the Sponsor may not effect such
purchase if such aggregate Purchase Amounts do not equal or exceed the Minimum
Purchase Amount.
Section 10.04. Auction of Financed Eligible Loans. If the Sponsor does
not exercise its option to purchase Financed Eligible Loans pursuant to Section
10.03 hereof, the Trustee (or its designated agent) shall, promptly after the
Business Day next succeeding the Optional Purchase Date, offer for sale Financed
Eligible Loans in an amount sufficient to redeem all Notes Outstanding on such
Quarterly Distribution Date, and any such sale shall be consummated on or before
such Quarterly Distribution Date (the "Trust Auction Date"). The Trustee shall
provide written notice to the Sponsor of any such offer for sale at least three
Business Days in advance of the Trust Auction Date. If at least two independent
bids are received, the Trustee (or its designated agent) shall solicit and
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resolicit new bids from all participating bidders until only one bid remains or
the remaining bidders decline to resubmit bids. The Trustee shall accept the
highest of the remaining bids if it equals or exceeds the Minimum Purchase Price
described above. If Nelnet, Inc., or its Affiliates, bid to purchase the
Financed Eligible Loans and less than two independent bids are received, the
Trustee the shall accept the highest of such remaining bids if it is equal to or
in excess of both (i) the Minimum Purchase Amount and (ii) the fair market value
of such Financed Eligible Loans as of the end of the Collection Period
immediately preceding the Trust Auction Date. If at least two bids are not
received or the highest bid after the resolicitation process is completed is not
equal to or in excess of the higher of the amounts described in the preceding
sentences, the Trustee shall not consummate such sale. The Trustee may consult,
and, at the direction of the Sponsor, shall consult, with a financial advisor,
including an underwriter of the Notes or the Administrator, to determine if the
fair market value of the Financed Eligible Loans has been offered. The proceeds
of any such sale will be applied to the redemption of all Notes Outstanding in
accordance with Section 5.04(e) hereof. Unless requested by the Administrator,
if the sale is not completed, the Trustee may, but will not be obligated to,
solicit bids for sale of the Financed Eligible Loans with respect to future
Quarterly Distribution Dates upon terms similar to those described above. The
Trustee shall be obligated to make such solicitations, however, if requested to
do so by the Administrator. Notice of the prepayment of any Obligations
resulting from a purchase of the Financed Eligible Loans on the Optional
Purchase Date or the auction of the Financed Eligible Loans on the Trust Auction
Date, shall be given by the Trustee to the Registered Owners by first-class mail
within five Business Days of such Optional Purchase Date or Trust Auction Date.
Section 10.05. Cancellation of Paid Notes. Any Notes which have been
paid or purchased by the Issuer, mutilated Notes replaced by new Notes, and any
temporary Note for which definitive Notes have been delivered shall (unless
otherwise directed by the Issuer by Issuer Order) forthwith be cancelled by the
Trustee and, except for temporary Notes, returned to the Issuer.
[Remainder of This Page Intentionally Left Blank]
78
IN WITNESS WHEREOF, the Issuer has caused this Indenture to be executed
in its organizational name and behalf by its Delaware Trustee, and the Trustee,
to evidence its acceptance of the trusts hereby created, has caused this
Indenture to be executed in its organizational name and behalf, all in multiple
counterparts, each of which shall be deemed an original, and the Issuer and the
Trustee have caused this Indenture to be dated as of the date herein above first
shown.
NELNET STUDENT LOAN
TRUST 2004-4, a Delaware statutory trust
By: WILMINGTON TRUST COMPANY, not in its individual
capacity or personal capacity but solely in its
capacity as Delaware Trustee
By /s/ JoAnn A. Rozell
--------------------------------------------------
Name JoAnn A. Rozell
------------------------------------------------
Title Financial Services Officer
-----------------------------------------------
ZIONS FIRST NATIONAL BANK, as Trustee
By /s/ David W. Bata
--------------------------------------------------
David W. Bata, Vice President
Acknowledged and accepted as to clause "C" of the
Granting Clauses as of the day and year first written
above:
ZIONS FIRST NATIONAL BANK, as Eligible Lender Trustee
By /s/ David W. Bata
--------------------------------------------------
David W. Bata, Vice President
79
EXHIBIT A
ELIGIBLE LOAN ACQUISITION CERTIFICATE
This Eligible Loan Acquisition Certificate is submitted pursuant to the
provisions of Section 5.02 of the Indenture of Trust, dated as of September 1,
2004, as amended (the "Indenture"), between Nelnet Student Loan Trust 2004-4
(the "Issuer") and Zions First National Bank, as Trustee. All capitalized terms
used in this Certificate and not otherwise defined herein shall have the same
meanings given to such terms in the Indenture. In your capacity as Trustee, you
are hereby authorized and requested to disburse to _________________ (the
"Seller") the sum of $__________ (or, in the case of an exchange, the Eligible
Loans listed in Exhibit A hereto) for the acquisition of Eligible Loans. With
respect to the Eligible Loans so to be acquired, the Issuer hereby certifies as
follows:
1. The Eligible Loans to be acquired are those specified in Schedule A
attached hereto (the "Acquired Eligible Loans"). The remaining unpaid principal
amount of each Acquired Eligible Loan is as shown on such Schedule A.
2. The amount to be disbursed pursuant to this Certificate does not
exceed the amount permitted by Section 5.02 of the Indenture, plus accrued
interest.
3. Each Acquired Eligible Loan is an Eligible Loan authorized so to be
acquired by the Indenture.
4. The following items have been received and are being retained, on
your behalf, by the Issuer, the Master Servicer or a Subservicer):
(a) a copy of the Student Loan Purchase Agreement(s) between
the Issuer and the Eligible Lender with respect to the Acquired
Eligible Loans (original copy maintained on file with the Issuer on
behalf of the Trustee);
(b) with respect to each Insured Loan included among the
Acquired Eligible Loans, the Certificate of Insurance relating thereto;
(c) with respect to each Guaranteed Loan included among the
Acquired Eligible Loans, a certified copy of the Guarantee Agreement
relating thereto;
(d) an opinion of counsel to the Issuer specifying each action
necessary to perfect a security interest in all Eligible Loans to be
acquired by the Issuer pursuant to the Student Loan Purchase Agreements
in favor of the Trustee in the manner provided for by the provisions of
20 U.S.C. ss. 1087-2(d)(3) or 20 U.S.C. ss. 1082(m)(1)(D)(iv), as
applicable, (you are authorized to rely on the advice of a single
blanket opinion of counsel to the Issuer until such time as the Issuer
shall provide any amended opinion to you); and
(e) instruments duly assigning the Acquired Eligible Loans to
the Trustee.
5. The Issuer is not, on the date hereof, in default under the
Indenture or in the performance of any of its covenants and agreements made in
the Student Loan Purchase Agreement(s) relating to the Acquired Eligible Loans,
and, to the best knowledge of the Issuer, the Eligible Lender is not in default
under the Student Loan Purchase Agreement applicable to the Acquired Eligible
Loans. The Issuer is not aware of any default existing on the date hereof under
any of the other documents referred to in paragraph 4 hereof, nor of any
circumstances which would reasonably prevent reliance upon the opinion of
counsel referred to in paragraph 4(d) hereof.
6. All of the conditions specified in the Student Loan Purchase
Agreement(s) applicable to the Acquired Eligible Loans and the Indenture for the
acquisition of the Acquired Eligible Loans and the disbursement hereby
authorized and requested have been satisfied; provided that the Issuer may waive
the requirement of receiving an opinion of counsel from the counsel to the
Lender.
7. If a Financed Eligible Loan is being sold in exchange for an
Acquired Eligible Loan, the final expected maturity date of such Acquired
Eligible Loan shall be substantially similar to that of the Financed Eligible
Loan being sold and such sale and exchange shall not adversely affect the
ability of the Trust Estate to make timely principal and interest payments on
its Obligations.
8. With respect to all Acquired Eligible Loans which are Insured,
Insurance is in effect with respect thereto, and with respect to all Acquired
Eligible Loans which are Guaranteed, the Guarantee Agreement is in effect with
respect thereto.
9. The Issuer is not in default in the performance of any of its
covenants and agreements made in any Contract of Insurance or the Guarantee
Agreement applicable to the Acquired Eligible Loans.
10. The proposed use of moneys in the Acquisition Fund is in compliance
with the provisions of the Indenture.
11. The undersigned is authorized to sign and submit this Certificate
on behalf of the Issuer.
12. Eligible Loans are being acquired at a price which permits the
results of the cash flow analyses provided to the Rating Agencies on the Date of
Issuance and as revised/amended to be sustained.
WITNESS my hand this _____ day of ___________.
NELNET STUDENT LOAN TRUST 2004-4
By
Name
Title
A-2
EXHIBIT B-1
FORM OF CLASS A-1 NOTE
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer (as
defined below) or its agent for registration of transfer, exchange or payment,
and any Note issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE AS SET FORTH HEREIN. ACCORDINGLY,
THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE
AMOUNT SHOWN ON THE FACE HEREOF. THIS NOTE IS NOT GUARANTEED OR INSURED BY ANY
GOVERNMENTAL AGENCY.
Date of Issuance Maturity Date CUSIP No. ISIN No.
September 29, 2004 April 25, 2011 64031Q BF 7 US64031QBF72
PRINCIPAL SUM: **DOLLARS**
REGISTERED OWNER: **CEDE & CO.**
Nelnet Student Loan Trust 2004-4, a statutory trust organized and
existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, on each Quarterly Distribution Date the principal sum equal
to the applicable Class A-1 Noteholder's Principal Distribution Amount for such
Quarterly Distribution Date, as described in the Indenture of Trust, dated as of
September 1, 2004, between the Issuer (by Wilmington Trust Company, in its
capacity as Delaware Trustee) and Zions First National Bank, a national banking
association, as eligible lender trustee and indenture trustee (the "Trustee")
(capitalized terms used but not defined herein being defined in Article I of the
Indenture, which also contains rules as to usage that shall be applicable
herein); provided, however, that the entire unpaid principal amount of this Note
shall be due and payable on the Maturity Date specified above (the "Class A-1
Maturity Date").
The Issuer shall pay interest on this Note at the rate per annum equal
to the Class A-1 Rate (as defined herein), on each Quarterly Distribution Date
until the principal of this Note is paid or made available for payment, on the
principal amount of this Note outstanding on the preceding Quarterly
Distribution Date or the Date of Issuance in the case of the first Quarterly
Distribution Date (after giving effect to all payments of principal made on the
preceding Quarterly Distribution Date), subject to certain limitations contained
in the Indenture. Interest on this Note shall accrue from and including the
preceding Quarterly Distribution Date (or, in the case of the first Interest
Accrual Period, the Date of Issuance) to but excluding the following Quarterly
Distribution Date (each an "Interest Accrual Period"). Interest shall be
calculated on the basis of the actual number of days elapsed in each Interest
Accrual Period divided by 360 and rounding the resultant figure to the fifth
decimal point. Such principal of and interest on this Note shall be paid in the
manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Trustee whose name appears below by manual signature, this Note shall not be
entitled to any benefit under the Indenture referred to on the reverse hereof,
or be valid or obligatory for any purpose.
B-1-2
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed, manually or in facsimile, as of the date set forth below.
NELNET STUDENT LOAN TRUST 2004-4
By WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as Delaware
Trustee under the Trust Agreement,
By
Authorized Signatory
Date: __________ __, ____
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
ZIONS FIRST NATIONAL BANK, not in its
individual capacity but solely as
Trustee,
By
Authorized Signatory
Date: __________ __, ____
B-1-3
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Student Loan Asset-Backed Notes, Senior Class A-1 (the "Class
A-1 Notes"), which, together with the Issuer's Student Loan Asset-Backed Notes,
Senior Class A-2, A-3, A-4 and A-5 (together with the Class A-1 Notes, the
"Class A Notes") and the Issuer's Student Loan Asset-Backed Notes, Subordinate
Class B (the "Class B Notes" and, together with the Class A Notes, the "Notes"),
are issued under and secured by the Indenture, to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights and obligations thereunder of the Issuer, the Trustee and the
Registered Owners. The Notes are subject to all terms of the Indenture.
The Class A-1 Notes are and will be secured by the Trust Estate pledged
as security therefor as provided in the Indenture. The Class A Notes are senior
to the Class B Notes as and to the extent provided in the Indenture. The Class A
Notes are, except for certain Termination Payments that are not Priority
Termination Payments, issued on a parity with any Derivative Products entered
into by the Issuer with a Counterparty, pursuant to which the Issuer will, from
time to time, owe Issuer Derivative Payments, and will, from time to time, be
owed Counterparty Payments.
Principal of the Class A-1 Notes shall be payable on each Quarterly
Distribution Date in an amount equal to the Class A-1 Noteholder's Principal
Distribution Amount for such Quarterly Distribution Date. "Quarterly
Distribution Date" means the twenty-fifth (25th) day of each January, April,
July and October or, if any such date is not a Business Day, the immediately
succeeding Business Day, commencing January 25, 2005.
As described on the face hereof, the entire unpaid principal amount of
this Note shall be due and payable on the Class A-1 Maturity Date.
Notwithstanding the foregoing, the entire unpaid principal amount of the Notes
shall be due and payable on the date on which (a) an Event of Default shall have
occurred and be continuing and (b) either the Trustee or the Registered Owners
of Obligations representing not less than a majority of the Outstanding Amount
of the Highest Priority Obligations shall have declared the Notes to be
immediately due and payable in the manner provided in the Indenture.
Interest on the Class A-1 Notes shall be payable on each Quarterly
Distribution Date on the principal amount outstanding of the Class A-1 Notes
until the principal amount thereof is paid in full, at a rate per annum equal to
the Class A-1 Rate. The "Class A-1 Rate" for each Interest Accrual Period, other
than the first Interest Accrual Period, shall be equal to the applicable
Three-Month LIBOR, minus 0.01%. The "Class A-1 Rate" for the first Interest
Accrual Period shall be determined by reference to the following formula: x +
[27/33 * (y-x)] (where: x = Three-Month LIBOR, and y = Four-Month LIBOR), minus
0.01%, as determined by the Administrator.
B-1-4
Payments of interest on this Note on each Quarterly Distribution Date,
together with the installment of principal, if any, to the extent not in full
payment of this Note, shall be paid to the Person in whose name such Note is
registered on the Record Date by check mailed first-class, postage prepaid to
such Person's address as it appears on the records of the Trustee on such Record
Date, except that, unless definitive Notes have been issued pursuant to the
Indenture, with respect to Notes registered on the Record Date in the name of
the nominee of the Clearing Agency (initially, such nominee to be Cede & Co.),
payment shall be made by wire transfer in immediately available funds to the
account designated by such nominee. If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Quarterly Distribution Date, then the Trustee
shall notify the Person in whose name a Note is registered at the close of
business on the Record Date preceding the Quarterly Distribution Date on which
the Issuer expects that the final installment of principal of and interest on
such Note will be paid. Such notice shall be mailed or transmitted by facsimile
prior to such final Quarterly Distribution Date and shall specify that such
final installment will be payable only upon presentation and surrender of such
Note and shall specify the place where such Note may be presented and
surrendered for payment of such installment.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered upon the records of
the Trustee upon surrender for transfer of any Note at the Principal Office of
the Trustee, duly endorsed for transfer or accompanied by an assignment duly
executed by the Registered Owner or his attorney duly authorized in writing, and
thereupon the Issuer shall execute and the Trustee shall authenticate and
deliver in the name of the transferee or transferees a new fully registered Note
or Notes of the same interest rate and for a like class and aggregate principal
amount of the same maturity.
As to any Note, the person in whose name the same shall be registered
shall be deemed and regarded as the absolute owner thereof for all purposes, and
payment of either principal or interest on any fully registered Note shall be
made only to or upon the written order of the Registered Owner thereof or his
legal representative but such registration may be changed as provided in the
Indenture. All such payments shall be valid and effectual to satisfy and
discharge the liability upon such Note to the extent of the sum or sums paid.
Each Registered Owner and each transferee of a Note shall be deemed to
represent and warrant that either (a) it is not acquiring the Note directly or
indirectly for, or on behalf of, an ERISA plan or any entity whose underlying
assets are deemed to be plan assets of such ERISA plan; or (b)(i) the
acquisition and holding of the Notes will not result in a nonexempt prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code or similar
law and (ii) if the Notes are subsequently deemed to be "plan assets" pursuant
to the regulations set forth at 29 C.F.R. ss. 2510.3-101, it will promptly
dispose of the Notes.
The Trustee shall require the payment by any Registered Owner
requesting exchange or transfer of any tax or other governmental charge required
to be paid with respect to such exchange or transfer. The applicant for any such
transfer or exchange may be required to pay all taxes and governmental charges
in connection with such transfer or exchange, other than exchanges pursuant to
the Indenture.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Trustee and the Registered
Owners under the Indenture.
B-1-5
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note shall be construed in accordance with the laws of the State
of New York, without reference to its conflict of law provisions, and the
obligations, rights and remedies of the parties hereunder and thereunder shall
be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place and rate, and in the coin or currency, herein prescribed.
B-1-6
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints
attorney, to transfer said Note on the books kept for registration thereof, with
full power of substitution in the premises.
Dated:
By *
Name
Title
Signature Guaranteed:
By * *NOTICE: Signature(s) should be guaranteed
by a guarantor institution participating in the
Securities Transfer Agents Medallion Program or
in such other guarantee program acceptable to
the Trustee. The Assignor's signature to this
assignment must correspond with the name as it
appears upon the face of the within note in
every particular without alteration or any
change whatever.
B-1-7
EXHIBIT B-2
FORM OF CLASS A-2 NOTE
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer (as
defined below) or its agent for registration of transfer, exchange or payment,
and any Note issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE AS SET FORTH HEREIN. ACCORDINGLY,
THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE
AMOUNT SHOWN ON THE FACE HEREOF. THIS NOTE IS NOT GUARANTEED OR INSURED BY ANY
GOVERNMENTAL AGENCY.
Date of Issuance Maturity Date CUSIP No. ISIN No.
September 29, 2004 April 26, 2016 64031Q BG 5 US64031QBG55
PRINCIPAL SUM: **DOLLARS**
REGISTERED OWNER: **CEDE & CO.**
Nelnet Student Loan Trust 2004-4, a statutory trust organized and
existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, on each Quarterly Distribution Date the principal sum equal
to the Class A-2 Noteholder's Principal Distribution Amount for such Quarterly
Distribution Date, as described in the Indenture of Trust, dated as of September
1, 2004, between the Issuer (by Wilmington Trust Company, in its capacity as
Delaware Trustee) and Zions First National Bank, a national banking association,
as eligible lender trustee and indenture trustee (the "Trustee") (capitalized
terms used but not defined herein being defined in Article I of the Indenture,
which also contains rules as to usage that shall be applicable herein);
provided, however, that the entire unpaid principal amount of this Note shall be
due and payable on the Maturity Date specified above (the "Class A-2 Maturity
Date").
The Issuer shall pay interest on this Note at the rate per annum equal
to the Class A-2 Rate (as defined herein), on each Quarterly Distribution Date
until the principal of this Note is paid or made available for payment, on the
principal amount of this Note outstanding on the preceding Quarterly
Distribution Date or the Date of Issuance in the case of the first Quarterly
Distribution Date (after giving effect to all payments of principal made on the
preceding Quarterly Distribution Date), subject to certain limitations contained
in the Indenture. Interest on this Note shall accrue from and including the
preceding Quarterly Distribution Date (or, in the case of the first Interest
Accrual Period, the Date of Issuance) to but excluding the following Quarterly
Distribution Date (each an "Interest Accrual Period"). Interest shall be
calculated on the basis of the actual number of days elapsed in each Interest
Accrual Period divided by 360 and rounding the resultant figure to the fifth
decimal point. Such principal of and interest on this Note shall be paid in the
manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Trustee whose name appears below by manual signature, this Note shall not be
entitled to any benefit under the Indenture referred to on the reverse hereof,
or be valid or obligatory for any purpose.
B-2-2
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed, manually or in facsimile, as of the date set forth below.
NELNET STUDENT LOAN TRUST 2004-4
By WILMINGTON TRUST
COMPANY, not in
its individual
capacity but
solely as Delaware
Trustee under the
Trust Agreement,
By
Authorized Signatory
Date: __________ __, ____
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
ZIONS FIRST NATIONAL
BANK, not in its
individual capacity
but solely as Trustee,
By
Authorized Signatory
Date: __________ __, ____
B-2-3
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Student Loan Asset-Backed Notes, Senior Class A-2 (the "Class
A-2 Notes"), which, together with the Issuer's Student Loan Asset-Backed Notes,
Senior Class A-1, Class A-3, Class A-4 and Class A-5 (together with the Class
A-2 Notes, the "Class A Notes") and the Issuer's Student Loan Asset-Backed
Notes, Subordinate Class B (the "Class B Notes" and, together with the Class A
Notes, the "Notes"), are issued under and secured by the Indenture, to which
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights and obligations thereunder of the Issuer, the
Trustee and the Registered Owners. The Notes are subject to all terms of the
Indenture.
The Class A-2 Notes are and will be secured by the Trust Estate pledged
as security therefor as provided in the Indenture. The Class A Notes are senior
to the Class B Notes as and to the extent provided in the Indenture. The Class A
Notes are, except for certain Termination Payments that are not Priority
Termination Payments, issued on a parity with any Derivative Products entered
into by the Issuer with a Counterparty, pursuant to which the Issuer will, from
time to time, owe Issuer Derivative Payments, and will, from time to time, be
owed Counterparty Payments.
Principal of the Class A-2 Notes shall be payable on each Quarterly
Distribution Date in an amount equal to the Class A-2 Noteholder's Principal
Distribution Amount for such Quarterly Distribution Date. "Quarterly
Distribution Date" means the twenty-fifth (25th) day of each January, April,
July and October or, if any such date is not a Business Day, the immediately
succeeding Business Day, commencing January 25, 2005.
As described on the face hereof, the entire unpaid principal amount of
this Note shall be due and payable on the Class A-2 Maturity Date.
Notwithstanding the foregoing, the entire unpaid principal amount of the Notes
shall be due and payable on the date on which (a) an Event of Default shall have
occurred and be continuing and (b) either the Trustee or the Registered Owners
of Obligations representing not less than a majority of the Outstanding Amount
of the Highest Priority Obligations shall have declared the Notes to be
immediately due and payable in the manner provided in the Indenture.
Interest on the Class A-2 Notes shall be payable on each Quarterly
Distribution Date on the principal amount outstanding of the Class A-2 Notes
until the principal amount thereof is paid in full, at a rate per annum equal to
the Class A-2 Rate. The "Class A-2 Rate" for each Interest Accrual Period, other
than the first Interest Accrual Period, shall be equal to the applicable
Three-Month LIBOR, plus 0.02%. The "Class A-2 Rate" for the first Interest
Accrual Period shall be determined by reference to the following formula: x +
[27/33 * (y-x)] (where: x = Three-Month LIBOR, and y = Four-Month LIBOR), plus
0.02%, as determined by the Administrator.
Payments of interest on this Note on each Quarterly Distribution Date,
together with the installment of principal, if any, to the extent not in full
payment of this Note, shall be paid to the Person in whose name such Note is
registered on the Record Date by check mailed first-class, postage prepaid to
such Person's address as it appears on the records of the Trustee on such Record
Date, except that, unless definitive Notes have been issued pursuant to the
Indenture, with respect to Notes registered on the Record Date in the name of
the nominee of the Clearing Agency (initially, such nominee to be Cede & Co.),
payment shall be made by wire transfer in immediately available funds to the
B-2-4
account designated by such nominee. If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Quarterly Distribution Date, then the Trustee
shall notify the Person in whose name a Note is registered at the close of
business on the Record Date preceding the Quarterly Distribution Date on which
the Issuer expects that the final installment of principal of and interest on
such Note will be paid. Such notice shall be mailed or transmitted by facsimile
prior to such final Quarterly Distribution Date and shall specify that such
final installment will be payable only upon presentation and surrender of such
Note and shall specify the place where such Note may be presented and
surrendered for payment of such installment.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered upon the records of
the Trustee upon surrender for transfer of any Note at the Principal Office of
the Trustee, duly endorsed for transfer or accompanied by an assignment duly
executed by the Registered Owner or his attorney duly authorized in writing, and
thereupon the Issuer shall execute and the Trustee shall authenticate and
deliver in the name of the transferee or transferees a new fully registered Note
or Notes of the same interest rate and for a like class and aggregate principal
amount of the same maturity.
As to any Note, the person in whose name the same shall be registered
shall be deemed and regarded as the absolute owner thereof for all purposes, and
payment of either principal or interest on any fully registered Note shall be
made only to or upon the written order of the Registered Owner thereof or his
legal representative but such registration may be changed as provided in the
Indenture. All such payments shall be valid and effectual to satisfy and
discharge the liability upon such Note to the extent of the sum or sums paid.
Each Registered Owner and each transferee of a Note shall be deemed to
represent and warrant that either (a) it is not acquiring the Note directly or
indirectly for, or on behalf of, an ERISA plan or any entity whose underlying
assets are deemed to be plan assets of such ERISA plan; or (b)(i) the
acquisition and holding of the Notes will not result in a nonexempt prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code or similar
law and (ii) if the Notes are subsequently deemed to be "plan assets" pursuant
to the regulations set forth at 29 C.F.R. ss. 2510.3-101, it will promptly
dispose of the Notes.
The Trustee shall require the payment by any Registered Owner
requesting exchange or transfer of any tax or other governmental charge required
to be paid with respect to such exchange or transfer. The applicant for any such
transfer or exchange may be required to pay all taxes and governmental charges
in connection with such transfer or exchange, other than exchanges pursuant to
the Indenture.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
B-2-5
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Trustee and the Registered
Owners under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note shall be construed in accordance with the laws of the State
of New York, without reference to its conflict of law provisions, and the
obligations, rights and remedies of the parties hereunder and thereunder shall
be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place and rate, and in the coin or currency, herein prescribed.
B-2-6
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints
attorney, to transfer said Note on the books kept for registration thereof, with
full power of substitution in the premises.
Dated:
By *
Name
Title
Signature Guaranteed:
By * *NOTICE: Signature(s) should be guaranteed by a
guarantor institution participating in the Securities
Transfer Agents Medallion Program or in such other
guarantee program acceptable to the Trustee. The
Assignor's signature to this assignment must correspond
with the name as it appears upon the face of the within
note in every particular without alteration or any
change whatever.
B-2-7
EXHIBIT B-3
FORM OF CLASS A-3 NOTE
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer (as
defined below) or its agent for registration of transfer, exchange or payment,
and any Note issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE AS SET FORTH HEREIN. ACCORDINGLY,
THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE
AMOUNT SHOWN ON THE FACE HEREOF. THIS NOTE IS NOT GUARANTEED OR INSURED BY ANY
GOVERNMENTAL AGENCY.
Date of Issuance Maturity Date CUSIP No. ISIN No.
September 29, 2004 October 25, 2016 64031Q BH 3 US64031QBH39
PRINCIPAL SUM: **DOLLARS**
REGISTERED OWNER: **CEDE & CO.**
Nelnet Student Loan Trust 2004-4, a statutory trust organized and
existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, on each Quarterly Distribution Date the principal sum equal
to the Class A-3 Noteholder's Principal Distribution Amount for such Quarterly
Distribution Date, as described in the Indenture of Trust, dated as of September
1, 2004, between the Issuer (by Wilmington Trust Company, in its capacity as
Delaware Trustee) and Zions First National Bank, a national banking association,
as eligible lender trustee and indenture trustee (the "Trustee") (capitalized
terms used but not defined herein being defined in Article I of the Indenture,
which also contains rules as to usage that shall be applicable herein);
provided, however, that the entire unpaid principal amount of this Note shall be
due and payable on the Maturity Date specified above (the "Class A-3 Maturity
Date").
The Issuer shall pay interest on this Note at the rate per annum equal
to the Class A-3 Rate (as defined herein), on each Quarterly Distribution Date
until the principal of this Note is paid or made available for payment, on the
principal amount of this Note outstanding on the preceding Quarterly
Distribution Date or the Date of Issuance in the case of the first Quarterly
Distribution Date (after giving effect to all payments of principal made on the
preceding Quarterly Distribution Date), subject to certain limitations contained
in the Indenture. Interest on this Note shall accrue from and including the
preceding Quarterly Distribution Date (or, in the case of the first Interest
Accrual Period, the Date of Issuance) to but excluding the following Quarterly
Distribution Date (each an "Interest Accrual Period"). Interest shall be
calculated on the basis of the actual number of days elapsed in each Interest
Accrual Period divided by 360 and rounding the resultant figure to the fifth
decimal point. Such principal of and interest on this Note shall be paid in the
manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Trustee whose name appears below by manual signature, this Note shall not be
entitled to any benefit under the Indenture referred to on the reverse hereof,
or be valid or obligatory for any purpose.
B-3-2
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed, manually or in facsimile, as of the date set forth below.
NELNET STUDENT LOAN TRUST 2004-4
By WILMINGTON TRUST
COMPANY, not in
its individual
capacity but
solely as Delaware
Trustee under the
Trust Agreement,
By
Authorized Signatory
Date: __________ __, ____
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
ZIONS FIRST NATIONAL
BANK, not in its
individual capacity
but solely as Trustee,
By
Authorized Signatory
Date: __________ __, ____
B-3-3
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Student Loan Asset-Backed Notes, Senior Class A-3 (the "Class
A-3 Notes"), which, together with the Issuer's Student Loan Asset-Backed Notes,
Senior Class A-1, Class A-2, Class A-4 and Class A-5 (together with the Class
A-3 Notes, the "Class A Notes") and the Issuer's Student Loan Asset-Backed
Notes, Class B (the "Class B Notes" and, together with the Class A Notes, the
"Notes"), are issued under and secured by the Indenture, to which Indenture and
all indentures supplemental thereto reference is hereby made for a statement of
the respective rights and obligations thereunder of the Issuer, the Trustee and
the Registered Owners. The Notes are subject to all terms of the Indenture.
The Class A-3 Notes are and will be secured by the Trust Estate pledged
as security therefor as provided in the Indenture. The Class A Notes are senior
to the Class B Notes as and to the extent provided in the Indenture. The Class A
Notes are, except for certain Termination Payments that are not Priority
Termination Payments, issued on a parity with any Derivative Products entered
into by the Issuer with a Counterparty, pursuant to which the Issuer will, from
time to time, owe Issuer Derivative Payments, and will, from time to time, be
owed Counterparty Payments.
Principal of the Class A-3 Notes shall be payable on each Quarterly
Distribution Date in an amount equal to the Class A-3 Noteholder's Principal
Distribution Amount for such Quarterly Distribution Date. "Quarterly
Distribution Date" means the twenty-fifth (25th) day of each January, April,
July and October or, if any such date is not a Business Day, the immediately
succeeding Business Day, commencing January 25, 2005.
As described on the face hereof, the entire unpaid principal amount of
this Note shall be due and payable on the Class A-3 Maturity Date.
Notwithstanding the foregoing, the entire unpaid principal amount of the Notes
shall be due and payable on the date on which (a) an Event of Default shall have
occurred and be continuing and (b) either the Trustee or the Registered Owners
of Obligations representing not less than a majority of the Outstanding Amount
of the Highest Priority Obligations shall have declared the Notes to be
immediately due and payable in the manner provided in the Indenture.
Interest on the Class A-3 Notes shall be payable on each Quarterly
Distribution Date on the principal amount outstanding of the Class A-3 Notes
until the principal amount thereof is paid in full, at a rate per annum equal to
the Class A-3 Rate. The "Class A-3 Rate" for each Interest Accrual Period, other
than the first Interest Accrual Period, shall be equal to the applicable
Three-Month LIBOR, plus 0.09%. The "Class A-3 Rate" for the first Interest
Accrual Period shall be determined by reference to the following formula: x +
[27/33 * (y-x)] (where: x = Three-Month LIBOR, and y = Four-Month LIBOR), plus
0.09%, as determined by the Administrator.
Payments of interest on this Note on each Quarterly Distribution Date,
together with the installment of principal, if any, to the extent not in full
payment of this Note, shall be paid to the Person in whose name such Note is
registered on the Record Date by check mailed first-class, postage prepaid to
such Person's address as it appears on the records of the Trustee on such Record
Date, except that, unless definitive Notes have been issued pursuant to the
Indenture, with respect to Notes registered on the Record Date in the name of
the nominee of the Clearing Agency (initially, such nominee to be Cede & Co.),
payment shall be made by wire transfer in immediately available funds to the
account designated by such nominee. If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Quarterly Distribution Date, then the Trustee
B-3-4
shall notify the Person in whose name a Note is registered at the close of
business on the Record Date preceding the Quarterly Distribution Date on which
the Issuer expects that the final installment of principal of and interest on
such Note will be paid. Such notice shall be mailed or transmitted by facsimile
prior to such final Quarterly Distribution Date and shall specify that such
final installment will be payable only upon presentation and surrender of such
Note and shall specify the place where such Note may be presented and
surrendered for payment of such installment.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered upon the records of
the Trustee upon surrender for transfer of any Note at the Principal Office of
the Trustee, duly endorsed for transfer or accompanied by an assignment duly
executed by the Registered Owner or his attorney duly authorized in writing, and
thereupon the Issuer shall execute and the Trustee shall authenticate and
deliver in the name of the transferee or transferees a new fully registered Note
or Notes of the same interest rate and for a like class and aggregate principal
amount of the same maturity.
As to any Note, the person in whose name the same shall be registered
shall be deemed and regarded as the absolute owner thereof for all purposes, and
payment of either principal or interest on any fully registered Note shall be
made only to or upon the written order of the Registered Owner thereof or his
legal representative but such registration may be changed as provided in the
Indenture. All such payments shall be valid and effectual to satisfy and
discharge the liability upon such Note to the extent of the sum or sums paid.
Each Registered Owner and each transferee of a Note shall be deemed to
represent and warrant that either (a) it is not acquiring the Note directly or
indirectly for, or on behalf of, an ERISA plan or any entity whose underlying
assets are deemed to be plan assets of such ERISA plan; or (b)(i) the
acquisition and holding of the Notes will not result in a nonexempt prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code or similar
law and (ii) if the Notes are subsequently deemed to be "plan assets" pursuant
to the regulations set forth at 29 C.F.R. ss. 2510.3-101, it will promptly
dispose of the Notes.
The Trustee shall require the payment by any Registered Owner
requesting exchange or transfer of any tax or other governmental charge required
to be paid with respect to such exchange or transfer. The applicant for any such
transfer or exchange may be required to pay all taxes and governmental charges
in connection with such transfer or exchange, other than exchanges pursuant to
the Indenture.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
B-3-5
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Trustee and the Registered
Owners under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note shall be construed in accordance with the laws of the State
of New York, without reference to its conflict of law provisions, and the
obligations, rights and remedies of the parties hereunder and thereunder shall
be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place and rate, and in the coin or currency, herein prescribed.
B-3-6
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints
attorney, to transfer said Note on the books kept for registration thereof, with
full power of substitution in the premises.
Dated:
By *
Name
Title
Signature Guaranteed:
By * *NOTICE: Signature(s) should be guaranteed by a
guarantor institution participating in the Securities
Transfer Agents Medallion Program or in such other
guarantee program acceptable to the Trustee. The
Assignor's signature to this assignment must correspond
with the name as it appears upon the face of the within
note in every particular without alteration or any
change whatever.
B-3-7
EXHIBIT B-4
FORM OF CLASS A-4 NOTE
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer (as
defined below) or its agent for registration of transfer, exchange or payment,
and any Note issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE AS SET FORTH HEREIN. ACCORDINGLY,
THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE
AMOUNT SHOWN ON THE FACE HEREOF. THIS NOTE IS NOT GUARANTEED OR INSURED BY ANY
GOVERNMENTAL AGENCY.
Date of Issuance Maturity Date CUSIP No. ISIN No.
September 29, 2004 April 26, 2021 64031Q BJ 9 US64031QBJ94
PRINCIPAL SUM: **DOLLARS**
REGISTERED OWNER: **CEDE & CO.**
Nelnet Student Loan Trust 2004-4, a statutory trust organized and
existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, on each Quarterly Distribution Date the principal sum equal
to the Class A-4 Noteholder's Principal Distribution Amount for such Quarterly
Distribution Date, as described in the Indenture of Trust, dated as of September
1, 2004, between the Issuer (by Wilmington Trust Company, in its capacity as
Delaware Trustee) and Zions First National Bank, a national banking association,
as eligible lender trustee and indenture trustee (the "Trustee") (capitalized
terms used but not defined herein being defined in Article I of the Indenture,
which also contains rules as to usage that shall be applicable herein);
provided, however, that the entire unpaid principal amount of this Note shall be
due and payable on the Maturity Date specified above (the "Class A-4 Maturity
Date").
The Issuer shall pay interest on this Note at the rate per annum equal
to the Class A-4 Rate (as defined herein), on each Quarterly Distribution Date
until the principal of this Note is paid or made available for payment, on the
principal amount of this Note outstanding on the preceding Quarterly
Distribution Date or the Date of Issuance in the case of the first Quarterly
Distribution Date (after giving effect to all payments of principal made on the
preceding Quarterly Distribution Date), subject to certain limitations contained
in the Indenture. Interest on this Note shall accrue from and including the
preceding Quarterly Distribution Date (or, in the case of the first Interest
Accrual Period, the Date of Issuance) to but excluding the following Quarterly
Distribution Date (each an "Interest Accrual Period"). Interest shall be
calculated on the basis of the actual number of days elapsed in each Interest
Accrual Period divided by 360 and rounding the resultant figure to the fifth
decimal point. Such principal of and interest on this Note shall be paid in the
manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Trustee whose name appears below by manual signature, this Note shall not be
entitled to any benefit under the Indenture referred to on the reverse hereof,
or be valid or obligatory for any purpose.
B-4-2
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed, manually or in facsimile, as of the date set forth below.
NELNET STUDENT LOAN TRUST 2004-4
By WILMINGTON TRUST
COMPANY, not in
its individual
capacity but
solely as Delaware
Trustee under the
Trust Agreement,
By
Authorized Signatory
Date: __________ __, ____
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
ZIONS FIRST NATIONAL
BANK, not in its
individual capacity
but solely as Trustee,
By
Authorized Signatory
Date: __________ __, ____
B-4-3
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Student Loan Asset-Backed Notes, Senior Class A-4 (the "Class
A-4 Notes"), which, together with the Issuer's Student Loan Asset-Backed Notes,
Senior Class A-1, Class A-2, Class A-3 and Class A-5 (together with the Class
A-4 Notes, the "Class A Notes") and the Issuer's Student Loan Asset-Backed
Notes, Subordinate Class B (the "Class B Notes" and, together with the Class A
Notes, the "Notes"), are issued under and secured by the Indenture, to which
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights and obligations thereunder of the Issuer, the
Trustee and the Registered Owners. The Notes are subject to all terms of the
Indenture.
The Class A-4 Notes are and will be secured by the Trust Estate pledged
as security therefor as provided in the Indenture. The Class A Notes (the "Class
A Notes") are senior to the Class B Notes as and to the extent provided in the
Indenture. The Class A Notes are, except for certain Termination Payments that
are not Priority Termination Payments, issued on a parity with any Derivative
Products entered into by the Issuer with a Counterparty, pursuant to which the
Issuer will, from time to time, owe Issuer Derivative Payments, and will, from
time to time, be owed Counterparty Payments.
Principal of the Class A-4 Notes shall be payable on each Quarterly
Distribution Date in an amount equal to the Class A-4 Noteholder's Principal
Distribution Amount for such Quarterly Distribution Date. "Quarterly
Distribution Date" means the twenty-fifth (25th) day of each January, April,
July and October or, if any such date is not a Business Day, the immediately
succeeding Business Day, commencing January 25, 2005.
As described on the face hereof, the entire unpaid principal amount of
this Note shall be due and payable on the Class A-4 Maturity Date.
Notwithstanding the foregoing, the entire unpaid principal amount of the Notes
shall be due and payable on the date on which (a) an Event of Default shall have
occurred and be continuing and (b) either the Trustee or the Registered Owners
of Obligations representing not less than a majority of the Outstanding Amount
of the Highest Priority Obligations shall have declared the Notes to be
immediately due and payable in the manner provided in the Indenture.
Interest on the Class A-4 Notes shall be payable on each Quarterly
Distribution Date on the principal amount outstanding of the Class A-4 Notes
until the principal amount thereof is paid in full, at a rate per annum equal to
the Class A-4 Rate. The "Class A-4 Rate" for each Interest Accrual Period, other
than the first Interest Accrual Period, shall be equal to the applicable
Three-Month LIBOR, plus 0.13%. The "Class A-4 Rate" for the first Interest
Accrual Period shall be determined by reference to the following formula: x +
[27/33 * (y-x)] (where: x = Three-Month LIBOR, and y = Four-Month LIBOR), plus
0.13%, as determined by the Administrator.
Payments of interest on this Note on each Quarterly Distribution Date,
together with the installment of principal, if any, to the extent not in full
payment of this Note, shall be paid to the Person in whose name such Note is
registered on the Record Date by check mailed first-class, postage prepaid to
such Person's address as it appears on the records of the Trustee on such Record
Date, except that, unless definitive Notes have been issued pursuant to the
Indenture, with respect to Notes registered on the Record Date in the name of
the nominee of the Clearing Agency (initially, such nominee to be Cede & Co.),
payment shall be made by wire transfer in immediately available funds to the
account designated by such nominee. If funds are expected to be available, as
B-4-4
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Quarterly Distribution Date, then the Trustee
shall notify the Person in whose name a Note is registered at the close of
business on the Record Date preceding the Quarterly Distribution Date on which
the Issuer expects that the final installment of principal of and interest on
such Note will be paid. Such notice shall be mailed or transmitted by facsimile
prior to such final Quarterly Distribution Date and shall specify that such
final installment will be payable only upon presentation and surrender of such
Note and shall specify the place where such Note may be presented and
surrendered for payment of such installment.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered upon the records of
the Trustee upon surrender for transfer of any Note at the Principal Office of
the Trustee, duly endorsed for transfer or accompanied by an assignment duly
executed by the Registered Owner or his attorney duly authorized in writing, and
thereupon the Issuer shall execute and the Trustee shall authenticate and
deliver in the name of the transferee or transferees a new fully registered Note
or Notes of the same interest rate and for a like class and aggregate principal
amount of the same maturity.
As to any Note, the person in whose name the same shall be registered
shall be deemed and regarded as the absolute owner thereof for all purposes, and
payment of either principal or interest on any fully registered Note shall be
made only to or upon the written order of the Registered Owner thereof or his
legal representative but such registration may be changed as provided in the
Indenture. All such payments shall be valid and effectual to satisfy and
discharge the liability upon such Note to the extent of the sum or sums paid.
Each Registered Owner and each transferee of a Note shall be deemed to
represent and warrant that either (a) it is not acquiring the Note directly or
indirectly for, or on behalf of, an ERISA plan or any entity whose underlying
assets are deemed to be plan assets of such ERISA plan; or (b)(i) the
acquisition and holding of the Notes will not result in a nonexempt prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code or similar
law and (ii) if the Notes are subsequently deemed to be "plan assets" pursuant
to the regulations set forth at 29 C.F.R. ss. 2510.3-101, it will promptly
dispose of the Notes.
The Trustee shall require the payment by any Registered Owner
requesting exchange or transfer of any tax or other governmental charge required
to be paid with respect to such exchange or transfer. The applicant for any such
transfer or exchange may be required to pay all taxes and governmental charges
in connection with such transfer or exchange, other than exchanges pursuant to
the Indenture.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
B-4-5
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Trustee and the Registered
Owners under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note shall be construed in accordance with the laws of the State
of New York, without reference to its conflict of law provisions, and the
obligations, rights and remedies of the parties hereunder and thereunder shall
be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place and rate, and in the coin or currency, herein prescribed.
B-4-6
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints
attorney, to transfer said Note on the books kept for registration thereof, with
full power of substitution in the premises.
Dated:
By *
Name
Title
Signature Guaranteed:
By * *NOTICE: Signature(s) should be guaranteed
by a guarantor institution participating in the
Securities Transfer Agents Medallion Program or
in such other guarantee program acceptable to
the Trustee. The Assignor's signature to this
assignment must correspond with the name as it
appears upon the face of the within note in
every particular without alteration or any
change whatever.
B-4-7
EXHIBIT B-5
FORM OF CLASS A-5 NOTE
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer (as
defined below) or its agent for registration of transfer, exchange or payment,
and any Note issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE AS SET FORTH HEREIN. ACCORDINGLY,
THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE
AMOUNT SHOWN ON THE FACE HEREOF. THIS NOTE IS NOT GUARANTEED OR INSURED BY ANY
GOVERNMENTAL AGENCY.
Date of Issuance Maturity Date CUSIP No. ISIN No.
September 29, 2004 January 26, 2037 64031Q BK 6 US64031QBK67
PRINCIPAL SUM: **DOLLARS**
REGISTERED OWNER: **CEDE & CO.**
Nelnet Student Loan Trust 2004-4, a statutory trust organized and
existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, on each Quarterly Distribution Date the principal sum equal
to the Class A-5 Noteholder's Principal Distribution Amount for such Quarterly
Distribution Date, as described in the Indenture of Trust, dated as of September
1, 2004, between the Issuer (by Wilmington Trust Company, in its capacity as
Delaware Trustee) and Zions First National Bank, a national banking association,
as eligible lender trustee and indenture trustee (the "Trustee") (capitalized
terms used but not defined herein being defined in Article I of the Indenture,
which also contains rules as to usage that shall be applicable herein);
provided, however, that the entire unpaid principal amount of this Note shall be
due and payable on the Maturity Date specified above (the "Class A-5 Maturity
Date").
The Issuer shall pay interest on this Note at the rate per annum equal
to the Class A-5 Rate (as defined herein), on each Quarterly Distribution Date
until the principal of this Note is paid or made available for payment, on the
principal amount of this Note outstanding on the preceding Quarterly
Distribution Date or the Date of Issuance in the case of the first Quarterly
Distribution Date (after giving effect to all payments of principal made on the
preceding Quarterly Distribution Date), subject to certain limitations contained
in the Indenture. Interest on this Note shall accrue from and including the
preceding Quarterly Distribution Date (or, in the case of the first Interest
Accrual Period, the Date of Issuance) to but excluding the following Quarterly
Distribution Date (each an "Interest Accrual Period"). Interest shall be
calculated on the basis of the actual number of days elapsed in each Interest
Accrual Period divided by 360 and rounding the resultant figure to the fifth
decimal point. Such principal of and interest on this Note shall be paid in the
manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Trustee whose name appears below by manual signature, this Note shall not be
entitled to any benefit under the Indenture referred to on the reverse hereof,
or be valid or obligatory for any purpose.
B-5-2
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed, manually or in facsimile, as of the date set forth below.
NELNET STUDENT LOAN TRUST 2004-4
By WILMINGTON TRUST
COMPANY, not in
its individual
capacity but
solely as Delaware
Trustee under the
Trust Agreement
By
Authorized Signatory
Date: __________ __, ____
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
ZIONS FIRST NATIONAL
BANK, not in its
individual capacity
but solely as Trustee,
By
Authorized Signatory
Date: __________ __, ____
B-5-3
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Student Loan Asset-Backed Notes, Class A-5 (the "Class A-5
Notes"), which, together with the Issuer's Student Loan Asset-Backed Notes,
Class A-1, Class A-2, Class A-3 and Class A-4 (together with the Class A-5
Notes, the "Class A Notes") and the Issuer's Student Loan Asset-Backed Notes,
Class B (the "Class B Notes" and, together with the Class A Notes, the "Notes"),
are issued under and secured by the Indenture, to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights and obligations thereunder of the Issuer, the Trustee and the
Registered Owners. The Notes are subject to all terms of the Indenture.
The Class A-5 Notes are and will be secured by the Trust Estate pledged
as security therefor as provided in the Indenture. The Class A Notes (the "Class
A Notes") are senior to the Class B Notes as and to the extent provided in the
Indenture. The Class A Notes are, except for certain Termination Payments that
are not Priority Termination Payments, issued on a parity with any Derivative
Products entered into by the Issuer with a Counterparty, pursuant to which the
Issuer will, from time to time, owe Issuer Derivative Payments, and will, from
time to time, be owed Counterparty Payments.
Principal of the Class A-5 Notes shall be payable on each Quarterly
Distribution Date in an amount equal to the Class A-5 Noteholder's Principal
Distribution Amount for such Quarterly Distribution Date. "Quarterly
Distribution Date" means the twenty-fifth (25th) day of each January, April,
July and October or, if any such date is not a Business Day, the immediately
succeeding Business Day, commencing January 25, 2005.
As described on the face hereof, the entire unpaid principal amount of
this Note shall be due and payable on the Class A-5 Maturity Date.
Notwithstanding the foregoing, the entire unpaid principal amount of the Notes
shall be due and payable on the date on which (a) an Event of Default shall have
occurred and be continuing and (b) either the Trustee or the Registered Owners
of Obligations representing not less than a majority of the Outstanding Amount
of the Highest Priority Obligations shall have declared the Notes to be
immediately due and payable in the manner provided in the Indenture.
Interest on the Class A-5 Notes shall be payable on each Quarterly
Distribution Date on the principal amount outstanding of the Class A-5 Notes
until the principal amount thereof is paid in full, at a rate per annum equal to
the Class A-5 Rate. The "Class A-5 Rate" for each Interest Accrual Period, other
than the first Interest Accrual Period, shall be equal to the applicable
Three-Month LIBOR, plus 0.16%. The "Class A-5 Rate" for the first Interest
Accrual Period shall be determined by reference to the following formula: x +
[27/33 * (y-x)] (where: x = Three-Month LIBOR, and y = Four-Month LIBOR), plus
0.16%, as determined by the Administrator.
Payments of interest on this Note on each Quarterly Distribution Date,
together with the installment of principal, if any, to the extent not in full
payment of this Note, shall be paid to the Person in whose name such Note is
registered on the Record Date by check mailed first-class, postage prepaid to
such Person's address as it appears on the records of the Trustee on such Record
Date, except that, unless definitive Notes have been issued pursuant to the
Indenture, with respect to Notes registered on the Record Date in the name of
the nominee of the Clearing Agency (initially, such nominee to be Cede & Co.),
payment shall be made by wire transfer in immediately available funds to the
B-5-4
account designated by such nominee. If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Quarterly Distribution Date, then the Trustee
shall notify the Person in whose name a Note is registered at the close of
business on the Record Date preceding the Quarterly Distribution Date on which
the Issuer expects that the final installment of principal of and interest on
such Note will be paid. Such notice shall be mailed or transmitted by facsimile
prior to such final Quarterly Distribution Date and shall specify that such
final installment will be payable only upon presentation and surrender of such
Note and shall specify the place where such Note may be presented and
surrendered for payment of such installment.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered upon the records of
the Trustee upon surrender for transfer of any Note at the Principal Office of
the Trustee, duly endorsed for transfer or accompanied by an assignment duly
executed by the Registered Owner or his attorney duly authorized in writing, and
thereupon the Issuer shall execute and the Trustee shall authenticate and
deliver in the name of the transferee or transferees a new fully registered Note
or Notes of the same interest rate and for a like class and aggregate principal
amount of the same maturity.
As to any Note, the person in whose name the same shall be registered
shall be deemed and regarded as the absolute owner thereof for all purposes, and
payment of either principal or interest on any fully registered Note shall be
made only to or upon the written order of the Registered Owner thereof or his
legal representative but such registration may be changed as provided in the
Indenture. All such payments shall be valid and effectual to satisfy and
discharge the liability upon such Note to the extent of the sum or sums paid.
Each Registered Owner and each transferee of a Note shall be deemed to
represent and warrant that either (a) it is not acquiring the Note directly or
indirectly for, or on behalf of, an ERISA plan or any entity whose underlying
assets are deemed to be plan assets of such ERISA plan; or (b)(i) the
acquisition and holding of the Notes will not result in a nonexempt prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code or similar
law and (ii) if the Notes are subsequently deemed to be "plan assets" pursuant
to the regulations set forth at 29 C.F.R. ss. 2510.3-101, it will promptly
dispose of the Notes.
The Trustee shall require the payment by any Registered Owner
requesting exchange or transfer of any tax or other governmental charge required
to be paid with respect to such exchange or transfer. The applicant for any such
transfer or exchange may be required to pay all taxes and governmental charges
in connection with such transfer or exchange, other than exchanges pursuant to
the Indenture.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
B-5-5
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Trustee and the Registered
Owners under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note shall be construed in accordance with the laws of the State
of New York, without reference to its conflict of law provisions, and the
obligations, rights and remedies of the parties hereunder and thereunder shall
be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place and rate, and in the coin or currency, herein prescribed.
B-5-6
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints
attorney, to transfer said Note on the books kept for registration thereof, with
full power of substitution in the premises.
Dated:
By *
Name
Title
Signature Guaranteed:
By * *NOTICE: Signature(s) should be guaranteed
by a guarantor institution participating in the
Securities Transfer Agents Medallion Program or
in such other guarantee program acceptable to
the Trustee. The Assignor's signature to this
assignment must correspond with the name as it
appears upon the face of the within note in
every particular without alteration or any
change whatever.
B-5-7
EXHIBIT B-6
FORM OF CLASS B NOTE
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer (as
defined below) or its agent for registration of transfer, exchange or payment,
and any Note issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE AS SET FORTH HEREIN. ACCORDINGLY,
THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE
AMOUNT SHOWN ON THE FACE HEREOF. THIS NOTE IS NOT GUARANTEED OR INSURED BY ANY
GOVERNMENTAL AGENCY.
NELNET STUDENT LOAN TRUST 2004-4
STUDENT LOAN ASSET-BACKED NOTES
SUBORDINATE CLASS B (LIBOR)
REGISTERED NO. R-__ REGISTERED $__________
Date of Issuance Maturity Date CUSIP No. ISIN No.
September 29, 2004 January 25, 2041 64031Q BL 4 US64031QBL41
PRINCIPAL SUM: **DOLLARS**
REGISTERED OWNER: **CEDE & CO.**
Nelnet Student Loan Trust 2004-4, a statutory trust organized and
existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, on each Quarterly Distribution Date the principal sum equal
to the applicable Class B Noteholder's Principal Distribution Amount for such
Quarterly Distribution Date, as described in the Indenture of Trust, dated as of
September 1, 2004, between the Issuer (by Wilmington Trust Company, in its
capacity as Delaware Trustee) and Zions First National Bank, a national banking
association, as eligible lender trustee and indenture trustee (the "Trustee")
(capitalized terms used but not defined herein being defined in Article I of the
Indenture, which also contains rules as to usage that shall be applicable
herein); provided, however, that the entire unpaid principal amount of this Note
shall be due and payable on the Maturity Date specified above (the "Class B
Maturity Date").
The Issuer shall pay interest on this Note at the rate per annum equal
to the Class B Rate (as defined on the reverse hereof), on each Quarterly
Distribution Date until the principal of this Note is paid or made available for
payment, on the principal amount of this Note outstanding on the preceding
Quarterly Distribution Date or the Date of Issuance in the case of the first
Quarterly Distribution Date (after giving effect to all payments of principal
made on the preceding Quarterly Distribution Date), subject to certain
limitations contained in the Indenture. Interest on this Note shall accrue from
and including the preceding Quarterly Distribution Date (or, in the case of the
first Interest Accrual Period, the Date of Issuance) to but excluding the
following Quarterly Distribution Date (each an "Interest Accrual Period").
Interest shall be calculated on the basis of the actual number of days elapsed
in each Interest Accrual Period divided by 360 and rounding the resultant figure
to the fifth decimal point. Such principal of and interest on this Note shall be
paid in the manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Trustee whose name appears below by manual signature, this Note shall not be
entitled to any benefit under the Indenture referred to on the reverse hereof,
or be valid or obligatory for any purpose.
B-6-2
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed, manually or in facsimile, as of the date set forth below.
NELNET STUDENT LOAN TRUST 2004-4
By WILMINGTON TRUST
COMPANY, not in its individual
capacity but solely as Delaware
Trustee under the Trust Agreement,
By
Authorized Signatory
Date: __________ __, ____
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
ZIONS FIRST NATIONAL
BANK, not in its
individual capacity
but solely as Trustee,
By
Authorized Signatory
Date: __________ __, ____
B-6-3
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Student Loan Asset-Backed Notes, Subordinate Class B (the
"Class B Notes"), which, together with the Issuer's Student Loan Asset-Backed
Notes, Senior Class A-1, Class A-2, Class A-3, Class A-4 and Class A-5
(collectively, the "Class A Notes" and, together with the Class B Notes, the
"Notes"), are issued under and secured by the Indenture, to which Indenture and
all indentures supplemental thereto reference is hereby made for a statement of
the respective rights and obligations thereunder of the Issuer, the Trustee and
the Registered Owners. The Notes are subject to all terms of the Indenture.
The Class B Notes are and will be secured by the Trust Estate pledged
as security therefor as provided in the Indenture. The Class A Notes are senior
to the Class B Notes as and to the extent provided in the Indenture. The Class A
Notes are, except for certain Termination Payments that are not Priority
Termination Payments, issued on a parity with any Derivative Products entered
into by the Issuer with a Counterparty, pursuant to which the Issuer will, from
time to time, owe Issuer Derivative Payments, and will, from time to time, be
owed Counterparty Payments.
Principal of the Class B Notes shall be payable on each Quarterly
Distribution Date in an amount equal to the Class B Noteholder's Principal
Distribution Amount for such Quarterly Distribution Date. "Quarterly
Distribution Date" means the twenty-fifth (25th) day of each January, April,
July and October or, if any such date is not a Business Day, the immediately
succeeding Business Day, commencing January 25, 2005.
As described on the face hereof, the entire unpaid principal amount of
this Note shall be due and payable on the Class B Maturity Date. Notwithstanding
the foregoing, the entire unpaid principal amount of the Notes shall be due and
payable on the date on which (a) an Event of Default shall have occurred and be
continuing and (b) either the Trustee or the Registered Owners of Obligations
representing not less than a majority of the Outstanding Amount of the Highest
Priority Obligations shall have declared the Notes to be immediately due and
payable in the manner provided in the Indenture.
Interest on the Class B Notes shall be payable on each Quarterly
Distribution Date on the principal amount outstanding of the Class B Notes until
the principal amount thereof is paid in full, at a rate per annum equal to the
Class B Rate. The "Class B Rate" for each Interest Accrual Period, other than
the first Interest Accrual Period, shall be equal to the applicable Three-Month
LIBOR, plus 0.30%. The "Class B Rate" for the first Interest Accrual Period
shall be determined by reference to the following formula: x + [27/33 * (y-x)]
(where: x = Three-Month LIBOR, and y = Four-Month LIBOR), plus 0.30%, as
determined by the Administrator.
Payments of interest on this Note on each Quarterly Distribution Date,
together with the installment of principal, if any, to the extent not in full
payment of this Note, shall be paid to the Person in whose name such Note is
registered on the Record Date by check mailed first-class, postage prepaid to
such Person's address as it appears on the records of the Trustee on such Record
Date, except that, unless definitive Notes have been issued pursuant to the
Indenture, with respect to Notes registered on the Record Date in the name of
the nominee of the Clearing Agency (initially, such nominee to be Cede & Co.),
payment shall be made by wire transfer in immediately available funds to the
account designated by such nominee. If funds are expected to be available, as
B-6-4
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Quarterly Distribution Date, then the Trustee
shall notify the Person in whose name a Note is registered at the close of
business on the Record Date preceding the Quarterly Distribution Date on which
the Issuer expects that the final installment of principal of and interest on
such Note will be paid. Such notice shall be mailed or transmitted by facsimile
prior to such final Quarterly Distribution Date and shall specify that such
final installment will be payable only upon presentation and surrender of such
Note and shall specify the place where such Note may be presented and
surrendered for payment of such installment.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered upon the records of
the Trustee upon surrender for transfer of any Note at the Principal Office of
the Trustee, duly endorsed for transfer or accompanied by an assignment duly
executed by the Registered Owner or his attorney duly authorized in writing, and
thereupon the Issuer shall execute and the Trustee shall authenticate and
deliver in the name of the transferee or transferees a new fully registered Note
or Notes of the same interest rate and for a like class and aggregate principal
amount of the same maturity.
As to any Note, the person in whose name the same shall be registered
shall be deemed and regarded as the absolute owner thereof for all purposes, and
payment of either principal or interest on any fully registered Note shall be
made only to or upon the written order of the Registered Owner thereof or his
legal representative but such registration may be changed as provided in the
Indenture. All such payments shall be valid and effectual to satisfy and
discharge the liability upon such Note to the extent of the sum or sums paid.
Each Registered Owner and each transferee of a Note shall be deemed to
represent and warrant that either (a) it is not acquiring the Note directly or
indirectly for, or on behalf of, an ERISA plan or any entity whose underlying
assets are deemed to be plan assets of such ERISA plan; or (b)(i) the
acquisition and holding of the Notes will not result in a nonexempt prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code or similar
law and (ii) if the Notes are subsequently deemed to be "plan assets" pursuant
to the regulations set forth at 29 C.F.R. ss. 2510.3-101, it will promptly
dispose of the Notes.
The Trustee shall require the payment by any Registered Owner
requesting exchange or transfer of any tax or other governmental charge required
to be paid with respect to such exchange or transfer. The applicant for any such
transfer or exchange may be required to pay all taxes and governmental charges
in connection with such transfer or exchange, other than exchanges pursuant to
the Indenture.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
B-6-5
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Trustee and the Registered
Owners under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note shall be construed in accordance with the laws of the State
of New York, without reference to its conflict of law provisions, and the
obligations, rights and remedies of the parties hereunder and thereunder shall
be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place and rate, and in the coin or currency, herein prescribed.
B-6-6
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints
attorney, to transfer said Note on the books kept for registration thereof, with
full power of substitution in the premises.
Dated:
By *
Name
Title
Signature Guaranteed:
By * *NOTICE: Signature(s) should be guaranteed
by a guarantor institution participating in the
Securities Transfer Agents Medallion Program or
in such other guarantee program acceptable to
the Trustee. The Assignor's signature to this
assignment must correspond with the name as it
appears upon the face of the within note in
every particular without alteration or any
change whatever.
B-6-7
EXHIBIT C
FORM OF ADMINISTRATOR'S MONTHLY
SERVICING PAYMENT DATE CERTIFICATE
This Administrator's Monthly Servicing Payment Date Certificate (the
"Certificate") is being provided by National Education Loan Network, Inc., as
Administrator (the "Administrator") to Nelnet Student Loan Trust 2004-4 (the
"Issuer") pursuant to Section 5.04(b) of the Indenture of Trust, dated as of
September 1, 2004 (the "Indenture"), between the Issuer and Zions First National
Bank (the "Trustee"). All capitalized terms used in this Certificate and not
otherwise defined shall have the same meanings as assigned to such terms in the
Indenture.
Pursuant to this Certificate, the Administrator hereby directs the
Trustee to distribute to the Master Servicer, by 3:00 p.m. (New York time) on
__________, __________ (the "Monthly Servicing Payment Date"), from and to the
extent of the Available Funds on deposit in the Collection Fund, $__________
Servicing Fee due with respect to the preceding calendar month.
The Available Funds on this Monthly Servicing Payment Date is equal to
$__________.
The Administrator hereby certifies that the information herein is true
and accurate in all material respects, is in compliance with the provisions of
the Indenture and that the Trustee may conclusively rely on this Certificate
with no further duty to examine or determine the information contained herein.
IN WITNESS WHEREOF, the Administrator has caused this Certificate to be
duly executed and delivered as of the date written below.
NATIONAL EDUCATION LOAN NETWORK, INC., as Administrator
By
Authorized Signatory
[DATE]
EXHIBIT D
FORM OF ADMINISTRATOR'S Quarterly DISTRIBUTION DATE CERTIFICATE
This Administrator's Quarterly Distribution Date Certificate (the
"Certificate") is being provided by National Education Loan Network, Inc., as
Administrator (the "Administrator") to Nelnet Student Loan Trust 2004-4 (the
"Issuer") pursuant to Section 5.04(c) of the Indenture of Trust, dated as of
September 1, 2004 (the "Indenture"), between the Issuer and Zions First National
Bank, as eligible lender trustee and as trustee (the "Trustee"). All capitalized
terms used in this Certificate and not otherwise defined shall have the same
meanings as assigned to such terms in the Indenture.
Pursuant to this Certificate, the Administrator hereby directs the
Trustee to make the following deposits and distributions to the Persons or to
the account specified below by 3:00 p.m. (New York time) on __________ __, _____
(the "Quarterly Distribution Date"), to the extent of (x) the amount of
Available Funds in the Collection Fund, (y) the amount transferred from the
Capitalized Interest Fund pursuant to Section 5.03 of the Indenture and (z) the
amount transferred from the Reserve Fund pursuant to Section 5.05(b), (c) and
(d) of the Indenture. The Trustee shall make the following deposits and
distributions in the following order of priority, and the Trustee shall comply
with such instructions:
D-1
(i) (a) The Servicing Fee to the Master Servicer, $
-------------
(b) The Trustee Fee to the Trustee, and $
-------------
(c) The Delaware Trustee Fee to the Delaware Trustee, $
-------------
payments described in (a) through (e) above to be made ratably, without
preference or priority of any kind, due on the Quarterly Distribution
Date in each case with such fees remaining unpaid from prior Quarterly
Distribution Dates (or as applicable from prior Monthly Service Payment
Dates);
(ii) (a) The Administration Fee to the Administrator $
-------------
(b) Any unpaid Administration Fees, if any, from prior Distribution
Dates to the $ Administrator due on the Distribution Date; -
(iii) (a) The Interest Distribution Amount to the Class A-1 Noteholders, $
-------------
The Interest Distribution Amount to the Class A-2 Noteholders, $
-------------
The Interest Distribution Amount to the Class A-3 Noteholders, $
-------------
The Interest Distribution Amount to the Class A-4 Noteholders, and $
-------------
The Interest Distribution Amount to the Class A-5 Noteholders, and $
-------------
(b) Issuer Derivative Payments (excluding Termination Payments other
than Priority $ Termination Payments) to the Counterparties, pro
rata, without preference or - priority of any kind, according to
the amounts payable to each such party;
(iv) The Interest Distribution Amount to the Class B Noteholders; $
-------------
(v) An amount equal to the unpaid interest accrued on the Financed Student
Loans subsequent to the Cutoff Date but prior to the Date of $
Issuance, until such amount has been paid in full, to the Sponsor; -------------
(vi) The Class A Principal Distribution Amount to the Class A-1 Noteholders $
(until paid in full); -------------
(vii) The Class A Principal Distribution Amount to the Class A-2 $
Noteholders (until paid in full); -------------
(viii) The Class A Principal Distribution Amount to the Class A-3 Noteholders $
(until paid in full); -------------
(ix) The Class A Principal Distribution Amount to the Class A-4 Noteholders $
(until paid in full); -------------
D-2
(x) The Class A Principal Distribution Amount to the Class A-5 Noteholders $
(until paid in full); -------------
(xi) On and after the Stepdown Date (no Trigger Event is in effect), the
Class B Principal Distribution Amount to the Class B Noteholders $
(until paid in full); -------------
(xii) Amounts to be deposited to the Reserve Fund necessary to reinstate the $
balance of the $ Reserve Fund up to the Specified Reserve Fund Balance; -------------
(xiii) Amounts due to the Master Servicer representing the aggregate unpaid $
amount of the Carryover Servicing Fee; -------------
(xiv) Amounts due to the Counterparties, pro rata, without preference or
priority (representing any accrued and unpaid Termination Payments $
due under any Derivative Product Payments); -------------
(xv) If the Financed Eligible Loans have not been sold pursuant to Section
10.03 or 10.04 of the Indenture, amounts payable to the Noteholders
of the Notes constituting Class A Notes to pay as an accelerated
payment of principal balance on the Notes constituting Class A Notes
then Outstanding until the principal amount of the Notes constituting
Class A Notes is paid in full; and $
(xvi) remaining amounts to the Sponsor. -------------
Total Distributions $
-------------
The Available Funds on this Quarterly Distribution Date
(Collection Acct. and Reserve Fund Excess) $
-------------
Pursuant to this Certificate, if applicable, the Administrator further
hereby directs the Trustee to withdraw from (a) the Capitalized Interest Fund
for deposit to the Collection Fund (i) an amount equal to $__________,
representing the amount of insufficient Available Funds in the Collection
Account to make the transfers required by Sections 5.04(b) and 5.04(c)(i)
through 5.04(c)(iv) and (viii) of the Indenture and (ii) an amount equal to
$__________, representing the remaining amount on deposit in the Capitalized
Interest Fund on the October 2005 Quarterly Distribution Date and (b) the
Reserve Fund for deposit to the Collection Fund (i) an amount equal to
$__________, representing the amount of insufficient Available Funds in the
Collection Account to make the transfers required by Sections 5.04(b) and
5.04(c)(i) through 5.04(c)(iv) and (viii) of the Indenture, and (ii) an amount
equal to $__________, representing the amount on deposit in the Reserve Fund in
excess of the Specified Reserve Fund Balance.
The Administrator hereby certifies that the information herein is true
and accurate in all material respects, is in compliance with the provisions of
the Indenture and that the Trustee may conclusively rely on this Certificate
with no further duty to examine or determine the information contained herein.
D-3
IN WITNESS WHEREOF, the Administrator has caused this Certificate to be
duly executed and delivered as of the date written below.
NATIONAL EDUCATION LOAN NETWORK, INC., as Administrator
By
Authorized Signatory
Date
D-4
EXHIBIT 4.2
NELNET STUDENT LOAN TRUST 2004-4
TRUST AGREEMENT
by and between
NELNET STUDENT LOAN FUNDING, LLC,
as Initial Certificateholder and Sponsor,
and
WILMINGTON TRUST COMPANY
as Delaware Trustee
Dated as of September 1, 2004
Table of Contents
Page
ARTICLE I
DEFINITIONS
Section 1.01. Definitions..............................................1
Section 1.02. Other References.........................................4
ARTICLE II
ORGANIZATION OF THE TRUST; AUTHORITY TO EXECUTE AND PERFORM VARIOUS DOCUMENTS;
DECLARATION OF TRUST BY DELAWARE TRUSTEE
Section 2.01. Establishment of the Trust...............................5
Section 2.02. Name.....................................................5
Section 2.03. Office and Situs of Trust................................5
Section 2.04. Authority................................................6
Section 2.05. Powers and Authority.....................................6
Section 2.06. Declaration of Trust by Delaware Trustee.................8
Section 2.07. The Indenture............................................8
Section 2.08. Title to Trust Estate....................................8
Section 2.09. Agreements Not to Institute Bankruptcy Proceedings;
Covenants..............................................8
Section 2.10. Appointment of Delaware Trustee.........................11
Section 2.11. Federal Income Tax Allocations..........................11
Section 2.12. Limitations on Certificateholders.......................11
Section 2.13. Administration..........................................11
Section 2.14. Additional Contributions................................12
Section 2.15. Principal Place of Business.............................12
Section 2.16. Liability of the Certificateholders and the Delaware
Trustee...............................................12
ARTICLE III
TRUST CERTIFICATES AND TRANSFER OF INTERESTS
Section 3.01. Initial Beneficial Ownership............................12
Section 3.02. The Certificates........................................12
Section 3.03. Authentication of Certificates..........................13
Section 3.04. Registration of Transfer and Exchange of Certificates...13
Section 3.05. Mutilated, Destroyed, Lost or Stolen Certificates.......15
Section 3.06. Persons Deemed Owners...................................16
Section 3.07. Access to List of Certificateholders' Names and
Addresses.............................................16
Section 3.08. Maintenance of Office or Agency.........................16
Section 3.09. Terms of Certificates Binding...........................16
ARTICLE IV
DISTRIBUTIONS AND PAYMENTS
Section 4.01. Distribution of Payments................................16
Section 4.02. Payments From Trust Estate Only.........................17
Section 4.03. Method of Payment.......................................18
Section 4.04. Trust Payment Date Statement............................18
ARTICLE V
DUTIES OF DELAWARE TRUSTEE
Section 5.01. Notice of Default.......................................8
Section 5.02. Action Upon Instruction.................................9
Section 5.03. Indemnification.........................................0
Section 5.04. No Duties Except as Specified in Transaction Documents..1
Section 5.05. No Action Except Under Specified Documents or
Instructions..........................................21
Section 5.06. Action by Certificateholders with Respect to Bankruptcy.21
Section 5.07. Discharge of Liens......................................21
ARTICLE VI
DELAWARE TRUSTEE
Section 6.01. Acceptance of Trusts and Duties.........................22
Section 6.02. Furnishing of Documents.................................24
Section 6.03. No Representations or Warranties as to Trust Estate.....24
Section 6.04. No Segregation of Moneys; No Interest...................24
Section 6.05. Reliance; Advice of Counsel.............................24
Section 6.06. Not Acting in Individual Capacity.......................25
Section 6.07. Books and Records.......................................25
Section 6.08. Tax Returns.............................................25
ARTICLE VII
ASSUMPTION OF LIABILITY AND PAYMENT FOR DELAWARE TRUSTEE
Section 7.01. Compensation and Expenses...............................26
Section 7.02. Indemnification.........................................26
Section 7.03. Certificateholders To Assume Liability..................27
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ARTICLE VIII
TERMINATION OF INDENTURE
Section 8.01. Termination in General..................................27
Section 8.02. Termination at Option of Certificateholders.............27
Section 8.03. Termination.............................................28
ARTICLE IX
SUCCESSOR DELAWARE TRUSTEES, CO-DELAWARE TRUSTEES AND
SEPARATE DELAWARE TRUSTEES
Section 9.01. Resignation and Successors..............................28
Section 9.02. Co-Delaware Trustees and Separate Delaware Trustees.....29
Section 9.03. Changes in Identity of a Delaware Trustee...............29
ARTICLE X
MISCELLANEOUS
Section 10.01. Amendment...............................................30
Section 10.02. No Title to Trust Estate, Etc...........................31
Section 10.03. Sale of the Trust Estate by Delaware Trustee is Binding.31
Section 10.04. Limitations on Rights of Others.........................31
Section 10.05. Notices, Etc............................................31
Section 10.06. Severability............................................32
Section 10.07. Separate Counterparts...................................32
Section 10.08. Successors and Assigns..................................32
Section 10.09. Governing Law...........................................32
Section 10.10. No Liability of Certificateholders......................32
Section 10.11. Actions by the Certificateholders.......................33
EXHIBIT A CERTIFICATEHOLDERS' CAPITAL CONTRIBUTIONS
EXHIBIT B FORM OF TRUST PAYMENT DATE STATEMENT
EXHIBIT C FORM OF CERTIFICATE
EXHIBIT D FORM OF TRANSFEROR LETTER
EXHIBIT E FORM OF INVESTMENT LETTER
EXHIBIT F FORM OF RULE 144A LETTER
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TRUST AGREEMENT
THIS TRUST AGREEMENT, dated as of September 1, 2004 (as may be amended
from time to time), by and among NELNET STUDENT LOAN FUNDING, LLC, a Delaware
limited liability company, as the Initial Certificateholder and Sponsor, and
WILMINGTON TRUST COMPANY (when referred to herein in its individual capacity,
the "Trust Company," and when referred to herein solely in its capacity as
trustee hereunder, the "Delaware Trustee"), is being entered into in order to
establish a Delaware statutory trust to be known as Nelnet Student Loan Trust
2004-4.
W I T N E S S E T H :
WHEREAS, the Sponsor and the Trust Company have mutually agreed as set
forth herein to create the Trust.
In consideration of the mutual agreements herein contained and other
good and valuable consideration, the receipt and legal sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. All capitalized terms used in this Trust
Agreement shall have the meanings set forth below and, if not defined herein,
shall have the respective meanings assigned to them in the Indenture:
"Administration Agreement" means that certain Administration Agreement,
dated as of September 1, 2004, among the Trust, the Administrator, the Delaware
Trustee and the Indenture Trustee.
"Administration Fee" means the fee, if any, from time to time payable
to the Administrator pursuant to the Administration Agreement.
"Administrator" means National Education Loan Network, Inc., a Nevada
Corporation, and its successors and assigns.
"Authorized Officer" means, with respect to an entity, the Chairman of
the Board, the President, Chief Operating Officer, any Senior Vice President,
Secretary, Treasurer, any Vice President, any Assistant Vice President or any
Financial Services Officer thereof.
"Bankruptcy Action" means (i) commencing any case, proceeding or other
action or filing a petition under any existing or future bankruptcy, insolvency
or similar law seeking (A) to adjudicate the Trust a bankrupt or insolvent, (B)
to have an order for relief entered with respect to the Trust, or (C)
reorganization, arrangement, adjustment, wind-up, liquidation, dissolution,
composition or other relief with respect to the Trust or its debts, (ii)
consenting to the institution of bankruptcy or insolvency proceedings against
the Trust, (iii) seeking or consenting to the appointment of a receiver,
custodian, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Trust or a substantial part of its property, (iv) except as
required by law, admitting its inability to pay its debts generally as they
become due, (v) failing generally to pay the debts of the Trust as such debts
become due within the meaning of the Federal Bankruptcy Code, as determined by a
relevant bankruptcy court, (vi) making a general assignment by the Trust for the
benefit of creditors, or (vii) authorizing, taking any action in furtherance of,
consenting to or acquiescing in any of the foregoing or any similar action or
other proceedings under any United States Federal or state bankruptcy or
insolvency or similar law on behalf of, or with respect to, the Trust, or in
connection with any obligations relating to the Certificates, the Notes, this
Trust Agreement or any of the other Transaction Documents.
"Beneficial Owner" means the owners of Certificates as determined for
federal income tax purposes, taking into account the provisions of ss.
1.7704-1(h) of the Treasury Regulations.
"Certificate" means a certificate issued by the Trust evidencing the
beneficial ownership interests in the Trust as set forth thereon.
"Certificateholder" means the Persons or Person in whose name a
Certificate is registered in the Register on the applicable date.
"Delaware Trustee" means Wilmington Trust Company, not in its
individual capacity but solely in its capacity as trustee of the Trust under
this Trust Agreement, and its successors in interest.
"Indenture" means the Indenture of Trust, dated as of September 1,
2004, by and among Nelnet Student Loan Trust 2004-4 and Zions First National
Bank, as indenture trustee and eligible lender trustee, as supplemented or
amended from time to time.
"Independent Trustee" means a Person that (i) is independent and is not
a stockholder or other securityholder (whether direct, indirect or beneficial),
customer or supplier of the Trust or any of its affiliates; (ii) is not a
director, officer, employee, affiliate, member, manager or associate of the
Trust or any of its affiliates (other than in its capacity as the Delaware
Trustee for the Trust); (iii) is not related to any Person referred to in
clauses (i) or (ii) above; (iv) is not a trustee, conservator or receiver for
the Trust or any of its affiliates (other than in its capacity as Delaware
Trustee for the Trust); and (v) in the ordinary course of its business, acts as
a statutory trustee for other special purpose statutory trusts similar to the
Trust and is otherwise independent from the Trust and its affiliates (except as
provided above); provided that affiliates as used in this sentence does not
include the interests of the Delaware Trustee and its affiliates in each other.
"Initial Certificate Holder" means Nelnet Student Loan Funding, LLC.
"Moody's" means Moody's Investors Service, Inc., and its successors and
assigns.
"Notes" shall have the meaning set forth in the Indenture.
"Notices" has the meaning specified in Section 10.05 hereof.
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"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for a Certificateholder, which opinion is reasonably acceptable to the
Delaware Trustee.
"Payments" has the meaning specified in Section 4.01(b) hereof.
"Percentage Interest" means with respect to any Certificate the
percentage interest set forth on the face of such Certificate.
"Person" means any individual, corporation, partnership, joint venture,
association, joint stock company, statutory trust (including any beneficiary
thereof), unincorporated organization or government or any agency or political
subdivision thereof.
"Register" means a register kept by the Registrar in which, subject to
such reasonable regulations as it may prescribe, the Registrar shall provide for
the registration of the Certificates and the registration of transfers of the
Certificates.
"Registered Owner" shall have the meaning set forth in the Indenture.
"Registrar" means the Delaware Trustee, or its designee, as Registrar
hereunder.
"Required Certificateholders" means the approval of or direction by the
Certificateholders holding a majority of the Percentage Interests unless a
higher Percentage Interest is specifically required by the terms of this Trust
Agreement or applicable law in which case "Required Certificateholders" shall
mean such higher Percentage Interest.
"Rule 144A Letter" has the meaning set forth in Section 3.04(b) hereof.
"Securities Act" means the Securities Act of 1933, as amended.
"Sponsor" means Nelnet Student Loan Funding, LLC, a Delaware limited
liability company.
"Standard & Poor's" means Standard & Poor's Rating Services, a division
of The McGraw-Hill Companies, Inc., and its successors and assigns.
"Transaction Documents" has the meaning specified in Section 2.05(a)(i)
hereof.
"Trust" means the Nelnet Student Loan Trust 2004-4 established pursuant
to this Trust Agreement.
"Trust Agreement" means this Trust Agreement, dated as of September 1,
2004, between Nelnet Student Loan Funding, LLC, as Initial Certificateholder and
Sponsor, and Wilmington Trust Company, as Delaware Trustee.
"Trust Company" means Wilmington Trust Company, in its individual
capacity.
"Trust Estate" means all of the assets, property, and security
interests related thereto contributed, sold, assigned or otherwise transferred
to or acquired by the Trust together with all other assets subject hereto,
constituting the Trust created hereby and to be administered hereunder,
including without limitation, the earnings thereon and products and proceeds
thereof.
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"Trust Payment Date Statement" has the meaning set forth in Section
4.04(a) hereof.
"Trust Statute" means Chapter 38 of Title 12 of the Delaware Code, 12
Del. Code ss. 3801 et seq., as the same may be amended from time to time.
"UCC Financing Statement" shall have the meaning set forth in Section
2.05(c) hereof.
Section 1.02. Other References.
(a) As used in this Trust Agreement and in any certificate or other
document made or delivered pursuant hereto or thereto,
accounting terms not defined in this Trust Agreement or in any
such certificate or other document, and accounting terms partly
defined in this Trust Agreement or in any such certificate or
other document, to the extent not defined, shall have the
respective meanings given to them under generally accepted
accounting principles. To the extent that the definitions of
accounting terms in this Trust Agreement or in any such
certificate or other document are inconsistent with the meanings
of such terms under generally accepted accounting principles,
the definitions contained in this Trust Agreement or in any such
certificate or other document shall control.
(b) The definitions contained in this Trust Agreement are applicable
to the singular as well as the plural, the past, the present,
the future, the active and the passive forms of such terms and
to the masculine as well as the feminine and neuter genders of
such terms.
(c) Any agreement, instrument or statute defined or referred to
herein or in any instrument or certificate delivered in
connection herewith means such agreement, instrument or statute
as from time to time amended, modified or supplemented and
includes (in the case of agreements or instruments) references
to all attachments thereto and instruments incorporated therein;
references to a Person are also to its permitted successors and
assigns.
(d) The terms "hereof," "herein," "hereby," "hereof" or "hereunder,"
unless otherwise modified by more specific reference, shall
refer to this Trust Agreement in its entirety as amended from
time to time. Unless otherwise indicated in context, the terms
"Article," "Section," "Schedule," or "Exhibit" shall refer to an
Article or Section of, or Schedule or Exhibit to, this Trust
Agreement. The headings of sections and paragraphs and the Table
of Contents contained in this Trust Agreement are provided for
convenience only. They form no part of this Trust Agreement and
shall not affect its construction or interpretation.
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ARTICLE II
ORGANIZATION OF THE TRUST;
AUTHORITY TO EXECUTE AND PERFORM VARIOUS DOCUMENTS;
DECLARATION OF TRUST BY DELAWARE TRUSTEE
Section 2.01. Establishment of the Trust. The Sponsor and the Delaware
Trustee hereby establish a trust (the "Trust") pursuant to the Trust Statute, to
be known as Nelnet Student Loan Trust 2004-4. Simultaneously with the execution
hereof, the Sponsor shall make a contribution to the Trust as the Sponsor's
initial contribution, as described more fully in Exhibit A hereto, and
thereafter may transfer and assign the property described in the granting
clauses of the Indenture to the Trust under the terms of the Student Loan
Purchase Agreements and other assignment agreements by and between the Sponsor,
as seller or assignor, and the Trust, as purchaser or assignee, and may assume
certain obligations under and in accordance with the Transaction Documents. Upon
the making of such contribution, the Delaware Trustee shall record the amount
thereof on the books of the Trust and the investment of the Sponsor therein. It
is the intention of the parties hereto that the Trust shall constitute a
statutory trust under the Trust Statute, that this Trust Agreement shall
constitute the governing instrument of such Trust and that the
Certificateholders shall hold all of the beneficial interests in the Trust. The
rights of the Certificateholders shall be determined herein and the relationship
between the parties hereto created by this Trust Agreement shall not constitute
indebtedness for any purpose. Subject to Section 2.08 hereof, it is the
intention of the parties hereto that, solely for purposes of federal income
taxes, state and local income and franchise taxes, and any other taxes imposed
on, measured by or based upon gross or net income, (i) if there is only one
Certificateholder, the Trust shall be treated as a disregarded entity separate
from its owner pursuant to ss. 301.7701-2(c)(2) of the Treasury Regulations and
(ii) if there is more than one Certificateholder, the Trust shall be treated as
a partnership, and that the provisions of this Trust Agreement shall be
construed in accordance with such intent. The parties hereto agree to take no
action inconsistent with such treatment, unless required otherwise by applicable
law. The Delaware Trustee is hereby authorized to file the certificate required
under Section 3810 et seq. of the Trust Statute in connection with the formation
of the Trust under the Trust Statute.
Section 2.02. Name. The name of the Trust shall be Nelnet Student Loan
Trust 2004-4, in which name the Delaware Trustee solely in such capacity on
behalf of the Trust may, subject to the terms hereof and the other Transaction
Documents, conduct business, make and execute loans, contracts, security
instruments and other instruments, acquire, pledge, convey and transfer property
and sue or be sued.
Section 2.03. Office and Situs of Trust. The Trust shall be located and
administered in the State of Delaware. The Trust shall not have any employees in
any state other than Delaware; provided, however, that nothing herein shall
restrict or prohibit the Trust Company (in its individual capacity but not as
Delaware Trustee) from having employees within or without the State of Delaware.
The only office of the Trust shall be the corporate trust office of the Delaware
Trustee in Delaware.
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Section 2.04. Authority. Effective as of the date hereof, the Delaware
Trustee shall have all of the rights, powers and duties set forth herein, and to
the extent not inconsistent herewith, in the Trust Statute with respect to
accomplishing the purposes of the Trust.
Section 2.05. Powers and Authority.
(a) Subject to Section 2.09 hereof, the Trust has been created for
the purpose of purchasing and owning student loans, issuing
Notes from time to time, pledging its interest in student loans
and other collateral under the terms of the Indenture to secure
the Notes and performing activities that are necessary, suitable
or convenient to accomplish those purposes, including without
limitation, the following:
(i) execute and deliver the Basic Documents (as defined in
the Indenture), one or more student loan purchase
agreements, note purchase agreements, servicing
agreements, sub-servicing agreements, eligible lender
trust agreements, guaranty agreements, custodial
agreements, investment agreements, Derivative Products
(as defined in the Indenture), and such other documents
relating to the transactions contemplated by the
Indenture and hereby, as the Required Certificateholders
or the Administrator may from time to time direct in
writing (collectively, the "Transaction Documents"), in
each case in the respective forms in which the same may
be delivered by or on behalf of the Certificateholders
or the Administrator to the Delaware Trustee from time
to time for execution and delivery, and accept any
document that is not signed by the Delaware Trustee, the
delivery of which is provided for under any of the
preceding agreements;
(ii) execute and deliver all other documents, certificates,
instruments and agreements that are provided to it and
are contemplated to be executed and delivered by the
Delaware Trustee or the Trust, as applicable, by the
documents referred to in clause (i) above;
(iii) to originate and acquire Eligible Loans;
(iv) to deposit and apply the proceeds of the sale of the
Notes;
(v) to assign, grant, transfer, pledge, mortgage and convey
all or any portion of the Trust Estate pursuant to the
Indenture and to hold, manage and distribute to the
Certificateholders pursuant to the terms of this Trust
Agreement any portion of the Trust Estate released from
the lien of, and remitted to the Trust pursuant to, the
Indenture;
(vi) execute and deliver assignments and assumptions with
respect to certain rights and responsibilities under the
Transaction Documents;
(vii) upon the direction of the Required Certificateholders or
the Administrator take whatever action shall be required
to be taken by the Delaware Trustee by the terms of, and
to exercise its rights and perform its duties under,
each of the documents referred to in clauses (i) through
(vi) above as set forth therein;
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(viii) upon a Certificateholder making or causing to be made
available to the Delaware Trustee the contributions
referred to in Section 2.01 hereof, record the amount
thereof on the books of the Trust as the investment of
the Certificateholder therein;
(ix) upon a Certificateholder making available to the
Delaware Trustee the amounts necessary to pay the
expenses arising with respect to the Transaction
Documents to the extent not paid by a Certificateholder
or pursuant to the Transaction Documents, to pay such
expenses as directed by the Certificateholder or the
Administrator and to note such payment on the books of
the Trust;
(x) pay, remit and distribute monies received by the Trust
pursuant to Section 4.01 hereof;
(xi) subject to the terms of this Trust Agreement and the
Transaction Documents, to engage in such other
activities as may be required in connection with the
conservation of the Trust Estate, payment of the Notes
and making distributions to the Certificateholders;
(xii) issue, execute and deliver the Certificates in the form
attached hereto;
(xiii) take such other actions as are specified herein or are
incidental to the foregoing; and
(xiv) subject to the terms of this Trust Agreement, take such
other action in connection with the foregoing as the
Required Certificateholders or the Administrator may
from time to time direct.
(b) Notwithstanding anything herein to the contrary, the Trust is
neither authorized nor empowered to engage in any activity other
than exercising its rights, powers and authority and performing
its obligations in accordance with the express provisions of
Section 2.05(a) hereof. The Delaware Trustee may establish such
trust accounts on its records (or through the Trust Company) in
its discretion as it may deem desirable or appropriate for the
deposit and disbursement of any monies delivered to it
hereunder.
(c) Notwithstanding anything in this Trust Agreement or in any other
Transaction Document to the contrary, the Trust is hereby
authorized to execute, deliver and perform the Indenture, each
Student Loan Purchase Agreement and such financing statements
(UCC-1 and UCC-3) evidencing the security interests granted by
the Trust (the "UCC Financing Statement") pursuant to any of the
foregoing agreements and/or the assignment of the Trust's
interests in collateral pledged or assigned to the Trust
pursuant to any of the foregoing documents, and the Delaware
Trustee is hereby authorized to execute and deliver such
documents on behalf of the Trust without any approval, consent
or other action by any party hereto, and such execution,
delivery and performance do not and shall be deemed not to
conflict with or violate any provision of this Trust Agreement
or any duty or restriction hereunder of any party hereto.
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Section 2.06. Declaration of Trust by Delaware Trustee. The Delaware
Trustee hereby declares that it will hold the Trust Estate upon the trusts set
forth herein for the use and benefit of the Certificateholders and as Delaware
Trustee for the Certificateholders hereunder.
Section 2.07. The Indenture. The Certificateholders and the Delaware
Trustee hereby acknowledge that, when executed and delivered, the Indenture
shall create a lien on the Trust Estate, subject to the limitations set forth in
such agreements.
Section 2.08. Title to Trust Estate.
(a) Subject to the lien of the Indenture, title to all of the Trust
Estate at all times shall be vested in the Trust as a separate
legal entity except (i) where applicable law in any jurisdiction
requires title to any part of the Trust Estate to be vested in a
trustee or trustees, in which case title to that part of the
Trust Estate shall be vested in the Delaware Trustee, a
co-trustee and/or a separate trustee, as the case may be, and
(ii) except that record title to Eligible Loans that are part of
the Trust Estate shall be held by an eligible lender trustee
pursuant to the terms of an Eligible Lender Agreement or the
Indenture and the Trust Estate shall have a beneficial interest
therein.
(b) The Certificateholders shall not have legal title to any part of
the Trust Estate. No transfer by operation of law or otherwise
of any interest of a Certificateholder shall operate to
terminate this Trust Agreement or the trust hereunder or entitle
any transferee to an accounting or to the transfer to it of any
part of the Trust Estate.
Section 2.09. Agreements Not to Institute Bankruptcy Proceedings;
Covenants.
(a) Notwithstanding any other provision to the contrary of this
Trust Agreement or any other agreement, document or instrument
executed by the Trust and notwithstanding any prior termination
of this Trust Agreement, the Certificateholders shall not take
or authorize any Bankruptcy Action.
(b) So long as the Indenture is in effect, and except as otherwise
provided in the Indenture and the Transaction Documents:
(i) The Trust shall not engage in any business or activity
other than in connection with or relating to the
purchase or acquisition and ownership of the Trust
Estate, the grant of such Trust Estate to the Trustee
and the activities specified in Section 2.05 hereof.
(ii) The Trust shall not consolidate or merge with or into
any other entity or convey or transfer its properties
and assets substantially as an entirety to any entity,
or pledge its assets to any other entity except as
provided in the Transaction Documents.
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(iii) The Trust shall not dissolve or liquidate, in whole or
in part.
(iv) The Trust shall not be, become or hold itself out as
being liable for the debts of any other Person, or hold
out its credit as being available to satisfy the
obligation of any other Person, and the Trust and the
Sponsor (or any other Certificateholder) will not act as
agents for each other.
(v) The Trust shall not form, or cause to be formed, any
subsidiaries.
(vi) The Trust shall act solely in its Trust name and through
its duly Authorized Officers or agents in the conduct of
its business, shall prepare all Trust correspondence in
the Trust name, shall hold itself out as a separate
entity from any other Person, shall conduct its business
so as not to mislead others as to the identity of the
entity with which they are concerned and shall correct
any known misunderstanding regarding its separate
identity.
(vii) The Trust shall maintain statutory trust records,
accounts and books of account and shall not commingle
its statutory trust records, accounts and books of
account with the organizational or other records,
accounts and books of account of any other corporation
or entity and such records, accounts and books of
account shall reflect the separate existence of the
Trust. The books of the Trust may be kept (subject to
any provision contained in any applicable statutes)
inside or outside the State of Delaware at such place or
places as may be designated from time to time by the
Trust.
(viii) The Trust shall take such actions as may be necessary to
authorize all of its actions as may be required by law.
(ix) This Section shall not be amended, altered, changed or
repealed, except as may be permitted pursuant to the
Transaction Documents.
(x) The Trust shall not amend this Trust Agreement, except
as may be permitted pursuant to the Transaction
Documents.
(xi) The Trust shall (1) conduct its business in an office
separate from that of the Certificateholders, (2)
maintain stationery, invoices and checks separate from
that of any other Person, (3) pay all of its own
expenses and liabilities from its own funds, (4)
strictly observe all statutory formalities, (5) pay the
salaries of its own employees and maintain a sufficient
number of employees in light of its contemplated
business operations, (6) maintain an arm's length
relationship with its affiliates and (7) maintain
separate financial statements from any other Person. The
Trust shall not (A) pledge (except pursuant to the
Transaction Documents), lend or advance any moneys to,
or make an investment in or for the benefit of, any
Person, (B) make any capital expenditures, (C) subject
to Section 5.06 hereof, take any Bankruptcy Action, or
(D) guarantee (directly or indirectly), endorse or
otherwise become contingently liable (directly or
indirectly) for, or pay from its funds, the obligations
or indebtedness of, or (except pursuant to the
Transaction Documents) own or purchase any stock,
obligations or securities of or any other interest in,
or make any capital contribution to, any other Person.
(xii) The Trust shall allocate fairly and reasonably with any
other Person expenses that are shared with such Person
including, without limitation, any overhead, rent, or
other compensation paid for shared or leased office
space.
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(xiii) The Trust (A) has maintained and shall maintain its
valid existence, rights and franchises in good standing
as a statutory trust under the laws of the State of
Delaware and will obtain and preserve its qualification
to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the
validity and enforceability of this Trust Agreement; (B)
has observed and shall observe all procedures required
by this Trust Agreement and the laws of the State of
Delaware; and (C) has otherwise complied and shall
otherwise comply with the provisions of this Trust
Agreement and the Trust Statute.
(xiv) Financial and operational services, including, without
limitation, maintenance of the books and records of the
Trust and preparation of the financial statements shall
be performed on behalf of the Trust by independent
contractors or employees of the Administrator or its
affiliates. The entity performing services or incurring
expenses in connection with such services for the Trust
shall receive compensation for such services rendered or
expenses incurred in an amount equal to the fair value
of such services and expenses. To the extent that the
Trust leases premises from a Certificateholder or
affiliates of a Certificateholder, the Trust shall pay
appropriate compensation or rental. The Trust shall be
directly responsible for the costs of its own outside
legal, auditing and other similar services and shall
provide for its own operating expenses and liabilities
from its own funds. The amounts deposited into the Trust
and the cash flow expected to be received by the Trust
under the Indenture is expected to be sufficient to meet
the fees and costs of the Delaware Trustee and the
Administrator for the Trust and the reasonably
anticipated expenses and liabilities of the Trust.
(xv) The annual financial statements of the Trust shall
disclose the effects of these transactions in accordance
with generally accepted accounting principles. The
consolidated financial statements which consolidate the
assets and earnings of any Certificateholder with those
of the Trust shall not state that the assets of the
Trust shall be available to creditors of a
Certificateholder. The financial statements (if any) of
the Trust shall not state that the assets of the Trust
are or will be available to pay creditors of any
Certificateholder or any other affiliate (other than the
obligations of the Certificateholders to indemnify the
Delaware Trustee under this Trust Agreement).
(xvi) The Trust will not guarantee any indebtedness of or make
loans to a Certificateholder.
(xvii) Except for the Delaware Trustee's standard practice
regarding maintenance of funds and assets, the funds and
other assets of the Trust will not be commingled with
those of any other Person and shall be maintained as
identifiable fund and assets held in the name of the
Trust.
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(xviii) The Trust shall not enter into any contract or agreement
with any its Certificateholders or their affiliates
except on terms that are intrinsically fair,
commercially reasonable, and substantially similar to
those that would be available on an arm's length basis
with third parties, and transact all business with its
Certificateholders and or their affiliates pursuant to
written, enforceable agreements with pricing and
material terms established at the inception that will
not be amendable except with written consent of each of
the parties to the agreement.
(xix) The Trust shall maintain adequate capital for the normal
obligations reasonably foreseeable for the size and
character of the activities of the Trust and in light of
its proposed operations and liabilities (provided that
this clause shall not be deemed a commitment by any
Certificateholder to deposit additional amounts into the
Trust).
(xx) The Trust shall not enter into any agreements, written
or otherwise, pursuant to which the Certificateholder
agrees to extend credit or make payment or contributions
to or for or assume, guaranty or otherwise be obligated
for the payment or performance of the Trust; provided,
however, that any Certificateholder may make any deposit
to the Trust that such Certificateholder determines to
be in the Certificateholder's best interest.
Section 2.10. Appointment of Delaware Trustee. The Certificateholders
hereby appoint the Delaware Trustee as trustee of the Trust effective as of the
date hereof, to have all of the rights, powers, authority, authorization and
duties set forth herein and in the Trust Statute. Section 2.11. Federal Income
Tax Allocations. Net income of the Trust for any period, as determined for
federal income tax purposes (and each item of income, gain, loss and deduction
entering into the computation thereof), shall be allocated to the
Certificateholders on a pro rata basis in accordance with their respective
Percentage Interests.
Section 2.12. Limitations on Certificateholders. Each Certificateholder
by accepting an interest in the Trust agrees that it will not enter into any
agreements, written or otherwise, between the Certificateholder and the Trust or
any other party (other than the obligations of the Certificateholder under
Sections 5.03, 6.08 and Article VII hereof) pursuant to which the
Certificateholder agrees to extend credit or make payment or contributions to or
for or assume, guaranty or otherwise be obligated for the payment or performance
of the Trust. This provision shall not prohibit any Certificateholder from
making any capital contributions to the Trust that such Certificateholder
determines to be in the Certificateholder's best interest.
Section 2.13. Administration. Unless and until otherwise notified in
writing by the Required Certificateholders, the Delaware Trustee is hereby
authorized and directed to take and receive instructions from the Administrator
pursuant to the Administration Agreement with respect to matters relating to the
Trust to the same extent and with the same effect and protection as if any such
instructions were received from the Required Certificateholders subject to the
provisions hereof. The Administrator shall be entitled to the Administration Fee
for services provided pursuant to the provisions hereof, which compensation is
hereby acknowledged as reasonable compensation by the Administrator and the
Certificateholders. The Administration Fee shall be payable monthly as provided
herein and in the Indenture.
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Section 2.14. Additional Contributions. Any Certificateholder may make
an additional capital contribution (which capital contribution may be made with
funds advanced to the Certificateholder from the Administrator) to the Trust to
enable the Trust to carry out any instructions of such Certificateholder that
are permitted by the Transaction Documents, including an optional capital
contribution to enable the Trust to effect an optional purchase of Notes. If
such Certificateholder makes such a capital contribution, the Delaware Trustee
shall establish a separate trust account designated for the deposit of such
capital contributions. If a Certificateholder makes a capital contribution to
enable the Trust to take any action, any proceeds that result from such action
in an amount up to the amount of the capital contribution shall, if so directed
by the Certificateholder, be credited to such separate account and shall be
distributed to the Certificateholder that made such capital contribution.
Section 2.15. Principal Place of Business. The Trust shall maintain its
principal place of business and chief executive office in the State of Delaware.
Section 2.16. Liability of the Certificateholders and the Delaware
Trustee. To the fullest extent permitted by law, no Certificateholder shall have
any personal liability for any liability or obligation of the Trust for any
losses, claims, damages, liabilities and expenses of the Trust. The Delaware
Trustee shall not have any liability or obligation with respect to the
Certificateholders except as otherwise provided herein.
ARTICLE III
TRUST CERTIFICATES AND TRANSFER OF INTERESTS
Section 3.01. Initial Beneficial Ownership. Upon the formation of the
Trust by the contribution by the Sponsor pursuant to Section 2.01 hereof and
until the issuance of Certificates, the Sponsor shall be the sole beneficial
owner of the Trust.
Section 3.02. The Certificates.
(a) The Certificates are issuable in fully registered form in
minimum Percentage Interests of 10%. Each Certificate shall be
substantially in the form set forth in Exhibit C hereto. All
Certificates may have set forth thereon such information,
legends, and text as may be necessary or appropriate to conform
to any applicable rules and regulations of any governmental
authority or any usage or requirement of law with respect
thereto. The Certificates shall be executed on behalf of the
Trust by manual or facsimile signature of an Authorized Officer
of the Delaware Trustee. Certificates bearing the manual or
facsimile signatures of individuals who were, at the time when
such signatures shall have been affixed, authorized to sign on
behalf of the Delaware Trustee, shall be duly authorized,
validly issued and entitled to the benefits of this Trust
Agreement, notwithstanding that such individuals or any of them
shall have ceased to be so authorized prior to the
authentication and delivery of such Certificates or did not hold
such offices at the date of authentication and delivery of such
Certificates.
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(b) A transferee of a Certificate shall become a Certificateholder
and shall be entitled to the rights and subject to the
obligations of a Certificateholder hereunder upon such
transferee's acceptance of a Certificate duly registered in such
transferee's name pursuant to Section 3.04 hereof.
Section 3.03. Authentication of Certificates. No Certificate shall
entitle its Certificateholder to any benefit under this Trust Agreement or be
valid for any purpose unless there shall appear on such Certificate a
certificate of authentication substantially in the form set forth in Exhibit C
hereto, executed by the Trust by manual signature of the Delaware Trustee; such
authentication shall constitute conclusive evidence that such Certificate has
been duly authenticated and delivered hereunder. All Certificates shall be dated
the date of their authentication.
Section 3.04. Registration of Transfer and Exchange of Certificates.
(a) The Delaware Trustee shall keep or cause to be kept, at the
office or agency maintained pursuant to Section 3.08 hereof, a
Register in which, subject to such reasonable regulations as it
may prescribe, the Registrar shall provide for the registration
of Certificates and of transfers and exchanges of Certificates
as herein provided.
(b) The Certificates have not been and will not be registered under
the Securities Act and will not be listed on any exchange. No
transfer of a Certificate shall be made unless such transfer is
made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is
exempt from the registration requirements under the Securities
Act and such state securities laws. In the event that a transfer
is to be made in reliance upon an exemption from the Securities
Act and state securities laws, in order to assure compliance
with the Securities Act and such laws, the Certificateholder
desiring to effect such transfer and such Certificateholder's
prospective transferee shall each certify to the Trust, the
Delaware Trustee, the Administrator and the transferring
Certificateholder in writing the facts surrounding the transfer
in substantially the forms set forth in Exhibit D (the
Transferor Letter) and Exhibit E (the Investment Letter) or
Exhibit F (the "Rule 144A Letter") hereto, as applicable. Except
in the case of a transfer as to which the proposed transferee
has provided a Rule 144A Letter with respect to a Rule 144A
transaction, there shall also be delivered to the Trust an
Opinion of Counsel to the effect that such transfer may be made
pursuant to an exemption from the Securities Act, which Opinion
of Counsel shall not be an expense of the Trust, the Delaware
Trustee (unless it is the transferee from whom such opinion is
to be obtained) or of the Administrator. Each Certificateholder
of a Certificate desiring to effect such a transfer shall, and
does hereby agree to, indemnify the Trust, the Delaware Trustee
and the Administrator against any liability that may result if
the transfer is not so exempt or is not made in accordance with
federal and state securities laws.
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(c) No transfer, sale, pledge or other disposition of the
Certificate shall be made unless prior to such transfer, sale,
pledge or other disposition, the Trust shall have received
either (i) a representation letter from the transferee of such
Certificate, acceptable to and in form and substance
satisfactory to the Trust, to the effect that such a transferee
is not an employee benefit plan subject to Section 406 of ERISA
or Section 4975 of the Code, or a person acting on behalf of any
such plan or (ii) in the case of any Certificate presented for
registration in the name of an employee benefit plan subject to
ERISA or Section 4975 of the Code (or comparable provisions of
any subsequent enactments), or a trustee of any such plan or any
other person acting on behalf of any such plan, an Opinion of
Counsel satisfactory to the Trust, the Delaware Trustee and the
Administrator to the effect that the purchase or holding of such
Certificate will not result in the Trust or the Trust Estate
being deemed to be "plan assets" and subject to the prohibited
transaction provisions of ERISA and the Code and will not
subject the Trust, Delaware Trustee, the Administrator or the
transferring Certificateholder to any obligation in addition to
those undertaken in this Trust Agreement. Notwithstanding
anything else to the contrary herein, in the event any purported
transfer of any Certificate is made without delivery of the
representation letter referred to above, such representation
shall be deemed to have been made by the transferee by its
acceptance of such Certificate. In addition, any purported
transfer of a Certificate to or on behalf of an employee benefit
plan subject to ERISA or to the Code without the delivery to the
Trust, the Delaware Trustee, and the Administrator of an Opinion
of Counsel as described above shall be void and of no effect.
Any certificate or Opinion of Counsel furnished pursuant to this
Section may be relied on conclusively by the Trust, Delaware
Trustee, the Administrator and the transferring
Certificateholder in determining whether the provisions hereof
have been complied with.
(d) No transfer shall be effective if immediately after such
transfer there would be more than one hundred Beneficial Owners
of Certificates. Any purported transfer in violation of the
provisions of this subsection (d) shall be void ab initio and
the Delaware Trustee shall have no liability in connection with
a transfer in violation of the provisions of this subsection
(d).
(e) The foregoing provisions shall not prevent the assignment by a
Certificateholder of all or any part of its right to receive
distributions in respect of its interest in its Certificate, but
such assignment shall effect no change in ownership of the
Trust.
(f) The preparation and delivery of the certificate and opinions
referred to in this Section shall not be an expense of the
Trust, the Delaware Trustee or the Administrator.
(g) Upon surrender for registration of transfer of any Certificate
at the office or agency maintained pursuant to Section 3.08
hereof, the Delaware Trustee shall execute, authenticate and
deliver, in the name of the designated transferee or
transferees, one or more new Certificates in authorized
denominations stating the aggregate amount and Percentage
Interest so transferred dated the date of authentication by the
Delaware Trustee. At the option of a Certificateholder,
Certificates may be exchanged for other Certificates of
authorized Percentage Interests and denominations of a like
aggregate amount upon surrender of the Certificates to be
exchanged at the office or agency maintained pursuant to Section
3.08 hereof.
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(h) Every Certificate presented or surrendered for registration of
transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to the Trust and
duly executed by the Certificateholder or such
Certificateholder's attorney duly authorized in writing. Each
Certificate surrendered for registration of transfer or exchange
shall be cancelled and subsequently disposed of by the Trust in
accordance with its customary practice.
(i) No service charge shall be made for any registration of transfer
or exchange of Certificates, but the Trust or the Delaware
Trustee may require payment of a sum sufficient to cover any tax
or governmental charge that may be imposed in connection with
any transfer or exchange of Certificates.
(j) Notwithstanding any other provision herein or elsewhere, the
Trust, the Delaware Trustee and the Administrator (i) shall not
have any obligation to determine whether any transfer or
exchange of a Certificate is permitted under or in accordance
with this Trust Agreement; (ii) shall not have any personal
liability to any person in connection with any transfer or
exchange or proposed or purported transfer or exchange (and/or
registration thereof) that is not permitted under or in
accordance with this Trust Agreement; and (iii) shall be
entitled to rely (and shall be fully justified and protected in
so relying) on the Register as to the identity of the
Certificateholders and as to the Certificates and the Percentage
Interests and denominations thereof evidenced thereby.
(k) Notwithstanding anything contained herein to the contrary, the
Delaware Trustee shall not be responsible for ascertaining
whether any transfer complies with the registration provisions
or exemptions from the Securities Act of 1933, as amended, the
Securities Act of 1934, as amended, applicable state securities
law or the Investment Company Act; provided, however, that if a
certificate is specifically required to be delivered to the
Delaware Trustee by a purchaser or transferee of a Certificate,
the Delaware Trustee shall be under a duty to examine the same
to determine whether it conforms to the requirements of this
Trust Agreement and shall promptly notify the party delivering
the same if such certificate does not so conform.
Section 3.05. Mutilated, Destroyed, Lost or Stolen Certificates. If (i)
any mutilated Certificate is surrendered to the Trust and the Registrar or the
Trust receives evidence to its satisfaction of the destruction, loss or theft of
the Certificate, and (ii) there is delivered to the Registrar, the Trust, the
Delaware Trustee and the Administrator such security or indemnity as may be
required by them to save each of them harmless, then, in the absence of notice
to the Registrar or the Trust that the Certificate has been acquired by a
protected purchaser, the Delaware Trustee shall execute and the Delaware Trustee
or the Registrar shall authenticate and deliver, in exchange for or in lieu of
any such mutilated, destroyed, lost or stolen Certificate, a new Certificate of
like tenor, amount and Percentage Interest but bearing a number not
contemporaneously outstanding. Upon the issuance of any new Certificate under
this Section the Trust or the Delaware Trustee may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer or exchange of the Certificate and any other
reasonable expenses (including the reasonable fees and expenses of the Trust,
Delaware Trustee, the Administrator and the Registrar) connected therewith. Any
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duplicate Certificate issued pursuant to this Section shall constitute complete
and indefeasible evidence of ownership in the Trust, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be found at any
time.
Section 3.06. Persons Deemed Owners. Prior to due presentation of a
Certificate for registration of transfer, the Trust, Delaware Trustee, the
Administrator and the Registrar may treat the Person in whose name any
Certificate is registered in the Register as the owner of such Certificate for
the purpose of receiving distributions pursuant to Section 4.01(b) hereof and
for all other purposes whatsoever, and none of the Trust, Delaware Trustee, the
Administrator or the Registrar shall be bound by any notice to the contrary.
Section 3.07. Access to List of Certificateholders' Names and Addresses.
The Trust shall furnish or cause to be furnished to the Administrator or a
Certificateholder, within 15 days after receipt by the Delaware Trustee of a
written request therefor from the Administrator or the Certificateholder, a
list, in such form as the Administrator or the Certificateholder may reasonably
require, of the names and addresses of the Certificateholders then registered in
the Register as the owner of Certificates. Each Certificateholder, by receiving
and holding a Certificate, shall be deemed to have agreed not to hold any of the
other Certificateholders, the Trust, the Delaware Trustee, the Administrator, or
the Registrar accountable by reason of the disclosure of its name and address,
regardless of the source from which such information was derived.
Section 3.08. Maintenance of Office or Agency. The Trust will maintain
an office or agency in Wilmington, Delaware where Certificates may be
surrendered for registration of transfer or exchange. The Trust will maintain an
office at the address stated in Section 10.05 hereof where notices and demands
to or upon the Trust, the Delaware Trustee, the Administrator, and the Registrar
in respect of this Trust Agreement may be served.
Section 3.09. Terms of Certificates Binding. Each Certificateholder, by
assenting to the acquisition by it of a Certificate, agrees to be bound by the
terms and conditions of the Certificates and of this Trust Agreement, including
any supplements or amendments thereto or hereto, and to perform the obligations
of a Certificateholder as set forth therein or herein, in all respects as if it
were a signatory hereto. This undertaking is made for the benefit of the Trust,
the Delaware Trustee, the Administrator, the Registrar, and all other
Certificateholders, if any.
ARTICLE IV
DISTRIBUTIONS AND PAYMENTS
Section 4.01. Distribution of Payments.
(a) Until the Trust shall have received written notice from the
Trustee that the Indenture shall have been discharged pursuant
to its terms, all revenues and receipts of any kind whatsoever
generated by, remitted in respect of or relating to the Trust
Estate and other payments and receipts of any kind with respect
16
to the Trust Estate or otherwise included in the Trust Estate
shall, if received directly by the Delaware Trustee, forthwith
after receipt, be paid over by the Delaware Trustee to the
indenture trustee without deduction, set-off or adjustment of
any kind for distribution in accordance with the provisions of
the Indenture; provided, that neither the making of such
payments to, nor the receipt of such payments by, the Trustee or
any other person shall ever be deemed to constitute the Trustee
or any such person as an income beneficiary hereunder, it being
understood that all such payments will be made pursuant to
contractual obligations under the Indenture; and provided,
further, that the Delaware Trustee shall not be required to turn
over any such amounts received from the Trustee, or received on
account of any amounts referred to in clause first of subsection
(b) of this Section or in Article VII hereof.
(b) Except as otherwise provided in paragraph (a) of this Section,
(i) all payments and amounts actually received by or on behalf
of the Delaware Trustee from the Trust Estate sources pursuant
to the Indenture and (ii) all other revenues, receipts and other
payments of any kind whatsoever generated by, remitted or
received in respect of or relating to the Trust Estate or
otherwise included in the Trust Estate and not pledged or
required to be pledged pursuant to the Indenture or released
from the lien of the Indenture (all to the extent not previously
distributed) (collectively, the "Payments"), each to the extent
received by or on behalf of the Delaware Trustee, shall be
distributed forthwith upon receipt by the Delaware Trustee in
the following order of priority: first, so much of such Payments
as shall be required to pay or reimburse the Trust Company and
the Delaware Trustee for any fees, expenses, indemnities or
other amounts not otherwise paid or reimbursed to the Trust
Company or the Delaware Trustee pursuant to the Indenture or
otherwise as to which such Person is entitled to be paid or
reimbursed hereunder shall be retained by the Delaware Trustee;
second, so much of the remainder of such Payments as shall be
required to pay or reimburse the Administrator in performing its
responsibilities hereunder and under the Administration
Agreement for any Administration Fee, expenses, indemnities or
other amounts not otherwise paid or reimbursed to the
Administrator pursuant to the Indenture or otherwise as to which
such Person is entitled to be paid or reimbursed shall be paid
or reimbursed to the Administrator; and third, the balance, if
any, of such Payment or amount remaining thereafter shall be
promptly distributed to the Certificateholders, pro rata based
on their respective Percentage Interests, without deduction,
set-off or adjustment of any kind; provided, that neither the
making of such Payments to, nor the receipt of such Payments by,
a Certificateholder or any other Person shall ever be deemed to
constitute a Certificateholder or any such Person as an income
beneficiary hereunder, and provided further, that the Delaware
Trustee shall not be required to turn over any such Payment as
compensation or reimbursement of expenses.
Section 4.02. Payments From Trust Estate Only. All payments to be made
by the Delaware Trustee under this Trust Agreement or by the Trust (other than
payments made pursuant to Sections 2.05(a)(ix), 2.12 and 2.14 hereof with funds
to be provided by a Certificateholder) shall be made only from the Trust Estate
and the income and proceeds from or related to the Trust Estate and only to the
extent that Delaware Trustee shall have actually received such income or
proceeds from the Trust Estate and such proceeds are not required to be remitted
to the Trustee pursuant to Section 4.01(a) hereof or the Indenture. Each
Certificateholder agrees that it will look solely to the Trust Estate to the
extent available for payment as herein provided and that, except as specifically
17
provided in Section 6.01 hereof, the Trust Company shall not be liable in its
individual capacity to any Certificateholder for any amounts payable under this
Trust Agreement and shall not be subject to any liability in its individual
capacity under this Trust Agreement. This Section is intended solely to limit
the liability of the Delaware Trustee and shall have no effect on the
obligations of the Certificateholders under this Trust Agreement. This Section
does not limit the liability of the Delaware Trustee set forth in Section 6.01
hereof.
Section 4.03. Method of Payment. Unless otherwise directed by a
Certificateholder, all amounts payable to the Certificateholder pursuant to this
Trust Agreement shall be paid to it in immediately available funds by transfer
to a banking institution with bank wire transfer facilities for the account of
the Certificateholder, as the Delaware Trustee may be instructed from time to
time in writing by the Certificateholder.
Section 4.04. Trust Payment Date Statement.
(a) Based on the reports received by the Delaware Trustee pursuant
to the Indenture, the Delaware Trustee, or the Administrator if
requested by the Delaware Trustee pursuant to the Administration
Agreement, shall prepare, or shall cause to be prepared for each
payment or distribution made to the Delaware Trustee, the
Administrator, or the Certificateholders pursuant to Section
4.01(b) hereof a statement substantially in the form of Exhibit
B hereto (the "Trust Payment Date Statement"). In connection
with any payments or distributions to the Delaware Trustee, the
Administrator or the Certificateholders pursuant to Section
4.01(b) hereof, the Delaware Trustee, or the Administrator if
requested by the Delaware Trustee pursuant to the Administration
Agreement, shall deliver the Trust Payment Date Statement to
each Certificateholder or as instructed by the Certificateholder
in a written Notice to the Delaware Trustee and the
Administrator.
(b) The Delaware Trustee makes no representations or warranties as
to the accuracy of the information contained in the reports
generated by the Trust or the Administrator pursuant to the
Indenture or, to the extent that the Trust Payment Date
Statement contains or relies upon information provided by the
reports provided by the Trust or the Administrator pursuant to
the Indenture, the Trust Payment Date Statement. The Delaware
Trustee shall not be bound to make any investigation as to the
facts stated in the reports provided by the Trust pursuant to
the Indenture, and may rely upon each of the reports provided by
the Trust pursuant to the Indenture delivered to it by or on
behalf of the Trustee.
ARTICLE V
DUTIES OF DELAWARE TRUSTEE
Section 5.01. Notice of Default. In the event the Delaware Trustee shall
have actual knowledge of an Event of Default under the Indenture with respect to
any Class, the Delaware Trustee shall give prompt telephonic notice (to the
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extent telephone numbers are on file with the Delaware Trustee) followed by, or
in the alternative, written notice by facsimile or overnight courier for receipt
within 48 hours of discovery thereof to the Sponsor and the Trustee. Subject to
the terms of Section 5.03 hereof, the Delaware Trustee shall take or refrain
from taking such action as the Delaware Trustee shall be instructed in writing
by the Required Certificateholders. If the Delaware Trustee shall not have
received such instructions within 20 days after giving written notice of such
event to the Certificateholders (or within such shorter period of time as may be
specified in such notice or required under the circumstances), the Delaware
Trustee, subject to instructions subsequently received from the Required
Certificateholders pursuant to the preceding sentence, may, but shall be under
no duty to, take or refrain from taking any action with respect thereto as the
Delaware Trustee shall deem advisable and in the best interests of the
Certificateholders and shall not have liability to any Person for any action or
inaction. For all purposes of this Trust Agreement, in the absence of actual
knowledge of an officer of the Delaware Trustee at its address specified in
Section 10.05 hereof, the Delaware Trustee shall not be deemed to have knowledge
of any event referred to in the first sentence of this Section unless it
receives written notice thereof from a Certificateholder or the Trustee.
Section 5.02. Action Upon Instruction.
(a) Whenever the Delaware Trustee is (i) unable to decide between
alternative courses of action permitted or required by the terms
of this Trust Agreement or under any Transaction Document, (ii)
unsure as to the application of any provision of this Trust
Agreement or any Transaction Document or any such provision is
ambiguous as to its application, or is, or appears to be, in
conflict with any other applicable provision or (iii) in the
event that this Trust Agreement permits any determination by the
Delaware Trustee or is silent or is incomplete as to the course
of action that the Delaware Trustee, required to take with
respect to a particular set of facts, the Delaware Trustee may
give Notice (in such form as shall be appropriate under the
circumstances) to the Certificateholders and the Administrator
requesting instruction and, to the extent that the Delaware
Trustee acts or refrains from acting in good faith in accordance
with any such instruction received from the Required
Certificateholders or the Administrator, the Delaware Trustee
shall not be liable, on account of such action or inaction, to
any Person. If the Delaware Trustee shall not have received
appropriate instruction within 10 days of such notice (or within
such shorter period of time as reasonably may be specified in
such notice or may be necessary under the circumstances) it may,
but shall be under no duty to, take or refrain from taking such
action not inconsistent with this Trust Agreement or the
Transaction Documents, as it shall deem to be in the best
interests of the Certificateholders, and shall not have
liability to any Person for such action or inaction.
(b) Notwithstanding anything in this Trust Agreement to the
contrary, neither the Delaware Trustee nor any of its respective
agents, shall be required to take or refrain from taking any
action under this Trust Agreement, the Transaction Documents or
any other agreement, or exercise any of their respective rights
and powers, if the Delaware Trustee shall reasonably determine
(without any obligation to make any such determination), or
shall have been advised by counsel, that such action or inaction
(i) is contrary to the terms of this Trust Agreement, the terms
of the Transaction Documents or any other agreement to which the
Delaware Trustee or the Trust is a party, (ii) is likely to
19
result in a breach of its duties hereunder or those of the Trust
Company, (iii) to the actual knowledge of an officer of the
Delaware Trustee that is responsible for the administration of
the Trust, would adversely affect the tax status of the Trust,
or (iv) is otherwise contrary to applicable law.
(c) The Delaware Trustee shall not be required to expend or risk its
own funds or otherwise incur financial liability in the
performance of any of its respective duties hereunder, or in the
exercise of any of its respective rights or powers, if there is
reasonable ground for believing that the repayment of such funds
or adequate indemnity against such risk or liability is not
reasonably assured to the Delaware Trustee and none of the
provisions contained in this Trust Agreement shall in any event
require the Delaware Trustee to perform, or be responsible for
the manner of performance of, any of the obligations of any
other party under this Trust Agreement.
(d) Subject to the terms of Sections 5.01, 5.03 and 5.06 hereof and
the Administration Agreement, the Required Certificateholders or
the Administrator may by written instruction direct the Delaware
Trustee in the management of the Trust. Such direction may be
exercised at any time by written instruction of the Required
Certificateholders or the Administrator. Prior to taking any
action on behalf of the Trust under this Trust Agreement or the
Transaction Documents, the Delaware Trustee may request and, if
so requested, shall receive written instructions of the Required
Certificateholders or the Administrator specifying the manner in
which the Delaware Trustee shall take such action. The Delaware
Trustee shall not be liable for any action it takes or omits to
take in good faith in reliance on the instructions of such
Required Certificateholders or the Administrator.
(e) The Certificateholders agree to not provide any direction to the
Delaware Trustee to take any action that is contrary to the
terms of this Trust Agreement, the Transaction Documents, any
other agreements to which the Delaware Trustee or the Trust is a
party, or is otherwise contrary to applicable law.
(f) The Delaware Trustee shall not have the power, except upon the
direction of each Certificateholder, to (a) remove or replace
the Eligible Lender Trustee, any Servicer, the Administrator or
any other administrator or (b) except as expressly provided in
the Transaction Documents, sell the Financed Student Loans after
the termination of the Indenture. The Delaware Trustee shall
take the actions referred to in the preceding sentence only upon
written instructions signed by the Certificateholders.
Section 5.03. Indemnification. The Delaware Trustee shall not be
required to take or refrain from taking any action under this Trust Agreement,
the Transaction Documents or any other agreement (other than the actions
specified in the first sentence of Section 5.01 hereof) if the Delaware Trustee
shall reasonably determine, or shall have been advised by counsel, that such
actions may result in personal liability of the Trust Company or require it to
risk or advance its own funds unless the Trust Company and the Delaware Trustee
shall have been indemnified by Certificateholders, in manner and form reasonably
satisfactory to the Trust Company and the Delaware Trustee, against any
liability, fee, cost or expense (including reasonable legal fees and expenses)
which may be incurred or charged in connection therewith; and if the Required
Certificateholders shall have directed the Delaware Trustee to take or refrain
from taking any such action, the Certificateholders so directing the Delaware
Trustee agree to furnish such indemnity as shall be required and, in addition,
to the extent not otherwise paid pursuant to the provisions of this Trust
Agreement, to pay the reasonable compensation of the Delaware Trustee for the
services performed or to be performed by it pursuant to such direction.
Section 5.04. No Duties Except as Specified in Transaction Documents.
The Delaware Trustee shall have no duty or obligation to manage, control, use,
make any payment in respect of, register, record, sell, dispose of or otherwise
deal with any of the Trust Estate, or otherwise to take or refrain from taking
any action as Delaware Trustee or on behalf of the Trust whatsoever under or in
connection with this Trust Agreement or the Transaction Documents except as (i)
expressly provided by the terms hereof or (ii) to the extent not so provided, as
20
expressly provided in written instructions received pursuant to Section 5.01 or
5.02 hereof; and no implied duties or obligations shall be read into this Trust
Agreement against the Delaware Trustee. The Delaware Trustee shall not in any
instance have any duty to inspect any of the Trust Estate or any records
pertaining thereto.
Section 5.05. No Action Except Under Specified Documents or
Instructions. The Delaware Trustee shall have no authority to manage, control,
use, make any payment in respect of, register, record, sell, dispose of or
otherwise deal with any part of the Trust Estate except (i) as required by the
terms of this Trust Agreement, (ii) in accordance with the powers granted to or
the authority conferred upon the Delaware Trustee pursuant to this Trust
Agreement, or (iii) in accordance with the express terms hereof or written
instructions received pursuant to Section 5.01 or 5.02 hereof.
Section 5.06. Action by Certificateholders with Respect to Bankruptcy.
The Delaware Trustee shall not follow any direction of the Certificateholders to
take any Bankruptcy Action. The consent of the Delaware Trustee shall be
required prior to the commencement by the Trust of any Bankruptcy Action. To the
fullest extent permitted by applicable law, the Delaware Trustee shall not be
required to consent to the commencement by the Trust of any Bankruptcy Action
unless it has received a certificate signed by a nationally recognized
accounting firm (the "Accountant's Certificate") certifying that such accounting
firm reasonably believes that the Trust is insolvent. The Delaware Trustee may
conclusively rely upon the Accountant's Certificate.
Section 5.07. Discharge of Liens. Notwithstanding anything in this Trust
Agreement to the contrary, the Delaware Trustee agrees that it will, at its own
cost and expense (and not at the expense of the Trust), promptly take all action
as may be necessary to discharge any liens on any part of the Trust Estate which
are attributable to actions by or claims against the Trust Company that are not
related to the ownership of the Trust Estate or the administration of the Trust
Estate or the transactions contemplated by this Trust Agreement.
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ARTICLE VI
DELAWARE TRUSTEE
Section 6.01. Acceptance of Trusts and Duties. The Trust Company accepts
the trusts hereby created and agrees to perform the same but only upon the terms
of this Trust Agreement. The Delaware Trustee is authorized and directed to
execute and deliver the Transaction Documents to which the Trust is to be party
and each certificate or other document attached as an exhibit to or contemplated
by the Transaction Documents to which the Trust is to be a party, as evidenced
conclusively by the Delaware Trustee's execution thereof. In addition to the
foregoing, the Delaware Trustee is authorized, but shall not be obligated, to
take all actions required of the Trust pursuant to the Transaction Documents.
Subject to Sections 2.09 and 5.06 hereof, the Delaware Trustee is further
authorized from time to time to take such action as the Required
Certificateholders instruct in writing with respect to the Transaction
Documents. The Delaware Trustee declares that it shall hold the Trust Estate,
and all amounts received by it thereunder and hereunder in trust, upon the terms
herein set forth, on behalf of the Trust for the use and benefit of all present
and future Certificateholders. The Delaware Trustee also agrees to receive and
disburse all money actually received by it constituting part of the Trust Estate
upon the terms hereof. Notwithstanding anything in this Trust Agreement to the
contrary, the Trust Company shall not be liable, answerable or accountable in
its individual capacity to any Person under any circumstances, except that such
limitation shall not limit the liability, if any, of the Trust Company to the
Certificateholders (i) for the Trust Company's own willful misconduct, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of its offices hereunder or the willful misconduct, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of its
offices hereunder performed through its agent not appointed with due care, (ii)
in the case of the inaccuracy of any of the Trust Company's representations or
warranties contained in Section 6.03 hereof, (iii) for taxes, fees or other
charges on, based on or measured by any fees, commissions or compensation
received by it for acting as Delaware Trustee in connection with any of the
transactions contemplated by this Trust Agreement or any other agreement
contemplated by this Trust Agreement, or (iv) the failure to use ordinary care
to disburse in accordance with the terms hereof money actually received by it.
In particular, but not by way of limitation:
(a) the Trust Company shall not be liable for any error of judgment
made in good faith by any officer of the Delaware Trustee;
(b) under no circumstances shall the Trust Company be personally
liable hereunder for any indebtedness of the Trust;
(c) the Trust Company shall not be personally liable for the payment
of any tax imposed on the Trust or amounts that are includable
in the federal gross income of the Certificateholders;
(d) no provision of this Trust Agreement shall require the Trust
Company to expend or risk funds or otherwise incur any financial
liability in the performance of any of the Delaware Trustee's
duties or powers hereunder, if the Trust Company believes or is
advised by its legal counsel that repayment of such funds or
adequate indemnity against such risk or liability is not assured
or provided to its reasonable satisfaction;
22
(e) under no circumstance shall the Trust Company be liable for any
representation, warranty, covenant, or obligation or
indebtedness of the Trust hereunder or under the Transaction
Documents or any other agreement, document or certificate
contemplated by the foregoing;
(f) the Trust Company shall not be liable with respect to any action
taken or omitted to be taken by the Administrator and the Trust
Company shall not be liable for performing or supervising the
performance of any obligations or duties under this Trust
Agreement, the Administration Agreement or the Indenture, or
under any other document contemplated hereby or thereby, which
are to be performed by the Administrator or any other Person
under such documents;
(g) the Trust Company shall not be responsible for or in respect of
the recitals herein, the validity or sufficiency of this Trust
Agreement, or for the due execution hereof by the Sponsor or the
Administrator or for the form, character, genuineness,
sufficiency, value or validity of any of the Trust Estate or for
or in respect of the validity or sufficiency of the Indenture or
any other document contemplated thereby to which the Trust
Company is not a party, and the Trust Company shall in no event
assume or incur any liability, duty or obligation to the
Trustee, the Certificateholders, or the Administrator other than
is expressly provided for herein;
(h) notwithstanding anything contained herein or in any of the
Transaction Documents to the contrary, neither the Trust Company
nor the Delaware Trustee shall be required to take any action in
any jurisdiction other than in the State of Delaware if the
taking of such action will (i) require the consent or approval
or authorization or order of or the giving of notice to, or the
registration with or taking of any action in respect of, any
state or other governmental authority or agency of any
jurisdiction other than the State of Delaware; (ii) result in
any fee, tax or other governmental charge under the laws of any
jurisdiction or any political subdivisions thereof in existence
on the date hereof other than the State of Delaware becoming
payable by the Trust Company; or (iii) subject the Trust Company
to personal jurisdiction in any jurisdiction other than the
State of Delaware for causes of action arising from acts
unrelated to the consummation of the transactions by the Trust
Company or the Delaware Trustee, as the case may be,
contemplated hereby;
(i) no provision of this Trust Agreement shall require the Trust
Company to monitor or otherwise supervise the actions or
inactions of or the performance by the Administrator or any
sub-administrators;
(j) the Delaware Trustee shall be deemed to have discharged its
duties and responsibilities hereunder and under the other
Transaction Documents to the extent the Administrator or any
other administrator has agreed in the Administration Agreement
or the related administration agreement, as applicable, to
perform any act or to discharge any duty of the Delaware Trustee
hereunder or under any other Transaction Document, and the
Delaware Trustee shall not be held liable for the default or
failure of the Administrator or any other administrator to carry
out its obligations under the Administration Agreement or
related administration agreement, as applicable;
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(k) the Delaware Trustee shall have no obligation to administer,
service or collect the Financed Eligible Loans or to maintain,
monitor or otherwise supervise the administration, servicing or
collection of the Financed Eligible Loans; and
(l) notwithstanding anything contained herein to the contrary, any
funds and assets held by the Delaware Trustee on behalf of the
Trust hereunder may be maintained and accounted for in the
record-keeping and asset custody systems utilized by the Trust
Company on behalf of the Delaware Trustee.
Section 6.02. Furnishing of Documents. The Delaware Trustee will furnish
to the Certificateholders, promptly upon receipt, duplicates or copies of all
reports, notices, requests, demands, certificates, financial statements and any
other writings furnished to the Delaware Trustee. The Delaware Trustee shall
have no duty or obligation to examine or review such items received by it.
Section 6.03. No Representations or Warranties as to Trust Estate.
Neither the Trust Company nor the Delaware Trustee makes (i) any representation
or warranty as to the title, value or merchantability of the Trust Estate or any
other representation or warranty, express or implied, with respect to the Trust
Estate whatsoever, and (ii) any representation or warranty as to the validity or
enforceability of the Transaction Documents or any other agreement contemplated
by any of the foregoing, or as to the correctness of any statement contained in
any thereof, except that the Trust Company represents and warrants to the
Certificateholders and the Administrator that this Trust Agreement and, assuming
that this Trust Agreement has been duly authorized, executed and delivered by
the Sponsor and the Administrator, each of the Transaction Documents and each
other document which contemplates execution thereof by the Delaware Trustee on
behalf of the Trust has been or will be executed and delivered by its officers
who are or will be duly authorized to execute and deliver such document on its
behalf, and that under Delaware law (excluding Delaware securities laws), this
Trust Agreement constitutes the legal, valid and binding obligation of the Trust
Company, enforceable against the Trust Company in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium and
other similar laws affecting the enforcement of creditors' rights generally and
to general principles of equity.
Section 6.04. No Segregation of Moneys; No Interest. Except as otherwise
provided herein or in written instructions from the Required Certificateholders,
moneys received by the Delaware Trustee hereunder need not be segregated in any
manner, except to the extent required by applicable law and Section 2.09 hereof,
and may be deposited under such general conditions as may be prescribed by law,
and neither the Trust Company nor the Delaware Trustee shall be liable for any
interest thereon.
Section 6.05. Reliance; Advice of Counsel. The Delaware Trustee shall
not incur any liability to anyone in acting in reliance upon any signature,
instrument, notice, resolution, request, consent, order, certificate, report,
opinion, bond, direction or other document or paper believed by it to be genuine
and believed by it to be signed by the proper party or parties. The Delaware
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Trustee may accept a copy of a resolution of the board of directors or other
governing body of any party, certified by the secretary or a senior officer
thereof, as conclusive evidence that such resolution has been duly adopted by
such body and that the same is in full force and effect. As to any fact or
matter the manner of ascertainment of which is not specifically prescribed
herein, the Delaware Trustee may for all purposes hereof rely on a certificate
of the relevant person as to such fact or matter, and such certificate shall
constitute full protection to the Delaware Trustee for any action taken,
suffered or omitted by it in good faith in reliance thereon. In the
administration of the trusts created hereby, the Delaware Trustee may execute
any of the trusts or powers hereof and perform any of its powers and duties,
including, if applicable, the holding of title to all or any part of the Trust
Estate, hereunder directly or through agents or attorneys and may consult with
counsel, accountants and other skilled persons to be selected and employed by
it, and the Delaware Trustee shall not be liable for anything done, suffered or
omitted in good faith by it in accordance with the advice or opinion within the
scope of such person's competence of any such counsel, accountants or other
skilled persons selected by it with due care.
Section 6.06. Not Acting in Individual Capacity. Except as otherwise
provided in this Article, in accepting the trusts hereby created, the Trust
Company acts solely as Delaware Trustee hereunder and not in its individual
capacity, and all persons having any claim against the Delaware Trustee by
reason of the transactions contemplated hereby and by the Indenture shall look
only to the Trust Estate (or a part thereof, as the case may be) for payment or
satisfaction thereof, but subject to the lien created by Indenture.
Section 6.07. Books and Records. The Delaware Trustee shall be
responsible for the keeping of all customary and appropriate books and records
relating to the receipt and disbursement of all money which it may receive
hereunder or under any agreement contemplated hereby.
Section 6.08. Tax Returns. The Delaware Trustee is hereby advised that
the Certificateholders intend that as long as the Trust has a single
Certificateholder, the entity created under this Trust Agreement shall be
treated for purposes of federal income tax, state and local income and franchise
taxes, and any other taxes imposed on, measured by or based upon gross or net
income, as a disregarded entity separate from its owner. However, if there is
more than one Certificateholder, the parties hereto intend that the entity
created under this Trust Agreement shall be treated as a partnership for federal
income tax purposes. The Trust shall, at the expense of the Certificateholders
pro rata based on their respective Percentage Interests, shall cause a firm of
independent public accountants selected by the Administrator to prepare any tax
returns or other forms certified by such accounting firm to be all, to the best
of such accounting firm's knowledge, of the tax returns or forms required to be
filed by the Trust; the Delaware Trustee shall cooperate with such accounting
firm in providing any information in its possession which is necessary or
advisable in the preparation of such tax returns and shall execute such tax
returns presented to it in execution form in a timely manner to enable the
Certificateholders to timely file such tax returns. The Delaware Trustee in its
capacity as Delaware Trustee shall sign all appropriate federal returns
presented to it in execution form; provided, however, that the Trust shall send
a copy of any such return and related information to a Certificateholder at such
times as the Certificateholder may request. In no event shall the Delaware
Trustee be liable for any liabilities, costs or expenses of the Trust, the
Administrator, or the Certificateholders arising out of the application of any
tax law, including federal, state, foreign or local income or excise taxes or
any other tax imposed on or measured by income (or any interest, penalty or
addition with respect thereto or arising from a failure to comply therewith)
25
except for any such liability, cost or expense attributable to any act or
omission by the Delaware Trustee, as the case may be, in breach of its
obligations under this Trust Agreement. The Delaware Trustee shall keep copies
of all returns delivered to it or filed by it. Any reports, returns, records,
filings or books, other than those customary books and records or any report or
return specifically referenced in this Section, shall be the sole responsibility
and obligation of the Administrator and the Certificateholders, and the Delaware
Trustee shall have no obligation or responsibility with respect thereto.
ARTICLE VII
ASSUMPTION OF LIABILITY AND PAYMENT
FOR DELAWARE TRUSTEE
Section 7.01. Compensation and Expenses. The Delaware Trustee shall
receive from the Trust as compensation (which shall not be limited by any
provision of law in regard to the compensation of a trustee of an express trust)
for its services hereunder such fees as may heretofore and from time to time
hereafter be agreed upon in a separate fee agreement between the Sponsor and the
Delaware Trustee. The Delaware Trustee shall be entitled to be reimbursed from
the Payments for its reasonable expenses hereunder, including, without
limitation, the reasonable compensation, expenses and disbursements of such
agents, representatives, accountants, experts and counsel as the Delaware
Trustee may employ in connection with the exercise and performance of its rights
and duties under this Trust Agreement, the Transaction Documents or any other
agreement contemplated by any of the foregoing, whether or not the transactions
contemplated hereby and thereby are consummated and to be paid as additional
reasonable compensation (which shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust) for any
extraordinary services rendered hereunder. Such compensation and reimbursement
shall be paid first from the Collection Fund created pursuant to the Indenture
to the extent and in the priority set forth in the Indenture and then from the
Payments as set forth in Section 4.01(b) hereof.
Section 7.02. Indemnification. The Trust agrees, to the fullest extent
permitted by applicable law, to assume liability for, and hereby indemnifies and
holds harmless the Trust Company, its officers, directors and employees and the
Delaware Trustee from and against any and all liabilities, obligations, losses,
damages, taxes, claims, actions, suits, costs, expenses and disbursements
(including reasonable legal fees and expenses) of any kind and nature whatsoever
which may be imposed on, incurred by or asserted at any time against the Trust
Company, its officers, directors and employees or the Delaware Trustee in any
way relating to or arising out of the Trust Estate, any of the properties
included therein, the acceptance, termination or administration of the Trust
Estate or the Trust or any action or inaction of the Delaware Trustee or the
Trust hereunder or under the Transaction Documents or any other agreement
contemplated by any of the foregoing or any certificate of a Certificateholder,
except only that the Trust shall not be required so to assume liability for any
of the matters described in the seventh sentence of Section 6.01 hereof and
provided that the Trust and the Delaware Trustee agree that such assumption of
liability for liabilities, obligations, losses, damages, taxes, claims, actions,
such costs expenses or disbursements of any kind shall be direct and primary and
not that of a guarantor. If any item assumed by the Trust under this Section is
also subject to indemnification by another party to any of the documents
specifically referenced herein, the Trust Company or the Delaware Trustee shall
26
first make demand on such party for indemnification of any such item but shall
not be obligated to exhaust its remedies thereunder. The indemnities contained
in this Section shall survive the resignation or removal of the Delaware Trustee
and shall survive the termination of the Trust and this Trust Agreement. Such
indemnification and reimbursement shall be paid solely from the Payments as set
forth in Section 4.01(b) hereof.
Section 7.03. Certificateholders To Assume Liability. To the extent not
paid pursuant to Section 4.01(b) hereof and to the fullest extent permitted by
applicable law, the Certificateholders, pro rata based on their respective
Percentage Interests, shall pay or cause to be paid (or reimburse the Delaware
Trustee for) (a) all reasonable fees and expenses of the Delaware Trustee
hereunder, including, without limitation, the reasonable compensation, expenses
and disbursements of such agents, representatives, accountants, experts and
counsel as the Delaware Trustee may employ in connection with the exercise and
performance of its rights and duties under this Trust Agreement, the Transaction
Documents or any other agreement contemplated by any of the foregoing, whether
or not the transactions contemplated hereby and thereby are consummated and (b)
all amounts required to be paid by Section 7.02 hereof and not paid by the
Trust. The liabilities and indemnities contained in this Section are for the
benefit of the Trust Company, in its individual capacity and its officers,
directors and employees and shall not be construed as imposing any liabilities
on any Certificateholder or any affiliate thereof for any expense or liability
of the Trust to third parties. Neither the Certificateholders nor the
Administrator shall have liabilities for the expenses and liabilities of the
Trust (except as otherwise provided in this Trust Agreement with respect to the
Trust Company, in its individual capacity) and all such expenses and liabilities
shall be payable solely from the Trust Estate.
ARTICLE VIII
TERMINATION OF INDENTURE
Section 8.01. Termination in General. After the termination of the
Indenture in accordance with its terms, this Trust Agreement and the Trust shall
terminate and be of no further force or effect upon the final distribution by
the Delaware Trustee of all monies or other property or proceeds of the Trust
Estate in accordance with the terms of this Trust Agreement. The bankruptcy,
liquidation, dissolution, death or incapacity of any Certificateholder shall not
(a) operate to terminate this Trust Agreement or the Trust, (b) entitle such
Certificateholder's legal representatives or heirs to claim an accounting or to
take any action or proceeding in any court for partition or winding up of all or
any part of the Trust or the Trust Estate or (c) otherwise affect the rights,
obligations and liabilities of the parties hereto. Subject to Section 8.02
hereof, none of the Certificateholders shall be entitled to revoke or terminate
the Trust.
Section 8.02. Termination at Option of Certificateholders.
Notwithstanding Section 8.01 hereof, the Trust shall dissolve and the remaining
assets of the Trust shall be distributed to the Certificateholders pro rata in
accordance with their respective Percentage Interests and the Trust Statute, and
this Trust Agreement shall be of no further force and effect, upon the election
of all of the Certificateholders by written notice to the Delaware Trustee, if
such notice shall be accompanied by the written agreement (in form and substance
satisfactory to the Delaware Trustee) of all of the Certificateholders assuming
27
all the obligations of the Trust and the Delaware Trustee and releasing the
Delaware Trustee therefrom; provided, however, that until the termination of the
Indenture in accordance with its terms and full and final payment of all
Obligations outstanding thereunder, the Certificateholders may not so terminate
this Trust Agreement or the Trust.
Section 8.03. Termination. Upon the completion of winding up of the
Trust, including the payment or the making reasonable provision for payment of
all obligations of the Trust in accordance with Section 3808(e) of the Trust
Statute, the Delaware Trustee shall file a certificate of cancellation with the
Delaware Secretary of State in accordance with Section 3810 of the Trust
Statute, at which time the Trust and this Trust Agreement (other than Article
VII hereof) shall terminate. The Administrator shall act as the liquidator of
the Trust and shall be responsible for directing the Delaware Trustee to take
all required actions in connection with winding up the Trust.
ARTICLE IX
SUCCESSOR DELAWARE TRUSTEES, CO-DELAWARE TRUSTEES
AND SEPARATE DELAWARE TRUSTEES
Section 9.01. Resignation and Successors. The Delaware Trustee or any
successor may resign at any time without cause by giving at least 60 days' prior
written notice to the Certificateholders. The Required Certificateholders, may
at any time remove the Delaware Trustee without cause by written notice to the
Delaware Trustee, any such resignation or removal to be effective upon the
acceptance of appointment by a successor Delaware Trustee as hereinafter
provided. In the event of the resignation or removal of the Delaware Trustee,
the Required Certificateholders shall appoint a successor by written instrument.
If a successor Delaware Trustee shall not have been appointed within 60 days
after the giving of such notice, the Delaware Trustee or the Required
Certificateholders may apply to any court of competent jurisdiction in the
United States to appoint a successor Delaware Trustee to act until such time, if
any, as a successor shall have been appointed as provided above. Any successor
so appointed by such court shall immediately and without further act be
superseded by any successor by the Required Certificateholders. Any successor,
however appointed, shall execute and deliver to its predecessor Delaware Trustee
an instrument accepting such appointment, and thereupon such successor, without
further act, shall become vested with all the estates, properties, rights,
powers, duties and trusts of the predecessor Delaware Trustee in the trusts
hereunder with like effect as if originally named "Delaware Trustee" herein; but
upon the written request of such successor, and upon payment to the predecessor
Delaware Trustee of all amounts due to it under this Trust Agreement, such
predecessor shall execute and deliver an instrument transferring to such
successor, upon the trusts herein expressed, all the estates, properties,
rights, powers, duties and trusts of such predecessor, and such predecessor
shall duly assign, transfer, deliver and pay over to such successor all moneys
or other property then held by such predecessor upon the trusts herein
expressed. Any right of the Certificateholders against the predecessor Delaware
Trustee, in its individual capacity, shall not be prejudiced by the appointment
of any successor Delaware Trustee and shall survive the termination of the
trusts created hereby. Any successor, however appointed, shall be a bank or a
trust company incorporated or organized and doing business within the United
States of America that is an Independent Trustee and either (a) having a
combined capital and surplus of at least $50,000,000 and being subject to
supervision or examination by federal banking authorities and (b) having (or
having its obligations hereunder guaranteed by a trust company that has) a
long-term unsecured debt rating of at least BBB- by Standard & Poor's, Baa3 by
Moody's (so long as Moody's provides a Rating on any of the Obligations) or at
least the equivalent rating from another nationally recognized statistical
rating organization, if there is such an institution willing, able and legally
qualified to perform the duties of the "Delaware Trustee" hereunder upon
reasonable or customary terms. Any corporation into which the Delaware Trustee
may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
28
Delaware Trustee shall be a party, or any corporation to which substantially all
the corporate trust business of the Delaware Trustee may be transferred, shall,
subject to the preceding sentence, be the "Delaware Trustee" under this Trust
Agreement without further act. Any successor Delaware Trustee, however
appointed, shall be competent and qualified to (i) serve as a trustee of a
Delaware statutory trust, (ii) take all action required by the Delaware Trustee
pursuant to the Transaction Documents, this Trust Agreement and any other
agreement contemplated by any of the foregoing, and (iii) until termination of
the Indenture in accordance with its terms, be an Independent Trustee. There
shall be at all times at least one "Delaware Trustee" that meets the
requirements of the laws of the State of Delaware. Notwithstanding anything
herein to the contrary, the resignation or removal of the Delaware Trustee shall
not be effective unless and until the Required Certificateholders appoint a
successor Delaware Trustee meeting the requirements specified above.
Section 9.02. Co-Delaware Trustees and Separate Delaware Trustees.
Whenever the Delaware Trustee or the Required Certificateholders shall deem it
necessary or prudent in order either to conform to any law of any jurisdiction
in which all or any part of the Trust Estate shall be situated or to make any
claim or bring any suit with respect to the Trust Estate or the Indenture, or
the Delaware Trustee or the Required Certificateholders shall be advised by
counsel satisfactory to it or them that it is so necessary or prudent, the
Delaware Trustee and the Certificateholders shall execute and deliver an
agreement supplemental hereto and all other instruments and agreements, and
shall take all other action, necessary or proper to constitute one or more
persons (and the Delaware Trustee may appoint one or more of its officers)
either as co-trustee or co-trustees jointly with the Delaware Trustee of all or
any part of the Trust Estate, or as separate trustee or separate trustees of all
or any part of the Trust Estate, and to vest in such persons, in such capacity,
such title to the Trust Estate or any part thereof and such rights or duties as
may be necessary or desirable, all for such period and under such terms and
conditions as are satisfactory to the Delaware Trustee and the Required
Certificateholders and, until the termination of the Indenture in accordance
with its terms as are reasonably satisfactory to the Trustee. In case any
co-trustee or separate trustee shall dissolve, die, become incapable of acting,
resign or be removed, the title to the Trust Estate and all rights and duties of
such co-trustee or separate trustee shall, so far as permitted by law, vest in
and be exercised by the Delaware Trustee, without the appointment of a successor
to such co-trustee or separate trustee.
Section 9.03. Changes in Identity of a Delaware Trustee. Upon the change
of identity of a Delaware Trustee or the addition or deletion of a Delaware
Trustee, whose identity is required to be disclosed under applicable law, the
Delaware Trustee or Delaware Trustees shall cause such filings to be made in
Delaware if required by the Trust Statute, and, at the direction of the
Certificateholders, shall cause such filings to be made, if any, as may be
required in accordance with the provisions of other applicable law, indicating
the change with respect to such Delaware Trustee's identity or such addition or
deletion of a Delaware Trustee.
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ARTICLE X
MISCELLANEOUS
Section 10.01. Amendment.
(a) Subject to Section 2.09(b)(x) hereof, this Trust Agreement may
be amended by a written instrument signed by the Delaware
Trustee and the Required Certificateholders to (i) cure any
ambiguity or correct any provision of the Trust Agreement or
(ii) with the consent of each Certificateholder the interests of
which in its Certificates or the Trust would be adversely
affected in any material respect thereby, supplement, add,
eliminate, or change in any manner one or more provisions of
this Trust Agreement or modify in any manner the rights of the
Certificateholders; provided, however, that such action, as
evidenced by an Opinion of Counsel, shall not adversely affect
in any material respect the interests of the Trustee, or the
Registered Owners taken as a whole, except that no such Opinion
of Counsel will be required if each rating agency then rating
any of the Notes provides prior written confirmation that the
proposed amendment will not result in the withdrawal, downgrade
or qualifications of the then current ratings of the
obligations; provided further, if in the opinion of the Delaware
Trustee any amendment adversely affects any right, duty or
liability of, or immunity or indemnity in favor of, it or the
Trust Company under this Trust Agreement, the Transaction
Documents or any of the documents contemplated hereby or thereby
to which it or the Trust is a party, or would cause or result in
any conflict with or breach of or default under any terms,
conditions or provisions of its charter documents or bylaws or
any document contemplated hereby or thereby to which it is a
party, the Delaware Trustee may in its sole discretion decline
to enter into such amendment.
(b) Promptly after the execution of any such amendment or consent,
the Trust shall furnish written notification of the substance of
such amendment or consent to each Rating Agency then rating any
of the Notes and the Certificateholders.
(c) It shall not be necessary for the consent of the
Certificateholders pursuant to this Section to approve the
particular form of any proposed amendment or consent, but it
shall be sufficient if such consent shall approve the substance
thereof. The manner of obtaining such consents (and any other
consents of the Certificateholders provided for in this Trust
Agreement) and of evidencing the authorization of the execution
thereof by the Certificateholders shall be subject to such
reasonable requirements as the Delaware Trustee may prescribe.
(d) Nothing contained in this Section shall be construed as a
delegation by a Certificateholder to the Delaware Trustee of the
right of the Certificateholder to consent to any amendment,
waiver, modification or supplement to the provisions of this
Trust Agreement.
30
(e) Prior to its execution of any amendment to this Trust Agreement,
the Delaware Trustee shall be entitled to receive an Opinion of
Counsel that such amendment is permitted by the Transaction
Documents and that all conditions precedent have been met.
Section 10.02. No Title to Trust Estate, Etc. Notwithstanding anything
herein to the contrary, and pursuant to Section 3805 of the Trust Statute, a
Certificateholder shall have only an undivided beneficial interest in the Trust
Estate. Each Certificateholder's indirect interest in the Trust Estate shall be
limited and governed in all respects by the provisions of this Trust Agreement.
The Certificateholders shall not have title to or any other interest in any part
of the Trust Estate. The Certificateholders shall be entitled to receive
distributions with respect to its individual beneficial ownership interest
herein only in accordance with this Trust Agreement. No transfer, by operation
of law or otherwise, of any right, title or interest of a Certificateholder in
and to the Trust Estate or hereunder shall operate to terminate this Trust
Agreement, the Trust or the trusts hereunder or entitle any successor or
transferee to an accounting or to the transfer to it of legal title to any part
of the Trust Estate. Any obligation of the Delaware Trustee hereunder or of the
Trust under the Indenture or any other document contemplated hereby or thereby
may be performed, under extraordinary circumstances, by one or more of the
Certificateholders and any such performance shall not be construed as a
revocation of the trusts created hereby. The Certificateholders shall not have
any liability for the performance of this Trust Agreement except as expressly
set forth herein.
Section 10.03. Sale of the Trust Estate by Delaware Trustee is Binding.
Any sale or other conveyance of the Trust Estate or any part thereof by the
Delaware Trustee made pursuant to the terms of this Trust Agreement or the
Indenture shall bind the Certificateholders and shall be effective to transfer
or convey all right, title and interest of the Trust, the Delaware Trustee and
the Certificateholders in and to the Trust Estate or such part thereof. No
purchaser or other grantee shall be required to inquire as to the authorization,
necessity, expediency or regularity of such sale or conveyance or as to the
application of any sale or other proceeds with respect thereto by the Delaware
Trustee.
Section 10.04. Limitations on Rights of Others. Except as provided in
Section 10.10 hereof, nothing in this Trust Agreement, whether express or
implied, shall be construed to give to any person other than the Trust Company,
the Delaware Trustee, the Sponsor, the Certificateholders and the Trustee any
legal or equitable right, remedy or claim under the Trust or in respect of this
Trust Agreement, any covenants, conditions or provisions contained herein.
Section 10.05. Notices, Etc. All notices, requests, demands, consents
and other communications ("Notices") required or contemplated by the provisions
hereof shall refer on their face to this Trust Agreement (although failure to do
so shall not make such Notice ineffective), shall, unless otherwise stated
herein, be in writing and sent by telecopy, telegram, cable, mail (by certified
or registered mail, return receipt requested) or by reputable overnight courier
to the following addresses:
31
if to the Delaware Trustee: Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, DE 19890
Attention: Corporate Trust Administration
Phone: (302) 651-1000
FAX: (302) 636-4140
if to the Sponsor: Nelnet Student Loan Funding, LLC
121 South 13th Street, Suite 301
Lincoln, NE 88508
Attention: Terry J. Heimes
Phone: (402) 458-2300
FAX: (402) 458-2399
if to the Trustee: To such Person and at such address as may
be specified in the Indenture.
or at such other address as shall be designated in written notice to the
Delaware Trustee by the Persons entitled to receive notices pursuant to this
Trust Agreement. All such notices shall be effective when received.
Section 10.06. Severability. Any provision of this Trust Agreement which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
Section 10.07. Separate Counterparts. This Trust Agreement may be
executed by the parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all such counterparts shall
together constitute but one and the same instrument.
Section 10.08. Successors and Assigns. All covenants and agreements
contained herein shall be binding upon and inure to the benefit of the Delaware
Trustee, the Certificateholders, the Administrator and the Trustee and their
respective successors and assigns, all as herein provided. Any request, notice,
direction, consent, waiver or other writing or action by a Certificateholder
shall bind its successors and assigns.
Section 10.09. Governing Law. This Trust Agreement shall be governed by,
and construed in accordance with, the substantive laws of the State of Delaware
(without regard to conflict of law provisions) applicable to contracts to be
performed entirely within such state, including all matters of construction,
validity and performance.
Section 10.10. No Liability of Certificateholders. Except as provided in
Sections 5.03, 6.07 and 6.08 and Article VII hereof, or in any other document,
agreement or instrument executed by the Certificateholders, neither the
Certificateholders nor the Administrator shall be liable for any losses, claims,
damages, liabilities and expenses of the Trust (including expenses, to the
extent not paid out of the Trust Estate).
32
Section 10.11. Actions by the Certificateholders. Any actions required
to be taken by the Certificateholders shall, unless otherwise specified herein,
be taken with the consent of the Certificateholders then holding a majority of
the Percentage Interests.
[Signature Page to Follow]
33
IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement
to be duly executed by their respective officers as of the day and year first
above written.
NELNET STUDENT LOAN FUNDING, LLC, as Sponsor
By: NELNET STUDENT LOAN FUNDING
MANAGEMENT CORPORATION, as
Manager and Special Member
By /s/ Jeffrey R. Noordhoek
-----------------------------------------
Jeffrey R. Noordhoek, Vice President
WILMINGTON TRUST COMPANY, in its individual
capacity and in its capacity as
Delaware Trustee
By /s/ Janel R. Havrilla
-----------------------------------------
Name: Janel R. Havrilla
--------------------------------------
Title: Financial Services Officer
-------------------------------------
34
EXHIBIT A
CERTIFICATEHOLDERS' CAPITAL CONTRIBUTIONS
Sponsor Percentage Interest
------- -------------------
Nelnet Student Loan Funding, LLC 100%
(Aggregate principal amount of Trust Estate)
TOTAL 100%
EXHIBIT B
FORM OF TRUST PAYMENT DATE STATEMENT
For the Payment Date dated __________ __, _____
Nelnet Student Loan Trust 2004-4
(1) Amount received from the Trustee under the Indenture on the Payment Date: $
------------
(2) Amount, if any, deducted pursuant to Section 4.01 of the Trust Agreement: $
------------
(a) Trust Company and Delaware Trustee
fees and expenses: $
------------
(b) Administrator fees and expenses: $
------------
Total $
------------
(3) Total amount to be remitted to Certificateholders
(Item (1) minus Item (2)): $
------------
EXHIBIT C
FORM OF CERTIFICATE
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND
LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS WHICH ARE EXEMPT FROM
REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN
ACCORDANCE WITH THE PROVISIONS OF THE TRUST AGREEMENT REFERRED TO HEREIN.
THE TRUST CERTIFICATE DOES NOT REPRESENT DEPOSITS OR OBLIGATIONS OF OR
ANY INTEREST IN THE ADMINISTRATOR OR WILMINGTON TRUST COMPANY.
Certificate No. __________
Percentage Interest evidenced by this Certificate: ___%
CERTIFICATE
Issued by Nelnet Student Loan Trust 2004-4
This Certificate (the "Certificate") is not guaranteed or insured by
any governmental agency or instrumentality and does not represent deposits or
obligations of or any interest in the Administrator or Wilmington Trust Company.
This Certificate certifies that _______________ is the registered owner
(the "Certificateholder") of the Percentage Interest evidenced by this
Certificate specified above in the Nelnet Student Loan Trust 2004-4 (the
"Trust"). The Trust was created pursuant to a Trust Agreement, dated as of
September 1, 2004 (the "Trust Agreement"), between Nelnet Student Loan Funding,
LLC, as Initial Certificateholder and Sponsor (the "Sponsor"), and Wilmington
Trust Company, as Delaware Trustee (the "Delaware Trustee"). To the extent not
defined herein, the capitalized terms used herein have the meanings assigned in
the Trust Agreement. This Certificate is issued under and is subject to the
terms, provisions and conditions of the Trust Agreement, to which Trust
Agreement the Certificateholder by virtue of the acceptance hereof assents and
by which such Certificateholder is bound.
This Certificate has not and will not be registered under the
Securities Act and will not be listed on any exchange. In addition to other
restrictions on transfer set forth in the Trust Agreement, no transfer of this
Certificate shall be made to a Person or entity unless such transfer is made
pursuant to an effective registration statement under the Securities Act and any
applicable state securities laws or is exempt from the registration requirements
under the Securities Act and such laws.
In the event that a transfer is to be made in reliance upon an
exemption from the Securities Act and state securities laws, in order to assure
compliance with the Securities Act and such laws, the Certificateholder desiring
to effect such transfer and such Certificateholder's prospective transferee
shall each certify to the Trust, the Delaware Trustee, the Administrator and the
transferring Certificateholder in writing the facts surrounding the transfer in
substantially the forms required by the Trust Agreement. Except in the case of a
transfer as to which the proposed transferee has provided a Rule 144A Letter
with respect to a Rule 144A transaction, there shall also be delivered to the
Trust an Opinion of Counsel to the effect that such transfer may be made
pursuant to an exemption from the Securities Act, which Opinion of Counsel shall
not be an expense of the Trust, the Delaware Trustee (unless it is the
transferee from whom such opinion is to be obtained) or of the Administrator.
The Certificateholder desiring to effect such a transfer shall, and does hereby
agree to, indemnify the Trust, the Delaware Trustee and the Administrator
against any liability that may result if the transfer is not so exempt or is not
made in accordance with federal and state securities laws.
No transfer, sale, pledge or other disposition of this Certificate
shall be made unless prior to such transfer, sale, pledge or other disposition,
the Trust shall have received either (i) a representation letter from the
transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Delaware Trustee, to the effect that such a transferee is
not an employee benefit plan subject to Section 406 of ERISA or Section 4975 of
the Code, or a person acting on behalf of any such plan, or (ii) in the case of
any Certificate presented for registration in the name of an employee benefit
plan subject to ERISA or Section 4975 of the Code (or comparable provisions of
any subsequent enactments), or a trustee of any such plan or any other person
acting on behalf of any such plan, an Opinion of Counsel satisfactory to the
Trust, the Delaware Trustee and the Administrator to the effect that the
purchase or holding of such Certificate will not result in the Trust or the
Trust Estate being deemed to be "plan assets" and subject to the prohibited
transaction provisions of ERISA and the Code and will not subject the Trust,
Delaware Trustee, the Administrator or the transferring Certificateholder to any
obligation in addition to those undertaken in the Trust Agreement.
Notwithstanding anything else to the contrary herein, in the event any purported
transfer of a Certificate is made without delivery of the representation letter
referred to above, such representation shall be deemed to have been made by the
transferee by its acceptance of such Certificate. In addition, any purported
transfer of a Certificate to or on behalf of an employee benefit plan subject to
ERISA or to the Code without the delivery to the Trust, the Delaware Trustee and
the Administrator of an Opinion of Counsel as described above shall be void and
of no effect.
C-2
This Certificate is one of a duly authorized issue of Certificates
representing a beneficial undivided ownership interest in the Trust created by
the Trust Agreement. This Certificate shall not be entitled to any benefit under
the Trust Agreement or be valid for any purpose unless manually countersigned by
an Authorized Officer of the Delaware Trustee.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the Trust Estate for payment hereunder and that
neither the Delaware Trustee nor the Administrator is liable to the
Certificateholders for any amount distributable under this Certificate or the
Trust Agreement, except as expressly provided in the Trust Agreement.
This Certificate does not purport to summarize the Trust Agreement and
reference is made to the Trust Agreement for the interests, rights and
limitations of rights, benefits, obligations and duties evidenced thereby, and
the rights, duties and immunities of the Delaware Trustee and the Administrator.
Pursuant to the terms of the Trust Agreement, a distribution on all
Certificates issued by the Trust will be made as provided in the Trust Agreement
to the Person in whose name such Certificates are then registered. Such
distribution will be made pro rata to the holders based on their respective
Percentage Interests.
Distributions on this Certificate shall be made by wire transfer to the
Certificateholder entitled thereto as its name appears on the Register. The
final distribution on the Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the office or agency of the
Trust specified in the notice to Certificateholders of such final distribution.
As provided in the Trust Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Register upon surrender of this Certificate for registration of transfer at the
office maintained by the Trust accompanied by a written instrument of transfer
in form satisfactory to the Trust duly executed by the Certificateholder hereof
or such Certificateholder's attorney duly authorized in writing, and thereupon
one or more new Certificates in authorized denominations and evidencing the same
aggregate ownership in the Certificates are issuable only as registered
Certificates without coupons in denominations specified in the Trust Agreement.
As provided in the Trust Agreement and subject to certain limitations therein
set forth, Certificates are exchangeable for new Certificates in authorized
denominations and evidencing the same aggregate Percentage Interest, as
requested by the Certificateholder surrendering the same.
The Trust shall keep or cause to be kept, at the office or agency
maintained pursuant to the Trust Agreement, a Register in which, subject to such
reasonable regulations as it may prescribe, the Registrar shall provide for the
registration of Certificates and of transfers and exchanges of Certificates as
herein provided.
Prior to due presentation of a Certificate for registration of
transfer, the Trust, the Delaware Trustee, the Administrator and the Registrar
may treat the Person in whose name any Certificate is registered in the Register
as the owner of such Certificate for the purpose of receiving distributions
pursuant to the Trust Agreement and for all other purposes whatsoever, and none
of the Trust, Delaware Trustee, the Administrator and the Registrar shall be
bound by any notice to the contrary.
THE TRUST AGREEMENT CONSTITUTES THE CONTRACT GOVERNING THE RIGHTS AND
OBLIGATIONS OF THE CERTIFICATEHOLDERS. THIS CERTIFICATE IS ONLY EVIDENCE OF SUCH
CONTRACT AND, AS SUCH, IS SUBJECT IN ALL RESPECT TO THE TERMS OF THE TRUST
AGREEMENT, WHICH SUPERCEDES ANY INCONSISTENT STATEMENTS IN THIS CERTIFICATE.
C-3
IN WITNESS WHEREOF, the Trust has caused this Certificate to be duly
executed.
Dated: __________, _____
Nelnet Student Loan Trust 2004-4
By: Wilmington Trust Company, not in its
individual capacity but solely in
its capacity as Delaware Trustee of the
Nelnet Student Loan Trust 2004-4:
By
Name:
Title:
This is one of the Certificates referenced in the within-mentioned Trust
Agreement:
By Authorized Signatory of Wilmington Trust Company, not in its
individual capacity but solely in its capacity as Delaware Trustee of
the Nelnet Student Loan Trust 2004-4
C-4
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto (Please print or typewrite name and address including postal
zip code of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Register of the Trust.
I (We) further direct the Delaware Trustee to issue a new Certificate
of a like denomination, to the above named assignee and deliver such Certificate
to the following address:
Dated: __________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to for the account of account number __________.
Applicable statements should be mailed to ______________________________________
This information is provided by ____________________, the assignee named above,
or ____________________, as its agent.
C-5
EXHIBIT D
FORM OF TRANSFEROR LETTER
[DATE]
[Name and Address of Addressees]
Re: Nelnet Student Loan Trust 2004-4 formed pursuant to the Trust
Agreement, dated as of September 1, 2004, between Nelnet Student
Loan Funding, LLC, as Initial Certificateholder and Sponsor, and
Wilmington Trust Company, as Delaware Trustee (the "Trust
Agreement")
In connection with our disposition of Certificates issued by the
above-referenced Trust, we certify that (a) we understand that such Certificates
have not been registered under the Securities Act of 1933, as amended (the
"Act"), and are being disposed by us in a transaction that is exempt from the
registration requirements of the Act, (b) the disposition of the Certificates is
subject to restrictions and requirements set forth in the Trust Agreement, and
(c) we have not transferred, pledged, offered, sold or otherwise disposed of any
Certificate or any interest in any Certificate to, or solicited offers to buy or
accept a transfer, pledge or other disposition of any Certificate or any
interest in any Certificate from, any person, or otherwise approved or
negotiated with any person with respect thereto, in a manner that would be
deemed, or taken any other action which would result in, a violation of Section
5 of the Act.
Very truly yours,
[NAME OF TRANSFEROR]
By
Authorized Officer
EXHIBIT E
FORM OF INVESTMENT LETTER
[DATE]
[Name and Address of Addressees]
Re: Nelnet Student Loan Trust 2004-4 formed pursuant to the Trust
Agreement, dated as of September 1, 2004, between Nelnet Student
Loan Funding, LLC, as Initial Certificateholder and Sponsor, and
Wilmington Trust Company, as Delaware Trustee (the "Trust
Agreement")
In connection with our acquisition of Certificates issued by the
above-referenced Trust, we certify that (a) we understand that the Certificates
are not being, and have not been, registered under the Securities Act of 1933,
as amended (the "Act"), or any state securities laws and are being, and are
required to be, transferred to us in a transaction that is exempt from the
registration requirements of the Act and any such laws, (b) we are an
"accredited investor," as defined in Regulation D under the Act, and have such
knowledge and experience in financial and business matters that we are capable
of evaluating the merits and risks of investments in the Certificates and based
upon our present and projected net income and net worth, we believe that we can
bear the economic risk of an immediate or future loss of its entire investment
in the Certificates, (c) we have had the opportunity to ask questions of and
have receive answers from the Trust, the Delaware Trustee, the Administrator and
the transferring Certificateholder concerning the Trust and the purchase of the
Certificates and all matters relating thereto or any additional information
deemed necessary to our decision to purchase the Certificates, (d) we are
acquiring the Certificates for investment for our own account and not with a
view to any distribution of such Certificates (but without prejudice to our
right at all times to sell or otherwise dispose of the Certificates in
accordance with clause (h) below), (e) we have not transferred, pledged,
offered, sold or otherwise disposed of any Certificate or any interest in any
Certificate to, or solicited offers to buy or accept a transfer, pledge or other
disposition of any Certificate or any interest in any Certificate from, any
person, or otherwise approached or negotiated with any person with respect
thereto, in a manner that would be deemed, or taken any other action which would
result in, a violation of Section 5 of the Act, nor have we authorized or will
authorize any person to act in such manner with respect to any Certificate or
any interest in any Certificate, (f) we are not prohibited from purchasing the
Certificates pursuant to the Trust Agreement, (g) we have reviewed and are
familiar with the form of the Certificates, including, without limitation, the
legends thereon, and (h) we will not sell, transfer or otherwise dispose of any
Certificates unless (i) such sale, transfer or other disposition is made
pursuant to an effective registration statement under the Act or is exempt from
such registration requirements, (ii) we have provided at our expense such
opinions of counsel (A) requested by the Delaware Trustee as are satisfactory to
the Delaware Trustee or (B) as are required by the Trust Agreement, (ii) the
purchaser or transferee of such Certificate has executed and delivered to you a
Letter to substantially the same effect as this Letter, and (iii) the purchaser
or transferee has otherwise complied with any conditions for transfer set forth
in the Trust Agreement.
Capitalized terms used in this Letter, and not defined herein shall
have the meanings set forth in the Trust Agreement.
Very truly yours,
[NAME OF TRANSFEREE]
By
Authorized Officer
E-2
EXHIBIT F
FORM OF RULE 144A LETTER
[DATE]
[Name and Address of Addressees]
Re: Nelnet Student Loan Trust 2004-4 formed pursuant to the Trust
Agreement, dated as of September 1, 2004, between Nelnet Student
Loan Funding, LLC, as Initial Certificateholder and Sponsor, and
Wilmington Trust Company, as Delaware Trustee (the "Trust
Agreement")
In connection with our disposition of Certificates issued by the above
referenced Trust, we certify that (a) we understand that the Certificates are
not being registered under the Securities Act of 1933, as amended (the "Act"),
or any state securities laws and are being transferred to us in a transaction
that is exempt from the registration requirements of the Act and any such laws,
(b) we have had the opportunity to ask questions of and receive answers from the
Delaware Trustee, the Administrator and the transferring Certificateholder
concerning the purchase of the Certificates and all matters relating thereto or
any additional information deemed necessary to our decision to purchase the
Certificates, (c) we are not prohibited from acquiring the Certificates pursuant
to the Trust Agreement, (d) we have not, nor has anyone acting on our behalf
offered, transferred, pledged, sold or otherwise disposed of the Certificates or
any interest in the Certificates to, or solicited any offer to buy or accept a
transfer, pledge or other disposition of the Certificates or any interest in the
Certificates from, or otherwise approached or negotiated with respect to the
Certificates, any interest in the Certificates or any other similar security
with, any person in any manner, or made any general solicitation by means of
general advertising or in any other manner, or taken any other action, that
would constitute a distribution of the Certificates under the Securities Act or
that would render the disposition of the Certificates a violation of Section 5
of the Securities Act or require registration pursuant thereto, nor will act,
nor has authorized or will authorize any person to act, in such manner with
respect to the Certificates, (e) we are a "qualified institutional buyer" as
that term is defined in Rule 144A under the Securities Act and have completed
either of the forms of certification to that effect attached hereto as Annex 1
or Annex 2. We are aware that the sale to us is being made in reliance on Rule
144A. We are acquiring the Certificates for our own account or for resale
pursuant to Rule 144A and further, understand that such Certificates may be
resold, pledged or transferred only (i) to a person reasonably believed to be a
qualified institutional buyer that purchases for its own account or for the
account of a qualified institutional buyer to whom notice is given that the
resale, pledge or transfer is being made in reliance on Rule 144A, or
(ii) pursuant to a registration, or another exemption from registration, under
the Securities Act and in compliance with the requirements and restrictions set
forth in the Trust Agreement.
Very truly yours,
[NAME OF TRANSFEREE]
By
Authorized Officer
F-2
ANNEX 1 TO EXHIBIT F
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Letter to which this certification
relates with respect to the Certificates described therein:
i. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
ii. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned
and/or invested on a discretionary basis $__________/1 in securities (except for
the excluded securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance with Rule 144A)
and (ii) the Buyer satisfies the criteria in the category marked below.
Corporation, etc. The Buyer is a corporation (other
than a bank, savings and loan association or similar
institution), Massachusetts or similar statutory trust,
partnership, or charitable organization described in Section
501(c)(3) of the Internal Revenue Code of 1986, as amended.
Bank. The Buyer (a) is a national bank or banking
institution organized under the laws of any State, territory
or the District of Columbia, the business of which is
substantially confined to banking and is supervised by the
State or territorial banking commission or similar official or
is a foreign bank or equivalent institution, and (b) has an
audited net worth of at least $25,000,000 as demonstrated in
its latest annual financial statements, a copy of which is
attached hereto.
Savings and Loan. The Buyer (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution, which is
supervised and examined by a State or Federal authority having
supervision over any such institutions or is a foreign savings
and loan association or equivalent institution and (b) has an
audited net worth of at least $25,000,000 as demonstrated in
its latest annual financial statements, a copy of which is
attached hereto.
Broker-dealer. The Buyer is a dealer registered
pursuant to Section 15 of the Securities Exchange Act of
1934.
/1 Buyer must own and/or invest on a discretionary basis at least $100,000,000
in securities unless Buyer is a dealer, and, in that case, Buyer must own and/or
invest on a discretionary basis at least $10,000,000 in securities.
Insurance Company. The Buyer is an insurance company
whose primary and predominant business activity is the writing
of insurance or the reinsuring of risks underwritten by
insurance companies and which is subject to supervision by the
insurance commissioner or a similar official or agency of a
State, territory or the District of Columbia.
State or Local Plan. The Buyer is a plan established
and maintained by a State, its political subdivisions, or any
agency or instrumentality of the State or its political
subdivisions, for the benefit of its employees.
ERISA Plan. The Buyer is an employee benefit plan
within the meaning of Title I of the Employee Retirement
Income Security Act of 1974.
Investment Advisor. The Buyer is an investment
advisor registered under the Investment Advisors Act of 1940.
Small Business Investment Company. Buyer is a small
business investment company licensed by the U. S. Small
Business Administration under Section 301(c) or (d) of the
Small Business Investment Act of 1958.
Business Development Company. Buyer is a business
development company as defined in Section 202(a)(22) of the
Investment Advisors Act of 1940.
iii. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer, (ii) securities that
are part of an unsold allotment to or subscription by the Buyer, if the Buyer is
a dealer, (iii) securities issued or guaranteed by the U. S. or any
instrumentality thereof, (iv) bank deposit notes and certificates of deposit,
(v) loan participations, (vi) repurchase agreements, (vii) securities owned but
subject to a repurchase agreement and (viii) currency, interest rate and
commodity swaps.
iv. For purposes of determining the aggregate amount of
securities owned and/or invested on a discretionary basis by the Buyer, the
Buyer used the cost of such securities to the Buyer and did not include any of
the securities referred to in the preceding paragraph, except (i) where the
Buyer reports its securities holdings in its financial statements on the basis
of their market value, and (ii) no current information with respect to the cost
of those securities has been published. If clause (ii) above in the preceding
sentence applies, the securities may be valued at market. Further, in
determining such aggregate amount, the Buyer may have included securities owned
by subsidiaries of the Buyer, but only if such subsidiaries are consolidated
with the Buyer in its financial statements prepared in accordance with generally
accepted accounting principles and if the investments of such subsidiaries are
managed under the Buyer's direction. However, such securities were not included
if the Buyer is a majority-owned, consolidated subsidiary of another enterprise
and the Buyer is not itself a reporting company under the Securities Exchange
Act of 1934, as amended.
F-1-2
v. The Buyer acknowledges that it is familiar with Rule 144A
and understands that the seller to it and other parties related to the
Certificates are relying and will continue to rely on the statements made herein
because one or more sales to the Buyer may be in reliance on Rule 144A.
vi. Until the date of purchase of the Rule 144A Securities,
the Buyer will notify each of the parties to which this certification is made of
any changes in the information and conclusions herein. Until such notice is
given, the Buyer's purchase of the Certificates will constitute a reaffirmation
of this certification as of the date of such purchase. In addition, if the Buyer
is a bank or savings and loan is provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.
Print Name of Buyer
By:
Name:
Title:
Date:
F-1-3
ANNEX 2 TO EXHIBIT F
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees That are Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Letter to which this certification
relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
adviser to such Family of Investment Companies.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, as
amended and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year. For purposes of determining the amount of securities owned by the
Buyer or the Buyer's Family of Investment Companies, the cost of such securities
was used, except (I) where the Buyer or the Buyer's Family of Investment
Companies reports its securities holdings in its financial statements on the
basis of their market value, and (II) no current information with respect to the
cost of those securities has been published. If clause (II) in the preceding
sentence applies, the securities may be valued at market.
The Buyer owned $_______ in securities (other than the
excluded securities referred to below) as of the end of the Buyer's
most recent fiscal year (such amount being calculated in accordance
with Rule 144A).
The Buyer is part of a Family of Investment Companies which
owned in the aggregate $_______ in securities (other than the excluded
securities referred to below) as of the end of the Buyer's most recent
fiscal year (such amount being calculated in accordance with Rule
144A).
3. The term "Family of Investment Companies" as used herein means two
or more registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i) securities
of issuers that are affiliated with the Buyer or are part of the Buyer's Family
of Investment Companies, (ii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iii) bank deposit notes and certificates of deposit,
(iv) loan participations, (v) repurchase agreements, (vi) securities owned but
subject to a repurchase agreement and (vii) currency, interest rate and
commodity swaps.
5. The Buyer is familiar with Rule 144A and understands that the
parties listed in the Rule 144A Transferee Letter to which this certification
relates are relying and will continue to rely on the statements made herein
because one or more sales to the Buyer will be in reliance on Rule 144A. In
addition, the Buyer will only purchase for the Buyer's own account.
6. Until the date of purchase of the Certificates, the undersigned will
notify the parties listed in the Rule 144A Transferee Letter which this
certification relates of any changes in the information and conclusions herein.
Until such notice is given, the Buyer's purchase of the Certificates will
constitute a reaffirmation of this certification by the undersigned as of the
date of such purchase.
Print Name of Buyer or Adviser
By:
Name:
Title:
IF AN ADVISER:
Print Name of Buyer
Date:
F-2-2
EXHIBIT 99.1
LOAN PURCHASE AGREEMENT
This Loan Purchase Agreement (the "Loan Purchase Agreement") made and
entered into as of this 1st day of September, 2004, by and between Nelnet
Student Loan Trust 2004-4, a Delaware statutory trust (the "Purchaser") acting
by and through Zions First National Bank, not individually but as eligible
lender trustee (the "Trustee") under the Eligible Lender Trust Agreement (as
defined herein) and Nelnet Student Loan Funding, LLC, a limited liability
company organized and existing under the laws of the State of Delaware and
having its principal offices at 121 South 13th Street, Suite 201, in the city of
Lincoln, County of Lancaster, State of Nebraska, acting by and through Zions
First National Bank, not individually, but as eligible lender trustee (the
"Seller").
W I T N E S S E T H :
WHEREAS, the Purchaser, by and through the Trustee, desires to purchase
from the Seller certain FFELP Loans (as defined below) to assist students in
obtaining a post-secondary education, title to which will be held by the Trustee
pursuant to the Eligible Lender Trust Agreement, and the Seller desires to sell
certain FFELP Loans to the Purchaser, title to which will be held by and through
the Trustee, in accordance with the terms and conditions of this Loan Purchase
Agreement.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties agree as follows:
Section 1. Definitions.
"Borrower" means the student or parent obligor under an Eligible Loan.
"Certificate of Insurance" means a certificate of federal loan
insurance issued with respect to an Eligible Loan by the Secretary of Education
pursuant to the provisions of the Higher Education Act.
"Contract of Insurance" means an agreement between the Secretary of
Education and either the Trustee or the Seller providing for the insurance by
the Secretary of Education of the principal of and accrued interest on a FFELP
Loan to the maximum extent permitted under the Higher Education Act.
"Eligible Lender Trust Agreement" means the Eligible Lender Trust
Agreement dated as of July 1, 2004, between the Trustee and the Purchaser, as
the same may be amended, modified, supplemented, restated or otherwise altered.
"Eligible Loan" means a FFELP Loan authorized to be acquired by the
Purchaser by and through the Trustee which (i) is either Insured or Guaranteed;
(ii) if such FFELP Loan is a subsidized Stafford loan, qualifies the holder
thereof to receive Interest Subsidy Payments and Special Allowance Payments; if
such FFELP Loan is a consolidation loan authorized under Section 428C of the
Higher Education Act, qualifies the holder thereof to receive Interest Subsidy
Payments and Special Allowance Payments to the extent applicable; and if such
1
FFELP Loan is a PLUS loan authorized under Section 428B of the Higher Education
Act, a SLS loan authorized under Section 428A of the Higher Education Act, or an
unsubsidized Stafford loan authorized under Section 428H of the Higher Education
Act, such FFELP Loan qualifies the holder thereof to receive Special Allowance
Payments; (iii) complies with each representation and warranty with respect
thereto contained herein; and (iv) meets the other criteria set forth in the
Loan Purchase Regulations and is eligible for purchase under the terms of the
Financing Agreement.
"Federal Contracts" means all agreements 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 limited to, reimbursement of amounts paid or payable upon
defaulted Eligible Loans and other student loans insured or guaranteed by any
Guarantee Agency and federal interest subsidy payments and Special Allowance
Payments, if applicable, to holders of qualifying student loans guaranteed by
any Guarantee Agency.
"FFELP Loans" means those specific loans acquired by the Trustee, on
behalf of the Purchaser, from the Seller pursuant to this Loan Purchase
Agreement, inclusive of the promissory notes evidencing such loans and the
related documentation in connection with each thereof, which were originated
pursuant to the Federal Family Education Loan Program and the Higher Education
Act.
"Financing Agreement" means the Indenture of Trust, dated as of
September 1, 2004, by and between the Purchaser and the Indenture Trustee, as
the same may be amended, modified, supplemented, restated or otherwise altered,
which is utilized to finance the Purchaser's purchase of the FFELP Loans under
this Loan Purchase Agreement.
"Guarantee" or "Guaranteed" means, with respect to a FFELP Loan, the
guarantee by the Guarantee Agency, in accordance with the terms and conditions
of the Guarantee Agreement, of the principal of and accrued interest on the
FFELP Loan to the maximum extent permitted under the Higher Education Act on
FFELP Loans which have been originated, held and serviced in full compliance
with the Higher Education Act, and the coverage of the FFELP Loan by the Federal
Contracts providing, among other things, for reimbursement to the Guarantee
Agency for losses incurred by it on defaulted Eligible Loans guaranteed by it to
the extent of the maximum reimbursement allowed by the Federal Contracts.
"Guarantee Agency" means a state agency or a private nonprofit
institution or organization which administers a Guarantee Program within a State
or any successors and assignees thereof administering the Guarantee Program
which has entered into a Guarantee Agreement with the Trustee on behalf of the
Purchaser.
"Guarantee Agreement" means the Federal Contracts, an agreement between
a Guarantee Agency and either the Trustee or the Seller providing for the
Guarantee by such Guarantee Agency of the principal of and accrued interest on
Eligible Loans to Borrowers, made or acquired by the Trustee or the Seller from
time to time, and any other similar guarantee or agreement issued by a Guarantee
Agency to the Purchaser or the Trustee pertaining to Financed Eligible Loans.
2
"Guaranteed Loans" means FFELP Loans that are Guaranteed.
"Guarantee Program" means a Guarantee Agency's student loan guaranty
program pursuant to which such Guarantee Agency guarantees or insures student
loans.
"Higher Education Act" shall mean Title IV, Parts B, F and G, of the
Higher Education Act of 1965, as amended or supplemented and in effect from time
to time, or any successor enactment thereto, and all regulations promulgated
thereunder and any directives issued by the Secretary of Education.
"Indenture Trustee" means Zions First National Bank acting in its
capacity as indenture trustee under the Financing Agreement, and not in its
individual capacity.
"Insurance" or "Insured" or "Insuring" means, with respect to a FFELP
Loan, the insuring by the Secretary of Education (as evidenced by a Certificate
of Insurance or other document or certification issued under the provisions of
the Higher Education Act) under the Higher Education Act of the principal of and
accrued interest on such FFELP Loan to the maximum extent permitted under the
Higher Education Act for FFELP Loans originated, held and serviced in full
compliance with the Higher Education Act.
"Insured Loans" means FFELP Loans which are Insured.
"Interest Subsidy Payments" means interest subsidy payments received
from the Secretary of Education pursuant to Section 428 of the Higher Education
Act or similar payments authorized by federal law or regulation.
"Loan Purchase Agreement" means this Loan Purchase Agreement including
all exhibits and schedules attached hereto, and any addenda, supplements or
amendments hereto.
"Loan Purchase Date" means the date as described in Section 2(b)
hereof.
"Loan Purchase Regulations" means the rules and regulations of the
Purchaser, as may be adopted by the Purchaser from time to time (with the
consent of any persons required under the terms of the Financing Agreement),
which pertain to the Program, which shall incorporate all requirements specified
in any indentures or other financing arrangements to which the Purchaser is
subject.
"Loan Transfer Schedule" means a written schedule on a form provided by
the Purchaser or its servicing agent identifying the Borrower on the FFELP Loans
to be purchased hereunder.
"Master Note" means a Master Promissory Note in the form mandated by
Section 432(m)(1)(D) of the Higher Education Act, as added by Pub. L. 105-244,
ss. 427,112 Stat. 1702 (1998) as amended by Public Law No: 106-554 (enacted
December 21, 2000) and as codified at 20 U.S.C. ss. 1082(m)(1).
3
"MPN Loan" means a FFELP Loan evidenced by a Master Note.
"Program" means the Purchaser's Eligible Loan acquisition program under
which the Trustee will acquire Eligible Loans to assist students in obtaining a
post-secondary education.
"Purchaser" means Nelnet Student Loan Trust 2004-4, a Delaware
statutory trust.
"Secretary of Education" means the Commissioner of Education 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 officer, board, body, commission or agency
succeeding to the functions thereof under the Higher Education Act.
"Seller" means Nelnet Student Loan Funding, LLC, a Delaware limited
liability company, which is performing this Loan Purchase Agreement by and
through its eligible lender trustee which is an "eligible lender" under the
criteria established by the Higher Education Act that has received an eligible
lender designation by the Secretary of Education with respect to Insured Loans
or from a Guarantee Agency with respect to Guaranteed Loans, identified in the
introduction to this Loan Purchase Agreement, which is selling FFELP Loans to
the Purchaser hereunder.
"Special Allowance Payments" means special allowance payments
authorized to be made by the Secretary of Education pursuant to Section 438 of
the Higher Education Act or similar allowances authorized from time to time by
federal law or regulation.
"Trustee" means Zions First National Bank acting in its capacity as
eligible lender trustee under the Eligible Lender Trust Agreement, and not in
its individual capacity.
Section 2. Purchase of FFELP Loans.
(a) Subject to the terms and conditions and in reliance upon
the representations, warranties and agreements set forth herein, the
Seller agrees to sell to the Trustee, acting on behalf of the
Purchaser, and the Purchaser, acting by and through the Trustee under
the Eligible Lender Trust Agreement on behalf of the Purchaser, agrees
to buy from the Seller, a portfolio of FFELP Loans which are Eligible
Loans in the aggregate unpaid principal amount as set forth in the Loan
Transfer Addendum in the form set forth in Exhibit A hereto. Additional
portfolios of FFELP Loans may be purchased from the Seller hereunder by
the Purchaser by and through the Trustee from time to time in the
future, if the parties hereto execute and deliver a subsequent Loan
Transfer Addendum for each such purchase of a portfolio in the form set
forth in Exhibit A hereto, reflecting the aggregate unpaid principal
balance of Eligible Loans contained in such portfolio and the Loan
Purchase Date, and if the Seller executes and delivers to the Purchaser
all documents required under Section 4 hereof as of the applicable Loan
4
Purchase Date. Any subsequent purchase of an additional portfolio of
FFELP Loans shall be governed in all respects by this Loan Purchase
Agreement together with the Loan Transfer Addendum pertaining to such
portfolio. The Seller shall deliver a Loan Transfer Schedule to the
Purchaser, not less than five (5) days prior to the applicable Loan
Purchase Date. Consummation of the sale of each FFELP Loan shall
require execution and delivery to the Purchaser of the Seller's Closing
Certificate in the form of Exhibit B hereto (and delivery of the
documents described in Exhibit B hereto), the blanket endorsement and
bill of sale as well as execution and delivery by the Seller in the
forms set forth in Exhibits C and D hereto, respectively. It is the
intention of the Seller that the transfer from the Seller to the
Trustee on behalf of the Purchaser constitutes a true sale of the FFELP
Loans hereunder and that neither the interest in nor title to the FFELP
Loans shall become or be deemed property of the Seller for any purpose
under applicable state or federal law.
(b) Delivery and payment for the FFELP Loans shall take place
at a location and on a date (the "Loan Purchase Date") to be specified
by the Purchaser. The applicable Loan Purchase Date shall not be later
than the date set forth in the Loan Transfer Addendum pertaining to
such FFELP Loans.
(c) Subject to the terms and conditions of this Loan Purchase
Agreement, the Purchaser agrees to purchase the FFELP Loans by and
through the Trustee at a price equal to 100.0% of the outstanding
unpaid principal amount thereof on the Loan Purchase Date with proceeds
from the obligations issued pursuant to the Financing Agreement, or
such other amount agreed upon and specified in the Loan Transfer
Addendum as set forth in Exhibit A. The Seller shall be responsible for
reporting to the Secretary of Education and, if required by the
provisions of the Higher Education Act, offsetting against Interest
Subsidy Payments and Special Allowance Payments made to the Seller by
the Secretary of Education the entire amount of any origination fee
which is authorized to be charged by the Higher Education Act with
respect to the FFELP Loans sold hereunder. Additionally, the Seller
shall, as a condition to the purchase by the Purchaser of any FFELP
Loan, be required to pay to the Purchaser on the Loan Purchase Date the
amount of any such origination fee which has not at that time been used
to offset such Special Allowance Payments or Interest Subsidy Payments,
to the extent that the Special Allowance Payments or Interest Subsidy
Payments received by the Trustee in connection with such FFELP Loans
shall be affected. Seller shall continue due diligence servicing in
compliance with the Higher Education Act, at Seller's cost, up to the
applicable Loan Purchase Date; thereafter, servicing shall be paid for
by, and shall be the responsibility of, the Purchaser.
5
(d) Subject to the terms and conditions of this Loan Purchase
Agreement, Seller shall sell to the Purchaser, by and through the
Trustee, all Eligible Loans made to the same Borrower(s) which are held
by or on behalf of Seller (serial loans).
(e) If Seller originates or purchases a FFELP Loan which is a
consolidation loan under Section 428C of the Higher Education Act, and
the proceeds of such consolidation loan are used to repay the principal
and interest due on a FFELP Loan sold by Seller to the Purchaser
hereunder, then Seller shall rebate the premiums paid by the Purchaser
to Seller in connection with the purchase of said FFELP Loan by paying
to the Purchaser an amount equal to the same percentage of the
principal balance of said FFELP Loan then outstanding as was originally
paid by the Purchaser therefor.
Section 3. Representations, Warranties, Covenants and Agreements of the
Seller.
(a) With respect to FFELP Loans sold on a Loan Purchase Date,
the Seller hereby makes the representations and warranties set forth in
Exhibit E hereto as of such Loan Purchase Date. Each representation,
warranty, certification, covenant and agreement contained in this Loan
Purchase Agreement shall survive the applicable Loan Purchase Date.
(b) The Seller shall not organize under the law of any
jurisdiction other than the State under which it is organized as of the
Closing Date (whether changing its jurisdiction of organization or
organizing under an additional jurisdiction) without giving 30 days
prior written notice of such action to the Purchaser. Before effecting
such change, the Seller shall prepare and file in the appropriate
filing office any financing statements or other statements necessary to
continue the perfection of the Purchaser's interests in the FFELP
Loans.
Section 4. Conditions of Purchase. The Purchaser's obligation to
purchase and pay for the FFELP Loans hereunder by and through the Trustee as of
any applicable Loan Purchase Date shall be subject to each of the following
conditions precedent:
(a) All representations, warranties and statements by or on
behalf of the Seller contained in this Loan Purchase Agreement shall be
true on the applicable Loan Purchase Date.
(b) Any notification to or approval by the Secretary of
Education or a Guarantee Agency required by the Higher Education Act or
a Guarantee Agreement as a condition to the assignment of the FFELP
Loans shall have been made or received and evidence thereof delivered
to the Purchaser.
(c) The entire interest of the Seller in each FFELP Loan shall
have been duly assigned by endorsement in the form set forth in Exhibit
C hereto, such endorsement to be without recourse except as provided in
Section 6 hereof.
6
(d) Physical custody and possession of the FFELP Loans
(including all information and documentation which is described in the
Seller's Closing Certificate as specified in Exhibit B hereto) shall be
transferred in the manner directed by the Purchaser.
(e) The Purchaser shall receive an opinion of the Seller's
counsel, dated as of the first Loan Purchase Date covering such first
sale and any other sale of FFELP Loans, in form and substance
satisfactory to the Purchaser and the Trustee to the effect that (i)
this Loan Purchase Agreement has been duly authorized, executed and
delivered by the Seller and constitutes the legal, valid, binding and
enforceable obligation of the Seller, (ii) the blanket endorsement and
bill of sale required by this Loan Purchase Agreement have been duly
authorized, executed and delivered by the Seller, (iii) with respect to
all Insured Loans being acquired, the applicable Contract of Insurance
has been duly authorized, executed and delivered by the Seller, (iv)
with respect to all Guaranteed Loans being acquired, the applicable
Guarantee Agreement has been duly authorized, executed and delivered by
the Seller, and (v) assuming the due execution and delivery thereof,
each FFELP Loan constitutes the legal, valid and binding obligation of
the Borrower (and of each endorser, if any) thereof, enforceable in
accordance with its terms, (vi) to the knowledge of the Seller's
counsel, the execution and delivery of this Loan Purchase Agreement,
the consummation of the transactions therein contemplated and
compliance with the terms, conditions and provisions of this Loan
Purchase Agreement do not and will not conflict with or result in a
breach of any of the terms, conditions or provisions of the charter,
articles or bylaws of the Seller or any agreement or instrument to
which the Seller is a party or by which it is bound or constitute a
default thereunder, (vii) to the knowledge of the Seller's counsel, the
Seller is not a party to or bound by any agreement or instrument or
subject to any charter or other corporation restriction or judgment,
order, writ, injunction, decree, law, rule or regulation which may
materially and adversely affect the ability of the Seller to perform
its obligations under this Loan Purchase Agreement, (viii) no consent,
approval or authorization of any government or governmental body,
including, without limitation, the Federal Deposit Insurance
Corporation ("FDIC"), the Comptroller of the Currency, the Board of
Governors of the Federal Reserve System or any state bank regulatory
agency, is required in connection with the consummation of the
transactions contemplated in this Loan Purchase Agreement, (ix) this
Loan Purchase Agreement shall constitute a security agreement under
Nebraska law and shall be effective to create, in favor of the
Purchaser, a perfected valid security interest in the FFELP Loans
subject to no prior liens, (x) if the Purchaser and the Seller are
affiliates, that if the Seller became a debtor under the United States
Bankruptcy Code, 11 U.S.C. ss.ss. 101 et seq., as amended (the
7
"Bankruptcy Code"), (1) Section 541(a)(1) of the Bankruptcy Code would
not apply to deem the FFELP sold by the Seller to the Purchaser and the
proceeds therefrom as property of the bankruptcy estate of the Seller
and therefore (2) Section 362(a) of the bankruptcy Code would not apply
to stay payment to the Purchaser or its assignees, (xi) if the Seller
is the parent of the Purchaser, if the Seller became a debtor under the
Bankruptcy Code, a court would not disregard the separate identity of
the Purchaser so that the assets of the Seller would be consolidated
with and become a part of the Seller's bankruptcy estate, and (xii) if
the Seller is a bank or savings association the deposits of which are
insured by the FDIC (a "Bank") and the FDIC were appointed as receiver
or conservator of such Bank, a court would not recharacterize the
transfer and assignment of the FFELP Loans to the Borrower as a pledge
to secure a borrowing rather than a sale of the FFELP Loans.
(f) Delivery by the Seller to the Purchaser on or before the
applicable Loan Purchase Date of the following documentation: Seller's
Closing Certificate in the form of Exhibit B hereto; blanket
endorsement in the form of Exhibit C hereto; bill of sale in the form
of Exhibit D hereto; UCC-1 Financing Statements evidencing the transfer
from the Seller to the Trustee on behalf of the Purchaser, and UCC lien
searches sufficiently in advance of the Loan Purchase Date so as to
permit review thereof by the Purchaser to its satisfaction, if either
or both are requested by the Purchaser or a party to the Financing
Agreement; and UCC termination statements or releases, if any, to the
extent necessary to release any security interest granted by the Seller
in any FFELP Loan.
(g) Delivery by the Seller to the Purchaser, prior to the Loan
Purchase Date, of a fully executed and completed Loan Transfer Addendum
substantially in the form of Exhibit A hereto with respect to FFELP
Loans referred to in the bill of sale, and delivery of a Loan Transfer
Schedule as required in Section 2(a) hereof.
(h) Adequate funds are available to the Purchaser to finance
the purchase of FFELP Loans under this Loan Purchase Agreement.
(i) Delivery by the Seller of a closing certificate dated as
of the date of the first sale of FFELP Loans hereunder in form and
substance satisfactory to the Purchaser and Trustee and a certificate
dated as of the date of the first sale of FFELP Loans hereunder of the
certificates attached to the true sale/non-consolidation opinion and
the perfection opinion of Kutak Rock LLP, each dated September ___,
2004.
Section 5. Rejection of FFELP Loans.
(a) If (i) the Seller is unable to make or furnish the
representations and warranties required to be made or furnished by it
pursuant to this Loan Purchase Agreement as to a FFELP Loan or (ii) the
Purchaser determines that the Seller is unable to fulfill one or more
covenants or conditions of this Loan Purchase Agreement as to a FFELP
Loan, or (iii) the Purchaser, in its reasonable judgment, deems that a
FFELP Loan does not comply with the terms and conditions of this Loan
Purchase Agreement or is not being delivered in compliance with such
terms and conditions, or (iv) the Purchaser, in its reasonable judgment
deems that a FFELP Loan is for any reason unacceptable to it, then the
Purchaser, within thirty days of the Loan Purchase Date, may refuse to
accept and pay for such FFELP Loan (or any substitute FFELP Loan
offered by the Seller in lieu thereof).
8
(b) If the Purchaser rejects a FFELP Loan, any such FFELP Loan
shall be returned to the Seller by registered mail (for repurchase
pursuant to Section 6 hereof if the student loan has previously been
purchased by the Purchaser), together with a letter identifying each
returned FFELP Loan and stating the basis for its return. The Purchaser
shall cause any FFELP Loan returned to the Seller which has been
endorsed to the Trustee to be endorsed by the Trustee to the Seller in
the form set forth in Exhibit F hereto.
The liability of the Purchaser in connection with the loss of or damage
to any FFELP Loan to be returned to the Seller is limited to such loss or damage
occurring as a result of its gross negligence or willful misconduct in handling
or safekeeping FFELP Loans.
Section 6. Repurchase Obligation. If:
(i) any representation or warranty made or furnished by
the Seller in or pursuant to this Loan Purchase Agreement shall
prove to have been materially incorrect;
(ii) the Secretary of Education or a Guarantee Agency,
as the case may be, refuses to honor all or part of a claim
filed with respect to a FFELP Loan (including any claim for
Interest Subsidy Payments, Special Allowance Payments,
Insurance, reinsurance or Guarantee payments) on account of any
circumstance or event that occurred prior to the sale of such
FFELP Loan to the Purchaser by and through the Trustee;
(iii) on account of any circumstance or event that
occurred prior to the sale of a FFELP Loan to the Purchaser, by
and through the Trustee, a defense is asserted by a Borrower (or
endorser, if any) of the FFELP Loan with respect to Borrower's
obligation to pay all or any part of the FFELP Loan, and the
Purchaser, in good faith, believes that the facts reported, if
true, raise a reasonable doubt as to the legal enforceability of
such FFELP Loan;
(iv) a FFELP Loan is required to be repurchased pursuant
to subsection 5(b) hereof; or
(v) the instrument which Seller purports to be a FFELP
Loan is not, in fact, a FFELP Loan;
9
then the Seller shall repurchase such FFELP Loan or purported FFELP Loan upon
the request of the Purchaser by paying to the Purchaser the then outstanding
principal balance of such FFELP Loan or purported FFELP Loan multiplied by the
percentage used to calculate the purchase price in the applicable Loan Transfer
Addendum (or such greater amount as may be necessary to make the Purchaser and
the Trustee whole in light of the purchase price originally paid by the
Purchaser for such loan), plus interest and applicable Special Allowance
Payments with respect to such FFELP Loan or purported FFELP Loan from the Loan
Purchase Date to and including the date of repurchase, plus any amounts owed to
the Secretary of Education with respect to the repurchased FFELP Loan or
purported FFELP Loan, plus any attorneys' fees, legal expenses, court costs,
servicing fees or other expenses incurred by the Purchaser and the Trustee in
connection with such FFELP Loan or purported FFELP Loan.
Section 7. Notification to Borrowers. The servicing agent on behalf of
the Seller shall notify Borrowers under the FFELP Loans as required by the
Higher Education Act of the assignment and transfer to the Trustee of the
Seller's interest in such FFELP Loans and the Seller shall direct each Borrower
to make all payments thereon directly to the Purchaser or as it may otherwise
designate.
Section 8. Obligations to Forward Payments and Communications.
(a) The Seller shall promptly remit, or cause to be remitted,
to the Purchaser all funds received by the Seller after the applicable
Loan Purchase Date which constitute payments of principal or interest
(including Interest Subsidy Payments) or Special Allowance Payments
accrued after the applicable Loan Purchase Date with respect to any
FFELP Loan.
(b) The Seller shall immediately transmit to the Purchaser any
communication received by the Seller after the applicable Loan Purchase
Date with respect to a FFELP Loan or the Borrower under such a FFELP
Loan. Such communication shall include, but not be limited to, letters,
notices of death or disability, adjudication of bankruptcy and similar
documents and forms requesting deferment of repayment or loan
cancellations.
Section 9. Payment of Expenses and Taxes. Each party to this Loan
Purchase Agreement shall pay its own expenses incurred in connection with the
preparation, execution and delivery of this Loan Purchase Agreement and the
transactions herein contemplated, including, but not limited to, the fees and
disbursements of counsel; provided, however, that Seller shall pay any transfer
or other taxes and recording or filing fees payable in connection with the sale
and purchase of the FFELP Loans.
Section 10. Indemnification. The Seller specifically acknowledges that
the Purchaser, in obtaining financing, will be making representations and
warranties regarding the FFELP Loans based in part on the accuracy of the
Seller's representations and warranties in this Loan Purchase Agreement. The
Seller agrees to indemnify and save the Trustee, the Purchaser and the parties
to the Financing Agreement (together with each of their respective successors,
assignees, officers, directors, agents and employees) harmless of, from and
against any and all loss, liability, cost, damage or expense, including
reasonable attorneys' fees and costs of litigation, incurred by reason of any
breach of the Seller's warranties, representations or covenants hereunder or any
false or misleading representations of the Seller or any failure to disclose any
matter which makes the warranties and representations herein misleading or any
inaccuracy in any information furnished by the Seller in connection herewith.
10
Section 11. Special Provisions Relating to MPN Loans.
(a) The Seller hereby represents and warrants that the Seller
is transferring all of its right title and interest in the MPN Loans to
the Purchaser, that it has not assigned any interest in such MPN Loans
(other than security interests that have been released or ownership
interests that the Seller has reacquired) to any person other than the
Purchaser, and that no prior holder of the MPN Loans has assigned any
interest in such MPN Loans (other than security interests that have
been released or ownership interests that such prior holder has
reacquired) to any person other than a predecessor in title to the
Seller. The Seller hereby covenants that the Seller shall not attempt
to transfer to any other person any interest in any MPN Loan assigned
hereunder.
(b) The Seller hereby authorizes the Purchaser to file a UCC-1
financing statement identifying the Seller as debtor and the Purchaser
as secured party and describing the MPN Loans sold pursuant to this
Loan Purchase Agreement. The preparation or filing of such UCC-1
financing statement is solely for additional protection of the
Purchaser's interest in the MPN Loans and shall not be deemed to
contradict the express intent of the Seller and the Purchaser that the
transfer of MPN Loans under this Loan Purchase Agreement is an absolute
assignment of such MPN Loans and is not a transfer of such MPN Loans as
security for a debt.
Section 12. Other Provisions.
(a) The Seller shall, at its expense, furnish to the Purchaser
such additional information concerning the Seller's student loan
portfolio as the Purchaser may reasonably request.
(b) The Seller shall, at its expense, execute all other
documents and take all other steps as may be requested by the Purchaser
or the Trustee from time to time to effect the sale hereunder of the
FFELP Loans.
(c) The provisions of this Loan Purchase Agreement cannot be
waived or modified unless such waiver or modification be in writing and
signed by the parties hereto. Inaction or failure to demand strict
performance shall not be deemed a waiver.
(d) This Loan Purchase Agreement shall be governed by the laws
of the State of Nebraska.
(e) All covenants and agreements herein contained shall extend
to and be obligatory upon all successors of the respective parties
hereto.
11
(f) This Loan Purchase Agreement may be simultaneously
executed in several counterparts, each of which shall be an original
and all of which shall constitute but one and the same instrument.
(g) If any provision of this Loan Purchase Agreement shall be
held, deemed to be or shall, in fact, be inoperative or unenforceable
as applied in any particular situation, such circumstances shall not
have the effect of rendering the provision in question inoperative or
unenforceable in any other situation or of rendering any other
provision or provisions herein contained invalid, inoperative or
unenforceable to any extent whatsoever. The invalidity of any one or
more phrases, sentences, clauses or paragraphs herein contained shall
not affect the remaining portions of this Loan Purchase Agreement or
any part hereof.
(h) All notices, requests, demands or other instruments which
may or are required to be given by either party to the other shall be
in writing, and each shall be deemed to have been properly given when
served personally on an officer of the party to whom such notice is
given or upon expiration of a period of 48 hours from and after the
postmark thereof when mailed, postage prepaid, by registered or
certified mail, requesting return receipt, by overnight courier, or by
telecopy, addressed as follows:
If to the Purchaser:
Nelnet Student Loan Trust 2004-4
121 South 13th Street, Suite 201
Lincoln, Nebraska 68508
Attention: Terry J. Heimes
Telephone: (402) 458-2301
Facsimile: (402) 458-2294
with a copy to the Trustee at:
Zions First National Bank
Corporate Trust Division
717 17th Street, Suite 301
Denver, Co 80202
Attention: David W. Bata - VP & Trust Officer
Telephone: (720) 947-7475
Facsimile: (720) 947-7480
If to the Seller, addressed in the manner as set forth in the first
paragraph of this Loan Purchase Agreement.
12
Either party may change the address and name of the addressee to which
subsequent notices are to be sent to it by notice to the others given
as aforesaid, but any such notice of change, if sent by mail, shall not
be effective until the fifth day after it is mailed.
(i) This Loan Purchase Agreement may not be terminated by
either party hereto except in the manner and with the effect herein
specifically provided for.
(j) Time is of the essence in this Loan Purchase Agreement.
(k) This Loan Purchase Agreement shall not be assignable by
the Seller, in whole or in part.
(l) No remedy by the terms of this Loan Purchase Agreement
conferred upon or reserved to the Purchaser is intended to be exclusive
of any other remedy, but each and every such remedy shall be cumulative
and in addition to every other remedy given under this Loan Purchase
Agreement or existing at law or in equity (including, without
limitation, the right to such equitable relief by way of injunction) or
by statute on or after the date of this Loan Purchase Agreement.
(m) Acts to be taken by the Purchaser with respect to
acquiring and holding title to FFELP Loans hereunder shall be taken by
the Trustee as directed by the Purchaser, which qualifies as an
"eligible lender" trustee under the Higher Education Act, and all
references herein to the Purchaser shall incorporate by this reference
the fact that the Trustee will be acquiring and holding title to FFELP
Loans on behalf of the Purchaser, all as required under the Higher
Education Act.
(n) The parties hereto acknowledge that the Trustee and the
Indenture Trustee shall be third party beneficiaries of this Loan
Purchase Agreement with the power and right to enforce the provisions
thereof, and the Trustee and the Indenture Trustee may become an
assignee of the Purchaser. The foregoing creates a permissive right on
the part of such third party beneficiaries, and such third party
beneficiaries shall be under no duties or obligations hereunder.
(o) This Loan Purchase Agreement has been made and entered
into not only for the benefit of the Purchaser and Seller but also for
the benefit of the Trustee in connection with the financing of Eligible
Loans as defined in the Financing Agreement, and upon assignment by the
Purchaser to the Indenture Trustee, its provisions may be enforced not
only by the parties to this Loan Purchase Agreement but by the Trustee.
The foregoing creates a permissive right on behalf of the Trustee and
the Trustee shall not be under any duties or obligations hereunder.
13
(p) This Loan Purchase Agreement shall inure to the benefit of
the Trustee, the Indenture Trustee and their successors and assigns.
Without limiting the generality of the foregoing, all representations,
covenants and agreements in this Loan Purchase Agreement which
expressly confer rights upon the Trustee or the Indenture Trustee shall
be for the benefit of and run directly to, the Trustee and the
Indenture Trustee, and the Trustee and the Indenture Trustee shall be
entitled to rely on and enforce such representations, covenants and
agreements to the same extent as if each were a party hereto. The
foregoing creates a permissive right on behalf of the Trustee and the
Indenture Trustee, and neither the Trustee nor the Indenture Trustee
shall be under any duties or obligations hereunder.
(q) If there is an Event of Default (as defined in the
Financing Agreement) under the Financing Agreement and the Indenture
Trustee forecloses on its security interest on the Eligible Loans, then
the Indenture Trustee shall assume all duties and obligations of the
Purchaser hereunder.
Section 13. Security Interest. The parties to this Loan Purchase
Agreement intend that the conveyance of the Seller's right, title and interest
in and to the FFELP Loans sold pursuant to this Loan Purchase Agreement (the
"Student Loans") shall constitute an absolute sale, conveying good title free
and clear of any liens, claims, encumbrances or rights of others from the Seller
to the Purchaser. The parties to this Loan Purchase Agreement intend that the
arrangements with respect to the Student Loans shall constitute a purchase and
sale of such Student Loans and not a loan. In the event, however, that it were
determined by a court of competent jurisdiction that the transactions evidenced
by this Loan Purchase Agreement shall constitute a loan and not a purchase and
sale, the party receiving notice of such determination shall give notice of such
determination to the other party and to the Trustee. This Loan Purchase
Agreement constitutes a "security interest" under Article 9 of the applicable
Uniform Commercial Code (the "UCC") and the Seller hereby grants to the
Purchaser a first priority "security agreement" under Article 9 of the
applicable UCC in all of the Seller's right, title and interest, whether now
owned or hereafter acquired, in, to and under all accounts, general intangibles,
chattel paper, instruments, documents, goods, investment property, money,
deposit accounts, certificates of deposit, letters of credit, advices of credit
and other property consisting of, arising from or related to the following
collateral property ("Granted Property"):
(a) all Student Loans;
(b) all revenues and recoveries of principal from Student
Loans, including all borrower payments and reimbursements of principal
and accrued interest on default claims received from any Guarantor;
(c) any other revenues and recoveries of principal and
interest and other payments and reimbursements of principal and accrued
interest received with respect to any Student Loan and any other
collection of cash with respect to such Student Loan (including, but
not limited to, Interest Subsidy Payments, Special Allowance Payments,
finance charges and payments representing the repurchase of any Student
Loan or rebate of premium thereon pursuant to this Loan Purchase
Agreement) received or deemed to have been received and all other cash
collections, tax refunds and other cash proceeds of the Pledged
Collateral held in various funds and accounts created under this Loan
Purchase Agreement;
14
(d) all other security interests or liens and property subject
thereto from time to time, if any, purporting to secure payment of such
Student Loans, whether pursuant to the contract related to such Student
Loans or otherwise;
(e) all documents, books, records and other information
(including, without limitation, computer programs, tapes, disks, punch
cards, data processing software and related property and rights)
maintained with respect to Student Loans otherwise in respect of the
Granted Property; and
(f) all proceeds of the foregoing (including, but not by way
of limitation, all cash proceeds, accounts, accounts receivable, notes,
drafts, acceptances, chattel paper, checks, deposit accounts, insurance
proceeds, condemnation awards, rights to payment of any and every kind,
and other forms of obligations and receivables or other liquidated
property which at any time constitute all or part or are included in
the proceeds of any of the foregoing property).
The Seller agrees that from time to time, at its expense, it will
properly execute and deliver all further instruments and documents (including,
without limitation, UCC-1 financing statements and custodian agreements with the
Servicer), and take all further action that the Purchaser may reasonably request
in order to perfect, protect or more fully evidence the Purchaser's interest in
the Granted Property or to enable the Purchaser to exercise or enforce any of
its rights hereunder.
Section 14. Information and Reporting. Upon the Purchaser's request,
Seller shall furnish to the Purchaser: (a) Seller's most recent audited
financial statement prepared in accordance with generally accepted accounting
principles and duly certified by nationally recognized independent certified
public accountants selected by Seller, as well as Seller's most recent unaudited
financial statement and balance sheet; (b) an updated audited financial
statement prepared in accordance with generally accepted accounting principles
and duly certified by nationally recognized independent certified public
accountants selected by Seller; and (c) such other financial information as the
Purchaser may reasonably request from time to time. Seller shall verify and
reconcile Eligible Loan disbursements and cancellations of Eligible Loans sold
hereunder, in such manner as the Purchaser may reasonably request from time to
time. Seller shall furnish to the Purchaser a certificate of good standing.
Section 15. Limitation of Liability of Delaware Trustee.
Notwithstanding anything contained herein to the contrary, this instrument has
been executed by Wilmington Trust Company, not in its individual capacity, but
solely in its capacity as Delaware Trustee, and in no event shall Wilmington
Trust Company in its individual capacity or any beneficial owner of the
Purchaser have any liability for the representations, warranties, covenants,
agreements or other obligations of the Purchaser hereunder, as to all of which
recourse shall be had solely to the assets of the Purchaser.
15
[Balance of this Page Is Intentionally Left Blank]
16
IN WITNESS WHEREOF, the parties have hereunto set their hands as of the
day and year first above written.
Nelnet Student Loan Trust 2004-4 Nelnet Student Loan Funding, LLC
By: Wilmington Trust Company, By: Nelnet Student Loan Funding
not in its individual capacity, Management Corporation, as
but solely as Delaware Trustee Manager and Special Member
By: /s/ Janel R. Havrilla By: /s/ Jeffrey R. Noordhoek
----------------------------------- ---------------------------
Title: Financial Services Officer Jeffrey R. Noordhoek
----------------------------------- Vice President
17
EXHIBIT A TO LOAN PURCHASE AGREEMENT
LOAN TRANSFER ADDENDUM
This Loan Transfer Addendum (the "Addendum") is made and entered into
as of the ___ day of ___________, _____, by and between Nelnet Student Loan
Trust 2004-4 (the "Purchaser") and Nelnet Student Loan Funding, LLC (the
"Seller").
WHEREAS, the parties hereto entered into that Loan Purchase Agreement
dated as of ________________, ______, (the "Loan Purchase Agreement"), and the
Seller wishes to sell a portfolio of Eligible Loans (as defined in the Loan
Purchase Agreement) to the Purchaser, pursuant to and in accordance with the
terms and conditions of the Loan Purchase Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants herein contained, the parties hereto agree as follows:
1. Definitions. All capitalized terms in this Addendum shall have
the same meanings given to them in the Loan Purchase
Agreement, unless otherwise specifically stated herein.
2. Purchase of Eligible Loans. Subject to the terms and
conditions of the Loan Purchase Agreement and in reliance upon
the representations, warranties and covenants as set forth in
the Loan Purchase Agreement, the Seller agrees to sell to the
Trustee, as eligible lender trustee under the Eligible Lender
Trust Agreement on behalf of the Purchaser, a portfolio of
Eligible Loans identified in the Loan Transfer Schedule
attached hereto, having an aggregate outstanding principal
balance of approximately $______ (the "Current Purchase
Portfolio").
3. Purchase Price. Subject to the terms and conditions of the
Loan Purchase Agreement, the Purchaser agrees to purchase the
Eligible Loans in the Current Purchase Portfolio at a purchase
price equal to ___% of the aggregate unpaid principal balance
thereon plus 100% of the accrued and unpaid interest thereon,
each as of the Loan Purchase Date set forth in Section 4
hereof.
4. Loan Purchase Date. The Loan Purchase Date shall be no later
than _____________, _____.
5. Representations and Warranties. The Seller hereby reconfirms
all the representations and warranties set forth in the Loan
Purchase Agreement as of the Loan Purchase Date set forth in
Section 4 hereof.
18
6. Effect on Loan Purchase Agreement. This Addendum sets forth
the terms of purchase and sale solely with respect to the
Current Purchase Portfolio. This Addendum shall have no effect
upon any other sale or purchase of any Eligible Loans
consummated or contemplated prior to or after the Loan
Purchase Date, and all other terms, conditions and agreements
contained in the Loan Purchase Agreement shall remain in full
force and effect. Prior or subsequent purchases and sales of
Eligible Loans shall each be governed by a separate Loan
Transfer Addendum.
7. Special Terms. [Reserved]
Nelnet Student Loan Trust 2004-4 Nelnet Student Loan Funding, LLC
By: Wilmington Trust Company, By: Nelnet Student Loan Funding
not in its individual capacity, Management Corporation,
but solely as Delaware Trustee as Manager and Special Member
By: ______________________________ By: ____________________________
Title: ______________________________ Jeffrey R. Noordhoek
Vice President
19
EXHIBIT B TO LOAN PURCHASE AGREEMENT
SELLER'S CLOSING CERTIFICATE
(DO NOT COMPLETE) (the "Seller") does hereby certify that all
representations, warranties and statements by or on behalf of the Seller
contained in a certain Loan Purchase Agreement dated September 1, 2004 (the
"Agreement"), by and between the Seller and Nelnet Student Loan Trust 2004-4
(the "Purchaser"), are true and correct on and as of the Loan Purchase Date,
without exception or qualification whatsoever;
FURTHERMORE, the Seller does hereby certify that the following
documents, where applicable to each FFELP Loan (as defined in the Agreement)
acquired under the Agreement, have heretofore been furnished to the Purchaser or
are simultaneously herewith delivered in accordance with the instructions of the
Purchaser, pursuant to subsection 4(d) of the Agreement:
Department of Education application or Guarantee Agency
application, as supplemented
Interim note(s) for each Loan that is not an MPN Loan Payout note(s) for each
Loan that is not an MPN Loan
Disclosure and Loan information statement
Certificate of Insurance and Contract of Insurance with
respect to each Insured Loan (or certified copy thereof)
Guarantee Agreement, Agreement for Participation in the
Guaranteed Loan Program and Notification of Loan Approval by the Guarantee
Agency with respect to each Guaranteed Loan (or certified copy thereof)
Any other documentation held by the Seller relating to
the history of such Eligible Loan
Secretary of Education and Guarantee Agency Loan
Transfer Statements
Uniform Commercial Code financing statement, if any, securing any interest in an
Eligible Loan to be Financed, and an executed termination statement related
thereto
Evidence of Loan disbursement
Any other document required to be submitted with a claim to the Guarantee
Agency.
IN WITNESS WHEREOF, the undersigned has caused this Certificate to be
executed and delivered by an officer hereunto duly authorized as of the Loan
Purchase Date, _____.
(DO NOT COMPLETE)
NAME OF SELLER
BY (DO NOT SIGN)
TITLE (DO NOT SIGN)
20
EXHIBIT C TO LOAN PURCHASE AGREEMENT
BLANKET ENDORSEMENT OF
STUDENT LOAN PROMISSORY NOTES
Pursuant to the Loan Purchase Agreement dated September 1, 2004, the
undersigned ("Seller"), by execution of this instrument, hereby endorses all
promissory notes purchased by Zions First National Bank as eligible lender
trustee (the "Trustee") on behalf of Nelnet Student Loan Trust 2004-4 (the
"Purchaser"). This endorsement is in blank, unrestricted form. This endorsement
is without recourse, except as provided under the terms of the Loan Purchase
Agreement. All right, title, and interest of Seller in and to the promissory
notes and related documentation identified in the attached loan ledger are
transferred and assigned to Trustee on behalf of the Purchaser.
This endorsement may be further manifested by attaching this instrument
or a facsimile hereof to each or any of the Promissory Notes and related
documentation acquired by the Trustee on behalf of the Purchaser from Seller, or
by attaching this instrument to the loan ledger schedule, as the Purchaser may
require or deem necessary.
Dated this ___ day of ______________, _____.
SELLER (DO NOT COMPLETE)
(DO NOT SIGN)
SIGNATURE OF AUTHORIZED OFFICER OF SELLER
21
EXHIBIT D TO LOAN PURCHASE AGREEMENT
BILL OF SALE
FOR VALUE RECEIVED, Nelnet Student Loan Funding, LLC (the
"Seller"), pursuant to the terms and conditions of that certain Loan Purchase
Agreement dated as of September 1, 2004 (the "Agreement") between the Seller and
Nelnet Student Loan Trust 2004-4 (the "Purchaser") does hereby grant, sell,
assign, transfer and convey to Zions First National Bank, solely in its capacity
as trustee (the "Trustee") on behalf of the Purchaser and its successors and
assigns, all right, title and interest of the Seller in and to the following:
(1) The loans described in Annex I attached hereto (the "Loans"),
including the guarantee of the Loans issued by a guarantee
agency pursuant to the Federal Family Education Loan Program
(20 U.S.C. ss. 1071 et seq.);
(2) All promissory notes and related documentation evidencing the
indebtedness represented by such Loans; and
(3) All proceeds of the foregoing including, without limitation,
all payments made by the obligor thereunder or with respect
thereto, all guarantee payments made by any guarantee agency
with respect thereto, and all interest benefit payments and
special allowance payments with respect thereto made under
Title IV, Part B, of the Higher Education Act of 1965, as
amended, and all rights to receive such payments, but
excluding any proceeds of the sale made hereby.
TO HAVE AND TO HOLD the same unto the Trustee on behalf of the
Purchaser, its successors and assigns, forever. This Bill of Sale is made
pursuant to and is subject to the terms and provisions of the Agreement, and is
without recourse, except as provided in the Agreement.
IN WITNESS WHEREOF, the Seller has caused this instrument to
be executed by one of its officers duly authorized to be effective as of
the ____ day of ______, _____.
Nelnet Student Loan Funding, LLC
By: Nelnet Student Loan Funding Management
Corporation, as Manager and Special
Member
By: ____________________________
Jeffrey R. Noordhoek
Vice President [NAME OF SELLER]
22
EXHIBIT E TO LOAN PURCHASE AGREEMENT
REPRESENTATIONS, WARRANTIES,
COVENANTS AND AGREEMENTS OF SELLER
A. Any information furnished by the Seller to the Purchaser, or the
Purchaser's agents with respect to a FFELP Loan, including the Loan Transfer
Schedule attached to the Loan Transfer Addendum, is true, complete and correct.
B. The amount of the unpaid principal balance of each FFELP Loan is due
and owing, and no counterclaim, offset, defense or right to rescission exists
with respect to any FFELP Loan which can be asserted and maintained or which,
with notice, lapse of time or the occurrence or failure to occur of any act or
event could be asserted and maintained by the Borrower against the Trustee or
the Purchaser as assignee thereof. The Seller shall have taken all reasonable
actions to assure that no maker of a FFELP Loan has or may acquire a defense to
the payment thereof. No FFELP Loan carries a rate of interest less than, or in
excess of, the applicable rate of interest required by the Higher Education Act.
If the Higher Education Act permits Sellers to charge an interest rate less than
the applicable rate of interest, no FFELP Loan purchased hereunder bears
interest at a rate lower than the applicable rate of interest; provided,
however, that the Purchaser may approve, in its sole discretion, in writing,
interest reductions which are part of a borrower repayment incentive program of
Seller, the terms of which have been fully described in detail and in writing to
the Purchaser.
C. Each FFELP Loan has been duly executed and delivered and constitutes
the legal, valid and binding obligations of the maker (and the endorser, if any)
thereof, enforceable in accordance with its terms.
D. Each FFELP Loan complies in all respects with the requirements of
the Higher Education Act and the Loan Purchase Regulations and is an Eligible
Loan, as that term is defined in the Loan Purchase Agreement.
E. The Seller or Seller's eligible lender trustee has applied for and
received the Secretary of Education's or a Guarantee Agency's designation, as
the case may be, as an "Eligible Lender" under the Higher Education Act, and the
Seller has entered into all agreements required to be entered into for
participation in the Federal Family Education Loan Program under the Higher
Education Act.
F. The Seller and the Seller's eligible lender trustee on behalf of
Seller is the sole owner and holder of each FFELP Loan and has full right and
authority to sell and assign the same free and clear of all liens, pledges or
encumbrances, other than FFELP Loans that have been submitted for claim to a
Guarantee Agency; no FFELP Loan has been pledged or assigned for any purpose
other than for submission of claim to a Guarantee Agency; and each FFELP Loan is
free of any and all liens, charges, encumbrances and security interests of any
description. The Purchaser has a valid and perfected first priority security
interest in the Pledged Collateral.
23
G. Each FFELP Loan is either Insured or Guaranteed; such Insurance or
Guarantee, as the case may be, is in full force and effect, is freely
transferable as an incident to the sale of each FFELP Loan; all amounts due and
payable to the Secretary of Education or a Guarantee Agency, as the case may be,
have been or will be paid in full by the Seller.
H. There are no circumstances or conditions with respect to any FFELP
Loan, the Borrower thereunder or the creditworthiness of said Borrower that
would reasonably cause prudent private investors to regard any of the FFELP
Loans as an unacceptable investment, or adversely affect the value or
marketability thereof, the insurance thereof and any applicable Guarantee.
I. Each FFELP Loan was made in compliance with all applicable local,
State and federal laws, rules and regulations, including, without limitation,
all applicable nondiscrimination, truth-in-lending, consumer credit and usury
laws.
J. The Seller has carefully reviewed the Loan Purchase Regulations
supplied by the Purchaser and has complied with the Loan Purchase Regulations.
K. The FFELP Loans pursuant to the Loan Purchase Agreement include all
Eligible Loans of any one Borrower held by the Seller.
L. The Seller has, and its officers acting on its behalf have, full
legal authority to engage in the transactions contemplated by the Loan Purchase
Agreement; the execution and delivery of the Loan Purchase Agreement, the
consummation of the transactions herein contemplated and compliance with the
terms, conditions and provisions of the Loan Purchase Agreement do not and will
not conflict with or result in a breach of any of the terms, conditions or
provisions of the charter, articles or bylaws of the Seller or any agreement or
instrument to which the Seller is a party or by which it is bound or constitute
a default thereunder; the Seller is not a party to or bound by any agreement or
instrument or subject to any charter or other corporation restriction or
judgment, order, writ, injunction, decree, law, rule or regulation which may
materially and adversely affect the ability of the Seller to perform its
obligations under the Loan Purchase Agreement and the Loan Purchase Agreement
constitutes a valid and binding obligation of the Seller enforceable against it
in accordance with its terms, and no consent, approval or authorization of any
government or governmental body, including, without limitation, the Federal
Savings and Loan Insurance Corporation, the Federal Deposit Insurance
Corporation, the Comptroller of the Currency, the Board of Governors of the
Federal Reserve System or any state bank regulatory agency, is required in
connection with the consummation of the transactions herein contemplated.
M. The Seller is duly organized, validly existing and in good standing
under the laws of its applicable jurisdiction and has the power and authority to
own its assets and carry on its business as now being conducted.
N. The Seller and any independent servicer have each exercised due
diligence and reasonable care in making, administering, servicing and collecting
the FFELP Loans, and the Seller has conducted a reasonable investigation of
sufficient scope and content to enable it duly to make the representations and
warranties contained in this Exhibit E. The Seller shall be solely responsible
for the payment of the costs and expenses incident to origination of FFELP
Loans, without any right of reimbursement therefor from the Purchaser.
24
O. With respect to all Insured Eligible Loans being acquired, Insurance
is in effect with respect thereto; the applicable Contract and Certificates of
Insurance are valid and binding upon the parties thereto in all respects
material to the security for any bonds and/or notes issued by the Purchaser or
its assignee; and the Seller is not in default in the performance of any of its
covenants and agreements made in respect thereof.
P. With respect to all Guaranteed Eligible Loans being acquired, a
Guarantee Agreement is in effect with respect thereto and is valid and binding
upon the parties thereto in all respects material to the security of the bonds
and/or notes issued by the Purchaser or its assignee to finance the FFELP Loans;
and the Seller is not in default in the performance of any of its covenants and
agreements made in such Guarantee Agreement.
Q. The Seller does not (i) discriminate by pattern or practice against
any particular class or category of students by requiring, as a condition to the
receipt of a student loan, that a student or his family maintain a business
relationship with the Seller, except as may be permitted under applicable laws
or (ii) discriminate on the basis of race, gender, color, creed or national
origin.
R. The FFELP Loans are a representative sample of all student loans
held by the Seller with respect to the educational institution attended by, or
the age, sex, race, national origin or place of residence of, the Borrower to
whom such loans were made, or with respect to any other identifying
characteristic of such Borrowers.
S. Each instrument transferred to the Purchaser under the Loan Purchase
Agreement is a FFELP Loan which constitutes an Eligible Loan.
T. No promissory note evidencing an Eligible Loan bears any apparent
evidence of forgery or alteration or is otherwise so irregular or incomplete as
to call into question its authenticity.
U. Except as may have been disclosed by the UCC lien search required by
Section 4(f) of the Loan Purchase Agreement for the Seller, no other financing
statements or assignment filings naming the Seller as debtor or assignor under
its legal name or trade names has been filed.
V. The fair salable value of the assets on a going concern basis of the
Seller and its subsidiaries, on a consolidated basis, as of the time of each
sale of FFELP Loans hereunder is in excess of the total amount of their
liabilities.
25
EXHIBIT F TO LOAN PURCHASE AGREEMENT
ACKNOWLEDGMENT
The assignment of the within promissory note and related documents to
(DO NOT COMPLETE) under a Loan Purchase Agreement between ____________________
and ____________________, dated as of ____________________, _____, did not
become effective thereunder, and no rights in the same have been conveyed
thereby.
Dated: (DO NOT COMPLETE)
26
EXHIBIT 99.2
MASTER SERVICING AGREEMENT
This Master Servicing Agreement (the "Agreement") entered into and
effective as of the 1st day of September, 2004, by and among National Education
Loan Network, Inc., f/k/a Nelnet, Inc., a Nevada corporation, acting as Master
Servicer (in its capacity as such, the "Master Servicer") and acting as
Administrator (acting in its capacity as such, the "Administrator"), Nelnet
Student Loan Trust 2004-4, a Delaware statutory trust ("Trust") and Nelnet
Student Loan Funding, LLC, a Delaware limited liability company ("NSLF").
WHEREAS, Nelnet, Inc., formerly known as Nelnet Loan Services, Inc.
("Nelnet") and other subservicing agents as approved by the Trust in writing
from time to time (collectively, "Subservicers"), as subservicing agents, are in
the business of servicing loans which are made and guaranteed in accordance with
the provisions of the Higher Education Act of 1965, as amended (the "Education
Act") (references hereinafter to the "Education Act" include rules and
regulations promulgated thereunder as in effect from time to time); and
WHEREAS, Subservicers have developed and/or have available to them the
systems and services to enable them to process and service Education Loans in
accordance with the Education Act, and those guarantee agencies as are
satisfactory to Subservicers ("Guarantor(s)"); and
WHEREAS, Subservicers have developed and/or have available to them the
systems and services to enable them to process and service Education Loans in
accordance with the Rules and Regulations (the "Regulations") promulgated by
Guarantor (references hereinafter to the "Regulations" include Rules and
Regulations promulgated thereunder as in effect from time to time); and
WHEREAS, the Trust and NSLF, by and through their respective eligible
lender trustees, acquire student loans made and guaranteed under the Education
Act ("Education Loans"); and
WHEREAS, the Trust and NSLF desire to retain the Master Servicer to (i)
retain Nelnet to process and service certain of the Education Loans and for
Nelnet to act as subservicer under the terms of that certain Nelnet, Inc.
Subservicing Agreement between the Master Servicer and Nelnet, dated as of
September 1, 2004; and (ii) cause certain other subservicing agents which are a
servicer to process and service certain of the Education Loans under
subservicing agreements which may be entered into hereafter between the Master
Servicer and such subservicing agents.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter set forth, the parties agree as follows:
1. Definitions. Capitalized terms which are not otherwise defined in
this Agreement shall have the meanings ascribed thereto in that certain
Indenture of Trust (the "Indenture"), dated as of September 1, 2004, between
Zions First National Bank, as trustee (the "Trustee"), and the Trust.
1
2. Term.
2.1 The term of this Agreement shall continue until the earlier of (i)
termination of the Indenture and the Trust Agreement, dated as of September 1,
2004 (the "Trust Agreement"), between NSLF and Wilmington Trust Company, as
Delaware Trustee, (ii) early termination after material default by the Master
Servicer as provided for in Section 16 hereof, and (iii) the Education Loans
serviced under this Agreement are paid in full.
2.2 Upon the termination of this Agreement, the Master Servicer shall
turn over to the Trust or NSLF, as applicable, all Education Loan files complete
with all information contained therein and all current computer information on
the Education Loans under service pursuant to this Agreement in such form or
fashion as the Trust or NSLF, as applicable, shall reasonably specify. The
Master Servicer, the Trust and NSLF specifically agree that the format used to
transfer the Trust's or NSLF's data contains confidential and proprietary trade
secret information which is the exclusive property of the Master Servicer and/or
any Subservicer. The Master Servicer makes no claim to the specific data
contained in any printout given to the Trust, NSLF or the Administrator and
recognizes that said data is the exclusive property of the Trust or NSLF. The
Master Servicer, the Trust and NSLF agree, however, that all aspects of the
underlying computer program, algorithms, methods of processing, specific design
and layout, report format, and the unique processing techniques and interactions
of the various aspects of the Master Servicer's and/or any Subservicer's
computer program are trade secrets of, proprietary to, and owned exclusively by
the Master Servicer and/or any Subservicer. At such deconversion, a minimum fee
of $12.00 per account transferred off of the Subservicer's servicing system plus
any other reasonable expenses incurred in connection with the transfer of such
files and other information shall be paid by the Trust or NSLF, as applicable;
provided however, that in the event deconversion results from early termination
of this Agreement under Section 16 hereof due to the breach by the Master
Servicer, the Trust or NSLF, as applicable, shall pay only the actual expenses
incurred in connection with the transfer of such files and other information.
The confidentiality provisions of this paragraph shall survive any termination
or expiration of this Agreement.
3. Delivery of Completed Education Loans for Servicing and Collection.
Subject to the Master Servicer's scheduling requirements, the Trust or NSLF may
from time to time deliver or cause to be delivered to the Master Servicer
Education Loans with respect to which loan processing has been completed and
loan proceeds have been fully disbursed to the student/parent borrowers prior to
the date of delivery ("Converted Education Loans") to be serviced pursuant to
the terms of this Agreement. The Trust or NSLF shall transmit to the Master
Servicer all such loan documentation as required by the Master Servicer to
enable it to service the Converted Education Loans as provided herein (the "Loan
Documentation"). Upon receipt of the Loan Documentation, the Master Servicer
shall cause the Subservicer to verify only the presence of the promissory note,
the original Borrower application and proof of disbursement. The Master Servicer
is willing to use reasonable efforts to identify previous servicing errors or
omissions in this process, if requested by the Trust or NSLF, for a fee to be
mutually agreed upon following the Master Servicer's review of the portfolio.
However, the Master Servicer shall not be liable or responsible for the
consequences of any errors it does or does not detect in such file review, nor
for missing or incorrect documentation at conversion. Master Servicer is
agreeable to the conversion of delinquent Education Loans to its system for
servicing. If an Education Loan is 180 days or more past due, however, the
Master Servicer will not be responsible for any Guarantor claim rejects or
interest denials due to untimely guarantee claim filing.
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4. Servicing of Converted Education Loans. Upon acceptance of any
Converted Education Loan into the Master Servicer's computer system and after
the sale date (if applicable) of the Converted Education Loan to the Trust or
NSLF, the Master Servicer shall cause the Subservicers to service such Education
Loan in accordance with the Education Act, the Regulations, and in accordance
with the provisions of this Agreement, including the following:
(a) Subservicers will service the Education Loans in such a manner as
to maintain the guarantee thereon in full force at all times, subject to Section
15 hereof.
(b) Subservicers shall prepare and mail directly to the student/parent
borrower all required statements, notices, disclosures and demands.
(c) Subservicers shall retain records of contacts, follow-ups,
collection efforts and correspondence regarding each Education Loan.
(d) Subservicers shall provide accounting for all transactions related
to individual Education Loans, including, but not limited to, accounting for all
payments of principal and interest upon such Education Loans from the conversion
date to the Subservicers' system.
(e) Subservicers shall process all deferments and forbearances.
(f) Subservicers shall process all address changes and update address
changes accordingly.
(g) Subservicers shall retain all documents received by the Master
Servicer, the Trust, NSLF or the Administrator pertaining to each Education
Loan, in accordance with the filing requirements set forth in the most current
"Common Manual - Unified Student Loan Policy." Such retention may be on magnetic
tape, microfilm, laser disk or other similar medium.
(h) When necessary and allowable by the Education Act, Subservicers
shall take all steps necessary to file a claim for loss with Guarantor.
(i) Subservicers shall provide data as required by Guarantor.
(j) Subservicers shall provide such other services as Subservicers
customarily provide and deem appropriate.
(k) The Master Servicer, the Trust and NSLF agree that upon delivery of
the original promissory notes relating to the Education Loans to the
Subservicers as Custodians pursuant to the applicable Custodian Agreement, that
each shall and does relinquish all power and control over such promissory notes,
subject to responsibilities of the Master Servicer under this Agreement.
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5. System Updates. The Trust and NSLF agree that in the course of its
Master Servicer's Education Loan servicing activities, Master Servicer may rely
on, without independently verifying, all data entries, manipulations and
representations provided to Master Servicer by the Trust, NSLF, the
Administrator, eligible institutions and borrowers with respect to the Education
Loans, including but not limited to, eligible institutions/borrower
certification, eligibility, enrollment, and eligible institution or borrower
demographics, including data entries provided to Master Servicer electronically,
via the internet or otherwise, and that Master Servicer shall have no liability
for incorrect information or the consequences thereof, which is provided by the
Trust, NSLF, the Administrator, eligible institutions or borrowers.
6. Cure Servicing. At the request of the Trust or NSLF, the Master
Servicer agrees to cause the Subservicers to perform additional servicing
activities not required under the terms of this Agreement for those Education
Loans transferred to Master Servicer as Converted Education Loans which have not
been previously serviced in accordance with the Education Act and Regulations,
and which require additional servicing activity to attempt to maintain or
reinstate the loans' principal and interest guarantee from the Guarantor ("Cure
Procedures"). The Master Servicer shall cause the Subservicers, utilizing Cure
Procedures approved by the Guarantor, to use the Subservicers' best efforts to
cure all defects caused by the Trust or NSLF. The Master Servicer makes no
representation or warranty that the guarantee on each Education Loan will be
reinstated regardless of the Subservicers following the Cure Procedures as
approved by the Guarantor. The Trust and NSLF agree to pay the Master Servicer
those fees for Cure Procedures described in Schedule A under the topic entitled
"Additional Servicing Activity".
7. Portfolios Subject to Rejection by the Master Servicer. The Trust
and NSLF acknowledge that certain loan portfolio types pose a risk of financial
hardship for the Master Servicer and Subservicers to service under this
Agreement. The Master Servicer may in its discretion, prior to placing such
loans in the Subservicers' system, reject certain loans or loan portfolios
("Rejected Loans"). The Master Servicer shall provide the Trust, NSLF and the
Administrator with reasonable advance notice as to any Rejected Loans which the
Master Servicer declines to place on Master Servicer's system. The Master
Servicer shall have no right to reject or decline loans after the loans are
transferred to the Master Servicer's and the Subservicers' system.
8. Reports to the Trust or NSLF. On or before the 15th day of each
month (or by the 15th day following quarter end, as applicable), unless some
other time is provided herein, the Master Servicer shall cause the Subservicers
to prepare and deliver to the Trust, NSLF, if applicable, the Administrator and
the Trustee (upon Trustee's request), or to such other person as the Trust or
NSLF may designate, the following reports with respect to activity during the
preceding month:
(a) Daily Monetary Transaction Summary;
(b) Daily Lender Advice Report;
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(c) Daily Transaction Journal;
(d) Daily Transaction Detail;
(e) Total Interest Report;
(f) Total Principal Report;
(g) Delinquency Detail;
(h) Claims Delinquency Detail;
(i) Computation of interest and Special Allowance Payments (currently
reported on ED Form 799). Master Servicer will also report all pertinent
information to the Department of Education on ED Form 799 (or such successor
report as may be applicable);
(j) ED Form 799 Supporting Reports: Total Principal Report; Part II
Origination/Lender Fees; Part III, IV Interest Benefits and Special Allowance
Report; Part III, IV Prior Quarter Subsidized Interest and Special Allowance;
Part V Changes in Loan Principal; Part VI Loan Portfolio Analysis.
The Trust, NSLF, if applicable, and the Administrator shall receive at
no cost one copy of each of the foregoing reports. The Master Servicer will
cause the Subservicer to provide extra copies at the request of the Trust, the
Administrator or NSLF. The Trust or NSLF, if applicable, shall reimburse the
Master Servicer for the cost in producing such extra copies.
9. Service Fee to the Master Servicer.
(a) Servicing Fees. The Trust or NSLF, if applicable, shall pay to the
Master Servicer, on or before the 25th day of each month, or within fifteen (15)
days of billing statement (which may be sent either by the Master Servicer or
the Subservicer), for and in consideration of the services performed by the
Master Servicer and Subservicer hereunder for the preceding month, the fee
provided for in Schedule A of this Agreement ("Servicing Fee"). In the event
Servicing Fees are not paid within thirty (30) days of the billing statement,
the Trust agrees that the Master Servicer will have the following rights to (a)
impose a late charge of one and one-half percent (1 1/2%) per month against the
entire outstanding balance of the past due Servicing Fee including any prior
late charge; and (b) terminate services without notice if nonpayment persists
for sixty (60) days from billing or more. The Servicing Fee and related charges
shall be paid only from the Trust Estate and only to the extent moneys are
available as provided for under the terms of the Indenture.
(b) Carryover Servicing Fees. The late fees described in 9(a) above and
any future additional fees provided for under this Section 9(b) shall be
referred to collectively as "Carryover Servicing Fees," and payment of such
Carryover Servicing Fees shall be deferred during any time that funds are not
available and sufficient to pay the same pursuant to the terms of the Indenture.
The parties agree that should Master Servicer be required to make material
changes to its current servicing practices or servicing system due to changes to
the Education Act, Regulations, and/or business environment, or to other costs
beyond the Master Servicer's control, including but not limited to postal fees,
the Master Servicer may renegotiate the Servicing Fees with the Trust to
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reasonably reflect those increased costs at any time during the term of this
Agreement and that any additional fees imposed as a result of such renegotiation
shall be Carryover Servicing Fees. The Servicing Fee shall be subject to
renegotiation every three years, subject to the renegotiated fees meeting
approval of the Rating Agencies and any increase in the Servicing Fee as a
result of such renegotiation being deemed Carryover Servicing Fees. In the event
the parties cannot agree to new fees for each three year period, then either
party may terminate this Agreement upon 90 days written notice to the other.
10. Loan Payments. Student/parent borrowers will make all loan payments
to a third party lockbox established by the Subservicers. All cash receipts will
be remitted once a week to the Trustee for deposit into the Collection Fund. All
late fees collected by the Subservicers from student/parent borrowers shall be
remitted to the Trustee once a week for deposit into the Collection Fund as
well.
11. Disclosure of Information. All data, information, records,
correspondence, reports or other documentation received by the Master Servicer
or Subservicers pursuant to this Agreement from the Trust, the Administrator,
NSLF or the school which the student attended or from the student/parent
borrower, or prepared and maintained by the Master Servicer or Subservicers in
the course of its activities under this Agreement shall be released or divulged
only to the Trust, the Administrator, NSLF and the Trustee, or with respect to
information or documents relating to a particular student/parent borrower, to
that student/parent borrower, or to such other parties as the Master Servicer or
Subservicers may be directed in writing by the Trust, the Administrator, NSLF or
such student/parent borrower.
12. Intellectual Property Protection. Notwithstanding anything in this
Agreement to the contrary, it is the express intention of the parties to this
Agreement that all right, title and interest of whatever nature in the Master
Servicer's and/or Subservicers' user manuals, training materials, all computer
programs, routines, structures, layout, report formats, together with all
subsequent versions, enhancements and supplements to said programs, all
copyright rights (including both source and object code) and all oral or written
information relating to the Master Servicer's and/or Subservicers' programs
conveyed in confidence by the Master Servicer or Subservicers to the Trust, NSLF
or the Administrator pursuant to this Agreement which is not generally known to
the public and which give the Master Servicer or Subservicers an advantage over
their respective competitors who do not know or use such information
(hereinafter collectively referred to as "Trade Secrets"), and all other forms
of intellectual property of whatever nature is and shall remain the sole and
exclusive property of the Master Servicer and/or Subservicers.
13. Inquiries. The Master Servicer shall answer or shall cause the
Subservicers to answer all inquiries received by it pertaining to Education
Loans, school status or refunds, and the Trust, NSLF and the Administrator shall
cooperate to the extent necessary to gather the information needed to answer
such inquiries. Such inquiries may be referred to the school which the Student
Borrower attended or is attending, if necessary. Neither the Master Servicer nor
Subservicers shall have any responsibility for any disputes between
student/parent borrowers and schools regarding tuition, registration,
attendance, or quality of education/training.
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14. Agent Authorization. The Trust and NSLF hereby authorize the Master
Servicer and Subservicers to act on behalf of and as the Trust's and NSLF's
agent, respectively, in the servicing of the Education Loans. Such authorization
will include but not be limited to all correspondence and liaison necessary with
Guarantor regarding the Trust's or NSLF's Education Loans, assignment of claims
to Guarantor and any or all other communications, correspondence, signatures or
other acts appropriate to service the Trust's or NSLF's Education Loans in
accordance with the Education Act and/or Regulations.
15. Liability of the Master Servicer and Subservicers. The Master
Servicer and the Subservicers assume no responsibility or liability for failure
of the Trust or NSLF to exercise reasonable care or due diligence and the
results thereof, in making or servicing an Education Loan prior to placing of
the Education Loan on Master Servicer's system and prior to the date the Trust
or NSLF holds ownership of the Education Loan. The Master Servicer and
Subservicers also assume no liability for the failure of any student/parent
borrower to repay his or her loan, nor the failure of the United States
government to pay any principal, interest, subsidy or special allowance, nor for
the failure of Guarantor to make payment of any principal and/or interest on any
of the Trust's or NSLF's Education Loans. The Master Servicer and Subservicers
shall not be responsible for consequences of unreasonable acts of any Guarantor.
In the event Subservicers shall take any action or fail to take any action which
causes any Education Loan in the Trust's or NSLF's portfolio to be denied the
benefit of any applicable guarantee, the Master Servicer and Subservicers shall
have a reasonable time to cause the benefits of the guarantee to be reinstated.
If the guarantee is not reinstated within twelve (12) months of denial by
Guarantor, the Master Servicer shall cause the Subservicers to pay the Trust or
NSLF an amount equal to the outstanding principal balance plus all accrued
interest and other fees due on the Education Loan to the date of purchase, less
the amount subject to the risk sharing under the Education Act and Regulations,
and thereupon the Subservicers shall be subrogated to all rights of the Trust
and NSLF respecting the applicable Education Loan, including without limitation
the right to collect on the Education Loan, the right to federal subsidies, and
agency authorization to litigate in accordance with the Subrogation Agreement
with the Subservicers. In such event, the Trust or NSLF agrees to perform such
further applicable acts as shall be necessary or appropriate to subrogate the
Education Loan to the Subservicers. For any subrogated Education Loan for which
the guarantee is fully reinstated by Guarantor, the Trust or NSLF, as
applicable, shall pay the Subservicers an amount equal to the then outstanding
principal balance plus all accrued interest due thereon, less the amount subject
to the risk sharing under the Education Act and Regulations, whereupon the
subrogation rights of the Subservicers shall terminate. In such event, the
Master Servicer agrees to cause the Subservicers to perform such further acts as
shall be necessary or appropriate to reconvey the Education Loan to the Trust or
NSLF. It is hereby acknowledged that the Master Servicer shall not be performing
any of the servicing activities described in this Agreement, and that the
Subservicers shall be responsible for performance of all such servicing duties.
As such, the Master Servicer shall have no liability of any nature whatsoever
arising out of or in connection with this Agreement for any negligent or
wrongful act or omission on the part of the Subservicers; provided, however,
that the Master Servicer hereby assigns, transfers and sets over unto the Trust
or NSLF, as applicable, all of the Master Servicer's rights and remedies against
the Subservicers as they pertain to the Trust's or NSLF's Education Loans.
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16. Termination Option. If at any time during the term of this
Agreement any party refuses or fails to perform in a material fashion any
portion of this Agreement, and fails or refuses to correct said action or lack
of action within thirty (30) days after receipt of written notice, the other
party may, upon thirty (30) days written notice, terminate this Agreement.
Without limiting the generality of the foregoing sentence, the following shall
be deemed a failure or refusal to perform in a material fashion: (i) failure by
any Subservicer to make deposits to the Trustee of payments received with
respect to the Education Loans, (ii) failure or refusal to perform in any
material fashion any portion of this Agreement, including any failure to perform
or observe in any material respect any covenants or agreements contained herein,
or (iii) becoming subject to an event of bankruptcy. An event of bankruptcy
shall mean the commencement of a voluntary case or other proceeding seeking
liquidation, reorganization or other relief under any bankruptcy, insolvency or
other similar law, or seeking the appointment of a trustee, receiver,
liquidator, custodian, or other similar official, making a general assignment
for the benefit of creditors, declaring a moratorium with respect to one's debts
or failure to generally pay one's debts as they become due, or the commencement
of an involuntary case or other proceeding seeking liquidation, reorganization
or other relief under any bankruptcy, insolvency or other similar law, or
seeking the appointment of a trustee, receiver, liquidator, custodian or other
similar official, provided such action is not dismissed within 60 days. If any
default occurs as the result of the failure or refusal of a Subservicer to
perform, Master Servicer shall have the right, without any obligation, to cure
or correct such default of such Subservicer within thirty (30) days after
receipt of notice. If at any time the Master Servicer defaults by failure or
refusal to perform in a material fashion and such default remains unremedied
within thirty (30) days after receipt of written notice, then the Trustee or the
holders of not less than 25% of the Highest Priority Obligations may terminate
all the rights and obligations of Master Servicer upon thirty (30) days' written
notice. Following termination by the Trustee or the holders of not less than 25%
of the Highest Priority Obligations as provided above, a successor master
servicer appointed by the holders of not less than 25% of the Highest Priority
Obligations or the Trustee, or the Trustee itself, shall succeed to all the
responsibilities, duties and liabilities of Master Servicer under this Agreement
and will be entitled to similar compensation arrangements, upon receipt of a
Rating Confirmation; such compensation may not be greater than the servicing
fees to Master Servicer pursuant to this Agreement, unless such compensation
will not result in a downgrading or withdrawal of the then ratings of the Notes.
If the Trustee is unable or unwilling to act as successor to the Master
Servicer, the Trustee may appoint, or petition a court of competent jurisdiction
for appointment of, a successor whose regular business includes the servicing of
Education Loans. The holders of a majority of the Highest Priority Obligations,
in the case of any Master Servicer default which does not adversely affect the
Trustee or the holders of a majority of the Highest Priority Obligations may, on
behalf of all Noteholders, waive any default by the Master Servicer hereunder,
except a default in making any required deposits to or payments from any of the
funds established under the Indenture. No waiver will impact the Noteholders'
rights as to subsequent defaults. Failure to service an Education Loan in
accordance with the Education Act and Regulations, even if such failure results
in such Education Loan being denied the benefit of any applicable guarantee,
shall not be a material breach of this Agreement so long as the guarantee on
such affected Education Loan is reinstated or the Master Servicer and/or
Subservicers pay the Trust or NSLF the outstanding principal balance and all
accrued interest thereon, less the amount (if any) subject to risk sharing under
the Education Act and Regulations, all in accordance with Section 15 hereof.
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17. Indemnification. The Trust and NSLF shall indemnify and hold the
Master Servicer and/or Subservicers harmless from and against all claims,
liabilities, losses, damages, costs and expenses (including reasonable
attorney's fees) asserted against or incurred by the Master Servicer and/or
Subservicers as a result of the Master Servicer and/or Subservicers complying
with any instruction or directive by the Trust, NLSF or the Administrator, and
the Master Servicer and/or Subservicers shall in like manner indemnify the Trust
and NSLF for any miscompliance with any such instruction or directive by the
Master Servicer and/or Subservicers. The Trust and NSLF shall further indemnify
and hold the Master Servicer and/or Subservicers harmless from and against all
claims, liabilities, losses, damages, costs and expenses (including reasonable
attorney's fees) asserted against or incurred by the Master Servicer and/or
Subservicers as a result of actions not the fault of or not caused by a
negligent act of the Master Servicer and/or Subservicers, and their respective
agents or employees, including all claims, liabilities, losses, damages and
costs caused by or the fault of the Trust or NSLF, a prior holder, owner or NSLF
or the Trust, a prior servicer or any other party connected in any manner to the
loan or loans resulting in the claim, liability, loss, damage or cost. All
obligations of the Trust shall be subject to the provisions, including the
priority of payments, set forth in the Indenture.
18. Statute of Limitations. Any action for the breach of any provisions
of this Agreement shall be commenced within one (1) year after the Education
Loan leaves the Master Servicer's servicing system.
19. Governing Law. This Agreement is executed and delivered within the
State of Colorado, and the parties hereto agree that it shall be construed,
interpreted and applied in accordance with the laws of that State, and that the
courts and authorities within the State of Colorado shall have sole jurisdiction
and venue over all controversies which may arise with respect to the execution,
interpretation and compliance with this Agreement.
20. Changes In Writing. This Agreement, including this provision
hereof, shall not be modified or changed in any manner except only by a writing
signed by all parties hereto.
21. Severability. In the event a court of competent jurisdiction finds
any of the provisions of this Agreement to be so overly broad as to be
unenforceable or invalid for any other reason, it is the parties' intent that
such invalid provisions be reduced in scope or eliminated by the court, but only
to the extent deemed necessary by the court to render the provisions of this
Agreement reasonable and enforceable.
22. Persons Bound. This Agreement shall be binding upon and inure to
the benefit of the parties hereto, their legal representatives, heirs,
successors and assigns.
23. Assignment. This Agreement shall not be assigned by either party
without the prior written consent of the other party which consent shall not be
unreasonably withheld; provided, however, that the Trust or NSLF may assign this
Agreement to the Trustee subject to the terms of Section 32 hereof, and the
Master Servicer may delegate the services required to be performed under this
Agreement or assign this Agreement to Subservicers. Any such delegation or
assignment of this Agreement to Subservicers, other than to Nelnet, may be made
only (i) upon notice to the Rating Agencies, and (ii) if the Subservicer is not
an Affiliate of the Master Servicer, upon receipt of a Rating Confirmation.
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24. Mutual Release. Each of the parties to this Agreement releases the
other party from any and all claims, or causes of the other arising from any
event or transaction occurring prior to the execution of this Agreement. This
release is an independent covenant between the parties, and will survive any
termination of this Agreement.
25. Titles. The titles used in this Agreement are intended for
convenience and reference only. They are not intended and shall not be construed
to be a substantive part of this Agreement or in any other way to affect the
validity, construction or effect of any of the provisions of this Agreement.
26. Waiver. The waiver or failure of either party to exercise in any
respect any right provided for herein shall not be deemed a waiver of any
further right hereunder.
27. Continuity of Loan Servicing.
27.1 Other than Education Loans sold by the Trustee pursuant to Section
10.04 of the Indenture, the Trust hereby agrees that it will use its best
efforts to ensure that all Education Loans acquired, held, or sold by the Trust
under the Education Act and subject to this Agreement will remain with the
Master Servicer for the full term of this Agreement.
27.2 In the event the Trust desires to sell any of its Education Loans
(other than pursuant to Section 10.04 of the Indenture), the Trust will first
attempt to sell the Education Loans to an eligible lender maintaining an
agreement with the applicable Subservicer, in order for the sale to cause no
disruption in service, or change in Subservicer for the Borrower. Other than
Education Loans sold pursuant to Section 10.04 of the Indenture, should the
Trust (or the Trustee) decide to sell its Education Loans to an eligible lender
or holder which does not maintain an agreement with the Subservicers and does
not plan to have the Education Loans serviced by the applicable Subservicer, the
Master Servicer is hereby granted the right to arrange for the purchase of such
Education Loans by an eligible lender or holder maintaining an agreement with
the applicable Subservicer. Such purchase must be arranged within thirty (30)
days following the notice by the Trust or the Administrator of an intent to sell
such Education Loans, which notice must include sufficient information with
respect to the Education Loans to be sold. The Master Servicer has the right to
arrange for the sale of such Education Loans, provided the Master Servicer is
able to arrange for the sale of the Education Loans offering the same terms
secured by the Trust in its efforts to sell such Education Loans, subject to the
continuing servicing rights granted to the Subservicers.
27.3 Sections 27.1 and 27.2 do not apply in the event of the Master
Servicer's breach or default hereunder, or with respect to a sale of the
Education Loan to a holder of other loans for the same borrower.
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27.4 The intent of this Section 27 is to assure that every Education
Loan will remain with the Subservicers for servicing for the life of the loan.
28. Removal Fee. Should the Trust remove any of its Education Loans
from a Subservicer's system prior to a scheduled termination or breach of this
Agreement, the Trust agrees to pay to the Master Servicer a removal fee of
Fifteen Dollars ($15.00) per loan transferred off such Subservicer's computer
system, this removal fee shall be in addition to those charges described in
Section 2.2 of this Agreement, and in addition to damages arising from a breach
of Section 27 hereof.
29. Force Majeure. The foregoing provisions of this Agreement are
subject to the following limitation: If by reason of a force majeure the Master
Servicer and/or Subservicers are unable in whole or in part to carry out any
agreement on its part herein contained, the Master Servicer and Subservicers
shall not be deemed in default during the continuance of such inability. The
term "force majeure" as used herein shall mean, without limitation, the
following: acts of God, strikes, lockouts, or other industrial disturbances;
acts of public enemies; order or restraint of any kind of the government of the
United States of America or of the State of Colorado or City of Aurora or any of
their departments, agencies or officials, or any civil or military authority;
insurrections; riots; landslides; earthquakes; fires; storms; droughts; floods;
explosions; breakage or accident to machinery, equipment, transmission pipes or
canals; or any other cause or event not reasonably within the control of the
Master Servicer and/or Subservicers.
30. Hiring. The Trust and NSLF agree that during the term of this
Agreement and any extensions or renewals thereof, and for one year thereafter,
neither the Trust nor NSLF shall solicit for hire, or knowingly allow its
employees to solicit for hire, any employees of the Master Servicer and
Subservicers without the prior written consent of the Master Servicer or
Subservicers, respectively.
31. Entire Agreement. This is the entire and exclusive statement of the
agreement between the parties, which supersedes and merges all prior proposals,
understandings and all other agreements oral and written, between the parties
relating to this Agreement.
32. Trustee as Third Party Beneficiary. This Agreement has been made
and entered into not only for the benefit of the Master Servicer, the Trust and
NSLF but also for the benefit of the Trustee in connection with the financing of
Eligible Loans, and upon assignment by the Trust to the Trustee, its provisions
may be enforced not only by the parties to this Agreement but by the Trustee.
The foregoing creates a permissive right on behalf of the Trustee and the
Trustee shall be under no duties or obligations hereunder.
This Agreement shall inure to the benefit of the Trustee and its
successors and assigns. Without limiting the generality of the foregoing, all
representations, covenants and agreements in this Agreement which expressly
confer rights upon the Trustee shall be for the benefit of and run directly to,
the Trustee, and the Trustee shall be entitled to rely on and enforce such
representations, covenants and agreements to the same extent as if it were a
party hereto. The foregoing creates a permissive right on behalf of the Trustee,
and the Trustee shall be under no duties or obligations hereunder.
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If there is an Event of Default under the Indenture, the Trustee
forecloses on its security interest on the Education Loans, and the Trustee
seeks to become a party to this Agreement under this Section 32, then the
Trustee shall assume all duties and obligations of the Trust hereunder, in
accordance with and subject to the Indenture.
33. Servicing for NSLF. The Master Servicer agrees to perform all
covenants, duties and obligations of the Master Servicer as set forth in this
Agreement with respect to Education Loans owned by or on behalf of NSLF (or its
eligible lender trustee) and NSLF agrees to perform all covenants, duties and
obligations of the Trust as set forth in this Agreement with respect to such
Education Loans, all under the terms and conditions contained in this Agreement.
34. Limitation of Liability of Delaware Trustee. Notwithstanding
anything contained herein to the contrary, this Agreement has been executed by
Wilmington Trust Company, not in its individual capacity, but solely in its
capacity as Delaware Trustee, and in no event shall Wilmington Trust Company in
its individual capacity or any beneficial owner of the Trust have any liability
for the representations, warranties, covenants, agreements or other obligations
of the Trust hereunder, as to all of which recourse shall be had solely to the
assets of the Trust.
35. No Petition. The Master Servicer will not at any time institute
against the Trust any bankruptcy proceeding under any United States federal or
state bankruptcy or similar law in connection with any obligations of the Trust
under this Agreement.
[REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]
12
IN WITNESS WHEREFORE, the parties hereto have executed this Agreement as
of the date first written above.
National Education Loan Network, Nelnet Student Loan Trust 2004-4,
f/k/a Nelnet, Inc., a Nevada a Delaware Statutory Trust
corporation, as Master Servicer
By: Wilmington Trust Company, not
in its individual capacity, but
solely as Delaware Trustee
By: /s/ Terry J. Heimes By: /s/ Janel R. Havrilla
------------------------------- -----------------------------
Name: Terry J. Heimes Name: Janel R. Havrilla
Title: Chief Financial -----------------------------
Officer/Executive Director (Please print)
Title: Financial Services Officer
National Education Loan Network, Inc., Nelnet Student Loan Funding, LLC,
f/k/a Nelnet, Inc., a a Delaware limited liability
Nevada corporation, as Administrator company
By: Nelnet Student Loan Funding
Management Corporation as
Manager and Special Member
By: /s/ Terry J. Heimes By: /s/ Jeffrey R. Noordhoek
------------------------------- ---------------------------------
Name: Terry J. Heimes Name: Jeffrey R. Noordhoek
Title: Chief Financial Title: Vice President
Officer/Executive Director
13
SCHEDULE "A"
A. Loan Origination Fee (Where Applicable).
Six Dollars ($6.00) per loan for Stafford, SLS and PLUS loan.
Fifty-five Dollars ($55.00) per loan for Consolidated loans (if
applicable). In addition, reimbursement for costs in the event a credit
evaluation of the borrower is to be performed by the Master Servicer.
B. Conversion Fee.
Five Dollars ($5.00) per account acquired by the Trust and added to the
Subservicer Servicing System during the period of time the borrower is
in school. For periods of time other than when the borrower is in
school, the fee will be Ten Dollars ($10.00) per account. There shall
be no charge for loans already on the Master Servicer's full servicing
system.
Notwithstanding the foregoing, should any portfolio present an
"Extraordinary Conversion", requiring additional conversion services
materially beyond that customarily provided for a normal acquisition of
Education Loans, then the Trust agrees to pay a conversion fee mutually
agreed to between the Trust and the Master Servicer.
For purposes of this Agreement, whether a portfolio presents an
Extraordinary Conversion shall be determined after the data analysis
and file review, have been conducted of the portfolio by the Master
Servicer. Factors to consider in determining whether a portfolio
presents an Extraordinary Conversion are as follows:
1. Unprocessed data.
2. Degree to which the conversion may be automated versus manual.
3. Integrity of the documentation. Are the files complete? Does the
data match the file content?
4. The Trust adherence to its obligations and delivery schedules.
5. Presence of backlogged processing in the portfolio.
6. Whether prior servicing had substantial noncompliance with the
Education Act and Regulations.
14
7. Condition of the hard copy file documentation.
After consideration of the foregoing factors, the Trust and the Master
Servicer agree to come to mutual agreement at the beginning and once
again at the end of the conversion of a particular portfolio as to
whether they need to negotiate a mutually agreeable conversion fee.
C. Internal Transfers. Transfers from one customer identification number
to a different customer identification number will be One Dollar and
Fifty Cents ($1.50) per account transferred.
D. Monthly Servicing Fee - GSL (Stafford) Loans in School, Grace,
Deferment or Forebearance Status.
0.90% annualized, plus Carry-Over Servicing Fees
E. Monthly Servicing Fee - GSL (Stafford, PLUS, SLS) Loans in Repayment
Status.
0.90% annualized plus Carry-Over Servicing Fees
F. Consolidated Loans.
0.50% annualized, plus Carry-Over Servicing Fees
G. Billing for Servicing Fees.
The full monthly servicing fee shall be paid commencing with the
calendar month an account is disbursed on or converted to the
Subservicer system.
H. Additional Servicing Activity.
Thirty-five Dollars ($35.00) per Education Loan referred for such cure
services, plus ten percent (10%) of all sums made eligible for
reinstatement of guarantee (including principal, interest and special
allowance) as a result of successful performance of the Cure Procedures
required by Guarantor. (This fee shall not apply to loans that have
lost their guarantee due to an error or omission of the Master
Servicer.)
I. Minimum Monthly Fee.
There will be a minimum monthly fee of Seven Hundred and Fifty Dollars
($750.00) per month.
J. Removal Fee. Loans transferred off the Subservicer Servicing System
prior to termination of this Agreement will be assessed a fee of
Fifteen Dollars ($15.00) per account.
K. Deconversion Fee. Loans transferred off the Subservicer Servicing
System on or after termination of this Agreement will be assessed a fee
of Twelve Dollars ($12.00) per account.
15
L. Reconciliation of Guarantee Billing.
Eighty cents ($.80) per account for the first disbursement.
M. PLUS (or Other Loan) Loan Credit Checks. Fees for obtaining a credit
bureau report and evaluation will be Two Dollars and Fifty Cents
($2.50) per loan application. An additional fee of Fifty Cents ($.50)
will be charged for those applications in which written authorization
must first be obtained prior to pulling a credit bureau report.
N. Other Services
For services requested by the Trust that are beyond the scope of those
described in this Agreement, the fees shall be assessed as follow:
(1) Supplies Cost Plus 15%
(2) Training $40.00 per hour
(3) Programming $70.00 per hour
(4) Consulting $80.00 per hour
Projects and services of this type shall be provided only after request
by the Trust and after time and total cost estimate is provided by the
Master Servicer.
O. Legal Opinions
Cost plus five percent (5%).
16
EXHIBIT 99.3
ADMINISTRATION AGREEMENT
among
NELNET STUDENT LOAN TRUST 2004-4,
as Issuer
WILMINGTON TRUST COMPANY,
as Delaware Trustee,
ZIONS FIRST NATIONAL BANK,
as Indenture Trustee
and
NATIONAL EDUCATION LOAN NETWORK, INC., f/k/a NELNET, INC.,
as Administrator
Dated as of September 1, 2004
Table of Contents
Page
Section 1. Duties of the Administrator..................................2
Section 2. Statements to Registered Owners..............................3
Section 3. Annual Statements as to Compliance; Notice of Default;
Financial Statements.......................................4
Section 4. Representations of Administrator.............................4
Section 5. Liability of Administrator; Indemnities......................5
Section 6. Limitation on Liability of Administrator and Others..........7
Section 7. Administrator May Own Notes..................................7
Section 8. Records......................................................7
Section 9. Compensation.................................................7
Section 10. Additional Information to be Furnished.......................7
Section 11. Independence of the Administrator............................7
Section 12. No Joint Venture.............................................8
Section 13. Other Activities of the Administrator........................8
Section 14. Term of Agreement; Resignation and Removal of
Administrator; Waiver of Past Defaults.....................8
Section 15. Action upon Termination, Resignation or Removal..............9
Section 16. Notices.....................................................10
Section 17. Amendments..................................................10
Section 18. Successors and Assigns......................................10
Section 19. Governing Law...............................................11
Section 20. Headings....................................................11
Section 21. Counterparts................................................11
Section 22. Severability................................................11
Section 23. Limitation of Liability of Delaware Trustee and Indenture
Trustee...................................................11
Section 24. No Petition.................................................11
EXHIBIT A POWER OF ATTORNEY
EXHIBIT B ADMINISTRATOR INSTRUCTION CERTIFICATE NELNET STUDENT LOAN
TRUST 2004-4
THIS ADMINISTRATION AGREEMENT dated as of September 1, 2004 (as amended
from time to time, this "Administration Agreement"), among NELNET STUDENT LOAN
TRUST 2004-4, a Delaware statutory trust (the "Issuer"), WILMINGTON TRUST
COMPANY, a Delaware trust company, not in its individual capacity but solely as
Delaware Trustee (the "Delaware Trustee"), ZIONS FIRST NATIONAL BANK, a national
banking association, not in its individual capacity but solely as Indenture
Trustee (in such capacity, the "Indenture Trustee") and NATIONAL EDUCATION LOAN
NETWORK, INC. f/k/a NELNET, INC., a Nevada corporation, as Administrator (the
"Administrator"),
W I T N E S S E T H :
WHEREAS, the Issuer will issue its (a) Student Loan Asset-Backed Notes
Series 2004-4 (the "Notes") pursuant to an Indenture of Trust, dated as of
September 1, 2004, among the Issuer, Zions First National Bank, as eligible
lender trustee and the Indenture Trustee (together with any Supplemental
Indentures and any amendments thereto made in accordance with their respective
terms, the "Indenture"); and (b) its Trust Certificates pursuant to a Trust
Agreement, dated as of September 1, 2004 (the "Trust Agreement"), between the
Delaware Trustee and Nelnet Student Loan Funding, LLC, as sponsor (together with
its successors in interest, the "Sponsor"); and
WHEREAS, pursuant to an Eligible Lender Trust Agreement, dated as of
September 1, 2004 (the "Eligible Lender Agreement"), between the Issuer and
Zions First National Bank, as eligible lender trustee (the "Eligible Lender
Trustee"), the Eligible Lender Trustee shall hold legal title to the Financed
Eligible Loans acquired by the Issuer as beneficial owner; and
WHEREAS, pursuant to the Indenture, the Issuer is assigning its
interests in the Financed Eligible Loans and other collateral (the "Collateral")
to the Indenture Trustee; and
WHEREAS, the Issuer and the Delaware Trustee desire to have the
Administrator perform certain of the duties of the Issuer and the Delaware
Trustee referred to in the Indenture, the Trust Agreement, the Derivative
Products, the Servicing Agreement, the Student Loan Purchase Agreement, the
Custodian Agreements and the Eligible Lender Trust Agreement (each defined in
the Indenture) (collectively, the "Basic Documents") and any other documents
signed by the Delaware Trustee on behalf of the Issuer or required by the Higher
Education Act with respect to the Financed Eligible Loans (collectively with the
Basic Documents, the "Trust Related Agreements") and to provide such additional
services consistent with the terms of this Administration Agreement and the
Trust Related Agreements as the Issuer and the Delaware Trustee may from time to
time request; and
WHEREAS, the Administrator has the capacity to provide the services
required hereby and is willing to perform such services for the Issuer and the
Delaware Trustee on the terms set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and other good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties agree as follows:
Capitalized terms used and not otherwise defined herein shall have the
meanings assigned to such terms in the Basic Documents.
1
Section 1. Duties of the Administrator.
(a) Duties with Respect to the Trust Related Agreements. The
Administrator is authorized and directed to execute and deliver on
behalf of the Issuer the Basic Documents to which the Issuer is a party
and each certificate or other document attached as an exhibit to or
contemplated by such Basic Documents, to the extent not otherwise
executed and delivered by the Issuer. The Administrator agrees to
perform all its duties as Administrator, the duties of the Issuer under
the Trust Related Agreements and to act as Calculation Agent under the
Derivative Products. In addition, the Administrator shall consult with
the Delaware Trustee regarding the duties of the Issuer and the Delaware
Trustee under the Trust Related Agreements. The Administrator shall
monitor the performance of the Issuer and shall advise the Indenture
Trustee and the Delaware Trustee when action is necessary to comply with
the Issuer's duties under the Trust Related Agreements. The
Administrator shall prepare for execution by the Issuer, or shall cause
the preparation by other appropriate persons or entities of, all such
documents, reports, filings, instruments, certificates and opinions that
it shall be the duty of the Issuer to prepare, file or deliver pursuant
to the Trust Related Agreements. In furtherance of the foregoing, the
Administrator shall take all appropriate action that is the duty of the
Issuer to take pursuant to the Trust Related Agreements or under the
Higher Education Act.
(b) Additional Duties.
(i) In addition to the duties of the Administrator set
forth above, the Administrator shall perform, or cause to be
performed, its duties and obligations and the duties and
obligations of the Delaware Trustee on behalf of the Issuer
under the Trust Agreement.
(ii) In furtherance of the foregoing, the Issuer shall
execute and deliver to the Administrator and to each successor
Administrator appointed pursuant to the terms hereof, one or
more powers of attorney substantially in the form of Exhibit A
hereto, appointing the Administrator the attorney-in-fact of the
Issuer for the purpose of executing on behalf of the Issuer all
such documents, reports, filings, instruments, certificates and
opinions.
(iii) In carrying out the foregoing duties or any of its
other obligations under this Administration Agreement, the
Administrator may enter into transactions or otherwise deal with
any of its affiliates; provided, however, that the terms of any
such transactions or dealings shall be in accordance with any
directions received from the Issuer or the Delaware Trustee and
shall be, in the Administrator's opinion, no less favorable to
the Issuer than would be available from unaffiliated parties.
(iv) In carrying out any of its obligations under this
Administration Agreement, the Administrator may act either
directly or through agents, attorneys, accountants, independent
contractors or auditors and enter into agreements with any of
them.
2
(c) Non-Ministerial Matters.
(i) With respect to matters that in the reasonable
judgment of the Administrator are non-ministerial, the
Administrator shall not be under any obligation to take any
action, and in any event shall not take any action, unless the
Administrator shall have received instructions from the Delaware
Trustee or the Sponsor. For the purpose of the preceding
sentence, "non-ministerial matters" shall mean:
(A) the amendment of or any supplement to the
Trust Related Agreements;
(B) the initiation of any action, claim or
lawsuit by the Issuer and the compromise of any action,
claim or lawsuit brought by or against the Issuer,
except for actions, claims or lawsuits initiated in the
ordinary course of business by the Issuer or its agents
or nominees for the collection of amounts owed in
respect of Financed Eligible Loans;
(C) the appointment of successor Administrators,
Delaware Trustee and successor Indenture Trustees
pursuant to the Indenture, or the consent to the
assignment by the Administrator or Indenture Trustee of
its obligations under the Indenture;
(D) the removal of the Indenture Trustee or the
Delaware Trustee; and
(E) the amendment, change or modification of
this Administration Agreement or any Trust Related
Agreement, except for amendments, changes or
modifications that do not either (1) reduce in any
manner the amount of, or delay the timing of, or
collections of payments with respect to the Financed
Eligible Loans or (2) materially reduce the underwriting
standards with respect to the Financed Eligible Loans.
(ii) Notwithstanding anything to the contrary in this
Administration Agreement, the Administrator shall not be
obligated to, and shall not (A) make any payments to the
Registered Owners under the Trust Related Agreements, (B) sell
the Trust Estate pursuant to the Indenture or (C) take any
action that the Issuer directs the Administrator not to take on
its behalf.
Section 2. Statements to Registered Owners. Two days preceding a
Distribution Date, the Administrator shall provide to the Indenture Trustee
(with a copy to the Rating Agencies) solely for the purpose of having the
Indenture Trustee forward on such succeeding Distribution Date to each
Registered Owner of record, a certificate in the form of Exhibit B hereto to the
extent applicable:
The Indenture Trustee may conclusively rely on this Instruction with no
further duty to examine or determine the information herein.
3
Section 3. Annual Statements as to Compliance; Notice of Default;
Financial Statements.
(a) The Administrator shall deliver to the Indenture Trustee and
to the Rating Agencies on or before 120 days after the end of the fiscal
year of the Administrator, an Officer's Certificate of the Administrator
dated as of December 31 of the preceding year, stating that (i) a review
of the activities of the Administrator during the preceding 12-month
period (or, in the case of the first such certificate, during the period
from the Closing Date to December 31, 2004) and of its performance under
this Administration Agreement has been made under such Officer's
supervision and (ii) to the best of such officer's knowledge, based on
such review, the Administrator has fulfilled its obligations in all
material respects under this Administration Agreement or, if there has
been a material default in the fulfillment of any such obligation,
specifying each such material default known to such Officer and the
nature and status thereof. A copy of each such Officer's Certificate and
each report referred to in the preceding Section 2 may be obtained by
any Registered Owner by a request in writing to the Indenture Trustee
addressed to its Corporate Trust Office, together with evidence
satisfactory to the Indenture Trustee that such Person is one of the
foregoing parties.
(b) The Administrator shall deliver to the Indenture Trustee and the
Rating Agencies, promptly after having obtained knowledge
thereof, but in no event earlier than (15) Business Days prior
to such default, written notice in an Officer's Certificate of
the Administrator of any event which with the giving of notice
or lapse of time, or both, would become a default of the
Administrator hereunder.
Section 4. Representations of Administrator. The Administrator makes the
following representations. The representations speak as of the execution and
delivery of this Administration Agreement and as of the Closing Date and shall
survive the sale of the Financed Eligible Loans to the Issuer and the pledge
thereof to the Indenture Trustee pursuant to the Indenture.
(a) Organization and Good Standing. The Administrator is duly
organized and validly existing under the laws of the State of Nevada,
with the power and authority to own its properties and to conduct its
business as such properties are currently owned and such business is
presently conducted.
(b) Power and Authority. The Administrator has the corporate
power and authority to execute and deliver this Administration Agreement
and to carry out its terms, and the execution, delivery and performance
of this Administration Agreement have been duly authorized by the
Administrator by all necessary corporate action.
(c) Binding Obligation. This Administration Agreement
constitutes a legal, valid and binding obligation of the Administrator
enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization and similar laws relating to
creditors' rights generally and subject to general principles of equity.
4
(d) No Violation. The consummation of the transactions
contemplated by this Administration Agreement and the fulfillment of the
terms hereof or thereof do not conflict with, result in any breach of
any of the terms and provisions of, nor constitute (with or without
notice or lapse of time or both) a default under, the charter or bylaws
of the Administrator, or any indenture, agreement or other instrument to
which the Administrator is a party or by which it shall be bound; nor
result in the creation or imposition of any lien upon any of its
properties pursuant to the terms of any such indenture, agreement or
other instrument (other than pursuant to the Trust Related Agreements);
nor violation of any law or, to the knowledge of the Administrator, any
order, rule or regulation applicable to the Administrator of any court
or of any Federal or state regulatory body, administrative agency or
other governmental instrumentality having jurisdiction over the
Administrator or its properties.
(e) No Proceedings. There are no proceedings or investigations
pending against the Administrator or threatened against the
Administrator, before any court, regulatory body, administrative agency
or other governmental instrumentality having jurisdiction over the
Administrator or its properties: (i) asserting the invalidity of this
Agreement or any of the other Trust Related Agreements or (ii) seeking
to prevent the issuance of the Notes or the consummation of any of the
transactions contemplated by this Administration Agreement or any of the
other Trust Related Agreements, (iii) seeking any determination or
ruling that could reasonably be expected to have a material and adverse
effect on the performance by the Administrator of its obligations under,
or the validity or enforceability of, this Administration Agreement, any
of the other Trust Related Agreements or the Notes or (iv) seeking to
affect adversely the Federal or state income tax attributes of the
Issuer or the Notes.
(f) All Consents. All authorizations, consents, orders or
approvals of or registrations or declarations with any court, regulatory
body, administrative agency or other government instrumentality required
to be obtained, effected or given by the Administrator in connection
with the execution and delivery by the Administrator of this Agreement
and the performance by the Administrator of the transactions
contemplated by this Administration Agreement have been duly obtained,
effected or given and are in full force and effect.
Section 5. Liability of Administrator; Indemnities.
(a) The Administrator shall be liable in accordance herewith
only to the extent of the obligations specifically undertaken by the
Administrator under this Administration Agreement.
(b) The Administrator shall indemnify, defend and hold harmless
the Issuer, the Indenture Trustee and the Registered Owners and any of
the officers, directors, employees and agents of the Issuer from and
against any and all costs, expenses, losses, claims, damages and
liabilities to the extent that such cost, expense, loss, claim, damage
or liability arose out of, or was imposed upon any such Person through,
the negligence, misconduct or bad faith of the Administrator in the
performance of its duties under this Administration Agreement or by
reason of reckless disregard of its obligations and duties hereunder or
thereunder.
5
(c) The Administrator shall indemnify, defend and hold harmless
the Indenture Trustee and the Delaware Trustee in their individual
capacities and any of their respective officers, directors, employees
and agents against any and all loss, liability or expense (including
attorneys' fees) incurred by them in connection with the performance of
their duties under the Indenture and the other Trust Related Agreements.
The Indenture Trustee or the Delaware Trustee shall notify the Issuer
and the Administrator promptly of any claim for which it may seek
indemnity. Failure by the Indenture Trustee or the Delaware Trustee to
so notify the Issuer and the Administrator shall not relieve the Issuer
or the Administrator of its obligations hereunder and under the other
Trust Related Agreements. The Administrator shall defend the claim and
the Administrator shall not be liable for the legal fees and expenses of
the Indenture Trustee or the Delaware Trustee after it has assumed such
defense; provided, however, that, in the event that there may be a
conflict between the positions of the Indenture Trustee or the Delaware
Trustee, as applicable, and the Administrator in conducting the defense
of such claim, the Indenture Trustee or the Delaware Trustee, as
applicable, shall be entitled to separate counsel the fees and expenses
of which shall be paid by the Administrator on behalf of the Issuer.
Neither the Issuer nor the Administrator need reimburse any expense or
indemnify against any loss, liability or expense incurred by the
Indenture Trustee or the Delaware Trustee through the Indenture
Trustee's or Delaware Trustee's, as applicable, own willful misconduct,
negligence or bad faith.
(d) Without limiting the generality of the foregoing, the
Administrator shall indemnify, defend and hold harmless the Indenture
Trustee in its individual capacity and any of its officers, directors,
employees and against any and all liability relating to or resulting
from any of the following:
(i) any claim that the Financed Eligible Loans (or any
guarantee with respect thereto) are delinquent, uncollectible,
uninsured, illegal, invalid or unenforceable, as of the date of
acquisition;
(ii) any claim that the Financed Eligible Loans have not
been made, administered, serviced or collected in accordance
with applicable federal and state laws or the requirements of
any Guarantor, as of the date of acquisition; or
(iii) any claim that any original note or other document
evidencing or relating to the Financed Eligible Loans has been
lost, misplaced or destroyed, as of the date of acquisition.
(e) For purposes of this Section, in the event of the
termination of the rights and obligations of the Administrator (or any
successor thereto) as Administrator pursuant to the terms hereof or a
resignation by such Administrator pursuant to this Administration
Agreement, such Administrator shall be deemed to be the Administrator
pending appointment of a successor Administrator pursuant to Section 14
hereof. Indemnification under this Section shall survive the resignation
or removal of the Indenture Trustee or the termination of this Agreement
and shall include reasonable fees and expenses of counsel and expenses
of litigation. If the Administrator shall have made any indemnity
payments pursuant to this Section and the Person to or on behalf of whom
such payments are made thereafter collects any of such amounts from
others, such Person shall promptly repay such amounts to the
Administrator, without interest.
6
Section 6. Limitation on Liability of Administrator and Others.
(a) Neither the Administrator nor any of its directors,
officers, employees or agents shall be under any liability to the
Issuer, the Delaware Trustee, the Registered Owners or the Indenture
Trustee except as provided under this Administration Agreement for any
action taken or for refraining from the taking of any action pursuant to
this Administration Agreement or for errors in judgment; provided,
however, that these provisions shall not protect the Administrator or
any such person against any liability that would otherwise be imposed by
reason of willful misfeasance, bad faith or negligence in the
performance of duties or by reason of reckless disregard of obligations
and duties under this Administration Agreement. The Administrator and
any of its directors, officers, employees or agents may rely in good
faith on the advice of counsel or on any document of any kind, prima
facie properly executed and submitted by any Person respecting any
matters arising hereunder.
(b) Except as provided in this Administration Agreement, the
Administrator shall not be under any obligation to appear in, prosecute
or defend any legal action that shall not be incidental to its duties to
administer the Financed Eligible Loans and the Trust Estate in
accordance with this Administrator's Agreement and that in its opinion
may involve it in any expense or liability; provided, however, that the
Administrator may undertake any reasonable action that it may deem
necessary or desirable in respect of this Administration Agreement and
the other Trust Related Agreements and the rights and duties of the
parties to this Administration Agreement and the other Trust Related
Agreements and the interests of the Registered Owners under the
Indenture and this Administration Agreement.
Section 7. Administrator May Own Notes. The Administrator and any
Affiliate thereof may in its individual or any other capacity become the owner
or pledgee of Notes with the same rights as it would have if it were not the
Administrator or an Affiliate thereof, except as expressly provided herein or in
any other Trust Related Agreements.
Section 8. Records. The Administrator shall maintain appropriate books
of account and records relating to services performed hereunder, which books of
account and records shall be accessible for inspection by the Issuer, the
Indenture Trustee, the Registered Owners, the Delaware Trustee and the Sponsor
at any time during normal business hours.
Section 9. Compensation. As compensation for the performance of the
Administrator's obligations under this Administration Agreement and as
reimbursement for its expenses related thereto, the Administrator shall be
entitled to the Administration Fee payable as set forth in the Indenture. The
payment of the foregoing fee shall be solely an obligation of the Issuer,
payable out of the Trust Estate.
7
Section 10. Additional Information to be Furnished. The Administrator
shall furnish to the Issuer and the Indenture Trustee from time to time such
additional information regarding the Trust Estate as the Issuer or the Indenture
Trustee shall reasonably request.
Section 11. Independence of the Administrator. For all purposes of this
Administration Agreement, the Administrator shall be an independent contractor
and, notwithstanding its affiliation with the Issuer, shall not be subject to
the supervision of the Issuer, the Indenture Trustee or the Delaware Trustee
with respect to the manner in which it accomplishes the performance of its
obligations hereunder.
Section 12. No Joint Venture. Nothing contained in this Administration
Agreement (a) shall constitute the Administrator and any of the Issuer, the
Indenture Trustee, the Delaware Trustee or the Sponsor as members of any
partnership, joint venture, association, syndicate, unincorporated business or
other separate entity; (b) shall be construed to impose any liability as such on
any of them; or (c) shall be deemed to confer on any of them any express,
implied or apparent authority to incur any obligation or liability on behalf of
the others.
Section 13. Other Activities of the Administrator. Nothing herein shall
prevent the Administrator or its affiliates from engaging in other businesses
or, in its or their sole discretion, from acting in a similar capacity as an
Administrator for any other person or entity even though such person or entity
may engage in business activities similar to those of the Issuer, the Delaware
Trustee or the Indenture Trustee.
Section 14. Term of Agreement; Resignation and Removal of Administrator;
Waiver of Past Defaults.
(a) This Administration Agreement shall continue in force until
the dissolution of the Issuer or replacement of the Administrator, upon
which event this Administration Agreement shall automatically terminate.
(b) Subject to Section 14(e) and (f) hereof, the Administrator
may resign its duties hereunder by providing the Issuer, the Delaware
Trustee, the Sponsor and the Indenture Trustee with at least 60 days'
prior written notice.
(c) Subject to Section 14(e) and (f) hereof, the Issuer may
remove the Administrator without cause by providing the Administrator
with at least 60 days' prior written notice.
(d) Subject to Section 14(e), (f) and (g) hereof, the
Administrator may be removed immediately upon written notice of
termination from the Indenture Trustee, the Issuer or the holders of not
less than 25% of the Highest Priority Obligations to the Administrator
if any of the following events shall occur:
(i) the Administrator shall default in the performance
of any of its duties under this Administration Agreement and,
after notice of such default, shall not cure such default within
five days (or, if such default cannot be cured in such time, the
failure to give, within ten days, such assurance of cure as
shall be reasonably satisfactory to the Issuer);
8
(ii) the commencement by the Administrator of a
voluntary case or other proceeding seeking liquidation,
reorganization or other relief under any bankruptcy, insolvency
or other similar law, or seeking the appointment of a trustee,
receiver, liquidator, custodian, or other similar official,
making a general assignment by the Administrator for the benefit
of its creditors, the Administrator declaring a moratorium with
respect to its debts or failure by the Administrator to
generally pay its debts as they become due; or
(iii) the commencement in respect of the Administrator
of an involuntary case or other proceeding seeking liquidation,
reorganization or other relief under any bankruptcy, insolvency
or other similar law, or seeking by the Administrator of the
appointment of a trustee, receiver, liquidator, custodian or
other similar law, or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official,
provided such action is not dismissed within 60 days.
The Administrator agrees that if any of the events specified
in clause (ii) or (iii) of this Section shall occur, it shall give
written notice thereof to the Delaware Trustee, the Registered Owners,
the Indenture Trustee and the Rating Agencies within five Business
Days after the happening of such event. The Administrator agrees that
it will not commence or consent to the events specified in clause
(iii) without the prior written consent of the Issuer, the Indenture
Trustee and the Delaware Trustee for so long as any Note is
outstanding.
(e) No resignation or removal of the Administrator pursuant to
this Section 14 shall be effective until (i) a successor Administrator
shall have been appointed by the Indenture Trustee, the Issuer or the
holders of not less than 25% of the Highest Priority Obligations (with
the consent of the Delaware Trustee and the Indenture Trustee) and (ii)
shall have agreed in writing to be bound by the terms of this
Administration Agreement in the same manner and to the same extent as
the Administrator is bound hereunder.
(f) The appointment of any successor Administrator shall be
effective only if each Rating Agency shall have been given 10 days'
prior notice of such proposed appointment, and a Rating Confirmation
shall have been obtained with respect to such appointment.
(g) With respect to Section 14(d) above, the holders of a
majority of the Highest Priority Obligations may waive any default by
the Administrator which does not adversely affect the Indenture Trustee,
the Issuer or the holders of a majority of the Highest Priority
Obligations. No waiver of any Administrator default pursuant to this
Section 14(g) will impair the rights of the holders of a majority of the
Highest Priority Obligation to exercise rights with respect to future
Administrator defaults pursuant to Section 14(d) above.
9
Section 15. Action upon Termination, Resignation or Removal. Promptly
upon the effective date of termination of this Administration Agreement pursuant
to Section 14(a) hereof or the resignation or removal of the Administrator
pursuant to Section 14(b) or (c) hereof, respectively, the Administrator shall
be entitled to be paid all fees and reimbursable expenses accruing to it to the
date of such termination, resignation or removal. The Administrator shall
forthwith upon such termination pursuant to Section 14(a) hereof deliver to the
Issuer all property and documents of or relating to the Trust Estate then in the
custody of the Administrator. In the event of the resignation or removal of the
Administrator pursuant to Section 14(b) or (c) hereof, respectively, the
Administrator shall cooperate with the Issuer and take all reasonable steps
requested to assist the Issuer in making an orderly transfer of the duties of
the Administrator.
Section 16. Notices. Any notice, report or other communication given
hereunder shall be in writing and addressed as follows:
If to the Issuer, to: Nelnet Student Loan Trust 2004-4
c/o Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Attention: Corporate Trust Administration
If to the
Administrator, to: National Education Loan Network, Inc.
121 South 13th Street, Suite 201
Lincoln, Nebraska 68505
Attention: Terry J. Heimes
If to the Indenture
Trustee, to: Zions First National Bank
717 Seventeenth Street, Suite 301
Denver, Colorado 80202
Attention: Corporate Trust Department
If to the Delaware
Trustee, to: Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Attention: Corporate Trust Administration
or to such other address as any party shall have provided to the other parties
in writing. Any notice required to be in writing hereunder shall be deemed given
if such notice is mailed by certified mail, postage prepaid, or hand delivered
to the address of such party as provided above.
Section 17. Amendments. This Administration Agreement may be amended
from time to time by the parties hereto so long as a Rating Confirmation has
been obtained with respect to such amendment.
10
Section 18. Successors and Assigns. This Administration Agreement may
not be assigned by the Administrator unless such assignment is previously
consented to in writing by the Issuer, the Delaware Trustee and the Indenture
Trustee, and unless a Rating Confirmation has been obtained with respect to,
such assignment. An assignment with such consent and satisfaction, if accepted
by the assignee, shall bind the assignee hereunder in the same manner and to the
same extent as the Administrator is bound hereunder. Notwithstanding the
foregoing, this Administration Agreement may be assigned by the Administrator
without the consent of the Issuer, the Indenture Trustee or the Delaware Trustee
to a corporation or other organization that is a successor (by merger,
consolidation or purchase of assets) to the Administrator; provided that such
successor organization executes and delivers to the Issuer, the Delaware Trustee
and the Indenture Trustee an agreement in which such corporation or other
organization agrees to be bound hereunder by the terms of the assignment in the
same manner and to the same extent as the Administrator is bound hereunder, and
a Rating Confirmation shall have been obtained with respect to, such assignment.
Subject to the foregoing, this Administration Agreement shall bind any such
permitted successors or assigns of the parties hereto.
Section 19. Governing Law. THIS ADMINISTRATION AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE SUBSTANTIVE LAWS OF THE STATE
OF DELAWARE (WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS) APPLICABLE TO
CONTRACTS TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE.
Section 20. Headings. The section headings hereof have been inserted for
convenience of reference only and shall not be construed to affect the meaning,
construction or effect of this Administration Agreement.
Section 21. Counterparts. This Administration Agreement may be executed
by the parties hereto in separate counterparts, each of which when so executed
and delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
Section 22. Severability. Any provision of this Administration Agreement
that is prohibited or unenforceable in any jurisdiction shall be ineffective to
the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
Section 23. Limitation of Liability of Delaware Trustee and Indenture
Trustee. Notwithstanding anything contained herein to the contrary, this
instrument has been executed by each of Wilmington Trust Company and Zions First
National Bank, not in their individual capacity but solely in its capacity as
Delaware Trustee or Indenture Trustee, respectively, and in no event shall
Wilmington Trust Company or Zions First National Bank in their individual
capacity or any beneficial owner of the Issuer have any liability for the
representations, warranties, covenants, agreements or other obligations of the
Issuer hereunder, as to all of which recourse shall be had solely to the assets
of the Issuer.
11
Section 24. No Petition. The parties hereto will not at any time
institute against the Issuer any bankruptcy proceeding under any United States
federal or State bankruptcy or similar law in connection with any obligations of
the Issuer under any Basic Document.
12
IN WITNESS WHEREOF, the parties have caused this Administration
Agreement to be duly executed and delivered as of the day and year first above
written.
NELNET STUDENT LOAN TRUST 2004-4
By: WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as
Delaware Trustee
By /s/ Janel R. Havrilla
-------------------------------------------
Name Janel R. Havrilla
-------------------------------------------
Title Financial Services Officer
----------------------------------------
WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as Delaware
Trustee
By /s/ Janel R. Havrilla
-------------------------------------------
Name Janel R. Havrilla
-----------------------------------------
Title Financial Services Officer
----------------------------------------
ZIONS FIRST NATIONAL BANK, not in its
individual capacity but solely as Indenture
Trustee
By /s/ David W. Bata
-------------------------------------------
David W. Bata, Vice President
NATIONAL EDUCATION LOAN NETWORK, INC., f/k/a
NELNET, INC., as Administrator
By /s/ Jeffrey R. Noordhoek
-------------------------------------------
Jeffrey R. Noordhoek
Executive Director
13
EXHIBIT A
POWER OF ATTORNEY
STATE OF DELAWARE )
)
COUNTY OF NEW CASTLE )
KNOW ALL MEN BY THESE PRESENTS, that Nelnet Student Loan Trust 2004-4
(the "Issuer"), does hereby make, constitute and appoint National Education Loan
Network, Inc., f/k/a Nelnet, Inc., as Administrator under the Administration
Agreement, dated as of September 1, 2004 (the "Administration Agreement"), among
the Issuer, Wilmington Trust Company, as Delaware Trustee, Zions First National
Bank, as Indenture Trustee and National Education Loan Network, Inc., as
Administrator, as the same may be amended from time to time, and its agents and
attorneys, as Attorney-in-Fact to execute on behalf of the Issuer all such
documents, reports, filings, instruments, certificates and opinions as it shall
be the duty of the Issuer to prepare, file or deliver pursuant to the Trust
Related Agreements, including, without limitation, to appear for and represent
the Issuer in connection with the preparation, filing and audit of federal,
state and local tax returns pertaining to the Issuer, and with full power to
perform any and all acts associated with such returns and audits that the Issuer
could perform, including without limitation, the right to distribute and receive
confidential information, defend and assert positions in response to audits,
initiate and defend litigation, and to execute waivers of restrictions on
assessments of deficiencies, consents to the extension of any statutory or
regulatory time limit, and settlements.
All powers of attorney for this purpose heretofore filed or executed by
the Issuer are hereby revoked.
Capitalized terms that are used and not otherwise defined herein shall
have the meanings ascribed thereto in the Administration Agreement.
EXECUTED as of this __ day of September, 2004.
NELNET STUDENT LOAN TRUST 2004-4
By: WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as \
Delaware Trustee
This Administrator Instruction Certificate (the "Instruction") is being
provided by National Education Loan Network, Inc., as Administrator ("the
Administrator") to Nelnet Student Loan Trust 2004-4 (the "Issuer") pursuant to
Section 2 of the Administration Agreement dated as of September 1, 2004 (the
"Administration Agreement"), among the Issuer, Wilmington Trust Company, a
Delaware banking corporation, not in its individual capacity but solely as
Delaware Trustee (the "Delaware Trustee"), Zions First National Bank, a national
banking association, not in its individual capacity but solely as Indenture
Trustee (in such capacity the "Indenture Trustee") and the Administrator. All
capitalized terms used in this instruction and not otherwise defined shall have
the same meanings as assigned to such terms in the Indenture.
Pursuant to Section 2 of the Administration Agreement, on each
Determination Date preceding a Distribution Date, the Administrator shall
provide to the Indenture Trustee (with a copy to the Rating Agencies) for the
Indenture Trustee to forward on such succeeding Distribution Date to each
Registered Owner of record, the following statement setting forth the ensuing
information as to the Notes to the extent applicable. This Instruction is being
provided for the _______________ Distribution Date ("this Distribution Date").
Amount per $1,000
of original
principal
Total of applicable Notes
(a) the amount of such distribution allocable to principal of each class of the
Notes
----------, $--------------- $---------------
----------, $--------------- $---------------
----------, $--------------- $---------------
---------, $--------------- $---------------
--------, $--------------- $---------------
----------, $--------------- $---------------
(b) the amount of such distribution allocable to interest of each class of the
Notes
----------, $--------------- $---------------
----------, $--------------- $---------------
----------, $--------------- $---------------
---------, $--------------- $---------------
--------, $--------------- $---------------
----------, $--------------- $---------------
(c) the Pool Balance as of the close of business on the last day of the preceding
preceding Collection Period $_______________
the Adjusted Pool Balance as of the close of business on the last day of
the preceding Collection Period $_______________
(d) (i) the aggregate outstanding principal balance of the Notes for each
class, as of this Distribution Date, after giving effect to payments
allocated to principal reported under clause (a) above
----------, $---------------
----------, $---------------
----------, $---------------
---------, $---------------
--------, $---------------
----------, $---------------
(ii) the Note Pool Factor for each class, as of this Distribution Date,
after giving effect to payments allocated to principal reported under
clause (a) above
----------, $---------------
----------, $---------------
----------, $---------------
---------, $---------------
--------, $---------------
----------, $---------------
(iii) the applicable interest rate for each class of Notes for this
Distribution Date
------, ----------%
------, ----------%
------, ----------%
-----, ----------%
---, ----------%
-------, ----------%
(e) (i) the amount of Servicing Fee and any Carryover Servicing Fee paid to
the Servicer on such Distribution Date $_______________
(ii) the amount of the Servicing Fee and any Carryover Servicing Fee paid
to the Servicer on the two preceding Monthly Servicing Payment Dates
$_______________
(iii) the amount, if any, of the Carryover Servicing Fee remaining unpaid
after giving effect to any such payments $_______________
(f) the amount of the Administration Fee paid to the Administrator on such
Distribution Date $_______________
(g) the amount of the Trustee Fee paid on such Distribution Date $_______________
(h) the amount of the aggregate Realized Losses, if any, for the related Collection
Period $_______________ $_______________
the balance of Financed Eligible Loans delinquent in each delinquency period as
of the end of the Collection Period $_______________ $_______________
(i) (i) the amount of any Class A Note Interest Shortfall $_______________ $_______________
the change in the amount of such Class A Note Interest Shortfall from the
preceding Instruction $_______________ $_______________
(ii) the amount of any Class B Note Interest Shortfall $_______________ $_______________
the change in the amount of such Class B Note Interest Shortfall from the
preceding Instruction $_______________ $_______________
(iii) the amount of any Class A Note Principal Shortfall $_______________ $_______________
the change in the amount of such Class A Note Principal Shortfall from the
preceding Instruction $_______________ $_______________
(iv) the amount of any Class B Note Principal Shortfall $_______________ $_______________
the change in the amount of such Class B Note Principal Shortfall from the
preceding Instruction $_______________ $_______________
B-2
(j) the aggregate Purchase Amounts for Financed Eligible Loans, if any, that
were repurchased by the Seller or purchased by the Servicer from the Issuer
in such Collection Period $_______________
(k) the Derivative Product Fees made on such Distribution Date $_______________
the Derivative Product Payments made on such Distribution Date $_______________
(l) the Counterparty Payments, if any, received in such collection Period $_______________
(m) the balance of the Reserve Account on such Distribution Date, after giving
effect to changes therein on such Distribution Date $_______________
Specified Reserve Fund Balance for such Distribution Date $_______________
(n) the withdrawals from the Reserve Account on this Distribution Date and the
Monthly Servicing Payment Dates, other than the excess released to the
Collection Account, since the preceding Distribution Date $_______________
the amount transferred to the Collection Account, which was in excess of
the Reserve Fund minimum balance, on such Distribution Date $_______________
the Principal balance of Notes to be paid to reach parity,
as of this Distribution Date, after giving effect to payments allocated to
principal reported under clause (a) above $_______________
(o) the amount released to the Sponsor from the Collection Account on such
Distribution Date $_______________
The Indenture Trustee is hereby directed to provide a copy of this
Instruction to each Registered Owner on the next succeeding Distribution Date.
The Administrator hereby certifies that the information herein is true
and accurate in all material respects and that the Indenture Trustee may
conclusively rely on this Instruction with no further duty to examine or
determine the information contained herein.
IN WITNESS WHEREOF, the Administrator has caused this Administrator
Instruction Certificate to be duly executed and delivered as of the date written
below.
National Education Loan Network, Inc.,
f/k/a Nelnet, Inc., as Administrator
By
Title
Date
B-3
CC:
Fitch Ratings
One State Street Plaza
New York, NY 10004
Standard & Poor's Rating Services
55 Water Street
New York, NY 10041
Moody's Investors Service, Inc.
99 Church Street
New York, NY 10007
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