EXHIBIT 1.1
Execution Copy
Nelnet Student Loan Trust 2004-4
$2,020,876,000
Student Loan Asset-Backed Notes
UNDERWRITING AGREEMENT
September 22, 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.
2
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.
Trust Indenture Act Section Indenture Section
Section 310(a)(1) 7.23
310(a)(2) 7.23
310(b) 7.23, 7.09
Section 311(a) 7.08
311(b) 7.08
Section 312(b) 9.16
312(c) 9.16
Section 313(a) 4.15
313(b) 4.15
313(c) 4.15, 8.04
Section 314(a)(1) 4.15
314(a)(2) 4.15
314(a)(3) 4.15
314(a)(4) 4.16
314(c) 2.02, 5.06
314(d)(1) 5.06
Section 315(b) 8.04
Section 317(a)(1) 4.17, 6.10
317(a)(2) 7.24
Section 318(a) 9.09
318(c) 9.09
--------------------
|
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.
18
"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.
19
"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
26
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.
27
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
28
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,
29
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.
30
(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.
31
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
32
(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;
33
(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
34
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.
35
Section 4.12. Representations; Negative Covenants.
(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.
37
(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.
38
(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.
44
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.
47
(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;
48
(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.
49
(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).
50
(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.
51
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.
52
(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:
53
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.
54
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.
55
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:
56
(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.
57
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
58
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:
59
(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
60
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.
61
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.
62
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.
63
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.
64
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.
65
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.
66
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
67
(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;
68
(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
69
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
70
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:
71
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.
72
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.
73
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.
74
(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.
75
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
76
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
77
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.
NELNET STUDENT LOAN TRUST 2004-4
STUDENT LOAN ASSET-BACKED NOTES
senior CLASS A-1 (LIBOR)
REGISTERED NO. R-__ REGISTERED $__________
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.
NELNET STUDENT LOAN TRUST 2004-4
STUDENT LOAN ASSET-BACKED NOTES
senior CLASS A-2 (LIBOR)
REGISTERED NO. R-__ REGISTERED $__________
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.
NELNET STUDENT LOAN TRUST 2004-4
STUDENT LOAN ASSET-BACKED NOTES
senior CLASS A-3 (LIBOR)
REGISTERED NO. R-__ REGISTERED $__________
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.
NELNET STUDENT LOAN TRUST 2004-4
STUDENT LOAN ASSET-BACKED NOTES
senior CLASS A-4 (LIBOR)
REGISTERED NO. R-__ REGISTERED $__________
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.
NELNET STUDENT LOAN TRUST 2004-4
STUDENT LOAN ASSET-BACKED NOTES
senior CLASS A-5 (LIBOR)
REGISTERED NO. R-__ REGISTERED $__________
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
Next Section
Previous Section