EXHIBIT 10.69
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SECOND SUPPLEMENTAL INDENTURE
By and Between
CFLD-I, INC.
and
ZIONS FIRST NATIONAL BANK,
as Trustee
Relating To
$50,000,000
CFLD-I, Inc.
Student Loan Asset Backed Notes
Senior Series 2002A-1
(Auction Rate Certificates)
Dated as of April 1, 2002
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TABLE OF CONTENTS
Page
ARTICLE I
SHORT TITLE, DEFINITIONS AND AUTHORITY
Section 1.01. Short Title .............................................................. 3
Section 1.02. Definitions .............................................................. 3
Section 1.03. Authority ................................................................ 5
Section 1.04. Definition of Investment Securities ...................................... 5
ARTICLE II
AUTHORIZATION, TERMS AND ISSUANCE OF SERIES 2002A NOTES
Section 2.01. Principal Amount, Designation and Series ................................. 9
Section 2.02. Purposes of Issuance ..................................................... 9
Section 2.03. Dates, Maturities and Interest Rates ..................................... 9
Section 2.04. Form, Denomination, Numbers and Letters .................................. 9
Section 2.05. Book-Entry System; Limited Obligation of Corporation ..................... 9
Section 2.06. Appointment of Paying Agent and Registrar ................................ 11
Section 2.07. Appointment of Authenticating Agent ...................................... 11
Section 2.08. Redemption ............................................................... 12
Section 2.09. Transfer of Notes ........................................................ 13
Section 2.10. Execution of Reimbursement Agreement and Custodian Agreement ............. 13
ARTICLE III
DEPOSITS INTO FUNDS AND ACCOUNTS; DISPOSITION OF PROCEEDS OF THE SALE
OF THE SERIES 2002A NOTES; AND USE AND DISBURSEMENTS OF FUNDS
Section 3.01. Deposits into Funds and Accounts on the Issue Date ....................... 14
Section 3.02. Payment of Expenses and Costs of Issuance ................................ 14
Section 3.03. Increase in Program Expenses and Maintenance and Operating Expenses ...... 14
Section 3.04. Debt Service Reserve Fund ................................................ 14
Section 3.05. Recoveries of Principal, Recycling ....................................... 16
Section 3.06. Limitation on Sale of Financed Student Loans ............................. 16
Section 3.07. Cash Flow Statements ..................................................... 16
Section 3.08. Perfection of Financed Student Loans and Defaulted Student Loans ......... 16
Section 3.09. Servicing of Financed Student Loans ...................................... 17
Section 3.10. Repurchase Obligation Under Student Loan Purchase Agreements ............. 17
Section 3.11. Acquisition of Future Private Loans ...................................... 18
ARTICLE IV
CREDIT FACILITY PROVIDER
Section 4.01. Rights of Credit Facility Provider Controlling .................... 18
Section 4.02. Payments Under the Credit Facility for the Series 2002 Notes ...... 18
Section 4.03. Notices, Consents, Miscellaneous .................................. 20
Section 4.04. Consents, Etc. by Credit Facility Provider Limited ................ 21
Section 4.05. Rating Notifications Upon a Credit Confirmation ................... 22
ARTICLE V
MISCELLANEOUS
Section 5.01.
Second Supplemental Indenture Construed with General Indenture .... 22
Section 5.02. General Indenture as Supplemented to Remain in Effect ............. 22
Section 5.03. Severability ...................................................... 22
Section 5.04. Confirmation of Actions ........................................... 22
Section 5.05. Governing Law ..................................................... 22
Section 5.06. Notices ........................................................... 22
Section 5.07. Rights of Credit Facility Provider ................................ 24
Section 5.08. Execution in Counterparts ......................................... 24
EXHIBIT A PROVISIONS RELATING TO SERIES 2002A NOTES OUTSTANDING AS AUCTION
RATE CERTIFICATES
EXHIBIT B FORM OF FINANCIAL GUARANTY INSURANCE POLICY
EXHIBIT C FORM OF NOTICE OF CHANGE IN LENGTH OF ONE OR MORE AUCTION PERIODS
EXHIBIT D FORM OF NOTICE ESTABLISHING CHANGE IN LENGTH
EXHIBIT E FORM OF NOTICE OF CHANGE IN AUCTION DATE
EXHIBIT F FORM OF SERIES 2002A NOTES
EXHIBIT G DTC BLANKET LETTER OF REPRESENTATIONS
EXHIBIT H-1 FORM OF INVESTMENT LETTER
EXHIBIT H-2 FORM OF INVESTMENT LETTER
EXHIBIT I FORM OF DEBT SERVICE RESERVE SURETY BOND
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THIS
SECOND SUPPLEMENTAL INDENTURE, dated as of April 1, 2002 (this
"
Second Supplemental Indenture"), is entered into by and between CFLD-I, INC.
(the "Corporation"), a corporation established under the laws of the State of
Delaware, and ZIONS FIRST NATIONAL BANK, a national banking association
authorized to accept trusts of the nature established herein (the "Trustee"),
and amends and supplements the General Indenture, dated as of April 1, 2001 (the
"General Indenture"), between the Corporation and the Trustee, as previously
supplemented by the First Supplemental Indenture, dated as of April 1, 2001 (the
"First Supplemental Indenture"), between the Corporation and the Trustee and as
simultaneously amended and supplemented by the Third Supplemental Indenture,
dated as of April 1, 2002 (the "Third Supplemental Indenture"), between the
Corporation and the Trustee.
WHEREAS, The MEGA Life and Health Insurance Company, an Oklahoma
corporation ("MEGA"), and Mid-West National Life Insurance Company of Tennessee,
a Tennessee corporation ("Mid-West"), offer whole life insurance policies with
student loan benefits (the "Life Insurance Policies"); and
WHEREAS, pursuant to the College First Alternative Loan Program (the
"Student Loan Program"), a policyholder under a Life Insurance Policy may obtain
a loan (a "College First Student Loan") to fund the policyholder's children's
educational expenses at an educational institution approved under the Student
Loan Program; and
WHEREAS, the College First Student Loans are presently originated by
Richland State Bank, a South Dakota banking institution ("Richland"), pursuant
to the terms and provision of a Loan Underwriting and Processing Agreement,
dated as of June 12, 2000 (the "Loan Underwriting Agreement"), among Richland,
MEGA and Mid-West; and
WHEREAS,
UICI Funding Corp. 2, a Delaware corporation ("
UICI Funding"),
has agreed to purchase all of the College First Student Loans originated by
Richland pursuant to the terms and provisions of a Loan Origination and Purchase
Agreement, dated as of June 12, 2000 (the "Loan Origination and Purchase
Agreement"), between Richland and
UICI Funding; and
WHEREAS, the Corporation and
UICI Funding have entered into an Amended
and Restated Student Loan Purchase Agreement, dated April 10, 2002 (the "College
First Student Loan Purchase Agreement"), permitting the Corporation to purchase
certain College First Student Loans owned by
UICI Funding; and
WHEREAS, MEGA, Mid-West,
UICI Funding and the Corporation are
wholly-owned subsidiaries of
UICI, a Delaware corporation ("
UICI"); and
WHEREAS, certain College First Student Loans are secured, in part, by
an allocable portion of the cash surrender value of the policyholder's Life
Insurance Policy related to such College First Student Loan (the "Cash Surrender
Value"); and
WHEREAS, a College First Student Loan made to a policyholder who
receives a credit score higher than a certain predetermined level is eligible to
be insured by The Education Resources Institute, Inc., a private non-profit
corporation organized under Chapter 180 of the Massachusetts General Laws
("▇▇▇▇"), pursuant to the terms and provisions of an Amended and Restated
Guaranty Agreement, dated as of December 31, 1999, between
UICI and ▇▇▇▇, or the
Guaranty Agreement, dated as of April 1, 2001, between the Corporation and ▇▇▇▇
(collectively, the "▇▇▇▇ Guaranty Agreement"), or by United Student Aid Funds,
Inc. ("USA Funds"), a Delaware corporation, pursuant to the terms and provisions
of an Amended and Restated Guarantee Agreement, dated as of January 1, 1996 (the
"USA Funds Guarantee Agreement"), among, MEGA, Mid-West, the Corporation and USA
Funds; and
WHEREAS, the Corporation, in the future may desire to purchase other
student loans permitted to be acquired pursuant to this Indenture, including
student loans made pursuant to the Federal Family Education Loan Program (the
"FFELP Loans") under the Higher Education Act of 1965, as amended (the "Higher
Education Act"); and
WHEREAS, pursuant to the Corporation's Articles of Incorporation and
this Indenture, the Corporation is authorized to issue its debt obligations (the
"Notes") to obtain funds to make or purchase College First Student Loans, FFELP
Loans and other student loans permitted to be acquired pursuant to this
Indenture (collectively, the "Student Loans"); and
WHEREAS, any series of the Notes (a "Series") may be secured by a form
of credit enhancement purchased by the Corporation, including, without
limitation, a letter of credit, bond insurance, a surety bond or a standby bond
purchase agreement (each a "Credit Facility") delivered by the provider of such
Credit Facility (the "Credit Facility Provider"); and
WHEREAS, the Corporation has previously issued two Series of Notes (the
"Series 2001A Notes") in the aggregate principal amount of $100,000,000 to, in
part, acquire certain Student Loans from
UICI Funding pursuant to the College
First Student Loan Purchase Agreement; and
WHEREAS, the Corporation desires to issue its third Series of Notes
(the "Series 2002A Notes") in the aggregate principal amount of $50,000,000 to,
in part, acquire additional Student Loans from UICI Funding pursuant to the
College First Student Loan Purchase Agreement; and
WHEREAS, the Series 2002A Notes shall be issued as Senior Notes (as
defined in the General Indenture); and
WHEREAS, MBIA Insurance Corporation, as a Credit Facility Provider, has
agreed to guarantee the payment of the principal of and interest on the Series
2002A Notes, when due, pursuant to a Credit Facility for the Series 2002A Notes
to be issued simultaneously with the delivery of the Series 2002A Notes; and
WHEREAS, Section 8.01(g) of the General Indenture permits the
Corporation and the Trustee, with the written consent of each Credit Facility
Provider, but without the consent of the Registered Owners of any Notes issued
under the General Indenture, to enter into Supplemental Indentures which amend
and supplement the General Indenture (which Supplemental Indentures shall
thereafter form a part of the General Indenture) for the purpose of authorizing
one or more Series of Notes; and
WHEREAS, MBIA Insurance Corporation, as the sole Credit Facility
Provider, has consented to the execution and delivery of this
Second
Supplemental Indenture by the Corporation and the Trustee; and
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WHEREAS, UBS PaineWebber Inc., as the initial purchaser for the Series
2002A Notes, has agreed to place the Series 2002A Notes with certain qualified
institutional buyers and institutional accredited investors; and
WHEREAS, all things necessary to constitute the Indenture, including
this
Second Supplemental Indenture, a valid, binding and legal instrument for
the security of the Notes issued pursuant to the Indenture in accordance with
its terms, have been done and performed.
NOW, THEREFORE, THIS
SECOND SUPPLEMENTAL INDENTURE WITNESSETH:
ARTICLE I
SHORT TITLE, DEFINITIONS AND AUTHORITY
SECTION 1.01. SHORT TITLE. This
Second Supplemental Indenture shall be
known as and may be designated by the short title "
Second Supplemental
Indenture" (this "
Second Supplemental Indenture").
SECTION 1.02. DEFINITIONS. All words and phrases defined in Article I
of the General Indenture or in Exhibit A hereto, respectively, shall have the
same meaning in this Second Supplemental Indenture, except as otherwise appears
in this Section. In addition, the following terms shall have the following
meanings, unless the context otherwise requires:
"ARCs" means the Series 2002A Notes bearing interest at Auction Rates.
"Authorized Denomination" means, with respect to the Series 2002A
Notes, principal amounts of $50,000 and integral multiples thereof.
"Cede" means Cede & Co., the nominee of DTC, and any successor nominee
thereof.
"Credit Facility" shall include the financial guaranty insurance policy
No. 37775(1), issued by MBIA Insurance Corporation, and any replacements
thereof, the form of which is attached as Exhibit B hereto.
"Debt Service Reserve Policy" shall include the Debt Service Reserve
Surety Bond No. 37775(2) to be delivered by MBIA Insurance Corporation (which
also replaces Debt Service Reserve Surety Bond No. 350463), and any replacement
thereof, the form of which is attached hereto as Exhibit I.
"Debt Service Reserve Requirement" with respect to the Series 2002A
Notes, means an amount equal 2% of the principal amount of the Series 2002A
Notes Outstanding from time to time.
"DTC" means The Depository Trust Company, and any successor thereof.
"Financial Guaranty Agreement" means the Amended and Restated Financial
Guaranty Agreement, dated as of April 1, 2001, as amended and restated as of
April 1, 2002, between the
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Corporation and the Surety Provider, relating to the Debt Service Reserve
Policy, as amended and supplemented in accordance with its terms.
"First Supplemental Indenture" means the First Supplemental Indenture,
dated as of April 1, 2001, by and between the Trustee and the Corporation,
amending and supplementing the General Indenture, as amended and supplemented in
accordance with the terms of the General Indenture.
"Fitch" means Fitch Ratings, its successors and assigns, and if such
entity shall be dissolved or liquidated or shall no longer perform the functions
of a securities rating agency, "Fitch" shall be deemed to refer to any
nationally recognized securities rating agency designated by a Corporation
Order, with written notice thereof to the Trustee and Credit Facility Provider.
"General Indenture" means the General Indenture, dated as of April 1,
2001, by and between the Trustee and the Corporation, as amended and
supplemented in accordance with the terms thereof.
"Initial Purchaser" means UBS PaineWebber Inc. and any successor
thereof.
"Insurance Paying Agent" means State Street Bank & Trust Company or its
successors under the Credit Facility for the Series 2002A Notes.
"Issue Date" shall include the date of original delivery of the Series
2002A Notes; April 10, 2002.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc., its successors and
assigns, and if such entity shall be dissolved or liquidated or shall no longer
perform the functions of a securities rating agency, "Moody's" shall be deemed
to refer to any nationally recognized securities rating agency designated by a
Corporation Order, with written notice thereof to the Trustee and Credit
Facility Provider.
"Participants" means those broker-dealers, banks and other financial
institutions from time to time for which DTC holds Series 2002A Notes as
Securities Depository.
"Qualified Surety Bond" means a surety bond issued by an insurance
company rated in the highest category by S&P and Moody's and, if rated by A.M.
Best & Company, must also be rated in the highest rating category by A.M. Best &
Company.
"Reimbursement Agreement" shall include the Insurance Agreement, dated
as of April 1, 2002, among MBIA Insurance Corporation, UICI, the Corporation,
UICI Funding, as the seller, UICI Funding, as the master servicer, and the
Trustee, as amended and supplemented pursuant to the terms thereof.
"Representation Letter" means the Blanket Letter of Representation
letter between the Corporation and DTC in substantially the form attached as
Exhibit G hereto.
"Securities Act" means the Securities Act of 1933, as amended.
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"Series 2002A Notes" means the Senior Notes authorized by Section 2.01
of this Second Supplemental Indenture and titled "Student Loan Asset Backed
Notes, Senior Series 2002A-1 (Auction Rate Certificates)."
"S&P" means Standard & Poor's Credit Market Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., its successors and assigns, and if such entity
shall be dissolved or liquidated or shall no longer perform the functions of a
securities rating agency, "S&P" shall be deemed to refer to any nationally
recognized securities rating agency designated by a Corporation Order, with
written notice thereof to the Trustee and Credit Facility Provider.
"Surety Provider" shall include MBIA Insurance Corporation and any
successor thereof, as the provider of a Debt Service Reserve Policy.
"Third Supplemental Indenture" means the Third Supplemental Indenture,
dated as of April 1, 2002, by and between the Trustee and the Corporation,
amending and supplementing the General Indenture, as amended and supplemented in
accordance with the terms of the General Indenture.
SECTION 1.03. AUTHORITY. This Second Supplemental Indenture is executed
pursuant to the provisions of the General Indenture and a resolution of the
Corporation.
SECTION 1.04. DEFINITION OF INVESTMENT SECURITIES. As permitted by the
definition of Investment Securities in Section 1.01 of the General Indenture,
Investment Securities means the following categories of securities:
(a) Direct obligations of the United States of America
(including obligations issued or held in book-entry form on the books
of the Department of the Treasury, and CATS and TIGRS) or obligations
the principal of and interest on which are unconditionally guaranteed
by the United States of America.
(b) Bonds, debentures, notes or other evidence of indebtedness
issued or guaranteed by any of the following federal agencies and
provided such obligations are backed by the full faith and credit of
the United States of America (stripped securities are only permitted if
they have been stripped by the agency itself):
(i) U.S. Export-Import Bank (Eximbank)
(A) Direct obligations or fully guaranteed
certificates of beneficial ownership
(ii) Farmers Home Administration (FmHA)
(A) Certificates of beneficial ownership
(iii) Federal Financing Bank
(iv) Federal Housing Administration Debentures (FHA)
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(v) General Services Administration
(A) Participation certificates
(vi) Government National Mortgage Association (GNMA
or "▇▇▇▇▇▇ Mae")
(A) GNMA - guaranteed mortgage-backed Notes
(B) GNMA - guaranteed pass-through
obligations
(vii) U.S. Maritime Administration
(A) Guaranteed Title XI financing
(viii) U.S. Department of Housing and Urban
Development (HUD) Project Notes
(A) Local Authority Notes
(B) New Communities Debentures - U.S.
government guaranteed debentures
(C) U.S. Public Housing Notes and Bonds -
U.S. government guaranteed public housing notes and
bonds
(c) Bonds, debentures, notes, other evidence of indebtedness
issued or guaranteed by any of the following non-full faith and credit
U.S. government agencies (stripped securities are only permitted if
they have been stripped by the agency itself):
(i) Federal Home Loan Bank System
(A) Senior debt obligations
(ii) Federal Home Loan Mortgage Corporation (FHLMC or
"▇▇▇▇▇▇▇ Mac")
(A) Participation Certificates
(B) Senior debt obligations
(iii) Federal National Mortgage Association (FNMA or
"▇▇▇▇▇▇ Mae")
(A) Mortgage-backed securities and senior
debt obligations
(iv) Student Loan Marketing Association (SLMA or
"▇▇▇▇▇▇ ▇▇▇")
(A) Senior debt obligations
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(v) Resolution Funding Corp. (REFCORP) obligations
(vi) Farm Credit System
(A) Consolidated system-wide Notes and notes
(d) Money market funds, including money market funds for which
the Trustee or an affiliate of the Trustee acts as adviser or provides
other services, registered under the Federal Investment Company Act of
1940, whose shares are registered under the Federal Securities Act of
1933, and having a rating by S&P of "AAAm-G" or "AAA-m"; and a ▇▇▇▇▇'▇
rating of "Aaa"; and if rated by Fitch rated "AA" or higher if the
money market fund has the ability to maintain a stable one dollar net
asset value per share and the shares are freely transferable on a daily
basis.
(e) Certificates of deposit secured at all times by collateral
described in (a) and/or (b) above. Such certificates must be issued by
commercial banks, which may include the Trustee, savings and loan
associations or mutual savings banks. The collateral must be held by a
third party and the Registered Owners must have a perfected first
security interest in the collateral.
(f) Certificates of deposit, savings accounts, deposit
accounts or money market deposits which are fully insured by FDIC,
including BIF and SAIF, and which may be issued by the Trustee.
(g) Investment agreements, including guaranteed investment
contracts, forward purchase agreements and reserve fund put agreements
acceptable to the Credit Facility Provider, and which may be issued by
the Trustee.
(h) Commercial paper rated, at the time of purchase, "A-l+" or
better by S&P and "P1" by Moody's and if rated by Fitch rated "F-l+."
(i) Bonds or notes issued by any state or municipality which
are rated "A-l+" or "AA-" or better by S&P, "Aa2" or better by Moody's
and, if rated by Fitch rated in one of its two highest rating
categories, in one of the two highest rating categories.
(j) Federal funds or bankers acceptances with a maximum term
of one year of any bank which has an unsecured, uninsured and
unguaranteed obligation rating of "A-1" or "A" or better by S&P, "P1"
or "A2" by Moody's and if rated by Fitch "F-1" or "A" or better.
(k) Repurchase agreements for 30 days or less must follow the
following criteria.
Repurchase agreements which exceed 30 days must be acceptable to the
Credit Facility Provider and S&P.
Repurchase agreements are agreements which provide for the transfer of
securities from a dealer bank or securities firm (seller/borrower) to a
counterparty (buyer/lender), and the transfer
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of cash from the buyer/lender to the dealer bank or securities firm with an
agreement that the dealer bank or securities firm will repay the cash plus a
yield to the buyer/lender in exchange for the securities at a specified date.
(i) Repurchase agreements must be between the
buyer/lender and a dealer bank or securities firm, which
include primary dealers on the Federal Reserve reporting
dealer list which are rated "A" or above by S&P, "A2" or above
by Moody's and if rated by Fitch "A."
(ii) The written repurchase agreements must include
the following:
(A) Securities which are acceptable for
transfer are:
(1) Direct U.S. governments or
(2) Federal agencies backed by the
full faith and credit of the U.S.
government, FNMA and FHLMC
(B) The term of the repurchase agreement may
be up to 30 days
(C) The collateral must be delivered to the
buyer/lender, trustee (if trustee is not supplying
the collateral) or third-party acting as agent for
the trustee (if the trustee is supplying the
collateral) before/simultaneous with payment
(perfection by possession of certificated
securities).
(D) Valuation of collateral;
(1) The securities must be valued
weekly, marked-to-market at current market
price plus accrued interest;
(a) The value of
collateral must be equal to 104% of
the amount of cash transferred by
the buyer/lender to the dealer bank
or security firm under the
repurchase contract plus accrued
interest. If the value of
securities held as collateral slips
below 104% of the value of the cash
transferred by buyer/lender, then
additional cash and/or acceptable
securities must be transferred. If,
however, the securities used as
collateral are FNMA or FHLMC, then
the value of collateral must equal
105%.
(iii) Legal opinion must be delivered to the
buyer/lender that the repurchase agreement meets guidelines
under state law for legal investment of public funds.
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ARTICLE II
AUTHORIZATION, TERMS AND ISSUANCE OF SERIES 2002A NOTES
SECTION 2.01. PRINCIPAL AMOUNT, DESIGNATION AND SERIES. Pursuant to the
provisions of the General Indenture and this Second Supplemental Indenture, a
Series of Notes entitled to the benefit, protection and security of the General
Indenture is hereby authorized in the aggregate principal amount of $50,000,000,
consisting of a Series of Senior Notes designated as and distinguished from the
Notes of all other Series by the title "Student Loan Asset Backed Notes, Senior
Series 2002A-1 (Auction Rate Certificates)" (the "Series 2002A Notes").
SECTION 2.02. PURPOSES OF ISSUANCE. The Series 2002A Notes are issued
for the purposes of obtaining funds to finance the acquisition of Student Loans,
to purchase a Debt Service Reserve Policy and to pay certain Costs of Issuance
related to the Series 2002A Notes.
SECTION 2.03. DATES, MATURITIES AND INTEREST RATES. The Series 2002A
Notes shall consist of Senior Notes which shall be dated the date of initial
authentication and delivery thereof, shall bear interest at the Auction Rate
described in Exhibit A hereto, shall mature on July 1, 2037 (subject to
redemption prior to maturity as described herein) and shall be payable as
described in Exhibit A hereto. For purposes of calculating the interest on the
Series 2002A Notes to be deposited to the corresponding Interest Account of the
Note Fund pursuant to Section 5.04(b) of the General Indenture, a Series 2002A
Note for which an interest rate has not yet been determined shall be deemed to
bear interest at the highest interest rate determined for such Series 2002A Note
for the then current and preceding two Interest Periods.
SECTION 2.04. FORM, DENOMINATION, NUMBERS AND LETTERS. The Series 2002A
Notes shall be issued in the form of fully registered notes without coupons, in
substantially the form set forth as Exhibit F hereto. The Series 2002A Notes
shall be issued in the Authorized Denominations and shall be numbered separately
from 1 upward preceded by the letter R prefixed to the number.
SECTION 2.05. BOOK-ENTRY SYSTEM; LIMITED OBLIGATION OF CORPORATION.
(a) The Series 2002A Notes shall be initially issued in the
form of a separate single certificated fully registered Note. Upon
initial issuance, the ownership of all Series 2002A Notes shall be
registered in the registration books kept by the Registrar in the name
of Cede & Co., as nominee of DTC. Except as provided in Section 2.05(d)
hereof, all of the Outstanding Series 2002A Notes shall be registered
in the registration books kept by the Registrar in the name of Cede, as
nominee of DTC.
(b) With respect to Series 2002A Notes registered in the
registration books kept by the Registrar in the name of Cede, as
nominee of DTC, the Corporation, the Trustee, the Registrar and the
Paying Agent shall have no responsibility or obligation to any
Participant or to any person on behalf of which a Participant holds an
interest in the Series 2002A Notes. Without limiting the immediately
preceding sentence, the Corporation, the Trustee, the Registrar and the
Paying Agent shall have no responsibility or obligation with respect to
(i) the accuracy of the records of DTC, Cede or any
9
Participant with respect to any ownership interest in the Series 2002A Notes,
(ii) the delivery to any Participant or any other person, other than a
Registered Owner, as shown in the registration books kept by the Registrar, of
any notice with respect to the Series 2002A Notes, including any notice of
redemption or (iii) the payment to any Participant or any other person, other
than a Registered Owner, as shown in the registration books kept by the
Registrar, of any amount with respect to principal of, premium, if any, or
interest on the Series 2002A Notes. The Corporation, the Trustee, the Registrar
and the Paying Agent may treat and consider the person in whose name each Series
2002A Note is registered in the registration books kept by the Registrar as the
holder and absolute owner of such Series 2002A Note, as applicable, for the
purpose of payment of principal, premium, if any, and interest with respect to
such Series 2002A Note, for the purpose of giving notices of redemption and
other matters with respect to such Series 2002A Note, for the purpose of
registering transfers with respect to such Series 2002A Note, and for all other
purposes whatsoever.
The Paying Agent shall pay all principal of, premium, if any, and
interest on the Series 2002A Notes only to or upon the order of the respective
Registered Owners, as shown in the registration books kept by the Registrar, or
their respective attorneys duly authorized in writing, and all such payments
shall be valid and effective to fully satisfy and discharge the Corporation's
obligations with respect to payment of principal of, premium, if any, and
interest on the Series 2002A Notes, as applicable, to the extent of the sum or
sums so paid. No person other than a Registered Owner, as shown in the
registration books kept by the Registrar, shall receive a certificated Series
2002A Note evidencing the obligation of the Corporation to make payments of
principal, premium, if any, and interest of the Series 2002A Notes pursuant to
the Indenture. Upon delivery by DTC to the Registrar of written notice to the
effect that DTC has determined to substitute a new nominee in place of Cede, and
subject to the provisions herein with respect to record dates, the word "Cede"
in this Second Supplemental Indenture shall refer to such new nominee of DTC;
and upon receipt of such a notice the Registrar shall promptly deliver a copy of
the same to the Trustee, if the Trustee is other than itself.
(c) The Representation Letter in the form attached hereto as Exhibit G,
has been executed and delivered on behalf of the Corporation and the Trustee.
The Representation Letter and DTC's operational arrangements shall not in any
way limit the provisions of Section 2.05(b) hereof or in any other way impose
upon the Corporation any obligation whatsoever with respect to persons having
interests in any Series of the Series 2002A Notes other than the Registered
Owners, as shown on the registration books kept by the Registrar. The Registrar
shall take all action necessary for all representations of the Corporation in
the Representation Letter and DTC's operational arrangements with respect to the
Paying Agents and the Registrar, respectively, to at all times be complied with.
(d) (i) DTC may determine to discontinue providing its services with
respect to the Series 2002A Notes at any time by giving reasonable notice to the
Corporation, the Trustee and the Registrar and discharging its responsibilities
with respect thereto under applicable law.
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(ii) The Corporation, in its sole discretion and
without the consent of any other person, may terminate the
services of DTC with respect to the Series 2002A Notes if the
Corporation determines that:
(A) DTC is unable to discharge its
responsibilities with respect to such Series of
Series 2002A Notes, or
(B) a continuation of the requirement that
all of the Outstanding Series 2002A Notes be
registered in the registration books kept by the
Registrar in the name of Cede, or any other nominee
of DTC, is not in the best interest of the Beneficial
Owners of the Series 2002A Notes.
(iii) Upon the termination of the services of DTC
with respect to the Series 2002A Notes pursuant to Section
2.05(d)(ii)(B) hereof, or upon the discontinuance or
termination of the services of DTC with respect to the Series
2002A Notes, pursuant to Section 2.05(d)(i) or Section
2.05(d)(ii)(A) hereof after which no substitute Securities
Depository willing to undertake the functions of DTC hereunder
can be found which, in the opinion of the Corporation, is
willing and able to undertake such functions upon reasonable
and customary terms, the Corporation is obligated to deliver
Series 2002A Note certificates, as described in the Indenture
and the Series 2002A Notes shall no longer be restricted to
being registered in the registration books kept by the
Registrar in the name of Cede as nominee of DTC, but may be
registered in whatever name or names Registered Owners
transferring or exchanging Series 2002A Notes shall designate,
in accordance with the provisions of the Indenture.
(e) Notwithstanding any other provision of the Indenture to
the contrary, so long as any Series 2002A Note is registered in the
name of Cede, as nominee of DTC, all payments with respect to principal
of, premium, if any, and interest on such Series 2002A Note, as
applicable and all notices with respect to such Series 2002A Note shall
be made and given, respectively, in the manner provided in the
Representation Letter and DTC's operational arrangements.
SECTION 2.06. APPOINTMENT OF PAYING AGENT AND REGISTRAR. Zions First
National Bank is hereby appointed Paying Agent and Registrar with respect to the
Series 2002A Notes. In its capacity as Paying Agent and Registrar, Zions First
National Bank hereby indicates its acceptance of the duties thereof by its
execution of this Second Supplemental Indenture as Trustee.
SECTION 2.07. APPOINTMENT OF AUTHENTICATING AGENT. The Corporation
hereby determines that the appointment of an Authenticating Agent is necessary
to the issuance of the Series 2002A Notes and hereby appoints Zions First
National Bank as Authenticating Agent with respect to the Series 2002A Notes. In
its capacity as Authenticating Agent, Zions First National Bank hereby indicates
its acceptance of the duties thereof by its execution of this Second
Supplemental Indenture as Trustee.
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SECTION 2.08. REDEMPTION.
(a) GENERAL. The Series 2002A Notes shall be subject to
redemption by or on behalf of the Corporation prior to maturity upon
notice as provided in this Section and Article VI of the General
Indenture. Except as otherwise provided in this Section, if less than
all of the Series 2002A Notes then Outstanding are to be redeemed, the
particular Series 2002A Notes to be redeemed shall be selected in
accordance with the written directions of the Corporation and the
provisions of Section 6.04 of the General Indenture.
(b) OPTIONAL REDEMPTION OF THE SERIES 2002A NOTES. Subject to
Section 3.04(e) hereof, the Series 2002A Notes are subject to
redemption prior to their maturity at the option of the Corporation
from any source of funds, including funds derived from the sale of
Financed Student Loans, in whole or in part, on any date at a
redemption price equal to 100% of the principal amount of such Series
2002A Notes or portions thereof redeemed, together with accrued
interest thereon (including any Carry-over Amount thereon and any
accrued interest on such Carry-over Amount) to the date of redemption.
(c) MANDATORY REDEMPTION OF THE SERIES 2002A NOTES.
(i) The Series 2002A Notes are subject to mandatory
redemption prior to their maturity on the first Interest
Payment Date which is at least 45 days after February 1, 2006,
or such later date agreed to in writing by the Credit Facility
Provider, from moneys representing unexpended original
proceeds of the Series 2002A Notes remaining on deposit in the
Acquisition Fund on such date, in whole or in part, at a
redemption price equal to 100% of the principal amount of such
Series 2002A Notes or portions thereof redeemed, together with
accrued interest thereon (but not including any Carry-over
Amount thereon and any accrued interest on such Carry-over
Amount) to the date of redemption. Any moneys representing
unexpended original proceeds of the Series 2002A Notes
remaining on deposit in the Acquisition Fund after the
redemption described in this paragraph (i) (which amount must
be less than an Authorized Denomination for the Series 2002A
Notes) shall be transferred to the Revenue Fund.
(ii) The Notes, including the Series 2002A Notes, are
subject to mandatory redemption prior to their maturity on the
first Interest Payment Date which is at least 45 days after
July 1, 2005 from Recoveries of Principal on deposit in the
Acquisition Fund on such date, or such later date agreed to in
writing by the Credit Facility Provider, in whole or in part,
at a redemption price equal to 100% of the principal amount of
such Notes or portions thereof redeemed, together with accrued
interest thereon (but not including any Carry-over Amount
thereon and any accrued interest on such Carry-over Amount) to
the date of redemption. Any moneys representing Recoveries of
Principal remaining on deposit in the Acquisition Fund after
the redemption described in this paragraph (ii) (which amount
must be less than the smallest Authorized Denomination for the
Notes) shall be transferred to the Revenue Fund. The Series of
Notes to be redeemed shall be selected by the Corporation.
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(iii) The Notes, including the Series 2002A Notes,
shall be subject to mandatory redemption prior to their
maturity on each Interest Payment Date from Recoveries of
Principal deposited to the Senior Principal Account of the
Note Fund on the 45th day prior to such Interest Payment Date,
in whole or in part, at a redemption price equal to 100% of
the principal amount of such Notes or portions thereof
redeemed, together with accrued interest thereon (but not
including any Carry-over Amount thereon and any accrued
interest on such Carry-over Amount) to the date of redemption.
The Series of Notes to be redeemed shall be selected by the
Corporation.
(d) NOTICE. Notice of the redemption of Series 2002A Notes
shall be given pursuant to Section 6.04 of the General Indenture,
except that notice shall be given at least thirty (30) days before the
Redemption Date.
SECTION 2.09. TRANSFER OF NOTES.
(a) Each Person who is or who becomes a Beneficial Owner of a
Series 2002A Note shall be deemed by the acceptance or acquisition of
such beneficial ownership interest to have agreed to be bound by the
provisions of this Section. No beneficial ownership interest in a
Series 2002A Note may be transferred, unless the proposed transferee
shall have delivered to the Corporation and the Trustee either (i)
evidence satisfactory to them that such Series 2002A Note has been
registered under the Securities Act and has been registered or
qualified under all applicable state securities laws to the reasonable
satisfaction of the Corporation or (ii) an express agreement
substantially in the form of the Investment Letter attached as Exhibit
H-1 or Exhibit H-2 hereto by the proposed transferee to be bound by and
to abide by the provisions of this Section and the restrictions noted
in the Investment Letter; provided that compliance with the provisions
of subparagraphs (i) and (ii) of this Section shall not be required if
the proposed transferee is listed in the latest available S&P Rule 144A
list of Qualified Institutional Buyers or other industry recognized
subscriber services listing Qualified Institutional Buyers.
(b) The Corporation will, upon the request of any Beneficial
Owner of any Outstanding Series 2002A Note, which Beneficial Owner is a
qualified institutional buyer, provide such Beneficial Owner, and any
qualified institutional buyer designated by such Beneficial Owner, such
financial and other information as such Beneficial Owner may reasonably
determine to be necessary in order to permit compliance with the
information requirements of Rule 144A under the Securities Act in
connection with the resale of Series 2002A Notes, except at such times
as the Corporation is subject to the reporting requirements of Section
13 or 15(d) of the Securities Exchange Act of 1934, as amended. For the
purpose of this paragraph, the term "qualified institutional buyer"
shall have the meaning specified in Rule 144A under the Securities Act.
SECTION 2.10. EXECUTION OF REIMBURSEMENT AGREEMENT AND CUSTODIAN
AGREEMENT. The Corporation hereby directs the Trustee to execute and deliver the
Reimbursement Agreement with MBIA Insurance Corporation and the Custodian
Agreement, dated as of March 1, 2002, among the Corporation, the Trustee and
AFSA Data Corporation.
13
ARTICLE III
DEPOSITS INTO FUNDS AND ACCOUNTS; DISPOSITION OF
PROCEEDS OF THE SALE OF THE SERIES 2002A NOTES; AND
USE AND DISBURSEMENTS OF FUNDS
SECTION 3.01. DEPOSITS INTO FUNDS AND ACCOUNTS ON THE ISSUE DATE. The
net proceeds of the sale of the Series 2002A Notes will be distributed and
applied in accordance with the following provisions:
(a) On the Issue Date, the Trustee shall deposit into the
Acquisition Fund an amount equal to $49,752,500.00, representing the
net proceeds of the Series 2002A Notes, of which $25,333.00 shall be
paid to MBIA Insurance Corporation as provider of the Credit Facility
and the Debt Service Reserve Policy.
(b) On the Issue Date, the Corporation shall deliver to the
Trustee the replacement Debt Service Reserve Policy in an amount equal
to the initial Debt Service Reserve Requirement for the Series 2001A
Notes and the Series 2002A Notes, for credit to the Senior Reserve
Account of the Debt Service Reserve Fund to secure the payment of the
principal of and interest on the Senior Notes. The Trustee is hereby
directed to accept delivery of the Debt Service Reserve Policy and the
Credit Facility.
SECTION 3.02. PAYMENT OF EXPENSES AND COSTS OF ISSUANCE. The Trustee
shall, upon written direction of the Corporation, pay Program Expenses from
amounts available therefor in the Revenue Fund to the extent provided in Section
5.04 of the General Indenture. The Corporation shall pay Maintenance and
Operating Expenses from amounts available therefor in the Operating Fund to the
extent provided in Section 5.08 of the General Indenture. Notwithstanding the
foregoing, Program Expenses and Maintenance and Operating Expenses to be paid
from the Revenue Fund and the Operating Fund, respectively, shall be limited to
the amounts shown in the Closing Cash Flow Statement relating to the Series
2002A Notes as certified to the Trustee by the Corporation. Costs of Issuance of
the Series 2002A Notes shall be paid out of the Acquisition Fund.
SECTION 3.03. INCREASE IN PROGRAM EXPENSES AND MAINTENANCE AND
OPERATING EXPENSES. The Corporation may increase Program Expenses and
Maintenance and Operating Expenses beyond the limit set forth in Section 3.02
hereof upon delivery to the Trustee of a subsequent Cash Flow Statement relating
to the Series 2002A Notes and a Credit Confirmation (or, for Notes not subject
to a Credit Facility, a Rating Confirmation). The Trustee shall have no duty to
examine, know or determine any information set forth in any Cash Flow Statement
and may conclusively rely on the certification of the Corporation.
SECTION 3.04. DEBT SERVICE RESERVE FUND.
(a) On the Issue Date, there shall be credited to the Debt
Service Reserve Fund the Debt Service Reserve Policy from MBIA
Insurance Corporation, as the Surety Provider, which shall be deemed a
deposit to the Debt Service Reserve Fund in the amount of the Debt
Service Reserve Requirement for the Series 2001A Notes and the
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Series 2002A Notes. Amounts on deposit or available in the Debt Service
Reserve Fund shall be applied as provided in Section 5.07 and Section
5.12 of the General Indenture. If MBIA Insurance Corporation consents
to the issuance of any additional Notes, MBIA Insurance Corporation is
required under the terms of the Financial Guaranty Agreement to provide
a replacement Debt Service Reserve Policy which permits the Debt
Service Reserve Policy to be drawn upon to pay such additional Notes.
(b) After the application of any cash on deposit in the Debt
Service Reserve Fund, if the Trustee determines pursuant to Section
5.07 or Section 5.12 of the General Indenture that a further claim or
draw upon the Debt Service Reserve Fund is required to pay the
principal of or interest on the Notes, the Trustee shall draw on the
Debt Service Reserve Policy. The Trustee shall make a Demand for
Payment to the Surety Provider for any such required amount in the
manner and as provided in the Debt Service Reserve Policy attached
hereto as Exhibit I. Such Demand for Payment shall be given to the
Surety Provider at least three Business Days prior to the date on which
the funds are required.
(c) In the event that the amount on deposit in the Debt
Service Reserve Fund falls below the Debt Service Reserve Requirement,
there shall be deposited to the Debt Service Reserve Fund from money on
deposit in the Revenue Fund, in accordance with Section 5.04(b) of the
General Indenture, that sum of money needed to accumulate or
reaccumulate the amount therein so that at all times the amount of the
Debt Service Reserve Fund equals the Debt Service Reserve Requirement;
provided that so long as the Debt Service Reserve Policy is in effect,
in lieu of such repayments to the Debt Service Reserve Fund, an amount
necessary to reinstate the Debt Service Reserve Policy shall be payable
to the Surety Provider to be used to reinstate the Debt Service Reserve
Policy in accordance with the Financial Guaranty Agreement prior to
replenishing the Debt Service Reserve Fund.
(d) The Trustee shall maintain adequate records, verified with
the Surety Provider, as to the amount available to be drawn at any time
under the Debt Service Reserve Policy and as to the amounts paid and
owing to the Surety Provider under the terms of the Financial Guaranty
Agreement or any other documents relating to the Debt Service Reserve
Policy.
(e) Any provisions in the General Indenture notwithstanding,
no money shall be remitted to the Corporation from moneys on deposit in
the Revenue Fund, pursuant to Section 5.04(b)(xx) or Section 5.11 of
the General Indenture and no Notes shall be optionally redeemed by the
Corporation, unless at the time of such transfer or optional redemption
the Debt Service Reserve Policy is fully reinstated and all amounts
currently due and owing to the Surety Provider under the Financial
Guaranty Agreement or any other documents relating to the Debt Service
Reserve Policy have been paid in full.
(f) Nothing herein shall be construed as limiting the right of
the Corporation to deposit cash in the Debt Service Reserve Fund, to
substitute a Debt Service Reserve Policy which constitutes a Qualified
Surety Bond for the cash required hereunder, or to
15
meet the Debt Service Reserve Requirement with a combination of cash
and a Debt Service Reserve Policy which constitutes a Qualified Surety
Bond.
SECTION 3.05. RECOVERIES OF PRINCIPAL, RECYCLING. The Corporation may
finance additional Student Loans with amounts on deposit in the Acquisition Fund
before July 1, 2005, (or such later date approved in writing by the Credit
Facility Provider) derived from Revenues and Recoveries of Principal on Financed
Student Loans purchased with proceeds of the Series 2002A Notes (or with
Recoveries of Principal derived therefrom); provided, however, the Credit
Facility Provider may direct the Corporation in writing to not purchase any
Student Loans at any time if the Credit Provider provides the Corporation and
the Trustee with a certificate stating a reasonable basis why the financing of
additional Student Loans should not continue, and the Credit Facility Provider
may also subsequently permit Student Loans to again be purchased by giving
written notice to the Corporation and the Trustee. Prior to July 1, 2005, (or
such later date approved in writing by the Credit Facility Provider), Recoveries
of Principal on Financed Student Loans purchased with proceeds of the Series
2002A Notes (or with Recoveries of Principal derived therefrom) shall be
deposited to the Acquisition Fund. On and after July 1, 2005, (or such later
date approved in writing by the Credit Facility Provider), all Recoveries of
Principal on Financed Student Loans purchased with proceeds of the Series 2002A
Notes (or with Recoveries of Principal derived therefrom) shall be deposited to
the Senior Principal Account of the Note Fund and used to redeem Notes.
SECTION 3.06. LIMITATION ON SALE OF FINANCED STUDENT LOANS. In the
event that the sum of the value of (a) the Financed Student Loans (valued at par
plus accrued interest and accrued Special Allowance Payments and Interest
Subsidy Payments, if any) credited to the Acquisition Fund and (b) all cash and
Investment Securities held in the Funds and Accounts (valued as set forth in the
General Indenture or in the pertinent Supplemental Indenture, plus accrued
interest, but excluding amounts irrevocably set aside to pay particular Notes
pursuant to Section 13.01 of the General Indenture) shall be less than 100% of
the sum of principal and accrued interest on all Outstanding Notes, the
Corporation shall not direct the sale of Financed Student Loans, unless the
Corporation shall have received a Credit Confirmation (or, for Notes not subject
to a Credit Facility, a Rating Confirmation) (all as calculated and determined
by the Corporation and evidenced in a Certificate of an Authorized
Representative to the Trustee).
SECTION 3.07. CASH FLOW STATEMENTS. The Corporation shall, no more
frequently than once every 12 months, provide to the Credit Facility Provider,
if requested in writing, a Cash Flow Statement based upon assumptions acceptable
to the Credit Facility Provider. At the request of the Credit Facility Provider,
if any, the Corporation shall provide a Cash Flow Statement upon the occurrence
of an Event of Default or upon the Corporation's failure to pay principal or
interest on any Notes Outstanding when and as the same shall become due.
SECTION 3.08. PERFECTION OF FINANCED STUDENT LOANS AND DEFAULTED
STUDENT LOANS. The Trustee shall have a first perfected security interest in all
Financed Student Loans; provided that the foregoing shall not prevent a Servicer
from releasing possession to the Corporation of the related promissory notes and
other documentation with respect to Financed Student Loans in default in
accordance with the provisions of its Servicing Agreement.
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SECTION 3.09. SERVICING OF FINANCED STUDENT LOANS. The Corporation will
obtain from each Servicer copies of third party audits of such Servicer at least
once each calendar year and upon the written request of the Credit Facility
Provider upon the occurrence of an Event of Default under the Indenture to
ensure that such Servicer is complying with the terms of the Servicing Agreement
and the rules and regulations of the Corporation and provide such report to the
Credit Facility Provider. Such report shall report such compliance in writing
(or otherwise describe any noncompliance in such detail as shall be reasonably
satisfactory to the Credit Facility Provider) and the Corporation shall provide
such report to the Credit Facility Provider. In the event that the Corporation
is notified (whether by such accountants or otherwise) of any material
noncompliance by a Servicer with the due diligence standards, the Corporation
shall use its best efforts to cause such Servicer to do all things necessary to
cure such noncompliance. If a required audit of a Servicer is not received
within 30 days after the time required or if a Servicer shall fail to cure
noncompliance described in the preceding sentence within 60 days after the
Corporation received notice thereof, the Corporation shall, at the written
request of the Credit Facility Provider, arrange for the prompt substitution of
such Servicer for the Financed Student Loans satisfactory to the Credit Facility
Provider and the Corporation under a Servicing Agreement granting rights
substantially identical to the rights granted under the initial Servicing
Agreement with respect to the Financed Student Loans or otherwise satisfactory
to the Credit Facility Provider. The Corporation covenants that each Servicing
Agreement shall provide that the Corporation may terminate the Servicing
Agreement and will, at the written direction of the Credit Facility Provider, if
the Servicer refuses or fails to perform in a material fashion any part of its
obligations under the Servicing Agreement, and fails or refuses to correct said
action or lack of action within 60 days after written notice, upon 60 days'
written notice to the Servicer. All written information required under this
Section shall be delivered to each Credit Facility Provider and the Trustee
within 15 days after receipt thereof by the Corporation. The Corporation
covenants that all amendments to a Servicing Agreement will be consented to in
writing by the Credit Facility Provider. The Corporation covenants that each
Servicing Agreement shall provide that the Servicer thereunder shall, upon an
Event of Default under the Indenture, service the Financed Student Loans as if
the Credit Facility Provider is the owner of the Financed Student Loans (a
third-party beneficiary) and the Credit Facility Provider pays the fees for such
accounts. The Corporation covenants that pursuant to each Servicing Agreement or
a related custody agreement, the Servicer will act as bailee and agent of the
Financed Student Loans for the Trustee. The Corporation shall annually certify
to the Trustee that each Servicer is in compliance with its Servicing Agreement
SECTION 3.10. REPURCHASE OBLIGATION UNDER STUDENT LOAN PURCHASE
AGREEMENTS. The Trustee, as a third-party beneficiary under the Student Loan
Purchase Agreements entered into by the Corporation, shall have the right to
request the repurchase of loans by the Seller thereunder upon the conditions and
subject to the provisions contained in the Student Loan Purchase Agreement. The
Trustee shall make such a request to the Seller thereunder to repurchase certain
specific loans pursuant to the Student Loan Purchase Agreement if: (a) the
Trustee has actual knowledge that the conditions precedent to such a repurchase
obligation with respect to such loans have not been satisfied; (b) it has
notified the Corporation in writing that such conditions have been satisfied;
and (c) the Corporation has not exercised its right to request the repurchase of
the applicable loans by the Seller within 30 days after receiving written notice
from the Trustee.
17
SECTION 3.11. ACQUISITION OF FUTURE PRIVATE LOANS. The characteristics
of the Private Loans acquired by the Corporation or the Trustee and deposited to
the Trust Estate subsequent to the Issue Date for the Series 2002A Notes shall
not materially differ from the portfolio of Private Loans purchase on the Issue
Date for the Series 2002A Notes (including, without limitation, school type and
borrower credit scores), unless the Corporation and the Trustee receive the
written approval of each Credit Facility Provider, if any, or if there is no
Credit Facility Provider, a Rating Confirmation.
ARTICLE IV
CREDIT FACILITY PROVIDER
SECTION 4.01. RIGHTS OF CREDIT FACILITY PROVIDER CONTROLLING. Anything
herein to the contrary notwithstanding, if a Credit Facility is in effect with
respect to a Series of the Series 2002A Notes and the Credit Facility Provider
is not in default of its obligation to make payments thereunder, the Credit
Facility Provider shall be deemed to be the Registered Owner of all such Series
of the Series 2002A Notes then Outstanding for all purposes (including, without
limitation, all approvals, consents, waivers, authorizations, directions,
inspections and the institution of any action), provided that nothing in this
Section shall impair the rights of the Registered Owners to receive all payments
due under the Series 2002A Notes, and the Credit Facility Provider shall have
the exclusive right to exercise or direct the exercise of remedies on behalf of
the Registered Owners of the Series 2002A Notes in accordance with the terms of
the Indenture following an Event of Default, and the principal of all such
Series 2002A Notes Outstanding may not be declared to be due and payable
immediately without the prior written consent of the Credit Facility Provider.
SECTION 4.02. PAYMENTS UNDER THE CREDIT FACILITY FOR THE SERIES 2002
NOTES.
(a) If, as of the second Business Day next preceding any Note
Payment Date for the Series 2002A Notes is due, there are insufficient
moneys available under the Indenture to pay all principal and interest
coming due on the Series 2002A Notes on the next succeeding payment
date, the Trustee shall immediately notify the Credit Facility Provider
or its designee by telephone or telegraph, confirmed in writing by
mail, of the amount of the deficiency.
(b) If the deficiency is made up in whole or in part prior to
or on the Interest Payment Date or Principal Payment Date, the Trustee
shall so notify the Credit Facility Provider or its designee.
(c) In addition, if the Trustee has notice that any of the
Registered Owners have been required to disgorge payments of principal
or interest on the Series 2002A Notes to the Corporation or to the
trustee in bankruptcy for creditors or others pursuant to a final
judgment by a court of competent jurisdiction that such payment
constitutes a voidable preference to such Registered Owner within the
meaning of any applicable bankruptcy laws, then the Trustee shall
notify the Credit Facility Provider or its designee of such fact by
telephone or telegraphic notice, confirmed in writing by mail.
18
(d) The Trustee is hereby irrevocably designated, appointed,
directed and authorized to act as attorney-in-fact for Registered
Owners of the Series 2002A Notes as follows:
(i) if and to the extent there is a deficiency in
amounts required to pay interest on the Series 2002A Notes,
the Trustee shall (A) execute and deliver to the Insurance
Paying Agent, in form satisfactory to the Insurance Paying
Agent, an instrument appointing the Credit Facility Provider
as agent for such Registered Owner in any legal proceedings
related to the payment of such interest and an assignment to
the Credit Facility Provider of the claims for interest to
which such deficiency rates and which are paid by the Credit
Facility Provider, (B) receive as designee of the respective
Registered Owner (and not as Trustee) in accordance with the
tenor of the Credit Facility payment from the Insurance Paying
Agent with respect to the claims for interest so assigned and
(C) disburse the same to such respective Registered Owners.
(ii) if and to the extent of a deficiency in amounts
required to pay principal of the Series 2002A Notes, the
Trustee shall (A) execute and deliver to the Insurance Paying
Agent an instrument appointing the Credit Facility Provider as
agent for such Registered Owner in any legal proceeding
relating to the payment of such principal and assignment to
the Credit Facility Provider of any of the Series 2002A Notes
surrendered to the Insurance Paying Agent of so much of the
principal amount thereof as has not previously been paid or
for which moneys are not held by the Trustee and available for
such payment (but such assignment shall be delivered only if
payment from the Insurance Paying Agent is received), (B)
receive as designee of the respective Registered Owners (and
not as Trustee) in accordance with the tenor of the Credit
Facility payment therefor from the Insurance Paying Agent and
(C) disburse the same to such Registered Owner.
(e) Payments with respect to claims for interest on and
principal of Series 2002A Notes disbursed by the Trustee from proceeds
of the Credit Facility shall not be considered to discharge the
obligation of the Corporation with respect to such Series 2002A Notes,
and the Credit Facility Provider shall become the Registered Owner of
such unpaid Series 2002A Notes and claims for interest in accordance
with the tenor of the assignment made to it under the provisions of
this subsection or otherwise.
(f) Irrespective of whether any such assignment is executed
and delivered, the Corporation and the Trustee hereby agree for the
benefit of the Credit Facility Provider that:
(i) they recognize that to the extent the Credit
Facility Provider makes payments, directly or indirectly (as
by paying through the Trustee), on account of principal of or
interest on the Series 2002A Notes, the Credit Facility
Provider will be subrogated to the rights of such Registered
Owners to receive the amount of such principal and interest
from the Corporation, with interest thereon as provided and
solely from the sources stated in the Indenture and the Series
2002A Notes; and
19
(ii) they will accordingly pay to the Credit Facility
Provider the amount of such principal and interest (including
principal and interest recovered under subparagraph (ii) of
the first paragraph of the corresponding Credit Facility,
which principal and interest shall be deemed past due and not
to have been paid), with interest thereof as provided in this
Second Supplemental Indenture and the Series 2002A Notes, but
only from the sources and in the manner provided herein for
the payment of principal of and interest on the Series 2002A
Notes to Registered Owners and will otherwise treat the Credit
Facility Provider as the owner of such rights to the amount of
such principal and interest.
SECTION 4.03. NOTICES, CONSENTS, MISCELLANEOUS.
(a) In connection with the issuance of additional Notes, if
any, under the General Indenture, the Corporation shall deliver to the
Credit Facility Provider a copy of the disclosure document, if any,
circulated with respect to such additional Notes.
(b) No amendment or supplement shall be made to the General
Indenture, this Second Supplemental Indenture, the Auction Agency
Agreement, the Broker-Dealer Agreement, any Student Loan Purchase
Agreement, any Servicing Agreement, any Liquidity Facility or any
Reimbursement Agreement of any Liquidity Facility Provider without
prior written consent of the Credit Facility Provider. Copies of any
amendments or supplements made to the documents executed in connection
with the issuance of the Series 2002A Notes which are consented to in
writing by the Credit Facility Provider shall be sent to the Rating
Agencies by the Corporation.
(c) The Credit Facility Provider shall receive written notice
of the resignation or removal of the Trustee and any successor trustee
must be approved by the Credit Facility Provider. The Credit Facility
Provider shall receive written notice of the resignation or removal of
any Paying Agent and any successor paying agent must be approved in
writing by the Credit Facility Provider.
(d) The Credit Facility Provider shall receive from the
Corporation copies of all notices required to be delivered to
Registered Owners or to the Trustee. The Credit Facility Provider shall
receive copies, on an annual basis, of the Corporation's audited
financial statements and annual budget and, on a quarterly basis,
copies of the Corporation's unaudited financial statements.
(e) While any Series 2002A Notes are Outstanding, the Credit
Facility Provider shall approve in writing any Liquidity Facility
Provider and the terms of any Liquidity Facility.
(f) While the Credit Facility is in effect, the Trustee will
furnish the Credit Facility Provider with such information as it may
reasonably request regarding the Series 2002A Notes, as appears from
the books and records under its custody and control, or as otherwise
known to it. The Trustee will permit the Credit Facility Provider to
have access to and make copies at the Credit Facility Provider's own
expense of all such books and records at any reasonable time.
20
(g) While the Credit Facility is in effect, the Corporation
agrees to permit the Credit Facility Provider to examine, visit and
inspect, at any reasonable time, upon reasonable notice, the Financed
Student Loans acquired, originated or refinanced with the net proceeds
of the Notes, and its facilities, and any accounts, books and records,
including their receipts, disbursements, contracts, investments and any
other matters relating thereto and to their financial standing, and to
supply such reports and information as the Credit Facility Provider may
reasonably require. An Authorized Representative of the Corporation
shall, at the reasonable written request of the Credit Facility
Provider, discuss its financial matters with the Credit Facility
Provider or a designee and provide the Credit Facility Provider with
copies of any documents that are reasonably requested by the Credit
Facility Provider or a designee and have a material financial affect on
it.
(h) The Credit Facility Provider shall be notified by the
Trustee (i) immediately upon its actual knowledge of the occurrence of
an Event of Default or of any event that with notice and/or with the
lapse of time could become an Event of Default and (ii) of any
redemption of Series 2002A Notes at the same time that the Registered
Owners of the Series 2002A Notes to be redeemed are notified. All
notices, reports, statements, schedules, and certificates to be
delivered to or by the Trustee, or to a Registered Owner of a Series
2002A Note or available at the request of the Registered Owners shall
also be provided to the Credit Facility Provider. In addition, all
opinions to be delivered to or by the Trustee, or to a Registered Owner
of a Series 2002A Note shall also be addressed to the Credit Facility
Provider. All notices required to be given to the Credit Facility
Provider under this Second Supplemental Indenture shall be in writing
and shall be sent by registered or certified mail addressed to MBIA
Insurance Corporation, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇,
Attention: Insured Portfolio Management--PCF.
(i) Notwithstanding any other provision to the contrary in
this Second Supplemental Indenture, the Credit Facility Provider is an
express third-party beneficiary of and may enforce this Second
Supplemental Indenture as if a party thereto.
SECTION 4.04. CONSENTS, ETC. BY CREDIT FACILITY PROVIDER LIMITED.
Notwithstanding any other provision of this Second Supplemental Indenture or the
General Indenture to the contrary, no consent of or notice to the Credit
Facility Provider shall be required under any provision of this Second
Supplemental Indenture or the General Indenture nor shall the Credit Facility
Provider have any right to receive notice of, consent to, direct or control any
actions, restrictions, rights, remedies, waivers or accelerations pursuant to
any provision of this Second Supplemental Indenture or the General Indenture
after each Credit Facility has expired or during any time which:
(a) the Credit Facility Provider is in default in its
obligation under the Credit Facility;
(b) the Credit Facility for any reason ceases to be valid and
binding on the Credit Facility Provider or is declared to be null and
void, or the validity or enforceability of any material provision of
the Credit Facility is denied by the Credit Facility Provider or any
governmental agency or authority, or the Credit Facility Provider is
denying
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further liability or obligation under the Credit Facility, contrary to
the terms of either Credit Facility;
(c) a petition has been filed and is pending against the
Credit Facility Provider under any bankruptcy, reorganization,
arrangement, insolvency, readjustment of debt, dissolution or
liquidation law of any jurisdiction, whether now or hereafter in
effect, and has not been dismissed within 30 days after such filing; or
(d) the Credit Facility Provider has filed a petition, which
is pending, under any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution or liquidation law of any
jurisdiction, whether now or hereafter in effect, or has consented to
the filing of any petition against it under such law.
SECTION 4.05. RATING NOTIFICATIONS UPON A CREDIT CONFIRMATION. Each
Rating Agency shall receive a Rating Notification any time a Credit Facility
Provider has been requested to provide, or has actually provided to, the
Corporation or the Trustee a Credit Confirmation.
ARTICLE V
MISCELLANEOUS
SECTION 5.01. SECOND SUPPLEMENTAL INDENTURE CONSTRUED WITH GENERAL
INDENTURE. All of the provisions of this Second Supplemental Indenture shall be
deemed to be and construed as part of the General Indenture to the same extent
as if fully set forth therein.
SECTION 5.02. GENERAL INDENTURE AS SUPPLEMENTED TO REMAIN IN EFFECT.
Save and except as herein supplemented by this Second Supplemental Indenture,
the General Indenture shall remain in full force and effect.
SECTION 5.03. SEVERABILITY. In any section, paragraph, clause or
provision of this Second Supplemental Indenture shall for any reason be held to
be invalid or unenforceable, the invalidity or unenforceability of such section,
paragraph, clause or provision shall not affect any of the remaining provisions
of this Second Supplemental Indenture.
SECTION 5.04. CONFIRMATION OF ACTIONS. All action (not inconsistent
with the provisions of this Second Supplemental Indenture) heretofore taken by
the Corporation, directed toward the issuance and sale of the Series 2002A Notes
is hereby ratified, approved and confirmed.
SECTION 5.05. GOVERNING LAW. This Second Supplemental Indenture shall
be construed in accordance with the laws of the State.
SECTION 5.06. NOTICES. Any notice, demand, direction, request or other
instrument authorized or required by this Second Supplemental Indenture to be
given to or filed with the Corporation shall be deemed to have been sufficiently
given or filed for all purposes, if any, when delivered or sent by facsimile
transmission, confirmed by first class mail, postage prepaid, and shall be
deemed given when transmitted (answer back confirmed) to the addresses given in
Section 13.04 of the General Indenture and as follows:
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If to the Corporation: CFLD-I, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
UICI
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Trustee,
Tender Agent,
Paying Agent,
Registrar, and
Authenticating Agent: Zions First National Bank
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Department
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Auction Agent: Bankers Trust Company
▇▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Assistant Vice President
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Broker-Dealer: UBS PaineWebber Inc.
1285 Avenue of the ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Manager, Short Term Desk
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to Moody's: ▇▇▇▇▇'▇ Investors Service, Inc.
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ABS Monitoring Department
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to Fitch: Fitch Ratings
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ABS Group
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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If to Credit Facility Provider: MBIA Insurance Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: IPM-SF
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to Surety Provider: MBIA Insurance Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: IPM-SF
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
To any other Indenture Agent: to such facsimile number and address as
such Indenture Agent shall indicate in the acceptance of office filed by each
such Indenture Agent pursuant to Section 13.04 of the General Indenture.
The Corporation, the Trustee, the Credit Facility Provider, the Surety
Provider, any other Indenture Agent and a Rating Agency, may, by like notice to
each other such person, designate any further or different facsimile numbers and
addresses to which subsequent notices shall be sent.
The parties, by like notice to each other person, may designate any
further or different addressed to which subsequent notices shall be sent.
The Corporation shall give written notice to the Rating Agencies and
any Credit Facility Provider of each of the following events, promptly following
the occurrence thereof:
(a) any change in the identity of the Trustee;
(b) any change in the identity of the Surety Provider;
(c) any material amendments in or supplements to the General
Indenture or this Second Supplemental Indenture; or
(d) the redemption or defeasance of all the Outstanding Series
2002A Notes.
SECTION 5.07. RIGHTS OF CREDIT FACILITY PROVIDER. The Credit Facility
Provider may not exercise its rights and remedies under this Second Supplemental
Indenture and the General Indenture if the Credit Facility Provider is then in
default under the Credit Facility or bankrupt or insolvent.
SECTION 5.08. EXECUTION IN COUNTERPARTS. This Second Supplemental
Indenture may be executed in any number of counterparts, each of which, when so
executed and delivered, shall be an original; but such counterparts shall
together constitute but one and the same instrument.
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IN WITNESS WHEREOF, the undersigned President and Secretary of the
Corporation and an authorized officer of the Trustee have hereunto executed this
Second Supplemental Indenture as of the date first written above.
CFLD-I, INC.
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇, President
Attest:
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Secretary
ZIONS FIRST NATIONAL BANK, as Trustee
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇, Vice President
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The undersigned representative of MBIA Insurance Corporation, as the
sole Credit Facility Provider, hereby consents to the execution and delivery of
this Second Supplemental Indenture, to the issuance and delivery of the Series
2002A Notes thereunder and to the replacement of the Debt Service Reserve Policy
for the Series 2002A Bonds.
MBIA INSURANCE CORPORATION
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------
Title: Assistant Secretary
----------------------------
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