Unassociated Document
Ambac
Assurance Corporation
One
State
Street Plaza
New
York,
New York 10004
Telephone: (212)
668-0340
NOTE
GUARANTY INSURANCE POLICY
Effective
Date: September 20,
2007 Note
Guaranty Insurance Policy No. AB1115BE
Ambac
Assurance Corporation (“Ambac”), in consideration of the payment of the
premium and subject to the terms of this Note Guaranty Insurance Policy (the
“Note Guaranty Insurance Policy”), hereby unconditionally and irrevocably
guarantees the full and complete payment to the Indenture Trustee, on behalf
of
the Noteholders, of Insured Amounts which are Due for Payment but which have
not
been paid by or on behalf of The National Collegiate Student Loan Trust 2007-4
(the “Issuer”) pursuant to the Indenture, dated as of September 1,
2007 (without regard to any amendment, supplement or modification thereto,
unless such amendment, supplement or modification has been approved in writing
by Ambac, the “Indenture”), between the Issuer and U.S. Bank National
Association, as Indenture Trustee (the “Indenture Trustee”), and the
promissory notes issued by the Issuer pursuant to the Indenture (the
“Notes”), Ambac shall make the payment of Insured Amounts under this Note
Guaranty Insurance Policy on the relevant Interest Payment Dates or Final
Maturity Dates.
1. Definitions. Unless
otherwise expressly provided herein or unless the context otherwise requires,
all capitalized terms used herein shall have the meanings set forth in the
Indenture. As used herein, the following terms shall have the
following meanings:
“Adjusted
Periodic Interest/Prepayment Penalty” means, with respect to any Interest
Payment Date and any Final Maturity Date, the Interest/Prepayment Penalty
Distribution Amount, exclusive of any Carryover Interest on the Auction Rate
Notes, as of such Interest Payment Date or Final Maturity Date.
“Business
Day” means any day other than a Saturday, a Sunday or a day on which banking
institutions or trust companies in New York City, Minneapolis, Minnesota or
the
city in which the designated corporate trust office of the Indenture Trustee
is
located, are authorized or obligated by law, regulation or executive order
to
remain closed or on which the office designated by Ambac for making a claim
under the Note Guaranty Insurance Policy is closed.
“Deficiency
Amount” means (i) with respect to any Interest Payment Date, the excess, if
any, of (a) all Adjusted Periodic Interest/Prepayment Penalty then due for
such
Interest Payment Date, over (b) all amounts available in any Trust Account
and
allocable to the payment of such Adjusted Periodic Interest/Prepayment Penalty
as of such Interest Payment Date in accordance with the priorities of payments
set forth in the Indenture, and (ii) with respect to the Final Maturity Date
for
any Class of Notes, the Outstanding Amount of such Class of Notes to the extent
unpaid on such Final Maturity Date after application of all funds available
for
reduction of principal of such Class of Notes on such Final Maturity Date in
accordance with the priorities of payments set forth in the Indenture;
provided that such Outstanding Amount shall not be greater than the
Maximum Invested Amount for such Class of Notes.
“Due
for Payment” means, with respect to any Insured Amount, such amount that is
due and payable under the Indenture on the related Interest Payment Date or
Final Maturity Date, as applicable.
“Event
of Bankruptcy” shall be deemed to have occurred with respect to a Person if
either:
(a) a
case or other proceeding shall be commenced, without the application or consent
of such Person, in any court, seeking the liquidation, reorganization, debt
arrangement, dissolution, winding up, or composition or readjustment of debts
of
such Person, the appointment of a trustee, receiver, custodian, liquidator,
assignee, sequestrator or the like for such Person or all or substantially
all
of its assets, or any similar action with respect to such Person under any
law
relating to bankruptcy, insolvency, reorganization, winding up or composition
or
adjustment of debts, and such case or proceeding shall continue undismissed,
or
unstayed and in effect, for a period of 60 consecutive days; or an order for
relief in respect of such Person shall be entered in an involuntary case under
the federal bankruptcy laws or other similar laws now or hereafter in effect;
or
(b) such
Person shall commence a voluntary case or other proceeding under any applicable
bankruptcy, insolvency, reorganization, debt arrangement, dissolution or other
similar law now or hereafter in effect, or shall consent to the appointment
of
or taking possession by a receiver, liquidator, assignee, trustee, custodian,
sequestrator (or other similar official) for, such Person or for any substantial
part of its property, or shall make any general assignment for the benefit
of
creditors, or shall fail to, or admit in writing its inability to, pay its
debts
generally as they become due, or, if a corporation or similar entity, its board
of directors shall vote to implement any of the foregoing.
“Final
Maturity Date” means for the (i) Class A-1-L Notes, July 25, 2019, (ii)
Class A-2-AR Notes, December 26, 2025, (iii) Class A-3-L Notes, March 25, 2038,
(iv) Class A-3-AR Notes, March 25, 2038, and (v) Class A-IO Notes, October
25,
2012.
“Insolvency
Proceeding” means a bankruptcy, insolvency, readjustment of debt,
reorganization, marshalling of assets and liabilities or similar proceeding
commenced by or against the Issuer as a result of an Event of Bankruptcy with
respect to the Issuer.
“Insured
Amounts” means with respect to any Interest Payment Date and any Final
Maturity Date, an amount equal to the Deficiency Amount for such Interest
Payment Date or Final Maturity Date.
“Insured
Payment” means, with respect to any Interest Payment Date and any Final
Maturity Date, the aggregate amount paid by Ambac to the Indenture Trustee
in
respect of (i) Insured Amounts for such Interest Payment Date or Final Maturity
Date and (ii) Preference Amounts for any given Business Day.
“Interest/Prepayment
Penalty Distribution Amount” means, with respect to any Distribution Date
for a Class of Offered Notes, the aggregate amount of interest accrued at the
applicable Note Interest Rate for the related Interest Period on the outstanding
principal balance (or notional amount, as applicable) of such Class on the
immediately preceding Distribution Date, after giving effect to all principal
distributions (or related reduction in notional amount, as applicable), to
Noteholders of that Class on that date (or, in the case of the first
Distribution Date, on the Closing Date), and, with respect to the Class A-IO
Notes, any Prepayment Penalty then payable with respect to such
Notes.
“Interest
Payment Date” means each Distribution Date and each Auction Rate Note
Payment Date.
“Maximum
Invested Amount” means (i) with respect to the Class A-1-L Notes,
$150,000,000, (ii) with respect to the Class A-2-AR-1 Notes, $94,200,000, (iii)
with respect to the Class A-2-AR-2 Notes, $94,200,000 (iv) with respect to
the
Class A-2-AR-3 Notes, $94,200,000; (v) with respect to the Class
A-2-AR-4 notes, $31,400,000; (vi) with respect to the Class A-3-L Notes,
$550,000,000; (vi) with respect to the Class A-3-R-1 Notes, $67,500,000; (vii)
with respect to the Class A-3-AR-2 Notes, $67,500,000, (viii) with respect
to
the Class A-3-AR-3 Notes, $67,500,000, (ix) with respect to the Class A-3-AR-4
Notes, $67,500,000, (x) with respect to the Class A-3-AR-5 Notes, $67,500,000,
(xi) with respect to the Class A-3-AR-6 Notes, $67,500,000 and (xiii) with
respect to the Class A-3-AR-7 Notes, $45,000,000.
“Nonpayment”
means, with respect to any Interest Payment Date or Final Maturity Date, as
applicable, an Insured Amount which is Due for Payment but has not been and
will
not be paid in respect of such Interest Payment Date or Final Maturity Date
pursuant to the Indenture.
“Notice
of Claim” has the meaning specified in Section 2 hereof.
“Person”
means any individual, corporation, partnership, joint venture, association,
joint stock company, trust, limited liability company, unincorporated
organization or government or any agency, instrumentality or political
subdivision thereof.
“Preference
Amount” shall mean any payment of principal or interest on the Notes which
has become Due for Payment, the nonpayment of which would have been covered
by
the Note Guaranty Insurance Policy, which is made to a Noteholder by or on
behalf of the Issuer which has been deemed a preferential transfer and
theretofore recovered from its Noteholder pursuant to the United States
Bankruptcy Code (11 U.S.C.) in accordance with a final, non-appealable order
of
a court of competent jurisdiction.
2. Notices
and Conditions to Payment.
(a) A
claim under this Note Guaranty Insurance Policy may be made on behalf of the
Noteholders by the Trustee by delivery of a duly completed Notice and Demand
for
Payment in the form attached hereto as Exhibit A (each, a “Notice of
Claim”), duly executed by the Indenture Trustee certifying that an Insured
Amount is Due for Payment, but will not be paid by the Issuer, by telecopy,
telex, or telegram to Ambac at the following address or at such other address
as
Ambac may designate to the Trustee from time to time:
Ambac
Assurance Corporation
One
State
Street Plaza
New
York,
New York 10004
Attention: General
Counsel
Telephone: (212)
208-3283
Telecopier:
(212) 208-3558
If
any
Notice of Claim received by Ambac is not in proper form or is otherwise
insufficient for the purpose of making a claim hereunder, it shall be deemed
not
to have been received by Ambac for purposes of this paragraph, and Ambac shall
promptly so advise the Indenture Trustee and the Indenture Trustee may submit
an
amended Notice of Claim.
(b) Any
Notice of Claim shall be delivered by the Indenture Trustee no later than 12:00
noon, New York City time, on the second Business Day preceding the related
Interest Payment Date or Final Maturity Date as a claim for payment in an amount
equal to the Insured Amounts which are then Due for Payment but which have
not
been paid by the Issuer.
3. Payment
of Insured Amounts; Subrogation. (a) Ambac will make a
deposit of funds in an account with the Indenture Trustee sufficient for the
payment to the Indenture Trustee of Insured Amounts which are then Due for
Payment but which will not be paid by the Issuer no later than 12:00 noon,
New
York City time, on the later of: (i) the Interest Payment Date or the
Final Maturity Date, as applicable, on which the related Deficiency Amount
is
Due for Payment or (ii) the third Business Day following receipt in New York,
New York on a Business Day by the General Counsel of Ambac of a Notice of Claim;
provided that if a Notice of Claim is received after 12:00 p.m., New York
time, on that Business Day, it will be deemed to be received on the following
Business Day. Once Ambac has made payment of an Insured Amount to the
Indenture Trustee, Ambac shall have no further obligation hereunder in respect
of such Insured Amount.
(b) Upon
payment hereunder,
Ambac shall be subrogated to the rights of each Noteholder and the Indenture
Trustee to receive any and all amounts due under the Notes under the terms
of
the Indenture to the extent of any payment by Ambac under this Note Guaranty
Insurance Policy or under the Insurance Agreement.
4. Limitation
on Payment; Obligations Unconditional.
(a) Notwithstanding
anything to the contrary herein, this Note Guaranty Insurance Policy does not
cover premiums, if any, payable in respect of the Notes, shortfalls, if any,
attributable to the liability of the Issuer or the Indenture Trustee for
withholding taxes, if any (including interest and penalties in respect of any
such liability), and any risk other than Nonpayment, including failure of the
Indenture Trustee to make any payment due to
Noteholders. Notwithstanding anything to the contrary herein, this
Note Guaranty Insurance Policy does not cover payments of any Carryover Interest on the Auction
Rate
Notes and does not insure against loss relating to payments made in
connection with the sale of the Notes at auctions or losses suffered as a result
of a Noteholder’s inability to sell the Notes.
(b) Notwithstanding
the occurrence of an Event of Default or any breach or default under the
Insurance Agreement, Ambac’s obligation to make any payment required pursuant to
this Note Guaranty Insurance Policy shall be irrevocable and unconditional,
subject only to the payment limitations provided herein.
(c) To
the fullest extent permitted by applicable law, Ambac hereby waives and agrees
not to assert any and all rights and defenses, to the extent such rights and
defenses may be available to Ambac, to avoid payment of its obligations under
this Note Guaranty Insurance Policy in accordance with express provisions
hereof. For the avoidance of doubt, Ambac undertakes not to impose
any defense to payment, but reserves all rights to assert any claim it may
have
against the Issuer, the Noteholders or any other Person and none of the
foregoing waivers shall prejudice any claim Ambac may have, whether directly
or
as subrogee or otherwise, subsequent to making such payment to the
Noteholders. For the avoidance of doubt, Ambac does not waive its
right to seek payment of all amounts to which it is entitled, including but
not
limited to, all Note Insurance Premiums, Insured Amounts, and all other amounts
owed to Ambac pursuant to the Reimbursement Agreement or any other Basic
Document.
5. Service
of Process. Any service of process on Ambac may be made to Ambac
at the office of the General Counsel of Ambac and such service of process shall
be valid and binding as to Ambac. During the term of its appointment,
the General Counsel will act as agent for the acceptance of service of process
and its offices are located at One State Street Plaza, New York, New York
10004.
6. Termination
of Note Guaranty Insurance Policy.
(a) This
Note Guaranty Insurance Policy will automatically terminate on the date on
which, to the satisfaction of Ambac and the Indenture Trustee, either (x) all
accrued interest (other than Carryover Interest on the Auction Rate Notes)
on
and the Outstanding Amount of the Notes is paid in full pursuant to the
Indenture or (y) Ambac has paid in full all Insured Amounts (including pursuant
to Section 9 herein).
(b) Notwithstanding
anything to the contrary in this Section 6, this Note Guaranty Insurance Policy
shall continue (i) with respect to claims on Insured Amounts made hereunder
prior to termination of this Note Guaranty Insurance Policy pursuant to Section
6(a) above, until such claims have been paid in full subject to the limitations
and exclusions set forth herein and (ii) with respect to claims on Preference
Amounts, until the date that is one year and one day from the date of
termination of this Note Guaranty Insurance Policy pursuant to Section 6(a)
above subject to the limitations and exclusions set forth herein.
7. Preference
Amounts. Ambac will make a payment on an Insured Amount that is a
Preference Amount on the later of (a) the second Business Day next following
the
Business Day on which Ambac shall have received the items referred to in clauses
(i), (ii), (iii), (iv) and (v) below and (b) the date set forth in the
Order (as defined herein), upon receipt of (i) a certified copy
of the final, non-appealable order of a court or other body exercising
jurisdiction in such Insolvency Proceeding to the effect that the Indenture
Trustee, or Noteholder, as applicable, is required to return such Preference
Amount paid during the term of this Note Guaranty Insurance Policy because
such
payments were avoided as a preferential transfer or otherwise rescinded or
required to be restored by the Indenture Trustee or Noteholder (the
“Order”), (ii) an opinion of counsel (which shall be at the expense
of the Issuer) satisfactory to Ambac that such Order has been entered and is
final and not subject to appeal or stay, (iii) an assignment in such form
as is reasonably required by Ambac, duly executed and delivered by the Indenture
Trustee or Noteholder, as applicable, irrevocably assigning to Ambac all rights
and claims of the Indenture Trustee or Noteholder, as applicable, relating
to or
arising under the Notes against the debtor which made such preference payment
or
otherwise with respect to such preference payment, (iv) appropriate
instruments to effect the appointment of Ambac as agent for such Noteholder
or
Indenture Trustee, as applicable, in any legal proceeding related to such
preference payment, such instruments being in a form satisfactory to Ambac
and
(v) a Notice of Claim appropriately completed and executed by the Indenture
Trustee; provided that if such documents are received after 12:00 p.m.,
New York City time, on such Business Day, they shall be deemed to be
received on the following Business Day; provided, further, that
Ambac shall not be obligated to make any payment in respect of any Preference
Amount representing a payment of principal of the Notes prior to the time Ambac
would have been required to make a payment in respect of such principal pursuant
to the first paragraph hereof. Such payments shall be disbursed to
the court or receiver, conservator, debtor-in-possession or trustee in
bankruptcy named in the Order of the court exercising jurisdiction on behalf
of
the Indenture Trustee or Noteholder, as applicable, and not to the Indenture
Trustee or any Noteholder, as applicable, directly unless the Indenture Trustee
or such Noteholder, as applicable, has returned principal or interest paid
on
the Notes to such court or receiver, conservator, debtor-in-possession or
trustee in bankruptcy named in the Order, in which case such payment shall
be
disbursed to the Indenture Trustee on behalf of the Noteholder, subject to
delivery of (a) the items referred to in clauses (i), (ii), (iii),
(iv) and (v) above to Ambac and (b) evidence satisfactory to Ambac that
payment has been made to such court or receiver, conservator,
debtor-in-possession or trustee in bankruptcy named in such
Order. The obligations of Ambac under this Note Guaranty Insurance
Policy with respect to any Preference Amount shall terminate one year and one
day after the date that all amounts of principal and interest (other than
Carryover Interest on the Auction Rate Notes) outstanding under the Notes have
been paid in full (such date, the “Preference Expiration Date”);
provided that in the event that a Notice of Claim has been properly
filed
by the Indenture Trustee in respect of an avoided payment prior to the
Preference Expiration Date, the obligations of Ambac in respect of such avoided
payment shall expire on the date on which Ambac has made all payments hereunder
in respect of all such avoided payments.
8. Premium. This
Note Guaranty Insurance Policy shall bear a premium as set forth in the
Financial Guaranty Insurance Policy Premium Letter. The premium
amounts payable in respect of this Note Guaranty Insurance Policy are not
refundable for any reason.
9. Acceleration
of Payment. Insured Payments shall be made only at the times set
forth in this Note Guaranty Insurance Policy, and no accelerated Insured
Payments will be made under this Note Guaranty Insurance Policy regardless
of
any acceleration of the Notes unless such acceleration of Insured Payments
is at
the sole option of Ambac.
10. Enforcement
of Obligations. Solely the Indenture Trustee on behalf of the
applicable Noteholders and not the Noteholders or any other party shall be
entitled to enforce the obligations of Ambac hereunder.
11. Governing
Law. This Note Guaranty Insurance Policy shall be governed by and
interpreted under the laws of the State of New York, without reference to its
conflicts of law provisions.
12. Exclusion
from Insurance Guaranty Fund. THE INSURANCE PROVIDED BY
THIS NOTE GUARANTY INSURANCE POLICY IS NOT COVERED BY THE PROPERTY/CASUALTY
INSURANCE SECURITY FUND SPECIFIED IN ARTICLE 76 OF THE NEW YORK INSURANCE
LAW.
13. Surrender
of Policy. The Indenture Trustee shall surrender this Note
Guaranty Insurance Policy to Ambac for cancellation upon expiration of the
term
hereof.
IN
WITNESS WHEREOF, Ambac has caused this Note Guaranty Insurance Policy to be
signed by its duly authorized officers.
/s/
Kathleen Drennen
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/s/
Richard Marsh
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Assistant
Secretary
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Managing
Director
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Exhibit
A
to
Note
Guaranty Insurance Policy No. No. AB1115BE
NOTICE
AND DEMAND FOR PAYMENT
Ambac
Assurance Corporation
One
State
Street Plaza
New
York,
NY 10004
Attention: General
Counsel
Reference
is made to the Note Guaranty Insurance Policy No. AB1115BE (the “Note Guaranty
Insurance Policy”) issued by Ambac Assurance Corporation
(“Ambac”). The terms which are capitalized herein and not otherwise
defined have the meaning specified in the Note Guaranty Insurance Policy and
the
Indenture unless the context otherwise requires.
The
Indenture Trustee hereby certifies that:
1. The
Indenture Trustee is the Indenture Trustee under the Indenture for the
Noteholders.
2. Payment
of an Insured Amount representing [accrued and unpaid interest (other than
Carryover Interest on the Auction Rate Notes) on the Outstanding Amount of
the
Notes] [Outstanding Amount of the Notes] is Due for Payment on
_________________.
3. Payment
of an Insured Amount representing a Prepayment Penalty with respect to the
Class
A-IO Notes is Due for Payment on ____________.
[4. $________________
has been or will be paid by the Issuer in respect of accrued and unpaid interest
(other than Carryover Interest on the Auction Rate Notes) on the Outstanding
Amount of the Notes, which amount is $________________ less than the full amount
of accrued and unpaid interest (other than Carryover Interest on the Auction
Rate Notes) on the Outstanding Amount of the Notes on such date.]
[5. $________________
has been or will be paid by the Issuer for payments in respect of aggregate
Outstanding Amount of the Notes on the Final Maturity Date specified in
paragraph 2 above, which amount is $________________ less than the full
amount of aggregate Outstanding Amount of the Notes due on such date or
dates.]
[6. $________________
has been or will be paid by the Issuer for payments in respect of the Prepayment
Penalty with respect to the Class A-IO Notes specified in paragraph 3
above, which amount is $________________ less than the full amount of the
Prepayment Penalty accrued and payable on such date or dates.]
7. The
Trustee has not heretofore made a demand for the Insured Amount[s] specified
in
paragraph[s] [4][5][6] above in respect of the date specified in
paragraph 2 above.
8. The
Indenture Trustee hereby requests that payment of the Insured Amount be made
by
Ambac on the relevant Interest Payment Dates or Final Maturity Dates and directs
that such payment under the Note Guaranty Insurance Policy be made to the
following account by bank wire transfer of federal or other immediately
available funds in accordance with the terms of the Note Guaranty Insurance
Policy to:
[designate
Collection Account account number]
9. The
Indenture Trustee hereby agrees that, following receipt of the Insured Amount
from Ambac, it shall (a) hold such amounts in trust and apply the same
directly to payment to Noteholders of the Insured Amounts when due; (b) not
apply such funds for any other purpose; (c) not commingle such funds with
other funds held by the Indenture Trustee; and (d) maintain an accurate
record of such payments.
10. The
Indenture Trustee, on behalf of the Noteholders, hereby assigns to Ambac the
rights and confirms that the Noteholders have assigned all rights of the
Noteholders under the Notes to the extent of any payment by Ambac under this
Note Guaranty Insurance Policy. The foregoing assignment is in
addition to, and not in limitation of, rights of subrogation otherwise available
to Ambac in respect of such payments. Payment to Ambac in respect of the
foregoing assignment, or with respect to any subrogation rights, shall in all
cases be subordinated and junior in right of payment to the prior indefeasible
payment in full of all principal and interest (other than Carryover Interest
on
the Auction Rate Notes) then due and payable to the Noteholders. The
Indenture Trustee shall take such action and deliver such instruments prepared
by Ambac as may be reasonably requested or required by Ambac to effectuate
the
purpose or provision of this paragraph.
ANY
PERSON WHO KNOWINGLY AND WITH INTENT TO DEFRAUD ANY INSURANCE COMPANY OR OTHER
PERSON FILES AN APPLICATION FOR INSURANCE OR STATEMENT OF CLAIM CONTAINING
ANY
MATERIALLY FALSE INFORMATION, OR CONCEALS FOR THE PURPOSE OF MISLEADING,
INFORMATION CONCERNING ANY FACT MATERIAL THERETO, COMMITS A FRAUDULENT INSURANCE
ACT, WHICH IS A CRIME, AND SHALL ALSO BE SUBJECT TO A CIVIL PENALTY NOT TO
EXCEED FIVE THOUSAND DOLLARS AND THE STATED VALUE OF THE CLAIM FOR EACH SUCH
VIOLATION.
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U.S.
BANK NATIONAL ASSOCIATION
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By:
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Name:
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Title:
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