EXHIBIT 4.2.9
FORM OF ADMINISTRATION AGREEMENT AMONG THE TRUST,
THE INDENTURE TRUSTEE AND THE ADMINISTRATOR (STUDENT LOAN SECURITIES)
Administration Agreement
ADMINISTRATION AGREEMENT dated as of [ ], among
[___________________________________] STUDENT LOAN TRUST [ ], a Delaware trust
(the "Issuer"), [GS Mortgage Securities Corp., a Delaware corporation], as
administrator (the "Administrator"), and [ ], a [ ] banking corporation, not
in its individual capacity but solely as Indenture Trustee (the "Indenture
Trustee").
W I T N E S S E T H
WHEREAS the Issuer was formed pursuant to the Trust Agreement dated
as of [ ] (the "Trust Agreement") among the Seller, as depositor, [ ], a [ ]
corporation (the "Company"), and [ ], as Eligible Lender Trustee (the
"Eligible Lender Trustee") and is issuing the Class A-1 Floating Rate
Asset-Backed Senior Notes (the "Class A-1 Notes"), the Class A-2 Floating Rate
Asset-Backed Senior Notes (the "Class A-2 Notes" and together with the Class
A-1 Notes, the "Senior Notes") and the Class B Floating Rate Asset-Backed
Subordinate Notes (the "Subordinate Notes" and, together with the Senior
Notes, the "Notes") pursuant to the Indenture dated as of [ ] (the
"Indenture"), between the Issuer and the Indenture Trustee, (capitalized terms
used herein and not defined herein shall have the meanings assigned to such
terms in Appendix A hereto, which also contains rules of usage and
construction that shall be applicable herein); and
WHEREAS the Issuer has entered into certain agreements in connection
with the issuance of the Notes, including the Basic Documents; and
WHEREAS, pursuant to the Basic Documents, the Issuer and the Eligible
Lender Trustee are required to perform certain duties in connection with the
Notes and the Collateral therefor pledged pursuant to the Indenture; and
WHEREAS the Issuer and the Eligible Lender Trustee desire to have the
Administrator perform certain of the duties of the Issuer and the Eligible
Lender Trustee referred to in the preceding clause, and to provide such
additional services consistent with the terms of this Agreement and the Basic
Documents as the Issuer and the Eligible Lender Trustee may from time to time
request; and
WHEREAS the Administrator has the capacity to provide the services
required hereby and is willing to perform such services for the Issuer and the
Eligible Lender Trustee on the terms set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and other good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties agree as follows:
1. Representations of the Administrator. The Administrator makes the
following representations on which the Issuer, the Eligible Lender Trustee and
any Swap Counterparties are deemed to have relied. The representations speak
as of the execution and delivery of this Agreement and as of the Closing Date
in the case of the Initial Financed Student Loans, as of the applicable
Transfer Date in the case of the Prefunded Loans, Serial Loans and the New
Loans, as of the relevant date of assignment in the case of any Qualified
Substitute Student Loan, as of the date of origination in the case of any
Consolidation Loan originated by the Trust during the Revolving Period, and as
of the applicable Add-on Consolidation Loan Funding Date in the case of any
Consolidation Loan the principal balance of which is increased by the
principal balance of any related Add-on Consolidation Loan, but shall survive
the sale of the Financed Student Loans to the Eligible Lender Trustee on
behalf of the Issuer and the pledge thereof to the Indenture Trustee pursuant
to the Indenture.
(a) Organization and Good Standing. The Administrator is duly
organized and validly existing as a corporation in good standing under the
laws of the State of [ ], with the power and authority to own its properties
and to conduct its business as such properties are currently owned and such
business is currently conducted.
(b) Power and Authority of the Administrator. The Administrator has
the corporate power and authority to execute and deliver this Agreement and to
carry out its terms, and the execution, delivery and performance of this
Agreement have been duly authorized by the Administrator by all necessary
corporate action.
(c) Binding Obligation. This Agreement constitutes a legal, valid and
binding obligation of the Administrator, enforceable in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization and
similar laws relating to creditors' rights generally and subject to general
principles of equity.
(d) No Violation. The consummation of the transactions contemplated
by this Agreement and the fulfillment of the terms hereof or thereof do not
conflict with, result in any breach of any of the terms and provisions of, nor
constitute (with or without notice or lapse of time or both) a default under,
the certificate of incorporation or by-laws of the Administrator, or any
indenture, agreement or other instrument to which the Administrator is a party
or by which it shall be bound; nor result in the creation or imposition of any
Lien upon any of its properties pursuant to the terms of any such indenture,
agreement or other instrument; nor violate any law or, to the knowledge of the
Administrator, any order, rule or regulation applicable to the Administrator
of any court or of any federal or State regulatory body, administrative agency
or other governmental instrumentality having jurisdiction over the
Administrator or its properties. The consummation by the Administrator of the
transactions contemplated by this Agreement will not result in the loss of any
Guarantee Payments by the Trust or any reinsurance payments with respect to
any Financed Student Loan.
(e) No Proceedings. There are no proceedings or investigations
pending against the Administrator or, to its best knowledge, threatened
against the Administrator, before any court, regulatory body, administrative
agency or other governmental instrumentality having jurisdiction over the
Administrator or its properties: (i) asserting the invalidity of this
Agreement, the Indenture or any of the other Basic Documents or the Notes,
seeking to prevent the issuance of the Notes or the consummation of any of the
transactions contemplated by this Agreement, the Indenture or any of the other
Basic Documents, (ii) seeking any determination or ruling that could
reasonably be expected to have a material and adverse effect on the
performance by the Administrator of its obligations under, or the validity or
enforceability of, this Agreement, the Indenture, any of the other Basic
Documents or the Notes or (iii) seeking to affect adversely the federal or
State income tax attributes of the Issuer or the Notes.
(f) All Consents. All authorizations, consents, licenses, orders or
approvals of or registrations or declarations with any court, regulatory body,
administrative agency or other government instrumentality required to be
obtained, effected or given by the Administrator in connection with the
execution and delivery by the Administrator of this Agreement and the
performance by the Administrator of the transactions contemplated by this
Agreement have in each case been duly obtained, effected or given and are in
full force and effect.
2. Duties of the Administrator.
(a) Duties with Respect to the Basic Documents. The Administrator
shall perform all its duties as Administrator and the duties of the Issuer
under the Basic Documents. In addition, the Administrator shall consult with
the Eligible Lender Trustee as the Administrator deems appropriate regarding
the duties of the Issuer under the Basic Documents. The Administrator shall
monitor the performance of the Issuer and shall advise the Eligible Lender
Trustee when action is necessary to comply with the Issuer's duties under the
Basic Documents. The Administrator shall prepare for execution by the Issuer
or shall cause the preparation by other appropriate Persons of all such
documents, reports, filings, instruments, certificates and opinions as it
shall be the duty of the Issuer to prepare, file or deliver pursuant to the
Basic Documents. In furtherance of the foregoing, the Administrator shall take
all appropriate action that is the duty of the Issuer to take pursuant to the
Indenture, including such of the foregoing as are required with respect to the
following matters (references below in this subsection (a) being to sections
of the Indenture):
(i) the duty to cause the Note Registrar to keep the Note
Register and to give the Indenture Trustee prompt notice of any
appointment of a new Note Registrar and the location, or change in
location, of the Note Register (Section 2.04);
(ii) the fixing or causing to be fixed of any specified record
date and the timely notification of the Indenture Trustee and Noteholders
with respect to special payment dates, if any (Section 2.07(c));
(iii) the preparation of or obtaining of the documents and
instruments required for authentication of the Notes and delivery of the
same to the Indenture Trustee (Section 2.02);
(iv) the preparation, obtaining or filing of the instruments,
opinions and certificates and other documents required for the release of
collateral (Section 2.09);
(v) the preparation, obtaining or filing of the instruments,
opinions and certificates and other documents required for a transfer of
the Subordinate Notes (Section 2.04);
(vi) the duty to cause the Note Registrar to maintain on behalf
of the Issuer an office in the [ ], for registration of transfer or
exchange of the Notes (Section 3.02);
(vii) the duty to cause newly appointed Paying Agents, if any,
to deliver to the Indenture Trustee the instrument specified in the
Indenture regarding funds held in trust (Section 3.03);
(viii) the direction to the Paying Agents to deposit moneys with
the Indenture Trustee (Section 3.03);
(ix) the obtaining and preservation of the Issuer's
qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of the Indenture, the Notes, the Collateral and each other
instrument and agreement included in the Indenture Trust Estate (Section
3.04);
(x) the preparation of all supplements, amendments, financing
statements, continuation statements, instruments of further assurance and
other instruments, in accordance with Section 3.05 of the Indenture,
necessary to protect the Indenture Trust Estate (Section 3.05);
(xi) the delivery by the Issuer of the Opinion of Counsel on the
Closing Date and the annual delivery of Opinions of Counsel, in
accordance with Section 3.06 of the Indenture, as to the Indenture Trust
Estate, and the annual delivery of the Officers' Certificate of the
Issuer and certain other statements, in accordance with Section 3.09 of
the Indenture, as to compliance with the Indenture (Sections 3.06 and
3.09);
(xii) the identification to the Indenture Trustee in an
Officers' Certificate of the Issuer of a Person with whom the Issuer has
contracted to perform its duties under the Indenture (Section 3.07(b));
(xiii) the notification of the Indenture Trustee, the Rating
Agencies and each Swap Counterparty, if any, of any Servicer Default
pursuant to the Servicing Agreement and, if such Servicer Default arises
from the failure of the Servicer to perform any of its duties under the
Servicing Agreement, the taking of all reasonable steps available to
remedy such failure (Section 3.07(d));
(xiv) the preparation and obtaining of documents and instruments
required for the release of the Issuer from its obligations under the
Indenture (Section 3.10);
(xv) the prompt delivery of notice to the Indenture Trustee, the
Rating Agencies and any Swap Counterparties of each Event of Default, any
Default under Section 5.01(iii) of the Indenture and each default by the
Servicer under the Servicing Agreement or by the Seller under the Loan
Sale Agreement (Section 3.18);
(xvi) the monitoring of the Issuer's obligations as to the
satisfaction and discharge of the Indenture and the preparation of an
Officers' Certificate of the Issuer and the obtaining of the Opinion of
Counsel and the Independent Certificate relating thereto (Section 4.01);
(xvii) the compliance with any written directive of the
Indenture Trustee with respect to the sale of the Indenture Trust Estate
in a commercially reasonable manner if an Event of Default shall have
occurred and be continuing (Section 5.04);
(xviii) the preparation of any written instruments required to
confirm more fully the authority of any co-trustee or separate trustee
and any written instruments necessary in connection with the resignation
or removal of any co-trustee or separate trustee (Sections 6.08 and 6.10);
(xix) the furnishing of the Indenture Trustee with the names and
addresses of Noteholders during any period when the Indenture Trustee is
not the Note Registrar (Section 7.01);
(xx) the preparation and, after execution by the Issuer, the
filing with the Commission, any applicable State agencies and the
Indenture Trustee of documents required to be filed on a periodic basis
with, and summaries thereof as may be required by rules and regulations
prescribed by, the Commission and any applicable State agencies and the
transmission of such summaries to the Noteholders (Section 7.03);
(xxi) the opening of one or more accounts in the Issuer's name,
the preparation of Issuer Orders, Officers' Certificates of the Issuer
and Opinions of Counsel and all other actions necessary with respect to
investment and reinvestment of funds in the Trust Accounts (Sections 8.02
and 8.03);
(xxii) the preparation of an Issuer Request and Officers'
Certificate of the Issuer and the obtaining of an Opinion of Counsel and
Independent Certificates, if necessary, for the release of the Indenture
Trust Estate (Sections 8.04 and 8.05);
(xxiii) the preparation of Issuer Orders and the obtaining of
Opinions of Counsel with respect to the execution of supplemental
indentures and the mailing to the Noteholders, each Rating Agency and any
Swap Counterparties of notices with respect to such supplemental
indentures (Sections 9.01, 9.02 and 9.03);
(xxiv) the preparation of or obtaining of the documents and
instruments required for the execution and authentication of new Notes
conforming to any supplemental indenture and the delivery of the same to
the Eligible Lender Trustee and the Indenture Trustee, respectively
(Section 9.06);
(xxv) the notification of Noteholders and any Swap
Counterparties of redemption of the Notes or the duty to cause the
Indenture Trustee to provide such notification (Section 10.02);
(xxvi) the preparation of all Officers' Certificates of the
Issuer, Opinions of Counsel and Independent Certificates with respect to
any requests by the Issuer to the Indenture Trustee to take any action
under the Indenture (Section 11.01(a));
(xxvii) the preparation and delivery of Officers' Certificates
of the Issuer and the obtaining of Independent Certificates, if
necessary, for the release of property from the lien of the Indenture
(Section 11.01(b));
(xxviii) the preparation and timely delivery to Noteholders and
the Indenture Trustee of any agreements with respect to alternate payment
and notice provisions (Section 11.06);
(xxix) the recording of the Indenture, if applicable (Section
11.15);
(xxx) the duty to obtain a new servicer as Successor Servicer
and to enter into an agreement with such Successor Servicer (Section
3.07(e));
(xxxi) the notification of the termination of the Servicer and
the appointment of a Successor Servicer (Section 3.07(f));
(xxxii) the duty to cause the Servicer to comply with the
Servicing Agreement (Section 3.14); and
(xxxiii) the delivery of all documents and opinions to be
provided by the Issuer under Part 3 of any Swap Agreements, performing
all obligations of the Issuer under Part 5(b), 5(i) and Part 5(o) of any
Swap Agreements, and providing all notices and consents required by the
Issuer under any Swap Agreements.
The Administrator shall provide to the Eligible Lender Trustee: (i) a
list of jurisdictions in which the Issuer is required to be licensed and (ii)
any other information necessary for the Eligible Lender Trustee to fulfill its
obligations under Section 7.08 of the Trust Agreement.
(b) Duties With Respect To The Issuer. (i) In addition to the duties
of the Administrator set forth above and in the other Basic Documents, the
Administrator shall perform such calculations and shall prepare for execution
by the Issuer or the Eligible Lender Trustee or shall cause the preparation by
other appropriate Persons of all such documents, reports, filings,
instruments, certificates and opinions as it shall be the duty of the Issuer
or the Eligible Lender Trustee to prepare, file or deliver pursuant to the
Basic Documents, and at the request of the Eligible Lender Trustee shall take
all appropriate action that it is the duty of the Issuer to take pursuant to
the Basic Documents. In furtherance thereof, the Eligible Lender Trustee
shall, on behalf of itself and of the Issuer, execute and deliver to the
Administrator and to each successor Administrator appointed pursuant to the
terms hereof, one or more powers of attorney substantially in the form of
Exhibit A hereto, appointing the Administrator the attorney-in-fact of the
Eligible Lender Trustee and the Issuer for the purpose of executing on behalf
of the Eligible Lender Trustee and the Issuer all such documents, reports,
filings, instruments, certificates and opinions. Subject to Section 9 of this
Agreement, and in accordance with the directions of the Eligible Lender
Trustee, the Administrator shall administer, perform or supervise the
performance of such other activities in connection with the Collateral
(including the Basic Documents) as are not covered by any of the foregoing
provisions and as are expressly requested by the Eligible Lender Trustee and
are reasonably within the capability of the Administrator.
(ii) Notwithstanding anything in this Agreement or the Basic
Documents to the contrary, the Administrator shall deliver to the
Eligible Lender Trustee, the Indenture Trustee, the Rating Agencies and
(if the Seller is not the Administrator) the Seller, an Officers'
Certificate of the Administrator containing all the information
necessary:
(A) to pay the Department any Consolidation Fees due and
payable to the Department, to the extent such Consolidation Fees
are not being deducted by the Department out of Special Allowance
Payments or Interest Subsidy Payments, which Officers' Certificate
shall be delivered on the date that is three Business Days prior
to the date such fees are to be remitted to the Department;
(B) during the Revolving Period to pay the Seller, pursuant
to Section 2.02 of the Loan Sale Agreement, on each Transfer Date,
the Loan Purchase Amount (or if the Parity Date has occurred, the
Purchase Collateral Balance) for Prefunded Loans, New Loans or
Serial Loans purchased by the Eligible Lender Trustee on behalf of
the Issuer on such date and, on each Transfer Date after the end
of the Revolving Period, the Purchase Collateral Balance for
Serial Loans so purchased on such date (but, only to the extent
the Purchase Collateral Balance has not been satisfied by the
exchange of Serial Loans for Exchanged Student Loans), which
Officers' Certificate, in each case, shall be delivered on the
Business Day preceding such Transfer Date;
(C) to pay the Servicer the Servicing Fee due on each
Monthly Payment Date pursuant to Section 2(d)(iv)(A), 2(d)(v)(A)
and 2(e)(iv)(A) and any Servicing Fee Shortfall due on each
Quarterly Payment Date pursuant to Section 2(e)(ii)(b)(v), which
Officers' Certificate shall be delivered on the each Determination
Date;
(D) to make all the distributions required by Sections
2(d), 2(e), 2(f) and 2(j), for the Monthly Collection Period or
Collection Period, as the case may be, preceding the date of such
Officers' Certificate, which Officers' Certificate shall be
delivered on each Determination Date.
In addition, prior to each Determination Date immediately preceding a
Quarterly Payment Date, the Administrator shall determine, in compliance with
its obligation to prepare an Officers' Certificate on such Determination Date
pursuant to this Section, the Class A-1 Note Rate, the Class A-2 Note Rate and
the Subordinate Note Rate that will be applicable to the Quarterly Payment
Date following such Determination Date. In connection therewith, the
Administrator shall calculate Three-Month LIBOR, the Class A-1 Note Rate, the
Class A-2 Note Rate and the Subordinate Note Rate in accordance with the
respective definitions thereof.
(iii) [Reserved.]
(iv) Notwithstanding anything in this Agreement or the Basic
Documents to the contrary, the Administrator shall be responsible for
performance of the duties of the Eligible Lender Trustee set forth in
Section 5.02 of the Trust Agreement with respect to, among other things,
any tax information or accounting report required to be distributed to
Note Owners.
(v) [Reserved.]
(vi) The Administrator shall perform the duties of the
Administrator specified in Sections 10.02 and 10.03 of the Trust
Agreement required to be performed in connection with the resignation or
removal of the Eligible Lender Trustee and the appointment of a successor
Eligible Lender Trustee, and any other duties expressly required to be
performed by the Administrator under the Trust Agreement and the other
Basic Documents, including those under Sections 6.07 and 6.08 of the
Indenture and those under Section 6.07 of the Trust Agreement.
(vii) As described in Article IX of the Trust Agreement, notice
of any termination of the Trust shall be given by the Administrator to
the Eligible Lender Trustee, the Indenture Trustee and any Swap
Counterparties as soon as practicable after the Administrator has
received notice thereof.
(viii) In carrying out the foregoing duties or any of its other
obligations under this Agreement, the Administrator may enter into
transactions with or otherwise deal with any of its Affiliates; provided,
however, that the terms of any such transactions or dealings shall be in
accordance with any directions received from the Issuer and shall be, in
the Administrator's opinion, no less favorable to the Issuer or the
Noteholders than would be available from unaffiliated parties.
(c) Establishment and Maintenance of Trust Accounts.
(i) The Administrator, for the benefit of the Issuer, shall
establish and maintain in at the Indenture Trustee an Eligible Deposit
Account in the name of the Trust (the "Collection Account"). The
Collection Account will initially be established as a segregated trust
account in the name of the Indenture Trustee with the corporate trust
department of [ ].
(ii) The Administrator shall establish and maintain at the
Indenture Trustee an Eligible Deposit Account in the name of the Trust
(the "Reserve Account"). The Reserve Account will initially be
established as a segregated trust account in the name of the Indenture
Trustee with the corporate trust department of [ ].
(iii) The Administrator, for the benefit of the Noteholders and
any Swap Counterparties, shall establish and maintain at the Indenture
Trustee an Eligible Deposit Account in the name of the Trust (the
"Collateral Reinvestment Account"). The Collateral Reinvestment Account
will initially be established as a segregated trust account in the name
of the Indenture Trustee with the corporate trust department of [ ].
(iv) The Administrator, for the benefit of the Noteholders, if
there are funds to be deposited in a prefunding account, shall establish
and maintain at the Indenture Trustee an Eligible Deposit Account in the
name of the Trust (the "Prefunding Account"), bearing a designation
clearly indicating that the funds deposited therein are held for the
benefit of the Indenture Trustee, on behalf of the Noteholders. The
Prefunding Account will initially be established as a segregated trust
account in the name of the Indenture Trustee with [ ].
(v) Funds on deposit in the Collection Account, the Reserve
Account, the Prefunding Account and the Collateral Reinvestment Account
(collectively, the "Trust Accounts") shall be invested by the Indenture
Trustee (or any custodian or designated agent with respect to any amounts
on deposit in such accounts) in Eligible Investments pursuant to written
instructions by the Administrator; provided, however, it is understood
and agreed that the Indenture Trustee shall not be liable for any loss
arising from such investment in Eligible Investments. All such Eligible
Investments shall be held by (or by any custodian on behalf of) the
Indenture Trustee for the benefit of the Issuer; provided, however, that
on the Business Day preceding each Monthly Payment Date all interest and
other investment income (net of losses and investment expenses) on funds
on deposit therein shall be deposited into the Collection Account and
shall be deemed to constitute a portion of the Monthly Available Funds
for each Monthly Payment Date that is not a Quarterly Payment Date, and a
portion of the Available Funds for each Quarterly Payment Date. Other
than as permitted in writing by the Rating Agencies, funds on deposit in
the Trust Accounts shall be invested in Eligible Investments that will
mature so that funds sufficient to pay the Servicing Fee and the
Administration Fee (and all other amounts payable on a Quarterly Payment
Date) will be available in the Collection Account on the Business Day
preceding each Monthly Payment Date that is not a Quarterly Payment Date,
so that funds on deposit in the Prefunding Account or Collateral
Reinvestment Account that are required, in the judgment and at the
discretion of the Administrator, to make Additional Fundings during the
Revolving Period will be available for such purpose and so that the
remaining such funds will be available at the close of business on the
Business Day preceding each Quarterly Payment Date.
(vi) (A) The Indenture Trustee, on behalf of the Noteholders and
any Swap Counterparties, shall possess all right, title and interest in
all funds on deposit from time to time in the Trust Accounts and in all
proceeds thereof (including all income thereon) and all such funds,
investments, proceeds and income shall be part of the Trust Estate. The
Trust Accounts shall be under the sole dominion and control of the
Indenture Trustee for the benefit of the Noteholders and any Swap
Counterparties. If, at any time, any of the Trust Accounts ceases to be
an Eligible Deposit Account, the Indenture Trustee (or the Administrator
on its behalf) agrees, by its acceptance hereto, that it shall within 10
Business Days (or such longer period, not to exceed 30 calendar days, as
to which each Rating Agency may consent) establish a new Trust Account as
an Eligible Deposit Account and shall transfer any cash and/or any
investments to such new Trust Account. In connection with the foregoing,
the Administrator agrees that, in the event that any of the Trust
Accounts are not accounts with the Indenture Trustee, the Administrator
shall notify the Indenture Trustee and any Swap Counterparties in writing
promptly upon any of such Trust Accounts ceasing to be an Eligible
Deposit Account.
(B) With respect to the Trust Account Property, the
Indenture Trustee agrees, by its acceptance hereof, that:
(1) any Trust Account Property that is held in deposit
accounts shall be held solely in Eligible Deposit Accounts,
subject to the next to the last sentence of clause (vi)(A)
above; and each such Eligible Deposit Account shall be subject
to the exclusive custody and control of the Indenture Trustee,
and the Indenture Trustee shall have sole signature authority
with respect thereto;
(2) any Trust Account Property that constitutes Physical
Property shall be Delivered to the Indenture Trustee in
accordance with paragraph (a) of the definition of "Delivery";
(3) any Trust Account Property that is a book-entry
security held through the Federal Reserve System pursuant to
federal book-entry regulations shall be Delivered in accordance
with paragraph (b) of the definition of "Delivery"; and
(4) any Trust Account Property that is an
"uncertificated security" under Article VIII of the UCC and
that is not governed by clause (3) above shall be Delivered to
the Indenture Trustee in accordance with paragraph (c) of the
definition of "Delivery".
(C) The Administrator shall have the power, revocable for
cause or upon the occurrence and during the continuance of an
Administrator Default by the Indenture Trustee or by the Eligible
Lender Trustee with the consent of the Indenture Trustee, to
instruct the Indenture Trustee to make withdrawals and payments
from the Trust Accounts for the purpose of permitting the Servicer
or the Eligible Lender Trustee to carry out their respective
duties under the Servicing Agreement and the Trust Agreement,
permitting the Indenture Trustee to carry out its duties under the
Indenture and withdrawing any amounts deposited in error into such
accounts.
(vii) On each Determination Date, the Administrator shall
calculate all amounts required to determine the amounts to be deposited
in the Collection Account and the other Trust Accounts and the amounts to
be distributed therefrom on the related Monthly Payment Date, Quarterly
Payment Date or other dates from which amounts therein are to be
distributed.
(d) Withdrawals from the Collection Account. The Administrator shall
instruct the Indenture Trustee in writing (based, in the case of clauses (iv)
and (v) below, on the information contained in the servicer's report delivered
with respect to the applicable Determination Date pursuant to Section 3.07 of
the Servicing Agreement) to make withdrawals from amounts deposited in the
Collection Account at the following times and for the following purposes, and
the Indenture Trustee shall comply with such instructions:
(i) from time to time during the Revolving Period, insofar as
the Administrator may so instruct on any Business Day therein, to deposit
into the Collateral Reinvestment Account all collections in respect of
principal of the Financed Student Loans; provided that if the Collateral
Reinvestment Account Trigger is triggered with respect to any Monthly
Collection Period, the Administrator may only instruct the Indenture
Trustee to deposit amounts in the Collateral Reinvestment Account in
excess of the amount necessary to pay the Noteholders' Interest
Distribution Amount for the next Quarterly Payment Date provided,
further, that such amounts shall remain on deposit in the Collection
Account until such next succeeding Quarterly Payment Date;
(ii) from time to time during each Collection Period to pay the
Department any Consolidation Fees due and payable to the Department, to
the extent such Consolidation Fees are not being deducted by the
Department out of Special Allowance Payments or Interest Subsidy
Payments;
(iii) (A) on each Add-on Consolidation Loan Funding Date after
the Revolving Period, to prepay in full any Add-on Consolidation Loan
pursuant to Section 6.07 of the Trust Agreement; provided, however, that
the amount paid to prepay any Add-on Consolidation Loan on any date since
the preceding Quarterly Payment Date shall not exceed the Net Principal
Cash Flow Amount for such date minus the aggregate Purchase Collateral
Balance remitted for the purchase of Serial Loans on each Transfer Date
since the preceding Quarterly Payment Date after the Revolving Period
pursuant to Section 2(d)(iii)(B); and
(B) on each Transfer Date after the Revolving Period to pay
to the Seller, pursuant to Section 2.02 of the Loan Sale
Agreement, the aggregate Purchase Collateral Balance for Serial
Loans purchased by the Eligible Lender Trustee on behalf of the
Issuer on such date (but only to the extent such aggregate
Purchase Collateral Balance has not been satisfied by the exchange
of Serial Loans for Exchanged Student Loans); provided that the
amount paid to the Seller for the purchase of Serial Loans on such
Transfer Date plus the amount of funds remitted for the purchase
of Serial Loans on each Transfer Date since the preceding
Quarterly Payment Date on any Transfer Date after the Revolving
Period shall not exceed the Net Principal Cash Flow Amount for
such Transfer Date minus the sum of: (i) all amounts paid since
the last Quarterly Payment Date pursuant to Section 2(d)(iii)(A)
to prepay any Add-on Consolidation Loan not held by the Issuer and
(ii) all amounts which the Administrator reasonably estimates will
be required to prepay Add-on Consolidation Loans pursuant to
Section 2(d)(iii)(A) during the remainder of the Collection
Period; and provided, further, that any Purchase Premium Amounts
for Serial Loans purchased after the Revolving Period shall be
paid only out of Reserve Account Excess as set forth in Section
2(e)(ii);
(iv) on each Monthly Payment Date that is not a Quarterly
Payment Date, to make the following deposits and distributions to the
Persons specified below by 11:00 a.m. (New York time), to the extent of
Monthly Available Funds for such Monthly Payment Date in the Collection
Account, in the following order of priority:
(A) to the Servicer, the Servicing Fee with respect to the
preceding calendar month and all unpaid Servicing Fees from prior
months; and
(B) to the Administrator, from the amount of the Monthly
Available Funds remaining after the application of clause (A), the
Administration Fee with respect to the preceding calendar month
and all unpaid Administration Fees from prior months;
(v) on each Quarterly Payment Date, to make the following
deposits and distributions to the Persons or the account specified below
by 11:00 a.m. (New York time), to the extent of Available Funds for such
Quarterly Payment Date in the Collection Account, in the following order
of priority:
(A) to the Servicer, the Servicing Fee with respect to the
preceding calendar month and all unpaid Servicing Fees from prior
months;
(B) to the Administrator, from the amount of the Available
Funds remaining after the application of clause (A), the
Administration Fee with respect to the preceding calendar month
and all unpaid Administration Fees from prior months;
(C) to the Indenture Trustee for distribution pursuant to
Section 8.02(c) of the Indenture, in the following order of
priority, from the amount of the Available Funds remaining after
the application of clauses (A) and (B): (i) the Class A-1
Noteholders' Interest Distribution Amount, the Class A-2
Noteholders' Interest Distribution Amount, the Trust Swap Payment
Amounts, if any, and the remainder of any Termination Payment to
the extent that the remainder of such Termination Payment is owed
to any Swap Counterparties following a Redemption Event (as
defined in any related Swap Agreement) or the Trust is the
defaulting party (other than an Event of Default specified in
Section 5(a)(i) of any Swap Agreements), pro rata, based on the
ratio of each such amount to the total of such amounts; (ii) the
Subordinate Noteholders' Interest Distribution Amount; (iii) if
the Revolving Period has terminated, the Senior Noteholders'
Principal Distribution Amount; and (iv) if the Revolving Period
has terminated, the Subordinate Noteholders' Principal
Distribution Amount, each with respect to such Quarterly Payment
Date; and
(D) to the Reserve Account, the amount of Available Funds
remaining after the application of clauses (A) through (C).
Except in the case of amounts deposited into the Reserve Account
pursuant to clause (d)(v)(D) of this Section 2, amounts properly calculated,
reported and withdrawn from the Collection Account and properly distributed
pursuant to this Section 2(d) in accordance with the terms hereof shall be
deemed released from the Trust Estate and the security interest therein
granted to the Indenture Trustee, and the Persons to whom such amounts are
distributed shall in no event be required to refund any such distributed
amounts.
(e) Reserve Account. (i) The Seller shall deposit the Reserve Account
Initial Deposit into the Reserve Account as required by Section 2.01(b) of the
Loan Sale Agreement. The Administrator may, but is not obligated to, deposit
amounts from time to time into the Reserve Account.
(ii) With respect to any amount in the Reserve Account on any
Quarterly Payment Date (after giving effect to all deposits thereto on
such Quarterly Payment Date and to all withdrawals therefrom necessary to
make the distributions required to be made from the Available Funds on
such Quarterly Payment Date) in excess of the Specified Reserve Account
Balance for such Quarterly Payment Date (the "Reserve Account Excess"),
the Administrator shall instruct the Indenture Trustee to apply such
Reserve Account Excess as follows: (a) during the Revolving Period, for
deposit to the Collateral Reinvestment Account; provided, however, that
if such date is on or after the Parity Date, to the extent that such
funds represent payments of interest or Trust Swap Receipt Amounts with
respect to the Financed Student Loans, such funds shall be applied in the
amounts and the order of priority set forth in clauses (b)(v) through
(vii) below, and (b) at and after the termination of the Revolving
Period, to the following (in the priority indicated): (i) to pay to the
Seller any unpaid Purchase Premium Amounts for any Serial Loans purchased
by the Issuer after the end of the Revolving Period but prior to the end
of the related Collection Period; (ii) if such Quarterly Payment Date is
on or prior to the Parity Date (after application of all other amounts
paid to the Noteholders on such Quarterly Payment Date, including the
application of funds in the Collateral Reinvestment Account), to pay to
the Indenture Trustee for distribution to Noteholders pursuant to Section
8.02(d) of the Indenture an amount equal to the lesser of: (x) the
remaining amount of such excess and (y) the amount by which the aggregate
principal amount of the Notes, after giving effect to all other
distributions in respect of principal of the Notes on such Quarterly
Payment Date, exceeds the Pool Balance as of the close of business on the
last day of the related Collection Period; (iii) if such Quarterly
Payment Date is after the [ ], to pay the Indenture Trustee for
distribution to Noteholders pursuant to Section 8.02(d) of the Indenture
the remaining amount of such excess until the aggregate principal amount
of the Notes has been reduced to zero; (iv) Reserved; (v) to pay to the
Servicer, out of the remaining amount of such excess, the Servicing Fee
Shortfall and all prior unpaid Servicing Fee Shortfalls, if any; (vi) to
pay to the Seller, out of the remaining amount of such excess, any unpaid
Purchase Premium Amounts for any Serial Loans or New Loans purchased
during the Revolving Period but after the Parity Date (or at any time
during the Collection Period during which the Parity Date occurs) and
prior to the end of the related Collection Period; (vii) to any Swap
Counterparties, all Termination Payments due under any Swap Agreements to
the extent that any related Swap Counterparty is the Defaulting Party (as
such term is defined in any related Swap Agreement), the Trust is the
defaulting party under Section 5(a)(i) of any related Swap Agreement or a
Termination Event (other than an Additional Termination Event (as defined
in any Swap Agreements) in respect of a Redemption Event (as defined in
any Swap Agreements)) shall have occurred; and (viii) any remaining
amount of such excess, after application of clauses (i) through (vii)
above will be released to the Seller; provided, however, that if and to
the extent that: (A) the amount of the Servicer's unpaid repurchase
obligation pursuant to Section 3.05 of the Servicing Agreement exceeds [
] as of the last day of the preceding Collection Period (and such
Servicer has not been replaced by a Successor Servicer), or (B) the
Department fails by the last day of such preceding Collection Period to
satisfy its obligations to reimburse or replace a Federal Guarantor
pursuant to the Higher Education Act, then any Reserve Fund Excess
remaining on such Quarterly Payment Date for distribution to the Company
pursuant to the clause (vi) above shall not be so distributed and shall
be retained in the Reserve Account for application in accordance with
this Agreement. Amounts properly calculated, reported and distributed
pursuant to this Section 2(e)(ii) shall be deemed released from the Trust
Estate and the security interest therein granted to the Indenture
Trustee, and the Seller and the Company shall in no event thereafter be
required to refund any such distributed amounts.
(iii) Following the payment in full of the aggregate outstanding
principal amount of the Notes and of all other amounts owing or to be
distributed hereunder or under the Indenture to Noteholders, the Seller,
the Servicer or the Administrator and the termination of the Trust
(including any Servicing Fee Shortfall and any unpaid Servicing Fee
Shortfalls and unpaid Purchase Premium Amounts), any amount remaining on
deposit in the Reserve Account shall be distributed to the Company. The
Company shall in no event be required to refund any amounts properly
calculated, reported and distributed pursuant to this Section 2(e)(iii).
(iv) (A) In the event that the Servicing Fee for any Monthly
Payment Date exceeds the amount distributed to the Servicer pursuant to
Sections 2(d)(iv)(A) or 2(d)(v)(A) and Section 2(k)(ii)(A) on such
Monthly Payment Date, the Administrator shall instruct the Indenture
Trustee to withdraw from the Reserve Account on each Monthly Payment Date
an amount equal to such excess and to distribute such amount to the
Servicer.
(B) In the event that the Administration Fee for any
Monthly Payment Date exceeds the amount distributed to the
Administrator pursuant to Sections 2(d)(iv)(B) or 2(d)(v)(B) and
Section 2(k)(ii)(B) on such Monthly Payment Date, the
Administrator shall instruct the Indenture Trustee to withdraw
from the Reserve Account on such Monthly Payment Date an amount
equal to such excess, to the extent of funds available therein
after giving effect to paragraph (iv)(A) above, and to distribute
such amount to the Administrator.
(C) For any Quarterly Payment Date, in the event that the
Class A-1 Noteholders' Interest Distribution Amount, the Class A-2
Noteholders' Interest Distribution Amount, the Trust Swap Payment
Amounts, if any, the remainder of any Termination Payment to any
Swap Counterparties to the extent that the Trust is the defaulting
party (other than an Event of Default specified in Section 5(a)(i)
of any related Swap Agreement), the Subordinate Noteholders'
Interest Distribution Amount, the Class A Noteholders' Principal
Distribution Amount and the Subordinate Noteholders' Principal
Distribution Amount, each for such Quarterly Payment Date, exceed
the sum of the amount distributed to the Indenture Trustee for
distribution to the Noteholders and any related Swap Counterparty
pursuant to Section 2(d)(v)(C) and Section 2(k)(ii)(C) on such
Quarterly Payment Date, the Administrator shall instruct the
Indenture Trustee to withdraw from the Reserve Account on such
Quarterly Payment Date an amount equal to such excess, to the
extent of funds available therein after giving effect to
paragraphs (iv)(A) and (iv)(B) above, and to distribute such
amount as required by Section 2(d)(v)(C) on such Quarterly Payment
Date.
(f) Collateral Reinvestment Account. (i) During the Revolving Period,
to the extent no funds remain on deposit in the Prefunding Account, the
Administrator shall instruct the Indenture Trustee in writing to withdraw from
the Collateral Reinvestment Account, in each case to the extent of the funds
on deposit therein: (A) on each Transfer Date, an amount equal to the Loan
Purchase Amount for the Serial Loans and New Loans transferred to the Eligible
Lender Trustee on behalf of the Issuer on such Transfer Date and to distribute
such amount to or upon the order of the Seller upon satisfaction of the
conditions set forth in Section 2.02 of the Loan Sale Agreement with respect
to such transfer, (B) when and as requested by the Eligible Lender Trustee, in
order to facilitate its origination of Consolidation Loans, to transfer to the
order of the Eligible Lender Trustee an amount, sufficient to prepay in full
any Student Loan that is to be consolidated through such origination with one
or more Financed Student Loans, (C) when and as requested by the Eligible
Lender Trustee, in order to facilitate its funding of the addition of the
principal balance of any Add-on Consolidation Loan to the principal balance of
a Consolidation Loan, an amount sufficient to prepay in full such Add-on
Consolidation Loan, (D) on each Determination Date, to deposit into the
Collection Account an amount equal to the Capitalized Interest Amount for the
Student Loan Rate Accrual Period with respect to the related Monthly Payment
Date and (E) on any Determination Date and in such amounts as the
Administrator may direct, for deposit to the Collection Account for the
purposes of increasing the Monthly Available Funds or the Available Funds, as
the case may be.
(ii) On the Quarterly Payment Date on or next occurring after
the termination of the Revolving Period, the Administrator shall instruct
the Indenture Trustee to withdraw from the Collateral Reinvestment
Account on such Quarterly Payment Date an amount equal to the entire
remaining amount on deposit in such account and to distribute such amount
pursuant to Section 8.02(e) of the Indenture.
(g) Statements To Noteholders. (i) On each Determination Date
preceding a Quarterly Payment Date, the Administrator shall provide to the
Indenture Trustee and any Swap Counterparties (with a copy to the Rating
Agencies) for the Indenture Trustee to forward on such succeeding Quarterly
Payment Date to each Noteholder of record a statement substantially in the
form of Exhibit B setting forth at least the following information as to the
Notes:
(A) the amount of such distribution allocable to
principal of the Notes, the amount thereof distributable as
principal of the Class A-1 Notes, the Class A-2 Notes and the
Subordinate Notes, and the amount thereof attributable to the
Principal Distribution Amount and the amount thereof
attributable to Reserve Account Excess;
(B) the amount of the distribution allocable on such
Quarterly Payment Date to interest on the Class A-1 Notes;
(C) the amount of the distribution allocable on such
Quarterly Payment Date to interest on the Class A-2 Notes;
(D) the amount of the distribution allocable on such
Quarterly Payment Date to interest on the Subordinate Notes;
(E) [Reserved];
(F) the Pool Balance as of the close of business on the
last day of the preceding Collection Period, after giving
effect to payments allocated to principal reported under
clause (A) above;
(G) the aggregate outstanding principal amount of the
Class A-1 Notes, the Class A-2 Notes, the Subordinate Notes,
the Class A-1 Note Pool Factor, the Class A-2 Note Pool
Factor and the Subordinate Note Pool Factor as of such
Quarterly Payment Date, after giving effect to payments
allocated to principal reported under clause (A) above;
(H) the Note Rate applicable with respect to each
distribution referred to in clauses (B), (C) and (D) above;
(I) the amount of the Servicing Fee paid to the Servicer
on such Quarterly Payment Date and on each Monthly Payment
Date following the immediately preceding Quarterly Payment
Date including a breakdown of the components of the Servicing
Fee attributable to each of the items specified in clauses
II(i) through (ix) of Section 3.06 of the Servicing Agreement
and the amount of any Servicing Fee Shortfall for such
Quarterly Payment Date and for each Monthly Payment Date
following the immediately preceding Quarterly Payment Date;
(J) the amount of the Administration Fee paid to the
Administrator on such Quarterly Payment Date and on each
Monthly Payment Date following the immediately preceding
Quarterly Payment Date;
(K) the Trust Swap Payment Amount paid to any Swap
Counterparties on such Quarterly Payment Date, the amount of
any Net Trust Swap Payment Carryover Shortfall for such
Quarterly Payment Date, the Trust Swap Receipt Amounts, if
any paid to the Trust on such Quarterly Payment Date and the
amount of any Net Trust Swap Receipt Carryover Shortfall for
such Quarterly Payment Date;
(L) [Reserved];
(M) the amount of the aggregate Realized Losses, if any,
for such Collection Period and the balance of Financed
Student Loans that are delinquent in each delinquency period
as of the end of such Collection Period;
(N) the balance of the Reserve Account on such Quarterly
Payment Date, after giving effect to changes therein on such
Quarterly Payment Date and indicating whether on such
Quarterly Payment Date or any Monthly Payment Date since the
preceding Quarterly Payment Date any withdrawal was made
therefrom pursuant to Section 2(e)(iv), the amount of each
such withdrawal and the purpose(s) pursuant to Section
2(e)(iv) for each such withdrawal;
(O) For Quarterly Payment Dates during the Revolving
Period, the amount on deposit in the Prefunding Account and
indicating whether on such Quarterly Payment Date or any
Monthly Payment Date since the preceding Quarterly Payment
Date any withdrawal was made therefrom pursuant to Section
2(k)(ii), the amount of each such withdrawal and the purposes
pursuant to Section 2(k)(ii) for each such withdrawal;
(P) for Quarterly Payment Dates during the Revolving
Period, the amount deposited into the Collateral Reinvestment
Account during the related Collection Period and on the
immediately preceding Quarterly Payment Date, and the amount
on deposit therein after giving effect to changes therein on
such Quarterly Payment Date;
(Q) for the Quarterly Payment Date on or immediately
following the end of the Revolving Period: (1) the amount
remaining on deposit in the Collateral Reinvestment Account
that has not been used to make Additional Fundings and (2)
the amount remaining in the Prefunding Account;
(R) (i) the principal balance and number of
Consolidation Loans originated on behalf of the Issuer during
the related Collection Period, (ii) the principal balance and
number of Add-on Consolidation Loans the principal balances
of which have been added to the Trust during the related
Collection Period and (iii) the amount withdrawn from the
Collateral Reinvestment Account to prepay Student Loans not
held by the Issuer that were consolidated through such
origination (or addition, in the case of Add-on Consolidation
Loans) with one or more Financed Student Loans during such
Collection Period;
(S) the principal balance and number of Serial Loans
conveyed to the Issuer during the related Collection Period,
the aggregate Loan Purchase Amounts thereof and the portion
thereof attributable to Purchase Premium Amounts;
(T) for Quarterly Payment Dates during the Revolving
Period, the principal balance and number of New Loans
conveyed to the Issuer during the related Collection Period,
the aggregate Loan Purchase Amounts thereof and the portion
thereof attributable to Purchase Premium Amounts; and
(U) the number and principal balance of Financed Student
Loans, as of the end of the related Collection Period, that
are In-School, Grace, Repayment, Deferral, Forbearance or
Consolidation Loans as of the end of the related Collection
Period, and a breakdown by number and principal balance of
Financed Student Loans, by school type, interest rate and
loan program.
Each amount set forth pursuant to clauses (A), (B), (C), (D) and (E)
above shall be expressed as a dollar amount per [ ] of original principal
amount of a Note. A copy of the statements referred to above may be obtained
by any Note Owner by a written request to the Indenture Trustee addressed to
the Corporate Trust Office.
(h) Non-Ministerial Matters. With respect to matters that in the
reasonable judgment of the Administrator are non-ministerial, the
Administrator shall not take any action unless within a reasonable time before
the taking of such action, the Administrator shall have notified the Eligible
Lender Trustee and any Swap Counterparties of the proposed action and the
Eligible Lender Trustee shall have consented to it. For the purpose of the
preceding sentence, "non-ministerial matters" shall include, without
limitation:
(i) the amendment of or any supplement to the Indenture;
(ii) the initiation of any claim or lawsuit by the Issuer and
the compromise of any action, claim or lawsuit brought by or against the
Issuer (other than in connection with the collection of the Financed
Student Loans);
(iii) the amendment, change or modification of the Basic
Documents;
(iv) the appointment of successor Note Registrars, successor
Paying Agents and successor Indenture Trustees pursuant to the Indenture
or the appointment of successor Administrators or Successor Servicers, or
the consent to the assignment by the Note Registrar, Paying Agent or
Indenture Trustee of its obligations under the Indenture; and
(v) the removal of the Indenture Trustee.
(i) Incentive Loans and Incentive Interest Deposits. The
Administrator may terminate or change the terms of any Incentive Program with
respect to a Financed Student Loan in accordance with the terms of such
program, provided such termination or change is not prohibited by the Higher
Education Act, upon notice to the Eligible Lender Trustee and the Indenture
Trustee. Until the effective date of any termination, the Administrator shall
be required to deposit into the Collection Account the Incentive Interest
Deposit with respect to such Incentive Financed Student Loan as provided
below. In the event that the Administrator fails to make such deposit, the
terms of such Incentive Program shall be such that the Borrower shall be
obligated to make such payment and such Incentive Program shall terminate as
to the related loan.
The Administrator shall deposit or cause to be deposited into the
Collection Account no later than the Determination Date succeeding each
Monthly Collection Period and Collection Period the aggregate Incentive
Interest Deposits with respect to Incentive Financed Student Loans in the
Trust as of the last day of such Monthly Collection Period and Collection
Period. Such deposits shall be considered deposits in respect of interest on
such Incentive Financed Student Loans for all purposes of the Basic Documents
and shall be deemed to have been deposited into the Collection Account for all
such purposes as of such last date of such Monthly Collection Period.
(j) The Administrator may, from time to time, direct the Trust to
enter into Swap Agreements or amendments to Swap Agreements substantially in
the form of Exhibit C provided that: (i) the Rating Agency Swap Condition is
satisfied with respect to such Swap Agreement and (ii) after entering into
such Swap Agreement or amendment to such Swap Agreement, the notional amount
of all of Swap Agreements to which the Trust is a party is less than or equal
to the outstanding principal balance of the Notes.
(k) Prefunding Account.
(i) On the Closing Date, the Seller shall deposit the Prefunding
Account Closing Date Deposit into the Prefunding Account as required by
Section 2.01(b) of the Loan Sale Agreement.
(ii) (A) In the event that the Servicing Fee for any Monthly
Payment Date exceeds the amount distributed to the Servicer pursuant to
Sections 2(d)(iv)(A) or 2(d)(v)(A) on such Monthly Payment Date, the
Administrator shall instruct the Indenture Trustee in writing to withdraw
from the Prefunding Account on each Monthly Payment Date an amount equal
to such excess and to distribute such amount to the Servicer.
(B) In the event that the Administration Fee for any
Monthly Payment Date exceeds the amount distributed to the
Administrator pursuant to Sections 2(d)(iv)(B) or 2(d)(v)(B) on
such Monthly Payment Date, the Administrator shall instruct the
Indenture Trustee in writing to withdraw from the Prefunding
Account on such Monthly Payment Date an amount equal to such
excess, to the extent of funds available therein after giving
effect to paragraph (iv)(A) above, and to distribute such amount
to the Administrator.
(C) For any Quarterly Payment Date, in the event that
the Class A-1 Noteholders' Interest Distribution Amount, the
Class A-2 Noteholders' Interest Distribution Amount, the Trust
Swap Payment Amounts, if any, the remainder of any Termination
Payment to any Swap Counterparties to the extent that the
remainder of such Termination Payment is owed to any Swap
Counterparties following a Redemption Event (as defined in any
related Swap Agreement) or the Trust is the defaulting party
(other than an Event of Default specified in Section 5(a)(i) of
any related Swap Agreement) and the Subordinate Noteholders'
Interest Distribution Amount, each for such Quarterly Payment
Date, exceed the sum of the amount distributed to the Indenture
Trustee for distribution to the Noteholders and any related Swap
Counterparty pursuant to Section 2(d)(v)(C) on such Quarterly
Payment Date, the Administrator shall instruct the Indenture
Trustee in writing to withdraw from the Prefunding Account on
such Quarterly Payment Date an amount equal to such excess, to
the extent of funds available therein after giving effect to
paragraphs (A) and (B) above, and to distribute such amount as
required by Section 2(d)(v)(C) on such Quarterly Payment Date.
(iii) During the Revolving Period, the Administrator shall
instruct the Indenture Trustee in writing to withdraw from the Prefunding
Account, in each case to the extent of the funds on deposit therein: (A)
on each Transfer Date, an amount equal to the Loan Purchase Amount for
the Serial Loans and New Loans transferred to the Eligible Lender Trustee
on behalf of the Issuer on such Transfer Date and to distribute such
amount to or upon the order of the Seller upon satisfaction of the
conditions set forth in Section 2.02 of the Loan Sale Agreement with
respect to such transfer, (B) when and as requested by the Eligible
Lender Trustee, in order to facilitate its origination of Consolidation
Loans, to transfer to the order of the Eligible Lender Trustee an amount,
sufficient to prepay in full any Student Loan that is to be consolidated
through such origination with one or more Financed Student Loans, (C)
when and as requested by the Eligible Lender Trustee, in order to
facilitate its funding of the addition of the principal balance of any
Add-on Consolidation Loan to the principal balance of a Consolidation
Loan, an amount sufficient to prepay in full such Add-on Consolidation
Loan and (D) on each Determination Date, to deposit into the Collection
Account an amount equal to the Capitalized Interest Amount for the
Student Loan Rate Accrual Period with respect to the related Monthly
Payment Date.
(iv) On the Determination Date relating to the Quarterly Payment
Date on or next occurring after the termination of the Revolving Period,
the Administrator shall instruct the Indenture Trustee to withdraw from
the Prefunding Account on such Determination Date an amount equal to the
entire remaining amount on deposit in such account and to deposit such
amount in the Collection Account.
3. Annual Statement As To Compliance. (a) The Administrator shall
deliver to the Seller, the Eligible Lender Trustee, the Indenture Trustee and
any Swap Counterparties, on or before December 31 of each year beginning [ ],
an Officers' Certificate of the Administrator dated as of September 30 of such
year, stating that: (i) a review of the activities of the Administrator during
the preceding 12-month period (or, in the case of the first such certificate,
during the period from the Closing Date to [ ]) and of its performance under
this Agreement has been made under such officers' supervision and (ii) to the
best of such officers' knowledge, based on such review, the Administrator has
fulfilled all its obligations under this Agreement throughout such year or, if
there has been a default in the fulfillment of any such obligation, specifying
each such default known to such officers and the nature and status thereof.
The Indenture Trustee shall send a copy of each such Officer's Certificate and
each report referred to in Section 4 to the Rating Agencies. A copy of such
Officers' Certificate and each report referred to in Section 4 may be obtained
by any Noteholder or Note Owner by a request in writing to the Indenture
Trustee addressed to its Corporate Trust Office, together with evidence
satisfactory to the Indenture Trustee that such Person is one of the foregoing
parties.
(b) The Administrator shall deliver to the Eligible Lender Trustee,
the Indenture Trustee, the Servicer, the Rating Agencies and any Swap
Counterparties, promptly after having obtained knowledge thereof, but in no
event later than two Business Days thereafter, written notice in an Officers'
Certificate of the Administrator of any event which with the giving of notice
or lapse of time, or both, would become an Administrator Default under Section
12.
4. Annual Independent Certified Public Accountants' Report. The
Administrator shall cause a firm of independent certified public accountants,
which may also render other services to the Administrator, to deliver to the
Seller, the Eligible Lender Trustee, the Indenture Trustee and any Swap
Counterparties on or before [December 31] of each year beginning [ ], a report
addressed to the Administrator and to the Seller, the Eligible Lender Trustee,
the Indenture Trustee and any Swap Counterparties (which report may be
combined with other reports required to be delivered by such accountants to
the Administrator, the Eligible Lender Trustee and the Indenture Trustee under
the Basic Documents), to the effect that such firm has examined certain
documents and records relating to the administration of the Financed Student
Loans and of the Trust during the preceding fiscal year ended [September 30]
(or, in the case of the first such report, during the period from the Closing
Date to [September 30]) and that, on the basis of the accounting and auditing
procedures considered appropriate under the circumstances, such firm is of the
opinion that the administration of the Trust was conducted in compliance with
the terms of this Agreement, except for: (i) such exceptions as such firm
shall believe to be immaterial and (ii) such other exceptions as shall be set
forth in such report. The Indenture Trustee shall send a copy of each such
report to the Rating Agencies.
Such report will also indicate that the firm is independent of the
Administrator within the meaning of the Code of Professional Ethics of the
American Institute of Certified Public Accountants.
5. Administrator Expenses. The Administrator shall be required to pay
all expenses incurred by it in connection with its activities hereunder,
including fees and disbursements of independent accountants, taxes imposed on
the Administrator and expenses incurred in connection with distributions and
reports to the Noteholders and any Swap Counterparties.
6. Records. The Administrator shall maintain appropriate books of
account and records relating to services performed hereunder, which books of
account and records shall be accessible for inspection by the Issuer at any
time during normal business hours.
7. Compensation. As compensation for the performance of the
Administrator's obligations under this Agreement and as reimbursement for its
expenses related thereto, the Administrator shall be entitled to the
Administration Fee payable monthly in arrears on each Monthly Payment Date
which shall be solely an obligation of the Issuer and payable solely as
provided herein.
8. Additional Information to Be Furnished. The Administrator shall
furnish to the Issuer and any Swap Counterparties from time to time such
additional information regarding the Collateral as the Issuer or any Swap
Counterparties shall reasonably request. Following the time, if any, that any
Swap Counterparties' counterparty ratings fall below "A3" , "A-" or their
equivalent, upon request of a Rating Agency, the Administrator shall furnish
to such Rating Agency, cashflow projections for the Trust.
9. Independence of the Administrator. For all purposes of this
Agreement, the Administrator shall be an independent contractor and shall not
be subject to the supervision of the Issuer or the Eligible Lender Trustee
with respect to the manner in which it accomplishes the performance of its
obligations hereunder. Unless expressly authorized by the Issuer, the
Administrator shall have no authority to act for or represent the Issuer or
the Eligible Lender Trustee in any way and shall not otherwise be deemed an
agent of the Issuer or the Eligible Lender Trustee.
10. No Joint Venture. Nothing contained in this Agreement: (i) shall
constitute the Administrator and either the Issuer or the Eligible Lender
Trustee as members of any partnership, joint venture, association, syndicate,
unincorporated business or other separate entity, (ii) shall be construed to
impose any liability as such on any of them or (iii) shall be deemed to confer
on any of them any express, implied or apparent authority to incur any
obligation or liability on behalf of the others.
11. Other Activities of Administrator. Nothing herein shall prevent
the Administrator or its Affiliates from engaging in other businesses or, in
its sole discretion, from acting in a similar capacity as an administrator for
any other Person even though such Person may engage in business activities
similar to those of the Issuer, the Eligible Lender Trustee or the Indenture
Trustee.
12. Administrator Default. If any one of the following events (an
"Administrator Default") shall occur and be continuing:
(a) any failure by the Administrator to direct the Indenture Trustee
to make any required distributions from any of the Trust Accounts, which
failure continues unremedied for three Business Days after written notice of
such failure is received by the Administrator from the Indenture Trustee or
the Eligible Lender Trustee or after discovery of such failure by an officer
of the Administrator; or
(b) any failure by the Administrator duly to observe or to perform in
any material respect any other covenants or agreements of the Administrator
set forth in this Agreement or any Basic Documents, which failure shall: (i)
materially and adversely affect the rights of Noteholders and (ii) continues
unremedied for a period of 30 days after the date of discovery of such failure
by an officer of the Administrator or on which written notice of such failure,
requiring the same to be remedied, shall have been given: (A) to the
Administrator by the Indenture Trustee or the Eligible Lender Trustee or (B)
to the Administrator and to the Indenture Trustee and the Eligible Lender
Trustee by the Noteholders, representing not less than 25% of the Outstanding
Amount of the Notes; or
(c) an Insolvency Event occurs with respect to the Administrator; or
(d) any representation or warranty made by the Administrator
hereunder or under any Basic Document, or in any certificate furnished
hereunder or under any Basic Document, shall prove to be untrue or incomplete
in any material respect;
then, and in each and every case, so long as the Administrator Default shall
not have been remedied, either the Indenture Trustee, or the Noteholders
evidencing not less than 75% of the Outstanding Amount of the Notes, by notice
then given in writing to the Administrator (and to the Indenture Trustee, the
Eligible Lender Trustee and the Swap Counterparty if given by the
Noteholders), may terminate all the rights and obligations (other than the
obligations set forth in Section 24 hereof) of the Administrator under this
Agreement. On or after the receipt by the Administrator of such written
notice, all authority and power of the Administrator under this Agreement,
whether with respect to the Notes or the Financed Student Loans or otherwise,
shall, without further action, pass to and be vested in the Indenture Trustee
or such successor Administrator as may be appointed under Section 13; and,
without limitation, the Indenture Trustee and the Eligible Lender Trustee are
hereby authorized and empowered to execute and deliver, for the benefit of the
predecessor Administrator, as attorney-in-fact or otherwise, any and all
documents and other instruments, and to do or accomplish all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination. The predecessor Administrator shall cooperate with the successor
Administrator, the Indenture Trustee and the Eligible Lender Trustee in
effecting the termination of the responsibilities and rights of the
predecessor Administrator under this Agreement. All reasonable costs and
expenses (including attorneys' fees and expenses) incurred in connection with
such transfer of responsibilities and amending this Agreement to reflect such
succession as Administrator pursuant to this Section shall be paid by the
predecessor Administrator upon presentation of reasonable documentation of
such costs and expenses. Upon receipt of notice of the occurrence of an
Administrator Default, the Eligible Lender Trustee shall give notice thereof
to the Rating Agencies and any Swap Counterparties.
13. Appointment of Successor. (a) Upon receipt by the Administrator
of notice of termination pursuant to Section 12, or the resignation by the
Administrator in accordance with the terms of this Agreement, the predecessor
Administrator shall continue to perform its functions as Administrator, in the
case of termination, only until the date specified in such termination notice
or, if no such date is specified in a notice of termination, until a successor
Administrator has accepted and assumed the responsibilities of the
Administrator and, in the case of resignation, until the later of: (i) the
date 120 days from the delivery to the Eligible Lender Trustee and the
Indenture Trustee of written notice of such resignation (or written
confirmation of such notice) in accordance with the terms of this Agreement
and (ii) the date upon which the predecessor Administrator shall become
legally unable to act as Administrator as specified in the notice of
resignation and accompanying Opinion of Counsel. In the event of termination
hereunder of the Administrator, the Issuer shall appoint a successor
Administrator acceptable to the Indenture Trustee and the successor
Administrator shall accept its appointment by a written assumption in form
acceptable to the Indenture Trustee. In the event that a successor
Administrator has not been appointed at the time when the predecessor
Administrator has ceased to act as Administrator in accordance with this
Section, the Indenture Trustee without further action shall automatically be
appointed the successor Administrator and the Indenture Trustee shall be
entitled to the Administration Fee. Notwithstanding the above, the Indenture
Trustee (with prior written notice to any Swap Counterparties) shall, if it
shall be unwilling or legally unable so to act, appoint or petition a court of
competent jurisdiction to appoint, as the successor to the Administrator under
this Agreement and the Administration Agreement, any established institution
the regular business of which shall include the servicing of student loans.
(b) Upon appointment, the successor Administrator (including the
Indenture Trustee acting as successor Administrator) shall be the successor in
all respects to the predecessor Administrator and shall be subject to all the
responsibilities, duties and liabilities placed on the predecessor
Administrator that arise thereafter or are related thereto and shall be
entitled to an amount agreed to by such successor Administrator (which shall
not exceed the Administration Fee unless the Swap Counterparties, if any, give
their prior written consent and such compensation arrangements will not result
in a downgrading of the Class A-1 Notes, the Class A-2 Notes or the
Subordinate Notes by any Rating Agency, and all the rights granted to the
predecessor Administrator by the terms and provisions of this Agreement.
(c) The Administrator may not resign unless it is prohibited from
serving as such by law as evidenced by an Opinion of Counsel to such effect
delivered to the Indenture Trustee and the Eligible Lender Trustee.
Notwithstanding the foregoing or anything to the contrary herein or in the
Basic Documents, the Indenture Trustee, to the extent it is acting as
successor Administrator pursuant hereto, shall be entitled to resign to the
extent a qualified successor Administrator has been appointed and has assumed
all the obligations of the Administrator in accordance with the terms of this
Agreement and the Basic Documents.
14. Notification to Noteholders. Upon any termination of, or
appointment of a successor to, the Administrator pursuant to Section 12 or 13,
the Indenture Trustee shall give prompt written notice thereof to Noteholders,
any Swap Counterparties and the Rating Agencies (which, in the case of any
such appointment of a successor, shall consist of prior written notice thereof
to the Rating Agencies).
15. Waiver of Past Defaults. The Noteholders of Notes evidencing not
less than a majority of the Outstanding Amount of the Notes may, on behalf of
all Noteholders, waive in writing any default by the Administrator in the
performance of its obligations hereunder and any consequences thereof, except
a default in making any required deposits to or payments from any of the Trust
Accounts (or giving instructions regarding the same) in accordance with this
Agreement. Upon any such waiver of a past default, such default shall cease to
exist, and any Administrator Default arising therefrom shall be deemed to have
been remedied for every purpose of this Agreement to the extent provided in
such waiver. No such waiver shall extend to any subsequent or other default or
impair any right consequent thereto.
16. Notices. Any notice, report or other communication given
hereunder shall be in writing (or in the form of facsimile notice, followed by
written notice) and addressed as follows:
(a) if to the Issuer, to
[_______________________] Student Loan Trust [ ]
[ ]
[ ]
[ ]
[ ]
with a copy to the Eligible Lender Trustee at the Corporate Trust
Office of the Eligible Lender Trustee
(b) if to the Eligible Lender Trustee, to
[ ]
[ ]
[ ]
[ ]
[ ]
[ ]
[ ]
(c) if to the Administrator, to
[ ]
[ ]
[ ]
[ ]
[ ]
[ ]
with a copy to
[ ]
[ ]
[ ]
[ ]
[ ]
[ ]
[ ]
(d) if to the Indenture Trustee, to
[ ]
[ ]
[ ]
Attention: [ ]
[ ]
Telephone: [ ]
Facsimile: [ ]
(e) if to any Swap Counterparties, to the address specified in any
Swap Agreements or to such other address as any party shall have provided to
the other parties in writing. Any notice required to be in writing hereunder
shall be deemed given if such notice is mailed by certified mail, postage
prepaid, or hand-delivered to the address of such party as provided above.
17. Amendments. This Agreement may be amended from time to time by a
written amendment duly executed and delivered by the Issuer, the Administrator
and the Indenture Trustee, with the prior written consent of the Eligible
Lender Trustee and any Swap Counterparties, but without the consent of the
Noteholders, for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Agreement or of modifying
in any manner the rights of the Noteholders; provided, however, that such
amendment will not, in an Opinion of Counsel obtained on behalf of the Issuer
and satisfactory to the Indenture Trustee and the Eligible Lender Trustee,
materially and adversely affect the interest of any Noteholder. This Agreement
may also be amended by the Issuer, the Administrator and the Indenture Trustee
with the prior written consent of the Eligible Lender Trustee, any Swap
Counterparties and the Noteholders of at least a majority in the Outstanding
Amount of the Notes for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Agreement or of
modifying in any manner the rights of Noteholders; provided, however, that no
such amendment may: (i) increase or reduce in any manner the amount of, or
accelerate or delay the timing of, collections of payments with respect to the
Financed Student Loans or distributions that are required to be made for the
benefit of the Noteholders or (ii) reduce the aforesaid percentage of the
Noteholders which are required to consent to any such amendment, without the
consent of all Outstanding Noteholders. Prior to the execution of any such
amendment, the Administrator shall furnish written notification of the
substance of such amendment to each of the Rating Agencies.
18. Assignment. Notwithstanding anything to the contrary contained
herein, except as provided in Section 13 or 25 of this Agreement concerning
the resignation of the Administrator, this Agreement may not be assigned by
the Administrator.
19. Governing Law. This Agreement shall be construed in accordance
with the laws of the [ ], without reference to its conflict of law provisions,
and the obligations, rights and remedies of the parties hereunder shall be
determined in accordance with such laws.
20. Headings. The section headings hereof have been inserted for
convenience of reference only and shall not be construed to affect the
meaning, construction or effect of this Agreement.
21. Counterparts. This Agreement may be executed in counterparts,
each of which when so executed shall together constitute but one and the same
agreement.
22. Severability. Any provision of this Agreement that is prohibited
or unenforceable in any jurisdiction shall be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.
23. Not Applicable to [ ] in Other Capacities. Nothing in this
Agreement shall affect any obligation [ ] may have in any other capacity under
the Basic Documents.
24. Liability of Administrator; Indemnities. The Administrator shall
be liable in accordance herewith only to the extent of the obligations
specifically undertaken by the Administrator under this Agreement.
The Administrator shall indemnify, defend and hold harmless the
Issuer, the Eligible Lender Trustee, the Indenture Trustee, the Servicer, any
Swap Counterparties and the Noteholders and any of the officers, directors,
employees and agents of the Issuer, the Eligible Lender Trustee, the Indenture
Trustee and the Servicer from and against any and all costs, expenses, losses,
claims, damages and liabilities to the extent that such cost, expense, loss,
claim, damage or liability arose out of, or was imposed upon any such Person
through, the negligence, willful misfeasance or bad faith of the Administrator
in the performance of its duties under this Agreement or by reason of reckless
disregard of its obligations and duties hereunder or thereunder.
The Administrator shall pay reasonable compensation to the Indenture
Trustee and shall reimburse the Indenture Trustee for all reasonable expenses,
disbursements and advances, and indemnify, defend and hold harmless the
Indenture Trustee and its officers, directors, employees and agents from and
against all costs, expenses, losses, claims, damages and liabilities, to the
extent and in the manner provided in, and subject to the limitations of,
Section 6.07 of the Indenture.
For purposes of this Section, in the event of the termination of the
rights and obligations of the Administrator (or any successor thereto pursuant
to Section 25) as Administrator pursuant to Section 12 or a resignation by
such Administrator pursuant to this Agreement, such Administrator shall be
deemed to be the Administrator pending appointment of a successor
Administrator pursuant to Section 13.
Indemnification under this Section shall survive the resignation or
removal of the Eligible Lender Trustee or the Indenture Trustee or the
termination of this Agreement and shall include reasonable fees and expenses
of counsel and expenses of litigation. If the Administrator shall have made
any indemnity payments pursuant to this Agreement and the Person to or on
behalf of whom such payments are made thereafter collects any of such amounts
from others, such Person shall promptly repay such amounts to the
Administrator, without interest.
25. Merger or Consolidation of, or Assumption of the Obligations of,
Administrator. Any Person: (a) into which the Administrator may be merged or
consolidated, (b) which may result from any merger or consolidation to which
the Administrator shall be a party or (c) which may succeed to the properties
and assets of the Administrator substantially as a whole, shall be the
successor to the Administrator without the execution or filing of any document
or any further act by any of the parties to this Agreement; provided, however,
that the Administrator hereby covenants that it will not consummate any of the
foregoing transactions except upon satisfaction of the following: (i) the
surviving Administrator, if other than [ ], executes an agreement of
assumption to perform every obligation of the Administrator under this
Agreement, (ii) immediately after giving effect to such transaction, no
representation or warranty made pursuant to Section 1 shall have been breached
and no Administrator Default, and no event that, after notice or lapse of time
or both would become an Administrator Default, shall have occurred and be
continuing, (iii) the Administrator shall have delivered to the Eligible
Lender Trustee, the Indenture Trustee and any Swap Counterparties an Officers'
Certificate and an Opinion of Counsel each stating that such consolidation,
merger or succession and such agreement of assumption comply with this Section
and that all conditions precedent, if any, provided for in this Agreement
relating to such transaction have been complied with, and that the Rating
Agency Condition shall have been satisfied with respect to such transaction,
(iv) the surviving Administrator shall have a consolidated net worth at least
equal to that of the predecessor Administrator, (v) such transaction will not
result in a material adverse federal or state tax consequence to the Issuer or
the Noteholders and (vi) unless [ ] is the surviving entity, the Administrator
shall have delivered to the Eligible Lender Trustee and the Indenture Trustee
an Opinion of Counsel either: (A) stating that, in the opinion of such
counsel, all financing statements and continuation statements and amendments
thereto have been executed and filed that are necessary fully to preserve and
protect the interests of the Eligible Lender Trustee, the Indenture Trustee
and any Swap Counterparties, respectively, in the Financed Student Loans and
reciting the details of such filings, or (B) stating that, in the opinion of
such counsel, no such action shall be necessary to preserve and protect such
interests.
26. Limitation on Liability of Administrator and Others. Neither the
Administrator nor any of its directors, officers, employees or agents shall be
under any liability to the Issuer, the Noteholders, the Indenture Trustee, the
Eligible Lender Trustee or any Swap Counterparties, except as provided under
this Agreement, for any action taken or for refraining from the taking of any
action pursuant to this Agreement or for errors in judgment; provided,
however, that this provision shall not protect the Administrator or any such
person against any liability that would otherwise be imposed by reason of
willful misfeasance, bad faith or negligence in the performance of its duties
or by reason of reckless disregard of obligations and its duties under this
Agreement. The Administrator and any of its directors, officers, employees or
agents may rely in good faith on the advice of counsel or on any document of
any kind prima facie properly executed and submitted by any Person respecting
any matters arising hereunder.
Except as provided in this Agreement, the Administrator shall not be
under any obligation to appear in, prosecute or defend any legal action that
shall not be incidental to its duties to administer the Financed Student Loans
and the Trust in accordance with this Agreement, and that in its opinion may
involve it in any expense or liability; provided, however, that the
Administrator may undertake any reasonable action that it may deem necessary
or desirable in respect of this Agreement and the other Basic Documents and
the rights and duties of the parties to this Agreement and the Basic Documents
and the interests of the Noteholders under the Indenture.
27. [ ] Not to Resign as Administrator. Subject to the provisions of
Section 25, [ ] shall not resign from the obligations and duties imposed on it
as Administrator under this Agreement except upon determination that the
performance of its duties under this Agreement shall no longer be permissible
under applicable law or shall violate any final order of a court or
administrative agency with jurisdiction over [ ] or its properties. Notice of
any such determination permitting the resignation of [ ] shall be communicated
to the Eligible Lender Trustee, the Indenture Trustee and any Swap
Counterparties at the earliest practicable time (and, if such communication is
not in writing, shall be confirmed in writing at the earliest practicable
time) and any such determination shall be evidenced by an Opinion of Counsel
to such effect delivered to the Eligible Lender Trustee, the Indenture Trustee
and any Swap Counterparties concurrently with or promptly after such notice.
No such resignation shall become effective until the Indenture Trustee or a
successor Administrator shall have assumed the responsibilities and
obligations of [ ] in accordance with Section 13.
28. Limitation of Liability of Eligible Lender Trustee and Indenture
Trustee. (a) Notwithstanding anything contained herein to the contrary, except
as provided in subsection (c) hereof, this instrument has been countersigned
by [ ] not in its individual capacity but solely in its capacity as Eligible
Lender Trustee of the Issuer and in no event shall [ ] in its individual
capacity or any Owner of the Issuer have any liability for the
representations, warranties, covenants, agreements or other obligations of the
Issuer hereunder, as to all of which recourse shall be had solely to the
assets of the Issuer. For all purposes of this Agreement, in the performance
of any duties or obligations of the Issuer thereunder, the Eligible Lender
Trustee shall be subject to, and entitled to the benefits of, the terms and
provisions of Articles VI, VII and VIII of the Trust Agreement.
(b) Notwithstanding anything contained herein to the contrary, except
as provided in subsection (c) hereof, this Agreement has been countersigned by
[ ] not in its individual capacity but solely as Indenture Trustee and in no
event shall [ ] have any liability for the representations, warranties,
covenants, agreements or other obligations of the Issuer hereunder or in any
of the certificates, notices or agreements delivered pursuant hereto, as to
all of which recourse shall be had solely to the assets of the Issuer.
(c) Notwithstanding any other provision in this Agreement or the
other Basic Documents, nothing in this Agreement or the other Basic Documents
shall be construed to limit the legal responsibility of the Eligible Lender
Trustee or the Indenture Trustee, to the U.S. Secretary of Education or a
Guarantor for any violations of statutory or regulatory requirements that may
occur with respect to loans held by the Eligible Lender Trustee or the
Indenture Trustee pursuant to, or to otherwise comply with their obligations
under, the Higher Education Act or implementing regulations.
29. Notice of Termination of Trust. As described in Article IX of the
Trust Agreement, notice of any termination of the Trust shall be given by the
Administrator to the Eligible Lender Trustee and the Indenture Trustee as soon
as practicable after the Administrator has received notice thereof.
30. Third-Party Beneficiaries. The Eligible Lender Trustee and any
Swap Counterparties are third-party beneficiaries to this Agreement and are
entitled to the rights and benefits hereunder and may enforce the provisions
hereof as if they were parties hereto; provided, however, that in the case of
any Swap Counterparties, such right to enforcement and the right to provide
consents or waivers pursuant to the provisions hereof or to take other actions
as provided herein are conditioned upon its not being in default under any
Swap Agreements.
31. Consents. With respect to any action to be taken hereunder that
requires the consent of a party hereto or of the Eligible Lender Trustee or
any Swap Counterparties, such consent shall not be unreasonably withheld,
delayed or conditioned.
[Signatures Follow on Next Page]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered as of the day and year first above written.
[___________________] STUDENT LOAN TRUST [ ]
By: [ ], not in its individual
capacity but solely as Eligible Lender Trustee
By: ___________________________________________
Name: [ ]
Title: [ ]
[ ] not in its
individual capacity but solely as Indenture Trustee
By: ___________________________________________
Name: [ ]
Title: [ ]
[GS Mortgage Securities Corp.], as Administrator
By: ___________________________________________
Name: [ ]
Title: [ ]
EXHIBIT A TO THE
ADMINISTRATION AGREEMENT
POWER OF ATTORNEY
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
KNOW ALL MEN BY THESE PRESENTS, that [ ], a national bank, not in its
individual capacity but solely as eligible lender trustee ("Eligible Lender
Trustee") for the [____________ ______________________] Student Loan Trust [ ]
(the "Trust"), does hereby make, constitute and appoint [ ], as Administrator
under the Administration Agreement (as defined below), and its agents and
attorneys, as Agents and Attorneys-in-Fact to execute on behalf of Eligible
Lender Trustee or the Trust all such documents, reports, filings, instruments,
certificates and opinions as it should be the duty of Eligible Lender Trustee
or the Trust to prepare, file or deliver pursuant to the Related Documents (as
defined in the Administration Agreement) or pursuant to Section 5.02 of the
Trust Agreement (as defined in the Administration Agreement), including
without limitation, to appear for and represent Eligible Lender Trustee and
the Trust in connection with the preparation, filing and audit of any federal,
state and local tax returns pertaining to the Trust, and with full power to
perform any and all acts associated with such returns and audits that the
Eligible Lender Trustee could perform, including without limitation, the right
to distribute and receive confidential information, defend and assert
positions in response to audits, initiate and defend litigation, and to
execute waivers of restriction on assessments of deficiencies, consents to the
extension of any statutory or regulatory time limit, and settlements. For the
purpose of this Power of Attorney, the term "Administration Agreement" means
the Administration Agreement dated as of [ ], among the Trust, [ ], as
Administrator, and [ ], as Indenture Trustee, as such may be amended from time
to time.
All powers of attorney for this purpose heretofore filed or executed
by Eligible Lender Trustee are hereby revoked.
EXECUTED as of the [ ]
[ ], not in its
individual capacity but solely
as Eligible Lender Trustee
By: __________________________
Name:
Title:
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
Before me, the undersigned authority, on this day personally appeared
[ ] known to me to be the person whose name is subscribed to the foregoing
instrument, and acknowledged to me that such person signed the same for the
purposes and considerations therein expressed.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this [ ]
Notary Public in and for the
State of New York
Printed Name of Notary Public
Commission Expires ___________________
EXHIBIT B
TO THE
ADMINISTRATION AGREEMENT
Form of Noteholders' Statement pursuant to Section 2(g) of
Administration Agreement. Capitalized terms used herein are defined in
Appendix A thereto. It should be noted, however, that while all the
information listed below shall be included in each Noteholders' Statement, the
presentation thereof may vary from that given below.
Quarterly Payment Date:
(i) Amount of principal being paid or distributed:
Class A-1 [ ]* ([ ]
* per $1,000
original principal
amount of Notes)
Class A-2 [ ]* ([ ]
* per $1,000
original principal
amount of Notes)
Subordinate [ ]* ([ ]
* per $1,000
original principal
amount of Notes)
* Portion of each such amount attributable to Reserve Account Excess: [ ]
(ii) Amount of interest being paid or distributed:
Class A-1 [ ]* ([ ]
* $1,000 original
principal amount
of Notes)
Class A-2 [ ]* ([ ]
* $1,000 original
principal amount
of Notes)
Subordinate [ ]* ([ ]
* $1,000 original
principal amount
of Notes)
(iii) [Reserved]
(iv) [Reserved]
(v) Pool Balance at end of related Collection Period: [ ]
(vi) After giving effect to distributions on this Quarterly Payment
Date:
(a) (1) outstanding principal amount of Class A-1 Notes: [ ]
(2) Class A-1 Note Pool Factor: [ ]
(b) (1) outstanding principal amount of Class A-2 Notes: [ ]
(2) Class A-2 Note Pool Factor: [ ]
(c) (1) outstanding principal amount of Subordinate Notes: [ ]
(2) Subordinate Note Pool Factor: [ ]
(vii) Applicable Interest Rate:
In general:
(1) Three-Month LIBOR for the LIBOR Reset Period since
the previous Quarterly Payment Date was [ ]%;
Class A-1 Note Rate: [ ]%
Class A-2 Note Rate: [ ]%
Subordinate Note Rate: [ ]%
(viii) Amount of Servicing Fee for related Collection Period
including a breakdown of the components of the Servicing Fee attributable to
each of the items specified in clauses II(i) through (ix) of Section 3.06 of
the Servicing Agreement and the amount of any Servicing Fee Shortfall for such
Quarterly Payment Date and for each Monthly Payment Date following the
immediately preceding Quarterly Payment Date:
(ix) Amount of Administration Fee for related Collection Period:
[ ] ([ ] per $1,000 original principal amount of Notes)
(x) the Trust Swap Payment Amount paid to each Swap Counterparty,
if any on such Quarterly Payment Date: [ ] the amount of any Net Trust Swap
Payment Carryover Shortfall with respect to each Swap Agreement, if any for
such Quarterly Payment Date: [ ] the Trust Swap Receipt Amount with respect to
each Swap Agreement, if any paid to the Trust on such Quarterly Payment Date:
[ ]; the Net Trust Swap Receipt Carryover Shortfall with respect to each Swap
Agreement, if any for such Quarterly Payment Date: [ ]
(xi) [Reserved]
(xii) Aggregate amount of Realized Losses (if any) for the
related Collection Period: [ ]
(xiii) Financed Student Loans delinquent at end of related
Collection Period: [ ] ; number of delinquent loans: [ ]; aggregate unpaid
principal balance of delinquent loans: [ ]
(xiv) Withdrawal from Reserve Account on related Quarterly
Payment Date (other than Reserve Account Excess) and on any Monthly Payment
Date since the preceding Quarterly Payment Date (list each withdrawal
separately): [ ] (purpose of each withdrawal).
(xv) Reserve Account Excess on related Quarterly Payment Date [ ]
(xvi) Principal balance of Notes to be paid to reach Parity Date:
[ ]
(xvii) [Reserved]
(xviii) Deposits to Collateral Reinvestment Account during
related Collection Period: [ ]; amount to be deposited on related Quarterly
Payment Date: [ ]
(xix) Withdrawal from Collateral Reinvestment Account during
related Collection Period: [ ]
(xx) Amount in the Reserve Account (after giving effect to
(xiv)): [ ]
(xxi) Amount in the Collateral Reinvestment Account (after giving
effect to (xvi)): [ ]
(xxii) Consolidation Loans: [ ] loans with aggregate principal
balances of [ ] were originated during related Collection Period; withdrawal
from Collateral Reinvestment Account to fund origination of Consolidation
Loans during related Collection Period: [ ]
(xxiii) Add-on Consolidation Loans: [ ] loans with aggregate
principal balances of [ ] were added to the principal balance of a
Consolidation Loan; withdrawal from Collateral Reinvestment Account to fund
the addition of the principal balances of Add-on Consolidation Loans during
the related Collection Period: [ ]
(xxiv) Serial Loans: [ ] loans with aggregate principal balances
of [ ] (portion represented by Purchase Premium Amounts ) were purchased
during the related ------- Collection Period.
(xxv) New Loans: _______ loans with aggregate principal balances
of _______ (portion represented by Purchase Premium Amounts [ ]) were
purchased during the related Collection Period.
(xxvi) Withdrawal from the Prefunding Account during the related
Collection Period (list each withdrawal pursuant to Section 2(k)(ii)
separately): [ ] (purpose of each withdrawal)
(xxvii) Amount in the Prefunding Account (after giving effect
(xxiii)).
(xxviii) Financed Student Loans in the following categories as of
the end of the related Collection Period:
Weighted Average Number of Principal
Interest Rate Loans Balance
STATUS TYPE:
------------
In-School
Grace
Repayment
Forbearance
Deferment
Delinquencies
Claims Filed Awaiting Payment
DELINQUENCIES:
--------------
30-60 Days
61-90 Days
91-120 Days
More than 120 Days Delinquent
Claims Filed Awaiting Payment
LOAN TYPE:
---------
▇▇▇▇▇▇▇▇ Loans
SLS Loans
PLUS Loans
Consolidation Loans
SCHOOL TYPE:
-----------
Traditional
Vocational/Proprietary
EXHIBIT C
TO THE
ADMINISTRATION AGREEMENT
Form of Swap Agreement pursuant to Section 2(j) of the Administration
Agreement.
FORM OF SCHEDULE
TO THE MASTER AGREEMENT
dated as of [ ]
between
[ ]
("Party A"),
a corporation organized under the laws
of [ ]
and
[___________________________________] STUDENT LOAN TRUST [ ],
("Party B")
a Delaware business trust.
Part 1. TERMINATION PROVISIONS
In this Agreement:
(a) "Specified Entity" means in relation to Party A for the
purpose of:
SECTION 5(A)(V) Not Applicable. SECTION 5(A)(VI)
Not Applicable. SECTION 5(A)(VII) Not Applicable.
SECTION 5(B)(IV) Not Applicable.
and in relation to Party B for the purpose of:
SECTION 5(A)(V) Not Applicable. SECTION 5(A)(VI)
Not Applicable. SECTION 5(A)(VII) Not Applicable.
SECTION 5(B)(IV) Not Applicable.
(b) "Specified Transaction" will have the meaning specified in
Section 14 of this Agreement.
(c) "Additional Termination Event" will not apply to Party A and
will apply, with respect to Redemption Event only, to Party B. The occurrence
of a Redemption Event will constitute an Additional Termination Event in
respect of which Party B will be the sole Affected Party.
(d) The provisions of Section 5(a) and Section 5(b) will apply to
Party A and to Party B as follows:
The designation below of an Event of Default as being "Applicable" to
a specific party means that upon the occurrence and continuation of such an
Event of Default with respect to such party, the other party shall have the
right of a Non-defaulting Party to designate an Early Termination Date for the
Sole Transaction (as defined below) under Section 6 of this Agreement, and
conversely, the designation of an Event of Default as being "Not Applicable"
to a party means that upon the occurrence and continuation of such an Event of
Default with respect to such party, the other party shall not have the right
to designate an Early Termination Date for the Sole Transaction with respect
to such event under Section 6 of this Agreement.
SECTION 5(A) PARTY A PARTY B
(i) "Failure to Pay or Deliver" Applicable. "Failure to Pay or
Deliver" is
Applicable to Party
B; provided that
Party B has funds
available to make
payments in
accordance with the
terms of the
Indenture and the
Trustee has failed to
make any such
payments in violation
of the terms of the
Indenture.
(ii) "Breach of Agreement" Applicable. Not Applicable.
(iii) "Credit Support Default" Applicable. Not Applicable.
(iv) "Misrepresentation" Applicable. Not Applicable.
(v) "Default under Specified Transaction" Applicable. Not Applicable.
(vi) "Cross Default" Applicable. Not Applicable.
(vii) "Bankruptcy" Applicable. Applicable.
(viii) "Merger Without Assumption" Applicable. Not Applicable.
(ix) "Additional Event of Default" Applicable. Applicable.
specified in Part 1(h)
(Acceleration of Notes)
SECTION 5(B)
Neither party shall be entitled to designate an Early Termination
Date as a result of the occurrence and continuation of an event described in
Section 5(b)(iii) (Tax Event Upon Merger).
(e) Payments on Early Termination. For the purpose of Section 6(e):
(i) Except as provided in Appendix I (Redemption of Notes) Market
Quotation will apply.
(ii) The Second Method will apply.
(f) "Termination Currency" means United States Dollars ("USD").
(g) The "Automatic Early Termination" provisions of Section 6(a)
will not apply to Party A or Party B.
(h) Additional Event of Default. Section 5(a) of the Agreement is
hereby amended by: (i) deleting the word "or" at the end of Section 5(a)(vii),
(ii) deleting the period at the end of Section 5(a)(viii) and adding "; or" at
the end thereof and (iii) adding the following language at the end of Section
5(a):
"(ix) Additional Event of Default. The principal of any class of
Notes shall have been declared or become immediately due and payable
in accordance with the terms of the Indenture (an "Acceleration of
Notes") following an "event of default" thereunder (it being
understood that such event will constitute an Event of Default solely
with respect to [___________________________________] STUDENT LOAN
TRUST [ ]."
Part 2. TAX REPRESENTATIONS.
(a) Payer Tax Representations. For the purpose of Section 3(e) of
this Agreement, Party A and Party B will each make the following
representation:
It is not required by any applicable law, as modified by the practice
of any relevant governmental revenue authority, of any Relevant
Jurisdiction to make any deduction or withholding for or on account
of any Tax from any payment (other than interest under Section 2(e),
6(d)(ii) or 6(e) of this Agreement) to be made by it to the other
party under this Agreement. In making this representation, it may
rely on: (i) the accuracy of any representations made by the other
party pursuant to Section 3(f) of this Agreement, (ii) the
satisfaction of the agreement contained in Section 4(a)(i) or
4(a)(iii) of this Agreement, and the accuracy and effectiveness of
any document provided by the other party pursuant to Section 4(a)(i)
or 4(a)(iii) of this Agreement and (iii) the satisfaction of the
agreement of the other party contained in Section 4(d) of this
Agreement, provided that it shall not be a breach of this
representation where reliance is placed on clause (ii) and the other
party does not deliver a form or document under Section 4(a)(iii) by
reason of material prejudice to its legal or commercial position.
(b) Payee Tax Representations. For the purpose of Section 3(f) of
this Agreement, Party A and Party B make the following representation:
(i) The following representation will apply to Party A:
Each payment received or to be received by it in connection with this
Agreement will be effectively connected with its conduct of a trade
or business in the Specified Jurisdiction.
"Specified Jurisdiction" means the United States of America.
(ii) The following representation will apply to Party B:
It is a business trust organized under the laws of the State of
Delaware.
Part 3. AGREEMENT TO DELIVER DOCUMENTS.
For the purpose of Section 4(a)(i) and Section 4(a)(ii) of this
Agreement, Party A and Party B each agree to deliver the following documents,
as applicable:
(a) Tax forms, documents or certificates to be delivered are:
PARTY REQUIRED TO FORM, DOCUMENT DATE BY WHICH
DELIVER DOCUMENT OR CERTIFICATE TO BE DELIVERED
Party A An executed U.S. Internal (i) Before the first Payment
Revenue Service 4224 Form Date under this Agreement,
(or any successor thereto) ii) promptly upon reasonable
(demand by Party B, and (iii)
promptly upon learning that any
such Form previously provided by
Party A has become obsolete
or incorrect.
Party B
An executed U.S. Internal (i) Before the first Payment Date
Revenue Service Form W-9 under this Agreement, (ii)
(or any successor thereto), promptly upon reasonable demand
including appropriate attachments. by Party A, and (iii) promptly
upon learning that any such form
previously provided by Party B has
become obsolete or incorrect
(b) Other documents to be delivered are:
PARTY REQUIRED TO FORM, DOCUMENT DATE BY WHICH COVERED BY
DELIVER DOCUMENT OR CERTIFICATE TO BE DELIVERED SECTION 3(D)
---------------- -------------- --------------- ------------
Party A An opinion of counsel to Party A Upon execution of this No
substantially in the form of Agreement.
Exhibit A to this Schedule.
Party A An incumbency certificate with Upon execution of this Yes
respect to the signatory of this Agreement.
Agreement.
Party B Executed copies of all Basic Upon execution of this Yes, with respect to
Documents and all opinions Agreement. certificates and other
required by the Underwriting factual statements; No,
Agreement with respect to opinions
and agreements
Party B An executed original of the Upon execution of this
Officer's Certificate of Agreement.
[_____________] substantially in
the form of Exhibit C and
reasonably satisfactory in form
and substance to Party A.
Part 4. MISCELLANEOUS.
(a) Addresses for Notices. For the purpose of Section 12(a):
Address for notices or communications to Party A:
Address: [ ]
[ ]
[ ]
Attention: [ ]
Telephone: [ ]
Facsimile: [ ]
Address for notices or communications to Party B:
Address: [ ]
[ ]
[ ]
Attention: [ ]
Telephone: [ ]
Facsimile: [ ]
with copies to:
Address: [ ]
[ ]
[ ]
Attention: [ ]
Telephone: [ ]
Facsimile: [ ]
Address for notices or communications to Moody's:
Address: ▇▇▇▇▇'▇ Investors Service, Inc.
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: [ABS Monitoring Department]
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Address for notices or communications to Fitch:
Address: Fitch, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: [Asset Backed Monitoring Unit]
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Address for notices or communications to S&P:-
Address:Standard & Poor's, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: [Asset Backed Surveillance Department]
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇.
Notices under this Agreement and the Transaction shall be sent to
▇▇▇▇▇'▇, Fitch and S&P only to the extent specifically required in the
transaction confirmation.
(b) PROCESS AGENT. For the purpose of Section 13(c):
Party A appoints as its Process Agent:
[ ]
[ ]
[ ]
Telephone: [ ]
Facsimile: [ ]
Party B appoints as its Process Agent:
[ ]
[ ]
[ ]
Telephone: [ ]
Facsimile: [ ]
(c) OFFICES. The provisions of Section 10(a) will not apply to
Party A and will not apply to Party B.
(d) MULTIBRANCH PARTY. For the purpose of Section 10(c) of this
Agreement:--
Party A is not a Multibranch Party.
Party B is not a Multibranch Party.
(e) CALCULATION AGENT. The Calculation Agent shall be Party A. In
the case of a dispute involving any calculation made by the Calculation Agent
under this Agreement (each, a "Disputed Calculation"), Party A and Party B
will appoint a mutually acceptable Reference Bank or Reference Dealer, as
applicable, who will: (i) with respect to any calculation relating to a
Terminated Transaction, determine the Disputed Calculation by reference to the
methodology set forth in the definition of Market Quotation and (ii) with
respect to any other calculation, determine the Disputed Calculation by
reference to a mutually acceptable methodology. If such Reference Bank or
Reference Dealer determines that no quotations are available for a particular
Disputed Calculation, then the Calculation Agent's original calculations will
be used for that Disputed Calculation. All calculations made by the
Calculation Agent in accordance with this Part 4(e) shall be binding absent
manifest error.
(f) CREDIT SUPPORT DOCUMENT. Details of any Credit Support
Document:-
In the case of Party A: Not Applicable.
In the case of Party B: Not Applicable.
(g) CREDIT SUPPORT PROVIDER.
Credit Support Provider means in relation to Party A: Not
Applicable. Credit Support Provider means in relation to Party B: Not
Applicable.
(h) "Affiliate" will have the meaning specified in Section 14 of
this Agreement.
(i) GOVERNING LAW. THIS AGREEMENT WILL BE GOVERNED BY, CONSTRUED
AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT
REGARD TO CHOICE OF LAW DOCTRINE).
(j) NETTING OF PAYMENTS. Section 2(c)(ii) will not apply.
(k) ACCOUNT DETAIL:
Payments to Party A: The Account described in the related
Confirmation Payments to Party B: The Account described in the related
Confirmation
Part 5. OTHER PROVISIONS.
(a) CONFIRMATION. Each Confirmation supplements, forms part of, and
will be read and construed as one with this Agreement. The parties hereby
agree and acknowledge that only one Transaction (the "Sole Transaction") will
be governed by this Agreement, the Confirmation of the Sole Transaction is
dated [ ] and bears reference number [ ], and the parties will not enter into
any additional Transactions governed by this Agreement or otherwise.
(b) EARLY TERMINATION.
(1) Section 6(b)(ii) is hereby amended by adding at
the end of the first paragraph the following:
", provided that the party seeking to make the transfer to avoid a
Termination Event shall deliver to Party B (in the case of transfers
by Party A) or to Party A (in the case of transfers by Party B)
written confirmation from each Rating Agency then rating any class of
Notes that such transfer will not result in its then-current rating
of each class of Notes being withdrawn or lowered."
(2) Notwithstanding anything to the contrary in this
Agreement, if the Early Termination Date of the Sole
Transaction occurs or is effectively designated, Party A
and Party B agree as follows:
(ii) The Calculation Agent shall calculate an amount that would
be payable to or by Party B under this Agreement in respect of such
Early Termination Date (such amount, including any Trust Swap Payment
Amount or Trust Swap Receipt Amount constituting any portion thereof,
the "Termination Payment").
(iii) To the extent that Party A is required to pay the
Termination Payment to Party B, Party A shall pay such amount in
accordance with the terms of this Agreement.
(iv) To the extent that Party B is required to pay the
Termination Payment to Party A where:
(A) Party B is the Defaulting Party (provided, however,
that to the extent that Party B is the Defaulting Party with
respect to an Event of Default specified in Section 5(a)(i) of the
Agreement (Failure to Pay or Deliver) this priority shall apply
only with respect to the Trust Swap Payment Amount (and not the
remainder of the Termination Payment)), Party B shall pay such
amount in accordance with Section 8.02(c)(i), Section 8.02(e)(i)
(to the extent of any Net Trust Swap Payment Carryover Shortfalls
included in such Termination Payment), Section 10.01 or Section
5.04(b), priority "Second," of the Indenture or Section
2(e)(iv)(C) of the Administration Agreement, as applicable.
(B) Party A is the Defaulting Party, the Early Termination
Date arises from a Termination Event (other than an Additional
Termination Event) or Party B is the Defaulting Party with respect
to an Event of Default specified in Section 5(a)(i) (exclusive of
any Trust Swap Payment Amount paid pursuant to Clause (A)), Party
B shall pay such Termination Payment in accordance with Section
8.02(d)(viii), Section 8.02(e)(i) (to the extent of any Net Trust
Swap Payment Carryover Shortfalls included in such Termination
Payment), Section 10.01 or Section 5.04(b), priority "Eleventh,"
of the Indenture.
(C) Party B replaces Party A with a successor to Party A,
Party B and Party A agree to cause the successor to Party A to pay
the Termination Payment (or such lesser amount actually paid by
such successor) to Party A. Any amounts actually received by Party
A under this clause (C) shall reduce the amounts payable pursuant
to clauses (A) and (B); Party A shall pay to Party B any excess of
amounts actually received by Party A under this clause (C) over
the Termination Payment.
(c) NO BANKRUPTCY PETITION. Prior to the date that is one year and
one day after the date upon which the final payment is made in respect of the
Notes in accordance with the terms thereof, Party A shall not institute
against, or join any other person in instituting against, Party B, any
bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any federal or state bankruptcy or
similar law.
(d) TRANSFER. Section 7 is hereby amended by:
(1) (i) adding the words "(and notice of the
transferee to)" after the word "of" on the third line
thereof, and (ii) adding the words "(subject to providing
three Business Days prior written notice of the transferee
to the other party and to each Rating Agency)" after the
word "transfer" on the fourth and seventh line thereof.
(2) adding at the end thereof:
"Any party making any such transfer shall deliver to the other party
written confirmation from each Rating Agency then rating any class of
Notes that such transfer will not result in its then-current rating
of each class of Notes being withdrawn or lowered."
(e) SWAP EXEMPTION.
(1) The parties agree that this Agreement and the
Sole Transaction are intended to constitute a "swap
agreement" within the meaning of Commodity Futures Trading
Commission ("CFTC") Regulations Section 35.1(b)(1) and
Section 101(53)(B) of the U.S. Bankruptcy Code;
(2) Each party represents to the other that it is an
"eligible swap participant" within the meaning of CFTC
Regulations Section 35.1(b)(2);
(3) The parties agree that neither this Agreement nor
the Sole Transaction is one of a fungible class of
agreements that are standardized as to their material
economic terms, within the meaning of CFTC Regulations
Section 35.2(b); and
(4) Each party represents to the other that the
creditworthiness of the other party was or will be a
material consideration in entering into or determining the
terms of this Agreement and the Sole Transaction,
including pricing, cost or credit enhancement terms of
this Agreement or the Sole Transaction, within the meaning
of CFTC Regulations Section 35.2(c).
(f) WAIVER OF RIGHT TO TRIAL BY JURY. Each of the parties hereby
irrevocably waives any and all right to a trial by jury with respect to any
legal proceeding arising out of or relating to this agreement or any
transaction.
(g) AMENDMENTS. Section 9(b) of this Agreement is hereby amended by
adding the following after the word "system" in the last line thereof:
", provided, however, that all such amendments, modifications or
waivers shall require the written affirmation of each Rating Agency
then rating any class of Notes that such amendment, modification or
waiver shall not adversely affect its then-current rating of each
class of Notes."
(h) ISDA DEFINITIONS. Reference is hereby made to the 1991 ISDA
Definitions (the "Definitions"), published by the International Swaps and
Derivatives Association, Inc., which is hereby incorporated by reference
herein without regard to any revision or subsequent edition thereof or as
otherwise provided in any Confirmation.
(i) RATING AGENCY DOWNGRADE. Anything to the contrary in Section 7
notwithstanding, no later than the 30th day following a Rating Agency
Downgrade, Party A shall, at its expense:
(i) transfer Party A's rights and duties hereunder to (or
otherwise procure a replacement transaction with terms substantially
similar to this Sole Transaction with) a successor to Party A having,
or guaranteed by a Credit Support Provider having, a long-term
unsecured and unguaranteed debt rating of at least "A3" or its
equivalent by each Swap Rating Agency;
(ii) enter into arrangements, including collateral
arrangements, guarantees, letters of credit or other Credit Support
Documents which will, after review by each Swap Rating Agency,
reverse the effect of any reduction or withdrawal of ratings in
connection with such Rating Agency Downgrade on the Noteholders and
the Subordinate Note Insurer; or
(iii) pledge Eligible Collateral pursuant to an ISDA Credit
Support Annex equal to the Replacement Cost of the Sole Transaction
contemplated by this Agreement (or otherwise receive written
confirmation from each Rating Agency that each class of Notes will
continue to be rated at least the ratings of such class of Notes
prior to such Rating Agency Downgrade) such that the rating of each
class of Notes by each Rating Agency will not be withdrawn or reduced
below the ratings of each such class of Notes prior to the Rating
Agency Downgrade.
Party B shall cooperate with Party to effect the purposes of the
foregoing.
ELIGIBLE COLLATERAL. The following items will qualify as "Eligible
Collateral" for the purpose of Part 5(i)(3) of this Agreement:
ELIGIBLE COLLATERAL VALUATION PERCENTAGE
(A) Cash 100%
(B) negotiable debt obligations issued
by the U.S. Treasury Department 100%
REPLACEMENT COST. For the purpose of Part 5(i)(3) of this Agreement,
"Replacement Cost" means, with respect to the close of business (the
"Valuation Time") on the date of any Rating Agency Downgrade, and weekly
thereafter, the amount, if any, that would be payable to Party B by Party A
(expressed as a positive number) pursuant to Section 6(e)(ii)(2)(A) of this
Agreement as if all Transactions (or Swap Transactions) were being terminated
as of the relevant Valuation Time; provided that Market Quotation will be
determined by the Calculation Agent using its estimates at mid-market of the
amounts that would be paid for Replacement Transactions (as that term is
defined in the definition of "Market Quotation").
(j) ADDITIONAL REPRESENTATIONS. Section 3 is hereby amended by adding
the following subsections (g), (h) and (i) at the end of such Section:
(k) NON-RELIANCE. In connection with the negotiation of, the entering
into, and the confirming of the execution of, this Agreement, any Credit
Support Document, the Sole Transaction and any other documentation relating to
this Agreement to which it is a party or that it is required by this Agreement
to deliver: (1) the other party hereto or thereto is not acting as a fiduciary
or financial or investment advisor for it; (2) it is not relying (for purposes
of making any investment decision or otherwise) upon any advice, counsel or
representations (whether written or oral) of the other party hereto or thereto
other than the representations expressly set forth in this Agreement, in such
Credit Support Document and in any Confirmation; (3) the other party hereto or
thereto has not given to it (directly or indirectly through any other person)
any assurance, guaranty or representation whatsoever as to the expected or
projected success, profitability, return, performance, result, effect,
consequence, or benefit (either legal, regulatory, tax, financial, accounting
or otherwise) of this Agreement, such Credit Support Document, such Sole
Transaction or such other documentation; (4) it has consulted with its own
legal, regulatory, tax, business, investment, financial and accounting
advisors to the extent it has deemed necessary, and it has made its own
investment, hedging and trading decisions (including decisions regarding the
suitability of any Transaction pursuant to this Agreement) based upon its own
judgment and upon any advice from such advisors as it has deemed necessary and
not upon any view expressed by the other party hereto or thereto; (5) it has
determined that the rates, prices or amounts and other terms of the Sole
Transaction and the indicative quotations (if any) provided by the other party
hereto or thereto reflect those in the relevant market for similar
transactions, and all trading decisions have been the result of arm's length
negotiations between the parties; (6) it is entering into this Agreement with
a full understanding of all the terms, conditions and risks hereof and thereof
(economic and otherwise) and it is capable of assuming and willing to assume
(financially and otherwise) those risks; and (7) it is a sophisticated
institutional investor.
(l) LINE OF BUSINESS. It has entered into this Agreement (including
the Sole Transaction evidenced hereby) in conjunction with its line of
business (including financial intermediation services) or the financing of its
business.
(m) NO AGENCY. It is entering into this Agreement, any Credit Support
Document to which it is a party, the Sole Transaction and any other
documentation relating to this Agreement or the Sole Transaction as principal
(and not as agent or in any other capacity, fiduciary or otherwise).
(n) NOTICES TO PARTY A. Party B agrees that it shall cause to be
delivered to Party A any notices generated or received by Party B in
connection with the Basic Documents.
(o) LIMITED RECOURSE TO PARTY B. Notwithstanding anything to the
contrary contained herein, all obligations of Party B shall be payable by
Party B only on each Quarterly Payment Date, first, to the extent funds are
available therefor, under Section 8.02 of the Indenture, second, to the extent
funds are available therefor, under Section 2(e)(iv)(C) of the Administration
Agreement, third, to the extent funds are available therefor, under Section
10.01 of the Indenture, fourth, to the extent of funds available therefor,
under Section 5.04 of the Indenture and, to the extent such funds are not
available or are insufficient for the payment thereof, shall not constitute a
claim against the Trust to the extent of such unavailability or insufficiency
until such time as the Trust has assets sufficient to pay such prior
deficiency. This paragraph shall survive the termination of this Agreement but
in all cases shall expire concurrently with the restriction specified in Part
5(c).
(p) NO SUSPENSION OF PAYMENTS. Notwithstanding Section 2(a)(iii) of
this Agreement, Party A shall not suspend any payments due under Section
2(a)(iii) unless:
(i) the principal of any class of Notes shall have been
accelerated in accordance with the terms of the Indenture following an
Event of Default thereunder; or
(ii) an Early Termination Date for the Sole Transaction has
occurred or effectively been designated.
(q) DEFAULT INTEREST. Section 2(e) of this Agreement is hereby
deleted in its entirety.
(r) REDEMPTION EVENT.
(i) A "Redemption Event" will occur upon the delivery by Party B
(or its designee) to Party A of a "Party B Response" (as defined in
Appendix I) accepting Party A's offer to terminate the Sole Transaction
as provided in Appendix I hereto. Such Party B Response shall be
delivered on or before the related Redemption Date (as defined in the
Indenture) and shall certify that the Minimum Purchase Price (as defined
in the Indenture) has been deposited into the appropriate Trust Account
(as defined in the Indenture). The parties hereto acknowledge and agree
that the Indenture Trustee (as defined in the Indenture) may deliver such
Party B Response on behalf of Party B. Party A hereby agrees that upon
receipt of such Party B Response from the Indenture Trustee certifying
that the Minimum Purchase Price has been deposited in the Collection
Account, Party A shall immediately designate the Redemption Date as an
Early Termination Date. Notwithstanding Section 6(d)(ii), the Payment
Date in respect of a Redemption Event shall be the Early Termination Date
so designated. For avoidance of doubt, no Redemption Event shall occur
and no Early Termination Date shall be effectively designated in respect
thereof unless the Minimum Purchase Price shall have been deposited into
the applicable Trust Account(s) pursuant to Article X of the Indenture.
(ii) The parties hereto acknowledge and agree that [ ], as
Administrator under the Administration Agreement, may deliver on behalf
of Party B any "Party B Notices" required or permitted by Appendix I
hereto; provided, that in no event shall a Redemption Event occur upon
delivery of any such Party B Notice from the Administrator.
(s) STATEMENT TO NOTEHOLDERS. Party B will provide to Party A
statements required by Section 2(g) of the Administration Agreement dated as
of [ ] (the "Administration Agreement") among Party B, [ ] ("[ ]", as
administrator (the "Administrator"), and [ ], as indenture trustee (the
"Indenture Trustee").
(t) ADDITIONAL DEFINITIONS. Capitalized terms used in this Schedule
shall have the meaning set forth in the Confirmation, the Indenture or, if not
therein, Appendix A to the Administration Agreement, without regard to any
amendment or supplement thereto with respect to which Party A has not given
its written consent.
"Indenture" means the Indenture dated as of [ ] between Party B and
[ ], as indenture trustee, without regard to any amendment or supplement thereto
with respect to which Party A has not given its written consent.
"Net Trust Swap Payment Carryover Shortfall" means, with respect to
any Quarterly Payment Date with respect to which Party B owes any amounts to
Party A in respect of this Agreement, the excess of: (i) the Trust Swap
Payment Amount with respect to this Agreement on the preceding Quarterly
Payment Date over (ii) the amount actually received by Party A out of
Available Funds with respect to this Agreement on such preceding Quarterly
Payment Date plus interest on such excess from such preceding Quarterly
Payment Date to the current Quarterly Payment Date at the rate of Three-Month
LIBOR for the related Quarterly Interest Period.
"Rating Agency Downgrade" means that, prior to the earlier of the
Termination Date or the Early Termination Date of the Sole Transaction, the
rating of Party A or any successor thereto is withdrawn or reduced below "A3"
or its equivalent by any Swap Rating Agency then rating Party A.
"Underwriting Agreement" means the Underwriting Agreement dated as of
[ ] between [___________________________________], as seller, and [ ], as
representative of the several underwriters of the Notes.
"Swap Rating Agency" means ▇▇▇▇▇'▇ Investors Service, Inc. or
Standard & Poor's Ratings Service, a division of the ▇▇▇▇▇▇-▇▇▇▇ Companies,
Inc.
The parties executing this Schedule have executed the Master
Agreement and have agreed as to the contents of this Schedule.
By: ____________________________________
Name:
Title:
[____________] STUDENT LOAN TRUST [ ]
By: [ ], not in its
individual capacity but solely as
Eligible Lender Trustee
By: _____________________________________
Name:
Title:
APPENDIX I
REDEMPTION OF NOTES.
1. As promptly as practicable, but in any event not later than two
Business Days after delivery by Party B (or Party B's designee) to Party A of
a notice of proposed redemption (the "Redemption") and request for a quotation
of Termination Payment (the "Party B Notice"), Party A will give notice by
telephone to Party B (which notice will be promptly confirmed in writing to
Party B with a copy of such notice to [___________________________________])
(the "Party A Response"):
(i) offering to terminate the Sole Transaction upon such
Redemption; and
(ii) stating in good faith and in reasonable detail the
Termination Payment (the "Redemption Payment") that will be payable by
Party B to Party A or by Party A to Party B on the proposed Redemption
Date (as defined in the Indenture) if the offer is accepted at the time
of such offer (or through such later time, if any, as may be expressed in
the offer in the discretion of Party A) and the Redemption is effected on
the Redemption Date; provided, however, that, if such offer is not
accepted at such time, Party A will, promptly after requests therefor by
Party B, make new offers to effect the termination of the Sole
Transaction and will make such new offers in accordance with reasonable
market practice until 11:00 a.m. New York City time on the Business Day
two Business Days prior to the Redemption Date (the "Deadline"). Any such
new offer will contain the statements required by the preceding clauses
(i) and (ii) and will also be a Party A Response, except that:
(A) only the Party A Response will determine the period
during which new offers are required to be accepted; and
(B) in the case of the Final Offer (as defined below),
"Market Quotation" will be substituted for "Loss" for purposes of
determining the Redemption Payment.
The last such new offer is referred to herein as the "Final Offer."
The Final Offer will be identified as such in the relevant Party A Response.
The Final Offer will not be delivered earlier than the Business Day on which
the Deadline occurs. The Final Offer will be communicated by telephone to
Party B (which Final Offer will be promptly confirmed in writing to Party B
with a copy of such Final Offer to [___________________________________]).
2. Each Party A Response will describe the Redemption Payment, even
if the Redemption Payment remains the same and, except as described above with
respect to the Final Offer, each Redemption Payment will be determined using
"Loss" and "Second Method" and based on Party B as the sole Affected Party.
3. As promptly as practicable, but in any event not later than the
end of the period during which an offer may be accepted pursuant to the
relevant Party A Response, Party B, acting in good faith and in accordance
with reasonable derivatives market practice, will accept the offer expressed
therein by notice (the "Party B Response") to Party A. Such notice will be by
telephone, will be promptly confirmed in writing and will thereupon be
effective, all in accordance with usual derivatives markets transactions. A
copy of each such Party B Response will be delivered by Party B to
GS Mortgage Securities Corp. If the offer is accepted as aforesaid, the
Redemption will be effective on the Redemption Date on the terms expressed in
the last relevant Party A Response as accepted by the Party B Response
(subject to the conditions set forth in Part 5(o) of this Agreement). The
Redemption Payment will be the amount described in the Party A Response
accepted by Party B.
4. Party B (or its designee) will have the right to make reasonable
request of Party A for indications of Redemption Payments based on proposed
Redemptions as contemplated by Paragraphs 1 through 3 above, and Party A will
supply such indications promptly and in good faith following any such request.
Except as provided in Paragraphs 1 through 3 above and Part 5(o) of the
Agreement, neither Party B nor its designee will be obligated to effect any
such Redemption.
CONFIRMATION
REF. NO. _________
EXHIBIT A FORM OF OPINION OF PARTY A
[ ], 20[ ]
[___________________________________] STUDENT LOAN TRUST [ ]
[ ]
[ ]
[ ]
[ ]
[ ]
[ ]
[ ]
[ ]
[ ]
[ ]
Moody's Investors Services, Inc.
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fitch, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Standard & Poor's Rating Agency
a division of the ▇▇▇▇▇▇-▇▇▇▇ Companies
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
This opinion is furnished to you pursuant to a Master Agreement dated
as of [ ], ____ (the "Agreement"), between
[___________________________________] STUDENT LOAN TRUST [ ] and [ ] (the
"Swap Counterparty"). Terms defined in the Agreement are used herein as
defined in the Agreement.
I am counsel to the Swap Counterparty and in that capacity have
examined such documents and have conducted such investigations of fact and law
as I have deemed necessary or advisable for the opinions expressed herein. The
opinions expressed herein are limited to questions arising under the laws of
the State of New York, the United States of America [and foreign
jurisdiction].
Upon the basis of the foregoing, I am of the opinion that:
1. The Swap Counterparty is a corporation duly organized and validly
existing under the laws of [ ].
2. The execution, delivery and performance of the Agreement by the
Swap Counterparty are within the Swap Counterparty's corporate power, have
been duly authorized by all necessary corporate action and do not conflict
with, or constitute a default under, any provisions of the Swap Counterparty's
articles of incorporation or by-laws or any applicable law or regulation or of
any agreement, decree, order, judgment, injunction or other instrument known
to me and binding on or affecting the Swap Counterparty's property or assets.
3. The Agreement has been duly authorized, executed and delivered by
the Swap Counterparty.
4. (i) The governing law clause, subjecting the Agreement to New York
law, is valid under [foreign country] law.
(ii) Under [foreign country] law, New York law will be applied
to the Agreement, except to the extent that any terms of the Agreement or
any provisions of New York law applicable to the Agreement result in the
outcome of their application in a violation of [foreign country] public
policy or violate the purpose of a [foreign country's] statute reflecting
such public policy.
(iii) None of the terms of the Agreement result in the outcome
of their application in a violation of [foreign country] public policy or
violate the purpose of a [foreign country] statute reflecting such public
policy.
(iv) Assuming that the Agreement is legal, valid, binding and
enforceable under New York law, the Agreement is legal, valid, binding
and enforceable against the Swap Counterparty in accordance with its
terms, the [foreign country] civil procedural rules and, subject to the
opinions set forth in subclauses (i) through (iii) above, the applicable
provisions of the chosen law of New York, except that the enforceability
of the Agreement may be limited by bankruptcy, reorganization, moratorium
or similar laws affecting the enforcement of creditors' rights generally.
5. No consent, authorization, license or approval of, or
registration, filing, or declaration with, any governmental authority of
[jurisdiction] is required in connection with the execution, delivery and
performance of the Agreement by the Swap Counterparty.
6. The Agreement will constitute a valid and binding obligation of
the Swap Counterparty enforceable against the Swap Counterparty in accordance
with its terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium, or other laws affecting
the enforcement of creditors' rights generally or by general equity
principles; provided that the undersigned does not express any opinion as to
the binding affect of any provision of the Agreement that purports to make any
determination conclusive or conclusive absent manifest error unless such
determination is made reasonably and in good faith.
This opinion is solely for your benefit in connection with the
Agreement referenced above, and may not be relied on, nor copies hereof
delivered to any other person or entity without my prior written consent.
Sincerely yours,
EXHIBIT B CERTIFICATES OF INCUMBENCY
EXHIBIT C
[___________________________________] STUDENT LOAN TRUST [ ]
OFFICER'S CERTIFICATE
[ ] of [ ], a [ ] corporation (the "Corporation") and [ ] of the
Corporation, each hereby certify that, to the best of his or her knowledge,
after reasonable investigation:
(i) the representations and warranties of the Seller or the
Servicer, as the case may be, contained in the Trust Agreement, the Loan
Sale Agreement, the Administration Agreement, the Servicing Agreement and
the Swap Agreement, as applicable, are true and correct in all material
respects, that each of the Seller and the Servicer has complied with all
agreements and satisfied all conditions on its part to be performed or
satisfied under such agreements at or prior to the Closing Date, and
(ii) since [ ], except as may be disclosed in the Prospectus or
the Private Placement Memorandum, no material adverse change, or any
development involving a prospective material adverse change, in or
affecting particularly the business or properties of the Trust, the
Company, the Seller or the Servicer, as applicable, has occurred.
Capitalized terms used but not defined herein have the meanings
specified in Appendix A to the Administration Agreement dated as of [ ] among
[___________________________] Student Loan Trust [ ], the Corporation and [ ],
as indenture trustee.
IN WITNESS WHEREOF, each of the above-named authorized officers
hereunto signed his or her name.
Dated: [ ]
By: ____________________________
Name:
Title:
By: ____________________________
Name:
Title:
FORM OF CONFIRMATION
[ ]
[_______________________] STUDENT LOAN TRUST [ ]
[ ]
[ ]
[ ]
[ ]
Fax: [ ]
cc: [ ]
Attention: [ ]
From: ___________________________
Attention: _________
Phone: __________
Swap Transaction Ref. No. __________
The purpose of this communication is to set forth the terms and
conditions of the Swap Transaction or the Transaction (Swap Transaction and
Transaction are collectively referred to herein as "Transaction"), entered
into between [ ] ("Party A") and [_____________________] STUDENT LOAN TRUST [
] ("Party B") on the Trade Date specified below. This communication will
constitute, as applicable, a "Confirmation" as referred to in either the ISDA
Master Agreement or the master agreement entered into by the parties hereto
prior to or on the date hereof (the "Agreement").
The definitions and provisions contained in the 1991 ISDA
Definitions, as supplemented by the 1998 Supplement, (the "Definitions") as
published by the International Swaps and Derivatives Association, Inc.
("ISDA") are incorporated herein. In the event that Party A and Party B have
entered into an Agreement effective on or prior to the date hereof, this
Confirmation supplements, forms part of and is subject to such Agreement. In
the event that Party A and Party B have not entered into an Agreement, this
Transaction and all other Transactions between the parties hereto are subject
to the 1992 Master Agreement (Multicurrency--Cross Border) as published by
ISDA (the "ISDA Master Agreement") and the parties hereto agree to negotiate
in good faith and enter into an agreement in the form of the ISDA Master
Agreement with such modifications as set forth below and as the parties shall
in good faith agree. Upon execution and delivery of such an Agreement or an
Interest Rate and Currency Exchange Agreement (the "Exchange Agreement") (the
Exchange Agreement and the Agreement are collectively referred to as the "ISDA
Executed Master Agreement") the terms and conditions of the ISDA Master
Agreement will be superseded thereby and this Confirmation will supplement,
form a part of and be subject to the terms and conditions of the ISDA Executed
Master Agreement.
All provisions contained in either the ISDA Master Agreement or the
Agreement or the ISDA Executed Master Agreement (as the case may be), will
govern this Confirmation except as expressly modified below. In the event of
any inconsistency among or between the ISDA Master Agreement, the Agreement or
the ISDA Executed Master Agreement (as the case may be), the Definitions and
this Confirmation, this Confirmation will govern.
1. The terms of the particular Transaction to which this Confirmation
relates are as follows:
Notional Amount: USD [ ] with respect to the
Initial Calculation Period and,
for each Calculation Period
thereafter, the lesser of: (i) the
Outstanding Principal Amount for
such Calculation Period and (ii)
the Notional Amount specified for
the first day of such Calculation
Period in Exhibit A.
Where "Outstanding Principal
Amount" for any Calculation Period
means the aggregate principal
amount of the Notes as of the
Payment Date on which such
Calculation Period commences
(after giving effect to the
distribution on such date).
Trade Date: [ ]
Effective Date: [ ]
Termination Date: The earlier of: (i) the date on
which the outstanding principal
amount of the Notes is reduced to
zero (other than in connection
with a Redemption Event) and (ii)
[ ] subject to adjustment in
accordance with the Following
Business Day Convention.
Floating Rate Amounts I:
Floating Rate Payer I: Party B.
Floating Rate Payer I Each [ ], and [ ], commencing
Payment Dates: __-__-____, to and including the
Termination Date, subject to
adjustment in accordance with the
Following Business Day Convention.
Floating Rate Payer I From and including [ ]
Initial Calculation Period: to but excluding [ ].
Floating Rate Payer I To Be Determined.
Floating Rate for Initial
Calculation Period:
Floating Rate Payer I USD -TBILL - H.15; provided that
Floating Rate Option: the Definitions shall be amended:
(a) by substituting Telerate Page
56 for all references to H.15(519)
and (b) by striking the words
"U.S. Government
Securities/Treasury Bills/Auction
Average (Investment)" and
substituting therefor the words
"US Treasury 3MO T-▇▇▇▇ Auction
Results/Average Investment Yield".
Floating Rate Payer I Day Actual/365.
Count Fraction:
Floating Rate Payer 3 Months.
I Designated Maturity:
Floating Rate Payer Plus [no more than 0.80]%.
I Spread:
Floating Rate Payer Not applicable.
I Compounding:
Method of Averaging: Weighted Average.
Rate Cut-Off Days: 6 New York Banking Days prior to the
Floating Rate Payer I Payment Date.
Floating Rate Payer I Each New York Business Day.
Reset Dates:
Business Days: New York.
Floating Rate Payer I The Net Trust Swap Payment Carryover
Additional Floating Amount: Shortfall Amount, if any, on the
related Payment Date.
Floating Rate Amounts II:
Floating Rate Payer II: Party A.
Floating Rate Payer II Each [ ], and [ ], commencing
[ ], to and including Payment
Dates: the Termination Date,
subject to adjustment in
accordance with the Following
Business Day Convention.
On the [ ] Floating Rate Payer II
Payment Date, the Party A Payment
Amount shall be an amount equal to
the sum of the Floating Rate
Amounts II for: (i) the Floating
Rate Payer II Initial Calculation
Period and (ii) the Floating Rate
Payer II Calculation Period ending
on [ ].
Floating Rate Payer From and including [ ]
II Initial Calculation Period: to but excluding [ ].
Floating Rate Payer II [ ]%.
Floating Rate for Initial
Calculation Period:
Period End Dates: [ ] and each Floating Rate
Payer II Payment Date.
Floating Rate Payer II USD - LIBOR - BBA; provided that the
Floating Rate Option: Floating Rate shall be determined on
the day that is two New York and
London Banking Days prior to each
Reset Date.
Floating Rate Payer II Day Actual/360.
Count Fraction:
Floating Rate Payer II 3 Months.
Designated Maturity:
Floating Rate Payer None.
II Spread:
Floating Rate Payer Not Applicable.
II Compounding:
Floating Rate Payer The first day of each Calculation
II Reset Dates: Period.
Business Days: New York.
Floating Rate Payer The Net Trust Swap Receipt Carryover
II Additional Floating Shortfall Amount, if any, on the
Amount: related Payment Date.
2. Account Details:
Payments to Party A:
[ ]
[ ]
[ ]
ABA: [ ]
FAO: [ ]
Account No.: [ ]
Payments to Party B:
[ ]
[ ]
[ ]
ABA: [ ]
Clearing Account: [ ]
Credit Trust #: [ ]
Attn: [ ], ref: [_________________] STUDENT LOAN TRUST [ ]
3. OTHER TERMS:
(a) Each capitalized term used in this Confirmation and not defined
in this Confirmation or the Definitions shall have the meaning assigned in the
Agreement.
(b) In the event this Transaction terminates prior to the payment of
the entire Net Trust Swap Payment Carryover Shortfall or Net Trust Swap
Receipt Carryover Shortfall, such amount will remain due and payable and shall
be paid in accordance with the terms of the Indenture.
(c) Each party acknowledges and agrees that, except as provided
herein, the scheduled Notional Amount may not be adjusted without the prior
written consent of the other party. Party B represents, warrants and covenants
that so long as no Early Termination Date has occurred or been effectively
designated or any amounts remain due and payable to Party A in respect of this
Transaction, Party B will not enter into any swap transaction (other than this
Transaction) without the prior written consent of Party A.
(d) If either party proposes to amend this Transaction pursuant to
Section 6.03(e) of the Trust Agreement among [ ], as depositor, [ ] and [ ],
as eligible lender trustee, then the parties will negotiate in good faith and
reasonably regarding the terms, conditions and documentation relating to an
appropriate amendment to this Transaction and an appropriate amendment payment
relating thereto. The effectiveness of such amendment will be subject to the
conditions that: (i) the amendment payment, if any, is made by or to Party B
on the proposed effective date of such amendment and (ii) no Event of Default
or Termination Event has occurred and is continuing on such proposed effective
date. For avoidance of doubt, the parties acknowledge and agree that the
amendment payment, if any, will be a payment pursuant to Section 2 of this
Transaction for purposes of determining Net Trust Swap Payment or Net Trust
Swap Receipt, as applicable.
Please promptly confirm that the preceding correctly sets forth the
terms of our agreement by executing the copy of this Confirmation enclosed for
that purpose and returning it to us.
Yours sincerely,
By:____________________________
Name:
Title:
Confirmed as of the date first written:
[_________] STUDENT LOAN TRUST [ ]
By: [ ],
not in its individual capacity but
solely as Eligible Lender Trustee
By: ________________________________
Name:
Title:
EXHIBIT D
CALCULATION PERIOD
COMMENCEMENT DATE NOTIONAL AMOUNT
APPENDIX A TO THE
ADMINISTRATION AGREEMENT
DEFINITIONS AND USAGE
USAGE
The following rules of construction and usage shall be applicable to
any instrument that is governed by this Appendix:
(a) All terms defined in this Appendix shall have the defined
meanings when used in any instrument governed hereby and in any certificate or
other document made or delivered pursuant thereto unless otherwise defined
therein.
(b) As used herein, in any instrument governed hereby and in any
certificate or other document made or delivered pursuant thereto, accounting
terms not defined in this Appendix or in any such instrument, certificate or
other document, and accounting terms partly defined in this Appendix or in any
such instrument, certificate or other document to the extent not defined,
shall have the respective meanings given to them under generally accepted
accounting principles as in effect on the date of such instrument. To the
extent that the definitions of accounting terms in this Appendix or in any
such instrument, certificate or other document are inconsistent with the
meanings of such terms under generally accepted accounting principles, the
definitions contained in this Appendix or in any such instrument, certificate
or other document shall control.
(c) The words "hereof", "herein", "hereunder" and words of similar
import when used in an instrument refer to such instrument as a whole and not
to any particular provision or subdivision thereof; references in an
instrument to "Article", "Section" or another subdivision or to an attachment
are, unless the context otherwise requires, to an article, section or
subdivision of or an attachment to such instrument; and the term "including"
means "including without limitation".
(d) The definitions contained in this Appendix are equally
applicable to both the singular and plural forms of such terms and to the
masculine as well as to the feminine and neuter genders of such terms.
(e) Any agreement, instrument or statute defined or referred to
below or in any agreement or instrument that is governed by this Appendix
means such agreement or instrument or statute as from time to time amended,
modified or supplemented, including (in the case of agreements or instruments)
by waiver or consent and (in the case of statutes) by succession of comparable
successor statutes and includes (in the case of agreements or instruments)
references to all attachments thereto and instruments incorporated therein.
References to a Person are also to its permitted successors and assigns.
DEFINITIONS
"Act" has the meaning specified in Section 11.03(a) of the Indenture.
"Additional Fundings" means any withdrawals from the Collateral
Reinvestment Account for any of the purposes set forth in Section 2(f) of the
Administration Agreement.
"Additional Guarantor" means a Federal Guarantor (other than an
Initial Guarantor) of a Financed Student Loan (other than an Initial Financed
Student Loan) which has entered into a guarantee agreement with the Eligible
Lender Trustee.
"Add-On Consolidation Loan" means a Student Loan, the principal
balance of which is added to an existing Consolidation Loan within 210 days
from the date that the existing Consolidation Loan was made, as required by
the Higher Education Act.
"Add-On Consolidation Loan Funding Date" means each day, prior to the
end of the Add-on Period, on which the principal balance of an Add-on
Consolidation Loan is added to the principal balance of a Consolidation Loan
in the Trust pursuant to Section 6.07 of the Trust Agreement.
"Add-On Period" means the period starting on the Closing Date and
ending on the date that is 210 days from the date that the last Consolidation
Loan was originated by the Trust during the Revolving Period.
"Administration Agreement" means the Administration Agreement dated
as of [ ], among the Issuer, the Administrator and the Indenture Trustee.
"Administration Fee" means, with respect to each Monthly Payment
Date, an amount equal to one-twelfth of the product of: (i) 0.05% and (ii) the
Pool Balance as of the close of business on the last day of the calendar month
immediately preceding such Monthly Payment Date.
"Administrator" means [ ], a [ ] corporation, in its capacity as
administrator of the Issuer and the Financed Student Loans.
"Administrator Default" shall have the meaning set forth in Section
12 of the Administration Agreement.
"Administrator's Certificate" means an Officers' Certificate of the
Administrator delivered pursuant to Section 2(b)(ii) of the Administration
Agreement.
"Affiliate" means, with respect to any specified Person, any other
Person controlling or controlled by or under common control with such
specified Person. For the purposes of this definition, "control" when used
with respect to any specified Person means the power to direct the management
and policies of such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"[___________________________________]" means [ ], a Delaware
corporation.
"Assignment" means a duly executed assignment delivered pursuant to
Section 3.02 of the Loan Sale Agreement in the form set forth in Exhibit F to
such Agreement.
"Authorized Officer" means: (i) with respect to the Issuer, any
officer of the Eligible Lender Trustee who is authorized to act for the
Eligible Lender Trustee in matters relating to the Issuer pursuant to the
Basic Documents and who is identified on the list of Authorized Officers
delivered by the Eligible Lender Trustee to the Indenture Trustee on the
Closing Date (as such list may be modified or supplemented from time to time
thereafter) and (ii) with respect to the Seller, the Servicer and the
Administrator, any officer or other authorized representative of the Seller,
the Servicer or the Administrator, respectively, who is authorized to act for
the Seller, the Servicer or the Administrator, respectively, in matters
relating to itself or to the Issuer and to be acted upon by the Seller, the
Servicer or the Administrator, respectively, pursuant to the Basic Documents
and who is identified on the list of Authorized Officers delivered by the
Seller, the Servicer and the Administrator, respectively, to the Indenture
Trustee on the Closing Date (as such list may be modified or supplemented from
time to time thereafter).
"Available Funds" means, with respect to a Quarterly Payment Date and
the related Collection Period, the sum of: (1) the amounts specified in
clauses (i) through (vi) of the definition of Monthly Available Funds for each
of the three Monthly Collection Periods included in such Collection Period,
(2) any Trust Swap Receipt Amount and the remainder of any Termination Payment
received by the Trust with respect to such Quarterly Payment Date and (3) at
the end of the Revolving Period, the amount deposited from the Prefunding
Account to the Collection Account pursuant to Section 2(k)(iv) of the
Administration Agreement; provided, however, that if with respect to any
Quarterly Payment Date there would not be sufficient funds, after application
of the Available Funds (as defined above) and amounts available first from the
Prefunding Account and second from the Reserve Account, to pay any of the
items specified in clauses (v)(A) through (v)(C) of Section 2(d) of the
Administration Agreement, then the Available Funds for such Quarterly Payment
Date will include, in addition to the Available Funds (as defined above),
amounts on deposit in the Collection Account on the Determination Date
relating to such Quarterly Payment Date which would have constituted the
Available Funds for the Quarterly Payment Date succeeding such Quarterly
Payment Date up to the amount necessary to pay such items, and the Available
Funds for such succeeding Quarterly Payment Date will be adjusted accordingly;
and provided, further, that the Available Funds will exclude: (A) all payments
and proceeds (including Liquidation Proceeds) of any Financed Student Loans
the Purchase Amounts of which were included in the Available Funds for a prior
Collection Period; (B) except as expressly included in clause (iv) of the
definition of Monthly Available Funds, amounts released from the Collateral
Reinvestment Account; (C) any Monthly Rebate Fees paid during the related
Collection Period by or on behalf of the Trust; (D) any collections in respect
of principal on the Financed Student Loans applied by the Eligible Lender
Trustee on behalf of the Trust prior to the end of the Revolving Period to
make deposits to the Collateral Reinvestment Account pursuant to Section
2(d)(i) of the Administration Agreement and, after the end of the Revolving
Period, any expenditure of the Net Principal Cash Flow Amount used to fund the
addition of any Add-on Consolidation Loans, to purchase Serial Loans or to
fund the acquisition of Exchanged Serial Loans during the related Collection
Period; and (E) the Servicing Fee, all overdue Servicing Fees, the
Administration Fee and all overdue Administration Fees paid on each Monthly
Payment Date that is not a Quarterly Payment Date during the related
Collection Period.
"Basic Documents" means the Trust Agreement, the Indenture, the Loan
Sale Agreement, the Servicing Agreement, the Administration Agreement, the
Depository Agreement, the Guarantee Agreements, any Swap Agreement and other
documents and certificates delivered in connection with any thereof.
"Billing Account" means those combined loans of a Borrower with the
same lender and branch, which loans are in the same status, and are the same
loan type, and are guaranteed by the same Guarantor and which require the same
processing and billing requirements. ▇▇▇▇▇▇▇▇ Loans which are already in
repayment and being serviced by the Servicer will not be merged with new
▇▇▇▇▇▇▇▇ Loans for the same Borrower, and each such ▇▇▇▇▇▇▇▇ Loan will be
treated as a separate Billing Account.
"Book-Entry Note" means a beneficial interest in the Senior Notes and
the Subordinate Notes, ownership and transfers of which shall be made through
book entries by a Clearing Agency as described in Section 2.10 of the
Indenture.
"Borrower" means an individual who is the maker of a Borrower Note
and who obtains a Student Loan from an "eligible lender" in accordance with
the Higher Education Act and the policies and procedures of a Guarantor.
"Borrower Incentive Programs" means the incentive program of the
Administrator which provides that Borrowers of Federal Consolidation Loans
whose applications were received during the period from [ ] through [ ] and
make their first 48 payments on time may receive a [ ] per annum interest rate
reduction for the remaining term of their Consolidation Loan and if such
Borrowers use the [ ] auto-debit system to remit payments directly from their
bank accounts, such Borrowers may receive a [ ] per annum interest rate
reduction on their Student Loans, as such program may be modified from time to
time.
"Borrower Note" means a promissory note of a Borrower for a Student
Loan set forth on the appropriate form furnished by the Guarantor which
Borrower Note meets the criteria set forth by the Higher Education Act and the
policies and procedures of the Guarantor.
"Business Day" means any day other than: (i) a Saturday or a Sunday,
or (ii) a day on which banking institutions or trust companies in the States
of [ ] or in the city in which the Corporate Trust Office of the Indenture
Trustee is located are authorized or obligated by law, regulation or executive
order to remain closed.
"Business Trust Statute" means Chapter 38 of Title 12 of the Delaware
Code, 12 Del. Codess.3801 et seq., as the same may be amended from time to
time.
"Capitalized Interest Amount" means for any Monthly Collection Period
or other period of determination, the amount of interest that accrued on the
Financed Student Loans during such period but was not then payable and that
has been or will, pursuant to the terms of such Financed Student Loans, be
capitalized and added to the principal balances of such loans.
"Certificate Of Trust" means the Certificate of Trust in the form of
Exhibit A to the Trust Agreement to be filed for the Trust pursuant to Section
3810(a) of the Business Trust Statute.
"Choice Rates(TM) Program" means the Incentive Program of the
Administrator which provides that Borrowers of ▇▇▇▇▇▇▇▇ Loans whose loans were
disbursed on or after [ ] and who make their first 48 payments on time receive
a [ ] per annum interest rate reduction for the remaining term of their
Student Loan, as such program may be modified from time to time.
"Choice Repay(TM) Program" means the Incentive Program of the
Administrator which provides for Borrowers of ▇▇▇▇▇▇▇▇ Loans whose loans were
disbursed on or after [ ] and who use the [ ] auto-debit system to remit
payments directly from their bank accounts to receive a [ ] per annum interest
rate reduction on their Student Loans, as such program may be modified (with
notice to the Rating Agencies) after the Cutoff Date, other than as it may be
modified to increase such interest rate reduction.
"Class A-1 Note" means a Class A-1 Floating Rate Asset- Backed Senior
Note issued pursuant to the Indenture, substantially in the form of Exhibit
A-1 thereto.
"Class A-1 Note Final Maturity Date" means the [ ] Quarterly Payment
Date.
"Class A-1 Note Pool Factor" as of the close of business on a
Quarterly Payment Date means a seven-digit decimal figure equal to the
outstanding principal amount of the Class A-1 Notes divided by the original
outstanding principal amount of the Class A-1 Notes. The Class A-1 Note Pool
Factor will be 1.0000000 as of the Closing Date; thereafter, the Class A-1
Note Pool Factor will decline to reflect reductions in the outstanding
principal amount of the Class A-1 Notes.
"Class A-1 Note Rate" means, with respect to any Quarterly Interest
Period, the interest rate per annum (computed on the basis of the actual
number of days in such Quarterly Interest Period over a year of 360 days)
equal to Three-Month LIBOR for the related LIBOR Reset Period plus 0.08%.
"Class A-1 Noteholder" means the Noteholder of a Class A-1 Note.
"Class A-1 Noteholders' Interest Carryover Shortfall" means, with
respect to any Quarterly Payment Date, the excess of: (i) the Class A-1
Noteholders' Interest Distribution Amount on the preceding Quarterly Payment
Date over (ii) the amount of interest actually distributed to the Class A-1
Noteholders on such preceding Quarterly Payment Date, plus interest on the
amount of such excess, to the extent permitted by law, at the then current
Class A-1 Note Rate from such preceding Quarterly Payment Date to the current
Quarterly Payment Date.
"Class A-1 Noteholders' Interest Distribution Amount" means, with
respect to any Quarterly Payment Date, the sum of: (i) the amount of interest
accrued at the Class A-1 Note Rate for the related Quarterly Interest Period
on the outstanding principal balance of the Class A-1 Notes on the immediately
preceding Quarterly Payment Date (after giving effect to all principal
distributions to holders of Class A-1 Notes on such date) or, in the case of
first Quarterly Payment Date, on the Closing Date and (ii) the Class A-1
Noteholders' Interest Carryover Shortfall for such Quarterly Payment Date.
"Class A-2 Note" means a Class A-2 Floating Rate Asset- Backed Senior
Note issued pursuant to the Indenture, substantially in the form of Exhibit
A-2 thereto.
"Class A-2 Note Final Maturity Date" means the [ ] Quarterly Payment
Date.
"Class A-2 Note Pool Factor" as of the close of business on a
Quarterly Payment Date means a seven-digit decimal figure equal to the
outstanding principal amount of the Class A-2 Notes divided by the original
outstanding principal amount of the Class A-2 Notes. The Class A-2 Note Pool
Factor will be 1.0000000 as of the Closing Date; thereafter, the Class A-2
Note Pool Factor will decline to reflect reductions in the outstanding
principal balance of the Class A-2 Notes.
"Class A-2 Note Rate" means, with respect to any Quarterly Payment
Date and the related Quarterly Interest Period, the interest rate per annum
(computed on the basis of the actual number of days in such Quarterly Interest
Period over a year of 360 days) equal to Three-Month LIBOR for the related
LIBOR Reset Period plus 0.20%.
"Class A-2 Noteholder" means the Noteholder of a Class A-2 Note.
"Class A-2 Noteholders' Interest Carryover Shortfall" means, with
respect to any Quarterly Payment Date, the excess of: (i) the Class A-2
Noteholders' Interest Distribution Amount on the preceding Quarterly Payment
Date over (ii) the amount of interest actually distributed to the Class A-2
Noteholders on such preceding Quarterly Payment Date, plus interest on the
amount of such excess, to the extent permitted by law at the then current
Class A-2 Note Rate from such preceding Quarterly Payment Date to the current
Quarterly Payment Date.
"Class A-2 Noteholders' Interest Distribution Amount" means, with
respect to any Quarterly Payment Date, the sum of: (i) the amount of interest
accrued at the Class A-2 Note Rate for the related Quarterly Interest Period
on the aggregate principal amount of the Class A-2 Notes outstanding on the
immediately preceding Quarterly Payment Date (after giving effect to all
principal distributions to holders of Class A-2 Notes on such date) or, in the
case of the first Quarterly Payment Date, on the Closing Date and (ii) the
Class A-2 Noteholders' Interest Carryover Shortfall for such Quarterly Payment
Date;
"Clearing Agency" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with
the Clearing Agency.
"Closing Date" means [ ].
"Code" means the Internal Revenue Code of 1986, as amended from time
to time, and Treasury Regulations promulgated thereunder.
"Collateral" has the meaning specified in the Granting Clause of the
Indenture.
"Collateral Reinvestment Account" means the account designated as
such, established and maintained pursuant to Section 2(c) of the
Administration Agreement, which shall be an Eligible Deposit Account.
"Collateral Reinvestment Account Trigger" will be triggered with
respect to any Monthly Collection Period during the Revolving Period if: (a)
(1) Three-Month LIBOR for the related LIBOR Reset Period exceeds (2) the
greater of the T-▇▇▇▇ Rate for the preceding calendar month and (b) the 91-Day
Treasury ▇▇▇▇ rate in effect for the variable rate Student Loans effective as
of the preceding [ ], is more than [ ]; provided that the Collateral
Reinvestment Account Trigger may be modified for any reason (including as a
result of the Trust entering into one or more Swap Agreements) upon
satisfaction of the Rating Agency Condition.
"Collection Account" means the account designated as such,
established and maintained pursuant to Section 2(c) of the Administration
Agreement, which shall be an Eligible Deposit Account.
"Collection Account Closing Date Deposit" means [ ].
"Collection Period" means, with respect to the first Quarterly
Payment Date, the period beginning on the Cutoff Date and ending on [ ], and
with respect to each subsequent Quarterly Payment Date, the Collection Period
means the three calendar months immediately following the end of the previous
Collection Period.
"Commission" means the Securities and Exchange Commission.
"Company" means [ ].
"Consolidation Fee" means any Federal Origination Fee, Monthly Rebate
Fee or similar fee payable to the Department relating to the origination or
ownership of Consolidation Loans.
"Consolidation Loan" means a Student Loan made pursuant to the Higher
Education Act to consolidate the Borrower's obligations under various
federally authorized student loan programs into a single loan, as supplemented
by the addition of any related Add-on Consolidation Loans.
"Corporate Trust Office" means: (i) with respect to the Indenture
Trustee, the principal office of the Indenture Trustee at which at any
particular time its corporate trust business shall be administered, which
office at the Closing Date is located at [ ], Attention: [ ] or at such other
address as the Indenture Trustee may designate from time to time by notice to
the Noteholders and the Seller, or the principal corporate trust office of any
successor Indenture Trustee (the address of which the successor Indenture
Trustee will notify the Noteholders and the Seller) and (ii) with respect to
the Eligible Lender Trustee, the principal corporate trust office of the
Eligible Lender Trustee located at [ ] Attention: [ ] or at such other address
as the Eligible Lender Trustee may designate by notice to the Seller or the
principal corporate trust office of any successor Eligible Lender Trustee (the
address of which the successor Eligible Lender Trustee will notify the Seller.
"Custodian" means [ ], in its capacity as custodian of the Borrower
Notes or any permitted successor Custodian.
"Cutoff Date" means [ ].
"Default" means any occurrence that is, or with notice or the lapse
of time or both would become, an Event of Default.
"Deferral" means the period defined by the Higher Education Act and
the policies of the related Guarantor during which a Borrower (in Repayment)
is entitled to postpone making payments upon the submission of appropriate
documentation.
"Deferral Loan" means a Student Loan during a period of Deferral.
"Definitive Notes" has the meaning specified in Section 2.10 of the
Indenture.
"Delaware Trust" has the meaning specified in Section 10.01 of the
Trust Agreement.
"Delaware Trustee" has the meaning set forth in Section 10.01 of the
Trust Agreement.
"Deleted Student Loan" has the meaning specified in Section 3.02 of
the Loan Sale Agreement.
"Delinquency Percentage" means, as of any date of determination, the
percentage equivalent of a fraction the numerator of which is the aggregate
principal balances of the Financed Student Loans which are Repayment Loans and
which either: (a) are over 210 days delinquent or (b) have had claims filed
with the Department for which payment is still awaited, and the denominator of
which is the aggregate principal balance of the Financed Student Loans which
are Repayment Loans.
"Delivery" when used with respect to Trust Account Property means:
(a) with respect to bankers' acceptances, commercial paper,
negotiable certificates of deposit and other obligations that constitute
instruments and are susceptible of physical delivery ("Physical Property"),
transfer of possession thereof to the Indenture Trustee, endorsed to, or
registered in the name of, the Indenture Trustee or its nominee or endorsed in
blank;
(b) with respect to a certificated security:
(i) delivery thereof in bearer form to the Indenture Trustee; or
(ii) delivery thereof in registered form to the Indenture Trustee
and
(A) the certificate is endorsed to the Indenture Trustee or
in blank by effective endorsement; or
(B) the certificate is registered in the name of the
Indenture Trustee, upon original issue or registration of transfer
by the issuer;
(c) with respect to an uncertificated security:
(i) the delivery of the uncertificated security to the Indenture
Trustee; or
(ii) the issuer has agreed that it will comply with instructions
originated by the Indenture Trustee without further consent by the
registered owner;
(d) with respect to any security issued by the U.S. Treasury, the
Federal Home Loan Mortgage Corporation or by the Federal National Mortgage
Association that is a book-entry security held through the Federal Reserve
System pursuant to Federal book-entry regulations:
(i) a Federal Reserve Bank by book entry credits the book-entry
security to the securities account (as defined in 31 CFR Part 357) of a
participant (as defined in 31 CFR Part 357) which is also a securities
intermediary; and
(ii) the participant indicates by book entry that the book-entry
security has been credited to the Indenture Trustee's securities account;
(e) with respect to a security entitlement:
(i) the Indenture Trustee becomes the entitlement holder; or
(ii) the securities intermediary has agreed that it will comply
with entitlement orders originated by the Indenture Trustee
(f) without further consent by the entitlement holder; for the
purpose of clauses (b) and (c) hereof "delivery" means:
(i) with respect to a certificated security:
(A) the Indenture Trustee acquires possession thereof;
(B) another person (other than a securities intermediary)
either acquires possession thereof on behalf of the Indenture
Trustee or, having previously acquired possession thereof,
acknowledges that it holds for the Indenture Trustee; or
(C) a securities intermediary acting on behalf of the
Indenture Trustee acquires possession of thereof, only if the
certificate is in registered form and has been specially endorsed
to the Indenture Trustee by an effective endorsement;
(ii) with respect to an uncertificated security:
(A) the issuer registers the Indenture Trustee as the
registered owner, upon original issue or registration of transfer;
or
(B) another person (other than a securities intermediary)
either becomes the registered owner thereof on behalf of the
Indenture Trustee or, having previously become the registered
owner, acknowledges that it holds for the Indenture Trustee;
(g) for purposes of this definition, except as otherwise
indicated, the following terms shall have the meaning assigned to each such
term in the UCC:
(i) "certificated security"
(ii) "effective endorsement"
(iii) "entitlement holder"
(iv) "instrument"
(v) "securities account"
(vi) "securities entitlement"
(vii) "securities intermediary"
(viii) "uncertificated security"
(h) in each case of Delivery contemplated herein, the Indenture
Trustee shall make appropriate notations on its records, and shall cause same
to be made of the records of its nominees, indicating that securities are held
in trust pursuant to and as provided in this Agreement.
"Department" means the United States Department of Education, an
agency of the Federal government.
"Depositor" means the Seller in its capacity as Depositor under the
Trust Agreement.
"Depository Agreement" means, the agreement with respect to the Notes
attached to the Indenture as Exhibit B.
"Determination Date" means, with respect to any Monthly Payment Date,
the third Business Day preceding such Monthly Payment Date.
"Early Amortization Event" means any of the following events:
(i) an Event of Default occurring under the Indenture, a
Servicer Default occurring under the Servicing Agreement or an
Administrator Default occurring under the Administration Agreement;
(ii) an Insolvency Event occurring with respect to the Seller;
(iii) the Issuer becoming subject to registration as an
investment company under the Investment Company Act of 1940, as amended;
(iv) as of the end of any Collection Period, the percentage (by
principal balance) of Financed Student Loans the Borrowers of which use
such loans to attend schools identified by the related Guarantor as
proprietary or vocational exceeds 35.00% of the Pool Balance; (v) as of
the end of any Collection Period, the percentage (by principal balance)
of Financed Student Loans which are not in repayment and are not eligible
for Interest Subsidy Payments exceed 50.00% of the Pool Balance; or
(vi) the Excess Spread, with respect to each of any two
successive Quarterly Payment Dates, is less than 0.50%, or
(vii) the arithmetic average of the Delinquency Percentage as of
the end of each of two successive Collection Periods exceeds 20.00%.
"Educational Institution" means any institution of higher education
that participates in the guaranteed loan programs authorized by Title IV of
the Higher Education Act and which is deemed eligible by a Guarantor to
participate in such Guarantor's program.
"Eligible Deposit Account" means either: (a) a segregated account
with an Eligible Institution or (b) a segregated trust account with the
corporate trust department of a depository institution organized under the
laws of the United States of America or any one of the States (or any domestic
branch of a foreign bank), having corporate trust powers and acting as trustee
for funds deposited in such account, so long as any of the securities of such
depository institution have a credit rating from each Rating Agency in one of
its generic rating categories which signifies investment grade.
"Eligible Institution" means a depository institution organized under
the laws of the United States of America or any one of the States (or any
domestic branch of a foreign bank), which: (i) has: (A) either a long-term
senior unsecured debt rating of "AAA" by S&P and if rated by Fitch, "AAA" by
Fitch or a short-term senior unsecured debt or certificate of deposit rating
of "A-1+" by S&P and if rated by Fitch, "F-1+" by Fitch and (B)(1) a long-term
senior unsecured debt rating of "A1" or better and (2) a short-term senior
unsecured debt rating of "P-1" by ▇▇▇▇▇'▇, or any other long-term, short-term
or certificate of deposit rating acceptable to the Rating Agencies and (ii)
whose deposits are insured by the FDIC. If so qualified, the Eligible Lender
Trustee or the Indenture Trustee may be considered an Eligible Institution.
"Eligible Investments" means book-entry securities, negotiable
instruments or securities represented by instruments in bearer or registered
form which evidence:
(a) direct obligations of, and obligations fully guaranteed as to
timely payment by, the United States of America;
(b) demand deposits, time deposits or certificates of deposit of
any depository institution or trust company incorporated under the laws of the
United States of America or any State (or any domestic branch of a foreign
bank) and subject to supervision and examination by federal or state banking
or depository institution authorities (including depository receipts issued by
any such institution or trust company as custodian with respect to any
obligation referred to in clause (a) above or portion of such obligation for
the benefit of the holders of such depository receipts); provided, however,
that at the time of the investment or contractual commitment to invest therein
(which shall be deemed to be made again each time funds are reinvested
following each Quarterly Payment Date), the commercial paper or other
short-term senior unsecured debt obligations (other than such obligations the
rating of which is based on the credit of a Person other than such depository
institution or trust company) thereof shall have a credit rating from each of
the Rating Agencies in the highest investment category granted thereby;
(c) commercial paper having, at the time of the investment or
contractual commitment to invest therein, a rating from each of the Rating
Agencies in the highest investment category granted thereby;
(d) investments in money market funds having a rating from each of
the Rating Agencies in the highest investment category granted thereby
(including funds for which the Indenture Trustee, the Servicer or the Eligible
Lender Trustee or any of their respective Affiliates is investment manager or
advisor);
(e) bankers' acceptances issued by any depository institution or
trust company referred to in clause (b) above;
(f) repurchase obligations with respect to any security that is a
direct obligation of, or fully guaranteed by, the United States of America or
any agency or instrumentality thereof the obligations of which are backed by
the full faith and credit of the United States of America, in either case
entered into with a depository institution or trust company (acting as
principal) described in clause (b) above;
(g) any other investment permitted by each of the Rating Agencies
as set forth in a writing delivered to the Indenture Trustee.
No obligation will be considered to be rated in the highest
investment category if it has an "r" highlighter affixed to its rating.
Fitch shall be considered to be a "Rating Agency" for the purpose of
assessing the eligibility hereunder of any investment pursuant to clause (b),
(c), (d), (e), and (f) only if Fitch is providing a rating which can be used,
pursuant to the terms of the applicable clause, to assess such investment.
"Eligible Lender Trustee" means [ ], National Association, a national
banking association, not in its individual capacity but solely as Eligible
Lender Trustee under the Trust Agreement.
"Event Of Default" has the meaning specified in Section 5.01 of the
Indenture.
"Excess Spread" means, with respect to any Quarterly Payment Date,
the percentage equivalent of a fraction the numerator of which is the product
of (a) four and (b) the difference between: (x) the sum of: (i) the Expected
Interest Collections for such Quarterly Payment Date and (ii) the Trust Swap
Receipt Amounts, if any, for such Quarterly Payment Date and (y) the sum of:
(i) the Servicing Fee for such Quarterly Payment Date and all prior unpaid
Servicing Fees, (ii) the Administration Fee for such Quarterly Payment Date
and all prior unpaid Administration Fees, (iii) the Senior Noteholders'
Interest Distribution Amount for such Quarterly Payment Date and the Trust
Swap Payment Amounts, if any, for such Quarterly Payment Date, and (iv) the
Subordinate Noteholders' Interest Distribution Amount for such Quarterly
Payment Date, and the denominator of which is the average of the amount of the
Pool Balance calculated as of the first and the last day of the related
Collection Period.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchanged Serial Loan" means a Serial Loan owned by the Seller to be
exchanged into the Trust for an Exchanged Student Loan.
"Exchanged Student Loan" means a Financed Student Loan that: (i) was
originated under the same loan program and is guaranteed by a Guarantor and
entitles the holder thereof to receive interest based on the same interest
rate index as the Serial Loan for which it is to be exchanged (an "Exchanged
Serial Loan") and (ii) will not, at any level of such interest rate index,
have an interest rate that is greater than that of the Exchanged Serial Loan.
"Executive Officer" means, with respect to any corporation, the Chief
Executive Officer, Chief Operating Officer, Chief Financial Officer,
President, any Executive Vice President, any Senior Vice President, any Vice
President, the Secretary or the Treasurer of such corporation; and with
respect to any partnership, any general partner thereof.
"Expected Interest Collections" means, with respect to any Quarterly
Interest Period, the sum of: (i) the amount of interest accrued, net of
accrued Monthly Rebate Fees and other amounts required by the Higher Education
Act to be paid to the Department, with respect to the Financed Student Loans
for the related Student Loan Rate Accrual Period (whether or not such interest
is actually paid), (ii) all Interest Subsidy Payments and Special Allowance
Payments estimated to have accrued for such Student Loan Rate Accrual Period
whether or not actually received (taking into account any expected deduction
therefrom of Federal Origination Fees) and (iii) Investment Earnings for such
Student Loan Rate Accrual Period.
"Expenses" means any and all liabilities, obligations, losses,
damages, taxes, claims, actions and suits, and any and all reasonable costs,
expenses and disbursements (including reasonable legal fees and expenses) of
any kind and nature whatsoever which may at any time be imposed on, incurred
by, or asserted against the Eligible Lender Trustee or any of its officers,
directors or agents in any way relating to or arising out of the Trust
Agreement, the other Basic Documents, the Trust Estate, the administration of
the Trust Estate or the action or inaction of the Eligible Lender Trustee
under the Trust Agreement or the other Basic Documents.
"FDIC" means the Federal Deposit Insurance Corporation.
"Federal Guarantor" means a state or private non-profit guarantor
that guarantees the payment of principal of and interest on any of the
Financed Student Loans, which agency is reinsured by the Department under the
Higher Education Act for between: (x) 80% and 100% of the amount of default
claims paid by such Federal Guarantor for a given federal fiscal year for
loans disbursed prior to [ ], for 78% to 98% of default claims paid for loans
disbursed on or after [ ] but prior to [ ] any (y) 75% to 95% of the amount of
default claims paid to by such Federal Guarantor for a given federal fiscal
year for loans disbursed on or after [ ] and for 100% of death, disability,
bankruptcy, closed school and false certification claims paid.
"Federal Origination Fee" means, with respect to each Consolidation
Loan that is originated by the Eligible Lender Trustee on behalf of the Issuer
and each Add-on Consolidation Loan that is added to the principal balance of a
Consolidation Loan, the origination fee payable to the Department equal to
0.5% of the initial principal balance of such Consolidation Loan or Add-on
Consolidation Loan.
"Financed Student Loans" means those Student Loans that, as of any
date of determination, have been conveyed to the Issuer, consisting of the
Initial Financed Student Loans as of the Closing Date and, thereafter, any
Prefunded Loans, Serial Loans or New Loans conveyed to the Issuer from the
Seller, any Consolidation Loans originated by the Trust as provided in Section
6.07 of the Trust Agreement, any Consolidation Loans the principal balance of
which is increased by the principal balance of any related Add-on
Consolidation Loan as provided in Section 6.07 of the Trust Agreement and any
Qualified Substitute Student Loans conveyed to the Issuer as provided in
Section 3.02 of the Loan Sale Agreement.
"Fitch" means Fitch, Inc. or any successor thereto.
"Forbearance Loan" means a Student Loan during a period of
forbearance of loan collections pursuant to the Higher Education Act.
"Grace" means the initial period following reduction by the student
Borrower to less than the minimum course load required by the Higher Education
Act, during which the student Borrower is not required to make payments on the
principal amount of the Borrower Note(s).
"Grace Loan" means a Student Loan during a period of Grace.
"Grant" means mortgage, pledge, bargain, sell, warrant, alienate,
remise, release, convey, assign, transfer, create, and ▇▇▇▇▇ ▇ ▇▇▇▇ upon and a
security interest in and right of set-off against, deposit, set over and
confirm pursuant to the Indenture. A Grant of the Collateral or of any other
agreement or instrument shall include all rights, powers and options (but none
of the obligations) of the Granting party thereunder, including the immediate
and continuing right to claim for, collect, receive and give receipt for
principal and interest payments in respect of the Collateral and all other
moneys payable thereunder, to give and receive notices and other
communications, to make waivers or other agreements, to exercise all rights
and options, to bring Proceedings in the name of the Granting party or
otherwise and generally to do and receive anything that the Granting party is
or may be entitled to do or receive thereunder or with respect thereto.
"Guarantee Agreement" means each agreement to guarantee Student Loans
entered into by the Eligible Lender Trustee on behalf of the Trust with a
Guarantor.
"Guarantee Payment" means any payment made by a Guarantor pursuant to
a Guarantee Agreement in respect of a Student Loan.
"Guarantor" means the Initial Guarantors and any Additional Guarantors.
"Higher Education Act" means the Higher Education Act of 1965, as
amended, together with any rules, regulations and interpretations thereunder.
"Incentive Financed Student Loan" means a Financed Student Loan which
is subject to an Incentive Program other than the Seller's Choice Repay(TM)
Program.
"Incentive Interest Deposit" means, with respect to each Monthly
Collection Period and Collection Period and each Incentive Financed Student
Loan, the difference, if any, between the amount of interest or other amounts
which would have been payable with respect to such Incentive Financed Student
Loan during such Monthly Collection Period or Collection Period, as
applicable, had no Incentive Program been in effect with respect to such
Incentive Financed Student Loan and the amount of interest and other amounts
which were payable with respect to such Incentive Financed Student Loan during
such Monthly Collection Period or Collection Period, as applicable, after
giving effect to such Incentive Program.
"Incentive Program" means any program terminable at will by the
Administrator pursuant to which the Administrator may choose to reduce the
interest rate or offer any other benefit on a Student Loan, and shall
initially include the Seller's Choice Rates(TM) and Choice Repay(TM) Programs
and the Borrower Incentive Program, as such program may be modified from time
to time.
"Indenture" means the Indenture dated as of [ ], between the Issuer
and the Indenture Trustee.
"Indenture Trust Estate" means all money, instruments, rights and
other property that are subject or intended to be subject to the lien and
security interest of the Indenture for the benefit of the Noteholders
(including all property and interests Granted to the Indenture Trustee),
including all proceeds thereof.
"Indenture Trustee" means [ ], a [ ] corporation, not in its
individual capacity but solely as Indenture Trustee under the Indenture.
"Independent" means, when used with respect to any specified Person,
that the Person: (a) is in fact independent of the Issuer, any other obligor
upon the Notes, the Seller and any Affiliate of any of the foregoing Persons,
(b) does not have any direct financial interest or any material indirect
financial interest in the Issuer, any such other obligor, the Seller or any
Affiliate of any of the foregoing Persons and (c) is not connected with the
Issuer, any such other obligor, the Seller or any Affiliate of any of the
foregoing Persons as an officer, employee, promoter, underwriter, trustee,
partner, director or person performing similar functions.
"Independent Certificate" means a certificate or opinion to be
delivered to the Indenture Trustee under the circumstances described in, and
otherwise complying with, the applicable requirements of Section 11.01 of the
Indenture, made by an Independent appraiser or other expert appointed by an
Issuer Order and approved by the Indenture Trustee in the exercise of
reasonable care, and such opinion or certificate shall state that the signer
has read the definition of "Independent" in the Indenture and that the signer
is Independent within the meaning thereof.
"Initial Financed Student Loans" means those Financed Student Loans
conveyed to the Issuer on the Closing Date and listed on the Schedule of
Student Loans on such date.
"Initial Guarantors" means [ ], a [ ] corporation, and its successors
and certain other Federal Guarantors.
"Initial Pool Balance" means [ ].
"In-School Loan" means a Student Loan during the period, excluding
periods of in-school Deferral, during which a student Borrower is enrolled at
an Educational Institution for at least the minimum course load required to
maintain such student Borrower's eligibility to borrow under the education
loan programs administered by the Guarantor.
"Insolvency Event" means, with respect to a specified Person: (a) the
filing of a decree or order for relief by a court having jurisdiction in the
premises in respect of such Person or any substantial part of its property in
an involuntary case under any applicable federal or State bankruptcy,
insolvency or other similar law now or hereafter in effect, or appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official for such Person or for any substantial part of its property, or
ordering the winding-up or liquidation of such Person's affairs, and such
decree or order shall remain unstayed and in effect for a period of sixty
consecutive days; or (b) the commencement by such Person of a voluntary case
under any applicable federal or State bankruptcy, insolvency or other similar
law now or hereafter in effect, or the consent by such Person to the entry of
an order for relief in an involuntary case under any such law, or the consent
by such Person to the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official for
such Person or for any substantial part of its property, or the making by such
Person of any general assignment for the benefit of creditors, or the failure
by such Person generally to pay its debts as such debts become due, or the
taking of action by such Person in furtherance of any of the foregoing.
"Interest Subsidy Payments" means payments, designated as such,
consisting of interest subsidies by the Department in respect of the Financed
Student Loans to the Eligible Lender Trustee on behalf of the Trust in
accordance with the Higher Education Act.
"Investment Earnings" means, with respect to any Monthly Payment
Date, the investment earnings (net of losses and investment expenses) on
amounts on deposit in the Trust Accounts to be deposited into the Collection
Account on or prior to such Monthly Payment Date or Quarterly Payment Date, as
applicable, pursuant to Section 2(c)(v) of the Administration Agreement.
"Issuer" means [___________________________________] Student Loan
Trust [ ] until a successor replaces it and, thereafter, means the successor
and, for purposes of any provision contained in the Indenture and required by
the TIA, each other obligor on the Notes.
"Issuer Order" and "Issuer Request" means a written order or request
signed in the name of the Issuer by any one of its Authorized Officers and
delivered to the Indenture Trustee.
"LIBOR Determination Date" means: (a) with respect to any Quarterly
Interest Period, other than the initial Quarterly Interest Period, the day
that is the second business day prior to the commencement of the LIBOR Reset
Period within such Quarterly Interest Period (or, in the case of the initial
LIBOR Reset Period, on the second business day prior to the Closing Date) and
(b) with respect to the initial Quarterly Interest Period, as determined
pursuant to clause (a) for the period from the Closing Date to but excluding [
] and as determined on the second Business Day prior to [ ] for the period
from [ ] to but excluding [ ]. For purposes of this definition, a business day
is any day in which banks in the City of London and The City of New York are
open for the transaction of international business.
"LIBOR Reset Period" means the three-month period commencing on the
twenty-eighth day (or, if any such day is not a Business Day, on the next
succeeding Business Day) of each January, April, July and October and ending
on the day immediately preceding the following LIBOR Reset Period; provided,
however, that the initial LIBOR Reset Period will commence on the Closing
Date.
"Lien" means a security interest, lien, charge, pledge, equity or
encumbrance of any kind, other than tax liens and any other liens, if any,
which attach to the respective Student Loan by operation of law as a result of
any act or omission by the related Obligor.
"Liquidated Student Loan" means any defaulted Financed Student Loan
liquidated by the Servicer or which the Servicer has, after using all
reasonable efforts to realize upon the such Student Loan, determined to charge
off.
"Liquidation Proceeds" means, with respect to any Liquidated Student
Loan, the moneys collected in respect thereof from whatever source, other than
Recoveries, net of the sum of any reasonable out-of-pocket expenses incurred
by the Servicer in connection with such liquidation and any amounts required
by law to be remitted to the Borrower on such Liquidated Student Loan.
"Loan Purchase Amount" means with respect to a Prefunded Loan, a New
Loan or a Serial Loan to be purchased from the Seller by the Issuer, an amount
equal to the sum of: (i) the Purchase Collateral Balance and (ii) the Purchase
Premium Amount; provided, however, that after the Revolving Period, the
Purchase Premium Amount payable in respect of the purchase of a Serial Loan
will be payable on the next succeeding Quarterly Payment Date from Reserve
Account Excess, if any, for such Quarterly Payment Date in accordance with
Section 2.02(c) of the Loan Sale Agreement; and provided, further, that if the
Parity Date occurs before the end of the Revolving Period, then, from the
Parity Date to the end of the Revolving Period, the Purchase Premium Amount
payable in respect of the purchase of a Serial Loan or a New Loan will be
payable on the next succeeding Quarterly Payment Date from Reserve Account
Excess, if any, for such Quarterly Payment Date that is available after all
distributions from such excess having a higher priority than payment of such
Purchase Premium Amounts have been made in accordance with Section 2(e) of the
Administration Agreement; provided, however, that the Loan Purchase Amount for
any Exchanged Serial Loan shall not include any Purchase Premium Amount.
"Loan Sale Agreement" means the Loan Sale Agreement dated as of [ ],
among the Issuer, [ ], the Seller, and the Eligible Lender Trustee.
"Loan Services" means [ ], [ ] corporation.
"Minimum Purchase Price" means, as to any Quarterly Payment Date, an
amount equal to the greater of: (i) the aggregate Purchase Amounts of the
Financed Student Loans as of the end of the Collection Period immediately
preceding such Quarterly Payment Date and (ii) an amount that would be
sufficient to: (A) reduce the outstanding principal amount of the Notes then
outstanding on such Quarterly Payment Date to zero, (B) pay to the Noteholders
the Noteholders' Interest Distribution Amount payable on such Quarterly
Payment Date (without giving effect to the Subordinate Note Trigger), (C) pay
to any Swap Counterparties all amounts owed by the Trust to any Swap
Counterparties under the Swap Agreements, and (D) pay to the Servicer and the
Administrator all amounts owed to such entities under any of the Basic
Documents.
"Monthly Available Funds" means, with respect to each Monthly Payment
Date that is not a Quarterly Payment Date, the sum of the following amounts
with respect to the related Monthly Collection Period: (i) all collections
received by the Servicer on the Financed Student Loans during such Collection
Period (net, for the first Collection Period, of interest accrued prior to the
Cut-off Date that is not to be capitalized) and remitted to the Indenture
Trustee (including any Guarantee Payments received with respect to the
Financed Student Loans); (ii) any Interest Subsidy Payments and Special
Allowance Payments received by the Eligible Lender Trustee during such Monthly
Collection Period with respect to the Financed Student Loans; (iii) all
Liquidation Proceeds from any Financed Student Loans which became Liquidated
Student Loans during such Monthly Collection Period in accordance with the
Servicer's customary servicing procedures, and all Recoveries in respect of
Liquidated Student Loans which were written off in prior Monthly Collection
Periods, in each case which have been received by the Servicer and remitted to
the Indenture Trustee; (iv) that portion of the amounts released from the
Collateral Reinvestment Account and the Prefunding Account with respect to
Additional Fundings relating to those interest costs on the Financed Student
Loans which are or will be capitalized and any amounts transferred on a
Determination Date from the Collateral Reinvestment Account to the Collection
Account pursuant to Section 2(f)(i)(E) of the Administration Agreement; (v)
the aggregate Purchase Amounts received by the Indenture Trustee for those
Financed Student Loans repurchased by the Seller or purchased by the Servicer
under an obligation which arose during the related Monthly Collection Period;
(vi) Investment Earnings for such Monthly Payment Date; and (vii) with respect
to each Monthly Payment Date other than a Quarterly Payment Date and other
than an Monthly Payment Date immediately succeeding a Quarterly Payment Date,
the Monthly Available Funds remaining from the Monthly Collection Period
relating to the preceding Monthly Payment Date after giving effect to the
application of such Monthly Available Funds on such preceding Monthly Payment
Date; provided, however, that if with respect to any Monthly Payment Date
there would not be sufficient funds, after application of the Monthly
Available Funds (as defined above) and amounts available from the Prefunding
Account and from the Reserve Account, to pay any of the items specified in
Section 2(d)(iv) of the Administration Agreement, then the Monthly Available
Funds for such Monthly Payment Date will include, in addition to the Monthly
Available Funds (as defined above), amounts on deposit in the Collection
Account on the Determination Date relating to such Monthly Payment Date which
would have constituted Monthly Available Funds for the Monthly Payment Date
succeeding such Monthly Payment Date up to the amount necessary to pay such
items, and the Monthly Available Funds for such succeeding Monthly Payment
Date will be adjusted accordingly; and provided, further, that the Monthly
Available Funds will exclude: (A) all payments and proceeds (including
Liquidation Proceeds) of any Financed Student Loan the Purchase Amount of
which has been included in the Monthly Available Funds for a prior Monthly
Collection Period, (B) except as expressly included in clause (iv) above,
amounts released from the Collateral Reinvestment Account, (C) any Monthly
Rebate Fees paid during the related Monthly Collection Period by or on behalf
of the Trust and (D) any collections in respect of principal on the Financed
Student Loans applied during the related Monthly Collection Period by the
Eligible Lender Trustee on behalf of the Trust prior to the end of the
Revolving Period to make deposits to the Collateral Reinvestment Account
pursuant to Section 2(d)(i) of the Administration Agreement and, after the end
of the Revolving Period, any expenditure of the Net Principal Cash Flow Amount
used to fund the addition of any Add-on Consolidation Loans, to purchase
Serial Loans or to fund the acquisition of Exchanged Serial Loans during such
Monthly Collection Period.
"Monthly Collection Period" means, with respect to any Monthly
Payment Date that is not a Quarterly Payment Date, the calendar month
immediately preceding the month of such Monthly Payment Date.
"Monthly Payment Date" means the [twenty-eighth] day of each month
(or, if any such date is not a Business Day, on the next succeeding Business
Day) commencing [ ].
"Monthly Rebate Fee" means, for each calendar month and with respect
to each Consolidation Loan that was originated on or after [ ] (except for
Consolidation Loans referred to in clause (B) below), the fee payable to the
Department equal to the product of: (x) one-twelfth, (y) (A) with respect to
all of the Consolidation Loans (other than those, the applications of which
have been received during the period from October [ ] through January [ ]),
1.05% or (B) with respect to Consolidation Loans, the applications of which
have been received during the period from October [ ] through January [ ],
0.62% and (z) the outstanding principal balance of such Consolidation Loan
(including any increases in the principal balance of a Consolidation Loan due
to the addition of the principal balance of a related Add-on Consolidation
Loan) plus accrued interest on such Consolidation Loan as of the last day of
such month.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Net Principal Cash Flow Amount" means, as of any date, the Principal
Cash Flow Amount (calculated for the Collection Period ending in the preceding
calendar month or, if no Collection Period ended in the preceding calendar
month, calculated for each preceding calendar month during the current
Collection Period) minus, after the Revolving Period, the Capitalized Interest
Amount for such Collection Period or for each such preceding calendar month,
as the case may be.
"Net Trust Swap Payment" means, with respect to any Quarterly Payment
Date, the difference, if negative, between the regularly scheduled amount
(without regard to any carryover amounts or Termination Payments) owed by any
Swap Counterparty to the Trust on a Quarterly Payment Date and the regularly
scheduled amount (without regard to any carryover amounts or Termination
Payments) owed by the Trust to such Swap Counterparty on such Quarterly
Payment Date pursuant to Section 2 of a Swap Agreement.
"Net Trust Swap Payment Carryover Shortfall" means, with respect to
any Quarterly Payment Date with respect to which amounts are still owing to
any Swap Counterparty in respect of a Swap Agreement, the excess of: (i) the
Trust Swap Payment Amount for such Swap Agreement on the preceding Quarterly
Payment Date over (ii) the amount actually received by such Swap Counterparty
out of the Available Funds or the Reserve Account on such preceding Quarterly
Payment Date plus interest on such excess from such preceding Quarterly
Payment Date to the current Quarterly Payment Date at the rate of Three-Month
LIBOR for the related Quarterly Interest Period.
"Net Trust Swap Receipt" means, with respect to any Quarterly Payment
Date, the difference, if positive, between the regularly scheduled amount
(without regard to any carryover amounts or Termination Payments) owed by any
Swap Counterparty to the Trust on a Quarterly Payment Date and the regularly
scheduled amount (without regard to any carryover amounts or Termination
Payments) owed by the Trust to such Swap Counterparty on such Quarterly
Payment Date pursuant to Section 2 of a Swap Agreement.
"Net Trust Swap Receipt Carryover Shortfall" means, with respect to
any Quarterly Payment Date with respect to which amounts are still owing to
the Trust in respect of a Swap Agreement, the excess of: (i) the Trust Swap
Receipt Amount for such Swap Agreement on the preceding Quarterly Payment Date
over (ii) the amount actually paid by the related Swap Counterparty to the
Trust on such preceding Quarterly Payment Date plus interest on such excess
from such preceding Quarterly Payment Date to the current Quarterly Payment
Date at the rate of Three-Month LIBOR for the related Quarterly Interest
Period.
"New Loan" means a Financed Student Loan which: (i) is made by an
eligible lender under the Higher Education Act to a Borrower who is not a
Borrower under any Initial Financed Student Loan, (ii) is made under a loan
program which existed as of the Closing Date, and (iii) is guaranteed by a
Guarantor.
"91-Day Treasury Bills" means direct obligations of the United States
with a maturity of thirteen weeks.
"Note Owner" means, with respect to a Book-Entry Note, the Person who
is the owner of such Book-Entry Note, as reflected on the books of the
Clearing Agency, or on the books of a Person maintaining an account with such
Clearing Agency (directly as a Clearing Agency Participant or as an indirect
participant, in each case in accordance with the rules of such Clearing
Agency).
"Note Rate" means any one of the Class A-1 Note Rate, the Class A-2
Note Rate or the Subordinate Note Rate, as the case may be.
"Note Register" and "Note Registrar" have the respective meanings
specified in Section 2.04 of the Indenture.
"Noteholder" means the Person in whose name a Note is registered in
the Note Register.
"Noteholders' Interest Distribution Amount" means, with respect to
any Quarterly Payment Date, the sum of the Class A-1 Noteholders' Interest
Distribution Amount, the Class A-2 Noteholders' Interest Distribution Amount
and the Subordinate Noteholders' Interest Distribution Amount.
"Notes" means, collectively, the Class A-1 Notes, Class A-2 Notes and
the Subordinate Notes.
"Obligor" on a Student Loan means the borrower or co-borrowers of
such Student Loan and any other Person who owes payments in respect of such
Student Loan, including the Guarantor thereof and, with respect to any
Interest Subsidy Payment or Special Allowance Payment, if any, thereon, the
Department.
"Officers' Certificate" means: (i) in the case of the Issuer, a
certificate signed by any two Authorized Officers of the Issuer, under the
circumstances described in, and otherwise complying with, the applicable
requirements of Section 11.01 of the Indenture, and delivered to the Indenture
Trustee and (ii) in the case of the Seller, the Servicer or the Administrator,
a certificate signed by any two Authorized Officers of the Seller, the
Servicer or the Administrator, as appropriate.
"Opinion Of Counsel" means: (i) with respect to the Issuer, one or
more written opinions of counsel who may, except as otherwise expressly
provided in the Indenture, be employees of or counsel to the Issuer and who
shall be satisfactory to the Indenture Trustee, and which opinion or opinions
shall be addressed to the Indenture Trustee as Indenture Trustee, shall comply
with any applicable requirements of Section 11.01 of the Indenture, and shall
be in form and substance satisfactory to the Indenture Trustee and (ii) with
respect to the Seller, the Administrator, the Servicer or a Federal Guarantor,
one or more written opinions of counsel who may be an employee of or counsel
to the Seller, the Administrator, the Servicer or such Federal Guarantor,
which counsel shall be acceptable to the Indenture Trustee, the Eligible
Lender Trustee or the Rating Agencies, as applicable.
"Outstanding" means, as of the date of determination, all Notes
theretofore authenticated and delivered under this Indenture except:
(i) Notes theretofore cancelled by the Note Registrar or
delivered to the Note Registrar for cancellation;
(ii) Notes or portions thereof the payment for which money in
the necessary amount has been theretofore deposited with the Indenture
Trustee or any Paying Agent in trust for the Noteholders thereof
(provided, however, that if such Notes are to be redeemed, notice of such
redemption has been duly given pursuant to the Indenture); and
(iii) Notes in exchange for or in lieu of other Notes which have
been authenticated and delivered pursuant to the Indenture unless proof
satisfactory to the Indenture Trustee is presented that any such Notes
are held by a bona fide purchaser;
provided, however, that in determining whether the Noteholders of the
requisite Outstanding amount of the Notes have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or under any
other Basic Document, Notes owned by the Issuer, any other obligor upon the
Notes, the Seller or any Affiliate of any of the foregoing Persons shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Indenture Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Notes that a Responsible Officer of the Indenture Trustee either actually
knows to be so owned or has received written notice thereof shall be so
disregarded. Notes so owned that have been pledged in good faith may be
regarded as Outstanding if the pledgee establishes to the satisfaction of the
Indenture Trustee the pledgee's right so to act with respect to such Notes and
that the pledgee is not the Issuer, any other obligor upon the Notes, the
Seller or any Affiliate of any of the foregoing Persons.
"Outstanding Amount" means the aggregate principal amount of all
Notes Outstanding at the date of determination.
"Parity Date" means the first Quarterly Payment Date on which the
aggregate principal amount of the Notes, after giving effect to all
distributions on such date, is no longer in excess of the Pool Balance as of
the last day of the related Collection Period.
"Paying Agent" means the Indenture Trustee or any other Person that
meets the eligibility standards for the Indenture Trustee specified in Section
6.11 of the Indenture and is authorized by the Issuer to make the payments to
and distributions from the Collection Account and payments of principal of and
interest and any other amounts owing on the Notes on behalf of the Issuer.
"Person" means any individual, corporation, estate, partnership,
joint venture, limited liability company, limited liability partnership,
association, joint stock company, trust (including any beneficiary thereof),
unincorporated organization or government or any agency or political
subdivision thereof.
"Physical Property" has the meaning assigned to such term as the
definition of "Delivery" above.
"Plus Loan" means a Student Loan designated as such that is made
under the Parent Loans to Undergraduate Students Program pursuant to the
Higher Education Act.
"Pool Balance" means, as of the close of business on the last day of
any Collection Period, the aggregate principal balances of the Financed
Student Loans as of such day (including accrued interest thereon for the
immediately preceding Collection Period to the extent such interest will be
capitalized upon commencement of repayment, excluding any Purchased Student
Loans and Liquidated Student Loans).
"Predecessor Note" means, with respect to any particular Note, every
previous Note evidencing all or a portion of the same debt as that evidenced
by such particular Note; and, for the purpose of this definition, any Note
authenticated and delivered under Section 2.05 of the Indenture and in lieu of
a mutilated, lost, destroyed or stolen Note shall be deemed to evidence the
same debt is the mutilated, lost, destroyed or stolen Note.
"Prefunding Account" means the account designated as such,
established and maintained pursuant to Section 2(c) of the Administration
Agreement, which shall be an Eligible Deposit Account.
"Prefunded Loans" means those Financed Student Loans acquired by the
Issuer with funds on deposit in the Prefunding Account.
"Prefunding Account Closing Date Deposit" means $[ ].
"Principal Cash Flow Amount" means, with respect to any Quarterly
Payment Date, the sum of the following amounts with respect to the related
Collection Period, or with respect to any other date of determination, the sum
of the following amounts with respect to the period specified: (i) that
portion of all collections received by the Servicer and remitted to the
Indenture Trustee on the Financed Student Loans that is allocable to principal
(including the portion of any Guarantee Payments received that is allocable to
principal of the Financed Student Loans); (ii) all Liquidation Proceeds
attributable to the principal amount of Financed Student Loans which became
Liquidated Student Loans during such Collection Period, or such other
specified period, in accordance with the Servicer's customary servicing
procedures and have been received by the Servicer during such Collection
Period and remitted to the Indenture Trustee, together with all Realized
Losses on such Financed Student Loans; (iii) to the extent attributable to
principal, the Purchase Amount received by the Indenture Trustee with respect
to each Financed Student Loan repurchased by the Seller or purchased by the
Servicer as a result of a breach of a representation, warranty or covenant
which arose during the related Collection Period or such other specified
period; and (iv) the Principal Distribution Adjustment; provided, however,
that the Principal Distribution Amount will exclude all payments and proceeds
(including Liquidation Proceeds) of any Financed Student Loans the Purchase
Amount of which has been included in Available Funds for a prior Collection
Period and if the Revolving Period terminated during the related Collection
Period, will exclude the amount of collections in respect of principal on the
Financed Student Loans during such Collection Period that were applied by the
Issuer during the Collection Period to purchase New Loans with amounts on
deposit in the Collateral Reinvestment Account or that were on deposit in the
Collateral Reinvestment Account at the end of the Revolving Period.
"Principal Distribution Adjustment" means, with respect to any
Quarterly Payment Date, the amount of the Available Funds on such Quarterly
Payment Date to be used to make additional principal distributions to
Noteholders to account for: (i) the amount of any insignificant balance
remaining outstanding as of such Quarterly Payment Date on a Financed Student
Loan after receipt of a final payment from a Borrower or a Guarantor, when
such insignificant balances are waived in the ordinary course of business by
the Servicer at the direction of the Administrator in accordance with the
Servicing Agreement or (ii) the amount of principal collections erroneously
treated as interest collections including, without limitation, by reason of
the failure by a Borrower to capitalize interest that had been expected to be
capitalized; provided, however, that the Principal Distribution Adjustment for
any Quarterly Payment Date shall not exceed the lesser of: (x) $100,000 and
(y) the amount of any Reserve Account Excess after giving effect to all
distributions to be made therefrom on such Quarterly Payment Date other than
distributions to the Company out of such excess.
"Principal Distribution Amount" means, with respect to any Quarterly
Payment Date occurring after the Revolving Period, the Net Principal Cash Flow
Amount for such Quarterly Payment Date minus the sum of: (i) any funds
remitted to the Seller during the preceding Collection Period for the Purchase
Collateral Balance of Serial Loans and (ii) any funds which are applied during
the preceding Collection Period to fund the addition of the principal balance
of any Add-on Consolidation Loan to the principal balance of a related
Consolidation Loan.
"Proceeding" means any suit in equity, action at law or other
judicial or administrative proceeding.
"Purchase Amount" means, with respect to a Financed Student Loan
other than a Serial Loan to be purchased from the Issuer, the amount required,
as of the close of business on the last day of a Monthly Interest Period or
Quarterly Interest Period, as applicable, to prepay in full the respective
Student Loan under the terms thereof including all accrued borrower interest
thereon; provided, however, that the Purchase Amount for a Financed Student
Loan, which is being repurchased by the Seller as a result of a breach of the
representation and warranty provided for in the last sentence of the first
paragraph of Exhibit C to the Loan Sale Agreement will be calculated without
regard to any amount which the Seller has advanced with respect to such loan
and which was not reflected by the principal balance of such loan as of the
Cutoff Date (or the applicable Subsequent Cutoff Date, as the case may be)
after the loan was sold into the Trust.
"Purchase Collateral Balance" means with respect to a Prefunded Loan,
a New Loan or a Serial Loan to be purchased by the Issuer, an amount equal, as
of the related Subsequent Cut-off Date, to the principal balance of such loan
plus accrued borrower interest thereon if and to the extent that such interest
is not then payable and will, pursuant to the terms of such loan, be
capitalized and added to the principal balance of such loan.
"Purchase Premium Amount" means with respect to a Prefunded Loan, a
New Loan or a Serial Loan (other than an Exchanged Serial Loan) to be
purchased by the Issuer, an additional amount to the Purchase Collateral
Balance equal to the sum of: (i) an amount not to exceed 1.5% of the related
Purchase Collateral Balance and (ii) accrued borrower interest on the
principal balance owed by the applicable Borrower thereon to the extent that
such interest will not be capitalized.
"Purchased Student Loan" means a Financed Student Loan purchased as
of the close of business on the last day of a Monthly Collection Period or
Collection Period, as applicable, by the Servicer pursuant to Section 3.05 of
the Servicing Agreement or repurchased by the Seller pursuant to Section 3.02
of the Loan Sale Agreement.
"Qualified Substitute Student Loan" means a Student Loan that: (i)
was originated under the same loan program and is guaranteed by a Guarantor
and entitles the holder thereof to receive interest based on the same interest
rate index as the related Deleted Student Loan for which it is to be
substituted, and (ii) will not, at any level of such interest rate index, have
an interest rate that is less than that of such Deleted Student Loan.
"Quarterly Payment Date" means the Monthly Payment Date occurring in
each [ ], [ ], [ ] and [ ], commencing with the Monthly Payment Date occurring
in [ ]
"Quarterly Interest Period" means, with respect to a Quarterly
Payment Date, the period from and including the Quarterly Payment Date
immediately preceding such Quarterly Payment Date (or in the case of the first
Quarterly Payment Date, the Closing Date) to but excluding such Quarterly
Payment Date. In the case of the initial Quarterly Interest Period, interest
will accrue for the period from the Closing Date to but excluding [ ]
(computed on the basis of the actual number of days elapsed in such Quarterly
Interest Period over a year of 360 days) based on Three-Month LIBOR as
determined on the initial LIBOR Determination Date and interest will accrue
for the period from July [ ] to but excluding October [ ] (computed on the
basis of the actual number of days elapsed in such Quarterly Interest Period
over a year of 360 days) based on Three-Month LIBOR as determined on the LIBOR
Determination Date in July [ ].
"Rating Agency" means ▇▇▇▇▇'▇, S&P and Fitch. If no such organization
or successor is any longer in existence, "Rating Agency" shall be a nationally
recognized statistical rating organization or other comparable Person
designated by the Seller, notice of which designation shall be given to the
Indenture Trustee, the Eligible Lender Trustee and the Servicer.
"Rating Agency Condition" means, with respect to any action, that
each Rating Agency shall have been given ten days' prior notice thereof and
that each of the Rating Agencies shall have notified the Seller, the Servicer,
the Eligible Lender Trustee and the Indenture Trustee in writing that such
action will not result in and of itself in a reduction or withdrawal of the
then current rating of the Class A-1 Notes, the Class A-2 Notes or the
Subordinate Notes.
"Rating Agency Swap Condition" means, with respect to any new Swap
Agreement or amendment to a Swap Agreement, that: (a) the Swap Counterparty
has a counterparty rating of at least "A2" by Moody's or "A" by S& P; (b) each
Rating Agency shall have been given ten days' prior written notice of the name
of the related Swap Counterparty and the terms of the related Swap Agreement;
and (c) prior to the expiration of ten days following such notice that none of
the Rating Agencies shall have notified the Administrator, the Seller, the
Servicer, the Eligible Lender Trustee or the Indenture Trustee in writing that
such action will result in and of itself in a reduction, withdrawal or
placement of credit watch on the then current rating of the Class A-1 Notes,
the Class A-2 Notes or the Subordinate Notes.
"Realized Losses" means the excess of the aggregate principal balance
of any Liquidated Student Loan plus accrued but unpaid interest thereon over
Liquidation Proceeds to the extent allocable to principal.
"Record Date" means, with respect to a Quarterly Payment Date or a
Redemption Date, the close of business on the twenty-seventh day of the
calendar month in which such Quarterly Payment Date or Redemption Date occurs
(whether or not such date is a Business Day).
"Recoveries" means, with respect to any Liquidated Student Loan, all
monies in respect thereof, from whatever source, that have been received by
the Servicer and remitted to the Indenture Trustee during any Monthly
Collection Period or Collection Period, as applicable, following the Monthly
Collection Period or Collection Period, as applicable, in which such Financed
Student Loan became a Liquidated Student Loan, net of the sum of all
reasonable amounts expended by the Servicer for the account of any Obligor to
the extent not previously reimbursed from Liquidation Proceeds or otherwise
and any amounts required by law to be remitted to the Obligor.
"Redemption Date" means in the case of a payment to the Noteholders
pursuant to Section 10.01 of the Indenture, the Quarterly Payment Date
specified by the Administrator or the Issuer pursuant to Section 10.01 (b) or
(c) of the Indenture.
"Redemption Price" means, in the case of a payment made to the
Noteholders pursuant to Section 10.01 (b) or (c) of the Indenture, the
Outstanding Amount of the Notes and all accrued and unpaid interest thereon.
"Reference Banks" means four major banks in the London interbank
market selected by the Administrator.
"Repayment" means the period of time during which a Borrower is
required to make installment payments to repay the aggregate principal amount
plus accrued interest of all amounts borrowed by virtue of the Borrower
Note(s) executed by such Borrower.
"Repayment Loan" means a Student Loan during a period of Repayment.
"Reserve Account" means the account designated as such, established
and maintained pursuant to Section 2(c) of the Administration Agreement, which
shall be an Eligible Deposit Account.
"Reserve Account Excess" has the meaning specified in Section
2(e)(ii) of the Administration Agreement.
"Reserve Account Initial Deposit" means [ ].
"Reserve Account Trigger" will be triggered with respect to a
Quarterly Payment Date if: (a) Three-Month LIBOR for the related LIBOR Reset
Period exceeds (b) the greater of (1) the T-▇▇▇▇ Rate for the related
Quarterly Interest Period and (2) the 91-Day Treasury ▇▇▇▇ rate in effect for
the variable rate Student Loans effective as of the preceding July 1, by more
than 1.25%; provided that the Reserve Account Trigger may be modified for any
reason (including as a result of the Trust entering into one or more Swap
Agreements) upon satisfaction of the Rating Agency Condition.
"Responsible Officer" means, with respect to the Indenture Trustee,
any officer within the Corporate Trust Office of the Indenture Trustee,
including any vice president, assistant vice president, assistant treasurer,
assistant secretary, or any other officer of the Indenture Trustee customarily
performing functions similar to those performed by any of the above designated
officers, with direct responsibility for the administration of the Indenture
and the other Basic Documents on behalf of the Indenture Trustee and also,
with respect to a particular matter, any other officer to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.
"Revolving Period" means the period from the close of business on the
Closing Date until the first to occur of: (i) an Early Amortization Event or
(ii) the last day of the Collection Period preceding the April [ ] Quarterly
Payment Date.
"S&P" means Standard & Poor's, a division of The ▇▇▇▇▇▇-▇▇▇▇
Companies, Inc.
"Schedule Of Student Loans" means the listing of the Financed Student
Loans set forth in Schedule A to the Loan Sale Agreement and to the Indenture
(which Schedule may be in the form of microfiche) as the same may be amended
from time to time.
"Secretary" means the Secretary of the Department, or any predecessor
or successor to the functions thereof under the Higher Education Act.
"Securities Act" means the federal Securities Act of 1933, as
amended.
"Seller" means [___________________________________], in its capacity
as seller of the Financed Student Loans.
"Senior Noteholder" means the Noteholder of a Senior Note.
"Senior Notes" means collectively, the Class A-1 Notes and the Class
A-2 Notes.
"Senior Noteholders' Distribution Amount" means, with respect to any
Quarterly Payment Date, the sum of the Class A-1 Noteholders' Interest
Distribution Amount, the Class A-2 Noteholders' Interest Distribution Amount
and the Senior Noteholders' Principal Distribution Amount for such Quarterly
Payment Date.
"Senior Noteholders' Interest Distribution Amount" means, with
respect to any Quarterly Payment Date, the sum of: (i) the Class A-1
Noteholders' Interest Distribution Amount and (ii) the Class A-2 Noteholders'
Interest Distribution Amount, each for such Quarterly Payment Date.
"Senior Noteholders' Principal Carryover Shortfall" means, as of the
close of any Quarterly Payment Date, the excess of: (i) the Senior
Noteholders' Principal Distribution Amount on such Quarterly Payment Date over
(ii) the amount of principal actually distributed to the Senior Noteholders on
such Quarterly Payment Date.
"Senior Noteholders' Principal Distribution Amount" means, with
respect to any Quarterly Payment Date (if the Revolving Period has terminated
on or prior to the end of the related Collection Period with respect to such
Quarterly Payment Date), the Principal Distribution Amount for such Quarterly
Payment Date plus the Senior Noteholders' Principal Carryover Shortfall as of
the close of the preceding Quarterly Payment Date; provided, however, that the
Senior Noteholders' Principal Distribution Amount will not exceed the
outstanding aggregate principal balance of the Senior Notes. In addition: (i)
on the Class A-1 Note Final Maturity Date, the principal required to be
distributed to Class A-1 Noteholders will include the amount required to
reduce the outstanding principal balance of the Class A-1 Notes to zero and
(ii) on the Class A-2 Note Final Maturity Date, the principal required to be
distributed to Class A-2 Noteholders will include the amount required to
reduce the outstanding principal balance of the Class A-2 Notes to zero.
"Senior Notes" means, collectively, the Class A-1 Notes and the Class
A-2 Notes.
"Serial Loan" means a Financed Student Loan which: (i) is made by an
eligible lender under the Higher Education Act to a Borrower who is also a
Borrower under at least one outstanding Financed Student Loan and is acquired
by the Seller, (ii) is made under the same federal loan program as such
Financed Student Loan, (iii) has the same Guarantor as such Financed Student
Loan and (iv) has a final maturity date during or before the Collection Period
preceding the Subordinate Note Final Maturity Date.
"Servicer" means [_________], in its capacity as servicer of the
Financed Student Loans or any permitted Successor Servicer.
"Servicer Default" means an event specified in Section 6.01 of the
Servicing Agreement.
"Servicer Liability Limit" has the meaning specified in Section
3.05(a) of the Servicing Agreement.
"Servicer Liability Period" has the meaning specified in Section
3.05(a) of the Servicing Agreement.
"Servicing Agreement" means the Servicing Agreement dated as of [ ],
among the Issuer, the Servicer, the Seller and the Eligible Lender Trustee.
"Servicing Fee" has the meaning specified in Section 3.06 of the
Servicing Agreement.
"Servicing Fee Shortfall" has the meaning specified in Section 3.06
of the Servicing Agreement.
"SLS Loan" means a Student Loan designated as such that is made under
the Supplemental Loans for Students Program pursuant to the Higher Education
Act.
"Special Allowance Payments" means payments, designated as such,
consisting of effective interest subsidies by the Department in respect of the
Financed Student Loans to the Eligible Lender Trustee on behalf of the Trust
in accordance with the Higher Education Act.
"Specified Reserve Account Balance" with respect to any Quarterly
Payment Date means the greatest of: (a) [ ] of the principal balance of the
Notes after taking into account the effect of distributions on such Quarterly
Payment Date, (b) $[ ] after giving effect to payments on the Quarterly
Payment Date and (c) if the Reserve Account Trigger is triggered with respect
to such Quarterly Payment Date, the outstanding principal amount of the Notes
after giving effect to payments on the Quarterly Payment Date; provided,
however, that in no event shall the Specified Reserve Account Balance exceed
the outstanding principal balance of the Notes.
"▇▇▇▇▇▇▇▇ Loan" means a Student Loan designated as such that is made
under the ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Student Loan Program in accordance with the
Higher Education Act.
"State" means any one of the ▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇, the trust territories of the United States, or the District of
Columbia.
"Student Loan" means an agreement to repay a disbursement of money to
or on behalf of an eligible student, evidenced by a Borrower Note and
guaranteed in accordance with the policies and procedures of the Guarantor.
"Student Loan Files" means the documents relating to the Financed
Student Loans specified in Section 2.01 of the Servicing Agreement.
"Student Loan Rate Accrual Period" means, with respect to any
Quarterly Interest Date, the Collection Period preceding such Quarterly
Payment Date.
"Subordinate Note" means a Class B Floating Rate Asset-Backed
Subordinate Note issued pursuant to the Indenture, substantially in the form
of Exhibit A-4 thereto.
"Subordinate Note Final Maturity Date" means the [ ] Quarterly
Payment Date.
"Subordinate Note Pool Factor" as of the close of business on a
Quarterly Payment Date means a seven-digit decimal figure equal to the
outstanding principal balance of the Subordinate Notes divided by the original
outstanding principal balance of the Subordinate Notes. The Subordinate Note
Pool Factor will be 1.0000000 as of the Closing Date; thereafter, the
Subordinate Note Pool Factor will decline to reflect reductions in the
outstanding principal balance of the Subordinate Notes.
"Subordinate Note Rate" means, with respect to any Quarterly Payment
Date and the related Quarterly Interest Period, the interest rate per annum
(computed on the basis of the actual number of days in such Quarterly Interest
Period over a year of 360 days) equal to Three-Month LIBOR for the related
LIBOR Reset Period plus [ ], provided that if the Subordinate Note Trigger is
triggered with to respect any Quarterly Payment Date, the Subordinate Note
Rate shall equal zero until the Subordinate Note Trigger is no longer
triggered.
"Subordinate Note Trigger" shall be triggered on any Quarterly
Payment Date and with respect to the related Quarterly Interest Period if: (a)
the Pool Balance as of the last day of the related Collection Period plus the
amount on deposit in the Reserve Account, the Collateral Reinvestment Account
and the Prefunding Account is less than (b) [ ] of the aggregate principal
amount of the Notes after giving effect to all distributions on such Quarterly
Payment Date, and shall remain triggered with respect to each succeeding
Quarterly Interest Period until the earlier of: (1) the first day of the
Quarterly Interest Period relating to the Quarterly Payment Date on which the
amount calculated in clause (a) above equals or exceeds 100.00% of the
aggregate principal amount of the Notes after giving effect to all
distributions on such Quarterly Payment Date and (2) the first day of the
Quarterly Interest Period relating to the Quarterly Payment Date on which the
outstanding principal amount of the Senior Notes is reduced to zero.
"Subordinate Noteholder" means the Noteholder of a Subordinate Note.
"Subordinate Noteholders' Distribution Amount" means, with respect to
any Quarterly Payment Date, the Subordinate Noteholders' Interest Distribution
Amount for such Quarterly Payment Date plus, with respect to any Quarterly
Payment Date on and after which the Senior Notes have been paid in full, the
Subordinate Noteholders' Principal Distribution Amount for such Quarterly
Payment Date.
"Subordinate Noteholders' Interest Carryover Shortfall" means, with
respect to any Quarterly Payment Date, the excess of: (i) the Subordinate
Noteholders' Interest Distribution Amount on the preceding Quarterly Payment
Date over (ii) the amount of interest actually distributed to the Subordinate
Noteholders on such preceding Quarterly Payment Date, plus interest on the
amount of such excess, to the extent permitted by law, at the then current
Subordinate Note Rate from such preceding Quarterly Payment Date to the
current Quarterly Payment Date.
"Subordinate Noteholders' Interest Distribution Amount" means, with
respect to any Quarterly Payment Date, the sum of: (i) the amount of interest
accrued at the Subordinate Note Rate for the related Quarterly Interest Period
on the aggregate principal amount of the Subordinate Notes outstanding on the
immediately preceding Quarterly Payment Date (after giving effect to all
principal distributions to Subordinate Noteholders on such Quarterly Payment
Date) or, in the case of the first Quarterly Payment Date, on the Closing
Date, (ii) the Subordinate Noteholders' Interest Carryover Shortfall for such
Quarterly Payment Date and (iii) with respect to the first Quarterly Payment
Date on which the Subordinate Note Trigger is not triggered following a
Quarterly Payment with respect to which the Subordinate Note Trigger was
triggered, the amount that would have been calculated pursuant to clause (i)
above for all Quarterly Payment Dates for which the Subordinate Note Trigger
was in effect calculated as if the Subordinate Note Trigger was not in effect
(and not previously included in Subordinate Noteholders' Interest Distribution
Amount) plus interest thereon at the Subordinate Note Rate for each Quarterly
Interest Period while the Subordinate Note Trigger was triggered. Payments
with respect to the Subordinate Noteholders' Interest Distribution Amount
shall be allocated first with respect to clause (i) above, second with respect
to clause (ii) above and third with respect to clause (iii) above.
"Subordinate Noteholders' Principal Carryover Shortfall" means, as of
the close of any Quarterly Payment Date on or after which the Senior Notes
have been paid in full, the excess of: (i) the Subordinate Noteholders'
Principal Distribution Amount on such Quarterly Payment Date over (ii) the
amount of principal actually distributed to the Subordinate Noteholders on
such Quarterly Payment Date.
"Subordinate Noteholders' Principal Distribution Amount" means, with
respect to each Quarterly Payment Date on and after which the aggregate
principal amount of the Senior Notes has been paid in full, the sum of: (a)
the Principal Distribution Amount for such Quarterly Payment Date (or, in the
case of the Quarterly Payment Date on which the aggregate principal balance of
the Senior Notes is paid in full, any remaining Principal Distribution Amount
not otherwise distributed to the Senior Noteholders on such Quarterly Payment
Date) and (b) the Subordinate Noteholders' Principal Carryover Shortfall as of
the close of the preceding Quarterly Payment Date; provided, however, that the
Subordinate Noteholders' Principal Distribution Amount will in no event exceed
the aggregate principal amount of the Subordinate Notes outstanding on such
date. In addition, on the Subordinate Note Final Maturity Date, the principal
required to be distributed to the Subordinate Noteholders will include the
amount required to reduce the outstanding principal amount of the Subordinate
Notes to zero.
"Subsequent Cutoff Date" means for Prefunded Loans, New Loans or
Serial Loans, the date as of which any New Loan, Prefunded Loan or Serial Loan
is transferred to the Issuer and the date on and after which all distributions
on such loan are property of the Issuer or the date of the related Assignment
in the case of any Qualified Substitute Student Loan.
"Subservicer" means [__________________________].
"Subservicing Agreement" means the Subservicing Agreement dated as of
[ ] between the Servicer and the Subservicer.
"Substitution Adjustment Amount" has the meaning specified in Section
3.02 of the Loan Sale Agreement.
"Successor Servicer" has the meaning specified in Section 3.07(e) of
the Indenture.
"Swap Agreement" means any interest rate swap agreement, entered into
by the Trust with a Swap Counterparty document according to a [ ] ISDA Master
Agreement (or any subsequent version substantially in the same form as the [ ]
version) (Multicurrency-Cross Border) and any replacement Swap Agreement in
accordance with the Basic Documents.
"Swap Counterparty" means any swap counterparty appointed in
accordance with the terms of a Swap Agreement.
"Tax Characterization Amendment" has the meaning specified in Section
5.04 of the Trust Agreement.
"T-▇▇▇▇ Rate" means, with respect to any Quarterly Interest Period,
the weighted average of the T-▇▇▇▇ Rates for each day within the Quarterly
Interest Period and, with respect to any date within a Quarterly Interest
Period, means the weighted average per annum discount rate (expressed on a
bond equivalent basis and applied on a daily basis) for 91-day Treasury Bills
sold at the most recent 91-day Treasury ▇▇▇▇ auction prior to such date as
reported by the U.S. Treasury Department. In the event that the results of the
auctions of 91-day Treasury Bills cease to be published or reported as
provided above, or that no such auction is held in a particular week, then the
"T-▇▇▇▇ Rate" in effect as a result of the last such publication or report
shall remain in effect until such time, if any, as the results of auctions of
91-day Treasury shall again be so published or reported or such auction is
held, as the case may be. The T-▇▇▇▇ Rate with respect to a Swap Agreement, if
specified in the related Swap Agreement, shall be subject to a Lock-In Period
(as defined in each Swap Agreement, if any) of six Business Days.
"Telerate Page 3750" means the display page so designated on the Dow
▇▇▇▇▇ Telerate Service (or such other page as may replace that page on any
service for the purpose of displaying comparable rates or prices).
"Termination Event" has the meaning specified in each Swap Agreement,
if any.
"Termination Payment" has the meaning specified in each Swap
Agreement, if any.
"Three-Month LIBOR" means, with respect to any LIBOR Reset Period,
the London interbank offered rate for deposits in U.S. dollars having a
maturity of three months commencing on the related LIBOR Determination Date
(the "Index Maturity") which appears on Telerate Page 3750 as of 11:00 a.m.
London time, on such LIBOR Determination Date. If such rate does not appear on
Telerate Page 3750, the rate for that day will be determined on the basis of
the rates at which deposits in U.S. dollars, having the Index Maturity and in
a principal amount of not less than U.S. $1,000,000, are offered at
approximately 11:00 a.m., London time, on such LIBOR Determination Date to
prime banks in the London interbank market by the Reference Banks. The
Administrator will request the principal London office of each of such
Reference Banks to provide a quotation of its rate. If at least two such
quotations are provided, the rate for that day will be the arithmetic mean of
the quotations. If fewer than two quotations are provided, the rate for that
day will be the arithmetic mean of the rates quoted by major banks in The City
of New York, selected by the Administrator, at approximately 11:00 a.m., New
York time, on such LIBOR Determination Date, for loans in U.S. dollars to
leading European banks having the Index Maturity and in a principal amount
equal to an amount of not less than U.S. $1,000,000; provided, however, that
if the banks selected as aforesaid are not quoting as mentioned in this
sentence, Three-Month LIBOR in effect for the applicable LIBOR Reset Period
will be the Three-Month LIBOR in effect for the previous LIBOR Reset Period.
"Transfer" means any direct or indirect transfer, sale, pledge,
hypothecation or other form of assignment of any ownership interest in a Note
or, with respect Section 3.01 of the Trust Agreement, in the Trust.
"Transfer Agreement" has the meaning provided in Section 2.03 of the
Loan Sale Agreement.
"Transfer Date" means the day fixed for the transfer of any New
Loans, Serial Loans or Prefunded Loans by the Seller to the Issuer pursuant to
Section 2.02(a) of the Loan Sale Agreement.
"Treasury Regulations" means regulations, including proposed or
temporary regulations, promulgated under the Code. References in any document
or instrument to specific provisions of proposed or temporary regulations
shall include analogous provisions of final Treasury Regulations or other
successor Treasury Regulations.
"Trust" means the Issuer, established pursuant to the Trust
Agreement.
"Trust Account Property" means the Trust Accounts, all amounts and
investments held from time to time in any Trust Account (whether in the form
of deposit accounts, Physical Property, book-entry securities, uncertificated
securities or otherwise), including the Reserve Account Initial Deposit, the
Prefunding Account Closing Date Deposit and the Collection Account Closing
Date Deposit and all proceeds of the foregoing.
"Trust Accounts" has the meaning specified in Section 2(c) of the
Administration Agreement.
"Trust Agreement" means the Trust Agreement dated as of [ ], among
the Depositor, the Company and the Eligible Lender Trustee.
"Trust Estate" means all right, title and interest of the Trust (or
the Eligible Lender Trustee on behalf of the Trust) in and to the property and
rights assigned to the Trust pursuant to Article II of the Loan Sale Agreement
all funds on deposit from time to time in the Trust Accounts and all other
property of the Trust from time to time, including any rights of the Eligible
Lender Trustee and the Trust pursuant to the Loan Sale Agreement, the
Servicing Agreement and the Administration Agreement.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939
as in force on the date hereof, unless otherwise specifically provided.
"Trust Swap Payment Amount" means, with respect to any Quarterly
Payment Date and any Swap Agreement, the sum of: (i) if the related Swap
Agreement is still in effect, the related Net Trust Swap Payment for such
Quarterly Payment Date and (ii) the related Net Trust Swap Payment Carryover
Shortfall for such Quarterly Payment Date; provided, however, that Termination
Payments (other than in respect of clauses (i) and (ii) above) shall not be
deemed to be part of the Trust Swap Payment Amount.
"Trust Swap Receipt Amount" means, with respect to any Quarterly
Payment Date and any Swap Agreement, the sum of: (i) if the related Swap
Agreement is still in effect, the related Net Trust Swap Receipt for such
Quarterly Payment Date and (ii) the related Net Trust Swap Receipt Carryover
Shortfall for such Quarterly Payment Date.
"UCC" means, unless the context otherwise requires, the Uniform
Commercial Code, as in effect in the relevant jurisdiction, as amended from
time to time.
"United States Person" means a citizen or resident of the United
States, a corporation, partnership or other entity created or organized in, or
under the laws of, the United States or any political subdivision thereof, or
an estate whose income is subject to United States federal income tax
regardless of its source, or a trust if a court within the United States is
able to exercise primary supervision over the administration of the trust and
one or more United States fiduciaries have the authority to control all
substantial decisions of the trust.