Exhibit 99.5
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SLC STUDENT LOAN TRUST 200__-__
FORM OF ADMINISTRATION AGREEMENT
Dated as of ______, 200__
Among
SLC STUDENT LOAN TRUST 200__-__,
as Issuer
and
THE STUDENT LOAN CORPORATION,
as Servicer and Administrator
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TABLE OF CONTENTS
Page
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ARTICLE I
Section 1.1 Definitions and Usage..........................................2
ARTICLE II
Section 2.1 Duties with Respect to the Indenture...........................2
Section 2.2 Duties with Respect to the Issuer..............................4
Section 2.3 Establishment of Trust Accounts................................5
Section 2.4 Collections....................................................7
Section 2.5 Application of Collections.....................................7
Section 2.6 Additional Deposits............................................7
Section 2.7 Distributions..................................................8
Section 2.8 Priority of Distributions......................................9
Section 2.9 Capitalized Interest Account..................................10
Section 2.10 Reserve Account...............................................10
Section 2.11 Investment Earnings; Other Trust Accounts.....................12
Section 2.12 Statements to Holder of the Trust Certificate and
Noteholders..................................................12
Section 2.13 Non-Ministerial Matters.......................................13
Section 2.14 Exceptions....................................................13
Section 2.15 Compensation..................................................14
Section 2.16 Servicer and Administrator Expenses...........................14
Section 2.17 Appointment of Subadministrator...............................14
ARTICLE III
Section 3.1 Administrator's Certificate; Servicer's Report................14
Section 3.2 Annual Statement as to Compliance; Notice of Default;
Financial Statements.........................................15
Section 3.3 Annual Independent Certified Public Accountants' Report.......16
ARTICLE IV
Section 4.1 Representations of Administrator..............................16
Section 4.2 Liability of Administrator; Indemnities.......................18
Section 4.3 Merger or Consolidation of, or Assumption of the
Obligations of, Administrator................................20
Section 4.4 Limitation on Liability of Seller, Administrator and
Others.......................................................20
Section 4.5 Administrator May Own Certificates or Notes...................21
Section 4.6 The Student Loan Corporation Not to Resign as
Administrator................................................21
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ARTICLE V
Section 5.1 Administrator Default.........................................21
Section 5.2 Appointment of Successor......................................23
Section 5.3 Notification to Noteholders and Holder of Trust
Certificate..................................................23
Section 5.4 Waiver of Past Defaults.......................................24
ARTICLE VI
Section 6.1 Termination...................................................24
ARTICLE VII
Section 7.1 Protection of Interests in Trust..............................25
ARTICLE VIII
Section 8.1 Independence of the Administrator.............................27
Section 8.2 No Joint Venture..............................................27
Section 8.3 Other Activities of Administrator.............................27
Section 8.4 Powers of Attorney............................................27
Section 8.5 Amendment.....................................................27
Section 8.6 Assignment....................................................29
Section 8.7 Limitations on Rights of Others...............................29
Section 8.8 Assignment to Indenture Trustee...............................29
Section 8.9 Nonpetition Covenants.........................................29
Section 8.10 Limitation of Liability of Owner Trustee, Indenture
Administrator and Indenture Trustee..........................30
Section 8.11 Governing Law.................................................30
Section 8.12 Headings......................................................30
Section 8.13 Counterparts..................................................30
Section 8.14 Severability..................................................30
Section 8.15 Trust Certificate.............................................30
ARTICLE IX
Section 9.1 Intent of the Parties; Reasonableness.........................30
Section 9.2 Reporting Requirements........................................31
Section 9.3 Administrator Compliance Statement............................31
Section 9.4 Report on Assessment of Compliance and Attestation............32
Attachment A Form of Annual Certification.................................A-1
Attachment B Servicing Criteria to be Addressed in Assessment of
Compliance...................................................B-1
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ADMINISTRATION AGREEMENT
SLC Student Loan Trust 200__-__ Administration Agreement, dated as
of ______, 200__ (this "Agreement"), among (i) SLC Student Loan Trust 200__-__
(the "Issuer"), and (ii) The Student Loan Corporation, not in its individual
capacity but solely in its capacity as servicer (in such capacity, the
"Servicer") and as administrator (in such capacity, the "Administrator").
RECITALS
WHEREAS, the Issuer is issuing (i) its Student Loan Asset-Backed
Notes (collectively, the "Notes") pursuant to the Indenture, dated as of ______,
200__ (the "Indenture"), among the Issuer, _____________, not in its individual
capacity but solely as the indenture trustee (the "Indenture Trustee"),
_____________, not in its individual capacity but solely as the eligible lender
trustee (in such capacity, the "Eligible Lender Trustee") and as the indenture
administrator (in such capacity, the "Indenture Administrator"), and (ii) a
Trust Certificate (the "Trust Certificate") pursuant to the Trust Agreement;
WHEREAS, the Issuer has entered into certain agreements in
connection with the issuance of the Notes and the Trust Certificate, including
the Trust Agreement, the Servicing Agreement, the Sale Agreement, the Eligible
Lender Trust Agreement (Issuer) and the Indenture;
WHEREAS, pursuant to certain Basic Documents and the Eligible Lender
Trust Agreement (Issuer), the Issuer is required to perform certain duties in
connection with (a) the Notes and the Collateral therefore pledged pursuant to
the Indenture and (b) the Trust Certificate pursuant to the Trust Agreement;
WHEREAS, the Issuer desires to have the Administrator and the
Servicer perform certain of the duties of the Issuer referred to in the
preceding clause, and to provide such additional services consistent with this
Agreement, the other Basic Documents and the Eligible Lender Trust Agreement
(Issuer) as the Issuer may from time to time request; and
WHEREAS, the Administrator and the Servicer have the capacity to
provide the services required hereby and are willing to perform such services
for the Issuer 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 Issuer, the Servicer and the Administrator,
hereby agree as follows:
ARTICLE I
Section 1.1 Definitions and Usage. Except as otherwise specified
herein or as the context may otherwise require, capitalized terms used but not
otherwise defined herein are defined in Appendix A to the Indenture, which also
contains rules as to usage that shall be applicable herein.
ARTICLE II
Section 2.1 Duties with Respect to the Indenture. The Administrator
agrees to consult with the Owner Trustee regarding the duties of the Issuer
under the Indenture and the Depository Agreement. The Administrator shall
monitor the performance of the Issuer and shall advise the Owner Trustee when
action is necessary to comply with the Issuer's duties under the Indenture and
the Depository Agreement. 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 Indenture
and the Depository Agreement. In furtherance of the foregoing, the Administrator
shall take the actions with respect to the following matters that it is the duty
of the Issuer, the Indenture Trustee or the Indenture Administrator to take
pursuant to the Indenture:
(a) preparing or obtaining the documents and instruments required
for authentication of the Notes and delivering the same to the Indenture Trustee
and the Indenture Administrator (Section 2.2 of the Indenture);
(b) preparing, obtaining or filing the instruments, opinions and
certificates and other documents required for the release of Collateral (Section
2.9 of the Indenture);
(c) obtaining and preserving 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 3.4 of the Indenture);
(d) preparing all supplements, amendments, financing statements,
continuation statements, instruments of further assurance and other instruments,
in accordance with Section 3.5 of the Indenture, necessary to protect the
Indenture Trust Estate (Section 3.5 of the Indenture);
(e) delivering the Opinion of Counsel on the Closing Date and the
annual delivery of Opinions of Counsel, in accordance with Section 3.6 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 3.9 of the Indenture, as to compliance, with the Indenture
(Sections 3.6 and 3.9 of the Indenture);
(f) in the event of a Servicer Default, the taking of all reasonable
steps available to enforce the Issuer's rights under the Basic Documents in
respect of such Servicer Default (Section 3.7(d) of the Indenture);
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(g) preparing and obtaining the documents and instruments required
for the release of the Issuer from its obligations under the Indenture (Section
3.10 of the Indenture);
(h) monitoring the Issuer's obligations as to the satisfaction and
discharge of the Indenture and preparing an Officers' Certificate of the Issuer
and obtaining of the Opinion of Counsel and the Independent Certificate relating
thereto (Section 4.1 of the Indenture);
(i) selling of the Indenture Trust Estate in a commercially
reasonable manner if an Event of Default resulting in a non-rescindable,
non-waivable acceleration of the Notes has occurred and is continuing (Section
5.4 of the Indenture);
(j) preparing and, after execution by the Issuer, filing with the
Commission, any applicable State agencies and the Indenture Trustee 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 (Section 7.3 of the Indenture);
(k) opening of one or more accounts in the Issuer's name, preparing
Issuer Orders and Officers' Certificates of the Issuer, obtaining the Opinions
of Counsel and all other actions necessary with respect to investment and
reinvestment of funds in the Trust Accounts (Sections 8.2 and 8.3 of the
Indenture);
(l) preparing an Issuer Request and Officers' Certificate of the
Issuer and obtaining an Opinion of Counsel and Independent Certificates, if
necessary, for the release of the Indenture Trust Estate (Sections 8.4 and 8.5
of the Indenture);
(m) preparing Issuer Orders and obtaining Opinions of Counsel with
respect to the execution of supplemental indentures (Sections 9.1, 9.2 and 9.3
of the Indenture);
(n) preparing the documents and instruments required for the
execution and authentication of new Notes conforming to any supplemental
indenture and delivering the same to the Owner Trustee, the Indenture Trustee
and the Indenture Administrator (Section 9.6 of the Indenture);
(o) preparing all Officers' Certificates of the Issuer and obtaining
any Independent Certificates and/or Opinions of Counsel with respect to any
requests by the Issuer to the Indenture Trustee or the Indenture Administrator
to take any action under the Indenture (Section 11.1(a) of the Indenture);
(p) preparing and delivering of Officers' Certificates of the Issuer
and obtaining any Independent Certificates, if necessary, for the release of
property from the lien of the Indenture (Section 11.1(b) of the Indenture);
(q) preparing and delivering to Noteholders, the Indenture Trustee
and the Indenture Administrator any agreements with respect to alternate payment
and notice provisions (Section 11.6 of the Indenture);
(r) recording the Indenture, if applicable (Section 11.15 of the
Indenture);
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(s) calculating on each Distribution Date, as applicable, the
Principal Distribution Amount and any applicable Specified Reserve Account
Balance; and
(t) calculating on or before each Distribution Date, as applicable,
any amounts to be deposited in, or withdrawn from, each Trust Account.
Section 2.2 Duties with Respect to the Issuer. (a) In addition to
the duties of the Administrator set forth above and in the other Basic
Documents, the Administrator shall perform such calculations, including
calculating on each LIBOR Determination Date the applicable rate of interest for
the applicable Accrual Period, and shall prepare for execution by the Issuer or
the Owner Trustee or shall cause the preparation by other appropriate Persons of
all such documents, reports, filings, instruments, certificates, opinions and
notices as it shall be the duty of the Issuer, the Owner Trustee or the
Administrator to prepare, file or deliver pursuant to the Basic Documents and
the Eligible Lender Trust Agreement (Issuer), and at the request of the Owner
Trustee shall take all appropriate action that it is the duty of the Issuer to
take pursuant to the Basic Documents and the Eligible Lender Trust Agreement
(Issuer). Subject to Section 8.1 below, and in accordance with the directions of
the Owner Trustee, the Administrator shall administer, perform or supervise the
performance of such other activities in connection with the Collateral
(including the Basic Document and the Eligible Lender Trust Agreement (Issuer))
as are not covered by any of the foregoing provisions and as are expressly
requested by the Owner Trustee and are reasonably within the capability of the
Administrator.
(b) The Administrator shall be responsible for performance of the
duties of the Administrator set forth in Section 6.04 of the Trust Agreement and
the Administrator shall be entitled to hire an Independent accounting firm to
perform the duties described therein, the reasonable fees and expenses of which
shall be paid by the Depositor or the holder of the Trust Certificate, if not
then held by the Depositor.
(c) The Administrator shall perform any other duties expressly
required to be performed by the Administrator under the Trust Agreement and the
other Basic Documents.
(d) The Administrator shall be responsible for preparing and
delivering, on behalf of the Issuer, (i) all notices required by any Clearing
Agency or stock exchange upon which the Notes are then listed and (ii) any
information required to effectuate the listing of the Notes on a stock exchange
of international standing and, if applicable, the transfer of the listing of the
Notes to an alternative stock exchange of international standing.
(e) 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 the Administrator's
opinion, no less favorable to the Issuer than would be available from
unaffiliated parties.
(f) The Administrator shall provide notice to each Rating Agency if
a Responsible Officer of the Administrator becomes aware of (i) the occurrence
of a downgrade below "A1" by ▇▇▇▇▇'▇ of ______________'s long-term senior
unsecured debt rating and (ii) if ______________ no longer owns 50% or more of
the outstanding common stock of SLC.
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Section 2.3 Establishment of Trust Accounts. (a) On the Closing Date
and at such other times as specified herein, the Administrator shall establish
at the Indenture Administrator the following Eligible Deposit Accounts as more
fully described below:
(i) a "Collection Account";
(ii) a "Reserve Account"; and
(iii) a "Capitalized Interest Account".
(b) Funds on deposit in each account specified in Section 2.3(a)
above (collectively, the "Trust Accounts") shall be invested by the Indenture
Administrator (or any custodian or designated agent with respect to any amounts
on deposit in such accounts) in Eligible Investments (including Eligible
Investments of the Indenture Trustee or the Indenture Administrator) pursuant to
written instructions by the Administrator; provided, however, it is understood
and agreed that the Indenture Administrator shall not be liable for the
selection of, or any loss arising from such investment in, Eligible Investments.
All such Eligible Investments shall be held by the Indenture Administrator (or
any custodian on behalf of the Indenture Administrator) for the benefit of the
Issuer; provided that on the Business Day preceding each Distribution 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 Available Funds for such
Distribution Date. Other than as described in the following proviso or as
otherwise permitted by the Rating Agencies, funds on deposit in the Trust
Accounts shall only be invested in Eligible Investments that will mature so that
such funds will be available at the close of business on the Business Day
preceding the following Monthly Servicing Payment Date (to the extent necessary
to pay the Primary Servicing Fee payable on such date) or the following
Distribution Date. Funds deposited in a Trust Account on a Business Day which
immediately precedes a Monthly Servicing Payment Date or Distribution Date upon
the maturity of any Eligible Investments are not required to be invested
overnight.
(c) The Depositor and the Issuer pledged to the Indenture Trustee
all of their respective 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. Subject to the Administrator's power to instruct the
Indenture Trustee or the Indenture Administrator, as applicable, pursuant to
Section 2.3(b) above and Section 2.3(e) below, the Trust Accounts shall be under
the sole dominion and control of the Indenture Administrator on behalf of the
Indenture Trustee for the benefit of the Noteholders and the Issuer. If, at any
time, any Trust Account ceases to be an Eligible Deposit Account, the
Administrator (on behalf of the Indenture Trustee and the Indenture
Administrator) 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 Administrator, the Administrator shall notify the Indenture
Trustee and the Indenture Administrator in writing promptly upon any of such
Trust Accounts ceasing to be an Eligible Deposit Account.
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(d) With respect to the Trust Account Property, the Indenture
Administrator agrees, by its acceptance hereof, that:
(i) any Trust Account Property that is held in deposit accounts
shall be held solely in Eligible Deposit Accounts, subject to the last
sentence of Section 2.3(c) and, subject to Section 2.3(b), each such
Eligible Deposit Account shall be subject to the exclusive custody and
control of the Indenture Administrator on behalf of the Indenture Trustee,
and the Indenture Administrator shall have sole signature authority with
respect thereto;
(ii) any Trust Account Property that constitutes Physical Property
shall be Delivered to the Indenture Administrator on behalf of the
Indenture Trustee in accordance with paragraph (a) of the definition of
"Delivery" and shall be held, pending maturity or disposition, solely by
the Indenture Administrator on behalf of the Indenture Trustee or a
financial intermediary (as such term is defined in Section 8-313(4) of the
UCC) acting solely for the Indenture Administrator on behalf of the
Indenture Trustee;
(iii) 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 shall be maintained by the Indenture
Administrator on behalf of the Indenture Trustee, pending maturity or
disposition, through continuous book-entry registration of such Trust
Account Property as described in such paragraph; and
(iv) any Trust Account Property other than cash that is an
"uncertificated security" under Article 8 of the UCC and that is not
governed by clause (iii) above shall be Delivered to the Indenture Trustee
in accordance with paragraph (c) of the definition of "Delivery" and shall
be maintained by the Indenture Administrator on behalf of the Indenture
Trustee, pending maturity or disposition, through continued registration
of the Indenture Trustee's (or, as its nominee, the Indenture
Administrator's or other nominee's) ownership of such security.
Notwithstanding anything to the contrary set forth in this Section 2.3(d),
the Indenture Trustee and the Indenture Administrator shall have no liability
or obligation in respect of any failed Delivery, as contemplated herein,
other than with respect to a Delivery which fails as a result of any action
or inaction on behalf of the Indenture Trustee or the Indenture Administrator.
(e) 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 Owner Trustee or the Indenture Administrator
with the consent of the Indenture Trustee, to instruct the Indenture Trustee or
the Indenture Administrator to make withdrawals and payments from the Trust
Accounts for the purpose of permitting the Servicer, the Administrator or the
Owner Trustee to carry out its respective duties hereunder or permitting the
Indenture Trustee or the Indenture Administrator or to carry out its duties
under the Indenture.
(f) On the Closing Date, the Indenture Administrator, for the
benefit of the Noteholders and the Trust, shall establish and maintain in the
name of the Indenture Trustee an
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Eligible Deposit Account (the "Collection Account"), bearing a designation
clearly indicating that the funds deposited therein are held for the benefit of
the Trust. 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 the Indenture Administrator. On the Closing Date, the
Administrator shall cause the Trust to deposit the Collection Account Initial
Deposit into the Collection Account.
(g) On the Closing Date, the Indenture Administrator, for the
benefit of the Noteholders and the Trust, shall establish and maintain in the
name of the Indenture Trustee an Eligible Deposit Account (the "Reserve
Account"), bearing a designation clearly indicating that the funds deposited
therein are held for the benefit of the Trust. 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 Indenture
Administrator. On the Closing Date, the Administrator shall cause the Trust to
deposit the Reserve Account Initial Deposit into the Reserve Account.
(h) On the Closing Date, the Indenture Administrator, for the
benefit of the Noteholders and the Trust, shall establish and maintain in the
name of the Indenture Trustee an Eligible Deposit Account (the "Capitalized
Interest Account"), bearing a designation clearly indicating that the funds
deposited therein are held for the benefit of the Trust. The Capitalized
Interest Account will initially be established as a segregated trust account in
the name of the Indenture Trustee with the corporate trust department of
Indenture Administrator. On the Closing Date, the Administrator shall cause the
Trust to deposit the Capitalized Interest Account Initial Deposit into the
Capitalized Interest Account.
Section 2.4 Collections. The Servicer shall remit within two
Business Days of receipt thereof to the Collection Account (i) all payments by
or on behalf of the Obligors with respect to the Trust Student Loans (other than
Purchased Student Loans), and all Liquidation Proceeds, both as collected during
the Collection Period and (ii) all amounts received by it from SLC in respect of
borrower benefits during the Collection Period, and the Eligible Lender Trustee
shall remit within two Business Days of receipt thereof to the Collection
Account any Interest Subsidy Payments and Special Allowance Payments received by
it with respect to the Trust Student Loans during the Collection Period.
Section 2.5 Application of Collections. (a) With respect to each
Trust Student Loan, all collections (including all Guarantee Payments) with
respect thereto for each Collection Period shall be applied to interest and
principal on such Trust Student Loan by the Servicer in accordance with its
customary practice.
(b) All Liquidation Proceeds shall be applied to the related Trust
Student Loan.
Section 2.6 Additional Deposits. The Servicer shall deposit or cause
to be deposited in the Collection Account the aggregate purchase price with
respect to Purchased Student Loans as determined pursuant to Section 3.5 of the
Servicing Agreement and all other amounts to be paid by the Servicer under
Section 3.5 of the Servicing Agreement on or before the third Business Day
before the related Distribution Date, and the Depositor shall deposit or cause
to be deposited in the Collection Account the aggregate Purchase Amount with
respect to
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Purchased Student Loans and all other amounts to be paid by the Depositor under
Section 6 of the Sale Agreement when such amounts are due.
Section 2.7 Distributions. (a) On or before the third Business Day
immediately preceding each Distribution Date, the Administrator shall calculate
all amounts required to be deposited into the Collection Account from the Trust
Accounts, as applicable, including the amount of all Investment Earnings to be
transferred from the Trust Accounts to the Collection Account, and the amount to
be distributed from the Collection Account as Available Funds and pursuant to
paragraph (a)(2) of the definition of Available Funds on the related
Distribution Date. On the fifth Business Day preceding each Monthly Servicing
Payment Date that is not a Distribution Date, as applicable, the Administrator
shall calculate all amounts required to be deposited into the Collection Account
from the Reserve Account and the Capitalized Interest Account and the amounts to
be distributed therefrom on the related Monthly Servicing Payment Date. In
addition to and in furtherance of the foregoing, the Administrator shall:
(i) calculate all amounts required to be deposited into the
Collection Account from the Reserve Account and the Capitalized Interest
Account on or before the second Business Day preceding each Distribution
Date; and
(ii) calculate, in each case, if and to the extent applicable, the
Class A Noteholders' Distribution Amount, the Class B Noteholders'
Distribution Amount and the Specified Reserve Account Balance on or before
the second Business Day immediately preceding such Distribution Date;
(b) The Administrator shall instruct the Indenture Administrator in
writing no later than the third Business Day preceding each Monthly Servicing
Payment Date that is not a Distribution Date (based on the information contained
in the Administrator's Officers' Certificate and the related Servicer's Report
delivered pursuant to Section 3.1(a) and (b) below) to distribute to the
Servicer, by 1:00 p.m. (New York time) on such Monthly Servicing Payment Date,
from and to the extent of the Available Funds on deposit in the Collection
Account the Primary Servicing Fee due with respect to the preceding calendar
month, and the Indenture Administrator shall comply with such instructions.
(c) The Administrator shall instruct the Indenture Administrator in
writing no later than one Business Day preceding each Distribution Date (based
on the information contained in the Administrator's Certificate and the related
Servicer's Report delivered pursuant to Sections 3.1(a) and 3.1(c) below) to
make the deposits and distributions set forth in Section 2.8 to the Persons or
to the account specified below by 1:00 p.m. (New York time) on such Distribution
Date (provided that funds are not required to be distributed pursuant to Section
5.4(b) of the Indenture). These deposits and distributions will be made to the
extent of the amount of Available Funds for that Distribution Date in the
Collection Account, plus (i) amounts transferred from the Capitalized Interest
Account pursuant to Section 2.9 and (ii) amounts transferred from the Reserve
Account pursuant to Section 2.10. The amount of Available Funds in the
Collection Account for each Distribution Date will be distributed pursuant to
the priority of distributions set forth under Section. 2.8 below. The Indenture
Administrator shall comply with such instructions received by the Administrator.
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The Administrator shall instruct the Indenture Administrator in
writing no later than one Business Day preceding each Distribution Date to
make the payments pursuant to paragraph (a)(2) of the definition of Available
Funds.
Section 2.8 Priority of Distributions. On each Distribution Date,
the Indenture Administrator shall first pay itself and the Indenture Trustee
their respective portions of the Indenture Trustee/Indenture
Administrator/Eligible Lender Trustee Fee for such Distribution Date plus all
other amounts due to them under Section 6.7 of the Indenture for such
Distribution Date, shall next pay the Owner Trustee the Owner Trustee Fee for
such Distribution Date plus all other amounts due to it (in its capacity as such
or individually) under the Trust Agreement for the related Distribution Date,
shall next pay the Eligible Lender Trustee its respective portions of the
Indenture Trustee/Indenture Administrator/Eligible Lender Trustee Fee for such
Distribution Date plus all other amounts due to it under the Eligible Lender
Trust Agreements for the related Distribution Date (such Trustee Fees and other
amounts not to exceed $30,000 per annum in the aggregate), and then to make the
following deposits and distributions in the amounts and in the order of priority
set forth below:
(a) to the Servicer, the Primary Servicing Fee due on that
Distribution Date;
(b) to the Class A Noteholders, the Class A Noteholders' Interest
Distribution Amount, ratably, without preference or priority of any kind among
the classes of Class A Notes, according to the amounts due and payable on the
Class A Notes for such interest;
(c) if the Class B Interest Subordination Condition is not in
effect, to the Class B Noteholders, the Class B Noteholders' Interest
Distribution Amount;
(d) sequentially, to the Class A-1 Noteholders, the Class A-2
Noteholders, the Class A-3 Noteholders, the Class A-4 Noteholders and the Class
A-5 Noteholders, in that order, until each such class is paid in full, the Class
A Noteholders' Principal Distribution Amount;
(e) if the Class B Interest Subordination Condition is in effect, to
the Class B Noteholders, the Class B Noteholders' Interest Distribution Amount;
(f) On or after the Stepdown Date, to the Class B Noteholders until
paid in full, the Class B Noteholders' Principal Distribution Amount; provided
that (x) if a Trigger Event has occurred and is continuing and (y) any Class A
Notes are Outstanding, then the remaining Available Funds will be distributed
sequentially to the Class A-1 Noteholders, the Class A-2 Noteholders, the Class
A-3 Noteholders, the Class A-4 Noteholders and the Class A-5 Noteholders, in
that order, until each such class is paid in full;
(g) to the Reserve Account, the amount, if any, necessary to
reinstate the balance of the Reserve Account to the Specified Reserve Account
Balance;
(h) to the Servicer, for any unpaid Carryover Servicing Fees;
(i) to the Indenture Trustee, the Indenture Administrator, the Owner
Trustee, the Eligible Lender Trustee, the paying agent in Ireland and the Irish
Stock Exchange (but only in respect of such paying agent's fees and fees
associated with listing the Class A Notes on the
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Irish Stock Exchange), ratably, for all amounts due to each of them under the
Basic Documents and not paid for the related Distribution Date; and
(j) to the holder of the Trust Certificate (as identified to the
Indenture Administrator by the Owner Trustee), any remaining amounts after
application of the preceding clauses.
Notwithstanding the foregoing, if the Trust Student Loans are not sold
pursuant to Section 6.1(a) of this Agreement or Section 4.4 of the Indenture,
the amount that would otherwise be paid to the holder of the Trust
Certificate shall be applied on such Distribution Date to pay as an
accelerated payment of principal on the Notes, first to the Class A
Noteholders in the same order and priority as is set forth in clause 2.8(d)
until the Outstanding Amount of the Class A Notes is paid in full and reduced
to zero, and then to the Class B Noteholders as set forth in clause 2.8(f)
above; provided that the amount of such distribution shall not exceed the
Outstanding Amount of the Class A Notes or the Class B Notes, as applicable,
after giving effect to all other payments in respect of principal of Class A
Notes and Class B Notes to be made on such Distribution Date.
Section 2.9 Capitalized Interest Account. (a) On the Closing Date,
the Issuer shall deposit the Capitalized Interest Account Initial Deposit into
the Capitalized Interest Account.
(b) In the event that the Available Funds, through the ______, 200__
Distribution Date, are insufficient to make the payments described under
Sections 2.8(b) and 2.8(c) above (or Section 2.8(b) if a Class B Interest
Subordination Condition is in effect) on any Distribution Date, the
Administrator shall instruct the Indenture Administrator in writing to withdraw
from the Capitalized Interest Account on each Distribution Date an amount equal
to such deficiency, and to distribute such amounts in the same order and
priority as is set forth in Sections 2.8(a) through 2.8(c) above (or Section
2.8(a), (b) and (e) if a Class B Interest Subordination Condition is in effect).
(c) On the ______, 200__ Distribution Date, the Administrator shall
instruct the Indenture Administrator in writing to withdraw from the Capitalized
Interest Account any amounts remaining on deposit in the Capitalized Interest
Account and deposit such amounts into the Collection Account.
Section 2.10 Reserve Account. (a) On the Closing Date, the
Issuer shall deposit the Reserve Account Initial Deposit into the Reserve
Account.
(b) In the event that the Primary Servicing Fee for any Monthly
Servicing Payment Date or Distribution Date exceeds the amount distributed to
the Servicer pursuant to Section 2.7(b) above and Section 2.8(a) above on such
Monthly Servicing Payment Date or Distribution Date, the Administrator shall
instruct the Indenture Administrator in writing to withdraw from the Reserve
Account on such Monthly Servicing Payment Date or Distribution Date an amount
equal to such excess, to the extent of funds available therein, and to
distribute such amount to the Servicer; provided, however, that, except as
provided in Section 2.10(g) below, amounts on deposit in the Reserve Account
will not be available to cover any unpaid Carryover Servicing Fees to the
Servicer.
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(c) In the event that the Available Funds, plus amounts on deposit
in the Capitalized Interest Account through the ______, 200__ Distribution Date,
are insufficient to make the payments described under Sections 2.8(a) through
2.8(c) above (or, if a Class B Interest Subordination Condition is in effect,
Section 2.8(a) and (b) from the Capitalized Interest Account and Section 2.8(a),
(b) and (e) from Available Funds) on any Distribution Date, the Administrator
shall instruct the Indenture Administrator in writing to withdraw from the
Reserve Account on each Distribution Date an amount equal to such deficiency, to
the extent of funds available therein after giving effect to clause (b) above,
and to distribute such amounts in the same order and priority as is set forth in
Sections 2.8(a) through 2.8(c) above (or Section 2.8(a), (b) and (e) if a Class
B Interest Subordination Condition is in effect).
(d) In the event that the Class A Noteholders' Principal
Distribution Amount on the Note Final Maturity Date with respect to any class of
Class A Notes exceeds the amount distributed to such Class A Noteholders
pursuant to Section 2.8(d) above on such date, the Administrator shall instruct
the Indenture Administrator in writing to withdraw from the Reserve Account on
such Note Final Maturity Date an amount equal to such deficiency, to the extent
of funds available therein after giving effect to clauses (b) and (c) above, and
to distribute such amount to the Class A Noteholders entitled thereto, in the
same order and priority as is set forth in Section 2.8(d) above.
(e) In the event that the Class B Noteholders' Principal
Distribution Amount on the Class B Maturity Date exceeds the amount distributed
to the Class B Noteholders pursuant to Section 2.8(f) on such date, the
Administrator shall instruct the Indenture Administrator in writing to withdraw
from the Reserve Account on the Class B Maturity Date an amount equal to such
excess, to the extent of funds available therein after giving effect to clauses
(b) through (d) above, and to distribute such amount to the Class B Noteholders
entitled thereto.
(f) After giving effect to clauses (b) through (e) above, if the
amount on deposit in the Reserve Account on any Distribution Date (after giving
effect to all deposits or withdrawals therefrom on such Distribution Date other
than pursuant to this Section 2.10(f)) is greater than the Specified Reserve
Account Balance for such Distribution Date, the Administrator shall instruct the
Indenture Administrator in writing to withdraw the amount on deposit in excess
of the Specified Reserve Account Balance and deposit such amount into the
Collection Account.
(g) On the final Distribution Date upon termination of the Trust and
following the payment in full of the Outstanding Amount of the Notes and of all
other amounts (other than Carryover Servicing Fees) owing or to be distributed
hereunder or under the Indenture to Noteholders or the Servicer, as applicable,
to the extent that Available Funds on such date are insufficient to make the
following payments, amounts remaining in the Reserve Account shall be used to
pay any Carryover Servicing Fees. Any amount remaining on deposit in the Reserve
Account after such payments have been made shall be distributed to the holder of
the Trust Certificate. The holder of the Trust Certificate shall in no event be
required to refund any amounts properly distributed pursuant to this Section
2.10(g).
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Anything in this Section 2.10 to the contrary notwithstanding, if the market
value of securities and cash in the Reserve Account is on any Distribution
Date sufficient to pay the remaining principal amount of and interest accrued
on the Notes, and to pay any unpaid Carryover Servicing Fee, such amount will
be so applied on such Distribution Date and the Administrator shall instruct
the Owner Trustee and the Indenture Administrator to make such payments.
Section 2.11 Investment Earnings; Other Trust Accounts. The
Administrator will instruct the Indenture Administrator to (1) withdraw all
Investment Earnings, if any, on deposit in each existing Trust Account on each
Distribution Date; (2) deposit such amounts into the Collection Account and (3)
include such amounts as Available Funds for that Distribution Date.
Section 2.12 Statements to Holder of the Trust Certificate and
Noteholders. No later than 11:00 a.m. (New York time) on the third Business Day
preceding a Distribution Date, the Administrator shall provide to the Indenture
Administrator, the Indenture Trustee and the Owner Trustee (with a copy to the
Rating Agencies) for the Indenture Administrator to forward on such succeeding
Distribution Date to each Noteholder of record and for the Owner Trustee to
forward on such succeeding Distribution Date to the holder of the Trust
Certificate of record a statement, setting forth at least the following
information as to the Notes and the Trust Certificate to the extent applicable:
(a) the amount of such distribution allocable to principal of each
class of the Notes;
(b) the amount of the distribution allocable to interest on each
class of the Notes;
(c) the amount of the distribution allocable to the Trust
Certificate, if any;
(d) the Pool Balance as of the close of business on the last day of
the preceding Collection Period;
(e) the aggregate outstanding principal balance of the Notes and the
Note Pool Factor as of such Distribution Date, after giving effect to payments
allocated to principal reported under clauses (a) and (c) above;
(f) the Note Rate for the next period for each class of Notes;
(g) the amount of the Primary Servicing Fee and any Carryover
Servicing Fee paid to the Servicer on such Distribution Date and on the two
preceding Monthly Servicing Payment Dates, and the amount, if any, of the
Carryover Servicing Fee remaining unpaid after giving effect to any such
payments;
(h) the amount of the aggregate Realized Losses, if any, for the
related Collection Period;
(i) the amount of any Note Interest Shortfall, if any, in each case
as applicable to each class of Notes, and the change in such amounts from the
preceding statement;
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(j) the aggregate Purchase Amounts for Trust Student Loans, if any,
that were repurchased by the Depositor or purchased by the Servicer or The
Student Loan Corporation from the Issuer during such Collection Period;
(k) the balance of the Reserve Account and the Capitalized Interest
Account on such Distribution Date, after giving effect to changes therein on
such Distribution Date; and
(l) the balance of Trust Student Loans that are delinquent in each
delinquency period as of the end of that Collection Period.
Each amount set forth pursuant to clauses (a), (b), (c), (e), (g),
(h) and (j) above shall be expressed as a dollar amount per $1,000 of original
principal balance of the applicable Note. A copy of the statements referred to
above may be obtained by any holder of the Trust Certificate or Note Owner by a
written request to the Owner Trustee or the Indenture Administrator,
respectively, addressed to the respective Corporate Trust Office.
Section 2.13 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 Owner
Trustee of the proposed action and the Owner Trustee shall not have withheld
consent or provided an alternative direction. For the purpose of the preceding
sentence, "non-ministerial matters" shall include:
(a) the amendment of or any supplement to the Indenture;
(b) 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 Trust Student Loans);
(c) the amendment, change or modification of the Basic Documents;
(d) the appointment of successor Note Registrars, successor Paying
Agents, successor Indenture Trustees and successor Indenture Administrators
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
(e) the removal of the Indenture Trustee.
Section 2.14 Exceptions. Notwithstanding anything to the contrary in
this Agreement, except as expressly provided herein, in the other Basic
Documents or in the Eligible Lender Trust Agreement (Issuer), the Administrator
shall not be obligated to, and shall not, (a) make any payments to the
Noteholders under the Basic Documents, (b) sell the Indenture Trust Estate
pursuant to Section 5.04 of the Indenture, (c) take any other action that the
Issuer directs the Administrator not to take on its behalf, (d) in connection
with its duties hereunder assume any indemnification obligation of any other
Person or (e) service the Trust Student Loans.
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Section 2.15 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 a portion
of the Primary Servicing Fee payable monthly (the "Administration Fees"), which
Administration Fees shall be solely an obligation of the Servicer.
Section 2.16 Servicer and Administrator Expenses. Each of the
Servicer and the Administrator shall be severally 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 Servicer or the
Administrator, as the case may be, and expenses incurred in connection with
distributions and reports to the Administrator or to the holder of the Trust
Certificate and the Noteholders, as the case may be.
Section 2.17 Appointment of Subadministrator. The Administrator may
at any time appoint a subadministrator to perform all or any portion of its
obligations as Administrator hereunder; provided, however, that any applicable
Rating Agency Condition shall have been satisfied in connection therewith;
provided, further, that the Administrator shall remain obligated and be liable
to the Issuer, the Owner Trustee, the Indenture Administrator, the Indenture
Trustee and the Noteholders for administering the Issuer in accordance with the
provisions hereof without diminution of such obligation and liability by virtue
of the appointment of such subadministrator and to the same extent and under the
same terms and conditions as if the Administrator alone were administering the
Issuer. The fees and expenses of the subadministrator shall be as agreed between
the Administrator and its subadministrator from time to time and none of the
Issuer, the Owner Trustee, the Indenture Administrator, the Indenture Trustee or
the Noteholders shall have any responsibility therefor. With respect to
satisfying the Rating Agency Condition referred to above, the term
"subadministrator" shall be deemed not to include systems providers, systems
developers or systems maintenance contractors, collection agencies, credit
bureaus, lock box providers, mail service providers and other similar types of
service providers.
ARTICLE III
Section 3.1 Administrator's Certificate; Servicer's Report. (a) On
or before the tenth day of each month (or, if any such day is not a Business
Day, on the next succeeding Business Day), the Servicer shall deliver to the
Administrator a Servicer's Report with respect to the preceding month containing
all information necessary for the Administrator to receive in connection with
the preparation of the Administrator's Officers' Certificate covering such
calendar month referred to in Section 3.1(b) below. On or before the tenth day
(or, if any such day is not a Business Day, on the next succeeding Business
Day), preceding each Distribution Date the Servicer shall deliver to the
Administrator a Servicer's Report with respect to the preceding Collection
Period containing all information necessary for the Administrator to receive in
connection with the preparation of the Administrator's Certificate covering such
Collection Period referred to in Section 3.1(c) below.
(b) On the third Business Day prior to each Monthly Servicing
Payment Date that is not a Distribution Date, the Administrator shall deliver to
the Owner Trustee, the Indenture Trustee and the Indenture Administrator, an
Administrator's Officers' Certificate
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containing all information necessary to pay the Servicer the Primary Servicing
Fee due on such Monthly Servicing Payment Date pursuant to Section 2.7(b) above.
(c) On the third Business Day prior to a Distribution Date, the
Administrator shall deliver to the Owner Trustee, the Indenture Trustee and the
Indenture Administrator, with a copy to the Rating Agencies, an Administrator's
Certificate containing all information necessary to make the distributions
pursuant to Sections 2.7 and 2.8 above, if applicable, for the Collection Period
preceding the date of such Administrator's Certificate.
(d) Prior to each Determination Date, the Administrator shall
determine the Note Rates and that will be applicable to the Distribution Date
following such Determination Date, in compliance with its obligation to prepare
and deliver an Administrator's Certificate on such Determination Date pursuant
to this Section 3.1. In connection therewith, the Administrator shall calculate
[_]-Month LIBOR or [_]-Month LIBOR, as applicable, for the first Accrual
Period and for each subsequent Accrual Period shall calculate, on each LIBOR
Determination Date during such Accrual Period, [_]-Month LIBOR.
(e) The Administrator shall furnish to the Issuer from time to time
such information regarding the Collateral as the Issuer shall reasonably
request.
Section 3.2 Annual Statement as to Compliance; Notice of Default;
Financial Statements. (a) Each of the Servicer and the Administrator shall
deliver to the Owner Trustee, the Indenture Trustee and the Indenture
Administrator on or before 90 days after the end of the fiscal year of the
Servicer and the Administrator, an Officer's Certificate of the Servicer or the
Administrator, as the case may be, dated as of December 31 of the preceding
year, stating that (i) a review of the activities of the Servicer or the
Administrator, as the case may be, during the preceding 12-month period (or, in
the case of the first such certificate, during the period from the Closing Date
to December 31, 20__) 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 Servicer or the Administrator, as the case
may be, has fulfilled its obligations in all material respects under this
Agreement and, with respect to the Servicer, the Servicing Agreement throughout
such year or, if there has been a material default in the fulfillment of any
such obligation, specifying each such material default known to such officers
and the nature and status thereof. The Indenture Administrator shall send a copy
of each such Officers' Certificate and each report referred to in Section 3.1 to
the Rating Agencies. A copy of each such Officers' Certificate and each report
referred to in Section 3.1 may be obtained by the holder of the Trust
Certificate, any Noteholder or any Note Owner by a request in writing to the
Owner Trustee addressed to its Corporate Trust Office, together with evidence
satisfactory to the Owner Trustee that such Person is one of the foregoing
parties. Upon the telephone request of the Owner Trustee, the Indenture
Administrator will promptly furnish the Owner Trustee a list of Noteholders as
of the date specified by the Owner Trustee.
(b) The Servicer shall deliver to the Owner Trustee, the Indenture
Trustee, the Indenture Administrator and the Rating Agencies, promptly after
having obtained knowledge thereof, but in no event later than five Business Days
thereafter, written notice in an Officers' Certificate of the Servicer of any
event which with the giving of notice or lapse of time, or both, would become a
Servicer Default under Section 5.01 of the Servicing Agreement.
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(c) The Administrator shall deliver to the Owner Trustee, the
Indenture Trustee, the Indenture Administrator and the Rating Agencies, promptly
after having obtained knowledge thereof, but in no event later than five
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 Sections 5.1(a) or (b) below
or would cause the Administrator to fail to meet the requirement of clause (a)
of Section 2.4 above.
(d) At any time that the Administrator is not an Affiliate of the
Depositor, the Administrator shall provide to the Owner Trustee, the Indenture
Trustee, the Indenture Administrator and the Rating Agencies (i) as soon as
possible and in no event more than 120 days after the end of each fiscal year of
the Administrator, audited financials as at the end of and for such year and
(ii) as soon as possible and in no event more than 30 days after the end of each
quarterly accounting period of the Administrator unaudited financials as at the
end of and for such period.
Section 3.3 Annual Independent Certified Public Accountants' Report.
Each of the Servicer and the Administrator shall cause registered public
accounting firm (as the term is used in Item 1122 of Regulation AB), which may
also render other services to the Servicer or the Administrator, as the case may
be, to deliver to the Owner Trustee and the Rating Agencies on or before March
31 of each year, a report addressed to the Servicer or the Administrator, as the
case may be, and to the Owner Trustee, to the effect that such firm has examined
certain documents and records relating to the servicing or the administration,
as the case may be, of the Trust Student Loans and of the Trust during the
preceding calendar year (or, in the case of the first such report, during the
period from the Closing Date to December 31, 20__) in evaluating the Servicer's
and Administrator's compliance with the Servicing Agreement and this Agreement,
respectively, and that, on the basis of the auditing and accounting procedures
considered appropriate under the circumstances and in accordance with standards
established by the American Institute of Certified Public Accountants, such firm
is of the opinion that the servicing and administration, as applicable, of the
Trust Student Loans and the Trust was conducted, in all material respects, in
compliance with the terms of the Servicing Agreement and this Agreement,
respectively, except for such exceptions as shall be set forth in such report.
Such report will also indicate that the firm is independent of the Servicer or
the Administrator, as the case may be, within the meaning of the Code of
Professional Ethics of the American Institute of Certified Public Accountants.
ARTICLE IV
Section 4.1 Representations of Administrator. The Student Loan
Corporation, as Administrator, makes the following representations on which the
Issuer is deemed to have relied in acquiring the Trust Student Loans. The
representations speak as of the execution and delivery of this Agreement and as
of the Closing Date and shall survive the sale of the Trust Student Loans to the
Owner 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
incorporated and validly existing under the laws of the State of Delaware, with
the power and authority to own
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its properties and to conduct its business as such properties are currently
owned and such business is presently conducted.
(b) Power and Authority. The Administrator has the corporate power
and authority to execute and deliver this 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 has been duly authorized,
executed and delivered by the Administrator and, assuming that it is duly
executed and delivered by parties hereto, constitutes a valid and binding
agreement of the Administrator, enforceable against the Administrator in
accordance with its terms; except that the enforceability hereof may be subject
to (a) bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect relating to creditors' rights generally, and (b)
general principles of equity (regardless of whether such enforceability is
considered in a proceeding at law or in equity) and (c) with respect to rights
to indemnity hereunder, limitations of public policy under applicable securities
laws.
(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 articles 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 (other than pursuant to the Basic Documents); 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.
(e) No Proceedings. There are no legal or governmental proceedings
or investigations pending against the Administrator or, to its best knowledge,
threatened or contemplated against the Administrator or to which the
Administrator or any of its subsidiaries is party or of which any property of
the Administrator or any of its subsidiaries is the subject, before any court,
regulatory body, administrative agency or other governmental instrumentality
having jurisdiction over the Administrator or its properties or by any other
party: (i) asserting the invalidity of this Agreement or any of the other Basic
Documents, the Notes or the Trust Certificate, (ii) seeking to prevent the
issuance of the Notes or the Trust Certificate or the consummation of any of the
transactions contemplated by this Agreement or any of the other Basic Documents,
(iii) seeking any determination or ruling that could reasonably be expected to
have a material and adverse effect on the performance by the Administrator of
its obligations under, or the validity or enforceability of, this Agreement, any
of the other Basic Documents, the Trust, the Notes or the Trust Certificate or
(iv) seeking to affect adversely the Federal or state income tax attributes of
the Issuer, the Notes or the Trust Certificate.
(f) All Consents. All authorizations, consents, orders or approvals
of or registrations or declarations with any court, regulatory body,
administrative agency or other
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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 been duly obtained, effected or given and
are in full force and effect.
Section 4.2 Liability of Administrator; Indemnities. (a) The
Administrator shall be liable in accordance herewith only to the extent of the
obligations specifically undertaken by the Administrator under this Agreement.
(b) The Administrator shall indemnify, defend and hold harmless the
Issuer, the holder of the Trust Certificate, the Eligible Lender Trustee, the
Indenture Trustee, the Indenture Administrator, the Owner Trustee (in its
individual capacity and as trustee) and the Noteholders and any of the officers,
directors, employees and agents of the Issuer from and against any and all
costs, expenses, losses, claims, damages and liabilities to the extent that such
cost, expense, loss, claim, damage or liability arose out of, or was imposed
upon any such Person through, the gross 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.
(c) The Administrator shall indemnify the Indenture Trustee and the
Indenture Administrator in their individual capacities and any of their
officers, directors, employees and agents against any and all loss, liability,
claim or expense (including, without limitation, costs and expenses of
litigation and of investigation counsel fees, damages, judgments and amounts
paid in settlement) incurred by them in connection with the performance of their
duties under the Indenture and the other Basic Documents. The Indenture Trustee
and the Indenture Administrator shall notify the Issuer and the Administrator
promptly of any claim for which they may seek indemnity. Failure by the
Indenture Trustee or the Indenture Administrator to so notify the Issuer and the
Administrator shall not relieve the Issuer or the Administrator of its
obligations hereunder and under the other Basic Documents. Neither the Issuer
nor the Administrator need to reimburse any expense or indemnify against any
loss, liability, claim or expense incurred by the Indenture Trustee or the
Indenture Administrator through its own willful misconduct, negligence or bad
faith.
(d) The Administrator shall indemnify the Owner Trustee, the
Indenture Trustee, the Indenture Administrator and the Eligible Lender Trustee
in their individual capacities and any of their officers, directors, employees
and agents against any and all loss, liability, claims, damages, costs,
penalties, taxes (excluding taxes payable by it on any compensation received by
it for its services as trustee) or expense (including attorneys' fees) incurred
by them in connection with the performance of their duties under the Trust
Agreement and the Eligible Lender Trust Agreements, respectively, and the other
Basic Documents.
(e) Without limiting the generality of the foregoing, the
Administrator shall indemnify the Owner Trustee in its individual capacity and
any of its officers, directors, employees and agents against any and all
liability relating to or resulting from any of the following:
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(i) any claim that the Trust Student Loans (or any guarantee with
respect thereto) are delinquent, uncollectable, uninsured, illegal,
invalid or unenforceable;
(ii) any claim that the Trust Student Loans have not been made,
administered, serviced or collected in accordance with applicable federal
and state laws or the requirements of any Guarantor;
(iii) any claim that any original note or other document evidencing
or relating to the Trust Student Loans has been lost, misplaced or
destroyed;
(iv) any claim for failure to comply with the provisions of 34 CFR
Sec. 682.203(b); and
(v) any and all liabilities, obligations, losses, damages, taxes
(other than taxes incurred as the result of the payment of fees and
expenses pursuant to Section 8.01 of the Trust Agreement), claims,
actions, suits, costs, expenses and disbursements (including legal fees
and expenses) of any kind and nature whatsoever which may be imposed on,
incurred by or asserted at any time against the Owner Trustee
(individually or otherwise) (whether or not indemnified against by other
parties) in any way relating to or arising out of the Trust Agreement, the
Eligible Lender Trust Agreement (Issuer), any Basic Document, the
administration of the Trust Estate or the action or inaction of the Owner
Trustee thereunder.
(f) The Owner Trustee shall notify the Administrator promptly of any
claim for which it may seek indemnity. Failure by the Owner Trustee to so notify
the Administrator shall not relieve the Administrator of its obligations
hereunder and under the other Basic Documents. The Administrator shall defend
the claim and the Administrator shall not be liable for the legal fees and
expenses of the Owner Trustee after it has assumed such defense; provided,
however, that in the event that there may be a conflict between the positions of
the Owner Trustee and the Administrator in conducting the defense of such claim,
the Owner Trustee shall be entitled to separate counsel the fees and expenses of
which shall be paid by the Administrator on behalf of the Issuer. Neither the
Issuer nor the Administrator need reimburse any expense or indemnify against any
loss, liability or expense incurred by the Owner Trustee through the Owner
Trustee's own willful misconduct, gross negligence or bad faith.
(g) The Depositor shall pay reasonable compensation to the Indenture
Trustee, the Indenture Administrator, the Eligible Lender Trustee and the Owner
Trustee and shall reimburse the Indenture Trustee, the Indenture Administrator,
the Eligible Lender Trustee and the Owner Trustee for all reasonable expenses,
disbursements and advances.
(h) For purposes of this Section 4.2, in the event of the
termination of the rights and obligations of the Administrator (or any successor
thereto pursuant to Section 4.3 below) as Administrator pursuant to Section 5.1
below, 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 5.2 below.
(i) Indemnification under this Section 4.2 shall survive the
resignation or removal of the Owner Trustee, the Indenture Trustee, the Eligible
Lender Trustee or the
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Indenture Administrator or the termination of this Agreement and shall include
reasonable fees and expenses of counsel and expenses of litigation. If the
Administrator shall have made any indemnity payments pursuant to this Section
and the Person to or on behalf of whom such payments are made thereafter
collects any of such amounts from others, such Person shall promptly repay such
amounts to the Administrator, without interest.
Section 4.3 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 The Student Loan Corporation, executes an
agreement that states expressly that such Person assumes 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 4.1 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 surviving
Administrator, if other than The Student Loan Corporation, shall have delivered
to the Owner Trustee, the Indenture Trustee and the Indenture Administrator 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 4.3 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) unless The Student Loan Corporation is the surviving entity,
such transaction will not result in a material adverse Federal or state tax
consequence to the Issuer, the Noteholders or the holder of the Trust
Certificate and (v) unless The Student Loan Corporation is the surviving entity,
the Administrator shall have delivered to the Owner Trustee, the Indenture
Trustee and the Indenture Administrator 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 interest of the Owner Trustee, the
Indenture Trustee and Indenture Administrator, respectively, in the Trust
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. Anything in this Section 4.3 to the contrary
notwithstanding, the Administrator may at any time assign its rights,
obligations and duties under this Agreement to an Affiliate provided that the
Rating Agencies confirm that such assignment will not result in a downgrading or
a withdrawal of the ratings then applicable to the Notes.
Section 4.4 Limitation on Liability of Seller, Administrator and
Others. (a) Neither the Administrator nor any of its directors, officers,
employees or agents shall be under any liability to the Issuer, the Noteholders
or the holder of the Trust Certificate, or to the Indenture Trustee, the
Indenture Administrator or the Owner Trustee 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
these provisions shall not protect the Administrator or any such person against
any liability that would otherwise be
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imposed by reason of willful misfeasance, bad faith or negligence in the
performance of duties or by reason of reckless disregard of obligations and
duties under this Agreement. The Administrator and any of its directors,
officers, employees or agents may rely in good faith on the advice of counsel or
on any document of any kind, prima facie properly executed and submitted by any
Person respecting any matters arising hereunder.
(b) Except as provided in this 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 Trust 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 other Basic Documents
and the interests of the holder of the Trust Certificate under this Agreement
and the Noteholders under the Indenture and under this Agreement.
Section 4.5 Administrator May Own Certificates or Notes. The
Administrator and any Affiliate thereof may in its individual or any other
capacity become the owner or pledgee of the Trust Certificate or Notes with the
same rights as it would have if it were not the Administrator or an Affiliate
thereof, except as expressly provided herein in any other Basic Document.
Section 4.6 The Student Loan Corporation Not to Resign as
Administrator. Subject to the provisions of Section 4.3 above, The Student Loan
Corporation 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 The Student Loan Corporation or its
properties. Notice of any such determination permitting or requiring the
resignation of The Student Loan Corporation shall be communicated to the Owner
Trustee and the Indenture Administrator 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 Owner Trustee and the
Indenture Administrator concurrently with or promptly after such notice. No such
resignation shall become effective until the Indenture Administrator or a
successor to the Administrator shall have assumed the responsibilities and
obligations of The Student Loan Corporation in accordance with Section 5.2
below. Anything in this Section 4.6 to the contrary notwithstanding, the
Administrator may resign at any time subsequent to the assignment of its rights,
duties and obligations hereunder pursuant to Section 4.3 above.
ARTICLE V
Section 5.1 Administrator Default. If any one of the following
events (an "Administrator Default") shall occur and be continuing:
(a) (i) in the event that daily deposits into the Collection Account
are not required, any failure by the Administrator to deliver to the Indenture
Administrator for deposit in
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the Trust Accounts any Available Funds required to be paid on or before the
Business Day immediately preceding any Monthly Servicing Payment Date, or
(ii) any failure by the Administrator to direct the Indenture
Administrator to make any required distributions from any of the Trust
Accounts on any Monthly Servicing Payment Date or Distribution Date, which
failure in case of either clause (i) or (ii) continues unremedied for five
Business Days after written notice of such failure is received by the
Administrator from the Indenture Administrator or the Owner 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 term, covenant or agreement of the
Administrator set forth in this Agreement or any other Basic Document, which
failure shall (i) materially and adversely affect the rights of Noteholders or
the holder of the Trust Certificate and (ii) continue unremedied for a period of
60 days after the date on which written notice of such failure, requiring the
same to be remedied, shall have been given (A) to the Administrator by the
Indenture Administrator or the Owner Trustee or (B) to the Administrator, the
Indenture Administrator and the Owner Trustee by the Noteholders or the holder
of the Trust Certificate, as applicable, representing not less than 50% of the
Outstanding Amount of the Notes or representing the whole of the outstanding
Trust Certificate (including such Trust Certificate if owned by the Depositor);
(c) an Insolvency Event occurs with respect to the Administrator; or
(d) any failure by the Administrator to deliver any information,
report, certification or accountants' letter when and as required under Article
IX which continues unremedied for fifteen (15) calendar days after the date on
which such information, report, certification or accountants' letter was
required to be delivered
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 50% of the Outstanding Amount of the Notes, by notice then given
in writing to the Administrator (and to the Indenture Trustee and the Owner
Trustee if given by the Noteholders) may terminate all the rights and
obligations (other than the obligations set forth in Section 4.2 above) 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, the Trust Certificate, the Trust
Student Loans or otherwise, shall, without further action, pass to and be vested
in the Indenture Trustee or such successor to the Administrator as may be
appointed under Section 5.2 below; and, without limitation, the Indenture
Trustee and the Owner 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 to the Administrator, the Indenture Administrator
and the Owner 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) incurred in connection with
amending this Agreement to reflect such succession as Administrator pursuant to
this Section shall be paid by the predecessor Administrator (other than the
Indenture Trustee acting
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as the Administrator under this Section 5.1) upon presentation of reasonable
documentation of such costs and expenses. Upon receipt of notice of the
occurrence of an Administrator Default, the Owner Trustee shall give notice
thereof to the Rating Agencies.
Section 5.2 Appointment of Successor. (a) Upon receipt by the
Administrator of notice of termination pursuant to Section 5.1 above, 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 under this Agreement 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 receipt of such notice and, in the case of
resignation, until the later of (i) the date 120 days from the delivery to the
Owner Trustee, the Indenture Trustee and the Indenture Administrator 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 unable to act as Administrator as
specified in the notice of resignation and accompanying Opinion of Counsel (the
"Transfer Date"). In the event of the termination hereunder of the
Administrator, the Issuer shall appoint a successor to the Administrator
acceptable to the Indenture Administrator, and the successor to the
Administrator shall accept its appointment by a written assumption in form
acceptable to the Indenture Administrator. In the event that a successor to the
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 to the Administrator and the Indenture Trustee shall be
entitled to the Administration Fee. Notwithstanding the above, the Indenture
Trustee shall, if it shall be unwilling or legally unable so to act, appoint or
petition a court of competent jurisdiction to appoint any established
institution whose regular business shall include the servicing of student loans,
as the successor to the Administrator under this Agreement.
(b) Upon appointment, the successor to the Administrator (including
the Indenture Administrator acting as successor to the 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 to the Administrator (which
shall not exceed the Administration Fee unless such compensation arrangements
will not result in a downgrading or withdrawal of any rating on the Notes or the
Trust Certificate by any Rating Agency) and all the rights granted to the
predecessor Administrator by the terms and provisions of this Agreement.
(c) Notwithstanding the foregoing or anything to the contrary herein
or in the other Basic Documents, the Indenture Administrator, to the extent it
is acting as successor to the Administrator pursuant hereto and thereto, shall
be entitled to resign to the extent a qualified successor to the Administrator
has been appointed and has assumed all the obligations of the Administrator in
accordance with the terms of this Agreement and the other Basic Documents.
Section 5.3 Notification to Noteholders and Holder of Trust
Certificate. Upon any termination of, or appointment of a successor to, the
Administrator pursuant to this Article V, the Owner Trustee shall give prompt
written notice thereof to the holder of the Trust Certificate and the Indenture
Administrator shall give prompt written notice thereof to
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Noteholders 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).
Section 5.4 Waiver of Past Defaults. The Noteholders of Notes
evidencing a majority of the Outstanding Amount of the Notes (or the holder of
the Trust Certificate, in the case of any default which does not adversely
affect the Indenture Administrator or the Noteholders) may, on behalf of all
Noteholders and the holder of the Trust Certificate, 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. No such waiver shall extend to any subsequent or other default or
impair any right consequent thereto.
ARTICLE VI
Section 6.1 Termination. (a) Optional Purchase of All Trust Student
Loans. The Administrator shall notify the Servicer, the Depositor, the Issuer
and the Indenture Administrator in writing, within 15 days after the last day of
any Collection Period as of which the then outstanding Pool Balance is 12% or
less of the Initial Pool Balance, of the percentage that the then outstanding
Pool Balance bears to the Initial Pool Balance. As of the last day of any
Collection Period immediately preceding a Distribution Date as of which the then
outstanding Pool Balance is 10% or less of the Initial Pool Balance, the
Eligible Lender Trustee on behalf and at the direction of the Servicer, or any
other "eligible lender" (within the meaning of the Higher Education Act)
designated by the Servicer in writing to the Owner Trustee and the Indenture
Administrator, shall have the option to purchase the Trust Estate, other than
the Trust Accounts. To exercise such option, the Servicer shall deposit,
pursuant to Section 2.6 above, in the Collection Account an amount equal to the
aggregate Purchase Amount for the Trust Student Loans and the related rights
with respect thereto, plus the appraised value of any such other property held
by the Trust other than the Trust Accounts, such value to be determined by an
appraiser mutually agreed upon by the Servicer, the Owner Trustee and the
Indenture Administrator, and shall succeed to all interests in and to the Trust;
provided, however, that the Servicer may not effect such purchase if such
aggregate Purchase Amounts do not equal or exceed the Minimum Purchase Amount
plus any Carryover Servicing Fees. In the event the Servicer fails to notify the
Owner Trustee, the Indenture Trustee and the Indenture Administrator in writing
prior to the acceptance by the Indenture Trustee of a bid to purchase the Trust
Estate pursuant to Section 4.4 of the Indenture that the Servicer intends to
exercise its option to purchase the Trust Estate, the Servicer shall be deemed
to have waived its option to purchase the Trust Estate as long as the Servicer
has received 5 business days' notice from the Indenture Trustee as provided in
Section 4.4 of the Indenture.
(b) Notice. Notice of any termination of the Trust shall be given by
the Administrator to the Owner Trustee, the Indenture Trustee and the Indenture
Administrator as soon as practicable after the Administrator has received notice
thereof.
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(c) Succession. Following the satisfaction and discharge of the
Indenture and the payment in full of the principal of and interest on the Notes,
the holder of the Trust Certificate shall succeed to the rights of the
Noteholders hereunder and the Owner Trustee shall succeed to the rights of, and
assume the obligations of, the Indenture Trustee and the Indenture Administrator
pursuant to this Agreement and any other Basic Documents.
ARTICLE VII
Section 7.1 Protection of Interests in Trust. (a) The Administrator,
on behalf of the Depositor, shall execute and file such financing statements and
cause to be executed and filed such continuation statements, all in such manner
and in such places as may be required by law fully to preserve, maintain, and
protect the interest of the Issuer, the Owner Trustee and the Indenture Trustee
in the Trust Student Loans and in the proceeds thereof. The Administrator shall
deliver (or cause to be delivered) to the Owner Trustee, the Indenture Trustee
and the Indenture Administrator file-stamped copies of, or filing receipts for,
any document filed as provided above, as soon as available following such
filing.
(b) Neither the Depositor nor the Servicer shall change its name,
identity or corporate structure in any manner that would, could or might make
any financing statement or continuation statement filed in accordance with
paragraph (a) above seriously misleading within the meaning of Section 9-402(7)
of the UCC, unless it shall have given the Owner Trustee, the Indenture Trustee
and the Indenture Administrator at least five days' prior written notice thereof
and shall have promptly filed appropriate amendments to all previously filed
financing statements or continuation statements.
(c) Each of the Depositor and the Servicer shall have an obligation
to give the Owner Trustee, the Indenture Trustee and the Indenture Administrator
at least 60 days' prior written notice of any relocation of its principal
executive office if, as a result of such relocation, the applicable provisions
of the UCC would require the filing of any amendment of any previously filed
financing or continuation statement or of any new financing statement and shall
promptly file any such amendment. The Servicer shall at all times maintain each
office from which it shall service Trust Student Loans, and its principal
executive office, within the United States of America.
(d) The Servicer shall maintain accounts and records as to each
Trust Student Loan accurately and in sufficient detail to permit (i) the reader
thereof to know at any time the status of such Trust Student Loan, including
payments and recoveries made and payments owing (and the nature of each) and
(ii) reconciliation between payments or recoveries on (or with respect to) each
Trust Student Loan and the amounts from time to time deposited by the Servicer
in the Collection Account in respect of such Trust Student Loan.
(e) The Servicer shall maintain its computer systems so that, from
and after the time of sale of the Trust Student Loans to the Owner Trustee on
behalf of the Issuer, the Servicer's master computer records (including any
backup archives) that refer to a Trust Student Loan shall indicate clearly the
interest of the Issuer, the Owner Trustee and the Indenture Trustee in such
Trust Student Loan and that such Trust Student Loan is owned by the Owner
Trustee on behalf of the Issuer and has been pledged to the Indenture Trustee.
Indication of the Issuer's, the
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Owner Trustee's and the Indenture Trustee's interest in a Trust Student Loan
shall be deleted from or modified on the Servicer's computer systems when, and
only when, the related Trust Student Loan shall have been paid in full or
repurchased.
(f) If at any time the Depositor or the Administrator shall propose
to sell, grant a security interest in, or otherwise transfer any interest in
student loans to any prospective purchaser, lender or other transferee, the
Servicer shall give to such prospective purchaser, lender or other transferee
computer tapes, records or printouts (including any restored from backup
archives) that, if they refer in any manner whatsoever to any Trust Student
Loan, indicate clearly that such Trust Student Loan has been sold and is owned
by the Owner Trustee on behalf of the Issuer and has been pledged to the
Indenture Trustee.
(g) Upon reasonable notice, the Servicer shall permit the Indenture
Administrator and the Indenture Trustee and its agents at any time during normal
business hours to inspect, audit and make copies of and abstracts from the
Servicer's records regarding any Trust Student Loan.
(h) Upon request, at any time the Owner Trustee or the Indenture
Administrator have reasonable grounds to believe that such request would be
necessary in connection with its performance of its duties under the Basic
Documents, the Servicer shall furnish to the Owner Trustee or to the Indenture
Administrator (in each case, with a copy to the Administrator and the Indenture
Trustee), within five Business Days, a list of all Trust Student Loans (by
borrower social security number, type of loan and date of issuance) then held as
part of the Trust, and the Administrator shall furnish to the Owner Trustee or
to the Indenture Administrator (with a copy to the Indenture Trustee), within 20
Business Days thereafter, a comparison of such list to the list of Trust Student
Loans set forth in Schedule A to the Indenture as of the Closing Date, and, for
each Trust Student Loan that has been removed from the pool of loans held by the
Owner Trustee on behalf of the Issuer, information as to the date as of which
and circumstances under which each such Trust Student Loan was so removed.
(i) The Depositor shall deliver to the Owner Trustee, the Indenture
Trustee and the Indenture Administrator:
(i) promptly after the execution and delivery of this Agreement and
of each amendment thereto and on each Transfer Date, an Opinion of Counsel
either (1) stating that, in the opinion of such counsel, all financing
statements and continuation statements have been executed and filed that
are necessary fully to preserve and protect the interest of the Owner
Trustee and the Indenture Trustee in the Trust Student Loans, and reciting
the details of such filings or referring to prior Opinions of Counsel in
which such details are given, or (2) stating that, in the opinion of such
counsel, no such action shall be necessary to preserve and protect such
interest; and
(ii) within 120 days after the beginning of each calendar year
beginning with the first calendar year beginning more than three months
after the Cutoff Date, an Opinion of Counsel, dated as of a date during
such 120-day period, either (1) stating that, in the opinion of such
counsel, all financing statements and continuation statements have been
executed and filed that are necessary fully to preserve and protect the
interest of the
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Owner Trustee and the Indenture Trustee in the Trust Student Loans, and
reciting the details of such filings or referring to prior Opinions of
Counsel in which such details are given, or (2) stating that, in the
opinion of such counsel, no such action shall be necessary to preserve and
protect such interest; provided that a single Opinion of Counsel may be
delivered in satisfaction of the foregoing requirement and that of Section
3.6(b) of the Indenture.
(j) Each Opinion of Counsel referred to in subclause (i) or (ii) of
clause (i) above shall specify (as of the date of such opinion and given all
applicable laws as in effect on such date) any action necessary to be taken in
the following year to preserve and protect such interest.
(k) The Depositor shall, to the extent required by applicable law,
cause the Trust Certificate and the Notes to be registered with the Commission
pursuant to Section 12(b) or Section 12(g) of the Exchange Act within the time
periods specified in such sections.
ARTICLE VIII
Section 8.1 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 Owner 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
Owner Trustee in any way and shall not otherwise be deemed an agent of the
Issuer or the Owner Trustee.
Section 8.2 No Joint Venture. Nothing contained in this Agreement
(a) shall constitute the Administrator and either of the Issuer or the Owner
Trustee as members of any partnership, joint venture, association, syndicate,
unincorporated business or other separate entity, (b) shall be construed to
impose any liability as such on any of them or (c) shall be deemed to confer on
any of them any express, implied or apparent authority to incur any obligation
or liability on behalf of the others.
Section 8.3 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 or entity even though such person or entity
may engage in business activities similar to those of the Issuer, the Owner
Trustee, the Indenture Trustee or the Indenture Administrator.
Section 8.4 Powers of Attorney. The Owner Trustee, the Indenture
Trustee and the Indenture Administrator shall upon the written request of the
Administrator furnish the Administrator with any powers of attorney and other
documents reasonably necessary or appropriate to enable the Administrator to
carry out its administrative duties hereunder.
Section 8.5 Amendment. (a) This Agreement (other than Sections 2.1
and 2.2 above) may be amended by the Issuer, the Servicer or the Administrator,
without the consent of any of the Noteholders, to cure any ambiguity, to correct
or supplement any provisions in this
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Agreement or for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions in this Agreement or of modifying in
any manner the rights of the Noteholders; provided, however, that such action
shall not, as evidenced by an Opinion of Counsel delivered to the Owner Trustee,
the Indenture Trustee and the Indenture Administrator, adversely affect in any
material respect the interests of any Noteholder or of the holder of the Trust
Certificate.
(b) Sections 2.1 and 2.2 may be amended from time to time by a
written amendment duly executed and delivered by the Issuer, the holder of the
Trust Certificate, the Owner Trustee, the Indenture Trustee and the
Administrator, without the consent of the Noteholders, for the purpose of adding
any provision to or changing in any manner or eliminating any of the provisions
of such Article; provided that such amendment will not, in an Opinion of Counsel
obtained on behalf of the Issuer and satisfactory to the Indenture Trustee and
the Owner Trustee, materially and adversely affect the interest of any
Noteholder.
(c) This Agreement (other than Sections 2.1 and 2.2 above) may also
be amended from time to time by the Issuer, the Servicer, the Administrator and
the Owner Trustee, and Sections 2.1 and 2.2 above may also be amended by the
Owner Trustee and the Administrator, with the consent of the Noteholders of
Notes evidencing a majority of 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
the Noteholders; provided, however, that no such amendment shall (i) increase or
reduce in any manner the amount of, or accelerate or delay the timing of,
collections of payments with respect to Trust Student Loans or distributions
that shall be required to be made for the benefit of the Noteholders or (ii)
reduce the aforesaid percentage of the Outstanding Amount of the Notes, the
Noteholders of which are required to consent to any such amendment, without the
consent of all outstanding Noteholders.
(d) Promptly after the execution of any such amendment (or, in the
case of the Rating Agencies, fifteen days prior thereto), the Owner Trustee
shall furnish written notification of the substance of such amendment to the
holder of the Trust Certificate, the Indenture Trustee and each of the Rating
Agencies.
(e) It shall not be necessary for the consent of Noteholders
pursuant to this Section to approve the particular form of any proposed
amendment or consent, but it shall be sufficient if such consent shall approve
the substance thereof.
(f) Prior to the execution of any amendment to this Agreement, the
Owner Trustee, the Indenture Trustee and the Indenture Administrator shall be
entitled to receive and rely upon an Opinion of Counsel stating that the
execution of such amendment is authorized or permitted by this Agreement and the
Opinion of Counsel referred to in Section 7.1(i) above. The Owner Trustee, the
Indenture Trustee and the Indenture Administrator may, but shall not be
obligated to, enter into any such amendment which affects the Owner Trustee's,
the Indenture Trustee's or the Indenture Administrator's, as applicable, own
rights, duties or immunities under this Agreement or otherwise.
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Section 8.6 Assignment. Notwithstanding anything to the contrary
contained herein, except as provided in Section 4.3 of the Servicing Agreement
and Section 4.3 of this Agreement, this Agreement may not be assigned by the
Administrator or the Servicer. This Agreement may be assigned by the Owner
Trustee only to its permitted successor pursuant to the Trust Agreement.
Section 8.7 Limitations on Rights of Others. The provisions of this
Agreement are solely for the benefit of the Servicer, the Issuer, and the Owner
Trustee (individually and as Owner Trustee) and for the benefit of the holder of
the Trust Certificate, the Indenture Trustee (individually and as Indenture
Trustee), the Indenture Administrator (individually and as Indenture
Administrator) and the Noteholders, as third party beneficiaries, and nothing in
this Agreement, whether express or implied, shall be construed to give to any
other Person any legal or equitable right, remedy or claim in the Trust Estate
or under or in respect of this Agreement or any covenants, conditions or
provisions contained herein.
Section 8.8 Assignment to Indenture Trustee. The Depositor hereby
acknowledges and consents to any Grant by the Issuer to the Indenture Trustee
pursuant to the Indenture for the benefit of the Noteholders of a security
interest in all right, title and interest of the Issuer in, to and under the
Trust Student Loans and the assignment of any or all of the Issuer's rights and
obligations under this Agreement and the Sale Agreement and the Depositor's
rights under the Purchase Agreement to the Indenture Trustee. The Servicer
hereby acknowledges and consents to the assignment by the Issuer to the
Indenture Trustee pursuant to the Indenture for the benefit of the Noteholders
of any and all of the Issuer's rights and obligations under this Agreement and
under the Servicing Agreement.
Section 8.9 Nonpetition Covenants. (a) Notwithstanding any prior
termination of this Agreement, the Servicer, the Administrator, the Indenture
Trustee, the Indenture Administrator and the Owner Trustee shall not, prior to
the date which is 367 days after the payment in full of the Notes, acquiesce,
petition or otherwise invoke or cause the Issuer to invoke the process of any
court or government authority for the purpose of commencing or sustaining a case
against the Issuer under any Federal or state bankruptcy, insolvency or similar
law or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Issuer or any substantial part of
its property, or ordering the winding up or liquidation of the affairs of the
Issuer. The foregoing shall not limit the rights of the Servicer, the
Administrator, the Owner Trustee, the Indenture Trustee and the Indenture
Administrator to file any claim in, or otherwise take any action with respect
to, any insolvency proceeding that was instituted against the Issuer by a Person
other than the Servicer, the Administrator, the Depositor or the Owner Trustee.
(b) Notwithstanding any prior termination of this Agreement, the
Servicer, the Administrator, the Issuer and the Owner Trustee shall not, prior
to the date which is 367 days after the payment in full of the Notes, acquiesce,
petition or otherwise invoke or cause the Depositor to invoke the process of any
court or government authority for the purpose of commencing or sustaining a case
against the Depositor under any insolvency or similar law or appointing a
receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official of the Depositor or any substantial part of its property, or
ordering the winding up or liquidation of the affairs of the Depositor. The
foregoing shall not limit the rights of the
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Servicer, the Administrator, the Issuer and the Owner Trustee to file any claim
in, or otherwise take any action with respect to, any insolvency proceeding that
was instituted against the Issuer by a Person other than the Servicer, the
Administrator, the Issuer or the Owner Trustee.
Section 8.10 Limitation of Liability of Owner Trustee, Indenture
Administrator and Indenture Trustee. (a) Notwithstanding anything contained
herein to the contrary, this Agreement has been executed and delivered by
____________, not in its individual capacity but solely in its capacity as Owner
Trustee of the Issuer, and in no event shall ____________, in its individual
capacity have any liability for the representations, warranties, covenants,
agreements or other obligations of the Issuer or the Owner Trustee 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.
(b) The rights of and protections of the Indenture Trustee and the
Indenture Administrator under the Indenture shall be incorporated as though
explicitly set forth herein.
Section 8.11 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO THE
CONFLICT OF LAW PROVISIONS THEREOF, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF
THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 8.12 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.
Section 8.13 Counterparts. This Agreement may be executed in
counterparts, each of which when so executed shall together constitute but one
and the same agreement.
Section 8.14 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. Each of the parties named on the signature pages to this
Agreement by execution of this Agreement agrees, for the benefit of the
Administrator and the other signatories hereto, to be bound by the terms of this
Agreement and the other Basic Documents to the extent reference is made in such
document to such party.
Section 8.15 Trust Certificate. The holder of the Trust Certificate,
as evidenced by its agreement to accepts the rights conferred under the Trust
Certificate, is hereby deemed to accept all obligations of the Depositor under
this Agreement.
ARTICLE IX
Section 9.1 Intent of the Parties; Reasonableness. The Issuer and
the Administrator acknowledge and agree that the purpose of Article IX of this
Agreement is to
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facilitate compliance by the Issuer with the provisions of Regulation AB and
related rules and regulations of the Commission.
Neither the Issuer nor the Administrator shall exercise its right to
request delivery of information or other performance under these provisions
other than in good faith, or for purposes other than compliance with the
Securities Act, the Exchange Act and the rules and regulations of the Commission
thereunder (or the provision in a private offering of disclosure comparable to
that required under the Securities Act). The Administrator acknowledges that
interpretations of the requirements of Regulation AB may change over time,
whether due to interpretive guidance provided by the Commission or its staff,
consensus among participants in the asset-backed securities markets, advice of
counsel, or otherwise, and agrees to comply with requests made by the Eligible
Lender Trustee, the Indenture Trustee, the Servicer, or any other party to the
Basic Documents in good faith for delivery of information under these provisions
on the basis of evolving interpretations of Regulation AB. In connection
therewith, the Issuer shall cooperate fully with the Administrator (including
any of its assignees or designees) in the preparation of, any and all
statements, reports, certifications, records and any other information necessary
in the good faith determination of the Administrator, on behalf of the Issuer,
to comply with the provisions of Regulation AB.
Section 9.2 Reporting Requirements. (a) If so requested by the
Administrator, on behalf of the Issuer, for the purpose of satisfying its
reporting obligation under the Exchange Act with respect to any class of
asset-backed securities, the Administrator shall (i) notify the Issuer, in
writing of any material litigation or governmental proceedings pending against
the Administrator and (ii) provide to the Issuer, a description of such
proceedings, affiliations or relationships.
(b) As a condition to the succession as Administrator by any Person
as permitted by Section 4.3 hereof the successor administrator shall provide to
the Administrator, on behalf of the Issuer, at least 10 Business Days prior to
the effective date of such succession or appointment, (i) written notice to the
Administrator, on behalf of the Issuer, of such succession or appointment and
(ii) in writing all information in order to comply with its reporting obligation
under Item 6.02 of Form 8-K with respect to any class of Notes.
(c) In addition to such information as the Administrator, is
obligated to provide pursuant to other provisions of this Agreement, the
Administrator shall provide such information regarding the performance or
servicing of the Trust Student Loans as is reasonably required to facilitate
preparation of distribution reports in accordance with Item 1121 of Regulation
AB. Such information shall be provided concurrently with the monthly reports
otherwise required to be delivered by the Administrator under this Agreement,
commencing with the first such report due hereunder.
Section 9.3 Administrator Compliance Statement. On or before
_________ of each calendar year, commencing in 200__, the Administrator shall
deliver to the Issuer a statement of compliance addressed to the Issuer and
signed by an authorized officer of the Administrator, to the effect that (i) a
review of the Administrator's activities during the immediately preceding
calendar year (or applicable portion thereof) and of its performance under this
Agreement during such period has been made under such officer's supervision, and
(ii) to
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the best of such officer's knowledge, based on such review, the Administrator
has fulfilled all of its obligations under this Agreement in all material
respects throughout such calendar year (or applicable portion thereof) or, if
there has been a failure to fulfill any such obligation in any material respect,
specifically identifying each such failure known to such officer and the nature
and the status thereof.
Section 9.4 Report on Assessment of Compliance and Attestation. (a)
On or before _________ of each calendar year, commencing in 200__, the
Administrator shall:
(i) deliver to the Issuer a report (in form and substance reasonably
satisfactory to the Issuer) regarding the Administrator's assessment of
compliance with the Servicing Criteria during the immediately preceding
calendar year, as required under Rules 13a-18 and 15d-18 of the Exchange
Act and Item 1122 of Regulation AB. Such report shall be addressed to the
Issuer and signed by an authorized officer of the Administrator, and shall
address each of the Servicing Criteria specified on the certification
substantially in the form of Attachment B attached to this Agreement;
(ii) deliver to the Issuer a report of a registered public
accounting firm reasonably acceptable to the Issuer that attests to, and
reports on, the assessment of compliance made by the Administrator and
delivered pursuant to the preceding paragraph, which attestation shall be
in accordance with Rules 1-02(a)(3) and 2-02(g) of Regulation S-X under
the Securities Act and the Exchange Act; and
(iii) if requested by the Administrator, on behalf of the Issuer,
not later than _________ of the calendar year in which such certification
is to be delivered, deliver to the Issuer and any other Person that will
be responsible for signing a Sarbanes Certification in the form attached
hereto as Attachment A on behalf of the Issuer with respect to a
securitization transaction. The Administrator acknowledges that the
parties identified in this clause (a)(iii) may rely on the certification
provided by the Administrator pursuant to such clause in signing a
Sarbanes Certification and filing such with the Commission. The
Administrator, on behalf of the Issuer, will not request delivery of a
certification under this clause unless the Depositor is required under the
Exchange Act to file an annual report on Form 10-K with respect to the
Trust Student Loans.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered as of the date first above written.
THE STUDENT LOAN CORPORATION,
not in its individual capacity but
solely as Servicer and Administrator
By:
--------------------------------------
Name:
Title:
SLC STUDENT LOAN TRUST 200__-__
By: ____________, not in
its individual capacity but
solely as Owner Trustee
By:
--------------------------------------
Name:
Title:
ACCEPTED AND AGREED
solely with respect to Sections 2.3,
2.7 and 3.2
____________,
not in its individual capacity but
solely as Indenture Administrator
By:
--------------------------------------
Name:
Title:
ATTACHMENT A
FORM OF ANNUAL CERTIFICATION
Re: The Administration Agreement dated as of ______, 200__ (the "Agreement"),
among SLC Student Loan Trust 200__-__, as Issuer, and The Student Loan
Corporation as Servicer and Administrator
I,_____________________________, the __________________________ of
The Student Loan Corporation (the "Administrator"), certify to the Issuer, and
its officers, with the knowledge and intent that they will rely upon this
certification, that:
(1) I have reviewed the servicer compliance statement of the Administrator
provided in accordance with Item 1123 of Regulation AB (the "Compliance
Statement"), the report on assessment of the Administrator's compliance
with the servicing criteria set forth in Item 1122(d) of Regulation AB
(the "Servicing Criteria"), provided in accordance with Rules 13a-18 and
15d-18 under Securities Exchange Act of 1934, as amended (the "Exchange
Act") and Item 1122 of Regulation AB (the "Servicing Assessment"), the
registered public accounting firm's attestation report provided in
accordance with Rules 13a-18 and 15d-18 under the Exchange Act and Section
1122(b) of Regulation AB (the "Attestation Report"), and all servicing
reports, officer's certificates and other information relating to the
servicing of the Trust Student Loans by the Administrator during 200__
that were delivered by the Administrator to the Issuer pursuant to the
Agreement (collectively, the "Company Servicing Information");
(2) Based on my knowledge, the Company Servicing Information, taken as a
whole, does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in the light
of the circumstances under which such statements were made, not misleading
with respect to the period of time covered by the Company Servicing
Information;
(3) Based on my knowledge, all of the Company Servicing Information required
to be provided by the Administrator under the Agreement has been provided
to the Issuer;
(4) am responsible for reviewing the activities performed by the Administrator
as administrator under the Agreement, and based on my knowledge and the
compliance review conducted in preparing the Compliance Statement and
except as disclosed in the Compliance Statement, the Servicing Assessment
or the Attestation Report, the Administrator has fulfilled its obligations
under the Agreement in all material respects; and
A-1
(5) The Compliance Statement required to be delivered by the Administrator
pursuant to the Agreement, and the Servicing Assessment and Attestation
Report required to be provided by the Administrator and/or any
Sub-Administrator pursuant to the Agreement, have been provided to the
Issuer. Any material instances of noncompliance described in such reports
have been disclosed to the Issuer. Any material instance of noncompliance
with the Servicing Criteria has been disclosed in such reports.
Date:_________________
By:______________________________________
Name:
Title:
ATTACHMENT B
SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
The assessment of compliance to be delivered by The Student Loan
Corporation, as the Administrator and the Servicer, shall address, at a minimum,
the criteria identified below (the "Applicable Servicing Criteria"):
Reference Criteria
General Servicing Considerations
1122(d)(1)(i) Policies and procedures are instituted to monitor any
performance or other triggers and events of default in
accordance with the Basic Documents.
1122(d)(1)(ii) If any material servicing activities are outsourced to third
parties, policies and procedures are instituted to monitor the
third party's performance and compliance with such servicing
activities.
1122(d)(1)(iii) Any requirements in the Basic Documents to maintain a back-up
servicer for the trust student loans are maintained.
Cash Collection and Administration
1122(d)(2)(i) Payments on trust student loans are deposited into the
appropriate custodial bank accounts and related bank clearing
accounts no more than two business days following receipt, or
such other number of days specified in the Basic Documents.
1122(d)(2)(iv) The related accounts for the transaction, such as cash reserve
accounts or accounts established as a form of
overcollateralization, are separately maintained (e.g., with
respect to commingling of cash) as set forth in the Basic
Documents.
1122(d)(2)(v) Each custodial account is maintained at a federally insured
depository institution as set forth in the Basic Documents. For
purposes of this criterion, "federally insured depository
institution" with respect to a foreign financial institution
means a foreign financial institution that meets the
requirements of Rule 13k-1(b)(1) of the Securities Exchange
Act.
1122(d)(2)(vi) Unissued checks are safeguarded so as to prevent unauthorized
access.
1122(d)(2)(vii) Reconciliations are prepared on a monthly basis for all
asset-backed securities related bank accounts, including
custodial accounts and related bank clearing accounts. These
reconciliations are (A) mathematically accurate; (B) prepared
within 30 calendar days after the bank statement cutoff date,
or such other number of days specified in the Basic Documents;
(C) reviewed and approved by someone other than the person who
prepared the reconciliation;
B-1
Reference Criteria
and (D) contain explanations for reconciling items. These
reconciling items are resolved within 90 calendar days of their
original identification, or such other number of days specified
in the Basic Documents.
Investor Remittances and Reporting
1122(d)(3)(i) Reports to investors, including those to be filed with the
Commission, are maintained in accordance with the Basic
Documents and applicable Commission requirements.
Specifically, such reports (A) are prepared in accordance with
timeframes and other terms set forth in the Basic Documents;
(B) provide information calculated in accordance with the
terms specified in the Basic Documents; (C) are filed with the
Commission as required by its rules and regulations; and
(D) agree with investors' or the trustee's records as to the
total unpaid principal balance and number of student loans
serviced by the Servicer.
1122(d)(3)(ii) Amounts due to investors are allocated and remitted in
accordance with timeframes, distribution priority and other
terms set forth in the Basic Documents.
1122(d)(3)(iii) Disbursements made to an investor are posted within two
business days to the Servicer's investor records, or such
other number of days specified in the Basic Documents.
1122(d)(3)(iv) Amounts remitted to investors per the investor reports agree
with cancelled checks, or other form of payment, or custodial
bank statements.
Pool Asset Administration
1122(d)(4)(iii) Any additions, removals or substitutions to the asset pool are
made, reviewed and approved in accordance with any conditions
or requirements in the Basic Documents.
1122(d)(4)(xv) Any external enhancement or other support, identified in Item
1114(a)(1) through (3) or Item 1115 of Regulation AB, is
maintained as set forth in the Basic Documents.
B-2
The Student Loan Corporation, as
Administrator
Date: ________________________
By:______________________________________
Name:
Title:
B-3