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
ARTICLE I
Section 1.1 Definitions and Usage..........................................1
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.....................................8
Section 2.6 Additional Deposits............................................8
Section 2.7 Distributions..................................................8
Section 2.8 Priority of Distributions......................................9
Section 2.9 Reserve Account...............................................11
Section 2.10 Investment Earnings; Other Trust Accounts.....................12
Section 2.11 Statements to Holder of the Trust Certificate and
Noteholders..................................................12
Section 2.12 Non-Ministerial Matters.......................................13
Section 2.13 Exceptions....................................................14
Section 2.14 Compensation..................................................14
Section 2.15 Servicer and Administrator Expenses...........................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..............................17
Section 4.2 Liability of Administrator; Indemnities.......................18
Section 4.3 Merger or Consolidation of, or Assumption of the..............20
Section 4.4 Limitation on Liability of Seller, Administrator and
Others.......................................................21
Section 4.5 Administrator May Own Certificates or Notes...................21
Section 4.6 The Student Loan Corporation Not to Resign as
Administrator................................................21
ARTICLE V
Section 5.1 Administrator Default.........................................22
Section 5.2 Appointment of Successor......................................23
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Section 5.3 Notification to Noteholders and Holder of Trust
Certificate..................................................24
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..............................................28
Section 8.3 Other Activities of Administrator.............................28
Section 8.4 Powers of Attorney............................................28
Section 8.5 Amendment.....................................................28
Section 8.6 Assignment....................................................29
Section 8.7 Limitations on Rights of Others...............................29
Section 8.8 Assignment to Indenture Trustee...............................30
Section 8.9 Nonpetition Covenants.........................................30
Section 8.10 Limitation of Liability of Owner Trustee, Indenture
Administrator and Indenture Trustee..........................31
Section 8.11 Governing Law.................................................31
Section 8.12 Headings......................................................31
Section 8.13 Counterparts..................................................31
Section 8.14 Severability..................................................31
Section 8.15 Trust Certificate.............................................31
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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) [six] classes of its Student Loan
Asset-Backed Notes (collectively, the "Notes") pursuant to the 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 indenture administrator (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 Indenture and the
Interest Rate Cap Agreement;
WHEREAS, pursuant to certain Basic Documents, 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 and the
other Basic Documents 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);
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(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);
(s) undertaking all obligations required to be performed by the
Administrator, including, without limitation, preparing and delivering all
notices, communications, information and calculations, under the Interest
Rate Cap Agreement;
(t) on the Closing Date, directing the [Owner Trustee] to enter into
the Interest Rate Cap Agreement (not in its individual capacity, but
solely on behalf of the Trust) with the Interest Rate Cap Counterparty;
(u) calculating on each Distribution Date, as applicable, the
Principal Distribution Amount and any applicable Specified Reserve Account
Balance; and
(v) 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 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. 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 Documents) 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 Owner Trustee set forth in Section 5.4 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 the duties of the Administrator
specified in [Section 6.04] of the Trust Agreement required to be
performed in connection with the resignation or removal of the Owner
Trustee, and any other duties expressly
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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) The Administrator shall be responsible for serving as
Calculation Agent or as successor calculation agent, if required, and
shall be responsible for preparing any notices required to be delivered by
the Issuer to the Interest Rate Cap Counterparty under the Interest Rate
Cap Agreement, as applicable, including, without limitation, any notice
obligations specified in the Interest Rate Cap Agreement in the event of a
default by the Interest Rate Cap Counterparty.
(f) 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.
Section 2.3 Establishment of Trust Accounts.
(a) On the Closing Date and at such other times as specified herein, the
Administrator shall establish the following Eligible Deposit Accounts as more
fully described below:
(i) a "Collection Account"; and
(ii) a "Reserve 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
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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 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.
(d) With respect to the Trust Account Property, the Indenture Trustee
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
Trustee, and the Indenture Trustee shall have sole signature authority with
respect thereto;
(ii) any Trust Account Property that constitutes Physical Property shall
be Delivered to the Indenture Trustee in accordance with paragraph (a) of the
definition of "Delivery" and shall be held, pending maturity or disposition,
solely by 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 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, pending
maturity or disposition, through continuous book-entry registration of such
Trust Account Property as described in such paragraph; and
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(iv) any Trust Account Property 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,
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 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 "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 ________________. 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 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 ________________. On the Closing Date, the Administrator
shall cause the Trust to deposit the Reserve Account Initial Deposit into the
Reserve Account.
Section 2.4 Collections. The Servicer shall remit within two Business Days
of receipt thereof to the Collection Account 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 the Owner 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. Notwithstanding the foregoing, for so long as no
Administrator Default shall have occurred and be continuing, the Servicer and
the Owner Trustee shall remit such collections within two Business Days of
receipt thereof to the Administrator, and the Administrator need not deposit
such collections into the Collection Account until one Business Day immediately
prior to
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the next following Monthly Servicing Payment Date together with interest on such
amounts (less Servicing Fees paid during such period) calculated on a daily
basis from the first day of the month following receipt thereof by the
Administrator to but excluding the day on which the Administrator remits such
amounts to the Collection Account at a rate equal to no less than the Federal
Funds Rate less ___%. In the event that the foregoing condition for ceasing
daily remittances shall no longer be satisfied, then the Administrator shall
deposit all collections held by it into the Collection Account within two
Business Days of receipt thereof.
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.
(a) 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 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.
(b) Notwithstanding anything to the contrary set forth in Section 2.6(a)
above, if daily deposits to the Collection Account are not required pursuant to
Section 2.4 above, the Depositor and the Servicer shall pay the amounts referred
to in Section 2.6(a) above that would otherwise be deposited into the Collection
Account to the Administrator. The Administrator shall not be required to deposit
such amounts into the Collection Account until the Business Day preceding each
Monthly Servicing Payment Date; provided that the Administrator shall also
deposit into the Collection Account on such date interest on such amounts (less
Servicing Fees paid during such period) calculated on a daily basis from the
first day of the month following receipt thereof by the Administrator to but
excluding the day on which the Administrator remits such amounts to the
Collection Account at a rate equal to no less than the Federal Funds Rate less
___%.
Section 2.7 Distributions.
(a) On or before the second 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
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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 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 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 second 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 amounts transferred from the Reserve Account pursuant to
Section 2.9. 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.
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 or reimburse itself and the Indenture
Trustee for all amounts due under Section 6.7 of the Indenture to it and the
Indenture Trustee, next to pay or reimburse the Owner Trustee for all amounts
due to it under
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the Trust Agreement 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 Administrator, the Administration Fee due on that
Distribution Date and all prior unpaid Administration Fees;
(c) to the Class A Noteholders, the Class A Noteholders' Interest
Distribution Amount, pro rata, based on the amounts payable as Class A
Noteholders' Interest Distribution Amount;
(d) to the Class B Noteholders, the Class B Noteholders' Interest
Distribution Amount;
(e) 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;
(f) on and after the Stepdown Date, and provided that no Trigger
Event is in effect on such Distribution Date, to Class B Noteholders,
until paid in full, the Class B Noteholders' Principal Distribution
Amount;
(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, the aggregate unpaid amount of the Carryover
Servicing Fee, if any; and
(i) to the holder of the Trust Certificate, any remaining amounts
after application of the preceding clauses; provided, that any amount
owing to the Interest Rate Cap Counterparty as a termination payment shall
be paid from such remaining amounts prior to the payment to the holder of
the Trust Certificate.
Notwithstanding the foregoing:
(x) If (i) on any Distribution Date following distributions under clauses
2.8(a) through (e) above to be made on such Distribution Date, the Outstanding
Amount of the Class A Notes would be in excess of (A) the sum of (1) the
outstanding principal balance of the Trust Student Loans, (2) any accrued but
unpaid interest on the Trust Student Loans as of the last day of the related
Collection Period and (3) the balance of the Reserve Account on such
Distribution Date following those distributions required to be made under
clauses 2.8(a) through (e) above, minus (B) the Specified Reserve Account
Balance for that Distribution Date, or (ii) an Event of Default affecting the
Class A Notes has occurred and is continuing, then, until the conditions
described in (i) or (ii) no longer exist, amounts on deposit in the Collection
Account and the Reserve Account shall be applied on such Distribution Date to
the payment of the Class
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A Noteholders' Distribution Amount before any amounts are applied to the payment
of the Class B Noteholders' Distribution Amount; and
(y) In the event the Trust Student Loans are not sold pursuant to Section
6.1(A) 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(e) 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 Reserve Account. On the Closing Date, the Issuer shall deposit
the Reserve Account Initial Deposit into the Reserve Account.
(a) 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 2.9(f)
below, amounts on deposit in the Reserve Account will not be available to cover
any unpaid Carryover Servicing Fees to the Servicer.
(b) In the event that the Available Funds are insufficient to make the
payments described under Sections 2.8(a) through 2.8(d) above 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 (a) above, and to distribute such amounts in the same
order and priority as is set forth in Sections 2.8(a) through 2.8(d) above.
(c) 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(e) 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 (a) and (b) 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(e) above.
(d) 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(i) 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
11
clauses (a) through (c) above, and to distribute such amount to the Class B
Noteholders entitled thereto.
(e) After giving effect to clauses (a) through (d) 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 2.9(e) 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.
(f) 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, the Servicer, the Administrator
or the Interest Rate Cap Counterparty, 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 2.9(f).
Anything in this Section 2.9 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 2.10 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 2.11 Statements to Holder of the Trust Certificate and
Noteholders. On each Determination Date 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;
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(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 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 Administration Fee paid to the Administrator
on such Distribution Date;
(i) the amount of the aggregate Realized Losses, if any, for the
related Collection Period and the balance of Trust Student Loans that are
delinquent in each delinquency period as of the end of such Collection
Period;
(j) 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;
(k) 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;
(l) the balance of the Reserve Account on such Distribution Date,
after giving effect to changes therein on such Distribution Date; and
(m) 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 2.12 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
13
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 2.13 Exceptions. Notwithstanding anything to the contrary in this
Agreement, except as expressly provided herein or in the other Basic Documents,
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.
Section 2.14 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 $_______ for
each Collection Period payable on the related Distribution Date (the
"Administration Fees") payable in arrears which shall be solely an obligation of
the Issuer.
Section 2.15 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.
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
14
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 second 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 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 each Determination Date 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 hereby accepts the delegation to it of the
obligations of the "Calculation Agent" under the Interest Rate Cap Agreement to
which the Issuer is a party, as applicable.
(f) 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, 200_) and of its performance
under this Agreement has been made under such officers'
15
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.
(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 a firm of independent
certified public accountants, which may also render other services to the
Servicer or the Administrator, as the case may be, to deliver to the Owner
Trustee, the Indenture Trustee, the Indenture Administrator 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 and the
Indenture Administrator, to the effect that such firm has examined certain
documents and records relating to the servicing of the Trust Student Loans, or
the administration of the Trust Student Loans and of the Trust, as the case may
be, during the preceding calendar year (or, in the case of the first such
report, during the
16
period from the Closing Date to December 31, 200_) and that, on the basis of the
accounting and auditing procedures considered appropriate under the
circumstances, such firm is of the opinion that such servicing or
administration, respectively, was conducted in compliance with those terms of
this Agreement and in the case of the Servicer, the Servicing Agreement,
including any applicable statutory provisions incorporated therein and such
additional terms and statutes as may be specified from time to time by the
Administrator, except for (a) such exceptions as such firm shall believe to be
immaterial and (b) such other 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 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
17
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 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 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 or
expense (including attorneys' fees) 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
18
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. The Administrator
shall defend the claim and the Administrator shall not be liable for the legal
fees and expenses of the Indenture Trustee or the Indenture Administrator after
it has assumed such defense; provided, however, that in the event that there may
be a conflict between the positions of the Indenture Trustee or the Indenture
Administrator and the Administrator in conducting the defense of such claim, the
Indenture Trustee or the Indenture Administrator, as the case may be, 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 to reimburse any expense or indemnify against any loss, liability 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 (including in its
capacity as Interim Owner Trustee) in its individual capacity and any of its
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 it in connection with the performance of its duties
under the Interim Trust Agreement, the Trust Agreement 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:
(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; and
(iv) any claim for failure to comply with the provisions of 34 CFR Sec.
682.203(b).
(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
19
indemnify against any loss, liability or expense incurred by the Owner Trustee
through the Owner Trustee's own willful misconduct, negligence or bad faith.
(g) The Depositor shall pay reasonable compensation to the Indenture
Trustee and the Owner Trustee and shall reimburse the Indenture Trustee and the
Owner Trustee for all reasonable expenses, disbursements and advances.
(h) or 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 or the 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
20
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 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
21
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 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 either 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); or
(c) an Insolvency Event occurs with respect to the Administrator;
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
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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 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 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 Administrator
without further action shall automatically be appointed the successor to the
Administrator and the Indenture Administrator shall be entitled to the
Administration Fee. Notwithstanding the above, the Indenture Administrator
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
23
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 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
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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.
(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
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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 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.
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(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 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
27
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 holder of the Trust Certificate, the Servicer, the
Administrator, the Owner Trustee and the Indenture Trustee, without the consent
of any of the Noteholders, to cure any ambiguity, to correct or supplement any
provisions in this 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 and the Indenture Trustee, adversely affect in any material
respect the interests of any Noteholder or of the holder of the Trust
Certificate, and that such action will not materially adversely affect (1) the
Trust's ability to enforce or protect its rights or remedies under the Interest
Rate Cap Agreement, (2) the ability of the Trust to timely and fully perform its
obligations under the Interest Rate Cap Agreement or (3) any of the Trust's
obligations under the Interest Rate Cap Agreement or any cap transaction under
such agreement. Any such amendment, modification or supplement without the
consent of the Interest Rate Cap Counterparty shall not be binding on the
Interest Rate Cap Counterparty.
(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
28
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 and the Indenture Trustee 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 and the Indenture Trustee may, but shall not be
obligated to, enter into any such amendment which affects the Owner Trustee's or
the Indenture Trustee's, as applicable, own rights, duties or immunities under
this Agreement or otherwise.
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 and for the benefit of the holder of the Trust Certificate, the
Indenture Trustee, the 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.
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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 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
30
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.
[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:
32