Exhibit 99.3
ADMINISTRATION AGREEMENT dated as of November 1,
1996, among SIGNET STUDENT LOAN TRUST 1996-A, a Delaware trust
(the "Issuer"), SIGNET BANK, a Virginia banking corporation,
as administrator (the "Administrator"), and THE BANK OF NEW
YORK, a New York banking corporation, not in its individual
capacity but solely as Indenture Trustee (the "Indenture
Trustee").
W I T N E S S E T H
WHEREAS the Issuer is issuing the Floating Rate Class A-1
Asset Backed Notes and the Floating Rate Class A-2 Asset Backed Notes
(collectively, the "Notes") pursuant to the Indenture dated as of November 1,
1996 (the "Indenture"), between the Issuer and the Indenture Trustee and the
Floating Rate Asset Backed Certificates (the "Certificates"), pursuant to the
Trust Agreement dated as of November 1, 1996 (the "Trust Agreement") among the
Depositor, Signet Student Loan Corporation, a Virginia corporation (the
"Company") and The First National Bank of Chicago, a national banking
association, as Eligible Lender Trustee (the "Eligible Lender Trustee")
(capitalized terms used herein and not defined herein shall have the meanings
assigned to such terms in Appendix A hereto, which also contains rules of usage
and construction that shall be applicable herein);
WHEREAS the Issuer has entered into certain agreements in
connection with the issuance of the Notes and the Certificates, including the
Loan Sale Agreement, the Master Servicing Agreement, the Note Depository
Agreements, the Certificate Depository Agreement (the Certificate Depository
Agreement and the Note Depository Agreements being collectively referred to
herein as the "Depository Agreement"), the Guarantee Agreements, the Trust
Agreement and the Indenture (all such agreements being collectively referred to
herein as the "Related Agreements");
WHEREAS, pursuant to the Related Agreements, the Issuer and
the Eligible Lender Trustee are required to perform certain duties in connection
with (a) the Notes and the Collateral therefor pledged pursuant to the Indenture
and (b) the Certificates;
WHEREAS the Issuer and the Eligible Lender Trustee desire to
have the Administrator perform certain of the duties of the Issuer and the
Eligible Lender Trustee referred to in the preceding clause, and to provide such
additional services consistent with the terms of this Agreement and the Related
Agreements as the Issuer and the Eligible Lender Trustee may from time to time
request;
WHEREAS the Administrator has the capacity to provide the
services required hereby and is willing to perform such services for the Issuer
and the Eligible Lender Trustee on the terms set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants
contained herein, and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties agree as follows:
1. Representations of the Administrator. The Administrator
makes the following representations on which the Issuer and the Eligible Lender
Trustee are deemed to have relied. The representations speak as of the execution
and delivery of this Agreement and as of the Closing Date, in the case of the
Initial Financed Student Loans, as of the applicable Transfer Date, in the case
of the Additional Student Loans, but shall survive the sale of the Financed
Student Loans to the Eligible Lender Trustee on behalf of the Issuer and the
pledge thereof to the Indenture Trustee pursuant to the Indenture.
(a) Organization and Good Standing. The Administrator is duly
organized and validly existing as a Virginia banking corporation, 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 of the Administrator. The
Administrator has the corporate power and authority to execute and
deliver this Agreement and to carry out its terms, and the execution,
delivery and performance of this Agreement has been duly authorized by
the Administrator by all necessary corporate action.
(c) Binding Obligation. This Agreement constitutes a legal,
valid and binding obligation of the Administrator, enforceable in
accordance with its terms, subject to
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applicable bankruptcy, insolvency, reorganization and similar laws
relating to creditors' rights generally or the rights of creditors of
banks the deposit accounts of which are insured by the FDIC and subject
to general principles of equity.
(d) No Violation. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof
or thereof do not conflict with, result in any breach of any of the
terms and provisions of, nor constitute (with or without notice or
lapse of time or both) a default under, the articles of incorporation
or by-laws of the Administrator, or any material indenture, agreement
or other instrument to which the Administrator is a party or by which
it shall be bound; nor result in the creation or imposition of any Lien
upon any of its properties pursuant to the terms of any such indenture,
agreement or other instrument; nor violate any law or, to the knowledge
of the Administrator, any order, rule or regulation applicable to the
Administrator of any court or of any Federal or state regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over the Administrator or its properties. The consummation
by the Administrator of the transactions contemplated by this Agreement
will not result in the loss of any Guarantee Payments by the Trust or
any reinsurance payments with respect to any Financed Student Loan.
(e) No Proceedings. There are no proceedings or investigations
pending against the Administrator or, to its best knowledge, threatened
against the Administrator, before any court, regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over the Administrator or its properties: (i) asserting
the invalidity of this Agreement, the Indenture or any of the other
Related Agreements, the Notes or the Certificates, (ii) seeking to
prevent the issuance of the Notes or the Certificates or the
consummation of any of the transactions contemplated by this Agreement,
the Indenture or any of the other Related Agreements, (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, the Indenture, any of the other Related Agreements, the
Notes or the Certificates or (iv) seeking to affect adversely the
Federal or state income tax attributes of the Issuer, the Notes or the
Certificates.
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(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
in each case been duly obtained, effected or given and are in full
force and effect.
2. Duties of the Administrator.
(a) Duties with Respect to the Indenture and Depository
Agreement. The Administrator shall perform all its duties as Administrator and
the duties of the Issuer under the Depository Agreement. In addition, the
Administrator shall consult with the Eligible Lender Trustee as the
Administrator deems appropriate 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 Eligible Lender 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 all appropriate action that is the duty of the Issuer to take
pursuant to the Indenture, including such of the foregoing as are required with
respect to the following matters (references are to sections of the Indenture):
(i) the duty to cause the Note Registrar to keep the Note
Register and to give the Indenture Trustee prompt notice of any
appointment of a new Note Registrar and the location, or change in
location, of the Note Register (Section 2.04);
(ii) the fixing or causing to be fixed of any specified record
date and the timely notification of the Indenture Trustee and
Noteholders with respect to special payment dates, if any (Section
2.07(c));
(iii) the preparation of or obtaining of the documents and
instruments required for authentication of the Notes and delivery of
the same to the Indenture Trustee (Section 2.02);
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(iv) the preparation, obtaining or filing of the instruments,
opinions and certificates and other documents required for the release
of collateral (Section 2.09);
(v) the duty to cause the Note Registrar to maintain on behalf
of the Issuer an office in the Borough of Manhattan, The City of New
York, for registration of transfer or exchange of Notes (Section 3.02);
(vi) the duty to cause newly appointed Paying Agents, if any,
to deliver to the Indenture Trustee the instrument specified in the
Indenture regarding funds held in trust (Section 3.03);
(vii) the direction to the Paying Agent(s) to deposit moneys
with the Indenture Trustee (Section 3.03);
(viii) the obtaining and preservation of the Issuer's
qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of the Indenture, the Notes, the Collateral and each
other instrument and agreement included in the Indenture Trust Estate
(Section 3.04);
(ix) the preparation of all supplements, amendments, financing
statements, continuation statements, instruments of further assurance
and other instruments, in accordance with Section 3.05 of the
Indenture, necessary to protect the Indenture Trust Estate (Section
3.05);
(x) the delivery by the Issuer of the Opinion of Counsel on
the Closing Date and the annual delivery of Opinions of Counsel, in
accordance with Section 3.06 of the Indenture, as to the Indenture
Trust Estate, and the annual delivery of the Officers' Certificate of
the Issuer and certain other statements, in accordance with Section
3.09 of the Indenture, as to compliance with the Indenture (Sections
3.06 and 3.09);
(xi) the identification to the Indenture Trustee in an
Officers' Certificate of the Issuer of a Person with whom the Issuer
has contracted to perform its duties under the Indenture (Section
3.07(b));
(xii) the notification of the Indenture Trustee and the Rating
Agencies of a Servicer Default pursuant to the Master Servicing
Agreement and, if such Servicer Default arises from the failure of the
Master Servicer to perform any of its duties under the Master Servicing
Agreement, the taking
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of all reasonable steps available to remedy such failure (Section
3.07(d));
(xiii) the preparation and obtaining of documents and
instruments required for the release of the Issuer from its obligations
under the Indenture (Section 3.10);
(xiv) the prompt delivery of notice to the Indenture Trustee
and the Rating Agencies of each Event of Default, any Default under
Section 5.01(iii) of the Indenture and each default by the Master
Servicer under the Master Servicing Agreement or by the Seller under
the Loan Sale Agreement (Section 3.18);
(xv) the monitoring of the Issuer's obligations as to the
satisfaction and discharge of the Indenture and the preparation of an
Officers' Certificate of the Issuer and the obtaining of the Opinion of
Counsel and the Independent Certificate relating thereto (Section
4.01);
(xvi) the compliance with any written directive of the
Indenture Trustee with respect to the sale of the Indenture Trust
Estate in a commercially reasonable manner if an Event of Default shall
have occurred and be continuing (Section 5.04);
(xvii) the preparation of any written instruments required to
confirm more fully the authority of any co-trustee or separate trustee
and any written instruments necessary in connection with the
resignation or removal of any co-trustee or separate trustee (Sections
6.08 and 6.10);
(xviii) the furnishing of the Indenture Trustee with the names
and addresses of Noteholders during any period when the Indenture
Trustee is not the Note Registrar (Section 7.01);
(xix) the preparation and, after execution by the Issuer, the
filing with the Commission, any applicable State agencies and the
Indenture Trustee of documents required to be filed on a periodic basis
with, and summaries thereof as may be required by rules and regulations
prescribed by, the Commission and any applicable State agencies and the
transmission of such summaries, as necessary, to the Noteholders
(Section 7.03);
(xx) the opening of one or more accounts in the Issuer's name,
the preparation of Issuer Orders and Officers' Certificates of the
Issuer, the obtaining of Opinions of Counsel and the taking of all
other actions
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necessary with respect to investment and reinvestment of funds in the
Trust Accounts (Sections 8.02 and 8.03);
(xxi) the preparation of an Issuer Request and Officers'
Certificate of the Issuer and the obtaining of an Opinion of Counsel
and Independent Certificates, if necessary, for the release of the
Indenture Trust Estate (Sections 8.04 and 8.05);
(xxii) the preparation of Issuer Orders and the obtaining of
Opinions of Counsel with respect to the execution of supplemental
indentures and the mailing to the Noteholders of notices with respect
to such supplemental indentures (Sections 9.01, 9.02 and 9.03);
(xxiii) the preparation of or obtaining of the documents and
instruments required for the execution and authentication of new Notes
conforming to any supplemental indenture and the delivery of the same
to the Eligible Lender Trustee and the Indenture Trustee, respectively
(Section 9.06);
(xxiv) the notification of Noteholders of redemption of the
Notes or the duty to cause the Indenture Trustee to provide such
notification (Section 10.02);
(xxv) the preparation of all Officers' Certificates of the
Issuer, Opinions of Counsel and Independent Certificates with respect
to any requests by the Issuer to the Indenture Trustee to take any
action under the Indenture (Section 11.01(a));
(xxvi) the preparation and delivery of Officers' Certificates
of the Issuer and the obtaining of Independent Certificates, if
necessary, for the release of property from the lien of the Indenture
(Section 11.01(b));
(xxvii) the preparation and timely delivery to Noteholders and
the Indenture Trustee of any agreements with respect to alternate
payment and notice provisions (Section 11.06); and
(xxviii) the recording of the Indenture, if applicable
(Section 11.15).
(b) Duties with Respect to the Issuer. (i) In addition to the
duties of the Administrator set forth above and in the other Related Agreements,
the Administrator shall perform such calculations and shall prepare for
execution by the Issuer or the Eligible Lender Trustee or shall cause the
preparation by
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other appropriate Persons of all such documents, reports, filings, instruments,
certificates and opinions as it shall be the duty of the Issuer or the Eligible
Lender Trustee to prepare, file or deliver pursuant to the Related Agreements,
and at the request of the Eligible Lender Trustee shall take all appropriate
action that it is the duty of the Issuer to take pursuant to the Related
Agreements. In furtherance thereof, the Eligible Lender Trustee shall, on behalf
of itself and of the Issuer, execute and deliver to the Administrator and to
each successor Administrator appointed pursuant to the terms hereof, one or more
powers of attorney substantially in the form of Exhibit A hereto, appointing the
Administrator the attorney-in-fact of the Eligible Lender Trustee and the Issuer
for the purpose of executing on behalf of the Eligible Lender Trustee and the
Issuer all such documents, reports, filings, instruments, certificates and
opinions. Subject to Section 9 of this Agreement, and in accordance with the
directions of the Eligible Lender Trustee, the Administrator shall administer,
perform or supervise the performance of such other activities in connection with
the Collateral (including the Related Agreements) as are not covered by any of
the foregoing provisions and as are expressly requested by the Eligible Lender
Trustee and are reasonably within the capability of the Administrator.
(ii) Notwithstanding anything in this Agreement or the Related
Agreements to the contrary, the Administrator shall deliver to the Eligible
Lender Trustee, the Indenture Trustee, the Rating Agencies and (if the Seller is
not the Administrator) the Seller, an Officers' Certificate of the Administrator
containing all the information necessary:
(A) to pay the Department any Monthly Rebate Fees due and
payable to the Department, to the extent such Monthly Rebate Fees are
not being deducted by the Department out of Special Allowance Payments
or Interest Subsidy Payments, which Officers' Certificate shall be
delivered on the date that is three Business Days prior to the date
such fees are to be remitted to the Department;
(B) on each Transfer Date to pay the Seller, pursuant to
Section 2.02 of the Loan Sale Agreement, the Purchase Amount for
Additional Student Loans purchased by the Eligible Lender Trustee on
behalf of the Issuer on such date, which Officers' Certificate shall be
delivered on the Business Day preceding such Transfer Date;
(C) to pay the Master Servicer the Servicing Fee due on each
Interest Payment Date pursuant to Section 2(d)(iii)(A), 2(d)(iv)(A) and
2(e)(iv)(A), which Officers'
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Certificate shall be delivered on the day that is three Business Days
prior to such Interest Payment Date;
(D) to make all the distributions required by Sections 2(d),
2(e) and 2(f), for the Monthly Collection Period or Collection Period,
as the case may be, preceding the date of such Officer's Certificate,
which Officers' Certificate shall be delivered on each Determination
Date.
In addition, prior to each Determination Date, the Administrator shall
determine the Class A-1 Rate, the Class A-2 Rate and the Certificate Rate that
will be applicable to the Interest Payment Date following such Determination
Date, in compliance with its obligation to prepare an Officer's Certificate on
such Determination Date pursuant to this Section. In connection therewith, the
Administrator shall calculate LIBOR in accordance with the definition thereof
and shall also determine the Student Loan Rate with respect to such Interest
Payment Date.
(iii) Notwithstanding anything in this Agreement or the
Related Agreements to the contrary, the Administrator shall be responsible for
promptly notifying the Eligible Lender Trustee in the event that any withholding
tax is imposed on the Issuer's payments (or allocations of income) to an Owner
as contemplated in Section 5.01(c) of the Trust Agreement. Any such notice shall
specify the amount of any withholding tax required to be withheld by the
Eligible Lender Trustee pursuant to such provision.
(iv) Notwithstanding anything in this Agreement or the Related
Agreements to the contrary, the Administrator shall be responsible for
performance of the duties of the Eligible Lender Trustee set forth in Section
5.04(a), (b), (c), (d) and (e) of the Trust Agreement with respect to, among
other things, accounting and reports to Owners; provided, however, that the
Eligible Lender Trustee shall retain responsibility for the distribution of the
Schedule K-1s necessary to enable each Owner to prepare its Federal and state
income tax returns.
(v) The Administrator shall satisfy its obligations with
respect to clauses (iii) and (iv) above by retaining, at the expense of the
Issuer, payable by the Administrator, a firm of independent public accountants
(the "Accountants") which shall perform the obligations of the Administrator
thereunder. In connection with paragraph (iii) above, the Accountants will
provide prior to December 31, 1996, a letter in form and substance satisfactory
to the Eligible Lender Trustee as to whether any federal tax withholding is then
required and, if required, the procedures to be followed with respect thereto to
comply with the requirements of the Code. The Accountants shall
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be required to update the letter in each instance that any additional tax
withholding is subsequently required or any previously required tax withholding
shall no longer be required.
(vi) The Administrator shall perform the duties of the
Administrator specified in Sections 10.02 and 10.03 of the Trust Agreement
required to be performed in connection with the resignation or removal of the
Eligible Lender Trustee and the appointment of a successor Eligible Lender
Trustee, and any other duties expressly required to be performed by the
Administrator under the Trust Agreement and the other Related Agreements,
including those under Sections 6.07 and 6.08 of the Indenture.
(vii) As described in Article IX of the Trust Agreement,
notice of any termination of the Trust shall be given by the Administrator to
the Eligible Lender Trustee and the Indenture Trustee as soon as practicable
after the Administrator has received notice thereof.
(viii) In carrying out the foregoing duties or any of its
other obligations under this Agreement, the Administrator may enter into
transactions with or otherwise deal with any of its Affiliates; provided,
however, that the terms of any such transactions or dealings shall be in
accordance with any directions received from the Issuer and shall be, in the
Administrator's opinion, no less favorable to the Issuer than would be available
from unaffiliated parties.
(c) Establishment and Maintenance of Trust Accounts.
(i) The Administrator, for the benefit of the Issuer, shall
establish and maintain in 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 Issuer. The
Collection Account will initially be established as a segregated trust account
in the name of the Indenture Trustee with Signet Trust Company.
(ii) The Administrator, for the benefit of the Issuer, 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 Issuer. The Reserve
Account will initially be established as a segregated trust account in the name
of the Indenture Trustee with Signet Trust Company.
(iii) The Administrator, for the benefit of the Issuer, shall
establish and maintain in the name of the Indenture Trustee an Eligible Deposit
Account (the "Pre-Funding Account"), bearing a designation clearly indicating
that the funds deposited
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therein are held for the benefit of the Issuer. The Pre-Funding Account will
initially be established as a segregated trust account in the name of the
Indenture Trustee with the corporate trust department of Signet Trust Company.
(iv) Funds on deposit in the Collection Account, the Reserve
Account and the Pre-Funding Account (collectively, the "Trust Accounts") shall
be invested by the Indenture Trustee (or any custodian or designated agent with
respect to any amounts on deposit in such accounts) in Eligible Investments
pursuant to written instructions by the Administrator; provided, however, it is
understood and agreed that the Indenture Trustee shall not be liable for any
loss arising from such investment in Eligible Investments. All such Eligible
Investments shall be held by (or by any custodian on behalf of) the Indenture
Trustee for the benefit of the Issuer; provided that on the Business Day
preceding each Interest Payment Date all interest and other investment income
(net of losses and investment expenses) on funds on deposit in the Trust
Accounts shall be deposited into the Collection Account (except that any
maturing Eligible Investment that is an obligation of the institution with which
the Collection Account is maintained may mature and be deposited into the
Collection Account on such Interest Payment Date) and shall be deemed to
constitute a portion of the Monthly Available Funds for each Interest Payment
Date that is not a Distribution Date, and a portion of the Available Funds for
each Distribution Date. Other than as permitted by the Rating Agencies, funds on
deposit in the Trust Accounts shall be invested in Eligible Investments that
will mature so that funds sufficient to pay the Servicing Fee, the
Administration Fee, the Noteholders' Interest Distribution Amount and the
Certificateholders' Interest Distribution Amount will be available in the
Collection Account on the Business Day preceding each Interest Payment Date (or
on such Interest Payment Date in the case of maturing Eligible Investments that
are obligations of the institution with which the Collection Account is
maintained), so that funds on deposit in the Pre-Funding Account that are
required, in the judgment and at the discretion of the Administrator, to make
Additional Fundings during the Collection Period will be available for such
purpose, and so that the remaining such funds will be available at the close of
business on the Business Day preceding each Distribution Date (or on such
Distribution Date in the case of maturing Eligible Investments that are
obligations of the institution with which the Collection Account is maintained).
(v) (A) The Indenture Trustee shall possess all right, title
and interest in all funds on deposit from time to time in the Trust Accounts and
in all proceeds thereof (including all income thereon) and all such funds,
investments, proceeds and income shall be part of the Trust
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Estate. The Trust Accounts shall be under the sole dominion and control of the
Indenture Trustee for the benefit of the Issuer. If, at any time, any of the
Trust Accounts ceases to be an Eligible Deposit Account, the Indenture Trustee
(or the Administrator on its behalf) agrees, by its acceptance hereof, that it
shall within 10 Business Days (or such longer period, not to exceed 30 calendar
days, as to which each Rating Agency may consent) establish a new Trust Account
as an Eligible Deposit Account and shall transfer any cash and/or any
investments to such new Trust Account. In connection with the foregoing, the
Administrator agrees that, in the event that any of the Trust Accounts are not
accounts with the Indenture Trustee, the Administrator shall notify the
Indenture Trustee in writing promptly upon any of such Trust Accounts ceasing to
be an Eligible Deposit Account.
(B) With respect to the Trust Account Property, the
Indenture Trustee agrees, by its acceptance hereof, that:
(1) any Trust Account Property that is held in deposit
accounts shall be held solely in Eligible Deposit Accounts, subject to
the last sentence of clause (v)(A) above; and each such Eligible
Deposit Account shall be subject to the exclusive custody and control
of the Indenture Trustee, and the Indenture Trustee shall have sole
signature authority with respect thereto;
(2) any Trust Account Property that constitutes Physical
Property shall be Delivered to the Indenture Trustee in accordance with
paragraph (a) of the definition of "Delivery" 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;
(3) any Trust Account Property that is a book-entry security
held through the Federal Reserve System pursuant to Federal book-entry
regulations shall be Delivered in accordance with paragraph (b) of the
definition of "Delivery" and shall be maintained by the Indenture
Trustee, pending maturity or disposition, through continued book-entry
registration of such Trust Account Property as described in such
paragraph; and
(4) any Trust Account Property that is an "uncertificated
security" under Article VIII of the UCC and that is not governed by
clause (3) above shall be Delivered to the Indenture Trustee in
accordance with paragraph (c) of
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the definition of "Delivery" and shall be maintained by the Indenture
Trustee, pending maturity or disposition, through continued
registration of the Indenture Trustee's (or its nominees) ownership of
such security.
(C) The Administrator shall have the power, revocable
for cause or upon the occurrence and during the continuance of an
Administrator Default by the Indenture Trustee or by the Eligible
Lender Trustee with the consent of the Indenture Trustee, to instruct
the Indenture Trustee to make withdrawals and payments from the Trust
Accounts for the purpose of permitting the Master Servicer, any
Servicer, any Subservicer or the Eligible Lender Trustee to carry out
its respective duties under the Master Servicing Agreement or the Trust
Agreement or permitting the Indenture Trustee to carry out its duties
under the Indenture.
(vi) On each Determination Date, the Administrator shall
calculate all amounts required to determine the amounts to be deposited in the
Collection Account and the other Trust Accounts and the amounts to be
distributed therefrom on the related Interest Payment Date or other dates from
which amounts therein are to be distributed.
(d) Withdrawals from the Collection Account. The
Administrator shall instruct the Indenture Trustee (based, in the case
of clauses (iii) and (iv) below, on the information contained in the
Servicer's Report delivered with respect to the applicable
Determination Date pursuant to Section 3.07 of the Master Servicing
Agreement) to make withdrawals from amounts deposited in the Collection
Account at the following times and for the following purposes, and the
Indenture Trustee shall comply with such instructions:
(i) from time to time during each Collection Period to pay the
Department any Monthly Rebate Fees due and payable to the Department,
to the extent such Monthly Rebate Fees are not being deducted by the
Department out of Special Allowance Payments or Interest Subsidy
Payments;
(ii) on each Transfer Date after the Funding Period to pay to
the Seller, pursuant to Section 2.02 of the Loan Sale Agreement, the
Purchase Amount for Additional Student Loans purchased by the Eligible
Lender Trustee on behalf of the Issuer on such date; provided, that,
the amount paid to the Seller for the purchase of Additional Student
Loans on such Transfer Date plus the amount of funds remitted for the
purchase of Additional Student Loans on each Transfer Date since the
preceding Distribution Date on any Transfer Date
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after the Funding Period shall not exceed the Net Principal Cash Flow
Amount for such Transfer Date;
(iii) on each Interest Payment Date that is not a Distribution
Date, to make the following distributions to the Persons specified
below by 11:00 a.m. (New York Time), to the extent of Monthly Available
Funds for such Interest Payment Date in the Collection Account, in the
following order of priority:
(A) to the Master Servicer, the Servicing Fee with
respect to the preceding calendar month and all unpaid
Servicing Fees from prior months;
(B) to the Administrator, from the amount of Monthly
Available Funds remaining after the application of clause (A),
the Administration Fee with respect to the preceding calendar
month and all unpaid Administration Fees from prior months;
(C) to the Class A-1 Noteholders and the Class A-2
Noteholders, on a pro rata basis, from the amount of Monthly
Available Funds remaining after the application of clauses (A)
and (B), the Noteholders' Interest Distribution Amount (based
on the ratio of the portion of the Noteholders' Interest
Distribution Amount accrued with respect to each such Class to
the Noteholders' Interest Distribution Amount); and
(D) to the order of the Eligible Lender Trustee, from
the amount of Monthly Available Funds remaining after the
application of clauses (A) through (C), the
Certificateholders' Interest Distribution Amount.
(iv) on each Distribution Date, to make the following deposits
and distributions to the Persons or the account specified below by
11:00 a.m. (New York Time), to the extent of Available Funds for such
Distribution Date in the Collection Account, in the following order of
priority:
(A) to the Master Servicer, the Servicing Fee with
respect to the preceding calendar month and all unpaid
Servicing Fees from prior months;
(B) to the Administrator, from the amount of
Available Funds remaining after the application of clause (A),
the Administration Fee with respect to the preceding calendar
month and all unpaid Administration Fees from prior months;
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(C) to the Class A-1 Noteholders and the Class A-2
Noteholders, on a pro rata basis, from the amount of Available
Funds remaining after the application of clauses (A) and (B),
the Noteholders' Interest Distribution Amount (based on the
ratio of the portion of the Noteholders' Interest Distribution
Amount accrued with respect to each such Class to the
Noteholders' Interest Distribution Amount);
(D) to the order of the Eligible Lender Trustee, from
the amount of Available Funds remaining after the application
of clauses (A) through (C), the Certificateholders' Interest
Distribution Amount;
(E) to the Class A-1 Noteholders until the
Outstanding Amount of the Class A-1 Notes has been reduced to
zero and then to the Class A-2 Noteholders, from the amount of
Available Funds remaining after the application of clauses (A)
through (D), the Noteholders' Principal Distribution Amount;
(F) on each Distribution Date on and after the date
on which the Notes have been paid in full, to the order of the
Eligible Lender Trustee, from the amount of Available Funds
remaining after the application of clauses (A) through (E),
the Certificateholders' Principal Distribution Amount; and
(G) to the Reserve Account, the amount of Available
Funds remaining after the application of clauses (A) through
(F).
Except in the case of amounts distributed pursuant to Sections
(iv)(G), amounts properly withdrawn from the Collection Account and distributed
pursuant to this Section 2(d) shall be deemed released from the Trust Estate and
the security interest therein granted to the Indenture Trustee, and the Persons
to whom such amounts are distributed shall in no event be required to refund any
such distributed amounts.
(e) Reserve Account. (i) The Seller shall deposit the
Reserve Account Initial Deposit into the Reserve Account as required by Section
2.01(b) of the Loan Sale Agreement.
(ii) On each Distribution Date, the Administrator shall
instruct the Indenture Trustee to withdraw from the Reserve Account the amount
of any Reserve Account Excess and distribute such amount to the Persons
specified below by 11:00 a.m. (New York time) in the following order of
priority: (A) to the payment of the unpaid principal amount of the Notes and the
15
Certificates, in the order of priority set forth in the last sentence of this
Section 2(e)(ii), until (x) the outstanding principal balance of the Notes plus
the Certificate Balance of the Certificates (in each case, after giving effect
to any other distributions in respect of principal occurring on such
Distribution Date) equals (y) the Pool Balance plus the Pre-Funded Amount, if
any, as of the close of business on the last day of the related Collection
Period, (B) to the Noteholders, the aggregate unpaid amount of any Noteholders'
Interest LIBOR Carryover, (C) to the Certificateholders, the aggregate unpaid
amount of any Certificateholders' Interest LIBOR Carryover, (D) if such
Distribution Date is on or subsequent to the January 2007 Distribution Date and
the Pool Balance on such Distribution Date is equal to 10% or less of the sum of
the Initial Pool Balance and the Initial Pre-Funded Amount, to the payment of
the unpaid principal amount of the Notes and Certificates in the order of
priority set forth in the last sentence of this Section 2(e)(ii), and (E) to
distribute 99% of the remaining amount of such excess to the Seller and 1% of
the remaining amount to the Company. Amounts properly distributed pursuant to
clause (E) of this Section 2(e)(ii) shall be deemed released from the Trust
Estate and the security interest therein granted to the Indenture Trustee, and
the Seller and the Company shall in no event thereafter be required to refund
any such distributed amounts. All distributions of principal on the Notes and
the Certificates pursuant to clauses (A) and (D) of this Section 2(e)(ii) shall
be allocated (after giving effect to all distributions of the Noteholders'
Principal Distribution Amount and the Certificateholders' Principal Distribution
Amount on such Distribution Date) to the Class A-1 Notes until the principal
balance of the Class A-1 Notes has been reduced to zero, then to the Class A-2
Notes until the principal balance of the Class A-2 Notes has been reduced to
zero, and then to the Certificates until the Certificate Balance has been
reduced to zero.
(iii) Following the payment in full of the aggregate
outstanding principal balance of the Notes and the Certificate Balance and of
all other amounts owing or to be distributed hereunder or under the Indenture or
the Trust Agreement to Noteholders, Certificateholders, the Master Servicer or
the Administrator and the termination of the Trust (including any Noteholders'
Interest LIBOR Carryover and Certificateholders' Interest LIBOR Carryover), 99%
of any amount remaining on deposit in the Reserve Account shall be distributed
to the Seller and 1% of any remaining amount on deposit in the Reserve Account
shall be distributed to the Company. The Seller and the Company shall in no
event be required to refund any amounts properly distributed pursuant to this
Section 2(e)(iii).
16
(iv) (A) In the event that the Servicing Fee for any Interest
Payment Date exceeds the amount distributed to the Master Servicer
pursuant to Sections 2(d)(iii)(A) or 2(d)(iv)(A) on such Interest
Payment Date, the Administrator shall instruct the Indenture Trustee to
withdraw from the Reserve Account on each Interest Payment Date an
amount equal to such excess.
(B) In the event that the Administration Fee for any
Interest Payment Date exceeds the amount distributed to the
Administrator pursuant to Sections 2(d)(iii)(B) or 2(d)(iv)(B) on such
Interest Payment Date, the Administrator shall instruct the Indenture
Trustee to withdraw from the Reserve Account on such Interest Payment
Date an amount equal to such excess, to the extent of funds available
therein after giving effect to paragraph (iv)(A) above, and to
distribute such amount to the Administrator.
(C) In the event that the Noteholders' Interest
Distribution Amount for an Interest Payment Date exceeds the amount
distributed to Noteholders pursuant to Section 2(d)(iii)(C) or
2(d)(iv)(C) on such Interest Payment Date, the Administrator shall
instruct the Indenture Trustee to withdraw from the Reserve Account on
such Interest Payment Date an amount equal to such excess, to the
extent of funds available therein after giving effect to paragraphs
(iv)(A) through (iv)(B) above, and to distribute such amount to the
Noteholders entitled thereto, in the same order and priority as is set
forth in Section 2(d)(iii) or Section 2(d)(iv) on such Interest Payment
Date.
(D) In the event that (i) the Certificate- holders'
Interest Distribution Amount for an Interest Payment Date exceeds the
amount distributed to the order of the Eligible Lender Trustee pursuant
to Section 2(d)(iii)(D) or 2(d)(iv)(D), the Administrator shall
instruct the Indenture Trustee to withdraw from the Reserve Account on
such Interest Payment Date an amount equal to such excess, to the
extent of funds available therein after giving effect to paragraphs
(iv)(A) through (iv)(C) above, and to distribute such amount to the
order of the Eligible Lender Trustee, in the same order and priority as
is set forth in Section 2(d)(iii) or 2(d)(iv) on such Interest Payment
Date.
(E) Only with respect to a Distribution Date
occurring on or after the January 2000 Distribution Date, in the event
that the Noteholders' Principal Distribution Amount for such a
Distribution Date exceeds the amount distributed to Noteholders
pursuant to Section 2(d)(iv)(E) on such Distribution Date, the
Administrator shall instruct
17
the Indenture Trustee to withdraw from the Reserve Account on such
Distribution Date an amount equal to such excess, to the extent of
funds available therein after giving effect to paragraphs (iv)(A)
through (iv)(D) above, and to distribute such amount to the Noteholders
entitled thereto, in the same order and priority as is set forth in
Section 2(d)(iv)(E) on such Distribution Date.
(F) Only with respect to a Distribution Date
occurring on or after the January 2000 Distribution Date, in the event
that the Certificateholders' Principal Distribution Amount for such a
Distribution Date exceeds the amount distributed to the Eligible Lender
Trustee pursuant to Section 2(d)(iv)(F) on such Distribution Date, the
Administrator shall instruct the Indenture Trustee to withdraw from the
Reserve Account on such Distribution Date an amount equal to such
excess, to the extent of funds available therein after giving effect to
paragraphs (iv)(A) through (iv)(E) above, and to distribute such amount
to the order of the Eligible Lender Trustee on such Distribution Date.
(f) Pre-Funding Account. (i) On the Closing Date, the Seller
will deposit in the Pre-Funding Account the Initial Pre-Funded Amount. During
the Funding Period, the Administrator shall instruct the Indenture Trustee to
withdraw from the Pre- Funding Account, in the following order of priority in
each case to the extent of the funds on deposit therein , first, on the Business
Day immediately preceding each Distribution Date and on the last date of the
Funding Period, an amount equal to the Capitalized Interest Amount for the
preceding Student Loan Rate Accrual Period and to deposit such amount into the
Collection Account and second, on each Transfer Date, an amount equal to the
Purchase Amount of the Additional Student Loans transferred to the Eligible
Lender Trustee on behalf of the Issuer on such Transfer Date and to distribute
such amount to or upon the order of the Seller upon satisfaction of the
conditions set forth in Section 2.02 of the Loan Sale Agreement with respect to
such transfer.
(ii) If (x) the Pre-Funded Amount has not been reduced to zero
on the Distribution Date on which the Funding Period ends (or, if the Funding
Period does not end on a Distribution Date, on the first Distribution Date
following the end of the Funding Period) or (y) the Pre-Funded Amount has been
reduced to $100,000 or less on any Distribution Date, in either case after
giving effect to any reductions in the Pre-Funded Amount on such Distribution
Date pursuant to Section 2(f)(i) above, the Administrator shall instruct the
Indenture Trustee to withdraw from the Pre-Funding Account on such Distribution
Date an amount
18
equal to the Pre-Funded Amount and to distribute such amount to Noteholders as a
payment of principal in the same manner as the Noteholders' Principal
Distribution Amount is distributed or, if Notes have been paid in full on or
prior to such Distribution Date, to distribute such amount to the order of the
Eligible Lender Trustee as a payment of principal in the same manner as the
Certificateholders' Principal Distribution Amount is distributed.
(g) Statements to Certificateholders and Noteholders. On each
Determination Date preceding a Distribution Date, the Administrator shall
provide to the Indenture Trustee (with a copy to the Rating Agencies) for the
Indenture Trustee to forward on such succeeding Distribution Date to each
Noteholder of record and to the Eligible Lender Trustee for the Eligible Lender
Trustee to forward on such succeeding Distribution Date to each
Certificateholder of record a statement substantially in the form of Exhibits B
and C, respectively, setting forth at least the following information as to the
Notes and the Certificates to the extent applicable:
(i) the amount of such distribution allocable to principal of
the Class A-1 Notes;
(ii) the amount of such distribution allocable to principal of
the Class A-2 Notes;
(iii) the amount of the distribution allocable to interest on
such Distribution Date and on each Interest Payment Date following the
immediately preceding Distribution Date of the Class A-1 Notes;
(iv) the amount of the distribution allocable to interest on
such Distribution Date and on each Interest Payment Date following the
immediately preceding Distribution Date of the Class A-2 Notes;
(v) the amount of such distribution allocable to principal of
the Certificates;
(vi) the amount of the distribution allocable to interest on
such Distribution Date and on each Interest Payment Date following the
immediately preceding Distribution Date of the Certificates;
(vii) the amount, if any, of such distribution allocable to any
Noteholders' Interest LIBOR Carryover and any Certificateholders'
Interest LIBOR Carryover, together with any remaining outstanding amount
of each thereof;
19
(viii) the Pool Balance as of the close of business on the last
day of the preceding Collection Period;
(ix) the aggregate outstanding principal balance of the Class
A-1 Notes, the Class A-1 Note Pool Factor, the aggregate outstanding
principal balance of the Class A-2 Notes, the Class A-2 Note Pool
Factor, the Certificate Balance and the Certificate Pool Factor as of
such Distribution Date, after giving effect to payments allocated to
principal reported under clauses (i), (ii) and (v) above;
(x) the Class A-1 Rate, the Class A-2 Rate and the
Certificate Rate applicable with respect to each distribution referred
to in clauses (iii), (iv) and (vi) above, indicating whether such
interest rate was calculated based on the Student Loan Rate or based on
LIBOR, and specifying what each such interest would have been using the
alternate basis for such calculation;
(xi) the amount of the Servicing Fee and prior unpaid
Servicing Fees paid to the Master Servicer on such Distribution Date and
on each Interest Payment Date following the immediately preceding
Distribution Date;
(xii) the amount of the Administration Fee and prior
unpaid Administration Fees paid to the Administrator on such
Distribution Date and on each Interest Payment Date following the
immediately preceding Distribution Date;
(xiii) the amount of the aggregate Realized Losses,
if any, for such Collection Period and the balance of Financed Student
Loans that are delinquent in each delinquency period as of the end of
such Collection Period;
(xiv) the balance of the Reserve Account on such
Distribution Date, after giving effect to changes therein on such
Distribution Date and indicating whether on such Distribution Date or
any Interest Payment Date since the preceding Distribution Date any
withdrawal was made therefrom pursuant to Section 2(e)(iv), the amount
of each such withdrawal and the purpose(s) pursuant to Section 2(e)(iv)
for each such withdrawal;
(xv) the amount of Reserve Account Excess, if any,
for such Distribution Date and amount thereof distributed pursuant to
each of the provisions of clauses (A) through (E) of Section 2(e)(ii);
20
(xvi) for Distribution Dates during the Funding
Period, the remaining Pre-Funded Amount after giving effect to changes
therein on such Distribution Date;
(xvii) for the Distribution Date on or immediately
following the end of the Funding Period, the amount of any remaining
Pre-Funded Amount that has not been used to make Additional Fundings;
(xviii) the principal balance and number of Additional
Student Loans conveyed to the Issuer during the related Collection
Period;
(xix) the number and principal balance of Financed
Student Loans as of the end of the related Collection Period, that are
(A) In-School, (B) Grace, (C) Repayment, (D) Deferral, or (E)
Forbearance; and
(xx) the number and principal balance of Financed
Student Loans as of the end of the related Collection Period that are
(A) Consolidation Loans, (B) PLUS Loans, (C) subsidized Xxxxxxxx Loans,
(D) unsubsidized Xxxxxxxx Loans or (E) SLS Loans; and
(xxi) the number and principal balance of Financed
Student Loans as of the end of the related Collection Period that were
originated for the purpose of financing attendance at (A) 2-year
institutions, (B) 4-year institutions; (C) graduate schools; (D)
proprietary or vocational schools or (E) other.
Each amount set forth pursuant to clauses (i), (ii), (iii), (iv), (v) and (vi)
above shall be expressed as a dollar amount per $1,000 of original principal
balance of a Certificate or Note, as applicable. A copy of the statements
referred to above may be obtained by any Certificate Owner or Note Owner by a
written request to the Eligible Lender Trustee or the Indenture Trustee,
respectively, addressed to the respective Corporate Trust Office.
(h) Non-Ministerial Matters. With respect to matters that in
the reasonable judgment of the Administrator are non-ministerial, the
Administrator shall not take any action unless within a reasonable time before
the taking of such action, the Administrator shall have notified the Eligible
Lender Trustee of the proposed action and the Eligible Lender Trustee shall have
consented to it. For the purpose of the preceding sentence, "non-ministerial
matters" shall include:
21
(i) the amendment of or any supplement to the Indenture;
(ii) the initiation of any claim or lawsuit by the Issuer and
the compromise of any action, claim or lawsuit brought by or against
the Issuer (other than in connection with the collection of the
Financed Student Loans);
(iii) the amendment, change or modification of the Related
Agreements;
(iv) the appointment of successor Note Registrars, successor
Paying Agents and successor Indenture Trustees pursuant to the
Indenture or the appointment of successor Administrators or Successor
Master Servicers, or the consent to the assignment by the Note
Registrar, Paying Agent or Indenture Trustee of its obligations under
the Indenture; and
(v) the removal of the Indenture Trustee.
(i) Administrator Deposit Condition. During each Monthly
Collection Period during which an Administrator Deposit Condition shall exist,
notwithstanding any other provision of this Agreement or the other Basic
Documents, all amounts required to be deposited into the Collection Account
pursuant to Section 4.01 of the Master Servicing Agreement shall at the time of
such required deposit instead be remitted to the account of the Administrator.
So long as an Administrator Deposit Condition shall exist, the Administrator
shall be required to deposit all amounts so remitted to it during any Monthly
Collection Period into the Collection Account no later than the Business Day
prior to the next succeeding Interest Payment Date and prior to such deposit
such amounts may be invested by the Administrator at its own risk and for its
own benefit (with any losses on such amounts remitted to it to be paid into the
Collection Account by the Administrator out of its own funds) and may be
commingled by the Administrator with its own funds and for all purposes of the
Basic Documents, other than the administration of such funds as provided for
above, such amounts shall be deemed to be on deposit in the Collection Account
at the time they are so held by the Administrator.
3. Annual Statement as to Compliance. (a) The Administrator
shall deliver to the Seller, the Eligible Lender Trustee and the Indenture
Trustee, on or before June 30 of each year beginning June 30, 1998, an Officers'
Certificate of the Administrator, stating that (i) a review of the activities of
the Administrator during the preceding fiscal year ending December 31 (or, in
the case of the first such certificate, during the period
22
from the Closing Date to December 31, 1997) and of its performance under this
Agreement has been made under such officers' supervision and (ii) to the best of
such officers' knowledge, based on such review, the Administrator has fulfilled
all its obligations under this Agreement throughout such year or, if there has
been a default in the fulfillment of any such obligation, specifying each such
default known to such officers and the nature and status thereof. The Indenture
Trustee shall send a copy of each such Officer's Certificate and each report
referred to in Section 4 to the Rating Agencies. A copy of such Officer's
Certificate and each report referred to in Section 4 may be obtained by any
Certificateholder, Certificate Owner, Noteholder or Note Owner by a request in
writing to the Eligible Lender Trustee addressed to its Corporate Trust Office,
together with evidence satisfactory to the Eligible Lender Trustee that such
Person is one of the foregoing parties. Upon the telephone request of the
Eligible Lender Trustee (to be confirmed in writing), the Indenture Trustee will
promptly furnish the Eligible Lender Trustee a list of Noteholders as of the
date specified by the Eligible Lender Trustee.
(b) The Administrator shall deliver to the Eligible Lender
Trustee, the Indenture Trustee, the Master Servicer, and the Rating Agencies,
promptly after having obtained knowledge thereof, but in no event later than two
Business Days thereafter, written notice in an Officers' Certificate of the
Administrator of any event which with the giving of notice or lapse of time, or
both, would become an Administrator Default under Section 12.
4. Annual Independent Certified Public Accountants' Report.
The Administrator shall cause a firm of independent certified public
accountants, which may also render other services to the Administrator, to
deliver to the Seller, the Eligible Lender Trustee and the Indenture Trustee on
or before June 30 of each year beginning June 30, 1998, a report addressed to
the Administrator and to the Seller, the Eligible Lender Trustee and the
Indenture Trustee (which report may be combined with other reports required to
be delivered by such accountants to the Administrator, the Eligible Lender
Trustee and the Indenture Trustee under the Related Agreements), to the effect
that such firm has examined certain documents and records relating to the
administration of the Financed Student Loans and of the Trust during the
preceding fiscal year ended December 31 (or, in the case of the first such
report, during the period from the Closing Date to December 31, 1997) and that,
on the basis of the accounting and auditing procedures considered appropriate
under the circumstances, such firm is of the opinion that such administration
was conducted in compliance with the terms of this Agreement except for (i) such
exceptions as such firm shall believe to be immaterial and (ii) such other
exceptions as shall
23
be set forth in such report. The Indenture Trustee shall send a copy of each
such report to the Rating Agencies.
Such report will also indicate that the firm is independent of
the Administrator within the meaning of the Code of Professional Ethics of the
American Institute of Certified Public Accountants.
5. Administrator Expenses. The Administrator shall be
required to pay all expenses incurred by it in connection with its activities
hereunder, including fees and disbursements of independent accountants, taxes
imposed on the Administrator and expenses incurred in connection with
distributions and reports to the Certificateholders and the Noteholders, as the
case may be.
6. Records. The Administrator shall maintain appropriate
books of account and records relating to services performed hereunder, which
books of account and records shall be accessible for inspection by the Issuer at
any time during normal business hours upon reasonable request.
7. Compensation. As compensation for the performance of the
Administrator's obligations under this Agreement and as reimbursement for its
expenses related thereto, the Administrator shall be entitled to the
Administration Fee payable monthly in arrears on each Interest Payment Date
which shall be solely an obligation of the Issuer and payable solely as provided
herein.
8. Additional Information To Be Furnished to the Issuer.
Subject to Section 31 hereof, the Administrator shall furnish to the Issuer from
time to time such additional information regarding the Collateral as the Issuer
shall reasonably request.
9. Independence of the Administrator. For all purposes of this
Agreement, the Administrator shall be an independent contractor and shall not be
subject to the supervision of the Issuer or the Eligible Lender Trustee with
respect to the manner in which it accomplishes the performance of its
obligations hereunder. Unless expressly authorized by the Issuer, the
Administrator shall have no authority to act for or represent the Issuer or the
Eligible Lender Trustee in any way and shall not otherwise be deemed an agent of
the Issuer or the Eligible Lender Trustee.
10. No Joint Venture. Nothing contained in this Agreement (i)
shall constitute the Administrator and either of the Issuer or the Eligible
Lender Trustee as members of any partnership, joint venture, association,
syndicate, unincorporated business or other separate entity, (ii) shall be
24
construed to impose any liability as such on any of them or (iii) shall be
deemed to confer on any of them any express, implied or apparent authority to
incur any obligation or liability on behalf of the others.
11. Other Activities of Administrator. Nothing herein shall
prevent the Administrator or its Affiliates from engaging in other businesses
or, in its sole discretion, from acting in a similar capacity as an
administrator for any other person or entity even though such person or entity
may engage in business activities similar to those of the Issuer, the Eligible
Lender Trustee or the Indenture Trustee.
12. Administrator Default. If any one of the following events
(an "Administrator Default") shall occur and be continuing:
(a) any failure by the Administrator to direct the Indenture
Trustee to make any required distributions from any of the Trust
Accounts, which failure continues unremedied for five Business Days
after written notice of such failure is received by the Administrator
from the Indenture Trustee or the Eligible Lender Trustee or after
discovery of such failure by an officer of the Administrator; or
(b) any failure by the Administrator duly to observe or to
perform in any material respect any other covenants or agreements of
the Administrator set forth in this Agreement or any Related
Agreements, which failure shall (i) materially and adversely affect the
rights of Noteholders or Certificateholders and (ii) continues
unremedied for a period of 60 days (or for such longer period, not in
excess of 120 days, as may be reasonably necessary to remedy such
failure, if the Indenture Trustee and the Eligible Lender Trustee
reasonably believe such failure is susceptible to cure within such
longer period) 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 either the Indenture Trustee or the Eligible Lender
Trustee or (B) to the Administrator and to the Indenture Trustee and
the Eligible Lender Trustee by the Noteholders or Certificateholders,
as applicable, representing not less than 25% of the Outstanding Amount
of the Notes or 25% of the outstanding Certificate Balance; or
(c) an Insolvency Event occurs with respect to the
Administrator;
25
then, and in each and every case, so long as the Administrator Default shall not
have been remedied, either the Indenture Trustee, or the Noteholders evidencing
not less than 75% of the Outstanding Amount of the Notes, by notice then given
in writing to the Administrator (and to the Indenture Trustee and the Eligible
Lender Trustee if given the Noteholders) may terminate all the rights and
obligations (other than the obligations set forth in Section 24 hereof) of the
Administrator under this Agreement. On or after the receipt by the Administrator
of such written notice, all authority and power of the Administrator under this
Agreement, whether with respect to the Notes, the Certificates or the Financed
Student Loans or otherwise, shall, without further action, pass to and be vested
in the Indenture Trustee or such successor Administrator as may be appointed
under Section 13; and, without limitation, the Indenture Trustee and the
Eligible Lender Trustee are hereby authorized and empowered to execute and
deliver, for the benefit of the predecessor Administrator, as attorney-in-fact
or otherwise, any and all documents and other instruments, and to do or
accomplish all other acts or things necessary or appropriate to effect the
purposes of such notice of termination. The predecessor Administrator shall
cooperate with the successor Administrator, the Indenture Trustee and the
Eligible Lender Trustee in effecting the termination of the responsibilities and
rights of the predecessor Administrator under this Agreement. All reasonable
costs and expenses (including attorneys' fees and expenses) incurred in
connection with amending this Agreement to reflect such succession as
Administrator pursuant to this Section shall be paid by the predecessor
Administrator upon presentation of reasonable documentation of such costs and
expenses. Upon receipt of notice of the occurrence of an Administrator Default,
the Eligible Lender Trustee shall give notice thereof to the Rating Agencies.
13. Appointment of Successor. (a) Upon receipt by the
Administrator of notice of termination pursuant to Section 12, or the
resignation by the Administrator in accordance with the terms of this Agreement,
the predecessor Administrator shall continue to perform its functions as
Administrator, in the case of termination, only until the date specified in such
termination notice or, if no such date is specified in a notice of termination,
until receipt of such notice and, in the case of resignation, until the later of
(x) the date 120 days from the delivery to the Eligible Lender Trustee and the
Indenture Trustee of written notice of such resignation (or written confirmation
of such notice) in accordance with the terms of this Agreement and (y) 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. In the event of termination hereunder of the Administrator, the
Issuer shall
26
appoint a successor Administrator acceptable to the Indenture Trustee and the
successor Administrator shall accept its appointment by a written assumption in
form acceptable to the Indenture Trustee. In the event that a successor
Administrator has not been appointed at the time when the predecessor
Administrator has ceased to act as Administrator in accordance with this
Section, the Indenture Trustee without further action shall automatically be
appointed the successor Administrator and the Indenture Trustee shall be
entitled to the Administration Fee. Notwithstanding the above, the Indenture
Trustee 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 and the
Administration Agreement.
(b) Upon appointment, the successor Administrator (including
the Indenture Trustee acting as successor Administrator) shall be the successor
in all respects to the predecessor Administrator and shall be subject to all the
responsibilities, duties and liabilities placed on the predecessor Administrator
that arise thereafter or are related thereto and shall be entitled to an amount
agreed to by such successor Administrator (which shall not exceed the
Administration Fee unless such compensation arrangements will not result in a
downgrading of the Notes or the Certificates by any Rating Agency) and all the
rights granted to the predecessor Administrator by the terms and provisions of
this Agreement.
(c) The Administrator may not resign unless it is prohibited
from serving as such by law as evidenced by an Opinion of Counsel to such effect
delivered to the Indenture Trustee and the Eligible Lender Trustee.
Notwithstanding the foregoing or anything to the contrary herein or in the
Related Agreements, the Indenture Trustee, to the extent it is acting as
successor Administrator pursuant hereto, shall be entitled to resign to the
extent a qualified successor Administrator has been appointed and has assumed
all the obligations of the Administrator in accordance with the terms of this
Agreement and the Related Agreements.
14. Notification to Noteholders and Certificateholders. Upon
any termination of, or appointment of a successor to, the Administrator pursuant
to Section 12 or 13, the Eligible Lender Trustee shall give prompt written
notice thereof to Certificateholders and the Indenture Trustee 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).
27
15. Waiver of Past Defaults. The Noteholders of Notes
evidencing not less than a majority of the Outstanding Amount of the Notes (or
the Certificateholders of Certificates evidencing not less than a majority of
the outstanding Certificate Balance, in the case of any default which does not
adversely affect the Indenture Trustee or the Noteholders) may, on behalf of all
Noteholders and Certificateholders, 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.
16. Notices. Any notice, report or other communication given
hereunder shall be in writing (or in the form of facsimile notice, followed by
written notice) and addressed as follows:
(a) if to the Issuer, to
Signet Student Loan Trust 1996-A
c/o First Chicago Delaware Inc., Trustee
000 Xxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
with a copy to the Eligible Lender Trustee
at the Corporate Trust Office of the
Eligible Lender Trustee
(b) if to the Eligible Lender Trustee, to
The First National Bank of Chicago
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Administration
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
28
(c) if to the Administrator, to
Signet Bank
0 Xxxxx 0xx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Treasurer
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
(d) if to the Indenture Trustee, to
The Bank of New York
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Asset Backed Finance Unit
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
or to such other address as any party shall have provided to the other parties
in writing. Any notice required to be in writing hereunder shall be deemed given
if such notice is mailed by certified mail, postage prepaid, or hand-delivered
to the address of such party as provided above.
17. Amendments. This Agreement may be amended from time to
time by a written amendment duly executed and delivered by the Issuer, the
Administrator and the Indenture Trustee, with the written consent of the
Eligible Lender Trustee, without the consent of the Noteholders and the
Certificateholders, 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 or Certificateholders or
in connection with a transaction described in Section 25 hereof; 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 Eligible Lender
Trustee, materially and adversely affect the interest of any Noteholder or
Certificateholder. This Agreement may also be amended by the Issuer, the
Administrator and the Indenture Trustee with the written consent of the Eligible
Lender Trustee, the Noteholders of at least a majority in the Outstanding Amount
of the Notes and the Certificateholders of at least a majority of the
Certificate Balance for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Agreement or of
modifying in any manner the rights of Noteholders or the Certificateholders;
provided, however, that no such amendment may (i) increase or reduce in any
manner the amount of, or accelerate or delay the timing of, collections of
payments with respect to Student Loans or distributions that are required to be
made for the benefit of the Noteholders or
29
Certificateholders or (ii) reduce the aforesaid percentage of the Noteholders
and the Certificateholders which are required to consent to any such amendment,
without the consent of all Outstanding Noteholders and Certificateholders. Prior
to the execution of any such amendment, the Administrator shall furnish written
notification of the substance of such amendment to each of the Rating Agencies.
18. Assignment. Notwithstanding anything to the contrary
contained herein, except as provided in Section 13 or 25 of this Agreement
concerning the resignation of the Administrator, this Agreement may not be
assigned by the Administrator.
19. Governing Law. This Agreement shall be construed in
accordance with the laws of the Commonwealth of Virginia, without reference to
its conflict of law provisions, and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws.
20. Headings. The section headings hereof have been inserted
for convenience of reference only and shall not be construed to affect the
meaning, construction or effect of this Agreement.
21. Counterparts. This Agreement may be executed in
counterparts, each of which when so executed shall together constitute but one
and the same agreement.
22. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall be ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
23. Not Applicable to Signet Bank in Other Capacities. Nothing
in this Agreement shall affect any obligation Signet Bank may have in any other
capacity under the Related Agreements.
24. Liability of Administrator; Indemnities. The
Administrator shall be liable in accordance herewith only to the extent of the
obligations specifically undertaken by the Administrator under this Agreement.
The Administrator shall indemnify, defend and hold harmless
the Issuer, the Eligible Lender Trustee, the Indenture Trustee, the Master
Servicer, any Subservicer, the Certificateholders and the Noteholders and any of
the officers,
30
directors, employees and agents of the Issuer, the Eligible Lender Trustee, the
Indenture Trustee, the Master Servicer and any Subservicer from and against any
and all costs, expenses, losses, claims, damages and liabilities to the extent
that such cost, expense, loss, claim, damage or liability arose out of, or was
imposed upon any such Person through, the negligence, willful misfeasance or bad
faith of the Administrator in the performance of its duties under this Agreement
or by reason of reckless disregard of its obligations and duties hereunder or
thereunder.
The Administrator shall pay reasonable compensation to the
Indenture Trustee and shall reimburse the Indenture Trustee for all reasonable
expenses, disbursements and advances, and indemnify, defend and hold harmless
the Indenture Trustee and its officers, directors, employees and agents from and
against all costs, expenses, losses, claims, damages and liabilities, to the
extent and in the manner provided in, and subject to the limitations of, Section
6.07 of the Indenture.
For purposes of this Section, in the event of the termination
of the rights and obligations of the Administrator (or any successor thereto
pursuant to Section 25) as Administrator pursuant to Section 12 or a resignation
by such Administrator pursuant to this Agreement, such Administrator shall be
deemed to be the Administrator pending appointment of a successor Administrator
pursuant to Section 13.
Indemnification under this Section shall survive the
resignation or removal of the Eligible Lender Trustee or the Indenture Trustee
or the termination of this Agreement and shall include reasonable fees and
expenses of counsel and expenses of litigation. If the Administrator shall have
made any indemnity payments pursuant to this Agreement and the Person to or on
behalf of whom such payments are made thereafter collects any of such amounts
from others, such Person shall promptly repay such amounts to the Administrator,
without interest.
25. Merger or Consolidation of, or Assumption of the
Obligations of, Administrator. The Administrator hereby agrees that, upon (a)
any merger or consolidation of the Administrator into another Person, (b) any
merger or consolidation to which the Administrator shall be a party resulting in
the creation of another Person, (c) any Person succeeding to the properties and
assets of the Administrator substantially as a whole or (d) the other transfer
by the Administrator to any Person of the Administrator's student lending
business substantially as a whole, the Administrator shall (i) cause such Person
(if other than the Administrator) to execute an agreement of assumption to
perform every obligation of the Administrator hereunder, (ii) deliver to the
Eligible Lender Trustee and Indenture Trustee an
31
Officers' Certificate and an Opinion of Counsel each stating that such
consolidation, merger or succession and such agreement of assumption comply with
this Section and that all conditions precedent provided for in this Agreement
relating to such transaction have been complied with, (iii) cause the Rating
Agency Condition to be satisfied or, in the case of a transfer pursuant to
clause (d) to a Person that is a Non-Code Entity, deliver notice of such
transfer and assumption to each Rating Agency, and (iv) cure any existing
Administrator Default or any continuing event which, after notice or lapse of
time or both, would become an Administrator Default. Upon compliance with the
foregoing requirements, such Person shall be the successor to the Administrator
under this Agreement without further act on the part of any of the parties to
this Agreement. Notwithstanding anything herein to the contrary, compliance with
clauses (i), (ii), (iii) and (iv) above shall be conditions to the consummation
of any of the transactions referred to in clause (a), (b) or (c) above.
26. Limitation on Liability of Administrator and Others.
Neither the Administrator nor any of its directors, officers, employees or
agents shall be under any liability to the Issuer, the Noteholders or the
Certificateholders, the Indenture Trustee or the Eligible Lender Trustee, the
Master Servicer or the Paying Agent(s) except as provided under this Agreement,
for any action taken or for refraining from the taking of any action pursuant to
this Agreement or for errors in judgment; provided, however, that this provision
shall not protect the Administrator or any such person against any liability
that would otherwise be imposed by reason of willful misfeasance, bad faith or
negligence in the performance of its duties or by reason of reckless disregard
of obligations and its duties under this Agreement. The Administrator and any of
its directors, officers, employees or agents may rely in good faith on the
advice of counsel or on any document of any kind prima facie properly executed
and submitted by any Person respecting any matters arising hereunder.
Except as provided in this Agreement, the Administrator shall
not be under any obligation to appear in, prosecute or defend any legal action
that shall not be incidental to its duties to administer the Financed Student
Loans and the Trust in accordance with this Agreement, and that in its opinion
may involve it in any expense or liability; provided, however, that the
Administrator may undertake any reasonable action that it may deem necessary or
desirable in respect of this Agreement and the other Basic Documents and the
rights and duties of the parties to this Agreement and the Related Agreements
and the interests of the Certificateholders under this Agreement and the
Noteholders under the Indenture.
32
27. Signet Bank Not to Resign as Administrator. Subject to the
provisions of Section 25, Signet Bank 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 Signet Bank or its
properties. Notice of any such determination permitting the resignation of
Signet Bank shall be communicated to the Eligible Lender Trustee and the
Indenture Trustee at the earliest practicable time (and, if such communication
is not in writing, shall be confirmed in writing at the earliest practicable
time) and any such determination shall be evidenced by an Opinion of Counsel to
such effect delivered to the Eligible Lender Trustee and the Indenture Trustee
concurrently with or promptly after such notice. No such resignation shall
become effective until the Indenture Trustee or a successor Administrator shall
have assumed the responsibilities and obligations of Signet Bank in accordance
with Section 13.
28. Limitation of Liability of Eligible Lender Trustee and
Indenture Trustee. (a) Notwithstanding anything contained herein to the
contrary, this instrument has been countersigned by The First National Bank of
Chicago not in its individual capacity but solely in its capacity as Eligible
Lender Trustee of the Issuer and in no event shall The First National Bank of
Chicago in its individual capacity or any Owner of the Issuer have any liability
for the representations, warranties, covenants, agreements or other obligations
of the Issuer hereunder, as to all of which recourse shall be had solely to the
assets of the Issuer. For all purposes of this Agreement, in the performance of
any duties or obligations of the Issuer thereunder, the Eligible Lender Trustee
shall be subject to, and entitled to the benefits of, the terms and provisions
of Articles VI, VII and VIII of the Trust Agreement.
(b) Notwithstanding anything contained herein to the contrary,
this Agreement has been countersigned by The Bank of New York not in its
individual capacity but solely as Indenture Trustee and in no event shall The
Bank of New York have any liability for the representations, warranties,
covenants, agreements or other obligations of the Issuer hereunder or in any of
the certificates, notices or agreements delivered pursuant hereto, as to all of
which recourse shall be had solely to the assets of the Issuer.
29. Insolvency of Company. (a) Upon any sale of the assets
of the Trust pursuant to Section 9.02 of the Trust Agreement, the Indenture
Trustee shall deposit the net proceeds from such sale after all payments and
reserves therefrom (including
33
the expenses of such sale) have been made (the "Insolvency Proceeds") in the
Collection Account. On the Distribution Date on, or, if such proceeds are not so
deposited on a Distribution Date, on the first Distribution Date following the
date on which the Insolvency Proceeds are deposited in the Collection Account,
the Administrator shall instruct the Indenture Trustee to make the following
distributions (after the application on such Distribution Date of the amount of
Available Funds and amounts on deposit in the Reserve Account pursuant to
Sections 2(d) and 2(e)) from the Insolvency Proceeds and any funds remaining on
deposit in the Reserve Account (including the proceeds of any sale of
investments therein as described in the following sentence):
(i) to the Noteholders, any portion of the Noteholders'
Interest Distribution Amount not otherwise distributed to the
Noteholders on such Distribution Date;
(ii) to the Certificateholders, any portion of the
Certificateholders' Interest Distribution Amount not otherwise
distributed to the Certificateholders on such Distribution Date;
(iii) to the Noteholders, the outstanding principal
balance of the Notes (after giving effect to the reduction in the
outstanding principal balance of the Notes to result from the
distributions to Noteholders on such Distribution Date and on prior
Distribution Dates), pro rata based on such outstanding principal
balance;
(iv) to the Certificateholders, the Certificate Balance
(after giving effect to the reduction in the Certificate Balance to
result from the distributions to Certificateholders on such
Distribution Date);
(v) to the Noteholders, any unpaid Noteholders'
Interest LIBOR Carryover not otherwise distributed to the Noteholders
on such Distribution Date; and
(vi) to the Certificateholders, any unpaid
Certificateholders' Interest LIBOR Carryover not otherwise distributed
to the Certificateholders on such Distribution Date.
Any investments on deposit in the Reserve Account which will not mature on or
before such Distribution Date shall be sold by the Indenture Trustee at such
time as will result in the Indenture Trustee receiving the proceeds from such
sale not later than the Business Day preceding such Distribution Date. Any
Insolvency
34
Proceeds remaining after the deposits described above shall be paid 99% to the
Seller and 1% to the Company.
(b) As described in Article IX of the Trust Agreement, notice
of any termination of the Trust shall be given by the Administrator to the
Eligible Lender Trustee and the Indenture Trustee as soon as practicable after
the Administrator has received notice thereof.
30. Third-Party Beneficiaries. The Eligible Lender Trustee is
a third party beneficiary to this Agreement and is entitled to the rights and
benefits hereunder and may enforce the provisions hereof as if it were a party
hereto.
31. Confidentiality. (a) The Indenture Trustee and its
agents, representatives or employees shall at all times maintain the
confidentiality of all Confidential Information and shall not, without the prior
written consent of the Administrator, disclose to third parties (including
Noteholders or Certificateholders) or use such information, in any manner
whatsoever, in whole or in part, except as expressly permitted under this
Agreement or as required to fulfill an obligation of the Indenture Trustee under
this Agreement, in which case such Confidential Information shall be revealed
only to the extent required for the purpose of fulfilling an obligation of the
required for the purpose of fulfilling an obligation of the Indenture Trustee
under this Agreement. Notwithstanding the above, Confidential Information may be
disclosed to the extent required by law or legal process, provided that the
Indenture Trustee gives prompt written notice to the Administrator of the nature
and scope of such disclosure.
(b) Notwithstanding anything in this Agreement to the
contrary, the Administrator shall not be obligated to disclose to any Person (i)
any information regarding Obligors, the disclosure of which is prohibited by
applicable law, or (ii) any information relating to the strategic plans or
opportunities of its student lending business.
35
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered as of the day and year first above
written.
SIGNET STUDENT LOAN TRUST 1996-A,
by THE FIRST NATIONAL BANK OF
CHICAGO, not in its individual
capacity but solely as Eligible
Lender Trustee,
by /s/ XXXXXXX X. XXXXXX
---------------------------
Name: XXXXXXX X. XXXXXX
Title: ASSISTANT VICE PRESIDENT
THE BANK OF NEW YORK, not in its
individual capacity but solely as
Indenture Trustee,
by /s/ XXXXXX X. LASER
---------------------------
Name: XXXXXX X. LASER
Title: ASSISTANT VICE PRESIDENT
SIGNET BANK,
as Administrator,
by /s/ XXXXXXX XXXXXXX
---------------------------
Name: XXXXXXX XXXXXXX
Title: SR. VICE PRESIDENT
36
EXHIBIT A TO THE
ADMINISTRATION AGREEMENT
POWER OF ATTORNEY
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK)
KNOW ALL MEN BY THESE PRESENTS, that The First National Bank of
Chicago, a national bank, not in its individual capacity but solely as eligible
lender trustee ("Eligible Lender Trustee") for the Signet Student Loan Trust
1996-A (the "Trust"), does hereby make, constitute and appoint Signet Bank, as
Administrator under the Administration Agreement (as defined below), and its
agents and attorneys, as Agents and Attorneys-in-Fact to execute on behalf of
Eligible Lender Trustee or the Trust all such documents, reports, filings,
instruments, certificates and opinions as it should be the duty of Eligible
Lender Trustee or the Trust to prepare, file or deliver pursuant to the Related
Agreements (as defined in the Administration Agreement) or pursuant to Section
5.05(a), (b), (c) or (d) of the Trust Agreement (as defined in the
Administration Agreement), including without limitation, to appear for and
represent Eligible Lender Trustee and the Trust in connection with the
preparation, filing and audit of federal, state and local tax returns pertaining
to the Trust, and with full power to perform any and all acts associated with
such returns and audits that the Eligible Lender Trustee could perform,
including without limitation, the right to distribute and receive confidential
information, defend and assert positions in response to audits, initiate and
defend litigation, and to execute waivers of restriction on assessments of
deficiencies, consents to the extension of any statutory or regulatory time
limit, and settlements. For the purpose of this Power of Attorney, the term
"Administration Agreement" means the Administration Agreement dated as of
November 1, 1996, among the Trust, Signet Bank, as Administrator, and The Bank
of New York, as Indenture Trustee, as such may be amended from time to time.
All powers of attorney for this purpose heretofore filed or executed by
Eligible Lender Trustee are hereby revoked.
EXECUTED as of the first day of [ ], 1996.
THE FIRST NATIONAL BANK OF CHICAGO,
not in its individual capacity but
solely as Eligible Lender Trustee
by
-----------------------------
Name:
Title:
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
Before me, the undersigned authority, on this day personally
appeared [ ] known to me to be the person whose name is subscribed to the
foregoing instrument, and acknowledged to me that such person signed the same
for the purposes and considerations therein expressed.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this [ ] day
of [ ], 1996.
----------------------------------
Notary Public in and for the
State of New York
----------------------------------
Printed Name of Notary Public
Commission Expires
-----------------------------------
A-2
EXHIBIT B
TO THE
ADMINISTRATION AGREEMENT
Form of Noteholders' Statement pursuant to Section 2(g) of Administration
Agreement (capitalized terms used herein are defined in Appendix A thereto)
Distribution Date:
(i) Amount of principal being paid or distributed:
(a) Class A-1 Notes:__________ ($_______ per $1,000
original principal
amount of Class A-1
Notes)
(b) Class A-2 Notes:__________ ($_______ per $1,000
original principal
amount of Class A-2
Notes)
Distribution Date and last two Interest Payment Dates:
(ii) Amount of interest being paid or distributed:
(a) Class A-1 Notes:__________ ($_______ per $1,000
original principal
amount of Class A-1
Notes)
(b) Class A-2 Notes:__________ ($_______ per $1,000
original principal
amount of Class A-2
Notes)
Distribution Date:
(iii) Amount of Noteholders' Interest LIBOR Carryover being paid or
distributed (if any) and amount remaining (if any):
(a) Class A-1 Notes:
(1) Distributed:__________ ($_______ per $1,000
original principal
amount of Class A-1
Notes)
(2) Balance:______________ ($_______ per $1,000
original) principal
amount of Class A-1
Notes)
(b) Class A-2 Notes:
(1) Distributed:__________ ($_______ per $1,000
original principal
amount of Class A-2
Notes)
(2) Balance:______________ ($_______ per $1,000
original principal
amount of Class A-2
Notes)
(iv) Pool Balance at end of related Collection Period:
----------
(v) After giving effect to distributions on this
Distribution Date:
(a) (1) outstanding principal amount of Class A-1
Notes:__________
(2) Class A-1 Note Pool Factor:__________
(b) (1) outstanding principal amount of Class A-2
Notes:__________
(2) Class A-2 Note Pool Factor:__________
(c) (1) Certificate Balance:_________________
(2) Certificate Pool Factor:______________
(vi) Applicable Interest Rate:
(a) In general:
(1) LIBOR for each of the Interest Payment Dates
since the previous Distribution Date was
_____%, _____% and _____%; and
(2) the Student Loan Rate was _____%.
(b) Class A-1 Rate:_____% (based on [LIBOR]
[Student Loan Rate])
(c) Class A-2 Rate:_____% (based on [LIBOR]
[Student Loan Rate])
B-2
(vii) Amount of Servicing Fee for related Collection Period:
__________ ($________ per $1,000 original principal
amount of Notes)
(viii) Amount of Administration Fee for related Collection
Period:__________ ($_______ per $1,000 original
principal amount of Notes)
(ix) Aggregate amount of Realized Losses (if any) for the
related Collection Period:__________
(x) Financed Student Loans delinquent at end of related
Collection Period: __________; number of delinquent
loans: ________; aggregate unpaid principal balance of
delinquent loans: ___________________
(xi) Withdrawal from Reserve Account on related Distribution
Date: _______________
(xii) Withdrawal from Pre-Funding Account during related
Collection Period: __________
(xiii) Amount in the Reserve Account (after giving effect to
(xi)):__________
(xiv) Amount in the Pre-Funding Account (after giving effect
to (xii)):__________
(xv) Additional Student Loans: _______ loans with aggregate
principal balance of $_______ were acquired during the
related Collection Period; withdrawal from Pre-funding
Account to fund the purchase of Additional Student
Loans during the related Collection Period:
$______.
B-3
EXHIBIT C
TO THE
ADMINISTRATION AGREEMENT
Form of Certificateholders' Statement pursuant to Section 2(g) of Administration
Agreement (capitalized terms used herein are defined in Appendix A thereto)
Distribution Date:__________
(i) Amount of principal being paid or distributed in
respect of the Certificates:_______ ($_______ per $1,000
original principal
amount of the
Certificates)(1)
(ii) Amount of interest being paid or distributed in respect
of the Certificates on this Distribution Date and each
of last two Interest Payment Dates:_____________ ($______ per $1,000
original principal
amount of
Certificates)
(iii) Amount of Certificateholders' Interest LIBOR Carryover being
paid or distributed (if any) and amount remaining (if any):
(1) Distributed:__________ ($_______ per $1,000
original principal
amount of
Certificates)
(2) Balance:__________ ($ ______ per $1,000
original principal
amount of
Certificates)
(iv) Pool Balance at end of related Collection Period:
________________________________________________
(v) After giving effect to distributions on this
Distribution Date:
--------
(1) Only after the Notes have been paid in full.
(a) (1) outstanding principal amount of Class A-1
Notes:__________
(2) Class A-1 Note Pool Factor:__________
(b) (1) outstanding principal amount of Class A-2
Notes:__________
(2) Class A-2 Note Pool Factor:__________
(c) (1) Certificate Balance:__________
(2) Certificate Pool Factor:__________
(vi) Applicable Interest Rate:
(a) In general:
(1) LIBOR for each of the three Interest Payment
Dates since the previous Distribution Date
was _____%, _____% and _____%; and
(2) the Student Loan Rate was _____%.
(b) Certificate Rate:_____% (based on [LIBOR]
[Student Loan Rate])
(vii) Amount of Servicing Fee for related Monthly Collection
Period: __________ ($_______ per $1,000 original
principal amount of Certificates)
(viii) Amount of Administration Fee for related Monthly
Collection Period:__________ ($_______ per $1,000
original principal amount of Certificates)
(ix) Aggregate amount of Realized Losses (if any) for the
related Collection Period:__________
(x) Financed Student Loans delinquent at end of related
Collection Period: __________; number of delinquent
loans: ________; aggregate unpaid principal balance of
delinquent loans: ___________________
(xi) Withdrawal from Reserve Account on related Distribution
Date: _______________
(xii) Withdrawal from Pre-Funding Account during related
Monthly Collection Period: __________
(xiii) Amount in the Reserve Account (after giving effect to
(xi)):__________
(xiv) Additional Student Loans: _______ loans with aggregate
principal balance of $_______ were originated during
C-2
the related Collection Period; withdrawal from Pre- funding
Account to fund the purchase of Additional Student Loans
during the related Collection Period: $________.
C-3
APPENDIX A TO THE
ADMINISTRATION AGREEMENT
DEFINITIONS AND USAGE
Usage
The following rules of construction and usage shall be
applicable to any instrument that is governed by this Appendix:
(a) All terms defined in this Appendix shall have the defined
meanings when used in any instrument governed hereby and in any certificate or
other document made or delivered pursuant thereto unless otherwise defined
therein.
(b) As used herein, in any instrument governed hereby and in
any certificate or other document made or delivered pursuant thereto, accounting
terms not defined in this Appendix or in any such instrument, certificate or
other document, and accounting terms partly defined in this Appendix or in any
such instrument, certificate or other document to the extent not defined, shall
have the respective meanings given to them under generally accepted accounting
principles as in effect on the date of such instrument. To the extent that the
definitions of accounting terms in this Appendix or in any such instrument,
certificate or other document are inconsistent with the meanings of such terms
under generally accepted accounting principles, the definitions contained in
this Appendix or in any such instrument, certificate or other document shall
control.
(c) The words "hereof", "herein", "hereunder" and words of
similar import when used in an instrument refer to such instrument as a whole
and not to any particular provision or subdivision thereof; references in an
instrument to "Article", "Section" or another subdivision or to an attachment
are, unless the context otherwise requires, to an article, section or
subdivision of or an attachment to such instrument; and the term "including"
means "including without limitation".
(d) The definitions contained in this Appendix are equally
applicable to both the singular and plural forms of such terms and to the
masculine as well as to the feminine and neuter genders of such terms.
(e) Any agreement, instrument, statute, rule, regulation or
interpretation defined or referred to below or in any agreement or instrument
that is governed by this Appendix means such agreement, instrument, statute,
rule, regulation or
interpretation as from time to time amended, modified or supplemented, including
(in the case of agreements or instruments) by waiver or consent and (in the case
of statutes) by succession of comparable successor statutes and includes (in the
case of agreements or instruments) references to all attachments thereto and
instruments incorporated therein. References to a Person are also to its
permitted successors and assigns.
Definitions
"Act" has the meaning specified in Section 11.03(a) of
the Indenture.
"Additional Fundings" means any withdrawals from the
Pre-Funding Account for any of the purposes set forth in Section 2(f) of the
Administration Agreement.
"Additional Student Loans" means the Serial Loans originated
or acquired by the Seller to a Borrower who has one or more existing loans that
are Financed Student Loans and are transferred or to be transferred to the
Eligible Lender Trustee on behalf of the Issuer pursuant to Section 2.02 of the
Loan Sale Agreement, each of which shall be identified on Schedule A to the
related Transfer Agreement.
"Administration Agreement" means the Administration Agreement
dated as of November 1, 1996, among the Issuer, the Administrator and the
Indenture Trustee.
"Administration Fee" means, with respect to each month, an
amount payable on each Interest Payment Date equal to one-twelfth of the product
of (i) 0.04% and (ii) the sum of the Pool Balance as of the close of business on
the last day of the preceding calendar month.
"Administrator" means Signet, in its capacity as
administrator of the Issuer and the Financed Student Loans.
"Administrator Default" shall have the meaning set forth in
Section 12 of the Administration Agreement.
"Administrator Deposit Condition" means that, with respect to
any Monthly Collection Period, each of the following conditions shall be
satisfied throughout such period: (i) Signet shall continue to be the
Administrator; (ii) no Administrator Default shall have occurred and be
continuing; and (iii) each Rating Agency shall have previously affirmed in
writing that the administering of collections on the Financed Student Loans as
provided in Section 2(i) of the Administration Agreement shall not result in the
withdrawal or downgrading of any of the initial
2
ratings of the Notes or Certificates and no Rating Agency shall have given
written notice to the contrary or if any Rating Agency shall have set forth any
conditions for so administering such collections that are not otherwise provided
for in the Administrator's duties such conditions shall have been added to the
Administrator's duties pursuant to an amendment of the Administration Agreement.
"Administrator's Certificate" means a statement of the
Administrator delivered pursuant to Section 2(g) of the Administration
Agreement, substantially in the form of Exhibit B or C thereto.
"Affiliate" means, with respect to any specified Person, any
other Person controlling or controlled by or under common control with such
specified Person. For the purposes of this definition, "control" when used with
respect to any specified Person means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Authorized Officer" means (i) with respect to the Issuer, any
officer of the Eligible Lender Trustee who is authorized to act for the Eligible
Lender Trustee in matters relating to the Issuer pursuant to the Basic Documents
and who is identified on the list of Authorized Officers delivered by the
Eligible Lender Trustee to the Indenture Trustee on the Closing Date (as such
list may be modified or supplemented from time to time thereafter) and (ii) with
respect to the Seller, the Master Servicer and the Administrator, any officer of
the Seller, the Master Servicer or the Administrator, respectively, who is
authorized to act for the Seller, the Master Servicer or the Administrator,
respectively, in matters relating to itself or to the Issuer and to be acted
upon by the Seller, the Master Servicer or the Administrator, respectively,
pursuant to the Basic Documents and who is identified on the list of Authorized
Officers delivered by the Seller, the Master Servicer and the Administrator,
respectively, to the Indenture Trustee on the Closing Date (as such list may be
modified or supplemented from time to time thereafter).
"Available Funds" means, with respect to a Distribution Date
and the related Collection Period, the sum of the amounts specified in clauses
(i)-(vii) of the definition of Monthly Available Funds for each of the three
Monthly Collection Periods included in such Collection Period; provided,
however, that if with respect to any Distribution Date there would not be
sufficient funds, after application of Available Funds (as defined above) and
amounts available from the Reserve Account, to pay any of the items specified in
clauses (iv)(A) through (iv)(F)
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of Section 2(d) of the Administration Agreement, then Available Funds for such
Distribution Date will include, in addition to the Available Funds (as defined
above), amounts on deposit in the Collection Account on the Determination Date
relating to such Distribution Date which would have constituted Available Funds
for the Distribution Date succeeding such Distribution Date up to the amount
necessary to pay such items, and the Available Funds for such succeeding
Distribution Date will be adjusted accordingly; and provided, further, that
Available Funds will exclude (A) all payments and proceeds (including
Liquidation Proceeds) of any Financed Student Loans the Purchase Amount of which
has been included in Available Funds for a prior Collection Period; (B) except
as expressly included in clause (iv) of the definition of Monthly Available
Funds, amounts released from the Pre-Funding Account; (C) any Monthly Rebate
Fees paid and other amounts required by the Higher Education Act to be paid to
the Department or to be repaid to Borrowers, with respect to the Financed
Student Loans paid during the related Collection Period by or on behalf of the
Trust; (D) after the Funding Period, any expenditure of the Net Principal Cash
Flow Amount used to fund the purchase by the Issuer of Additional Student Loans;
and (E) the Servicing Fee and all overdue Servicing Fees, the Administration Fee
and all overdue Administration Fees, the Noteholders' Interest Distribution
Amount and the Certificateholders' Interest Distribution Amount paid on each
Interest Payment Date that is not a Distribution Date during the related
Collection Period.
"Basic Documents" means the Trust Agreement, the
Indenture, the Loan Sale Agreement, the Master Servicing Agreement, the
Administration Agreement, the Certificate Depository Agreement, the Note
Depository Agreement, the Guarantee Agreements and other documents and
certificates delivered in connection with any thereof.
"Benefit Plan" has the meaning specified in Section
3.04 of the Trust Agreement.
"BIF" means the Bank Insurance Fund, as from time to time
constituted, created under the Financial Institutions Reform, Recovery and
Enhancement Act of 1989, or if at any time after the execution of this
instrument the Bank Insurance Fund is not existing and performing duties now
assigned to it, the body performing such duties on such date.
"Book-Entry Certificate" means a beneficial interest in the
Certificates, ownership and transfers of which shall be made through book
entries by a Clearing Agency as described in Section 3.11 of the Trust
Agreement.
"Book-Entry Note" means a beneficial interest in the
Notes, ownership and transfers of which shall be made through
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book entries by a Clearing Agency as described in Section 2.10 of
the Indenture.
"Borrower" means an individual who is the maker of a Borrower
Note and who obtains a Student Loan from an "eligible lender" in accordance with
the Higher Education Act and the policies and procedures of the Guarantor.
"Borrower Note" means a promissory note of a Borrower for a
Student Loan set forth on the appropriate form furnished by the Guarantor which
Borrower Note meets the criteria set forth by the Higher Education Act and the
policies and procedures of the Guarantor.
"Business Day" means any day other than a Saturday, a Sunday
or a day on which banking institutions or trust companies in the States of
Illinois, New York or Maryland or the Commonwealth of Virginia are authorized or
obligated by law, regulation or executive order to remain closed.
"Business Trust Statute" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code ss. 3801 et seq., as the same may be amended from
time to time.
"Capitalized Interest Amount" means for any Monthly Collection
Period or other period of determination, the amount of interest that accrued on
the Financed Student Loans during such period but was not then payable and that
has been or will, pursuant to the terms of such Financed Student Loans, be
capitalized and added to the principal balances of such loans.
"Certificate" means a certificate evidencing the beneficial
interest of a Certificateholder in the Trust, substantially in the form of
Exhibit A to the Trust Agreement.
"Certificate Balance" equals, initially, the Initial
Certificate Balance and, thereafter, equals the Initial Certificate Balance
reduced by all amounts previously distributed to Certificateholders in respect
of principal pursuant to Sections 2(d)(iv)(F) and 2(e)(iv)(F) of the
Administration Agreement.
"Certificate of Trust" means the Certificate of Trust in the
form of Exhibit C to the Trust Agreement to be filed for the Trust pursuant to
Section 3810(a) of the Business Trust Statute.
"Certificate Depository Agreement" means the agreement dated
as of the Closing Date among the Trust, the Eligible Lender Trustee, the
Administrator, and The Depository Trust Company, as the initial Clearing Agency,
substantially in the form of Exhibit
B to the Trust Agreement.
5
"Certificate Owner" or "Owner" means, with respect to a
Book-Entry Certificate, the Person who is the beneficial owner of such
Book-Entry Certificate, as reflected on the books of the Clearing Agency, or on
the books of a Person maintaining an account with such Clearing Agency (directly
as a Clearing Agency Participant or as an indirect participant, in each case in
accordance with the rules of such Clearing Agency).
"Certificate Paying Agent" means any paying agent or co-paying
agent appointed pursuant to Section 3.09 of the Trust Agreement, which shall
initially be Signet Trust Company.
"Certificate Pool Factor" as computed prior to each
Distribution Date means a seven-digit decimal figure equal to the Certificate
Balance as of such Distribution Date divided by the Initial Certificate Balance.
The Certificate Pool Factor will be 1.0000000 as of the Closing Date;
thereafter, the Certificate Pool Factor will decline to reflect reductions in
the Certificate Balance.
"Certificate Rate" means, with respect to any Interest Period,
the interest rate per annum (computed on the basis of the actual number of days
elapsed in such Interest Period over a year of 360 days) equal to the lesser of
(i) LIBOR for the related LIBOR Reset Period plus 0.45% and (ii) the Student
Loan Rate for such Interest Period.
"Certificate Register" and "Certificate Registrar" means the
register mentioned and the registrar appointed pursuant to Section 3.04 of the
Trust Agreement.
"Certificateholder" or "Holder" means a Person in whose name a
Certificate is registered in the Certificate Register.
"Certificateholders' Distribution Amount" means, with respect
to any Distribution Date, the Certificateholders' Interest Distribution Amount
for such Distribution Date plus, for each Distribution Date on and after which
the Notes have been paid in full, the Certificateholders' Principal Distribution
Amount for such Distribution Date.
"Certificateholders' Interest Carryover Shortfall" means, with
respect to any Interest Payment Date, the excess of (i) the Certificateholders'
Interest Distribution Amount on the preceding Interest Payment Date over (ii)
the amount of interest actually distributed to the Certificateholders on such
preceding Interest Payment Date, plus interest on the amount of such excess, to
the extent permitted by law, at the Certificate Rate from such preceding
Interest Payment Date to the current Interest Payment Date.
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"Certificateholders' Interest Distribution Amount" means, with
respect to any Interest Payment Date, the sum of (i) the amount of interest
accrued at the Certificate Rate for the related Interest Period on the
outstanding Certificate Balance on the immediately preceding Distribution Date,
after giving effect to all distributions of principal to Certificateholders on
such Distribution Date (or, in the case of the first three Interest Payment
Dates and the first Distribution Date, on the Closing Date) and (ii) the
Certificateholders' Interest Carryover Shortfall for such Interest Payment Date;
provided, however, that the Certificateholders' Interest Distribution Amount
will not include any Certificateholders' Interest LIBOR Carryover.
"Certificateholders' Interest LIBOR Carryover" means, with
respect to each Distribution Date, and with respect to each Interest Period, if
any, since the preceding Distribution Date as to which the Certificate Rate for
such Interest Period was based on the Student Loan Rate, the amount equal to the
excess, if any, of (a) the amount of interest on the Certificates that would
have accrued in respect of each related Interest Period had interest been
calculated based on LIBOR over (b) the amount of interest on the Certificates
actually accrued in respect of such Interest Period based on the Student Loan
Rate, together with the unpaid portion of any such excess from prior
Distribution Dates (and interest accrued thereon, to the extent permitted by
law, calculated based on LIBOR); provided, however, that, on the Final Maturity
Date, the Certificateholders' Interest LIBOR Carryover will be equal to the
lesser of (i) the Certificateholders' Interest LIBOR Carryover on such date
determined as described above and (ii) the amount of funds, if any, required and
available to be distributed to Certificateholders on such date pursuant to
Section 2(e)(ii)(C) and 2(e)(iii) of the Administration Agreement.
"Certificateholders' Principal Carryover Shortfall" means, as
of the close of any Distribution Date on or after which the Notes have been paid
in full, the excess of (i) the Certificateholders' Principal Distribution Amount
on such Distribution Date over (ii) the amount of principal actually distributed
to the Certificateholders on such Distribution Date.
"Certificateholders' Principal Distribution Amount" means, on
each Distribution Date on and after which the principal balance of the Notes has
been paid in full, the sum of (a) the Principal Distribution Amount for such
Distribution Date (or, in the case of the Distribution Date on which the
principal balance of the Notes is paid in full, any remaining Principal
Distribution Amount not otherwise distributed to Noteholders on such
Distribution Date) and (b) the Certificateholders' Principal Carryover Shortfall
as of the close of the preceding Distribution Date; provided, however, that the
Certificateholders' Principal
7
Distribution Amount will in no event exceed the Certificate Balance. In
addition, on the Final Maturity Date, the principal required to be distributed
to the Certificateholders will include the amount required to reduce the
outstanding principal balance of the Certificates to zero.
"Class A-1 Final Maturity Date" means the January 2005
Distribution Date.
"Class A-1 Note" means a Floating Rate Class A-1 Asset Backed
Note issued pursuant to the Indenture, substantially in the form of Exhibit A
thereto.
"Class A-1 Note Pool Factor" as computed prior to each
Distribution Date means a seven-digit decimal figure equal to the outstanding
principal balance of the Class A-1 Notes as of such Distribution Date divided by
the original outstanding principal balance of the Class A-1 Notes. The Class A-1
Note Pool Factor will be 1.0000000 as of the Closing Date; thereafter, the Class
A-1 Note Pool Factor will decline to reflect reductions in the outstanding
principal balance of the Class A-1 Notes.
"Class A-1 Noteholder" means the Person in whose name a Class
A-1 Note is registered in the Note Register.
"Class A-1 Rate" means, with respect to any Interest Period,
the interest rate per annum (computed on the basis of the actual number of days
in such Interest Period over a year of 360 days) equal to the lesser of (i)
LIBOR for the related LIBOR Reset Period plus 0.09% and (ii) the Student Loan
Rate for such Interest Period.
"Class A-2 Final Maturity Date" means the April 2016
Distribution Date.
"Class A-2 Note" means a Floating Rate Class A-2 Asset Backed
Note issued pursuant to the Indenture, substantially in the form of Exhibit B
thereto.
"Class A-2 Note Pool Factor" as computed prior to each
Distribution Date means a seven-digit decimal figure equal to the outstanding
principal balance of the Class A-2 Notes as of such Distribution Date divided by
the original outstanding principal balance of the Class A-2 Notes. The Class A-2
Note Pool Factor will be 1.0000000 as of the Closing Date; thereafter the Class
A-2 Note Pool Factor will decline to reflect reductions in the outstanding
principal balance of the Class A-2 Notes.
"Class A-2 Noteholder" means the Person in whose name a Class
A-2 Note is registered in the Note Register.
8
"Class A-2 Rate" means, with respect to any Interest Period,
the interest rate per annum (computed on the basis of the actual number of days
in such Interest Period over a year of 360 days) equal to the lesser of (i)
LIBOR for the related LIBOR Reset Period plus 0.15% and (ii) the Student Loan
Rate for such Interest Period.
"Clearing Agency" means an organization registered as a
"clearing agency" pursuant to Section 17A of the Exchange Act.
"Clearing Agency Participant" means a broker, dealer, bank,
other financial institution or other Person for whom from time to time a
Clearing Agency effects book-entry transfers and pledges of securities deposited
with the Clearing Agency.
"Closing Date" means December 27, 1996.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, and Treasury Regulations promulgated thereunder.
"Collateral" has the meaning specified in the Granting Clause
of the Indenture.
"Collection Account" means the account designated as such,
established and maintained pursuant to Section 2(c) of the Administration
Agreement.
"Collection Period" means, with respect to the first
Distribution Date, the period beginning on the Cutoff Date and ending on March
31, 1997, and with respect to each subsequent Distribution Date, the Collection
Period means the three calendar months immediately following the end of the
previous Collection Period.
"Commission" means the Securities and Exchange Commission.
"Company" means Signet Student Loan Corporation, a Virginia
corporation.
"Confidential Information" means information provided by
Signet to the Eligible Lender Trustee or the Indenture Trustee related to the
transactions effected under the Basic Documents and any computer software
provided to the Eligible Lender Trustee or the Indenture Trustee in connection
with the transactions effected under the Basic Documents, in each case whether
in the form of documents, reports, lists, tapes, discs or any other form.
"Consolidation Loan" means a Student Loan made pursuant to the
Higher Education Act to consolidate the Borrower's
9
obligations under various federally authorized student loan programs into a
single loan.
"Corporate Trust Office" means (i) with respect to the
Indenture Trustee, the principal office of the Indenture Trustee at which at any
particular time its corporate trust business shall be administered, which office
at the Closing Date is located at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Asset Backed Finance Unit (telephone: (212) 000- 0000; facsimile:
(000) 000-0000); or at such other address as the Indenture Trustee may designate
from time to time by notice to the Noteholders and the Seller, or the principal
corporate trust office of any successor Indenture Trustee (the address of which
the successor Indenture Trustee will notify the Noteholders and the Seller) and
(ii) with respect to the Eligible Lender Trustee, the principal corporate trust
office of the Eligible Lender Trustee located at Xxx Xxxxx Xxxxxxxx Xxxxx, Xxxxx
0000, Xxxxxxx, Xxxxxxxx 00000-0000, Attention: Corporate Trust Administration
(telephone: (000) 000-0000; facsimile: (000) 000-0000); or at such other address
as the Eligible Lender Trustee may designate by notice to the Certificateholders
and the Seller, or the principal corporate trust office of any successor
Eligible Lender Trustee (the address of which the successor Eligible Lender
Trustee will notify the Certificateholders and the Seller).
"Custodian" means Signet, in its capacity as custodian of the
Borrower Notes or any permitted successor Custodian.
"Cutoff Date" means November 1, 1996.
"Default" means any occurrence that is, or with notice or the
lapse of time or both would become, an Event of Default.
"Deferral" means the period defined by the Higher Education
Act and the policies of the Guarantor during which a Borrower (in Repayment) is
entitled to postpone making payments upon the submission of appropriate
documentation.
"Deferral Loan" means a Student Loan during a period of
Deferral.
"Definitive Certificates" has the meaning specified in
Section 3.11 of the Trust Agreement.
"Definitive Notes" has the meaning specified in Section
2.10 of the Indenture.
"Delaware Trustee" has the meaning set forth in Section
10.01 of the Trust Agreement.
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"Delivery" when used with respect to Trust Account Property
means:
(a) with respect to bankers' acceptances, commercial paper,
negotiable certificates of deposit and other obligations that
constitute "instruments" within the meaning of Section 9-105(1)(i) of
the UCC and are susceptible of physical delivery, transfer thereof to
the Indenture Trustee or its nominee or custodian by physical delivery
to the Indenture Trustee or its nominee or custodian endorsed to, or
registered in the name of, the Indenture Trustee or its nominee or
custodian or endorsed in blank, and, with respect to a certificated
security (as defined in Section 8-102 of the UCC) transfer thereof (i)
by delivery of such certificated security endorsed to, or registered in
the name of, the Indenture Trustee or its nominee or custodian or
endorsed in blank to a financial intermediary (as defined in Section
8-313) of the UCC) and the making by such financial intermediary of
entries on its books and records identifying such certificated
securities as belonging to the Indenture Trustee or its nominee or
custodian and the sending by such financial intermediary of a
confirmation of the purchase of such certificated security by the
Indenture Trustee or its nominee or custodian, or (ii) by delivery
thereof to a "clearing corporation" (as defined in Section 8-102(3) of
the UCC) and the making by such clearing corporation of appropriate
entries on its books reducing the appropriate securities account of the
transferor and increasing the appropriate securities account of a
financial intermediary by the amount of such certificated security, the
identification by the clearing corporation of the certificated
securities for the sole and exclusive account of the financial
intermediary, the maintenance of such certificated securities by such
clearing corporation or a "custodian bank" (as defined in Section
8-102(4) of the UCC) or the nominee of either subject to the clearing
corporation's exclusive control, the sending of a confirmation by the
financial intermediary of the purchase by the Indenture Trustee or its
nominee or custodian of such securities and the making by such
financial intermediary of entries on its books and records identifying
such certificated securities as belonging to the Indenture Trustee or
its nominee or custodian (all of the foregoing, "Physical Property"),
and, in any event, any such Physical Property in registered form shall
be in the name of the Indenture Trustee or its nominee or custodian;
and such additional or alternative procedures as may hereafter become
appropriate to effect the complete transfer of ownership of any such
Trust Account Property to the Indenture Trustee or its nominee or
custodian, consistent with changes in applicable law or regulations or
the interpretation thereof;
11
(b) with respect to any securities issued by the U.S.
Treasury, the Federal Home Loan Mortgage Corporation or by the Federal
National Mortgage Association that is a book-entry security held
through the Federal Reserve System pursuant to Federal book-entry
regulations, the following procedures, all in accordance with
applicable law, including applicable Federal regulations and Articles 8
and 9 of the UCC: book-entry registration of such Trust Account
Property to an appropriate book-entry account maintained with a Federal
Reserve Bank by a financial intermediary which is also a "depository"
pursuant to applicable Federal regulations and issuance by such
financial intermediary of a deposit advice or other written
confirmation of such book-entry registration to the Indenture Trustee
or its nominee or custodian of the purchase by the Indenture Trustee or
its nominee or custodian of such book-entry securities; the making by
such financial intermediary of entries in its books and records
identifying such book-entry security held through the Federal Reserve
System pursuant to Federal book-entry regulations as belonging to the
Indenture Trustee or its nominee or custodian and indicating that such
custodian holds such Trust Account Property solely as agent for the
Indenture Trustee or its nominee or custodian; and such additional or
alternative procedures as may hereafter become appropriate to effect
complete transfer of ownership of any such Trust Account Property to
the Indenture Trustee or its nominee or custodian, consistent with
changes in applicable law or regulations or the interpretation thereof;
and
(c) with respect to any item of Trust Account Property that is
an uncertificated security under Article 8 of the UCC and that is not
governed by clause (b) above, registration on the books and records of
the issuer thereof in the name of the financial intermediary, the
sending of a confirmation by the financial intermediary of the purchase
by the Indenture Trustee or its nominee or custodian of such
uncertificated security, the making by such financial intermediary of
entries on its books and records identifying such uncertificated
certificates as belonging to the Indenture Trustee or its nominee or
custodian.
"Demand Note" means the Demand Note dated December 27, 1996
from Signet Banking Corporation to the Company.
"Department" means the United States Department of Education,
an agency of the Federal government.
"Depositor" means the Seller in its capacity as Depositor
under the Trust Agreement.
12
"Depository Agreement" means, collectively, the agreements
with respect to the Notes attached to the Indenture as Exhibits C and D and the
agreement with respect to the Certificates attached to the Trust Agreement as
Exhibit B.
"Determination Date" means, with respect to any Interest
Payment Date or Distribution Date, the third Business Day preceding such
Interest Payment Date or Distribution Date.
"Distribution Date" means, with respect to each Collection
Period, the twenty-fifth day of each January, April, July, and October, or, if
such day is not a Business Day, the immediately following Business Day,
commencing on April 25, 1997.
"Educational Institution" means any institution of higher
education that participates in the guaranteed loan programs authorized by Title
IV of the Higher Education Act and which is deemed eligible by the Guarantor to
participate in Guarantor's program.
"Eligible Deposit Account" means an account that is: (i) a
separately identifiable deposit account established and maintained in the
deposit taking department of a depository institution organized under the laws
of the United States of America or one of the states thereof or incorporated
under the laws of a foreign jurisdiction with a branch or agency located in the
United States of America or one of the states thereof and subject to supervision
and examination by Federal or state banking authorities that at all times has a
short-term certificate of deposit rating of "P-1" by Moody's, "A-1+" by Standard
& Poor's and (if rated by Fitch) "F-1+" by Fitch and a long-term unsecured debt
rating of not less than "AA" by Standard & Poor's, "Aa3" by Moody's and (if
rated by Fitch) "AA" by Fitch and, in the case of any such institution organized
under the laws of the United States of America, whose deposits are insured by
the BIF, (ii) a segregated identifiable trust account established and maintained
in the trust department of a trust institution organized under the laws of the
United States of America or one of the states thereof or incorporated under the
laws of a foreign jurisdiction with a branch or agency located in the United
States of America or one of the states thereof and subject to supervision and
examination by Federal or state banking authorities that at all times is
authorized under such laws to act as a trustee or in any other fiduciary
capacity, has not less than $50,000,000 capital and surplus and has a long-term
deposit rating of not less than "BBB-" by Standard & Poor's, "Baa3" by Moody's
and (if rated by Fitch) "BBB" by Fitch, (iii) so long as Signet Bank or an
affiliate of Signet Bank is Master Servicer and Signet Bank or such affiliate
has a long-term deposit rating or long-term unsecured debt rating, as
applicable, of at least "Baa3" by Moody's, a segregated identifiable trust
account established and maintained at Signet Trust Company or (iv) an
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account otherwise acceptable to each Rating Agency, as evidenced by a letter
from each Rating Agency to the Indenture Trustee and the Eligible Lender
Trustee, without reduction or withdrawal of the then current ratings of the
Notes or the Certificates.
"Eligible Investments" means one or more of the following
(excluding any callable investments purchased at a premium):
(i) direct obligations of, or obligations fully guaranteed as
to timely payment of principal and interest by, the United States of
America or any agency or instrumentality thereof; provided that such
obligations are backed by the full faith and credit of the United
States of America;
(ii) repurchase agreements on obligations specified in clause
(i) maturing not more than three months from the date of acquisition
thereof; provided that the short-term unsecured debt obligations of the
party agreeing to repurchase such obligations are at the time rated at
least "A-1" by Standard & Poor's, "P-1" by Moody's and (if rated by
Fitch) "F-1+" by Fitch;
(iii) certificates of deposit, time deposits and bankers'
acceptances of any United States depository institution or trust
company incorporated under the laws of the United States or any state
thereof and subject to supervision and examination by Federal and/or
state banking authorities; provided that the unsecured short-term debt
obligations of such depository institution or trust company at the date
of acquisition thereof have been rated at least "A-1" by Standard &
Poor's, "P-1" by Moody's and (if rated by Fitch) "F-1+" by Fitch;
(iv) commercial paper (having original maturities of not more
than 270 days) of any corporation incorporated under the laws of the
United States of America or any state thereof which on the date of
acquisition has been rated at least "A-1" by Standard & Poor's, "P-1"
by Moody's and (if rated by Fitch) "F-1+" by Fitch;
(v) interests in any money market fund which at the date of
acquisition of the interests in such fund and throughout the time such
interests are held in such fund has a rating of "P-1" or "Aaa" by
Moody's, "AAAm" or "AAAm-G" by Standard & Poor's and (if rated by
Fitch) "F-1+" or "AAA" by Fitch or such lower rating as will not result
in the qualification, downgrading or withdrawal of the then-current
rating assigned to the Notes and the Certificates by each Rating
Agency; and
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(vi) other obligations or securities that are acceptable to
each Rating Agency as an Eligible Investment hereunder and will not
result in a reduction in the then-current rating of the Notes and the
Certificates, as evidenced by a letter to such effect from such Rating
Agency, and with respect to which the Administrator has received
confirmation that, for tax purposes, the investment complies with the
provisos to this definition.
"Eligible Lender Trustee" means The First National Bank of
Chicago, a national banking association, not in its individual capacity but
solely as Eligible Lender Trustee under the Trust Agreement.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended.
"Event of Default" has the meaning specified in Section
5.01 of the Indenture.
"Exchange Act" means the Securities Exchange Act of
1934, as amended.
"Executive Officer" means, with respect to any corporation,
the Chief Executive Officer, Chief Operating Officer, Chief Financial Officer,
President, any Executive Vice President, any Senior Vice President, any Vice
President, the Secretary or the Treasurer of such corporation; and with respect
to any partnership, any general partner thereof.
"Expected Interest Collections" means, with respect to any
Interest Period, the sum of (i) the amount of interest accrued, net of accrued
Monthly Rebate Fees with respect to the Financed Student Loans and other amounts
required by the Higher Education Act to be paid to the Department or repaid to
Borrowers for the related Student Loan Rate Accrual Period (whether or not such
interest is actually paid and not taking into account any late fees payable or
paid thereon by the Borrowers), (ii) all Interest Subsidy Payments and Special
Allowance Payments estimated to have accrued for such Student Loan Rate Accrual
Period, whether or not actually received and (iii) Investment Earnings for such
Student Loan Rate Accrual Period.
"Expenses" means any and all liabilities, obligations, losses,
damages, taxes, claims, actions and suits, and any and all reasonable costs,
expenses and disbursements (including reasonable legal fees and expenses) of any
kind and nature whatsoever which may at any time be imposed on, incurred by, or
asserted against the Eligible Lender Trustee or any of its officers, directors
or agents in any way relating to or arising out of the Trust Agreement, the
other Basic Documents, the Trust
15
Estate, the administration of the Trust Estate or the action or inaction of the
Eligible Lender Trustee under the Trust Agreement or the other Basic Documents.
"Final Maturity Date" means the July 2017 Distribution Date.
"Financed Student Loans" means those Student Loans that, as of
any date of determination, have been conveyed to the Issuer, consisting of the
Initial Financed Student Loans as of the Closing Date and, thereafter, any
Additional Student Loans conveyed to the Issuer from the Seller.
"Fitch" means Fitch Investors Service, L.P. or any
successor thereto.
"Forbearance" means the period of forbearance of loan
collections on a Student Loan pursuant to the Higher Education Act.
"Forbearance Loan" means a Student Loan during a period
of Forbearance.
"Funding Period" means the period from the Closing Date until
the first to occur of (i) the Distribution Date on which the amount on deposit
in the Pre-Funding Account is less than $100,000, (ii) an Event of Default
occurring under the Indenture, a Servicer Default occurring under the Master
Servicing Agreement or an Administrator Default occurring under the
Administration Agreement, (iii) the date on which an Insolvency Event occurs
with respect to the Seller or (iv) the last day of the Collection Period
preceding the January 1999 Distribution Date.
"Grace" means the initial period following reduction by the
student Borrower to less than the minimum course load required by the Higher
Education Act, during which the student Borrower is not required to make
payments on the principal amount of the Borrower Note(s).
"Grace Loan" means a Student Loan during a period of Grace.
"Grant" means mortgage, pledge, bargain, sell, warrant,
alienate, remise, release, convey, assign, transfer, create, and xxxxx x xxxx
upon and a security interest in and right of set-off against, deposit, set over
and confirm pursuant to the Indenture. A Grant of the Collateral or of any other
agreement or instrument shall include all rights, powers and options (but none
of the obligations) of the Granting party thereunder, including the immediate
and continuing right to claim for, collect, receive and give receipt for
principal and interest payments in respect of the Collateral and all other
moneys payable thereunder, to give
16
and receive notices and other communications, to make waivers or other
agreements, to exercise all rights and options, to bring Proceedings in the name
of the Granting party or otherwise and generally to do and receive anything that
the Granting party is or may be entitled to do or receive thereunder or with
respect thereto.
"Guarantee Agreement" means each agreement to guarantee
Student Loans entered into by the Eligible Lender Trustee on behalf of the Trust
with a Guarantor.
"Guarantee Payment" means any payment made by a Guarantor
pursuant to a Guarantee Agreement in respect of a Student Loan.
"Guarantor" means Texas Guaranteed Student Loan
Corporation, United Student Aid Funds or Educational Credit
Management Corporation.
"Higher Education Act" means the Higher Education Act of 1965,
as amended, together with any rules, regulations and interpretations thereunder.
"In-School Loan" means a Student Loan during the period,
excluding periods of in-school Deferral, during which a student Borrower is
enrolled at an Educational Institution for at least the minimum course load
required to maintain such student Borrower's eligibility to borrow under the
education loan programs administered by a Guarantor.
"Incentive Deposit" means, with respect to each Collection
Period and each Incentive Financed Student Loan, (i) the amount of any principal
reduction with respect to such Incentive Financed Student Loan pursuant to an
Incentive Program during such Collection Period (regardless of whether such
principal amounts would have otherwise been payable on such loan during such
Collection Period) plus (ii) the excess, if any, of (x) the amount of interest
or other amounts which would have been payable with respect to such Incentive
Financed Student Loan during such Collection Period had no Incentive Program
been in effect with respect to such Incentive Financed Student Loan (other than
amounts in respect of principal on an Incentive Financed Student Loan for which
an Incentive Deposit is then or has previously been made pursuant to clause (i)
above) over (y) the amount of interest and other amounts which are payable with
respect to such Incentive Financed Student Loan during such Collection Period
after giving effect to such Incentive Program.
"Incentive Financed Student Loan" means a Financed
Student Loan which is subject to an Incentive Program.
17
"Incentive Program" means any one or more programs
administered from time to time by the Master Servicer for Student Loans held by
it in its own portfolio pursuant to which the Master Servicer may choose to
reduce the interest rate or offer to a Borrower any other benefit not prohibited
by the Higher Education Act or other applicable law on a Student Loan.
"Indenture" means the Indenture dated as of November 1, 1996,
between the Issuer and the Indenture Trustee.
"Indenture Trust Estate" means all money, instruments, rights
and other property that are subject or intended to be subject to the lien and
security interest of the Indenture for the benefit of the Noteholders (including
all property and interests Granted to the Indenture Trustee), including all
proceeds thereof.
"Indenture Trustee" means The Bank of New York, a New York
banking corporation, not in its individual capacity but solely as Indenture
Trustee under the Indenture.
"Independent" means, when used with respect to any specified
Person, that the Person (a) is in fact independent of the Issuer, any other
obligor upon the Notes, the Seller and any Affiliate of any of the foregoing
Persons, (b) does not have any direct financial interest or any material
indirect financial interest in the Issuer, any such other obligor, the Seller or
any Affiliate of any of the foregoing Persons and (c) is not connected with the
Issuer, any such other obligor, the Seller or any Affiliate of any of the
foregoing Persons as an officer, employee, promoter, underwriter, trustee,
partner, director or person performing similar functions.
"Independent Certificate" means a certificate or opinion to be
delivered to the Indenture Trustee under the circumstances described in, and
otherwise complying with, the applicable requirements of Section 11.01 of the
Indenture, made by an Independent appraiser or other expert appointed by an
Issuer Order and approved by the Indenture Trustee in the exercise of reasonable
care, and such opinion or certificate shall state that the signer has read the
definition of "Independent" in the Indenture and that the signer is Independent
within the meaning thereof.
"Initial Certificate Balance" means $14,996,000.
"Initial Financed Student Loans" means those Financed Student
Loans conveyed to the Issuer on the Closing Date.
"Initial Pre-Funded Amount" means $16,552,201.22.
"Initial Pool Balance" means $404,590,798.78.
18
"Insolvency Event" means, with respect to a specified Person,
(a) the filing of a decree or order for relief by a court having jurisdiction in
the premises in respect of such Person or any substantial part of its property
in an involuntary case under any applicable Federal or state bankruptcy,
insolvency or other similar law now or hereafter in effect, or appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official for such Person or for any substantial part of its property, or
ordering the winding-up or liquidation of such Person's affairs, and such decree
or order shall remain unstayed and in effect for a period of sixty consecutive
days; or (b) the commencement by such Person of a voluntary case under any
applicable Federal or state bankruptcy, insolvency or other similar law now or
hereafter in effect, or the consent by such Person to the entry of an order for
relief in an involuntary case under any such law, or the consent by such Person
to the appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official for such Person or for any
substantial part of its property, or the making by such Person of any general
assignment for the benefit of creditors, or the failure by such Person generally
to pay its debts as such debts become due, or the taking of action by such
Person in furtherance of any of the foregoing.
"Interest Payment Date" means the twenty-fifth day of each
month (or, if any such date is not a Business Day, on the next succeeding
Business Day) commencing January 27, 1997.
"Interest Period" means, with respect to an Interest Payment
Date, the period from and including the Closing Date or the most recent Interest
Payment Date on which interest on the Notes or the Certificates, as the case may
be, has been distributed to but excluding the current Interest Payment Date.
"Interest Subsidy Payments" means payments, designated as
such, consisting of interest subsidies by the Department in respect of the
Financed Student Loans to the Eligible Lender Trustee on behalf of the Trust in
accordance with the Higher Education Act.
"Investment Earnings" means, with respect to any Distribution
Date, the investment earnings (net of losses and investment expenses) on amounts
on deposit in the Trust Accounts to be deposited into the Collection Account on
or prior to such Distribution Date pursuant to Section 2(c)(v) of the
Administration Agreement.
"Issuer" means Signet Student Loan Trust 1996-A until a
successor replaces it and, thereafter, means the successor and, for purposes of
any provision contained in the Indenture and required by the TIA, each other
obligor on the Notes.
19
"Issuer Order" and "Issuer Request" means a written order or
request signed in the name of the Issuer by any one of its Authorized Officers
and delivered to the Indenture Trustee.
"LIBOR" means, with respect to any LIBOR Reset Period, the
London interbank offered rate for deposits in U.S. dollars having a maturity of
one month commencing on the related LIBOR Determination Date (the "Index
Maturity") which appears on Telerate Page 3750 as of 11:00 a.m., London time, on
such LIBOR Determination Date. If such rate does not appear on Telerate Page
3750, the rate for that day will be determined on the basis of the rates at
which deposits in U.S. dollars, having the Index Maturity and in a principal
amount of not less than U.S. $1,000,000, are offered at approximately 11:00
a.m., London time, on such LIBOR Determination Date to prime banks in the London
interbank market by the Reference Banks. The Administrator will request the
principal London office of each of such Reference Banks to provide a quotation
of its rate. If at least two such quotations are provided, the rate for that day
will be the arithmetic mean of the quotations. If fewer than two quotations are
provided, the rate for that day will be the arithmetic mean of the rates quoted
by major banks in New York City, selected by the Administrator, at approximately
11:00 a.m., New York City time, on such LIBOR Determination Date for loans in
U.S. dollars to leading European banks having the Index Maturity and in a
principal amount equal to an amount of not less than U.S. $1,000,000; provided
that if the banks selected as aforesaid are not quoting as mentioned in this
sentence, LIBOR in effect for the applicable LIBOR Reset Period will be LIBOR in
effect for the previous LIBOR Reset Period.
"LIBOR Determination Date" means, with respect to any LIBOR
Reset Period, the day that is the second business day prior to the commencement
of such LIBOR Reset Period. For purposes of this definition, a business day is
any day in which banks in London and New York City are open for the transaction
of international business.
"LIBOR Reset Period" means the one-month period commencing on
the twenty-fifth day (or, if any such date is not a Business Day, on the next
succeeding business day) of each month and ending on the day immediately
preceding the following LIBOR Reset Period; provided, however, that the initial
LIBOR Reset Period will commence on the Closing Date.
"Lien" means a security interest, lien, charge, pledge, equity
or encumbrance of any kind, other than tax liens and any other liens, if any,
which attach to the respective Student Loan by operation of law as a result of
any act or omission by the related Obligor.
20
"Liquidated Student Loan" means any defaulted Financed Student
Loan liquidated by the Master Servicer or any Subservicer or which the Master
Servicer has, after using all reasonable efforts to realize upon the such
Student Loan, determined to charge off.
"Liquidation Proceeds" means, with respect to any Liquidated
Student Loan, the moneys collected in respect thereof from whatever source,
other than Recoveries, net of the sum of any amounts expended by the Master
Servicer or any Subservicer in connection with such liquidation and any amounts
required by law to be remitted to the Obligor on such Liquidated Student Loan.
"Loan Sale Agreement" means the Loan Sale Agreement dated as
of November 1, 1996, among the Issuer, the Seller, and the Eligible Lender
Trustee.
"London Banking Day" means any Business Day on which dealings
in deposits in United States dollars are transacted in the London interbank
market.
"Master Servicer" means Signet, in its capacity as master
servicer of the Financed Student Loans or any permitted Successor Master
Servicer.
"Master Servicing Agreement" means the Master Servicing
Agreement dated as of November 1, 1996, among the Issuer, the Master Servicer
and the Eligible Lender Trustee.
"Minimum Purchase Price" means as to any Distribution Date, an
amount equal to the greater of (i) the Purchase Amounts of the Financed Student
Loans as of the end of the Collection Period immediately preceding such
Distribution Date or (ii) an amount that would be sufficient to (A) reduce the
outstanding principal amount of each class of Notes then outstanding on such
Distribution Date to zero, (B) pay to the Noteholders the Noteholders' Interest
Distribution Amount payable on such Distribution Date, if any, (C) reduce the
Certificate Balance of the Certificates on such Distribution Date to zero, (D)
pay to the Certificateholders the Certificateholders' Interest Distribution
Amount payable on such Distribution Date, (E) pay to the Noteholders the then
outstanding Noteholders' Interest LIBOR Carryover, if any, and (F) pay to the
Certificateholders the then outstanding Certificateholders' Interest LIBOR
Carryover, if any.
"Monthly Available Funds" means, with respect to each Interest
Payment Date that is not a Distribution Date, the sum of the following amounts
with respect to the related Monthly Collection Period: (i) all collections
received by the Master Servicer, or any Subservicer, on the Financed Student
Loans (including any Guarantee Payments received with respect to the Financed
Student Loans); (ii) any Interest Subsidy Payments and
21
Special Allowance Payments received by the Eligible Lender Trustee during such
Monthly Collection Period with respect to the Financed Student Loans; (iii) all
Liquidation Proceeds from any Financed Student Loans which became Liquidated
Student Loans during such Monthly Collection Period in accordance with the
Master Servicer's customary servicing procedures, and all Recoveries in respect
of Liquidated Student Loans which were written off in prior Monthly Collection
Periods; (iv) that portion of the amounts released from the Pre-Funding Account
with respect to Additional Fundings relating to those interest costs on the
Financed Student Loans which are or will be capitalized; (v) the aggregate
Purchase Amounts received for those Financed Student Loans repurchased by the
Seller or purchased by the Master Servicer under an obligation which arose
during the related Monthly Collection Period; (vi) Investment Earnings for such
Interest Payment Date; (vii) any Incentive Deposits made by the Seller; and
(viii) with respect to each Interest Payment Date other than a Distribution Date
and other than an Interest Payment Date immediately succeeding a Distribution
Date, Monthly Available Funds remaining from the Monthly Collection Period
relating to the preceding Interest Payment Date, after giving effect to the
application of such Monthly Available Funds on such preceding Interest Payment
Date; provided, however, that if with respect to any Interest Payment Date there
would not be sufficient funds, after application of Monthly Available Funds (as
defined above) and amounts available from the Reserve Account, to pay any of the
items specified in Section 2(d)(iii) of the Administration Agreement, then
Monthly Available Funds for such Interest Payment Date will include, in addition
to the Monthly Available Funds (as defined above), amounts on deposit in the
Collection Account on the Determination Date relating to such Interest Payment
Date which would have constituted Monthly Available Funds for the Interest
Payment Date succeeding such Interest Payment Date up to the amount necessary to
pay such items, and the Monthly Available Funds for such succeeding Interest
Payment Date will be adjusted accordingly; and provided, further, that Monthly
Available Funds will exclude (A) all payments and proceeds (including
Liquidation Proceeds) of any Financed Student Loans the Purchase Amount of which
has been included in Monthly Available Funds for a prior Monthly Collection
Period, (B) except as expressly included in clause (iv) above, amounts released
from the Pre-Funding Account, (C) any Monthly Rebate Fees paid during the
related Monthly Collection period by or on behalf of the Trust and (D) after the
Funding Period, any expenditure of the Net Principal Cash Flow Amount used to
fund the purchase by the Issuer of any Additional Student Loans during such
Monthly Collection Period.
"Monthly Collection Period" means, with respect to any
Interest Payment Date that is not a Distribution Date, the calendar month
immediately preceding the month of such Interest
22
Payment Date (or, with respect to the first Monthly Collection Period, the
period beginning on the Cutoff Date and ending on December 31, 1996).
"Monthly Rebate Fee" means, for each calendar month and with
respect to each Consolidation Loan, the fee payable to the Department equal to
the product of (x) one-twelfth, (y) 1.05% and (z) the outstanding principal
balance of such Consolidation Loan plus accrued interest on such Consolidation
Loan as of the last day of such month.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Net Principal Cash Flow Amount" means, as of any date, the
Principal Cash Flow Amount (calculated for the Collection Period ending in the
preceding calendar month or, if no Collection Period ended in the preceding
calendar month, calculated for each preceding calendar month during the current
Collection Period) minus, after the Funding Period, (i) the Capitalized Interest
Amount for such Collection Period or for each such preceding calendar month, as
the case may be and (ii) the portion of the Principal Cash Flow Amount, if any,
that is estimated by the Administrator to be necessary for Monthly Available
Funds or Available Funds to be sufficient on the next succeeding Interest
Payment Date or Distribution Date, respectively, to pay full amount due pursuant
to clauses (A) through (D) of Section 2(d)(iii) or clauses (A) through (D) of
Section 2(d)(iv), as applicable, of the Administration Agreement.
"Non-Code Entity" means a savings and loan association, a
national banking association, a bank or other entity that is not subject to
Title 11 of the United States Code.
"Note" means a Class A-1 Note or a Class A-2 Note.
"Note Depository Agreements" means the agreement dated as of
the Closing Date relating to the Class A-1 Notes, substantially in the form of
Exhibit C to the Indenture, and the agreement dated as of the Closing Date
relating to the Class A-2 Notes, substantially in the form of Exhibit D to the
Indenture, in each case among the Issuer, the Indenture Trustee, the
Administrator and The Depository Trust Company, as the initial Clearing Agency.
"Note Interest Rate" means the Class A-1 Rate with respect to
the Class A-1 Notes and the Class A-2 Rate with respect to the Class A-2 Notes.
"Note Owner" means, with respect to a Book-Entry Note, the
Person who is the owner of such Book-Entry Note, as reflected on the books of
the Clearing Agency, or on the books of a Person maintaining an account with
such Clearing Agency (directly as a
23
Clearing Agency Participant or as an indirect participant, in each case in
accordance with the rules of such Clearing Agency).
"Note Register" and "Note Registrar" have the respective
meanings specified in Section 2.04 of the Indenture.
"Noteholder" means a Class A-1 Noteholder or a Class
A-2 Noteholder.
"Noteholders' Distribution Amount" means, with respect
to any Distribution Date, the sum of the Noteholders' Interest
Distribution Amount and the Noteholders' Principal Distribution
Amount for such Distribution Date.
"Noteholders' Interest Carryover Shortfall" means, with
respect to any Interest Payment Date, the excess of (i) the Noteholders'
Interest Distribution Amount on the preceding Interest Payment Date over (ii)
the amount of interest actually distributed to the Noteholders on such preceding
Interest Payment Date, plus interest on the amount of such excess, to the extent
permitted by law, at the weighted average interest rate borne by the Class A-1
Notes and the Class A-2 Notes from such preceding Interest Payment Date to the
current Interest Payment Date.
"Noteholders' Interest Distribution Amount" means, with
respect to any Interest Payment Date, the sum of (i) the amount of interest
accrued at the respective Note Interest Rate for the related Interest Period on
the outstanding principal balance of each class of Notes on the immediately
preceding Distribution Date after giving effect to all principal distributions
to holders of Notes of such class on such date (or, in the case of the first
three Interest Payment Dates and the first Distribution Date, on the Closing
Date) and (ii) the Noteholders' Interest Carryover Shortfall for such Interest
Payment Date; provided, however, that the Noteholders' Interest Distribution
Amount will not include any Noteholders' Interest LIBOR Carryover.
"Noteholders' Interest LIBOR Carryover" means, with respect to
each Distribution Date, and with respect to each Interest Period, if any, since
the preceding Distribution Date as to which the Class A-1 Rate or the Class A-2
Rate for such Interest Period was based on the Student Loan Rate, the amount
equal to the excess, if any, of (a) the amount of interest on the Class A-1
Notes or the Class A-2 Notes, as the case may be, that would have accrued in
respect of each related Interest Period had interest been calculated based on
LIBOR over (b) the amount of interest on the Class A-1 Notes or the Class A-2
Notes, as the case may be, actually accrued in respect of such Interest Period
based on the Student Loan Rate, together with the unpaid portion of any such
excess from prior dates (and interest accrued thereon, to the extent permitted
by law, at the applicable rate calculated based on LIBOR); provided, however,
that, (1) on the
24
Class A-1 Final Maturity Date, the portion of the Noteholders' Interest LIBOR
Carryover allocable to the Class A-1 Notes will be equal to the lesser of (i)
the portion allocable to the Class A-1 Notes of the Noteholders' Interest LIBOR
Carryover on such date determined as described above and (ii) the amount of
funds, if any, required and available to be distributed to Class A-1 Noteholders
on such date pursuant to Sections 2(e)(ii)(B) and 2(e)(iii) of the
Administration Agreement and (2) on the Class X- 0 Final Maturity Date, the
Noteholders' Interest LIBOR Carryover will be equal to the lesser of (i) the
Noteholders' Interest LIBOR Carryover on such date determined as described above
and (ii) the amount of funds, if any, required and available to be distributed
to Class A-2 Noteholders on such date pursuant to Sections 2(e)(ii)(B) and
2(e)(iii) of the Administration Agreement.
"Noteholders' Principal Carryover Shortfall" means, as of the
close of business on any Distribution Date, the excess of (i) the Noteholders'
Principal Distribution Amount on such Distribution Date over (ii) the amount of
principal actually distributed to the Noteholders on such Distribution Date.
"Noteholders' Principal Distribution Amount" means, with
respect to any Distribution Date, the Principal Distribution Amount for such
Distribution Date plus the Noteholders' Principal Carryover Shortfall as of the
close of the preceding Distribution Date; provided, however, that the
Noteholders' Principal Distribution Amount will not exceed the outstanding
principal balance of the Notes. In addition, (i) on the Class A-1 Final Maturity
Date, the principal required to be distributed to Class A-1 Noteholders will
include the amount required to reduce the outstanding principal balance of the
Class A-1 Notes to zero and (ii) on the Class A-2 Final Maturity Date, the
principal required to be distributed to the Class A-2 Noteholders will include
the amount required to reduce the outstanding principal balance of the Class A-2
Notes to zero.
"Obligor" on a Student Loan means the borrower or co-borrowers
of such Student Loan and any other Person who owes payments in respect of such
Student Loan, including the Guarantor thereof and, with respect to any Interest
Subsidy Payment or Special Allowance Payment, if any, thereon, the Department.
"Officers' Certificate" means (i) in the case of the Issuer, a
certificate signed by any two Authorized Officers of the Issuer, under the
circumstances described in, and otherwise complying with, the applicable
requirements of Section 11.01 of the Indenture, and delivered to the Indenture
Trustee and (ii) in the case of the Seller, the Master Servicer, or the
Administrator, a certificate signed by any two Authorized Officers of the
Seller, the Master Servicer, or the Administrator, as appropriate.
25
"Opinion of Counsel" means (i) with respect to the Issuer, one
or more written opinions of counsel who may, except as otherwise expressly
provided in the Indenture, be employees of or counsel to the Issuer and who
shall be satisfactory to the Indenture Trustee, and which opinion or opinions
shall be addressed to the Indenture Trustee as Indenture Trustee, shall comply
with any applicable requirements of Section 11.01 of the Indenture, and shall be
in form and substance reasonably satisfactory to the Indenture Trustee and (ii)
with respect to the Seller, the Administrator, or the Master Servicer, one or
more written opinions of counsel who may be an employee of or counsel to the
Seller, the Administrator, or the Master Servicer, which counsel shall be
reasonably acceptable to the Indenture Trustee, the Eligible Lender Trustee or
the Rating Agencies, as applicable.
"Outstanding" means, as of the date of determination, all
Notes theretofore authenticated and delivered under this Indenture except:
(i) Notes theretofore cancelled by the Note Registrar or
delivered to the Note Registrar for cancellation;
(ii) Notes or portions thereof the payment for which
money in the necessary amount has been theretofore deposited with the
Indenture Trustee or any Paying Agent in trust for the Noteholders
thereof (provided, however, that if such Notes are to be redeemed,
notice of such redemption has been duly given pursuant to the
Indenture); and
(iii) Notes in exchange for or in lieu of other Notes
which have been authenticated and delivered pursuant to the Indenture
unless proof satisfactory to the Indenture Trustee is presented that
any such Notes are held by a bona fide purchaser;
provided that in determining whether the Noteholders of the requisite
Outstanding Amount of the Notes have given any request, demand, authorization,
direction, notice, consent or waiver hereunder or under any other Basic
Document, Notes owned by the Issuer, any other obligor upon the Notes, the
Seller or any Affiliate of any of the foregoing Persons shall be disregarded and
deemed not to be Outstanding, except that, in determining whether the Indenture
Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Notes that a
Responsible Officer of the Indenture Trustee either actually knows to be so
owned or has received written notice thereof shall be so disregarded. Notes so
owned that have been pledged in good faith may be regarded as Outstanding if the
pledgee establishes to the satisfaction of the Indenture Trustee the pledgee's
right so to act with respect to
26
such Notes and that the pledgee is not the Issuer, any other obligor upon the
Notes, the Seller or any Affiliate of any of the foregoing Persons.
"Outstanding Amount" means the aggregate principal amount of
all Notes, or class of Notes, as applicable, Outstanding at the date of
determination.
"Partnership Qualification Provisions" has the meaning
specified in Section 5.06 of the Trust Agreement.
"Paying Agent" means Signet Trust Company or any other Person
that meets the eligibility standards for the Indenture Trustee specified in
Section 6.11 of the Indenture and is authorized by the Issuer to make the
payments to and distributions from the Collection Account and payments of
principal of and interest and any other amounts owing on the Notes on behalf of
the Issuer.
"Person" means any individual, corporation, estate,
partnership, joint venture, association, joint stock company, trust (including
any beneficiary thereof), unincorporated organization or government or any
agency or political subdivision thereof.
"Physical Property" has the meaning assigned to such
term as the definition of "Delivery" above.
"PLUS Loan" means a Student Loan designated as such that is
made under the Parent Loans to Undergraduate Students Program pursuant to the
Higher Education Act.
"Pool Balance" means, as of the close of business on the last
day of any Collection Period or Monthly Collection Period, the aggregate
principal balance of the Financed Student Loans as of such day (including
accrued interest thereon for the immediately preceding Collection Period or
Monthly Collection Period, as the case may be, to the extent such interest will
be capitalized upon commencement of repayment, excluding any Purchased Student
Loans and Liquidated Student Loans).
"Predecessor Note" means, with respect to any particular Note,
every previous Note evidencing all or a portion of the same debt as that
evidenced by such particular Note; and, for the purpose of this definition, any
Note authenticated and delivered under Section 2.05 of the Indenture and in lieu
of a mutilated, lost, destroyed or stolen Note shall be deemed to evidence the
same debt is the mutilated, lost, destroyed or stolen Note.
27
"Pre-Funded Amount" means, with respect to any Interest
Payment Date, Distribution Date or other specified date of determination, the
amount on deposit in the Pre-Funding Account.
"Pre-Funding Account" means the account designated as such,
established and maintained pursuant to Section 2(c) of the Administration
Agreement.
"Principal Cash Flow Amount" means, with respect to any
Distribution Date, the sum of the following amounts with respect to the related
Collection Period, or with respect to any other date of determination, the sum
of the following amounts with respect to the period specified: (i) that portion
of all collections received by the Master Servicer or any Subservicer on the
Financed Student Loans that is allocable to principal (including the portion of
any Guarantee Payments received that is allocable to principal of the Financed
Student Loans); (ii) all Liquidation Proceeds attributable to the principal
amount of Financed Student Loans which became Liquidated Student Loans during
such Collection Period, or such other specified period, in accordance with the
Master Servicer's customary servicing procedures; (iii) to the extent
attributable to principal, the Purchase Amount received with respect to each
Financed Student Loan repurchased by the Seller or purchased by the Master
Servicer as a result of a breach of a representation, warranty or covenant which
arose during the related Collection Period or such other specified period; (iv)
the aggregate amount deposited into the Collection Account following a sale of
the Financed Student Loans pursuant to Section 5.01(a) of the Loan Sale
Agreement or Section 4.04 of the Indenture; and (v) the portion allocable to
principal of any Incentive Deposits made by the Seller.
"Principal Distribution Adjustment" means, with respect to any
Distribution Date, the amount of Available Funds on such Distribution Date to be
used to make additional principal distributions to Noteholders (and, after the
Notes have been paid in full, Certificateholders) to account for (i) the amount
of any insignificant principal balance remaining outstanding as of such
Distribution Date on a Financed Student Loan after receipt of a final payment
from a borrower or Guarantor, when such insignificant principal balances are
waived in the ordinary course of business by the Master Servicer or any
Subservicer at the direction of the Administrator in accordance with the Master
Servicing Agreement or (ii) the amount of principal collections erroneously
treated as interest collections including, without limitation, by reason of the
failure by a borrower to capitalize interest that had been expected to be
capitalized; provided, however, that the Principal Distribution Adjustment for
any Distribution Date shall not exceed the lesser of (x) $100,000 and (y)
Reserve Account Excess, if any, remaining after giving effect to all
distributions to be made on such Distribution Date other
28
than distributions to the Seller and the Company out of such excess.
"Principal Distribution Amount" means, with respect to any
Distribution Date, the sum of (i) the Principal Distribution Cash Flow Amount
for such Distribution Date, (ii) the Realized Losses attributable to the
Financed Student Loans which became Liquidated Student Loans during the related
Collection Period and (iii) the Principal Distribution Adjustment; provided,
however, that the Principal Distribution Amount will exclude all payments and
proceeds (including Liquidation Proceeds) of any Financed Student Loans the
Purchase Amount of which has been included in Available Funds for a prior
Collection Period.
"Principal Distribution Cash Flow Amount" means, with respect
to any Distribution Date occurring during the Funding Period, the Principal Cash
Flow Amount and means, with respect to any Distribution Date occurring after the
Funding Period, the Net Principal Cash Flow Amount for such Distribution Date
minus any funds remitted to the Seller during the preceding Collection Period
for the purchase of any Additional Student Loans.
"Proceeding" means any suit in equity, action at law or
other judicial or administrative proceeding.
"Purchase Amount" means, (i) with respect to a Financed
Student Loan to be purchased from the Issuer, (a) the unpaid principal balance
owed by the applicable Borrower thereon plus accrued interest thereon to the
date of purchase plus (b) if the sum of the Outstanding Amount of the Notes and
the Certificate Balance of the Certificates is greater than the Pool Balance
plus the Pre-Funded Amount as of the close of business on the last day of the
Monthly Collection Period preceding the date of such purchase, an amount equal
to the product of (1) 1.73% and (2) the sum of the unpaid principal balance of
such loan plus the accrued interest to be capitalized, if any, and (ii) with
respect to an Additional Student Loan to be purchased by the Issuer, an amount
equal, as of the related Subsequent Cutoff Date, to the principal balance of
such Additional Student Loan plus accrued borrower interest thereon if and to
the extent that such interest is not then payable and will, pursuant to the
terms of such loan, be capitalized and added to the principal balance of such
loan upon commencement of repayment.
"Purchased Student Loan" means a Financed Student Loan
purchased as of the close of business on the last day of a Monthly Collection
Period by the Master Servicer pursuant to Section 3.05 of the Master Servicing
Agreement or repurchased by the Seller pursuant to Section 3.02 of the Loan Sale
Agreement.
"Rating Agency" means Fitch, Xxxxx'x and Standard & Poor's. If
no such organization or successor is any longer in
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existence, "Rating Agency" shall be a nationally recognized statistical rating
organization or other comparable Person designated by the Seller, notice of
which designation shall be given to the Indenture Trustee, the Eligible Lender
Trustee and the Master Servicer.
"Rating Agency Condition" means, with respect to any action,
that each Rating Agency shall have been given 10 days' prior notice thereof and
that each of the Rating Agencies shall have notified the Seller, the Master
Servicer, any Subservicer, the Eligible Lender Trustee and the Indenture Trustee
in writing that such action will not result in and of itself in a reduction or
withdrawal of the then current rating of the Notes or the Certificates.
"Realized Losses" means the excess of the aggregate principal
balance of any Liquidated Student Loan plus accrued but unpaid interest thereon
over Liquidation Proceeds to the extent allocable to principal.
"Record Date" means, with respect to an Interest Payment Date,
a Distribution Date or a Redemption Date, the close of business on the
twenty-fourth day of the calendar month in which such Interest Payment Date,
Distribution Date or Redemption
Date occurs.
"Recoveries" means, with respect to any Liquidated Student
Loan, moneys collected in respect thereof, from whatever source, during any
Monthly Collection Period following the Monthly Collection Period in which such
Financed Student Loan became a Liquidated Student Loan, net of the sum of any
amounts expended by the Master Servicer or any Subservicer for the account of
any Obligor and any amounts required by law to be remitted to the Obligor.
"Redemption Date" means in the case of a payment to
Noteholders pursuant to Section 10.01 of the Indenture, the Distribution Date
specified by the Administrator or the Issuer pursuant to Section 10.01 of the
Indenture.
"Redemption Price" means in the case of a payment made to
Noteholders pursuant to Section 10.01 of the Indenture, the amount to be so paid
pursuant to such Section 10.01.
"Related Student Loan File" has the meaning specified in
Section 2.01(b) of the Master Servicing Agreement.
"Repayment" means the period of time during which a Borrower
is required to make installment payments to repay the aggregate principal amount
plus accrued interest of all amounts borrowed by virtue of the Borrower Note(s)
executed by such Borrower.
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"Repayment Loan" means a Student Loan during a period of
Repayment.
"Reserve Account" means the account designated as such,
established and maintained pursuant to Section 2(c) of the Administration
Agreement.
"Reserve Account Excess" means, as of each Distribution Date,
the amount, if any, by which the amount on deposit in the Reserve Account (after
giving effect to all deposits thereto and all withdrawals therefrom pursuant to
Section 2(e)(iv) of the Administration Agreement) is greater than the Specified
Reserve Account Balance for such Distribution Date.
"Reserve Account Initial Deposit" means $6,317,145.00.
"Responsible Officer" means, with respect to the Indenture
Trustee, any officer within the Corporate Trust Office of the Indenture Trustee,
including any vice president, assistant vice president, assistant treasurer,
assistant secretary, or any other officer of the Indenture Trustee customarily
performing functions similar to those performed by any of the above designated
officers, with direct responsibility for the administration of the Indenture and
the other Basic Documents on behalf of the Indenture Trustee and also, with
respect to a particular matter, any other officer to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.
"Schedule of Student Loans" means the listing of the Financed
Student Loans set forth in Schedule A to the Loan Sale Agreement and to the
Indenture (which Schedule may be in the form of microfiche) as the same may be
amended from time to time.
"Secretary" means the Secretary of the Department, or any
predecessor or successor to the functions thereof under the Higher Education
Act.
"Seller" means Signet, in its capacity as seller of the
Financed Student Loans.
"Serial Loan" means a Financed Student Loan which (i) is made
by an eligible lender under the Higher Education Act to a Borrower who is also a
Borrower under at least one outstanding Initial Financed Student Loan, (ii) is
made under the same federal loan program as such Initial Financed Student Loan
and (iii) has the same Guarantor as such Initial Financed Student Loan.
"Servicer Default" means an event specified in Section 6.01 of
the Master Servicing Agreement.
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"Servicing Fee" has the meaning specified in Section 3.06 of
the Master Servicing Agreement.
"Signet" means Signet Bank, a Virginia banking corporation.
"Signet Student Loan Trusts" means the Issuer and any other
trust formed subsequent to the Closing Date that is entitled to the benefits of
the Guarantee Agreement.
"SLS Loan" means a Student Loan designated as such that is
made under the Supplemental Loans for Students Program pursuant to the Higher
Education Act.
"Special Allowance Payments" means payments, designated as
such, consisting of effective interest subsidies by the Department in respect of
the Financed Student Loans to the Eligible Lender Trustee on behalf of the Trust
in accordance with the Higher Education Act.
"Specified Reserve Account Balance" with respect to any
Distribution Date means the greater of: (a) 1.5% of the sum of the Pool Balance
and the Pre-Funded Amount as of the close of business on the last day of the
related Collection Period and (b) $4,211,430; provided, however, that in no
event shall the Specified Reserve Account Balance exceed the sum of the
outstanding principal amount of the Notes and the Certificate Balance.
"Xxxxxxxx Loan" means a Student Loan designated as such
that is made under the Xxxxxx X. Xxxxxxxx Student Loan Program in
accordance with the Higher Education Act.
"Standard & Poor's" means Standard & Poor's Rating
Services, a division of The XxXxxx-Xxxx Companies.
"State" means any one of the 00 Xxxxxx xx xxx Xxxxxx Xxxxxx xx
Xxxxxxx, the trust territories of the United States, or the District of
Columbia.
"Student Loan" means an agreement to repay a disbursement of
money to or on behalf of an eligible student, evidenced by a Borrower Note and
guaranteed in accordance with the policies and procedures of a Guarantor.
"Student Loan Files" means the documents relating to the
Financed Student Loans specified in Section 2.01 of the Master Servicing
Agreement.
"Student Loan Rate" means, with respect to any Interest
Period, the interest rate equal to the product of (a) the quotient obtained by
dividing (i) 360 by (ii) the actual number
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of days elapsed in such Interest Period and (b) the percentage equivalent of a
fraction, the numerator of which is equal to Expected Interest Collections for
such Interest Period less the Servicing Fee and the Administration Fee with
respect to the Interest Payment Date immediately following the last day of such
Interest Period and (ii) the denominator of which is the sum of the Outstanding
Amount of the Notes and the Certificate Balance of the Certificates as of the
first day of such Interest Period (after, if the first day of such Interest
Period is a Distribution Date, giving effect to any principal distributions on
the Notes or Certificates on such Distribution Date).
"Student Loan Rate Accrual Period" means, with respect to any
Interest Period, the calendar month that precedes the month during which such
Interest Period ends.
"Subcustodian" has the meaning specified in 2.01(b) of the
Master Servicing Agreement.
"Subsequent Cutoff Date" means, for any Additional Student
Loan transferred to the Issuer, the date, specified in the related Transfer
Agreement, on and after which all distributions on such loan are property of the
Issuer.
"Subservicer" means, upon satisfaction of the Rating Agency
Condition, any entity in its capacity as a subservicer pursuant to a
Subservicing Agreement between it and the Master Servicer.
"Subservicing Agreement" means any of the servicing agreements
entered into by the Master Servicer and any Subservicer, subject to Section 3.12
relating to the servicing of the Financed Student Loans and the custody of the
Related Financed Student Loan Files.
"Successor Master Servicer" has the meaning specified in
Section 3.07(e) of the Indenture.
"Tax Characterization Amendment" has the meaning specified in
Section 5.06 of the Trust Agreement.
"Transfer Agreement" has the meaning provided in Section 2.03
of the Loan Sale Agreement.
"Transfer Date" means the day fixed for the transfer of any
Additional Student Loans by the Seller to the Issuer; provided, that, during a
calendar month in which a Distribution Date occurs, no Transfer Date shall occur
during the period from the Determination Date occuring in such month to the end
of such calendar month.
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"Treasury Regulations" means regulations, including proposed
or temporary regulations, promulgated under the Code. References in any document
or instrument to specific provisions of proposed or temporary regulations shall
include analogous provisions of final Treasury Regulations or other successor
Treasury Regulations.
"Trust" means the Issuer, established pursuant to the
Trust Agreement.
"Trust Account Property" means the Trust Accounts, all amounts
and investments held from time to time in any Trust Account (whether in the form
of deposit accounts, Physical Property, book-entry securities, uncertificated
securities or otherwise), including the Reserve Account Initial Deposit and all
proceeds of the foregoing.
"Trust Accounts" has the meaning specified in Section
2(c) of the Administration Agreement.
"Trust Agreement" means the Trust Agreement dated as of
November 1, 1996, among the Depositor, the Company and the Eligible Lender
Trustee.
"Trust Certificate" means a Certificate.
"Trust Estate" means all right, title and interest of the
Trust (or the Eligible Lender Trustee on behalf of the Trust) in and to the
property and rights assigned to the Trust pursuant to Article II of the Loan
Sale Agreement all funds on deposit from time to time in the Trust Accounts and
all other property of the Trust from time to time, including any rights of the
Eligible Lender Trustee and the Trust pursuant to the Loan Sale Agreement and
the Administration Agreement.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act
of 1939 as in force on the date hereof, unless otherwise specifically provided.
"UCC" means, unless the context otherwise requires, the
Uniform Commercial Code, as in effect in the relevant jurisdiction, as amended
from time to time.
"Underwriting Agreements" means either or both of the Note
Underwriting Agreement or the Certificate Underwriting Agreement each of which
is dated December 19, 1996 and each of which is between the Seller and Credit
Suisse First Boston Corporation (acting for itself, in the case of the
Certificate Underwriting Agreement and as Representative of the several
Underwriters, in the case of the Note Underwriting Agreement).
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