Exhibit 4.2.9
ADMINISTRATION AGREEMENT dated as of [ ], among ASSET BACKED
SECURITIES CORPORATION STUDENT LOAN TRUST [ ], a Delaware trust
(the "ISSUER"), [ ], a [ ] corporation, as administrator (the
"ADMINISTRATOR"), and [ ], a [ ] banking corporation, not in its
individual capacity but solely as Indenture Trustee (the
"INDENTURE TRUSTEE").
W I T N E S S E T H
WHEREAS the Issuer was formed pursuant to the Trust Agreement dated as
of [ ] (the "TRUST AGREEMENT") among the Seller, as depositor, [ ], a [ ]
corporation (the "COMPANY"), and [ ], as Eligible Lender Trustee (the "ELIGIBLE
LENDER TRUSTEE") and is issuing the Class A-1 Floating Rate Asset-Backed Senior
Notes (the "CLASS A-1 NOTES"), the Class A-2 Floating Rate Asset-Backed Senior
Notes (the "CLASS A-2 NOTES" and together with the Class A-1 Notes, the "Senior
Notes") and the Class B Floating Rate Asset-Backed Subordinate Notes (the
"SUBORDINATE NOTES" and, together with the Senior Notes, the "NOTES") pursuant
to the Indenture dated as of [ ] (the "INDENTURE"), between the Issuer and the
Indenture Trustee, (capitalized terms used herein and not defined herein shall
have the meanings assigned to such terms in Appendix A hereto, which also
contains rules of usage and construction that shall be applicable herein); and
WHEREAS the Issuer has entered into certain agreements in connection
with the issuance of the Notes, including the Basic Documents; and
WHEREAS, pursuant to the Basic Documents, the Issuer and the Eligible
Lender Trustee are required to perform certain duties in connection with the
Notes and the Collateral therefor pledged pursuant to the Indenture; and
WHEREAS the Issuer and the Eligible Lender Trustee desire to have the
Administrator perform certain of the duties of the Issuer and the Eligible
Lender Trustee referred to in the preceding clause, and to provide such
additional services consistent with the terms of this Agreement and the Basic
Documents as the Issuer and the Eligible Lender Trustee may from time to time
request; and
WHEREAS the Administrator has the capacity to provide the services
required hereby and is willing to perform such services for the Issuer and the
Eligible Lender Trustee on the terms set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and other good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties agree as follows:
1. REPRESENTATIONS OF THE ADMINISTRATOR. The Administrator makes the
following representations on which the Issuer, the Eligible Lender Trustee and
any Swap Counterparties are deemed to have relied. The representations speak as
of the execution and delivery of this Agreement and as of the Closing Date in
the case of the Initial Financed Student Loans, as of the applicable Transfer
Date in the case of the Prefunded Loans, Serial Loans and the New Loans, as of
the relevant date of assignment in the case of any Qualified Substitute Student
Loan, as of the date of origination in the case of any Consolidation Loan
originated by the Trust during the Revolving Period, and as of the applicable
Add-on Consolidation Loan Funding Date in the case of any Consolidation Loan the
principal balance of which is increased by the principal balance of any related
Add-on Consolidation Loan, but shall survive the sale of the Financed Student
Loans to the Eligible Lender Trustee on behalf of the Issuer and the pledge
thereof to the Indenture Trustee pursuant to the Indenture.
(a) ORGANIZATION AND GOOD STANDING. The Administrator is duly
organized and validly existing as a corporation in good standing under the
laws of the State of [ ], with the power and authority to own its
properties and to conduct its business as such properties are currently
owned and such business is currently conducted.
(b) POWER AND AUTHORITY OF THE ADMINISTRATOR. The Administrator has
the corporate power and authority to execute and deliver this Agreement and
to carry out its terms, and the execution, delivery and performance of this
Agreement have been duly authorized by the Administrator by all necessary
corporate action.
(c) BINDING OBLIGATION. This Agreement constitutes a legal, valid and
binding obligation of the Administrator, enforceable in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization and
similar laws relating to creditors' rights generally and subject to general
principles of equity.
(d) NO VIOLATION. The consummation of the transactions contemplated by
this Agreement and the fulfillment of the terms hereof or thereof do not
conflict with, result in any breach of any of the terms and provisions of,
nor constitute (with or without notice or lapse of time or both) a default
under, the certificate of incorporation or by-laws of the Administrator, or
any indenture, agreement or other instrument to which the Administrator is
a party or by which it shall be bound; nor result in the creation or
imposition of any Lien upon any of its properties pursuant to the terms of
any such indenture, agreement or other instrument; nor violate any law or,
to the knowledge of the Administrator, any order, rule or regulation
applicable to the Administrator of any court or of any Federal or state
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Administrator or its
properties. The consummation by the Administrator of the transactions
contemplated by this Agreement will not result in the loss of any Guarantee
Payments by the Trust or any reinsurance payments with respect to any
Financed Student Loan.
(e) NO PROCEEDINGS. There are no proceedings or investigations pending
against the Administrator or, to its best knowledge, threatened against the
Administrator, before any court, regulatory body, administrative agency or
other governmental instrumentality having jurisdiction over the
Administrator or its properties: (i) asserting the invalidity of this
Agreement, the Indenture or any of the other Basic Documents or the Notes,
(ii) seeking to prevent the issuance of the Notes or the consummation of
any of the transactions contemplated by this Agreement, the Indenture or
any of the other Basic Documents, (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 Basic Documents or the Notes or (iv) seeking to affect adversely the
federal or state income tax attributes of the Issuer or the Notes.
(f) ALL CONSENTS. All authorizations, consents, licenses, orders or
approvals of or registrations or declarations with any court, regulatory
body, administrative agency or other government instrumentality required to
be obtained, effected or given by the Administrator in connection with the
execution and delivery by the Administrator of this Agreement and the
performance by the Administrator of the transactions contemplated by this
Agreement have in each case been duly obtained, effected or given and are
in full force and effect.
2. DUTIES OF THE ADMINISTRATOR.
(a) DUTIES WITH RESPECT TO THE BASIC DOCUMENTS. The Administrator
shall perform all its duties as Administrator and the duties of the Issuer under
the Basic Documents. In addition, the Administrator shall consult with the
Eligible Lender Trustee as the Administrator deems appropriate regarding the
duties of the Issuer under the Basic Documents. The Administrator shall monitor
the performance of the Issuer and shall advise the Eligible Lender Trustee when
action is necessary to comply with the Issuer's duties under the Basic
Documents. The Administrator shall prepare for execution by the Issuer or shall
cause the preparation by other appropriate Persons of all such documents,
reports, filings, instruments, certificates and opinions as it shall be the duty
of the Issuer to prepare, file or deliver pursuant to the Basic Documents. In
furtherance of the foregoing, the Administrator shall take all appropriate
action that is the duty of the Issuer to take pursuant to the Indenture,
including such of the foregoing as are required with respect to the following
matters (references below in this subsection (a) being to sections of the
Indenture):
(A) 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);
(B) 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));
(C) 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);
(D) the preparation, obtaining or filing of the instruments, opinions
and certificates and other documents required for the release of collateral
(Section 2.09);
(E) the preparation, obtaining or filing of the instruments, opinions
and certificates and other documents required for a transfer of the
Subordinate Notes (Section 2.04);
(F) the duty to cause the Note Registrar to maintain on behalf of the
Issuer an office in the [ ], for registration of transfer or exchange of
the Notes (Section 3.02);
(G) 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);
(H) the direction to the Paying Agents to deposit moneys with the
Indenture Trustee (Section 3.03);
(I) 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);
(J) 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);
(K) 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);
(L) 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));
(M) the notification of the Indenture Trustee, the Rating Agencies and
each Swap Counterparty, if any, of any Servicer Default pursuant to the
Servicing Agreement and, if such Servicer Default arises from the failure
of the Servicer to perform any of its duties under the Servicing Agreement,
the taking of all reasonable steps available to remedy such failure
(Section 3.07(d));
(N) the preparation and obtaining of documents and instruments
required for the release of the Issuer from its obligations under the
Indenture (Section 3.10);
(O) the prompt delivery of notice to the Indenture Trustee, the Rating
Agencies and any Swap Counterparties of each Event of Default, any Default
under Section 5.01(iii) of the Indenture and each default by the Servicer
under the Servicing Agreement or by the Seller under the Loan Sale
Agreement (Section 3.18);
(P) 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);
(Q) 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);
(R) 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);
(S) 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);
(T) the preparation and, after execution by the Issuer, the filing
with the Commission, any applicable State agencies and the Indenture
Trustee of documents required to be filed on a periodic basis with, and
summaries thereof as may be required by rules and regulations prescribed
by, the Commission and any applicable State agencies and the transmission
of such summaries to the Noteholders (Section 7.03);
(U) the opening of one or more accounts in the Issuer's name, the
preparation of Issuer Orders, Officers' Certificates of the Issuer and
Opinions of Counsel and all other actions necessary with respect to
investment and reinvestment of funds in the Trust Accounts (Sections 8.02
and 8.03);
(V) 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);
(W) the preparation of Issuer Orders and the obtaining of Opinions of
Counsel with respect to the execution of supplemental indentures and the
mailing to the Noteholders, each Rating Agency and any Swap Counterparties
of notices with respect to such supplemental indentures (Sections 9.01,
9.02 and 9.03);
(X) 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);
(Y) the notification of Noteholders and any Swap Counterparties of
redemption of the Notes or the duty to cause the Indenture Trustee to
provide such notification (Section 10.02);
(Z) 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));
(AA) 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));
(AB) 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);
(AC) the recording of the Indenture, if applicable (Section 11.15);
(AD) the duty to obtain a new servicer as Successor Servicer and to
enter into an agreement with such Successor Servicer (Section 3.07(e));
(AE) the notification of the termination of the Servicer and the
appointment of a Successor Servicer (Section 3.07(f));
(AF) the duty to cause the Servicer to comply with the Servicing
Agreement (Section 3.14); and
(AG) the delivery of all documents and opinions to be provided by the
Issuer under Part 3 of any Swap Agreements, performing all obligations of
the Issuer under Part 5(b), 5(i) and Part 5(o) of any Swap Agreements, and
providing all notices and consents required by the Issuer under any Swap
Agreements.
The Administrator shall provide to the Eligible Lender Trustee (i) a
list of jurisdictions in which the Issuer is required to be licensed and (ii)
any other information necessary for the Eligible Lender Trustee to fulfill its
obligations under Section 7.08 of the Trust Agreement.
(b) DUTIES WITH RESPECT TO THE ISSUER. (i) In addition to the duties
of the Administrator set forth above and in the other Basic Documents, the
Administrator shall perform such calculations and shall prepare for execution by
the Issuer or the Eligible Lender Trustee or shall cause the preparation by
other appropriate Persons of all such documents, reports, filings, instruments,
certificates and opinions as it shall be the duty of the Issuer or the Eligible
Lender Trustee to prepare, file or deliver pursuant to the Basic Documents, and
at the request of the Eligible Lender Trustee shall take all appropriate action
that it is the duty of the Issuer to take pursuant to the Basic Documents. In
furtherance thereof, the Eligible Lender Trustee shall, on behalf of itself and
of the Issuer, execute and deliver to the Administrator and to each successor
Administrator appointed pursuant to the terms hereof, one or more powers of
attorney substantially in the form of Exhibit A hereto, appointing the
Administrator the attorney-in-fact of the Eligible Lender Trustee and the Issuer
for the purpose of executing on behalf of the Eligible Lender Trustee and the
Issuer all such documents, reports, filings, instruments, certificates and
opinions. Subject to Section 9 of this Agreement, and in accordance with the
directions of the Eligible Lender Trustee, the Administrator shall administer,
perform or supervise the performance of such other activities in connection with
the Collateral (including the Basic Documents) as are not covered by any of the
foregoing provisions and as are expressly requested by the Eligible Lender
Trustee and are reasonably within the capability of the Administrator.
(ii) Notwithstanding anything in this Agreement or the Basic Documents
to the contrary, the Administrator shall deliver to the Eligible Lender Trustee,
the Indenture Trustee, the Rating Agencies and (if the Seller is not the
Administrator) the Seller, an Officers' Certificate of the Administrator
containing all the information necessary:
(A) to pay the Department any Consolidation Fees due and payable to
the Department, to the extent such Consolidation Fees are not being
deducted by the Department out of Special Allowance Payments or Interest
Subsidy Payments, which Officers' Certificate shall be delivered on the
date that is three Business Days prior to the date such fees are to be
remitted to the Department;
(B) during the Revolving Period to pay the Seller, pursuant to Section
2.02 of the Loan Sale Agreement, on each Transfer Date, the Loan Purchase
Amount (or if the Parity Date has occurred, the Purchase Collateral
Balance) for Prefunded Loans, New Loans or Serial Loans purchased by the
Eligible Lender Trustee on behalf of the Issuer on such date and, on each
Transfer Date after the end of the Revolving Period, the Purchase
Collateral Balance for Serial Loans so purchased on such date (but, only to
the extent the Purchase Collateral Balance has not been satisfied by the
exchange of Serial Loans for Exchanged Student Loans), which Officers'
Certificate, in each case, shall be delivered on the Business Day preceding
such Transfer Date;
(C) to pay the Servicer the Servicing Fee due on each Monthly Payment
Date pursuant to Section 2(d)(iv)(A), 2(d)(v)(A) and 2(e)(iv)(A) and any
Servicing Fee Shortfall due on each Quarterly Payment Date pursuant to
Section 2(e)(ii)(b)(v), which Officers' Certificate shall be delivered on
the each Determination Date;
(D) to make all the distributions required by Sections 2(d), 2(e),
2(f) and 2(j), for the Monthly Collection Period or Collection Period, as
the case may be, preceding the date of such Officers' Certificate, which
Officers' Certificate shall be delivered on each Determination Date.
In addition, prior to each Determination Date immediately preceding a
Quarterly Payment Date, the Administrator shall determine, in compliance with
its obligation to prepare an Officers' Certificate on such Determination Date
pursuant to this Section, the Class A-1 Note Rate, the Class A-2 Note Rate and
the Subordinate Note Rate that will be applicable to the Quarterly Payment Date
following such Determination Date. In connection therewith, the Administrator
shall calculate Three-Month LIBOR, the Class A-1 Note Rate, the Class A-2 Note
Rate and the Subordinate Note Rate in accordance with the respective definitions
thereof.
(iii) [Reserved.]
(iv) Notwithstanding anything in this Agreement or the Basic Documents
to the contrary, the Administrator shall be responsible for performance of the
duties of the Eligible Lender Trustee set forth in Section 5.02 of the Trust
Agreement with respect to, among other things, any tax information or accounting
report required to be distributed to Note Owners.
(v) [Reserved.]
(vi) The Administrator shall perform the duties of the Administrator
specified in Sections 10.02 and 10.03 of the Trust Agreement required to be
performed in connection with the resignation or removal of the Eligible Lender
Trustee and the appointment of a successor Eligible Lender Trustee, and any
other duties expressly required to be performed by the Administrator under the
Trust Agreement and the other Basic Documents, including those under Sections
6.07 and 6.08 of the Indenture and those under Section 6.07 of the Trust
Agreement.
(vii) As described in Article IX of the Trust Agreement, notice of any
termination of the Trust shall be given by the Administrator to the Eligible
Lender Trustee, the Indenture Trustee and any Swap Counterparties as soon as
practicable after the Administrator has received notice thereof.
(viii) In carrying out the foregoing duties or any of its other
obligations under this Agreement, the Administrator may enter into transactions
with or otherwise deal with any of its Affiliates; PROVIDED, HOWEVER, that the
terms of any such transactions or dealings shall be in accordance with any
directions received from the Issuer and shall be, in the Administrator's
opinion, no less favorable to the Issuer or the Noteholders than would be
available from unaffiliated parties.
(c) ESTABLISHMENT AND MAINTENANCE OF TRUST ACCOUNTS.
(i) The Administrator, for the benefit of the Issuer, shall establish
and maintain in at the Indenture Trustee an Eligible Deposit Account in the name
of the Trust (the "COLLECTION ACCOUNT"). The Collection Account will initially
be established as a segregated trust account in the name of the Indenture
Trustee with the corporate trust department of [ ].
(ii) The Administrator shall establish and maintain at the Indenture
Trustee an Eligible Deposit Account in the name of the Trust (the "RESERVE
ACCOUNT"). The Reserve Account will initially be established as a segregated
trust account in the name of the Indenture Trustee with the corporate trust
department of [ ].
(iii) The Administrator, for the benefit of the Noteholders and any
Swap Counterparties, shall establish and maintain at the Indenture Trustee an
Eligible Deposit Account in the name of the Trust (the "COLLATERAL REINVESTMENT
ACCOUNT"). The Collateral Reinvestment Account will initially be established as
a segregated trust account in the name of the Indenture Trustee with the
corporate trust department of [ ].
(iv) The Administrator, for the benefit of the Noteholders, if there
are funds to be deposited in a prefunding account, shall establish and maintain
at the Indenture Trustee an Eligible Deposit Account in the name of the Trust
(the "PREFUNDING ACCOUNT"), bearing a designation clearly indicating that the
funds deposited therein are held for the benefit of the Indenture Trustee, on
behalf of the Noteholders. The Prefunding Account will initially be established
as a segregated trust account in the name of the Indenture Trustee with [ ].
(v) Funds on deposit in the Collection Account, the Reserve Account,
the Prefunding Account and the Collateral Reinvestment Account (collectively,
the "TRUST ACCOUNTS") shall be invested by the Indenture Trustee (or any
custodian or designated agent with respect to any amounts on deposit in such
accounts) in Eligible Investments pursuant to written instructions by the
Administrator; PROVIDED, HOWEVER, it is understood and agreed that the Indenture
Trustee shall not be liable for any loss arising from such investment in
Eligible Investments. All such Eligible Investments shall be held by (or by any
custodian on behalf of) the Indenture Trustee for the benefit of the Issuer;
PROVIDED, HOWEVER, that on the Business Day preceding each Monthly Payment Date
all interest and other investment income (net of losses and investment expenses)
on funds on deposit therein shall be deposited into the Collection Account and
shall be deemed to constitute a portion of the Monthly Available Funds for each
Monthly Payment Date that is not a Quarterly Payment Date, and a portion of the
Available Funds for each Quarterly Payment Date. Other than as permitted in
writing by the Rating Agencies, funds on deposit in the Trust Accounts shall be
invested in Eligible Investments that will mature so that funds sufficient to
pay the Servicing Fee and the Administration Fee (and all other amounts payable
on a Quarterly Payment Date) will be available in the Collection Account on the
Business Day preceding each Monthly Payment Date that is not a Quarterly Payment
Date, so that funds on deposit in the Prefunding Account or Collateral
Reinvestment Account that are required, in the judgment and at the discretion of
the Administrator, to make Additional Fundings during the Revolving Period will
be available for such purpose and so that the remaining such funds will be
available at the close of business on the Business Day preceding each Quarterly
Payment Date.
(vi) (A) The Indenture Trustee, on behalf of the Noteholders and any
Swap Counterparties, shall possess all right, title and interest in all
funds on deposit from time to time in the Trust Accounts and in all
proceeds thereof (including all income thereon) and all such funds,
investments, proceeds and income shall be part of the Trust Estate. The
Trust Accounts shall be under the sole dominion and control of the
Indenture Trustee for the benefit of the Noteholders and any Swap
Counterparties. If, at any time, any of the Trust Accounts ceases to be an
Eligible Deposit Account, the Indenture Trustee (or the Administrator on
its behalf) agrees, by its acceptance hereto, that it shall within 10
Business Days (or such longer period, not to exceed 30 calendar days, as to
which each Rating Agency may consent) establish a new Trust Account as an
Eligible Deposit Account and shall transfer any cash and/or any investments
to such new Trust Account. In connection with the foregoing, the
Administrator agrees that, in the event that any of the Trust Accounts are
not accounts with the Indenture Trustee, the Administrator shall notify the
Indenture Trustee and any Swap Counterparties in writing promptly upon any
of such Trust Accounts ceasing to be an Eligible Deposit Account.
(B) With respect to the Trust Account Property, the Indenture
Trustee agrees, by its acceptance hereof, that:
(1) any Trust Account Property that is held in deposit accounts shall
be held solely in Eligible Deposit Accounts, subject to the next to the
last sentence of clause (vi)(A) above; and each such Eligible Deposit
Account shall be subject to the exclusive custody and control of the
Indenture Trustee, and the Indenture Trustee shall have sole signature
authority with respect thereto;
(2) any Trust Account Property that constitutes Physical Property
shall be Delivered to the Indenture Trustee in accordance with paragraph
(a) of the definition of "Delivery";
(3) any Trust Account Property that is a book-entry security held
through the Federal Reserve System pursuant to Federal book-entry
regulations shall be Delivered in accordance with paragraph (b) of the
definition of "Delivery"; and
(4) any Trust Account Property that is an "uncertificated security"
under Article VIII of the UCC and that is not governed by clause (3) above
shall be Delivered to the Indenture Trustee in accordance with paragraph
(c) of the definition of "Delivery".
(C) The Administrator shall have the power, revocable for cause
or upon the occurrence and during the continuance of an Administrator
Default by the Indenture Trustee or by the Eligible Lender Trustee
with the consent of the Indenture Trustee, to instruct the Indenture
Trustee to make withdrawals and payments from the Trust Accounts for
the purpose of permitting the Servicer or the Eligible Lender Trustee
to carry out their respective duties under the Servicing Agreement and
the Trust Agreement, permitting the Indenture Trustee to carry out its
duties under the Indenture and withdrawing any amounts deposited in
error into such accounts.
(vii) On each Determination Date, the Administrator shall calculate
all amounts required to determine the amounts to be deposited in the Collection
Account and the other Trust Accounts and the amounts to be distributed therefrom
on the related Monthly Payment Date, Quarterly Payment Date or other dates from
which amounts therein are to be distributed.
(d) WITHDRAWALS FROM THE COLLECTION ACCOUNT. The Administrator shall
instruct the Indenture Trustee in writing (based, in the case of clauses (iv)
and (v) below, on the information contained in the servicer's report delivered
with respect to the applicable Determination Date pursuant to Section 3.07 of
the Servicing Agreement) to make withdrawals from amounts deposited in the
Collection Account at the following times and for the following purposes, and
the Indenture Trustee shall comply with such instructions:
(i) from time to time during the Revolving Period, insofar as the
Administrator may so instruct on any Business Day therein, to deposit into
the Collateral Reinvestment Account all collections in respect of principal
of the Financed Student Loans; provided that if the Collateral Reinvestment
Account Trigger is triggered with respect to any Monthly Collection Period,
the Administrator may only instruct the Indenture Trustee to deposit
amounts in the Collateral Reinvestment Account in excess of the amount
necessary to pay the Noteholders' Interest Distribution Amount for the next
Quarterly Payment Date provided, further, that such amounts shall remain on
deposit in the Collection Account until such next succeeding Quarterly
Payment Date;
(ii) from time to time during each Collection Period to pay the
Department any Consolidation Fees due and payable to the Department, to the
extent such Consolidation Fees are not being deducted by the Department out
of Special Allowance Payments or Interest Subsidy Payments;
(iii) (A) on each Add-on Consolidation Loan Funding Date after the
Revolving Period, to prepay in full any Add-on Consolidation Loan pursuant
to Section 6.07 of the Trust Agreement; PROVIDED, HOWEVER, that the amount
paid to prepay any Add-on Consolidation Loan on any date since the
preceding Quarterly Payment Date shall not exceed the Net Principal Cash
Flow Amount for such date minus the aggregate Purchase Collateral Balance
remitted for the purchase of Serial Loans on each Transfer Date since the
preceding Quarterly Payment Date after the Revolving Period pursuant to
Section 2(d)(iii)(B); and
(B) on each Transfer Date after the Revolving Period to pay to
the Seller, pursuant to Section 2.02 of the Loan Sale Agreement, the
aggregate Purchase Collateral Balance for Serial Loans purchased by
the Eligible Lender Trustee on behalf of the Issuer on such date (but
only to the extent such aggregate Purchase Collateral Balance has not
been satisfied by the exchange of Serial Loans for Exchanged Student
Loans); PROVIDED that the amount paid to the Seller for the purchase
of Serial Loans on such Transfer Date plus the amount of funds
remitted for the purchase of Serial Loans on each Transfer Date since
the preceding Quarterly Payment Date on any Transfer Date after the
Revolving Period shall not exceed the Net Principal Cash Flow Amount
for such Transfer Date minus the sum of (i) all amounts paid since the
last Quarterly Payment Date pursuant to Section 2(d)(iii)(A) to prepay
any Add-on Consolidation Loan not held by the Issuer and (ii) all
amounts which the Administrator reasonably estimates will be required
to prepay Add-on Consolidation Loans pursuant to Section 2(d)(iii)(A)
during the remainder of the Collection Period; and PROVIDED, FURTHER,
that any Purchase Premium Amounts for Serial Loans purchased after the
Revolving Period shall be paid only out of Reserve Account Excess as
set forth in Section 2(e)(ii);
(iv) on each Monthly Payment Date that is not a Quarterly Payment
Date, to make the following deposits and distributions to the Persons
specified below by 11:00 a.m. (New York time), to the extent of Monthly
Available Funds for such Monthly Payment Date in the Collection Account, in
the following order of priority:
(A) to the Servicer, the Servicing Fee with respect to the
preceding calendar month and all unpaid Servicing Fees from prior
months; and
(B) to the Administrator, from the amount of the Monthly
Available Funds remaining after the application of clause (A), the
Administration Fee with respect to the preceding calendar month and
all unpaid Administration Fees from prior months;
(v) on each Quarterly Payment Date, to make the following deposits and
distributions to the Persons or the account specified below by 11:00 a.m.
(New York time), to the extent of Available Funds for such Quarterly
Payment Date in the Collection Account, in the following order of priority:
(A) to the Servicer, the Servicing Fee with respect to the
preceding calendar month and all unpaid Servicing Fees from prior
months;
(B) to the Administrator, from the amount of the Available Funds
remaining after the application of clause (A), the Administration Fee
with respect to the preceding calendar month and all unpaid
Administration Fees from prior months;
(C) to the Indenture Trustee for distribution pursuant to Section
8.02(c) of the Indenture, in the following order of priority, from the
amount of the Available Funds remaining after the application of
clauses (A) and (B): (i) the Class A-1 Noteholders' Interest
Distribution Amount, the Class A-2 Noteholders' Interest Distribution
Amount, the Trust Swap Payment Amounts, if any, and the remainder of
any Termination Payment to the extent that the remainder of such
Termination Payment is owed to any Swap Counterparties following a
Redemption Event (as defined in any related Swap Agreement) or the
Trust is the defaulting party (other than an Event of Default
specified in Section 5(a)(i) of any Swap Agreements), PRO RATA, based
on the ratio of each such amount to the total of such amounts; (ii)
the Subordinate Noteholders' Interest Distribution Amount; (iii) if
the Revolving Period has terminated, the Senior Noteholders' Principal
Distribution Amount; and (iv) if the Revolving Period has terminated,
the Subordinate Noteholders' Principal Distribution Amount, each with
respect to such Quarterly Payment Date; and
(D) to the Reserve Account, the amount of Available Funds
remaining after the application of clauses (A) through (C).
Except in the case of amounts deposited into the Reserve Account
pursuant to clause (d)(v)(D) of this Section 2, amounts properly calculated,
reported and withdrawn from the Collection Account and properly distributed
pursuant to this Section 2(d) in accordance with the terms hereof shall be
deemed released from the Trust Estate and the security interest therein granted
to the Indenture Trustee, and the Persons to whom such amounts are distributed
shall in no event be required to refund any such distributed amounts.
(e) RESERVE ACCOUNT. (i) The Seller shall deposit the Reserve Account
Initial Deposit into the Reserve Account as required by Section 2.01(b) of the
Loan Sale Agreement. The Administrator may, but is not obligated to, deposit
amounts from time to time into the Reserve Account.
(ii) With respect to any amount in the Reserve Account on any
Quarterly Payment Date (after giving effect to all deposits thereto on such
Quarterly Payment Date and to all withdrawals therefrom necessary to make the
distributions required to be made from the Available Funds on such Quarterly
Payment Date) in excess of the Specified Reserve Account Balance for such
Quarterly Payment Date (the "RESERVE ACCOUNT EXCESS"), the Administrator shall
instruct the Indenture Trustee to apply such Reserve Account Excess as follows:
(a) during the Revolving Period, for deposit to the Collateral Reinvestment
Account; PROVIDED, HOWEVER, that if such date is on or after the Parity Date, to
the extent that such funds represent payments of interest or Trust Swap Receipt
Amounts with respect to the Financed Student Loans, such funds shall be applied
in the amounts and the order of priority set forth in clauses (b)(v) through
(vii) below, and (b) at and after the termination of the Revolving Period, to
the following (in the priority indicated): (i) to pay to the Seller any unpaid
Purchase Premium Amounts for any Serial Loans purchased by the Issuer after the
end of the Revolving Period but prior to the end of the related Collection
Period; (ii) if such Quarterly Payment Date is on or prior to the Parity Date
(after application of all other amounts paid to the Noteholders on such
Quarterly Payment Date, including the application of funds in the Collateral
Reinvestment Account), to pay to the Indenture Trustee for distribution to
Noteholders pursuant to Section 8.02(d) of the Indenture an amount equal to the
lesser of (x) the remaining amount of such excess and (y) the amount by which
the aggregate principal amount of the Notes, after giving effect to all other
distributions in respect of principal of the Notes on such Quarterly Payment
Date, exceeds the Pool Balance as of the close of business on the last day of
the related Collection Period; (iii) if such Quarterly Payment Date is after the
[ ], to pay the Indenture Trustee for distribution to Noteholders pursuant to
Section 8.02(d) of the Indenture the remaining amount of such excess until the
aggregate principal amount of the Notes has been reduced to zero; (iv) Reserved
(v) to pay to the Servicer, out of the remaining amount of such excess, the
Servicing Fee Shortfall and all prior unpaid Servicing Fee Shortfalls, if any;
(vi) to pay to the Seller, out of the remaining amount of such excess, any
unpaid Purchase Premium Amounts for any Serial Loans or New Loans purchased
during the Revolving Period but after the Parity Date (or at any time during the
Collection Period during which the Parity Date occurs) and prior to the end of
the related Collection Period; (vii) to any Swap Counterparties, all Termination
Payments due under any Swap Agreements to the extent that any related Swap
Counterparty is the Defaulting Party (as such term is defined in any related
Swap Agreement), the Trust is the defaulting party under Section 5(a)(i) of any
related Swap Agreement or a Termination Event (other than an Additional
Termination Event (as defined in any Swap Agreements) in respect of a Redemption
Event (as defined in any Swap Agreements)) shall have occurred; and (viii) any
remaining amount of such excess, after application of clauses (i) through (vii)
above will be released to the Seller; PROVIDED, HOWEVER, that if and to the
extent that (A) the amount of the Servicer's unpaid repurchase obligation
pursuant to Section 3.05 of the Servicing Agreement exceeds [ ] as of the last
day of the preceding Collection Period (and such Servicer has not been replaced
by a Successor Servicer), or (B) the Department fails by the last day of such
preceding Collection Period to satisfy its obligations to reimburse or replace a
Federal Guarantor pursuant to the Higher Education Act, then any Reserve Fund
Excess remaining on such Quarterly Payment Date for distribution to the Company
pursuant to the clause (vi) above shall not be so distributed and shall be
retained in the Reserve Account for application in accordance with this
Agreement. Amounts properly calculated, reported and distributed pursuant to
this Section 2(e)(ii) shall be deemed released from the Trust Estate and the
security interest therein granted to the Indenture Trustee, and the Seller and
the Company shall in no event thereafter be required to refund any such
distributed amounts.
(iii) Following the payment in full of the aggregate outstanding
principal amount of the Notes and of all other amounts owing or to be
distributed hereunder or under the Indenture to Noteholders, the Seller, the
Servicer or the Administrator and the termination of the Trust (including any
Servicing Fee Shortfall and any unpaid Servicing Fee Shortfalls and unpaid
Purchase Premium Amounts), any amount remaining on deposit in the Reserve
Account shall be distributed to the Company. The Company shall in no event be
required to refund any amounts properly calculated, reported and distributed
pursuant to this Section 2(e)(iii).
(iv) (A) In the event that the Servicing Fee for any Monthly Payment
Date exceeds the amount distributed to the Servicer pursuant to Sections
2(d)(iv)(A) or 2(d)(v)(A) and Section 2(k)(ii)(A) on such Monthly Payment
Date, the Administrator shall instruct the Indenture Trustee to withdraw
from the Reserve Account on each Monthly Payment Date an amount equal to
such excess and to distribute such amount to the Servicer.
(B) In the event that the Administration Fee for any Monthly
Payment Date exceeds the amount distributed to the Administrator
pursuant to Sections 2(d)(iv)(B) or 2(d)(v)(B) and Section 2(k)(ii)(B)
on such Monthly Payment Date, the Administrator shall instruct the
Indenture Trustee to withdraw from the Reserve Account on such Monthly
Payment Date an amount equal to such excess, to the extent of funds
available therein after giving effect to paragraph (iv)(A) above, and
to distribute such amount to the Administrator.
(C) For any Quarterly Payment Date, in the event that the Class
A-1 Noteholders' Interest Distribution Amount, the Class A-2
Noteholders' Interest Distribution Amount, the Trust Swap Payment
Amounts, if any, the remainder of any Termination Payment to any Swap
Counterparties to the extent that the Trust is the defaulting party
(other than an Event of Default specified in Section 5(a)(i) of any
related Swap Agreement), the Subordinate Noteholders' Interest
Distribution Amount, the Class A Noteholders' Principal Distribution
Amount and the Subordinate Noteholders' Principal Distribution Amount,
each for such Quarterly Payment Date, exceed the sum of the amount
distributed to the Indenture Trustee for distribution to the
Noteholders and any related Swap Counterparty pursuant to Section
2(d)(v)(C) and Section 2(k)(ii)(C) on such Quarterly Payment Date, the
Administrator shall instruct the Indenture Trustee to withdraw from
the Reserve Account on such Quarterly Payment Date an amount equal to
such excess, to the extent of funds available therein after giving
effect to paragraphs (iv)(A) and (iv)(B) above, and to distribute such
amount as required by Section 2(d)(v)(C) on such Quarterly Payment
Date.
(f) COLLATERAL REINVESTMENT ACCOUNT. (i) During the Revolving Period,
to the extent no funds remain on deposit in the Prefunding Account, the
Administrator shall instruct the Indenture Trustee in writing to withdraw from
the Collateral Reinvestment Account, in each case to the extent of the funds on
deposit therein (A) on each Transfer Date, an amount equal to the Loan Purchase
Amount for the Serial Loans and New Loans transferred to the Eligible Lender
Trustee on behalf of the Issuer on such Transfer Date and to distribute such
amount to or upon the order of the Seller upon satisfaction of the conditions
set forth in Section 2.02 of the Loan Sale Agreement with respect to such
transfer, (B) when and as requested by the Eligible Lender Trustee, in order to
facilitate its origination of Consolidation Loans, to transfer to the order of
the Eligible Lender Trustee an amount, sufficient to prepay in full any Student
Loan that is to be consolidated through such origination with one or more
Financed Student Loans, (C) when and as requested by the Eligible Lender
Trustee, in order to facilitate its funding of the addition of the principal
balance of any Add-on Consolidation Loan to the principal balance of a
Consolidation Loan, an amount sufficient to prepay in full such Add-on
Consolidation Loan, (D) on each Determination Date, to deposit into the
Collection Account an amount equal to the Capitalized Interest Amount for the
Student Loan Rate Accrual Period with respect to the related Monthly Payment
Date and (E) on any Determination Date and in such amounts as the Administrator
may direct, for deposit to the Collection Account for the purposes of increasing
the Monthly Available Funds or the Available Funds, as the case may be.
(ii) On the Quarterly Payment Date on or next occurring after the
termination of the Revolving Period, the Administrator shall instruct the
Indenture Trustee to withdraw from the Collateral Reinvestment Account on such
Quarterly Payment Date an amount equal to the entire remaining amount on deposit
in such account and to distribute such amount pursuant to Section 8.02(e) of the
Indenture.
(g) STATEMENTS TO NOTEHOLDERS. (i) On each Determination Date
preceding a Quarterly Payment Date, the Administrator shall provide to the
Indenture Trustee and any Swap Counterparties (with a copy to the Rating
Agencies) for the Indenture Trustee to forward on such succeeding Quarterly
Payment Date to each Noteholder of record a statement substantially in the form
of Exhibit B setting forth at least the following information as to the Notes:
(A) the amount of such distribution allocable to principal of the
Notes, the amount thereof distributable as principal of the Class A-1
Notes, the Class A-2 Notes and the Subordinate Notes, and the amount
thereof attributable to the Principal Distribution Amount and the
amount thereof attributable to Reserve Account Excess;
(B) the amount of the distribution allocable on such Quarterly
Payment Date to interest on the Class A-1 Notes;
(C) the amount of the distribution allocable on such Quarterly
Payment Date to interest on the Class A-2 Notes;
(D) the amount of the distribution allocable on such Quarterly
Payment Date to interest on the Subordinate Notes;
(E) Reserved
(F) the Pool Balance as of the close of business on the last day
of the preceding Collection Period, after giving effect to payments
allocated to principal reported under clause (A) above;
(G) the aggregate outstanding principal amount of the Class A-1
Notes, the Class A-2 Notes, the Subordinate Notes, the Class A-1 Note
Pool Factor, the Class A-2 Note Pool Factor and the Subordinate Note
Pool Factor as of such Quarterly Payment Date, after giving effect to
payments allocated to principal reported under clause (A) above;
(H) the Note Rate applicable with respect to each distribution
referred to in clauses (B), (C) and (D) above;
(I) the amount of the Servicing Fee paid to the Servicer on such
Quarterly Payment Date and on each Monthly Payment Date following the
immediately preceding Quarterly Payment Date including a breakdown of
the components of the Servicing Fee attributable to each of the items
specified in clauses II(i) through (ix) of Section 3.06 of the
Servicing Agreement and the amount of any Servicing Fee Shortfall for
such Quarterly Payment Date and for each Monthly Payment Date
following the immediately preceding Quarterly Payment Date;
(J) the amount of the Administration Fee paid to the
Administrator on such Quarterly Payment Date and on each Monthly
Payment Date following the immediately preceding Quarterly Payment
Date;
(K) the Trust Swap Payment Amount paid to any Swap Counterparties
on such Quarterly Payment Date, the amount of any Net Trust Swap
Payment Carryover Shortfall for such Quarterly Payment Date, the Trust
Swap Receipt Amounts, if any paid to the Trust on such Quarterly
Payment Date and the amount of any Net Trust Swap Receipt Carryover
Shortfall for such Quarterly Payment Date;
(L) Reserved;
(M) the amount of the aggregate Realized Losses, if any, for such
Collection Period and the balance of Financed Student Loans that are
delinquent in each delinquency period as of the end of such Collection
Period;
(N) the balance of the Reserve Account on such Quarterly Payment
Date, after giving effect to changes therein on such Quarterly Payment
Date and indicating whether on such Quarterly Payment Date or any
Monthly Payment Date since the preceding Quarterly Payment Date any
withdrawal was made therefrom pursuant to Section 2(e)(iv), the amount
of each such withdrawal and the purpose(s) pursuant to Section
2(e)(iv) for each such withdrawal;
(O) For Quarterly Payment Dates during the Revolving Period, the
amount on deposit in the Prefunding Account and indicating whether on
such Quarterly Payment Date or any Monthly Payment Date since the
preceding Quarterly Payment Date any withdrawal was made therefrom
pursuant to Section 2(k)(ii), the amount of each such withdrawal and
the purposes pursuant to Section 2(k)(ii) for each such withdrawal;
(P) for Quarterly Payment Dates during the Revolving Period, the
amount deposited into the Collateral Reinvestment Account during the
related Collection Period and on the immediately preceding Quarterly
Payment Date, and the amount on deposit therein after giving effect to
changes therein on such Quarterly Payment Date;
(Q) for the Quarterly Payment Date on or immediately following
the end of the Revolving Period, (1) the amount remaining on deposit
in the Collateral Reinvestment Account that has not been used to make
Additional Fundings and (2) the amount remaining in the Prefunding
Account;
(R) (i) the principal balance and number of Consolidation Loans
originated on behalf of the Issuer during the related Collection
Period, (ii) the principal balance and number of Add-on Consolidation
Loans the principal balances of which have been added to the Trust
during the related Collection Period and (iii) the amount withdrawn
from the Collateral Reinvestment Account to prepay Student Loans not
held by the Issuer that were consolidated through such origination (or
addition, in the case of Add-on Consolidation Loans) with one or more
Financed Student Loans during such Collection Period;
(S) the principal balance and number of Serial Loans conveyed to
the Issuer during the related Collection Period, the aggregate Loan
Purchase Amounts thereof and the portion thereof attributable to
Purchase Premium Amounts;
(T) for Quarterly Payment Dates during the Revolving Period, the
principal balance and number of New Loans conveyed to the Issuer
during the related Collection Period, the aggregate Loan Purchase
Amounts thereof and the portion thereof attributable to Purchase
Premium Amounts; and
(U) the number and principal balance of Financed Student Loans,
as of the end of the related Collection Period, that are In-School,
Grace, Repayment, Deferral, Forbearance or Consolidation Loans as of
the end of the related Collection Period, and a breakdown by number
and principal balance of Financed Student Loans, by school type,
interest rate and loan program.
Each amount set forth pursuant to clauses (A), (B), (C), (D) and (E) above shall
be expressed as a dollar amount per [ ] of original principal amount of a Note.
A copy of the statements referred to above may be obtained by any Note Owner by
a written request to the Indenture Trustee addressed to the Corporate Trust
Office.
(h) NON-MINISTERIAL MATTERS. With respect to matters that in the
reasonable judgment of the Administrator are non-ministerial, the Administrator
shall not take any action unless within a reasonable time before the taking of
such action, the Administrator shall have notified the Eligible Lender Trustee
and any Swap Counterparties of the proposed action and the Eligible Lender
Trustee shall have consented to it. For the purpose of the preceding sentence,
"non-ministerial matters" shall include, without limitation:
(i) the amendment of or any supplement to the Indenture;
(ii) the initiation of any claim or lawsuit by the Issuer and the
compromise of any action, claim or lawsuit brought by or against the Issuer
(other than in connection with the collection of the Financed Student
Loans);
(iii) the amendment, change or modification of the Basic Documents;
(iv) the appointment of successor Note Registrars, successor Paying
Agents and successor Indenture Trustees pursuant to the Indenture or the
appointment of successor Administrators or Successor Servicers, or the
consent to the assignment by the Note Registrar, Paying Agent or Indenture
Trustee of its obligations under the Indenture; and
(v) the removal of the Indenture Trustee.
(i) INCENTIVE LOANS AND INCENTIVE INTEREST DEPOSITS. The Administrator
may terminate or change the terms of any Incentive Program with respect to a
Financed Student Loan in accordance with the terms of such program, provided
such termination or change is not prohibited by the Higher Education Act, upon
notice to the Eligible Lender Trustee and the Indenture Trustee. Until the
effective date of any termination, the Administrator shall be required to
deposit into the Collection Account the Incentive Interest Deposit with respect
to such Incentive Financed Student Loan as provided below. In the event that the
Administrator fails to make such deposit, the terms of such Incentive Program
shall be such that the Borrower shall be obligated to make such payment and such
Incentive Program shall terminate as to the related loan.
The Administrator shall deposit or cause to be deposited into the
Collection Account no later than the Determination Date succeeding each Monthly
Collection Period and Collection Period the aggregate Incentive Interest
Deposits with respect to Incentive Financed Student Loans in the Trust as of the
last day of such Monthly Collection Period and Collection Period. Such deposits
shall be considered deposits in respect of interest on such Incentive Financed
Student Loans for all purposes of the Basic Documents and shall be deemed to
have been deposited into the Collection Account for all such purposes as of such
last date of such Monthly Collection Period.
(j) The Administrator may, from time to time, direct the Trust to
enter into Swap Agreements or amendments to Swap Agreements substantially in the
form of Exhibit C provided that (1) the Rating Agency Swap Condition is
satisfied with respect to such Swap Agreement and (2) after entering into such
Swap Agreement or amendment to such Swap Agreement, the notional amount of all
of Swap Agreements to which the Trust is a party is less than or equal to the
outstanding principal balance of the Notes.
(k) PREFUNDING ACCOUNT.
(i) On the Closing Date, the Seller shall deposit the Prefunding
Account Closing Date Deposit into the Prefunding Account as required by Section
2.01(b) of the Loan Sale Agreement.
(ii) (A) In the event that the Servicing Fee for any Monthly Payment
Date exceeds the amount distributed to the Servicer pursuant to Sections
2(d)(iv)(A) or 2(d)(v)(A) on such Monthly Payment Date, the Administrator
shall instruct the Indenture Trustee in writing to withdraw from the
Prefunding Account on each Monthly Payment Date an amount equal to such
excess and to distribute such amount to the Servicer.
(B) In the event that the Administration Fee for any Monthly
Payment Date exceeds the amount distributed to the Administrator
pursuant to Sections 2(d)(iv)(B) or 2(d)(v)(B) on such Monthly Payment
Date, the Administrator shall instruct the Indenture Trustee in
writing to withdraw from the Prefunding Account on such Monthly
Payment Date an amount equal to such excess, to the extent of funds
available therein after giving effect to paragraph (iv)(A) above, and
to distribute such amount to the Administrator.
(C) For any Quarterly Payment Date, in the event that the Class
A-1 Noteholders' Interest Distribution Amount, the Class A-2
Noteholders' Interest Distribution Amount, the Trust Swap Payment
Amounts, if any, the remainder of any Termination Payment to any Swap
Counterparties to the extent that the remainder of such Termination
Payment is owed to any Swap Counterparties following a Redemption
Event (as defined in any related Swap Agreement) or the Trust is the
defaulting party (other than an Event of Default specified in Section
5(a)(i) of any related Swap Agreement) and the Subordinate
Noteholders' Interest Distribution Amount, each for such Quarterly
Payment Date, exceed the sum of the amount distributed to the
Indenture Trustee for distribution to the Noteholders and any related
Swap Counterparty pursuant to Section 2(d)(v)(C) on such Quarterly
Payment Date, the Administrator shall instruct the Indenture Trustee
in writing to withdraw from the Prefunding Account on such Quarterly
Payment Date an amount equal to such excess, to the extent of funds
available therein after giving effect to paragraphs (A) and (B) above,
and to distribute such amount as required by Section 2(d)(v)(C) on
such Quarterly Payment Date.
(iii) During the Revolving Period, the Administrator shall instruct
the Indenture Trustee in writing to withdraw from the Prefunding Account, in
each case to the extent of the funds on deposit therein (A) on each Transfer
Date, an amount equal to the Loan Purchase Amount for the Serial Loans and New
Loans transferred to the Eligible Lender Trustee on behalf of the Issuer on such
Transfer Date and to distribute such amount to or upon the order of the Seller
upon satisfaction of the conditions set forth in Section 2.02 of the Loan Sale
Agreement with respect to such transfer, (B) when and as requested by the
Eligible Lender Trustee, in order to facilitate its origination of Consolidation
Loans, to transfer to the order of the Eligible Lender Trustee an amount,
sufficient to prepay in full any Student Loan that is to be consolidated through
such origination with one or more Financed Student Loans, (C) when and as
requested by the Eligible Lender Trustee, in order to facilitate its funding of
the addition of the principal balance of any Add-on Consolidation Loan to the
principal balance of a Consolidation Loan, an amount sufficient to prepay in
full such Add-on Consolidation Loan and (D) on each Determination Date, to
deposit into the Collection Account an amount equal to the Capitalized Interest
Amount for the Student Loan Rate Accrual Period with respect to the related
Monthly Payment Date.
(iv) On the Determination Date relating to the Quarterly Payment Date
on or next occurring after the termination of the Revolving Period, the
Administrator shall instruct the Indenture Trustee to withdraw from the
Prefunding Account on such Determination Date an amount equal to the entire
remaining amount on deposit in such account and to deposit such amount in the
Collection Account.
3. ANNUAL STATEMENT AS TO COMPLIANCE. (a) The Administrator shall
deliver to the Seller, the Eligible Lender Trustee, the Indenture Trustee and
any Swap Counterparties, on or before December 31 of each year beginning [ ], an
Officers' Certificate of the Administrator dated as of September 30 of such
year, stating that (i) a review of the activities of the Administrator during
the preceding 12-month period (or, in the case of the first such certificate,
during the period from the Closing Date to [ ]) and of its performance under
this Agreement has been made under such officers' supervision and (ii) to the
best of such officers' knowledge, based on such review, the Administrator has
fulfilled all its obligations under this Agreement throughout such year or, if
there has been a default in the fulfillment of any such obligation, specifying
each such default known to such officers and the nature and status thereof. The
Indenture Trustee shall send a copy of each such Officer's Certificate and each
report referred to in Section 4 to the Rating Agencies. A copy of such Officers'
Certificate and each report referred to in Section 4 may be obtained by any
Noteholder or Note Owner by a request in writing to the Indenture Trustee
addressed to its Corporate Trust Office, together with evidence satisfactory to
the Indenture Trustee that such Person is one of the foregoing parties.
(b) The Administrator shall deliver to the Eligible Lender Trustee,
the Indenture Trustee, the Servicer, the Rating Agencies and any Swap
Counterparties, promptly after having obtained knowledge thereof, but in no
event later than two Business Days thereafter, written notice in an Officers'
Certificate of the Administrator of any event which with the giving of notice or
lapse of time, or both, would become an Administrator Default under Section 12.
4. ANNUAL INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS' REPORT. The
Administrator shall cause a firm of independent certified public accountants,
which may also render other services to the Administrator, to deliver to the
Seller, the Eligible Lender Trustee, the Indenture Trustee and any Swap
Counterparties on or before December 31 of each year beginning [ ], a report
addressed to the Administrator and to the Seller, the Eligible Lender Trustee,
the Indenture Trustee and any Swap Counterparties (which report may be combined
with other reports required to be delivered by such accountants to the
Administrator, the Eligible Lender Trustee and the Indenture Trustee under the
Basic Documents), to the effect that such firm has examined certain documents
and records relating to the administration of the Financed Student Loans and of
the Trust during the preceding fiscal year ended September 30 (or, in the case
of the first such report, during the period from the Closing Date to [ ]) and
that, on the basis of the accounting and auditing procedures considered
appropriate under the circumstances, such firm is of the opinion that the
administration of the Trust was conducted in compliance with the terms of this
Agreement, except for (i) such exceptions as such firm shall believe to be
immaterial and (ii) such other exceptions as shall be set forth in such report.
The Indenture Trustee shall send a copy of each such report to the Rating
Agencies.
Such report will also indicate that the firm is independent of the
Administrator within the meaning of the Code of Professional Ethics of the
American Institute of Certified Public Accountants.
5. ADMINISTRATOR EXPENSES. The Administrator shall be required to pay
all expenses incurred by it in connection with its activities hereunder,
including fees and disbursements of independent accountants, taxes imposed on
the Administrator and expenses incurred in connection with distributions and
reports to the Noteholders and any Swap Counterparties.
6. RECORDS. The Administrator shall maintain appropriate books of
account and records relating to services performed hereunder, which books of
account and records shall be accessible for inspection by the Issuer at any time
during normal business hours.
7. COMPENSATION. As compensation for the performance of the
Administrator's obligations under this Agreement and as reimbursement for its
expenses related thereto, the Administrator shall be entitled to the
Administration Fee payable monthly in arrears on each Monthly Payment Date which
shall be solely an obligation of the Issuer and payable solely as provided
herein.
8. ADDITIONAL INFORMATION TO BE FURNISHED. The Administrator shall
furnish to the Issuer and any Swap Counterparties from time to time such
additional information regarding the Collateral as the Issuer or any Swap
Counterparties shall reasonably request. Following the time, if any, that any
Swap Counterparties' counterparty ratings fall below "A3" , "A-"or their
equivalent, upon request of a Rating Agency, the Administrator shall furnish to
such Rating Agency, cashflow projections for the Trust.
9. INDEPENDENCE OF THE ADMINISTRATOR. For all purposes of this
Agreement, the Administrator shall be an independent contractor and shall not be
subject to the supervision of the Issuer or the Eligible Lender Trustee with
respect to the manner in which it accomplishes the performance of its
obligations hereunder. Unless expressly authorized by the Issuer, the
Administrator shall have no authority to act for or represent the Issuer or the
Eligible Lender Trustee in any way and shall not otherwise be deemed an agent of
the Issuer or the Eligible Lender Trustee.
10. NO JOINT VENTURE. Nothing contained in this Agreement (i) shall
constitute the Administrator and either the Issuer or the Eligible Lender
Trustee as members of any partnership, joint venture, association, syndicate,
unincorporated business or other separate entity, (ii) shall be construed to
impose any liability as such on any of them or (iii) shall be deemed to confer
on any of them any express, implied or apparent authority to incur any
obligation or liability on behalf of the others.
11. OTHER ACTIVITIES OF ADMINISTRATOR. Nothing herein shall prevent
the Administrator or its Affiliates from engaging in other businesses or, in its
sole discretion, from acting in a similar capacity as an administrator for any
other Person even though such Person may engage in business activities similar
to those of the Issuer, the Eligible Lender Trustee or the Indenture Trustee.
12. ADMINISTRATOR DEFAULT. If any one of the following events (an
"ADMINISTRATOR Default") shall occur and be continuing:
(a) any failure by the Administrator to direct the Indenture
Trustee to make any required distributions from any of the Trust
Accounts, which failure continues unremedied for three Business Days
after written notice of such failure is received by the Administrator
from the Indenture Trustee or the Eligible Lender Trustee or after
discovery of such failure by an officer of the Administrator; or
(b) any failure by the Administrator duly to observe or to
perform in any material respect any other covenants or agreements of
the Administrator set forth in this Agreement or any Basic Documents,
which failure shall (i) materially and adversely affect the rights of
Noteholders and (ii) continues unremedied for a period of 30 days
after the date of discovery of such failure by an officer of the
Administrator or on which written notice of such failure, requiring
the same to be remedied, shall have been given (A) to the
Administrator by the Indenture Trustee or the Eligible Lender Trustee
or (B) to the Administrator and to the Indenture Trustee and the
Eligible Lender Trustee by the Noteholders, representing not less than
25% of the Outstanding Amount of the Notes; or
(c) an Insolvency Event occurs with respect to the Administrator;
or
(d) any representation or warranty made by the Administrator
hereunder or under any Basic Document, or in any certificate furnished
hereunder or under any Basic Document, shall prove to be untrue or
incomplete in any material respect;
then, and in each and every case, so long as the Administrator Default shall not
have been remedied, either the Indenture Trustee, or the Noteholders evidencing
not less than 75% of the Outstanding Amount of the Notes, by notice then given
in writing to the Administrator (and to the Indenture Trustee, the Eligible
Lender Trustee and the Swap Counterparty if given by the Noteholders), may
terminate all the rights and obligations (other than the obligations set forth
in Section 24 hereof) of the Administrator under this Agreement. On or after the
receipt by the Administrator of such written notice, all authority and power of
the Administrator under this Agreement, whether with respect to the Notes or the
Financed Student Loans or otherwise, shall, without further action, pass to and
be vested in the Indenture Trustee or such successor Administrator as may be
appointed under Section 13; and, without limitation, the Indenture Trustee and
the Eligible Lender Trustee are hereby authorized and empowered to execute and
deliver, for the benefit of the predecessor Administrator, as attorney-in-fact
or otherwise, any and all documents and other instruments, and to do or
accomplish all other acts or things necessary or appropriate to effect the
purposes of such notice of termination. The predecessor Administrator shall
cooperate with the successor Administrator, the Indenture Trustee and the
Eligible Lender Trustee in effecting the termination of the responsibilities and
rights of the predecessor Administrator under this Agreement. All reasonable
costs and expenses (including attorneys' fees and expenses) incurred in
connection with such transfer of responsibilities and amending this Agreement to
reflect such succession as Administrator pursuant to this Section shall be paid
by the predecessor Administrator upon presentation of reasonable documentation
of such costs and expenses. Upon receipt of notice of the occurrence of an
Administrator Default, the Eligible Lender Trustee shall give notice thereof to
the Rating Agencies and any Swap Counterparties.
13. APPOINTMENT OF SUCCESSOR. (a) Upon receipt by the Administrator of
notice of termination pursuant to Section 12, or the resignation by the
Administrator in accordance with the terms of this Agreement, the predecessor
Administrator shall continue to perform its functions as Administrator, in the
case of termination, only until the date specified in such termination notice
or, if no such date is specified in a notice of termination, until a successor
Administrator has accepted and assumed the responsibilities of the Administrator
and, in the case of resignation, until the later of (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 legally unable to act as Administrator as
specified in the notice of resignation and accompanying Opinion of Counsel. In
the event of termination hereunder of the Administrator, the Issuer shall
appoint a successor Administrator acceptable to the Indenture Trustee and the
successor Administrator shall accept its appointment by a written assumption in
form acceptable to the Indenture Trustee. In the event that a successor
Administrator has not been appointed at the time when the predecessor
Administrator has ceased to act as Administrator in accordance with this
Section, the Indenture Trustee without further action shall automatically be
appointed the successor Administrator and the Indenture Trustee shall be
entitled to the Administration Fee. Notwithstanding the above, the Indenture
Trustee (with prior written notice to any Swap Counterparties ) shall, if it
shall be unwilling or legally unable so to act, appoint or petition a court of
competent jurisdiction to appoint, as the successor to the Administrator under
this Agreement and the Administration Agreement, any established institution the
regular business of which shall include the servicing of student loans.
(b) Upon appointment, the successor Administrator (including the
Indenture Trustee acting as successor Administrator) shall be the successor in
all respects to the predecessor Administrator and shall be subject to all the
responsibilities, duties and liabilities placed on the predecessor Administrator
that arise thereafter or are related thereto and shall be entitled to an amount
agreed to by such successor Administrator (which shall not exceed the
Administration Fee unless the Swap Counterparties, if any, give their prior
written consent and such compensation arrangements will not result in a
downgrading of the Class A-1 Notes, the Class A-2 Notes or the Subordinate Notes
by any Rating Agency, and all the rights granted to the predecessor
Administrator by the terms and provisions of this Agreement.
(c) The Administrator may not resign unless it is prohibited from
serving as such by law as evidenced by an Opinion of Counsel to such effect
delivered to the Indenture Trustee and the Eligible Lender Trustee.
Notwithstanding the foregoing or anything to the contrary herein or in the Basic
Documents, the Indenture Trustee, to the extent it is acting as successor
Administrator pursuant hereto, shall be entitled to resign to the extent a
qualified successor Administrator has been appointed and has assumed all the
obligations of the Administrator in accordance with the terms of this Agreement
and the Basic Documents.
14. NOTIFICATION TO NOTEHOLDERS. Upon any termination of, or
appointment of a successor to, the Administrator pursuant to Section 12 or 13,
the Indenture Trustee shall give prompt written notice thereof to Noteholders,
any Swap Counterparties and the Rating Agencies (which, in the case of any such
appointment of a successor, shall consist of prior written notice thereof to the
Rating Agencies).
15. WAIVER OF PAST DEFAULTS. The Noteholders of Notes evidencing not
less than a majority of the Outstanding Amount of the Notes may, on behalf of
all Noteholders, waive in writing any default by the Administrator in the
performance of its obligations hereunder and any consequences thereof, except a
default in making any required deposits to or payments from any of the Trust
Accounts (or giving instructions regarding the same) in accordance with this
Agreement. Upon any such waiver of a past default, such default shall cease to
exist, and any Administrator Default arising therefrom shall be deemed to have
been remedied for every purpose of this Agreement to the extent provided in such
waiver. No such waiver shall extend to any subsequent or other default or impair
any right consequent thereto.
16. NOTICES. Any notice, report or other communication given hereunder
shall be in writing (or in the form of facsimile notice, followed by written
notice) and addressed as follows:
(a) if to the Issuer, to
ASSET BACKED SECURITIES CORPORATION
Student Loan Trust [ ]
[ ]
[ ]
[ ]
[ ]
with a copy to the Eligible Lender Trustee
at the Corporate Trust Office of the
Eligible Lender Trustee
(b) if to the Eligible Lender Trustee, to
[
[ ]
[ ]
[ ]
[ ]
[ ]
[ ]
(c) if to the Administrator, to
[ ]
[ ]
[ ]
[ ]
[ ]
[ ]
with a copy to
[ ]
[ ]
[ ]
[ ]
[ ]
[ ]
[ ]
(d) if to the Indenture Trustee, to
[ ]
[ ]
[ ]
Attention: [ ]
[ ]
Telephone: [ ]
Facsimile: [ ]
(e) if to any Swap Counterparties, to the address
specified in any Swap Agreements
or to such other address as any party shall have provided to the other parties
in writing. Any notice required to be in writing hereunder shall be deemed given
if such notice is mailed by certified mail, postage prepaid, or hand-delivered
to the address of such party as provided above.
17. AMENDMENTS. This Agreement may be amended from time to time by a
written amendment duly executed and delivered by the Issuer, the Administrator
and the Indenture Trustee, with the prior written consent of the Eligible Lender
Trustee and any Swap Counterparties, but without the consent of the Noteholders,
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of the Noteholders; PROVIDED, HOWEVER, that such amendment
will not, in an Opinion of Counsel obtained on behalf of the Issuer and
satisfactory to the Indenture Trustee and the Eligible Lender Trustee,
materially and adversely affect the interest of any Noteholder. This Agreement
may also be amended by the Issuer, the Administrator and the Indenture Trustee
with the prior written consent of the Eligible Lender Trustee, any Swap
Counterparties and the Noteholders of at least a majority in the Outstanding
Amount of the Notes for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Agreement or of
modifying in any manner the rights of Noteholders; PROVIDED, HOWEVER, that no
such amendment may (i) increase or reduce in any manner the amount of, or
accelerate or delay the timing of, collections of payments with respect to the
Financed Student Loans or distributions that are required to be made for the
benefit of the Noteholders or (ii) reduce the aforesaid percentage of the
Noteholders which are required to consent to any such amendment, without the
consent of all Outstanding Noteholders. Prior to the execution of any such
amendment, the Administrator shall furnish written notification of the substance
of such amendment to each of the Rating Agencies.
18. ASSIGNMENT. Notwithstanding anything to the contrary contained
herein, except as provided in Section 13 or 25 of this Agreement concerning the
resignation of the Administrator, this Agreement may not be assigned by the
Administrator.
19. GOVERNING LAW. This Agreement shall be construed in accordance
with the laws of the [ ], without reference to its conflict of law provisions,
and the obligations, rights and remedies of the parties hereunder shall be
determined in accordance with such laws.
20. HEADINGS. The section headings hereof have been inserted for
convenience of reference only and shall not be construed to affect the meaning,
construction or effect of this Agreement.
21. COUNTERPARTS. This Agreement may be executed in counterparts, each
of which when so executed shall together constitute but one and the same
agreement.
22. SEVERABILITY. Any provision of this Agreement that is prohibited
or unenforceable in any jurisdiction shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof and any such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other jurisdiction.
23. NOT APPLICABLE TO [ ] IN OTHER CAPACITIES. Nothing in this
Agreement shall affect any obligation [ ] may have in any other capacity under
the Basic Documents.
24. LIABILITY OF ADMINISTRATOR; INDEMNITIES. The Administrator shall
be liable in accordance herewith only to the extent of the obligations
specifically undertaken by the Administrator under this Agreement.
The Administrator shall indemnify, defend and hold harmless the
Issuer, the Eligible Lender Trustee, the Indenture Trustee, the Servicer, any
Swap Counterparties and the Noteholders and any of the officers, directors,
employees and agents of the Issuer, the Eligible Lender Trustee, the Indenture
Trustee and the Servicer from and against any and all costs, expenses, losses,
claims, damages and liabilities to the extent that such cost, expense, loss,
claim, damage or liability arose out of, or was imposed upon any such Person
through, the negligence, willful misfeasance or bad faith of the Administrator
in the performance of its duties under this Agreement or by reason of reckless
disregard of its obligations and duties hereunder or thereunder.
The Administrator shall pay reasonable compensation to the Indenture
Trustee and shall reimburse the Indenture Trustee for all reasonable expenses,
disbursements and advances, and indemnify, defend and hold harmless the
Indenture Trustee and its officers, directors, employees and agents from and
against all costs, expenses, losses, claims, damages and liabilities, to the
extent and in the manner provided in, and subject to the limitations of, Section
6.07 of the Indenture.
For purposes of this Section, in the event of the termination of the
rights and obligations of the Administrator (or any successor thereto pursuant
to Section 25) as Administrator pursuant to Section 12 or a resignation by such
Administrator pursuant to this Agreement, such Administrator shall be deemed to
be the Administrator pending appointment of a successor Administrator pursuant
to Section 13.
Indemnification under this Section shall survive the resignation or
removal of the Eligible Lender Trustee or the Indenture Trustee or the
termination of this Agreement and shall include reasonable fees and expenses of
counsel and expenses of litigation. If the Administrator shall have made any
indemnity payments pursuant to this Agreement and the Person to or on behalf of
whom such payments are made thereafter collects any of such amounts from others,
such Person shall promptly repay such amounts to the Administrator, without
interest.
25. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE OBLIGATIONS OF,
ADMINISTRATOR. Any Person (a) into which the Administrator may be merged or
consolidated, (b) which may result from any merger or consolidation to which the
Administrator shall be a party or (c) which may succeed to the properties and
assets of the Administrator substantially as a whole, shall be the successor to
the Administrator without the execution or filing of any document or any further
act by any of the parties to this Agreement; PROVIDED, HOWEVER, that the
Administrator hereby covenants that it will not consummate any of the foregoing
transactions except upon satisfaction of the following: (i) the surviving
Administrator, if other than [ ], executes an agreement of assumption to perform
every obligation of the Administrator under this Agreement, (ii) immediately
after giving effect to such transaction, no representation or warranty made
pursuant to Section 1 shall have been breached and no Administrator Default, and
no event that, after notice or lapse of time or both would become an
Administrator Default, shall have occurred and be continuing, (iii) the
Administrator shall have delivered to the Eligible Lender Trustee, the Indenture
Trustee and any Swap Counterparties an Officers' Certificate and an Opinion of
Counsel each stating that such consolidation, merger or succession and such
agreement of assumption comply with this Section and that all conditions
precedent, if any, provided for in this Agreement relating to such transaction
have been complied with, and that the Rating Agency Condition shall have been
satisfied with respect to such transaction, (iv) the surviving Administrator
shall have a consolidated net worth at least equal to that of the predecessor
Administrator, (v) such transaction will not result in a material adverse
federal or state tax consequence to the Issuer or the Noteholders and (vi)
unless [ ] is the surviving entity, the Administrator shall have delivered to
the Eligible Lender Trustee and the Indenture Trustee an Opinion of Counsel
either (A) stating that, in the opinion of such counsel, all financing
statements and continuation statements and amendments thereto have been executed
and filed that are necessary fully to preserve and protect the interests of the
Eligible Lender Trustee, the Indenture Trustee and any Swap Counterparties,
respectively, in the Financed Student Loans and reciting the details of such
filings, or (B) stating that, in the opinion of such counsel, no such action
shall be necessary to preserve and protect such interests.
26. LIMITATION ON LIABILITY OF ADMINISTRATOR AND OTHERS. Neither the
Administrator nor any of its directors, officers, employees or agents shall be
under any liability to the Issuer, the Noteholders, the Indenture Trustee, the
Eligible Lender Trustee or any Swap Counterparties, except as provided under
this Agreement, for any action taken or for refraining from the taking of any
action pursuant to this Agreement or for errors in judgment; PROVIDED, HOWEVER,
that this provision shall not protect the Administrator or any such person
against any liability that would otherwise be imposed by reason of willful
misfeasance, bad faith or negligence in the performance of its duties or by
reason of reckless disregard of obligations and its duties under this Agreement.
The Administrator and any of its directors, officers, employees or agents may
rely in good faith on the advice of counsel or on any document of any kind PRIMA
FACIE properly executed and submitted by any Person respecting any matters
arising hereunder.
Except as provided in this Agreement, the Administrator shall not be
under any obligation to appear in, prosecute or defend any legal action that
shall not be incidental to its duties to administer the Financed Student Loans
and the Trust in accordance with this Agreement, and that in its opinion may
involve it in any expense or liability; PROVIDED, HOWEVER, that the
Administrator may undertake any reasonable action that it may deem necessary or
desirable in respect of this Agreement and the other Basic Documents and the
rights and duties of the parties to this Agreement and the Basic Documents and
the interests of the Noteholders under the Indenture.
27. [ ] NOT TO RESIGN AS ADMINISTRATOR. Subject to the provisions of
Section 25, [ ] shall not resign from the obligations and duties imposed on it
as Administrator under this Agreement except upon determination that the
performance of its duties under this Agreement shall no longer be permissible
under applicable law or shall violate any final order of a court or
administrative agency with jurisdiction over [ ] or its properties. Notice of
any such determination permitting the resignation of [ ] shall be communicated
to the Eligible Lender Trustee, the Indenture Trustee and any Swap
Counterparties at the earliest practicable time (and, if such communication is
not in writing, shall be confirmed in writing at the earliest practicable time)
and any such determination shall be evidenced by an Opinion of Counsel to such
effect delivered to the Eligible Lender Trustee, the Indenture Trustee and any
Swap Counterparties concurrently with or promptly after such notice. No such
resignation shall become effective until the Indenture Trustee or a successor
Administrator shall have assumed the responsibilities and obligations of [ ] in
accordance with Section 13.
28. LIMITATION OF LIABILITY OF ELIGIBLE LENDER TRUSTEE AND INDENTURE
TRUSTEE. (a) Notwithstanding anything contained herein to the contrary, except
as provided in subsection (c) hereof, this instrument has been countersigned by
[ ] not in its individual capacity but solely in its capacity as Eligible Lender
Trustee of the Issuer and in no event shall [ ] in its individual capacity or
any Owner of the Issuer have any liability for the representations, warranties,
covenants, agreements or other obligations of the Issuer hereunder, as to all of
which recourse shall be had solely to the assets of the Issuer. For all purposes
of this Agreement, in the performance of any duties or obligations of the Issuer
thereunder, the Eligible Lender Trustee shall be subject to, and entitled to the
benefits of, the terms and provisions of Articles VI, VII and VIII of the Trust
Agreement.
(b) Notwithstanding anything contained herein to the contrary, except
as provided in subsection (c) hereof, this Agreement has been countersigned by [
] not in its individual capacity but solely as Indenture Trustee and in no event
shall [ ] have any liability for the representations, warranties, covenants,
agreements or other obligations of the Issuer hereunder or in any of the
certificates, notices or agreements delivered pursuant hereto, as to all of
which recourse shall be had solely to the assets of the Issuer.
(c) Notwithstanding any other provision in this Agreement or the other
Basic Documents, nothing in this Agreement or the other Basic Documents shall be
construed to limit the legal responsibility of the Eligible Lender Trustee or
the Indenture Trustee, to the U.S. Secretary of Education or a Guarantor for any
violations of statutory or regulatory requirements that may occur with respect
to loans held by the Eligible Lender Trustee or the Indenture Trustee pursuant
to, or to otherwise comply with their obligations under, the Higher Education
Act or implementing regulations.
29. NOTICE OF TERMINATION OF TRUST. As described in Article IX of the
Trust Agreement, notice of any termination of the Trust shall be given by the
Administrator to the Eligible Lender Trustee and the Indenture Trustee as soon
as practicable after the Administrator has received notice thereof.
30. THIRD-PARTY BENEFICIARIES. The Eligible Lender Trustee and any
Swap Counterparties are third-party beneficiaries to this Agreement and are
entitled to the rights and benefits hereunder and may enforce the provisions
hereof as if they were parties hereto; provided, however, that in the case of
any Swap Counterparties, such right to enforcement and the right to provide
consents or waivers pursuant to the provisions hereof or to take other actions
as provided herein are conditioned upon its not being in default under any Swap
Agreements.
31. CONSENTS. With respect to any action to be taken hereunder that
requires the consent of a party hereto or of the Eligible Lender Trustee or any
Swap Counterparties, such consent shall not be unreasonably withheld, delayed or
conditioned.
[Signatures Follow on Next Page]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered as of the day and year first above written.
ASSET BACKED SECURITIES CORPORATION
STUDENT LOAN TRUST [ ]
By: [ ], not in its
individual capacity but solely
as Eligible Lender Trustee
By: [ ]
Name: [ ]
Title: [ ]
[ ], not in its
individual capacity but solely
as Indenture Trustee
By: [ ]
Name: [ ]
Title: [ ]
[ ]
, as Administrator
By: [ ]
Name: [ ]
Title: [ ]
[ ]
EXHIBIT A TO THE
ADMINISTRATION AGREEMENT
POWER OF ATTORNEY
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
KNOW ALL MEN BY THESE PRESENTS, that [ ], a national bank, not in its
individual capacity but solely as eligible lender trustee ("ELIGIBLE LENDER
TRUSTEE") for the ASSET BACKED SECURITIES CORPORATION Student Loan Trust [ ]
(the "TRUST"), does hereby make, constitute and appoint [ ], as Administrator
under the Administration Agreement (as defined below), and its agents and
attorneys, as Agents and Attorneys-in-Fact to execute on behalf of Eligible
Lender Trustee or the Trust all such documents, reports, filings, instruments,
certificates and opinions as it should be the duty of Eligible Lender Trustee or
the Trust to prepare, file or deliver pursuant to the Related Documents (as
defined in the Administration Agreement) or pursuant to Section 5.02 of the
Trust Agreement (as defined in the Administration Agreement), including without
limitation, to appear for and represent Eligible Lender Trustee and the Trust in
connection with the preparation, filing and audit of any federal, state and
local tax returns pertaining to the Trust, and with full power to perform any
and all acts associated with such returns and audits that the Eligible Lender
Trustee could perform, including without limitation, the right to distribute and
receive confidential information, defend and assert positions in response to
audits, initiate and defend litigation, and to execute waivers of restriction on
assessments of deficiencies, consents to the extension of any statutory or
regulatory time limit, and settlements. For the purpose of this Power of
Attorney, the term "Administration Agreement" means the Administration Agreement
dated as of [ ], among the Trust, [ ], as Administrator, and [ ], as Indenture
Trustee, as such may be amended from time to time.
All powers of attorney for this purpose heretofore filed or executed
by Eligible Lender Trustee are hereby revoked.
EXECUTED as of the [ ]
[ ],
not in its individual capacity
but solely as Eligible Lender Trustee
By:____________________________________
Name:
Title:
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
Before me, the undersigned authority, on this day personally appeared
[ ] known to me to be the person whose name is subscribed to the foregoing
instrument, and acknowledged to me that such person signed the same for the
purposes and considerations therein expressed.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this [ ].
_______________________________________
Notary Public in and for the
State of New York
_______________________________________
Printed Name of Notary Public
Commission Expires ___________________
EXHIBIT B
TO THE
ADMINISTRATION AGREEMENT
Form of Noteholders' Statement pursuant to Section 2(g) of Administration
Agreement. Capitalized terms used herein are defined in Appendix A thereto. It
should be noted, however, that while all the information listed below shall be
included in each Noteholders' Statement, the presentation thereof may vary from
that given below.
Quarterly Payment Date:
(i) Amount of principal being paid or distributed:
Class A-1 [ ]*
([ ]
* per $1,000
original principal
amount of Notes)
Class A-2 [ ]*
([ ]
* per $1,000
original principal
amount of Notes)
Subordinate [ ]*
([ ]
* per $1,000
original principal
amount of Notes)
* Portion of each such amount attributable to Reserve Account Excess: [ ]
(ii) Amount of interest being paid or distributed:
Class A-1 [ ] ([ ]
$1,000 original
principal amount
of Notes)
Class A-2 [ ] ([ ] per
$1,000 original
principal amount
of Notes)
Subordinate [ ] ([ ] per
$1,000 original
principal amount
of Notes)
(iii) Reserved
(iv) Reserved
(v) Pool Balance at end of related Collection Period:
[ ]
(vi) After giving effect to distributions on this Quarterly
Payment Date:
(a) (1) outstanding principal amount of Class A-1 Notes: [ ]
(2) Class A-1 Note Pool Factor: [ ]
(b) (1) outstanding principal amount of Class A-2 Notes: [ ]
(2) Class A-2 Note Pool Factor: [ ]
(c) (1) outstanding principal amount of Subordinate Notes: [ ]
(2) Subordinate Note Pool Factor: [ ]
(vii) Applicable Interest Rate:
In general:
(1) Three-Month LIBOR for the LIBOR Reset Period since the
previous Quarterly Payment Date was [ ]%;
Class A-1 Note Rate: [ ]%
Class A-2 Note Rate: [ ]%
Subordinate Note Rate: [ ]%
(viii) Amount of Servicing Fee for related Collection Period
including a breakdown of the components of the Servicing Fee
attributable to each of the items specified in clauses II(i)
through (ix) of Section 3.06 of the Servicing Agreement and
the amount of any Servicing Fee Shortfall for such Quarterly
Payment Date and for each Monthly Payment Date following the
immediately preceding Quarterly Payment Date:
(ix) Amount of Administration Fee for related Collection Period:
[ ] ([ per $1,000 original principal amount of Notes)
(x) the Trust Swap Payment Amount paid to each Swap
Counterparty, if any on such Quarterly Payment Date: [ ] the
amount of any Net Trust Swap Payment Carryover Shortfall
with respect to each Swap Agreement, if any for such
Quarterly Payment Date: [ ] the Trust Swap Receipt Amount
with respect to each Swap Agreement, if any paid to the
Trust on such Quarterly Payment Date: [ ]; the Net Trust
Swap Receipt Carryover Shortfall with respect to each Swap
Agreement, if any for such Quarterly Payment Date: [ ]
(xi) Reserved
(xii) Aggregate amount of Realized Losses (if any) for the related
Collection Period: [ ]
(xiii) Financed Student Loans delinquent at end of related
Collection Period: [ ] ; number of delinquent loans: [ ];
aggregate unpaid principal balance of delinquent loans: [ ]
(xiv) Withdrawal from Reserve Account on related Quarterly Payment
Date (other than Reserve Account Excess) and on any Monthly
Payment Date since the preceding Quarterly Payment Date
(list each withdrawal separately): [ ] (purpose of each
withdrawal).
Reserve Account Excess on related Quarterly Payment Date [ ]
Principal balance of Notes to be paid to reach Parity Date:
[ ]
(xv) Reserved
(xvi) Deposits to Collateral Reinvestment Account during related
Collection Period: [ ]; amount to be deposited on related
Quarterly Payment Date: [ ]
Withdrawal from Collateral Reinvestment Account
during related Collection Period: [ ]
(xvii) Amount in the Reserve Account (after giving effect to
(xiv)): [ ]
(xviii) Amount in the Collateral Reinvestment Account (after giving
effect to (xvi)): [ ]
(xix) Consolidation Loans: [ ] loans with aggregate principal
balances of [ ] were originated during related Collection
Period; withdrawal from Collateral Reinvestment Account to
fund origination of Consolidation Loans during related
Collection Period: [ ]
(xx) Add-on Consolidation Loans: [ ] loans with aggregate
principal balances of [ ] were added to the principal
balance of a Consolidation Loan; withdrawal from Collateral
Reinvestment Account to fund the addition of the principal
balances of Add-on Consolidation Loans during the related
Collection Period: [ ]
(xxi) Serial Loans: [ ] loans with aggregate principal balances of
[ ] (portion represented by Purchase Premium Amounts ) were
purchased during the related ------- Collection Period.
(xxii) New Loans: _______ loans with aggregate principal balances
of _______ (portion represented by Purchase Premium Amounts
[ ]) were purchased during the related Collection Period.
(xxiii) Withdrawal from the Prefunding Account during the related
Collection Period (list each withdrawal pursuant to Section
2(k)(ii) separately): [ ] (purpose of each withdrawal)
(xxiv) Amount in the Prefunding Account (after giving effect
(xxiii)).
(xxv) Financed Student Loans in the following categories as of the
end of the related Collection Period:
Weighted Average Number of Principal
Interest Rate Loans Balance
STATUS TYPE:
-----------
In-School
Grace
Repayment
Forbearance
Deferment
Delinquencies
Claims Filed Awaiting Payment
DELINQUENCIES:
-------------
30-60 Days
61-90 Days
91-120 Days
More than 120 Days Delinquent
Claims Filed Awaiting Payment
LOAN TYPE:
---------
Xxxxxxxx Loans
SLS Loans
PLUS Loans
Consolidation Loans
SCHOOL TYPE:
-----------
Traditional
Vocational/Proprietary
EXHIBIT C
TO THE
ADMINISTRATION AGREEMENT
Form of Swap Agreement pursuant to Section 2(j) of the Administration Agreement.
FORM OF SCHEDULE
TO THE MASTER AGREEMENT
dated as of [ ]
between
[ ]
("Party A"),
a corporation organized under the laws
of [ ]
and
ASSET BACKED SECURITIES CORPORATION STUDENT LOAN TRUST [ ],
("Party B")
a Delaware business trust.
Part 1. TERMINATION PROVISIONS
In this Agreement:-
(a) "SPECIFIED ENTITY" means in relation to Party A for the purpose of:-
SECTION 5(A)(V) Not Applicable.
SECTION 5(A)(VI) Not Applicable.
SECTION 5(A)(VII) Not Applicable.
SECTION 5(B)(IV) Not Applicable.
and in relation to Party B for the purpose of:-
SECTION 5(A)(V) Not Applicable.
SECTION 5(A)(VI) Not Applicable.
SECTION 5(A)(VII) Not Applicable.
SECTION 5(B)(IV) Not Applicable.
(b) "SPECIFIED TRANSACTION" will have the meaning specified in Section 14
of this Agreement.
(c) "ADDITIONAL TERMINATION EVENT" will not apply to Party A and will
apply, with respect to Redemption Event only, to Party B. The
occurrence of a Redemption Event will constitute an Additional
Termination Event in respect of which Party B will be the sole
Affected Party.
(d) The provisions of Section 5(a) and Section 5(b) will apply to Party A
and to Party B as follows:-
The designation below of an Event of Default as being
"Applicable" to a specific party means that upon the occurrence and
continuation of such an Event of Default with respect to such party,
the other party shall have the right of a Non-defaulting Party to
designate an Early Termination Date for the Sole Transaction (as
defined below) under Section 6 of this Agreement, and conversely, the
designation of an Event of Default as being "Not Applicable" to a
party means that upon the occurrence and continuation of such an Event
of Default with respect to such party, the other party shall not have
the right to designate an Early Termination Date for the Sole
Transaction with respect to such event under Section 6 of this
Agreement.
SECTION 5(A) PARTY A PARTY B
(i) "Failure to Pay or Deliver" Applicable.
"Failure to Pay or Deliver" is Applicable to Party B; provided that Party B has
funds available to make payments in accordance with the terms of the Indenture
and the Trustee has failed to make any such payments in violation of the terms
of the Indenture.
(ii) "Breach of Agreement" Applicable. Not Applicable.
(iii) "Credit Support Default" Applicable. Not Applicable.
(iv) "Misrepresentation" Applicable. Not Applicable.
(v) "Default under Specified Transaction" Not Applicable. Not Applicable.
(vi) "Cross Default" Not Applicable. Not Applicable.
(vii) "Bankruptcy" Applicable. Applicable.
(viii) "Merger Without Assumption" Applicable. Not Applicable.
(ix) "Additional Event of Default" Not Applicable. Applicable
specified in Part 1(h) (Acceleration
of Notes)
SECTION 5(B)
Neither party shall be entitled to designate an Early
Termination Date as a result of the occurrence and continuation of an
event described in Section 5(b)(iii) (Tax Event Upon Merger).
(e) PAYMENTS ON EARLY TERMINATION. For the purpose of Section 6(e):-
(i) Except as provided in Appendix I (Redemption of Notes)
Market Quotation will apply.
(ii) The Second Method will apply.
(f) "TERMINATION CURRENCY" means United States Dollars ("USD").
(g) The "AUTOMATIC EARLY TERMINATION" provisions of Section 6(a) will not
apply to Party A or Party B.
(h) ADDITIONAL EVENT OF DEFAULT. Section 5(a) of the Agreement is hereby
amended by: (i) deleting the word "or" at the end of Section
5(a)(vii), (ii) deleting the period at the end of Section 5(a)(viii)
and adding "; or" at the end thereof and (iii) adding the following
language at the end of Section 5(a):
"(ix) ADDITIONAL EVENT OF DEFAULT. The principal of any
class of Notes shall have been declared or become immediately due and
payable in accordance with the terms of the Indenture (an
"Acceleration of Notes") following an "event of default" thereunder
(it being understood that such event will constitute an Event of
Default solely with respect to ASSET BACKED SECURITIES CORPORATION
STUDENT LOAN TRUST [ ]."
Part 2. TAX REPRESENTATIONS.
(a) Payer Tax Representations. For the purpose of Section 3(e) of this
Agreement, Party A and Party B will each make the following representation:
It is not required by any applicable law, as modified by the
practice of any relevant governmental revenue authority, of any
Relevant Jurisdiction to make any deduction or withholding for or on
account of any Tax from any payment (other than interest under Section
2(e), 6(d)(ii) or 6(e) of this Agreement) to be made by it to the
other party under this Agreement. In making this representation, it
may rely on (i) the accuracy of any representations made by the other
party pursuant to Section 3(f) of this Agreement, (ii) the
satisfaction of the agreement contained in Section 4(a)(i) or
4(a)(iii) of this Agreement, and the accuracy and effectiveness of any
document provided by the other party pursuant to Section 4(a)(i) or
4(a)(iii) of this Agreement and (iii) the satisfaction of the
agreement of the other party contained in Section 4(d) of this
Agreement, provided that it shall not be a breach of this
representation where reliance is placed on clause (ii) and the other
party does not deliver a form or document under Section 4(a)(iii) by
reason of material prejudice to its legal or commercial position.
(b) Payee Tax Representations. For the purpose of Section 3(f) of this
Agreement, Party A and Party B make the following representation:-
(i) The following representation will apply to Party A:-
Each payment received or to be received by it in connection
with this Agreement will be effectively connected with its conduct of
a trade or business in the Specified Jurisdiction.
"Specified Jurisdiction" means the United States of America.
(ii) The following representation will apply to Party B:-
It is a business trust organized under the laws of the State
of Delaware.
Part 3. AGREEMENT TO DELIVER DOCUMENTS.
For the purpose of Section 4(a)(i) and Section 4(a)(ii) of this Agreement, Party
A and Party B each agree to deliver the following documents, as applicable:-
(a) Tax forms, documents or certificates to be delivered are:
PARTY REQUIRED TO FORM, DOCUMENT DATE BY WHICH
DELIVER DOCUMENT OR CERTIFICATE TO BE DELIVERED
Party A An executed U.S. Internal (i) Before the first
Revenue Service 4224 Form Payment Date under this
(or any successor thereto) Agreement, (ii) promptly
upon reasonable demand by
Party B, and (iii) promptly
upon learning that any such
Form previously provided by
Party A has become obsolete
or incorrect.
Party B An executed U.S. Internal (i) Before the first Payment
Revenue Service Form W-9 Date under this Agreement,
(or any successor thereto), (ii) promptly upon reasonable
including appropriate demand by Party A, and (iii)
attachments. promptly upon learning that
any such form previously
provided by Party B has become
obsolete or incorrect
(b) Other documents to be delivered are:
PARTY REQUIRED FORM, DOCUMENT OR DATE BY WHICH TO BE COVERED BY
TO DELIVER DOCUMENT CERTIFICATE DELIVERED SECTION 3(D)
------------------- ----------------- ------------------- ------------
Party A An opinion of counsel to Upon execution of this No
Party A substantially in Agreement.
the form of Exhibit A to
this Schedule.
Party A An incumbency certificate Upon execution of this Yes
with respect to the Agreement.
signatory of this
Agreement.
Party B Executed copies of all Upon execution of this Yes, with respect to
Basic Documents and all Agreement. certificates and
opinions required by the other factual
Underwriting Agreement statements;
No, with
respect to
opinions and
agreements.
Party B An executed original of Upon execution of this Yes.
the Officer's Certificate Agreement.
of ASSET BACKED SECURITIES
CORPORATION, substantially
in the form of Exhibit C and
reasonably satisfactory in form
and substance to Party A.
Part 4. MISCELLANEOUS.
(a) ADDRESSES FOR NOTICES. For the purpose of Section 12(a):
Address for notices or communications to Party A:
Address: [ ]
[ ]
[ ]
Attention: [ ]
Telephone: [ ]
Facsimile: [ ]
Address for notices or communications to Party B:-
Address: ASSET BACKED SECURITIES CORPORATION
STUDENT LOAN TRUST [ ]
[ ]
[ ]
[ ]
[ ]
[ ]
[ ]
[ ]
with copies to:
Address: ASSET BACKED SECURITIES CORPORATION
STUDENT LOAN TRUST [ ]
[ ]
[ ]
[ ]
[ ]
[ ]
[ ]
[ ]
[ ]
[ ]
Address: [ ]
[ ]
[ ]
[ ]
Address for notices or communications to Moody's:
Address: Xxxxx'x Investors Service, Inc.
00 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: ABS Monitoring Department
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Address for notices or communications to Fitch:-
Address: Fitch, Inc.
Xxx Xxxxx Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Asset Backed Monitoring Unit
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Address for notices or communications to S&P:-
Address: Standard & Poor's, a division of The
XxXxxx-Xxxx Companies, Inc.
00 Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Notices under this Agreement and the Transaction shall be sent to
Xxxxx'x, Fitch and S&P only to the extent specifically required in the
transaction confirmation.
(b) PROCESS AGENT. For the purpose of Section 13(c):
Party A appoints as its Process Agent:
[ ]
[ ]
[ ]
Party B appoints as its Process Agent:
[ ]
[ ]
[ ]
Telephone: [ ]
Facsimile: [ ]
(c) OFFICES. The provisions of Section 10(a) will not apply to Party A and
will not apply to Party B.
(d) MULTIBRANCH PARTY. For the purpose of Section 10(c) of this
Agreement:--
Party A is not a Multibranch Party.
Party B is not a Multibranch Party.
(e) CALCULATION AGENT. The Calculation Agent shall be Party A. In the case
of a dispute involving any calculation made by the Calculation Agent
under this Agreement (each, a "Disputed Calculation"), Party A and
Party B will appoint a mutually acceptable Reference Bank or Reference
Dealer, as applicable, who will (i) with respect to any calculation
relating to a Terminated Transaction, determine the Disputed
Calculation by reference to the methodology set forth in the
definition of Market Quotation and (ii) with respect to any other
calculation, determine the Disputed Calculation by reference to a
mutually acceptable methodology. If such Reference Bank or Reference
Dealer determines that no quotations are available for a particular
Disputed Calculation, then the Calculation Agent's original
calculations will be used for that Disputed Calculation. All
calculations made by the Calculation Agent in accordance with this
Part 4(e) shall be binding absent manifest error.
(f) CREDIT SUPPORT DOCUMENT. Details of any Credit Support Document:-
In the case of Party A: Not Applicable.
In the case of Party B: Not Applicable.
(g) CREDIT SUPPORT PROVIDER.
Credit Support Provider means in relation to Party A: Not Applicable.
Credit Support Provider means in relation to Party B: Not Applicable.
(h) "AFFILIATE" will have the meaning specified in Section 14 of this
Agreement.
(i) GOVERNING LAW. THIS AGREEMENT WILL BE GOVERNED BY, CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT
REGARD TO CHOICE OF LAW DOCTRINE).
(j) NETTING OF PAYMENTS. Section 2(c)(ii) will not apply.
(k) ACCOUNT DETAIL:
Payments to Party A: The Account described in the related Confirmation
Payments to Party B: The Account described in the related Confirmation
Part 5. OTHER PROVISIONS.
(a) CONFIRMATION. Each Confirmation supplements, forms part of, and will be
read and construed as one with this Agreement. The parties hereby agree
and acknowledge that only one Transaction (the "Sole Transaction") will
be governed by this Agreement, the Confirmation of the Sole Transaction
is dated [ ] and bears reference number [ ], and the parties will not
enter into any additional Transactions governed by this Agreement or
otherwise.
(b) EARLY TERMINATION.
(1) Section 6(b)(ii) is hereby amended by adding at the end of the
first paragraph the following:
", provided that the party seeking to make the transfer to avoid
a Termination Event shall deliver to Party B (in the case of
transfers by Party A) or to Party A (in the case of transfers by
Party B) written confirmation from each Rating Agency then rating
any class of Notes that such transfer will not result in its
then-current rating of each class of Notes being withdrawn or
lowered."
(2) Notwithstanding anything to the contrary in this Agreement, if
the Early Termination Date of the Sole Transaction occurs or is
effectively designated, Party A and Party B agree as follows:
(i) The Calculation Agent shall calculate an amount that would
be payable to or by Party B under this Agreement in respect of
such Early Termination Date (such amount, including any Trust
Swap Payment Amount or Trust Swap Receipt Amount constituting any
portion thereof, the "Termination Payment").
(ii) To the extent that Party A is required to pay the
Termination Payment to Party B, Party A shall pay such amount in
accordance with the terms of this Agreement.
(iii) To the extent that Party B is required to pay the
Termination Payment to Party A where:
(A) Party B is the Defaulting Party (provided, however,
that to the extent that Party B is the Defaulting Party with
respect to an Event of Default specified in Section 5(a)(i) of
the Agreement (Failure to Pay or Deliver) this priority shall
apply only with respect to the Trust Swap Payment Amount (and not
the remainder of the Termination Payment)), Party B shall pay
such amount in accordance with Section 8.02(c)(i), Section
8.02(e)(i) (to the extent of any Net Trust Swap Payment Carryover
Shortfalls included in such Termination Payment), Section 10.01
or Section 5.04(b), priority "SECOND," of the Indenture or
Section 2(e)(iv)(C) of the Administration Agreement, as
applicable.
(B) Party A is the Defaulting Party, the Early Termination
Date arises from a Termination Event (other than an Additional
Termination Event) or Party B is the Defaulting Party with
respect to an Event of Default specified in Section 5(a)(i)
(exclusive of any Trust Swap Payment Amount paid pursuant to
Clause (A)), Party B shall pay such Termination Payment in
accordance with Section 8.02(d)(viii), Section 8.02(e)(i) (to the
extent of any Net Trust Swap Payment Carryover Shortfalls
included in such Termination Payment), Section 10.01 or Section
5.04(b), priority "ELEVENTH," of the Indenture.
(C) Party B replaces Party A with a successor to Party A,
Party B and Party A agree to cause the successor to Party A to
pay the Termination Payment (or such lesser amount actually paid
by such successor) to Party A. Any amounts actually received by
Party A under this clause (C) shall reduce the amounts payable
pursuant to clauses (A) and (B); Party A shall pay to Party B any
excess of amounts actually received by Party A under this clause
(C) over the Termination Payment.
(c) NO BANKRUPTCY PETITION. Prior to the date that is one year and one day
after the date upon which the final payment is made in respect of the
Notes in accordance with the terms thereof, Party A shall not institute
against, or join any other person in instituting against, Party B, any
bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any federal or state bankruptcy
or similar law.
(d) TRANSFER. Section 7 is hereby amended by:
(1) (i) adding the words "(and notice of the transferee to)" after
the word "of" on the third line thereof, and (ii) adding the
words "(subject to providing three Business Days prior written
notice of the transferee to the other party and to each Rating
Agency)" after the word "transfer" on the fourth and seventh
line thereof.
(2) adding at the end thereof:
"Any party making any such transfer shall deliver to the other
party written confirmation from each Rating Agency then rating
any class of Notes that such transfer will not result in its
then-current rating of each class of Notes being withdrawn or
lowered."
(e) SWAP EXEMPTION.
(1) The parties agree that this Agreement and the Sole Transaction
are intended to constitute a "swap agreement" within the
meaning of Commodity Futures Trading Commission ("CFTC")
Regulations Section 35.1(b)(1) and Section 101(53)(B) of the
U.S. Bankruptcy Code;
(2) Each party represents to the other that it is an "eligible
swap participant" within the meaning of CFTC Regulations
Section 35.1(b)(2);
(3) The parties agree that neither this Agreement nor the Sole
Transaction is one of a fungible class of agreements that are
standardized as to their material economic terms, within the
meaning of CFTC Regulations Section 35.2(b); and
(4) Each party represents to the other that the creditworthiness
of the other party was or will be a material consideration in
entering into or determining the terms of this Agreement and
the Sole Transaction, including pricing, cost or credit
enhancement terms of this Agreement or the Sole Transaction,
within the meaning of CFTC Regulations Section 35.2(c).
(f) WAIVER OF RIGHT TO TRIAL BY JURY. EACH OF THE PARTIES HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO A TRIAL BY JURY WITH RESPECT TO
ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
ANY TRANSACTION.
(g) AMENDMENTS. Section 9(b) of this Agreement is hereby amended by adding
the following after the word "system" in the last line thereof:
", provided however, that all such amendments, modifications or waivers
shall require the written affirmation of each Rating Agency then rating
any class of Notes that such amendment, modification or waiver shall
not adversely affect its then-current rating of each class of Notes."
(h) ISDA DEFINITIONS. Reference is hereby made to the 1991 ISDA Definitions
(the "Definitions"), published by the International Swaps and
Derivatives Association, Inc., which is hereby incorporated by
reference herein without regard to any revision or subsequent edition
thereof or as otherwise provided in any Confirmation.
(i) RATING AGENCY DOWNGRADE. Anything to the contrary in Section 7
notwithstanding, no later than the 30th day following a Rating Agency
Downgrade, Party A shall, at its expense:
(1) transfer Party A's rights and duties hereunder to (or otherwise
procure a replacement transaction with terms substantially similar to
this Sole Transaction with) a successor to Party A having, or
guaranteed by a Credit Support Provider having, a long-term unsecured
and unguaranteed debt rating of at least "A3" or its equivalent by each
Swap Rating Agency;
(2) enter into arrangements, including collateral arrangements,
guarantees, letters of credit or other Credit Support Documents which
will, after review by each Swap Rating Agency, reverse the effect of
any reduction or withdrawal of ratings in connection with such Rating
Agency Downgrade on the Noteholders and the Subordinate Note Insurer;
or
(3) pledge Eligible Collateral pursuant to an ISDA Credit Support
Annex equal to the Replacement Cost of the Sole Transaction
contemplated by this Agreement (or otherwise receive written
confirmation from each Rating Agency that each class of Notes will
continue to be rated at least the ratings of such class of Notes prior
to such Rating Agency Downgrade) such that the rating of each class of
Notes by each Rating Agency will not be withdrawn or reduced below the
ratings of each such class of Notes prior to the Rating Agency
Downgrade.
Party B shall cooperate with Party to effect the purposes of the
foregoing.
ELIGIBLE COLLATERAL. The following items will qualify as "Eligible
Collateral" for the purpose of Part 5(i)(3) of this Agreement:
ELIGIBLE COLLATERAL VALUATION PERCENTAGE
(A) Cash 100%
(B) negotiable debt obligations issued
by the U.S. Treasury Department 100%
REPLACEMENT COST. For the purpose of Part 5(i)(3) of this Agreement,
"Replacement Cost" means, with respect to the close of business (the
"Valuation Time") on the date of any Rating Agency Downgrade, and
weekly thereafter, the amount, if any, that would be payable to Party B
by Party A (expressed as a positive number) pursuant to Section
6(e)(ii)(2)(A) of this Agreement as if all Transactions (or Swap
Transactions) were being terminated as of the relevant Valuation Time;
provided that Market Quotation will be determined by the Calculation
Agent using its estimates at mid-market of the amounts that would be
paid for Replacement Transactions (as that term is defined in the
definition of "Market Quotation").
(j) ADDITIONAL REPRESENTATIONS. Section 3 is hereby amended by adding the
following subsections (g), (h) and (i) at the end of such Section:
(g) NON-RELIANCE. In connection with the negotiation of, the
entering into, and the confirming of the execution of, this
Agreement, any Credit Support Document, the Sole Transaction and
any other documentation relating to this Agreement to which it is
a party or that it is required by this Agreement to deliver: (1)
the other party hereto or thereto is not acting as a fiduciary or
financial or investment advisor for it; (2) it is not relying
(for purposes of making any investment decision or otherwise)
upon any advice, counsel or representations (whether written or
oral) of the other party hereto or thereto other than the
representations expressly set forth in this Agreement, in such
Credit Support Document and in any Confirmation; (3) the other
party hereto or thereto has not given to it (directly or
indirectly through any other person) any assurance, guaranty or
representation whatsoever as to the expected or projected
success, profitability, return, performance, result, effect,
consequence, or benefit (either legal, regulatory, tax,
financial, accounting or otherwise) of this Agreement, such
Credit Support Document, such Sole Transaction or such other
documentation; (4) it has consulted with its own legal,
regulatory, tax, business, investment, financial and accounting
advisors to the extent it has deemed necessary, and it has made
its own investment, hedging and trading decisions (including
decisions regarding the suitability of any Transaction pursuant
to this Agreement) based upon its own judgment and upon any
advice from such advisors as it has deemed necessary and not upon
any view expressed by the other party hereto or thereto; (5) it
has determined that the rates, prices or amounts and other terms
of the Sole Transaction and the indicative quotations (if any)
provided by the other party hereto or thereto reflect those in
the relevant market for similar transactions, and all trading
decisions have been the result of arm's length negotiations
between the parties; (6) it is entering into this Agreement with
a full understanding of all the terms, conditions and risks
hereof and thereof (economic and otherwise) and it is capable of
assuming and willing to assume (financially and otherwise) those
risks; and (7) it is a sophisticated institutional investor.
(h) LINE OF BUSINESS. It has entered into this Agreement
(including the Sole Transaction evidenced hereby) in conjunction
with its line of business (including financial intermediation
services) or the financing of its business.
(i) NO AGENCY. It is entering into this Agreement, any Credit
Support Document to which it is a party, the Sole Transaction and
any other documentation relating to this Agreement or the Sole
Transaction as principal (and not as agent or in any other
capacity, fiduciary or otherwise).
(k) NOTICES TO PARTY A. Party B agrees that it shall cause to be
delivered to Party A any notices generated or received by Party B in
connection with the Basic Documents.
(l) LIMITED RECOURSE TO PARTY B. Notwithstanding anything to the contrary
contained herein, all obligations of Party B shall be payable by Party
B only on each Quarterly Payment Date, first, to the extent funds are
available therefor, under Section 8.02 of the Indenture, second, to the
extent funds are available therefor, under Section 2(e)(iv)(C) of the
Administration Agreement, third, to the extent funds are available
therefor, under Section 10.01 of the Indenture, fourth, to the extent
of funds available therefor, under Section 5.04 of the Indenture and,
to the extent such funds are not available or are insufficient for the
payment thereof, shall not constitute a claim against the Trust to the
extent of such unavailability or insufficiency until such time as the
Trust has assets sufficient to pay such prior deficiency. This
paragraph shall survive the termination of this Agreement but in all
cases shall expire concurrently with the restriction specified in Part
5(c).
(m) NO SUSPENSION OF PAYMENTS. Notwithstanding Section 2(a)(iii) of this
Agreement, Party A shall not suspend any payments due under Section
2(a)(iii) unless:
(1) the principal of any class of Notes shall have been accelerated in
accordance with the terms of the Indenture following an Event of
Default thereunder; or
(2) an Early Termination Date for the Sole Transaction has occurred or
effectively been designated.
(n) DEFAULT INTEREST. Section 2(e) of this Agreement is hereby deleted in
its entirety.
(o) REDEMPTION EVENT.
(i) A "Redemption Event" will occur upon the delivery by Party B (or
its designee) to Party A of a "Party B Response" (as defined in
Appendix I) accepting Party A's offer to terminate the Sole Transaction
as provided in Appendix I hereto. Such Party B Response shall be
delivered on or before the related Redemption Date (as defined in the
Indenture) and shall certify that the Minimum Purchase Price (as
defined in the Indenture) has been deposited into the appropriate Trust
Account (as defined in the Indenture). The parties hereto acknowledge
and agree that the Indenture Trustee (as defined in the Indenture) may
deliver such Party B Response on behalf of Party B. Party A hereby
agrees that upon receipt of such Party B Response from the Indenture
Trustee certifying that the Minimum Purchase Price has been deposited
in the Collection Account, Party A shall immediately designate the
Redemption Date as an Early Termination Date. Notwithstanding Section
6(d)(ii), the Payment Date in respect of a Redemption Event shall be
the Early Termination Date so designated. For avoidance of doubt, no
Redemption Event shall occur and no Early Termination Date shall be
effectively designated in respect thereof unless the Minimum Purchase
Price shall have been deposited into the applicable Trust Account(s)
pursuant to Article X of the Indenture.
(ii) The parties hereto acknowledge and agree that [ ], as
Administrator under the Administration Agreement, may deliver on behalf
of Party B any "Party B Notices" required or permitted by Appendix I
hereto; provided, that in no event shall a Redemption Event occur upon
delivery of any such Party B Notice from the Administrator.
(p) STATEMENT TO NOTEHOLDERS. Party B will provide to Party A statements
required by Section 2(g) of the Administration Agreement dated as of [
] (the "Administration Agreement") among Party B, [ ] ("[ ]", as
administrator (the "Administrator"), and [ ], as indenture trustee (the
"Indenture Trustee").
(q) ADDITIONAL DEFINITIONS. Capitalized terms used in this Schedule shall
have the meaning set forth in the Confirmation, the Indenture or, if
not therein, Appendix A to the Administration Agreement, without regard
to any amendment or supplement thereto with respect to which Party A
has not given its written consent.
"Indenture" means the Indenture dated as of [ ] between Party B and [
], as indenture trustee, without regard to any amendment or supplement
thereto with respect to which Party A has not given its written
consent.
"Net Trust Swap Payment Carryover Shortfall" means, with respect to any
Quarterly Payment Date with respect to which Party B owes any amounts
to Party A in respect of this Agreement, the excess of (i) the Trust
Swap Payment Amount with respect to this Agreement on the preceding
Quarterly Payment Date over (ii) the amount actually received by Party
A out of Available Funds with respect to this Agreement on such
preceding Quarterly Payment Date plus interest on such excess from such
preceding Quarterly Payment Date to the current Quarterly Payment Date
at the rate of Three-Month LIBOR for the related Quarterly Interest
Period.
"Rating Agency Downgrade" means that, prior to the earlier of the
Termination Date or the Early Termination Date of the Sole Transaction,
the rating of Party A or any successor thereto is withdrawn or reduced
below "A3" or its equivalent by any Swap Rating Agency then rating
Party A.
"Underwriting Agreement" means the Underwriting Agreement dated as of
[ ] between ASSET BACKED SECURITIES CORPORATION, as seller, and [ ],
as representative of the several underwriters of the Notes.
"Swap Rating Agency" means Xxxxx'x Investors Service, Inc. or Standard
& Poor's Ratings Service, a division of the XxXxxx-Xxxx Companies, Inc.
The parties executing this Schedule have executed the Master Agreement and have
agreed as to the contents of this Schedule.
___________________________
By: ____________________________
Name:
Title:
ASSET BACKED SECURITIES CORPORATION STUDENT LOAN TRUST [ ]
By: [ ], not in
its individual capacity but solely as Eligible
Lender Trustee
By: _____________________________________
Name:
Title:
APPENDIX I
REDEMPTION OF NOTES.
1. As promptly as practicable, but in any event not later than two
Business Days after delivery by Party B (or Party B's designee) to Party A of a
notice of proposed redemption (the "Redemption") and request for a quotation of
Termination Payment (the "Party B Notice"), Party A will give notice by
telephone to Party B (which notice will be promptly confirmed in writing to
Party B with a copy of such notice to ASSET BACKED SECURITIES CORPORATION) (the
"Party A Response"):--
(i) offering to terminate the Sole Transaction upon such Redemption;
and
(ii) stating in good faith and in reasonable detail the Termination
Payment (the "Redemption Payment") that will be payable by Party B to Party A or
by Party A to Party B on the proposed Redemption Date (as defined in the
Indenture) if the offer is accepted at the time of such offer (or through such
later time, if any, as may be expressed in the offer in the discretion of Party
A) and the Redemption is effected on the Redemption Date; provided, however,
that, if such offer is not accepted at such time, Party A will, promptly after
requests therefor by Party B, make new offers to effect the termination of the
Sole Transaction and will make such new offers in accordance with reasonable
market practice until 11:00 a.m. New York City time on the Business Day two
Business Days prior to the Redemption Date (the "Deadline"). Any such new offer
will contain the statements required by the preceding clauses (i) and (ii) and
will also be a Party A Response, except that:--
(x) only the Party A Response will determine the period during which
new offers are required to be accepted; and
(y) in the case of the Final Offer (as defined below), "Market
Quotation" will be substituted for "Loss" for purposes of determining the
Redemption Payment.
The last such new offer is referred to herein as the "Final Offer."
The Final Offer will be identified as such in the relevant Party A Response. The
Final Offer will not be delivered earlier than the Business Day on which the
Deadline occurs. The Final Offer will be communicated by telephone to Party B
(which Final Offer will be promptly confirmed in writing to Party B with a copy
of such Final Offer to ASSET BACKED SECURITIES CORPORATION).
2. Each Party A Response will describe the Redemption Payment, even if
the Redemption Payment remains the same and, except as described above with
respect to the Final Offer, each Redemption Payment will be determined using
"Loss" and "Second Method" and based on Party B as the sole Affected Party.
3. As promptly as practicable, but in any event not later than the end
of the period during which an offer may be accepted pursuant to the relevant
Party A Response, Party B, acting in good faith and in accordance with
reasonable derivatives market practice, will accept the offer expressed therein
by notice (the "Party B Response") to Party A. Such notice will be by telephone,
will be promptly confirmed in writing and will thereupon be effective, all in
accordance with usual derivatives markets transactions. A copy of each such
Party B Response will be delivered by Party B to Asset Backed Securities
Corporation. If the offer is accepted as aforesaid, the Redemption will be
effective on the Redemption Date on the terms expressed in the last relevant
Party A Response as accepted by the Party B Response (subject to the conditions
set forth in Part 5(o) of this Agreement). The Redemption Payment will be the
amount described in the Party A Response accepted by Party B.
4. Party B (or its designee) will have the right to make reasonable
request of Party A for indications of Redemption Payments based on proposed
Redemptions as contemplated by Paragraphs 1 through 3 above, and Party A will
supply such indications promptly and in good faith following any such request.
Except as provided in Paragraphs 1 through 3 above and Part 5(o) of the
Agreement, neither Party B nor its designee will be obligated to effect any such
Redemption.
CONFIRMATION
REF. NO. _________
EXHIBIT A FORM OF OPINION OF PARTY A
[ ], 20[ ]
ASSET BACKED SECURITIES CORPORATION STUDENT LOAN TRUST [ ]
[ ]
[ ]
[ ]
[ ]
[ ]
[ ]
[ ]
[ ]
[ ]
[ ]
Xxxxx'x Investors Services, Inc.
00 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fitch, Inc.
Xxx Xxxxx Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Standard & Poor's Rating Agency
a division of the XxXxxx-Xxxx Companies
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
This opinion is furnished to you pursuant to a Master Agreement dated
as of [ ], ____ (the "Agreement"), between ASSET BACKED SECURITIES CORPORATION
Student Loan Trust [ ] and [ ] (the "Swap Counterparty"). Terms defined in the
Agreement are used herein as defined in the Agreement.
I am counsel to the Swap Counterparty and in that capacity have
examined such documents and have conducted such investigations of fact and law
as I have deemed necessary or advisable for the opinions expressed herein. The
opinions expressed herein are limited to questions arising under the laws of the
State of New York, the United States of America [and foreign jurisdiction].
Upon the basis of the foregoing, I am of the opinion that:
1. The Swap Counterparty is a corporation duly organized and validly
existing under the laws of [ ].
2. The execution, delivery and performance of the Agreement by the
Swap Counterparty are within the Swap Counterparty's corporate power, have been
duly authorized by all necessary corporate action and do not conflict with, or
constitute a default under, any provisions of the Swap Counterparty's articles
of incorporation or by-laws or any applicable law or regulation or of any
agreement, decree, order, judgment, injunction or other instrument known to me
and binding on or affecting the Swap Counterparty's property or assets.
3. The Agreement has been duly authorized, executed and delivered by
the Swap Counterparty.
4. (i) The governing law clause, subjecting the Agreement to New York
law, is valid under [foreign country] law.
(ii) Under [foreign country] law, New York law will be applied
to the Agreement, except to the extent that any terms of the Agreement or any
provisions of New York law applicable to the Agreement result in the outcome of
their application in a violation of [foreign country] public policy or violate
the purpose of a [foreign country's] statute reflecting such public policy.
(iii) None of the terms of the Agreement result in the outcome
of their application in a violation of [foreign country] public policy or
violate the purpose of a [foreign country] statute reflecting such public
policy.
(iv) Assuming that the Agreement is legal, valid, binding and
enforceable under New York law, the Agreement is legal, valid, binding and
enforceable against the Swap Counterparty in accordance with its terms, the
[foreign country] civil procedural rules and, subject to the opinions set forth
in subclauses (i) through (iii) above, the applicable provisions of the chosen
law of New York, except that the enforceability of the Agreement may be limited
by bankruptcy, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally.
5. No consent, authorization, license or approval of, or registration,
filing, or declaration with, any governmental authority of [jurisdiction] is
required in connection with the execution, delivery and performance of the
Agreement by the Swap Counterparty.
6. The Agreement will constitute a valid and binding obligation of the
Swap Counterparty enforceable against the Swap Counterparty in accordance with
its terms, except as the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium, or other laws affecting the enforcement
of creditors' rights generally or by general equity principles; provided that I
do not express any opinion as to the binding affect of any provision of the
Agreement that purports to make any determination conclusive or conclusive
absent manifest error unless such determination is made reasonably and in good
faith.
This opinion is solely for your benefit in connection with the
Agreement referenced above, and may not be relied on, nor copies hereof
delivered to any other person or entity without my prior written consent.
Sincerely yours,
EXHIBIT B CERTIFICATES OF INCUMBENCY
EXHIBIT C
ASSET BACKED SECURITIES CORPORATION STUDENT LOAN TRUST [ ]
OFFICER'S CERTIFICATE
[ ]of [ ], a [ ] corporation (the "Corporation") and
__________________, ______________________ of the Corporation, each hereby
certify that, to the best of his or her knowledge, after reasonable
investigation:
(i) the representations and warranties of the Seller or the Servicer,
as the case may be, contained in the Trust Agreement, the Loan Sale Agreement,
the Administration Agreement, the Servicing Agreement and the Swap Agreement, as
applicable, are true and correct in all material respects, that each of the
Seller and the Servicer has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied under such agreements at or
prior to the Closing Date, and
(ii) since [ ], except as may be disclosed in the Prospectus or the
Private Placement Memorandum, no material adverse change, or any development
involving a prospective material adverse change, in or affecting particularly
the business or properties of the Trust, the Company, the Seller or the
Servicer, as applicable, has occurred.
Capitalized terms used but not defined herein have the meanings
specified in Appendix A to the Administration Agreement dated as of [ ] among
ASSET BACKED SECURITIES CORPORATION Student Loan Trust [ ], the Corporation and
[ ], as indenture trustee.
IN WITNESS WHEREOF, each of the above-named authorized officers
hereunto signed his or her name.
Dated: [ ]
By: ____________________________
Name:
Title:
FORM OF CONFIRMATION
[ ]
ASSET BACKED SECURITIES CORPORATION STUDENT LOAN TRUST [ ]
[ ]
[ ]
[ ]
[ ]
Fax: [ ]
cc: [ ]
Attention: [ ]
From: ___________________________
Attention: _________
Phone: __________
Swap Transaction Ref. No. __________
The purpose of this communication is to set forth the terms and
conditions of the Swap Transaction or the Transaction (Swap Transaction and
Transaction are collectively referred to herein as "Transaction"), entered into
between [ ]("Party A") and ASSET BACKED SECURITIES CORPORATION STUDENT LOAN
TRUST [ ] ("Party B") on the Trade Date specified below. This communication will
constitute, as applicable, a "Confirmation" as referred to in either the ISDA
Master Agreement or the master agreement entered into by the parties hereto
prior to or on the date hereof (the "Agreement").
The definitions and provisions contained in the 1991 ISDA Definitions,
as supplemented by the 1998 Supplement, (the "Definitions") as published by the
International Swaps and Derivatives Association, Inc. ("ISDA") are incorporated
herein. In the event that Party A and Party B have entered into an Agreement
effective on or prior to the date hereof, this Confirmation supplements, forms
part of and is subject to such Agreement. In the event that Party A and Party B
have not entered into an Agreement, this Transaction and all other Transactions
between the parties hereto are subject to the 1992 Master Agreement
(Multicurrency--Cross Border) as published by ISDA (the "ISDA Master Agreement")
and the parties hereto agree to negotiate in good faith and enter into an
agreement in the form of the ISDA Master Agreement with such modifications as
set forth below and as the parties shall in good faith agree. Upon execution and
delivery of such an Agreement or an Interest Rate and Currency Exchange
Agreement (the "Exchange Agreement") (the Exchange Agreement and the Agreement
are collectively referred to as the "ISDA Executed Master Agreement") the terms
and conditions of the ISDA Master Agreement will be superseded thereby and this
Confirmation will supplement, form a part of and be subject to the terms and
conditions of the ISDA Executed Master Agreement.
All provisions contained in either the ISDA Master Agreement or the
Agreement or the ISDA Executed Master Agreement (as the case may be), will
govern this Confirmation except as expressly modified below. In the event of any
inconsistency among or between the ISDA Master Agreement, the Agreement or the
ISDA Executed Master Agreement (as the case may be), the Definitions and this
Confirmation, this Confirmation will govern.
1. The terms of the particular Transaction to which this Confirmation
relates are as follows:
Notional Amount: USD [ ] with respect to the Initial
Calculation Period and, for each
Calculation Period thereafter, the lesser
of (i) the Outstanding Principal Amount
for such Calculation Period and (ii) the
Notional Amount specified for the first
day of such Calculation Period in Exhibit
A.
Where "Outstanding Principal Amount" for
any Calculation Period means the
aggregate principal amount of the Notes
as of the Payment Date on which such
Calculation Period commences (after
giving effect to the distribution on such
date).
Trade Date: [ ]
Effective Date: [ ]
Termination Date: The earlier of (i) the date on which the
outstanding principal amount of the Notes
is reduced to zero (other than in
connection with a Redemption Event) and
(ii) [ ] subject to adjustment in
accordance with the Following Business
Day Convention.
Floating Rate Amounts I:
Floating Rate Payer I: Party B.
Floating Rate Payer I Each [ ], and [ ], commencing __-__-____,
Payment Dates: to and including the Termination Date,
subject to adjustment in accordance with
the Following Business Day Convention.
Floating Rate Payer I
Initial Calculation Period: From and including [ ]
to but excluding [ ].
Floating Rate Payer I
Floating Rate for Initial
Calculation Period: To Be Determined.
Floating Rate Payer I
Floating Rate Option: USD -TBILL - H.15; provided that the
Definitions shall be amended (a) by
substituting Telerate Page 56 for all
references to H.15(519) and (b) by
striking the words "U.S. Government
Securities/Treasury Bills/Auction Average
(Investment)" and substituting therefor
the words "US Treasury 3MO T-Xxxx Auction
Results/Average Investment Yield".
Floating Rate Payer I Day
Count Fraction: Actual/365.
Floating Rate Payer
I Designated Maturity: 3 Months.
Floating Rate Payer Plus [no more than 0.80]%.
I Spread:
Floating Rate Payer
I Compounding: Not applicable.
Method of Averaging: Weighted Average.
Rate Cut-Off Days: 6 New York Banking Days prior to the
Floating Rate Payer I Payment Date.
Floating Rate Payer I
Reset Dates: Each New York Business Day.
Business Days: New York.
Floating Rate Payer I
Additional Floating Amount: The Net Trust Swap Payment Carryover
Shortfall Amount, if any, on the related
Payment Date.
Floating Rate Amounts II:
Floating Rate Payer II: Party A.
Floating Rate Payer II
Payment Dates: Each [ ], and [ ], commencing [ ], to and
including the Termination Date, subject
to adjustment in accordance with the
Following Business Day Convention.
On the [ ] Floating Rate Payer II Payment
Date, the Party A Payment Amount shall be
an amount equal to the sum of the
Floating Rate Amounts II for (i) the
Floating Rate Payer II Initial
Calculation Period and (ii) the Floating
Rate Payer II Calculation Period ending
on [ ].
Floating Rate Payer
II Initial Calculation
Period: From and including [ ] to but
excluding [ ].
Floating Rate Payer II
Floating Rate for Initial
Calculation Period: [ ]%.
Period End Dates: [ ] and each Floating Rate Payer II
Payment Date.
Floating Rate Payer II
Floating Rate Option: USD - LIBOR - BBA; provided that
the Floating Rate shall be determined on
the day that is two New York and London
Banking Days prior to each Reset Date.
Floating Rate Payer II Day
Count Fraction: Actual/360.
Floating Rate Payer II
Designated Maturity: 3 Months.
Floating Rate Payer
II Spread: None.
Floating Rate Payer
II Compounding: Not Applicable.
Floating Rate Payer
II Reset Dates: The first day of each Calculation Period.
Business Days: New York.
Floating Rate Payer
II Additional Floating
Amount: The Net Trust Swap Receipt Carryover
Shortfall Amount, if any, on the related
Payment Date.
2. Account Details:
Payments to Party A:
[ ]
[ ]
[ ]
ABA: [ ]
FAO: [ ]
Account No.: [ ]
Payments to Party B:
[ ]
[ ]
[ ]
ABA: [ ]
Clearing Account: [ ]
Credit Trust #: [ ]
Attn: [ ], ref: ASSET BACKED SECURITIES CORPORATION
STUDENT LOAN TRUST [ ]
3. OTHER TERMS:
-----------
(a) Each capitalized term used in this Confirmation and not
defined in this Confirmation or the Definitions shall have the
meaning assigned in the Agreement.
(b) In the event this Transaction terminates prior to the payment
of the entire Net Trust Swap Payment Carryover Shortfall or
Net Trust Swap Receipt Carryover Shortfall, such amount will
remain due and payable and shall be paid in accordance with
the terms of the Indenture.
(c) Each party acknowledges and agrees that, except as provided
herein, the scheduled Notional Amount may not be adjusted
without the prior written consent of the other party. Party B
represents, warrants and covenants that so long as no Early
Termination Date has occurred or been effectively designated
or any amounts remain due and payable to Party A in respect of
this Transaction, Party B will not enter into any swap
transaction (other than this Transaction) without the prior
written consent of Party A.
(d) If either party proposes to amend this Transaction pursuant
to Section 6.03(e) of the Trust Agreement among [ ], as
depositor, [ ] and [ ], as eligible lender trustee, then the
parties will negotiate in good faith and reasonably regarding
the terms, conditions and documentation relating to an
appropriate amendment to this Transaction and an appropriate
amendment payment relating thereto. The effectiveness of such
amendment will be subject to the conditions that (i) the
amendment payment, if any, is made by or to Party B on the
proposed effective date of such amendment and (ii) no Event of
Default or Termination Event has occurred and is continuing on
such proposed effective date. For avoidance of doubt, the
parties acknowledge and agree that the amendment payment, if
any, will be a payment pursuant to Section 2 of this
Transaction for purposes of determining Net Trust Swap Payment
or Net Trust Swap Receipt, as applicable.
Please promptly confirm that the preceding correctly sets forth the terms of our
agreement by executing the copy of this Confirmation enclosed for that purpose
and returning it to us.
Yours sincerely,
______________________
By:____________________________
Name:
Title:
Confirmed as of the date first written:
ASSET BACKED SECURITIES CORPORATION STUDENT LOAN TRUST [ ]
By: [ ],
not in its individual capacity but solely
as Eligible Lender Trustee
By: ________________________________
Name:
Title:
EXHIBIT A
CALCULATION PERIOD
COMMENCEMENT DATE NOTIONAL AMOUNT
APPENDIX A TO THE
ADMINISTRATION AGREEMENT
DEFINITIONS AND USAGE
USAGE
The following rules of construction and usage shall be applicable to
any instrument that is governed by this Appendix:
(a) All terms defined in this Appendix shall have the defined meanings
when used in any instrument governed hereby and in any certificate or other
document made or delivered pursuant thereto unless otherwise defined therein.
(b) As used herein, in any instrument governed hereby and in any
certificate or other document made or delivered pursuant thereto, accounting
terms not defined in this Appendix or in any such instrument, certificate or
other document, and accounting terms partly defined in this Appendix or in any
such instrument, certificate or other document to the extent not defined, shall
have the respective meanings given to them under generally accepted accounting
principles as in effect on the date of such instrument. To the extent that the
definitions of accounting terms in this Appendix or in any such instrument,
certificate or other document are inconsistent with the meanings of such terms
under generally accepted accounting principles, the definitions contained in
this Appendix or in any such instrument, certificate or other document shall
control.
(c) The words "hereof", "herein", "hereunder" and words of similar
import when used in an instrument refer to such instrument as a whole and not to
any particular provision or subdivision thereof; references in an instrument to
"Article", "Section" or another subdivision or to an attachment are, unless the
context otherwise requires, to an article, section or subdivision of or an
attachment to such instrument; and the term "including" means "including without
limitation".
(d) The definitions contained in this Appendix are equally applicable
to both the singular and plural forms of such terms and to the masculine as well
as to the feminine and neuter genders of such terms.
(e) Any agreement, instrument or statute defined or referred to below
or in any agreement or instrument that is governed by this Appendix means such
agreement or instrument or statute as from time to time amended, modified or
supplemented, including (in the case of agreements or instruments) by waiver or
consent and (in the case of statutes) by succession of comparable successor
statutes and includes (in the case of agreements or instruments) references to
all attachments thereto and instruments incorporated therein. References to a
Person are also to its permitted successors and assigns.
DEFINITIONS
"ACT" has the meaning specified in Section 11.03(a) of the Indenture.
"ADDITIONAL FUNDINGS" means any withdrawals from the Collateral
Reinvestment Account for any of the purposes set forth in Section 2(f) of the
Administration Agreement.
"ADDITIONAL GUARANTOR" means a Federal Guarantor (other than an
Initial Guarantor) of a Financed Student Loan (other than an Initial Financed
Student Loan) which has entered into a guarantee agreement with the Eligible
Lender Trustee.
"ADD-ON CONSOLIDATION LOAN" means a Student Loan, the principal
balance of which is added to an existing Consolidation Loan within 210 days from
the date that the existing Consolidation Loan was made, as required by the
Higher Education Act.
"ADD-ON CONSOLIDATION LOAN FUNDING DATE" means each day, prior to the
end of the Add-on Period, on which the principal balance of an Add-on
Consolidation Loan is added to the principal balance of a Consolidation Loan in
the Trust pursuant to Section 6.07 of the Trust Agreement.
"ADD-ON PERIOD" means the period starting on the Closing Date and
ending on the date that is 210 days from the date that the last Consolidation
Loan was originated by the Trust during the Revolving Period.
"ADMINISTRATION AGREEMENT" means the Administration Agreement dated as
of [ ], among the Issuer, the Administrator and the Indenture Trustee.
"ADMINISTRATION FEE" means, with respect to each Monthly Payment Date,
an amount equal to one-twelfth of the product of (i) 0.05% and (ii) the Pool
Balance as of the close of business on the last day of the calendar month
immediately preceding such Monthly Payment Date.
"ADMINISTRATOR" means [ ], a [ ] corporation, in its capacity as
administrator of the Issuer and the Financed Student Loans.
"ADMINISTRATOR DEFAULT" shall have the meaning set forth in Section 12
of the Administration Agreement.
"ADMINISTRATOR'S CERTIFICATE" means an Officers' Certificate of the
Administrator delivered pursuant to Section 2(b)(ii) of the Administration
Agreement.
"AFFILIATE" means, with respect to any specified Person, any other
Person controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect to
any specified Person means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"ASSET BACKED SECURITIES CORPORATION" means [ ], a Delaware
corporation.
"ASSIGNMENT" means a duly executed assignment delivered pursuant to
Section 3.02 of the Loan Sale Agreement in the form set forth in Exhibit F to
such Agreement.
"AUTHORIZED OFFICER" means (i) with respect to the Issuer, any officer
of the Eligible Lender Trustee who is authorized to act for the Eligible Lender
Trustee in matters relating to the Issuer pursuant to the Basic Documents and
who is identified on the list of Authorized Officers delivered by the Eligible
Lender Trustee to the Indenture Trustee on the Closing Date (as such list may be
modified or supplemented from time to time thereafter) and (ii) with respect to
the Seller, the Servicer and the Administrator, any officer or other authorized
representative of the Seller, the Servicer or the Administrator, respectively,
who is authorized to act for the Seller, the Servicer or the Administrator,
respectively, in matters relating to itself or to the Issuer and to be acted
upon by the Seller, the Servicer or the Administrator, respectively, pursuant to
the Basic Documents and who is identified on the list of Authorized Officers
delivered by the Seller, the Servicer and the Administrator, respectively, to
the Indenture Trustee on the Closing Date (as such list may be modified or
supplemented from time to time thereafter).
"AVAILABLE FUNDS" means, with respect to a Quarterly Payment Date and
the related Collection Period, the sum of (1) the amounts specified in clauses
(i) through (vi) of the definition of Monthly Available Funds for each of the
three Monthly Collection Periods included in such Collection Period, (2) any
Trust Swap Receipt Amount and the remainder of any Termination Payment received
by the Trust with respect to such Quarterly Payment Date and (3) at the end of
the Revolving Period, the amount deposited from the Prefunding Account to the
Collection Account pursuant to Section 2(k)(iv) of the Administration Agreement;
PROVIDED, HOWEVER, that if with respect to any Quarterly Payment Date there
would not be sufficient funds, after application of the Available Funds (as
defined above) and amounts available first from the Prefunding Account and
second from the Reserve Account, to pay any of the items specified in clauses
(v)(A) through (v)(C) of Section 2(d) of the Administration Agreement, then the
Available Funds for such Quarterly Payment Date will include, in addition to the
Available Funds (as defined above), amounts on deposit in the Collection Account
on the Determination Date relating to such Quarterly Payment Date which would
have constituted the Available Funds for the Quarterly Payment Date succeeding
such Quarterly Payment Date up to the amount necessary to pay such items, and
the Available Funds for such succeeding Quarterly Payment Date will be adjusted
accordingly; and PROVIDED, FURTHER, that the Available Funds will exclude (A)
all payments and proceeds (including Liquidation Proceeds) of any Financed
Student Loans the Purchase Amounts of which were included in the Available Funds
for a prior Collection Period; (B) except as expressly included in clause (iv)
of the definition of Monthly Available Funds, amounts released from the
Collateral Reinvestment Account; (C) any Monthly Rebate Fees paid during the
related Collection Period by or on behalf of the Trust; (D) any collections in
respect of principal on the Financed Student Loans applied by the Eligible
Lender Trustee on behalf of the Trust prior to the end of the Revolving Period
to make deposits to the Collateral Reinvestment Account pursuant to Section
2(d)(i) of the Administration Agreement and, after the end of the Revolving
Period, any expenditure of the Net Principal Cash Flow Amount used to fund the
addition of any Add-on Consolidation Loans, to purchase Serial Loans or to fund
the acquisition of Exchanged Serial Loans during the related Collection Period;
and (E) the Servicing Fee, all overdue Servicing Fees, the Administration Fee
and all overdue Administration Fees paid on each Monthly Payment Date that is
not a Quarterly Payment Date during the related Collection Period.
"BASIC DOCUMENTS" means the Trust Agreement, the Indenture, the Loan
Sale Agreement, the Servicing Agreement, the Administration Agreement, the
Depository Agreement, the Guarantee Agreements, any Swap Agreement and other
documents and certificates delivered in connection with any thereof.
"BILLING ACCOUNT" means those combined loans of a Borrower with the
same lender and branch, which loans are in the same status, and are the same
loan type, and are guaranteed by the same Guarantor and which require the same
processing and billing requirements. Xxxxxxxx Loans which are already in
repayment and being serviced by the Servicer will not be merged with new
Xxxxxxxx Loans for the same Borrower, and each such Xxxxxxxx Loan will be
treated as a separate Billing Account.
"BOOK-ENTRY NOTE" means a beneficial interest in the Senior Notes and
the Subordinate Notes, ownership and transfers of which shall be made through
book entries by a Clearing Agency as described in Section 2.10 of the Indenture.
"BORROWER" means an individual who is the maker of a Borrower Note and
who obtains a Student Loan from an "eligible lender" in accordance with the
Higher Education Act and the policies and procedures of a Guarantor.
"BORROWER INCENTIVE PROGRAMS" means the incentive program of the
Administrator which provides that Borrowers of Federal Consolidation Loans whose
applications were received during the period from [ ] through [ ] and make their
first 48 payments on time may receive a [ ] per annum interest rate reduction
for the remaining term of their Consolidation Loan and if such Borrowers use the
[ ] auto-debit system to remit payments directly from their bank accounts, such
Borrowers may receive a [ ] per annum interest rate reduction on their Student
Loans, as such program may be modified from time to time.
"BORROWER NOTE" means a promissory note of a Borrower for a Student
Loan set forth on the appropriate form furnished by the Guarantor which Borrower
Note meets the criteria set forth by the Higher Education Act and the policies
and procedures of the Guarantor.
"BUSINESS DAY" means any day other than (i) a Saturday or a Sunday, or
(ii) a day on which banking institutions or trust companies in the States of [ ]
or in the city in which the Corporate Trust Office of the Indenture Trustee is
located are authorized or obligated by law, regulation or executive order to
remain closed.
"BUSINESS TRUST STATUTE" means Chapter 38 of Title 12 of the Delaware
Code, 12 DEL. CODEss.3801 ET SEQ., as the same may be amended from time to time.
"CAPITALIZED INTEREST AMOUNT" means for any Monthly Collection Period
or other period of determination, the amount of interest that accrued on the
Financed Student Loans during such period but was not then payable and that has
been or will, pursuant to the terms of such Financed Student Loans, be
capitalized and added to the principal balances of such loans.
"CERTIFICATE OF TRUST" means the Certificate of Trust in the form of
Exhibit A to the Trust Agreement to be filed for the Trust pursuant to Section
3810(a) of the Business Trust Statute.
"CHOICE RATES(TM) PROGRAM" means the Incentive Program of the
Administrator which provides that Borrowers of Xxxxxxxx Loans whose loans were
disbursed on or after [ ] and who make their first 48 payments on time receive a
[ ] per annum interest rate reduction for the remaining term of their Student
Loan, as such program may be modified from time to time.
"CHOICE REPAY(TM) PROGRAM" means the Incentive Program of the
Administrator which provides for Borrowers of Xxxxxxxx Loans whose loans were
disbursed on or after [ ] and who use the [ ] auto-debit system to remit
payments directly from their bank accounts to receive a [ ] per annum interest
rate reduction on their Student Loans, as such program may be modified (with
notice to the Rating Agencies) after the Cutoff Date, other than as it may be
modified to increase such interest rate reduction.
"CLASS A-1 NOTE" means a Class A-1 Floating Rate Asset- Backed Senior
Note issued pursuant to the Indenture, substantially in the form of Exhibit A-1
thereto.
"CLASS A-1 NOTE FINAL MATURITY DATE" means the [ ] Quarterly Payment
Date.
"CLASS A-1 NOTE POOL FACTOR" as of the close of business on a
Quarterly Payment Date means a seven-digit decimal figure equal to the
outstanding principal amount of the Class A-1 Notes divided by the original
outstanding principal amount of the Class A-1 Notes. The Class A-1 Note Pool
Factor will be 1.0000000 as of the Closing Date; thereafter, the Class A-1 Note
Pool Factor will decline to reflect reductions in the outstanding principal
amount of the Class A-1 Notes.
"CLASS A-1 NOTE RATE" means, with respect to any Quarterly Interest
Period, the interest rate per annum (computed on the basis of the actual number
of days in such Quarterly Interest Period over a year of 360 days) equal to
Three-Month LIBOR for the related LIBOR Reset Period plus 0.08%.
"CLASS A-1 NOTEHOLDER" means the Noteholder of a Class A-1 Note.
"CLASS A-1 NOTEHOLDERS' INTEREST CARRYOVER SHORTFALL" means, with
respect to any Quarterly Payment Date, the excess of (i) the Class A-1
Noteholders' Interest Distribution Amount on the preceding Quarterly Payment
Date over (ii) the amount of interest actually distributed to the Class A-1
Noteholders on such preceding Quarterly Payment Date, plus interest on the
amount of such excess, to the extent permitted by law, at the then current Class
A-1 Note Rate from such preceding Quarterly Payment Date to the current
Quarterly Payment Date.
"CLASS A-1 NOTEHOLDERS' INTEREST DISTRIBUTION AMOUNT" means, with
respect to any Quarterly Payment Date, the sum of (i) the amount of interest
accrued at the Class A-1 Note Rate for the related Quarterly Interest Period on
the outstanding principal balance of the Class A-1 Notes on the immediately
preceding Quarterly Payment Date (after giving effect to all principal
distributions to holders of Class A-1 Notes on such date) or, in the case of
first Quarterly Payment Date, on the Closing Date and (ii) the Class A-1
Noteholders' Interest Carryover Shortfall for such Quarterly Payment Date.
"CLASS A-2 NOTE" means a Class A-2 Floating Rate Asset- Backed Senior
Note issued pursuant to the Indenture, substantially in the form of Exhibit A-2
thereto.
"CLASS A-2 NOTE FINAL MATURITY DATE" means the [ ] Quarterly Payment
Date.
"CLASS A-2 NOTE POOL FACTOR" as of the close of business on a
Quarterly Payment Date means a seven-digit decimal figure equal to the
outstanding principal amount of the Class A-2 Notes divided by the original
outstanding principal amount of the Class A-2 Notes. The Class A-2 Note Pool
Factor will be 1.0000000 as of the Closing Date; thereafter, the Class A-2 Note
Pool Factor will decline to reflect reductions in the outstanding principal
balance of the Class A-2 Notes.
"CLASS A-2 NOTE RATE" means, with respect to any Quarterly Payment
Date and the related Quarterly Interest Period, the interest rate per annum
(computed on the basis of the actual number of days in such Quarterly Interest
Period over a year of 360 days) equal to Three-Month LIBOR for the related LIBOR
Reset Period plus 0.20%.
"CLASS A-2 NOTEHOLDER" means the Noteholder of a Class A-2 Note.
"CLASS A-2 NOTEHOLDERS' INTEREST CARRYOVER SHORTFALL" means, with
respect to any Quarterly Payment Date, the excess of (i) the Class A-2
Noteholders' Interest Distribution Amount on the preceding Quarterly Payment
Date over (ii) the amount of interest actually distributed to the Class A-2
Noteholders on such preceding Quarterly Payment Date, plus interest on the
amount of such excess, to the extent permitted by law at the then current Class
A-2 Note Rate from such preceding Quarterly Payment Date to the current
Quarterly Payment Date.
"CLASS A-2 NOTEHOLDERS' INTEREST DISTRIBUTION AMOUNT" means, with
respect to any Quarterly Payment Date, the sum of (i) the amount of interest
accrued at the Class A-2 Note Rate for the related Quarterly Interest Period on
the aggregate principal amount of the Class A-2 Notes outstanding on the
immediately preceding Quarterly Payment Date (after giving effect to all
principal distributions to holders of Class A-2 Notes on such date) or, in the
case of the first Quarterly Payment Date, on the Closing Date and (ii) the Class
A-2 Noteholders' Interest Carryover Shortfall for such Quarterly Payment Date;
"CLEARING AGENCY" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act.
"CLEARING AGENCY PARTICIPANT" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
"CLOSING DATE" means [ ].
"CODE" means the Internal Revenue Code of 1986, as amended from time
to time, and Treasury Regulations promulgated thereunder.
"COLLATERAL" has the meaning specified in the Granting Clause of the
Indenture.
"COLLATERAL REINVESTMENT ACCOUNT" means the account designated as
such, established and maintained pursuant to Section 2(c) of the Administration
Agreement, which shall be an Eligible Deposit Account.
"COLLATERAL REINVESTMENT ACCOUNT TRIGGER" will be triggered with
respect to any Monthly Collection Period during the Revolving Period if (1)
Three-Month LIBOR for the related LIBOR Reset Period exceeds (2) the greater of
(a) the T-Xxxx Rate for the preceding calendar month and (b) the 91-Day Treasury
Xxxx rate in effect for the variable rate Student Loans effective as of the
preceding [ ], by more than [ ]; provided that the Collateral Reinvestment
Account Trigger may be modified for any reason (including as a result of the
Trust entering into one or more Swap Agreements) upon satisfaction of the Rating
Agency Condition.
"COLLECTION ACCOUNT" means the account designated as such, established
and maintained pursuant to Section 2(c) of the Administration Agreement, which
shall be an Eligible Deposit Account.
"COLLECTION ACCOUNT CLOSING DATE DEPOSIT" means [ ].
"COLLECTION PERIOD" means, with respect to the first Quarterly Payment
Date, the period beginning on the Cutoff Date and ending on [ ], and with
respect to each subsequent Quarterly Payment Date, the Collection Period means
the three calendar months immediately following the end of the previous
Collection Period.
"COMMISSION" means the Securities and Exchange Commission.
"COMPANY" means [ ].
"CONSOLIDATION FEE" means any Federal Origination Fee, Monthly Rebate
Fee or similar fee payable to the Department relating to the origination or
ownership of Consolidation Loans.
"CONSOLIDATION LOAN" means a Student Loan made pursuant to the Higher
Education Act to consolidate the Borrower's obligations under various federally
authorized student loan programs into a single loan, as supplemented by the
addition of any related Add-on Consolidation Loans.
"CORPORATE TRUST OFFICE" means (i) with respect to the Indenture
Trustee, the principal office of the Indenture Trustee at which at any
particular time its corporate trust business shall be administered, which office
at the Closing Date is located at [ ], Attention: [ ] or at such other address
as the Indenture Trustee may designate from time to time by notice to the
Noteholders and the Seller, or the principal corporate trust office of any
successor Indenture Trustee (the address of which the successor Indenture
Trustee will notify the Noteholders and the Seller) and (ii) with respect to the
Eligible Lender Trustee, the principal corporate trust office of the Eligible
Lender Trustee located at [ ] Attention: [ ] or at such other address as the
Eligible Lender Trustee may designate by notice to the Seller or the principal
corporate trust office of any successor Eligible Lender Trustee (the address of
which the successor Eligible Lender Trustee will notify the Seller.
"CUSTODIAN" means [ ], in its capacity as custodian of the Borrower
Notes or any permitted successor Custodian.
"CUTOFF DATE" means [ ].
"DEFAULT" means any occurrence that is, or with notice or the lapse of
time or both would become, an Event of Default.
"DEFERRAL" means the period defined by the Higher Education Act and
the policies of the related Guarantor during which a Borrower (in Repayment) is
entitled to postpone making payments upon the submission of appropriate
documentation.
"DEFERRAL LOAN" means a Student Loan during a period of Deferral.
"DEFINITIVE NOTES" has the meaning specified in Section 2.10 of the
Indenture.
"DELAWARE TRUST" has the meaning specified in Section 10.01 of the
Trust Agreement.
"DELAWARE TRUSTEE" has the meaning set forth in Section 10.01 of the
Trust Agreement.
"DELETED STUDENT LOAN" has the meaning specified in Section 3.02 of
the Loan Sale Agreement.
"DELINQUENCY PERCENTAGE" means, as of any date of determination, the
percentage equivalent of a fraction the numerator of which is the aggregate
principal balances of the Financed Student Loans which are Repayment Loans and
which either (a) are over 210 days delinquent or (b) have had claims filed with
the Department for which payment is still awaited, and the denominator of which
is the aggregate principal balance of the Financed Student Loans which are
Repayment Loans.
"DELIVERY" when used with respect to Trust Account Property means:
(a) with respect to bankers' acceptances, commercial paper, negotiable
certificates of deposit and other obligations that constitute instruments and
are susceptible of physical delivery ("Physical Property"):
(i) transfer of possession thereof to the Indenture Trustee,
endorsed to, or registered in the name of, the Indenture Trustee or its nominee
or endorsed in blank;
(b) with respect to a certificated security:
(i) delivery thereof in bearer form to the Indenture Trustee;
or
(ii) delivery thereof in registered form to the Indenture
Trustee and
(A) the certificate is endorsed to the Indenture
Trustee or in blank by effective endorsement; or
(B) the certificate is registered in the name of
the Indenture Trustee, upon original issue or registration of
transfer by the issuer;
(c) with respect to an uncertificated security:
(i) the delivery of the uncertificated security to the
Indenture Trustee; or
(ii) the issuer has agreed that it will comply with
instructions originated by the Indenture Trustee without further
consent by the registered owner;
(d) with respect to any security issued by the U.S. Treasury, the
Federal Home Loan Mortgage Corporation or by the Federal National Mortgage
Association that is a book-entry security held through the Federal Reserve
System pursuant to Federal book-entry regulations:
(i) a Federal Reserve Bank by book entry credits the
book-entry security to the securities account (as defined in 31 CFR
Part 357) of a participant (as defined in 31 CFR Part 357) which is
also a securities intermediary; and
(ii) the participant indicates by book entry that the
book-entry security has been credited to the Indenture Trustee's
securities account;
(e) with respect to a security entitlement:
(i) the Indenture Trustee becomes the entitlement holder; or
(ii) the securities intermediary has agreed that it will
comply with entitlement orders originated by the Indenture Trustee
(f) without further consent by the entitlement holder; for the
purpose of clauses (b) and (c) hereof "delivery" means:
(i) with respect to a certificated security:
(A) the Indenture Trustee acquires possession
thereof;
(B) another person (other than a securities
intermediary) either acquires possession thereof on behalf
of the Indenture Trustee or, having previously
acquired possession thereof, acknowledges that it holds for
the Indenture Trustee; or
(C) a securities intermediary acting on behalf of
the Indenture Trustee acquires possession of thereof, only
if the certificate is in registered form and has been
specially endorsed to the Indenture Trustee by an effective
endorsement;
(ii) with respect to an uncertificated security:
(A) the issuer registers the Indenture Trustee as
the registered owner, upon original issue or registration
of transfer; or
(B) another person (other than a securities
intermediary) either becomes the registered owner thereof
on behalf of the Indenture Trustee or, having
previously become the registered owner, acknowledges that
it holds for the Indenture Trustee;
(g) for purposes of this definition, except as otherwise indicated,
the following terms shall have the meaning assigned to each such term in the
UCC:
(i) "certificated security"
(ii) "effective endorsement"
(iii) "entitlement holder"
(iv) "instrument"
(v) "securities account"
(vi) "securities entitlement"
(vii) "securities intermediary"
(viii) "uncertificated security"
(h) in each case of Delivery contemplated herein, the Indenture
Trustee shall make appropriate notations on its records, and shall cause same to
be made of the records of its nominees, indicating that securities are held in
trust pursuant to and as provided in this Agreement.
"DEPARTMENT" means the United States Department of Education, an
agency of the Federal government.
"DEPOSITOR" means the Seller in its capacity as Depositor under the
Trust Agreement.
"DEPOSITORY AGREEMENT" means, the agreement with respect to the Notes
attached to the Indenture as Exhibit B.
"DETERMINATION DATE" means, with respect to any Monthly Payment Date,
the third Business Day preceding such Monthly Payment Date.
"EARLY AMORTIZATION EVENT" means any of the following events:
(i) an Event of Default occurring under the Indenture, a
Servicer Default occurring under the Servicing Agreement or an
Administrator Default occurring under the Administration Agreement;
(ii) an Insolvency Event occurring with respect to the
Seller;
(iii) the Issuer becoming subject to registration as an
investment company under the Investment Company Act of 1940, as
amended;
(iv) as of the end of any Collection Period, the percentage
(by principal balance) of Financed Student Loans the Borrowers of
which use such loans to attend schools identified by the related
Guarantor as proprietary or vocational exceeds 35.00% of the Pool
Balance;
(v) as of the end of any Collection Period, the percentage (by
principal balance) of Financed Student Loans which are not in
repayment and are not eligible for Interest Subsidy Payments exceed
50.00% of the Pool Balance; or
(vi) the Excess Spread, with respect to each of any two
successive Quarterly Payment Dates, is less than 0.50%, or
(vii) the arithmetic average of the Delinquency Percentage as
of the end of each of two successive Collection Periods exceeds 20.00%.
"EDUCATIONAL INSTITUTION" means any institution of higher education
that participates in the guaranteed loan programs authorized by Title IV of the
Higher Education Act and which is deemed eligible by a Guarantor to participate
in such Guarantor's program.
"ELIGIBLE DEPOSIT ACCOUNT" means either (a) a segregated account with
an Eligible Institution or (b) a segregated trust account with the corporate
trust department of a depository institution organized under the laws of the
United States of America or any one of the States (or any domestic branch of a
foreign bank), having corporate trust powers and acting as trustee for funds
deposited in such account, so long as any of the securities of such depository
institution have a credit rating from each Rating Agency in one of its generic
rating categories which signifies investment grade.
"ELIGIBLE INSTITUTION" means a depository institution organized under
the laws of the United States of America or any one of the States (or any
domestic branch of a foreign bank), which (i) has (A) either a long-term senior
unsecured debt rating of "AAA" by S&P and if rated by Fitch, "AAA" by Fitch or a
short-term senior unsecured debt or certificate of deposit rating of "A-1+" by
S&P and if rated by Fitch, "F-1+" by Fitch and (B)(1) a long-term senior
unsecured debt rating of "A1" or better and (2) a short-term senior unsecured
debt rating of "P-1" by Xxxxx'x, or any other long-term, short-term or
certificate of deposit rating acceptable to the Rating Agencies and (ii) whose
deposits are insured by the FDIC. If so qualified, the Eligible Lender Trustee
or the Indenture Trustee may be considered an Eligible Institution.
"ELIGIBLE INVESTMENTS" means book-entry securities, negotiable
instruments or securities represented by instruments in bearer or registered
form which evidence:
(a) direct obligations of, and obligations fully guaranteed as to
timely payment by, the United States of America;
(b) demand deposits, time deposits or certificates of deposit of any
depository institution or trust company incorporated under the laws of the
United States of America or any State (or any domestic branch of a foreign
bank) and subject to supervision and examination by Federal or state
banking or depository institution authorities (including depository
receipts issued by any such institution or trust company as custodian with
respect to any obligation referred to in clause (a) above or portion of
such obligation for the benefit of the holders of such depository
receipts); PROVIDED, HOWEVER, that at the time of the investment or
contractual commitment to invest therein (which shall be deemed to be made
again each time funds are reinvested following each Quarterly Payment
Date), the commercial paper or other short-term senior unsecured debt
obligations (other than such obligations the rating of which is based on
the credit of a Person other than such depository institution or trust
company) thereof shall have a credit rating from each of the Rating
Agencies in the highest investment category granted thereby;
(c) commercial paper having, at the time of the investment or
contractual commitment to invest therein, a rating from each of the Rating
Agencies in the highest investment category granted thereby;
(d) investments in money market funds having a rating from each of the
Rating Agencies in the highest investment category granted thereby
(including funds for which the Indenture Trustee, the Servicer or the
Eligible Lender Trustee or any of their respective Affiliates is investment
manager or advisor);
(e) bankers' acceptances issued by any depository institution or trust
company referred to in clause (b) above;
(f) repurchase obligations with respect to any security that is a
direct obligation of, or fully guaranteed by, the United States of America
or any agency or instrumentality thereof the obligations of which are
backed by the full faith and credit of the United States of America, in
either case entered into with a depository institution or trust company
(acting as principal) described in clause (b) above;
(g) any other investment permitted by each of the Rating Agencies as
set forth in a writing delivered to the Indenture Trustee.
No obligation will be considered to be rated in the highest investment
category if it has an "r" highlighter affixed to its rating.
Fitch shall be considered to be a "Rating Agency" for the purpose of
assessing the eligibility hereunder of any investment pursuant to clause (b),
(c), (d), (e), and (f) only if Fitch is providing a rating which can be used,
pursuant to the terms of the applicable clause, to assess such investment.
"ELIGIBLE LENDER TRUSTEE" means [ ], National Association, a national
banking association, not in its individual capacity but solely as Eligible
Lender Trustee under the Trust Agreement.
"EVENT OF DEFAULT" has the meaning specified in Section 5.01 of the
Indenture.
"EXCESS SPREAD" means, with respect to any Quarterly Payment Date, the
percentage equivalent of a fraction the numerator of which is the product of (a)
four and (b) the difference between (x) the sum of (i) the Expected Interest
Collections for such Quarterly Payment Date and (ii) the Trust Swap Receipt
Amounts, if any, for such Quarterly Payment Date and (y) the sum of (i) the
Servicing Fee for such Quarterly Payment Date and all prior unpaid Servicing
Fees, (ii) the Administration Fee for such Quarterly Payment Date and all prior
unpaid Administration Fees, (iii) the Senior Noteholders' Interest Distribution
Amount for such Quarterly Payment Date and the Trust Swap Payment Amounts, if
any, for such Quarterly Payment Date, and (iv) the Subordinate Noteholders'
Interest Distribution Amount for such Quarterly Payment Date, and the
denominator of which is the average of the amount of the Pool Balance calculated
as of the first and the last day of the related Collection Period.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXCHANGED SERIAL LOAN" means a Serial Loan owned by the Seller to be
exchanged into the Trust for an Exchanged Student Loan.
"EXCHANGED STUDENT LOAN" means a Financed Student Loan that (i) was
originated under the same loan program and is guaranteed by a Guarantor and
entitles the holder thereof to receive interest based on the same interest rate
index as the Serial Loan for which it is to be exchanged (an "Exchanged Serial
Loan") and (ii) will not, at any level of such interest rate index, have an
interest rate that is greater than that of the Exchanged Serial Loan.
"EXECUTIVE OFFICER" means, with respect to any corporation, the Chief
Executive Officer, Chief Operating Officer, Chief Financial Officer, President,
any Executive Vice President, any Senior Vice President, any Vice President, the
Secretary or the Treasurer of such corporation; and with respect to any
partnership, any general partner thereof.
"EXPECTED INTEREST COLLECTIONS" means, with respect to any Quarterly
Interest Period, the sum of (i) the amount of interest accrued, net of accrued
Monthly Rebate Fees and other amounts required by the Higher Education Act to be
paid to the Department, with respect to the Financed Student Loans for the
related Student Loan Rate Accrual Period (whether or not such interest is
actually paid), (ii) all Interest Subsidy Payments and Special Allowance
Payments estimated to have accrued for such Student Loan Rate Accrual Period
whether or not actually received (taking into account any expected deduction
therefrom of Federal Origination Fees) and (iii) Investment Earnings for such
Student Loan Rate Accrual Period.
"EXPENSES" means any and all liabilities, obligations, losses,
damages, taxes, claims, actions and suits, and any and all reasonable costs,
expenses and disbursements (including reasonable legal fees and expenses) of any
kind and nature whatsoever which may at any time be imposed on, incurred by, or
asserted against the Eligible Lender Trustee or any of its officers, directors
or agents in any way relating to or arising out of the Trust Agreement, the
other Basic Documents, the Trust Estate, the administration of the Trust Estate
or the action or inaction of the Eligible Lender Trustee under the Trust
Agreement or the other Basic Documents.
"FDIC" means the Federal Deposit Insurance Corporation.
"FEDERAL GUARANTOR" means a state or private non-profit guarantor that
guarantees the payment of principal of and interest on any of the Financed
Student Loans, which agency is reinsured by the Department under the Higher
Education Act for between (x) 80% and 100% of the amount of default claims paid
by such Federal Guarantor for a given federal fiscal year for loans disbursed
prior to [ ], for 78% to 98% of default claims paid for loans disbursed on or
after [ ] but prior to [ ] any (y) 75% to 95% of the amount of default claims
paid to by such Federal Guarantor for a given federal fiscal year for loans
disbursed on or after [ ] and for 100% of death, disability, bankruptcy, closed
school and false certification claims paid.
"FEDERAL ORIGINATION FEE" means, with respect to each Consolidation
Loan that is originated by the Eligible Lender Trustee on behalf of the Issuer
and each Add-on Consolidation Loan that is added to the principal balance of a
Consolidation Loan, the origination fee payable to the Department equal to 0.5%
of the initial principal balance of such Consolidation Loan or Add-on
Consolidation Loan.
"FINANCED STUDENT LOANS" means those Student Loans that, as of any
date of determination, have been conveyed to the Issuer, consisting of the
Initial Financed Student Loans as of the Closing Date and, thereafter, any
Prefunded Loans, Serial Loans or New Loans conveyed to the Issuer from the
Seller, any Consolidation Loans originated by the Trust as provided in Section
6.07 of the Trust Agreement, any Consolidation Loans the principal balance of
which is increased by the principal balance of any related Add-on Consolidation
Loan as provided in Section 6.07 of the Trust Agreement and any Qualified
Substitute Student Loans conveyed to the Issuer as provided in Section 3.02 of
the Loan Sale Agreement.
"FITCH" means Fitch, Inc. or any successor thereto.
"FORBEARANCE LOAN" means a Student Loan during a period of forbearance
of loan collections pursuant to the Higher Education Act.
"GRACE" means the initial period following reduction by the student
Borrower to less than the minimum course load required by the Higher Education
Act, during which the student Borrower is not required to make payments on the
principal amount of the Borrower Note(s).
"GRACE LOAN" means a Student Loan during a period of Grace.
"GRANT" means mortgage, pledge, bargain, sell, warrant, alienate,
remise, release, convey, assign, transfer, create, and 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 and receive notices and other communications, to make
waivers or other agreements, to exercise all rights and options, to bring
Proceedings in the name of the Granting party or otherwise and generally to do
and receive anything that the Granting party is or may be entitled to do or
receive thereunder or with respect thereto.
"GUARANTEE AGREEMENT" means each agreement to guarantee Student Loans
entered into by the Eligible Lender Trustee on behalf of the Trust with a
Guarantor.
"GUARANTEE PAYMENT" means any payment made by a Guarantor pursuant to
a Guarantee Agreement in respect of a Student Loan.
"GUARANTOR" means the Initial Guarantors and any Additional
Guarantors.
"HIGHER EDUCATION ACT" means the Higher Education Act of 1965, as
amended, together with any rules, regulations and interpretations thereunder.
"INCENTIVE FINANCED STUDENT LOAN" means a Financed Student Loan which
is subject to an Incentive Program other than the Seller's Choice Repay(TM)
Program.
"INCENTIVE INTEREST DEPOSIT" means, with respect to each Monthly
Collection Period and Collection Period and each Incentive Financed Student
Loan, the difference, if any, between the amount of interest or other amounts
which would have been payable with respect to such Incentive Financed Student
Loan during such Monthly Collection Period or Collection Period, as applicable,
had no Incentive Program been in effect with respect to such Incentive Financed
Student Loan and the amount of interest and other amounts which were payable
with respect to such Incentive Financed Student Loan during such Monthly
Collection Period or Collection Period, as applicable, after giving effect to
such Incentive Program.
"INCENTIVE PROGRAM" means any program terminable at will by the
Administrator pursuant to which the Administrator may choose to reduce the
interest rate or offer any other benefit on a Student Loan, and shall initially
include the Seller's Choice Rates(TM) and Choice Repay(TM) Programs and the
Borrower Incentive Program, as such program may be modified from time to time.
"INDENTURE" means the Indenture dated as of [ ], between the Issuer
and the Indenture Trustee.
"INDENTURE TRUST ESTATE" means all money, instruments, rights and
other property that are subject or intended to be subject to the lien and
security interest of the Indenture for the benefit of the Noteholders (including
all property and interests Granted to the Indenture Trustee), including all
proceeds thereof.
"INDENTURE TRUSTEE" means [ ], a [ ] corporation, not in its
individual capacity but solely as Indenture Trustee under the Indenture.
"INDEPENDENT" means, when used with respect to any specified Person,
that the Person (a) is in fact independent of the Issuer, any other obligor upon
the Notes, the Seller and any Affiliate of any of the foregoing Persons, (b)
does not have any direct financial interest or any material indirect financial
interest in the Issuer, any such other obligor, the Seller or any Affiliate of
any of the foregoing Persons and (c) is not connected with the Issuer, any such
other obligor, the Seller or any Affiliate of any of the foregoing Persons as an
officer, employee, promoter, underwriter, trustee, partner, director or person
performing similar functions.
"INDEPENDENT CERTIFICATE" means a certificate or opinion to be
delivered to the Indenture Trustee under the circumstances described in, and
otherwise complying with, the applicable requirements of Section 11.01 of the
Indenture, made by an Independent appraiser or other expert appointed by an
Issuer Order and approved by the Indenture Trustee in the exercise of reasonable
care, and such opinion or certificate shall state that the signer has read the
definition of "Independent" in the Indenture and that the signer is Independent
within the meaning thereof.
"INITIAL FINANCED STUDENT LOANS" means those Financed Student Loans
conveyed to the Issuer on the Closing Date and listed on the Schedule of Student
Loans on such date.
"INITIAL GUARANTORS" means [ ], a [ ] corporation, and its successors
and certain other Federal Guarantors.
"INITIAL POOL BALANCE" means [ ].
"IN-SCHOOL LOAN" means a Student Loan during the period, excluding
periods of in-school Deferral, during which a student Borrower is enrolled at an
Educational Institution for at least the minimum course load required to
maintain such student Borrower's eligibility to borrow under the education loan
programs administered by the Guarantor.
"INSOLVENCY EVENT" means, with respect to a specified Person, (a) the
filing of a decree or order for relief by a court having jurisdiction in the
premises in respect of such Person or any substantial part of its property in an
involuntary case under any applicable Federal or state bankruptcy, insolvency or
other similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official for
such Person or for any substantial part of its property, or ordering the
winding-up or liquidation of such Person's affairs, and such decree or order
shall remain unstayed and in effect for a period of sixty consecutive days; or
(b) the commencement by such Person of a voluntary case under any applicable
Federal or state bankruptcy, insolvency or other similar law now or hereafter in
effect, or the consent by such Person to the entry of an order for relief in an
involuntary case under any such law, or the consent by such Person to the
appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official for such Person or for any
substantial part of its property, or the making by such Person of any general
assignment for the benefit of creditors, or the failure by such Person generally
to pay its debts as such debts become due, or the taking of action by such
Person in furtherance of any of the foregoing.
"INTEREST SUBSIDY PAYMENTS" means payments, designated as such,
consisting of interest subsidies by the Department in respect of the Financed
Student Loans to the Eligible Lender Trustee on behalf of the Trust in
accordance with the Higher Education Act.
"INVESTMENT EARNINGS" means, with respect to any Monthly Payment Date,
the investment earnings (net of losses and investment expenses) on amounts on
deposit in the Trust Accounts to be deposited into the Collection Account on or
prior to such Monthly Payment Date or Quarterly Payment Date, as applicable,
pursuant to Section 2(c)(v) of the Administration Agreement.
"ISSUER" means Asset Backed Securities Corporation Student Loan Trust
[ ] until a successor replaces it and, thereafter, means the successor and, for
purposes of any provision contained in the Indenture and required by the TIA,
each other obligor on the Notes.
"ISSUER ORDER" and "ISSUER REQUEST" means a written order or request
signed in the name of the Issuer by any one of its Authorized Officers and
delivered to the Indenture Trustee.
"LIBOR DETERMINATION DATE" means, (a) with respect to any Quarterly
Interest Period, other than the initial Quarterly Interest Period, the day that
is the second business day prior to the commencement of the LIBOR Reset Period
within such Quarterly Interest Period (or, in the case of the initial LIBOR
Reset Period, on the second business day prior to the Closing Date) and (b) with
respect to the initial Quarterly Interest Period, as determined pursuant to
clause (a) for the period from the Closing Date to but excluding [ ] and as
determined on the second Business Day prior to [ ] for the period from [ ] to
but excluding [ ]. For purposes of this definition, a business day is any day in
which banks in the City of London and The City of New York are open for the
transaction of international business.
"LIBOR RESET PERIOD" means the three-month period commencing on the
twenty-eighth day (or, if any such day is not a Business Day, on the next
succeeding Business Day) of each January, April, July and October and ending on
the day immediately preceding the following LIBOR Reset Period; PROVIDED,
HOWEVER, that the initial LIBOR Reset Period will commence on the Closing Date.
"LIEN" means a security interest, lien, charge, pledge, equity or
encumbrance of any kind, other than tax liens and any other liens, if any, which
attach to the respective Student Loan by operation of law as a result of any act
or omission by the related Obligor.
"LIQUIDATED STUDENT LOAN" means any defaulted Financed Student Loan
liquidated by the Servicer or which the Servicer has, after using all reasonable
efforts to realize upon the such Student Loan, determined to charge off.
"LIQUIDATION PROCEEDS" means, with respect to any Liquidated Student
Loan, the moneys collected in respect thereof from whatever source, other than
Recoveries, net of the sum of any reasonable out-of-pocket expenses incurred by
the Servicer in connection with such liquidation and any amounts required by law
to be remitted to the Borrower on such Liquidated Student Loan.
"LOAN PURCHASE AMOUNT" means with respect to a Prefunded Loan, a New
Loan or a Serial Loan to be purchased from the Seller by the Issuer, an amount
equal to the sum of (i) the Purchase Collateral Balance and (ii) the Purchase
Premium Amount; PROVIDED, HOWEVER, that after the Revolving Period, the Purchase
Premium Amount payable in respect of the purchase of a Serial Loan will be
payable on the next succeeding Quarterly Payment Date from Reserve Account
Excess, if any, for such Quarterly Payment Date in accordance with Section
2.02(c) of the Loan Sale Agreement; and PROVIDED, FURTHER, that if the Parity
Date occurs before the end of the Revolving Period, then, from the Parity Date
to the end of the Revolving Period, the Purchase Premium Amount payable in
respect of the purchase of a Serial Loan or a New Loan will be payable on the
next succeeding Quarterly Payment Date from Reserve Account Excess, if any, for
such Quarterly Payment Date that is available after all distributions from such
excess having a higher priority than payment of such Purchase Premium Amounts
have been made in accordance with Section 2(e) of the Administration Agreement;
PROVIDED, HOWEVER, that the Loan Purchase Amount for any Exchanged Serial Loan
shall not include any Purchase Premium Amount.
"LOAN SALE AGREEMENT" means the Loan Sale Agreement dated as of [ ],
among the Issuer, [ ], the Seller, and the Eligible Lender Trustee.
"LOAN SERVICES" means [ ], [ ] corporation.
"MINIMUM PURCHASE PRICE" means, as to any Quarterly Payment Date, an
amount equal to the greater of (i) the aggregate Purchase Amounts of the
Financed Student Loans as of the end of the Collection Period immediately
preceding such Quarterly Payment Date and (ii) an amount that would be
sufficient to (A) reduce the outstanding principal amount of the Notes then
outstanding on such Quarterly Payment Date to zero, (B) pay to the Noteholders
the Noteholders' Interest Distribution Amount payable on such Quarterly Payment
Date (without giving effect to the Subordinate Note Trigger), (C) pay to any
Swap Counterparties all amounts owed by the Trust to any Swap Counterparties
under the Swap Agreements, and (D) pay to the Servicer and the Administrator all
amounts owed to such entities under any of the Basic Documents.
"MONTHLY AVAILABLE FUNDS" means, with respect to each Monthly Payment
Date that is not a Quarterly Payment Date, the sum of the following amounts with
respect to the related Monthly Collection Period: (i) all collections received
by the Servicer on the Financed Student Loans during such Collection Period
(net, for the first Collection Period, of interest accrued prior to the Cutoff
Date that is not to be capitalized) and remitted to the Indenture Trustee
(including any Guarantee Payments received with respect to the Financed Student
Loans); (ii) any Interest Subsidy Payments and Special Allowance Payments
received by the Eligible Lender Trustee during such Monthly Collection Period
with respect to the Financed Student Loans; (iii) all Liquidation Proceeds from
any Financed Student Loans which became Liquidated Student Loans during such
Monthly Collection Period in accordance with the Servicer's customary servicing
procedures, and all Recoveries in respect of Liquidated Student Loans which were
written off in prior Monthly Collection Periods, in each case which have been
received by the Servicer and remitted to the Indenture Trustee; (iv) that
portion of the amounts released from the Collateral Reinvestment Account and the
Prefunding Account with respect to Additional Fundings relating to those
interest costs on the Financed Student Loans which are or will be capitalized
and any amounts transferred on a Determination Date from the Collateral
Reinvestment Account to the Collection Account pursuant to Section 2(f)(i)(E) of
the Administration Agreement; (v) the aggregate Purchase Amounts received by the
Indenture Trustee for those Financed Student Loans repurchased by the Seller or
purchased by the Servicer under an obligation which arose during the related
Monthly Collection Period; (vi) Investment Earnings for such Monthly Payment
Date; and (vii) with respect to each Monthly Payment Date other than a Quarterly
Payment Date and other than an Monthly Payment Date immediately succeeding a
Quarterly Payment Date, the Monthly Available Funds remaining from the Monthly
Collection Period relating to the preceding Monthly Payment Date after giving
effect to the application of such Monthly Available Funds on such preceding
Monthly Payment Date; PROVIDED, HOWEVER, that if with respect to any Monthly
Payment Date there would not be sufficient funds, after application of the
Monthly Available Funds (as defined above) and amounts available from the
Prefunding Account and from the Reserve Account, to pay any of the items
specified in Section 2(d)(iv) of the Administration Agreement, then the Monthly
Available Funds for such Monthly Payment Date will include, in addition to the
Monthly Available Funds (as defined above), amounts on deposit in the Collection
Account on the Determination Date relating to such Monthly Payment Date which
would have constituted Monthly Available Funds for the Monthly Payment Date
succeeding such Monthly Payment Date up to the amount necessary to pay such
items, and the Monthly Available Funds for such succeeding Monthly Payment Date
will be adjusted accordingly; and PROVIDED, FURTHER, that the Monthly Available
Funds will exclude (A) all payments and proceeds (including Liquidation
Proceeds) of any Financed Student Loan the Purchase Amount of which has been
included in the Monthly Available Funds for a prior Monthly Collection Period,
(B) except as expressly included in clause (iv) above, amounts released from the
Collateral Reinvestment Account, (C) any Monthly Rebate Fees paid during the
related Monthly Collection Period by or on behalf of the Trust and (D) any
collections in respect of principal on the Financed Student Loans applied during
the related Monthly Collection Period by the Eligible Lender Trustee on behalf
of the Trust prior to the end of the Revolving Period to make deposits to the
Collateral Reinvestment Account pursuant to Section 2(d)(i) of the
Administration Agreement and, after the end of the Revolving Period, any
expenditure of the Net Principal Cash Flow Amount used to fund the addition of
any Add-on Consolidation Loans, to purchase Serial Loans or to fund the
acquisition of Exchanged Serial Loans during such Monthly Collection Period.
"MONTHLY COLLECTION PERIOD" means, with respect to any Monthly Payment
Date that is not a Quarterly Payment Date, the calendar month immediately
preceding the month of such Monthly Payment Date.
"MONTHLY PAYMENT DATE" means the twenty-eighth day of each month (or,
if any such date is not a Business Day, on the next succeeding Business Day)
commencing [ ].
"MONTHLY REBATE FEE" means, for each calendar month and with respect
to each Consolidation Loan that was originated on or after [ ] (except for
Consolidation Loans referred to in clause (B) below), the fee payable to the
Department equal to the product of (x) one-twelfth, (y) (A) with respect to all
of the Consolidation Loans (other than those, the applications of which have
been received during the period from October [ ] through January [ ]), 1.05% or
(B) with respect to Consolidation Loans, the applications of which have been
received during the period from October [ ] through January [ ], 0.62% and (z)
the outstanding principal balance of such Consolidation Loan (including any
increases in the principal balance of a Consolidation Loan due to the addition
of the principal balance of a related Add-on Consolidation Loan) plus accrued
interest on such Consolidation Loan as of the last day of such month.
"MOODY'S" means 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 Revolving Period, the Capitalized Interest
Amount for such Collection Period or for each such preceding calendar month, as
the case may be.
"NET TRUST SWAP PAYMENT" means, with respect to any Quarterly Payment
Date, the difference, if negative, between the regularly scheduled amount
(without regard to any carryover amounts or Termination Payments) owed by any
Swap Counterparty to the Trust on a Quarterly Payment Date and the regularly
scheduled amount (without regard to any carryover amounts or Termination
Payments) owed by the Trust to such Swap Counterparty on such Quarterly Payment
Date pursuant to Section 2 of a Swap Agreement.
"NET TRUST SWAP PAYMENT CARRYOVER SHORTFALL" means, with respect to
any Quarterly Payment Date with respect to which amounts are still owing to any
Swap Counterparty in respect of a Swap Agreement, the excess of (i) the Trust
Swap Payment Amount for such Swap Agreement on the preceding Quarterly Payment
Date over (ii) the amount actually received by such Swap Counterparty out of the
Available Funds or the Reserve Account on such preceding Quarterly Payment Date
plus interest on such excess from such preceding Quarterly Payment Date to the
current Quarterly Payment Date at the rate of Three-Month LIBOR for the related
Quarterly Interest Period.
"NET TRUST SWAP RECEIPT" means, with respect to any Quarterly Payment
Date, the difference, if positive, between the regularly scheduled amount
(without regard to any carryover amounts or Termination Payments) owed by any
Swap Counterparty to the Trust on a Quarterly Payment Date and the regularly
scheduled amount (without regard to any carryover amounts or Termination
Payments) owed by the Trust to such Swap Counterparty on such Quarterly Payment
Date pursuant to Section 2 of a Swap Agreement.
"NET TRUST SWAP RECEIPT CARRYOVER SHORTFALL" means, with respect to
any Quarterly Payment Date with respect to which amounts are still owing to the
Trust in respect of a Swap Agreement, the excess of (i) the Trust Swap Receipt
Amount for such Swap Agreement on the preceding Quarterly Payment Date over (ii)
the amount actually paid by the related Swap Counterparty to the Trust on such
preceding Quarterly Payment Date plus interest on such excess from such
preceding Quarterly Payment Date to the current Quarterly Payment Date at the
rate of Three-Month LIBOR for the related Quarterly Interest Period.
"NEW LOAN" means a Financed Student Loan which (i) is made by an
eligible lender under the Higher Education Act to a Borrower who is not a
Borrower under any Initial Financed Student Loan, (ii) is made under a loan
program which existed as of the Closing Date, and (iii) is guaranteed by a
Guarantor.
"91-DAY TREASURY BILLS" means direct obligations of the United States
with a maturity of thirteen weeks.
"NOTE OWNER" means, with respect to a Book-Entry Note, the Person who
is the owner of such Book-Entry Note, as reflected on the books of the Clearing
Agency, or on the books of a Person maintaining an account with such Clearing
Agency (directly as a Clearing Agency Participant or as an indirect participant,
in each case in accordance with the rules of such Clearing Agency).
"NOTE RATE" means any one of the Class A-1 Note Rate, the Class A-2
Note Rate or the Subordinate Note Rate, as the case may be.
"NOTE REGISTER" and "NOTE REGISTRAR" have the respective meanings
specified in Section 2.04 of the Indenture.
"NOTEHOLDER" means the Person in whose name a Note is registered in
the Note Register.
"NOTEHOLDERS' INTEREST DISTRIBUTION AMOUNT" means, with respect to any
Quarterly Payment Date, the sum of the Class A-1 Noteholders' Interest
Distribution Amount, the Class A-2 Noteholders' Interest Distribution Amount and
the Subordinate Noteholders' Interest Distribution Amount.
"NOTES" means, collectively, the Class A-1 Notes, Class A-2 Notes and
the Subordinate Notes.
"OBLIGOR" on a Student Loan means the borrower or co-borrowers of such
Student Loan and any other Person who owes payments in respect of such Student
Loan, including the Guarantor thereof and, with respect to any Interest Subsidy
Payment or Special Allowance Payment, if any, thereon, the Department.
"OFFICERS' CERTIFICATE" means (i) in the case of the Issuer, a
certificate signed by any two Authorized Officers of the Issuer, under the
circumstances described in, and otherwise complying with, the applicable
requirements of Section 11.01 of the Indenture, and delivered to the Indenture
Trustee and (ii) in the case of the Seller, the Servicer or the Administrator, a
certificate signed by any two Authorized Officers of the Seller, the Servicer or
the Administrator, as appropriate.
"OPINION OF COUNSEL" means (i) with respect to the Issuer, one or more
written opinions of counsel who may, except as otherwise expressly provided in
the Indenture, be employees of or counsel to the Issuer and who shall be
satisfactory to the Indenture Trustee, and which opinion or opinions shall be
addressed to the Indenture Trustee as Indenture Trustee, shall comply with any
applicable requirements of Section 11.01 of the Indenture, and shall be in form
and substance satisfactory to the Indenture Trustee and (ii) with respect to the
Seller, the Administrator, the Servicer or a Federal Guarantor, one or more
written opinions of counsel who may be an employee of or counsel to the Seller,
the Administrator, the Servicer or such Federal Guarantor, which counsel shall
be acceptable to the Indenture Trustee, the Eligible Lender Trustee or the
Rating Agencies, as applicable.
"OUTSTANDING" means, as of the date of determination, all Notes
theretofore authenticated and delivered under this Indenture except:
(i) Notes theretofore cancelled by the Note Registrar or
delivered to the Note Registrar for cancellation;
(ii) Notes or portions thereof the payment for which money
in the necessary amount has been theretofore deposited with the
Indenture Trustee or any Paying Agent in trust for the Noteholders
thereof (PROVIDED, HOWEVER, that if such Notes are to be redeemed,
notice of such redemption has been duly given pursuant to the
Indenture); and
(iii) Notes in exchange for or in lieu of other Notes which
have been authenticated and delivered pursuant to the Indenture unless
proof satisfactory to the Indenture Trustee is presented that any such
Notes are held by a bona fide purchaser;
PROVIDED, HOWEVER, that in determining whether the Noteholders of the requisite
Outstanding amount of the Notes have given any request, demand, authorization,
direction, notice, consent or waiver hereunder or under any other Basic
Document, Notes owned by the Issuer, any other obligor upon the Notes, the
Seller or any Affiliate of any of the foregoing Persons shall be disregarded and
deemed not to be Outstanding, except that, in determining whether the Indenture
Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Notes that a
Responsible Officer of the Indenture Trustee either actually knows to be so
owned or has received written notice thereof shall be so disregarded. Notes so
owned that have been pledged in good faith may be regarded as Outstanding if the
pledgee establishes to the satisfaction of the Indenture Trustee the pledgee's
right so to act with respect to such Notes and that the pledgee is not the
Issuer, any other obligor upon the Notes, the Seller or any Affiliate of any of
the foregoing Persons.
"OUTSTANDING AMOUNT" means the aggregate principal amount of all Notes
Outstanding at the date of determination.
"PARITY DATE" means the first Quarterly Payment Date on which the
aggregate principal amount of the Notes, after giving effect to all
distributions on such date, is no longer in excess of the Pool Balance as of the
last day of the related Collection Period.
"PAYING AGENT" means the Indenture Trustee or any other Person that
meets the eligibility standards for the Indenture Trustee specified in Section
6.11 of the Indenture and is authorized by the Issuer to make the payments to
and distributions from the Collection Account and payments of principal of and
interest and any other amounts owing on the Notes on behalf of the Issuer.
"PERSON" means any individual, corporation, estate, partnership, joint
venture, limited liability company, limited liability partnership, association,
joint stock company, trust (including any beneficiary thereof), unincorporated
organization or government or any agency or political subdivision thereof.
"PHYSICAL PROPERTY" has the meaning assigned to such term as the
definition of "Delivery" above.
"PLUS LOAN" means a Student Loan designated as such that is made under
the Parent Loans to Undergraduate Students Program pursuant to the Higher
Education Act.
"POOL BALANCE" means, as of the close of business on the last day of
any Collection Period, the aggregate principal balances of the Financed Student
Loans as of such day (including accrued interest thereon for the immediately
preceding Collection Period to the extent such interest will be capitalized upon
commencement of repayment, excluding any Purchased Student Loans and Liquidated
Student Loans).
"PREDECESSOR NOTE" means, with respect to any particular Note, every
previous Note evidencing all or a portion of the same debt as that evidenced by
such particular Note; and, for the purpose of this definition, any Note
authenticated and delivered under Section 2.05 of the Indenture and in lieu of a
mutilated, lost, destroyed or stolen Note shall be deemed to evidence the same
debt is the mutilated, lost, destroyed or stolen Note.
"PREFUNDING ACCOUNT" means the account designated as such, established
and maintained pursuant to Section 2(c) of the Administration Agreement, which
shall be an Eligible Deposit Account.
"PREFUNDED LOANS" means those Financed Student Loans acquired by the
Issuer with funds on deposit in the Prefunding Account.
"PREFUNDING ACCOUNT CLOSING DATE DEPOSIT" means $[ ].
"PRINCIPAL CASH FLOW AMOUNT" means, with respect to any Quarterly
Payment Date, the sum of the following amounts with respect to the related
Collection Period, or with respect to any other date of determination, the sum
of the following amounts with respect to the period specified: (i) that portion
of all collections received by the Servicer and remitted to the Indenture
Trustee on the Financed Student Loans that is allocable to principal (including
the portion of any Guarantee Payments received that is allocable to principal of
the Financed Student Loans); (ii) all Liquidation Proceeds attributable to the
principal amount of Financed Student Loans which became Liquidated Student Loans
during such Collection Period, or such other specified period, in accordance
with the Servicer's customary servicing procedures and have been received by the
Servicer during such Collection Period and remitted to the Indenture Trustee,
together with all Realized Losses on such Financed Student Loans; (iii) to the
extent attributable to principal, the Purchase Amount received by the Indenture
Trustee with respect to each Financed Student Loan repurchased by the Seller or
purchased by the Servicer as a result of a breach of a representation, warranty
or covenant which arose during the related Collection Period or such other
specified period; and (iv) the Principal Distribution Adjustment; PROVIDED,
HOWEVER, that the Principal Distribution Amount will exclude all payments and
proceeds (including Liquidation Proceeds) of any Financed Student Loans the
Purchase Amount of which has been included in Available Funds for a prior
Collection Period and if the Revolving Period terminated during the related
Collection Period, will exclude the amount of collections in respect of
principal on the Financed Student Loans during such Collection Period that were
applied by the Issuer during the Collection Period to purchase New Loans with
amounts on deposit in the Collateral Reinvestment Account or that were on
deposit in the Collateral Reinvestment Account at the end of the Revolving
Period.
"PRINCIPAL DISTRIBUTION ADJUSTMENT" means, with respect to any
Quarterly Payment Date, the amount of the Available Funds on such Quarterly
Payment Date to be used to make additional principal distributions to
Noteholders to account for (i) the amount of any insignificant balance remaining
outstanding as of such Quarterly Payment Date on a Financed Student Loan after
receipt of a final payment from a Borrower or a Guarantor, when such
insignificant balances are waived in the ordinary course of business by the
Servicer at the direction of the Administrator in accordance with the Servicing
Agreement or (ii) the amount of principal collections erroneously treated as
interest collections including, without limitation, by reason of the failure by
a Borrower to capitalize interest that had been expected to be capitalized;
PROVIDED, HOWEVER, that the Principal Distribution Adjustment for any Quarterly
Payment Date shall not exceed the lesser of (x) $100,000 and (y) the amount of
any Reserve Account Excess after giving effect to all distributions to be made
therefrom on such Quarterly Payment Date other than distributions to the Company
out of such excess.
"PRINCIPAL DISTRIBUTION AMOUNT" means, with respect to any Quarterly
Payment Date occurring after the Revolving Period, the Net Principal Cash Flow
Amount for such Quarterly Payment Date minus the sum of (i) any funds remitted
to the Seller during the preceding Collection Period for the Purchase Collateral
Balance of Serial Loans and (ii) any funds which are applied during the
preceding Collection Period to fund the addition of the principal balance of any
Add-on Consolidation Loan to the principal balance of a related Consolidation
Loan.
"PROCEEDING" means any suit in equity, action at law or other judicial
or administrative proceeding.
"PURCHASE AMOUNT" means, with respect to a Financed Student Loan other
than a Serial Loan to be purchased from the Issuer, the amount required, as of
the close of business on the last day of a Monthly Interest Period or Quarterly
Interest Period, as applicable, to prepay in full the respective Student Loan
under the terms thereof including all accrued borrower interest thereon;
PROVIDED, HOWEVER, that the Purchase Amount for a Financed Student Loan, which
is being repurchased by the Seller as a result of a breach of the representation
and warranty provided for in the last sentence of the first paragraph of Exhibit
C to the Loan Sale Agreement will be calculated without regard to any amount
which the Seller has advanced with respect to such loan and which was not
reflected by the principal balance of such loan as of the Cutoff Date (or the
applicable Subsequent Cutoff Date, as the case may be) after the loan was sold
into the Trust.
"PURCHASE COLLATERAL BALANCE" means with respect to a Prefunded Loan,
a New Loan or a Serial Loan to be purchased by the Issuer, an amount equal, as
of the related Subsequent Cut-off Date, to the principal balance of such loan
plus accrued borrower interest thereon if and to the extent that such interest
is not then payable and will, pursuant to the terms of such loan, be capitalized
and added to the principal balance of such loan.
"PURCHASE PREMIUM AMOUNT" means with respect to a Prefunded Loan, a
New Loan or a Serial Loan (other than an Exchanged Serial Loan) to be purchased
by the Issuer, an additional amount to the Purchase Collateral Balance equal to
the sum of (i) an amount not to exceed 1.5% of the related Purchase Collateral
Balance and (ii) accrued borrower interest on the principal balance owed by the
applicable Borrower thereon to the extent that such interest will not be
capitalized.
"PURCHASED STUDENT LOAN" means a Financed Student Loan purchased as of
the close of business on the last day of a Monthly Collection Period or
Collection Period, as applicable, by the Servicer pursuant to Section 3.05 of
the Servicing Agreement or repurchased by the Seller pursuant to Section 3.02 of
the Loan Sale Agreement.
"QUALIFIED SUBSTITUTE STUDENT LOAN" means a Student Loan that (i) was
originated under the same loan program and is guaranteed by a Guarantor and
entitles the holder thereof to receive interest based on the same interest rate
index as the related Deleted Student Loan for which it is to be substituted, and
(ii) will not, at any level of such interest rate index, have an interest rate
that is less than that of such Deleted Student Loan.
"QUARTERLY PAYMENT DATE" means the Monthly Payment Date occurring in
each [ ], [ ], [ ] and [ ], commencing with the Monthly Payment Date occurring
in [ ]
"QUARTERLY INTEREST PERIOD" means, with respect to a Quarterly Payment
Date, the period from and including the Quarterly Payment Date immediately
preceding such Quarterly Payment Date (or in the case of the first Quarterly
Payment Date, the Closing Date) to but excluding such Quarterly Payment Date. In
the case of the initial Quarterly Interest Period, interest will accrue for the
period from the Closing Date to but excluding [ ] (computed on the basis of the
actual number of days elapsed in such Quarterly Interest Period over a year of
360 days) based on Three-Month LIBOR as determined on the initial LIBOR
Determination Date and interest will accrue for the period from July [ ] to but
excluding October [ ] (computed on the basis of the actual number of days
elapsed in such Quarterly Interest Period over a year of 360 days) based on
Three-Month LIBOR as determined on the LIBOR Determination Date in July [ ].
"RATING AGENCY" means Xxxxx'x, S&P and Fitch. If no such organization
or successor is any longer in existence, "Rating Agency" shall be a nationally
recognized statistical rating organization or other comparable Person designated
by the Seller, notice of which designation shall be given to the Indenture
Trustee, the Eligible Lender Trustee and the Servicer.
"RATING AGENCY CONDITION" means, with respect to any action, that each
Rating Agency shall have been given ten days' prior notice thereof and that each
of the Rating Agencies shall have notified the Seller, the Servicer, the
Eligible Lender Trustee and the Indenture Trustee in writing that such action
will not result in and of itself in a reduction or withdrawal of the then
current rating of the Class A-1 Notes, the Class A-2 Notes or the Subordinate
Notes.
"RATING AGENCY SWAP CONDITION" means, with respect to any new Swap
Agreement or amendment to a Swap Agreement, that (1) the Swap Counterparty has a
counterparty rating of at least "A2" by Moody's or "A" by S& P; (2) each Rating
Agency shall have been given ten days' prior written notice of the name of the
related Swap Counterparty and the terms of the related Swap Agreement; and (3)
prior to the expiration of ten days following such notice that none of the
Rating Agencies shall have notified the Administrator, the Seller, the Servicer,
the Eligible Lender Trustee or the Indenture Trustee in writing that such action
will result in and of itself in a reduction, withdrawal or placement of credit
watch on the then current rating of the Class A-1 Notes, the Class A-2 Notes or
the Subordinate Notes.
"REALIZED LOSSES" means the excess of the aggregate principal balance
of any Liquidated Student Loan plus accrued but unpaid interest thereon over
Liquidation Proceeds to the extent allocable to principal.
"RECORD DATE" means, with respect to a Quarterly Payment Date or a
Redemption Date, the close of business on the twenty-seventh day of the calendar
month in which such Quarterly Payment Date or Redemption Date occurs (whether or
not such date is a Business Day).
"RECOVERIES" means, with respect to any Liquidated Student Loan, all
monies in respect thereof, from whatever source, that have been received by the
Servicer and remitted to the Indenture Trustee during any Monthly Collection
Period or Collection Period, as applicable, following the Monthly Collection
Period or Collection Period, as applicable, in which such Financed Student Loan
became a Liquidated Student Loan, net of the sum of all reasonable amounts
expended by the Servicer for the account of any Obligor to the extent not
previously reimbursed from Liquidation Proceeds or otherwise and any amounts
required by law to be remitted to the Obligor.
"REDEMPTION DATE" means in the case of a payment to the Noteholders
pursuant to Section 10.01 of the Indenture, the Quarterly Payment Date specified
by the Administrator or the Issuer pursuant to Section 10.01 (b) or (c) of the
Indenture.
"REDEMPTION PRICE" means, in the case of a payment made to the
Noteholders pursuant to Section 10.01 (b) or (c) of the Indenture, the
Outstanding Amount of the Notes and all accrued and unpaid interest thereon.
"REFERENCE BANKS" means four major banks in the London interbank
market selected by the Administrator.
"REPAYMENT" means the period of time during which a Borrower is
required to make installment payments to repay the aggregate principal amount
plus accrued interest of all amounts borrowed by virtue of the Borrower Note(s)
executed by such Borrower.
"REPAYMENT LOAN" means a Student Loan during a period of Repayment.
"RESERVE ACCOUNT" means the account designated as such, established
and maintained pursuant to Section 2(c) of the Administration Agreement, which
shall be an Eligible Deposit Account.
"RESERVE ACCOUNT EXCESS" has the meaning specified in Section 2(e)(ii)
of the Administration Agreement.
"RESERVE ACCOUNT INITIAL DEPOSIT" means [ ].
"RESERVE ACCOUNT TRIGGER" will be triggered with respect to a
Quarterly Payment Date if (1) Three-Month LIBOR for the related LIBOR Reset
Period exceeds (2) the greater of (a) the T-Xxxx Rate for the related Quarterly
Interest Period and (b) the 91-Day Treasury Xxxx rate in effect for the variable
rate Student Loans effective as of the preceding July 1, by more than 1.25%;
provided that the Reserve Account Trigger may be modified for any reason
(including as a result of the Trust entering into one or more Swap Agreements)
upon satisfaction of the Rating Agency Condition.
"RESPONSIBLE OFFICER" means, with respect to the Indenture Trustee,
any officer within the Corporate Trust Office of the Indenture Trustee,
including any vice president, assistant vice president, assistant treasurer,
assistant secretary, or any other officer of the Indenture Trustee customarily
performing functions similar to those performed by any of the above designated
officers, with direct responsibility for the administration of the Indenture and
the other Basic Documents on behalf of the Indenture Trustee and also, with
respect to a particular matter, any other officer to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.
"REVOLVING PERIOD" means the period from the close of business on the
Closing Date until the first to occur of (i) an Early Amortization Event or (ii)
the last day of the Collection Period preceding the April [ ] Quarterly Payment
Date.
"S&P" means Standard & Poor's, a division of The XxXxxx-Xxxx
Companies, Inc.
"SCHEDULE OF STUDENT LOANS" means the listing of the Financed Student
Loans set forth in Schedule A to the Loan Sale Agreement and to the Indenture
(which Schedule may be in the form of microfiche) as the same may be amended
from time to time.
"SECRETARY" means the Secretary of the Department, or any predecessor
or successor to the functions thereof under the Higher Education Act.
"SECURITIES ACT" means the federal Securities Act of 1933, as amended.
"SELLER" means Asset Backed Securities Corporation, in its capacity as
seller of the Financed Student Loans.
"SENIOR NOTEHOLDER" means the Noteholder of a Senior Note.
"SENIOR NOTES" means collectively, the Class A-1 Notes and the Class
A-2 Notes.
"SENIOR NOTEHOLDERS' DISTRIBUTION AMOUNT" means, with respect to any
Quarterly Payment Date, the sum of the Class A-1 Noteholders' Interest
Distribution Amount, the Class A-2 Noteholders' Interest Distribution Amount and
the Senior Noteholders' Principal Distribution Amount for such Quarterly Payment
Date.
"SENIOR NOTEHOLDERS' INTEREST DISTRIBUTION AMOUNT" means, with respect
to any Quarterly Payment Date, the sum of (i) the Class A-1 Noteholders'
Interest Distribution Amount and (ii) the Class A-2 Noteholders' Interest
Distribution Amount, each for such Quarterly Payment Date.
"SENIOR NOTEHOLDERS' PRINCIPAL CARRYOVER SHORTFALL" means, as of the
close of any Quarterly Payment Date, the excess of (i) the Senior Noteholders'
Principal Distribution Amount on such Quarterly Payment Date over (ii) the
amount of principal actually distributed to the Senior Noteholders on such
Quarterly Payment Date.
"SENIOR NOTEHOLDERS' PRINCIPAL DISTRIBUTION AMOUNT" means, with
respect to any Quarterly Payment Date (if the Revolving Period has terminated on
or prior to the end of the related Collection Period with respect to such
Quarterly Payment Date), the Principal Distribution Amount for such Quarterly
Payment Date plus the Senior Noteholders' Principal Carryover Shortfall as of
the close of the preceding Quarterly Payment Date; provided, however, that the
Senior Noteholders' Principal Distribution Amount will not exceed the
outstanding aggregate principal balance of the Senior Notes. In addition, (i) on
the Class A-1 Note Final Maturity Date, the principal required to be distributed
to Class A-1 Noteholders will include the amount required to reduce the
outstanding principal balance of the Class A-1 Notes to zero and (ii) on the
Class A-2 Note Final Maturity Date, the principal required to be distributed to
Class A-2 Noteholders will include the amount required to reduce the outstanding
principal balance of the Class A-2 Notes to zero.
"SENIOR NOTES" means, collectively, the Class A-1 Notes and the Class
A-2 Notes.
"SERIAL LOAN" means a Financed Student Loan which (i) is made by an
eligible lender under the Higher Education Act to a Borrower who is also a
Borrower under at least one outstanding Financed Student Loan and is acquired by
the Seller, (ii) is made under the same federal loan program as such Financed
Student Loan, (iii) has the same Guarantor as such Financed Student Loan and
(iv) has a final maturity date during or before the Collection Period preceding
the Subordinate Note Final Maturity Date.
"SERVICER" means Loan Services, in its capacity as servicer of the
Financed Student Loans or any permitted Successor Servicer.
"SERVICER DEFAULT" means an event specified in Section 6.01 of the
Servicing Agreement.
"SERVICER LIABILITY LIMIT" has the meaning specified in Section
3.05(a) of the Servicing Agreement.
"SERVICER LIABILITY PERIOD" has the meaning specified in Section
3.05(a) of the Servicing Agreement.
"SERVICING AGREEMENT" means the Servicing Agreement dated as of [ ],
among the Issuer, the Servicer, the Seller and the Eligible Lender Trustee.
"SERVICING FEE" has the meaning specified in Section 3.06 of the
Servicing Agreement.
"SERVICING FEE SHORTFALL" has the meaning specified in Section 3.06 of
the Servicing Agreement.
"SLS LOAN" means a Student Loan designated as such that is made under
the Supplemental Loans for Students Program pursuant to the Higher Education
Act.
"SPECIAL ALLOWANCE PAYMENTS" means payments, designated as such,
consisting of effective interest subsidies by the Department in respect of the
Financed Student Loans to the Eligible Lender Trustee on behalf of the Trust in
accordance with the Higher Education Act.
"SPECIAL DETERMINATION DATE" none.
"SPECIFIED RESERVE ACCOUNT BALANCE" with respect to any Quarterly
Payment Date means the greatest of: (a) [ ] of the principal balance of the
Notes after taking into account the effect of distributions on such Quarterly
Payment Date, (b) $[ ] after giving effect to payments on the Quarterly Payment
Date and (c) if the Reserve Account Trigger is triggered with respect to such
Quarterly Payment Date, the outstanding principal amount of the Notes after
giving effect to payments on the Quarterly Payment Date; provided, HOWEVER, that
in no event shall the Specified Reserve Account Balance exceed the outstanding
principal balance of the Notes.
"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.
"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 the Guarantor.
"STUDENT LOAN FILES" means the documents relating to the Financed
Student Loans specified in Section 2.01 of the Servicing Agreement.
"STUDENT LOAN RATE ACCRUAL PERIOD" means, with respect to any
Quarterly Interest Date, the Collection Period preceding such Quarterly Payment
Date.
"SUBORDINATE NOTE" means a Class B Floating Rate Asset-Backed
Subordinate Note issued pursuant to the Indenture, substantially in the form of
Exhibit A-4 thereto.
"SUBORDINATE NOTE FINAL MATURITY DATE" means the [ ] Quarterly Payment
Date.
"SUBORDINATE NOTE POOL FACTOR" as of the close of business on a
Quarterly Payment Date means a seven-digit decimal figure equal to the
outstanding principal balance of the Subordinate Notes divided by the original
outstanding principal balance of the Subordinate Notes. The Subordinate Note
Pool Factor will be 1.0000000 as of the Closing Date; thereafter, the
Subordinate Note Pool Factor will decline to reflect reductions in the
outstanding principal balance of the Subordinate Notes.
"SUBORDINATE NOTE RATE" means, with respect to any Quarterly Payment
Date and the related Quarterly Interest Period, the interest rate per annum
(computed on the basis of the actual number of days in such Quarterly Interest
Period over a year of 360 days) equal to Three-Month LIBOR for the related LIBOR
Reset Period plus [ ], provided that if the Subordinate Note Trigger is
triggered with to respect any Quarterly Payment Date, the Subordinate Note Rate
shall equal zero until the Subordinate Note Trigger is no longer triggered.
"SUBORDINATE NOTE TRIGGER" shall be triggered on any Quarterly Payment
Date and with respect to the related Quarterly Interest Period if (a) the Pool
Balance as of the last day of the related Collection Period plus the amount on
deposit in the Reserve Account, the Collateral Reinvestment Account and the
Prefunding Account is less than (b) [ ] of the aggregate principal amount of the
Notes after giving effect to all distributions on such Quarterly Payment Date,
and shall remain triggered with respect to each succeeding Quarterly Interest
Period until the earlier of (1) the first day of the Quarterly Interest Period
relating to the Quarterly Payment Date on which the amount calculated in clause
(a) above equals or exceeds 100.00% of the aggregate principal amount of the
Notes after giving effect to all distributions on such Quarterly Payment Date
and (2) the first day of the Quarterly Interest Period relating to the Quarterly
Payment Date on which the outstanding principal amount of the Senior Notes is
reduced to zero.
"SUBORDINATE NOTEHOLDER" means the Noteholder of a Subordinate Note.
"SUBORDINATE NOTEHOLDERS' DISTRIBUTION AMOUNT" means, with respect to
any Quarterly Payment Date, the Subordinate Noteholders' Interest Distribution
Amount for such Quarterly Payment Date plus, with respect to any Quarterly
Payment Date on and after which the Senior Notes have been paid in full, the
Subordinate Noteholders' Principal Distribution Amount for such Quarterly
Payment Date.
"SUBORDINATE NOTEHOLDERS' INTEREST CARRYOVER SHORTFALL" means, with
respect to any Quarterly Payment Date, the excess of (i) the Subordinate
Noteholders' Interest Distribution Amount on the preceding Quarterly Payment
Date over (ii) the amount of interest actually distributed to the Subordinate
Noteholders on such preceding Quarterly Payment Date, plus interest on the
amount of such excess, to the extent permitted by law, at the then current
Subordinate Note Rate from such preceding Quarterly Payment Date to the current
Quarterly Payment Date.
"SUBORDINATE NOTEHOLDERS' INTEREST DISTRIBUTION AMOUNT" means, with
respect to any Quarterly Payment Date, the sum of (i) the amount of interest
accrued at the Subordinate Note Rate for the related Quarterly Interest Period
on the aggregate principal amount of the Subordinate Notes outstanding on the
immediately preceding Quarterly Payment Date (after giving effect to all
principal distributions to Subordinate Noteholders on such Quarterly Payment
Date) or, in the case of the first Quarterly Payment Date, on the Closing Date,
(ii) the Subordinate Noteholders' Interest Carryover Shortfall for such
Quarterly Payment Date and (iii) with respect to the first Quarterly Payment
Date on which the Subordinate Note Trigger is not triggered following a
Quarterly Payment with respect to which the Subordinate Note Trigger was
triggered, the amount that would have been calculated pursuant to clause (i)
above for all Quarterly Payment Dates for which the Subordinate Note Trigger was
in effect calculated as if the Subordinate Note Trigger was not in effect (and
not previously included in Subordinate Noteholders' Interest Distribution
Amount) plus interest thereon at the Subordinate Note Rate for each Quarterly
Interest Period while the Subordinate Note Trigger was triggered. Payments with
respect to the Subordinate Noteholders' Interest Distribution Amount shall be
allocated first with respect to clause (i) above, second with respect to clause
(ii) above and third with respect to clause (iii) above.
"SUBORDINATE NOTEHOLDERS' PRINCIPAL CARRYOVER SHORTFALL" means, as of
the close of any Quarterly Payment Date on or after which the Senior Notes have
been paid in full, the excess of (i) the Subordinate Noteholders' Principal
Distribution Amount on such Quarterly Payment Date over (ii) the amount of
principal actually distributed to the Subordinate Noteholders on such Quarterly
Payment Date.
"SUBORDINATE NOTEHOLDERS' PRINCIPAL DISTRIBUTION AMOUNT" means, with
respect to each Quarterly Payment Date on and after which the aggregate
principal amount of the Senior Notes has been paid in full, the sum of (a) the
Principal Distribution Amount for such Quarterly Payment Date (or, in the case
of the Quarterly Payment Date on which the aggregate principal balance of the
Senior Notes is paid in full, any remaining Principal Distribution Amount not
otherwise distributed to the Senior Noteholders on such Quarterly Payment Date)
and (b) the Subordinate Noteholders' Principal Carryover Shortfall as of the
close of the preceding Quarterly Payment Date; PROVIDED, HOWEVER, that the
Subordinate Noteholders' Principal Distribution Amount will in no event exceed
the aggregate principal amount of the Subordinate Notes outstanding on such
date. In addition, on the Subordinate Note Final Maturity Date, the principal
required to be distributed to the Subordinate Noteholders will include the
amount required to reduce the outstanding principal amount of the Subordinate
Notes to zero.
"SUBSEQUENT CUTOFF DATE" means for Prefunded Loans, New Loans or
Serial Loans, the date as of which any New Loan, Prefunded Loan or Serial Loan
is transferred to the Issuer and the date on and after which all distributions
on such loan are property of the Issuer or the date of the related Assignment in
the case of any Qualified Substitute Student Loan.
"SUBSERVICER" UNIPAC Service Corporation.
"SUBSERVICING AGREEMENT" means the Subservicing Agreement dated as of
April [ ] between Loan Services and the Subservicer.
"SUBSTITUTION ADJUSTMENT AMOUNT" has the meaning specified in Section
3.02 of the Loan Sale Agreement.
"SUCCESSOR SERVICER" has the meaning specified in Section 3.07(e) of
the Indenture.
"SWAP AGREEMENT" means any interest rate swap agreement, entered into
by the Trust with a Swap Counterparty document according to a [ ] ISDA Master
Agreement (or any subsequent version substantially in the same form as the [ ]
version) (Multicurrency-Cross Border) and any replacement Swap Agreement in
accordance with the Basic Documents.
"SWAP COUNTERPARTY" means any swap counterparty appointed in
accordance with the terms of a Swap Agreement.
"TAX CHARACTERIZATION AMENDMENT" has the meaning specified in Section
5.04 of the Trust Agreement.
"T-XXXX RATE" means, with respect to any Quarterly Interest Period,
the weighted average of the T-Xxxx Rates for each day within the Quarterly
Interest Period and, with respect to any date within a Quarterly Interest
Period, means the weighted average per annum discount rate (expressed on a bond
equivalent basis and applied on a daily basis) for 91-day Treasury Bills sold at
the most recent 91-day Treasury Xxxx auction prior to such date as reported by
the U.S. Treasury Department. In the event that the results of the auctions of
91-day Treasury Bills cease to be published or reported as provided above, or
that no such auction is held in a particular week, then the "T-Xxxx Rate" in
effect as a result of the last such publication or report shall remain in effect
until such time, if any, as the results of auctions of 91-day Treasury shall
again be so published or reported or such auction is held, as the case may be.
The T-Xxxx Rate with respect to a Swap Agreement, if specified in the related
Swap Agreement, shall be subject to a Lock-In Period (as defined in each Swap
Agreement, if any) of six Business Days.
"TELERATE PAGE 3750" means the display page so designated on the Dow
Xxxxx Telerate Service (or such other page as may replace that page on any
service for the purpose of displaying comparable rates or prices).
"TERMINATION EVENT" has the meaning specified in each Swap Agreement,
if any.
"TERMINATION PAYMENT" has the meaning specified in each Swap
Agreement, if any.
"THREE-MONTH LIBOR" means, with respect to any LIBOR Reset Period, the
London interbank offered rate for deposits in U.S. dollars having a maturity of
three months commencing on the related LIBOR Determination Date (the "Index
Maturity") which appears on Telerate Page 3750 as of 11:00 a.m. London time, on
such LIBOR Determination Date. If such rate does not appear on Telerate Page
3750, the rate for that day will be determined on the basis of the rates at
which deposits in U.S. dollars, having the Index Maturity and in a principal
amount of not less than U.S. $1,000,000, are offered at approximately 11:00
a.m., London time, on such LIBOR Determination Date to prime banks in the London
interbank market by the Reference Banks. The Administrator will request the
principal London office of each of such Reference Banks to provide a quotation
of its rate. If at least two such quotations are provided, the rate for that day
will be the arithmetic mean of the quotations. If fewer than two quotations are
provided, the rate for that day will be the arithmetic mean of the rates quoted
by major banks in The City of New York, selected by the Administrator, at
approximately 11:00 a.m., New York time, on such LIBOR Determination Date, for
loans in U.S. dollars to leading European banks having the Index Maturity and in
a principal amount equal to an amount of not less than U.S. $1,000,000;
PROVIDED, HOWEVER, that if the banks selected as aforesaid are not quoting as
mentioned in this sentence, Three-Month LIBOR in effect for the applicable LIBOR
Reset Period will be the Three-Month LIBOR in effect for the previous LIBOR
Reset Period.
"TRANSFER" means any direct or indirect transfer, sale, pledge,
hypothecation or other form of assignment of any ownership interest in a Note
or, with respect Section 3.01 of the Trust Agreement, in the Trust.
"TRANSFER AGREEMENT" has the meaning provided in Section 2.03 of the
Loan Sale Agreement.
"TRANSFER DATE" means the day fixed for the transfer of any New Loans,
Serial Loans or Prefunded Loans by the Seller to the Issuer pursuant to Section
2.02(a) of the Loan Sale Agreement.
"TREASURY REGULATIONS" means regulations, including proposed or
temporary regulations, promulgated under the Code. References in any document or
instrument to specific provisions of proposed or temporary regulations shall
include analogous provisions of final Treasury Regulations or other successor
Treasury Regulations.
"TRUST" means the Issuer, established pursuant to the Trust Agreement.
"TRUST ACCOUNT PROPERTY" means the Trust Accounts, all amounts and
investments held from time to time in any Trust Account (whether in the form of
deposit accounts, Physical Property, book-entry securities, uncertificated
securities or otherwise), including the Reserve Account Initial Deposit, the
Prefunding Account Closing Date Deposit and the Collection Account Closing Date
Deposit and all proceeds of the foregoing.
"TRUST ACCOUNTS" has the meaning specified in Section 2(c) of the
Administration Agreement.
"TRUST AGREEMENT" means the Trust Agreement dated as of [ ], among the
Depositor, the Company and the Eligible Lender Trustee.
"TRUST ESTATE" means all right, title and interest of the Trust (or
the Eligible Lender Trustee on behalf of the Trust) in and to the property and
rights assigned to the Trust pursuant to Article II of the Loan Sale Agreement
all funds on deposit from time to time in the Trust Accounts and all other
property of the Trust from time to time, including any rights of the Eligible
Lender Trustee and the Trust pursuant to the Loan Sale Agreement, the Servicing
Agreement and the Administration Agreement.
"TRUST INDENTURE ACT" or "TIA" means the Trust Indenture Act of 1939
as in force on the date hereof, unless otherwise specifically provided.
"TRUST SWAP PAYMENT AMOUNT" means, with respect to any Quarterly
Payment Date and any Swap Agreement, the sum of (i) if the related Swap
Agreement is still in effect, the related Net Trust Swap Payment for such
Quarterly Payment Date and (ii) the related Net Trust Swap Payment Carryover
Shortfall for such Quarterly Payment Date; PROVIDED, HOWEVER, that Termination
Payments (other than in respect of clauses (i) and (ii) above) shall not be
deemed to be part of the Trust Swap Payment Amount.
"TRUST SWAP RECEIPT AMOUNT" means, with respect to any Quarterly
Payment Date and any Swap Agreement, the sum of (i) if the related Swap
Agreement is still in effect, the related Net Trust Swap Receipt for such
Quarterly Payment Date and (ii) the related Net Trust Swap Receipt Carryover
Shortfall for such Quarterly Payment Date.
"UCC" means, unless the context otherwise requires, the Uniform
Commercial Code, as in effect in the relevant jurisdiction, as amended from time
to time.
"UNITED STATES PERSON" means a citizen or resident of the United
States, a corporation, partnership or other entity created or organized in, or
under the laws of, the United States or any political subdivision thereof, or an
estate whose income is subject to United States federal income tax regardless of
its source, or a trust if a court within the United States is able to exercise
primary supervision over the administration of the trust and one or more United
States fiduciaries have the authority to control all substantial decisions of
the trust.
