ADMINISTRATION AGREEMENT dated as of April 1, 1997,
among SMS STUDENT LOAN TRUST 1997-A, a Delaware trust (the
"Issuer"), USA GROUP SECONDARY MARKET SERVICES, INC., a
Delaware corporation, as administrator (the "Administrator"),
and BANKERS TRUST COMPANY, a New York banking corporation, not
in its individual capacity but solely as Indenture Trustee
(the "Indenture Trustee").
W I T N E S S E T H
WHEREAS the Issuer was formed pursuant to the Trust Agreement
dated as of April 1, 1997 (the "Trust Agreement") among the Depositor, Secondary
Market Company, Inc., a Delaware corporation, and The First National Bank of
Chicago, as Eligible Lender Trustee (the "Eligible Lender Trustee") and is
issuing the Floating Rate Asset Backed Senior Notes (the "Senior Notes") and the
Floating Rate Asset Backed Subordinate Notes (the "Subordinate Notes," and
together with the Senior Notes, the "Notes") pursuant to the Indenture dated as
of April 1, 1997 (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);
WHEREAS the Issuer has entered into certain agreements in
connection with the issuance of the Notes, including the Loan Sale Agreement,
the Servicing Agreement, the Senior Note Depository Agreement (the "Depository
Agreement"), the Guarantee Agreements, the Trust Agreement and the Indenture
(all such agreements being collectively referred to herein as the "Related
Agreements");
WHEREAS, pursuant to the Related Agreements, the Issuer and
the Eligible Lender Trustee are required to perform certain duties in connection
with the Notes and the Collateral therefor pledged pursuant to the Indenture;
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
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consistent with the terms of this Agreement and the Related Agreements as the
Issuer and the Eligible Lender Trustee may from time to time request;
WHEREAS the Administrator has the capacity to provide the
services required hereby and is willing to perform such services for the Issuer
and the Eligible Lender Trustee on the terms set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants
contained herein, and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties agree as follows:
1. REPRESENTATIONS OF THE ADMINISTRATOR. The Administrator
makes the following representations on which the Issuer and the Eligible Lender
Trustee are deemed to have relied. The representations speak as of the execution
and delivery of this Agreement and as of the Closing Date, in the case of the
Initial Financed Student Loans, as of the applicable Transfer Date, in the case
of the Serial Loans and 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 Delaware, with the power and authority to own
its properties and to conduct its business as such properties are
currently owned and such business is presently conducted.
(b) POWER AND AUTHORITY OF THE ADMINISTRATOR. The
Administrator has the corporate power and authority to execute and
deliver this Agreement and to carry out its terms, and the execution,
delivery and performance of this Agreement has been duly authorized by
the Administrator by all necessary corporate action.
(c) BINDING OBLIGATION. This Agreement constitutes a legal,
valid and binding obligation of the Administrator, enforceable in
accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization and similar laws relating to creditors'
rights generally and subject to general principles of equity.
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(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
Related Agreements 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
Related Agreements, (iii) seeking any determination or ruling that
could reasonably be expected to have a material and adverse effect on
the performance by the Administrator of its obligations under, or the
validity or enforceability of, this Agreement, the Indenture, any of
the other Related Agreements 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, 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.
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(a) DUTIES WITH RESPECT TO THE INDENTURE AND DEPOSITORY
AGREEMENT. The Administrator shall perform all its duties as Administrator and
the duties of the Issuer under the Depository Agreement. In addition, the
Administrator shall consult with the Eligible Lender Trustee as the
Administrator deems appropriate regarding the duties of the Issuer under the
Indenture and the Depository Agreement. The Administrator shall monitor the
performance of the Issuer and shall advise the Eligible Lender Trustee when
action is necessary to comply with the Issuer's duties under the Indenture and
the Depository Agreement. The Administrator shall prepare for execution by the
Issuer or shall cause the preparation by other appropriate Persons of all such
documents, reports, filings, instruments, certificates and opinions as it shall
be the duty of the Issuer to prepare, file or deliver pursuant to the Indenture
and the Depository Agreement. In furtherance of the foregoing, the Administrator
shall take all appropriate action that is the duty of the Issuer to take
pursuant to the Indenture, including such of the foregoing as are required with
respect to the following matters (references are to sections of the Indenture):
(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 Subordinate Notes (Section 2.04);
(F) the duty to cause the Note Registrar to maintain on behalf
of the Issuer an office in the Borough of Manhattan, The City of New
York, for registration of transfer or exchange of Notes (Section 3.02);
(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);
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(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 and the Rating
Agencies of a 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 and
the Rating Agencies 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);
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(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, as necessary, 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 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 authentica tion 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 of redemption of
the Notes or the duty to cause the Indenture Trustee to
provide such notification (Section 10.02);
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(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));
(BB) the preparation and timely delivery to Noteholders and
the Indenture Trustee of any agreements with respect to alternate
payment and notice provisions (Section 11.06); and
(CC) the recording of the Indenture, if applicable
(Section 11.15).
(b) DUTIES WITH RESPECT TO THE ISSUER. (i) In addition to the duties
of the Administrator set forth above and in the other Related Agreements,
the Administrator shall perform such calculations and shall prepare for
execution by the Issuer or the Eligible Lender Trustee or shall cause the
preparation by other appropriate Persons of all such documents, reports,
filings, instruments, certificates and opinions as it shall be the duty of
the Issuer or the Eligible Lender Trustee to prepare, file or deliver
pursuant to the Related Agreements, and at the request of the Eligible
Lender Trustee shall take all appropriate action that it is the duty of the
Issuer to take pursuant to the Related Agreements. In furtherance thereof,
the Eligible Lender Trustee shall, on behalf of itself and of the Issuer,
execute and deliver to the Administrator and to each successor
Administrator appointed pursuant to the terms hereof, one or more powers of
attorney substantially in the form of Exhibit A hereto, appointing the
Administrator the attorney-in-fact of the Eligible Lender Trustee and the
Issuer for the purpose of executing on behalf of the Eligible Lender
Trustee and the Issuer all such documents, reports, filings, instruments,
certificates and opinions. Subject to Section 9 of this Agreement, and in
accordance with the directions of the Eligible Lender Trustee, the
Administrator shall administer, perform or supervise the performance of
such other activities in connection with the Collateral (including the
Related Agreements) as are not covered by any of the foregoing provisions
and as are expressly requested by the Eligible Lender Trustee and are
reasonably within the capability of the Administrator.
(ii) Notwithstanding anything in this Agreement or the Related
Agreements to the contrary, the Administrator shall deliver to the Eligible
Lender Trustee, the Indenture Trustee, the Rating Agencies and (if the Seller is
not the Administrator) the Seller, an Officers' Certificate of the Administrator
containing all the information necessary:
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(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 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)(iv), which Officers'
Certificate shall be delivered on each Determination Date;
(D) to make all the distributions required by Sections 2(d),
2(e) and 2(f), for the Monthly Collection Period or Collection Period,
as the case may be, preceding the date of such 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 Senior 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
the T-Xxxx Rate and the Student Loan Rate in accordance with the respective
definitions thereof for the related Quarterly Interest Period.
(iii) [Reserved.]
(iv) Notwithstanding anything in this Agreement or the Related
Agreements to the contrary, the Administrator shall be responsible for
performance of the duties of the Eligible Lender Trustee set forth in Section
5.02 of the Trust Agreement with respect to, among other things, any tax
information or accounting report required to be distributed to Note Owners.
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(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 Related Agreements,
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 and the Indenture Trustee as soon as practicable
after the Administrator has received notice thereof.
(viii) In carrying out the foregoing duties or any of its
other obligations under this Agreement, the Administrator may enter into
transactions with or otherwise deal with any of its Affiliates; PROVIDED,
HOWEVER, that the terms of any such trans actions or dealings shall be in
accordance with any directions received from the Issuer and shall be, in the
Administrators opinion, no less favorable to the Issuer than would be available
from unaffiliated parties.
(c) ESTABLISHMENT AND MAINTENANCE OF TRUST ACCOUNTS.
(i) The Administrator, for the benefit of the Issuer, shall
establish and maintain in the name of the Indenture Trustee an Eligible Deposit
Account (the "Collection Account"), bearing a designation clearly indicating
that the funds deposited therein are held for the benefit of the Issuer. The
Collection Account will initially be established as a segregated trust account
in the name of the Indenture Trustee with the corporate trust department of
Bankers Trust Company.
(ii) The Administrator, for the benefit of the Issuer, shall
establish and maintain in the name of the Indenture Trustee an Eligible Deposit
Account (the "Reserve Account"), bearing a designation clearly indicating that
the funds deposited therein are held for the benefit of the Issuer. The Reserve
Account will initially be established as a segregated trust account in the name
of the Indenture Trustee with the corporate trust department of Bankers Trust
Company.
(iii) The Administrator, for the benefit of the Issuer, shall
establish and maintain in the name of the Indenture Trustee an Eligible Deposit
Account (the "Collateral Reinvestment Account"), bearing a designation clearly
indicating that the funds deposited therein are held for the benefit of the
Issuer. The Collateral Reinvestment Account will initially be established as a
segregated trust account in the name of the Indenture
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Trustee with the corporate trust department of Bankers Trust Company.
(iv) [Reserved.]
(v) Funds on deposit in the Collection Account, the Reserve
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 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 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 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 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 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 Issuer. If, at
any time, any of the Trust Accounts ceases to be an Eligible Deposit
Account, the Indenture Trustee (or the Administrator on its behalf)
agrees, by its acceptance 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
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notify the Indenture Trustee in writing promptly upon any of such Trust
Accounts ceasing to be an Eligible Deposit Account.
(B) With respect to the Trust Account Property, the
Indenture Trustee agrees, by its acceptance hereof, that:
(1) any Trust Account Property that is held in deposit
accounts shall be held solely in Eligible Deposit Accounts, subject to
the last sentence of clause (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" and shall be held,
pending maturity or disposition, solely by the Indenture Trustee or a
financial intermediary (as such term is defined in Section 8-313(4) of
the UCC) acting solely for the Indenture Trustee;
(3) any Trust Account Property that is a book-entry security
held through the Federal Reserve System pursuant to Federal book-entry
regulations shall be Delivered in accordance with paragraph (b) of the
definition of "Delivery" and shall be maintained by the Indenture
Trustee, pending maturity or disposition, through continued book-entry
registration of such Trust Account Property as described in such
paragraph; and
(4) any Trust Account Property that is an "uncertificated
security" under Article VIII of the UCC and that is not governed by
clause (3) above shall be Delivered to the Indenture Trustee in
accordance with paragraph (c) of the definition of "Delivery" and shall
be maintained by the Indenture Trustee, pending maturity or
disposition, through continued registration of the Indenture Trustee's
(or its nominees) ownership of such security.
(C) The Administrator shall have the power, revocable
for cause or upon the occurrence and during the continuance of an
Administrator Default by the Indenture Trustee or by the Eligible
Lender Trustee with the consent of the Indenture Trustee, to instruct
the Indenture Trustee to make withdrawals and payments from the Trust
Accounts for the purpose of permitting the Servicer or the Eligible
Lender Trustee to carry out its respective duties under the Servicing
Agreement or the Trust Agreement or permitting the Indenture Trustee to
carry out its duties under the Indenture.
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(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 (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, in so far
as the Administrator may so instruct on any Business Day therein, to
deposit all collections in respect of principal on the Financed Student
Loans into the Collateral Reinvestment Account;
(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 not
held by the Issuer pursuant to Section 6.07 of the Trust Agreement;
PROVIDED that the amount paid to prepay any Add-on Consolidation Loan
not held by the Issuer 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
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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; PROVIDED, FURTHER, that, any
Purchase Premium Amounts for Serial Loans purchased (including pursuant
to the exchange thereof) 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 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 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 to the
Noteholders pursuant to Section 8.02(c) of the Indenture, from
the amount of Available Funds remaining after the application of
clauses (A) and (B), the Noteholders' Distribution Amount with
respect to such Quarterly Payment Date; and
13
(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 pursuant to clause
(v)(D) into the Reserve Account, amounts properly withdrawn from the Collection
Account and distributed pursuant to this Section 2(d) shall be deemed released
from the Trust Estate and the security interest therein granted to the Indenture
Trustee, and the Persons to whom such amounts are distributed shall in no event
be required to refund any such distributed amounts.
(e) RESERVE ACCOUNT. (i) The Seller shall deposit
the Reserve Account Initial Deposit into the Reserve Account as
required by Section 2.01(b) of the Loan Sale Agreement.
(ii) 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 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 pay such Reserve Account Excess (a) during the
Revolving Period, for deposit to the Collateral Reinvestment Account; PROVIDED,
HOWEVER, if such date is on or after the Parity Date, to the extent that such
funds represent payments of interest 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)(iii) through (vi) 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, 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 balance of the Notes, after giving effect to all other
distributions in respect of principal on 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) to pay to the Indenture Trustee for
distribution to Noteholders pursuant to Section 8.02(d) of the Indenture, out of
the remaining amount of such excess, an amount equal to the aggregate unpaid
Noteholders' Interest T-Xxxx Carryover; (iv) 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; (v) 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
B
14
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; and (vi) any remaining amount of such excess, after
application of clauses (i) through (v) above, will be released to the Company;
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 $500,000 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 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 balance 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
Noteholders' Interest T-Xxxx Carryover, 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
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) 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) 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.
15
(C) For any Quarterly Payment Date, in the event that
the Noteholders' Distribution Amount for such Quarterly Payment Date
exceeds the sum of the amount distributed to the Indenture Trustee for
distribution to the Noteholders pursuant to Section 2(d)(v)(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, 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 (including any and all Financed Student Loans) 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 Monthly Available Funds or 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 to Noteholders 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 (with a copy
to the Rating Agencies) for the Indenture Trustee to forward on
16
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 Senior Notes and the Subordinate Notes, 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 Senior Notes;
(C) the amount of the distribution allocable on
such Quarterly Payment Date to interest on the Subordinate
Notes;
(D) the amount, if any, of such distribution
allocable to any Senior Noteholders' Interest T-Xxxx Carryover and any
Subordinate Noteholders' Interest T-Xxxx Carryover, together with any
remaining outstanding amount of each thereof;
(E) 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;
(F) the aggregate outstanding principal balance of
the Senior Notes and the Subordinate Notes, the Senior 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;
(G) the Note Rate applicable with respect to each
distribution referred to in clauses (B) and (C) above, indicating
whether such interest rate was calculated based on the Student Loan
Rate or based on the T-Xxxx Rate, and specifying what each such Note
Rate would have been using the alternate basis for such calculation;
(H) 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;
17
(I) 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;
(J) 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;
(K) 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;
(L) 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;
(M) for the Quarterly Payment Date on or immediately
following the end of the Revolving Period, the amount remaining on
deposit in the Collateral Reinvestment Account that has not been used
to make Additional Fundings;
(N) (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;
(O) the principal balance and number of Serial Loans
conveyed to the Issuer during the related Collection Period, the
aggregate Loan Purchase Amount thereof and the portion thereof
attributable to Purchase Premium Amounts;
(P) 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 Amount thereof and the portion thereof attributable to
Purchase Premium Amounts; and
18
(Q) 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 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) and (D) above shall be
expressed as a dollar amount per $1,000 of original principal balance 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 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:
(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, including any allegation of forgery by a
putative borrower under a Financed Student Loan);
(iii) the amendment, change or modification of the
Related Agreements;
(iv) the appointment of successor Note Registrars, successor
Paying Agents and successor Indenture Trustees pursuant to the
Indenture or the appointment of successor Administrators or Successor
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
19
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 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. 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.
3. ANNUAL STATEMENT AS TO COMPLIANCE. (a) The Administrator
shall deliver to the Seller, the Eligible Lender Trustee and the Indenture
Trustee, on or before December 31 of each year beginning December 31, 1997, 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 September 30, 1997) and of its
performance under this Agreement has been made under such officers' supervision
and (ii) to the best of such officers' knowledge, based on such review, the
Administrator has fulfilled all its obligations under this Agreement throughout
such year or, if there has been a default in the fulfillment of any such
obligation, specifying each such default known to such officers and the nature
and status thereof. The Indenture Trustee shall send a copy of each such
Officer's Certificate and each report referred to in Section 4 to the Rating
Agencies. A copy of such 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, and the Rating Agencies, promptly
after having obtained knowledge thereof, but in no event later than two Business
Days thereafter, written notice in an Officers' Certificate of the Administrator
of any event which with the giving of notice or lapse of time, or both, would
become an Administrator Default under Section 12.
4. ANNUAL INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS'
REPORT. The Administrator shall cause a firm of independent
20
certified public accountants, which may also render other services to the
Administrator, to deliver to the Seller, the Eligible Lender Trustee and the
Indenture Trustee on or before December 31 of each year beginning December 31,
1997, a report addressed to the Administrator and to the Seller, the Eligible
Lender Trustee and the Indenture Trustee (which report may be combined with
other reports required to be delivered by such accountants to the Administrator,
the Eligible Lender Trustee and the Indenture Trustee under the Related
Agreements), to the effect that such firm has examined certain documents and
records relating to the administration of the Financed Student Loans and of the
Trust during the preceding fiscal year ended September 30 (or, in the case of
the first such report, during the period from the Closing Date to September 30,
1997) 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.
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 TO THE
ISSUER. The Administrator shall furnish to the Issuer from time
to time such additional information regarding the Collateral as
the Issuer shall reasonably request.
21
9. INDEPENDENCE OF THE ADMINISTRATOR. For all purposes of this
Agreement, the Administrator shall be an independent contractor and shall not be
subject to the supervision of the Issuer or the Eligible Lender Trustee with
respect to the manner in which it accomplishes the performance of its
obligations hereunder. Unless expressly authorized by the Issuer, the
Administrator shall have no authority to act for or represent the Issuer or the
Eligible Lender Trustee in any way and shall not otherwise be deemed an agent of
the Issuer or the Eligible Lender Trustee.
10. NO JOINT VENTURE. Nothing contained in this Agreement (i)
shall constitute the Administrator and either of the Issuer or the Eligible
Lender Trustee as members of any partnership, joint venture, association,
syndicate, unincorporated business or other separate entity, (ii) shall be
construed to impose any liability as such on any of them or (iii) shall be
deemed to confer on any of them any express, implied or apparent authority to
incur any obligation or liability on behalf of the others.
11. OTHER ACTIVITIES OF ADMINISTRATOR. Nothing herein shall
prevent the Administrator or its Affiliates from engaging in other businesses
or, in its sole discretion, from acting in a similar capacity as an
administrator for any other person or entity even though such person or entity
may engage in business activities similar to those of the Issuer, the Eligible
Lender Trustee or the Indenture Trustee.
12. ADMINISTRATOR DEFAULT. If any one of the
following events (an "Administrator Default") shall occur and be
continuing:
(a) any failure by the Administrator to direct the Indenture
Trustee to make any required distributions from any of the Trust
Accounts, which failure continues unremedied for 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 Related
Agreements, 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 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
22
Noteholders, representing not less than 25% of the
Outstanding Amount of the Notes; or
(c) an Insolvency Event occurs with respect to the
Administrator;
then, and in each and every case, so long as the Administrator Default shall not
have been remedied, either the Indenture Trustee, or the Noteholders evidencing
not less than 75% of the Outstanding Amount of the Notes, by notice then given
in writing to the Administrator (and to the Indenture Trustee and the Eligible
Lender Trustee if given 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 amending this
Agreement to reflect such succession as Administrator pursuant to this Section
shall be paid by the predecessor Administrator upon presentation of reasonable
documentation of such costs and expenses. Upon receipt of notice of the
occurrence of an Administrator Default, the Eligible Lender Trustee shall give
notice thereof to the Rating Agencies.
13. APPOINTMENT OF SUCCESSOR. (a) Upon receipt by the
Administrator of notice of termination pursuant to Section 12, or the
resignation by the Administrator in accordance with the terms of this Agreement,
the predecessor Administrator shall continue to perform its functions as
Administrator, in the case of termination, only until the date specified in such
termination notice or, if no such date is specified in a notice of termina tion,
until receipt of such notice and, in the case of resigna tion, until the later
of (x) the date 120 days from the delivery to the Eligible Lender Trustee and
the Indenture Trustee of written notice of such resignation (or written
confirmation of such notice) in accordance with the terms of this Agreement and
(y) the date upon which the predecessor Administrator shall become unable to act
as Administrator as specified in the notice
23
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 appoint ment 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. Notwith standing the above, the Indenture Trustee shall, if it shall be
unwilling or legally unable so to act, appoint or petition a court of competent
jurisdiction to appoint, any established institution whose regular business
shall include the servicing of student loans, as the successor to the
Administrator under this Agreement and the Administration Agreement.
(b) Upon appointment, the successor Administrator (including
the Indenture Trustee acting as successor Administrator) shall be the successor
in all respects to the predecessor Administrator and shall be subject to all the
responsibilities, duties and liabilities placed on the predecessor Administrator
that arise thereafter or are related thereto and shall be entitled to an amount
agreed to by such successor Administrator (which shall not exceed the Administra
tion Fee unless such compensation arrangements will not result in a downgrading
of the rating of the Senior 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
Related Agreements, the Indenture Trustee, to the extent it is acting as
successor Administrator pursuant hereto, shall be entitled to resign to the
extent a qualified successor Administrator has been appointed and has assumed
all the obligations of the Administrator in accordance with the terms of this
Agreement and the Related Agreements.
14. NOTIFICATION TO NOTEHOLDERS. 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
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
24
default by the Administrator in the performance of its obligations hereunder and
any consequences thereof, except a default in making any required deposits to or
payments from any of the Trust Accounts (or giving instructions regarding the
same) in accordance with this Agreement. Upon any such waiver of a past default,
such default shall cease to exist, and any Administrator Default arising
therefrom shall be deemed to have been remedied for every purpose of this
Agreement. No such waiver shall extend to any subsequent or other default or
impair any right consequent thereto.
16. NOTICES. Any notice, report or other communica
tion 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
SMS Student Loan Trust 1997-A
c/o First Chicago Delaware Inc.
FCC National Bank
000 Xxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000,
with a copy to the Eligible Lender Trustee
at the Corporate Trust Office of the
Eligible Lender Trustee
(b) if to the Eligible Lender Trustee, to
The First National Bank of Chicago
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Administration
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(b) if to the Administrator, to
USA Group Secondary Market Services, Inc.
00 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000-0000
Attention: President and Chief Executive Officer
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy to
Office of the General Counsel
USA Group, Inc.
00 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxxxxxxxx
Telephone: (000) 000-0000
25
Telecopy: (000) 000-0000
(c) if to the Indenture Trustee, to
Bankers Trust Company
Four Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust and Agency Group,
Structured Finance Team
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
or to such other address as any party shall have provided to the other parties
in writing. Any notice required to be in writing hereunder shall be deemed given
if such notice is mailed by certified mail, postage prepaid, or hand-delivered
to the address of such party as provided above.
17. AMENDMENTS. This Agreement may be amended from time to
time by a written amendment duly executed and delivered by the Issuer, the
Administrator and the Indenture Trustee, with the written consent of the
Eligible Lender Trustee, without the consent of the Noteholders, 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 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 written consent of the Eligible Lender
Trustee 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 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 Xxxxxxxxxxxxx.
00
00. GOVERNING LAW. This Agreement shall be construed
in accordance with the laws of the State of Indiana, 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 USA GROUP SECONDARY MARKET
SERVICES, INC. IN OTHER CAPACITIES. Nothing in this Agreement shall affect any
obligation USA Group Secondary Market Services, Inc. may have in any other
capacity under the Related Agreements.
24. LIABILITY OF ADMINISTRATOR; INDEMNITIES. The
Administrator shall be liable in accordance herewith only to the extent of the
obligations specifically undertaken by the Administrator under this Agreement.
The Administrator shall indemnify, defend and hold harmless
the Issuer, the Eligible Lender Trustee, the Indenture Trustee, the Servicer 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.
27
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 USA Group Secondary Market Services,
Inc., 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 and the Indenture Trustee 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 USA Group Secondary Market Services, Inc. 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
28
thereto have been executed and filed that are necessary fully to preserve and
protect the interest of the Eligible Lender Trustee and Indenture Trustee,
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 or the Eligible Lender Trustee except as provided under this
Agreement, for any action taken or for refraining from the taking of any action
pursuant to this Agreement or for errors in judgment; PROVIDED, HOWEVER, that
this provision shall not protect the Administrator or any such person against
any liability that would otherwise be imposed by reason of willful misfeasance,
bad faith or negligence in the performance of its duties or by reason of
reckless disregard of obligations and its duties under this Agreement. The
Administrator and any of its directors, officers, employees or agents may rely
in good faith on the advice of counsel or on any document of any kind prima
facie properly executed and submitted by any Person respecting any matters
arising hereunder.
Except as provided in this Agreement, the Administrator shall
not be under any obligation to appear in, prosecute or defend any legal action
that shall not be incidental to its duties to administer the Financed Student
Loans and the Trust in accordance with this Agreement, and that in its opinion
may involve it in any expense or liability; PROVIDED, HOWEVER, that the
Administrator may undertake any reasonable action that it may deem necessary or
desirable in respect of this Agreement and the other Basic Documents and the
rights and duties of the parties to this Agreement and the Related Agreements
and the interests of the Noteholders under the Indenture.
27. USA GROUP SECONDARY MARKET SERVICES, INC. NOT TO RESIGN AS
ADMINISTRATOR. Subject to the provisions of Section 25, USA Group Secondary
Market Services, Inc. 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 USA Group Secondary Market
Services, Inc. or its properties. Notice of any such determination permitting
the resignation of USA Group Secondary Market Services, Inc. shall be
communicated to the Eligible Lender Trustee and the Indenture Trustee at the
earliest practicable time (and, if such communication is not in writing, shall
be confirmed in writing at the earliest practicable time) and any such
determination shall be evidenced by an Opinion of Counsel to such effect
delivered to the Eligible Lender Trustee and the Indenture Trustee concurrently
with or promptly after such notice. No such resignation shall become effective
until
29
the Indenture Trustee or a successor Administrator shall have
assumed the responsibilities and obligations of USA Group
Secondary Market Services, Inc. in accordance with Section 13.
28. LIMITATION OF LIABILITY OF ELIGIBLE LENDER TRUSTEE AND
INDENTURE TRUSTEE. (a) Notwithstanding anything contained herein to the
contrary, this instrument has been countersigned by The First National Bank of
Chicago not in its individual capacity but solely in its capacity as Eligible
Lender Trustee of the Issuer and in no event shall The First National Bank of
Chicago in its individual capacity or any Owner of the Issuer have any liability
for the representations, warranties, covenants, agree ments or other obligations
of the Issuer hereunder, as to all of which recourse shall be had solely to the
assets of the Issuer. For all purposes of this Agreement, in the performance of
any duties or obligations of the Issuer thereunder, the Eligible Lender Trustee
shall be subject to, and entitled to the benefits of, the terms and provisions
of Articles VI, VII and VIII of the Trust Agreement.
(b) Notwithstanding anything contained herein to the contrary,
this Agreement has been countersigned by Bankers Trust Company not in its
individual capacity but solely as Indenture Trustee and in no event shall
Bankers Trust Company have any liability for the representations, warranties,
covenants, agreements or other obligations of the Issuer hereunder or in any of
the certificates, notices or agreements delivered pursuant hereto, as to all of
which recourse shall be had solely to the assets of the Issuer.
29. INSOLVENCY OF COMPANY. (a) Upon any sale of the assets of
the Trust pursuant to Section 9.02 of the Trust Agree ment, the Indenture
Trustee shall deposit the net proceeds from such sale after all payments and
reserves therefrom (including the expenses of such sale) have been made (the
"Insolvency Proceeds") in the Collection Account. On the Quarterly Payment Date
on, or, if such proceeds are not so deposited on a Quarterly Payment Date, on
the first Quarterly Payment Date following the date on which the Insolvency
Proceeds are deposited in the Collection Account, the Administrator shall
instruct the Indenture Trustee to make the following distributions (after the
application on such Quarterly Payment Date of the amount of Available Funds and
amounts on deposit in the Reserve Account pursuant to Sections 2(d) and 2(e))
from the Insolvency Proceeds and any funds remaining on deposit in the Reserve
Account (including the proceeds of any sale of investments therein as described
in the following sentence):
(i) to the Senior Noteholders, any portion of the
Senior Noteholders' Interest Distribution Amount not otherwise
distributed to the Senior Noteholders on such
Quarterly Payment Date;
30
(ii) to the Subordinate Noteholders, any portion of the
Subordinate Noteholders' Interest Distribution Amount not otherwise
distributed to the Subordinate Noteholders on such Quarterly Payment
Date;
(iii) to the Senior Noteholders, the outstanding
principal balance of the Senior Notes (after giving effect to the
reduction in the outstanding principal balance of the Senior Notes to
result from the distributions to Senior Noteholders on such Quarterly
Payment Date and on prior Quarterly Payment Dates);
(iv) to the Subordinate Noteholders, the outstanding
principal balance of the Subordinate Notes (after giving effect to the
reduction in the outstanding principal balance of the Subordinate Notes
to result from the distributions to Subordinate Noteholders on such
Quarterly Payment Date and
on prior Quarterly Payment Dates);
(v) to the Senior Noteholders, any unpaid Senior
Noteholders' Interest T-Xxxx Carryover not otherwise distributed to the
Senior Noteholders on such Quarterly Payment Date; and
(vi) to the Subordinate Noteholders, any unpaid
Subordinate Noteholders' Interest T-Xxxx Carryover not otherwise
distributed to the Subordinate Noteholders on such
Quarterly Payment Date.
Any investments on deposit in the Reserve Account which will not mature on or
before such Quarterly Payment Date shall be sold by the Indenture Trustee at
such time as will result in the Indenture Trustee receiving the proceeds from
such sale not later than the Business Day preceding such Quarterly Payment Date.
Any Insolvency Proceeds remaining after the deposits described above shall be
paid to the Company.
(b) As described in Article IX of the Trust Agreement, notice
of any termination of the Trust shall be given by the Administrator to the
Eligible Lender Trustee and the Indenture Trustee as soon as practicable after
the Administrator has received notice thereof.
30. THIRD-PARTY BENEFICIARIES. The Eligible Lender
Trustee is a third party beneficiary to this Agreement and is
entitled to the rights and benefits hereunder and may enforce the
provisions hereof as if it were a party hereto.
31
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.
SMS STUDENT LOAN TRUST 1997-A,
by THE FIRST NATIONAL BANK OF
CHICAGO, not in its individual
capacity but solely as
Eligible Lender Trustee,
by
_______________
Name:
Title:
BANKERS TRUST COMPANY, not in its
individual capacity but solely as
Indenture Trustee,
by
_______________
Name:
Title:
USA GROUP SECONDARY MARKET
SERVICES, INC., as Administrator,
by
_______________
Name:
Title:
32
EXHIBIT A TO THE
ADMINISTRATION AGREEMENT
POWER OF ATTORNEY
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK)
KNOW ALL MEN BY THESE PRESENTS, that THE FIRST NATIONAL BANK OF
CHICAGO, a national bank, not in its individual capacity but solely as eligible
lender trustee ("Eligible Lender Trustee") for the SMS Student Loan Trust 1997-A
(the "Trust"), does hereby make, constitute and appoint USA Group Secondary
Market Services, Inc., 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 April 1, 1997, among the Trust, USA Group Secondary Market Services,
Inc., as Administrator, and Bankers Trust Company, 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.
A-1
EXECUTED as of the first day of April, 1997.
THE FIRST NATIONAL BANK OF CHICAGO,
not in its individual capacity but
solely as Eligible Lender Trustee
by
_______________
Name:
Title:
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
Before me, the undersigned authority, on this day personally
appeared [ ] known to me to be the person whose name is subscribed
to the foregoing instrument, and acknowledged to me that such person
signed the same for the purposes and considerations therein expressed.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this [ ] day
of [ ], 1997.
_______________________
Notary Public in and for the
State of New York
Printed Name of Notary Public
Commission Expires____________
A-2
EXHIBIT B
TO THE
ADMINISTRATION AGREEMENT
Form of Noteholders' Statement pursuant to Section 2(g) of Administration
Agreement (capitalized terms used herein are defined in Appendix A thereto)
Quarterly Payment Date:
(i) Amount of principal being paid or distributed:
Senior __________* ($_______*
per $1,000
original
principal
amount of
Notes)
Subordinate __________* ($_______*
per $1,000
original
principal
amount of
Notes)
---------
* Portion of each such amount attributable to Reserve Account
Excess: _________________.
(ii) Amount of interest being paid or distributed:
Senior __________ ($_______
per $1,000
original
principal
amount of
Notes)
Subordinate __________ ($_______
per $1,000
original
principal
amount of
Notes)
B-1
(iii) Amount of Senior Noteholders' Interest T-Xxxx Carryover being
paid or distributed (if any) and amount remaining (if any):
(a) Distributed:__________ ($_______ per $1,000
original principal
amount of Notes)
(b) Balance:______________ ($_______ per $1,000
original) principal
amount of Notes)
(iv) Amount of Subordinate Noteholders' Interest T-Xxxx Carryover
being paid or distributed (if any) and amount remaining (if
any):
(a) Distributed:__________ ($_______ per $1,000
original principal
amount of Notes)
(b) Balance:______________ ($_______ per $1,000
original) principal
amount of Notes)
(v) Pool Balance at end of related Collection Period:_____________
(vi) After giving effect to distributions on this Quarterly
Payment Date:
(a) (1) outstanding principal amount of Senior
Notes:__________
(2) Senior Note Pool Factor:__________
(b) (1) outstanding principal amount of Subordinate
Notes:__________
(2) Subordinate Note Pool Factor:__________
(vii) Applicable Note Rate:
In general:
(1) T-Xxxx Rate for Quarterly Interest Period
commencing on the previous Quarterly Payment
Date was _____%.
(2) the Student Loan Rate was _____%.
B-2
Senior Note Rate:_____% (based on
[T-Xxxx Rate]
[Student Loan Rate])
Subordinate Note Rate:_____% (based on
[T-Xxxx Rate]
[Student Loan Rate])
(viii) Amount of Servicing Fee for related Collection Period
including a breakdown of the components of the
Servicing Fee attributable to each of the items
specified in clauses II(i) through (ix) of Section 3.06
of the Servicing Agreement and the amount of any
Servicing Fee Shortfall for such Quarterly Payment Date
and for each Monthly Payment Date following the
immediately preceding Quarterly Payment Date:
(ix) Amount of Administration Fee for related Collection
Period:__________ ($_______ per $1,000 original
principal amount of Notes)
(x) Aggregate amount of Realized Losses (if any) for the
related Collection Period:__________
(xi) Financed Student Loans delinquent at end of related
Collection Period: number of delinquent loans:
________; aggregate unpaid principal balance of
delinquent loans: ___________________
(xii) 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: $___________
(xiii) 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: $__________
B-3
(xiv) Amount in the Reserve Account (after giving effect to
(xii)):__________
(xv) Amount in the Collateral Reinvestment Account (after
giving effect to (xiii)):__________
(xvi) Consolidation loans: ___________ loans with aggregate
principal balance of $________ were originated during related
Collection Period; withdrawal from Collateral Reinvestment
Account to fund origination of Consolidation Loans during
related Collection Period:
$-------
(xvii) Add-on Consolidation Loans: ______ loans with aggregate
principal balance 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: $_____
(xviii) Serial Loans: _______ loans with aggregate principal
balance of $_______ (portion represented by Purchase
Premium Amounts ) were purchased during the
related Collection Period.
(xix) New Loans: _______ loans with aggregate principal
balance of $_______ (portion represented by Purchase
Premium Amounts ) were purchased during the
related Collection Period.
B-4
(xx) 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
B-5
SCHOOL TYPE:
Traditional
Vocational/Proprietary
B-6
