SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event reported):
December 19, 1996
SIGNET BANK
(Exact name of registrant as specified in its charter)
(Administrator of Signet Student Loan Trust 1996-A)
Virginia 33-94846 54-1088621
(State or other Commission File (IRS Employer
jurisdiction of Number Identification No.)
incorporation)
7 North Eighth Street, Richmond, Virginia 23219
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including area code):
(804) 771-7060
Page 1 of 6
The exhibit index is located on page 6.
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ITEM 5. OTHER EVENTS.
On December 19, 1996, the following agreements were executed and
delivered by the respective parties thereto: (a) the Note Underwriting Agreement
relating to the Floating Rate Class A-1 Asset Backed Notes and Class A-2 Asset
Backed Notes, dated December 19, 1996, by and among Signet Bank ("Signet"),
Credit Suisse First Boston (the "Underwriters"), on behalf of each of the
underwriters named in Schedule 1 thereof; and (b) the Certificate Underwriting
Agreement relating to the Floating Rate Asset Backed Certificates dated December
19, 1996, by and among Signet Bank, and the Underwriter, on behalf of each of
the underwriters named in Schedule 1 thereto.
On December 27, 1996, the following agreements were executed and
delivered by the respective parties thereto: (a) the Loan Sale Agreement, dated
as of November 1, 1996, among Signet Student Loan Trust 1996-A, as Issuer (the
"Trust"), Signet, as Seller, and the First National Bank of Chicago, not in its
individual capacity but solely as eligible lender trustee (the "Eligible Lender
Trustee"); (b) the Master Servicing Agreement dated as of November 1, 1996,
among the Trust, as Issuer, Signet, as Master Servicer, and the Eligible Lender
Trustee; (c) the Administration Agreement, dated as of November 1, 1996, among
the Trust, Signet, as Administrator and the Bank of New York, not in its
individual capacity but solely as indenture trustee (the "Indenture Trustee");
(d) the Trust Agreement, dated November 1, 1996, among Signet, as depositor,
Signet Student Loan Corporation and the Eligible Lender Trustee; and (e) the
Indenture, dated as of November 1, 1996, between the Trust, as issuer, and the
Indenture Trustee.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL STATEMENTS AND
EXHIBITS.
(c) Exhibits.
1.1 Note Underwriting Agreement, relating to the Floating
Rate Class A-1 Asset Backed Notes and Class A-2 Asset
Backed Notes, dated December 19, 1996, by and among
Signet and the Underwriter, on behalf of each of the
underwriters named in Schedule 1 thereto.
1.2 Certificate Underwriting Agreement, relating to the
Floating Rate Asset Backed Certificates, dated
December 19, 1996, by and among Signet and the
Underwriter, on behalf of each of the underwriters
named in Schedule 1 thereto.
Page 2 of 6
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4.1 Trust Agreement, dated as of November 1, 1996, among
Signet, as depositor, Signet Student Loan Corporation
and the Eligible Lender Trustee.
4.2 Indenture, dated as of November 1, 1996, between the
Trust, as issuer, and the Indenture Trustee.
99.1 Loan Sale Agreement, dated as of November 1, 1996,
among the Trust, as issuer, Signet, as Seller, and
the Eligible Lender Trustee.
99.2 Master Servicing Agreement, dated as of November 1,
1996, among the Trust, as issuer, Signet, as Master
Servicer, and the Eligible Lender Trustee.
99.3 Administration Agreement, dated as of November 1,
1996, among the Trust, Signet, as Administrator, and
the Indenture Trustee.
Page 3 of 6
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Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SIGNET STUDENT LOAN TRUST 1996-A
By: SIGNET BANK
By: /s/ SUZANNE BACHMAN
------------------------
Suzanne Bachman
Senior Vice President
Date: March 17, 1997
Page 4 of 6
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
EXHIBITS
TO
FORM 8-K
SIGNET BANK
(Exact name of registrant as specified in its charter)
Page 5 of 6
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INDEX TO EXHIBITS
Exhibit
Number Exhibits
1.1 Note Underwriting Agreement, relating to the Floating Rate
Class A-1 Asset Backed Notes and Class A-2 Asset Backed Notes,
dated December 19, 1996, by and among Signet and the
Underwriter, on behalf of each of the underwriters named in
Schedule 1 thereto.
1.2 Certificate Underwriting Agreement, relating to the Floating
Rate Asset Backed Certificates, dated December 19, 1996, by
and among Signet and the Underwriter, on behalf of each of the
underwriters named in Schedule 1 thereto.
4.1 Trust Agreement, dated as of November 1, 1996, among Signet,
as depositor, Signet Student Loan Corporation and the Eligible
Lender Trustee.
4.2 Indenture, dated as of November 1, 1996, between the Trust, as
issuer, and the Indenture Trustee.
99.1 Loan Sale Agreement, dated as of November 1, 1996, among the
Trust, as issuer, Signet, as Seller, and the Eligible Lender
Trustee.
99.2 Master Servicing Agreement, dated as of November 1, 1996,
among the Trust, as issuer, Signet, as Master Servicer, and
the Eligible Lender Trustee.
99.3 Administration Agreement, dated as of November 1, 1996, among
the Trust, Signet, as Administrator, and the Indenture
Trustee.
Page 6 of 6
Exhibit 1.1
SIGNET STUDENT LOAN TRUST 1996-A
$252,000,000
FLOATING RATE CLASS A-1 ASSET BACKED NOTES, AND
$161,439,000
FLOATING RATE CLASS A-2 ASSET BACKED NOTES
NOTE UNDERWRITING AGREEMENT
December 19, 1996
Credit Suisse First Boston Corporation
As Representative of the
several Underwriters
Eleven Madison Avenue
New York, NY 10010-3629
Dear Sirs:
1. Introductory. Signet Bank, a Virginia banking corporation
("Signet" or the "Seller"), proposes to cause Signet Student Loan Trust 1996-A
(the "Trust") to issue and sell $252,000,000 principal amount of its Floating
Rate Class A-1 Asset Backed Notes (the "Class A-1 Notes") and $161,439,000
principal amount of its Floating Rate Class A-2 Asset Backed Notes (the Class
A-2 Notes and collectively with the Class A-1 Notes, the "Notes"). $189,000,000
principal amount of Class A-1 Notes and $121,439,000 principal amount of Class
A-2 Notes (such Class A-1 Notes and Class A-2 Notes, the "Underwriter Notes")
will be sold to the underwriters named in Schedule I hereto (the "Underwriters")
for whom you (the "Representative") are acting as representative and $63,000,000
principal amount of Class A-1 Notes and $40,000,000 principal amount of Class
A-2 Notes will be sold directly by Signet (the "Directly Offered Notes"). The
assets of the Trust include, among other things, a pool of student loans (the
"Initial Financed Student Loans") and certain monies due thereunder after
November 1, 1996 (the "Cutoff Date"). Such Initial Financed Student Loans will
be sold to the Eligible Lender Trustee (as defined below) on behalf of the Trust
by the Seller pursuant to a sale agreement, dated as of November 1, 1996 (the
"Loan Sale Agreement") among the Trust, the Seller and The First National Bank
of Chicago, a national banking association, as eligible lender trustee (the
"Eligible Lender Trustee").
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Under certain circumstances after the Closing Date (as defined below), the
Eligible Lender Trustee, acting on behalf of the Trust, may acquire additional
student loans ("Additional Student Loans", together with the Initial Financed
Student Loans, the "Financed Student Loans"). The Financed Student Loans are to
be serviced by Signet as master servicer (the "Master Servicer") pursuant to a
master servicing agreement, dated as of November 1, 1996 (the "Master Servicing
Agreement"), among the Trust, the Master Servicer and the Eligible Lender
Trustee. The Notes will be issued pursuant to an Indenture to be dated as of
November 1, 1996 (as amended and supplemented from time to time, the
"Indenture"), between the Trust and The Bank of New York, a New York banking
corporation, as indenture trustee (the "Indenture Trustee"). The Certificates
will be issued pursuant to a trust agreement to be dated as of November 1, 1996
(the "Trust Agreement"), among the Seller, as Depositor, Signet Student Loan
Corporation, a Virginia corporation (the "Company"), and the Eligible Lender
Trustee. An individual residing in Delaware will be appointed as a co-trustee
under the Trust Agreement pursuant to a co-trustee agreement, dated as of
November 1, 1996 (the "Co- Trustee Agreement"), between such individual and the
Eligible Lender Trustee.
Simultaneously with the issuance and sale of the Notes as
contemplated herein, the Trust will issue $14,996,000 principal amount of its
Floating Rate Asset Backed Certificates (the "Certificates"). The Certificates
will be sold pursuant to an underwriting agreement dated the date hereof (the
"Certificate Underwriting Agreement") between the Seller and Credit Suisse First
Boston Corporation. The Notes and the Certificates are hereinafter referred to
collectively as the "Securities."
Capitalized terms used and not otherwise defined herein shall
have the meanings given to them in Appendix A hereto.
2. Representations and Warranties of the Seller. (a) The
Seller represents and warrants to and agrees with the several Underwriters that:
(i) The Seller meets the requirements for use of Form
S-3 under the Securities Act of 1933, as amended (the "Act"), and has
filed with the Securities and Exchange Commission (the "Commission") a
registration statement (Registration No. 33-94846) on such Form,
including a related preliminary basic prospectus and a preliminary
prospectus supplement, for the registration under the Act of the
offering and sale of the Securities. The Seller may have filed one or
more amendments thereto, each of which amendments has previously been
furnished to the Representative. The Seller will next file with the
Commission (i) prior to the effectiveness of such registration
statement, an
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amendment thereto (including the form of final basic prospectus and the
form of final prospectus supplement relating to the Securities), (ii)
after effectiveness of such registration statement, a final basic
prospectus and a final prospectus supplement relating to the Securities
in accordance with Rules 430A and 424(b)(1) or (4) under the Act, or
(iii) a final basic prospectus and a final prospectus supplement
relating to the Securities in accordance with Rules 415 and 424(b)(2)
or (5).
In the case of clauses (ii) and (iii), the Seller has included
in such registration statement, as amended at the Effective Date, all
information (other than Rule 430A Information) required by the Act and
the rules thereunder to be included in the Prospectus with respect to
the Notes and the offering thereof. As filed, such amendment and form
of final prospectus supplement, or such final prospectus supplement,
shall include all Rule 430A Information, together with all other such
required information, with respect to the Notes and the offering
thereof and, except to the extent that the Representative shall agree
in writing to a modification, shall be in all substantive respects in
the form furnished to the Representative prior to the Execution Time
or, to the extent not completed at the Execution Time, shall contain
only such specific additional information and other changes (beyond
that contained in the latest preliminary basic prospectus and
preliminary prospectus supplement, if any, that have previously been
furnished to the Representative) as the Seller has advised the
Representative, prior to the Execution Time, will be included or made
therein. If the Registration Statement contains the undertaking
specified by Regulation S-K Item 512(a), the Registration Statement, at
the Execution Time, meets the requirements set forth in Rule
415(a)(1)(x).
For purposes of this Agreement, "Effective Time" means the
date and time as of which such registration statement, or the most
recent post-effective amendment thereto, if any, was declared effective
by the Commission, and "Effective Date" means the date of the Effective
Time. "Execution Time" shall mean the date and time that this Agreement
is executed and delivered by the parties hereto. Such registration
statement, as amended at the Effective Time, including all information
deemed to be a part of such registration statement as of the Effective
Time pursuant to Rule 430A(b) under the Act, and including the exhibits
thereto and any material incorporated by reference therein, is
hereinafter referred to as the "Registration Statement". "Basic
Prospectus" shall mean any prospectus referred to above contained in
the Registration Statement at the Effective Date, including any
Preliminary Prospectus
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Supplement. "Preliminary Prospectus Supplement" shall mean the
preliminary prospectus supplement to the Basic Prospectus which
describes the Notes and the offering thereof and is used prior to
filing of the Prospectus. "Prospectus" shall mean the prospectus
supplement relating to the Securities that is first filed pursuant to
Rule 424(b) after the Execution Time, together with the Basic
Prospectus or, if no filing pursuant to Rule 424(b) is required, shall
mean the prospectus supplement relating to the Notes, including the
Basic Prospectus, included in the Registration Statement at the
Effective Date. "Rule 430A Information" means information with respect
to the Notes and the offering of the Securities permitted to be omitted
from the Registration Statement when it becomes effective pursuant to
Rule 430A. "Rule 415", "Rule 424", "Rule 430A" and "Regulation S-K"
refer to such rules or regulations under the Act. Any reference herein
to the Registration Statement, a Preliminary Prospectus Supplement or
the Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 which
were filed under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), on or before the Effective Date of the Registration
Statement or the issue date of the Basic Prospectus, such Preliminary
Prospectus Supplement or the Prospectus, as the case may be; and any
reference herein to the terms "amend", "amendment" or "supplement" with
respect to the Registration Statement, the Basic Prospectus, any
Preliminary Prospectus Supplement or the Prospectus shall be deemed to
refer to and include the filing of any document under the Exchange Act
after the Effective Date of the Registration Statement, or the issue
date of the Basic Prospectus, to any Preliminary Prospectus Supplement
or the Prospectus, as the case may be, deemed to be incorporated
therein by reference.
(ii) On the Effective Date and on the date of this
Agreement, the Registration Statement did or will, and, when the
Prospectus is first filed (if required) in accordance with Rule 424(b)
and on the Closing Date (as defined below), the Prospectus (and any
supplements thereto) will, comply in all material respects with the
applicable requirements of the Act, the Exchange Act and the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), and the
respective rules and regulations of the Commission thereunder (the
"Rules and Regulations"); on the Effective Date, the Registration
Statement did not or will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not
misleading; and, on the Effective Date, the Prospectus (together with
any supplement thereto) will not,
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include any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, however, that the Seller makes no representations or
warranties as to the information contained in or omitted from the
Registration Statement or the Prospectus (or any supplement thereto) in
reliance upon and in conformity with information furnished in writing
to the Seller by any Underwriter through the Representative
specifically for use in the Registration Statement or the Prospectus
(or any supplement thereto).
(iii) The Seller's representations and warranties in the
Loan Sale Agreement, the Administration Agreement and the Trust
Agreement will be true and correct in all material respects as of the
Closing Date and each such representation and warranty will be true and
correct in all material respects on each date thereafter if and to the
extent that on such date such representation and warranty is made again
by the Seller pursuant to the terms of the related agreement.
(iv) This Agreement has been duly authorized, executed
and delivered by the Seller. The execution, delivery and performance of
this Agreement and the issuance and sale of the Notes and compliance
with the terms and provisions hereof will not result in a breach or
violation of any of the terms and provisions of, or constitute a
default under, any agreement or instrument to which the Seller is a
party or by which the Seller is bound or to which any of the properties
of the Seller is subject which could reasonably be expected to have a
material adverse effect on the transactions contemplated herein. The
Seller has full power (corporate and other) and authority to cause the
Trust to authorize, issue and sell the Notes, all as contemplated by
this Agreement.
(v) Other than as contemplated by this Agreement or as
disclosed in the Prospectus, there is no broker, finder or other party
that is entitled to receive from the Seller or any of its affiliates or
an underwriter any brokerage or finder's fee or other fee or commission
as a result of any of the transactions contemplated by this Agreement.
(vi) All legal or governmental proceedings, contracts or
documents of a character required to be described in the Registration
Statement or the Prospectus or to be filed as an exhibit to the
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Registration Statement have been so described or filed as required.
(vii) The Seller's assignment and delivery of the Initial
Financed Student Loans to the Eligible Lender Trustee on behalf of the
Trust as of the Closing Date and of the Additional Student Loans from
time to time thereafter pursuant to the Loan Sale Agreement will vest
in the Eligible Lender Trustee on behalf of the Trust all the Seller's
right, title and interest therein, subject to no prior lien, mortgage,
security interest, pledge, adverse claim, charge or other encumbrance.
(viii) The Trust's assignment of the Financed Student
Loans to the Indenture Trustee pursuant to the Indenture will vest in
the Indenture Trustee, for the benefit of the Noteholders, a first
priority perfected security interest therein, subject to no prior lien,
mortgage, security interest, pledge, adverse claim, charge or other
encumbrance.
(b) The Seller hereby agrees with the Underwriters that, for
all purposes of this Agreement, the only information furnished to the Seller by
the Underwriters through the Representative specifically for use in the
Registration Statement, the Prospectus, or any amendment or supplement thereto,
or any related preliminary prospectus, are the statements with respect to
stabilization on the second page of, and the statements under the caption
"Underwriting" in, the preliminary prospectus and the Prospectus.
3. Purchase, Sale and Delivery of the Notes. On the basis of
the representations, warranties and agreements herein contained, but subject to
the terms and conditions herein set forth, the Seller agrees to cause the Trust
to sell to the Underwriters, and the Underwriters agree, severally and not
jointly, to purchase from the Trust, the respective principal amounts of the
Class A-1 Notes set forth opposite the names of the Underwriters in Schedule I
hereto at a purchase price of 99.65% of the principal amount thereof and the
respective principal amounts of the Class A-2 Notes set forth opposite the names
of the Underwriters in Schedule I hereto at a purchase price of 99.55% of the
principal amount thereof.
The Seller will deliver the Underwriter Notes to the
Representative for the respective accounts of the Underwriters, against payment
of the purchase price to or upon the order of the Seller by wire transfer or
check in Federal (same day) Funds, at the office of Brown & Wood LLP, One World
Trade Center, New York, New York 10048-0557, at 10:00 a.m., New York time, on
December 27, 1996, or at such other time not later than seven full business days
thereafter as the Representative and the Seller
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determine, such time being herein referred to as the "Closing Date". The Notes
to be so delivered will be initially represented by one or more Notes registered
in the name of Cede & Co., the nominee of The Depository Trust Company ("DTC").
The interests of beneficial owners of the Notes will be represented by book
entries on the records of DTC and participating members thereof. Definitive
Notes will be available only under the limited circumstances specified in the
Indenture.
4. Offering by the Underwriters. It is understood that, after
the Registration Statement becomes effective, the several Underwriters propose
to offer the Underwriter Notes for sale to the public (which may include
selected dealers) as set forth in the Prospectus. After the Notes are released
for sale to the public, the Underwriters may vary from time to time the public
offering price, selling concessions and reallowances to dealers that are members
of the National Association of Securities Dealers, Inc. ("NASD") and other terms
of sale hereunder and under such selling arrangements. Sales by Signet of the
Directly Offered Notes shall be on the terms specified under the selling
arrangements then in effect; provided, however, that any sales of Directly
Offered Notes by Signet to the Underwriters shall be at a price equal to the
public offering price less the selling concession then in effect and shall
otherwise be subject to the same terms and conditions as apply to the sales to
the Underwriters of the Underwriter Notes; and provided, further that any sales
of Underwriter Notes by the Underwriters to Signet shall be at the public
offering price then in effect. Without limiting the foregoing, all sales of
directly Offered Notes by Signet shall comply with the rules of the NASD that
would apply to such sales if Signet were a member of NASD. If the purchase and
sale of the Underwriter Notes are consummated, the Underwriters covenant and
agree to pay the Seller $100,000 plus an additional sum to be determined by the
Underwriters and the Seller prior to the ninetieth day after the Closing Date as
partial reimbursement for the expenses of the Seller.
5. Covenants of the Seller. The Seller covenants and agrees
with the several Underwriters that:
(a) The Seller will use its best efforts to cause the
Registration Statement, and any amendment thereto, if not effective at the
Execution Time, to become effective. Prior to the termination of the offering of
the Notes, the Seller will not file any amendment of the Registration Statement
or supplement to the Prospectus unless the Seller has furnished the
Representative a copy for its review prior to filing and will not file any such
proposed amendment or supplement to which the Representative reasonably objects.
Subject to the foregoing sentence, if the Registration Statement has become or
becomes effective pursuant to Rule 430A, or filing of the Prospectus is
otherwise required
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under Rule 424(b), the Seller will file the Prospectus, properly completed, and
any supplement thereto, with the Commission pursuant to and in accordance with
the applicable paragraph of Rule 424(b) within the time period prescribed and
will provide evidence satisfactory to the Representative of such timely filing.
(b) The Seller will advise the Representative promptly of any
proposal to amend or supplement the registration statement as filed or the
related prospectus or the Registration Statement or the Prospectus and will not
effect such amendment or supplementation without the consent of the
Representative prior to the Closing Date, and thereafter will not effect any
such amendment or supplementation (other than an amendment or supplementation
which provides solely for the issuance by another trust of other series of
securities) to which the Representative reasonably objects; the Seller will also
advise the Representative promptly of any request by the Commission for any
amendment of or supplement to the Registration Statement or the Prospectus or
for any additional information (other than an amendment or supplementation which
provides solely for the issuance by another trust of other series of
securities); and the Seller will also advise the Representative promptly of the
effectiveness of the Registration Statement and of any amendment or supplement
to the Registration Statement or the Prospectus (other than an amendment or
supplementation which provides solely for the issuance by another trust of other
series of securities) and of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the institution or
threat of any proceeding for that purpose and the Seller will use its best
efforts to prevent the issuance of any such stop order and to obtain as soon as
possible the lifting of any issued stop order.
(c) If, at any time when a prospectus relating to the Notes is
required to be delivered under the Act, any event occurs as a result of which
the Prospectus as then amended or supplemented would contain an untrue statement
of a material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or if it is necessary at any time to amend the
Registration Statement or supplement the Prospectus to comply with the Act or
the Exchange Act, the Seller promptly will prepare and file, or cause to be
prepared and filed, with the Commission an amendment or supplement which will
correct such statement or omission, or an amendment or supplement which will
effect such compliance. Neither the consent of the Representative to, nor the
delivery of the several Underwriters of, any such amendment or supplement shall
constitute a waiver of any of the conditions set forth in Section 6.
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(d) As soon as practicable, but not later than the
Availability Date (as defined below), the Seller will cause the Trust to make
generally available to Noteholders an earnings statement of the Trust covering a
period of at least twelve months beginning after the Effective Date which will
satisfy the provisions of Section 11(a) of the Act and Rule 158 of the
applicable Rules and Regulations thereunder. For the purpose of the preceding
sentence, "Availability Date" means the 45th day after the end of the fourth
fiscal quarter following the fiscal quarter that includes the original effective
date of the Registration Statement, except that, if such fourth fiscal quarter
is the last quarter of the Trust's fiscal year, "Availability Date" means the
90th day after the end of such fourth fiscal quarter.
(e) The Seller will furnish to the Representative copies of
the Registration Statement (at least one of which will be signed and will
include all exhibits), each related preliminary prospectus, the Prospectus and
all amendments and supplements to such documents, in each case as soon as
available and in such quantities as the Representative reasonably requests.
(f) The Seller will assist you in arranging for the
qualification of the Notes for sale under the laws of such states as the several
Underwriters may reasonably require and will continue to assist you in
maintaining such qualifications in effect so long as required for the
distribution; provided, however, that neither the Seller nor the Trust shall be
required to qualify to do business in any jurisdiction in which it is not now
qualified or to take any action which would subject it to general or unlimited
service of process in any jurisdiction in which it is not now subject to service
of process.
(g) For a period from the date of this Agreement until the
retirement of the Notes, or until such time as the several Underwriters shall
cease to maintain a secondary market in the Notes, whichever occurs first, the
Seller will deliver to the Representative the annual statements of compliance
and the annual independent certified public accountants' reports furnished to
the Indenture Trustee or the Eligible Lender Trustee pursuant to the Master
Servicing Agreement, as soon as practicable after such statements and reports
are furnished to the Indenture Trustee or the Eligible Lender Trustee.
(h) So long as any of the Notes are outstanding, the Seller
will furnish to the Representative (i) as soon as practicable after the end of
the fiscal year all documents required to be distributed to Noteholders or filed
with the Commission on behalf of the Trust pursuant to the Exchange Act, or any
order of the Commission thereunder and (ii) from time to time, any other
information concerning the Seller's student
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lending business or the transaction contemplated hereby as the Representative
may reasonably request.
(i) On or before the Closing Date, the Seller shall mark its
accounting and other records, if any, relating to the Initial Financed Student
Loans and shall cause the Master Servicer to mark the computer records of the
Master Servicer relating to the Initial Financed Student Loans to show the
absolute ownership by the Eligible Lender Trustee on behalf of the Trust of the
Initial Financed Student Loans, and from and after the Closing Date the Seller
will take, and cause the Master Servicer to take, such actions with regard to
any Additional Student Loans at the time of the conveyance thereof to the Trust
and neither the Seller nor the Master Servicer shall take any action
inconsistent with the ownership by the Eligible Lender Trustee on behalf of the
Trust of the Financed Student Loans, other than as permitted by the Loan Sale
Agreement or the Master Servicing Agreement.
(j) To the extent, if any, that the rating provided with
respect to the Notes by the rating agency or agencies that initially rate the
Notes is conditional upon the furnishing of documents or the taking of any other
actions by the Seller agreed upon on or prior to the Closing Date, the Seller
shall furnish or shall cause to be furnished such documents and take any such
other actions. A copy of any such document shall be provided to the
Representative at the time it is delivered to the rating agencies.
(k) For the period beginning on the date of this Agreement and
ending on the later of the Closing Date and the termination of the underwriting
syndicate for the Notes, none of the Seller and any trust originated, directly
or indirectly, by the Seller will, without the prior written consent of the
Representative, offer to sell or sell notes (other than the Notes)
collateralized by, or certificates (other than the Certificates) evidencing an
ownership interest in, student loans; provided, however, that this shall not be
construed to prevent the sale of student loans by the Seller.
(l) The Seller will apply the net proceeds of the offering and
the sale of the Notes and the Certificates that it receives in the manner set
forth in the Prospectus under the caption "Use of Proceeds".
(m) The Seller will pay all expenses incident to the
performance of its obligations under this Agreement, including fees and expenses
relating to (i) the printing and filing of the documents (including the
Registration Statement and Prospectus), (ii) the preparation, issuance and
delivery of the Notes to the Representative, (iii) the fees and disbursements of
the Seller's counsel and accountants, (iv) the qualification of the Notes
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under securities laws in accordance with the provisions of Section 5(f),
including filing fees and the fees and disbursements of counsel for the
Representative in connection therewith and in connection with the preparation of
any blue sky or legal investment survey, if any is requested, (v) the printing
and delivery to the Representative of copies of the Registration Statement as
originally filed and of each amendment thereto, (vi) the printing and delivery
to the Representative of copies of any blue sky or legal investment survey
prepared in connection with the Notes, (vii) any fees charged by rating agencies
for the rating of the Notes and (viii) the fees and expenses, if any, incurred
with respect to any filing with the National Association of Securities Dealers,
Inc. It is understood that, except as otherwise specifically provided herein,
the Underwriters will pay all of their own costs and expenses (including the
fees and disbursements of Brown & Wood LLP, transfer taxes on resale of the
Notes by them and any advertising expenses incurred by them).
6. Conditions of the Obligations of the Underwriters. The
obligations of the several Underwriters to purchase and pay for the Notes will
be subject to the accuracy of the representations and warranties on the part of
the Seller herein, to the accuracy of the written statements of officers of the
Seller made pursuant to the provisions of this Section, to the performance by
the Seller of its obligations hereunder and to the following additional
conditions precedent:
(a) If the Effective Time is not prior to the execution and
delivery of this Agreement, the Effective Time shall have occurred not later
than 6:00 p.m. New York City time on the date of this Agreement or such later
time or date as shall have been consented to by the Representative.
(b) If the Effective Time is prior to the execution and
delivery of this Agreement, the Prospectus and any supplements thereto shall
have been filed with the Commission in accordance with the Rules and Regulations
and Section 5(a) hereof. Prior to the Closing Date, no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or, to the knowledge of
the Seller or the Representative, shall be contemplated by the Commission.
(c) On or prior to the Closing Date, the Representative shall
have received a letter dated the Closing Date, in form and substance reasonably
satisfactory to the Representative and its counsel, from KPMG Peat Marwick with
respect to certain agreed-upon procedures, substantially in the form of the
drafts to which the Representative has previously agreed and otherwise in form
and substance reasonably satisfactory to the Representative and its counsel.
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(d) Subsequent to the execution and delivery of this
Agreement, there shall not have occurred (i) any change, or any development
involving a prospective change, in or affecting particularly the business or
properties of the Trust, the Seller, the Master Servicer or the Company which,
in the reasonable judgment of the Representative, materially impairs the
investment quality of the Notes or makes it impractical or inadvisable to market
the Notes; (ii) any downgrading in the rating of any debt securities of the
Seller or the Master Servicer by any "nationally recognized statistical rating
organization" (as defined for purposes of Rule 436(g) under the Act), or any
public announcement that any such organization has under surveillance or review
its rating of any debt securities of the Seller or the Master Servicer (other
than an announcement with positive implications of a possible upgrading, and no
implication of a possible downgrading, of such rating) which in the reasonable
judgment of the Representative materially impairs the investment quality of the
Notes or makes it impractical or inadvisable to market the Notes; (iii) any
suspension or material limitation of trading in securities generally on the New
York Stock Exchange, or any setting of minimum prices for trading on such
exchange; (iv) any suspension of trading of any securities of the Seller or the
Master Servicer on any exchange or in the over-the-counter market; (v) any
banking moratorium declared by Federal or New York authorities; or (vi) any
outbreak or escalation of major hostilities in which the United States is
involved, any declaration of war by Congress, or any other substantial national
or international calamity or emergency if, in the reasonable judgment of the
Representative, the effect of any such outbreak, escalation, declaration,
calamity or emergency makes it impractical or inadvisable to proceed with
completion of the sale of and payment for the Notes.
(e) The Representative shall have received an opinion of
Winston & Strawn, special Illinois counsel to Signet Bank, dated the Closing
Date, in such form as is satisfactory in form and substance to the
Representative and its counsel.
(f) The Representative shall have received an opinion of
McGuire, Woods, Battle & Boothe, L.L.P., counsel to the Seller and the Trust,
dated the Closing Date, in the form attached hereto as Exhibit B, or as is
otherwise satisfactory in form and substance to the Representative and its
counsel.
(g) The Representative shall have received an opinion
addressed to the several Underwriters of McGuire, Woods, Battle & Boothe,
L.L.P., in its capacity as counsel for the Seller and the Trust, dated the
Closing Date, in form and substance satisfactory to the Representative and its
counsel, to the effect that the statements in the Prospectus under the headings
"Federal Income Tax Consequences" and "State Tax Consequences" and in the
Prospectus Supplement under the heading "Federal Income Tax and
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State Tax Consequences" to the extent that they constitute statements of matters
of law or legal conclusions with respect thereto, have been prepared or reviewed
by such counsel and accurately describe the material consequences to holders of
the Notes under federal and Maryland law.
(h) The Representative shall have received an opinion
addressed to the several Underwriters of McGuire, Woods, Battle & Boothe,
L.L.P., as counsel for the Seller, the Company and the Trust, dated the Closing
Date, in form and substance satisfactory to the Representative and its counsel,
concerning (i) the sale of or security interest in the Financed Student Loans
conveyed by the Seller to the Trust and (ii) the nonconsolidation of the Company
with the Seller and the Company with its parent, Signet Banking Corporation in
the event of a bankruptcy or insolvency of the Seller or Signet Banking
Corporation, respectively.
(i) The Representative shall have received an opinion of
Richards, Layton & Finger, special Delaware counsel for the Trust, dated the
Closing Date, in form and substance satisfactory to the Representative and its
counsel, to the effect that:
(i) The Trust Agreement constitutes the valid and
binding obligation of the Eligible Lender Trustee, the Delaware
Trustee, the Depositor and the Company, enforceable against the
Eligible Lender Trustee, the Delaware Trustee, the Depositor and the
Company, in accordance with its terms subject to (i) applicable
bankruptcy, insolvency, moratorium, receivership, reorganization,
fraudulent conveyance and similar laws relating to and affecting the
rights and remedies of creditors generally, and (ii) principles of
equity (regardless of whether considered and applied in a proceeding in
equity or at law).
(ii) The Trust has been duly formed and is validly
existing as a business trust under the Business Trust Statute. The
Trust Agreement authorizes the Trust to execute and deliver the Trust
Agreement, the Indenture, the Master Servicing Agreement, the Loan Sale
Agreement and the Administration Agreement to issue the Certificates
and the Notes and to grant the Trust Estate to the Indenture Trustee as
security for the Notes.
(iii) Assuming that the Certificates have been duly
executed and issued by the Trust and duly authenticated by the Eligible
Lender Trustee in accordance with the Trust Agreement and delivered to
and paid for by the purchaser thereof pursuant to the Certificate
Underwriting Agreement, the Certificates have been validly issued and
are entitled to the benefits of the Trust Agreement.
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(iv) Except for the timely filing in the future of
continuation statements with respect to the financing statements, no
other filing is required in the State of Delaware in order to make
effective the lien of the Indenture. Insofar as Article 9 of the
Delaware Uniform Commercial Code, 6 Del. C. ss.9-101 et seq. (the
"UCC"), applies (without regard to conflict of laws principles) and
assuming that the security interest in that portion of the Collateral
that consists of general intangibles and accounts, as defined under the
UCC, has been duly created and has attached, the Indenture Trustee has
a perfected security interest in such general intangibles and accounts
and the proceeds thereof and, assuming that the UCC search accurately
lists all of the financing statements filed naming the Trust as debtor
and describing any portion of the Collateral consisting of such general
intangibles and accounts and the proceeds thereof, such security
interest of the Indenture Trustee will be prior to the security
interest of all other creditors of the Trust whose security interests
are perfected solely by filing UCC financing statements in the State of
Delaware, excluding purchase money security interests under ss.9-312 of
the UCC and temporarily perfected security interests in proceeds under
ss. 9-306 of the UCC.
(v) Under ss.3805(b) of the Business Trust Statute, no
creditor of any Certificateholder shall have any right to obtain
possession of, or otherwise exercise legal or equitable remedies with
respect to, the property of the Trust except in accordance with the
terms of the Trust Agreement.
(vi) Under ss. 3805(c) of the Business Trust Statute,
and assuming that the Loan Sale Agreement conveys good title to the
Initial Financed Student Loans to the Trust as a true sale and not as a
security arrangement, the Trust rather than the Certificateholders is
the owner of the Initial Financed Student Loans.
(vii) The Delaware Trustee is not required to hold legal
title to the Trust Estate in order for the Trust to qualify as a
business trust under the Act.
(viii) The execution and delivery by the Eligible Lender
Trustee or the Delaware Trustee of the Trust Agreement and, on behalf
of the Trust, of the Trust Agreement, the Indenture, the Master
Servicing Agreement, the Loan Sale Agreement and the Administration
Agreement do not require any consent, approval or authorization of, or
any registration of filing with, any governmental authority of the
State of Delaware, except for the filing of the Certificate of Trust
with the Secretary of State.
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(ix) Neither the consummation by the Eligible Lender
Trustee or the Delaware Trustee of the transactions contemplated in the
Trust Agreement or, on behalf of the Trust, the transactions
contemplated in the Trust Agreement, the Indenture, the Master
Servicing Agreement, the Loan Sale Agreement and the Administration
Agreement nor the fulfillment of the terms thereof by the Eligible
Lender Trustee or the Delaware Trustee will conflict with or result in
a breach or violation of any law of the State of Delaware.
(j) The Representative shall have received an opinion of The
Law Department of The First National Bank of Chicago, counsel to the Eligible
Lender Trustee, dated the Closing Date and satisfactory in form and substance to
the Representative and its counsel, to the effect that:
(i) The Eligible Lender Trustee is a national banking
association duly organized and validly existing under the laws of the
United States.
(ii) The Eligible Lender Trustee has the full corporate
trust power to accept the office of eligible lender trustee under the
Trust Agreement and to enter into and perform its obligations under the
Trust Agreement, the Master Servicing Agreement, the Loan Sale
Agreement and the Co-Trustee Agreement and, on behalf of the Trust,
under the Indenture, the Master Servicing Agreement, the Loan Sale
Agreement, the Administration Agreement and the Guarantee Agreements.
(iii) The execution and delivery of the Trust Agreement,
the Master Servicing Agreement, the Loan Sale Agreement and the
Co-Trustee Agreement by the Eligible Lender Trustee and the Indenture,
the Master Servicing Agreement, the Loan Sale Agreement, the
Administration Agreement and the Guarantee Agreements by the Eligible
Lender Trustee on behalf of the Trust, and the performance by the
Eligible Lender Trustee of its obligations under the Trust Agreement,
the Master Servicing Agreement, the Loan Sale Agreement and the
Co-Trustee Agreement, as well as the performance by the Eligible Lender
Trustee of its obligations on behalf of the Trust under the Indenture,
the Master Servicing Agreement, the Loan Sale Agreement, the
Administration Agreement and the Guarantee Agreements have been duly
authorized by all necessary action of the Eligible Lender Trustee and
each has been duly executed and delivered by the Eligible Lender
Trustee.
(iv) The Trust Agreement, the Master Servicing
Agreement, the Loan Sale Agreement and the Co-Trustee
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Agreement constitute valid and binding obligations of the Eligible
Lender Trustee enforceable against the Eligible Lender Trustee in
accordance with their terms, and the Indenture, the Master Servicing
Agreement, the Loan Sale Agreement, the Administration Agreement and
the Guarantee Agreements constitute the valid and binding obligations
of the Trust enforceable against the Trust in accordance with their
terms, except as the enforceability thereof may be (a) limited by
bankruptcy, insolvency, reorganization, moratorium, liquidation or
other similar laws affecting the rights of creditors generally, and (b)
subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
(v) The execution and delivery by the Eligible Lender
Trustee of the Trust Agreement, the Master Servicing Agreement, the
Loan Sale Agreement and the Co-Trustee Agreement and by the Eligible
Lender Trustee on behalf of the Trust of the Indenture, the Master
Servicing Agreement, the Loan Sale Agreement, the Administration
Agreement and the Guarantee Agreements do not require any consent,
approval or authorization of, or any registration or filing with, any
applicable governmental authority which has not been obtained or done.
(vi) Each of the Certificates has been duly executed and
delivered by the Eligible Lender Trustee, as eligible lender trustee
and authenticating agent. Each of the Notes has been duly executed and
delivered by the Eligible Lender Trustee on behalf of the Trust.
(vii) Neither the consummation by the Eligible Lender
Trustee of the transactions contemplated in the Trust Agreement, the
Master Servicing Agreement, the Loan Sale Agreement or the Co-Trustee
Agreement, the consummation by the Trust of the transactions
contemplated in the Indenture or the Administration Agreement nor the
fulfillment of the terms thereof by the Eligible Lender Trustee or the
Trust, as the case may be, will conflict with, result in a breach or
violation of, or constitute a default under any law or the Articles of
Association, By-Laws or other organizational documents of the Eligible
Lender Trustee or the terms of any indenture or other agreement or
instrument known to such counsel and to which the Eligible Lender
Trustee or any of its subsidiaries is a party or is bound or any
judgment, order or decree known to us to be applicable to the Eligible
Lender Trustee or any of its subsidiaries, of any court,
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regulatory body, administrative agency, governmental body or arbitrator
having jurisdiction over the Eligible Lender Trustee or any of its
subsidiaries.
(viii) There are no actions, suits or proceedings pending
or, to the best of such counsel's knowledge after due inquiry,
threatened against the Eligible Lender Trustee (as eligible lender
trustee under the Trust Agreement or in its individual capacity) before
or by any governmental authority that might materially and adversely
affect the performance by the Eligible Lender Trustee of its
obligations under, or the validity or enforceability of, the Trust
Agreement, the Master Servicing Agreement, the Loan Sale Agreement or
the Co-Trustee Agreement.
(ix) The execution, delivery and performance by the
Eligible Lender Trustee of the Trust Agreement, the Master Servicing
Agreement, the Loan Sale Agreement and the Co-Trustee Agreement, and
the execution, delivery and performance by the Eligible Lender Trustee
on behalf of the Trust of the Indenture, the Master Servicing
Agreement, the Loan Sale Agreement, the Administration Agreement and
any Guarantee Agreement will not subject any of the property or assets
of the Trust, or any portion thereof, to any liens created by or
arising under the Eligible Lender Trustee that are unrelated to the
transactions contemplated in such agreements.
(k) The Representative shall have received an opinion of
Emmet, Marvin & Martin, counsel to the Indenture Trustee, dated the Closing Date
and satisfactory in form and substance to the Representative and its counsel, to
the effect that:
(i) The Indenture Trustee is a banking corporation validly
existing under the laws of the State of New York.
(ii) The Indenture Trustee has the requisite power and
authority to execute, deliver and perform its obligations under the
Indenture and the Administration Agreement and has taken all necessary
action to authorize the execution, delivery and performance by it of
the Indenture and the Administration Agreement.
(iii) Each of the Indenture and the Administration Agreement
has been duly executed and delivered by the Indenture Trustee and
constitutes a legal, valid and binding obligation of the Trustee,
enforceable against the Indenture Trustee in accordance with its
respective terms, except that such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium, liquidation, or
other similar
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laws applicable to banking corporations affecting the enforcement of
creditors' rights generally, and by general principles of equity,
including, without limitation, concepts of materiality, reasonableness,
good faith and fair dealing (regardless of whether such enforceability
is considered in a proceeding in equity or at law).
(iv) The Notes have been duly authenticated by the Indenture
Trustee in accordance with the terms of the Indenture.
(l) The Representative shall have received an opinion of
counsel acceptable to it of each of Texas Guaranteed Student Loan Corporation,
United Student Aid Funds and Educational Credit Management Corporation (each a
"Guarantor"), each dated the Closing Date, and satisfactory in form and
substance to the Representative and its counsel, to the effect that:
(i) The Guarantor has been duly incorporated and is
validly existing as a non-profit corporation in good standing under the
laws of the State of its incorporation with full power and authority
(corporate and other) to own its properties and conduct its business,
as presently conducted by it, and to enter into and perform its
obligations under the Guarantee Agreement (and the agreements with the
Department under Section 428 of the Higher Education Act to the extent
relevant to the Guarantor's obligations under such Guarantee
Agreement), and had at all relevant times, and now has, the power,
authority and legal right to guarantee the Financed Student Loans
covered by such Guarantee Agreement and to receive, subject to
compliance with all applicable conditions, restrictions and limitations
of the Higher Education Act and any rules, regulations and
interpretations thereunder, reinsurance payments from the Department
with respect to claims paid by it on such Financed Student Loans.
(ii) The Guarantor is duly qualified to do business and
is in good standing, and has obtained all necessary licenses and
approvals in each jurisdiction in which failure to qualify or to obtain
such license or approval would render the Guarantor's obligation under
the Guarantee Agreement to guarantee the Financed Student Loans covered
thereby unenforceable by or on behalf of the Trust.
(iii) The Guarantee Agreement (and the agreements with
the Department under Section 428 of the Higher Education Act to the
extent relevant to the Guarantor's obligations under such Guarantee
Agreement) have been duly authorized, executed and delivered by the
Guarantor and are the legal, valid and binding obligation of the
Guarantor enforceable against the Guarantor in accordance with their
terms, except
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that (x) the enforceability thereof may be subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights and (y) the remedy of
specific performance and injunctive and other forms of equitable relief
may be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.
(iv) Neither the execution and delivery by the Guarantor
of the Guarantee Agreement, nor the consummation by the Guarantor of
the transactions contemplated therein nor the fulfillment of the terms
thereof by the Guarantor will conflict with, result in a breach,
violation or acceleration of, or constitute a default under, any terms
or provision of the charter or by-laws of the Guarantor or of any
indenture or other agreement or instrument to which the Guarantor is a
party or by which the Guarantor is bound, or result in a violation of
or contravene the terms of any statute, order or regulation applicable
to the Guarantor of any court, regulatory body, administrative agency
or governmental body having jurisdiction over the Guarantor.
(v) There are no actions, proceedings or investigations
pending or, to the best of such counsel's knowledge after due inquiry,
threatened against the Guarantor before or by any governmental
authority that might materially and adversely affect the performance by
the Guarantor of its obligations under, or the validity or
enforceability of, the Guarantee Agreement.
(vi) The Guarantor is a "guarantor" covered by the
provisions of Section 432(o) of the Higher Education Act.
(m) The Representative shall have received an opinion
addressed to the several Underwriters of Brown & Wood LLP, in its capacity as
special counsel to the several Underwriters, dated the Closing Date, with
respect to the validity of the Notes and the Certificates and such other related
matters as the Representative shall reasonably require and the Seller shall have
furnished or caused to be furnished to such counsel such documents as they may
reasonably request for the purpose of enabling them to pass upon such matters.
(n) The Representative shall have received an opinion of
Dean, Blakey & Moskowitz, special student loan counsel to the several
Underwriters, or in the case of (iii) below, special student loan counsel to the
Seller and the Eligible Lender Trustee, dated the Closing Date, and satisfactory
in form and substance to the Representative and its counsel, to the effect that:
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(i) The Basic Documents, and the transactions
contemplated by the Basic Documents, conform in all material respects
to the applicable requirements of the Higher Education Act, and that,
upon the due authorization, execution and delivery of the Basic
Documents and the consummation of such transactions, the Financed
Student Loans, legal title to which will be held by the Eligible Lender
Trustee on behalf of the Trust, will qualify, subject to compliance
with all applicable origination and servicing requirements with respect
thereto, to receive all applicable federal assistance payments,
including federal reinsurance and federal interest subsidies and
special allowance payments, with respect thereto.
(ii) To the extent that the statements in the Prospectus
purport to summarize or describe provisions of the Higher Education
Act, or constitute statements of matters of law or legal conclusions
with respect to the Higher Education Act, such statements have been
prepared or reviewed by such counsel and accurately describe the
material consequences to holders of Certificates under the Higher
Education Act.
(iii) Such counsel has examined the Registration
Statement and the Prospectus, and nothing has come to such counsel's
attention that would lead such counsel to believe that, solely with
respect to the Higher Education Act and the student loan business, the
Registration Statement or the Prospectus or any amendment or supplement
thereto as of the respective dates thereof or on the Closing Date
contains an untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements therein not
misleading.
(iv) Each of the Seller and the Eligible Lender Trustee
is an "eligible lender" as such term is defined in Section 435(d) of
the Higher Education Act for purposes of holding legal title to the
Financed Student Loans.
(v) Each Guarantor is a private non-profit Family
Federal Education Loan Program ("FFELP") guaranty agency (a "Guaranty
Agency") covered by the provisions of Section 432(o) of the Higher
Education Act. In the event that the United States Secretary of
Education (the "Secretary") determines that a Guaranty Agency is unable
to meet its insurance obligations under Title IV-B of the Higher
Education Act of 1965, as amended (the "Act"), the Secretary is
required by Section 432(o) of the Act to pay otherwise valid insurance
claims submitted directly to the Secretary by FFELP lenders on loans
insured by such Guaranty Agency in the full amount of the Guaranty
Agency's insurance
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obligation thereon and in accordance with insurance requirements no
more stringent than those of the Guaranty Agency.
(vi) A security interest in the Financed Student Loans
may, pursuant to the provisions of 20 U.S.C. ss. 1047- 2(d)(3) be
perfected in the manner provided in the Uniform Commercial Code for
perfection of a security interest in accounts.
(o) The Representative shall have received certificates
dated the Closing Date of any two of the Chairman of the Board, the President,
any Executive Vice President, Senior Vice President or Vice President, the
Treasurer, any Assistant Treasurer, the Secretary, the Assistant Secretary, the
principal financial officer or the principal accounting officer of each of the
Seller and the Master Servicer in which such officers shall state that, to the
best of their knowledge after reasonable investigation, (i) the representations
and warranties of the Seller or the Master Servicer, as the case may be,
contained in the Trust Agreement, the Loan Sale Agreement, the Administration
Agreement and the Master Servicing Agreement, as applicable, are true and
correct in all material respects, that each of the Seller and the Master
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, in the case of the certificate from the Seller only, that no stop
order suspending the effectiveness of the Registration Statement has been issued
and no proceedings for that purpose have been instituted or are contemplated by
the Commission, and (ii) since December 31, 1995, except as may be disclosed in
the Prospectus or in such certificate, 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 Master Servicer, as applicable, has occurred.
(p) The Representative shall have received evidence
satisfactory to it that, on or before the Closing Date, UCC-1 financing
statements have been or are being filed in the office of the Secretary of State
of the States of Delaware, Maryland and Illinois and the State Corporation
Commission of the Commonwealth of Virginia reflecting the transfer of the
interest of the Seller in the Financed Student Loans to the Eligible Lender
Trustee on behalf of the Trust and the proceeds thereof to the Trust and the
grant of the security interest by the Trust in the Financed Student Loans and
the proceeds thereof to the Indenture Trustee.
(q) The Representative shall have received a certificate,
dated the Closing Date, from a responsible officer acceptable to it of each
Guarantor, to the effect that such officer has reviewed the Prospectus
Supplement and that the
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information therein regarding the Guarantor is fair and accurate in all material
respects.
(r) Each of the Class A-1 Notes and the Class A-2 Notes
shall be rated "AAA" by Fitch Investors Service, L.P., Moody's Investors
Service, Inc. and Standard & Poor's Ratings Services, and no rating agency shall
have placed either of the Class A-1 Notes or the Class A-2 Notes under
surveillance or review with possible negative implications.
(s) On the Closing Date, $14,996,000 aggregate principal
amount of the Certificates shall have been issued and sold.
The Seller will provide or cause to be provided to the
Representative such conformed copies of such of the foregoing opinions,
certificates, letters and documents as the Representative reasonably requests.
7. Indemnification and Contribution. (a) The Seller
will indemnify and hold each Underwriter harmless against any losses, claims,
damages or liabilities to which such Underwriter may become subject, under the
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in the Registration
Statement, the preliminary Basic Prospectus, Preliminary Prospectus Supplement
(if any), the Basic Prospectus, or the Prospectus or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will reimburse each Underwriter for
any legal or other expenses reasonably incurred by such Underwriter in
connection with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred; provided, however, that the
Seller will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement in or omission or alleged omission from any of such
documents in reliance upon and in conformity with written information furnished
to the Seller by any Underwriter specifically for use therein, provided,
further, that the foregoing indemnity agreement is subject to the condition that
insofar as it relates to any untrue statement, alleged untrue statement or
omission made in any Preliminary Prospectus but eliminated or remedied in the
Prospectus, such indemnity shall not inure to the benefit of any Underwriter
from whom a person asserting any loss, claim, damage or liability purchased
Notes which are the subject thereof, if a copy of the Prospectus was furnished
to such Underwriter and such Prospectus was required by
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the Act to be sent or given to such person with or prior to the written
confirmation of sale of such Notes to such person.
(b) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Seller against any losses, claims, damages or
liabilities to which the Seller may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement, the
preliminary Basic Prospectus, Preliminary Prospectus Supplement (if any), Basic
Prospectus, or the Prospectus or any amendment or supplement thereto or arise
out of or are based upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
relating to such Underwriter and furnished to the Seller by such Underwriter
through the Representative specifically for use therein, and will reimburse any
legal or other expenses reasonably incurred by the Seller in connection with
investigating or defending any such loss, claim, damage, liability or action as
such expenses are incurred.
(c) Promptly after receipt by an indemnified party under
this Section of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under subsection (a) or (b) above, notify the indemnifying party of the
commencement thereof; but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party
otherwise than under subsection (a) or (b) above. In case any such action is
brought against any indemnified party and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent that it may elect by written notice, jointly with any
other indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof and approval by the indemnified party
of the counsel appointed by the indemnifying party, the indemnifying party will
not be liable to such indemnified party under this Section for any legal or
other expenses subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of investigation. In no
event shall the indemnifying party be liable for fees and expenses for more than
one counsel separate from their own counsel for all
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indemnified parties in connection with any one action or related actions in the
same jurisdiction arising out of the same general allegations or circumstances
unless any such indemnified party shall have been advised by such counsel that
there may be one or more legal defenses available to it which are different from
or additional to or in conflict with those available to the other indemnified
parties and in the reasonable judgment of such counsel it is advisable for such
indemnified party to employ separate counsel. An indemnifying party will not,
without the prior written consent of the indemnified party, settle or compromise
or consent to the entry of any judgment with respect to any pending or
threatened claim, action, suit or proceeding in respect of which indemnification
or contribution may be sought hereunder (whether or not the indemnified parties
are actual or potential parties to such claim or action) unless such settlement,
compromise or consent includes an unconditional release of each indemnified
party from all liability arising out of such claim, action, suit or proceeding.
(d) If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Seller on the one hand and the Underwriters on the other from the offering
of the Notes or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Seller on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities as well as any other relevant equitable
considerations. The relative benefits received by the Seller on the one hand and
the Underwriters on the other shall be deemed to be in the same proportion as
the total net proceeds from the offering (before deducting expenses) of the
Notes received by the Seller bear to the total underwriting discounts and
commissions applicable to the Notes received by the Underwriters. The relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Seller
or by the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities referred to in the first sentence of this
subsection (d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with
24
<PAGE>
investigating or defending any action or claim which is the subject of this
subsection (d). Notwithstanding the provisions of this subsection (d), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the underwriting discount or commission applicable to the Notes
underwritten by it exceeds the amount of any damages which such Underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The obligations of each of the Underwriters to contribute are
several in proportion to their respective underwriting obligations and are not
joint.
(e) The obligations of the Seller under this Section shall
be in addition to any liability which the Seller may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who controls
any Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section shall be in addition to any liability which the
respective Underwriters may otherwise have and shall extend, upon the same terms
and conditions, to each director of the Seller, to each officer of the Seller
who has signed the Registration Statement and to each person, if any, who
controls the Seller within the meaning of the Act.
8. Default of Underwriters. If any Underwriter
participating in the offering of Notes defaults in its obligation to purchase
Notes hereunder and the aggregate principal amount of such Notes which such
defaulting Underwriter agreed, but failed, to purchase does not exceed 10% of
the total principal amount of the Underwriter Notes, you may make arrangements
satisfactory to the Seller for the purchase of such Notes by other persons, but
if no such arrangements are made within a period of 36 hours after the Closing
Date, the non-defaulting Underwriter shall be obligated, in proportion to its
respective total commitment hereunder, to purchase the Notes which such
defaulting Underwriter agreed but failed to purchase. If any Underwriter so
defaults and the aggregate principal amount of Notes with respect to which such
default occurs is more than 10% of the total principal amount of the Underwriter
Notes and arrangements satisfactory to you and the Seller for the purchase of
such Notes by other persons are not made within 36 hours after such default,
this Agreement will terminate without liability on the part of the
non-defaulting Underwriter or the Seller, except as provided in Section 9. As
used in this Agreement, the term "Underwriter" includes any person substituted
for any Underwriter under this Section. Nothing herein will relieve a defaulting
Underwriter from liability for its default.
25
<PAGE>
9. Survival of Representations and Obligations. The
respective indemnities, agreements, representations, warranties and other
statements of the Seller or its officers and of the several Underwriters set
forth in or made pursuant to this Agreement or contained in certificates of
officers of the Seller submitted pursuant hereto shall remain operative and in
full force and effect, regardless of any investigation or statement as to the
results thereof, made by or on behalf of any Underwriter, the Seller or any of
their respective representatives, officers or directors or any controlling
person, and will survive delivery of and payment for the Notes. If for any
reason the purchase of the Notes by the Underwriters is not consummated, the
Seller shall remain responsible for the expenses to be paid or reimbursed by the
Seller pursuant to Section 5 and the respective obligations of the Seller and
the Underwriters pursuant to Section 7 shall remain in effect. If for any reason
the purchase of the Notes by the Underwriters is not consummated (other than
because of a failure to satisfy the conditions set forth in items (iii), (v) and
(vi) of Section 6(d)), the Seller will reimburse the Underwriters for all
out-of-pocket expenses (including fees and disbursements of counsel) reasonably
incurred by them in connection with the offering of the Notes.
10. Notices. All communications hereunder will be in writing
and, if sent to the Underwriters, will be mailed, delivered or telegraphed and
confirmed to the Representative at Park Avenue Plaza, New York, N.Y. 10055,
Attention: Investment Banking--Transactions Advisory Group; if sent to the
Seller, will be mailed, delivered or telegraphed, and confirmed to it at Signet
Bank, 7 North 8th Street, Richmond, Virginia 23219, Attention: Treasurer;
provided, however, that any notice to an Underwriter pursuant to Section 7 will
be mailed, delivered or telegraphed and confirmed to such Underwriter. Any such
notice will take effect at the time of receipt.
11. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 7, and no
other person will have any right or obligations hereunder.
12. Representation of Underwriters. The Representative
shall act for the several Underwriters in connection with this financing, and
any action taken by the Representative will be binding upon all the
Underwriters.
13. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, but all
such counterparts shall together constitute one and the same Agreement.
26
<PAGE>
14. Applicable Law. This Agreement will be governed by,
and construed in accordance with, the laws of the State of New York.
27
<PAGE>
If the foregoing is in accordance with the Representative's
understanding of our agreement, kindly sign and return to us one of the
counterparts hereof, whereupon it will become a binding agreement between the
Seller and the several Underwriters in accordance with its terms.
Very truly yours,
SIGNET BANK
By: /s/ SUZANNE BACHMAN
___________________________
Name: Suzanne Bachman
Title: Senior Vice President
The foregoing Note
Underwriting Agreement is
hereby confirmed and
accepted as of the date
first written above.
CREDIT SUISSE FIRST BOSTON CORPORATION
By: /s/ NITA CHERRY
_______________________
Name: Nita Cherry
Title: Director
Acting on behalf of itself and as
Representative of the several Underwriters
28
<PAGE>
SCHEDULE I
Principal Amount of Principal Amount of
Underwriter Class A-1 Notes Class A-2 Notes
- --------------------------------------------------------------------------
Credit Suisse First Boston $ 94,500,000 $ 60,939,000
Corporation
Goldman, Sachs & Co. $ 94,500,000 $ 60,500,000
Total $189,000,000 $121,439,000
29
<PAGE>
APPENDIX A
[See Appendix A to Administration Agreement]
30
<PAGE>
EXHIBIT A
[Letterhead of Signet Bank]
[ ], 1996
CS First Boston Corporation
Park Avenue Plaza
New York, New York 10055
[other Underwriters]
Re: FLOATING RATE ASSET BACKED NOTES
AND FLOATING RATE ASSET BACKED CERTIFICATES
Gentlemen:
I am the General Counsel of Signet Bank (the "Seller") and have acted
as counsel to the Seller in connection with the issuance and sale by Signet
Student Loan Trust 1996-A (the "Trust") of (i) $[ ] principal amount of its
Floating Rate Class A-1 Asset Backed Notes and $[ ] principal amount of its
Floating Rate Class A-2 Asset Backed Notes (collectively, the "Notes") pursuant
to the Note Underwriting Agreement dated [ ], 1996 between the Seller and the
Underwriters named therein (the "Note Underwriting Agreement") and (ii) Floating
Rate Asset Backed Certificates in the aggregate principal amount of $[ ] (the
"Certificates") pursuant to the Certificate Underwriting Agreement dated [ ],
1996 between the Seller and the Underwriters named therein (the "Certificate
Underwriting Agreement" and, together with the Note Underwriting Agreement, the
"Underwriting Agreements"). Except as otherwise indicated herein, capitalized
terms are defined as set forth in the Underwriting Agreements. As used herein,
(i) "Principal Documents" shall mean, collectively, the Trust Agreement, the
Loan Sale Agreement, the Administration Agreement and the Master Servicing
Agreement.
Based upon and subject to the limitations and qualifications set forth
below, I am of the opinion that:
A-1
<PAGE>
(1) The Seller has been duly organized and is validly existing as a
banking corporation in good standing under the laws of the Commonwealth of
Virginia, with full power (corporate and other) and authority to own its
properties and to conduct its business as now conducted by it and to enter into
and perform its obligations under the Underwriting Agreements and the Principal
Documents, and had, at all relevant times and now has the corporate power and
authority, and legal right, to acquire, own, sell and service the Initial
Financed Student Loans and any Additional Student Loans consistent with all
applicable conditions, restrictions and limitations of the Higher Education Act.
(2) The Seller has executed and delivered the written order to the
Eligible Lender Trustee to authenticate the Certificates and such action has
been duly authorized by the Seller. When the Certificates have been duly
executed, authenticated, and delivered in accordance with the Trust Agreement
and the Certificates have been delivered and paid for pursuant to the
Certificate Underwriting Agreement, the Certificates will be validly issued and
entitled to the benefits of the Trust Agreement, subject, as to the
enforceability thereof, to bankruptcy, reorganization, insolvency, moratorium
and other laws affecting creditors' rights generally and by the application of
general principles of equity.
(3) The Seller has executed and delivered the written order to the
Eligible Lender Trustee to execute and deliver the Issuer Order to the Indenture
Trustee and such action has been duly authorized by the Seller. When the Notes
have been duly executed, delivered, and authenticated in accordance with the
Indenture and delivered and paid for pursuant to the Note Underwriting
Agreement, the Notes will be validly issued and entitled to the benefits of the
Indenture, subject, as to the enforceability thereof, to bankruptcy,
reorganization, insolvency, moratorium and other laws affecting creditors'
rights generally and by the application of general principles of equity.
(4) The Seller has duly authorized, executed, and delivered the
Underwriting Agreements and the Principal Documents and such Principal Documents
are legal, valid and binding obligations of the Seller, enforceable against the
Seller, subject, as to the enforceability thereof, to bankruptcy,
reorganization, insolvency, moratorium and other laws affecting creditors'
rights generally and to the application of general principles of equity.
(5) Neither the transfer of the Initial Financed Student Loans or the
Additional Student Loans by the Seller to the Eligible Lender Trustee on behalf
of the Trust, nor the assignment by the Seller of the Trust Estate to the Trust,
nor the grant by the Trust of the security interest in the Collateral to the
Indenture Trustee pursuant to the Indenture, nor the
A-2
<PAGE>
execution and delivery by the Seller of the Underwriting Agreements and the
Principal Documents, nor the consummation of the transactions contemplated by
the Underwriting Agreements or the Principal Documents nor the performance by
the Seller of its obligations thereunder will (i) violate the Articles of
Incorporation and by-laws, as amended, of the Seller, (ii) breach, or result in
a default under or acceleration of, any existing obligation of the Seller in any
indenture, agreement, or instrument known to me, after due inquiry and
reasonable investigation, which breach or default would reasonably be expected
to have a material adverse effect on the condition of the Seller, financial or
otherwise, or adversely affect the transactions contemplated by the Principal
Documents, (iii) violate or contravene the terms of any court order, or (iv)
violate applicable provisions of statutory law or regulation.
(6) There are no actions, proceedings or investigations pending against
the Seller or, to my knowledge, threatened against the Seller before any court,
administrative agency, or tribunal (i) asserting the invalidity of the Trust or
any of the Underwriting Agreements or Principal Documents, (ii) seeking to
prevent the consummation of any of the transactions contemplated by any of the
Underwriting Agreements or the Principal Documents or the execution and delivery
thereof, or (iii) that could reasonably be expected to materially and adversely
affect the enforceability of the Underwriting Agreements or Principal Documents
against the Seller or the ability of the Seller to perform its obligations
thereunder.
(7) No consent, approval, authorization, or order of, or filing with,
any court or governmental agency or body is required of the Seller for the
consummation of the transactions contemplated in the Underwriting Agreements or
Principal Documents, except such consents, approvals, authorizations, or orders
as have been obtained or such filings as have been made.
(8) Nothing has come to our attention that would lead us to believe
that the representations and warranties of the Seller contained in the Principal
Documents are other than as stated therein.
(9) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the Commonwealth of Virginia,
with full power (corporate and other) and authority to own its properties and to
conduct its business as now conducted by it and to enter into and perform its
obligations under the Trust Agreement.
(10) The Company has duly authorized, executed, and delivered the Trust
Agreement and the Trust Agreement is a legal, valid and binding obligation of
the Company, enforceable against
A-3
<PAGE>
the Company, subject, as to the enforceability thereof, to bankruptcy,
reorganization, insolvency, moratorium and other laws affecting creditors'
rights generally and by the application of general principles of equity.
(11) Neither the execution and delivery by the Company of the Trust
Agreement, nor the consummation of the transactions contemplated thereby nor the
performance by the Company of its obligations thereunder will (i) violate the
Articles of Incorporation and by-laws, as amended, of the Company, (ii) breach,
or result in a default under or acceleration of, any existing obligation of the
Company in any indenture, agreement, or instrument known to me, after due
inquiry and reasonable investigation, which breach or default would reasonably
be expected to have a material adverse effect on the condition of the Company,
financial or otherwise, or adversely affect the transactions contemplated by the
Principal Documents, (iii) violate or contravene the terms of any court order,
or (iv) violate applicable provisions of statutory law or regulation.
(12) There are no actions, proceedings or investigations pending
against the Company or, to my knowledge, threatened against the Company before
any court, administrative agency, or tribunal (i) asserting the invalidity of
the Trust Agreement or any of the other Principal Documents, (ii) seeking to
prevent the consummation of any of the transactions contemplated by any of the
Underwriting Agreements or the Principal Documents or the execution and delivery
thereof, or (iii) that could reasonably be expected to materially and adversely
affect the enforceability of the Trust Agreement against the Company or the
ability of the Company to perform its obligations thereunder.
(13) No consent, approval, authorization, or order of, or filing with,
any court or governmental agency or body is required of the Company for the
consummation of the transactions contemplated in the Trust Agreement, except
such consents, approvals, authorizations, or orders as have been obtained or
such filings as have been made.
(14) There are no legal or governmental proceedings pending or
threatened against the Seller, the Company or the Master Servicer that are
required to be disclosed in the Registration Statement, other than those
disclosed therein.
(15) There are no contracts, indentures, mortgages, loan agreements,
notes, leases, or other instruments to which the Seller, the Company or the
Master Servicer is a party that are required to be described or referred to in
the Registration Statement or to be filed as exhibits thereto other than those
described or referred to or filed or incorporated by reference as exhibits
thereto.
A-4
<PAGE>
For purposes of this opinion, I have assumed that (i) the Underwriting
Agreements and the Principal Documents have been duly executed and delivered by
all parties thereto (other than the Seller and the Company) and are valid and
binding upon and enforceable against such parties, subject, as to the
enforceability thereof, to bankruptcy, reorganization, insolvency, moratorium
and other laws affecting creditors' rights generally and by the application of
general principles of equity.
The opinions expressed herein are limited to matters of Federal law and
the laws of the Commonwealth of Virginia, without giving effect to principles of
conflicts of laws.
This opinion is rendered solely to the addressee hereof, for its use in
connection with the transactions contemplated by the Underwriting Agreements and
Principal Documents and may not be relied upon for any other purpose or by any
other person.
Very truly yours,
-----------------------------------
[ ]
General Counsel
A-5
<PAGE>
EXHIBIT B
[Letterhead of McGuire, Woods, Battle & Boothe, L.L.P.]
[ ], 1996
CS First Boston Corporation
Park Avenue Plaza
New York, New York 10055
[other Underwriters]
Re: Floating Rate Asset Backed Notes
and Floating Rate Asset Backed
Certificates
Gentlemen:
We have acted as counsel to Signet Bank (the "Seller") and Signet
Student Loan Trust 1996-A (the "Trust") in connection with the issuance by the
Trust of the Floating Rate Class A-1 Asset Backed Notes in the aggregate
principal amount of $_______ and the Floating Rate Class A-2 Asset Backed Notes
in the aggregate principal amount of $________ (collectively, the "Notes") and
the Floating Rate Asset Backed Certificates in the aggregate principal amount of
$____________. This opinion letter is furnished to you pursuant to Section 6(f)
of the Note Underwriting Agreement (the "Note Underwriting Agreement") dated
[ ], 1996 between the Seller and the Underwriters named therein and
Section 6(f) of the Certificate Underwriting Agreement (the "Certificate
Underwriting Agreement") dated [ ], 1996 between the Seller and the
Underwriters named therein. Except as otherwise indicated herein, capitalized
terms used in this opinion letter are defined as set forth in the Underwriting
Agreements.
We have examined such documents, records and matters of law as we have
deemed necessary for purposes of this opinion letter, and based thereupon and
subject to the foregoing, we are of the opinion that:
(1) The Indenture creates a valid security interest in the
Financed Student Loans, including all moneys paid thereunder on or
after the Cutoff Date, in favor of the Indenture Trustee, as trustee
for the benefit of the Noteholders, that has been duly perfected by the
filing of
B-1
<PAGE>
financing statements executed by the Eligible Lender Trustee in the
offices indicated in Schedule __ hereto, provided, that, this opinion
does not in any way derogate the conclusion expressed in paragraph ___
hereto [true sale paragraph]. The filing of such financing statements
has perfected a first priority security interest in such Student Loans,
including all moneys paid thereunder, except for Liens the priority of
which is determined under the provisions of applicable law without
regard to the filing of record of a financing statement in the offices
listed on Schedule __ hereto or Liens the priority of which does
require such a filing, but, upon such filing, may relate back to a date
prior to the date on which the security interest was perfected. No
filings or other actions, other than the filing of appropriate UCC
continuation statements, are necessary to maintain the perfection and
priority of such security interest. We call your attention to the fact
that unless appropriate financing statements are timely filed in the
appropriate offices, perfection of the security interest in the
Financed Student Loans, including all moneys paid thereunder, will be
terminated if the Trust hereafter changes its name, identity or
corporate structure so that the financing statements filed in the
offices indicated on Schedule __ hereto become seriously misleading.
(2) A security interest in the Financed Student Loans may,
pursuant to the provisions of 20 U.S.C. ss. 1087-2(d)(3), be perfected
in the manner provided by the UCC for perfection of a security interest
in accounts.
(3) The Seller is not, and will not as a result of the offer
and sale of the Notes and Certificates as contemplated in the
Prospectus and the Note Underwriting Agreement and the Certificate
Underwriting Agreement become, an "investment company" as defined in
the Investment Company Act or a company "controlled by" an "investment
company" within the meaning of the Investment Company Act.
(4) All actions required to be taken and all filings
required to be made by the Seller or the Trust under the Act and the
Exchange Act prior to the sale of the Notes and the Certificates have
been duly taken or made.
(5) The Trust Agreement need not be qualified under the
Trust Indenture Act of 1939, and the Trust is not required to register
under the Investment Company Act.
(6) The Indenture has been duly qualified under the Trust
Indenture Act.
(7) The Trust has been duly formed, is validly existing and
is in good standing under the laws of the State
B-2
<PAGE>
of Delaware, with full power and authority to own its assets and
conduct its business as described in the Prospectus.
(8) The Trust has duly authorized the Indenture, the Loan
Sale Agreement, the Master Servicing Agreement and the Administration
Agreement, and, when duly executed and delivered by the other parties
thereto, they will be valid and binding obligations of the Trust,
enforceable against the Trust in accordance with their terms, subject,
as to the enforceability thereof, to bankruptcy, reorganization,
insolvency, moratorium and other laws affecting creditors' rights
generally and by the application of general principles of equity.
(9) The Registration Statement has become effective under
the Act; any required filing of the Prospectus (and any Supplement
thereto) pursuant to Rule 424(b) promulgated under the Act has been
made in the manner and within the time period required under such rule;
no stop order suspending the effectiveness of the Registration
Statement has been issued and, to our knowledge, no proceedings for
that purpose are pending or threatened by the Commission.
(10) The Basic Documents, and the transactions contemplated
by the Basic Documents, conform in all material respects to the
applicable requirements of the Higher Education Act, and, upon the due
authorization, execution and delivery of the Basic Documents and the
consummation of such transactions, the Financed Student Loans, legal
title to which will be held by the Eligible Lender Trustee on behalf of
the Trust, will qualify, subject to compliance with all applicable
origination and servicing requirements with respect thereto, to receive
all applicable federal assistance payments, including federal
reinsurance and federal interest subsidies and special allowance
payments, with respect thereto.
(11) We have examined the Registration Statement and the
Prospectus (and any Supplement thereto), and nothing has come to our
attention that would lead us to believe that, solely with respect to
the Higher Education Act and the student loan business, the
Registration Statement or the Prospectus or any amendment or supplement
thereto as of the respective dates thereof or on the Closing Date
contains an untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements therein not
misleading.
(12) The Eligible Lender Trustee is an "eligible lender" as
such term is defined in Section 435(d) of the
B-3
<PAGE>
Higher Education Act for purposes of holding legal title to the
Financed Student Loans.
(13) The statements contained in the Prospectus under the
headings "Risk Factors -- Certain Legal Aspects" and "Certain Legal
Aspects of the Student Loans", to the extent that they describe legal
matters, present fair summaries of such legal matters.
(14) The statements contained in the Prospectus under the
captions "Description of the Securities", "Description of the Transfer
and Servicing Agreements", "Description of the Notes" and "Description
of the Certificates", insofar as such statements purport to summarize
the provisions of the Certificates, the Notes, the Indenture, the
Administration Agreement, the Loan Sale Agreement, the Master Servicing
Agreement and the Trust Agreement, present fair summaries of such
provisions.
We have participated in the preparation of the Registration Statement
and the Prospectus (and any supplement thereto). From time to time we have had
discussions with the officers and employees of the Seller and your employees and
counsel concerning the information contained in the Registration Statement and
the Prospectus (and any supplement thereto). Based thereupon we are of the
opinion that (a) the Registration Statement (except for the financial
statements, financial schedules and other numerical, financial and statistical
information contained therein and the Form T-1 included therein, as to all of
which we express no view) at the time the Registration Statement became
effective under the Act complied as to form in all material respects with the
Act and the Trust Indenture and the rules and regulations thereunder and (b) the
Prospectus (and any supplement thereto) (except for the financial statements,
financial schedules and other numerical, financial and statistical information
contained therein, as to all of which we express no view) as of its date
complied as to form with the Act and the rules and regulations thereunder. Based
upon the participation and discussions described above, no facts have come to
our attention to cause us to believe that (a) the Registration Statement (except
for the financial statements, financial schedules and other numerical, financial
and statistical information contained therein, as to which we express no view)
at the time the Registration Statement became effective under the Act contained
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading or (b) the Prospectus (and any Supplement thereto) (except for the
financial statements, financial schedules and other numerical, financial and
statistical information contained therein, as to all of which we express no
view) as of its date or the date hereof contained or contains any untrue
statement of a material
B-4
<PAGE>
fact or omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
[McGuire, Woods, Battle & Boothe, L.L.P. will rely on the opinion of
Brown & Wood LLP with respect to certain matters of New York law and on
Richards, Layton & Finger with respect to certain matters of Delaware law.]
Very truly yours,
B-5
Exhibit 1.2
SIGNET STUDENT LOAN TRUST 1996-A
$14,846,000
FLOATING RATE ASSET BACKED CERTIFICATES
CERTIFICATE UNDERWRITING AGREEMENT
December 19, 1996
Credit Suisse First Boston Corporation
Eleven Madison Avenue
New York, New York 10010-3629
Dear Sirs:
1. Introductory. Signet Bank, a Virginia banking corporation
("Signet" or the "Seller"), proposes to cause Signet Student Loan Trust 1996-A
(the "Trust") to issue and sell $14,846,000 principal amount of its Floating
Rate Asset Backed Certificates (the "Certificates") to you as the underwriter
(the "Underwriter"). The assets of the Trust include, among other things, a pool
of student loans (the "Initial Financed Student Loans") and certain monies due
thereunder after November 1, 1996 (the "Cutoff Date"). Such Initial Financed
Student Loans will be sold to the Eligible Lender Trustee (as defined below) on
behalf of the Trust by the Seller pursuant to a sale agreement, dated as of
November 1, 1996 (the "Loan Sale Agreement") among the Trust, the Seller and The
First National Bank of Chicago, a national banking association, as eligible
lender trustee (the "Eligible Lender Trustee"). Under certain circumstances
after the Closing Date (as defined below), the Eligible Lender Trustee, acting
on behalf of the Trust, may acquire additional student loans ("Additional
Student Loans", together with the Initial Financed Student Loans, the "Financed
Student Loans"). The Financed Student Loans are to be serviced by Signet as
master servicer (the "Master Servicer") pursuant to a master servicing
agreement, dated as of November 1, 1996 (the "Master Servicing Agreement") among
the Trust, the Master Servicer and the Eligible Lender Trustee. The Certificates
will be issued pursuant to a trust agreement to be dated as of November 1, 1996
(the "Trust Agreement"), among the Seller, as Depositor, Signet Student Loan
Corporation, a Virginia corporation (the "Company"), and the Eligible Lender
Trustee. An individual residing in Delaware will be appointed as a co-trustee
under the Trust Agreement pursuant
<PAGE>
to a co-trustee agreement, dated as of November 1, 1996 (the "Co-Trustee
Agreement"), between such individual and the Eligible Lender Trustee.
Simultaneously with the issuance and sale of the Certificates
as contemplated herein, the Trust will issue $252,000,000 principal amount of
its Floating Rate Class A-1 Asset Backed Notes and $161,439,000 principal amount
of its Floating Rate Class A-2 Asset Backed Notes (collectively, the "Notes"). A
portion of the Notes will be sold pursuant to an underwriting agreement dated
the date hereof (the "Note Underwriting Agreement") between the Seller and the
you as representative of the several underwriters named therein. The Notes and
the Certificates are hereinafter referred to collectively as the "Securities."
Capitalized terms used and not otherwise defined herein shall
have the meanings given to them in Appendix A hereto.
2. Representations and Warranties of the Seller. (a) The
Seller represents and warrants to and agrees with the Underwriter that:
(i) The Seller meets the requirements for use of Form
S-3 under the Securities Act of 1933, as amended (the "Act"), and has
filed with the Securities and Exchange Commission (the "Commission") a
registration statement (Registration No. 33-94846) on such Form,
including a related preliminary basic prospectus and a preliminary
prospectus supplement, for the registration under the Act of the
offering and sale of the Securities. The Seller may have filed one or
more amendments thereto, each of which amendments has previously been
furnished to you. The Seller will next file with the Commission (i)
prior to the effectiveness of such registration statement, an amendment
thereto (including the form of final basic prospectus and the form of
final prospectus supplement relating to the Securities), (ii) after
effectiveness of such registration statement, a final basic prospectus
and a final prospectus supplement relating to the Securities in
accordance with Rules 430A and 424(b)(1) or (4) under the Act, or (iii)
a final basic prospectus and a final prospectus supplement relating to
the Securities in accordance with Rules 415 and 424(b)(2) or (5).
In the case of clauses (ii) and (iii), the Seller has included
in such registration statement, as amended at the Effective Date, all
information (other than Rule 430A Information) required by the Act and
the rules thereunder to be included in the Prospectus with respect to
the Certificates and the offering thereof. As filed, such
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amendment and form of final prospectus supplement, or such final
prospectus supplement, shall include all Rule 430A Information,
together with all other such required information, with respect to the
Certificates and the offering thereof and, except to the extent that
you shall agree in writing to a modification, shall be in all
substantive respects in the form furnished to you prior to the
Execution Time or, to the extent not completed at the Execution Time,
shall contain only such specific additional information and other
changes (beyond that contained in the latest preliminary basic
prospectus and preliminary prospectus supplement, if any, that have
previously been furnished to you) as the Seller has advised you, prior
to the Execution Time, will be included or made therein. If the
Registration Statement contains the undertaking specified by Regulation
S-K Item 512(a), the Registration Statement, at the Execution Time,
meets the requirements set forth in Rule 415(a)(1)(x).
For purposes of this Agreement, "Effective Time" means the
date and time as of which such registration statement, or the most
recent post-effective amendment thereto, if any, was declared effective
by the Commission, and "Effective Date" means the date of the Effective
Time. "Execution Time" shall mean the date and time that this Agreement
is executed and delivered by the parties hereto. Such registration
statement, as amended at the Effective Time, including all information
deemed to be a part of such registration statement as of the Effective
Time pursuant to Rule 430A(b) under the Act, and including the exhibits
thereto and any material incorporated by reference therein, is
hereinafter referred to as the "Registration Statement". "Basic
Prospectus" shall mean any prospectus referred to above contained in
the Registration Statement at the Effective Date, including any
Preliminary Prospectus Supplement. "Preliminary Prospectus Supplement"
shall mean the preliminary prospectus supplement to the Basic
Prospectus which describes the Certificates and the offering thereof
and is used prior to filing of the Prospectus. "Prospectus" shall mean
the prospectus supplement relating to the Securities that is first
filed pursuant to Rule 424(b) after the Execution Time, together with
the Basic Prospectus or, if no filing pursuant to Rule 424(b) is
required, shall mean the prospectus supplement relating to the
Certificates, including the Basic Prospectus, included in the
Registration Statement at the Effective Date. "Rule 430A Information"
means information with respect to the Certificates and the offering of
the Securities permitted to be omitted from the Registration Statement
when it becomes effective pursuant to Rule 430A. "Rule 415", "Rule
424", "Rule 430A" and "Regulation S-K" refer to such rules or
regulations under the Act. Any reference herein to the
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Registration Statement, a Preliminary Prospectus Supplement or the
Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 which
were filed under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), on or before the Effective Date of the Registration
Statement or the issue date of the Basic Prospectus, such Preliminary
Prospectus Supplement or the Prospectus, as the case may be; and any
reference herein to the terms "amend", "amendment" or "supplement" with
respect to the Registration Statement, the Basic Prospectus, any
Preliminary Prospectus Supplement or the Prospectus shall be deemed to
refer to and include the filing of any document under the Exchange Act
after the Effective Date of the Registration Statement, or the issue
date of the Basic Prospectus, to any Preliminary Prospectus Supplement
or the Prospectus, as the case may be, deemed to be incorporated
therein by reference.
(ii) On the Effective Date and on the date of this
Agreement, the Registration Statement did or will, and, when the
Prospectus is first filed (if required) in accordance with Rule 424(b)
and on the Closing Date (as defined below), the Prospectus (and any
supplements thereto) will, comply in all material respects with the
applicable requirements of the Act, the Exchange Act and the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), and the
respective rules and regulations of the Commission thereunder (the
"Rules and Regulations"); on the Effective Date, the Registration
Statement did not or will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not
misleading; and, on the Effective Date, the Prospectus (together with
any supplement thereto) will not, include any untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that the
Seller makes no representations or warranties as to the information
contained in or omitted from the Registration Statement or the
Prospectus (or any supplement thereto) in reliance upon and in
conformity with information furnished in writing to the Seller by you
specifically for use in the Registration Statement or the Prospectus
(or any supplement thereto).
(iii) The Seller's representations and warranties in the
Loan Sale Agreement, the Administration Agreement and the Trust
Agreement will be true and correct in all material respects as of the
Closing Date
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and each such representation and warranty will be true and correct in
all material respects on each date thereafter if and to the extent that
on such date such representation and warranty is made again by the
Seller pursuant to the terms of the related agreement.
(iv) This Agreement has been duly authorized, executed
and delivered by the Seller. The execution, delivery and performance of
this Agreement and the issuance and sale of the Certificates and
compliance with the terms and provisions hereof will not result in a
breach or violation of any of the terms and provisions of, or
constitute a default under, any agreement or instrument to which the
Seller is a party or by which the Seller is bound or to which any of
the properties of the Seller is subject which could reasonably be
expected to have a material adverse effect on the transactions
contemplated herein. The Seller has full power (corporate and other)
and authority to cause the Trust to authorize, issue and sell the
Certificates, all as contemplated by this Agreement.
(v) Other than as contemplated by this Agreement or as
disclosed in the Prospectus, there is no broker, finder or other party
that is entitled to receive from the Seller or any of its affiliates or
an underwriter any brokerage or finder's fee or other fee or commission
as a result of any of the transactions contemplated by this Agreement.
(vi) All legal or governmental proceedings, contracts or
documents of a character required to be described in the Registration
Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement have been so described or filed as required.
(vii) The Seller's assignment and delivery of the Initial
Financed Student Loans to the Eligible Lender Trustee on behalf of the
Trust as of the Closing Date and of the Additional Student Loans from
time to time thereafter pursuant to the Loan Sale Agreement will vest
in the Eligible Lender Trustee on behalf of the Trust all the Seller's
right, title and interest therein, subject to no prior lien, mortgage,
security interest, pledge, adverse claim, charge or other encumbrance.
(viii) The Trust's assignment of the Financed Student
Loans to the Indenture Trustee pursuant to the Indenture will vest in
the Indenture Trustee, for the benefit of the Noteholders, a first
priority perfected
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security interest therein, subject to no prior lien, mortgage, security
interest, pledge, adverse claim, charge or other encumbrance.
(b) The Seller hereby agrees with the Underwriter that, for
all purposes of this Agreement, the only information furnished to the Seller by
the Underwriter specifically for use in the Registration Statement, the
Prospectus, or any amendment or supplement thereto, or any related preliminary
prospectus, are the statements with respect to stabilization on the second page
of, and the statements under the caption "Underwriting" in, the preliminary
prospectus and the Prospectus.
3. Purchase, Sale and Delivery of the Certificates. On the
basis of the representations, warranties and agreements herein contained, but
subject to the terms and conditions herein set forth, the Seller agrees to cause
the Trust to sell to the Underwriter, and the Underwriter agrees to purchase
from the Trust, at a purchase price of 99.20% of the principal amount thereof,
$14,846,000 principal amount of the Certificates.
The Seller will deliver the Certificates to you for the
accounts of the Underwriter, against payment of the purchase price to or upon
the order of the Seller by wire transfer or check in Federal (same day) Funds,
at the office of Brown & Wood LLP, One World Trade Center, New York, New York
10048-0557, at 10:00 A.M., New York time, on November 1, 1996, or at such other
time not later than seven full business days thereafter as you and the Seller
determine, such time being herein referred to as the "Closing Date". The
Certificates to be so delivered will be initially represented by one or more
Certificates registered in the name of Cede & Co., the nominee of The Depository
Trust Company ("DTC"). The interests of beneficial owners of the Certificates
will be represented by book entries on the records of DTC and participating
members thereof. Definitive Certificates will be available only under the
limited circumstances specified in the Trust Agreement.
4. Offering by the Underwriter. It is understood that, after
the Registration Statement becomes effective, the Underwriter proposes to offer
the Certificates for sale to the public (which may include selected dealers) as
set forth in the Prospectus. After the Certificates are released for sale to the
public, the Underwriter may vary from time to time the public offering price,
selling concessions and reallowances to dealers that are members of the National
Association of Securities Dealers, Inc. ("NASD") and other terms of sale
hereunder and under such selling arrangements.
5. Covenants of the Seller. The Seller covenants and
agrees with the Underwriter that:
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(a) The Seller will use its best efforts to cause the
Registration Statement, and any amendment thereto, if not effective at the
Execution Time, to become effective. Prior to the termination of the offering of
the Certificates, the Seller will not file any amendment of the Registration
Statement or supplement to the Prospectus unless the Seller has furnished you a
copy for your review prior to filing and will not file any such proposed
amendment or supplement to which you reasonably object. Subject to the foregoing
sentence, if the Registration Statement has become or becomes effective pursuant
to Rule 430A, or filing of the Prospectus is otherwise required under Rule
424(b), the Seller will file the Prospectus, properly completed, and any
supplement thereto, with the Commission pursuant to and in accordance with the
applicable paragraph of Rule 424(b) within the time period prescribed and will
provide evidence satisfactory to you of such timely filing.
(b) The Seller will advise you promptly of any proposal to
amend or supplement the registration statement as filed or the related
prospectus or the Registration Statement or the Prospectus and will not effect
such amendment or supplementation without your consent prior to the Closing
Date, and thereafter will not effect any such amendment or supplementation
(other than an amendment or supplementation which provides solely for the
issuance by another trust of other series of securities) to which you reasonably
object; the Seller will also advise you promptly of any request by the
Commission for any amendment of or supplement to the Registration Statement or
the Prospectus or for any additional information (other than an amendment or
supplementation which provides solely for the issuance by another trust of other
series of securities); and the Seller will also advise you promptly of the
effectiveness of the Registration Statement and of any amendment or supplement
to the Registration Statement or the Prospectus (other than an amendment or
supplementation which provides solely for the issuance by another trust of other
series of securities) and of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the institution or
threat of any proceeding for that purpose and the Seller will use its best
efforts to prevent the issuance of any such stop order and to obtain as soon as
possible the lifting of any issued stop order.
(c) If, at any time when a prospectus relating to the
Certificates is required to be delivered under the Act, any event occurs as a
result of which the Prospectus as then amended or supplemented would contain an
untrue statement of a material fact or omit to state any material fact necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading, or if it is necessary at any time to amend the
Registration Statement or supplement the Prospectus to comply with the Act or
the Exchange Act, the Seller promptly will prepare and file, or cause to be
prepared and filed, with
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the Commission an amendment or supplement which will correct such statement or
omission, or an amendment or supplement which will effect such compliance.
Neither your consent to, nor your delivery of, any such amendment or supplement
shall constitute a waiver of any of the conditions set forth in Section 6.
(d) As soon as practicable, but not later than the
Availability Date (as defined below), the Seller will cause the Trust to make
generally available to Certificateholders an earnings statement of the Trust
covering a period of at least twelve months beginning after the Effective Date
which will satisfy the provisions of Section 11(a) of the Act and Rule 158 of
the applicable Rules and Regulations thereunder. For the purpose of the
preceding sentence, "Availability Date" means the 45th day after the end of the
fourth fiscal quarter following the fiscal quarter that includes the original
effective date of the Registration Statement, except that, if such fourth fiscal
quarter is the last quarter of the Trust's fiscal year, "Availability Date"
means the 90th day after the end of such fourth fiscal quarter.
(e) The Seller will furnish to you copies of the Registration
Statement (two of which will be signed and will include all exhibits), each
related preliminary prospectus, the Prospectus and all amendments and
supplements to such documents, in each case as soon as available and in such
quantities as the Underwriter reasonably requests.
(f) The Seller will assist you in arranging for the
qualification of the Certificates for sale under the laws of such states as the
Underwriter may require and will continue such qualifications in effect so long
as required for the distribution; provided, however, that neither the Seller nor
the Trust shall be required to qualify to do business in any jurisdiction in
which it is not now qualified or to take any action which would subject it to
general or unlimited service of process in any jurisdiction in which it is not
now subject to service of process.
(g) For a period from the date of this Agreement until the
retirement of the Certificates, or until such time as the Underwriter shall
cease to maintain a secondary market in the Certificates, whichever occurs
first, the Seller will deliver to you the annual statements of compliance and
the annual independent certified public accountants' reports furnished to the
Indenture Trustee or the Eligible Lender Trustee pursuant to the Master
Servicing Agreement, as soon as practicable after such statements and reports
are furnished to the Indenture Trustee or the Eligible Lender Trustee.
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(h) So long as any of the Certificates are outstanding, the
Seller will furnish to you (i) as soon as practicable after the end of the
fiscal year all documents required to be distributed to Certificateholders or
filed with the Commission on behalf of the Trust pursuant to the Exchange Act,
or any order of the Commission thereunder and (ii) from time to time, any other
information concerning the Seller's student lending business or the transaction
contemplated hereby as you may reasonably request.
(i) On or before the Closing Date, the Seller shall mark its
accounting and other records, if any, relating to the Initial Financed Student
Loans and shall cause the Master Servicer to mark the computer records of the
Master Servicer relating to the Initial Financed Student Loans to show the
absolute ownership by the Eligible Lender Trustee on behalf of the Trust of the
Initial Financed Student Loans, and from and after the Closing Date the Seller
will take, and cause the Master Servicer to take, such actions with regard to
any Additional Student Loans at the time of the conveyance thereof to the Trust,
and neither the Seller nor the Master Servicer shall take any action
inconsistent with the ownership by the Eligible Lender Trustee on behalf of the
Trust of the Financed Student Loans, other than as permitted by the Loan Sale
Agreement or the Master Servicing Agreement.
(j) To the extent, if any, that the rating provided with
respect to the Certificates by the rating agency or agencies that initially rate
the Certificates is conditional upon the furnishing of documents or the taking
of any other actions by the Seller agreed upon on or prior to the Closing Date,
the Seller shall furnish or shall cause to be furnished such documents and take
any such other actions. A copy of any such document shall be provided to the
Underwriter at the time it is delivered to the rating agencies.
(k) For the period beginning on the date of this Agreement and
ending on the Closing Date, none of the Seller and any trust originated,
directly or indirectly, by the Seller will, without the prior written consent of
the Underwriter, offer to sell or sell notes (other than the Notes)
collateralized by, or certificates (other than the Certificates) evidencing an
ownership interest in, student loans; provided, however, that this shall not be
construed to prevent the sale of student loans by the Seller.
(l) The Seller will apply the net proceeds of the offering and
the sale of the Certificates and the Notes that it receives in the manner set
forth in the Prospectus under the caption "Use of Proceeds".
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(m) The Seller will pay all expenses incident to the
performance of its obligations under this Agreement, including fees and expenses
relating to (i) the printing and filing of the documents (including the
Registration Statement and Prospectus), (ii) the preparation, issuance and
delivery of the Certificates to the Underwriter, (iii) the fees and
disbursements of the Seller's counsel and accountants, (iv) the qualification of
the Certificates under securities laws in accordance with the provisions of
Section 5(f), including filing fees and the fees and disbursements of counsel
for you in connection therewith and in connection with the preparation of any
blue sky or legal investment survey, if any is requested, (v) the printing and
delivery to the Underwriter of copies of the Registration Statement as
originally filed and of each amendment thereto, (vi) the printing and delivery
to you of copies of any blue sky or legal investment survey prepared in
connection with the Certificates, (vii) any fees charged by rating agencies for
the rating of the Certificates and (viii) the fees and expenses, if any,
incurred with respect to any filing with the National Association of Securities
Dealers, Inc. It is understood that, except as otherwise specifically provided
herein, the Underwriter will pay all of their own costs and expenses (including
the fees and disbursements of Brown & Wood LLP, transfer taxes on resale of the
Certificates by them and any advertising expenses incurred by them).
6. Conditions of the Obligations of the Underwriter. The
obligations of the Underwriter to purchase and pay for the Certificates will be
subject to the accuracy of the representations and warranties on the part of the
Seller herein, to the accuracy of the written statements of officers of the
Seller made pursuant to the provisions of this Section, to the performance by
the Seller of its obligations hereunder and to the following additional
conditions precedent:
(a) If the Effective Time is not prior to the execution and
delivery of this Agreement, the Effective Time shall have occurred not later
than 6:00 p.m. New York City time on the date of this Agreement or such later
time or date as shall have been consented to by the Underwriter.
(b) If the Effective Time is prior to the execution and
delivery of this Agreement, the Prospectus and any supplements thereto shall
have been filed with the Commission in accordance with the Rules and Regulations
and Section 5(a) hereof. Prior to the Closing Date, no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or, to the knowledge of
the Seller or you, shall be contemplated by the Commission.
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(c) On or prior to the Closing Date, you shall have received a
letter dated the Closing Date, in form and substance reasonably satisfactory to
you and your counsel, from KPMG Peat Marwick with respect to certain agreed-upon
procedures substantially in the form of the drafts to which you have previously
agreed and otherwise in form and substance reasonably satisfactory to you and
your counsel.
(d) Subsequent to the execution and delivery of this
Agreement, there shall not have occurred (i) any change, or any development
involving a prospective change, in or affecting particularly the business or
properties of the Trust, the Seller, the Master Servicer or the Company which,
in your reasonable judgment, materially impairs the investment quality of the
Certificates or makes it impractical or inadvisable to market the Certificates;
(ii) any downgrading in the rating of any debt securities of the Seller or the
Master Servicer by any "nationally recognized statistical rating organization"
(as defined for purposes of Rule 436(g) under the Act), or any public
announcement that any such organization has under surveillance or review its
rating of any debt securities of the Seller or the Master Servicer (other than
an announcement with positive implications of a possible upgrading, and no
implication of a possible downgrading, of such rating) which in your reasonable
judgment materially impairs the investment quality of the Certificates or makes
it impractical or inadvisable to market the Certificates; (iii) any suspension
or material limitation of trading in securities generally on the New York Stock
Exchange, or any setting of minimum prices for trading on such exchange; (iv)
any suspension of trading of any securities of the Seller or the Master Servicer
on any exchange or in the over-the-counter market; (v) any banking moratorium
declared by Federal or New York authorities; or (vi) any outbreak or escalation
of major hostilities in which the United States is involved, any declaration of
war by Congress, or any other substantial national or international calamity or
emergency if, in your reasonable judgment, the effect of any such outbreak,
escalation, declaration, calamity or emergency makes it impractical or
inadvisable to proceed with completion of the sale of and payment for the
Certificates.
(e) You shall have received an opinion of Winston & Strawn,
special Illinois counsel to Signet Bank dated the Closing Date, in the form
attached hereto as Exhibit A, or as is otherwise satisfactory in form and
substance to you and your counsel.
(f) You shall have received an opinion of McGuire, Woods,
Battle & Boothe, L.L.P., counsel to the Seller and the Trust, dated the Closing
Date, in the form attached hereto as Exhibit B, or as is otherwise satisfactory
in form and substance to you and your counsel.
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(g) You shall have received an opinion addressed to the
Underwriter of McGuire, Woods, Battle & Boothe, L.L.P., in its capacity as
counsel for the Seller and the Trust, dated the Closing Date, in form and
substance satisfactory to you and your counsel, to the effect that the
statements in the Prospectus under the headings "Federal Income Tax
Consequences" and "State Tax Consequences" and in the Prospectus Supplement
under the heading "Federal Income Tax and State Consequences" to the extent that
they constitute statements of matters of law or legal conclusions with respect
thereto, have been prepared or reviewed by such counsel and accurately describe
the material consequences to holders of the Certificates under federal and
Maryland law.
(h) You shall have received an opinion addressed to the
Underwriter of McGuire, Woods, Battle & Boothe, L.L.P., in its capacity as
counsel for the Seller, the Company and the Trust, dated the Closing Date, in
form and substance satisfactory to you and your counsel, concerning (i) the true
sale of or security interest in the Financed Student Loans from the Seller to
the Trust and (ii) the nonconsolidation of the Company with the Seller and the
Company with its parent, Signet Banking Corporation in the event of a bankruptcy
or insolvency of the Seller or Signet Banking Corporation, respectively.
(i) You shall have received an opinion of Richards, Layton &
Finger, special Delaware counsel for the Trust, dated the Closing Date, in form
and substance satisfactory to you and your counsel, to the effect that:
(i) The Trust Agreement constitutes the valid and
binding obligation of the Eligible Lender Trustee, the Delaware
Trustee, the Depositor and the Company, enforceable against the
Eligible Lender Trustee, the Delaware Trustee, the Depositor and the
Company, in accordance with its terms subject to (i) applicable
bankruptcy, insolvency, moratorium, receivership, reorganization,
fraudulent conveyance and similar laws relating to and affecting the
rights and remedies of creditors generally, and (ii) principles of
equity (regardless of whether considered and applied in a proceeding in
equity or at law).
(ii) The Trust has been duly formed and is validly
existing as a business trust under the Business Trust Statute. The
Trust Agreement authorizes the Trust to execute and deliver the Trust
Agreement, the Indenture, the Master Servicing Agreement, the Loan Sale
Agreement and the Administration Agreement to issue the Certificates
and the Notes and to grant the Trust Estate to the Indenture Trustee as
security for the Notes.
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(iii) Assuming that the Certificates have been duly
executed and issued by the Trust and duly authenticated by the Eligible
Lender Trustee in accordance with the Trust Agreement and delivered to
and paid for by the purchaser thereof pursuant to the Certificate
Underwriting Agreement, the Certificates have been validly issued and
are entitled to the benefits of the Trust Agreement.
(iv) Except for the timely filing in the future of
continuation statements with respect to the financing statements, no
other filing is required in the State of Delaware in order to make
effective the lien of the Indenture. Insofar as Article 9 of the
Delaware Uniform Commercial Code, 6 Del. C. ss.9-101 et seq. (the
"UCC"), applies (without regard to conflict of laws principles) and
assuming that the security interest in that portion of the Collateral
that consists of general intangibles and accounts, as defined under the
UCC, has been duly created and has attached, the Indenture Trustee has
a perfected security interest in such general intangibles and accounts
and the proceeds thereof and, assuming that the UCC search accurately
lists all of the financing statements filed naming the Trust as debtor
and describing any portion of the Collateral consisting of such general
intangibles and accounts and the proceeds thereof, such security
interest of the Indenture Trustee will be prior to the security
interest of all other creditors of the Trust whose security interests
are perfected solely by filing UCC financing statements in the State of
Delaware, excluding purchase money security interests under ss.9-312 of
the UCC and temporarily perfected security interests in proceeds under
ss. 9-306 of the UCC.
(v) Under ss.3805(b) of the Business Trust Statute, no
creditor of any Certificateholder shall have any right to obtain
possession of, or otherwise exercise legal or equitable remedies with
respect to, the property of the Trust except in accordance with the
terms of the Trust Agreement.
(vi) Under ss. 3805(c) of the Business Trust Statute,
and assuming that the Loan Sale Agreement conveys good title to the
Initial Financed Student Loans to the Trust as a true sale and not as a
security arrangement, the Trust rather than the Certificateholders is
the owner of the Initial Financed Student Loans.
(vii) The Delaware Trustee is not required to hold legal
title to the Trust Estate in order for the Trust to qualify as a
business trust under the Act.
(viii) The execution and delivery by the Eligible Lender
Trustee or the Delaware Trustee of the Trust
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Agreement and, on behalf of the Trust, of the Trust Agreement, the
Indenture, the Master Servicing Agreement, the Loan Sale Agreement and
the Administration Agreement do not require any consent, approval or
authorization of, or any registration of filing with, any governmental
authority of the State of Delaware, except for the filing of the
Certificate of Trust with the Secretary of State.
(ix) Neither the consummation by the Eligible Lender
Trustee or the Delaware Trustee of the transactions contemplated in the
Trust Agreement or, on behalf of the Trust, the transactions
contemplated in the Trust Agreement, the Indenture, the Master
Servicing Agreement, the Loan Sale Agreement and the Administration
Agreement nor the fulfillment of the terms thereof by the Eligible
Lender Trustee or the Delaware Trustee will conflict with or result in
a breach or violation of any law of the State of Delaware.
(j) You shall have received an opinion of the Law Department
of The First National Bank of Chicago, counsel to the Eligible Lender Trustee,
dated the Closing Date and satisfactory in form and substance to you and your
counsel, to the effect that:
(i) The Eligible Lender Trustee is a national banking
association duly organized and validly existing under the laws of the
United States.
(ii) The Eligible Lender Trustee has the full corporate
trust power to accept the office of eligible lender trustee under the
Trust Agreement and to enter into and perform its obligations under the
Trust Agreement, the Master Servicing Agreement, the Loan Sale
Agreement and the Co-Trustee Agreement and, on behalf of the Trust,
under the Indenture, the Master Servicing Agreement, the Loan Sale
Agreement, the Administration Agreement and the Guarantee Agreements.
(iii) The execution and delivery of the Trust Agreement,
the Master Servicing Agreement, the Loan Sale Agreement and the
Co-Trustee Agreement by the Eligible Lender Trustee and the Indenture,
the Master Servicing Agreement, the Loan Sale Agreement, the
Administration Agreement and the Guarantee Agreements by the Eligible
Lender Trustee on behalf of the Trust, and the performance by the
Eligible Lender Trustee of its obligations under the Trust Agreement,
the Master Servicing Agreement, the Loan Sale Agreement and the
Co-Trustee Agreement, as well as the performance by the Eligible Lender
Trustee of its obligations on behalf of the Trust under the Indenture,
the Master Servicing
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Agreement, the Loan Sale Agreement, the Administration Agreement and
the Guarantee Agreements have been duly authorized by all necessary
action of the Eligible Lender Trustee and each has been duly executed
and delivered by the Eligible Lender Trustee.
(iv) The Trust Agreement, the Master Servicing
Agreement, the Loan Sale Agreement and the Co-Trustee Agreement
constitute valid and binding obligations of the Eligible Lender Trustee
enforceable against the Eligible Lender Trustee in accordance with
their terms, and the Indenture, the Master Servicing Agreement, the
Loan Sale Agreement, the Administration Agreement and the Guarantee
Agreements constitute the valid and binding obligations of the Trust
enforceable against the Trust in accordance with their terms, except as
the enforceability thereof may be (a) limited by bankruptcy,
insolvency, reorganization, moratorium, liquidation or other similar
laws affecting the rights of creditors generally, and (b) subject to
general principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at law).
(v) The execution and delivery by the Eligible Lender
Trustee of the Trust Agreement, the Master Servicing Agreement, the
Loan Sale Agreement and the Co-Trustee Agreement and by the Eligible
Lender Trustee on behalf of the Trust of the Indenture, the Master
Servicing Agreement, the Loan Sale Agreement, the Administration
Agreement and the Guarantee Agreements do not require any consent,
approval or authorization of, or any registration or filing with, any
applicable governmental authority which has not been obtained or done.
(vi) Each of the Certificates has been duly executed and
delivered by the Eligible Lender Trustee, as eligible lender trustee
and authenticating agent. Each of the Notes has been duly executed and
delivered by the Eligible Lender Trustee on behalf of the Trust.
(vii) Neither the consummation by the Eligible Lender
Trustee of the transactions contemplated in the Trust Agreement, the
Master Servicing Agreement, the Loan Sale Agreement or the Co-Trustee
Agreement, the consummation by the Trust of the transactions
contemplated in the Indenture or the Administration Agreement nor the
fulfillment of the terms thereof by the Eligible Lender Trustee or the
Trust, as the case may be, will conflict with, result in a breach or
violation of, or constitute a default under any law or
15
<PAGE>
the Articles of Association, By-Laws or other organizational documents
of the Eligible Lender Trustee or the terms of any indenture or other
agreement or instrument known to such counsel and to which the Eligible
Lender Trustee or any of its subsidiaries is a party or is bound or any
judgment, order or decree known to us to be applicable to the Eligible
Lender Trustee or any of its subsidiaries, of any court, regulatory
body, administrative agency, governmental body or arbitrator having
jurisdiction over the Eligible Lender Trustee or any of its
subsidiaries.
(viii) There are no actions, suits or proceedings pending
or, to the best of such counsel's knowledge after due inquiry,
threatened against the Eligible Lender Trustee (as eligible lender
trustee under the Trust Agreement or in its individual capacity) before
or by any governmental authority that might materially and adversely
affect the performance by the Eligible Lender Trustee of its
obligations under, or the validity or enforceability of, the Trust
Agreement, the Master Servicing Agreement, the Loan Sale Agreement or
the Co-Trustee Agreement.
(ix) The execution, delivery and performance by the
Eligible Lender Trustee of the Trust Agreement, the Master Servicing
Agreement, the Loan Sale Agreement and the Co-Trustee Agreement, and
the execution, delivery and performance by the Eligible Lender Trustee
on behalf of the Trust of the Indenture, the Master Servicing
Agreement, the Loan Sale Agreement, the Administration Agreement and
any Guarantee Agreement will not subject any of the property or assets
of the Trust, or any portion thereof, to any liens created by or
arising under the Eligible Lender Trustee that are unrelated to the
transactions contemplated in such agreements.
(k) You shall have received an opinion of counsel acceptable
to you of each of Texas Guaranteed Student Loan Corporation, United Student Aid
Funds and Educational Credit Management Corporation (each a "Guarantor"), each
dated the Closing Date, and satisfactory in form and substance to you and
your counsel, to the effect that:
(i) The Guarantor has been duly incorporated and is
validly existing as a non-profit corporation in good standing under the
laws of the State of its incorporation with full power and authority
(corporate and other) to own its properties and conduct its business,
as presently conducted by it, and to enter into and perform its
obligations under the Guarantee Agreement (and the
16
<PAGE>
agreements with the Department under Section 428 of the Higher
Education Act to the extent relevant to the Guarantor's obligations
under such Guarantee Agreement), and had at all relevant times, and now
has, the power, authority and legal right to guarantee the Financed
Student Loans covered by such Guarantee Agreement and to receive,
subject to compliance with all applicable conditions, restrictions and
limitations of the Higher Education Act and any rules, regulations and
interpretations thereunder, reinsurance payments from the Department
with respect to claims paid by it on such Financed Student Loans.
(ii) The Guarantor is duly qualified to do business and
is in good standing, and has obtained all necessary licenses and
approvals in each jurisdiction in which failure to qualify or to obtain
such license or approval would render the Guarantor's obligation under
the Guarantee Agreement to guarantee the Financed Student Loans covered
thereby unenforceable by or on behalf of the Trust.
(iii) The Guarantee Agreement (and the agreements with
the Department under Section 428 of the Higher Education Act to the
extent relevant to the Guarantor's obligations under such Guarantee
Agreement) have been duly authorized, executed and delivered by the
Guarantor and are the legal, valid and binding obligation of the
Guarantor enforceable against the Guarantor in accordance with their
terms, except that (x) the enforceability thereof may be subject to
bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to creditors' rights and (y)
the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be
brought.
(iv) Neither the execution and delivery by the Guarantor
of the Guarantee Agreement, nor the consummation by the Guarantor of
the transactions contemplated therein nor the fulfillment of the terms
thereof by the Guarantor will conflict with, result in a breach,
violation or acceleration of, or constitute a default under, any terms
or provision of the charter or by-laws of the Guarantor or of any
indenture or other agreement or instrument to which the Guarantor is a
party or by which the Guarantor is bound, or result in a violation of
or contravene the terms of any statute, order or regulation applicable
to the Guarantor of any court, regulatory body, administrative agency
or governmental body having jurisdiction over the Guarantor.
(v) There are no actions, proceedings or investigations
pending or, to the best of such counsel's knowledge after due inquiry,
threatened against the
17
<PAGE>
Guarantor before or by any governmental authority that might materially
and adversely affect the performance by the Guarantor of its
obligations under, or the validity or enforceability of, the Guarantee
Agreement.
(vi) The Guarantor is a "guarantor" covered by the
provisions of Section 432(o) of the Higher Education Act.
(l) You shall have received an opinion addressed to the
Underwriter of Brown & Wood LLP, in its capacity as special counsel to the
Underwriter, dated the Closing Date, with respect to the validity of the
Certificates and the Notes and such other related matters as you shall
reasonably require and the Seller and the Company shall have furnished or caused
to be furnished to such counsel such documents as they may reasonably request
for the purpose of enabling them to pass upon such matters.
(m) You shall have received an opinion of Dean, Blakey &
Moskowitz, special student loan counsel to the Underwriter, or in the case of
(iii) below, special student loan counsel to the Seller and the Eligible Lender
Trustee, dated the Closing Date, and satisfactory in form and substance to you
and your counsel, to the effect that:
(i) The Basic Documents, and the transactions
contemplated by the Basic Documents, conform in all material respects
to the applicable requirements of the Higher Education Act, and that,
upon the due authorization, execution and delivery of the Basic
Documents and the consummation of such transactions, the Financed
Student Loans, legal title to which will be held by the Eligible Lender
Trustee on behalf of the Trust, will qualify, subject to compliance
with all applicable origination and servicing requirements with respect
thereto, to receive all applicable federal assistance payments,
including federal reinsurance and federal interest subsidies and
special allowance payments, with respect thereto.
(ii) To the extent that the statements in the Prospectus
purport to summarize or describe provisions of the Higher Education
Act, or constitute statements of matters of law or legal conclusions
with respect to the Higher Education Act, such statements have been
prepared or reviewed by such counsel and accurately describe the
material consequences to holders of Certificates under the Higher
Education Act.
(iii) Such counsel has examined the Registration
Statement and the Prospectus, and nothing has come to such counsel's
attention that would lead such counsel to believe
18
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that, solely with respect to the Higher Education Act and the student
loan business, the Registration Statement or the Prospectus or any
amendment or supplement thereto as of the respective dates thereof or
on the Closing Date contains an untrue statement of a material fact or
omits to state a material fact necessary in order to make the
statements therein not misleading.
(iv) Each of the Seller and the Eligible Lender Trustee
is an "eligible lender" as such term is defined in Section 435(d) of
the Higher Education Act for purposes of holding legal title to the
Financed Student Loans.
(v) Each Guarantor is a private non-profit Family
Federal Education Loan Program ("FFELP") guaranty agency (a "Guaranty
Agency") covered by the provisions of Section 432(o) of the Higher
Education Act. In the event that the United States Secretary of
Education (the "Secretary") determines that a Guaranty Agency is unable
to meet its insurance obligations under Title IV-B of the Higher
Education Act of 1965, as amended (the "Act"), the Secretary is
required by Section 432(o) of the Act to pay otherwise valid insurance
claims submitted directly to the Secretary by FFELP lenders on loans
insured by such Guaranty Agency in the full amount of the Guaranty
Agency's insurance obligation thereon and in accordance with insurance
requirements no more stringent than those of the Guaranty Agency.
(vi) A security interest in the Financed Student
Loans may, pursuant to the provisions of 20 U.S.C. ss. 1047- 2(d)(3),
be perfected in the manner provided in the Uniform Commercial Code for
perfection of a security interest in accounts.
(n) You shall have received certificates dated the Closing
Date of any two of the Chairman of the Board, the President, any Executive Vice
President, Senior Vice President or Vice President, the Treasurer, any Assistant
Treasurer, the Secretary, any Assistant Secretary, the principal financial
officer or the principal accounting officer of each of the Seller and the Master
Servicer in which such officers shall state that, to the best of their knowledge
after reasonable investigation, (i) the representations and warranties of the
Seller or the Master Servicer, as the case may be, contained in the Trust
Agreement, the Loan Sale Agreement, the Administration Agreement and the Master
Servicing Agreement, as applicable, are true and correct in all material
respects, that each of the Seller and the Master 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, in the case of
19
<PAGE>
the certificate from the Seller only, that no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceedings
for that purpose have been instituted or are contemplated by the Commission, and
(ii) since December 31, 1995, except as may be disclosed in the Prospectus or in
such certificate, 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 Master Servicer, as
applicable, has occurred.
(o) You shall have received evidence satisfactory to it that,
on or before the Closing Date, UCC-1 financing statements have been or are being
filed in the office of the Secretary of State of the States of Delaware,
Maryland and Illinois and the State Corporation Commission of the Commonwealth
of Virginia reflecting the transfer of the interest of the Seller in the
Financed Student Loans to the Eligible Lender Trustee on behalf of the Trust and
the proceeds thereof to the Trust and the grant of the security interest by the
Trust in the Financed Student Loans and the proceeds thereof to the Indenture
Trustee.
(p) You shall have received a certificate, dated the Closing
Date, from a responsible officer acceptable to it of each Guarantor, to the
effect that such officer has reviewed the Prospectus Supplement and that the
information therein regarding the Guarantor is fair and accurate in all material
respects.
(q) The Certificates shall be rated at least "A" by Fitch
Investors Service, L.P., Moody's Investors Service, Inc. and Standard & Poor's
Ratings Services, and no rating agency shall have placed the Certificates under
surveillance or review with possible negative implications.
(r) The issuance of the Notes and the Certificates shall not
have resulted in a reduction or withdrawal by any Rating Agency of the current
rating of any outstanding securities issued or originated by the Seller or any
of its affiliates.
(s) On the Closing Date, $413,439,000 aggregate principal
amount of the Notes shall have been issued and sold.
The Seller will provide or cause to be provided to you such
conformed copies of such of the foregoing opinions, certificates, letters and
documents as you reasonably request.
7. Indemnification and Contribution. (a) The Seller will
indemnify and hold the Underwriter harmless against any losses, claims, damages
or liabilities to which the Underwriter may become subject, under the Act or
otherwise, insofar as such
20
<PAGE>
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, the preliminary Basic
Prospectus, Preliminary Prospectus Supplement (if any), the Basic Prospectus or
the Prospectus or any amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse any legal or other expenses reasonably incurred
by the Underwriter in connection with investigating or defending any such loss,
claim, damage, liability or action as such expenses are incurred; provided,
however, that the Seller will not be liable in any such case to the extent that
any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement in or omission or alleged omission
from any of such documents in reliance upon and in conformity with written
information furnished to the Seller by you specifically for use therein,
provided, further, that the foregoing indemnity agreement is subject to the
condition that insofar as it relates to any untrue statement, alleged untrue
statement or omission made in any Preliminary Prospectus but eliminated or
remedied in the Prospectus, such indemnity shall not inure to the benefit of the
Underwriter from whom a person asserting any loss, claim, damage or liability
purchased Certificates which are the subject thereof, if a copy of the
Prospectus was furnished to the Underwriter and such Prospectus was required by
the Act to be sent or given to such person with or prior to the written
confirmation of sale of such Certificates to such person.
(b) The Underwriter agrees to indemnify and hold harmless the
Seller against any losses, claims, damages or liabilities to which the Seller
may become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, the preliminary Basic Prospectus,
Preliminary Prospectus Supplement (if any), Basic Prospectus or the Prospectus
or any amendment or supplement thereto, or arise out of or are based upon the
omission or the alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information relating to you and furnished to
the Seller by you specifically for use therein, and will reimburse any legal or
other expenses reasonably incurred by the Seller in connection with
investigating or defending any such
21
<PAGE>
loss, claim, damage, liability or action as such expenses are
incurred.
(c) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under subsection (a) or (b) above, notify the indemnifying party of the
commencement thereof; but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party
otherwise than under subsection (a) or (b) above. In case any such action is
brought against any indemnified party and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent that it may elect by written notice, jointly with any
other indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof and approval by the indemnified party
of the counsel appointed by the indemnifying party, the indemnifying party will
not be liable to such indemnified party under this Section for any legal or
other expenses subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of investigation. In no
event shall the indemnifying party be liable for fees and expenses for more than
one counsel separate from their own counsel for all indemnified parties in
connection with any one action or related actions in the same jurisdiction
arising out of the same general allegations or circumstances unless any such
indemnified party shall have been advised by such counsel that there may be one
or more legal defenses available to it which are different from or additional to
or in conflict with those available to the other indemnified parties and in the
reasonable judgment of such counsel it is advisable for such indemnified party
to employ separate counsel. An indemnifying party will not, without the prior
written consent of the indemnified party, settle or compromise or consent to the
entry of any judgment with respect to any pending or threatened claim, action,
suit or proceeding in respect of which indemnification or contribution may be
sought hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding.
(d) If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an
22
<PAGE>
indemnified party under subsection (a) or (b) above, then each indemnifying
party shall contribute to the amount paid or payable by such indemnified party
as a result of the losses, claims, damages or liabilities referred to in
subsection (a) or (b) above (i) in such proportion as is appropriate to reflect
the relative benefits received by the Seller on the one hand and the Underwriter
on the other from the offering of the Certificates or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Seller on the one hand
and the Underwriter on the other in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities as well as any
other relevant equitable considerations. The relative benefits received by the
Seller on the one hand and the Underwriter on the other shall be deemed to be in
the same proportion as the total net proceeds from the offering (before
deducting expenses) of the Certificates received by the Seller bear to the total
underwriting discounts and commissions applicable to the Certificates received
by the Underwriter. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Seller or by the Underwriter and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities
referred to in the first sentence of this subsection (d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any action or claim which is
the subject of this subsection (d). Notwithstanding the provisions of this
subsection (d), the Underwriter shall not be required to contribute any amount
in excess of the amount by which the underwriting discount or commission
applicable to the Certificates exceeds the amount of any damages which the
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
(e) The obligations of the Seller under this Section shall be
in addition to any liability which the Seller may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who controls
the Underwriter within the meaning of the Act; and the obligations of the
Underwriter under this Section shall be in addition to any
23
<PAGE>
liability which the Underwriter may otherwise have and shall extend, upon the
same terms and conditions, to each director of the Seller, to each officer of
the Seller who has signed the Registration Statement and to each person, if any,
who controls the Seller within the meaning of the Act.
8. Survival of Representations and Obligations. The
respective indemnities, agreements, representations, warranties and other
statements of the Seller or its officers and of the Underwriter set forth in or
made pursuant to this Agreement or contained in certificates of officers of the
Seller submitted pursuant hereto shall remain operative and in full force and
effect, regardless of any investigation or statement as to the results thereof,
made by or on behalf of the Underwriter, the Seller or any of their respective
representatives, officers or directors or any controlling person, and will
survive delivery of and payment for the Certificates. If for any reason the
purchase of the Certificates by the Underwriter is not consummated, the Seller
shall remain responsible for the expenses to be paid or reimbursed by the Seller
pursuant to Section 5 and the respective obligations of the Seller and the
Underwriter pursuant to Section 7 shall remain in effect. If for any reason the
purchase of the Certificates by the Underwriter is not consummated (other than
because of a failure to satisfy the conditions set forth in items (iii), (v) and
(vi) of Section 6(d)), the Seller will reimburse the Underwriter for all
out-of-pocket expenses (including fees and disbursements of counsel) reasonably
incurred by it in connection with the offering of the Certificates.
9. Notices. All communications hereunder will be in writing
and, if sent to the Underwriter, will be mailed, delivered or telegraphed and
confirmed to the Underwriter at Park Avenue Plaza, New York, N.Y. 10055,
Attention: Investment Banking--Transactions Advisory Group; if sent to the
Seller, will be mailed, delivered or telegraphed, and confirmed to it at Signet
Bank, 7 North 8th Street, Richmond, Virginia 23219, Attention: Treasurer;
provided, however, that any notice to the Underwriter pursuant to Section 7 will
be mailed, delivered or telegraphed and confirmed to the Underwriter. Any such
notice will take effect at the time of receipt.
10. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 7, and no
other person will have any right or obligations hereunder.
11. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be
24
<PAGE>
an original, but all such counterparts shall together constitute one and the
same Agreement.
12. Applicable Law. This Agreement will be governed by, and
construed in accordance with, the laws of the State of New York.
25
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If the foregoing is in accordance with the your understanding
of our agreement, kindly sign and return to us one of the counterparts hereof,
whereupon it will become a binding agreement between the Seller and the
Underwriter in accordance with its terms.
Very truly yours,
SIGNET BANK
By: /s/ Suzanne Bachman
___________________________
Name: Suzanne Bachman
Title: Senior Vice President
The foregoing Certificate Underwriting Agreement is hereby confirmed and
accepted as of the date first written above.
CREDIT SUISSE FIRST BOSTON CORPORATION
By: /s/ Nita Cherry
_______________________
Name: Nita Cherry
Title: Director
26
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APPENDIX A
[See Appendix A to Administration Agreement]
<PAGE>
EXHIBIT A
[Letterhead of Signet Bank]
[ ], 1996
CS First Boston Corporation
Park Avenue Plaza
New York, New York 10055
Re: FLOATING RATE ASSET BACKED NOTES
AND FLOATING RATE ASSET BACKED CERTIFICATES
Gentlemen:
I am the General Counsel of Signet Bank (the "Seller") and have acted
as counsel to the Seller in connection with the issuance and sale by Signet
Student Loan Trust 1996-A (the "Trust") of (i) $[ ] principal amount of its
Floating Rate Class A-1 Asset Backed Notes and $[ ] principal amount of its
Floating Rate Class A-2 Asset Backed Notes (collectively, the "Notes") pursuant
to the Note Underwriting Agreement dated [ ], 1996 between the Seller and the
Underwriter named therein (the "Note Underwriting Agreement") and (ii) Floating
Rate Asset Backed Certificates in the aggregate principal amount of $[ ] (the
"Certificates") pursuant to the Certificate Underwriting Agreement dated [ ],
1996 between the Seller and the Underwriter named therein (the "Certificate
Underwriting Agreement" and, together with the Note Underwriting Agreement, the
"Underwriting Agreements"). Except as otherwise indicated herein, capitalized
terms are defined as set forth in the Underwriting Agreements. As used herein,
(i) "Principal Documents" shall mean, collectively, the Trust Agreement, the
Loan Sale Agreement, the Administration Agreement and the Master Servicing
Agreement.
A-1
<PAGE>
Based upon and subject to the limitations and qualifications set forth
below, I am of the opinion that:
(1) The Seller has been duly organized and is validly existing as a
banking corporation in good standing under the laws of the Commonwealth of
Virginia, with full power (corporate and other) and authority to own its
properties and to conduct its business as now conducted by it and to enter into
and perform its obligations under the Underwriting Agreements and the Principal
Documents, and had, at all relevant times and now has the corporate power and
authority, and legal right, to acquire, own, sell and service the Initial
Financed Student Loans and any Additional Student Loans consistent with all
applicable conditions, restrictions and limitations of the Higher Education Act.
(2) The Seller has executed and delivered the written order to the
Eligible Lender Trustee to authenticate the Certificates and such action has
been duly authorized by the Seller. When the Certificates have been duly
executed, authenticated, and delivered in accordance with the Trust Agreement
and the Certificates have been delivered and paid for pursuant to the
Certificate Underwriting Agreement, the Certificates will be validly issued and
entitled to the benefits of the Trust Agreement, subject, as to the
enforceability thereof, to bankruptcy, reorganization, insolvency, moratorium
and other laws affecting creditors' rights generally and by the application of
general principles of equity.
(3) The Seller has executed and delivered the written order to the
Eligible Lender Trustee to execute and deliver the Issuer Order to the Indenture
Trustee and such action has been duly authorized by the Seller. When the Notes
have been duly executed, delivered, and authenticated in accordance with the
Indenture and delivered and paid for pursuant to the Note Underwriting
Agreement, the Notes will be validly issued and entitled to the benefits of the
Indenture, subject, as to the enforceability thereof, to bankruptcy,
reorganization, insolvency, moratorium and other laws affecting creditors'
rights generally and by the application of general principles of equity.
(4) The Seller has duly authorized, executed, and delivered the
Underwriting Agreements and the Principal Documents and such Principal Documents
are legal, valid and binding obligations of the Seller, enforceable against the
Seller, subject, as to the enforceability thereof, to bankruptcy,
reorganization, insolvency, moratorium and other laws affecting creditors'
rights generally and to the application of general principles of equity.
(5) Neither the transfer of the Initial Financed Student Loans or the
Additional Student Loans by the Seller to the
A-2
<PAGE>
Eligible Lender Trustee on behalf of the Trust, nor the assignment by the Seller
of the Trust Estate to the Trust, nor the grant by the Trust of the security
interest in the Collateral to the Indenture Trustee pursuant to the Indenture,
nor the execution and delivery by the Seller of the Underwriting Agreements and
the Principal Documents, nor the consummation of the transactions contemplated
by the Underwriting Agreements or the Principal Documents nor the performance by
the Seller of its obligations thereunder will (i) violate the Articles of
Incorporation and by-laws, as amended, of the Seller, (ii) breach, or result in
a default under or acceleration of, any existing obligation of the Seller in any
indenture, agreement, or instrument known to me, after due inquiry and
reasonable investigation, which breach or default would reasonably be expected
to have a material adverse effect on the condition of the Seller, financial or
otherwise, or adversely affect the transactions contemplated by the Principal
Documents, (iii) violate or contravene the terms of any court order, or (iv)
violate applicable provisions of statutory law or regulation.
(6) There are no actions, proceedings or investigations pending against
the Seller or, to my knowledge, threatened against the Seller before any court,
administrative agency, or tribunal (i) asserting the invalidity of the Trust or
any of the Underwriting Agreements or Principal Documents, (ii) seeking to
prevent the consummation of any of the transactions contemplated by any of the
Underwriting Agreements or the Principal Documents or the execution and delivery
thereof, or (iii) that could reasonably be expected to materially and adversely
affect the enforceability of the Underwriting Agreements or Principal Documents
against the Seller or the ability of the Seller to perform its obligations
thereunder.
(7) No consent, approval, authorization, or order of, or filing with,
any court or governmental agency or body is required of the Seller for the
consummation of the transactions contemplated in the Underwriting Agreements or
Principal Documents, except such consents, approvals, authorizations, or orders
as have been obtained or such filings as have been made.
(8) Nothing has come to our attention that would lead us to believe
that the representations and warranties of the Seller contained in the Principal
Documents are other than as stated therein.
(9) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the Commonwealth of Virginia,
with full power (corporate and other) and authority to own its properties and to
conduct its business
A-3
<PAGE>
as now conducted by it and to enter into and perform its obligations under the
Trust Agreement.
(10) The Company has duly authorized, executed, and delivered the Trust
Agreement and the Trust Agreement is a legal, valid and binding obligation of
the Company, enforceable against the Company, subject, as to the enforceability
thereof, to bankruptcy, reorganization, insolvency, moratorium and other laws
affecting creditors' rights generally and by the application of general
principles of equity.
(11) Neither the execution and delivery by the Company of the Trust
Agreement, nor the consummation of the transactions contemplated thereby nor the
performance by the Company of its obligations thereunder will (i) violate the
Articles of Incorporation and by-laws, as amended, of the Company, (ii) breach,
or result in a default under or acceleration of, any existing obligation of the
Company in any indenture, agreement, or instrument known to me, after due
inquiry and reasonable investigation, which breach or default would reasonably
be expected to have a material adverse effect on the condition of the Company,
financial or otherwise, or adversely affect the transactions contemplated by the
Principal Documents, (iii) violate or contravene the terms of any court order,
or (iv) violate applicable provisions of statutory law or regulation.
(12) There are no actions, proceedings or investigations pending
against the Company or, to my knowledge, threatened against the Company before
any court, administrative agency, or tribunal (i) asserting the invalidity of
the Trust Agreement or any of the other Principal Documents, (ii) seeking to
prevent the consummation of any of the transactions contemplated by any of the
Underwriting Agreements or the Principal Documents or the execution and delivery
thereof, or (iii) that could reasonably be expected to materially and adversely
affect the enforceability of the Trust Agreement against the Company or the
ability of the Company to perform its obligations thereunder.
(13) No consent, approval, authorization, or order of, or filing with,
any court or governmental agency or body is required of the Company for the
consummation of the transactions contemplated in the Trust Agreement, except
such consents, approvals, authorizations, or orders as have been obtained or
such filings as have been made.
(14) There are no legal or governmental proceedings pending or
threatened against the Seller, the Company, or the Master Servicer that are
required to be disclosed in the Registration Statement, other than those
disclosed therein.
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(15) There are no contracts, indentures, mortgages, loan agreements, notes,
leases, or other instruments to which the Seller, the Company, or the Master
Servicer is a party that are required to be described or referred to in the
Registration Statement or to be filed as exhibits thereto other than those
described or referred to or filed or incorporated by reference as exhibits
thereto.
For purposes of this opinion, I have assumed that the Underwriting
Agreements and the Principal Documents have been duly executed and delivered by
all parties thereto (other than the Seller and the Company) and are valid and
binding upon and enforceable against such parties, subject, as to the
enforceability thereof, to bankruptcy, reorganization, insolvency, moratorium
and other laws affecting creditors' rights generally and by the application of
general principles of equity.
The opinions expressed herein are limited to matters of Federal law and
the laws of the Commonwealth of Virginia, without giving effect to principles of
conflicts of laws.
This opinion is rendered solely to the addressee hereof, for its use in
connection with the transactions contemplated by the Underwriting Agreements and
Principal Documents and may not be relied upon for any other purpose or by any
other person.
Very truly yours,
[ ]
General Counsel
A-5
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EXHIBIT B
[Letterhead of McGuire, Woods, Battle & Boothe, L.L.P.]
[ ], 1996
CS First Boston Corporation
Park Avenue Plaza
New York, New York 10055
Re: Floating Rate Asset Backed Notes
and Floating Rate Asset Backed
Certificates
Gentlemen:
We have acted as counsel to Signet Bank (the "Seller") and
Signet Student Loan Trust 1996-A (the "Trust") in connection with the issuance
by the Trust of the Floating Rate Class A-1 Asset Backed Notes in the aggregate
principal amount of $_______ and the Floating Rate Class A-2 Asset Backed Notes
in the aggregate principal amount of $________ (collectively, the "Notes") and
the Floating Rate Asset Backed Certificates in the aggregate principal amount of
$____________. This opinion letter is furnished to you pursuant to Section 6(f)
of the Note Underwriting Agreement (the "Note Underwriting Agreement") dated [
], 1996 between the Seller and the Underwriter named therein and Section 6(f) of
the Certificate Underwriting Agreement (the "Certificate Underwriting
Agreement") dated [ ], 1996 between the Seller and the Underwriter named
therein. Except as otherwise indicated herein, capitalized terms used in this
opinion letter are defined as set forth in the Underwriting Agreements.
We have examined such documents, records and matters of law as
we have deemed necessary for purposes of this opinion letter, and based
thereupon and subject to the foregoing, we are of the opinion that:
(1) The Indenture creates a valid security interest in the
Financed Student Loans, including all moneys paid thereunder on or
after the Cutoff Date, in favor of the
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Indenture Trustee, as trustee for the benefit of the Noteholders, that
has been duly perfected by the filing of financing statements executed
by the Eligible Lender Trustee in the offices indicated in Schedule __
hereto, provided, that, this opinion does not in any way derogate the
conclusion expressed in paragraph ___ hereto [true sale paragraph]. The
filing of such financing statements has perfected a first priority
security interest in such Student Loans, including all moneys paid
thereunder, except for Liens the priority of which is determined under
the provisions of applicable law without regard to the filing of record
of a financing statement in the offices listed on Schedule __ hereto or
Liens the priority of which does require such a filing, but, upon such
filing, may relate back to a date prior to the date on which the
security interest was perfected. No filings or other actions, other
than the filing of appropriate UCC continuation statements, are
necessary to maintain the perfection and priority of such security
interest. We call your attention to the fact that unless appropriate
financing statements are timely filed in the appropriate offices,
perfection of the security interest in the Financed Student Loans,
including all moneys paid thereunder, will be terminated if the Trust
hereafter changes its name, identity or corporate structure so that the
financing statements filed in the offices indicated on Schedule __
hereto become seriously misleading.
(2) A security interest in the Financed Student Loans
may, pursuant to the provisions of 20 U.S.C. ss. 1087-2(d)(3),
be perfected in the manner provided by the UCC for
perfection of a security interest in accounts.
(3) The Seller is not, and will not as a result of the offer
and sale of the Notes and Certificates as contemplated in the
Prospectus and the Note Underwriting Agreement and the Certificate
Underwriting Agreement become, an "investment company" as defined in
the Investment Company Act or a company "controlled by" an "investment
company" within the meaning of the Investment Company Act.
(4) All actions required to be taken and all filings required
to be made by the Seller or the Trust under the Act and the Exchange
Act prior to the sale of the Notes and the Certificates have been duly
taken or made.
(5) The Trust Agreement need not be qualified under the Trust
Indenture Act of 1939, and the Trust is not required to register under
the Investment Company Act.
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<PAGE>
(6) The Indenture has been duly qualified under the Trust
Indenture Act.
(7) The Trust has been duly formed, is validly existing and is in
good standing under the laws of the State of Delaware, with full power
and authority to own its assets and conduct its business as described
in the Prospectus.
(8) The Trust has duly authorized the Indenture, the Loan Sale
Agreement, the Master Servicing Agreement and the Administration
Agreement, and, when duly executed and delivered by the other parties
thereto, they will be valid and binding obligations of the Trust,
enforceable against the Trust in accordance with their terms, subject,
as to the enforceability thereof, to bankruptcy, reorganization,
insolvency, moratorium and other laws affecting creditors' rights
generally and by the application of general principles of equity.
(9) The Registration Statement has become effective under the Act;
any required filing of the Prospectus (and any Supplement thereto)
pursuant to Rule 424(b) promulgated under the Act has been made in the
manner and within the time period required under such rule; no stop
order suspending the effectiveness of the Registration Statement has
been issued and, to our knowledge, no proceedings for that purpose are
pending or threatened by the Commission.
(10) The Basic Documents, and the transactions contemplated by the
Basic Documents, conform in all material respects to the applicable
requirements of the Higher Education Act, and, upon the due
authorization, execution and delivery of the Basic Documents and the
consummation of such transactions, the Financed Student Loans, legal
title to which will be held by the Eligible Lender Trustee on behalf of
the Trust, will qualify, subject to compliance with all applicable
origination and servicing requirements with respect thereto, to receive
all applicable federal assistance payments, including federal
reinsurance and federal interest subsidies and special allowance
payments, with respect thereto.
(11) We have examined the Registration Statement and the Prospectus
(and any Supplement thereto), and nothing has come to our attention
that would lead us to believe that, solely with respect to the Higher
Education Act and the student loan business, the Registration Statement
or the Prospectus or any amendment or supplement thereto as of the
respective dates thereof or on the Closing Date contains an
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untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements therein not misleading.
(12) The Eligible Lender Trustee is an "eligible lender" as such
term is defined in Section 435(d) of the Higher Education Act for
purposes of holding legal title to the Financed Student Loans.
(13) The statements contained in the Prospectus under the headings
"Risk Factors -- Certain Legal Aspects" and "Certain Legal Aspects of
the Student Loans," to the extent that they describe legal matters,
present fair summaries of
such legal matters.
(14) The statements contained in the Prospectus under the captions
"Description of the Securities," "Description of the Transfer and
Servicing Agreements, "Description of the Notes" and "Description of
the Certificates," insofar as such statements purport to summarize the
provisions of the Certificates, the Notes, the Indenture, the
Administration Agreement, the Loan Sale Agreement, the Master Servicing
Agreement and the Trust Agreement, present fair summaries of such
provisions.
We have participated in the preparation of the Registration
Statement and the Prospectus (and any supplement thereto). From time to time we
have had discussions with the officers and employees of the Seller and your
employees and counsel concerning the information contained in the Registration
Statement and the Prospectus (and any supplement thereto). Based thereupon we
are of the opinion that (a) the Registration Statement (except for the financial
statements, financial schedules and other numerical, financial and statistical
information contained therein and the Form T-1 included therein, as to all of
which we express no view) at the time the Registration Statement became
effective under the Act complied as to form in all material respects with the
Act and the Trust Indenture and the rules and regulations thereunder and (b) the
Prospectus (and any supplement thereto) (except for the financial statements,
financial schedules and other numerical, financial and statistical information
contained therein, as to all of which we express no view) as of its date
complied as to form with the Act and the rules and regulations thereunder. Based
upon the participation and discussions described above, no facts have come to
our attention to cause us to believe that (a) the Registration Statement (except
for the financial statements, financial schedules and other numerical, financial
and statistical information contained therein, as to which we express no view)
at the time the Registration Statement became effective under the
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<PAGE>
Act contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading or (b) the Prospectus (and any Supplement thereto)
(except for the financial statements, financial schedules and other numerical,
financial and statistical information contained therein, as to all of which we
express no view) as of its date or the date hereof contained or contains any
untrue statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
[McGuire, Woods, Battle & Boothe, L.L.P. will rely on the opinion of
Brown & Wood LLP with respect to certain matters of New York law and on
Richards, Layton & Finger with respect to certain matters of Delaware law.]
Very truly yours,
B-5
Exhibit 4.1
EXECUTION COPY
- -------------------------------------------------------------------------------
TRUST AGREEMENT
among
SIGNET BANK,
as Depositor,
SIGNET STUDENT LOAN CORPORATION
and
THE FIRST NATIONAL BANK OF CHICAGO,
not in its individual capacity but solely
as Eligible Lender Trustee
Dated as of November 1, 1996
- -------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
Definitions and Usage...................... 1
ARTICLE II
Organization
SECTION 2.01. Name....................................................... 1
SECTION 2.02. Office..................................................... 1
SECTION 2.03. Purposes and Powers........................................ 1
SECTION 2.04. Appointment of Eligible Lender Trustee..................... 2
SECTION 2.05. Initial Capital Contribution of
Trust Estate.................................... 2
SECTION 2.06. Declaration of Trust........................................ 3
SECTION 2.07. Liability of the Certificate holders........................ 3
SECTION 2.08. Title to Trust Property..................................... 4
SECTION 2.09. Representations and Warranties of
the Depositor .................................. 4
SECTION 2.10. Federal Income Tax Allocations.............................. 5
Section 2.11. Maintenance of the Demand Note.............................. 6
ARTICLE III
Trust Certificates and Transfer of Interests
SECTION 3.01. Initial Beneficial Ownership............................... 6
SECTION 3.02. The Trust Certificates..................................... 7
SECTION 3.03. Authentication of Trust Certificates....................... 7
SECTION 3.04. Registration of Transfer and Exchange
of Trust Certificates.......................... 7
SECTION 3.05. Mutilated, Destroyed, Lost or Stolen
Trust Certificates............................. 9
SECTION 3.06. Persons Deemed Owners...................................... 9
SECTION 3.07. Access to List of Certificateholders'
Names and Addresses............................ 10
SECTION 3.08. Maintenance of Office or Agency............................ 10
SECTION 3.09. Appointment of Certificate Paying Agent.................... 10
SECTION 3.10. Disposition by Company .................................... 11
SECTION 3.11. Book-Entry Certificates.................................... 12
SECTION 3.12. Notices to Clearing Agency................................. 13
SECTION 3.13. Definitive Certificates.................................... 13
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<PAGE>
ARTICLE IV
Actions by Eligible Lender Trustee
SECTION 4.01. Prior Notice to Certificateholders
with Respect to Certain Matters................ 14
SECTION 4.02. Action by Certificateholders with
Respect to Certain Matters..................... 15
SECTION 4.03. Action by Certificateholders with
Respect to Bankruptcy.......................... 15
SECTION 4.04. Restrictions on Certificateholders'
Power.......................................... 15
SECTION 4.05. Majority Control........................................... 15
ARTICLE V
Application of Trust Funds; Certain Duties
SECTION 5.01. Application of Trust Funds................................. 16
SECTION 5.02. Method of Payment.......................................... 17
SECTION 5.03. No Segregation of Moneys; No Interest...................... 17
SECTION 5.04. Accounting and Reports to the
Noteholders, Certificateholders,
the Internal Revenue Service
and Others..................................... 17
SECTION 5.05. Signature on Returns;
Tax Matters Partner............................ 18
SECTION 5.06. Check-The-Box Proposal ..................................18
ARTICLE VI
Authority and Duties of Eligible Lender Trustee
SECTION 6.01. General Authority.......................................... 19
SECTION 6.02. General Duties............................................. 19
SECTION 6.03. Action upon Instruction.................................... 20
SECTION 6.04. No Duties Except as Specified in this
Agreement, the Loan Sale Agreement, the
Master Servicing Agreement, the Administration
Agreement or in Instructions................... 21
SECTION 6.05. No Action Except Under Specified
Documents or Instructions...................... 22
SECTION 6.06. Restrictions............................................... 22
ARTICLE VII
Concerning the Eligible Lender Trustee
SECTION 7.01. Acceptance of Trusts and Duties............................ 22
SECTION 7.02. Furnishing of Documents.................................... 24
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<PAGE>
SECTION 7.03. Representations and Warranties............................. 24
SECTION 7.04. Reliance; Advice of Counsel................................ 25
SECTION 7.05. Not Acting in Individual Capacity.......................... 25
SECTION 7.06. Eligible Lender Trustee Not Liable
for Trust Certificates or Student Loans........ 26
SECTION 7.07. Eligible Lender Trustee May Own Trust
Certificates and Notes......................... 26
ARTICLE VIII
Compensation of Eligible Lender Trustee
SECTION 8.01. Eligible Lender Trustee's Fees
and Expenses................................... 27
SECTION 8.02. Payments to the Eligible Lender Trustee.................... 27
ARTICLE IX
Termination of Trust Agreement
SECTION 9.01. Termination of Trust Agreement............................. 27
SECTION 9.02. Dissolution upon Bankruptcy of
the Company.................................... 29
ARTICLE X
Successor Eligible Lender Trustees and
Additional Eligible Lender Trustees
SECTION 10.01. Eligibility Requirements for Eligible
Lender Trustee................................ 30
SECTION 10.02. Resignation or Removal of Eligible
Lender Trustee................................ 30
SECTION 10.03. Successor Eligible Lender Trustee......................... 32
SECTION 10.04. Merger or Consolidation of Eligible
Lender Trustee................................ 31
SECTION 10.05. Appointment of Co-Eligible Lender
Trustee or Separate Eligible Lender
Trustee....................................... 32
ARTICLE XI
Miscellaneous
SECTION 11.01. Supplements and Amendments................................ 35
SECTION 11.02. No Legal Title to Trust Estate
in Certificateholders......................... 36
SECTION 11.03. Limitations on Rights of Others........................... 36
SECTION 11.04. Notices................................................... 37
SECTION 11.05. Severability.............................................. 37
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<PAGE>
SECTION 11.06. Separate Counterparts..................................... 37
SECTION 11.07. Successors and Assigns.................................... 37
SECTION 11.08. No Petition............................................... 38
SECTION 11.09. No Recourse............................................... 38
SECTION 11.10. Headings.................................................. 38
SECTION 11.11. Governing Law............................................. 38
EXHIBIT A Form of Trust Certificate
EXHIBIT B Form of Certificate Depository Agreement
EXHIBIT C Form of Certificate of Trust
iv
<PAGE>
TRUST AGREEMENT dated as of November 1, 1996, among SIGNET
BANK, a Virginia banking corporation, as Depositor, SIGNET STUDENT LOAN
CORPORATION, a Virginia corporation (the "Company") and THE FIRST NATIONAL BANK
OF CHICAGO, a national banking association, as Eligible Lender Trustee.
The Depositor, the Company and the Eligible Lender Trustee
hereby agree as follows:
ARTICLE I
Definitions and Usage
Capitalized terms used but not defined herein are defined in
Appendix A to the Administration Agreement, dated as of November 1, 1996, among
the Signet Student Loan Trust 1996-A, as Issuer, the Depositor, as
Administrator, and The Bank of New York, as Indenture Trustee, which also
contains rules as to construction and usage that shall be applicable herein.
ARTICLE II
Organization
SECTION 2.01. Name. The Trust created hereby shall be known as
"Signet Student Loan Trust 1996-A", in which name the Eligible Lender Trustee
may engage in the transactions contemplated hereby, make and execute contracts
and other instruments on behalf of the Trust and sue and be sued.
SECTION 2.02. Office. The office of the Trust shall be in care
of the Eligible Lender Trustee at its Corporate Trust Office or at such other
address as the Eligible Lender Trustee may designate by written notice to the
Certificateholders and the Depositor.
SECTION 2.03. Purposes and Powers. The purpose of the Trust
is to engage in the following activities:
(i) to issue the Notes pursuant to the Indenture and the Trust
Certificates pursuant to this Agreement and to sell the Notes and the
Trust Certificates in one or more transactions;
(ii) with the proceeds of the sale of the Notes and the Trust
Certificates, to purchase the Initial Financed Student Loans, to fund
the Pre-Funding Account and the Reserve Account, and to pay the
organizational, start-up and
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transactional expenses of the Trust and to pay the balance to the
Depositor pursuant to the Loan Sale Agreement;
(iii) to acquire and hold any Additional Student Loans to be
conveyed to the Trust subsequent to the Closing Date pursuant to the
Loan Sale Agreement;
(iv) to assign, grant, transfer, pledge, mortgage and convey the
Trust Estate pursuant to the Indenture and to hold, manage and
distribute to the Certificateholders pursuant to the terms of the
Master Servicing Agreement any portion of the Trust Estate released
from the Lien of, and remitted to the Trust pursuant to, the Indenture;
(v) to enter into and perform its obligations under the Basic
Documents to which it is to be a party;
(vi) to engage in those activities, including entering into
agreements, that are necessary, suitable or convenient to accomplish
the foregoing or are incidental thereto or connected therewith; and
(vii) subject to compliance with the Basic Documents, to engage in
such other activities as may be required in connection with
conservation of the Trust Estate and the making of distributions to the
Certificateholders, the Noteholders and the others specified in Section
2(d) of the Administration Agreement.
The Trust shall not engage in any activity other than in connection with the
foregoing or other than as required or authorized by the terms of this Agreement
or the other Basic Documents.
SECTION 2.04. Appointment of Eligible Lender Trustee. The
Depositor hereby appoints the Eligible Lender Trustee as trustee of the Trust
effective as of the date hereof, to have all of the rights, powers and duties
set forth herein.
SECTION 2.05. Initial Capital Contribution of Trust Estate.
The Depositor hereby sells, assigns, transfers, conveys and sets over to the
Eligible Lender Trustee, as of the date hereof, the sum of $1.00. The Eligible
Lender Trustee hereby acknowledges receipt in trust from the Depositor, as of
the date hereof, of the foregoing contribution, which shall constitute the
initial Trust Estate and shall be deposited in the Collection Account. The
Depositor shall pay the organizational expenses of the Trust as they may arise
or shall, upon the request of the Eligible Lender Trustee, promptly reimburse
the Eligible Lender
2
<PAGE>
Trustee for any such expenses paid by the Eligible Lender Trustee.
SECTION 2.06. Declaration of Trust. The Eligible Lender
Trustee hereby declares that it will hold the Trust Estate in trust upon and
subject to the conditions set forth herein for the use and benefit of the
Certificateholders, subject to the obligations of the Trust under the other
Basic Documents. It is the intention of the parties hereto that the Trust
constitute a trust under the Business Trust Statute and that this Agreement
constitute the governing instrument of such trust. It is the intention of the
parties hereto that, solely for income and franchise tax purposes, the Trust
shall be treated as a partnership, with the assets of the partnership being the
Financed Student Loans and other assets held by the Trust, the partners of the
partnership being the Certificateholders (including the Depositor and the
Company in its capacity as recipient of certain distributions from the Reserve
Account), and the Notes being debt of the partnership. The parties agree that,
unless otherwise required by appropriate tax authorities, the Trust will file or
cause to be filed annual or other necessary returns, if any, reports and other
forms consistent with the characterization of the Trust as a partnership for
such tax purposes. Effective as of the date hereof, the Eligible Lender Trustee
shall have all rights, powers and duties set forth herein and in the Business
Trust Statute with respect to accomplishing the purposes of the Trust. The
Eligible Lender Trustee and the Delaware Trustee shall file the Certificate of
Trust with the Secretary of State of the State of Delaware pursuant to ss. 3801
of the Business Trust Statute on or before the Closing Date.
SECTION 2.07. Liability of the Certificateholders. (a) The
Company shall be liable directly to and will indemnify the injured party for all
losses, claims, damages, liabilities and expenses of the Trust (including
Expenses, to the extent not paid out of the Trust Estate) to the extent that the
Company would be liable if the Trust were a partnership under the Delaware
Revised Uniform Limited Partnership Act in which the Company were a general
partner; provided, however, that the Company shall not be liable for any losses
incurred by a Certificateholder or a Certificate Owner in the capacity of an
investor in the Certificates or a Noteholder or a Note Owner in the capacity of
an investor in the Notes. In addition, any third party creditors of the Trust
(other than in connection with the obligations described in the preceding
sentence for which the Company shall not be liable) shall be deemed third party
beneficiaries of this paragraph. The obligations of the Company under this
paragraph shall be evidenced by the Trust Certificates described in Section
3.10, which shall be deemed to be a separate class of Trust Certificates from
all other Trust Certificates
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<PAGE>
issued by the Trust; provided that the rights and obligations evidenced by all
Trust Certificates, regardless of class, except as provided in this Section,
shall be identical.
(b) No Certificateholder, other than to the extent set forth
in paragraph (a), shall have any personal liability for any liability or
obligation of the Trust.
SECTION 2.08. Title to Trust Property. Legal title to the
Trust Estate shall be vested at all times in the Trust as a separate legal
entity except where applicable law in any jurisdiction requires title to any
part of the Trust Estate to be vested in a trustee or trustees, in which case
title shall be deemed to be vested in the Eligible Lender Trustee, a co-trustee
and/or a separate trustee, as the case may be; provided that legal title to the
Financed Student Loans shall be vested at all times in the Eligible Lender
Trustee on behalf of the Trust.
SECTION 2.09. Representations and Warranties of the Depositor.
The Depositor hereby represents and warrants to the Eligible Lender Trustee
that:
(a) The Depositor is duly organized and validly existing as a
banking corporation in good standing under the laws of the Commonwealth
of Virginia, with corporate 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) The Depositor is duly qualified to do business as a
foreign corporation in good standing, and has obtained all necessary
licenses and approvals in all jurisdictions in which the ownership or
lease of property or the conduct of its business shall require such
qualifications.
(c) The Depositor has the corporate power and authority to
execute and deliver this Agreement and to carry out its terms; the
Depositor has full corporate power and authority to sell and assign the
property to be sold and assigned to and deposited with the Trust (or
with the Eligible Lender Trustee on behalf of the Trust) and the
Depositor has duly authorized such sale and assignment and deposit to
the Trust (or to the Eligible Lender Trustee on behalf of the Trust) by
all necessary corporate action; and the execution, delivery and
performance of this Agreement has been duly authorized by the Depositor
by all necessary corporate action.
(d) This Agreement constitutes a legal, valid and binding
obligation of the Depositor enforceable in
4
<PAGE>
accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization and similar laws relating to creditors'
rights generally or the rights of creditors of banks the deposit
accounts of which are insured by the FDIC and subject to general
principles of equity.
(e) The consummation of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof do not conflict with,
result in any breach of any of the terms and provisions of, or
constitute (with or without notice or lapse of time or both) a default
under, the articles of incorporation or by-laws of the Depositor, or
any material indenture, agreement or other instrument to which the
Depositor is a party or by which it is bound; nor result in the
creation or imposition of any Lien upon any of its properties pursuant
to the terms of any such indenture, agreement or other instrument
(other than pursuant to the Basic Documents); nor violate any law or,
to the best of the Depositor's knowledge, any order, rule or regulation
applicable to the Depositor of any court or of any Federal or state
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Depositor or its
properties.
(f) There are no proceedings or investigations pending or, to
the Depositor's best knowledge, threatened before any court, regulatory
body, administrative agency or other governmental instrumentality
having jurisdiction over the Depositor or its properties: (A) asserting
the invalidity of this Agreement, (B) seeking to prevent the
consummation of any of the transactions contemplated by this Agreement
or (C) seeking any determination or ruling that might materially and
adversely affect the performance by the Depositor of its obligations
under, or the validity or enforceability of, this Agreement.
SECTION 2.10. Federal Income Tax Allocations. Net income of
the Trust for any month as determined for Federal income tax purposes (and each
item of income, gain, loss and deduction entering into the computation thereof)
shall be allocated:
(a) among the Certificateholders as of the close of business
on the last day of such month, in proportion to their ownership of
principal amount of Trust Certificates on such date, an amount of net
income up to the sum of (i) the Certificateholders' Interest
Distribution Amount for the related Interest Payment Date, (ii) the
portion of the Certificateholders' Interest LIBOR Carryover, if any,
for the related Distribution Date allocable to such month, (iii)
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<PAGE>
interest on the excess, if any, of the Certificateholders' Interest
Distribution Amount for the preceding Interest Payment Date over the
amount in respect of interest that is actually distributed to
Certificateholders on such preceding Interest Payment Date, to the
extent permitted by law, at the Certificate Rate for such month and
(iv) the portion of the market discount on the Financed Student Loans
accrued during such month that is allocable to the excess, if any, of
the initial aggregate principal amount of the Trust Certificates over
their initial aggregate issue price; and
(b) to the Depositor and the Company in the proportion of 99%
and 1%, respectively, to the extent of any remaining net income.
If the net income of the Trust for any month is insufficient for the allocations
described in clause (a) above, subsequent net income shall first be allocated to
make up such shortfall before being allocated as provided in clause (b) above.
Net losses of the Trust, if any, for any month as determined for Federal income
tax purposes (and each item of income, gain, loss and deduction entering into
the computation thereof) shall be allocated to the Depositor and the Company in
the proportion of 99% and 1% respectively, to the extent the Depositor and the
Company are reasonably expected to bear the economic burden of such net losses,
and any remaining net losses shall be allocated among the remaining
Certificateholders as of the close of business on the last day of such month in
proportion to their ownership of principal amount of Trust Certificates on such
Record Date. The Depositor and the Company are authorized to modify the
allocations in this paragraph if necessary or appropriate, in their sole
discretion, for the allocations to fairly reflect the economic income, gain or
loss to the Depositor and the Company or to the Certificateholders, or as
otherwise required by the Code.
SECTION 2.11. Maintenance of the Demand Note. To the fullest
extent permitted by applicable law, the Company agrees that it shall not sell,
convey, pledge, transfer or otherwise dispose of the Demand Note.
ARTICLE III
Trust Certificates and Transfer of Interests
SECTION 3.01. Initial Beneficial Ownership. Upon the formation
of the Trust by the contribution by the Depositor pursuant to Section 2.05 and
until the issuance of the Trust Certificates, the Depositor shall be the sole
beneficial owner of the Trust.
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SECTION 3.02. The Trust Certificates. The Trust Certificates
shall be issued in denominations of $1,000 or in integral multiples of $l,000 in
excess thereof; provided, however, that the Trust Certificates issued to the
Company pursuant to Section 3.10 may be issued in such denomination as to
include any residual amount. The Trust Certificates shall be executed on behalf
of the Trust by manual or facsimile signature of an authorized officer of the
Eligible Lender Trustee. Trust Certificates bearing the manual or facsimile
signatures of individuals who were, at the time when such signatures shall have
been affixed, authorized to sign on behalf of the Trust, shall be validly issued
by the Trust and entitled to the benefits of this Agreement, notwithstanding
that such individuals or any of them shall have ceased to be so authorized prior
to the authentication and delivery of such Trust Certificates or did not hold
such offices at the date of authentication and delivery of such Trust
Certificates.
A Person shall become a Certificateholder, and shall be
entitled to the rights and subject to the obligations of a Certificateholder
hereunder, upon such Person's acceptance of a Trust Certificate duly registered
in such Person's name pursuant to Section 3.04.
SECTION 3.03. Authentication of Trust Certificates.
Concurrently with the sale of the Initial Financed Student Loans to the Trust
pursuant to the Loan Sale Agreement, the Eligible Lender Trustee shall cause the
Trust Certificates in an aggregate principal amount equal to the Initial
Certificate Balance to be executed on behalf of the Trust, authenticated and
delivered to or upon the written order of the Depositor, signed by its chairman
of the board, its president or any vice president, without further action by the
Depositor, in authorized denominations. No Trust Certificate shall entitle its
holder to any benefit under this Agreement, or shall be valid for any purpose,
unless there shall appear on such Trust Certificate a certificate of
authentication substantially in the form set forth in Exhibit A, executed by the
Eligible Lender Trustee or First Chicago Trust Company of New York, as the
Eligible Lender Trustee's authenticating agent, by manual signature; such
authentication shall constitute conclusive evidence that such Trust Certificate
shall have been duly authenticated and delivered hereunder. All Trust
Certificates shall be dated the date of their authentication. No further Trust
Certificates shall be issued except pursuant to Section 3.04, 3.05 or 3.13
hereunder.
SECTION 3.04. Registration of Transfer and Exchange of Trust
Certificates. The Certificate Registrar shall keep or cause to be kept, at the
office or agency maintained pursuant to
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Section 3.08, a Certificate Register in which, subject to such reasonable
regulations as it may prescribe, the Eligible Lender Trustee shall provide for
the registration of Trust Certificates and of transfers and exchanges of Trust
Certificates as herein provided. The Eligible Lender Trustee shall be the
initial Certificate Registrar.
Upon surrender for registration of transfer of any Trust
Certificate at the office or agency maintained pursuant to Section 3.08, the
Eligible Lender Trustee shall execute, authenticate and deliver (or shall cause
First Chicago Trust Company of New York as its authenticating agent to
authenticate and deliver), in the name of the designated transferee or
transferees, one or more new Trust Certificates in authorized denominations of a
like aggregate amount dated the date of authentication by the Eligible Lender
Trustee or any authenticating agent. At the option of a Certificateholder, Trust
Certificates may be exchanged for other Trust Certificates of authorized
denominations of a like aggregate amount upon surrender of the Trust
Certificates to be exchanged at the office or agency maintained pursuant to
Section 3.08.
Every Trust Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to the Eligible Lender Trustee and
the Certificate Registrar duly executed by the Certificateholder or his attorney
duly authorized in writing, with such signature guaranteed by an "eligible
guarantor institution" meeting the requirements of the Certificate Registrar,
which requirements include membership or participation in Securities Transfer
Agent's Medallion Program ("STAMP") or such other "signature guarantee program"
as may be determined by the Certificate Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Exchange Act. Each Trust
Certificate surrendered for registration of transfer or exchange shall be
canceled and subsequently disposed of by the Eligible Lender Trustee in
accordance with its customary practice.
No service charge shall be made for any registration of
transfer or exchange of Trust Certificates, but the Eligible Lender Trustee or
the Certificate Registrar may require payment of a sum sufficient to cover any
tax or governmental charge that may be imposed in connection with any transfer
or exchange of Trust Certificates.
The preceding provisions of this Section 3.04 notwithstanding,
the Eligible Lender Trustee shall not be required to make and the Certificate
Registrar need not register transfers or exchanges of Trust Certificates for a
period of 15
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days preceding any Distribution Date with respect to the Trust Certificates.
The Trust Certificates and any beneficial interest in such
Trust Certificates may not be acquired by (a) an employee benefit plan (as
defined in Section 3(3) of ERISA) that is subject to the provisions of Title I
of ERISA, (b) a plan described in Section 4975(e)(1) of the Code or (c) any
entity whose underlying assets include plan assets by reason of a plan's
investment in the entity (each, a "Benefit Plan"). By accepting and holding a
Trust Certificate or an interest therein, the Certificateholder thereof and
Certificate Owner thereof shall be deemed to have represented and warranted that
it is not a Benefit Plan.
SECTION 3.05. Mutilated, Destroyed, Lost or Stolen Trust
Certificates. If (a) any mutilated Trust Certificate shall be surrendered to the
Certificate Registrar, or if the Certificate Registrar shall receive evidence to
its satisfaction of the destruction, loss or theft of any Trust Certificate, and
(b) there shall be delivered to the Certificate Registrar and the Eligible
Lender Trustee such security or indemnity as may be required by them to save
each of them harmless, then in the absence of notice that such Trust Certificate
shall have been acquired by a bona fide purchaser, the Eligible Lender Trustee
on behalf of the Trust shall execute and the Eligible Lender Trustee, or First
Chicago Trust Company of New York, as the Eligible Lender Trustee's
authenticating agent, shall authenticate and deliver, in exchange for or in lieu
of any such mutilated, destroyed, lost or stolen Trust Certificate, a new Trust
Certificate of like tenor and denomination. In connection with the issuance of
any new Trust Certificate under this Section, the Eligible Lender Trustee and
the Certificate Registrar may require the payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection
therewith. Any duplicate Trust Certificate issued pursuant to this Section shall
constitute conclusive evidence of ownership in the Trust, as if originally
issued, whether or not the lost, stolen or destroyed Trust Certificate shall be
found at any time.
SECTION 3.06. Persons Deemed Owners. Prior to due presentation
of a Trust Certificate for registration of transfer, the Eligible Lender
Trustee, the Certificate Registrar and any agent of any thereof may treat the
Person in whose name any Trust Certificate shall be registered in the
Certificate Register as the owner of such Trust Certificate for the purpose of
receiving distributions pursuant to Section 5.01 and for all other purposes
whatsoever, and neither the Eligible Lender Trustee, the
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Certificate Registrar nor any agent of any thereof shall be bound by any notice
to the contrary.
SECTION 3.07. Access to List of Certificateholders' Names and
Addresses. The Eligible Lender Trustee shall furnish or cause to be furnished to
the Depositor, within 15 days after receipt by the Eligible Lender Trustee of a
request therefor from the Depositor in writing, a list, in such form as the
Depositor may reasonably require, of the names and addresses of the
Certificateholders as of the most recent Record Date. If three or more
Certificateholders or one or more Certificateholders evidencing not less than
25% of the Certificate Balance apply in writing to the Eligible Lender Trustee,
and such application states that the applicants desire to communicate with other
Certificateholders with respect to their rights under this Agreement or under
the Trust Certificates and such application is accompanied by a copy of the
communication that such applicants propose to transmit, then the Eligible Lender
Trustee shall, within five Business Days after the receipt of such application,
afford such applicants access during normal business hours to the current list
of Certificateholders. Upon receipt of any such application, the Eligible Lender
Trustee will promptly notify the Depositor by providing a copy of such
application and a copy of the list of Certificateholders produced in response
thereto. Each Certificateholder, by receiving and holding a Trust Certificate,
shall be deemed to have agreed not to hold any of the Depositor, the Certificate
Registrar or the Eligible Lender Trustee accountable by reason of the disclosure
of its name and address, regardless of the source from which such information
was derived.
SECTION 3.08. Maintenance of Office or Agency. The Eligible
Lender Trustee shall maintain in the Borough of Manhattan, The City of New York,
an office or offices or agency or agencies where Trust Certificates may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Eligible Lender Trustee in respect of the Trust
Certificates and the other Basic Documents may be served. The Eligible Lender
Trustee initially designates One First National Plaza, Suite 0126, Chicago,
Illinois 60670-0126 as its principal Corporate Trust Office. The Eligible
Lender Trustee's New York office and its authenticating agent's office are
located at 14 Wall Street, New York, New York 10005, Attention: Corporate Trust
Administration. The Eligible Lender Trustee shall give prompt written notice to
the Depositor and to the Certificateholders of any change in the location of the
Certificate Register or any such office or agency.
SECTION 3.09. Appointment of Certificate Paying Agent. The
Certificate Paying Agent shall make distributions to
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Certificateholders from the amounts received from the Indenture Trustee out of
the Trust Accounts pursuant to Section 5.01 and shall report the amounts of such
distributions to the Eligible Lender Trustee. Any Certificate Paying Agent shall
have the revocable power to receive such funds from the Indenture Trustee for
the purpose of making the distributions referred to above. With respect to any
Certificate Paying Agent other than Signet Trust Company or the Indenture
Trustee, the Eligible Lender Trustee may revoke such power and remove the
Certificate Paying Agent if the Eligible Lender Trustee determines in its sole
discretion that the Certificate Paying Agent shall have failed to perform its
obligations under this Agreement in any material respect. The Certificate Paying
Agent shall initially be Signet Trust Company, and any co-paying agent chosen by
the Eligible Lender Trustee and acceptable to the Administrator and any such
Certificate Paying Agent shall be permitted to resign as Certificate Paying
Agent upon 30 days' written notice to the Eligible Lender Trustee. In the event
that Signet Trust Company or the Indenture Trustee shall no longer be the
Certificate Paying Agent, the Eligible Lender Trustee shall appoint a successor
to act as Certificate Paying Agent (which shall be a bank or trust company). The
Eligible Lender Trustee shall cause such successor Certificate Paying Agent or
any additional Certificate Paying Agent appointed by the Eligible Lender Trustee
to execute and deliver to the Eligible Lender Trustee an instrument in which
such successor Certificate Paying Agent or additional Certificate Paying Agent
shall agree with the Eligible Lender Trustee that as Certificate Paying Agent,
such successor Certificate Paying Agent or additional Certificate Paying Agent
will hold all sums, if any, held by it for payment to the Certificateholders in
trust for the benefit of the Certificateholders entitled thereto until such sums
shall be paid to such Certificateholders. The Certificate Paying Agent shall
return all unclaimed funds to the Eligible Lender Trustee and upon removal of a
Certificate Paying Agent such Certificate Paying Agent shall also return all
funds in its possession to the Eligible Lender Trustee. The provisions of
Sections 7.01, 7.03, 7.04, 7.05 and 8.01 shall apply to the Certificate Paying
Agent, for so long as Signet Trust Company shall act as Certificate Paying Agent
and, to the extent applicable, to any other paying agent appointed hereunder.
Any reference in this Agreement to the Certificate Paying Agent shall include
any co-paying agent unless the context requires otherwise.
SECTION 3.10. Disposition by Company. On and after the
Closing Date, the Company shall retain beneficial and record ownership of Trust
Certificates representing at least 1% of the Certificate Balance. Any attempted
transfer of any Trust Certificate that would reduce such interest of the Company
below 1% of the Certificate Balance shall be void. The Eligible Lender
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Trustee shall cause any Trust Certificate issued to the Company on the Closing
Date (and any Trust Certificate issued in exchange therefor) to contain a legend
stating "THIS TRUST CERTIFICATE IS NONTRANSFERABLE EXCEPT IN ACCORDANCE WITH
SECTION 3.10 OF THE TRUST AGREEMENT".
SECTION 3.11. Book-Entry Certificates. The Trust Certificates
will be issued in the form of a typewritten Trust Certificate or Trust
Certificates representing Book-Entry Certificates, to be delivered to The
Depository Trust Company, the initial Clearing Agency, by, or on behalf of, the
Trust; provided, however, that one Definitive Certificate (as defined below) may
be issued to the Company pursuant to Section 3.10. Such Book-Entry Certificate
or Book-Entry Certificates shall be registered on the Certificate Register in
the name of Cede & Co., the nominee of the initial Clearing Agency, and no
Certificate Owner (other than the Company) will receive a Definitive Certificate
representing such Certificate Owner's interest in such Trust Certificate, except
as provided in Section 3.13. Unless and until definitive, fully registered Trust
Certificates (the "Definitive Certificates") have been issued to Certificate
Owners pursuant to Section 3.13:
(i) the provisions of this Section shall be in full force and
effect;
(ii) the Certificate Registrar and the Eligible Lender Trustee shall
be entitled to deal with the Clearing Agency for all purposes of this
Agreement (including the payment of principal of and interest on the
Trust Certificates and the giving of instructions or directions
hereunder) as the sole Certificateholder and shall have no obligation
to the Certificate Owners;
(iii) to the extent that the provisions of this Section conflict
with any other provisions of this Agreement, the provisions of this
Section shall control;
(iv) the rights of Certificate Owners shall be exercised only
through the Clearing Agency and shall be limited to those established
by law and agreements between such Certificate Owners and the Clearing
Agency and/or the Clearing Agency Participants. Pursuant to the
Certificate Depository Agreement, unless and until Definitive
Certificates are issued pursuant to Section 3.13, the Clearing Agency
will make book-entry transfers among the Clearing Agency Participants
and receive and transmit payments of principal of and interest on the
Trust Certificates to such Clearing Agency Participants; and
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(v) whenever this Agreement requires or permits actions to be
taken based upon instructions or directions of Certificateholders of
Trust Certificates evidencing a specified percentage of the Certificate
Balance, the Clearing Agency shall be deemed to represent such
percentage only to the extent that it has received instructions to such
effect from Certificate Owners and/or Clearing Agency Participants
owning or representing, respectively, such required percentage of the
beneficial interest in the Trust Certificates and has delivered such
instructions to the Eligible Lender Trustee.
SECTION 3.12. Notices to Clearing Agency. Whenever a notice or
other communication to the Certificateholders is required under this Agreement
at a time when Book-Entry Certificates have been issued and are outstanding and
unless and until Definitive Certificates shall have been issued to Certificate
Owners pursuant to Section 3.13, the Eligible Lender Trustee shall give all such
notices and communications specified herein to be given to Certificateholders to
the Clearing Agency, and shall have no obligations to the Certificate Owners.
SECTION 3.13. Definitive Certificates. If (i) the
Administrator advises the Eligible Lender Trustee in writing that the Clearing
Agency is no longer willing or able to discharge properly its responsibilities
with respect to the Trust Certificates, and the Administrator is unable to
locate a qualified successor, (ii) the Administrator at its option advises the
Eligible Lender Trustee in writing that it elects to terminate the book-entry
system through the Clearing Agency or (iii) after the occurrence of an Event of
Default or a Servicer Default, Certificate Owners representing beneficial
interests aggregating at least a majority of the Certificate Balance advise the
Clearing Agency (which shall then notify the Eligible Lender Trustee) in writing
that the continuation of a book-entry system through the Clearing Agency is no
longer in the best interest of the Certificate Owners, then the Eligible Lender
Trustee shall cause the Clearing Agency to notify all Certificate Owners of the
occurrence of any such event and of the availability of the Definitive
Certificates to Certificate Owners requesting the same. Upon surrender to the
Eligible Lender Trustee of the typewritten Trust Certificate or Trust
Certificates representing the Book-Entry Certificates by the Clearing Agency,
accompanied by registration instructions, the Eligible Lender Trustee shall
execute and authenticate the Definitive Certificates in accordance with the
instructions of the Clearing Agency. Neither the Certificate Registrar nor the
Eligible Lender Trustee shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying on,
such instructions. Upon the issuance of Definitive Certificates, the
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Eligible Lender Trustee shall recognize the registered holders of the Definitive
Certificates as Certificateholders. The Definitive Certificates shall, at the
expense of the Depositor, be printed, lithographed or engraved or may be
produced in any other manner as is reasonably acceptable to the Eligible Lender
Trustee, as evidenced by its execution thereof.
ARTICLE IV
Actions by Eligible Lender Trustee
SECTION 4.01. Prior Notice to Certificateholders with Respect
to Certain Matters. With respect to the following matters, the Eligible Lender
Trustee shall not take action unless at least 30 days before the taking of such
action, the Eligible Lender Trustee shall have notified the Certificateholders
and the Rating Agencies in writing of the proposed action and the
Certificateholders shall not have notified the Eligible Lender Trustee in
writing prior to the 30th day after such notice is given that such
Certificateholders have withheld consent or provided alternative direction:
(a) the initiation of any material claim or lawsuit by the
Trust (except claims or lawsuits brought in connection with the
collection of the Financed Student Loans) and the compromise of any
material action, claim or lawsuit brought by or against the Trust
(except with respect to the aforementioned claims or lawsuits for
collection of Financed Student Loans);
(b) the election by the Trust to file an amendment to the
Certificate of Trust;
(c) the amendment of the Indenture by a supplemental indenture
in circumstances where the consent of any Noteholder is required;
(d) the amendment of the Indenture by a supplemental indenture
in circumstances where the consent of any Noteholder is not required
and such amendment materially adversely affects the interest of the
Certificateholders;
(e) the amendment, change or modification of the
Administration Agreement, except to cure any ambiguity or in connection
with a transaction permitted by Section 25 thereof or to amend or
supplement any provision in a manner or add any provision that would
not materially adversely affect the interests of the
Certificateholders; or
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(f) the appointment pursuant to the Indenture of a successor
Note Registrar, Paying Agent or Indenture Trustee or pursuant to this
Agreement of a successor Certificate Paying Agent or Certificate
Registrar, or the consent to the assignment by the Note Registrar,
Paying Agent or Indenture Trustee or Certificate Paying Agent or
Certificate Registrar of its obligations under the Indenture or this
Agreement, as applicable.
SECTION 4.02. Action by Certificateholders with Respect to
Certain Matters. The Eligible Lender Trustee shall not have the power, except
upon the direction of the Certificateholders, to (a) remove the Administrator
under the Administration Agreement pursuant to Section 12 thereof, (b) appoint a
successor Administrator pursuant to Section 12 of the Administration Agreement,
(c) remove the Master Servicer under the Master Servicing Agreement pursuant to
Section 6.01 thereof or (d) except as expressly provided in the Basic Documents,
sell the Financed Student Loans after the termination of the Indenture. The
Eligible Lender Trustee shall take the actions referred to in the preceding
sentence only upon written instructions signed by the Certificateholders.
SECTION 4.03. Action by Certificateholders with Respect to
Bankruptcy. The Eligible Lender Trustee shall not have the power to commence a
voluntary proceeding in bankruptcy relating to the Trust without the unanimous
prior approval of all Certificateholders and the delivery to the Eligible Lender
Trustee by each such Certificateholder of a certificate certifying that such
Certificateholder reasonably believes that the Trust is insolvent.
SECTION 4.04. Restrictions on Certificateholders' Power. The
Certificateholders shall not direct the Eligible Lender Trustee to take or
refrain from taking any action if such action or inaction would be contrary to
any obligation of the Trust or the Eligible Lender Trustee under this Agreement
or any of the other Basic Documents or would be contrary to Section 2.03 nor
shall the Eligible Lender Trustee be permitted to follow any such direction, if
given.
SECTION 4.05. Majority Control. Except as expressly provided
herein, any action that may be taken by the Certificateholders under this
Agreement may be taken by the Certificateholders of Trust Certificates
evidencing not less than a majority of the Certificate Balance. Except as
expressly provided herein, any written notice of the Certificateholders
delivered pursuant to this Agreement shall be effective if signed by
Certificateholders of Trust Certificates evidencing not less
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than a majority of the Certificate Balance at the time of the delivery of such
notice.
ARTICLE V
Application of Trust Funds; Certain Duties
SECTION 5.01. Application of Trust Funds. (a) On each
Interest Payment Date and Distribution Date, the Eligible Lender Trustee will,
or will cause the Certificate Paying Agent to, distribute to Certificateholders,
on a pro rata basis, amounts received from the Indenture Trustee for
distribution to the Certificateholders pursuant to Sections 2(d), 2(e) and 2(f)
of the Administration Agreement on such Interest Payment Date or Distribution
Date.
(b) On each Distribution Date, the Eligible Lender Trustee
shall send to each Certificateholder the statement provided to the Eligible
Lender Trustee by the Administrator pursuant to Section 2(g) of the
Administration Agreement on such Distribution Date.
(c) In the event that any withholding tax is imposed on the
Trust's payment (or allocations of income) to a Certificateholder, such tax
shall reduce the amount otherwise distributable to the Certificateholder in
accordance with this Section. The Eligible Lender Trustee is hereby authorized
and directed to retain from amounts otherwise distributable to the
Certificateholders sufficient funds for the payment of any tax that is legally
owed by the Trust (and such authorization shall not prevent the Eligible Lender
Trustee from contesting any such tax in appropriate proceedings, and withholding
payment of such tax, if permitted by law, pending the outcome of such
proceedings). The amount of any withholding tax imposed with respect to a
Certificateholder shall be treated as cash distributed to such Certificateholder
at the time it is withheld by the Trust to be remitted to the appropriate taxing
authority. If there is a possibility that withholding tax is payable with
respect to a distribution (such as a distribution to a non-U.S.
Certificateholder), the Eligible Lender Trustee in its sole discretion may (but
unless otherwise required by law shall not be obligated to) withhold such
amounts in accordance with this paragraph (c). In the event that a
Certificateholder wishes to apply for a refund of any such withholding tax, the
Eligible Lender Trustee shall reasonably cooperate with such Certificateholder
in making such claim so long as such Certificateholder agrees to reimburse the
Eligible Lender Trustee for any out-of-pocket expenses incurred.
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SECTION 5.02. Method of Payment. Subject to Section 9.01(c),
distributions required to be made to Certificateholders on any Interest Payment
Date or Distribution Date shall be made to each Certificateholder of record on
the preceding Record Date either by wire transfer, in immediately available
funds, to the account of such Certificateholder at a bank or other entity having
appropriate facilities therefor, if such Certificateholder shall have provided
to the Certificate Registrar appropriate written instructions signed by two
authorized officers, if any, at least five Business Days prior to such Interest
Payment Date or Distribution Date and such Certificateholder's Trust
Certificates in the aggregate evidence a denomination of not less than
$1,000,000, or, if not, by check mailed to such Certificateholder at the address
of such Certificateholder appearing in the Certificate Register; provided,
however, that, unless Definitive Certificates have been issued pursuant to
Section 3.13, with respect to Trust Certificates registered on the Record Date
in the name of the nominee of the Clearing Agency (initially, such nominee to be
Cede & Co.), distributions will be made by wire transfer in immediately
available funds to the account designated by such nominee. Notwithstanding the
foregoing, the final distribution in respect of any Trust Certificate (whether
on the Final Maturity Date or otherwise) will be payable only upon presentation
and surrender of such Trust Certificate at the Corporate Trust Office of the
Eligible Lender Trustee or such other location specified in writing to the
Certificateholder thereof.
SECTION 5.03. No Segregation of Moneys; No Interest. Subject
to Section 5.01, moneys received by the Eligible Lender Trustee hereunder need
not be segregated in any manner except to the extent required by law or the
Basic Documents and may be deposited under such general conditions as may be
prescribed by law, and the Eligible Lender Trustee shall not be liable for any
interest thereon.
SECTION 5.04. Accounting and Reports to the Noteholders,
Certificateholders, the Internal Revenue Service and Others. The Eligible Lender
Trustee shall (a) maintain (or cause to be maintained) the books of the Trust on
a calendar year basis on the accrual method of accounting, (b) prepare and
deliver to each Certificateholder (and to each Person who was a
Certificateholder at any time during the applicable calendar year), as may be
required by the Code and applicable Treasury Regulations, such information as
may be required (including Schedule K-1) to enable each such Certificateholder
to prepare its Federal and state income tax returns, (c) prepare and file such
tax returns relating to the Trust (including a partnership information return,
Internal Revenue Service Form 1065), and make such elections as may from time to
time be required or
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appropriate under any applicable state or Federal statute or rule or regulation
thereunder so as to maintain the Trust's characterization as a partnership for
Federal income tax purposes, (d) cause such tax returns to be signed in the
manner required by law and (e) collect or cause to be collected any withholding
tax as described in and in accordance with Section 5.01(c) with respect to
income or distributions to Certificateholders. The Eligible Lender Trustee shall
elect under Section 1278 of the Code to include in income currently any market
discount that accrues with respect to the Financed Student Loans. The Eligible
Lender Trustee shall not make the election provided under Section 754 of the
Code.
SECTION 5.05. Signature on Returns; Tax Matters Partner. (a)
The Company shall sign on behalf of the Trust the tax returns of the Trust.
(b) The Company shall be designated the "tax matters partner"
of the Trust pursuant to Section 6231(a)(7)(A) of the Code and applicable
Treasury Regulations.
SECTION 5.06. Check-The-Box Proposal. If Treasury Regulations
ss. 301.7701-1 through ss. 301.7701-3 are amended such that the Trust would not
be classified as an association taxable as a corporation if the requirements of
Sections 2.07(a), 2.11, 3.10 and 9.02 hereof (collectively, the "Partnership
Qualification Provisions") were no longer applicable and the Trust made any
necessary elections to avoid classification as an association taxable as a
corporation required by such regulations (such an amendment, a "Tax
Characterization Amendment"), the Partnership Qualification Provisions shall no
longer be applicable or part of this Agreement; provided, however, that the
Partnership Qualification Provisions shall no longer be applicable or part of
this Agreement only if the Eligible Lender Trustee first obtains an Opinion of
Counsel stating that (i) a Tax Characterization Amendment has been adopted and
(ii) the deletion of the Partnership Qualification Provisions will not cause the
Trust to be subject to an entity level tax for state or federal income tax
purposes. To the extent the Tax Characterization Amendment requires the Trust to
affirmatively elect to be treated as a partnership, the Depositor, the
Certificateholders and the Eligible Lender Trustee at the discretion and expense
of the Depositor, shall take all actions necessary under such regulations for
the Trust to be treated as a partnership for federal income tax purposes.
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ARTICLE VI
Authority and Duties of Eligible Lender Trustee
SECTION 6.01. General Authority. The Eligible Lender Trustee
is authorized and directed to execute and deliver the Basic Documents to which
the Trust is to be a party and each certificate or other document attached as an
exhibit to or contemplated by the Basic Documents to which the Trust is to be a
party, in each case, in such form as the Depositor shall approve as evidenced
conclusively by the Eligible Lender Trustee's execution thereof, and, on behalf
of the Trust, to direct the Indenture Trustee to authenticate and deliver Class
A-1 Notes in the aggregate principal amount of $252,000,000 and Class A-2 Notes
in the aggregate principal amount of $161,439,000. The Eligible Lender Trustee
is also authorized and directed on behalf of the Trust (i) to acquire and hold
legal title to the Financed Student Loans from the Depositor and (ii) to take
all actions required pursuant to Section 3.02(c) of the Master Servicing
Agreement, and otherwise follow the direction of and cooperate with the Master
Servicer in submitting, pursuing and collecting any claims to and with the
Department with respect to any Interest Subsidy Payments and Special Allowance
Payments relating to the Financed Student Loans.
In addition to the foregoing, the Eligible Lender Trustee is
authorized, but shall not be obligated, to take all actions required of the
Trust pursuant to the Basic Documents. The Eligible Lender Trustee is further
authorized from time to time to take such action as the Administrator directs or
instructs with respect to the Basic Documents and is directed to take such
action to the extent that the Administrator is expressly required pursuant to
the Basic Documents to cause the Eligible Lender Trustee to act.
SECTION 6.02. General Duties. It shall be the duty of the
Eligible Lender Trustee to discharge (or cause to be discharged) all its
responsibilities pursuant to the terms of this Agreement and the other Basic
Documents to which the Trust is a party and to administer the Trust in the
interest of the Certificateholders, subject to and in accordance with the
provisions of this Agreement and the other Basic Documents. Without limiting the
foregoing, the Eligible Lender Trustee shall on behalf of the Trust file and
prove any claim or claims that may exist on behalf of the Trust against the
Depositor in connection with any claims paying procedure as part of an
insolvency or a receivership proceeding involving the Depositor. Notwithstanding
the foregoing, the Eligible Lender Trustee shall be deemed to have discharged
its duties and responsibilities hereunder and under the other Basic Documents to
the extent the
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Administrator has agreed in the Administration Agreement to perform any act or
to discharge any duty of the Eligible Lender Trustee hereunder or under any
other Basic Document, and the Eligible Lender Trustee shall not be held liable
for the default or failure of the Administrator to carry out its obligations
under the Administration Agreement. Except as expressly provided in the Basic
Documents, the Eligible Lender Trustee shall have no obligation to administer,
service or collect the Financed Student Loans or to maintain, monitor or
otherwise supervise the administration, servicing or collection of the Financed
Student Loans.
SECTION 6.03. Action upon Instruction. (a) Subject to Article
IV, Section 7.01 and in accordance with the terms of the Basic Documents, the
Certificateholders may by written instruction direct the Eligible Lender Trustee
in the management of the Trust. Such direction may be exercised at any time by
written instruction of the Certificateholders pursuant to Article IV.
(b) The Eligible Lender Trustee shall not be required to take
any action hereunder or under any other Basic Document if the Eligible Lender
Trustee shall have reasonably determined, or shall have been advised by counsel,
that such action is likely to result in liability on the part of the Eligible
Lender Trustee or is contrary to the terms hereof or of any other Basic Document
or is otherwise contrary to law.
(c) Whenever the Eligible Lender Trustee is unable to
determine the appropriate course of action between alternative courses of action
permitted or required by the terms of this Agreement or under any other Basic
Document, the Eligible Lender Trustee shall promptly give notice (in such form
as shall be appropriate under the circumstances) to the Certificateholders
requesting instruction as to the course of action to be adopted, and to the
extent the Eligible Lender Trustee acts in good faith in accordance with any
written instruction of the Certificateholders received, the Eligible Lender
Trustee shall not be liable on account of such action to any Person. If the
Eligible Lender Trustee shall not have received appropriate instruction within
10 days of such notice (or within such shorter period of time as reasonably may
be specified in such notice or may be necessary under the circumstances) it may,
but shall be under no duty to, take or refrain from taking such action, not
inconsistent with this Agreement or the other Basic Documents, as it shall deem
to be in the best interests of the Certificateholders, and shall have no
liability to any Person for such action or inaction.
(d) In the event that the Eligible Lender Trustee is unsure
as to the application of any provision of this Agreement
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or any other Basic Document or any such provision is ambiguous as to its
application, or is, or appears to be, in conflict with any other applicable
provision, or in the event that this Agreement permits any determination by the
Eligible Lender Trustee or is silent or is incomplete as to the course of action
that the Eligible Lender Trustee is required to take with respect to a
particular set of facts, the Eligible Lender Trustee may give notice (in such
form as shall be appropriate under the circumstances) to the Certificateholders
requesting instruction and, to the extent that the Eligible Lender Trustee acts
or refrains from acting in good faith in accordance with any such instruction
received, the Eligible Lender Trustee shall not be liable, on account of such
action or inaction, to any Person. If the Eligible Lender Trustee shall not have
received appropriate instruction within 10 days of such notice (or within such
shorter period of time as reasonably may be specified in such notice or may be
necessary under the circumstances) it may, but shall be under no duty to, take
or refrain from taking such action, not inconsistent with this Agreement or the
other Basic Documents, as it shall deem to be in the best interests of the
Certificateholders, and shall have no liability to any Person for such action
or inaction.
SECTION 6.04. No Duties Except as Specified in this Agreement,
the Loan Sale Agreement, the Master Servicing Agreement, the Administration
Agreement or in Instructions. The Eligible Lender Trustee shall not have any
duty or obligation to manage, make any payment with respect to, register,
record, sell, service, dispose of or otherwise deal with the Trust Estate, or to
otherwise take or refrain from taking any action under, or in connection with,
any document contemplated hereby to which the Eligible Lender Trustee is a
party, except as expressly provided by the terms of this Agreement, the Loan
Sale Agreement, the Master Servicing Agreement, the Administration Agreement or
in any document or written instruction received by the Eligible Lender Trustee
pursuant to Section 6.03; and no implied duties or obligations shall be read
into this Agreement or any other Basic Document against the Eligible Lender
Trustee. The Eligible Lender Trustee shall have no responsibility for filing any
financing or continuation statement in any public office at any time or to
otherwise perfect or maintain the perfection of any security interest or lien
granted to it hereunder or to prepare or file any Commission filing for the
Trust or to record this Agreement or any other Basic Document. The Eligible
Lender Trustee nevertheless agrees that it will, at its own cost and expense,
promptly take all action as may be necessary to discharge any liens on any part
of the Trust Estate that result from actions by, or claims against, The First
National Bank of Chicago in its individual capacity or as the Eligible Lender
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Trustee that are not related to the ownership or the administration of the Trust
Estate.
SECTION 6.05. No Action Except Under Specified Documents or
Instructions. The Eligible Lender Trustee shall not manage, control, use, sell,
service, dispose of or otherwise deal with any part of the Trust Estate except
(i) in accordance with the powers granted to and the authority conferred upon
the Eligible Lender Trustee pursuant to this Agreement, (ii) in accordance with
the other Basic Documents to which it is a party and (iii) in accordance with
any document or instruction delivered to the Eligible Lender Trustee pursuant to
Section 6.03.
SECTION 6.06. Restrictions. The Eligible Lender Trustee shall
not take any action (a) that is inconsistent with the purposes of the Trust set
forth in Section 2.03 or (b) that, to the actual knowledge of the Eligible
Lender Trustee, would result in the Trust's becoming taxable as a corporation
for Federal income tax purposes. The Certificateholders shall not direct the
Eligible Lender Trustee to take action that would violate the provisions of this
Section.
ARTICLE VII
Concerning the Eligible Lender Trustee
SECTION 7.01. Acceptance of Trusts and Duties. The Eligible
Lender Trustee accepts the trusts hereby created and agrees to perform its
duties hereunder with respect to such trusts but only upon the terms of this
Agreement. The Eligible Lender Trustee also agrees to disburse all moneys
actually received by it constituting part of the Trust Estate upon the terms of
this Agreement and the other Basic Documents. The Eligible Lender Trustee shall
not be answerable or accountable hereunder or under any other Basic Document
under any circumstances, except (i) for its own willful misconduct, bad faith or
negligence or (ii) in the case of the inaccuracy of any representation or
warranty contained in Section 7.03 expressly made by the Eligible Lender
Trustee. In particular, but not by way of limitation (and subject to the
exceptions set forth in the preceding sentence):
(a) the Eligible Lender Trustee shall not be liable for any
error of judgment made by a responsible officer of the Eligible Lender
Trustee;
(b) the Eligible Lender Trustee shall not be liable with
respect to any action taken or omitted to be taken by
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it in accordance with the direction or instructions of the
Administrator or any Certificateholder;
(c) no provision of this Agreement or any other Basic Document
shall require the Eligible Lender Trustee to expend or risk funds or
otherwise incur any financial liability in the performance of any of
its rights or powers hereunder or under any other Basic Document, if
the Eligible Lender Trustee shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured or provided to it;
(d) under no circumstances shall the Eligible Lender Trustee
be liable for indebtedness evidenced by or arising under any of the
Basic Documents, including the principal of and interest on the Notes;
(e) the Eligible Lender Trustee shall not be responsible for
or in respect of the validity or sufficiency of this Agreement or for
the due execution hereof by the Depositor or for the form, character,
genuineness, sufficiency, value or validity of any of the Trust Estate
or for or in respect of the validity or sufficiency of the Basic
Documents, other than the certificate of authentication on the Trust
Certificates, and the Eligible Lender Trustee shall in no event assume
or incur any liability, duty, or obligation to any Noteholder or to any
Certificateholder, other than as expressly provided for herein and in
the other Basic Documents;
(f) the Eligible Lender Trustee shall not be liable for the
action or inaction, default or misconduct of the Administrator, the
Seller, the Depositor, the Indenture Trustee or the Master Servicer
under any of the other Basic Documents or otherwise and the Eligible
Lender Trustee shall have no obligation or liability to perform the
obligations of the Trust under this Agreement or the other Basic
Documents that are required to be performed by the Administrator under
the Administration Agreement, the Indenture Trustee under the Indenture
or the Master Servicer under the Master Servicing Agreement; and
(g) the Eligible Lender Trustee shall be under no obligation
to exercise any of the rights or powers vested in it by this Agreement,
or to institute, conduct or defend any litigation under this Agreement
or otherwise or in relation to this Agreement or any other Basic
Document, at the request, order or direction of any of the Certificate-
holders, unless such Certificateholders have offered to the
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Eligible Lender Trustee security or indemnity satisfactory to it
against the costs, expenses and liabilities that may be incurred by the
Eligible Lender Trustee therein or thereby. The right of the Eligible
Lender Trustee to perform any discretionary act enumerated in this
Agreement or in any other Basic Document shall not be construed as a
duty, and the Eligible Lender Trustee shall not be answerable for other
than its negligence, bad faith or willful misconduct in the performance
of any such act.
SECTION 7.02. Furnishing of Documents. The Eligible Lender
Trustee shall furnish to the Certificateholders promptly upon receipt of a
written request therefor, duplicates or copies of all reports, notices,
requests, demands, certificates, financial statements and any other instruments
furnished to the Eligible Lender Trustee under the Basic Documents.
SECTION 7.03. Representations and Warranties. The Eligible
Lender Trustee hereby represents and warrants to the Depositor, for the benefit
of the Certificateholders, that:
(a) It is a national banking association duly organized and
validly existing in good standing under the laws of the United States.
It has all requisite corporate power and authority to execute, deliver
and perform its obligations under this Agreement.
(b) It has taken all corporate action necessary to authorize
the execution and delivery by it of this Agreement, and this Agreement
will be executed and delivered by one of its officers who is duly
authorized to execute and deliver this Agreement on its behalf.
(c) Neither the execution nor the delivery by it of this
Agreement, nor the consummation by it of the transactions contemplated
hereby nor compliance by it with any of the terms or provisions hereof
will contravene any Federal or state law, governmental rule or
regulation governing the banking or trust powers of the Eligible Lender
Trustee or any judgment or order binding on it, or constitute any
default under its charter documents or by-laws or any indenture,
mortgage, contract, agreement or instrument to which it is a party or
by which any of its properties may be bound.
(d) It is an "eligible lender" as such term is defined in
Section 435(d) of the Higher Education Act, for purposes of holding
legal title to the Financed Student Loans as contemplated by this
Agreement and the other Basic Documents, has obtained a lender
identification number with
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respect to the Trust from the Department and has in effect a Guarantee
Agreement with each of the Guarantors with respect to the Financed
Student Loans.
SECTION 7.04. Reliance; Advice of Counsel. (a) The Eligible
Lender Trustee shall incur no liability to anyone in acting upon any signature,
instrument, direction, notice, resolution, request, consent, order, certificate,
report, opinion, bond, or other document or paper believed by it to be genuine
and believed by it to be signed by the proper party or parties. The Eligible
Lender Trustee may accept a certified copy of a resolution of the board of
directors or other governing body of any corporate party as conclusive evidence
that such resolution has been duly adopted by such body and that the same is in
full force and effect. As to any fact or matter the method of the determination
of which is not specifically prescribed herein, the Eligible Lender Trustee may
for all purposes hereof rely on a certificate, signed by the president or any
vice president or by the treasurer or other authorized officers of the relevant
party, as to such fact or matter and such certificate shall constitute full
protection to the Eligible Lender Trustee for any action taken or omitted to be
taken by it in good faith in reliance thereon.
(b) In the exercise or administration of the trusts hereunder
and in the performance of its duties and obligations under this Agreement or the
other Basic Documents, the Eligible Lender Trustee (i) may act directly or
through its agents or attorneys pursuant to agreements entered into with any of
them, and the Eligible Lender Trustee shall not be liable for the conduct or
misconduct of such agents or attorneys if such agents or attorneys shall have
been selected by the Eligible Lender Trustee with reasonable care, and (ii) may
consult with counsel, accountants and other skilled persons to be selected with
reasonable care and employed by it. The Eligible Lender Trustee shall not be
liable for anything done, suffered or omitted in good faith by it in accordance
with the written opinion or advice of any such counsel, accountants or other
such persons and not contrary to this Agreement or any other Basic Document.
SECTION 7.05. Not Acting in Individual Capacity. Except as
provided in this Article VII, in accepting the trusts hereby created, The First
National Bank of Chicago acts solely as Eligible Lender Trustee hereunder and
not in its individual capacity and all Persons having any claim against the
Eligible Lender Trustee by reason of the transactions contemplated by this
Agreement or any other Basic Document shall look only to the Trust Estate for
payment or satisfaction thereof.
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SECTION 7.06. Eligible Lender Trustee Not Liable for Trust
Certificates or Student Loans. The recitals contained herein and in the Trust
Certificates (other than the signature and countersignature of the Eligible
Lender Trustee on the Trust Certificates and its representations and warranties
in Section 7.03) shall be taken as the statements of the Depositor, and the
Eligible Lender Trustee assumes no responsibility for the correctness thereof.
The Eligible Lender Trustee makes no representations as to the validity or
sufficiency of this Agreement, the Trust Certificates or any other Basic
Document (other than the signature and countersignature of the Eligible Lender
Trustee on the Trust Certificates) or the Notes, or of any Financed Student Loan
or related documents. The Eligible Lender Trustee shall at no time have any
responsibility (or liability except for willfully, negligently or in bad faith
terminating or allowing to be terminated any of the Guarantee Agreements, in a
case where the Eligible Lender Trustee knows of any facts or circumstances which
will or could reasonably be expected to result in any such termination) for or
with respect to the legality, validity, enforceability and eligibility for
Guarantee Payments, Interest Subsidy Payments or Special Allowance Payments, as
applicable, of any Financed Student Loan, or for or with respect to the
sufficiency of the Trust Estate or its ability to generate the payments to be
distributed to Certificateholders under this Agreement or the Noteholders under
the Indenture, including: the existence and contents of any computer or other
record of any Financed Student Loan; the validity of the assignment of any
Financed Student Loan to the Trust; the completeness of any Financed Student
Loan; the performance or enforcement (except as expressly set forth in any Basic
Document) of any Financed Student Loan; the compliance by the Depositor or the
Master Servicer with any warranty or representation made under any Basic
Document or in any related document or the accuracy of any such warranty or
representation or any action or inaction of the Administrator, the Indenture
Trustee or the Master Servicer or any Subservicer taken in the name of the
Eligible Lender Trustee.
SECTION 7.07. Eligible Lender Trustee May Own Trust
Certificates and Notes. The Eligible Lender Trustee in its individual or any
other capacity may become the owner or pledgee of Trust Certificates or Notes
and may deal with the Depositor, the Administrator, the Indenture Trustee, the
Master Servicer and any Subservicer in banking transactions with the same rights
as it would have if it were not Eligible Lender Trustee.
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ARTICLE VIII
Compensation of Eligible Lender Trustee
SECTION 8.01. Eligible Lender Trustee's Fees and Expenses. The
Eligible Lender Trustee shall receive as compensation for its services hereunder
such fees as have been separately agreed upon before the date hereof between the
Depositor and the Eligible Lender Trustee, and the Eligible Lender Trustee shall
be entitled to be reimbursed by the Depositor for its other reasonable expenses
hereunder, including the reasonable compensation, expenses and disbursements of
such agents, representatives, experts and counsel as the Eligible Lender Trustee
may employ in connection with the exercise and performance of its rights and
duties hereunder. The Eligible Lender Trustee shall have no recourse to the
Issuer for its fees and expenses hereunder.
SECTION 8.02. Payments to the Eligible Lender Trustee. Any
amounts paid to the Eligible Lender Trustee pursuant to Section 8.01 hereof or
pursuant to Section 4.03 of the Loan Sale Agreement or pursuant to Section 24 of
the Administration Agreement shall be deemed not to be a part of the Trust
Estate immediately after such payment.
ARTICLE IX
Termination of Trust Agreement
SECTION 9.01. Termination of Trust Agreement. (a) This
Agreement (other than Article VIII) shall terminate and be of no further force
or effect and the Trust shall dissolve upon the earlier of (i) the final
distribution by the Eligible Lender Trustee of all moneys or other property or
proceeds of the Trust Estate in accordance with the terms of the Indenture, the
Master Servicing Agreement and Article V, (ii) the expiration of 21 years from
the death of the last survivor of the descendants of Joseph P. Kennedy, the late
Ambassador of the United States to the Court of St. James's, living on the date
hereof, and (iii) the time provided in Section 9.02. The bankruptcy,
liquidation, dissolution, death or incapacity of any Certificateholder, other
than the Company as described in Section 9.02, shall not (x) operate to
terminate this Agreement or the Trust, nor (y) entitle such Certificateholder's
legal representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of all or any part of the
Trust or Trust Estate nor (z) otherwise affect the rights, obligations and
liabilities of the parties hereto.
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(b) Except as provided in Section 9.01(a), neither the
Depositor, the Company nor any Certificateholder shall be entitled to revoke or
terminate the Trust.
(c) Notice of any termination of the Trust, specifying the
Distribution Date upon which the Certificateholders shall surrender their Trust
Certificates to the Certificate Paying Agent for payment of the final
distribution and cancellation, shall be given promptly by the Eligible Lender
Trustee by letter to Certificateholders mailed within five Business Days of
receipt of notice of such termination from the Administrator given pursuant to
Section 2(b)(vii) of the Administration Agreement, stating (i) the Distribution
Date upon which final payment of the Trust Certificates shall be made upon
presentation and surrender of the Trust Certificates at the office of the
Certificate Paying Agent therein designated, (ii) the amount of any such final
payment and (iii) that the Record Date otherwise applicable to such Distribution
Date is not applicable, payments being made only upon presentation and surrender
of the Trust Certificates at the office of the Certificate Paying Agent therein
specified. The Eligible Lender Trustee shall give such notice to the Certificate
Registrar (if other than the Eligible Lender Trustee) and the Certificate Paying
Agent at the time such notice is given to Certificateholders. Upon presentation
and surrender of the Trust Certificates, the Certificate Paying Agent shall
cause to be distributed to Certificateholders amounts distributable on such
Distribution Date pursuant to Section 5.01.
In the event that all the Certificateholders shall not
surrender their Trust Certificates for cancellation within six months after the
date specified in the above-mentioned written notice, the Eligible Lender
Trustee shall give a second written notice to the remaining Certificateholders
to surrender their Trust Certificates for cancellation and receive the final
distribution with respect thereto. If within one year after the second notice
all the Trust Certificates shall not have been surrendered for cancellation, the
Eligible Lender Trustee may take appropriate steps, or may appoint an agent to
take appropriate steps, to contact the remaining Certificateholders concerning
surrender of their Trust Certificates, and the cost thereof shall be paid out of
the funds and other assets that shall remain subject to this Agreement. Subject
to applicable escheat laws, any funds remaining in the Trust after exhaustion of
such remedies and no later than five years after the first such notice shall be
distributed by the Eligible Lender Trustee to the Depositor. Thereafter,
Certificateholders shall look solely to the Depositor as general unsecured
creditors for payment.
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(d) Upon the winding up of the Trust and after satisfaction of
all obligations of the Trust, the Eligible Lender Trustee shall cause the
Certificate of Trust to be canceled by filing a certificate of cancellation with
the Secretary of State of the State of Delaware in accordance with the
provisions of Section 3810 of the Business Trust Statute and the Trust shall
terminate.
SECTION 9.02. Dissolution upon Bankruptcy of the Company. In
the event that an Insolvency Event shall occur with respect to the Company, this
Agreement shall be terminated in accordance with Section 9.01 and the Trust
shall dissolve 90 days after the date of such Insolvency Event, unless, before
the end of such 90-day period, the Eligible Lender Trustee shall have received
written instructions from (a) Certificateholders (other than the Company)
representing more than 50% of the Certificate Balance (not including the
principal amount of Trust Certificates held by the Company), (b) Noteholders of
Class A-1 Notes representing more than 50% of the Outstanding Amount of the
Class A-1 Notes and (c) Noteholders of Class A-2 Notes representing more than
50% of the Outstanding Amount of the Class A-2 Notes, to the effect that each
such party disapproves of the liquidation of the Financed Student Loans and
termination of the Trust, in which event the Trust shall continue in accordance
with the Basic Documents. Promptly after the occurrence of any Insolvency Event
with respect to the Company, (i) the Company shall give the Indenture Trustee,
the Eligible Lender Trustee and the Rating Agencies written notice of such
Insolvency Event, (ii) the Eligible Lender Trustee shall, upon the receipt of
such written notice from the Company, give prompt written notice to the
Certificateholders and the Indenture Trustee, of the occurrence of such event
and (iii) the Indenture Trustee shall, upon receipt of written notice of such
Insolvency Event from the Eligible Lender Trustee or the Company, give prompt
written notice to the Noteholders of the occurrence of such event; provided,
however, that any failure to give a notice required by this sentence shall not
prevent or delay, in any manner, a termination of the Trust pursuant to the
first sentence of this Section 9.02. Upon a termination pursuant to this
Section, the Eligible Lender Trustee shall direct the Indenture Trustee promptly
to sell the assets of the Trust (other than the Trust Accounts) in a
commercially reasonable manner and on commercially reasonable terms. The
proceeds of such a sale of the assets of the Trust shall be treated as
collections under the Master Servicing Agreement and the Administration
Agreement.
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ARTICLE X
Successor Eligible Lender Trustees and
Additional Eligible Lender Trustees
SECTION 10.01. Eligibility Requirements for Eligible Lender
Trustee. The Eligible Lender Trustee shall at all times be a corporation or
association (i) qualifying as an "eligible lender" as such term is defined in
Section 435(d) of the Higher Education Act for purposes of holding legal title
to the Financed Student Loans, with a valid lender identification number with
respect to the Trust from the Department; (ii) being authorized to exercise
corporate trust powers and hold legal title to the Financed Student Loans; (iii)
having in effect Guarantee Agreements with each of the Guarantors; (iv) having a
combined capital and surplus of at least $50,000,000 and being subject to
supervision or examination by Federal or state authorities; and (v) having (or
having a parent which has) a rating of at least BBB by Standard & Poor's, Baa3
by Moody's and BBB- by Fitch, if rated by Fitch. If the Eligible Lender Trustee
shall publish reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purpose of this Section, the combined capital and surplus of the Eligible Lender
Trustee shall be deemed to be its combined capital and surplus as set forth in
its most recent report of condition so published. In case at any time the
Eligible Lender Trustee shall cease to be eligible in accordance with the
provisions of this Section, the Eligible Lender Trustee shall resign immediately
in the manner and with the effect specified in Section 10.02. In addition, at
all times the Trustee or a co-trustee shall be a Person that satisfies the
requirements of Section 3807(a) of the Business Trust Statute (the "Delaware
Trustee").
SECTION 10.02. Resignation or Removal of Eligible Lender
Trustee. The Eligible Lender Trustee may at any time resign and be discharged
from the trusts hereby created by giving written notice thereof to the
Administrator. Upon receiving such notice of resignation, the Administrator
shall promptly appoint a successor Eligible Lender Trustee meeting the
eligibility requirements of Section 10.01 by written instrument, in duplicate,
one copy of which instrument shall be delivered to the resigning Eligible Lender
Trustee and one copy to the successor Eligible Lender Trustee. If no successor
Eligible Lender Trustee shall have been so appointed and have accepted
appointment within 30 days after the giving of such notice of resignation, the
resigning Eligible Lender Trustee may petition any court of competent
jurisdiction for the appointment of a successor Eligible Lender Trustee;
provided, however, that such right to appoint or to petition for the appointment
of any such successor
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shall in no event relieve the resigning Eligible Lender Trustee from any
obligations otherwise imposed on it under the Basic Documents until such
successor has in fact assumed such appointment.
If at any time the Eligible Lender Trustee shall cease to be
eligible in accordance with the provisions of Section 10.01 and shall fail to
resign after written request therefor by the Administrator, or if at any time
the Eligible Lender Trustee shall be legally unable to act, or an Insolvency
Event with respect to the Eligible Lender Trustee shall have occurred and be
continuing, then the Administrator may remove the Eligible Lender Trustee. If
the Administrator shall remove the Eligible Lender Trustee under the authority
of the immediately preceding sentence, the Administrator shall promptly appoint
a successor Eligible Lender Trustee by written instrument, in duplicate, one
copy of which instrument shall be delivered to the outgoing Eligible Lender
Trustee so removed and one copy to the successor Eligible Lender Trustee and
payment of all fees owed to the outgoing Eligible Lender Trustee.
Any resignation or removal of the Eligible Lender Trustee and
appointment of a successor Eligible Lender Trustee pursuant to any of the
provisions of this Section shall not become effective until acceptance of
appointment by the successor Eligible Lender Trustee pursuant to Section 10.03
and payment of all fees and expenses owed to the outgoing Eligible Lender
Trustee. The Administrator shall provide notice of such resignation or removal
of the Eligible Lender Trustee and to each of the Rating Agencies.
SECTION 10.03. Successor Eligible Lender Trustee. Any
successor Eligible Lender Trustee appointed pursuant to Section 10.02 shall
execute, acknowledge and deliver to the Administrator and to its predecessor
Eligible Lender Trustee an instrument accepting such appointment under this
Agreement, and thereupon the resignation or removal of the predecessor Eligible
Lender Trustee shall become effective and such successor Eligible Lender
Trustee, without any further act, deed or conveyance, shall become fully vested
with all the rights, powers, duties and obligations of its predecessor under
this Agreement, with like effect as if originally named as Eligible Lender
Trustee. The predecessor Eligible Lender Trustee shall upon payment of its fees
and expenses deliver to the successor Eligible Lender Trustee all documents,
statements, moneys and properties held by it under this Agreement and shall
assign, if permissible, to the successor Eligible Lender Trustee the lender
identification number obtained from the Department on behalf of the Trust; and
the Administrator and the predecessor Eligible Lender Trustee shall execute and
deliver such instruments and do such other
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things as may reasonably be required for fully and certainly vesting and
confirming in the successor Eligible Lender Trustee all such rights, powers,
duties and obligations.
No successor Eligible Lender Trustee shall accept appointment
as provided in this Section unless at the time of such acceptance such successor
Eligible Lender Trustee shall be eligible pursuant to Section 10.01.
Upon acceptance of appointment by a successor Eligible Lender
Trustee pursuant to this Section, the Administrator shall mail notice of the
successor of such Eligible Lender Trustee to all Certificateholders, the
Indenture Trustee, the Noteholders and the Rating Agencies. If the Administrator
shall fail to mail such notice within 10 days after acceptance of appointment by
the successor Eligible Lender Trustee, the successor Eligible Lender Trustee
shall cause such notice to be mailed at the expense of the Administrator.
SECTION 10.04. Merger or Consolidation of Eligible Lender
Trustee. Any corporation into which the Eligible Lender Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Eligible Lender
Trustee shall be a party, or any corporation succeeding to all or substantially
all the corporate trust business of the Eligible Lender Trustee, shall, without
the execution or filing of any instrument or any further act on the part of any
of the parties hereto, anything herein to the contrary notwithstanding, be the
successor of the Eligible Lender Trustee hereunder; provided that such
corporation shall be eligible pursuant to Section 10.01; provided further that
the Eligible Lender Trustee shall mail notice of such merger or consolidation to
the Rating Agencies not less than 10 Business Days prior to the closing date of
such merger or consolidation.
SECTION 10.05. Appointment of Co-Eligible Lender Trustee or
Separate Eligible Lender Trustee. Notwithstanding any other provisions of this
Agreement, at any time, for the purpose of meeting any legal requirements of any
jurisdiction in which any part of the Trust may at the time be located, the
Administrator and the Eligible Lender Trustee acting jointly shall have the
power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Eligible Lender Trustee, which, except in the case of
any Delaware Trustee, shall meet the eligibility requirements of clauses (i)
through (iii) of Section 10.01, to act as co-trustee, jointly with the Eligible
Lender Trustee, or separate trustee or separate trustees, of all or any part of
the Trust Estate, and to vest in such Person, in such capacity, such title to
the Trust
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Estate, or any part thereof, and, subject to the other provisions of this
Section, such powers, duties, obligations, rights and trusts as the
Administrator and the Eligible Lender Trustee may consider necessary or
desirable. If the Administrator shall not have joined in such appointment within
15 days after the receipt by it of a request so to do, the Eligible Lender
Trustee alone shall have the power to make such appointment. Pursuant to the
Co-Trustee Agreement, dated as of November 1, 1996, between The First National
Bank of Chicago and First Chicago Delaware Inc., the Eligible Lender Trustee
shall appoint First Chicago Delaware Inc. as a co-trustee hereunder for the
purpose of his acting as Delaware Trustee and such agreement is hereby
incorporated herein by reference. The Delaware Trustee is appointed to serve as
the trustee of the Trust in the State of Delaware for the sole purpose of
satisfying the requirement of Section 3807 of the Business Trust Statute that
the Trust have at least one trustee with a principal place of business in
Delaware. It is understood and agreed by the parties hereto and the
Certificateholders that the Delaware Trustee shall have none of the duties or
liabilities of the Eligible Lender Trustee. The duties of the Delaware Trustee
shall be limited to (a) accepting legal process served on the Trust in the State
of Delaware and (b) the execution of any certificates required to be filed with
the Delaware Secretary of State which the Delaware Trustee is required to
execute under Section 3811 of the Business Trust Statute. To the extent that, at
law or in equity, the Delaware Trustee has duties (including fiduciary duties)
and liabilities relating thereto to the Trust or the Certificateholders, it is
hereby understood and agreed by the other parties hereto and the
Certificateholders that such duties and liabilities are replaced by the duties
and liabilities of the Delaware Trustee expressly set forth in this Agreement.
If the Delaware Trustee shall die, become incapable of acting, resign or be
removed, unless the Eligible Lender Trustee is qualified to act as Delaware
Trustee, a successor co-trustee shall promptly be appointed in the manner
specified in this Section 10.05 to act as Delaware Trustee. No co-trustee or
separate trustee under this Agreement shall be required to meet the terms of
eligibility as a successor trustee pursuant to clauses (iv) and (v) of Section
10.01 and no notice of the appointment of any co-trustee or separate trustee
shall be required pursuant to Section 10.03.
Each separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties, and obligations conferred or
imposed upon the Eligible Lender Trustee shall be conferred upon and
exercised or performed by the Eligible Lender Trustee and such separate
trustee or co-trustee
33
<PAGE>
jointly (it being understood that such separate trustee or co-trustee
is not authorized to act separately without the Eligible Lender Trustee
joining in such act), except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed,
the Eligible Lender Trustee shall be incompetent or unqualified to
perform such act or acts, in which event such rights, powers, duties,
and obligations (including the holding of title to the Trust or any
portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, solely at the
direction of the Eligible Lender Trustee;
(ii) no trustee under this Agreement shall be personally liable by
reason of any act or omission of any other trustee under this
Agreement; and
(iii) the Administrator and the Eligible Lender Trustee acting
jointly may at any time accept the resignation of or remove any
separate trustee or co-trustee.
Any notice, request or other writing given to the Eligible
Lender Trustee shall be deemed to have been given to each of the then separate
trustees and co-trustees, as effectively as if given to each of them. Every
instrument appointing any separate trustee or co-trustee shall refer to this
Agreement and the conditions of this Article. Each separate trustee and
co-trustee, upon its acceptance of the trusts conferred, shall be vested with
the estates or property specified in its instrument of appointment, either
jointly with the Eligible Lender Trustee or separately, as may be provided
therein, subject to all the provisions of this Agreement, specifically including
every provision of this Agreement relating to the conduct of, affecting the
liability of, or affording protection to, the Eligible Lender Trustee. Each such
instrument shall be filed with the Eligible Lender Trustee and a copy thereof
given to the Administrator.
Any separate trustee or co-trustee may at any time appoint the
Eligible Lender Trustee as its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Agreement on its behalf and in its name. If any separate trustee
or co-trustee shall die, become incapable of acting, resign or be removed, all
its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Eligible Lender Trustee, to the extent permitted by law,
without the appointment of a new or successor trustee, except as otherwise
provided in this Section 10.05 in regard to the Delaware Trustee.
34
<PAGE>
ARTICLE XI
Miscellaneous
SECTION 11.01. Supplements and Amendments. This Agreement may
be amended by the Depositor, the Company and the Eligible Lender Trustee, with
prior written notice to the Rating Agencies, without the consent of any of the
Noteholders or the Certificateholders, to cure any ambiguity, to correct or
supplement any provisions in this Agreement or for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions in
this Agreement or of modifying in any manner the rights of the Noteholders or
the Certificateholders or in connection with a merger or consolidation of the
Depositor or a transfer of properties or assets of the Depositor in a
transaction permitted under the Basic Documents; provided, however, that such
action shall not, as evidenced by an Opinion of Counsel, adversely affect in any
material respect the interests of any Noteholder or Certificateholder.
This Agreement may also be amended from time to time by the
Depositor, the Company and the Eligible Lender Trustee, with prior written
notice to the Rating Agencies, (i) with the consent of the Noteholders of Notes
evidencing not less than a majority of the Outstanding Amount of the Notes and
(ii) the Certificateholders of Certificates evidencing not less than a majority
of the Certificate Balance, for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement or
of modifying in any manner the rights of the Noteholders or the
Certificateholders; provided, however, that no such amendment shall (a) increase
or reduce in any manner the amount of, or accelerate or delay the timing of,
collections of payments on Financed Student Loans or distributions that shall be
required to be made for the benefit of the Noteholders or the Certificateholders
or (b) reduce the aforesaid percentage of the Outstanding Amount of the Notes
and the Certificate Balance required to consent to any such amendment, without
the consent of all the outstanding Noteholders and Certificateholders.
The Eligible Lender Trustee shall furnish 10 Business Days'
prior written notification of the substance of any such amendment or consent to
each Certificateholder, the Indenture Trustee and each of the Rating Agencies.
It shall not be necessary for the consent of
Certificateholders, the Noteholders or the Indenture Trustee pursuant to this
Section to approve the particular form of any proposed amendment or consent, but
it shall be sufficient if such
35
<PAGE>
consent shall approve the substance thereof. The manner of obtaining such
consents (and any other consents of Certificateholders provided for in this
Agreement or in any other Basic Document) and of evidencing the authorization of
the execution thereof by Certificateholders shall be subject to such reasonable
requirements as the Eligible Lender Trustee may prescribe.
Promptly after the execution of any amendment to the
Certificate of Trust, the Eligible Lender Trustee shall cause the filing of such
amendment with the Secretary of State of the State of Delaware. The Eligible
Lender Trustee shall furnish the Rating Agencies with 10 Business Days' prior
written notice of any amendment to the Certificate of Trust.
Prior to the execution of any amendment to this Agreement, the
Eligible Lender Trustee shall be entitled to receive and rely upon an Opinion of
Counsel stating that the execution of such amendment is authorized or permitted
by this Agreement. The Eligible Lender Trustee may, but shall not be obligated
to, enter into any such amendment which affects the Eligible Lender Trustee's
own rights, duties or immunities under this Agreement or otherwise.
SECTION 11.02. No Legal Title to Trust Estate in
Certificateholders. The Certificateholders shall not have legal title to any
part of the Trust Estate. The Certificateholders shall be entitled to receive
distributions with respect to their undivided beneficial ownership interest
therein only in accordance with Articles V and IX. No transfer, by operation of
law or otherwise, of any right, title, or interest of the Certificateholders to
and in their beneficial ownership interest in the Trust Estate shall operate to
terminate this Agreement or the trusts hereunder or entitle any transferee to an
accounting or to the transfer to it of legal title to any part of the Trust
Estate.
SECTION 11.03. Limitations on Rights of Others. Except for
Section 2.07, the provisions of this Agreement are solely for the benefit of the
Eligible Lender Trustee, the Depositor, the Company, the Certificateholders, the
Administrator and, to the extent expressly provided herein, the Indenture
Trustee and the Noteholders, and nothing in this Agreement (other than Section
2.07), whether express or implied, shall be construed to give to any other
Person any legal or equitable right, remedy or claim in the Trust Estate or
under or in respect of this Agreement or any covenants, conditions or provisions
contained herein.
36
<PAGE>
SECTION 11.04. Notices. (a) Unless otherwise expressly
specified or permitted by the terms hereof, all notices shall be in writing (or
in the form of facsimile notice, followed by written notice) and shall be deemed
given upon receipt by the intended recipient of three Business Days after
mailing if mailed by certified mail, postage prepaid (except that notice to the
Eligible Lender Trustee shall be deemed given only upon actual receipt by the
Eligible Lender Trustee), if to the Eligible Lender Trustee, addressed to its
Corporate Trust Office; if to the Depositor, addressed to Signet Bank, 7 North
8th Street, Richmond, Virginia 23219, Attention: Treasurer, telephone: (804)
771-7060; facsimile: (804) 771-7936; if to the Company, addressed to Signet
Student Loan Corporation, 7 North 8th Street, Richmond, Virginia 23219,
Attention: President, telephone: (804) 771-7814, with a copy to Signet Bank, 7
North 8th Street, Richmond, Virginia 23219 or, as to each party, at such other
address as shall be designated by such party in a written notice to each other
party.
(b) Any notice required or permitted to be given to a
Certificateholder shall be given by first-class mail, postage prepaid, at the
address of such Certificateholder as shown in the Certificate Register. Any
notice so mailed within the time prescribed in this Agreement shall be
conclusively presumed to have been duly given, whether or not the
Certificateholder receives such notice.
SECTION 11.05. Severability. Any provision of this Agreement
that is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, 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.
SECTION 11.06. Separate Counterparts. This Agreement may be
executed by the parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all such counterparts shall
together constitute but one and the same instrument.
SECTION 11.07. Successors and Assigns. All covenants and
agreements contained herein shall be binding upon, and inure to the benefit of,
the Depositor, the Company, the Eligible Lender Trustee and their respective
successors and each Certificateholder and its successors and permitted assigns,
all as herein provided. Any request, notice, direction, consent, waiver or other
instrument or action by a Certificateholder shall bind the successors and
assigns of such Certificateholder.
37
<PAGE>
SECTION 11.08. No Petition. (a) The Depositor will not at any
time institute against the Trust or the Company any bankruptcy proceedings under
any United States Federal or state bankruptcy or similar law in connection with
any obligations relating to the Trust Certificates, the Notes, this Agreement or
any of the other Basic Documents.
(b) The Eligible Lender Trustee, by entering into this
Agreement, each Certificateholder, by accepting a Trust Certificate, and the
Indenture Trustee and each Noteholder by accepting the benefits of this
Agreement, hereby covenant and agree that they will not at any time institute
against the Depositor, the Company or the Trust, or join in any institution
against the Depositor, the Company or the Trust of, any bankruptcy,
reorganization, arrangement, insolvency, receivership or liquidation
proceedings, or other proceedings under any United States Federal or state
bankruptcy or similar law in connection with any obligations relating to the
Trust Certificates, the Notes, this Agreement or any of the other Basic
Documents.
SECTION 11.09. No Recourse. Each Certificateholder by
accepting a Trust Certificate acknowledges that such Certificateholder's Trust
Certificates represent beneficial interests in the Trust only and do not
represent interests in or obligations of the Seller, the Master Servicer, any
Subservicer, the Depositor, the Company, the Administrator, the Eligible Lender
Trustee, the Indenture Trustee or any Affiliate thereof or any officer, director
or employee of any thereof and no recourse may be had against such parties or
their assets, except as may be expressly set forth or contemplated in this
Agreement, the Trust Certificates or the other Basic Documents.
SECTION 11.10. Headings. The headings of the various
Articles and Sections herein are for convenience of reference only and shall not
define or limit any of the terms or provisions hereof.
SECTION 11.11. Governing Law. This Agreement shall be
construed in accordance with the laws of the State of Delaware, 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.
38
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed by their respective officers hereunto duly
authorized, as of the day and year first above written.
THE FIRST NATIONAL BANK OF CHICAGO,
as Eligible Lender Trustee,
by /s/ BARBARA G. GROSSE
----------------------------
Name: Barbara G. Grosse
Title: Assistant Vice President
SIGNET BANK,
Depositor,
by /s/ SUZANNE BACHMAN
-----------------------------
Name: SUZANNE BACHMAN
Title: SR. VICE PRESIDENT
SIGNET STUDENT LOAN CORPORATION
by /s/ SUZANNE BACHMAN
----------------------------
Name:SUZANNE BACHMAN
Title: SR. VICE PRESIDENT
39
<PAGE>
EXHIBIT A
TO THE TRUST AGREEMENT
[FORM OF TRUST CERTIFICATE]
SEE REVERSE FOR CERTAIN DEFINITIONS
Unless this Trust Certificate is presented by an authorized
representative of The Depository Trust Company, a New York Corporation ("DTC"),
to the Issuer (as defined below) or its agent for registration of transfer,
exchange or payment, and any certificate issued is registered in the name of
Cede & Co. or in such other name as is requested by an authorized representative
of DTC (and any payment is made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as
the registered owner hereof, Cede & Co., has an interest herein.
THIS TRUST CERTIFICATE MAY NOT BE ACQUIRED BY OR FOR THE ACCOUNT OF A
BENEFIT PLAN (AS DEFINED BELOW). THIS TRUST CERTIFICATE IS NOT GUARANTEED OR
INSURED BY ANY GOVERNMENTAL AGENCY.
[THIS TRUST CERTIFICATE IS NONTRANSFERABLE EXCEPT IN ACCORDANCE WITH
SECTION 3.10 OF THE TRUST AGREEMENT.](1)
NUMBER
R- $_________________________
CUSIP NO. 82668P AC9
SIGNET STUDENT LOAN TRUST 1996-A
FLOATING RATE ASSET BACKED CERTIFICATE
evidencing a fractional undivided interest in the Trust, as defined
below, the property of which includes a pool of student loans sold to
the Trust by Signet Bank.
(This Trust Certificate does not represent an interest in or obligation
of Signet Bank, the Company (as defined below), the Master Servicer,
the Eligible Lender Trustee (as defined
_______________________
(1) To be included only on the Trust Certificates representing the
1% minimum required to be retained by the Company and any Trust
Certificates issued in exchange therefor.
<PAGE>
below) or any of their respective affiliates, except to the extent
described below.)
THIS CERTIFIES THAT is the
registered owner of dollars non-assessable,
fully-paid, fractional undivided interest in the Signet Student Loan Trust
1996-A (the "Trust"), a trust formed under the laws of the State of Delaware by
Signet Bank, a Virginia banking corporation (the "Depositor"). The Trust was
created pursuant to a Trust Agreement dated as of November 1, 1996 (the "Trust
Agreement"), among the Depositor, Signet Student Loan Corporation, a Virginia
corporation (the "Company"), and The First National Bank of Chicago, a national
banking association, not in its individual capacity but solely as eligible
lender trustee on behalf of the Trust (the "Eligible Lender Trustee"), a summary
of certain of the pertinent provisions of which is set forth below. To the
extent not otherwise defined herein, the capitalized terms used herein have the
meanings assigned to them in Appendix A to the Administration Agreement (the
"Administration Agreement") dated as of November 1, 1996, among the Trust,
Signet Bank, as Administrator and The Bank of New York, as Indenture Trustee;
such Appendix A also contains rules as to usage that shall be applicable herein.
This Certificate is one of the duly authorized Certificates
designated as "Floating Rate Asset Backed Certificates" (herein called the
"Trust Certificates") issued under the Indenture dated as of November 1, 1996,
between the Trust and The Bank of New York, a New York banking corporation, as
Indenture Trustee, are two classes of Notes designated as "Floating Rate Class
A-1 Asset Backed Notes" and "Floating Rate Class A-2 Asset Backed Notes"
(collectively, the "Notes"). This Trust Certificate is issued under and is
subject to the terms, provisions and conditions of the Trust Agreement, to which
Trust Agreement the holder of this Trust Certificate by virtue of the acceptance
hereof assents and by which such holder is bound. The property of the Trust
includes a pool of student loans (the "Financed Student Loans"), all moneys
received thereunder after the Cutoff Date, certain bank accounts and the
proceeds thereof and certain other rights under the Trust Agreement, the Loan
Sale Agreement and the Master Servicing Agreement and all proceeds of the
foregoing. The rights of the holders of the Trust Certificates to the assets of
the Trust are subordinated to the rights of the holders of the Notes, as set
forth in the Administration Agreement.
Under the Trust Agreement, there will be distributed on the
twenty-fifth day of each month, or if such twenty-fifth day is not a Business
Day, the next succeeding Business Day (each an "Interest Payment Date" and each
Interest Payment Date in each
A-2
<PAGE>
January, April, July and October also a "Distribution Date"), commencing on
January 27, 1997, to the person in whose name this Trust Certificate is
registered at the close of business on the twenty-fourth day of the calendar
month in which such Interest Payment Date or Distribution Date occurs (the
"Record Date") such Certificateholder's fractional undivided interest in the
amount to be distributed to Certificateholders on such Interest Payment Date or
Distribution Date pursuant to the Administration Agreement.
Each holder of this Trust Certificate acknowledges and agrees
that its rights to receive distributions in respect of this Trust Certificate
from Monthly Available Funds, Available Funds and amounts on deposit in the
Reserve Account are subordinated to the rights of the Noteholders as described
in the Administration Agreement and the Indenture.
It is the intent of the Seller, the Master Servicer, the
Depositor, the Company, the Administrator, the Certificateholders and the
Certificate Owners that, for purposes of Federal income, state and local income
and franchise and any other income taxes, the Trust will be treated as a
partnership and the Certificateholders (including each of the Depositor and the
Company in its capacity as recipient of distributions from the Reserve Account)
will be treated as partners in that partnership. The Company and the other
Certificateholders by acceptance of a Trust Certificate (and the Certificate
Owners by acceptance of a beneficial interest in a Trust Certificate), agree to
treat, and to take no action inconsistent with the treatment of, the Trust
Certificates for such tax purposes as partnership interests in the Trust.
Each Certificateholder or Certificate Owner, by its acceptance
of a Trust Certificate or, in the case of a Certificate Owner, a beneficial
interest in a Trust Certificate, covenants and agrees that such
Certificateholder or Certificate Owner, as the case may be, will not at any time
institute against the Depositor, the Company or the Trust, or join in any
institution against the Depositor, the Company or the Trust of, any bankruptcy,
reorganization, arrangement, insolvency, receivership or liquidation
proceedings, or other proceedings under any United States Federal or state
bankruptcy or similar law in connection with any obligations relating to the
Trust Certificates, the Notes, the Trust Agreement or any of the other Basic
Documents.
Distributions on this Trust Certificate will be made as
provided in the Trust Agreement by the Eligible Lender Trustee by wire transfer
or by check mailed to the Certificateholder of record in the Certificate
Register without the presentation or
A-3
<PAGE>
surrender of this Trust Certificate or the making of any notation hereon, except
that with respect to Trust Certificates registered on the Record Date in the
name of the nominee of the Clearing Agency, unless Definitive Certificates have
been issued (initially, such nominee to be Cede & Co.), payments will be made by
wire transfer in immediately available funds to the account designated by such
nominee. Except as otherwise provided in the Trust Agreement and notwithstanding
the above, the final distribution on this Trust Certificate will be made after
due notice by the Eligible Lender Trustee of the pendency of such distribution
and only upon presentation and surrender of this Trust Certificate at the office
or agency maintained for the purpose by the Eligible Lender Trustee in the
Borough of Manhattan, The City of New York.
Reference is hereby made to the further provisions of this
Trust Certificate set forth on the reverse hereof, which further provisions
shall for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon shall have
been executed by an authorized officer of the Eligible Lender Trustee or its
authenticating agent, by manual signature, this Trust Certificate shall not
entitle the holder hereof to any benefit under the Trust Agreement, the Loan
Sale Agreement, the Master Servicing Agreement or the Administration Agreement
or be valid for any purpose.
IN WITNESS WHEREOF, the Eligible Lender Trustee on behalf of
the Trust and not in its individual capacity has caused this Trust Certificate
to be duly executed as of the date set forth below.
SIGNET STUDENT LOAN TRUST 1996-A
by
THE FIRST NATIONAL BANK OF CHICAGO,
as Eligible Lender Trustee,
by
-------------------------------
Authorized Signatory
Date: [ ], ____
A-4
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Trust Certificates referred to in the within-mentioned Trust
Agreement.
THE FIRST NATIONAL BANK OF CHICAGO,
as Eligible Lender Trustee,
by
-------------------------------
Authorized Signatory
OR
THE FIRST NATIONAL BANK OF CHICAGO,
as Eligible Lender Trustee,
by
FIRST CHICAGO TRUST COMPANY OF NEW
YORK, as Authenticating Agent,
by
------------------------------
Authorized Signatory
Date: [ ], ____
A-5
<PAGE>
[Reverse of Trust Certificate]
The Trust Certificates do not represent an obligation of, or
an interest in, the Seller, the Master Servicer, the Depositor, the Company, the
Administrator, the Eligible Lender Trustee or any affiliates of any of them, and
no recourse may be had against such parties or their assets, except as may be
expressly set forth or contemplated herein, in the Trust Agreement or in the
other Basic Documents. In addition, this Trust Certificate is not guaranteed by
any governmental agency or instrumentality and is limited in right of payment to
certain collections with respect to the Financed Student Loans (and certain
other amounts), all as more specifically set forth in the Master Servicing
Agreement and the Administration Agreement. A copy of each of the Master
Servicing Agreement, the Administration Agreement, the Loan Sale Agreement and
the Trust Agreement may be examined during normal business hours at the
principal office of the Seller, and at such other places, if any, designated by
the Seller, by any Certificateholder upon request.
The Trust Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the Company and the rights of the
Certificateholders under the Trust Agreement at any time by the Depositor, the
Company and the Eligible Lender Trustee with the consent of the holders of the
Notes and the Trust Certificates each voting as a class evidencing not less than
a majority of the outstanding principal balance of the Notes and the Certificate
Balance. Any such consent by the holder of this Trust Certificate shall be
conclusive and binding on such holder and on all future holders of this Trust
Certificate and of any Trust Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Trust Certificate. The Trust Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the holders of
any of the Trust Certificates.
As provided in the Trust Agreement and subject to certain
limitations therein set forth, the transfer of this Trust Certificate is
registerable in the Certificate Register upon surrender of this Certificate for
registration of transfer at the offices or agencies maintained by The First
National Bank of Chicago in its capacity as Certificate Registrar, or by any
successor Certificate Registrar, in the Borough of Manhattan, The City of New
York, accompanied by a written instrument of transfer in form satisfactory to
the Eligible Lender Trustee and the Certificate Registrar duly executed by the
holder hereof or such holder's attorney duly authorized in writing, and
thereupon one or more new Trust Certificates of authorized denominations
A-6
<PAGE>
evidencing the same aggregate interest in the Trust will be issued to the
designated transferee.
The Trust Certificates are issuable only as registered Trust
Certificates without coupons in denominations of $1,000 or in integral multiples
of $1,000 in excess thereof; provided, however, that the Trust Certificates
issued to the Company may be issued in such denominations as to include any
residual amount of the Certificate Balance. As provided in the Trust Agreement
and subject to certain limitations therein set forth, Trust Certificates are
exchangeable for new Trust Certificates of authorized denominations evidencing
the same aggregate denomination, as requested by the holder surrendering the
same. No service charge will be made for any such registration of transfer or
exchange, but the Eligible Lender Trustee or the Certificate Registrar may
require payment of a sum sufficient to cover any tax or governmental charge
payable in connection therewith.
The Eligible Lender Trustee, the Certificate Registrar and any
agent of the Eligible Lender Trustee or the Certificate Registrar may treat the
person in whose name this Trust Certificate is registered as the owner hereof
for all purposes, and neither the Eligible Lender Trustee nor the Certificate
Registrar or any such agent shall be affected by any notice to the contrary.
The Trust Certificates (including any beneficial interests
therein) may not be acquired by or for the account of (i) an employee benefit
plan (as defined in Section 3(3) of ERISA) that is subject to the provisions of
Title I of ERISA, (ii) a plan described in Section 4975(e)(1) of the Internal
Revenue Code of 1986, as amended, or (iii) any entity whose underlying assets
include plan assets by reason of a plan's investment in the entity (a "Benefit
Plan"). By accepting and holding this Trust Certificate, the Holder and Owner
hereof shall be deemed to have represented and warranted that it is not a
Benefit Plan.
The obligations and responsibilities created by the Trust
Agreement and the Trust created thereby shall terminate upon the payment to
Certificateholders of all amounts required to be paid to them pursuant to the
Trust Agreement and the Master Servicing Agreement and the disposition of all
property held as part of the Trust. The Seller may at its option purchase the
corpus of the Trust at a price specified in the Loan Sale Agreement, and such
purchase of the Financed Student Loans and other property of the Trust will
effect early retirement of the Trust Certificates; however, such right of
purchase is exercisable only as of any Distribution Date on or after the date
A-7
<PAGE>
on which the Pool Balance is less than or equal to 10% of the sum of the Initial
Pool Balance and the Initial Pre-Funded Amount as of the Closing Date. In
addition, the Financed Student Loans will be subject to auction on or after the
January 2007 Distribution Date as and to the extent provided in the Indenture,
and the proceeds of any such auction will be applied to effect early retirement
of the Notes and Trust Certificates. No assurance can be given as to whether the
Indenture Trustee will be successful in selling the Financed Student Loan in an
auction on the January 2007 Distribution Date or any subsequent Distribution
Date.
This Trust Certificate shall be construed in accordance with
the laws of the State of Delaware, 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.
A-8
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and
transfers unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
________________________________________________________________________________
(Please print or type name and address, including postal zip
code, of assignee)
________________________________________________________________________________
the within Trust Certificate, and all rights thereunder, hereby
irrevocably constituting and appointing
______________________________________________________ Attorney to transfer
said Trust Certificate on the books of the Certificate Registrar, with full
power of substitution in the premises.
Dated:
______________________________*
Signature Guaranteed:
____________________________*
* NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Trust Certificate in every particular,
without alteration, enlargement or any change whatever. Such signature must be
guaranteed by a member firm of the New York Stock Exchange or a commercial bank
or trust company.
A-9
<PAGE>
EXHIBIT B
TO THE TRUST AGREEMENT
Certificate Depository Agreement
<PAGE>
EXHIBIT C
TO THE TRUST AGREEMENT
CERTIFICATE OF TRUST OF
SIGNET STUDENT LOAN TRUST 1996-A
THIS Certificate of Trust of Signet Student Loan Trust 1996-A
(the "Trust"), dated as of December 26, 1996, is being duly executed and filed
by The First National Bank of Chicago, a national banking association, and First
Chicago Delaware, Inc., an individual, as trustees, to form a business trust
under the Delaware Business Trust Act (12 Del. Code, ss. 3801 et seq.).
1. Name. The name of the business trust formed hereby is SIGNET
STUDENT LOAN TRUST 1996-A.
2. Delaware Trustee. The name and business address of the
trustee of the Trust resident in the State of Delaware is First Chicago
Delaware, Inc., 300 King Street, Wilmington, Delaware 19801.
3. This Certificate of Trust will be effective December 27,
1996.
4. This Certificate may be executed simultaneously in any number
of counterparts, each of which counterparts shall be deemed to be an original,
and all of which shall constitute but one and the same instrument.
<PAGE>
IN WITNESS WHEREOF, the undersigned, being the sole trustees
of the Trust, have executed this Certificate of Trust as of the date first above
written.
THE FIRST NATIONAL BANK OF CHICAGO,
not in its individual capacity but
solely as trustee of the Trust.
By ________________________________
Name: John R. Prendiville
Title: Vice President
FIRST CHICAGO DELAWARE, INC.,
not in its individual
capacity but solely as
co-trustee of the Trust.
By________________________________
Name: Richard D. Manella
Title: Vice President
__________________________________
C-2
Exhibit 4.2
EXECUTION COPY
================================================================================
INDENTURE
between
SIGNET STUDENT LOAN TRUST 1996-A,
as Issuer
and
THE BANK OF NEW YORK,
not in its individual capacity but
solely as Indenture Trustee
Dated as of November 1, 1996
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
Definitions and Usage
SECTION 1.01. Definitions and Usage........................................ 2
SECTION 1.02. Incorporation by Reference of Trust
Indenture Act................................................ 2
ARTICLE II
The Notes
SECTION 2.01. Form......................................................... 3
SECTION 2.02. Execution, Authentication and Delivery....................... 3
SECTION 2.03. Temporary Notes.............................................. 4
SECTION 2.04. Registration; Registration of Transfer and
Exchange..................................................... 4
SECTION 2.05. Mutilated, Destroyed, Lost or Stolen Notes................... 6
SECTION 2.06. Persons Deemed Owner......................................... 7
SECTION 2.07. Payment of Principal and Interest;
Defaulted Interest; Noteholders'
Interest LIBOR Carryover..................................... 7
SECTION 2.08. Cancellation................................................. 9
SECTION 2.09. Release of Collateral......................................... 9
SECTION 2.10. Book-Entry Notes............................................. 10
SECTION 2.11. Notices to Clearing Agency................................... 11
SECTION 2.12. Definitive Notes............................................. 11
ARTICLE III
Covenants
SECTION 3.01. Payment to Noteholders....................................... 12
SECTION 3.02. Maintenance of Office or Agency.............................. 12
SECTION 3.03. Money for Payments To Be Held in Trust....................... 12
SECTION 3.04. Existence.................................................... 14
SECTION 3.05. Protection of Indenture Trust Estate......................... 15
SECTION 3.06. Opinions as to Indenture Trust Estate........................ 15
SECTION 3.07. Performance of Obligations;
Servicing of Student Loans................................... 16
SECTION 3.08. Negative Covenants........................................... 19
SECTION 3.09. Annual Statement as to Compliance............................ 20
SECTION 3.10. Issuer May Consolidate, etc.,
Only on Certain Terms........................................ 20
<PAGE>
SECTION 3.11. Successor or Transferee...................................... 22
SECTION 3.12. No Other Business............................................ 22
SECTION 3.13. No Borrowing................................................. 22
SECTION 3.14. Obligations of Master Servicer and
Administrator................................................ 22
SECTION 3.15. Guarantees, Loans, Advances and
Other Liabilities............................................ 23
SECTION 3.16. Capital Expenditures......................................... 23
SECTION 3.17. Restricted Payments.......................................... 23
SECTION 3.18. Notice of Events of Default.................................. 23
SECTION 3.19. Further Instruments and Acts................................. 24
SECTION 3.20. Removal of Administrator..................................... 24
ARTICLE IV
Satisfaction and Discharge
SECTION 4.01. Satisfaction and Discharge of Indenture...................... 24
SECTION 4.02. Application of Trust Money................................... 25
SECTION 4.03. Repayment of Moneys Held by Paying Agent..................... 26
SECTION 4.04. Auction of Financed Student Loans............................ 26
ARTICLE V
Remedies
SECTION 5.01. Events of Default............................................ 27
SECTION 5.02. Acceleration of Maturity;
Rescission and Annulment..................................... 28
SECTION 5.03. Collection of Indebtedness and
Suits for Enforcement by Indenture Trustee................... 29
SECTION 5.04. Remedies; Priorities......................................... 32
SECTION 5.05. Optional Preservation of
the Indenture Trust Estate................................... 34
SECTION 5.06. Limitation of Suits.......................................... 34
SECTION 5.07. Unconditional Rights of Noteholders
To Receive Principal and Interes............................. 35
SECTION 5.08. Restoration of Rights and Remedies........................... 35
SECTION 5.09. Rights and Remedies Cumulative............................... 35
SECTION 5.10. Delay or Omission Not a Waiver............................... 36
SECTION 5.11. Control by Noteholders....................................... 36
SECTION 5.12. Waiver of Past Defaults...................................... 36
SECTION 5.13. Undertaking for Costs........................................ 37
SECTION 5.14. Waiver of Stay or Extension Laws............................. 37
SECTION 5.15. Action on Notes.............................................. 38
SECTION 5.16. Performance and Enforcement
of Certain Obligations....................................... 38
<PAGE>
ARTICLE VI
The Indenture Trustee
SECTION 6.01. Duties of Indenture Trustee.................................. 39
SECTION 6.02. Rights of Indenture Trustee.................................. 40
SECTION 6.03. Individual Rights of Indenture Trustee....................... 41
SECTION 6.04. Indenture Trustee's Disclaimer............................... 41
SECTION 6.05. Notice of Defaults........................................... 42
SECTION 6.06. Reports by Indenture Trustee to Noteholders.................. 42
SECTION 6.07. Compensation and Indemnity................................... 42
SECTION 6.08. Replacement of Indenture Trustee............................. 43
SECTION 6.09. Successor Indenture Trustee by Merger........................ 44
SECTION 6.10. Appointment of Co-Trustee or Separate Trustee................ 45
SECTION 6.11. Eligibility; Disqualification................................ 46
SECTION 6.12. Preferential Collection of
Claims Against Issuer........................................ 47
ARTICLE VII
Noteholders' Lists and Reports
SECTION 7.01. Issuer To Furnish Indenture Trustee Names and
Addresses of Noteholders..................................... 47
SECTION 7.02. Preservation of Information;
Communications to Noteholders................................ 47
SECTION 7.03. Reports by Issuer............................................ 48
ARTICLE VIII
Accounts, Disbursements and Releases
SECTION 8.01. Collection of Money.......................................... 49
SECTION 8.02. Trust Accounts............................................... 49
SECTION 8.03. General Provisions Regarding Accounts........................ 51
SECTION 8.04. Release of Indenture Trust Estate............................ 52
SECTION 8.05. Opinion of Counsel........................................... 52
ARTICLE IX
Supplemental Indentures
SECTION 9.01. Supplemental Indentures Without
Consent of Noteholders....................................... 53
SECTION 9.02. Supplemental Indentures with
Consent of Noteholders....................................... 54
SECTION 9.03. Execution of Supplemental Indentures......................... 56
<PAGE>
SECTION 9.04. Effect of Supplemental Indenture............................. 56
SECTION 9.05. Conformity with Trust Indenture Act.......................... 57
SECTION 9.06. Reference in Notes to Supplemental Indentures................ 57
ARTICLE X
Redemption of Notes
SECTION 10.01. Redemption.................................................. 57
SECTION 10.02. Form of Redemption Notice................................... 58
SECTION 10.03. Notes Payable on Redemption Date............................ 58
ARTICLE XI
Miscellaneous
SECTION 11.01. Compliance Certificates and Opinions........................ 58
SECTION 11.02. Form of Documents Delivered to
Indenture Trustee........................................... 61
SECTION 11.03. Acts of Noteholders......................................... 62
SECTION 11.04. Notices to Indenture Trustee,
Issuer and Rating Agencies.................................. 62
SECTION 11.05. Notices to Noteholders; Waiver.............................. 64
SECTION 11.06. Alternate Payment and Notice Provisions..................... 64
SECTION 11.07. Conflict with Trust Indenture Act........................... 65
SECTION 11.08. Effect of Headings and Table of Contents.................... 65
SECTION 11.09. Successors and Assigns...................................... 65
SECTION 11.10. Separability................................................ 65
SECTION 11.11. Benefits of Indenture....................................... 65
SECTION 11.12. [Reserved].................................................. 65
SECTION 11.13. Governing Law............................................... 65
SECTION 11.14. Counterparts................................................ 66
SECTION 11.15. Recording of Indenture...................................... 66
SECTION 11.16. Trust Obligations........................................... 66
SECTION 11.17. No Petition................................................. 67
SECTION 11.18. Inspection.................................................. 67
EXHIBIT A - Form of Class A-1 Note
EXHIBIT B - Form of Class A-2 Note
EXHIBIT C - Class A-1 Note Depository Agreement
EXHIBIT D - Class A-2 Note Depository Agreement
<PAGE>
INDENTURE dated as of November 1, 1996, between SIGNET STUDENT LOAN
TRUST 1996-A, a Delaware trust (the "Issuer"), and THE BANK OF NEW YORK, a New
York banking corporation, as trustee and not in its individual capacity (the
"Indenture Trustee").
Each party agrees as follows for the benefit of the other party and for
the equal and ratable benefit of the holders of the Issuer's Floating Rate Class
A-1 Asset Backed Notes (the "Class A-1 Notes") and Floating Rate Class A-2 Asset
Backed Notes (the "Class A-2 Notes" and, together with the Class A-1 Notes, the
"Notes"):
GRANTING CLAUSE
The Issuer (and, with respect to the Financed Student Loans, the
Eligible Lender Trustee) hereby Grants to the Indenture Trustee at the Closing
Date, as trustee for the benefit of the Noteholders, all the Issuer's right,
title and interest in and to the following:
(a) the Financed Student Loans, and all obligations of the
Obligors thereunder including all moneys paid thereunder after the
Cutoff Date (or, in the case of Additional Student Loans, after the
related Subsequent Cutoff Date);
(b) the Loan Sale Agreement, including the right of the Issuer
to cause the Seller to repurchase Financed Student Loans from the
Issuer under circumstances described therein;
(c) the Master Servicing Agreement, including the right of the
Issuer to cause the Master Servicer to purchase Financed Student Loans
from the Issuer under the circumstances described therein;
(d) each Guarantee Agreement, including the right of the
Issuer to cause the related Guarantor to make Guarantee Payments in
respect of the Financed Student Loans;
(e) all funds on deposit from time to time in the Trust
Accounts, including the Reserve Account Initial Deposit and the
Pre-Funded Amount, and in all investments and proceeds thereof
(including all income thereon); and
(f) all present and future claims, demands, causes and choses
in action in respect of any or all of the foregoing and all payments on
or under and all proceeds of every kind and nature whatsoever in
respect of any or all of the foregoing, including all proceeds of the
conversion,
<PAGE>
voluntary or involuntary, into cash or other liquid property, all cash
proceeds, accounts, accounts receivable, notes, drafts, acceptances,
chattel paper, checks, deposit accounts, insurance proceeds,
condemnation awards, rights to payment of any and every kind and other
forms of obligations and receivables, instruments and other property
which at any time constitute all or part of or are included in the
proceeds of any of the foregoing (collectively, the "Collateral").
The foregoing Grant is made in trust to secure the payment of principal
of and interest on, and any other amounts owing in respect of, the Notes,
equally and ratably without prejudice, priority or distinction, and to secure
compliance with the provisions of this Indenture, all as provided in this
Indenture.
The Indenture Trustee, as Indenture Trustee on behalf of the
Noteholders, acknowledges such Grant, accepts the trusts under this Indenture in
accordance with the provisions of this Indenture and agrees to perform its
duties required in this Indenture to the best of its ability to the end that the
interests of the Noteholders may be adequately and effectively protected.
ARTICLE I
Definitions and Usage
SECTION 1.01. Definitions and Usage. Except as otherwise specified
herein or as the context may otherwise require, capitalized terms used but not
defined herein are defined in Appendix A to the Administration Agreement, dated
as of November 1, 1996 among the Issuer, Signet Bank, as Administrator, and the
Indenture Trustee, which also contains rules as to usage that shall be
applicable herein.
SECTION 1.02. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
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<PAGE>
"indenture trustee" or "institutional trustee" means the Indenture
Trustee.
"obligor" on the indenture securities means the Issuer and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule have
the meaning assigned to them by such definitions.
ARTICLE II
The Notes
SECTION 2.01. Form. The Class A-1 Notes and Class A-2 Notes, in each
case together with the Indenture Trustee's certificate of authentication, shall
be in substantially the forms set forth in Exhibits A and B, respectively, with
such appropriate insertions, omissions, substitutions and other variations as
are required or permitted by this Indenture and may have such letters, numbers
or other marks of identification and such legends or endorsements placed thereon
as may, consistently herewith, be determined by the officers executing such
Notes, as evidenced by their execution of the Notes. Any portion of the text of
any Note may be set forth on the reverse thereof, with an appropriate reference
thereto on the face of the Note.
The Definitive Notes shall be typewritten, printed, lithographed or
engraved or produced by any combination of these methods (with or without steel
engraved borders), all as determined by the officers executing such Notes, as
evidenced by their execution of such Notes.
Each Note shall be dated the date of its authentication. The terms of
the Notes set forth in Exhibits A and B are part of the terms of this Indenture.
SECTION 2.02. Execution, Authentication and Delivery. The Notes shall
be executed on behalf of the Issuer by any of its Authorized Officers. The
signature of any such Authorized Officer on the Notes may be manual or
facsimile.
Notes bearing the manual or facsimile signature of individuals who were
at any time Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.
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<PAGE>
The Indenture Trustee shall upon Issuer Order authenticate and deliver
Class A-1 Notes for original issue in an aggregate principal amount of
$252,000,000 and Class A-2 Notes for original issue in an aggregate principal
amount of $161,439,000. The aggregate principal amount of Class A-1 and Class
A-2 Notes outstanding at any time may not exceed such respective amounts except
as provided in Section 2.05.
Each Note shall be dated the date of its authentication. The Notes
shall be issuable as registered Notes in the minimum denomination of $1,000 and
in integral multiples of $1,000 in excess thereof.
No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Note a
certificate of authentication substantially in the form provided for herein
executed by the Indenture Trustee by the manual signature of one of its
authorized signatories, and such certificate upon any Note shall be conclusive
evidence, and the only evidence, that such Note has been duly authenticated and
delivered hereunder.
SECTION 2.03. Temporary Notes. Pending the preparation of Definitive
Notes, the Issuer may execute, and upon receipt of an Issuer Order the Indenture
Trustee shall authenticate and deliver, temporary Notes which are printed,
lithographed, typewritten, mimeographed or otherwise produced, of the tenor of
the Definitive Notes in lieu of which they are issued and with such variations
not inconsistent with the terms of this Indenture as the officers executing such
Notes may determine, as evidenced by their execution of such Notes.
If temporary Notes are issued, the Issuer will cause Definitive Notes
to be prepared without unreasonable delay. After the preparation of Definitive
Notes, the temporary Notes shall be exchangeable for Definitive Notes upon
surrender of the temporary Notes at the office or agency of the Issuer to be
maintained as provided in Section 3.02, without charge to the Noteholder. Upon
surrender for cancellation of any one or more temporary Notes, the Issuer shall
execute and the Indenture Trustee shall authenticate and deliver in exchange
therefor a like principal amount of Definitive Notes of authorized
denominations. Until so exchanged, the temporary Notes shall in all respects be
entitled to the same benefits under this Indenture as Definitive Notes.
SECTION 2.04. Registration; Registration of Transfer and Exchange. The
Issuer shall cause to be kept a register (the "Note Register") in which, subject
to such reasonable regulations as it may prescribe, the Issuer shall provide for
the
4
<PAGE>
registration of Notes and the registration of transfers of Notes. The Indenture
Trustee shall be "Note Registrar" for the purpose of registering Notes and
transfers of Notes as herein provided. Upon any resignation of any Note
Registrar, the Issuer shall promptly appoint a successor or, if it elects not to
make such an appointment, assume the duties of Note Registrar.
If a Person other than the Indenture Trustee is appointed by the Issuer
as Note Registrar, the Issuer will give the Indenture Trustee prompt written
notice of the appointment of such Note Registrar and of the location, and any
change in the location, of the Note Register, and the Indenture Trustee shall
have the right to inspect the Note Register at all reasonable times and to
obtain copies thereof, and the Indenture Trustee shall have the right to rely
upon a certificate executed on behalf of the Note Registrar by an Executive
Officer thereof as to the names and addresses of the Noteholders and the
principal amounts and number of such Notes.
Upon surrender for registration of transfer of any Note at the office
or agency of the Issuer to be maintained as provided in Section 3.02, if the
requirements of Section 8-401(1) of the UCC are met, the Issuer shall execute,
and the Indenture Trustee shall authenticate and the Noteholder shall obtain
from the Indenture Trustee, in the name of the designated transferee or
transferees, one or more new Notes in any authorized denominations, of the same
class and a like aggregate principal amount.
At the option of the Noteholder, Notes may be exchanged for other Notes
in any authorized denominations, of the same class and a like aggregate
principal amount, upon surrender of the Notes to be exchanged at such office or
agency. Whenever any Notes are so surrendered for exchange, if the requirements
of Section 8-401(1) of the UCC are met, the Issuer shall execute, and the
Indenture Trustee shall authenticate and, the Noteholder shall obtain from the
Indenture Trustee, the Notes which the Noteholder making the exchange is
entitled to receive.
All Notes issued upon any registration of transfer or exchange of Notes
shall be the valid obligations of the Issuer, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or
exchange shall be duly endorsed by, or be accompanied by a written instrument of
transfer in form satisfactory to the Note Registrar duly executed by the
Noteholder thereof or such Noteholder's attorney duly authorized in writing,
with such
5
<PAGE>
signature guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in Securities Transfer Agent's Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Note Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Exchange Act.
No service charge shall be made to a Noteholder for any registration of
transfer or exchange of Notes, but the Indenture Trustee may require payment of
a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any registration of transfer or exchange of Notes,
other than exchanges pursuant to Section 2.03 or 9.06 not involving any
transfer.
The preceding provisions of this Section notwithstanding, the Issuer
shall not be required to make and the Note Registrar need not register transfers
or exchanges of Notes selected for redemption or of any Note for a period of 15
days preceding the due date for any payment with respect to the Note.
SECTION 2.05. Mutilated, Destroyed, Lost or Stolen Notes. If (i) any
mutilated Note is surrendered to the Indenture Trustee, or the Indenture Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Note, and (ii) there is delivered to the Indenture Trustee such security or
indemnity as may be required by it to hold the Issuer and the Indenture Trustee
harmless, then, in the absence of notice to the Issuer, the Note Registrar or
the Indenture Trustee that such Note has been acquired by a bona fide purchaser,
and provided that the requirements of Section 8-405 of the UCC are met, the
Issuer shall execute and upon its request the Indenture Trustee shall
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Note, a replacement Note of the same class; provided,
however, that if any such destroyed, lost or stolen Note, but not a mutilated
Note, shall have become or within 15 days shall be due and payable, or shall
have been called for redemption, instead of issuing a replacement Note, the
Issuer may pay such destroyed, lost or stolen Note when so due or payable or
upon the Redemption Date without surrender thereof. If, after the delivery of
such replacement Note or payment of a destroyed, lost or stolen Note pursuant to
the proviso to the preceding sentence, a bona fide purchaser of the original
Note in lieu of which such replacement Note was issued presents for payment such
original Note, the Issuer and the Indenture Trustee shall be entitled to recover
such replacement Note (or such payment) from the Person to whom it was delivered
or any Person taking such replacement Note from such Person to whom such
replacement Note was delivered or any assignee of such
6
<PAGE>
Person, except a bona fide purchaser, and shall be entitled to recover upon the
security or indemnity provided therefor to the extent of any loss, damage, cost
or expense incurred by the Issuer or the Indenture Trustee in connection
therewith.
Upon the issuance of any replacement Note under this Section, the
Issuer may require the payment by the Noteholder thereof of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other reasonable expenses (including the fees and expenses of
the Indenture Trustee) connected therewith.
Every replacement Note issued pursuant to this Section in replacement
of any mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Issuer, whether or not the mutilated,
destroyed, lost or stolen Note shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Notes.
SECTION 2.06. Persons Deemed Owner. Prior to due presentment for
registration of transfer of any Note, the Issuer, the Indenture Trustee and any
agent of the Issuer or the Indenture Trustee may treat the Person in whose name
any Note is registered (as of the day of determination) as the owner of such
Note for the purpose of receiving payments of principal of and interest (and any
Noteholders' Interest LIBOR Carryover), if any, on such Note and for all other
purposes whatsoever, whether or not such Note be overdue, and neither the
Issuer, the Indenture Trustee nor any agent of the Issuer or the Indenture
Trustee shall be affected by notice to the contrary.
SECTION 2.07. Payment of Principal and Interest; Defaulted Interest;
Noteholders' Interest LIBOR Carryover. (a) The Notes shall accrue interest as
provided in the forms of the Class A-1 Note and Class A-2 Note set forth in
Exhibits A and B, respectively, and such interest shall be payable on each
Interest Payment Date as specified therein, subject to Section 3.01. Any
installment of interest (and any Noteholders' Interest LIBOR Carryover) or
principal, if any, payable on any Note which is punctually paid or duly provided
for by the Issuer on the applicable Interest Payment Date or Distribution Date
shall be paid to the Person in whose name such Note (or one or more Predecessor
Notes) is registered on the Record Date by check
7
<PAGE>
mailed first-class, postage prepaid to such Person's address as it appears on
the Note Register on such Record Date, except that, unless Definitive Notes have
been issued pursuant to Section 2.12, with respect to Notes registered on the
Record Date in the name of the nominee of the Clearing Agency (initially, such
nominee to be Cede & Co.), payment will be made by wire transfer in immediately
available funds to the account designated by such nominee and except for the
final installment of principal payable with respect to such Note on a
Distribution Date or on the Class A-1 Final Maturity Date or the Class A-2 Final
Maturity Date, as the case may be, which shall be payable as provided below. The
funds represented by any such checks returned undelivered shall be held in
accordance with Section 3.03.
(b) The principal of each Note shall be payable in installments on each
Distribution Date as provided in the forms of the Class A-1 Note and Class A-2
Note set forth in Exhibits A and B, respectively. Notwithstanding the foregoing,
the entire unpaid principal amount of the Notes shall be due and payable, if not
previously paid, on the date on which an Event of Default shall have occurred
and be continuing, if the Indenture Trustee or the Noteholders of the Notes
representing not less than a majority of the Outstanding Amount of the Notes
have declared the Notes to be immediately due and payable in the manner provided
in Section 5.02. All principal payments on each class of Notes shall be made pro
rata to the Noteholders of such class entitled thereto. The Indenture Trustee
shall notify the Person in whose name a Note is registered at the close of
business on the Record Date preceding the Distribution Date on which the Issuer
expects that the final installment of principal of and interest (and any
Noteholders' Interest LIBOR Carryover) on such Note will be paid. Such notice
shall be mailed or transmitted by facsimile prior to such final Distribution
Date and shall specify that such final installment will be payable only upon
presentation and surrender of such Note and shall specify the place where such
Note may be presented and surrendered for payment of such installment. Notices
in connection with redemptions of Notes shall be mailed to Noteholders as
provided in Section 10.02.
(c) If the Issuer defaults in a payment of interest on the Notes, the
Issuer shall pay defaulted interest (plus interest on such defaulted interest to
the extent lawful) at the applicable Note Interest Rate in any lawful manner.
The Issuer may pay such defaulted interest to the persons who are Noteholders on
a subsequent special record date, which date shall be at least five Business
Days prior to the payment date. The Issuer shall fix or cause to be fixed any
such special record date and payment date, and, at least 15 days before any such
special record date, the Issuer shall mail to the Indenture Trustee a notice
which the Indenture Trustee will, as soon as practicable, distribute to
8
<PAGE>
each Noteholder that states the special record date, the payment date and the
amount of defaulted interest to be paid.
(d) The Noteholders' Interest LIBOR Carryover for any class of Notes
for each Distribution Date (including all unpaid Noteholders' Interest LIBOR
Carryover for such class for prior Distribution Dates and interest accrued
thereon at the Class A-1 Rate or the Class A-2 Rate, as applicable, calculated
based on LIBOR for each applicable LIBOR Reset Period) shall be payable on each
Distribution Date solely to the extent of funds required and available to be
distributed to Noteholders by the Indenture Trustee pursuant to Sections
2(e)(ii)(B) or 2(e)(iii) of the Administration Agreement. Any Noteholders'
Interest LIBOR Carryover for any class of Notes, if any, payable with respect to
such class on the applicable Distribution Date shall be paid to the Person in
whose name such Note (or one or more Predecessor Notes) is registered on the
applicable Record Date by check mailed first-class postage prepaid to such
Person's address as it appears on the Note Register on such Record Date, except
that, unless Definitive Notes have been issued pursuant to Section 2.12, with
respect to the Notes registered on the Record Date in the name of the nominee of
the Clearing Agency (initially, such nominee to be Cede & Co.), payment will be
made by wire transfer in immediately available funds to the account designated
by such nominee. The funds represented by any such checks returned undelivered
shall be held in accordance with Section 3.03.
SECTION 2.08. Cancellation. All Notes surrendered for payment,
registration of transfer, exchange or redemption shall, if surrendered to any
Person other than the Indenture Trustee, be delivered to the Indenture Trustee
and shall be promptly cancelled by the Indenture Trustee. The Issuer may at any
time deliver to the Indenture Trustee for cancellation any Notes previously
authenticated and delivered hereunder which the Issuer may have acquired in any
manner whatsoever, and all Notes so delivered shall be promptly cancelled by the
Indenture Trustee. No Notes shall be authenticated in lieu of or in exchange for
any Notes cancelled as provided in this Section, except as expressly permitted
by this Indenture. All cancelled Notes may be held or disposed of by the
Indenture Trustee in accordance with its standard retention or disposal policy
as in effect at the time, unless the Issuer shall direct by an Issuer Order that
they be returned to it and so long as such Issuer Order is timely and the Notes
have not been previously disposed of by the Indenture Trustee.
SECTION 2.09. Release of Collateral. Subject to Section 11.01 and the
terms of the Basic Documents, the Indenture Trustee shall release property from
the lien of this Indenture only upon receipt of an Issuer Request accompanied by
an Officers'
9
<PAGE>
Certificate of the Issuer, an Opinion of Counsel and Independent Certificates in
accordance with TIA ss.ss. 314(c) and 314(d)(1) or an Opinion of Counsel in lieu
of such Independent Certificates to the effect that the TIA does not require any
such Independent Certificates.
SECTION 2.10. Book-Entry Notes. The Notes, upon original issuance, will
be issued in the form of typewritten Notes representing the Book-Entry Notes, to
be delivered to The Depository Trust Company, the initial Clearing Agency, by,
or on behalf of, the Issuer. Such Notes shall initially be registered on the
Note Register in the name of Cede & Co., the nominee of the initial Clearing
Agency, and no Note Owner will receive a Definitive Note (as defined below)
representing such Note Owner's interest in such Note, except as provided in
Section 2.12. Unless and until definitive, fully registered Notes (the
"Definitive Notes") have been issued to Note Owners pursuant to Section 2.12:
(i) the provisions of this Section shall be in full
force and effect;
(ii) the Note Registrar and the Indenture Trustee may
deal with the Clearing Agency for all purposes (including the payment
of principal of and interest and other amounts on the Notes) as the
authorized representative of the Note Owners;
(iii) to the extent that the provisions of this Section
conflict with any other provisions of this Indenture, the provisions of
this Section shall control;
(iv) the rights of Note Owners shall be exercised only
through the Clearing Agency and shall be limited to those established
by law and agreements between such Note Owners and the Clearing Agency
and/or the Clearing Agency Participants pursuant to the Note Depository
Agreements. Unless and until Definitive Notes are issued pursuant to
Section 2.12, the Clearing Agency will make book-entry transfers among
the Clearing Agency Participants and receive and transmit payments of
principal of and interest and other amounts on the Notes to such
Clearing Agency Participants; and
(v) whenever this Indenture requires or permits actions
to be taken based upon instructions or directions of Noteholders of
Notes evidencing a specified percentage of the Outstanding Amount of
the Notes, the Clearing Agency shall be deemed to represent such
percentage only to the extent that it has received instructions to such
effect from
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Note Owners and/or Clearing Agency Participants owning or representing,
respectively, such required percentage of the beneficial interest in
the Notes and has delivered such instructions to the Indenture Trustee.
SECTION 2.11. Notices to Clearing Agency. Whenever a notice or other
communication to the Noteholders is required under this Indenture, unless and
until Definitive Notes shall have been issued to Note Owners pursuant to Section
2.12, the Indenture Trustee shall give all such notices and communications
specified herein to be given to Noteholders to the Clearing Agency.
SECTION 2.12. Definitive Notes. If (i) the Administrator advises the
Indenture Trustee in writing that the Clearing Agency is no longer willing or
able to properly discharge its responsibilities with respect to the Notes, and
the Administrator is unable to locate a qualified successor, (ii) the
Administrator at its option advises the Indenture Trustee in writing that it
elects to terminate the book-entry system through the Clearing Agency or (iii)
after the occurrence of an Event of Default, a Servicer Default or an
Administrator Default, Note Owners representing beneficial interests aggregating
at least a majority of the Outstanding Amount of the Notes advise the Clearing
Agency (which shall then notify the Indenture Trustee) in writing that the
continuation of a book-entry system through the Clearing Agency is no longer in
the best interests of the Note Owners, then the Indenture Trustee will cause the
Clearing Agency to notify all Note Owners, through the Clearing Agency, of the
occurrence of any such event and of the availability of Definitive Notes to Note
Owners requesting the same. Upon surrender to the Indenture Trustee of the
typewritten Notes representing the Book-Entry Notes by the Clearing Agency,
accompanied by registration instructions, the Issuer shall execute and the
Indenture Trustee shall authenticate the Definitive Notes in accordance with the
instructions of the Clearing Agency. None of the Issuer, the Note Registrar or
the Indenture Trustee shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying on,
such instructions. Upon the issuance of Definitive Notes, the Indenture Trustee
shall recognize the holders of the Definitive Notes as Noteholders.
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ARTICLE III
Covenants
SECTION 3.01. Payment to Noteholders. The Issuer will duly and
punctually pay the principal of (subject to the parenthetical in the following
sentence), interest, if any, on and any Noteholders' Interest LIBOR Carryover
(but only to the extent provided in Sections 2.07(d) and 8.02(c)) with respect
to the Notes in accordance with the terms of the Notes and this Indenture.
Without limiting the foregoing, subject to Section 8.02(c), the Issuer will
cause to be distributed that portion of the amounts on deposit in the Trust
Accounts on an Interest Payment Date and a Distribution Date (other than any
Eligible Investments deposited therein that will mature on the Business Day
preceding a subsequent Distribution Date) which the Noteholders are entitled to
receive pursuant to the Administration Agreement to Class A-1 Noteholders and
Class A-2 Noteholders in accordance with the Administration Agreement. Amounts
properly withheld under the Code by any Person from a payment to any Noteholder
of interest (including any Noteholders' Interest LIBOR Carryover) and/or
principal shall be considered as having been paid by the Issuer to such
Noteholder for all purposes of this Indenture.
SECTION 3.02. Maintenance of Office or Agency. The Issuer will maintain
in the Borough of Manhattan, The City of New York, an office or agency where
Notes may be surrendered for registration of transfer or exchange, and where
notices and demands to or upon the Issuer in respect of the Notes and this
Indenture may be served. The Issuer hereby initially appoints the Indenture
Trustee to serve as its agent for the foregoing purposes. The Issuer will give
prompt written notice to the Indenture Trustee of the location, and of any
change in the location, of any such office or agency. If at any time the Issuer
shall fail to maintain any such office or agency or shall fail to furnish the
Indenture Trustee with the address thereof, such surrenders, notices and demands
may be made or served at the Corporate Trust Office, and the Issuer hereby
appoints the Indenture Trustee as its agent to receive all such surrenders,
notices and demands.
SECTION 3.03. Money for Payments To Be Held in Trust. As provided in
Section 8.02(a) and (b), all payments of amounts due and payable with respect to
any Notes that are to be made from amounts distributed from the Collection
Account or any other Trust Account pursuant to Section 8.02(c) shall be made on
behalf of the Issuer by the Indenture Trustee or by another Paying Agent, and no
amounts so distributed from the Collection Account
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for payments of Notes shall be paid over to the Issuer except as provided in
this Section.
On or before the Business Day next preceding each Interest Payment Date
or Distribution Date and Redemption Date, the Issuer shall distribute or cause
to be distributed to the Indenture Trustee (or any other Paying Agent) an
aggregate sum sufficient to pay the amounts then becoming due under the Notes,
such sum to be held in trust for the benefit of the Persons entitled thereto and
(unless the Paying Agent is the Indenture Trustee) shall promptly notify the
Indenture Trustee of its action or failure so to act.
The Issuer will cause each Paying Agent other than the Indenture
Trustee to execute and deliver to the Indenture Trustee an instrument in which
such Paying Agent shall agree with the Indenture Trustee (and if the Indenture
Trustee acts as Paying Agent, it hereby so agrees), subject to the provisions of
this Section, that such Paying Agent will:
(i) hold all sums held by it for the payment of amounts
due with respect to the Notes in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided and pay such sums to such
Persons as herein provided;
(ii) give the Indenture Trustee notice of any default by
the Issuer of which it has actual knowledge (or any other obligor upon
the Notes) in the making of any payment required to be made with
respect to the Notes;
(iii) at any time during the continuance of any such
default, upon the written request of the Indenture Trustee, forthwith
pay to the Indenture Trustee all sums so held in trust by such Paying
Agent;
(iv) immediately resign as a Paying Agent and forthwith
pay to the Indenture Trustee all sums held by it in trust for the
payment of Notes if at any time it ceases to meet the standards
required to be met by a Paying Agent at the time of its appointment;
and
(v) comply with all requirements of the Code with
respect to the withholding from any payments made by it on any Notes of
any applicable withholding taxes imposed thereon and with respect to
any applicable reporting requirements in connection therewith.
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The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by Issuer
Order direct any Paying Agent to pay to the Indenture Trustee all sums held in
trust by such Paying Agent, such sums to be held by the Indenture Trustee upon
the same trusts as those upon which the sums were held by such Paying Agent; and
upon such payment by any Paying Agent to the Indenture Trustee, such Paying
Agent shall be released from all further liability with respect to such money.
Subject to applicable laws with respect to escheat of funds, any money
held by the Indenture Trustee or any Paying Agent in trust for the payment of
any amount due with respect to any Note and remaining unclaimed for two years
after such amount has become due and payable shall be discharged from such trust
and be paid to the Issuer on Issuer Request; and the Noteholder thereof shall
thereafter, as an unsecured general creditor, look only to the Issuer for
payment thereof (but only to the extent of the amounts so paid to the Issuer),
and all liability of the Indenture Trustee or such Paying Agent with respect to
such trust money shall thereupon cease; provided, however, that the Indenture
Trustee or such Paying Agent, before being required to make any such repayment,
shall at the expense and direction of the Issuer cause to be published once, in
a newspaper published in the English language, customarily published on each
Business Day and of general circulation in The City of New York, notice that
such money remains unclaimed and that, after a date specified therein, which
shall not be less than 30 days from the date of such publication, any unclaimed
balance of such money then remaining will be repaid to the Issuer. The Indenture
Trustee shall also adopt and employ, at the expense of the Issuer, any other
reasonable means of notification of such repayment (including mailing notice of
such repayment to Noteholders whose Notes have been called but have not been
surrendered for redemption or whose right to or interest in moneys due and
payable but not claimed is determinable from the records of the Indenture
Trustee or of any Paying Agent, at the last address of record for each such
Noteholder).
SECTION 3.04. Existence. The Issuer will keep in full effect its
existence, rights and franchises as a trust under the laws of the State of
Delaware (unless it becomes, or any successor Issuer hereunder is or becomes,
organized under the laws of any other State or of the United States of America,
in which case the Issuer will keep in full effect its existence, rights and
franchises under the laws of such other jurisdiction) and will obtain and
preserve its qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this
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Indenture, the Notes, the Collateral and each other instrument or agreement
included in the Indenture Trust Estate.
SECTION 3.05. Protection of Indenture Trust Estate. The Issuer will
from time to time execute and deliver all such supplements and amendments hereto
and all such financing statements, continuation statements, instruments of
further assurance and other instruments, and will take such other action
necessary or advisable to:
(i) maintain or preserve the lien and security interest
(and the priority thereof) of this Indenture or carry out more
effectively the purposes hereof;
(ii) perfect, publish notice of or protect the validity
of any Grant made or to be made by this Indenture;
(iii) enforce any of the Collateral; or
(iv) preserve and defend title to the Indenture Trust
Estate and the rights of the Indenture Trustee and the Noteholders in
such Indenture Trust Estate against the claims of all persons and
parties. It shall be the responsibility of the Issuer to prepare such
instruments.
The Issuer hereby designates the Indenture Trustee its agent and
attorney-in-fact to execute any financing statement, continuation statement or
other instrument required to be executed pursuant to this Section.
SECTION 3.06. Opinions as to Indenture Trust Estate. (a) On the Closing
Date, the Issuer shall furnish to the Indenture Trustee an Opinion of Counsel
either stating that, in the opinion of such counsel, such action has been taken
with respect to the recording and filing of this Indenture, any indentures
supplemental hereto, and any other requisite documents, and with respect to the
execution and filing of any financing statements and continuation statements, as
are necessary to perfect and make effective the lien and security interest of
this Indenture and reciting the details of such action, or stating that, in the
opinion of such counsel, no such action is necessary to make such lien and
security interest effective.
(b) On or before June 30 in each calendar year, beginning in 1997, the
Issuer shall furnish to the Indenture Trustee an Opinion of Counsel either
stating that, in the opinion of such counsel, such action has been taken with
respect to the recording, filing, re-recording and refiling of this Indenture,
any indentures supplemental hereto and any other requisite documents and with
respect to the execution and filing of any
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financing statements and continuation statements as is necessary to maintain the
lien and security interest created by this Indenture and reciting the details of
such action or stating that in the opinion of such counsel no such action is
necessary to maintain such lien and security interest. Such Opinion of Counsel
shall also describe the recording, filing, re-recording and refiling of this
Indenture, any indentures supplemental hereto and any other requisite documents
and the execution and filing of any financing statements and continuation
statements that will, in the opinion of such counsel, be required to maintain
the lien and security interest of this Indenture until June 30 in the following
calendar year.
SECTION 3.07. Performance of Obligations; Servicing of Student Loans.
(a) The Issuer will not take any action and will use its best efforts not to
permit any action to be taken by others that would release any Person from any
of such Person's material covenants or obligations under any instrument or
agreement included in the Indenture Trust Estate or that would result in the
amendment, hypothecation, subordination, termination or discharge of, or impair
the validity or effectiveness of, any such instrument or agreement, except as
expressly provided in this Indenture, the Loan Sale Agreement, the Master
Servicing Agreement or such other instrument or agreement.
(b) The Issuer may contract with other Persons to assist it in
performing its duties under this Indenture, and any performance of such duties
by a Person identified to the Indenture Trustee in an Officers' Certificate of
the Issuer shall be deemed to be action taken by the Issuer. Initially, the
Issuer has contracted with the Master Servicer and the Administrator to assist
the Issuer in performing its duties under this Indenture.
(c) The Issuer will punctually perform and observe all its obligations
and agreements contained in this Indenture, the other Basic Documents and in the
instruments and agreements included in the Indenture Trust Estate, including
filing or causing to be filed all UCC financing statements and continuation
statements required to be filed by the terms of this Indenture, the Loan Sale
Agreement and the Master Servicing Agreement in accordance with and within the
time periods provided for herein and therein. Except as otherwise expressly
provided therein, the Issuer shall not waive, amend, modify, supplement or
terminate any Basic Document or any provision thereof without the consent of the
Indenture Trustee or the Noteholders of at least a majority of the Outstanding
Amount of the Notes.
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(d) If the Issuer shall have knowledge of the occurrence of a Servicer
Default under the Master Servicing Agreement, or an Administrator Default under
the Administration Agreement, the Issuer shall promptly notify the Indenture
Trustee and the Rating Agencies thereof, and shall specify in such notice the
action, if any, the Issuer is taking with respect to such default. If a Servicer
Default shall arise from the failure of the Master Servicer to perform any of
its duties or obligations under the Master Servicing Agreement with respect to
the Financed Student Loans, the Issuer shall take all reasonable steps available
to it to enforce its rights under the Basic Documents in respect of such
failure.
(e) As promptly as possible after the giving of notice of termination
to the Master Servicer of the Master Servicer's rights and powers pursuant to
Section 6.01 of the Master Servicing Agreement, the Issuer shall appoint a
successor master servicer (the "Successor Master Servicer"), and such Successor
Master Servicer shall accept its appointment by a written assumption in a form
acceptable to the Indenture Trustee. In the event that a Successor Master
Servicer has not been appointed and accepted its appointment at the time when
the Master Servicer ceases to act as Master Servicer, the Indenture Trustee
without further action shall automatically be appointed the Successor Master
Servicer. The Indenture Trustee may resign as the Master Servicer by giving
written notice of such resignation to the Issuer and in such event will be
released from such duties and obligations, such release not to be effective
until the date a new master servicer enters into an agreement with the Issuer as
provided below; provided, however, that nothing herein shall require or permit
the Indenture Trustee to act as Master Servicer, or otherwise service the
Financed Student Loans, in violation of the Higher Education Act. Upon delivery
of any such notice to the Issuer, the Issuer shall obtain a new master servicer
as the Successor Master Servicer under the Master Servicing Agreement. Any
Successor Master Servicer other than the Indenture Trustee shall (i) be an
established institution (A) that satisfies any requirements of the Higher
Education Act applicable to servicers, (B) the appointment of which satisfies
the Rating Agency Condition and (C) whose regular business includes the
servicing or administration of student loans and (ii) enter into a Master
Servicing Agreement with the Issuer having substantially the same provisions as
the provisions of the Master Servicing Agreement applicable to the Master
Servicer. If within 30 days after the delivery of the notice referred to above,
the Issuer shall not have obtained such a new servicer, the Indenture Trustee
may appoint or may petition a court of competent jurisdiction to appoint, a
Successor Master Servicer; provided, however, that such right to appoint or to
petition for the appointment of any such successor shall in no event relieve
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the Indenture Trustee from any obligations otherwise imposed on it under the
Basic Documents until such successor has in fact assumed such appointment. In
connection with any such appointment, the Indenture Trustee may make such
arrangements for the compensation of such successor as it and such successor
shall agree, subject to the limitations set forth below and in the Master
Servicing Agreement, and in accordance with Section 6.02 of the Master Servicing
Agreement, the Issuer shall enter into an agreement with such successor for the
servicing of the Financed Student Loans (such agreement to be in form and
substance satisfactory to the Indenture Trustee). If the Indenture Trustee shall
succeed as provided herein to the Master Servicer's duties as servicer with
respect to the Financed Student Loans, it shall do so in its individual capacity
and not in its capacity as Indenture Trustee and, accordingly, the provisions of
Article VI hereof shall be inapplicable to the Indenture Trustee in its duties
as the successor to the Master Servicer and the servicing of the Financed
Student Loans. In case the Indenture Trustee shall become successor to the
Master Servicer under the Master Servicing Agreement, the Indenture Trustee
shall be entitled to appoint as Master Servicer any one of its affiliates,
provided that such appointment shall not affect or alter in any way the
liability of the Indenture Trustee as a successor for the performance of the
duties and obligations of the Master Servicer in accordance with the terms
hereof.
(f) Upon any termination of the Master Servicer's rights and powers
pursuant to the Master Servicing Agreement, the Issuer shall promptly notify the
Indenture Trustee. As soon as a Successor Master Servicer is appointed, the
Issuer shall notify the Indenture Trustee of such appointment, specifying in
such notice the name and address of such Successor Master Servicer.
(g) Without derogating from the absolute nature of the assignment
granted to the Indenture Trustee under this Indenture or the rights of the
Indenture Trustee hereunder, the Issuer agrees that it will not, without the
prior written consent of the Indenture Trustee or the Noteholders of at least a
majority in Outstanding Amount of the Notes, amend, modify, waive, supplement,
terminate or surrender, or agree to any amendment, modification, supplement,
termination, waiver or surrender of, the terms of any Collateral or the Basic
Documents, except to the extent otherwise provided in the Master Servicing
Agreement, or waive timely performance or observance by the Master Servicer, the
Seller, the Issuer, the Administrator or the Eligible Lender Trustee under the
Loan Sale Agreement, the Master Servicing Agreement or the Administration
Agreement; provided, however, that no such amendment shall (i) increase or
reduce in any manner the amount of, or accelerate or delay the timing of,
distributions that are required to be made for the benefit of the
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Noteholders, or (ii) reduce the aforesaid percentage of the Notes which are
required to consent to any such amendment, without the consent of the
Noteholders of all the Outstanding Notes. If any such amendment, modification,
supplement or waiver shall be so consented to by the Indenture Trustee or such
Noteholders, the Issuer agrees, promptly following a request by the Indenture
Trustee to do so, to execute and deliver, in its own name and at its own
expense, such agreements, instruments, consents and other documents as the
Indenture Trustee may deem necessary or appropriate in the circumstances.
SECTION 3.08. Negative Covenants. So long as any Notes are
Outstanding, the Issuer shall not:
(i) except as expressly permitted by this Indenture or
any other Basic Document, sell, transfer, exchange or otherwise dispose
of any of the properties or assets of the Issuer, including those
included in the Indenture Trust Estate, unless directed to do so by the
Indenture Trustee (which direction the Indenture Trustee shall not give
without the consent of each of the Rating Agencies);
(ii) claim any credit on, or make any deduction from the
principal or interest (including any Noteholders' Interest LIBOR
Carryover) payable in respect of, the Notes (other than amounts
properly withheld from such payments under the Code or applicable state
law) or assert any claim against any present or former Noteholder by
reason of the payment of the taxes levied or assessed upon any part of
the Indenture Trust Estate; or
(iii) (A) permit the validity or effectiveness of this
Indenture to be impaired, or permit the lien of this Indenture to be
amended, hypothecated, subordinated, terminated or discharged, or
permit any Person to be released from any covenants or obligations with
respect to the Notes under this Indenture except as may be expressly
permitted hereby, (B) permit any lien, charge, excise, claim, security
interest, mortgage or other encumbrance (other than the lien of this
Indenture) to be created on or extend to or otherwise arise upon or
burden the Indenture Trust Estate or any part thereof or any interest
therein or the proceeds thereof (other than tax liens and other liens
that arise by operation of law, in each case arising solely as a result
of an action or omission of the related Obligor, and other than as
expressly permitted by the Basic Documents) or (C) permit the lien of
this Indenture not to constitute a valid first priority (other than
with respect to any such tax or other lien) security interest in the
Indenture Trust Estate.
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SECTION 3.09. Annual Statement as to Compliance. The Issuer will
deliver to the Indenture Trustee, within 180 days after the end of each fiscal
year of the Issuer (commencing with the fiscal year 1997), an Officers'
Certificate of the Issuer stating that:
(i) a review of the activities of the Issuer during
such year and of performance under this Indenture has been made under
such Authorized Officers' supervision; and
(ii) to the best of such Authorized Officers' knowledge,
based on such review, the Issuer has complied with all conditions and
covenants under this Indenture throughout such year, or, if there has
been a default in the compliance of any such condition or covenant,
specifying each such default known to such Authorized Officers and the
nature and status thereof.
SECTION 3.10. Issuer May Consolidate, etc., Only on Certain Terms. (a)
The Issuer shall not consolidate or merge with or into any other Person, unless:
(i) the Person (if other than the Issuer) formed by or
surviving such consolidation or merger shall be a Person organized and
existing under the laws of the United States of America or any State
and shall expressly assume, by an indenture supplemental hereto,
executed and delivered to the Indenture Trustee, in form satisfactory
to the Indenture Trustee, the due and punctual payment of the principal
of, interest on and any Noteholders' Interest LIBOR Carryover, if any,
with respect to all Notes and the performance or observance of every
agreement and covenant of this Indenture on the part of the Issuer to
be performed or observed, all as provided herein;
(ii) immediately after giving effect to such transaction,
no Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been
satisfied with respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel
(and shall have delivered copies thereof to the Indenture Trustee) to
the effect that such transaction will not have any material adverse tax
consequence to the Issuer, any Noteholder or any Certificateholder;
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(v) any action as is necessary to maintain the lien and
security interest created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture
Trustee an Officers' Certificate of the Issuer and an Opinion of
Counsel each stating that such consolidation or merger and such
supplemental indenture comply with this Article III and that all
conditions precedent herein provided for relating to such transaction
have been complied with (including any filing required by the Exchange
Act).
(b) The Issuer shall not convey or transfer all or substantially all
its properties or assets, including those included in the Indenture Trust
Estate, to any Person, unless:
(i) the Person that acquires by conveyance or transfer
the properties and assets of the Issuer the conveyance or transfer of
which is hereby restricted shall (A) be a United States citizen or a
Person organized and existing under the laws of the United States of
America or any State, (B) expressly assumes, by an indenture
supplemental hereto, executed and delivered to the Indenture Trustee,
in form satisfactory to the Indenture Trustee, the due and punctual
payment of the principal of, interest on and Noteholders' Interest
LIBOR Carryover, if any, with respect to all Notes and the performance
or observance of every agreement and covenant of this Indenture on the
part of the Issuer to be performed or observed, all as provided herein,
(C) expressly agrees by means of such supplemental indenture that all
right, title and interest so conveyed or transferred shall be subject
and subordinate to the rights of Noteholders, (D) unless otherwise
provided in such supplemental indenture, expressly agrees to indemnify,
defend and hold harmless the Issuer against and from any loss,
liability or expense arising under or related to this Indenture and the
Notes and (E) expressly agrees by means of such supplemental indenture
that such Person (or if a group of Persons, then one specified Person)
shall make all filings with the Commission (and any other appropriate
Person) required by the Exchange Act in connection with the Notes;
(ii) immediately after giving effect to such
transaction, no Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been
satisfied with respect to such transaction;
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(iv) the Issuer shall have received an Opinion of
Counsel (and shall have delivered copies thereof to the Indenture
Trustee) to the effect that such transaction will not have any material
adverse tax consequence to the Issuer, any Noteholder or any
Certificateholder;
(v) any action as is necessary to maintain the lien and
security interest created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture
Trustee an Officers' Certificate of the Issuer and an Opinion of
Counsel each stating that such conveyance or transfer and such
supplemental indenture comply with this Article III and that all
conditions precedent herein provided for relating to such transaction
have been complied with (including any filing required by the Exchange
Act).
SECTION 3.11. Successor or Transferee. (a) Upon any consolidation or
merger of the Issuer in accordance with Section 3.10(a), the Person formed by or
surviving such consolidation or merger (if other than the Issuer) shall succeed
to, and be substituted for, and may exercise every right and power of, the
Issuer under this Indenture with the same effect as if such Person had been
named as the Issuer herein.
(b) Upon a conveyance or transfer of all the assets and properties of
the Issuer pursuant to Section 3.10(b), Signet Student Loan Trust 1996-A will be
released from every covenant and agreement of this Indenture to be observed or
performed on the part of the Issuer with respect to the Notes immediately upon
the delivery by the Issuer of written notice to the Indenture Trustee stating
that Signet Student Loan Trust 1996-A is to be so released.
SECTION 3.12. No Other Business. The Issuer shall not engage in any
business other than financing, purchasing, owning, selling and managing the
Financed Student Loans in the manner contemplated by this Indenture and the
other Basic Documents and activities incidental thereto.
SECTION 3.13. No Borrowing. The Issuer shall not issue, incur,
assume, guarantee or otherwise become liable, directly or indirectly, for any
indebtedness except for the Notes.
SECTION 3.14. Obligations of Master Servicer and Administrator. The
Issuer shall cause the Master Servicer to comply with Sections 3.07, 3.08, 3.09
and 3.10 of the Master Servicing Agreement and shall cause the Administrator to
comply with Section 2(h) of the Administration Agreement.
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SECTION 3.15. Guarantees, Loans, Advances and Other Liabilities. Except
as contemplated by the Basic Documents or this Indenture, the Issuer shall not
make any loan or advance or credit to, or guarantee (directly or indirectly or
by an instrument having the effect of assuring another's payment or performance
on any obligation or capability of so doing or otherwise), endorse or otherwise
become contingently liable, directly or indirectly, in connection with the
obligations, stocks or dividends of, or own, purchase, repurchase or acquire (or
agree contingently to do so) any stock, obligations, assets or securities of, or
any other interest in, or make any capital contribution to, any other Person.
SECTION 3.16. Capital Expenditures. The Issuer shall not make any
expenditure (by long-term or operating lease or otherwise) for capital assets
(either realty or personalty).
SECTION 3.17. Restricted Payments. The Issuer shall not, directly or
indirectly, (i) pay any dividend or make any distribution (by reduction of
capital or otherwise), whether in cash, property, securities or a combination
thereof, to the Eligible Lender Trustee or any owner of a beneficial interest in
the Issuer or otherwise with respect to any ownership or equity interest or
security in or of the Issuer or to the Master Servicer or the Administrator,
(ii) redeem, purchase, retire or otherwise acquire for value any such ownership
or equity interest or security or (iii) set aside or otherwise segregate any
amounts for any such purpose; provided, however, that the Issuer may make, or
cause to be made, distributions to the Master Servicer, the Eligible Lender
Trustee, the Indenture Trustee, the Certificateholders, the Noteholders, the
Administrator and the Seller as contemplated by, and to the extent funds are
available for such purpose under, the Loan Sale Agreement, the Master Servicing
Agreement or the Administration Agreement. The Issuer will not, directly or
indirectly, make payments to or distributions from the Collection Account except
in accordance with this Indenture and the other Basic Documents.
SECTION 3.18. Notice of Events of Default. The Issuer shall give the
Indenture Trustee and the Rating Agencies prompt written notice of each Event of
Default hereunder and each default on the part of the Seller, the Master
Servicer or the Administrator of its obligations under the Loan Sale Agreement,
the Master Servicing Agreement or the Administration Agreement. In addition, the
Issuer shall deliver to the Indenture Trustee, within five days after the
occurrence thereof, written notice in the form of an Officers' Certificate of
the Issuer of any event which with the giving of notice and the lapse of time
would become an Event of Default under Section 5.01(iii), its status and what
action the Issuer is taking or proposes to take with
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respect thereto. The Indenture Trustee shall provide notice to the Noteholders
of each default or other event of which it receives notice pursuant to this
Section 3.18, promptly after receipt of such Notice.
SECTION 3.19. Further Instruments and Acts. Upon request of the
Indenture Trustee, the Issuer will execute and deliver such further instruments
and do such further acts as may be reasonably necessary or proper to carry out
more effectively the purpose of this Indenture.
SECTION 3.20. Removal of Administrator. So long as any Notes are
Outstanding, the Issuer shall not remove the Administrator without cause unless
the Rating Agency Condition shall have been satisfied in connection with such
removal.
ARTICLE IV
Satisfaction and Discharge
SECTION 4.01. Satisfaction and Discharge of Indenture. This Indenture
shall cease to be of further effect with respect to the Notes except as to (i)
rights of registration of transfer and exchange, (ii) substitution of mutilated,
destroyed, lost or stolen Notes, (iii) rights of Noteholders to receive payments
of principal thereof and interest (including any Noteholders' Interest LIBOR
Carryover) thereon, (iv) Sections 3.03, 3.04, 3.05, 3.08, 3.10, 3.12 and 3.13,
(v) the rights, obligations and immunities of the Indenture Trustee hereunder
(including the rights of the Indenture Trustee under Section 6.07 and the
obligations of the Indenture Trustee under Section 4.02) and (vi) the rights of
Noteholders as beneficiaries hereof with respect to the property so deposited
with the Indenture Trustee payable to all or any of them, and the Indenture
Trustee, on demand of and at the expense of the Issuer, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture with
respect to the Notes, when:
(A) either
(1) all Notes theretofore authenticated and delivered
(other than (i) Notes that have been destroyed, lost or stolen
and that have been replaced or paid as provided in Section
2.05 and (ii) Notes for whose payment money has theretofore
been deposited in trust or segregated and held in trust by the
Issuer and thereafter repaid to the Issuer or discharged from
such trust, as provided in Section 3.03) have been delivered
to the Indenture Trustee for cancellation; or
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(2) all Notes not theretofore delivered to the
Indenture Trustee for cancellation
(i) have become due and payable,
(ii) will become due and payable at the
Class A-1 Final Maturity Date or the Class A-2 Final
Maturity Date, as the case may be, within one year,
or
(iii) are to be called for redemption
within one year under arrangements satisfactory to
the Indenture Trustee for the giving of notice of
redemption by the Indenture Trustee in the name, and
at the expense, of the Issuer,
and the Issuer, in the case of (i), (ii) or (iii) above, has
irrevocably deposited or caused to be irrevocably deposited
with the Indenture Trustee cash or direct obligations of or
obligations guaranteed by the United States of America (which
will mature prior to the date such amounts are payable), in
trust for such purpose, in an amount sufficient to pay and
discharge the entire indebtedness on such Notes not
theretofore delivered to the Indenture Trustee for
cancellation as of such day of discharge or when due on the
Class A-1 Final Maturity Date or the Class A-2 Final Maturity
Date, as the case may be;
(B) the Issuer has paid or caused to be paid all
other sums payable hereunder by the Issuer; and
(C) the Issuer has delivered to the Indenture Trustee
an Officers' Certificate of the Issuer, an Opinion of Counsel
and (if required by the TIA or the Indenture Trustee) an
Independent Certificate from a firm of certified public
accountants, each meeting the applicable requirements of
Section 11.01(a) and, subject to Section 11.02, each stating
that all conditions precedent herein provided for relating to
the satisfaction and discharge of this Indenture have been
complied with.
SECTION 4.02. Application of Trust Money. All moneys deposited with the
Indenture Trustee pursuant to Section 4.01 hereof shall be held in trust and
applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent, as the
Indenture Trustee may determine, to the Noteholders of the particular Notes for
the payment or redemption of which such
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moneys have been deposited with the Indenture Trustee, of all sums due and to
become due thereon for principal and interest (including any Noteholders'
Interest LIBOR Carryover); but such moneys need not be segregated from other
funds except to the extent required herein, in the Master Servicing Agreement or
the Administration Agreement or required by law.
SECTION 4.03. Repayment of Moneys Held by Paying Agent. In connection
with the satisfaction and discharge of this Indenture with respect to the Notes,
all moneys then held by any Paying Agent other than the Indenture Trustee under
the provisions of this Indenture with respect to such Notes shall, upon demand
of the Issuer, be paid to the Indenture Trustee to be held and applied according
to Section 3.03 and thereupon such Paying Agent shall be released from all
further liability with respect to such moneys.
SECTION 4.04. Auction of Financed Student Loans. The Indenture Trustee
shall offer the Financed Student Loans for sale as of the last day of the
Collection Period immediately preceding the January, 2007 Distribution Date and
shall accept bids on behalf of the Issuer for such purpose. If with respect to
the last date of such Collection Period, the Indenture Trustee receives no bid
to purchase the Financed Student Loans, or no bid that it may, as specified
below, accept, the Indenture Trustee may, but shall not be under any obligation
to, offer the Financed Student Loans for sale as of the last day of each, or
any, of the succeeding Collection Periods until a bid is received that may, as
specified below, be accepted by the Indenture Trustee. With respect to any
attempt to arrange for the purchase of the Financed Student Loans, the Indenture
Trustee shall accept the highest bid submitted so long as (i) at least two bids
to purchase the Financed Student Loans as of the last day of the applicable
Collection Period are received and (ii) the highest such bid is at least equal
to the greater of (x) the Minimum Purchase Price as of the applicable
Distribution Date and (y) the Purchase Amount of the Financed Student Loans as
of last day of the applicable Collection Period. Any attempt to arrange for the
purchase of the Financed Student Loans and the consummation of any such sale
shall be conducted by the Indenture Trustee in a commercially reasonable manner.
The Indenture Trustee shall provide notice of any such attempt at least 60 days
prior to the last day of the related Collection Period to the Seller, the Master
Servicer, each Subservicer, the Eligible Lender Trustee, the Rating Agencies,
each Noteholder and each Certificateholder, and any such Person or their
respective Affiliates or any other Person may submit a timely bid for the
purchase of the Financed Student Loans.
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ARTICLE V
Remedies
SECTION 5.01. Events of Default. "Event of Default", wherever used
herein, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(i) default in the payment of any interest (including,
subject to the limitations of Sections 2.07(d) and 8.02(c), any
Noteholders' Interest LIBOR Carryover) on any Note when the same
becomes due and payable, and such default shall continue for a period
of five days; or
(ii) default in the payment of the principal of any Note
when the same becomes due and payable; or
(iii) default in the observance or performance of any
covenant or agreement of the Issuer made in this Indenture (other than
a covenant or agreement, a default in the observance or performance of
which is elsewhere in this Section specifically dealt with), or any
representation or warranty of the Issuer made in this Indenture or in
any certificate or other writing delivered pursuant hereto or in
connection herewith proving to have been incorrect in any material
respect as of the time when the same shall have been made, and such
default shall continue or not be cured, or the circumstance or
condition in respect of which such misrepresentation or warranty was
incorrect shall not have been eliminated or otherwise cured, for a
period of 60 (or, in the circumstances provided below, 120) days after
there shall have been given, by registered or certified mail, to the
Issuer by the Indenture Trustee or to the Issuer and the Indenture
Trustee by the Noteholders of at least 25% of the Outstanding Amount of
the Notes, a written notice specifying such default or incorrect
representation or warranty and requiring it to be remedied and stating
that such notice is a notice of Default hereunder; provided, that, if
at the end of such 60-day period, the Indenture Trustee determines that
a good faith effort to cure or eliminate the Default has commenced, the
Indenture Trustee may extend such 60-day period to 120 days; or
(iv) the filing of a decree or order for relief by a
court having jurisdiction in the premises in respect of the
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Issuer or any substantial part of the Indenture Trust Estate 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 of the Issuer or for any substantial
part of the Indenture Trust Estate, or ordering the winding-up or
liquidation of the Issuer's affairs, and such decree or order shall
remain unstayed and in effect for a period of 60 consecutive days; or
(v) the commencement by the Issuer 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 the Issuer to
the entry of an order for relief in an involuntary case under any such
law, or the consent by the Issuer to the appointment or taking
possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Issuer or for any substantial
part of the Indenture Trust Estate, or the making by the Issuer of any
general assignment for the benefit of creditors, or the failure by the
Issuer generally to pay its debts as such debts become due, or the
taking of action by the Issuer in furtherance of any of the foregoing.
SECTION 5.02. Acceleration of Maturity; Rescission and Annulment. If an
Event of Default should occur and be continuing, then and in every such case the
Indenture Trustee or the Noteholders of Notes representing not less than 66-2/3%
of the Outstanding Amount of the Notes may declare all the Notes to be
immediately due and payable, by a notice in writing to the Issuer (and to the
Indenture Trustee if given by Noteholders), and upon any such declaration the
unpaid principal amount of such Notes, together with accrued and unpaid interest
thereon through the date of acceleration, shall become immediately due and
payable.
At any time after such declaration of acceleration of maturity has been
made and before a judgment or decree for payment of the money due has been
obtained by the Indenture Trustee as hereinafter in this Article V provided, the
Noteholders of Notes representing a majority of the Outstanding Amount of the
Notes, by written notice to the Issuer and the Indenture Trustee, may rescind
and annul such declaration and its consequences if:
(i) the Issuer has paid or deposited with the Indenture
Trustee a sum sufficient to pay:
(A) all payments of principal of and interest on all
Notes and all other amounts that would then be due
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hereunder or upon such Notes if the Event of Default giving
rise to such acceleration had not occurred; and
(B) all sums paid or advanced by the Indenture
Trustee hereunder and the reasonable compensation, expenses,
disbursements and advances of the Indenture Trustee and its
agents and counsel; and
(ii) all Events of Default, other than the nonpayment of
the principal of the Notes that has become due solely by such
acceleration, have been cured or waived as provided in Section 5.12.
No such rescission shall affect any subsequent default or impair any
right consequent thereto.
SECTION 5.03. Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee. (a) The Issuer covenants that if (i) default is made in the
payment of any interest (including, subject to the limitations of Sections
2.07(d) and 8.02(c), any Noteholders' Interest LIBOR Carryover) on any Note when
the same becomes due and payable, and such default continues for a period of
five days, or (ii) default is made in the payment of the principal of or any
installment of the principal of any Note when the same becomes due and payable,
the Issuer will, upon demand of the Indenture Trustee, pay to it, for the
benefit of the Noteholders, the whole amount then due and payable on such Notes
for principal and interest (and any Noteholders' Interest LIBOR Carryover), with
interest upon the overdue principal, and, to the extent payment at such rate of
interest shall be legally enforceable, upon overdue installments of interest
(and any Noteholders' Interest LIBOR Carryover), at the rate specified in
Section 2.07 and in addition thereto such further amount as shall be sufficient
to cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Indenture Trustee and
its agents and counsel.
(b) In case the Issuer shall fail forthwith to pay such amounts upon
such demand, the Indenture Trustee, in its own name and as trustee of an express
trust, may institute a Proceeding for the collection of the sums so due and
unpaid, and may prosecute such Proceeding to judgment or final decree, and may
enforce the same against the Issuer or other obligor upon such Notes and collect
in the manner provided by law out of the property of the Issuer or other obligor
upon such Notes, wherever situated, the moneys adjudged or decreed to be
payable.
(c) If an Event of Default occurs and is continuing, the Indenture
Trustee may, as more particularly provided in Section 5.04, in its discretion,
proceed to protect and enforce its
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rights and the rights of the Noteholders, by such appropriate Proceedings as the
Indenture Trustee shall deem most effective to protect and enforce any such
rights, whether for the specific enforcement of any covenant or agreement in
this Indenture or in aid of the exercise of any power granted herein, or to
enforce any other proper remedy or legal or equitable right vested in the
Indenture Trustee by this Indenture or by law.
(d) In case there shall be pending, relative to the Issuer or any other
obligor upon the Notes or any Person having or claiming an ownership interest in
the Indenture Trust Estate, Proceedings under Title 11 of the United States Code
or any other applicable Federal or state bankruptcy, insolvency or other similar
law, or in case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or
taken possession of the Issuer or its property or such other obligor or Person,
or in case of any other comparable judicial Proceedings relative to the Issuer
or other obligor upon the Notes, or to the creditors or property of the Issuer
or such other obligor, the Indenture Trustee, irrespective of whether the
principal of any Notes shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Indenture Trustee shall
have made any demand pursuant to the provisions of this Section, shall be
entitled and empowered, by intervention in such proceedings or otherwise:
(i) to file and prove a claim or claims for the whole
amount of principal and interest (including any Noteholders' Interest
LIBOR Carryover) owing and unpaid in respect of the Notes and to file
such other papers or documents as may be necessary or advisable in
order to have the claims of the Indenture Trustee (including any claim
for reasonable compensation to the Indenture Trustee and each
predecessor Indenture Trustee, and their respective agents, attorneys
and counsel, and for reimbursement of all expenses and liabilities
incurred, and all advances made, by the Indenture Trustee and each
predecessor Indenture Trustee, except as a result of negligence or bad
faith) and of the Noteholders allowed in such Proceedings;
(ii) unless prohibited by applicable law and
regulations, to vote on behalf of the Noteholders in any election of a
trustee, a standby trustee or Person performing similar functions in
any such Proceedings;
(iii) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute all amounts
received with respect to the claims
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of the Noteholders and of the Indenture Trustee on their behalf; and
(iv) to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims
of the Indenture Trustee or the Noteholders allowed in any judicial
proceedings relative to the Issuer, its creditors and its property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by each of such Noteholders to make
payments to the Indenture Trustee, and, in the event that the Indenture Trustee
shall consent to the making of payments directly to such Noteholders, to pay to
the Indenture Trustee such amounts as shall be sufficient to cover reasonable
compensation to the Indenture Trustee, each predecessor Indenture Trustee and
their respective agents, attorneys and counsel, and all other expenses and
liabilities incurred, and all advances made, by the Indenture Trustee and each
predecessor Indenture Trustee except as a result of negligence or bad faith.
(e) Nothing herein contained shall be deemed to authorize the Indenture
Trustee to authorize or consent to or vote for or accept or adopt on behalf of
any Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Noteholder thereof or to
authorize the Indenture Trustee to vote in respect of the claim of any
Noteholder in any such proceeding except, as aforesaid, to vote for the election
of a trustee in bankruptcy or similar Person.
(f) All rights of action and of asserting claims under this Indenture,
or under any of the Notes, may be enforced by the Indenture Trustee without the
possession of any of the Notes or the production thereof in any trial or other
Proceedings relative thereto, and any such action or Proceedings instituted by
the Indenture Trustee shall be brought in its own name as trustee of an express
trust, and any recovery of judgment, subject to the payment of the expenses,
disbursements and compensation of the Indenture Trustee, each predecessor
Indenture Trustee and their respective agents and attorneys, shall be for the
ratable benefit of the Noteholders.
(g) In any Proceedings brought by the Indenture Trustee (and also any
Proceedings involving the interpretation of any provision of this Indenture to
which the Indenture Trustee shall be a party), the Indenture Trustee shall be
held to represent all the Noteholders, and it shall not be necessary to make any
Noteholder a party to any such Proceedings.
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SECTION 5.04. Remedies; Priorities. (a) If an Event of Default shall
have occurred and be continuing, the Indenture Trustee may do one or more of the
following (subject to Section 5.05):
(i) institute Proceedings in its own name and as
trustee of an express trust for the collection of all amounts then
payable on the Notes or under this Indenture with respect thereto,
whether by declaration or otherwise, enforce any judgment obtained, and
collect from the Issuer and any other obligor upon such Notes moneys
adjudged due;
(ii) institute Proceedings from time to time for the
complete or partial foreclosure of this Indenture with respect to the
Indenture Trust Estate;
(iii) exercise any remedies of a secured party under the
UCC and take any other appropriate action to protect and enforce the
rights and remedies of the Indenture Trustee and the Noteholders; and
(iv) sell the Indenture Trust Estate or any portion
thereof or rights or interest therein, at one or more public or private
sales called and conducted in any manner permitted by law;
provided, however, that the Indenture Trustee may not sell or otherwise
liquidate the Indenture Trust Estate following an Event of Default, other than
an Event of Default described in Section 5.01(i) or (ii), unless (A) the
Noteholders of 100% of the Outstanding Amount of the Notes consent thereto, (B)
the proceeds of such sale or liquidation distributable to the Noteholders are
sufficient to discharge in full all amounts then due and unpaid upon such Notes
for principal and interest or (C) the Indenture Trustee determines that the
Indenture Trust Estate will not continue to provide sufficient funds for the
payment of principal of and interest on the Notes as they would have become due
if the Notes had not been declared due and payable, and the Indenture Trustee
obtains the consent of Noteholders of 66-2/3% of the Outstanding Amount of the
Notes. In determining such sufficiency or insufficiency with respect to clauses
(B) and (C), the Indenture Trustee may, but need not, obtain and rely upon an
opinion of an Independent investment banking or accounting firm of national
reputation as to the feasibility of such proposed action and as to the
sufficiency of the Indenture Trust Estate for such purpose. In addition, the
Indenture Trustee may not in the exercise of its remedies of foreclosure or
otherwise hereunder act as the holder of legal title of the Financed Student
Loans unless it, or a co-trustee appointed by it pursuant to Section 6.10, is
eligible to do so under the definition of
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"eligible lender" under Section 435(d) of the Higher Education Act.
(b) If the Indenture Trustee collects any money or property pursuant to
this Article V, it shall pay out the money or property in the following order:
FIRST: to the Indenture Trustee for amounts due under Section
6.07;
SECOND: to the Master Servicer for due and unpaid Servicing
Fees;
THIRD: to Noteholders for amounts due and unpaid on the Notes
for interest, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Notes for interest;
FOURTH: to the Issuer for distribution of interest due and
unpaid to the Certificateholders;
FIFTH: to Class A-1 Noteholders for amounts due and unpaid on
the Class A-1 Notes for principal, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Class A-1 Notes for principal;
SIXTH: to Class A-2 Noteholders for amounts due and unpaid on
the Class A-2 Notes for principal, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Class A-2 Notes for principal;
SEVENTH: to the Issuer for distribution of principal due and
unpaid to the Certificateholders;
EIGHTH: to Noteholders for any unpaid Noteholders' Interest
LIBOR Carryover, ratably, without preference or priority of any kind,
according to the amount of such Noteholders' Interest LIBOR Carryover
attributable to each Note;
NINTH: to the Issuer for distribution to the
Certificateholders of any unpaid Certificateholders' Interest LIBOR
Carryover; and
TENTH: to the Issuer, for distribution in accordance with the
terms of the Administration Agreement.
The Indenture Trustee may fix a record date and
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payment date for any payment to Noteholders pursuant to this Section. At least
15 days before such record date, the Issuer shall mail to each Noteholder and
the Indenture Trustee a notice that states the record date, the payment date and
the amount to be paid.
SECTION 5.05. Optional Preservation of the Indenture Trust Estate. If
the Notes have been declared to be due and payable under Section 5.02 following
an Event of Default and such declaration and its consequences have not been
rescinded and annulled, the Indenture Trustee may, but need not, elect to
maintain possession of the Indenture Trust Estate. It is the desire of the
parties hereto and the Noteholders that there be at all times sufficient funds
for the payment of principal of and interest (including any Noteholders'
Interest LIBOR Carryover) on the Notes, and the Indenture Trustee shall take
such desire into account when determining whether to maintain possession of the
Indenture Trust Estate. In determining whether to maintain possession of the
Indenture Trust Estate, the Indenture Trustee may, but need not, obtain and rely
upon an opinion (which shall be obtained at the expense of the Issuer) of an
Independent investment banking or accounting firm of national reputation as to
the feasibility of such proposed action and as to the sufficiency of the
Indenture Trust Estate for such purpose.
SECTION 5.06. Limitation of Suits. No Noteholder shall have any right
to institute any Proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless:
(i) such Noteholder has previously given written notice
to the Indenture Trustee of a continuing Event of Default;
(ii) the Noteholders of not less than 25% of the
Outstanding Amount of the Notes have made written request to the
Indenture Trustee to institute such Proceeding in respect of such Event
of Default in its own name as Indenture Trustee hereunder;
(iii) such Noteholder or Noteholders have offered to the
Indenture Trustee reasonable indemnity against the costs, expenses and
liabilities to be incurred in complying with such request;
(iv) the Indenture Trustee for 60 days after its receipt
of such notice, request and offer of indemnity has failed to institute
such Proceeding; and
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(v) no direction inconsistent with such written request
has been given to the Indenture Trustee during such 60-day period by
the Noteholders of a majority of the Outstanding Amount of the Notes;
it being understood and intended that no one or more Noteholders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other
Noteholders or to obtain or to seek to obtain priority or preference over any
other Noteholders or to enforce any right under this Indenture, except in the
manner herein provided.
In the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Noteholders, each
representing less than a majority of the Outstanding Amount of the Notes, the
Indenture Trustee in its sole discretion may determine what action, if any,
shall be taken, notwithstanding any other provisions of this Indenture.
SECTION 5.07. Unconditional Rights of Noteholders To Receive Principal
and Interest. Notwithstanding any other provisions in this Indenture, any
Noteholder shall have the right, which is absolute and unconditional, to receive
payment of the principal of and interest, if any, on such Note on or after the
respective due dates thereof expressed in such Note or in this Indenture (or, in
the case of redemption, on or after the Redemption Date) and to institute suit
for the enforcement of any such payment, and such right shall not be impaired
without the consent of such Noteholder.
SECTION 5.08. Restoration of Rights and Remedies. If the Indenture
Trustee or any Noteholder has instituted any Proceeding to enforce any right or
remedy under this Indenture and such Proceeding has been discontinued or
abandoned for any reason or has been determined adversely to the Indenture
Trustee or to such Noteholder, then and in every such case the Issuer, the
Indenture Trustee and the Noteholders shall, subject to any determination in
such Proceeding, be restored severally and respectively to their former
positions hereunder, and thereafter all rights and remedies of the Indenture
Trustee and the Noteholders shall continue as though no such Proceeding had been
instituted.
SECTION 5.09. Rights and Remedies Cumulative. No right or remedy herein
conferred upon or reserved to the Indenture Trustee or to the Noteholders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of
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any right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 5.10. Delay or Omission Not a Waiver. No delay or omission of
the Indenture Trustee or any Noteholder to exercise any right or remedy accruing
upon any Default shall impair any such right or remedy or constitute a waiver of
any such Default or an acquiescence therein. Every right and remedy given by
this Article V or by law to the Indenture Trustee or to the Noteholders may be
exercised from time to time, and as often as may be deemed expedient, by the
Indenture Trustee or by the Noteholders, as the case may be.
SECTION 5.11. Control by Noteholders. The Noteholders of a majority of
the Outstanding Amount of the Notes shall have the right to direct the time,
method and place of conducting any Proceeding for any remedy available to the
Indenture Trustee with respect to the Notes or exercising any trust or power
conferred on the Indenture Trustee; provided that
(i) such direction shall not be in conflict with any
rule of law or with this Indenture;
(ii) subject to the express terms of Section 5.04, any
direction to the Indenture Trustee to sell or liquidate the Indenture
Trust Estate shall be by the Noteholders of 100% of the Outstanding
Amount of the Notes;
(iii) if the conditions set forth in Section 5.05 have
been satisfied and the Indenture Trustee elects to retain the Indenture
Trust Estate pursuant to such Section, then any direction to the
Indenture Trustee by Noteholders of less than 100% of the Outstanding
Amount of the Notes to sell or liquidate the Indenture Trust Estate
shall be of no force and effect; and
(iv) the Indenture Trustee may take any other action
deemed proper by the Indenture Trustee that is not inconsistent with
such direction;
provided, however, that, subject to Section 6.01, the Indenture Trustee need not
take any action that it determines might involve it in liability or might
materially adversely affect the rights of any Noteholders not consenting to such
action.
SECTION 5.12. Waiver of Past Defaults. Prior to the time a judgment
or decree for payment of money due has been obtained as described in Section
5.02, the Noteholders of not less than a majority of the Outstanding Amount of
the Notes may waive any
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past Default and its consequences except a Default (a) in payment when due of
principal of or interest (including, subject to the limitations of Sections
2.07(d) and 8.02(c), any Noteholders' Interest LIBOR Carryover) on any of the
Notes or (b) in respect of a covenant or provision hereof which cannot be
modified or amended without the consent of each Noteholder. In the case of any
such waiver, the Issuer, the Indenture Trustee and the Noteholders shall be
restored to their former positions and rights hereunder, respectively; but no
such waiver shall extend to any subsequent or other Default or impair any right
consequent thereto.
Upon any such waiver, such Default shall cease to exist and be deemed
to have been cured and not to have occurred for every purpose of this Indenture;
but no such waiver shall extend to any subsequent or other Default or impair any
right consequent thereto.
SECTION 5.13. Undertaking for Costs. All parties to this Indenture
agree, and each Noteholder by such Noteholder's acceptance of any Note shall be
deemed to have agreed, that any court may in its discretion require, in any suit
for the enforcement of any right or remedy under this Indenture, or in any suit
against the Indenture Trustee for any action taken, suffered or omitted by it as
Indenture Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to (a) any suit instituted by the
Indenture Trustee, (b) any suit instituted by any Noteholder, or group of
Noteholders, in each case holding in the aggregate more than 10% of the
Outstanding Amount of the Notes or (c) any suit instituted by any Noteholder for
the enforcement of the payment of principal of or interest (including any
Noteholders' Interest LIBOR Carryover) on any Note on or after the respective
due dates expressed in such Note and in this Indenture (or, in the case of
redemption, on or after the Redemption Date).
SECTION 5.14. Waiver of Stay or Extension Laws. The Issuer covenants
(to the extent that it may lawfully do so) that it will not at any time insist
upon, or plead or in any manner whatsoever, claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, that may affect the covenants or the performance of this
Indenture; and the Issuer (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
will not hinder, delay or
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impede the execution of any power herein granted to the Indenture Trustee, but
will suffer and permit the execution of every such power as though no such law
had been enacted.
SECTION 5.15. Action on Notes. The Indenture Trustee's right to seek
and recover judgment on the Notes or under this Indenture shall not be affected
by the seeking, obtaining or application of any other relief under or with
respect to this Indenture. Neither the lien of this Indenture nor any rights or
remedies of the Indenture Trustee or the Noteholders shall be impaired by the
recovery of any judgment by the Indenture Trustee against the Issuer or by the
levy of any execution under such judgment upon any portion of the Indenture
Trust Estate or upon any of the assets of the Issuer. Any money or property
collected by the Indenture Trustee shall be applied in accordance with Section
5.04(b).
SECTION 5.16. Performance and Enforcement of Certain Obligations. (a)
Promptly following a request from the Indenture Trustee to do so and at the
Administrator's expense, the Issuer shall take all such lawful action as the
Indenture Trustee may request to compel or secure the performance and observance
by the Seller, the Administrator, the Master Servicer and any Subservicer, as
applicable, of each of their obligations to the Issuer under or in connection
with the Loan Sale Agreement, the Master Servicing Agreement and the
Administration Agreement and to exercise any and all rights, remedies, powers
and privileges lawfully available to the Issuer under or in connection with the
Loan Sale Agreement, the Master Servicing Agreement and the Administration
Agreement to the extent and in the manner directed by the Indenture Trustee,
including the transmission of notices of default on the part of the Seller, the
Master Servicer or the Administrator thereunder and the institution of legal or
administrative actions or proceedings to compel or secure performance by the
Seller, the Master Servicer or the Administrator of each of their obligations
under the Loan Sale Agreement, the Master Servicing Agreement or the
Administration Agreement.
(b) If an Event of Default has occurred and is continuing, the
Indenture Trustee may, and at the direction (which direction shall be in writing
or by telephone (confirmed in writing promptly thereafter)) of the Noteholders
of 66-2/3% of the Outstanding Amount of the Notes shall, exercise all rights,
remedies, powers, privileges and claims of the Issuer against the Seller, the
Master Servicer or the Administrator under or in connection with the Loan Sale
Agreement, the Master Servicing Agreement or the Administration Agreement,
including the right or power to take any action to compel or secure performance
or observance by the Seller, the Master Servicer or the
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Administrator of each of their obligations to the Issuer thereunder and to give
any consent, request, notice, direction, approval, extension or waiver under the
Loan Sale Agreement, the Master Servicing Agreement or the Administration
Agreement and any right of the Issuer to take such action shall be suspended.
ARTICLE VI
The Indenture Trustee
SECTION 6.01. Duties of Indenture Trustee. (a) If an Event of Default
has occurred and is continuing, the Indenture Trustee shall exercise the rights
and powers vested in it by this Indenture and use the same degree of care and
skill in their exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Indenture Trustee undertakes to perform such
duties and only such duties as are specifically set forth in this
Indenture and no implied covenants or obligations shall be read into
this Indenture against the Indenture Trustee; and
(ii) in the absence of bad faith on its part, the
Indenture Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Indenture Trustee and
conforming to the requirements of this Indenture; provided, however,
that the Indenture Trustee shall examine such certificates and opinions
to determine whether they conform to the requirements of this
Indenture.
(c) The Indenture Trustee may not be relieved from liability for its
own negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of
paragraph (b) of this Section;
(ii) the Indenture Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer unless it
is proved that the Indenture Trustee was negligent in ascertaining the
pertinent facts; and
(iii) the Indenture Trustee shall not be liable with
respect to any action it takes or omits to take in good
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faith in accordance with a direction received by it pursuant to
Sections 5.02, 5.11, 5.12 and 5.16.
(d) Every provision of this Indenture that in any way relates to the
Indenture Trustee is subject to paragraphs (a), (b), (c) and (g) of this
Section.
(e) The Indenture Trustee shall not be liable for interest on any money
received by it except as the Indenture Trustee may agree in writing with the
Issuer.
(f) Money held in trust by the Indenture Trustee need not be segregated
from other funds except to the extent required by law or the terms of this
Indenture or the Master Servicing Agreement.
(g) No provision of this Indenture shall require the Indenture Trustee
to expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayments
of such funds or adequate indemnity satisfactory to it against any loss,
liability or expense is not reasonably assured to it.
(h) Except as expressly provided in the Basic Documents, the Indenture
Trustee shall have no obligation to administer, service or collect the Financed
Student Loans or to maintain, monitor or otherwise supervise the administration,
servicing or collection of the Financed Student Loans.
(i) In the event that the Indenture Trustee is the Paying Agent or the
Note Registrar, the rights and protections afforded to the Indenture Trustee
pursuant to this Indenture shall also be afforded to the Indenture Trustee in
its capacity as Paying Agent or Note Registrar.
(j) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Indenture Trustee
shall be subject to the provisions of this Section and to the provisions of the
TIA.
SECTION 6.02. Rights of Indenture Trustee. (a) The Indenture Trustee
may rely on any document believed by it to be genuine and to have been signed or
presented by the proper Person. The Indenture Trustee need not investigate any
fact or matter stated in such document.
(b) Before the Indenture Trustee acts or refrains from acting in
connection with any matter contemplated by this Indenture or other Basic
Documents, it may require an Officers'
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Certificate of the Issuer or an Opinion of Counsel. The Indenture Trustee shall
not be liable for any action it takes or omits to take in good faith in reliance
on such Officers' Certificate or Opinion of Counsel.
(c) The Indenture Trustee may exercise any of the trusts and powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys or a custodian or nominee, and the Indenture Trustee shall
not be responsible for any misconduct or negligence on the part of, or for the
supervision of, any such agent, attorney, custodian or nominee appointed with
due care by it hereunder.
(d) The Indenture Trustee shall not be liable for any action it takes
or omits to take in good faith which it believes to be authorized or within its
rights or powers; provided, however, that the Indenture Trustee's conduct does
not constitute willful misconduct, negligence or bad faith.
(e) The Indenture Trustee may consult with counsel, and the advice or
opinion of counsel with respect to legal matters relating to this Indenture and
the other Basic Documents and the Notes shall be full and complete authorization
and protection from liability in respect to any action taken, omitted or
suffered by it hereunder in good faith and in accordance with the advice or
opinion of such counsel.
(f) Subject to clauses (a), (b), (c) and (g) of Section 6.01 hereof,
the Indenture Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or direction of any
Noteholder pursuant to this Indenture, unless such Noteholder shall have offered
to the Indenture Trustee security or indemnity reasonably satisfactory to the
Indenture Trustee against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction.
SECTION 6.03. Individual Rights of Indenture Trustee. The Indenture
Trustee in its individual or any other capacity may become the owner or pledgee
of Notes and may otherwise deal with the Issuer or its Affiliates with the same
rights it would have if it were not Indenture Trustee. Any Paying Agent, Note
Registrar, co-registrar or co-paying agent may do the same with like rights.
However, the Indenture Trustee must comply with Sections 6.11 and 6.12.
SECTION 6.04. Indenture Trustee's Disclaimer. The Indenture Trustee
shall not be responsible for and makes no representation as to the validity or
adequacy of this Indenture or the Notes, it shall not be accountable for the
Issuer's use of
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the proceeds from the Notes, and it shall not be responsible for any statement
of the Issuer in the Indenture or in any document issued in connection with the
sale of the Notes or in the Notes other than the Indenture Trustee's certificate
of authentication.
SECTION 6.05. Notice of Defaults. If a Default occurs and is continuing
and if it is either actually known or written notice of the existence thereof
has been delivered to a Responsible Officer of the Indenture Trustee, the
Indenture Trustee shall mail notice of the Default to each Noteholder and to the
Rating Agencies promptly after the Indenture Trustee obtains such knowledge or
receives such notice of the Default within 90 days after it occurs. Except in
the case of a Default in payment of principal of or interest (including any
Noteholders' Interest LIBOR Carryover) on any Note (including payments pursuant
to the mandatory redemption provisions of such Note), the Indenture Trustee may
withhold the notice if and so long as a committee of its Responsible Officers in
good faith determines that withholding the notice is in the interests of
Noteholders.
SECTION 6.06. Reports by Indenture Trustee to Noteholders. The Paying
Agent shall deliver to each Noteholder (and to each Person who was a Noteholder
at any time during the applicable calendar year) such information as may be
required to enable such holder to prepare its Federal and state income tax
returns. Within 60 days after each December 31 beginning with the December 31
following the date of this Indenture, the Indenture Trustee shall mail to each
Noteholder a brief report as of such December 31 that complies with TIA ss.
313(a) if required by said section. The Indenture Trustee shall also comply with
TIA ss. 313(b). A copy of each such report required pursuant to TIA ss. 313(a)
or (b) shall, at the time of such transmission to Noteholders, be filed by the
Indenture Trustee with the Commission and with each securities exchange, if any,
upon which the Notes are listed, provided that the Issuer has previously
notified the Indenture Trustee of such listing.
SECTION 6.07. Compensation and Indemnity. The Issuer shall cause the
Administrator to pay to the Indenture Trustee from time to time reasonable
compensation for its services and shall cause the Administrator to reimburse the
Indenture Trustee for all reasonable out-of-pocket expenses incurred or made by
it, including costs of collection, in addition to the compensation for its
services. Such expenses shall include the reasonable compensation and expenses,
disbursements and advances of the Indenture Trustee's agents, counsel,
accountants and experts. The Indenture Trustee's compensation shall not be
limited by any law on compensation of a trustee of an express trust. The Issuer
shall cause the Administrator to indemnify the Indenture Trustee,
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its officers, directors, employees and agents against any and all loss,
liability or expense (including attorneys' fees and expenses) incurred by it in
connection with the administration of this trust and the performance of its
duties hereunder and under the other Basic Documents. The Indenture Trustee
shall notify the Issuer and the Administrator promptly of any claim for which it
may seek indemnity. Failure by the Indenture Trustee to so notify the Issuer and
the Administrator shall not relieve the Issuer or the Administrator of its
obligations hereunder and under the other Basic Documents. The Issuer shall
cause the Administrator to defend the claim and the Administrator shall not be
liable for any additional legal fees and expenses of the Indenture Trustee after
it has assumed such defense; provided, however, that, in the event that there
may be a conflict between the positions of the Indenture Trustee and the
Administrator in conducting the defense of such claim, the Indenture Trustee
shall be entitled to separate counsel the fees and expenses of which shall be
paid by the Administrator on behalf of the Issuer. Neither the Issuer nor the
Administrator need reimburse any expense or indemnify against any loss,
liability or expense incurred by the Indenture Trustee through the Indenture
Trustee's own willful misconduct, negligence or bad faith.
The Issuer's and Administrator's payment obligations to the Indenture
Trustee pursuant to this Section shall survive the discharge of this Indenture.
When the Indenture Trustee incurs expenses after the occurrence of a Default
specified in Section 5.01(iv) or (v) with respect to the Issuer, the expenses
are intended to constitute expenses of administration under Title 11 of the
United States Code or any other applicable Federal or state bankruptcy,
insolvency or similar law.
SECTION 6.08. Replacement of Indenture Trustee. No resignation or
removal of the Indenture Trustee and no appointment of a successor Indenture
Trustee shall become effective until the acceptance of appointment by the
successor Indenture Trustee pursuant to this Section 6.08. The Indenture Trustee
may resign at any time by so notifying the Issuer. The Noteholders of a majority
in Outstanding Amount of the Notes may remove the Indenture Trustee by so
notifying the Indenture Trustee and may appoint a successor Indenture Trustee.
The Issuer shall remove the Indenture Trustee if:
(i) the Indenture Trustee fails to comply with Section
6.11;
(ii) an Insolvency Event occurs with respect to the
Indenture Trustee;
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(iii) a receiver or other public officer takes charge of
the Indenture Trustee or its property; or
(iv) the Indenture Trustee otherwise becomes incapable
of acting.
If the Indenture Trustee resigns or is removed or if a vacancy exists
in the office of Indenture Trustee for any reason (the Indenture Trustee in such
event being referred to herein as the retiring Indenture Trustee), the Issuer
shall promptly appoint a successor Indenture Trustee. A former Indenture Trustee
shall not be liable for any acts or omissions of any successor Indenture
Trustee.
A successor Indenture Trustee shall deliver a written acceptance of its
appointment to the retiring Indenture Trustee and to the Issuer and shall notify
the Rating Agencies in writing of such acceptance. Thereupon the resignation or
removal of the retiring Indenture Trustee shall become effective, and the
successor Indenture Trustee shall have all the rights, powers and duties of the
Indenture Trustee under this Indenture. The successor Indenture Trustee shall
mail a notice of its succession to Noteholders. The retiring Indenture Trustee
shall promptly transfer all property held by it as Indenture Trustee to the
successor Indenture Trustee.
If a successor Indenture Trustee does not take office within 60 days
after the retiring Indenture Trustee resigns or is removed, the retiring
Indenture Trustee, the Issuer or the Noteholders of a majority in Outstanding
Amount of the Notes may petition any court of competent jurisdiction for the
appointment of a successor Indenture Trustee.
If the Indenture Trustee fails to comply with Section 6.11, any
Noteholder may petition any court of competent jurisdiction for the removal of
the Indenture Trustee and the appointment of a successor Indenture Trustee.
Notwithstanding the replacement of the Indenture Trustee pursuant to
this Section, the Issuer's and the Administrator's obligations under Section
6.07 shall continue for the benefit of the retiring Indenture Trustee.
SECTION 6.09. Successor Indenture Trustee by Merger. If the Indenture
Trustee consolidates with, merges or converts into, or transfers all or
substantially all its corporate trust business or assets to, another corporation
or banking association, the resulting, surviving or transferee corporation
without any further act shall be the successor Indenture Trustee; provided that
such corporation or banking association shall be
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otherwise qualified and eligible under Section 6.11. The Indenture Trustee
shall provide Rating Agencies prior written notice of any such transaction.
In case at the time such successor or successors by merger, conversion
or consolidation to the Indenture Trustee shall succeed to the trusts created by
this Indenture any of the Notes shall have been authenticated but not delivered,
any such successor to the Indenture Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Notes so
authenticated; and in case at that time any of the Notes shall not have been
authenticated, any successor to the Indenture Trustee may authenticate such
Notes either in the name of any predecessor hereunder or in the name of the
successor to the Indenture Trustee; and in all such cases such certificates
shall have the full force which it is anywhere in the Notes or in this Indenture
provided that the certificate of the Indenture Trustee shall have.
SECTION 6.10. Appointment of Co-Trustee or Separate Trustee. (a)
Notwithstanding any other provisions of this Indenture, at any time, for the
purpose of meeting any legal requirement of any jurisdiction in which any part
of the Indenture Trust Estate may at the time be located, the Indenture Trustee
shall have the power and may execute and deliver all instruments to appoint one
or more Persons to act as a co-trustee or co-trustees, or separate trustee or
separate trustees, of all or any part of the Indenture Trust Estate, and to vest
in such Person or Persons, in such capacity and for the benefit of the
Noteholders, such title to the Indenture Trust Estate, or any part hereof, and,
subject to the other provisions of this Section, such powers, duties,
obligations, rights and trusts as the Indenture Trustee may consider necessary
or desirable. No co-trustee or separate trustee hereunder shall be required to
meet the terms of eligibility as a successor trustee under Section 6.11 and no
notice to Noteholders of the appointment of any co-trustee or separate trustee
shall be required under Section 6.08 hereof. The Indenture Trustee shall notify
the Rating Agencies of any appointment of a co-trustee or separate trustee
hereunder.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations
conferred or imposed upon the Indenture Trustee shall be conferred or
imposed upon and exercised or performed by the Indenture Trustee and
such separate trustee or co-trustee jointly (it being understood that
such separate trustee or
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co-trustee is not authorized to act separately without the Indenture
Trustee joining in such act), except to the extent that under any law
of any jurisdiction in which any particular act or acts are to be
performed the Indenture Trustee shall be incompetent or unqualified to
perform such act or acts, in which event such rights, powers, duties
and obligations (including the holding of title to the Indenture Trust
Estate or any portion thereof in any such jurisdiction) shall be
exercised and performed singly by such separate trustee or co-trustee,
but solely at the direction of the Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by
reason of any act or omission of any other trustee hereunder; and
(iii) the Indenture Trustee may at any time accept the
resignation of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Indenture Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Indenture and
the conditions of this Article VI. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Indenture Trustee or separately, as may be provided therein, subject to all the
provisions of this Indenture, specifically including every provision of this
Indenture relating to the conduct of, affecting the liability of, or affording
protection to, the Indenture Trustee. Every such instrument shall be filed with
the Indenture Trustee.
(d) Any separate trustee or co-trustee may at any time constitute the
Indenture Trustee, its agent or attorney-in-fact with full power and authority,
to the extent not prohibited by law, to do any lawful act under or in respect of
this Indenture on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all its
estates, properties, rights, remedies and trusts shall vest in and be exercised
by the Indenture Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
SECTION 6.11. Eligibility; Disqualification. The Indenture Trustee
shall at all times satisfy the requirements of TIA ss. 310(a). The Indenture
Trustee shall have a combined capital and surplus of at least $50,000,000 as set
forth in its most
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recent published annual report of condition and it shall have a long term debt
rating of Baa3 or better by Moody's. The Indenture Trustee shall comply with TIA
ss. 310(b), including the optional provision permitted by the second sentence of
TIA ss. 310(b)(9); provided, however, that there shall be excluded from the
operation of TIA ss. 310(b)(1) any indenture or indentures under which other
securities of the Issuer are outstanding if the requirements for such exclusion
set forth in TIA ss. 310(b)(1) are met.
SECTION 6.12. Preferential Collection of Claims Against Issuer. The
Indenture Trustee shall comply with TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). An Indenture Trustee who has resigned or
been removed shall be subject to TIA ss. 311(a) to the extent indicated.
ARTICLE VII
Noteholders' Lists and Reports
SECTION 7.01. Issuer To Furnish Indenture Trustee Names and Addresses
of Noteholders. The Issuer will furnish or cause to be furnished to the
Indenture Trustee (a) not more than five days after the earlier of (i) each
Record Date and (ii) three months after the last Record Date, a list, in such
form as the Indenture Trustee may reasonably require, of the names and addresses
of the Noteholders as of such Record Date, (b) at such other times as the
Indenture Trustee may request in writing, within 30 days after receipt by the
Issuer of any such request, a list of similar form and content as of a date not
more than 10 days prior to the time such list is furnished; provided, however,
that so long as the Indenture Trustee is the Note Registrar, no such list shall
be required to be furnished.
SECTION 7.02. Preservation of Information; Communications to
Noteholders. (a) The Indenture Trustee shall preserve, in as current a form as
is reasonably practicable, the names and addresses of the Noteholders contained
in the most recent list furnished to the Indenture Trustee as provided in
Section 7.01 and the names and addresses of Noteholders received by the
Indenture Trustee in its capacity as Note Registrar. The Indenture Trustee may
destroy any list furnished to it as provided in such Section 7.01 upon receipt
of a new list so furnished.
(b) Noteholders may communicate pursuant to TIA ss. 312(b) with other
Noteholders with respect to their rights under this Indenture or under the
Notes.
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(c) The Issuer, the Indenture Trustee and the Note Registrar shall have
the protection of TIA ss.312(c).
(d) The Indenture Trustee shall furnish to the Noteholders promptly
upon receipt of a written request therefor, duplicates or copies of all reports,
notices, requests, demands, certificates, financial statements and any other
instruments furnished to the Indenture Trustee under the Basic Documents.
(e) The Indenture Trustee shall provide notice to the Noteholders as
provided in Section 9.02 of the Trust Agreement, and shall provide notice to
Noteholders of any amendment or supplement to the Trust Agreement as provided in
Section 11.01 of the Trust Agreement.
SECTION 7.03. Reports by Issuer. (a) The Issuer shall:
(i) file with the Indenture Trustee, within 15 days
after the Issuer is required to file the same with the Commission,
copies of the annual reports and of the information, documents and
other reports (or copies of such portions of any of the foregoing as
the Commission may from time to time by rules and regulations
prescribe) which the Issuer may be required to file with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act;
(ii) file with the Indenture Trustee and the Commission
in accordance with rules and regulations prescribed from time to time
by the Commission such additional information, documents and reports
with respect to compliance by the Issuer with the conditions and
covenants of this Indenture as may be required from time to time by
such rules and regulations; and
(iii) supply to the Indenture Trustee (and the Indenture
Trustee shall transmit by mail to all Noteholders described in TIA ss.
313(c)) such summaries of any information, documents and reports
required to be filed by the Issuer pursuant to clauses (i) and (ii) of
this Section 7.03(a) as may be required by rules and regulations
prescribed from time to time by the Commission.
(b) Unless the Issuer otherwise determines, the fiscal year of the
Issuer shall end on December 31 of each year.
(c) Copies of all reports to be sent to the Indenture Trustee under
this Section 7.03 shall be mailed to the Rating Agencies by the Issuer at the
same time.
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ARTICLE VIII
Accounts, Disbursements and Releases
SECTION 8.01. Collection of Money. Except as otherwise expressly
provided herein, the Indenture Trustee may demand payment or delivery of, and
shall receive and collect, directly and without intervention or assistance of
any fiscal agent or other intermediary, all money and other property payable to
or receivable by the Indenture Trustee pursuant to this Indenture. The Indenture
Trustee shall apply all such money received by it on behalf of itself and the
Noteholders pursuant to the Loan Sale Agreement, the Master Servicing Agreement
or the Administration Agreement as provided in this Indenture. Except as
otherwise expressly provided in this Indenture, if any default occurs in the
making of any payment or performance under any agreement or instrument that is
part of the Indenture Trust Estate, the Indenture Trustee may take such action
as may be appropriate to enforce such payment or performance, including the
institution and prosecution of appropriate Proceedings. Any such action shall be
without prejudice to any right to claim a Default under this Indenture and any
right to proceed thereafter as provided in Article V.
SECTION 8.02. Trust Accounts. (a) On or prior to the Closing Date,
the Issuer shall cause the Administrator to establish and maintain, in the name
of the Indenture Trustee, for the benefit of the Noteholders and the
Certificateholders, the Trust Accounts as provided in Section 2(c) of the
Administration Agreement.
(b) On or before the Business Day preceding each Interest Payment Date
and Distribution Date, all Monthly Available Funds with respect to the preceding
Monthly Collection Period (or in the case of a Distribution Date, Available
Funds with respect to the preceding Collection Period) will be deposited in the
Collection Account as provided in Section 4.01 of the Master Servicing
Agreement. On each Interest Payment Date that is not a Distribution Date, the
Noteholders' Interest Distribution Amount with respect to the preceding Monthly
Collection Period, and on each Distribution Date, the Noteholders' Distribution
Amount with respect to the preceding Collection Period will be distributed from
the Collection Account and any other Trust Account to the Indenture Trustee (or
any other Paying Agent) on behalf of the Noteholders as provided in Sections
2(d) and 2(e) of the Administration Agreement.
(c) On each Interest Payment Date that is not a Distribution Date or
Redemption Date, the Indenture Trustee (or any other Paying Agent) shall
distribute all amounts received by
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it on behalf of Noteholders pursuant to paragraph (b) above to Noteholders in
respect of the Notes to the extent of amounts due and unpaid on the Notes for
interest (but not for any Noteholders' Interest LIBOR Carryover) in the
following amounts and in the following order of priority: the Noteholders'
Interest Distribution Amount, to the Class A-1 Noteholders and the Class A-2
Noteholders; provided that if there are not sufficient funds received to pay the
entire amount of accrued and unpaid interest then due on the Notes, the amounts
so received shall be applied to the payment of such interest on the Notes on a
pro rata basis.
(d) On each Distribution Date and Redemption Date, the Indenture
Trustee (or any other Paying Agent) shall distribute all amounts received by it
on behalf of Noteholders pursuant to paragraph (b) above to Noteholders in
respect of the Notes to the extent of amounts due and unpaid on the Notes for
principal, interest and any Noteholders' Interest LIBOR Carryover in the
following amounts and in the following order of priority:
(i) the Noteholders' Interest Distribution Amount, to
the Class A-1 Noteholders and the Class A-2 Noteholders in an amount
equal to the accrued and unpaid interest on the Notes; provided that if
there are not sufficient funds received to pay the entire amount of
accrued and unpaid interest then due on the Notes, the amounts so
received shall be applied to the payment of such interest on the Notes
on a pro rata basis;
(ii) the Noteholders' Principal Distribution Amount plus
any amount payable out of Reserve Account Excess as principal to the
Noteholders pursuant to Section 2(e)(ii)(A) of the Administration
Agreement, to the Class A-1 Noteholders until the Outstanding Amount of
the Class A-1 Notes is reduced to zero and then to the Class A-2
Noteholders until the Outstanding Amount of the Class A-2 Notes is
reduced to zero;
(iii) the Noteholders' Interest LIBOR Carryover, if any,
to the Class A-1 Noteholders and the Class A-2 Noteholders; provided
that if insufficient funds are received to pay the entire Noteholders'
Interest LIBOR Carryover then outstanding, the amounts so received
shall be applied to the payment of such Noteholders' Interest LIBOR
Carryover on a pro rata basis; and
(iv) any amount payable out of Reserve Account Excess as
principal to the Noteholders pursuant to Section 2(e)(ii)(D) of the
Administration Agreement, to the Class A-1 Noteholders until the
Outstanding Amount of the Class
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A-1 Notes is reduced to zero and then to the Class A-2 Noteholders
until the Outstanding Amount of the Class A-2 Notes is reduced to zero.
SECTION 8.03. General Provisions Regarding Accounts. (a) So long as no
Default shall have occurred and be continuing, all or a portion of the funds in
the Trust Accounts shall be invested in Eligible Investments and reinvested by
the Indenture Trustee upon Issuer Order, subject to the provisions of Section
2(c) of the Administration Agreement. All income or other gain from investments
of moneys deposited in the Trust Accounts shall be deposited by the Indenture
Trustee in the Collection Account, and any loss resulting from such investments
shall be charged to such Trust Account. The Issuer will not direct the Indenture
Trustee to make any investment of any funds or to sell any investment held in
any of the Trust Accounts unless the security interest granted and perfected in
such account will continue to be perfected in such investment or the proceeds of
such sale, in either case without any further action by any Person, and, in
connection with any direction to the Indenture Trustee to make any such
investment or sale, if requested by the Indenture Trustee, the Issuer shall
deliver to the Indenture Trustee an Opinion of Counsel, acceptable to the
Indenture Trustee, to such effect.
(b) Subject to Section 6.01(c), the Indenture Trustee shall not in any
way be held liable by reason of any insufficiency in any of the Trust Accounts
resulting from any loss on any Eligible Investment included therein except for
losses attributable to the Indenture Trustee's failure to make payments on such
Eligible Investments issued by the Indenture Trustee, in its commercial capacity
as principal obligor and not as trustee, in accordance with their terms.
(c) If (i) the Issuer shall have failed to give investment directions
for any funds on deposit in the Trust Accounts to the Indenture Trustee by 10:00
a.m. New York time (or such other time as may be agreed by the Issuer and
Indenture Trustee) on any Business Day; or (ii) a Default shall have occurred
and be continuing with respect to the Notes but the Notes shall not have been
declared due and payable pursuant to Section 5.02, or, if such Notes shall have
been declared due and payable following an Event of Default, amounts collected
or receivable from the Indenture Trust Estate are being applied in accordance
with Section 5.05 as if there had not been such a declaration; then the
Indenture Trustee shall, to the fullest extent practicable, invest and reinvest
funds in the Trust Accounts in one or more Eligible Investments.
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SECTION 8.04. Release of Indenture Trust Estate. (a) Subject to the
payment of its fees and expenses pursuant to Section 6.07, the Indenture Trustee
may, and when required by the provisions of this Indenture shall, execute
instruments to release property from the lien of this Indenture, or convey the
Indenture Trustee's interest in the same, in a manner and under circumstances
that are not inconsistent with the provisions of this Indenture. No party
relying upon an instrument executed by the Indenture Trustee as provided in this
Article VIII shall be bound to ascertain the Indenture Trustee's authority,
inquire into the satisfaction of any conditions precedent or see to the
application of any moneys.
(b) The Indenture Trustee shall, at such time as there are no Notes
Outstanding and all sums due the Indenture Trustee pursuant to Section 6.07 have
been paid, release any remaining portion of the Indenture Trust Estate that
secured the Notes from the lien of this Indenture and release to the Issuer or
any other Person entitled thereto any funds then on deposit in the Trust
Accounts. The Indenture Trustee shall release property from the lien of this
Indenture pursuant to this Section 8.04(b) only upon receipt of an Issuer
Request accompanied by an Officers' Certificate of the Issuer, an Opinion of
Counsel and (if required by the TIA) Independent Certificates in accordance with
TIA ss.ss. 314(c) and 314(d)(1) meeting the applicable requirements of Section
11.01.
SECTION 8.05. Opinion of Counsel. The Indenture Trustee shall receive
at least seven days' notice when requested by the Issuer to take any action
pursuant to Section 8.04(a), accompanied by copies of any instruments involved,
and the Indenture Trustee shall also require, as a condition to such action, an
Opinion of Counsel, in form and substance satisfactory to the Indenture Trustee,
stating the legal effect of any such action, outlining the steps required to
complete the same, and concluding that all conditions precedent to the taking of
such action have been complied with and such action will not materially and
adversely impair the security for the Notes or the rights of the Noteholders in
contravention of the provisions of this Indenture; provided, however, that such
Opinion of Counsel shall not be required to express an opinion as to the fair
value of the Indenture Trust Estate. Counsel rendering any such opinion may
rely, without independent investigation, on the accuracy and validity of any
certificate or other instrument delivered to the Indenture Trustee in connection
with any such action.
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ARTICLE IX
Supplemental Indentures
SECTION 9.01. Supplemental Indentures Without Consent of Noteholders.
(a) Without the consent of any Noteholders but with prior notice to the Rating
Agencies, the Issuer and the Indenture Trustee, when authorized by an Issuer
Order, at any time and from time to time, may enter into one or more indentures
supplemental hereto (which shall conform to the provisions of the Trust
Indenture Act as in force at the date of the execution thereof), in form
satisfactory to the Indenture Trustee, for any of the following purposes:
(i) to correct or amplify the description of any
property at any time subject to the lien of this Indenture, or, better
to assure, convey and confirm unto the Indenture Trustee any property
subject or required to be subjected to the lien of this Indenture, or
to subject to the lien of this Indenture additional property;
(ii) to evidence the succession, in compliance with the
applicable provisions hereof, of another person to the Issuer, and the
assumption by any such successor of the covenants of the Issuer herein
and in the Notes contained;
(iii) to add to the covenants of the Issuer, for the
benefit of the Noteholders, or to surrender any right or power herein
conferred upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any
property to or with the Indenture Trustee;
(v) to cure any ambiguity, to correct or supplement any
provision herein or in any supplemental indenture which may be
inconsistent with any other provision herein or in any supplemental
indenture or to make any other provisions with respect to matters or
questions arising under this Indenture or in any supplemental
indenture; provided that such action shall not materially adversely
affect the interests of the Noteholders;
(vi) to evidence and provide for the acceptance of the
appointment hereunder by a successor trustee with respect to the Notes
and to add to or change any of the provisions of this Indenture as
shall be necessary to facilitate the administration of the trusts
hereunder by more than one trustee, pursuant to the requirements of
Article VI;
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(vii) to modify, eliminate or add to the provisions of
this Indenture to such extent as shall be necessary to effect the
qualification of this Indenture under the TIA or under any similar
Federal statute hereafter enacted and to add to this Indenture such
other provisions as may be expressly required by the TIA; or
(viii) in connection with any merger or consolidation of
the Depositor, the Administrator, the Master Servicer or the Seller or
a transfer of properties or assets of the Depositor, the Administrator,
the Master Servicer or the Seller in a transaction permitted by the
Basic Documents.
The Indenture Trustee is hereby authorized to join in the execution of
any such supplemental indenture and to make any further appropriate agreements
and stipulations that may be therein contained.
(b) The Issuer and the Indenture Trustee, when authorized by an Issuer
Order, may, also without the consent of any of the Noteholders but with prior
notice to the Rating Agencies, enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to, or changing in
any manner or eliminating any of the provisions of, this Indenture or of
modifying in any manner the rights of the Noteholders under this Indenture;
provided, however, that such action shall not, as evidenced by an Opinion of
Counsel, adversely affect in any material respect the interests of any
Noteholder.
SECTION 9.02. Supplemental Indentures with Consent of Noteholders. The
Issuer and the Indenture Trustee, when authorized by an Issuer Order, also may,
with prior notice to the Rating Agencies and with the consent of the Noteholders
of not less than a majority of the Outstanding Amount of the Notes, by Act of
such Noteholders delivered to the Issuer and the Indenture Trustee, enter into
an indenture or indentures supplemental hereto for the purpose of adding any
provisions to, or changing in any manner or eliminating any of the provisions
of, this Indenture or of modifying in any manner the rights of the Noteholders
under this Indenture; provided, however, that no such supplemental indenture
shall, without the consent of the Noteholder of each Outstanding Note affected
thereby:
(i) change the date of payment of any installment of
principal of or interest (including any Noteholders' Interest LIBOR
Carryover) on any Note, or reduce the principal amount thereof, the
interest rate thereon or the Redemption Price with respect thereto,
change the provisions of this Indenture relating to the application of
collections on, or the proceeds of the sale of, the Indenture Trust
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Estate to payment of principal of or interest (including any
Noteholders' Interest LIBOR Carryover) on the Notes, or change any
place of payment where, or the coin or currency in which, any Note or
the interest thereon is payable, or impair the right to institute suit
for the enforcement of the provisions of this Indenture requiring the
application of funds available therefor, as provided in Article V, to
the payment of any such amount due on the Notes on or after the
respective due dates thereof (or, in the case of redemption, on or
after the Redemption Date);
(ii) reduce the percentage of the Outstanding Amount of
the Notes, the consent of the Noteholders of which is required for any
such supplemental indenture, or the consent of the Noteholders of which
is required for any waiver of compliance with certain provisions of
this Indenture or certain defaults hereunder and their consequences
provided for in this Indenture;
(iii) modify or alter the provisions of the proviso to
the definition of the term "Outstanding";
(iv) reduce the percentage of the Outstanding Amount of
the Notes required to direct the Indenture Trustee to direct the Issuer
to sell or liquidate the Indenture Trust Estate pursuant to Section
5.04;
(v) modify any provision of this Section except to
increase any percentage specified herein or to provide that certain
additional provisions of this Indenture or the other Basic Documents
cannot be modified or waived without the consent of the Noteholder of
each Outstanding Note affected thereby;
(vi) modify any of the provisions of this Indenture in
such manner as to affect the calculation of the amount of any payment
of interest (including any Noteholders' Interest LIBOR Carryover) due
or any Note on any Interest Payment Date or principal due on any Note
on any Distribution Date (including the calculation of any of the
individual components of such calculation) or to affect the rights of
the Noteholders to the benefit of any provisions for the mandatory
redemption of the Notes contained herein; or
(vii) permit the creation of any lien ranking prior to or
on a parity with the lien of this Indenture with respect to any part of
the Indenture Trust Estate or, except as otherwise permitted or
contemplated herein, terminate the lien of this Indenture on any
property at any time subject
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hereto or deprive any Noteholder of any Note of the security provided
by the lien of this Indenture.
The Indenture Trustee may in its discretion determine whether or not
any Notes would be affected by any supplemental indenture and any such
determination shall be conclusive upon the Noteholders of all Notes, whether
theretofore or thereafter authenticated and delivered hereunder. The Indenture
Trustee shall not be liable for any such determination made in good faith.
It shall not be necessary for any Act of Noteholders under this Section
to approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
Promptly after the execution by the Issuer and the Indenture Trustee of
any supplemental indenture pursuant to this Section, the Indenture Trustee shall
mail to the Noteholders of the Notes to which such amendment or supplemental
indenture relates and to the Rating Agencies a notice setting forth in general
terms the substance of such supplemental indenture. Any failure of the Indenture
Trustee to mail such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such supplemental indenture.
SECTION 9.03. Execution of Supplemental Indentures. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modifications thereby of the trusts created
by this Indenture, the Indenture Trustee shall receive, and subject to Sections
6.01 and 6.02, shall be fully protected in relying upon, an Opinion of Counsel
stating that the execution of such supplemental indenture is authorized or
permitted by this Indenture. The Indenture Trustee may, but shall not be
obligated to, enter into any such supplemental indenture that affects the
Indenture Trustee's own rights, duties, liabilities or immunities under this
Indenture or otherwise.
SECTION 9.04. Effect of Supplemental Indenture. Upon the execution of
any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and be deemed to be modified and amended in accordance therewith with
respect to the Notes affected thereby, and the respective rights, limitations of
rights, obligations, duties, liabilities and immunities under this Indenture of
the Indenture Trustee, the Issuer and the Noteholders shall thereafter be
determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of any such
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supplemental indenture shall be and are deemed to be part of the terms and
conditions of this Indenture for any and all purposes.
SECTION 9.05. Conformity with Trust Indenture Act. Every amendment of
this Indenture and every supplemental indenture executed pursuant to this
Article IX shall conform to the requirements of the Trust Indenture Act as then
in effect so long as this Indenture shall then be qualified under the Trust
Indenture Act.
SECTION 9.06. Reference in Notes to Supplemental Indentures. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the Indenture Trustee shall,
bear a notation in form approved by the Indenture Trustee as to any matter
provided for in such supplemental indenture. If the Issuer or the Indenture
Trustee shall so determine, new Notes so modified as to conform, in the opinion
of the Indenture Trustee and the Issuer, to any such supplemental indenture may
be prepared and executed by the Issuer and authenticated and delivered by the
Indenture Trustee in exchange for Outstanding Notes.
ARTICLE X
Redemption of Notes
SECTION 10.01. Redemption. (a) In the event that on the Distribution
Date on which the Funding Period ends (or on the Distribution Date on or
immediately following the last day of the Funding Period, if the Funding Period
does not end on a Distribution Date) any amount remains on deposit in the
Pre-Funding Account after giving effect to the making of all Additional
Fundings, including any such Additional Fundings on such Redemption Date, the
Class A-1 Notes (and, to the extent all the Class A-1 Notes are paid in full,
the Class A-2 Notes) will be redeemed in part, on a pro rata basis, in an
aggregate principal amount equal to the amount then on deposit in the
Pre-Funding Account.
(b) In the event that the assets of the Trust are sold pursuant to
Section 9.02 of the Trust Agreement or the Financed Student Loans are sold
pursuant to Section 4.04 hereof, that portion of the amounts on deposit in the
Trust Accounts to be distributed to the Noteholders shall be paid to the
Noteholders up to the Outstanding Amount of the Notes and all accrued and unpaid
Interest thereon and any accrued Noteholders' Interest LIBOR Carryover with
respect thereto (but only to the extent provided by Sections 2.07(d) and 8.02(c)
hereof). If amounts are
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to be paid to Noteholders pursuant to this Section 10.01, the Administrator or
the Issuer shall, to the extent practicable, furnish notice of such Event to the
Indenture Trustee not later than 25 days prior to the Redemption Date whereupon
all such amounts shall be payable on the Redemption Date.
SECTION 10.02. Form of Redemption Notice. Notice of redemption under
Section 10.01 shall be given by the Indenture Trustee by first-class mail,
postage prepaid, or by facsimile, mailed or transmitted on or prior to the
applicable Redemption Date to each Noteholder, as of the close of business on
the Record Date preceding the applicable Redemption Date, at such Noteholder's
address or facsimile number appearing in the Note Register.
All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price; and
(iii) the place where such Notes are to be surrendered
for payment of the Redemption Price (which shall be the office or
agency of the Issuer to be maintained as provided in Section 3.02).
Notice of redemption of the Notes shall be given by the Indenture
Trustee in the name and at the expense of the Issuer. Failure to give notice of
redemption, or any defect therein, to any Noteholder of any Note shall not
impair or affect the validity of the redemption of any other Note.
SECTION 10.03. Notes Payable on Redemption Date. The Notes or portions
thereof to be redeemed shall on the Redemption Date become due and payable at
the Redemption Price and (unless the Issuer shall default in the payment of the
Redemption Price) no interest shall accrue on the Redemption Price for any
period after the date to which accrued interest is calculated for purposes of
calculating the Redemption Price.
ARTICLE XI
Miscellaneous
SECTION 11.01. Compliance Certificates and Opinions. (a) Upon any
application or request by the Issuer to the Indenture Trustee to take any action
under any provision of this Indenture, the Issuer shall furnish to the Indenture
Trustee (i) an Officers' Certificate of the Issuer stating that all
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conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with, (ii) an Opinion of Counsel stating that
in the opinion of such counsel all such conditions precedent, if any, have been
complied with and (iii) (if required by the TIA) an Independent Certificate from
a firm of certified public accountants meeting the applicable requirements of
this Section, except that, in the case of any such application or request as to
which the furnishing of such documents is specifically required by any provision
of this Indenture, no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(i) a statement that each signatory of such certificate
or opinion has read or has caused to be read such covenant or condition
and the definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(iii) a statement that, in the opinion of each such
signatory, such signatory has made such examination or investigation as
is necessary to enable such signatory to express an informed opinion as
to whether such covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each
such signatory, such condition or covenant has been complied with.
(b)(i) Prior to the deposit of any Collateral or other property or
securities with the Indenture Trustee that is to be made the basis for the
release of any property or securities subject to the lien of this Indenture, the
Issuer shall, in addition to any obligation imposed in Section 11.01(a) or
elsewhere in this Indenture, furnish to the Indenture Trustee an Officers'
Certificate of the Issuer certifying or stating the opinion of each person
signing such certificate as to the fair value (within 90 days of such deposit)
to the Issuer of the Collateral or other property or securities to be so
deposited.
(ii) Whenever the Issuer is required to furnish to the
Indenture Trustee an Officers' Certificate of the Issuer certifying or
stating the opinion of any signer thereof as
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to the matters described in clause (i) above, the Issuer shall also
deliver to the Indenture Trustee an Independent Certificate as to the
same matters, if the fair value to the Issuer of the securities to be
so deposited and of all other such securities made the basis of any
such withdrawal or release since the commencement of the then current
fiscal year of the Issuer, as set forth in the certificates delivered
pursuant to clause (i) above and this clause (ii), is 10% or more of
the Outstanding Amount of the Notes, but such a certificate need not be
furnished with respect to any securities so deposited, if the fair
value thereof to the Issuer as set forth in the related Officers'
Certificate is less than $25,000 or less than one percent of the
Outstanding Amount of the Notes.
(iii) Other than any property released as contemplated by
clause (v) below, whenever any property or securities are to be
released from the lien of this Indenture, the Issuer shall also furnish
to the Indenture Trustee an Officers' Certificate of the Issuer
certifying or stating the opinion of each person signing such
certificate as to the fair value (within 90 days of such release) of
the property or securities proposed to be released and stating that in
the opinion of such person the proposed release will not impair the
security under this Indenture in contravention of the provisions
hereof.
(iv) Whenever the Issuer is required to furnish to the
Indenture Trustee an Officers' Certificate of the Issuer certifying or
stating the opinion of any signer thereof as to the matters described
in clause (iii) above, the Issuer shall also furnish to the Indenture
Trustee an Independent Certificate as to the same matters if the fair
value of the property or Securities and of all other property, other
than property as contemplated by clause (v) below, or securities
released from the lien of this Indenture since the commencement of the
then-current calendar year, as set forth in the certificates required
by clause (iii) above and this clause (iv), equals 10% or more of the
Outstanding Amount of the Notes, but such certificate need not be
furnished in the case of any release of property or securities if the
fair value thereof as set forth in the related Officers' Certificate is
less than $25,000 or less than one percent of the then Outstanding
Amount of the Notes.
(v) Notwithstanding Section 2.09 or any other provision
of this Section, the Issuer may, without compliance with the
requirements of the other provisions of this Section, (A) collect,
liquidate, sell or otherwise dispose of Financed Student Loans as and
to the extent
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permitted or required by the Basic Documents and (B) make cash payments
out of the Trust Accounts as and to the extent permitted or required by
the Basic Documents, so long as the Issuer shall deliver to the
Indenture Trustee every three months, commencing April 25, 1997, an
Officers' Certificate of the Issuer stating that all the dispositions
of Collateral described in clauses (A) and (B) above that occurred
during the immediately preceding three calendar months (or the period
from the Closing Date in the case of the April 25, 1997 Officer's
Certificate) were in the ordinary course of the Issuer's business and
that the proceeds thereof were applied in accordance with the Basic
Documents.
SECTION 11.02. Form of Documents Delivered to Indenture Trustee. In any
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may certify
or give an opinion with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify or give an opinion
as to such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of the Issuer may
be based, insofar as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate of an Authorized Officer or
Opinion of Counsel may be based, insofar as it relates to factual matters, upon
a certificate or opinion of, or representations by, an officer or officers of
the Master Servicer, the Seller, the Issuer or the Administrator, stating that
the information with respect to such factual matters is in the possession of the
Master Servicer, the Seller, the Issuer or the Administrator, unless such
counsel knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to such matters are
erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Whenever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the Issuer
shall deliver any document as a
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condition of the granting of such application, or as evidence of the Issuer's
compliance with any term hereof, it is intended that the truth and accuracy, at
the time of the granting of such application or at the effective date of such
certificate or report (as the case may be), of the facts and opinions stated in
such document shall in such case be conditions precedent to the right of the
Issuer to have such application granted or to the sufficiency of such
certificate or report. The foregoing shall not, however, be construed to affect
the Indenture Trustee's right to rely upon the truth and accuracy of any
statement or opinion contained in any such document as provided in Article VI.
SECTION 11.03. Acts of Noteholders. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Noteholders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Noteholders in person or by agents duly appointed in writing; and except as
herein otherwise expressly provided such action shall become effective when such
instrument or instruments are delivered to the Indenture Trustee, and, where it
is hereby expressly required, to the Issuer. Such instrument or instruments (and
the action embodied therein and evidenced thereby) are herein sometimes referred
to as the "Act" of the Noteholders signing such instrument or instruments. Proof
of execution of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Indenture and (subject to Section
6.01) conclusive in favor of the Indenture Trustee and the Issuer, if made in
the manner provided in this Section.
(b) The fact and date of the execution by any person of any such
instrument or writing may be proved in any manner that the Indenture Trustee
deems sufficient.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Noteholder of any Notes shall bind the Noteholder
of every Note issued upon the registration thereof or in exchange therefor or in
lieu thereof, in respect of anything done, omitted or suffered to be done by the
Indenture Trustee or the Issuer in reliance thereon, whether or not notation of
such action is made upon such Note.
SECTION 11.04. Notices to Indenture Trustee, Issuer and Rating
Agencies. Any request, demand, authorization, direction, notice, consent,
waiver or act of Noteholders or other documents provided or permitted by this
Indenture shall be in writing and
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if such request, demand, authorization, direction, notice, consent, waiver or
act of Noteholders is to be made upon, given or furnished to or filed with:
(a) the Indenture Trustee by any Noteholder or by the Issuer,
it shall be sufficient for every purpose hereunder if made, given,
furnished or filed (including by facsimile if confirmed by delivery by
first-class mail, postage prepaid), in writing to or with the Indenture
Trustee at its Corporate Trust Office, or
(b) the Issuer by the Indenture Trustee or by any Noteholder,
it shall be sufficient for every purpose hereunder if in writing and
mailed, first-class, postage prepaid (or by fascsimile, if confirmed by
such a mailing), to the Issuer addressed to: Signet Student Loan Trust
1996-A, in care of First Chicago Delaware, Inc., Trustee, Wilmington,
Delaware 19801, with a copy to the Depositor at 7 North 8th Street,
Richmond, Virginia 23219, Attention: Treasurer, and the Eligible Lender
Trustee at the Corporate Trust Office of the Eligible Lender Trustee,
or at any other address previously furnished in writing to the
Indenture Trustee by the Issuer. The Issuer shall promptly transmit any
notice received by it from the Noteholders to the Indenture Trustee.
Notices required to be given to the Rating Agencies by the Issuer, the
Indenture Trustee or the Eligible Lender Trustee shall be in writing, personally
delivered or mailed by certified mail, return receipt requested (or by
fascsimile, if confirmed by such a mailing), to the following addresses:
in the case of Fitch, to
Fitch Investors Service, L.P.
One State Street Plaza
New York, New York 10004
Attention: Asset Backed Monitoring Unit
Telephone: (212) 908-0500
Telecopy : (212) 480-4435;
in the case of Moody's to
Moody's Investors Service, Inc.
99 Church Street
New York, New York 10007
Attention: ABS Monitoring Department
Telephone: (212) 553-0300
Telecopy: (212) 553-0881; and
in the case of Standard & Poor's, to
Standard & Poor's Ratings Group
63
<PAGE>
25 Broadway
20th Floor
New York, New York 10004
Telephone: (212) 208-8000
Telecopy: (212) 412-0225.
or as to each of the foregoing, at such other address as shall be designated by
written notice to the other parties.
SECTION 11.05. Notices to Noteholders; Waiver. Where this Indenture
provides for notice to Noteholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class, postage prepaid to each Noteholder affected by such
event, at his address as it appears on the Note Register, not later than the
latest date, and not earlier than the earliest date, prescribed for the giving
of such notice. In any case where notice to Noteholders is given by mail,
neither the failure to mail such notice nor any defect in any notice so mailed
to any particular Noteholder shall affect the sufficiency of such notice with
respect to other Noteholders, and any notice that is mailed in the manner herein
provided shall conclusively be presumed to have been duly given.
Where this Indenture provides for notice in any manner, such notice may
be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Noteholders shall be filed with the Indenture
Trustee but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such a waiver.
In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity, it shall be impractical
to mail notice of any event to Noteholders when such notice is required to be
given pursuant to any provision of this Indenture, then any manner of giving
such notice as shall be satisfactory to the Indenture Trustee shall be deemed to
be a sufficient giving of such notice.
Where this Indenture provides for notice to the Rating Agencies,
failure to give such notice shall not affect any other rights or obligations
created hereunder, and shall not under any circumstance constitute a Default.
SECTION 11.06. Alternate Payment and Notice Provisions. Notwithstanding
any provision of this Indenture or any of the Notes to the contrary, the Issuer
may enter into any agreement with any Noteholder providing for a method of
payment, or notice by the Indenture Trustee or any Paying Agent to such
Noteholder,
64
<PAGE>
that is different from the methods provided for in this Indenture for such
payments or notices, provided that such agreement is reasonably acceptable to
the Indenture Trustee. The Issuer will furnish to the Indenture Trustee a copy
of each such agreement and the Indenture Trustee will cause payments to be made
and notices to be given in accordance with such agreements.
SECTION 11.07. Conflict with Trust Indenture Act. If any provision
hereof limits, qualifies or conflicts with another provision hereof that is
required to be included in this Indenture by any of the provisions of the Trust
Indenture Act, such required provision shall control.
The provisions of TIA ss.ss. 310 through 317 that impose duties on any
Person (including the provisions automatically deemed included herein unless
expressly excluded by this Indenture) are a part of and govern this Indenture,
whether or not physically contained herein.
SECTION 11.08. Effect of Headings and Table of Contents. The Article
and Section headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof.
SECTION 11.09. Successors and Assigns. All covenants and agreements in
this Indenture and the Notes by the Issuer shall bind its successors and
assigns, whether so expressed or not. All agreements of the Indenture Trustee in
this Indenture shall bind the successors, co-trustees and agents (excluding any
legal representatives or accountants) of the Indenture Trustee.
SECTION 11.10. Separability. In case any provision in this Indenture or
in the Notes shall be invalid, illegal or unenforceable, the validity, legality,
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
SECTION 11.11. Benefits of Indenture. Nothing in this Indenture or in
the Notes, express or implied, shall give to any Person, other than the parties
hereto and their successors hereunder, and the Noteholders, and any other party
secured hereunder, and any other Person with an ownership interest in any part
of the Indenture Trust Estate, any benefit or any legal or equitable right,
remedy or claim under this Indenture.
SECTION 11.12. [RESERVED]
SECTION 11.13. Governing Law. This Indenture shall be construed in
accordance with the laws of the State of New York, without reference to its
conflict of law provisions, and the
65
<PAGE>
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with such laws.
SECTION 11.14. Counterparts. This Indenture may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
SECTION 11.15. Recording of Indenture. If this Indenture is subject to
recording in any appropriate public recording offices, such recording is to be
effected by the Issuer and at its expense accompanied by an Opinion of Counsel
(which may be counsel to the Indenture Trustee or any other counsel reasonably
acceptable to the Indenture Trustee) to the effect that such recording is
necessary either for the protection of the Noteholders or any other Person
secured hereunder or for the enforcement of any right or remedy granted to the
Indenture Trustee under this Indenture.
SECTION 11.16. Trust Obligations. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Seller, the
Company, the Administrator, the Master Servicer, any Subservicer, the Eligible
Lender Trustee or the Indenture Trustee on the Notes or under this Indenture or
any certificate or other writing delivered in connection herewith or therewith,
against (i) the Seller, the Company, the Administrator, the Master Servicer, any
Subservicer, the Indenture Trustee or the Eligible Lender Trustee in its
individual capacity or (ii) any partner, owner, beneficiary, agent, officer,
director or employee of the Seller, the Company, the Administrator, the Master
Servicer, any Subservicer, the Indenture Trustee or the Eligible Lender Trustee
in its individual capacity, any holder or owner of a beneficial interest in the
Issuer, the Eligible Lender Trustee or the Indenture Trustee or of any successor
or assign of the Seller, the Company, the Administrator, the Master Servicer,
any Subservicer, the Indenture Trustee or the Eligible Lender Trustee in its
individual capacity, except as any such Person may have expressly agreed (it
being understood that the Indenture Trustee and the Eligible Lender Trustee have
no such obligations in their individual capacity) and except that any such
partner, owner or beneficiary shall be fully liable, to the extent provided by
applicable law, for any unpaid consideration for stock, unpaid capital
contribution or failure to pay any installment or call owing to such entity. For
all purposes of this Indenture, in the performance of any duties or obligations
of the Issuer hereunder, 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.
66
<PAGE>
SECTION 11.17. No Petition. The Indenture Trustee, by entering into
this Indenture, and each Noteholder, by accepting a Note, hereby covenant and
agree that they will not at any time institute against the Depositor, the
Company or the Issuer, or join in any institution against the Depositor, the
Company or the Issuer of, any bankruptcy, reorganization, arrangement,
insolvency, receivership or liquidation proceedings, or other proceedings under
any United States Federal or state bankruptcy or similar law in connection with
any obligations relating to the Notes, this Indenture or any of the other Basic
Documents.
SECTION 11.18. Inspection. The Issuer agrees that, on reasonable prior
notice, it will permit any representative of the Indenture Trustee, during the
Issuer's normal business hours, to examine all the books of account, records,
reports, and other papers of the Issuer, to make copies and extracts therefrom,
to cause such books to be audited by Independent certified public accountants,
and to discuss the Issuer' affairs, finances and accounts with the Issuer's
officers, employees, and Independent certified public accountants, all at such
reasonable times and as often as may be reasonably requested. The Indenture
Trustee shall and shall cause its representatives to hold in confidence all such
information obtained from such examination or inspection except to the extent
disclosure may be required by law (and all reasonable applications for
confidential treatment are unavailing) and except to the extent that the
Indenture Trustee may reasonably determine that such disclosure is consistent
with its obligations hereunder.
67
<PAGE>
IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused
this Indenture to be duly executed by their respective officers, thereunto duly
authorized and duly attested, all as of the day and year first above written.
SIGNET STUDENT LOAN TRUST
1996-A,
by
THE FIRST NATIONAL BANK OF
CHICAGO, not in its
individual capacity but
solely as Eligible Lender
Trustee,
By: /s/ BARBARA G. GROSSE
---------------------
Name: Barbara G. Grosse
Title: Assistant Vice President
THE BANK OF NEW YORK, not
in its individual capacity but
solely as Indenture Trustee,
By: /s/ CHERYL L. LASER
-----------------------
Name: CHERYL L. LASER
Title: ASSISTANT VICE PRESIDENT
Acknowledged and accepted as to the Granting Clause as of the day and
year first above written:
THE FIRST NATIONAL BANK OF CHICAGO,
not in its Individual capacity but
solely as Eligible Lender Trustee,
By: /s/ BARBARA G. GROSSE
----------------------------
Name: Barbara G. Grosse
Title: Assistant Vice President
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
BEFORE ME, the undersigned authority, a Notary Public in and for said
county and state, on this day personally appeared _________________, known to me
to be the person and officer whose name is subscribed to the foregoing
instrument and acknowledged to me that the name was the act of the said SIGNET
STUDENT LOAN TRUST 1996-A, a Delaware trust, and that such person executed the
same as the act of said trust for the purpose and consideration therein
expressed, and in the capacities therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the th day of [ , 1996].
/s/ DANIEL MULVIHILL
------------------------
Name: DANIEL MULVIHILL
Notary Public in and for
the State of New York
[Seal]
My commission expires:
DANIEL F. MULVIHILL
NOTARY PUBLIC, STATE OF NEW YORK
NO. 01MU5064279
QUALIFIED IN NEW YORK COUNTY
COMMISSION EXPIRES AUG. 12, 1998
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
BEFORE ME, the undersigned authority, a Notary Public in and for said
county and state, on this day personally appeared ______________, known to me to
be the person and officer whose name is subscribed to the foregoing instrument
and acknowledged to me that the same was the act of the said THE BANK OF NEW
YORK, a New York banking corporation, and that such person executed the same as
the act of said corporation for the purpose and consideration therein expressed,
and in the capacities therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the th day of [ , 1996].
/s/ DANIEL MULVIHILL
-----------------------
Name: DANIEL MULVIHILL
Notary Public in and for
the State of New York
[Seal]
My commission expires:
DANIEL F. MULVIHILL
NOTARY PUBLIC, STATE OF NEW YORK
NO. 01MU5064279
QUALIFIED IN NEW YORK COUNTY
COMMISSION EXPIRES AUG. 12, 1998
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
BEFORE ME, the undersigned authority, a Notary Public in and for said
county and state, on this day personally appeared , known to me to be
the person and officer whose name is subscribed to the foregoing instrument and
acknowledged to me that the name was the act of the said THE FIRST NATIONAL BANK
OF CHICAGO, a national banking association, and that such person executed the
same as the act of said association for the purpose and consideration therein
expressed, and in the capacities therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the [ ] day of
[ , 1996].
/s/ DANIEL MULVIHILL
-----------------------
Name: DANIEL MULVIHILL
Notary Public in and for
the State of New York
[Seal]
My commission expires:
DANIEL F. MULVIHILL
NOTARY PUBLIC, STATE OF NEW YORK
NO. 01MU5064279
QUALIFIED IN NEW YORK COUNTY
COMMISSION EXPIRES AUG. 12, 1998
<PAGE>
APPENDIX A
<PAGE>
EXHIBIT A
TO THE INDENTURE
[FORM OF CLASS A-1 NOTE]
SEE REVERSE FOR CERTAIN DEFINITIONS
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer (as
defined below) or its agent for registration of transfer, exchange or payment,
and any Note issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF. THIS NOTE IS NOT
GUARANTEED OR INSURED BY ANY GOVERNMENTAL AGENCY.
REGISTERED CUSIP NO. 82668P AA 3
-------------
$ (1)
-------------
No. R-
SIGNET STUDENT LOAN TRUST 1996-A
FLOATING RATE CLASS A-1 ASSET BACKED NOTES
Signet Student Loan Trust 1996-A, a trust organized and existing under
the laws of the State of Delaware (herein referred to as the "Issuer"), for
value received, hereby promises to pay to CEDE & CO., or registered assigns, the
principal sum of [ ] DOLLARS payable on each Distribution Date in an amount
equal to the result obtained by multiplying (i) a fraction the numerator of
which is $[INSERT INITIAL PRINCIPAL AMOUNT OF THIS NOTE] and the denominator of
which is $[ ] by (ii) the aggregate amount, if any, payable to Noteholders on
such Distribution Date in respect of principal of the Class A-1 Notes
- --------
(1) Denominations of $1,000 and integral multiples of $1,000 in excess thereof.
<PAGE>
pursuant to Section 3.01 of the Indenture dated as of November 1, 1996, between
the Issuer and The Bank of New York, a New York banking corporation, as
Indenture Trustee (the "Indenture Trustee") (capitalized terms used but not
defined herein are defined in Appendix A to the Administration Agreement, dated
as of November 1, 1996 among the Issuer, Signet Bank, as Administrator, and the
Indenture Trustee, which also contains rules as to usage that shall be
applicable herein); provided, however, that the entire unpaid principal amount
of this Note shall be due and payable on the January 2005 Distribution Date (the
"Class A-1 Final Maturity Date").
The Issuer will pay interest on this Note at the rate per annum equal
to the Class A-1 Rate (as defined on the reverse hereof), on each Interest
Payment Date until the principal of this Note is paid or made available for
payment, on the principal amount of this Note outstanding on the preceding
Distribution Date (after giving effect to all payments of principal made on the
preceding Distribution Date, or in the case of the first three Interest Payment
Dates and the first Distribution Date, on the Closing Date), subject to certain
limitations contained in Section 3.01 of the Indenture. Interest on this Note
will accrue for each Interest Payment Date from the most recent Interest Payment
Date on which interest has been paid to but excluding such Interest Payment Date
or, if no interest has yet been paid, from December 27, 1996 (each, an "Interest
Period"). Interest will be computed on the basis of the actual number of days
elapsed in a 360-day year. Such principal of and interest on this Note shall be
paid in the manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
2
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed, manually or in facsimile, as of the date set forth below.
SIGNET STUDENT LOAN TRUST 1996-A
by
THE FIRST NATIONAL BANK OF
CHICAGO, not in its individual
capacity but solely as Eligible
Lender Trustee under the Trust
Agreement,
by
-------------------------------
Authorized Signatory
Date: [ ], 1996
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
THE BANK OF NEW YORK, not in
its individual capacity but
solely as Indenture Trustee,
by
------------------------------
Authorized Signatory
Date: [ ], 1996
3
<PAGE>
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Floating Rate Class A-1 Asset Backed Notes (herein called the
"Class A-1 Notes"), all issued under the Indenture, to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights and obligations thereunder of the Issuer, the Indenture
Trustee and the Noteholders. The Class A-1 Notes are subject to all terms of the
Indenture.
The Class A-1 Notes and the Class A-2 Asset Backed Notes (the "Class
A-2 Notes" and, together with the Class A-1 Notes, the "Notes") are and will be
equally and ratably secured by the collateral pledged as security therefor as
provided in the Indenture.
Principal of the Class A-1 Notes will be payable on each Distribution
Date in an amount described on the face hereof. "Distribution Date" means the
twenty-fifth day of each January, April, July and October, or, if any such date
is not a Business Day, the next succeeding Business Day, commencing April 25,
1997.
As described on the face hereof, the entire unpaid principal amount of
this Note shall be due and payable on the Class A-1 Final Maturity Date.
Notwithstanding the foregoing, the entire unpaid principal amount of the Notes
shall be due and payable on the date on which (i) an Event of Default shall have
occurred and be continuing and (ii) the Indenture Trustee or the Noteholders
representing not less than 66 2/3 percent of the Outstanding Amount of the Notes
shall have declared the Notes to be immediately due and payable in the manner
provided in Section 5.02 of the Indenture. All principal payments on the Class
A-1 Notes shall be made pro rata to the Class A-1 Noteholders entitled thereto.
Interest on the Class A-1 Notes will be payable on each Interest
Payment Date, commencing January 27, 1997; on the principal amount outstanding
of such Notes until the principal amount thereof is paid in full, at a rate per
annum equal to the Class A-1 Rate. The "Class A-1 Rate" for each Interest Period
shall be equal to the lesser of (i) LIBOR for the related LIBOR Reset Period
plus 0.09% (the "Class A-1 LIBOR Rate") and (ii) the Student Loan Rate for such
Interest Period. The "Student Loan Rate" for any Interest Period will equal the
product of (a) the quotient obtained by dividing (i) 360 by (ii) the actual
number of days elapsed in such Interest Period and (b) the percentage equivalent
of a fraction, (i) the numerator of which is equal to Expected Interest
Collections for such Interest Period less the
4
<PAGE>
Servicing Fee and the Administration Fee with respect to the Interest Payment
Date immediately following the last day of such Interest Period and (ii) the
denominator of which is the sum of the Outstanding Amount of the Notes and the
Certificate Balance of the Certificates as of the first day of such Interest
Period (after, if the first day of such Interest Period is a Distribution Date,
giving effect to any principal distributions on the Notes or Certificates on
such Distribution Date).
Pursuant to the Administration Agreement, the Administrator shall
determine LIBOR for purposes of calculating the Class A-1 Rate for each given
Interest Period on the second business day prior to the commencement of each
LIBOR Reset Period within such Interest Period (each, a "LIBOR Determination
Date"). For purposes of calculating LIBOR, a business day is any day on which
banks in London and New York City are open for the transaction of international
business. "LIBOR" means, with respect to any LIBOR Reset Period (or, in the case
of the initial Interest Period, the period from December 27, 1996 to but
excluding the Initial Interest Payment Date), the London interbank offered rate
for deposits in U.S. dollars having a maturity of one month commencing on the
related LIBOR Determination Date (the "Index Maturity") which appears on
Telerate Page 3750 as of 11:00 a.m., London time, on such LIBOR Determination
Date. If such rate does not appear on Telerate Page 3750, the rate for that day
shall 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 shall 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 shall be the arithmetic mean
of the quotations. If fewer than two quotations are provided, the rate for that
day shall be the arithmetic mean of the rates quoted by major banks in New York
City, selected by the Administrator, at approximately 11:00 a.m., New York City
time, on such LIBOR Determination Date for loans in U.S. dollars to leading
European banks having the Index Maturity and in a principal amount equal to an
amount of not less than U.S. $1,000,000; provided that if the banks selected as
aforesaid are not quoting as mentioned in this sentence, LIBOR in effect for the
applicable LIBOR Reset Period shall be LIBOR in effect for the previous LIBOR
Reset Period. "LIBOR Reset Period" means the one-month period commencing on the
twenty-fifth day (or, if any such date is not a Business Day, on the next
succeeding Business Day) of each month and ending on the day immediately
preceding the following LIBOR Reset Period; provided, however, that the initial
LIBOR Reset Period will commence on the Closing Date. "Telerate Page 3750" means
the display page so designated
5
<PAGE>
on the Dow Jones Telerate Service (or such other page as may replace that page
on that service for the purpose of displaying comparable rates or prices).
"Reference Banks" means four major banks in the London interbank market selected
by the Administrator.
Any Noteholders' Interest LIBOR Carryover that may exist on any
Distribution Date attributable to the Class A-1 Notes shall be payable to the
Class A-1 Noteholders on that Distribution Date and any succeeding Distribution
Dates solely out of the funds available and required to be applied thereto
pursuant to the Administration Agreement.
Payments of interest on this Note due and payable on each Interest
Payment Date, and payments of interest together with the installment of
principal, if any, due and payable on each Distribution Date, to the extent not
in full payment of this Note, shall be made by check mailed to the Person whose
name appears as the Registered Holder of this Note (or one or more Predecessor
Notes) on the Note Register on the Record Date, except that with respect to
Notes registered on the Record Date in the name of the nominee of the Clearing
Agency, unless Definitive Notes have been issued (initially, such nominee to be
Cede & Co.), payments will be made by wire transfer in immediately available
funds to the account designated by such nominee. Such checks shall be mailed to
the Person entitled thereto at the address of such Person as it appears on the
Note Register as of the applicable Record Date without requiring that this Note
be submitted for notation of payment, and the mailing of such check shall
constitute payment of the amount thereof regardless of whether such check is
returned undelivered. Any reduction in the principal amount of this Note (or any
one or more Predecessor Notes) effected by any payments made on any Distribution
Date shall be binding upon all future Noteholders of this Note and of any Note
issued upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not noted hereon. If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Distribution Date, then the Indenture
Trustee, in the name of and on behalf of the Issuer, will notify the Person who
was the Noteholder hereof as of the Record Date preceding such Distribution Date
by notice mailed no later than five days prior to such Distribution Date and the
amount then due and payable shall be payable only upon presentation and
surrender of this Note at the Indenture Trustee's Corporate Trust Office or at
the office of the Indenture Trustee's agent appointed for such purposes located
in the Borough of Manhattan, The City of New York.
6
<PAGE>
The Issuer shall pay interest on overdue installments of interest at
the Class A-1 Rate to the extent lawful.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Noteholder hereof or his attorney duly
authorized in writing, with such signature guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar, which requirements
include membership or participation in Securities Transfer Agent's Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP
(all in accordance with the Exchange Act), and such other documents as the
Indenture Trustee may require, and thereupon one or more new Notes of authorized
denominations and in the same aggregate principal amount will be issued to the
designated transferee or transferees. No service charge will be charged for any
registration of transfer or exchange of this Note, but the transferor may be
required to pay a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection with any such registration of transfer or
exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in the Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Seller, the Company, the Administrator, the Master Servicer,
any Subservicer, the Eligible Lender Trustee or the Indenture Trustee on the
Notes or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Seller, the Company, the Administrator,
the Master Servicer, any Subservicer, the Indenture Trustee or the Eligible
Lender Trustee in its individual capacity or (ii) any partner, owner,
beneficiary, agent, officer, director or employee of the Seller, the Company,
the Administrator, the Master Servicer, any Subservicer, the Indenture Trustee
or the Eligible Lender Trustee in its individual capacity, any holder or owner
of a beneficial interest in the Issuer, the Eligible Lender Trustee or the
Indenture Trustee or of any successor or assign of the Seller, the Company, the
Administrator, the Master Servicer, any Subservicer, the Indenture Trustee or
the Eligible Lender Trustee in its individual capacity, except as any such
Person may have expressly agreed (it being understood that the Indenture Trustee
and the Eligible Lender Trustee have no such obligations in their individual
capacity) and except that any such partner, owner or
7
<PAGE>
beneficiary shall be fully liable, to the extent provided by applicable law, for
any unpaid consideration for stock, unpaid capital contribution or failure to
pay any installment or call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that by
accepting the benefits of the Indenture that such Noteholder or Note Owner will
not at any time institute against the Depositor, the Company or the Issuer, or
join in any institution against the Depositor, the Company or the Issuer of, any
bankruptcy, reorganization, arrangement, insolvency, receivership or liquidation
proceedings or other proceedings under any United States Federal or state
bankruptcy or similar law in connection with any obligations relating to the
Notes, the Indenture or the other Basic Documents.
Prior to the due presentment for registration of transfer of this Note,
the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture
Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes whether or not this Note be
overdue, and neither the Issuer, the Indenture Trustee nor any such agent shall
be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Noteholders under the Indenture at any time by the
Issuer with the consent of the Noteholders representing a majority of the
Outstanding Amount of all Notes at the time outstanding. The Indenture also
contains provisions permitting the Noteholders representing specified
percentages of the Outstanding Amount of the Notes, on behalf of all the
Noteholders, to waive compliance by the Issuer with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the holder of this Note (or any one or more
Predecessor Notes) shall be conclusive and binding upon such holder and upon all
future holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Note. The Indenture also permits the
Indenture Trustee to amend or waive certain terms and conditions set forth in
the Indenture without the consent of holders of the Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
8
<PAGE>
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Indenture Trustee and the
Noteholders under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note shall be construed in accordance with the laws of the State
of New York, without reference to its conflict of law provisions, and the
obligations, rights and remedies of the parties hereunder and thereunder shall
be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place, and rate, and in the coin or currency, herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, neither The Bank of New York in its individual
capacity, The First National Bank of Chicago in its individual capacity, any
owner of a beneficial interest in the Issuer, nor any of their respective
partners, beneficiaries, agents, officers, directors, employees or successors or
assigns shall be personally liable for, nor shall recourse be had to any of them
for, the payment of principal of or interest on, or performance of, or omission
to perform, any of the covenants, obligations or indemnifications contained in
this Note or the Indenture; it being expressly understood that said covenants,
obligations and indemnifications have been made by the Eligible Lender Trustee
for the sole purposes of binding the interests of the Eligible Lender Trustee in
the assets of the Issuer. The Noteholder of this Note by the acceptance hereof
agrees that, except as expressly provided in the Basic Documents, in the case of
an Event of Default under the Indenture, the Noteholder shall have no claim
against any of the foregoing for any deficiency, loss or claim therefrom;
provided, however, that nothing contained herein shall be taken to prevent
recourse to, and enforcement against, the assets of the Issuer for any and all
liabilities, obligations and undertakings contained in the Indenture or in this
Note.
9
<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of
assignee
__________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto ______________________________________________________
_____________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably
constitutes and appoints ______________________, attorney, to transfer
said Note on the books kept for registration thereof, with full power
of substitution in the premises.
Dated:
_____________________*/
Signature Guaranteed:
______________________*/
_______________________
*/ NOTICE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Note in
every particular, without alteration, enlargement or any change
whatever. Such signature must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar, which
requirements include membership or participation in STAMP or such other
"signature guarantee program" as may be determined by the Note
Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.
<PAGE>
EXHIBIT B
TO THE INDENTURE
[FORM OF CLASS A-2 NOTE]
SEE REVERSE FOR CERTAIN DEFINITIONS
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer (as
defined below) or its agent for registration of transfer, exchange or payment,
and any Note issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF. THIS NOTE IS NOT
GUARANTEED OR INSURED BY ANY GOVERNMENTAL AGENCY.
REGISTERED CUSIP NO. 82668P AB 1
-------------
$ (1)
-------------
No. R-
SIGNET STUDENT LOAN TRUST 1996-A
FLOATING RATE CLASS A-2 ASSET BACKED NOTES
Signet Student Loan Trust 1996-A, a trust organized and existing under
the laws of the State of Delaware (herein referred to as the "Issuer"), for
value received, hereby promises to pay to CEDE & CO., or registered assigns, the
principal sum of [ ] DOLLARS payable on each Distribution Date in an amount
equal to the result obtained by multiplying (i) a fraction the numerator of
which is $[INSERT INITIAL PRINCIPAL AMOUNT OF THIS NOTE] and the denominator of
which is $[ ] by (ii) the aggregate amount, if any, payable to Noteholders on
such
- --------
(1) Denominations of $1,000 and integral multiples of $1,000 in excess
thereof.
<PAGE>
Distribution Date in respect of principal of the Class A-2 Notes pursuant to
Section 3.01 of the Indenture dated as of November 1, 1996, between the Issuer
and The Bank of New York, a New York banking corporation, as Indenture Trustee
(the "Indenture Trustee") (capitalized terms used but not defined herein are
defined in Appendix A to the Administration Agreement, dated as of November 1,
1996, among the Issuer, Signet Bank, as Administrator, and the Indenture
Trustee, which also contains rules as to usage that shall be applicable herein);
provided, however, that the entire unpaid principal amount of this Note shall be
due and payable on the April 2016 Distribution Date (the "Class A-2 Final
Maturity Date"). Notwithstanding anything to the contrary, no payments of
principal of the Class A-2 Notes shall be made until the principal balance of
the Class A-1 Notes has been paid in its entirety.
The Issuer will pay interest on this Note at the rate per annum equal
to the Class A-2 Rate (as defined on the reverse hereof), on each Interest
Payment Date until the principal of this Note is paid or made available for
payment, on the principal amount of this Note outstanding on the preceding
Distribution Date (after giving effect to all payments of principal made on the
preceding Distribution Date, or in the case of the first three Interest Payment
Dates and the first Distribution Date, on the Closing Date), subject to certain
limitations contained in Section 3.01 of the Indenture. Interest on this Note
will accrue for each Interest Payment Date from the most recent Interest Payment
Date on which interest has been paid to but excluding such Interest Payment Date
or, if no interest has yet been paid, from December 27, 1996 (each, an "Interest
Period"). Interest will be computed on the basis of the actual number of days
elapsed in a 360-day year. Such principal of and interest on this Note shall be
paid in the manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit
2
<PAGE>
under the Indenture referred to on the reverse hereof, or be valid or obligatory
for any purpose.
3
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed, manually or in facsimile, as of the date set forth below.
SIGNET STUDENT LOAN TRUST 1996-A
by
THE FIRST NATIONAL BANK OF CHICAGO,
not in its individual capacity but
solely as Eligible Lender Trustee
under the Trust Agreement,
by ______________________________
Authorized Signatory
Date: [ ], 1996
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
THE BANK OF NEW YORK, not in
its individual capacity but
solely as Indenture Trustee,
by _____________________________
Authorized Signatory
Date: [ ], 1996
4
<PAGE>
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Floating Rate Class A-2 Asset Backed Notes (herein called the
"Class A-2 Notes"), all issued under the Indenture, to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights and obligations thereunder of the Issuer, the Indenture
Trustee and the Noteholders. The Class A-2 Notes are subject to all terms of the
Indenture.
The Class A-2 Notes and the Class A-1 Asset Backed Notes (the "Class
A-1 Notes" and, together with the Class A-2 Notes, the "Notes") are and will be
equally and ratably secured by the collateral pledged as security therefor as
provided in the Indenture.
Principal of the Class A-2 Notes will be payable on each Distribution
Date on or after the date on which the principal balance of the Class A-1 Notes
has been paid in its entirety, in an amount described on the face hereof.
"Distribution Date" means the twenty-fifth day of each January, April, July and
October, or, if any such date is not a Business Day, the next succeeding
Business Day, commencing April 25, 1997.
As described on the face hereof, the entire unpaid principal amount of
this Note shall be due and payable on the Class A-2 Final Maturity Date.
Notwithstanding the foregoing, the entire unpaid principal amount of the Notes
shall be due and payable on the date on which (i) an Event of Default shall have
occurred and be continuing and (ii) the Indenture Trustee or the Noteholders
representing not less than 66 2/3 percent of the Outstanding Amount of the Notes
shall have declared the Notes to be immediately due and payable in the manner
provided in Section 5.02 of the Indenture. All principal payments on the Class
A-2 Notes shall be made pro rata to the Class A-2 Noteholders entitled thereto.
Interest on the Class A-2 Notes will be payable on each Interest
Payment Date, commencing January 27, 1997, on the principal amount outstanding
of such Notes until the principal amount thereof is paid in full, at a rate per
annum equal to the Class A-2 Rate. The "Class A-2 Rate" for each Interest Period
shall be equal to the lesser of (i) LIBOR for the related LIBOR Reset Period
plus 0.15% (the "Class A-2 LIBOR Rate") and (ii) the Student Loan Rate for such
Interest Period. The "Student Loan Rate" for any Interest Period will equal the
product of (a) the quotient obtained by dividing (i) 360 by (ii) the actual
number of days elapsed in such Interest Period and (b) the percentage
5
<PAGE>
equivalent of a fraction, (i) the numerator of which is equal to Expected
Interest Collections for such Interest Period less the Servicing Fee and the
Administration Fee with respect to the Interest Payment Date immediately
following the last day of such Interest Period and (ii) the denominator of which
is the sum of the Outstanding Amount of the Notes and the Certificate Balance of
the Certificates as of the first day of such Interest Period (after, if the
first day of such Interest Period is a Distribution Date, giving effect to any
principal distributions on the Notes or Certificates on such Distribution Date).
Pursuant to the Administration Agreement, the Administrator shall
determine LIBOR for purposes of calculating the Class A-2 Rate for each given
Interest Period on the second business day prior to the commencement of each
LIBOR Reset Period within such Interest Period (each, a "LIBOR Determination
Date"). For purposes of calculating LIBOR, a business day is any day on which
banks in London and New York City are open for the transaction of international
business. "LIBOR" means, with respect to any LIBOR Reset Period (or, in the case
of the initial Interest Period, the period from December 27, 1996 to but
excluding the initial Interest Payment Date), the London interbank offered rate
for deposits in U.S. dollars having a maturity of one month commencing on the
related LIBOR Determination Date (the "Index Maturity") which appears on
Telerate Page 3750 as of 11:00 a.m., London time, on such LIBOR Determination
Date. If such rate does not appear on Telerate Page 3750, the rate for that day
shall 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 shall 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 shall be the arithmetic mean
of the quotations. If fewer than two quotations are provided, the rate for that
day shall be the arithmetic mean of the rates quoted by major banks in New York
City, selected by the Administrator, at approximately 11:00 a.m., New York City
time, on such LIBOR Determination Date for loans in U.S. dollars to leading
European banks having the Index Maturity and in a principal amount equal to an
amount of not less than U.S. $1,000,000; provided that if the banks selected as
aforesaid are not quoting as mentioned in this sentence, LIBOR in effect for the
applicable LIBOR Reset Period shall be LIBOR in effect for the previous LIBOR
Reset Period. "LIBOR Reset Period" means the one-month period commencing on the
twenty-fifth day (or, if any such date is not a Business Day, on the next
succeeding Business Day) of each month and ending on the day immediately
preceding the following LIBOR Reset Period; provided, however,
6
<PAGE>
that the initial LIBOR Reset Period will commence on the Closing Date. "Telerate
Page 3750" means the display page so designated on the Dow Jones Telerate
Service (or such other page as may replace that page on that service for the
purpose of displaying comparable rates or prices). "Reference Banks" means four
major banks in the London interbank market selected by the Administrator.
Any Noteholders' Interest LIBOR Carryover that may exist on any
Distribution Date attributable to the Class A-2 Notes shall by payable to the
Class A-2 Noteholders on that Distribution Date and any succeeding Distribution
Dates solely out of the funds available and required to be applied thereto
pursuant to the Administration Agreement.
Payments of interest on this Note due and payable on each Interest
Payment Date, and payments of interest together with the installment of
principal, if any, due and payable on each Distribution Date, to the extent not
in full payment of this Note, shall be made by check mailed to the Person whose
name appears as the Registered Holder of this Note (or one or more Predecessor
Notes) on the Note Register on the Record Date, except that with respect to
Notes registered on the Record Date in the name of the nominee of the Clearing
Agency, unless Definitive Notes have been issued (initially, such nominee to be
Cede & Co.), payments will be made by wire transfer in immediately available
funds to the account designated by such nominee. Such checks shall be mailed to
the Person entitled thereto at the address of such Person as it appears on the
Note Register as of the applicable Record Date without requiring that this Note
be submitted for notation of payment, and the mailing of such check shall
constitute payment of the amount thereof regardless of whether such check is
returned undelivered. Any reduction in the principal amount of this Note (or any
one or more Predecessor Notes) effected by any payments made on any Distribution
Date shall be binding upon all future Noteholders of this Note and of any Note
issued upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not noted hereon. If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Distribution Date, then the Indenture
Trustee, in the name of and on behalf of the Issuer, will notify the Person who
was the Noteholder hereof as of the Record Date preceding such Distribution Date
by notice mailed no later than five days prior to such Distribution Date and the
amount then due and payable shall be payable only upon presentation and
surrender of this Note at the Indenture Trustee's Corporate Trust Office or at
the office of the Indenture Trustee's agent appointed for such purposes located
in the Borough of Manhattan, The City of New York.
7
<PAGE>
The Issuer shall pay interest on overdue installments of interest at
the Class A-2 Rate to the extent lawful.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Noteholder hereof or his attorney duly
authorized in writing, with such signature guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar, which requirements
include membership or participation in Securities Transfer Agent's Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP
(all in accordance with the Exchange Act), and such other documents as the
Indenture Trustee may require, and thereupon one or more new Notes of authorized
denominations and in the same aggregate principal amount will be issued to the
designated transferee or transferees. No service charge will be charged for any
registration of transfer or exchange of this Note, but the transferor may be
required to pay a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection with any such registration of transfer or
exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in the Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Seller, the Company, the Administrator, the Master Servicer,
any Subservicer, the Eligible Lender Trustee or the Indenture Trustee on the
Notes or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Seller, the Company, the Administrator,
the Master Servicer, any Subservicer, the Indenture Trustee or the Eligible
Lender Trustee in its individual capacity or (ii) any partner, owner,
beneficiary, agent, officer, director or employee of the Seller, the Company,
the Administrator, the Master Servicer, any Subservicer, the Indenture Trustee
or the Eligible Lender Trustee in its individual capacity, any holder or owner
of a beneficial interest in the Issuer, the Eligible Lender Trustee or the
Indenture Trustee or of any successor or assign of the Seller, the Company, the
Administrator, the Master Servicer, any Subservicer, the Indenture Trustee or
the Eligible Lender Trustee in its individual capacity, except as any such
Person may have expressly agreed (it being understood that the Indenture Trustee
and the Eligible Lender Trustee have no such obligations in their individual
capacity) and except that any such partner, owner or
8
<PAGE>
beneficiary shall be fully liable, to the extent provided by applicable law, for
any unpaid consideration for stock, unpaid capital contribution or failure to
pay any installment or call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that by
accepting the benefits of the Indenture that such Noteholder or Note Owner will
not at any time institute against the Depositor, the Company or the Issuer, or
join in any institution against the Depositor, the Company or the Issuer of, any
bankruptcy, reorganization, arrangement, insolvency, receivership or liquidation
proceedings or other proceedings under any United States Federal or state
bankruptcy or similar law in connection with any obligations relating to the
Notes, the Indenture or the other Basic Documents.
Prior to the due presentment for registration of transfer of this Note,
the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture
Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes whether or not this Note be
overdue, and neither the Issuer, the Indenture Trustee nor any such agent shall
be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Noteholders under the Indenture at any time by the
Issuer with the consent of the Noteholders representing a majority of the
Outstanding Amount of all Notes at the time outstanding. The Indenture also
contains provisions permitting the Noteholders representing specified
percentages of the Outstanding Amount of the Notes, on behalf of all the
Noteholders, to waive compliance by the Issuer with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the holder of this Note (or any one or more
Predecessor Notes) shall be conclusive and binding upon such holder and upon all
future holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Note. The Indenture also permits the
Indenture Trustee to amend or waive certain terms and conditions set forth in
the Indenture without the consent of holders of the Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
9
<PAGE>
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Indenture Trustee and the
Noteholders under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note shall be construed in accordance with the laws of the State
of New York, without reference to its conflict of law provisions, and the
obligations, rights and remedies of the parties hereunder and thereunder shall
be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place, and rate, and in the coin or currency, herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, neither The Bank of New York in its individual
capacity, The First National Bank of Chicago in its individual capacity, any
owner of a beneficial interest in the Issuer, nor any of their respective
partners, beneficiaries, agents, officers, directors, employees or successors or
assigns shall be personally liable for, nor shall recourse be had to any of them
for, the payment of principal of or interest on, or performance of, or omission
to perform, any of the covenants, obligations or indemnifications contained in
this Note or the Indenture; it being expressly understood that said covenants,
obligations and indemnifications have been made by the Eligible Lender Trustee
for the sole purposes of binding the interests of the Eligible Lender Trustee in
the assets of the Issuer. The Noteholder of this Note by the acceptance hereof
agrees that, except as expressly provided in the Basic Documents, in the case of
an Event of Default under the Indenture, the Noteholder shall have no claim
against any of the foregoing for any deficiency, loss or claim therefrom;
provided, however, that nothing contained herein shall be taken to prevent
recourse to, and enforcement against, the assets of the Issuer for any and all
liabilities, obligations and undertakings contained in the Indenture or in this
Note.
10
<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying
number of assignee
________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns
and transfers unto ______________________________________
_________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably
constitutes and appoints ________________, attorney, to transfer said
Note on the books kept for registration thereof, with full power of
substitution in the premises.
Dated: _______________
________________________ */
Signature Guaranteed:
_________________________*/
_____________________________
*/ NOTICE: The signature to this assignment must correspond - with the
name of the registered owner as it appears on the face of the within
Note in every particular, without alteration, enlargement or any
change whatever. Such signature must be guaranteed by an "eligible
guarantor institution" meeting the requirements of the Note
Registrar, which requirements include membership or participation in
STAMP or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution
for, STAMP, all in accordance with the Securities Exchange Act of
1934, as amended.
<PAGE>
EXHIBIT C
TO THE INDENTURE
Class A-1 Note Depository Agreement
<PAGE>
EXHIBIT D
TO THE INDENTURE
Class A-2 Note Depository Agreement
<PAGE>
CROSS-REFERENCE TABLE(1)
TIA Indenture
Section Section
310 (a)(1) ............................................ 6.11
(a)(2) ............................................ 6.11
(a)(3) ............................................ 6.10
(a)(4) ............................................ N.A.(2)
(a)(4) ............................................ 6.11
(b) ............................................ 6.08;
6.10; 6.11
(c) ............................................ N.A.
311 (a) ............................................ 6.11
(b) ............................................ 6.11
(c) ............................................ N.A.
312 (a) ............................................ 7.01;
7.02(a)
(b) ............................................ 7.02(b)
(c) ............................................ 7.02(c)
313 (a) ............................................ 6.06
(b) ............................................ 6.06
(c) ............................................ 11.05
(d) ............................................ 6.06
314 (a) ............................................ 3.09; 7.03
(b) ............................................ 3.06
(c) ............................................ 2.09; 4.01
11.01
(d) ............................................ 2.09;
11.01
(e) ............................................ 11.01
(f) ............................................ 3.09
315 (a) ............................................ 6.01
(b) ............................................ 6.05
(c) ............................................ 6.01
(d) ............................................ 6.01
(e) ............................................ 5.13
316 (a)(1)(A) ............................................ 5.11
(a)(1)(B) ............................................ 5.12
(a)(2) ............................................ N.A.
(b) ............................................ 5.07
(c) ............................................ 1.01
317 (a) ............................................ 5.03
(b) ............................................ 3.03
318 (a) ............................................ 11.07
- --------
(1) Note: This Cross-Reference Table shall not, for any
purpose, be deemed to be part of the Indenture.
(2) N.A. means Not Applicable.
Exhibit 99.1
EXECUTION COPY
LOAN SALE AGREEMENT
among
SIGNET STUDENT LOAN TRUST 1996-A,
as Issuer,
SIGNET BANK,
as Seller,
and
THE FIRST NATIONAL BANK OF CHICAGO,
not in its individual capacity but solely
as Eligible Lender Trustee
Dated as of November 1, 1996
<PAGE>
LOAN SALE AGREEMENT dated as of November 1,
1996, among SIGNET STUDENT LOAN TRUST 1996-A, a
Delaware trust (the "Issuer"), SIGNET BANK, a
Virginia banking corporation, as Seller, and THE
FIRST NATIONAL BANK OF CHICAGO, a national banking
association, solely as eligible lender trustee and
not in its individual capacity (the "Eligible Lender
Trustee").
WHEREAS the Issuer desires to purchase from the Seller a
portfolio of federally reinsured student loans originated or acquired in the
ordinary course of business by the Seller;
WHEREAS the Seller is willing to sell such student loans to
the Eligible Lender Trustee on behalf of the Issuer;
WHEREAS the Eligible Lender Trustee is willing to hold legal
title to, and serve as eligible lender trustee with respect to, such student
loans on behalf of the Issuer.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants herein contained, the parties hereto agree as follows:
ARTICLE I
Definitions and Usage
Capitalized terms used but not defined herein are defined in
Appendix A to the Administration Agreement, dated as of November 1, 1996, among
the Issuer, the Seller, as Administrator, and The Bank of New York, as Indenture
Trustee, which also contains rules as to usage and construction that shall be
applicable herein.
ARTICLE II
Conveyance of Financed Student Loans
SECTION 2.01. Conveyance of Initial Financed Student Loans.
(a) In consideration of the Issuer's delivery to or upon the order of the Seller
on the Closing Date of the net proceeds from the sale of the Notes and the
Certificates and the other amounts to be distributed from time to time to the
Seller in accordance with the terms of this Agreement, the Seller does hereby,
as evidenced by a duly executed Bill of Sale in the form of Exhibit A hereto,
sell, assign, and otherwise convey to the Issuer (or, in the case of the Initial
Financed Student Loans (as
<PAGE>
defined below), to the Eligible Lender Trustee on behalf of the Issuer) without
recourse (subject to the obligations herein): (i) all right, title and interest
in and to the Initial Financed Student Loans, and all obligations of the
Obligors thereunder, together with all documents relating thereto, including the
related Student Loan Files and all rights and privileges relating thereto, (ii)
all payments on or collections received thereunder after the Cutoff Date; (iii)
all of its right, title and interest in all funds on deposit from time to time
in the Trust Accounts, including the Reserve Account Initial Deposit and all
investments and proceeds thereof (including all income thereon); and (iv) all
proceeds of any and all of the foregoing.
(b) In connection with the sale and assignment of
Financed Student Loans to the Eligible Lender Trustee on behalf of the Trust, on
the Closing Date, the Seller shall deposit the Reserve Account Initial Deposit
into the Reserve Account.
(c) On the Closing Date, the Seller will deposit into the
Pre-Funding Account $16,552,201.22 and will deposit into the Reserve Account
$6,317,145.00 from the net proceeds of the sale of the Notes and the
Certificates.
(d) On the Closing Date, the Seller will deposit, or
cause to be deposited, into the Collection Account all amounts or collections
received under the Initial Financed Student Loans after the Cutoff Date through
and including the second Business Day preceding the Closing Date.
SECTION 2.02. Conveyance of Additional Student Loans to the
Eligible Lender Trustee on Behalf of the Trust. (a) Subject to the conditions
set forth in paragraph (d) below, in consideration of the Issuer's delivery on
the related Transfer Date to or upon the order of the Seller of the Purchase
Amount for each such Additional Student Loan to be delivered to the Seller, the
Seller does hereby sell, transfer, assign, set over and otherwise convey to the
Issuer (or, in the case of the right, title and interest to the Additional
Student Loans, to the Eligible Lender Trustee on behalf of the Issuer), (i) all
right, title and interest of the Seller in and to each Additional Student Loan
and all obligations of the Obligors thereunder, together with all documents, the
related Student Loan Files and all rights and privileges relating thereto, (ii)
all payments on or collections received thereunder after the related Subsequent
Cutoff Date and (iii) all proceeds of any and all of the foregoing.
(b) During the Funding Period, upon the tender of any
Additional Student Loans by the Seller on the related Transfer Date and the
satisfaction of the conditions set forth in subsection (d) of this Section 2.02,
the Eligible Lender Trustee will so inform the Administrator and the Indenture
Trustee, and
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the Purchase Amounts for such Additional Student Loans will be withdrawn from
the Pre-Funding Account, subject to the provisions of Section 2(f) of the
Administration Agreement, and will be remitted to or upon the order of the
Seller.
(c) After the Funding Period, upon the tender of
Additional Student Loans by the Seller on the related Transfer Date and the
satisfaction of the conditions set forth in subsection (d) of this Section 2.02,
the Eligible Lender Trustee will so inform the Administrator and the Indenture
Trustee, and the Purchase Amounts for such Serial Loans will be withdrawn from
amounts on deposit in the Collection Account, as provided in Section 2(d) of the
Administration Agreement, and will be remitted, as provided therein to or upon
the order of the Seller; provided, however, that, the Seller shall not tender or
convey any Additional Student Loans to the Issuer after the January 2002
Distribution Date.
(d) The Seller shall transfer to the Issuer the
Additional Student Loans for a given Transfer Date and the other property and
rights related thereto described in paragraph (a) above only upon the
satisfaction of each of the following conditions on or prior to such Transfer
Date:
(i) the Seller shall have delivered to the Eligible Lender
Trustee and the Indenture Trustee a duly executed written assignment
(including an acceptance by the Eligible Lender Trustee and the
Indenture Trustee) in substantially the form of Exhibit B hereto (each,
a "Transfer Agreement"), which shall include supplements to Schedule A
hereto, listing such Additional Student Loans;
(ii) the Seller shall have delivered, at least two days
prior to such Transfer Date, notice of such transfer to the Eligible
Lender Trustee, the Indenture Trustee and the Rating Agencies,
including a listing of the type of loan and the aggregate principal
balance of such Additional Student Loans;
(iii) the Seller shall have deposited in the Collection
Account all amounts on or collections received in respect of the
Additional Student Loans after each applicable Subsequent Cutoff Date;
(iv) as of the Transfer Date, the Seller was not insolvent
nor will it have been made insolvent by such transfer nor is it aware
of any pending insolvency;
(v) such addition will not result in a material adverse
Federal or State tax consequence to the Issuer, the Noteholders or the
Certificateholders;
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(vi) the Seller shall have delivered to the Indenture
Trustee and the Eligible Lender Trustee an Officers' Certificate
confirming the satisfaction of each condition precedent specified in
this paragraph (d);
(vii) the Seller shall have delivered (A) to the Rating
Agencies an Opinion of Counsel with respect to the transfer of the
Additional Student Loans transferred to the Issuer on such Transfer
Date, substantially in the form of the Opinion of Counsel delivered to
the Rating Agencies on the Closing Date, and (B) to the Eligible Lender
Trustee and the Indenture Trustee the Opinion of Counsel as required by
Section 6.02(f)(1) hereof; provided that no opinion shall be required
under either subclause (A) or (B) unless the Seller, the Eligible
Lender Trustee or the Indenture Trustee determines that, with regard to
the most recent opinion on the matters described in either such
subclause that was delivered with respect to the Financed Student Loans
(whether on the Closing Date or thereafter under this subsection or
under another provision of the Basic Documents), the conclusion of, or
the reasoning underlying, such opinion is no longer correct in all
material respects due to a change in law or regulations or the ruling
of a court, an administrative tribunal or a regulatory or other
governmental authority; upon making any such determination, whichever
of the Seller, the Eligible Lender Trustee and the Indenture Trustee
makes such determination shall notify the others and the Rating
Agencies in writing as to the nature of such changes; provided,
further, that none of the Eligible Lender Trustee or the Indenture
Trustee shall have any obligation to monitor changes in laws or
regulations or the rulings of courts or other governmental agencies for
the purpose of making any determination described in this clause
(d)(vii);
(viii) the Seller shall have taken any action required to
maintain the first perfected ownership interest of the Issuer in the
Trust Estate and the first perfected security interest of the Indenture
Trustee in the Collateral;
(ix) no selection procedures believed by the Seller to be
adverse to the interests of the Certificateholders or the Noteholders
shall have been utilized in selecting the Additional Student Loans;
(x) no Event of Default shall have occurred under the
Indenture, no Servicer Default shall have occurred under the Master
Servicing Agreement and no Administrator Default shall have occurred
under the Administration Agreement;
(xi) after giving effect to the conveyance of Additional
Student Loans on each Transfer Date, (a) the
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aggregate of the Purchase Amounts, as of the respective Transfer Dates,
of all of the Additional Student Loans purchased by the Issuer since
the Closing Date shall not exceed $45,000,000 and (b) the aggregate
outstanding principal balance (including accrued borrower interest
thereon if and to the extent that such interest is not then payable and
will, pursuant to the terms of the applicable loan, be capitalized and
added to the principal balance of such loan) of the Financed Student
Loans (I) made to Borrowers for the purpose of attending proprietary or
vocational institutions shall not exceed 8% of the Pool Balance as of
such Transfer Date, (II) made to Borrowers for the purpose of attending
proprietary or vocational institutions or two-year institutions shall
not exceed 13% of the Pool Balance as of such Transfer Date and (III)
that are PLUS Loans shall not exceed 10% of the Pool Balance as of such
Transfer Date;
(xii) for each Transfer Date occurring after the Funding
Period, after giving effect to the conveyance of any Additional Student
Loans on such Transfer Date, the amount of funds remitted for the
purchase of Additional Student Loans on such Transfer Date, and on each
Transfer Date since the preceding Distribution Date, shall not exceed
the Net 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); and
(xiii) each Additional Student Loan conveyed to the Trust on
such Transfer Date shall have a final scheduled payment due no later
than the Final Maturity Date.
provided, however, that the Seller shall not incur any liability as a result of
transferring Additional Student Loans on any Transfer Date at a time when the
condition set forth in clause (v) was not satisfied, if at the time of such
transfer the Authorized Officers of the Seller, after reasonable inquiry of
counsel to the Seller, were not aware of any fact that would reasonably suggest
that such condition would not be satisfied as of such date.
SECTION 2.03. Treatment as a Security Agreement. The parties
intend that the conveyance of the Seller's right, title and interest in and to
the Initial Financed Student Loans pursuant to this Agreement and any Additional
Student Loans pursuant to a related Transfer Agreement shall constitute a
purchase and sale and not a loan. If such conveyance is deemed to be a loan and
not a sale, then the parties also intend and agree that the Seller shall be
deemed to have granted, and in such event do hereby grant to the Issuer, a first
priority
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security interest in all of the Seller's right, title and interest in, to and
under the Initial Financed Student Loans and any Additional Student Loans and
the other items specified in Sections 2.01 and 2.02, and that this Agreement
(with respect to the Initial Financed Student Loans) and any applicable Transfer
Agreement (with respect to the Additional Student Loans conveyed thereby) shall
each constitute a security agreement under applicable law with respect to such
loans. If such conveyance is deemed to be a loan and not a sale, the Issuer may,
to secure the Issuer's own borrowings under the Indenture, repledge all or any
portion of such loans and the other items specified in Sections 2.01 and 2.02
hereof pledged to the Issuer and not released from the security interest of this
Agreement at the time of such pledge. Such a repledge may be made by the Issuer
with or without a repledge by the Issuer of its rights under this Agreement, and
without further notice to or acknowledgement from the Seller. The Seller waives,
to the extent permitted by applicable law, all claims, causes of action and
remedies whether legal or equitable (including any rights of set-off) against
the Issuer or any assignee of the Issuer relating to such action by the Issuer
in connection with the transactions contemplated by this Agreement, each
Transfer Agreement, the Trust Agreement and the Indenture.
SECTION 2.04. Endorsement. The Seller hereby appoints each of
the Eligible Lender Trustee and the Indenture Trustee as the Seller's true and
lawful attorney-in-fact with full power of substitution to endorse the Seller's
name on any promissory note evidencing the Initial Financed Student Loans and
any Additional Student Loans transferred to the Eligible Lender Trustee on
behalf of the Trust pursuant to Sections 2.01 and 2.02. The Seller acknowledges
and agrees that this power of attorney shall be construed as a power coupled
with an interest, shall be irrevocable as long as the Trust Agreement remains in
effect and shall continue in effect until the Trust Agreement terminates.
ARTICLE III
The Financed Student Loans
SECTION 3.01. Representations and Warranties of Seller with
Respect to the Financed Student Loans. The Seller represents and warrants with
respect to the Financed Student Loans as set forth in Exhibit C hereto. Such
representations and warranties 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, and as of the applicable Transfer Date, in the case of the
Additional Student Loans, but shall survive the sale, transfer and assignment of
the Financed Student Loans to the Eligible Lender Trustee on behalf of the
Issuer and the
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pledge thereof to the Indenture Trustee pursuant to the Indenture.
SECTION 3.02. Repurchase upon Breach; Reimbursement. Upon
discovery by the Seller, the Master Servicer, any Servicer, any Subservicer, the
Eligible Lender Trustee or the Indenture Trustee of any breach of the Seller's
representations and warranties made by the Seller pursuant to Section 3.01 or
Section 4.01, the party discovering the breach shall give prompt written notice
to the others. Unless any such breach shall have been cured within 120 days
after the Seller becomes aware or receives written notice (whichever is earlier)
of such breach, the Seller shall be obligated to repurchase any Financed Student
Loan in which the interests of the Noteholders or the Certificateholders are
materially and adversely affected by any such breach as of the first day
succeeding the end of such 120-day period that is the last day of a Monthly
Collection Period; provided, that, it is understood that any such breach that
does not affect any Guarantor's obligation to guarantee payment of such Financed
Student Loan to the Eligible Lender Trustee will not be considered to have a
material adverse effect for this purpose and it is further understood that any
dispute as to whether a Guarantor's obligation has been so affected will be
resolved by the decision of the Indenture Trustee for so long as Notes are
Outstanding and thereafter by the Eligible Lender Trustee. In consideration of
and simultaneously with the repurchase of a Financed Student Loan, the Seller
shall remit the Purchase Amount therefor, in the manner specified in Section
3.03, and the Issuer shall execute such assignments and other documents
reasonably requested by the Seller in order to effect such transfer. Upon any
such transfer of a Financed Student Loan, legal title to, and beneficial
ownership and control of, the related Student Loan File will thereafter belong
to the Seller. In addition, if any such breach by the Seller does not trigger
such a repurchase obligation but does result in the refusal by a Guarantor to
guarantee all or a portion of the accrued interest, or the loss (including any
obligation of the Issuer to repay the Department) of certain Interest Subsidy
Payments and Special Allowance Payments, then, unless such breach, if curable,
is cured within 120 days, the Seller shall reimburse the Issuer by remitting an
amount equal to all such non-guaranteed interest amounts and such forfeited
Interest Payments and Special Allowance Payments in the manner specified in
Section 3.03. Subject to the provisions of Section 4.03, the sole remedy of the
Issuer, the Eligible Lender Trustee, the Indenture Trustee, the Noteholders or
the Certificateholders with respect to a breach of representations and
warranties pursuant to Section 3.01, and the agreement contained in this
Section, shall be to require the Seller to repurchase Financed Student Loans or
to reimburse the Issuer as provided above pursuant to this Section, subject to
the conditions contained herein.
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SECTION 3.03. Repurchase Deposits. The Seller shall deposit or
cause to be deposited in the Collection Account the aggregate Purchase Amount
with respect to Purchased Student Loans and all other amounts to be paid by the
Seller under Section 3.02 and Section 5.01 when such amounts are due.
SECTION 3.04 Incentive Loans and Incentive Deposits. Pursuant
to the Master Servicing Agreement, the Master Servicer may establish the terms
of, 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 or
other applicable law, upon notice to the Eligible Lender Trustee and the
Indenture Trustee. Until the effective date of any termination, the Seller shall
deposit into the Collection Account the Incentive Deposit with respect to such
Incentive Financed Student Loan as provided below. In the event that the Seller
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 Seller shall deposit or cause to be deposited into the
Collection Account no later than the Business Day preceding each Distribution
Date the aggregate Incentive Deposits with respect to Incentive Financed Student
Loans in the Trust as of the last day of the related Collection Period. Such
deposits shall be considered deposits in respect of interest or, if such deposit
is made in respect of a principal reduction on an Incentive Financed Student
Loan, of principal 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 Collection
Period.
ARTICLE IV
The Seller
SECTION 4.01. Representations of Seller. The Seller represents
as set forth in Exhibit D hereto. Such 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, and as of the applicable Transfer Date in the
case of the Additional Student Loans, but shall survive the sale, transfer and
assignment 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.
SECTION 4.02. Existence. Subject to Section 4.04 hereof,
during the term of this Agreement, the Seller will keep
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in full force and effect its existence, rights and franchises as a banking
corporation under the laws of the jurisdiction of its organization and will
obtain and preserve its qualification to do business in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, the other Basic Documents and each other
instrument or agreement necessary or appropriate to the proper administration of
this Agreement and the transactions contemplated hereby.
SECTION 4.03. Liability of Seller; Indemnities. The Seller
shall be liable in accordance herewith only to the extent of the obligations
specifically undertaken by the Seller under this Agreement.
(a) The Seller shall indemnify, defend and hold harmless
the Issuer, the Eligible Lender Trustee and the Indenture Trustee and
their officers, directors, employees and agents from and against any
taxes that may at any time be asserted against any such Person with
respect to the transactions contemplated herein and in the other Basic
Documents (except any such income taxes arising out of fees paid to the
Eligible Lender Trustee or the Indenture Trustee), including any sales,
gross receipts, general corporation, tangible personal property,
privilege or license taxes (but, in the case of the Issuer, not
including the issuance and original sale of the Certificates and the
Notes, or asserted with respect to ownership of the Financed Student
Loans or Federal or other income taxes arising out of distributions on
the Certificates and the Notes) and costs and expenses in defending
against the same.
(b) The Seller shall indemnify, defend and hold harmless
the Issuer, the Eligible Lender Trustee, the Indenture Trustee, the
Certificateholders and the Noteholders and the officers, directors,
employees and agents of the Issuer, the Eligible Lender Trustee and the
Indenture Trustee from and against any and all reasonable costs and
expenses and any and all losses, claims, damages and liabilities in
each case arising out of, or imposed upon such Person through, (i) the
Seller's willful misfeasance, bad faith or negligence in the
performance of its duties under this Agreement, or by reason of
reckless disregard of its obligations and duties under this Agreement
and (ii) the Seller's or the Issuer's violation of Federal or state
securities laws in connection with the offering and sale of the Notes
and the Certificates.
(c) The Seller shall be liable as primary obligor for, and
shall indemnify, defend and hold harmless the Eligible Lender Trustee
and its officers, directors, employees and agents from and against, all
reasonable costs and expenses
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and all losses, claims, damages, obligations and liabilities arising
out of, incurred in connection with or relating to the Trust Agreement,
the other Basic Documents, the Trust Estate, the acceptance or
performance of the trusts and duties set forth herein and in the Trust
Agreement or the action or the inaction of the Eligible Lender Trustee
hereunder and under the Trust Agreement, except to the extent that such
cost, expense, loss, claim, damage, obligation or liability: (i) shall
be due to the willful misfeasance, bad faith or negligence (except for
errors in judgment) of the Eligible Lender Trustee, (ii) shall arise
from any breach by the Eligible Lender Trustee of its covenants under
any of the Basic Documents; or (iii) shall arise from the breach by the
Eligible Lender Trustee of any of its representations or warranties set
forth in Section 7.03 of the Trust Agreement. In the event of any
claim, action or proceeding for which indemnity will be sought pursuant
to this paragraph, the Eligible Lender Trustee's choice of legal
counsel shall be subject to the approval of the Seller, which approval
shall not be unreasonably withheld.
(d) The Seller shall pay any and all taxes levied or
assessed upon all or any part of the Trust Estate (other than those
taxes expressly excluded from the Seller's responsibilities pursuant to
the parentheticals in paragraph (a) above).
Indemnification under this Section shall survive the
resignation or removal of the Eligible Lender Trustee or the Indenture Trustee
and the termination of this Agreement or the Indenture or the Trust Agreement,
as applicable, and shall include reasonable fees and expenses of counsel and
expenses of litigation. If the Seller shall have made any indemnity payments
pursuant to this Section and the Person to or on behalf of whom such payments
are made thereafter shall collect any of such amounts from others, such Person
shall promptly repay such amounts to the Seller, without interest.
SECTION 4.04. Merger or Consolidation of, or Assumption of the
Obligations of Seller. Any Person (a) into which the Seller may be merged or
consolidated, (b) which may result from any merger or consolidation to which the
Seller shall be a party, (c) which may succeed to the properties and assets of
the Seller substantially as a whole or (d) to which the student lending business
of the Seller shall otherwise be transferred substantially as a whole, shall be
the successor to the Seller without the execution or filing of any document or
any further act by any of the parties to this Agreement; provided, however, that
the Seller hereby covenants that it will not consummate any of the foregoing
transactions except upon satisfaction of the following: (i) the surviving
entity, if other than the Seller,
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executes an agreement of assumption to perform every obligation of the Seller
under this Agreement, (ii) immediately after giving effect to such transaction,
no representation or warranty made pursuant to Section 3.01 or 4.01 shall have
been breached and no Servicer Default, Event of Default or Administrator Default
and no event that, after notice or lapse of time, or both, would become a
Servicer Default, Event of Default or Administrative Default shall have occurred
and be continuing, (iii) the Seller 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, succession or transfer 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 or, in the case of a transfer
pursuant to clause (d) to a Person that is a Non-Code Entity, notice of such
transfer and assumption shall have been delivered to each Rating Agency, (iv)
such transaction will not result in a material adverse Federal or state tax
consequence to the Issuer, the Noteholders or the Certificateholders and (v)
unless the Seller is the surviving entity, the surviving entity 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 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.
SECTION 4.05. Limitation on Liabilities of Seller and Others.
The Seller and any director or officer or employee or agent of the Seller 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 (provided that such reliance shall not limit in any way the
Seller's obligations under Section 3.02). The Seller shall not be under any
obligation to appear in, prosecute or defend any legal action that is not
incidental to its respective obligations under this Agreement, and that in its
opinion may involve it in any expense or liability.
SECTION 4.06. Seller May Own Certificates or Notes. The Seller
and any Affiliate of the Seller may in its individual or any other capacity
become the owner or pledgee of Certificates or Notes with the same rights as it
would have if it were not the Seller or an Affiliate of the Seller, except as
expressly provided herein or in any other Basic Document.
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ARTICLE V
Termination
SECTION 5.01. Termination. (a) Optional Purchase of All
Financed Student Loans. As of the last day of any Collection Period immediately
preceding a Distribution Date as of which the then outstanding Pool Balance is
10% or less of the sum of the Initial Pool Balance and the Initial Pre-Funded
Amount, the Seller or its designee shall have the option to purchase the Trust
Estate, other than the Trust Accounts. To exercise such option, the Seller shall
deposit in the Collection Account an amount equal to the Minimum Purchase Price
for the Financed Student Loans and the related rights with respect thereto, plus
the appraised value of any such other property held by the Trust other than the
Trust Accounts, such value to be determined by an appraiser mutually agreed upon
by the Master Servicer, the Eligible Lender Trustee and the Indenture Trustee,
and shall succeed to all interests in and to the Trust.
(b) Insolvency of Company. Upon any sale of the assets
of the Trust pursuant to Section 9.02 of the Trust Agreement, the Seller shall
cooperate with and assist the Administrator consistent with the provisions of
the Administration Agreement with respect to Company insolvency.
ARTICLE VI
Miscellaneous
SECTION 6.01. Amendment. This Agreement may be amended by the
Seller and the Eligible Lender Trustee, with the consent of the Indenture
Trustee, but without the consent of any of the Noteholders or the
Certificateholders, to cure any ambiguity, to correct or supplement any
provisions in this Agreement, for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions in this Agreement or
of modifying in any manner the rights of the Noteholders or the
Certificateholders or in connection with a transaction described in Section 4.04
hereof; provided, however, that such action shall not, as evidenced by an
Opinion of Counsel delivered to the Eligible Lender Trustee and the Indenture
Trustee, adversely affect the interests of any Noteholder or any
Certificateholder.
This Agreement may also be amended from time to time by the
Seller and the Eligible Lender Trustee, with the consent of the Indenture
Trustee, the Noteholders of Notes evidencing not less than a majority of the
Outstanding Amount of the Notes and the Certificateholders of Certificates
evidencing not less than a majority of the Certificate Balance, for the purpose
of adding
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any provisions to or changing in any manner or eliminating any of the provisions
of this Agreement or of modifying in any manner the rights of the Noteholders or
the Certificateholders; provided, however, that no such amendment shall (a)
increase or reduce in any manner the amount of, or accelerate or delay the
timing of, collections of payments with respect to Financed Student Loans or
distributions that shall be required to be made for the benefit of the
Noteholders or the Certificateholders or (b) reduce the aforesaid percentage of
the Outstanding Amount of the Notes and the Certificate Balance, the Noteholders
or the Certificateholders of which are required to consent to any such
amendment, without the consent of all outstanding Noteholders and
Certificateholders.
Promptly after the execution of any such amendment or consent
(or, in the case of the Rating Agencies, five Business Days prior thereto), the
Eligible Lender Trustee shall furnish written notification of the substance of
such amendment or consent to the Seller, the Administrator, the Indenture
Trustee, the Master Servicer and each of the Rating Agencies.
It shall not be necessary for the consent of
Certificateholders or Noteholders pursuant to this Section to approve the
particular form of any proposed amendment or consent, but it shall be sufficient
if such consent shall approve the substance thereof.
Prior to the execution of any amendment to this Agreement, the
Eligible Lender Trustee and the Indenture Trustee shall receive upon request and
rely upon an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement and the Opinion of Counsel referred to
in Section 6.02(f). The Eligible Lender Trustee and the Indenture Trustee may,
but shall not be obligated to, enter into any such amendment which affects the
Eligible Lender Trustee's or the Indenture Trustee's, as applicable, own rights,
duties or immunities under this Agreement or otherwise.
SECTION 6.02. Protection of Interests in Trust. (a) The
Seller shall execute and file such financing statements and cause to be executed
and filed such continuation statements, all in such manner and in such places as
may be required by law fully to preserve, maintain, and protect the interest of
the Issuer, the Eligible Lender Trustee and the Indenture Trustee in the
Financed Student Loans and in the proceeds thereof. The Seller shall deliver
(or cause to be delivered) to the Eligible Lender Trustee and the Indenture
Trustee file-stamped copies of, or filing receipts for, any document filed as
provided above, on or prior to the date of transfer of any Financed Student
Loans to the Trust.
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(b) The Seller shall not change its name, identity or
corporate structure in any manner that would, could, or might make any financing
statement or continuation statement filed in accordance with paragraph (a) above
seriously misleading within the meaning of ss.9-402(7) of the UCC, unless it
shall have given the Eligible Lender Trustee and the Indenture Trustee at least
five (5) days' prior written notice thereof and shall have promptly filed
appropriate amendments to all previously filed financing statements or
continuation statements.
(c) The Seller shall have an obligation to give the
Eligible Lender Trustee, the Indenture Trustee and the Rating Agencies at least
five (5) days prior written notice of any relocation of its principal executive
office if, as a result of such relocation, the applicable provisions of the UCC
would require the filing of any amendment of any previously filed financing or
continuation statement or of any new financing statement and shall promptly file
any such amendment.
(d) If at any time the Seller shall propose to sell,
grant a security interest in, or otherwise transfer any interest in student
loans to any prospective purchaser, lender or other transferee, the Seller shall
give to such prospective purchaser, lender or other transferee computer tapes,
records or printouts (including any restored from backup archives) that, if they
shall refer in any manner whatsoever to any Financed Student Loan, shall
indicate clearly that such Financed Student Loan has been sold and is owned by
the Issuer and has been pledged to the Indenture Trustee.
(e) The Seller shall, to the extent required by
applicable law, cause the Certificates and the Notes to be registered with the
Commission pursuant to Section 12(b) or Section 12(g) of the Exchange Act within
the time periods specified in such sections.
(f) The Seller shall deliver to the Eligible Lender
Trustee and the Indenture Trustee:
(1) promptly after the execution and delivery of this
Agreement and of each amendment thereto and within 120 days after the
initial Transfer Date and on each Transfer Date to the extent required
pursuant to Section 2.02(d)(vii), an Opinion of Counsel either (A)
stating that, in the opinion of such counsel, all financing statements
and continuation statements have been executed and filed that are
necessary fully to preserve and protect the interest of the Eligible
Lender Trustee and the Indenture Trustee in the Financed Student Loans,
and reciting the details of such filings or referring to prior Opinions
of Counsel in which such details are given, or (B) stating that, in the
opinion of such
14
<PAGE>
counsel, no such action shall be necessary to preserve and protect such
interest; and
(2) within 120 days after the beginning of each calendar
year beginning with the first calendar year beginning more than three
months after the Cutoff Date, an Opinion of Counsel, dated as of a date
during such 120-day period, either (A) stating that, in the opinion of
such counsel, all financing statements and continuation statements have
been executed and filed that are necessary fully to preserve and
protect the interest of the Eligible Lender Trustee and the Indenture
Trustee in the Financed Student Loans, and reciting the details of such
filings or referring to prior Opinions of Counsel in which such details
are given, or (B) stating that, in the opinion of such counsel, no such
action shall be necessary to preserve and protect such interest;
provided that a single Opinion of Counsel may be delivered in
satisfaction of the foregoing requirement and that of Section 3.06(b)
of the Indenture.
Each Opinion of Counsel referred to in clause (1) or (2) above
shall specify (as of the date of such opinion and given all applicable laws as
in effect on such date) any action necessary to be taken in the following year
to preserve and protect such interest.
SECTION 6.03. Notices. All demands, notices and communications
upon or to the Seller, the Master Servicer, the Issuer, the Eligible Lender
Trustee, the Indenture Trustee, the Administrator or the Rating Agencies under
this Agreement shall be in writing, personally delivered or mailed by certified
mail, return receipt requested (or in the form of telex or facsimile notice,
followed by written notice delivered as aforesaid), and shall be deemed to have
been duly given upon receipt;
(a) in the case of the Seller, to
Signet Bank
7 North 8th Street
Richmond, Virginia 23219
Attention: Treasurer
Telephone: (804) 771-7060
Telecopy: (804) 771-7936
(b) in the case of the Master Servicer and
Administrator, to
Signet Bank
7 North 8th Street
Richmond, Virginia 23219
Attention: Treasurer
Telephone: (804) 771-7060
Telecopy: (804) 771-7936
15
<PAGE>
(c) in the case of the Issuer, to
Signet Student Loan 1996-A,
c/o First Chicago Delaware Inc., Trustee
300 King Street
Wilmington, Delaware 19801
with a copy to the Eligible Lender Trustee at the
Corporate Trust Office of the Eligible Lender Trustee
(d) in the case of the Issuer or the Eligible Lender
Trustee, at the Corporate Trust Office of the
Eligible Lender Trustee;
(e) in the case of the Indenture Trustee, at its
Corporate Trust Office;
(f) in the case of Fitch, to
Fitch Investors Service, L.P.
One State Street Plaza
New York, New York 10004
Attention: Asset Backed Monitoring Unit
Telephone: (212) 908-0500
Telecopy : (212) 480-4435;
in the case of Moody's to
Moody's Investors Service, Inc.
99 Church Street
New York, New York 10007
Attention: ABS Monitoring Department
Telephone: (212) 553-0300
Telecopy: (212) 553-0881; and
in the case of Standard & Poor's, to
Standard & Poor's Ratings Group
25 Broadway
20th Floor
New York, New York 10004
Telephone: (212) 208-8000
Telecopy: (212) 412-0225.
or, as to each of the foregoing, at such other address as shall be designated by
written notice to the other parties.
SECTION 6.04. Assignment. Notwithstanding anything to the
contrary contained herein, except as provided in Section 4.04, this Agreement
may not be assigned by the Seller. This Agreement may only be assigned by the
Eligible Lender Trustee to its permitted successor pursuant to the Trust
Agreement.
SECTION 6.05. Limitations on Rights of Others. The
provisions of this Agreement are solely for the benefit of the
16
<PAGE>
Seller, the Issuer, and the Eligible Lender Trustee and for the benefit of the
Certificateholders, the Indenture Trustee and the Noteholders, as third party
beneficiaries, and nothing in this Agreement, whether express or implied, shall
be construed to give to any other Person any legal or equitable right, remedy or
claim in the Trust Estate or under or in respect of this Agreement or any
covenants, conditions or provisions contained herein.
SECTION 6.06. Severability. Any provision of this Agreement
that is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, 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.
SECTION 6.07. Separate Counterparts. This Agreement may be
executed by the parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all such counterparts shall
together constitute but one and the same instrument.
SECTION 6.08. Headings. The headings of the various Articles
and Sections herein are for convenience of reference only and shall not define
or limit any of the terms or provisions hereof.
SECTION 6.09. Governing Law. This Agreement shall be construed
in accordance with the laws of the Commonwealth of Virginia, without reference
to its conflict of law provisions, and the obligations, rights and remedies of
the parties hereunder shall be determined in accordance with such laws.
SECTION 6.10. Assignment to Indenture Trustee. The Seller
hereby acknowledges and consents to any mortgage, pledge, assignment and grant
by the Issuer to the Indenture Trustee pursuant to the Indenture for the benefit
of the Noteholders of a security interest in all right, title and interest of
the Issuer in, to and under the Financed Student Loans or the assignment of any
or all of the Issuer's rights and obligations hereunder to the Indenture
Trustee.
SECTION 6.11. Non-Petition Covenants. Notwithstanding any
prior termination of this Agreement, the Seller shall not, prior to the date
which is one year and one day after the termination of this Agreement with
respect to the Issuer, acquiesce, petition or otherwise invoke or cause the
Issuer to invoke the process of any court or government authority for the
purpose of commencing or sustaining a case against the Issuer under any Federal
or state bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar official
of the Issuer
17
<PAGE>
or any substantial part of its property, or ordering the winding up or
liquidation of the affairs of the Issuer.
SECTION 6.12. Limitation of Liability of Eligible Lender
Trustee and Indenture Trustee. (a) Notwithstanding anything contained herein to
the contrary, this Agreement has been signed 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, except as expressly provided in the Trust
Agreement, as beneficial owner of the Issuer 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.
(b) Notwithstanding anything contained herein to the
contrary, this Agreement has been accepted by The Bank of New York not in its
individual capacity but solely as Indenture Trustee and in no event shall The
Bank of New York have any liability for the representations, warranties,
covenants, agreements or other obligations of the Issuer hereunder or in any of
the certificates, notices or agreements delivered pursuant hereto, as to all of
which recourse shall be had solely to the assets of the Issuer.
SECTION 6.13. Agreement of Seller. The Seller agrees to
execute and deliver such instruments and to take such actions as the Eligible
Lender Trustee, the Issuer, or the Indenture Trustee may reasonably request in
order to effectuate the terms and carry out the purposes of this Agreement.
SECTION 6.14. Confidentiality. (a) The Eligible Lender Trustee
and its agents, representatives or employees shall at all times maintain the
confidentiality of all Confidential Information and shall not, without the prior
written consent of the Seller, disclose to third parties (including Noteholders
or Certificateholders) or use such information, in any manner whatsoever, in
whole or in part, except as expressly permitted under this Agreement or as
required to fulfill an obligation of the Eligible Lender Trustee under this
Agreement, in which case such Confidential Information shall be revealed only to
the extent required for the purpose of fulfilling an obligation of the Eligible
Lender Trustee under this Agreement. Notwithstanding the above, Confidential
Information may be disclosed to the extent required by law or legal process,
provided that the Eligible Lender Trustee gives prompt written notice to the
Seller of the nature and scope of such disclosure.
(b) Notwithstanding anything in this Agreement to the
contrary, the Seller shall not be obligated to disclose to any
18
<PAGE>
Person (i) any information regarding Obligors, the disclosure of which is
prohibited by applicable law, or (ii) any information relating to the strategic
plans or opportunities of its student lending business.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective officers as of the day and
year first above written.
SIGNET STUDENT LOAN TRUST
1996-A,
by
THE FIRST NATIONAL BANK OF CHICAGO, not
in its individual capacity but solely as
Eligible Lender Trustee on behalf of the
Trust,
by /s/ BARBARA G. GROSSE
---------------------------------
Name: BARBARA G. GROSSE
Title: ASSISTANT VICE PRESIDENT
SIGNET BANK,
as Seller
by /s/ SUZANNE BACHMAN
--------------------------------
Name: SUZANNE BACHMAN
Title: Sr. VICE PRESIDENT
THE FIRST NATIONAL BANK OF CHICAGO, not
in its individual capacity but solely as
Eligible Lender Trustee,
by /s/ BARBARA G. GROSSE
----------------------------------
Name: BARBARA G. GROSSE
Title: ASSISTANT VICE PRESIDENT
19
<PAGE>
Acknowledged and accepted
as of the day and year first
above written:
THE BANK OF NEW YORK, not in
its individual capacity but
solely as Indenture Trustee,
by /s/ CHERYL L. LASER
-------------------------
Name: CHERYL L. LASER
Title: ASSISTANT VICE PRESIDENT
20
<PAGE>
SCHEDULE A
TO THE
LOAN SALE AGREEMENT
Schedule of Student Loans
[To be supplied by Signet at Closing.]
21
<PAGE>
EXHIBIT A
TO THE LOAN SALE AGREEMENT
BILL OF SALE
For value received, in accordance with the Loan Sale Agreement
(the "Loan Sale Agreement") dated as of November 1, 1996, among Signet Bank, as
seller (the "Seller"), Signet Student Loan Trust 1996-A (the "Trust"), and The
First National Bank of Chicago, not in its individual capacity but solely as
Eligible Lender Trustee (the "Eligible Lender Trustee"), the Seller does hereby
sell, assign, transfer and otherwise convey unto the Eligible Lender Trustee on
behalf of the Trust, without recourse (subject to the obligations set forth in
the Loan Sale Agreement), all right, title and interest in and to (i) the
Initial Financed Student Loans and all obligations of the Obligors thereunder,
together with all documents, the related Student Loan Files and all rights and
privileges related thereto, (ii) all payments and/or collections received
thereunder after the Cutoff Date, (iii) all funds on deposit from time to time
in the Trust Accounts, including the Reserve Account Initial Deposit and the
Initial Pre-Funded Amount, and in all investments and proceeds thereof
(including all income thereon) and (iv) all proceeds of any and all of the
foregoing (including but not limited to proceeds derived from the voluntary or
involuntary conversion of any of the Initial Financed Student Loans into cash or
other liquidated property, such as proceeds from the applicable Guarantee
Agreement). The foregoing sale does not constitute and is not intended to result
in any assumption by the Eligible Lender Trustee or the Trust of any obligation
of the Seller to the borrowers of Initial Financed Student Loans or any other
Person in connection with the Initial Financed Student Loans or any agreement or
instrument relating to any of them.
In addition, the undersigned, by execution of this instrument,
hereby endorses the promissory notes evidencing each Initial Financed Student
Loan described in Schedule A to the Loan Sale Agreement in favor of the Eligible
Lender Trustee on behalf of the Trust, without recourse (subject to the
obligations set forth in the Loan Sale Agreement) against the undersigned. This
endorsement may be effected by attaching a facsimile hereof to each or any of
such promissory notes.
This Bill of Sale is made pursuant to and upon the
representations, warranties and agreements on the part of the undersigned
contained in the Loan Sale Agreement and is to be governed by the Loan Sale
Agreement.
Capitalized terms used but not defined herein shall have the
meaning assigned to them in Appendix A to the
A-1
<PAGE>
Administration Agreement, dated as of November 1, 1996, among Signet Student
Loan Trust 1996-A, as Issuer, Signet Bank, as Administrator, and The Bank of New
York, as Indenture Trustee, which also contains rules as to usage that shall be
applicable herein.
IN WITNESS WHEREOF, the undersigned has caused this Bill of
Sale to be duly executed as of November 1, 1996.
SIGNET BANK, as Seller
by
-------------------------
Name:
Title:
A-2
<PAGE>
EXHIBIT B
TO THE
LOAN SALE AGREEMENT
TRANSFER AGREEMENT
TRANSFER No. _____ Of ADDITIONAL STUDENT LOANS dated as of
______________, _____, among SIGNET STUDENT LOAN TRUST 1996-A, a Delaware trust
(the "Issuer"), SIGNET BANK, as seller (the "Seller") and THE FIRST NATIONAL
BANK OF CHICAGO, a national banking association, not in its individual capacity
but solely as Eligible Lender Trustee of the Issuer (the "Eligible Lender
Trustee").
W I T N E S S E T H:
WHEREAS the Issuer, the Seller and the Eligible Lender Trustee
are parties to the Loan Sale Agreement dated as of November 1, 1996 (as amended
or supplemented, the "Loan Sale Agreement");
WHEREAS the Seller, as depositor, Signet Student Loan
Corporation, as Company, and the Eligible Lender Trustee are parties to the
Trust Agreement dated as of November 1, 1996 (as amended or supplemented, the
"Trust Agreement");
WHEREAS pursuant to the Loan Sale Agreement, the Seller wishes
to convey the Additional Student Loans referred to in Section 2 (the "Additional
Student Loans") to the Eligible Lender Trustee on behalf of the Issuer; and
WHEREAS, the Eligible Lender Trustee and the Issuer are
willing to accept such conveyance subject to the terms and conditions hereof.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Definitions and Usage. Unless otherwise defined herein,
capitalized terms used herein shall have the meanings ascribed to them in
Appendix A to the Loan Sale Agreement, which also contains rules of construction
and usage that shall be applicable herein.
In addition, the following terms have the following meanings:
"Subsequent Cutoff Date" means, with respect to each
Additional Student Loan, the date specified as such on Schedule A
hereto.
"Transfer Date" means, with respect to the Additional Student
Loans, ________________, _______.
B-1
<PAGE>
2. Schedule of Financed Student Loans. Attached hereto as
Schedule A is a supplement to Schedule A to the Loan Sale Agreement listing the
Additional Student Loans to be conveyed on the Transfer Date to the Eligible
Lender Trustee on behalf of the Issuer pursuant to this Agreement.
3. Conveyance of Additional Student Loans. In consideration
of the Issuer's delivery to or upon the order of the Seller of $___________
(such amount being the Purchase Amounts of the Additional Student Loans and such
amount to be paid, during the Funding Period, from amounts on deposit in the
Pre-Funding Account subject to the provisions of Section 2.02(b) of the Loan
Sale Agreement and Section 2(f) of the Administration Agreement and after the
Funding Period from amounts on deposit in the Collection Account), the Seller
does hereby sell, assign and otherwise convey, without recourse (except as
expressly provided in the Loan Sale Agreement), to the Eligible Lender Trustee
on behalf of the Issuer:
(a) All right, title and interest in and to the Additional
Student Loans and all obligations of the Obligors thereunder, together
with all documents, the related Student Loan Files and all rights and
privileges relating thereto;
(b) all payments on or collections received thereunder,
after the related Subsequent Cutoff Date; and
(c) all proceeds of any and all of the foregoing.
4. Conditions Precedent. The obligation of the Issuer to
acquire the Additional Student Loans hereunder is subject to the satisfaction,
on or prior to the Transfer Date, of the following conditions precedent:
(a) Representations and Warranties. Each of the
representations and warranties made by the Seller in Sections 3.01 and
4.01 of the Loan Sale Agreement shall be true and correct as of the
Transfer Date.
(b) Loan Sale Agreement Conditions. Each of the
conditions set forth in Section 2.02(d) of the Loan Sale Agreement
shall have been satisfied.
(c) Delivery of Bill of Sale. The Seller shall have
delivered a Bill of Sale substantially in the form of Annex A hereto.
(d) Additional Information. The Seller shall have
delivered to the Issuer such information as was reasonably requested by
the Issuer to satisfy itself as to (i) the accuracy of the
representations and warranties set forth in Sections 3.01 and 4.01 of
the Loan Sale Agreement and (ii)
B-2
<PAGE>
the satisfaction of the conditions set forth in this Section 4.
5. Ratification of Agreement. As supplemented by this
Agreement, the Loan Sale Agreement is in all respects ratified and confirmed and
the Loan Sale Agreement as so supplemented by this Agreement shall be read,
taken and construed as one and the same instrument.
6. Counterparts. This Agreement may be executed in separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which together shall constitute but one and the same instrument.
7. Governing Law. This Agreement shall be construed in
accordance with the laws of the Commonwealth of Virginia, without reference to
its conflict of law provisions, and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws.
8. 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.
B-3
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their respective duly authorized
officers as of the day and the year first above written.
SIGNET STUDENT LOAN TRUST 1996-A,
by
THE FIRST NATIONAL BANK OF
CHICAGO, not in its individual
capacity but solely as Eligible
Lender Trustee,
by __________________________
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO,
not in its individual capacity but
solely as Eligible Lender Trustee,
by ___________________________
Name:
Title:
SIGNET BANK, as Seller
by
___________________________
Name:
Title:
Acknowledged and accepted as
of the date first above written:
THE BANK OF NEW YORK,
not in its individual
capacity but solely as
Indenture Trustee,
by _________________________
Name:
Title:
B-4
<PAGE>
SCHEDULE A
TO THE
TRANSFER AGREEMENT NO. ___
[List of Additional Student Loans
and their related Subsequent Cutoff Dates]
B-5
<PAGE>
ANNEX A
TO THE TRANSFER AGREEMENT
BILL OF SALE
For value received, in accordance with the Loan Sale Agreement
(the "Loan Sale Agreement") dated as of [ ], 1996, among Signet Bank, as seller
(the "Seller"), Signet Student Loan Trust 1996-A (the "Trust") and The First
National Bank of Chicago, not in its individual capacity but solely as Eligible
Lender Trustee (the "Eligible Lender Trustee") ratified by the Transfer
Agreement No. ____ dated as of ______, ______ (the "Transfer Agreement") among
the Seller, the Trust and the Eligible Lender Trustee, the Seller does hereby
sell, assign, transfer and otherwise convey unto the Eligible Lender Trustee on
behalf of the Trust, without recourse (subject to the obligations set forth in
the Loan Sale Agreement), all right, title and interest in and to (i) the
Additional Student Loans and all obligations of the Obligors thereunder,
together with all documents, the related Student Loan Files and all rights and
privileges related thereto, (ii) all payments and collections received
thereunder, after the Subsequent Cutoff Date and (iii) all proceeds of any and
all of the foregoing (including but not limited to proceeds derived from the
voluntary or involuntary conversion of any of the Additional Student Loans into
cash or other liquidated property, such as proceeds from the applicable
Guarantee Agreement). The foregoing sale does not constitute and is not intended
to result in any assumption by the Eligible Lender Trustee or the Trust of any
obligation of the Seller to the borrowers of the Additional Student Loans or any
other person in connection with the Additional Student Loans or any agreement or
instrument relating to any of them.
In addition, the undersigned, by execution of this instrument,
hereby endorses the promissory notes evidencing each Additional Student Loan
described in Schedule A to the Transfer Agreement in favor of the Eligible
Lender Trustee on behalf of the Trust, without recourse (subject to the
obligations set forth in the Loan Sale Agreement) against the undersigned. This
endorsement may be effected by attaching a facsimile hereof to each or any of
such promissory notes.
This Assignment is made pursuant to and upon the
representations, warranties and agreements on the part of the undersigned
contained in the Loan Sale Agreement and the Transfer Agreement and is to be
governed by the Loan Sale Agreement and the Transfer Agreement.
B-6
<PAGE>
Capitalized terms used but not defined herein shall have the
meaning assigned to them in the Transfer Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Bill of
Sale to be duly executed as of ________________, ______.
SIGNET BANK, as Seller
by
---------------------
Name:
Title:
B-7
<PAGE>
EXHIBIT C
TO THE LOAN SALE AGREEMENT
1. Characteristics of Financed Student Loans. Each Financed
Student Loan (A) was originated in the United States of America, its
territories, its possessions or other areas subject to its jurisdiction
by an "eligible lender" under the Higher Education Act in the ordinary
course of its business to an eligible borrower under applicable law and
agreements and was fully and properly executed by the parties thereto,
(B) was originated or acquired by the Seller in the ordinary course of
its business, and (C) provides or, when the payment schedule with
respect thereto is determined, will provide for payments on a periodic
basis that fully amortizes the principal amount of such Financed
Student Loan by its maturity, as such maturity may be modified in
accordance with any applicable deferral or forbearance periods granted
in accordance with applicable laws and restrictions, including those of
the Higher Education Act or the applicable Guarantee Agreement, and
yield interest at the rate applicable thereto. Each Financed Student
Loan is guaranteed by an eligible guarantor under the Higher Education
Act and qualifies the holder thereof to receive Interest Subsidy
Payments (other than unsubsidized SLS Loans, unsubsidized Stafford
Loans, unsubsidized PLUS Loans, and unsubsidized Consolidation Loans)
and Special Allowance Payments (except for any immaterial portion of
Consolidation Loans that refinanced HEAL Loans and that are part of the
Initial Financed Student Loans) from the Department and Guarantee
Payments from the applicable Guarantor and qualifies the applicable
Guarantor to receive reinsurance payments thereon from the Department.
2. Schedule of Financed Student Loans. The information set
forth in Schedule A to this Agreement is true and correct in all
material respects as of the close of business on the Cutoff Date. With
respect to any Additional Student Loan conveyed to the Issuer after the
Closing Date, information for each category set forth in Schedule A has
been provided with respect to such loan and such information is true
and correct in all material respects, as of the date of the close of
business on the applicable Subsequent Cutoff Date. No selection
procedures believed to be adverse to the Noteholders or the
Certificateholders were utilized in selecting any Financed Student
Loan. The computer tape regarding the Initial Financed Student Loans
made available to the Issuer and its assigns is true and correct in all
material respects as of the Cutoff Date and, after the Closing Date,
any computer tape regarding any Additional Student Loan made available
to the Issuer and its assigns is true and correct in all material
respects as of the applicable Subsequent Cutoff Date.
C-1
<PAGE>
3. Compliance with Law. Each Financed Student Loan complied at
the time of origination and at the time of the execution of this
Agreement or the applicable Transfer Agreement or Assignment, as the
case may be, in all material respects with all applicable requirements
of local, state, and federal laws, rules and regulations which govern
the making of such Financed Student Loan including the requirements of
the applicable Guarantee Agreement.
4. Binding Obligation. The terms and conditions of each
Financed Student Loan are consistent with the application of the
Borrower, all signatures for the Financed Student Loans are genuine and
the Borrower Note evidencing each Financed Student Loan has been duly
executed and delivered and constitutes the legal, valid, and binding
obligation of the Borrower enforceable in accordance with its terms.
5. No Defenses. No right of rescission, setoff,
counterclaim, or defense has been asserted or threatened or exists with
respect to any Financed Student Loan.
6. No Default. No Financed Student Loan has a payment that is
more than 90 days overdue as of the Cutoff Date or as of the applicable
Subsequent Cutoff Date, as the case may be, and, except as permitted in
this paragraph, no default, breach, violation or event permitting
acceleration under the terms of any Financed Student Loan has occurred;
and, except for payment defaults continuing for a period of not more
than 90 days, no continuing condition that with notice or the lapse of
time or both would constitute a default, breach, violation or event
permitting acceleration under the terms of any Financed Student Loan
has arisen; and the Seller has not waived and shall not waive any of
the foregoing other than as permitted by the Basic Documents.
7. Title. It is the intention of the Seller that the
transfer and assignment herein contemplated constitute a sale of the
Financed Student Loans from the Seller to the Eligible Lender Trustee
on behalf of the Issuer and that the beneficial interest in and title
to such Financed Student Loans not be part of the estate of the Seller
in the event of the appointment of a receiver with respect to the
Seller. Immediately prior to the transfer and sale of each Financed
Student Loan to the Trust, each Borrower Note is owned by the Seller
and the Seller has good title to each Financed Student Loan, free and
clear of any lien, charge, encumbrance, or other interest therein and
immediately upon the transfer and sale of such Financed Student Loan to
the Trust, the Eligible Lender Trustee on behalf of the Issuer will
have good title to such Financed Student Loan free and clear of any
lien, charge, encumbrance, or other interest therein except as
contemplated by the Basic Documents. The
C-2
<PAGE>
Seller's computer files relating to the Financed Student Loans have
been marked to indicate that such Financed Student Loans have been sold
to the Trust.
8. All Filings Made. All filings (including UCC filings)
necessary in any jurisdiction to give the Eligible Lender Trustee on
behalf of the Issuer a first perfected ownership interest in the
Financed Student Loans, and to give the Indenture Trustee a first
perfected security interest therein, have been made.
9. No Bankruptcies. No Borrower of any Financed Student Loan
as of the Cutoff Date or the applicable Subsequent Cutoff Date (in the
case of Additional Student Loans) was noted in the related Student Loan
File as being currently involved in a bankruptcy proceeding.
10. Lawful Assignment. No Financed Student Loan has been
originated in, or is subject to the laws of, any jurisdiction under
which the origination, sale, transfer and assignment of such Financed
Student Loan or any Financed Student Loan under this Agreement, each
Transfer Agreement or the Indenture is unlawful, void or voidable.
11. One Original. There is only one original executed copy
of the promissory note evidencing each Financed Student Loan.
12. Accounts. Each Financed Student Loan may be pledged or
transferred as an "account" as defined in the UCC.
C-3
<PAGE>
EXHIBIT D
TO THE LOAN SALE AGREEMENT
1. Organization and Good Standing. The Seller has been
organized and is existing as a banking corporation in good standing
under the laws of the Commonwealth of Virginia and is authorized to do
business in every state in which it is doing business as well as the
state in which it is organized and incorporated.
2. Power and Authority of the Seller. The Seller has the
corporate power and authority to execute and deliver this Agreement and
to carry out its terms; the Seller has full corporate power and
authority to sell and assign the property to be sold and assigned to
and deposited with the Issuer (or with the Eligible Lender Trustee on
behalf of the Issuer) and the Seller has duly authorized such sale and
assignment to the Issuer (or to the Eligible Lender Trustee on behalf
of the Issuer) by all necessary corporate action; and the execution,
delivery and performance of this Agreement have been duly authorized by
the Seller by all necessary corporate action.
3. Binding Obligation. This Agreement has been executed and
delivered by the Seller and, assuming authorization, execution, and
delivery by the other parties thereto, this Agreement constitutes a
valid obligation of the Seller enforceable against it in accordance
with the express terms of this Agreement, except as enforcement thereof
may be limited by the bankruptcy, insolvency, reorganization,
moratorium, liquidation, readjustment of debt, or other federal or
state laws or equitable principles relating to or affecting the
enforcement of creditor's rights or the rights of creditors of banks
the deposit accounts of which are subject to the FDIC.
4. No Violation. The consummation of the transactions
contemplated by this Agreement or the Administration Agreement and the
fulfillment of the terms hereof or thereof do not conflict with, result
in any breach of any of the terms and provisions of, nor constitute
(with or without notice or lapse of time or both) a default under, the
articles of incorporation or by-laws of the Seller, or any material
indenture, agreement or other instrument to which the Seller is a party
or by which it shall be bound; nor result in the creation or imposition
of any Lien upon any of its properties pursuant to the terms of any
such indenture, agreement or other instrument (other than pursuant to
the Basic Documents); nor violate any law or, to the knowledge of the
Seller, any order, rule or regulation applicable to the Seller of any
court or of any Federal or state regulatory body, administrative agency
or other governmental instrumentality having jurisdiction over the
D-1
<PAGE>
Seller or its properties. The consummation of the transactions
contemplated by this Agreement or by the Administration Agreement and
the fulfillment of the terms hereof and thereof will not result in the
loss of any Guarantee Payments by the Trust or any reinsurance payments
with respect to any Financed Student Loans by the applicable Guarantor.
5. No Proceedings. There is no action, suit, claim,
investigation, or proceeding, in any such case whether pending or to
the knowledge of the Seller, threatened against the Seller before any
court, governmental agency, or arbitrator (i) asserting the invalidity
of this Agreement, the Indenture or any of the other Basic Documents,
the Notes or the Certificates, (ii) seeking to prevent the issuance of
the Notes or the Certificates or the consummation of any 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 Seller of its obligations under, or the validity or
enforceability of, this Agreement, the Indenture, any of the other
Basic Documents, the Notes or the Certificates or (iv) seeking to
affect adversely the Federal or state income tax attributes of the
Issuer, the Notes or the Certificates.
6. All Consents. No action, including, without limitation, the
granting or issuing of any consent, permit, license, approval, or
authorization which is required to be made on or prior to the date of
this Agreement in connection with the sale of Financed Student Loans
under this Agreement (with the possible exception of routine filings
which, if not made, will not render the Seller liable to any material
penalties or will not result in the transactions contemplated by this
Agreement being subject to challenge) is required.
D-2
Exhibit 99.2
EXECUTION COPY
- -------------------------------------------------------------------------------
MASTER SERVICING AGREEMENT
among
SIGNET STUDENT LOAN TRUST 1996-A,
as Issuer,
SIGNET BANK,
as Master Servicer,
and
THE FIRST NATIONAL BANK OF CHICAGO,
not in its individual capacity but solely
as Eligible Lender Trustee,
Dated as of November 1, 1996
- -------------------------------------------------------------------------------
<PAGE>
MASTER SERVICING AGREEMENT dated as of
November 1, 1996, among SIGNET STUDENT LOAN TRUST
1996-A, a Delaware trust (the "Issuer"), SIGNET BANK,
a Virginia banking corporation, as master servicer
(the "Master Servicer"), and THE FIRST NATIONAL BANK
OF CHICAGO, a national banking association, solely as
eligible lender trustee and not in its individual
capacity (the "Eligible Lender Trustee").
WHEREAS the Issuer desires to purchase from the Master
Servicer acting in its capacity as Seller a portfolio of federally reinsured
student loans originated or acquired in the ordinary course of business by the
Seller;
WHEREAS the Eligible Lender Trustee is willing to hold legal
title to, and serve as eligible lender trustee with respect to such student
loans on behalf of the Issuer; and
WHEREAS the Master Servicer is willing to service such student
loans and undertake certain administrative functions with respect thereto.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants herein contained, the parties hereto agree as follows:
ARTICLE I
Definitions and Usage
Capitalized terms used but not defined herein are defined in
Appendix A to the Administration Agreement, dated as of November 1, 1996 (the
"Administration Agreement") among the Issuer, Signet Bank, as Seller and the
Eligible Lender Trustee, which also contains rules as to usage and construction
that shall be applicable herein.
ARTICLE II
Custody of Financed Student Loans
SECTION 2.01. Custody of Student Loan Files. (a) To assure
uniform quality in servicing the Financed Student Loans and to reduce
administrative costs, the Issuer hereby revocably appoints the Master Servicer,
and the Master Servicer hereby accepts such appointment, to act for the benefit
of the Issuer and the Indenture Trustee as Custodian of the following
<PAGE>
documents or instruments which are hereby constructively delivered to the
Indenture Trustee, as pledgee of the Issuer (or will be constructively delivered
to the Indenture Trustee, as pledgee of the Issuer in the case of Additional
Student Loans, as of the applicable Transfer Date) with respect to each Financed
Student Loan:
(i) the original fully executed copy of the note evidencing
the Financed Student Loan (including the original loan application
fully executed by the Borrower); and
(ii) any and all other documents and computerized records that
the Master Servicer or any Subservicer shall keep on file, in
accordance with its customary procedures, relating to such Financed
Student Loan or any Obligor with respect thereto.
(b) To assure uniform quality in servicing the Financed
Student Loans and to reduce administrative costs, the Issuer and the Indenture
Trustee acknowledge that, subject to the provisions of Section 3.12, the Master
Servicer may appoint one or more Subservicers to act as a subcustodian (each, a
"Subcustodian") of the Student Loan Files being subserviced by such Subservicer
(the "Related Student Loan Files") pursuant to the terms of a Subservicing
Agreement which satisfies the criteria specified in Section 3.12.
SECTION 2.02. Duties of Master Servicer as Custodian. (a)
Safekeeping. The Master Servicer shall maintain custody, or shall cause one or
more Subcustodians to maintain custody, of the Student Loan Files for the
benefit of the Issuer and the Indenture Trustee and maintain, or cause the
Subcustodians to maintain, such accurate and complete accounts, records and
computer systems pertaining to each Student Loan File as shall enable the Issuer
to comply with the Basic Documents. In performing its duties as custodian the
Master Servicer shall act, and shall cause each Subcustodian to act, with
reasonable care, using that degree of skill and attention that is the customary
and usual standard of practice of prudent student loan servicers with respect to
the student loan files relating to all comparable student loans that the Master
Servicer owns or services or that such Subservicer services, as the case may be,
and shall ensure that it complies, and cause each Subcustodian to comply, with
all applicable Federal and State laws, including the Higher Education Act, with
respect thereto. The Master Servicer shall conduct, or cause to be conducted,
periodic audits of the Student Loan Files and of the related accounts, records
and computer systems, in such a manner as shall enable the Issuer or the
Indenture Trustee to verify the accuracy of the Master Servicer's record
keeping. The Master Servicer shall promptly report to the Issuer and the
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Indenture Trustee any failure to hold the Student Loan Files and maintain its
accounts, records and computer systems as herein provided and promptly take
appropriate action to remedy any such failure. Nothing herein shall be deemed to
require an initial review or any periodic review by the Issuer, the Eligible
Lender Trustee or the Indenture Trustee of the Student Loan Files.
(b) Maintenance of Records. The Master Servicer shall maintain
any Student Loan Files held by it as Custodian at one of the locations specified
in Schedule A to this Agreement, and shall cause each Subcustodian, if any, to
maintain the Related Student Loan Files at the office specified opposite such
Subcustodian's name in Schedule B to this Agreement or at such other office as
shall be specified by written notice to the Issuer and the Indenture Trustee not
later than 90 days after any change in location. Upon reasonable prior notice of
not less than three Business Days, the Master Servicer shall make available to
the Issuer and the Indenture Trustee or their respective duly authorized
representatives, attorneys or auditors a list of locations of the Student Loan
Files and the related accounts, records and computer systems at such times
during normal business hours as the Issuer or Indenture Trustee shall instruct.
(c) Release of Documents. Upon instruction from the Indenture
Trustee, the Master Servicer shall, as soon as practicable, release, or shall
cause to be released, any Student Loan File to the Indenture Trustee, the
Indenture Trustee's agent, or the Indenture Trustee's designee, as the case may
be, at such place or places as the Indenture Trustee may designate.
SECTION 2.03. Instructions; Authority To Act. The Master
Servicer shall be deemed to have received proper instructions with respect to
the Student Loan Files upon its receipt of written instructions signed by a
Responsible Officer of the Indenture Trustee.
SECTION 2.04. Custodian's Indemnification. The Master Servicer
as Custodian shall pay for any actual loss, liability or expense, including
reasonable attorneys' fees, that may be imposed on, incurred by or asserted
against the Issuer, the Eligible Lender Trustee or the Indenture Trustee or any
of their officers, directors, employees and agents as a result of any improper
act or omission in any way relating to the maintenance and custody by the Master
Servicer as Custodian of the Student Loan Files or any Subcustodian as required
by this Agreement where the final determination that any such improper act or
omission by the Master Servicer or any Subcustodian resulted in such loss,
liability or expense is established by a court of law, by an arbitrator, or by
way of settlement agreed to by the Master
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<PAGE>
Servicer; provided, however, that the amount of any liability with respect to
any Financed Student Loan shall not exceed the Purchase Amount thereof, plus any
related Interest Subsidy Payments and Special Allowance Payments not received
with respect to such loan; and provided, further, that the Master Servicer shall
not be liable to the Eligible Lender Trustee for any portion of any such amount
resulting from the willful misfeasance, bad faith or negligence of the Eligible
Lender Trustee and the Master Servicer shall not be liable to the Indenture
Trustee for any portion of any such amount resulting from the willful
misfeasance, bad faith or negligence of the Indenture Trustee. This provision
shall not be construed to limit the Master Servicer's or any other party's
rights, obligations, liabilities, claims or defenses which arise as a matter of
law or pursuant to any other provision of this Agreement.
SECTION 2.05. Effective Period and Termination. (a) The
appointment of the Master Servicer as Custodian shall become effective as of the
Closing Date and shall continue in full force and effect for so long as the
Custodian shall remain the Master Servicer hereunder. If any Person acting as
Master Servicer shall resign as Master Servicer in accordance with the
provisions of this Agreement or if all the rights and obligations of any Person
acting as Master Servicer shall have been terminated under Section 6.01, the
appointment of such Person as Custodian shall be terminated simultaneously with
the effectiveness of such resignation or termination. As soon as practicable on
or after any resignation or termination of such appointment (and in any event
within (i) 30 Business Days, with respect to the portion of the Student Loan
Files consisting of electronic records and information, and (ii) 90 Business
Days, with respect to the remaining portion of the Student Loan Files, in each
case other than any Student Loan Files held by a Subcustodian), such Person
shall deliver possession of the Student Loan Files to the Indenture Trustee or
the Indenture Trustee's agent at such place or places as the Indenture Trustee
may reasonably designate. The resigning or terminated Master Servicer will
continue to hold the Student Loan Files as agent of the Indenture Trustee until
the Student Loan Files are transferred. The termination of the Master Servicer
as Custodian shall not, absent a breach by a Subcustodian of its Subservicing
Agreement in accordance with the provisions thereof, result in the termination
of any such Subcustodian.
(b) The appointment of a Subcustodian by the Master Servicer
shall become effective as of the date specified in the related Subservicing
Agreement and shall continue in full force and effect with respect to each such
Subcustodian and its Related Student Loan Files for so long as such Subcustodian
is a
4
<PAGE>
Subservicer of the Student Loans related to such Student Loan Files. As soon as
practicable on or after any termination of the appointment of any Subcustodian
(and in any event within (i) 30 Business Days, with respect to that portion of
the Related Student Loan Files consisting of electronic records and information,
and (ii) 90 Business Days, with respect to the remaining portion of the Related
Student Loan Files), the Master Servicer shall cause such terminated
Subcustodian to deliver the Related Student Loan Files to the Master Servicer at
such place or places as the Master Servicer may reasonably designate.
ARTICLE III
Administration and Servicing of Student Loans
SECTION 3.01. Duties of Master Servicer; Appointment of
Subservicers. The Master Servicer, for the benefit of the Issuer (to the extent
provided herein), shall be responsible for the management, servicing and
administration of the Financed Student Loans and for making collections on the
Financed Student Loans and shall use reasonable care, using that degree of skill
and attention that the Master Servicer exercises with respect to all comparable
Student Loans that it services. The Master Servicer may, at any time, appoint
one or more Subservicers to perform all or a portion of its obligations as
Master Servicer hereunder pursuant to the terms of a Subservicing Agreement
which satisfies the criteria specified in Section 3.12. The Master Servicer
shall cause each Subservicer to manage, service and administer the Financed
Student Loans and make collections on the Financed Student Loans for which such
Subservicer is responsible pursuant to the terms of the applicable Subservicing
Agreement (other than collection of any Interest Subsidy Payments and Special
Allowance Payments, which the Eligible Lender Trustee will perform on behalf of
the Trust) and shall cause each Subservicer to use that degree of skill and
attention that is the customary and usual standard of practice of prudent
student loan servicers with respect to all comparable Student Loans owned or
serviced by such Subservicer. Without limiting the generality of the foregoing
or of any other provision set forth in this Agreement and notwithstanding any
other provision to the contrary set forth herein, the Master Servicer shall be
responsible for the management, servicing, administration and making collections
with respect to the Financed Student Loans (other than collection of any
Interest Subsidy Payments and Special Allowance Payments, which the Eligible
Lender Trustee will perform on behalf of the Trust) in accordance with, and
otherwise in compliance with, all applicable Federal and state laws, including
any applicable standards, guidelines and requirements of the Higher Education
Act and any Guarantee Agreement, the failure to comply with which
5
<PAGE>
would adversely affect the eligibility of one or more of the Financed Student
Loans for Federal reinsurance or Interest Subsidy Payments, Special Allowance
Payments or Guarantee Payments or would have an adverse effect on the
Certificateholders or the Noteholders. The Master Servicer also hereby
acknowledges that its obligation to service the Financed Student Loans includes
those Additional Student Loans conveyed to the Eligible Lender Trustee on behalf
of the Trust pursuant to Section 2.02 of the Loan Sale Agreement and each
related Transfer Agreement, a copy of which shall be delivered to the Master
Servicer by the Seller promptly upon execution thereof; provided that any
failure by the Seller to so deliver a Transfer Agreement shall not affect the
Master Servicer's obligations hereunder to service all the Financed Student
Loans.
The Master Servicer's duties shall include collection and
posting of all payments, responding to inquiries of borrowers on such Financed
Student Loans, monitoring borrowers' status, making required disclosures to
borrowers, investigating delinquencies, sending payment coupons to borrowers and
otherwise establishing repayment terms, reporting tax information to borrowers,
if applicable, accounting for collections and furnishing monthly and annual
statements with respect thereto to the Administrator. The Master Servicer shall
maintain, and shall cause each Subservicer to maintain, its eligibility as a
third-party servicer under the Higher Education Act. Subject to the provisions
of Section 3.02, the Master Servicer shall follow its customary standards,
policies and procedures in performing its duties as Master Servicer. Without
limiting the generality of the foregoing, the Master Servicer is authorized and
empowered to cause the execution and delivery, on behalf of itself, the Issuer,
the Eligible Lender Trustee, the Indenture Trustee, the Certificateholders and
the Noteholders or any of them, instruments of satisfaction or cancellation, or
partial or full release or discharge, and all other comparable instruments, with
respect to such Financed Student Loans; provided, however, that the Master
Servicer agrees that it will not (a) permit any rescission or cancellation of a
Financed Student Loan except as ordered by a court of competent jurisdiction or
governmental authority or as otherwise consented to in writing by the Eligible
Lender Trustee and the Indenture Trustee or (b) reschedule, revise, defer or
otherwise compromise with respect to payments due on any Financed Student Loan
except pursuant to any applicable Deferral or Forbearance periods or otherwise
in accordance with all applicable standards, guidelines and requirements with
respect to the servicing of the Financed Student Loans including Principal
Distribution Adjustments; provided further, however, that the Master Servicer
shall not permit any decrease of the interest rate on, or the principal amount
payable with respect to, any Financed Student Loan, except
6
<PAGE>
as required by applicable Federal and state laws, including any applicable
standards, guidelines and requirements of the Higher Education Act or pursuant
to Incentive Programs as provided for pursuant to the Administration Agreement.
The Master Servicer, for the benefit of the Issuer and the
Indenture Trustee (to the extent provided herein), shall promptly and routinely
furnish, or shall cause any Subservicer to furnish, the Eligible Lender Trustee
and the Indenture Trustee with copies of all material reports, records, and
other documents and data as required by this Agreement or as may otherwise be
required by the Higher Education Act. All material correspondence received by
the Master Servicer, or any Subservicer relating to individual Student Loans
shall be maintained in hard copy, microcopy or electronic form or in summary
form in an automated history file established by the Master Servicer. The Master
Servicer shall furnish, or shall cause any Subservicer to furnish, in good
condition all forms and supplies as specified in this Agreement and any
Schedules hereto. The Eligible Lender Trustee and the Indenture Trustee may
transmit Financed Student Loan account data to the Master Servicer on these
forms or by any other mutually acceptable means. In performing its duties
hereunder, the Master Servicer will be guided by and comply with the Higher
Education Act and applicable requirements of any Guarantor. The Master Servicer
agrees to produce, or cause any Subservicer to produce, a clear and precise
audit trail for each Financed Student Loan and to comply, or cause any
Subservicer to comply, with such other reporting, servicing, and operating
standards as are contained in this Agreement.
The Eligible Lender Trustee on behalf of the Issuer hereby
grants a power of attorney and all necessary authorization to the Master
Servicer, to maintain, or cause any Subservicer to maintain, any and all
collection procedures with respect to the Financed Student Loans, including
filing, pursuing and recovering claims against the Guarantors for Guarantee
Payments and taking any steps to enforce such Financed Student Loans such as
commencing a legal proceeding to enforce a Financed Student Loan in the name of
the Issuer, the Eligible Lender Trustee, the Indenture Trustee, the
Certificateholders or the Noteholders. The Eligible Lender Trustee or the
Indenture Trustee shall upon the written request of the Master Servicer or the
Administrator furnish the Master Servicer or the Administrator with (or, upon
the written request of the Master Servicer, furnish a Subservicer with) any
other powers of attorney and other documents reasonably necessary or appropriate
to enable the Master Servicer, the Administrator or such Subservicer to carry
out their servicing and administrative duties.
7
<PAGE>
The Master Servicer may establish the terms of, 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 or other applicable law, upon
notice to the Eligible Lender Trustee and the Indenture Trustee. In the event
that the Seller fails to make an Incentive Deposit with respect to an Incentive
Financed Student Loan as required pursuant to the Loan Sale Agreement, the terms
of each 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.
SECTION 3.02. Collection of Student Loan Payments. (a) The
Master Servicer shall make, or shall cause any Subservicer to make, all
reasonable efforts (including all efforts that may be specified under the Higher
Education Act or any Guarantee Agreement) to collect all payments called for
under the terms and provisions of the Financed Student Loans as and when the
same shall become due and shall follow such collection procedures as it follows
with respect to all comparable Student Loans that it services or shall cause any
Subservicer to follow such collection procedures as are consistent with the
customary and usual standard of practice of prudent student loan servicers with
respect to comparable student loans. The Master Servicer shall allocate, or
shall cause any Subservicer to allocate, collections with respect to the
Financed Student Loans between principal and interest in accordance with the
terms of each such loan. The Master Servicer may, or may permit any Subservicer,
in its discretion, to waive any late payment charge or any other fees that may
be collected in the ordinary course of servicing a Financed Student Loan.
(b) The Master Servicer shall, or shall cause any Subservicer
to, (i) make reasonable efforts to claim, pursue and collect all Guarantee
Payments from the Guarantors pursuant to the Guarantee Agreements with respect
to any of the Financed Student Loans as and when the same shall become due and
payable, (ii) comply with the Higher Education Act and all other applicable laws
and agreements with respect to claiming, pursuing and collecting such payments
and (iii) follow such practices and procedures as it follows with respect to all
comparable guarantee agreements and student loans that it services. In
connection therewith, the Master Servicer is hereby authorized and empowered to
convey, or to permit any Subservicer to convey, to any Guarantor the note and
the related Student Loan File representing any Financed Student Loan in
connection with submitting a claim to such Guarantor for a Guarantee Payment in
accordance with the terms of the applicable Guarantee Agreement.
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<PAGE>
(c) The Eligible Lender Trustee shall, with the assistance of
the Master Servicer as set forth below and on behalf of the Issuer, make
reasonable efforts to claim, pursue and collect all Interest Subsidy Payments
and Special Allowance Payments from the Department with respect to any of the
Financed Student Loans as and when the same shall become due and payable, shall
comply with all applicable laws and agreements with respect to claiming,
pursuing and collecting such payments and shall follow such practices and
procedures as the Master Servicer follows with respect to Student Loans serviced
by it. All amounts so collected by the Eligible Lender Trustee with respect to
Financed Student Loans shall constitute Monthly Available Funds for the
applicable Monthly Collection Period and Available Funds for the applicable
Collection Period, and shall be deposited into the Collection Account in
accordance with Section 4.01. In connection therewith, the Master Servicer shall
prepare and file, or shall cause any Subservicer to prepare and file, with the
Department on a timely basis all claims forms and other documents and filings
necessary or appropriate in connection with the claiming of Interest Subsidy
Payments and Special Allowance Payments on behalf of the Eligible Lender Trustee
and shall otherwise assist the Eligible Lender Trustee in pursuing and
collecting such Interest Subsidy Payments and Special Allowance Payments from
the Department. The Eligible Lender Trustee shall upon the written request of
the Master Servicer furnish the Master Servicer, or any Subservicer, with any
power of attorney and other documents reasonably necessary or appropriate to
enable the Master Servicer, or such Subservicer, to prepare and file such claims
forms and other documents and filings.
(d) The Eligible Lender Trustee will permit trusts, other than
the Trust, established by the Seller to securitize student loans to use the
Department lender identification number applicable to the Trust. In such event,
the Eligible Lender Trustee may claim and collect Interest Subsidy Payments and
Special Allowance Payments with respect to Financed Student Loans in the Trust
and student loans in such other trusts using such common lender identification
number. Notwithstanding anything herein or in the Basic Documents to the
contrary, any amounts assessed against payments (including, but not limited to,
Interest Subsidy Payments and Special Allowance Payments) due from the
Department to any such other trust using such common lender identification
number as a result of amounts (including, but not limited to, any potential
origination fees) owing to the Department from the Trust will be deemed for all
purposes hereof and of the Basic Documents (including for purposes of
determining amounts paid by the Department with respect to the student loans in
the Trust and such other trust) to have been assessed against the Trust and
shall be deducted by the Eligible Lender Trustee or the Master Servicer and paid
to such other trust from any
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<PAGE>
collections made by them which would otherwise have been payable to the
Collection Account for the Trust. If so specified in the servicing agreement
applicable to any such other trust, any amounts assessed against payments due
from the Department to the Trust as a result of amounts owing to the Department
from such other trust using such common lender identification number will be
deemed to have been assessed against such other trust and will be deducted by
the Eligible Lender Trustee or the Master Servicer from any collections made by
them which would otherwise be payable to the collection account for such other
trust and paid to the Trust.
SECTION 3.03. Realization upon Student Loans. For the benefit
of the Issuer, the Master Servicer shall use, or shall cause any Subservicer to
use, reasonable efforts consistent with the Master Servicer's or such
Subservicer's servicing practices with respect to all comparable Student Loans
owned or serviced by it, including all efforts that may be specified under the
Higher Education Act or any Guarantee Agreement, in the servicing of any
delinquent Financed Student Loans.
SECTION 3.04. No Impairment. The Master Servicer shall not
impair, nor shall it permit any Subservicer to impair, the rights of the Issuer,
the Eligible Lender Trustee, the Indenture Trustee, the Certificateholders or
the Noteholders in the Financed Student Loans.
SECTION 3.05. Purchase of Student Loans; Reimbursement. Upon
the discovery by the Master Servicer, the Eligible Lender Trustee, the Indenture
Trustee or the Seller of any breach pursuant to Sections 3.01, 3.02, 3.03, 3.04
or 3.12(a) hereof the party discovering the breach shall give prompt written
notice to the others. If the breach is not cured within 120 days after the
Master Servicer becomes aware or receives written notice (whichever is earlier)
of such breach, the Master Servicer shall purchase or arrange for the purchase
of any Financed Student Loan in which the interests of the Noteholders, the
Certificateholders, the Issuer, the Indenture Trustee or the Eligible Lender
Trustee are materially and adversely affected by such breach as of the first day
succeeding the end of such 120-day period that is the last day of a Monthly
Collection Period (it being understood that any such breach that does not affect
any Guarantor's obligation to guarantee payment of such Student Loan will not be
considered to have a material adverse effect for this purpose and it being
further understood that any dispute as to whether a Guarantor's obligation has
been so affected so as to create such a material adverse effect, shall be
resolved, for so long as the Notes are Outstanding, by the Indenture Trustee,
whose determination shall be dispositive, and after the Notes are no longer
Outstanding by the Eligible Lender
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<PAGE>
Trustee, whose determination shall then be dispositive). In consideration of the
purchase of any such Student Loan pursuant to this Section 3.05, the Master
Servicer shall remit, in the manner specified in Section 4.01, the Purchase
Amount and the Issuer shall execute such assignments and other documents
reasonably requested by the Master Servicer in order to effect the transfer of
such Student Loan to the Master Servicer or its designee. In addition, if any
such breach by the Master Servicer does not trigger such a purchase obligation
but does result in the refusal by a Guarantor to guarantee all or a portion of
the accrued interest, or the loss (including any obligation of the Issuer to
repay to the Department) of certain Interest Subsidy Payments and Special
Allowance Payments, with respect to a Financed Student Loan, then, unless such
breach, if curable, is cured within 120 days, the Master Servicer shall
reimburse the Issuer by remitting an amount equal to the sum of all such
nonguaranteed interest amounts and such forfeited Interest Subsidy Payments and
Special Allowance Payments in the manner specified in Section 4.01. Subject to
Section 5.02, the exclusive remedy of the Noteholders, the Certificateholders,
the Issuer, the Indenture Trustee, and the Eligible Lender Trustee and the
entire liability of the Master Servicer for such a breach shall be limited to
requiring the Master Servicer to purchase Financed Student Loans or to reimburse
the Issuer as provided above pursuant to this Section 3.05.
SECTION 3.06. Servicing Fee. The Servicing Fee payable to the
Master Servicer for each Interest Payment Date (the "Servicing Fee") shall be
equal to the product of (i) one-twelfth of 1.25% and (ii) the Pool Balance as of
the close of business on the last day of the preceding Monthly Collection
Period. The Servicing Fee (together with any portion of the Servicing Fee that
remains unpaid from prior Interest Payment Dates) will be payable on each
Interest Payment Date and will be paid solely out of Monthly Available Funds in
the case of each Interest Payment Date that is not a Distribution Date (and out
of Available Funds in the case of each Distribution Date) and amounts on deposit
in the Reserve Account on such Interest Payment Date (including each
Distribution Date) as provided in Sections 2(d) and 2(e) of the Administration
Agreement.
SECTION 3.07. Servicer's Report. On or before the twentieth
day of each month (or, if any such day is not a Business Day, on the next
succeeding Business Day), the Master Servicer shall deliver to the Administrator
a servicer's report with respect to the preceding calendar month containing all
information necessary for the Administrator to prepare the Administrator's
Certificate, referred to in Section 2(b)(ii) of the Administration Agreement,
covering such preceding calendar month.
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SECTION 3.08. Annual Statement as to Compliance; Notice of
Default. (a) The Master Servicer shall deliver to the Eligible Lender Trustee
and the Indenture Trustee (with a copy to the Seller), on or before June 30 of
each year beginning June 30, 1998, an Officers' Certificate of the Master
Servicer, stating that (i) a review of the activities of the Master Servicer
during the preceding fiscal year ending December 31 (or, in the case of the
first such certificate, during the period from the Closing Date to December 31,
1997 and of its performance has been made under such officers' supervision and
(ii) to the best of such officers' knowledge, based on such review, the Master
Servicer has fulfilled all its obligations under this Agreement in all material
respects throughout such year (or in the case of the first such Officers'
Certificate, such longer period) 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 Officers' Certificate and each report referred to in Section
3.09 to the Rating Agencies. A copy of each such Officers' Certificate and each
report referred to in Section 3.09 may be obtained by any Certificateholder,
Certificate Owner, Noteholder or Note Owner by a request in writing to the
Eligible Lender Trustee addressed to its Corporate Trust Office, together with
evidence satisfactory to the Eligible Lender Trustee that such Person is one of
the foregoing parties. Upon the telephone request of the Eligible Lender
Trustee, the Indenture Trustee will promptly furnish the Eligible Lender Trustee
a list of Noteholders as of the date specified by the Eligible Lender Trustee.
(b) The Master Servicer shall deliver to the Eligible Lender
Trustee, the Indenture Trustee, the Seller and the Rating Agencies, promptly
after having obtained knowledge thereof, but in no event later than five
Business Days thereafter, written notice in an Officers' Certificate of the
Master Servicer of any event which with the giving of notice or lapse of time,
or both, would become a Servicer Default under Section 6.01(1) or (2) or would
cause the Master Servicer to fail to meet any Rating Agency Condition.
SECTION 3.09. Annual Independent Certified Public Accountants'
Report. The Master Servicer shall cause a firm of independent certified public
accountants, which may also render other services to the Master Servicer, the
Seller or their Affiliates, to deliver to the Eligible Lender Trustee and the
Indenture Trustee (with a copy to the Seller) within 180 days of the end of the
Master Servicer's regular calendar-year audit period, a report addressed to the
Master Servicer and to the Seller, the Eligible Lender Trustee and the Indenture
Trustee, to the effect that such firm has performed an examination made in
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accordance with the Audit Guide, COMPLIANCE AUDITS (ATTESTATION ENGAGEMENTS) FOR
LENDERS AND LENDER SERVICERS PARTICIPATING IN THE FEDERAL FAMILY EDUCATION LOAN
PROGRAM (Audit Guide), issued by the U.S. Department of Education, Office of
Inspector General, dated October 1996 or as subsequently revised, relating to
the servicing of Student Loans (including the Financed Student Loans under this
Agreement) during the preceding year (or, in the case of the first such report,
during the period from the Closing Date to December 31, 1997) and that, on the
basis of the accounting and auditing procedures performed during the examination
made in accordance with the Audit Guide, such firm will issue an opinion as to
whether management's assertions that the Master Servicer complied with the
compliance requirements as described in the Audit Guide, are fairly stated, in
all material respects, except for (x) such exceptions as such firm shall believe
to be immaterial and (y) 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 Master Servicer within the meaning of the Code of Professional Ethics of the
American Institute of Certified Public Accountants.
SECTION 3.10. Access to Certain Documentation and Information
Regarding Financed Student Loans. Upon at least three Business Days' prior
notice, the Master Servicer shall provide the Certificateholders and the
Noteholders access to the Student Loan Files in such cases where the
Certificateholders or the Noteholders shall be required by applicable statutes
or regulations to review such documentation, as demonstrated by evidence
satisfactory to the Master Servicer in its reasonable judgment. Access shall be
afforded without charge, but only upon reasonable request and during the normal
business hours at the respective offices of the Master Servicer, or any
Subservicers, as the case may be, where the Student Loan Files are held. Nothing
in this Section shall affect the obligation of the Master Servicer or any
Subservicer to observe any applicable law prohibiting disclosure of information
regarding the Obligors or the right of the Master Servicer not to disclose any
information relating to the strategic plans or opportunities of its student
lending business and the failure of the Master Servicer or any Subservicer to
provide access to information as a result of such obligation or right shall not
constitute a breach of this Section.
SECTION 3.11. Master Servicer Expenses. The Master Servicer
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
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Master Servicer, and expenses incurred in connection with distributions and
reports to the Administrator, the Certificateholders or the Noteholders, as the
case may be.
SECTION 3.12. Subservicing Agreements. (a) The Master Servicer
hereby represents and warrants that as of the Closing Date it has not entered
into any Subservicing Agreements relating to the servicing of the Financed
Student Loans and the custody of the Related Financed Student Loan Files.
The Master Servicer hereby covenants that (i) each
Subservicing Agreement into which it shall enter shall satisfy the criteria set
forth in this Section 3.12(a); and (ii) as of the date of its execution, each
such Subservicing Agreement will be enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency, moratorium, fraudulent conveyance,
reorganization and similar laws now or hereafter in effect relating to
creditors' rights generally and subject to general principles of equity (whether
applied in a proceeding at law or in equity).
Each Subservicing Agreement shall: (i) provide for custodial
and servicing arrangements for the Related Student Loan Files that do not
conflict in any material respect with the custodial and servicing arrangements
contemplated by this Agreement; (ii) provide that such agreement is enforceable
by the Master Servicer and assignable to and enforceable by any successor Master
Servicer; (iii) permit the termination of the servicing activities of the
Subservicer with respect to any Financed Student Loan being serviced by such
Subservicer and permit the release of the Related Student Loan File from the
custody of such Subservicer or any Subcustodian in connection with and
immediately prior to the sale of any such Financed Student Loan by or on behalf
of the Issuer, the Eligible Lender Trustee or the Indenture Trustee; (iv) permit
the Master Servicer to terminate the Subservicing Agreement with respect to the
custody of the Related Student Loan Files and the servicing of the Financed
Student Loans by a Subservicer in the event of a breach of such Subservicing
Agreement by such Subservicer or any Subcustodian; and (v) provide that any
compensation payable to any Subcustodian or Subservicer (including any fees
payable in connection with the release of any Student Loan Files from the
custody of such Subservicer or in connection with the termination of the
servicing activities of such Subservicer with respect to any Financed Student
Loans) shall be payable solely by the Master Servicer. The Master Servicer shall
not consent or agree to or permit any amendment or modification of any
Subservicing Agreement which will in any manner materially adversely affect the
rights or security of the Issuer, the Eligible Lender Trustee, the Indenture
Trustee, the Certificateholders or the
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Noteholders (it being understood that any amendment or supplement to any such
Subservicing Agreement which would cause such Subservicing Agreement to fail to
satisfy the criteria specified in this Section 3.13(a) will be deemed to have
such a material adverse effect). The Master Servicer shall deliver a copy of
each of the Subservicing Agreements as presently in effect and any amendment or
supplement to any Subservicing Agreement to the Eligible Lender Trustee and each
Rating Agency upon the execution and delivery of same.
(b) The Master Servicer shall terminate all of the rights and
obligations of a Subservicer with respect to all Financed Student Loans being
serviced by such Subservicer in the event of a breach by such Subservicer of a
Subservicing Agreement if the Master Servicer reasonably considers such
termination to be in the best interests of the Certificateholders and
Noteholders. Upon termination or expiration of any Subservicing Agreement, the
Master Servicer shall take all appropriate steps to maintain adequate provisions
for the administration, servicing, custody and collection of the Financed
Student Loans, including without limitation, the appointment of any successor
Subservicer pursuant to the terms of a Subservicing Agreement which satisfies
the criteria set forth in Section 3.13(a). The Master Servicer shall notify the
Eligible Lender Trustee, the Indenture Trustee and each Rating Agency if a
successor Subservicer is appointed and shall furnish to the Eligible Lender
Trustee a copy of any additional Subservicing Agreement or any amendment or
supplement to any Subservicing Agreement in connection herewith.
(c) Notwithstanding the provisions of any Subservicing
Agreement or references herein to actions taken or caused to be taken by or
through a Subservicer or otherwise, the Master Servicer shall remain obligated
and liable to the Issuer and the Indenture Trustee for acting as Custodian of
the Student Loan Files and the servicing of the Financed Student Loans in
accordance with this Agreement without diminution of such obligation or
liability by virtue of any such Subservicing Agreement or breach thereof by any
Subservicer, the termination of any such Subservicing Agreement or the inability
of the Master Servicer to cause any such Subservicer to take or refrain from
taking any such action or by virtue of indemnification from the Subservicer, in
each case, to the same extent and under the same terms and conditions as if the
Master Servicer were acting alone as both custodian of the Student Loan Files
and servicer of the Financed Student Loans without the benefit of any
Subservicer. For purposes of this Agreement, the Master Servicer shall be deemed
to have received all amounts received in respect of the Financed Student Loans
by any Subservicer at the time of receipt of such amounts by such Subservicer.
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ARTICLE IV
Deposits into the Collection Account
SECTION 4.01. Deposits into the Collection Account. (a) The
Master Servicer shall deposit, or cause each Subservicer to deposit, into the
Collection Account (in the case of clauses (i) and (ii) within two Business Days
of receipt of freely available funds therefor):
(i) all identifiable payments received by the Master Servicer or
by any Subservicer on the Financed Student Loans, including any
Guarantee Payments with respect to the Financed Student Loans;
(ii) all Liquidation Proceeds on the Financed Student Loans;
(iii) the aggregate Purchase Amounts with respect to Purchased
Student Loans, when such amounts are due, and any reimbursement
payments required to be made by the Master Servicer, each as provided
in Section 3.05 hereof; and
(iv) all other amounts required to be deposited into the Collection
Account by the Master Servicer or any Subservicer pursuant to the terms
hereof.
(b) The Eligible Lender Trustee shall deposit into the
Collection Account within two Business Days of the receipt thereof, the
aggregate amount of Interest Subsidy Payments and Special Allowance Payments by
it with respect to the Financed Student Loans.
(c) The Seller shall deposit into the Collection Account the
aggregate Purchase Amount with respect to Purchased Student Loans and all other
amounts to be paid by the Seller under Section 3.02 and 5.01 of the Loan Sale
Agreement when such amounts are due, as provided in Section 3.03 of the Loan
Sale Agreement.
(d) The Indenture Trustee, at the written direction of the
Administrator, shall withdraw from the Pre-Funding Account and deposit into the
Collection Account on each Determination Date during the Funding Period, an
amount equal to the Capitalized Interest Amount for the preceding Collection
Period, as provided in Section 2(f) of the Administration Agreement.
(e) Notwithstanding subsections (a), (b) or (c) of this
Section 4.01 any deposits required to be made into the
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Collection Account pursuant thereto shall be made directly to the Administrator
pursuant to the Administrator's instructions if the Administrator has delivered
an Officers' Certificate to the Master Servicer and the Eligible Lender Trustee
certifying that an Administrator Deposit Condition has occurred and has not
subsequently delivered an Officers' Certificate reporting the termination of the
Administrator Deposit Condition.
ARTICLE V
The Master Servicer
SECTION 5.01. Representations of Master Servicer. The Master
Servicer makes the following representations on which the Issuer is deemed to
have relied in acquiring (through the Eligible Lender Trustee) the Financed
Student Loans and appointing the Master Servicer as master servicer hereunder.
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, and
will be deemed to speak as of the applicable Transfer Date, in the case of the
Additional Student Loans, but shall survive the sale, transfer and assignment 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 Master Servicer is
duly organized and validly existing as a banking corporation in good
standing under the laws of the Commonwealth of Virginia, 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, and has the legal right to service the Financed Student
Loans.
(b) Due Qualification. The Master Servicer is duly qualified
to do business and has obtained all necessary licenses and approvals in
all jurisdictions in which the ownership or lease of property or the
conduct of its business (including the servicing of the Financed
Student Loans as required by this Agreement) shall require such
qualifications.
(c) Power and Authority of the Master Servicer. The Master
Servicer has the 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 Master
Servicer by all necessary corporate action.
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(d) Binding Obligation. This Agreement constitutes a legal,
valid and binding obligation of the Master Servicer, enforceable in
accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization and similar laws relating to creditors'
rights generally or the rights of creditors of banks the deposit
accounts of which are insured by the FDIC and subject to general
principles of equity.
(e) 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 Master Servicer, or any material
indenture, agreement or other instrument to which the Master Servicer
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 Master Servicer, any order, rule or
regulation applicable to the Master Servicer of any court or of any
Federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Master
Servicer or its properties. Performance by the Master Servicer of its
servicing duties with respect to the Financed Student Loans, and
compliance by the Master Servicer with the terms of 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 by
the applicable Guarantor.
(f) No Proceedings. There are no proceedings or investigations
pending against the Master Servicer or, to its best knowledge,
threatened against the Master Servicer, before any court, regulatory
body, administrative agency or other governmental instrumentality
having jurisdiction over the Master Servicer or its properties: (i)
asserting the invalidity of this Agreement or any of the other Basic
Documents to which the Master Servicer is a party, (ii) seeking to
prevent the issuance of the Notes or the Certificates or the
consummation of any of the transactions contemplated by this Agreement,
or any of the other Basic Documents, (iii) seeking any determination or
ruling that could reasonably be expected to have a material and adverse
effect on the performance by the Master Servicer of its obligations
under, or the validity or enforceability of, this Agreement, any of the
other Basic Documents, the Notes
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or the Certificates or (iv) seeking to affect adversely the Federal or
state income tax attributes of the Issuer, the Notes or Certificates.
(g) 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
Master Servicer in connection with the execution and delivery by the
Master Servicer of this Agreement and the performance by the Master
Servicer of its duties contemplated by this Agreement have in each case
been duly obtained, effected or given and are in full force and effect.
(h) Location of Student Loan Files. The Financed Student Loan
Files are kept in the offices specified in Schedule A, or at such other
office specified in accordance with Section 2.02(b).
SECTION 5.02. Indemnities of Master Servicer. The Master
Servicer shall be liable in accordance herewith only to the extent of the
obligations specifically undertaken by the Master Servicer under this Agreement
or which have been delegated to any Subservicer under any Subservicing
Agreement.
The Master Servicer shall pay for any loss, liability or
expense, including reasonable attorney's fees, that may be imposed on, incurred
by or asserted against the Issuer, the Eligible Lender Trustee, the Indenture
Trustee, the Seller, the Administrator, the Certificateholders or the
Noteholders or any of the officers, directors, employees and agents of the
Issuer, the Eligible Lender Trustee, the Indenture Trustee, the Administrator or
the Seller to the extent that such loss, liability or expense arose out of, or
was imposed upon any such Person through, the negligence, willful misfeasance or
bad faith of the Master Servicer in the performance of its obligations and
duties under this Agreement or in the performance of the obligations and duties
of any Subservicer under any Subservicing Agreement or by reason of the reckless
disregard of its obligations and duties under this Agreement or by reason of the
reckless disregard of the obligations of any Subservicer under any Subservicing
Agreement, where the final determination that any such loss, liability or
expense arose out of, or was imposed upon any such Person through, any such
negligence, willful misfeasance, bad faith or recklessness on the part of the
Master Servicer or any Subservicer is established by a court of law, by an
arbitrator or by way of settlement agreed to by the Master Servicer.
Notwithstanding the foregoing, if the Master Servicer is rendered unable, in
whole or in part, by a force outside the
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control of the parties hereto (including acts of God, acts of war, fires,
earthquakes and other disasters) to satisfy its obligations under this
Agreement, the Master Servicer shall not be deemed to have breached any such
obligation upon delivery of written notice of such event to the other parties
hereto, for so long as the Master Servicer remains unable to perform such
obligation as a result of such event.
For purposes of this Section, in the event of the termination
of the rights and obligations of Signet as Master Servicer pursuant to Section
6.01, or a resignation by such Master Servicer pursuant to this Agreement, such
Master Servicer shall be deemed to be the Master Servicer pending appointment of
a successor Master Servicer pursuant to Section 6.02.
The Master Servicer shall pay for any loss, liability or
expense, including reasonable attorney's fees, that may be imposed on, incurred
by or asserted against the Issuer, the Eligible Lender Trustee, the Indenture
Trustee, the Seller, the Administrator, the Certificateholders or the
Noteholders or any of the officers, directors, employees and agents of the
Issuer, the Eligible Lender Trustee, the Indenture Trustee, the Administrator or
the Seller to the extent that such loss, liability or expense arose out of, or
was imposed upon any such Person as a result of any compensation payable to any
Subservicer (including any fees payable in connection with the release of any
Student Loan File from the custody of such Subservicer or in connection with the
termination of the servicing activities of such Subservicer with respect to any
Financed Student Loan) whether pursuant to the terms of any Subservicing
Agreement or otherwise.
Liability of the Master Servicer 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
Master Servicer 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 Master Servicer, without interest.
SECTION 5.03. Merger or Consolidation of, or Assumption of the
Obligations of, Master Servicer. The Master Servicer hereby agrees that, upon
(a) any merger or consolidation of the Master Servicer into another Person, (b)
any merger or consolidation to which the Master Servicer shall be a party
resulting in the creation of another Person, (c) any Person succeeding to the
properties and assets of the Master Servicer
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substantially as a whole or (d) any other transfer by the Master Servicer to any
Person of the Master Servicer's student lending business substantially as a
whole, the Master Servicer shall (i) cause such Person (if other than the Master
Servicer) to execute an agreement of assumption to perform every obligation of
the Master Servicer hereunder, (ii) deliver to the Eligible Lender Trustee and
Indenture Trustee an Officers' Certificate and an Opinion of Counsel each
stating that such consolidation, merger, succession or transfer and such
agreement of assumption comply with this Section and that all conditions
precedent provided for in this Agreement relating to such transaction have been
complied with, (iii) cause the Rating Agency Condition to have been satisfied
with respect to such transaction or, in the case of a transfer pursuant to
clause (d) to a Person that is a Non-Code Entity, deliver notice of such
transfer and assumption to each Rating Agency, and (iv) cure any existing
Servicer Default or any continuing event which, after notice or lapse of time or
both, would become a Servicer Default. Upon compliance with the foregoing
requirements, such Person shall be the successor to the Master Servicer under
this Agreement without further act on the part of any of the parties to this
Agreement. Notwithstanding anything herein to the contrary, compliance with
clauses (i), (ii), (iii) and (iv) above shall be conditions to the consummation
of any of the transactions referred to in clause (a), (b), (c) or (d) above.
SECTION 5.04. Limitation on Liability of Master Servicer and
Others. Neither the Master Servicer nor any of the directors, officers,
employees or agents of the Master Servicer shall be under any liability to the
Issuer, the Noteholders or the Certificateholders, 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 Master Servicer or any such person against
any liability that would otherwise be imposed by reason of willful misfeasance,
bad faith or negligence in the performance of duties or by reason of reckless
disregard of obligations and duties under this Agreement. The Master Servicer
and any director, officer, employee or agent of the Master Servicer may rely in
good faith on any document of any kind prima facie properly executed and
submitted by any person respecting any matters arising under this Agreement.
Except as provided in this Agreement, the Master Servicer
shall not be under any obligation to appear in, prosecute or defend any legal
action that shall not be incidental to its duties to service the Student Loans
in accordance with this Agreement, and that in its opinion may involve it in any
expense or liability; provided, however, that the Master Servicer
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may undertake any reasonable action that it may deem necessary or desirable in
respect of this Agreement and the other Basic Documents and the rights and
duties of the parties to this Agreement and the other Basic Documents and the
interests of the Certificateholders under this Agreement and the Noteholders
under the Indenture.
SECTION 5.05. Signet Not to Resign as Master Servicer. Subject
to the provisions of Section 5.03, Signet shall not resign from the obligations
and duties hereby imposed on it as Master Servicer under this Agreement except
upon determination that the performance of its duties under this Agreement shall
no longer be permissible under applicable law. Notice of any such determination
permitting the resignation of Signet shall be communicated to the Eligible
Lender Trustee, the Indenture Trustee and the Rating Agencies at the earliest
practicable time (and, if such communication is not in writing, shall be
confirmed in writing at the earliest practicable time) and any such
determination shall be evidenced by an Opinion of Counsel to such effect
delivered to the Eligible Lender Trustee and the Indenture Trustee concurrently
with or promptly after such notice. No such resignation shall become effective
until the Indenture Trustee or a Successor Master Servicer shall have assumed
the responsibilities and obligations of Signet in accordance with Section 6.02.
ARTICLE VI
Default
SECTION 6.01. Servicer Default. If any one of the following
events (a "Servicer Default") shall occur and be continuing:
(a) any failure by the Master Servicer to deliver or cause to
be delivered to the Indenture Trustee for deposit in any of the Trust
Accounts any payment required by the Basic Documents, which failure
continues unremedied for five Business Days after written notice of
such failure is received by the Master Servicer from the Eligible
Lender Trustee, the Indenture Trustee or the Administrator or after
discovery of such failure by an officer of the Master Servicer; or
(b) any failure by the Master Servicer duly to observe or to
perform in any material respect any other covenants or agreements of
the Master Servicer set forth in this Agreement or any other Basic
Document, which failure shall (i) materially and adversely affect the
rights of
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Noteholders or Certificateholders and (ii) continue unremedied for a
period of sixty (60) days (or for such longer period, not in excess of
120 days, as may be reasonably necessary to remedy such failure, if the
Indenture Trustee and the Eligible Lender Trustee reasonably believe
such failure is susceptible to cure within such longer period) after
the date on which written notice of such failure, requiring the same to
be remedied, shall have been given (A) to the Master Servicer, by the
Indenture Trustee, the Eligible Lender Trustee or (B) to the Master
Servicer, and to the Indenture Trustee, the Administrator and the
Eligible Lender Trustee by Noteholders or Certificateholders, as
applicable, representing not less than 25% of the Outstanding Amount of
the Notes or 25% of the Outstanding Certificate Balance; or
(c) any limitation, suspension or termination by the
Department of the Master Servicer's eligibility to service Student
Loans which materially and adversely affects its ability to service the
Financed Student Loans; or
(d) an Insolvency Event occurs with respect to the Master
Servicer;
then, and in each and every case, so long as the Servicer Default shall not have
been remedied, either the Indenture Trustee or the Noteholders of Notes
evidencing not less than 75% of the Outstanding Amount of the Notes by notice
then given in writing to the Master Servicer (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 5.02) of
the Master Servicer under this Agreement. On or after the receipt by the Master
Servicer of such written notice, all authority and power of the Master Servicer
under this Agreement, whether with respect to the Notes, the Certificates or the
Financed Student Loans or otherwise, shall, without further action, pass to and
be vested in the Indenture Trustee or such successor Master Servicer as may be
appointed under Section 6.02; 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 Master Servicer, 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, whether to complete the transfer and
endorsement of the Financed Student Loans and related documents, or otherwise.
The predecessor Master Servicer shall cooperate with the successor Master
Servicer, the Indenture Trustee and the Eligible Lender Trustee in effecting the
termination of the responsibilities and rights
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of the predecessor Master Servicer under this Agreement, including the transfer
to the successor Master Servicer for administration by it of all cash amounts
that shall at the time be held by the predecessor Master Servicer for deposit,
or shall thereafter be received by it with respect to a Financed Student Loan.
All reasonable costs and expenses (including attorneys' fees) incurred in
connection with transferring the Student Loan Files to the successor Master
Servicer and amending this Agreement and any other Basic Documents to reflect
such succession as Master Servicer pursuant to this Section shall be paid by the
predecessor Master Servicer upon presentation of reasonable documentation of
such costs and expenses. Upon receipt of notice of the occurrence of a Servicer
Default, the Eligible Lender Trustee shall give notice thereof to the Rating
Agencies.
Notwithstanding the termination of the Master Servicer and the
engagement of a successor Master Servicer, each Subservicer shall continue to
serve in its capacity as Subservicer, unless it is in breach of the related
Subservicing Agreement.
SECTION 6.02. Appointment of Successor. (a) Upon receipt by
the Master Servicer of notice of termination pursuant to Section 6.01, or the
resignation by the Master Servicer in accordance with the terms of this
Agreement, the predecessor Master Servicer shall continue to perform its
functions as Master Servicer under this Agreement, in the case of termination,
only until the date specified in such termination notice or, if no such date is
specified in a notice of termination, until receipt of such notice and, in the
case of resignation, until the later of (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 Master
Servicer shall become unable to act as Master Servicer as specified in the
notice of resignation and accompanying Opinion of Counsel. In the event of the
termination hereunder of the Master Servicer, the Issuer shall appoint a
successor Master Servicer acceptable to the Indenture Trustee, and the successor
Master Servicer shall accept its appointment by a written assumption in form
acceptable to the Indenture Trustee and the Administrator. In the event that a
successor Master Servicer has not been appointed at the time when the
predecessor Master Servicer has ceased to act as Master Servicer in accordance
with this Section, the Indenture Trustee without further action shall
automatically be appointed the successor Master Servicer and the Indenture
Trustee shall be entitled to the Servicing Fee. Notwithstanding the above, the
Indenture Trustee shall, if it shall be unwilling or legally unable so to
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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 Master Servicer under this Agreement;
provided, however, that such right to appoint or to petition for the appointment
of any such successor Master Servicer shall in no event relieve the Indenture
Trustee from any obligations otherwise imposed on it under the Basic Documents
until such successor has in fact assumed such appointment.
(b) Upon appointment, the successor Master Servicer (including
the Indenture Trustee acting as successor Master Servicer) shall be the
successor in all respects to the predecessor Master Servicer and shall be
subject to all the responsibilities, duties and liabilities placed on the
predecessor Master Servicer that arise thereafter or are related thereto and
shall be entitled to an amount agreed to by such successor Master Servicer
(which shall not exceed the Servicing Fee, unless such compensation arrangements
will not result in a downgrading of the Notes or the Certificates by any Rating
Agency) and all the rights granted to the predecessor Master Servicer by the
terms and provisions of this Agreement.
(c) The Master Servicer 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 other
Basic Documents, the Indenture Trustee, to the extent it is acting as successor
Master Servicer pursuant hereto, shall be entitled to resign to the extent a
qualified successor Master Servicer has been appointed and has assumed all the
obligations of the Master Servicer in accordance with the terms of this
Agreement and the other Basic Documents.
SECTION 6.03. Notification to Noteholders and
Certificateholders. Upon any termination of, or appointment of a successor to,
the Master Servicer pursuant to this Article VI, the Eligible Lender Trustee
shall give prompt written notice thereof to Certificateholders and the Indenture
Trustee shall give prompt written notice thereof to Noteholders, the
Administrator and the Rating Agencies (which, in the case of any such
appointment of a successor, shall consist of prior written notice thereof to the
Rating Agencies).
SECTION 6.04. Waiver of Past Defaults. The Noteholders of
Notes evidencing not less than a majority of the Outstanding Amount of the Notes
(or the Certificateholders of Certificates evidencing not less than a majority
of the Certificate Balance, in the case of any default which does not
25
<PAGE>
adversely affect the Indenture Trustee or the Noteholders) may, on behalf of all
Noteholders and Certificateholders, waive in writing any default by the Master
Servicer 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 Servicer Default arising therefrom shall
be deemed to have been remedied for every purpose of this Agreement. No such
waiver shall extend to any subsequent or other default or impair any right
consequent thereto.
ARTICLE VII
Miscellaneous
SECTION 7.01. Amendment. This Agreement may be amended by the
Master Servicer and the Eligible Lender Trustee, with the consent of the
Indenture Trustee, but without the consent of any of the Noteholders or the
Certificateholders, to cure any ambiguity, to correct or supplement any
provisions in this Agreement, for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions in this Agreement or
of modifying in any manner the rights of the Noteholders or the
Certificateholders or in connection with a transaction described in Section 5.03
hereof; provided, however, that such action shall not, as evidenced by an
Opinion of Counsel delivered to the Eligible Lender Trustee and the Indenture
Trustee, adversely affect in any material respect the interests of any
Noteholder or Certificateholder.
This Agreement may also be amended from time to time by the
Master Servicer and the Eligible Lender Trustee, with the consent of the
Indenture Trustee, the consent of the Noteholders of Notes evidencing not less
than a majority of the Outstanding Amount of the Notes and the consent of the
Certificateholders of Certificates evidencing not less than a majority of the
Certificate Balance, for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Agreement or of
modifying in any manner the rights of the Noteholders or the Certificateholders;
provided, however, that, without the consent of all outstanding Noteholders and
Certificateholders, no such amendment shall (a) increase or reduce in any manner
the amount of, or accelerate or delay the timing of, collections of payments
with respect to Financed Student Loans or distributions that shall be required
to be made for the benefit of the Noteholders or the Certificateholders or (b)
reduce the aforesaid percentage of the Outstanding Amount of
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<PAGE>
the Notes and the Certificate Balance the Noteholders or the Certificateholders
of which are required to consent to any such amendment.
Promptly after the execution of any such amendment or consent
(or, in the case of the Rating Agencies, five Business Days prior thereto), the
Eligible Lender Trustee shall furnish written notification of the substance of
such amendment or consent to each Certificateholder, the Indenture Trustee and
each of the Rating Agencies.
It shall not be necessary for the consent of
Certificateholders or Noteholders pursuant to this Section to approve the
particular form of any proposed amendment or consent, but it shall be sufficient
if such consent shall approve the substance thereof.
Prior to the execution of any amendment to this Agreement, the
Eligible Lender Trustee and the Indenture Trustee shall be entitled to receive
and rely upon an Opinion of Counsel stating that the execution of such amendment
is authorized or permitted by this Agreement and the Opinion of Counsel referred
to in Section 6.02(f) of the Loan Sale Agreement. The Eligible Lender Trustee
and the Indenture Trustee may, but shall not be obligated to, enter into any
such amendment which affects the Eligible Lender Trustee's or the Indenture
Trustee's, as applicable, own rights, duties or immunities under this Agreement
or otherwise.
SECTION 7.02. Protection of Interests in Trust. (a) The Master
Servicer shall not change its name, identity or corporate structure in any
manner that would, could or might make any financing statement or continuation
statement filed in accordance with Section 6.02(a) of the Loan Sale Agreement
seriously misleading within the meaning of ss.9-402(7) of the UCC, unless it
shall have given the Eligible Lender Trustee, the Indenture Trustee and the
Rating Agencies at least five days' prior written notice thereof and shall have
promptly filed appropriate amendments to all previously filed financing
statements or continuation statements.
(b) The Master Servicer shall have an obligation to give the
Eligible Lender Trustee and the Indenture Trustee at least five (5) days' prior
written notice of any relocation of its principal executive office if, as a
result of such relocation, the applicable provisions of the UCC would require
the filing of any amendment of any previously filed financing or continuation
statement or of any new financing statement and shall promptly file any such
amendment. The Master Servicer shall at all times maintain each office from
which it shall
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<PAGE>
service Financed Student Loans, and its principal executive office, within the
United States of America.
(c) The Master Servicer shall maintain accounts and records of
each Financed Student Loan accurately and in sufficient detail to permit (i) the
reader thereof to know at any time the status of such Financed Student Loan,
including payments and recoveries made and payments owing (and the nature of
each) and (ii) reconciliation between payments or recoveries on (or with respect
to) each Financed Student Loan and the amounts from time to time deposited in
the Collection Account in respect of such Financed Student Loan.
(d) The Master Servicer shall, by use of a distinct
identification code, maintain, and cause each Subservicer to maintain, its
computer systems so that, from and after the time of sale under this Agreement
of the Financed Student Loans, the Master Servicer's, and each Subservicer's
master computer records (including any backup archives) that refer to a Student
Loan shall indicate clearly the interest of the Issuer, the Eligible Lender
Trustee and the Indenture Trustee in such Student Loan and that such Student
Loan is owned by the Eligible Lender Trustee on behalf of the Issuer and has
been pledged to the Indenture Trustee. Indication of the Issuer's, the Eligible
Lender Trustee's and the Indenture Trustee's interest in a Student Loan shall be
deleted from or modified on the Master Servicer's and each Subservicer's
computer systems when, and only when, the related Financed Student Loan shall
have been paid in full or repurchased.
(e) If at any time the Master Servicer shall propose to sell,
grant a security interest in, or otherwise transfer any interest in student
loans to any prospective purchaser, lender or other transferee, the Master
Servicer shall give to such prospective purchaser, lender or other transferee
computer tapes, records or printouts (including any restored from backup
archives) that, if they shall refer in any manner whatsoever to any Financed
Student Loan, shall indicate clearly that such Financed Student Loan has been
sold and is owned by the Eligible Lender Trustee on behalf of the Issuer and has
been pledged to the Indenture Trustee.
(f) The Master Servicer shall permit, and shall cause each
Subservicer to permit, the Indenture Trustee and its agents at any time during
normal business hours to inspect, audit and make copies of and abstracts from
the Master Servicer's, or Subservicer's records regarding any Financed Student
Loan; provided, however, that the Master Servicer or Subservicer is given
reasonable prior notice of at least five Business Days.
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(g) Upon request, at any time the Eligible Lender Trustee or
the Indenture Trustee shall have reasonable grounds to believe that such request
would be necessary in connection with its performance of its duties under the
Basic Documents, the Master Servicer shall furnish to the Eligible Lender
Trustee or to the Indenture Trustee (in each case, with a copy to the
Administrator), within five (5) Business Days, a list of all Financed Student
Loans (by borrower social security number, type of loan and date of issuance)
then held as part of the Trust, and shall cause the Administrator to furnish to
the Eligible Lender Trustee or to the Indenture Trustee, within 20 Business Days
thereafter, a comparison of such list to the list of Initial Financed Student
Loans set forth in Schedule A to the Loan Sale Agreement as of the Closing Date,
and, for each Financed Student Loan that has been added to or removed from the
pool of loans held by the Eligible Lender Trustee on behalf of the Issuer,
information as to the date as of which and circumstances under which each such
Financed Student Loan was so added or removed.
SECTION 7.03. Notices. All demands, notices and communications
upon or to the Seller, the Master Servicer, the Eligible Lender Trustee, the
Indenture Trustee, the Administrator or the Rating Agencies under this Agreement
shall be in writing, personally delivered or mailed by certified mail, return
receipt requested (or in the form of telex or facsimile notice, followed by
written notice delivered as aforesaid), and shall be deemed to have been duly
given upon receipt;
(a) in the case of the Seller, to
Signet Bank
7 North 8th Street
Richmond, Virginia 23219
Attention: Treasurer
Telephone: (804) 771-7060
Telecopy: (804) 771-7936
(b) in the case of the Master Servicer and the
Administrator, to
Signet Bank
7 North 8th Street
Richmond, Virginia 23219
Attention: Treasurer
Telephone: (804) 771-7060
Telecopy: (804) 771-7936
(c) in the case of the Issuer, to
Signet Student Loan Trust 1996-A
c/o First Chicago Delaware, Inc., Trustee
300 King Street
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<PAGE>
Wilmington, Delaware 19801
with a copy to the Eligible Lender Trustee
at the Corporate Trust Office of the
Eligible Lender Trustee
(d) in the case of the Eligible Lender Trustee, at the
Corporate Trust Office of the Eligible Lender
Trustee;
(e) in the case of the Indenture Trustee, at its
Corporate Trust Office;
(f) in the case of Fitch, to
Fitch Investors Service, L.P.
One State Street Plaza
New York, New York 10004
Attention: Asset Backed Monitoring Unit
Telephone: (212) 908-0500
Telecopy : (212) 480-4435;
in the case of Moody's to
Moody's Investors Service, Inc.
99 Church Street
New York, New York 10007
Attention: ABS Monitoring Department
Telephone: (212) 553-0300
Telecopy: (212) 553-0881; and
in the case of Standard & Poor's, to
Standard & Poor's Ratings Group
25 Broadway
20th Floor
New York, New York 10004
Telephone: (212) 208-8000
Telecopy: (212) 412-0225.
or, as to each of the foregoing, at such other address as shall be designated by
written notice to the other parties.
SECTION 7.04. Assignment. Notwithstanding anything to the
contrary contained herein, except as provided in the succeeding sentence, as
provided in Section 5.03 and as provided in the provisions of this Agreement
concerning the resignation of the Master Servicer, this Agreement may not be
assigned by the Master Servicer. This Agreement may only be assigned by the
Eligible Lender Trustee to its permitted successor pursuant to the Trust
Agreement.
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<PAGE>
SECTION 7.05. Limitations on Rights of Others. The
provisions of this Agreement are solely for the benefit of the Master Servicer,
the Issuer and the Eligible Lender Trustee and for the benefit of the
Administrator, the Certificateholders, the Indenture Trustee and the
Noteholders, as third party beneficiaries, and nothing in this Agreement,
whether express or implied, shall be construed to give to any other Person any
legal or equitable right, remedy or claim in the Trust Estate or under or in
respect of this Agreement or any covenants, conditions or provisions contained
herein.
SECTION 7.06. Severability. Any provision of this Agreement
that is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, 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.
SECTION 7.07. Separate Counterparts. This Agreement may be
executed by the parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all such counterparts shall
together constitute but one and the same instrument.
SECTION 7.08. Headings. The headings of the various Articles
and Sections herein are for convenience of reference only and shall not define
or limit any of the terms or provisions hereof.
SECTION 7.09. Governing Law. This Agreement shall be construed
in accordance with the laws of the Commonwealth of Virginia, without reference
to its conflict of law provisions, and the obligations, rights and remedies of
the parties hereunder shall be determined in accordance with such laws.
SECTION 7.10. Non-Petition Covenants. Notwithstanding any
prior termination of this Agreement, the Master Servicer shall not, prior to the
date which is one year and one day after the termination of this Agreement with
respect to the Issuer or the Company, acquiesce, petition or otherwise invoke or
cause the Issuer to invoke the process of any court or government authority for
the purpose of commencing or sustaining a case against the Issuer under any
Federal or state bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar official
of the Issuer or any substantial part of its property, or ordering the winding
up or liquidation of the affairs of the Issuer.
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<PAGE>
SECTION 7.11. Limitation of Liability of Eligible Lender
Trustee and Indenture Trustee. (a) Notwithstanding anything contained herein to
the contrary, this Agreement has been signed 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, except as expressly provided in the Trust
Agreement, as beneficial owner of the Issuer 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.
(b) Notwithstanding anything contained herein to the contrary,
this Agreement has been accepted by The Bank of New York not in its individual
capacity but solely as Indenture Trustee and in no event shall The Bank of New
York have any liability for the representations, warranties, covenants,
agreements or other obligations of the Issuer hereunder or in any of the
certificates, notices or agreements delivered pursuant hereto, as to all of
which recourse shall be had solely to the assets of the Issuer.
SECTION 7.12. Confidentiality. (a) The Eligible Lender Trustee
and its agents, representatives or employees shall at all times maintain the
confidentiality of all Confidential Information and shall not, without the prior
written consent of the Master Servicer, disclose to third parties (including
Noteholders or Certificateholders) or use such information, in any manner
whatsoever, in whole or in part, except as expressly permitted under this
Agreement or as required to fulfill an obligation of the Eligible Lender Trustee
under this Agreement, in which case such Confidential Information shall be
revealed only to the extent required for the purpose of fulfilling an obligation
of the Eligible Lender Trustee under this Agreement. Notwithstanding the above,
Confidential Information may be disclosed to the extent required by law or legal
process, provided that the Eligible Lender Trustee gives prompt written notice
to the Master Servicer of the nature and scope of such disclosure.
(b) Notwithstanding anything in this Agreement to the
contrary, the Master Servicer shall not be obligated to disclose to any Person
(i) any information regarding Obligors, the disclosure of which is prohibited by
applicable law, or (ii) any information relating to the strategic plans or
opportunities of its student lending business.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective officers as of the day and
year first above written.
SIGNET STUDENT LOAN TRUST
1996-A,
by THE FIRST NATIONAL BANK
OF CHICAGO not in its
individual capacity but
solely as Eligible Lender
Trustee on behalf of the
Trust,
by /s/ Barbara G. Grosse
----------------------
Name: Barbara G. Grosse
Title: Assistant Vice President
SIGNET BANK, as Master
Servicer
by /s/ Suzanne Bachman
----------------------
Name: Suzanne Bachman
Title: Sr. Vice President
THE FIRST NATIONAL BANK OF
CHICAGO, not in its individual
capacity but solely as
Eligible Lender Trustee,
by /s/ Barbara G. Grosse
----------------------
Name: Barbara G. Grosse
Title: Assistant Vice President
Acknowledged and accepted
as of the day and year first
above written:
THE BANK OF NEW YORK, not in
its individual capacity but
solely as Indenture Trustee
by /s/ Cheryl L. Laser
-------------------
Name: Cheryl L. Laser
Title: Assistant Vice President
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SCHEDULE A
The Master Servicer shall maintain each Student Loan File at one of the
locations listed below:
Signet Bank
7 St. Paul Street
Baltimore, Maryland 21203
<PAGE>
SCHEDULE B
Locations of Student Loan Files for which the related Financed Student Loans are
serviced by a Subservicer.
None
Exhibit 99.3
ADMINISTRATION AGREEMENT dated as of November 1,
1996, among SIGNET STUDENT LOAN TRUST 1996-A, a Delaware trust
(the "Issuer"), SIGNET BANK, a Virginia banking corporation,
as administrator (the "Administrator"), and THE BANK OF NEW
YORK, a New York banking corporation, not in its individual
capacity but solely as Indenture Trustee (the "Indenture
Trustee").
W I T N E S S E T H
WHEREAS the Issuer is issuing the Floating Rate Class A-1
Asset Backed Notes and the Floating Rate Class A-2 Asset Backed Notes
(collectively, the "Notes") pursuant to the Indenture dated as of November 1,
1996 (the "Indenture"), between the Issuer and the Indenture Trustee and the
Floating Rate Asset Backed Certificates (the "Certificates"), pursuant to the
Trust Agreement dated as of November 1, 1996 (the "Trust Agreement") among the
Depositor, Signet Student Loan Corporation, a Virginia corporation (the
"Company") and The First National Bank of Chicago, a national banking
association, as Eligible Lender Trustee (the "Eligible Lender Trustee")
(capitalized terms used herein and not defined herein shall have the meanings
assigned to such terms in Appendix A hereto, which also contains rules of usage
and construction that shall be applicable herein);
WHEREAS the Issuer has entered into certain agreements in
connection with the issuance of the Notes and the Certificates, including the
Loan Sale Agreement, the Master Servicing Agreement, the Note Depository
Agreements, the Certificate Depository Agreement (the Certificate Depository
Agreement and the Note Depository Agreements being collectively referred to
herein as the "Depository Agreement"), the Guarantee Agreements, the Trust
Agreement and the Indenture (all such agreements being collectively referred to
herein as the "Related Agreements");
WHEREAS, pursuant to the Related Agreements, the Issuer and
the Eligible Lender Trustee are required to perform certain duties in connection
<PAGE>
with (a) the Notes and the Collateral therefor pledged pursuant to the Indenture
and (b) the Certificates;
WHEREAS the Issuer and the Eligible Lender Trustee desire to
have the Administrator perform certain of the duties of the Issuer and the
Eligible Lender Trustee referred to in the preceding clause, and to provide such
additional services consistent with the terms of this Agreement and the Related
Agreements as the Issuer and the Eligible Lender Trustee may from time to time
request;
WHEREAS the Administrator has the capacity to provide the
services required hereby and is willing to perform such services for the Issuer
and the Eligible Lender Trustee on the terms set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants
contained herein, and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties agree as follows:
1. Representations of the Administrator. The Administrator
makes the following representations on which the Issuer and the Eligible Lender
Trustee are deemed to have relied. The representations speak as of the execution
and delivery of this Agreement and as of the Closing Date, in the case of the
Initial Financed Student Loans, as of the applicable Transfer Date, in the case
of the Additional Student Loans, but shall survive the sale of the Financed
Student Loans to the Eligible Lender Trustee on behalf of the Issuer and the
pledge thereof to the Indenture Trustee pursuant to the Indenture.
(a) Organization and Good Standing. The Administrator is duly
organized and validly existing as a Virginia banking corporation, with
the power and authority to own its properties and to conduct its
business as such properties are currently owned and such business is
presently conducted.
(b) Power and Authority of the Administrator. The
Administrator has the corporate power and authority to execute and
deliver this Agreement and to carry out its terms, and the execution,
delivery and performance of this Agreement has been duly authorized by
the Administrator by all necessary corporate action.
(c) Binding Obligation. This Agreement constitutes a legal,
valid and binding obligation of the Administrator, enforceable in
accordance with its terms, subject to
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applicable bankruptcy, insolvency, reorganization and similar laws
relating to creditors' rights generally or the rights of creditors of
banks the deposit accounts of which are insured by the FDIC and subject
to general principles of equity.
(d) No Violation. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof
or thereof do not conflict with, result in any breach of any of the
terms and provisions of, nor constitute (with or without notice or
lapse of time or both) a default under, the articles of incorporation
or by-laws of the Administrator, or any material indenture, agreement
or other instrument to which the Administrator is a party or by which
it shall be bound; nor result in the creation or imposition of any Lien
upon any of its properties pursuant to the terms of any such indenture,
agreement or other instrument; nor violate any law or, to the knowledge
of the Administrator, any order, rule or regulation applicable to the
Administrator of any court or of any Federal or state regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over the Administrator or its properties. The consummation
by the Administrator of the transactions contemplated by this Agreement
will not result in the loss of any Guarantee Payments by the Trust or
any reinsurance payments with respect to any Financed Student Loan.
(e) No Proceedings. There are no proceedings or investigations
pending against the Administrator or, to its best knowledge, threatened
against the Administrator, before any court, regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over the Administrator or its properties: (i) asserting
the invalidity of this Agreement, the Indenture or any of the other
Related Agreements, the Notes or the Certificates, (ii) seeking to
prevent the issuance of the Notes or the Certificates or the
consummation of any of the transactions contemplated by this Agreement,
the Indenture or any of the other Related Agreements, (iii) seeking any
determination or ruling that could reasonably be expected to have a
material and adverse effect on the performance by the Administrator of
its obligations under, or the validity or enforceability of, this
Agreement, the Indenture, any of the other Related Agreements, the
Notes or the Certificates or (iv) seeking to affect adversely the
Federal or state income tax attributes of the Issuer, the Notes or the
Certificates.
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<PAGE>
(f) All Consents. All authorizations, consents, orders or
approvals of or registrations or declarations with any court,
regulatory body, administrative agency or other government
instrumentality required to be obtained, effected or given by the
Administrator in connection with the execution and delivery by the
Administrator of this Agreement and the performance by the
Administrator of the transactions contemplated by this Agreement have
in each case been duly obtained, effected or given and are in full
force and effect.
2. Duties of the Administrator.
(a) Duties with Respect to the Indenture and Depository
Agreement. The Administrator shall perform all its duties as Administrator and
the duties of the Issuer under the Depository Agreement. In addition, the
Administrator shall consult with the Eligible Lender Trustee as the
Administrator deems appropriate regarding the duties of the Issuer under the
Indenture and the Depository Agreement. The Administrator shall monitor the
performance of the Issuer and shall advise the Eligible Lender Trustee when
action is necessary to comply with the Issuer's duties under the Indenture and
the Depository Agreement. The Administrator shall prepare for execution by the
Issuer or shall cause the preparation by other appropriate Persons of all such
documents, reports, filings, instruments, certificates and opinions as it shall
be the duty of the Issuer to prepare, file or deliver pursuant to the Indenture
and the Depository Agreement. In furtherance of the foregoing, the Administrator
shall take all appropriate action that is the duty of the Issuer to take
pursuant to the Indenture, including such of the foregoing as are required with
respect to the following matters (references are to sections of the Indenture):
(i) the duty to cause the Note Registrar to keep the Note
Register and to give the Indenture Trustee prompt notice of any
appointment of a new Note Registrar and the location, or change in
location, of the Note Register (Section 2.04);
(ii) the fixing or causing to be fixed of any specified record
date and the timely notification of the Indenture Trustee and
Noteholders with respect to special payment dates, if any (Section
2.07(c));
(iii) the preparation of or obtaining of the documents and
instruments required for authentication of the Notes and delivery of
the same to the Indenture Trustee (Section 2.02);
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<PAGE>
(iv) the preparation, obtaining or filing of the instruments,
opinions and certificates and other documents required for the release
of collateral (Section 2.09);
(v) the duty to cause the Note Registrar to maintain on behalf
of the Issuer an office in the Borough of Manhattan, The City of New
York, for registration of transfer or exchange of Notes (Section 3.02);
(vi) the duty to cause newly appointed Paying Agents, if any,
to deliver to the Indenture Trustee the instrument specified in the
Indenture regarding funds held in trust (Section 3.03);
(vii) the direction to the Paying Agent(s) to deposit moneys
with the Indenture Trustee (Section 3.03);
(viii) the obtaining and preservation of the Issuer's
qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of the Indenture, the Notes, the Collateral and each
other instrument and agreement included in the Indenture Trust Estate
(Section 3.04);
(ix) the preparation of all supplements, amendments, financing
statements, continuation statements, instruments of further assurance
and other instruments, in accordance with Section 3.05 of the
Indenture, necessary to protect the Indenture Trust Estate (Section
3.05);
(x) the delivery by the Issuer of the Opinion of Counsel on
the Closing Date and the annual delivery of Opinions of Counsel, in
accordance with Section 3.06 of the Indenture, as to the Indenture
Trust Estate, and the annual delivery of the Officers' Certificate of
the Issuer and certain other statements, in accordance with Section
3.09 of the Indenture, as to compliance with the Indenture (Sections
3.06 and 3.09);
(xi) the identification to the Indenture Trustee in an
Officers' Certificate of the Issuer of a Person with whom the Issuer
has contracted to perform its duties under the Indenture (Section
3.07(b));
(xii) the notification of the Indenture Trustee and the Rating
Agencies of a Servicer Default pursuant to the Master Servicing
Agreement and, if such Servicer Default arises from the failure of the
Master Servicer to perform any of its duties under the Master Servicing
Agreement, the taking
5
<PAGE>
of all reasonable steps available to remedy such failure (Section
3.07(d));
(xiii) the preparation and obtaining of documents and
instruments required for the release of the Issuer from its obligations
under the Indenture (Section 3.10);
(xiv) the prompt delivery of notice to the Indenture Trustee
and the Rating Agencies of each Event of Default, any Default under
Section 5.01(iii) of the Indenture and each default by the Master
Servicer under the Master Servicing Agreement or by the Seller under
the Loan Sale Agreement (Section 3.18);
(xv) the monitoring of the Issuer's obligations as to the
satisfaction and discharge of the Indenture and the preparation of an
Officers' Certificate of the Issuer and the obtaining of the Opinion of
Counsel and the Independent Certificate relating thereto (Section
4.01);
(xvi) the compliance with any written directive of the
Indenture Trustee with respect to the sale of the Indenture Trust
Estate in a commercially reasonable manner if an Event of Default shall
have occurred and be continuing (Section 5.04);
(xvii) the preparation of any written instruments required to
confirm more fully the authority of any co-trustee or separate trustee
and any written instruments necessary in connection with the
resignation or removal of any co-trustee or separate trustee (Sections
6.08 and 6.10);
(xviii) the furnishing of the Indenture Trustee with the names
and addresses of Noteholders during any period when the Indenture
Trustee is not the Note Registrar (Section 7.01);
(xix) the preparation and, after execution by the Issuer, the
filing with the Commission, any applicable State agencies and the
Indenture Trustee of documents required to be filed on a periodic basis
with, and summaries thereof as may be required by rules and regulations
prescribed by, the Commission and any applicable State agencies and the
transmission of such summaries, as necessary, to the Noteholders
(Section 7.03);
(xx) the opening of one or more accounts in the Issuer's name,
the preparation of Issuer Orders and Officers' Certificates of the
Issuer, the obtaining of Opinions of Counsel and the taking of all
other actions
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necessary with respect to investment and reinvestment of funds in the
Trust Accounts (Sections 8.02 and 8.03);
(xxi) the preparation of an Issuer Request and Officers'
Certificate of the Issuer and the obtaining of an Opinion of Counsel
and Independent Certificates, if necessary, for the release of the
Indenture Trust Estate (Sections 8.04 and 8.05);
(xxii) the preparation of Issuer Orders and the obtaining of
Opinions of Counsel with respect to the execution of supplemental
indentures and the mailing to the Noteholders of notices with respect
to such supplemental indentures (Sections 9.01, 9.02 and 9.03);
(xxiii) the preparation of or obtaining of the documents and
instruments required for the execution and authentication of new Notes
conforming to any supplemental indenture and the delivery of the same
to the Eligible Lender Trustee and the Indenture Trustee, respectively
(Section 9.06);
(xxiv) the notification of Noteholders of redemption of the
Notes or the duty to cause the Indenture Trustee to provide such
notification (Section 10.02);
(xxv) the preparation of all Officers' Certificates of the
Issuer, Opinions of Counsel and Independent Certificates with respect
to any requests by the Issuer to the Indenture Trustee to take any
action under the Indenture (Section 11.01(a));
(xxvi) the preparation and delivery of Officers' Certificates
of the Issuer and the obtaining of Independent Certificates, if
necessary, for the release of property from the lien of the Indenture
(Section 11.01(b));
(xxvii) the preparation and timely delivery to Noteholders and
the Indenture Trustee of any agreements with respect to alternate
payment and notice provisions (Section 11.06); and
(xxviii) the recording of the Indenture, if applicable
(Section 11.15).
(b) Duties with Respect to the Issuer. (i) In addition to the
duties of the Administrator set forth above and in the other Related Agreements,
the Administrator shall perform such calculations and shall prepare for
execution by the Issuer or the Eligible Lender Trustee or shall cause the
preparation by
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other appropriate Persons of all such documents, reports, filings, instruments,
certificates and opinions as it shall be the duty of the Issuer or the Eligible
Lender Trustee to prepare, file or deliver pursuant to the Related Agreements,
and at the request of the Eligible Lender Trustee shall take all appropriate
action that it is the duty of the Issuer to take pursuant to the Related
Agreements. In furtherance thereof, the Eligible Lender Trustee shall, on behalf
of itself and of the Issuer, execute and deliver to the Administrator and to
each successor Administrator appointed pursuant to the terms hereof, one or more
powers of attorney substantially in the form of Exhibit A hereto, appointing the
Administrator the attorney-in-fact of the Eligible Lender Trustee and the Issuer
for the purpose of executing on behalf of the Eligible Lender Trustee and the
Issuer all such documents, reports, filings, instruments, certificates and
opinions. Subject to Section 9 of this Agreement, and in accordance with the
directions of the Eligible Lender Trustee, the Administrator shall administer,
perform or supervise the performance of such other activities in connection with
the Collateral (including the Related Agreements) as are not covered by any of
the foregoing provisions and as are expressly requested by the Eligible Lender
Trustee and are reasonably within the capability of the Administrator.
(ii) Notwithstanding anything in this Agreement or the Related
Agreements to the contrary, the Administrator shall deliver to the Eligible
Lender Trustee, the Indenture Trustee, the Rating Agencies and (if the Seller is
not the Administrator) the Seller, an Officers' Certificate of the Administrator
containing all the information necessary:
(A) to pay the Department any Monthly Rebate Fees due and
payable to the Department, to the extent such Monthly Rebate Fees are
not being deducted by the Department out of Special Allowance Payments
or Interest Subsidy Payments, which Officers' Certificate shall be
delivered on the date that is three Business Days prior to the date
such fees are to be remitted to the Department;
(B) on each Transfer Date to pay the Seller, pursuant to
Section 2.02 of the Loan Sale Agreement, the Purchase Amount for
Additional Student Loans purchased by the Eligible Lender Trustee on
behalf of the Issuer on such date, which Officers' Certificate shall be
delivered on the Business Day preceding such Transfer Date;
(C) to pay the Master Servicer the Servicing Fee due on each
Interest Payment Date pursuant to Section 2(d)(iii)(A), 2(d)(iv)(A) and
2(e)(iv)(A), which Officers'
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Certificate shall be delivered on the day that is three Business Days
prior to such Interest Payment Date;
(D) to make all the distributions required by Sections 2(d),
2(e) and 2(f), for the Monthly Collection Period or Collection Period,
as the case may be, preceding the date of such Officer's Certificate,
which Officers' Certificate shall be delivered on each Determination
Date.
In addition, prior to each Determination Date, the Administrator shall
determine the Class A-1 Rate, the Class A-2 Rate and the Certificate Rate that
will be applicable to the Interest Payment Date following such Determination
Date, in compliance with its obligation to prepare an Officer's Certificate on
such Determination Date pursuant to this Section. In connection therewith, the
Administrator shall calculate LIBOR in accordance with the definition thereof
and shall also determine the Student Loan Rate with respect to such Interest
Payment Date.
(iii) Notwithstanding anything in this Agreement or the
Related Agreements to the contrary, the Administrator shall be responsible for
promptly notifying the Eligible Lender Trustee in the event that any withholding
tax is imposed on the Issuer's payments (or allocations of income) to an Owner
as contemplated in Section 5.01(c) of the Trust Agreement. Any such notice shall
specify the amount of any withholding tax required to be withheld by the
Eligible Lender Trustee pursuant to such provision.
(iv) Notwithstanding anything in this Agreement or the Related
Agreements to the contrary, the Administrator shall be responsible for
performance of the duties of the Eligible Lender Trustee set forth in Section
5.04(a), (b), (c), (d) and (e) of the Trust Agreement with respect to, among
other things, accounting and reports to Owners; provided, however, that the
Eligible Lender Trustee shall retain responsibility for the distribution of the
Schedule K-1s necessary to enable each Owner to prepare its Federal and state
income tax returns.
(v) The Administrator shall satisfy its obligations with
respect to clauses (iii) and (iv) above by retaining, at the expense of the
Issuer, payable by the Administrator, a firm of independent public accountants
(the "Accountants") which shall perform the obligations of the Administrator
thereunder. In connection with paragraph (iii) above, the Accountants will
provide prior to December 31, 1996, a letter in form and substance satisfactory
to the Eligible Lender Trustee as to whether any federal tax withholding is then
required and, if required, the procedures to be followed with respect thereto to
comply with the requirements of the Code. The Accountants shall
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be required to update the letter in each instance that any additional tax
withholding is subsequently required or any previously required tax withholding
shall no longer be required.
(vi) The Administrator shall perform the duties of the
Administrator specified in Sections 10.02 and 10.03 of the Trust Agreement
required to be performed in connection with the resignation or removal of the
Eligible Lender Trustee and the appointment of a successor Eligible Lender
Trustee, and any other duties expressly required to be performed by the
Administrator under the Trust Agreement and the other Related Agreements,
including those under Sections 6.07 and 6.08 of the Indenture.
(vii) As described in Article IX of the Trust Agreement,
notice of any termination of the Trust shall be given by the Administrator to
the Eligible Lender Trustee and the Indenture Trustee as soon as practicable
after the Administrator has received notice thereof.
(viii) In carrying out the foregoing duties or any of its
other obligations under this Agreement, the Administrator may enter into
transactions with or otherwise deal with any of its Affiliates; provided,
however, that the terms of any such transactions or dealings shall be in
accordance with any directions received from the Issuer and shall be, in the
Administrator's opinion, no less favorable to the Issuer than would be available
from unaffiliated parties.
(c) Establishment and Maintenance of Trust Accounts.
(i) The Administrator, for the benefit of the Issuer, shall
establish and maintain in the name of the Indenture Trustee an Eligible Deposit
Account (the "Collection Account"), bearing a designation clearly indicating
that the funds deposited therein are held for the benefit of the Issuer. The
Collection Account will initially be established as a segregated trust account
in the name of the Indenture Trustee with Signet Trust Company.
(ii) The Administrator, for the benefit of the Issuer, shall
establish and maintain in the name of the Indenture Trustee an Eligible Deposit
Account (the "Reserve Account"), bearing a designation clearly indicating that
the funds deposited therein are held for the benefit of the Issuer. The Reserve
Account will initially be established as a segregated trust account in the name
of the Indenture Trustee with Signet Trust Company.
(iii) The Administrator, for the benefit of the Issuer, shall
establish and maintain in the name of the Indenture Trustee an Eligible Deposit
Account (the "Pre-Funding Account"), bearing a designation clearly indicating
that the funds deposited
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therein are held for the benefit of the Issuer. The Pre-Funding Account will
initially be established as a segregated trust account in the name of the
Indenture Trustee with the corporate trust department of Signet Trust Company.
(iv) Funds on deposit in the Collection Account, the Reserve
Account and the Pre-Funding Account (collectively, the "Trust Accounts") shall
be invested by the Indenture Trustee (or any custodian or designated agent with
respect to any amounts on deposit in such accounts) in Eligible Investments
pursuant to written instructions by the Administrator; provided, however, it is
understood and agreed that the Indenture Trustee shall not be liable for any
loss arising from such investment in Eligible Investments. All such Eligible
Investments shall be held by (or by any custodian on behalf of) the Indenture
Trustee for the benefit of the Issuer; provided that on the Business Day
preceding each Interest Payment Date all interest and other investment income
(net of losses and investment expenses) on funds on deposit in the Trust
Accounts shall be deposited into the Collection Account (except that any
maturing Eligible Investment that is an obligation of the institution with which
the Collection Account is maintained may mature and be deposited into the
Collection Account on such Interest Payment Date) and shall be deemed to
constitute a portion of the Monthly Available Funds for each Interest Payment
Date that is not a Distribution Date, and a portion of the Available Funds for
each Distribution Date. Other than as permitted by the Rating Agencies, funds on
deposit in the Trust Accounts shall be invested in Eligible Investments that
will mature so that funds sufficient to pay the Servicing Fee, the
Administration Fee, the Noteholders' Interest Distribution Amount and the
Certificateholders' Interest Distribution Amount will be available in the
Collection Account on the Business Day preceding each Interest Payment Date (or
on such Interest Payment Date in the case of maturing Eligible Investments that
are obligations of the institution with which the Collection Account is
maintained), so that funds on deposit in the Pre-Funding Account that are
required, in the judgment and at the discretion of the Administrator, to make
Additional Fundings during the Collection Period will be available for such
purpose, and so that the remaining such funds will be available at the close of
business on the Business Day preceding each Distribution Date (or on such
Distribution Date in the case of maturing Eligible Investments that are
obligations of the institution with which the Collection Account is maintained).
(v) (A) The Indenture Trustee shall possess all right, title
and interest in all funds on deposit from time to time in the Trust Accounts and
in all proceeds thereof (including all income thereon) and all such funds,
investments, proceeds and income shall be part of the Trust
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Estate. The Trust Accounts shall be under the sole dominion and control of the
Indenture Trustee for the benefit of the Issuer. If, at any time, any of the
Trust Accounts ceases to be an Eligible Deposit Account, the Indenture Trustee
(or the Administrator on its behalf) agrees, by its acceptance hereof, that it
shall within 10 Business Days (or such longer period, not to exceed 30 calendar
days, as to which each Rating Agency may consent) establish a new Trust Account
as an Eligible Deposit Account and shall transfer any cash and/or any
investments to such new Trust Account. In connection with the foregoing, the
Administrator agrees that, in the event that any of the Trust Accounts are not
accounts with the Indenture Trustee, the Administrator shall notify the
Indenture Trustee in writing promptly upon any of such Trust Accounts ceasing to
be an Eligible Deposit Account.
(B) With respect to the Trust Account Property, the
Indenture Trustee agrees, by its acceptance hereof, that:
(1) any Trust Account Property that is held in deposit
accounts shall be held solely in Eligible Deposit Accounts, subject to
the last sentence of clause (v)(A) above; and each such Eligible
Deposit Account shall be subject to the exclusive custody and control
of the Indenture Trustee, and the Indenture Trustee shall have sole
signature authority with respect thereto;
(2) any Trust Account Property that constitutes Physical
Property shall be Delivered to the Indenture Trustee in accordance with
paragraph (a) of the definition of "Delivery" and shall be held,
pending maturity or disposition, solely by the Indenture Trustee or a
financial intermediary (as such term is defined in Section 8-313(4) of
the UCC) acting solely for the Indenture Trustee;
(3) any Trust Account Property that is a book-entry security
held through the Federal Reserve System pursuant to Federal book-entry
regulations shall be Delivered in accordance with paragraph (b) of the
definition of "Delivery" and shall be maintained by the Indenture
Trustee, pending maturity or disposition, through continued book-entry
registration of such Trust Account Property as described in such
paragraph; and
(4) any Trust Account Property that is an "uncertificated
security" under Article VIII of the UCC and that is not governed by
clause (3) above shall be Delivered to the Indenture Trustee in
accordance with paragraph (c) of
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the definition of "Delivery" and shall be maintained by the Indenture
Trustee, pending maturity or disposition, through continued
registration of the Indenture Trustee's (or its nominees) ownership of
such security.
(C) The Administrator shall have the power, revocable
for cause or upon the occurrence and during the continuance of an
Administrator Default by the Indenture Trustee or by the Eligible
Lender Trustee with the consent of the Indenture Trustee, to instruct
the Indenture Trustee to make withdrawals and payments from the Trust
Accounts for the purpose of permitting the Master Servicer, any
Servicer, any Subservicer or the Eligible Lender Trustee to carry out
its respective duties under the Master Servicing Agreement or the Trust
Agreement or permitting the Indenture Trustee to carry out its duties
under the Indenture.
(vi) On each Determination Date, the Administrator shall
calculate all amounts required to determine the amounts to be deposited in the
Collection Account and the other Trust Accounts and the amounts to be
distributed therefrom on the related Interest Payment Date or other dates from
which amounts therein are to be distributed.
(d) Withdrawals from the Collection Account. The
Administrator shall instruct the Indenture Trustee (based, in the case
of clauses (iii) and (iv) below, on the information contained in the
Servicer's Report delivered with respect to the applicable
Determination Date pursuant to Section 3.07 of the Master Servicing
Agreement) to make withdrawals from amounts deposited in the Collection
Account at the following times and for the following purposes, and the
Indenture Trustee shall comply with such instructions:
(i) from time to time during each Collection Period to pay the
Department any Monthly Rebate Fees due and payable to the Department,
to the extent such Monthly Rebate Fees are not being deducted by the
Department out of Special Allowance Payments or Interest Subsidy
Payments;
(ii) on each Transfer Date after the Funding Period to pay to
the Seller, pursuant to Section 2.02 of the Loan Sale Agreement, the
Purchase Amount for Additional Student Loans purchased by the Eligible
Lender Trustee on behalf of the Issuer on such date; provided, that,
the amount paid to the Seller for the purchase of Additional Student
Loans on such Transfer Date plus the amount of funds remitted for the
purchase of Additional Student Loans on each Transfer Date since the
preceding Distribution Date on any Transfer Date
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after the Funding Period shall not exceed the Net Principal Cash Flow
Amount for such Transfer Date;
(iii) on each Interest Payment Date that is not a Distribution
Date, to make the following distributions to the Persons specified
below by 11:00 a.m. (New York Time), to the extent of Monthly Available
Funds for such Interest Payment Date in the Collection Account, in the
following order of priority:
(A) to the Master Servicer, the Servicing Fee with
respect to the preceding calendar month and all unpaid
Servicing Fees from prior months;
(B) to the Administrator, from the amount of Monthly
Available Funds remaining after the application of clause (A),
the Administration Fee with respect to the preceding calendar
month and all unpaid Administration Fees from prior months;
(C) to the Class A-1 Noteholders and the Class A-2
Noteholders, on a pro rata basis, from the amount of Monthly
Available Funds remaining after the application of clauses (A)
and (B), the Noteholders' Interest Distribution Amount (based
on the ratio of the portion of the Noteholders' Interest
Distribution Amount accrued with respect to each such Class to
the Noteholders' Interest Distribution Amount); and
(D) to the order of the Eligible Lender Trustee, from
the amount of Monthly Available Funds remaining after the
application of clauses (A) through (C), the
Certificateholders' Interest Distribution Amount.
(iv) on each Distribution Date, to make the following deposits
and distributions to the Persons or the account specified below by
11:00 a.m. (New York Time), to the extent of Available Funds for such
Distribution Date in the Collection Account, in the following order of
priority:
(A) to the Master Servicer, the Servicing Fee with
respect to the preceding calendar month and all unpaid
Servicing Fees from prior months;
(B) to the Administrator, from the amount of
Available Funds remaining after the application of clause (A),
the Administration Fee with respect to the preceding calendar
month and all unpaid Administration Fees from prior months;
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(C) to the Class A-1 Noteholders and the Class A-2
Noteholders, on a pro rata basis, from the amount of Available
Funds remaining after the application of clauses (A) and (B),
the Noteholders' Interest Distribution Amount (based on the
ratio of the portion of the Noteholders' Interest Distribution
Amount accrued with respect to each such Class to the
Noteholders' Interest Distribution Amount);
(D) to the order of the Eligible Lender Trustee, from
the amount of Available Funds remaining after the application
of clauses (A) through (C), the Certificateholders' Interest
Distribution Amount;
(E) to the Class A-1 Noteholders until the
Outstanding Amount of the Class A-1 Notes has been reduced to
zero and then to the Class A-2 Noteholders, from the amount of
Available Funds remaining after the application of clauses (A)
through (D), the Noteholders' Principal Distribution Amount;
(F) on each Distribution Date on and after the date
on which the Notes have been paid in full, to the order of the
Eligible Lender Trustee, from the amount of Available Funds
remaining after the application of clauses (A) through (E),
the Certificateholders' Principal Distribution Amount; and
(G) to the Reserve Account, the amount of Available
Funds remaining after the application of clauses (A) through
(F).
Except in the case of amounts distributed pursuant to Sections
(iv)(G), amounts properly withdrawn from the Collection Account and distributed
pursuant to this Section 2(d) shall be deemed released from the Trust Estate and
the security interest therein granted to the Indenture Trustee, and the Persons
to whom such amounts are distributed shall in no event be required to refund any
such distributed amounts.
(e) Reserve Account. (i) The Seller shall deposit the
Reserve Account Initial Deposit into the Reserve Account as required by Section
2.01(b) of the Loan Sale Agreement.
(ii) On each Distribution Date, the Administrator shall
instruct the Indenture Trustee to withdraw from the Reserve Account the amount
of any Reserve Account Excess and distribute such amount to the Persons
specified below by 11:00 a.m. (New York time) in the following order of
priority: (A) to the payment of the unpaid principal amount of the Notes and the
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Certificates, in the order of priority set forth in the last sentence of this
Section 2(e)(ii), until (x) the outstanding principal balance of the Notes plus
the Certificate Balance of the Certificates (in each case, after giving effect
to any other distributions in respect of principal occurring on such
Distribution Date) equals (y) the Pool Balance plus the Pre-Funded Amount, if
any, as of the close of business on the last day of the related Collection
Period, (B) to the Noteholders, the aggregate unpaid amount of any Noteholders'
Interest LIBOR Carryover, (C) to the Certificateholders, the aggregate unpaid
amount of any Certificateholders' Interest LIBOR Carryover, (D) if such
Distribution Date is on or subsequent to the January 2007 Distribution Date and
the Pool Balance on such Distribution Date is equal to 10% or less of the sum of
the Initial Pool Balance and the Initial Pre-Funded Amount, to the payment of
the unpaid principal amount of the Notes and Certificates in the order of
priority set forth in the last sentence of this Section 2(e)(ii), and (E) to
distribute 99% of the remaining amount of such excess to the Seller and 1% of
the remaining amount to the Company. Amounts properly distributed pursuant to
clause (E) of this Section 2(e)(ii) shall be deemed released from the Trust
Estate and the security interest therein granted to the Indenture Trustee, and
the Seller and the Company shall in no event thereafter be required to refund
any such distributed amounts. All distributions of principal on the Notes and
the Certificates pursuant to clauses (A) and (D) of this Section 2(e)(ii) shall
be allocated (after giving effect to all distributions of the Noteholders'
Principal Distribution Amount and the Certificateholders' Principal Distribution
Amount on such Distribution Date) to the Class A-1 Notes until the principal
balance of the Class A-1 Notes has been reduced to zero, then to the Class A-2
Notes until the principal balance of the Class A-2 Notes has been reduced to
zero, and then to the Certificates until the Certificate Balance has been
reduced to zero.
(iii) Following the payment in full of the aggregate
outstanding principal balance of the Notes and the Certificate Balance and of
all other amounts owing or to be distributed hereunder or under the Indenture or
the Trust Agreement to Noteholders, Certificateholders, the Master Servicer or
the Administrator and the termination of the Trust (including any Noteholders'
Interest LIBOR Carryover and Certificateholders' Interest LIBOR Carryover), 99%
of any amount remaining on deposit in the Reserve Account shall be distributed
to the Seller and 1% of any remaining amount on deposit in the Reserve Account
shall be distributed to the Company. The Seller and the Company shall in no
event be required to refund any amounts properly distributed pursuant to this
Section 2(e)(iii).
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(iv) (A) In the event that the Servicing Fee for any Interest
Payment Date exceeds the amount distributed to the Master Servicer
pursuant to Sections 2(d)(iii)(A) or 2(d)(iv)(A) on such Interest
Payment Date, the Administrator shall instruct the Indenture Trustee to
withdraw from the Reserve Account on each Interest Payment Date an
amount equal to such excess.
(B) In the event that the Administration Fee for any
Interest Payment Date exceeds the amount distributed to the
Administrator pursuant to Sections 2(d)(iii)(B) or 2(d)(iv)(B) on such
Interest Payment Date, the Administrator shall instruct the Indenture
Trustee to withdraw from the Reserve Account on such Interest Payment
Date an amount equal to such excess, to the extent of funds available
therein after giving effect to paragraph (iv)(A) above, and to
distribute such amount to the Administrator.
(C) In the event that the Noteholders' Interest
Distribution Amount for an Interest Payment Date exceeds the amount
distributed to Noteholders pursuant to Section 2(d)(iii)(C) or
2(d)(iv)(C) on such Interest Payment Date, the Administrator shall
instruct the Indenture Trustee to withdraw from the Reserve Account on
such Interest Payment Date an amount equal to such excess, to the
extent of funds available therein after giving effect to paragraphs
(iv)(A) through (iv)(B) above, and to distribute such amount to the
Noteholders entitled thereto, in the same order and priority as is set
forth in Section 2(d)(iii) or Section 2(d)(iv) on such Interest Payment
Date.
(D) In the event that (i) the Certificate- holders'
Interest Distribution Amount for an Interest Payment Date exceeds the
amount distributed to the order of the Eligible Lender Trustee pursuant
to Section 2(d)(iii)(D) or 2(d)(iv)(D), the Administrator shall
instruct the Indenture Trustee to withdraw from the Reserve Account on
such Interest Payment Date an amount equal to such excess, to the
extent of funds available therein after giving effect to paragraphs
(iv)(A) through (iv)(C) above, and to distribute such amount to the
order of the Eligible Lender Trustee, in the same order and priority as
is set forth in Section 2(d)(iii) or 2(d)(iv) on such Interest Payment
Date.
(E) Only with respect to a Distribution Date
occurring on or after the January 2000 Distribution Date, in the event
that the Noteholders' Principal Distribution Amount for such a
Distribution Date exceeds the amount distributed to Noteholders
pursuant to Section 2(d)(iv)(E) on such Distribution Date, the
Administrator shall instruct
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the Indenture Trustee to withdraw from the Reserve Account on such
Distribution Date an amount equal to such excess, to the extent of
funds available therein after giving effect to paragraphs (iv)(A)
through (iv)(D) above, and to distribute such amount to the Noteholders
entitled thereto, in the same order and priority as is set forth in
Section 2(d)(iv)(E) on such Distribution Date.
(F) Only with respect to a Distribution Date
occurring on or after the January 2000 Distribution Date, in the event
that the Certificateholders' Principal Distribution Amount for such a
Distribution Date exceeds the amount distributed to the Eligible Lender
Trustee pursuant to Section 2(d)(iv)(F) on such Distribution Date, the
Administrator shall instruct the Indenture Trustee to withdraw from the
Reserve Account on such Distribution Date an amount equal to such
excess, to the extent of funds available therein after giving effect to
paragraphs (iv)(A) through (iv)(E) above, and to distribute such amount
to the order of the Eligible Lender Trustee on such Distribution Date.
(f) Pre-Funding Account. (i) On the Closing Date, the Seller
will deposit in the Pre-Funding Account the Initial Pre-Funded Amount. During
the Funding Period, the Administrator shall instruct the Indenture Trustee to
withdraw from the Pre- Funding Account, in the following order of priority in
each case to the extent of the funds on deposit therein , first, on the Business
Day immediately preceding each Distribution Date and on the last date of the
Funding Period, an amount equal to the Capitalized Interest Amount for the
preceding Student Loan Rate Accrual Period and to deposit such amount into the
Collection Account and second, on each Transfer Date, an amount equal to the
Purchase Amount of the Additional Student Loans transferred to the Eligible
Lender Trustee on behalf of the Issuer on such Transfer Date and to distribute
such amount to or upon the order of the Seller upon satisfaction of the
conditions set forth in Section 2.02 of the Loan Sale Agreement with respect to
such transfer.
(ii) If (x) the Pre-Funded Amount has not been reduced to zero
on the Distribution Date on which the Funding Period ends (or, if the Funding
Period does not end on a Distribution Date, on the first Distribution Date
following the end of the Funding Period) or (y) the Pre-Funded Amount has been
reduced to $100,000 or less on any Distribution Date, in either case after
giving effect to any reductions in the Pre-Funded Amount on such Distribution
Date pursuant to Section 2(f)(i) above, the Administrator shall instruct the
Indenture Trustee to withdraw from the Pre-Funding Account on such Distribution
Date an amount
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equal to the Pre-Funded Amount and to distribute such amount to Noteholders as a
payment of principal in the same manner as the Noteholders' Principal
Distribution Amount is distributed or, if Notes have been paid in full on or
prior to such Distribution Date, to distribute such amount to the order of the
Eligible Lender Trustee as a payment of principal in the same manner as the
Certificateholders' Principal Distribution Amount is distributed.
(g) Statements to Certificateholders and Noteholders. On each
Determination Date preceding a Distribution Date, the Administrator shall
provide to the Indenture Trustee (with a copy to the Rating Agencies) for the
Indenture Trustee to forward on such succeeding Distribution Date to each
Noteholder of record and to the Eligible Lender Trustee for the Eligible Lender
Trustee to forward on such succeeding Distribution Date to each
Certificateholder of record a statement substantially in the form of Exhibits B
and C, respectively, setting forth at least the following information as to the
Notes and the Certificates to the extent applicable:
(i) the amount of such distribution allocable to principal of
the Class A-1 Notes;
(ii) the amount of such distribution allocable to principal of
the Class A-2 Notes;
(iii) the amount of the distribution allocable to interest on
such Distribution Date and on each Interest Payment Date following the
immediately preceding Distribution Date of the Class A-1 Notes;
(iv) the amount of the distribution allocable to interest on
such Distribution Date and on each Interest Payment Date following the
immediately preceding Distribution Date of the Class A-2 Notes;
(v) the amount of such distribution allocable to principal of
the Certificates;
(vi) the amount of the distribution allocable to interest on
such Distribution Date and on each Interest Payment Date following the
immediately preceding Distribution Date of the Certificates;
(vii) the amount, if any, of such distribution allocable to any
Noteholders' Interest LIBOR Carryover and any Certificateholders'
Interest LIBOR Carryover, together with any remaining outstanding amount
of each thereof;
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(viii) the Pool Balance as of the close of business on the last
day of the preceding Collection Period;
(ix) the aggregate outstanding principal balance of the Class
A-1 Notes, the Class A-1 Note Pool Factor, the aggregate outstanding
principal balance of the Class A-2 Notes, the Class A-2 Note Pool
Factor, the Certificate Balance and the Certificate Pool Factor as of
such Distribution Date, after giving effect to payments allocated to
principal reported under clauses (i), (ii) and (v) above;
(x) the Class A-1 Rate, the Class A-2 Rate and the
Certificate Rate applicable with respect to each distribution referred
to in clauses (iii), (iv) and (vi) above, indicating whether such
interest rate was calculated based on the Student Loan Rate or based on
LIBOR, and specifying what each such interest would have been using the
alternate basis for such calculation;
(xi) the amount of the Servicing Fee and prior unpaid
Servicing Fees paid to the Master Servicer on such Distribution Date and
on each Interest Payment Date following the immediately preceding
Distribution Date;
(xii) the amount of the Administration Fee and prior
unpaid Administration Fees paid to the Administrator on such
Distribution Date and on each Interest Payment Date following the
immediately preceding Distribution Date;
(xiii) the amount of the aggregate Realized Losses,
if any, for such Collection Period and the balance of Financed Student
Loans that are delinquent in each delinquency period as of the end of
such Collection Period;
(xiv) the balance of the Reserve Account on such
Distribution Date, after giving effect to changes therein on such
Distribution Date and indicating whether on such Distribution Date or
any Interest Payment Date since the preceding Distribution Date any
withdrawal was made therefrom pursuant to Section 2(e)(iv), the amount
of each such withdrawal and the purpose(s) pursuant to Section 2(e)(iv)
for each such withdrawal;
(xv) the amount of Reserve Account Excess, if any,
for such Distribution Date and amount thereof distributed pursuant to
each of the provisions of clauses (A) through (E) of Section 2(e)(ii);
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(xvi) for Distribution Dates during the Funding
Period, the remaining Pre-Funded Amount after giving effect to changes
therein on such Distribution Date;
(xvii) for the Distribution Date on or immediately
following the end of the Funding Period, the amount of any remaining
Pre-Funded Amount that has not been used to make Additional Fundings;
(xviii) the principal balance and number of Additional
Student Loans conveyed to the Issuer during the related Collection
Period;
(xix) the number and principal balance of Financed
Student Loans as of the end of the related Collection Period, that are
(A) In-School, (B) Grace, (C) Repayment, (D) Deferral, or (E)
Forbearance; and
(xx) the number and principal balance of Financed
Student Loans as of the end of the related Collection Period that are
(A) Consolidation Loans, (B) PLUS Loans, (C) subsidized Stafford Loans,
(D) unsubsidized Stafford Loans or (E) SLS Loans; and
(xxi) the number and principal balance of Financed
Student Loans as of the end of the related Collection Period that were
originated for the purpose of financing attendance at (A) 2-year
institutions, (B) 4-year institutions; (C) graduate schools; (D)
proprietary or vocational schools or (E) other.
Each amount set forth pursuant to clauses (i), (ii), (iii), (iv), (v) and (vi)
above shall be expressed as a dollar amount per $1,000 of original principal
balance of a Certificate or Note, as applicable. A copy of the statements
referred to above may be obtained by any Certificate Owner or Note Owner by a
written request to the Eligible Lender Trustee or the Indenture Trustee,
respectively, addressed to the respective Corporate Trust Office.
(h) Non-Ministerial Matters. With respect to matters that in
the reasonable judgment of the Administrator are non-ministerial, the
Administrator shall not take any action unless within a reasonable time before
the taking of such action, the Administrator shall have notified the Eligible
Lender Trustee of the proposed action and the Eligible Lender Trustee shall have
consented to it. For the purpose of the preceding sentence, "non-ministerial
matters" shall include:
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(i) the amendment of or any supplement to the Indenture;
(ii) the initiation of any claim or lawsuit by the Issuer and
the compromise of any action, claim or lawsuit brought by or against
the Issuer (other than in connection with the collection of the
Financed Student Loans);
(iii) the amendment, change or modification of the Related
Agreements;
(iv) the appointment of successor Note Registrars, successor
Paying Agents and successor Indenture Trustees pursuant to the
Indenture or the appointment of successor Administrators or Successor
Master Servicers, or the consent to the assignment by the Note
Registrar, Paying Agent or Indenture Trustee of its obligations under
the Indenture; and
(v) the removal of the Indenture Trustee.
(i) Administrator Deposit Condition. During each Monthly
Collection Period during which an Administrator Deposit Condition shall exist,
notwithstanding any other provision of this Agreement or the other Basic
Documents, all amounts required to be deposited into the Collection Account
pursuant to Section 4.01 of the Master Servicing Agreement shall at the time of
such required deposit instead be remitted to the account of the Administrator.
So long as an Administrator Deposit Condition shall exist, the Administrator
shall be required to deposit all amounts so remitted to it during any Monthly
Collection Period into the Collection Account no later than the Business Day
prior to the next succeeding Interest Payment Date and prior to such deposit
such amounts may be invested by the Administrator at its own risk and for its
own benefit (with any losses on such amounts remitted to it to be paid into the
Collection Account by the Administrator out of its own funds) and may be
commingled by the Administrator with its own funds and for all purposes of the
Basic Documents, other than the administration of such funds as provided for
above, such amounts shall be deemed to be on deposit in the Collection Account
at the time they are so held by the Administrator.
3. Annual Statement as to Compliance. (a) The Administrator
shall deliver to the Seller, the Eligible Lender Trustee and the Indenture
Trustee, on or before June 30 of each year beginning June 30, 1998, an Officers'
Certificate of the Administrator, stating that (i) a review of the activities of
the Administrator during the preceding fiscal year ending December 31 (or, in
the case of the first such certificate, during the period
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from the Closing Date to December 31, 1997) and of its performance under this
Agreement has been made under such officers' supervision and (ii) to the best of
such officers' knowledge, based on such review, the Administrator has fulfilled
all its obligations under this Agreement throughout such year or, if there has
been a default in the fulfillment of any such obligation, specifying each such
default known to such officers and the nature and status thereof. The Indenture
Trustee shall send a copy of each such Officer's Certificate and each report
referred to in Section 4 to the Rating Agencies. A copy of such Officer's
Certificate and each report referred to in Section 4 may be obtained by any
Certificateholder, Certificate Owner, Noteholder or Note Owner by a request in
writing to the Eligible Lender Trustee addressed to its Corporate Trust Office,
together with evidence satisfactory to the Eligible Lender Trustee that such
Person is one of the foregoing parties. Upon the telephone request of the
Eligible Lender Trustee (to be confirmed in writing), the Indenture Trustee will
promptly furnish the Eligible Lender Trustee a list of Noteholders as of the
date specified by the Eligible Lender Trustee.
(b) The Administrator shall deliver to the Eligible Lender
Trustee, the Indenture Trustee, the Master Servicer, and the Rating Agencies,
promptly after having obtained knowledge thereof, but in no event later than two
Business Days thereafter, written notice in an Officers' Certificate of the
Administrator of any event which with the giving of notice or lapse of time, or
both, would become an Administrator Default under Section 12.
4. Annual Independent Certified Public Accountants' Report.
The Administrator shall cause a firm of independent certified public
accountants, which may also render other services to the Administrator, to
deliver to the Seller, the Eligible Lender Trustee and the Indenture Trustee on
or before June 30 of each year beginning June 30, 1998, a report addressed to
the Administrator and to the Seller, the Eligible Lender Trustee and the
Indenture Trustee (which report may be combined with other reports required to
be delivered by such accountants to the Administrator, the Eligible Lender
Trustee and the Indenture Trustee under the Related Agreements), to the effect
that such firm has examined certain documents and records relating to the
administration of the Financed Student Loans and of the Trust during the
preceding fiscal year ended December 31 (or, in the case of the first such
report, during the period from the Closing Date to December 31, 1997) and that,
on the basis of the accounting and auditing procedures considered appropriate
under the circumstances, such firm is of the opinion that such administration
was conducted in compliance with the terms of this Agreement except for (i) such
exceptions as such firm shall believe to be immaterial and (ii) such other
exceptions as shall
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be set forth in such report. The Indenture Trustee shall send a copy of each
such report to the Rating Agencies.
Such report will also indicate that the firm is independent of
the Administrator within the meaning of the Code of Professional Ethics of the
American Institute of Certified Public Accountants.
5. Administrator Expenses. The Administrator shall be
required to pay all expenses incurred by it in connection with its activities
hereunder, including fees and disbursements of independent accountants, taxes
imposed on the Administrator and expenses incurred in connection with
distributions and reports to the Certificateholders and the Noteholders, as the
case may be.
6. Records. The Administrator shall maintain appropriate
books of account and records relating to services performed hereunder, which
books of account and records shall be accessible for inspection by the Issuer at
any time during normal business hours upon reasonable request.
7. Compensation. As compensation for the performance of the
Administrator's obligations under this Agreement and as reimbursement for its
expenses related thereto, the Administrator shall be entitled to the
Administration Fee payable monthly in arrears on each Interest Payment Date
which shall be solely an obligation of the Issuer and payable solely as provided
herein.
8. Additional Information To Be Furnished to the Issuer.
Subject to Section 31 hereof, the Administrator shall furnish to the Issuer from
time to time such additional information regarding the Collateral as the Issuer
shall reasonably request.
9. Independence of the Administrator. For all purposes of this
Agreement, the Administrator shall be an independent contractor and shall not be
subject to the supervision of the Issuer or the Eligible Lender Trustee with
respect to the manner in which it accomplishes the performance of its
obligations hereunder. Unless expressly authorized by the Issuer, the
Administrator shall have no authority to act for or represent the Issuer or the
Eligible Lender Trustee in any way and shall not otherwise be deemed an agent of
the Issuer or the Eligible Lender Trustee.
10. No Joint Venture. Nothing contained in this Agreement (i)
shall constitute the Administrator and either of the Issuer or the Eligible
Lender Trustee as members of any partnership, joint venture, association,
syndicate, unincorporated business or other separate entity, (ii) shall be
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construed to impose any liability as such on any of them or (iii) shall be
deemed to confer on any of them any express, implied or apparent authority to
incur any obligation or liability on behalf of the others.
11. Other Activities of Administrator. Nothing herein shall
prevent the Administrator or its Affiliates from engaging in other businesses
or, in its sole discretion, from acting in a similar capacity as an
administrator for any other person or entity even though such person or entity
may engage in business activities similar to those of the Issuer, the Eligible
Lender Trustee or the Indenture Trustee.
12. Administrator Default. If any one of the following events
(an "Administrator Default") shall occur and be continuing:
(a) any failure by the Administrator to direct the Indenture
Trustee to make any required distributions from any of the Trust
Accounts, which failure continues unremedied for five Business Days
after written notice of such failure is received by the Administrator
from the Indenture Trustee or the Eligible Lender Trustee or after
discovery of such failure by an officer of the Administrator; or
(b) any failure by the Administrator duly to observe or to
perform in any material respect any other covenants or agreements of
the Administrator set forth in this Agreement or any Related
Agreements, which failure shall (i) materially and adversely affect the
rights of Noteholders or Certificateholders and (ii) continues
unremedied for a period of 60 days (or for such longer period, not in
excess of 120 days, as may be reasonably necessary to remedy such
failure, if the Indenture Trustee and the Eligible Lender Trustee
reasonably believe such failure is susceptible to cure within such
longer period) after the date on which written notice of such failure,
requiring the same to be remedied, shall have been given (A) to the
Administrator by either the Indenture Trustee or the Eligible Lender
Trustee or (B) to the Administrator and to the Indenture Trustee and
the Eligible Lender Trustee by the Noteholders or Certificateholders,
as applicable, representing not less than 25% of the Outstanding Amount
of the Notes or 25% of the outstanding Certificate Balance; or
(c) an Insolvency Event occurs with respect to the
Administrator;
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then, and in each and every case, so long as the Administrator Default shall not
have been remedied, either the Indenture Trustee, or the Noteholders evidencing
not less than 75% of the Outstanding Amount of the Notes, by notice then given
in writing to the Administrator (and to the Indenture Trustee and the Eligible
Lender Trustee if given the Noteholders) may terminate all the rights and
obligations (other than the obligations set forth in Section 24 hereof) of the
Administrator under this Agreement. On or after the receipt by the Administrator
of such written notice, all authority and power of the Administrator under this
Agreement, whether with respect to the Notes, the Certificates or the Financed
Student Loans or otherwise, shall, without further action, pass to and be vested
in the Indenture Trustee or such successor Administrator as may be appointed
under Section 13; and, without limitation, the Indenture Trustee and the
Eligible Lender Trustee are hereby authorized and empowered to execute and
deliver, for the benefit of the predecessor Administrator, as attorney-in-fact
or otherwise, any and all documents and other instruments, and to do or
accomplish all other acts or things necessary or appropriate to effect the
purposes of such notice of termination. The predecessor Administrator shall
cooperate with the successor Administrator, the Indenture Trustee and the
Eligible Lender Trustee in effecting the termination of the responsibilities and
rights of the predecessor Administrator under this Agreement. All reasonable
costs and expenses (including attorneys' fees and expenses) incurred in
connection with amending this Agreement to reflect such succession as
Administrator pursuant to this Section shall be paid by the predecessor
Administrator upon presentation of reasonable documentation of such costs and
expenses. Upon receipt of notice of the occurrence of an Administrator Default,
the Eligible Lender Trustee shall give notice thereof to the Rating Agencies.
13. Appointment of Successor. (a) Upon receipt by the
Administrator of notice of termination pursuant to Section 12, or the
resignation by the Administrator in accordance with the terms of this Agreement,
the predecessor Administrator shall continue to perform its functions as
Administrator, in the case of termination, only until the date specified in such
termination notice or, if no such date is specified in a notice of termination,
until receipt of such notice and, in the case of resignation, until the later of
(x) the date 120 days from the delivery to the Eligible Lender Trustee and the
Indenture Trustee of written notice of such resignation (or written confirmation
of such notice) in accordance with the terms of this Agreement and (y) the date
upon which the predecessor Administrator shall become unable to act as
Administrator as specified in the notice of resignation and accompanying Opinion
of Counsel. In the event of termination hereunder of the Administrator, the
Issuer shall
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appoint a successor Administrator acceptable to the Indenture Trustee and the
successor Administrator shall accept its appointment by a written assumption in
form acceptable to the Indenture Trustee. In the event that a successor
Administrator has not been appointed at the time when the predecessor
Administrator has ceased to act as Administrator in accordance with this
Section, the Indenture Trustee without further action shall automatically be
appointed the successor Administrator and the Indenture Trustee shall be
entitled to the Administration Fee. Notwithstanding the above, the Indenture
Trustee shall, if it shall be unwilling or legally unable so to act, appoint or
petition a court of competent jurisdiction to appoint, any established
institution whose regular business shall include the servicing of student loans,
as the successor to the Administrator under this Agreement and the
Administration Agreement.
(b) Upon appointment, the successor Administrator (including
the Indenture Trustee acting as successor Administrator) shall be the successor
in all respects to the predecessor Administrator and shall be subject to all the
responsibilities, duties and liabilities placed on the predecessor Administrator
that arise thereafter or are related thereto and shall be entitled to an amount
agreed to by such successor Administrator (which shall not exceed the
Administration Fee unless such compensation arrangements will not result in a
downgrading of the Notes or the Certificates by any Rating Agency) and all the
rights granted to the predecessor Administrator by the terms and provisions of
this Agreement.
(c) The Administrator may not resign unless it is prohibited
from serving as such by law as evidenced by an Opinion of Counsel to such effect
delivered to the Indenture Trustee and the Eligible Lender Trustee.
Notwithstanding the foregoing or anything to the contrary herein or in the
Related Agreements, the Indenture Trustee, to the extent it is acting as
successor Administrator pursuant hereto, shall be entitled to resign to the
extent a qualified successor Administrator has been appointed and has assumed
all the obligations of the Administrator in accordance with the terms of this
Agreement and the Related Agreements.
14. Notification to Noteholders and Certificateholders. Upon
any termination of, or appointment of a successor to, the Administrator pursuant
to Section 12 or 13, the Eligible Lender Trustee shall give prompt written
notice thereof to Certificateholders and the Indenture Trustee shall give prompt
written notice thereof to Noteholders and the Rating Agencies (which, in the
case of any such appointment of a successor, shall consist of prior written
notice thereof to the Rating Agencies).
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15. Waiver of Past Defaults. The Noteholders of Notes
evidencing not less than a majority of the Outstanding Amount of the Notes (or
the Certificateholders of Certificates evidencing not less than a majority of
the outstanding Certificate Balance, in the case of any default which does not
adversely affect the Indenture Trustee or the Noteholders) may, on behalf of all
Noteholders and Certificateholders, waive in writing any default by the
Administrator in the performance of its obligations hereunder and any
consequences thereof, except a default in making any required deposits to or
payments from any of the Trust Accounts (or giving instructions regarding the
same) in accordance with this Agreement. Upon any such waiver of a past default,
such default shall cease to exist, and any Administrator Default arising
therefrom shall be deemed to have been remedied for every purpose of this
Agreement. No such waiver shall extend to any subsequent or other default or
impair any right consequent thereto.
16. Notices. Any notice, report or other communication given
hereunder shall be in writing (or in the form of facsimile notice, followed by
written notice) and addressed as follows:
(a) if to the Issuer, to
Signet Student Loan Trust 1996-A
c/o First Chicago Delaware Inc., Trustee
300 King Street
Wilmington, Delaware 19801
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
One First National Plaza
Suite 0126
Chicago, Illinois 60610
Attention: Corporate Trust Administration
Telephone: (312) 407-1892
Facsimile: (312) 407-1708
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(c) if to the Administrator, to
Signet Bank
7 North 8th Street
Richmond, Virginia 23219
Attention: Treasurer
Telephone: (804) 771-7060
Telecopy: (804) 771-7936
(d) if to the Indenture Trustee, to
The Bank of New York
101 Barclay Street
New York, New York 10286
Attention: Asset Backed Finance Unit
Telephone: (212) 815-5286
Facsimile: (212) 815-5544
or to such other address as any party shall have provided to the other parties
in writing. Any notice required to be in writing hereunder shall be deemed given
if such notice is mailed by certified mail, postage prepaid, or hand-delivered
to the address of such party as provided above.
17. Amendments. This Agreement may be amended from time to
time by a written amendment duly executed and delivered by the Issuer, the
Administrator and the Indenture Trustee, with the written consent of the
Eligible Lender Trustee, without the consent of the Noteholders and the
Certificateholders, for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Agreement or of
modifying in any manner the rights of the Noteholders or Certificateholders or
in connection with a transaction described in Section 25 hereof; provided that
such amendment will not, in an Opinion of Counsel obtained on behalf of the
Issuer and satisfactory to the Indenture Trustee and the Eligible Lender
Trustee, materially and adversely affect the interest of any Noteholder or
Certificateholder. This Agreement may also be amended by the Issuer, the
Administrator and the Indenture Trustee with the written consent of the Eligible
Lender Trustee, the Noteholders of at least a majority in the Outstanding Amount
of the Notes and the Certificateholders of at least a majority of the
Certificate Balance for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Agreement or of
modifying in any manner the rights of Noteholders or the Certificateholders;
provided, however, that no such amendment may (i) increase or reduce in any
manner the amount of, or accelerate or delay the timing of, collections of
payments with respect to Student Loans or distributions that are required to be
made for the benefit of the Noteholders or
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Certificateholders or (ii) reduce the aforesaid percentage of the Noteholders
and the Certificateholders which are required to consent to any such amendment,
without the consent of all Outstanding Noteholders and Certificateholders. Prior
to the execution of any such amendment, the Administrator shall furnish written
notification of the substance of such amendment to each of the Rating Agencies.
18. Assignment. Notwithstanding anything to the contrary
contained herein, except as provided in Section 13 or 25 of this Agreement
concerning the resignation of the Administrator, this Agreement may not be
assigned by the Administrator.
19. Governing Law. This Agreement shall be construed in
accordance with the laws of the Commonwealth of Virginia, without reference to
its conflict of law provisions, and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws.
20. Headings. The section headings hereof have been inserted
for convenience of reference only and shall not be construed to affect the
meaning, construction or effect of this Agreement.
21. Counterparts. This Agreement may be executed in
counterparts, each of which when so executed shall together constitute but one
and the same agreement.
22. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall be ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
23. Not Applicable to Signet Bank in Other Capacities. Nothing
in this Agreement shall affect any obligation Signet Bank may have in any other
capacity under the Related Agreements.
24. Liability of Administrator; Indemnities. The
Administrator shall be liable in accordance herewith only to the extent of the
obligations specifically undertaken by the Administrator under this Agreement.
The Administrator shall indemnify, defend and hold harmless
the Issuer, the Eligible Lender Trustee, the Indenture Trustee, the Master
Servicer, any Subservicer, the Certificateholders and the Noteholders and any of
the officers,
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directors, employees and agents of the Issuer, the Eligible Lender Trustee, the
Indenture Trustee, the Master Servicer and any Subservicer from and against any
and all costs, expenses, losses, claims, damages and liabilities to the extent
that such cost, expense, loss, claim, damage or liability arose out of, or was
imposed upon any such Person through, the negligence, willful misfeasance or bad
faith of the Administrator in the performance of its duties under this Agreement
or by reason of reckless disregard of its obligations and duties hereunder or
thereunder.
The Administrator shall pay reasonable compensation to the
Indenture Trustee and shall reimburse the Indenture Trustee for all reasonable
expenses, disbursements and advances, and indemnify, defend and hold harmless
the Indenture Trustee and its officers, directors, employees and agents from and
against all costs, expenses, losses, claims, damages and liabilities, to the
extent and in the manner provided in, and subject to the limitations of, Section
6.07 of the Indenture.
For purposes of this Section, in the event of the termination
of the rights and obligations of the Administrator (or any successor thereto
pursuant to Section 25) as Administrator pursuant to Section 12 or a resignation
by such Administrator pursuant to this Agreement, such Administrator shall be
deemed to be the Administrator pending appointment of a successor Administrator
pursuant to Section 13.
Indemnification under this Section shall survive the
resignation or removal of the Eligible Lender Trustee or the Indenture Trustee
or the termination of this Agreement and shall include reasonable fees and
expenses of counsel and expenses of litigation. If the Administrator shall have
made any indemnity payments pursuant to this Agreement and the Person to or on
behalf of whom such payments are made thereafter collects any of such amounts
from others, such Person shall promptly repay such amounts to the Administrator,
without interest.
25. Merger or Consolidation of, or Assumption of the
Obligations of, Administrator. The Administrator hereby agrees that, upon (a)
any merger or consolidation of the Administrator into another Person, (b) any
merger or consolidation to which the Administrator shall be a party resulting in
the creation of another Person, (c) any Person succeeding to the properties and
assets of the Administrator substantially as a whole or (d) the other transfer
by the Administrator to any Person of the Administrator's student lending
business substantially as a whole, the Administrator shall (i) cause such Person
(if other than the Administrator) to execute an agreement of assumption to
perform every obligation of the Administrator hereunder, (ii) deliver to the
Eligible Lender Trustee and Indenture Trustee an
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Officers' Certificate and an Opinion of Counsel each stating that such
consolidation, merger or succession and such agreement of assumption comply with
this Section and that all conditions precedent provided for in this Agreement
relating to such transaction have been complied with, (iii) cause the Rating
Agency Condition to be satisfied or, in the case of a transfer pursuant to
clause (d) to a Person that is a Non-Code Entity, deliver notice of such
transfer and assumption to each Rating Agency, and (iv) cure any existing
Administrator Default or any continuing event which, after notice or lapse of
time or both, would become an Administrator Default. Upon compliance with the
foregoing requirements, such Person shall be the successor to the Administrator
under this Agreement without further act on the part of any of the parties to
this Agreement. Notwithstanding anything herein to the contrary, compliance with
clauses (i), (ii), (iii) and (iv) above shall be conditions to the consummation
of any of the transactions referred to in clause (a), (b) or (c) above.
26. Limitation on Liability of Administrator and Others.
Neither the Administrator nor any of its directors, officers, employees or
agents shall be under any liability to the Issuer, the Noteholders or the
Certificateholders, the Indenture Trustee or the Eligible Lender Trustee, the
Master Servicer or the Paying Agent(s) except as provided under this Agreement,
for any action taken or for refraining from the taking of any action pursuant to
this Agreement or for errors in judgment; provided, however, that this provision
shall not protect the Administrator or any such person against any liability
that would otherwise be imposed by reason of willful misfeasance, bad faith or
negligence in the performance of its duties or by reason of reckless disregard
of obligations and its duties under this Agreement. The Administrator and any of
its directors, officers, employees or agents may rely in good faith on the
advice of counsel or on any document of any kind prima facie properly executed
and submitted by any Person respecting any matters arising hereunder.
Except as provided in this Agreement, the Administrator shall
not be under any obligation to appear in, prosecute or defend any legal action
that shall not be incidental to its duties to administer the Financed Student
Loans and the Trust in accordance with this Agreement, and that in its opinion
may involve it in any expense or liability; provided, however, that the
Administrator may undertake any reasonable action that it may deem necessary or
desirable in respect of this Agreement and the other Basic Documents and the
rights and duties of the parties to this Agreement and the Related Agreements
and the interests of the Certificateholders under this Agreement and the
Noteholders under the Indenture.
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27. Signet Bank Not to Resign as Administrator. Subject to the
provisions of Section 25, Signet Bank shall not resign from the obligations and
duties imposed on it as Administrator under this Agreement except upon
determination that the performance of its duties under this Agreement shall no
longer be permissible under applicable law or shall violate any final order of a
court or administrative agency with jurisdiction over Signet Bank or its
properties. Notice of any such determination permitting the resignation of
Signet Bank shall be communicated to the Eligible Lender Trustee and the
Indenture Trustee at the earliest practicable time (and, if such communication
is not in writing, shall be confirmed in writing at the earliest practicable
time) and any such determination shall be evidenced by an Opinion of Counsel to
such effect delivered to the Eligible Lender Trustee and the Indenture Trustee
concurrently with or promptly after such notice. No such resignation shall
become effective until the Indenture Trustee or a successor Administrator shall
have assumed the responsibilities and obligations of Signet Bank in accordance
with Section 13.
28. Limitation of Liability of Eligible Lender Trustee and
Indenture Trustee. (a) Notwithstanding anything contained herein to the
contrary, this instrument has been countersigned by The First National Bank of
Chicago not in its individual capacity but solely in its capacity as Eligible
Lender Trustee of the Issuer and in no event shall The First National Bank of
Chicago in its individual capacity or any Owner of the Issuer have any liability
for the representations, warranties, covenants, agreements or other obligations
of the Issuer hereunder, as to all of which recourse shall be had solely to the
assets of the Issuer. For all purposes of this Agreement, in the performance of
any duties or obligations of the Issuer thereunder, the Eligible Lender Trustee
shall be subject to, and entitled to the benefits of, the terms and provisions
of Articles VI, VII and VIII of the Trust Agreement.
(b) Notwithstanding anything contained herein to the contrary,
this Agreement has been countersigned by The Bank of New York not in its
individual capacity but solely as Indenture Trustee and in no event shall The
Bank of New York have any liability for the representations, warranties,
covenants, agreements or other obligations of the Issuer hereunder or in any of
the certificates, notices or agreements delivered pursuant hereto, as to all of
which recourse shall be had solely to the assets of the Issuer.
29. Insolvency of Company. (a) Upon any sale of the assets
of the Trust pursuant to Section 9.02 of the Trust Agreement, the Indenture
Trustee shall deposit the net proceeds from such sale after all payments and
reserves therefrom (including
33
<PAGE>
the expenses of such sale) have been made (the "Insolvency Proceeds") in the
Collection Account. On the Distribution Date on, or, if such proceeds are not so
deposited on a Distribution Date, on the first Distribution Date following the
date on which the Insolvency Proceeds are deposited in the Collection Account,
the Administrator shall instruct the Indenture Trustee to make the following
distributions (after the application on such Distribution Date of the amount of
Available Funds and amounts on deposit in the Reserve Account pursuant to
Sections 2(d) and 2(e)) from the Insolvency Proceeds and any funds remaining on
deposit in the Reserve Account (including the proceeds of any sale of
investments therein as described in the following sentence):
(i) to the Noteholders, any portion of the Noteholders'
Interest Distribution Amount not otherwise distributed to the
Noteholders on such Distribution Date;
(ii) to the Certificateholders, any portion of the
Certificateholders' Interest Distribution Amount not otherwise
distributed to the Certificateholders on such Distribution Date;
(iii) to the Noteholders, the outstanding principal
balance of the Notes (after giving effect to the reduction in the
outstanding principal balance of the Notes to result from the
distributions to Noteholders on such Distribution Date and on prior
Distribution Dates), pro rata based on such outstanding principal
balance;
(iv) to the Certificateholders, the Certificate Balance
(after giving effect to the reduction in the Certificate Balance to
result from the distributions to Certificateholders on such
Distribution Date);
(v) to the Noteholders, any unpaid Noteholders'
Interest LIBOR Carryover not otherwise distributed to the Noteholders
on such Distribution Date; and
(vi) to the Certificateholders, any unpaid
Certificateholders' Interest LIBOR Carryover not otherwise distributed
to the Certificateholders on such Distribution Date.
Any investments on deposit in the Reserve Account which will not mature on or
before such Distribution Date shall be sold by the Indenture Trustee at such
time as will result in the Indenture Trustee receiving the proceeds from such
sale not later than the Business Day preceding such Distribution Date. Any
Insolvency
34
<PAGE>
Proceeds remaining after the deposits described above shall be paid 99% to the
Seller and 1% to the Company.
(b) As described in Article IX of the Trust Agreement, notice
of any termination of the Trust shall be given by the Administrator to the
Eligible Lender Trustee and the Indenture Trustee as soon as practicable after
the Administrator has received notice thereof.
30. Third-Party Beneficiaries. The Eligible Lender Trustee is
a third party beneficiary to this Agreement and is entitled to the rights and
benefits hereunder and may enforce the provisions hereof as if it were a party
hereto.
31. Confidentiality. (a) The Indenture Trustee and its
agents, representatives or employees shall at all times maintain the
confidentiality of all Confidential Information and shall not, without the prior
written consent of the Administrator, disclose to third parties (including
Noteholders or Certificateholders) or use such information, in any manner
whatsoever, in whole or in part, except as expressly permitted under this
Agreement or as required to fulfill an obligation of the Indenture Trustee under
this Agreement, in which case such Confidential Information shall be revealed
only to the extent required for the purpose of fulfilling an obligation of the
required for the purpose of fulfilling an obligation of the Indenture Trustee
under this Agreement. Notwithstanding the above, Confidential Information may be
disclosed to the extent required by law or legal process, provided that the
Indenture Trustee gives prompt written notice to the Administrator of the nature
and scope of such disclosure.
(b) Notwithstanding anything in this Agreement to the
contrary, the Administrator shall not be obligated to disclose to any Person (i)
any information regarding Obligors, the disclosure of which is prohibited by
applicable law, or (ii) any information relating to the strategic plans or
opportunities of its student lending business.
35
<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.
SIGNET STUDENT LOAN TRUST 1996-A,
by THE FIRST NATIONAL BANK OF
CHICAGO, not in its individual
capacity but solely as Eligible
Lender Trustee,
by /s/ BARBARA G. GROSSE
---------------------------
Name: BARBARA G. GROSSE
Title: ASSISTANT VICE PRESIDENT
THE BANK OF NEW YORK, not in its
individual capacity but solely as
Indenture Trustee,
by /s/ CHERYL L. LASER
---------------------------
Name: CHERYL L. LASER
Title: ASSISTANT VICE PRESIDENT
SIGNET BANK,
as Administrator,
by /s/ SUZANNE BACHMAN
---------------------------
Name: SUZANNE BACHMAN
Title: SR. VICE PRESIDENT
36
<PAGE>
EXHIBIT A TO THE
ADMINISTRATION AGREEMENT
POWER OF ATTORNEY
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK)
KNOW ALL MEN BY THESE PRESENTS, that The First National Bank of
Chicago, a national bank, not in its individual capacity but solely as eligible
lender trustee ("Eligible Lender Trustee") for the Signet Student Loan Trust
1996-A (the "Trust"), does hereby make, constitute and appoint Signet Bank, as
Administrator under the Administration Agreement (as defined below), and its
agents and attorneys, as Agents and Attorneys-in-Fact to execute on behalf of
Eligible Lender Trustee or the Trust all such documents, reports, filings,
instruments, certificates and opinions as it should be the duty of Eligible
Lender Trustee or the Trust to prepare, file or deliver pursuant to the Related
Agreements (as defined in the Administration Agreement) or pursuant to Section
5.05(a), (b), (c) or (d) of the Trust Agreement (as defined in the
Administration Agreement), including without limitation, to appear for and
represent Eligible Lender Trustee and the Trust in connection with the
preparation, filing and audit of federal, state and local tax returns pertaining
to the Trust, and with full power to perform any and all acts associated with
such returns and audits that the Eligible Lender Trustee could perform,
including without limitation, the right to distribute and receive confidential
information, defend and assert positions in response to audits, initiate and
defend litigation, and to execute waivers of restriction on assessments of
deficiencies, consents to the extension of any statutory or regulatory time
limit, and settlements. For the purpose of this Power of Attorney, the term
"Administration Agreement" means the Administration Agreement dated as of
November 1, 1996, among the Trust, Signet Bank, as Administrator, and The Bank
of New York, as Indenture Trustee, as such may be amended from time to time.
All powers of attorney for this purpose heretofore filed or executed by
Eligible Lender Trustee are hereby revoked.
<PAGE>
EXECUTED as of the first day of [ ], 1996.
THE FIRST NATIONAL BANK OF CHICAGO,
not in its individual capacity but
solely as Eligible Lender Trustee
by
-----------------------------
Name:
Title:
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
Before me, the undersigned authority, on this day personally
appeared [ ] known to me to be the person whose name is subscribed to the
foregoing instrument, and acknowledged to me that such person signed the same
for the purposes and considerations therein expressed.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this [ ] day
of [ ], 1996.
----------------------------------
Notary Public in and for the
State of New York
----------------------------------
Printed Name of Notary Public
Commission Expires
-----------------------------------
A-2
<PAGE>
EXHIBIT B
TO THE
ADMINISTRATION AGREEMENT
Form of Noteholders' Statement pursuant to Section 2(g) of Administration
Agreement (capitalized terms used herein are defined in Appendix A thereto)
Distribution Date:
(i) Amount of principal being paid or distributed:
(a) Class A-1 Notes:__________ ($_______ per $1,000
original principal
amount of Class A-1
Notes)
(b) Class A-2 Notes:__________ ($_______ per $1,000
original principal
amount of Class A-2
Notes)
Distribution Date and last two Interest Payment Dates:
(ii) Amount of interest being paid or distributed:
(a) Class A-1 Notes:__________ ($_______ per $1,000
original principal
amount of Class A-1
Notes)
(b) Class A-2 Notes:__________ ($_______ per $1,000
original principal
amount of Class A-2
Notes)
Distribution Date:
(iii) Amount of Noteholders' Interest LIBOR Carryover being paid or
distributed (if any) and amount remaining (if any):
(a) Class A-1 Notes:
(1) Distributed:__________ ($_______ per $1,000
original principal
amount of Class A-1
Notes)
<PAGE>
(2) Balance:______________ ($_______ per $1,000
original) principal
amount of Class A-1
Notes)
(b) Class A-2 Notes:
(1) Distributed:__________ ($_______ per $1,000
original principal
amount of Class A-2
Notes)
(2) Balance:______________ ($_______ per $1,000
original principal
amount of Class A-2
Notes)
(iv) Pool Balance at end of related Collection Period:
----------
(v) After giving effect to distributions on this
Distribution Date:
(a) (1) outstanding principal amount of Class A-1
Notes:__________
(2) Class A-1 Note Pool Factor:__________
(b) (1) outstanding principal amount of Class A-2
Notes:__________
(2) Class A-2 Note Pool Factor:__________
(c) (1) Certificate Balance:_________________
(2) Certificate Pool Factor:______________
(vi) Applicable Interest Rate:
(a) In general:
(1) LIBOR for each of the Interest Payment Dates
since the previous Distribution Date was
_____%, _____% and _____%; and
(2) the Student Loan Rate was _____%.
(b) Class A-1 Rate:_____% (based on [LIBOR]
[Student Loan Rate])
(c) Class A-2 Rate:_____% (based on [LIBOR]
[Student Loan Rate])
B-2
<PAGE>
(vii) Amount of Servicing Fee for related Collection Period:
__________ ($________ per $1,000 original principal
amount of Notes)
(viii) Amount of Administration Fee for related Collection
Period:__________ ($_______ per $1,000 original
principal amount of Notes)
(ix) Aggregate amount of Realized Losses (if any) for the
related Collection Period:__________
(x) Financed Student Loans delinquent at end of related
Collection Period: __________; number of delinquent
loans: ________; aggregate unpaid principal balance of
delinquent loans: ___________________
(xi) Withdrawal from Reserve Account on related Distribution
Date: _______________
(xii) Withdrawal from Pre-Funding Account during related
Collection Period: __________
(xiii) Amount in the Reserve Account (after giving effect to
(xi)):__________
(xiv) Amount in the Pre-Funding Account (after giving effect
to (xii)):__________
(xv) Additional Student Loans: _______ loans with aggregate
principal balance of $_______ were acquired during the
related Collection Period; withdrawal from Pre-funding
Account to fund the purchase of Additional Student
Loans during the related Collection Period:
$______.
B-3
<PAGE>
EXHIBIT C
TO THE
ADMINISTRATION AGREEMENT
Form of Certificateholders' Statement pursuant to Section 2(g) of Administration
Agreement (capitalized terms used herein are defined in Appendix A thereto)
Distribution Date:__________
(i) Amount of principal being paid or distributed in
respect of the Certificates:_______ ($_______ per $1,000
original principal
amount of the
Certificates)(1)
(ii) Amount of interest being paid or distributed in respect
of the Certificates on this Distribution Date and each
of last two Interest Payment Dates:_____________ ($______ per $1,000
original principal
amount of
Certificates)
(iii) Amount of Certificateholders' Interest LIBOR Carryover being
paid or distributed (if any) and amount remaining (if any):
(1) Distributed:__________ ($_______ per $1,000
original principal
amount of
Certificates)
(2) Balance:__________ ($ ______ per $1,000
original principal
amount of
Certificates)
(iv) Pool Balance at end of related Collection Period:
________________________________________________
(v) After giving effect to distributions on this
Distribution Date:
- --------
(1) Only after the Notes have been paid in full.
<PAGE>
(a) (1) outstanding principal amount of Class A-1
Notes:__________
(2) Class A-1 Note Pool Factor:__________
(b) (1) outstanding principal amount of Class A-2
Notes:__________
(2) Class A-2 Note Pool Factor:__________
(c) (1) Certificate Balance:__________
(2) Certificate Pool Factor:__________
(vi) Applicable Interest Rate:
(a) In general:
(1) LIBOR for each of the three Interest Payment
Dates since the previous Distribution Date
was _____%, _____% and _____%; and
(2) the Student Loan Rate was _____%.
(b) Certificate Rate:_____% (based on [LIBOR]
[Student Loan Rate])
(vii) Amount of Servicing Fee for related Monthly Collection
Period: __________ ($_______ per $1,000 original
principal amount of Certificates)
(viii) Amount of Administration Fee for related Monthly
Collection Period:__________ ($_______ per $1,000
original principal amount of Certificates)
(ix) Aggregate amount of Realized Losses (if any) for the
related Collection Period:__________
(x) Financed Student Loans delinquent at end of related
Collection Period: __________; number of delinquent
loans: ________; aggregate unpaid principal balance of
delinquent loans: ___________________
(xi) Withdrawal from Reserve Account on related Distribution
Date: _______________
(xii) Withdrawal from Pre-Funding Account during related
Monthly Collection Period: __________
(xiii) Amount in the Reserve Account (after giving effect to
(xi)):__________
(xiv) Additional Student Loans: _______ loans with aggregate
principal balance of $_______ were originated during
C-2
<PAGE>
the related Collection Period; withdrawal from Pre- funding
Account to fund the purchase of Additional Student Loans
during the related Collection Period: $________.
C-3
<PAGE>
APPENDIX A TO THE
ADMINISTRATION AGREEMENT
DEFINITIONS AND USAGE
Usage
The following rules of construction and usage shall be
applicable to any instrument that is governed by this Appendix:
(a) All terms defined in this Appendix shall have the defined
meanings when used in any instrument governed hereby and in any certificate or
other document made or delivered pursuant thereto unless otherwise defined
therein.
(b) As used herein, in any instrument governed hereby and in
any certificate or other document made or delivered pursuant thereto, accounting
terms not defined in this Appendix or in any such instrument, certificate or
other document, and accounting terms partly defined in this Appendix or in any
such instrument, certificate or other document to the extent not defined, shall
have the respective meanings given to them under generally accepted accounting
principles as in effect on the date of such instrument. To the extent that the
definitions of accounting terms in this Appendix or in any such instrument,
certificate or other document are inconsistent with the meanings of such terms
under generally accepted accounting principles, the definitions contained in
this Appendix or in any such instrument, certificate or other document shall
control.
(c) The words "hereof", "herein", "hereunder" and words of
similar import when used in an instrument refer to such instrument as a whole
and not to any particular provision or subdivision thereof; references in an
instrument to "Article", "Section" or another subdivision or to an attachment
are, unless the context otherwise requires, to an article, section or
subdivision of or an attachment to such instrument; and the term "including"
means "including without limitation".
(d) The definitions contained in this Appendix are equally
applicable to both the singular and plural forms of such terms and to the
masculine as well as to the feminine and neuter genders of such terms.
(e) Any agreement, instrument, statute, rule, regulation or
interpretation defined or referred to below or in any agreement or instrument
that is governed by this Appendix means such agreement, instrument, statute,
rule, regulation or
<PAGE>
interpretation as from time to time amended, modified or supplemented, including
(in the case of agreements or instruments) by waiver or consent and (in the case
of statutes) by succession of comparable successor statutes and includes (in the
case of agreements or instruments) references to all attachments thereto and
instruments incorporated therein. References to a Person are also to its
permitted successors and assigns.
Definitions
"Act" has the meaning specified in Section 11.03(a) of
the Indenture.
"Additional Fundings" means any withdrawals from the
Pre-Funding Account for any of the purposes set forth in Section 2(f) of the
Administration Agreement.
"Additional Student Loans" means the Serial Loans originated
or acquired by the Seller to a Borrower who has one or more existing loans that
are Financed Student Loans and are transferred or to be transferred to the
Eligible Lender Trustee on behalf of the Issuer pursuant to Section 2.02 of the
Loan Sale Agreement, each of which shall be identified on Schedule A to the
related Transfer Agreement.
"Administration Agreement" means the Administration Agreement
dated as of November 1, 1996, among the Issuer, the Administrator and the
Indenture Trustee.
"Administration Fee" means, with respect to each month, an
amount payable on each Interest Payment Date equal to one-twelfth of the product
of (i) 0.04% and (ii) the sum of the Pool Balance as of the close of business on
the last day of the preceding calendar month.
"Administrator" means Signet, in its capacity as
administrator of the Issuer and the Financed Student Loans.
"Administrator Default" shall have the meaning set forth in
Section 12 of the Administration Agreement.
"Administrator Deposit Condition" means that, with respect to
any Monthly Collection Period, each of the following conditions shall be
satisfied throughout such period: (i) Signet shall continue to be the
Administrator; (ii) no Administrator Default shall have occurred and be
continuing; and (iii) each Rating Agency shall have previously affirmed in
writing that the administering of collections on the Financed Student Loans as
provided in Section 2(i) of the Administration Agreement shall not result in the
withdrawal or downgrading of any of the initial
2
<PAGE>
ratings of the Notes or Certificates and no Rating Agency shall have given
written notice to the contrary or if any Rating Agency shall have set forth any
conditions for so administering such collections that are not otherwise provided
for in the Administrator's duties such conditions shall have been added to the
Administrator's duties pursuant to an amendment of the Administration Agreement.
"Administrator's Certificate" means a statement of the
Administrator delivered pursuant to Section 2(g) of the Administration
Agreement, substantially in the form of Exhibit B or C thereto.
"Affiliate" means, with respect to any specified Person, any
other Person controlling or controlled by or under common control with such
specified Person. For the purposes of this definition, "control" when used with
respect to any specified Person means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Authorized Officer" means (i) with respect to the Issuer, any
officer of the Eligible Lender Trustee who is authorized to act for the Eligible
Lender Trustee in matters relating to the Issuer pursuant to the Basic Documents
and who is identified on the list of Authorized Officers delivered by the
Eligible Lender Trustee to the Indenture Trustee on the Closing Date (as such
list may be modified or supplemented from time to time thereafter) and (ii) with
respect to the Seller, the Master Servicer and the Administrator, any officer of
the Seller, the Master Servicer or the Administrator, respectively, who is
authorized to act for the Seller, the Master Servicer or the Administrator,
respectively, in matters relating to itself or to the Issuer and to be acted
upon by the Seller, the Master Servicer or the Administrator, respectively,
pursuant to the Basic Documents and who is identified on the list of Authorized
Officers delivered by the Seller, the Master Servicer and the Administrator,
respectively, to the Indenture Trustee on the Closing Date (as such list may be
modified or supplemented from time to time thereafter).
"Available Funds" means, with respect to a Distribution Date
and the related Collection Period, the sum of the amounts specified in clauses
(i)-(vii) of the definition of Monthly Available Funds for each of the three
Monthly Collection Periods included in such Collection Period; provided,
however, that if with respect to any Distribution Date there would not be
sufficient funds, after application of Available Funds (as defined above) and
amounts available from the Reserve Account, to pay any of the items specified in
clauses (iv)(A) through (iv)(F)
3
<PAGE>
of Section 2(d) of the Administration Agreement, then Available Funds for such
Distribution Date will include, in addition to the Available Funds (as defined
above), amounts on deposit in the Collection Account on the Determination Date
relating to such Distribution Date which would have constituted Available Funds
for the Distribution Date succeeding such Distribution Date up to the amount
necessary to pay such items, and the Available Funds for such succeeding
Distribution Date will be adjusted accordingly; and provided, further, that
Available Funds will exclude (A) all payments and proceeds (including
Liquidation Proceeds) of any Financed Student Loans the Purchase Amount of which
has been included in Available Funds for a prior Collection Period; (B) except
as expressly included in clause (iv) of the definition of Monthly Available
Funds, amounts released from the Pre-Funding Account; (C) any Monthly Rebate
Fees paid and other amounts required by the Higher Education Act to be paid to
the Department or to be repaid to Borrowers, with respect to the Financed
Student Loans paid during the related Collection Period by or on behalf of the
Trust; (D) after the Funding Period, any expenditure of the Net Principal Cash
Flow Amount used to fund the purchase by the Issuer of Additional Student Loans;
and (E) the Servicing Fee and all overdue Servicing Fees, the Administration Fee
and all overdue Administration Fees, the Noteholders' Interest Distribution
Amount and the Certificateholders' Interest Distribution Amount paid on each
Interest Payment Date that is not a Distribution Date during the related
Collection Period.
"Basic Documents" means the Trust Agreement, the
Indenture, the Loan Sale Agreement, the Master Servicing Agreement, the
Administration Agreement, the Certificate Depository Agreement, the Note
Depository Agreement, the Guarantee Agreements and other documents and
certificates delivered in connection with any thereof.
"Benefit Plan" has the meaning specified in Section
3.04 of the Trust Agreement.
"BIF" means the Bank Insurance Fund, as from time to time
constituted, created under the Financial Institutions Reform, Recovery and
Enhancement Act of 1989, or if at any time after the execution of this
instrument the Bank Insurance Fund is not existing and performing duties now
assigned to it, the body performing such duties on such date.
"Book-Entry Certificate" means a beneficial interest in the
Certificates, ownership and transfers of which shall be made through book
entries by a Clearing Agency as described in Section 3.11 of the Trust
Agreement.
"Book-Entry Note" means a beneficial interest in the
Notes, ownership and transfers of which shall be made through
4
<PAGE>
book entries by a Clearing Agency as described in Section 2.10 of
the Indenture.
"Borrower" means an individual who is the maker of a Borrower
Note and who obtains a Student Loan from an "eligible lender" in accordance with
the Higher Education Act and the policies and procedures of the Guarantor.
"Borrower Note" means a promissory note of a Borrower for a
Student Loan set forth on the appropriate form furnished by the Guarantor which
Borrower Note meets the criteria set forth by the Higher Education Act and the
policies and procedures of the Guarantor.
"Business Day" means any day other than a Saturday, a Sunday
or a day on which banking institutions or trust companies in the States of
Illinois, New York or Maryland or the Commonwealth of Virginia are authorized or
obligated by law, regulation or executive order to remain closed.
"Business Trust Statute" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code ss. 3801 et seq., as the same may be amended from
time to time.
"Capitalized Interest Amount" means for any Monthly Collection
Period or other period of determination, the amount of interest that accrued on
the Financed Student Loans during such period but was not then payable and that
has been or will, pursuant to the terms of such Financed Student Loans, be
capitalized and added to the principal balances of such loans.
"Certificate" means a certificate evidencing the beneficial
interest of a Certificateholder in the Trust, substantially in the form of
Exhibit A to the Trust Agreement.
"Certificate Balance" equals, initially, the Initial
Certificate Balance and, thereafter, equals the Initial Certificate Balance
reduced by all amounts previously distributed to Certificateholders in respect
of principal pursuant to Sections 2(d)(iv)(F) and 2(e)(iv)(F) of the
Administration Agreement.
"Certificate of Trust" means the Certificate of Trust in the
form of Exhibit C to the Trust Agreement to be filed for the Trust pursuant to
Section 3810(a) of the Business Trust Statute.
"Certificate Depository Agreement" means the agreement dated
as of the Closing Date among the Trust, the Eligible Lender Trustee, the
Administrator, and The Depository Trust Company, as the initial Clearing Agency,
substantially in the form of Exhibit
B to the Trust Agreement.
5
<PAGE>
"Certificate Owner" or "Owner" means, with respect to a
Book-Entry Certificate, the Person who is the beneficial owner of such
Book-Entry Certificate, as reflected on the books of the Clearing Agency, or on
the books of a Person maintaining an account with such Clearing Agency (directly
as a Clearing Agency Participant or as an indirect participant, in each case in
accordance with the rules of such Clearing Agency).
"Certificate Paying Agent" means any paying agent or co-paying
agent appointed pursuant to Section 3.09 of the Trust Agreement, which shall
initially be Signet Trust Company.
"Certificate Pool Factor" as computed prior to each
Distribution Date means a seven-digit decimal figure equal to the Certificate
Balance as of such Distribution Date divided by the Initial Certificate Balance.
The Certificate Pool Factor will be 1.0000000 as of the Closing Date;
thereafter, the Certificate Pool Factor will decline to reflect reductions in
the Certificate Balance.
"Certificate Rate" means, with respect to any Interest Period,
the interest rate per annum (computed on the basis of the actual number of days
elapsed in such Interest Period over a year of 360 days) equal to the lesser of
(i) LIBOR for the related LIBOR Reset Period plus 0.45% and (ii) the Student
Loan Rate for such Interest Period.
"Certificate Register" and "Certificate Registrar" means the
register mentioned and the registrar appointed pursuant to Section 3.04 of the
Trust Agreement.
"Certificateholder" or "Holder" means a Person in whose name a
Certificate is registered in the Certificate Register.
"Certificateholders' Distribution Amount" means, with respect
to any Distribution Date, the Certificateholders' Interest Distribution Amount
for such Distribution Date plus, for each Distribution Date on and after which
the Notes have been paid in full, the Certificateholders' Principal Distribution
Amount for such Distribution Date.
"Certificateholders' Interest Carryover Shortfall" means, with
respect to any Interest Payment Date, the excess of (i) the Certificateholders'
Interest Distribution Amount on the preceding Interest Payment Date over (ii)
the amount of interest actually distributed to the Certificateholders on such
preceding Interest Payment Date, plus interest on the amount of such excess, to
the extent permitted by law, at the Certificate Rate from such preceding
Interest Payment Date to the current Interest Payment Date.
6
<PAGE>
"Certificateholders' Interest Distribution Amount" means, with
respect to any Interest Payment Date, the sum of (i) the amount of interest
accrued at the Certificate Rate for the related Interest Period on the
outstanding Certificate Balance on the immediately preceding Distribution Date,
after giving effect to all distributions of principal to Certificateholders on
such Distribution Date (or, in the case of the first three Interest Payment
Dates and the first Distribution Date, on the Closing Date) and (ii) the
Certificateholders' Interest Carryover Shortfall for such Interest Payment Date;
provided, however, that the Certificateholders' Interest Distribution Amount
will not include any Certificateholders' Interest LIBOR Carryover.
"Certificateholders' Interest LIBOR Carryover" means, with
respect to each Distribution Date, and with respect to each Interest Period, if
any, since the preceding Distribution Date as to which the Certificate Rate for
such Interest Period was based on the Student Loan Rate, the amount equal to the
excess, if any, of (a) the amount of interest on the Certificates that would
have accrued in respect of each related Interest Period had interest been
calculated based on LIBOR over (b) the amount of interest on the Certificates
actually accrued in respect of such Interest Period based on the Student Loan
Rate, together with the unpaid portion of any such excess from prior
Distribution Dates (and interest accrued thereon, to the extent permitted by
law, calculated based on LIBOR); provided, however, that, on the Final Maturity
Date, the Certificateholders' Interest LIBOR Carryover will be equal to the
lesser of (i) the Certificateholders' Interest LIBOR Carryover on such date
determined as described above and (ii) the amount of funds, if any, required and
available to be distributed to Certificateholders on such date pursuant to
Section 2(e)(ii)(C) and 2(e)(iii) of the Administration Agreement.
"Certificateholders' Principal Carryover Shortfall" means, as
of the close of any Distribution Date on or after which the Notes have been paid
in full, the excess of (i) the Certificateholders' Principal Distribution Amount
on such Distribution Date over (ii) the amount of principal actually distributed
to the Certificateholders on such Distribution Date.
"Certificateholders' Principal Distribution Amount" means, on
each Distribution Date on and after which the principal balance of the Notes has
been paid in full, the sum of (a) the Principal Distribution Amount for such
Distribution Date (or, in the case of the Distribution Date on which the
principal balance of the Notes is paid in full, any remaining Principal
Distribution Amount not otherwise distributed to Noteholders on such
Distribution Date) and (b) the Certificateholders' Principal Carryover Shortfall
as of the close of the preceding Distribution Date; provided, however, that the
Certificateholders' Principal
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Distribution Amount will in no event exceed the Certificate Balance. In
addition, on the Final Maturity Date, the principal required to be distributed
to the Certificateholders will include the amount required to reduce the
outstanding principal balance of the Certificates to zero.
"Class A-1 Final Maturity Date" means the January 2005
Distribution Date.
"Class A-1 Note" means a Floating Rate Class A-1 Asset Backed
Note issued pursuant to the Indenture, substantially in the form of Exhibit A
thereto.
"Class A-1 Note Pool Factor" as computed prior to each
Distribution Date means a seven-digit decimal figure equal to the outstanding
principal balance of the Class A-1 Notes as of such Distribution Date divided by
the original outstanding principal balance of the Class A-1 Notes. The Class A-1
Note Pool Factor will be 1.0000000 as of the Closing Date; thereafter, the Class
A-1 Note Pool Factor will decline to reflect reductions in the outstanding
principal balance of the Class A-1 Notes.
"Class A-1 Noteholder" means the Person in whose name a Class
A-1 Note is registered in the Note Register.
"Class A-1 Rate" means, with respect to any Interest Period,
the interest rate per annum (computed on the basis of the actual number of days
in such Interest Period over a year of 360 days) equal to the lesser of (i)
LIBOR for the related LIBOR Reset Period plus 0.09% and (ii) the Student Loan
Rate for such Interest Period.
"Class A-2 Final Maturity Date" means the April 2016
Distribution Date.
"Class A-2 Note" means a Floating Rate Class A-2 Asset Backed
Note issued pursuant to the Indenture, substantially in the form of Exhibit B
thereto.
"Class A-2 Note Pool Factor" as computed prior to each
Distribution Date means a seven-digit decimal figure equal to the outstanding
principal balance of the Class A-2 Notes as of such Distribution Date divided by
the original outstanding principal balance of the Class A-2 Notes. The Class A-2
Note Pool Factor will be 1.0000000 as of the Closing Date; thereafter the Class
A-2 Note Pool Factor will decline to reflect reductions in the outstanding
principal balance of the Class A-2 Notes.
"Class A-2 Noteholder" means the Person in whose name a Class
A-2 Note is registered in the Note Register.
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"Class A-2 Rate" means, with respect to any Interest Period,
the interest rate per annum (computed on the basis of the actual number of days
in such Interest Period over a year of 360 days) equal to the lesser of (i)
LIBOR for the related LIBOR Reset Period plus 0.15% and (ii) the Student Loan
Rate for such Interest Period.
"Clearing Agency" means an organization registered as a
"clearing agency" pursuant to Section 17A of the Exchange Act.
"Clearing Agency Participant" means a broker, dealer, bank,
other financial institution or other Person for whom from time to time a
Clearing Agency effects book-entry transfers and pledges of securities deposited
with the Clearing Agency.
"Closing Date" means December 27, 1996.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, and Treasury Regulations promulgated thereunder.
"Collateral" has the meaning specified in the Granting Clause
of the Indenture.
"Collection Account" means the account designated as such,
established and maintained pursuant to Section 2(c) of the Administration
Agreement.
"Collection Period" means, with respect to the first
Distribution Date, the period beginning on the Cutoff Date and ending on March
31, 1997, and with respect to each subsequent Distribution Date, the Collection
Period means the three calendar months immediately following the end of the
previous Collection Period.
"Commission" means the Securities and Exchange Commission.
"Company" means Signet Student Loan Corporation, a Virginia
corporation.
"Confidential Information" means information provided by
Signet to the Eligible Lender Trustee or the Indenture Trustee related to the
transactions effected under the Basic Documents and any computer software
provided to the Eligible Lender Trustee or the Indenture Trustee in connection
with the transactions effected under the Basic Documents, in each case whether
in the form of documents, reports, lists, tapes, discs or any other form.
"Consolidation Loan" means a Student Loan made pursuant to the
Higher Education Act to consolidate the Borrower's
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obligations under various federally authorized student loan programs into a
single loan.
"Corporate Trust Office" means (i) with respect to the
Indenture Trustee, the principal office of the Indenture Trustee at which at any
particular time its corporate trust business shall be administered, which office
at the Closing Date is located at 101 Barclay Street, New York, New York 10286,
Attention: Asset Backed Finance Unit (telephone: (212) 815- 5286; facsimile:
(212) 815-5544); 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 One First National Plaza, Suite
0126, Chicago, Illinois 60670-0126, Attention: Corporate Trust Administration
(telephone: (312) 407-1892; facsimile: (312) 407-1708); or at such other address
as the Eligible Lender Trustee may designate by notice to the Certificateholders
and the Seller, or the principal corporate trust office of any successor
Eligible Lender Trustee (the address of which the successor Eligible Lender
Trustee will notify the Certificateholders and the Seller).
"Custodian" means Signet, in its capacity as custodian of the
Borrower Notes or any permitted successor Custodian.
"Cutoff Date" means November 1, 1996.
"Default" means any occurrence that is, or with notice or the
lapse of time or both would become, an Event of Default.
"Deferral" means the period defined by the Higher Education
Act and the policies of the Guarantor during which a Borrower (in Repayment) is
entitled to postpone making payments upon the submission of appropriate
documentation.
"Deferral Loan" means a Student Loan during a period of
Deferral.
"Definitive Certificates" has the meaning specified in
Section 3.11 of the Trust Agreement.
"Definitive Notes" has the meaning specified in Section
2.10 of the Indenture.
"Delaware Trustee" has the meaning set forth in Section
10.01 of the Trust Agreement.
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"Delivery" when used with respect to Trust Account Property
means:
(a) with respect to bankers' acceptances, commercial paper,
negotiable certificates of deposit and other obligations that
constitute "instruments" within the meaning of Section 9-105(1)(i) of
the UCC and are susceptible of physical delivery, transfer thereof to
the Indenture Trustee or its nominee or custodian by physical delivery
to the Indenture Trustee or its nominee or custodian endorsed to, or
registered in the name of, the Indenture Trustee or its nominee or
custodian or endorsed in blank, and, with respect to a certificated
security (as defined in Section 8-102 of the UCC) transfer thereof (i)
by delivery of such certificated security endorsed to, or registered in
the name of, the Indenture Trustee or its nominee or custodian or
endorsed in blank to a financial intermediary (as defined in Section
8-313) of the UCC) and the making by such financial intermediary of
entries on its books and records identifying such certificated
securities as belonging to the Indenture Trustee or its nominee or
custodian and the sending by such financial intermediary of a
confirmation of the purchase of such certificated security by the
Indenture Trustee or its nominee or custodian, or (ii) by delivery
thereof to a "clearing corporation" (as defined in Section 8-102(3) of
the UCC) and the making by such clearing corporation of appropriate
entries on its books reducing the appropriate securities account of the
transferor and increasing the appropriate securities account of a
financial intermediary by the amount of such certificated security, the
identification by the clearing corporation of the certificated
securities for the sole and exclusive account of the financial
intermediary, the maintenance of such certificated securities by such
clearing corporation or a "custodian bank" (as defined in Section
8-102(4) of the UCC) or the nominee of either subject to the clearing
corporation's exclusive control, the sending of a confirmation by the
financial intermediary of the purchase by the Indenture Trustee or its
nominee or custodian of such securities and the making by such
financial intermediary of entries on its books and records identifying
such certificated securities as belonging to the Indenture Trustee or
its nominee or custodian (all of the foregoing, "Physical Property"),
and, in any event, any such Physical Property in registered form shall
be in the name of the Indenture Trustee or its nominee or custodian;
and such additional or alternative procedures as may hereafter become
appropriate to effect the complete transfer of ownership of any such
Trust Account Property to the Indenture Trustee or its nominee or
custodian, consistent with changes in applicable law or regulations or
the interpretation thereof;
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(b) with respect to any securities issued by the U.S.
Treasury, the Federal Home Loan Mortgage Corporation or by the Federal
National Mortgage Association that is a book-entry security held
through the Federal Reserve System pursuant to Federal book-entry
regulations, the following procedures, all in accordance with
applicable law, including applicable Federal regulations and Articles 8
and 9 of the UCC: book-entry registration of such Trust Account
Property to an appropriate book-entry account maintained with a Federal
Reserve Bank by a financial intermediary which is also a "depository"
pursuant to applicable Federal regulations and issuance by such
financial intermediary of a deposit advice or other written
confirmation of such book-entry registration to the Indenture Trustee
or its nominee or custodian of the purchase by the Indenture Trustee or
its nominee or custodian of such book-entry securities; the making by
such financial intermediary of entries in its books and records
identifying such book-entry security held through the Federal Reserve
System pursuant to Federal book-entry regulations as belonging to the
Indenture Trustee or its nominee or custodian and indicating that such
custodian holds such Trust Account Property solely as agent for the
Indenture Trustee or its nominee or custodian; and such additional or
alternative procedures as may hereafter become appropriate to effect
complete transfer of ownership of any such Trust Account Property to
the Indenture Trustee or its nominee or custodian, consistent with
changes in applicable law or regulations or the interpretation thereof;
and
(c) with respect to any item of Trust Account Property that is
an uncertificated security under Article 8 of the UCC and that is not
governed by clause (b) above, registration on the books and records of
the issuer thereof in the name of the financial intermediary, the
sending of a confirmation by the financial intermediary of the purchase
by the Indenture Trustee or its nominee or custodian of such
uncertificated security, the making by such financial intermediary of
entries on its books and records identifying such uncertificated
certificates as belonging to the Indenture Trustee or its nominee or
custodian.
"Demand Note" means the Demand Note dated December 27, 1996
from Signet Banking Corporation to the Company.
"Department" means the United States Department of Education,
an agency of the Federal government.
"Depositor" means the Seller in its capacity as Depositor
under the Trust Agreement.
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"Depository Agreement" means, collectively, the agreements
with respect to the Notes attached to the Indenture as Exhibits C and D and the
agreement with respect to the Certificates attached to the Trust Agreement as
Exhibit B.
"Determination Date" means, with respect to any Interest
Payment Date or Distribution Date, the third Business Day preceding such
Interest Payment Date or Distribution Date.
"Distribution Date" means, with respect to each Collection
Period, the twenty-fifth day of each January, April, July, and October, or, if
such day is not a Business Day, the immediately following Business Day,
commencing on April 25, 1997.
"Educational Institution" means any institution of higher
education that participates in the guaranteed loan programs authorized by Title
IV of the Higher Education Act and which is deemed eligible by the Guarantor to
participate in Guarantor's program.
"Eligible Deposit Account" means an account that is: (i) a
separately identifiable deposit account established and maintained in the
deposit taking department of a depository institution organized under the laws
of the United States of America or one of the states thereof or incorporated
under the laws of a foreign jurisdiction with a branch or agency located in the
United States of America or one of the states thereof and subject to supervision
and examination by Federal or state banking authorities that at all times has a
short-term certificate of deposit rating of "P-1" by Moody's, "A-1+" by Standard
& Poor's and (if rated by Fitch) "F-1+" by Fitch and a long-term unsecured debt
rating of not less than "AA" by Standard & Poor's, "Aa3" by Moody's and (if
rated by Fitch) "AA" by Fitch and, in the case of any such institution organized
under the laws of the United States of America, whose deposits are insured by
the BIF, (ii) a segregated identifiable trust account established and maintained
in the trust department of a trust institution organized under the laws of the
United States of America or one of the states thereof or incorporated under the
laws of a foreign jurisdiction with a branch or agency located in the United
States of America or one of the states thereof and subject to supervision and
examination by Federal or state banking authorities that at all times is
authorized under such laws to act as a trustee or in any other fiduciary
capacity, has not less than $50,000,000 capital and surplus and has a long-term
deposit rating of not less than "BBB-" by Standard & Poor's, "Baa3" by Moody's
and (if rated by Fitch) "BBB" by Fitch, (iii) so long as Signet Bank or an
affiliate of Signet Bank is Master Servicer and Signet Bank or such affiliate
has a long-term deposit rating or long-term unsecured debt rating, as
applicable, of at least "Baa3" by Moody's, a segregated identifiable trust
account established and maintained at Signet Trust Company or (iv) an
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account otherwise acceptable to each Rating Agency, as evidenced by a letter
from each Rating Agency to the Indenture Trustee and the Eligible Lender
Trustee, without reduction or withdrawal of the then current ratings of the
Notes or the Certificates.
"Eligible Investments" means one or more of the following
(excluding any callable investments purchased at a premium):
(i) direct obligations of, or obligations fully guaranteed as
to timely payment of principal and interest by, the United States of
America or any agency or instrumentality thereof; provided that such
obligations are backed by the full faith and credit of the United
States of America;
(ii) repurchase agreements on obligations specified in clause
(i) maturing not more than three months from the date of acquisition
thereof; provided that the short-term unsecured debt obligations of the
party agreeing to repurchase such obligations are at the time rated at
least "A-1" by Standard & Poor's, "P-1" by Moody's and (if rated by
Fitch) "F-1+" by Fitch;
(iii) certificates of deposit, time deposits and bankers'
acceptances of any United States depository institution or trust
company incorporated under the laws of the United States or any state
thereof and subject to supervision and examination by Federal and/or
state banking authorities; provided that the unsecured short-term debt
obligations of such depository institution or trust company at the date
of acquisition thereof have been rated at least "A-1" by Standard &
Poor's, "P-1" by Moody's and (if rated by Fitch) "F-1+" by Fitch;
(iv) commercial paper (having original maturities of not more
than 270 days) of any corporation incorporated under the laws of the
United States of America or any state thereof which on the date of
acquisition has been rated at least "A-1" by Standard & Poor's, "P-1"
by Moody's and (if rated by Fitch) "F-1+" by Fitch;
(v) interests in any money market fund which at the date of
acquisition of the interests in such fund and throughout the time such
interests are held in such fund has a rating of "P-1" or "Aaa" by
Moody's, "AAAm" or "AAAm-G" by Standard & Poor's and (if rated by
Fitch) "F-1+" or "AAA" by Fitch or such lower rating as will not result
in the qualification, downgrading or withdrawal of the then-current
rating assigned to the Notes and the Certificates by each Rating
Agency; and
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(vi) other obligations or securities that are acceptable to
each Rating Agency as an Eligible Investment hereunder and will not
result in a reduction in the then-current rating of the Notes and the
Certificates, as evidenced by a letter to such effect from such Rating
Agency, and with respect to which the Administrator has received
confirmation that, for tax purposes, the investment complies with the
provisos to this definition.
"Eligible Lender Trustee" means The First National Bank of
Chicago, a national banking association, not in its individual capacity but
solely as Eligible Lender Trustee under the Trust Agreement.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended.
"Event of Default" has the meaning specified in Section
5.01 of the Indenture.
"Exchange Act" means the Securities Exchange Act of
1934, as amended.
"Executive Officer" means, with respect to any corporation,
the Chief Executive Officer, Chief Operating Officer, Chief Financial Officer,
President, any Executive Vice President, any Senior Vice President, any Vice
President, the Secretary or the Treasurer of such corporation; and with respect
to any partnership, any general partner thereof.
"Expected Interest Collections" means, with respect to any
Interest Period, the sum of (i) the amount of interest accrued, net of accrued
Monthly Rebate Fees with respect to the Financed Student Loans and other amounts
required by the Higher Education Act to be paid to the Department or repaid to
Borrowers for the related Student Loan Rate Accrual Period (whether or not such
interest is actually paid and not taking into account any late fees payable or
paid thereon by the Borrowers), (ii) all Interest Subsidy Payments and Special
Allowance Payments estimated to have accrued for such Student Loan Rate Accrual
Period, whether or not actually received and (iii) Investment Earnings for such
Student Loan Rate Accrual Period.
"Expenses" means any and all liabilities, obligations, losses,
damages, taxes, claims, actions and suits, and any and all reasonable costs,
expenses and disbursements (including reasonable legal fees and expenses) of any
kind and nature whatsoever which may at any time be imposed on, incurred by, or
asserted against the Eligible Lender Trustee or any of its officers, directors
or agents in any way relating to or arising out of the Trust Agreement, the
other Basic Documents, the Trust
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Estate, the administration of the Trust Estate or the action or inaction of the
Eligible Lender Trustee under the Trust Agreement or the other Basic Documents.
"Final Maturity Date" means the July 2017 Distribution Date.
"Financed Student Loans" means those Student Loans that, as of
any date of determination, have been conveyed to the Issuer, consisting of the
Initial Financed Student Loans as of the Closing Date and, thereafter, any
Additional Student Loans conveyed to the Issuer from the Seller.
"Fitch" means Fitch Investors Service, L.P. or any
successor thereto.
"Forbearance" means the period of forbearance of loan
collections on a Student Loan pursuant to the Higher Education Act.
"Forbearance Loan" means a Student Loan during a period
of Forbearance.
"Funding Period" means the period from the Closing Date until
the first to occur of (i) the Distribution Date on which the amount on deposit
in the Pre-Funding Account is less than $100,000, (ii) an Event of Default
occurring under the Indenture, a Servicer Default occurring under the Master
Servicing Agreement or an Administrator Default occurring under the
Administration Agreement, (iii) the date on which an Insolvency Event occurs
with respect to the Seller or (iv) the last day of the Collection Period
preceding the January 1999 Distribution Date.
"Grace" means the initial period following reduction by the
student Borrower to less than the minimum course load required by the Higher
Education Act, during which the student Borrower is not required to make
payments on the principal amount of the Borrower Note(s).
"Grace Loan" means a Student Loan during a period of Grace.
"Grant" means mortgage, pledge, bargain, sell, warrant,
alienate, remise, release, convey, assign, transfer, create, and grant a lien
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
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and receive notices and other communications, to make waivers or other
agreements, to exercise all rights and options, to bring Proceedings in the name
of the Granting party or otherwise and generally to do and receive anything that
the Granting party is or may be entitled to do or receive thereunder or with
respect thereto.
"Guarantee Agreement" means each agreement to guarantee
Student Loans entered into by the Eligible Lender Trustee on behalf of the Trust
with a Guarantor.
"Guarantee Payment" means any payment made by a Guarantor
pursuant to a Guarantee Agreement in respect of a Student Loan.
"Guarantor" means Texas Guaranteed Student Loan
Corporation, United Student Aid Funds or Educational Credit
Management Corporation.
"Higher Education Act" means the Higher Education Act of 1965,
as amended, together with any rules, regulations and interpretations thereunder.
"In-School Loan" means a Student Loan during the period,
excluding periods of in-school Deferral, during which a student Borrower is
enrolled at an Educational Institution for at least the minimum course load
required to maintain such student Borrower's eligibility to borrow under the
education loan programs administered by a Guarantor.
"Incentive Deposit" means, with respect to each Collection
Period and each Incentive Financed Student Loan, (i) the amount of any principal
reduction with respect to such Incentive Financed Student Loan pursuant to an
Incentive Program during such Collection Period (regardless of whether such
principal amounts would have otherwise been payable on such loan during such
Collection Period) plus (ii) the excess, if any, of (x) the amount of interest
or other amounts which would have been payable with respect to such Incentive
Financed Student Loan during such Collection Period had no Incentive Program
been in effect with respect to such Incentive Financed Student Loan (other than
amounts in respect of principal on an Incentive Financed Student Loan for which
an Incentive Deposit is then or has previously been made pursuant to clause (i)
above) over (y) the amount of interest and other amounts which are payable with
respect to such Incentive Financed Student Loan during such Collection Period
after giving effect to such Incentive Program.
"Incentive Financed Student Loan" means a Financed
Student Loan which is subject to an Incentive Program.
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"Incentive Program" means any one or more programs
administered from time to time by the Master Servicer for Student Loans held by
it in its own portfolio pursuant to which the Master Servicer may choose to
reduce the interest rate or offer to a Borrower any other benefit not prohibited
by the Higher Education Act or other applicable law on a Student Loan.
"Indenture" means the Indenture dated as of November 1, 1996,
between the Issuer and the Indenture Trustee.
"Indenture Trust Estate" means all money, instruments, rights
and other property that are subject or intended to be subject to the lien and
security interest of the Indenture for the benefit of the Noteholders (including
all property and interests Granted to the Indenture Trustee), including all
proceeds thereof.
"Indenture Trustee" means The Bank of New York, a New York
banking corporation, not in its individual capacity but solely as Indenture
Trustee under the Indenture.
"Independent" means, when used with respect to any specified
Person, that the Person (a) is in fact independent of the Issuer, any other
obligor upon the Notes, the Seller and any Affiliate of any of the foregoing
Persons, (b) does not have any direct financial interest or any material
indirect financial interest in the Issuer, any such other obligor, the Seller or
any Affiliate of any of the foregoing Persons and (c) is not connected with the
Issuer, any such other obligor, the Seller or any Affiliate of any of the
foregoing Persons as an officer, employee, promoter, underwriter, trustee,
partner, director or person performing similar functions.
"Independent Certificate" means a certificate or opinion to be
delivered to the Indenture Trustee under the circumstances described in, and
otherwise complying with, the applicable requirements of Section 11.01 of the
Indenture, made by an Independent appraiser or other expert appointed by an
Issuer Order and approved by the Indenture Trustee in the exercise of reasonable
care, and such opinion or certificate shall state that the signer has read the
definition of "Independent" in the Indenture and that the signer is Independent
within the meaning thereof.
"Initial Certificate Balance" means $14,996,000.
"Initial Financed Student Loans" means those Financed Student
Loans conveyed to the Issuer on the Closing Date.
"Initial Pre-Funded Amount" means $16,552,201.22.
"Initial Pool Balance" means $404,590,798.78.
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"Insolvency Event" means, with respect to a specified Person,
(a) the filing of a decree or order for relief by a court having jurisdiction in
the premises in respect of such Person or any substantial part of its property
in an involuntary case under any applicable Federal or state bankruptcy,
insolvency or other similar law now or hereafter in effect, or appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official for such Person or for any substantial part of its property, or
ordering the winding-up or liquidation of such Person's affairs, and such decree
or order shall remain unstayed and in effect for a period of sixty consecutive
days; or (b) the commencement by such Person of a voluntary case under any
applicable Federal or state bankruptcy, insolvency or other similar law now or
hereafter in effect, or the consent by such Person to the entry of an order for
relief in an involuntary case under any such law, or the consent by such Person
to the appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official for such Person or for any
substantial part of its property, or the making by such Person of any general
assignment for the benefit of creditors, or the failure by such Person generally
to pay its debts as such debts become due, or the taking of action by such
Person in furtherance of any of the foregoing.
"Interest Payment Date" means the twenty-fifth day of each
month (or, if any such date is not a Business Day, on the next succeeding
Business Day) commencing January 27, 1997.
"Interest Period" means, with respect to an Interest Payment
Date, the period from and including the Closing Date or the most recent Interest
Payment Date on which interest on the Notes or the Certificates, as the case may
be, has been distributed to but excluding the current Interest Payment Date.
"Interest Subsidy Payments" means payments, designated as
such, consisting of interest subsidies by the Department in respect of the
Financed Student Loans to the Eligible Lender Trustee on behalf of the Trust in
accordance with the Higher Education Act.
"Investment Earnings" means, with respect to any Distribution
Date, the investment earnings (net of losses and investment expenses) on amounts
on deposit in the Trust Accounts to be deposited into the Collection Account on
or prior to such Distribution Date pursuant to Section 2(c)(v) of the
Administration Agreement.
"Issuer" means Signet Student Loan Trust 1996-A until a
successor replaces it and, thereafter, means the successor and, for purposes of
any provision contained in the Indenture and required by the TIA, each other
obligor on the Notes.
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"Issuer Order" and "Issuer Request" means a written order or
request signed in the name of the Issuer by any one of its Authorized Officers
and delivered to the Indenture Trustee.
"LIBOR" means, with respect to any LIBOR Reset Period, the
London interbank offered rate for deposits in U.S. dollars having a maturity of
one month commencing on the related LIBOR Determination Date (the "Index
Maturity") which appears on Telerate Page 3750 as of 11:00 a.m., London time, on
such LIBOR Determination Date. If such rate does not appear on Telerate Page
3750, the rate for that day will be determined on the basis of the rates at
which deposits in U.S. dollars, having the Index Maturity and in a principal
amount of not less than U.S. $1,000,000, are offered at approximately 11:00
a.m., London time, on such LIBOR Determination Date to prime banks in the London
interbank market by the Reference Banks. The Administrator will request the
principal London office of each of such Reference Banks to provide a quotation
of its rate. If at least two such quotations are provided, the rate for that day
will be the arithmetic mean of the quotations. If fewer than two quotations are
provided, the rate for that day will be the arithmetic mean of the rates quoted
by major banks in New York City, selected by the Administrator, at approximately
11:00 a.m., New York City time, on such LIBOR Determination Date for loans in
U.S. dollars to leading European banks having the Index Maturity and in a
principal amount equal to an amount of not less than U.S. $1,000,000; provided
that if the banks selected as aforesaid are not quoting as mentioned in this
sentence, LIBOR in effect for the applicable LIBOR Reset Period will be LIBOR in
effect for the previous LIBOR Reset Period.
"LIBOR Determination Date" means, with respect to any LIBOR
Reset Period, the day that is the second business day prior to the commencement
of such LIBOR Reset Period. For purposes of this definition, a business day is
any day in which banks in London and New York City are open for the transaction
of international business.
"LIBOR Reset Period" means the one-month period commencing on
the twenty-fifth day (or, if any such date is not a Business Day, on the next
succeeding business day) of each month and ending on the day immediately
preceding the following LIBOR Reset Period; provided, however, that the initial
LIBOR Reset Period will commence on the Closing Date.
"Lien" means a security interest, lien, charge, pledge, equity
or encumbrance of any kind, other than tax liens and any other liens, if any,
which attach to the respective Student Loan by operation of law as a result of
any act or omission by the related Obligor.
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"Liquidated Student Loan" means any defaulted Financed Student
Loan liquidated by the Master Servicer or any Subservicer or which the Master
Servicer has, after using all reasonable efforts to realize upon the such
Student Loan, determined to charge off.
"Liquidation Proceeds" means, with respect to any Liquidated
Student Loan, the moneys collected in respect thereof from whatever source,
other than Recoveries, net of the sum of any amounts expended by the Master
Servicer or any Subservicer in connection with such liquidation and any amounts
required by law to be remitted to the Obligor on such Liquidated Student Loan.
"Loan Sale Agreement" means the Loan Sale Agreement dated as
of November 1, 1996, among the Issuer, the Seller, and the Eligible Lender
Trustee.
"London Banking Day" means any Business Day on which dealings
in deposits in United States dollars are transacted in the London interbank
market.
"Master Servicer" means Signet, in its capacity as master
servicer of the Financed Student Loans or any permitted Successor Master
Servicer.
"Master Servicing Agreement" means the Master Servicing
Agreement dated as of November 1, 1996, among the Issuer, the Master Servicer
and the Eligible Lender Trustee.
"Minimum Purchase Price" means as to any Distribution Date, an
amount equal to the greater of (i) the Purchase Amounts of the Financed Student
Loans as of the end of the Collection Period immediately preceding such
Distribution Date or (ii) an amount that would be sufficient to (A) reduce the
outstanding principal amount of each class of Notes then outstanding on such
Distribution Date to zero, (B) pay to the Noteholders the Noteholders' Interest
Distribution Amount payable on such Distribution Date, if any, (C) reduce the
Certificate Balance of the Certificates on such Distribution Date to zero, (D)
pay to the Certificateholders the Certificateholders' Interest Distribution
Amount payable on such Distribution Date, (E) pay to the Noteholders the then
outstanding Noteholders' Interest LIBOR Carryover, if any, and (F) pay to the
Certificateholders the then outstanding Certificateholders' Interest LIBOR
Carryover, if any.
"Monthly Available Funds" means, with respect to each Interest
Payment Date that is not a Distribution Date, the sum of the following amounts
with respect to the related Monthly Collection Period: (i) all collections
received by the Master Servicer, or any Subservicer, on the Financed Student
Loans (including any Guarantee Payments received with respect to the Financed
Student Loans); (ii) any Interest Subsidy Payments and
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Special Allowance Payments received by the Eligible Lender Trustee during such
Monthly Collection Period with respect to the Financed Student Loans; (iii) all
Liquidation Proceeds from any Financed Student Loans which became Liquidated
Student Loans during such Monthly Collection Period in accordance with the
Master Servicer's customary servicing procedures, and all Recoveries in respect
of Liquidated Student Loans which were written off in prior Monthly Collection
Periods; (iv) that portion of the amounts released from the Pre-Funding Account
with respect to Additional Fundings relating to those interest costs on the
Financed Student Loans which are or will be capitalized; (v) the aggregate
Purchase Amounts received for those Financed Student Loans repurchased by the
Seller or purchased by the Master Servicer under an obligation which arose
during the related Monthly Collection Period; (vi) Investment Earnings for such
Interest Payment Date; (vii) any Incentive Deposits made by the Seller; and
(viii) with respect to each Interest Payment Date other than a Distribution Date
and other than an Interest Payment Date immediately succeeding a Distribution
Date, Monthly Available Funds remaining from the Monthly Collection Period
relating to the preceding Interest Payment Date, after giving effect to the
application of such Monthly Available Funds on such preceding Interest Payment
Date; provided, however, that if with respect to any Interest Payment Date there
would not be sufficient funds, after application of Monthly Available Funds (as
defined above) and amounts available from the Reserve Account, to pay any of the
items specified in Section 2(d)(iii) of the Administration Agreement, then
Monthly Available Funds for such Interest Payment Date will include, in addition
to the Monthly Available Funds (as defined above), amounts on deposit in the
Collection Account on the Determination Date relating to such Interest Payment
Date which would have constituted Monthly Available Funds for the Interest
Payment Date succeeding such Interest Payment Date up to the amount necessary to
pay such items, and the Monthly Available Funds for such succeeding Interest
Payment Date will be adjusted accordingly; and provided, further, that Monthly
Available Funds will exclude (A) all payments and proceeds (including
Liquidation Proceeds) of any Financed Student Loans the Purchase Amount of which
has been included in Monthly Available Funds for a prior Monthly Collection
Period, (B) except as expressly included in clause (iv) above, amounts released
from the Pre-Funding Account, (C) any Monthly Rebate Fees paid during the
related Monthly Collection period by or on behalf of the Trust and (D) after the
Funding Period, any expenditure of the Net Principal Cash Flow Amount used to
fund the purchase by the Issuer of any Additional Student Loans during such
Monthly Collection Period.
"Monthly Collection Period" means, with respect to any
Interest Payment Date that is not a Distribution Date, the calendar month
immediately preceding the month of such Interest
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Payment Date (or, with respect to the first Monthly Collection Period, the
period beginning on the Cutoff Date and ending on December 31, 1996).
"Monthly Rebate Fee" means, for each calendar month and with
respect to each Consolidation Loan, the fee payable to the Department equal to
the product of (x) one-twelfth, (y) 1.05% and (z) the outstanding principal
balance of such Consolidation Loan plus accrued interest on such Consolidation
Loan as of the last day of such month.
"Moody's" means Moody's Investors Service, Inc.
"Net Principal Cash Flow Amount" means, as of any date, the
Principal Cash Flow Amount (calculated for the Collection Period ending in the
preceding calendar month or, if no Collection Period ended in the preceding
calendar month, calculated for each preceding calendar month during the current
Collection Period) minus, after the Funding Period, (i) the Capitalized Interest
Amount for such Collection Period or for each such preceding calendar month, as
the case may be and (ii) the portion of the Principal Cash Flow Amount, if any,
that is estimated by the Administrator to be necessary for Monthly Available
Funds or Available Funds to be sufficient on the next succeeding Interest
Payment Date or Distribution Date, respectively, to pay full amount due pursuant
to clauses (A) through (D) of Section 2(d)(iii) or clauses (A) through (D) of
Section 2(d)(iv), as applicable, of the Administration Agreement.
"Non-Code Entity" means a savings and loan association, a
national banking association, a bank or other entity that is not subject to
Title 11 of the United States Code.
"Note" means a Class A-1 Note or a Class A-2 Note.
"Note Depository Agreements" means the agreement dated as of
the Closing Date relating to the Class A-1 Notes, substantially in the form of
Exhibit C to the Indenture, and the agreement dated as of the Closing Date
relating to the Class A-2 Notes, substantially in the form of Exhibit D to the
Indenture, in each case among the Issuer, the Indenture Trustee, the
Administrator and The Depository Trust Company, as the initial Clearing Agency.
"Note Interest Rate" means the Class A-1 Rate with respect to
the Class A-1 Notes and the Class A-2 Rate with respect to the Class A-2 Notes.
"Note Owner" means, with respect to a Book-Entry Note, the
Person who is the owner of such Book-Entry Note, as reflected on the books of
the Clearing Agency, or on the books of a Person maintaining an account with
such Clearing Agency (directly as a
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Clearing Agency Participant or as an indirect participant, in each case in
accordance with the rules of such Clearing Agency).
"Note Register" and "Note Registrar" have the respective
meanings specified in Section 2.04 of the Indenture.
"Noteholder" means a Class A-1 Noteholder or a Class
A-2 Noteholder.
"Noteholders' Distribution Amount" means, with respect
to any Distribution Date, the sum of the Noteholders' Interest
Distribution Amount and the Noteholders' Principal Distribution
Amount for such Distribution Date.
"Noteholders' Interest Carryover Shortfall" means, with
respect to any Interest Payment Date, the excess of (i) the Noteholders'
Interest Distribution Amount on the preceding Interest Payment Date over (ii)
the amount of interest actually distributed to the Noteholders on such preceding
Interest Payment Date, plus interest on the amount of such excess, to the extent
permitted by law, at the weighted average interest rate borne by the Class A-1
Notes and the Class A-2 Notes from such preceding Interest Payment Date to the
current Interest Payment Date.
"Noteholders' Interest Distribution Amount" means, with
respect to any Interest Payment Date, the sum of (i) the amount of interest
accrued at the respective Note Interest Rate for the related Interest Period on
the outstanding principal balance of each class of Notes on the immediately
preceding Distribution Date after giving effect to all principal distributions
to holders of Notes of such class on such date (or, in the case of the first
three Interest Payment Dates and the first Distribution Date, on the Closing
Date) and (ii) the Noteholders' Interest Carryover Shortfall for such Interest
Payment Date; provided, however, that the Noteholders' Interest Distribution
Amount will not include any Noteholders' Interest LIBOR Carryover.
"Noteholders' Interest LIBOR Carryover" means, with respect to
each Distribution Date, and with respect to each Interest Period, if any, since
the preceding Distribution Date as to which the Class A-1 Rate or the Class A-2
Rate for such Interest Period was based on the Student Loan Rate, the amount
equal to the excess, if any, of (a) the amount of interest on the Class A-1
Notes or the Class A-2 Notes, as the case may be, that would have accrued in
respect of each related Interest Period had interest been calculated based on
LIBOR over (b) the amount of interest on the Class A-1 Notes or the Class A-2
Notes, as the case may be, actually accrued in respect of such Interest Period
based on the Student Loan Rate, together with the unpaid portion of any such
excess from prior dates (and interest accrued thereon, to the extent permitted
by law, at the applicable rate calculated based on LIBOR); provided, however,
that, (1) on the
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Class A-1 Final Maturity Date, the portion of the Noteholders' Interest LIBOR
Carryover allocable to the Class A-1 Notes will be equal to the lesser of (i)
the portion allocable to the Class A-1 Notes of the Noteholders' Interest LIBOR
Carryover on such date determined as described above and (ii) the amount of
funds, if any, required and available to be distributed to Class A-1 Noteholders
on such date pursuant to Sections 2(e)(ii)(B) and 2(e)(iii) of the
Administration Agreement and (2) on the Class A- 2 Final Maturity Date, the
Noteholders' Interest LIBOR Carryover will be equal to the lesser of (i) the
Noteholders' Interest LIBOR Carryover on such date determined as described above
and (ii) the amount of funds, if any, required and available to be distributed
to Class A-2 Noteholders on such date pursuant to Sections 2(e)(ii)(B) and
2(e)(iii) of the Administration Agreement.
"Noteholders' Principal Carryover Shortfall" means, as of the
close of business on any Distribution Date, the excess of (i) the Noteholders'
Principal Distribution Amount on such Distribution Date over (ii) the amount of
principal actually distributed to the Noteholders on such Distribution Date.
"Noteholders' Principal Distribution Amount" means, with
respect to any Distribution Date, the Principal Distribution Amount for such
Distribution Date plus the Noteholders' Principal Carryover Shortfall as of the
close of the preceding Distribution Date; provided, however, that the
Noteholders' Principal Distribution Amount will not exceed the outstanding
principal balance of the Notes. In addition, (i) on the Class A-1 Final Maturity
Date, the principal required to be distributed to Class A-1 Noteholders will
include the amount required to reduce the outstanding principal balance of the
Class A-1 Notes to zero and (ii) on the Class A-2 Final Maturity Date, the
principal required to be distributed to the Class A-2 Noteholders will include
the amount required to reduce the outstanding principal balance of the Class A-2
Notes to zero.
"Obligor" on a Student Loan means the borrower or co-borrowers
of such Student Loan and any other Person who owes payments in respect of such
Student Loan, including the Guarantor thereof and, with respect to any Interest
Subsidy Payment or Special Allowance Payment, if any, thereon, the Department.
"Officers' Certificate" means (i) in the case of the Issuer, a
certificate signed by any two Authorized Officers of the Issuer, under the
circumstances described in, and otherwise complying with, the applicable
requirements of Section 11.01 of the Indenture, and delivered to the Indenture
Trustee and (ii) in the case of the Seller, the Master Servicer, or the
Administrator, a certificate signed by any two Authorized Officers of the
Seller, the Master Servicer, or the Administrator, as appropriate.
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"Opinion of Counsel" means (i) with respect to the Issuer, one
or more written opinions of counsel who may, except as otherwise expressly
provided in the Indenture, be employees of or counsel to the Issuer and who
shall be satisfactory to the Indenture Trustee, and which opinion or opinions
shall be addressed to the Indenture Trustee as Indenture Trustee, shall comply
with any applicable requirements of Section 11.01 of the Indenture, and shall be
in form and substance reasonably satisfactory to the Indenture Trustee and (ii)
with respect to the Seller, the Administrator, or the Master Servicer, one or
more written opinions of counsel who may be an employee of or counsel to the
Seller, the Administrator, or the Master Servicer, which counsel shall be
reasonably acceptable to the Indenture Trustee, the Eligible Lender Trustee or
the Rating Agencies, as applicable.
"Outstanding" means, as of the date of determination, all
Notes theretofore authenticated and delivered under this Indenture except:
(i) Notes theretofore cancelled by the Note Registrar or
delivered to the Note Registrar for cancellation;
(ii) Notes or portions thereof the payment for which
money in the necessary amount has been theretofore deposited with the
Indenture Trustee or any Paying Agent in trust for the Noteholders
thereof (provided, however, that if such Notes are to be redeemed,
notice of such redemption has been duly given pursuant to the
Indenture); and
(iii) Notes in exchange for or in lieu of other Notes
which have been authenticated and delivered pursuant to the Indenture
unless proof satisfactory to the Indenture Trustee is presented that
any such Notes are held by a bona fide purchaser;
provided that in determining whether the Noteholders of the requisite
Outstanding Amount of the Notes have given any request, demand, authorization,
direction, notice, consent or waiver hereunder or under any other Basic
Document, Notes owned by the Issuer, any other obligor upon the Notes, the
Seller or any Affiliate of any of the foregoing Persons shall be disregarded and
deemed not to be Outstanding, except that, in determining whether the Indenture
Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Notes that a
Responsible Officer of the Indenture Trustee either actually knows to be so
owned or has received written notice thereof shall be so disregarded. Notes so
owned that have been pledged in good faith may be regarded as Outstanding if the
pledgee establishes to the satisfaction of the Indenture Trustee the pledgee's
right so to act with respect to
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such Notes and that the pledgee is not the Issuer, any other obligor upon the
Notes, the Seller or any Affiliate of any of the foregoing Persons.
"Outstanding Amount" means the aggregate principal amount of
all Notes, or class of Notes, as applicable, Outstanding at the date of
determination.
"Partnership Qualification Provisions" has the meaning
specified in Section 5.06 of the Trust Agreement.
"Paying Agent" means Signet Trust Company or any other Person
that meets the eligibility standards for the Indenture Trustee specified in
Section 6.11 of the Indenture and is authorized by the Issuer to make the
payments to and distributions from the Collection Account and payments of
principal of and interest and any other amounts owing on the Notes on behalf of
the Issuer.
"Person" means any individual, corporation, estate,
partnership, joint venture, association, joint stock company, trust (including
any beneficiary thereof), unincorporated organization or government or any
agency or political subdivision thereof.
"Physical Property" has the meaning assigned to such
term as the definition of "Delivery" above.
"PLUS Loan" means a Student Loan designated as such that is
made under the Parent Loans to Undergraduate Students Program pursuant to the
Higher Education Act.
"Pool Balance" means, as of the close of business on the last
day of any Collection Period or Monthly Collection Period, the aggregate
principal balance of the Financed Student Loans as of such day (including
accrued interest thereon for the immediately preceding Collection Period or
Monthly Collection Period, as the case may be, to the extent such interest will
be capitalized upon commencement of repayment, excluding any Purchased Student
Loans and Liquidated Student Loans).
"Predecessor Note" means, with respect to any particular Note,
every previous Note evidencing all or a portion of the same debt as that
evidenced by such particular Note; and, for the purpose of this definition, any
Note authenticated and delivered under Section 2.05 of the Indenture and in lieu
of a mutilated, lost, destroyed or stolen Note shall be deemed to evidence the
same debt is the mutilated, lost, destroyed or stolen Note.
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"Pre-Funded Amount" means, with respect to any Interest
Payment Date, Distribution Date or other specified date of determination, the
amount on deposit in the Pre-Funding Account.
"Pre-Funding Account" means the account designated as such,
established and maintained pursuant to Section 2(c) of the Administration
Agreement.
"Principal Cash Flow Amount" means, with respect to any
Distribution Date, the sum of the following amounts with respect to the related
Collection Period, or with respect to any other date of determination, the sum
of the following amounts with respect to the period specified: (i) that portion
of all collections received by the Master Servicer or any Subservicer on the
Financed Student Loans that is allocable to principal (including the portion of
any Guarantee Payments received that is allocable to principal of the Financed
Student Loans); (ii) all Liquidation Proceeds attributable to the principal
amount of Financed Student Loans which became Liquidated Student Loans during
such Collection Period, or such other specified period, in accordance with the
Master Servicer's customary servicing procedures; (iii) to the extent
attributable to principal, the Purchase Amount received with respect to each
Financed Student Loan repurchased by the Seller or purchased by the Master
Servicer as a result of a breach of a representation, warranty or covenant which
arose during the related Collection Period or such other specified period; (iv)
the aggregate amount deposited into the Collection Account following a sale of
the Financed Student Loans pursuant to Section 5.01(a) of the Loan Sale
Agreement or Section 4.04 of the Indenture; and (v) the portion allocable to
principal of any Incentive Deposits made by the Seller.
"Principal Distribution Adjustment" means, with respect to any
Distribution Date, the amount of Available Funds on such Distribution Date to be
used to make additional principal distributions to Noteholders (and, after the
Notes have been paid in full, Certificateholders) to account for (i) the amount
of any insignificant principal balance remaining outstanding as of such
Distribution Date on a Financed Student Loan after receipt of a final payment
from a borrower or Guarantor, when such insignificant principal balances are
waived in the ordinary course of business by the Master Servicer or any
Subservicer at the direction of the Administrator in accordance with the Master
Servicing Agreement or (ii) the amount of principal collections erroneously
treated as interest collections including, without limitation, by reason of the
failure by a borrower to capitalize interest that had been expected to be
capitalized; provided, however, that the Principal Distribution Adjustment for
any Distribution Date shall not exceed the lesser of (x) $100,000 and (y)
Reserve Account Excess, if any, remaining after giving effect to all
distributions to be made on such Distribution Date other
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than distributions to the Seller and the Company out of such excess.
"Principal Distribution Amount" means, with respect to any
Distribution Date, the sum of (i) the Principal Distribution Cash Flow Amount
for such Distribution Date, (ii) the Realized Losses attributable to the
Financed Student Loans which became Liquidated Student Loans during the related
Collection Period and (iii) the Principal Distribution Adjustment; provided,
however, that the Principal Distribution Amount will exclude all payments and
proceeds (including Liquidation Proceeds) of any Financed Student Loans the
Purchase Amount of which has been included in Available Funds for a prior
Collection Period.
"Principal Distribution Cash Flow Amount" means, with respect
to any Distribution Date occurring during the Funding Period, the Principal Cash
Flow Amount and means, with respect to any Distribution Date occurring after the
Funding Period, the Net Principal Cash Flow Amount for such Distribution Date
minus any funds remitted to the Seller during the preceding Collection Period
for the purchase of any Additional Student Loans.
"Proceeding" means any suit in equity, action at law or
other judicial or administrative proceeding.
"Purchase Amount" means, (i) with respect to a Financed
Student Loan to be purchased from the Issuer, (a) the unpaid principal balance
owed by the applicable Borrower thereon plus accrued interest thereon to the
date of purchase plus (b) if the sum of the Outstanding Amount of the Notes and
the Certificate Balance of the Certificates is greater than the Pool Balance
plus the Pre-Funded Amount as of the close of business on the last day of the
Monthly Collection Period preceding the date of such purchase, an amount equal
to the product of (1) 1.73% and (2) the sum of the unpaid principal balance of
such loan plus the accrued interest to be capitalized, if any, and (ii) with
respect to an Additional Student Loan to be purchased by the Issuer, an amount
equal, as of the related Subsequent Cutoff Date, to the principal balance of
such Additional Student Loan plus accrued borrower interest thereon if and to
the extent that such interest is not then payable and will, pursuant to the
terms of such loan, be capitalized and added to the principal balance of such
loan upon commencement of repayment.
"Purchased Student Loan" means a Financed Student Loan
purchased as of the close of business on the last day of a Monthly Collection
Period by the Master Servicer pursuant to Section 3.05 of the Master Servicing
Agreement or repurchased by the Seller pursuant to Section 3.02 of the Loan Sale
Agreement.
"Rating Agency" means Fitch, Moody's and Standard & Poor's. If
no such organization or successor is any longer in
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existence, "Rating Agency" shall be a nationally recognized statistical rating
organization or other comparable Person designated by the Seller, notice of
which designation shall be given to the Indenture Trustee, the Eligible Lender
Trustee and the Master Servicer.
"Rating Agency Condition" means, with respect to any action,
that each Rating Agency shall have been given 10 days' prior notice thereof and
that each of the Rating Agencies shall have notified the Seller, the Master
Servicer, any Subservicer, the Eligible Lender Trustee and the Indenture Trustee
in writing that such action will not result in and of itself in a reduction or
withdrawal of the then current rating of the Notes or the Certificates.
"Realized Losses" means the excess of the aggregate principal
balance of any Liquidated Student Loan plus accrued but unpaid interest thereon
over Liquidation Proceeds to the extent allocable to principal.
"Record Date" means, with respect to an Interest Payment Date,
a Distribution Date or a Redemption Date, the close of business on the
twenty-fourth day of the calendar month in which such Interest Payment Date,
Distribution Date or Redemption
Date occurs.
"Recoveries" means, with respect to any Liquidated Student
Loan, moneys collected in respect thereof, from whatever source, during any
Monthly Collection Period following the Monthly Collection Period in which such
Financed Student Loan became a Liquidated Student Loan, net of the sum of any
amounts expended by the Master Servicer or any Subservicer for the account of
any Obligor and any amounts required by law to be remitted to the Obligor.
"Redemption Date" means in the case of a payment to
Noteholders pursuant to Section 10.01 of the Indenture, the Distribution Date
specified by the Administrator or the Issuer pursuant to Section 10.01 of the
Indenture.
"Redemption Price" means in the case of a payment made to
Noteholders pursuant to Section 10.01 of the Indenture, the amount to be so paid
pursuant to such Section 10.01.
"Related Student Loan File" has the meaning specified in
Section 2.01(b) of the Master Servicing Agreement.
"Repayment" means the period of time during which a Borrower
is required to make installment payments to repay the aggregate principal amount
plus accrued interest of all amounts borrowed by virtue of the Borrower Note(s)
executed by such Borrower.
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"Repayment Loan" means a Student Loan during a period of
Repayment.
"Reserve Account" means the account designated as such,
established and maintained pursuant to Section 2(c) of the Administration
Agreement.
"Reserve Account Excess" means, as of each Distribution Date,
the amount, if any, by which the amount on deposit in the Reserve Account (after
giving effect to all deposits thereto and all withdrawals therefrom pursuant to
Section 2(e)(iv) of the Administration Agreement) is greater than the Specified
Reserve Account Balance for such Distribution Date.
"Reserve Account Initial Deposit" means $6,317,145.00.
"Responsible Officer" means, with respect to the Indenture
Trustee, any officer within the Corporate Trust Office of the Indenture Trustee,
including any vice president, assistant vice president, assistant treasurer,
assistant secretary, or any other officer of the Indenture Trustee customarily
performing functions similar to those performed by any of the above designated
officers, with direct responsibility for the administration of the Indenture and
the other Basic Documents on behalf of the Indenture Trustee and also, with
respect to a particular matter, any other officer to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.
"Schedule of Student Loans" means the listing of the Financed
Student Loans set forth in Schedule A to the Loan Sale Agreement and to the
Indenture (which Schedule may be in the form of microfiche) as the same may be
amended from time to time.
"Secretary" means the Secretary of the Department, or any
predecessor or successor to the functions thereof under the Higher Education
Act.
"Seller" means Signet, in its capacity as seller of the
Financed Student Loans.
"Serial Loan" means a Financed Student Loan which (i) is made
by an eligible lender under the Higher Education Act to a Borrower who is also a
Borrower under at least one outstanding Initial Financed Student Loan, (ii) is
made under the same federal loan program as such Initial Financed Student Loan
and (iii) has the same Guarantor as such Initial Financed Student Loan.
"Servicer Default" means an event specified in Section 6.01 of
the Master Servicing Agreement.
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"Servicing Fee" has the meaning specified in Section 3.06 of
the Master Servicing Agreement.
"Signet" means Signet Bank, a Virginia banking corporation.
"Signet Student Loan Trusts" means the Issuer and any other
trust formed subsequent to the Closing Date that is entitled to the benefits of
the Guarantee Agreement.
"SLS Loan" means a Student Loan designated as such that is
made under the Supplemental Loans for Students Program pursuant to the Higher
Education Act.
"Special Allowance Payments" means payments, designated as
such, consisting of effective interest subsidies by the Department in respect of
the Financed Student Loans to the Eligible Lender Trustee on behalf of the Trust
in accordance with the Higher Education Act.
"Specified Reserve Account Balance" with respect to any
Distribution Date means the greater of: (a) 1.5% of the sum of the Pool Balance
and the Pre-Funded Amount as of the close of business on the last day of the
related Collection Period and (b) $4,211,430; provided, however, that in no
event shall the Specified Reserve Account Balance exceed the sum of the
outstanding principal amount of the Notes and the Certificate Balance.
"Stafford Loan" means a Student Loan designated as such
that is made under the Robert T. Stafford Student Loan Program in
accordance with the Higher Education Act.
"Standard & Poor's" means Standard & Poor's Rating
Services, a division of The McGraw-Hill Companies.
"State" means any one of the 50 States of the United States of
America, the trust territories of the United States, or the District of
Columbia.
"Student Loan" means an agreement to repay a disbursement of
money to or on behalf of an eligible student, evidenced by a Borrower Note and
guaranteed in accordance with the policies and procedures of a Guarantor.
"Student Loan Files" means the documents relating to the
Financed Student Loans specified in Section 2.01 of the Master Servicing
Agreement.
"Student Loan Rate" means, with respect to any Interest
Period, the interest rate equal to the product of (a) the quotient obtained by
dividing (i) 360 by (ii) the actual number
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of days elapsed in such Interest Period and (b) the percentage equivalent of a
fraction, the numerator of which is equal to Expected Interest Collections for
such Interest Period less the Servicing Fee and the Administration Fee with
respect to the Interest Payment Date immediately following the last day of such
Interest Period and (ii) the denominator of which is the sum of the Outstanding
Amount of the Notes and the Certificate Balance of the Certificates as of the
first day of such Interest Period (after, if the first day of such Interest
Period is a Distribution Date, giving effect to any principal distributions on
the Notes or Certificates on such Distribution Date).
"Student Loan Rate Accrual Period" means, with respect to any
Interest Period, the calendar month that precedes the month during which such
Interest Period ends.
"Subcustodian" has the meaning specified in 2.01(b) of the
Master Servicing Agreement.
"Subsequent Cutoff Date" means, for any Additional Student
Loan transferred to the Issuer, the date, specified in the related Transfer
Agreement, on and after which all distributions on such loan are property of the
Issuer.
"Subservicer" means, upon satisfaction of the Rating Agency
Condition, any entity in its capacity as a subservicer pursuant to a
Subservicing Agreement between it and the Master Servicer.
"Subservicing Agreement" means any of the servicing agreements
entered into by the Master Servicer and any Subservicer, subject to Section 3.12
relating to the servicing of the Financed Student Loans and the custody of the
Related Financed Student Loan Files.
"Successor Master Servicer" has the meaning specified in
Section 3.07(e) of the Indenture.
"Tax Characterization Amendment" has the meaning specified in
Section 5.06 of the Trust Agreement.
"Transfer Agreement" has the meaning provided in Section 2.03
of the Loan Sale Agreement.
"Transfer Date" means the day fixed for the transfer of any
Additional Student Loans by the Seller to the Issuer; provided, that, during a
calendar month in which a Distribution Date occurs, no Transfer Date shall occur
during the period from the Determination Date occuring in such month to the end
of such calendar month.
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"Treasury Regulations" means regulations, including proposed
or temporary regulations, promulgated under the Code. References in any document
or instrument to specific provisions of proposed or temporary regulations shall
include analogous provisions of final Treasury Regulations or other successor
Treasury Regulations.
"Trust" means the Issuer, established pursuant to the
Trust Agreement.
"Trust Account Property" means the Trust Accounts, all amounts
and investments held from time to time in any Trust Account (whether in the form
of deposit accounts, Physical Property, book-entry securities, uncertificated
securities or otherwise), including the Reserve Account Initial Deposit and all
proceeds of the foregoing.
"Trust Accounts" has the meaning specified in Section
2(c) of the Administration Agreement.
"Trust Agreement" means the Trust Agreement dated as of
November 1, 1996, among the Depositor, the Company and the Eligible Lender
Trustee.
"Trust Certificate" means a Certificate.
"Trust Estate" means all right, title and interest of the
Trust (or the Eligible Lender Trustee on behalf of the Trust) in and to the
property and rights assigned to the Trust pursuant to Article II of the Loan
Sale Agreement all funds on deposit from time to time in the Trust Accounts and
all other property of the Trust from time to time, including any rights of the
Eligible Lender Trustee and the Trust pursuant to the Loan Sale Agreement and
the Administration Agreement.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act
of 1939 as in force on the date hereof, unless otherwise specifically provided.
"UCC" means, unless the context otherwise requires, the
Uniform Commercial Code, as in effect in the relevant jurisdiction, as amended
from time to time.
"Underwriting Agreements" means either or both of the Note
Underwriting Agreement or the Certificate Underwriting Agreement each of which
is dated December 19, 1996 and each of which is between the Seller and Credit
Suisse First Boston Corporation (acting for itself, in the case of the
Certificate Underwriting Agreement and as Representative of the several
Underwriters, in the case of the Note Underwriting Agreement).
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