-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Ahd9n4QrWbVz5OgVk5a9FM0e+SFKpLSZm0Z6RcWOxoi08b0obSejLivOtfkeJfU3 iXUKwn+mnze3QFQ4tXxw1g== 0000914121-01-500973.txt : 20020413 0000914121-01-500973.hdr.sgml : 20020413 ACCESSION NUMBER: 0000914121-01-500973 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 20011226 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SLC STUDENT LOAN RECEIVABLES I INC CENTRAL INDEX KEY: 0001164019 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: S-3 SEC ACT: 1933 Act SEC FILE NUMBER: 333-75952 FILM NUMBER: 1822651 S-3 1 st612049v6_s3.txt REGISTRATION STATEMENT As filed with the Securities and Exchange Commission on December 26, 2001 Registration No. 333- UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 -------------- FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 -------------- SLC STUDENT LOAN RECEIVABLES I, INC. SLC STUDENT LOAN TRUST-I (Depositor to the Issuer described (Issuer of the Notes) herein) (Exact name of registrant as specified (Exact name of registrant as specified in its charters) in its charters) Delaware Delaware (State or other jurisdiction of (State or other jurisdiction of incorporation or organization) incorporation or organization) [Pending] [Pending] (I.R.S. Employer (I.R.S. Employer Identification No.) Identification No.) 750 Washington Boulevard, 9th Floor, 750 Washington Boulevard, 9th Floor, Stamford, CT 06901 Stamford, CT 06901 (203) 975-6923 (203) 975-6112 (Address, including ZIP code, and (Address, including ZIP code, and telephone number, telephone number, including area code, of registrant's including area code, of registrant's principal executive offices) principal executive offices) Steven J. Gorey Chief Financial Officer SLC Student Loan Receivables I, Inc. 750 Washington Boulevard, 9th Floor, Stamford, CT 06901 (203) 975-6923 (Name, address, including ZIP code, and telephone number, including area code, of agent for service) -------------- COPIES TO: Malcolm P. Wattman, Esq. Richard L. Fried, Esq. Cadwalader, Wickersham & Taft Stroock & Stroock & Lavan LLP 100 Maiden Lane 180 Maiden Lane New York, New York, 10038 New York, New York, 10038 Approximate date of commencement of proposed sale to the public: From time to time after this Registration Statement becomes effective. If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, check the following box. |_| If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. |X| If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. |_| If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. |_| If delivery of this prospectus is expected to be made pursuant to Rule 434, please check the following box. |_| CALCULATION OF REGISTRATION FEE - -------------------------------------------------------------------------------- TITLE OF EACH PROPOSED CLASS OF MAXIMUM PROPOSED MAXIMUM AMOUNT OF SECURITIES TO AMOUNT TO BE OFFERING PRICE AGGREGATE REGISTRATION BE REGISTERED REGISTERED(2) PER UNIT OFFERING PRICE(3) FEE(4) Notes(1) $1,000,000 100% $1,000,000 $239 ============== ============= ============== ================ ============= (1) This Registration Statement includes an indeterminate amount of notes that may be offered or sold in connection with market making activities by affiliates of the registrants. (2) The amount of securities being registered represents the maximum aggregate principal amount of securities currently expected to be offered for sale. (3) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457. (4) Registration fee is calculated on the basis of $239 per million offered. THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE. The information contained herein is not complete and may be changed. We may not sell these securities until the Registration Statement filed with the Securities and Exchange Commission becomes effective. This prospectus supplement and prospectus is not an offer to sell or the solicitation of an offer to buy these securities in any state in which such offer is not permitted. SUBJECT TO COMPLETION, Dated December 26, 2001 PROSPECTUS SUPPLEMENT (To prospectus dated __________ __, ____) $______________ STUDENT LOAN ASSET-BACKED NOTES SERIES ____ SLC STUDENT LOAN TRUST-I ISSUER SLC STUDENT LOAN RECEIVABLES I, INC. DEPOSITOR THE STUDENT LOAN CORPORATION SELLER AND SERVICER We are offering our notes in the following _____ classes:
ORIGINAL [INITIAL] PRICE TO PRINCIPAL INTEREST FINAL LEGAL PUBLIC UNDERWRITING PROCEEDS TO CLASS AMOUNT RATE MATURITY [(1)] DISCOUNT ISSUER(2) $ $ $ $ $ $ $ $ $ $ $ $ Total
[(1) Plus accrued interest, if any, from ____ 200_] (2) The proceeds to issuer before deducting expenses are estimated to be $__________ The notes: o will be secured by a revolving pool of student loans o will be rated _____ by ___________ and _________________. NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. Affiliates of the issuer expect to enter into market making transactions in the offered notes and may act as principal or agent in any of these transactions. Any such purchases or sales will be made at prices related to prevailing market prices at the time of sale. This prospectus supplement and the prospectus may be used by the affiliates of the issuer in connection with these transactions. The underwriters named below are offering the notes subject to approval of certain legal matters by their counsel. The notes will be delivered in book-entry form only on or about ______ __, ____. SALOMON SMITH BARNEY [INSERT OTHER NAMES] ___________, ____ YOU SHOULD CONSIDER CAREFULLY THE "RISK FACTORS" BEGINNING ON PAGE [__] OF THIS PROSPECTUS SUPPLEMENT AND ON PAGE [__] OF THE PROSPECTUS. THESE NOTES ARE ASSET BACKED SECURITIES ISSUED BY A TRUST AND PAYABLE SOLELY FROM THE COLLATERAL DESCRIBED IN THIS PROSPECTUS SUPPLEMENT AND IN THE PROSPECTUS. [THE [SERIES ___] [CLASS ___] NOTES ARE INSURED AS TO TIMELY PAYMENTS OF PRINCIPAL AND INTEREST BY [NOTE INSURER]]. THIS PROSPECTUS SUPPLEMENT MAY BE USED TO OFFER AND SELL THE NOTES ONLY IF ACCOMPANIED BY THE PROSPECTUS. TABLE OF CONTENTS PROSPECTUS SUPPLEMENT Summary....................................................................S-1 The Seller.................................................................S-6 [Previously Issued Notes]..................................................S-7 Credit Enhancement.........................................................S-8 Information Relating to the Guarantee Agencies............................S-14 Management's Discussion and Analysis of Financial Condition and Results of Operations..........................................................S-18 Special Note Regarding Forward Looking Statements.........................S-19 Plan of Distribution......................................................S-19 Legal Matters.............................................................S-20 PROSPECTUS About This Prospectus......................................................iii Summary Of The Offering......................................................1 Risk Factors.................................................................6 Special Note Regarding Forward Looking Statements...........................11 Description Of The Notes....................................................11 Security And Sources Of Payment For The Notes...............................17 Book-Entry Registration.....................................................19 Additional Notes And Other Borrowings.......................................23 Summary Of The Indenture Provisions.........................................23 Description Of Credit Enhancement...........................................33 The Student Loan Program Of SLC Student Loan Trust-I........................34 Description Of The Federal Family Education Loan Program....................42 Description Of The Guarantee Agencies.......................................52 Material U.S. Federal Income Tax Considerations.............................57 Erisa Considerations........................................................60 Plan Of Distribution........................................................61 Legal Matters...............................................................62 Ratings.....................................................................62 Incorporation Of Documents By Reference; Where To Find More Information.....63 Glossary Of Terms...........................................................63 [END OF INSIDE FRONT COVER] ii IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN THE PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS We provide information to you about the notes in two separate documents that progressively provide more detail. This prospectus supplement describes the specific terms of the notes. The accompanying prospectus provides general information, some of which may not apply to the notes. You are urged to read both the prospectus and this prospectus supplement in full to obtain information concerning the notes. Cross-references are included in this prospectus supplement and the accompanying prospectus to captions in the materials where you can find further discussions about related topics. The table of contents on the preceding page provides the pages on which these captions are located. Some of the terms used in this prospectus supplement and the accompanying prospectus are defined under the caption "Glossary of Defined Terms" beginning on page [__] in the accompanying prospectus. iii SUMMARY o The following summary is a very general overview of the terms of the notes and does not contain all of the information that you need to consider in making your investment decision. o Before deciding to purchase the notes, you should consider the more detailed information appearing elsewhere in this prospectus supplement and in the prospectus. o This prospectus supplement contains forward-looking statements that involve risks and uncertainties. See "Special Note Regarding Forward Looking Information" in the prospectus. GENERAL o The notes will be issued pursuant to an indenture of trust and will be [senior] [subordinate] [junior-subordinate] notes having the rights described in the prospectus. We will issue the class __-___ and class ___-___ notes in minimum denominations of $_______ or any integral multiple of $_______ [and we will issue the class ___-___ notes and the class ___-___ notes in minimum denominations of $________ or any integral multiple of $________.] We will use the proceeds from the sale of the notes to purchase a portfolio of student loans, to make a deposit to the Reserve Fund and to pay costs of issuing the notes. o [We have previously issued other classes of notes and have similarly used the proceeds we received to purchase student loans. All of those student loans previously acquired, along with the student loans we purchase with] [The] proceeds of the notes being offered by this prospectus supplement, are pledged to a trustee to secure repayment of all of the notes issued under the indenture. The exact composition of this common pool of collateral will change over time as loans are repaid and new loans are added. o The sole source of funds for payment of all of the notes issued under the indenture is the student loans and investments that we pledge to the trustee and the payments that we receive on those student loans and investments. The trustee may release funds to us if the value of the student loans and other assets in the trust estate exceeds [__]% of the principal balance of the outstanding notes and if such excess is at least $[____]. [PRINCIPAL PARTIES] Issuer: o SLC Student Loan Trust-I Depositor: o SLC Student Loan Receivables I, Inc. Seller and Servicer: o The Student Loan Corporation [Sub-Servicer:] o [Name of subservicer] Administrator: o The Student Loan Corporation S-1 Indenture Trustee: o Bankers Trust Company Eligible Lender Trustee: o Bankers Trust Company [Auction Agent] o [Name of Auction Agent] Calculation Agent: o [Name of calculation agent] [Swap Counterparty:] o [Name of Counterparty] FINAL MATURITY [The class __-__ notes and the class __-__ notes will have the following maturity dates: class______ ______ __, 20__ class ______ ______ __, 20__] INTEREST RATES [FIXED RATE NOTES] [The class __-__ notes and the class __-__ notes will bear interest at the following rates per annum: class ______ - ___% class ______ - ___%] [AUCTION RATE SECURITIES] INITIAL INITIAL RATE INITIAL AUCTION ADJUSTMENT RATE DATE DATE - ------------------- --------------- ---------------- ------------------- class __-__ class __-__ [For each auction period, the interest rate for the class ___-___ notes and the class ___-___ notes will equal the least of: o the rate determined pursuant to the auction procedures described in the accompanying prospectus under "Description of Notes- Auction Rate Securities;" and o a maximum rate defined in the indenture as the least of: o the LIBOR rate for a comparable period plus a margin ranging from 1.50% to 2.50% depending upon the ratings of the notes, S-2 o 18%, or o the maximum rate permitted by law; and o a net loan rate, defined in the indenture to mean the greater of: o the interest rate on specified Commercial Paper Rate plus 0.70% margin, or o the weighted average interest rate on our student loans less our program expense percentage. This percentage, which is currently [___%], is determined by us and equals our estimated annual expenses divided by the outstanding principal balance of all our notes.] [After the initial auction period, the period between auctions for the class __-__ notes and class __-__ notes will generally be __ days. We may change the length of the auction period for any class of auction rate securities as described in the prospectus under the heading "Description of the Notes-Auction Rate Securities."] [LIBOR RATE NOTES] INITIAL INTEREST INITIAL LIBOR INITIAL PAYMENT DATE RATE BASED RATE INTEREST PERIOD - ------------------- --------------- ---------------- ------------------ class __-__ class __-__ For each subsequent interest period, the class ___-___ notes and class ___-___ notes will bear interest at a per annum rate equal to: o [three] month LIBOR rate plus _____%, subject to an interest rate cap. See "Description of the Notes-LIBOR rate notes" in the prospectus. INTEREST PAYMENTS o [On each payment date, we will pay the holders of each class of fixed rate notes interest calculated at the respective interest rates listed on the cover page. We will calculate interest on the basis of a 360-day year consisting of twelve 30-day months. For the interest payment due ______ __, ____, the interest accrual period begins on ______ __, ____ and ends on ______, ____. For all other interest payment dates, the interest accrual period will be the preceding calendar month.] o [On the first business day after each auction period for a class of auction rate securities, we will pay the holders of those auction rate securities the interest accrued on their notes during the preceding auction period at the applicable interest rate. We will calculate interest on the basis of a 360-day year and the actual number of days elapsed during the related auction period.] For the interest payment due ______ __, ____, the interest accrual period begins on ______ __, ____ and ends on ______, ____. For all other interest payment dates, the interest accrual period will be the [preceding auction period.] o [On [the first business day of each month, commencing _________ __, ____,] [each _____, ____, ____, ___, ____, ___ and ____, __] we will pay the holders of the LIBOR rate class __- __ notes and class __-__ notes the interest accrued on their notes during the preceding interest accrual period at the applicable interest rate. We will calculate interest on the basis of a 360-day [365-day] year consisting of twelve 30-day months.] For the interest payment due ______ __, ____, the interest accrual period begins on ______ __, ____ and ends on ______, ____. For all other interest payment dates, the interest accrual period will be [three] months.] S-3 PRINCIPAL REDEMPTIONS Although no installments of principal are due on the notes prior to their final maturity, they are subject to redemption as follows: o Prior to ______ __, ____, we intend to use [most of] the principal payments that we receive on our student loans to purchase additional student loans originated under the Federal Family Education Loan Program of the types described in the prospectus. This revolving period may be extended if the rating agencies rating our notes confirm their existing ratings. o [During the revolving period we also intend to use some of the principal payments and interest payments that we receive on our student loans to redeem classes of notes that we previously issued pursuant to a redemption schedule specified for those notes. Unless events occur that we consider unlikely, we will not redeem any notes being offered by this prospectus supplement prior to ____________ ___, ____.] o After the revolving period, we will redeem notes with the principal payments that we receive on the student loans and we may use that portion of interest payments not needed to pay interest on the notes and to pay our expenses to redeem the notes. o We cannot predict when the notes offered by this prospectus supplement will be redeemed. However, they will be paid in full by ________ __, ____. o In addition to mandatory redemption from principal receipts, we have the option to redeem the notes from excess interest payments. We may also redeem our notes when the aggregate outstanding principal balance of all of our notes is 10% or less of the aggregate initial principal balance of all of the notes issued under the indenture. The redemption price for the notes to be redeemed shall be the principal balance of the notes plus accrued interest to the date of redemption [plus any carry-over amounts]. o See the discussion under "Description of the Notes" in the prospectus for a more complete discussion of how we will pay your notes. CHARACTERISTICS OF OUR STUDENT LOAN PORTFOLIO o The portfolio of student loans [that we currently own and] that we expect to acquire with the proceeds of the notes is described below under "Characteristics of our Student Loans" in this prospectus supplement. [DEFINITIVE NOTES] [The [designate classes] notes will be evidenced by definitive notes registered in the name or names of the holders of those notes or their nominee.] BOOK-ENTRY REGISTRATION We expect that the notes will be delivered in book-entry form through the Same Day Settlement System of The Depository Trust Company. FEDERAL INCOME TAX CONSEQUENCES [Cadwalader, Wickersham & Taft] will deliver an opinion that for federal income tax purposes, the notes will be treated as our indebtedness. You will be required to include in your income interest on the notes as paid or accrued, in accordance with your accounting methods and the provisions of the Internal Revenue Code. See "Federal Income Tax Consequences" in the prospectus. S-4 ERISA CONSIDERATIONS If the notes are treated as indebtedness without substantial equity features, the notes are eligible for purchase by or on behalf of employee benefit plans, retirement arrangements, individual retirement accounts and Keogh Plans, subject to the considerations discussed under "ERISA Considerations" in the prospectus. S-5 RISK FACTORS The discussion under the heading "Risk Factors" in the prospectus describes the risks associated with your investment in the notes. In addition, you should consider the following factors: OUR ASSETS MAY NOT BE SUFFICIENT TO PAY OUR NOTES On the date of issuance of the notes, the aggregate principal balance of the student loans we own and the other assets pledged as collateral for the notes will be [__]% less than the aggregate principal balance of all our notes outstanding under the indenture. In addition, the price we pay for additional student loans that we acquire during the revolving collateral period may exceed the principal balance of those loans. As a result, if an event of default should occur under the indenture and we were required to redeem all of our notes, our liabilities may exceed our assets. If this were to occur, we would be unable to repay in full all of the holders of our notes and this would effect our [Class C notes before effecting our Class B notes and this would effect our] Class B notes before effecting our Class A notes. [FAILURE TO COLLECT PAYMENTS ON INTEREST RATE SWAP AGREEMENTS MAY RESULT IN LOSSES TO THE HOLDER OF OUR NOTES Our ability to pay interest and principal when due on the notes will depend in part on our ability to collect amounts due to us under interest rate swap agreements described below. Failure of the counterparty to make payment on the interest rate swap agreements may result in a loss to the holder of our notes.] THE EVENTS OF SEPTEMBER 11, 2001 MAY RESULT IN DELAYED PAYMENTS FROM BORROWERS CALLED TO ACTIVE MILITARY SERVICE The Soldiers' and Sailors' Civil Relief Act of 1940, provides relief to borrowers who enter active military service and to borrowers in reserve status who are called to active duty after the origination of their student loans. The response of the United States to the terrorist attacks on September 11, 2001 will increase the number of citizens who are in active military service, including persons in reserve status who have been called or will be called to active duty. The Soldiers' and Sailors' Civil Relief Act of 1940 also limits the ability of a lender of the Federal Family Education Loan Program to take legal action against a borrower during the borrower's period of active duty and, in some cases, during an additional three month period thereafter. As a result, there may be delays in payment and increased losses on the student loans. The United States Department of Education has issued guidelines recently that would extend the in-school status, in-school deferment status, grace period status or forbearance status of certain borrowers ordered to active duty. Further, if a borrower is in default on a Federal Family Education Loan Program Loan, the applicable guaranty agency must, upon being notified that the borrower has been called to active duty, cease all collection activities for the expected period of the borrower's military service, through September 14, 2002, unless the United States Department of Education provides guidance extending this period. We do not know how many student loans have been or may be affected by the application of the Soldiers' and Sailors' Civil Relief Act of 1940 and the United States Department of Education's recent guidelines. THE SELLER We expect to use the proceeds of the notes being offered by this prospectus supplement to purchase a portfolio of student loans having a principal balance of approximately $__________ from The Student Loan Corporation. The Student Loan Corporation has made representations and warranties with respect to the student loans that we will purchase and has agreed to repurchase any student loans for which any representation or warranty is later determined to be materially incorrect. See "The Student Loan Program of SLC Student Loan Trust-I" in the prospectus. S-6 [PREVIOUSLY ISSUED NOTES] [Information concerning each outstanding series and class of notes that we have previously issued under the indenture is provided below. The student loans and other assets pledged to the trustee will serve as collateral for the outstanding notes and any additional notes that we may issue under the indenture in the future, as well as the notes being offered by means of this prospectus supplement.
OUTSTANDING ORIGINAL PRINCIPAL PRINCIPAL AMOUNT INTEREST MATURITY SERIES CLASS DATE ISSUED AMOUNT (AS OF , ) RATE DATE - ----------- -------- ------------ ----------- ------------ ----------- -----------
We have paid in full all scheduled principal and interest due and payable on each series of notes specified above. As of ___________________, the student loans that are in repayment and pledged to the trustee as collateral for the outstanding notes had delinquencies as follows: o $___________________ was 30 to 60 days delinquent; o $___________________ was 61 to 90 days delinquent; o $___________________ was 91 to 120 days delinquent; o $___________________ was 121 to 180 days delinquent; and o $___________________ was 181 to 240 days delinquent. As of ___________________, there were $___________________ of our student loans in claim status with a guarantee agency. [As of ___________________, the cumulative amount of net losses of principal balance of the student loans experienced by SLC Student Loan Trust-I was $___________________.] [The following fees are payable annually with respect to the notes previously issued:
MAINTENANCE BROKER TRUSTEE SERVICING ADMINISTRATION AND AUCTION DEALER CALCULATION OPERATING SERIES FEE FEE FEE FEES FEES AGENT FEES EXPENSES - -------- --------- ---------- ---------------- ------------- -------- ------------- -----------
- ------------ [We have paid in full all fees and expenses due and payable on each series specified above.] S-7 CREDIT ENHANCEMENT [NOTE INSURANCE] [We will obtain note insurance for the [class __ notes] which will insure timely payments of interest and ultimate payments of principal. Principal payments will be insured by the insurance provider on the following basis: [Describe terms of insurance] The amount of the note insurance will be [____]% of the aggregate initial principal amount of the [class __ notes] [student loans]. The amount available under the note insurance policy on any subsequent interest payment date will be [the initial amount minus the sum of all of the prior claims under the policy] [[____]% of the then existing principal amount of the [class __ notes] [student loans]]. The insurance provider is [name of note insurance provider] [which is a member of [name of insurance group]. The claims paying ability of the [name of insurance provider] [name of insurance group] is rated "____" by the [name of rating agency]]. The address of the insurance provider is [address].] RESERVE FUND [The Reserve Fund is currently funded in an amount equal to __% of the aggregate principal amount of the notes that we now have outstanding.] We will make a deposit to the Reserve Fund on the date the notes are issued in an amount equal to ____ % of the principal balance of the notes. If funds available in the Revenue Fund are not sufficient to make payments when due, moneys in the Reserve Fund may be used to pay amounts due and payable to noteholders. Money withdrawn from the Reserve Fund will be restored through transfers from the Revenue Fund or the Acquisition Fund as directed by us and as available [up to the maximum transfer amount of $____]. [We are required to maintain a minimum balance in the Reserve Fund of $_________.] [INTEREST RATE SWAP] [We have entered into an interest rate swap agreement with [insert name of the swap counterparty]. The interest rate swap will terminate on the _____ payment date. We will owe the swap counterparty a net swap payment when [the weighted average discount rate on 91 day United States Treasury Bills plus a specified percentage is greater than % of the three month LIBOR]. The swap counterparty will owe us a net swap receipt when [the three month LIBOR is greater than ____% of the weighted average discount rate on the 91 day United States Treasury Bills plus a specified percentage]. The amount of a net swap payment or a net swap receipt is the product of the difference in the rates described above and the interest rate swap's scheduled notional amount.] [The scheduled notional amount for any [quarterly] payment date is set forth in Exhibit __ to this prospectus supplement. We expect the scheduled notional amount for any [quarterly] payment date to equal approximately [__]% of the then outstanding principal balance of the class ___ notes.] [While the interest rate swap is in effect, it will reduce, but not eliminate, the risk that the rate of interest on the notes will be determined by the applicable interest rate cap.] [Insert Description of Interest Rate Swap Party] [LETTER OF CREDIT] [We will obtain an irrevocable [standby] [direct pay] letter of credit from [name of bank]. The letter of credit will protect [class __] noteholders against losses on student loans to the maximum of the stated amount of the letter of credit. The initial letter of credit will expire no earlier than __________. The initial amount of the letter of credit will be [__]% of the aggregate initial principal amount of the [class __ notes] [student loans]. The amount available under the letter of credit on any interest payment date will be equal to this initial amount minus the sum of all of the prior draws under the letter of credit to cover any shortfall in the amounts payable to the [class __] noteholders [and the class __ noteholders]. S-8 We will be required to renew or replace the letter of credit before its expiration until the [designate class] notes are no longer outstanding. If we do not renew or replace a letter of credit before the expiration of the then existing letter of credit, the trustee will draw under the letter of credit an amount equal to the full amount available under the indenture and will transfer those funds to a separate trust fund. Thereafter, the [trustee] will be entitled to withdraw those funds on each interest payment date if and to the extent draws would have been required under the letter of credit. [The long-term debt of the bank issuing the letter of credit is rated "____" by [name of rating agency] [and "____" by [name of rating agency]]. For the year ended [end of fiscal year], the issuing bank reported total assets of $__________, total deposits of $__________ and total capital and reserves of $__________. Upon request to [name of issuing bank], a copy of the annual report of [name of issuing bank] may be obtained [without charge] from [name of issuing bank] at [address].] SUBORDINATED NOTES The rights of the Class B noteholders [and the Class C noteholders] to receive payments of interest and principal are subordinated to the rights of the Class A noteholders to receive payments. [The rights of the Class C noteholder to receive payments of interest and principal are subordinated to the rights of the Class A noteholders and the Class B noteholders.] This subordination is intended to enhance the likelihood of regular receipt by the Class A noteholders[, and secondarily, the Class B noteholders,] of the full amount of scheduled monthly payments of principal and interest due them and to protect the Class A noteholders[, and secondarily, the Class B noteholders,] against losses. Class A noteholders have a preferential right to receive, before any distributions to Class B noteholders, distributions from the trust estate created under the indenture and, if necessary, the right to receive future distributions on our student loans that would otherwise have been payable to the holders of Class B notes. The Class B notes are then entitled to the available amounts, if any, remaining in the trust estate. [The Class B noteholders have a preferential right to receive, before any distributions to the Class C noteholders, distributions from the trust estate created under the indenture and, if necessary, the right to receive future distributions on our student loans that otherwise would have been payable to the holders of the Class C notes. The Class C notes are then entitled to the available amounts, if any, remaining in the trust estate.] See "Description of Credit Enhancement-Subordinate Notes" in the prospectus. [SURETY BONDS] [We will obtain a surety bond in the amount of $________ with respect to the notes in favor of the trustee solely on behalf of the holders of the [class __] notes. The surety bond will provide for coverage of timely payment of all interest and ultimate payment of all principal due on the related class ___ notes. We will pay $________ to the issuer of the surety bond.] [Description of the issuer of the surety bond including its summary financials to be provided.] S-9 USE OF PROCEEDS We estimate that the net proceeds from the sale of the notes will be applied as follows: We expect that approximately $___________ of the proceeds deposited to the Acquisition Fund will be used on the issue date to acquire a portfolio of student loans. See "The Seller" in this prospectus supplement. [The remaining proceeds deposited to the Acquisition Fund are expected to be used to acquire portfolios of student loans in _________, ____.] S-10 CHARACTERISTICS OF OUR STUDENT LOANS (AS OF_____________ __, 20__ ) [We have previously acquired student loans.] The characteristics of our student loans [pledged to the trustee on the date of this prospectus supplement and the additional student loans] that we expect to acquire with the proceeds of the notes offered by this prospectus supplement are described below. Since the date for purchase of the additional loans to be acquired with the proceeds of the Series __ Notes is other than ______, __, the characteristics of those loans.] COMPOSITION OF OUR STUDENT LOAN PORTFOLIO Aggregate outstanding principal balance................. $ Number of borrowers..................................... Average outstanding principal balance per borrower...... $ Number of loans......................................... Average outstanding principal balance per loan.......... $ Weighted average annual interest rate................... % Approximate weighted average remaining term (months) (does not include school, grace, deferment, forbearance or claims).............................................. Weighted average remaining term (months)................ DISTRIBUTION OF OUR STUDENT LOANS BY LOAN TYPE OUTSTANDING PERCENT OF LOANS NUMBER OF PRINCIPAL BY OUTSTANDING LOAN TYPES LOANS BALANCE BALANCE - ------------------ -------------- ---------------- ------------------ Consolidated $ % PLUS Stafford - Subsidized Stafford - ___.__ Unsubsidized -------------- ---------------- ------------------ Total $ 100.00% ============== ================ ================= DISTRIBUTION OF OUR STUDENT LOANS BY INTEREST RATE OUTSTANDING PERCENT OF LOANS NUMBER OF PRINCIPAL BY OUTSTANDING INTEREST RATE LOANS BALANCE BALANCE - ------------------ -------------- ---------------- ------------------ $ % -------------- ---------------- ------------------ Total $ 100.00% ============== ================ ================= S-11 DISTRIBUTION OF OUR STUDENT LOANS BY SCHOOL TYPE OUTSTANDING PERCENT OF LOANS SCHOOL NUMBER OF PRINCIPAL BY OUTSTANDING TYPE LOANS BALANCE BALANCE - ------------------ -------------- ---------------- ------------------ 2-Year $ % Institution 4-Year Institution Proprietary Unknown Total $ 100.00% ============== ================ ================= DISTRIBUTION OF OUR STUDENT LOANS BY BORROWER PAYMENT STATUS OUTSTANDING PERCENT OF LOANS BORROWER NUMBER OF PRINCIPAL BY OUTSTANDING PAYMENT STATUS LOANS BALANCE BALANCE - ------------------ ------------- ------------- ------------------ School $ % Grace Deferment Forbearance Claim Repayment First Year Repayment Second Year Repayment Third Year Repayment More than 3 years Total $ 100.00% ============== ============== ================= GEOGRAPHIC DISTRIBUTION OF OUR STUDENT LOANS The following chart shows the geographic distribution of our student loans based on the permanent billing addresses of the borrowers as shown on the servicer's records: OUTSTANDING PERCENT OF LOANS NUMBER OF PRINCIPAL BY OUTSTANDING LOCATION LOANS BALANCE BALANCE - ------------------ ------------- ------------- ------------------ Alabama Alaska American Samoa Arizona Arkansas California Colorado Connecticut Delaware District of Columbia Florida Foreign Country Georgia Guam S-12 OUTSTANDING PERCENT OF LOANS NUMBER OF PRINCIPAL BY OUTSTANDING LOCATION LOANS BALANCE BALANCE - ------------------ ------------- ------------- ------------------ Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Military (Atlantic) Military (Europe) Military (Pacific) Minnesota Mississippi Missouri Montana Northern Mariana Islands North Carolina North Dakota Nebraska Nevada New Hampshire New Jersey New Mexico New York Ohio Oklahoma Oregon Pennsylvania Puerto Rico Rhode Island South Carolina South Dakota Tennessee Texas Utah Virginia Virgin Islands Vermont Washington West Virginia Wisconsin Wyoming Other ------------- ------------- ------------------ Total $ 100.00 ============= ============= ================== DISTRIBUTION OF OUR STUDENT LOANS BY DATE OF DISBURSEMENT OUTSTANDING PERCENT OF LOANS DISBURSEMENT NUMBER OF PRINCIPAL BY OUTSTANDING DATE LOANS BALANCE BALANCE - ------------------ ------------- ------------- ------------------ Pre-October, 1993 $ % October 1, 1993 and thereafter Total $ 100.00 ============= ================== DISTRIBUTION OF THE FINANCED STUDENT LOANS BY GUARANTEE AGENCY OUTSTANDING PERCENT OF LOANS GUARANTEE NUMBER OF PRINCIPAL BY OUTSTANDING AGENCY LOANS BALANCE BALANCE DISTRIBUTION OF OUR STUDENT LOANS BY RANGE OF PRINCIPAL BALANCE OUTSTANDING PERCENT OF LOANS NUMBER OF PRINCIPAL BY OUTSTANDING PRINCIPAL BALANCE RANGE BORROWERS BALANCE BALANCE - ------------------------- ------------- ------------- ------------------ Less than $500 $ % $500 - $999.00 $1,000 - $1,999.00 $2,000 - $2,999.00 $3,000 - $3,999.00 $4,000 - $5,999.00 $6,000 - $7,999.00 $8,000 - $9,999.00 $10,000 - $14,999.99 $15,000 - $19,999.99 $20,000 or Greater Total 100.00% ============= ================== INFORMATION RELATING TO THE GUARANTEE AGENCIES The payment of principal and interest on all of the student loans held in the trust estate created under the indenture will be guaranteed by designated guarantee agencies and will be reinsured by the United States Department of Education. The guarantee provided by each guarantee agency is an obligation solely of that guarantee agency and is not supported by the full faith and credit of the federal or any state government. However, the Higher Education Act provides that if the Secretary of Education determines that a guarantee agency is unable to meet its insurance obligations, the Secretary shall assume responsibility for all functions of the guarantee agency under its loan insurance program. For further information on the Secretary of Education's authority in the event a guarantee agency is unable to meet its insurance obligations see "Description of the Guarantee Agencies" in the prospectus. S-13 Of our student loans held in the trust estate, including those that we expect to acquire with the proceeds of the notes offered by this prospectus supplement, approximately o [__]% are guaranteed by [__], a non-profit corporation ("[__]"), organized in [__] and guaranteeing student loans since [___], and as of [_____] had an approximate aggregate principal amount of loans guaranteed of $[__], o [__]% are guaranteed by [___], an agency of [___] ("[__]"), organized in [___] and guaranteeing student loans since [___], and as of [____] had an approximate aggregate principal amount of loans guaranteed of $[___], o [___]% are guaranteed by [___], an agency of [___] ("[__]"), organized in [___] and guaranteeing student loans since [___], and as of [____] had an approximate aggregate principal amount of loans guaranteed of $[___], o and the remaining [___]% are guaranteed by one of the following guarantee agencies: [___] and [___]. See "Description of the Guarantee Agencies" in the prospectus for more detailed information concerning the characteristics of the guarantee agencies. Presented below is information with respect to each guarantee agency that we expect to guaranty 10% or more of our student loans as of ________ __, ____. Except as otherwise indicated, we have obtained the information regarding each guarantee agency from the guarantee agency. We have not independently verified this information. [INSURANCE OF STUDENT LOANS; GUARANTORS OF STUDENT LOANS] General. Each student loan is required to be guaranteed as to principal and interest by one of the guarantee agencies described below and reinsured by the United States Department of Education under the Higher Education Act and must be eligible for special allowance payments and, in the case of some student loans, interest subsidy payments by the United States Department of Education. Guarantee Agencies for the Student loans. The eligible lender trustee has entered into a separate guarantee agreement with each of the guarantee agencies listed below, under which each of the guarantors has agreed to serve as guarantor for specified student loans. Under the Higher Education Amendments of 1992, if the United States Department of Education has determined that a guarantee agency is unable to meet its insurance obligations, a loan holder may submit claims directly to the United States Department of Education and the United States Department of Education is required to pay the full guarantee payment in accordance with guarantee claim processing standards no more stringent than those of the guarantee agency. We cannot assure you that the United States Department of Education would ever make such a determination with respect to a guarantee agency or, if such a determination was made, whether that determination or the ultimate payment of guarantee claims would be made in a timely manner. See "Description of the Federal Family Education Loan Program--"Description of the Guarantee Agencies" in the prospectus. The following table provides information with respect to the portion of the student loans guaranteed by each guarantor: DISTRIBUTION OF THE STUDENT LOANS BY GUARANTEE AGENCY AGGREGATE PERCENT OF OUTSTANDING POOL BY PRINCIPAL OUTSTANDING NUMBER OF BALANCE OF PRINCIPAL LOANS LOANS BALANCE NAME OF GUARANTEE AGENCY GUARANTEED GUARANTEED GUARANTEED - ---------------------------------- ------------- ------------ ----------- S-14 Some historical information about each of the guarantee agencies that guarantees student loans comprising at least 5% of the initial pool balance is provided below. For purposes of the following tables we refer to these guarantee agencies as "Significant Guarantors." The information shown for each Significant Guarantor relates to all student loans guaranteed by that Significant Guarantor. We obtained the information in these tables from various sources, including United States Department of Education publications and data or from the Significant Guarantors. None of the issuer, the depositor, the seller and servicer or the underwriters have audited or independently verified this information for accuracy or completeness. Guarantee Volume. The following table describes the approximate aggregate principal amount of federally reinsured student loans, excluding consolidation loans, that first became guaranteed by each Significant Guarantor and by all guarantee agencies, including but not limited to those guaranteeing student loans, in each of the five federal fiscal years shown: LOANS GUARANTEED ---------------------------------------------------- FEDERAL FISCAL YEAR ---------------------------------------------------- NAME OF GUARANTEE AGENCY 1997 1998 1999 2000 2001 - ------------------------ ---- ---- ---- ---- ---- Reserve Ratio. Each Significant Guarantor's reserve ratio is determined by dividing its cumulative cash reserves by the original principal amount of the outstanding loans it has agreed to guarantee. For this purpose: o Cumulative cash reserves are cash reserves plus (a) sources of funds, including insurance premiums, state appropriations, federal advances, federal reinsurance payments, administrative cost allowances, collections on claims paid and investment earnings, minus (b) uses of funds, including claims paid to lenders, operating expenses, lender fees, the United States Department of Education's share of collections on claims paid, returned advances and reinsurance fees. o The original principal amount of outstanding loans consists of the original principal amount of loans guaranteed by the Significant Guarantor minus the original principal amount of loans cancelled, claims paid, loans paid in full and loan guarantees transferred to the Significant Guarantor from other guarantors. The following table shows the Significant Guarantors' reserve ratios and the national average reserve ratio for all guarantors for the five federal fiscal years shown for which information is available: RESERVE RATIO AS OF CLOSE OF FEDERAL FISCAL YEAR ------------------------------ GUARANTORS 1997 1998 1999 2000 2001 - -------------- ---- ---- ---- ---- ---- S-15 Recovery Rates. A guarantor's recovery rate, which provides a measure of the effectiveness of the collection efforts against defaulting borrowers after the guarantee claim has been satisfied, is determined for each year by dividing the cumulative amount recovered from borrowers by the guarantor by the cumulative aggregate amount of default claims paid by the guarantor. The table below shows the cumulative recovery rates for each of the Significant Guarantors for the five federal fiscal years shown for which information is available: RECOVERY RATE FEDERAL FISCAL YEAR ------------------------------ GUARANTORS 1997 1998 1999 2000 2001 - -------------- ---- ---- ---- ---- ---- Claims Rate. The following table shows the claims rates of each Significant Guarantor for each of the five federal fiscal years shown: CLAIMS RATE FEDERAL FISCAL YEAR ------------------------------ GUARANTORS 1997 1998 1999 2000 2001 - -------------- ---- ---- ---- ---- ---- The United States Department of Education is required to make reinsurance payments to guarantors with respect to Federal Family Education Loan Program loans in default that are subject to specified reductions when the guarantor's claims rate for a fiscal year equals or exceeds certain trigger percentages of the aggregate original principal amount of Federal Family Education Loan Program loans guaranteed by that guarantor that are in repayment on the last day of the prior fiscal year. Each guarantee agency's guarantee obligations with respect to any student loan is conditioned upon the satisfaction of all the conditions in the applicable guarantee agreement. These conditions include, but are not limited to, the following: o the origination and servicing of the student loan being performed in accordance with the Federal Family Education Loan Program, the Higher Education Act, the guarantee agency's rules and other applicable requirements; o the timely payment to the guarantee agency of the guarantee fee payable on the student loan; and o the timely submission to the guarantee agency of all required pre-claim delinquency status notifications and of the claim on the student loan. S-16 Failure to comply with any of the applicable conditions, including those listed above, may result in the refusal of the guarantee agency to honor its guarantee agreement on the student loan, in the denial of guarantee coverage for certain accrued interest amounts or in the loss of certain interest subsidy payments and special allowance payments. Prospective investors may consult the United States Department of Education Data Books for further information concerning the guarantors. [SUB-SERVICING AGREEMENT] [Describe sub-servicer and sub-servicer agreement] [CAPITALIZATION OF THE TRUST] The following table illustrates the capitalization of the trust as of the cutoff date, as if the issuance and sale of the securities had taken place on that date: Floating Rate Class ___ Student Loan-Backed Notes........... $ Floating Rate Class ___ Student Loan-Backed Notes........... $ Floating Rate Class ___ Student Loan-Backed Notes........... $ Trust Equity................................................ $ Total..................................................... $ ELIGIBLE LENDER TRUSTEE Bankers Trust Company is the eligible lender trustee for the trust under the trust agreement. Bankers Trust Company is a Delaware banking corporation whose principal offices are located [NEED ADDRESS]. The eligible lender trustee will acquire on behalf of the trust legal title to all the trust student loans acquired under the sale agreement. The eligible lender trustee on behalf of the trust has entered into a separate guarantee agreement with each of the guarantee agencies described in this prospectus supplement with respect to the trust student loans. The eligible lender trustee qualifies as an eligible lender and the holder of the trust student loans for all purposes under the Higher Education Act and the guarantee agreements. Failure of the trust student loans to be owned by an eligible lender would result in the loss of guarantor payments and United States Department of Education payments on the trust student loans. See "Description of the Federal Family Education Loan Program" in the prospectus. The eligible lender trustee's liability in connection with the issuance and sale of the notes is limited solely to the express obligations of the eligible lender trustee in the trust agreement and the sale agreement. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS SOURCES OF CAPITAL AND LIQUIDITY The trust's primary sources of capital will be the net proceeds from the sale of the notes and the transfer of the student loans to the trust by the depositor. The trust's primary sources of liquidity will be collections on the trust student loans, as supplemented by payments, if any, from the [swap counterparties and] amounts on deposit in the reserve account. RESULTS OF OPERATIONS [The trust will be newly formed and, accordingly, has no results of operations as of the date of this prospectus supplement. Because the trust does not have any operating history, we have not included in this prospectus supplement any historical or pro forma ratio of earnings to fixed charges. The earnings on the trust student loans and other assets owned by the trust and the interest costs of the notes will determine the trust's results of operations in the future. The income generated from the trust's assets will pay operating costs and expenses of the trust and interest and principal on the notes. The principal operating expenses of the trust are expected to be, but are not limited to, servicing, administration and swap fees.] S-17 [Insert discussion and analysis of results of operation] SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS Statements in this prospectus supplement and the prospectus, including those concerning our expectations as to our ability to purchase eligible student loans, to structure and to issue competitive securities, our ability to pay our notes, and certain other information presented in this prospectus supplement and the prospectus, constitute forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may vary materially from such expectations. For a discussion of the factors which could cause our actual results to differ from expectations, please see the caption entitled "Risk Factors" in this prospectus supplement and in the prospectus. PLAN OF DISTRIBUTION Subject to the terms and conditions set forth in the underwriting agreement dated as of __________, ____, among ourselves and the underwriters named below, we have agreed to sell to each of the underwriters, and each of the underwriters has agreed to purchase from us, the principal amount of the notes set forth opposite its name. UNDERWRITER CLASS - CLASS - CLASS - -------------- --------- ---------- ---------- Total We have been advised by the underwriters that they propose to offer the notes to the public initially at the respective offering prices set forth on the cover page of this prospectus supplement, [and to certain dealers at those prices less commissions not in excess of __% for the Class A notes, __% for the Class B notes and __% for the Class C notes]. Until the distribution of notes is completed, the rules of the Securities and Exchange Commission may limit the ability of the underwriters and selling group members to bid for and purchase the notes. As an exception to these rules, the underwriters are permitted to engage in transactions that stabilize the price of the notes. These transactions consist of bids to purchase and open market purchases and sales for the purpose of pegging, fixing or maintaining the price of the notes. The lead underwriter may over-allot the notes for the account of the underwriters to create a short position for the account of the underwriters by accepting orders for more notes than are to be sold. In addition, the underwriters may impose a penalty bid on the broker-dealers who sell the notes. This means that if an underwriter purchases notes in the open market to reduce a broker-dealer's short position or to stabilize the prices of the notes, it may reclaim the selling concession from the broker-dealer who sold those notes as part of the offering. In general, over-allotment transactions and open market purchases of the notes for the purpose of stabilization or to reduce a short position could cause the price of a note to be higher than it might be in the absence of such transactions. Neither we nor any of the underwriters makes any representation or prediction as to the direction or magnitude of any effect that the transactions described above may have on the prices of the notes. In addition, neither we nor any of the underwriters make any representation that the underwriters will engage in these transactions or that these transactions, once commenced, will not be discontinued without notice. We have been advised by the underwriters that they presently intend to make a market in the notes; however, they are not obligated to do so. In addition, any market-making may be discontinued at any time, and an active public market for the notes may not develop. S-18 Salomon Smith Barney Inc. is an affiliate of the seller and servicer, and may be deemed our affiliate. From time to time, the underwriters or their affiliates may perform investment banking and advisory services for, and may provide general financing and banking services to the seller and servicer and its affiliates. From time to time, we may invest funds in the Reserve Fund and other accounts under the indenture in eligible instruments either acquired from the underwriters or issued by affiliates of the underwriters. The underwriting agreement provides that we will indemnify the underwriters against certain civil liabilities, including liabilities under the Securities Act of 1933, and we have agreed to reimburse the underwriters for the fees and expenses of their counsel. [This prospectus supplement and the prospectus may be used by affiliates of the Seller, to the extent required, in connection with market making transactions in the offered notes. The affiliates may act as principal or agent in such transactions.] LEGAL MATTERS Certain legal matters, including certain federal income tax matters, will be passed upon by [Cadwalader, Wickersham & Taft], New York, New York, counsel to the trust, the depositor and the seller and servicer. Certain legal matters will be passed upon for the underwriters by Stroock & Stroock & Lavan LLP, New York, New York. Richards, Layton & Finger, P.A., as Delaware tax counsel for the trust, will pass upon specified Delaware state income tax matters for the trust. S-19 THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SEC IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED PROSPECTUS SLC STUDENT LOAN TRUST-I Issuer SLC STUDENT LOAN RECEIVABLES I, INC. Depositor THE STUDENT LOAN CORPORATION Seller and Servicer [$------] STUDENT LOAN ASSET-BACKED NOTES We will periodically issue our notes in one or more series. The specific terms of the notes included in each series will be described in a supplement to this prospectus. Each issue of notes will have its own series designation and consist of one or more classes of notes. We will use proceeds from the sale of the notes to acquire portfolios of student loans originated by eligible lenders under the Federal Family Education Loan Program and to fund certain accounts for the benefit of the holders of the notes. Those student loans and accounts will be pledged to a trust estate established to secure repayment of the notes. The notes will be limited obligations of SLC Student Loan Trust-I payable solely from that trust estate. The notes are not guaranteed or insured by the United States of America or any governmental agency. You should read this prospectus and any prospectus supplement carefully before you invest. This prospectus may be used to offer and sell the notes only if it is accompanied by a prospectus supplement. YOU SHOULD CONSIDER CAREFULLY THE "RISK FACTORS" BEGINNING ON PAGE 5 IN THIS PROSPECTUS AND THE "RISK FACTORS" IN THE RELATED PROSPECTUS SUPPLEMENT. Offers of the notes may be made by different methods, including offerings through underwriters, as more fully described under "Plan of Distribution" below and in the related prospectus supplement. No market will exist for the notes of any series before the notes are issued. The date of this prospectus is ____ _, 2002. ABOUT THIS PROSPECTUS This prospectus is part of a registration statement that we filed with the Securities and Exchange Commission. We may sell our notes in one or more offerings pursuant to the registration statement up to a total dollar amount of [$_____]. We provide information about the notes in two separate documents: (a) this prospectus which provides general information, some of which may not apply to a particular series of notes, and (b) a prospectus supplement which describes the specific terms of the series of notes being offered, including: o a description of the aggregate principal amount, authorized denominations and interest rate or rates, or the manner of determining the rate or rates, of each class of the notes; o information concerning the student loans underlying the notes; o information with respect to any notes that we have previously issued that also are secured by a common pool of assets that secures payment of the notes being offered; o information concerning the guarantee agencies providing guarantees for the student loans that will secure payment of the notes described in the prospectus supplement; o information with respect to any credit enhancement; o the credit ratings of the notes; and o the method of selling the notes. WHENEVER INFORMATION IN A PROSPECTUS SUPPLEMENT IS MORE SPECIFIC THAN THE INFORMATION IN THIS PROSPECTUS, YOU SHOULD RELY ON THE INFORMATION IN THE PROSPECTUS SUPPLEMENT. You should rely only on the information contained in or incorporated by reference into this prospectus and any prospectus supplement. We have not authorized anyone else to provide you with different information. We are not making an offer of the notes in any state where the offer is not permitted. You should not assume that the information in this prospectus or any prospectus supplement is accurate as of any date other than the date appearing on the front cover of those documents. TO UNDERSTAND THE STRUCTURE OF THESE SECURITIES, YOU MUST READ CAREFULLY THIS PROSPECTUS AND THE PROSPECTUS SUPPLEMENT IN THEIR ENTIRETY. - ------------------------------------------------------------------------------ TABLE OF CONTENTS TO PROSPECTUS - ------------------------------------------------------------------------------ PAGE About This Prospectus......................................................iii Summary of the Offering......................................................1 Risk Factors.................................................................6 Special Note Regarding Forward Looking Statements...........................11 Description of the Notes....................................................11 Security and Sources of Payment for the Notes...............................17 Book-Entry Registration.....................................................19 Additional Notes and Other Borrowings.......................................23 Summary of the Indenture Provisions.........................................23 Description of Credit Enhancement...........................................33 The Student Loan Program of SLC Student Loan Trust-I........................34 Description of the Federal Family Education Loan Program....................42 Description of the Guarantee Agencies.......................................52 Material U.S. Federal Income Tax Considerations.............................57 ERISA Considerations........................................................60 Plan of Distribution........................................................61 Legal Matters...............................................................62 Ratings.....................................................................62 Incorporation of Documents by Reference; Where to Find More Information.....62 Glossary of Terms...........................................................63 SUMMARY OF THE OFFERING The following summary highlights selected information from this prospectus but does not contain all of the information you should consider before making an investment decision. Before deciding to purchase the notes, you should read the more detailed information appearing in this prospectus and in the related prospectus supplement. OVERVIEW We will from time to time sell series of our notes. We will acquire pools of student loans with the proceeds we receive from these sales. We will pledge these student loans as collateral for our notes. Unlike other issuers that create separate trusts each time they sell securities, all of the notes we sell will be secured by all student loans that we acquire and pledge as collateral under the indenture, or as we may otherwise state for a particular series of the notes in a prospectus supplement. We will from time to time issue a particular series of notes which will be issued in classes. The priority of payments among the various classes and series of notes will be described in the related prospectus supplement. These payments will come principally from amounts received on the student loans. PRINCIPAL PARTIES o Issuer............ SLC Student Loan Trust-I, a Delaware business trust, is the issuer of the notes. The trustee of the trust is Wilmington Trust Company. You may contact us through the administrator at 750 Washington Boulevard, 9th Floor, Stamford, CT 06901, or by phone at (203) 975-6112. o Depositor......... SLC Student Loan Receivables I, Inc., will act as depositor. The depositor is a wholly owned, special purpose subsidiary of The Student Loan Corporation, formed to acquire student loans originated or acquired by The Student Loan Corporation and to transfer and deposit these student loans with SLC Student Loan Trust-I. Because the depositor and we are not institutions eligible to hold legal title to student loans, Bankers Trust Company, an eligible lender trustee specified in the related prospectus supplement, will hold legal title to the student loans on our behalf and on behalf of the depositor. Bankers Trust Company will be the eligible lender trustee, unless otherwise specified in the related prospectus supplement. o Seller and Servicer.......... The Student Loan Corporation, a Delaware corporation, will act as the seller and the servicer of our student loans. The servicer may transfer its obligations to other entities. The servicer may also contract with various other servicers or sub-servicers. The related prospectus supplement will describe any sub-servicers. o Indenture Trustee.. Bankers Trust Company will serve as the indenture trustee under the indenture governing the issuance of the notes. Bankers Trust Company may be replaced by another qualified indenture trustee. o Administrator..... The Student Loan Corporation will act as administrator of the trust. The Student Loan Corporation may transfer its obligations as administrator. INTEREST RATES The prospectus supplement will specify the interest that will be paid on our notes. The interest rate may be fixed for the full term of the notes, or the interest rate may be subject to periodic adjustment as described below. o Auction Rate Securities. We may issue classes of notes that bear interest at a rate determined by auction. The initial interest rate for these auction rate securities will be set forth, or the method for determining the initial interest rate will be described, in the related prospectus supplement. The interest rates for the auction rate securities will be reset at the end of each interest period pursuant to the auction procedures. The auction procedures are summarized and an example of an auction is included under "Description of the Notes--Auction Rate Securities." o Index Rate Notes. The interest rate for some of our notes may be determined by reference to LIBOR or by reference to United States Treasury Securities. These notes will bear interest at an initial rate described in the prospectus supplement. Thereafter, the interest rate for LIBOR rate notes will be determined periodically by reference to the designated LIBOR rate, and the interest rate for treasury rate notes will be determined periodically by reference to the rate of interest paid on designated U.S. Treasury securities. See "Description of the Notes--LIBOR rate notes" and "--Treasury rate notes." o Accrual Notes. We may issue one or more classes of accrual notes. Accrual notes will not be entitled to receive payments of interest during the designated accrual period. Instead, interest accrued on the accrual notes will be capitalized and added to their principal balance. The rate of interest to be accrued and the accrual period will be specified in the prospectus supplement. See "Description of the Notes--Accrual notes." PAYMENTS ON NOTES We will make payment of principal and interest due on the notes solely from the assets pledged to the indenture trustee in the trust estate created by the indenture. That trust estate will consist of a revolving pool of student loans, payments made on the student loans and funds in accounts held by the indenture trustee under the indenture. Interest on the notes will be paid on the dates specified in the prospectus supplement. The principal balance of the notes of each series will be payable in full on the stated maturity date, unless earlier redeemed or repaid as described in this prospectus or in the related prospectus supplement. USE OF PRINCIPAL We will deposit the net proceeds we receive from the RECEIPTS--THE offering of a series of the notes into the Acquisition REVOLVING PERIOD Fund to be used to acquire student loans on or before a specified date. We may use principal payments that we receive on the student loans to acquire additional student loans for a period of time specified in the prospectus supplement as the revolving period. During this revolving period, we will pay interest on the notes as it becomes due. However, we will not make principal payments on the notes or redeem notes during the revolving period, unless the terms of a particular series of the notes provide for payments of principal or redemptions during the revolving period. The revolving period during which we may acquire additional student loans may be extended with the consent of the rating agencies or the provider of any credit enhancement for the notes. REDEMPTION PROVISIONS Each series of the notes will be subject to redemption as described in the related prospectus supplement. Redemption provisions that may apply to a series of the notes are described below. o Mandatory Redemption. Once the revolving period has ended, we will be required under the indenture to use the principal payments remaining in the Acquisition Fund along with the principal payments that we receive on the student loans to redeem notes. o Optional Redemption. Once the revolving period has ended we may redeem notes from interest payments received on student loans that are not needed to pay interest on the notes and to pay our expenses. o Optional Purchase. We may purchase all of the notes in whole in our sole discretion when the aggregate current principal balance of the notes that remain outstanding is less than or equal to 10% of the initial aggregate principal balance of all the notes issued under the indenture on their respective date of original issuance. o Partial Redemption. If less than all of the notes of any series are to be redeemed or purchased, the administrator will determine the classes of notes that we will redeem. Generally, Class A notes will be redeemed before Class B notes and Class B notes will be redeemed before Class C notes. However, we have the option of redeeming some or all of the Class B notes before all of the Class A notes are redeemed, and we may redeem some or all of the Class C notes before all the Class A notes and Class B notes are redeemed, if the ratio of our assets to our liabilities exceeds levels specified in the prospectus supplement. See "Description of the Notes--Notice and Partial Redemption of Notes" in this prospectus. THE STUDENT LOANS The student loans that we acquire will have been WE ACQUIRE originated under the Federal Family Education Loan Program to students enrolled in qualified, accredited institutions of higher education. The characteristics of the portfolio of student loans we expect to acquire with the proceeds of the notes of any series, and the characteristics of the existing portfolio pledged to the indenture trustee, will be described in the prospectus supplement. STUDENT LOAN GUARANTEES The payment of principal and interest on all of our student loans will be guaranteed by designated guarantee agencies and will be reinsured by the Department of Education pursuant to the Higher Education Act. This guarantee, however, is contingent upon our compliance with a variety of regulations concerning origination and servicing of the loans. Failure to follow these regulations may result in the guarantee claim for a loan being denied. Student loans originated prior to October 1, 1993 generally are fully guaranteed as to principal and accrued interest. Student loans originated after October 1, 1993 generally are guaranteed as to 98% of principal and accrued interest. The Higher Education Act provides that if the Secretary of Education determines that a guaranty agency is unable to meet its obligations to holders of loans, such as the trust, then the holders may submit guarantee claims directly to the Department of Education. The Department of Education is required to pay the guarantee agency's full insurance obligation to the holders until the obligations are transferred to a new guarantee agency capable of meeting the obligations, or until a qualified successor guaranty agency assumes the obligations. Delays in receiving reimbursement could occur if a guaranty agency fails to meet its obligations. SUBORDINATED NOTES The rights of the owners of Class B notes to receive payments of principal and interest will be subordinated to the rights of the owners of the Class A notes to receive payments of principal and interest. The rights of the owners of Class C notes to receive payments of principal and interest will be subordinated to the rights of the owners of the Class B notes and the Class A notes to receive payments of principal and interest. This subordination is intended to enhance the likelihood that the owners of the more senior notes will regularly receive the full amount of scheduled payments of principal and interest due them and to protect those owners against losses. We may borrow funds secured by the loans held in the trust estate. The rights of any lender will be subordinate to the rights of the owners of the notes to receive payments of principal and interest and to the deposit of the required reserve fund amounts with respect to the notes under the indenture. FUNDS o Revenue Fund. We will deposit all funds that we receive with respect to the student loans in the Revenue Fund. Generally, the funds on deposit in the Revenue Fund will be used by us to pay the fees and expenses of the trust estate and interest and principal on the notes and any subordinated debt. We may transfer to the Acquisition Fund principal payments we receive on the student loans during the applicable revolving period. Additional amounts in the Revenue Fund will be transferred to the Reserve Fund, but only to the extent of any deficiency in the Reserve Fund. o Acquisition Fund. When we sell a series of notes, we will deposit into the Acquisition Fund most of the proceeds we receive. These funds will be used to acquire the student loans identified in the related prospectus supplement and pay certain costs related to the issuance of the series of notes. We may also acquire additional student loans during the revolving period with amounts transferred from the Revenue Fund. After the revolving period, we will redeem notes with all moneys remaining in the Acquisition Fund. If moneys in the Revenue Fund are insufficient to pay interest, redeem notes, or pay expenses, we may fund the insufficiency from transfers from the Acquisition Fund. o Reserve Fund. When we issue a series of notes, we expect to deposit into the Reserve Fund an amount specified in the related prospectus supplement. At any later time, the amount required to be deposited in the Reserve Fund with respect to a series of notes shall be an amount specified in a prospectus supplement. We will use moneys in the Reserve Fund to pay interest and principal on the notes if there are no funds left in the other funds and accounts securing repayment of the notes under the indenture. o Operating Fund. When we issue a series of notes, we will deposit into the Operating Fund an amount specified in the related prospectus supplement. Money will also be transferred to the Operating Fund from the Revenue Fund from time to time. These amounts will be applied to pay our administrative costs and will not secure repayment of the notes. CREDIT ENHANCEMENT We may establish credit enhancement for a series of notes in the form of insurance policies or surety bonds, subordination of certain classes or subclasses, one or more reserve funds, letters of credit, guarantees or other arrangements to provide for coverage of risks of defaults or losses, as described in the related prospectus supplement. See "Description of Credit Enhancement" in this prospectus. DERIVATIVE PRODUCTS We may enter into swap agreements and other derivative products. Our obligation to make payments in connection with a derivative product may be secured by a pledge of and lien on the trust estate. We will not enter into a derivative product unless the indenture trustee has received a confirmation from each rating agency providing a rating for our notes that the derivative product will not adversely affect the rating on any series of the notes. REPORTS TO NOTEHOLDERS Periodic monthly reports concerning the notes and the security for the notes will be provided to the noteholders. Those reports will not be reviewed by a certified public accounting firm. If notes are issued in book-entry form and registered in the name of Cede & Co., the nominee of The Depository Trust Company, then all reports will be provided to that entity which will in turn provide the reports to its participants. Those participants will then forward the reports to the beneficial owners of notes. See "Book-Entry Registration" in this prospectus. RISK FACTORS You should consider the following factors regarding your purchase of the notes. BECAUSE THE NOTES MAY NOT HAVE REGULAR OR PREDICTABLE PAYMENTS, YOU MAY NOT RECEIVE THE RETURN ON INVESTMENT THAT YOU EXPECTED The notes may not provide a regular or predictable schedule of payments or payment on any specific date. Accordingly, you may not receive the return on investment that you expect. THE NOTES ARE PAYABLE SOLELY FROM THE TRUST ESTATE AND YOU WILL HAVE NO OTHER RECOURSE AGAINST US We will pay interest and principal on the notes solely from the funds and assets held in the trust estate created under the indenture. No insurance or guarantee of the notes will be provided by any government agency or instrumentality, by The Student Loan Corporation or any of its affiliates, by any insurance company or by any other person or entity, except to the extent that credit enhancement is provided for a series or class of notes as described in a prospectus supplement. Therefore, your receipt of payments on the notes will depend solely o on the amount and timing of payments and collections on the student loans held in the trust estate (including payments by the guarantee agencies) and interest paid or earnings on the funds held in the accounts established pursuant to the indenture; o amounts on deposit in the Reserve Fund and other funds held in the trust estate; and o any form of credit enhancement described in the prospectus supplement. You will have no additional recourse against us or any of our other assets if those sources of funds for repayment of the notes are insufficient. YOU MAY INCUR LOSSES OR DELAYS IN PAYMENT ON YOUR NOTES IF BORROWERS DEFAULT ON THEIR STUDENT LOANS. In general, a guaranty agency reinsured by the Department of Education will guarantee 98% of each student loan. As a result, if a borrower of a student loan defaults, the trust will experience a loss of approximately 2% of the outstanding principal and accrued interest on each of the defaulted loans. The trust does not have any right to pursue the borrower for the remaining 2% unguaranteed portion. If any credit enhancement described in the related prospectus supplement is not sufficient, you may suffer a delay in payment or a loss on your investment. OUR STUDENT LOANS ARE UNSECURED AND THE ABILITY OF THE GUARANTEE AGENCIES TO HONOR THEIR GUARANTEES MAY BECOME IMPAIRED All student loans will be unsecured. As a result, the only security for payment of a student loan is the guarantee provided by the guaranty agency. A deterioration in the financial status of a guaranty agency and its ability to honor guarantee claims on defaulted student loans could result in a failure of that guarantor to make its guarantee payments to the eligible lender trustee in a timely manner. The financial condition of a guaranty agency can be adversely affected if it submits a large number of reimbursement claims to the Department of Education, which results in a reduction of the amount of reimbursement that the Department of Education is obligated to pay the guarantee agency. The Department of Education may also require a guaranty agency to return its reserve funds to the Department of Education upon a finding that the reserves are unnecessary for the guaranty agency to pay its program expenses or to serve the best interests of the federal student loan program. The inability of any guaranty agency to meet its guarantee obligations could reduce the amount of principal and interest paid to you as the owner of the notes or delay those payments past their due date. If the Department of Education has determined that a guaranty agency is unable to meet its guarantee obligations, the loan holder may submit claims directly to the Department of Education and the Department of Education is required to pay the full guaranty claim amount due with respect thereto. See "Description of the Guarantee Agencies" in this prospectus. However, the Department of Education's obligation to pay guarantee claims directly in this fashion is contingent upon the Department of Education making the determination that a guaranty agency is unable to meet its guarantee obligations. The Department of Education may not ever make this determination with respect to a guaranty agency and, even if the Department of Education does make this determination, payment of the guarantee claims may not be made in a timely manner. FAILURE TO COMPLY WITH LOAN ORIGINATION AND SERVICING PROCEDURES FOR STUDENT LOANS MAY RESULT IN LOSS OF GUARANTEE AND OTHER BENEFITS The Higher Education Act and its implementing regulations require holders of student loans and guarantee agencies guaranteeing student loans to follow specified procedures in making and collecting on student loans. If we fail to follow these procedures, or if The Student Loan Corporation or any other originator of our student loans fails to follow these procedures, the Department of Education and the guarantee agencies may refuse to pay claims on defaulted loans submitted by the servicer on behalf of the trust estate. If the Department of Education or a guaranty agency refused to pay a claim, it would reduce the revenues of the trust estate and impair our ability to pay principal and interest on the notes. See "Description of the Federal Family Education Loan Program" in this prospectus. THE INABILITY OF THE STUDENT LOAN CORPORATION TO MEET ITS REPURCHASE OBLIGATIONS MAY RESULT IN LOSSES ON YOUR INVESTMENT Under some circumstances, the trust estate has the right to require the depositor, which in turn has the right to require The Student Loan Corporation to repurchase or substitute for a student loan. This right arises generally if a breach of the representations, warranties or covenants of The Student Loan Corporation has a material adverse effect on the trust estate and if the breach is not cured within the applicable cure period. The depositor will not have the financial resources to repurchase or substitute a student loan unless it is able to enforce its rights against The Student Loan Corporation. We cannot guarantee to you that The Student Loan Corporation will have the financial resources to repurchase a student loan, or will have available student loans to substitute a student loan, if a breach occurs. In this case, you, rather than The Student Loan Corporation may bear any resulting loss. BANKRUPTCY OR INSOLVENCY OF THE STUDENT LOAN CORPORATION COULD RESULT IN PAYMENT DELAYS TO YOU We have taken steps to structure transfers of loans from The Student Loan Corporation to the depositor as a "true sale" under applicable law. A true sale helps to establish that the loans would not continue to be the property of The Student Loan Corporation if The Student Loan Corporation becomes bankrupt or insolvent. If a court disagrees with this position, we could experience delays in receiving payments on our student loans and you could then expect delays in receiving payments on your notes or even a reduction in payments on your notes. A court could also subject the student loans to a superior tax or government lien arising before the sale of the student loans to us. THE CHARACTERISTICS OF THE PORTFOLIO OF STUDENT LOANS HELD IN THE TRUST ESTATE WILL CHANGE We intend to issue several series of notes and to use the proceeds to add additional student loans to the trust estate. In addition, we may use the principal payments that we receive on our student loans to acquire additional student loans during the revolving period described in the prospectus supplement. The prospectus supplement for a series of notes will describe the characteristics of our student loan portfolio at that time. However, the actual characteristics of the loans in our portfolio will change from time to time due to factors such as repayment of the loans in the normal course of business, purchase of additional loans or the occurrence of delinquencies or defaults. Our cash flow, and our ability to make payments due on our notes, will be reduced to the extent interest is not currently payable on our student loans. The borrowers on most student loans are not required to make payments during the period in which they are in school and for certain authorized periods thereafter as described in the Higher Education Act. The Department of Education will make all interest payments while payments are deferred under the Higher Education Act on certain of the student loans. For most other student loans, interest generally will be capitalized and added to the principal balance of the loans. The trust estate will include student loans for which payments are deferred as well as student loans for which the borrower is currently required to make payments of principal and interest. The proportions of the loans in our portfolio for which payments are deferred and currently in repayment will vary during the period that the notes are outstanding. IF THE PAYMENTS WE RECEIVE ON OUR STUDENT LOANS ARE DIFFERENT FROM THE PAYMENTS THAT ARE ACTUALLY DUE WE MAY NOT BE ABLE TO PAY OUR NOTES For a variety of economic, social and other reasons, we may not receive all the payments that are actually due on our student loans. Failures by borrowers to make timely payments of the principal and interest due on the loans will affect the revenues of the trust estate, which may reduce the amounts available to pay principal and interest due on the notes. THE RATE OF PAYMENTS ON OUR STUDENT LOANS MAY AFFECT THE MATURITY AND YIELD OF THE NOTES Our student loans may be prepaid at any time without penalty. If we receive prepayments on our student loans and are not able to acquire additional student loans, we will use those amounts to redeem notes, which could shorten the average life of the notes. Factors affecting prepayment of loans include general economic conditions, prevailing interest rates and changes in the borrower's job, including transfers and unemployment. Refinancing opportunities which may provide more favorable repayment terms, including those offered under consolidation loan programs like the federal direct consolidation loan program, also affect prepayment rates. We do not have sufficient information to be able to predict the rate of prepayment with respect to the student loans in the trust estate. Scheduled payments on, and the maturities of, our student loans may be extended as authorized by the Higher Education Act. Also, periods of forbearance or refinancings through consolidation loans having longer maturities may lengthen the remaining term of the loans and the average life of the notes. Any reinvestment risks resulting from a faster or slower incidence of prepayment of loans will be borne entirely by you. The rate of principal payments to you on the notes and the yield to maturity of the notes will be directly related to the rate of payments of principal on our student loans. Changes in the rate of prepayments may significantly affect your actual yield to maturity, even if the average rate of principal prepayments is consistent with your expectations. In general, the earlier a prepayment of principal of a loan, the greater the effect on your yield to maturity. The effect on your yield as a result of principal payments occurring at a rate higher or lower than the rate anticipated by you during the period immediately following the issuance of the notes will not be offset by a subsequent like reduction, or increase, in the rate of principal payments. IF WE CANNOT PURCHASE STUDENT LOANS, WE WILL REDEEM OUR NOTES We expect to use the proceeds of the notes to acquire portfolios of student loans. We also may use principal receipts from our student loans to acquire additional student loans during applicable revolving periods. We also expect that The Student Loan Corporation will make certain representations and warranties with respect to each student loan and that we will be able to maintain certain overall portfolio characteristics in connection with these acquisitions. If The Student Loan Corporation does not deliver the student loans, or if we are not able to use note proceeds or principal payments that we receive on our student loans to acquire additional loans that meet our requirements, we will use those amounts to redeem your notes. Each student loan sale agreement requires The Student Loan Corporation to repurchase its loans if the representations and warranties made by The Student Loan Corporation prove not to be true or if a claim for a loan is denied because of events occurring before the sale. We cannot be certain, however, that The Student Loan Corporation will be financially able to repurchase loans if called upon to do so. THE USE OF MASTER PROMISSORY NOTES MAY COMPROMISE THE INDENTURE TRUSTEE'S SECURITY INTEREST IN THE STUDENT LOANS On July 1, 1999, the master promissory note began to be used as evidence of Federal Stafford Loans (subsidized and unsubsidized) made to borrowers under the Federal Family Education Loan Program. If a master promissory note is used, a borrower executes only one promissory note with each lender. Subsequent student loans from that lender are evidenced by a confirmation sent to the student. Therefore, if a lender originates multiple student loans to the same student, all the student loans are evidenced by a single promissory note. Under the Higher Education Act, each student loan made under a master promissory note may be sold independently of any other student loan made under that same master promissory note. Each student loan is separately enforceable on the basis of an original or copy of the master promissory note. Also, a security interest in these student loans may be perfected either through the secured party taking possession of the original or a copy of the master promissory note, or the filing of a financing statement. Prior to the master promissory note, each student loan made under the Federal Family Education Loan Program was evidenced by a separate note. Assignment of the original note was required to effect a transfer and possession of a copy did not perfect a security interest in the loan. It is possible that student loans transferred to the trust estate may be originated under a master promissory note. If the originator were to deliver a copy of the master promissory note, in exchange for value, to a third party that did not have knowledge of the indenture trustee's lien, that third party may also claim an interest in the student loan. It is possible that the third party's interest could be prior to or on a parity with the interest of the indenture trustee. Federal PLUS Loans and Federal Consolidation Loans are not originated with master promissory notes. Each of these loans are made under standard loan applications and promissory notes required by the Department of Education. A SECONDARY MARKET FOR YOUR NOTES MAY NOT DEVELOP, AND THIS COULD DIMINISH THEIR VALUE Each series of notes will be a new issue without an established trading market. We do not intend to list any series of notes on any national exchange. As a result, we cannot assure you that a secondary market for the notes will develop, and therefore it may be difficult for you to resell your notes at the time and at a price you desire. If a secondary market does not develop, the spread between the bid price and the asked price for the notes may widen, thereby reducing the net proceeds to you from the sale of your notes. CONGRESSIONAL ACTIONS MAY AFFECT OUR STUDENT LOAN PORTFOLIO The Department of Education's authority to provide interest subsidies and federal insurance for loans originated under the Higher Education Act terminates on a date specified in the Higher Education Act. The Higher Education Amendments of 1998 extended the authorization for the Federal Family Education Loan Program to loans made on or before September 30, 2004. While Congress has consistently extended the effective date of the Higher Education Act and the Federal Family Education Loan Program, it may elect not to reauthorize the Department's ability to provide interest subsidies and federal insurance for loans. While this failure to reauthorize would not affect the student loans we then owned, it would reduce the number of loans available for us to acquire in the future. Funds for payment of interest subsidies and other payments under the Federal Family Education Loan Program are subject to annual budgetary appropriation by Congress. In recent years, federal budget legislation has contained provisions that restricted payments made under the Federal Family Education Loan Program to achieve reductions in federal spending. Future federal budget legislation may adversely affect expenditures by the Department of Education, and the financial condition of the guarantee agencies. Congressional amendments to the Higher Education Act or other relevant federal laws, and rules and regulations promulgated by the Secretary of Education, may adversely impact holders of student loans. For example, changes might be made to the rate of interest paid on student loans, to the level of insurance provided by guarantee agencies or to the servicing requirements for student loans. See "Description of the Federal Family Education Loan Program" and "Description of the Guarantee Agencies" in this prospectus. COMPETITION CREATED BY THE FEDERAL DIRECT STUDENT LOAN PROGRAM MAY IMPACT OUR STUDENT LOAN PROGRAM In 1992, Congress created the Federal Direct Student Loan Program. Under this program, the Department of Education makes loans directly to student borrowers through the educational institutions that they attend. The volume of student loans made under the Federal Family Education Loan Program and available to us for purchase may be reduced to the extent loans are made to students under the Federal Direct Student Loan Program. If the Federal Direct Student Loan Program expands, our servicer may experience increased costs due to reduced economies of scale to the extent the volume of loans serviced by the servicer is reduced. Those cost increases could affect the ability of the servicer to satisfy its obligations to service our student loans. Loan volume reductions could further reduce revenues received by the guarantee agencies available to pay claims on defaulted student loans. The level of competition currently in existence in the secondary market for loans made under the Federal Family Education Loan Program could be reduced, resulting in fewer potential buyers of student loans and lower prices available in the secondary market for those loans. The Department of Education has implemented a direct consolidation loan program, which may further reduce the volume of Federal Family Education Loan Program loans available to purchase and may increase the rate of repayment of our student loans. See "Description of the Federal Family Education Loan Program" in this prospectus. THE CLASS B AND CLASS C NOTES ARE SUBORDINATED TO THE CLASS A NOTES Payments of interest and principal on the Class B and Class C notes are subordinated in priority of payment to payments of interest and principal due on the Class A notes and payments of interest and principal on the Class C notes are subordinated in priority of payment to payments of interest and principal due on the Class B notes and Class A notes. Under certain redemption situations, principal on Class B notes may be redeemed while Class A notes remain outstanding and the principal on the Class C notes may be redeemed while the Class A notes and certain of the Class B notes remain outstanding. See "Description of the Notes--Notice and Partial Redemption of Notes." Class B notes are also subordinated to the Class A notes and the Class C notes are also subordinate to the Class B notes as to the direction of remedies upon an event of default. If any losses on our student loans are allocated to the notes, the losses would be allocated first to the Class C notes until the principal balance of the Class C notes is reduced to zero, then to the Class B notes until the principal balance of the Class B notes is reduced to zero and last to the Class A notes. WE INTEND TO ISSUE ADDITIONAL NOTES SECURED BY THE TRUST ESTATE We intend to issue additional notes that are secured by the same trust estate that is securing your notes pursuant to a supplemental indenture, without obtaining the consent or approval of the owners of any notes then outstanding. Those additional notes may be issued on a parity with or subordinate to any of the Class A notes and senior to, on a parity with or subordinate to the Class B or Class C notes. Before issuing additional notes, we must receive written evidence from each rating agency then rating any outstanding notes that the rating or ratings will not be reduced or withdrawn as a result of the issuance of the proposed additional notes. See "Additional Notes" in this prospectus. DIFFERENT RATES OF CHANGE IN INTEREST RATE INDEXES MAY AFFECT OUR CASH FLOW The interest rates on our notes may fluctuate from one interest period to another as a result of the auction procedures described in this prospectus or changes in LIBOR or Treasury security rates. Our Stafford and PLUS student loans bear interest at the rates which are effectively based upon the bond equivalent yield of the 91-day Treasury Bill rate or the 90-day Commercial Paper rate. Although some older Federal Consolidation Loans have a variable rate, loans made on or after October 1, 1998 bear a fixed rate, which is determined at the time the loan is made. See "Description of the Federal Family Education Loan Program" in this prospectus. If there is a decline in the rates payable on our student loans, the amount of interest received may be reduced. If the interest rates payable on our notes do not decline in a similar manner and time, we may not have sufficient funds to pay interest on the notes when it becomes due. Even if there is a similar reduction in the rates applicable to the notes, there may not necessarily be a reduction in the other amounts required to be paid out of the trust estate, such as administrative expenses, causing interest payments to be deferred to future periods. Sufficient funds may not be available in future periods to make up for any shortfalls in the current payments of interest on the notes or expenses of the trust estate. THE NOTES MAY BE ISSUED ONLY IN BOOK-ENTRY FORM We expect that each class of notes of each series will be initially represented by one or more certificates registered in the name of Cede & Co., the nominee for The Depository Trust Company, and will not be registered in your name or the name of your nominee. If we elect to issue definitive notes registered in the name of the holder for a class or series of the notes, we will so state in the related prospectus supplement. Unless and until definitive securities are issued, holders of the notes will not be recognized by the indenture trustee as registered owners as that term is used in the indenture. Unless and until definitive securities are issued, holders of the notes will only be able to exercise the rights of registered owners indirectly through The Depository Trust Company and its participating organizations. See "Book-Entry Registration" in this prospectus. THE RATINGS OF THE NOTES ARE NOT A RECOMMENDATION TO PURCHASE AND MAY CHANGE It is a condition to our issuance of the notes that they be rated as indicated in the related prospectus supplement. Ratings are based primarily on the creditworthiness of the underlying student loans, the levels of subordination, the amount of any credit enhancement and the legal structure of the transaction. The ratings are not a recommendation to you to purchase, hold or sell any class of notes. The ratings do not take into account the market price or suitability for you as an investor. An additional rating agency may rate the notes, and that rating may not be equivalent to the initial rating described in the related prospectus supplement. Ratings may be lowered or withdrawn by any rating agency if in the rating agency's judgment circumstances so warrant. A lowered rating is likely to decrease the price a subsequent purchaser will be willing to pay for your notes. SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS Statements in this prospectus and the prospectus supplement, including those concerning our expectations as to our ability to acquire eligible student loans, to structure and to issue competitive securities, and certain of the information presented in this prospectus and the prospectus supplement, constitute forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may vary materially from our expectations. For a discussion of the factors which could cause actual results to differ from expectations, please see the caption entitled "Risk Factors" in this prospectus and in the prospectus supplement. DESCRIPTION OF THE NOTES The notes of each series will be issued pursuant to the indenture and related supplemental indenture of trust that we will enter into with the indenture trustee. The following description of the notes is only a summary of their principal terms. It is not complete. You should refer to the provisions of the indenture and related supplemental indenture for a complete description of the terms of the notes. Definitions of some of the terms used in this description can be found in the Glossary of Terms appearing at page 63 of this prospectus. FIXED RATE NOTES The fixed rate notes will have a stated maturity set forth in the applicable prospectus supplement. The notes will bear interest from the date and at the rate per annum specified in the applicable prospectus supplement. The dates on which the holders of fixed rate notes will receive payments of principal and interest will be specified in the applicable prospectus supplement. AUCTION RATE SECURITIES The auction rate securities will have a stated maturity set forth in the applicable prospectus supplement and will bear interest at the rate per annum specified in the prospectus supplement through the first auction date. The interest period for auction rate securities will initially consist of the number of days set forth in the applicable prospectus supplement. The interest rate for the auction rate securities will be reset at the interest rate determined pursuant to the auction procedures described below, but the rate will not exceed the maximum auction rate per annum set forth in the applicable prospectus supplement. Interest on the auction rate securities will accrue daily and will be computed for the actual number of days elapsed on the basis of a year consisting of 360 days or 365 days as specified in the prospectus supplement. Interest on the auction rate securities will be payable on the first business day following the expiration of each interest period for the notes. Determination of Note Interest Rate. The procedures that will be used in determining the interest rates on the auction rate securities are summarized in the following paragraphs. The interest rate on each class of auction rate securities will be determined periodically by means of a "Dutch Auction." In this Dutch Auction, investors and potential investors submit orders through an eligible broker-dealer as to the principal amount of auction rate securities they wish to buy, hold or sell at various interest rates. The broker-dealers submit their clients' orders to the auction agent. The auction agent processes all orders submitted by all eligible broker-dealers and determines the interest rate for the upcoming interest period. The broker-dealers are notified by the auction agent of the interest rate for the upcoming interest period and are provided with settlement instructions relating to purchases and sales of auction rate securities. Auction rate securities will be purchased and sold between investors and potential investors at a price equal to their then-outstanding principal balance plus any accrued interest. Bankers Trust Company will serve as auction agent for the auction rate securities and Salomon Smith Barney Inc. will serve as a broker-dealer, unless otherwise specified in the related prospectus supplement. In the auction, the following types of orders may be submitted: o "bid/hold orders"--specify the minimum interest rate that a current investor is willing to accept in order to continue to hold auction rate securities for the upcoming interest period; o "sell orders"--an order by a current investor to sell a specified principal amount of auction rate securities, regardless of the upcoming interest rate; and o "potential bid orders"--specify the minimum interest rate that a potential investor, or a current investor wishing to purchase additional auction rate securities, is willing to accept in order to buy a specified principal amount of auction rate securities. If an existing investor does not submit orders with respect to all its auction rate securities, the investor will be deemed to have submitted a hold order at the new interest rate for that portion of the auction rate securities for which no order was received. The following example helps illustrate how the auction procedures are used in determining the interest rate on the auction rate securities. (a) Assumptions: 1. Denominations (Units) = $50,000 2. Interest period = 28 days 3. Principal amount outstanding = $50 Million (1000 Units) (b) Summary of all orders received for the auction BID/HOLD ORDERS SELL ORDERS POTENTIAL BID ORDERS ---------------------- --------------- ----------------------- 20 Units at 2.90% 100 Units Sell 40 Units at 2.95% 60 Units at 3.02% 100 Units Sell 60 Units at 3.00% 120 Units at 3.05% 200 Units Sell 100 Units at 3.05% =============== 200 Units at 3.10% 400 Units 100 Units at 3.10% 200 Units at 3.12% 100 Units at 3.11% ====================== 600 Units 100 Units at 3.14% 200 Units at 3.15% ======================= 700 Units The total units under bid/hold orders and sell orders always equal the issue size (in this case 1000 units), less any units held by investors not submitting a bid (in this case 0 units). (c) Auction agent organizes orders in ascending order CUMULATIVE CUMULATIVE ORDER NUMBER TOTAL ORDER NUMBER TOTAL NUMBER OF UNITS (UNITS) PERCENT NUMBER OF UNITS (UNITS) PERCENT - --------- ---------- ---------- ------- ------- -------- ---------- ------- 1. 20 (W) 20 2.90% 7. 200(W) 600 3.10% 2. 40 (W) 60 2.95% 8. 100(W) 700 3.10% 3. 60 (W) 120 3.00% 9. 100(W) 800 3.11% 4. 60 (W) 180 3.02% 10. 200(W) 1000 3.12% 5. 100 (W) 280 3.05% 11. 100(L) 3.14% 6. 120 (W) 400 3.05% 12. 200(L) 3.15% - ------------ (W) Winning Order (L) Losing Order Order #10 is the order that clears the market of all available units. All winning orders are awarded the winning rate (in this case, 3.12%) as the interest rate for the next interest period, at the end of which another auction will be held. Multiple orders at the winning rate are allocated units on a pro rata basis. Regardless of the results of the auction, the interest rate will not exceed the maximum auction rate specified in the applicable prospectus supplement. The example assumes that a successful auction has occurred, that is, that all sell orders and all bid/hold orders below the new interest rate were fulfilled. However, there may be insufficient potential bid orders to purchase all the auction rate securities offered for sale. In these circumstances, the interest rate for the upcoming interest period will equal the maximum auction rate. Also, if all the auction rate securities are subject to hold orders (i.e., each holder of auction rate securities wishes to continue holding its auction rate securities, regardless of the interest rate), the interest rate for the upcoming interest period will equal the all hold rate, which is the LIBOR rate for a period comparable to the auction period less 0.20%, or as otherwise specified in the related prospectus supplement. If a payment default has occurred, the rate will be the non-payment rate, which will be specified in the related prospectus supplement. Maximum Auction Rate And Interest Carry-Overs. If the auction rate for a class of auction rate securities is greater than the maximum auction rate described in the related prospectus supplement, then the interest rate applicable to those auction rate securities will be the maximum auction rate. If the interest rate for a class of auction rate securities is set at the maximum auction rate, the difference between the auction rate and the maximum auction rate will be carried over for that class of auction rate securities. The carry-over amount will bear interest calculated at the One-Month LIBOR rate, or as otherwise specified in the related prospectus supplement. The carry-over amount, and interest accrued thereon, for a class of auction rate securities will be paid by the indenture trustee on an interest payment date if there are sufficient moneys in the Revenue Fund to pay all interest due on the notes on that interest payment date, and in the case of subordinate notes, payment of the interest carryover on more senior notes. Any carry-over amount, and any interest accrued on the carry-over amount, due on any auction rate note which is to be redeemed will be paid to the registered owner on the redemption date to the extent that moneys are available. The prospectus supplement for a series of notes will specify whether or not the carry-over amount will be included in the redemption price if an auction rate security is redeemed. Changes In Auction Period. We may, from time to time, change the length of the auction period for a class of auction rate securities in order to conform with then current market practice with respect to similar securities or to accommodate economic and financial factors that may affect or be relevant to the length of the auction period and the interest rate borne by the auction rate securities. We will initiate the auction period adjustment by giving written notice to the indenture trustee, the auction agent, the applicable broker-dealer, each rating agency and the registered owners of the notes at least 10 days prior to auction date for the notes. Any adjusted auction period will be at least 7 days but not more than 366 days. The auction period adjustment will take effect only if approved by the market agent and if the auction agent receives orders sufficient to complete the auction for the new auction period at a rate of interest below the maximum auction rate. Changes In The Auction Date. The applicable broker-dealer, with the written consent of the administrator on behalf of SLC Student Loan Trust-I, may specify a different auction date for a class of auction rate securities in order to conform with then current market practice with respect to similar securities or to accommodate economic and financial factors that may affect or be relevant to the day of the week constituting an auction date for the auction rate securities. If the administrator consents to the change, the broker-dealer agent will provide notice of its determination to specify an earlier auction date in writing at least 10 days prior to the proposed changed auction date to the indenture trustee, the auction agent, SLC Student Loan Trust-I, each rating agency and the registered owner. LIBOR RATE NOTES The LIBOR rate notes will be dated their date of issuance and will have a stated maturity set forth in the applicable prospectus supplement. Interest on the LIBOR rate notes will be paid in arrears on each interest payment date. The interest payment date for the LIBOR rate notes will be the first business day following the end of the interest period for the notes specified in the applicable prospectus supplement, unless another date is specified in the prospectus supplement. The amount of interest payable to registered owners of LIBOR rate notes for any interest period will be calculated by the indenture trustee on the basis of a 360-day year for the number of days actually elapsed. The rate of interest on the LIBOR rate notes for each interest period will be determined by a calculation agent identified in the related prospectus supplement. The interest rate will be the LIBOR rate for the interest period for the notes plus the margin specified in the related prospectus supplement. The interest rate payable on the LIBOR rate notes cannot exceed the adjusted student loan rate specified in the prospectus supplement. The adjusted student loan rate is the percentage equivalent of a fraction: o the numerator of which is equal to the sum of the expected interest collections on our student loans and payments we receive on a derivative product, if any, less the sum of the amounts payable to the Department of Education and guarantee agencies with respect to the student loans, the servicing fee, the administration fee, and payments we make on derivative products, if any, with respect to an interest period; and o the denominator of which is the aggregate principal amount of the notes as of the last day of the interest period. With respect to any interest period, expected interest collections include o the amount of interest accrued with respect to the student loans for the interest period preceding the applicable interest payment date, whether or not that interest is actually paid, o all interest subsidy payments and special allowance payments estimated to have accrued for the interest period preceding the applicable interest payment date, whether or not actually received; and o investment earnings on assets in the trust estate for the interest period preceding the applicable interest payment date. If the interest rate for LIBOR rate notes determined by the calculation agent is greater than the adjusted student loan rate or any other maximum interest rate specified in the related prospectus supplement, the difference will be carried forward and paid when moneys are available in the Revenue Fund. However, no interest carry-over will be payable unless the aggregate value of our student loans and other assets in the trust estate determined in accordance with the indenture exceeds the principal balance of the outstanding notes issued under the indenture. Any interest carry-over will be payable on an interest payment date, but only out of funds remaining in the Revenue Fund after payment of all interest due on the notes, and in the case of subordinate notes, payment of the interest carryover on more senior notes. TREASURY RATE NOTES The treasury rate notes will be dated their date of issuance and will have a stated maturity set forth in the applicable prospectus supplement. Interest on the treasury rate notes will be paid in arrears on each interest payment date. An interest payment date for the treasury rate notes means the first business day following the end of the interest period specified in the applicable prospectus supplement, or as otherwise specified in the related prospectus supplement. The amount of interest payable on the treasury rate notes will generally be adjusted weekly on the calendar day following each auction of 91-day Treasury Bills which are direct obligations of the United States with a maturity of 13 weeks. The rate will be calculated by a calculation agent to be the sum of the bond equivalent yield for auctions of 91-day Treasury Bills on a rate determination date for an interest period, plus a spread described in the related prospectus supplement. Interest on the treasury rate notes will be computed for the actual number of days elapsed on the basis of a year consisting of 365 or 366 days, as applicable. The interest rate payable on the treasury rate notes for any interest period cannot at any time exceed the adjusted student loan rate. The adjusted student loan rate will be determined in the same manner as described above for LIBOR rate notes. If the interest rate for the treasury rate notes determined by the calculation agent is greater than the adjusted student loan rate or any other maximum interest rate specified in the related prospectus supplement, the difference will be carried forward and paid when moneys are available in the Revenue Fund. However, no interest carry-over will be payable unless the aggregate value of our student loans and other assets in the trust estate determined in accordance with the indenture exceeds the principal balance of the outstanding notes issued under the indenture. Any interest carry-over will be payable on an interest payment date, but only out of funds remaining in the Revenue Fund after payment of all interest due on the notes, and in the case of subordinate notes, payment of the interest carryover on more senior notes. ACCRUAL NOTES Accrual notes will be entitled to payments of accrued interest commencing only on the interest payment date, or under the circumstances specified in the related prospectus supplement. Prior to the time interest is payable on any class of accrual notes, the amount of accrued interest will be added to the note principal balance thereof on each interest payment date. The principal balance of the accrual notes will begin to be paid from available funds received with respect to the student loans after the date that accrued interest is no longer being added to the principal balance of the notes. Accrued interest for each interest payment date will be equal to interest at the applicable interest rate accrued for a specified period (generally the period between interest payment dates) on the outstanding note principal balance thereof immediately prior to such interest payment date. PAYMENTS ON THE NOTES The principal of the notes due at maturity or redemption in whole will be payable at the principal office of the indenture trustee upon presentation and surrender of the notes, if the notes were issued in definitive form. Payment of principal on any notes in connection with a partial redemption and all interest payments will be made to the registered owner by check or draft mailed on the interest payment date by the indenture trustee to the registered owner at his address as it last appears on the registration books kept by the indenture trustee at the close of business on the record date for such interest payment date. If interest is not timely paid, it will be paid to the registered owner of the notes as of the close of business on a special record date for payment of any of the defaulted interest. A special record date will be fixed by the indenture trustee whenever moneys become available for payment of the defaulted interest, and notice of the special record date will be given to the registered owners of the notes. Payment of principal and interest to a securities depository or its nominee, and to any other registered owner owning at least $1,000,000 principal amount of the notes upon written request delivered to the indenture trustee, will be paid by wire transfer within the United States to the bank account number filed no later than the record date or special record date with the indenture trustee. All payments on the notes will be made in United States dollars. REVOLVING PERIOD We may use principal payments that we receive on the student loans to acquire additional student loans for a period of time described in the prospectus supplement. During this revolving period, we will pay interest on the notes as it becomes due. However, we will not make principal payments on the notes or redeem notes during the revolving period, unless the terms of a particular series of notes provide for payments of principal or redemptions during the revolving period. The revolving period during which we may acquire additional student loans may be extended with the consent of the rating agencies providing ratings for our notes or the provider of any credit enhancement for the notes. MANDATORY REDEMPTION The notes of a series are subject to mandatory redemption, in whole or in part, on the first interest payment date after the end of the revolving period if so provided in the applicable prospectus supplement. Redemptions will be made from principal payments received on the student loans and other excess revenues on deposit in the Acquisition Fund. The notes of a series are also subject to mandatory redemption on the interest payment date specified with respect to the series in the related prospectus supplement, in an amount equal to the proceeds from sale of the notes, if any, not previously used to acquire student loans that are held in the Acquisition Fund. Mandatory redemptions will be made solely from moneys available for redemption in the Acquisition Fund and only as provided above in this paragraph. We are not required to provide any direction to the indenture trustee with respect to a mandatory redemption. See "Notice and Partial Redemption of Notes" below for a discussion of the order in which notes of any series will be redeemed. OPTIONAL REDEMPTION The notes of a series are subject to optional redemption, if so provided in the applicable prospectus supplement, from funds received by the indenture trustee constituting interest on student loans remaining in the Revenue Fund after all other prior required payments have been made. See "Notice and Partial Redemption of Notes" below for a discussion of the order in which notes will be redeemed. The notes are subject to optional redemption or purchase, in whole only, on any interest payment date on which the aggregate current principal balance of the notes is less than or equal to 10% of the initial aggregate principal balance of all the notes issued under the indenture on their respective date of issuance. The redemption or purchase will occur on the interest payment date following the date on which funds sufficient to pay the redemption or purchase price are deposited with the indenture trustee. All notes which are redeemed or purchased shall be canceled by the indenture trustee and be disposed of in a manner satisfactory to the indenture trustee and the administrator. REDEMPTION OR PURCHASE PRICE Upon redemption or optional purchase, the price to be paid to the holder of a note, other than an original issue discount note, will be an amount equal to the aggregate current principal balance plus accrued interest to the date fixed for redemption. The prospectus supplement for a series of notes will specify whether or not the carry-over amount will be included in the redemption price. NOTICE AND PARTIAL REDEMPTION OF NOTES The indenture trustee will provide notice of any redemption or purchase by mailing a copy of the redemption or purchase notice to the registered owner of any note being redeemed or purchased, and to the auction agent with respect to the auction rate securities designated for redemption or purchase, not less than 15 days prior to the redemption or purchase date. If less than all of the notes of any series are to be redeemed or purchased, we will determine the notes of each class of that series to be redeemed or purchased. Generally, all of the Class A notes will be redeemed prior to redemption of any Class B notes, and all of the Class B notes will be redeemed before any of the Class C notes are redeemed. However, we may redeem Class B notes while Class A notes remain outstanding if after the redemption of the Class B notes, the aggregate market value of the assets held in the trust estate will equal the percentage of all Class A notes then outstanding under the indenture that is specified in a prospectus supplement. Similarly, we may redeem Class C notes while Class A notes and Class B notes remain outstanding if after the redemption of the Class C notes, the aggregate market value of the assets held in the trust estate will equal the percentage of all Class A notes and Class B notes then outstanding under the indenture that is specified in a prospectus supplement. SECURITY AND SOURCES OF PAYMENT FOR THE NOTES GENERAL The notes are limited obligations of SLC Student Loan Trust-I, secured by and payable solely from the trust estate. The following assets serve as security for the notes: o revenues, consisting of all principal and interest payments, proceeds, charges and other income received by the indenture trustee, SLC Student Loan Trust-I or the servicer, on account of any student loan, including interest benefit payments and any special allowance payments with respect to any student loan, and investment income from all funds created under the indenture and any proceeds from the sale or other disposition of the student loans; o all moneys and investments held in the funds created under the indenture; and o student loans purchased with money from the Acquisition Fund or otherwise acquired or originated and pledged or credited to the Acquisition Fund. In addition, the trust estate may include rights that provide credit enhancement (for example, the right to draw under any letter of credit or note insurance) as described in this prospectus and in the related prospectus supplement. FLOW OF FUNDS The following funds will be created by the indenture trustee under the indenture for the benefit of the registered owners: o Revenue Fund o Acquisition Fund o Reserve Fund An Operating Fund will be established separately by SLC Student Loan Trust-I, and will not constitute security for the notes under the indenture. Neither the indenture trustee nor the registered owners will have any right, title or interest in the Operating Fund. All funds received with respect to the student loans are initially deposited in the Revenue Fund and allocated between principal and interest. The principal portion is subsequently transferred to the Acquisition Fund. ACQUISITION FUND; PURCHASE AND SALE OF STUDENT LOANS We will deposit proceeds from the sale of any notes into the Acquisition Fund. During the revolving period funds will, and thereafter certain funds may, be transferred to the Acquisition Fund from the Revenue Fund. Student loans pledged to the trust estate will be held by the indenture trustee or its agent or bailee and accounted for as a part of the Acquisition Fund. Money on deposit in the Acquisition Fund will be used to pay costs of issuance of the notes, to redeem notes in accordance with the provisions of any supplemental indenture, and to acquire student loans. See "Description of the Notes--Revolving Period." If the administrator determines that money held in the Acquisition Fund cannot be used to acquire additional student loans, then we may redeem notes in accordance with any supplemental indenture. See "Description of the Notes--Mandatory Redemption." If on any note payment date the money on deposit in the Revenue Fund is not sufficient to make payments of principal and interest due on the notes, then the amount of the deficiency will be transferred from money available in the Acquisition Fund. The eligible lender trustee, will be the legal owner of the student loans pledged to the trust estate and the indenture trustee will have a security interest in the student loans for and on behalf of the owners of the notes. The student loans will be held in the name of the eligible lender trustee for the account of SLC Student Loan Trust-I, but for the benefit of the holders of the notes. REVENUE FUND The indenture trustee will deposit into the Revenue Fund all revenues derived from student loans, from money or assets on deposit in the Acquisition Fund or the Reserve Fund, from net payments received on derivative products and any other amounts as we may direct. On each note payment date and derivative payment date, money in the Revenue Fund will be used and transferred to other funds or persons in the following order, or as otherwise specified in the related prospectus supplement: o on a parity basis, to pay interest due on any Class A notes and any derivative payment that is due and secured on a parity with the Class A notes; o on a parity basis, to pay the principal of or premium, if any, due on any Class A notes; o on a parity basis, to pay interest due on any Class B notes and any derivative payment that is due and secured on a parity with the Class B notes; o on a parity basis, to pay the principal of or premium, if any, due on any Class B notes; o on a parity basis, to pay interest due on any Class C notes and any derivative payment that is due and secured on a parity with the Class C notes; o on a parity basis, to pay the principal of or premium, if any, due on any Class C notes; o to the Reserve Fund the amount, if any, described under "Reserve Fund" below, up to the maximum transfer amount specified in the prospectus supplement; o to pay interest and principal with premium, if any, due on any subordinated obligations of the SLC Student Loan Trust-I; o during the revolving period, at the option of the administrator, to the Acquisition Fund; and o to SLC Student Loan Trust-I at its option and to the extent permitted under the indenture. We may transfer moneys in the Revenue Fund to the Operating Fund, subject to the limitation described under "Operating Fund" below. RESERVE FUND Upon the sale of each class of notes, the indenture trustee will deposit to the Reserve Fund the amount, if any, specified in each supplemental indenture. On each interest payment date, to the extent money in the Revenue Fund is not sufficient to make payment of the interest then due on the notes, the amount of the deficiency shall be paid directly from the Reserve Fund, after any transfers from the Acquisition Fund. Money in the Reserve Fund may be used to pay principal on the notes only on the date of their maturity. If the Reserve Fund is used as described above, the indenture trustee will restore the Reserve Fund to the level specified in a prospectus supplement by transfers from the Revenue Fund up to the maximum transfer amount specified in the prospectus supplement. If the full amount required to restore the Reserve Fund to the required level is not available in the Revenue Fund on the next note payment date, the indenture trustee shall continue to transfer funds from the Revenue Fund as they become available until the deficiency in the Reserve Fund has been eliminated up to the maximum transfer amount. On any day that the amount in the Reserve Fund exceeds the required level for any reason, the indenture trustee, at the direction of the administrator, will transfer the excess to the Acquisition Fund. OPERATING FUND The indenture trustee will deposit to the Operating Fund the amount, if any, specified in each prospectus supplement. The Operating Fund is a special fund created and used to pay program expenses of SLC Student Loan Trust-I. The amount deposited in the Operating Fund by transfer from the Revenue Fund and, if necessary, from the Acquisition Fund, and the schedule of deposits will be determined by the administrator. However, the amount so transferred in any one fiscal year may not exceed the amount budgeted by SLC Student Loan Trust-I for that fiscal year. TRANSFERS TO SLC STUDENT LOAN TRUST-I Transfers from the Revenue Fund may be made to SLC Student Loan Trust-I if the balance in the Reserve Fund exceeds the required level specified in a prospectus supplement. Additionally, transfers may be made to SLC Student Loan Trust-I only if immediately after taking into account the transfer, the aggregate market value of the assets in the trust estate will be equal to a percentage of the unpaid principal amount of the notes outstanding that is acceptable to each rating agency then rating the notes. INVESTMENT OF FUNDS HELD BY INDENTURE TRUSTEE Upon our order, the indenture trustee will invest amounts credited to any fund established under the indenture in investment securities described in the indenture. In the absence of an order from the administrator, and to the extent practicable, the indenture trustee will invest amounts held under the indenture in direct obligations of, or in obligations fully guaranteed by, the United States. The indenture trustee is not responsible or liable for any losses on investments made by it or for keeping all funds held by it fully invested at all times. Its only responsibility is to comply with our investment instructions in a non-negligent manner. BOOK-ENTRY REGISTRATION Investors acquiring beneficial ownership interests in the notes issued in book-entry form will hold their notes through The Depository Trust Company in the United States, or Clearstream, Luxembourg or Euroclear (in Europe) if they are participants of these systems, or indirectly through organizations which are participants in these systems. The book-entry notes will be issued in one or more instruments which equal the aggregate principal balance of the series of notes and will initially be registered in the name of Cede & Co., the nominee of The Depository Trust Company. Clearstream, Luxembourg and Euroclear will hold omnibus positions on behalf of their participants through customers' securities accounts in Clearstream, Luxembourg's and Euroclear's name on the books of its respective depositary which in turn will hold positions in customers' securities accounts in such depositary's name on the books of The Depository Trust Company. Except as described below, no person acquiring a book-entry note will be entitled to receive a physical certificate representing the notes. Unless and until Definitive Certificates are issued, it is anticipated that the only holder of the notes will be Cede & Co., as nominee of The Depository Trust Company. The Depository Trust Company is a New York-chartered limited-purpose trust company that performs services for its participants, some of which, and/or their representatives, own The Depository Trust Company. In accordance with its normal procedures, The Depository Trust Company is expected to record the positions held by each of its participants in notes issued in book-entry form, whether held for its own account or as nominee for another person. In general, beneficial ownership of book-entry notes will be subject to the rules, regulations and procedures governing The Depository Trust Company and its participants as in effect from time to time. Purchases of the notes under The Depository Trust Company system must be made by or through direct participants, which are to receive a credit for the notes on The Depository Trust Company's records. The ownership interest of each actual purchaser of each series of notes, or beneficial owner, is in turn to be recorded on the direct and indirect participants' records. Beneficial owners shall not receive written confirmation from The Depository Trust Company of their purchase, but beneficial owners are expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the direct or indirect participant through which the beneficial owner entered into the transaction. Transfers of ownership interests in the notes are to be accomplished by entries made on the books of participants acting on behalf of beneficial owners. Beneficial owners shall not receive certificates representing their ownership interests in the notes, except in the event that use of the book-entry system for the series of any notes is discontinued. To facilitate subsequent transfers, all notes deposited by participants with The Depository Trust Company are registered in the name of The Depository Trust Company's partnership nominee, Cede & Co. The deposit of such notes with The Depository Trust Company and their registration in the name of Cede & Co. effect no change in beneficial ownership. The Depository Trust Company has no knowledge of the actual beneficial owners of notes; The Depository Trust Company's records reflect only the identity of the direct participants to whose accounts such notes are credited, which may or may not be the beneficial owners. The participants remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by The Depository Trust Company to direct participants, by direct participants to indirect participants, and by direct participants and indirect participants to beneficial owners are governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Redemption notices shall be sent to Cede & Co. If less than all of a class of the notes of any series are being redeemed, The Depository Trust Company's practice is to determine by lot the amount of the interest of each direct participant in such class to be redeemed. Neither The Depository Trust Company nor Cede & Co. will consent or vote with respect to the notes of any series. Under its usual procedures, The Depository Trust Company mails an omnibus proxy to SLC Student Loan Trust-I, or the indenture trustee, as appropriate, as soon as possible after the record date. The omnibus proxy assigns Cede & Co.'s consenting or voting rights to those direct participants to whose accounts the notes are credited on the record date. Principal and interest payments on the notes are to be made to The Depository Trust Company. The Depository Trust Company's practice is to credit direct participant's accounts on the due date in accordance with their respective holdings shown on The Depository Trust Company's records unless The Depository Trust Company has reason to believe that it will not receive payment on the due date. Payments by participants to beneficial owners are governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and shall be the responsibility of the participant and not of The Depository Trust Company, the indenture trustee or SLC Student Loan Trust-I, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal and interest to The Depository Trust Company is the responsibility of SLC Student Loan Trust-I, or the indenture trustee. Disbursement of such payments to direct participants shall be the responsibility of The Depository Trust Company, and disbursement of such payments to the beneficial owners shall be the responsibility of direct and indirect participants. The Depository Trust Company may discontinue providing its services as securities depository with respect to the notes of any series at any time by giving reasonable notice to SLC Student Loan Trust-I or the indenture trustee. In the event that a successor securities depository is not obtained, note certificates are required to be printed and delivered. Clearstream Banking, societe anonyme, Luxembourg, formerly Cedelbank ("Clearstream, Luxembourg"), has advised that it is incorporated under the laws of the Grand Duchy of Luxembourg as a professional depository. Clearstream, Luxembourg holds securities for its participating organizations. Clearstream, Luxembourg facilitates the clearance and settlement of securities transactions between Clearstream, Luxembourg participants through electronic book-entry changes in accounts of Clearstream, Luxembourg participants, thereby eliminating the need for physical movement of certificates. Clearstream, Luxembourg provides to its Clearstream, Luxembourg participants, among other things, services for safekeeping, administration, clearance and settlement of internationally traded securities and securities lending and borrowing. Clearstream, Luxembourg interfaces with domestic markets in several countries. As a professional depository, Clearstream, Luxembourg is subject to regulation by the Luxembourg Commission for the Supervision of the Financial Sector (the "CSSF"). Clearstream, Luxembourg participants are recognized financial institutions around the world, including underwriters, securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations. Indirect access to Clearstream, Luxembourg is also available to others, such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a Clearstream, Luxembourg participant, either directly or indirectly. Euroclear has advised that it was created in 1968 to hold securities for participants of Euroclear and to clear and settle transactions between Euroclear participants through simultaneous electronic book-entry delivery against payment, eliminating the need for physical movement of certificates and any risk from lack of simultaneous transfers of securities and cash. Euroclear provides various other services, including securities lending and borrowing and interfaces with domestic markets in several countries. Euroclear is operated by Euroclear Bank S.A./NV (the "Euroclear operator"), under contract with Euroclear Clearance Systems S.C., a Belgian cooperative corporation. All operations are conducted by the Euroclear operator, and all Euroclear securities clearance accounts and Euroclear cash accounts are accounts with the Euroclear operator, not the cooperative. The cooperative establishes policy for Euroclear on behalf of Euroclear participants. Euroclear participants include banks, central banks, securities brokers and dealers and other professional financial intermediaries. Indirect access to Euroclear is also available to other firms that clear through or maintain a custodial relationship with a Euroclear participant, either directly or indirectly. The Euroclear operator has advised that it is licensed by the Belgian Banking and Finance Commission to carry out banking activities on a global basis. As a Belgian Bank, it is regulated by the Belgian Banking Commission. Securities clearance accounts and cash accounts with the Euroclear operator are governed by the Terms and Conditions Governing Use of Euroclear and the related Operating Procedures of the Euroclear System and applicable Belgian law. The Terms and Conditions govern transfers of securities and cash within Euroclear, withdrawals of securities and cash from Euroclear, and receipts of payments with respect to securities in Euroclear. All securities in Euroclear are held on a fungible basis without attribution of specific certificates to specific securities clearance accounts. The Euroclear operator acts under the Terms and Conditions only on behalf of Euroclear participants and has no record of or relationship with persons holding through Euroclear participants. Distributions with respect to notes held through Clearstream, Luxembourg or Euroclear will be credited to the cash accounts of Clearstream, Luxembourg participants or Euroclear participants in accordance with the relevant system's rules and procedures, to the extent received by its depositary. Those distributions will be subject to tax reporting in accordance with relevant United States tax laws and regulations. Clearstream, Luxembourg or the Euroclear operator, as the case may be, will take any other action permitted to be taken by a noteholder under the indenture on behalf of a Clearstream, Luxembourg participant or Euroclear participant only in accordance with the relevant rules and procedures and subject to the relevant Depositary's ability to effect such actions on its behalf through The Depository Trust Company. Noteholders may hold their notes in the United States through The Depository Trust Company or in Europe through Clearstream, Luxembourg or Euroclear if they are participants of such systems, or indirectly through organizations which are participants in such systems. Transfers between participants in The Depository Trust Company will occur in accordance with The Depository Trust Company Rules. Transfers between Clearstream, Luxembourg participants and Euroclear participants will occur in accordance with their respective rules and operating procedures. Because of time-zone differences, credits of securities received in Clearstream, Luxembourg or Euroclear as a result of a transaction with a participant will be made during subsequent securities settlement processing and dated the business day following The Depository Trust Company settlement date. Such credits or any transactions in such securities settled during such processing will be reported to the relevant Euroclear or Clearstream, Luxembourg participants on such business day. Cash received in Clearstream, Luxembourg or Euroclear as a result of sales of securities by or through a Clearstream, Luxembourg participant or Euroclear participant to a participant in The Depository Trust Company will be received with value on The Depository Trust Company settlement date but will be available in the relevant Clearstream, Luxembourg or Euroclear cash account only as of the business day following settlement in The Depository Trust Company. Cross-market transfers between persons holding directly or indirectly through Depository Trust Company, on the one hand, and directly or indirectly through Clearstream, Luxembourg participants or Euroclear participants, on the other, will be effected in The Depository Trust Company in accordance with The Depository Trust Company Rules on behalf of the relevant European international clearing system by its depositary; however, such cross-market transactions will require delivery of instructions to the relevant European international clearing system by the counterparty in such system in accordance with its rules and procedures and within its established deadlines (European time). The relevant European international clearing system will, if the transaction meets its settlement requirements, deliver instructions to its depositary to take action to effect final settlement on its behalf by delivering or receiving securities in The Depository Trust Company, and making or receiving payment in accordance with normal procedures for same-day funds settlement applicable to The Depository Trust Company. Clearstream, Luxembourg participants and Euroclear participants may not deliver instructions to the depositaries. The Depository Trust Company has advised SLC Student Loan Trust-I that it will take any action permitted to be taken by a noteholder under the indenture only at the direction of one or more participants to whose accounts with The Depository Trust Company the notes are credited. Clearstream, Luxembourg or Euroclear will take any action permitted to be taken by a noteholder under the indenture on behalf of a participant only in accordance with their relevant rules and procedures and subject to the ability of the relevant depositary to effect these actions on its behalf through The Depository Trust Company. Although The Depository Trust Company, Clearstream, Luxembourg and Euroclear have agreed to the foregoing procedures in order to facilitate transfers of interests in the notes among participants of The Depository Trust Company, Clearstream, Luxembourg and Euroclear, they are under no obligation to perform or continue to perform such procedures and such procedures may be discontinued at any time. Neither SLC Student Loan Trust-I, The Student Loan Corporation, the depositor, the subservicers, the indenture trustee nor the underwriters will have any responsibility or obligation to any The Depository Trust Company participants, Clearstream, Luxembourg participants or Euroclear participants or the persons for whom they act as nominees with respect to o the accuracy of any records maintained by The Depository Trust Company, Clearstream, Luxembourg or Euroclear or any participant, o the payment by The Depository Trust Company, Clearstream, Luxembourg or Euroclear or any participant of any amount due to any beneficial owner in respect of the principal amount or interest on the notes, o the delivery by any The Depository Trust Company participant, Clearstream, Luxembourg participant or Euroclear participant of any notice to any beneficial owner which is required or permitted under the terms of the indenture or the trust agreement to be given to noteholders, or o any other action taken by The Depository Trust Company as the noteholder. The administrator may decide to discontinue use of the system of book entry transfers through The Depository Trust Company or a successor securities depository. In that event, note certificates are to be printed and delivered. ADDITIONAL NOTES AND OTHER BORROWINGS We may, upon complying with the provisions of the indenture, issue from time to time additional notes secured by the trust estate on a parity with or subordinate to either the Class A notes, the Class B notes or the Class C notes, if any, then outstanding. In addition, we may borrow funds secured by the student loans pledged to the indenture trustee if the payment of interest and principal on the borrowings is subordinate to payments of interest, principal and required reserve fund amounts with respect to the notes under the indenture. We may enter into any derivative product we deem necessary or desirable with respect to any or all of the notes. We may take those actions without the approval of the holders of any outstanding notes. We will not issue additional notes or borrow funds unless the following conditions have been satisfied: o SLC Student Loan Trust-I and the indenture trustee have entered into a supplemental indenture providing, in the case of additional notes, the terms and forms of the additional notes, and in the case of a borrowing, the provisions for repayment of the borrowing from the amounts under the indenture. o The indenture trustee has received a rating confirmation from each rating agency which has assigned a rating to any outstanding notes that such rating will not be reduced or withdrawn as a result of the issuance of the proposed additional notes and the borrowing. o The indenture trustee has received an opinion of counsel to the effect that all of the foregoing conditions to the issuance of the proposed additional notes or borrowings (and any other conditions to such actions included in the indenture or any other supplemental indenture) have been satisfied. The indenture trustee is authorized under the indenture to establish any additional funds or accounts which it deems necessary or convenient in connection with the issuance and delivery of any additional notes or borrowing. SUMMARY OF THE INDENTURE PROVISIONS We will issue the notes pursuant to an indenture of trust between us and the indenture trustee. Each series of notes will be issued pursuant to a supplemental indenture of trust applicable to that series as indicated in a prospectus supplement. The following is a summary of some of the provisions of the indenture. This summary is not comprehensive and reference should be made to the indenture for a full and complete statement of its provisions. PARITY AND PRIORITY OF LIEN The provisions of the indenture are generally for the equal benefit, protection and security of the registered owners of all of the notes. However, the Class A notes have priority over the Class B notes and the Class C notes with respect to payments of principal and interest, and the Class B notes have priority over the Class C notes with respect to payments of principal and interest. SALE OF STUDENT LOANS HELD IN TRUST ESTATE Student loans may be sold or otherwise disposed of by the indenture trustee free from the lien of the indenture to the extent required by the Higher Education Act or other applicable laws. Prior to any sale we will provide an order to the indenture trustee stating the sale price and directing that student loans be sold or otherwise disposed of and delivered. We will also deliver to the indenture trustee a certificate signed by an authorized representative of the administrator to the effect that: o the disposition price is equal to or in excess of the principal amount of the student loans to be sold or disposed of (plus accrued interest) or equal to or in excess of the purchase price paid by SLC Student Loan Trust-I for such student loans (less principal payments received with respect to such student loans); or o the disposition price is lower than the principal amount of the student loans to be sold or disposed of (plus accrued interest), and o the administrator reasonably believes that the revenues expected to be received, after giving effect to the disposition, would not be less than the revenues expected to be received assuming no such sale or other disposition occurred, or o SLC Student Loan Trust-I remains able to pay debt service on the notes and make payment on any other obligations under the indenture on a timely basis, after giving effect to the disposition, whereas it would not have been able to do so on a timely basis if it had not sold or disposed of the student loans at such discounted amount, or o the aggregate market value of the trust estate, after giving effect to the disposition, will not be less than 100% of the aggregate principal amount of the notes and other obligations outstanding under the indenture (including any subordinate borrowings) plus accrued interest, or o the amount for which the student loans are being sold or disposed of is equal to the purchase price paid by SLC Student Loan Trust-I for such student loans (less principal amounts received with respect to such student loans). SEGREGATION OF FUNDS; PRIORITY OF LIEN We will not commingle the funds created under the indenture with funds, proceeds or investment of funds relating to other issues or series of notes issued by us or any borrowings by us, except to the extent such commingling is required by the indenture trustee for ease in administration of its duties and responsibilities. Should the indenture trustee require this permitted commingling, it will keep complete records in order that the funds, proceeds or investments under the indenture may at all times be identified by source and application, and if necessary, separated. The revenues and other money, student loans and other assets pledged under the indenture are and will be owned by SLC Student Loan Trust-I free and clear of any pledge, lien, charge or encumbrance, except as otherwise expressly provided in the indenture. Except as otherwise provided in the indenture, SLC Student Loan Trust-I: o will not create or voluntarily permit to be created any debt, lien or charge on the student loans which would be on a parity with, subordinate to, or prior to the lien of the indenture; o will not take any action or fail to take any action that would result in the lien of the indenture or the priority of that lien for the obligations thereby secured being lost or impaired; and o will pay or cause to be paid, or will make adequate provisions for the satisfaction and discharge, of all lawful claims and demands which if unpaid might by law be given precedence to or any equality with the indenture as a lien or charge upon the student loans. DERIVATIVE PRODUCTS AND DERIVATIVE PAYMENTS We are authorized under the indenture to enter into a derivative product, defined to mean a written contract under which we become obligated to pay to a counterparty on specified payment dates certain amounts in exchange for the counterparty's obligation to make payments to us on specified payment dates in specified amounts. Our obligation to make payments in connection with a derivative product may be secured by a pledge of and lien on the trust estate. We will not enter into a derivative product unless the indenture trustee has received a confirmation from each rating agency providing a rating for our notes that the derivative product will not adversely affect the rating on any of the notes. If any payment to a counterparty under a derivative product would result in a deficiency in the amounts required to make payments to the registered owners of the notes on a note payment date, then the indenture trustee will delay the making of the payment to the counterparty until the first date on which sufficient funds are available to make the payment or until the next note payment date, whichever is earlier. REPRESENTATIONS AND WARRANTIES OF SLC STUDENT LOAN TRUST-I We represent and warrant in the indenture that: o we are duly authorized under the laws of the State of Delaware to create and issue the notes and to execute and deliver the indenture and any derivative product, and to pledge collateral under the indenture to the payment of notes and any company derivative payments under the Indenture; o all necessary action for the creation and issuance of the notes and the execution and delivery of the indenture and any derivative product has been duly and effectively taken; and o the notes in the hands of the registered owners of the notes and any derivative product are and will be valid and enforceable special limited obligations of SLC Student Loan Trust-I secured by and payable solely from the trust estate. FURTHER COVENANTS We will file financing statements and continuation statements in any jurisdiction necessary to perfect and maintain the security interest we have granted under the indenture. Upon written request of the indenture trustee, we will permit the indenture trustee or its agents, accountants and attorneys, to examine and inspect the property, books of account, records, reports and other data relating to the student loans, and will furnish the indenture trustee such other information as it may reasonably request. The indenture trustee shall be under no duty to make any examination unless requested in writing to do so by the registered owners of 51% of the principal amount of the notes, and unless those registered owners have offered the indenture trustee security and indemnity satisfactory to it against any costs, expenses and liabilities which might be incurred in making any examination. We will cause an annual audit to be made by an independent auditing firm of national reputation and file one copy of the audit with the indenture trustee and each rating agency within 150 days of the close of each fiscal year. The indenture trustee is not obligated to review or otherwise analyze those audits. Each month, the administrator will provide to the indenture trustee for the indenture trustee to forward to each registered owner, a statement setting forth information with respect to the notes and student loans as of the ending of the preceding month, including the following: o the amount of principal payments made with respect to each class of notes during the preceding month; o the amount of interest payments made with respect to each class of notes during the preceding month; o the principal balance of financial student loans as of the close of business on the last day of the preceding month; o the aggregate outstanding principal amount of the notes of each class; o the interest rate for the applicable class of notes with respect to each interest payment; o the number and principal amount of student loans that are delinquent or for which claims have been filed with a guaranty agency; and o the aggregate market value of the trust estate and the outstanding principal amount of the notes as of the close of business on the last day of the preceding month. A copy of these reports may be obtained by any noteholder by a written request to the indenture trustee. ENFORCEMENT OF SERVICING AGREEMENT We will diligently enforce all terms, covenants and conditions of the servicing agreement, including the prompt payment of all amounts due to the servicer under the servicing agreement. We will not permit the release of the obligations of the servicer under the servicing agreement except in conjunction with permitted amendments or modifications and will not waive any default by the servicer under the servicing agreement without the written consent of the indenture trustee. We will not consent or agree to or permit any amendment or modification of any servicing agreement which will in any manner materially adversely affect the rights or security of the registered owners of the notes. ADDITIONAL COVENANTS WITH RESPECT TO THE HIGHER EDUCATION ACT We will verify that the indenture trustee is, or replace the indenture trustee with, an eligible lender under the Higher Education Act, and will acquire or cause to be acquired student loans only from an eligible lender. We are responsible, directly or through the servicer, for each of the following actions with respect to the Higher Education Act: o Dealing with the Secretary of Education with respect to the rights, benefits and obligations under the certificates of insurance and the contract of insurance, and dealing with the guarantee agencies with respect to the rights, benefits and obligations under the guarantee agreements with respect to the student loans; o Diligently enforcing, and taking all reasonable steps necessary or appropriate for the enforcement of all terms, covenants and conditions of all student loans and agreements in connection with the student loans, including the prompt payment of all principal and interest payments and all other amounts due under the student loans; o Causing the student loans to be serviced by entering into a servicing agreement with the servicer for the collection of payments made for, and the administration of the accounts of, the student loans; o Complying with, and causing all of its officers, directors, employees and agents to comply, with the provisions of the Higher Education Act and any regulations or rulings under the Act, with respect to the student loans; and o Causing the benefits of the guarantee agreements, the interest subsidy payments and the special allowance payments to flow to the indenture trustee. CONTINUED EXISTENCE; SUCCESSOR We will preserve and keep in full force and effect our existence, rights and franchises as a Delaware business trust. We will not sell or otherwise dispose of all or substantially all of our assets, consolidate with or merge into any corporation or other entity, or permit one or more other corporations or entities to consolidate with or merge with us. These restrictions do not apply to a transfer of student loans that is made in connection with a discharge of the indenture or to a transaction where the transferee or the surviving or resulting corporation or entity, if other than SLC Student Loan Trust-I, by proper written instrument for the benefit of the indenture trustee, irrevocably and unconditionally assumes the obligation to perform and observe the agreements and obligations of SLC Student Loan Trust-I under the indenture and the rating agencies rating the notes confirm in writing that the transaction will not result in a downgrade of the rating of any notes. EVENTS OF DEFAULT For purposes of the indenture, each of the following events is defined as an event of default: o default in the due and punctual payment of interest when due on, or principal at maturity of, the Class A notes when due or failure to make any payment due under any other senior obligations under the indenture when due; o if no senior obligations are outstanding under the indenture, default in the due and punctual payment of interest when due on principal at maturity of the Class B notes when due; o if no senior obligations or subordinate obligations are outstanding under the indenture, default in the due and punctual payment of interest when due on or principal at maturity of the Class C notes when due; o if no senior obligations or subordinate obligations are outstanding under the indenture, failure to make any payment due under any other junior-subordinate obligations under the indenture when due; o default by SLC Student Loan Trust-I in the performance or observance of any other of the covenants, agreements or conditions contained in the indenture or in the notes, and continuation of such default for a period of 90 days after written notice thereof by the indenture trustee to SLC Student Loan Trust-I; and o the occurrence of an event of bankruptcy with respect to the SLC Student Loan Trust-I. Additional events of default may be added to the indenture by any supplemental indenture. REMEDIES ON DEFAULT Possession Of Trust Estate. Upon the happening of any event of default, the indenture trustee may take possession of any portion of the trust estate that may be in the custody of others, and all property comprising the trust estate, and may hold, use, operate, manage and control those assets. The indenture trustee may also, in the name of SLC Student Loan Trust-I or otherwise, conduct the business of SLC Student Loan Trust-I and collect and receive all charges, income and revenues of the trust estate. After deducting all expenses incurred and all other proper outlays authorized in the indenture, and all payments which may be made as just and reasonable compensation for its own services, and for the services of its attorneys, agents, and assistants, the indenture trustee will apply the rest of the money received by the indenture trustee as follows, or as otherwise specified in the related prospectus supplement: If the principal of none of the obligations under the indenture shall have become due, o first, to the payment of the interest in default on the Class A notes and to the payment of all derivative payments secured on a parity with the Class A notes then due, in order of the maturity of the interest or derivative payment installments, with interest on the overdue installments, which payments will be made ratably to the parties entitled to the payments without discrimination or preference, and o second, to the payment of the interest in default on the Class B notes and to the payment of all derivative payments secured on a parity with the Class B notes then due, in order of the maturity of the interest or derivative payment installments, with interest on the overdue installments, which payments will be made ratably to the parties entitled to the payments without discrimination or preference; o third, to the payment of the interest in default on the Class C notes and to the payment of all derivative payments secured on a parity with the Class C notes, if any, then due, in order of the maturity of the interest or derivative payment installments, with interest on the overdue installments, which payments will be made ratably to the parties entitled to the payments without discrimination or preference; and o fourth, to the payment of the interest in default on any borrowings and to the payment of all derivative payments secured on a parity with any borrowings, if any, then due, in order of the maturity of the interest or derivative payment installments, with interest on the overdue installments, which payments will be made ratably to the parties entitled to the payments without discrimination or preference. If the principal of any of the obligations under the indenture shall have become due by declaration of acceleration or otherwise, o first, to the payment of the interest in default on the Class A notes and all derivative payments secured on a parity with the Class A notes then due, in the order of the maturity of the interest or derivative payment installments, with interest on overdue installments, o second, to the payment of the principal of all Class A notes then due and all derivative payments secured on a parity with the Class A notes, which payments will be made ratably to the parties entitled to the payments without discrimination or preference, o third, to the payment of the interest in default on the Class B notes and all derivative payments secured on a parity with the Class B notes then due, in the order of the maturity of the interest or derivative payment installments, with interest on overdue installments, o fourth, to the payment of the principal of all Class B notes then due and all derivative payments secured on a parity with the Class B notes, which payments will be made ratably to the parties entitled to the payments without discrimination or preference, o fifth, to the payment of the interest in default on the Class C notes and all company derivative payments secured on a parity with such Class C notes then due, in the order of the maturity of the interest or derivative payment installments, with interest on overdue installments, o sixth, to the payment of the principal of all Class C notes then due and any derivative payment on a parity with the Class C notes which payments will be made ratably to the parties entitled to the payments without discrimination or preference, o seventh, to the payment of the interest in default on any borrowings and all company derivative payments secured on a parity with such borrowings then due, in the order of the maturity of the interest or derivative payment installments, with interest on overdue installments, and o eighth, to the payment of the principal of all borrowings then due and any derivative payment on a parity with any borrowings which payments will be made ratably to the parties entitled to the payments without discrimination or preference. Sale Of Trust Estate. Upon the happening of any event of default and if the principal of all of the outstanding notes shall have been declared due and payable, then the indenture trustee may sell the trust estate to the highest bidder in accordance with the requirements of applicable law. In addition, the indenture trustee may proceed to protect and enforce the rights of the indenture trustee or the registered owners in the manner as counsel for the indenture trustee may advise, whether for the specific performance of any covenant, condition, agreement or undertaking contained in the indenture, or in aid of the execution of any power therein granted, or for the enforcement of such other appropriate legal or equitable remedies as may in the opinion of such counsel, be more effectual to protect and enforce the rights aforesaid. The indenture trustee is required to take any of these actions if requested to do so in writing by the registered owners of at least a majority of the principal amount of the highest priority obligations outstanding under the indenture. Appointment Of Receiver. If an event of default occurs, and all of the outstanding obligations under the indenture have been declared due and payable, and if any judicial proceedings are commenced to enforce any right of the indenture trustee or of the registered owners under the indenture, then as a matter of right, the indenture trustee shall be entitled to the appointment of a receiver for the trust estate. Accelerated Maturity. If an event of default occurs, the indenture trustee may declare, or upon the written direction by the registered owners of at least a majority of the principal amount of the highest priority obligations then outstanding under the indenture shall declare, the principal of all then outstanding obligations issued under the indenture, and the interest thereon, immediately due and payable. A declaration of acceleration upon the occurrence of a default other than a default in making payments when due requires the consent of a majority of the registered owners of each priority of obligations then outstanding. Direction Of Indenture Trustee. If an event of default occurs, the registered owners of at least a majority of the principal amount of the highest priority obligations then outstanding under the indenture shall have the right to direct and control the indenture trustee with respect to any proceedings for any sale of any or all of the trust estate, or for the appointment of a receiver. The registered owners may not cause the indenture trustee to institute any proceedings, which in the indenture trustee's opinion, would be unjustly prejudicial to non-assenting registered owners of obligations outstanding under the indenture. Right To Enforce In Indenture Trustee. No registered owner of any obligation issued under the indenture shall have any right as a registered owner to institute any suit, action or proceedings for the enforcement of the provisions of the indenture or for the appointment of a receiver or for any other remedy under the indenture. All rights of action under the indenture are vested exclusively in the indenture trustee, unless and until the indenture trustee fails to institute an action or suit after the registered owners of at least 25% of the notes o have given to the indenture trustee written notice of a default under the indenture, and of the continuance thereof, o have made a written request upon the indenture trustee and the indenture trustee shall have been afforded reasonable opportunity to institute an action, suit or proceeding in its own name, and o the indenture trustee shall have been offered reasonable indemnity and security satisfactory to it against the costs, expenses, and liabilities to be incurred on an action, suit or proceeding in its own name. Waivers Of Events Of Default. The indenture trustee may in its discretion waive any event of default under the indenture and rescind any declaration of acceleration of the obligations due under the indenture. The indenture trustee will waive an event of default upon the written request of the registered owners of at least a majority of the principal amount of the highest priority obligations then outstanding under the indenture. A waiver of any event of default in the payment of the principal or interest due on any obligation issued under the indenture may not be made unless prior to the waiver or rescission, provisions are made for payment of all arrears of interest or all arrears of payments of principal, and all expenses incurred by the indenture trustee in connection with such default. A waiver or rescission of one default will not affect any subsequent or other default, or impair any rights or remedies consequent to any subsequent or other default. THE INDENTURE TRUSTEE Acceptance Of Trust. The indenture trustee has accepted the trusts imposed upon it by the indenture, and will perform those trusts, but only upon and subject to the following terms and conditions: o The indenture trustee undertakes to perform only those duties as are specifically set forth in the indenture. o 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 the indenture. o In case an event of default has occurred and is continuing, the indenture trustee, in exercising the rights and powers vested in it by the indenture, will 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 his or her own affairs. o Before taking any action under the indenture requested by registered owners, the indenture trustee may require that it be furnished an indemnity bond or other indemnity and security satisfactory to it by the registered owners for the reimbursement of all expenses it may incur and to protect it against liability arising from any action taken by the indenture trustee. Indenture Trustee May Act Through Agents. The indenture trustee may execute any of the trusts or powers under the indenture and perform any duty thereunder either itself or by or through its attorneys, agents, or employees. The indenture trustee will not be answerable or accountable for any default, neglect or misconduct of any such attorneys, agents or employees, if reasonable care has been exercised in the appointment, supervision, and monitoring of the work performed. All reasonable costs incurred by the indenture trustee and all reasonable compensation to all such persons as may reasonably be employed in connection with the trusts will be paid by SLC Student Loan Trust-I. Duties of Indenture Trustee. The indenture trustee is generally under no obligation or duty to perform any act at the request of registered owners or to institute or defend any suit to protect the rights of the registered owners under the indenture unless properly indemnified and provided with security to its satisfaction. The indenture trustee is not required to take notice of any event under the indenture unless and until it shall have been specifically notified in writing of the event of default by the registered owners or an authorized representative of the SLC Student Loan Trust-I. However, the indenture trustee may begin suit, or appear in and defend suit, execute any of the trusts, enforce any of its rights or powers, or do anything else in its judgment proper, without assurance of reimbursement or indemnity. In that case the indenture trustee will be reimbursed or indemnified by the registered owners requesting that action, if any, or SLC Student Loan Trust-I in all other cases, for all fees, costs, expenses, liabilities, outlays, counsel fees and other reasonable disbursements properly incurred. If SLC Student Loan Trust-I or the registered owners, as appropriate, fail to make such reimbursement or indemnification, the indenture trustee may reimburse itself from any money in its possession under the provisions of the indenture, subject only to the prior lien of the notes for the payment of the principal and interest thereon from the Revenue Fund. Compensation Of Indenture Trustee. SLC Student Loan Trust-I will pay to the indenture trustee compensation for all services rendered by it under the indenture, and also all of its reasonable expenses, charges, and other disbursements. The indenture trustee may not change the amount of its annual compensation without giving SLC Student Loan Trust-I at least 90 days written notice prior to the beginning of a fiscal year. Resignation Of Indenture Trustee. The indenture trustee may resign and be discharged from the trust created by the indenture by giving to SLC Student Loan Trust-I written notice specifying the date on which such resignation is to take effect. A resignation will only take effect on the day specified in such notice if a successor indenture trustee shall have been appointed pursuant to the provisions of the indenture and is qualified to be the indenture trustee under the requirements of the provisions of the indenture. Removal Of Indenture Trustee. The indenture trustee may be removed o at any time by the registered owners of a majority of the principal amount of the highest priority obligations then outstanding under the indenture; o by SLC Student Loan Trust-I for cause or upon the sale or other disposition of the indenture trustee or its trust functions; or o by SLC Student Loan Trust-I without cause so long as no event of default exists or has existed within the last 30 days. In the event an indenture trustee is removed, removal shall not become effective until o a successor indenture trustee shall have been appointed; and o the successor indenture trustee has accepted that appointment. Successor Indenture Trustee. If the indenture trustee resigns, is removed, dissolved or otherwise is disqualified to act or is incapable of acting, or in case control of the indenture trustee is taken over by any public officer or officers, a successor indenture trustee may be appointed by SLC Student Loan Trust-I. In this case SLC Student Loan Trust-I will cause notice of the appointment of a successor indenture trustee to be mailed to the registered owners at the address of each registered owner appearing on the note registration books. Every successor indenture trustee o will be a bank or trust company in good standing, organized and doing business under the laws of the United States or of a state therein; o will have a reported capital and surplus of not less than $50,000,000; o will be authorized under the law to exercise corporate trust powers, be subject to supervision or examination by a federal or state authority; and o will be an eligible lender under the Higher Education Act, so long as such designation is necessary to maintain guarantees and federal benefits under the Higher Education Act, with respect to the student loans originated under the Higher Education Act. Merger Of The Indenture Trustee. Any corporation into which the indenture trustee may be merged or with which it may be consolidated, or any corporation resulting from any merger or consolidation to which the indenture trustee shall be a party, or any corporation succeeding to all or substantially all of the corporate trust business of the indenture trustee, shall be the successor of the indenture trustee under the indenture, provided such corporation shall be otherwise qualified and eligible under the indenture, without the execution or filing of any paper of any further act on the part of any other parties thereto. SUPPLEMENTAL INDENTURES Supplemental Indentures Not Requiring Consent Of Registered Owners. SLC Student Loan Trust-I and the indenture trustee may, without the consent of or notice to any of the registered owners of any obligations outstanding under the indenture, enter into any indentures supplemental to the indenture for any of the following purposes: o to cure any ambiguity or formal defect or omission in the indenture; o to grant to or confer upon the indenture trustee for the benefit of the registered owners any additional benefits, rights, remedies, powers or authorities; o to subject to the indenture additional revenues, properties or collateral; o to modify, amend or supplement the indenture or any indenture supplemental thereto in such manner as to permit the qualification under the Trust-Indenture Act of 1939 or any similar federal statute or to permit the qualification of the notes for sale under the securities laws of the United States of America or of any of the states of the United States of America, and, if they so determine, to add to the indenture or any indenture supplemental thereto such other terms, conditions and provisions as may be permitted by the Trust-Indenture Act of 1939 or similar federal statute which, in the opinion of the indenture trustee or its counsel are not to the material prejudice of the registered owner of any of the obligations outstanding under the indenture; o to evidence the appointment of a separate or co-indenture trustee or a co-registrar or transfer agent or the succession of a new indenture trustee under the indenture; o to add provisions to or to amend provisions of the indenture as may, in the opinion of counsel, be necessary or desirable to assure implementation of SLC Student Loan Trust-I's student loan program in conformance with the Higher Education Act; o to make any change as shall be necessary in order to obtain and maintain for any of the notes an investment grade rating from a nationally recognized rating service, which changes, in the opinion of the indenture trustee or its counsel are not to the material prejudice of the registered owner of any of the obligations outstanding under the indenture; o to make any changes necessary to comply with the Higher Education Act and the regulations thereunder or the Internal Revenue Code and the regulations promulgated thereunder; o to provide for the issuance of notes or subordinate indebtedness pursuant to the provisions of the indenture, including the creation of appropriate funds and accounts, with respect to such notes or subordinate indebtedness; o to make the terms and provisions of the indenture, including the lien and security interest granted therein, applicable to a derivative product; o to create any additional funds or accounts under the indenture deemed by the indenture trustee to be necessary or desirable; o to amend the indenture to allow for any of the notes to be supported by a letter of credit or insurance policy or a liquidity agreement, including amendment to provide for repayment to the provider of the credit support on a parity with any notes or derivative product and providing rights to the provider under the indenture, including with respect to defaults and remedies; o to amend the indenture to provide for use of a surety bond or other financial guaranty instrument in lieu of cash and investment securities in all or any portion of the Reserve Fund, so long as such action shall not adversely affect the ratings on any of the notes; o to make any other change with a confirmation by the rating agencies of their ratings of the notes; or o to make any other change which, in the judgment of the indenture trustee or its counsel, is not to the material prejudice of the registered owners of any obligations outstanding under the indenture. Supplemental Indentures Requiring Consent Of Registered Owners. Any amendment of the indenture other than those listed above must be approved by the registered owners of a majority of the principal amount of each class of affected notes then outstanding under the indenture. None of the changes described below may be made in a supplemental indenture without the consent of the registered owners of each affected note then outstanding, o an extension of the maturity date of the principal of or the interest on any obligation, or o a reduction in the principal amount of any obligation or the rate of interest thereon, or o a privilege or priority of any obligation under the indenture over any other obligation, or o a reduction in the aggregate principal amount of the obligations required for consent to such supplemental indenture, or o the creation of any lien other than a lien ratably securing all of the obligations at any time outstanding under the indenture. TRUST IRREVOCABLE The trust created by the terms and provisions of the indenture is irrevocable until the principal of and the interest due on all obligations under the indenture and all derivative payments are fully paid or provision is made for its payment, as provided in the indenture. SATISFACTION OF INDENTURE If the registered owners of the notes and any other obligations issued under the indenture are paid all the principal of and interest due on the notes and any other obligations, at the times and in the manner stipulated in the indenture, and if each counterparty on a derivative product is paid all of derivative payments then due, then the pledge of the trust estate will thereupon terminate and be discharged. The indenture trustee will execute and deliver to SLC Student Loan Trust-I instruments to evidence the discharge and satisfaction, and the indenture trustee will pay all money held by it under the indenture to the party entitled to receive it under the indenture. Notes and any other obligations issued under the indenture will be considered to have been paid if money for their payment or redemption has been set aside and is being held in trust by the indenture trustee. Any outstanding note will be considered to have been paid if the note is to be redeemed on any date prior to its stated maturity and notice of redemption has been given as provided in the indenture and on said date there shall have been deposited with the indenture trustee either money or governmental obligations the principal of and the interest on which when due will provide money sufficient to pay the principal of and interest to become due on the note. Any derivative payments will be considered to have been paid and the applicable derivative product terminated when payment of all derivative payments due and payable to each counterparty under derivative products has been made or duly provided for to the satisfaction of each counterparty and the respective derivative product has been terminated. DESCRIPTION OF CREDIT ENHANCEMENT GENERAL Credit enhancement may be provided with respect to one or more classes of the notes of any series. The amounts and types of credit enhancement arrangements and the provider of the credit enhancement, if any, will be set forth in the related prospectus supplement. Credit enhancement may be in the form of a letter of credit, the subordination of one or more classes of notes, the use of an insurance policy or surety bonds, the establishment of one or more reserve funds, interest rate swaps, or any combination of the foregoing. The presence of a reserve fund and other forms of credit enhancement for the benefit of any class or series of notes is intended to enhance the likelihood that noteholders of a class or series will receive the full amount of principal and interest due on the notes and to decrease the likelihood that such noteholders will experience losses. The credit enhancement will not provide protection against all risks of loss and will not guarantee payment to such noteholders of all amounts to which they are entitled unless a guarantee against losses is described in the related prospectus supplement. If losses or shortfalls occur that exceed the amount covered by the credit enhancement or that are not covered by the credit enhancement, noteholders will bear their allocable share of deficiencies. Moreover, if a form of credit enhancement covers more than one series of notes, holders of notes of one series will be subject to the risk that the credit enhancement will be exhausted by the claims of the holders of notes of one or more other series. SUBORDINATE NOTES The notes will be designated Class A notes, Class B notes or Class C notes in the related prospectus supplement. To the extent specified in the related prospectus supplement, the rights of the Class B noteholders to receive distributions on any note payment date will be subordinated to the corresponding rights of the Class A noteholders, and the rights of the Class C noteholders to receive distributions on any note payment date will be subordinated to the corresponding rights of the Class B noteholders and the Class A noteholders. If so provided in the related prospectus supplement, the subordination of a class may apply only in the event of, or may be limited to, specific types of losses or shortfalls. The related prospectus supplement will set forth information concerning the amount of subordination provided by a class or classes of notes in a series, the circumstances under which such subordination will be available and the manner in which the amount of subordination will be made available. LETTER OF CREDIT If so specified in the prospectus supplement with respect to a series, deficiencies in amounts otherwise payable on the notes or certain classes of the notes will be covered by one or more letters of credit. The bank or financial institution issuing the letter of credit will be identified in a prospectus supplement. Under a letter of credit, the issuer will be obligated to honor draws in an aggregate fixed dollar amount generally equal to a percentage specified in the related prospectus supplement of the principal balance of the student loans on a specified date or of the initial aggregate principal balance of one or more classes of notes. If so specified in the related prospectus supplement, the letter of credit may permit draws only in the event of certain types of losses and shortfalls. The amount available under the letter of credit will, in all cases, be reduced to the extent of the unreimbursed payments under the letter of credit and may otherwise be reduced as described in the related prospectus supplement. The obligations of the issuer of the letter of credit will expire at the earlier of the date specified in the related prospectus supplement or the termination of the trust estate. NOTE INSURANCE AND SURETY BONDS If so specified in the prospectus supplement with respect to a series, deficiencies in amounts otherwise payable on the notes or certain classes of the notes will be covered by insurance policies or surety bonds provided by one or more insurance companies or sureties. The insurance policies or surety bonds may cover timely distributions of interest and full distributions of principal on the basis of a schedule of principal distributions set forth in or determined in the manner specified in the related prospectus supplement. RESERVE FUND In addition to the Reserve Fund described in this prospectus under "Security and Sources of Payment for the Notes-Reserve Fund," one or more reserve funds may be established with respect to a series of the notes. Cash, eligible investments, a demand note, letters of credit, other contingent investments or a combination thereof, in the amounts so specified in the related prospectus supplement, may be deposited in such reserve fund. The reserve fund for a series may also be funded over time by depositing in the reserve fund a specified amount of the distributions received on the related receivables as specified in the related prospectus supplement. Amounts on deposit in any reserve fund for a series, together with the reinvestment income on those amounts, will be applied by the indenture trustee for the purposes, in the manner and to the extent described in the related prospectus supplement. A reserve fund may be provided to increase the likelihood of timely payments of principal of and interest on the notes, if required as a condition to the rating of the notes of that series. If so specified in the related prospectus supplement, a reserve fund may be established to provide limited protection, in an amount satisfactory to each rating agency rating the notes, against certain types of losses not covered by insurance policies or other credit support. Following each interest payment date, amounts in a reserve fund in excess of any specified reserve fund requirement may be released from the reserve fund under the conditions specified in the related prospectus supplement and will not be available for further application by the indenture trustee. Additional information concerning any reserve fund is to be set forth in the related prospectus supplement, including the initial balance of the reserve fund, the reserve fund balance to be maintained, the purposes for which funds in the reserve fund may be applied to make distributions to noteholders and use of investment earnings, if any, from the reserve fund. THE STUDENT LOAN PROGRAM OF SLC STUDENT LOAN TRUST-I GENERAL The Student Loan Corporation, as seller, will transfer the student loans to SLC Student Loan Receivables I, Inc. in a transaction which will be part sale and part contribution to capital. Student Loan Receivables I, Inc., as depositor, will transfer the loans to the SLC Student Loan Trust-I, a trust established by the depositor in exchange for the net proceeds from the sale of the notes and the equity interest in the SLC Student Loan Trust-I. On the closing date of each student loan sale, The Student Loan Corporation will sell and assign to the related eligible lender trustee on behalf of the depositor, without recourse, except as provided in the loan sale agreement, its entire interest in the student loans and all collections received and to be received with respect thereto for the period on and after the cut-off date provided for pursuant to the loan sale agreement. Immediately upon giving effect to that sale, the depositor will transfer and assign to the eligible lender trustee on behalf of the SLC Student Loan Trust-I, without recourse, except as provided in the loan sale agreement, its entire interest in the same student loans and all collections received and to be received with respect thereto for the period on and after the cut-off date and all of its rights under its loan sale agreement with The Student Loan Corporation. The same eligible lender trustee will act as eligible lender for both the depositor and the SLC Student Loan Trust-I. Each student loan will be identified in a schedule appearing as an exhibit to the loan sale agreement. The Student Loan Corporation will make representations, warranties and covenants with respect to the student loans sold pursuant to its respective student loan sale agreement, including the following: o each loan has been duly executed and delivered and constitutes the legal, valid and binding obligation of the maker and the endorser, if any, thereof, enforceable in accordance with its terms; o The Student Loan Corporation is the sole owner and holder of each loan and has full right and authority to sell and assign the same free and clear of all liens, pledges or encumbrances; o each loan to be sold under the student loan sale agreement is guaranteed by a guaranty agency under the Federal Family Education Loan Program; o The Student Loan Corporation and any independent servicer have each exercised and shall continue to exercise, until the scheduled sale date, due diligence and reasonable care in making, administering, servicing and collecting the loans; o The Student Loan Corporation, or the lender that originated a loan, has reported the amount of origination fees, if any, authorized to be collected with respect to the loan pursuant to Section 438(c) of the Higher Education Act to the Secretary of Education for the period in which the fee was authorized to be collected; and o The Student Loan Corporation or originating lender has made any refund of an origination fee collected in connection with any loan which may be required pursuant to the Higher Education Act. At the request of SLC Student Loan Trust-I or the indenture trustee, The Student Loan Corporation will be obligated to repurchase any loan transferred to the depositor from The Student Loan Corporation and transferred to SLC Student Loan Trust-I if: o any representation or warranty made or furnished by The Student Loan Corporation in or pursuant to its respective student loan sale agreement shall prove to have been materially incorrect as to the loan; o the Secretary of Education or a guaranty agency, as the case may be, refuses to honor all or part of a claim filed with respect to a loan, including any claim for interest subsidy, special allowance payments, insurance, reinsurance or guarantee payments on account of any circumstance or event that occurred prior to the transfer of the loan to SLC Student Loan Trust-I; or o on account of any wrongful or negligent act or omission of The Student Loan Corporation, the originating lender or its or their servicing agents that occurred prior to the transfer of a loan to SLC Student Loan Trust-I, a defense that makes the loan unenforceable is asserted by a maker or endorser, if any, of the loan with respect to his or her obligation to pay all or any part of the loan. Upon the occurrence of any of the conditions set forth above and upon the request of SLC Student Loan Trust-I or the indenture trustee, The Student Loan Corporation will be required to pay to the indenture trustee an amount equal to the then outstanding principal balance of the loan, plus the percentage of premium paid by SLC Student Loan Trust-I in connection with the purchase of the loan and interest and special allowance payments accrued and unpaid with respect to the loan, plus any attorneys' fees, legal expenses, court costs, servicing fees or other expenses incurred by SLC Student Loan Trust-I, and the indenture trustee in connection with the loan and arising out of the reasons for the repurchase. SLC STUDENT LOAN TRUST-I SLC Student Loan Trust-I, is a bankruptcy remote, limited purpose Delaware business trust organized by the depositor under the laws of the State of Delaware, for the transactions described in this prospectus and in the related prospectus supplement. The property of the trust will consist of: o a pool of student loans consisting of education loans to students and parents of students, legal title to which is held by the related eligible lender trustee on behalf of the trust; o all funds collected or to be collected in respect of the student loans, including any payments made under the guarantee agreements covering the loans, on or after the applicable cut-off date specified in the related prospectus supplement; and o all moneys and investments on deposit in the collection account, any reserve account and any other trust accounts or any other form of credit or cash flow enhancement that may be obtained for the benefit of holders of one or more classes of the notes. To the extent provided in the applicable prospectus supplement, the notes will be secured by the property of the trust. To facilitate servicing and to minimize administrative burden and expense, the servicer will be appointed the custodian of the promissory notes representing the student loans for the trust and the eligible lender trustee. The principal offices of the trust and the eligible lender trustee will be specified in the applicable prospectus supplement. ELIGIBLE LENDER TRUSTEE The eligible lender trustee for the trust will be the entity specified in the related prospectus supplement. The eligible lender trustee on behalf of the trust will acquire legal title to all the related student loans acquired under the related loan sale agreement and will enter into a guarantee agreement with each of the guarantors with respect to the student loans. The eligible lender trustee will qualify as an eligible lender and owner of all the federal student loans held by the trust for all purposes under the Higher Education Act and the guarantee agreements. Failure of the federal student loans to be owned by an eligible lender would result in the loss of any guarantee payments from any guarantor and any federal assistance with respect to the federal student loans. An eligible lender trustee's liability in connection with the issuance and sale of the notes is limited solely to the express obligations of the eligible lender trustee set forth in the related trust agreement and the related loan sale agreement. An eligible lender trustee may resign at any time, in which event the administrator, or its successor, will be obligated to appoint a successor trustee. The administrator of a trust may also remove the eligible lender trustee if the eligible lender trustee ceases to be eligible to continue as eligible lender trustee under the related trust agreement or if the eligible lender trustee becomes insolvent. In these circumstances, the administrator will be obligated to appoint a qualified successor trustee. Any resignation or removal of an eligible lender trustee and appointment of a successor trustee will not become effective until acceptance of the appointment by the successor trustee. SLC STUDENT LOAN RECEIVABLES I, INC. SLC Student Loan Receivables I, Inc., the depositor, is a bankruptcy remote wholly owned, special purpose subsidiary of The Student Loan Corporation, formed to purchase student loans originated or acquired by The Student Loan Corporation and to transfer these student loans to SLC Student Loan Trust-I. Because the depositor is not an institution eligible to hold legal title to student loans, an interim eligible lender trustee specified in the related prospectus supplement will hold legal title to the student loans on behalf of the depositor. By forming the depositor to acquire the student loans being transferred to the trust, The Student Loan Corporation has taken steps intended to prevent any application for relief under any insolvency law from resulting in consolidation of the assets and liabilities of the depositor with those of The Student Loan Corporation. As a separate, limited-purpose entity, the depositor's incorporation documents contain limitations including: o restrictions on the nature of its business; and o a restriction on its ability to commence a voluntary case or proceeding under any insolvency law without the unanimous affirmative vote of all of its directors. Among other things, the depositor will maintain its separate corporate identity by: o maintaining records and books of accounts separate from those of The Student Loan Corporation; o refraining from commingling its assets with the assets of The Student Loan Corporation; and o refraining from holding itself out as having agreed to pay, or being liable for, the debts of The Student Loan Corporation. We have structured the transactions described in this prospectus to assure that the transfer of the student loans by The Student Loan Corporation to the depositor constitutes a "true sale" of the student loans to the depositor. If the transfer constitutes a "true sale" the student loans and related proceeds would not be property of The Student Loan Corporation should it become subject to any insolvency law. Upon each issuance of notes, the transferring depositor will receive the advice of counsel that, subject to various facts, assumptions and qualifications, the transfer of the student loans by The Student Loan Corporation to the depositor would be characterized as a "true sale" and the student loans and related proceeds would not be property of The Student Loan Corporation under the insolvency laws. The transferring depositor will also represent and warrant that each transfer of student loans by the depositor to the trust is a valid sale of those loans. The transferring depositor and The Student Loan Corporation will take all actions that are required so the eligible lender trustee will be treated as the legal owner of the student loans while they are held beneficially by either the depositor or the trust. THE STUDENT LOAN CORPORATION The Student Loan Corporation, the seller and servicer, originates, holds and services federally insured student loans through a trust agreement with Citibank (New York State), a subsidiary of Citicorp, an indirect wholly-owned subsidiary of Citigroup Inc. The Student Loan Corporation is one of the nation's largest originators/holders of loans originated under the Federal Family Education Loan Program, authorized by the Department of Education under the Federal Higher Education Act. The Student Loan Corporation also holds student loans that are not insured under the Federal Higher Education Act. The Student Loan Corporation was incorporated under the laws of the State of Delaware on November 4, 1992 and commenced operations on December 22, 1992. For more than 25 years prior to December 22, 1992, The Student Loan Corporation operated as a division of Citibank (New York State). On December 22, 1992, the assets of The Student Loan Corporation, as a division of Citibank (New York State), were exchanged with Citibank (New York State) for 20 million shares of The Student Loan Corporation's common stock and The Student Loan Corporation's agreement to pay approximately $2.8 billion to Citibank (New York State) and to assume certain obligations of Citibank (New York State). On December 23, 1992, Citibank (New York State) sold four million shares of its holdings of The Student Loan Corporation common stock in an initial public offering and currently Citibank (New York State) continues to own 80% of The Student Loan Corporation's outstanding common stock. SERVICING OF STUDENT LOANS SLC Student Loan Trust-I is required under the Higher Education Act, the rules and regulations of the guarantee agencies and the indenture to use due diligence in the servicing and collection of student loans and to use collection practices no less extensive and forceful than those generally in use among financial institutions with respect to other consumer debt. THE ELIGIBLE LENDER TRUSTEE IS ACTING AS "ELIGIBLE LENDER" WITH RESPECT TO THE STUDENT LOANS AS AN ACCOMMODATION TO SLC STUDENT LOAN TRUST-I AND NOT FOR THE BENEFIT OF ANY OTHER PARTY. NOTWITHSTANDING ANY RESPONSIBILITY THAT THE ELIGIBLE LENDER TRUSTEE MAY HAVE TO THE SECRETARY OF EDUCATION OR ANY GUARANTEE AGENCY UNDER THE HIGHER EDUCATION ACT, THE ELIGIBLE LENDER TRUSTEE SHALL NOT HAVE ANY RESPONSIBILITY FOR ANY ACTION OR INACTION OF SLC STUDENT LOAN TRUST-I OR ANY OTHER PARTY IN CONNECTION WITH THE STUDENT LOANS AND THE DOCUMENTS, AGREEMENTS, UNDERSTANDINGS AND ARRANGEMENTS RELATING TO THE STUDENT LOANS. THE SERVICING AGREEMENT We have entered into a servicing agreement with The Student Loan Corporation which continues until the earlier of o termination of the indenture; o early termination after material default by the servicer as provided for in the servicing agreement; or o the student loans serviced under the servicing agreement having been paid in full. Under the servicing agreement, the servicer is responsible for servicing, and performing all other related tasks with respect to, all the student loans acquired from time to time on behalf of the trust. The servicer is required under the related servicing agreement to be responsible for performing all services and duties customary to the servicing of student loans including all collection practices, to do so in the same manner as the servicer has serviced student loans for parties other than the trust and to do so in compliance with, and to otherwise comply with, all standards and procedures provided for in the Higher Education Act, the Guarantee Agreements and all other applicable federal and state laws. The servicer is required to maintain its eligibility as a third-party servicer under the Higher Education Act. Without limiting the foregoing, the duties of the servicer with respect to the trust under the servicing agreement include, but are not limited to, the following: o collecting and depositing into the Revenue Fund all payments with respect to the student loans, including claiming and obtaining any guarantee payments, any interest subsidy payments and special allowance payments with respect to the student loans, o responding to inquiries from borrowers under the student loans, and o investigating delinquencies and sending out statements and payment coupons. In addition, the servicer will keep ongoing records with respect to the student loans and collections thereon and will furnish monthly and annual statements with respect to the information to the indenture trustee, in accordance with the servicer's customary practices with respect to The Student Loan Corporation and as otherwise required in the servicing agreement. SERVICER COVENANTS The servicer will agree that: o it will satisfy all of its obligations relating to the student loans, maintain in effect all qualifications required in order to service the student loans and comply in all material respects with all requirements of law if a failure to comply would have a materially adverse effect on the interest of the trust; o it will not permit any rescission or cancellation of a student loan except as ordered by a court or other government authority or as consented to by the eligible lender trustee and the indenture trustee, except that it may write off any delinquent loan if the remaining balance of the borrower's account is less than $50; o it will do nothing to impair the rights of the noteholders; and o it will not reschedule, revise, defer or otherwise compromise payments due on any student loan except during any applicable interest only, deferral or forbearance periods or otherwise in accordance with all applicable standards and requirements for servicing of the student loans. Upon the discovery of a breach of any covenant that has a materially adverse effect on the interest of the trust, the servicer will purchase or substitute that student loan unless the breach is cured within the applicable cure period specified in the related prospectus supplement. However, any breach that relates to compliance with the requirements of the Higher Education Act or the applicable guarantor but that does not affect that guarantor's obligation to guarantee payment of a student loan will not be considered to have a material adverse effect. The purchase or substitution and reimbursement obligations of the servicer will constitute the sole remedy available to the trust for any uncured breach. The servicer's purchase or substitution and reimbursement obligations are contractual obligations that the trust may enforce, but the breach of these obligations will not constitute an event of default under the indenture. SERVICING COMPENSATION The servicer will receive a servicing fee for each period in an amount specified in the prospectus supplement. The servicer will also receive any other administrative fees, expenses and similar charges specified in the prospectus supplement. The servicing fee may also include specified amounts payable to the servicer for tasks it performs. The servicing fee may be subject to a maximum monthly amount. If that is the case, the related prospectus supplement will state the maximum together with any conditions to its application. The servicing fee, including any unpaid amounts from prior distribution dates, will have a payment priority over the securities, to the extent specified in the applicable prospectus supplement. The servicing fee compensates the servicer for performing the functions of a third-party servicer of student loans, including: o collecting and posting all payments, o responding to inquiries of borrowers on the student loans, o investigating delinquencies, o pursuing, filing and collecting any program payments, o accounting for collections, o furnishing monthly and annual statements to the trustees, and o paying taxes, accounting fees, outside auditor fees, data processing costs and other costs incurred in administering the student loans. EVIDENCE AS TO COMPLIANCE The administration agreement will provide that a firm of independent public accountants will furnish to the trust and indenture trustee an annual report attesting to the servicer's compliance with the terms of that administration agreement and the servicing agreement, including all statutory provisions incorporated into those agreements. The accounting firm will base this report on its examination of various documents and records and on accounting and auditing procedures considered appropriate under the circumstances. The administration agreement will require the servicer to deliver to the trust and indenture trustee, concurrently with the compliance report, a certificate signed by an officer of the servicer stating that, to his knowledge, the servicer has fulfilled its obligations under the administration agreement and the servicing agreement. If there has been a material default, the officer's certificate for that period will describe the default. The servicer has agreed to give the indenture trustee and eligible lender trustee notice of servicer defaults under the servicing agreement. You may obtain copies of these reports and certificates by a request in writing to the eligible lender trustee. SERVICER DEFAULT A servicer default under the servicing agreement will consist of: o any failure by the servicer to observe or perform in any material respect any term, covenant or agreement in the servicing agreement that materially and adversely affects the rights of noteholders and continues for 60 days after written notice of the failure is given (1) to the servicer by the indenture trustee, eligible lender trustee or administrator or (2) to the servicer, the indenture trustee and eligible lender trustee by holders of 25% or more of the notes; o the occurrence of an insolvency event involving the servicer; and o any failure by the servicer to comply with any requirements under the Higher Education Act resulting in a loss of its eligibility as a third-party servicer. An insolvency event is an event of bankruptcy, insolvency, readjustment of debt, marshalling of assets and liabilities or similar proceedings or other actions by a person indicating its insolvency, reorganization under bankruptcy proceedings or inability to pay its obligations. A servicer default does not include any failure of the servicer to service a student loan in accordance with the Higher Education Act so long as the servicer is in compliance with its obligations under the servicing agreement to purchase any adversely affected student loans and to pay to the applicable trust the amount of any program payments lost as a result of the servicer's actions. RIGHTS UPON SERVICER DEFAULT As long as a servicer default remains unremedied, the indenture trustee or holders of not less than 25% of the outstanding notes may terminate all the rights and obligations of the servicer. Only the indenture trustee or the noteholders, and not the eligible lender trustee, will have the ability to remove the servicer if a default occurs while the notes are outstanding. Following a termination, a successor servicer appointed by the indenture trustee or the indenture trustee itself will succeed to all the responsibilities, duties and liabilities of the servicer under the servicing agreement and will be entitled to similar compensation arrangements. The compensation may not be greater than the servicing compensation to the servicer under that servicing agreement, unless the compensation arrangements will not result in a downgrading or withdrawal of the then ratings of the notes. If the indenture trustee is unwilling or unable to act, it may appoint, or petition a court for the appointment of, a successor whose regular business includes the servicing of student loans. If, however, a bankruptcy trustee or similar official has been appointed for the servicer, and no servicer default other than that appointment has occurred, the trustee may have the power to prevent the indenture trustee or the noteholders from effecting the transfer. WAIVER OF PAST DEFAULTS The holders of a majority of the outstanding notes, in the case of any servicer default which does not adversely affect the indenture trustee or the noteholders, may, on behalf of all noteholders, waive any default by the servicer, except a default in making any required deposits to or payments from any of the trust accounts. No waiver will impair the noteholders' rights as to subsequent defaults. SLC Student Loan Trust-I may designate another servicer with respect to its student loans. Any servicer, other than The Student Loan Corporation, may be appointed only if the rating agencies rating the notes provide written confirmation that the appointment of the new servicer will not adversely affect the rating on any of the notes. ADMINISTRATION OF THE STUDENT LOANS We have entered into an administration agreement with The Student Loan Corporation. Under the administration agreement, the administrator will agree to provide various notices and to perform other administrative obligations required by the indenture, trust agreement and loan sale agreement. These services include: o directing the indenture trustee to make the required distributions from the trust accounts on each monthly servicing payment date and each distribution date; o preparing, based on periodic data received from the servicer, and providing quarterly and annual distribution statements to the eligible lender trustee and the indenture trustee and any related federal income tax reporting information; and o providing the notices and performing other administrative obligations required by the indenture, the trust agreement and the loan sale agreement. As compensation, the administrator will receive an administration fee specified in the prospectus supplement. The Student Loan Corporation may assign its obligations and duties as administrator to an affiliate if the rating agencies confirm that the assignment will not result in a downgrading or a withdrawal of the ratings then applicable to the notes. No resignation will become effective until a successor administrator has assumed The Student Loan Corporation's duties under the administration agreement. ADMINISTRATOR DEFAULT An administrator default under the administration agreement will consist of: o any failure by the administrator to deliver to the indenture trustee for deposit any required payment by the business day preceding any monthly servicing payment date or distribution date, if the failure continues for five business days after notice or discovery; o any failure by the administrator to direct the indenture trustee to make any required distributions from any of the trust accounts on any monthly servicing payment date or any distribution date, if the failure continues for five business days after notice or discovery; and o any failure by the administrator to observe or perform in any material respect any other term, covenant or agreement in an administration agreement or a related agreement that materially and adversely affects the rights of noteholders and continues for 60 days after written notice of the failure is given to the administrator. RIGHTS UPON ADMINISTRATOR DEFAULT As long as any administrator default remains unremedied, the indenture trustee or holders of not less than 25% of the outstanding notes may terminate all the rights and obligations of the administrator. Only the indenture trustee or the noteholders, and not the eligible lender trustee may remove the administrator if an administrator default occurs while the notes are outstanding. Following the termination of the administrator, a successor administrator appointed by the indenture trustee or the indenture trustee itself will succeed to all the responsibilities, duties and liabilities of the administrator under the administration agreement. The successor administrator will be entitled to similar compensation arrangements or any other compensation as set forth in the related prospectus supplement. If, however, a bankruptcy trustee or similar official has been appointed for the administrator, and no other administrator default other than that appointment has occurred, the trustee or official may have the power to prevent the indenture trustee or the noteholders from effecting the transfer. If the indenture trustee is unwilling or unable to act, it may appoint, or petition a court for the appointment of, a successor whose regular business includes the servicing or administration of student loans. The indenture trustee may make arrangements for compensation to be paid, which cannot be greater than the compensation to the administrator unless the compensation arrangements will not result in a downgrading of the notes. EVIDENCE AS TO COMPLIANCE The administration agreement will provide that a firm of independent public accountants will furnish to the trust and indenture trustee an annual report attesting to the administrator's compliance with the terms of the administration agreement, including all statutory provisions incorporated in the agreement. The accounting firm will base this report on its examination of various documents and records and on accounting and auditing procedures considered appropriate under the circumstances. The administration agreement will require the administrator to deliver to the trust and indenture trustee, concurrently with each compliance report, a certificate signed by an officer of the administrator stating that, to his knowledge, the administrator has fulfilled its obligations under that administration agreement. If there has been a material default the officer's certificate will describe the default. The administrator has agreed to give the indenture trustee and eligible lender trustee notice of administrator defaults under the administration agreement. You may obtain copies of these reports and certificates by a request in writing to the eligible lender trustee. DESCRIPTION OF THE FEDERAL FAMILY EDUCATION LOAN PROGRAM THE FEDERAL FAMILY EDUCATION LOAN PROGRAM The Higher Education Act provides for a program of direct federal insurance for student loans as well as reinsurance of student loans guaranteed or insured by state agencies or private non-profit corporations. The Higher Education Act currently authorizes certain student loans to be covered under the Federal Family Education Loan Program. The 1998 Amendments to the Higher Education Act extended the authorization for the Federal Family Education Loan Program through September 30, 2004. Congress has extended similar authorization dates in prior versions of the Higher Education Act. However, the current authorization dates may not again be extended and the other provisions of the Higher Education Act may not be continued in their present form. Generally, a student is eligible for loans made under the Federal Family Education Loan Program only if he or she: o has been accepted for enrollment or is enrolled in good standing at an eligible institution of higher education; o is carrying or planning to carry at least one-half the normal full-time workload for the course of study the student is pursuing as determined by the institution; o has agreed to promptly notify the holder of the loan of any address change; and o meets the applicable "needs" requirements. Eligible institutions include higher educational institutions and vocational schools that comply with specific federal regulations. Each loan is to be evidenced by an unsecured note. The Higher Education Act also establishes maximum interest rates for each of the various types of loans. These rates vary not only among loan types, but also within loan types depending upon when the loan was made or when the borrower first obtained a loan under the Federal Family Education Loan Program. The Higher Education Act allows lesser rates of interest to be charged. TYPES OF LOANS Four types of loans are currently available under the Federal Family Education Loan Program: o Subsidized Federal Stafford Loans, o Unsubsidized Federal Stafford Loans, o Federal PLUS Loans and o Federal Consolidation Loans These loan types vary as to eligibility requirements, interest rates, repayment periods, loan limits and eligibility for interest subsidies and special allowance payments. Some of these loan types have had other names in the past. References to these various loan types include, where appropriate, their predecessors. The primary loan under the Federal Family Education Loan Program is the Subsidized Federal Stafford Loan. Students who are not eligible for Subsidized Federal Stafford Loans based on their economic circumstances may be able to obtain Unsubsidized Federal Stafford Loans. Parents of students may be able to obtain Federal PLUS Loans. Federal Consolidation Loans are available to borrowers with existing loans made under the Federal Family Education Loan Program and other federal programs to consolidate repayment of the borrower's existing loans. Prior to July 1, 1994, the Federal Family Education Loan Program also offered Federal Supplemental Loans for Students ("Federal SLS Loans") to graduate and professional students and independent undergraduate students and, under certain circumstances, dependent undergraduate students, to supplement their Subsidized Federal Stafford Loans. SUBSIDIZED FEDERAL STAFFORD LOANS General. Subsidized Federal Stafford Loans are eligible for reinsurance under the Higher Education Act if the eligible student to whom the loan is made has been accepted or is enrolled in good standing at an eligible institution of higher education or vocational school and is carrying at least one-half the normal full-time workload at that institution. Subsidized Federal Stafford Loans have limits as to the maximum amount which may be borrowed for an academic year and in the aggregate for both undergraduate and graduate/professional study. Both aggregate limitations exclude loans made under the Federal SLS and Federal PLUS Programs. The Secretary of Education has discretion to raise these limits to accommodate students undertaking specialized training requiring exceptionally high costs of education. Subsidized Federal Stafford Loans are generally made only to student borrowers who meet the needs tests provided in the Higher Education Act. Provisions addressing the implementation of needs analysis and the relationship between unmet need for financing and the availability of Subsidized Federal Stafford Loan Program funding have been the subject of frequent and extensive amendment in recent years. Further amendment to such provisions may materially affect the availability of Subsidized Stafford Loan funding to borrowers or the availability of Subsidized Federal Stafford Loans for secondary market acquisition. Interest Rates For Subsidized Federal Stafford Loans. For a Subsidized Federal Stafford Loan made prior to July 1, 1994, the applicable interest rate for a borrower who, on the date the promissory note was signed, did not have an outstanding balance on a previous Federal Family Education Loan Program loan: (1) is 7% per annum for a loan covering a period of instruction beginning before January 1,1981; (2) is 9% per annum for a loan covering a period of instruction beginning on or before January 1, 1981, but before September 13, 1983; (3) is 8% per annum for a loan covering a period of instruction beginning on or after September 13, 1983, but before July 1, 1988; (4) is 8% per annum for the period from the disbursement of the loan to the date which is four years after the loan enters repayment, for a loan made prior to October 1, 1992, covering a period of instruction beginning on or after July 1, 1988, and thereafter shall be adjusted annually, and for any 12-month period commencing on a July 1 shall be equal to the bond equivalent rate of 91-day U.S. Treasury bills auctioned at the final auction prior to the preceding June 1, plus 3.25% per annum (but not to exceed 10% per annum); or (5) for a loan made on or after October 1, 1992 shall be adjusted annually, and for any 12-month period commencing on a July 1 shall be equal to the bond equivalent rate of 91-day U.S. Treasury bills auctioned at the final auction prior to the preceding June 1, plus 3.1% per annum (but not to exceed 9% per annum). For a Subsidized Federal Stafford Loan made prior to July 1, 1994, the applicable interest rate for a borrower who, on the date the promissory note evidencing the loan was signed, had an outstanding balance on a previous loan made insured or guaranteed under the Federal Family Education Loan Program: (6) for a loan made prior to July 23, 1992 is the applicable interest rate on the previous loan or, if the previous loan is not a Subsidized Federal Stafford Loan 8% per annum or (7) for a loan made on or before July 23, 1992 shall be adjusted annually, and for any twelve month period commencing on a July 1 shall be equal to the bond equivalent rate of 91-day U.S. Treasury bills auctioned at the final auction prior to the preceding June 1, plus 3.1% per annum but not to exceed: o 7% per annum in the case of a Subsidized Federal Stafford Loan made to a borrower who has a loan described in clause (1) above; o 8% per annum in the case of o a Subsidized Federal Stafford Loan made to a borrower who has a loan described in clause (3) above, o a Subsidized Federal Stafford Loan which has not been in repayment for four years and which was made to a borrower who has a loan described in clause (4) above, o a Subsidized Federal Stafford Loan for which the first disbursement was made prior to December 20, 1993 to a borrower whose previous loans do not include a Subsidized Federal Stafford Loan or an Unsubsidized Federal Stafford Loan; o 9% per annum in the case of a Subsidized Federal Stafford Loan made to a borrower who has a loan described in clauses (2) or (5) above or a Subsidized Federal Stafford Loan for which the first disbursement was made on or after December 20, 1993 to a borrower whose previous loans do not include a Subsidized Federal Stafford Loan or an Unsubsidized Federal Stafford Loan; and o 10% per annum in the case of a Subsidized Federal Stafford Loan which has been in repayment for four years or more and which was made to a borrower who has a loan described in clause (4) above. The interest rate on all Subsidized Federal Stafford Loans made on or after July 1, 1994 but prior to July 1, 1998, regardless of whether the borrower is a new borrower or a repeat borrower, is the rate described in clause (7) above, except that the interest rate shall not exceed 8.25% per annum. For any Subsidized Federal Stafford Loan made on or after July 1, 1995, the interest rate is further reduced prior to the time the loan enters repayment and during any deferment periods. During deferment periods, the formula described in clause (7) above is applied, except that 2.5% is substituted for 3.1%, and the rate shall not exceed 8.25% per annum. For Subsidized Federal Stafford Loans made on or after July 1, 1998 but before July 1, 2003, the applicable interest rate shall be adjusted annually, and for any twelve month period commencing on a July 1 shall be equal to the bond equivalent rate of 91-day U.S. Treasury bills auctioned at the final auction prior to the proceeding June 1, plus 1.7% per annum prior to the time the loan enters repayment and during any deferment periods, and 2.3% per annum during repayment, but not to exceed 8.25% per annum. For loans made on or after July 1, 2003, the applicable interest rate will be adjusted annually, but for any 12-month period commencing on a July 1 will be equal to the bond equivalent rate of securities with a comparable maturity (as established by the Secretary of Education), plus 1% per annum, but not to exceed 8.25% per annum. There can be no assurance that the interest rate provisions for these loans will not be further amended. UNSUBSIDIZED FEDERAL STAFFORD LOANS General. The Unsubsidized Federal Stafford Loan Program was created by Congress in 1992 for students who do not qualify for Subsidized Federal Stafford Loans due to parental and/or student income and assets in excess of permitted amounts. These students are entitled to borrow the difference between the Stafford Loan maximum and their Subsidized Federal Stafford Loan eligibility through the Unsubsidized Federal Stafford Loan program. The general requirements for Unsubsidized Federal Stafford Loans are essentially the same as those for Subsidized Federal Stafford Loans. The interest rate, the annual loan limits and the special allowance payment provisions of the Unsubsidized Federal Stafford Loans are the same as the Subsidized Federal Stafford Loans. However, the terms of the Unsubsidized Federal Stafford Loans differ materially from Subsidized Federal Stafford Loans in that the federal government will not make interest subsidy payments and the loan limitations are determined without respect to the expected family contribution. The borrower will be required to either pay interest from the time the loan is disbursed or capitalize the interest until repayment begins. Unsubsidized Federal Stafford Loans were not available before October 1, 1992. A student meeting the general eligibility requirements for a loan under the Federal Family Education Loan Program is eligible for an Unsubsidized Federal Stafford Loan without regard to need. Interest Rates For Unsubsidized Federal Stafford Loans. Unsubsidized Federal Stafford Loans are subject to the same interest rate provisions as Subsidized Federal Stafford Loans. FEDERAL PLUS LOANS General. Federal PLUS Loans are made only to borrowers who are parents and, under certain circumstances, spouses of remarried parents, of dependent undergraduate students. For Federal PLUS Loans made on or after July 1, 1993, the parent borrower must not have an adverse credit history as determined pursuant to criteria established by the Department of Education. The basic provisions applicable to Federal PLUS Loans are similar to those of Subsidized Federal Stafford Loans with respect to the involvement of guarantee agencies and the Secretary of Education in providing federal reinsurance on the loans. However, Federal PLUS Loans differ significantly from Subsidized Federal Stafford Loans, particularly because federal interest subsidy payments are not available under the Federal PLUS Loan program and special allowance payments are more restricted. Interest Rates For Federal PLUS Loans. The applicable interest rate depends upon the date of issuance of the loan and the period of enrollment for which the loan is to apply. The applicable interest rate on a Federal PLUS Loan: o made on or after January 1, 1981, but before October 1, 1981, is 9% per annum; o made on or after October 1, 1981, but before November 1, 1982, is 14% per annum; o made on or after November 1, 1982, but before July 1, 1987, is 12% per annum; o made on or after July 1, 1987, but before October 1, 1992 shall be adjusted annually, and for any 12-month period beginning on July 1 shall be equal to the bond equivalent rate of 52-week U.S. Treasury bills auctioned at the final auction prior to the preceding June 1, plus 3.25% per annum (but not to exceed 12% per annum); o made on or after October 1, 1992, but before July 1, 1994, shall be adjusted annually, and for any 12-month period beginning on July 1 shall be equal to the bond equivalent rate of 52-week U.S. Treasury bills auctioned at the final auction prior to the preceding June 1, plus 3.1% per annum (but not to exceed 10% per annum); o made on or after July 1, 1994, but before July 1, 1998, is the same as that for a loan made on or after October 1, 1992, but before July 1, 1994, except that such rate shall not exceed 9% per annum; or o made on or after July 1, 1998, but before July 1, 2003, shall be adjusted annually, and for any 12-month period beginning on July 1 shall be equal to the bond equivalent rate of 91-day U.S. Treasury bills auctioned at the final auction prior to the preceding June 1, plus 3.1% per annum (but not to exceed 9% per annum). o made on or after July 1, 2003, the applicable rate under current law will continue to be adjusted annually, but for any 12-month period commencing on a July 1 will be equal to the bond equivalent rate of securities with a comparable maturity (as established by the Secretary of Education), plus 2.1% per annum, but not to exceed 9% per annum. Rates effective on Federal PLUS Loans made after July 1, 2003 are subject to change by action of the United States Congress. For any 12-month period beginning on July 1, 2001 or any succeeding year, the weekly average 1-year constant maturity Treasury yield, as published by the Board of Governors of the Federal Reserve System, for the last calendar week before such June 26, will be substituted for the 52-week Treasury bill as the index for interest rate calculations. FEDERAL SLS LOANS General. Federal SLS Loans were limited to graduate or professional students, independent undergraduate students, and dependent undergraduate students, if the students' parents were unable to obtain a Federal PLUS Loan and were also unable to provide the students' expected family contribution. Except for dependent undergraduate students, eligibility for Federal SLS Loans was determined without regard to need. Federal SLS Loans are similar to Subsidized Federal Stafford Loans with respect to the involvement of guarantee agencies and the Secretary of Education in providing federal reinsurance on the loans. However, Federal SLS Loans differ significantly from Subsidized Federal Stafford Loans, particularly because federal interest subsidy payments are not available under the Federal SLS Loan program and special allowance payments are more restricted. Interest Rates For Federal SLS Loans. The applicable interest rates on Federal SLS Loans made prior to October 1, 1992 are identical to the applicable interest rates on Federal PLUS Loans made at the same time. For Federal SLS Loans made on or after October 1, 1992, the applicable interest rate is the same as the applicable interest rate on Federal PLUS Loans, except that the ceiling is 11% per annum instead of 10% per annum. FEDERAL CONSOLIDATION LOANS General. The Higher Education Act authorizes a program under which borrowers may be eligible to consolidate their various student loans into a single loan that is insured and reinsured on a basis similar to Federal Stafford Loans and PLUS loans. Federal Consolidation Loans may be obtained in an amount sufficient to pay outstanding principal, unpaid interest and late charges on various individual student loans. Loans that can be consolidated include the Federal Family Education Loan Program Loans, Perkins Loans, Health Professional Student Loan Programs, Nursing Student Loans and Health Education Assistance Loans. To be eligible for a Consolidation Loan, a borrower must: o have outstanding indebtedness on student loans made under the Federal Family Education Loan Program and/or certain other federal student loan programs, and o be in repayment status or in a grace period, or o be a defaulted borrower who has made arrangements to repay any defaulted loan satisfactory to the holder of the defaulted loan. A married couple who agree to be jointly liable on a Federal Consolidation Loan, for which the application is received on or after January 1, 1993, may be treated as an individual for purposes of obtaining a Consolidation Loan. For Federal Consolidation Loans disbursed prior to July 1, 1994 the borrower was required to have outstanding student loan indebtedness of at least $7,500. Prior to the adoption of the Higher Education Technical Amendments Act of 1993, Federal PLUS Loans could not be included in the Consolidation Loan. For Federal Consolidation Loans for which the applications were received prior to January 1, 1993, the minimum student loan indebtedness was $5,000 and the borrower could not be delinquent more than 90 days in the payment of such indebtedness. For applications received on or after January 1, 1993, borrowers may add additional loans to a Federal Consolidation Loan during the 180-day period following the origination of the Federal Consolidation Loan. Interest Rates For Federal Consolidation Loans. A Federal Consolidation Loan made prior to July 1, 1994 bears interest at a rate equal to the weighted average of the interest rates on the loans retired, rounded to the nearest whole percent, but not less than 9% per annum. Except as described in the next sentence, a Federal Consolidation Loan made on or after July 1, 1994 bears interest at a rate equal to the weighted average of the interest rates on the loans retired, rounded upward to the nearest whole percent, but with no minimum rate. For a Federal Consolidation Loan for which the application is received by an eligible lender on or after November 13, 1997 and before October 1, 1998, the interest rate shall be adjusted annually, and for any twelve-month period commencing on a July 1 shall be equal to the bond equivalent rate of 91-day U.S. Treasury bills auctioned at the final auction prior to the preceding June 1, plus 3.1% per annum, but not to exceed 8.25% per annum. Notwithstanding these general interest rates, the portion, if any, of a Federal Consolidation Loan that repaid a loan made under title VII, Sections 700-721 of the Public Health Services Act, as amended, has a different variable interest rate. Such portion is adjusted on July 1 of each year, but is the sum of the average of the T-Bill Rates auctioned for the quarter ending on the preceding June 30, plus 3.0%, without any cap on the interest rate. Federal Consolidation Loans made on or after October 1, 1998 and before July 1, 2003 will bear interest at a per annum rate equal to the lesser of 8.25% or the weighted average of the interest rates on the loans being consolidated, rounded to the nearest 1/8th of 1%. For a discussion of required payments that reduce the return on Federal Consolidation Loans, see "Fees--Rebate Fees on Federal Consolidation Loans" in this prospectus. MAXIMUM LOAN AMOUNTS Each type of loan is subject to limits on the maximum principal amount, both with respect to a given year and in the aggregate. Federal Consolidation Loans are limited only by the amount of eligible loans to be consolidated. All of the loans are limited to the difference between the cost of attendance and the other aid available to the student. Federal Stafford Loans are also subject to limits based upon needs analysis. Additional limits are described below. Loan Limits For Subsidized Federal Stafford Loans And Unsubsidized Federal Stafford Loans. Subsidized Federal Stafford Loans and Unsubsidized Federal Stafford Loans are generally treated as one loan type for loan limit purposes. A student who has not successfully completed the first year of a program of undergraduate education may borrow up to $2,625 in an academic year. A student who has successfully completed the first year, but who has not successfully completed the second year may borrow up to $3,500 per academic year. An undergraduate student who has successfully completed the first and second year, but who has not successfully completed the remainder of a program of undergraduate education, may borrow up to $5,500 per academic year. For students enrolled in programs of less than an academic year in length, the limits are generally reduced in proportion to the amount by which the programs are less than one year in length. A graduate or professional student may borrow up to $8,500 in an academic year. The maximum aggregate amount of Subsidized Federal Stafford Loans and Unsubsidized Federal Stafford Loans, including that portion of a Federal Consolidation Loan used to repay such loans, which an undergraduate student may have outstanding is $23,000. The maximum aggregate amount for a graduate and professional student, including loans for undergraduate education, is $65,500. The Secretary of Education is authorized to increase the limits applicable to graduate and professional students who are pursuing programs which the Secretary of Education determines to be exceptionally expensive. Prior to the enactment of the Higher Education Amendments of 1992, an undergraduate student who had not successfully completed the first and second year of a program of undergraduate education could borrow Federal Stafford Loans in amounts up to $2,625 in an academic year. An undergraduate student who had successfully completed the first and second year, but who had not successfully completed the remainder of a program of undergraduate education could borrow up to $4,000 per academic year. The maximum for graduate and professional students was $7,500 per academic year. The maximum aggregate amount of Federal Stafford Loans which a borrower could have outstanding, including that portion of a Federal Consolidation Loan used to repay such loans, was $17,250. The maximum aggregate amount for a graduate or professional student, including loans for undergraduate education, was $54,750. Prior to the 1986 changes, the annual limits were generally lower. Loan Limits For Federal PLUS Loans. For Federal PLUS Loans made on or after July 1, 1993, the amounts of Federal PLUS Loans are limited only by the student's unmet need. Prior to that time Federal PLUS Loans were subject to limits similar to those of Federal SLS Loans applied with respect to each student on behalf of whom the parent borrowed. Loan Limits For Federal SLS Loans. A student who had not successfully completed the first and second year of a program of undergraduate education can borrow an Federal SLS Loan in an amount of up to $4,000. A student who had successfully completed the first and second year, but who had not successfully completed the remainder of a program of undergraduate education could borrow up to $5,000 per year. Graduate and professional students can borrow up to $10,000 per year. Federal SLS Loans were subject to an aggregate maximum of $23,000 ($73,000 for graduate and professional students). Prior to the 1992 changes, Federal SLS Loans were available in amounts of $4,000 per academic year, up to a $20,000 aggregate maximum. Prior to the 1986 changes, a graduate or professional student could borrow $3,000 of Federal SLS Loans per academic year, up to a $15,000 maximum, and an independent undergraduate student could borrow $2,500 of Federal SLS Loans per academic year minus the amount of all other Federal Family Education Loan Program loans to such student for such academic year, up to the maximum amount of all Federal Family Education Loan Program loans to that student of $12,500. In 1989, the amount of Federal SLS Loans for students enrolled in programs of less than an academic year in length were limited in a manner similar to the limits described above under "Federal Stafford Loans". DISBURSEMENT REQUIREMENTS The Higher Education Act now requires that virtually all Federal Stafford Loans and Federal PLUS Loans be disbursed by eligible lenders in at least two separate installments. The proceeds of a loan made to any undergraduate first-year student borrowing for the first time under the program must be delivered to the student no earlier than thirty days after the enrollment period begins. REPAYMENT Repayment Periods. Loans made under the Federal Family Education Loan Program, other than Federal Consolidation Loans, must provide for repayment of principal in periodic installments over a period of not less than five nor more than ten years. After the 1998 Amendments, lenders are required to offer extended repayment schedules to new borrowers who accumulate outstanding Federal Family Education Loan Program loans of more than $30,000, in which case the repayment period may extend up to 25 years subject to certain minimum repayment amounts. A Federal Consolidation Loan must be repaid during a period agreed to by the borrower and lender, subject to maximum repayment periods which vary depending upon the principal amount of the borrower's outstanding student loans, but may not be longer than 30 years. For Federal Consolidation Loans for which the application was received prior to January 1, 1993, the repayment period could not exceed 25 years. Repayment of principal on a Stafford Loan does not commence while a student remains a qualified student, but generally begins upon expiration of the applicable grace period. Grace periods may be waived by borrowers. For Federal Stafford Loans for which the applicable rate of interest is 7% per annum, the repayment period commences not more than twelve months after the borrower ceases to pursue at least a half-time course of study. For other Subsidized Federal Stafford Loans and Unsubsidized Federal Stafford Loans, the repayment period commences not more than six months after the borrower ceases to pursue at least a half-time course of study. The six month or twelve month periods are the "grace periods". In the case of Federal SLS, PLUS and Consolidation Loans, the repayment period commences on the date of final disbursement of the loan, except that the borrower of an Federal SLS Loan who also has a Stafford Loan may defer repayment of the Federal SLS Loan to coincide with the commencement of repayment of the Subsidized Federal Stafford Loan or Unsubsidized Federal Stafford Loan. During periods in which repayment of principal is required, payments of principal and interest must in general be made at a rate of not less than the greater of $600 per year or the interest that accrues during the year, except that a borrower and lender may agree to a lesser rate at any time before or during the repayment period. A borrower may agree, with concurrence of the lender, to repay the loan in less than five years with the right subsequently to extend his minimum repayment period to five years. Borrowers may accelerate, without penalty, the repayment of all or any part of the loan. Income Sensitive Repayment Schedules. Since 1992, lenders of Federal Consolidation Loans have been required to establish graduated or income-sensitive repayment schedules and lenders of Stafford and Federal SLS Loans have been required to offer borrowers the option of repaying in accordance with graduated or income-sensitive repayment schedules. SLC Student Loan Trust-I may implement graduated repayment schedules and income-sensitive repayment schedules. Use of income-sensitive repayment schedules may extend the ten-year maximum term for up to five years. In addition, if the repayment schedule on a loan that has been converted to a variable interest rate does not provide for adjustments to the amount of the monthly installment payments, the ten-year maximum term may be extended for up to three years. Deferment Periods. No principal repayments need be made during certain periods of deferment prescribed by the Higher Education Act. For loans to a borrower who first obtained a loan which was disbursed before July 1, 1993, deferments are available: o during a period not exceeding three years while the borrower is a member of the Armed Forces, an officer in the Commissioned Corps of the Public Health Service or, with respect to a borrower who first obtained a student loan disbursed on or after July 1, 1987, or a student loan to cover the cost of instruction for a period of enrollment beginning on or after July 1, 1987, an active duty member of the National Oceanic and Atmospheric Administration Corps; o during a period not in excess of three years while the borrower is a volunteer under the Peace Corps Act; o during a period not in excess of three years while the borrower is a full-time volunteer under the Domestic Volunteer Act of 1973; o during a period not exceeding three years while the borrower is in service, comparable to the service described above as a full-time volunteer for an organization which is exempt from taxation under Section 501(c)(3) of the Code; o during a period not exceeding two years while the borrower is serving an internship necessary to receive professional recognition required to begin professional practice or service, or a qualified internship or residency program; o during a period not exceeding three years while the borrower is temporarily totally disabled, as established by sworn affidavit of a qualified physician, or while the borrower is unable to secure employment by reason of the care required by a dependent who is so disabled; o during a period not to exceed twenty-four months while the borrower is seeking and unable to find full-time employment; o during any period that the borrower is pursuing a full-time course of study at an eligible institution (or, with respect to a borrower who first obtained a student loan disbursed on or after July 1, 1987, or a student loan to cover the cost of instruction for a period of enrollment beginning on or after July 1, 1987, is pursuing at least a half-time course of study for which the borrower has obtained a loan under the Federal Family Education Loan Program), or is pursuing a course of study pursuant to a graduate fellowship program or a rehabilitation training program for disabled individuals approved by the Secretary of Education; o during a period, not in excess of 6 months, while the borrower is on parental leave; and o only with respect to a borrower who first obtained a student loan disbursed on or after July 1, 1987, or a student loan to cover the cost of instruction for a period of enrollment beginning on or after July 1, 1987, during a period not in excess of three years while the borrower is a full-time teacher in a public or nonprofit private elementary or secondary school in a "teacher shortage area" (as prescribed by the Secretary of Education), and during a period not in excess of 12 months for mothers, with preschool age children, who are entering or re-entering the work force and who are compensated at a rate not exceeding $1 per hour in excess of the federal minimum wage. For loans to a borrower who first obtains a loan on or after July 1, 1993, deferments are available: o during any period that the borrower is pursuing at least a half-time course of study at an eligible institution or a course of study pursuant to a graduate fellowship program or rehabilitation training program approved by the Secretary of Education; o during a period not exceeding three years while the borrower is seeking and unable to find full-time employment; and o during a period not in excess of three years for any reason which the lender determines, in accordance with regulations under the Higher Education Act, has caused or will cause the borrower economic hardship. Economic hardship includes working full time and earning an amount not in excess of the greater of the minimum wage or the poverty line for a family of two. Additional categories of economic hardship are based on the relationship between a borrower's educational debt burden and his or her income. Prior to the 1992 changes, only certain of the deferment periods described above were available to Federal PLUS Loan borrowers, and only certain deferment periods were available to Federal Consolidation Loan borrowers. Prior to the 1986 changes, Federal PLUS Loan borrowers were not entitled to certain deferment periods. Deferment periods extend the maximum term. Forbearance Period. The Higher Education Act also provides for periods of forbearance during which the borrower, in case of temporary financial hardship, may defer any payments. A borrower is entitled to forbearance for a period not to exceed three years while the borrower's debt burden under Title IV of the Higher Education Act (which includes the Federal Family Education Loan Program) equals or exceeds 20% of the borrower's gross income, and also is entitled to forbearance while he or she is serving in a qualifying medical or dental internship program or in a "national service position" under the National and Community Service Trust Act of 1993. In addition, mandatory administrative forbearances are provided in exceptional circumstances such as a local or national emergency or military mobilization, or when the geographical area in which the borrower or endorser resides has been designated a disaster area by the President of the United States or Mexico, the Prime Minister of Canada, or by the governor of a state. In other circumstances, forbearance is at the lender's option. Forbearance also extends the ten year maximum term. Interest Payments During Grace, Deferment and Forbearance Periods. The Secretary of Education makes interest payments on behalf of the borrower of certain eligible loans while the borrower is in school and during grace and deferment periods. Interest that accrues during forbearance periods and, if the loan is not eligible for interest subsidy payments, while the borrower is in school and during the grace and deferment periods, may be paid monthly or quarterly or capitalized not more frequently than quarterly. FEES Guarantee Fee. A guaranty agency is authorized to charge a premium, or guarantee fee, of up to 1% of the principal amount of the loan, which must be deducted proportionately from each installment payment of the proceeds of the loan to the borrower. Guarantee fees may not currently be charged to borrowers of Federal Consolidation Loans. However, borrowers may be charged an insurance fee to cover the costs of increased or extended liability with respect to Federal Consolidation Loans. For loans made prior to July 1, 1994, the maximum guarantee fee was 3% of the principal amount of the loan, but no such guarantee fee was authorized to be charged with respect to Unsubsidized Federal Stafford Loans. Origination Fee. An eligible lender is authorized to charge the borrower of a Subsidized Federal Stafford Loan, an Unsubsidized Federal Stafford Loan or Federal PLUS Loan an origination fee in an amount not to exceed 5% of the principal amount of the loan, and is required to charge the borrower of an Unsubsidized Federal Stafford Loan an or a Federal PLUS Loan origination fee in the amount of 3% of the principal amount of the loan. These fees must be deducted proportionately from each installment payment of the loan proceeds prior to payment to the borrower. These fees are not retained by the lender, but must be passed on to the Secretary of Education. Lender Origination Fee. The lender of any loan under the Federal Family Education Loan Program made on or after October 1, 1993 is required to pay to the Secretary of Education a fee equal to 0.5% of the principal amount of such loan. Rebate Fee On Federal Consolidation Loans. The holder of any Federal Consolidation Loan made on or after October 1, 1993 is required to pay to the Secretary of Education a monthly fee equal to .0875% (1.05% per annum) of the principal amount of, and accrued interest on the Federal Consolidation Loan. For loans made pursuant to applications received on or after October 1, 1998, and on or before January 31, 1999 the fee on consolidation loans of 1.05% is reduced to .62%. INTEREST SUBSIDY PAYMENTS Interest subsidy payments are interest payments paid with respect to an eligible loan before the time that the loan enters repayment and during grace and deferment periods. The Secretary of Education and the guarantee agencies enter into interest subsidy agreements whereby the Secretary of Education agrees to pay interest subsidy payments to the holders of eligible guaranteed loans for the benefit of students meeting certain requirements, subject to the holders' compliance with all requirements of the Higher Education Act. Only Subsidized Federal Stafford Loans and Federal Consolidation Loans for which the application was received on or after January 1, 1993, are eligible for interest subsidy payments. Federal Consolidation Loans made after August 10, 1993 are eligible for interest subsidy payments only if all loans consolidated thereby are Subsidized Federal Stafford Loans, except that Federal Consolidation Loans for which the application is received by an eligible lender on or after November 13, 1997 and before October 1, 1998, are eligible for interest subsidy payments on that portion of the Federal Consolidation Loan that repays Subsidized Federal Stafford Loans or similar subsidized loans made under the direct loan program. In addition, to be eligible for interest subsidy payments, guaranteed loans must be made by an eligible lender under the applicable guaranty agency's guarantee program, and must meet requirements prescribed by the rules and regulations promulgated under the Higher Education Act. The Secretary of Education makes interest subsidy payments quarterly on behalf of the borrower to the holder of a guaranteed loan in a total amount equal to the interest which accrues on the unpaid principal amount prior to the commencement of the repayment period of the loan or during any deferment period. A borrower may elect to forego interest subsidy payments, in which case the borrower is required to make interest payments. SPECIAL ALLOWANCE PAYMENTS The Higher Education Act provides for special allowance payments to be made by the Secretary of Education to eligible lenders. The rates for special allowance payments are based on formulas that differ according to the type of loan, the date the loan was originally made or insured and the type of funds used to finance the loan (taxable or tax-exempt). Federal Subsidized Federal Stafford Loans and Unsubsidized Federal Stafford Loans. The effective formulas for special allowance payment rates for Subsidized Federal Stafford Loans and Unsubsidized Federal Stafford Loans are summarized in the following chart. The T-Bill Rate mentioned in the chart refers to the average of the bond equivalent yield of the 91-day Treasury bills auctioned during the preceding quarter.
DATE OF LOANS ANNUALIZED SAP RATE - ---------------------------------- ---------------------------------------------------- On or after October 1, 1981 T-Bill Rate less Applicable Interest Rate + 3.5% On or after November 16, 1986 T-Bill Rate less Applicable Interest Rate + 3.25% On or after October 1, 1992 T-Bill Rate less Applicable Interest Rate + 3.1% On or after July 1, 1995 T-Bill Rate less Applicable Interest Rate + 2.5%(1) On or after July 1, 1998 T-Bill Rate less Applicable Interest Rate + 2.8%(2) On or after January 1, 2000 and before July 1, 2003 3-Month Commercial Paper Rate less Applicable Interest Rate + 2.34%(3)
- ------------ (1) Applies to Subsidized Federal Stafford Loans and Unsubsidized Federal Stafford Loans prior to the time such loans enter repayment and during any Deferment Periods (2) Substitute 2.2% in this formula while such loans are in the grace period. (3) Substitute 1.74% in this formula while such loans are in-school, grace or deferment. The effective formulas for special allowance payment rates for Subsidized Federal Stafford Loans and Unsubsidized Federal Stafford Loans differ depending on whether loans to borrowers were acquired or originated with the proceeds of tax-exempt obligations. There are minimum special allowance payment rates for Subsidized Federal Stafford Loans and Unsubsidized Federal Stafford Loans acquired with proceeds of tax-exempt obligations, which rates effectively ensure an overall minimum return of 9.5% on such loans. However, loans acquired with the proceeds of tax-exempt obligations originally issued after September 30, 1993 are not assured of a minimum special allowance payment. Federal PLUS and Federal SLS Loans. For Federal PLUS and Federal SLS Loans which bear interest at rates adjusted annually, special allowance payments are made only in years during which the interest rate ceiling on such loans operates to reduce the rate that would otherwise apply based upon the applicable formula. See "Interest Rates for Federal PLUS Loans" and "Interest Rates for Federal SLS Loans" in this prospectus. Special allowance payments are paid with respect to Federal PLUS Loans made on or after October 1, 1992 only if the rate that would otherwise apply exceeds 10% per annum. For Federal PLUS Loans made after July 1, 1998 and before July 1, 2003, special allowance is paid only if the sum of the 91-day Treasury bill rate determined at an auction held on June 1 of each year plus 3.1% exceeds 9.0%. The portion, if any, of a Federal Consolidation Loan that repaid a loan made under Title VII, Sections 700-721 of the Public Health Services Act, as amended, is ineligible for special allowance payments. The Higher Education Act provides that if special allowance payments or interest subsidy payments have not been made within 30 days after the Secretary of Education receives an accurate, timely and complete request therefor, the special allowance payable to such holder shall be increased by an amount equal to the daily interest accruing on the special allowance and interest subsidy payments due the holder. Special allowance payments and interest subsidy payments are reduced by the amount which the lender is authorized or required to charge as an origination fee. In addition, the amount of the lender origination fee is collected by offset to special allowance payments and interest subsidy payments. DESCRIPTION OF THE GUARANTEE AGENCIES The student loans in the trust estate will be guaranteed by any one or more guarantee agencies identified in the related prospectus supplement. The following discussion relates to guarantee agencies under the Federal Family Education Loan Program. A guaranty agency guarantees loans made to students or parents of students by lending institutions such as banks, credit unions, savings and loan associations, certain schools, pension funds and insurance companies. A guaranty agency generally purchases defaulted student loans which it has guaranteed with its reserve fund. A lender may submit a default claim to the guaranty agency after the student loan has been delinquent for at least 270 days. The default claim package must include all information and documentation required under the Federal Family Education Loan Program regulations and the guaranty agency's policies and procedures. In general, a guaranty agency's reserve fund has been funded principally by administrative cost allowances paid by the Secretary of Education, guarantee fees paid by lenders, investment income on moneys in the reserve fund, and a portion of the moneys collected from borrowers on guaranteed loans that have been reimbursed by the Secretary of Education to cover the guaranty agency's administrative expenses. Various changes to the Higher Education Act have adversely affected the receipt of revenues by the guarantee agencies and their ability to maintain their reserve funds at previous levels, and may adversely affect their ability to meet their guarantee obligations. These changes include: o the reduction in reinsurance payments from the Secretary of Education because of reduced reimbursement percentages; o the reduction in maximum permitted guarantee fees from 3% to 1% for loans made on or after July 1, 1994; o the replacement of the administrative cost allowance with a student loan processing and issuance fee equal to 65 basis points (40 basis points for loans made on or after October 1, 1993) paid at the time a loan is guaranteed, and an account maintenance fee of 12 basis points (10 basis points for fiscal years 2001-2003) paid annually on outstanding guaranteed student loans; o the reduction in supplemental preclaims assistance payments from the Secretary of Education; and o the reduction in retention by a guaranty agency of collections on defaulted loans from 27% to 24% (23% beginning on October 1, 2003). Additionally, the adequacy of a guaranty agency's reserve fund to meet its guarantee obligations with respect to existing student loans depends, in significant part, on its ability to collect revenues generated by new loan guarantees. The Federal Direct Student Loan Program discussed below may adversely affect the volume of new loan guarantees. Future legislation may make additional changes to the Higher Education Act that would significantly affect the revenues received by guarantee agencies and the structure of the guarantee agency program. The Higher Education Act gives the Secretary of Education various oversight powers over guarantee agencies. These include requiring a guarantee agency to maintain its reserve fund at a certain required level and taking various actions relating to a guaranty agency if its administrative and financial condition jeopardizes its ability to meet its obligations. These actions include, among others, providing advances to the guaranty agency, terminating the guaranty agency's federal reimbursement contracts, assuming responsibility for all functions of the guaranty agency, and transferring the guaranty agency's guarantees to another guaranty agency or assuming such guarantees. The Higher Education Act provides that a guaranty agency's reserve fund shall be considered to be the property of the United States to be used in the operation of the Federal Family Education Loan Program or the Federal Direct Student Loan Program, and, under certain circumstances, the Secretary of Education may demand payment of amounts in the reserve fund. The 1998 Amendments mandate the recall of guaranty agency reserve funds by the Secretary of Education amounting to $85 million in fiscal year 2002, $82.5 million in fiscal year 2006, and $82.5 million in fiscal year 2007. However, certain minimum reserve levels are protected from recall, and under the 1998 Amendments, guaranty agency reserve funds were restructured to provide guarantee agencies with additional flexibility in choosing how to spend certain funds they receive. The new recall of reserves for guarantee agencies increases the risk that resources available to guarantee agencies to meet their guarantee obligation will be significantly reduced. Relevant federal laws, including the Higher Education Act, may be further changed in a manner that may adversely affect the ability of a guaranty agency to meet its guarantee obligations. Under the Higher Education Act, if the Department of Education has determined that a guaranty agency is unable to meet its insurance obligations, the holders of loans guaranteed by such guaranty agency must submit claims directly to the Department of Education, and the Department of Education is required to pay the full guarantee payment due with respect thereto in accordance with guarantee claims processing standards no more stringent than those applied by the guaranty agency. There are no assurances as to the Secretary of Education's actions if a guaranty agency encounters administrative or financial difficulties or that the Secretary of Education will not demand that a guaranty agency transfer additional portions or all of its reserve fund to the Secretary of Education. Information relating to the particular guarantee agencies guaranteeing our student loans will be set forth in the prospectus supplement. FEDERAL AGREEMENTS General. A guaranty agency's right to receive federal reimbursements for various guarantee claims paid by such guaranty agency is governed by the Higher Education Act and various contracts entered into between guarantees agencies and the Secretary of Education. Each guaranty agency and the Secretary of Education have entered into federal reimbursement contracts pursuant to the Higher Education Act, which provide for the guaranty agency to receive reimbursement of a percentage of insurance payments that the guaranty agency makes to eligible lenders with respect to loans guaranteed by the guaranty agency prior to the termination of the federal reimbursement contracts or the expiration of the authority of the Higher Education Act. The federal reimbursement contracts provide for termination under certain circumstances and also provide for certain actions short of termination by the Secretary of Education to protect the federal interest. In addition to guarantee benefits, qualified student loans acquired under the Federal Family Education Loan Program benefit from certain federal subsidies. Each guaranty agency and the Secretary of Education have entered into an Interest Subsidy Agreement under the Higher Education Act which entitles the holders of eligible loans guaranteed by the guaranty agency to receive interest subsidy payments from the Secretary of Education on behalf of certain students while the student is in school, during a six to twelve month grace period after the student leaves school, and during certain deferment periods, subject to the holders' compliance with all requirements of the Higher Education Act. United States Courts of Appeals have held that the federal government, through subsequent legislation, has the right unilaterally to amend the contracts between the Secretary of Education and the guarantee agencies described herein. Amendments to the Higher Education Act in 1986, 1987, 1992, 1993, and 1998, respectively o abrogated certain rights of guarantee agencies under contracts with the Secretary of Education relating to the repayment of certain advances from the Secretary of Education, o authorized the Secretary of Education to withhold reimbursement payments otherwise due to certain guarantee agencies until specified amounts of such guarantee agencies' reserves had been eliminated, o added new reserve level requirements for guarantee agencies and authorized the Secretary of Education to terminate the Federal Reimbursement Contracts under circumstances that did not previously warrant such termination, o expanded the Secretary of Education's authority to terminate such contracts and to seize guarantee agencies' reserves, and o mandated the additional recall of guaranty agency reserve funds. FEDERAL INSURANCE AND REIMBURSEMENT OF GUARANTEE AGENCIES Effect of Annual Claims Rate. With respect to loans made prior to October 1, 1993, the Secretary of Education currently agrees to reimburse the guarantee agency for up to 100% of the amounts paid on claims made by lenders, as discussed in the formula described below, so long as the eligible lender has properly serviced such loan. The amount of reimbursement is lower for loans originated after October 1, 1993, as described below. Depending on the claims rate experience of a guaranty agency, such reimbursement may be reduced as discussed in the formula described below. The Secretary of Education also agrees to repay 100% of the unpaid principal plus applicable accrued interest expended by a guaranty agency in discharging its guarantee obligation as a result of the bankruptcy, death, or total and permanent disability of a borrower, or in the case of a Federal PLUS Loan, the death of the student on behalf of whom the loan was borrowed, or in certain circumstances, as a result of school closures, which reimbursements are not to be included in the calculations of the guarantee agency's claims rate experience for the purpose of federal reimbursement under the Federal Reimbursement Contracts. The formula used for loans initially disbursed prior to October 1, 1993 is summarized below: CLAIMS RATE FEDERAL PAYMENT --------------------------------- ------------------------------------ 0% up to 5%...................... 100% 5% up to 9%...................... 100% of claims up to 5%; 9% and over...................... 90% of claims 5% and over 100% of claims up to 5%; 90% of claims 5% and over, up to 9%; 80% of claims 9% and over The claims experience is not accumulated from year to year, but is determined solely on the basis of claims in any one federal fiscal year compared with the original principal amount of loans in repayment at the beginning of that year. The 1993 Amendments reduce the reimbursement amounts described above, effective for loans initially disbursed on or after October 1, 1993 as follows: 100% reimbursement is reduced to 98%, 90% reimbursement is reduced to 88%, and 80% reimbursement is reduced to 78%, subject to certain limited exceptions. The 1998 Amendments further reduce the federal reimbursement amounts from 98% to 95%, 88% to 85%, and 78% to 75% respectively, for student loans first disbursed on or after October 1, 1998. The reduced reinsurance for federal guaranty agencies increases the risk that resources available to guarantee agencies to meet their guarantee obligation will be significantly reduced. Reimbursement. The original principal amount of loans guaranteed by a guaranty agency which are in repayment for purposes of computing reimbursement payments to a guaranty agency means the original principal amount of all loans guaranteed by a guaranty agency less: o the original principal amount of such loans that have been fully repaid, and o the original amount of such loans for which the first principal installment payment has not become due. Guarantee agencies with default rates below 5% are required to pay the Secretary of Education annual fees equivalent to 0.51% of new loans guaranteed, while all other such agencies must pay a 0.5% fee. The Secretary of Education may withhold reimbursement payments if a guaranty agency makes a material misrepresentation or fails to comply with the terms of its agreements with the Secretary of Education or applicable federal law. Under the guarantee agreements, if a payment on a Federal Family Education Loan guaranteed by a guaranty agency is received after reimbursement by the Secretary of Education, the guaranty agency is entitled to receive an equitable share of the payment. Any originator of any student loan guaranteed by a guaranty agency is required to discount from the proceeds of the loan at the time of disbursement, and pay to the guaranty agency, an insurance premium which may not exceed that permitted under the Higher Education Act. Under present practice, after the Secretary of Education reimburses a guaranty agency for a default claim paid on a guaranteed loan, the guarantee agency continues to seek repayment from the borrower. The guaranty agency returns to the Secretary of Education payments that it receives from a borrower after deducting and retaining: a percentage amount equal to the complement of the reimbursement percentage in effect at the time the loan was reimbursed, and an amount equal to 24% of such payments for certain administrative costs. The Secretary of Education may, however, require the assignment to the Secretary of Education of defaulted guaranteed loans, in which event no further collections activity need be undertaken by the guaranty agency, and no amount of any recoveries shall be paid to the guaranty agency. A guaranty agency may enter into an addendum to its Interest Subsidy Agreement that allows the guaranty agency to refer to the Secretary of Education certain defaulted guaranteed loans. Such loans are then reported to the IRS to "offset" any tax refunds which may be due any defaulted borrower. To the extent that the guaranty agency has originally received less than 100% reimbursement from the Secretary of Education with respect to such a referred loan, the guaranty agency will not recover any amounts subsequently collected by the federal government which are attributable to that portion of the defaulted loan for which the guaranty agency has not been reimbursed. Rehabilitation of Defaulted Loans. Under the Higher Education Act, the Secretary of Education is authorized to enter into an agreement with a guarantee agency pursuant to which the guaranty agency shall sell defaulted loans that are eligible for rehabilitation to an eligible lender. The guaranty agency shall repay the Secretary of Education an amount equal to 81.5% of the then current principal balance of such loan, multiplied by the reimbursement percentage in effect at the time the loan was reimbursed. The amount of such repayment shall be deducted from the amount of federal reimbursement payments for the fiscal year in which such repayment occurs, for purposes of determining the reimbursement rate for that fiscal year. For a loan to be eligible for rehabilitation, the guaranty agency must have received consecutive payments for 12 months of amounts owed on such loan. Upon rehabilitation, a loan is eligible for all the benefits under the Higher Education Act for which it would have been eligible had no default occurred (except that a borrower's loan may only be rehabilitated once). Eligibility For Federal Reimbursement. To be eligible for federal reimbursement payments, guaranteed loans must be made by an eligible lender under the applicable guaranty agency's guarantee program, which must meet requirements prescribed by the rules and regulations promulgated under the Higher Education Act, including the borrower eligibility, loan amount, disbursement, interest rate, repayment period and guarantee fee provisions described herein and the other requirements set forth in the Higher Education Act. Prior to the 1998 Amendments, a Federal Family Education Loan was considered in to be in default for purposes of the Higher Education Act when the borrower failed to make an installment payment when due, or to comply with the other terms of the loan, and if the failure persists for 180 days in the case of a loan repayable in monthly installments or for 240 days in the case of a loan repayable in less frequent installments. Under the 1998 Amendments, the delinquency period required for a student loan to be declared in default is increased from 180 days to 270 days for loans payable in monthly installments on which the first day of delinquency occurs on or after the date of enactment of the 1998 Amendments and from 240 days to 330 days for a loan payable less frequently than monthly on which the delinquency occurs after the date of enactment of the 1998 Amendments. The guaranty agency must pay the lender for the defaulted loan prior to submitting a claim to the Secretary of Education for reimbursement. The guaranty agency must submit a reimbursement claim to the Secretary of Education within 45 days after it has paid the lender's default claim. As a prerequisite to entitlement to payment on the guarantee by the guaranty agency, and in turn payment of reimbursement by the Secretary of Education, the lender must have exercised reasonable care and diligence in making, servicing and collecting the guaranteed loan. Generally, these procedures require: o that completed loan applications be processed; o a determination of whether an applicant is an eligible borrower attending an eligible institution under the Higher Education Act be made; o the borrower's responsibilities under the loan be explained to him or her; o the promissory note evidencing the loan be executed by the borrower; and o that the loan proceeds be disbursed by the lender in a specified manner. After the loan is made, the lender must establish repayment terms with the borrower, properly administer deferments and forbearances and credit the borrower for payments made. If a borrower becomes delinquent in repaying a loan, a lender must perform certain collection procedures, primarily telephone calls, demand letters, skiptracing procedures and requesting assistance from the applicable guaranty agency, that vary depending upon the length of time a loan is delinquent. DIRECT LOANS The 1993 Amendments authorized a program of "direct loans," to be originated by schools with funds provided by the Secretary of Education. Under the direct loan program, the Secretary of Education is directed to enter into agreements with schools, or origination agents in lieu of schools, to disburse loans with funds provided by the Secretary of Education. Participation in the program by schools is voluntary. The goals set forth in the 1993 Amendments call for the direct loan program to constitute 5% of the total volume of loans made under the Federal Family Education Loan Program and the direct loan program for academic year 1994-1995, 40% for academic year 1995-1996, 50% for academic years 1996-1997 and 1997-1998 and 60% for academic year 1998-1999. No provision is made for the size of the direct loan program thereafter. Based upon information released by the General Accounting Office, participation by schools in the direct loan program has not been sufficient to meet the goals for the 1995-1996 or 1996-1997 academic years. The 1998 Amendments removed references to the "phase-in" of the Direct Loan Program, including restrictions on annual limits for Direct Loan Program volume and the Secretary of Education's authority to select additional institutions to achieve balanced school representation. The loan terms are generally the same under the direct loan program as under the Federal Family Education Loan Program, though more flexible repayment provisions are available under the direct loan program. At the discretion of the Secretary of Education, students attending schools that participate in the direct loan program (and their parents) may still be eligible for participation in the Federal Family Education Loan Program, though no borrower could obtain loans under both programs for the same period of enrollment. It is difficult to predict the impact of the direct lending program. There is no way to accurately predict the number of schools that will participate in future years, or, if the Secretary of Education authorizes students attending participating schools to continue to be eligible for Federal Family Education Loan Program loans, how many students will seek loans under the direct loan program instead of the Federal Family Education Loan Program. In addition, it is impossible to predict whether future legislation will eliminate, limit or expand the direct loan program or the Federal Family Education Loan Program. GUARANTEE AGENCIES Although SLC Student Loan Trust-I expects that most of the student loans it acquires under the indenture will be guaranteed by the guarantee agencies described in the related prospectus supplement, SLC Student Loan Trust-I may acquire student loans under the indenture which are guaranteed by other guarantee agencies with the approval of the rating agencies. MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS GENERAL The following discussion, which is based on the advice of counsel to be specified in the prospectus supplement, summarizes certain of the U.S. federal income tax consequences of the purchase, ownership and disposition of notes. Except as provided below under "U.S. Federal Income Tax Treatment of Non-U.S. Holders of Notes," this summary deals only with a beneficial owner of the notes that is (i) a citizen or resident of the United States, (ii) a corporation (or other entity that is treated as a corporation for U.S. federal tax purposes) that is created or organized in or under the laws of the United States or any State thereof (including the District of Columbia), (iii) an estate the income of which is subject to U.S. federal income taxation regardless of its source, or (iv) a trust if a court within the United States is able to exercise primary supervision over its administration and one or more United States persons have the authority to control all of its substantial decisions (each, a "U.S. HOLDER"). If a partnership (including any entity that is treated as a partnership for U.S. federal tax purposes) is a beneficial owner of notes, the treatment of a partner in the partnership will generally depend upon the status of the partner and upon the activities of the partnership. A beneficial owner of notes that is a partnership, and partners in such a partnership, should consult their tax advisors about the U.S. federal income tax consequences of holding and disposing of the notes. A "NON-U.S. HOLDER" is a beneficial owner of a note that is not a U.S. Holder. This discussion is based on interpretations of the Internal Revenue Code of 1986, as amended (the "CODE"), regulations issued thereunder, and rulings and decisions currently in effect (or in some cases proposed), all of which are subject to change. Any such change may be applied retroactively and may adversely affect the federal income tax consequences described herein. This summary addresses only U.S. Holders that purchase notes at initial issuance and beneficially own such notes as capital assets and not as part of a "straddle," "hedge," "synthetic security" or a "conversion transaction" for federal income tax purposes, or as part of some other integrated investment. This summary does not discuss all of the tax consequences that may be relevant to particular investors or to investors subject to special treatment under the federal income tax laws (such as banks, thrifts, insurance companies, retirement plans, real estate investment trusts, regulated investment companies, securities dealers or investors whose functional currency is not the U.S. dollar). Accordingly, prospective investors are urged to consult their tax advisors with respect to the federal, state and local tax consequences of investing in the notes, as well as any consequences arising under the laws of any other taxing jurisdiction to which they may be subject. TAX CHARACTERIZATION OF THE TRUST. The trust, which issues one or more classes of notes to investors and all of the equity interests of which are retained by a single beneficial owner, will not be a separate entity that is an association (or publicly traded partnership) taxable as a corporation for federal income tax purposes, assuming that the terms of the trust agreement and related documents will be complied with. However, if one or more classes of notes are treated as equity rather than indebtedness for federal income tax purposes the trust could be treated as a partnership or publicly traded partnership taxable as a corporation, as described below. TAX CONSEQUENCES TO HOLDERS OF THE NOTES. Treatment of the Notes as Indebtedness. The notes will be treated as indebtedness for U.S. federal income tax purposes. However, because no specific authority exists with respect to the characterization for U.S. federal income tax purposes of securities having terms substantially similar to the notes, the IRS could assert, and a court could ultimately hold, that the notes constitute equity in the trust for U.S. federal income tax purposes. If the notes are treated as equity in, rather than debt of, the trust for U.S. federal tax purposes, there may be adverse tax consequences to a U.S. Holder of the notes. If the notes are treated as equity in the trust, the trust could be treated as a publicly traded partnership that would be taxable as a corporation. In this case, the entity would be subject to U.S. federal income taxes at corporate tax rates on its taxable income generated by student loans. An entity-level tax could result in reduced distributions to noteholders and noteholders could be liable for a share of the tax. Furthermore, even if the trust is not taxable as a corporation, the treatment of notes as equity interests in a partnership could have adverse tax consequences to holders of the notes. For example, income from classes of notes to tax-exempt entities (including pension funds) might be "unrelated business taxable income," income to foreign holders may be subject to U.S. withholding tax and U.S. tax return filing requirements, individual holders might be subject to limitations on their ability to deduct their share of trust expenses, and holders would be required to report income from the trust for each of their own taxable years in which the taxable year of the trust ends. In addition, a holder that is a cash basis taxpayer would be required to report income with respect to the trust when it accrues, rather than under the cash method of accounting. The trust's characterization of the notes as indebtedness for U.S. federal income tax purposes will be binding on U.S. holders. Except as otherwise indicated, the balance of this summary assumes that the notes are treated as indebtedness for U.S. federal, state and local income and franchise tax purposes. Stated Interest. Except as otherwise provided in a related Prospectus Supplement, stated interest on the notes will be taxable to a U.S. Holder as ordinary interest income as the interest accrues or is paid (in accordance with the holder's method of tax accounting). Original Issue Discount. A note may be issued with original issue discount. A debt instrument has original issue discount to the extent its "stated redemption price at maturity" exceeds its "issue price" (each as defined below) by more than a de minimis amount (generally 0.25% of the security's stated redemption price at maturity multiplied by the number of years to its maturity, based on the anticipated weighted average life of the securities and weighing each payment by reference to the number of full years elapsed from the closing date to the anticipated date of such payment. A note's "stated redemption price at maturity" includes all payments thereon other than payments of "qualified stated interest," and its "remaining stated maturity" at any time is the sum of all future payments to be made thereon other than payments of "qualified stated interest." Stated interest is "qualified stated interest" generally if it is payable at least annually during the entire term of a debt instrument at a single fixed rate of interest or at a rate based on a single "qualifying" interest index (which includes certain conventional LIBOR-based rates). Except as otherwise provided in a related Prospectus Supplement, all stated interest on the notes will be treated as qualified stated interest. The term "issue price" generally means the price (including any pre-issuance accrued interest) at which a substantial portion of such debt instruments was first sold to investors. U.S. Holders generally will be required to include non-de minimis original issue discount on the notes in income as it accrues, without regard to the timing of receipt of the cash attributable to such income or to the U.S. Holder's method of accounting. Such discount would accrue under a constant yield method based on the original yield to maturity of the instrument calculated by reference to its issue price. If a U.S. Holder is considered to purchase a note issued with original issue discount at a price that exceeds its "adjusted issue price" (as defined below), such holder may reduce its original issue discount income by the proportion of the aggregate amount of original issue discount remaining to be accrued as of the time of the purchase that is represented by such excess. No amount of original issue discount need be included in income if the purchase price equals or exceeds the remaining stated redemption price at maturity. The "adjusted issue price" of notes at any time is the sum of their issue price and the amount of previously accrued original issue discount, reduced by the sum of all prior payments of amounts other than qualified stated interest. Premium and Market Discount. In the event that the notes are considered to be purchased by a U.S. Holder at a price greater than their remaining stated redemption price at maturity, they will be considered to have been purchased at a premium. The noteholder may elect to amortize such premium (as an offset to interest income), using a constant yield method, over the remaining term of the notes. Special rules apply to determine the amount of premium on a "variable rate debt instrument" and certain other debt instruments. Prospective U.S. Holders should consult their tax advisors regarding the amortization of bond premium. In the event notes are considered to be purchased by a U.S. Holder at a price that is lower than their remaining stated redemption price at maturity, or in the case of notes issued with original issue discount, their adjusted issue price, by more than a de minimis amount (generally 0.25% of their remaining stated redemption price at maturity multiplied by the number of remaining years to its maturity, based on the anticipated weighted average life of the securities and weighing each payment by reference to the number of full years elapsed from the closing date to the anticipated date of such payment, the notes will be considered to have "market discount" in the hands of such U.S. Holder. In that event, unless the U.S. Holder elects to include such market discount in income as it accrues, gain realized by the U.S. Holder on the sale or retirement of the notes will be treated as ordinary income to the extent of the market discount that accrued thereon while it was considered to be held by such U.S. Holder. In addition, the U.S. Holder could be required to defer the deduction of all or a portion of the interest paid on any indebtedness incurred or continued to purchase or carry the note unless the U.S. Holder elected to include market discount in income currently. Such an election applies to all debt instruments held by a taxpayer and may not be revoked without the consent of the IRS. In general terms, market discount on notes will accrue ratably over the term of such notes or, at the election of the holder, under a constant yield method. Tax Basis. A U.S. Holder's initial tax basis in the notes will equal the purchase price, and generally will be increased by any amounts of original issue discount or market discount includible in income with respect thereto, and reduced by any payments other than qualified stated interest and any amortized premium with respect thereto. Sale, Exchange and Retirement of Notes. Upon the sale, exchange or retirement of notes, a U.S. Holder generally will recognize gain or loss equal to the difference between the amount realized on the sale, exchange or retirement of the notes and the U.S. Holder's tax basis in the notes. Except as discussed above with respect to market discount, gain or loss recognized by a U.S. Holder in respect of the sale, exchange, redemption or other disposition of notes generally will be capital gain or loss, and will be long-term capital gain or loss if the U.S. Holder is treated as having held the notes for more than one year at the time of such disposition. The ability to use capital losses to offset ordinary income in determining taxable income generally is limited. Short-Term Notes. The rules set forth above will also generally apply to notes having original maturities of not more than one year, but with certain modifications. Holders should consult their tax advisors regarding the effect these modifications may have on them. TAX-EXEMPT ORGANIZATIONS. Except as otherwise provided in a related Prospectus Supplement, income or gain from the notes held by a tax-exempt organization will not be subject to the tax on unrelated business taxable income if the notes are not "debt financed" property. FOREIGN INVESTORS. Non-U.S. Holders will not be subject to U.S. federal income or withholding tax in respect of interest income or gain on the notes if (1) the Non-U.S. Holder provides an appropriate statement, signed under penalties of perjury, identifying the Non-U.S. Holder and stating, among other things, that the Non-U.S. Holder is not a U.S. person, and (2) the Non-U.S. Holder is not a "10-percent shareholder" or "related controlled foreign corporation" with respect to the Issuer, unless certain exceptions apply. To the extent these conditions are not met, a 30% withholding tax will apply to interest income on the notes, unless an income tax treaty reduces or eliminates such tax or the interest is effectively connected with the conduct of a trade or business within the United States by such Non-U.S. Holder. In the latter case, such Non-U.S. Holder will be subject to U.S. federal income tax with respect to all income from the notes at regular rates applicable to U.S. taxpayers. BACKUP WITHHOLDING AND INFORMATION REPORTING. Backup withholding tax and certain information reporting requirements may apply to payments of principal, premium and interest (including any original issue discount) made to, and the proceeds of disposition of a note by, a U.S. Holder. Backup withholding will apply only if (i) the U.S. Holder fails to furnish its Taxpayer Identification Number to the payor in the manner required, (ii) the IRS notifies the payor that the U.S. Holder has furnished an incorrect Taxpayer Identification Number, (iii) the IRS notifies the payor that the U.S. Holder has failed to report properly payments of interest and dividends or (iv) under certain circumstances, the U.S. Holder fails to certify, under penalty of perjury, that it has both furnished a correct Taxpayer Identification Number and not been notified by the IRS that it is subject to backup withholding for failure to report interest and dividend payments. Backup withholding will not apply with respect to payments made to certain exempt recipients, such as corporations and financial institutions. U.S. Holders should consult their tax advisors regarding their qualification for exemption from backup withholding and the procedure for obtaining such an exemption. Backup withholding tax is not an additional tax. The amount of any backup withholding from a payment to a U.S. Holder will be allowed as a credit against the holder's federal income tax liability and may entitle the holder to a refund, provided that the required information is furnished to the IRS. STATE, LOCAL AND FOREIGN TAXES. Noteholders may be subject to state, local or foreign taxes with respect to an investment in the notes. Prospective investors are urged to consult their tax advisors with respect to the state, local and foreign tax consequences of an investment in the notes. THE FEDERAL TAX DISCUSSIONS SET FORTH ABOVE ARE INCLUDED FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A NOTEHOLDER'S PARTICULAR TAX SITUATION. PROSPECTIVE PURCHASERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF NOTES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, FOREIGN AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN FEDERAL OR OTHER TAX LAWS. ERISA CONSIDERATIONS The Employee Retirement Income Security Act of 1974, as amended ("ERISA"), imposes certain fiduciary and prohibited transaction restrictions on employee pension and welfare benefit plans subject to ERISA ("ERISA Plans"). Section 4975 of the Code imposes essentially the same prohibited transaction restrictions on tax-qualified retirement plans described in Section 401(a) of the Code ("Qualified Retirement Plans") and on Individual Retirement Accounts ("IRAs") described in Section 408(b) of the Code (collectively, "Tax-Favored Plans"). Certain employee benefit plans, such as governmental plans (as defined in Section 3(32) of ERISA), and, if no election has been made under Section 410(d) of the Code, church plans (as defined in Section 3(33) of ERISA), are not subject to Title I of ERISA. However, such plans may be subject to the provisions of applicable federal, state or local law ("Similar Law") materially similar to the foregoing provisions of ERISA or the Code. Moreover, any such governmental plan or church plan which is qualified under Section 401(a) and exempt from taxation under Section 501(a) of the Code is subject to the prohibited transaction rules set forth in Section 503 of the Code. In addition to the imposition of general fiduciary requirements including those of investment prudence and diversification and the requirement that an ERISA Plan's investment be made in accordance with the documents governing the ERISA Plan, Section 406 of ERISA and Section 4975 of the Code prohibit a broad range of transactions involving assets of ERISA Plans and Tax-Favored Plans and entities whose underlying assets include plan assets by reason of ERISA Plans or Tax-Favored Plans investing in such entities (collectively hereafter "Plan" or "Plans") and persons ("Parties in Interest" or "Disqualified Persons") who have certain specified relationships to the Plans, unless a statutory or administrative exemption is available. Certain Parties in Interest (or Disqualified Persons) that participate in a prohibited transaction may be subject to a penalty (or an excise tax) imposed pursuant to Section 502(i) of ERISA or Section 4975 of the Code unless a statutory or administrative exemption is available. Section 502(l) of ERISA requires the Secretary of the U.S. Department of Labor (the "DOL") to assess a civil penalty against a fiduciary who breaks any fiduciary responsibility under or commits any other violation of part 4 of Title I of ERISA or any other person who knowingly participates in such breach or violation. The investment in a security by a Plan may, in certain circumstances, be deemed to include an investment in the assets of SLC Student Loan Trust-I. The DOL has promulgated regulations set forth at 29 CFR ss. 2510.3-101 (the "Regulations") concerning whether or not an ERISA Plan's assets would be deemed to include an interest in the underlying assets of an entity (such as a Trust Fund) for purposes of the general fiduciary responsibility provisions of ERISA and for the prohibited transaction provisions of ERISA and the Code, when a Plan acquires an "equity interest" in such entity. Under such Regulations the assets of an ERISA Plan will not include an interest in the assets of an entity, the equity interests of which are acquired by the ERISA Plan, if at no time do ERISA Plans in the aggregate own 25% or more of the value of any class of equity interests in such entity. Because the availability of this exemption depends upon the identity of the registered owners at any time, there can be no assurance that the notes will qualify for this exemption. The Regulations also provide an exemption from "plan asset" treatment for securities issued by an entity if such securities are debt securities under applicable state law with no "substantial equity features." Except as otherwise specified with respect to a Series in the related prospectus supplement, the notes are intended to represent debt of SLC Student Loan Trust-I for state law and federal income tax purposes; however, there can be no assurance that the DOL will not challenge such position. Assuming that a class of notes will be considered debt with no substantial equity features for purposes of the Regulations, the assets of the Trust will not be characterized as "plan assets" under the Regulations. The related prospectus supplement will set forth whether any class of notes may be purchased by Plans or governmental or church plans subject to Similar Law. Without regard to whether the notes are treated as an "equity interest" for such purposes, the acquisition or holding of notes by or on behalf of a Plan could be considered to give rise to a prohibited transaction if SLC Student Loan Trust-I or any of their respective affiliates is or becomes a Party in Interest or Disqualified Person with respect to such Plan, or in the event that a note is purchased in the secondary market by a Plan from a Party in Interest or Disqualified Person with respect to such Plan. There can be no assurance that SLC Student Loan Trust-I or any of their respective affiliates will not be or become a party in interest or a disqualified person with respect to a Plan that acquires notes. However, one or more of the following prohibited transaction class exemptions may apply to the acquisition, holding and transfer of the notes: Prohibited Transaction Class Exemption ("PTCE") 84-14 (regarding investments by qualified professional asset managers), PTCE 90-1 (relating to investments by insurance company pooled separate accounts), PTCE 91-38 (regarding investments by bank collective investment funds), PTCE 95-60 (regarding investments by insurance company general accounts) and PTCE 96-23 (regarding investments by in-house asset managers). Any ERISA Plan fiduciary considering whether to purchase notes of any Series on behalf of an ERISA Plan should consult with its counsel regarding the applicability of the fiduciary responsibility and prohibited transaction provisions of ERISA and the Code to such investment and the availability of any of the exemptions referred to above. Persons responsible for investing the assets of Tax-Favored Plans that are not ERISA Plans should seek similar counsel with respect to the prohibited transaction provisions of the Code. Fiduciaries of plans subject to Similar Law should make a similar determination. PLAN OF DISTRIBUTION SLC Student Loan Trust-I may sell the notes of each series to or through underwriters by "best efforts" underwriting or a negotiated firm commitment underwriting by the underwriters, and also may sell the notes directly to other purchasers or through agents. If so indicated in the prospectus supplement, SLC Student Loan Trust-I may sell such notes, directly or through agents, through a competitive bidding process described in the applicable prospectus supplement. SLC Student Loan Trust-I intends that notes will be offered through such various methods from time to time and that offerings may be made concurrently through more than one of these methods or that an offering of a particular series of the notes may be made through a combination of such methods. The distribution of the notes may be effected from time to time in one or more transactions at a fixed price or prices, which may be changed, or at market prices prevailing at the time of sale, at prices related to such prevailing market prices or at negotiated prices based, among other things, upon existing interest rates, general economic conditions and investors' judgments as to the price of the notes. In connection with the sale of the notes, underwriters may receive compensation from SLC Student Loan Trust-I or from the purchasers of such notes for whom they may act as agents in the form of discounts, concessions or commissions. Underwriters may sell the notes of a series to or through dealers and those dealers may receive compensation in the form of discounts, concessions or commissions from the underwriters or commissions from the purchasers for whom they may act as agents. Underwriters, dealers and agents that participate in the distribution of the notes may be deemed to be underwriters and any discounts or commissions received by them from SLC Student Loan Trust-I and any profit on the resale of the notes by them may be deemed to be underwriting discounts and commissions under the Securities Act. The underwriters will be identified, and any compensation received from SLC Student Loan Trust-I will be described, in the applicable prospectus supplement. Under agreements which may be entered into by SLC Student Loan Trust-I, the underwriters and agents who participate in the distribution of the notes may be entitled to indemnification by SLC Student Loan Trust-I against liabilities, including liabilities under the Securities Act of 1933, as amended, or to contribution with respect to payments which the underwriters or agents may be required to make in respect thereto. If so indicated in the prospectus supplement, SLC Student Loan Trust-I will authorize underwriters or other persons acting as SLC Student Loan Trust-I's agents to solicit offers by certain institutions to purchase the notes from SLC Student Loan Trust-I pursuant to contracts providing for payment and delivery on a future date. Institutions with which these contracts may be made include commercial and savings banks, insurance companies, pension funds, investment companies, educational and charitable institutions and others, but in all cases the institutions must be approved by SLC Student Loan Trust-I. The obligation of any purchaser under any contract will be subject to the condition that the purchaser of the notes shall not be prohibited by law from purchasing such notes. The underwriters and other agents will not have responsibility in respect of the validity or performance of these contracts. The underwriters may, from time to time, buy and sell notes, but there can be no assurance that an active secondary market will develop and there is no assurance that any market, if established, will continue. LEGAL MATTERS The validity of the notes will be passed upon by Cadwalader, Wickersham & Taft as counsel to the trust, the depositor and the seller and servicer. Other counsel, if any, passing upon legal matters for SLC Student Loan Trust-I or any placement agent or underwriter will be identified in the related prospectus supplement. RATINGS It is a condition to the issuance of the notes that notes publicly offered be rated by at least one nationally recognized statistical rating organization in one of its generic rating categories which signifies investment grade (typically, in one of the four highest rating categories). The specific ratings for each class of notes will be described in the related prospectus supplement. A securities rating addresses the likelihood of the receipt by owners of the notes of payments of principal and interest with respect to their notes from assets in the trust estate. The rating takes into consideration the characteristics of the student loans, and the structural, legal and tax aspects associated with the rated notes. A securities rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time by the assigning rating organization. Each securities rating should be evaluated independently of similar ratings on different securities. INCORPORATION OF DOCUMENTS BY REFERENCE; WHERE TO FIND MORE INFORMATION We are subject to the reporting requirements of the Securities Exchange Act of 1934 and to comply with those requirements, we will file annual, quarterly and special reports and other information with the SEC. The SEC allows us to incorporate by reference into this prospectus the information we file with them, which means that we can disclose important information to you by referring you to the reports we file with the SEC. We hereby incorporate by reference all periodic reporting documents we file with the SEC after the date of this prospectus until the termination of the offering of the notes or if later, and so long as market making transactions of Salomon Smith Barney Inc., an affiliate of The Student Loan Corporation with respect to the notes are not exempt from registration provisions of the Securities Act, the end of any period of such market making transactions. We will provide you, without charge, a copy of any of the documents incorporated by reference upon written or oral request directed to SLC Student Loan Trust-I, at 750 Washington Boulevard, 9th Floor, Stamford, CT 06901, or by phone at (203) 975-6112. You may read and copy our registration statement and reports and other information that we file with the SEC at the SEC's Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains a website at http://www.sec.gov from which our registration statement and reports are available. Our parent company maintains a web site that provides information concerning our company at http://www.ufscorp.com. GLOSSARY OF TERMS Some of the terms used in this prospectus are defined below. The indenture contains the definition of other terms used in this prospectus and reference is made to the indenture for those definitions. "Higher Education Act" shall mean the Higher Education Act of 1965, as amended or supplemented from time to time, or any successor federal act and all regulations, directives, bulletins, and guidelines promulgated from time to time thereunder. "Auction Date" means, with respect to any class of auction rate securities, the date specified in the related prospectus supplement, and thereafter, the business day immediately preceding the first day of each auction period for each respective class, other than: (a) each auction period commencing after the ownership of the applicable auction rate securities is no longer maintained in book-entry form by the securities depository; (b) each auction period commencing after and during the continuance of a payment default; or (c) each auction period commencing less than the applicable number of business days after the cure or waiver of a payment default. "Book-Entry Form" or "Book-Entry System" means a form or system under which (a) the beneficial right to principal and interest may be transferred only through a book entry, (b) physical securities in registered form are issued only to a securities depository or its nominee as registered owner, with the securities "immobilized" to the custody of the securities depository, and (c) the book entry is the record that identifies the owners of beneficial interests in that principal and interest. "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time. Each reference to a section of the Code herein shall be deemed to include the United States Treasury Regulations, including temporary and proposed regulations, relating to such section which are applicable to the notes of the use of the proceeds thereof. A reference to any specific section of the Code shall be deemed also to be a reference to the comparable provisions of any enactment which supersedes or replaces the Code thereunder from time to time. "Commercial Paper Rate (90-day)" shall mean the rate determined at the end of each calendar quarter using the daily average of that quarter's bond equivalent 3-Month Financial Commercial Paper rates. The daily bond equivalent rates are calculated from the 3-Month Financial Commercial Paper discount rates published in the Federal Reserve's H.15 report. On weekends, holidays, and any other day when no H.15 rates are available, the rate from the most recent published date is used. "Derivative Product" shall mean a written contract or agreement between SLC Student Loan Trust-I and a counterparty, which provides that SLC Student Loan Trust-I's obligations thereunder will be conditioned on the absence of (i) a failure by the counterparty to make any payment required thereunder when due and payable, or (ii) a default thereunder with respect to the financial status of the counterparty, and: (a) under which SLC Student Loan Trust-I is obligated to pay (whether on a net payment basis or otherwise) on one or more scheduled and specified derivative payment dates, SLC Student Loan Trust-I derivative payments in exchange for the counterparty' s obligation to pay (whether on a net payment basis or otherwise), or to cause to be paid, to SLC Student Loan Trust-I, reciprocal payments on one or more scheduled and specified derivative payment dates in the amounts set forth in the derivative product; (b) for which SLC Student Loan Trust-I's obligation to make derivative payments may be secured by a pledge of and lien on the trust estate on an equal and ratable basis with any class of SLC Student Loan Trust-I's outstanding notes and which derivative payments may be equal in priority with any priority classification of SLC Student Loan Trust-I's outstanding notes; and (c) under which reciprocal payments are to be made directly to the indenture trustee for deposit into the Revenue Fund. "Event of Bankruptcy" shall mean: (a) SLC Student Loan Trust-I shall have commenced a voluntary case or other proceeding seeking liquidation, reorganization, or other relief with respect to itself or its debts under any bankruptcy, insolvency, or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian, or other similar official of it or any substantial part of its property, or shall have made a general assignment for the benefit of creditors, or shall have declared a moratorium with respect to its debts or shall have failed generally to pay its debts as they become due, or shall have taken any action to authorize any of the foregoing; or (b) an involuntary case or other proceeding shall have been commenced against SLC Student Loan Trust-I seeking liquidation, reorganization, or other relief with respect to it or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian, or other similar official of it or any substantial part of its property provided such action or proceeding is not dismissed within 60 days. "Federal Reimbursement Contracts" shall mean the agreements between the guaranty agency and the Secretary of Education providing for the payment by the Secretary of Education of amounts authorized to be paid pursuant to the Higher Education Act, including (but not necessarily limited to) reimbursement of amounts paid or payable upon defaulted student loans and other student loans guaranteed or insured by the guaranty agency and interest benefit payments and special allowance payments to holders of qualifying student loans guaranteed or insured by the guaranty agency. "Funds" shall mean the funds created under Section 5.01 of the indenture and held by the indenture trustee, including the Acquisition Fund, the Revenue Fund and the Reserve Fund. "Guarantee" or "Guaranteed" shall mean, with respect to student loan, the insurance or guarantee by the guaranty agency pursuant to such guaranty agency's guarantee agreement of the maximum percentage of the principal of and accrued interest on such student loan allowed by the terms of the Higher Education Act with respect to such student loan at the time it was originated and the coverage of such student loan by the federal reimbursement contracts, providing, among other things, for reimbursement to the guaranty agency for payments made by it on defaulted student loans insured or guaranteed by the guaranty agency of at least the minimum reimbursement allowed by the Higher Education Act with respect to a particular student loan. "Guarantee Agreements" shall mean a guaranty or lender agreement between the indenture trustee and any guaranty agency, and any amendments thereto. "Guaranty Agency" shall mean any entity authorized to guarantee student loans under the Higher Education Act and with which the indenture trustee maintains a guarantee agreement. "Indenture" shall mean the indenture of trust between SLC Student Loan Trust-I and Bankers Trust Company, as indenture trustee, including all supplements and amendments thereto. "Treasury Bill Rate" shall mean the bond equivalent yield for auctions of 91-day United States Treasury Bills on the first day of each calendar week on which the United States Treasury auctions 91-day Treasury Bills, which currently is the United States Treasury's first business day of each week. [outside back cover page] $------------------ SLC STUDENT LOAN TRUST-I Issuer STUDENT LOAN ASSET-BACKED NOTES SERIES ____ ------------------------------------------------------------------ P R O S P E C T U S S U P P L E M E N T ------------------------------------------------------------------ SALOMON SMITH BARNEY UNDERWRITER --,---- YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH DIFFERENT INFORMATION. WE ARE NOT OFFERING NOTES IN ANY STATE WHERE THE OFFER IS NOT PERMITTED. WE REPRESENT THE ACCURACY OF THE INFORMATION IN THIS PROSPECTUS SUPPLEMENT AND PROSPECTUS ONLY AS OF THE DATES OF THEIR RESPECTIVE COVERS. UNTIL __________ __, ____, ALL DEALERS THAT EFFECT TRANSACTIONS IN THE NOTES, WHETHER OR NOT PARTICIPATING IN THIS OFFERING, MAY BE REQUIRED TO DELIVER A PROSPECTUS SUPPLEMENT AND PROSPECTUS. THIS IS IN ADDITION TO THE DEALERS' OBLIGATION TO DELIVER A PROSPECTUS SUPPLEMENT AND PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS. [end of outside back cover page] PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. The following table sets forth the expenses to be borne by the registrant, other than the underwriting discounts and commissions, in connection with the issuance and distribution of the Offered Notes hereunder. SEC registration fee.................... $[239] *Accounting fees and expenses........... *Legal fees and expenses................ *Printing costs......................... *Blue Sky fees and expenses............. *Trustee's fees......................... *Rating Agency fees..................... *Miscellaneous.......................... -------------- Total............................ $[--------] - ------------ * Estimates based on the offering of a single Series of Offered Notes in the aggregate principal amount of $[____]. ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Article IV of the depositor's charter provides for the indemnification of directors or officers, in accordance with the by-laws, to the fullest extent permitted by the General Corporation Law of the State of Delaware. Article X of the by-laws of the depositor provides that the depositor shall indemnify and hold harmless, to the fullest extent permitted by law, any person made or threatened to be made a party to any legal action by reason of the fact that such person is or was a director, officer, employee or other corporate agent of the depositor or any subsidiary or constituent corporation or served any other enterprise at the request of the depositor against expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action. The General Corporation Law of the State of Delaware provides for the indemnification of directors and officers under certain conditions. ITEM 16. EXHIBITS. The following is a complete list of exhibits filed as part of the Registration Statement. Exhibit numbers correspond to the numbers in the Exhibit Table of Item 601 of Regulation S-K.
Exhibit No. Description 1.1 -- Form of Underwriting Agreement* 3.1 -- Articles of Incorporation of SLC Student Loan Receivables I, Inc. 3.2 -- By-Laws of SLC Student Loan Receivables I, Inc. 4.1 -- Form of Indenture 4.2 -- Eligible Lender Trust Agreement (Issuer)* 4.3 -- Eligible Lender Trust Agreement (Depositor)* 4.4 -- Delaware Statutory Business Trust Agreement 5.1 -- Opinion of Cadwalader, Wickersham & Taft with respect to legality* 8.1 -- Opinion of Cadwalader, Wickersham & Taft with respect to tax matters* 23.1 -- Consent of Cadwalader, Wickersham & Taft (included as part of Exhibit 5.1)* 23.2 -- Consent of Cadwalader, Wickersham & Taft (included as part of Exhibit 8.1)* 25.1 -- Statement of Eligibility of Bankers Trust Company, Trustee on Form T-1 99.1 -- Form of Loan Sale Agreement* 99.2 -- Form of Servicing Agreement* 99.3 -- Form of Sub-Servicing Agreement* 99.4 -- Form of Administration Agreement* 99.5 -- Form of Custody Agreement* 99.6 -- Form of Auction Agent Agreement* 99.7 -- Form of Broker Dealer Agreement*
* To be filed by amendment. II-1 ITEM 17. UNDERTAKINGS. The undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to the Registration Statement: (i) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement. (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. The undersigned Registrant hereby undertakes that for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions in Item 15, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. II-2 The undersigned Registrant hereby undertakes that: (1) For purposes of determining any liability under the Securities Act or 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(l) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective. (2) For the purpose of determining any liability under the Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering hereof. The undersigned Registrant hereby undertakes to file an application for the purpose of determining the eligibility of the trustee to act under subsection (a) of Section 310 of the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), in accordance with the rules and regulations prescribed by the Commission under Section 305 (b)(2) of the Trust Indenture Act. II-3 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, each Co-Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3, reasonably believes that the security rating requirement contained in Transaction Requirement B.5. of Form S-3 will be met by the time of the sale of the securities registered hereunder and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Stamford, State of Connecticut, on December 26, 2001. SLC STUDENT LOAN RECEIVABLES I, INC., as depositor of SLC Student Loan Trust-I and Co-Registrant on behalf of SLC Student Loan Trust-I as Co-Registrant By: /s/ Yiannis Zographakis ------------------------------------- Yiannis Zographakis Chief Executive Officer and Director Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated. POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Yiannis Zographakis and Steven J. Gorey, or any one of them, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments to the Registration Statement, including post-effective amendments, and registration statements filed pursuant to Rule 462 under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, and does hereby grant unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed on December 26, 2001 by the following persons in the capacities indicated.
SIGNATURE TITLE DATE --------- ----- ---- /s/ Yiannis Zographakis Chief Executive Officer and Director December 26, 2001 - -------------------------------- (Principal Executive Officer) Name: Yiannis Zographakis /s/ Steven J. Gorey Chief Financial Officer and Director December 26, 2001 - -------------------------------- (Principal Financial and Name: Steven J. Gorey Accounting Officer) /s/ Catherine Birch Director December 26, 2001 - -------------------------------- Name: Catherine Birch Director December __, 2001 - -------------------------------- Name: Director December __, 2001 - -------------------------------- Name:
II-4 EXHIBIT INDEX
Exhibit No. Description 1.1 -- Form of Underwriting Agreement* 3.1 -- Articles of Incorporation of SLC Student Loan Receivables I, Inc. 3.2 -- By-Laws of SLC Student Loan Receivables I, Inc. 4.1 -- Form of Indenture 4.2 -- Eligible Lender Trust Agreement (Issuer)* 4.3 -- Eligible Lender Trust Agreement (Depositor)* 4.4 -- Delaware Statutory Business Trust Agreement 5.1 -- Opinion of Cadwalader, Wickersham & Taft with respect to legality* 8.1 -- Opinion of Cadwalader, Wickersham & Taft with respect to tax matters* 23.1 -- Consent of Cadwalader, Wickersham & Taft (included as part of Exhibit 5.1)* 23.2 -- Consent of Cadwalader, Wickersham & Taft (included as part of Exhibit 8.1)* 25.1 -- Statement of Eligibility of Bankers Trust Company, Trustee on Form T-1 99.1 -- Form of Loan Sale Agreement* 99.2 -- Form of Servicing Agreement* 99.3 -- Form of Sub-Servicing Agreement* 99.4 -- Form of Administration Agreement* 99.5 -- Form of Custody Agreement* 99.6 -- Form of Auction Agent Agreement* 99.7 -- Form of Broker Dealer Agreement*
* To be filed by amendment. II-5 EX-3.1 3 st619583v3_ex3-1.txt ARTICLES OF INCORPORATION EXHIBIT 3.1 ARTICLES OF INCORPORATION OF SLC STUDENT LOAN RECEIVABLES I, INC. ARTICLE I The name of the Corporation is SLC Student Loan Receivables I, Inc. (the "Corporation"). ARTICLE II A. The purposes for which the Corporation is organized are limited solely to: (a) purchasing or otherwise acquiring from time to time student loans originated or acquired by The Student Loan Corporation, a Delaware corporation ("SLC") (the "Student Loans"), transferring such Student Loans to one or more trusts established by the Corporation to issue securities backed by such Student Loans and filings one or more registration statements with the Securities and Exchange Commission with respect to the public issuance of such securities, (b) acquiring equity interests in the trusts to which the Corporation transfers Student Loans and (c) transacting any and all lawful business for which a corporation may be organized under the laws of the State of Delaware that is incident, reasonable and appropriate to accomplish the foregoing. B. Notwithstanding any other provision in these Articles of Organization (these "Articles") and any provision of law that otherwise so empowers the Corporation: 1. The Corporation shall not do any of the following, without the affirmative vote of 100% of the members of its Board of Directors, which Board of Directors is required to consider the interests of creditors of the Corporation when conducting such vote: (a) file or consent to the filing of any bankruptcy, insolvency or reorganization case or proceeding; institute any proceedings under any applicable insolvency law or otherwise seek relief under any laws relating to the relief from debts or the protection of debtors generally; (b) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Corporation or a substantial portion of its property; (c) make any assignment for the benefit of the creditors of the Corporation; and (d) take any action in furtherance of the foregoing subparagraphs (a) through (c); 2. The Corporation shall not do any of the following: (a) dissolve, liquidate, consolidate, merge or sell all or substantially all of the assets of the Corporation; (b) engage in any business activity unrelated to the acquisition, transfer and securitization of the Student Loans; (c) own any assets other than those related to, or derived from, the Student Loans; (d) engage in transactions with affiliates except on a commercially reasonable basis; (e) take any action that is reasonably likely to cause the Corporation to become insolvent; or (f) incur any indebtedness other than ordinary operating expenses incurred in the ordinary course of the Corporation's business. C. The Corporation's Board of Directors shall at all times on or after the date of its first acquisition of the Student Loans have at least two members each of whom is an "Independent Director." Independent Director shall mean, when used with respect to any Person (as hereinafter defined and including, without limitation, any relative or spouse of such Person, or any relative of such spouse who has the same home as such Person) who: (i) is in fact independent; and (ii) is not at the time of initial appointment and has not been at any time during the preceding five (5) years and will not be while serving: (a) a stockholder, officer, director (other than as the Independent Director), employee or partner, attorney or counsel of the Corporation, SLC or any affiliate of either of them, (b) a creditor, customer, supplier or other person who derives any of its purchases or revenues from its activities (other than in payment for its role as Independent Director or costs related thereto) with the Corporation, SLC or any affiliate of either of them, (c) a person or other entity controlling or under common control with any such stockholder, partner, creditor, customer, supplier or other person (as used herein, the term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of management, policies or activities of a person or entity, whether through ownership of voting securities, by contract or otherwise), or -2- (d) a member of the immediate family of any such stockholder, officer, employee, partner, creditor, customer, supplier or other person. For the purposes of the definition of Independent Director, "Person" shall mean any individual, corporation, partnership, joint venture, estate, trust, unincorporated association, any federal, state, county or municipal government or any bureau, department or agency thereof and any fiduciary acting in such capacity on behalf of the foregoing. In the event of the death, incapacity, resignation or removal of an Independent Director, the Corporation's Board of Directors shall promptly appoint a replacement Independent Director. D. Notwithstanding any other provision in these Articles and any provision of law that otherwise so empowers the Corporation, the Corporation shall at all times: (a) maintain books and records separate from any other person or entity; (b) maintain its bank accounts separate from any other person or entity; (c) hold all of its assets in its own name and not commingle its assets with those of any other person or entity; (d) conduct its own business in its own name; (e) maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other person or entity and shall not have its assets listed on the financial statement of any other entity; (f) pay its own liabilities and expenses only out of its own funds; (g) observe all corporate and other organizational formalities; (h) maintain an arm's length relationship with its affiliates and enter into transactions with affiliates only on a commercially reasonable basis; (i) pay the salaries of its own employees, if any, from its own funds; (j) maintain a sufficient number of employees, if any, in light of its contemplated business operations; (k) not guarantee or become obligated for the debts of any other entity or person; (l) not hold out its credit as being available to satisfy the obligations of any other person or entity; -3- (m) not acquire the obligations or securities of its affiliates, shareholders or partners; (n) not make loans to any other person or entity or buy or hold evidence of indebtedness issued by any other person or entity (other than cash, investment-grade securities and Student Loans); (o) allocate fairly and reasonably any overhead expenses that are shared with an affiliate, including paying for office space and services performed by any employee of an affiliate; (p) use stationery, invoices and checks bearing its own name; (q) not pledge its assets for the benefit of any other person or entity; (r) hold itself out as a separate entity; (s) promptly correct any known misunderstanding regarding its separate identity; (t) not identify itself as a division of any other person or entity; (u) maintain adequate capital in light of its contemplated business operations; and (v) not form, hold or acquire any subsidiaries. ARTICLE III The total number of shares of stock which the Corporation is authorized to issue is 1,000 shares of Common Stock, par value $.01 per share, with an authorized capital of ten dollars ($10.00). The initial registered office shall be located at Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801, and the initial registered agent shall be The Corporation Trust Company, who is a resident of New Castle County, Delaware, and whose business address is the same as the address of the initial registered office. ARTICLE IV No director of the Corporation shall be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director except for liability to the extent provided by applicable law (i) for any breach of the director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) pursuant to Section 174 of the Delaware General Corporation Law, or (iv) for any transaction from which such director derived an improper personal benefit. No repeal or modification of this Article shall adversely affect any right or protection of a director of the Corporation in respect of any act or omission occurring prior to the time of such repeal or modification. -4- ARTICLE V The number of Directors constituting the Board of Directors shall be established by the Corporation's Bylaws, or in the absence of a bylaw establishing the number of Directors, the number of Directors shall be three until such time as the Corporation is required to have Independent Directors pursuant to Article II paragraph C. hereof, and thereafter five, including at least two Independent Directors. IN WITNESS WHEREOF, the undersigned has signed this Certificate of Incorporation on December 20, 2001 By: /s/ Anthony DeRose -------------------------------- Name: Anthony DeRose Title: Sole Incorporator 100 Maiden Lane New York, New York 10038 -5- EX-3.2 4 st621079v2_ex3-2.txt BY-LAWS EXHIBIT 3.2 BY-LAWS OF SLC STUDENT LOAN RECEIVABLES I, INC. ARTICLE I OFFICES Section 1.1. REGISTERED OFFICE. The registered office of the Corporation in the State of Delaware shall be located at the principal place of business in such state of the corporation or individual acting as the Corporation's registered agent in Delaware. Section 1.2. OTHER OFFICES. In addition to its registered office in the State of Delaware, the Corporation may have an office or offices in such other places as the Board of Directors may from time to time designate or the business of the Corporation may require. ARTICLE II MEETING OF STOCKHOLDERS Section 2.1. TIME AND PLACE. All meetings of the stockholders of the Corporation shall be held at such time and place, either within or without the State of Delaware, as may from time to time be determined by the Board of Directors and as shall be stated in the notice of the meeting or in a duly executed waiver of notice thereof. The Board of Directors may in its sole discretion, determine that a meeting of the stockholders shall not be held at any place, but may instead be held solely by means of remote communication. Section 2.2. ANNUAL MEETING. The annual meeting of stockholders of the Corporation shall be held at such date, time and place, either within or without the State of Delaware, as shall be determined by the Board of Directors and stated in the notice of meeting. Section 2.3. SPECIAL MEETINGS OF STOCKHOLDERS. Special meetings of stockholders for any purpose or purposes if not otherwise prescribed by statute or by the Certificate of Incorporation, may be called by the Board of Directors, the President, or the Secretary and shall be called by the President or Secretary at the request of stockholders owning a majority of the shares of capital stock of the Corporation issued and outstanding and entitled to vote at a meeting of stockholders. Such request shall state the purpose or purposes of the proposed meeting. The time of any such special meeting shall be fixed by the officer calling the meeting and shall be stated in the notice of such meeting, which notice shall specify the purpose or purposes thereof. Business transacted at any special meeting shall be confined to the purposes stated in the notice of meeting and matters germane thereto. Section 2.4. NOTICE OF MEETINGS. Notice of the time and place, if any, of every annual or special meeting of the stockholders, the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such meeting, and in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be given to each stockholder entitled to notice of or to vote at such meeting, in the manner prescribed by Section 6.1 of these By-Laws. Unless otherwise required by law, such notice shall be given not less than ten nor more than sixty days before the date of the meeting. Section 2.5. QUORUM AND ADJOURNMENT OF MEETINGS. The holders of a majority of the shares of capital stock issued and outstanding and entitled to vote at any meeting of stockholders, present in person, or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business, except as otherwise provided by law or by the Certificate of Incorporation. If a majority shall not be present in person or represented by proxy at any meeting of the stockholders at which action is to be taken by the stockholders, the stockholders entitled to vote at such meeting, present in person or represented by proxy, shall have power to adjourn the meeting from time to time without notice (other than announcement at the meeting at which the adjournment is taken, of the time, place, if any, thereof, and the means of remote communications, if any, by which stockholders and proxy holders may be -2- deemed to be present in person and vote at such adjourned meeting), until holders of the requisite number of shares of stock entitled to vote shall be present or represented by proxy. At such adjourned meeting at which such holders of the requisite number of shares of capital stock shall be present or represented by proxy, any business may be transacted which might have been transacted at the meeting as originally called. If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. Section 2.6. VOTE REQUIRED. At any meeting of stockholders, directors shall be elected by a plurality of votes, and all other matters shall be decided by a majority of votes, cast by the stockholders present in person or represented by proxy and entitled to vote, unless the matter is one for which, by express provisions of statute, of the Certificate of Incorporation or of these By-Laws, a different vote is required, in which case such express provision shall govern and control the determination of such matter. Section 2.7. VOTING. At any meeting of the stockholders, each stockholder having the right to vote shall be entitled to vote in person or by proxy. Subject to the provisions of Section 211(a)(2) of the General Corporation Law, the Board of Directors, in its sole discretion, and subject to such guidelines and procedures as it may deem appropriate, may permit stockholders and proxy holders not physically present at a meeting of stockholders, by means of remote communication, to participate in the meeting of stockholders and be deemed present in person and permitted to vote at the meeting of stockholders whether such meeting is to be held at a designated place or solely by means of remote communication. To determine the stockholders entitled to notice of or to vote at any meeting of the stockholders or any adjournment thereof, the Board of Directors may fix, in advance, a record date which shall be not more than sixty days nor less than ten days before the date of such meeting. Except as otherwise provided by the Certificate of Incorporation or by statute, each stockholder of record shall be entitled to one vote for each outstanding share of capital stock standing in his or her name on the books of the Corporation as of the record date. -3- Section 2.8. LIST OF STOCKHOLDERS. A complete list of the stockholders entitled to vote at any meeting of stockholders arranged in alphabetical order with the address (which need not include any electronic mail address or other electronic contact information) of each and the number of shares held by each, shall be prepared by the Secretary. Such list shall be open to the examination of any stockholder for any purpose germane to the meeting for a period of at least ten days prior to the meeting: (a) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting, or (b) during ordinary business hours, at the principal place of business of the Corporation. In the event that the Corporation determines to make the list available on an electronic network, the Corporation may take reasonable steps to ensure that such information is available only to stockholders of the Corporation. If the meeting is to be held at a place, then the list shall be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. If the meeting is to be held solely by means of remote communication, then the list shall also be open to the examination of any stockholder during the whole time of the meeting on a reasonably accessible electronic network, and the information required to access such list shall be provided with the notice of the meeting. Section 2.9. PROXIES. Each proxy shall be in writing executed by the stockholder giving the proxy or his or her duly authorized attorney. No proxy shall be valid after the expiration of three years from its date, unless a longer period is provided for in the proxy. Unless and until voted, every proxy shall be revocable at the pleasure of the person who executed it or his or her legal representatives or assigns, except in those cases where an irrevocable proxy permitted by statute has been given. -4- Section 2.10. CONSENTS. The provision of these By-Laws covering notices and meetings to the contrary notwithstanding, any action required or permitted to be taken at any meeting of stockholders may be taken without a meeting, without prior notice and without a vote, if a consent1 in writing setting forth the action so taken shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would have been necessary to authorize or take such action at a meeting at which all shares of stock entitled to vote thereon were present and voted. Where corporate action is taken in such manner by less than unanimous written consent, prompt written notice of the taking of such action shall be given to all stockholders who have not consented in writing thereto and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting. ARTICLE III DIRECTORS Section 3.1. BOARD OF DIRECTORS. The business and affairs of the Corporation shall be managed by a Board of Directors. The Board of Directors may exercise all such powers of the Corporation and do all such lawful acts and things on its behalf as are not by statute or by the Certificate of Incorporation or by these By-Laws directed or required to be exercised or done by the stockholders. Section 3.2. NUMBER; ELECTION AND TENURE. The number of directors shall be fixed initially by the incorporator of the Corporation and thereafter such number may be increased from time to time by the stockholders or by the Board of Directors or may be decreased by the stockholders; provided that no decrease in -5- the number of directors shall shorten the term of any incumbent director. Except as provided by law or these By-Laws, directors shall be elected each year at the annual meeting of stockholders. Each director shall hold office until the annual meeting of stockholders next succeeding his or her election until his or her successor is elected and has qualified or until his or her earlier resignation or removal. Section 3.3. RESIGNATION AND REMOVAL. A director may resign at any time by giving notice in writing or by electronic transmission (as such term is defined in Section 232(c) of the General Corporation Law) to the Board of Directors or to the President of the Corporation. Such resignation shall take effect upon receipt thereof by the Board of Directors or by the President, unless otherwise specified therein. Any one or more of the directors may be removed, either with or without cause, at any time by the affirmative vote of a majority of the stockholders at any special meeting of the stockholders called for such purpose. Section 3.4. VACANCIES. A vacancy occurring for any reason and newly created directorships resulting from an increase in the authorized number of directors may be filled by the vote of a majority of the directors then in office, although less than a quorum, or by the sole remaining director, or by the stockholders. Section 3.5. COMPENSATION. Each director shall receive for services rendered as a director of the Corporation such compensation as may be fixed by the Board of Directors. Nothing herein contained shall be construed to preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. -6- ARTICLE IV MEETINGS OF THE BOARD Section 4.1. TIME AND PLACE. Meetings of the Board of Directors shall be held at such places, within or without the State of Delaware, and within or without the United States of America, as shall be determined in accordance with these By-Laws. Section 4.2. ANNUAL MEETING. Immediately after and at the place of the annual meeting of the stockholders, or at such other place as the Board of Directors may designate, a meeting of the newly elected Board of Directors for the purpose of organization and the election of officers and otherwise may be held. Such meeting may be held without notice. Section 4.3. REGULAR MEETINGS. Regular meetings of the Board of Directors may be held without notice, at such time and place as shall, from time to time, be determined by the Board of Directors. Section 4.4. SPECIAL MEETINGS. Special meetings of the Board of Directors may be held at any time and place as shall be determined by resolution of the Board of Directors or upon the call of the President, the Secretary, or any member of the Board of Directors on two days' notice to each director by mail or on one day's notice personally or by a form of electronic transmission. Meetings of the Board of Directors may be held at any time without notice if all the directors are present, or if those not present waive notice of the meeting in writing or by electronic transmission, either before or after the meeting. Section 4.5. QUORUM AND VOTING. A majority of the entire Board of Directors shall constitute a quorum at any meeting of the Board of Directors and the act of a majority of the directors shall be the act of the Board of Directors, except as may otherwise be specifically provided by law, the Certificate of Incorporation or by these By-Laws. If at any meeting of the Board of Directors there shall be less than a quorum present, the director or directors present at the meeting may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall have been obtained. -7- Section 4.6. CONSENTS. Any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting if all members of the Board of Directors consent to such action in writing, or by electronic transmission and such writing or writings or electronic transmission or transmissions are filed with the minutes of the proceedings of the Board of Directors. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form. Section 4.7. TELEPHONIC MEETINGS OF DIRECTORS. The Board of Directors may participate in a meeting by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other. Participation by such means shall constitute presence in person at such meeting. ARTICLE V COMMITTEES OF THE BOARD Section 5.1. DESIGNATION AND POWERS. The Board of Directors may in its discretion designate one or more committees. Each committee shall consist of one or more of the directors of the Corporation. Such committee or committees shall have duties and powers not inconsistent with the laws of the State of Delaware, the Certificate of Incorporation, these By-Laws, and the respective resolution or resolutions of the Board of Directors. ARTICLE VI NOTICES Section 6.1. DELIVERY OF NOTICES. Notices to directors and stockholders shall be in writing and may be delivered personally, by mail or by a form of electronic transmission. Notice by mail shall be deemed to be given at the time when deposited in the United States mail, postage prepaid, and -8- addressed to directors or stockholders at their respective addresses appearing on the books of the Corporation, unless any such director or stockholder shall have filed with the Secretary of the Corporation a written request that notices intended for him or her be mailed or delivered to some other address, in which case the notice shall be mailed to or delivered at the address designated in such request. Notice to stockholders pursuant to a form of electronic transmission shall be effective if given by a form of electronic transmission consented to by the stockholder to whom notice is given. Notice given to stockholders pursuant to a form of electronic transmission shall be deemed given: (a) if by facsimile telecommunication, when directed to a number at which the stockholder has consented to receive notice; (b) if by electronic mail, when directed to an electronic mail address at which the stockholder has consented to receive notice; (c) if by a posting on an electronic network together with separate notice to the stockholder of such specific posting, upon the later of such posting and the giving of such separate notice; and (d) if by any other form of electronic transmission, when directed to the stockholder. Any consent of a stockholder to receive notice pursuant to a form of electronic transmission shall be revocable as provided in Section 232(a) of the General Corporation Law. Section 6.2. WAIVER OF NOTICE. Whenever notice is required to be given by statute, the Certificate of Incorporation or these By-Laws, a waiver thereof in writing, signed by the person or persons entitled to such notice, or a waiver by electronic transmission by the person entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice. Attendance of a person at a meeting of stockholders, directors or any committee of directors, as the case may be, shall constitute a waiver of notice of such meeting, except where the person is attending for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business -9- because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of stockholders, directors or committee of directors need be specified in any written waiver of notice or any waiver by electronic transmission. ARTICLE VII OFFICERS Section 7.1. EXECUTIVE OFFICERS. At the annual meeting of directors the Board of Directors shall elect a Chairman of the Board, President, Secretary and Treasurer and may elect one or more Vice Presidents, Assistant Secretaries or Assistant Treasurers and such other officers as the Board of Directors may from time to time designate or the business of the Corporation may require. Except for the Chairman of the Board, no executive officer need be a member of the Board. Any number of offices may be held by the same person, except that the office of Secretary may not be held by the Chairman of the Board or the President. Section 7.2. OTHER OFFICERS AND AGENTS. The Board of Directors may also elect such other officers and agents as the Board of Directors may at any time or from time to time determine to be advisable, such officers and such agents to serve for such terms and to exercise such powers and perform such duties as shall be specified at any time or from time to time by the Board of Directors. Section 7.3. TENURE; RESIGNATION; REMOVAL; VACANCIES. Each officer of the Corporation shall hold office until his or her successor is elected and qualified, or until his or her earlier resignation or removal; provided, that if the term of office of any officer elected or appointed pursuant to Section 7.2 of these By-Laws shall have been fixed by the Board of Directors, he or she shall cease to hold such office no later than the date of expiration of such term regardless of whether any other person shall have been elected or appointed to succeed him or her. Any officer elected by the Board of Directors may be -10- removed at any time, with or without cause, by the Board of Directors; provided, that any such removal shall be without prejudice to the rights, if any, of the officer so employed under any employment contract or other agreement with the Corporation. An officer may resign at any time upon written notice to the Board of Directors. If the office of any officer becomes vacant by reason of death, resignation, retirement, disqualification, removal from office or otherwise, the Board of Directors may choose a successor or successors to hold office for such term as may be specified by the Board of Directors. Section 7.4. COMPENSATION. Except as otherwise provided by these By-Laws, the salaries of all officers and agents of the Corporation appointed by the Board of Directors shall be fixed by the Board of Directors. Section 7.5. AUTHORITY AND DUTIES. All officers as between themselves and the Corporation, shall have such authority and perform such duties in the management of the Corporation as may be provided in these By-Laws. In addition to the powers and duties hereinafter specifically prescribed for the respective officers, the Board of Directors may from time to time impose or confer upon any of the officers such additional duties and powers as the Board of Directors may see fit, and the Board of Directors may from time to time impose or confer any or all of the duties and powers hereinafter specifically prescribed for any officer upon any other officer or officers. Section 7.6. CHAIRMAN OF THE BOARD. The Chairman of the Board of Directors, who shall be a director, shall preside at all meetings of the stockholders and at all meetings of the Board of Directors. As director, he or she shall perform such other duties as may be assigned from time to time by the Board of Directors. -11- Section 7.7. PRESIDENT. The President shall be the chief executive officer of the Corporation. He or she shall perform such duties as may be assigned to him or her by the Board of Directors, and in the event of disability or absence of the Chairman of the Board, perform the duties of the Chairman of the Board, including presiding at meetings of stockholders and directors. He or she shall from time to time report to the Board of Directors all matters within his or her knowledge which the interest of the Corporation may require to be brought to their notice, and shall also have such other powers and perform such other duties as may be specifically assigned to him or her from time to time by the Board of Directors. The President shall see that all resolutions and orders of the Board of Directors are carried into effect, and in connection with the foregoing, shall be authorized to delegate to the Vice President and the other officers such of his or her powers and such of his or her duties as he or she may deem to be advisable. Section 7.8. THE VICE PRESIDENT(S). The Vice President, or if there be more than one, the Vice Presidents, shall perform such duties as may be assigned to them from time to time by the Board of Directors or as may be designated by the President. In case of the absence or disability of the President the duties of the office shall, if the Board of Directors or the President has so authorized, be performed by the Vice President, or if there be more than one Vice President, by such Vice President as the Board of Directors or President shall designate. Section 7.9. THE TREASURER. The Treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all monies and other valuable effects in the name and to the credit of the Corporation, in such depositories as may be designated by the Board of Directors or by any officer of the Corporation authorized by the Board of Directors to make such designation. The Treasurer shall exercise such powers and perform such duties as generally pertain or are necessarily incident to his or her office and shall perform such other duties as may be specifically assigned to him or her from time to time by the Board of Directors or by the President or any Vice President. -12- Section 7.10. THE SECRETARY. The Secretary shall attend all meetings of the Board of Directors and all meetings of the stockholders and record all votes and the minutes of all proceedings in a book to be kept for that purpose; and shall perform like duties for any committee when required. He or she shall give, or cause to be given, notice of all meetings of the stockholders and, when necessary, of the Board of Directors. The Secretary shall exercise such powers and perform such duties as generally pertain or are necessarily incident to his or her office and he or she shall perform such other duties as may be assigned to him or her from time to time by the Board of Directors, the President or by any Vice President. ARTICLE VIII CERTIFICATES OF STOCK Section 8.1. FORM AND SIGNATURE. The certificates of stock of the Corporation shall be in such form or forms not inconsistent with the Certificate of Incorporation as the Board of Directors shall approve. They shall be numbered, the certificates for the shares of stock of each class to be numbered consecutively, and shall be entered in the books of the Corporation as they are issued. They shall exhibit the holder's name and number of shares and shall be signed by the Chairman of the Board, the President or a Vice President and the Treasurer (or any Assistant Treasurer) or the Secretary (or any Assistant Secretary); provided, however, that where any such certificate is signed by a transfer agent or an assistant transfer agent, or by a transfer clerk acting on behalf of the Corporation, and registered by a registrar, the signature of any such President, Vice President, Treasurer, Assistant Treasurer, Secretary or Assistant Secretary, may be a facsimile. In case any officer or officers who -13- shall have signed, or whose facsimile signature or signatures shall have been used on any such certificate or certificates, shall cease to be such officer or officers of the Corporation, whether because of death, resignation, removal or otherwise, before such certificate or certificates shall have been delivered by the Corporation, such certificate or certificates may nevertheless be issued and delivered as though the person or persons who signed such certificate or certificates, or whose facsimile signature or signatures shall have been used thereon, had not ceased to be such officer or officers of the Corporation. Section 8.2. LOST OR DESTROYED CERTIFICATES. The Board of Directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the Corporation alleged to have been lost or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate or stock to be lost or destroyed. When authorizing such issue of a new certificate or certificates, the Board of Directors may in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost or destroyed certificate or certificates, or his or her legal representatives, to advertise the same in such manner as it shall require, and to give a bond in such sum as the Board of Directors may direct, indemnifying the Corporation, any transfer agent and any registrar against any claim that may be made against them or any of them with respect to the certificate alleged to have been lost or destroyed. Section 8.3. REGISTRATION OF TRANSFER. Upon surrender to the Corporation of a certificate for shares, duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, the Corporation shall issue a new certificate to the person entitled thereto, cancel the old certificate, and record the transaction on its books. -14- ARTICLE IX GENERAL PROVISIONS Section 9.1. RECORD DATE. In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or entitled to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be more than sixty nor less than ten days before the date of such meeting, nor more than sixty days prior to any other action. Section 9.2. REGISTERED STOCKHOLDERS. The Corporation shall be entitled to treat the holder of record of any share or shares of stock as the holder in fact thereof and accordingly shall not be bound to recognize any equitable or other claim to or interest in such share on the part of any other person, whether or not it shall have express or other notice thereof, save as expressly provided by the laws of the State of Delaware. Section 9.3. DIVIDENDS. Dividends upon the capital stock of the Corporation shall in the discretion of the Board of Directors from time to time be declared by the Board of Directors out of funds legally available therefor after setting aside of proper reserves. Section 9.4. CHECKS AND NOTES. All checks and drafts on the bank accounts of the Corporation, all bills of exchange and promissory notes of the Corporation, and all acceptances, obligations and other instruments for the payment of money drawn, signed or accepted by the Corporation, shall be signed or accepted, as the case may be, by such officer or officers, agent or agents as shall be thereunto authorized from time to time by the Board of Directors or by officers of the Corporation designated by the Board of Directors to make such authorization. -15- Section 9.5. FISCAL YEAR. The fiscal year of the Corporation shall be fixed by the Board of Directors. Section 9.6. VOTING OF SECURITIES OF OTHER CORPORATIONS. In the event that the Corporation shall at any time own and have power to vote any securities (including but not limited to shares of stock) of any other issuer, such securities shall be voted by such person or persons, to such extent and in such manner, as may be determined by the Board of Directors. Section 9.7. TRANSFER AGENT. The Board of Directors may make such rules and regulations as it may deem expedient concerning the issue, transfer and registration of stock. It may appoint one or more transfer agents and one or more registrars and may require all stock certificates to bear the signature of either or both. Section 9.8. CORPORATE SEAL. The corporate seal shall have inscribed thereon the name of the Corporation and the words "Corporate Seal, Delaware". ARTICLE X INDEMNIFICATION Section 10.1. INDEMNIFICATION. (A) ACTIONS, SUITS OR PROCEEDINGS OTHER THAN BY OR IN THE RIGHT OF THE CORPORATION. The Corporation shall indemnify any current or former director or officer of the Corporation and may, at the discretion of the Board of Directors, indemnify any current or former employee or agent of the Corporation who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation) by reason of the fact that such person is or was a director, -16- officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent (including trustee) of another corporation, partnership, joint venture, trust or other enterprise (including employee benefit plans) (funds paid or required to be paid to any person as a result of the provisions of this Section 10.1 shall be returned to the Corporation or reduced, as the case may be, to the extent that such person receives funds pursuant to an indemnification from any such other corporation, partnership, joint venture, trust or enterprise) to the fullest extent permissible under Delaware law, as then in effect, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe that his or her conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person seeking indemnification did not act in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe that his or her conduct was unlawful. (B) ACTIONS OR SUITS BY OR IN THE RIGHT OF THE CORPORATION. The Corporation shall indemnify any current or former director or officer of the Corporation and may, at the discretion of the Board of Directors, indemnify any current or former employee or agent of the Corporation who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit, by or in the right of the Corporation to procure a judgment in its -17- favor by reason of the fact that such person is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent (including trustee) of another corporation, partnership, joint venture, trust or other enterprise (including employee benefit plans) (funds paid or required to be paid to any person as a result of the provisions of this Section 10.1 shall be returned to the Corporation or reduced, as the case may be, to the extent that such person receives funds pursuant to an indemnification from any such other corporation, partnership, joint venture, trust or enterprise) to the fullest extent permitted under Delaware law, as then in effect, against expenses (including attorneys' fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit, if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Corporation, except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery of the State of Delaware or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper. (C) INDEMNIFICATION FOR EXPENSES OF SUCCESSFUL PARTY. To the extent that a director, officer, employee or agent of the Corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in paragraph (a) or (b) of this Section 10.1, or in defense of any claim, issue or matter therein, such person shall be indemnified by the Corporation against expenses (including attorneys' fees) actually and reasonably incurred by him or her in connection therewith. -18- (D) DETERMINATION OF RIGHT TO INDEMNIFICATION. Any indemnification under paragraph (a) or (b) of this Section 10.1 (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the circumstances because such person has met the applicable standard of conduct set forth in paragraphs (a) and (b) of this Section 10.1. Such determination shall be made (1) by the Board of Directors by a majority vote of the directors who are not parties to such action, suit or proceeding, even though less than a quorum or (2) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion, or (3) by the holders of a majority of the shares of capital stock of the Corporation entitled to vote thereon. (E) ADVANCEMENT OF EXPENSES. Expenses (including attorneys' fees) incurred by an officer or director in defending any civil, criminal, administrative or investigative action, suit or proceeding shall be paid by the Corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the Corporation as authorized in this Section 10.1. Such expenses (including attorneys' fees) incurred by other employees and agents may be so paid upon such terms and conditions, if any, as the Board of Directors deems appropriate. (F) OTHER RIGHTS. The indemnification and advancement of expenses provided by, or granted pursuant to, the other paragraphs of this Section 10.1 shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any By-Law, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in an official capacity and as to action in another capacity while holding such office. -19- (G) INSURANCE. By action of the Board of Directors, notwithstanding an interest of the directors in the action, the Corporation may purchase and maintain insurance, in such amounts as the Board of Directors deems appropriate, on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent (including trustee) of another corporation, partnership, joint venture, trust or other enterprise (including employee benefit plans), against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person's status as such, whether or not the Corporation shall have the power to indemnify such person against such liability under the provisions of this Section 10.l. (H) CONTINUATION OF RIGHTS TO INDEMNIFICATION. The indemnification and advancement of expenses provided by, or granted pursuant to, this Section 10.1 shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person. Section 10.2. PROTECTION OF RIGHTS EXISTING AT TIME OF REPEAL OR MODIFICATION. Any repeal or modification of this Section 10.1 shall not adversely affect any right or protection of an indemnified person existing at the time of such repeal or modification. -20- ARTICLE XI AMENDMENTS Section 11.1. BY THE STOCKHOLDERS. These By-Laws may be altered, amended or repealed in whole or in part, and new By-Laws may be adopted, by the affirmative vote of the holders of a majority of the shares of capital stock issued and outstanding and entitled to vote at any annual or special meeting of the stockholders, if notice thereof shall be contained in the notice of the meeting. Section 11.2. BY THE BOARD OF DIRECTORS. These By-Laws may be altered, amended or repealed by the Board of Directors at any regular or special meeting of the Board of Directors if notice thereof shall be contained in the notice of the meeting. -21- EX-4.1 5 st621344v3.txt INDENTURE OF TRUST EXHIBIT 4.1 ============================================================================== INDENTURE OF TRUST by and between SLC STUDENT LOAN TRUST-I and BANKERS TRUST COMPANY as Indenture Trustee Dated as of _____, 200_ ============================================================================== SLC STUDENT LOAN TRUST-I Reconciliation and tie between Trust Indenture Act of 1939 and Indenture of Trust dated as of _____, 200_. TRUST INDENTURE ACT SECTION INDENTURE SECTION - ---------------------------------------- --------------------------------- Section 310(a)(1) 7.23 (a)(2) 7.23 (b) 7.23, 7.09 Section 312(b) 9.14 (c) 9.14 Section 313(c) 4.16, 8.04 Section 314(a) 4.16 (a)(4) 4.17 Section 315(b) 8.04 Section 317(a)(1) 4.18 (a)(2) 7.24 Section 318(a) 9.07 (c) 9.07 - ------------ NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a part of the Indenture. Attention should also be directed to Section 318(c) of the 1939 Act, which provides that the provisions of Sections 310 to and including 317 of the 1939 Act are a part of and govern every qualified indenture, whether or not physically contained therein. TABLE OF CONTENTS (This Table of Contents is for convenience of reference only and is not intended to define, limit or describe the purpose or intent of any provisions of this Indenture of Trust.) Page ARTICLE I DEFINITIONS AND USE OF PHRASES ARTICLE II NOTE DETAILS, FORM OF NOTES, REDEMPTION OF NOTES AND USE OF PROCEEDS OF NOTES Section 2.01 Note Details..................................................14 Section 2.02 Execution of Notes............................................14 Section 2.03 Registration, Transfer and Exchange of Notes; Persons Treated as Registered Owners.................................14 Section 2.04 Lost, Stolen, Destroyed and Mutilated Notes...................15 Section 2.05 Indenture Trustee's Authentication Certificate................15 Section 2.06 Cancellation and Destruction of Notes by the Indenture Trustee......................................................16 Section 2.07 Temporary Notes...............................................16 Section 2.08 Issuance of Notes.............................................16 ARTICLE III PARITY AND PRIORITY OF LIEN; OTHER OBLIGATIONS; AND DERIVATIVE PRODUCTS Section 3.01 Parity and Priority of Lien...................................17 Section 3.02 Other Obligations.............................................17 Section 3.03 Derivative Products; Counterparty Derivative Payments; Issuer Derivative Payments...................................18 ARTICLE IV PROVISIONS APPLICABLE TO THE NOTES; DUTIES OF THE ISSUER Section 4.01 Payment of Principal, Interest and Premium....................19 Section 4.02 Representations and Warranties of the Issuer..................20 -i- Section 4.03 Covenants as to Additional Conveyances........................20 Section 4.04 Further Covenants of the Issuer...............................20 Section 4.05 Enforcement of the Servicing Agreement........................21 Section 4.06 Procedures for Transfer of Funds..............................22 Section 4.07 Additional Covenants with Respect to the Act..................22 Section 4.08 Financed Eligible Loans; Collections Thereof; Assignment Thereof......................................................23 Section 4.09 Appointment of Agents, Etc....................................23 Section 4.10 Capacity to Sue...............................................23 Section 4.11 Continued Existence; Successor to Issuer......................23 Section 4.12 Amendment of Student Loan Transfer Agreements.................24 Section 4.13 Representations; Negative Covenants...........................24 Section 4.14 Additional Covenants..........................................29 Section 4.15 Providing of Notice...........................................30 Section 4.16 Reports by Issuer.............................................30 Section 4.17 Statement as to Compliance....................................31 Section 4.18 Collection of Indebtedness and Suits for Enforcement by Indenture Trustee............................................31 ARTICLE V FUNDS Section 5.01 Creation and Continuation of Funds and Accounts...............32 Section 5.02 Acquisition Fund..............................................32 Section 5.03 Revenue Fund..................................................33 Section 5.04 Reserve Fund..................................................34 Section 5.05 Operating Fund................................................34 Section 5.06 Transfers to Issuer...........................................35 Section 5.07 Investment of Funds Held by Indenture Trustee.................35 Section 5.08 Release.......................................................36 Section 5.09 Purchase of Notes.............................................36 ARTICLE VI DEFAULTS AND REMEDIES Section 6.01 Events of Default Defined.....................................37 Section 6.02 Remedy on Default; Possession of Trust Estate.................37 Section 6.03 Remedies on Default; Advice of Counsel........................39 Section 6.04 Remedies on Default; Sale of Trust Estate.....................39 Section 6.05 Appointment of Receiver.......................................40 Section 6.06 Restoration of Position.......................................40 Section 6.07 Purchase of Properties by Indenture Trustee or Registered Owners.......................................................40 Section 6.08 Application of Sale Proceeds..................................40 Section 6.09 Accelerated Maturity..........................................40 Section 6.10 Remedies Not Exclusive........................................40 -ii- Section 6.11 Direction of Indenture Trustee................................41 Section 6.12 Right to Enforce in Indenture Trustee.........................41 Section 6.13 Physical Possession of Obligations Not Required...............42 Section 6.14 Waivers of Events of Default..................................42 ARTICLE VII THE INDENTURE TRUSTEE Section 7.01 Acceptance of Trust...........................................42 Section 7.02 Recitals of Others............................................43 Section 7.03 As to Filing of Indenture.....................................43 Section 7.04 Indenture Trustee May Act Through Agents......................44 Section 7.05 Indemnification of Indenture Trustee..........................44 Section 7.06 Indenture Trustee's Right to Reliance.........................45 Section 7.07 Compensation of Indenture Trustee.............................45 Section 7.08 Indenture Trustee May Own Notes...............................46 Section 7.09 Resignation of Indenture Trustee..............................46 Section 7.10 Removal of Indenture Trustee..................................46 Section 7.11 Successor Indenture Trustee...................................47 Section 7.12 Manner of Vesting Title in Indenture Trustee..................47 Section 7.13 Additional Covenants By the Indenture Trustee to Conform to the Act...................................................48 Section 7.14 Right of Inspection...........................................48 Section 7.15 Limitation with Respect to Examination of Reports.............48 Section 7.16 Servicing Agreement...........................................48 Section 7.17 Additional Covenants of Indenture Trustee.....................48 Section 7.18 Duty of Indenture Trustee with Respect to Rating Agencies.....48 Section 7.19 Merger of the Indenture Trustee...............................49 Section 7.20 Receipt of Funds from Servicer................................49 Section 7.21 Special Circumstances Leading to Resignation of Indenture Trustee......................................................49 Section 7.22 Survival of Indenture Trustee's Rights to Receive Compensation, Reimbursement and Indemnification..............50 Section 7.23 Corporate Trustee Required; Eligibility; Conflicting Interests....................................................50 Section 7.24 Indenture Trustee May File Proofs of Claim....................50 ARTICLE VIII SUPPLEMENTAL INDENTURES Section 8.01 Supplemental Indentures Not Requiring Consent of Registered Owners............................................51 Section 8.02 Supplemental Indentures Requiring Consent of Registered Owners.......................................................52 Section 8.03 Additional Limitation on Modification of Indenture............53 Section 8.04 Notice of Defaults............................................53 Section 8.05 Conformity With the Trust Indenture Act.......................54 -iii- ARTICLE IX GENERAL PROVISIONS Section 9.01 Notices.......................................................54 Section 9.02 Covenants Bind Issuer.........................................55 Section 9.03 Lien Created..................................................55 Section 9.04 Severability of Lien..........................................55 Section 9.05 Consent of Registered Owners Binds Successors.................56 Section 9.06 Nonpresentment of Notes or Interest Checks....................56 Section 9.07 Laws Governing................................................56 Section 9.08 Severability..................................................56 Section 9.09 Exhibits......................................................56 Section 9.10 Non-Business Days.............................................56 Section 9.11 Parties Interested Herein.....................................56 Section 9.12 Obligations Are Limited Obligations...........................57 Section 9.13 Counterparty Rights...........................................57 Section 9.14 Disclosure of Names and Addresses of Registered Owners........57 Section 9.15 Aggregate Principal Amount of Obligations.....................57 Section 9.16 Financed Eligible Loans.......................................57 ARTICLE X PAYMENT AND CANCELLATION OF NOTES AND SATISFACTION OF INDENTURE Section 10.01 Trust Irrevocable.............................................57 Section 10.02 Satisfaction of Indenture.....................................58 Section 10.03 Cancellation of Paid Notes....................................58 ARTICLE XI TERMINATION Section 11.01 Termination of the Trust......................................58 Section 11.02 Notice........................................................59 ARTICLE XII REPORTING REQUIREMENTS Section 12.01 Annual Statement as to Compliance.............................59 Section 12.02 Annual Independent Public Accountants' Servicing Report.......59 Section 12.03 Servicer's Certificate........................................59 Section 12.04 Statements to Registered Owners...............................59 Exhibit A - Eligible Loan Acquisition Certificate -iv- INDENTURE OF TRUST THIS INDENTURE OF TRUST, dated as of ______, 200_ (this "Indenture"), is by and between SLC STUDENT LOAN TRUST-I, a Delaware business trust (the "Issuer"), and BANKERS TRUST COMPANY, a New York corporation, as indenture trustee (the "Indenture Trustee") (all capitalized terms used in these preambles, recitals and granting clauses shall have the same meanings assigned thereto in Article I hereof); W I T N E S S E T H: WHEREAS, the Issuer represents that it is duly created as a Delaware business trust and that it has duly authorized the execution and delivery of this Indenture, which Indenture provides for the payment of student loan asset-backed notes (the "Notes") and the payments to any Counterparty (as defined herein), all to be issued pursuant to the terms of Supplemental Indentures; and WHEREAS, this Indenture is subject to the provisions of the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act" or "TIA"), that are deemed to be incorporated into this Indenture and shall, to the extent applicable, be governed by such provisions; and WHEREAS, the Indenture Trustee has agreed to accept the trusts herein created upon the terms herein set forth; and WHEREAS, it is hereby agreed between the parties hereto, the Registered Owners of any Notes (the Registered Owners evidencing their consent by their acceptance of the Notes) and any Counterparty (the Counterparty evidencing its consent by its execution and delivery of a Derivative Product (as defined herein)) that in the performance of any of the agreements of the Issuer herein contained, any obligation it may thereby incur for the payment of money shall not be general debt on its part, but shall be secured by and payable solely from the Trust Estate, payable in such order of preference and priority as provided herein; NOW, THEREFORE, the Issuer (and, with respect to the legal title to the Financed Eligible Loans, the Eligible Lender Trustee), in consideration of the premises and acceptance by the Indenture Trustee of the trusts herein created, of the purchase and acceptance of the Notes by the Registered Owners thereof, of the execution and delivery of any Derivative Product by a Counterparty and the Issuer and the acknowledgement thereof by the Indenture Trustee, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, hereby GRANT, CONVEY, PLEDGE, TRANSFER, ASSIGN AND DELIVER to the Indenture Trustee, for the benefit of the Registered Owners of the Notes, any Counterparty (to secure the payment of any and all amounts which may from time to time become due and owing to a Counterparty pursuant to any Derivative Product), all of their right, title and interest in and to the moneys, rights, and properties described in the granting clauses A through F below (the "Trust Estate"), as follows: GRANTING CLAUSE A The Revenues (other than Revenues deposited in the Operating Fund or otherwise released from the lien of the Trust Estate as provided herein); GRANTING CLAUSE B All moneys and investments held in the Funds created under Section 5.01(a) hereof (other than the moneys and investments held in the Operating Fund); GRANTING CLAUSE C The Financed Eligible Loans; GRANTING CLAUSE D The Servicing Agreements, the Student Loan Transfer Agreements and the Guarantee Agreements as the same relate to Financed Eligible Loans; GRANTING CLAUSE E Any Derivative Product and any Counterparty Guarantee; provided, however, that this Granting Clause E shall not be for the benefit of a Counterparty with respect to its Derivative Product; and GRANTING CLAUSE F Any and all other property, rights and interests of every kind or description that from time to time hereafter is granted, conveyed, pledged, transferred, assigned or delivered to the Indenture Trustee as additional security hereunder. TO HAVE AND TO HOLD the Trust Estate, whether now owned or held or hereafter acquired, unto the Indenture Trustee and its successors or assigns, IN TRUST NEVERTHELESS, upon the terms and trusts herein set forth for the equal and proportionate benefit and security of all present and future Registered Owners of the Notes, without preference of any Note over any other, except as provided herein, and for enforcement of the payment of the Notes in accordance with their terms, and all other sums payable hereunder (including payments due and payable to any Counterparty) or on the Notes, and for the performance of and compliance with the obligations, covenants, and conditions of this Indenture, as if all the Notes and other Obligations (as defined herein) at any time Outstanding had been executed and delivered simultaneously with the execution and delivery of this Indenture; -2- PROVIDED, HOWEVER, that if the Issuer, its successors or assigns, shall well and truly pay, or cause to be paid, the principal of the Notes and the interest due and to become due thereon, or provide fully for payment thereof as herein provided, at the times and in the manner mentioned in the Notes according to the true intent and meaning thereof, and shall make all required payments into the Funds as required under Article V hereof, or shall provide, as permitted hereby, for the payment thereof by depositing with the Indenture Trustee sums sufficient to pay or to provide for payment of the entire amount due and to become so due as herein provided (including payments due and payable to any Counterparty), then this Indenture and the rights hereby granted shall cease, terminate and be void; otherwise, this Indenture shall be and remain in full force and effect; NOW, THEREFORE, it is mutually covenanted and agreed as follows: ARTICLE I DEFINITIONS AND USE OF PHRASES The following terms have the following meanings unless the context clearly requires otherwise: "Account" shall mean any of the accounts created and established within any Fund by this Indenture. "Acquisition Fund" shall mean the Fund by that name created in accordance with Section 5.01(a)(i) hereof and further described in Section 5.02 hereof, including any Accounts and Subaccounts created therein. "Act" shall mean the Higher Education Act of 1965, as amended or supplemented from time to time, or any successor federal act and all regulations, directives, bulletins, and guidelines promulgated from time to time thereunder. "Aggregate Market Value" shall mean on any calculation date the sum of the Values of all assets of the Trust Estate, less moneys in any Fund or Account which the Issuer is then entitled to receive for deposit into the Operating Fund but which has not yet been removed from the Trust Estate. "Authorized Officer" shall mean, with respect to the Issuer, any officer of the Issuer Trustee who is authorized to act for the Issuer Trustee in matters relating to the Issuer and who is identified on the list of Authorized Officers delivered by the Issuer Trustee to the Indenture Trustee (as such list may be modified or supplemented from time to time thereafter). "Authorized Representative" shall mean, when used with reference to the Issuer, (a) an Authorized Officer or (b) any affiliate organization or other entity authorized by the Issuer to act on the Issuer's behalf. "Business Day" shall mean the definition of Business Day found in the Supplemental Indenture authorizing a series of Notes. -3- "Certificate of Insurance" shall mean any Certificate evidencing a Financed Eligible Loan is Insured pursuant to a Contract of Insurance. "Commission" shall mean the Securities and Exchange Commission. "Contract of Insurance" shall mean the contract of insurance between the Eligible Lender and the Secretary. "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time. Each reference to a section of the Code herein shall be deemed to include the United States Treasury Regulations, including applicable temporary and proposed regulations, relating to such section which are applicable to the Notes or the use of the proceeds thereof. A reference to any specific section of the Code shall be deemed also to be a reference to the comparable provisions of any enactment which supersedes or replaces the Code thereunder from time to time. "Counterparty" shall mean any counterparty under a Derivative Product. "Counterparty Derivative Payment" shall mean any payment to be made to, or for the benefit of, the Issuer under a Derivative Product. "Date of Issuance" shall mean the date of original issuance and delivery of any Notes to an underwriter or placement agent pursuant to this Indenture. "Depositor" shall mean SLC Student Loan Receivables I, Inc. "Derivative Payment Date" shall mean, with respect to a Derivative Product, any date specified in such Derivative Product on which both or either of the Issuer Derivative Payment and/or a Counterparty Derivative Payment is due and payable under such Derivative Product. "Derivative Product" shall mean a written contract or agreement between the Issuer and a Counterparty, which provides that the Issuer's obligations thereunder will be conditioned on the absence of (i) a failure by the Counterparty to make any payment required thereunder when due and payable, or (ii) a default thereunder with respect to the financial status of the Counterparty, and: (a) under which the Issuer is obligated to pay (whether on a net payment basis or otherwise) on one or more scheduled and specified Derivative Payment Dates, the Issuer Derivative Payments in exchange for the Counterparty's obligation to pay (whether on a net payment basis or otherwise), or to cause to be paid, to the Issuer, Counterparty Derivative Payments on one or more scheduled and specified Derivative Payment Dates in the amounts set forth in the Derivative Product; (b) for which the Issuer's obligation to make Issuer Derivative Payments may be secured by a pledge of and lien on the Trust Estate on an equal and ratable basis with any class of the Issuer's Outstanding Notes and which Issuer Derivative Payments may be equal in priority with any priority classification of the Issuer's Outstanding Notes; and -4- (c) under which Counterparty Derivative Payments are to be made directly to the Indenture Trustee for deposit into the Revenue Fund. "Derivative Value" shall mean the value of the Derivative Product, if any, to the Counterparty, provided that such value is defined and calculated in substantially the same manner as amounts are defined and calculated pursuant to the applicable provisions of an ISDA Master Agreement. "Eligible Lender" shall mean any "Eligible Lender," as defined in the Act, and which has received an eligible lender designation from the Secretary with respect to Eligible Loans made under the Act. "Eligible Lender Trustee" shall mean Bankers Trust Company, a ____________, not in its individual capacity but solely as Eligible Lender Trustee under the Eligible Lender Trust Agreement. "Eligible Lender Trust Agreement" shall mean the Eligible Lender Trust Agreement dated as of __________, 200_ between the Issuer and the Eligible Lender Trustee. "Eligible Loan" shall mean any loan made to finance post-secondary education that is (a) made under the Act; (b) insured by the Secretary of Health and Human Services pursuant to the Public Health Services Act; or (c) otherwise permitted to be acquired by the Issuer pursuant to its Program (provided a Rating Confirmation is received with respect thereto). "Eligible Loan Acquisition Certificate" shall mean a certificate signed by an Authorized Officer of the Issuer in substantially the form attached as Exhibit A hereto. "Event of Bankruptcy" shall mean (a) the Issuer shall have commenced a voluntary case or other proceeding seeking liquidation, reorganization, or other relief with respect to itself or its debts under any bankruptcy, insolvency, or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian, or other similar official of it or any substantial part of its property, or shall have made a general assignment for the benefit of creditors, or shall have declared a moratorium with respect to its debts or shall have failed generally to pay its debts as they become due, or shall have taken any action to authorize any of the foregoing; or (b) an involuntary case or other proceeding shall have been commenced against the Issuer seeking liquidation, reorganization, or other relief with respect to it or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian, or other similar official of it or any substantial part of its property provided such action or proceeding is not dismissed within 60 days. "Event of Default" shall have the meaning specified in Article VI hereof. "Financed" or "Financing," when used with respect to Eligible Loans, shall mean or refer to Eligible Loans (a) acquired by the Issuer with balances in the Acquisition Fund or otherwise deposited in or accounted for in the Acquisition Fund or otherwise constituting a part of the Trust Estate and (b) Eligible Loans substituted or exchanged for Financed Eligible Loans, but does not include Eligible Loans released from the lien of this Indenture and sold or transferred, to the extent permitted by this Indenture. -5- "Fiscal Year" shall mean the fiscal year of the Issuer as established from time to time. "Fitch" shall mean Fitch, Inc., or any successor thereto. "Funds" shall mean each of the Funds created in accordance with Sections 5.01(a) and (b) hereof. "Guarantee" or "Guaranteed" shall mean, with respect to an Eligible Loan, the insurance or guarantee by the Guaranty Agency pursuant to such Guaranty Agency's Guarantee Agreement of the maximum percentage of the principal of and accrued interest on such Eligible Loan allowed by the terms of the Act with respect to such Eligible Loan at the time it was originated and the coverage of such Eligible Loan by the federal reimbursement contracts, providing, among other things, for reimbursement to the Guaranty Agency for payments made by it on defaulted Eligible Loans insured or guaranteed by the Guaranty Agency of at least the minimum reimbursement allowed by the Act with respect to a particular Eligible Loan. "Guarantee Agreements" shall mean a guaranty or lender agreement between the Indenture Trustee and any Guaranty Agency, and any amendments thereto. "Guaranty Agency" shall mean any entity authorized to guarantee student loans under the Act and with which the Indenture Trustee maintains a Guarantee Agreement. "Highest Priority Obligations" shall mean, (a) at any time when Senior Obligations are Outstanding, the Senior Obligations, (b) at any time when no Senior Obligations are Outstanding, the Subordinate Obligations, and (c) at any time when no Senior Obligations or Subordinate Obligations are Outstanding, the Junior-Subordinate Obligations (and any priorities as between Junior-Subordinate Obligations as shall be established by Supplemental Indentures). "Indenture" shall mean this Indenture of Trust, including all supplements and amendments hereto. "Insurance" or "Insured" or "Insuring" means, with respect to an Eligible Loan, the insuring by the Secretary (as evidenced by a Certificate of Insurance or other document or certification issued under the provisions of the Act) under the Act of 100% of the principal of and accrued interest on such Eligible Loan. "Interest Benefit Payment" shall mean an interest payment on Eligible Loans received pursuant to the Act and an agreement with the federal government, or any similar payments. "Investment Agreement" shall mean any investment agreement approved by the Rating Agencies. "Investment Securities" shall mean: -6- (a) direct obligations of, or obligations on which the timely payment of the principal of and interest on which are unconditionally and fully guaranteed by, the United States of America; (b) interest-bearing time or demand deposits, certificates of deposit or other similar banking arrangements with a maturity of 12 months or less with any bank, trust company, national banking association or other depository institution, including those of the Indenture Trustee, provided that, at the time of deposit or purchase such depository institution has commercial paper which is rated ["A-1+" by S&P, "F-1+" by Fitch and "P-1" by Moody's]; (c) interest-bearing time or demand deposits, certificates of deposit or other similar banking arrangements with a maturity of 24 months or less, but more than 12 months, with any bank, trust company, national banking association or other depository institution, including those of the Indenture Trustee and any of its affiliates, provided that, at the time of deposit or purchase such depository institution has senior debt rated ["A" or higher by S&P, "A" or higher by Fitch and "Aa" or higher by Moody's,] and, if commercial paper is outstanding, commercial paper which is rated ["A-1+" by S&P, "F-1+" by Fitch and "P-1" by Moody's]; (d) interest-bearing time or demand deposits, certificates of deposit or other similar banking arrangements with a maturity of more than 24 months with any bank, trust company, national banking association or other depository institution, including those of the Indenture Trustee and any of its affiliates, provided that, at the time of deposit or purchase such depository institution has senior debt rated ["AA" or higher by S&P, "AA" or higher by Fitch and "Aaa" or higher by Moody's] and if commercial paper is outstanding, commercial paper which is rated ["A-1+" by S&P, "F-1+" by Fitch and "P-1" by Moody's]; (e) bonds, debentures, notes or other evidences of indebtedness issued or guaranteed by any of the following agencies: Federal Farm Credit Banks, Federal Home Loan Mortgage Corporation; the Export-Import Bank of the United States; the Federal National Mortgage Association; the Student Loan Marketing Association; the Farmers Home Administration; Federal Home Loan Banks provided such obligation is rated ["AAA" by S&P, "AAA" by Fitch and "Aaa" by Moody's]; or any agency or instrumentality of the United States of America which shall be established for the purposes of acquiring the obligations of any of the foregoing or otherwise providing financing therefor; (f) repurchase agreements and reverse repurchase agreements, other than overnight repurchase agreements and overnight reverse repurchase agreements, with banks, including the Indenture Trustee and any of its affiliates, which are members of the Federal Deposit Insurance Corporation or firms which are members of the Securities Investors Protection Corporation, in each case whose outstanding, unsecured debt securities are rated [no lower than two subcategories below the highest rating on any series of Outstanding Notes by S&P, Fitch and Moody's] and, if commercial paper is outstanding, commercial paper which is rated ["A-1+" by S&P, "F-1+" by Fitch and "P-1" by Moody's]; -7- (g) overnight repurchase agreements and overnight reverse repurchase agreements at least 101% collateralized by securities described in subparagraph (a) of this definition and with a counterparty, including the Indenture Trustee and any of its affiliates, that has senior debt rated ["A" or higher by S&P, "A" or higher by Fitch and "Aa" or higher by Moody's] and, if commercial paper is outstanding, commercial paper which is rated ["A-1+" by S&P, "F-1+" by Fitch and "P-1" by Moody's] or a counterparty approved in writing by S&P, Fitch and Moody's, respectively; (h) investment agreements or guaranteed investment contracts, which may be entered into by and among the Issuer and/or the Indenture Trustee and any bank, bank holding company, corporation or any other financial institution, including the Indenture Trustee and any of its affiliates, whose outstanding (i) commercial paper is rated ["A-1+" by S&P, "F-1+" by Fitch and "P-1" by Moody's] for agreements or contracts with a maturity of 12 months or less; (ii) unsecured long-term debt is rated [no lower than two subcategories below the highest rating on any series of Outstanding Notes by S&P, Fitch and Moody's] and, if commercial paper is outstanding, commercial paper which is rated ["A-1+" by S&P, "F-1+" by Fitch and "P-1" by Moody's] for agreements or contracts with a maturity of 24 months or less, but more than 12 months, or (iii) unsecured long-term debt which is rated [no lower than two subcategories below the highest rating on any series of Outstanding Notes by S&P, Fitch and Moody's] and, if commercial paper is outstanding, commercial paper which is rated ["A-1+" by S&P, "F-1+" by Fitch and "P-1" by Moody's] for agreements or contracts with a maturity of more than 24 months, or, in each case, by an insurance company whose claims-paying ability is so rated; (i) collateralized investment agreements or collateralized guaranteed investment agreements, which may be entered into by and among the Issuer, the Indenture Trustee and any bank, bank holding company, corporation or any other financial institution, including the Indenture Trustee and any of its affiliates, so long as (i) the collateral consists of securities of the types specified in (a) or (e) above, at the levels shown below under (v) below; (ii) the Indenture Trustee has possession of the collateral; (iii) the Indenture Trustee has a perfected first priority security interest in the collateral; (iv) the collateral is free and clear of third-party liens and, in the case of a SIPC broker, was not acquired pursuant to a repurchase agreement or reverse repurchase agreement; and (v) the collateral shall be valued (based upon current market price plus accrued interest) weekly and shall be equal to not less than 103% of the amount of the deposit (or 105% in the case where the collateral consists of obligations of the Federal National Mortgage Association or the Federal Home Loan Mortgage Issuer); (j) "tax exempt bonds" as defined in Section 150(a)(6) of the Code, other than "specified private activity bonds" as defined in Section 57(a)(5)(C) of the Code, that are rated [in the highest category by -8- S&P, Fitch and Moody's] for long-term or short-term debt or shares of a so-called money market or mutual fund rated ["AA/A-1" or higher by S&P, "AA/F-1+" or higher by Fitch and "Aa/P-1" or higher by Moody's], that do not constitute "investment property" within the meaning of Section 148(b)(2) of the Code, provided that the fund has all of its assets invested in obligations of such rating quality; (k) commercial paper, including that of the Indenture Trustee and any of its affiliates, which is rated in the single highest classification, "A-1+" by S&P, "F-1+" by Fitch and "P-1" by Moody's, and which matures not more than 270 days after the date of purchase; (l) investments in a money market fund rated at least ["AA" or "A-1" by S&P, "AA" or "F-1+" by Fitch and "Aa" or "P-1" by Moody's], including funds for which the Indenture Trustee or an affiliate thereof acts as investment advisor or provides other similar services for a fee; (m) any Investment Agreement; and (n) any other investment with respect to which a Rating Confirmation has been obtained from each Rating Agency. "ISDA Master Agreement" shall mean the ISDA Interest Rate and Currency Exchange Agreement, copyright 1992, as amended from time to time, and as in effect with respect to any Derivative Product. "Issuer" shall mean SLC Student Loan Trust-I, a Delaware business trust, and any successor thereto. "Issuer Order" shall mean a written order signed in the name of the Issuer by any one of its Authorized Officers and delivered to the Indenture Trustee. "Issuer Derivative Payment" shall mean a payment required to be made by or on behalf of the Issuer due to a Counterparty pursuant to a Derivative Product. "Issuer Trustee" shall mean Wilmington Trust Company, as Trustee under the Trust Agreement. "Junior-Subordinate Notes" shall mean Notes, the principal of and interest on which is payable on a subordinated basis to the payment of the principal of and interest on the Senior Notes and the Subordinate Notes; provided, however, that any series of the Junior-Subordinate Notes need not necessarily be payable on a parity with all other series of the Junior-Subordinate Notes. "Junior-Subordinate Obligations" shall mean Junior-Subordinate Notes and any Derivative Product, the priority of payment of which is equal with that of any series or subseries of Junior-Subordinate Notes. -9- "Maturity" when used with respect to any Note, shall mean the date on which the principal thereof becomes due and payable as therein or herein provided, whether at its Stated Maturity, by earlier redemption, by declaration of acceleration, or otherwise. "Moody's" shall mean Moody's Investors Service , Inc. or any successor thereto. "Note Counsel" shall mean counsel to the Issuer. "Note Payment Date" shall mean, for any Note, any interest payment date, its Stated Maturity or the date of any other regularly scheduled principal payment with respect thereto. "Notes" shall mean any notes or other debt obligations issued pursuant to Section 2.08 hereof. "Obligations" shall mean Senior Obligations, Subordinate Obligations and Junior-Subordinate Obligations. "Operating Fund" shall mean the fund by that name created in accordance with Section 5.01 hereof and further described in Section 5.05 hereof. "Outstanding" shall mean, when used in connection with any Note, a Note which has been executed and delivered pursuant to this Indenture which at such time remains unpaid as to principal or interest, unless provision has been made for such payment pursuant to Section 10.02 hereof, excluding Notes which have been replaced pursuant to Section 2.09 hereof and, when used in connection with any Derivative Product, a Derivative Product which has been executed and delivered pursuant to this Indenture and which at such time remains in effect. "Person" shall mean an individual, corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization, or government or agency or political subdivision thereof. "Principal Office" shall mean the principal office of the party indicated, as set forth in Section 9.01 hereof or elsewhere in this Indenture. "Program" shall mean the Issuer's program for the origination and the purchase of Eligible Loans, as the same may be modified from time to time. "Program Expenses" shall mean (a) the fees and expenses of the Indenture Trustee; (b) the fees and expenses of any auction agent, any market agent, any calculation agent and any broker-dealer then acting under a Supplemental Indenture with respect to auction rate Notes; (c) the fees and expenses of any remarketing agent then acting under a Supplemental Indenture with respect to variable rate Notes; (d) the fees and expenses due to any credit provider of any Notes for which a credit facility or liquidity facility is in place; (e) the fees of the Servicer and/or Custodian under any servicing agreement or custodian agreement; (f) the fees and expenses of the Issuer incurred in connection with the preparation of legal opinions and other authorized reports or statements attributable to the Notes and the Financed Eligible Loans; (g) transfer fees, purchase premiums and loan origination fees on Financed Eligible Loans; (h) fees and expenses associated with the delivery -10- of a substitute credit facility or liquidity facility under a Supplemental Indenture; (i) fees and expenses associated with (but not payments under) Derivative Products; (j) the costs of remarketing any variable rate Notes and (k) expenses incurred for the Issuer's maintenance and operation of its Program as a direct consequence of this Indenture, the Notes or the Financed Eligible Loans; including, but not limited to, taxes, the reasonable fees and expenses of attorneys, agents, financial advisors, consultants, accountants and other professionals, attributable to such maintenance and operation, marketing expenses for the Program and a prorated portion of the rent, personnel compensation, office supplies and equipment, travel expenses and other lawful payments made to the Issuer Trustee. "Rating" shall mean one of the rating categories of S&P, Fitch and Moody's or any other Rating Agency, provided S&P, Fitch and Moody's or any other Rating Agency, as the case may be, is currently rating the Notes. "Rating Agency" shall mean, collectively, S&P, Fitch and Moody's and their successors and assigns or any other Rating Agency requested by the Issuer to maintain a Rating on any of the Notes. "Rating Confirmation" means, as of any date, a letter from each Rating Agency then providing a Rating for any of the Notes, confirming that the action proposed to be taken by the Issuer will not, in and of itself, result in a downgrade of any of the Ratings then applicable to the Notes, or cause any Rating Agency to suspend or withdraw the Ratings then applicable to the Notes. "Recoveries of Principal" shall mean all amounts received by the Indenture Trustee from or on account of any Financed Eligible Loan as a recovery of the principal amount thereof, including scheduled, delinquent and advance payments, payouts or prepayments, proceeds from insurance or from the sale, assignment, transfer, reallocation or other disposition of a Financed Eligible Loan and any payments representing such principal from the guarantee or insurance of any Financed Eligible Loan. "Registered Owner" shall mean, with respect to a Note, the Person in whose name a Note is registered on the Note registration books maintained by the Indenture Trustee and, with respect to a Derivative Product, the Counterparty thereunder. "Regulations" shall mean the Regulations promulgated from time to time by the Secretary or any Guaranty Agency guaranteeing Financed Eligible Loans. "Reserve Fund" shall mean the Fund by that name created in accordance with Section 5.01(a)(iii) hereof and further described in Section 5.04 hereof, including any Accounts and Subaccounts created therein. "Reserve Fund Requirement" shall mean an amount, if any, required to be on deposit in the Reserve Fund with respect to any Notes issued pursuant to the Supplemental Indenture authorizing the issuance of such Notes. "Revenue" or "Revenues" shall mean all Recoveries of Principal, payments, proceeds, charges and other income received by the Indenture Trustee or the Issuer from or on account of any Financed Eligible Loan (including -11- scheduled, delinquent and advance payments of and any insurance proceeds with respect to, interest, including Interest Benefit Payments, on any Financed Eligible Loan and any Special Allowance Payment received by the Issuer with respect to any Financed Eligible Loan) and all interest earned or gain realized from the investment of amounts in any Fund or Account and all payments received by the Issuer pursuant to a Derivative Product. "Revenue Fund" shall mean the Fund by that name created in accordance with Section 5.01(a)(ii) hereof and further described in Section 5.03 hereof. "S&P" shall mean Standard & Poor's Ratings Group, a Division of The McGraw-Hill Companies, Inc. or any successor thereto. "Secretary" shall mean the Secretary of the United States Department of Education or any successor to the pertinent functions thereof under the Act. "Securities Act" means the Securities Act of 1933, as amended. "Securities Depository" or "Depository" shall mean The Depository Trust Company and its successors and assigns or if, (a) the then Securities Depository resigns from its functions as depository of the Notes or (b) the Issuer discontinues use of the Securities Depository, any other securities depository which agrees to follow the procedures required to be followed by a securities depository in connection with the Notes and which is selected by the Issuer with the consent of the Indenture Trustee. "Securities Exchange Act" shall mean the Securities Exchange Act of 1934, as amended. "Senior Notes" shall mean all Notes secured on a senior priority to the Subordinate Obligations and the Junior-Subordinate Obligations. "Senior Obligations" shall mean Senior Notes and any Derivative Product, the priority of payment of which is equal with that of Senior Notes. "Servicer" shall mean, The Student Loan Corporation, in its capacity as servicer of the Financed Eligible Loans or any permitted successor Servicer. "Servicing Agreement" shall mean the servicing agreement with the Servicer relating to Financed Eligible Loans, as amended from time to time. "Special Allowance Payments" shall mean the special allowance payments authorized to be made by the Secretary by Section 438 of the Act, or similar allowances, if any, authorized from time to time by federal law or regulation. "Stated Maturity" shall mean the date specified in the Notes as the fixed date on which principal of such Notes is due and payable. -12- "Student Loan Transfer Agreement" shall mean a loan transfer agreement entered into for the transfer of Eligible Loans to the Issuer for inclusion in the Trust Estate. "Subaccount" shall mean any of the subaccounts which may be created and established within any Account by this Indenture. "Subordinate Notes" shall mean any Notes secured on a priority subordinate to the Senior Obligations and on a priority senior to the Junior-Subordinate Obligations. "Subordinate Obligations" shall mean Subordinate Notes and any Derivative Product, the priority of payment of which is equal with that of Subordinate Notes. "Supplemental Indenture" shall mean an agreement supplemental hereto executed pursuant to Article VIII hereof. "Trust Agreement" shall mean the Amended and Restated Trust Agreement dated as of _______, 2002 between the Depositor and Wilmington Trust Company, as trustee. "Trust Estate" shall mean the property described as such in the granting clauses hereto. "Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939, as amended, and as in force at the date as of which this Indenture was executed, except as provided in Section 8.05 hereof. "Indenture Trustee" shall mean Bankers Trust Company, acting in its capacity as indenture trustee under this Indenture, or any successor trustee designated pursuant to this Indenture. "Value" on any calculation date when required under this Indenture shall mean the value of the Trust Estate calculated by the Issuer as to (a) below and by the Indenture Trustee as to (b) through (e), inclusive, below, as follows: (a) with respect to any Eligible Loan, the unpaid principal amount thereof plus any accrued but unpaid interest, Interest Benefit Payments and Special Allowance Payments; (b) with respect to any funds of the Issuer held under this Indenture and on deposit in any commercial bank or as to any banker's acceptance or repurchase agreement or investment contract, the amount thereof plus accrued but unpaid interest; (c) with respect to any Investment Securities of an investment company, the bid price of the shares as reported by the investment company plus accrued but unpaid interest; (d) as to investments the bid and asked prices of which are published on a regular basis in The Wall Street Journal (or, if not there, then in The New York Times): the average of the bid and asked prices for such investments so published on or most recently prior to such time of determination; and -13- (e) as to investments the bid and asked prices of which are not published on a regular basis in The Wall Street Journal or The New York Times: (i) the lower of the bid prices at such time of determination for such investments by any two nationally recognized government securities dealers (selected by the Issuer in its absolute discretion) at the time making a market in such investments or (ii) the bid price published by a nationally recognized pricing service. Words importing the masculine gender include the feminine gender, and words importing the feminine gender include the masculine gender. Words importing persons include firms, associations and corporations. Words importing the singular number include the plural number and vice versa. Additional terms are defined in the body of this Indenture. ARTICLE II NOTE DETAILS, FORM OF NOTES, REDEMPTION OF NOTES AND USE OF PROCEEDS OF NOTES Section 2.01 Note Details. The details of each series of Notes authorized pursuant to this Indenture and a Supplemental Indenture, shall be contained in the applicable Supplemental Indenture. Such details shall include, but are not limited to, the principal amount, authorized denomination, dated date, interest rate, principal maturity date, redemption provisions and registration provisions. Section 2.02 Execution of Notes. The Notes shall be executed in the name and on behalf of the Issuer by the manual or facsimile signature of any of its Authorized Officers. Any Note may be signed (manually or by facsimile) or attested on behalf of the Issuer by any person who, at the date of such act, shall hold the proper office, notwithstanding that at the date of authentication, issuance or delivery, such person may have ceased to hold such office. Section 2.03 Registration, Transfer and Exchange of Notes; Persons Treated as Registered Owners. The Issuer shall cause books for the registration and for the transfer of the Notes as provided in this Indenture to be kept by the Indenture Trustee which is hereby appointed the transfer agent of the Issuer for the Notes. Notwithstanding such appointment and with the prior written consent of the Issuer, the Indenture Trustee is hereby authorized to make any arrangements with other institutions which it deems necessary or desirable in order that such institutions may perform the duties of transfer agent for the Notes. Upon surrender for transfer of any Note at the Principal Office of the Indenture Trustee, duly endorsed for transfer or accompanied by an assignment duly executed by the Registered Owner or his attorney duly authorized in writing, the Issuer shall execute and the Indenture Trustee shall authenticate and deliver in the name of the transferee or transferees a new fully registered Note or Notes of the same interest rate and for a like series, subseries, if any, and aggregate principal amount of the same maturity. -14- Notes may be exchanged at the Principal Office of the Indenture Trustee for a like aggregate principal amount of fully registered Notes of the same series, subseries, if any, interest rate and maturity in authorized denominations. The Issuer shall execute and the Indenture Trustee shall authenticate and deliver Notes which the Registered Owner making the exchange is entitled to receive, bearing numbers not contemporaneously outstanding. The execution by the Issuer of any fully registered Note of any authorized denomination shall constitute full and due authorization of such denomination and the Indenture Trustee shall thereby be authorized to authenticate and deliver such fully registered Note. The Indenture Trustee shall not be required to transfer or exchange any Note during the period of 15 business days next preceding the mailing of notice of redemption as herein provided. After the giving of such notice of redemption, the Indenture Trustee shall not be required to transfer or exchange any Note, which Note or portion thereof has been called for redemption. As to any Note, the person in whose name the same shall be registered shall be deemed and regarded as the absolute owner thereof for all purposes, and payment of either principal or interest on any fully registered Note shall be made only to or upon the written order of the Registered Owner thereof or his legal representative but such registration may be changed as hereinabove provided. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Note to the extent of the sum or sums paid. The Indenture Trustee shall require the payment by any Registered Owner requesting exchange or transfer of any tax or other governmental charge required to be paid with respect to such exchange or transfer. The applicant for any such transfer or exchange may be required to pay all taxes and governmental charges in connection with such transfer or exchange. Section 2.04 Lost, Stolen, Destroyed and Mutilated Notes. Upon receipt by the Indenture Trustee of evidence satisfactory to it of the ownership of and the loss, theft, destruction or mutilation of any Note and, in the case of a lost, stolen or destroyed Note, of indemnity satisfactory to it, and upon surrender and cancellation of the Note, if mutilated, (a) the Issuer shall execute, and the Indenture Trustee shall authenticate and deliver, a new Note of the same series, subseries, if any, interest rate, maturity and denomination in lieu of such lost, stolen, destroyed or mutilated Note or (b) if such lost, stolen, destroyed or mutilated Note shall have matured or have been called for redemption, in lieu of executing and delivering a new Note as aforesaid, the Issuer may pay such Note. Any such new Note shall bear a number not contemporaneously outstanding. The applicant for any such new Note may be required to pay all taxes and governmental charges and all expenses and charges of the Issuer and of the Indenture Trustee in connection with the issuance of such Note. All Notes shall be held and owned upon the express condition that, to the extent permitted by law, the foregoing conditions are exclusive with respect to the replacement and payment of mutilated, destroyed, lost or stolen Notes, negotiable instruments or other securities. Section 2.05 Indenture Trustee's Authentication Certificate. The Indenture Trustee's authentication certificate upon any Notes shall be substantially in the form provided in the Supplemental Indenture authorizing the issuance of such Notes. No Note shall be secured hereby or entitled to the benefit hereof, or shall be valid or obligatory for any purpose, unless a -15- certificate of authentication, substantially in such form, has been duly executed by the Indenture Trustee; and such certificate of the Indenture Trustee upon any Note shall be conclusive evidence and the only competent evidence that such Note has been authenticated and delivered hereunder and under a Supplemental Indenture. The Indenture Trustee's certificate of authentication shall be deemed to have been duly executed by it if manually signed by an authorized officer or signatory of the Indenture Trustee, but it shall not be necessary that the same person sign the certificate of authentication on all of the Notes issued hereunder. Section 2.06 Cancellation and Destruction of Notes by the Indenture Trustee. Whenever any Outstanding Notes shall be delivered to the Indenture Trustee for the cancellation thereof pursuant to this Indenture, upon payment of the principal amount and interest represented thereby, or for replacement pursuant to Section 2.03 hereof, such Notes shall be promptly cancelled and, within a reasonable time, cremated or otherwise destroyed by the Indenture Trustee and counterparts of a certificate of destruction evidencing such cremation or other destruction shall be furnished by the Indenture Trustee to the Issuer. Section 2.07 Temporary Notes. Pending the preparation of definitive Notes, the Issuer may execute and the Indenture Trustee shall authenticate and deliver temporary Notes. Temporary Notes shall be issuable as fully registered Notes without coupons, of any denomination, and substantially in the form of the definitive Notes but with such omissions, insertions and variations as may be appropriate for temporary Notes, all as may be determined by the Issuer. Every temporary Note shall be executed by the Issuer and be authenticated by the Indenture Trustee upon the same conditions and in substantially the same manner, and with like effect, as the definitive Notes. As promptly as practicable the Issuer shall execute and shall furnish definitive Notes and thereupon temporary Notes may be surrendered in exchange therefor without charge at the principal office of the Indenture Trustee, and the Indenture Trustee shall authenticate and deliver in exchange for such temporary Notes a like aggregate principal amount of definitive Notes. Until so exchanged the temporary Notes shall be entitled to the same benefits under this Indenture as definitive Notes. Section 2.08 Issuance of Notes. (a) The Issuer shall have the authority, upon complying with the provisions of this Section 2.08, to issue and deliver from time to time Notes secured by the Trust Estate on a parity with the Senior Notes, the Subordinate Notes or the Junior-Subordinate Notes, if any, secured hereunder as shall be determined by the Issuer. In addition, the Issuer may enter into any Derivative Products it deems necessary or desirable with respect to any or all of the Notes. (b) No Notes shall be authenticated and delivered pursuant to this Indenture until the following conditions have been satisfied: (i) The Issuer and the Indenture Trustee have entered into a Supplemental Indenture (which Supplemental Indenture shall not require the approval of the Registered Owners of any of the Outstanding Notes or Derivative Products) providing the terms and forms of the proposed Notes as described in Section 2.01 hereof, including the designation of such Notes as Senior Notes, Subordinate Notes or Junior-Subordinate Notes, the redemption and selection provisions applicable to such Notes, and the Reserve Fund Requirement with respect to such Notes, if any. -16- (ii) The Indenture Trustee shall have received a Rating Confirmation from each Rating Agency which has assigned a Rating or Ratings to any Outstanding Notes that such Rating or Ratings will not be reduced or withdrawn as a result of the issuance of the proposed Notes. (iii) The Indenture Trustee shall have received an opinion of Note Counsel to the effect that all of the foregoing conditions to the issuance of the proposed Notes have been satisfied. (iv) Upon the issuance of the proposed Notes, an amount equal to the Reserve Fund Requirement with respect to such Notes, if any, shall be deposited in the Reserve Fund. (c) The Indenture Trustee is authorized to set up any additional Funds or Accounts or Subaccounts under this Indenture which it deems necessary or convenient in connection with the issuance and delivery of any Notes. ARTICLE III PARITY AND PRIORITY OF LIEN; OTHER OBLIGATIONS; AND DERIVATIVE PRODUCTS Section 3.01 Parity and Priority of Lien. The provisions, covenants and agreements herein set forth to be performed by or on behalf of the Issuer shall be for the equal benefit, protection and security of the Registered Owners of any and all of the Obligations, all of which, regardless of the time or times of their issuance or maturity, shall be of equal rank without preference, priority or distinction of any of the Obligations over any other thereof, except as expressly provided in this Indenture with respect to certain payment and other priorities. Section 3.02 Other Obligations. (a) The Issuer reserves the right to issue other notes or obligations which do not constitute or create a lien on the Trust Estate. (b) The Issuer shall not commingle the Funds established by this Indenture with funds, proceeds, or investment of funds relating to other issues or series of notes heretofore or hereafter issued, except to the extent such commingling is required by the Indenture Trustee for ease in administration of its duties and responsibilities; provided, however, that should the Indenture Trustee require such permitted commingling, it shall keep complete records in order that the funds, proceeds, or investments under this Indenture may at all times be identified by source and application, and if necessary, separated. -17- (c) The revenues and other moneys, Financed Eligible Loans, securities, evidences of indebtedness, interests, rights and properties pledged under this Indenture are and will be owned by the Issuer (or the Eligible Lender Trustee) free and clear of any pledge, lien, charge or encumbrance thereon or with respect thereto prior to or of equal rank with the respective pledges created by this Indenture, except as otherwise expressly provided herein, and all action on the part of the Issuer to that end has been duly and validly taken. If any Financed Eligible Loan is found to have been subject to a lien at the time such Financed Eligible Loan was acquired, the Issuer shall cause such lien to be released, shall purchase such Financed Eligible Loan from the Trust Estate for a purchase price equal to its principal amount plus any unamortized premium, if any, and interest accrued thereon or shall replace such Financed Eligible Loan with another Eligible Loan with substantially identical characteristics which replacement Eligible Loan shall be free and clear of liens at the time of such replacement. Except as otherwise provided herein, the Issuer shall not create or voluntarily permit to be created any debt, lien, or charge on the Financed Eligible Loans which would be on a parity with or prior to the lien of this Indenture; shall not do or omit to do or suffer to be done or omitted to be done any matter of things whatsoever whereby the lien of this Indenture or the priority of such lien for the Obligations hereby secured might or could be lost or impaired; and will pay or cause to be paid or will make adequate provisions for the satisfaction and discharge of all lawful claims and demands which if unpaid might by law be given precedence to or any equality with this Indenture as a lien or charge upon the Financed Eligible Loans; provided, however, that nothing in this subsection (c) shall require the Issuer to pay, discharge, or make provision for any such lien, charge, claim, or demand so long as the validity thereof shall be by it in good faith contested, unless thereby, in the opinion of the Indenture Trustee, the same will endanger the security for the Obligations; and provided further that any subordinate lien hereon (i.e., subordinate to the lien securing the Senior Obligations, the Subordinate Obligations and the Junior-Subordinate Obligations) shall be entitled to no payment from the Trust Estate, nor may any remedy be exercised with respect to such subordinate lien against the Trust Estate until all Obligations have been paid or deemed paid hereunder. Section 3.03 Derivative Products; Counterparty Derivative Payments; Issuer Derivative Payments. The Issuer hereby authorizes and directs the Indenture Trustee to acknowledge and agree to any Derivative Product hereafter entered into by the Issuer and a Counterparty under which (a) the Issuer may be required to make, from time to time, Issuer Derivative Payments and (b) the Indenture Trustee may receive, from time to time, Counterparty Derivative Payments for the account of the Issuer. No Derivative Product shall be entered into unless (i) the Indenture Trustee shall have received a Rating Confirmation from each Rating Agency that such Derivative Product will not adversely affect the Rating on any of the Notes and (ii) all Issuer Derivative Payments and Counterparty Derivative Payments are made on the third Business Day immediately preceding a Note Payment Date. Anything in this Indenture to the contrary notwithstanding, any Revenues representing Counterparty Derivative Payments shall not be available to make an Issuer Derivative Payment or to pay any other amounts owed to a Counterparty under a Derivative Product. No later than the fourth Business Day immediately preceding each Note Payment Date on which a Counterparty Derivative Payment or Issuer Derivative Payment is due pursuant to the applicable Derivative Product through and including the termination date of a Derivative Product, the Issuer shall give written notice to the Indenture Trustee stating either (a) the amount of -18- any Counterparty Derivative Payment due to be received by the Indenture Trustee for the account of the Issuer on the third Business Day immediately preceding such Note Payment Date or (b) the amount of any Issuer Derivative Payment to be paid to the Counterparty on the third Business Day immediately preceding such Note Payment Date. If the Indenture Trustee fails to receive such written notification from the Issuer by the end of such fourth Business Day, it shall immediately notify the Issuer of such fact in writing. On the third Business Day immediately preceding each Note Payment Date on which a Counterparty Derivative Payment is due pursuant to the applicable Derivative Product in accordance with the written notification received from the Issuer, the Indenture Trustee shall deposit all moneys received representing such Counterparty Derivative Payment in the Revenue Fund to be applied in accordance with the provisions of Section 5.03 hereof. The Indenture Trustee shall notify the Issuer on such Business Day, if (a) the amount received from the Counterparty is not equal to the amount specified in the written notification of the Issuer, (b) no amount is received from the Counterparty or (c) the amount received is not received in immediately available funds. On the third Business Day immediately preceding any Note Payment Date with respect to which an Issuer Derivative Payment is due in accordance with the written notification received from the Issuer or, with respect to a payment in respect of an early termination date due pursuant to the terms of a Derivative Product from the Issuer, the Indenture Trustee shall make payment to the Counterparty from moneys in the Revenue Fund of the amount of the Issuer Derivative Payment specified in such written notification of the Issuer, due on such date by the deposit or wire transfer of immediately available funds to the credit of the account of the Counterparty specified in such written notification of the Issuer, but only to the extent such payment will not result in a deficiency in the amount due on the next succeeding Note Payment Date to the Registered Owners of any class of Obligations having a priority equal to or higher than such Counterparty under such Derivative Product. If any payment to such a Counterparty described in the paragraph above would result in a deficiency in the amounts required to make payments to the Registered Owners of the Obligations referred to in the paragraph above on such Note Payment Date, then the Indenture Trustee shall delay the making of such payment to the Counterparty until the first date on which no deficiency would result from such payment. ARTICLE IV PROVISIONS APPLICABLE TO THE NOTES; DUTIES OF THE ISSUER Section 4.01 Payment of Principal, Interest and Premium. The Issuer covenants that it will promptly pay, but solely from the Trust Estate, the principal of and interest, if any, on each and every Obligation issued under the provisions of this Indenture at the places, on the dates and in the manner specified herein and in said Obligations and any premium required for the retirement of said Obligations by purchase or redemption according to the true intent and meaning thereof. The Obligations shall be and are hereby declared to be payable from and equally secured by an irrevocable first lien on and pledge of the properties constituting the Trust Estate, subject to the application thereof as permitted by this Indenture, but in no event shall the Registered Owners of any of the Obligations have any right to possession of any Financed Eligible Loans, which shall be held only by the Indenture Trustee or its agent or bailee. -19- Section 4.02 Representations and Warranties of the Issuer. The Issuer represents and warrants that it is duly authorized under the laws of Delaware to create and issue the Notes and to execute and deliver this Indenture and any Derivative Product and to make the pledge to the payment of Notes and any Issuer Derivative Payments hereunder, that all necessary action on the part of the Issuer for the creation and issuance of the Notes and the execution and delivery of this Indenture and any Derivative Product has been duly and effectively taken; and that the Notes in the hands of the Registered Owners thereof and the Issuer Derivative Payments are and will be valid and enforceable special limited obligations of the Issuer secured by and payable solely from the Trust Estate. Section 4.03 Covenants as to Additional Conveyances. At any and all times, the Issuer will duly execute, acknowledge, and deliver, or will cause to be done, executed, and delivered, all and every such further acts, conveyances, transfers, and assurances in law as the Indenture Trustee shall reasonably require for the better conveying, transferring, and pledging and confirming unto the Indenture Trustee, all and singular, the properties constituting the Trust Estate hereby transferred and pledged, or intended so to be transferred and pledged. Section 4.04 Further Covenants of the Issuer. (a) The Issuer will cause financing statements and continuation statements with respect thereto at all times to be filed in the office of the Secretary of the State of Delaware and any other jurisdiction necessary to perfect and maintain the security interest granted by the Issuer hereunder. (b) The Issuer will duly and punctually keep, observe and perform each and every term, covenant, and condition on its part to be kept, observed, and performed, contained in this Indenture and the other agreements to which the Issuer is a party pursuant to the transactions contemplated herein, and will punctually perform all duties required by the Trust Agreement and the laws of Delaware. (c) The Issuer shall be operated on the basis of its Fiscal Year. (d) The Issuer shall cause to be kept full and proper books of records and accounts, in which full, true, and proper entries will be made of all dealings, business, and affairs of the Issuer which relate to the Notes and any Derivative Product. (e) The Issuer, upon written request of the Indenture Trustee, will permit at all reasonable times the Indenture Trustee or its agents, accountants, and attorneys, to examine and inspect the property, books of account, records, reports, and other data relating to the Financed Eligible Loans, and will furnish the Indenture Trustee such other information as it may reasonably request. The Indenture Trustee shall be under no duty to make any such examination unless requested in writing to do so by the Registered Owners of 66% in collective aggregate principal amount of the Notes at the time Outstanding, and unless such Registered Owners shall have offered the Indenture Trustee security and indemnity satisfactory to it against any costs, expenses and liabilities which might be incurred thereby. -20- (f) The Issuer shall cause an annual audit to be made by an independent auditing firm of national reputation and file one copy thereof with the Indenture Trustee and each Rating Agency within 150 days of the close of each Fiscal Year. The Indenture Trustee shall be under no obligation to review or otherwise analyze such audit. (g) The Issuer covenants that all Financed Eligible Loans upon receipt thereof shall be delivered to the Indenture Trustee or its agent or bailee to be held pursuant to this Indenture and pursuant to the Servicing Agreement or a custodian agreement. (h) Notwithstanding anything to the contrary contained herein, except upon the occurrence and during the continuance of an Event of Default hereunder, the Issuer hereby expressly reserves and retains the privilege to receive and, subject to the terms and provisions of this Indenture, to keep or dispose of, claim, bring suits upon or otherwise exercise, enforce or realize upon its rights and interest in and to the Financed Eligible Loans and the proceeds and collections therefrom, and neither the Indenture Trustee nor any Registered Owner shall in any manner be or be deemed to be an indispensable party to the exercise of any such privilege, claim or suit and the Indenture Trustee shall be under no obligation whatsoever to exercise any such privilege, claim or suit; provided, however, that the Indenture Trustee shall have and retain possession of the Financed Eligible Loans pursuant to Section 5.02 hereof (which Financed Eligible Loans may be held by the Indenture Trustee's agent or bailee) so long as such loans are subject to the lien of this Indenture. (i) The Issuer shall notify the Indenture Trustee and each Rating Agency in writing prior to entering into any Derivative Product and shall not enter into any Derivative Product unless the Indenture Trustee has received a Rating Confirmation. Section 4.05 Enforcement of the Servicing Agreement. Regardless of whether the Issuer is otherwise in default under this Indenture, the Issuer shall comply with and shall require the Servicer to comply with the following: (a) diligently enforce and take all reasonable steps, actions and proceedings necessary for the enforcement of all terms, covenants and conditions of the Servicing Agreement, including the prompt payment of all amounts due the Issuer thereunder, including without limitation all principal and interest payments, and Guarantee payments which relate to any Financed Eligible Loans and cause the Servicer to specify whether payments received by it represent principal or interest; (b) not permit the release of the obligations of the Servicer under the Servicing Agreement except in conjunction with amendments or modifications permitted by (g) below; (c) at all times, to the extent permitted by law, cause to be defended, enforced, preserved and protected the rights and privileges of the Issuer and of the Registered Owners under or with respect to the Servicing Agreement; -21- (d) at its own expense, the Issuer shall duly and punctually perform and observe each of its obligations to the Servicer under the Servicing Agreement in accordance with the terms thereof; (e) the Issuer agrees to give the Indenture Trustee prompt written notice of each default on the part of the Servicer of its obligations under the Servicing Agreement coming to the Issuer's attention; (f) the Issuer shall not waive any default by the Servicer under the Servicing Agreement without the written consent of the Indenture Trustee; and (g) not consent or agree to or permit any amendment or modification of the Servicing Agreement which will in any manner materially adversely affect the rights or security of the Registered Owners. The Issuer shall be entitled to receive and rely upon an opinion of its counsel that any such amendment or modification will not materially adversely affect the rights or security of the Registered Owners. Section 4.06 Procedures for Transfer of Funds. In any instance where this Indenture requires a transfer of funds or money from one Fund to another, a transfer of ownership in investments or an undivided interest therein may be made in any manner agreeable to the Issuer and the Indenture Trustee, and in the calculation of the amount transferred, interest on the investment which has or will accrue before the date the money is needed in the fund to which the transfer is made shall not be taken into account or considered as money on hand at the time of such transfer. Section 4.07 Additional Covenants with Respect to the Act. The Issuer covenants that it will cause the Indenture Trustee to be, or replace the Indenture Trustee with, an Eligible Lender under the Act, that it will acquire or cause to be acquired Eligible Loans originated and held only by an Eligible Lender and that it will not dispose of or deliver any Financed Eligible Loans or any security interest in any such Financed Eligible Loans to any party who is not an Eligible Lender so long as the Act or Regulations adopted thereunder require an Eligible Lender to be the owner or holder of Guaranteed Eligible Loans; provided, however, that nothing above shall prevent the Issuer from delivering the Eligible Loans to the Servicer or the Guarantee Agency. The Registered Owners of the Notes shall not in any circumstances be deemed to be the owner or holder of the Guaranteed Eligible Loans. The Issuer, or its designated agent, shall be responsible for each of the following actions with respect to the Act: (a) the Issuer, or its designated agent, shall be responsible for dealing with the Secretary with respect to the rights, benefits and obligations under the Certificates of Insurance and the Contract of Insurance, and the Issuer shall be responsible for dealing with the Guarantee Agencies with respect to the rights, benefits and obligations under the Guarantee Agreements with respect to the Financed Eligible Loans; (b) the Issuer, or its designated agent, shall cause to be diligently enforced, and shall cause to be taken all reasonable steps, actions and proceedings necessary or appropriate for the enforcement of all terms, covenants and conditions of all Financed Eligible Loans and agreements in connection therewith, including the prompt payment of all principal and interest payments and all other amounts due thereunder; -22- (c) the Issuer, or its designated agent, shall cause the Financed Eligible loans to be serviced by entering into the Servicing Agreement or other agreement with the Servicer for the collection of payments made for, and the administration of the accounts of, the Financed Eligible Loans; (d) the Issuer, or its designated agent, shall comply, and shall cause all of its officers, directors, employees and agents to comply, with the provisions of the Act and any regulations or rulings thereunder, with respect to the Financed Eligible Loans; and (e) the Issuer, or its designated agent, shall cause the benefits of the Guarantee Agreements, the Interest Subsidy Payments and the Special Allowance Payments to flow to the Indenture Trustee. The Indenture Trustee shall have no liability for actions taken at the direction of the Issuer, except for negligence or willful misconduct in the performance of its express duties hereunder. The Indenture Trustee shall have no obligation to administer, service or collect the loans in the Trust Estate or to maintain or monitor the administration, servicing or collection of such loans. The Indenture Trustee shall not be deemed to be the designated agent for the purposes of this Section 4.07 unless it has agreed in writing to be such agent. Section 4.08 Financed Eligible Loans; Collections Thereof; Assignment Thereof. The Issuer, through the Servicer, shall diligently collect all principal and interest payments on all Financed Eligible Loans, and all Interest Benefit Payments, insurance, guarantee and default claims and Special Allowance Payments which relate to such Financed Eligible Loans. The Issuer shall cause the filing and assignment of such claims (prior to the timely filing deadline for such claims under the Regulations) by the Servicer. The Issuer will comply with the Act and Regulations which apply to the Program and to such Financed Eligible Loans. Section 4.09 Appointment of Agents, Etc. The Issuer shall employ and appoint all employees, agents, consultants and attorneys which it may consider necessary. Section 4.10 Capacity to Sue. The Issuer shall have the power and capacity to sue and to be sued on matters arising out of or relating to the financing of the Financed Eligible Loans. Section 4.11 Continued Existence; Successor to Issuer. The Issuer agrees that it will do or cause to be done all things necessary to preserve and keep in full force and effect its existence, rights and franchises as a Delaware business trust, except as otherwise permitted by this Section 4.11. The Issuer further agrees that it will not (a) sell, transfer or otherwise dispose of all or substantially all, of its assets (except Financed Eligible Loans if such sale, transfer or disposition will discharge this Indenture in accordance with Article X hereof); (b) consolidate with or merge into another entity; or (c) permit one or more other corporations or entities to consolidate with or merge into it. The preceding restrictions in (a), (b) and (c) shall not apply to a transaction if the transferee or the surviving or resulting corporation or entity, if other than the Issuer, by proper written instrument for the benefit of the Indenture Trustee, irrevocably and unconditionally assumes the obligation to perform and observe the agreements and obligations of the Issuer under this Indenture. -23- If a transfer is made as provided in this Section 4.11, the provisions of this Section 4.11 shall continue in full force and effect and no further transfer shall be made except in compliance with the provisions of this Section 4.11. Section 4.12 Amendment of Student Loan Transfer Agreements. The Issuer shall notify the Indenture Trustee in writing of any proposed amendments to any existing Student Loan Transfer Agreement. No such amendment shall become effective unless and until the Indenture Trustee consents thereto in writing. The consent of the Indenture Trustee shall not be unreasonably withheld and shall not be withheld if the Indenture Trustee receives an opinion of counsel acceptable to them that such an amendment is required by the Act and is not materially prejudicial to the Registered Owners. Notwithstanding the foregoing, however, the Indenture Trustee shall consent to an amendment from time to time so long as it is not materially prejudicial to the interests of the Registered Owners, and the Indenture Trustee may rely on an opinion of counsel to such effect. Section 4.13 Representations; Negative Covenants. (a) The Issuer hereby makes the following representations and warranties to the Indenture Trustee on which the Indenture Trustee relies in authenticating the Notes and on which the Registered Owners of the Notes have relied in purchasing the Notes. Such representations and warranties shall survive the grant of the Trust Estate to the Indenture Trustee pursuant to this Indenture. (i) Organization and Good Standing. The Issuer is duly organized and validly existing under the laws of Delaware, and has the power to own its assets and to transact the business in which it presently engages. (ii) Due Qualification. The Issuer is duly qualified to do business and is in good standing, and has obtained all material necessary licenses and approvals, in all jurisdictions where the failure to be so qualified, have such good standing or have such licenses or approvals would have a material adverse effect on the Issuer's business and operations or in which the actions as required by this Indenture require or will require such qualification. (iii) Authorization. The Issuer has the power, authority and legal right to execute, deliver and perform this Indenture and to grant the Trust Estate to the Indenture Trustee and the execution, delivery and performance of this Indenture and grant of the Trust Estate to the Indenture Trustee have been duly authorized by the Issuer. (iv) Binding Obligation. This Indenture, assuming due authorization, execution and delivery by the Indenture Trustee, constitutes a legal, valid and binding obligation of the Issuer enforceable against the Issuer in accordance with its terms, except that (A) such enforcement may be subject to bankruptcy, insolvency, reorganization, moratorium or other similar laws (whether statutory, regulatory or decisional) now or hereafter in effect relating to creditors' rights generally and (B) the remedy of specific performance and -24- injunctive and other forms of equitable relief may be subject to certain equitable defenses and to the discretion of the court before which any proceeding therefor may be brought, whether a proceeding at law or in equity. (v) No Violation. The consummation of the transactions contemplated by this Indenture and the fulfillment of the terms hereof does not conflict with, result in any breach of any of the terms and provisions of or constitute (with or without notice, lapse of time or both) a default under the organizational documents of the Issuer, or any material indenture, agreement, mortgage, deed of trust or other instrument to which the Issuer is a party or by which it is bound, or result in the creation or imposition of any lien upon any of its material properties pursuant to the terms of any such indenture, agreement, mortgage, deed of trust or other instrument, other than this Indenture, nor violate any law or any order, rule or regulation applicable to the Issuer of any court or of any federal or state regulatory body, administrative agency, or other governmental instrumentality having jurisdiction over the Issuer or any of its properties. (vi) No Proceedings. There are no proceedings, injunctions, writs, restraining orders or investigations to which the Issuer or any of such entity's affiliates is a party pending, or, to the best of such entity's knowledge, threatened, before any court, regulatory body, administrative agency, or other tribunal or governmental instrumentality (A) asserting the invalidity of this Indenture, (B) seeking to prevent the issuance of any Notes or the consummation of any of the transactions contemplated by this Indenture or (C) seeking any determination or ruling that might materially and adversely affect the performance by the Issuer of its obligations under, or the validity or enforceability of this Indenture. (vii) Approvals. All approvals, authorizations, consents, orders or other actions of any person, corporation or other organization, or of any court, governmental agency or body or official, required on the part of the Issuer in connection with the execution and delivery of this Indenture have been taken or obtained on or prior to the Date of Issuance. (viii) Place of Business. The Issuer's place of business and office is located at [________]. (ix) Tax and Accounting Treatment. The Issuer intends to treat the transactions contemplated by the Student Loan Transfer Agreements as an absolute transfer rather than as a pledge of the Financed Eligible Loans from the Depositor for federal income tax and financial accounting purposes and the Issuer will be treated as the owner of the Financed Eligible Loans for all purposes. The Issuer further intends to treat the Senior Notes as its indebtedness for federal income tax and financial accounting purposes. (x) Taxes. The Issuer has filed (or caused to be filed) all federal, state, county, local and foreign income, franchise and other tax returns required to be filed by it through the date hereof, and has paid all taxes reflected as due thereon. The Issuer has taken all steps necessary to ensure that it is eligible to file a consolidated federal income tax return with National Education Loan Network, Inc. and such returns will be filed for all taxable years in which the Notes are Outstanding. There is no pending dispute with any taxing authority that, -25- if determined adversely to the Issuer, would result in the assertion by any taxing authority of any material tax deficiency, and the Issuer has no knowledge of a proposed liability for any tax year to be imposed upon such entity's properties or assets for which there is not an adequate reserve reflected in such entity's current financial statements. (xi) Legal Name. The legal name of the Issuer is "SLC Student Loan Trust-I" and has not changed since its inception. The Issuer has no tradenames, fictitious names, assumed names or "dba's" under which it conducts its business and has made no filing in respect of any such name. (xii) Business Purpose. The Issuer has acquired the Financed Eligible Loans conveyed to it under a Student Loan Transfer Agreement for a bona fide business purpose and has undertaken the transactions contemplated herein as principal rather than as an agent of any other person. The Issuer has adopted and operated consistently with all formalities with respect to its operations and has engaged in no other activities other than those specified in this Indenture and the Student Loan Transfer Agreements and in accordance with the transactions contemplated herein and therein. (xiii) With Laws. The Issuer is in compliance with all applicable laws and regulations with respect to the conduct of its business and has obtained and maintains all permits, licenses and other approvals as are necessary for the conduct of its operations. (xiv) Valid Business Reasons; No Fraudulent Transfers. The transactions contemplated by this Indenture are in the ordinary course of the Issuer's business and the Issuer has valid business reasons for granting the Trust Estate pursuant to this Indenture. At the time of each such grant: (A) the Issuer granted the Trust Estate to the Indenture Trustee without any intent to hinder, delay, or defraud any current or future creditor of the Issuer; (B) the Issuer was not insolvent and did not become insolvent as a result of any such grant; (C) the Issuer was not engaged and was not about to engage in any business or transaction for which any property remaining with such entity was an unreasonably small capital or for which the remaining assets of such entity are unreasonably small in relation to the business of such entity or the transaction; (D) the Issuer did not intend to incur, and did not believe or should not have reasonably believed, that it would incur, debts beyond its ability to pay as they become due; and (E) the consideration received by the Issuer for the grant of the Trust Estate was reasonably equivalent to the value of the related grant. (xv) No Management of Affairs of Depositor. The Issuer is not and will not be involved in the day-to-day management of the Depositor. (xvi) Ability to Perform. There has been no material impairment in the ability of the Issuer to perform its obligations under this Indenture. (xvii) Financial Condition. No material adverse change has occurred in the Issuer's financial status since the date of its formation. -26- (xviii) Event of Default. No Event of Default has occurred and no event has occurred that, with the giving of notice, the passage of time, or both, would become an Event of Default. (xix) Acquisition of Financed Eligible Loans Legal. The Issuer has complied with all applicable federal, state and local laws and regulations in connection with its acquisition of the Financed Eligible Loans from the Depositor. (xx) No Material Misstatements or Omissions. No information, certificate of an officer, statement furnished in writing or report delivered to the Indenture Trustee, the Servicer or any Registered Owner by the Issuer contains any untrue statement of a material fact or omits a material fact necessary to make such information, certificate, statement or report not misleading. (b) The Issuer will not: (i) sell, transfer, exchange or otherwise dispose of any portion of the Trust Estate except as expressly permitted by this Indenture; (ii) claim any credit on, or make any deduction from, the principal amount of any of the Notes by reason of the payment of any taxes levied or assessed upon any portion of the Trust Estate; (iii) except as otherwise provided herein, dissolve or liquidate in whole or in part, except with the prior written consent of the Indenture Trustee, and to the extent Notes remain Outstanding, approval of the Registered Owners of the Notes and a Rating Confirmation; (iv) permit the validity or effectiveness of this Indenture, any Supplement or any grant hereunder 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 under this Indenture, except as may be expressly permitted hereby; (v) except as otherwise provided herein, permit any lien, charge, 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 Trust Estate or any part thereof or any interest therein or the proceeds thereof; (vi) permit the lien of this Indenture not to constitute a valid first priority, perfected security interest in the Trust Estate; (vii) incur or assume any indebtedness or guarantee any indebtedness of any Person whether secured by any Financed Eligible Loans under this Indenture or otherwise, except for such obligations as may be incurred by the Issuer in connection with the issuance of the Notes pursuant to this Indenture and unsecured trade payables in the ordinary course of its business; -27- (viii) operate such that it would be consolidated with any affiliate and its separate existence disregarded in any federal or state proceeding (ix) act as agent of the Depositor or allow the Depositor to act as its agent; (x) allow the Depositor or any other affiliate to pay its expenses, guarantee its obligations or advance funds to it for payment of expenses; or (xi) consent to the appointment of a conservator or receiver or liquidator in any insolvency, readjustment of debt, marshalling of assets and liabilities or similar proceedings of or relating to the Issuer or of or relating to all or substantially all of its property, or a decree or order of a court or agency or supervisory authority having jurisdiction in the premises for the appointment of a conservator or receiver or liquidator in any insolvency, readjustment of debt, marshalling of assets and liabilities or similar proceedings, or for the winding-up or liquidation of its affairs, shall have been entered against the Issuer; or the Issuer shall not consent to the appointment of a receiver, conservator or liquidator in any insolvency, readjustment of debt, marshalling of assets and liabilities, voluntary liquidation or similar proceedings of or relating to the Issuer or of or relating to all or substantially all of its property; or admit in writing its inability to pay its debts generally as they become due, file a petition to take advantage of any applicable insolvency, bankruptcy or reorganization statute, make an assignment for the benefit of its creditors or voluntarily suspend payment of its obligations. (c) The Issuer makes the following representations and warranties as to the Trust Estate which is granted to the Indenture Trustee hereunder on which the Indenture Trustee relies in accepting the Trust Estate. Such representations and warranties shall survive the grant of the Trust Estate to the Indenture Trustee pursuant to this Indenture. (i) Financed Eligible Loans. Each Financed Eligible Loan acquired by the Issuer shall constitute an Eligible Loan and contain the characteristics found in a Student Loan Transfer Agreement. Notwithstanding the definition of "Eligible Loans" herein, the Issuer covenants not to acquire Eligible Loan delinquent by more than 91 days. In addition, the Issuer covenants that no more than [20]% of each purchase of Eligible Loans will be made up of Eligible Loans delinquent by more than 30 days. (ii) Schedule of Financed Eligible Loans. The information set forth in each Schedule of Financed Eligible Loans is true and correct in all material respects as of the opening of business on the Date of Issuance. (iii) Grant. It is the intention of the Issuer that the transfer herein contemplated constitutes a grant of the Financed Eligible Loans to the Indenture Trustee. (iv) All Filings Made. All filings (including, without limitation, UCC filings) necessary in any jurisdiction to give the Indenture Trustee a first priority perfected ownership and security interest in the Trust Estate, including the Financed Eligible Loans, have been made no later than the Date of Issuance and copies of the file-stamped financing statements shall be delivered to the Indenture Trustee within five Business Days of receipt by the Issuer or its agent from the appropriate secretary of state. The Issuer has not caused, -28- suffered or permitted any lien, pledges, offsets, defenses, claims, counterclaims, charges or security interest with respect to the promissory notes relating to the Financed Eligible Loans (other than the security interest created in favor of the Indenture Trustee) to be created. (v) Transfer Not Subject to Bulk Transfer Act. Each grant of the Financed Eligible Loans by the Issuer pursuant to this Indenture is not subject to the bulk transfer act or any similar statutory provisions in effect in any applicable jurisdiction. (vi) No Transfer Taxes Due. Each grant of the Financed Eligible Loans (including all payments due or to become due thereunder) by the Issuer pursuant to this Indenture is not subject to and will not result in any tax, fee or governmental charge payable by the Issuer or the Depositor to any federal, state or local government. Section 4.14 Additional Covenants. So long as any of the Notes are Outstanding: (a) The Issuer shall not engage in any business or activity other than in connection with the activities contemplated hereby and in the Student Loan Transfer Agreements, and in connection with the issuance of Notes. (b) The Issuer shall not consolidate or merge with or into any other entity or convey or transfer its properties and assets substantially as an entirety to any entity except as otherwise provided herein. (c) The funds and other assets of the Issuer shall not be commingled with those of any other individual, corporation, estate, partnership, joint venture, association, joint stock company, trust, unincorporated organization, or government or any agency or political subdivision thereof. (d) The Issuer shall not be, become or hold itself out as being liable for the debts of any other party. (e) The Issuer shall act solely in its own name and through its duly Authorized Officers in the conduct of its business, and shall conduct its business so as not to mislead others as to the identity of the entity with which they are concerned. (f) The Issuer shall maintain its records and books of account and shall not commingle its records and books of account with the records and books of account of any other Person. The books of the Issuer may be kept (subject to any provision contained in the statutes) inside or outside of Delaware at such place or places as may be designated from time to time by the Issuer. (g) All actions of the Issuer shall be taken by a duly Authorized Officer or agent of the Issuer. -29- (h) The Issuer shall not amend, alter, change or repeal any provision contained in this Section 4.14 without (i) the prior written consent of the Indenture Trustee and (ii) a Rating Confirmation (a copy of which shall be provided to the Indenture Trustee). (i) The Issuer shall not amend the Trust Agreement without first obtaining the prior written consent of each Rating Agency. (j) All audited financial statements of the Issuer that are consolidated with those of any affiliate thereof will contain detailed notes clearly stating that (i) all of the Issuer's assets are owned by the Issuer, and (ii) the Issuer is a separate entity with creditors who have received ownership and/or security interests in the Issuer's assets. (k) The Issuer will strictly observe legal formalities in its dealings with the Depositor or any affiliate thereof, and funds or other assets of the Issuer will not be commingled with those of the Depositor or any other affiliate thereof. The Issuer shall not maintain joint bank accounts or other depository accounts to which the Depositor or any other affiliate has independent access. None of the Issuer's funds will at any time be pooled with any funds of the Depositor or any other affiliate. (l) The Issuer will maintain an arm's length relationship with the Depositor (and any affiliate). Any Person that renders or otherwise furnishes services to the Issuer will be compensated by the Issuer at market rates for such services it renders or otherwise furnishes to the Issuer except as otherwise provided in this Indenture. Except as contemplated in this Indenture or, the Student Loan Transfer Agreements, the Issuer will not hold itself out to be responsible for the debts of the Depositor or the decisions or actions respecting the daily business and affairs of the Depositor. Section 4.15 Providing of Notice. The Issuer, upon learning of any failure on its part to observe or perform in any material respect any covenant, representation or warranty of the Issuer set forth in this Indenture or the Student Loan Transfer Agreements, or of any failure on the part of the Depositor to observe or perform in any material respect any covenant, representation or warranty of the Depositor set forth in the Student Loan Transfer Agreements, shall promptly notify the Indenture Trustee, the Servicer and each Rating Agency of such failure. Section 4.16 Reports by Issuer. The Issuer will: (a) 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 Section 15(d) of the Securities Exchange Act; (b) 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 -30- (c) transmit by mail to the Registered Owners of Notes, within 30 days after the filing thereof with the Indenture Trustee, in the manner and to the extent provided in TIA Section 313(c), such summaries of any information, documents and reports required to be filed by the Issuer pursuant to clauses (a) and (b) of this Section 4.16 as may be required by rules and regulations prescribed from time to time by the Commission. Section 4.17 Statement as to Compliance. The Issuer will deliver to the Indenture Trustee, within 120 days after the end of each fiscal year, a brief certificate from an Authorized Officer as to his or her knowledge of the Issuer's compliance with all conditions and covenants under this Indenture and, in the event of any noncompliance, specifying such noncompliance and the nature and status thereof. For purposes of this Section 4.17, such compliance shall be determined without regard to any period of grace or requirement of notice under this Indenture. Section 4.18 Collection of Indebtedness and Suits for Enforcement by Indenture Trustee. The Issuer covenants that if: (a) default is made in the payment of any installment of interest, if any, on any Notes when such interest becomes due and payable and such default continues for a period of 30 days; or (b) default is made in the payment of the principal of (or premium, if any, on) any Notes at their Maturity, then the Issuer will, upon demand of the Indenture Trustee, pay to the Indenture Trustee, for the benefit of the Registered Owners of the Notes, the whole amount then due and payable on such Notes for principal (and premium, if any) and interest, with interest upon any overdue principal (and premium, if any) and, to the extent that payment of such interest shall be legally enforceable, upon any overdue installments of interest, if any, at the rate or rates borne by or provided for in such Notes, 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. If the Issuer fails to pay such amounts forthwith upon such demand, the Indenture Trustee, in its own name and as Indenture Trustee of an express trust, may institute a judicial proceeding for the collection of the sums so due and unpaid, may prosecute such proceeding to judgment or final decree, and may enforce the same against the Issuer or any other obligor upon such Notes of such series and collect the moneys adjudged or decreed to be payable in the manner provided by law out of the property of the Issuer or any other obligor upon such Notes, wherever situated. If an Event of Default with respect to Notes occurs and is continuing, the Indenture Trustee may, after being indemnified to its satisfaction and in its discretion, proceed to protect and enforce its rights and the rights of the Registered Owners of Notes and any related coupons by such appropriate judicial proceedings as the Indenture Trustee shall deem most effectual 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. -31- ARTICLE V FUNDS Section 5.01 Creation and Continuation of Funds and Accounts. (a) There are hereby created and established the following Funds to be held and maintained by the Indenture Trustee for the benefit of the Registered Owners: (i) Acquisition Fund; (ii) Revenue Fund; and (iii) Reserve Fund. (b) The Operating Fund has previously been established by the Issuer, is hereby continued, does not constitute a Fund within the meaning of this Indenture, and is held by a depository bank of the Issuer for the benefit of the Issuer; and the Registered Owners shall have no right, title or interest therein. The Indenture Trustee is hereby authorized for the purpose of facilitating the administration of the Trust Estate and for the administration of any Notes issued hereunder to create further Accounts or Subaccounts in any of the various Funds and Accounts established hereunder which are deemed necessary or desirable. Section 5.02 Acquisition Fund. There shall be deposited into the Acquisition Fund moneys from proceeds of any Notes and moneys transferred thereto from the Revenue Fund pursuant to Section 5.03(c) hereof. Financed Eligible Loans shall be held by the Indenture Trustee or its agent or bailee (including the Servicer) and shall be pledged to the Trust Estate and accounted for as a part of the Acquisition Fund. Moneys on deposit in the Acquisition Fund shall be used, upon Issuer Order, solely to pay costs of issuance of the Notes, to redeem Notes in accordance with the provisions of any Supplemental Indenture, and, upon receipt by the Indenture Trustee of an Eligible Loan Acquisition Certificate, to acquire Eligible Loans at a price which would permit the results of cash flow analyses provided to each Rating Agency on any Date of Issuance to be sustained as certified to the Indenture Trustee on the Eligible Loan Acquisition Certificate; provided that such price may be increased if Rating Confirmation is obtained, based on new cash flow analyses containing such assumptions as the Issuer shall reasonably determine. Any such Issuer Order or Eligible Loan Acquisition Certificate shall state that such proposed use of moneys in the Acquisition Fund is in compliance with the provisions of this Indenture. If the Issuer determines that all or any portion of such moneys cannot be so used, then an Authorized Officer of the Issuer may, by Issuer Order, direct the Indenture Trustee to redeem Notes in accordance with any Supplemental Indenture. Notwithstanding the foregoing, if on any Note Payment Date there are not sufficient moneys on deposit in the Revenue Fund to make the transfers required by Section 5.03(d)(i) through (vii) hereof, then, an amount equal to any such deficiency may, upon Issuer Order, be transferred directly from the Acquisition Fund. -32- While the Issuer will be the beneficial owner of the Financed Eligible Loans and the Registered Owners will have a security interest therein, it is understood and agreed that the Eligible Lender Trustee will be the legal owner thereof and the Indenture Trustee will have a security interest in the Financed Eligible Loans for and on behalf of the Registered Owners. The notes representing the Financed Eligible Loans will be held in the name of the Eligible Lender Trustee for the account of the Issuer, for the benefit of the Registered Owners. Section 5.03 Revenue Fund. (a) The Indenture Trustee shall deposit into the Revenue Fund all Revenues derived from Financed Eligible Loans acquired by the Issuer, and all other Revenue derived from moneys or assets on deposit in the Acquisition Fund and the Reserve Fund, all Counterparty Derivative Payments and any other amounts deposited thereto upon receipt of an Issuer Order. (b) Upon receipt of an Issuer Order directing the same, moneys in the Revenue Fund shall be used, on any date, to make a transfer to the Operating Fund, subject to Section 5.05 hereof. (c) All Recoveries of Principal constituting a portion of the Revenue deposited in the Revenue Fund and so identified to the Indenture Trustee, shall be transferred, as soon as practicable, to the Acquisition Fund. (d) In addition, on each Note Payment Date and Derivative Payment Date, money in the Revenue Fund shall be used and transferred to other funds or Persons in the following order of precedence (any money not so transferred or paid to remain in the Revenue Fund until subsequently applied pursuant to this Section 5.03(d)): (i) on a parity basis, to pay interest due on any Senior Notes on such Note Payment Date and any Issuer Derivative Payment secured on a parity with the Senior Notes due on such Derivative Payment Date; (ii) on a parity basis, to pay the principal of or premium, if any, on any Senior Notes due on such Note Payment Date (if such Note Payment Date is a Stated Maturity or mandatory sinking fund redemption date with respect to such Senior Notes); (iii) on a parity basis, to pay interest due on any Subordinate Notes on such Note Payment Date and any Issuer Derivative Payment secured on a parity with the Subordinate Notes due on such Derivative Payment Date; (iv) on a parity basis, to pay the principal of or premium, if any, on any Subordinate Notes due on such Note Payment Date (if such Note Payment Date is a Stated Maturity or mandatory sinking fund redemption date with respect to such Subordinate Notes); -33- (v) on a parity basis, to pay interest on Junior-Subordinate Notes on such Note Payment Date and to make any Issuer Derivative Payment secured on a parity with such Junior-Subordinate Notes due on such Derivative Payment Date; (vi) on a parity basis, to pay the principal of or premium, if any, on any Junior-Subordinate Notes due on such Note Payment Date (if such Note Payment Date is a Stated Maturity or mandatory sinking fund redemption date with respect to such Junior-Subordinate Notes); (vii) to the Reserve Fund the amount, if any, required by Section 5.04(b) hereof; (viii) at the option of the Issuer and upon Issuer Order, to the Acquisition Fund; and (ix) at the option of the Issuer and upon Issuer Order, to the Issuer to the extent permitted by Section 5.06 hereof. Section 5.04 Reserve Fund. (a) The Indenture Trustee shall deposit to the Reserve Fund the amount, if any, specified in each Supplemental Indenture. On each Note Payment Date, to the extent there are insufficient moneys in the Revenue Fund to make the transfers required by Sections 5.03(d)(i) through (vi) hereof, then, the amount of such deficiency shall be paid directly from the Reserve Fund if such deficiency has not been paid from the Acquisition Fund. (b) If the Reserve Fund is used for the purposes described in Section 5.04(a) hereof, the Indenture Trustee shall restore the Reserve Fund to the Reserve Fund Requirement with respect thereto by transfers from the Revenue Fund on the next Note Payment Date pursuant to Section 5.03(d)(vii) hereof or from the Acquisition Fund pursuant to Section 5.02 hereof. If the full amount required to restore the Reserve Fund to the applicable Reserve Fund Requirement is not available in the Revenue Fund on such next succeeding Note Payment Date, the Indenture Trustee shall continue to transfer funds from the Revenue Fund as they become available and in accordance with Section 5.03(d)(vii) hereof until the deficiency in the Reserve Fund has been eliminated. (c) On any day that the amount in the Reserve Fund exceeds the Reserve Fund Requirement with respect thereto for any reason, the Indenture Trustee, at the direction of the Issuer, shall transfer the excess to the Acquisition Fund. Section 5.05 Operating Fund. The Indenture Trustee shall deposit to the Operating Fund or transfer to the Issuer's depository bank if not the Indenture Trustee, the amount, if any, specified in each Supplemental Indenture. The Operating Fund is a special fund created with a depository bank of the Issuer and shall be used to pay Program Expenses. The Operating Fund shall be held by such depository bank of the Issuer, and no Registered Owner shall have any right, title or interest in the Operating Fund. Amounts deposited in the Operating Fund shall be used to pay Program Expenses. -34- The amount deposited in the Operating Fund by transfer from the Revenue Fund and, if necessary, from the Acquisition Fund, and the schedule of deposits shall be determined by the Issuer, but the amount so transferred in any one Fiscal Year shall not exceed the amount budgeted by the Issuer as Program Expenses for such Fiscal Year with respect to the Notes and as may be limited by a Supplemental Indenture, and shall not exceed the amount designated therefor in the cash flows provided to each Rating Agency on each Date of Issuance, unless the Issuer, after furnishing each Rating Agency with revised cash flows, shall have received a Rating Confirmation. The Issuer shall provide the Indenture Trustee with an Issuer Order from time to time as to the amount to be transferred. At any time in order to meet expenses which have been incorporated in an amended budget, the Issuer may requisition from the Indenture Trustee the amount which it is anticipated will be required to pay the Program Expenses not in excess of the amount budgeted with respect to the Notes for the period to the next deposit into the Operating Fund. The requisition, in the form of an Issuer Order, shall include a statement that the amount requisitioned, when combined with the amount requisitioned previously in the Fiscal Year, does not exceed the amount currently budgeted for that year as Program Expenses or as may be further limited by a Supplemental Indenture. Upon the receipt of such requisition, the Indenture Trustee shall withdraw the amount requisitioned from the Revenue Fund, and if necessary, from the Acquisition Fund (or so much thereof as is then on deposit in such Funds) and transfer the same into the Operating Fund. The Issuer may request that the Indenture Trustee pay the requisitioned amount in installments as specified by the Issuer. In the event there is not sufficient money on hand in the Revenue Fund and the Acquisition Fund to transfer the full amount requisitioned, the Indenture Trustee shall notify the Issuer and the Issuer shall then determine the amount to be transferred. Section 5.06 Transfers to Issuer. Transfers from the Revenue Fund to the Issuer may be made in accordance with Section 5.03(d)(ix) hereof; provided, however, that no transfer of assets to the Issuer (other than pursuant to the Operating Fund as otherwise permitted in Article V of the Indenture) shall be made if there is not on deposit in the Reserve Fund an amount equal to at least the Reserve Fund Requirement; and further provided, that no transfer shall be made to the Issuer unless immediately after taking into account any such transfer, the Aggregate Market Value of the assets in the Trust Estate will be equal to at least [___]% of the unpaid principal amount of the Senior Notes Outstanding and [___]% of all Senior and Subordinate Notes Outstanding, or such lesser percentages as are acceptable to each Rating Agency then rating the Notes, as evidenced by a Rating Confirmation. The amounts so transferred to the Issuer may be used for any proper purpose of the Issuer and investment earnings thereon shall be the property of the Issuer. Section 5.07 Investment of Funds Held by Indenture Trustee. The Indenture Trustee shall invest money held for the credit of any Fund or Account or Subaccount held by the Indenture Trustee hereunder as directed in writing (or orally, confirmed in writing) by an Authorized Officer of the Issuer, to the fullest extent practicable and reasonable, in Investment Securities which shall mature or be redeemed at the option of the holder prior to the respective dates when the money held for the credit of such Fund or Account will be required for the purposes intended. In the absence of any such direction and to the extent -35- practicable, the Indenture Trustee shall invest amounts held hereunder in those Investment Securities described in clause (a) of the definition of the Investment Securities. The Indenture Trustee and the Issuer hereby agree that unless an Event of Default shall have occurred hereunder, the Issuer acting by and through an Authorized Officer shall be entitled to, and shall, provide written direction or oral direction confirmed in writing to the Indenture Trustee with respect to any discretionary acts required or permitted of the Indenture Trustee under any Investment Securities and the Indenture Trustee shall not take such discretionary acts without such written direction. The Investment Securities purchased shall be held by the Indenture Trustee and shall be deemed at all times to be part of such Fund or Account or Subaccounts or combination thereof, and the Indenture Trustee shall inform the Issuer of the details of all such investments. Upon direction in writing (or orally, confirmed in writing) from an Authorized Officer of the Issuer, the Indenture Trustee shall use its best efforts to sell at the best price obtainable, or present for redemption, any Investment Securities purchased by it as an investment whenever it shall be necessary to provide money to meet any payment from the applicable Fund. The Indenture Trustee shall advise the Issuer in writing, on or before the fifteenth day of each calendar month (or such later date as reasonably consented to by the Issuer), of all investments held for the credit of each Fund in its custody under the provisions of this Indenture as of the end of the preceding month and the value thereof, and shall list any investments which were sold or liquidated for less than their Value at the time thereof. Money in any Fund constituting a part of the Trust Estate may be pooled for the purpose of making investments and may be used to pay accrued interest on Investment Securities purchased. The Indenture Trustee and its affiliates may act as principal or agent in the acquisition or disposition of any Investment Securities. Notwithstanding the foregoing, the Indenture Trustee shall not be responsible or liable for any losses on investments made by it hereunder or for keeping all Funds held by it, fully invested at all times, its only responsibility being to comply with the investment instructions of the Issuer or its designee in a non-negligent manner. The Issuer acknowledges that to the extent the regulations of the Comptroller of the Currency or other applicable regulatory agency grant the Issuer the right to receive brokerage confirmations of security transactions, the Issuer waives receipt of such confirmations. Section 5.08 Release. The Indenture Trustee shall, upon Issuer Order and subject to the provisions of this Indenture, take all actions reasonably necessary to effect the release of any Financed Eligible Loans from the lien of this Indenture to the extent the terms hereof permit the sale, disposition or transfer of such Financed Eligible Loans. Section 5.09 Purchase of Notes. Pursuant to this Indenture, any amounts held under this Indenture which are available to redeem Notes may instead be used to purchase Notes outstanding under this Indenture at the same times and subject to the same conditions (except as to price) as apply to the redemption of Notes. -36- ARTICLE VI DEFAULTS AND REMEDIES Section 6.01 Events of Default Defined. For the purpose of this Indenture, the following events are hereby defined as, and are declared to be, "Events of Default": (a) default in the due and punctual payment of the principal of or interest on any of the Senior Notes when due or failure to make any payment due under any other Senior Obligations when due; (b) if no Senior Obligations are Outstanding hereunder, default in the due and punctual payment of the principal of or interest on any of the Subordinate Notes when due or failure to make any payment due under any other Subordinate Obligations when due; (c) if no Senior Obligations or Subordinate Obligations are Outstanding hereunder, default in the due and punctual payment of the principal of or interest on any of the Junior-Subordinate Notes when due or failure to make any payment due under any other Junior-Subordinate Obligations when due; (d) failure to make any payment due under any other Junior-Subordinate Obligations under this Indenture when due; (e) default in the performance or observance of any other of the covenants, agreements, or conditions on the part of the Issuer to be kept, observed, and performed contained in this Indenture or in the Notes, and continuation of such default for a period of 90 days after written notice thereof by the Indenture Trustee to the Issuer; and (f) the occurrence of an Event of Bankruptcy. Any notice herein provided to be given to the Issuer with respect to any default shall be deemed sufficiently given if sent by registered mail with postage prepaid to the Person to be notified, addressed to such Person at the post office address as shown in Section 9.01 of this Indenture or such other address as may hereafter be given as the principal office of the Issuer in writing to the Indenture Trustee by an Authorized Officer of the Issuer. The Indenture Trustee may give any such notice in its discretion and shall give such notice if requested to do so in writing by the Registered Owners of at least a majority of the collective aggregate principal amount of the Highest Priority Obligations at the time Outstanding ("Registered Owner Approval"). Section 6.02 Remedy on Default; Possession of Trust Estate. Subject to Section 6.09 hereof, upon the happening and continuance of any Event of Default, the Indenture Trustee personally or by its attorneys or agents may enter into and upon and take possession of such portion of the Trust Estate as shall be in the custody of others, and all property comprising the Trust Estate, and each and every part thereof, and exclude the Issuer and its agents, servants, and employees wholly therefrom, and have, hold, use, operate, manage, and control the same and each and every part thereof, and in the name of the Issuer or otherwise, as they shall deem best, conduct the business thereof and exercise the privileges pertaining thereto and all the rights and powers of the Issuer and use all of the then existing Trust Estate for that purpose, and collect and receive all charges, income and Revenue of the same and of every -37- part thereof, and after deducting therefrom all expenses incurred hereunder and all other proper outlays herein authorized, and all payments which may be made as just and reasonable compensation for its own services, and for the services of its attorneys, agents, and assistants, the Indenture Trustee shall apply the rest of the money received by the Indenture Trustee as follows: (a) if the principal of none of the Obligations shall have become due, first, to the payment of the interest in default on the Senior Notes and to the payment of all Issuer Derivative Payments secured on a parity with the Senior Notes then due, in order of the maturity of the installments thereof, with interest on the overdue installments thereof at the same rates, respectively, as were borne by the Senior Notes on which such interest shall be in default and any such Issuer Derivative Payments as provided in the ISDA Master Agreement then due, such payments to be made ratably to the parties entitled thereto without discrimination or preference, second, to the payment of the interest in default on the Subordinate Notes and to the payment of all Issuer Derivative Payments secured on a parity with the Subordinate Notes then due, in order of the maturity of the installments of such interest and any such Issuer Derivative Payments, with interest on the overdue installments thereof at the same rates, respectively, as were borne by the Subordinate Notes on which such interest shall be in default and any such Issuer Derivative Payments then due, such payments to be made ratably to the parties entitled thereto without discrimination or preference and, third, to the payment of the interest in default on the Junior-Subordinate Notes and to the payment of all Issuer Derivative Payments secured on a parity with such Junior-Subordinate Notes then due, in order of the maturity of the installments of such interest and any such Issuer Derivative Payments, with interest on the overdue installments thereof at the same rates, respectively, as were borne by the Junior-Subordinate Notes on which such interest shall be in default and any such Issuer Derivative Payments then due, such payments to be made ratably to the parties entitled thereto without discrimination or preference, except as may be provided in a Supplemental Indenture; and (b) if the principal of any of the Obligations shall have become due by declaration of acceleration or otherwise, first to the payment of the interest in default on the Senior Notes and all Issuer Derivative Payments secured on a parity with the Senior Notes then due, in the order of the maturity of the installments thereof, with interest on overdue installments thereof at the same rates, respectively, as were borne by the Senior Notes on which such interest shall be in default and such Issuer Derivative Payments as provided in the ISDA Master Agreement then due, as the case may be, second, to the payment of the principal of all Senior Notes then due and any amount owed to a Counterparty secured on a parity with Senior Obligations under the ISDA Master Agreement, such payments to be made ratably to the parties entitled thereto without discrimination or preference, third, to the payment of the interest in default on the Subordinate Notes and all Issuer Derivative Payments secured on a parity with the Subordinate Notes then due, in the order of the maturity of the installments thereof with interest on overdue installments thereof at the same rates, respectively, as were borne by the Subordinate Notes on which such interest shall be in default and such Issuer Derivative Payments as provided in the ISDA Master Agreement then due, as the case may be, fourth, to the payment of the principal of all Subordinate Notes then due and any amount owed to a Counterparty secured on a parity with Subordinate Obligations under the ISDA Master Agreement, such payments to be made ratably to the parties entitled thereto without discrimination or preference, fifth, to the payment of the interest in default on the Junior-Subordinate Notes and all Issuer Derivative Payments secured on a parity with such Junior-Subordinate Notes then due, in the -38- order of the maturity of the installments thereof, with interest on overdue installments thereof at the same rates, respectively, as were borne by the Junior-Subordinate Notes on which such interest shall be in default and such Issuer Derivative Payments as provided in the ISDA Master Agreement then due, as the case may be, and sixth, to the payment of the principal of all Junior-Subordinate Notes then due and any amount owed to a Counterparty secured on a parity with Junior-Subordinate Obligations under the ISDA Master Agreement, such payments to be made ratably to the parties entitled thereto without discrimination or preference, except as may be provided in a Supplemental Indenture. Section 6.03 Remedies on Default; Advice of Counsel. Upon the happening of any Event of Default, the Indenture Trustee may proceed to protect and enforce the rights of the Indenture Trustee and the Registered Owners in such manner as counsel for the Indenture Trustee may advise, whether for the specific performance of any covenant, condition, agreement or undertaking herein contained, or in aid of the execution of any power herein granted, or for the enforcement of such other appropriate legal or equitable remedies as, in the opinion of such counsel, may be more effectual to protect and enforce the rights aforesaid. Section 6.04 Remedies on Default; Sale of Trust Estate. Upon the happening of any Event of Default and if the principal of all of the Outstanding Obligations shall have been declared due and payable, then and in every such case, and irrespective of whether other remedies authorized shall have been pursued in whole or in part, the Indenture Trustee may sell, with or without entry, to the highest bidder the Trust Estate, and all right, title, interest, claim and demand thereto and the right of redemption thereof, at any such place or places, and at such time or times and upon such notice and terms as may be required by law. Upon such sale the Indenture Trustee may make and deliver to the purchaser or purchasers a good and sufficient assignment or conveyance for the same, which sale shall be a perpetual bar both at law and in equity against the Issuer and all Persons claiming such properties. No purchaser at any sale shall be bound to see to the application of the purchase money or to inquire as to the authorization, necessity, expediency or regularity of any such sale. The Indenture Trustee is hereby irrevocably appointed the true and lawful attorney-in-fact of the Issuer, in its name and stead, to make and execute all bills of sale, instruments of assignment and transfer and such other documents of transfer as may be necessary or advisable in connection with a sale of all or part of the Trust Estate, but the Issuer, if so requested by the Indenture Trustee, shall ratify and confirm any sale or sales by executing and delivering to the Indenture Trustee or to such purchaser or purchasers all such instruments as may be necessary, or in the judgment of the Indenture Trustee, proper for the purpose which may be designated in such request. In addition, the Indenture Trustee may proceed to protect and enforce the rights of the Indenture Trustee and the Registered Owners of the Obligations in such manner as counsel for the Indenture Trustee may advise, whether for the specific performance of any covenant, condition, agreement or undertaking herein contained, or in aid of the execution of any power herein granted, or for the enforcement of such other appropriate legal or equitable remedies as may in the opinion of such counsel, be more effectual to protect and enforce the rights aforesaid. The Indenture Trustee shall take any such action or actions if requested to do so in writing by the Registered Owners of at least a majority of the collective aggregate principal amount of the Highest Priority Obligations at the time Outstanding. -39- Section 6.05 Appointment of Receiver. In case an Event of Default occurs, and if all of the Outstanding Obligations shall have been declared due and payable and in case any judicial proceedings are commenced to enforce any right of the Indenture Trustee or of the Registered Owners under this Indenture or otherwise, then as a matter of right, the Indenture Trustee shall be entitled to the appointment of a receiver of the Trust Estate and of the earnings, income or Revenue, rents, issues and profits thereof with such powers as the court making such appointments may confer. Section 6.06 Restoration of Position. In case the Indenture Trustee shall have proceeded to enforce any rights under this Indenture by sale or otherwise, and such proceedings shall have been discontinued, or shall have been determined adversely to the Indenture Trustee, then and in every such case to the extent not inconsistent with such adverse decree, the Issuer, the Indenture Trustee and the Registered Owners shall be restored to their former respective positions and the rights hereunder in respect to the Trust Estate, and all rights, remedies, and powers of the Indenture Trustee and of the Registered Owners shall continue as though no such proceeding had been taken. Section 6.07 Purchase of Properties by Indenture Trustee or Registered Owners. In case of any such sale of the Trust Estate, any Registered Owner or Registered Owners or committee of Registered Owners or the Indenture Trustee, may bid for and purchase such property and upon compliance with the terms of sale may hold, retain possession, and dispose of such property as the absolute right of the purchaser or purchasers without further accountability and shall be entitled, for the purpose of making any settlement or payment for the property purchased, to use and apply any Obligations hereby secured and any interest thereon due and unpaid, by presenting such Obligations in order that there may be credited thereon the sum apportionable and applicable thereto out of the net proceeds of such sale, and thereupon such purchaser or purchasers shall be credited on account of such purchase price payable to him or them with the sum apportionable and applicable out of such net proceeds to the payment of or as a credit on the Obligations so presented. Section 6.08 Application of Sale Proceeds. The proceeds of any sale of the Trust Estate, together with any funds at the time held by the Indenture Trustee and not otherwise appropriated, shall be applied by the Indenture Trustee as set forth in Section 6.02 hereof, and then to the Issuer or whomsoever shall be lawfully entitled thereto. Section 6.09 Accelerated Maturity. If an Event of Default shall have occurred and be continuing, the Indenture Trustee may declare, or upon the written direction by the Registered Owners of at least a majority of the collective aggregate principal amount of the Highest Priority Obligations then Outstanding, shall declare, the principal of all Obligations then Outstanding, and the interest thereon, if not previously due, immediately due and payable, anything in the Obligations or this Indenture to the contrary notwithstanding; provided, however, that for a declaration of acceleration upon a default pursuant to Section 6.01(d) hereof shall require the consent of 100% of the Registered Owners of the collective aggregate principal amount of the Highest Priority Obligations then Outstanding. -40- Section 6.10 Remedies Not Exclusive. The remedies herein conferred upon or reserved to the Indenture Trustee or the Registered Owners of Obligations are not intended to be exclusive of any other remedy, but each remedy herein provided shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing, and every power and remedy hereby given to the Indenture Trustee or to the Registered Owners of Obligations, or any supplement hereto, may be exercised from time to time as often as may be deemed expedient. No delay or omission of the Indenture Trustee or of any Registered Owner of Obligations to exercise any power or right arising from any default hereunder shall impair any such right or power or shall be construed to be a waiver of any such default or to be acquiescence therein. Section 6.11 Direction of Indenture Trustee. Upon the happening of any Event of Default, the Registered Owners of at least a majority of the collective aggregate principal amount of the Highest Priority Obligations then Outstanding, shall have the right by an instrument or instruments in writing delivered to the Indenture Trustee to direct and control the Indenture Trustee as to the method of taking any and all proceedings for any sale of any or all of the Trust Estate, or for the appointment of a receiver, if permitted by law, and may at any time cause any proceedings authorized by the terms hereof to be so taken or to be discontinued or delayed; provided, however, that such Registered Owners shall not be entitled to cause the Indenture Trustee to take any proceedings which in the Indenture Trustee's opinion would be unjustly prejudicial to non-assenting Registered Owners of Obligations, but the Indenture Trustee shall be entitled to assume that the action requested by the Registered Owners of at least a majority of the collective aggregate principal amount of the Highest Priority Obligations then Outstanding will not be prejudicial to any non-assenting Registered Owners unless the Registered Owners of more than 50% of the collective aggregate principal amount of the non-assenting Registered Owners of such Obligations, in writing, show the Indenture Trustee how they will be prejudiced. Anything in this Indenture to the contrary notwithstanding, the Registered Owners of a majority of the collective aggregate principal amount of the Highest Priority Obligations then Outstanding together with the Registered Owners of a majority of the collective aggregate principal amount of all other Obligations then Outstanding shall have the right, at any time, by an instrument or instruments in writing executed and delivered to the Indenture Trustee, to direct the method and place of conducting all proceedings to be taken in connection with the enforcement of the terms and conditions of this Indenture, or for the appointment of a receiver or any other proceedings hereunder, provided that such direction shall not be otherwise than in accordance with the provisions of law and of this Indenture. The provisions of this Section 6.11 shall be expressly subject to the provisions of Sections 7.01(c) and 7.05 hereof. Section 6.12 Right to Enforce in Indenture Trustee. No Registered Owner of any Obligation shall have any right as such Registered Owner to institute any suit, action, or proceedings for the enforcement of the provisions of this Indenture or for the execution of any trust hereunder or for the appointment of a receiver or for any other remedy hereunder, all rights of action hereunder being vested exclusively in the Indenture Trustee, unless and until such Registered Owner shall have previously given to the Indenture Trustee written notice of a default hereunder, and of the continuance thereof, and also unless the Registered Owners of the requisite principal amount of the Obligations then Outstanding shall have made written request upon the Indenture Trustee and the Indenture Trustee shall have been afforded reasonable opportunity to institute such action, suit or proceeding in its own name, and unless the Indenture Trustee shall have been offered indemnity and security satisfactory to it against the costs, expenses, and liabilities to be incurred -41- therein or thereby, which offer of indemnity shall be an express condition precedent hereunder to any obligation of the Indenture Trustee to take any such action hereunder, and the Indenture Trustee for 30 days after receipt of such notification, request, and offer of indemnity, shall have failed to institute any such action, suit or proceeding. It is understood and intended that no one or more Registered Owners of the Obligations shall have the right in any manner whatever by his or their action to affect, disturb, or prejudice the lien of this Indenture or to enforce any right hereunder except in the manner herein provided and for the equal benefit of the Registered Owners of not less than a majority of the collective aggregate principal amount of the Obligations then Outstanding. Section 6.13 Physical Possession of Obligations Not Required. In any suit or action by the Indenture Trustee arising under this Indenture or on all or any of the Obligations issued hereunder, or any supplement hereto, the Indenture Trustee shall not be required to produce such Obligations, but shall be entitled in all things to maintain such suit or action without their production. Section 6.14 Waivers of Events of Default. The Indenture Trustee may in its discretion waive any Event of Default hereunder and its consequences and rescind any declaration of acceleration of Obligations, and shall do so upon the written request of the Registered Owners of at least a majority of the collective aggregate principal amount of the Highest Priority Obligations then Outstanding; provided, however, that there shall not be waived (a) any Event of Default in the payment of the principal of or premium on any Outstanding Obligations at the date of maturity or redemption thereof, or any default in the payment when due of the interest on any such Obligations, unless prior to such waiver or rescission, all arrears of interest or all arrears of payments of principal and premium, if any, and all expenses of the Indenture Trustee, in connection with such default shall have been paid or provided for or (b) any default in the payment of amounts set forth in Section 7.05 hereof. In case of any such waiver or rescission, or in case any proceedings taken by the Indenture Trustee on account of any such default shall have been discontinued or abandoned or determined adversely to the Indenture Trustee, then and in every such case the Issuer, the Indenture Trustee and the Registered Owners of Obligations shall be restored to their former positions and rights hereunder respectively, but no such waiver or rescission shall extend to or affect any subsequent or other default, or impair any rights or remedies consequent thereon. ARTICLE VII THE INDENTURE TRUSTEE Section 7.01 Acceptance of Trust. The Indenture Trustee hereby accepts the trusts imposed upon it by this Indenture, and agrees to perform said trusts, but only upon and subject to the following terms and conditions: (a) 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 -42- (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; but in the case of any such certificates or opinions which by any provisions hereof are specifically required to be furnished to the Indenture Trustee, the Indenture Trustee shall be under a duty to examine the same to determine whether or not they conform as to form with the requirements of this Indenture and whether or not they contain the statements required under this Indenture. (b) In case an Event of Default has occurred and is continuing, the Indenture Trustee, in exercising the rights and powers vested in it by this Indenture, shall 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 his or her own affairs. (c) Before taking any action hereunder requested by Registered Owners, the Indenture Trustee may require that it be furnished an indemnity bond or other indemnity and security satisfactory to it by the Registered Owners, as applicable, for the reimbursement of all expenses to which it may be put and to protect it against all liability. Section 7.02 Recitals of Others. The recitals, statements, and representations set forth herein and in the Notes shall be taken as the statements of the Issuer, and the Indenture Trustee assumes no responsibility for the correctness of the same. The Indenture Trustee makes no representations as to the title of the Issuer in the Trust Estate or as to the security afforded thereby and hereby, or as to the validity or sufficiency of this Indenture or of the Notes issued hereunder, and the Indenture Trustee shall incur no responsibility in respect of such matters. Section 7.03 As to Filing of Indenture. The Indenture Trustee shall be under no duty (a) to file or record, or cause to be filed or recorded, this Indenture or any instrument supplemental hereto, (b) or to procure any further order or additional instruments of further assurance, (c) to see to the delivery to it of any personal property intended to be mortgaged or pledged hereunder or thereunder, (d) or to do any act which may be suitable to be done for the better maintenance of the lien or security hereof (other than the filing of any continuation (but not initial) statements), or (e) for giving notice of the existence of such lien, or for extending or supplementing the same or to see that any rights to Revenue and Funds intended now or hereafter to be transferred in trust hereunder are subject to the lien hereof. The Indenture Trustee shall not be liable for failure of the Issuer to pay any tax or taxes in respect of such property, or any part thereof, or the income therefrom or otherwise, nor shall the Indenture Trustee be under any duty in respect of any tax which may be assessed against it or the Registered Owners in respect of such property or pledged Revenue and Funds. The Indenture Trustee agrees to prepare, request that the Issuer execute (if such execution is necessary for any such filing) and file in a timely manner (if received from the Issuer in a timely manner) with any necessary execution by the Issuer, the continuation statements referred to herein; provided, that the Indenture Trustee shall have no responsibility for the sufficiency, adequacy or priority of any initial filing and in the absence of written notice to the contrary by the Issuer or other Authorized Officer, may rely and shall be protected in relying on all information and exhibits in such initial filings for the purposes of any continuation statements. -43- Section 7.04 Indenture Trustee May Act Through Agents. The Indenture Trustee may execute any of the trusts or powers hereof and perform any duty hereunder, either itself or by or through its attorneys, agents, or employees, and it shall not be answerable or accountable for any default, neglect, or misconduct of any such attorneys, agents, or employees, if reasonable care has been exercised in the appointment, supervision, and monitoring of the work performed. All reasonable costs incurred by the Indenture Trustee and all reasonable compensation to all such persons as may reasonably be employed in connection with the trusts hereof shall be paid by the Issuer. Section 7.05 Indemnification of Indenture Trustee. Other than with respect to its duties to make payment on the Obligations when due, and its duty to pursue the remedy of acceleration as provided in Section 6.02 hereof, for each of which no additional security or indemnity may be required, the Indenture Trustee shall be under no obligation or duty to perform any act at the request of Registered Owners or to institute or defend any suit in respect thereof unless properly indemnified and provided with security to its satisfaction as provided in Section 7.01(c) hereof. The Indenture Trustee shall not be required to take notice, or be deemed to have knowledge, of any default or Event of Default of the Issuer hereunder and may conclusively assume that there has been no such default or Event of Default (other than an Event of Default described in Sections 6.01(a), (b), (c), or (d) hereof) unless and until it shall have been specifically notified in writing at the address in Section 9.01 hereof of such default or Event of Default by (a) the Registered Owners of the required percentages in principal amount of the Obligations then Outstanding hereinabove specified or (b) an Authorized Officer of the Issuer. However, the Indenture Trustee may begin suit, or appear in and defend suit, execute any of the trusts hereby created, enforce any of its rights or powers hereunder, or do anything else in its judgment proper to be done by it as Indenture Trustee, without assurance of reimbursement or indemnity, and in such case the Indenture Trustee shall be reimbursed or indemnified by the Registered Owners requesting such action, if any, or the Issuer in all other cases, for all fees, costs and expenses, liabilities, outlays and counsel fees and other reasonable disbursements properly incurred in connection therewith, unless such costs and expenses, liabilities, outlays and attorneys' fees and other reasonable disbursements properly incurred in connection therewith are adjudicated to have resulted from the negligence or willful misconduct of the Indenture Trustee. In furtherance and not in limitation of this Section 7.05, the Indenture Trustee shall not be liable for, and shall be held harmless by the Issuer from, following any orders, instructions or other directions upon which the Indenture Trustee is authorized to rely pursuant to this Indenture or any other agreement to which it is a party. If the Issuer or the Registered Owners, as appropriate, shall fail to make such reimbursement or indemnification, the Indenture Trustee may reimburse itself from any money in its possession under the provisions of this Indenture, subject only to the prior lien of the Notes for the payment of the principal thereof, premium, if any, and interest thereon from the Revenue Fund. None of the provisions contained in this Indenture or any other Agreement to which it is a party shall require the Indenture Trustee to act or to expend or risk its own funds or otherwise incur individual financial liability in the performance of any of its duties or in the exercise of any of its rights or powers if the Registered Owners shall not have offered security and indemnity acceptable to it or if it shall have reasonable grounds for believing that prompt repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. -44- The Issuer agrees to indemnify and hold harmless the Indenture Trustee against any and all claims, demands, suits, actions or other proceedings and all liabilities, costs and expenses whatsoever caused by any untrue statement or misleading statement or alleged untrue statement or alleged misleading statement of a material fact contained in any offering document distributed in connection with the issuance of the Notes or caused by any omission or alleged omission from such offering document of any material fact required to be stated therein or necessary in order to make the statements made therein in the light of the circumstances under which they were made, not misleading. Section 7.06 Indenture Trustee's Right to Reliance. The Indenture Trustee shall be protected in acting upon any notice, resolution, request, consent, order, certificate, report, appraisal, opinion, report or document of the Issuer or the Servicer or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties. The Indenture Trustee may consult with experts and with counsel (who may, but need not, be counsel for the Issuer, the Indenture Trustee, or for a Registered Owner), and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered, and in respect of any determination made by it hereunder in good faith and in accordance with the opinion of such counsel. Whenever in the administration hereof the Indenture Trustee shall reasonably deem it desirable that a matter be proved or established prior to taking, suffering, or omitting any action hereunder, the Indenture Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, rely upon a certificate signed by an Authorized Officer of the Issuer or an authorized officer of the Servicer. The Indenture Trustee shall not be liable for any action taken, suffered, or omitted by it in good faith and believed by it to be authorized or within the discretion or rights or powers conferred upon it hereby; provided, however, that the Indenture Trustee shall be liable for its negligence or willful misconduct in taking such action. The Indenture Trustee is authorized, under this Indenture, subject to Section 4.12 hereof, to sell, assign, transfer or convey Financed Eligible Loans in accordance with an Issuer Order. If such Financed Eligible Loan was originated under the Act, such Issuer Order shall certify that the Person to whom such Financed Eligible Loan is sold, assigned, transferred, or conveyed is an Eligible Lender unless not required by the Act. The Indenture Trustee is further authorized to enter into agreements with other Persons, in its capacity as Indenture Trustee, in order to carry out or implement the terms and provisions of this Indenture. Section 7.07 Compensation of Indenture Trustee. Except as otherwise expressly provided herein, all advances, counsel fees and other expenses reasonably made or incurred by the Indenture Trustee in and about the execution and administration of the trust hereby created and reasonable compensation to the Indenture Trustee for its services in the premises shall be paid by the Issuer. The compensation of the Indenture Trustee shall not be limited to or by any provision of law in regard to the compensation of trustees of an express trust. If not paid by the Issuer, the Indenture Trustee shall have a lien against all money held pursuant to this Indenture, subject only to the prior lien of the Obligations against the money and investments in the Revenue Fund for the payment of the principal thereof, premium, if any, and interest thereon, -45- for such reasonable compensation, expenses, advances and counsel fees incurred in and about the execution of the trusts hereby created and the exercise and performance of the powers and duties of the Indenture Trustee hereunder and the cost and expense incurred in defending against any liability in the premises of any character whatsoever (unless such liability is adjudicated to have resulted from the negligence or willful misconduct of the Indenture Trustee). Section 7.08 Indenture Trustee May Own Notes. The Indenture Trustee hereunder, or any successor Indenture Trustee, in its individual or other capacity, may become the owner or pledgee of Notes and may otherwise deal with the Issuer, with the same rights it would have if it were not the Indenture Trustee. The Indenture Trustee may act as depository for, and permit any of its officers or directors to act as a member of, or act in any other capacity in respect to, any committee formed to protect the rights of the Registered Owners or to effect or aid in any reorganization growing out of the enforcement of the Notes or of this Indenture, whether or not any such committee shall represent the Registered Owners of more than 60% of the collective aggregate principal amount of the Outstanding Obligations. Section 7.09 Resignation of Indenture Trustee. The Indenture Trustee and any successor to the Indenture Trustee may resign and be discharged from the trust created by this Indenture by giving to the Issuer notice in writing which notice shall specify the date on which such resignation is to take effect; provided, however, that such resignation shall only take effect on the day specified in such notice if a successor Indenture Trustee shall have been appointed pursuant to Section 7.11 hereof (and is qualified to be the Indenture Trustee under the requirements of Section 7.11 hereof). If no successor Indenture Trustee has been appointed by the date specified or within a period of 90 days from the receipt of the notice by the Issuer, whichever period is the longer, the Indenture Trustee may (a) appoint a temporary successor Indenture Trustee having the qualifications provided in Section 7.11 hereof or (b) request a court of competent jurisdiction to (i) require the Issuer to appoint a successor, as provided in Section 7.11 hereof, within three days of the receipt of citation or notice by the court, or (ii) appoint a Indenture Trustee having the qualifications provided in Section 7.11 hereof. In no event may the resignation of the Indenture Trustee be effective until a qualified successor Indenture Trustee shall have been selected and appointed. In the event a temporary successor Indenture Trustee is appointed pursuant to (a) above, the Issuer may remove such temporary successor Indenture Trustee and appoint a successor thereto pursuant to Section 7.11 hereof. Section 7.10 Removal of Indenture Trustee. The Indenture Trustee or any successor Indenture Trustee may be removed (a) at any time by the Registered Owners of a majority of the collective aggregate principal amount of the Highest Priority Obligations then Outstanding, (b) by the Issuer for cause or upon the sale or other disposition of the Indenture Trustee or its corporate trust functions or (c) by the Issuer without cause so long as no Event of Default as described in Sections 6.01(a), (b), (c), (d) or (e) exists or has existed within the last 30 days, upon payment to the Indenture Trustee so removed of all money then due to it hereunder and appointment of a successor thereto by the Issuer and acceptance thereof by said successor. One copy of any such order of removal shall be filed with the Issuer and the other with the Indenture Trustee so removed. In the event a Indenture Trustee (or successor Indenture Trustee) is removed by any person or for any reason permitted hereunder, such removal shall not become effective until (a) in the case of removal by the Registered Owners, -46- such Registered Owners by instrument or concurrent instruments in writing (signed and acknowledged by such Registered Owners or their attorneys-in-fact) filed with the Indenture Trustee removed have appointed a successor Indenture Trustee or otherwise the Issuer shall have appointed a successor, and (b) the successor Indenture Trustee has accepted appointment as such. Section 7.11 Successor Indenture Trustee. In case at any time the Indenture Trustee or any successor Indenture Trustee shall resign, be dissolved, or otherwise shall be disqualified to act or be incapable of acting, or in case control of the Indenture Trustee or of any successor Indenture Trustee or of its officers shall be taken over by any public officer or officers, a successor Indenture Trustee may be appointed by the Issuer. In the case of any such appointment by the Issuer of a successor to the Indenture Trustee, the Issuer shall forthwith cause notice thereof to be mailed to the Registered Owners of the Notes at the address of each Registered Owner appearing on the note registration books maintained by the Registrar. Every successor Indenture Trustee appointed by the Registered Owners, by a court of competent jurisdiction, or by the Issuer shall be a bank or trust company in good standing, organized and doing business under the laws of the United States or of a state therein, which has a reported capital and surplus of not less than $50,000,000, be authorized under the law to exercise corporate trust powers, be subject to supervision or examination by a federal or state authority, and be an Eligible Lender so long as such designation is necessary to maintain guarantees and federal benefits under the Act with respect to the Financed Eligible Loans originated under the Act. Section 7.12 Manner of Vesting Title in Indenture Trustee. Any successor Indenture Trustee appointed hereunder shall execute, acknowledge, and deliver to its predecessor Indenture Trustee, and also to the Issuer, an instrument accepting such appointment hereunder, and thereupon such successor Indenture Trustee, without any further act, deed, or conveyance shall become fully vested with all the estate, properties, rights, powers, trusts, duties, and obligations of its predecessors in trust hereunder (except that the predecessor Indenture Trustee shall continue to have the benefits to indemnification hereunder together with the successor Indenture Trustee), with like effect as if originally named as Indenture Trustee herein; but the Indenture Trustee ceasing to act shall nevertheless, on the written request of an Authorized Officer of the Issuer, or an authorized officer of the successor Indenture Trustee, execute, acknowledge, and deliver such instruments of conveyance and further assurance and do such other things as may reasonably be required for more fully and certainly vesting and confirming in such successor Indenture Trustee all the right, title, and interest of the Indenture Trustee which it succeeds, in and to pledged Revenue and Funds and such rights, powers, trusts, duties, and obligations, and the Indenture Trustee ceasing to act also, upon like request, pay over, assign, and deliver to the successor Indenture Trustee any money or other property or rights subject to the lien of this Indenture, including any pledged securities which may then be in its possession. Should any deed or instrument in writing from the Issuer be required by the successor Indenture Trustee for more fully and certainly vesting in and confirming to such new Indenture Trustee such estate, properties, rights, powers, and duties, any and all such deeds and instruments in writing shall on request be executed, acknowledged and delivered by the Issuer. In case any of the Notes to be issued hereunder shall have been authenticated but not delivered, any successor Indenture Trustee may adopt the certificate of authentication of the Indenture Trustee or of any successor to the Indenture Trustee; and in case any of the Notes shall not have been -47- authenticated, any successor to the Indenture Trustee may authenticate such Notes in its own name; and in all such cases such certificate shall have the full force which it has anywhere in the Notes or in this Indenture. Section 7.13 Additional Covenants By the Indenture Trustee to Conform to the Act. The Indenture Trustee covenants that it will at all times be an Eligible Lender under the Act so long as such designation is necessary, as determined by the Issuer, to maintain the guarantees and federal benefits under the Act with respect to the Financed Eligible Loans, that it will acquire Eligible Loans originated under the Act in its capacity as an Eligible Lender and that it will not dispose of or deliver any Financed Eligible Loans originated under the Act or any security interest in any such Financed Eligible Loans to any party who is not an Eligible Lender so long as the Act or Regulations adopted thereunder require an Eligible Lender to be the owner or holder of such Financed Eligible Loans; provided, however, that nothing above shall prevent the Indenture Trustee from delivering the Eligible Loans to the Servicer or the Guaranty Agency. Section 7.14 Right of Inspection. A Registered Owner shall be permitted at reasonable times during regular business hours and in accordance with reasonable regulations prescribed by the Indenture Trustee to examine at the principal office of the Indenture Trustee a copy of any report or instrument theretofore filed with the Indenture Trustee relating to the condition of the Trust Estate. Section 7.15 Limitation with Respect to Examination of Reports. Except as provided in this Indenture, the Indenture Trustee shall be under no duty to examine any report or statement or other document required or permitted to be filed with it by the Issuer. Section 7.16 Servicing Agreement. The Indenture Trustee acknowledges the receipt of a copy of the Servicing Agreement. Section 7.17 Additional Covenants of Indenture Trustee. The Indenture Trustee, by the execution hereof, covenants, represents and agrees that: (a) it will not exercise any of the rights, duties, or privileges under this Indenture in such manner as would cause the Eligible Loans held or acquired under the terms hereof to be transferred, assigned, or pledged as security to any person or entity other than as permitted by this Indenture; and (b) it will comply with the Act and the Regulations and will, upon written notice from an Authorized Officer of the Issuer, the Secretary, or the Guaranty Agency, use its reasonable efforts to cause this Indenture to be amended (in accordance with Section 8.01 hereof) if the Act or Regulations are hereafter amended so as to be contrary to the terms of this Indenture. Section 7.18 Duty of Indenture Trustee with Respect to Rating Agencies. It shall be the duty of the Indenture Trustee to notify each Rating Agency then rating any of the Notes (but the Indenture Trustee shall incur no liability for any failure to do so) of (a) any change, expiration, extension, or renewal of this Indenture, (b) redemption or defeasance of any or all the Notes, (c) any change in the Indenture Trustee or (d) any other information required to -48- be reported to each Rating Agency under any Supplemental Indenture; provided, however, the provisions of this Section 7.18 do not apply when such documents have been previously supplied to such Rating Agency and the Indenture Trustee has received written evidence to such effect, all as may be required by this Indenture. All notices required to be forwarded to the Rating Agencies under this Section 7.18 shall be sent in writing at the following addresses: Standard & Poor's Ratings Group 25 Broadway New York, New York 10004 Attention: Asset-Backed Surveillance Group Fitch, Inc. One State Street Plaza New York, New York 10004 Attention: Structured Finance Moody's Investors Service 99 Church Street New York, New York 10007 Attention: [Contact] The Indenture Trustee also acknowledges that each Rating Agency's periodic review for maintenance of a Rating on any series of the Notes may involve discussions and/or meetings with representatives of the Indenture Trustee at mutually agreeable times and places. Section 7.19 Merger of the Indenture Trustee. Any corporation into which the Indenture Trustee may be merged or with which it may be consolidated, or any corporation resulting from any merger or consolidation to which the Indenture Trustee shall be a party, or any corporation succeeding to all or substantially all of the corporate trust business of the Indenture Trustee, shall be the successor of the Indenture Trustee hereunder, provided such corporation shall be otherwise qualified and eligible under this Indenture, without the execution or filing of any paper of any further act on the part of any other parties hereto. Section 7.20 Receipt of Funds from Servicer. The Indenture Trustee shall not be accountable or responsible in any manner whatsoever for any action of the Issuer, the depository bank of any funds of the Issuer, or the Servicer while the Servicer is acting as bailee or agent of the Indenture Trustee with respect to the Eligible Loans except, to the extent provided in the Servicing Agreement or custodian agreement, for actions taken in compliance with any instruction or direction given to the Indenture Trustee, or for the application of funds or moneys by the Servicer until such time as funds are received by the Indenture Trustee. Section 7.21 Special Circumstances Leading to Resignation of Indenture Trustee. Because the Indenture Trustee serves as trustee hereunder for Obligations of different priorities, it is possible that circumstances may arise which will cause the Indenture Trustee to resign from its position as trustee for one or more of the Obligations. In the event that the Indenture Trustee makes a determination that it should so resign, due to the occurrence of an Event of Default or potential default hereunder, or otherwise, the Issuer may permit such resignation as to one or more of the Obligations or request the -49- Indenture Trustee's resignation as to all Obligations, as the Issuer may elect. If the Issuer should determine that a conflict of interest has arisen as to the trusteeship of any of the Obligations, it may authorize and execute a Supplemental Indenture with one or more successor Indenture Trustees, under which the administration of certain of the Obligations would be separated from the administration of the other Obligations. Section 7.22 Survival of Indenture Trustee's Rights to Receive Compensation, Reimbursement and Indemnification. The Indenture Trustee's rights to receive compensation, reimbursement and indemnification of money due and owing hereunder at the time of the Indenture Trustee's resignation or removal shall survive the Indenture Trustee's resignation or removal. Section 7.23 Corporate Trustee Required; Eligibility; Conflicting Interests. There shall at all times be a Indenture Trustee hereunder which shall be eligible to act as Indenture Trustee under TIA Section 310(a)(1) and shall have a combined capital and surplus of at least $50,000,000. If such corporation publishes reports of condition at least annually, pursuant to law or the requirements of federal, state, territorial or District of Columbia supervising or examining authority, then for the purposes of this Section 7.23, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Indenture Trustee shall cease to be eligible in accordance with the provisions of this Section 7.23, it shall resign immediately in the manner and with the effect specified in this Article VII. Neither the Issuer nor any Person directly or indirectly controlling or controlled by, or under common control with, the Issuer shall serve as Indenture Trustee. Section 7.24 Indenture Trustee May File Proofs of Claim. In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to the Issuer or any other obligor upon the Notes or the property of the Issuer or of such other obligor or their creditors, the Indenture Trustee (irrespective of whether the principal of the Notes of any series 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 on the Issuer for the payment of overdue principal, premium, if any, or interest) shall be entitled and empowered, by intervention in such proceeding or otherwise: (a) to file and prove a claim for the whole amount, or such lesser amount as may be provided for in the Notes, of principal (and premium, if any) and interest, if any, 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 the reasonable compensation, expenses, disbursements and advances of the Indenture Trustee and its agents and counsel) and of the Registered Owners allowed in such judicial proceeding; and (b) to collect and receive any money or other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator (or other similar official) in any such judicial proceeding is hereby authorized by each Registered Owner of Notes to make such payments to the Indenture Trustee, and if -50- the Indenture Trustee shall consent to the making of such payments directly to the Registered Owners, to pay to the Indenture Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Indenture Trustee and any predecessor Indenture Trustee, their agents and counsel, and any other amounts due the Indenture Trustee or any predecessor Indenture Trustee. Nothing herein contained shall be deemed to authorize the Indenture Trustee to authorize or consent to or accept or adopt on behalf of any Registered Owner of a Note any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Registered Owner thereof, or to authorize the Indenture Trustee to vote in respect of the claim of any Registered Owner of a Note in any such proceeding. 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 Registered Owners of the Notes, and it shall not be necessary to make any Registered Owners of the Notes parties to any such proceedings. ARTICLE VIII SUPPLEMENTAL INDENTURES Section 8.01 Supplemental Indentures Not Requiring Consent of Registered Owners. The Issuer and the Indenture Trustee may, without the consent of or notice to any of the Registered Owners of any Obligations enter into any indenture or indentures supplemental to this Indenture for any one or more of the following purposes: (a) to cure any ambiguity or formal defect or omission in this Indenture; (b) to grant to or confer upon the Indenture Trustee for the benefit of the Registered Owners any additional benefits, rights, remedies, powers or authorities that may lawfully be granted to or conferred upon the Registered Owners or the Indenture Trustee; (c) to subject to this Indenture additional revenues, properties or collateral; (d) to modify, amend or supplement this Indenture or any indenture supplemental hereto in such manner as to permit the qualification hereof and thereof under the Trust Indenture Act or any similar federal statute hereafter in effect or to permit the qualification of the Notes for sale under the securities laws of the United States of America or of any of the states of the United States of America, and, if they so determine, to add to this Indenture or any indenture supplemental hereto such other terms, conditions and provisions as may be permitted by said Trust Indenture Act or similar federal statute; (e) to evidence the appointment of a separate or co-Trustee or a co-registrar or transfer agent or the succession of a new Indenture Trustee hereunder, or any additional or substitute Guaranty Agency or Servicer; -51- (f) to add such provisions to or to amend such provisions of this Indenture as may, in Note Counsel's opinion, be necessary or desirable to assure implementation of the Program in conformance with the Act if along with such Supplemental Indenture there is filed a Note Counsel's opinion to the effect that the addition or amendment of such provisions will in no way impair the existing security of the Registered Owners of any Outstanding Obligations; (g) to make any change as shall be necessary in order to obtain and maintain for any of the Notes an investment grade Rating from a nationally recognized rating service, which changes, in the opinion of the Indenture Trustee are not to the prejudice of the Registered Owner of any of the Obligations; (h) to make any changes necessary to comply with the Act, the Regulations or the Code and the regulations promulgated thereunder; (i) to provide for the issuance of Notes pursuant to the provisions of Section 2.08 of this Indenture, including the creation of appropriate Funds, Accounts and Subaccounts with respect to such Notes; (j) to make the terms and provisions of this Indenture, including the lien and security interest granted herein, applicable to a Derivative Product, and to modify Section 3.03 hereof with respect to any particular Derivative Product; (k) to create any additional Funds or Accounts or Subaccounts under this Indenture deemed by the Indenture Trustee to be necessary or desirable; (l) to amend the Indenture to allow for any Notes to be supported by a letter of credit or insurance policy or a liquidity agreement, including amendments with respect to repayment to such a provider on a parity with any Notes or Derivative Product and providing rights to such provider under this Indenture, including with respect to defaults and remedies; (m) to amend the Indenture to provide for use of a surety bond or other financial guaranty instrument in lieu of cash and/or Investment Securities in all or any portion of the Reserve Fund, so long as such action shall not adversely affect the Ratings on any of the Notes; (n) to make any other change with a Rating Confirmation; or (o) to make any other change which, in the judgment of the Indenture Trustee is not to the material prejudice of the Registered Owners of any Obligations; provided, however, that nothing in this Section 8.01 shall permit, or be construed as permitting, any modification of the trusts, powers, rights, duties, remedies, immunities and privileges of the Indenture Trustee without the prior written approval of the Indenture Trustee, which approval shall be evidenced by execution of a Supplemental Indenture. Section 8.02 Supplemental Indentures Requiring Consent of Registered Owners. Exclusive of Supplemental Indentures covered by Section 8.01 hereof and subject to the terms and provisions contained in this Section 8.02, and not otherwise, the Registered Owners of not less than a majority of the principal amount of each class of affected Notes and each affected Derivative Product then Outstanding shall have the right, from time to time, to consent to and approve -52- the execution by the Issuer and the Indenture Trustee of such other indenture or indentures supplemental hereto as shall be deemed necessary and desirable by the Indenture Trustee for the purpose of modifying, altering, amending, adding to or rescinding, in any particular, any of the terms or provisions contained in this Indenture or in any Supplemental Indenture; provided, however, that nothing in this Section 8.02 shall permit, or be construed as permitting (a) without the consent of the Registered Owners of each affected Note and each Derivative Product then Outstanding, (i) an extension of the maturity date of the principal of or the interest on any Obligation, or (ii) a reduction in the principal amount of any Obligation or the rate of interest thereon, or (iii) a privilege or priority of any Obligation or Obligations over any other Obligation or Obligations except as otherwise provided herein, or (iv) a reduction in the aggregate principal amount of the Obligations required for consent to a Supplemental Indenture, or (v) the creation of any lien other than a lien ratably securing all of the Obligations at any time Outstanding hereunder except as otherwise provided herein or (b) any modification of the trusts, powers, rights, obligations, duties, remedies, immunities and privileges of the Indenture Trustee without the prior written approval of the Indenture Trustee. If at any time the Issuer shall request that the Indenture Trustee enter into any such Supplemental Indenture for any of the purposes of this Section 8.02, the Indenture Trustee shall, upon being satisfactorily indemnified with respect to expenses, cause notice of the proposed execution of such Supplemental Indenture to be mailed by registered or certified mail to each Registered Owner of an Obligation at the address shown on the registration books or listed in any Derivative Product. Such notice (which shall be prepared by the Issuer) shall briefly set forth the nature of the proposed Supplemental Indenture and shall state that copies thereof are on file at the principal corporate trust office of the Indenture Trustee for inspection by all Registered Owners. If, within 60 days, or such longer period as shall be prescribed by the Issuer, following the mailing of such notice, the Registered Owners of not less than a majority of the principal amount of each class of affected Notes and each affected Derivative Product then Outstanding at the time of the execution of any such Supplemental Indenture shall have consented in writing to and approved the execution thereof as herein provided, no Registered Owner of any Obligation shall have any right to object to any of the terms and provisions contained therein, or the operation thereof, or in any manner to question the propriety of the execution thereof, or to enjoin or restrain the Indenture Trustee or the Issuer from executing the same or from taking any action pursuant to the provisions thereof. Upon the execution of any such Supplemental Indenture as in this Section 8.02 permitted and provided, this Indenture shall be and be deemed to be modified and amended in accordance therewith. Section 8.03 Additional Limitation on Modification of Indenture. None of the provisions of this Indenture (including Sections 8.01 and 8.02 hereof) shall permit an amendment to the provisions of the Indenture which permits the transfer of all or part of the Financed Eligible Loans originated under the Act or granting of a security interest therein to any Person other than an Eligible Lender or the Servicer, unless the Act or Regulations are hereafter modified so as to permit the same. Section 8.04 Notice of Defaults. Within 90 days after the occurrence of any default hereunder with respect to the Notes, the Indenture Trustee shall transmit in the manner and to the extent provided in TIA Section 313(c), notice of such default hereunder known to the Indenture Trustee, unless such default shall have been cured or waived; provided, however, that, except in the case of -53- a default in the payment of the principal of (or premium, if any) or interest with respect to any Note, or in the payment of any sinking fund installment with respect to the Notes, the Indenture Trustee shall be protected in withholding such notice if and so long as an authorized officer of the Indenture Trustee in good faith determine that the withholding of such notice is in the interest of the Registered Owners of the Notes. For the purpose of this Section 8.04, the term "default" means any event which is, or after notice or lapse of time or both would become, an Event of Default with respect to the Notes. Section 8.05 Conformity With the Trust Indenture Act. Every supplemental indenture executed pursuant to this Article VIII shall conform to the requirements of the Trust Indenture Act as then in effect. ARTICLE IX GENERAL PROVISIONS Section 9.01 Notices. Any notice, request or other instrument required by this Indenture to be signed or executed by the Registered Owners of Obligations may be executed by the execution of any number of concurrent instruments of similar tenor, and may be signed or executed by such Registered Owners of Obligations in person or by agent appointed in writing. As a condition for acting thereunder the Indenture Trustee may demand proof of the execution of any such instrument and of the fact that any person claiming to be the owner of any of said Obligations is such owner and may further require the actual deposit of such Obligation or Obligations with the Indenture Trustee. The fact and date of the execution of such instrument may be proved by the certificate of any officer in any jurisdiction who by the laws thereof is authorized to take acknowledgments of deeds within such jurisdiction, that the person signing such instrument acknowledged before him the execution thereof, or may be proved by any affidavit of a witness to such execution sworn to before such officer. The amount of Notes held by any person executing such instrument as a Registered Owner of Notes and the fact, amount, and numbers of the Notes held by such person and the date of his holding the same may be proved by a certificate executed by any responsible trust company, bank, banker, or other depository in a form approved by the Indenture Trustee, showing that at the date therein mentioned such person had on deposit with such depository the Notes described in such certificate; provided, however, that at all times the Indenture Trustee may require the actual deposit of such Note or Notes with the Indenture Trustee. All notices, requests and other communications to any party hereunder shall be in writing (including bank wire, telex, telecopy or facsimile or similar writing) at the following addresses, and each address shall constitute each party's respective "Principal Office" for purposes of the Indenture: -54- If intended for the Issuer: The Student Loan Corporation c/o SLC Student Loan Trust-I 750 Washington Boulevard 9th Floor Stamford, CT 06901 Attention: [Trust Administrator] Telephone: [ ] Telecopier: [ ] If intended for the Indenture Trustee: Bankers Trust Company Four Albany Street New York, New York 10006 Until further notice: 100 Plaza One Jersey City, NJ 07311 Attention: Structured Finance Services Telephone: [ ] Telecopier: [ ] Any party may change the address to which subsequent notices to such party are to be sent, or of its Principal Office, by notice to the others, delivered by hand or received by telex or telecopier or registered first-class mail, postage prepaid. Each such notice, request or other communication shall be effective when delivered by hand or received by telex or telecopier or registered first-class mail, postage prepaid. Section 9.02 Covenants Bind Issuer. The covenants, agreements, conditions, promises, and undertakings in this Indenture shall extend to and be binding upon the successors and assigns of the Issuer, and all of the covenants hereof shall bind such successors and assigns, and each of them, jointly and severally. All the covenants, conditions, and provisions hereof shall be held to be for the sole and exclusive benefit of the parties hereto and their successors and assigns and of the Registered Owners from time to time of the Obligations. No extension of time of payment of any of the Obligations shall operate to release or discharge the Issuer, it being agreed that the liability of the Issuer, to the extent permitted by law, shall continue until all of the Obligations are paid in full, notwithstanding any transfer of Financed Eligible Loans or extension of time for payment. Section 9.03 Lien Created. This Indenture shall operate effectually as (a) a grant of lien on and security interest in, and (b) an assignment of, the Trust Estate. Section 9.04 Severability of Lien. If the lien of this Indenture shall be or shall ever become ineffectual, invalid, or unenforceable against any part of the Trust Estate, which is not subject to the lien, because of want of power or title in the Issuer, the inclusion of any such part shall not in any way affect or invalidate the pledge and lien hereof against such part of the Trust Estate as to which the Issuer in fact had the right to pledge. -55- Section 9.05 Consent of Registered Owners Binds Successors. Any request or consent of the Registered Owner of any Obligations given for any of the purposes of this Indenture shall bind all future Registered Owners of the same Obligation or any Obligations issued in exchange therefor or in substitution thereof in respect of anything done or suffered by the Issuer or the Indenture Trustee in pursuance of such request or consent. Section 9.06 Nonpresentment of Notes or Interest Checks. Should any of the Notes or interest checks not be presented for payment when due, the Indenture Trustee shall retain from any money transferred to it for the purpose of paying the Notes or interest checks so due, for the benefit of the Registered Owners thereof, a sum of money sufficient to pay such Notes or interest checks when the same are presented by the Registered Owners thereof for payment. Such money shall not be required to be invested. All liability of the Issuer to the Registered Owners of such Notes or interest checks and all rights of such Registered Owners against the Issuer under the Notes or interest checks or under this Indenture shall thereupon cease and determine, and the sole right of such Registered Owners shall thereafter be against such deposit. If any Note or interest check shall not be presented for payment within the period of two years following its payment or redemption date, the Indenture Trustee shall return to the Issuer the money theretofore held by it for payment of such Note or interest check, and such Note or interest check shall (subject to the defense of any applicable statute of limitation) thereafter be an unsecured obligation of the Issuer. The Indenture Trustee's responsibility for any such money shall cease upon remittance thereof to the Issuer. Section 9.07 Laws Governing. It is the intent of the parties hereto that this Indenture shall be construed in accordance with the laws of New York without reference to its conflict of law provisions. This Indenture is subject to the provisions of the TIA that are required to be part of this Indenture and shall, to the extent applicable, be governed by such provisions. Section 9.08 Severability. of any covenant, agreement, waiver, or part thereof in this Indenture contained be forbidden by any pertinent law or under any pertinent law be effective to render this Indenture invalid or unenforceable or to impair the lien hereof, then each such covenant, agreement, waiver, or part thereof shall itself be and is hereby declared to be wholly ineffective, and this Indenture shall be construed as if the same were not included herein. Section 9.09 Exhibits. The terms of the Schedules and Exhibits, if any, attached to this Indenture are incorporated herein in all particulars. Section 9.10 Non-Business Days. Except as may otherwise be provided herein, if the date for making payment of any amount hereunder or on any Note, or if the date for taking any action hereunder, is not a Business Day, then such payment can be made without accruing further interest or action can be taken on the next succeeding Business Day, with the same force and effect as if such payment were made when due or action taken on such required date. -56- Section 9.11 Parties Interested Herein. Nothing in this Indenture expressed or implied is intended or shall be construed to confer upon, or to give to, any person or entity, other than the Indenture Trustee, the paying agent, if any, and the Registered Owners of the Obligations, any right, remedy or claim under or by reason of this Indenture or any covenant, condition or stipulation hereof, and all covenants, stipulations, promises and agreements in this Indenture contained by and on behalf of the Issuer shall be for the sole and exclusive benefit of the Indenture Trustee, the paying agent, if any, and the Registered Owners of the Obligations. Section 9.12 Obligations Are Limited Obligations. The Notes and the obligations of the Issuer contained in this Indenture are special, limited obligations of the Issuer, secured by and payable solely from the Trust Estate herein provided. The Issuer shall not be obligated to pay the Notes, the interest thereon, or any other obligation created by or arising from this Indenture from any other source. Section 9.13 Counterparty Rights. Notwithstanding any provision of this Indenture, no Counterparty which shall be in default under any Derivative Product with the Issuer shall have any of the rights granted to a Counterparty or as the Registered Owner of an Obligation hereunder. Section 9.14 Disclosure of Names and Addresses of Registered Owners. Registered Owners of Notes, by receiving and holding the same, agree with the Issuer and the Indenture Trustee that neither the Issuer nor the Indenture Trustee nor any Securities Depository shall be held accountable by reason of the disclosure of any information as to the names and addresses of the Registered Owners of Notes in accordance with TIA Section 312, regardless of the source from which such information was derived, and that the Indenture Trustee shall not be held accountable by reason of mailing any material pursuant to a request made under TIA Section 312(b). Section 9.15 Aggregate Principal Amount of Obligations. Whenever in this Indenture reference is made to the aggregate principal amount of any Obligations, such phrase shall mean, at any time, the principal amount of any Notes and the Derivative Value of any Derivative Product. Section 9.16 Financed Eligible Loans. The Issuer expects to acquire Eligible Loans and to pledge Eligible Loans to the Indenture Trustee, in accordance with this Indenture, which Eligible Loans, upon becoming subject to the lien of this Indenture, constitute Financed Eligible Loans, as defined herein. If for any reason a Financed Eligible Loan does not constitute an Eligible Loan, or ceases to constitute an Eligible Loan, such loan shall continue to be subject to the lien of this Indenture as a Financed Eligible Loan. ARTICLE X PAYMENT AND CANCELLATION OF NOTES AND SATISFACTION OF INDENTURE Section 10.01 Trust Irrevocable. The trust created by the terms and provisions of this Indenture is irrevocable until the indebtedness secured hereby (the Notes and interest thereon) and all Issuer Derivative Payments are fully paid or provision made for its payment as provided in this Article X. 57 Section 10.02 Satisfaction of Indenture. (a) If the Issuer shall pay, or cause to be paid, or there shall otherwise be paid (i) to the Registered Owners of the Notes, the principal of and interest on the Notes, at the times and in the manner stipulated in this Indenture and (ii) to each Counterparty, all Issuer Derivative Payments then due, then the pledge of the Trust Estate hereunder, and all covenants, agreements, and other obligations of the Issuer to the Registered Owners of Notes shall thereupon cease, terminate, and become void and be discharged and satisfied. In such event, the Indenture Trustee shall execute and deliver to the Issuer all such instruments as may be desirable to evidence such discharge and satisfaction, and the Indenture Trustee shall pay over or deliver all money held by it under this Indenture to the party entitled to receive the same under this Indenture. (b) Any Issuer Derivative Payments are deemed to have been paid and the applicable Derivative Product terminated when payment of all Issuer Derivative Payments due and payable to each Counterparty under its respective Derivative Product have been made or duly provided for to the satisfaction of each Counterparty and the respective Derivative Product has been terminated. (c) In no event shall the Indenture Trustee deliver over to the Issuer any Financed Eligible Loans originated under the Act unless the Issuer is an Eligible Lender, if the Act or Regulations then in effect require the owner or holder of such Financed Eligible Loans to be an Eligible Lender. Section 10.03 Cancellation of Paid Notes. Any Notes which have been paid or purchased by the Issuer, mutilated Notes replaced by new Notes, and any temporary Note for which definitive Notes have been delivered shall (unless otherwise directed by the Issuer by Issuer Order) forthwith be cancelled by the Indenture Trustee and, except for temporary Notes, returned to the Issuer. ARTICLE XI TERMINATION Section 11.01 Termination of the Trust. (a) The trust created by this Indenture (the "Trust") shall terminate upon the earlier of (i) the later of (A) payment to the Registered Owners and to the Indenture Trustee of all amounts required to be paid to them pursuant to this Indenture and any Supplemental Indenture and the disposition of all property held as part of the Trust Estate or (B) the day following the date on which all reimbursement obligations to the Counterparties, if any, and any other Person as may be provided for in any Supplemental Indenture have been paid in full, or (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) living on the date of this Indenture. The Issuer shall promptly notify the Indenture Trustee of any prospective termination pursuant to this Section 11.01. -58- (b) Notice of any prospective termination, specifying the Note Payment Date for payment of the final distribution and requesting the surrender of the Notes for cancellation, shall be given promptly by the Indenture Trustee by letter to Registered Owners mailed not less than 10 nor more than 15 days preceding the specified Note Payment Date stating (i) the Note Payment Date upon which final payment of the Notes shall be made, (ii) the amount of any such final payment, and (iii) the location for presentation and surrender of the Notes. Payment of the final distribution which shall be made only upon presentation and surrender of the Notes at the corporate trust office of the Indenture Trustee specified in the notice. Section 11.02 Notice. The Indenture Trustee shall give notice of termination of the Trust to the Issuer and each Rating Agency. ARTICLE XII REPORTING REQUIREMENTS Section 12.01 Annual Statement as to Compliance. The Servicer will deliver to each Rating Agency, the Indenture Trustee and the Issuer, on or before March 31 of each year, beginning with March 31, 2003, a certificate stating that (a) a review of the activities of the Servicer during the preceding calendar year and of its performance under the Servicing Agreement has been made under the supervision of the officer signing such certificate and (b) to the best of such officers' knowledge, based on such review, the Servicer has fulfilled all its obligations under the Servicing Agreement throughout such year, or, there has been a default in the fulfillment of any such obligation, specifying each such default known to such officer and the nature and statue thereof. Section 12.02 Annual Independent Public Accountants' Servicing Report. On or before March 31 of each year, beginning March 31, 2003, the Servicer at its expense shall cause a firm of independent public accountants which is a member of the American Institute of Certified Public Accountants to furnish a statement to each Rating Agency, the Issuer and the Indenture Trustee to the effect that such firm has examined certain documents and records relating to the servicing of the Financed Eligible Loans (during the preceding fiscal year) under servicing agreements substantially similar one to another and to the Servicing Agreement and that, on the basis of such examination, such servicing has been conducted in compliance with such servicing agreements except for such significant exceptions or errors in records that, in the opinion of such firm, requires it to report and which are set forth in such report. Section 12.03 Servicer's Certificate. Each month, not later than the fifteenth day of each month, the Servicer shall deliver to the Indenture Trustee, a certificate certified by an officer of the Servicer certifying to the accuracy of the monthly statement contemplated by Section 12.04. Section 12.04 Statements to Registered Owners. On or before the fifteenth day of each month, the Issuer shall provide or cause to be provided to the Indenture Trustee (with a copy to the Rating Agencies) for the Indenture Trustee to forward within five days of receipt to each Registered Owner, a statement setting forth at least the following information with respect to the preceding month, to the extent applicable; -59- (a) the amount of payments with respect to each series of Notes paid with respect to principal during the preceding month; (b) the amount of payments with respect to each series of Notes paid with respect to interest during the preceding month; (c) the amount of the payments allocable to any interest that was carried over together with the amount of any remaining outstanding interest that was carried over; (d) the principal balance of Financed Eligible Loans as of the close of business on the last day of the preceding month; (e) the aggregate outstanding principal amount of the Notes of each series as of the close of business on the last day of the preceding month, after giving effect to payments allocated to principal reported under clause (a) above; (f) the interest rate for any series of variable rate Notes, indicating such interest rate is calculated; (g) the amount of the servicing fees allocated to the Servicer as of the close of business on the last day of the preceding month; (h) the amount of the administration fee, the auction agent fee, market agent fee, calculation agent fee and the trustee fee, if any, allocated as of the close of business on the last day of the preceding month; (i) the amount of the recoveries of principal and interest received during the preceding month relating to Financed Eligible Loans; (j) the amount of the payment attributable to amounts in the Reserve Fund, the amount of any other withdrawals from the Reserve Fund and the balance of the Reserve Fund as of the close of business on the last day of the preceding month; (k) the portion, if any, of the payments attributable to amounts on deposit in the Acquisition Fund; (l) the aggregate amount, if any, paid by the Indenture Trustee to acquire Eligible Loans from amounts on deposit in the Acquisition Fund during the preceding month; (m) the amount remaining in the Acquisition Fund that has not been used to acquire Eligible Loans and is being transferred to the Revenue Fund; (n) the aggregate amount, if any, paid for Financed Eligible Loans purchased from the Trust during the preceding month; (o) the number and principal amount of Financed Eligible Loans, as of the close of business on the last day of the preceding month, that are (i) 30 to 60 days delinquent, (ii) 61 to 90 days delinquent, (iii) 91 to 120 days delinquent, (iv) 121 to 180 days delinquent, (v) 181 to 240 days delinquent and (vi) for which claims have been filed with the appropriate Guarantee Agency and which are awaiting payment; and -60- (p) the Aggregate Market Value of the Trust Estate and the Outstanding principal amount of the Notes as of the close of business on the last day of the preceding month. Each amount set forth pursuant to paragraph (a), (b), (g) and (h) above shall be expressed as a dollar amount per authorized denomination of a Note. A copy of the statements referred to above may be obtained by any Registered Owner by a written request to the Indenture Trustee, addressed to its corporate trust office. -61- 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. SLC STUDENT LOAN TRUST-I By:[WILMINGTON TRUST COMPANY], not in its individual capacity but solely as Issuer Trustee By ------------------------------------ Name: Title: Bankers Trust Company, not in its individual capacity but solely as Indenture Trustee By ------------------------------------ Name: Title: Acknowledged and accepted as to the Granting Clauses as of the day and year first above written: Bankers Trust Company, not in its individual capacity but solely as Eligible Lender Trustee By ------------------------------------ Name: Title: The Student Loan Corporation hereby acknowledges and accepts the duties and obligations assigned to the Servicer in Article XII hereof. THE STUDENT LOAN CORPORATION, as Servicer By ------------------------------------ Name: Title: EXHIBIT A ELIGIBLE LOAN ACQUISITION CERTIFICATE This Eligible Loan Acquisition Certificate is submitted pursuant to the provisions of Section 5.02 of the Indenture of Trust, dated as of _________ _, 200_ (the "Indenture"), between SLC Student Loan Trust-I (the "Issuer") and Bankers Trust Company, as Indenture Trustee. All capitalized terms used in this Certificate and not otherwise defined herein shall have the same meanings given to such terms in the Indenture. In your capacity as Indenture Trustee, you are hereby authorized and requested to disburse to _________________ (the "Lender") the sum of $____________ (or, in the case of an exchange, the Eligible Loans listed in Exhibit A hereto) for the acquisition of Eligible Loans. With respect to the Eligible Loans so to be acquired, the Issuer hereby certifies as follows: 1. The Eligible Loans to be acquired are those specified in Schedule A attached hereto (the "Acquired Eligible Loans"). The remaining unpaid principal amount of each Acquired Eligible Loan is as shown on such Schedule A. 2. The amount to be disbursed pursuant to this Certificate does not exceed the amount permitted by Section 5.02 of the Indenture (or, if a Financed Eligible Loan is being sold in exchange for an Acquired Eligible Loan under the Indenture, the aggregate unpaid principal amount of, and accrued interest on, such Financed Eligible Loan does not exceed the amount permitted by Section 5.02 of the Indenture). 3. Each Acquired Eligible Loan is an Eligible Loan authorized so to be acquired by the Indenture. 4. You have been previously, or are herewith, provided with the following items (the items listed in (a), (b), (c), (d), (f) and (g) have been received and are being retained, on your behalf, by the Issuer or the Servicer): (a) a copy of the Student Loan Transfer Agreement between the Issuer and the Eligible Lender with respect to the Acquired Eligible Loans; (b) with respect to each Insured Loan included among the Acquired Eligible Loans, the Certificate of Insurance relating thereto; (c) with respect to each Guaranteed Loan included among the Acquired Eligible Loans, a certified copy of the Guarantee Agreement relating thereto; (d) an opinion of counsel to the Issuer specifying each action necessary to perfect a security interest in all Eligible Loans to be acquired by the Issuer pursuant to the Student Loan Transfer Agreements in favor of the Indenture Trustee in the manner provided for by the provisions of 20 U.S.C. ss. 1087-2(d)(3) (you are authorized to rely on the advice of a single blanket opinion of counsel to the Issuer until such time as the Issuer shall provide any amended opinion to you); A-1 (e) a certificate of an Authorized Officer of the Issuer to the effect that (i) the Issuer is not in default in the performance of any of its covenants and agreements made in the Student Loan Transfer Agreement relating to the Acquired Eligible Loans; (ii) with respect to all Acquired Eligible Loans which are Insured, Insurance is in effect with respect thereto, and with respect to all Acquired Eligible Loans which are Guaranteed, the Guarantee Agreement is in effect with respect thereto; and (iii) the Issuer is not in default in the performance of any of its covenants and agreements made in any Contract of Insurance or the Guarantee Agreement applicable to the Acquired Eligible Loans; (f) evidence that the promissory notes evidencing the Acquired Eligible Loans have had stamped thereon or affixed thereto (individually or by blanket endorsement) a notice specifying that they have been assigned to the Indenture Trustee with all necessary endorsements; and (g) instruments duly assigning the Acquired Eligible Loans to the Indenture Trustee. 5. The Issuer is not, on the date hereof, in default under the Indenture or in the performance of any of its covenants and agreements made in the Student Loan Transfer Agreement relating to the Acquired Eligible Loans, and, to the best knowledge of the Issuer, the Eligible Lender is not in default under the Student Loan Transfer Agreement applicable to the Acquired Eligible Loans. The Issuer is not aware of any default existing on the date hereof under any of the other documents referred to in paragraph 4 hereof, nor of any circumstances which would reasonably prevent reliance upon the opinion of counsel referred to in paragraphs 4(d) hereof. 6. All of the conditions specified in the Student Loan Transfer Agreement applicable to the Acquired Eligible Loans and the Indenture for the acquisition of the Acquired Eligible Loans and the disbursement hereby authorized and requested have been satisfied; provided that the Issuer may waive the requirement of receiving an opinion of counsel from the counsel to the Lender. 7. If a Financed Eligible Loan is being sold in exchange for an Acquired Eligible Loan, the final expected maturity date of such Acquired Eligible Loan shall be substantially similar to that of the Financed Eligible Loan being sold and such sale and exchange shall not adversely affect the ability of the Trust Estate to make timely principal and interest payments on its Obligations. 8. With respect to all Acquired Eligible Loans which are Insured, Insurance is in effect with respect thereto, and with respect to all Acquired Eligible Loans which are Guaranteed, the Guarantee Agreement is in effect with respect thereto. 9. The Issuer is not in default in the performance of any of its covenants and agreements made in any Contract of Insurance or the Guarantee Agreement applicable to the Acquired Eligible Loans. 10. The undersigned is authorized to sign and submit this Certificate on behalf of the Issuer. A-2 11. Eligible Loans are being acquired at a price which permits the results of the cash flow analyses provided to the Rating Agencies on the Date of Issuance to be sustained. WITNESS my hand this _____ day of ___________. SLC STUDENT LOAN TRUST-I By ----------------------------------- Name: Title: A-3 EXHIBIT A Eligible Loans To Be Acquired EX-4.5 6 st619566v2_ex4-5.txt DELWARE STATUTORY BUSINESS TRUST AGREEMENT TRUST AGREEMENT, dated as of December 20, 2001, between SLC STUDENT LOAN RECEIVABLES I, INC., a Delaware corporation, as depositor (the "Depositor"), and WILMINGTON TRUST COMPANY, a Delaware banking corporation, as owner trustee (the "Owner Trustee"). The Depositor and the Owner Trustee hereby agree as follows: 1. Creation of Trust. (a) The trust created hereby shall be known as "SLC Student Loan Trust-I." The purpose of the Trust is to issue notes and to acquire certain student loans from the Depositor with the proceeds thereof and to enter into certain contracts in connection therewith. (b) The Depositor hereby assigns, transfers, conveys and sets over to the Owner Trustee the sum of $1. The Owner Trustee hereby acknowledges receipt of such amount in trust from the Depositor, which amount shall constitute the initial trust estate. The Owner Trustee hereby declares that it will hold the trust estate in trust for the Depositor. It is the intention of the parties hereto that the Trust created hereby constitute a business trust under Chapter 38 of Title 12 of the Delaware Code, 12 Del. C. 3801 et seq. and that this Trust Agreement constitute the governing instrument of the Trust. The Owner Trustee is hereby authorized and directed to execute and file a certificate of trust with the Delaware Secretary of State in the form attached hereto. (c) The Owner Trustee is authorized and directed to enter into such documents and take such other action as the Depositor specifically directs in written instructions delivered to the Owner Trustee; provided, however, the Owner Trustee shall not be required to take any action if the Owner Trustee shall determine, or shall be advised by counsel, that such action is likely to result in personal liability or is contrary to applicable law or any agreement to which the Owner Trustee is a party. (d) The Depositor and the Owner Trustee will enter into an amended and restated Trust Agreement, satisfactory to each such party and substantially in the form included as an exhibit to the 1933 Act Registration Statement (as defined below), to provide for the contemplated operation of the Trust created hereby and the issuance of the Trust's securities referred to therein (collectively, the "Trust Securities"). (e) The Depositor and the Owner Trustee hereby authorize and direct the Depositor, as the agent of the Trust, (i) to file with the Securities and Exchange Commission (the "Commission") and execute, in each case on behalf of the Trust, the Registration Statement on Form S-3 (the "1933 Act Registration Statement"), including any pre-effective or post-effective amendments to the 1933 Act Registration Statement, relating to the registration under the Securities Act of 1933, as amended, of the Trust Securities; (ii) to file and execute on behalf of the Trust such applications, reports, surety bonds, irrevocable consents, appointments of attorney for service of process and other papers and documents as shall be necessary or desirable to register the Trust Securities under the securities or blue sky laws of such jurisdictions as the Depositor, on behalf of the Trust, may deem necessary or desirable and (iii) to execute on behalf of the Trust one or more underwriting agreements relating to the Trust Securities, among the Trust, the Depositor and the underwriter named therein, substantially in the form included as an exhibit to the 1933 Act Registration Statement. 2. Concerning the Owner Trustee. (a) Except as otherwise expressly required by Section 1 of this Trust Agreement, the Owner Trustee shall not have any duty or liability with respect to the administration of the Trust, the investment of the Trust's property or the payment of dividends or other distributions of income or principal to the Trust's beneficiaries, and no implied obligations shall be inferred from this Trust Agreement on the part of the Owner Trustee. The Owner Trustee shall not be liable for the acts or omissions of the Depositor nor shall the Owner Trustee be liable for any act or omission by it in good faith in accordance with the directions of the Depositor. (b) The Owner Trustee accepts the trusts hereby created and agrees to perform its duties hereunder with respect to the same but only upon the terms of this Trust Agreement. The Owner Trustee shall not be personally liable under any circumstances, except for its own willful misconduct or gross negligence. In particular, but not by way of limitation: (i)The Owner Trustee shall not be personally liable for any error of judgment made in good faith by an officer or employee of the Owner Trustee; (ii) No provision of this Trust Agreement shall require the Owner Trustee to expend or risk its personal funds or otherwise incur any financial liability in the performance of its rights or duties hereunder, if the Owner 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; (iii) Under no circumstance shall the Owner Trustee be personally liable for any representation, warranty, covenant or indebtedness of the Trust; (iv) The Owner Trustee shall not be personally responsible for or in respect of the genuineness, form or value of the Trust property, the validity or sufficiency of this Trust Agreement or for the due execution hereof by the Depositor; (v) In the event that the Owner Trustee is unsure of the course of action to be taken by it hereunder, the Owner Trustee may request instructions from the Depositor and to the extent the Owner Trustee follows such instructions in good faith it shall not be liable to any person. In the event that no instructions are provided within the time requested by the Owner Trustee, it shall have no duty or liability for its failure to take any action or for any action it takes in good faith; (vi) All funds deposited with the Owner Trustee hereunder may be held in a non-interest bearing trust account and the Owner Trustee shall not be liable for any interest thereon or for any loss as a result of the investment thereof at the direction of the Depositor; and -2- (vii) To the extent that, at law or in equity, the Owner Trustee has duties and liabilities relating thereto to the Depositor or the Trust, the Depositor agrees that such duties and liabilities are replaced by the terms of this Trust Agreement. (c) The Owner Trustee shall incur no liability to anyone in acting upon any document believed by it to be genuine and believed by it to be signed by the proper party or parties. The Owner 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 manner of ascertainment of which is not specifically prescribed herein, the Owner Trustee may for all purposes hereof rely on a certificate, signed by the Depositor, as to such fact or matter, and such certificate shall constitute full protection to the Owner Trustee for any action taken or omitted to be taken by it in good faith in reliance thereon. (d) In the exercise or administration of the trusts hereunder, the Owner Trustee (i) may act directly or, at the expense of the Trust, through agents or attorneys, and the Owner Trustee shall not be liable for the default or misconduct of such agents or attorneys if such agents or attorneys shall have been selected by the Owner Trustee in good faith, and (ii) may, at the expense of the Trust, consult with counsel, accountants and other experts, and it shall not be liable for anything done, suffered or omitted in good faith by it in accordance with the advice or opinion of any such counsel, accountants or other experts. (e) Notwithstanding anything contained herein to the contrary, neither Wilmington Trust Company nor the Owner Trustee shall be required to take any action in any jurisdiction other than the State of Delaware if the taking of such action will (i) require the consent or approval or authorization or order of or the giving of notice to, or the registration with or the taking of any other action in respect of, any state or other governmental authority or agency of any jurisdiction other than the State of Delaware, (ii) result in any fee, tax or other governmental charge under the laws of any jurisdiction or any political subdivision thereof in existence becoming payable by Wilmington Trust Company, or (iii) subject Wilmington Trust Company to personal jurisdiction in any jurisdiction other than the State of Delaware for causes of action arising from acts unrelated to the consummation of the transactions by Wilmington Trust Company or the Owner Trustee, as the case may be, contemplated hereby. (f) Except as expressly provided in this Section 2, in accepting and performing the trusts hereby created, the Owner Trustee acts solely as trustee hereunder and not in its individual capacity, and all persons having any claim against the Owner Trustee by reason of the transactions contemplated by this Trust Agreement shall look only to the Trust's property for payment or satisfaction thereof. 3. Compensation and Indemnification. (a) The Depositor hereby agrees to (i) compensate the Owner Trustee in accordance with a separate fee agreement with the Owner Trustee, (ii) reimburse the Owner Trustee for all reasonable expenses (including reasonable fees and expenses of counsel and other experts) and (iii) indemnify, defend and hold harmless the Owner Trustee and any of the officers, directors, employees and agents of the Owner Trustee (the "Indemnified Persons") from and against any -3- and all losses, damages, liabilities, claims, actions, suits, costs, expenses, disbursements (including the reasonable fees and expenses of counsel), taxes and penalties of any kind and nature whatsoever (collectively, "Expenses"), to the extent that such Expenses arise out of or are imposed upon or asserted at any time against such Indemnified Persons with respect to the performance of this Trust Agreement, the creation, operation or termination of the Trust or the transactions contemplated hereby; provided, however, that the Depositor shall not be required to indemnify any Indemnified Person for any Expenses which are a result of the willful misconduct, bad faith or gross negligence of such Indemnified Person. (b) To the fullest extent permitted by law, Expenses to be incurred by an Indemnified Person shall, from time to time, be advanced by, or on behalf of, the Depositor prior to the final disposition of any matter upon receipt by the Depositor of an undertaking by, or on behalf of, such Indemnified Person to repay such amount if it shall be determined that the Indemnified Person is not entitled to be indemnified under this Agreement. (c) As security for any amounts owing to the Owner Trustee hereunder, the Owner Trustee shall have a lien against the Trust property, which lien shall be prior to the rights of the Depositor or any other beneficial owner of the Trust. The obligations of the Depositor under this Section 3 shall survive the termination of this Trust Agreement. 4. The Owner Trustee may resign upon thirty days prior notice to the Depositor. If no successor has been appointed within such thirty day period, the Owner Trustee may, at the expense of the Trust, petition a court to appoint a successor trustee. Any Person into which the Owner Trustee may be merged or with which it may be consolidated, or any Person resulting from any merger or consolidation to which the Owner Trustee shall be a party, or any Person which succeeds to all or substantially all of the corporate trust business of the Owner Trustee, shall be the successor Owner Trustee under this Trust Agreement without the execution, delivery or filing of any paper or instrument or further act to be done on the part of the parties hereto, except as may be required by applicable law. 5. This Trust Agreement represents the entire agreement between the parties hereto with respect to the subject matter hereof, and supersedes all prior agreements and understandings between the parties, whether written or oral. 6. This Trust Agreement shall be governed by and 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. Sections 3540 and 3561 of Title 12 of the Delaware Code shall not apply to the Trust. 7. This Trust Agreement may be executed in two or more counterparts, each of which shall be an original, but all such counterparts shall together constitute one and the same agreement. 8. This Trust Agreement may be amended and restated by the parties hereto as necessary to provide for the operation of the Trust; provided, however, that the Owner Trustee shall not be required to enter into any amendment hereto which adversely affects the rights, duties or immunities of the Owner Trustee. -4- 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. WILMINGTON TRUST COMPANY, as Owner Trustee By: /s/ Donald G. MacKelcan ---------------------------------------- Name: Donald G. MacKelcan Title: Vice President SLC STUDENT LOAN RECEIVABLES I, INC., as Depositor By: /s/ Steven J. Gorey ---------------------------------------- Name: Steven J. Gorey Title: Chief Financial Officer and Secretary EX-25 7 st623345v1.txt STATEMENT OF ELIGIBILITY EXHIBIT 25.1 - ------------------------------------------------------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------ FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) ------------------------ BANKERS TRUST COMPANY (Exact name of trustee as specified in its charter) NEW YORK 13-4941247 (Jurisdiction of Incorporation or (I.R.S. Employer organization if not a U.S. national bank) Identification no.) FOUR ALBANY STREET NEW YORK, NEW YORK 10006 (Address of principal (Zip Code) executive offices) BANKERS TRUST COMPANY LEGAL DEPARTMENT 130 LIBERTY STREET, 31ST FLOOR NEW YORK, NEW YORK 10006 (212) 250-2201 (Name, address and telephone number of agent for service) ------------------------------------------------------------- SLC STUDENT LOAN RECEIVABLES I, INC SLC STUDENT LOAN TRUST-I (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) (ISSUER OF NOTES) DELAWARE DELAWARE (State or other jurisdiction or organization) (State or other jurisdiction or organization) PENDING PENDING (IRS Employer Identification no.) (IRS Employer Identification No) 750 Washington Boulevard, 9th Floor 750 Washington Boulevard, 9th Floor Stamford, CT 06901 Stamford, CT 06901 203-975-6923 203-975-6112
(Address, including zip code and telephone number of Registrant's principal executive offices) STUDENT LOAN ASSET BACKED NOTES DEBT SECURITIES (TITLE OF THE INDENTURE SECURITIES) ITEM 1. GENERAL INFORMATION. Furnish the following information as to the trustee. (a) Name and address of each examining or supervising authority to which it is subject. NAME ADDRESS ---- ------- Federal Reserve Bank (2nd District) New York, NY Federal Deposit Insurance Corporation Washington, D.C. New York State Banking Department Albany, NY (b) Whether it is authorized to exercise corporate trust powers. Yes. ITEM 2. AFFILIATIONS WITH OBLIGOR. If the obligor is an affiliate of the Trustee, describe each such affiliation. None. ITEM 3. -15. NOT APPLICABLE ITEM 16. LIST OF EXHIBITS. EXHIBIT 1 - Restated Organization Certificate of Bankers Trust Company dated August 6, 1998, Certificate of Amendment of the Organization Certificate of Bankers Trust Company dated September 25, 1998, and Certificate of Amendment of the Organization Certificate of Bankers Trust Company dated December 16, 1998, copies attached. EXHIBIT 2 - Certificate of Authority to commence business - Incorporated herein by reference to Exhibit 2 filed with Form T-1 Statement, Registration No. 33-21047. EXHIBIT 3 - Authorization of the Trustee to exercise corporate trust powers - Incorporated herein by reference to Exhibit 2 filed with Form T-1 Statement, Registration No. 33-21047. EXHIBIT 4 - Existing By-Laws of Bankers Trust Company, as amended on May 18, 2001. Copy attached. -2- EXHIBIT 5 - Not applicable. EXHIBIT 6 - Consent of Bankers Trust Company required by Section 321(b) of the Act. - Incorporated herein by reference to Exhibit 4 filed with Form T-1 Statement, Registration No. 22-18864. EXHIBIT 7 - The latest report of condition of Bankers Trust Company dated as of September 30, 2001. Copy attached. EXHIBIT 8 - Not Applicable. EXHIBIT 9 - Not Applicable. -3- SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the trustee, Bankers Trust Company, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on this 20th day of December, 2001. BANKERS TRUST COMPANY By: --------------------------------- Eileen M. Hughes Vice President -4- SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the trustee, Bankers Trust Company, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on this 20th day of December, 2001. BANKERS TRUST COMPANY /s/ Eileen M. Hughes -------------------- By: Eileen M. Hughes Vice President -5- STATE OF NEW YORK, BANKING DEPARTMENT I, MANUEL KURSKY, Deputy Superintendent of Banks of the State of New York, DO HEREBY APPROVE the annexed Certificate entitled "CERTIFICATE OF AMENDMENT OF THE ORGANIZATION CERTIFICATE OF BANKERS TRUST COMPANY UNDER SECTION 8005 OF THE BANKING LAW," dated September 16, 1998, providing for an increase in authorized capital stock from $3,001,666,670 consisting of 200,166,667 shares with a par value of $10 each designated as Common Stock and 1,000 shares with a par value of $1,000,000 each designated as Series Preferred Stock to $3,501,666,670 consisting of 200,166,667 shares with a par value of $10 each designated as Common Stock and 1,500 shares with a par value of $1,000,000 each designated as Series Preferred Stock. WITNESS, my hand and official seal of the Banking Department at the City of New York, this 25TH day of SEPTEMBER in the Year of our Lord one thousand nine hundred and NINETY-EIGHT. Manuel Kursky ------------------------------ Deputy Superintendent of Banks RESTATED ORGANIZATION CERTIFICATE OF BANKERS TRUST COMPANY ------------------------------- Under Section 8007 Of the Banking Law ------------------------------- Bankers Trust Company 130 Liberty Street New York, N.Y. 10006 Counterpart Filed in the Office of the Superintendent of Banks, State of New York, August 31, 1998 RESTATED ORGANIZATION CERTIFICATE OF BANKERS TRUST Under Section 8007 of the Banking Law ------------------------------- We, James T. Byrne, Jr. and Lea Lahtinen, being respectively a Managing Director and an Assistant Secretary and a Vice President and an Assistant Secretary of BANKERS TRUST COMPANY, do hereby certify: 1. The name of the corporation is Bankers Trust Company. 2. The organization certificate of the corporation was filed by the Superintendent of Banks of the State of New York on March 5, 1903. 3. The text of the organization certificate, as amended heretofore, is hereby restated without further amendment or change to read as herein-set forth in full, to wit: "Certificate of Organization of Bankers Trust Company Know All Men By These Presents That we, the undersigned, James A. Blair, James G. Cannon, E. C. Converse, Henry P. Davison, Granville W. Garth, A. Barton Hepburn, Will Logan, Gates W. McGarrah, George W. Perkins, William H. Porter, John F. Thompson, Albert H. Wiggin, Samuel Woolverton and Edward F. C. Young, all being persons of full age and citizens of the United States, and a majority of us being residents of the State of New York, desiring to form a corporation to be known as a Trust Company, do hereby associate ourselves together for that purpose under and pursuant to the laws of the State of New York, and for such purpose we do hereby, under our respective hands and seals, execute and duly acknowledge this Organization Certificate in duplicate, and hereby specifically state as follows, to wit: I. The name by which the said corporation shall be known is Bankers Trust Company. II. The place where its business is to be transacted is the City of New York, in the State of New York. III. Capital Stock: The amount of capital stock which the corporation is hereafter to have is Three Billion One Million, Six Hundred Sixty-Six Thousand, Six Hundred Seventy Dollars ($3,001,666,670), divided into Two Hundred Million, One Hundred Sixty-Six Thousand, Six Hundred Sixty-Seven (200,166,667) shares with a par value of $10 each designated as Common Stock and 1,000 shares with a par value of One Million Dollars ($1,000,000) each designated as Series Preferred Stock. (a) Common Stock 1. Dividends: Subject to all of the rights of the Series Preferred Stock, dividends may be declared and paid or set apart for payment upon the Common Stock out of any assets or funds of the corporation legally available for the payment of dividends. 2. Voting Rights: Except as otherwise expressly provided with respect to the Series Preferred Stock or with respect to any series of the Series Preferred Stock, the Common Stock shall have the exclusive right to vote for the election of directors and for all other purposes, each holder of the Common Stock being entitled to one vote for each share thereof held. 3. Liquidation: Upon any liquidation, dissolution or winding up of the corporation, whether voluntary or involuntary, and after the holders of the Series Preferred Stock of each series shall have been paid in full the amounts to which they respectively shall be entitled, or a sum sufficient for the payment in full set aside, the remaining net assets of the corporation shall be distributed pro rata to the holders of the Common Stock in accordance with their respective rights and interests, to the exclusion of the holders of the Series Preferred Stock. 4. Preemptive Rights: No holder of Common Stock of the corporation shall be entitled, as such, as a matter of right, to subscribe for or purchase any part of any new or additional issue of stock of any class or series whatsoever, any rights or options to purchase stock of any class or series whatsoever, or any securities convertible into, exchangeable for or carrying rights or options to purchase stock of any class or series whatsoever, whether now or hereafter authorized, and whether issued for cash or other consideration, or by way of dividend or other distribution. (b) Series Preferred Stock 1. Board Authority: The Series Preferred Stock may be issued from time to time by the Board of Directors as herein provided in one or more series. The designations, relative rights, preferences and limitations of the Series Preferred Stock, and particularly of the shares of each series thereof, may, to the extent permitted by law, be similar to or may differ from those of any other series. The Board of Directors of the corporation is hereby expressly granted authority, subject to the provisions of this Article III, to issue from time to time Series Preferred Stock in one or more series and to fix from time to time before issuance thereof, by filing a certificate pursuant to the Banking Law, the number of shares in each such series of such class and all designations, relative rights (including the right, to the extent permitted by law, to convert into shares of any class or into shares of any series of any class), preferences and limitations of the shares in each such series, including, buy without limiting the generality of the foregoing, the following: (i) The number of shares to constitute such series (which number may at any time, or from time to time, be increased or decreased by the Board of Directors, notwithstanding that shares of the series may be outstanding at the time of such increase or decrease, unless the Board of Directors shall have otherwise provided in creating such series) and the distinctive designation thereof; (ii) The dividend rate on the shares of such series, whether or not dividends on the shares of such series shall be cumulative, and the date or dates, if any, from which dividends thereon shall be cumulative; (iii) Whether or not the share of such series shall be redeemable, and, if redeemable, the date or dates upon or after which they shall be redeemable, the amount or amounts per share (which shall be, in the case of each share, not less than its preference upon involuntary liquidation, plus an amount equal to all dividends thereon accrued and unpaid, whether or not earned or declared) payable thereon in the case of the redemption thereof, which amount may vary at different redemption dates or otherwise as permitted by law; (iv) The right, if any, of holders of shares of such series to convert the same into, or exchange the same for, Common Stock or other stock as permitted by law, and the terms and conditions of such conversion or exchange, as well as provisions for adjustment of the conversion rate in such events as the Board of Directors shall determine; (v) The amount per share payable on the shares of such series upon the voluntary and involuntary liquidation, dissolution or winding up of the corporation; (vi) Whether the holders of shares of such series shall have voting power, full or limited, in addition to the voting powers provided by law and, in case additional voting powers are accorded, to fix the extent thereof; and (vii) Generally to fix the other rights and privileges and any qualifications, limitations or restrictions of such rights and privileges of such series, provided, however, that no such rights, privileges, qualifications, limitations or restrictions shall be in conflict with the organization certificate of the corporation or with the resolution or resolutions adopted by the Board of Directors providing for the issue of any series of which there are shares outstanding. All shares of Series Preferred Stock of the same series shall be identical in all respects, except that shares of any one series issued at different times may differ as to dates, if any, from which dividends thereon may accumulate. All shares of Series Preferred Stock of all series shall be of equal rank and shall be identical in all respects except that to the extent not otherwise limited in this Article III any series may differ from any other series with respect to any one or more of the designations, relative rights, preferences and limitations described or referred to in subparagraphs (I) to (vii) inclusive above. 2. Dividends: Dividends on the outstanding Series Preferred Stock of each series shall be declared and paid or set apart for payment before any dividends shall be declared and paid or set apart for payment on the Common Stock with respect to the same quarterly dividend period. Dividends on any shares of Series Preferred Stock shall be cumulative only if and to the extent set forth in a certificate filed pursuant to law. After dividends on all shares of Series Preferred Stock (including cumulative dividends if and to the extent any such shares shall be entitled thereto) shall have been declared and paid or set apart for payment with respect to any quarterly dividend period, then and not otherwise so long as any shares of Series Preferred Stock shall remain outstanding, dividends may be declared and paid or set apart for payment with respect to the same quarterly dividend period on the Common Stock out the assets or funds of the corporation legally available therefor. All Shares of Series Preferred Stock of all series shall be of equal rank, preference and priority as to dividends irrespective of whether or not the rates of dividends to which the same shall be entitled shall be the same and when the stated dividends are not paid in full, the shares of all series of the Series Preferred Stock shall share ratably in the payment thereof in accordance with the sums which would be payable on such shares if all dividends were paid in full, provided, however, that any two or more series of the Series Preferred Stock may differ from each other as to the existence and extent of the right to cumulative dividends, as aforesaid. 3. Voting Rights: Except as otherwise specifically provided in the certificate filed pursuant to law with respect to any series of the Series Preferred Stock, or as otherwise provided by law, the Series Preferred Stock shall not have any right to vote for the election of directors or for any other purpose and the Common Stock shall have the exclusive right to vote for the election of directors and for all other purposes. 4. Liquidation: In the event of any liquidation, dissolution or winding up of the corporation, whether voluntary or involuntary, each series of Series Preferred Stock shall have preference and priority over the Common Stock for payment of the amount to which each outstanding series of Series Preferred Stock shall be entitled in accordance with the provisions thereof and each holder of Series Preferred Stock shall be entitled to be paid in full such amount, or have a sum sufficient for the payment in full set aside, before any payments shall be made to the holders of the Common Stock. If, upon liquidation, dissolution or winding up of the corporation, the assets of the corporation or proceeds thereof, distributable among the holders of the shares of all series of the Series Preferred Stock shall be insufficient to pay in full the preferential amount aforesaid, then such assets, or the proceeds thereof, shall be distributed among such holders ratably in accordance with the respective amounts which would be payable if all amounts payable thereon were paid in full. After the payment to the holders of Series Preferred Stock of all such amounts to which they are entitled, as above provided, the remaining assets and funds of the corporation shall be divided and paid to the holders of the Common Stock. 5. Redemption: In the event that the Series Preferred Stock of any series shall be made redeemable as provided in clause (iii) of paragraph 1 of section (b) of this Article III, the corporation, at the option of the Board of Directors, may redeem at any time or times, and from time to time, all or any part of any one or more series of Series Preferred Stock outstanding by paying for each share the then applicable redemption price fixed by the Board of Directors as provided herein, plus an amount equal to accrued and unpaid dividends to the date fixed for redemption, upon such notice and terms as may be specifically provided in the certificate filed pursuant to law with respect to the series. 6. Preemptive Rights: No holder of Series Preferred Stock of the corporation shall be entitled, as such, as a matter or right, to subscribe for or purchase any part of any new or additional issue of stock of any class or series whatsoever, any rights or options to purchase stock of any class or series whatsoever, or any securities convertible into, exchangeable for or carrying rights or options to purchase stock of any class or series whatsoever, whether now or hereafter authorized, and whether issued for cash or other consideration, or by way of dividend. (c) Provisions relating to Floating Rate Non-Cumulative Preferred Stock, Series A. (Liquidation value $1,000,000 per share.) 1. Designation: The distinctive designation of the series established hereby shall be "Floating Rate Non-Cumulative Preferred Stock, Series A" (hereinafter called "Series A Preferred Stock"). 2. Number: The number of shares of Series A Preferred Stock shall initially be 250 shares. Shares of Series A Preferred Stock redeemed, purchased or otherwise acquired by the corporation shall be cancelled and shall revert to authorized but unissued Series Preferred Stock undesignated as to series. 3. Dividends: (a) Dividend Payments Dates. Holders of the Series A Preferred Stock shall be entitled to receive non-cumulative cash dividends when, as and if declared by the Board of Directors of the corporation, out of funds legally available therefor, from the date of original issuance of such shares (the "Issue Date") and such dividends will be payable on March 28, June 28, September 28 and December 28 of each year ("Dividend Payment Date") commencing September 28, 1990, at a rate per annum as determined in paragraph 3(b) below. The period beginning on the Issue Date and ending on the day preceding the first Dividend Payment Date and each successive period beginning on a Dividend Payment Date and ending on the date preceding the next succeeding Dividend Payment Date is herein called a "Dividend Period". If any Dividend Payment Date shall be, in The City of New York, a Sunday or a legal holiday or a day on which banking institutions are authorized by law to close, then payment will be postponed to the next succeeding business day with the same force and effect as if made on the Dividend Payment Date, and no interest shall accrue for such Dividend Period after such Dividend Payment Date. (b) Dividend Rate. The dividend rate from time to time payable in respect of Series A Preferred Stock (the "Dividend Rate") shall be determined on the basis of the following provisions: (i) On the Dividend Determination Date, LIBOR will be determined on the basis of the offered rates for deposits in U.S. dollars having a maturity of three months commencing on the second London Business Day immediately following such Dividend Determination Date, as such rates appear on the Reuters Screen LIBO Page as of 11:00 A.M. London time, on such Dividend Determination Date. If at least two such offered rates appear on the Reuters Screen LIBO Page, LIBOR in respect of such Dividend Determination Dates will be the arithmetic mean (rounded to the nearest one-hundredth of a percent, with five one-thousandths of a percent rounded upwards) of such offered rates. If fewer than those offered rates appear, LIBOR in respect of such Dividend Determination Date will be determined as described in paragraph (ii) below. (ii) On any Dividend Determination Date on which fewer than those offered rates for the applicable maturity appear on the Reuters Screen LIBO Page as specified in paragraph (I) above, LIBOR will be determined on the basis of the rates at which deposits in U.S. dollars having a maturity of three months commencing on the second London Business Day immediately following such Dividend Determination Date and in a principal amount of not less than $1,000,000 that is representative of a single transaction in such market at such time are offered by three major banks in the London interbank market selected by the corporation at approximately 11:00 A.M., London time, on such Dividend Determination Date to prime banks in the London market. The corporation will request the principal London office of each of such banks to provide a quotation of its rate. If at least two such quotations are provided, LIBOR in respect of such Dividend Determination Date will be the arithmetic mean (rounded to the nearest one-hundredth of a percent, with five one-thousandths of a percent rounded upwards) of such quotations. If fewer than two quotations are provided, LIBOR in respect of such Dividend Determination Date will be the arithmetic mean (rounded to the nearest one-hundredth of a percent, with five one-thousandths of a percent rounded upwards) of the rates quoted by three major banks in New York City selected by the corporation at approximately 11:00 A.M., New York City time, on such Dividend Determination Date for loans in U.S. dollars to leading European banks having a maturity of three months commencing on the second London Business Day immediately following such Dividend Determination Date and in a principal amount of not less than $1,000,000 that is representative of a single transaction in such market at such time; provided, however, that if the banks selected as aforesaid by the corporation are not quoting as aforementioned in this sentence, then, with respect to such Dividend Period, LIBOR for the preceding Dividend Period will be continued as LIBOR for such Dividend Period. (ii) The Dividend Rate for any Dividend Period shall be equal to the lower of 18% or 50 basis points above LIBOR for such Dividend Period as LIBOR is determined by sections (I) or (ii) above. As used above, the term "Dividend Determination Date" shall mean, with respect to any Dividend Period, the second London Business Day prior to the commencement of such Dividend Period; and the term "London Business Day" shall mean any day that is not a Saturday or Sunday and that, in New York City, is not a day on which banking institutions generally are authorized or required by law or executive order to close and that is a day on which dealings in deposits in U.S. dollars are transacted in the London interbank market. 4. Voting Rights: The holders of the Series A Preferred Stock shall have the voting power and rights set forth in this paragraph 4 and shall have no other voting power or rights except as otherwise may from time to time be required by law. So long as any shares of Series A Preferred Stock remain outstanding, the corporation shall not, without the affirmative vote or consent of the holders of at least a majority of the votes of the Series Preferred Stock entitled to vote outstanding at the time, given in person or by proxy, either in writing or by resolution adopted at a meeting at which the holders of Series A Preferred Stock (alone or together with the holders of one or more other series of Series Preferred Stock at the time outstanding and entitled to vote) vote separately as a class, alter the provisions of the Series Preferred Stock so as to materially adversely affect its rights; provided, however, that in the event any such materially adverse alteration affects the rights of only the Series A Preferred Stock, then the alteration may be effected with the vote or consent of at least a majority of the votes of the Series A Preferred Stock; provided, further, that an increase in the amount of the authorized Series Preferred Stock and/or the creation and/or issuance of other series of Series Preferred Stock in accordance with the organization certificate shall not be, nor be deemed to be, materially adverse alterations. In connection with the exercise of the voting rights contained in the preceding sentence, holders of all series of Series Preferred Stock which are granted such voting rights (of which the Series A Preferred Stock is the initial series) shall vote as a class (except as specifically provided otherwise) and each holder of Series A Preferred Stock shall have one vote for each share of stock held and each other series shall have such number of votes, if any, for each share of stock held as may be granted to them. The foregoing voting provisions will not apply if, in connection with the matters specified, provision is made for the redemption or retirement of all outstanding Series A Preferred Stock. 5. Liquidation: Subject to the provisions of section (b) of this Article III, upon any liquidation, dissolution or winding up of the corporation, whether voluntary or involuntary, the holders of the Series A Preferred Stock shall have preference and priority over the Common Stock for payment out of the assets of the corporation or proceeds thereof, whether from capital or surplus, of $1,000,000 per share (the "liquidation value") together with the amount of all dividends accrued and unpaid thereon, and after such payment the holders of Series A Preferred Stock shall be entitled to no other payments. 6. Redemption: Subject to the provisions of section (b) of this Article III, Series A Preferred Stock may be redeemed, at the option of the corporation in whole or part, at any time or from time to time at a redemption price of $1,000,000 per share, in each case plus accrued and unpaid dividends to the date of redemption. At the option of the corporation, shares of Series A Preferred Stock redeemed or otherwise acquired may be restored to the status of authorized but unissued shares of Series Preferred Stock. In the case of any redemption, the corporation shall give notice of such redemption to the holders of the Series A Preferred Stock to be redeemed in the following manner: a notice specifying the shares to be redeemed and the time and place of redemption (and, if less than the total outstanding shares are to be redeemed, specifying the certificate numbers and number of shares to be redeemed) shall be mailed by first class mail, addressed to the holders of record of the Series A Preferred Stock to be redeemed at their respective addresses as the same shall appear upon the books of the corporation, not more than sixty (60) days and not less than thirty (30) days previous to the date fixed for redemption. In the event such notice is not given to any shareholder such failure to give notice shall not affect the notice given to other shareholders. If less than the whole amount of outstanding Series A Preferred Stock is to be redeemed, the shares to be redeemed shall be selected by lot or pro rata in any manner determined by resolution of the Board of Directors to be fair and proper. From and after the date fixed in any such notice as the date of redemption (unless default shall be made by the corporation in providing moneys at the time and place of redemption for the payment of the redemption price) all dividends upon the Series A Preferred Stock so called for redemption shall cease to accrue, and all rights of the holders of said Series A Preferred Stock as stockholders in the corporation, except the right to receive the redemption price (without interest) upon surrender of the certificate representing the Series A Preferred Stock so called for redemption, duly endorsed for transfer, if required, shall cease and terminate. The corporation's obligation to provide moneys in accordance with the preceding sentence shall be deemed fulfilled if, on or before the redemption date, the corporation shall deposit with a bank or trust company (which may be an affiliate of the corporation) having an office in the Borough of Manhattan, City of New York, having a capital and surplus of at least $5,000,000 funds necessary for such redemption, in trust with irrevocable instructions that such funds be applied to the redemption of the shares of Series A Preferred Stock so called for redemption. Any interest accrued on such funds shall be paid to the corporation from time to time. Any funds so deposited and unclaimed at the end of two (2) years from such redemption date shall be released or repaid to the corporation, after which the holders of such shares of Series A Preferred Stock so called for redemption shall look only to the corporation for payment of the redemption price. IV. The name, residence and post office address of each member of the corporation are as follows: NAME RESIDENCE POST OFFICE ADDRESS James A. Blair 9 West 50th Street, 33 Wall Street, Manhattan, New York City Manhattan, New York City James G. Cannon 72 East 54th Street, 14 Nassau Street, Manhattan New York City Manhattan, New York City E. C. Converse 3 East 78th Street, 139 Broadway, Manhattan, New York City Manhattan, New York City Henry P. Davison Englewood, 2 Wall Street, New Jersey Manhattan, New York City Granville W. Garth 160 West 57th Street, 33 Wall Street Manhattan, New York City Manhattan, New York City A. Barton Hepburn 205 West 57th Street 83 Cedar Street Manhattan, New York City Manhattan, New York City William Logan Montclair, 13 Nassau Street New Jersey Manhattan, New York City George W. Perkins Riverdale, 23 Wall Street, New York Manhattan, New York City William H. Porter 56 East 67th Street 270 Broadway, Manhattan, New York City Manhattan, New York City John F. Thompson Newark, 143 Liberty Street, New Jersey Manhattan, New York City Albert H. Wiggin 42 West 49th Street, 214 Broadway, Manhattan, New York City Manhattan, New York City Samuel Woolverton Mount Vernon, 34 Wall Street, New York Manhattan, New York City Edward F.C. Young 85 Glenwood Avenue, 1 Exchange Place, Jersey City, New Jersey Jersey City, New Jersey V. The existence of the corporation shall be perpetual. VI. The subscribers, the members of the said corporation, do, and each for himself does, hereby declare that he will accept the responsibilities and faithfully discharge the duties of a director therein, if elected to act as such, when authorized accordance with the provisions of the Banking Law of the State of New York. VII. The number of directors of the corporation shall not be less than 10 nor more than 25." 4. The foregoing restatement of the organization certificate was authorized by the Board of Directors of the corporation at a meeting held on July 21, 1998. IN WITNESS WHEREOF, we have made and subscribed this certificate this 6th day of August, 1998. IN WITNESS WHEREOF, we have made and subscribed this certificate this 6th day of August, 1998. James T. Byrne, Jr. ----------------------------------- James T. Byrne, Jr. Managing Director and Secretary Lea Lahtinen ----------------------------------- Lea Lahtinen Vice President and Assistant Secretary Lea Lahtinen ----------------------------------- Lea Lahtinen State of New York ) ) ss: County of New York ) Lea Lahtinen, being duly sworn, deposes and says that she is a Vice President and an Assistant Secretary of Bankers Trust Company, the corporation described in the foregoing certificate; that she has read the foregoing certificate and knows the contents thereof, and that the statements herein contained are true. Lea Lahtinen ----------------------------------- Lea Lahtinen Sworn to before me this 6th day of August, 1998. Sandra L. West - ---------------------------------------- Notary Public SANDRA L. WEST Notary Public State of New York No. 31-4942101 Qualified in New York County Commission Expires September 19, 1998 STATE OF NEW YORK, BANKING DEPARTMENT I, MANUEL KURSKY, Deputy Superintendent of Banks of the State of New York, DO HEREBY APPROVE the annexed Certificate entitled "RESTATED ORGANIZATION CERTIFICATE OF BANKERS TRUST COMPANY UNDER SECTION 8007 OF THE BANKING LAW," dated August 6, 1998, providing for the restatement of the Organization Certificate and all amendments into a single certificate. WITNESS, my hand and official seal of the Banking Department at the City of New York, this 31ST day of AUGUST in the Year of our Lord one thousand nine hundred and NINETY-EIGHT. Manuel Kursky ------------------------------ DEPUTY Superintendent of Banks CERTIFICATE OF AMENDMENT OF THE ORGANIZATION CERTIFICATE OF BANKERS TRUST Under Section 8005 of the Banking Law -------------------------------- We, James T. Byrne, Jr. and Lea Lahtinen, being respectively a Managing Director and Secretary and a Vice President and an Assistant Secretary of Bankers Trust Company, do hereby certify: 1. The name of the corporation is Bankers Trust Company. 2. The organization certificate of said corporation was filed by the Superintendent of Banks on the 5th of March, 1903. 3. The organization certificate as heretofore amended is hereby amended to increase the aggregate number of shares which the corporation shall have authority to issue and to increase the amount of its authorized capital stock in conformity therewith. 4. Article III of the organization certificate with reference to the authorized capital stock, the number of shares into which the capital stock shall be divided, the par value of the shares and the capital stock outstanding, which reads as follows: "III. The amount of capital stock which the corporation is hereafter to have is Three Billion, One Million, Six Hundred Sixty-Six Thousand, Six Hundred Seventy Dollars ($3,001,666,670), divided into Two Hundred Million, One Hundred Sixty-Six Thousand, Six Hundred Sixty-Seven (200,166,667) shares with a par value of $10 each designated as Common Stock and 1000 shares with a par value of One Million Dollars ($1,000,000) each designated as Series Preferred Stock." is hereby amended to read as follows: "III. The amount of capital stock which the corporation is hereafter to have is Three Billion, Five Hundred One Million, Six Hundred Sixty-Six Thousand, Six Hundred Seventy Dollars ($3,501,666,670), divided into Two Hundred Million, One Hundred Sixty-Six Thousand, Six Hundred Sixty-Seven (200,166,667) shares with a par value of $10 each designated as Common Stock and 1500 shares with a par value of One Million Dollars ($1,000,000) each designated as Series Preferred Stock." 5. The foregoing amendment of the organization certificate was authorized by unanimous written consent signed by the holder of all outstanding shares entitled to vote thereon. IN WITNESS WHEREOF, we have made and subscribed this certificate this 25th day of September, 1998 James T. Byrne, Jr. ------------------------------- James T. Byrne, Jr. Managing Director and Secretary Lea Lahtinen ------------------------------- Lea Lahtinen Vice President and Assistant Secretary State of New York ) ) ss: County of New York ) Lea Lahtinen, being fully sworn, deposes and says that she is a Vice President and an Assistant Secretary of Bankers Trust Company, the corporation described in the foregoing certificate; that she has read the foregoing certificate and knows the contents thereof, and that the statements herein contained are true. Lea Lahtinen ------------------------------- Lea Lahtinen Sworn to before me this 25th day of September, 1998 Sandra L. West - -------------------------------------------- Notary Public SANDRA L. WEST Notary Public State of New York No. 31-4942101 Qualified in New York County Commission Expires September 19, 2000 STATE OF NEW YORK, BANKING DEPARTMENT I, P. VINCENT CONLON, Deputy Superintendent of Banks of the State of New York, DO HEREBY APPROVE the annexed Certificate entitled "CERTIFICATE OF AMENDMENT OF THE ORGANIZATION CERTIFICATE OF BANKERS TRUST COMPANY UNDER SECTION 8005 OF THE BANKING LAW," dated December 16, 1998, providing for an increase in authorized capital stock from $3,501,666,670 consisting of 200,166,667 shares with a par value of $10 each designated as Common Stock and 1,500 shares with a par value of $1,000,000 each designated as Series Preferred Stock to $3,627,308,670 consisting of 212,730,867 shares with a par value of $10 each designated as Common Stock and 1,500 shares with a par value of $1,000,000 each designated as Series Preferred Stock. WITNESS, my hand and official seal of the Banking Department at the City of New York, this 18TH day of DECEMBER in the Year of our Lord one thousand nine hundred and NINETY-EIGHT. P. Vincent Conlon ------------------------------ Deputy Superintendent of Banks CERTIFICATE OF AMENDMENT OF THE ORGANIZATION CERTIFICATE OF BANKERS TRUST Under Section 8005 of the Banking Law ---------------------------------- We, James T. Byrne, Jr. and Lea Lahtinen, being respectively a Managing Director and Secretary and a Vice President and an Assistant Secretary of Bankers Trust Company, do hereby certify: 1. The name of the corporation is Bankers Trust Company. 2. The organization certificate of said corporation was filed by the Superintendent of Banks on the 5th of March, 1903. 3. The organization certificate as heretofore amended is hereby amended to increase the aggregate number of shares which the corporation shall have authority to issue and to increase the amount of its authorized capital stock in conformity therewith. 4. Article III of the organization certificate with reference to the authorized capital stock, the number of shares into which the capital stock shall be divided, the par value of the shares and the capital stock outstanding, which reads as follows: "III. The amount of capital stock which the corporation is hereafter to have is Three Billion, Five Hundred One Million, Six Hundred Sixty-Six Thousand, Six Hundred Seventy Dollars ($3,501,666,670), divided into Two Hundred Million, One Hundred Sixty-Six Thousand, Six Hundred Sixty-Seven (200,166,667) shares with a par value of $10 each designated as Common Stock and 1500 shares with a par value of One Million Dollars ($1,000,000) each designated as Series Preferred Stock." is hereby amended to read as follows: "III. The amount of capital stock which the corporation is hereafter to have is Three Billion, Six Hundred Twenty-Seven Million, Three Hundred Eight Thousand, Six Hundred Seventy Dollars ($3,627,308,670), divided into Two Hundred Twelve Million, Seven Hundred Thirty Thousand, Eight Hundred Sixty- Seven (212,730,867) shares with a par value of $10 each designated as Common Stock and 1500 shares with a par value of One Million Dollars ($1,000,000) each designated as Series Preferred Stock." 5. The foregoing amendment of the organization certificate was authorized by unanimous written consent signed by the holder of all outstanding shares entitled to vote thereon. IN WITNESS WHEREOF, we have made and subscribed this certificate this 16th day of December, 1998 James T. Byrne, Jr. ------------------------------- James T. Byrne, Jr. Managing Director and Secretary Lea Lahtinen ------------------------------- Lea Lahtinen Vice President and Assistant Secretary State of New York ) ) ss: County of New York ) Lea Lahtinen, being fully sworn, deposes and says that she is a Vice President and an Assistant Secretary of Bankers Trust Company, the corporation described in the foregoing certificate; that she has read the foregoing certificate and knows the contents thereof, and that the statements herein contained are true. Lea Lahtinen ------------------------------- Lea Lahtinen Sworn to before me this 16th day of December, 1998 Sandra L. West - -------------------------------------------- Notary Public SANDRA L. WEST Notary Public State of New York No. 31-4942101 Qualified in New York County Commission Expires September 19, 2000 Legal Title of Bank: Bankers Trust Company Call Date: 08/14/01 State#:36-4840 FFIEC 031 Address: 130 Liberty Street Vendor ID: D Cert#: 00623 Page RC-1 City, State ZIP: New York, NY 10006 Transit#: 21001003
11 CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL AND STATE-CHARTERED SAVINGS BANKS FOR SEPTEMBER 30, 2001 All schedules are to be reported in thousands of dollars. Unless otherwise indicated, reported the amount outstanding as of the last business day of the quarter. SCHEDULE RC--BALANCE SHEET
-------------------------------------- Dollar Amounts in Thousands | RCFD | - ------------------------------------------------------------------------------------------------------------------------------- ASSETS | / / / / / / / / / / / / / / / / /| 1. Cash and balances due from depository institutions (from Schedule RC-A): | / / / / / / / / / / / / / / / / /| a. Noninterest-bearing balances and currency and coin (1) ............. | 0081 1,325,000 |1.a. b. Interest-bearing balances (2)....................................... | 0071 397,000 |1.b. 2. Securities: | / / / / / / / / / / / / / / / / /| a. Held-to-maturity securities (from Schedule RC-B, column A) ......... | 1754 0 |2.a. b. Available-for-sale securities (from Schedule RC-B, column D)........ | 1773 133,000 |2.b. 3. Federal funds sold and securities purchased under agreements to resell..... | 1350 8,606,000|3. 4. Loans and lease financing receivables (from Schedule RC-C): | / / / / / / / / / / / / / / / / /| a. Loans and leases held for sale | 5369 0|4.a. b. Loans and leases, net unearned income................... B528 14,588,000 | / / / / / / / / / / / / / / / / /|4.b. c. LESS: Allowance for loan and lease losses 3123 372,000 | / / / / / / / / / / / / / / / / /|4.c. d. Loans and leases, net of unearned income and | / / / / / / / / / / / / / / / / / | allowance (item 4.b minus 4.c) ......................... | B529 14,216,000 |4.d. 5. Trading Assets (from schedule RC-D) .................................... | 3545 14,367,000 |5. 6. Premises and fixed assets (including capitalized leases) ............... | 2145 628,000 |6. 7. Other real estate owned (from Schedule RC-M) ........................... | 2150 108,000 |7. 8. Investments in unconsolidated subsidiaries and associated companies (from Schedule RC-M) | 2130 2,766,000 |8. 9. Customers' liability to this bank on acceptances outstanding ............. | 2155 127,000 |9. 10. Intangible assets ......................................................... | / / / / / / / / / / / / / / / / / | a. Goodwill.................. ...................................... | 3163 54,000 |10.a b. Other intangible assets (from Schedule RC-M) | 0426 9,000 | 10.b 11. Other assets (from Schedule RC-F).................................. | 2160 2,313,000 |11. 12. Total assets (sum of items 1 through 11) ............................. | 2170 45,049,000 |12.
- ----------------------- (1) Includes cash items in process of collection and unposted debits. (2) Includes time certificates of deposit not held for trading. Legal Title of Bank: Bankers Trust Company Call Date: 05/15/01 State#: 364840 Address: 130 Liberty Street Vendor ID: D Cert#: 00623 Page RC-2 City, State ZIP: New York, NY 10006 Transit#: 21001003
12 SCHEDULE RC--CONTINUED
DOLLAR AMOUNTS IN THOUSANDS - ---------------------------------------------------------------------------------------------------------------------------------- LIABILITIES 13. Deposits: | / / / / / / / / / / / / / | a. In domestic offices (sum of totals of columns A and C from Schedule RC-E, part I) | RCON 2200 13,788,000 |13.a. (1) Noninterest-bearing(1) ...................... RCON 6631 3,429,000 | / / / / / / / / / / / / / |13.a.(1) (2) Interest-bearing ............................ RCON 6636 10,359,000 | / / / / / / / / / / / / / |13.a.(2) b. In foreign offices, Edge and Agreement subsidiaries, and IBFs (from Schedule RC-E part II) | RCFN 2200 11,525,000 |13.b. (1) Noninterest-bearing ................................. RCFN 6631 1,115,000 |/ / / / / / / / / / / / / / |13.b.(1) (2) Interest-bearing .................................... RCFN 6636 10,410,000 |/ / / / / / / / / / / / / / |13.b.(2) 14. Federal funds purchased and securities sold under agreements to repurchase | RCFD 2800 5,886,000 |14. 15. Trading liabilities (from Schedule RC-D)................................. | RCFD 3548 2, 576,000 |15. 16. Other borrowed money (includes mortgage indebtedness and obligations under capitalized leases): | / / / / / / / / / / / / / / | (from Schedule RC-M): | RCFD 3190 1,480,000 |16. 17. Not Applicable. | / / / / / / / / / / / / / |17. 18. Bank's liability on acceptances executed and outstanding ................ | RCFD 2920 127,000 |18. 19. Subordinated notes and debentures(2)................................. | RCFD 3200 263,000 |19. 20. Other liabilities (from Schedule RC-G) ..................... | RCFD 2930 2,037,000 |20. 21. Total liabilities (sum of items 13 through 20) ......... | RCFD 2948 37,682,000 |21. 22. Minority interest in consolidated subsidiaries | RCFD 3000 639,000 |22. | / / / / / / / / / / / / / / | | / / / / / / / / / / / / / / | EQUITY CAPITAL 23. Perpetual preferred stock and related surplus ....................... | RCFD 3838 1,500,000 |23. 24. Common stock............................................................ | RCFD 3230 2,127,000 |24. 25. Surplus (exclude all surplus related to preferred stock) ......... | RCFD 3839 585,000 |25. 26. a. Retained earnings ............................................. | RCFD 3632 2,633,000 |26.a. b. Accumulated other comprehensive Income (3) .......................... | RCFD B530 (117,000) |26.b. 27. Other equity capital components (4) .......................................... | RCFD A130 0 |27. 28. Total equity capital (sum of items 23 through 27)..... | RCFD 3210 6,728,000 |28. 29. Total liabilities, minority interest, and equity capital (sum of items 21, 22, and 28)....................................... | RCFD 3300 45,049,000 |29.
Memorandum To be reported only with the March Report of Condition. 1. Indicate in the box at the right the number of the statement below that best describes the most comprehensive level of auditing work performed NUMBER for the bank by independent external auditors as of any date during 2000 ---------------------------------- | RCFD 6724 N/A | M.1 ---------------------------------- 1 = Independent audit of the bank conducted in accordance 5 = Directors' examination of the with generally accepted auditing standards by a certified bank performed by other external public accounting firm which submits a report on the bank auditors (may be required by state chartering authority) 2 = Independent audit of the bank's parent holding company 6 = Review of the bank's financial conducted in accordance with generally accepted auditing statements by external auditors standards by a certified public accounting firm which 7 = Compilation of the bank's submits a report on the consolidated holding company financial statements by external (but not on the bank separately) auditors 8 = Other audit procedures (excluding tax preparation work) 3 = Attestation on bank management's assertion on the 9 = No external audit work effectiveness of the bank's internal control over financial reporting by a certified public accounting firm 4 = Directors' examination of the bank conducted in accordance with generally accepted auditing standards by a certified public accounting firm (may be required by state chartering authority)
- --------------------- (1) Includes total demand deposits and noninterest-bearing time and savings deposits. (2) Includes limited-life preferred stock and related surplus. (3) Includes net unrealized holding gains (losses) on available-for-sale securities, accumulated net gains (losses) on cash flow hedges, cumulative foreign currency translation adjustments, and minimum pension liability adjustments. (4) Includes treasury stock and unearned Employee Stock Plan shares. -----END PRIVACY-ENHANCED MESSAGE-----