Exhibit 99.4
This ADMINISTRATION AGREEMENT is dated as of _________, 2003 (this
"Agreement") between PHEAA STUDENT LOAN TRUST I, a Delaware statutory trust (the
"Issuer"), and PENNSYLVANIA HIGHER EDUCATION ASSISTANCE AGENCY, as administrator
(the "Administrator").
W I T N E S S E T H:
WHEREAS, the Issuer was formed pursuant to the trust agreement, dated
January 15, 2003, by and between the PHEAA Student Loan Foundation, Inc., a
Pennsylvania nonprofit corporation, as depositor (the "Depositor") and Wachovia
Bank of Delaware, National Association, a national banking association, as owner
trustee (the "Owner Trustee"), as amended and restated by the Amended and
Restated Trust Agreement, dated as of ____________, 2003 (the "Trust
Agreement"), by and between the Depositor and the Owner Trustee;
WHEREAS, the Issuer will from time to time issue and sell series of student
loan asset-backed notes (the "Notes") pursuant to the Indenture of Trust dated
as of __________, 2003, among the Issuer, Manufacturers and Traders Trust
Company, as Indenture Trustee, and Manufacturers and Traders Trust Company, as
Eligible Lender Trustee;
WHEREAS, the Issuer is required to perform certain duties in connection
with the Notes and the Indenture;
WHEREAS, the Issuer desires to have the Administrator perform the duties of
the Issuer under the Basic Documents and provide such additional services as the
Issuer may from time to time request; and
WHEREAS, the Administrator has the capacity to provide the services
required hereby and is willing to perform such services for the Issuer on the
terms set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
and other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto, intending to be legally bound, agree as
follows:
Section 1. Representations of the Administrator and the Issuer.
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(a) The Administrator makes the following representations:
(A) Organization and Good Standing. The Administrator is a public
corporation and an instrumentality of the Commonwealth of Pennsylvania, duly
organized and validly existing in good standing under the laws of the
Commonwealth of Pennsylvania. The Administrator has all requisite power and
authority to execute, deliver and perform its obligations under this Agreement.
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(B) Power and Authority of the Administrator. The Administrator has
taken all action necessary to authorize the execution and delivery by it of this
Agreement, and this Agreement has been executed and delivered by one of its
officers who is duly authorized to execute and deliver this Agreement on its
behalf.
(C) Binding Obligation. This Agreement constitutes a legal, valid and
binding obligation of the Administrator, enforceable in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization and similar
laws relating to creditors' rights generally and subject to general principles
of equity.
(D) No Violation. The consummation of the transactions contemplated by
this Agreement and the fulfillment of the terms hereof do not conflict with,
result in any breach of any of the terms and provisions of, nor constitute (with
or without notice or lapse of time or both) a default under, the charter or
by-laws of the Administrator, or any indenture, agreement or other instrument to
which the Administrator is a party or by which it is bound; or result in the
creation or imposition of any Lien upon any of its properties pursuant to the
terms of any such indenture, agreement or other instrument; or violate any law
or, to the knowledge of the Administrator, any order, rule or regulation
applicable to the Administrator of any court or of any federal or state
regulatory body, administrative agency or other governmental instrumentality
having jurisdiction over the Administrator or its properties. Performance by the
Administrator of the terms of this Agreement and of the transactions
contemplated by this Agreement shall not result in the loss of any Guarantee
Payments by the Issuer or any reinsurance payments with respect to any Financed
Student Loan by the applicable Guarantor.
(E) No Proceedings. There are no proceedings or investigations pending
against the Administrator or, to its best knowledge, threatened against the
Administrator, before any court, regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Administrator or its
properties: (i) asserting the invalidity of this Agreement, the Indenture or any
of the other Basic Documents to which the Administrator is a party, (ii) seeking
to prevent the issuance of the Notes or the consummation of any of the
transactions contemplated by this Agreement, the Indenture or any of the other
Basic Documents, (iii) seeking any determination or ruling that could reasonably
be expected to have a material and adverse effect on the performance by the
Administrator of its obligations under, or the validity or enforceability of,
this Agreement, the Indenture, any of the other Basic Documents or the Notes, or
(iv) seeking to affect adversely the federal or state income tax attributes of
the Issuer or the Notes.
(F) All Consents. All authorizations, consents, licenses, orders or
approvals of or registrations or declarations with any court, regulatory body,
administrative agency or other government instrumentality required to be
obtained, effected or given by the Administrator in connection with the
execution and delivery by the Administrator of this Agreement and the
performance by the Administrator of its duties as contemplated by this Agreement
have in each case been duly obtained, effected or given and are in full force
and effect.
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(b) The Issuer makes the following representations:
(A) Organization and Good Standing. The Issuer is a Delaware statutory
trust, duly organized and validly existing in good standing under the laws of
the State of Delaware. The Issuer has all requisite power and authority to
execute, deliver and perform its obligations under this Agreement.
(B) Power and Authority of the Issuer. The Issuer has taken all action
necessary to authorize the execution and delivery by it of this Agreement, and
this Agreement has been executed and delivered by the Owner Trustee who is duly
authorized to execute and deliver this Agreement on its behalf.
(C) Binding Obligation. This Agreement constitutes a legal, valid and
binding obligation of the Issuer, enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization and similar laws
relating to creditors' rights generally and subject to general principles of
equity.
(D) No Violation. The consummation of the transactions contemplated by
this Agreement and the fulfillment of the terms hereof do not conflict with,
result in any breach of any of the terms and provisions of, nor constitute (with
or without notice or lapse of time or both) a default under, the organizational
documents of the Issuer, or any indenture, agreement 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 properties pursuant to the terms of
any such indenture, agreement or other instrument; or violate any law or, to the
knowledge of the Issuer, 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 its
properties. Performance by the Issuer of the terms of this Agreement and of the
transactions contemplated by this Agreement shall not result in the loss of any
Guarantee Payments by the Issuer or any reinsurance payments with respect to any
Financed Student Loan by the applicable Guarantor.
(E) No Proceedings. There are no proceedings or investigations pending
against the Issuer or, to its best knowledge, threatened against the Issuer,
before any court, regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Issuer or its properties: (i)
asserting the invalidity of this Agreement, the Indenture or any of the other
Basic Documents to which the Issuer is a party, (ii) seeking to prevent the
issuance of the Notes or the consummation of any of the transactions
contemplated by this Agreement, the Indenture or any of the other Basic
Documents, (iii) seeking any determination or ruling that could reasonably be
expected to have a material and adverse effect on the performance by the Issuer
of its obligations under, or the validity or enforceability of, this Agreement,
the Indenture, any of the other Basic Documents or the Notes, or (iv) seeking to
affect adversely the federal or state income tax attributes of the Issuer or the
Notes.
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(F) All Consents. All authorizations, consents, licenses, orders or
approvals of or registrations or declarations with any court, regulatory body,
administrative agency or other government instrumentality required to be
obtained, effected or given by the Issuer in connection with the execution and
delivery by the Issuer of this Agreement and the performance by the Issuer of
its duties as contemplated by this Agreement have in each case been duly
obtained, effected or given and are in full force and effect.
Section 2. Duties of the Administrator.
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(a) Duties with Respect to the Basic Documents. The Administrator shall
perform, or cause to be performed, all of its duties as Administrator under this
Agreement and all of the duties of the Issuer under the Basic Documents (except
duties involving the payment of money or any duty to indemnify or hold harmless
any person), including without limitation the actions set forth herein. In
addition, the Administrator shall consult with the Owner Trustee and the
Eligible Lender Trustee as the Administrator deems appropriate regarding the
duties of the Issuer under the Basic Documents. The Administrator shall monitor
the performance of the Issuer and shall advise the Owner Trustee and the
Eligible Lender Trustee when action is necessary to comply with the Issuer's
duties under the Basic Documents. The Administrator shall prepare for execution
by the Issuer or shall cause the preparation by other appropriate Persons of all
such documents, reports, filings, instruments, certificates and opinions as it
shall be the duty of the Issuer to prepare, file or deliver pursuant to the
Basic Documents. In furtherance of the foregoing, the Administrator shall take
all action that is the duty of the Issuer to take pursuant to the Indenture or
any Supplemental Indenture, including the following matters (references below in
this subsection (a) being to sections of the Indenture):
(A) cause books for the registration and for the transfer of the Notes
to be kept by the Indenture Trustee which has been appointed the transfer agent
of the Issuer for the Notes (Section 2.03);
(B) the preparation of or obtaining of the documents and instruments
required for authentication of the Notes and delivery of the same to the
Indenture Trustee (Section 2.08);
(C) the preparation, obtaining or filing of the instruments, opinions
and certificates and other documents required for the release of any Financed
Student Loans from the lien of the Indenture (Section 5.07);
(D) the preparation, obtaining or filing of the instruments, opinions
and certificates and other documents required for a transfer of the Notes
(Section 2.03);
(E) the obtaining and preservation of the Issuer's qualification to do
business in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of the Indenture, the
Notes, and each other instrument and agreement included in the Indenture Trust
Estate (Section 4.11);
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(F) the preparation of all supplements, amendments, financing
statements, continuation statements, instruments of further assurance and other
instruments necessary to protect the Indenture Trust Estate (Section 4.04);
(G) the duty to cause the diligent enforcement of all of the terms,
covenants and conditions of the Servicing Agreement and, if any Servicer Default
arises from the failure of the Servicer to perform any of its duties under the
Servicing Agreement, the taking of all reasonable steps available to remedy such
failure; (Section 4.05);
(H) the preparation of or obtaining documents and instruments required
with respect to the execution of Supplemental Indentures and the mailing to the
Noteholders, each Rating Agency and any Swap Counterparties of notices with
respect to such Supplemental Indentures (Sections 8.01 and 8.02);
(I) the compliance with any written directive of the Indenture Trustee
with respect to the sale of the Indenture Trust Estate in a commercially
reasonable manner if an Event of Default shall have occurred and be continuing
(Section 6.04);
(J) the preparation and, after execution by the Issuer, the filing
with the Commission, any applicable State agencies and the Indenture Trustee of
all documents required to be filed on a periodic basis with, and summaries
thereof as may be required by rules and regulations prescribed by, the
Commission and any applicable State agencies and the transmission of such
summaries to the Noteholders (Section 4.17);
(K) the filing of the Indenture, if applicable (Section 7.03);
(L) the preparation and delivery of monthly statements to the Note
Owners, to the Indenture Trustee and to the Rating Agencies, for the Indenture
Trustee to forward within five (5) days of receipt to each Note Owner (Section
12.04);
(M) the preparation and obtaining of documents and instruments
required by the Student Loan Acquisition Certificate (Exhibit A to the
Indenture);
(N) the direction to the Indenture Trustee as to the investment of
money held in any Fund (Section 5.06); and (O) the preparation and obtaining of
any documents and instruments required for the termination of the Indenture
(Articles X and XI).
(b) Duties with Respect to the Issuer.
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(A) In addition to the duties of the Administrator set forth above and
in the other Basic Documents, the Administrator shall perform such calculations
and shall prepare for execution by the Issuer or shall cause the preparation by
other appropriate
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Persons of all such documents, reports, filings, instruments, certificates and
opinions as it shall be the duty of the Issuer to prepare, file or deliver
pursuant to federal and state securities and tax laws, and shall take all
appropriate action that is the duty of the Issuer to take pursuant to the Basic
Documents. In furtherance thereof, the Issuer shall, execute and deliver to the
Administrator and to each successor Administrator appointed pursuant to the
terms hereof, one or more powers of attorney substantially in the form of
Exhibit B hereto, appointing the Administrator the attorney-in-fact of the
Issuer for the purpose of executing on behalf of the Issuer all such documents,
reports, filings, instruments, certificates and opinions. Subject to Section 9
hereof, the Administrator shall administer, perform or supervise the performance
of such other activities in connection with the Collateral (including the Basic
Documents) as are not covered by any of the foregoing provisions and as are
expressly requested by the Issuer and are reasonably within the capability of
the Administrator.
(B) Notwithstanding anything in this Agreement or the other Basic
Documents to the contrary, the Administrator shall deliver to the Eligible
Lender Trustee, the Indenture Trustee, the Rating Agencies and the Servicer, an
Administrator's Certificate (the "Administrator's Certificate") containing all
the information necessary:
(i) to pay the Department any Consolidation Fees due and payable
to the Department, to the extent such Consolidation Fees are not being deducted
by the Department out of Special Allowance Payments or Interest Subsidy
Payments, which Administrator's Certificate shall be delivered on the date that
is three (3) Business Days prior to the date such fees are to be remitted to the
Department;
(ii) to pay the Depositor, pursuant to Section 2 of the Loan Sale
and Contribution Agreement and the related Loan Transfer Addendum, on each
Transfer Date, the purchase price for Financed Student Loans purchased by the
Eligible Lender Trustee on behalf of the Issuer on such date;
(iii) to pay the Servicer the Servicing Fee from funds on deposit
in the Revenue Fund pursuant to the terms of the Servicing Agreement;
(iv) to make all the distributions required by Sections 2(d),
2(e) and 2(f) hereof to be delivered on each Determination Date; and
(v) to prepare (or cause to be prepared) and furnish (or cause to
be furnished) to each Noteholder and to the Internal Revenue Service and state
and local taxing authorities, as applicable, such tax information, forms and
reports as may be required by applicable law.
(C) In carrying out the foregoing duties or any of its other
obligations under this Agreement, the Administrator may enter into transactions
with or otherwise deal with any of its Affiliates; provided, however, that the
terms of any such transactions or dealings shall be in accordance with any
directions received from the Issuer and shall
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be, in the Administrator's opinion, no less favorable to the Issuer or the
Noteholders than would be available from unaffiliated parties.
(c) Allocations and Distributions. On each Determination Date, the
Administrator shall calculate all amounts required to be transferred from the
Acquisition Fund and the Reserve Fund to the Revenue Fund and from the Revenue
Fund to the Distribution Account and the amounts to be distributed therefrom on
the Distribution Date or other dates from which amounts therein are to be
distributed.
(d) Acquisition Fund. The Administrator shall instruct the Indenture
Trustee to deposit into the Acquisition Fund, the Reserve Fund and such other
funds or accounts as are appropriate, the proceeds derived from the sale of
Notes. The Administrator shall instruct the Indenture Trustee in writing to make
withdrawals from amounts deposited in the Acquisition Fund as provided in the
Indenture.
(e) Revenue Fund. The Administrator shall instruct the Indenture Trustee to
deposit into the Revenue Fund all Revenues derived from Financed Student Loans
and all other Revenues derived from money or assets on deposit in the
Acquisition Fund, the Reserve Fund, all Counterparty Derivative Payments and any
other amounts deposited thereto by the Issuer, all as provided in the Indenture.
The Administrator shall also instruct the Indenture Trustee in writing to make
withdrawals from amounts deposited in the Revenue Fund as provided in the
Indenture.
(f) Reserve Fund. The Administrator shall instruct the Indenture Trustee to
deposit into the Reserve Fund from the proceeds from the sale of the Notes the
amount provided in the related prospectus supplement. The Administrator shall
also instruct the Indenture Trustee in writing to make withdrawals from amounts
deposited in the Reserve Fund as provided in the Indenture.
(g) Statements to Noteholders. The Administrator shall provide to the
Indenture Trustee and any Swap Counterparties (with a copy to the Rating
Agencies) the information required under Section 12.04 of the Indenture.
(h) Non-Ministerial Matters. With respect to matters that in the reasonable
judgment of the Administrator are non-ministerial, the Administrator shall not
take any action unless within a reasonable time before the taking of such
action, the Administrator shall have notified the Indenture Trustee of the
proposed action and the Indenture Trustee shall (except with respect to Section
2(h)(v) below) have consented to it. For the purpose of the preceding sentence,
"non-ministerial matters" shall include, without limitation:
(i) the amendment of or any supplement to the Indenture;
(ii) the initiation of any claim or lawsuit by the Issuer and the
compromise of any action, claim or lawsuit brought by or against the Issuer
(other than in connection with the collection of the Financed Student Loans);
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(iii) the amendment, change or modification of the Basic
Documents;
(iv) the appointment of successor Indenture Trustees pursuant to
the Indenture or the appointment of successor Administrators or successor
Servicers, or the consent to the assignment by the Indenture Trustee of its
obligations under the Indenture; and
(v) the removal of the Indenture Trustee.
(i) Swap Agreements. The Administrator may, from time to time, direct the
Issuer to enter into Swap Agreements or amendments to Swap Agreements pursuant
to the terms of any Supplemental Indenture, provided that after entering into
such Swap Agreement or amendment to such Swap Agreement, the notional amount of
all of Swap Agreements to which the Issuer is a party is less than or equal to
the outstanding principal balance of the Notes.
(j) Qualification of Issuer. The Administrator shall provide to the Owner
Trustee and the Eligible Lender Trustee a list of jurisdictions in which the
Issuer is required to be licensed.
Section 3. Annual Statement as to Compliance.
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(a) The Administrator shall deliver to the Owner Trustee, the Indenture
Trustee and any Swap Counterparties, on or before March 15 of each year
beginning March 15, 2004, an Administrator's Certificate relating to the period
ending on December 31st of the preceding calendar year, stating that (i) a
review of the activities of the Administrator during the preceding 12-month
period (or, in the case of the first such certificate, during the preceding
calendar year ) and of its performance under this Agreement has been made under
such officer's supervision and (ii) to the best of such officer's knowledge,
based on such review, the Administrator has fulfilled all its obligations under
this Agreement throughout such year or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to such
officer and the nature and status thereof. The Indenture Trustee shall send a
copy of each such Administrator's Certificate to the Rating Agencies. A copy of
such Administrator's Certificate and each report referred to in Section 4 may be
obtained by any Noteholder or Note Owner by a request in writing to the
Indenture Trustee addressed to its Corporate Trust Office, together with
evidence satisfactory to the Indenture Trustee that such Person is a Noteholder
or Note Owner.
(b) The Administrator shall deliver to the Issuer, the Indenture Trustee
and any Swap Counterparties, promptly after having obtained knowledge thereof,
but in no event later than two (2) Business Days thereafter, written notice in
an Administrator's Certificate of the Administrator of any event which with the
giving of notice or lapse of time, or both, would become an Administrator
Default under Section 12 hereof.
Section 4. Annual Independent Certified Public Accountants' Report. The
Administrator shall cause a firm of independent certified public accountants,
which may also
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render other services to the Administrator, to deliver to the Owner Trustee, the
Indenture Trustee and any Swap Counterparties on or before [September 25] of
each year beginning [September 25,] 2004, a report addressed to the
Administrator, the Owner Trustee, the Eligible Lender Trustee, the Indenture
Trustee and any Swap Counterparties (which report may be combined with other
reports required to be delivered by such accountants to the Administrator, the
Owner Trustee, the Eligible Lender Trustee and the Indenture Trustee under the
Basic Documents), to the effect that such firm has examined certain documents
and records relating to the administration of the Financed Student Loans and of
the Issuer during the Administrator's preceding fiscal year ended June 30 (or,
in the case of the first such report, during the period from a Closing Date to
June 30) and that, on the basis of the accounting and auditing procedures
considered appropriate under the circumstances, such firm is of the opinion that
the administration of the Issuer was conducted in compliance with the terms of
this Agreement, except for (i) such exceptions as such firm shall believe to be
immaterial and (ii) such other exceptions as shall be set forth in such report.
The Indenture Trustee shall send a copy of each such report to the Rating
Agencies.
Such report will also indicate that the firm is independent of the
Administrator within the meaning of the Code of Professional Ethics of the
American Institute of Certified Public Accountants.
Section 5. Administrator Expenses. The Administrator shall be required to
pay all expenses incurred by it in connection with its activities hereunder,
including fees and disbursements of independent accountants, taxes imposed on
the Administrator and expenses incurred in connection with distributions and
reports to the Noteholders and any Swap Counterparties.
Section 6. Records. The Administrator shall maintain appropriate books of
account and records relating to services performed hereunder, which books of
account and records shall be accessible for inspection by the Issuer at any time
during normal business hours.
Section 7. Compensation. Subject to the terms of the Indenture, as
compensation for the performance of the Administrator's obligations under this
Agreement and as reimbursement for its expenses related thereto, the
Administrator shall be entitled to a fee of $_____per loan per month on all
Financed Student Loans, paid monthly in arrears commencing ___________, 2003,
subject to an annual increase of __% (the "Administration Fee"), which shall be
solely an obligation of the Issuer and payable solely from the Revenue Fund.
Section 8. Additional Information to Be Furnished. The Administrator shall
furnish to the Issuer and any Swap Counterparties from time to time such
additional information regarding the Collateral as the Issuer or any Swap
Counterparty shall reasonably request. Following the time, if any, that any Swap
Counterparty's counterparty ratings fall below "A3" by Xxxxx'x, "A-" by S&P,
"A-" by Fitch or their equivalent, upon request of a Rating Agency, the
Administrator shall furnish to such Rating Agency, cash flow projections for the
Issuer.
Section 9. Independence of the Administrator. For all purposes of this
Agreement, the Administrator shall be an independent contractor and shall not be
subject to the
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supervision of the Issuer with respect to the manner in which it accomplishes
the performance of its obligations hereunder. Unless expressly authorized by the
Issuer, the Administrator shall have no authority to act for or represent the
Issuer in any way and shall not otherwise be deemed an agent of the Issuer.
Section 10. No Joint Venture. Nothing contained in this Agreement (i) shall
constitute the Administrator and the Issuer as members of any partnership, joint
venture, association, syndicate, unincorporated business or other separate
entity, (ii) shall be construed to impose any liability as such on any of them
or (iii) shall be deemed to confer on any of them any express, implied or
apparent authority to incur any obligation or liability on behalf of the other.
Section 11. Other Activities of Administrator. Nothing herein shall prevent
the Administrator or its Affiliates from engaging in other businesses or, in its
sole discretion, from acting in a similar capacity as an administrator for any
other Person even though such Person may engage in business activities similar
to those of the Issuer or the Indenture Trustee.
Section 12. Administrator Default. For the purposes of this Agreement and
the Indenture, each of the following events shall constitute an Administrative
Default:
(a) any failure by the Administrator to direct the Indenture Trustee to
make any required distributions from any of the Trust Accounts, which failure
continues unremedied for five (5) Business Days after written notice of such
failure is received by the Administrator from the Indenture Trustee or after
discovery of such failure by an officer of the Administrator; or
(b) any failure by the Administrator to duly observe or to perform in any
material respect any other covenants or agreements of the Administrator set
forth in this Agreement or any other Basic Documents, which failure shall (i)
materially and adversely affect the rights of Noteholders and (ii) continues
unremedied for a period of sixty (60) days after the date of discovery of such
failure by an officer of the Administrator or on which written notice of such
failure, requiring the same to be remedied, shall have been given (A) to the
Administrator by the Indenture Trustee or (B) to the Administrator and to the
Indenture Trustee by the Noteholders representing not less than 25% of the
Outstanding Amount of the Notes; or
(c) the occurrence of an Event of Insolvency involving the Administrator;
or
(d) any representation or warranty made by the Administrator hereunder or
under any other Basic Document, or in any certificate furnished by the
Administrator hereunder or under any Basic Document, shall prove to be untrue or
incomplete in any material respect.
In the event of any Administrator Default, and so long as such default
remains unremedied, either the Indenture Trustee, or the Noteholders evidencing
not less than 25% of the Outstanding Amount of the Notes, by notice then given
in writing to the Administrator (and to the Indenture Trustee, the Issuer and
the Swap Counterparty if given by the Noteholders), may terminate all the rights
and obligations (other than the obligations set forth in Section 24 hereof) of
the Administrator under this Agreement. On or after the receipt by the
Administrator of such
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written notice, all authority and power of the Administrator under this
Agreement, whether with respect to the Notes or the Financed Student Loans or
otherwise, shall, without further action, pass to and be vested in the Indenture
Trustee or such successor Administrator as may be appointed under Section 13
hereof; and the Indenture Trustee and the Issuer are hereby authorized and
empowered to execute and deliver, for the benefit of the predecessor
Administrator, as attorney-in-fact or otherwise, any and all documents and other
instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination. The
predecessor Administrator shall cooperate with the successor Administrator, the
Indenture Trustee, the Issuer and the Eligible Lender Trustee in effecting the
termination of the responsibilities and rights of the predecessor Administrator
under this Agreement. All reasonable costs and expenses (including attorneys'
fees and expenses) incurred in connection with such transfer of responsibilities
and amending this Agreement to reflect such succession as Administrator pursuant
to this Section shall be paid by the predecessor Administrator upon presentation
of reasonable documentation of such costs and expenses. Upon receipt of notice
of the occurrence of an Administrator Default, the Indenture Trustee shall give
notice thereof to the Rating Agencies and any Swap Counterparties.
Section 13. Appointment of Successor.
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(a) Upon receipt by the Administrator of notice of termination pursuant to
Section 12 hereof, or the resignation by the Administrator in accordance with
the terms of this Agreement, the predecessor Administrator shall continue to
perform its functions as Administrator, in the case of termination, only until
the date specified in such termination notice or, if no such date is specified
in a notice of termination, until a successor Administrator has accepted and
assumed the responsibilities of the Administrator and, in the case of
resignation, until the earlier of (x) the date one hundred and twenty (120) days
from the delivery to the Issuer and the Indenture Trustee of written notice of
such resignation (or written confirmation of such notice) in accordance with the
terms of this Agreement and (y) the date upon which the predecessor
Administrator shall become legally unable to act as Administrator as specified
in the notice of resignation and accompanying Opinion of Counsel. In the event
of termination hereunder of the Administrator, the Issuer shall appoint a
successor Administrator acceptable to the Indenture Trustee and the successor
Administrator shall accept its appointment by a written assumption in form
acceptable to the Indenture Trustee. In the event that a successor Administrator
has not been appointed at the time when the predecessor Administrator has ceased
to act as Administrator in accordance with this Section, the Indenture Trustee
without further action shall automatically be appointed the successor
Administrator and the Indenture Trustee shall be entitled to the Administration
Fee. Notwithstanding the above, the Indenture Trustee (with prior written notice
to any Swap Counterparties ) shall, if it shall be unwilling or legally unable
so to act, appoint or petition a court of competent jurisdiction to appoint, as
the successor to the Administrator under this Agreement, any established
institution the regular business of which includes the servicing or
administration of student loans.
(b) Upon appointment, the successor Administrator (including the Indenture
Trustee acting as successor Administrator) shall be the successor in all
respects to the predecessor Administrator and shall be subject to all the
responsibilities, duties and liabilities placed on the predecessor Administrator
that arise thereafter or are related thereto and shall be
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entitled to an amount agreed to by such successor Administrator (which shall not
exceed the Administration Fee unless the Swap Counterparties, if any, give their
prior written consent and such compensation arrangements will not result in a
downgrading of the Senior Notes or the Subordinate Notes by any Rating Agency),
and all the rights granted to the predecessor Administrator by the terms and
provisions of this Agreement.
(c) The Administrator may not resign unless it is prohibited from serving
as such under applicable law or any final order of a court or administrative
agency with jurisdiction over the Administrator or its properties, as evidenced
by an Opinion of Counsel to such effect delivered to the Indenture Trustee, the
Issuer and the Eligible Lender Trustee. Notwithstanding the foregoing or
anything to the contrary herein or in the Basic Documents, the Indenture
Trustee, to the extent it is acting as successor Administrator pursuant hereto,
shall be entitled to resign to the extent a qualified successor Administrator
has been appointed and has assumed all the obligations of the Administrator in
accordance with the terms of this Agreement and the Basic Documents.
Section 14. Notification to Noteholders. Upon any termination of, or
appointment of a successor to, the Administrator pursuant to Section 12 or 13,
the Indenture Trustee shall give prompt written notice thereof to Noteholders,
any Swap Counterparties and the Rating Agencies (which, in the case of any such
appointment of a successor, shall consist of prior written notice thereof to the
Rating Agencies).
Section 15. Waiver of Past Defaults. The Noteholders of Notes evidencing
not less than a majority of the Outstanding Amount of the Notes may, on behalf
of all Noteholders, waive in writing any default by the Administrator in the
performance of its obligations hereunder and any consequences thereof, except a
default in making any required deposits to or payments from any of the Trust
Accounts (or giving instructions regarding the same) in accordance with this
Agreement. Upon any such waiver of a past default, such default shall cease to
exist, and any Administrator Default arising therefrom shall be deemed to have
been remedied for every purpose of this Agreement to the extent provided in such
waiver. No such waiver shall extend to any subsequent or other default or impair
any right consequent thereto.
Section 16. Notices. Any notice, report or other communication given
hereunder shall be in writing (or in the form of facsimile notice, followed by
written notice) sent by the United States first class mail postage prepaid and
addressed as follows:
12
(a) if to the Issuer, to
PHEAA Student Loan Trust I
c/o Bank of Delaware, National Association
One Xxxxxx Square, Suite 102
000 Xxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Administration
Telephone: (302) 888 - 7528
Facsimile: (302) 888 - 7544
(b) if to the Eligible Lender Trustee, to
Manufacturers and Traders Trust Company
000 Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Corporate Trust Services
Telephone: (717) 255 - 2323
Facsimile: (717) 231 - 2608
(c) if to the Administrator, to
The Pennsylvania Higher Education Assistance Agency
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
Attention: ______________________
Telephone: (717)
Facsimile: (717)
(d) if to the Indenture Trustee, to
Manufacturers and Traders Trust Company
000 Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Corporate Trust Services
Telephone: (717) 255 - 2323
Facsimile: (717) 231 - 2608
(e) if to any Swap Counterparties, to the address specified in any Swap
Agreements or to such other address as any party shall have provided to the
other parties in writing. Any notice required to be in writing hereunder shall
be deemed given if such notice is mailed by certified mail, postage prepaid, or
hand-delivered to the address of such party as provided above.
13
Section 17. Amendments. This Agreement may be amended from time to time by
a written amendment duly executed and delivered by the Issuer and the
Administrator, with the prior written consent of any Swap Counterparties, but
without the consent of the Noteholders, for the purpose of adding any provisions
to or changing in any manner or eliminating any of the provisions of this
Agreement or of modifying in any manner the rights of the Noteholders; provided,
however, that such amendment will not, in an Opinion of Counsel obtained on
behalf of the Issuer and satisfactory to the Indenture Trustee, materially and
adversely affect the interest of any Noteholder. This Agreement may also be
amended by the Issuer and the Administrator, with the prior written consent of
any Swap Counterparties and the Noteholders of at least a majority in
Outstanding Amount of the Notes for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement or
of modifying in any manner the rights of Noteholders; provided, however, that no
such amendment may (i) increase or reduce in any manner the amount of, or
accelerate or delay the timing of, collections of payments with respect to the
Financed Student Loans or distributions that are required to be made for the
benefit of the Noteholders or (ii) reduce the aforesaid percentage of the
Noteholders which are required to consent to any such amendment, without the
consent of all Outstanding Noteholders. Prior to the execution of any such
amendment, the Administrator shall furnish written notification of the substance
of such amendment to each of the Rating Agencies.
Section 18. Assignment. Except as provided herein or as contemplated by the
Indenture, this Agreement may not be assigned by either party without the prior
written consent of the other party; provided, however, the Administrator may
assign its obligations and duties as administrator to an Affiliate if the Rating
Agencies provide a Rating Confirmation.
Section 19. Governing Law. This Agreement shall be construed in accordance
with the laws of the Commonwealth of Pennsylvania, without reference to its
conflict of laws provisions, and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws.
Section 20. Headings. The section headings hereof have been inserted for
convenience of reference only and shall not be construed to affect the meaning,
construction or effect of this Agreement.
Section 21. Counterparts. This Agreement may be executed in counterparts,
each of which when so executed shall together constitute but one and the same
agreement.
Section 22. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall be ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
Section 23. Not Applicable to The Pennsylvania Higher Education Assistance
Agency in Other Capacities. Nothing in this Agreement shall affect any
obligation The Pennsylvania Higher Education Assistance Agency may have in any
other capacity under any other Basic Documents.
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Section 24. Liability of Administrator; Indemnities. The Administrator
shall be liable in accordance herewith only to the extent of the obligations
specifically undertaken by the Administrator under this Agreement.
The Administrator shall indemnify, defend and hold harmless the Issuer, the
Owner Trustee (in its individual and trustee capacities),and the Indenture
Trustee, and any of the officers, directors, employees and agents of the Issuer,
the Indenture Trustee, and the Owner Trustee from and against any and all costs,
expenses, losses, claims, damages and liabilities to the extent that such cost,
expense, loss, claim, damage or liability arose out of the negligence, willful
misfeasance or bad faith of the Administrator in the performance of its duties
under this Agreement or by reason of reckless disregard of its obligations and
duties hereunder.
For purposes of this Section, in the event of the termination of the rights
and obligations of the Administrator (or any successor thereto pursuant to
Section 25 hereof) as Administrator pursuant to Section 12 hereof or a
resignation by such Administrator pursuant to this Agreement, such Administrator
shall be deemed to be the Administrator pending appointment of a successor
Administrator pursuant to Section 13 hereof.
Indemnification under this Section shall survive the resignation or removal
of the Owner Trustee and the Indenture Trustee or the termination of this
Agreement and shall include reasonable fees and expenses of counsel and expenses
of litigation. If the Administrator shall have made any indemnity payments
pursuant to this Agreement and the Person to or on behalf of whom such payments
are made thereafter collects any of such amounts from others, such Person shall
promptly repay such amounts to the Administrator, without interest.
Section 25. Merger or Consolidation of, or Assumption of the Obligations
of, Administrator. Any Person (a) into which the Administrator may be merged or
consolidated, (b) which may result from any merger or consolidation to which the
Administrator shall be a party or (c) which may succeed to the properties and
assets of the Administrator substantially as a whole, shall be the successor to
the Administrator without the execution or filing of any document or any further
act by any of the parties to this Agreement; provided, however, that the
Administrator hereby covenants that it will not consummate any of the foregoing
transactions except upon satisfaction of the following: (i) the surviving
Administrator, if other than The Pennsylvania Higher Education Assistance
Agency, executes an agreement of assumption to perform every obligation of the
Administrator under this Agreement, (ii) immediately after giving effect to such
transaction, no representation or warranty made pursuant to Section 1 shall have
been breached and no Administrator Default, and no event that, after notice or
lapse of time or both would become an Administrator Default, shall have occurred
and be continuing and (iii) the Administrator shall have delivered to the
Indenture Trustee and any Swap Counterparties an Administrator's Certificate or
an Opinion of Counsel stating that such consolidation, merger or succession and
such agreement of assumption comply with this Section and that all conditions
precedent, if any, provided for in this Agreement relating to such transaction
have been complied with, and that the Rating Agency Condition shall have been
satisfied with respect to such transaction.
15
Section 26. Limitation on Liability of Administrator and Others. Neither
the Administrator nor any of its directors, officers, employees or agents shall
be under any liability to the Issuer, the Noteholders, the Indenture Trustee or
any Swap Counterparties, except as provided under this Agreement, for any action
taken or for refraining from the taking of any action pursuant to this Agreement
or for errors in judgment; provided, however, that this provision shall not
protect the Administrator or any such person against any liability that would
otherwise be imposed by reason of willful misfeasance, bad faith or negligence
in the performance of its duties or by reason of reckless disregard of
obligations and its duties under this Agreement. The Administrator and any of
its directors, officers, employees or agents may rely in good faith on the
advice of counsel or on any document of any kind prima facie properly executed
and submitted by any Person respecting any matters arising hereunder.
Except as provided in this Agreement, the Administrator shall not be under
any obligation to appear in, prosecute or defend any legal action that shall not
be incidental to its duties to administer the Financed Student Loans and the
Issuer in accordance with this Agreement, and that in its opinion may involve it
in any expense or liability; provided, however, that the Administrator may
undertake any reasonable action that it may deem necessary or desirable in
respect of this Agreement and the other Basic Documents and the rights and
duties of the parties to this Agreement and the Basic Documents and the
interests of the Noteholders under the Indenture.
Section 27. The Pennsylvania Higher Education Assistance Agency Not to
Resign as Administrator. Subject to the provisions of Sections 18 and 25 hereof,
The Pennsylvania Higher Education Assistance Agency shall not resign from the
obligations and duties imposed on it as Administrator under this Agreement
except upon determination that the performance of its duties under this
Agreement shall no longer be permissible under applicable law or shall violate
any final order of a court or administrative agency with jurisdiction over The
Pennsylvania Higher Education Assistance Agency or its properties, as evidenced
by an Opinion of Counsel to such effect delivered to the Indenture Trustee, the
Issuer and the Eligible Lender Trustee. Notice of any such determination
permitting the resignation of The Pennsylvania Higher Education Assistance
Agency shall be communicated to the Indenture Trustee and any Swap
Counterparties at the earliest practicable time (and, if such communication is
not in writing, shall be confirmed in writing at the earliest practicable time)
and any such determination shall be evidenced by an Opinion of Counsel to such
effect delivered to the Indenture Trustee and any Swap Counterparties
concurrently with or promptly after such notice. No such resignation shall
become effective until the Indenture Trustee or a successor Administrator shall
have assumed the responsibilities and obligations of The Pennsylvania Higher
Education Assistance Agency in accordance with Section 13 hereof.
Section 28. Limitation of Liability of the Indenture Trustee.
Notwithstanding anything contained herein to the contrary this Agreement has
been acknowledged by Manufacturers and Traders Trust Company not in its
individual capacity but solely as Indenture Trustee and in no event shall
Manufacturers and Traders Trust Company have any liability for the
representations, warranties, covenants, agreements or other obligations of the
Issuer hereunder or in any of the certificates, notices or agreements delivered
pursuant hereto, as to all of which recourse shall be had solely to the assets
of the Issuer.
16
Section 29. Limitation of Liability of the Owner Trustee. It is expressly
understood and agreed by the parties hereto that (a) this Agreement is executed
and delivered by the Owner Trustee, not individually or personally but solely as
owner trustee of the Issuer, in the exercise of the powers and authority
conferred and vested in it under the Trust Agreement, (b) each of the
representations, undertakings and agreements herein made on the part of the
Issuer is made and intended not as personal representations, undertakings and
agreements by the Owner Trustee but is made and intended for the purpose of
binding only the Issuer and (c) under no circumstances shall the Owner Trustee
be personally liable for the payment of any indebtedness or expenses of the
Issuer or be liable for the breach or failure of any obligation, representation,
warranty or covenant made or undertaken by the Issuer under this Agreement or
the other Basic Documents.
Section 30. Limitation of Liability of Eligible Lender Trustee.
Notwithstanding any other provision in this Agreement or the other Basic
Documents, nothing in this Agreement or the other Basic Documents shall be
construed to limit the legal responsibility of the Eligible Lender Trustee or
the Indenture Trustee to the U.S. Secretary of Education or a Guarantor for any
violations of statutory or regulatory requirements that may occur with respect
to loans held by the Eligible Lender Trustee or the Indenture Trustee pursuant
to, or to otherwise comply with their obligations under, the Higher Education
Act or implementing regulations.
Section 31. Third-Party Beneficiaries. The Noteholders and any Swap
Counterparties are third-party beneficiaries to this Agreement and are entitled
to the rights and benefits hereunder and may enforce the provisions hereof as if
they were parties hereto; provided, however, that in the case of any Swap
Counterparty, such right to enforcement and the right to provide consents or
waivers pursuant to the provisions hereof or to take other actions as provided
herein are conditioned upon its not being in default under its Swap Agreement.
Section 32. Consents. With respect to any action to be taken hereunder that
requires the consent of a party hereto or of the Owner Trustee or the Indenture
Trustee, such consent shall not be unreasonably withheld, delayed or
conditioned.
Section 33. Defined Terms. Capitalized terms used herein and not defined
herein shall have the meanings given to such terms in the Indenture.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.
17
PHEAA STUDENT LOAN TRUST I
By: WACHOVIA BANK OF DELAWARE, NATIONAL ASSOCIATION
not in its individual capacity but solely as Owner Trustee
By:
----------------------------------------------------------
Name:
--------------------------
Title:
--------------------------
THE PENNSYLVANIA HIGHER EDUCATION ASSISTANCE AGENCY,
as Administrator
By:
----------------------------------------------------------
Name:
--------------------------
Title:
--------------------------
Acknowledged by:
WACHOVIA BANK OF DELAWARE, NATIONAL ASSOCIATION,
not in its individual capacity but solely as Owner Trustee
By:
----------------------------------------------------------
Name:
--------------------------
Title:
--------------------------
MANUFACTURERS AND TRADERS TRUST COMPANY, not in its
individual capacity but solely as Indenture Trustee
By:
----------------------------------------------------------
Name:
--------------------------
Title:
--------------------------
18
EXHIBIT A
FORM OF
STUDENT LOAN ACQUISITION CERTIFICATE
19
EXHIBIT B
FORM OF
POWER OF ATTORNEY
STATE OF
-----------:
: ss.
COUNTY OF
-----------:
KNOW ALL MEN BY THESE PRESENTS, PHEAA Student Loan Trust I (the "Issuer")
does hereby make, constitute and appoint The Pennsylvania Higher Education
Assistance Agency, as Administrator under the Administration Agreement (as
defined below), and its agents and attorneys, as Agents and Attorneys-in-Fact of
the Issuer, to execute on behalf of the Issuer all such documents, reports,
filings (including filings under the Uniform Commercial Code as adopted in any
relevant jurisdiction), instruments, certificates and opinions as it should be
the duty of the Issuer to prepare, file or deliver pursuant to the Basic
Documents (as defined in the Administration Agreement), including without
limitation, to appear for and represent the Issuer in connection with the
preparation, filing and audit of any federal, state and local tax returns
pertaining to the Issuer, and with full power to perform any and all acts
associated with such returns and audits that the Issuer could perform, including
without limitation, the right to distribute and receive confidential
information, defend and assert positions in response to audits, initiate and
defend litigation, and to execute waivers of restriction on assessments of
deficiencies, consents to the extension of any statutory or regulatory time
limit, and settlements. For the purpose of this Power of Attorney, the term
"Administration Agreement" means the Administration Agreement dated as of
_______________, 2003, between the Issuer and The Pennsylvania Higher Education
Assistance Agency, as Administrator as such may be amended from time to time.
All powers of attorney for this purpose heretofore filed or executed by
Issuer are hereby revoked.
EXECUTED as of __________, 200_.
PHEAA STUDENT LOAN TRUST I
By: WACHOVIA TRUST BANK OF DELAWARE, NATIONAL ASSOCIATION,
not in its individual capacity but solely as Owner Trustee
By:
----------------------------------------------------------
Name:
--------------------------
Title:
--------------------------
20
STATE OF
-----------:
:ss.
COUNTY OF
-----------:
Before me, the undersigned authority, on this day personally appeared
[____________________________] known to me to be the person whose name is
subscribed to the foregoing instrument, and acknowledged to me that such person
signed the same for the purposes and considerations therein expressed.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this [_______] day of [_______].
--------------------------------------------
Notary Public in and for the
State of
-------------
(SEAL)
--------------------------------------------
Printed Name of Notary Public
My commission expires:
----------------------
21
