Exhibit 99.4
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FORM OF
ADMINISTRATION AGREEMENT
among
XXXXXX XXX SERVICING L.P.,
as Servicer
SLM EDUCATION CREDIT FUNDING LLC,
as Depositor
XXXXXX MAE, INC.,
as Administrator
JPMORGAN CHASE BANK,
as Indenture Trustee
and
SLM PRIVATE CREDIT STUDENT LOAN TRUST 200_-_,
as Issuer
Dated as of ___________, 200_
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TABLE OF CONTENTS
Page
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ARTICLE I
Section 1.01. Definitions and Usage ........................................................ 1
ARTICLE II
Section 2.01. Duties with Respect to the Indenture ......................................... 2
Section 2.02. Duties with Respect to the Issuer ............................................ 3
Section 2.03. Establishment of Trust Accounts .............................................. 4
Section 2.04. Collections 6
Section 2.05. Application of Collections ................................................... 7
Section 2.06. Additional Deposits .......................................................... 7
Section 2.07. Distributions ................................................................ 8
Section 2.08. Reserve Account .............................................................. 10
Section 2.09. Statements to Certificateholders and Noteholders ............................. 12
Section 2.10. Non-Ministerial Matters ...................................................... 13
Section 2.11. Exceptions ................................................................... 13
Section 2.12. Compensation ................................................................. 14
Section 2.13. Servicer and Administrator Expenses .......................................... 14
ARTICLE III
Section 3.01. Administrator's Certificate; Servicer's Report ............................... 14
Section 3.02. Annual Statement as to Compliance; Notice of Default; Financial Statements ... 15
Section 3.03. Annual Independent Certified Public Accountants' Reports ..................... 16
ARTICLE IV
Section 4.01. Representations of Administrator ............................................. 16
Section 4.02. Liability of Administrator; Indemnities ...................................... 17
Section 4.03. Merger or Consolidation of, or Assumption of the Obligations of, Administrator 19
Section 4.04. Limitation on Liability of Depositor, Administrator and Others ............... 20
Section 4.05. Administrator May Own Certificates or Notes .................................. 20
Section 4.06. Student Loan Marketing Association Not to Resign as Administrator ............ 20
ARTICLE V
Section 5.01. Administrator Default ........................................................ 21
Section 5.02. Appointment of Successor ..................................................... 22
Section 5.03. Notification to Noteholders and Certificateholders ........................... 23
Section 5.04. Waiver of Past Defaults ...................................................... 23
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Page
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ARTICLE VI
Section 6.01. Termination ................................................................. 23
ARTICLE VII
Section 7.01. Protection of Interests in Trust ............................................. 25
ARTICLE VIII
Section 8.01. Independence of the Administrator ............................................ 27
Section 8.02. No Joint Venture ............................................................. 27
Section 8.03. Other Activities of Administrator ............................................ 27
Section 8.04. Powers of Attorney ........................................................... 27
Section 8.05. Amendment .................................................................... 27
Section 8.06. Assignment ................................................................... 28
Section 8.07. Limitations on Rights of Others .............................................. 28
Section 8.08. Assignment to Indenture Trustee .............................................. 29
Section 8.09. Nonpetition Covenants ........................................................ 29
Section 8.10. Limitation of Liability of Trustee and Indenture Trustee ..................... 29
Section 8.11. Governing Law ................................................................ 30
Section 8.12. Headings ..................................................................... 30
Section 8.13. Counterparts ................................................................. 30
Section 8.14. Severability ................................................................. 30
Appendix
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ADMINISTRATION AGREEMENT
This ADMINISTRATION AGREEMENT, dated as of _________, 200_, is among
XXXXXX XXX, INC., as administrator (the "Administrator"), XXXXXX MAE SERVICING
L.P., as servicer (the "Servicer"), SLM EDUCATION CREDIT FUNDING LLC, as
depositor (the "Depositor"), JPMORGAN CHASE BANK, a New York banking
corporation, not in its individual capacity but solely as indenture trustee (the
"Indenture Trustee"), and SLM PRIVATE CREDIT STUDENT LOAN TRUST 200_-_, as
issuer (the "Issuer").
WITNESSETH:
WHEREAS, the Issuer is issuing four classes of Floating Rate Asset
Backed Notes in the initial aggregate principal amount of $[ ] (the
"Notes") and one class of Floating Rate Asset Backed Certificates in the initial
aggregate principal amount of $[ ] (the "Certificates") pursuant to the
Indenture, dated as of October 1, 2002 (the "Indenture"), between the Issuer and
the Indenture Trustee;
WHEREAS, the Issuer has entered into certain agreements in certain
agreements in connection with the issuance of the Notes and the Certificates,
including the Servicing Agreement, the Sale Agreement, the Swap Agreement and
the Indenture (all such agreements being collectively referred to herein as the
"Related Agreements");
WHEREAS, pursuant to the Related Agreements, the Issuer and the Woner
Trustee are required to perform certain duties in connection with (a) the Notes
and the Collateral therefor pledged pursuant to the Indenture, and (b) the
Certificate (the registered holder of the Certificate being referred to herein
as the "Owner");
WHEREAS, the Issuer and the Trustee desire to have the Administrator
and the Servicer perform certain of the duties of the Issuer and the Trustee
referred to in the preceding clause, and to provide such additional services
consistent with the terms of this Agreement and the Basic Documents as the
Issuer and the Trustee may from time to time request; and
WHEREAS, the Administrator and the Servicer have the capacity to
provide the services required hereby and are willing to perform such services
for the Issuer and the Trustee on the terms set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and other good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties agree as follows:
ARTICLE I
Section 1.01. Definitions and Usage. Except as otherwise specified herein
or as the context may otherwise require, capitalized terms used but not
otherwise defined herein are defined in Appendix A hereto, which also contains
rules as to usage that shall be applicable herein.
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ARTICLE II
Section 2.01. Duties with Respect to the Indenture. The Administrator
agrees to consult with the Trustee regarding the duties of the Issuer under the
Indenture and the Depository Agreements. The Administrator shall monitor the
performance of the Issuer and shall advise the Trustee when action is necessary
to comply with the Issuer's duties under the Indenture and the Depository
Agreements. The Administrator shall prepare for execution by the Issuer or shall
cause the preparation by other appropriate Persons of all such documents,
reports, filings, instruments, certificates and opinions as it shall be the duty
of the Issuer to prepare, file or deliver pursuant to the Indenture and the
Depository Agreements. In furtherance of the foregoing, the Administrator shall
take the actions with respect to the following matters that it is the duty of
the Issuer or the Indenture Trustee to take pursuant to the Indenture
(references being to Sections of the Indenture):
(a) preparing or obtaining the documents and instruments required for
authentication of the Notes and delivering the same to the Indenture Trustee
(Section 2.02);
(b) preparing, obtaining or filing the instruments, opinions and
certificates and other documents required for the release of collateral (Section
2.09);
(c) obtaining and preserving the Issuer's qualification to do business in
each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of the Indenture, the Notes, the
Collateral and each other instrument and agreement included in the Indenture
Trust Estate (Section 3.04);
(d) preparing all supplements, amendments, financing statements,
continuation statements, instruments of further assurance and other instruments,
in accordance with Section 3.05 of the Indenture, necessary to protect the
Indenture Trust Estate (Section 3.05);
(e) the delivery by the Issuer of the Opinion of Counsel on the Closing
Date and the annual delivery of Opinions of Counsel, in accordance with Section
3.06 of the Indenture, as to the Indenture Trust Estate, and the annual delivery
of the Officers' Certificate of the Issuer and certain other statements, in
accordance with Section 3.09 of the Indenture, as to compliance with the
Indenture (Sections 3.06 and 3.09);
(f) in the event of a Servicer Default, the taking of all reasonable steps
available to enforce the Issuer's rights under the Basic Documents in respect of
such Servicer Default (Section 3.07(d));
(g) the preparation and obtaining of documents and instruments required for
the release of the Issuer from its obligations under the Indenture (Section
3.10);
(h) monitoring the Issuer's obligations as to the satisfaction and
discharge of the Indenture and preparation of an Officers' Certificate of the
Issuer and obtaining of the Opinion of Counsel and the Independent Certificate
relating thereto (Section 4.01);
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(i) sale of the Indenture Trust Estate in a commercially reasonable manner
if an Event of Default has occurred and is continuing (Section 5.04) or an
Insolvency Event with respect to the Depositor has occurred and is continuing
(Section 6.05(b));
(j) preparing and, after execution by the Issuer, filing with the
Commission, any applicable State agencies and the Indenture Trustee of documents
required to be filed on a periodic basis with, and summaries thereof as may be
required by rules and regulations prescribed by, the Commission and any
applicable State agencies (Section 7.03);
(k) the opening of one or more accounts in the Issuer's name, the
preparation of Issuer Orders, Officers' Certificates of the Issuer and Opinions
of Counsel and all other actions necessary with respect to investment and
reinvestment of funds in the Trust Accounts (Sections 8.02 and 8.03);
(l) the preparation of an Issuer Request and Officers' Certificate of the
Issuer and the obtaining of an Opinion of Counsel and Independent Certificates,
if necessary, for the release of the Indenture Trust Estate (Sections 8.04 and
8.05);
(m) the preparation of Issuer Orders and the obtaining of Opinions of
Counsel with respect to the execution of supplemental indentures (Sections 9.01,
9.02 and 9.03);
(n) the preparation of or obtaining of the documents and instruments
required for the execution and authentication of new Notes conforming to any
supplemental indenture and the delivery of the same to the Trustee and the
Indenture Trustee, respectively (Section 9.06);
(o) the preparation of all Officers' Certificates of the Issuer, Opinions
of Counsel and Independent Certificates with respect to any requests by the
Issuer to the Indenture Trustee to take any action under the Indenture (Section
11.01(a));
(p) the preparation and delivery of Officers' Certificates of the Issuer
and the obtaining of Independent Certificates, if necessary, for the release of
property from the lien of the Indenture (Section 11.01(b));
(q) the preparation and delivery to Noteholders and the Indenture Trustee
of any agreements with respect to alternate payment and notice provisions
(Section 11.06); and
(r) the recording of the Indenture, if applicable (Section 11.15).
Section 2.02. Duties with Respect to the Issuer.
(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 the Trustee or shall cause the
preparation by other appropriate Persons of all such documents, reports,
filings, instruments, certificates and opinions as it shall be the duty of the
Issuer or the Trustee to prepare, file or deliver pursuant to the Basic
Documents, and at the request of the Trustee shall take all appropriate action
that it is the duty of the Issuer to take pursuant to the Basic Documents.
Subject to Section 8.01 herein, and in accordance with the directions of the
Trustee, the Administrator shall administer, perform or supervise the
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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 Trustee and are reasonably
within the capability of the Administrator.
(b) The Administrator shall be responsible for performance of the duties of
the Trustee set forth in Sections 5.04(a), (b), (c) and (d) of the Trust
Agreement with respect to, among other things, accounting and reports to
Certificateholders; provided, however, that the Trustee shall retain
responsibility for the distribution of the Schedule K-1's necessary to enable
each Certificateholder to prepare its Federal and state income tax returns.
(c) The Administrator shall perform the duties of the Administrator
specified in Section 10.02 of the Trust Agreement required to be performed in
connection with the resignation or removal of the Trustee, and any other duties
expressly required to be performed by the Administrator under the Trust
Agreement and the other Basic Documents.
(d) 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 the Administrator's opinion, no
less favorable to the Issuer than would be available from unaffiliated parties.
Section 2.03. Establishment of Trust Accounts.
(a) (i) The Administrator, for the benefit of the Issuer, shall
establish and maintain in the name of the Indenture Trustee an Eligible
Deposit Account (the "Collection Account"), bearing a designation
clearly indicating that the funds deposited therein are held for the
benefit of the Issuer. The Collection Account will initially be
established as a segregated trust account in the name of the Indenture
Trustee with the corporate trust department of Bankers Trust Company.
(ii) The Administrator, for the benefit of the Issuer, shall
establish and maintain in the name of the Indenture Trustee an Eligible
Deposit Account (the "Reserve Account"), bearing a designation clearly
indicating that the funds deposited therein are held for the benefit of
the Issuer. The Reserve Account will initially be established as a
segregated trust account in the name of the Indenture Trustee with the
corporate trust department of Bankers Trust Company.
(iii) The Administrator, for the benefit of the Issuer, shall
establish and maintain in the name of the Indenture Trustee an Eligible
Deposit Account (the "Principal Distribution Account"), bearing a
designation clearly indicating that the funds deposited therein are
held for the benefit of the Issuer. The Principal Distribution Account
will initially be established as a segregated trust account in the name
of the Indenture Trustee with the corporate trust department of Bankers
Trust Company.
(iv) The Administrator, for the benefit of the Issuer, shall
establish and maintain in the name of the Indenture Trustee an Eligible
Deposit Account (the "Cash Capitalization Account"), bearing a
designation clearly indicating that the funds deposited therein are
held for the benefit of the Issuer. The Cash Capitalization Account
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will initially be established as a segregated trust account in the name
of the Indenture Trustee with the corporate trust department of Bankers
Trust Company.
(b) Funds on deposit in the Collection Account, the Reserve Account, the
Principal Distribution Account and the Cash Capitalization Account
(collectively, the "Trust Accounts") shall be invested by the Indenture Trustee
(or any custodian or designated agent with respect to any amounts on deposit in
such accounts) in Eligible Investments pursuant to written instructions by the
Administrator; provided, however, it is understood and agreed that the Indenture
Trustee shall not be liable for the selection of, or any loss arising from such
investment in, Eligible Investments. All such Eligible Investments shall be held
by (or by any custodian on behalf of) the Indenture Trustee for the benefit of
the Issuer; provided that on the Business Day preceding each Distribution Date
all interest and other investment income (net of losses and investment expenses)
on funds on deposit therein shall be deposited into the Collection Account and
shall be deemed to constitute a portion of the Available Funds for such
Distribution Date. Other than as described in the following proviso or as
otherwise permitted by the Rating Agencies, funds on deposit in the Trust
Accounts shall be invested in Eligible Investments that will mature so that such
funds will be available at the close of business on the Business Day preceding
the following Monthly Servicing Payment Date (to the extent necessary to pay the
Primary Servicing Fee payable on such date) or Distribution Date; provided,
however, that funds on deposit in Trust Accounts may be invested in Eligible
Investments of the Indenture Trustee which may mature so that such funds will be
available on such Monthly Servicing Payment Date or Distribution Date. Funds
deposited in a Trust Account on a Business Day which immediately precedes a
Monthly Servicing Payment Date or Distribution Date upon the maturity of any
Eligible Investments are not required to be invested overnight.
(c) (i) The Depositor and the Issuer have pledged to the Indenture
Trustee all of their respective right, title and interest in all funds
on deposit from time to time in the Trust Accounts and in all proceeds
thereof (including all income thereon) and all such funds, investments,
proceeds and income shall be part of the Trust Estate. Subject to the
Administrator's power to instruct the Indenture Trustee pursuant to
clause (b) above and paragraph (c)(iii) below, the Trust Accounts shall
be under the sole dominion and control of the Indenture Trustee for the
benefit of the Noteholders and the Issuer. If, at any time, any of the
Trust Accounts ceases to be an Eligible Deposit Account, the Indenture
Trustee (or the Administrator on its behalf) agrees, by its acceptance
hereto, that it shall within 10 Business Days (or such longer period,
not to exceed 30 calendar days, as to which each Rating Agency may
consent) establish a new Trust Account as an Eligible Deposit Account
and shall transfer any cash and/or any investments to such new Trust
Account. In connection with the foregoing, the Administrator agrees
that, in the event that any of the Trust Accounts are not accounts with
the Indenture Trustee, the Administrator shall notify the Indenture
Trustee in writing promptly upon any of such Trust Accounts ceasing to
be an Eligible Deposit Account.
(ii) With respect to the Trust Account Property, the Indenture
Trustee agrees, by its acceptance hereof, that:
(A) any Trust Account Property that is held in deposit
accounts shall be held solely in Eligible Deposit Accounts,
subject to the last sentence of Section
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2.03(c)(i) and, subject to Section 2.03(b), each such Eligible
Deposit Account shall be subject to the exclusive custody and
control of the Indenture Trustee, and the Indenture Trustee
shall have sole signature authority with respect thereto;
(B) any Trust Account Property that constitutes Physical
Property shall be Delivered to the Indenture Trustee in
accordance with paragraph (a) of the definition of "Delivery"
and shall be held, pending maturity or disposition, solely by
the Indenture Trustee or a financial intermediary (as such
term is defined in Section 8-313(4) of the UCC) acting solely
for the Indenture Trustee;
(C) any Trust Account Property that is a book-entry
security held through the Federal Reserve System pursuant to
Federal book-entry regulations shall be Delivered in
accordance with paragraph (b) of the definition of "Delivery"
and shall be maintained by the Indenture Trustee, pending
maturity or disposition, through continuous book-entry
registration of such Trust Account Property as described in
such paragraph; and
(D) any Trust Account Property that is an "uncertificated
security" under Article 8 of the UCC and that is not governed
by clause (C) above shall be Delivered to the Indenture
Trustee in accordance with paragraph (c) of the definition of
"Delivery" and shall be maintained by the Indenture Trustee,
pending maturity or disposition, through continued
registration of the Indenture Trustee's (or its nominee's)
ownership of such security.
(ii) The Administrator shall have the power, revocable for cause
or upon the occurrence and during the continuance of an Administrator
Default by the Indenture Trustee or by the Trustee with the consent of
the Indenture Trustee, to instruct the Indenture Trustee to make
withdrawals and payments from the Trust Accounts for the purpose of
permitting the Servicer, the Administrator or the Trustee to carry out
its respective duties hereunder or permitting the Indenture Trustee to
carry out its duties under the Indenture.
Section 2.04. Collections. The Servicer shall remit within two Business
Days of receipt thereof to the Collection Account all payments by or on behalf
of the Obligors with respect to the Trust Student Loans (other than Purchased
Student Loans), and all Liquidation Proceeds, both as collected during the
Collection Period. Notwithstanding the foregoing, for so long as (i) the senior
unsecured obligations of the Administrator (or any affiliate of the
Administrator which guarantees the obligations of the Administrator hereunder)
shall have been assigned a long-term rating of not less than "AA-" (or
equivalent rating) or a short-term rating of not less than "A-1" (or equivalent
rating) by each of the Rating Agencies or the remitting by the Servicer and the
Trustee of the amounts referred to in this Section 2.04 to the Administrator
will not result in a downgrading or withdrawal of any of the then current
ratings of any of the Securities by any of the Rating Agencies and (ii) no
Administrator Default shall have occurred and be continuing, the Servicer and
the Trustee shall remit such collections within two Business Days of receipt
thereof to the Administrator, and the Administrator need not deposit such
collections into the Collection Account until one Business Day immediately prior
to the next following Monthly Servicing Payment Date (in an amount up to the
Servicing Fee then due) or Distribution Date together with
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interest on such amounts (less Servicing Fees paid during such period)
calculated on a daily basis from the first day of the month following receipt
thereof by the Administrator through the last day of the related Collection
Period at a rate equal to the Federal Funds Rate less 0.20%; provided, however,
that, if the Administrator (and each such Affiliate which guarantees the
obligations of the Administrator) is rated below AA- and A-1+ by Standard &
Poor's, the Administrator shall deposit all such collections into the Collection
Account at least as frequently as the next following Monthly Servicing Payment
Date, unless less frequent deposits will not result in a downgrading or
withdrawal of Standard & Poor's then current ratings on the Notes or the
Certificates. In the event that any of the foregoing conditions for ceasing
daily remittances shall no longer be satisfied, then the Administrator shall
deposit all collections held by it into the Collection Account within two
Business Days thereof.
Section 2.05. Application of Collections.
(a) With respect to each Trust Student Loan, all collections with respect
thereto for each Collection Period shall be applied to interest and principal on
such Trust Student Loan by the Servicer in accordance with its customary
practice.
(b) All Liquidation Proceeds shall be applied to the related Trust Student
Loan.
Section 2.06. Additional Deposits.
(a) The Servicer shall deposit or cause to be deposited in the Collection
Account the aggregate purchase price with respect to Purchased Student Loans as
determined pursuant to Section 3.05 of the Servicing Agreement and all other
amounts to be paid by the Servicer under Section 3.05 of the Servicing Agreement
when such amounts are due, and the Depositor shall deposit or cause to be
deposited in the Collection Account the aggregate Purchase Amount with respect
to Purchased Student Loans and all other amounts to be paid by the Depositor
under Article VI of the Sale Agreement when such amounts are due.
(b) Notwithstanding anything to the contrary set forth in clause (a) above,
if daily deposits to the Collection Account are not required pursuant to Section
2.04, the Depositor and the Servicer shall pay the amounts referred to in clause
(a) above that would otherwise be deposited into the Collection Account to the
Administrator. The Administrator shall not be required to deposit such amounts
into the Collection Account until the Business Day preceding each Distribution
Date; provided, however, that on or before the Business Day preceding each
Monthly Servicing Payment Date that is not a Distribution Date, the
Administrator shall deposit into the Collection Account that portion of such
amounts received by it that is equal to the sum of the Servicing Fee payable on
such date and provided, further, that the Administrator shall also deposit into
the Collection Account on such date interest on such amounts (less Servicing
Fees paid during such period) calculated on a daily basis from the first day of
the month following receipt thereof by the Administrator through the last day of
the related Collection Period at a rate equal to the Federal Funds Rate less
0.20%.
(c) The Issuer shall make an initial deposit of $25,000 on the Closing Date
into the Collection Account from the proceeds of the sale of the Notes and
Certificates.
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Section 2.07. Distributions.
(a) On each Determination Date, the Administrator shall calculate all
amounts required to determine the amounts to be deposited in the Collection
Account from the Reserve Account and the amounts to be distributed therefrom on
the related Distribution Date. On the fifth Business Day preceding each Monthly
Servicing Payment Date that is not a Distribution Date, the Administrator shall
calculate all amounts required to determine the amounts to be deposited in the
Collection Account from the Reserve Account and the amounts to be distributed
therefrom on the related Monthly Servicing Payment Date.
(b) The Administrator shall instruct the Indenture Trustee in writing no
later than the second business day preceding each Monthly Servicing Payment Date
that is not a Distribution Date (based on the information contained in the
Administrator's Certificate and the related Servicer's Report delivered pursuant
to Sections 3.01(a) and (b)) to distribute to the Servicer, by 1:00 p.m. (New
York time) on such Monthly Servicing Payment Date, from and to the extent of the
Available Funds on deposit in the Collection Account the Primary Servicing Fee
due with respect to the preceding calendar month, and the Indenture Trustee
shall comply with such instructions.
(c) The Administrator shall instruct the Indenture Trustee in writing no
later than the second business day preceding each Distribution Date (based on
the information contained in the Administrator's Certificate and the related
Servicer's Report delivered pursuant to Sections 3.01(a) and (c)) to make the
following deposits and distributions to the Persons or to the account specified
below by 1:00 p.m. (New York time) on such Distribution Date, to the extent of
the amount of Available Funds in the Collection Account, in the following order
of priority, and the Indenture Trustee shall comply with such instructions:
(i) to the Servicer, the Primary Servicing Fee due on such
Distribution Date;
(ii) to the Administrator, from the amount of Available Funds
remaining after the application of clause (i), the Administration Fee
due on such Distribution Date and all unpaid Administration Fees from
prior Collection Periods;
(iii) to the Noteholders, from the amount of Available Funds
remaining after the application of clauses (i) and (ii), the
Noteholders' Interest Distribution Amount, ratably, without preference
or priority of any kind, according to the amounts payable on the Notes
in respect of Noteholders' Interest Distribution Amount;
(iv) to the Trustee on behalf of the Certificateholders, from the
amount of Available Funds remaining after the application of clauses
(i) through (iii), the Certificateholders' Return Distribution Amount,
for distribution by the Trustee pursuant to the Trust Agreement,
ratably, without preference or priority of any kind, according to the
amounts payable in respect of Certificateholders' Return Distribution
Amount;
(v) to the Class A-1 Noteholders, from the amount of Available
Funds remaining after the application of clauses (i) through (iv), the
Noteholders' Principal Distribution Amount, ratably, without preference
or priority of any kind, according to the amounts payable on the Class
A-1 Notes for principal;
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(vi) on each Distribution Date on and after which the Class A-1
Notes have been paid in full, to the Class A-2 Noteholders, from the
amount of Available Funds remaining after the application of clauses
(i) through (v), the Noteholders' Principal Distribution Amount,
ratably, without preference or priority of any kind, according to the
amounts payable on the Class A-2 Notes for principal;
(vii) on each Distribution Date on and after the date on which
the Notes have been paid in full, to the Trustee on behalf of the
Certificateholders, from the amount of Available Funds remaining after
the application of clauses (i) through (vi), the Certificate Balance
Distribution Amount for distribution by the Trustee pursuant to the
Trust Agreement, ratably, without preference or priority of any kind,
according to the amounts payable in respect of the Certificate Balance;
(viii) to the Reserve Account, from the amount of Available Funds
remaining after the application of clauses (i) through (vii), the
amount, if any, necessary to reinstate the balance of the Reserve
Account up to the Specified Reserve Account Balance;
(ix) to the Servicer, from the amount of Available Funds
remaining after the application of clauses (i) through (viii), the
aggregate unpaid amount of the Carryover Servicing Fee, if any;
(x) to the Noteholders, from the amount of Available Funds
remaining after the application of clauses (i) through (ix), the
aggregate unpaid amount of Note Interest Carryover, if any, ratably,
without preference or priority of any kind, according to the amounts
due and payable on the Notes in respect of Note Interest Carryover;
(xi) to the Trustee on behalf of the Certificateholders, from the
amount of Available Funds remaining after the application of clauses
(i) through (x), the aggregate unpaid amount of the Certificate Return
Carryover, if any, for distribution by the Trustee pursuant to the
Trust Agreement, ratably, without preference or priority of any kind,
according to the amounts payable in respect of Certificate Return
Carryover; and
(xii) to the Reserve Account, the amount of Available Funds
remaining after the application of clauses (i) through (xi).
Notwithstanding the foregoing, if on any Distribution Date following
all distributions to be made on such Distribution Date the Outstanding Amount of
the Notes would be in excess of the sum of the outstanding principal balance of
the Trust Student Loans and any accrued but unpaid interest on the Trust Student
Loans as of the last day of the related Collection Period plus the balance of
the Reserve Account on such Distribution Date following such distributions, or
if an Insolvency Event with respect to the Depositor or an Event of Default has
occurred and is continuing, amounts on deposit in the Collection Account and the
Reserve Account shall be applied on such Distribution Date to the payment of the
Noteholders' Distribution Amount before any amounts are applied to the payment
of the Certificateholders' Distribution Amount.
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Section 2.08. Reserve Account.
(a) On the Closing Date, the Issuer shall deposit the Reserve Account
Initial Deposit into the Reserve Account.
(b) (i) In the event that the Primary Servicing Fee for any Monthly
Servicing Payment Date or Distribution Date exceeds the amount distributed to
the Servicer pursuant to Sections 2.07(b) and 2.07(c)(i) on such Monthly
Servicing Payment Date or Distribution Date, the Administrator shall instruct
the Indenture Trustee in writing to withdraw from the Reserve Account on such
Monthly Servicing Payment Date or Distribution Date an amount equal to such
excess, to the extent of funds available therein, and to distribute such amount
to the Servicer; provided, however, that except as provided in Sections
2.08(c)(iii) and 2.08(d), amounts on deposit in the Reserve Account will not be
available to cover any unpaid Carryover Servicing Fees to the Servicer.
(ii) In the event that the Administration Fee for any Distribution
Date exceeds the amount distributed to the Administrator pursuant to
Section 2.07(c)(ii) on such Distribution Date, the Administrator shall
instruct the Indenture Trustee in writing to withdraw from the Reserve
Account on each Distribution Date an amount equal to such excess, to
the extent of funds available therein after giving effect to clause
(b)(i) above, and to distribute such amount to the Administrator.
(iii) In the event that the Noteholders' Interest Distribution
Amount and the Certificateholders' Return Distribution Amount for a
Distribution Date exceeds the amount distributed to Noteholders and to
the Certificateholders pursuant to Sections 2.07(c)(iii) and (c)(iv) on
such Distribution Date, the Administrator shall instruct the Indenture
Trustee in writing to withdraw from the Reserve Account on such
Distribution Date an amount equal to such excess, to the extent of
funds available therein after giving effect to clauses (b)(i) and
(b)(ii) above, and to distribute such amount to the Noteholders and to
the Certificateholders entitled thereto, in the same order and priority
as is set forth in Sections 2.07(c)(iii) and (c)(iv) subject to the
last paragraph of Section 2.07(c).
(iv) In the event that the Noteholders' Principal Distribution
Amount on the Final Distribution Date with respect to each Class of
Notes exceeds the amount distributed to such Noteholders pursuant to
Sections 2.07(c)(v) and 2.07(c)(vi) on such Distribution Date, the
Administrator shall instruct the Indenture Trustee in writing to
withdraw from the Reserve Account on such final Distribution Date an
amount equal to such excess, to the extent of funds available therein
after giving effect to clauses (b)(i), (b)(ii) and (b)(iii) above, and
to distribute such amount to the Noteholders entitled thereto, in the
same order and priority as is set forth in Sections 2.07(c)(v) and
2.07(c)(vi).
(v) In the event that the Certificateholders' Balance Distribution
Amount on the final Distribution Date with respect to the Certificates
exceeds the amount distributed to the Certificateholders pursuant to
Section 2.07(c)(vii) on such Distribution Date, the Administrator shall
instruct the Indenture Trustee in writing to withdraw from the Reserve
Account on such Distribution Date an amount equal to such excess, to
the extent
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of funds available therein after giving effect to clauses (b)(i)
through (b)(iv) above, and to distribute such amount to the Trustee on
behalf of the Certificateholders, for distribution to the
Certificateholders entitled thereto.
(c) After giving effect to Section 2.08(b), if the amount on deposit in the
Reserve Account on any Distribution Date (after giving effect to all deposits or
withdrawals therefrom on such Distribution Date other than pursuant to this
clause (c)) is greater than the Specified Reserve Account Balance for such
Distribution Date, the Administrator shall instruct the Indenture Trustee in
writing (i) to pay to the Noteholders out of such excess in the Reserve Account
an amount equal to the Note Principal Shortfall, if any; (ii) to pay to the
Certificateholders out of such excess in the Reserve Account an amount equal to
the Certificate Balance Shortfall, if any; (iii) to pay to the Servicer out of
such excess in the Reserve Account an amount equal to the amount described in
Section 2.07(c)(ix) for such Distribution Date (to the extent not otherwise paid
to the Servicer on such Distribution Date); (iv) to pay to the Noteholders out
of such excess an amount equal to the amount described in Section 2.07(c)(x) for
such Distribution Date (to the extent not otherwise paid to the Noteholders on
such Distribution Date); (v) to pay to the Certificateholders out of such excess
an amount equal to the amount described in Section 2.07(c)(xi) for such
Distribution Date (to the extent not otherwise paid to the Certificateholders on
such Distribution Date); (vi) in the event the Trust Student Loans are not sold
pursuant to Section 6.01(a), to pay as an accelerated payment of principal
balance of the Notes or Certificate Balance, as the case may be, first to the
Noteholders in the same order and priority as is set forth in Sections
2.07(c)(v) and (c)(vi) until the principal amount of the Notes is paid in full
and then to the Certificateholders until the Certificate Balance is reduced to
zero; provided, that the amount of such distribution shall not exceed the
outstanding principal balance of the Notes or the Certificate Balance, as
applicable, after giving effect to all other payments in respect of principal of
Notes and Certificate Balance to be made on such date; and (vii) to distribute
the remaining amount of such excess to the Depositor. Amounts properly
distributed to the Depositor pursuant to this clause (c) shall be deemed
released from the Trust Estate and the security interest therein granted to the
Indenture Trustee, and the Depositor shall in no event thereafter be required to
refund any such distributed amounts.
(d) On the final Distribution Date upon termination of the Trust and
following the payment in full of the aggregate outstanding principal balance of
the Notes and the Certificate Balance and of all other amounts (other than
Carryover Servicing Fees, Note Interest Carryover and Certificate Return
Carryover) owing or to be distributed hereunder or under the Indenture or the
Trust Agreement to Noteholders, Certificateholders, the Servicer or the
Administrator, to the extent that Available Funds on such date are insufficient
to make the following payments, amounts remaining in the Reserve Account shall
be used first to pay any Carryover Servicing Fees, second to pay any Note
Interest Carryover and third to pay any Certificate Return Carryover. Any amount
remaining on deposit in the Reserve Account after such payments have been made
shall be distributed to the Depositor. The Depositor shall in no event be
required to refund any amounts properly distributed pursuant to this Section
2.08(d).
(e) Anything in this Section 2.08 to the contrary notwithstanding, if the
market value of securities and cash in the Reserve Account is on any
Distribution Date sufficient to pay the remaining principal amount of and
interest accrued on the Notes, to reduce the Certificate Balance to zero and to
pay any accrued return thereon and to pay any Carryover Servicing Fee,
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Note Interest Carryover or Certificate Return Carryover, such amount will be so
applied on such Distribution Date and the Administrator shall instruct the
Trustee and the Indenture Trustee to make such payments.
Section 2.09. Statements to Certificateholders and Noteholders. On each
Determination Date preceding a Distribution Date, the Administrator shall
provide to the Indenture Trustee and the Trustee (with a copy to the Rating
Agencies) for the Indenture Trustee to forward on such succeeding Distribution
Date to each Noteholder of record and for the Trustee to forward on such
succeeding Distribution Date to each Certificateholder of record a statement,
setting forth at least the following information as to the Notes and the
Certificates to the extent applicable:
(a) the amount of such distribution allocable to principal of each class of
the Notes;
(b) the amount of the distribution allocable to interest on each class of
the Notes;
(c) the amount of the distribution allocable to the Certificate Balance;
(d) the amount of the distribution allocable to return on the Certificates;
(e) the amount, if any, of the distribution allocable to any Note Interest
Carryover and any Certificate Return Carryover, together with any remaining
outstanding amount of each thereof;
(f) the Pool Balance as of the close of business on the last day of the
preceding Collection Period;
(g) the aggregate outstanding principal balance of the Notes, the Note Pool
Factor, the Certificate Balance and the Certificate Pool Factor as of such
Distribution Date, after giving effect to payments allocated to principal
reported under clauses (a) and (c) above;
(h) the Note Rate for the next period for any class of Notes and the
Certificate Rate for any class of Certificates;
(i) the amount of the Servicing Fee and any Carryover Servicing Fee paid to
the Servicer on such Distribution Date and on the two preceding Monthly
Servicing Payment Dates, and the amount, if any, of the Carryover Servicing Fee
remaining unpaid after giving effect to any such payments;
(j) the amount of the Administration Fee paid to the Administrator on such
Distribution Date;
(k) the amount of the aggregate Realized Losses, if any, for the related
Collection Period and the balance of Trust Student Loans that are delinquent in
each delinquency period as of the end of such Collection Period;
(l) the amount of any Note Interest Shortfall, Note Principal Shortfall,
Certificate Return Shortfall and Certificate Balance Shortfall, if any, in each
case as applicable to each class of Securities, and the change in such amounts
from the preceding statement;
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(m) the aggregate Purchase Amounts for Trust Student Loans, if any, that
were repurchased by the Depositor or purchased by the Servicer from the Issuer
in such Collection Period; and
(n) the balance of the Reserve Account on such Distribution Date, after
giving effect to changes therein on such Distribution Date.
Each amount set forth pursuant to clauses (a), (b), (c), (d), (e), (i),
(j) and (l) above shall be expressed as a dollar amount per $1,000 of original
principal balance of a Certificate or Note, as applicable. A copy of the
statements referred to above may be obtained by any Certificate Owner or Note
Owner by a written request to the Trustee or the Indenture Trustee,
respectively, addressed to the respective Corporate Trust Office.
Section 2.10. Non-Ministerial Matters. With respect to matters that in the
reasonable judgment of the Administrator are nonministerial, the Administrator
shall not take any action unless within a reasonable time before the taking of
such action, the Administrator shall have notified the Trustee of the proposed
action and the Trustee shall not have withheld consent or provided an
alternative direction. For the purpose of the preceding sentence,
"non-ministerial matters" shall include:
(a) the amendment of or any supplement to the Indenture;
(b) 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 Trust Student Loans);
(c) the amendment, change or modification of the Basic Documents;
(d) the appointment of successor Note Registrars, successor Paying Agents
and successor Indenture Trustees pursuant to the Indenture or the appointment of
Successor Administrators or Successor Servicers, or the consent to the
assignment by the Note Registrar, Paying Agent or Indenture Trustee of its
obligations under the Indenture; and
(e) the removal of the Indenture Trustee.
Section 2.11. Exceptions. Notwithstanding anything to the contrary in this
Agreement, except as expressly provided herein or in the other Basic Documents,
the Administrator shall not be obligated to, and shall not, (i) make any
payments to the Noteholders under the Basic Documents, (ii) sell the Indenture
Trust Estate pursuant to Section 5.04 of the Indenture, (iii) take any other
action that the Issuer directs the Administrator not to take on its behalf, (iv)
in connection with its duties hereunder assume any indemnification obligation of
any other Person or (v) service the Trust Student Loans.
Section 2.12. Compensation. As compensation for the performance of the
Administrator's obligations under this Agreement and as reimbursement for its
expenses related thereto, the Administrator shall be entitled to $20,000 for
each Collection Period payable on the related Distribution Date (the
"Administration Fees") payable in arrears which shall be solely an obligation of
the Issuer.
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Section 2.13. Servicer and Administrator Expenses. Each of the Servicer and
the Administrator shall be severally 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 Servicer or the Administrator, as
the case may be, and expenses incurred in connection with distributions and
reports to the Administrator or to the Certificateholders and the Noteholders,
as the case may be.
ARTICLE III
Section 3.01. Administrator's Certificate; Servicer's Report.
(a) On or before the tenth day of each month (or, if any such day is not a
Business Day, on the next succeeding Business Day), the Servicer shall deliver
to the Administrator a Servicer's Report with respect to the preceding month
containing all information necessary for the Administrator to receive in
connection with the preparation of the Administrator's Officers' Certificate and
the Administrator's Certificate covering such calendar month referred to in
clause (b) below. On or before the tenth day (or, if any such day is not a
Business Day, on the next succeeding Business Day), preceding each Distribution
Date the Servicer shall deliver to the Administrator a Servicer's Report with
respect to the preceding Collection Period containing all information necessary
for the Administrator to receive in connection with the preparation of the
Administrator's Officers' Certificate and the Administrator's Certificate
covering such calendar month referred to in clause (c) below.
(b) On the Second Business Day prior to each Monthly Servicing Payment Date
that is not a Distribution Date, the Administrator shall deliver to the Trustee
and the Indenture Trustee, an Officer's Certificate of the Administrator
containing all information necessary to pay the Servicer the Servicing Fee due
on such Monthly Servicing Payment Date pursuant to Section 2.07(b).
(c) On each Determination Date prior to a Distribution Date, the
Administrator shall deliver to the Trustee and the Indenture Trustee, with a
copy to the Rating Agencies, an Administrator's Certificate containing all
information necessary to make the distributions pursuant to Sections 2.07 and
2.08, if applicable, for the Collection Period preceding the date of such
Administrator's Certificate.
(d) Prior to each Determination Date, the Administrator shall determine the
Note Rates and the Certificate Rate that will be applicable to the Distribution
Date following such Determination Date, in compliance with its obligation to
prepare and deliver an Administrator's Certificate on such Determination Date
pursuant to this Section 3.01.
(e) The Administrator shall furnish to the Issuer from time to time such
information regarding the Collateral as the Issuer shall reasonably request.
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Section 3.02. Annual Statement as to Compliance; Notice of Default;
Financial Statements.
(a) Each of the Servicer and the Administrator shall deliver to the Trustee
and the Indenture Trustee on or before 120 days after the end of the fiscal year
of the Servicer and the Administrator, an Officer's Certificate of the Servicer
or the Administrator, as the case may be, dated as of December 31 of the
preceding year, stating that (i) a review of the activities of the Servicer or
the Administrator, as the case may be, during the preceding 12-month period (or,
in the case of the first such certificate, during the period from the Closing
Date to December 31, 2002) and of its performance under this Agreement has been
made under such officers' supervision and (ii) to the best of such officers'
knowledge, based on such review, the Servicer or the Administrator, as the case
may be, has fulfilled its obligations in all material respects under this
Agreement and, with respect to the Servicer, the Servicing Agreement throughout
such year or, if there has been a material default in the fulfillment of any
such obligation, specifying each such material default known to such officers
and the nature and status thereof. The Indenture Trustee shall send a copy of
each such Officers' Certificate and each report referred to in Section 3.01 to
the Rating Agencies. A copy of each such Officers' Certificate and each report
referred to in Section 3.01 may be obtained by any Certificateholder,
Certificate Owner, Noteholder or Note Owner by a request in writing to the
Trustee addressed to its Corporate Trust Office, together with evidence
satisfactory to the Trustee that such Person is one of the foregoing parties.
Upon the telephone request of the Trustee, the Indenture Trustee will promptly
furnish the Trustee a list of Noteholders as of the date specified by the
Trustee.
(b) The Servicer shall deliver to the Trustee, the Indenture Trustee and
the Rating Agencies, promptly after having obtained knowledge thereof, but in no
event later than five Business Days thereafter, written notice in an Officers'
Certificate of the Servicer of any event which with the giving of notice or
lapse of time, or both, would become a Servicer Default under Section 5.01 of
the Servicing Agreement.
(c) The Administrator shall deliver to the Trustee, the Indenture Trustee
and the Rating Agencies, promptly after having obtained knowledge thereof, but
in no event later than five Business Days thereafter, written notice in an
Officers' Certificate of the Administrator of any event which with the giving of
notice or lapse of time, or both, would become an Administrator Default under
Sections 5.01(a) or (b) or would cause the Student Loan Marketing Association to
fail to meet the requirement of clause (i) of Section 2.04.
(d) The Administrator shall provide to the Trustee, the Indenture Trustee
and the Rating Agencies (i) as soon as possible and in no event more than 120
days after the end of each fiscal year of the Administrator audited financials
as at the end of and for such year and (ii) as soon as possible and in no event
more than 45 days after the end of each quarterly accounting period of the
Administrator unaudited financials as at the end of and for such period.
Section 3.03. Annual Independent Certified Public Accountants' Reports.
Each of the Servicer and the Administrator shall cause a firm of independent
certified public accountants, which may also render other services to the
Servicer or the Administrator, as the case may be, to deliver to the Trustee,
the Indenture Trustee and the Rating Agencies on or before March 31 of each
year, a report addressed to the Servicer or the Administrator, as the case may
be, the Trustee
15
and the Indenture Trustee, to the effect that such firm has examined certain
documents and records relating to the servicing of the Trust Student Loans, or
the administration of the Trust Student Loans and of the Trust, as the case may
be, during the preceding calendar year (or, in the case of the first such
report, during the period from the Closing Date to December 31, 2002) and that,
on the basis of the accounting and auditing procedures considered appropriate
under the circumstances, such firm is of the opinion that such servicing or
administration, respectively, was conducted in compliance with those terms of
this Agreement and in the case of the Servicer, the Servicing Agreement,
including any applicable statutory provisions incorporated therein and such
additional terms and statutes as may be specified from time to time by the
Administrator, 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.
Such report will also indicate that the firm is independent of the
Servicer or the Administrator, as the case may be, within the meaning of the
Code of Professional Ethics of the American Institute of Certified Public
Accountants.
ARTICLE IV
Section 4.01. Representations of Administrator. Xxxxxx Xxx, Inc., as
Administrator, makes the following representations on which the Issuer is deemed
to have relied in acquiring the Trust Student Loans. The representations speak
as of the execution and delivery of this Agreement and as of the Closing Date
and shall survive the sale of the Trust Student Loans to the Trustee on behalf
of the Issuer and the pledge thereof to the Indenture Trustee pursuant to the
Indenture.
(a) Organization and Good Standing. The Administrator is duly organized and
validly existing as a corporation under the laws of the State of Delaware, with
the power and authority to own its properties and to conduct its business as
such properties are currently owned and such business is presently conducted.
(b) Power and Authority. The Administrator has the corporate power and
authority to execute and deliver this Agreement and to carry out its terms, and
the execution, delivery and performance of this Agreement have been duly
authorized by the Administrator by all necessary corporate action.
(c) Binding Obligation. This Agreement constitutes a legal, valid and
binding obligation of the Administrator enforceable in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization and similar
laws relating to creditors' rights generally and subject to general principles
of equity.
(d) No Violation. The consummation of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof or thereof do not conflict
with, result in any breach of any of the terms and provisions of, nor constitute
(with or without notice or lapse of time or both) a default under, the 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 shall be bound; nor result
in the creation or imposition of any Lien upon any of its properties pursuant to
the terms of any such indenture, agreement or other instrument (other than
pursuant to the Basic
16
Documents); nor violate any law or, to the knowledge of the Administrator, any
order, rule or regulation applicable to the Administrator of any court or of any
Federal or state regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Administrator or its properties.
(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 or any of the other
Basic Documents, the Notes or the Certificates, (ii) seeking to prevent the
issuance of the Notes or the Certificates or the consummation of any of the
transactions contemplated by this Agreement or any of the other Basic Documents,
(iii) seeking any determination or ruling that could reasonably be expected to
have a material and adverse effect on the performance by the Administrator of
its obligations under, or the validity or enforceability of, this Agreement, any
of the other Basic Documents, the Notes or the Certificates or (iv) seeking to
affect adversely the Federal or state income tax attributes of the Issuer, the
Notes or the Certificates.
(f) All Consents. All authorizations, consents, orders or approvals of or
registrations or declarations with any court, regulatory body, administrative
agency or other government instrumentality required to be obtained, effected or
given by the Administrator in connection with the execution and delivery by the
Administrator of this Agreement and the performance by the Administrator of the
transactions contemplated by this Agreement have been duly obtained, effected or
given and are in full force and effect.
Section 4.02. 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 Certificateholders and the Noteholders and any of the officers, directors,
employees and agents of the Issuer from and against any and all costs, expenses,
losses, claims, damages and liabilities to the extent that such cost, expense,
loss, claim, damage or liability arose out of, or was imposed upon any such
Person through, the gross negligence, willful misfeasance or bad faith of the
Administrator in the performance of its duties under this Agreement or by reason
of reckless disregard of its obligations and duties hereunder or thereunder.
The Administrator shall indemnify the Indenture Trustee in its
individual capacity and any of its officers, directors, employees and agents
against any and all loss, liability or expense (including attorneys' fees)
incurred by it in connection with the performance of its duties under the
Indenture and the other Basic Documents. The Indenture Trustee shall notify the
Issuer and the Administrator promptly of any claim for which it may seek
indemnity. Failure by the Indenture Trustee to so notify the Issuer and the
Administrator shall not relieve the Issuer or the Administrator of its
obligations hereunder and under the other Basic Documents. The Administrator
shall defend the claim and the Administrator shall not be liable for the legal
fees and expenses of the Indenture Trustee after it has assumed such defense;
provided, however, that, in the event that there may be a conflict between the
positions of the Indenture Trustee and the Administrator in conducting the
defense of such claim, the Indenture Trustee shall be entitled
17
to separate counsel the fees and expenses of which shall be paid by the
Administrator on behalf of the Issuer. Neither the Issuer nor the Administrator
need reimburse any expense or indemnify against any loss, liability or expense
incurred by the Indenture Trustee through the Indenture Trustee's own willful
misconduct, negligence or bad faith.
The Administrator shall indemnify the Trustee in its individual
capacity and any of its officers, directors, employees and agents against any
and all loss, liability, claims, damages, costs, penalties, taxes (excluding
taxes payable by it on any compensation received by it for its services as
trustee) or expense (including attorneys' fees) incurred by it in connection
with the performance of its duties under the Trust Agreement and the other Basic
Documents.
Without limiting the generality of the foregoing, the Administrator
shall indemnify the Trustee in its individual capacity and any of its officers,
directors, employees and agents against any and all liability relating to or
resulting from any of the following:
(i) any claim that the Trust Student Loans (or any guarantee with
respect thereto) are delinquent, uncollectable, uninsured, illegal,
invalid or unenforceable;
(ii) any claim that the Trust Student Loans have not been made,
administered, serviced or collected in accordance with applicable
federal and state laws or the requirements of any Guarantor; or
(iii) any claim that any original note or other document
evidencing or relating to the Trust Student Loans has been lost,
misplaced or destroyed.
The Trustee shall notify the Administrator promptly of any claim for
which it may seek indemnity. Failure by the Trustee to so notify the
Administrator shall not relieve the Administrator of its obligations hereunder
and under the other Basic Documents. The Administrator shall defend the claim
and the Administrator shall not be liable for the legal fees and expenses of the
Trustee after it has assumed such defense; provided, however, that, in the event
that there may be a conflict between the positions of the Trustee and the
Administrator in conducting the defense of such claim, the Trustee shall be
entitled to separate counsel the fees and expenses of which shall be paid by the
Administrator on behalf of the Issuer. Neither the Issuer nor the Administrator
need reimburse any expense or indemnify against any loss, liability or expense
incurred by the Trustee through the Trustee's own willful misconduct, negligence
or bad faith.
The Depositor shall pay reasonable compensation to the Indenture
Trustee and the Trustee and shall reimburse the Indenture Trustee and the
Trustee for all reasonable expenses, disbursements and advances.
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 4.03) as Administrator pursuant to Section 5.01, 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 5.02.
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Indemnification under this Section shall survive the resignation or
removal of the Trustee or the Indenture Trustee or the termination of this
Agreement and shall include reasonable fees and expenses of counsel and expenses
of litigation. If the Administrator shall have made any indemnity payments
pursuant to this Section 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 4.03. 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 Xxxxxx Xxx, Inc., executes an agreement of
assumption to perform every obligation of the Administrator under this
Agreement, (ii) immediately after giving effect to such transaction, no
representation or warranty made pursuant to Section 4.01 shall have been
breached and no Administrator Default, and no event that, after notice or lapse
of time, or both, would become an Administrator Default shall have occurred and
be continuing, (iii) the surviving Administrator, if other than Xxxxxx Mae,
Inc., shall have delivered to the Trustee and the Indenture Trustee an Officers'
Certificate and an Opinion of Counsel each stating that such consolidation,
merger or succession and such agreement of assumption comply with this Section
4.03 and that all conditions precedent, if any, provided for in this Agreement
relating to such transaction have been complied with, and that the Rating Agency
Condition shall have been satisfied with respect to such transaction, (iv)
unless Xxxxxx Xxx, Inc. is the surviving entity, such transaction will not
result in a material adverse Federal or state tax consequence to the Issuer, the
Noteholders or the Certificateholders and (v) unless Xxxxxx Mae, Inc. is the
surviving entity, the Administrator shall have delivered to the Trustee and the
Indenture Trustee an Opinion of Counsel either (A) stating that, in the opinion
of such counsel, all financing statements and continuation statements and
amendments thereto have been executed and filed that are necessary fully to
preserve and protect the interest of the Trustee and Indenture Trustee,
respectively, in the Trust Student Loans and reciting the details of such
filings, or (B) stating that, in the opinion of such counsel, no such action
shall be necessary to preserve and protect such interests. Anything in this
Section 4.03 to the contrary notwithstanding, the Administrator may at any time
assign its rights, obligations and duties under this Agreement to an Affiliate
provided that the Rating Agencies confirm that such assignment will not result
in a downgrading or a withdrawal of the ratings then applicable to the Notes and
the Certificates.
Section 4.04. Limitation on Liability of Depositor, Administrator and
Others. Neither the Administrator nor any of its directors, officers, employees
or agents shall be under any liability to the Issuer, the Noteholders or the
Certificateholders, or to the Indenture Trustee or the Trustee except as
provided under this Agreement for any action taken or for refraining from the
taking of any action pursuant to this Agreement or for errors in judgment;
provided, however, that these provisions 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 duties or
by reason of reckless disregard of obligations and duties under this
19
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 Trust Student Loans and the Trust
in accordance with this Agreement and that in its opinion may involve it in any
expense or liability; provided, however, that the Administrator may undertake
any reasonable action that it may deem necessary or desirable in respect of this
Agreement and the other Basic Documents and the rights and duties of the parties
to this Agreement and the other Basic Documents and the interests of the
Certificateholders under this Agreement and the Noteholders under the Indenture
and under this Agreement.
Section 4.05. Administrator May Own Certificates or Notes. The
Administrator and any Affiliate thereof may in its individual or any other
capacity become the owner or pledgee of Certificates or Notes with the same
rights as it would have if it were not the Administrator or an Affiliate
thereof, except as expressly provided herein or in any other Basic Document.
Section 4.06. Student Loan Marketing Association Not to Resign as
Administrator. Subject to the provisions of Section 4.03, the Student Loan
Marketing Association 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 Xxxxxx Xxx, Inc. or its properties.
Notice of any such determination permitting or requiring the resignation of
Xxxxxx Mae, Inc. shall be communicated to the Trustee and the Indenture Trustee
at the earliest practicable time (and, if such communication is not in writing,
shall be confirmed in writing at the earliest practicable time) and any such
determination shall be evidenced by an Opinion of Counsel to such effect
delivered to the Trustee and the Indenture Trustee concurrently with or promptly
after such notice. No such resignation shall become effective until the
Indenture Trustee or a successor Administrator shall have assumed the
responsibilities and obligations of Xxxxxx Xxx, Inc. in accordance with Section
5.02. Anything in this Section 4.07 to the contrary notwithstanding, the
Administrator may resign at any time subsequent to the assignment of its duties
and obligations hereunder pursuant to Section 4.03.
ARTICLE V
Section 5.01. Administrator Default. If any one of the following
events (an "Administrator Default") shall occur and be continuing:
(a) (i) in the event that daily deposits into the Collection Account are
not required, any failure by the Administrator to deliver to the Indenture
Trustee for deposit in the Trust Accounts any Available Funds required to be
paid on or before the Business Day immediately preceding any Monthly Servicing
Payment Date or Distribution Date, as applicable, or (ii) any failure by the
Administrator to direct the Indenture Trustee to make any required distributions
from either of the Trust Accounts, which failure in case of either clause (i) or
(ii) continues
20
unremedied for five Business Days after written notice of such failure is
received by the Administrator from the Indenture Trustee or the Trustee or after
discovery of such failure by an officer of the Administrator;
(b) any failure by the Administrator duly to observe or to perform in any
material respect any other term, covenant or agreement of the Administrator set
forth in this Agreement or any other Basic Document, which failure shall (i)
materially and adversely affect the rights of Noteholders or Certificateholders
and (ii) continue unremedied for a period of 60 days after the date on which
written notice of such failure, requiring the same to be remedied, shall have
been given (A) to the Administrator by the Indenture Trustee or the Trustee or
(B) to the Administrator, the Indenture Trustee and the Trustee by the
Noteholders or Certificateholders, as applicable, representing not less than 25%
of the Outstanding Amount of the Notes or 25% of the outstanding Certificate
Balance (including any Certificates owned by the Depositor); or
(c) an Insolvency Event occurs with respect to the Administrator;
then, and in each and every case, so long as the Administrator Default shall not
have been remedied, either the Indenture Trustee or the Noteholders evidencing
not less than 25% of the Outstanding Amount of the Notes, by notice then given
in writing to the Administrator (and to the Indenture Trustee and the Trustee if
given by the Noteholders) may terminate all the rights and obligations (other
than the obligations set forth in Section 4.02) of the Administrator under this
Agreement. On or after the receipt by the Administrator of such written notice,
all authority and power of the Administrator under this Agreement, whether with
respect to the Notes, the Certificates, the Trust 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 5.02; and,
without limitation, the Indenture Trustee and the Trustee are hereby authorized
and empowered to execute and deliver, for the benefit of the predecessor
Administrator, as attorney-in-fact or otherwise, any and all documents and other
instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination. The
predecessor Administrator shall cooperate with the successor Administrator, the
Indenture Trustee and the 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)
incurred in connection with amending this Agreement to reflect such succession
as Administrator pursuant to this Section shall be paid by the predecessor
Administrator (other than the Indenture Trustee acting as the Administrator
under this Section 5.01) upon presentation of reasonable documentation of such
costs and expenses. Upon receipt of notice of the occurrence of an Administrator
Default, the Trustee shall give notice thereof to the Rating Agencies.
Section 5.02. Appointment of Successor.
(a) Upon receipt by the Administrator of notice of termination pursuant to
Section 5.01, 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 under this Agreement in the case of termination,
only until the date specified in such termination notice or, if no such date is
specified in a notice of termination, until receipt of such notice and, in the
case of resignation, until the later of (x) the date 120 days from the delivery
to the Trustee and the
21
Indenture Trustee of written notice of such resignation (or written confirmation
of such notice) in accordance with the terms of this Agreement and (y) the date
upon which the predecessor Administrator shall become unable to act as
Administrator as specified in the notice of resignation and accompanying Opinion
of Counsel (the "Transfer Date"). In the event of the 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 shall, if it shall be unwilling or legally unable so to act,
appoint or petition a court of competent jurisdiction to appoint any established
institution whose regular business shall include the servicing of student loans,
as the successor to the Administrator under this Agreement.
(b) Upon appointment, the successor Administrator (including the Indenture
Trustee acting as successor Administrator), shall be the successor in all
respects to the predecessor Administrator and shall be subject to all the
responsibilities, duties and liabilities placed on the predecessor Administrator
that arise thereafter or are related thereto and shall be entitled to an amount
agreed to by such successor Administrator (which shall not exceed the
Administration Fee unless such compensation arrangements will not result in a
downgrading or withdrawal of any rating on the Notes or the Certificates by any
Rating Agency) and all the rights granted to the predecessor Administrator by
the terms and provisions of this Agreement.
(c) The Administrator may not resign unless it is prohibited from serving
as such by law as evidenced by an Opinion of Counsel to such effect delivered to
the Indenture Trustee and the Trustee. Notwithstanding the foregoing or anything
to the contrary herein or in the other Basic Documents, the Indenture Trustee,
to the extent it is acting as successor Administrator pursuant hereto and
thereto, 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 other Basic
Documents.
Section 5.03. Notification to Noteholders and Certificateholders. Upon any
termination of, or appointment of a successor to, the Administrator pursuant to
this Article V, the Trustee shall give prompt written notice thereof to
Certificateholders and the Indenture Trustee shall give prompt written notice
thereof to Noteholders and the Rating Agencies (which, in the case of any such
appointment of a successor, shall consist of prior written notice thereof to the
Rating Agencies).
Section 5.04. Waiver of Past Defaults. The Noteholders of Notes evidencing
a majority of the Outstanding Amount of the Notes (or the Certificateholders of
Certificates evidencing a majority of the outstanding Certificate Balance, in
the case of any default which does not adversely affect the Indenture Trustee or
the Noteholders) may, on behalf of all Noteholders and Certificateholders, waive
in writing any default by the Administrator in the performance of its
obligations hereunder and any consequences thereof, except a default in making
any required deposits to or payments from any of the Trust Accounts (or giving
instructions regarding the same) in accordance with this Agreement. Upon any
such waiver of a past default, such default
22
shall cease to exist, and any Administrator Default arising therefrom shall be
deemed to have been remedied for every purpose of this Agreement. No such waiver
shall extend to any subsequent or other default or impair any right consequent
thereto.
ARTICLE VI
Section 6.01. Termination.
(a) Optional Purchase of All Trust Student Loans. The Administrator shall
notify the Depositor, the Servicer, the Trustee and the Indenture Trustee in
writing, within 15 days after the last day of any Collection Period as of which
the then outstanding Pool Balance is 12% or less of the Initial Pool Balance, of
the percentage that the then outstanding Pool Balance bears to the Initial Pool
Balance. As of the last day of any Collection Period immediately preceding a
Distribution Date as of which the then outstanding Pool Balance is 10% or less
of the Initial Pool Balance, the Trustee on behalf and at the direction of the
Servicer shall have the option to purchase the Trust Estate, other than the
Trust Accounts. To exercise such option, the Servicer shall deposit pursuant to
Section 2.06 in the Collection Account an amount equal to the aggregate Purchase
Amount for the Trust Student Loans and the related rights with respect thereto,
plus the appraised value of any such other property held by the Trust other than
the Trust Accounts, such value to be determined by an appraiser mutually agreed
upon by the Servicer, the Trustee and the Indenture Trustee, and shall succeed
to all interests in and to the Trust; provided, however, that the Servicer may
not effect such purchase if such aggregate Purchase Amounts do not equal or
exceed the Minimum Purchase Amount plus any Note Interest Carryover, Certificate
Return Carryover and Carryover Servicing Fees. In the event the Servicer fails
to notify the Trustee and the Indenture Trustee in writing prior to the
acceptance by the Indenture Trustee of a bid to purchase the Trust Estate
pursuant to Section 4.04 of the Indenture that the Servicer intends to exercise
its option to purchase the Trust Estate, the Servicer shall be deemed to have
waived its option to purchase the Trust Estate as long as the Servicer has
received five (5) business days' notice from the Indenture Trustee as provided
in Section 4.04 of the Indenture.
(b) Insolvency of the Depositor. Upon any sale of the assets of the Trust
pursuant to Section 9.02 of the Trust Agreement, the Administrator shall
instruct the Indenture Trustee in writing to deposit the net proceeds from such
sale after all payments and reserves therefrom (including the expenses of such
sale) have been made (the "Insolvency Proceeds") in the Collection Account. On
the first Distribution Date following the date on which the Insolvency Proceeds
are deposited in the Collection Account, the Administrator shall instruct the
Indenture Trustee to make the following distributions (after the application on
such Distribution Date of the amount of Available Funds and amounts on deposit
in the Reserve Account pursuant to Sections 2.07 and 2.08) from the Insolvency
Proceeds and any funds remaining on deposit in the Reserve Account (including
the proceeds of any sale of investments therein as described in the following
sentence):
(i) to the Noteholders, any unpaid Noteholders' Interest
Distribution Amount for such Distribution Date as set forth in Sections
2.07(c)(iii);
23
(ii) to the Noteholders, the outstanding principal balance of the
Notes in the same order and priority as is set forth in Sections
2.07(c)(v) and (c)(vi);
(iii) to the Certificateholders, any unpaid Certificate Return
Distribution Amount for such Distribution Date;
(iv) to the Certificateholders, the Certificate Balance;
(v) to the Servicer, any unpaid Carryover Servicing Fees;
(vi) to the Noteholders, any unpaid Note Interest Carryover; and
(vii) to the Certificateholders, any unpaid Certificate Return
Carryover.
Any investments on deposit in the Reserve Account which will not mature on or
before such Distribution Date shall be sold by the Indenture Trustee at such
time as will result in the Indenture Trustee receiving the proceeds from such
sale not later than the Business Day preceding such Distribution Date. Any
Insolvency Proceeds remaining after the deposits described above shall be paid
to the Depositor.
(c) Notice. Notice of any termination of the Trust shall be given by the
Administrator to the Trustee and the Indenture Trustee as soon as practicable
after the Administrator has received notice thereof.
(d) Succession. Following the satisfaction and discharge of the Indenture
and the payment in full of the principal of and interest on the Notes, the
Certificateholders shall succeed to the rights of the Noteholders hereunder and
the Trustee shall succeed to the rights of, and assume the obligations of, the
Indenture Trustee pursuant to this Agreement and any other Basic Documents.
ARTICLE VII
Section 7.01. Protection of Interests in Trust.
(a) The Depositor shall execute and file such financing statements and
cause to be executed and filed such continuation statements, all in such manner
and in such places as may be required by law fully to preserve, maintain, and
protect the interest of the Issuer, the Trustee and the Indenture Trustee in the
Trust Student Loans and in the proceeds thereof. The Depositor shall deliver (or
cause to be delivered) to the Trustee and the Indenture Trustee file-stamped
copies of, or filing receipts for, any document filed as provided above, as soon
as available following such filing.
(b) Neither the Depositor nor the Servicer shall change its name, identity
or corporate structure in any manner that would, could or might make any
financing statement or continuation statement filed in accordance with clause
(a) above seriously misleading within the meaning of ss.9-402(7) of the UCC,
unless it shall have given the Trustee and the Indenture Trustee at least
24
five days' prior written notice thereof and shall have promptly filed
appropriate amendments to all previously filed financing statements or
continuation statements.
(c) Each of the Depositor and the Servicer shall have an obligation to give
the Trustee and the Indenture Trustee at least 60 days' prior written notice of
any relocation of its principal executive office if, as a result of such
relocation, the applicable provisions of the UCC would require the filing of any
amendment of any previously filed financing or continuation statement or of any
new financing statement and shall promptly file any such amendment. The Servicer
shall at all times maintain each office from which it shall service Trust
Student Loans, and its principal executive office, within the United States of
America.
(d) The Servicer shall maintain accounts and records as to each Trust
Student Loan accurately and in sufficient detail to permit (i) the reader
thereof to know at any time the status of such Trust Student Loan, including
payments and recoveries made and payments owing (and the nature of each) and
(ii) reconciliation between payments or recoveries on (or with respect to) each
Trust Student Loan and the amounts from time to time deposited by the Servicer
in the Collection Account in respect of such Trust Student Loan.
(e) The Servicer shall maintain its computer systems so that, from and
after the time of sale of the Trust Student Loans to the Trustee on behalf of
the Issuer, the Servicer's master computer records (including any backup
archives) that refer to a Trust Student Loan shall indicate clearly the interest
of the Issuer, the Trustee and the Indenture Trustee in such Trust Student Loan
and that such Trust Student Loan is owned by the Trustee on behalf of the Issuer
and has been pledged to the Indenture Trustee. Indication of the Issuer's, the
Trustee's and the Indenture Trustee's interest in a Trust Student Loan shall be
deleted from or modified on the Servicer's computer systems when, and only when,
the related Trust Student Loan shall have been paid in full or repurchased.
(f) If at any time the Depositor or the Administrator shall propose to
sell, grant a security interest in, or otherwise transfer any interest in
student loans to any prospective purchaser, lender or other transferee, the
Servicer shall give to such prospective purchaser, lender or other transferee
computer tapes, records or printouts (including any restored from backup
archives) that, if they refer in any manner whatsoever to any Trust Student
Loan, indicate clearly that such Trust Student Loan has been sold and is owned
by the Trustee on behalf of the Issuer and has been pledged to the Indenture
Trustee.
(g) Upon reasonable notice, the Servicer shall permit the Indenture Trustee
and its agents at any time during normal business hours to inspect, audit and
make copies of and abstracts from the Servicer's records regarding any Trust
Student Loan.
(h) Upon request, at any time the Trustee or the Indenture Trustee have
reasonable grounds to believe that such request would be necessary in connection
with its performance of its duties under the Basic Documents, the Servicer shall
furnish to the Trustee or to the Indenture Trustee (in each case, with a copy to
the Administrator), within five Business Days, a list of all Trust Student Loans
(by borrower social security number, type of loan and date of issuance) then
held as part of the Trust, and the Administrator shall furnish to the Trustee or
to the Indenture Trustee, within 20 Business Days thereafter, a comparison of
such list to the list of Initial Trust
25
Student Loans set forth in Schedule A to the Indenture as of the Closing Date,
and, for each Trust Student Loan that has been removed from the pool of loans
held by the Trustee on behalf of the Issuer, information as to the date as of
which and circumstances under which each such Trust Student Loan was so removed.
(i) The Depositor shall deliver to the Trustee and the Indenture Trustee:
(A) promptly after the execution and delivery of this Agreement
and of each amendment thereto and on each Transfer Date, an Opinion of
Counsel either (1) stating that, in the opinion of such counsel, all
financing statements and continuation statements have been executed and
filed that are necessary fully to preserve and protect the interest of
the Trustee and the Indenture Trustee in the Trust Student Loans, and
reciting the details of such filings or referring to prior Opinions of
Counsel in which such details are given, or (2) stating that, in the
opinion of such counsel, no such action shall be necessary to preserve
and protect such interest; and
(B) within 120 days after the beginning of each calendar year
beginning with the first calendar year beginning more than three months
after the Cutoff Date, an Opinion of Counsel, dated as of a date during
such 120-day period, either (1) stating that, in the opinion of such
counsel, all financing statements and continuation statements have been
executed and filed that are necessary fully to preserve and protect the
interest of the Trustee and the Indenture Trustee in the Trust Student
Loans, and reciting the details of such filings or referring to prior
Opinions of Counsel in which such details are given, or (2) stating
that, in the opinion of such counsel, no such action shall be necessary
to preserve and protect such interest; provided, that a single Opinion
of Counsel may be delivered in satisfaction of the foregoing
requirement and that of Section 3.06(b) of the Indenture.
Each Opinion of Counsel referred to in clause (A) or (B) above shall
specify (as of the date of such opinion and given all applicable laws as in
effect on such date) any action necessary to be taken in the following year to
preserve and protect such interest.
(j) The Depositor shall, to the extent required by applicable law, cause
the Certificates and the Notes to be registered with the Commission pursuant to
Section 12(b) or Section 12(g) of the Exchange Act within the time periods
specified in such sections.
ARTICLE VIII
Section 8.01. Independence of the Administrator. For all purposes of this
Agreement, the Administrator shall be an independent contractor and shall not be
subject to the supervision of the Issuer or the Trustee with respect to the
manner in which it accomplishes the performance of its obligations hereunder.
Unless expressly authorized by the Issuer, the Administrator shall have no
authority to act for or represent the Issuer or the Trustee in any way and shall
not otherwise be deemed an agent of the Issuer or the Trustee.
Section 8.02. No Joint Venture. Nothing contained in this Agreement (i)
shall constitute the Administrator and either of the Issuer or the Trustee as
members of any partnership, joint
26
venture, association, syndicate, unincorporated business or other separate
entity, (ii) shall be construed to impose any liability as such on any of them
or (iii) shall be deemed to confer on any of them any express, implied or
apparent authority to incur any obligation or liability on behalf of the others.
Section 8.03. Other Activities of Administrator. Nothing herein shall
prevent the Administrator or its Affiliates from engaging in other businesses
or, in its sole discretion, from acting in a similar capacity as an
administrator for any other person or entity even though such person or entity
may engage in business activities similar to those of the Issuer, the Trustee or
the Indenture Trustee.
Section 8.04. Powers of Attorney. The Trustee and the Indenture Trustee
shall upon the written request of the Administrator furnish the Administrator
with any powers of attorney and other documents reasonably necessary or
appropriate to enable the Administrator to carry out its administrative duties
hereunder.
Section 8.05. Amendment. This Agreement (other than Sections 2.01 and 2.02)
may be amended by the Depositor, the Servicer, the Administrator, the Trustee
and the Indenture Trustee, without the consent of any of the Noteholders or the
Certificateholders, to cure any ambiguity, to correct or supplement any
provisions in this Agreement or for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions in this Agreement or
of modifying in any manner the rights of the Noteholders or the
Certificateholders; provided, however, that such action shall not, as evidenced
by an Opinion of Counsel delivered to the Eligible Lender Trustee and the
Indenture Trustee, adversely affect in any material respect the interests of any
Noteholder or Certificateholder.
Sections 2.01 and 2.02 may be amended from time to time by a written
amendment duly executed and delivered by the Trustee, the Indenture Trustee and
the Administrator, without the consent of the Noteholders and the
Certificateholders, for the purpose of adding any provision to or changing in
any manner or eliminating any of the provisions of such Article; provided, that
such amendment will not, in an Opinion of Counsel obtained on behalf of the
Issuer and satisfactory to the Indenture Trustee and the Trustee, materially and
adversely affect the interest of any Noteholder or Certificateholder.
This Agreement (other than Sections 2.01 and 2.02) may also be amended
from time to time by the Depositor, the Servicer, the Administrator, the
Indenture Trustee and the Trustee, and Sections 2.01 and 2.02 may also be
amended by the Trustee, the Administrator and the Indenture Trustee, with the
consent of the Noteholders of Notes evidencing a majority of the Outstanding
Amount of the Notes and the consent of the Certificateholders of Certificates
evidencing a majority of the Certificate Balance, for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Agreement or of modifying in any manner the rights of the Noteholders or
the Certificateholders; provided, however, that no such amendment shall (a)
increase or reduce in any manner the amount of, or accelerate or delay the
timing of, collections of payments with respect to Trust Student Loans or
distributions that shall be required to be made for the benefit of the
Noteholders or the Certificateholders or (b) reduce the aforesaid percentage of
the Outstanding Amount of the Notes and the Certificate Balance, the
27
Noteholders or the Certificateholders of which are required to consent to any
such amendment, without the consent of all outstanding Noteholders and
Certificateholders.
Promptly after the execution of any such amendment (or, in the case of the
Rating Agencies, fifteen days prior thereto), the Trustee shall furnish written
notification of the substance of such amendment to each Certificateholder, the
Indenture Trustee and each of the Rating Agencies.
It shall not be necessary for the consent of Certificateholders or
Noteholders pursuant to this Section to approve the particular form of any
proposed amendment or consent, but it shall be sufficient if such consent shall
approve the substance thereof.
Prior to the execution of any amendment to this Agreement, the Trustee and
the Indenture Trustee shall be entitled to receive and rely upon an Opinion of
Counsel stating that the execution of such amendment is authorized or permitted
by this Agreement and the Opinion of Counsel referred to in Section 7.01(i)(A).
The Trustee and the Indenture Trustee may, but shall not be obligated to, enter
into any such amendment which affects the Trustee's or the Indenture Trustee's,
as applicable, own rights, duties or immunities under this Agreement or
otherwise.
Section 8.06. Assignment. Notwithstanding anything to the contrary
contained herein, except as provided in Section 4.03 of the Servicing Agreement
and Section 4.03 of this Agreement, this Agreement may not be assigned by the
Depositor, the Administrator or the Servicer. This Agreement may be assigned by
the Trustee only to its permitted successor pursuant to the Trust Agreement.
Section 8.07. Limitations on Rights of Others. The provisions of this
Agreement are solely for the benefit of the Depositor, the Servicer, the Issuer,
the Indenture Trustee and the Trustee and for the benefit of the
Certificateholders and the Noteholders, as third party beneficiaries, and
nothing in this Agreement, whether express or implied, shall be construed to
give to any other Person any legal or equitable right, remedy or claim in the
Trust Estate or under or in respect of this Agreement or any covenants,
conditions or provisions contained herein.
Section 8.08. Assignment to Indenture Trustee. The Depositor hereby
acknowledges and consents to any Grant by the Issuer to the Indenture Trustee
pursuant to the Indenture for the benefit of the Noteholders of a security
interest in all right, title and interest of the Issuer in, to and under the
Trust Student Loans and the assignment of any or all of the Issuer's rights and
obligations under this Agreement and the Sale Agreement and the Depositor's
rights under the Purchase Agreement to the Indenture Trustee. The Servicer
hereby acknowledges and consents to the assignment by the Issuer to the
Indenture Trustee pursuant to the Indenture for the benefit of the Noteholders
of any and all of the Issuer's rights and obligations under this Agreement and
under the Servicing Agreement.
Section 8.09. Nonpetition Covenants.
(a) Notwithstanding any prior termination of this Agreement, the Servicer,
the Administrator, the Trustee and the Depositor shall not, prior to the date
which is one year and one day after the termination of this Agreement,
acquiesce, petition or otherwise invoke or cause the Issuer to invoke the
process of any court or government authority for the purpose of
28
commencing or sustaining a case against the Issuer under any Federal or state
bankruptcy, insolvency or similar law or appointing a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official of the
Issuer or any substantial part of its property, or ordering the winding up or
liquidation of the affairs of the Issuer.
(b) Notwithstanding any prior termination of this Agreement, the Servicer,
the Administrator, the Issuer and the Trustee shall not, prior to the date which
is one year and one day after the termination of this Agreement, acquiesce,
petition or otherwise invoke or cause the Depositor to invoke the process of any
court or government authority for the purpose of commencing or sustaining a case
against the Depositor under any insolvency or similar law or appointing a
receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official of the Depositor or any substantial part of its property, or
ordering the winding up or liquidation of the affairs of the Depositor.
Section 8.10. Limitation of Liability of Trustee and Indenture Trustee.
(a) Notwithstanding anything contained herein to the contrary, this
Agreement has been signed by Chase Manhattan Bank USA, National Association not
in its individual capacity but solely in its capacity as Trustee of the Issuer
and in no event shall Chase Manhattan Bank USA, National Association in its
individual capacity have any liability for the representations, warranties,
covenants, agreements or other obligations of the Issuer or the Trustee
hereunder or in any of the certificates, notices or agreements delivered
pursuant hereto as to all of which recourse shall be had solely to the assets of
the Issuer.
(b) Notwithstanding anything contained herein to the contrary, this
Agreement has been accepted by JPMorgan Chase Bank not in its individual
capacity but solely as Indenture Trustee and in no event shall JPMorgan Chase
Bank have any liability for the representations, warranties, covenants,
agreements or other obligations of the Issuer hereunder or in any of the
certificates, notices or agreements delivered pursuant hereto, as to all of
which recourse shall be had solely to the assets of the Issuer.
Section 8.11. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of New York, without reference to its
conflict of law provisions, and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws.
Section 8.12. 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 8.13. Counterparts. This Agreement may be executed in counterparts,
each of which when so executed shall together constitute but one and the same
agreement.
Section 8.14. 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.
29
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.
XXXXXX XXX, INC.
as Administrator
By:
--------------------------------------------------
Name:
------------------------------------------------
Title:
-----------------------------------------------
SLM EDUCATION CREDIT FUNDING LLC
as Depositor
By:
--------------------------------------------------
Name:
------------------------------------------------
Title:
-----------------------------------------------
XXXXXX MAE SERVICING L.P.
as Servicer
By:
--------------------------------------------------
Name:
------------------------------------------------
Title:
-----------------------------------------------
JPMORGAN CHASE BANK, not in its individual capacity
but solely as the Indenture Trustee
By:
--------------------------------------------------
Name:
------------------------------------------------
Title:
-----------------------------------------------
SLM PRIVATE CREDIT STUDENT LOAN TRUST 200_-__
By: CHASE MANHATTAN BANK USA, National Association,
not in its individual capacity but solely
as Trustee
By:
--------------------------------------------------
Name:
------------------------------------------------
Title:
-----------------------------------------------
30
