Exhibit 99.3
[FORM OF] ADMINISTRATION AGREEMENT dated as of _______ 1, 1999
among XXXXXX XXX STUDENT LOAN TRUST 1999-A, a Delaware trust (the
"ISSUER"), XXXXXX MAE EDUCATION LOAN CORPORATION, a Delaware
non-profit corporation, as administrator (the
"ADMINISTRATOR"), and STATE STREET BANK AND TRUST COMPANY, a
Massachusetts banking corporation, not in its individual
capacity but solely as Indenture Trustee (the "INDENTURE
TRUSTEE").
W I T N E S S E T H
WHEREAS the Issuer was formed pursuant to the Trust Agreement
dated as of ______ 1, 1999 (the "TRUST AGREEMENT") among Xxxxxx Xxx Education
Loan Corporation, as depositor, Xxxxxx Mae Funding, LLC and The First National
Bank of Chicago, as eligible lender trustee (the "ELIGIBLE LENDER TRUSTEE"), and
is issuing the Class A-1 Floating Rate Asset-Backed Notes (the "CLASS A-1
NOTES") and the Class A-2 Floating Rate Asset-Backed Notes (the "CLASS A-2
NOTES," and together with the Class A-1 Notes, the "NOTES") pursuant to the
Indenture dated as of _______ 1, 1999 (the "INDENTURE") between the Issuer and
the Indenture Trustee, and is issuing the Floating Rate Asset-Backed
Certificates (the "CERTIFICATES") pursuant to the Trust Agreement (capitalized
terms used herein and not defined herein shall have the meanings assigned to
them in Appendix A hereto, which also contains rules of usage and construction
that shall be applicable herein); and
WHEREAS the Issuer has entered into certain agreements in
connection with the issuance of the Notes and the Certificates, including the
Loan Sale Agreement, the Master Servicing Agreement, the Note Depository
Agreement, the Certificate Depository Agreement, the Guarantee Agreements, the
Trust Agreement and the Indenture (all such agreements being collectively
referred to herein as the "RELATED AGREEMENTS"); and
WHEREAS, pursuant to the Related Agreements, the Issuer and
the Eligible Lender 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 Certificates; and
WHEREAS the Issuer and the Eligible Lender Trustee desire to
have the Administrator perform certain of the duties of the Issuer and the
Eligible Lender Trustee referred to in the preceding clause, and to provide such
additional services consistent with the terms of
this Agreement and the Related Agreements as the Issuer and the Eligible Lender
Trustee may from time to time request; and
WHEREAS the Administrator has the capacity to provide the
services required hereby and is willing to perform such services for the Issuer
and the Eligible Lender Trustee on the terms set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants
contained herein and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties agree as follows:
1. REPRESENTATIONS OF THE ADMINISTRATOR. The Administrator
makes the following representations on which the Issuer and the Eligible Lender
Trustee are deemed to have relied. The representations speak as of the execution
and delivery of this Agreement and as of the Closing Date in the case of the
Initial Trust Loans, as of the applicable Transfer Date in the case of the
Serial Loans and as of the relevant date of assignment in the case of any
Qualified Substitute Student Loan, but shall survive the sale of the Trust Loans
to the Eligible Lender Trustee on behalf of the Issuer and the pledge thereof to
the Indenture Trustee pursuant to the Indenture.
(a) ORGANIZATION AND GOOD STANDING. The Administrator is duly
organized and validly existing as a corporation in good standing under the laws
of the State of Delaware, with the power and authority to own its properties and
to conduct its business as such properties are currently owned and such business
is currently conducted.
(b) POWER AND AUTHORITY OF THE ADMINISTRATOR. The
Administrator has the corporate power and authority to execute and deliver this
Agreement and to carry out its terms, and the execution, delivery and
performance of this Agreement 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 certificate of incorporation or by-laws of the
Administrator, or any indenture, agreement or other instrument to which the
Administrator is a party or by which it shall be bound; nor result in the
creation or imposition of any Lien upon any of its properties pursuant to the
terms of any such indenture, agreement or other instrument; nor violate any law
or, to the knowledge of the Administrator, any order, rule or regulation
applicable to the Administrator of any court or of any federal or state
regulatory body, administrative agency or other governmental instrumentality
having jurisdiction over the Administrator or its properties. The consummation
by the Administrator of the transactions contemplated by this Agreement will
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not result in the loss of any Guarantee Payments by the Trust or any reinsurance
payments with respect to any Trust Loan.
(e) NO PROCEEDINGS. There are no proceedings or investigations
pending against the Administrator or, to its best knowledge, threatened against
it, before any court, regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Administrator or its
properties: (i) asserting the invalidity of this Agreement, the Indenture or any
of the other Related Agreements, the Notes or the Certificates, (ii) seeking to
prevent the issuance of the Notes or the Certificates or the consummation of any
of the transactions contemplated by this Agreement, the Indenture or any of the
other Related Agreements, (iii) seeking any determination or ruling that could
reasonably be expected to have a material and adverse effect on the performance
by the Administrator of its obligations under, or the validity or enforceability
of, this Agreement, the Indenture, any of the other Related Agreements, the
Notes or the Certificates or (iv) seeking to affect adversely the federal or
state income tax attributes of the Issuer, the Notes or the Certificates.
(f) ALL CONSENTS. All authorizations, consents, licenses,
orders or approvals of or registrations or declarations with any court,
regulatory body, administrative agency or other government instrumentality
required to be obtained, effected or given by the Administrator in connection
with the execution and delivery by the Administrator of this Agreement and the
performance by the Administrator of the transactions contemplated by this
Agreement have in each case been duly obtained, effected or given and are in
full force and effect.
2. DUTIES OF THE ADMINISTRATOR.
(a) DUTIES WITH RESPECT TO THE BASIC DOCUMENTS. The
Administrator shall perform all its duties as Administrator and the duties of
the Issuer under the Basic Documents. In addition, the Administrator shall
consult with the Eligible Lender Trustee as the Administrator deems appropriate
regarding the duties of the Issuer under the Basic Documents. The Administrator
shall monitor the performance of the Issuer and shall advise the Eligible Lender
Trustee when action is necessary to comply with the Issuer's duties under the
Basic Documents. The Administrator shall prepare for execution by the Issuer or
shall cause the preparation by other appropriate Persons of all such documents,
reports, filings, instruments, certificates and opinions as it shall be the duty
of the Issuer to prepare, file or deliver pursuant to the Basic Documents. In
furtherance of the foregoing, the Administrator shall take all appropriate
action that is the duty of the Issuer to take pursuant to the Indenture,
including such of the foregoing as are required with respect to the following
matters (references below in this subsection (a) being to sections of the
Indenture):
(A) the duty to cause the Note Registrar to keep the Note
Register and to give the Indenture Trustee prompt notice of any
appointment of a new Note Registrar and the location, or change in
location, of the Note Register (Section 2.04);
(B) the fixing or causing to be fixed of any specified record
date and the timely notification of the Indenture Trustee and
Noteholders with respect to special payment dates, if any (Section
2.07(c));
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(C) the preparation of or obtaining of the documents and
instruments required for authentication of the Notes and delivery of
the same to the Indenture Trustee (Section 2.02);
(D) the preparation, obtaining or filing of the instruments,
opinions and certificates and other documents required for the release
of collateral (Section 2.09);
(E) [reserved];
(F) the duty to cause the Note Registrar to maintain on behalf
of the Issuer an office in the Borough of Manhattan, The City of New
York, for registration of transfer or exchange of the Notes (Section
3.02);
(G) the duty to cause newly appointed Paying Agents, if any,
to deliver to the Indenture Trustee the instrument specified in the
Indenture regarding funds held in trust (Section 3.03);
(H) the direction to the Paying Agents to deposit moneys with
the Indenture Trustee (Section 3.03);
(I) the obtaining and preservation of the Issuer's
qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of the Indenture, the Notes, the Collateral and each
other instrument and agreement included in the Indenture Trust Estate
(Section 3.04);
(J) the preparation of all supplements, amendments, financing
statements, continuation statements, instruments of further assurance
and other instruments, in accordance with Section 3.05 of the
Indenture, necessary to protect the Indenture Trust Estate (Section
3.05);
(K) the delivery by the Issuer of the Opinion of Counsel on
the Closing Date and the annual delivery of Opinions of Counsel, in
accordance with Section 3.06 of the Indenture, as to the Indenture
Trust Estate, and the annual delivery of the Officers' Certificate of
the Issuer and certain other statements, in accordance with Section
3.09 of the Indenture, as to compliance with the Indenture (Sections
3.06 and 3.09);
(L) the identification to the Indenture Trustee in an
Officers' Certificate of the Issuer of a Person with whom the Issuer
has contracted to perform its duties under the Indenture (Section
3.07(b));
(M) the notification of the Indenture Trustee and the Rating
Agencies of any Master Servicer Default pursuant to the Master
Servicing Agreement and, if such Master Servicer Default arises from
the failure of the Master Servicer to perform any of its duties under
the Master Servicing Agreement, the taking of all reasonable steps
available to remedy such failure (Section 3.07(d));
(N) the preparation and obtaining of documents and instruments
required for the release of the Issuer from its obligations under the
Indenture (Section 3.10);
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(O) the prompt delivery of notice to the Indenture Trustee and
the Rating Agencies of each Event of Default, any Default under Section
5.01(iii) of the Indenture and each default by the Master Servicer
under the Master Servicing Agreement or by the Seller under the Loan
Sale Agreement (Section 3.18);
(P) the monitoring of the Issuer's obligations as to the
satisfaction and discharge of the Indenture and the preparation of an
Officers' Certificate of the Issuer and the obtaining of the Opinion of
Counsel and the Independent Certificate relating thereto (Section
4.01);
(Q) the compliance with any written directive of the Indenture
Trustee with respect to the sale of the Indenture Trust Estate in a
commercially reasonable manner if an Event of Default shall have
occurred and be continuing (Section 5.04);
(R) the preparation of any written instruments required to
confirm more fully the authority of any co-trustee or separate trustee
and any written instruments necessary in connection with the
resignation or removal of any co-trustee or separate trustee (Sections
6.08 and 6.10);
(S) the furnishing of the Indenture Trustee with the names and
addresses of Noteholders during any period when the Indenture Trustee
is not the Note Registrar (Section 7.01);
(T) the preparation and, after execution by the Issuer, the
filing with the Commission, any applicable State agencies and the
Indenture Trustee of documents required to be filed on a periodic basis
with, and summaries thereof as may be required by rules and regulations
prescribed by, the Commission and any applicable State agencies and the
transmission of such summaries to the Noteholders (Section 7.03);
(U) the opening of one or more accounts in the Issuer's name,
the preparation of Issuer Orders, Officers' Certificates of the Issuer
and Opinions of Counsel and all other actions necessary with respect to
investment and reinvestment of funds in the Trust Accounts (Sections
8.02 and 8.03);
(V) the preparation of an Issuer Request and Officers'
Certificate of the Issuer and the obtaining of an Opinion of Counsel
and Independent Certificates, if necessary, for the release of the
Indenture Trust Estate (Sections 8.04 and 8.05);
(W) the preparation of Issuer Orders and the obtaining of
Opinions of Counsel with respect to the execution of supplemental
indentures and the mailing to the Noteholders and each Rating Agency of
notices with respect to such supplemental indentures (Sections 9.01,
9.02 and 9.03);
(X) the preparation of or obtaining of the documents and
instruments required for the execution and authentication of new Notes
conforming to any supplemental indenture and the delivery of the same
to the Eligible Lender Trustee and the Indenture Trustee, respectively
(Section 9.06);
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(Y) the notification to Noteholders of redemption of the Notes
or the duty to cause the Indenture Trustee to provide such notification
(Section 10.02);
(Z) the preparation of all Officers' Certificates of the
Issuer, Opinions of Counsel and Independent Certificates with respect
to any requests by the Issuer to the Indenture Trustee to take any
action under the Indenture (Section 11.01(a));
(AA) the preparation and delivery of Officers' Certificates of
the Issuer and the obtaining of Independent Certificates, if necessary,
for the release of property from the lien of the Indenture (Section
11.01(b));
(AB) the preparation and timely delivery to Noteholders and
the Indenture Trustee of any agreements with respect to alternate
payment and notice provisions (Section 11.06);
(AC) the recording of the Indenture, if applicable (Section
11.15);
(AD) the duty to obtain a new Master Servicer as Successor
Master Servicer, and to enter into an agreement with such Successor
Master Servicer (Section 3.07(e));
(AE) the notification of the termination of the Master
Servicer and the appointment of a Successor Master Servicer (Section
3.07(f)); and
(AF) the duty to cause the Master Servicer to comply with the
Master Servicing Agreement (Section 3.14).
The Administrator shall provide to the Eligible Lender Trustee
(i) a list of jurisdictions in which the Issuer is required to be licensed and
(ii) any other information necessary for the Eligible Lender Trustee to fulfill
its obligations under Section 7.08 of the Trust Agreement.
(b) DUTIES WITH RESPECT TO THE ISSUER.
(i) In addition to the duties of the Administrator set forth
above and in the other Related Agreements, the Administrator shall perform such
calculations and shall prepare for execution by the Issuer or the Eligible
Lender Trustee or shall cause the preparation by other appropriate Persons of
all such documents, reports, filings, instruments, certificates and opinions as
it shall be the duty of the Issuer or the Eligible Lender Trustee to prepare,
file or deliver pursuant to the Related Agreements, and at the request of the
Eligible Lender Trustee shall take all appropriate action that it is the duty of
the Issuer to take pursuant to the Related Agreements. In furtherance thereof,
the Eligible Lender Trustee shall, on behalf of itself and of the Issuer,
execute and deliver to the Administrator and to each successor Administrator
appointed pursuant to the terms hereof, one or more powers of attorney
substantially in the form of Exhibit A hereto, appointing the Administrator the
attorney-in-fact of the Eligible Lender Trustee and the Issuer for the purpose
of executing on behalf of the Eligible Lender Trustee and the Issuer all such
documents, reports, filings, instruments, certificates and opinions. Subject to
Section 9 of this Agreement, and in accordance with the directions of the
Eligible Lender Trustee, the Administrator shall administer, perform or
supervise the performance of such other activities in
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connection with the Collateral (including the Related Agreements) as are not
covered by any of the foregoing provisions and as are expressly requested by the
Eligible Lender Trustee and are reasonably within the capability of the
Administrator.
(ii) Notwithstanding anything in this Agreement or the Related
Agreements to the contrary, the Administrator shall deliver to the Eligible
Lender Trustee, the Indenture Trustee, the Rating Agencies and (if the Seller is
not the Administrator) the Seller, an Officers' Certificate of the Administrator
containing all the information necessary:
(A) to pay the Department any Monthly Rebate Fees due and
payable to the Department, which Officer's Certificate shall be
delivered on that date that is three Business Days prior to the date
such fees are to be remitted to the Department;
(B) on each Transfer Date, to calculate the Purchase
Collateral Balance for Serial Loans purchased on such date, which
Officers' Certificate, in each case, shall be delivered on the Business
Day preceding such Transfer Date;
(C) to pay the Master Servicer the Servicing Fee due on each
Monthly Payment Date and each Quarterly Payment Date pursuant to
Section 2(d)(iii)(A), 2(d)(iv)(A) and 2(e)(iv)(A), which Officers'
Certificate shall be delivered on the each Determination Date; and
(D) to make all the distributions required by Sections 2(d)
and 2(e) for the Monthly Collection Period or Collection Period, as the
case may be, preceding the date of such Officers' Certificate, which
Officers' Certificate shall be delivered on each Determination Date.
(iii) [Reserved.]
(iv) Notwithstanding anything in this Agreement or the Related
Agreements to the contrary, the Administrator shall be responsible for
performance of the duties of the Eligible Lender Trustee set forth in Section
5.04 of the Trust Agreement with respect to, among other things, any tax
information or accounting report required to be distributed to Note Owners and
Certificate Owners.
(v) [Reserved.]
(vi) The Administrator shall perform the duties of the
Administrator specified in Sections 10.02 and 10.03 of the Trust Agreement
required to be performed in connection with the resignation or removal of the
Eligible Lender Trustee and the appointment of a successor Eligible Lender
Trustee, and any other duties expressly required to be performed by the
Administrator under the Trust Agreement and the other Related Agreements,
including those under Sections 6.07 and 6.08 of the Indenture.
(vii) As described in Article IX of the Trust Agreement,
notice of any termination of the Trust shall be given by the Administrator to
the Eligible Lender Trustee and the Indenture Trustee as soon as practicable
after the Administrator has received notice thereof.
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(viii) In carrying out the foregoing duties or any of its
other obligations under this Agreement, the Administrator may enter into
transactions with or otherwise deal with any of its Affiliates; PROVIDED,
HOWEVER, that the terms of any such transactions or dealings shall be in
accordance with any directions received from the Issuer and shall be, in the
Administrator's opinion, no less favorable to the Issuer, the Noteholders and
the Certificateholders than would be available from unaffiliated parties.
(c) ESTABLISHMENT AND MAINTENANCE OF TRUST ACCOUNTS.
(i) The Administrator, for the benefit of the Issuer, shall
establish and maintain in the name of the Indenture Trustee an Eligible Deposit
Account (the "COLLECTION ACCOUNT"), bearing a designation clearly indicating
that the funds deposited therein are held for the benefit of the Indenture
Trustee, on behalf of the Securityholders. 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 State Street Bank and 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 Indenture Trustee,
on behalf of the Securityholders. 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 State Street Bank and Trust Company.
(iii) [Reserved]
(iv) [Reserved]
(v) Funds on deposit in the Collection Account and the Reserve
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, that it is understood and
agreed that the Indenture Trustee shall not be liable for any loss arising from
such investment in Eligible Investments. All such Eligible Investments shall be
held by (or by any custodian on behalf of) the Indenture Trustee for the benefit
of the Issuer; PROVIDED, HOWEVER, that on the Business Day preceding each
Monthly Payment Date all interest and other investment income (net of losses and
investment expenses) on funds on deposit therein shall be deposited into the
Collection Account and shall be deemed to constitute a portion of the Monthly
Available Funds for each Monthly Payment Date that is not a Quarterly Payment
Date, and a portion of the Available Funds for each Quarterly Payment Date.
Other than as permitted in writing by the Rating Agencies, funds on deposit in
the Trust Accounts shall be invested in Eligible Investments that will mature so
that funds sufficient to pay the Servicing Fee and the Administration Fee will
be available in the Collection Account on the Business Day preceding each
Monthly Payment Date that is not a Quarterly Payment Date.
(vi) (A) The Indenture Trustee, on behalf the Securityholders,
shall possess all right, title and interest in all funds on
deposit from time to time in the Trust Accounts and in all
proceeds thereof (including all income thereon) and all such
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funds, investments, proceeds and income shall be part of the
Trust Estate. The Trust Accounts shall be under the sole
dominion and control of the Indenture Trustee for the benefit
of the Securityholders. If, at any time, any of the Trust
Accounts ceases to be an Eligible Deposit Account, the
Indenture Trustee (or the Administrator on its behalf) agrees,
by its acceptance hereof, that it shall within ten Business
Days (or such longer period, not to exceed 30 calendar days,
as to which each Rating Agency may consent) establish a new
Trust Account as an Eligible Deposit Account and shall
transfer any cash and/or any investments to such new Trust
Account. In connection with the foregoing, the Administrator
agrees that, in the event that any of the Trust Accounts are
not accounts with the Indenture Trustee, the Administrator
shall notify the Indenture Trustee in writing promptly upon
any of such Trust Accounts ceasing to be an Eligible Deposit
Account.
(B) With respect to the Trust Account Property, the Indenture
Trustee agrees, by its acceptance hereof, that:
(1) any Trust Account Property that is held in
deposit accounts shall be held solely in
Eligible Deposit Accounts, subject to the
next to the last sentence of Section 2(c)
(vi) (A) above; and each such Eligible
Deposit Account shall be subject to the
exclusive custody and control of the
Indenture Trustee, and the Indenture Trustee
shall have sole signature authority with
respect thereto;
(2) any Trust Account Property that constitutes
Physical Property shall be Delivered to the
Indenture Trustee in accordance with
paragraph (a) of the definition of
"Delivery" and shall be held, pending
maturity or disposition, solely by the
Indenture Trustee or a "securities
intermediary" (as such term is defined in
Section 8-103(a)(14) of the UCC) acting
solely for the Indenture Trustee;
(3) any Trust Account Property that is a
book-entry security held through the Federal
Reserve System pursuant to federal
book-entry regulations shall be Delivered in
accordance with paragraph (b) of the
definition of "Delivery" and shall be
maintained by the Indenture Trustee, pending
maturity or disposition, through continued
book-entry registration of such Trust
Account Property as described in such
paragraph; and
(4) any Trust Account Property that is an
"uncertificated security" (as such term is
defined in Section 8-103(a)(18) of the UCC)
and that is not governed by Section
2(c)(B)(3) above shall be Delivered to the
Indenture Trustee in accordance with
paragraph (c) of the definition of
"Delivery" and shall be maintained by the
Indenture Trustee, pending maturity or
disposition, through continued registration
of the Indenture Trustee's (or its
nominee's) ownership of such security.
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(C) The Administrator shall have the power, revocable by the
Indenture Trustee or by the Eligible Lender Trustee with the
consent of the Indenture Trustee, for cause or upon the
occurrence and during the continuance of an Administrator
Default, to instruct the Indenture Trustee to make withdrawals
and payments from the Trust Accounts for the purpose of
permitting the Master Servicer or the Eligible Lender Trustee
to carry out their respective duties under the Master
Servicing Agreement and the Trust Agreement, permitting the
Indenture Trustee to carry out its duties under the Indenture
and withdrawing any amounts deposited in error into such
accounts.
(vii) On each Determination Date, the Administrator shall
calculate all amounts required to be deposited in the Collection Account and the
Reserve Account and the amounts to be distributed therefrom on the related
Monthly Payment Date, Quarterly Payment Date or other dates from which amounts
therein are to be distributed.
(d) WITHDRAWALS FROM THE COLLECTION ACCOUNT. The Administrator
shall instruct the Indenture Trustee (based, in the case of clauses (ii) and
(iii) of this Section 2(d), on the information contained in the Master
Servicer's report delivered with respect to the applicable Determination Date
pursuant to Section 3.07 of the Master Servicing Agreement) to make withdrawals
from amounts deposited in the Collection Account at the following times and for
the following purposes, and the Indenture Trustee shall comply with such
instructions:
(i) from time to time during each Collection Period to pay the
Department any Monthly Rebate Fees due and payable to the Department;
(ii) on each Transfer Date to pay to the Seller, pursuant to
Section 2.02 of the Loan Sale Agreement, the aggregate Purchase Collateral
Balance for Serial Loans purchased by the Eligible Lender Trustee on behalf of
the Issuer on such date; PROVIDED , HOWEVER, that the amount paid to the Seller
for the purchase of Serial Loans on such Transfer Date plus the amount of funds
remitted for the purchase of Serial Loans on each Transfer Date since the
preceding Quarterly Payment Date shall not exceed the Net Principal Cash Flow
Amount for such Transfer Date; and PROVIDED, FURTHER, that any Purchase Premium
Amounts for Serial Loans shall be paid only out of Reserve Account Excess as set
forth in Section 2(e)(ii) below;
(iii) on each Monthly Payment Date that is not a Quarterly
Payment Date, to make the following deposits and distributions to the Persons
specified below by 11:00 a.m. (New York time), to the extent of Monthly
Available Funds for such Monthly Payment Date in the Collection Account, in the
following order of priority:
(A) to the Master Servicer, the Servicing Fee with
respect to the preceding calendar month and all unpaid
Servicing Fees from prior months; and
(B) to the Administrator, from the amount of the
Monthly Available Funds remaining after the application of
clause (A), the Administration Fee with respect to the
preceding calendar month and all unpaid Administration Fees
from prior months;
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(iv) on each Quarterly Payment Date, to make the following
deposits and distributions to the Persons or the account specified below by
11:00 a.m. (New York time), to the extent of Available Funds for such Quarterly
Payment Date in the Collection Account, in the following order of priority:
(A) to the Master Servicer, the Servicing Fee with
respect to the preceding calendar month and all unpaid
Servicing Fees from prior months;
(B) to the Administrator, from the amount of the
Available Funds remaining after the application of clause (A),
the Administration Fee with respect to the preceding calendar
month and all unpaid Administration Fees from prior months;
(C) to the Indenture Trustee for distribution
pursuant to Section 8.02(c) of the Indenture, in the following
order of priority, from the amount of the Available Funds
remaining after the application of subclauses (A) and (B): the
Class A-1 Noteholders' Interest Distribution Amount and the
Class A-2 Noteholders' Interest Distribution Amount with
respect to such Quarterly Payment Date, PRO RATA, based on the
ratio of each such amount to the total of such amounts;
(D) to the Eligible Lender Trustee for distribution
pursuant to Article V of the Trust Agreement, from the amount
of Available Funds remaining after the application of
subclauses (A), (B) and (C) above, the Certificateholders'
Return Distribution Amount for such Quarterly Payment Date;
(E) to the Indenture Trustee for distribution
pursuant to Section 8.02(c) of the Indenture, from the amount
of Available Funds remaining after the application of
subclauses (A) through (D) above, the Noteholders' Principal
Distribution Amount for such Quarterly Payment Date;
(F) to the Eligible Lender Trustee for distribution
pursuant to Article V of the Trust Agreement, from the amount
of Available Funds remaining after application of subclauses
(A) through (E) above, the Certificateholders' Balance
Distribution Amount for such Quarterly Payment Date; and
(G) to the Reserve Account, the amount of Available
Funds remaining after the application of subclauses (A)
through (F) above.
Except in the case of amounts deposited into the Reserve
Account pursuant to Section 2(d)(iv)(G) above, amounts properly calculated,
reported and withdrawn from the Collection Account and properly distributed
pursuant to this Section 2(d) in accordance with the terms hereof shall be
deemed released from the Trust Estate and the security interest therein granted
to the Indenture Trustee, and the Persons to whom such amounts are distributed
shall in no event be required to refund any such distributed amounts.
(e) RESERVE ACCOUNT.
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(i) The Issuer shall deposit the Reserve Account Initial
Deposit into the Reserve Account as required by Section 2.01 of the Loan Sale
Agreement.
(ii) With respect to any amount in the Reserve Account on any
Quarterly Payment Date (after giving effect to all deposits thereto on such
Quarterly Payment Date and to all withdrawals therefrom necessary to make the
distributions required to be made from the Available Funds on such Quarterly
Payment Date) in excess of the Specified Reserve Account Balance for such
Quarterly Payment Date (the "RESERVE ACCOUNT EXCESS"), the Administrator shall
instruct the Indenture Trustee to apply such Reserve Account Excess to the
following (in the priority indicated): (A) to pay to the Seller any unpaid
Purchase Premium Amounts for any Serial Loans purchased by the Issuer prior to
the end of the related Collection Period; (B) if such Quarterly Payment Date is
on or prior to the Parity Date, to pay to the Indenture Trustee for distribution
to Noteholders pursuant to Section 8.02(d) of the Indenture an amount equal to
the lesser of (x) the remaining amount of such excess and (y) the amount by
which the sum of (1) the aggregate principal amount of the Notes and (2) the
Certificate Balance of the Certificates, after giving effect to all other
distributions in respect of principal of the Securities on such Quarterly
Payment Date, exceeds the sum of (3) the Pool Balance as of the close of
business on the last day of the related Collection Period and (4) the amount on
deposit in the Reserve Account on such date; (C) to pay to the Indenture Trustee
for distribution to Noteholders pursuant to Section 8.02(d) of the Indenture,
out of the remaining amount of such excess, an amount equal to the aggregate
unpaid Noteholders' Interest Basis Carryover for such Quarterly Payment Date;
(D) to pay to the Eligible Lender Trustee for distribution to the
Certificateholders pursuant to Article V of the Trust Agreement the aggregate
unpaid amount of any Certificateholders' Return Carryover for such Quarterly
Payment Date; and (E) to release to the Company any remaining amount of such
excess, after application of clauses (A) through (D) of this Section 2(e)(ii);
PROVIDED, HOWEVER, that if and to the extent that (x) the amount of the Master
Servicer's unpaid repurchase obligation pursuant to Section 3.05 of the Master
Servicing Agreement exceeds $[500,000] as of the last day of the preceding
Collection Period (and such Master Servicer has not been replaced by a Successor
Master Servicer), or (y) the Department fails by the last day of such preceding
Collection Period to satisfy its obligations to reimburse or replace a Federal
Guarantor pursuant to the Higher Education Act, then any Reserve Fund Excess
remaining on such Quarterly Payment Date for distribution to Company pursuant to
the subclause (E) above shall not be so distributed and shall be retained in the
Reserve Account for application in accordance with this Agreement. Amounts
properly calculated, reported and distributed pursuant to this Section 2(e)(ii)
shall be deemed released from the Trust Estate and the security interest therein
granted to the Indenture Trustee, and the Seller and the Company shall in no
event thereafter be required to refund any such distributed amounts.
(iii) Following the payment in full of the aggregate
outstanding principal amount of the Notes, the Certificate Balance of the
Certificates and of all other amounts owing or to be distributed hereunder,
under the Indenture or under the Trust Agreement to Noteholders,
Certificateholders, the Seller, the Master Servicer or the Administrator and the
termination of the Trust (including any Noteholders' Interest Basis Carryover,
Certificateholders' Return Carryover and unpaid Purchase Premium Amounts), any
amount remaining on deposit in the Trust Accounts shall be distributed to the
Company. The Company shall in no event be required to refund any amounts
properly calculated, reported and distributed pursuant to this Section
2(e)(iii).
12
(iv) (A) In the event that the Servicing Fee for any
Monthly Payment Date exceeds the amount distributed to the
Master Servicer pursuant to Section 2(d)(iii)(A) or
2(d)(iv)(A) on such Monthly Payment Date, the Administrator
shall instruct the Indenture Trustee to withdraw from the
Reserve Account on each Monthly Payment Date an amount equal
to such excess and to distribute such amount to the Master
Servicer.
(B) In the event that the Administration Fee for any
Monthly Payment Date exceeds the amount distributed to the
Administrator pursuant to Sections 2(d)(iii)(B) or 2(d)(iv)(B)
on such Monthly Payment Date, the Administrator shall instruct
the Indenture Trustee to withdraw from the Reserve Account on
such Monthly Payment Date an amount equal to such excess, to
the extent of funds available therein after giving effect to
Section 2(e)(iv)(A) above, and to distribute such amount to
the Administrator.
(C) For any Quarterly Payment Date, in the event that
the sum of the Class A-1 Noteholders' Interest Distribution
Amount, the Class A-2 Noteholders' Interest Distribution
Amount, the Certificateholders' Return Distribution Amount,
the Noteholders' Principal Distribution Amount and the
Certificateholders' Balance Distribution Amount, each for such
Quarterly Payment Date, exceeds the sum of the amounts
distributed (x) to the Indenture Trustee for distribution to
the Noteholders pursuant to Section 2(d)(iv)(C) and (E) on
such Quarterly Payment Date (y) to the Certificate Paying
Agent for distribution to the Certificateholders pursuant to
Section 2(d)(iv)(D) and (F) on such Quarterly Payment Date,
the Administrator shall instruct the Indenture Trustee to
withdraw from the Reserve Account on such Quarterly Payment
Date an amount equal to such excess, to the extent of funds
available therein after giving effect to Sections 2(e)(iv)(A)
and (B) above, and to distribute such amount as required by
Section 2(d)(iii) on such Quarterly Payment Date.
(f) [Reserved].
(g) STATEMENTS TO SECURITYHOLDERS. On each Determination Date
preceding a Quarterly Payment Date, the Administrator shall provide to the
Indenture Trustee (with a copy to the Rating Agencies) for the Indenture Trustee
to forward on such succeeding Quarterly Payment Date to each Noteholder of
record, and to the Eligible Lender Trustee for the Eligible Lender Trustee to
forward on each succeeding Quarterly Payment Date to each Certificateholder of
record, a statement substantially in the form of Exhibit B setting forth at
least the following information as to the Securities:
(A) the amount of such distribution allocable to
principal of the Securities, the amount thereof
distributable as principal of the Class A-1 Notes,
the Class A-2 Notes and the Certificates, and the
amount thereof attributable to the Class A-1
Noteholders' Principal Distribution Amount, the
amount thereof attributable to the Class A-2
Noteholders' Principal Distribution Amount, the
amount thereof attributable to the Certificate
13
Balance Distribution Amount and the amount thereof
attributable to Reserve Account Excess;
(B) the amount of the distribution allocable on such
Quarterly Payment Date to interest on the Class A-1
Notes;
(C) the amount of the distribution allocable on such
Quarterly Payment Date to interest on the Class A-2
Notes;
(D) the amount of the distribution allocable on such
Quarterly Payment Date to interest return on the
Certificates;
(E) the amount, if any, of such distribution
allocable to any Noteholders' Interest Basis
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,
after giving effect to payments allocated to
principal reported under clause (A) above;
(G) the aggregate outstanding principal amount of the
Class A-1 Notes, the aggregate outstanding principal
amount of the Class A-2 Notes, the Certificate
Balance of the Certificates, the Class A-1 Note Pool
Factor, the Class A-2 Note Pool Factor and the
Certificate Pool Factor as of such Quarterly Payment
Date, after giving effect to payments allocated to
principal reported under clause (A) above;
(H) the Note Rate (as calculated by the Indenture
Trustee) applicable with respect to each distribution
referred to in clauses (B) and (C) above, indicating
(in accordance with information supplied by the
Indenture Trustee) whether such interest rate was
calculated based on the Adjusted Student Loan Rate or
based on the Note LIBOR Rate and specifying what each
such Note Rate would have been using the alternate
basis for such calculation;
(I) the Certificate Rate (as calculated by the
Indenture Trustee if any Notes are then outstanding
or by the Administrator if all the Notes have been
retired) applicable with respect to the distribution
referred to in clause (D) above, indicating (in
accordance with information supplied) by the
Indenture Trustee or the Eligible Lender Trustee, as
applicable) whether such note was calculated based on
the Adjusted Student Loan Rate or based on the
Certificate LIBOR Rate and specifying what the
Certificate Rate would have been using the alternate
basis for such calculation;
(J) the amount of the Servicing Fee paid to the
Master Servicer on such Quarterly Payment Date and on
each Monthly Payment Date
14
following the immediately preceding Quarterly Payment
Date (including in such amount any previously unpaid
Servicing Fees from prior periods that were paid on
such date);
(K) the amount of the Administration Fee paid to the
Administrator on such Quarterly Payment Date and on
each Monthly Payment Date following the immediately
preceding Quarterly Payment Date (including in such
amount any previously unpaid Administration Fees from
prior periods that were paid on such date);
(L) the amount of the aggregate Realized Losses, if
any, for such Collection Period and the balance of
the Trust Loans that are delinquent in each
delinquency period as of the end of such Collection
Period;
(M) the balance of the Reserve Account on such
Quarterly Payment Date, after giving effect to
changes therein on such Quarterly Payment Date and
indicating whether on such Quarterly Payment Date or
any Monthly Payment Date since the preceding
Quarterly Payment Date any withdrawal was made
therefrom pursuant to Section 2(e)(ii), the amount of
each such withdrawal and the purpose(s) pursuant to
Section 2(e)(ii) for each such withdrawal;
(N) the principal balance and number of Serial Loans
conveyed to the Issuer during the related Collection
Period, the aggregate Loan Purchase Amounts thereof
and the portion thereof attributable to Purchase
Premium Amounts; and
(O) the number and principal balance of Trust Loans,
as of the end of the related Collection Period, that
are In-School, Grace, Repayment, Deferral or
Forbearance Loans as of the end of the related
Collection Period.
Each amount set forth pursuant to clauses (A), (B), (C), (D) and (E) above shall
be expressed as a dollar amount per $1,000 of original principal amount of a
Note or a Certificate, as applicable. A copy of the statements referred to above
may be obtained by any Note Owner by a written request to the Indenture Trustee
addressed to its Corporate Trust Office and by any Certificate Owner by an
written request to the Eligible Lender Trustee addressed to its Corporate Trust
Office.
(h) NON-MINISTERIAL MATTERS. With respect to matters that in
the reasonable judgment of the Administrator are non-ministerial, the
Administrator shall not take any action unless within a reasonable time before
the taking of such action, the Administrator shall have notified the Eligible
Lender Trustee of the proposed action and the Eligible Lender Trustee shall have
consented to it. For the purpose of the preceding sentence, "non-ministerial
matters" shall include, without limitation:
(A) the amendment of or any supplement to the Indenture;
15
(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
Loans);
(C) the amendment, change or modification of the Related
Agreements;
(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
Master 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.
(i) INCENTIVE LOANS AND INCENTIVE INTEREST DEPOSITS. The
Administrator may terminate or change the terms of any Incentive Program with
respect to a Trust Loan in accordance with the terms of such program, provided
such termination or change is not prohibited by the Higher Education Act, upon
notice to the Eligible Lender Trustee, and the Indenture Trustee. Until the
effective date of any termination, the Administrator shall be required to
deposit into the Collection Account the Incentive Interest Deposit with respect
to such Incentive Trust Loan as provided below. In the event that the
Administrator fails to make such deposit, the terms of such Incentive Program
shall be such that the Borrower shall be obligated to make such payment and such
Incentive Program shall terminate as to the related loan.
The Administrator shall deposit or cause to be deposited into
the Collection Account no later than the Determination Date succeeding each
Monthly Collection Period and Collection Period the aggregate Incentive Interest
Deposits with respect to Incentive Financed Student Loans in the Trust as of the
last day of such Monthly Collection Period and Collection Period. Such deposits
shall be considered deposits in respect of interest on such Incentive Trust
Loans for all purposes of the Basic Documents and shall be deemed to have been
deposited into the Collection Account for all such purposes as of such last date
of such Monthly Collection Period.
3. ANNUAL STATEMENT AS TO COMPLIANCE. (a) The Administrator
shall deliver to the Seller, the Eligible Lender Trustee and the Indenture
Trustee on or before March 31 of each year beginning March 31, 2000, an
Officers' Certificate of the Administrator dated as of December 31 of the
preceding year, stating that (i) a review of the activities of the Administrator
during the preceding 12-month period (or, in the case of the first such
certificate, during the period from the Closing Date to December 31, 1999) and
of its performance under this Agreement has been made under such officers'
supervision and (ii) to the best of such officers' knowledge, based on such
review, the Administrator has fulfilled all its obligations under this Agreement
throughout such year or, if there has been a default in the fulfillment of any
such obligation, specifying each such default known to such officers and the
nature and status thereof. The Indenture Trustee shall send a copy of each such
Officer's Certificate and each report referred to in Section 4 to the Rating
Agencies. A copy of such Officers' Certificate and each report referred to in
Section 4 may be obtained by (i) any Noteholder or Note Owner by a request in
writing to the Indenture Trustee addressed to its Corporate Trust Office,
together with
16
evidence satisfactory to the Indenture Trustee that such Person is one of the
foregoing parties, and (ii) any Certificateholder or Certificate Owner by
request in writing to the Eligible Lender Trustee addressed to its Corporate
Trust Office.
(b) The Administrator shall deliver to the Eligible Lender
Trustee, the Indenture Trustee, the Master Servicer and the Rating Agencies,
promptly after having obtained knowledge thereof, but in no event later than two
Business Days thereafter, written notice in an Officers' Certificate of the
Administrator of any event which with the giving of notice or lapse of time, or
both, would become an Administrator Default under Section 12 of this Agreement.
4. ANNUAL INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS' REPORT.
The Administrator shall cause a firm of independent certified public
accountants, which may also render other services to the Administrator, to
deliver to the Seller, the Eligible Lender Trustee and the Indenture Trustee on
or before March 31 of each year beginning March 31, 2000, a report addressed to
the Administrator and to the Seller, the Eligible Lender Trustee and the
Indenture Trustee (which report may be combined with other reports required to
be delivered by such accountants to the Administrator, the Eligible Lender
Trustee and the Indenture Trustee under the Related Agreements), to the effect
that such firm has examined certain documents and records relating to the
administration of the Financed Student Loans and of the Trust during the
preceding fiscal year ended December 31 (or, in the case of the first such
report, during the period from the Closing Date to December 31, 1999) and that,
on the basis of the accounting and auditing procedures considered appropriate
under the circumstances, such firm is of the opinion that the administration of
the Trust was conducted in compliance with the terms of this Agreement, except
for (i) such exceptions as such firm shall believe to be immaterial and (ii)
such other exceptions as shall be set forth in such report. The Indenture
Trustee shall send a copy of each such report to the Rating Agencies.
Such report will also indicate that the firm is independent of
the Administrator within the meaning of the Code of Professional Ethics of the
American Institute of Certified Public Accountants.
5. ADMINISTRATOR EXPENSES. The Administrator shall be required
to pay all expenses incurred by it in connection with its activities hereunder,
including fees and disbursements of independent accountants, taxes imposed on
the Administrator and expenses incurred in connection with distributions and
reports to the Securityholders.
6. RECORDS. The Administrator shall maintain appropriate books
of account and records relating to services performed hereunder, which books of
account and records shall be accessible for inspection by the Issuer at any time
during normal business hours.
7. COMPENSATION. As compensation for the performance of the
Administrator's obligations under this Agreement and as reimbursement for its
expenses related thereto, the Administrator shall be entitled to the
Administration Fee payable monthly in arrears on each Monthly Payment Date which
shall be solely an obligation of the Issuer and payable solely as provided
herein.
17
8. ADDITIONAL INFORMATION TO BE FURNISHED TO THE ISSUER. The
Administrator shall furnish to the Issuer from time to time such additional
information regarding the Collateral as the Issuer shall reasonably request.
9. INDEPENDENCE OF THE ADMINISTRATOR. For all purposes of this
Agreement, the Administrator shall be an independent contractor and shall not be
subject to the supervision of the Issuer or the Eligible Lender Trustee with
respect to the manner in which it accomplishes the performance of its
obligations hereunder. Unless expressly authorized by the Issuer, the
Administrator shall have no authority to act for or represent the Issuer or the
Eligible Lender Trustee in any way and shall not otherwise be deemed an agent of
the Issuer or the Eligible Lender Trustee.
10. NO JOINT VENTURE. Nothing contained in this Agreement (i)
shall constitute the Administrator and either the Issuer or the Eligible Lender
Trustee as members of any partnership, joint venture, association, syndicate,
unincorporated business or other separate entity, (ii) shall be construed to
impose any liability as such on any of them or (iii) shall be deemed to confer
on any of them any express, implied or apparent authority to incur any
obligation or liability on behalf of the others.
11. OTHER ACTIVITIES OF ADMINISTRATOR. Nothing herein shall
prevent the Administrator or its Affiliates from engaging in other businesses
or, in its sole discretion, from acting in a similar capacity as an
administrator for any other Person even though such Person may engage in
business activities similar to those of the Issuer, the Eligible Lender Trustee
or the Indenture Trustee.
12. ADMINISTRATOR DEFAULT. If any one of the following events
(an "ADMINISTRATOR DEFAULT") shall occur and be continuing:
(a) any failure by the Administrator to direct the Indenture
Trustee to make any required distributions from any of the
Trust Accounts, which failure continues unremedied for five
Business Days after written notice of such failure is received
by the Administrator from the Indenture Trustee or the
Eligible Lender Trustee or after discovery of such failure by
an officer of the Administrator; or
(b) any failure by the Administrator duly to observe or to
perform in any material respect any other covenants or
agreements of the Administrator set forth in this Agreement or
any Related Agreements, which failure shall (i) materially and
adversely affect the rights of Securityholders and (ii)
continues unremedied for a period of 60 days after the date of
discovery of such failure by an officer of the Administrator
or on which written notice of such failure, requiring the same
to be remedied, shall have been given (A) to the Administrator
by the Indenture Trustee or the Eligible Lender Trustee or (B)
to the Administrator and to the Indenture Trustee and the
Eligible Lender Trustee by Securityholders representing not
less than 25% of the outstanding principal balance of the
Securities; or
(c) an Insolvency Event occurs with respect to the
Administrator; or
18
(d) any representation or warranty made by the Administrator
hereunder or under any Related Agreement, or in any
certificate furnished hereunder or under any Related
Agreement, shall prove to be untrue or incomplete in any
material respect;
then, and in each and every case, so long as the Administrator Default shall not
have been remedied, (x) if any Notes remain Outstanding, then either the
Indenture Trustee or Noteholders evidencing not less than 75% of the Outstanding
Amount of the Notes, or (y) if the Notes have been paid in full, then either the
Eligible Lender Trustee or Certificateholders evidencing not less than 75% of
the Certificate Balance of the Outstanding Certificates by notice then given in
writing to the Administrator (and to the Indenture Trustee and the Eligible
Lender Trustee if given by the Noteholders and to the Eligible Lender Trustee if
given by the Certificateholders), may terminate all the rights and obligations
(other than the obligations set forth in Section 24 hereof) of the Administrator
under this Agreement. On or after the receipt by the Administrator of such
written notice, all authority and power of the Administrator under this
Agreement, whether with respect to the Securities or the Trust Loans or
otherwise, shall, without further action, pass to and be vested in the Indenture
Trustee or such successor Administrator as may be appointed under Section 13;
and, without limitation, the Indenture Trustee (if any Notes remain Outstanding)
and the Eligible Lender Trustee are hereby authorized and empowered to execute
and deliver, for the benefit of the predecessor Administrator, as
attorney-in-fact or otherwise, any and all documents and other instruments, and
to do or accomplish all other acts or things necessary or appropriate to effect
the purposes of such notice of termination. The predecessor Administrator shall
cooperate with the successor Administrator, the Indenture Trustee (if any Notes
remain Outstanding) and the Eligible Lender Trustee in effecting the termination
of the responsibilities and rights of the predecessor Administrator under this
Agreement. All reasonable costs and expenses (including attorneys' fees and
expenses) incurred in connection with such transfer of responsibilities and
amending this Agreement to reflect such succession as Administrator pursuant to
this Section shall be paid by the predecessor Administrator upon presentation of
reasonable documentation of such costs and expenses. Upon receipt of notice of
the occurrence of an Administrator Default, the Eligible Lender Trustee shall
give notice thereof to the Rating Agencies.
13. APPOINTMENT OF SUCCESSOR. (a) Upon receipt by the
Administrator of notice of termination pursuant to Section 12, or the
resignation by the Administrator in accordance with the terms of this Agreement,
the predecessor Administrator shall continue to perform its functions as
Administrator, in the case of termination, only until the date specified in such
termination notice or, if no such date is specified in a notice of termination,
until a successor Administrator has accepted and assumed the responsibilities of
the Administrator and, in the case of resignation, until the later of (x) the
date 120 days from the delivery to the Indenture Trustee (if any Notes remain
Outstanding) and the Eligible Lender Trustee of written notice of such
resignation (or written confirmation of such notice) in accordance with the
terms of this Agreement and (y) the date upon which the predecessor
Administrator shall become legally unable to act as Administrator as specified
in the notice of resignation and accompanying Opinion of Counsel. In the event
of termination hereunder of the Administrator, the Issuer shall appoint a
successor Administrator acceptable to the Indenture Trustee if any Notes remain
Outstanding or acceptable to the Eligible Lender Trustee if the Notes have been
paid in full, and the successor Administrator shall accept its appointment by a
written assumption in form
19
acceptable to the Indenture Trustee or the Eligible Lender Trustee, as the case
may be. 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 or the Eligible Lender
Trustee, as the case may be, without further action shall automatically be
appointed the successor Administrator and the Indenture Trustee or the Eligible
Lender Trustee, as the case may be, shall be entitled to the Administration Fee.
Notwithstanding the above, the Indenture Trustee or the Eligible Lender Trustee,
as the case may be, shall, if it shall be unwilling or legally unable so to act,
appoint or petition a court of competent jurisdiction to appoint, as the
successor to the Administrator under this Agreement and the Administration
Agreement, any established institution the regular business of which shall
include the servicing of student loans.
(b) Upon appointment, the successor Administrator (including
the Indenture Trustee or the Eligible Lender Trustee, as the case may be acting
as successor Administrator) shall be the successor in all respects to the
predecessor Administrator and shall be subject to all the responsibilities,
duties and liabilities placed on the predecessor Administrator that arise
thereafter or are related thereto and shall be entitled to an amount agreed to
by such successor Administrator (which shall not exceed the Administration Fee
unless such compensation arrangements will not result in a downgrading of the
Notes or the Certificates by any Rating Agency) and all the rights granted to
the predecessor Administrator by the terms and provisions of this Agreement.
(c) The Administrator shall be entitled to resign provided
that such resignation will not result in a downgrading o the Notes or the
Certificates by any Rating Agency and provided, further, that a qualified
successor Administrator has been appointed and has assumed all the obligations
of the Administrator in accordance with the terms of this Agreement and the
Related Agreements. Notwithstanding the foregoing or anything to the contrary
herein or in the Related Agreements, the Indenture Trustee or the Eligible
Lender Trustee, as applicable, to the extent it is acting as successor
Administrator pursuant hereto, shall be entitled to resign to the extent a
qualified successor Administrator has been appointed and has assumed all the
obligations of the Administrator in accordance with the terms of this Agreement
and the Related Agreements.
14. NOTIFICATION TO SECURITYHOLDERS. Upon any termination of,
or appointment of a successor to, the Administrator pursuant to Section 12 or 13
hereof, (a) if any Notes remain Outstanding, the Indenture Trustee shall give
prompt written notice thereof to the Securityholders and the Rating Agencies or
(b) if the Notes have been paid in full, the Eligible Lender Trustee shall give
prompt written notice thereof to the Certificateholders and the Rating Agencies.
15. WAIVER OF PAST DEFAULTS. The Noteholders of Notes
evidencing not less than a majority of the Outstanding Amount of the Notes may,
on behalf of all Noteholders, waive in writing any default by the Administrator
in the performance of its obligations hereunder and any consequences thereof,
except a default in making any required deposits to or payments from any of the
Trust Accounts (or giving instructions regarding the same) in accordance with
this Agreement. Upon any such waiver of a past default, such default shall cease
to exist, and any Administrator Default arising therefrom shall be deemed to
have been remedied for every
20
purpose of this Agreement to the extent provided in such waiver. No such waiver
shall extend to any subsequent or other default or impair any right consequent
thereto.
16. NOTICES. Any notice, report or other communication given
hereunder shall be in writing (or in the form of facsimile notice, followed by
written notice) and addressed as follows:
(a) if to the Issuer, to
Xxxxxx Xxx Student Loan Trust 1999-A
c/o First Chicago Delaware Inc.
c/o FCC National Bank
000 Xxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Telephone:
Telecopy:
with a copy to the Eligible Lender Trustee
at the Corporate Trust Office of the
Eligible Lender Trustee
(b) if to the Eligible Lender Trustee, to
The First National Bank of Chicago
000 Xxxx 00xx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
(c) If to the Administrator, to
Xxxxxx Xxx Education Loan Corporation
0000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxx Xxxxxx 00000
Attention: Secretary
Telephone: (000) 000-0000
Telecopy:
with a copy to
Xxxxxx Xxx Corporation
00 Xxxxxxxxx Xxxx Xxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: General Counsel
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
(d) if to the Indenture Trustee, to
00
Xxxxx Xxxxxx Bank and Trust Company
Attention:
Telephone:
Telecopy:
or to such other address as any party shall have provided to the other parties
in writing. Any notice required to be in writing hereunder shall be deemed given
if such notice is mailed by certified mail, postage prepaid, or hand-delivered
to the address of such party as provided above.
17. AMENDMENTS. This Agreement may be amended from time to
time by a written amendment duly executed and delivered by the Issuer, the
Administrator and the Indenture Trustee, with the prior written consent of the
Eligible Lender Trustee but without the consent of the Securityholders, 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 Securityholders; PROVIDED, HOWEVER, that such amendment will not, as
evidenced by an Opinion of Counsel obtained on behalf of the Issuer and
satisfactory to the Indenture Trustee and the Eligible Lender Trustee,
materially and adversely affect the interest of any Securityholder. This
Agreement may also be amended by the Issuer, the Administrator and the Indenture
Trustee with the prior written consent of the Eligible Lender Trustee and the
Noteholders of at least a majority in the Outstanding Amount of the Notes for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Agreement or of modifying in any manner the rights
of Noteholders; PROVIDED, HOWEVER, that no such amendment may (i) increase or
reduce in any manner the amount of, or accelerate or delay the timing of,
collections of payments with respect to the Trust Loans or distributions that
are required to be made for the benefit of the Noteholders or (ii) reduce the
aforesaid percentage of the Noteholders which are required to consent to any
such amendment, without the consent of all Outstanding Noteholders. Prior to the
execution of any such amendment, the Administrator shall furnish written
notification of the substance of such amendment to each of the Rating Agencies.
18. ASSIGNMENT. Notwithstanding anything to the contrary
contained herein, except as provided in Section 13 or Section 25 of this
Agreement concerning the resignation of the Administrator, this Agreement may
not be assigned by the Administrator.
19. GOVERNING LAW. This Agreement shall be construed in
accordance with the laws of the 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.
20. HEADINGS. The section headings hereof have been inserted
for convenience of reference only and shall not be construed to affect the
meaning, construction or effect of this Agreement.
21. COUNTERPARTS. This Agreement may be executed in
counterparts, each of which when so executed shall together constitute but one
and the same agreement.
22. SEVERABILITY. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall be ineffective to the
extent of such prohibition or
22
unenforceability without invalidating the remaining provisions hereof and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
23. NOT APPLICABLE TO XXXXXX XXX EDUCATION LOAN CORPORATION IN
OTHER CAPACITIES. Nothing in this Agreement shall affect any obligation Xxxxxx
Mae Education Loan Corporation may have in any other capacity under the Related
Agreements.
24. LIABILITY OF ADMINISTRATOR; INDEMNITIES. The Administrator
shall be liable in accordance herewith only to the extent of the obligations
specifically undertaken by the Administrator under this Agreement.
The Administrator shall indemnify, defend and hold harmless
the Issuer, the Eligible Lender Trustee, the Indenture Trustee, the Master
Servicer and the Securityholders and any of the officers, directors, employees
and agents of the Issuer, the Eligible Lender Trustee, the Indenture Trustee and
the Master Servicer from and against any and all costs, expenses, losses,
claims, damages and liabilities to the extent that such cost, expense, loss,
claim, damage or liability arose out of, or was imposed upon any such Person
through, the negligence, willful misfeasance or bad faith of the Administrator
in the performance of its duties under this Agreement or by reason of reckless
disregard of its obligations and duties hereunder or thereunder.
The Administrator shall pay reasonable compensation to the
Indenture Trustee and shall reimburse the Indenture Trustee for all reasonable
expenses, disbursements and advances, and indemnify, defend and hold harmless
the Indenture Trustee and its officers, directors, employees and agents from and
against all costs, expenses, losses, claims, damages and liabilities, to the
extent and in the manner provided in, and subject to the limitations of, Section
6.07 of the Indenture.
For purposes of this Section, in the event of the termination
of the rights and obligations of the Administrator (or any successor thereto
pursuant to Section 25) as Administrator pursuant to Section 12 or a resignation
by such Administrator pursuant to this Agreement, such Administrator shall be
deemed to be the Administrator pending appointment of a successor Administrator
pursuant to Section 13.
Indemnification under this Section shall survive the
resignation or removal of the Eligible Lender Trustee or the Indenture Trustee
or the termination of this Agreement and shall include reasonable fees and
expenses of counsel and expenses of litigation. If the Administrator shall have
made any indemnity payments pursuant to this Agreement and the Person to or on
behalf of whom such payments are made thereafter collects any of such amounts
from others, such Person shall promptly repay such amounts to the Administrator,
without interest.
25. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, ADMINISTRATOR. Any Person (a) into which the Administrator may
be merged or consolidated, (b) which may result from any merger or consolidation
to which the Administrator shall be a party or (c) which may succeed to the
properties and assets of the Administrator substantially as a whole, shall be
the successor to the Administrator without the execution or filing of any
23
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 Education Loan Corporation,
executes an agreement of assumption to perform every obligation of the
Administrator under this Agreement, (ii) immediately after giving effect to such
transaction, no representation or warranty made pursuant to Section 1 shall have
been breached and no Administrator Default, and no event that, after notice or
lapse of time or both would become an Administrator Default, shall have occurred
and be continuing, (iii) the Administrator shall have delivered to the Eligible
Lender Trustee and the Indenture Trustee an Officers' Certificate and an Opinion
of Counsel each stating that such consolidation, merger or succession and such
agreement of assumption comply with this Section and that all conditions
precedent, if any, provided for in this Agreement relating to such transaction
have been complied with, and that the Rating Agency Condition shall have been
satisfied with respect to such transaction, (iv) the surviving Administrator
shall have a consolidated net worth at least equal to that of the predecessor
Administrator, (v) such transaction will not result in a material adverse
federal or state tax consequence to the Issuer or the Securityholders, and (vi)
unless Xxxxxx Mae Education Loan Corporation is the surviving entity, the
Administrator shall have delivered to the Eligible Lender Trustee and the
Indenture Trustee an Opinion of Counsel either (A) stating that, in the opinion
of such counsel, all financing statements and continuation statements and
amendments thereto have been executed and filed that are necessary fully to
preserve and protect the interest of the Eligible Lender Trustee and the
Indenture Trustee, respectively, in the Trust Loans and reciting the details of
such filings, or (B) stating that, in the opinion of such counsel, no such
action shall be necessary to preserve and protect such interests.
26. LIMITATION ON LIABILITY OF ADMINISTRATOR AND OTHERS.
Neither the Administrator nor any of its directors, officers, employees or
agents shall be under any liability to the Issuer, the Securityholders, the
Indenture Trustee and the Eligible Lender Trustee, except as provided under this
Agreement, for any action taken or for refraining from the taking of any action
pursuant to this Agreement or for errors in judgment; PROVIDED, HOWEVER, that
this provision shall not protect the Administrator or any such person against
any liability that would otherwise be imposed by reason of willful misfeasance,
bad faith or negligence in the performance of its duties or by reason of
reckless disregard of obligations and its duties under this Agreement. The
Administrator and any of its directors, officers, employees or agents may rely
in good faith on the advice of counsel or on any document of any kind PRIMA
FACIE properly executed and submitted by any Person respecting any matters
arising hereunder.
Except as provided in this Agreement, the Administrator shall
not be under any obligation to appear in, prosecute or defend any legal action
that shall not be incidental to its duties to administer the Trust Loans and the
Trust in accordance with this Agreement, and that in its opinion may involve it
in any expense or liability; PROVIDED, HOWEVER, that the Administrator may
undertake any reasonable action that it may deem necessary or desirable in
respect of this Agreement and the other Basic Documents and the rights and
duties of the parties to this Agreement and the Related Agreements, the
interests of the Noteholders under the Indenture and the interests of the
Certificateholders under the Trust Agreement.
27. XXXXXX XXX EDUCATION LOAN CORPORATION NOT TO RESIGN AS
ADMINISTRATOR. Subject to the provisions of Section 25 of this Agreement, Xxxxxx
Mae Education Loan
24
Corporation 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 Education Loan
Corporation or its properties. Notice of any such determination permitting the
resignation of Xxxxxx Mae Education Loan Corporation shall be communicated to
the Eligible Lender Trustee and the Indenture Trustee at the earliest
practicable time (and, if such communication is not in writing, shall be
confirmed in writing at the earliest practicable time) and any such
determination shall be evidenced by an Opinion of Counsel to such effect
delivered to the Eligible Lender Trustee and the Indenture Trustee concurrently
with or promptly after such notice. No such resignation shall become effective
until the Indenture Trustee or a successor Administrator shall have assumed the
responsibilities and obligations of Xxxxxx Xxx Education Loan Corporation in
accordance with Section 13.
28. LIMITATION OF LIABILITY OF ELIGIBLE LENDER TRUSTEE AND
INDENTURE TRUSTEE. (a) Notwithstanding anything contained herein to the
contrary, this instrument has been countersigned by The First National Bank of
Chicago not in its individual capacity but solely in its capacity as Eligible
Lender Trustee of the Issuer and in no event shall The First National Bank of
Chicago in its individual capacity or any Owner of the Issuer have any liability
for the representations, warranties, covenants, agreements or other obligations
of the Issuer hereunder, as to all of which recourse shall be had solely to the
assets of the Issuer. For all purposes of this Agreement, in the performance of
any duties or obligations of the Issuer thereunder, the Eligible Lender Trustee
shall be subject to, and entitled to the benefits of, the terms and provisions
of Articles VI, VII and VIII of the Trust Agreement.
(b) Notwithstanding anything contained herein to the contrary,
this Agreement has been countersigned by State Street Bank and Trust Company not
in its individual capacity but solely as Indenture Trustee and in no event shall
State Street Bank and Trust Company have any liability for the representations,
warranties, covenants, agreements or other obligations of the Issuer hereunder
or in any of the certificates, notices or agreements delivered pursuant hereto,
as to all of which recourse shall be had solely to the assets of the Issuer.
29. NOTICE OF TERMINATION OF TRUST. As described in Article IX
of the Trust Agreement, notice of any termination of the Trust shall be given by
the Administrator to the Eligible Lender Trustee and the Indenture Trustee as
soon as practicable after the Administrator has received notice thereof.
30. THIRD-PARTY BENEFICIARY. The Eligible Lender Trustee is a
third-party beneficiary to this Agreement and is entitled to the rights and
benefits hereunder and may enforce the provisions hereof as if it were a party
hereto.
31. CONSENTS. With respect to any action to be taken hereunder
that requires the consent of a party hereto or of the Eligible Lender Trustee,
such consent shall not be unreasonably withheld, delayed or conditioned.
25
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 MAE STUDENT LOAN TRUST 1999-A
By: THE FIRST NATIONAL BANK OF
CHICAGO, not in its individual capacity
but solely as Eligible Lender Trustee
By:____________________________________
Name:
Title:
STATE STREET BANK AND TRUST
COMPANY, not in its individual
capacity but solely as Indenture Trustee
By:____________________________________________
Name:
Title:
XXXXXX XXX EDUCATION LOAN CORPORATION,
as Administrator
By:___________________________________________
Name:
Title:
26
EXHIBIT A TO THE
ADMINISTRATION AGREEMENT
POWER OF ATTORNEY
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
KNOW ALL MEN BY THESE PRESENTS, that THE FIRST NATIONAL BANK OF
CHICAGO, a national banking association, not in its individual capacity but
solely as eligible lender trustee ("ELIGIBLE LENDER TRUSTEE") for the Xxxxxx Mae
Student Loan Trust 1999-A (the "TRUST"), does hereby make, constitute and
appoint Xxxxxx Xxx Education Loan Corporation, as Administrator under the
Administration Agreement (as defined below), and its agents and attorneys, as
Agents and Attorneys-in-Fact to execute on behalf of Eligible Lender Trustee or
the Trust all such documents, reports, filings, instruments, certificates and
opinions as it should be the duty of Eligible Lender Trustee or the Trust to
prepare, file or deliver pursuant to the Related Documents (as defined in the
Administration Agreement) or pursuant to Section 5.04 of the Trust Agreement (as
defined in the Administration Agreement), including without limitation, to
appear for and represent Eligible Lender Trustee and the Trust in connection
with the preparation, filing and audit of any federal, state and local tax
returns pertaining to the Trust, and with full power to perform any and all acts
associated with such returns and audits that the Eligible Lender Trustee could
perform, including without limitation, the right to distribute and receive
confidential information, defend and assert positions in response to audits,
initiate and defend litigation, and to execute waivers of restriction on
assessments of deficiencies, consents to the extension of any statutory or
regulatory time limit, and settlements. For the purpose of this Power of
Attorney, the term "Administration Agreement" means the Administration Agreement
dated as of [________] 1, 1999, among the Trust, Xxxxxx Mae Education Loan
Corporation, as Administrator, and State Street Bank and Trust Company, as
Indenture Trustee, as such may be amended from time to time.
All powers of attorney for this purpose heretofore filed or executed by
Eligible Lender Trustee are hereby revoked.
A-1
EXECUTED as of the first day of [________], 1999.
THE FIRST NATIONAL BANK OF
CHICAGO, not in its individual capacity
but solely as Eligible Lender
Trustee
By:____________________________________
Name:
Title:
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
Before me, the undersigned authority, on this day personally appeared [
] known to me to be the person whose name is subscribed to the foregoing
instrument, and acknowledged to me that such person signed the same for the
purposes and considerations therein expressed.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this [ ] day of [________],
1999.
-------------------------
Notary Public in and for the
State of New York
-------------------------
Printed Name of Notary Public
Commission Expires________
A-2
EXHIBIT B
TO THE
ADMINISTRATION AGREEMENT
Form of Securityholders' Statement pursuant to Section 2(g) of Administration
Agreement.
Capitalized terms used herein are defined in Appendix A thereto. It should be
noted, however, that while all the information listed below shall be included in
each Securityholders' Statement, the presentation thereof may vary from that
given below.
Quarterly Payment Date:
(i) Amount of principal being paid or distributed:
Class A-1 __________* ($_______* per $1,000
original principal amount
of the Class A-1 Notes)
Class A-2 __________* ($_______* per $1,000
original principal amount
of the Class A-2 Notes)
Certificate __________* ($_______* per $1,000
original Certificate
Balance of the
Certificates)
---------
* Portion of each such amount attributable to Reserve Account Excess: _________.
(ii) Amount of interest being paid or distributed:
Class A-1 __________ ($_______ per $1,000
original principal amount
of the Class A-1 Notes)
Class A-2 __________ ($_______ per $1,000
original principal amount
of the Class A-2 Notes)
Certificates __________ ($_______ per $1,000
original Certificate
Balance of the
Certificates
B-1
(iii) Amount of Noteholders' Interest Basis Carryover being paid or
distributed (if any) and amount remaining (if any):
(a) Distributed:__________ ($_______ per $1,000 original principal
amount of Notes)
(b) Balance:______________ ($_______ per $1,000 original)
principal amount of Notes)
(iv) Amount of Certificateholders' Return Carryover being paid or
distributed (if any) and amount remaining (if any):
(a) Distributed:__________ ($_______ per $1,000 original
Certificate Balance of the Certificates)
(b) Balance:______________ ($_______ per $1,000 original
Certificate Balance of the Certificates)
(v) Pool Balance at end of related Collection Period: __________
(vi) After giving effect to distributions on this Quarterly Payment Date:
(a) (i) outstanding principal amount of Class A-1 Notes:__________
(ii) Class A-1 Note Pool Factor:__________
(b) (i) outstanding principal amount of Class A-2 Notes:__________
(ii) Class A-2 Note Pool Factor:__________
(c) (i) Certificate Balance of the Outstanding
Certificates:__________
(ii) Certificate Pool Factor:__________
B-2
(vii) Applicable Interest Rate:
In general:
(a) Three-Month LIBOR for the LIBOR Reset Period since
the previous Quarterly Payment Date was _____%; and
(b) the Adjusted Student Loan Rate for such Quarterly
Interest Period was _____%.
Class A-1 Note Rate:_____% (based on [Note LIBOR Rate] [Adjusted Student Loan Rate])
Class A-2 Note Rate:_____% (based on [Note LIBOR Rate] [Adjusted Student Loan Rate])
Certificate Rate: _____% (based on [Certificate LIBOR Rate] [Adjusted Student Loan
Rate])
(viii) Amount of Servicing Fee for related Collection Period : _________ ($___
per $1,000 original principal amount of Notes or Certificates, as
applicable):
(ix) Amount of Administration Fee for related Collection Period:__________
($_______ per $1,000 original principal amount of Notes or
Certificates, as applicable)
(x) Aggregate amount of Realized Losses (if any) for the related Collection
Period:__________
(xi) Trust Loans delinquent at end of related Collection Period: __________;
number of delinquent loans: ________; aggregate unpaid principal
balance of delinquent loans: ___________________
(xii) Withdrawal from Reserve Account on related Quarterly Payment Date
(other than Reserve Account Excess) and on any Monthly Payment Date
since the preceding Quarterly Payment Date (list each withdrawal
separately): _______________ [purpose of each withdrawal]
Reserve Account Excess on related Quarterly Payment Date: ________
Principal balance of Notes to be paid to reach Parity Date: ___________
(xiii) Amount in the Reserve Account:__________
(xiv) Serial Loans: _______ loans with aggregate principal balances of
_______ (portion represented by Purchase Premium Amounts ) were
purchased during the related Collection Period.
B-3
(xv) Trust Loans in the following categories as of the end of the related
Collection Period:
Principal
Balance
-------
STATUS TYPE:
------------
In-School
Grace
Repayment
Forbearance
Deferment
DELINQUENCIES:
--------------
30-60 Days
61-90 Days
91-120 Days
More than 120 Days Delinquent
Claims Filed Awaiting Payment
LOAN TYPE:
----------
Xxxxxxxx Loans
Unsubsidized Xxxxxxxx Loans
SLS Loans
PLUS Loans
Consolidation Loans
:
B-4
