Exhibit 99.3
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SLM STUDENT LOAN TRUST 2004-5
ADMINISTRATION AGREEMENT
Dated as of June 10, 2004
Among
SLM FUNDING LLC
SLM STUDENT LOAN TRUST 2004-5
CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION,
as Eligible Lender Trustee
XXXXXX XXX, INC.
and
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Indenture Trustee
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TABLE OF CONTENTS
ARTICLE I......................................................................2
Section 1.1 Definitions and Usage........................................2
ARTICLE II.....................................................................2
Section 2.1 Duties with Respect to the Indenture.........................2
Section 2.2 Duties with Respect to the Issuer............................5
Section 2.3 Establishment of Trust Accounts..............................6
Section 2.4 Collections; Collection Account.............................11
Section 2.5 Application of Collections..................................11
Section 2.6 Additional Deposits.........................................11
Section 2.7 Distributions...............................................12
Section 2.8 Priority of Distributions...................................14
Section 2.9 Reserve Account.............................................18
Section 2.10 Investment Earnings; Other Trust Accounts...................19
Section 2.11 Statements to Excess Distribution Certificateholders
and Noteholders..........................................24
Section 2.12 Non-Ministerial Matters.....................................25
Section 2.13 Exceptions..................................................26
Section 2.14 Compensation................................................26
Section 2.15 Servicer and Administrator Expenses.........................26
ARTICLE III...................................................................27
Section 3.1 Administrator's Certificate; Servicer's Report..............27
Section 3.2 Annual Statement as to Compliance; Notice of Default;
Financial Statements.....................................28
Section 3.3 Annual Independent Certified Public Accountants' Report.....29
ARTICLE IV....................................................................29
Section 4.1 Representations of Administrator............................29
Section 4.2 Liability of Administrator; Indemnities.....................30
Section 4.3 Merger or Consolidation of, or Assumption of the
Obligations of, Administrator............................32
Section 4.4 Limitation on Liability of Seller, Administrator and
Others...................................................33
Section 4.5 Administrator May Own Certificates or Notes.................33
Section 4.6 Xxxxxx Mae, Inc. Not to Resign as Administrator.............34
ARTICLE V.....................................................................34
Section 5.1 Administrator Default.......................................34
Section 5.2 Appointment of Successor....................................35
Section 5.3 Notification to Noteholders and Certificateholders..........36
Section 5.4 Waiver of Past Defaults.....................................36
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ARTICLE VI....................................................................36
Section 6.1 Termination.................................................36
ARTICLE VII...................................................................37
Section 7.1 Protection of Interests in Trust............................37
ARTICLE VIII..................................................................40
Section 8.1 Independence of the Administrator...........................40
Section 8.2 No Joint Venture............................................40
Section 8.3 Other Activities of Administrator...........................40
Section 8.4 Powers of Attorney..........................................40
Section 8.5 Amendment...................................................40
Section 8.6 Assignment..................................................42
Section 8.7 Limitations on Rights of Others.............................42
Section 8.8 Assignment to Indenture Trustee.............................42
Section 8.9 Nonpetition Covenants.......................................42
Section 8.10 Limitation of Liability of Eligible Lender Trustee and
Indenture Trustee........................................43
Section 8.11 Governing Law...............................................43
Section 8.12 Headings....................................................44
Section 8.13 Counterparts................................................44
Section 8.14 Severability................................................44
Section 8.15 Additional Reset Rate Note Agreements.......................44
Section 8.16 Excess Distribution Certificate.............................45
Section 8.17 Additional Sale Agreement...................................45
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ADMINISTRATION AGREEMENT
SLM Student Loan Trust 2004-5 Administration Agreement, dated as of June
10, 2004 (this "Agreement"), among SLM Funding LLC (the "Depositor"), SLM
Student Loan Trust 0000-0 (xxx "Xxxxxx"), Xxxxx Xxxxxxxxx Bank USA, National
Association, not in its individual capacity but solely in its capacity as
eligible lender trustee (in such capacity, the "Eligible Lender Trustee"),
Deutsche Bank Trust Company Americas, not in its individual capacity but solely
in its capacity as indenture trustee (in such capacity, the "Indenture
Trustee"), Xxxxxx Xxx, Inc., not in its individual capacity but solely in its
capacity as servicer (in such capacity, the "Servicer") and Xxxxxx Mae, Inc.,
not in its individual capacity but solely in its capacity as administrator (in
such capacity, the "Administrator").
RECITALS
WHEREAS, pursuant to an Indenture, dated as of June 1, 2004 (the
"Indenture"), among the Issuer, the Indenture Trustee and the Eligible Lender
Trustee, the Issuer (a) is issuing (i) seven classes of its Student Loan-Backed
Notes (collectively, the "Notes"), and (ii) an Excess Distribution Certificate
(the "Excess Distribution Certificate") pursuant to the Short-Form Trust
Agreement, dated as of May 24, 2004 between the Depositor and the Eligible
Lender Trustee, pursuant to which the Issuer was established, as amended and
restated by the Amended and Restated Trust Agreement, dated as of June 10, 2004
(the "Trust Agreement"), among the Depositor, the Eligible Lender Trustee and
the Indenture Trustee, and (b) will not issue any other classes of certificates
(the "Certificates");
WHEREAS, the Issuer has entered into certain agreements in connection with
the issuance of the Notes and the Excess Distribution Certificate, including,
inter alia, the Trust Agreement, the Servicing Agreement, the Sale Agreement,
and the Indenture;
WHEREAS, pursuant to certain Basic Documents, the Issuer and the Eligible
Lender Trustee are required to perform certain duties in connection with (a) the
Notes and the Collateral therefore pledged pursuant to the Indenture and (b) the
Excess Distribution Certificate pursuant to the Trust Agreement;
WHEREAS, the Issuer and the Eligible Lender Trustee desire to have the
Administrator and the Servicer 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 this Agreement and the other Basic
Documents as the Issuer and the Eligible Lender 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 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 Depositor, the Issuer, the Eligible Lender Trustee, the
Indenture Trustee, the Servicer and the Administrator, hereby agree as follows:
ARTICLE I
Section 1.1 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-1 to the Indenture, which also contains
rules as to usage that shall be applicable herein.
ARTICLE II
Section 2.1 Duties with Respect to the Indenture. The Administrator agrees
to consult with the Eligible Lender 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 Eligible Lender
Trustee when action is necessary to comply with the Issuer's duties under the
Indenture and any Depository Agreement. The Administrator shall prepare for
execution by the Issuer or shall cause the preparation by other appropriate
Persons of all such documents, reports, filings, instruments, certificates and
opinions as it shall be the duty of the Issuer to prepare, file or deliver
pursuant to the Indenture and each Depository Agreement. 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:
(a) preparing or obtaining the documents and instruments required for
authentication of the Notes and delivering the same to the Indenture Trustee
(Section 2.2 of the Indenture);
(b) preparing, obtaining or filing the instruments, opinions and
certificates and other documents required for the release of Collateral (Section
2.9 of the Indenture);
(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 3.4 of the Indenture);
(d) preparing all supplements, amendments, financing statements,
continuation statements, instruments of further assurance and other instruments,
in accordance with Section 3.5 of the Indenture, necessary to protect the
Indenture Trust Estate (Section 3.5 of the Indenture);
(e) delivering the Opinion of Counsel on the Closing Date and the annual
delivery of Opinions of Counsel, in accordance with Section 3.6 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 3.9 of the Indenture, as to compliance, with the Indenture
(Sections 3.6 and 3.9 of the Indenture);
(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 3.7(d) of the Indenture);
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(g) preparing and obtaining the documents and instruments required for the
release of the Issuer from its obligations under the Indenture (Section 3.10 of
the Indenture);
(h) monitoring the Issuer's obligations as to the satisfaction and
discharge of the Indenture and preparing an Officers' Certificate of the Issuer
and obtaining the Opinion of Counsel and the Independent Certificate relating
thereto (Section 4.1 of the Indenture);
(i) selling of the Indenture Trust Estate in a commercially reasonable
manner if an Event of Default resulting in a non-rescindable, non-waivable
acceleration of the Notes has occurred and is continuing (Section 5.4 of the
Indenture);
(j) preparing and, after execution by the Issuer, filing with the
Commission, any applicable State agencies and the Indenture Trustee 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 7.3 of the Indenture);
(k) opening of one or more accounts in the Issuer's name, preparing Issuer
Orders and Officers' Certificates of the Issuer, obtaining the Opinions of
Counsel and all other actions necessary with respect to investment and
reinvestment of funds in the Trust Accounts (Sections 8.2 and 8.3 of the
Indenture);
(l) preparing an Issuer Request and Officers' Certificate of the Issuer and
obtaining an Opinion of Counsel and Independent Certificates, if necessary, for
the release of the Indenture Trust Estate (Sections 8.4 and 8.5 of the
Indenture);
(m) preparing Issuer Orders and obtaining Opinions of Counsel with respect
to the execution of supplemental indentures (Sections 9.1, 9.2 and 9.3 of the
Indenture);
(n) preparing 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 9.6 of the Indenture);
(o) preparing all Officers' Certificates of the Issuer and Independent
Certificates and obtaining Opinions of Counsel with respect to any requests by
the Issuer to the Indenture Trustee to take any action under the Indenture
(Section 11.1(a) of the Indenture);
(p) preparing and delivering of Officers' Certificates of the Issuer and
obtaining any Independent Certificates, if necessary, for the release of
property from the lien of the Indenture (Section 11.1(b) of the Indenture);
(q) preparing and delivering to Noteholders and the Indenture Trustee any
agreements with respect to alternate payment and notice provisions (Section 11.6
of the Indenture);
(r) recording the Indenture, if applicable (Section 11.15 of the
Indenture);
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(s) undertaking all obligations required to be performed by the
Administrator, and acting on behalf of the Trust in fulfilling all duties of the
Trust, as set forth in the Reset Rate Note Procedures (Appendix A-2 to the
Indenture) on and prior to each Reset Date;
(t) engaging or terminating any Remarketing Agents, entering into the
Remarketing Agreement on the Closing Date and all subsequent Remarketing
Agreements or Remarketing Agency Agreements each on behalf of the Trust, as set
forth in the Reset Rate Note Procedures;
(u) (i) on the Closing Date, with respect to each class of Reset Rate Notes
during its respective initial Reset Period, directing the Eligible Lender
Trustee to enter into the Initial Currency Swap Agreements (not in its
individual capacity, but solely on behalf of the Trust) with the Initial
Currency Swap Counterparties and (ii) on any subsequent date, any supplement,
amendment or replacement thereof;
(v) from time to time on or after the Initial Reset Date with respect to
each class of Reset Rate Notes, directing the Eligible Lender Trustee to enter
into one or more Swap Agreements (not in its individual capacity, but solely on
behalf of the Trust) with an Eligible Swap Counterparty or Counterparties on the
terms and conditions set forth in the Reset Rate Note Procedures, on any Reset
Date, when (i) any class of Reset Rate Notes is to be in Foreign Exchange Mode
during the immediately following Reset Period, (ii) any class of Reset Rate
Notes is to bear interest at a fixed rate during the immediately following Reset
Period or (iii) any class of Reset Rate Notes is to bear interest at a floating
rate during the immediately following Reset Period and the Remarketing Agents
(in consultation with the Administrator) determine that it is in the best
interest of the Trust based on then-current market conditions, or if otherwise
required to satisfy the Rating Agency Condition, to enter into one or more Swap
Agreements, and any supplement, amendment or replacement thereof;
(w) undertaking all obligations required to be performed by the
Administrator, including, without limitation, preparing and delivering all
notices, communications, information and calculations, under any Swap Agreement;
(x) on the Closing Date, directing the Eligible Lender Trustee to enter
into the Interest Rate Cap Agreement (not in its individual capacity, but solely
on behalf of the Trust) with the Interest Rate Cap Swap Counterparty;
(y) calculating, on each Interest Rate Determination Date for each class of
Reset Rate Notes then bearing a floating rate of interest, the applicable rate
of interest using the applicable Index that will be in effect until the next
related Interest Rate Change Date;
(z) calculating on each Distribution Date, as applicable: the Principal
Distribution Amount, the Quarterly Required Amount, the Quarterly Funding
Amount, the Reset Period Target Amount, any amounts to be deposited on such
Distribution Date into an Accumulation Account (if applicable), any applicable
Supplemental Interest Account Deposit Amount, any applicable Investment Reserve
Account Required Amount, any applicable Specified Reserve Account Balance, any
applicable Investment Premium Purchase Account Deposit Amount and any applicable
Investment Premium Purchase Required Amount;
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(aa) calculating on or before each Distribution Date, as applicable, any
amounts to be deposited in, or withdrawn from, each Trust Account;
(bb) during the Funding Period, preparing and delivering, on behalf of the
Trust, all required documentation to evidence the purchase by the Trust of any
Additional Trust Student Loans;
(cc) from time to time during the Funding Period, instructing the Indenture
Trustee to withdraw funds from the Pre-Funding Account to be used for the
purchase of the related Additional Trust Student Loans; and
(dd) from time to time, directing the Eligible Lender Trustee, not in its
individual capacity, but solely on behalf of the Trust, to enter into one or
more agreements representing Eligible Repurchase Obligations, with an Eligible
Repo Counterparty.
Section 2.2 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,
including calculating on each Interest Rate Determination Date for each class of
Reset Rate Notes then bearing a floating rate of interest, the applicable rate
of interest using the applicable Index that will be in effect until the next
related Interest Rate Change Date, 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 Basic Documents, 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 Basic Documents.
Subject to Section 8.1 below, and in accordance with the directions of the
Eligible Lender Trustee, the Administrator shall administer, perform or
supervise the performance of such other activities in connection with the
Collateral (including the Basic Documents) 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.
(b) The Administrator shall be responsible for performance of the duties of
the Eligible Lender Trustee set forth in Section 5.4 of the Trust Agreement and
the Administrator shall be entitled to hire an Independent accounting firm to
perform the duties described therein, the reasonable fees and expenses of which
shall be paid by the Depositor or the holder of the Excess Distribution
Certificate, if not then held by the Depositor.
(c) The Administrator shall perform the duties of the Administrator
specified in Section 10.2 of the Trust Agreement required to be performed in
connection with the resignation or removal of the Eligible Lender Trustee, and
any other duties expressly required to be performed by the Administrator under
the Trust Agreement and the other Basic Documents.
(d) The Administrator shall be responsible for preparing and delivering, on
behalf of the Issuer, (i) all notices required by any Clearing Agency or stock
exchange upon which the Notes are then listed and (ii) any information required
to effectuate the listing of the Notes on a
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stock exchange of international standing and, if applicable, the transfer of the
listing of the Notes to an alternative stock exchange of international standing.
(e) The Administrator shall be responsible for serving as Calculation Agent
or as successor calculation agent, if required, and shall be responsible for
preparing and delivering any notices required to be delivered by the Issuer
under any Swap Agreement, as applicable, including without limitation, any
notice obligations specified in each Swap Agreement in the event of a default,
termination event or failure to pay in full any amount due (as defined in the
related Swap Agreement) by the related Swap Counterparty or the Issuer.
(f) The Administrator shall be responsible for promptly preparing and
delivering a notice to each Rating Agency detailing all actions taken with
respect to any Collateral Arrangement (as defined in each Swap Agreement, as
applicable) required to be provided under the provisions of any Swap Agreement,
and enclosing therewith a copy of each related Collateral Arrangement.
(g) 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 2.3 Establishment of Trust Accounts.
(a) On the Closing Date and at such other times as specified herein, the
Administrator shall establish the following Eligible Deposit Accounts as more
fully described below:
(i) a "Collection Account";
(ii) a "Reserve Account";
(iii) a "Capitalized Interest Account";
(iv) a "Remarketing Fee Account";
(v) one or more "Accumulation Accounts";
(vi) one or more "Supplemental Interest Accounts";
(vii) an "Other Currency Account";
(viii) one or more "Investment Premium Purchase Accounts";
(ix) one or more "Investment Reserve Accounts";
(x) a "Euro Account"; and
(xi) a "Pre-Funding Account".
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(b) Funds on deposit in each account specified in Section 2.3(a) above
(collectively, the "Trust Accounts") (other than any Euro Account or Other
Currency Account) 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 (including Eligible Investments of the Indenture Trustee)
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 (x) each Distribution Date, all interest and other
Investment Earnings (net of losses and investment expenses) on funds on deposit
in each Trust Account (other than in any Accumulation Account) shall be
deposited into the Collection Account and deemed to constitute a portion of the
Available Funds for such Distribution Date and (y) each related Distribution
Date, all interest and other investment income (net of losses and investment
expenses) on funds on deposit in any Accumulation Account shall be deposited
into the Collection Account and deemed to constitute a portion of the Available
Funds for such Reset Date. Other than as described in the following proviso or
as otherwise permitted by the Rating Agencies, funds on deposit in the Trust
Accounts (other than any Euro Account or Other Currency Account) shall only 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 the following Distribution Date; provided
that funds on deposit in any Accumulation Account may be invested in Eligible
Investments that are scheduled to mature (or with respect to Eligible
Investments under clause (g) of the definition of "Eligible Investments" are
expected to mature) on or before the Business Day prior to the next Reset Date
for the related class of Reset Rate Notes; provided, further, that funds on
deposit in the Pre-Funding Account may be invested in Eligible Investments that
are scheduled to mature (or with respect to Eligible Investments under clause
(g) of the definition of "Eligible Investments" are expected to mature) on or
before the Distribution Date in October 2004. Funds on deposit in any Euro
Account or Other Currency Account shall not be invested in Eligible Investments.
Funds deposited in a Trust Account on a Business Day which immediately precedes
a Monthly Servicing Payment Date, Distribution Date or, with respect to funds on
deposit in any Accumulation Account, the related Reset Date, upon the maturity
of any Eligible Investments, are not required to be invested overnight;
provided, further, that only funds on deposit in any Accumulation Account may be
invested in the Eligible Investments specified in clause (h) of the definition
of "Eligible Investments".
(c) The Depositor and the Issuer 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 Section 2.3(b) above and Section 2.3(e) below, the Trust
Accounts shall be under the sole dominion and control of the Indenture Trustee
for the benefit of the related Noteholders, the Issuer and with respect to the
Remarketing Fee Account, the Remarketing Agents. If, at any time, any Trust
Account 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
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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.
(d) With respect to the Trust Account Property, the Indenture Trustee
agrees, by its acceptance hereof, that:
(i) 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 2.3(c) and, subject to Section 2.3(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;
(ii) 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;
(iii) 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
(iv) any Trust Account Property that is an "uncertificated security"
under Article 8 of the UCC and that is not governed by clause (iii) 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.
Notwithstanding anything to the contrary set forth in this Section 2.3(d), the
Indenture Trustee shall have no liability or obligation in respect of any failed
Delivery, as contemplated herein, other than with respect to a Delivery which
fails as a result of any action or inaction on behalf of the Indenture Trustee.
(e) The Administrator shall have the power, revocable, for cause or upon
the occurrence and during the continuance of an Administrator Default, by the
Indenture Trustee or by the Eligible Lender Trustee with the consent of the
Indenture Trustee, to instruct the Indenture Trustee to make withdrawals and
payments from the Trust Accounts for the purpose of permitting the Servicer, the
Administrator or the Eligible Lender Trustee to carry out its respective duties
hereunder or permitting the Indenture Trustee to carry out its duties under the
Indenture.
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(f) On the Closing Date, the Administrator, for the benefit of the
Noteholders and the Trust, 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 Trust. 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 Deutsche Bank Trust Company Americas. On
the Closing Date, the Administrator shall cause the Trust to deposit the
Collection Account Initial Deposit into the Collection Account.
(g) On the Closing Date, the Administrator, for the benefit of the
Noteholders and the Trust, 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 Trust. 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 Deutsche Bank Trust Company Americas. On the Closing Date,
the Administrator shall cause the Trust to deposit the Reserve Account Initial
Deposit into the Reserve Account.
(h) On the Closing Date, the Administrator, for the benefit of the
Noteholders and the Trust, shall establish and maintain in the name of the
Indenture Trustee an Eligible Deposit Account (the "Capitalized Interest
Account"), bearing a designation clearly indicating that the funds deposited
therein are held for the benefit of the Trust. The Capitalized Interest Account
will initially be established as a segregated trust account in the name of the
Indenture Trustee with the corporate trust department of Deutsche Bank Trust
Company Americas. On the Closing Date, the Administrator shall cause the Trust
to deposit the Capitalized Interest Account Initial Deposit into the Capitalized
Interest Account.
(i) On the Closing Date, the Administrator, for the benefit of the Trust,
the Remarketing Agents and the Reset Rate Noteholders, shall establish and
maintain in the name of the Indenture Trustee an Eligible Deposit Account (the
"Remarketing Fee Account"), bearing a designation clearly indicating that the
funds deposited therein are held for the benefit of the Trust, the Remarketing
Agents and the Reset Rate Noteholders. The Remarketing Fee Account will
initially be established as a segregated trust account in the name of the
Indenture Trustee with the corporate trust department of Deutsche Bank Trust
Company Americas.
(j) With respect to the Reset Rate Notes, if required on the Closing Date
or on any Reset Date on which any class of Reset Rate Notes is reset to be
structured not to receive a payment of principal until the end of the related
Reset Period (including, in the case of the Class A-5 Notes, during their
initial Reset Period), the Administrator, for the benefit of the related Reset
Rate Noteholders and the Trust, shall establish and maintain in the name of the
Indenture Trustee, an Eligible Deposit Account (an "Accumulation Account") for
the benefit of such class of Reset Rate Notes, bearing a designation clearly
indicating that the funds deposited therein are held for the benefit of the
Trust and the related Reset Rate Noteholders. Each Accumulation Account will
initially be established as a segregated trust account in the name of the
Indenture Trustee with the corporate trust department of Deutsche Bank Trust
Company Americas.
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(k) With respect to the Reset Rate Notes whenever an Accumulation Account
is established pursuant to Section 2.3(j) above, the Administrator, for the
benefit of the related Reset Rate Noteholders and the Trust, shall establish and
maintain in the name of the Indenture Trustee a corresponding Eligible Deposit
Account (a "Supplemental Interest Account") relating to such Accumulation
Account, bearing a designation clearly indicating that the funds deposited
therein are held for the benefit of the Trust. Each Supplemental Interest
Account will initially be established as a segregated trust account in the name
of the Indenture Trustee with the corporate trust department of Deutsche Bank
Trust Company Americas.
(l) If required on a Reset Date, the Administrator, for the benefit of the
related Reset Rate Noteholders and the Trust, shall establish and maintain in
the name of the Indenture Trustee an Eligible Deposit Account (an "Investment
Premium Purchase Account"), bearing a designation clearly indicating that the
funds deposited therein are held for the benefit of the Trust. Each Investment
Premium Purchase Account will initially be established as a segregated trust
account in the name of the Indenture Trustee with the corporate trust department
of Deutsche Bank Trust Company Americas.
(m) If required on a Reset Date, the Administrator, for the benefit of the
related Reset Rate Noteholders and the Trust, shall establish and maintain in
the name of the Indenture Trustee an Eligible Deposit Account (an "Investment
Reserve Account"), bearing a designation clearly indicating that the funds
deposited therein are held for the benefit of the Trust. Each Investment Reserve
Account will initially be established as a segregated trust account in the name
of the Indenture Trustee with the corporate trust department of Deutsche Bank
Trust Company Americas.
(n) On any Reset Date on which any class of Reset Rate Notes is reset into
a currency other than U.S. Dollars or Euros, the Administrator, for the benefit
of the related Reset Rate Noteholders and the Trust, shall establish and
maintain in the name of the Indenture Trustee, an Eligible Deposit Account (the
"Other Currency Account") for the related Reset Rate Notes, bearing a
designation clearly indicating that the funds deposited therein are held for the
benefit of the Trust and the related Reset Rate Noteholders. Each Other Currency
Account will initially be established as a segregated trust account in the name
of the Indenture Trustee with the corporate trust department of the applicable
paying agent.
(o) On the Closing Date and during any Reset Period when a class of Reset
Rate Notes is denominated in Euros (including each initial Reset Period), the
Administrator, for the benefit of the Trust and the related Reset Rate
Noteholders, shall establish and/or maintain in the name of the Indenture
Trustee, an Eligible Deposit Account (the "Euro Account") for the related Reset
Rate Noteholders, bearing a designation clearly indicating that the funds
deposited therein are held for the benefit of the Trust and the related Reset
Rate Noteholders. The Euro Account will initially be established as a segregated
trust account in the name of the Indenture Trustee with the corporate trust
department of the London Paying Agent.
(p) On the Closing Date, the Administrator, for the benefit of the
Noteholders and the Trust, shall establish and maintain in the name of the
Indenture Trustee an Eligible Deposit Account (the "Pre-Funding Account"),
bearing a designation clearly indicating that the funds deposited therein are
held for the benefit of the Trust. The Pre-Funding Account will initially be
10
established as a segregated trust account in the name of the Indenture Trustee
with the corporate trust department of Deutsche Bank Trust Company Americas. On
the Closing Date, the Administrator shall cause the Trust to deposit the
Pre-Funding Account Initial Deposit into the Pre-Funding Account.
Section 2.4 Collections; Collection Account.
(a) 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, and the
Eligible Lender Trustee shall remit within two Business Days of receipt thereof
to the Collection Account any Interest Subsidy Payments and Special Allowance
Payments received by it with respect to the Trust Student Loans during the
Collection Period. Notwithstanding the foregoing, for so long as no
Administrator Default shall have occurred and be continuing, the Servicer and
the Eligible Lender 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 together
with 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 to but excluding the day on which the Administrator
remits such amounts to the Collection Account at a rate equal to no less than
the Federal Funds Rate less 0.20%. In the event that the foregoing condition 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 of receipt thereof.
(b) Notwithstanding the foregoing, if required by any related Swap
Agreement and with respect to all Swap Payments due and payable by the Trust to
each Swap Counterparty, the Administrator will deposit such amounts, but only to
the extent funds are allocated for such purpose pursuant to Section 2.8, not
later than the fourth Business Day prior to each related Distribution Date.
Section 2.5 Application of Collections.
(a) With respect to each Trust Student Loan, all collections (including all
Guarantee Payments) with respect thereto for each Collection Period shall be
applied to fees, 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 2.6 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 3.5 of the Servicing Agreement and all other
amounts to be paid by the Servicer under Section 3.5 of the Servicing Agreement
on or before the third Business Day before the related Distribution Date, and
the Depositor shall deposit or cause to be deposited in the Collection
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Account the aggregate Purchase Amount with respect to Purchased Student Loans
and all other amounts to be paid by the Depositor under Section 6 of the Sale
Agreement and/or any applicable Additional Sale Agreement when such amounts are
due.
(b) Notwithstanding anything to the contrary set forth in Section 2.6(a)
above, if daily deposits to the Collection Account are not required pursuant to
Section 2.4 above, the Depositor and the Servicer shall pay the amounts referred
to in Section 2.6(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
Monthly Servicing Payment Date, subject to the provisions of Section 2.4(b);
provided 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 to but excluding the day on which the
Administrator remits such amounts to the Collection Account, at a rate equal to
no less than the Federal Funds Rate less 0.20%.
(c) With respect to the Swap Agreements, and if the Trust subsequently
becomes a party to any additional Swap Agreements, the Administrator shall cause
all Swap Receipts and all other amounts payable to the Trust from each Swap
Counterparty to be deposited into the Collection Account (with respect to all
Swap Receipts received in U.S. Dollars), the Euro Account (with respect to all
Swap Receipts received in Euros) or the applicable Other Currency Account (with
respect to all Swap Receipts received in any currency other than U.S. Dollars or
Euros).
Section 2.7 Distributions.
(a) On or before the fifth Business Day immediately preceding each
Distribution Date, the Administrator shall calculate all amounts required to be
deposited into the Collection Account from the Trust Accounts, as applicable,
including the amount of all Investment Earnings to be transferred from the Trust
Accounts to the Collection Account, and the amount to be distributed from the
Collection Account as Available Funds and pursuant to paragraph (a)(2) of the
definition of Available Funds on the related Distribution Date. On the fifth
Business Day preceding each Monthly Servicing Payment Date that is not a
Distribution Date, as applicable, the Administrator shall calculate all amounts
required to be deposited into the Collection Account from the Reserve Account
and the amounts to be distributed therefrom on the related Monthly Servicing
Payment Date. In addition to and in furtherance of the foregoing, the
Administrator shall:
(i) calculate all amounts required to be deposited into the Collection
Account from the Reserve Account and the Capitalized Interest Account on or
before the fifth Business Day preceding each Distribution Date;
(ii) calculate all amounts required to be deposited into the
Collection Account from the Remarketing Fee Account, any Supplemental
Interest Account, any Investment Premium Purchase Account and any
Investment Reserve Account on or before the fifth Business Day immediately
preceding each Distribution Date;
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(iii) calculate, in each case, if and to the extent applicable, the
Class A Noteholders' Distribution Amount, the Class B Noteholders'
Distribution Amount, the Quarterly Required Amount, the Quarterly Funding
Amount, the Reset Period Target Amount, any Supplemental Interest Account
Deposit Amount, the Specified Reserve Account Balance, any Investment
Premium Purchase Account Deposit Amount, any Investment Premium Purchase
Account Release Amount, any Investment Reserve Account Required Amount and
any amounts to be deposited on such Distribution Date into the related
Accumulation Account from the Collection Account on the related
Distribution Date on or before the fifth Business Day immediately preceding
such Distribution Date;
(iv) if a Distribution Date is also a Reset Date, calculate any
amounts to be withdrawn from the Remarketing Fee Account and paid to the
applicable Remarketing Agents on or before the fifth Business Day
immediately preceding such Distribution Date;
(v) if such Distribution Date is also a Reset Date and if any class of
Reset Rate Notes was structured not to receive a payment of principal
during the previous Reset Period until the end of the related Reset Period,
on or before the fifth Business Day immediately preceding such Distribution
Date, the Administrator shall calculate all amounts to be withdrawn from
the related Accumulation Account (1) to be paid to the related class of
Reset Rate Noteholders on such Distribution Date if such class of Reset
Rate Notes is then denominated in U.S. Dollars, or (2) if such class of
Reset Rate Notes is then in Foreign Exchange Mode, to be delivered to the
related Currency Swap Counterparty or Counterparties in exchange for the
equivalent amount of the applicable non-U.S. Dollar currency for payment to
the related class of Reset Rate Noteholders on such Distribution Date; and
(vi) with respect to the October 2004 Distribution Date, calculate any
amount required to be deposited into the Collection Account from the
Pre-Funding Account on or before the fifth Business Day immediately
preceding such Distribution 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 Officer's Certificate and the related Servicer's Report
delivered pursuant to Section 3.1(a) and (b) below) 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) Subject to the provisions of Section 2.4(b), the Administrator shall
instruct the Indenture Trustee in writing no later than one (1) 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 3.1(a) and 3.1(c) below) to make the deposits and distributions set
forth in Section 2.8, including allocations of principal to the related
Accumulation Account for each class of Reset Rate Notes then structured not to
receive a
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payment of principal until the end of the related Reset Period together with
such other amounts then payable pursuant to Section 2.8, to the Persons or to
the account specified below by 1:00 p.m. (New York time) on such Distribution
Date (provided, that funds are not required to be distributed pursuant to
Section 5.4(b) of the Indenture). These deposits and distributions will be made
to the extent of the amount of Available Funds for that Distribution Date in the
Collection Account including amounts transferred from the Reserve Account
pursuant to Section 2.9, and through the Distribution Date in October 2005,
amounts transferred from the Capitalized Interest Account pursuant to Section
2.10(a) with respect to clauses 2.8(d)(1), (d)(2) and (e) below, and, as
applicable, amounts on deposit in, or transferred from, the Remarketing Fee
Account, any Supplemental Interest Account, any Accumulation Account, any
Investment Premium Purchase Account, any Investment Reserve Account and, with
respect to the October 2004 Distribution Date, the Pre-Funding Account. The
amount of Available Funds in the Collection Account for each Distribution Date
will be distributed or allocated pursuant to the priority of distributions set
forth under Section 2.8. The Indenture Trustee shall comply with such
instructions received by the Administrator.
Notwithstanding the foregoing, if required by any related Swap Agreement,
the Administrator shall calculate all amounts due and owing to any Swap
Counterparty or to the Trust under a Swap Agreement at least one (1) Business
Day prior to the date such payment is due under the terms of the related Swap
Agreement and direct the Indenture Trustee to make all Swap Payments to each
applicable Swap Counterparty, in the amount allocated for such purpose (based on
the information contained in the Administrator's Certificate delivered pursuant
to Section 3.1(c) below), on or before the date or dates specified for those
payments in the applicable Swap Agreement.
The Administrator shall instruct the Indenture Trustee in writing no later
than [one Business Day] preceding each Distribution Date to make the payments
pursuant to paragraph (a)(2) of the definition of Available Funds.
Section 2.8 Priority of Distributions. On each Distribution Date, the
Indenture Trustee shall first reimburse itself for all amounts due under Section
6.7 of the Indenture and then shall make the following deposits and
distributions in the amounts and in the order of priority set forth below:
(a) to the Servicer, the Primary Servicing Fee due on that Distribution
Date;
(b) to the Administrator, the Administration Fee due on that Distribution
Date and all prior unpaid Administration Fees;
(c) to the Remarketing Fee Account, the Quarterly Funding Amount for that
Distribution Date;
(d) pro rata, based on amounts due and owing:
(1) to the Class A Noteholders (other than any class of Reset
Rate Noteholders if a Swap Agreement with respect to interest payments
to be made to such Reset Rate Noteholders is then in effect), the
Class A Noteholders' Interest
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Distribution Amount, pro rata, based on the amounts payable as Class A
Noteholders' Interest Distribution Amount;
(2) if any Swap Agreement is then in effect for any class of
Reset Rate Notes with respect to interest payments to be made to such
Reset Rate Noteholders, to each applicable Swap Counterparty, the
amount of the related Swap Interest Payment (together with any unpaid
Swap Interest Payments from any prior Distribution Date, with interest
due thereon) due to each applicable Swap Counterparty under the
related Swap Agreement; and
(3) to each Swap Counterparty (other than the Interest Rate Cap
Swap Counterparty), the amount of any Swap Termination Payment due to
such Swap Counterparty under the related Swap Agreement due solely to
a Termination Event or Event of Default (as defined in the related
Swap Agreement, as applicable) resulting from a payment default under
the related Swap Agreement by the Trust or the bankruptcy of the
Trust;
(e) to the Class B Noteholders, the Class B Noteholders' Interest
Distribution Amount, pro rata, based on the amounts payable as Class B
Noteholders' Interest Distribution Amount;
(f) first, sequentially, to the Class A-1 Noteholders, the Class A-2
Noteholders, the Class A-3 Noteholders and the Class A-4 Noteholders, in that
order, until the Outstanding Principal Balance of each such class is paid in
full, the Class A Noteholders' Principal Distribution Amount; and second, any
remaining Class A Noteholders' Principal Distribution Amount, sequentially, to
the Class A-5 and Class A-6 Noteholders, in that order, until the Outstanding
Principal Balance of each such Class is paid in full; provided, however, (i)
with respect to the Reset Rate Notes, if any class of Reset Rate Notes is then
denominated in U.S. Dollars and is then structured not to receive a payment of
principal until the end of the related Reset Period, such payments will be
allocated to the related Accumulation Account, until amounts (less any
Investment Earnings) on deposit therein are sufficient to reduce the Outstanding
Amount of that class of Reset Rate Notes to zero, and (ii) with respect to any
class of Reset Rate Notes, if in Foreign Exchange Mode, such payments either (x)
will be made to the related Swap Counterparty or Counterparties or (y) if such
class of Reset Rate Notes is then structured not to receive a payment of
principal until the end of the related Reset Period, such payments will be
allocated to the related Accumulation Account, until the U.S. Dollar Equivalent
Principal Amount of such class of Reset Rate Notes has been distributed to the
related Swap Counterparty or Counterparties or allocated to the related
Accumulation Account; provided that for purposes of this priority second, the
Outstanding Amount of any class of Reset Rate Notes will be deemed to have been
reduced by any amounts (less any Investment Earnings) on deposit in any related
Accumulation Account; and provided, further, that on any Reset Date on which
both classes of Reset Rate Notes are successfully remarketed, this priority
second may be changed from a sequential to a pro rata allocation (or vice
versa), and such allocation may not be changed again until the next Reset Date
on which both classes of Reset Rate Notes are successfully remarketed;
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(g) to any Supplemental Interest Account, the applicable Supplemental
Interest Account Deposit Amount, if any, for such Distribution Date;
(h) to any Investment Reserve Account, the amount, if any, required to fund
such account to the applicable Investment Reserve Account Required Amount;
(i) on each Distribution Date on and after the Stepdown Date, and provided
no Trigger Event is in effect on such Distribution Date, the Class B
Noteholders, until paid in full, the Class B Noteholders' Principal Distribution
Amount;
(j) to the Reserve Account, the amount, if any, necessary to reinstate the
balance of the Reserve Account to the Specified Reserve Account Balance;
(k) to any Investment Premium Purchase Account, the applicable Investment
Premium Purchase Account Deposit Amount, if any, together with any carryover
shortfalls not deposited on previous Distribution Dates;
(l) to the Servicer, the aggregate unpaid amount of the Carryover Servicing
Fee, if any;
(m) if applicable, to any Swap Counterparty or Counterparties, pro rata,
the amount of any Swap Termination Payments due to the Swap Counterparty or
Counterparties, as the case may be, not payable in clause (d)(3) above;
(n) if applicable, to the Remarketing Agents, any Remarketing Fees due and
owing by the Trust to the extent not paid from amounts on deposit in the
Remarketing Fee Account;
(o) if applicable, sequentially, first to the Remarketing Agents for
certain expenses incurred in connection with the remarketing of any class of
Reset Rate Notes on such Distribution Date, and second to the Administrator for
advances made on behalf of the Trust for the payment of remarketing expenses on
that or prior Distribution Dates; and
(p) to the Excess Distribution Certificateholder, any remaining amounts
after application of the preceding clauses.
Amounts that would be paid to each Swap Counterparty pursuant to clauses
(d)(2), (f) or (m) above, (1) with respect to payments of interest on any class
of Reset Rate Notes if then bearing a fixed rate of interest or with respect to
payments of principal on any class of Reset Rate Notes then in Foreign Exchange
Mode, will be determined on or before the fourth Business Day preceding each
Distribution Date and will be paid by the Trust to the related Swap Counterparty
on or about the third Business Day preceding each Distribution Date in
accordance with the applicable Swap Agreement (or, with respect to a
Distribution Date that coincides with a Reset Date resulting in a successful
remarketing of any class of Reset Rate Notes then in Foreign Exchange Mode,
payments under the related Swap Agreement will be made one Business Day prior to
such Distribution Date); and (2) with respect to payments of interest on any
class of Reset Rate Notes if then bearing a floating rate of interest, will be
paid by the Trust to the related Swap Counterparty by 1:00 p.m. (New York time)
on the Business Day immediately preceding each Distribution Date.
16
In the event that a Swap Termination Payment is owed by the Trust to any
Swap Counterparty and a Replacement Transaction (as defined in the related Swap
Agreement) is procured by the Trust under which the replacement Swap
Counterparty makes a payment to the Trust, the Trust will pay that amount
directly to the original Swap Counterparty to the extent that a payment is owed
by the Trust to that Swap Counterparty. If after making that payment, the
original Swap Counterparty is still owed a payment, then the remaining amount
will be paid as set forth in clause (m) above.
If a Currency Swap Agreement terminates, amounts that would have otherwise
been paid to the related Swap Counterparty under the related Currency Swap
Agreement will be used to make payments to the related class of Reset Rate
Noteholders in an amount in Euros or any other applicable non-U.S. Dollar
currency equal to the payment that would have been made by the related Swap
Counterparty to the Trust. If this occurs, the Trust will exchange U.S. Dollars
for Euros or any other applicable non-U.S. Dollar currency in order to make
distributions to the related class of Reset Rate Noteholders.
Notwithstanding the foregoing, in the event the Trust Student Loans are not
sold pursuant to Section 6.1(A) or Section 4.4 of the Indenture, the amount that
would otherwise be paid to the Excess Distribution Certificateholder shall be
applied on such Distribution Date to pay as an accelerated payment of principal
on the Notes, first to the Class A Noteholders in the same order and priority as
is set forth in clause 2.8(f) above until the Outstanding Amount of the Class A
Notes is paid in full and reduced to zero, and then to the Class B Noteholders
as set forth in clause 2.8(i) above; provided that the amount of such
distribution shall not exceed the Outstanding Amount of the Class A Notes or the
Class B Notes, as applicable, after giving effect to all other payments in
respect of principal of Class A Notes and Class B Notes to be made on such
Distribution Date.
Notwithstanding the foregoing, if:
(i) on any Distribution Date following distributions or allocations
under clauses 2.8(a) through (f) above to be made on that Distribution
Date, without giving effect to any payments from the Capitalized Interest
Account to the Class B Noteholders, the Outstanding Amount of the Class A
Notes (or if any class of Reset Rate Notes is then in Foreign Exchange
Mode, then the U.S. Dollar Equivalent Principal Amount), less amounts
(other than Investment Earnings) on deposit in any Accumulation Account,
would be in excess of:
(1) the outstanding principal balance of the Trust Student Loans,
plus
(2) any accrued but unpaid interest on the Trust Student Loans as
of the last day of the related Collection Period, plus
(3) the balance of Reserve Account Balance on such Distribution
Date following those distributions required to be made under clauses
2.8 (a) through (f) above, minus
17
(4) the Specified Reserve Account Balance and any Supplemental
Interest Account Deposit Amount(s) for that Distribution Date, or
(ii) an Event of Default affecting the Class A Notes has occurred and
is continuing,
then, until the conditions described in clauses (i) and (ii) above no longer
exist, the amounts on deposit in the Collection Account and the Reserve Account
will be applied on that Distribution Date to the payment of the Class A
Noteholders' Distribution Amount and the Supplemental Interest Account Deposit
Amount(s) before any amounts are applied to the payment of the Class B
Noteholders' Distribution Amount.
Section 2.9 Reserve Account. On the Closing Date, the Issuer shall deposit
the Reserve Account Initial Deposit into the Reserve Account.
(a) 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 Section 2.7(b) above and Section 2.8(a) above 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 Section 2.9(f)
below, amounts on deposit in the Reserve Account will not be available to cover
any unpaid Carryover Servicing Fees to the Servicer.
(b) In the event that the Available Funds are insufficient to make the
payments described under Sections 2.8(a) through 2.8(c), 2.8(d)(1), 2.8(d)(2)
and 2.8(e) above on any Distribution Date (after giving effect to required
distributions and/or allocations from the Capitalized Interest Account), the
Administrator shall instruct the Indenture Trustee in writing to withdraw from
the Reserve Account on each Distribution Date an amount equal to such
deficiency, to the extent of funds available therein after giving effect to
clause (a) above, and to distribute and/or allocate such amounts in the same
order and priority as is set forth in Sections 2.8(c), 2.8(d)(1), 2.8(d)(2) and
2.8(e) above.
(c) In the event that the Class A Noteholders' Principal Distribution
Amount on the Note Final Maturity Date with respect to any Class of Class A
Notes exceeds the amount distributed to such Class A Noteholders pursuant to
Section 2.8(f) above on such date, the Administrator shall instruct the
Indenture Trustee in writing to withdraw from the Reserve Account on such Note
Final Maturity Date an amount equal to such excess, to the extent of funds
available therein after giving effect to clauses (a) and (b) above, and to
distribute such amount to the Class A Noteholders entitled thereto, in the same
order and priority as is set forth in Section 2.8(f) above.
(d) In the event that the Class B Noteholders' Principal Distribution
Amount on the Class B Maturity Date exceeds the amount distributed to the Class
B Noteholders pursuant to Section 2.8(i) on such date, the Administrator shall
instruct the Indenture Trustee in writing to withdraw from the Reserve Account
on the Class B Maturity Date an amount equal to such
18
excess, to the extent of funds available therein after giving effect to clauses
(a) through (c) above, and to distribute such amount to the Class B Noteholders
entitled thereto.
(e) After giving effect to clauses (a) through (d) above, 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 (e)) is greater than the Specified Reserve Account
Balance for such Distribution Date, the Administrator shall instruct the
Indenture Trustee in writing to withdraw the amount on deposit in excess of the
Specified Reserve Account Balance and deposit such amount into the Collection
Account.
(f) On the final Distribution Date upon termination of the Trust and
following the payment in full of the Outstanding Amount of the Notes and of all
other amounts (other than Carryover Servicing Fees, Swap Termination Payments,
if applicable, and remarketing fees and expenses) owing or to be distributed
hereunder or under the Indenture to Noteholders, the Servicer, any Swap
Counterparty, the Remarketing Agents or the Administrator, as applicable, 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 Swap Termination Payments not
previously paid to the applicable Swap Counterparty, if any, third to pay any
remarketing fees not previously paid from the Remarketing Fee Account and fourth
to pay any remarketing fees and expenses due to the Remarketing Agents or the
Administrator. Any amount remaining on deposit in the Reserve Account after such
payments have been made shall be distributed to the Excess Distribution
Certificateholder. The Excess Distribution Certificateholder shall in no event
be required to refund any amounts properly distributed pursuant to this Section
2.9(f).
(g) Anything in this Section 2.9 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, and to pay any unpaid Carryover Servicing Fee,
Swap Termination Payments and remarketing fees and expenses, such amount will be
so applied on such Distribution Date and the Administrator shall instruct the
Eligible Lender Trustee and the Indenture Trustee to make such payments.
Section 2.10 Investment Earnings; Other Trust Accounts. The Administrator
will instruct the Indenture Trustee to (1) withdraw all Investment Earnings, if
any, on deposit in (x) each existing Trust Account, other than any Accumulation
Account, on each Distribution Date and (y) any Accumulation Account on each
Distribution Date, but only to the extent funds are received by the Trust with
respect thereto, (2) deposit such amounts into the Collection Account and (3)
include such amounts as Available Funds for that Distribution Date.
(a) Capitalized Interest Account. On the Closing Date, the Issuer shall
deposit the Capitalized Interest Account Initial Deposit into the Capitalized
Interest Account.
(i) In the event that the Available Funds, less the Principal
Distribution Amounts, are insufficient to make the payments described under
Sections 2.8(d)(1), 2.8(d)(2) and 2.8(e) on a Distribution Date (prior to
any distributions and/or allocations from amounts on deposit in the Reserve
Account), the Administrator shall instruct the Indenture Trustee in writing
to withdraw from the Capitalized Interest Account an
19
amount equal to such deficiencies, to the extent of funds available
therein, and to distribute and/or allocations such amount first, pro rata
based on the amounts of such shortfalls, to the Class A Noteholders until
they have received the Class A Noteholders' Interest Distribution Amount
for that Distribution Date and the related Swap Counterparty until it has
received the Swap Interest Payments required to be made under Section
2.8(d)(2) above, and second, so long as the events described in clauses (i)
and (ii) of the last paragraph of Section 2.8 have not occurred, to the
Class B Noteholders until they have received the Class B Noteholders'
Interest Distribution Amount for that Distribution Date.
(ii) After giving effect to Section 2.10(a)(i) above, on the
Distribution Date in October 2005, the Administrator shall instruct the
Indenture Trustee in writing to withdraw all amounts remaining from the
Capitalized Interest Account and include such funds with other Available
Funds on that Distribution Date.
(b) Remarketing Fee Account.
(i) On each Distribution Date that is one year or less prior to a
Reset Date, the Administrator shall instruct the Indenture Trustee in
writing to withdraw from the Collection Account an amount equal to the
Quarterly Funding Amount.
(ii) If amounts remaining on deposit in the Remarketing Fee Account on
any Distribution Date, after giving effect to all distributions required to
be made on that Distribution Date, exceeds the sum of the Reset Period
Target Amount for the related class of Reset Rate Notes, the Administrator
shall instruct the Indenture Trustee in writing to withdraw such excess
amount, deposit such excess amount into the Collection Account and include
such excess amount as Available Funds for that Distribution Date.
(iii) The Administrator shall instruct the Indenture Trustee in
writing no later than one Business Day preceding each Distribution Date
that is also a Reset Date for any class of Reset Rate Notes, to withdraw
from the Remarketing Fee Account on such Distribution Date the amount of
the fees due to the Remarketing Agents pursuant to Section 2.8(c) above and
pay such fees to the Remarketing Agents by 1:00 p.m. (New York time) on
such Distribution Date, in the amounts and to the accounts that the
Administrator shall specify; provided that if the amount (excluding for
such purpose any Investment Earnings) on deposit in the Remarketing Fee
Account is not sufficient to make payment in full, the Remarketing Agents
shall be entitled to payment at the priority position set forth in clause
2.8(n) above on the related and subsequent Distribution Dates until such
deficiency is paid in full.
(c) Accumulation Accounts.
(i) If, on any Distribution Date, principal would be payable to any
class of Reset Rate Notes then structured not to receive a payment of
principal until the end of the related Reset Period, principal allocated to
that class of Reset Rate Notes pursuant to Section 2.8(f) above will be
deposited into the related Accumulation Account.
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(ii) If any class of Reset Rate Notes is denominated in U.S. Dollars
and is structured during the then current Reset Period not to receive a
payment of principal until the end of the related Reset Period, the
Administrator shall instruct the Indenture Trustee in writing no later than
one Business Day preceding each Distribution Date that is also a Reset
Date, to withdraw from the related Accumulation Account on such
Distribution Date (after any additional allocations of principal are made
to that account on such Distribution Date) the amount (less any Investment
Earnings) on deposit in such Accumulation Account and distribute (by 1:00
p.m. (New York time) on the related Distribution Date) such amounts to the
related Reset Rate Noteholders as of the immediately current Record Date,
pro rata, as a payment of principal as set forth in clause 2.8(f) above. If
any class of Reset Rate Notes is in Foreign Exchange Mode and is structured
during the then current Reset Period not to receive a payment of principal
until the end of the related Reset Period, the Administrator shall instruct
the Indenture Trustee in writing no later than one Business Day preceding
each Distribution Date that is also a Reset Date, to withdraw from the
related Accumulation Account on such Distribution Date (after any
additional allocations of principal are made to that account on such
Distribution Date) the amount (less any Investment Earnings) on deposit in
such Accumulation Account and deliver such amounts to the related Currency
Swap Counterparty or Counterparties in exchange for the amount of the
applicable non-U.S. Dollar currency, determined using the exchange rate set
forth in the related Swap Agreement, for payment to the related Reset Rate
Noteholders as of the immediately preceding Record Date, pro rata, as a
payment of principal as set forth in clause 2.8(f) above. Amounts (less any
Investment Earnings) on deposit in the related Accumulation Account may be
used only to pay principal on the related class of Reset Rate Notes (or to
the related Currency Swap Counterparty or Counterparties) and for no other
purpose.
(iii) In the event that on any Distribution Date the amount (less any
Investment Earnings) on deposit for any class of Reset Rate Notes in the
related Accumulation Account, including amounts deposited on that
Distribution Date, would equal the Outstanding Amount of that class of
Reset Rate Notes, then no additional amounts will be deposited into the
related Accumulation Account and all amounts therein, less any Investment
Earnings, will be distributed on the next related Reset Date, pursuant to
Section 2.10(c)(ii) above, and the Outstanding Amount of that class of
Reset Rate Notes will be reduced to zero.
(d) Supplemental Interest Accounts.
(i) On each Distribution Date when amounts are on deposit in an
Accumulation Account, the Indenture Trustee, subject to sufficient
Available Funds therefor, will deposit into the related Supplemental
Interest Account, the related Supplemental Interest Account Deposit Amount
for such Distribution Date, pursuant to Section 2.8(g) above.
(ii) The Administrator will instruct the Indenture Trustee to withdraw
all amounts (including any Investment Earnings) on deposit in any
Supplemental Interest Account on each Distribution Date, deposit such
amounts into the Collection Account, and include such sums as Available
Funds for that Distribution Date.
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(e) Investment Premium Purchase Accounts.
(i) From time to time, the Administrator will instruct the Indenture
Trustee in writing to withdraw amounts from an Investment Premium Purchase
Account, and utilize such amounts to pay for the purchase price in excess
of par of any Eligible Investments in connection with the related
Accumulation Account.
(ii) On each Distribution Date, the Administrator, with respect to any
Investment Premium Purchase Account, will instruct the Indenture Trustee in
writing to (1) withdraw the Investment Premium Purchase Account Release
Amount (including any Investment Earnings in such Investment Premium
Purchase Account), (2) deposit such funds into the Collection Account, and
(3) include such funds as Available Funds for that Distribution Date.
(f) Investment Reserve Accounts.
(i) If the ratings of any Eligible Investment in connection with the
related Accumulation Account have been downgraded by one or more Rating
Agencies, on the next Distribution Date the Administrator will instruct the
Indenture Trustee to deposit the applicable Investment Reserve Account
Required Amount into the related Investment Reserve Account to the extent
of Available Funds remaining after giving effect to distributions and/or
allocations made pursuant to Section 2.8(a) through (g). On each
Distribution Date, the Administrator will instruct the Indenture Trustee to
withdraw from any Investment Reserve Account any amounts required to offset
realized losses on Eligible Investments in connection with the related
Accumulation Account, and deposit that amount into such Accumulation
Account.
(ii) On each Distribution Date, the Administrator, with respect to any
Investment Reserve Account, will instruct the Indenture Trustee to (1)
withdraw all amounts (including any Investment Earnings) which were not
deposited into the related Accumulation Account and have remained on
deposit in such Investment Reserve Account from the immediately preceding
Distribution Date, (2) deposit such funds into the Collection Account, and
(3) include such funds as Available Funds for that Distribution Date.
(g) Euro Account.
(i) The Trust shall establish on the Closing Date and shall maintain a
Euro Account for any class of Reset Rate Notes during any Reset Period
(including each initial Reset Period) when any class of Reset Rate Notes is
denominated in Euros.
(ii) Any payments in Euros received from any Currency Swap
Counterparty will be deposited into the Euro Account for the benefit of the
related Reset Rate Noteholders during any Reset Period when any class of
Reset Rate Notes is denominated in Euros.
(iii) No later than the Business Day preceding each Distribution Date,
the Administrator shall instruct the London Paying Agent in writing to
distribute all amounts
22
on deposit in the Euro Account during any Reset Period when any class of
Reset Rate Notes is denominated in Euros, to the related Reset Rate
Noteholders by 1:00 p.m. (New York time) on the related Distribution Date;
provided, however, that with respect to any Distribution Date that
coincides with a Reset Date for such class, the Administrator will instruct
the London Paying Agent to distribute the amounts in the Euro Account to
the related Reset Rate Noteholders by 1:00 p.m. (New York time) on the
second Business Day following such Distribution Date. If the related Swap
Agreement is not in effect, the Administrator shall cause U.S. Dollars to
be converted into Euros in amounts sufficient to make the distributions
specified in this Agreement and the Indenture.
(h) Other Currency Account.
(i) On each Reset Date with respect to any class of Reset Rate Notes
while in Foreign Exchange Mode that is then denominated in a currency other
than U.S. Dollars or Euros, the Trust shall establish an Other Currency
Account for such class of Reset Rate Notes.
(ii) Any payments in the related currency received from any Currency
Swap Counterparty will be deposited into the related Other Currency Account
for the benefit of the related Reset Rate Noteholders.
(iii) The Administrator shall instruct the London Paying Agent in
writing no later than the Business Day preceding each Distribution Date to
distribute all amounts on deposit in the applicable Other Currency Account
to the related Reset Rate Noteholders by 1:00 p.m. (New York time) on the
related Distribution Date; provided, however, that with respect to any
Distribution Date that coincides with a Reset Date when any class of Reset
Rate Notes is then in Foreign Exchange Mode, the Administrator will
instruct the London Paying Agent to distribute the amounts in the
applicable Other Currency Account to the related Noteholders by 1:00 p.m.
(New York time) on the second Business Day following such Distribution
Date. If the related Swap Agreement is not in effect, the Administrator
shall cause U.S. Dollars to be converted into such other applicable
non-U.S. Dollar currency in amounts sufficient to make the distributions
specified in this Agreement and the Indenture.
(i) Collection Account. On the Closing Date, the Issuer shall deposit
$3,200,000 into the Collection Account. This amount will be included with other
Available Funds on the first Distribution Date.
(j) Pre-Funding Account.
(i) On the Closing Date, the Issuer shall deposit the Pre-Funding
Account Initial Deposit into the Pre-Funding Account.
(ii) From time to time during the Funding Period, the Administrator
will instruct the Indenture Trustee to withdraw funds from the from
Pre-Funding Account to purchase Additional Trust Student Loans that are
Eligible Loans pursuant to the Sale Agreement.
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(iii) On the Distribution Date in October 2004, the Administrator
shall instruct the Indenture Trustee to deposit all amounts remaining in
the Pre-Funding Account into the Collection Account to be included as
Available Funds for that Distribution Date.
Section 2.11 Statements to Excess Distribution Certificateholder and
Noteholders. On each Determination Date preceding a Distribution Date, the
Administrator shall provide to the Indenture Trustee and the Eligible Lender
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 Eligible Lender Trustee to forward on such succeeding Distribution Date
to the Excess Distribution Certificateholder of record a statement, setting
forth at least the following information as to the Notes and the Excess
Distribution Certificate to the extent applicable:
(a) the amount of such distribution allocable to principal of each class of
the Notes (including amounts deposited into an Accumulation Account);
(b) the amount of the distribution allocable to interest on each class of
the Notes;
(c) the amount of the distribution allocable to the Excess Distribution
Certificate, if any;
(d) [Reserved];
(e) the Pool Balance as of the close of business on the last day of the
preceding Collection Period;
(f) the aggregate outstanding principal balance of the Notes and, the Note
Pool Factor, as of such Distribution Date, after giving effect to payments
allocated to principal reported under clauses (a) and (c) above;
(g) the Note Rate for the next period for each class of Notes (identifying
separately any applicable Index);
(h) 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;
(i) the amount of the Administration Fee paid to the Administrator on such
Distribution Date;
(j) with respect to each class of Reset Rate Notes: (i) the next related
Reset Date and the related Reset Period; (ii) if in Foreign Exchange Mode, the
next Distribution Date on which interest will be paid to the related Reset Rate
Noteholders, if other than quarterly; (iii) the amount on deposit in the related
Accumulation Account, the related Supplemental Interest Account, the related
Investment Premium Purchase Account, the related Investment Reserve Account and
the Euro Account or the Other Currency Account, as applicable; (iv) the interest
rate and amount due to each Swap Counterparty, if applicable; (v) the amount of
fees, if any,
24
paid to the Remarketing Agents on such Distribution Date; and (vi) any other
relevant information as determined by the Administrator;
(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, if any, in each case as
applicable to each class of Notes, and the change in such amounts from the
preceding statement;
(m) the aggregate Purchase Amounts for Trust Student Loans, if any, that
were repurchased by the Depositor or purchased by the Servicer, SLMA, VG Funding
or SLM ELC from the Issuer during such Collection Period;
(n) the respective balances of the Reserve Account and the Capitalized
Interest Account, if any, on such Distribution Date, after giving effect to
changes therein on such Distribution Date;
(o) the amount received from and paid to each Swap Counterparty for such
Distribution Date and the amount of any Termination Payment made or received by
the Trust during the applicable Collection Period;
(p) the balance of Trust Student Loans that are delinquent in each
delinquency period as of the end of that Collection Period;
(q) the amount on deposit, if any, in the Investment Reserve Account and
the Investment Premium Purchase Account and the aggregate amount of any realized
losses on Eligible Investments; and
(r) with respect to the October 2004 Distribution Date, the aggregate
initial principal balance of Additional Trust Student Loans, plus accrued
interest to be capitalized as of their respective Subsequent Cutoff Dates,
purchased during the Funding Period, and the amount transferred from the
Pre-Funding Account to the Collection Account.
Each amount set forth pursuant to clauses (a), (b), (c), (f), (h), (i),
(j)(iii), (j)(iv), (k) and (l) above shall be expressed as a dollar amount per
$1,000 of original principal balance of a Note denominated in U.S. Dollars, or
if any class of Reset Rate Notes is then denominated in a currency other than
U.S. Dollars, expressed as an amount in the applicable currency per the
applicable currency equivalent (approximately) of $1,000 of the original
principal balance of that Note. A copy of the statements referred to above may
be obtained by the Excess Distribution Certificateholder or any Note Owner by a
written request to the Eligible Lender Trustee or the Indenture Trustee,
respectively, addressed to the respective Corporate Trust Office.
Section 2.12 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
25
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 2.13 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, (a) make any
payments to the Noteholders under the Basic Documents, (b) sell the Indenture
Trust Estate pursuant to Section 5.04 of the Indenture, (c) take any other
action that the Issuer directs the Administrator not to take on its behalf, (d)
in connection with its duties hereunder assume any indemnification obligation of
any other Person or (e) service the Trust Student Loans.
Section 2.14 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 $25,000 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.
Section 2.15 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 Excess Distribution Certificateholder and
the Noteholders, as the case may be. To the extent that there are insufficient
Available Funds therefor, the Administrator shall advance from its funds and
also pay, on behalf of the Trust, the costs and expenses (other than remarketing
fees) associated with the remarketing of any class of Reset Rate Notes, set
forth in Section 3 of the Remarketing Agreement, including, without limitation,
the fees of the Rating Agencies in connection with any required satisfaction of
the Rating Agency Condition. On each Distribution Date, the Administrator shall
be entitled to reimbursement from the Trust for such remarketing related
expenses, from Available Funds, as set forth in Section 2.8(o) above.
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ARTICLE III
Section 3.1 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
covering such calendar month referred to in Section 3.1(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 Certificate covering such
Collection Period referred to in Section 3.1(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 Eligible
Lender Trustee and the Indenture Trustee, an Administrator's Officers'
Certificate containing all information necessary to pay the Servicer the Primary
Servicing Fee due on such Monthly Servicing Payment Date pursuant to Section
2.7(b) above.
(c) On each Determination Date prior to a Distribution Date or earlier to
the extent required for the Indenture Trustee to make distributions to any Swap
Counterparty, the Administrator shall deliver to the Eligible Lender 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 2.7 and 2.8 above, 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 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
3.1. In connection therewith, the Administrator shall calculate Five-Month LIBOR
or Four-Month LIBOR, as applicable, and Five-Month EURIBOR or Four-Month
EURIBOR, as applicable, for the first Accrual Period, and for each subsequent
Accrual Period shall calculate, as applicable, on each Interest Rate
Determination Date during such Accrual Period, Three-Month LIBOR, Three-Month
EURIBOR, GBP-LIBOR, the Commercial Paper Rate, the CMT Rate, the Federal Funds
Rate, the 91-day Treasury Xxxx Rate, the Prime Rate (in each case only if
applicable to any class of Reset Rate Notes during such Accrual Period) or any
other rate or index relevant to the payment of interest of any Note, in
accordance with the definitions of each such Index. In addition, the
Administrator hereby accepts the delegation to it of the obligations of the
"Calculation Agent" under any Swap Agreement, as applicable, to which the Issuer
is a party.
(e) The Administrator hereby accepts the delegation to it of the
obligations of the "Calculation Agent" under the Interest Rate Cap Agreement to
which the Issuer is a party, as applicable.
27
(f) The Administrator shall furnish to the Issuer from time to time such
information regarding the Collateral as the Issuer shall reasonably request.
Section 3.2 Annual Statement as to Compliance; Notice of Default; Financial
Statements.
(a) Each of the Servicer and the Administrator shall deliver to the
Eligible Lender Trustee and the Indenture Trustee on or before 90 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, 2004) 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 3.1 to the Rating Agencies. A copy of each such Officers' Certificate
and each report referred to in Section 3.1 may be obtained by the Excess
Distribution Certificateholder, any Noteholder or any Note Owner by a request in
writing to the Eligible Lender Trustee addressed to its Corporate Trust Office,
together with evidence satisfactory to the Eligible Lender Trustee that such
Person is one of the foregoing parties. Upon the telephone request of the
Eligible Lender Trustee, the Indenture Trustee will promptly furnish the
Eligible Lender Trustee a list of Noteholders as of the date specified by the
Eligible Lender Trustee.
(b) The Servicer shall deliver to the Eligible Lender 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 Eligible Lender 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 5.1(a) or (b) below or would cause the
Administrator to fail to meet the requirement of clause (a) of Section 2.4
above.
(d) At any time that the Administrator is not an Affiliate of the
Depositor, the Administrator shall provide to the Eligible Lender 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 30 days after the end of each quarterly
accounting period of the Administrator unaudited financials as at the end of and
for such period.
28
Section 3.3 Annual Independent Certified Public Accountants' Report. 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 Eligible
Lender 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 Eligible Lender Trustee 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, 2004) 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 (a) such exceptions as such
firm shall believe to be immaterial and (b) 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 4.1 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 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 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 has been duly authorized, executed
and delivered by the Administrator and, assuming that it is duly executed and
delivered by parties hereto, constitutes a valid and binding agreement of the
Administrator, enforceable against the Administrator in accordance with its
terms; except that the enforceability hereof may be subject to (a) bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights generally, and (b) general principles of
equity (regardless of whether such enforceability is considered in a proceeding
at law or in equity) and (c) with
29
respect to rights to indemnity hereunder, limitations of public policy under
applicable securities laws.
(d) No Violation. The consummation of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof or thereof do not conflict
with, result in any breach of any of the terms and provisions of, nor constitute
(with or without notice or lapse of time or both) a default under, the articles
of incorporation or by-laws of the Administrator, or any 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 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.
(i) There are no legal or governmental proceedings or investigations
pending against the Administrator or, to its best knowledge, threatened or
contemplated against the Administrator or to which the Administrator or any
of its subsidiaries is a party or of which any property of the
Administrator or any of its subsidiaries is the subject, before any court,
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Administrator or its
properties or by any other party: (i) asserting the invalidity of this
Agreement or any of the other Basic Documents, the Notes or the Excess
Distribution Certificate, (ii) seeking to prevent the issuance of the Notes
or the Excess Distribution Certificate 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 Trust, the Notes
or the Excess Distribution Certificate or (iv) seeking to affect adversely
the Federal or state income tax attributes of the Issuer, the Notes or the
Excess Distribution Certificate.
(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 4.2 Liability of Administrator; Indemnities.
(a) The Administrator shall be liable in accordance herewith only to the
extent of the obligations specifically undertaken by the Administrator under
this Agreement.
(b) The Administrator shall indemnify, defend and hold harmless the Issuer,
the Excess Distribution Certificateholder, the Noteholders and each Swap
Counterparty and any of
30
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.
(c) 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 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 to 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.
(d) The Administrator shall indemnify the Eligible Lender Trustee
(including in its capacity as Interim Eligible Lender 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 Interim Trust Agreement, the Trust
Agreement and the other Basic Documents.
(e) Without limiting the generality of the foregoing, the Administrator
shall indemnify the Eligible Lender 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;
(iii) any claim that any original note or other document evidencing or
relating to the Trust Student Loans has been lost, misplaced or destroyed;
and
31
(iv) any claim for failure to comply with the provisions of 34 CFR
Sec. 682.203(b) (other than for the Eligible Lender Trustee's failure to
qualify as an eligible lender under the Act).
(f) The Eligible Lender Trustee shall notify the Administrator promptly of
any claim for which it may seek indemnity. Failure by the Eligible Lender
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 Eligible Lender Trustee after it has assumed such
defense; provided, however, that in the event that there may be a conflict
between the positions of the Eligible Lender Trustee and the Administrator in
conducting the defense of such claim, the Eligible Lender 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 Eligible Lender Trustee through the Eligible Lender Trustee's
own willful misconduct, negligence or bad faith.
(g) The Depositor shall pay reasonable compensation to the Indenture
Trustee and the Eligible Lender Trustee and shall reimburse the Indenture
Trustee and the Eligible Lender Trustee for all reasonable expenses,
disbursements and advances.
(h) For purposes of this Section 4.2, in the event of the termination of
the rights and obligations of the Administrator (or any successor thereto
pursuant to Section 4.3 below) as Administrator pursuant to Section 5.1 below,
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 5.2 below.
(i) Indemnification under this Section 4.2 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 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 4.3 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 that states
expressly that such Person assumes 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 4.1 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 surviving
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Administrator, if other than Xxxxxx Mae, Inc., 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 4.3 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
Excess Distribution Certificateholder and (v) unless Xxxxxx Mae, Inc. 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 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 4.3 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.
Section 4.4 Limitation on Liability of Seller, Administrator and Others.
(a) Neither the Administrator nor any of its directors, officers, employees
or agents shall be under any liability to the Issuer, the Noteholders or the
Excess Distribution Certificateholder, or to the Indenture Trustee or 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 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 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.
(b) 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 Excess Distribution Certificateholder under this Agreement and
the Noteholders under the Indenture and under this Agreement.
Section 4.5 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 the Excess Distribution Certificate or Notes with the same
rights as it would have if it were not the
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Administrator or an Affiliate thereof, except as expressly provided herein in
any other Basic Document.
Section 4.6 Xxxxxx Xxx, Inc. Not to Resign as Administrator. Subject to the
provisions of Section 4.3 above, Xxxxxx Mae, Inc. 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
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, Inc. in accordance with Section 5.2 below. Anything
in this Section 4.6 to the contrary notwithstanding, the Administrator may
resign at any time subsequent to the assignment of its rights, duties and
obligations hereunder pursuant to Section 4.3 above.
ARTICLE V
Section 5.1 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
(ii) any failure by the Administrator to direct the Indenture Trustee
to make any required distributions from any of the Trust Accounts on any
Monthly Servicing Payment Date or Distribution Date, which failure in case
of either clause (i) or (ii) 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 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 the Excess
Distribution Certificateholder 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 Eligible Lender Trustee or (B) to the Administrator, the
Indenture Trustee and the Eligible Lender Trustee by the Noteholders or Excess
Distribution Certificateholder, as applicable, representing not less than 50% of
the Outstanding Amount of the Notes or representing the whole of the
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outstanding Excess Distribution Certificate (including such Excess Distribution
Certificate if 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 50% of the Outstanding Amount of the Notes, by notice then given
in writing to the Administrator (and to the Indenture Trustee and the Eligible
Lender Trustee if given by the Noteholders) may terminate all the rights and
obligations (other than the obligations set forth in Section 4.2 above) 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 Excess Distribution
Certificate, 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 5.2 below; and, without
limitation, the Indenture Trustee and the Eligible Lender Trustee are hereby
authorized and empowered to execute and deliver, for the benefit of the
predecessor Administrator, as attorney-in-fact or otherwise, any and all
documents and other instruments, and to do or accomplish all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination. The predecessor Administrator shall cooperate with the successor
Administrator, the Indenture Trustee and the Eligible Lender Trustee in
effecting the termination of the responsibilities and rights of the predecessor
Administrator under this Agreement. All reasonable costs and expenses (including
attorneys' fees) 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 5.1) 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.
Section 5.2 Appointment of Successor.
(a) Upon receipt by the Administrator of notice of termination pursuant to
Section 5.1 above, 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 (i) the date 120 days from
the delivery to the Eligible Lender Trustee and the Indenture Trustee of written
notice of such resignation (or written confirmation of such notice) in
accordance with the terms of this Agreement and (ii) 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
35
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 Excess Distribution
Certificate by any Rating Agency) and all the rights granted to the predecessor
Administrator by the terms and provisions of this Agreement.
(c) 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 5.3. Notification to Noteholders and Certificateholder. Upon any
termination of, or appointment of a successor to, the Administrator pursuant to
this Article V, the Eligible Lender Trustee shall give prompt written notice
thereof to the Excess Distribution Certificateholder 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 5.4 Waiver of Past Defaults. The Noteholders of Notes evidencing a
majority of the Outstanding Amount of the Notes (or the Excess Distribution
Certificateholder, in the case of any default which does not adversely affect
the Indenture Trustee or the Noteholders) may, on behalf of all Noteholders and
the Excess Distribution Certificateholder, waive in writing any default by the
Administrator in the performance of its obligations hereunder and any
consequences thereof, except a default in making any required deposits to or
payments from any of the Trust Accounts (or giving instructions regarding the
same) in accordance with this Agreement. Upon any such waiver of a past default,
such default shall cease to exist, and any Administrator Default arising
therefrom shall be deemed to have been remedied for every purpose of this
Agreement. No such waiver shall extend to any subsequent or other default or
impair any right consequent thereto.
ARTICLE VI
Section 6.1 Termination.
(a) Optional Purchase of All Trust Student Loans. The Administrator shall
notify the Servicer, the Depositor, the Issuer 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 sum of (i) the Initial
Pool Balance and (ii) the aggregate initial principal balances of all
36
Additional Trust Student Loans plus accrued interest to be capitalized as of
their respective Subsequent Cutoff Dates, of the percentage that the then
outstanding Pool Balance bears to the sum of (i) the Initial Pool Balance and
(ii) the aggregate initial principal balances of all Additional Trust Student
Loans plus accrued interest to be capitalized as of their respective Subsequent
Cutoff Dates. As of the last day of any Collection Period immediately preceding
a Distribution Date as of which the then outstanding Pool Balance is 10% or less
of the sum of (i) the Initial Pool Balance and (ii) the aggregate initial
principal balances of all Additional Trust Student Loans plus accrued interest
to be capitalized as of their respective Subsequent Cutoff Dates, the Eligible
Lender Trustee on behalf and at the direction of the Servicer, or any other
"eligible lender" (within the meaning of the Higher Education Act) designated by
the Servicer in writing to the Eligible Lender Trustee and the Indenture
Trustee, 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 2.6 above 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 Eligible Lender 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 amounts owed to any Swap Counterparty for Swap Payments and Swap
Termination Payments and amounts to any Remarketing Agent for any unpaid
remarketing fees and expenses, and any Carryover Servicing Fees. In the event
the Servicer fails to notify the Eligible Lender 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 4.4 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 5 business days' notice from the Indenture
Trustee as provided in Section 4.4 of the Indenture.
(b) Notice. 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.
(c) Succession. Following the satisfaction and discharge of the Indenture
and the payment in full of the principal of and interest on the Notes, the
Excess Distribution Certificateholder shall succeed to the rights of the
Noteholders hereunder and the Eligible Lender 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 7.1 Protection of Interests in Trust.
(a) The Administrator, on behalf of 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
Eligible Lender Trustee and the Indenture Trustee in the Trust Student Loans and
in the proceeds thereof. The Administrator shall deliver (or cause to be
delivered) to
37
the Eligible Lender 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 paragraph
(a) above seriously misleading within the meaning of Section 9-402(7) of the
UCC, unless it shall have given the Eligible Lender Trustee and the Indenture
Trustee at least 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 Eligible Lender 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 Eligible Lender 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 Eligible Lender Trustee and the Indenture Trustee in
such Trust Student Loan and that such Trust Student Loan is owned by the
Eligible Lender Trustee on behalf of the Issuer and has been pledged to the
Indenture Trustee. Indication of the Issuer's, the Eligible Lender Trustee's and
the Indenture Trustee's interest in a 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 Eligible Lender 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.
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(h) Upon request, at any time the Eligible Lender 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 Eligible Lender 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 Eligible Lender Trustee or to the Indenture
Trustee, within 20 Business Days thereafter, a comparison of such list to the
list of Trust Student Loans set forth in Schedule A to the Indenture as of the
Closing Date and a list of all Additional Trust Student Loans as of the end of
the Funding Period, and, for each Trust Student Loan that has been removed from
the pool of loans held by the Eligible Lender Trustee on behalf of the Issuer,
information as to the date as of which and circumstances under which each such
Trust Student Loan was so removed.
(i) The Depositor shall deliver to the Eligible Lender Trustee and the
Indenture Trustee:
(i) 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 Eligible
Lender 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
(ii) within 120 days after the beginning of each calendar year
beginning with the first calendar year beginning more than three months
after the Initial 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 Eligible Lender 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 3.6(b) of the Indenture.
(j) Each Opinion of Counsel referred to in subclause (i) or (ii) of clause
(i) 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.
(k) The Depositor shall, to the extent required by applicable law, cause
the Excess Distribution Certificate 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.
39
ARTICLE VIII
Section 8.1 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.
Section 8.2 No Joint Venture. Nothing contained in this Agreement (a) shall
constitute the Administrator and either of the Issuer or the Eligible Lender
Trustee as members of any partnership, joint venture, association, syndicate,
unincorporated business or other separate entity, (b) shall be construed to
impose any liability as such on any of them or (c) 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 8.3 Other Activities of Administrator. Nothing herein shall prevent
the Administrator or its Affiliates from engaging in other businesses or, in its
sole discretion, from acting in a similar capacity as an administrator for any
other person or entity even though such person or entity may engage in business
activities similar to those of the Issuer, the Eligible Lender Trustee or the
Indenture Trustee.
Section 8.4 Powers of Attorney. The Eligible Lender 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 8.5 Amendment.
(a) This Agreement (other than Sections 2.1 and 2.2 above) may be amended
by the Issuer, the Excess Distribution Certificateholder, the Servicer, the
Administrator, the Eligible Lender Trustee and the Indenture Trustee, without
the consent of any of the Noteholders or any Swap Counterparty, 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; 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 of the Excess Distribution Certificateholder, and that such action
will not materially adversely affect (1) the Trust's ability to enforce or
protect its rights or remedies under any Swap Agreement, (2) the ability of the
Trust to timely and fully perform its obligations under any Swap Agreement or
(3) any of the Trust's obligations under any Swap Agreement or any swap
transaction under such agreement. Any such amendment, modification or supplement
without the consent of the related Swap Counterparty shall not be binding on the
related Swap Counterparty.
40
(b) Sections 2.1 and 2.2 may be amended from time to time by a written
amendment duly executed and delivered by the Issuer, the Excess Distribution
Certificateholder, the Eligible Lender Trustee, the Indenture Trustee and the
Administrator, without the consent of the Noteholders or any Swap Counterparty
(unless such consent is otherwise required by this Section), 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 Eligible Lender Trustee, materially and adversely affect the
interest of any Noteholder or any Swap Counterparty.
(c) This Agreement (other than Sections 2.1 and 2.2 above) may also be
amended from time to time by the Issuer, the holder of the Excess Distribution
Certificate, the Servicer, the Administrator, the Indenture Trustee and the
Eligible Lender Trustee, and Sections 2.1 and 2.2 above may also be amended by
the Eligible Lender 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, for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Agreement or of
modifying in any manner the rights of the Noteholders; provided, however, that
no such amendment shall (i) 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 any Swap Counterparty, or (ii) reduce the aforesaid
percentage of the Outstanding Amount of the Notes, the Noteholders of which are
required to consent to any such amendment, without the consent of all
outstanding Noteholders.
(d) Promptly after the execution of any such amendment (or, in the case of
the Rating Agencies, fifteen days prior thereto), the Eligible Lender Trustee
shall furnish written notification of the substance of such amendment to the
holder of the Excess Distribution Certificate, the Indenture Trustee, each Swap
Counterparty and each of the Rating Agencies.
(e) It shall not be necessary for the consent of 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.
(f) Prior to the execution of any amendment to this Agreement, the Eligible
Lender Trustee and the Indenture Trustee shall be entitled to receive and rely
upon an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement and the Opinion of Counsel referred to
in Section 7.1(i) above. The Eligible Lender Trustee and the Indenture Trustee
may, but shall not be obligated to, enter into any such amendment which affects
the Eligible Lender Trustee's or the Indenture Trustee's, as applicable, own
rights, duties or immunities under this Agreement or otherwise.
(g) The parties to this Agreement acknowledge and agree that, if any class
of Reset Rate Notes is denominated in a currency other than U.S. Dollars during
any related Reset Period (including the initial Reset Periods), and the Trust
enters in a Currency Swap Agreement (including the Initial Currency Swap
Agreements), pursuant to such Currency Swap Agreement, the Trust has agreed or
will agree (i) to notify the related Swap Counterparty of any amendment,
modification or supplement to this Agreement or any other Basic Document that
would
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materially adversely affect (A) the related Swap Counterparty's ability to
enforce or protect its rights or remedies under the related Currency Swap
Agreement, (B) the ability of the Trust to timely and fully perform its
obligations under the related Currency Swap Agreement, or (C) any of the terms
of the Indenture or this Agreement which relates to payments to or rights of the
related Swap Counterparty under either such agreement, and (ii) to obtain the
written consent of the related Swap Counterparty to any such amendment,
modification or supplement. Any such amendment, modification or supplement
without the written consent of the related Swap Counterparty shall be void and
unenforceable.
(h) Accordingly, the parties to the Agreement acknowledge and agree that
each Currency Swap Counterparty will be a third-party beneficiary of this
Agreement to the extent of its rights under the related Currency Swap Agreement
in respect of this Agreement and shall be entitled to enforce such rights under
this Agreement. Notices to a Currency Swap Counterparty under this Section 8
shall be addressed to the applicable Currency Swap Counterparty at the address
listed in the related Swap Confirmation.
Section 8.6 Assignment. Notwithstanding anything to the contrary contained
herein, except as provided in Section 4.3 of the Servicing Agreement and Section
4.3 of this Agreement, this Agreement may not be assigned by the Depositor, the
Administrator or the Servicer. This Agreement may be assigned by the Eligible
Lender Trustee only to its permitted successor pursuant to the Trust Agreement.
Section 8.7 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 Eligible Lender Trustee and for the benefit of the
Excess Distribution Certificateholder, the Noteholders and each Swap
Counterparty, 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 8.8 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, the Sale Agreement and any Additional Sale
Agreement and the Depositor's rights under the Purchase Agreements and any
Additional Purchase Agreements 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 8.9 Nonpetition Covenants.
(a) Notwithstanding any prior termination of this Agreement, the Servicer,
the Administrator, the Eligible Lender Trustee, the Indenture Trustee and the
Depositor shall not, prior to the date which is 367 days after the payment in
full of the Notes, acquiesce, petition or otherwise invoke or cause the Issuer
to invoke the process of any court or government authority
42
for the purpose of commencing or sustaining a case against the Issuer under any
Federal or state bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar official
of the Issuer or any substantial part of its property, or ordering the winding
up or liquidation of the affairs of the Issuer. The foregoing shall not limit
the rights of the Servicer, the Administrator, the Eligible Lender Trustee, the
Indenture Trustee and the Depositor to file any claim in, or otherwise take any
action with respect to, any insolvency proceeding that was instituted against
the Issuer by a Person other than the Servicer, the Administrator, the Eligible
Lender Trustee or the Depositor.
(b) Notwithstanding any prior termination of this Agreement, the Servicer,
the Administrator, the Issuer and the Eligible Lender Trustee shall not, prior
to the date which is 367 days after the payment in full of the Notes, 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. The
foregoing shall not limit the rights of the Servicer, the Administrator, the
Issuer and the Eligible Lender Trustee to file any claim in, or otherwise take
any action with respect to, any insolvency proceeding that was instituted
against the Issuer by a Person other than the Servicer, the Administrator, the
Issuer or the Eligible Lender Trustee.
Section 8.10 Limitation of Liability of Eligible Lender Trustee and
Indenture Trustee.
(a) Notwithstanding anything contained herein to the contrary, this
Agreement has been executed and delivered by Chase Manhattan Bank USA, National
Association, not in its individual capacity but solely in its capacity as
Eligible Lender 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 Eligible Lender 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 executed and delivered by Deutsche Bank Trust Company
Americas, not in its individual capacity but solely as Indenture Trustee, and in
no event shall Deutsche Bank Trust Company Americas 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.
(c) The rights of and protections of the Indenture Trustee under the
Indenture shall be incorporated as though explicitly set forth herein.
Section 8.11 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO THE CONFLICT OF LAW
PROVISIONS THEREOF, AND THE
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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. Each of the parties named on the signature pages to this
Agreement by execution of this Agreement agrees, for the benefit of the
Administrator and the other signatories hereto, to be bound by the terms of this
Agreement and the other Basic Documents to the extent reference is made in such
document to such party.
Section 8.15 Additional Reset Rate Note Agreements.
(a) The parties hereto acknowledge that the Administrator is authorized,
from time to time, either to enter into or to instruct the Eligible Lender
Trustee to enter into (in either case, not in their respective individual
capacities but solely on behalf of the Issuer) (i) Remarketing Agreements, (ii)
Remarketing Agency Agreements, and (iii) Swap Agreements, in addition to the
Initial Currency Swap Agreements, with one or more Eligible Swap Counterparties
on any Reset Date, and from time to time in the event a Swap Agreement
terminates prior to the end of the related Reset Period when (1) any class of
Reset Rate Notes is to bear interest at a fixed rate during the upcoming Reset
Period, (2) any class of Reset Rate Notes is in Foreign Exchange Mode, or (3)
the Remarketing Agents (in consultation with the Administrator) determine that
it would be in the best interest of the Issuer based on then-current market
conditions during any Reset Period when any class of Reset Rate Notes bears
interest at a floating rate of interest, or if otherwise required to satisfy the
Rating Agency Condition, to hedge some or all of the basis risk; provided,
however, that all such Swap Agreements are entered into using the procedures set
forth in the Reset Rate Note Procedures and the Rating Agency Condition is met.
(b) Subject to the provisions of Section 13 of the Reset Rate Note
Procedures, the Eligible Lender Trustee hereby agrees (not in its individual
capacity but solely as Eligible Lender Trustee on behalf of the Issuer) to enter
into such Swap Agreements, Remarketing Agreements and Remarketing Agency
Agreements on behalf of the Issuer as the Administrator shall direct in writing
from time to time.
(c) The parties acknowledge that at any time and from time to time, the
Administrator may determine to seek an alternate listing for the Notes on a
stock exchange of international standing, and the Administrator shall notify the
parties to this Agreement of any such transfer.
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Section 8.16 Excess Distribution Certificate. The holder of the Excess
Distribution Certificate, as evidenced by its agreement to accept the rights
conferred under the Excess Distribution Certificate, is hereby deemed to accept
all obligations of the Depositor under this Agreement.
Section 8.17 Additional Sale Agreements. The parties hereto acknowledge
that the Administrator is authorized, from time to time during the Funding
Period, to instruct the Eligible Lender Trustee to enter into, for the benefit
of the Issuer, Additional Sale Agreements.
[Remainder of this page intentionally left blank.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the date first above written.
SLM FUNDING LLC,
in its capacity as Depositor and as initial
holder of the Excess Distribution Certificate
By: /s/ XXXX X. XXXXXX
-----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
XXXXXX XXX, INC.,
By: /s/ XXXXX X. XXXXXX
-----------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
SLM STUDENT LOAN TRUST 2004-5
By: CHASE MANHATTAN BANK USA, NATIONAL
ASSOCIATION, not in its individual capacity
but solely as Eligible Lender Trustee
By: /s/ XXXX X. XXXXXX
-----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
CHASE MANHATTAN BANK USA, NATIONAL
ASSOCIATION,
not in its individual capacity but solely as
Eligible Lender Trustee
By: /s/ XXXX X. XXXXXX
-----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
46
DEUTSCHE BANK TRUST
COMPANY AMERICAS,
not in its individual capacity but solely as
Indenture Trustee
By: /s/ XXXXX XXXXXXX
-----------------------------------------
Name: Xxxxx Xxxxxxx
Title: Vice President
47
