EXHIBIT 99.3
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SLM STUDENT LOAN TRUST 2004-7
ADMINISTRATION AGREEMENT
DATED AS OF JULY 28, 2004
AMONG
SLM FUNDING LLC
SLM STUDENT LOAN TRUST 2004-7
CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION,
AS ELIGIBLE LENDER TRUSTEE
▇▇▇▇▇▇ ▇▇▇, INC.
AND
DEUTSCHE BANK TRUST COMPANY AMERICAS,
AS INDENTURE TRUSTEE
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TABLE OF CONTENTS
Dated as of July 28, 2004
ARTICLE I
Section 1.1 Definitions and Usage........................................................................ 2
ARTICLE II
Section 2.1 Duties with Respect to the Indenture......................................................... 2
Section 2.2 Duties with Respect to the Issuer............................................................ 4
Section 2.3 Establishment of Trust Accounts.............................................................. 5
Section 2.4 Collections.................................................................................. 8
Section 2.5 Application of Collections................................................................... 8
Section 2.6 Additional Deposits.......................................................................... 8
Section 2.7 Distributions................................................................................ 9
Section 2.8 Priority of Distributions.................................................................... 10
Section 2.9 Reserve Account.............................................................................. 11
Section 2.10 Investment Earnings; Other Trust Accounts.................................................... 13
Section 2.11 Statements to Excess Distribution Certificateholder and Noteholders.......................... 13
Section 2.12 Non-Ministerial Matters...................................................................... 15
Section 2.13 Exceptions................................................................................... 15
Section 2.14 Compensation................................................................................. 15
Section 2.15 Servicer and Administrator Expenses.......................................................... 16
ARTICLE III
Section 3.1 Administrator's Certificate; Servicer's Report............................................... 16
Section 3.2 Annual Statement as to Compliance; Notice of Default; Financial Statements................... 17
Section 3.3 Annual Independent Certified Public Accountants' Report...................................... 18
ARTICLE IV
Section 4.1 Representations of Administrator............................................................. 18
Section 4.2 Liability of Administrator; Indemnities...................................................... 19
Section 4.3 Merger or Consolidation of, or Assumption of the............................................. 21
Section 4.4 Limitation on Liability of Seller, Administrator and Others.................................. 22
Section 4.5 Administrator May Own Certificates or Notes.................................................. 23
Section 4.6 ▇▇▇▇▇▇ Mae, Inc. Not to Resign as Administrator.............................................. 23
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ARTICLE V
Section 5.1 Administrator Default........................................................................ 23
Section 5.2 Appointment of Successor..................................................................... 24
Section 5.3 Notification to Noteholders and Certificateholders........................................... 25
Section 5.4 Waiver of Past Defaults...................................................................... 25
ARTICLE VI
Section 6.1 Termination.................................................................................. 26
ARTICLE VII
Section 7.1 Protection of Interests in Trust............................................................. 26
ARTICLE VIII
Section 8.1 Independence of the Administrator............................................................ 29
Section 8.2 No Joint Venture............................................................................. 29
Section 8.3 Other Activities of Administrator............................................................ 29
Section 8.4 Powers of Attorney........................................................................... 29
Section 8.5 Amendment.................................................................................... 29
Section 8.6 Assignment................................................................................... 30
Section 8.7 Limitations on Rights of Others.............................................................. 31
Section 8.8 Assignment to Indenture Trustee.............................................................. 31
Section 8.9 Nonpetition Covenants........................................................................ 31
Section 8.10 Limitation of Liability of Eligible Lender Trustee and Indenture Trustee..................... 32
Section 8.11 Governing Law................................................................................ 32
Section 8.12 Headings..................................................................................... 32
Section 8.13 Counterparts................................................................................. 32
Section 8.14 Severability................................................................................. 32
Section 8.15 Excess Distribution Certificate.............................................................. 32
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ADMINISTRATION AGREEMENT
SLM Student Loan Trust 2004-7 Administration Agreement, dated as of July
28, 2004 (this "Agreement"), among SLM Funding LLC (the "Depositor"), SLM
Student Loan Trust ▇▇▇▇-▇ (▇▇▇ "▇▇▇▇▇▇"), ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 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"), ▇▇▇▇▇▇ ▇▇▇, Inc., not in its individual capacity but solely in its
capacity as servicer (in such capacity, the "Servicer"), and ▇▇▇▇▇▇ Mae, Inc.,
not its individual capacity but solely in its capacity as administrator (in such
capacity, the "Administrator").
RECITALS
WHEREAS, pursuant to an Indenture, dated as of July 1, 2004 (the
"Indenture"), among the Issuer, the Indenture Trustee and the Eligible Lender
Trustee, the Issuer (a) is issuing (i) six classes of its Student Loan-Backed
Notes (collectively, the "Notes") pursuant to the Indenture, and (ii) an Excess
Distribution Certificate (the "Excess Distribution Certificate") pursuant to the
Short-Form Trust Agreement, dated as of July 9, 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
July 28, 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 the
Trust Agreement, the Servicing Agreement, the Sale Agreement, the Indenture and
the Interest Rate Cap Agreement;
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 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 Agreement. 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 the 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 the 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);
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(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);
(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 of 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 delivering 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
obtaining any Independent Certificates and/or 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);
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(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);
(s) undertaking all obligations required to be performed by
the Administrator, including, without limitation, preparing and delivering
all notices, communications, information and calculations, under the
Interest Rate Cap Agreement;
(t) 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
Counterparty;
(u) calculating on each Distribution Date, as applicable, the
Principal Distribution Amount and any applicable Specified Reserve Account
Balance; and
(v) calculating on or before each Distribution Date, as
applicable, any amounts to be deposited in, or withdrawn from, each Trust
Account.
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 LIBOR Determination Date
the applicable rate of interest for the applicable Accrual Period, 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, opinions and
notices as it shall be the duty of the Issuer, the Eligible Lender Trustee
or the Administrator 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 Excess Distribution Certificateholder, if not then held by the
Depositor.
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(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
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 any notices required to be delivered by
the Issuer to the Interest Rate Cap Counterparty under the Interest Rate
Cap Agreement, as applicable, including, without limitation, any notice
obligations specified in the Interest Rate Cap Agreement in the event of a
default by the Interest Rate Cap Counterparty.
(f) 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"; and
(iii) a "Capitalized Interest Account".
(b) Funds on deposit in each account specified in Section
2.3(a) above (collectively, the "Trust Accounts") shall be invested by the
Indenture Trustee (or any custodian or designated agent with respect to
any amounts on deposit in such accounts) in Eligible Investments
(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 each Distribution
Date, all interest and other investment income (net of losses and
investment expenses) on funds on deposit therein
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shall be deposited into the Collection Account and shall be deemed to
constitute a portion of the Available Funds for such Distribution Date.
Other than as described in the following proviso or as otherwise permitted
by the Rating Agencies, funds on deposit in the Trust Accounts shall 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. Funds deposited in a Trust Account on a Business Day
which immediately precedes a Monthly Servicing Payment Date or
Distribution Date upon the maturity of any Eligible Investments are not
required to be invested overnight.
(c) 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 Noteholders and the Issuer. 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 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,
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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.
(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
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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.
Section 2.4 Collections. The Servicer shall remit within two Business Days
of receipt thereof to the Collection Account all payments by or on behalf of the
Obligors with respect to the Trust Student Loans (other than Purchased Student
Loans), and all Liquidation Proceeds, both as collected during the Collection
Period, 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.
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 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 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 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)
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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; 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%.
Section 2.7 Distributions.
(a) On or before the second 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 second Business Day preceding each
Distribution Date; and
(ii) calculate, in each case, if and to the extent
applicable, the Class A Noteholders' Distribution Amount, the Class
B Noteholders' Distribution Amount and the Specified Reserve Account
Balance on or before the second 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 Officers' 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) The Administrator shall instruct the Indenture Trustee in
writing no later than one 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 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
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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 plus amounts
transferred from the Reserve Account pursuant to Section 2.9, and through
the Distribution Date in July 2006, amounts transferred from the
Capitalized Interest Account pursuant to Section 2.10(a) with respect to
clauses 2.8(c) and 2.8(d) below. The amount of Available Funds in the
Collection Account for each Distribution Date will be distributed pursuant
to the priority of distributions set forth under Section. 2.8 below. The
Indenture Trustee shall comply with such instructions received by the
Administrator.
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 Class A Noteholders, the Class A Noteholders'
Interest Distribution Amount, pro rata, based on the amounts payable as
Class A Noteholders' Interest Distribution Amount;
(d) 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;
(e) to Class A-1 Noteholders, until paid in full, the Class A
Noteholders' Principal Distribution Amount;
(f) to Class A-2 Noteholders, until paid in full, any
remaining Class A Noteholders' Principal Distribution Amount;
(g) to Class A-3 Noteholders, until paid in full, any
remaining Class A Noteholders' Principal Distribution Amount;
(h) to Class A-4 Noteholders, until paid in full, any
remaining Class A Noteholders' Principal Distribution Amount;
(i) to Class A-5 Noteholders, until paid in full, any
remaining Class A Noteholders' Principal Distribution Amount;
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(j) to Class B Noteholders, until paid in full, the Class B
Noteholders' Principal Distribution Amount;
(k) to the Reserve Account, the amount, if any, necessary to
reinstate the balance of the Reserve Account to the Specified Reserve
Account Balance;
(l) to the Servicer, the aggregate unpaid amount of the
Carryover Servicing Fee, if any; and
(m) to the Excess Distribution Certificateholder, any
remaining amounts after application of the preceding clauses; provided,
that any amount owing to the Interest Rate Cap Counterparty as a
termination payment shall be paid from such remaining amounts prior to the
payment to the Excess Distribution Certificateholder.
Notwithstanding the foregoing:
(x) If (i) on any Distribution Date following distributions under
clauses 2.8(a) through (i) above to be made on such 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 would be in EXCESS OF
(A) the sum of (1) the outstanding principal balance of the Trust Student Loans,
(2) any accrued but unpaid interest on the Trust Student Loans as of the last
day of the related Collection Period and (3) the balance of the Reserve Account
on such Distribution Date following those distributions required to be made
under clauses 2.8(a) through (i) above, MINUS (B) the Specified Reserve Account
Balance 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 (i) or (ii) no longer exist, amounts on deposit in the Collection
Account and the Reserve Account shall be applied on such Distribution Date to
the payment of the Class A Noteholders' Distribution Amount before any amounts
are applied to the payment of the Class B Noteholders' Distribution Amount; and
(y) 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 clauses 2.8(e) through (i) 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(j) 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.
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
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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(d) above on
any Distribution Date (after giving effect to required distributions 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 such amounts in the same order and priority as is set forth in
Sections 2.8(a) through 2.8(d) 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 Sections 2.8(e), 2.8(f), 2.8(g), 2.8(h) or 2.8(i)
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 deficiency, 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 Sections 2.8(e) through 2.8(i)
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(j) 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 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 Section 2.9(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) owing
or to be distributed hereunder or under the Indenture to Noteholders, the
Servicer, the Administrator or the Interest Rate Cap Counterparty, 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
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to pay any Carryover Servicing Fees. 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).
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, 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(a) The
Administrator will instruct the Indenture Trustee to (1) withdraw all Investment
Earnings, if any, on deposit in each existing Trust Account on each Distribution
Date; (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(c) and 2.8(d) on a
Distribution Date (prior to any distributions 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 amount equal to such deficiencies, to the extent
of funds available therein, and to distribute 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 second,
so long as neither of the conditions described in clauses (i) or
(ii) of paragraph (x) in Section 2.8 have 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 July 2006, 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) Collection Account. On the Closing Date, the Issuer shall
deposit $34,643,112.43 into the Collection Account. This amount will be
included with other Available Funds on the first 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
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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;
(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;
(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) [Reserved];
(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
or SLM ECFC from the Issuer during such Collection Period;
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(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; and
(o) the balance of Trust Student Loans that are delinquent in
each delinquency period as of the end of that Collection Period.
Each amount set forth pursuant to clauses (a), (b), (c), (f), (h), (i)
and (l) above shall be expressed as a dollar amount per $1,000 of original
principal balance of the applicable Note. A copy of the statements referred to
above may be obtained by any Excess Distribution Certificateholder or 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 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 $20,000 for
each Collection Period payable on the
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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 Certificateholders and the Noteholders,
as the case may be.
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, 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 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
Three-Month LIBOR or Two-Month LIBOR, as applicable, for the first Accrual
Period and for each subsequent Accrual Period shall calculate, on each LIBOR
Determination Date during such Accrual Period, Three-Month LIBOR.
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(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.
(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.
17
(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.
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. ▇▇▇▇▇▇ ▇▇▇, 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.
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(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 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. 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 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.
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(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 and the Noteholders and any of
the officers, directors, employees and agents of the Issuer from and against any
and all costs, expenses, losses, claims, damages and liabilities to the extent
that such cost, expense, loss, claim, damage or liability arose out of, or was
imposed upon any such Person through, the gross negligence, willful misfeasance
or bad faith of the Administrator in the performance of its duties under this
Agreement or by reason of reckless disregard of its obligations and duties
hereunder or thereunder.
(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;
20
(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
(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 ▇▇▇▇▇▇ ▇▇▇, Inc., executes an agreement that states
expressly that such Person assumes to perform every
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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
Administrator, if other than ▇▇▇▇▇▇ 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 ▇▇▇▇▇▇ ▇▇▇,
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 ▇▇▇▇▇▇ 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.
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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 Administrator or an Affiliate
thereof, except as expressly provided herein in any other Basic Document.
Section 4.6 ▇▇▇▇▇▇ ▇▇▇, Inc. Not to Resign as Administrator. Subject to
the provisions of Section 4.3 above, ▇▇▇▇▇▇ 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
▇▇▇▇▇▇ ▇▇▇, Inc. or its properties. Notice of any such determination permitting
or requiring the resignation of ▇▇▇▇▇▇ 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 ▇▇▇▇▇▇ ▇▇▇, 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 either 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
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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 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
24
the time when the predecessor Administrator has ceased to act as Administrator
in accordance with this Section, the Indenture Trustee without further action
shall automatically be appointed the successor Administrator and the Indenture
Trustee shall be entitled to the Administration Fee. Notwithstanding the above,
the Indenture Trustee shall, if it shall be unwilling or legally unable so to
act, appoint or petition a court of competent jurisdiction to appoint any
established institution whose regular business shall include the servicing of
student loans, as the successor to the Administrator under this Agreement.
(b) Upon appointment, the successor Administrator (including the
Indenture Trustee acting as successor Administrator), shall be the successor in
all respects to the predecessor Administrator and shall be subject to all the
responsibilities, duties and liabilities placed on the predecessor Administrator
that arise thereafter or are related thereto and shall be entitled to an amount
agreed to by such successor Administrator (which shall not exceed the
Administration Fee unless such compensation arrangements will not result in a
downgrading or withdrawal of any rating on the Notes or the 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.
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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 Initial Pool
Balance, of the percentage that the then outstanding Pool Balance bears to the
Initial Pool Balance. As of the last day of any Collection Period immediately
preceding a Distribution Date as of which the then outstanding Pool Balance is
10% or less of the Initial Pool Balance, the 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 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
26
delivered) to 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.
27
(g) Upon reasonable notice, the Servicer shall permit the Indenture
Trustee and its agents at any time during normal business hours to inspect,
audit and make copies of and abstracts from the Servicer's records regarding any
Trust Student Loan.
(h) Upon request, at any time the 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, 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 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
28
to Section 12(b) or Section 12(g) of the Exchange Act within the time periods
specified in such sections.
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, 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 the Interest Rate Cap Agreement, (2) the ability of the
Trust to timely and fully perform its obligations under the Interest Rate Cap
Agreement or (3) any of the Trust's obligations under the Interest Rate Cap
Agreement or any cap transaction under such agreement.
29
Any such amendment, modification or supplement without the consent of the
Interest Rate Cap Counterparty shall not be binding on the Interest Rate Cap
Counterparty.
(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, 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.
(c) This Agreement (other than Sections 2.1 and 2.2 above) may also
be amended from time to time by the Issuer, the Excess Distribution
Certificateholder, 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 (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 Excess Distribution Certificateholder, the Indenture Trustee 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.
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.
30
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 and the Noteholders, as third party
beneficiaries, and nothing in this Agreement, whether express or implied, shall
be construed to give to any other Person any legal or equitable right, remedy or
claim in the Trust Estate or under or in respect of this Agreement or any
covenants, conditions or provisions contained herein.
Section 8.8 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 and the Sale Agreement and the Depositor's
rights under the Purchase Agreement to the Indenture Trustee. The Servicer
hereby acknowledges and consents to the assignment by the Issuer to the
Indenture Trustee pursuant to the Indenture for the benefit of the Noteholders
of any and all of the Issuer's rights and obligations under this Agreement and
under the Servicing Agreement.
Section 8.9 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 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.
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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 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 Excess Distribution Certificate.
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The Excess Distribution Certificateholder, 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.
[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 Excess Distribution
Certificateholder
By: /s/ J. ▇▇▇▇▇ ▇▇▇▇▇▇
Name: J. ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
▇▇▇▇▇▇ ▇▇▇, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
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SLM STUDENT LOAN TRUST 2004-7
By: CHASE MANHATTAN BANK USA, NATIONAL
ASSOCIATION, not in its individual
capacity but solely as Eligible Lender
Trustee
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
CHASE MANHATTAN BANK USA, NATIONAL
ASSOCIATION, not in its individual
capacity but solely as Eligible
Lender Trustee
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
DEUTSCHE BANK TRUST COMPANY AMERICAS,
not in its individual capacity but
solely as Indenture Trustee
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇▇▇▇
Title: Assistant Vice President
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